Why options are limited and prices are out of reach for many
“People are really frustrated with the lack of options,” Arlington County Board member Katie Cristol said Monday, October 21, during Housing Arlington’s virtual conversation focused on housing and economics. This is the first of three events planned in the series, with companion sessions on the environment and equity on October 28 and November 12.
Cristol said that frustration is felt by young families looking for their starter home, retirees who want to remain in the community but can’t find a way to downsize, and everyone in between.
But just what are the economic factors that have led to the housing affordability crisis and what can be done?
Supply hasn’t kept up with demand … and ignoring demand isn’t realistic.
In September, the Council of Governments agreed to a regional goal to create 320,000 more housing units in next 10 years—75,000 more than originally anticipated—to keep up with the growing demand.
Housing Construction Permits by Year in Metropolitan Washington | COG Analysis of U.S. Census Bureau C-40 Residential Permit Data
According to Jeanette Chapman, Deputy Director of the Stephen S. Fuller Institute at George Mason University, national job growth is increasingly concentrated in the largest metropolitan areas. With those new jobs come new employees who are looking for a place to live.
Marc McCauley, Director of Real Estate Development for Arlington Economic Development, said insulating “ourselves from the regional housing demand” is not realistic. “If we did nothing in terms of supply, the answer is pretty simple, the existing housing stock would get more and more expensive.” Those with the most resources will outbid others and drive up the price of homes in places like Arlington and push out those who cannot afford it.
Mike Spotts, President of Neighborhood Fundamentals, said that despite what is often considered a building boom, housing production is behind historical trends. This has created a long-term supply crunch in the region.
Arlington is near the center of a regional housing market and is a very desirable place to live with good schools and great amenities that lead to high demand for living here. Not having much space combined with high land and development costs makes it hard to develop here to provide the supply to match that demand.
David Cristeal, Arlington County Government’s Housing Director, called attention to our vision of being a diverse and inclusive community. “If we want to maintain our inclusivity and diversity, it means finding housing options for people who don’t make a lot of money.”
Housing experts say building multi-unit homes on what is currently zoned for single-family use could decrease the cost of housing without changing the overall housing footprint on a lot.
Zoning codes limit the amount and types of homes that can be built.
The panelists agreed that it’s not just about how much supply is being created, the type of housing being built is also important.
“In general, the types of housing units that can be built in each jurisdiction are fairly constrained because of antiquated zoning policies,” said Chapman. “We think of zoning as guiding the development process, but it also controls it.”
She said delays in building due to zoning have had a cumulative effect over the years, compounding the shortage problem and essentially becoming a “sorting method” for who can and cannot live in the community.
McCauley said that typically a developer working in areas with large amounts of developable land will build a variety of units at different price points, including townhomes, single-family homes, and apartment buildings. But Arlington is a relatively small place and most of the land is already in use.
Spotts agreed, noting that due to “very prescriptive zoning codes” it is often more difficult to make modest improvements to a home—such as adding another bedroom—than it is to do a tear-down with a larger replacement. Those larger homes are out of reach of most households.
Tear-downs replaced with duplexes, triplexes, or quadplexes would have the same square footage on a lot and would provide housing for more families at naturally lower costs. However, 86 percent of developable residential property in Arlington is currently zoned exclusively for “single-family detached” homes.
“It may not be as affordable as we’d like,” says Spotts, but at least there would be greater potential for young families to find a starter home.
People are locked out of moving—both up and down.
As Cristol noted, more than one demographic is affected by the housing shortage and affordability problem.
“There are 10,000 empty nesters with at least two extra bedrooms,” Chapman said. These Baby Boomers would like to retire in the community they love. They may be interested in moving to a smaller home, but “they’re locked in by the supply, which locks out young families.”
While many bemoan the luxury apartments popping up in Arlington, both Chapman and Spotts say they’re good for the economics of housing. The development of “Class A” (read: luxury) apartments frees up “Class B” (read: older and less desirable) apartments and relieves the competition for people with lower incomes.
While supply is necessary for serving the full spectrum of a community’s housing needs, it’s not sufficient to address the needs of the lowest-income households for whom the crisis is most acute, Cristeal said. That’s where the county comes in to help with its housing finance and land use tools to help preserve and produce affordable housing. “Our goal is to develop 600 affordable rental units a year,” he said. But if it costs $400,000 to develop a new unit and the county can only provide an $85,000 subsidy the developer is still going to find it a challenge to build for the lowest-income earners.
Planning for growth is an iterative process.
Throughout the discussion, panelists returned to one of the key themes that came out of the Big Ideas Roundtable series from 2018 that “planning is never past tense.” Planning for the future housing needs of the community should take into account the vision for what the county will be looking forward, not only what has existed here before. The plans we are making now will guide changes that will continue over decades to come.
As Cristol noted, this means that plans for our community’s infrastructure and facilities—including parks, fire stations, senior centers and schools—must be an iterative process. Plans need to constantly be updated to match long-term projections for growth in the community.
“People look to the county to make sure we’ve got the plans in place and to keep our attention on the office revenue side to make sure we’ve got the money to pay for it.”
For further reading:
• About the Housing Arlington initiative and other Housing Arlington: Community Conversations online discussions.
• Building Northern Virginia’s Future: Policies to Create a More Affordable, Equitable Housing Supply produced by Neighborhood Fundamentals LLC for the Northern Virginia Affordable Housing Alliance.
• The Future of Housing in Greater Washington report on the effort to address the region’s unmet housing needs, produced by Washington Metropolitan Council of Governments.
• Meeting the Washington Region’s Future Housing Needs report from the Urban Institute describing the constrained housing supply and regional growth that push up rents and prices for existing housing and a regional framework for action.