Focus Group Meeting Summary
Housing Focus Group - October 8, 2002

Attendees:
Melpi Jeffries, League of Women Voters
Toby Millman, Eakin Youngentob
Rich Thometz, Maryland National Building Industry Association
Larry Frank, Bennett, McCarthy and Frank, Architects
Tad Baldwin, Action In Montgomery

Karen Kumm-Morris, Claudia Kousoulas, Nancy Sturgeon, Nkosi Yearwood, Community-Based Planning
Matthew Green, Research Division

The meeting began with a staff explanation of the planning process and the draft redevelopment scenarios. The group then discussed various aspects of building and designing market-rate and affordable housing. Notes from the discussion follow.

Representatives from land use law, the Housing Opportunities Commission, and the County's Department of Housing and Community Affairs were unable to attend.

Housing Market
Is there a market for more housing at the Shady Grove Metro?
Sales have been strong at the King Farm (across MD 355) and at Fallsgrove (in Rockville).

Good design and function can create the housing market at the Shady Grove Metro Station.

Retail on the ground floor creates an inherent conflict with for-sale housing. A retail and housing mix works better with rental housing.

Townhouses at 25-40 d.u./acre are buildable for a purchase market. Silver Spring's Cameron Hill is about 28 d.u./acre. Eakin Yougentob's Wheaton Metro project is 75 units on three acres. Their projects are built with parking garages in each unit, no structured parking, which frees up land for more housing units. The 2,000 square foot townhouses are about 18 feet wide with parking for two cars per unit, with front doors on the street.

In the DC and MD region high housing prices are driven by limited supply. Limited supply is created by both few available sites and by regulatory standards such as environmental requirements for imperviousness and reforestation. Residents that stay in place, since they have no other options create limited turnover and sales. This limited supply drives urban and suburban infill.

High-end housing persists in a tight market, as does low-income supported by subsidies and government policies. Mid-range housing that serves the bulk of the population gets squeezed out first. Workforce housing, priced at about 175K to 195K spiked up last year to 250K.

This region needs a range of product and price point. High prices are good for the industry, creating profit, but if high prices are a result of high land costs, that just creates an upward cycle of price increases.

Regulatory rules, like environmental regulations, open space add to overall costs that are passed on in the final housing price.

It is important to create ownership opportunities.

Affordable Housing
Should the Shady Grove Sector Plan recommend affordable housing, and how much?
Almost no new housing has been built in the last 10-15 years. Land cost is a big factor.

Efforts are underway to extend MPDUs another ten years, but they are still a temporary solution. HOC's affordable units (about 20-30 percent of a given project) are long-term units. HOC needs and uses high rents to cover low rents of affordable units. Usually work with a 70-30 mix of market to affordable, depending on shape and size of project.

Shady Grove's Potential
Redevelopment at Shady Grove offers the opportunity to use County-owned public land to write down the cost of housing. However, can't count on WMATA for cheap public land, they go for highest dollar project.

This area is centered on Rockville Pike, but it is also one of the few available sites and should be used. Could create up to 10,000 units that locate people close to Metro where they can use it.

Should strive to create an attractive community, but MD355 is still not great for housing. Consider locating retail closest to Metro to create an activity focus. Remember that a retailer wants street frontage and will want to be on MD355. (Kentlands' main street is under-performing, while its shopping center is doing well.) Max out the retail to create revenue that supports other goals.

Project Design and Construction
Need a mix of unit types in a concentrated pattern. Regulations should reward that concentration with incentives.

Ensure that projects create amenities such as day care, community focal points, and civic space.

In designing density and bonuses, remember that developers balance profit generated by more units with increased costs of construction ("sticks and bricks" vs. steel and concrete, structured parking). Can build up to four stories with wood, higher buildings use more expensive steel and concrete.

Communities should be as walkable as possible and should encourage walking from farthest edges, not just from a five-minute radius. Place buildings on the street in an urban street profile, and distribute green space that is sized appropriately. Use the best land for the best uses. Set aside green space near Metro, but size it appropriately and activate it with surrounding uses.

Be aware of both the visual and aesthetic pressures of high-rise housing, along with its increased construction costs. Retail uses can help subsidize housing.

The tent pattern of development is too conservative; step-downs are an artificial hold around a Metro station. In other metro region communities, single-family detached neighborhoods abut higher density development.

Implementation and Incentives
Density bonuses have limited effectiveness since developers can't always fit the bonus on the site. Instead cut down parking regulations.

(Would the market in Montgomery County bear drastically lower parking regulations, such as .5 space/unit as in Metro and street intense Arlington County? Not enough Metro and pedestrian options in Shady Grove. Also, 3/4 of trips are not commuting trips, people use their cars for other things.)

Should consider a shared parking facility, especially for rental units (buyers want their own parking) and between mixed uses. Need to rewrite code or create a parking district.

The King Farm's free shuttle is funded by HOA fees and runs between offices and Metro, and is create auto-alternative habits. Development near Metro should create patterns and incentives for less car use.

Resolve conflicting legislative goals, such as more affordable market housing vs. environmental regulations. The legislative constraints on optimizing housing, such as forestation, may not always be appropriate at more developed sites, where active recreation may be needed.

APFO goals should reflect the desire for density near Metro and measure accordingly. They should not limit density.

The Sector Plan shouldn't close out options as far as height. Don't make developers come in for a variance as market, codes, and products change. As prices go up, product changes, and customers will change their demands. Developers need flexibility to respond.

Allow developers to lock-in long-term agreements.

School capacity restrictions are not effective or accurate, providing neither reasonable service nor effective development limits.

Use this opportunity of publicly owned land to create a housing endowment. Consider not developing the land for housing, but sell it to fund an endowment to meet housing goals elsewhere. Or use the "free" land to write down housing costs at the site.

The County should work with a market partner to create housing.

Also use this opportunity to encourage the public uses along Crabbs Branch Way to think about their own future needs and locations.

Shady Grove and 355-a desirable housing location?
No problem for high-density rental housing at this location, despite being at a difficult intersection. Leave the opportunity for mixed uses.

In a tight market, make a distinction between unattractive vs. unsafe.

Casey Site at 370-a desirable housing location?
Put housing on southern portion, next to the shopping center. Let the market decide about housing on the site's northern portion. It may be less connected to Metro, but if it's accessible to MARC could be desirable. People will walk farther if the environment is walkable.

Since the demand is so high, all these sites have housing potential. The supply gap will fuel price increases, even without job creation and despite problems on potential sites.

Conclusions
Housing demand is high and supply is limited. Housing should be "optimized" in locations near Metro and throughout the planning area. Affordable housing supply, both market and subsidized, is shrinking as demand and limited land drives prices higher and as MPDUs turn over into market rate housing. The Sector Plan should include affordable housing as part of its residential mix of unit types

Mixed uses should be allowed to subsidize the housing component of redevelopment projects, as well as meet retail and service needs. Civic space, daycare, and other public amenities need to be incorporated into the community to serve new and existing residents.

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