41°Clear

Op-Ed: County’s Doomed High-Density Residential Development Strategy

by RestonNow.com July 31, 2017 at 1:30 pm 32 Comments

This is an op/ed submitted by Terry Maynard, co-chair of the Reston 20/20 committee. It does not reflect the opinions of Reston Now.

Fairfax County’s development strategy of pursuing high-density residential development around Metro stations and other commercial centers (e.g. — Seven Corners, Lake Anne Village Center) will fail in its fundamental goal of generating large new tax revenues. This is due to the demonstrated fact that the cost of community services for residential services substantially exceeds the revenue it generates.

The need for massive new County tax revenues is driven primarily by the deteriorating fiduciary position of its four pension funds (civilian, police, uniformed, and education). At the beginning of the century, all four funds were essentially fully funded (97 percent to 102 percent), but they have deteriorated almost continuously since then. The FY2016 County annual financial report shows a $4.7 billion funding shortfall despite the quadrupling of County (and additional employee) contributions since 2000. That represents about a one-quarter shortfall in required funding across the four funds. This growing shortfall is why Moody’s issued a warning on the County’s AAA bond rating several years ago and the County made a commitment then to reach 90 percent funding by 2025. One obvious approach to addressing such a shortfall is to dramatically increase development that creates new taxable value. From Reston’s perspective, this has taken the form of two County zoning initiatives linked to the revised Reston Master Plan:

  • The passage last year of an amendment to the PDC/PRM (Planned Development Commercial/Planned Residential Mixed-Use) zoning ordinances to increase the allowable density from FAR 3.5 to FAR 5.0. From a Reston perspective, this primarily affects the Herndon-Monroe and Wiehle station areas as well as the southern half of Reston Town Center. The zoning ordinance also covers Commercial Revitalization Areas (CRAs), including Lake Anne Village Center. The two ordinances focus on commercial and residential mixed-use development respectively, and the residential-focused PRM would allow up to as many as 200 dwelling units per acre (DU/AC) at FAR 5.0. No place in the Washington metropolitan area has that much density.  
  • The recently proposed amendment to the Reston PRC (Planned Residential Community) which would increase the community-wide population density from 13 to 16 people per acre, about 21,000 people. More importantly, it places no limits (except Board discretion) on the number of DU/AC in “high density” development areas. This includes the Town Center north of the toll road and Ridge Heights to the south. Making the matter worse, the Reston plan was amended behind closed doors (not by the Reston planning task force) to eliminate any limits on high density multi-family development. Currently, the limit is 50 DU/AC.  

Aside from the many reasons Restonians do not want the intensity of residential development allowed in Reston, there is one vital reason for the County not to want to pursue this ultra high-density residential development strategy: The cost of community services (COCS) for residential development — especially high-density development — exceeds the tax revenues it generates. Residents require schools, streets and other transportation, parks and recreation, libraries, and much more. This is especially important in the ongoing dialogue about increasing residential density in Reston’s PRC zoned area.  

Research on this issue by the US Government, private sector, and academia is extensive and it virtually all comes to this same conclusion. All these studies highlight the importance of methodology, assumptions, other values than tax revenue in development decisions, etc., but none we have discovered suggest that residential development will ever generate a net gain in tax revenues for the County.   

Probably the benchmark study on COCS is an overview by the Farmland Information Center (FIC) of the American Farmland Trust in a public private partnership with the US Department of Agriculture last September. The overview records the results of analysis of the COCS by type of development in more than 150 communities, counties, etc., across dozens of states over more than two decades. The results of FIC’s studies show that, on average, for every dollar in tax revenues generated by tax revenues, the median residential development is a cost $1.16 in community services, a 16 percent loss. By contrast, commercial and industrial development costs $.30 in community services for every $1 generated in tax revenues, a better than three-fold tax revenue return for the County.

A second, academic “meta-analysis” of more than 100 communities across the country came to the same conclusion, but with slightly different results. It put the mean cost of residential services at $1.18 per dollar of tax revenue, and Commercial/Industrial and Agriculture/Open Space were also slightly less advantageous at $.44 and $.50 per dollar of tax revenue than in the FIC overview.

An additional important finding of this study is that the addition of 10,000 residents increases the residential ratio by one percent, that is, from $1.18/dollar to $1.192 per dollar. An implication of that finding is that the addition of 80,000 new residents to Reston’s station areas as planned would increase the $1.18-to-$1.00 ratio to $1.274 in community service costs for each dollar of tax revenue. Based on this study’s data, that expansion — when completed — would cost the County $50 million more per year in community services for Reston’s station areas than it would receive in tax revenues in 2017 dollars at current tax rates.  

This is not the answer the County is looking for if it is trying to solve a growing long-term debt obligation problem. Its alternative options are limited, however, and would cause further deterioration of Restonians’ quality of life:

  • The County could offset the losses generated by the residential development by equally massive — and tax revenue positive — commercial development. The key problem with this approach is that there is little demand for new office space in Fairfax County now as growth stagnates and office space per worker shrinks. In fact, as of last December, County data shows that the office space vacancy rate was 16.8 percent, nearly 20 million square feet of vacant space county-wide. Net office space absorption last year — new leases less new vacancies — was less than 250,000 square feet of office space out of 116 million total square feet of office space. On the other hand, the more loss-generating residential development that occurs now, the less the opportunity for tax revenue-positive future office and other commercial development.
  • The County could demand substantially greater proffers from developers seeking high density development. Frankly, the County has never been very good at obtaining fair value from developers as they apply for new development, including improvements in transportation, education, parks and recreation. Moreover, with the moneyed motivation of developer interests in Richmond generating legal constraints on County proffer efforts, the County’s ability to elicit proffers is increasingly limited.
  • The County could massively cut Reston’s community services and those of other County residents. This is basically what is happening in Reston, especially in the station areas, and it is leading to a major loss in the community’s quality of life. The County’s Reston plan calls for one elementary school when the planned population growth requires two elementary and one-each middle and high school. The County is not even trying to live up to its own urban parks or recreational facilities policies. And the County has lowered the acceptable standard for traffic congestion in urban areas — and still added a property tax on station area homeowners to pay for the improvements.

Yet, even if the County pursues all these avenues in one way or another as it likely will, it is not clear that it could reduce the cost of Reston’s community services below the tax revenues it generates. The more it uses these tax tools, especially dense office development and reduced community services, to offset the tax revenue losses from residential development, the more Reston will fail as a planned community focused on a high quality of life. Reston’s deterioration as a planned community, both within and beyond the station areas, may well cause residential property values — and tax revenues — to stagnate, if not decline, putting the County in an even deeper financial hole because of its massive additions of high-density residential housing.  

Given the County’s current intent on pursuing much greater residential density in Reston’s station areas and beyond by amending the Reston PRC (and having already amended the PDC/PRM zoning ordinances), Restonians should make every effort at every level to prevent the County from destroying the planned community that is Reston. If nothing else, Restonians ought to highlight to the County that increasing Reston’s urban density by increasing the allowable DU/AC in the Reston PRC does not serve the County’s interests even if it serves developers.

Terry Maynard, Co-Chair

Reston 20/20 Committee

  • Cubsfan6116

    “Residents require schools, streets and other transportation, parks and recreation, libraries, and much more. This is especially important in the ongoing dialogue about increasing residential density in Reston’s PRC zoned area.”

    Except that in high-density, small unit developments, there are far fewer school children per DU, and this decrease of family size generally means fewer auto trips, and less demand for parks, libraries, and other community amenities.

    “The County could offset the losses generated by the residential development by equally massive — and tax revenue positive — commercial development. The key problem with this approach is that there is little demand for new office space in Fairfax County now as growth stagnates and office space per worker shrinks.”

    Break this down into Class A Office, Class B Office, Class C Office, and it’s location relative to Metro and you will see that stat is inaccurate as you’ve applied it. There is very little Class A Office and only moderate vacancy for Class B Office. Further, the vast majority of vacant office is far from Metro in very suburban environments. This is therefore not applicable to the Silver Line corridor.

    “The County could demand substantially greater proffers from developers seeking high density development.”

    Absolutely! As they should. The legislation (I believe) has a caveat that continues to allow traditional proffers near Metro Stations. The County should push for improvements like additional DTR crossings, more bike trails and sidewalks, more schools, and better bus shelters.

    While I’m not so keen on high density south of Sunrise Valley or north of Sunset Hills east of Old Reston Avenue, the plan did call for big office developments and density along the DTR. To say that building mixed-use there destroys the spirit of the plan just doesn’t pass the face test.

    • Terry Maynard

      Thanks for your feedback, Cubsfan (of which I am one too, but I’ll root for the Nats here), but let me respond to several of your comments.

      Re fewer school children per DU, we couldn’t agree more. FCPS puts the number of kids at about 1 per 11 DUs in high-rise multi-family housing. That’s about 3,500 school-aged kids with 40K DUs. So, instead of the one ES the County plan calls for Reston, we should be getting 2 ESs and 1 each middle and high school by current FCPS guidelines. Yes, we did the math.

      And please note, the Reston library is a REGIONAL one, one that covers the entire Hunter Mill District, not just the urbanizing area. People will have to drive to get there, too, especially since FC specifically plans NOT to increase public transit in the Reston TSAs (or wider). (We believe this transit plan is terribly ill-informed.)

      Also, the County has very concrete policies on acreage and recreation facilities for urban areas, and the Reston plan doesn’t remotely achieve the goals set forth in those policies. Concretely, 80K people in an urban area deserve should have 120 acres of parks within easy walking distance, and that doesn’t even count the added acreage for employees in the area. Two 7-acre “town greens” are all that our plan specifies. Obviously, neither this park space nor plan language meets the urban recreational field guidelines (about 3 dozen) and the plan has only a vague commitment to 3 playing fields in included in the plan.

      Re “community amenities,” that’s pretty vague, but Reston–as a planned community–has very demanding calls in its planning principles for quality amenities. The County plan doesn’t come close.

      On the issue of office space, it isn’t a matter of where it is or what class it is. If a space is filled in Reston’s station areas, it most likely will be vacated somewhere else in the County. (Worst case, as we have experienced, companies in trophy “A” space in Reston (eg–Accenture) move to other counties.) The result will be diminished tax value and ultimately destruction of the vacated office space.

      And I’m glad you didn’t challenge the issue of the size of office worker space. It has shrunk dramatically. We pointed this out to Chairman Bulova, the Board of Supervisors, and the Planning Commission several years ago and only recently has the planning staff begun to study its assumption of 300 GSF/office employee at a time when it is less than 200 GSF/office employee.

      Need it be said that the Reston plan does not represent the will of Restonians or even of the task force that generated a report for the County. AFTER it went to the County and before it was approved by the Board (and amended on several occasions), developers turned it into what they wanted it to be. And that is the problem we’re dealing with.

      Finally, not one of your comments challenges the central point of this op-ed: new residential development will result in a net loss of tax revenues for Fairfax County. Sort of like pouring gasoline on a fire to put it out.

      But that’s Fairfax County!

      Thank you for your comments and the opportunity to respond.

    • TheKingJAK

      More bike trails? I’ve never seen a community with as many trails as Reston.

  • Bob

    So Terry, what’s your solution? How does Fairfax grow it’s tax base without letting anyone new ever live here?

    If Fairfax County used your logic that every additional dollar of residential tax revenue creates $1.16 in cost, then technically no where in the U.S. should ever develop and grow. In theory, we should just go back in time and stop Reston from ever happening. Imagine if the landowners back in the 1960’s had said that building Reston would be bad for taxes, so let’s not build it. If they had done that, you wouldn’t be living in Reston today!

    Your attitude is so closed minded. The Reston 20/20 Committee seems to be mainly a group of old cranks that have nothing bettter to do than complain about everything. The quality of life in Reston is fine. Sure, it’s not the way Reston was in the 1970’s or 1980’s, but time moves on. Things are always changing. If Reston does nothing to grow, it will decay like many other stagnant areas of our region.

    • Donald

      Bob, well said, I agree. I’ve been reading Mr. Maynard’s point papers for some time now (and that of his affiliate, Reston Citizens Association). He and his group go to great lengths stating in writing what is wrong with our community, yet I have yet to read about any bona fide solutions. Maybe some day.

      Donald

      • John

        Donald, you and Bob may not like or agree with everything that Terry says, and if you ask him for solutions (his answer is pretty clear), that’s fine. But what are YOUR answers or suggestions, if you want to go with the FC development/density flow? Do you agree entirely with that concept?

        John

      • Mike M

        The point is fundamental and valid. The notion that we need to keep developing to catch up with our spending is fallacious on two counts:
        1) Recent history shows that it never works. Taxes climb as development increases. Show me the exceptions.
        2) Can you possibly wrap your brain around the notion that we need to stop the growth in spending and pare down the “requirement.” THAT is the solution. We are acting like a heroin addict trying to sell our blood so we can afford another hit.

        Simple: question: Are you guy financially poised to benefit from the development? I am betting on it.

        • RVA_101

          RestonNow: where pro-development advocates/YIMBYs are called shills/developers/beneficiaries from development

          • Guest

            Are you saying Mr. Emke is REJECTING pro-development op-eds or letters? I don’t think so.

          • Reston Now

            If we receive one, we’ll be happy to run it.

        • Donald

          Mike M, the only financial benefit I have in this game is my home value. The first home I purchased in Reston cost $60,000, in 1978. Reston’s appeal and unique quality has generated significant equity and spun that investment into my retirement nest egg.

          I love living in Reston. My wife loved living in Reston. I love walking it’s paths with my dog. I love going to Lake Anne, to Red’s at South Lakes. I love it’s pools and natural areas. I love the fact we may get a Wegmans and a Total Wine. I believe the small RA assessment I pay every year is worth every penny. I believe Reston will continue to get better and better.

          Will Reston look and behave differently in the future? Yes. Did it in the 80’s? Yes. Did it in the 90’s? Yes. Did I it over the last 17 years? Yes.

          I believe development and growth in the corridor is appropriate. I believe redevelopment in the PRC needs to be scrutinized heavily, but, it needs to happen to allow Reston to remain vibrant.

          Diatribes like Mr. Maynard’s 1500 word essay will have little to zero impact with the county and the developers. The best course of action is to take one of the well organized grass roots efforts like the St. John’s Wood, rally the Community, align with RA (they have legal representation and resources) and look at each proposed project in the PRC. Then strike a powerful conversation with the County and the developer for each of these projects and attempt to make it a win-win.

          Show the County and the developers, the Community is damned serious, by showing up unified. Leverage RA, work with them, they can be the best resource the community has.

          Donald

          • guest

            Donald, If you were to engage with any one of the groups you mentioned and you would learn they are communicating and working together on this matter just as you suggest.

          • Donald

            Yes I know. I have attended many. They need to unify. They need to identify and empower specific affected parties, and leverage the biggest affected party — RA.

          • Mike M

            Donald, the Reston your wife loved is being steamrolled. I am grateful for John’s voice. Your property value may not be any more valuable than if you bought anywhere else in the county. It may perform as an asset more poorly going forward as the schools and roads get overstuffed.

        • Bob

          I can easily show you an exception…it’s just down the road in DC. The tax burden in DC isn’t growing despite substantial population growth. DC is fighting over what to do with their budget surpluses!! I don’t expect Fairfax to work just like DC, but I can guarantee you that holding the population stagnant while costs rise is not a recipe for success either.

          Fairfax will have to do more to control costs while at the same time growing the population. The county can do both! At the same time, some additional revenue streams would be helpful. The meal tax would have helped. All of our surrounding jurisdictions have it, but Fairfax had to be a special snowflake and reject it.

          Of course, the Reston Association could also do more to improve life in Reston instead of blowing it on garbage like the Lake House.

          I’m not poised to benefit financially from the development. I already own my home in Reston and I’m not in the real estate business. However, I recognize that staying stagnant will not work. Reston will be a more desirable place (with more amenities) if it is growing. Would we rather Reston/Fairfax be a stagnant or shrinking area like Detroit and much of the Rust Belt?

          • Mike M

            Please move there. But I don’t believe you have the whole story. And you are not about to move there.

      • Terry Maynard

        Just for the record (and to protect RCA), Reston 20/20 is no longer affiliated with RCA.

        Re solutions, check out the Reston 20/20 blog. Specifically on this issue, see https://www.scribd.com/document/44904406/Reston-Town-Center-Alternative-Vision-Presentation-Reston-2020-Committee

      • The Constitutionalist

        I say we increase density and start with SJW.

        • Donald

          It’s already happening. The affected parties, RA and the DRB need to continue to work with the developer and the County to make it the best it can be. Otherwise…

    • Terry Maynard

      “So Terry, what’s your solution? How does Fairfax grow it’s tax base without letting anyone new ever live here?”

      The answer is mixed-use development around the Metro stations with a better balance of residential and office (which will mean delayed residential until office can catch up) at a much more moderate level (about half what the two Reston ZOs would allow). This would ease all the problems stemming from extremely high-density residential development–less congestion, less demand for schools, etc.

      It’s just not that difficult if you look at the issue in a rational, unbiased manner and do a little research. Unfortunately, the County sees only more as better without regard to its impact, even on itself.

      • Bob

        But that strategy isn’t going to work because no one wants the office space. There’s no demand for office space in Fairfax (as a whole) and this problem will only get worse going forward (more cuts to government office space are coming). Plus, many of the retail establishments are going to fail as more retail moves online. So relying on office/retail space to save Fairfax isn’t a workable strategy.

        Fairfax’s population is barely growing anymore because there’s little to no development. For better or worse, much of the growth in the county will have to be along the SL corridor (Tysons and Reston) where there are investments being made. And frankly, I’d rather live in a more congested Reston, than along deteriorating corridors like Route 50 in Annandale or Route 1 in Hybla Valley. Not to mention that Reston’s parks and library are underutilized today and can handle a lot more growth.

        • Terry Maynard

          Relying on residential space to save Fairfax County won’t work either because it costs more in community services than it generates in tax revenues. That is the whole point of this article.

          Re “underutilized” parks & libraries: The library is the most used one in FC. The County has virtually no parks in Reston–and they are well used; RA provides our recreation areas and facilities–and they aren’t underutilized either.

          • Bob

            Then maybe we need to find a way to get more revenues from all these new residents. Maybe a meals tax? Or maybe increase property taxes on any new development?

            Of course, if you delved into the research a bit more, you’d find that the ratio you claim can be impacted by many variables. For example, if home values are high, then the impact of residential construction can have a far more positive impact. Lo and behold, most of the development in Reston is going to be expensive with very high home values. The ratio you are using is a generic number, but not necessarily specific to Reston’s type of development.

          • Terry Maynard

            We tried a meals tax–twice–and it failed. And we can’t have different property tax rates on different types/ages of property in good ol’ Virginny.

            The op-ed highlights there are many other factors in this discussion, but I think you’d agree I went on long enough. More important, one of the factors I did note is that the more people you add, the worse the tax revenue shortfall becomes–probably even at high property values.

    • TheKingJAK

      Lol, you’ve obviously spent very little time in other communities around the nation and world. Growth (ie, Quantity) does not equal success, rather, quality does. Most communities that crash do so because of poor planning, which ultimately strains the infrastructure to the point where both residents and businesses leave for greener pastures. As far as “Old cranks” go, you’ll have to count all of the residents in their 20’s and 30’s who agree with Mr. Maynard.

  • Well Terry things are changing and us ole Restonians have trouble with change. The density around the metro in Reston will be a financial boom for a needy county spending funds. ..The TC has some 4,000 housing units now but with fewer than 100 school children. So all those housing units add millions to county revenues needed for education and that is good. .Change is coming and we need t make the best of it.

    • Terry Maynard

      Actually, Reston 20/20 and I are strong advocates of transit-oriented high-density mixed-use growth in the station areas–just not as high and residentially focused as the County is pursuing. In the wake of a Reston task force sub-committee report that was outrageous in its density proposals, we even offered up an alternative vision of that growth–with lots of community input–for Reston Town Center in a presentation to the task force. See this: https://www.scribd.com/document/44904406/Reston-Town-Center-Alternative-Vision-Presentation-Reston-2020-Committee . We proposed 20,150 residents in RTC/TCN within 20 yrs. while the developer dominated RTC/TCN sub-com proposed 40,161.

      I’m sure you can guess which way the County went in the final plan.

    • 30yearsinreston

      Just the response that can be expected from a realtor
      The more properties, the more business they can expect

    • I’d Rather Post As A Guest

      Spoken like the ever optimistic realtor that you are. Many Restonians do not share your viewpoint, James. And do not slander us with your off-handed remark that we are all “us ole Restonians”:. That is offensive to every thinking person who lives here and has a stake in what goes on in our neighborhoods. But then your are just a realtor, with no loyalties except to your next commission.

  • dudewe

    Terry Maynard’s Op-Ed is deliberate, sound, and honest, My decades-long dealings with the county have convinced me that they have their heads-in-the-sand and are beholden to developers (some of whom are foreign) instead of the citizens of the county.

    Bravo to Mr. Maynard! I think you should run for county supervisor so we have someone with common sense and intelligence on the board….

    • John

      Dudewe:

      And who has the interests of Reston and Restonians at heart.

      John

  • BacktotheFuture

    Once again Terry Maynard offers the kind of sound, analytically based, recommendations for a path forward so desparately needed. Unfortunately, Fairfax County with its department of Planning and Zoning offers little or no analytical basis for its proposals for nearly limitless,it seems, additional residential development.

    Nor has Mr. Maynard lost sight of Robert Simon’s founding principles which set Reston apart, in character and value, from the rest of Fairfax County. And, as he points out in his analysis, character and value are what we stand to lose if the political leadership continues on its mindless growth path. Let’s push the pols to follow the course he recommends, not the one coming from the shorter term, profit-maximizing above all developer crowd.

×

Subscribe to our mailing list