Sunday, August 10, 2008


Upstairs at Bethesda Row a
Monument to Greed

Affordable Housing Continues to be
Joke of a Lifetime in Montgomery

Greed, thy name is Upstairs at Bethesda Row. This urban monstrosity has laboriously taken shape across the street from the Arlington Road Giant. Now here come the import luxury sedans and Priuses of the landed class and the nouveau riche. In a county where the developers' new apartments and condos often have 7 or 9 tenants, Upstairs is 60% full by comparison.

Of course, that means it is 40% vacant. But that is impressive for 2008 in Montgomery County. What is the secret? How can buildings renting in Rockville's Town Center for $1600 be less full than Upstairs with 1 bedrooms starting at $2100+ a month? Could it be that there is a special target audience out there, and, "if you build it, they will come?" Did somebody say Collection at Chevy Chase? It wasn't me! But, what if, in the midst of human suffering and a housing crisis, a government would tune out the average citizen and actively approve buildings designed for a wealthy audience only?

How many MPDUs are in this building? There is no green space on this site, either. Therefore, our County Executive and Council have been caught red-handed, violating everything they have promised to do on affordable housing and "green" buildings.

The sad story of affordable housing in Montgomery County is quite old by now. You know that back in 2006, I was offering actual solutions while our elected officials were touting "Apartment Buildings for Homeless People." That phrase became an instant classic, by the way. Is that the most ironic statement you've ever heard? It actually is a fairly honest statement by our Democratic elected officials, because - as I said at the time - they consider homelessness to be an incurable disease.

What is a "homeless person?" Why would you call someone homeless after they have a place to live (Apartments Buildings for Homeless People)? Well, you would say that if you believed that they are permanently going to have no income or future prospects. Hence, they will be a permanent political constituency for those elected officials, surviving on government handouts indefinitely.

Now they have a new phrase to cover this strategy, but to try to make it sound better: "Housing First." This is the idea that you want to get a homeless person into a home immediately, rather than a shelter. Of course, that is everyone's goal. But that shouldn't be a long-term plan. First you need to analyze the situation of each individual. Is this a person who requires mental health treatment or treatment for addiction to alcohol or drugs? Then let's get them connected to those resources. Is this a person who simply needs a living wage to get going again? That can be done as well. But let's get it done, because just as some have said a human being cannot be "illegal," so it can be said that no human being should have to be "homeless."

Beyond that, we have a huge majority of working people in Montgomery County who aren't getting handouts and services. And they certainly aren't getting to move into Upstairs at Bethesda Row. Why should college graduates have to move elsewhere? Why should a person have to work two jobs to afford a clean, livable apartment in Montgomery County? It's immoral, it's a disgrace, and something must be done about it. There is no reason on God's green Earth that a studio apartment should rent for more than $900 a month. No one is asking for free housing. But, come on, this is ridiculous. The more units that come on the market, the more the rent goes up. Clearly, we have a situation where market forces have failed. Bigtime. What happened to the American Dream? Study hard, go to college, work, and society will provide you with a minimum of a living wage, housing, food, clothing, etc., in exchange, right? Not anymore.

Our elected officials have done nothing, and have allowed their developer friends to break all promises to provide MPDUs. Dr. Yes (Royce Hanson) has approved numerous new "boutique" condo buildings for the rich in downtown Bethesda, with MPDUs in single digits or even zero. That is a disgrace. And the Arlington Road corridor is becoming a Hall of Shame for affordable housing failure, with condos and apartments designed exclusively for the wealthy, and with full support from our elected officials.

It's outrageous.


Zinzindor said...

So you resent that houses are being built (which is not a problem, as you suggest, but actually part of the solution). And you resent the discovery that "society" doesn't "provide you with a minimum of a living wage, housing, food, clothing, etc."

Aside from the rant:

(1) What do you think the problem is?

(2) What do you think the state (or county) should do about it?

Robert Dyer said...

Thank you for the comments. First, I would like to clarify that my post was specifically in regards to apartment rent, and the emphasis on luxury buildings.

More specifically, I was also criticizing the Arlington Road corridor. A number of moderate-priced projects were scuttled there and are being replaced by boutique buildings.

It's just happened again in Silver Spring.

So I do not "resent that houses are being built." In fact, when I ran in 2006, I called for more houses to be built. What we don't need are more overpriced condos and luxury apartments. They either stand empty (White Flint Metro/Toys R Us area - currently about 9 residents live there; Rockville Town Square - currently 7 tenants) or in the case of Upstairs, are fairly successful because they cater to a super-rich clientele.

It is simply perverse to have homeless veterans standing on a street median begging beneath a tower filled with vacant luxury apartments.

Owners need to fill their buildings. There is something strange going on here.

And yes - the point of any social contract which creates a society is that you give something to get something. But when you give and give and give, and receive nothing in return, then the contract is broken.

So to answer your questions,

1. What do I think the problem is?

A: We have a number of problems. Building residential skyscrapers with affordable (not free, not cheap, but fair, market-price) apartments would indeed drive down rents by increasing supply.

What is happening now is a collusion amongst owners, where they are charging the same inflated prices - price fixing. There are no "deals." There are no "competitors" offering a lower price. These are the hallmarks of competition and the free market. We don't have those; hence, the market has broken down.

I believe the free market is as close to a perfect system as we have. But, like my fellow Republican Theodore Roosevelt, I believe that when the market breaks down, when monopolies and trusts emerge and destroy free enterprise, it is the job of government to step in.

There is also the interesting question of how these buildings can be profitable when they are 60% vacant. It is just bad for the economy, and immoral when many need housing here in Montgomery County (and I'm talking about middle-class, employed college graduates as much as the homeless and poor here) to have these buildings standing vacant.

If the buildings are vacant, that means they are not meeting the "market price." In a free market system, the building owner should have to lower the rent or purchase price to what the market will pay. Strangely, owners don't seem to have to do that here, and yet are able to stay in business. Theoretically, that is impossible. So... what's going on here? Why don't they have to meet the market price to profit?

Government needs to investigate and address this problem, and restore the free market for housing.

2. What should the state (or county) do about it?

Among other things, stop allowing Dr. Yes to approve boutique condo buildings for the rich. We need residential skyscrapers near Metro stops that are market-priced. Again, a studio shouldn't rent for more than $900 a month unless it is pure luxury.

We also need to build more housing. Some of these should be smaller in scale so that young people and senior citizens can afford to live in Montgomery County. Not every home must be a McMansion. It is possible to have upscale features and attractive design on a smaller scale.

I want to emphasize again that I am not calling for free homes. People who work hard, and earn extra degrees, or work multiple jobs, etc. deserve to live in a nice neighborhood. I'm not saying anyone is "owed" a mansion. But everyone has a right to housing. And everyone should have an option for housing that is within their budget. If you graduate from college, you certainly have every right and expectation to be able to live in Montgomery County, and not in squalor or ruin.

Finally, in addition to stepping in to stop current practices described above, government can take the step of making rent tax deductible. And to lower property taxes, which are currently at insidious and immoral highs.

Zinzindor said...

Robert, it makes no sense to claim to be in favor of a "free market", but only if that market provides the type of goods that *you* think it should provide at the price *you* think it should provide them.

It makes no sense to claim to be in favor of a free market, but believe that government should stop people from building the homes that you don't like.

I believe in a right to life and liberty. That means I believe that government should stop anyone who tries to deprive me of life or liberty.

You believe in a right to housing. What does that mean government should do? Provide everyone with a house?

Incidentally, the housing market is the same as any other: Suppliers (builders) try to get as much return as they can for their product. They don't build luxury housing (which is expensive to build) unless they believe there is a demand for it, and they can make a good return on it.

Compare, for example, the market for cars. No one complains that only luxury cars are being built; there are many models available for under $15,000. Car makers know there is a demand for that kind of car, and they build them.

Why are there insufficient units available for lower-cost housing? The cause is largely attributable to a variety of zoning restrictions and regulations imposed by the county and by the state. These restrictions raise the cost of building housing. Therefore:

First, there are insufficient units available in MoCo *overall*. There is an overall shortage in supply of housing, which by itself tends to drive prices up. Using the heavy hand of government to prohibit construction of higher-priced housing will only exacerbate that shortage and *will only drive the costs higher*.

Second, because building is so expensive, it is difficult for a builder to make a profit on lower-cost housing. Therefore, they tend to focus on the upper end of the market, which still demands housing.

What government should be doing, then, is not prohibiting higher cost housing, but removing the zoning restrictions and other regulations that drive up the cost of housing.

Now there's a reasonable housing platform for you.

There are two problems w