MoCo Council Vote Today
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
You’re playing semantic games with “similar detached.” The fact is that any townhomes will cost much more than the single family homes they’re replacing, and whatever gets built is much more likely to be rental apartments because the legislation is set up to encourage apartment developments not townhomes. Friedson’s package is a piece of junk that helps out land speculators. Literally no one else wins. You underestimate how much adding just a couple thousand homes for purchase each year for the next five years would ease pressure on the rental market. It’s the ultimate in filtering because it removes some of the wealthiest renters from the demand side permanently and adds units at the same time. Instead Friedson’s solution is removing homes from the sale market permanently and replacing them with more rentals. As long as YIMBYs fail to recognize why the housing market here actually broke their proposals will fail to fix it. I thought Friedson was smarter than the legislation he’s put forward but maybe this is how smart he actually is. |
Anonymous
Those "wealthy" renters have lots of purchasing options to choose from. But they decided they'd rather rent than live in the boonies. That's the problem with greenfield development, which you continue to ignore. You must be a real estate agent or a mortgage broker. |
Anonymous
The landlords who are leasing units to UMI households say they’re retaining those renters because those renters lack buying options. I trust that the landlords to know their customers because that’s their livelihood. You’re scared of greenfield development and I get that because change is hard. I see opportunity in growth. You must be long on land in one of the county’s jobless CBDs. |
Anonymous
So corporate landlords are suddenly trustworthy sources now? But yes, availability is an issue-- but it is availability in the heavily desirable locations. But greenfield development isn't in those highly desirable locations. You're not going to attract those renters to new single family homes in Damascus or Laytonsville. What greenfield development would do is tamp down the bidding wars for homes in the outer suburbs. Maybe we'd see some improvement in the prices for $800k SFHs, and with luck, see a bit of filtering. But the long-term impacts will be small. That's still just building the most expensive kind of homes, which will remain expensive due to the value of the underlying land. But there's a clear market segment interested in such properties (i.e., large homes with moderate-to-large yards), and I think there's a public interest in making those reasonably affordable. We're probably not building enough for that. Where we disagree is over the relative focus. You seem to be fighting increased density except for high-rises near metro, wanting to focus instead on greenfield development. In doing so, you ignore the difficulties with the transportation infrastructure. Namely, that building roads in Montgomery County is incredibly difficult due to the NIMBY culture, and there's no plausible path for creating major job centers that wouldn't involve commuting well south of greenfield areas. Instead, I would like to see zoning regulations relaxed to allow market forces to increase density in corridors more suitable for public transportation (including buses with shorter headways) and areas close to job centers. Greenfield development should be allowed as well, but approached with caution. There needs to be realistic plans for how we'll get those people to their jobs. |
Anonymous
When a corporate landlord says something in its SEC filings or one of its officers says something on an earnings call, I’m inclined to believe it because lying would be securities fraud. I don’t think they’re committing securities fraud. Do you? You’re missing the point. Availability is an issue because the county has incentivized land speculation and rentals. Andrew Friedson’s recent legislation, including the tax abatement for landlords, the ZTA, and the SRA, continues to incentivize land speculation and rentals. Land speculation drives prices up. Rentals relieve less market pressure than homes available for purchase because they only address rental supply, while homes available for purchase address supply and demand. The rental market started experiencing high rent growth when this county’s market stopped delivering homes for purchase in quantity. Ownership opportunities don’t have to be greenfield, though greenfield plays a role. Think about all that commercial space with high vacancy rates outside the beltway. Andrew Friedson crafted a tax abatement if it’s redeveloped into rentals. The tax abatement easily could have applied to owner occupants — the county has done it before — but it’s only for rentals. These properties already have infrastructure. Some of them are even near BRT. They’re infill development. But Andrew Friedson thinks they should only be rentals. Looking at his policies, you’d think that he only wants to help land speculators and landlords. That’s a common thread in YIMBY policy. |
Anonymous
None of what you’re saying makes any sense. We’re well past a speculation bubble. Areas in the county eligible for development have, to a very large degree, already been developed. Any time there is a scarce resource, capitalism will lead to some speculation, but it is underlying scarcity of land driving that population scarcity and speculation, not the promise of tax abatements for properties with below-market-rate rentalsi Prices have been going up well before the current crop of councilmembers and before the tax incentives you dislike so much. Much of that is going to be tied land scarcity, but also reinforced by decades-long policies discouraging development (and, at times and areas, even prohibiting development) through zoning and fees. To one of your points, rental prices have been going up much slower than purchase prices. The pace of rental increases is still a problem relative to incomes, and recent vacancy trends suggest demand is outpacing supply. (Yes, the numbers from this past year are different, but that appears to be caused by a combination of current economic conditions and national domestic policy rather than a sustained, long-term shift in trends.) But I’ve always agreed that we need to make ownership more affordable, too. And certainly the numbers demonstrate the need there. But you’ve never laid out a coherent and sensible plan to do that. You come back to three points: 1) developing the ag reserve, 2) maintaining currently restrictive zoning regulations, and 3) tax abatements for homes for purchase. Some development into the ad reserve will need to happen, as it has. Probably a bit more than we've seen in the last decade. But there's no plausible path to creating the transportation infrastructure necessary to support a substantial increase in development in those areas. While Gaithersburg and Rockville have had some success in biotech, it's also clear it isn't likely to become a major jobs center at the scale necessary to support large-scale upcounty housing development. Such jobs centers are even less likely further upcounty. Development into the ag reserve needs to account for what we will realistically be able to build in terms of roads and transit. It’s unclear what you think would happen if the county maintains the current restrictive zoning regulations. Presumably you believe by prohibiting the development you don't want, you can encourage the development you do. But it doesn't work that way. Other than the greenfield developments you'd like to see, you seem to only want to see more high-rises near metro and (apparently) conversion of vacant office space to condos. The former are expensive properties and buildings. The latter are expensive to convert and often in areas that aren't particularly desirable as residential properties. They often won’t make sense economically, since the rental or purchase prices for units would have to be enough to pay for the conversion cost and offset the potential commercial value. The problem is, you can force developers to build these by prohibiting smaller-scale development in other areas. The alternative for investors isn't to sit on their money- it is to fund projects in more profitable counties. You can't force people to spend money on what you want. You continue to bring up the tax abatements. First of all, these aren't simply handouts to developers. They are in exchange for providing lower-income rental housing over that period. But what I find particularly strange is your insistence that there should be tax abatements for new homes available for purchase. What would the objective of that be? That's just going to drive the purchase price of those units even higher relative to similar units, decreasing affordability. While it might encourage construction of those units, since the developers would be able to profit off those higher sale prices, there are going to be better ways to both incentive production and increase affordability without increasing prices. For example, we can allow such construction in areas that are more profitable and reduce or eliminate impact fees. On affordability, we can expand existing first-time homeowner assistance programs, which provide support for the individuals typically facing the greatest challenges with affording home ownership. 20 year tax abatements is a terrible way to serve either of those goals. |
Anonymous
They’re not always for more affordable housing. High rises near metro (which has only produced mid-rises so far) does not have an additional affordable housing requirement. You and I are subsidizing units that lost for $10k a month. Office conversions doesn’t have a meaningful requirement (an extra 2.5 percent — not a great return on a billion dollar investment). Letting owners of office conversions get the tax abatement would have been very simple. Just use the model they used for townhouses with elevators. These aren’t all expensive to demolish. Outside, the beltway, some of them would blow over in a strong wind, and they’re massive lots. They could have easily been converted to townhouses for sale. With the tax abatement, those townhouses won’t get built because rentals will be more profitable. You don’t seem to have a problem with expensive housing as long as it’s a rental. It’s almost as if you want to trap people in renting by limiting construction of homes for sale. Who does that benefit? The land speculation bubble has not burst, in part because the council always bails out the land speculators with subsidies. If we don’t let land prices fall, then housing prices won’t fall (and price growth won’t even slow). |
Anonymous
As I've said, I agree there's a need to facilitate and incentivize development of townhomes. But, you haven't described a rational and effective plan for doing that. For example, take your reference to the Design for Life tax credit. A one-time property tax credit isn't likely to be an effectivr incentive. The other part of that-reducing impact fees- was mentioned in my previous post. I think that's a good idea, but your previous posts have always been opposed to reductions in impact fees. And for the reasons I mentioned in my previous post, I don't think office conversions are going to be economically viable in many cases, even with tax incentives. And where they are viable, they're not going to help much towards affordability. That doesn't mean we should ignore them, but we'll need many other tools to address availability and affordability. The land value increases aren't new, nor are they unique to this area. The values will continue to go up much faster than inflation when zoning regulations reinforce the scarcity of lots. |
Anonymous
All I asked was why new owner occupants couldn’t get the same tax deal as new landlords for office conversions. You responded by explaining how ineffective Andrew Friedson’s tax abatements are for promoting housing development. I agree. None of these tax abatements have resulted in enough new housing to justify their cost. They have, however, bailed out people who paid too much for land or just generated big windfalls. Take the metro tax abatement. Only one company has built something using that tax abatement. That same company has only donated to one current council member. They maxed out for Andrew Friedson in 2021 and again in 2023-24. For their $12,000 investment, they got a tax abatement for 10 years that is worth $1.1 million this year alone. |
Anonymous
20-year tax abatements for new homes available for purchase don't make any sense, as I explained in my previous post. I don't know why you think those are good ideas. There are better ways to incentivize production and facilitate affordability. And maybe there are better ways to do that for rental properties. What did you have in mind? |
Anonymous
Now you’re back to giving a tax abatements to rentals but not units for sale. For the same reasons tax abatements don’t make sense for market rate units for sale, they don’t make sense for market rate rentals, unless you have a stake in the land or your donors do. Here’s an idea: what about a higher recordation tax on very time underdeveloped land changes hands? Deter speculation by taxing the unearned income from sitting on land. |
Anonymous
Meaningful and effective incentives for homeowners are different than meaningful and effective incentives for investors funding rental properties. Investors aren't cash strapped like first-time homeowners, for example. So we have subsidies for first-time homeowners, but not first time developers. There's no reason we need to apply the exact same incentives for different groups and scenarios. That's obviously going to be suboptimal compared to targetted incentives. As for taxing underdeveloped land, I wouldn't be opposed to that. But I don't see why you would only do that when land changes hands, as that would still encourage people to sit on land. You'd want to levy the tax every year. You have also to come up with a good way to determine what is underdeveloped. Though, we could let the market determine that on the basis of the land's potential. But that's just a property tax. Are our property taxes too low in Montgomery County, thereby encouraging people to sit on underutilized land? Maybe. I wouldn't necessarily be opposed to a higher property tax rate, but I'm not yet convinced that's what is stopping development/redevelopment. Particularly if developers weren't convinced they'd be able to get redevelopment plans approved by the county. That would just drive them away. Values might decrease or plateau, but we might even see less housing built. |
Anonymous
We have tax abatements for any-time developers even though they aren’t cash strapped. That’s the irony and tragedy of Andrew Friedson’s housing policy. The tax abatements are bad policy that drive up land costs. The major difference between the cost of building infill and the cost of building greenfield is the cost of land. How can you possibly make housing more affordable if you keep propping up the price of land with bad tax policy? Let land prices fall! The landlords who let their commercial property become vacant should take the haircuts instead of getting an indirect bailout through a tax abatement for the land purchaser. Land speculation is the problem. Not infrequently, land speculators purchase a piece of land, get a planning approval, and flip the land. One piece of land in Bethesda appreciated 5x in three years while other parcels didn’t appreciate as much. The only thing that changed about that one piece of land was the planning approval, which was neither controversial nor drawn out. The problem isn’t getting planning approvals. Sure, some parcels are at the end of their speculative chains, but instead of letting the landlord speculator take a bath, Andrew Friedson is always ready with a bailout. Effective development policy requires measures that deter speculation rather than providing price protection. The recordation tax is paid by the buyer as a matter of law. If you tax the land at the time of sale, you could provide a rebate of the premium portion of the record tax to the buyer if the land is redeveloped — into units for sale or purchase — within five years. The rebate could vary depending on how many units are built (what percentage of units are built vs. what was approved in the site plan) and how quickly they are occupied (as an incentive to rent or sell units quickly rather staging delivery to maximize prices). Such a tax structure would favor people who want to build housing (developers, the good guys) over land speculators (the bad guys). |
Anonymous
|
Don't say that we haven't been warned. Please read the whole article ~ especially the part about the developers.
It didn’t take long to figure out why there were so many empty units on the market: it turns out nobody wants to rent a condo, and nobody wants to buy one either. Condo rents have dropped over the past two years, and according to a recent report from the Canada Mortgage and Housing Corporation, or CMHC, condo sales have fallen by 75 percent in the Greater Toronto Area and 37 percent in the Vancouver area since 2022. The market has become so dire that buyers of pre-construction condos are having difficulty closing their purchases. Banks lend money depending on the present value of the property, and some condos are worth less now than they were when the buyers made their first deposit. As a result, developers have been cancelling construction projects. Some experts say we should have seen this coming. The title of article screams what most people already know: No One Wants to Buy a Condo https://thewalrus.ca/no-one-wants-to-buy-a-condo/?utm_source=firefox-newtab-en-us |
Anonymous
Sounds like a good time to make it easier to build townhomes. |