Friday, November 30, 2012

Yet Another Height Act Article


Washington's Height of Buildings Act has been a subject of debate for years now, but lately, with the Act under Congressional scrutiny, the discussion has taken on more than academic significance.  I'm wary of touching the subject at all, since it seems to have become more ideologically polarized than almost any other planning-related topic, generating ample heat but less light (one recent article refers to economists responding to its mere mention with "paroxysms of outrage").  Points of view ostensibly grounded in economics and statistics are supported with flip references to generalized principles, comparative urban study is given short shrift where it is not ignored entirely, and each side accuses the other of using economics as thin cover for aesthetic preferences, whether it be the free marketeer's skyscraper envy or the traditionalist's veneration of the mid-rise city.

A thoughtful article by David Alpert in Greater Greater Washington has triggered a vigorous debate, with Kaid Benfield mustering all available arguments in the Act's defense, and Alex Block and George Mason law professor David Schleicher on hand with rebuttals. Graciously citing an earlier post of mine, transportation planner Dan Malouff has issued a rebuttal to the rebuttals, taking a much-needed big picture look both chronologically and geographically, and touting the benefits of the Act for good urbanism. 

Without venturing into the aesthetic and form-based arguments, which have been covered exhaustively elsewhere, the hard numbers and economic arguments that have been submitted in opposition to the Act are relatively scarce.  I'll attempt to address a couple of them.

This recurrent complaint of high office rents raised by the free market side has made its most recent appearance in Schleicher's article, where he mentions that "[o]ffice space in downtown D.C. is more expensive than in New York's financial district, and 850 square-foot apartments in Anacostia, one of the cheapest areas in the city, now rent for $1300 a month" (yet citing to an article which states that in 2010, DC office rents were higher – barely – than those of New York City, not the financial district).  In response I would note:
  • The number appears to be cherry-picked. The same article cited by Schleicher indicates that rents had been much higher in New York during the preceding five years, and a more recent study of Class A office space in the DC and NY metropolitan markets shows DC rents at only 78% of the level of New York.  The 2010 market figure, taken near the bottom of the real estate market, does not appear to be representative of long-term averages, nor is it entirely clear what the geographic unit for comparison was (comparing DC proper to NYC would tend to inflate DC rents relative to NY rents, for instance, as DC is a much smaller fraction of its greater metro area).
  • Taking into account median incomes, both DC's office rents and residential rents seem cheap compared to NYC, with office rents the cheaper of the two. In recent years, the DC metro area has had the highest median household and individual income in the country, considerably higher than New York.  Based on this figure, we should expect to see very high housing costs (and probably also office rents) in the DC region, as income and housing costs are highly correlated throughout the United States, and DC moreover has other unique office demand factors related to the presence of the federal government. Washington does in fact have the second-highest MSA housing costs east of California, yet these are still cheaper than New York's, with the result that DC is in housing-to-income terms far more "affordable" than New York.  And yet office rents appear to be cheaper still: DC's housing cost averages 89% of that in New York, while its office rents, averaged over the past several years, seem to be in the range of 70-80% of New York's.  This is the opposite of what one would expect based on the views of the Height Act opponents, whose argument supposes that the Act primarily impedes construction of high-rise office space in the central business district.

Apart from a citation to a number from an Ed Glaeser study, which was partly debunked as regards its application to the Height Act in another Atlantic Cities article, there are no other figures presented in Schleicher's article.  Schleicher does cite, as is common in this debate, to general supply and demand principles, but Malouff counters him, noting that:


"There is currently around 100 million square feet of office space in downtown DC, which makes it the 3rd largest downtown in America after New York and Chicago. Despite no skyscrapers, downtown DC currently has a greater supply of office space than downtown San Francisco, Boston, Philadelphia, or Los Angeles."

So, broadly speaking, we do have a result that complies with supply and demand principles: DC has a larger supply of office space than comparable cities, and has office rents relatively lower than we would expect based on median incomes and other comparative measures.

I would add that, according to a 2006 Demographia survey, Washington's CBD is consistently found to be larger and denser than those of its peers.  For instance, DC's CBD is 1.5 times larger and has 1.7 times the employment density of Houston's. Similarly, it is both 1.3 times larger and denser than Philadelphia's CBD.  In both cases, it achieves this despite having less buildable area to work with, due to DC's exceptionally wide streets and generous allotment of parks.  It is also much more centralized, containing 18.7% percent of metro employment compared to Houston's 8.9%.  Given all this, can we at least allow for the possibility that the Height Act has actually stimulated, rather than impeded, growth and intensification of the downtown business district?  This would of course have implications for the usefulness of height limits to other cities and in other contexts, but it's a topic that deserves greater study.

Whatever the true answer might be in this case, more empirical evidence would be helpful in figuring out  answers to the economic questions at issue here.  Throwing around terms like supply and demand, however, without bothering to investigate what the “supply” is the in the first place, does not greatly contribute to the discussion.  One hopes that the forthcoming Congressional study is up to that task, but with the little evidence-gathering that has been done so far seeming to have been in the service of pre-determined conclusions, I am keeping my expectations low.

8 comments:

  1. Thank you for the thoughtful discussion on the issue; I too was disappointed by how quickly the various factions retreated into abstract, simplistic ideology when discussing the height limit.

    I think an earlier post of yours on New York - "Can Loosening Development Restrictions Restore Affordability?" - could just as easily apply to DC. The impediments to a rapid and sustained increase in commercial/residential space in a built-up area - basically the inherently slow process of urban infill and densification - just as easily apply to DC as they would to any other city.

    I'm willing to bet that, save for one or two sunbelt cities with ample vacant land, most cities, *even those without height limits,* would be just as hard-pressed to increase supply in the face of a sudden increase in demand. (Let's remember that the sudden, almost exponential increase in commercial and residential demand in DC pretty much happened in less than a decade and is not something that could be accommodated quickly even under the most favorable development circumstances.)

    So I find it somewhat hard to believe that a century-old height act is dominantly responsible for the relatively-recent phenomenon of lack of affordability, though, like all regulations, I will concede that it must have *some* affect on the market.

    As you said, the side effects of the height limit are abstract and hard to quantify, and the limit may actually have beneficial externalities. I too wonder whether the limit is responsible for the disincentive to waste land for surface parking lots and other low-grade uses in DC's center. And as you said, there is a remarkable density there that exceeds that of many other CBDs (too often urban-oriented economists conflate "density" with sheer building height) that is worth investigating further.

    I suspect that the zoning and densification restrictions in DC's majority rowhouse and SFDH districts are far more responsible for the affordability problem than the height limit. But in this regard I would sympathize with the skyscraper promoters, because they understand that spreading the demand out by extending midrise urbanism further across the city a la Paris (as the height limit supporters have suggested) is politically impossible. (People just lack the confidence that the new development would be as good as the old stuff, which is why I think we quite understandably have so much historic preservation in our cities.) So if the lowrise surrounding residential neighborhoods can't be densified, and the core is built out and up to the height limit (not *quite* true yet; even many metro stations could still use more TOD infill), then where could further development go? If that is the case, I'd agree that the only way is up.

    A question that I have never seen a satisfactory answer to: Often it is alleged that highrise edge cities like Tyson's Corner or Arlington are a result of the height limit pushing development outwards, but is this actually verifiable? (Many US cities with highrise CBDs with room for infill, especially development-friendly sunbelt cities, still have similar highrise satellite cities.) Have the firms settling in Virginia specifically cited height limits or outrageous office rents as reasons for moving, or do they move to take advantage of other things: lighter Virginia business regs and taxes that have nothing to do with height limits or rent, better access to suburban military or federal office installations (federally-instigated beltway sprawl), and so on? People also sometimes point to London's Docklands or Paris' La Defense as similar symptoms of high rents caused by height limits. But is this actually true? You could argue that their highrise edge cities are more the products of vanity, speculation, and starchitectural ambition than they are products of rational economics, especially if their rents are just as high as those in midrise Paris or London...

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    1. Hi Marc -- thanks for the thoughtful comments. I'll try to address a couple points here, and then come back later to discuss others:

      "I suspect that the zoning and densification restrictions in DC's majority rowhouse and SFDH districts are far more responsible for the affordability problem than the height limit. But in this regard I would sympathize with the skyscraper promoters, because they understand that spreading the demand out by extending midrise urbanism further across the city a la Paris (as the height limit supporters have suggested) is politically impossible."

      For residential affordability, absolutely (office rents and residential rents are frequently conflated in this debate also, I should point out, and by people who should know better). The problem is that the area currently affected by the Act itself (rather than city zoning regulations that set still lower limits) is only about five percent of the District proper, and less than one hundredth of one percent of the greater metro area. Even if residential space could outbid office in parts of this small area, the amount of population growth that it could accommodate would be insignificant on a citywide scale. Alex Block cites a commenter who points to the example of Vancouver, which allowed its downtown to build up, but that city remains one of the most expensive in North America, and although the CBD has densified somewhat, the great majority of growth continues to occur on the fringes. And once the downtown is fairly built out, what then? The problem has only been postponed.

      The political impossibility that you mention is really the challenge of our time, as far as cities go. Schleicher, in the article I discuss, links to a paper of his discussing land use policy reform to potentially make upzoning politically easier. It's an issue that both sides of this particular debate can broadly agree on, and should I think really be the focus of attention rather than the Height Act.

      "Often it is alleged that highrise edge cities like Tyson's Corner or Arlington are a result of the height limit pushing development outwards, but is this actually verifiable?"

      I think the CBD centralization figures put the lie to this assertion. DC's business district appears to be contain one of the highest proportions of metro area employment of any American city, and that is excluding parts of Arlington that are essentially contiguous extensions of the CBD rather than "edge cities" (for instance, Rosslyn, which is closer to the CBD than most neighborhoods in DC itself). The emergence of Tysons Corner makes sense when you examine its placement in relation to the region, in which various subsidiary business centers emerged in the vicinity of the Beltway, almost as though they are in orbit around the city. This is I think a normal process for any large and rapidly growing city like DC, and isn't related to the Height Act. Still, I wouldn't necessarily say that the Act has contributed to job centralization, either -- this may be related to other factors such as the types of employment predominant in the city as well as the unique amenities to be found in Washington's CBD.

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    2. "And once the downtown is fairly built out, what then? The problem has only been postponed."

      Good points. If, as you say, the area under the height limit only composes ~5% of the city proper and if, under the best circumstances, all restrictions to the rapid development of highrises disappeared and this area turned into a pinprick Manhattan, where would the city go from there? Would the mushrooming of this tiny area really make much of a dent on prices and sprawl? As you say, the problem is only postponed.

      I agree that the upzoning challenge in the remaining 95% of the city (and the upzoning challenge in all expensive North American cities per se, as you described so well with the Vancouver situation) is the real elephant in the room, and because we instinctively realize the immense difficulty of addressing this issue, perhaps we default to easier, lesser, simpler targets like the height act.

      Removing or relaxing a height limit sounds so simple and easy compared to upzoning, even if the overall boost to development under the former in DC would really be quite meager when compared to the development opportunities under the latter. But addressing the latter drags in so many other complex issues that are difficult to address let alone comprehend - the general fear of "density" in outer SFDH or rowhouse neighborhoods that have been comfortably static for generations (as seen in the tremendous opposition from DC's SFDH neighborhoods to the recent zoning reform proposals, even to things as modest as garage/granny flats), a lack of confidence in our doing quality urbanism and architecture (hence historic preservation), and so on.

      I realize I'm just idly "admiring the problem" here, because I really don't know how upzoning could go forward. So far one of the few urbanists I've heard address this issue was Andres Duany in his "On the Edge" lecture at Simon Fraser University in Vancouver, and even then he did so only in the context of creating 'new towns' composed of transects that would automatically upzone after certain periods of time. There wasn't any discussion on how to introduce the upzoning concept to old neighborhoods that have internalized stasis for generations. As you said, this is the real "challenge of our time," and IMO the height limit debate is mostly a distraction and sideshow, but an understandable and unsurprising one given that we can't make much headway on densifying cities in a format other than the creation of the odd "demand safety valve" highrise cluster.

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    3. I guess I'm going to have to check out that paper of Schleicher's to see what his suggestions on making upzoning palatable are. Do you know of other figures or papers that attempt to address the upzoning issue? So far I only seem to run across abstract, vague solutions in blogs ("abolish zoning" which sounds nice in theory but would take a miracle to push through) and precious few detailed proposals that seem implementable.

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    4. I took a glance at the abstract of Schleicher's paper, but I think it is behind a paywall. Chris Bradford ran a couple posts about it, though, earlier this year:

      http://www.austincontrarian.com/austincontrarian/2012/02/unplanned-cities-paper.html
      http://www.austincontrarian.com/austincontrarian/2012/03/more-from-david-schleicher.html

      Here's another with thoughts about putting an expiration date on zoning to circumvent the typical concerns with frustrated expectations:

      http://www.austincontrarian.com/austincontrarian/2012/03/give-zoning-an-expiration-date.html

      Bernard Siegan's "Land Use Without Zoning" is probably still the most thorough work on the subject, but he too concludes with a call to abolish zoning, rather than reform it.

      Personally, I like Nashville's approach -- "un-zone" downtown first (by substituting a "general urban" zone that permits nearly all uses, in conjunction with a form-based code applying frontage/streetwall/height requirements) and gradually extend that area outwards over time. A war of attrition against Euclidean zoning may be the only viable strategy.

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  2. ...(Continued) I also wonder if adopting the "highrise CBD surrounded by rowhouse or SFDH neighborhoods" model that most other US cities have would sacrifice DC's potential for adopting European multi-nodal urbanism, especially its potential for reducing the crushing unidirectional transit loads that make American transit systems so difficult to pay for, operate, and maintain. I know there was some interesting discussion on this phenomenon on the Old Urbanist in the past (I think wrt to Vancouver?), and interestingly enough, Jarrett Walker also wondered about this phenomenon in a recent podcast. It'd be a shame if DC didn't explore the potential for distributing activity across wider swathes of midrise urbanism to reduce distorted transit loads and general traffic flows, to avoid the creation of an office-dominated CBD that would be vacant after 5pm, and to avoid the various other downsides of "maximum" or "pinpoint" agglomeration (as Dan Malouff described so well in the most recent GGW debate). But as the height limit opponents discuss, the potential for densifying DC's outlying rowhouse neighborhoods is so slim as to fall into the realm of idle intellectual debate: it just can't happen anytime soon. The residents in the affected areas wouldn't stand for it.

    Finally, of all the shaky assertions in this debate, I wish one particularly-fatuous and ludicrous one would just go away: The claim that the height limit is responsible for DC's mediocre postwar (and continuing into the present) infill architecture. Height limits have NO affect on architectural quality: as Haussmann showed us, you can still get wonderful architecture under a height limit. And the highrise stuff in Arlington and in pretty much every other American CBD is just as dismal and dreary as DC's midrise infill, if not even more so thanks to the building heights (what's worse: 7 stories of mediocrity and blank wall, or 25?). So can the height limit opponents at least abandon that absurd assertion?

    If DC *has to* and *does* lift the height limit in full or in certain districts, I beg the city to at least ensure that all highrises are built in a traditional ziggurat format: out to the sidewalk with retail liners, stepping back vertically to preserve light if necessary, no useless "open spaces," and no broken, blank street walls. Under no circumstances should a Tyson's-style highrise urbanism of isolated towers in the park be adopted (speaking of which, DC itself has not a few of these kinds of developments from the 50s-70s that, instead of being placed on the historic preservation rolls by Brutalist apologists, could be infilled or replaced instead). DC needs to be careful, because many "cutting edge" architects still default to the old tower in the park format (which ultimately offers no true increase in “density” whatsoever), as Dubai and Shanghai show us.

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    1. "I also wonder if adopting the "highrise CBD surrounded by rowhouse or SFDH neighborhoods" model that most other US cities have would sacrifice DC's potential for adopting European multi-nodal urbanism, especially its potential for reducing the crushing unidirectional transit loads that make American transit systems so difficult to pay for, operate, and maintain."

      Well, I wonder to what extent 1) the Height Act, by encouraging a wider spread of the CBD, made the decision to build Metro economically and politically easier, and 2) resulted in a relatively multi-nodal network (still overwhelmingly commuter-oriented, but there are at least three and arguably five major nodes -- compare that to Dallas' rail network, for instance). Clearly the failure to construct any but a fraction of the planned freeway network also had tremendous benefits, not only in terms of ridership for the Metro and in reducing demand for parking, but in avoiding the consequent destruction of property values seen in so many other cities. I suspect that if the planned ring around the CBD (http://en.wikipedia.org/wiki/Inner_Loop_%28Washington,_D.C.%29) had been built there might have been much greater pressure to eliminate the Act back in the 70s, as the possibilities for horizontal expansion would have been curtailed.

      As for the architectural argument, I happen to think what it really boils down to is an aesthetic preference for very tall buildings, period, irrespective of aesthetic merit and without regard to good urbanism. Since that can't be stated directly, though, the argument does indeed come off as "ludicrous." The cheap shot at DC's 50s-70s era architecture (as though buildings from that era were any better in other cities!), is just as ridiculous as those people who blame Houston's sprawl on lack of zoning. It also conveniently overlooks the point that DC received a remarkably large amount of new construction during this period relative to other cities (this is why it is so noticeable), without having to ponder why, unlike other cities, there was so much building activity. FWIW, I happen to think that the postmodernist boom in the late 80s through early 2000s produced a lot of very satisfying architecture in the district -- well above par in any event -- but I acknowledge my view appears to be in the minority.

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