Fiscal Impacts of Transit-Oriented Development Projects · Baltimore-Washington, D.C. metropolitan...

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Fiscal Impacts of Transit-Oriented Development Projects

Baltimore

December 2016

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Table of ContentsIntroduction...................................................................................................................3

TOD: ULI Best Practices..................................................................................................4

Research: Do TODs Cost More for Cities and Counties?................................................5

TOD Case-Studies Project Profiles ................................................................................6

TOD Projects Produce More Revenue for Cities and Counties.......................................9

Regionwide Impacts.......................................................................................................11

General Characteristics of TOD versus nonTOD Projects..........................................13

Conclusions....................................................................................................16

Future Research............................................................................................................17

Report Author DeanD.Bellas,PhD,President,UrbanAnalytics,Inc. Alexandria,Virginia(www.UrbanAnalytics.com)

Report Editor KathleenMcCormick,Principal,FountainheadCommunications,LLC

Thank you to the following individuals who provided project dataBradCoker,TheBozzutoGroupMarkFranceski,TheBozzutoGroupAnthonyWolfGreenberg,TheJBGCompaniesSamanthaRoser,TheJBGCompaniesRebeccaE.Snyder,InsightPropertyGroup,LLCKeithCorriveau,DOLBEN

TOD Product Council LeadershipJamesPalmer,Associate,EDSA,Inc.(ULIBaltimore)MicheleL.Whelley,Principal,M.L.WhelleyConsulting,LLC(ULIBaltimore)DavidKitchens,Principal,CooperCarry(ULIWashington)

District Council LeadershipBobYoungentob,President,EYAandChair,ULIWashingtonKimberlyA.Clark,ExecutiveVicePresident,BaltimoreDevelopmentCouncilandChair,ULIBaltimore

ULI District Council StaffLisaW.Rother,ExecutiveDirector,ULIWashingtonLisaNorris,Coordinator,ULIBaltimore

Graphic Design KellyAnnis,Owner,BranchCommunications

Photo Credits: PhotoscourtesyofWMATA;MetrowayphotobyDanMalouff.

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Transit-orienteddevelopment(TOD)isaresponsiblefiscalchoiceforlocalgovernmentsandcanactuallysavelocalgovernmentsmoney,asdetailedinFiscalImpactsofTransit-OrientedDevelopment(TOD)Projects.Thisreport,basedonresearchundertakenbytheBaltimore-Washington,D.C.Transit-OrientedDevelopment(TOD)ProductCouncil,waspreparedbyDr.DeanBellas,presidentofUrbanAnalyticsandamemberoftheTODproductcouncil.TheanalysisfoundthatTODnotonly“paysitsownway”butalsosubsidizesnonTODdevelopmentincitiesandcounties.

Introduction

Thisreport,basedonastudyofnearly10,000TODandnonTODapartmentunitslocatedwithintheBaltimore-Washington,D.C.metropolitanregion,showsthatlocalgovernmentsreapsubstantialfiscalbenefitsfromtransit-orienteddevelopment,includinghighernettaxrevenuesandlowerimpactsonpublicservicesfrompeoplewholiveneartransit.ThreeTODcasestudyprojectswerelocatedinclose-insuburbsintheregion,andonewaslocatedintheCityofBaltimore’sdowntowncore.

TheBaltimore-Washington,D.C.TODProductCouncildecidedtoundertakethisresearchandfiscalanalysisinresponsetooften-statedoppositionintheBaltimore-Washington,D.C.metroregiontothedevelopmentofmultifamilyapartmentsandcondominiumsprojectsnearnewtransitstops.Opponentsgenerallyopposethelevelofdensitytheseprojectsarepermittedonthegroundsthatincreaseddensitywillplaceagreaterburdenonpublicservicessuchaspublicschools.Thissentiment,alsoheardinotherregionsacrosstheU.S.,isdirectlyoppositetoULI’sresponsibledevelopmentprinciples,whichencouragegreaterhousingdensityintransit-orienteddevelopmenttoachieveavarietyofenvironmental,health,andsocialobjectives.

Transit Oriented Development (TOD) Transit-orienteddevelopmentisaplanningapproachthatcallsforhigh-density,mixed-usebusiness/neighborhoodcenterstobeclusteredaroundtransitstationsandcorridors.TODisconsidereda“smartgrowth”strategybecauseitprovidesasolutiontotheissueofwheregrowthshouldoccurfromaregionalsustainabilityperspective,anditcoordinateslanduseandtransportationsobothlandandinfrastructureareusedefficiently.TODisdesignedtomaximizeaccesstopublictransitandoftenincorporatesamenitiestoencourageridership.ATODneighborhoodtypicallyhasacenterwithtransitaccesssuchasatrain,metrostation,tram,orbusstop.Atransithubmayhavemultiplemodes.TODneighborhoodstypicallyarelocatedwithinaradiusofone-quartertoone-halfmile(400to800meters)fromastationorstop,adistancethatencouragestransituserstowalkorbiketotransit.Locatingthegreatestdensityofhousingwithinthisradiusprovidesasolutionto“thelastmile”problemaswellasenvironmentalandhealthbenefitsbyreducingtheneedtodrive

totransit.

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ULIpromotesthecloseproximityandconcentrationneartransitofmultifamilyhousing,alongwithofficeandretailuses,asabestpracticeandahighestandbestuseofurbanlandandinfrastructure.Buildingaroundtransithubslinkspeopleofallagesandabilitiesmoredirectlywithjobs,schools,andservices,andreducesthenumberofcarsontheroadandresultingtrafficcongestion.Locatinggreaterdensityofhousingneartransitreducestheimpactsonlocalcommunityservicesonaper-householdbasiswhileimprovingairqualityandboostingnetlocalandstatetaxrevenues.

Transituserswholiveneartransitstationsalsobenefitfromhealthierlifestyles--theyaresignificantlymorelikelytowalkorbiketotakeatrainorbusratherthandrive,andthisincreasedphysicalactivityhelpsreducetheriskofobesity,diabetes,heartdisease,andotherchronicdiseases.Residentswhodon’tneedtodriveandmaintainacaralsobenefitfinanciallyfrommoredisposableincome,andthuscanspendmoreonhousing,food,goods,andservices.

ThisreportpresentsthefiscalimpactoffourTODcasestudyprojectsonthecities,counties,andstatesinwhichtheseprojectsarelocated,aswellasthesocio-economiccharacteristicsofTODandnonTODapartmentunitsintheBaltimore-Washington,D.C.metropolitanregion.

TOD: ULI Best Practice

Key Findings: TODHousingPaysItsOwnWay—andSubsidizesOtherResidentialDevelopment

• TheTODprojectsanalyzedgeneratedbetween$1.13and$2.20intaxandnontaxrevenuesfortheirrespectivejurisdictionsforevery$1inpublicservicesprovidedtotheirresidentsandemployees.

• TODdevelopmentnotonlypaysitsownway,italsosubsidizescityandcountyservicesforexistingnonTODresidentialdevelopment.

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TODopponentsintheBaltimore-WashingtonD.C.metroregionandnationwideclaimthatTODprojectsposeabiggerfiscalburdenonthebudgetsoflocaljurisdictionsthannonTODprojects.TODprojectstypicallyaredesignedtobehigher-densitytouseurbanlandmoreefficiently.TheargumentagainstthemholdsthatincreasingthetotalpopulationonasitewithaTODprojectcausesagreaternetfiscalburdenordeficitforthejurisdiction’sbudget,comparedtoatraditionalnonTODprojectwithlowertotalpopulationdensity.

OpponentsofTODprojectsgenerallyhavethreemajorconcernsaboutTODhousingdevelopment:

1. theycontainmoreunitsandwilladdmorepublic-school-agestudents,thuscreatingabiggerfiscalburdenforthelocalpublicschoolsystem;

2. theywillincreasedemandforandthusincreasethefiscalburdenonlocalpublicsafetydepartments,whichprovidepolice/sheriff,fire,andemergencymedicalservices;and

3. theywillposelargerfiscalburdensrelatedtotheoverallcostsofprovidingpublicservicesfor

peoplelivingintheseprojects.

MethodologyUrbanAnalyticscollecteddataon42TODandnonTODprojectscomprising9,546apartmentslocatedinclose-inurban-suburbanareasinArlingtonandFairfaxcountiesinVirginiaandinMontgomeryCounty,Maryland.ThefirmthenselectedfourTODprojectsforanin-depthfiscalimpactanalysis.ThecasestudyprojectswerelocatedinFairfaxCounty,VirginiaandinthecitiesofBaltimoreandRockville(BaltimoreandMontgomerycounties,respectively)aswellasinsuburbanAnneArundelCounty,Maryland.

BoththeTODandthenonTODapartmentsanalyzedreflectedthefullrangeofbuildingclasses(ClassA,B,andC).All42TODandnonTODapartmentbuildingsanalyzedhadatleast50unitsperbuilding.

Research: Do TODs Cost More for Cities and Counties?

TheVirginiaandMarylandcountiesselectedforthisreportoffera“fiscalsnapshot”ofTODprojectsincountieswithsimilarrevenueandexpenditurecategoriesbutverydifferentrevenueandoperatingbudgets.Residentsandworkersinthesecountiesreceivesimilarpublicservices,thoughwhattheypayfortheseservicesintaxesandhowmuchtheyactuallyreceiveinservicescanbequitedifferent.ThispatternistypicalacrossallcountiesandcitiesintheUnitedStates.Thecountiesanalyzedallprovideresidentsthesamebasicpublicservices,withsomeminortechnicaldifferencesinthewaypublicrevenuesarecollected.Thecostsofprovidingtheseservices,however,varyamongthecounties.

Fiscal Snapshot of TOD Projects

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Thefourcase-studyTODprojectseachhadbetween235and275apartments,andallwereClassAbuildingslocatedwithinone-halfmileofatransitstation.

UrbanAnalyticshadtwoobjectives:1)MeasurethecostforpublicservicesthatresidentsandworkersintheTODprojectsrequiredfromcitiesandcounties’generalfundoperatingaccounts,and2)measuretherevenuesgeneratedforcitiesandcountiesbyresidentsandworkersoftheselectedTODcasestudyprojects.TheanalysisestimatedthetypeanddollaramountofnewtaxrevenuestheTODdevelopmentprojectsgeneratedatfullbuild-outandoccupancywithinthe2014fiscalyear.ItalsoestimatedexpendituresrequiredtoprovidepublicservicestotheTODprojectsinfiscalyear2014.

Estimated ExpendituresEstimatedexpendituresforpublicservicesinmostofthejurisdictionstypicallyincluded,butwerenotlimitedto:generalgovernmentadministration,judicialadministration,planningandzoning,publicsafety,publicworks,healthandwelfare,communitydevelopment,parks,recreation,culture,andpublicschooleducation.

Estimated RevenuesInmostjurisdictionsintheBaltimore-Washington,D.C.metroregion,revenuesmayincludebutarenotlimitedto:realestate,personalproperty,andsalestaxes(eitherpaiddirectlytothejurisdictionorreceivedthroughintergovernmentaltransfersfromthestate);utilitiesorconsumertaxes;transientoccupancytaxes;revenuesfromlicenses,fees,permits,fines,forfeitures,andchargesforservices;miscellaneousandotherlocaltaxes;andvariousintergovernmentaltransfersintheformofrevenuesharingtothejurisdictionfromthefederalgovernmentandthestate.

ThefourTODcasestudyprojectsselectedforanalysisallwereClass-Abuildingslocatedwithinone-halfmileofatransitstation.Eachhadbetween235and275apartments.Theanalysisusedaverageassessedrealestatevaluesperunitandaveragehouseholdincomesperunit,solowerhouseholdincomesfromanymoderatelypriceddwellingunits(MPUDs)wereoffsetbyhigherhouseholdincomesinmarket-rateunits.Inmultifamilybuildings,onlyonerealestatetaxbillisassessedforallunitsinthebuilding,regardlessofwhethertheyarerentedasmarket-rateorasMPDUs.

TOD Case-Study Project Profiles

A fiscal impact analysis estimates the type and dollar amount of new tax revenues generated by a new or existing development project at full build-out and occupancy and the estimated expenditures required to provide public services to the existing or new community.

Fiscal Impact Analysis

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• Sizeofapartmentbuilding:240units

• Location:one-halfmilefromtheHuntingtonMetrorailstation

• Location:withinTODneighborhoodthatencourageswalkingtothestationandpublicbuses

• Averageassessedrealestatevalueperapartment:$250,000

• Averagehouseholdsize:1.56peopleor42percentlessthantheaveragehouseholdsizeof2.68peopleforrenter-occupiedhousingunitsinFairfaxCounty(2010Census)

• Averageschool-agechildrenperunit:0.07or85percentfewerthantheaverage0.45perhousingunitacrossallhousinginFairfaxCountyforschoolyear2013-2014

• Meanaveragehouseholdincome:$88,955perunit

• Retailspace:None

• Revenuesgeneratedfromtaxandnontaxsources:$1,117,400

• CosttoFairfaxCountyforservicesfortheproject’sresidents:$752,454

• Totalestimatednetannualfiscalbenefitforthecounty:$364,946

The Shelby, Fairfax County, Virginia

The Shelby in FY 2014 generated an estimated $1.49 in tax and nontax revenues for Fairfax County for every $1 the county spent on public services for the project’s residents.

TOD Case-Study Project Profile

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• Location:one-quartermilefromtheTwinbrookMetrorailstation


• Averagehouseholdsize:1.54peopleor33percentlessthantheaveragehouseholdof2.31peopleforrenter-occupiedhousinginRockville(2010Census)

• Averagenumberofschool-agechildrenperunit:0.06or86percentfewerthantheaverage0.42studentsperhouseholdacrossallhousinginMontgomeryCountyforschoolyear2013-2014

• Averagehouseholdincome:Notavailable

• Retailspace:14,800squarefeet,supporting33full-timeequivalentjobs

• Revenuesgeneratedfromtaxandnontaxsources:$388,817

• CosttoCityofRockvilleforservicesfortheproject’sresidentsandemployees:$342,949

• Totalestimatednetannualfiscalbenefitforthecity:$45,868

The Alaire in FY 2014 generated an estimated $1.13 in tax and nontax revenues for the City of Rockville for every $1 the city spent on public services for the project’s residents and employees.

The Alaire, City of Rockville, Maryland

TOD

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The Fitzgerald, City of Baltimore, Maryland

The Fitzgerald in FY 2013 generated an estimated $2.20 in tax and nontax city revenues for the City of Baltimore for every $1 the city spent on public services for the project’s residents and employees.


• Location:nexttotheMt.RoyalAvenueLightRailStationand0.4milesfromPennStation/Amtrak


• Averagehouseholdsize:1.25peopleor46percentlessthantheaveragehouseholdsizeof2.31peopleperunitforrenter-occupiedhousinginthecity(2010Census)

• Averagenumberofschool-agechildrenperunit:0.06or81percentfewerthantheaverage0.32forallhousinginthecityforschoolyear2012-2013

• Averagehouseholdincome:Notavailable


• Revenuesgeneratedfromtaxandnontaxsources:$1,726,045

• CosttheCityofBaltimoreforservicesfortheproject’sresidentsandemployees:$784,992

• Totalestimatednetannualfiscalbenefit:$941,053

TOD Case-Study Project Profile

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The Village at Odenton Station, Anne Arundel County, Maryland

The Village at Odenton Station in FY 2014 generated an estimated $1.24 in tax and nontax revenues for Anne Arundel County for every $1 in public services the county spent on public services for the project’s residents and employees.


• Location:nexttotheOdentonMARCRailStation


• Averagehouseholdsize:1.70peopleor32percentlessthantheaveragehouseholdsizeof2.49peopleforrenter-occupiedhousingunitsinAnneArundelCounty(2010Census)

• Averagenumberofschool-agechildren:0.14or64percentfewerthantheaverage0.39forallhousingunitsinthecountyforschoolyear2013-2014

• Averagehouseholdincome:$105,053


• Revenuesgeneratedfromtaxandnontaxsources:$816,912

• CosttoAnneArundelCountyforservicesforresidentsandemployees:$659,456

• Totalestimatednetannualfiscalbenefit:$157,456

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[Table 4-1] Residential and Nonresidential Building Program Data: Four TOD Projects, Selected Virginia and Maryland

UrbanAnalyticsanalyzedthegeneralsocio-economiccharacteristicsofnearly10,000apartmentsin42TODandnonTODprojectsinVirginiaandMarylandandfoundthatTODunitsgeneratedalowerdemandforpublicservicesperunitonlocalgovernmentsandschoolsthannonTODapartmentunits.InFY2014,TODprojectapartmentsgeneratedbetween$1.13and$2.20intaxandnontaxrevenuesfortheirrespectivejurisdictionsforevery$1spentonpublicservicesfortheresidentsandemployees.

IfthefourTODcase-studyprojectshadnotbeenlocatedatorneartransitrailstationsbutinsteadhadbeenlocatedintypicalsuburbanresidentiallocations,theyeitherwouldhaveproducedsignificantlyfewerrevenuesorcostlocaljurisdictionsmorethantheypaidforservicesforresidentsandemployees.Atthelowend,apartmentbuildingslocatedinnonTODareaswouldhaveproducedonly$0.77inpublicrevenuesforevery$1theypaidforpublicservicesforresidentsandemployees,imposingacostforlocalgovernmentsandschoolsystemsof$0.23forevery$1ofpublicrevenuesreceived.Attheupperend,theywouldhavegenerated$1.35intaxandnontaxrevenues,producingasurplusof$0.35forevery$1spentprovidingpublicservices,includingschoolservices,toresidentsandworkersintheselocaljurisdictions.

TOD Projects Produce More Revenue for Cities and Counties

Table 4-1

Residential and Non-Residential Building Program DataFour TOD Projects Selected

Virginia and MarylandAverage Total

Total Real Estate Real Estate Estimated EstimatedResidential Uses Units7 Assessed Value5 Assessed Value5 Population7 Children7

1 The Shelby 240 $250,000 60,000,000$ 374 172 The Alaire 279 $241,000 67,239,000$ 431 183 The Fitzgerald 275 $169,000 46,475,000$ 345 164 The Village at Odenton Station 235 $147,500 34,662,500$ 398 33

Avg. Real Estate Total EstimatedTotal Assessed Value5 Real Estate FTE Jobs 6,7

Non-Residential Uses Sq. Ft. per Sq. Ft. Assessed Value5 SupportedRetail Space

The Shelby 0 n/a n/a 0The Alaire 14,800 $225.00 3,330,000$ 33

The Fitzgerald 23,728 $265.00 6,287,920$ 53The Village at Odenton Station 57,995 $150.00 8,699,250$ 129

Source:

Note:1 Location: Fairfax County, Virginia. Developer: Insight Property Group2 Location: City of Rockville, Maryland. Developer: JBG3 Location: City of Baltimore, Maryland. Developer: The Bozzuto Group4 Location: Anne Arundel County, Maryland. Developer: DOLBEN5 Current dollars.6 FTE = full-time equivalent jobs7

Building Program Data: Insight Property Group; JBG; The Bozzuto Group; DOLBEN; Urban Analytics, Inc.

At full build-out and occupancy.

Assesed and Market Value Data - Retail Space: Review of third-party market research reports and assessment data from LoopNet.com; CBRE; Lipman Frizzell & Mitchell, LLC; Valbridge Property Advisors, Municipal & Financial Services Group, LLC; and the Maryland State Department of Assessments & Taxation (MD SDAT).

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[Table 1-2] Fiscal Impact Summary: Residential and Nonresidential Land Uses – If the Four Projects Selected Were NonTOD Projects, Virginia and Maryland

Table 1-2

Fiscal Impact Summary1

Residential and Non-residential Land UsesIf the Four Projects Selected were non-TOD Projects

Virginia and Maryland

Aggregate The The The The Village atResidential Shelby2 Alaire3 Fitzgerald4 Odenton Station5

Annual Revenues Generated 1,136,105$ 458,304$ 1,933,565$ 881,998$ Annual Expenditures Demanded 952,961$ 498,590$ 1,502,500$ 1,224,047$ Annual Revenue Surplus (Deficit) 183,144$ (40,286)$ 431,065$ (342,049)$

AggregateNon-residential

Annual Revenues Generated -$ 17,157$ 194,147$ 111,591$ Annual Expenditures Demanded -$ 9,265$ 77,101$ 69,271$ Annual Revenue Surplus (Deficit) -$ 7,892$ 117,046$ 42,320$

Total - All Land UsesAnnual Revenues Generated 1,136,105$ 475,461$ 2,127,712$ 993,589$ Annual Expenditures Demanded 952,961$ 507,855$ 1,579,601$ 1,293,318$ Annual Revenue Surplus (Deficit) 183,144$ (32,394)$ 548,111$ (299,729)$

Per-Unit The The The The Village atResidential only Shelby Alaire Fitzgerald Odenton Station

Annual Revenues Generated 4,734$ 1,643$ 7,031$ 3,753$ Annual Expenditures Demanded 3,971$ 1,787$ 5,464$ 5,208$ Annual Revenue Surplus (Deficit) 763$ (144)$ 1,567$ (1,455)$ Source: Urban Analytics, Inc.

Note:1 These are the revenue and expenditure figures that are estimated to have been generated (on an annual basis) if the four projects selected for analysis were non-TOD projects and had been fully built-out and occupied in FY 2014. Revenues and expenditures are based on each jurisdiction's Comprehensive Annual Financial Report (CAFR). 2Fairfax County, VA. 3City of Rockville, MD. 4City of Baltimore, MD. 5Anne Arundel County, MD.

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Figure 1-1: Net Fiscal Impact per Unit of Residential Units: TOD vs. nonTOD Projects

ThefourTODcasestudyprojectshadapositiveimpactonlocalcityandcountyrevenuesandacrossjurisdictions.InVirginia,citiesareindependentofcounties.InMaryland,citiesandtownstypicallyreceivesomelevelofpublicservicesdirectlyfromtheircountiesandsomedirectlyfromthestate.Theseservicesaresupported,inpart,byrealestatetaxescollectedfromrealpropertyinthecitiesandtowns.

ArethefiscalimpactfindingsofaTODprojectinonejurisdictionthesameasinotherjurisdictions?AproposedorexistingTODprojectwouldgeneratedifferentfiscalimpactsinotherjurisdictionsbecausejurisdictionsprovidedifferenttypesandlevelsofpublicservices,relativetotheamountoftaxandnontaxfeerevenuestheycollectannually.

TheAlaireinRockville,Maryland,forexample,generatedanestimated$1,122,030annually,including$388,817ingrossrevenuesfortheCityofRockvilleandanadditional$654,175forMontgomeryCounty,aswellas$79,038fortheStateofMaryland.TheestimatedannualrevenuesgeneratedinFY2014forthecity,county,andstateforresidentialandnonresidentiallandusesarepresentedinFigure1-2andalsoinTable6-1.

Regionwide Impacts

Table 1-1

Fiscal Impact Summary1

Residential and Non-residential Land UsesFour TOD Projects Selected


Aggregate The The The The Village atResidential Shelby2 Alaire3 Fitzgerald4 Odenton Station5

Annual Revenues Generated 1,117,400$ 371,660$ 1,531,898$ 705,321$ Annual Expenditures Demanded 752,454$ 333,684$ 707,891$ 590,185$ Annual Revenue Surplus (Deficit) 364,946$ 37,976$ 824,007$ 115,136$


Annual Revenues Generated -$ 17,157$ 194,147$ 111,591$ Annual Expenditures Demanded -$ 9,265$ 77,101$ 69,271$ Annual Revenue Surplus (Deficit) -$ 7,892$ 117,046$ 42,320$

Total - All Land UsesAnnual Revenues Generated 1,117,400$ 388,817$ 1,726,045$ 816,912$ Annual Expenditures Demanded 752,454$ 342,949$ 784,992$ 659,456$ Annual Revenue Surplus (Deficit) 364,946$ 45,868$ 941,053$ 157,456$

Per-Unit The The The The Village atResidential only Shelby Alaire Fitzgerald Odenton Station

Annual Revenues Generated 4,656$ 1,332$ 5,571$ 3,001$ Annual Expenditures Demanded 3,135$ 1,196$ 2,574$ 2,511$ Annual Revenue Surplus (Deficit) 1,521$ 136$ 2,997$ 490$ Source: Urban Analytics, Inc.

Note:1 These are the revenue and expenditure figures that are estimated to have been generated (on an annual basis) had the four TOD projects selected for analysis been fully built-out and occupied in FY 2014. Revenues and expenditures are based on each jurisdiction's Comprehensive Annual Financial Report (CAFR). 2Fairfax County, VA. 3City of Rockville, MD. 4City of Baltimore, MD. 5Anne Arundel County, MD.

ThefourTODprojectsanalyzedclearly“paytheirownway”comparedtononTODprojectsthatcontainhigherresidentadultandschool-agechildrenpopulations,asshowninFigure1-1.

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[Table 6-1] Revenues Generated within a Region: Residential and Nonresidential Land Uses: “The Alaire” TOD Project

Table 6-1

Revenues Generated within a Region1

Residential and Non-residential Land UsesTOD Project Selected: "The Alaire"


Aggregate City of Montgomery State ofResidential Rockville, MD County, MD Maryland Total

Annual Revenues GeneratedReal Estate Revenues 196,338$ 623,306$ 75,308$ 894,952$

All other Revenues 175,322$ -$ -$ 175,322$ Total 371,660$ 623,306$ 75,308$ 1,070,274$


Annual Revenues GeneratedReal Estate Revenues 9,724$ 30,869$ 3,730$ 44,323$

All other Revenues 7,433$ -$ -$ 7,433$ Total 17,157$ 30,869$ 3,730$ 51,756$

Grand Total 388,817$ 654,175$ 79,038$ 1,122,030$ Source: Urban Analytics, Inc.

Note:

1 These are the revenue figures that are estimated to have been generated (on an annual basis) had "The Alaire" TOD project been fully built-out and occupied in FY 2014 based on the City of Rockville's Comprehensive Annual Financial Report (CAFR).

[Figure 1-2] Revenues Generated within a Region: “The Alaire” TOD Project

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Cross Jurisdictional ImpactsTheAlaireinRockville,Maryland,illustratestheadditionalfiscalbenefitsandcross-jurisdictionalrevenuesforoneTODproject,asshowninFigure1-2.:

• EstimatedgrossrevenuesgeneratedfortheCityofRockville:$388,817

• EstimatedgrossrevenuesgeneratedforMontgomeryCounty:$654,175

• EstimatedgrossrevenuesgeneratedannuallyfortheStateofMaryland:$79,038

• Estimatedtotalgrossrevenuesgeneratedannually:$1,122,030

The characteristics of TOD versus nonTOD projects arebasedonanalysisof42projectscomprising9,546existingTODandnonTODapartmentunitsinVirginia’sArlingtonandFairfaxcountiesandinMontgomeryCounty,Maryland.ThefourTODcasestudyprojectswerelocatedinFairfaxCounty,Virginia,andAnneArundel,Baltimore,andMontgomerycountiesinMaryland.

Number of Units: Atotalof5,388(56.4percent)ofthe9,546apartmentunitswerelocatedinVirginia,and4,158units(43.6percent)werelocatedinMaryland.Some45percentoftheVirginiaunitswereidentifiedasTODprojectsandwerelocatedatornearnineMetrorailstations,while34percentoftheMarylandunitswereidentifiedasTODprojectsandwerelocatedatornearthreeMetrorailstations.

Average Household Size: AverageTODhouseholdsizevariedbylocation,andrangedfrom1.6people,or16.2percentsmallerthantheaveragenonTODhouseholdsinMontgomeryCounty,to1.75people,or8percentlargerthanaveragenonTODhouseholdsinFairfaxCounty.

Average Number of School-age Children per Unit: BothTODandnonTODapartmentsgenerallyhadfewerschool-agechildreninFairfaxCounty(0.12perTODunitand0.14childrenpernonTODunit)comparedtoMontgomeryCounty,where0.14childrenlivedineachTODunitand0.35childrenlivedineachnonTODunit.ThecostofprovidingpubliceducationintheBaltimore-Washington,D.C.metroregionusuallyrankseitherfirstorsecondamongallpublicservices.TheloweraveragestudentsperunitinTODprojectsresultsinalowerper-unitpubliceducationcostinthefiscalimpactanalysis.

Median Household Income per Unit: ThemedianhouseholdincomeperunitfortheTODprojectswassubstantiallyhigher(greaterthan10percent)thanthenonTODunits.InFairfaxCounty,

General Characteristics of TOD versus nonTOD Projects

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themedianTODhouseholdincomewas$106,631or12.7percenthigherthanthenonTODincomes.InMontgomeryCounty,themedianTODhouseholdincomewas$116,892or39.7percenthigherthannonTODincomes.

Median Age Range of Residents: Allprojectsinallcounties,exceptfortheFairfaxCountyTODunits,reportedamedianagerangeof31to40years.InFairfaxCounty,themedianagerangeofresidentsintheTODunitswas26to30years.Itisnotclearwhetherthehighermedianagerangeof31to40yearsreflectsalifestylechoiceorahousingaffordabilityissue.NorisitclearfromthedatawhythemedianageofhouseholdsinTODunitsinFairfaxCountywasyounger.Thereasonsforthisagedifferencecouldincludebutarenotlimitedtothefollowingfactors:

1. housingchoicesinFairfaxCountycouldbedifferentthanintheothercounties;

2. housingoptionsinFairfaxCountycouldbemorediverse,drawinginyoungerresidents;

3. recentcollegegraduatesmovingtotheWashington,DCmetropolitanareafromoutsidetheregioncouldbechoosingtoliveinFairfaxCountyandnorthernVirginiaovercountiesinsuburbanMaryland;and

4. employmentopportunitiesforyoungerworkersaremoreprevalentinFairfaxCountyandinnorthernVirginiathaninsuburbanMaryland.

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Average Number of Cars:Onaverage,theratioofcarsperunitwas1.30fornonTODunitscomparedto1.04fortheTODunits.ThefactthatTODresidentsownedslightlymorethanonecarperunitcouldindicatetheneedformoreamenitiesaroundTODprojectsthatpeoplecanwalktoorthatmanyemploymentcentersintheregionarelocatedoutsideofthepublictransportationnetwork,resultingintheneedforatleastonememberofthehouseholdtouseacartogettowork.

Transportation to Work:PeoplewholivedinTODapartmentscommutedbypublictransitataratefivetimesgreaterthannonTODresidents(20.2percentversus4.2percent).

Average Commute Time: TheaveragecommutetimeforallnonTODresidentswasaboutevenlysplitbetween1to15minutes(26.8percent)and16to30minutes(27.06percent)forallmodes(publictransit,driving,walking,carpooling,other).Athird(33.92percent)oftheTODresidentsestimatedthatittook16to30minutestotraveltowork,andone-quarter(26.51percent)reporteda1to15-minutecommute.

Previous Residence: ForbothnonTODandTODprojects,slightlymorethantwo-thirdsofresidents(68.73percent)movedtotheircurrentapartmentbuildingfromanotherapartmentbuilding.Aboutone-quarterofresidents(23.88percent)movedtotheircurrentapartmentbuildingfromahouse.Sixpercentofresidentsmoveddirectlytotheircurrentapartmentbuildingfromtheirparents’house,andtheremainingresidents(about1.4percent)movedtotheircurrentresidencestraightfromcollege.

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• ThefourTODprojectsanalyzedclearly“paytheirownway,”whilenonTODprojects,whichhavelargeraveragehouseholdsizesinbothadultandschool-agechildrenpopulations,generallyposeahigherfiscalburdenforcitiesandcounties.

• TODprojectapartmentsgeneratedbetween$1.13and$2.20intaxandnontaxrevenuesfortheirrespectivejurisdictionsforevery$1spentonpublicservicesfortheresidentsandemployees.

• IftheTODprojectswerenotlocatedatornearatransitrailstation,theywouldhavegeneratedfewerrevenues--between$0.77and$1.35intaxandnontaxrevenuesforevery$1spentonpublicservicesfortheproject’sresidentsandemployees.

• Thepopulationandschool-agechildrencharacteristicsofTODandnonTODprojectsarequitedifferent.Fewerfamilieswithschool-agechildrenliveintheTODapartments,sothereislessneedfromthoseprojectsforeducationalservicesfromlocalschoolsystems.

• ThedatadoesnotsupportthemajorconcernsofTODopponents:

• TODsdonotplaceagreaterburdenonlocalpublicschoolsystemsbecausetheygenerallyhavefewerschool-agechildren.

• TODsdonotplaceagreaterburdenonoverallcostsforservicessuchaspublicsafety,publicworks,andparksandrecreation,becauseaveragehouseholdsizegenerallyissmaller.

Conclusions

19

Thefiscalanalysisdiscussedinthisreportpromptssomequestionsforfutureresearch:

• AretheresearchandfindingsuniquetotheBaltimore-Washington,D.C.region,orcantheybereplicatedinotherlargeurbanareas?

• Iffindingsfromsimilarstudiesdonotconfirmthisreport,whyistheBaltimore-Washington,D.C.regionunique,andwhatfactorsmightcontributetothedifferences?

• Threeoftheseprojectsareinclose-insuburbanlocations.DothefiscalreturnsofsuburbanTODsdifferfromthereturnsofTODprojectsinthedowntowncore?

• Aretheloweraverageschool-agenumbersintheTODprojectsuniquetotheBaltimore-Washington,D.C.region,ordoesthisalsooccurinTODprojectsinotherlargeurbanareas?

• Doesthemedianagerangeof31to40yearsforTODresidentsreflectagenerationalorlifestylechoice,ordoesitreflectahousingaffordabilityissueintheBaltimore-Washington,D.C.region?

• Isthismedianagerangeanindicatorofafuturetrendorananomaly?

• DospecificTODfactorscontributelargerrevenuesbyattractingaspecifictenantprofile?For

example:

urbanattractivenessforyoung(age25to40)singlesorcoupleswithoutchildren? proximitytothetransitstation,encouragingwalkingandbiking? generallysmallerresidenceswithmoreaffordablerents,allowingmoredisposable

income? newerconstruction,modernarchitecturalstyles,andhigher-endamenitiesdrawing

higherincomes?

• Howdoesthecostofparking,especiallystructuredparking,aswellaszoningthatrequiresfewerparkingspacesperunittoencouragepublictransituse,affecttheaveragenumberofcarsperunitinTODprojects?

• WhateffectwouldapercentageofaffordableandworkforceTODhousingunitshaveontheoverallfiscalimpacttoajurisdictionwhenthoseunitsarepricedatmarket-rateandbelow-marketrate?

• Isthereafiscalbreak-evenpointatwhichTODhousingunitspricedbelowthefiscalbreak-evenpointgenerateanetfiscalburden(deficit)tothemunicipality,whileTODhousingunitspricedabovethefiscalbreak-evenpointgenerateanetfiscalbenefit(surplus)tothemunicipality?

Future Research

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