You Got to Be Kidding Me!

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.

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