Schools near metro will get more housing without overcrowding relief

[Anonymous]

Anonymous wrote:Nobody will want to live here once they raise property taxes to cover the developer subsidies so that the problem will be solved.

Exactly and with MCPS school overcrowding and leadership issues - it's a problem that will solve itself. Everyone will move.

[Anonymous]

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Anonymous wrote:Therefore, a school would need to be built in Bethesda to be a result of construction in Bethesda (generally speaking).

No it wouldn't. Again, MONTGOMERY COUNTY government, MONTGOMERY COUNTY revenue, MONTGOMERY COUNTY public schools.

I do not understand your point.

A development in one area is not the cause of an expenditure in another area.
I'll try again. An apartment is built in Damascus that does not result in a single student added to the local schools, but an assessment is collected nevertheless. It did not cause an expenditure on school construction in Takoma Park.

The thing about Montgomery County Public Schools is, it doesn't have separate capital or operational funding streams for schools in Damascus, schools in Takoma Park, schools in [wherever else in Montgomery County].

If, as you seem to be saying, MCPS relies on fees from developers to fund schools, we should be encouraging more development everywhere even if the assessment does not fully cover cost. Otherwise there would be 0$ to address overcrowded school.

As has been discussed at length, the fees don’t even cover the cost to build schools for each new housing unit built. The capital budget gets worse whenever a developer builds housing because of what is in effect a subsidy. The shortfall results in delayed projects, so you get overcrowding. Get it now?

(The capital budget also relies on recordation tax revenue, state funding, and bonds, but there’s only so much funding from each source to go around. That money funds construction of new schools and renovations of existing schools. You can’t use impact fee funding for renovations for a variety of very good reasons.)

[Anonymous]

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Anonymous wrote:I just don’t get why anyone would blindly support new developments without the infrastructure (like schools) to support it. Makes zero sense to me.

Montgomery County has NEVER built the schools before building the housing. Never.

Nobody is saying that Montgomery County needs to build the schools before the housing. However, it is reasonable to expect developers to set aside money or to designate a plot of land that can be used for future schools.

That is not happening.

Yes it is.

"Development Impact Taxes are, set by the Montgomery County Council, assessed on new residential and commercial buildings and additions to commercial buildings in the county to fund, in part, the improvements necessary to increase the transportation or public-school systems capacity, thereby allowing development to proceed."
https://www.montgomerycountymd.gov/DPS/fees/Taxes.html

What developers are paying is a fraction of what costs to support the students that new development generates. The county loses money on every housing unit it adds once you account for school costs. That’s a fact.

So two things:
1. The PP I was responding to said that developers are not required to set aside money to address schools. They are. That was false. You are now making a different point.
2. I genuinely and sincerely am interested in seeing anything that supports your "fact" that adding housing loses money for the county. And as you say not just theoretically or some, but "every unit" so indesputably true that "it is fact."

To your second point, look at the current impact fees and the average per seat cost of school construction. The impact fees are less than the average per seat cost of school construction. The county just lowered the impact fees again last year because school construction costs spiked and they didn’t want to burden developers with the cost increase. That impact fee cut last year was on top of the impact fee cut that they did three years ago.

There is a big difference between saying the impact fees don't meet per pupil cost and saying that the county loses money on housing units. Two erroneous assumptions off the top of my head: 1) not every unit results in a student; 2) It does not take into account ongoing tax revenue

I didn’t say pupil costs. I said average per seat construction costs. If impact fees are below cost recovery levels (which they are), then the county loses money every time it adds a housing unit. It is simple math. If fees are below cost recovery, the difference must be financed through debt issuance or taken from somewhere else. If it’s financed, then debt service costs eat away at the rest of the budget. (There’s also the choice of not building schools at all but that’s a bad outcome)

Ongoing tax revenue is going to support other services for new residents. For very expensive housing, ongoing tax revenue exceeds what services residents consume fairly quickly. For less expensive housing, it may take a long time. Either way, if impact fees are below recovery costs, something else gets hit or we don’t build schools.

And remember none of these fee cuts caused developers to lower prices or push the housing market into surplus. The fee cuts just made the developers’ profits bigger. It’s good for the county to spend money to achieve a public policy goal (lower housing prices in this case) but it’s not good for the county to spend scarce funds subsidizing developers to build high-end housing.

I appreciate your explanation. But I still disagree with the bolded. It is true that the discrete costs for building a new school are not explicitly met by new development, at this particular time. That remains a very different thing that the county as a whole losing money as a result of the development. For example, counties and municipalities frequently subsidize development on all scales (Amazon HQ, smaller cities attracting and retaining other company HQs, entertainment venues.) It is an immediate loss for a long term net gain.

You can’t compare commercial real estate and residential. Commercial consumes little in the way of services but pays a lot in tax revenue and has a high multiplier. The opposite is true of residential, and it’s worse when we subsidize developers to build market rate housing (income restricted is a different story).

My point was that there are multiple circumstance in which counties/municipalities will SPEND money for long term gain(above examples, building a new park, offering more city services, etc). You are talking about an example where a place is paying no money at all while still recouping a percentage of potential future cost.

To not have 100% immediate cost recovery (that is only hypothetical) does not in any way make something a net loss overall.

Your approach makes almost all housing units a short-term loss and causes the county to accrue debt service costs, which are deadweight costs. The benefit of your approach accrues almost entirely to the developer with costs imposed on everyone else.

I'm not at all sure what you think "my approach" is? I don't have one.

But I will say that my understanding is that there is in fact ZERO short term loss as a direct result of this development? There would only be any potential temporary loss (in the sense that the cost is not recovered in advance by this particular assessment) IF a school is built immediately after the development.

That’s an incorrect understanding, because the county has to borrow to pay for school construction and pay interest. All residential development that requires school additions to be financed results in some unrecoverable deadweight costs to the county (accruing to the benefit of bond buyers and developers). Over time, some residential development may be net positive, but that really depends on residents’ incomes and to a lesser extent turnover rates. Even for those projects, the county still accrued the short-term deadweight costs.

Let's get real specific here. Can you cite to any particular development project in MoCo in the past decade that led directly to "short term deadweight costs"? All of the development in downtown Bethesda, for example. What was this "short term deadweight cost"?

All recent residential development that paid less than recovery costs for adding school capacity.

I think you are missing my point. Where is the money loss?
To my knowledge no new schools were built. As a result, the county actually banked more money in school assessments to build future schools. No expenditure was made, so no debt was incurred.

The money loss is the debt service (principal plus interest, and specifically the interest). The county isn’t “banking money.” If you save $5 but the thing you’re paying for is $7, you’re $2 in the red. Read up on public finance if you need more detail.

Where is the expenditure that incurs the debt? For example, several new multi-family apartments were built in Rockville (I understand this is not MoCo jurisdiction). An impact fee was assessed. No new school was built. Where is the loss?

That’s right. So when county has to build in Clarksburg and developers don’t pay in enough, Wootton, Magruder, Eastern, and Damascus all suffer.

What is right? Where is the loss? Where is the burden on those other schools?

You may be too dense to engage in this conversation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Therefore, a school would need to be built in Bethesda to be a result of construction in Bethesda (generally speaking).

No it wouldn't. Again, MONTGOMERY COUNTY government, MONTGOMERY COUNTY revenue, MONTGOMERY COUNTY public schools.

I do not understand your point.

A development in one area is not the cause of an expenditure in another area.
I'll try again. An apartment is built in Damascus that does not result in a single student added to the local schools, but an assessment is collected nevertheless. It did not cause an expenditure on school construction in Takoma Park.

The thing about Montgomery County Public Schools is, it doesn't have separate capital or operational funding streams for schools in Damascus, schools in Takoma Park, schools in [wherever else in Montgomery County].

If, as you seem to be saying, MCPS relies on fees from developers to fund schools, we should be encouraging more development everywhere even if the assessment does not fully cover cost. Otherwise there would be 0$ to address overcrowded school.

As has been discussed at length, the fees don’t even cover the cost to build schools for each new housing unit built. The capital budget gets worse whenever a developer builds housing because of what is in effect a subsidy. The shortfall results in delayed projects, so you get overcrowding. Get it now?

(The capital budget also relies on recordation tax revenue, state funding, and bonds, but there’s only so much funding from each source to go around. That money funds construction of new schools and renovations of existing schools. You can’t use impact fee funding for renovations for a variety of very good reasons.)

I do not get it. And sincerely I am trying to.

If I need to build a school today, I need funds today. I get funds from development that is permitted today. Therefore I want more development today.

(I understand that over the long term more development will increase the need to build more schools. That is why the impact fee exists. But also over the long term that development will generate more tax revenue overall.)

[Anonymous]

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Anonymous wrote:I just don’t get why anyone would blindly support new developments without the infrastructure (like schools) to support it. Makes zero sense to me.

Montgomery County has NEVER built the schools before building the housing. Never.

Nobody is saying that Montgomery County needs to build the schools before the housing. However, it is reasonable to expect developers to set aside money or to designate a plot of land that can be used for future schools.

That is not happening.

Yes it is.

"Development Impact Taxes are, set by the Montgomery County Council, assessed on new residential and commercial buildings and additions to commercial buildings in the county to fund, in part, the improvements necessary to increase the transportation or public-school systems capacity, thereby allowing development to proceed."
https://www.montgomerycountymd.gov/DPS/fees/Taxes.html

What developers are paying is a fraction of what costs to support the students that new development generates. The county loses money on every housing unit it adds once you account for school costs. That’s a fact.

So two things:
1. The PP I was responding to said that developers are not required to set aside money to address schools. They are. That was false. You are now making a different point.
2. I genuinely and sincerely am interested in seeing anything that supports your "fact" that adding housing loses money for the county. And as you say not just theoretically or some, but "every unit" so indesputably true that "it is fact."

To your second point, look at the current impact fees and the average per seat cost of school construction. The impact fees are less than the average per seat cost of school construction. The county just lowered the impact fees again last year because school construction costs spiked and they didn’t want to burden developers with the cost increase. That impact fee cut last year was on top of the impact fee cut that they did three years ago.

There is a big difference between saying the impact fees don't meet per pupil cost and saying that the county loses money on housing units. Two erroneous assumptions off the top of my head: 1) not every unit results in a student; 2) It does not take into account ongoing tax revenue

I didn’t say pupil costs. I said average per seat construction costs. If impact fees are below cost recovery levels (which they are), then the county loses money every time it adds a housing unit. It is simple math. If fees are below cost recovery, the difference must be financed through debt issuance or taken from somewhere else. If it’s financed, then debt service costs eat away at the rest of the budget. (There’s also the choice of not building schools at all but that’s a bad outcome)

Ongoing tax revenue is going to support other services for new residents. For very expensive housing, ongoing tax revenue exceeds what services residents consume fairly quickly. For less expensive housing, it may take a long time. Either way, if impact fees are below recovery costs, something else gets hit or we don’t build schools.

And remember none of these fee cuts caused developers to lower prices or push the housing market into surplus. The fee cuts just made the developers’ profits bigger. It’s good for the county to spend money to achieve a public policy goal (lower housing prices in this case) but it’s not good for the county to spend scarce funds subsidizing developers to build high-end housing.

I appreciate your explanation. But I still disagree with the bolded. It is true that the discrete costs for building a new school are not explicitly met by new development, at this particular time. That remains a very different thing that the county as a whole losing money as a result of the development. For example, counties and municipalities frequently subsidize development on all scales (Amazon HQ, smaller cities attracting and retaining other company HQs, entertainment venues.) It is an immediate loss for a long term net gain.

You can’t compare commercial real estate and residential. Commercial consumes little in the way of services but pays a lot in tax revenue and has a high multiplier. The opposite is true of residential, and it’s worse when we subsidize developers to build market rate housing (income restricted is a different story).

My point was that there are multiple circumstance in which counties/municipalities will SPEND money for long term gain(above examples, building a new park, offering more city services, etc). You are talking about an example where a place is paying no money at all while still recouping a percentage of potential future cost.

To not have 100% immediate cost recovery (that is only hypothetical) does not in any way make something a net loss overall.

Your approach makes almost all housing units a short-term loss and causes the county to accrue debt service costs, which are deadweight costs. The benefit of your approach accrues almost entirely to the developer with costs imposed on everyone else.

I'm not at all sure what you think "my approach" is? I don't have one.

But I will say that my understanding is that there is in fact ZERO short term loss as a direct result of this development? There would only be any potential temporary loss (in the sense that the cost is not recovered in advance by this particular assessment) IF a school is built immediately after the development.

That’s an incorrect understanding, because the county has to borrow to pay for school construction and pay interest. All residential development that requires school additions to be financed results in some unrecoverable deadweight costs to the county (accruing to the benefit of bond buyers and developers). Over time, some residential development may be net positive, but that really depends on residents’ incomes and to a lesser extent turnover rates. Even for those projects, the county still accrued the short-term deadweight costs.

Let's get real specific here. Can you cite to any particular development project in MoCo in the past decade that led directly to "short term deadweight costs"? All of the development in downtown Bethesda, for example. What was this "short term deadweight cost"?

All recent residential development that paid less than recovery costs for adding school capacity.

I think you are missing my point. Where is the money loss?
To my knowledge no new schools were built. As a result, the county actually banked more money in school assessments to build future schools. No expenditure was made, so no debt was incurred.

The money loss is the debt service (principal plus interest, and specifically the interest). The county isn’t “banking money.” If you save $5 but the thing you’re paying for is $7, you’re $2 in the red. Read up on public finance if you need more detail.

Where is the expenditure that incurs the debt? For example, several new multi-family apartments were built in Rockville (I understand this is not MoCo jurisdiction). An impact fee was assessed. No new school was built. Where is the loss?

That’s right. So when county has to build in Clarksburg and developers don’t pay in enough, Wootton, Magruder, Eastern, and Damascus all suffer.

What is right? Where is the loss? Where is the burden on those other schools?

You may be too dense to engage in this conversation.

That very well may be true...but I doubt it. I'm trying to understand. Can you answer the question, please?

[Anonymous]

You're dealing with someone playing "earnest truth seeker." They will never answer your question fully and directly. Instead, they will question any portion of your statement they can identify as possibly drawing out the conversation with a bent towards doubt, even if that has already been asked and answered. The aim, in a public debate, is to distract from more valid points against the position they wish to defend. This is an especially effective strategy in an anonymous forum, where they don't need to risk their own public position, and where they can sock-puppet in a few supporting voices.

Better not to engage directly. Instead, every once in a while, come back to see what's been discussed, then collect your thoughts across those without directly quoting them. Keeps you from seeming shrill from having to repeat yourself (part of their strategy), and takes more of their time to try to unpack/attack, as maintaining the strategy might require their posts to be short, identifying only one aspect of your position at a time, as they try to make the more complete picture fade into the background.

[Anonymous]

I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

[Anonymous]

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

[Anonymous]

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Development = housing for people. Almost every Montgomery County resident lives in housing built by a developer. Almost certainly, you live in housing built by a developer. Almost certainly, your housing development was opposed by the people who were living there when the development was built. If current residents had a veto over housing for future residents, you wouldn't be here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

Really? You don’t think that East Bethesda has benefited from the restaurants in Bethesda? Those wouldn’t be there without the office and residential that’s been built in the last 25 years. Same with Woodside and East Silver Spring. We bought where we did with the expectation that there would be more dense development nearby.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

Really? You don’t think that East Bethesda has benefited from the restaurants in Bethesda? Those wouldn’t be there without the office and residential that’s been built in the last 25 years. Same with Woodside and East Silver Spring. We bought where we did with the expectation that there would be more dense development nearby.

I did the same thing you did in another area of MoCo.

But yes, I do think that if people *overall* voted only in their own best interest, we would have very different outcomes in a lot of policy areas. I am very glad that there are voters who do not primarily vote based on impact to their immediate life.

[Anonymous]

It's an unfortunate reality that with representative govenment we don't have the voice we would like on a fine-grained level. One of the necessary inefficiencies (in a way, as true democracy would be entirely unmanageable). However, it would be more representative if we could find a better way to keep influence outsized to the represented population to a minimum. Too much influence by monied folks, whether development interests that press for concessions that undermine long-term community viability, as we have here, or wealthy communities that ensure that they, themselves, are inured from such, tuning a blind eye to those less well off that bear the brunt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

Really? You don’t think that East Bethesda has benefited from the restaurants in Bethesda? Those wouldn’t be there without the office and residential that’s been built in the last 25 years. Same with Woodside and East Silver Spring. We bought where we did with the expectation that there would be more dense development nearby.

I did the same thing you did in another area of MoCo.

But yes, I do think that if people *overall* voted only in their own best interest, we would have very different outcomes in a lot of policy areas. I am very glad that there are voters who do not primarily vote based on impact to their immediate life.

This is where YIMBYism misses chances to connect with people. The growth actually is residents’ interest because there is something in it for them. Instead growth gets framed as a punishment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

Really? You don’t think that East Bethesda has benefited from the restaurants in Bethesda? Those wouldn’t be there without the office and residential that’s been built in the last 25 years. Same with Woodside and East Silver Spring. We bought where we did with the expectation that there would be more dense development nearby.

I did the same thing you did in another area of MoCo.

But yes, I do think that if people *overall* voted only in their own best interest, we would have very different outcomes in a lot of policy areas. I am very glad that there are voters who do not primarily vote based on impact to their immediate life.

This is where YIMBYism misses chances to connect with people. The growth actually is residents’ interest because there is something in it for them. Instead growth gets framed as a punishment.

YIMBYism wouldn't have nearly this problem if it was Yes-to-Responsible-Policy-that-Takes-into-Account-Total-Impact-and-Doesn't-Ignore-Interests-of-Those-Living-in-My-Back-Yard, but YRPTATIDIITLMBY is too much of a mouthful to be catchy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I guess the questions for residents and voters are somewhat basic -

Will your quality of life improve with this additional development?

Will your kids’ quality of life improve with this additional development?

Some people obviously think that the County will get better with more development and some people do not. You can choose what you think is best and vote accordingly.

Thanks for the rational response.

One thing though, if current SFH owners were only to vote based on impact to their own quality of life, most density changes would not happen. That may be OK, but the premise that you vote only for policy that is best for you personally certainly leads to different outcomes than what a voter thinks is best for the whole...

For the last 30 years, it has been clear that our elected officials care nothing for the quality of life for existing residents. It is always about trying out the latest fad from their urban planning major or engaging in a Ponzi scheme of attracting new residents, who then need new infrastructure. Honestly, why do we need to attract more "affordable" housing to MCPS? Basically, it means we then continue to attract even more high cost residents who never pay their way in taxes. We have enough people in that category. And if we continue to cater to them, all of the housing in the Country will become more "affordable" because other people will move out. The death spiral is painful.