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Streetcar won't make Columbia Pike unaffordable

Some residents have expressed concern that the Columbia Pike Streetcar will bring changes to the Columbia Pike area. Besides traffic impacts, another oft-repeated criticism is that streetcar-oriented development will harm the relative affordability of many areas along Columbia Pike.


Photo by cliff1066â„¢ on Flickr.

The price of housing has soared in the areas of Arlington that are close to the Metro. It is likely that the streetcar will create a similar effect. Meanwhile, Arlington has the second-lowest amount of affordable housing in the Commonwealth of Virginia.

In response, the county has devised one of the more aggressive responses to providing affordable housing in the region. The Arlington County Board passed the Columbia Pike Neighborhood Plan last July to address many questions surrounding the future of Columbia Pike, including housing affordability.

The neighborhood plan covers much more than affordable housing. It deals with zoning, transportation, open space, schools, parking, preservation, and more. The plan is comprehensive and ambitious because it is a plan by the county to preserve 100% of the "Committed Affordable Units" (CAFs) currently in the planning area of the Neighborhood Plan. This is much higher than the county-wide requirement to retain 50% of CAFs in any redevelopment project.


Committed Affordable Units (CAFs) in Arlington. Image from the plan.

We're talking about two types of affordable housing

There are two types of affordable housing in the plan. CAFs are housing owned by a non-profit organization or subsidized at some level of government.

"Market Rate Affordable Units" (MARKs) are housing units that are not subsidized in any way, but whose market price is low enough to be affordable to families or individuals making below the Area Median Income (AMI). For MARKs, there is no obligation for the landlord to keep the price below the market rate.

Critics of the Columbia Pike Streetcar usually contend that the streetcar is meant as a tool to gentrify the corridor and eliminate affordable housing on Columbia Pike. This ignores the county's commitment to preserve and expand CAF's throughout the corridor. Moreover, when critics speak of the loss of affordable housing, they mean the loss of MARK's that the private sector isn't obligated to provide.

Actually, absent the fixes prescribed in the Neighborhood Plan, all of the MARKs located in the corridor will disappear regardless of whether the streetcar is built or not. That's because, due to Arlington's location just outside of Washington, DC, Arlington is a very popular place to live.


Photo by cliff1066â„¢ on Flickr.

The staff report on the Neighborhoods Plan has a table that lays out what county officials expect to happen. By 2040, Columbia Pike will not be able to retain MARK's affordable at a level of 60% AMI. Apartments at 80% AMI will likely increase with the number of overall units.

To counter this, the county aims to triple the number of CAFs at 60% AMI from the current (as of 2010) 1,120 units to 4,730 by 2040. This is a huge part of the projected 14,000 new units by 2040.

So while the number of apartments today compared to 2040 is expected to grow three times its current size, the number of affordable apartments will also grow to twice its current number. Arlington County believes it will be able to achieve that growth through both financing incentives to developers to keep and add CAF's and through the adoption of a Form-Based Code that will allow for greater and mixed-use density along Columbia Pike and its commercial areas.

Moreover, proposed buildings can get density bonuses if they provide more housing that meets the target of 80% AMI. Projects that share land with historic properties can also get density bonuses to preserve the older buildings.

Currently, the area defined in the Columbia Pike Neighborhood Plan only has 19% percent of the county's total number of CAF's. Meanwhile the county is planning on increasing the number of CAF's in the area more than other areas of the county. This includes providing housing that is priced at 40% of AMI where no units in the planning area currently exist.

The county is also redeveloping its own facilities as the Arlington Mill Recreation Center which will provide 122 new housing units for families making below 60% AMI.


Photo by Brett VA on Flickr.

Affordable housing concerns go beyond the streetcar or other development issues

Arlington County is a geographically small county located in the middle of a fast-growing area. Many other jurisdictions effectively provide affordable housing by allowing development farther from the core, but that is not an option for Arlington. This has forced the county to look at new ways of providing affordability. It wants to do so to preserve the county's diversity.

Critics of the streetcar plan contend that the streetcar will eliminate MARKs along Columbia Pike, but that fails to recognize that much of that housing would be lost regardless, even with no streetcar, because of the overall market pressures on the entire region and the desire to live both closer to work and in more urban settings.

Trying to prevent any and all development would not help the area's affordability either. Instead, it would eventually work against affordability by restricting the number of places for people to live. This is why it is important to lay out strategies to preserve the existing affordable housing and provide opportunities to plan for more. The Neighborhood Plan is a good start toward this goal.

Canaan Merchant was born and raised in Powhatan, Virginia and attended George Mason University where he studied English. He became interested in urban design and transportation issues when listening to a presentation by Jeff Speck while attending GMU. He lives in Falls Church.  

Comments

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And if street cars make Columbia Pike unaffordable, build some more street cars. There's a supply and demand issue that's not being addressed here. Just becasue having a great amenity improves the value of a neighborhood dosen't mean it's bad, especially if it's improving our environment and encouraging walking and saving the public a lot of money.

by Thayer-D on Mar 15, 2013 1:02 pm • linkreport

It will be interesting to see how this plays out. I agree that the street will realistically add to land value in close proximity say 1000' of Columbia Pike and that lands fronting along it will likely be redeveloped extensively. However, those new developments should generate a lot of money for the county not to mention new jobs in the service sector for the area. A lot of the housing in the area is garden style while new development will likely be multi-storey and can probably accodomate a good number of designated affordable units. Hopefully the county will follow through on its goal of creating new CAFs.

by Alan B. on Mar 15, 2013 2:02 pm • linkreport

Great article Canaan!

I also think that, though immediately it creates a 'gentrifying effect', transit oriented development will, over time, decrease the cost of living in areas served by mass transit. There is a finite amount of housing stock in locations accessible by mass transit, and the price of housing in those areas has gone up drastically over the last decade or more. Clearly there is a demand for this kind of real estate, and the supply must be created to meet that demand.

by Neil Cooler on Mar 15, 2013 2:11 pm • linkreport

Is there some kind of block by block rendering of how the Pike is supposed to look after all this development? It's hard to get an idea just from the vague maps in that plan.

by Chris S. on Mar 15, 2013 2:14 pm • linkreport

Chris,

It's not block by block but the website for the neighborhood plan (and the pdf of everything) has a ton of renderings of what a lot of stuff is projected to look like.

http://www.columbiapikeva.us/revitalization-story/neighborhoods-area-plan/columbia-pike-land-use-housing-study-background-information/

by Canaan on Mar 15, 2013 2:17 pm • linkreport

In particular look at the link for the Final Neighborhood Plan

by Canaan on Mar 15, 2013 2:20 pm • linkreport

"fails to recognize that much of that housing would be lost regardless, even with no streetcar, because of the overall market pressures on the entire region and the desire to live both closer to work and in more urban settings."

Yep, just upzone Columbia Pike and you're done. Why bother with the streetcar?

by charlie on Mar 15, 2013 2:42 pm • linkreport

er charlie, its not about upzoning. Without higher density the market rate affordable units will disappear, as the existing garden apartment complexes are renovated and rents increased. By enabling higher densities, the street car will allow more market rate units, but also more guaranteed affordable units.

Now is it POSSIBLE that higher densities will come if we make investments in bendy buses instead of the street car? Maybe. But thats not the issue being addressed in the prediciton that affordable units will disappear anyway.

People seem to assume that densification and gentrification of affordable units are equivalent, as if developers were not capable of upgrading garden apartment complexes without adding density.

by AWalkerInTheCity on Mar 15, 2013 3:03 pm • linkreport

AHC is a good idea. Lets also distribute that housing fairly all along Columbia Pike unlike how it is right now.

by GS on Mar 15, 2013 3:41 pm • linkreport

..Arlington Mill Recreation Center which will provide 122 new housing units for families making below 60% AMI...Another location in the same neighborhood being developed by AHC, the shell location.

http://www.ahcinc.org/TheShell.html

by GS on Mar 15, 2013 3:48 pm • linkreport

One more time: the more affordable housing units you require, the more you have to increase market-rate units to gain equal revenue.

by Phil on Mar 16, 2013 8:14 am • linkreport

Phil: Not really, no. Market rate units go at a rate based on the market, which is about total supply in the area for similar units, and the level of demand for units of that type in that and similar neighborhoods.

An individual apartment developer is not going to increase their rents 10% if they have to build 10% affordable housing. If people would rent the units at 10% more they would charge 10% more regardless of the housing requirement. If people won't, then the apartment owner would lose money by raising the rents 10%.

The affordable housing requirement either comes out of the "producer surplus," the profits that the developer can make over and above the cost of building, approvals, etc. or it pushes their surplus below zero and then a project doesn't happen. So a requirement may interfere with some projects on the margin, but mostly comes out of producer surplus.

by David Alpert on Mar 16, 2013 8:36 am • linkreport

Elimination of traffic lanes will push traffic to the side streets. Locals are already taking the side streets to avoid delays on the Pike.

by AndrewJ on Mar 16, 2013 8:38 am • linkreport

AndrewJ,

No traffic lanes are being removed because VDOT won't allow it. That's why this is streetcar project rather than say a BRT or separated ROW light rail option.

by drumz on Mar 16, 2013 8:45 am • linkreport

In the District properties fronting on the streetcar line will be "assessed." This assessment will raise the cost of living in apartments as well as for businesses. This fact seems to be buried in the details.

The same assessment will probably be imposed in Virginia.

by Karl on Mar 16, 2013 9:52 am • linkreport

Karl: There has been no decision about that in DC yet. There is a task force studying financing options. Having a "value capture" system where some of the extra property values go to pay for the streetcar is a likely part of it (and should be), but it's not clear if residential properties will pay, or not, or maybe just large buildings where, as above, the market rate is going to depend on the overall market and not on the assessments which will just come out of profits. And since the streetcar will raise the value of building and add profits, it's likely worthwhile.

by David Alpert on Mar 16, 2013 10:02 am • linkreport

Having a "value capture" system where some of the extra property values go to pay for the streetcar is a likely part of it (and should be),

Also, value capture techniques can involve an assessment (aka a property tax increase) or simply the tax increment (the prop tax rate stays the same, but the increased revenues from increased values are dedicated to paying off the investment).

Same concept, but two different mechanisms.

by Alex B. on Mar 16, 2013 10:16 am • linkreport

Maybe I'm just naive as to the way "affordable housing" works because I've heard so many definitions and so many ways to apply it, but here's an example, feel free to chime in. A developer builds a property with 10 apartments, each the same exact size and layout, and each apartment will fetch exactly $1,800/month on the open market. And there was enough demand to fill all of those apartments at $1,800/month, which in Arlington is probably not a bad assumption.

Now an entity (Arlington County, state of VA, etc.) all of a sudden says to the developer 20%, or 2 units, have to be rented out such that they are "affordable", whatever that means, and those units can only be rented to certain income people. So the developer drops the price to $1,200/month. Now, instead of the original $18,000/month he was pulling in, he's pulling in $16,800. Maybe even at $16,800/ month, he's still making money, but he wants $18,000/month, because he knows that's what he can get. So the other 8 units would have to go up to $1,950/month.

Am I wrong in this example. Would the developer just leave the other 8 units at $1,800/month. The streetcar will probably no doubt increase the market rents, so a property is going to go for the maximum amount it can get. Unless it is forced to keep units low. And how does that work, anyway. Will a developer be told by some government agency that they have to keep a certain amount of units at a certain rate. There will be an infinite demand for those units if that's the case, and it will never be satisfied.

by Nickyp on Mar 16, 2013 3:07 pm • linkreport

NickyP,

All things being equal if 1800 is the market clearing rate then the landlord can't raise it. Similarly if the cost of construction is greater than the money made from the rents then it won't get built but then we'd likely be in a situation where market rate rents weren't so high and extant housing would be enough.

CAFs aren't meant to be the sole solution to housing in Arlington. But it is a good way to mitigate a lot of the initial effects of the price of new housing. So while it can't help everybody it is great for the thousands it does.

by Canaan on Mar 16, 2013 7:15 pm • linkreport

It sounds like Arlington plans to offer incentives for affordable units, like density bonuses. So, the developer *could* build 10 units at market rate, or 12 with 2 affordable. Yes, there are construction costs to build the other 2 units, but the extra units help keep profits more level with the reduced rents on some units. And what Canaan said regarding the market-clearing price. Since market rate units are likely to be priced for as much as they can get, there's little opportunity to increase rents to cover the lost rent of affordable units. And while there's lots of demand for affordable units, the demand is not "infinite" since only those making below 40, 60, or 80% of the AMI are allowed to rent them. I mean, I think most people would like to pay less in rent, but, by definition, well below half the population qualifies.

by Ms. D on Mar 16, 2013 7:57 pm • linkreport

Nickyp

A landlord isn't trying to make an arbitrary X amount of money per month, rather they are trying to make the most money they can every month. Using your example if they think that can rent 8 units out for 1950 a month they will regardless if they have two affordable units or not.

by nathaniel on Mar 16, 2013 8:18 pm • linkreport

There are, in effect, two arguments for the streetcar: to upgrade transit and to "revitalize" the Pike. As Charlie mentioned, the basic point of the argument in this post is that, without a streetcar, the demand for Columbia Pike will increase over time, which will itself allow for revitalization. Bendy buses have identical capacity to the streetcar vehicles planned for the Pike. So there is absolutely no need for a streetcar rather than a bendy bus. Why does GGW not publish an article with this view?

by Peter Piker on Mar 17, 2013 8:27 am • linkreport

Peter,

Well someone would first have to write that article and submit it.

But an articulated bus is not functionally the same as a streetcar.

A. Streetcars can have more cars added increasing the capacity.
B. riding on rails is a smoother ride than on the road
C. It's easier to board especially for people with disabilities because you don't have to worry about wheel wells and such.
D. Articulated buses don't last nearly as long as a streetcar vehicle so over time their maintence costs are much higher.

by Drumz on Mar 17, 2013 8:39 am • linkreport

Actually, it is not just that streetcars won't hurt affordable housing, the streetcar line is necessary to preserve affordable housing on the Pike. Without higher capacity transit that we know people will use (because people like streetcars better than buses), we cannot add the density necessary (14,000 new units) to provide preservation incentives for the current 6200 market rate affordable units.

by John Snyder on Mar 17, 2013 10:11 pm • linkreport

John has it about right, it's only with these dedicated transit lines that we are going to increase affordable housing for the obvious fact that maintaining a car requires money that could be going into food and shelter. Here's a great article on that aspect of affordability.
http://www.planetizen.com/node/61202

by Thayer-D on Mar 18, 2013 8:24 am • linkreport

It would certainly be a shame if poor people were to have to live in less-than-convenient areas.

by awesomepossum on Mar 19, 2013 2:33 pm • linkreport

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