Archive for September, 2010
Members of Generation Y
A few weeks ago, I wrote about our Montgomery County Snapshot report. Lots of interesting facts, that when shaken and poured in some form, really tell us a convincing story about the future.
- How fast will we grow
- Who is going to make up the population
- Will folks in the middle be able to afford living here
- Do we need to worry about future revenue
Before reading any further, watch the video we developed – with great music – that leads you through the maze of indicators in a logical order.
Let’s cover some important points. First, do we need to grow?
That question really is “where will the growth occur?” because we don’t have a choice about growth. We will grow regardless of current public policy. So while we cannot stop it, we can plan for it. Better to be on the train than watching it pull out of the station without us.
Second point. Having 97.5 % of our residential land dedicated to single-family homes means:
1. Not much is going to change in those areas
2. Property taxes will never be increased enough on low-density development to pay for our infrastructure maintenance and upgrades. Did you know MoCo is the seventh least dense place of the 10 metro counties?
Let’s think about where future growth will occur. Only 2.9% of the County land area (this does not include the incorporated areas – Gaithersburg, Rockville, etc.), is zoned for commercial, mixed use and industrial uses. That is very little for a County of 650 square miles. That 2.9% is where the growth will occur, such as strip malls in Wheaton and White Flint. Peppered into that mix are the sites where we may see some infill development, hopefully along the main thoroughfares.
While the areas with growth potential do not add up to much land, they can be more holistic in terms of services, jobs, etc. and represent the greatest revenue potential. Those areas are where we need to attract Generation Y. As noted in the video, property tax assessments over the last 20 years went up as follows.
- Bethesda – $9.8 million
- Silver Spring $4.3 million
- Rest of the county – $418,000
These numbers highlight how our urban centers hold the key to our future revenue growth.
Couple this with the data on ages. In these areas, the change in average age of residents over a 15-year period was as follows:
- Bethesda – dropped 12.1 %
- Silver Spring – dropped 22.5 %
- rest of the County – increased by 4.5 %
Statistics show that the Gen Y group wants urban lite locations (the blog Just Up The Pike has a great piece on this issue). And the Bethesda and Silver Spring numbers highlight this trend. If we provide more opportunities in White Flint, Takoma Langley, Kensington and Wheaton for example, then we offer an alternative to D.C. that is more affordable, accessible and diverse.
Sixty-three percent of our seniors live in single family. While many seniors will choose to age in place, many others will seek condos or apartments or senior living. In my building, there are lots of seniors because everything is so close for them. But this statistics has big implications because of the future turnover of the housing market.
With family sizes trending smaller, the questions in the video apply. With homes averaging four bedrooms and 2,300 square feet, who will be able to afford to maintain much of our housing stock? Our median house price of $460,000 is unattainable to anyone making the area median income.
And it is not just in home ownership where we are pricing ourselves beyond reach. Since 2000, the number of high-cost rental units increased from 16 percent to 51 percent. This is a serious social and economic development issue. When people cannot gain access to our service sector jobs, then we are not competitive in business.
So, if we are on track to see a drop in the number of working age adults to each senior in the County from 5.5 to 3.4 by 2030, this should be our wake-up call.
The indicators.
1. Our Gen Y graduates want to live in urban lite locations.
2. The only places where we can make significant changes to generate new revenue streams is around metro stations and strip malls, less than 2.9% of the County.
3. We have a huge supply of housing with more bedrooms than people.
4. Our population is aging fast and we are dropping in the number of working age people paying the bills.
Working with communities, property owners, County Council and the Executive, a team approach has begun to set the groundwork in places like White Flint and Takoma Langley where we can address each of those indicators. And this teamwork is continuing on the next plans like Wheaton and the East County Science Corridor. Look for more holistic thinking in these plans as everyone starts thinking broadly about how to grow in the most strategic and sustainable manner. That’s a subject for the next post.
Before reading any further, watch the video we developed – with great music – that leads you through the maze of indicators in a logical order.
Moving to Montgomery County from the Midwest, I’ve enjoyed seeing historic sites unique to the region. However, I’ve been surprised about the lack of knowledge and understanding about the importance of leveraging our historic resources.
A few years ago, I was in Atlanta to help restructure their planning functions and was shocked to discover they had no procedures to use historic properties as a redevelopment tool. But perhaps it is not that uncommon for primarily affluent areas to overlook funding opportunities. Places that have experienced disinvestment more regularly seek funding to make the economics work.
See the video below to tour an area of St. Louis where the downtown area was rediscovered – along with many neighborhoods using historic tax credits. Virtually every building in the video was vacant in 2000, yet seven years later, every one was occupied with about 4,500 condos and apartments and mixed uses.
Montgomery County does not have the historic commercial building stock of many former industrial cities, but it does have a lot of buildings over 50 years old that are representative of specific periods of growth in America. Montgomery County has designated more than 20 historic districts and 400 sites, all of which can take advantage of preservation tax credits.
The National Park Seminary is one of the best examples in the country that shows how a coalition of people can bring a national treasure back to life through dedication, coordination and tax credits. Take a walk through the development and see how restoring this unique complex spurred new development on the surrounding land.
National Park Seminary
The County is the second biggest user of state residential historic tax credits already. But we could do a lot more. In a county where the median house cost is about 2.5 times the national average, cost savings are important. Depending on the use of a property and its historic designation, property owners may be able to tap into federal, state and local historic tax credits to offset the renovation costs.
Now some people are afraid that historic designation means they cannot change their home. This is not true. Designation in the National Register of Historic Places does not limit the changes a property owner can make. Local designation is more restrictive, but generally in Montgomery County the rules are quite pliable.
It is important for the future of the County to provide the opportunity for people to upgrade their houses and to preserve neighborhoods. Imagine if homeowners in places like Connecticut Estates, McKenney Hills or Damascus could tap into a pool of tax credits offering a return on their renovation costs.
We are talking with the Long Branch community about the historic designation of the Flower Theater and Shopping Center on Flower Avenue. While much of the theater’s interior has been removed, tax credits could help renovate the building and attract new tenants.
Flower Theatre, Long Branch
If designated, the shopping plaza next door is also a candidate for rehabilitation tax credits. Historic designation of the shopping center and theater would allow for the buildings to be renovated with tax credits, while new construction could occur on the adjacent parking lot or on top and slightly behind the existing structures.
Flower Theatre and shopping center, Long Branch
Tax credits for historic properties are manna from heaven and can mean the difference between making a project work or not doing it at all. It is a critical tool for investing in properties that might not otherwise be restored or reinvented for other uses. Communities across the country have embraced historic designation as an important economic development plan. In Montgomery County, we need to do a better job of educating people not to be afraid of historic designation. We should embrace these districts as part of a successful “green” strategy for upgrading our neighborhoods and creating jobs and services.
Remember, the greenest building is the one that already exists.
