Tuesday, January 05, 2010

The Competitive Landscape

click to enlarge
I had lunch with Tim Sosinski yesterday to talk about his push for “full spectrum” housing in Columbia Town Center. Tim believes that the affordable housing component of General Growths Town Center redevelopment plans does not go far enough to address the real housing needs in Howard County. He would like to see the company do more.

I like Tim. He is smart and passionate about his cause. I also agree with him that the need exists to provide housing for all segments of our population. We just disagree on how to get there.

The redevelopment program for Columbia Town Center will face some formidable competition from other area mixed used developments that are not being asked to do what he’d like GGP to do. In my opinion, if the county forces GGP to increase the proportion of affordable housing in Town Center beyond what is proposed, it will put the project at a competitive disadvantage. This project does not exist in a vacuum.

What exactly does the competitive landscape look like?

Here’s a quick summary:

Aerotropolis at BWI Thurgood Marshall Airport: A 10 million square foot development that includes Merritt Properties, Heffner Weber, Liberty Property Trust and Archon that is underway in the Stony Run area west of the airport. It will include office, retail, hotels and multifamily housing.

Arundel Preserve: A 268 mixed used development by Somerset Construction that includes 2 million square feet of office space, 250,000 square feet of retail space, 47 single family homes, 390 townhomes and 738 apartments. It is located along the Baltimore Washington Parkway near Arundel Mills mall.

Buckingham: A 32 acre mixed use development by Merritt Properties at Route 100 and Telegraph Road.

Arundel Gateway: A 300 acre mixed use development by Ribera Development and Greenberg Gibbons Commercial on Route 198 just outside Fort Meade.

Odenton Town Center: A 1,600 acre mixed used development on the east side of Fort Meade that includes office development by Capital CREAG and residential development by the Halle Companies and Stonebridge Carras.

Konterra Town Center: A 741 acre mixed use development in Laurel by Konterra Realty. This project will include 1,500,000 square feet of retail, 3,800,000 square feet of office space, and 4,500 residential units.

Maple Lawn: A 600 acre mixed use development by Greenebaum & Rose at the intersection of Route 29 and Route 216. The project will include 1,300 homes and 1.8 million square feet of commercial space.


Anonymous said...

Someone left this comment in the sun article:

I won't reveal Mr Sosinski's address but, I will tell you his home in Clarksville is assessed at $1,300,000. Sounds to me like he should excuse himself from this discussion. I challenge Mr Sosinski to come to my neighborhood in
Columbia, when he sees how hard I have to work to live next in a community where, betwenn 100 units, there are 4 convicted violent offenders, 6 convicted drug offenders, and more Section 8 from Baltimore City (where they are breking federal law at present by refusing to evict Sec 8 who are charged with crimes). And everyday I come home from a hard days work only to be surrounded by shirtless men with their underpants exposed, and panty hose on their heads standing on my street, staring at me like I'm the criminal. I'd like Mr Sosinki to have my experience, maybe then, he will rethink his position.

Sarah said...

I know I could probably scour the internet, but what is the status on these projects? Do you know?

Ugh, I dunno-- looking at these millions of SF, it feels like overbuilding again. I mean, did Maple Lawn really need to happen? I know it's too late to ask.

That being said, while these places are indeed competing, there are advantages and disadvantages to all.

As an aside-- Anon-- man, I'd love to know where that person lives. Most Sun commentators are crazy and I can't put any stock into what they say, but I can't pretend I'm not curious.

I will say that I have no problem with folks of limited income living next to me. I've done it several times and I'd do it again. I'm tired of folks generalizing people who live in "affordable housing" (whatever the definition) like they are all crazy, criminals, and/or lazily live off the system.

Bob O said...

Perhaps a naive question, but why does any place have to design in "affordable housing." I thought the whole point of the housing market was that people will migrate to housing that they can afford, and that if there is a need for people to live in a specific place, they will either be able to afford the housing there or a market for housing they can afford will open up to serve their needs.

Are we talking about something else here?

Kathy said...

WB - Thanks for the rundown on area developments. Here's an idea.... let AA county take the majority of the residential density and development from Ft. Meade.

Howard county could scale back these outlandish development requests and build within the means of its infrastructure.

Tim Sosinski said...

It is always a joy to talk to somebody who has a high level of business sophistication. Dennis Lane is among the elite of commercial leasing. From our conversation, we agree on many concepts. Dennis and I agree that there is a deficit in the housing spectrum that is a problem and that needs to be solved. We also agree that Downtown Columbia will be competing with many other locations in its retail and office offerings. Even CEO’s will drive a little distance for a lower cost lease. The commercial part of the GGP proposal is likely to be a net tax benefit to the County. We also agree that without the residential component, the office and retail uses will not be built anytime soon. GGP needs the housing in the mix to make their commercial buildings interesting and viable. Without the residential, they have a relatively low value asset. We also agree that because of unique characteristics like schools and other quality of life attributes, Howard County residential opportunities are highly valued. People do pay a premium to live here.

Where we disagree is on the ability of the public to harvest a benefit from this combination of circumstances. The residential market is not nearly as competitive as commercial offerings. Those who want to enjoy the Howard County quality of life are willing to pay extra for it. Why not let that benefit accrue to the citizens. We can easily use the energy of the market to solve the gap in the housing spectrum. We can meet the needs of our young people and retirees who now need to live elsewhere. GGP will make plenty of profit from enhanced commercial opportunities and even some profit from the residential bonus. Why not encourage the next generation of entrepreneurs to live in Howard County by requiring that the full spectrum of housing be built? Why not produce condos that are moderately priced so that our seniors can sell their houses and move to Downtown Columbia? Why not put the requirement in place now? If we do not require it when we create this kind of distinctive urban fabric, we will miss this boat for the next generation. Whoever GGP sells to will have a vested right that will be difficult to deny. There will never be a better opportunity to put a dent in this problem than today. When the next surge in construction comes to Howard County, this kind of requirement will not slow those who will rush to meet the need. Let’s do it now for our children and elders. Let's do it for ourselves.

Tim Sosinski

PZGURU said...

Mr. Sosinski - I respectfully DISAGREE with your positions and your philosophy (in general).

There are many studies that indicate that government requirements for developers to construct SUBSIDIZED "affordable housing" has contributed to the fast escalation of housing prices which actually HURTS the people the program is supposed to help. I can't recall exactly where, but I just recently read a nice report/article (maybe in TIME, or Kiplingers, or the WSJ - not sure at the moment - I will try to find it and post it).

On top of that, I take major issue with Howard County's regulations which are tailored to police, fire fighters, and teachers, as if they are the only "middle class" workers that find buying a house to be financially difficult. WHY ARE THOSE THREE PROFESSIONS SINGLED OUT FOR HELP???? Oh, maybe it could be because they are all UNIONIZED sectors to whom public officials like KEN "rat boy" ULMAN are beholden to?

Every time the government "guarantees" something to the general public it drives the cost of that something UP UP UP. Just look at the TV high def chip fiasco. Or "guaranteed college loans". Or, the biggest fiasco of them all, the housing/mortgage industry being forced to approve bogus loans or unqualified loan applicants all under the guise of "guaranteeing" home ownership. As soon as states guaranteed college loans, the cost of tuition and books at many universities jumped up at rates much faster than in previous years. Great outcome (sarcasm emphasized)!!!!

It's time for the government to get the hell out of the market and let market forces guide the market. If there's a need for low and moderate income housing, then some developer(s) will be astute enough to get involved and find a way to provide that item and make money.

People want to squawk that capitalism doesn't work. The problem is that we don't have a PURE capitalist economy in the USA. We have a quasi-capitalist system where the government INTERFERES way too often, causing problems by upsetting the balance, disturbing/influencing market trends, usually with the result of benefitting one/few companies/sectors but hurting others, and worse, hurting the general public as opposed to helping.

Anonymous said...

AA county has run amok. Isn't Rutter their DPZ director now?

Anonymous said...

PZGURU- well said.

Sarah said...

PZGURU: do howard county regs specifically cater to those positions and how are they specifically tailored to those positions and no others? just wondering. I always through police, nurses, teachers, etc were called out specifically because those are jobs that everyone can relate to as vital to communities, and can understand the need for affordable housing for. not sure. I don't know about you, but I see no problem subsidizing housing for teachers or firefighters to ensure they live within my community and not simply "as close as possible within their financial constraints." To what end is the question. i think GGP's plan is sufficient.

That being said, low-income housing developers exist due to tax credit programs. Funding development like that doesn't just pop out of some pulled-out-of-the-ass creative financing that have no incentives.

I gotta say though-- it's not like businesses haven't been whining for government help-- it's a two way street.

Anonymous said...

with all due respect, Sarah, all professions are vital to communities. Nurses, police, teachers are no better than the rest of us. They chose their profession and the pay grade, and are no more deserving of housing perks than a realtor, janitor, or hooker.

Sarah said...

Anon: let me rephrase and expand my thought then then-- I have no problem subsidizing housing so that a variety of people earning different incomes are able to live there, whether they are teacher or janitor or realtor because I do find value in socio-economic diversity down to the neighborhood level. I didn't necessarily mean to pass judgement on a career path. And you're right-- people choose their careers and should live with what they have chosen. But we can't all be doctors and laywers.

Again, the question is to what end.

We might just agree to disagree on that one.

PZGURU said...

Sarah - are you some kind of elitist??? How is a teacher, or police officer, or firefighter any more important than a waiter, a store cashier, and gasoline station attendant, or any other job for that matter???? Those professions are only more "important" to politicians, scumbags like Ken Ulman, who need their guaranteed voting block to get elected and re-elected.

Please read the CONSTITUTION and tell me whether you think it's legal or even ethical for the government to single out certain voting blocks for preferential treatment!

And on top of that, teachers, firefighters, and police officers make MUCH BETTER salaries than many waiters, or grocery store cashiers, and lots of other workers so I hardly see that they are hard-pressed or financially strapped and in need of help. If they don't like the salary they make, they can chose a different profession. Nobody is forcing them to stay in their job.

You are correct about the tax incentives for developers to do low income housing, and that is exactly the problem I have with it. The government gets the money to pay for these ill-concocted programs from tax revenue, which comes from (drum roll please) THE REST OF US!!!! The government keeps taking more and more money from hard working average middle class people, it's no wonder more and more people are "falling into hard times". The GOVERNMENT IS CAUSING THIS.

I believe in helping people through donations that I VOLUNTEER to give if I believe it's a good and worthy cause that will actually benefit people - that's called CHARITY. When the government TAKES people's money by FORCE, even if they can't afford it, to fund some program that many people don't believe is worthy, that's called TYRRANY/SOCIALISM. I don't believe in those.

Sarah said...

Okay, let me re-ask my question. What in the regs specifically calls out those careers over the others? That's my question! It was a question! Relax. You still didn't answer it.

I'm not familiar with the regs, hence why I asked a question. Read my post afterwards-- I don't think nurses or teachers or whatever are more important, I just want to know if it says something like "only teachers and firefighters" vs. gas station attendant or whatever.

PZGURU said...

Sarah - you must have been posting your second comment when I was typing my last comment otherwise I would have revised my comment.

Here is wording directly from the Dept of Housing and Community Development regarding MIHU's: "An individual wishing to purchase or rent an MIHU must fill out an application form during one of four enrollment periods held throughout the year. The application includes information about the applicant’s income, assets, household size and whether the applicant wishes to rent or purchase. In addition, an applicant may qualify for one or more purchasing preferences, such as: a first-time homebuyer, living or working in Howard County, or employed by County government, the school system, or a nonprofit organization."

In addition, I know that when legislation has come up that deals with MIHU's, there has been a pattern of singling out teachers, FF's, and police officers for special treatment.

I'd have to double check it (when I have time) to see if the legislation for Town Center singles those groups out for MIHU's or not. I believe it does, or at least it may have when the legislation was first introduced.

And just so you know, I'm not yelling at you when I capitalize certain words or us exclamation points. I just like to emphasize certain points!!! :)

Trevor said...

I think in this discussion of what shall come of Downtown Columbia, people are forgetting that there is TONS of "affordable" housing in the rest of Columbia. I just looked on Craigslist, and there are dozens of places for rent all over Columbia. You can get a ONE bedroom place for between $750 and 1200 a month. There is a two bedroom condo available right near the mall for 1100 a month(perfect for a teacher, fire or police person, if you ask me). You want a four bedroom house for your family? Well, there is one available for $1600 a month. There is ALREADY PLENTY of affordable housing in Columbia for those of lesser means.

Tim Sosinsky argues that we should "encourage the next generation of entrepreneurs to live in Howard County by requiring that the full spectrum of housing be built." I argue, that the next generation of entrepreneurs is already living in Howard County, and does not need any "full spectrum" housing built for them in Downtown Columbia. I am opening a brand new business in a few weeks. I live in Columbia, in housing that is affordable for me. Did I buy a mansion? No. I purchased a reasonable townhouse in River Hill. Unfortunately, there is nowhere for an entrepreneur to start a business in Columbia. As I said before the County Council, I truly wanted to start my business in Howard County. I did detailed demographic research, and found that growth in Howard County is stagnant. Like any new business owner, I want to open my business in an area of growth. I found an area of growth in Anne Arundel County (Odenton), and that is where I will be opening up. I will be helping the community in Anne Arundel County, paying taxes and getting permits there, hiring employees there and helping the Anne Arundel economy. I wish I could have opened in Howard County. We need to get the Downtown Columbia plan approved and built, so potential business owners will start their businesses here. In order to get the area built up, we need to get as many government restrictions off the backs of GGP. I believe one of the most ominous restrictions is the potential "full spectrum housing" requirements.

I don't see any need, desire or purpose for more low income housing in Columbia. If you claim that Columbia needs to be socially diverse, I argue that Columbia already is. This will not change. In fact, if downtown Columbia is a success, people of all income levels will congregate there to shop, work and play.

We need to let GGP do what it does best, build successful communities and amenities. I truly hope the Howard County Government allows GGP to do this, without distractions from "full spectrum housing" advocates.

Anonymous said...

Trevor- you bring a very sensible viewpoint that seems to get little attention among the most vocal in the community.

Bob O said...

Okay, I'm convinced. We don't need to legislate or zone affordable housing into the Howard County or Columbia development plan.

I mean, if teachers, policemen, or janitors can't afford to live in Howard County...I guess that means that we are just not paying them enough?

(As a fomer teacher who moved to the tech sector so I could support my family, I can give a biased answer: "Yes.")

Bob O said...

Solution: Let's pay Howard County teachers and cops more. DOH! What a concept!

Of course, we have to expect them to do more.

Sarah said...

PZGURU: Thank you! I agree with you-- that is beyond stupid.

Bob O: I totally agree with you. Rather that subsidizing housing, the county should pay the folks enough to afford their own housing.

Anonymous said...

People, People! Stop giving away my tax dollars to union workers who are at full tilt less than half the year!

Police, yes, I can see that. But forget the remainder!