yglesias on monday's post: "very good"/happy hour recap

I was pleasantly surprised by the positive response to Monday's post analyzing rental housing trends in and around downtown Silver Spring. There were lively comment threads both here and on GGW and was picked up by UrbanTurf and Patch.

The post was also tweeted and retweeted many times on Twitter and even got a mention of sorts from Matt Yglesias of Slate magazine. After some gentle prodding by Silver Spring resident/Towson University economics professor Seth Gitter, the well-known writer had this to say:

@justupthepike @sethgitter I don’t have a ton to say. Very good post.
— Matt Yglesias (@mattyglesias) January 29, 2013

As someone who doesn't have a background in economics, I'm honored to hear that from a writer whose work and opinions I deeply respect. (It would've been nice if he included a link to the post, but why nitpick?) Update: He did! Hopefully my next attempt to analyze local housing trends will be as well received.

ALSO: Friend of JUTP/fellow Bengal alum Aaron Kraut of Bethesda Now came to our happy hour sponsored by Friends of White Flint and the Coalition for Smarter Growth last night and offered this great recap.

Councilmembers Hans Riemer and Roger Berliner were in attendance and had great things to say about the future of both White Flint and Montgomery County as a whole:

“I really think that we are on the verge of a golden age in Montgomery County and it’s projects like this that are bringing that life,” Riemer told the gathering. “The region that we are in is a dynamic, growing, exciting region, one of the best destinations in the whole world, economically, culturally, socially. But we have to and we are positioning ourselves in that region to capture that future growth" . . .

[Berliner said] the county is depending on the change of thinking signaled by what’s going on in White Flint.

“I want you to know when I first used [the word hip] in talking about Montgomery County, people said, ‘I’m sorry, that’s not part of our lexicon,’” Berliner said. “I do want you to know that Montgomery County’s future in my judgement does in large part depend on being able to attract this kind of crowd, a young, energetic crowd.”

can silver spring build enough housing to stay affordable?

Old and new apartments in South Silver Spring, shown in 2009. All images by the author.

Economists say one of the best ways to provide more affordable housing is through filtering, a theory that as expensive new homes age and decline in value, they'll become low-cost homes tomorrow. But this requires building enough housing to keep up with demand. Is that possible?

600 new apartments and condominiums were built in downtown Silver Spring last year, while another 1,300 apartments are under construction as we speak. Almost all of them are high-end, luxury rentals.

While there are more affordable alternatives to be found, the area as a whole has become more expensive in the past ten years. Persistently low vacancy rates suggest there's a lot of demand for housing as well, further pushing up rents.

I looked at 32 market-rate (as opposed to entirely subsidized) apartment complexes within a mile of the Silver Spring Metro station, which includes downtown Silver Spring, South Silver Spring and East Silver Spring. I found their advertised monthly rents and unit sizes on the landlords' websites and sites like apartments.com, apartmentguide.com and rent.com, and used everything from Historic Silver Spring to aerial photos from the 1950's to find out when each building was built.

Click image to see a larger version.

Rents varied dramatically across the 32 complexes, and as predicted, age appeared to be a factor. Apartments at the Solaire on Ripley Street, which opened last year, rent for an average of $2.87 per square foot, more than twice the $1.36 rent per square foot at Hillbrook Towers on Thayer Avenue, built in 1961. Typical 2-bedroom units at both buildings rent for $3,023 and $1,250 a month, respectively.

It's said your annual income should be 40 times the monthly rent for an apartment to be truly affordable. Thus, you'd have to make $120,000 a year to live at the Solaire, or $50,000 to live at Hillbrook Towers.

Click image to see a larger version.

Next, I plotted each building's age and its average rent per square foot and found a trendline. As it turned out, each year since a building was built takes off about 1.19 cents in monthly rent per square foot, or $11.90 for a 1,000-square-foot 2-bedroom apartment. That may not seem like much, but over time, it adds up to a $595 difference between a unit built this year and one built in the 1960's.

According to the 2007-2011 American Community Survey, 25% of the apartments in and around downtown Silver Spring were built during the 1960's, and another 33% before that. This period was the first big apartment boom in Silver Spring, with even more units constructed than during the 2000's. Shouldn't this mean that there are lots of cheap apartments like at Hillbrook Towers? Not quite.

Click image to see a larger version.

Low vacancy rates in and around downtown suggests that the market is absorbing any new apartments that get built. According to the 2000 Census, just 2.5% of the then-8200 apartments in the area were vacant. In 2009, that rate had doubled as several new buildings opened. By 2011, with 9100 apartments in the area, the vacancy rate fell back to 3.35%. In Census Tract 7025, which contains several recently-built apartment buildings in downtown and South Silver Spring, just 1.67% of all apartments were vacant in 2011.

For filtering to work, there have to be enough new apartments to soak up the demand for new housing. Without it, landlords will upgrade their older buildings to draw those potential tenants.

That's what happened at the Blairs, the massive 1960's-era apartment complex across from the Silver Spring Metro station, whose owners recently completed a major LEED-certified renovation. While it's made the complex more environmentally sustainable, it's also resulted in higher rents. A renovated 2-bedroom apartment was recently advertised on their website with rent of $3060 a month, comparable to new construction.

A combination of new, high-end buildings and old buildings that are essentially being made new means that rents overall continue to rise. In fact, rents in and around downtown Silver Spring have increased by 75% since 2000, 3 times faster than inflation.

Click image to see a larger version.

In 2000, the median rent for all apartments in the area was $808 a month, which would be $1042 today. In 2011, it was $1410 a month, which suggests that apartments like the one at Hillbrook Towers are the exception, not the rule.

It's true that downtown Silver Spring has grown a lot in recent years, so much so that some residents say they've had enough. But the area isn't even growing as fast as did a half-century ago, and even after a global economic recession, the demand to live here remains strong.

Silver Spring prides itself on its diversity, but that's threatened by rising rents. Filtering isn't the only tool we have to protect affordable housing, but it's one we should take advantage of.

see the future of suburbia at white flint happy hour

White Flint today. Photo by the author.

As many of you know, I'm working part-time for the Friends of White Flint who with the Coalition for Smarter Growth is hosting a happy hour on how to "make the suburbs hip." While that might conjure images of trying to jury-rig H Street on Rockville Pike, the transformation of suburban communities like White Flint or Silver Spring goes much further than that. The redevelopment of strip malls and parking lots into real urban places has real social, economic and environmental benefits.

In a recent article in Foreign Policy magazine, Patrick Doherty argues that the United States must reorient itself and its built environment to meet the challenges of the 21st century and remain prosperous. This starts in places like White Flint.

Today's White Flint was built around the social, economic and environmental conditions of the 20th century, among them a homogeneous society, cheap land and cheap energy. Tomorrow's White Flint will need to accommodate very different circumstances: an increasingly diverse population, land constraints, climate change, and an eventual shift away from fossil fuels.

If done well, the future White Flint will encourage a greater sense of community through a strong public realm where people can gather, hang out and even protest. It will help meet the demand for housing, particularly the desire for smaller living spaces and urban amenities, while providing a base of customers and employees for local businesses. And it will allow us to accommodate a growing population while using less energy, fewer materials, and conserving precious agricultural and undisturbed land.

The challenges are great, but the potential is enormous. I look forward to seeing White Flint become not only a "hip" place to live, but an example for how the rest of the nation can improve their communities and prepare for the future.

I hope you'll come out to our happy hour next Tuesday, January 29 at 5:30pm at Seasons 52, located at 11414 Rockville Pike, a short walk from the White Flint Metro station. Montgomery County Councilmembers Hans Riemer and Roger Berliner will be on hand to talk about the transformation of White Flint and it means for our community. You can click here to RSVP.

This content was developed for the Friends of White Flint.

inauguration 2013: jammies edition

Waiting to get home after Inauguration 2009: Not doing that again.

If you're reading this, it means that like me, you have chosen to spend this Inauguration Day inside, near the heat and the television. And while the Post found folks from East County who chose to go downtown anyway, they found others to show that you and I are not alone in celebrating the democratic process in our jammies.

(Or, not celebrating. My almost-fourteen-year-old brother left the TV room in a huff, grumbling, "It's a black guy. I don't care. I don't have to care for four more years." Are kids really that nonchalant about having transcended the barrier of race? Is this a good thing?)

I'd briefly entertained the idea of going this year, but then I remembered the last one: the cold, the crowds, getting cussed out for asking two drunk men to quiet down so I could hear the president talk, and the five-hour trip home, which involved walking twenty-three blocks out of the way to find an open Metro station and then waiting out the cold and the long line in a Safeway in Southwest while people looted.

After all of that, I concluded that we can only elect the first black president once, and even though they're expecting a third as many people as in 2009, I decided that I could wait for the election of the first female president, or the first Hispanic president, or the first of anything else, before willingly enduring that again.