You Got to Be Kidding Me!

That’s One Way to Avoid Property Taxes

Posted in Economics, Urban Planning by Stacy McMahon on April 18, 2005

The Post reports that the high cost of housing is pushing some DC-area residents into the sea–literally. If you can organize your life to fit on a boat, you can think about mortgage and slip fees as little as $800 a month, compared to $9-1400 for a 1-bedroom apartment or $2-4000 for any type of house. It’s not just speculation; they found people from all walks of life who’ve given up on buying a house and are floating full-time.

Known in nautical circles as liveaboards, they include recent college graduates frustrated with high rents and retirees on fixed incomes who struggled to pay property taxes on their former houses. For some, it is the only way to stay off the streets.

“I’ve been homeless before, and I won’t be homeless again,” said Donald Littlepage, 44, a sheet-metal worker who moved aboard his boat after a second divorce.

The article goes on to say that several local marinas recorded a 300% increase in liveaboards in the past ten years. The fastest-growing county in the area (Loudoun) grew conservatively about 130% in the same timeframe. It’s hard to interpret those numbers. Living aboard is also a lifestyle choice that becomes available to more folks as the economy improves. The economics are compelling, though. There are no property taxes (potentially not even personal property since the boat doesn’t sit on real property) and the price of land, currently 50% or more of the cost of a new house in the area, doesn’t count into the mortgage at all. Offhand, I’d say there’s a solid opportunity here for an imaginitive marina developer and some project managers familiar with the houseboat lifestyle in the Pacific Northwest.

Juxtaposed with this, I heard on the radio this morning that the number of housing permits being issued in the metro area is falling. …Huh?


Northern Virginia Can’t Build Housing Fast Enough

Posted in Economics, Urban Planning by Stacy McMahon on April 11, 2005

This rambling story in the Times details the plight of developers and would-be homebuyers in Virginia’s DC suburbs. Land is nearly half the cost of a new house, builders are working flat out, the lead time (for zoning and public approval) for projects is getting longer due to NIMBYism and limited funding for the regulatory agencies that have to review proposals, and all while the costs of construction material and tools are shooting up, apparantly due to a spike in foreign demand.

“The industry is stressed out,” said David Flanagan of Elm Street Development.

“The industry is working at capacity, engineers are working at capacity,” he said. He called the situation “the perfect storm.”

“Gas prices are going up. Interest rates are going up, and national builders are gaining an increased market share here,” he warned.

There’s a lot of bad news here; for planners it’s that a market this overheated has no room for experimenting with different kind of projects. Even if you argue that there’s no downside risk against such severe shortages, you still have to deal with already-conservative builders who are up against the wall (or see themselves that way) in their profit margins. I suspect a lot of good new urbanist projects aren’t going to get built in the next few years.

Managing Growth In The Ex-ex-urbs

Posted in Urban Planning by Stacy McMahon on April 4, 2005

Today’s Post has an informative article about the tribulations of the town of Scrabble, West Virginia as it deals with the arrival of the Washington, DC suburbs. The story is fairly straightforward: aware that a farm just outside the village was going up for auction and likely to become a housing tract, a group of local residents tried to raise the money to buy it. What’s interesting is that the group intended not to create a conservation easement or keep the land in agriculture, but to build the housing their way, presumably to preserve that character of the town. In this case they ran out of time and money, and the parcel is now under contract, likely to a developer.

I think this is a scenario where planners can usefully step in and facilitate an understanding between local stakeholders and development interests. Unlike suburbs with their mostly transient population, rural towns usually have a strong sense of place–residents are already sympathetic to the idea of redeveloping their downtowns at the outset, skipping the phase where a secondary car-based strip springs up out near the bypass. The developers are in the business of logistics, using a set of standardized templates and processes to get each project built quickly, since time is money. Those aren’t diametrically opposed goals, and there should be a lot of opportunities for the two groups to work together to their mutual benefit. The alternative is the canonical us-vs-them mentality:

Newcomers — the potters who work in the antebellum broom shop in Scrabble, the Beltway professionals buying up Victorian houses in Harpers Ferry — want flora and farms to stay.

But as farmers here say, their land is their 401(k).