September 24, 2015

Eyes all sticking like honey on bees

The comments thread to this Greater Greater Washington post about the DC area's affordable housing crisis is amazing for the large number of people it features arguing that there can't be a crisis because there are lots of cheap houses to be found in Prince George's County. There's a lot of ugly ideas and bad thinking behind some of these assertions, but it's also just factually wrong. The idea that people would think of PG County as a bastion of affordability shows how far we've fallen.

PG County is rich

The thing about Prince George's County is that while it's clearly the least affluent of the four suburban counties (PG & Montgomery in Maryland, and Arlington and Fairfax in Virginia) that ring the District of Columbia, it's actually pretty rich. Median household income in PG County is $73,623 per year which is exactly average for Maryland and way above the national median of $53,046.

Along those same lines, while the average owner-occupied house in PG County is cheaper than in the other DC suburbs, it's well above the national average. Indeed, the PG:USA ratio for house prices is even higher than the ratio for incomes.

If the bastion of affordability in your region is an area where both incomes are a bit less than 50 percent above the national average and house prices are a bit more than 50 percent above the national average, then your region has a problem. PG County really is this region's affordable holdout. But it's not very affordable!


To unleash investment, unleash investment

There is also a version of the "go to PG County" argument that I most often here related to DC proper's poorer neighborhoods, which holds that unaffordability is a useful economic development strategy. If you can't build new houses in Dupont Circle or AU Park, then new investment will pour into Fort Dupont and Kingman Park. But if the premises underlying this argument are correct, the investment would also pour if we upzoned in the fancy neighborhoods. As expensive detached homes are replaced with townhouses and townhouses are replaced with high-rises, people who have a strong preference for detached homes or townhouses will pour into cheaper neighborhoods.

Either way, the investment happens. But in the pro-development scenario the total population of the city is higher, the citywide ratio of house prices to incomes is lower, and the city's tax base is much larger -- allowing for improved city services and a better overall business climate.

The fallacy is in assuming there is a fixed quantity of investment prepared to enter DC. In fact, if we allow for more investment then more investment will happen -- everywhere -- and the whole city will be better off.

Song of the Day

Wale's "Chillin'" has to be the most famous pop cultural reference to PG County out there.