"Promoting housing affordability by combating exclusionary housing policies"

 

CFC # 41863 (Combined Federal Campaign) 

Updated George Mason University report finds housing planning and production insufficient in Washington metropolitan area

 

The George Mason University Center for Regional Analysis (“GMU”)—whose research on housing needs is relied on by local jurisdictions throughout the Washington metropolitan area—updated its 2011 housing report in December 2013. (GMU, Housing the Region’s Future Workforce, 2012-2032 (December 2013) (“2013 Report”), posted at http://cra.gmu.edu/pdfs/studies_reports_presentations/Housing_the_Regions_Future_Workforce_2012.pdf.) The new report essentially reaffirms GMU’s previous conclusions that:

  1. Local jurisdictions are planning for an insufficient amount of housing to accommodate future workers.
  2. More housing is needed closer to jobs, in existing and growing regional employment centers.
  3. There is a need for more multi-family housing and smaller, more affordable owner and renter homes in the region. 
  4. A lack of a sufficient supply of housing contributes to worsening traffic and quality of life and threatens our region’s economic vitality.

(GMU, Housing the Region’s Future Workforce, p. 4 (October 25, 2011) (2011 Report”), posted at http://cra.gmu.edu/pdfs/Housing_the_Regions_Workforce_Oct_2011.pdf.) The new report states emphatically: “Allowing land use and zoning changes that permit the construction of more housing near jobs, which will require less commuting, is a critical implication of these housing demand forecasts.” (2013 Report, p. 23, emphasis added) It notes: “Other parts of the country have achieved a better balance between their housing supply and economic growth.” (Id.)

For example, the Houston metro area passed the Washington area in 2012 in metropolitan Gross Domestic Product (GDP), to become the nation’s 4th largest metro. (U.S. Bureau of Economic Analysis (BEA), Gross Domestic Product (GDP) by Metropolitan Area, Sept. 2013) And Dallas (6th largest metro in GDP) was gaining rapidly on the Washington area, according to BEA. Both Houston and Dallas have substantially more affordable housing than the Washington area (Houston has no zoning).[1]

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 [1] See, e.g., Edward L. Glaeser and Joseph Gyourko, The Impact of Building Restrictions on Housing Affordability, p. 30, Table 4 (FRBNY Economic Policy Review, June 2003) (“Glaeser and Gyourko 2003”), posted at: http://www.ny.frb.org/research/epr/03v09n2/0306glae.pdf (average (“mean”) house price in Houston in 1999, for an lower-quality, one-story house meeting building code requirements,, with no basement, was $108,463—lowest among the 26 major cities studied, except for the slower-growing cities of Tampa and Pittsburgh; by contrast, average house prices in other, representative metros in same year for comparable houses were: Atlanta, $150,027; Baltimore, $152,813; Boston, $250,897, Chicago, $184,249; Minneapolis, $149,267; Los Angeles, $254,221; and San Francisco, $461,209. For the Dallas metro, the comparable figure was $117,805—well below the other thriving metros except for Houston.)

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GMU’s updated report projects a need for 27,415 housing units per year, on average, to accommodate the net number of net “new workers” during that period—without increasing the amount of workers who must commute from one jurisdiction to another for work. (2013 Report, p. 1). “New workers” are those who will fill new jobs—those not previously created. (2011 Report, p. 1)

If “new workers” were the only group needing new housing units in the years ahead, the Washington area might be able to meet their needs, based on its long-term trend of housing production. However, GMU’s forecasts “do not include the housing that will be demanded by the replacement workers in the region over the next 20 years, which is estimated to be 40 percent more than the number of net new workers.” (2013 Report, p. 22 (emphasis added))[2]

Among the workers who will be replaced are a huge number of Baby Boomers (persons born between 1946 and 1964) who likely will retire by 2032. As of 2010, there were about 823,000 households in the region that included a Baby Boomer householder. (David Versel, Aging Boomers could have huge impact on suburbs, Greater Greater Washington (Aug. 28, 2013) It is likely that:

  1. The vast majority of Boomers will retire by 2032, when the youngest of them will reach age 68. (Full retirement age for persons born in 1960 or later is 67, under current Social Security rules. For those born before 1960, that age is earlier); and
  2. At least 50% of female Boomers (and 37% of male Boomers) will still be living in 2032—when the oldest Boomers reach age 86. (Those figures are the current life expectancies for the oldest Boomers (born in 1946), per the Social Security Administration’s Life Expectancy Table 2010. Persons born in 1946 reached age 64 in 2010.)

According to GMU:

Between 50 and 60 percent of retirees stay in the region in which they were working; while they may move to a different type of house within the region, they will not make a housing unit available to the workers who move to the region to fill their jobs.

(2013 Report, pp. 22-23) Thus, if only 50 percent of retired Boomers stay in the region, upwards of 200,000 housing units still will be needed (including retirement, nursing home, and accessory housing units) to accommodate all of them. That means that an equivalent number of new

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[2] The report’s initial summary erroneously states that the 27,415 annual figure (548,298 new housing units over 20 years) would accommodate all the region’s “future workers” to 2032. But the rest of the report makes clear that those figures only apply to new workers—not replacement workers in existing jobs. 

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housing units will be needed for replacement workers—or more than 10,000 units annually. Adding that figure to the “new worker” figure (27,415 units annually) yields a total much higher than the region historically has produced. And that total does not count others who need or will need housing in the region:

  1. current workers who must commute in from outside the metropolitan area now for lack of suitable, affordable housing;
  2. students, volunteer interns, and other non-working households; and
  3. the additional “vacant housing units to allow for current and future households to move as their needs change.”

(Id., pp. 7, 23) So, the Washington area will have to dramatically increase its housing production to accommodate its current and future population. Of course, not everyone wants to live near their job, and some households have workers in different jurisdictions, so that not all can live in the same jurisdiction where they work.

However, as mentioned: “Allowing land use and zoning changes that permit the construction of more housing near jobs, which will require less commuting, is a critical implication of these housing demand forecasts.” (2013 Report, p. 23, emphasis added) Doing so is necessary to help reverse the region’s excessive traffic congestion, road building and maintenance, motor fuel consumption, air pollution, and other environmental degradation from sprawling development into rural areas.

Doing so also would permit less hyper-inflation and instability in the housing market, less poverty and homelessness, and increased economic development in the region (because workers who cannot afford to live in the region spend much of their money outside the region). And in the long run, predominantly commercial areas often lose much of their commercial base, as businesses move closer to where the workforce can afford to live. Housing is the key constraint on the Washington area’s growth potential.