Posts tagged ‘commercial residential zone’
In recent weeks, I have fielded several inquiries about how to expand our relatively new Commercial Residential (CR) zoning to some of the commercial areas of Montgomery County. Landowners, it seems, are eager to have a chance to redevelop commercial areas in a more community-oriented, practical, profitable and energy-efficient way.
We need to make infill work for us if Montgomery County is going to accommodate all of the people who want to live here. That includes our kids and grandchildren who grew up here and hope to stay as well as seniors looking for compact, accessible environments.
Yet, current zoning rules do not help what we see as the next phase of land use changes. Montgomery County has aged past the era of large, single-family subdivisions – the simple fact is that we lack the land and our single-family housing market represents 97 percent of our residential land area. We need to evolve and that means concentrating our growth in commercial areas, many of which could look so much better. It’s no surprise that our commercial areas largely reflect the 1950s style of retailing in the suburbs. Fine then, not so great now.
How does zoning make good growth happen? One would think the numerous commercial zones we have would mean an abundance of opportunities to create development that meets the needs of residents. Not exactly. Montgomery County has a lot of land with antiquated zoning that may encourage developers to underuse land and choose uses that do not reflect the type of projects the county needs.
In fact, much of our commercial zoning only allows for single use zoning. Moreover, some of those 121 zones are way out of date. Where we want a mix of uses near metro stops, where we know people want to live, several of our commercial zones do not permit it. And we end up with low level strip malls with oceans of parking, an unattractive pedestrian environment and not a soul in sight after 5 p.m.
The zoning creates challenges for planners responding to applications in areas where we hope for walkable, mixed use neighborhoods. If mixed uses are not permitted, then single purpose applications are going to be submitted, and prime real estate for creating great places will be lost for the life of the lease of the new retail space.
The north block of the Falklands will soon be subject to an application for staged, mixed-use development as illustrated in these renderings prepared by Shalom Baranes Associates, architects for Home Properties. This application will set the bar for future mixed use development in the County. It blends residential and commercial uses and a higher range of affordable housing with market rent housing. The architecture, blend of uses and comprehensive site planning, represent how our “smart growth” areas should evolve .
This is very important in today’s real estate market. Property owners look for tenants. New projects that are more complex, like mixed-use buildings, create financing challenges and risk. Complicated zoning rules create more barriers.
Take the H-M zoneas an example of an obscure zone creating headaches for property owners. The zone permits hotel and motel uses. Only. There are not too many places with this designation and this is a good thing. Does anyone still build motels in infill sites?
One of these sites is in Pook’s Hill, near the Bethesda Marriot. Six acres zoned H- M. Is another hotel needed there? What about a residential project with ground-level retail instead? Would residential uses to meet the growing demand for a range of housing types in the county, particularly rental apartments or condos with a range of unit sizes be a more practical, desirable use?
Our zoning includes rules that create issues for neighborhoods adjacent to commercial areas. In some commercial zones, parking for the commercial use can be provided on a lot in the adjacent residential area. This commercial encroachment is allowed, but, understandably, residents are not pleased.
In the past, this permission has been considered as a way to create a buffer. But that is being questioned today. Does allowing commercial parking in a residential area protect the neighborhood?
The CR zone has a great many protections for existing residential neighborhoods. One of the details in the CR zone is its approach to parking. It does not allow parking off site. To further protect the neighborhoods, the CR zone imposes a new standard: a greater setback for buildings that includes an angular plane to provide added protection for adjacent residential areas. Site plan review, which is a public process requiring a Planning Board hearing, is required in this new zone for most projects.
Perhaps the best evidence of weak commercial zoning appears along our commercial corridors. Does our commercial development set us apart from any other place? If we stand on any arterial road here, does it look any different from any similar place around the country? This “before” video of White Flint shows an area that is already changing as a result of our new CR zoning.
The county is considering a rapid vehicle transit strategy that would see enhanced buses traveling on arterials and serving nodes and corridors throughout the county. Many people see an opportunity for existing commercial land at major intersections that may be served by the new lines as prime sites for neighborhood-scale mixed use.
Not all transit stations are equal in terms of what type and scale of uses are appropriate. However, it is sound planning to ensure our commercial areas have zoning that can be a base for well-functioning, attractive, environmentally sound growth that meets the needs of a growing population.
We also need to consider our office parks, which require everyone to drive. The office parks typically are located on acres of grass managed with chemical fertilizers and/or pesticides. Is there an opportunity to create a zone category that transforms these single purpose uses and instead encourages housing next to the office building? This could reduce driving, provide additional housing, offer affordable housing and reduce monthly costs for people choosing to live near where they work.
The department will release the commercial part of the zoning rewrite effort at the end of November. (The residential zones draft has been available for some time.) We hope to generate discussion of the draft that addresses such questions as:
1. Should we expect more amenities from our commercial areas?
2. How can we provide for greater public participation in how the commercial areas evolve?
3. Should there still be single use commercial zones, or is it time to think differently?
4. What is the best way to introduce revised commercial zones?
We are working to create a commercial zoning approach that brings more integration between different uses and provides for the creation of walkable streets with new amenities for new and existing residents. This approach can help build commercial areas that are more active, pedestrian friendly, and provide a lifestyle that many seniors and the young graduates and families we need for the future, may choose to live in.
This is something every community asks itself. The value of a new building or business varies from one place to another. We’ve spent a lot of time over the past few months discussing new mixed-use zoning – commercial residential zoning, or CR – with the County Council. A big question was whether we are receiving enough public amenities from new development.
Most new growth will be on the small amount land zoned for commercial and mixed use where we have already built. Most of those areas are zoned commercial, and in the typical commercial zones (C-1 and C-2), new development does not go through a public review. So right off the top there is no public amenity.
Rezoning these areas to our new CR zoning is a big shift that will bring amenities, and an added cost to development.
However, most of our strip malls have paying tenants generating revenue. In today’s marketplace, a paying tenant is a valuable thing. Asking a landlord to cancel a lease, or in the case of a development on Rockville Pike, relocate an entire business, is a very expensive hit to the balance sheet. The current conservative lending strategies of our financial institutions are not helping either. Many strip mall owners already have paid for their properties and carry little to no debt, so there is little incentive to redevelop.
While it is popular in real estate to say “location, location, location,” a more descriptive term would be “location, density, return.” In other places, planners have secured big public benefits by increasing the floor area and height in appropriate areas, which raised property values. In Toronto, we would calculate the value of the additional floor area granted above the zoning limits, and request 50 percent of that to come back to the city in various forms – land for public housing, construction of public housing, nonprofit day care facilities, and funds for social services.
The density limit in big cities, like Chicago, is way higher than in Montgomery County. Big cities can be as dense as 20 times the area of the lot, while White Flint is four times the area. Going less than four generally does not create too much in the way of value, as the buildings tend to be smaller and the developer does not have as much floor area over which to defray the costs of the amenities requested.
Clearly, the bigger the density, the more economical it becomes to secure additional public amenities.
This is important when considering Tysons Corner in Fairfax County, Va. The densities there peak at six times the lot area (FAR). This is 50 percent more than in White Flint, a considerable difference.
In the White Flint area, we are asking builders to in effect, “buy back” some of their permitted floor area buy purchasing the rights to building lots that have been created in the Ag Reserve but not yet built on (referred to as a “building lot termination” or BLT). While the cost of each lot has not yet been set by the County Executive, it could run as high as $225,000 per BLT. Tysons Corner does not require such an exaction. And while some folks complain that, in White Flint, we are not building more affordable housing above the minimum 12.5% requirement (in a 100-unit building, 13 units must be moderately priced dwelling units, or MPDUs), let’s consider the additional cost of the BLTs.
So the required amenity package in White Flint strikes a balance between policies that reflect needs in this county: affordable housing and farmland preservation. While some neighboring counties have affordable housing laws, ours tends to be more expensive. And no other regional county requires the purchase of lots for agricultural preservation.
The new mixed-use zone has been criticized for not achieving extra MPDUs like we now achieve in the existing Central Business District (CBD) zones. We looked at projects from 2006 to 2008, perhaps the biggest boom in recent memory, and of the 21 projects in CBD areas, seven of them provided extra MPDU units totaling under 20 extra units. The BLT payment is not required in the CBD zone, meaning builders there are not required to make that estimated cost of $150,000 to $180,000 per BLT requirement. So comparing the CBD zoning to the CR zoning is not an apples-to-apples comparison.
In one of the projects submitted in White Flint, at the price for one BLT noted above, the developer would be required to pay about $1.7 million. Assuming an MPDU cost between $150,000 to $180,000 per unit, that same $1.7 million could have provided for 10 to 12 MPDUs in addition to the 12.5% already being provided. Clearly, this would result in a lot more MPDUs than we are getting in the CBD zones or any other zone where MPDUs are required.
That said, within one year of the CR mixed-use zoning going into place in White Flint, there are plans submitted for 341 MPDUs, which equals about 27 percent of the total 1,200 MPDUs expected in the area when it is built out around 20 plus years from now. That is a substantial number of new affordable units that would not have existed if the area had not been rezoned. It is important to remember that little changed in White Flint during the boom years of the mid 2000s.
The new CR zone allows for mixing the densities allocated to commercial or residential units. Simply put, as new master plans are prepared, the CR zone can establish lower limits for the commercial component while permitting higher amounts of residential density. This allows master plans to encourage more housing in some areas. So right off the top, the new CR zone can get us more housing and that means more units that are priced within reach of more people.
There are other reasons why comparing the public benefits package in White Flint to the affordable housing requirement in Tysons Corner is not appropriate. In White Flint, not only is the zoning in place, but so are the staging requirements. (Staging requirements cap new development at specific stages where the provision of infrastructure, like roads or road improvements, is required.) Tysons has none of these things.
White Flint also has a financing plan. Property owners are taxing themselves to pay for transportation infrastructure improvements. At Tysons, Fairfax County pays a significant percent of the same costs. This should be factored into the cost of development. We are taxing the property owners up front, and that should be factored into the amenities we are getting. The transportation improvements serve everyone, including the existing communities.
So what about the other amenities we have set out in the new CR mixed-use zone? The list covers a lot of things that will help create better buildings and spaces. For example, one would be hard pressed to say we are ranked high in the interest factor of our building stock. There just is not that much to put in an architecture magazine.
The new site plan application for the block north of the new high rise building on the Pike will add some exciting new architecture to the area. Coupled with that is a very well-designed mid-block pedestrian connection network leading to common areas with interesting design features that will have small retail bays to provide an inviting experience. The front of the building facing Rockville Pike will animate a space that is now dead and will create the pedestrian environment needed to bring people out onto the sidewalk.
All of the above are encouraged by the CR zoning. Some cost more than others, but together they result in what should be an exciting, inviting and active street frontage that so many people enjoy in other places like Silver Spring, Wheaton, and Bethesda. Do these features represent less cost to the developer than adding more MPDUs? Perhaps, but not always. It is important to remember that this new application will have the 12.5 percent MPDU requirement and the residents of those units deserve an exciting and well-designed pedestrian environment.
Not much happened in White Flint for decades. The great news is that the property owners seem to be making up for that inactivity now. And as the area develops, as the pedestrian amenities evolve into a network of active public spaces that begin to create a neighborhood, the increased land values will free up capacity for even more affordable housing.