In previous posts, I’ve discussed the economic challenges facing Montgomery County: stagnant wage growth, an aging workforce and increasing poverty. I’ve also highlighted our assets, including high incomes, low unemployment and a highly educated workforce. I’ve pointed out that high housing costs are the result of limited supply and that both businesses and residents of all ages prefer neighborhoods that look and feel “urban,” even if they aren’t located near transit or in major city centers. I hope that I have been successful in showing how and why real estate development is essential to economic development. In particular, the supply of housing (at every price point and including both subsidized/regulated projects and market-rate units) is crucial to attracting and retaining the mix of workers … Continue reading
Investing in more transit and walkable, amenity-rich neighborhoods will attract more residents and employers to Montgomery County
Both businesses and residents in Montgomery County increasingly show a preference for walkable, compact neighborhoods with a mix of uses. This kind of development is commonly described as “urban” in form, but its underlying design principles can be applied at lower densities and at smaller scale in suburban settings.
In Montgomery County, we have been encouraging this kind of development near existing Metro stations and our future Purple Line light rail stations. But we’ve also scaled down and used the same concepts – walkability, diversity of uses and compact design – where redevelopment offers an opportunity to add badly-needed housing and new … Continue reading
In the previous post I made the case that we need private infrastructure in the form of housing and office buildings for the same reasons we need public infrastructure such as roads, transit, schools, and water and sewer pipes. In particular, if we don’t have enough housing, workers will continue bidding up the cost of existing residences until only the very affluent will be able to afford decent housing in convenient locations. Lower-income residents will either be priced out entirely or face crowded, substandard housing conditions in remote locations with long and difficult commutes.
It may be possible to limit population growth by throttling the construction of new housing through regulation and higher fees on development (I’ll have more … Continue reading
I often hear people say things like:
“Real estate development just makes developers rich – it doesn’t do anything to help our economy,” or
“I understand why we need to bring more employers to Montgomery County, but building more housing just adds to the overcrowding of our schools – we should be pushing for more office projects,” or
“I’m not against growth but we shouldn’t allow more development until we have the infrastructure to support it.”
If you’ve read the previous posts in this series, you have some idea why I think these statements reflect mistaken premises about the relationship between real estate development and Montgomery County’s ability to attract high-quality jobs and the workers to fill them. The … Continue reading
In the previous two posts, I argued that we have a serious shortfall in the supply of new housing at every price level and that this drives up housing costs. Now I’ll take a look at retail and office space to try to offer some perspective on what’s going on in the market for commercial real estate and what it says about consumer preferences, our economic well-being, and what we can do to adapt to attract and retain employers and their employees in the future.
Our Retail and Office Markets
Even as many other parts of the country – and the DC region – are dealing with a glut of retail space, Montgomery County’s retail supply is, overall, strong … Continue reading
As I explained in my last post, Montgomery County’s continued population growth (even if this growth is slow in relative terms) coupled with constrained wages and housing supply, means that housing affordability becomes a bigger problem. This chart show the proportion of renters and homeowners with a mortgage who pay at least 35 percent of their income on housing costs:
The lack of affordable housing hurts the poor more than anyone else, but our high housing costs also hurt middle and even upper income residents. As for the impact on economic development and jobs, we risk driving away highly-skilled workers who have choices about where to live and work. Eventually, if we begin … Continue reading
In earlier posts, I outlined where Montgomery County stands in terms of jobs and wages, discussed the related issue of income inequality and pointed out that the older segment of our population is going to grow disproportionately to other age groups over the next two decades.
Now let’s assess the past and future rate of population growth, job openings and housing construction, and the relationship of these factors to lagging wage growth in contributing to one of most significant economic challenges: a shortage of affordable housing.
Population and job growth
Before we can evaluate how much new housing and office space is needed in the future, we first have to understand how many people (and jobs) we might reasonably … Continue reading
In the last post I explained why I think Montgomery County is in pretty good shape (at least for the moment) on the economic measures that matter most – jobs and wages. But serious challenges to our ability to maintain and improve our quality of life are already apparent and I’m concerned about our future competitiveness.
Jobs and income: the bad news
In real, inflation-adjusted terms, median incomes in Montgomery County have not recovered to the levels reached before the recession that began in 2008. For that matter, real median incomes are down or flat in every DC-area jurisdiction except for the District and Loudon County. This chart shows the weakness of the recovery in incomes:
The debate over the future of Montgomery County – what kind of place we are, what kind of place we want to be and how we can pay to maintain our quality of life –has taken on a healthy sense of urgency during this election season. But I’m not sure that the public debate over these issues has provided a clear picture of our economic strengths and weaknesses, and – more importantly – where we need to focus our efforts to bolster our economic competitiveness.
Now that the primaries are over and dust is in the process of settling, I want to provide an assessment of our economic health and prospects. I hope to show that while we … Continue reading