13 November 2015

Pointless height restrictions are costing Washington DC billions

By Patrick Holland

Development in nearly every city in America is regulated by zoning rules that restrict efficient growth. For decades local governments have wielded their power with a heavy hand, regulating the growth of cities with little regard for the economic consequences of their actions.

In San Francisco housing prices are skyrocketing because of stiff regulations, and in Los Angeles zoning laws created a rent crisis. But perhaps the best example of overzealous planners is found in Washington DC.

Washington DC’s skyline is an anomaly for a city of it’s size. With the exception of the Washington Monument and the Capitol, the city is almost uniformly flat.

This is no accident. It’s the result of a hundred-year-old regulation that limits buildings from rising more than twenty feet higher than the width of the street they are on. While this law has given the city a unique urban atmosphere, it has also cost the District’s economy dearly.

The first DC height limit was passed by Congress in 1899 as a response to the construction of the 14-story Cairo apartment building near Dupont Circle. Lawmakers were convinced of the absurd belief that tall buildings could topple at any moment.

This rationale might have been acceptable in the 19th century, but it makes no sense today. The Cairo is still standing, and the tallest buildings in the world are more than 2,000 feet tall, yet the law remains in place.

There have been attempts to reform height regulations as recently as 2014, but none have resulted in any meaningful change.

This failure to fix DC’s height restrictions has taken a heavy toll on the city’s economy. In 1998, Ryan Avent calculated that the annual regulatory cost of DC height restriction was $1.4 billion. In other words, the cost of real estate in DC was 22 percent higher than it would have been if not for these land use regulations.

This so-called “shadow tax” increases the price of nearly all goods and services, and it has only continued to rise since 1998.

Since developers are not able to fully utilize their land by building higher, the supply of commercial real estate has been essentially capped in many parts of the city. As a result, land values in the DC metropolitan area are $10,000 more expensive than those in the New York City metropolitan area.

The lack of available building space downtown, and the high prices that come with it, are driving businesses away from the District and into the suburbs. Tysons Corner, a Virginia suburb of DC, is home to more Fortune 500 company headquarters than the city itself, and many of the region’s major non-profits have moved across the Potomac River into Rosslyn and Arlington—where height restrictions are not an issue.

This has not only cost the District a substantial amount of potential tax revenue, but it has also wasted company resources. These businesses all need to interact with government agencies on a regular basis—that is why they are based in Washington DC—but they are sprawled all across the area when they could be bunched together downtown.

The city’s urban sprawl has made residents daily commutes a nightmare. To reduce congestion, the city and surrounding states have created expensive public transportation projects that they can ill afford.

The best example of public transit gone wrong as a result of height limits is the Washington subway system. The DC Metro is the 15th longest subway system in the world, yet it only ranks 58th in ridership. It also has the second fewest riders per mile of any of American subway system with more than 100 million annual riders. This means that the cost to the system for every user is astronomical, and unsurprisingly Metro never makes a profit.

This problem is a result of the area’s low density. The system has to provide miles and miles of extra rail in order to provide service to majority of the region. Urban sprawl also forces residents to take cars to work because few people live within walking distance of a Metro stop.

Despite the city’s substantial expenditures on public transit, DC traffic is regularly ranked as some of the worst in the country.

The population of the DC metro area is expected to grow by 25 percent in the next 25 years, and with it traffic is only going to get worse. Projects such as the Beltway Express Lanes will not be enough to solve the congestion problem. Traffic is expected to slow in the Maryland suburbs of the city, despite the construction of a $2.43 billion light rail, and Virginia expects a similar increase.

The only way to solve the District’s traffic problem is to remove arcane height restrictions and encourage more density downtown. Height restrictions are costing Washington DC billions of dollars and creating a massive inconvenience for daily commuters. DC should be allowed to grow up, not out.

Patrick Holland is a Young Voices Advocate. He grew up in the suburbs of Washington DC, and studies Political Science and Philosophy at Swarthmore College. You can follow him on Twitter @Phollandaise.