The Housing Situation in the Washington Region (November 30, 2005)

Background

A principal theme in many recent development proposals in the Dulles Corridor is the need for housing in general and workplace/affordable housing in particular.  Regional and county-wide statistics have oft been quoted and the suggestion has been made that the re-planning of the Hunter Mill Special Study area is unquestionably a component to the solution for the overall housing problem. This paper addresses the question: Are the housing needs in the County so pressing that long-standing planning principles and the Concept for Future Development in Area III should be summarily abandoned via spot planning?

Regional Forecasts and Analysis

The Metropolitan Washington Council of Governments (MWCOG  www.mwcog.org), regularly provides forecasts of housing, employment and population growth for the region.  Regarding the data they supply, they state that  “..these data are the only official planning forecasts accepted by those who make government policy decisions for the region”.  Indeed, all serious discussion of the future of the region utilize this data in some form.  Each jurisdiction in the region looks at their own master plan and provides growth projections based on what is in their plan.  Those projections are reconciled with a regional model maintained by MWCOG.  

The table below shows the most recent forecast, round 7.0 from 2005.  This data differs from what is available in the “Growth Trends to 2030: Cooperative Forecasting in the Washington Region” in that it includes seven counties which are an integral part or the regional picture, but are not members of MWCOG.

MWCOG Round 7.0 Forecast Employment/Housing Ratio for the Washington Region 
www.mwcog.org/store/item.asp?PUBLICATION_ID=242 and www.mwcog.org/store/item.asp?PUBLICATION_ID=243

Key points:

• The forecast shows that between 2000 and 2030, on a regional basis, the planned housing supply is stable based on current planning and projections.
• The ratios in the forecast are improved somewhat from the Round 6.3 forecast in 2003, which had a ratio of 1.69 in the year 2030.
• The Ratio does not imply that we are at equilibrium with respect to supply and demand, but does show that there is no impending supply crisis.
• The Ratio for future years shows the rate at which development is likely to occur if planned housing is built in step with anticipated market forces.
• The Ratio for the year 1995 from the Round 5.3 forecast was 1.64 regionally.  This forecast was done in 1998.  These numbers are from the middle of a decade where the region had virtually no housing appreciation, and lots of inventory on hand.  It was a “buyers market”, and one could argue that housing supply and demand was out of balance to the supply side of the equation at this time.
• George Mason University’s Center For Regional Analysis, using MWCOG Round 6.3 data from 2003, estimates that in the year 2005, the region was short of housing equilibrium by 43,200 housing units.  The housing ‘equilibrium’ratio implied by that calculation is 1.61, which is the same ratio the Round 7.0 forecast says we are at today.
• Clearly the affordability of homes on a regional basis has declined since 1995. The forecasts do not tell the whole story. What factors other than housing supply should we be considering?

What is the situation in Fairfax County?

MWCOG Round 7.0 Forecast Employment/Housing Ratio for Fairfax County

Fairfax County’s ratios are slightly higher than the regional average because of the high volume of jobs the county has attracted.  For comparison sake, Arlington County’s ratio in 2005 is 2.12 and is projected to be 2.3 in 2030.  The District’s ratio is 2.96 in 2005 and 2.7 in 2030.  Loudon County’s ratio is 1.4 in 2005 and 1.59 in 2030.

Conclusion:

The Region’s recent growth has spurred discussions at all levels about congestion, the environment, affordability, balancing housing and jobs etc..  Given the data from MWCOG, it is clear is that there is no need to abandon the guiding principles of the Fairfax County Comprehensive Plan, or to make the kind of spot exceptions to planning principles that lead to charges of developer favoritism and cause a loss of public trust in the equity of the change process.  It is also clear that Fairfax County alone cannot and should not try to solve the region’s problems and challenges, and that better regional policy coordination is highly desirable. 

Additional Information

What follows is a list of issues and related questions that have been raised, followed by additional sources of housing information, analysis and comments regarding the Reality Check exercise and George Mason University’s Center for Regional Analysis.

Issues and Questions:

Some county-wide issues and related questions must be studied, answered and publicly communicated before any decisions are made that would alter the policies and land use planning and housing patterns that are incorporated in the Comprehensive Plan.  Some of these issues and questions follow.

Balance Jobs and Housing

• Have we planned for too much commercial density?  Fairfax County is no longer as dependant on commercial property for tax revenue as it once was, so is it now feasible to alter the balance?
• In Fairfax County, does balancing housing and jobs mean just adding more housing close to jobs, or should it also mean converting some planned commercial sites to high density residential? 
• Does balancing housing and jobs mean we also add more jobs to predominantly residential areas in an attempt to shorten commutes?  For example, would it be desirable to put more jobs in the outer fringes of the region so that work and home can be in closer proximity?
• The District has a gross imbalance of houses to jobs.  In fact, it would have to add over 200,000 households to achieve equilibrium.  Adding that number is not practical, but what policy changes can be implemented to alleviate this imbalance which causes so much congestion?  Note that the District would have to add 112,000 households just to get its population back up to the 1970 level.  Work force housing advocates must have this, the region’s grossest imbalance as their #1 target.

Congestion

• Will packing even greater housing density around employment zones actually reduce overall congestion significantly?  Specifically, what percent of these workers will actually work close to home, or take mass transit?  If it is not substantial, have we not increased our congestion problem? 
• The east side of the region lacks jobs.  This condition adds to the region’s congestion problems.  What policies can be pursued to help achieve greater balance across the region?

Affordability

• Is there a target ratio of employment to housing which will keep the region more affordable than comparably sized regions elsewhere in the county? 
• If an ideal ratio is identified, how will the jurisdictions in the area work together to achieve regional balance and maintain it a manner that improves everyone quality of life?
• Is the ratio of median household income/median home price the best measure of affordability?
• What impact would applying the affordable dwelling unit ordinance to high-rises have?

Reality Check – www.realitycheckwashington.org

The “Reality Check” held in Washington was a chance for hundreds of leaders in the region to take stock of where the regional growth is headed, to examine growth patterns and to propose future directions.  The central questions posed included: How will this region handle the coming growth through 2030? and, where will we put new housing and jobs?  The event was sponsored by the Urban Land Institute of Washington.

Notable points from the event:

• The Brookings Institute did a study in 1999 that said the region was divided by race, job growth and public investment.
• The wealthiest households and most of the job growth is located in the western portion of the region.  This east-west divide worsens congestion since job opportunities are across town.
• Over half of the groups at the function cited the following guiding principles for future development:

–          Preserve and protect natural areas, green spaces and waterways

–          Create a better balance of jobs and housing throughout the region

–          Focus development near transit stations

• To accommodate the expected new growth in residents and employment, the Reality Check participants said they would essentially maintain the current ratio of households and jobs that are inside the beltway, inside the urban envelope and even outside the urban envelope.” MWCOG forecasts would not do this, but allow for more sprawl on the fringes.

• Change will not occur until there is a regional blueprint that is based on broad public participation, deep community involvement, and a high-quality design process that can overcome the objections of local “naysayers”.

Comments:

The change processes utilized in many instances recently has not been capable of achieving deep community involvement because they do not give community leaders a stake early on, and do not allow the public generally the chance to get educated and understand the larger context of the issues being discussed, or to get answers to question relevant to the downstream impacts of a proposal.  Much of the so-called “naysaying” is simply a reflection of inadequate processes that leave a great deal of room for skepticism or outright distrust of elected decision makers.  The decisions that lie ahead require upgraded processes in order to garner public support.  Poor processes can leave the public with the impression that it has been manipulated in favor of a special interest.

George Mason University’s Center for Regional Analysis

www.cra-gmu.org/forecasts.htm

The Center has a variety of regional studies and forecasts which are of interest.  Their work in general suggests that a ratio of just  above 1.5 jobs per home may be more useful in forecasting the future housing situation given coming demographic changes.

They warn that when an inadequate supply of housing exists:

• Housing costs will increase, decreasing to overall affordability of the region.
• Increase demand for housing further from employment centers.
• Increase congestion
• Diminish economic potential and fiscal capacity

They propose:

• Redevelopment in areas of high access to jobs.
• Affordable dwelling unit ordinances should be applied to mid- and high rise housing.
• Better planning and zoning strategies.

Comments:

Some quantification of the actual benefit of even greater clustering near employment centers is needed.  The benefit is likely to be small in terms of the percent of residents who actually do work close by versus the percent who do not.  Is this configuration better than adding office space to areas which are “out of balance” because they are so completely residential?  Are our employment centers too intense?