Amazon

Morning Notes

By ARLnow.com

Longtime Election Director Retiring — “Linda Lindberg, who has served for 16 years as elections chief in Arlington, on Feb. 2 formally announced she would not seek re-appointment and would retire over the summer. The move had been expected, and Lindberg’s service drew praise from members of the Arlington Electoral Board.” [InsideNova]

Northam Signs HQ2 Bill — “Amid fallout over a racist photo, Virginia Gov. Ralph Northam has signed legislation which would carry out the state’s promise to Amazon for up to $750 million in incentives if it creates almost 38,000 jobs at its new Arlington County headquarters.” [Washington Post, Washington Business Journal]

Board Wants Project Labor Agreement for HQ2 — “[Arlington County Board member Katie] Cristol says that Northern Virginia is working on protecting labor during Amazon’s forthcoming development of Crystal City through what’s called a project labor agreement, which is a legal document that establishes the terms and conditions for employment on a construction project before it solicits bids.” [DCist]

Cycling Bill Advances in State Senate — A bill that would “classify cyclists as vulnerable road users deserving special protection under the law” has passed the Virginia State Senate. [Twitter, Virginia LIS]

Road Closures for 5K Race — “The annual Love the Run You’re With 5K will take place in the area of Pentagon City on Sunday, February 10, 2019. The Arlington County Police Department will implement [a number of] road closures to accommodate the race.” [Arlington County]

‘Never Let a Crisis Go to Waste’: Amazon Prompts Debate Over How to Make Arlington Homes Affordable

By Alex Koma

Arlington leaders agree that Amazon’s impending arrival in the county demands urgent action to address housing affordability — but there’s a lot less agreement on what sort of policy response is necessary to hold down the area’s skyrocketing housing costs.

Some of the changes officials are envisioning are relatively modest ones, expanding on existing efforts that began long before the tech giant announced its plans to bring 25,000 workers to the area. After all, many have argued that the new headquarters set to pop up in Crystal City and Pentagon City won’t prompt the sort of explosion in gentrification that Amazon’s opponents fear.

Other experts see a need for more ambitious tactics, like allowing more development in Arlington to flood the market with more homes. That could well be a politically explosive change in the county, particularly if it means increasing density in Arlington’s oldest residential neighborhoods.

Or perhaps there’s a need for a more creative approach — some progressive activists are championing the creation of a “community land trust,” a strategy embraced elsewhere around the country to allow for the communal ownership of affordable homes.

It presents local leaders with a series of choices that could well define the county’s destiny for decades. And with Amazon’s workers set to start arriving by the thousands next year, officials won’t have long to make up their minds.

‘We should never let a crisis go to waste,” said County Board member Erik Gutshall. “Amazon is bringing a sharp focus to these fundamental issues, and it’s providing us with the opportunity to double down on the sort of planning we’ve done for decades.”

Building on existing efforts

County Board Chair Christian Dorsey agrees that the urgency of addressing housing affordability has been “magnified” since Amazon’s momentous mid-November announcement.

But, fundamentally, he says “the world, as I see it, in terms of housing strategy is not very different than it was” before officials knew they’d won a new Amazon headquarters.

“We’ve identified the tools we’d like to deploy,” Dorsey said. “Now we have to do the hard work of deploying them.”

For instance, the county has long relied on its “Affordable Housing Investment Fund” to provide loans to developers building affordable homes. Those projects often include apartments guaranteed to remain affordable to renters, known as “committed affordable” homes, that are most valuable for people at the lowest end of the income scale.

The County Board allocates cash to the fund each year, and that contribution has recently hovered around $15 million annually. The county is facing a budget squeeze in the coming fiscal year, but as tax revenue from Amazon’s new properties and workers trickles in over the next few years, Gutshall believes the Board should “earmark some of that specifically” for the loan fund.

Similarly, he notes that the Board will also be able to force Amazon to send cash to the program as it builds new offices (most of which will be located in Pentagon City), as developer contributions are the Board’s main tool for seeding the fund with money.

But as market forces persistently push the costs of new development higher, researchers believe the county also needs to preserve the affordable homes it already has.

“Buying up and preserving existing middle-income housing, that stretches public subsidy dollars much further than trying to build stuff from scratch,” said Jenny Schuetz, who studies housing policy with the Brookings Institution’s Metropolitan Policy Program. “The county should be doing more of that preservation work and they should be focusing on that area near the new headquarters.”

The Board has indeed worked to preserve some affordable homes already by setting up “housing conservation districts” to protect older, “garden apartments” designed to be affordable to middle-income renters. Officials first passed the policy in 2017, with plans to eventually allow developers to replace protected homes with even larger affordable developments, but there’s been little movement on the issue since then.

Gutshall argues that the county needs to “accelerate” some of that work, as it seeks to expand “missing middle” housing, commonly understood as homes that fall in between apartments and single-family houses. The Board already loosened some of its regulations for accessory dwelling units, or “mother-in-law suits” on the same property as another home, and Gutshall wants to further tweak zoning rules to allow for more duplexes and small apartment buildings to be built around the county.

“We need to be thinking about how we can keep the character of residential neighborhoods, but still open up housing types and allow for better transitions on the edges,” Gutshall said. “At the same meeting we vote on the Amazon deal, I would love to see a ‘missing middle’ directive… to really identify key areas where think we can make some rapid progress addressing this.”

Touching the ‘third rail’?

Yet the scale of the affordability challenge confronting Arlington has convinced many experts that such changes aren’t enough.

Many observers see a clear and urgent need to ramp up the supply of housing more rapidly, even if that means the construction of the same sort of high-end apartments that are already commonplace in the county. Those homes themselves might not be affordable for low-income renters, but experts argue that any new apartments will have a positive impact on the market as a whole.

“People moving into those new homes come from somewhere,” said Eric Brescia, a member of Arlington’s Citizens Advisory Commission on Housing, who also works as a Fannie Mae economist. “Think of it like the market for cars. A lot of poorer people buy used, not new, at first. New apartments help free up the older stock for people of more modest means.”

But the question becomes where those new apartments will fit, and that leads to some very thorny debates for local leaders.

Anyone walking along one of Arlington’s Metro corridors can see that neighborhoods like Rosslyn and Ballston are already jammed with high-rise developments. Most of the rest of Arlington is reserved for single-family neighborhoods — as much as 87 percent of the county is zoned only to allow for that type of development, according to one recent analysis — but officials might need to reverse that trend as Amazon ramps up the pressure on renters.

“Many people are saying it’s time to look at this exclusive, single-family detached development and how wasteful it is in terms of land use,” said Michelle Krocker, the executive director of the Northern Virginia Affordable Housing Alliance. “But if anything is going to shake communities to their core, this will be it.”

Schuetz points out that these are often wealthy neighborhoods, full of residents “that turn up in large numbers and vote” if they fear encroaching density. But she doesn’t see any choice for the county but examining the prospect of allowing more development in a wider variety of places.

“You have these neighborhoods within a mile, walking distance, of the Metro, but they’re only zoned for single-family homes,” Schuetz said. “It’s just not efficient.”

Dorsey acknowledged that such discussions have always been a bit of “a third rail,” politically, and he understands the impulse of homeowners who might “worry about what more density would look like in their neighborhood.”

“I don’t fault people for wondering if we’re intending for the same density as in Ballston to come to every low-density neighborhood,” Dorsey said. “I get that… that’s why we have to talk about this with real specificity.”

And Dorsey says the Board isn’t considering any sweeping changes to zoning rules across Arlington, even if advocates favor such a move. Instead, he expects a more modest first step is increasing density along some sections of Lee Highway, where the Board is already gearing up an extensive study of its plans for the corridor.

“The potential we have in Arlington is along our major transportation corridors, Lee Highway in particular, where there is more than enough opportunity for substantial amounts of new housing,” Gutshall said. “If we’re able to unlock that, that will carry us through our next 30 to 40 years.”

Following in Bernie’s footsteps?

Beyond these debates about zoning and density, some activists see room for another, very different path for the county to pursue as Amazon looms.

Tim Dempsey has been working with advocates and local leaders on the idea of a “community land trust” since first coming across the idea while reading a bit more about Sen. Bernie Sanders (I-Vt.) during his 2016 presidential bid.

While he was still just the mayor of Burlington, Vermont, Sanders helped create a land trust, among the first of its kind in the nation. In the unusual arrangement, a nonprofit buys up available land, then builds homes atop it.

Anyone can then move in and pay a mortgage on the homes themselves, while the nonprofit retains the ownership of the land. That protects home prices from wild fluctuations, particularly the sort of speculation that could follow Amazon’s arrival in the county, Dempsey said.

“This prevents the land from falling into a speculator’s hands in the first place,” said Dempsey, who sits on the steering committee for the Sanders-inspired group Our Revolution Arlington

And more than just providing low- and middle-income people with a place to rent temporarily, Dempsey believes this method “allows people to have many of the benefits that come with home ownership, like building equity, tax deductions and having very stable housing.”

“They might not get the full value of owning a home, but they probably would never be able to get into homeownership to begin with, otherwise,” Dempsey said. “This could address long-standing social justice issues when it comes to home ownership.”

Without such a model in place, Dempsey fears Amazon will push already skyrocketing home prices higher and force people out of Arlington. That’s why he’s already brought the idea to many Board members and other local affordable housing advocates, where he says it’s largely earned a warm reception.

That’s significant, because Dempsey believes the county has a key role to play in setting up the trust — the county would likely need to provide the cash to get the effort off the ground, and could take a leading role in acquiring land for any future nonprofit.

Dorsey says he’s certainly willing to examine the issue in more detail. But he urged the trust’s proponents to strive for the true “end game” of such a program, rather than getting hung up on setting up a trust, per se.

“I don’t want to get so focused on the prospect of a land trust that we don’t look for the true essence of this opportunity: how do we acquire property that can be made into affordable housing?” Dorsey said. “It could be a land swap, or allowing an entitlement to build something that’s more dense to get a different opportunity elsewhere.”

Where Dorsey and Dempsey can agree is that such a trust would be most effective if it’s a regional effort.

Indeed, with Amazon’s workers expected to settle all throughout the D.C. area, experts of all stripes are unanimous that Arlington can’t hold down housing prices on its own, no matter which strategies leaders pursue.

“Arlington can obviously play a part in this, but housing markets are regional,” Brescia said. “And we need more collaboration across the region.”

File photo

Arlington Must Open Up Single-Family Neighborhoods to Different Housing Options, Advocates Argue

By Alex Koma

The vast majority of land in Arlington is reserved for the construction of single-family homes, and affordable housing advocates argue that’s going to have to change if the county wants to adequately handle the region’s looming, Amazon-inspired population influx.

A new report released by the Northern Virginia Affordable Housing Alliance last week argues that Amazon’s decision to bring 25,000 jobs to Arlington in the coming years “should create a regional sense of urgency and commitment to address our housing supply and affordability gap,” a sentiment broadly shared among local and state leaders following the company’s momentous announcement. But where the advocacy group strikes a starker tone than other observers is in its policy prescriptions for meeting that challenge.

The NVAHA’s researchers point to data showing that about 86.7 percent of land in Arlington is zoned exclusively to allow new single-family homes, compared to just under 12 percent where multifamily development, like apartment buildings, is permitted.

They believe that sort of zoning scheme not only chokes off the county’s ability to add more housing, and meet its current supply pressures, but also cuts off the potential for people of more modest means to ever move into the county’s more affluent neighborhoods.

Accordingly, the group sees the clear potential for “allowing more diverse housing types in detached single family neighborhoods,” reversing the current paradigm where the “path of least resistance” for developers is simply to build ever-larger single-family homes in those areas.

“It should be noted that efforts to increase density and flexibility in use have been controversial, both within the region and across the country,” the group wrote. “Awareness of the socioeconomic bias that shaped low-density and exclusionary zoning is not widespread, and the predominance of the neighborhood form in many urban and suburban areas has created strong consumer demand for such communities, making discussions of regulatory reform more politically contentious. However, these barriers are not insurmountable and the moral imperative of breaking down exclusionary barriers justifies the effort.”

The NVAHA acknowledges that there is indeed a role for local governments to subsidize the creation of housing that is guaranteed to remain affordable in order to reach the poorest renters, or to prioritize the preservation of existing affordable homes.

But the advocates also stress that the “disproportionate number of higher-income earners” moving into the area means that market realities will make it difficult for county officials and other leaders to build enough housing on their own. That means relying on more private development, they say, while working to ensure that developers don’t only build high-end apartments that are out of reach for people in lower income brackets.

“By-right development should be liberalized to streamline the costly entitlement process and promote more naturally affordable building types and development scales,” the researchers wrote.

They suggest that duplexes, townhomes and other small apartment complexes could be housing options for the county to consider, and they do note that the county has done some work in this area with its strategies to promote the creation of “accessory dwelling units.” Arlington officials did take some steps to allow smaller apartments attached to larger homes, commonly known as “mother-in-law suites,” but the NVAHA sees room for more bold changes on the issue.

The researchers note that discussions around creating more “missing middle” housing, to fill the gap between subsidized affordable units and luxury homes, often concentrate that the new homes “around transportation corridors or the areas near existing mid-density or mixed-use neighborhoods.” Instead, they see a need for more “diversification” of new housing types all across the different regions of the county.

“A broad-based approach diffuses demand over a wider area,” the group wrote. “If demand for such units is not limited to a small number of neighborhoods by government fiat, any potential impacts on roads, school capacity, and neighborhood form are more likely to emerge gradually, enabling adequate planning and preparation.”

Of course, the advocates would concede that Arlington won’t be able to solve the housing affordability problem on its own, particularly as officials expect that Amazon’s workers will choose to live around the entire region. Accordingly, they urged leaders from across D.C., Maryland and the rest of Northern Virginia to confront the issue together.

“These discussions need to happen in Bowie and Bethesda, as well as Arlington and Alexandria,” NVAHA Executive Director Michelle Krocker wrote in a letter introducing the report. “Regional benefits equal regional responsibilities… Will our elected officials put jurisdictional differences aside and respond for the good of the region?”

Flickr pool photo via NCINDC

County Board Delays Consideration of Amazon Incentives, After Targeting February for a Vote

By Alex Koma

Arlington leaders are pushing back their consideration of an incentive package to seal the deal for Amazon’s new headquarters by at least a month.

Ever since the tech giant announced its plans to bring 25,000 workers to the county in mid-November, the County Board has pledged to hold a public hearing and vote on the logistics of its offer to Amazon no earlier than its Feb. 23 meeting.

But officials have begun hinting in recent weeks that they may miss that self-imposed deadline, and Board Chair Christian Dorsey confirmed those intimations at the Board’s meeting yesterday (Tuesday).

“February was the date that was targeted, but it’s not going to be before March that it’s before this Board,” Dorsey said. “We just want to give everyone that comfort and peace of mind.”

It seems the Board plans to use the extra time to convene additional community discussions about the company’s plans to move in to Pentagon City and Crystal City.

New Board member Matt de Ferranti added Tuesday that the Board will soon be extending an invitation to all the county’s civic associations for more community meetings on Amazon. De Ferranti said that each group will be able to request that up to two Board members attend a neighborhood gathering on the subject in the coming weeks.

Thus far, the Board has held just a pair of community “listening sessions” on Amazon. Those gatherings have proven to be contentious ones, with the company’s fiercest opponents using the events as chances to register their concerns about the tech giant’s business practices and potential to further gentrify Arlington neighborhoods.

Others still say they’re deeply concerned about the prospect that state and county officials could soon send hundreds of millions of dollars in incentive money to a company owned by the world’s richest man.

State lawmakers signed off on an incentive package just this week to direct up to $750 million in tax rebates to the company over the next 15 years or so, though the county’s offer is a bit more modest.

Arlington is proposing to send $23 million in grant money to the company over the same time period, with the money to be drawn from a projected increase in hotel tax revenues driven by Amazon’s arrival in the region.

The county would also agree to spend $28 million over a 10-year period on infrastructure improvements around the proposed headquarters, with the money coming from a preexisting property tax levied on businesses across Crystal City, Pentagon City and Potomac Yard. Additionally, Arlington has agreed to help the company build a helipad at the new headquarters, though securing federal approval for that effort could prove to be quite challenging.

The County Board could consider the incentive offer next month during either its March 16 or March 19 meetings, should officials not avoid additional delays.

So long as the Board approves the deal, as is broadly expected, the company would then begin submitting plans for the construction and renovation of several buildings across Crystal City and Pentagon City, requiring additional county approvals.

Morning Notes

By ARLnow.com

Student Population Predicted to Keep Rising — “Arlington school officials say they now anticipate the total student population to rise an additional 24 percent by 2028, and the latest round of projections has raised fears the school system could fall further behind in its efforts to keep up with elementary-school enrollment.” [InsideNova]

Amazon to First Come to Rosslyn? — “Amazon.com Inc. is said to be in talks to take some or all of the planned WeWork co-working space set to open in Rosslyn later this year as it plots its longer term growth at National Landing,” reports the Washington Business Journal. ARLnow has also heard from a commercial real estate source that Amazon will station its initial Arlington “HQ2” employees at the Rosslyn WeWork, while its temporary space in Crystal City is built out, but we have been able to confirm the rumor. [Washington Business Journal]

Local Elm Tree Honored — An American elm tree on S. Randolph Street “has become the first elm tree to be named a specimen tree in Arlington County.” [Arlington County]

Police Outreach Meeting Postponed — “Due to projected inclement weather, the North Outreach Team Quarterly Meeting scheduled for… January 29, has been postponed. Event details on the rescheduled meeting will be provided at a later time.” [Twitter]

Patient Stops By Fire Station to Thank Rescuers — “Andrew stopped by Fire Station 10 to show his gratitude after being extricated from his overturned Jeep last week on Route 110. Andrew was released from the hospital one day after the accident with no life threatening injuries.” [Twitter]

Nearby: Landmark Mall Development Update — “There are several years until any major construction activity occurs at Landmark Mall, but Alexandria and the mall’s owner are homing in now on the parameters that will guide the nearly 6 million-square-foot redevelopment… Buildings could rise as high as 250 feet, per one recommendation.” [Washington Business Journal]

Flickr pool photo by John Sonderman

Lawmakers Overwhelmingly Support Incentive Bills to Bring New Amazon Headquarters to Arlington

By Alex Koma

State lawmakers have overwhelmingly approved an incentive package designed to lure Amazon to Arlington, sending legislation to Gov. Ralph Northam’s desk that will direct hundreds of millions of dollars in grant funds to the tech giant over the next 15 years.

Virginia’s House of Delegates passed a bill on the matter by an 83-16 margin today (Monday), after the state Senate signed off on the legislation with a 35-5 vote last week. Northam will ultimately have the final say on the issue, but considering that his administration helped broker the deal with Jeff Bezos’ firm in the first place, it now seems a sure bet that the company has the state’s support for a massive expansion in Pentagon City and Crystal City.

The legislation sets up a “Major Headquarters Workforce Grant Fund” to hand out the payments, designed to offset state taxes Amazon would incur should it set up a massive new headquarters in the county. In all, the bill would send $550 million to the tech giant between now and 2030, so long as the company delivers on its promise to bring 25,000 high-paying jobs to the area.

If the company can come through with another 12,850 jobs after that, Amazon stands to earn another $200 million in incentives, for a total haul of $750 million attached to the project.

Northam and his negotiators promised a variety of transportation improvements around the proposed headquarters in order to make Arlington seem especially attractive to the company, in addition to investments in tech education programs at state universities. But those measures will likely be included as part of the state budget, or funded through other state programs, leaving the incentive bills as the clearest chance for the General Assembly to have its say on Amazon’s arrival.

“When it comes to Arlington and Alexandria, I believe this is exactly what they want,” said Del. S. Chris Jones (R-76th District), a member of a powerful panel of lawmakers who worked with Northam to hammer out Virginia’s offer to the company, during a brief floor debate today.

While the incentive legislation never faced much in the way of serious opposition, it did attract dissenting votes from Republicans and Democrats alike. Six Democrats and 10 Republicans in the House opposed the bill, while all five state senators to vote against the measure were Republicans.

Notably, Del. Alfonso Lopez (D-49th District) was the lone member of Arlington’s legislative delegation to vote against the bill.

Part of the company’s headquarters will be based in his South Arlington district, and he’s already raised concerns about how Amazon will disrupt the area’s housing market. He also chose to send back campaign contributions from the tech giant, after Amazon shelled out cash to all of Arlington’s lawmakers and many other prominent state leaders.

“The thing I keep hearing about over and over again are the prospects of displacement,” Lopez said. “This has been a problem for a really long time. HQ2 has just shown a bright light on it.”

Lopez commended some of the planned investments in housing affordability measures that Northam is promising as part of his offer to the company, but he says that “neighbors are worried about being displaced now, long before money creates any new housing.”

Experts across the region say that it’s no sure bet that Amazon will suddenly drive up all home prices and force renters out of the county, but they do believe it’s a distinct possibility that low- and middle-income people could feel a squeeze from the company’s arrival. And with Arlington and Alexandria committing to just limited affordable housing measures on top of the state’s efforts, some lawmakers do indeed see reason for skepticism.

“Those provisions are too little and too late,” said Del. Lee Carter (D-50th District), an intense Amazon opponent and the legislature’s lone Democratic socialist. “Even if construction were to be completed right now, it’d be too late for some neighbors in my district.”

Others still, Republicans and Democrats alike, questioned the wisdom of handing over such large incentives to a company owned by the world’s richest man. But the potential of the deal to bring so many jobs to the region, with a corresponding flow of tax revenue to local governments, was too promising for many lawmakers to pass up.

“We put together one of the best business deals I’ve ever seen in my 20 years of economic development experience,” said Del. Matthew James (D-80th District) during a committee hearing on the legislation last week. Like Jones, he helped negotiate the deal with Northam’s team.

The House also acted today to combine two identical Amazon incentive bills into one before sending the legislation to Northam, which should remove the need for the Senate to consider a version of the bill to originate in the House. Once this year’s legislative session ends on Feb. 23, the governor will have a month to decide whether to sign or veto the bill.

In the meantime, Arlington officials have yet to consider their own package of incentives attached to the deal, totaling about $23 million in grant funds over 15 years. The County Board plans to take that matter up no sooner than its Feb. 23 meeting, but some members have recently begun suggesting that they could push the issue into March instead.

Photo via @Osubi_C

Amazon Shouldn’t Spell ‘Doom’ for Most Local Renters, But Observers Still Fear Its South Arlington Impacts

By Alex Koma

For people fearful about how Amazon will impact Arlington, a single question tends to rise above all others — will the company’s arrival price me out of my home?

There are certainly plenty of other concerns surrounding the company, and the 25,000 jobs it has promised to bring to its new home in Pentagon City and Crystal City, stemming from its highly criticized business practices to its potential impact on roads and transit in the region.

But concerns about housing affordability have most consistently come to the fore since Amazon’s announcement that it would be setting up shop in Arlington, as renters worry that the company’s army of well-paid workers will set off an explosion in home prices and push them deeper into Northern Virginia’s suburbs.

In selling the proposed deal to bring the Amazon headquarters to the county, officials have argued that these fears are largely overblown. Over the last few months, all manner of local leaders have claimed that the company will arrive slowly enough for Arlington to absorb the new residents, and that the county won’t be forced to house every single one of the workers who will spend their days in the new office space.

And, in general, academics, advocates and real estate watchers around the area agree with that line of thinking. For the most part, the experts surveyed by ARLnow on the issue don’t believe that Amazon will have the sort of apocalyptic impact on housing and gentrification that some skeptics fear.

Yet they also caution that the company will almost certainly still push many people out of the county, particularly those of more modest means living in South Arlington neighborhoods. While the county may not face the same massive disruptive impacts as Seattle, which is still struggling to integrate one of the world’s largest companies into its metro area, observers warn that it would foolish to minimize the size of the challenge Arlington is facing.

“I don’t agree with the view of impending doom that Arlington will become San Francisco due to housing problems, but there are real concerns here to address,” said Eric Brescia, a Fannie Mae economist and a member of Arlington’s Citizens Advisory Commission on Housing.

The case against Amazon panic

Fundamentally, the argument minimizing Amazon’s impacts on the housing market includes the same key points.

First of all, the company plans to bring its 25,000 workers to the new headquarters over the next decade or so, not all at once. And, even then, not all of them are likely to live in Arlington, the thinking goes — many could choose to move to other Northern Virginia suburbs, or even to Maryland and D.C., to take advantage of Arlington’s connection to public transit networks.

Many other employees set to work at the headquarters probably already live in Arlington, considering that Amazon says it chose the D.C. region due to its bevy of “tech talent” already in the area.

That means that county leaders are planning on seeing closer to 15 to 20 percent of Amazon’s workers relocate to Arlington specifically, an influx of (at most) 5,000 people. In fact, a report prepared by George Mason University’s Stephen S. Fuller Institute as part of the state’s courtship of Amazon estimates that more than twice as many of the company’s workers will move to Fairfax instead of Arlington.

“This isn’t based on a wish, but based on our prior experience with other large employers,” said County Board Chair Christian Dorsey. “Can we guarantee it? Of course not… but this is the best we can do in projecting how this investment does and does not look like other investments that we’ve had.”

County Board member Erik Gutshall also points out that the D.C. region as a whole has been in the midst of a massive explosion in growth in recent years, and Amazon could merely feel like a drop in the bucket. Based on regional projections, Gutshall says the company’s is “expected to account for about 5 percent of regional job growth over the next 12 years.”

“That, to me, says this alone is not going to be a major driver of housing affordability problems,” Gutshall said.

Regional observers believe that the broad strokes of that argument are accurate.

Brad Dillman, the chief economist for national real estate developer Cortland, points out that Crystal City and Pentagon City both have slightly higher residential vacancy rates than the D.C. metro area as a whole, leaving some room for Amazon employees moving in.

And Christopher Ptomey, the executive director of the Urban Land Institute’s Terwilliger Center for Housing, notes that it’s hardly uncommon to see large government agencies (or other big companies) move into communities around the Northern Virginia area. Based on Arlington’s own past experiences with such changes, he sees no reason Amazon employees would behave any differently.

“Some people come here and decide Arlington has great schools and is convenient, so they’re willing to pay a little bit more to stay here,” Ptomey said. “Others prefer a bigger house and a wider lot and lighter traffic. I don’t think Amazon employees going to be particularly unique in that way.”

Uncertainties abound

Yet, with so many unknowns about the company’s plans still remaining, experts caution that it’s hard to make too many definitive declarations about the make-up of the company’s workforce just yet. That complicates efforts to make predictions about how they might behave when they arrive.

“We need to know: what’s the age range and family type of these workers?” said Jenny Schuetz, who studies housing policy as part of the Brookings Institution’s Metropolitan Policy Program. “A bunch of 25-year-olds will want to live nearby, but they pay a lot more in taxes than they consume in services. More older families will require more space in high-performing schools, but some will want to live farther out.”

Indeed, Schuetz and other analysts warn that the county shouldn’t offer too much certainty about Amazon’s precise impacts until officials start to see how the company’s arrival changes the region.

Arlington officials have simultaneously downplayed the number of people arriving along with Amazon, while also trumpeting how other high-priced tech companies will likely flock to the area to do business with Jeff Bezos’ firm. Until Arlington can evaluate just how real that downstream impact is, experts say it might be useless to simply study just Amazon’s workforce.

“Will just Amazon come here or is this the beginning of D.C. becoming a major tech hub?” Brescia said. “That’s really unknown.”

But Schuetz notes that research shows, in general, “each new tech job spins off roughly five additional jobs.” That might be good news for the county’s economy, but it also complicates the math of predicting how many people will flow into Arlington.

“We know that big headquarters like this have a multiplier effect,” Schuetz said. “They will need supportive services and restaurants to serve the campus directly.”

However many people associated with the company ultimately arrive in Arlington, analysts point out that they are likely to be quite wealthy. The terms of the state’s proposed deal with Amazon require an average annual salary of $150,000 for the company’s employees, and other tech workers bound for Arlington are likely to pull in similar sums.

Even still, Dorsey believes those salaries “are not out of scale with typical earnings in the area,” minimizing the impact they’ll have on the county’s home prices.

A ‘housing crisis’ for low-income renters?

But critics of the county’s pursuit of Amazon believe that sort of mindset ignores the current conditions in Arlington, which already pose problems for renters. Tim Dempsey, a member of the steering committee for the progressive group Our Revolution Arlington, points out that many Board members (including Dorsey himself) won office based on pledges to combat the county’s pre-Amazon “housing crisis” for low-income people and the middle class alike.

“We already don’t have housing for middle-income earners, whether that’s school teachers, firefighters or policemen,” Dempsey said. “The county never asked the community if it was a good idea to bid for this, and when we raised these issues, we were told it was premature to even talk about this.”

Ideally, Schuetz says that Amazon’s workers and their peers won’t be competing for the same types of housing as the people Dempsey is worried about. In all likelihood, “if they’re displacing people, they’ll be displacing other high-income households” by moving into Arlington’s high-rent Metro corridors.

Dillman also foresees developers adding plenty of new housing around the new headquarters, noting that the pace of development has been especially slow in Crystal City as the area’s office vacancy rate has skyrocketed. That should, in theory, provide plenty of new, high-end homes for Amazon arrivals.

The “danger point” that Schuetz fears is what becomes of the “low-cost, older housing” in neighborhoods elsewhere in South Arlington, particularly along Columbia Pike, or in North Alexandria.

“Those could be the targets for redevelopment, where you could potentially charge higher rents,” Schuetz said. “And that’s the area where we’d see displacement.”

Michelle Krocker, the executive director of the Northern Virginia Affordable Housing Alliance, agrees that the fate of apartments running from the Pike to Bailey’s Crossroads and even Seven Corners is one of her prime concerns. But her research also suggests that observers “shouldn’t assume everyone will jump on the bandwagon and sell.”

“Many of these buildings have been in the same family for generations, going back to 1950s, 1960s,” Krocker said. “That means there can be tax consequences and liabilities if they entertain selling. And, for many, the buildings are cash cows.”

Of course, the county could take additional steps to preserve those sorts of buildings to address the issue. And officials say they’re already mulling all manner of strategies to combat housing affordability challenges.

To Brescia, how the county follows through with those plans could provide the clearest answer for anyone searching for the exact extent of Amazon’s impacts.

“It will all really depend on the policy response to this, across the region,” Brescia said.

Two Crystal City Transportation Projects Tied to Amazon Deal Now Set to Win Millions in State Funds

By Alex Koma
1/3

A pair of major Crystal City transportation projects that were key parts of Arlington’s pitch to Amazon are now set to receive millions in state funds.

State transportation planners are recommending that officials send the county $52.9 million to help build a second entrance for the Crystal City Metro station, and another $6.6 million for an expansion of the Crystal City-Potomac Yard bus rapid transit system to Pentagon City.

The money is set to flow through Virginia’s “Smart Scale” program, a pot of money managed by Gov. Ralph Northam’s Commonwealth Transportation Board for big-ticket projects around the state. Each year, state planners recommend a series of improvements for funding by weighing various factors like how each one will reduce congestion or spur economic development efforts.

While the funding arrangement isn’t final just yet, the cash could help spur the construction of two of the five transportation improvements Northam’s negotiators promised to the tech giant in striking a deal to bring Amazon’s new headquarters to Crystal City and Pentagon City. A second, southwestern entrance to the proposed Potomac Yard Metro station, a new pedestrian bridge connecting Crystal City to Reagan National Airport and as-yet-undetermined improvements to Route 1 were also part of the incentive package.

However, the company didn’t put forward any cash on its own to afford the changes, leaving the county and the state to sort out the funding details. And the latest recommendations from state officials suggests that they’ll be drawing the bulk of the funding from “Smart Scale” cash, necessarily shrinking the size of the pot of transportation dollars available for the rest of the state.

Notably, the nearly $53 million set aside for the second Metro entrance is substantially less than the $78 million in “Smart Scale” money county officials requested for the project this past summer, back when it was still no sure bet that Amazon would pick Arlington. The project’s total price tag is estimated at $90.7 million.

County leaders have hoped for years now to build an eastern entrance to the station, to be located at the northwest corner of the intersection of Crystal Drive and 18th Street S., in order to make it more accessible to commuters and improve connectivity with the nearby Virginia Railway Express station.

Yet Arlington had trouble winning regional transportation funding for the project, in part due to some of the vagaries of the deal struck by state lawmakers to provide dedicated annual funding for the Metro system, but Amazon’s impending arrival seems to have bumped the effort to the front of the line. The project didn’t score especially well on the “Smart Scale” metrics designed to evaluate projects for funding, placing 83rd out of the 433 projects submitted for consideration this year, but it was still included among the 11 projects in the Northern Virginia area set to see more cash this year.

Documents prepared for the CTB don’t lay out where the county will find the remaining $37 million or so for the project. The regional Northern Virginia Transportation Authority previously sent $5 million to account for engineering and design costs, but Arlington officials declined to allocate much cash for the project in an update to its 10-year construction spending plan passed last year. Northam could opt to include more funding for the project in his state budget this year; the county’s proposed deal with Amazon also mentions that officials plan to draw up to $28 million over a 10-year period from tax revenues generated by the new headquarters to afford improvements in the area.

By contrast, the expansion of the dedicated bus lane system, commonly known as the “Transitway,” was already in the works when the Amazon deal came into focus. The “Smart Scale” cash will fund all but about $1.8 million of the project’s estimated cost.

The Transitway currently operates between the Crystal City Metro station and the Braddock Road station in Alexandria, with dedicated bus lanes and stations covering about 4.5 miles in all. The expansion would add another .75 miles to the route, linking the Pentagon City Metro to the Crystal City stop.

With Virginia Tech planning a new campus in Potomac Yard to coincide with Amazon’s arrival, and development in the neighborhood ramping up, the bus service would provide a link between all three areas before a new Metro station opens in the Alexandria neighborhood. The project ranked 10th overall on the “Smart Scale” metrics.

The CTB will spend the next few months finalizing these funding plans, and is set to approve them formally in June.

Morning Notes

By ARLnow.com

Roads ‘Looking Good’ After Light Snow — Per Arlington’s Dept. of Environmental Services: snow removal crews are “reviewing school routes, especially bridges and County sidewalks, with @APSVirginia on a 2-hour delayed opening. Roadways looking good, treated as needed, but go slow and remove snow from vehicles before pulling out.” [Twitter]

Gov’t Closures Today and Monday — “Arlington County Government offices, courts, libraries & facilities will be closed on Jan. 21, 2019 for Martin Luther King, Jr.,’s birthday. NOTE: Commonwealth of Virginia offices (including Courts & DMVs)  will be closed Friday Jan. 18, 2019 for Lee-Jackson Day.” [Arlington County]

Amazon Incentives Clear First Richmond Hurdle — “A powerful General Assembly committee has passed and forwarded to the full state Senate legislation that would grant Amazon up to $750 million in financial incentives for locating a secondary headquarters in Arlington and Alexandria.” [InsideNova]

Who Said This? — A “big D.C. developer” reportedly called Crystal City “Ballston with lipstick,” which is more flattering than what an executive for Crystal City’s biggest property owner said about the community earlier this week. For its part, Crystal City is continuing to bask in the afterglow of its big Amazon win and this week’s announcement that PBS will be keeping its headquarters in the neighborhood. [Twitter]

Famers Market Offers Shutdown Discounts — The Westover Farmers Market, held on Sundays at the corner of Washington Blvd and N. McKinley Road, is offering discounts of 10-25 percent for furloughed federal employees and contractors until the government shutdown ends.

Arlington Family’s Furlough Story — An Arlington couple who both work for the federal government and are missing paychecks during the shutdown is more fortunate than many, given that they have savings with which to keep paying the bills. But it has meant cutting back on discretionary spending and things like child care and retirement contributions. [MarketWatch]

Arlington Man Arrested for ‘Ruckus’ in Ohio — “A man from Arlington, Virginia is facing charges in Youngstown after police say he created a ruckus at the downtown DoubleTree and threatened police… officers say he kept threatening them saying, ‘You guys are going to be sorry, and you’re going to regret this. I will find you when I get out.'” [WKBN]

County Leaders Don’t Expect to See Seattle’s Problems with Amazon Spring Up in Arlington

By Alex Koma

(Updated at 8:25 p.m.) When many Arlingtonians take a look at the sort of impact Amazon has had on Seattle since setting up shop in the city, they can’t help but feel nervous about how the tech giant might transform the county when it arrives.

The city has seen everything from skyrocketing housing prices to nightmarish traffic congestion stemming from Amazon’s rapid growth into one of the largest companies in the world, and leaders there have felt compelled to take new steps to bridge the growing inequality between the city’s tech workers and the rest of its residents.

It all provides plenty of reason to be wary of what lies ahead for Arlington once the company starts bringing its new headquarters to Crystal City and Pentagon City. But local leaders and regional planners are trying to deliver a clear message to quell those concerns — Seattle and D.C. could not possibly be more different.

“A lot of people are influenced by the Seattle example… and they think, ‘We don’t want to end up like that, our problems are already bad,'” County Board Chair Christian Dorsey said during an Amazon discussion yesterday (Wednesday) live-streamed on the county’s Facebook page. “But some of these fundamental economics are very different. I’m not saying we’ll have no problems, but I’m pretty confident we won’t have Seattle’s problems.”

For one thing, it helps that the D.C. region is quite a bit larger than Seattle and its suburbs. Chuck Bean, the executive director of the Metropolitan Washington Council of Governments, estimates that the D.C. metro area is “about 40 percent bigger” than Seattle’s, so there’s “a lot more absorptive capacity” for the workers Amazon will bring here.

It doesn’t hurt either that Bean believes has the region has “an advanced, mature transit system that Seattle didn’t have,” giving people the ability to live a bit further away from the headquarters without necessarily relying on a car.

“Perhaps it’s a bit too mature, but we’re working on that,” Bean said, in a reference to the lengthy efforts by local leaders to get Metro working properly again.

Amazon has pledged to deliver 25,000 new jobs at its new headquarters, but officials have consistently reiterated that only a small portion will likely live in Arlington itself, and many already live elsewhere in the region. The way Dorsey sees it, the county is only likely to see about 20 percent of Amazon’s workers live in Arlington, equivalent to about 5,000 people in all.

In a county of 230,000 people or so and a broader region of millions more, he hopes that such an addition won’t be nearly as disruptive as it was in Seattle. Bean also points out that Amazon’s 25,000 jobs is just a drop in the bucket compared to the 1.1 million jobs his group believes the region will add over the next 20 years.

“Their population grew by 40 percent from when Amazon was founded to about two years ago,” Dorsey said. “That’s a tremendous amount of growth in a short period of time for any community to sustain. They’re not going to have anywhere near that impact, based on that path of growth here.”

Dorsey also notes that Amazon’s employees “earned significantly more than other Seattle workers,” especially when the company was first growing in size. Based on the tech firm’s projections, Dorsey expects that Amazon’s workers will earn “about what the typical higher wage employees in this area already earn” — as a condition of the state’s deal with Amazon, the average salary of the company’s workers needs to be at least $150,000 per year, with that amount increasing each year.

Dorsey acknowledges that there is the chance that adding more wealthy workers will drive up prices around the region, particularly for rent. But Eric Brescia, a member of Arlington’s Citizens Advisory Commission on Housing, says it’s not that simple.

“Intuitively, when you bring more high-income people in, it creates more demand to drive up prices,” Brescia said. “But the price of housing is not only just a function of what the demand is, it’s how does the supply compare to the demand.”

To demonstrate the difference, Brescia drew a comparison between how San Jose managed the explosive growth of Silicon Valley and Charlotte shepherded growth in its financial services sector.

Brescia, an economist for his day job, pointed out that Charlotte has since a 40 percent boost in jobs over the last two decades, while San Jose saw just a 17 percent bump. Nevertheless, home prices in Charlotte only rose by 18 percent in that same period, while they rose by 160 percent in San Jose — adjusted for inflation.

In his mind, the difference comes down to housing production — Charlotte and its suburbs added 400,000 new homes over the last 20 years, while San Jose managed just 100,000.

“This is an illustration that the presence of high-paying jobs does not inherently make housing unaffordable if we’re nimble enough to build housing to accommodate that,” Brescia said. “And I think this region as a whole is really going to have to be thinking of land use policy, transportation policy to determine where these homes are going to go.”

For Dorsey, who once drew headlines for proclaiming that the county should not “protect” certain neighborhoods from density, that illustrates the County Board’s challenge in the coming years.

He points out that Arlington is currently dominated by large swaths of neighborhoods with only single-family homes, particularly in the areas outside of Arlington’s Metro corridors. As county Housing Director David Cristeal noted, the majority of the homes in Arlington are apartments, but the majority of the square footage is occupied by single-family homes.

As more Amazon workers move in, Dorsey expects that officials will need to do something to confront that trend and avoid “inefficient sprawl.”

“Our community has to embrace a conversation about what it really means to grow the supply,” Dorsey said. “Our community in Arlington, and our region in general, devotes a lot of its housing to one house per lot. And if we think about equitable growth, growth that’s diverse and inclusive, that can’t be the sole way we do it.”

That could mean everything from expanding the county’s previous efforts to allow more “accessory dwelling units” on single-family lots, or encouraging the redevelopment of some single-family homes into duplexes.

But Dorsey also admitted that some more drastic changes could be necessary in terms of increasing density throughout the county. If officials don’t embrace that mindset, Brescia fears Arlington could wind up facing some of those Seattle-sized problems it hopes to avoid.

“If some more flexibility isn’t gradually allowed in more regions of the county, we’re increasingly going to be single-family neighborhoods with $2 million dollar homes versus people in very small apartments near the transit corridors, and really nothing in between,” Brescia said. “Some people get scared when you talk about those things, but the question is how to gradually grow so you don’t have that divide.”

Photo via Facebook

Morning Notes

By ARLnow.com

Spike Mendelsohn Planning New Restaurants in Crystal City — “Already in National Landing with Good Stuff Eatery and We, The Pizza, Mendelsohn has a letter of interest out for two new spaces. One will bring his Mexican taco shop already on Capitol Hill, Santa Rosa, to Virginia. Another is a new concept: fried chicken.” [Northern Virginia Magazine]

Shutdown May Fry Local Economy — “Come February — perhaps by the beginning of the month, probably the middle and definitely by the end — the financial, occupational and psychological impact of this now-record government shutdown will go from the theoretical to the very, very real.” [Washington Business Journal]

Trump Signs Shutdown Backpay Bill — President Trump has signed a bill championed by Rep. Don Beyer (D-Va.) that will provide backpay to federal employees affected by the government shutdown. Now Virginia Sens. Tim Kaine and Mark Warner are working to provide a similar guarantee for low-wage federal contractors. [Federal News Network]

JBG’s ‘Brutally Honest’ Amazon Pitch — A quote attributed to JBG Smith Chief Development Officer Kai Reynolds, talking about his pitch to Amazon’s HQ2 team: “So we literally sat down at 8 in the morning, and I started the presentation by saying ‘I’ve lived [in this region] a number of years, I had never been [to Crystal City]. While it’s better than I thought, it’s kind of a shithole.'” [Bisnow]

Snow May Disrupt Evening Commute — “The main band of snow is likely to come through during the evening and overnight hours. As the onset of snow may coincide with the evening commute, especially in our western areas, build in extra time to get home or consider leaving a little early to beat the rush. Some slick spots could develop, especially on untreated roads.” [Capital Weather Gang, Twitter]

Nearby: Attempted Kidnapping in Georgetown — “As she neared her front door about 5 p.m. Tuesday, a woman grabbed the child from behind and tried to abduct her, D.C. police said. The girl fought back and broke free. The nanny in the car screamed, and the woman ran.” [Washington Post]

View More Stories