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ECONOMIC IMPACT
Summary of Report of George Mason University's Center
for Regional Analysis (CRA):
"Future Housing Supply and Demand Analysis for the
Greater Washington DC Area"
(1) The rapid expansion of the Washington region's
economic base over recent years has spawned a housing supply problem made
worse by land use policies that restrict its residential development.
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Sale and rental housing prices are increasing far
faster than household income, pricing out of the housing market not only
low but also moderate income working families. A continuation of current
trends threatens the region's economic vitality and prosperity, which are
the long-term bedrocks of this or any region's true quality of life. |
(2) Between 1996 and 2001, the Washington region generated
more jobs (367,000) than any other metro region in the county.
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Over recent decades, the region has been transformed
from a government employment center to a thriving professional and
technical services community. With those new jobs have come new job
holders and increased demand for work force housing. |
(3) The region's rapid growth, however, has spurred calls
for "quality of life" initiatives of another kind, which seek to slow growth
by constraining residential development. According to the Washington Post,
more than 625 square miles of land, mostly in Montgomery, Fairfax, Loudoun,
and Prince William Counties, are zoned to preclude typical suburban
development.
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In Fairfax alone, the 1990's saw 166,000 new jobs --
but only 56,000 new dwelling units. |
(4) Some history is useful to establish a basic fact of
economic life -- at increasing supply of jobs generates an increasing demand
for workforce housing.
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In round numbers, 1.7 million new jobs and 1.0
million new households were created in the region between 1970 and 2000.
Using more precise numbers, the ratio or new jobs to new households
created averaged 1.67. |
(5) Forecasts by local jurisdictions projected 1.5
million new jobs for the region between 2000 and 2025 -- a reasonable, even
conservative projection of some 60,000 jobs per year (a compound growth rate
of 1.5%). This is less than the 61,000 annual average achieved from 1980 to
2000 (2.3%).
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Forecasts of housing growth by the same
jurisdictions, however, project only 769,000 new housing units by 2025, an
unrealistic possibility, requiring each new household to support an
average of 1.96 new jobs. A jobs to housing ratio of 1.96 is clearly too
high given the region's historical experience. |
(6) Using a 1.60 jobs per household ratio as more
consistent with the region's experiences (and, perhaps, an optimistic ratio
given recent demographic trends) . . .
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The CRA's study projects a requirement for 944,000
new housing units by 2025 to accommodate current forecasts of job creation
in the region (i.e., 175,000 more homes than local jurisdictions are
forecasting or apparently planning for). |
(7) With an estimated housing deficit of 43,000 units
already in place as of 2000, the CRA's projected housing gap for the region
totals 218,000 by 2025.
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As soon as 2010, the gap is projected to reach
66,000. |
(8)Projections by the National Planning Association
confirm CRA findings.
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They show an even larger housing gap of 233,000
units by 2025. |
(9) The imbalance between the region's projected job
creation and the residential development needed to support it will result in
several combinations of outcomes, none of them positive.
(10) A failure to support necessary workforce housing will
result in either or all of:
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(a) higher housing prices and reduced affordability; |
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(b) accelerated development in outlying rural areas; |
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(c) longer, more congested commuting; |
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(d) a failure to achieve the region's potential job
growth. |
(11) We are faced with challenging policy trade-offs.
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Either "slow growth" land use constraints will be
loosened to afford adequate production of affordable and economically
diversified housing . . . OR . . . the region's potential economic growth
will be constrained. |
(12) Job growth is the prerequisite for economic growth
and economic growth is the prerequisite for maintaining and enhancing our
region's future quality of life -- one which provides rising household
incomes, a growing tax base to support necessary public investments for
education, health and safety and a more socially cohesive balance of housing
supply and demand.
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