None of my regular outlets liked this one so I am just running it here. I will come back soon to government intervention in housing for equity, and write something in a style more agreeable to other publications.
A number of journalists have written about how CPAC (the Conservative Political Action Conference) this year had far fewer attendees than in years past and just wasn’t much fun. As Andrew Cockburn wrote, “A ghost of its former self.”
Coincidentally, CPAC’s old home died too, though it has now been resurrected. Before CPAC was at the Gaylord National Resort, on the Maryland shores of the Potomac River (along with a few years in Florida during Covid lockdowns), CPAC was for over a decade at the Woodley Park Wardman Hotel in Washington, D.C., conveniently on the Red Line of the DC Metro that runs through Bethesda and Chevy Chase to the north and DuPont Circle and Capitol Hill to the south.
CPAC’s last year at the Wardman was 2018; unrelated the Wardman filed for bankruptcy in 2021, and was sold for $152 million. Built in 1917 it was dubbed “Wardman’s Folly.” Its 1200 rooms (with 625 bathrooms) was considered “too far” in pre-subway days from the developed part of downtown DC. (The neighborhood just north of Woodley Park, Cleveland Park takes its name from President Grover Cleveland and his entourage, who had “summered” in the 1880s in this then pastoral area of Washington, D.C.)
The Wardman is back. But not as a hotel. The Wardman Tower is DC’s newest luxury condo, where you can buy 3,000, 4,000, or 5,000 square feet condos for $1000-$1200 a square foot - that is, for $3 million to $5 million. If anything proves that D.C. and its suburbs are the basis for Panem in The Hunger Games, it is that only two of these residences remain available, not under contract, as of this writing. (Back in 2021 neighbors actually imagined it was going to become “affordable housing.”)
The Wardman is not alone. Around the DC metro area vacant commercial property is being converted to residential use, largely because teleworkers created by the Covid lockdown don’t want to work from offices any longer and don’t want to deal with bad traffic, scarce parking, and rising crime in D.C. I am writing this article from two subway stops outside of D.C., from the 10th floor in my real estate office in Arlington, Virginia, where half of my floor has been vacant since we moved in 2 years ago, and our old space on the first floor of the neighboring building has remained vacant since we moved out. And this is on a desirable campus of three modern 12 story towers with a gym, garage parking, and on upper floors views of the Lincoln Memorial, the Washington Monument, the Capitol, and National Cathedral. One block from a subway stop and from several rows of restaurants. The vacancy rates for commercial property in DC generally is just over 20%. D.C. Mayor Muriel Bowser is begging the federal government to mandate that federal workers come back to work in their D.C. offices. Though D.C. may lead many U.S. cities in increases in crime and loss of population, it’s not that special when it comes to commercial vacancies - they are around 16% nationally and growing.
It may be that as with the Wardman, if governments don’t get in the way, the market will take care of this. It will be “creative destruction,” as free market economist Joseph Schumpeter described. Except unlike the Romans in Carthage, or various ancient Hittites and Assyrians, no one will need to plow the buildings under when they salt schumpeter the earth. They’ll just convert to condos.
Just to be non-partisan another massive office building is converting to over 500 rental apartments only 8 blocks south from Wardman Tower, the Universal North building, which for years was the location for “progressive” groups like the Center for Policy Alternatives and Ralph Nader affiliated groups. At least 4 other buildings within blocks of the White House - including former Department of Justice and Peace Corps office buildings - are converting from offices to residential property. Outside the District the same conversions are happening. Immediately across the Francis Scott Key Bridge, in Rosslyn, Virginia a 13 story office building is being replaced with a 27 story apartment building. A little farther down the Potomac, just south of Reagan National Airport two buildings - formerly offices for government contractors - overlooking the river in Alexandria, Virginia are converting to condos (Towngate North) with smaller units around $500,000, two bedrooms around $1 million and 3 bedrooms in the $2 millions.
Though the conversions happening in the Washington, D.C. area are often conversions to luxury residences, generally office to residential conversion is less expensive than building new condominiums or apartment buildings from scratch. “One estimate could be that renovations could cost about 30% to 40% less than new construction for the same number of units,” Emil Malizia, a professor in the Department of City & Regional Planning at UNC at Chapel Hill, told the industry publication RentCafé.
Though these commercial (or government office) to residential conversions are notable in Washington, D.C. because its high crime rates and government teleworking have led to an empty and boarded up downtown, the conversions are a national phenomena - the National Association of Realtors identifies over 20 urban areas ripe for, or with ongoing, conversions. There were almost 12,000 such conversions nationally in 2020, more than double the 5,000 in 2010, with Philadelphia, Washington, D.C., and Alexandria, Virginia leading in the number of conversions, and Chicago, Los Angeles, Dallas, Baltimore, Union (New Jersey) and the DC suburb of Hyattsville, Maryland rounding out the top 10. One of the main things that might slow down conversions of abandoned offices into needed homes are local zoning regulations requiring, for example, that most of the rooms or all bedrooms in each condo or apartment have a window.
What a boon! By getting rid of regulations that slow down these conversions, we could have an increased supply of housing for the nation. That zoning and other regulations are the culprit in reducing the supply of housing and raising prices is not surprising. Free market economists have been churning out policy studies on this for decades, and a few years ago some progressives even got in on the action led by journalist Matt Yglesias when they realized that regulations requiring minimum lot sizes and maximum building heights or density meant that not enough housing could be built in urban areas with low income and minority populations.
Unfortunately, your average “progressive” politician couldn’t understand that as meaning they needed to get out of the way. Getting out of the way doesn’t give bureaucrats more power, more favors to sell, and multi-million dollar programs that would provide 6 figure, Fauci-level, salaries for administrators.
Instead they took it as meaning they needed to mandate a kind of housing affirmative action, and under President Obama federal housing policymakers began to plan for how to do this, now continued under President Biden. In the same D.C. market leading in the office to apartment conversions, politicians are now imposing housing redistributionist policies that destroy local neighborhoods. Landlords were paid up to 187% of market rental rates to take in tenants with housing vouchers, even if it displaced current fixed income tenants, as a way to encourage racial and other socioeconomic integration in housing.
In other words, rather than spend $2500 a month housing two families in a lower rent area, the government will spend the $2500 to house only one family in a higher rent neighborhood: using government funds to make sure middle class people have poor, government dependent, neighbors is a more important goal than providing housing to those who are homeless. (Though not giving up on the goal of reshuffling the population for equity and social engineering, D.C. has recently stated it will stop “overpaying” landlords.)
The result in D.C. is a relocation of some voucher tenants - who were disproportionately in Anacostia, African American majority Wards 7 and 8, where rents are lower - to buildings along Connecticut and Wisconsin Avenues near National Cathedral and posh Chevy Chase, Maryland in Ward 3, D.C.’s wealthiest and whitest ward. This is a boon to some new tenants attempting to escape DC’s growing crime, which is worst in Wards 7 and 8. Housing voucher recipient Miyanna Walls told WAMU radio, the local NPR affiliate: “The Karens in my building — it’s a hassle…[but] I’d rather deal with racism from strangers than keep on making my children learn how to fall to the ground to dodge a bullet. It’s terrifying when you have to grow up like that.” But the “Karen’s” have their own concerns as well - landlords were reportedly encouraged to overlook normal background checks on voucher tenants, leading to protests from current tenants concerned about their safety. The DC police department is now actually complaining about 3 of the formerly middle (not upper middle) class Ward 3 buildings for generating “too many” calls to the police. Metropolitan DC police commander Duncon Bedlion said “there is one significant area where we’ve seen an increase, and that’s what we call ‘assault with dangerous weapons’.” The majority of these assaults in the Ward 3 apartment buildings taking in voucher recipients are domestic violence-related “one of the most difficult assaults to prevent,” according to Bedlion. As one might imagine The Washington Post and other establishment liberal Democratic media do not spend much ink covering rising crime from these housing policies. Rather than take steps to reduce crime everywhere, D.C. progressives want to relocate people - both those who are victims of crime and sometimes those who are criminals - to wealthier neighborhoods that have less crime. Even if it means helping fewer homeless people. Because equity. In the 2022 elections, where only Democrats and almost only incumbents were elected (with only 32% of D.C. voters participating in the primaries), only one candidate, for Ward 3 city council, Republican David Krucoff, campaigned against these programs. Though he was the sole non-Democrat endorsed by the Washington Post, he received only 24% of the vote.
In neighboring Arlington County - where, as in D.C., only Democrats are elected to local office - progressives have another plan to destroy successful, desirable neighborhoods. Arlington has many, many neighborhoods - Aurora Hills, Lyon Park, Lyon Village, Harrison Hills - comprising mainly single family homes. Some children walk to their local elementary schools. Apartment buildings and condos are found mainly only along busier main thoroughfares or in the few blocks around a subway stop.
This lower density housing is definitely something people desire, as prices show. In Lyon Village, near the Courthouse metro stop only two stops outside of D.C. and with its own extensive commercial strip of restaurants, hotels, a Whole Foods and a luxurious new cannabis shop, the well-healed Democrats who work in the federal government's senior executive service or as lawyers or lobbyists now pay $900,000 for a small older tear down home or $2.5 million for the McMansions built to replace them. But housing equity activists now plan to destroy their neighborhoods (and the equity they have in their homes), by changing the zoning to allow 8 unit buildings to be built when the older tear down homes are demolished, instead of a new single family home. Some local libertarians, like county council candidate Adam Theo, have joined the progressives in championing this, since after all, it involves “relaxing” a zoning regulation. The problem is current homeowners bought their home with the idea that they would not be beside large buildings, have their light and views blocked, and have their children walking to school down streets with the traffic caused by large apartment buildings. These things could be and could have been codified into property titles in various ways, for example by land use covenants or easements. The bundle of rights in a property title would then be something one could lease or sell - you could sell someone the right to build a large building beside you, if you wanted to do so and if they paid you something that made it worth it (compensating you for the loss in equity when suddenly you are beside an apartment building instead of another detached home). Zoning has in the past usurped that fuller articulation of property rights; but that doesn’t mean the default position is that we can just eliminate these unarticulated rights and expropriate homeowners’ real equity for the sake of progressive social engineering.
The libertarians who champion this are wrong-headed in their desire to ingratiate themselves with progressives. Especially when there is plenty of other zoning deregulation, as in office-to-residential conversions, that makes housing more abundant without attacking successful middle class communities just because they are able to function without dependency on progressives and their government.
I don’t think there was a panel on housing policy at CPAC this year, while there were many speeches and discussions about progressive attempts to replace the family with government in making decisions about children, or progressives using the notion of “equity” to destroy high achieving schools and eliminate educational attainment. Threats to flourishing and successful families are also being waged on the housing front, and conservatives, populists, libertarians and others ignore it at their peril.
Update: Arlington County Board stripped family neighborhoods of their zoning protection. MY PREDICTION: DC childless well-off yuppies will flee DC crime to close in Arlington zip codes, to buy multi-million dollar condos, as they do in DC. Instead of being converted Victorians, common in DC from Embassy Row/Kalorama to Capitol Hill and beyond, they will be 8 unit condos built on the graves of single family houses. Poor and moderate income people will still have no housing, unless it’s public housing projects built by the state. Other zoning laws and regulations will strangle production of new housing units, which means the allowed production will only be for the high end and more profitable segment of the market.