By: Edythe Kelleher
My son and I were discussing supply and demand the morning he was to take the Social Studies Praxis exam (he wants to teach History). We used housing in the Richmond Highway Corridor for our study and drew some graphs on napkins. Here are some of the things we determined:
- In the short run, the supply of housing is inelastic, that is, units can’t be quickly built or torn down
- Also, in the short run, new amenities in the Corridor that increase its attractiveness (like adding a BRT – Bus Rapid Transit – system) make the demand curve shift upward
- As the market responds and more housing is built, the supply curve will shift upward
- Prices (rents, in this case), will reach a new equilibrium
In theory, if new housing keeps on being built to accommodate the increasing demand, rents on existing units will not go up because of the new demand. (There are other factors influencing rents, such as cost of utilities and real estate taxes.) Of course, the types of new housing must be broad-based and affordable to households at all income levels. Fairfax County has an Affordable Dwelling Unit (ADU) Ordinance and a Workforce Dwelling Unit (WDU) Policy, but it is looking at ways to generate a greater proportion of ADUs and WDUs along Richmond Highway.
Housing construction is highly subject to zoning restrictions, so simply relying on “the market” won’t work. The NAACP has the right idea with its “YIMBY” message. Building housing must be faster, easier and cheaper for developers to keep up with rising demand. An example of the opposite is Reston, where residents are protesting increased housing density around the new Silver Line Metrorail stations.
George Washington University professor Christopher Leinberger makes this point about gentrification in general: “… those low-income households—and I’m talking about households earning less than 50 percent of the metropolitan area median income—are far better off living in a revitalized, walkable urban place. Yes, the housing prices may be higher as a percentage of their household income, but the transportation costs are much lower, and transportation is the second-highest household spending category. That offsets those higher housing prices. And they have accessibility to three, four, five times more jobs than they would have if they were in a low-income drivable suburb.”
In addition, Leinberger states that the reason our desirable walkable urban places are so expensive is that not much land is zoned for this type of development. So, since converting Richmond Highway CBCs (Community Business Centers) to walkable places will increase the amount of land available for them, successful implementation of the EMBARK Plan should be a factor to lower rents in Fairfax County.