The plan has faced significant local opposition.

That would be the default line for any article about any plan in DC.

by Jasper on Jun 19, 2012 9:01 am • link • report

DC has none of the top ZIP codes for gay couples.

That's a good thing right? That DC does not rally gays together as if their gayness defines their existence?

Do we have any of the top ZIP codes for women? Or students? Or gingers?

Can we please stop defining people by one single property? Sexual orientation, chromosomic composition or educational status do not define a person.

by Jasper on Jun 19, 2012 9:12 am • link • report

Jut looking at the graph on housing starts, it looks as if we're still seeing lower multi-family than the entire last decade -- perhaps back to 1997.

In fact, again, eyeballing it, that the entire housing starts this year is less than the mutli-family category in 2007.

In terms of bikeshare, I think that number is way inflated. And a lot of that $800 would have been gas money, which, is, well, taxed. So we're subsidizing bikeshare?

Jasper has a point. HOwever, this is telling abotu bikeshare. They are whiter and more male than commuters in the REGION. Of course, since almost all bikeshare users are in DC/Arlington, that is a very small subset of the region. They don't provide any more granular data.

by charlie on Jun 19, 2012 9:34 am • link • report

Martire didn't seem to show very good judgement regarding his travel expenses. If this is a political power play then Martire sure did provide a lot of ammo.

by Fitz on Jun 19, 2012 10:08 am • link • report

DC has none of the top ZIP codes for gay couples.

Would be curious to see the data for gay singles.

by Vicente Fox on Jun 19, 2012 10:13 am • link • report

The housing starts data back up my main observation about the housing crash, which is that the bottom fell out of the market for far-out SFH. This is true in many markets, but pretty dramatic in the DC area. Far too many detached SFHs were built during the boom in, say, Loudoun County. These are now worth a lot less than what they sold for a few years ago.

By contrast, homes in DC or close-in, Metro-accessible suburbs didn't keep appreciating at 10% a year, but are also generally worth about what they sold for before the crash.

And the close-in rental market survived quite well--rents just keep going up pretty much everywhere near a Metro stop. Building dropped off as capital fled, but we're seeing a return to pre-crash levels, which I imagine will persist given the high rents we're seeing. But I can't imagine that far-out SFH building will return any time soon.

by Gray on Jun 19, 2012 10:14 am • link • report

We may be faced with either Brown or Orange for at-large even though they're both running and 2 get elected.

The way it often works in DC, reformers sometimes "bullet" vote for one candidate to make sure they get one of the 2 spots.

Of course that's assuming any "reformer" even runs this time at-large.

by Tom Coumaris on Jun 19, 2012 10:19 am • link • report

Why doesn't GGW provide a standard link to "City Journal" in its Other Sites listings? This outstanding publication touches on many topics regularly discussed by GGW contributors and commenters. Recently published articles include:

Ungridlocked: Mayor Bloomberg's transportation reforms have unclogged New York's streets and made them safer (by Nicole Gelinas)

http://city-journal.org/2012/22_2_nyc-transportation.html

Wall Street Isn't Enough: Finance-heavy New York must recapture its economic diversity (by Edward L. Glaeser)

http://city-journal.org/2012/22_2_ny-finance.html

And, of course, the sobering piece about Chicago referenced above.

David and et al. Can we get a link added to GGW? Pretty please.

by Sage on Jun 19, 2012 10:22 am • link • report

@Gray; yep. Specultaive valuation vs. real valuation. Close in can more easily generate rental income as well.

Loudoun county seems to be doing quite well. PW and PG county, on the other hand....

by charlie on Jun 19, 2012 10:23 am • link • report

@charlie
Jut looking at the graph on housing starts, it looks as if we're still seeing lower multi-family than the entire last decade -- perhaps back to 1997.
Looks about the same as 2003 to me, and higher than every year 1992-1998.

In fact, again, eyeballing it, that the entire housing starts this year is less than the mutli-family category in 2007.
Maybe you mean 2005?

Also, looking at DC and Arlington, there is MORE housing being built than in the past two decades on average. If the DC Metro averaged 29K/yr and 8% of it was DC/Arl, that's 2320 permits. This past year there were 12.300 permits and 36% were DC/Arl, that's 4428!

by MLD on Jun 19, 2012 10:24 am • link • report

I'm reading Jane Jacob's book "Dark Age Ahead." In it, she correctly predicts the housing bubble and its resulting collapse. This book was published in 2004! Was she an oracle or what? Did anyone else in that year, or even 2005, foresee the soon-to-come housing disaster?

by Sage on Jun 19, 2012 10:35 am • link • report

The Chicago article is a mishmash of rightwing cliches pinned on the loss of mostly poor people. Somehow this is the fault of public employee unions and pension funds, except the explanation makes no sense at all. If GGW is going to link to ideological claptrap like this it also should link to The Daily Worker for balance.

by Rich on Jun 19, 2012 10:37 am • link • report

^^^
While I didn't agree with the Chicago piece wholeheartedly, it offered up some valid points. To dismiss it out of hand is nonproductive.

"CIty Journal" does tend to drift conservative, but of the dozens of quality articles it publishes each year, many are balanced and are worthwhile reads.

Diversity is a common theme preached to enhance our communities and lives. Shouldn't we also consume a "diverse" array of thoughts and ideas to broaden our horizons and preconceptions?

by Sage on Jun 19, 2012 10:48 am • link • report

@MLD; good catch.

However, the point I'm trying to make is we see some specualtive valuation on the DC/ARlington side, but rent values might keep that valuation in check.

But not postiive for renters or supply side people.

by charlie on Jun 19, 2012 11:03 am • link • report

The piece about Chicago's "decline" was pretty interesting, but also a bit incoherent. The argument that its population decline mirrors a larger decline doesn't make much sense.

Begin with Chicago’s population decline during the 2000s, an exodus of more than 200,000 people that wiped out the previous decade’s gains....Chicago is also being “Europeanized,” with poorer minorities leaving the center of the city and forced to its inner suburbs: 175,000 of those 200,000 lost people were black...The demographic disaster extends beyond city limits. Cook County as a whole lost population during the 2000s...The larger Chicago metropolitan area grew just 4 percent—less than half the national average. What little growth Chicagoland had, then, was concentrated in its exurban fringes, belying the popular narrative of a return to the city.

So, pretty much the entire population loss in the city of Chicago has come from extremely poor folks moving to the suburbs. This is essentially a massive transfer of wealth from the suburbs to the city. The author then goes on to argue that "the demographic disaster extends beyond the city limits", though I'm not sure what relevance that has in an article about the decline of the city of Chicago.

Bonus points for the alarmism about Chicago being "Europeanized", as though we're supposed to be horrified by the transformation of Chicago of the late 80s into Bruges.

As far as Chicago's economic woes, chalk it up to being the de facto capital of the industrial midwest during the biggest recession since the 30s. It's likely that Chicago will continue to fall behind emerging global capitals like NYC and DC, but the whole population bean-counting is weirdly narrow-minded.

by oboe on Jun 19, 2012 11:03 am • link • report

@charlie
However, the point I'm trying to make is we see some specualtive valuation on the DC/ARlington side, but rent values might keep that valuation in check.

But not postiive for renters or supply side people.

Doesn't seem like speculation to me given that when the economy tanked housing prices in DC/Arl didn't tank like in further away places. To me that means the market/buyers think the properties are actually worth that. Or at least that there's enough competition to buy a property that buyers are willing to pay more.

One thing that does need to be looked at beyond "permits" is how much are we really increasing the supply of housing. If we're just tearing down/gutting old places to build new luxury stuff we're not really increasing housing supply. If we are building bigger then we are increasing supply.

Housing prices in other areas increased because of cheap credit. Since anybody could get any amount of money for a house, prices just kept increasing since those prospective buyers could outbid each other. And the perception that prices would keep going up meant that it didn't matter who got cheap credit, since the house could always be sold for more than it was bought for. Then the cheap/available credit came crashing down and housing values dropped.

Rising housing costs are not good for renters though. Especially not for low-income renters who may see their buildings neglected to the point that they are uninhabitable so that owners can sell them to be gutted.

by MLD on Jun 19, 2012 11:27 am • link • report

Did anyone else in that year, or even 2005, foresee the soon-to-come housing disaster?

http://www.bankrate.com/brm/news/mortgages/bakerfamily.asp

by Holden Lewis on Jun 19, 2012 11:33 am • link • report

I don't think anyone in 2005 on the ground level would be shocked by the outright fraud on mortgages. The price collapse and "housing disaster" was as much a problem of Lehman and Bear failing in their own ways.

@MLD: we are actually agreeing; DC/ARlington prices were not based so much on speculation but on real value. That value has lasted.

I do think your point on teardowns is somewhat valid, and congruent with what I see in DC. However, it still mostly a finance question. The only financing out there is for multiunit rentals.

Here is a link to the original census report:

http://www.census.gov/construction/nrc/pdf/newresconst.pdf

by charlie on Jun 19, 2012 11:42 am • link • report

@MLD: we are actually agreeing; DC/ARlington prices were not based so much on speculation but on real value. That value has lasted.

What I found most surprising is not that the price of SFHs in DC have stayed stable since the pre-collapse peak but that rents have finally caught up to the monthly mortgage payments. At the height of the bubble, the price-to-rent ratio on my street was in the mid-20s. Now it's down to the mid-teens.

by oboe on Jun 19, 2012 11:54 am • link • report

@Oboe; and I suspect that has more to do with credit scoring than anything else.

You're seeing that in the used car market as well, an artifical price bubble on cars under 10k. People have to purcahse with cash or "we don't check credit" places that are financing the cars at 75 a week (or the equivalent of 15% interest rates)

Probably what we need is a 3 or 5 year limit on credit reporting.

by charlie on Jun 19, 2012 12:26 pm • link • report

@charlie: Probably what we need is a 3 or 5 year limit on credit reporting.

Why? So that people who went into bankruptcy or just stopped making mortgage payments can get loans sooner?

by Gray on Jun 19, 2012 12:54 pm • link • report

@Sage -
A lot of people (but a minority) saw the bubble growing. I had a great conversation with my landlord in 2003 about the growing bubble. We both saw it and the only question (to us) was how big it would grow before it popped. I owned no property so had no skin in the game but he was well situated and made great (conservative) moves through the whole game.

by Thyme on Jun 19, 2012 1:46 pm • link • report

@Gray; yep.

by charlie on Jun 19, 2012 1:50 pm • link • report

@charlie: Why should lenders be restricted from using information about their borrowers? And why shouldn't borrowers pay a penalty for walking away from their debts?

by Gray on Jun 19, 2012 1:59 pm • link • report

@Gray, because we're in a major recession, with over 10% unemployment (and in reality much higher), running a trillion dollar a year deficit, and we DON'T do that it won't be until 2015 or later that we start to see a recovery.

Moral hazard is real, but we need growth.

Alterntively, we can do some high sustained inflation, but that is going to hurt the middle class -- if you have a 401(k) -- more.

by charlie on Jun 19, 2012 2:11 pm • link • report

@charlie: There are better ways to spur growth than by rewarding those who abused things the most in the boom times. Like, say, actually investing in infrastructure.

But I guess that wouldn't raise property values, and somewhere along the line we decided that we all have the right to ever-appreciating home values.

by Gray on Jun 19, 2012 2:26 pm • link • report

@Gray; oh, another RINO. Liqudate this, liqudate that. That you Mr. Mellon.

I doubt returning to a property bubble is a good idea. But that basic problem is we have cheap money, but expensive credit, and credit doesn't exist for something like 25% of the population.

If you want to remove bubbles, have the goverment kill the 30 year mortgage.

by charlie on Jun 19, 2012 2:49 pm • link • report

@Sage,

I used to read a dc-based blog devoted to the developing real estate bubble as early as 2005. More financially conservative people were freaking out about the combination of subprime lending and rapidly increasing housing costs. By 2006 I was trying to warn my friends from buying. Oddly enough, I think I recognize a commenter name or two on GGW from that blog.

by Catherine on Jun 19, 2012 3:17 pm • link • report

"@charlie: There are better ways to spur growth than by rewarding those who abused things the most in the boom times. Like, say, actually investing in infrastructure"

1. that would be a good thing, but I am not holding my breath congress will go for it - and if they do, it won't be big enough

2. To the extent that we have real limits on govt indebtedness (as opposed to purely political ones), that limits how much fiscal stimulus we can do. I'm not sure a creditor haircut is a bad idea (and may well result in a large net increase in aggregate demand)

People arent entitled to have their property values always go up, but by the same token creditors aren't entitled to have their bad bets always enforced. Especially when the bet is bad for reasons the creditor should have seen as well as or better than the debtor

OTOH Im not sure further shortening the time for bad marks on credit histories is an efficient way to do that.

by AWalkerInTheCity on Jun 19, 2012 3:30 pm • link • report

@charlie:

oh, another RINO. Liqudate this, liqudate that. That you Mr. Mellon.
I doubt returning to a property bubble is a good idea. But that basic problem is we have cheap money, but expensive credit, and credit doesn't exist for something like 25% of the population.

If you want to remove bubbles, have the goverment kill the 30 year mortgage.

I'm not seeing why you called me a RINO. Care to explain?

Killing the 30 year fixed rate mortgage would definitely depress the housing market. But I'm not seeing the point of your proposal. I thought you wanted to improve the housing market?

As for money being cheap but credit being expensive, this is true. So why do you think that making safe borrowers indistinguishable from proven financial risks would be a good way to cheapen credit? Moreover, why is cheapening credit the goal anyway? My point above was that a far better use of that cheap money would be to invest in infrastructure. Encouraging lending to those with bad credit isn't really a long-term, sustainable strategy,

by Gray on Jun 19, 2012 5:00 pm • link • report

@Gray

I agree, the 30-year mortgage is right up there with .18c gas taxes as being an absolutely terrible thing.

I have a 15-year mortgage on my (recently purchased) Petworth Rowhouse, and for me to go underwater, would have to see its value drop by over 5% a year. I would then very quickly catch up.

Further, I bought a house I can afford, as a result of the 15 year mortgage.

by Kyle W on Jun 19, 2012 5:32 pm • link • report

@Holden Lewis; @Thyme; @Catherine

Your inputs when the alarms bells on the housing crisis began were informative. Thank you.

For me, the first indications of potential trouble were a series of articles in the Washington Post business section that appeared c. 2005/2006. Although the warnings were growing more insistent almost daily, I distinctly remember real estate pros being quoted as saying everything was fine, even to the very last moment when it was clearly apparent the market was collapsing.

by Sage on Jun 19, 2012 6:15 pm • link • report

The 7 year limit in the US is directly tied to the existence of the 30 year mortgage; in most other countries it is 5. Are foreigners less likely to turn mortage into junior debt -- yes. Is this always a bad thing -- no.

We'll see what the fed does tomorrow.

In terms of putting an additional trillion or so on the credit card and buying infrastructure, count me uneasy. There are reasons why our rates our so low and i am not sure the market would absorb another 2-3 trillion in short order. In particular our Chinese bankers would not be happy.

That's not to say there is a place for such spending -- after all DC is a great example of what you can build when you waste goverment money -- but the money market is pretty messed up as well and not giving reliable signals. That is why I think the Fed is so worried.

The Fed is going to find it hard to cut rates more, and more importantly those actions aren't translating into easier credit. So you've got to look at other actions.

The housing market will pick up in 2014, after the intial wave of debt reporting starts to disappear. That is a long time to wait.

by charlie on Jun 19, 2012 6:40 pm • link • report

@charlie: So...any explanation of why you called me a RINO? I'm still confused by that.

by Gray on Jun 19, 2012 6:46 pm • link • report