No Sign of Stopping?

by Art Rodgers

During the first quarter of this year 129 permits were issued in DC totaling an astounding 1,285 units of new housing construction. About 115 of these units (9 percent) were single-family. Annualized, it could mean DC might start construction on 5,140 units of housing in 2014! The last four quarters totaled almost 4,000 units. Interestingly, DC currently represents about 13 percent of the regional share of housing units; but DC’s share of new units in 2014 (based on Census data through February only) represents about 20 percent of the region’s new construction for the year so far. The chart below shows how DC’s regional capture rate of new construction has changed since the financial meltdown in 2007. Just for kicks, it includes a simple, long-term trend line1 that suggests an increasing share of regional growth in the short run before flattening out.

Source:  US Census; 2014* Year to date February.

Source: US Census; 2014* Year to date February.

Is the change in demand for urban vs suburban living that great (look here and here)? Is the trend line conservative or optimistic? Will DC’s increasing prices narrow the range of households who can afford it and therefore slow demand or shift demand to lower cost neighborhoods? Will Millennial demand convert to demand for family housing? If so when and where?

Oh wait, there is more. Based on an incomplete review of building permit data from DCRA, another 94 units were issued permits in the first quarter as a result of conversion to flats or changes in existing multi-unit buildings. At the same time only nine units were lost due to razes or consolidation within existing buildings.

[1] For data geeks it uses a logarithmic curve based on percent share of production since 1996 when DC had zero new construction units.

Home Prices: DC & the Region

By Art Rodgers

The recent release of the Case-Shiller Home Price Indices shows that housing prices in the Washington DC Metropolitan Statistical Area (MSA) increased by 9.2 percent over the past year. DC residents might be interested to know there is a similar index published by both Freddie Mac and the Federal Housing Finance Agency (FHFA) where you can compare the change in DC prices to the rest of the MSA. The chart below shows the change in the Freddie Mac Home Price Index (FMHPI) for both DC and the rest of the MSA since December 2000.

Source: Freddie Mac, Home Price Index 2014.

Source: Freddie Mac, Home Price Index 2014.

The chart shows a comparable rise in prices through mid-2006 after which prices across the region start to decline whereas the District’s prices simply stabilize, and then show a modest decline after 2007.

Fast forward to the past year where the MSA’s prices increased 7.9 percent (similar to the Case-Shiller 9.2 percent increase), but the District’s index increased 13.5 percent. Even more astounding, while the prices in the MSA over the past several months seem to have stabilized, increases in the District’s prices appear to be accelerating. The monthly year over year change at the end of 2013 for the District was 13.5 percent, significantly higher than the 9.6 percent change at the end of 2012.

There are some basic constraints to the FMHPI to be aware of:

  • It only includes single family homes of 1-4 units, but no condos.  The long run supply of single-family homes in DC is constrained compared to the rest of the region.
  • Unlike the Case-Shiller, which uses all sales, the FMHPI only uses Freddie Mac and Fannie Mae loan data, which have a lending limit of $625,000 on one unit properties.  So more expensive homes which may not be appreciating as fast are less likely to be included in the data.  This means that prices for all homes might be rising more slowly than the index would indicate; but
  • Like the Case-Shiller, the FMHPI is built using paired resales of the same properties over time.  It is therefore possible that a home bought 10 years ago and resold recently has appreciated so much as to make the buyer less likely or unable to use Freddie Mac or Fannie Mae loan products and therefore the resale may not be included.  This would mean home prices might be rising even faster.

Is it a bike? Is it a car? Neither? Both?

By Stephen Gyor

I was standing outside of my office the other day, and I spotted an odd, egg-shaped vehicle — it looked part bicycle, part Car2Go, and included solar panels on the roof. Quite strange!

DSCN4538

I did a bit of research and apparently this egg-shaped tricycle, called the ELF by its manufacturer, Organic Transit, can be powered by an electric engine when needed or by using pedals just like a bicycle. According to Organic Transit, “The spacious interior keeps you out of the elements and in view of other drivers. [You can] get power through the solar panels or simply charge the batteries by plugging into a socket. ” The ELF’s exterior also includes lights, signals, and a mirror.

According to Organic Transit, the top allowable speed using the electric motor only is 20 mph on a flat surface. ELF owners can travel faster by pedaling — some can get up to 30 mph — but the ELF is designed for use under 30 mph. The ELF is relatively lightweight (100 lbs.) and is made mostly of recycled plastic and aluminum.

DSCN4541

A vehicle like the ELF prompts a ton of questions. Could the ELF use bike lanes or car lanes or both? Should it be parked in bike spaces or car spaces? The ELF looks rather large to park in a bike space (not much smaller than the Car2Go parked nearby), and yet the one I saw was parked on the sidewalk.

So what do you think about the ELF? Is this type of hybrid human/solar powered vehicle the wave of the future?

Interim Director for OP Appointed

Rosalynn Hughey photo 1Deputy Mayor for Planning and Economic Development Victor Hoskins has appointed Rosalynn Hughey as interim Director of the D.C. Office of Planning (OP) effective February 24, 2014. Harriet Tregoning is resigning as Director effective February 21, 2014 to join the U.S. Department of Housing and Urban Development. Prior to her appointment Hughey served as OP’s Deputy Director of Citywide and Neighborhood Planning.  Hughey joined the Office of Planning in 2000 and has over 25 years’ experience in urban planning.

Are Children an Endangered Species in Urban Areas?

By Art Rodgers

The classic problem of many science fields is you can only weigh something if you stop it, or you can determine where it’s going, but then you can’t weigh it.  Fortunately, this is less of a problem with demographic data where you can measure where it’s been and measure where it is now and at least forecast where it’s going.  Why is it then many fail to take advantage of this? Last month an article has made the claim that children are disappearing from urban areas and others have picked up on it.  The assertion is based on data from one point in time; the 2010 US Census.  Their conclusion?  Cities are unfriendly toward children and what is more, cities are not doing enough about it.

First, let’s expand the data to more than a single year.  Nationally children are becoming a smaller percentage of the population, from 24.0 percent in 2010 to 23.5 percent in 2012; so it is only natural that dense urban areas reflect that trend as well.  But wait!  Half of the cities listed below didn’t!  They actually increased their percentage of children, and even San Francisco with its astronomical housing prices was able to maintain its current percentage.

Population Under 18 years

  United States

24.0%

23.5%

Rank Municipality

2010 Census

2012 ACS 1-yr

1 San Francisco city, CA

107,524 (13.4%)

13.4%

2 Seattle city, WA

93,513 (15.4%)

15.3%

3 Pittsburgh city, PA

49,799 (16.3%)

16.1%

4 Washington City, DC

100,815 (16.8%)

17.3%

5 Boston city, MA

103,710 (16.8%)

17.3%

6 Urban Honolulu CDP, HI

58,727 (17.4%)

17.3%

7 Miami city, FL

73,446 (18.4%)

18.8%

8 Portland city, OR

111,523 (19.1%)

19.2%

9 Atlanta city, GA

81,410 (19.4%)

18.4%

10 Minneapolis city, MN

77,204 (20.2%)

20.7%

Source: U.S. Census Bureau American Community Survey (ACS)

Second, it’s true that two data points do not a trend make, so let’s investigate why this percentage of children is increasing in these cities and estimate if it will continue.  I use Washington, DC as an example.  In DC’s case, between 2000 and 2010 it was one of the top cities for attracting recent college graduates due to the combination of growing tech and federal job opportunities.  This is probably true for other cities where tech, finance and other industries were growing.  Well it’s only natural that these young professionals who migrated as singles met, hooked up and guess what happened next.

What has changed in this age old story?  In the past, those new young families moved to the suburbs largely because of the poorly performing urban schools.  In the case of the District of Columbia, Boston and a few other cities, what may be responsible for reversing this trend is the move toward universal free public pre-school for three and four year olds.  Not only does this save young professional families upwards of $20,000 per year per kid in daycare costs, it introduces them to the public/charter school system, which helps to change their perception of the schools.  This has created a wave of middle-class children diversifying the public schools while their parents have networked and brought their collective political clout to improve the schools even further.

The private sector in DC has also seen the shift in the market and responded by adding baby happy hours and children’s cultural and athletic opportunities to go along with all the other great children’s activities that are available in DC.

The change in the percent of households with children under the age of 18 has also reflected the shift, moving from 19.3 percent in 2010 to 20.3 percent in 2012.  The DC Office of Planning (OP) believes the shift is strong enough and sustainable that their official ten-year forecast through 2020 includes the number of children under the age of 18 increasing by as much as 50,000.  This would push the number of households with children to approximately 25.0 or 26.0 percent by 2022, but only require about 20% of single-family housing to flip from older/childless households to these new families.

The District’s housing market has also been impacted.  According to Zillow.com, over the past two years prices have grown three times as fast per year for three bedroom units (18 percent per year) as for 1-bedroom units (5 percent per year).  DC’s housing is already very expensive, and many single-family row houses are being split into smaller units for the large numbers of singles, but the $20,000 savings in daycare translates into some serious purchasing power for those who have the means to leverage it.  This of course has the potential to exacerbate the displacement of lower income families in many of the District’s neighborhoods, but the city has also embarked on an ambitious goal of 10,000 new affordable units by 2020 and recently dedicated $187 million dollars for affordable housing to reach that goal.

Urban schools and housing costs certainly make it challenging to raise a family in a city, and cities can do more to make it easier, but I can personally attest through my investigation of the data and my own experiences as an urban parent that, at best, these recent blogs see the glass half full.  Time will tell, but it certainly looks like many cities, including Washington, DC, are setting the table for families with children by improving public and charter school performance; offering universal pre-kindergarten, revitalized public libraries, schools, playgrounds, parks and recreation centers; providing increasingly convenient neighborhoods throughout the city with services and retail in most communities; and creating lots of transportation choices that help families access all the city has to offer.

Art Rodgers is the Senior Housing Planner at the Office of Planning. The opinions expressed in this post belong solely to Art Rodgers and should not be construed as the official opinion of the DC Office of Planning.

From OPinions Blog Post to Panel Discussion

By Tanya Stern

Pedaling Professionally moderator and OP Ward 4 Planner Malaika Abernathy and panelists Delores Simmons, Harriet Tregoning, Director of the Office of Planning, Keya Chatterjee, and Elizabeth Lyttleton. Photo: Washington Area Bicyclist Association

Pedaling Professionally moderator and OP Community Planner Malaika Abernathy and panelists Delores Simmons, Harriet Tregoning, Director of the Office of Planning, Keya Chatterjee, and Elizabeth Lyttleton. Photo: Washington Area Bicyclist Association

OP staffer Malaika Abernathy wrote a post for OPinions in May on the challenges of biking to work and maintaining a professional appearance. Malaika’s post was instantly one of the most popular OPinions posts to date, shared by many in the DC biking community, particularly by other women who bike regularly.  The post garnered so much interest it spawned a panel event on June 26th, “Pedaling Professionally,” sponsored by Black Women Bike DC, Capital Spokeswomen, and WABA’s Women & Bicycles Program.  Malaika served as the moderator of a panel of professional DC women who bike to work regularly, including DC Office of Planning Director Harriet Tregoning.

Check out WABA’s blog for more details from the event, including photos and tweets from the discussion.

Statistics Aren’t Lies…Aren’t They?

By Joy Phillips

As you may or may not know, 2013 marks the celebration of the International Year of Statistics, coined “Statistics2013” – a celebration to increase public awareness of the power and impact of statistics on all aspects of society. With that said, I could not help but bring to memory the phrase “Lies, d***** lies, and statistics,” which is claimed to have originated in England in the 19th century, but made popular in America by Mark Twain in the 20th century. The phrase describes the persuasive power of numbers to support an argument. But wait: is it fair to refer to statistics as the highest form of lying under any circumstance?

First, let’s define statistics.  In Gerald Hahn and Necip Doganaksoy’s book A Career in Statistics: Beyond the Numbers, the definitions include these parts:

  1. The science of learning from or making sense out of data;
  2. The theory and methods of extracting information from observational data; and
  3. The art of telling a story with numerical data.

What grabs my attention is that statistics is defined as both a science and an art. Can statistics be both? Is this the source of confusion that leads ultimately to some people attributing statistics to all lies? For statistics to be a science, it must follow some standard and proven methodology to arrive at its conclusions.  For it to be an art, it must lend itself to some notion of manual skill, intellectual manipulation, or personal expression. My belief is that while statistics can be both a science and an art, it cannot be both at the same time.  The data is generated first using a scientific process (can be as simple as counting), then it can become an art when it is subjected to human interpretation. Human interpretation can be regarded as a lie only if others know the truth lies elsewhere, and the person giving the interpretation is aware of that.

Case in point: For the District of Columbia, the U.S. Census Bureau has multiple 2010 population numbers: 601,723 (Census 2010); 604,453 (American Community Survey [ACS] 2010 1-year data); and 604,912 (2010 population estimate). Which one is the true population number? The decennial Census, last held in 2010, is a count of the population at a specific point in time. ACS 1-year data is a sample of the population over a twelve-month period from January to December. The population estimate for a particular year is based on administrative data such as births, deaths and migration. The average person will not know the intricacies of the Census Bureau’s methodology and may be forced to conclude that none of these numbers are correct or that they are all wrong (or a lie). Scientifically, it can be argued that each is correct based on the method applied. Artfully, each number is subject to its own interpretation based on the information known or assumed in its derivation.

From my viewpoint, statistical interpretation is such that regardless of the issue or argument, people usually find a number that can be used to support it or they find another number that they believe should be used instead. Does this mean that statistics is a lie? Certainly not! However, for some, the jury is still out. Where do you stand?

Joy Phillips is the Associate Director of the State Data Center, OP