Is there a coherent argument that loosening zoning laws will lead to affordable housing in DC?

[Anonymous]

Anonymous wrote:The mayor of Alexandria is pushing this rezoning agenda too, with the same excuse: adding housing will increase affordable housing.

Posters on here need to educate themselves on public finance, HUD, the IRS code and urban planning. Do people really understand how "affordable" units/ multifamily units get built and financed? The municipality cannot just waive a magic wand and build more. A municipality requiring a developer to add affordable units to their condo building, while does happen, does not result in significant additions to the supply of affordable units. A 501c3 developer or a developer will the main purpose of building and maintaining affordable units is rare, as it is usually a money losing enterprise and isn't sustainable. The only ones I have worked with in the DMV that are able to stay in business for any significant amount of time are ones associated with religious organizations and even those do very small projects. Hence government agencies do it.

Traditionally a municipality uses public finance/ tax-exempt financing to fund the development of affordable units. Otherwise your taxes get raised. There isn't room in a budget to build and maintain a building of affordable units. So DC for instance may issue muni bonds to get the money to finance the building. But just like you cannot print as munch money as you want forever you cannot keep issuing tons of bonds, you have to be able to pledge an income/ asset for the debt service. DC has already pledged all real estate taxes on everything, for infinity so a traditional TIF financing won't work (where you are making the prediction that by adding additional density or real property improvements that real estate values and thus real estate taxes will increase, and thus you are pledging that future increase in receivable real estate taxes towards payment of future debt service). This is how Alexandria City and Arlington County are quietly financing the tax incentive/breaks pledged to Amazon for their HQ.

A TIF on future increases in sales tax could work in DC. This is how DC financed improvements to Gallery Place/ Chinatown and the Navy Yard, but that was mainly to attract business. If you build it , they will come so to speak.

With all this in mind, a train of thought in public finance world has been ways to encourage private development to fund and develop affordable housing. Hence the "theory" if a municipality removes zoning restrictions on SFH, then a developer will immediately want to get more bang for their buck, a build a duplex/condo building/apartment building on the same lot. This will thereby increase the number of housing units in a jurisdiction and thereby raise supply and the economic principle is if you raise supple, the price will decrease. And easy peasy if the price on housing goes down then you have more "affordable" housing, and the government didn't have to fund it, organize it or build it. Hurrah. Genius.

But as many posters have pointed out, in a location like this that is so densely populated, that is so highly educated with a very high average income, that is very transient with people moving into the area constantly to work in a new administration or other fed government supporting work, with an ever increasing population, the theories don't equate to reality when the changes are instituted.

What is your definition of "affordable"? It should mean that people who earn 60% of the average income for the area (as defined by HUD) can afford to live there. It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage. Don't play games, that isn't increasing affordable housing whatsoever. That isn't making it easier for your teachers, first responders, elderly on a fixed income, your trash collectors, your grocery store clerks, your restaurant servers, your construction workers, etc who work in your jurisdiction be able to afford a place to live. This just adds to the housing supply so that UMC people have more options. Don't stick the word affordable in front of something, then point fingers when called out that it is disingenuous, purposefully misleading and not pushing the proper agenda at all. Just like bike lanes help poor people get to work.

This is helpful.

I don't know much about this, but I suspect the only way to create affordable housing in a place like DC where people have very high incomes is for the government to start writing checks.

All this stuff about zoning makes very little sense to me. It seems like it's just a way for politicians who don't want to actually spend money on affordable housing to look like they're doing something.

[Anonymous]

Anonymous wrote: It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage.

We have multiple housing cost problems and multiple tools. We have publicly financed housing - Alexandria is putting money into preserving and creating committed AH at various income levels as is DC (and there has just been a big proposal in Md)

But yes creating more market rate units also helps - where do those households who buy the 800K condos (thats only in a few parts of DC of course, condos in most parts of Alexandria are not nearly that expensive) come from? They otherwise would have bought something else, and older condo or a small house. And pushed someone else out, who would then have bought someplace older or further out, displacing someone else.

Yuppies do not spontaneousl generate. Adding new housing, even at the top of the market, has knock on effects.

It also provides tax revenues to help fund AH, as well social services.


Whenever someone proposes committed AH we get complaints about why not just let the market work. Whenever someone proposes ALLOWING market rate housing, by making zoning restrictions less onerous, we get "oh its not affordable enough"

[Anonymous]

Anonymous wrote:
I don't know much about this, but I suspect the only way to create affordable housing in a place like DC where people have very high incomes is for the government to start writing checks.

All this stuff about zoning makes very little sense to me. It seems like it's just a way for politicians who don't want to actually spend money on affordable housing to look like they're doing something.

If you want to learn more about zoning and its impact, you should read Greater Greater Washington.

Zoning basically stops people from supplying housing. You make it harder to supply something, it gets more expensive. Quite simple really.

Of course writing checks would help - but even govt funded housing can only be built where the zoning allows it.

And realistically we can't meet all our housing needs with govt funded housing. We need both.

[Anonymous]

Anonymous wrote:
But as many posters have pointed out, in a location like this that is so densely populated, that is so highly educated with a very high average income, that is very transient with people moving into the area constantly to work in a new administration or other fed government supporting work, with an ever increasing population, the theories don't equate to reality when the changes are instituted.

Average income does not mean housing must be this costly. People move in - other people move out (and the ones who move in would have moved in anyway)

This is all handwaving - it does NOT show any reason why supply and demand does not apply to housing in this area.

Try this

Lets restrict new cars as much as we restrict new housing. Surely with high incomes, and transient people moving in, it will never be possible to reduce the price of cars by ending the restrictions on how many cars are supplied. Its just an excuse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I hear this constantly asserted, as if it were self-evidently true, but cannot figure out how it could possibly be correct.

There's 700,000 people in the District. There's 5 million in the suburbs. If you add 30,000 housing units in DC, they will instantly be soaked up by people in the suburbs looking for shorter commutes.

As people move into DC from Falls Church and Rockville and Fairfax, their old places will open up for other people. Other people will move into those places from suburbs even further out, which will open up slots in places like Chantilly or Columbia or wherever else those people are coming from and that would put downward pressure on housing prices in the suburbs they've left.

But how does any of that lead to affordable housing in DC?

I would like to know the answer to this as well.

Then read this thread, which contains answers to this question.

It doesnt matter how many times its answered, they keep repeating the same question. In the hope someone has not read the whole thread, I guess.

[Anonymous]

Don't upzone, there are so many rich people who want to live here you can NEVER make housing affordable by building more of it.

Don't increase taxes, a tax increase will send affluent people fleeing to the suburbs, and DC will go bankrupt again

Schrodinger's Ward 3.

[Anonymous]

Anonymous wrote:

Anonymous wrote: It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage.

We have multiple housing cost problems and multiple tools. We have publicly financed housing - Alexandria is putting money into preserving and creating committed AH at various income levels as is DC (and there has just been a big proposal in Md)

But yes creating more market rate units also helps - where do those households who buy the 800K condos (thats only in a few parts of DC of course, condos in most parts of Alexandria are not nearly that expensive) come from? They otherwise would have bought something else, and older condo or a small house. And pushed someone else out, who would then have bought someplace older or further out, displacing someone else.

Yuppies do not spontaneousl generate. Adding new housing, even at the top of the market, has knock on effects.

It also provides tax revenues to help fund AH, as well social services.


Whenever someone proposes committed AH we get complaints about why not just let the market work. Whenever someone proposes ALLOWING market rate housing, by making zoning restrictions less onerous, we get "oh its not affordable enough"

ARHA is, and for at least the last 20 years has been, a complete and total mess. I’ve worked with them as bond and general counsel on several projects. PR curated statements that Alexandria City (which would be ARHA) is putting money into creating and preserving affordable housing tells the public nothing. What buildings? What projects? What funds?

[Anonymous]

Anonymous wrote:

Anonymous wrote: It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage.

We have multiple housing cost problems and multiple tools. We have publicly financed housing - Alexandria is putting money into preserving and creating committed AH at various income levels as is DC (and there has just been a big proposal in Md)

But yes creating more market rate units also helps - where do those households who buy the 800K condos (thats only in a few parts of DC of course, condos in most parts of Alexandria are not nearly that expensive) come from? They otherwise would have bought something else, and older condo or a small house. And pushed someone else out, who would then have bought someplace older or further out, displacing someone else.

Yuppies do not spontaneousl generate. Adding new housing, even at the top of the market, has knock on effects.

It also provides tax revenues to help fund AH, as well social services.

Whenever someone proposes committed AH we get complaints about why not just let the market work. Whenever someone proposes ALLOWING market rate housing, by making zoning restrictions less onerous, we get "oh its not affordable enough"

Exactly that.

Proposals to build government-funded affordable housing close to jobs/amenities/transportation?
Social engineering! Crime! My property values!

Proposals to allow property owners to pay for/build housing close to jobs/amenities/transportation?
Not affordable! Only enriches the developers!

What is basically boils down to is: "I don't think people should be allowed to build more housing in my neighborhood."

[Anonymous]

Anonymous wrote:

Anonymous wrote: It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage.

We have multiple housing cost problems and multiple tools. We have publicly financed housing - Alexandria is putting money into preserving and creating committed AH at various income levels as is DC (and there has just been a big proposal in Md)

But yes creating more market rate units also helps - where do those households who buy the 800K condos (thats only in a few parts of DC of course, condos in most parts of Alexandria are not nearly that expensive) come from? They otherwise would have bought something else, and older condo or a small house. And pushed someone else out, who would then have bought someplace older or further out, displacing someone else.

Yuppies do not spontaneousl generate. Adding new housing, even at the top of the market, has knock on effects.

It also provides tax revenues to help fund AH, as well social services.


Whenever someone proposes committed AH we get complaints about why not just let the market work. Whenever someone proposes ALLOWING market rate housing, by making zoning restrictions less onerous, we get "oh its not affordable enough"

Why not grandfather in long term residents , tax breaks etc. When you say pushed out it sort of implies they arent selling. A lot of people sell for a profit. Incentivize them to stay if you value them in the city.

[Anonymous]

Anonymous wrote:The mayor of Alexandria is pushing this rezoning agenda too, with the same excuse: adding housing will increase affordable housing.

Posters on here need to educate themselves on public finance, HUD, the IRS code and urban planning. Do people really understand how "affordable" units/ multifamily units get built and financed? The municipality cannot just waive a magic wand and build more. A municipality requiring a developer to add affordable units to their condo building, while does happen, does not result in significant additions to the supply of affordable units. A 501c3 developer or a developer will the main purpose of building and maintaining affordable units is rare, as it is usually a money losing enterprise and isn't sustainable. The only ones I have worked with in the DMV that are able to stay in business for any significant amount of time are ones associated with religious organizations and even those do very small projects. Hence government agencies do it.

Traditionally a municipality uses public finance/ tax-exempt financing to fund the development of affordable units. Otherwise your taxes get raised. There isn't room in a budget to build and maintain a building of affordable units. So DC for instance may issue muni bonds to get the money to finance the building. But just like you cannot print as munch money as you want forever you cannot keep issuing tons of bonds, you have to be able to pledge an income/ asset for the debt service. DC has already pledged all real estate taxes on everything, for infinity so a traditional TIF financing won't work (where you are making the prediction that by adding additional density or real property improvements that real estate values and thus real estate taxes will increase, and thus you are pledging that future increase in receivable real estate taxes towards payment of future debt service). This is how Alexandria City and Arlington County are quietly financing the tax incentive/breaks pledged to Amazon for their HQ.

A TIF on future increases in sales tax could work in DC. This is how DC financed improvements to Gallery Place/ Chinatown and the Navy Yard, but that was mainly to attract business. If you build it , they will come so to speak.

With all this in mind, a train of thought in public finance world has been ways to encourage private development to fund and develop affordable housing. Hence the "theory" if a municipality removes zoning restrictions on SFH, then a developer will immediately want to get more bang for their buck, a build a duplex/condo building/apartment building on the same lot. This will thereby increase the number of housing units in a jurisdiction and thereby raise supply and the economic principle is if you raise supple, the price will decrease. And easy peasy if the price on housing goes down then you have more "affordable" housing, and the government didn't have to fund it, organize it or build it. Hurrah. Genius.

But as many posters have pointed out, in a location like this that is so densely populated, that is so highly educated with a very high average income, that is very transient with people moving into the area constantly to work in a new administration or other fed government supporting work, with an ever increasing population, the theories don't equate to reality when the changes are instituted.

What is your definition of "affordable"? It should mean that people who earn 60% of the average income for the area (as defined by HUD) can afford to live there. It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage. Don't play games, that isn't increasing affordable housing whatsoever. That isn't making it easier for your teachers, first responders, elderly on a fixed income, your trash collectors, your grocery store clerks, your restaurant servers, your construction workers, etc who work in your jurisdiction be able to afford a place to live. This just adds to the housing supply so that UMC people have more options. Don't stick the word affordable in front of something, then point fingers when called out that it is disingenuous, purposefully misleading and not pushing the proper agenda at all. Just like bike lanes help poor people get to work.

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
I don't know much about this, but I suspect the only way to create affordable housing in a place like DC where people have very high incomes is for the government to start writing checks.

All this stuff about zoning makes very little sense to me. It seems like it's just a way for politicians who don't want to actually spend money on affordable housing to look like they're doing something.

If you want to learn more about zoning and its impact, you should read Greater Greater Washington.

Zoning basically stops people from supplying housing. You make it harder to supply something, it gets more expensive. Quite simple really.

Of course writing checks would help - but even govt funded housing can only be built where the zoning allows it.

And realistically we can't meet all our housing needs with govt funded housing. We need both.

This is all garbage. It doesn't work.

[Anonymous]

What doesn't work? Supply and demand in the housing market? Somebody tell the economists.

[Anonymous]

Anonymous wrote:

Anonymous wrote: It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage.

We have multiple housing cost problems and multiple tools. We have publicly financed housing - Alexandria is putting money into preserving and creating committed AH at various income levels as is DC (and there has just been a big proposal in Md)

But yes creating more market rate units also helps - where do those households who buy the 800K condos (thats only in a few parts of DC of course, condos in most parts of Alexandria are not nearly that expensive) come from? They otherwise would have bought something else, and older condo or a small house. And pushed someone else out, who would then have bought someplace older or further out, displacing someone else.

Yuppies do not spontaneousl generate. Adding new housing, even at the top of the market, has knock on effects.

It also provides tax revenues to help fund AH, as well social services.

This goes back to the original question of this thread, here:

I hear this constantly asserted, as if it were self-evidently true, but cannot figure out how it could possibly be correct.

There's 700,000 people in the District. There's 5 million in the suburbs. If you add 30,000 housing units in DC, they will instantly be soaked up by people in the suburbs looking for shorter commutes.

As people move into DC from Falls Church and Rockville and Fairfax, their old places will open up for other people. Other people will move into those places from suburbs even further out, which will open up slots in places like Chantilly or Columbia or wherever else those people are coming from and that would put downward pressure on housing prices in the suburbs they've left.

But how does any of that lead to affordable housing in DC?

[Anonymous]

Anonymous wrote:What doesn't work? Supply and demand in the housing market? Somebody tell the economists.

If you increase the supply in a place like DC, demand goes up too. Prices don't change because supply and demand are both going up. This is why NYC is both incredibly dense and incredibly expensive.

[Anonymous]

Anonymous wrote:The mayor of Alexandria is pushing this rezoning agenda too, with the same excuse: adding housing will increase affordable housing.

Posters on here need to educate themselves on public finance, HUD, the IRS code and urban planning. Do people really understand how "affordable" units/ multifamily units get built and financed? The municipality cannot just waive a magic wand and build more. A municipality requiring a developer to add affordable units to their condo building, while does happen, does not result in significant additions to the supply of affordable units. A 501c3 developer or a developer will the main purpose of building and maintaining affordable units is rare, as it is usually a money losing enterprise and isn't sustainable. The only ones I have worked with in the DMV that are able to stay in business for any significant amount of time are ones associated with religious organizations and even those do very small projects. Hence government agencies do it.

Traditionally a municipality uses public finance/ tax-exempt financing to fund the development of affordable units. Otherwise your taxes get raised. There isn't room in a budget to build and maintain a building of affordable units. So DC for instance may issue muni bonds to get the money to finance the building. But just like you cannot print as munch money as you want forever you cannot keep issuing tons of bonds, you have to be able to pledge an income/ asset for the debt service. DC has already pledged all real estate taxes on everything, for infinity so a traditional TIF financing won't work (where you are making the prediction that by adding additional density or real property improvements that real estate values and thus real estate taxes will increase, and thus you are pledging that future increase in receivable real estate taxes towards payment of future debt service). This is how Alexandria City and Arlington County are quietly financing the tax incentive/breaks pledged to Amazon for their HQ.

A TIF on future increases in sales tax could work in DC. This is how DC financed improvements to Gallery Place/ Chinatown and the Navy Yard, but that was mainly to attract business. If you build it , they will come so to speak.

With all this in mind, a train of thought in public finance world has been ways to encourage private development to fund and develop affordable housing. Hence the "theory" if a municipality removes zoning restrictions on SFH, then a developer will immediately want to get more bang for their buck, a build a duplex/condo building/apartment building on the same lot. This will thereby increase the number of housing units in a jurisdiction and thereby raise supply and the economic principle is if you raise supple, the price will decrease. And easy peasy if the price on housing goes down then you have more "affordable" housing, and the government didn't have to fund it, organize it or build it. Hurrah. Genius.

But as many posters have pointed out, in a location like this that is so densely populated, that is so highly educated with a very high average income, that is very transient with people moving into the area constantly to work in a new administration or other fed government supporting work, with an ever increasing population, the theories don't equate to reality when the changes are instituted.

What is your definition of "affordable"? It should mean that people who earn 60% of the average income for the area (as defined by HUD) can afford to live there. It should not mean that a developer takes a big house, makes four $800,000 condos out of it, and sells them to people who qualify for that high of a mortgage. Don't play games, that isn't increasing affordable housing whatsoever. That isn't making it easier for your teachers, first responders, elderly on a fixed income, your trash collectors, your grocery store clerks, your restaurant servers, your construction workers, etc who work in your jurisdiction be able to afford a place to live. This just adds to the housing supply so that UMC people have more options. Don't stick the word affordable in front of something, then point fingers when called out that it is disingenuous, purposefully misleading and not pushing the proper agenda at all. Just like bike lanes help poor people get to work.

Oh look there's someone here who actually knows what they're talking about. Weird.