{"id":444,"date":"2019-08-13T18:20:15","date_gmt":"2019-08-13T18:20:15","guid":{"rendered":"http:\/\/www.dcfeedback.com\/archives\/?p=444"},"modified":"2019-08-13T19:24:24","modified_gmt":"2019-08-13T19:24:24","slug":"aristotle-theresa-evolution-of-dc-housing-market","status":"publish","type":"post","link":"http:\/\/www.dcfeedback.com\/archives\/444\/","title":{"rendered":"Aristotle Theresa: Evolution of DC Housing Market"},"content":{"rendered":"

Below, is a Facebook post from the lawyer, Aristotle Theresa, who has helped communities push back against developments in their neighborhood. He is also currently suing the city for their implementation of their housing policy claiming it was discriminatory in intent and impact. You can read more about that here <www.washingtonpost.com\/local\/dc-politics\/lawsuit-dc-policies-to-attract-affluent-millennials-discriminated-against-blacks\/2018\/05\/24\/3549f7fe-5a1e-11e8-858f-12becb4d6067_story.html?utm_term=.87954e…<\/a>> ..
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\nLink: https:\/\/www.facebook.com\/aristotle.theresa\/posts\/10155913739103479
\n Evolution of DC’s housing market
\n City needs affordable housing. City has a bright idea to create it by introducing inclusionary zoning. Under inclusionary zoning the developer requests extra density of market rate luxury units to pay for the affordable units. Extra density of market rate luxury units raises land, home, and rent values. This is because land zoned for the most uses and intensity of use is the most valuable land because more can be done with the land. Combine amenities and it drives land value, home value, and rents even higher.
\n Now developers need TIFs or borrowed government money on top of the extra allowed for density in order to make the project financing work due to increased land values from the upzoning and increased projected rents and cost of build out from the promulgation of luxury amenities. With its willingness to subsidize further luxury development, the city government has stepped into the market to back risk the private market will not. At this point, supply and demand is not driving the market more than the city’s appetite for investment risk. As you see, the market has already told developers land and projected rents are too high for their projects to work.
\n In order for the city to make good on their investment risk land values need to go even higher so they may collect increased property taxes or else there will be no return on their investment and likely a loss. To square the city needs more density, more luxury amenities, and more people capable of paying and less people incapable of paying and receiving other kinds of government subsidy. Since housing affordability is based on area median income as the region attracts the people capable of paying the increased rents and home prices even the affordable housing becomes more unaffordable.
\n To make matters worse, since the city has exempted many developments from paying property taxes the new residents utilize city resources without paying for them. The people actually paying property taxes find their taxes are being spread thin. Including in education, metro, health services, and emergency response. Especially in underserved areas. Inequality grows under this development paradigm.
\n People complain about the cost of housing and displacement. Developers complain about the difficulty of obtaining financing. And the city shoulders more and more risk, essentially printing money by way of zoning increases, build out of amenities, and borrowed money, driving land, home, and rent prices even higher.Add in race, perceptions about how race impacts land and rent value, and a deregulated project approval environment and these mechanisms accelerate.
\n The government gave 300 million for the Wharf and affordable there is considered 80% AMI or about 85k a year. It is my opinion the rents and home prices there are so unaffordable and vacancy rates or the amount of absentee investors is so high that in order to sustain the ground floor retail they needed a concert hall and hotels. I look for this model to be replicated as rents and home values become more out of sorts with local occupancy. You also see this at Reunion Square to a lesser degree with a hotel, playhouse, and office space to support the proposed retail.
\n That withstanding, the market sends signals not all is well. The neighborhoods with the most new development show the highest rent increases year over year. For instance, Navy Yard delivered the most new units and has the highest vacancy rates and has the highest rent increases. Yet neighborhoods like Capitol Hill have less new units and lower vacancy rates and have more stable rents. In a healthy market Navy Yard would have seen a reduction in their rents, due to over supply, when compared to Capitol Hill with lower vacancy rates. The government subsidies and unchecked zoning entitlements are setting the floor for high rents.
\n As far as home values we see home prices continue to increase even as home buying and the amount of homes sold drops off. In a healthy market, home prices would begin to decrease.
\n The city’s solution thus far is to throw more density, luxury amenities, zoning entitlements, and borrowed government money at it then to rinse and repeat. We have seen this before. It is a pyramid scheme.
\n The way the market is behaving is off and it seems like most decision makers are ignoring it choosing to focus on affordable housing talking points instead. The entire system is out of wack. To sustain, actual capital needs to be redirected to the people who have been locked out of this paradigm. It is the only way to get out of the death spiral of higher and higher prices. Trickle down economics has been fully milked. Now is the time for direct injection of capital into small business and local people and products. It is a time to sew and to stop reaping.
\n In the meantime, these are considered DC’s boom years. Its on borrowed money and borrowed time if we don’t get it right.<\/p>\n","protected":false},"excerpt":{"rendered":"

Below, is a Facebook post from the lawyer, Aristotle Theresa, who has helped communities push back against developments in their neighborhood. He is also currently suing the city for their implementation of their housing policy claiming it was discriminatory in intent and impact. You can read more about that here .. ——– Link: https:\/\/www.facebook.com\/aristotle.theresa\/posts\/10155913739103479 Evolution […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-444","post","type-post","status-publish","format-standard","hentry","category-housingarchive"],"_links":{"self":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/comments?post=444"}],"version-history":[{"count":0,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/444\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/media?parent=444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/categories?post=444"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/tags?post=444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}