Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
You're making whole bunch of bonkers assumptions to come up with your ideas about future tax revenue and then saying we should base housing policy based on your future tax revenue ideas based on your bonkers assumptions.
That DP from just before. I'm not saying their assumptions are true, but you are saying they aren't without backing that up with your own assumptions/analysis.
My assumption is that their assumptions are bonkers.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
You're making whole bunch of bonkers assumptions to come up with your ideas about future tax revenue and then saying we should base housing policy based on your future tax revenue ideas based on your bonkers assumptions.
That DP from just before. I'm not saying their assumptions are true, but you are saying they aren't without backing that up with your own assumptions/analysis.
My assumption is that their assumptions are bonkers.
Alright, while I at least looked at the county tax revenue and expenditures to estimate the revenue impact. The estimated students generated from each unit is based on the MOCO planning office table and the assumed 1.2% tax rate on assessed value is based on the county property tax rate table. It is approximately in the middle of county the real estate tax rates. The cost per student was pulled directly from the county budget after netting our funding provided by the state and federal gov. So I did not make these numbers up they are based on real data. Unfortunately, planning offices rarely estimate the revenue impact of potential decisions before the county votes on them. I wish they were more data driven during this process.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
You're making whole bunch of bonkers assumptions to come up with your ideas about future tax revenue and then saying we should base housing policy based on your future tax revenue ideas based on your bonkers assumptions.
That DP from just before. I'm not saying their assumptions are true, but you are saying they aren't without backing that up with your own assumptions/analysis.
My assumption is that their assumptions are bonkers.
Alright, while I at least looked at the county tax revenue and expenditures to estimate the revenue impact. The estimated students generated from each unit is based on the MOCO planning office table and the assumed 1.2% tax rate on assessed value is based on the county property tax rate table. It is approximately in the middle of county the real estate tax rates. The cost per student was pulled directly from the county budget after netting our funding provided by the state and federal gov. So I did not make these numbers up they are based on real data. Unfortunately, planning offices rarely estimate the revenue impact of potential decisions before the county votes on them. I wish they were more data driven during this process.
Your tax rates actually make generous assumptions about revenue because the middle of the real estate tax rates is skewed by municipal taxes, which the county never sees. The net revenue loss is likely to be worse than you assumed.
Zoning text amendments are exempt from the council’s fiscal impact review requirements because they would almost always be negative over a five-year budget cycle. Whether it’s ever revenue positive depends on the type of housing and how it’s taxed.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
That is an interesting idea to have property tax rates for various housing types to make sure new development is revenue neutral. I’m not sure if it is legal though. The county might be able to accomplish this indirectly (in a legal manner) by tweaking the property assessment value formula rather the than the tax rate. Same thing with the second property tax. Not sure if that is legal in MD. I know that some places tax vacant properties at a higher rate, so I would assume this is possible in MD as long as state law allows counties to do it.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
You're making whole bunch of bonkers assumptions to come up with your ideas about future tax revenue and then saying we should base housing policy based on your future tax revenue ideas based on your bonkers assumptions.
That DP from just before. I'm not saying their assumptions are true, but you are saying they aren't without backing that up with your own assumptions/analysis.
My assumption is that their assumptions are bonkers.
Alright, while I at least looked at the county tax revenue and expenditures to estimate the revenue impact. The estimated students generated from each unit is based on the MOCO planning office table and the assumed 1.2% tax rate on assessed value is based on the county property tax rate table. It is approximately in the middle of county the real estate tax rates. The cost per student was pulled directly from the county budget after netting our funding provided by the state and federal gov. So I did not make these numbers up they are based on real data. Unfortunately, planning offices rarely estimate the revenue impact of potential decisions before the county votes on them. I wish they were more data driven during this process.
Your tax rates actually make generous assumptions about revenue because the middle of the real estate tax rates is skewed by municipal taxes, which the county never sees. The net revenue loss is likely to be worse than you assumed.
Zoning text amendments are exempt from the council’s fiscal impact review requirements because they would almost always be negative over a five-year budget cycle. Whether it’s ever revenue positive depends on the type of housing and how it’s taxed.
I know they aren’t required to look into it, but it would be beneficial to evaluate it when they are making large zoning changes.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
Number 1 and number 3 aren’t possible under current state law. Number 2 is possible through a homestead tax credit increase but that would hit the multi family LLCs.
It’s worth noting that the county is moving in the opposite direction from you on STRs. They’re generally banned (except by owner occupants) but planning created a loophole by allowing parts of some apartments to be classified as hotels. Isn’t it strange that the planning department is screaming about the housing crisis while also helping builders keep units off the long-term rental market? That seems bonkers.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
You're making whole bunch of bonkers assumptions to come up with your ideas about future tax revenue and then saying we should base housing policy based on your future tax revenue ideas based on your bonkers assumptions.
That DP from just before. I'm not saying their assumptions are true, but you are saying they aren't without backing that up with your own assumptions/analysis.
My assumption is that their assumptions are bonkers.
Alright, while I at least looked at the county tax revenue and expenditures to estimate the revenue impact. The estimated students generated from each unit is based on the MOCO planning office table and the assumed 1.2% tax rate on assessed value is based on the county property tax rate table. It is approximately in the middle of county the real estate tax rates. The cost per student was pulled directly from the county budget after netting our funding provided by the state and federal gov. So I did not make these numbers up they are based on real data. Unfortunately, planning offices rarely estimate the revenue impact of potential decisions before the county votes on them. I wish they were more data driven during this process.
Your tax rates actually make generous assumptions about revenue because the middle of the real estate tax rates is skewed by municipal taxes, which the county never sees. The net revenue loss is likely to be worse than you assumed.
Zoning text amendments are exempt from the council’s fiscal impact review requirements because they would almost always be negative over a five-year budget cycle. Whether it’s ever revenue positive depends on the type of housing and how it’s taxed.
I know they aren’t required to look into it, but it would be beneficial to evaluate it when they are making large zoning changes.
It would be beneficial but that’s also why they don’t do it.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
It could be passed on to the developers.
Guess who would end up paying it.
The MoCo market can’t bear it so developers will pay for most of it with lower profits. To the extent buyers pay it, they’ll pay a one-time fixed cost instead of paying a higher property tax rate forever.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
It could be passed on to the developers.
Guess who would end up paying it.
The MoCo market can’t bear it so developers will pay for most of it with lower profits. To the extent buyers pay it, they’ll pay a one-time fixed cost instead of paying a higher property tax rate forever.
In other words, either the developers wouldn't build in the first place because it wouldn't be profitable enough, or the cost would be passed on to the buyers.
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
It could be passed on to the developers.
Guess who would end up paying it.
The MoCo market can’t bear it so developers will pay for most of it with lower profits. To the extent buyers pay it, they’ll pay a one-time fixed cost instead of paying a higher property tax rate forever.
In other words, either the developers wouldn't build in the first place because it wouldn't be profitable enough, or the cost would be passed on to the buyers.
MoCo has done a number of fee cuts and tax abatements for developers. By your logic I’m sure developers passed those savings onto renters and purchasers and housing prices in new construction have fallen. That’s what happened, right?
Anonymous wrote:Condos mean more people in a given area. Which means more bars and restaurants. Which means more people want to live there. Which drives up the prices of those condos. Which drives up the prices of houses developers need to buy and tear down in order to build more condos. Which means even more people in a given area. Which means more bars and restaurants, which means more people want to live there, which drives up the prices even further.
People understood intuitively before we changed the term “gentrification” to “upzoning.”
There isn’t a coherent explanation of how changing zoning laws reduce housing prices. Typically the opposite happens — prices go up, by a lot.
There is, and it's based on supply and demand. Just like "gentrification" and "upzoning" are different things, so "there is no explanation" and "I don't like the explanation" are different things, too.
‘If you can't explain it to a six year old, you don't understand it yourself.’ —Albert Einstein
Very weird that no one can explain how upzoning reduces housing prices
Either you've testified at public hearings about housing policy, in which case you've heard plenty of pro-housing people explain this plenty of times, or you're a person who has a lot of time to post on DCUM, in which case a person might wonder how come you don't have the time to testify at public hearings.
Either you sincerely want to know, in which case you can go educate yourself, or you don't sincerely want to know, in which case feel free to waste your own time.
DP. I've heard a lot of people offer theories of how upzoning causes prices to fall, but it doesn't matter if no one builds. In the case of Montgomery County, there is a lot of approved density that isn't getting built because it doesn't pencil. Upzoning residential areas isn't going to change that and is more likely to suppress very high density construction because those projects will face more competition from lower density projects that are cheaper to build but can get the same price as a very high-density project.
I don't think anyone has said that re-zoning, by itself, will make housing more affordable for more people. Obviously there also has to be building following on the re-zoning.
I will note that there is no "approved density" that isn't getting built. Builders don't build "density". Builders build housing. Now, would zoning changes lead builders to make different decisions about where to build housing? Yes, that's the whole point.
OK. There’s a lot of approved housing that isn’t getting built. You have to make silly semantic arguments because the facts are really bad for your position. The problem isn’t zoning. The problem is developers aren’t building because they think the market in Montgomery County is poor. Anything built here is at a disadvantage to things built in DC and especially NOVA because those places have more jobs, so it’s higher risk.
"Approved housing" isn't fungible. As a matter of fact, your argument supports re-zoning. Builders aren't building approved housing, under the current zoning, because it doesn't pencil out. Assuming we want builders to be building housing (which I do, though you may not), that's a reason to change the zoning, to give builders more options for projects that do pencil out.
Nothing is going to pencil out at scale without more jobs. You think you’re going to get 50 quads to replace the 200-unit high-rise that’s not getting built? YIMBYs in this county have done it a great disservice by promoting jobless urbanism while also supporting policies that are hostile to business.
The builders who can do 200 units are few and far between. Many of them have big investments in CRE or multi-family that are getting crushed, losing many millions of equity in current structures.
However, there are a lot more crappy little builders in this area who can do 2-4 unit flips. That's who give donations of a couple thousand to each Council member to get up-zoning. These guys can't handle a big project like 200 units, but they can toss together a crew and local bank + hard money financing to pump out 4 unit garden apartments.
So yeah, that's the game.
You don’t get market changing housing deliveries without the developers who can deliver 200 units.
The issue with 200+ units is that all the kids there need to go to one school. At least with garden apartment you are spreading the numbers across a bunch of schools/infrastructure.
The County needs to be careful with up-zoning; these ticky-tack flippers will want to pile garden apartments into the same 3-4 neighborhoods inside the Beltway and put even further strain on the same 2 high school pyramids. The County should parcel it out evenly across MoCo, perhaps even by putting limits on a single HS pyramid (e.g., once BCC catchment gets 75 units approved, no more will be approved until every MoCo HS pyramid hits the 75 threshold).
There's a real risk of concentration on infrastructure if the County doesn't do this carefully. Flippers are going to aim for the land with highest return and quickest chance of sale - they move in a herd.
Back to central planning...
The "ticky tacky flippers" are flipping currently, and it's fully allowed currently. In which case, I think they should be allowed to build a building with 2-3-4 units instead of one gargantuan McMansion. It also wouldn't be "garden apartments", it would just be a basic duplex, triplex, or fourplex building.
At least the McMansion doesn’t utterly overwhelm the existing schools. MoCo has a school supply problem at all levels.
Montgomery County also has a housing supply problem, and I think that housing is even more important than schools.
DP. I disagree, in a way.
Housing is more important than schools in the same way that food is more important than housing. Kind of a hierarchy of needs thing.
However, just as the need for housing might eclipse the preference for a particular cuisine or brand of food where other food is available, the need for adequate public facilities such as schools might be more important than the preference for additional housing of a particular type where other housing (hi-rise instead of triplex, townhouse a modest distance away, rental instead of a purchase, etc.) is available.
There's a calculus to it, to be sure, depending on where on the spectrum of need and preference these might fall. There is enough housing stock available and enough properties on which such housing could be built with current zoning that the school overcrowding factor is the more pressing element in many localities, especially closer in, where the policy change is aimed. It also is far less flexible than housing inventory, taking greater lead times to address, and it is directly negatively impacted by the even greater housing inventory envisioned in the upzoning under consideration. The same may well be the case for other essential public services.
Montgomery Planning and the County Council should be taking a more holistic and community/resident-inclusive approach.
People can't live in housing that could be built. The housing has to actually be built in order for people to live in it.
That DP to whom you responded (07:42 was someone else). This is missing the point and/or is a response that cherry-picks housing to be built.
There is both housing that is now available and housing that could be built under current zoning (a very large amount under-built close to Metro). People can live in the currently available housing. They may want alternatives to that in the same areas, and I don't begrudge them that interest, but I would say that the need for public services, like schools, trumps that interest in localities where current capacities are not adequate.
While one could say that the same people who would move into newly zoned/built multiplex properties would then just fill that existing capacity, resilulting in the same level of overcrowding, this would ignore the market dynamic based on that desire for those alternatives -- without the zoning change, many families will choose to live slightly farther out in areas that aren't currently overcrowded. This would result in marginally longer commutes and the various ills that might come from that, but I would say that those ills are of less consequence, in both the short and long terms, than the ills of inadequate public facility capacity.
MoCo should address the situation in a way such that we are sure that capacities of public facilities like schools are made adequate by the time that the additional housing of interest comes online. That has been ignored/under-addressed, now, for far too long, and we shouldn't be trusting, then, that the various agencies will change to make it work without a more directly coordinated approach.
Increasing supply and lowering housing prices creates induced demand for housing too. To some extent if you build new low income housing people will appear to fill these housing units. There is also induced demand by people using more space per person when affordability increases. I’m not saying that we should not pursue more affordable housing. However, MOCO will end having a disproportionate share of tax negative residents if it is not careful. Growth in low income residents needs to be matched with new high income residents or the county will not have enough money to maintain the current level of services.
Induced demand? How many houses do people need? I can see how building roads induces demand: people will drive more. But will people want more than one house?
There is absolutely induced demand from building more houses. Building more houses will decrease the rate out migration and create a stronger incentive for people to relocate to the county. In moderation this is good, but the fiscal implications can be disastrous if growth is too rapid. Induced demand encouraging relocation be the strongest for low income household because they are the most responsive to housing prices and have limited budgets.
"I don't think MCPS should build housing that poor people might move live in, it would just encourage them."
+1
Basically the gist of those anti purple line posts as well.
If the county decides to do this and voters support this development that’s great, but this does not resolve the funding question. How do you suggest that gets additional revenue to cover this shortfall? MOCO Local income taxes are already at the statutory cap. This funding shortfall from tax negative development will need to be covered by raising property taxes. What is the upper limit for property tax rates that you think is reasonable for MOCO to charge. 1.0%, 1.5%, 2.0%, etc. There is no right answer to this question, I’m just curious what you believe the max reasonable real estate property tax rate is?
Thank you for bringing some numbers to this discussion - very informative.
The County could tackle this a number of ways:
1. increase the property tax rate on the quadplexes relative to existing SFHs given the realities of the fiscal shortfall
2. higher (punitive?) property taxes on SFHs/townhouses/individual apartment units that are not “primary residences” of the owner, whether that be a natural person or an LLC (though don’t assess a penalty tax rate on multifamily properties…this is actually desired investment)
3. Punitive taxes on STR income/properties
In short, the County should strive to have every home filled with tax-paying occupants as their “primary residence.” Unoccupied 2nd homes and investment homes reduce affordability, though also probably put less stress on the overall fiscal picture. It’s a tough balancing act for policymakers and the County CFO.
There also exists the idea of a progressive upzoning tax.
What MC does not need is more taxes. MC is already overtaxed. I understand the 2nd home argument, but investment properties are rented out to actual families.
It could be passed on to the developers.
Guess who would end up paying it.
The MoCo market can’t bear it so developers will pay for most of it with lower profits. To the extent buyers pay it, they’ll pay a one-time fixed cost instead of paying a higher property tax rate forever.
In other words, either the developers wouldn't build in the first place because it wouldn't be profitable enough, or the cost would be passed on to the buyers.
MoCo has done a number of fee cuts and tax abatements for developers. By your logic I’m sure developers passed those savings onto renters and purchasers and housing prices in new construction have fallen. That’s what happened, right?
What housing would and would not have been built if Montgomery County had not done this, and how much would renters and buyers have had to pay for the housing that built?
Well if you want to maximize tax revenues (dubious goal), you should build giant houses for rich people. They pay a ton in taxes and barely use government services.
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