Reply to Who do you think will win MoCo county exec?

Forum Index » Metropolitan DC Local Politics

Reply to "Who do you think will win MoCo county exec?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I like Friedson more than Glass. Glass has a tendency to promote pointless performative initiatives. [b]Friedson definitely gets funding from developers and it shows but he is someone who is pretty serious and knowledgeable about politics and policy.[/b] [/quote]

So you like putting a dangerous weapon in the hands of an adversary?  SMH...[/quote]

I don't think of developers as adversaries. They are an interest group, one among many, and sometimes their interests align with mine and sometimes they don't just like any other group.[/quote]

The companies that are actually building things aren’t adversaries. A lot of them are predatory — opposing safer building codes and basic consumer protections — but they’re not adversaries.

The land speculators are adversaries (unless you are one). They’re rent seekers, and when you look for the real winners from Friedson’s housing policies, it’s the land speculators who win, not actual developers. [/quote]

I'd love to see more information about this! [/quote]

If you create a tax abatement or other subsidy for building on a piece of land, the price of that land goes up. The price of land is based on its revenue potential minus building costs. If you reduce costs through tax abatements, the price of land goes up. It’s simple to economics. The person who wants to build trades operating costs for land price up front.

If a person doesn’t want to build, the appreciation land is great. There’s the obvious benefit of being able to sell for a higher price, but there’s also the benefit of being able to borrow more against that piece of land. If you look up any of the prime undeveloped land in this county, you’ll see multiple loans taken against it, with the amount of the loan often many times the assessed value of the land. [/quote]
So interesting. Can you spell out for me now how many taxpayer dollars have gone to land speculators?[/quote]

The unfunded liability through the life of the program is in the high hundreds of millions of dollars, The biggest part of this program is new so not many have used it yet. But anyone with an office building who has used their land to secure a loan this year has benefited from the program.

So far the biggest beneficiary of realized tax savings is one company that maxed out for Friedson.

The point isn’t even the money. The point is that tax abatements are a big part of Friedson’s housing plan. They don’t benefit potential residents. They benefit the people who donate to his campaign. Either Friedson doesn’t realize that (in which case he’s not that smart) or he does and he’s lying about his intentions (in which case he’s been captured by developers). Which one do you think it is?[/quote]

Sorry, I honestly don't understand any of what you are saying.

I'm hearing you don't like tax abatements or land speculators and that land speculators benefit indirectly from tax abatements. Do they themselves receive tax abatements for land where housing isn't built?[/quote]

They don’t have to receive the abatement to benefit. The mere existence of the abatement makes their property more valuable so they can get more money when they cash out or they can borrow more against that land.

The point is that these abatements don’t benefit people seeking housing. They benefit Friedson’s big corporate donors. They’re the only winners.

Either Friedson doesn’t realize that (in which case he’s not that smart) or he does and he’s lying about his intentions (in which case he’s been captured by developers). Which one do you think it is?

[/quote]

ok, thank you for answering my question. I think I understand what you are saying now which is that the tax abatements do not incentivize building housing, they just raise the price of the land.

That is an interesting theory, and I am curious what your evidence is. which properties have you seen this occur in? The existing PILOTs are only for affordable housing beyond the mpdu requirements. The land owner would only have a limited pool of buyers that were planning on using the PILOT which they have to apply for. Why would another buyer pay a premium for that land.

The office to residential pilot hasn't been implemented yet. I suppose it could already be raising property values, but I would need to see aggregate data rather than a couple of properties.[/quote]

The office to residential pilot is in effect.

The effect of property tax abatements is Finance 101. When a property's tax burden is reduced, building becomes more profitable. But the savings is capitalized into the underlying value of the land and not passed further through the value chain. Because land is in fixed supply, owners can demand higher prices when selling abated properties, transferring the financial benefit directly to the landowner.

The law and zoning text are in place, but DHCA is still finalizing the specific regulations and procedures for the office‑to‑residential PILOT, so the program is not yet “fully operational” in practice. That means no developers have yet received the Bill 2‑25 office‑to‑residential tax abatement under the new pilot, even though the authority for the PILOT exists.

DHCA’s website notes that regulations are still under development, which typically means application forms, scoring criteria, and approval workflows are not yet locked down.

Until those rules are adopted, the PILOT amount, term, and conditions are not being formally offered or recorded for new office‑to‑housing conversions, even though ZTA 25‑03 and Bill 2‑25 have been enacted.

Feel free to share any data you may have to support your assertion that the value of the office to residential pilot is is already fully capitalized into the value of the land. I don't buy that for several reasons[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics