POSTSCRIPT: Readers have let me know I was wrong to close the comments. In my defense, even a town meeting has time limits. But, due to popular demand, comments have been reopened!

How many infill houses were built in the past year (not tear downs where one house is replaced by one house)? Maybe I don’t realize how many of these infill houses are actually going up.

Don’t get me wrong, it sounds like there are real problems with these substandard lots – I’m just wondering how many there really can be in the City (I’m guessing someone actually knows this, or could figure it out)?

To everyone: good discussion. Arlington will be glad to have all you caring, civic-minded folks among its residents. See what you started, George!

The former city manager once was quoted in the paper as saying that we needed to maximize the tax revenue of every property in the city. While that may sound good, building two large houses where there was once one (a la East Broad Street “twin towers” near Buxton) on two substandard lots is a net tax revenue loss as Dan illustrates.

I hope to see a zoning code rewrite that eliminates this abuse of the existing laws. It may be only one step, but it is a big one.

With respect to mixed-use developments and the school capacity, please keep in mind that in addition to the analysis of OPERATING cost, that we have required developers to proffer the estimated share of school CAPITAL cost. This means that while we added 600 kids capacity by building MEH Middle School (for ~$30 million), we received one-time capital money (which has been applied directly to defray this cost). IMHO we probably did not charge the right number for the cost (~$50,000 per seat) but we do have a process for evaluating and assessing this cost based on real data, and I am grossly oversimplifying. I do not believe that we have the power to charge these fees for apartments, although since the costs are financed they do eventually hit the operating budget.

While I am on this subject, I know that we do not have the power for single-family development, which is why I believe the only real threat to the long-term viability of the City is infill, where each additional home comes with a one-time price tag for capital cost as well as a deficit in operating cost of around $10,000 (a $1 million home will generate annual service costs of ~$20,000+ vs. tax revenues of $11,000). Even if I am oversimplifying and double-counting, this is not a sustainable model.

BARRY BUSCHOW RESPONDS: Thanks Dan, good insight as always. Andy, yes, half of Falls Church moves every 5 years. No, that does not mean kids don’t get through the system. My observations have been that they get here in middle school and leave after high school. But I don’t have, and I don’t believe the School Board has, any hard numbers on such a trend. I just look around my neighborhood. Thanks guys for good discussion, and sorry to “R2D2″ (or whatever your cloak is). I have worked many years for Lions, VPIS, and others to raise funds for scholarships and school programs that otherwise would not be affordable. (Oh no, there’s that word again.)

BARRY BUSCHOW RESPONDS: Whoa — my point was that 50 families living in 50 houses, condos, townhouses, anything that pays RE tax, the city collects around $6k per household avg. (look at your own bill and do your own math) vice living in a rental apartment and not paying that tax. Yes the owners of Oakwood pay a tax but our city income stream is reduced by the other families with children that do not, while we pay the $19k or whatever per child to go to our schools. I’m NOT saying they don’t have a right to go to school, this discussion has been about Revenue or lack thereof. Every time someone tries to point school economics out they get jumped on, which leads to No discussion of how to make it work….I am a ‘67 Grad of GM!

ANDY RANKIN RESPONDS: I really don’t think there’s any difference between a renter (of an apartment or house) and an owner in terms of tax revenue to the City. The same RE tax is paid by whoever does own the property regardless of whether the owner lives in the building or rents it. Barry, you seem to suggest that our tax stream is reduced because these people are renters – I don’t see how that’s true.

So, maybe the argument is the revenue (and costs) of a multi-unit building (apartments, condos, etc.) vs. the revenue (and costs) of single family homes and non-residential buildings. That’s a valid argument, but I’m not sure people have the facts straight on that either. Certainly a 5 story office building would have a much better net tax benefit on the city than a 5 store apartment building. The office building would generate basically the same RE tax but not generate the same expenses (i.e. school kids).

However, for example, the Pearson Square development (even with it’s retail spaces empty) has a net benefit to the City’s bottom line as compared to what it replaced (dilapidated warehouses and a run down duck pin bowling alley). The tax revenue generated by Pearson Square, minus the expenses (mostly kids) generated by Pearson Square is more than the tax revenue that had been generated by the old structures. The same is true of The Byron and The Spectrum.

What can’t be ignored is that at some point the addition of kids (via McMansions, townhouses, apartment buildings, turn over, etc.) will require us to build new schools – and that is potentially a big problem.

As for the turn over issue, has anyone ever studied what’s actually happening? For example, I bought a house last year and moved into the City with my two kids. The people we bought the house from had lived here for a while, their kids had gone through the schools but had been done for a number of years. This kind of turn over seems normal. They lived in the City for years, paying taxes, without kids in the schools – and then they sold their house to me. Is that the turn over we’re talking about (the recent post about school enrollment numbers that I commented on seemed to suggest, statistically at least, that this is the kind of turn over we’ve been seeing for the past 10 years or so)?

Or, are people moving out of the City (selling their houses to new families with young kids) as soon as their kids get out of high school? If that’s the pattern than there’s a huge burden on the City.

I guess the stat I’m looking for is over time what percent of the household in the City have school aged kids? If that number is fairly steady then I’d consider that “normal” turnover. If that number keeps going up then that means we’re in trouble!

As for Oakwood, I actually think it’s really cool that my kid will go to school with kids who have lived around the world with parents doing cool and interesting things. I think it adds valuable diversity to our schools.

BARRY BUSCHOW RESPONDS: Andy, I think you get the big picture. In the limited space here it is difficult to express all parameters of the discussion. My original remark about Oakwood was just an example of how our little city cannot maximize revenues. Dan Maller, I know you’re out there — how much revenue does Oakwood generate for the city, how many school children are in Oakwood? Basic math stuff. If those families lived in houses, how much would that generate? I know we don’t have the housing stock and probably don’t want to have that many more houses. But what if? City turnover a couple of years ago was 50% every 5 years. In the old days families with children lived in houses and young folk, single folk, and old folk lived in apartments or condos. Today it is different, the State Dept likes us and sends many families here. That is GREAT, no question, but we have to examine the economics to this little village that has limited revenue resources. Andy, I believe you took over for me on the EDA — has there been any recent analysis done to give us an idea of the extent of potential city burdens?

ANDY RANKIN RESPONDS: The financial model that the EDA commissioned (before my time on the EDA) and the City uses when looking at new development projects attempted to determine the net financial impact of those new developments. My understanding is that all new residential developments (like Pearson Square) have a net positive impact on the City’s bottom line. That’s because even though Pearson Square brings more kids, it brings a lot of households without kids and a lot of RE tax revenue that the City wasn’t getting before.

In fact, I think the Oakwood info (number of units, number of kids, tax assessments, etc.) could be plugged into the model to determine the impact of Oakwood. It’s certainly possible that it does not have a positive net impact on the City – if, for example, that building has a higher than normal rate of school children in it. Maybe someone at the economic development office could track down those numbers and plug them in?

Your question (what happens if you put the Oakwood residents in houses instead of an apartment building) isn’t a valid one – specifically because the City lacks space for all those houses. In fact, the consultants who developed the financial model say that in most places the assumption is that apartment buildings have a net negative impact on revenue is a valid assumption – but in a small place like Falls Church where there isn’t enough space for a bunch of houses it doesn’t work out that way.

If the space currently taken up by all the mutli-unit housing structures in the City was magically converted to single family homes (however many could fit in the same area) the City would be in a worse financial position than it is today. The schools would be less crowded but the money saved by teaching fewer students would be less than the extra money we get from RE taxes on these larger structures.

As for that turn over stat – that means that every 5 years 50% of the population moves out? That suggests there are a good chunk of kids that don’t make it all the way through the school system. I’d still be curious to see what percent of households in the City have school age kids.

If the renters pay rent, and therefore the owners are able to pay their taxes, then it’s the renters’ money that eventually ends up as taxes. The fact that the State Department pays the rent means nothing as well. It’s a perk of the job, part of the compensation the employee receives for the work they do. The bottom line is, the owners of the Oakwood Apartments pay real estate taxes which goes toward supporting the schools. Sheesh.

I think it’s also fair to say that many of the children of State Department employees achieve high test scores in our schools.

BARRY BUSCHOW RESPONDS: The owners of Oakwood pay taxes but not the individuals families that live there and bring their children to our schools.

ANDY RANKIN RESPONDS: Barry, that makes sense (that the owners pay the taxes, not the renters) – but how is that relevant to the situation?

LOU MAURO RESPONDS: Andy, here is how Barry’s statement is relevant. Oakwood is an apartment building. The Oakwood apartments traditionally have had a substantial number of transitional renters, including State Department families. That is, people who, for one reason or another, are only there for a few years and then move on. Barry was merely pointing out that, while their children attend our schools for those years, at a cost of nearly $20,000 per student annually, the parents, because they are just renters, pay no real estate taxes. That’s it. TPX175, whoever you are, no negative implication was intended. While they are here, their children are entitled to an education—- and they get it.

Again, I would add that, like the McMansion situation, the school children generated by the State Department assignments are beyond the control of the City, but they too have over the years contributed to bringing the school overcrowding situation to the tipping point. That is why, knowing this, the City’s stubborn and continuous approval of student-generating high-density residential buildings on scarce commercial land, over which they have TOTAL control, has been misguided and foolish and pushed the overcrowding situation over the edge.

MBX RESPONDS: RE: “The owners of Oakwood pay taxes but not the individuals families that live there and bring their children to our schools.”

This is part of the problem about Falls Church – “bring THEIR children to OUR schools” – doesn’t everyone deserve a fair education? The mentality that OUR schools are so great, but YOU can’t use them is unfair and selfish.

GORDON THEISZ RESPONDS: If you knew Barry, you would know that he did not mean the context you are emphasizing.

We have other unusual problems like the State Department having a contract with Oakwood Apartments so employees can land here for a year or two, put their children through a fine school system, pay no real estate taxes and then leave. We live in a great location and so problems like that will occur.

Anyway, sustainable development with rents that businesses are attracted to will bring retail. Broadway and Byron are good for our community as we age and want to keep living in the city without yard work. Pearson Square is attractive and only 6 stories and provides a nice rental community. Now we need a way to increase the business tax base in a sustainable way.