Transit-Oriented Development in Prince George’s County

Washington Metropolitan Area Transit Authority

Objectives

Quantify and qualify the nature of regional development trends

Review the benefits of Transit Oriented Development

Ground truth the anecdotal information prevalent in the marketplace

Highlight preliminary key findings and implications

Real Benefits of Transit Oriented Development

Financial Characteristics of Mixed-Use Areas with Critical Mass (Blue) versus traditional Suburban Development (Red)

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Mixed-Use + TOD = Greater Long-Term Value

SOURCE: The Brookings Institution

Summary of National Case Study Data – Transit Premiums on Land Values

Transit Investments Create ValueSmart Growth Infrastructure = Upside Potential

Light Rail Apts

BRT Apts Light Rail Condo

BRT Condos

RCLCO DC - MF/

Condo Transit

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BRT Office RCLCO DC - Office Transit

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Station Population Households Median Income Businesses EmployeesAddison Road|Seat Pleasant 2,427 779 $69,914 82 605Anacostia 8,130 2,616 $24,553 188 2,499Archives-Navy Mem'l 3,237 1,990 $57,444 2,928 85,084Arlington|Cemetery 2,392 1,334 $78,972 65 1,037Ballston-MU 15,473 8,837 $95,075 970 25,011Benning Road 8,581 3,778 $37,554 156 1,723Bethesda 7,273 4,220 $82,108 2,872 39,897Braddock Road 8,394 3,856 $100,948 985 9,593Branch Ave 1,208 390 $68,418 76 2,159Brookland-CUA 6,073 1,826 $50,799 318 3,389Capitol Heights 1,344 530 $57,847 34 208Capitol South 6,638 3,903 $72,410 745 13,334Cheverly 13,969 4,460 $48,779 318 3,279Clarendon 11,173 5,718 $112,820 999 11,525Cleveland Park 8,055 5,380 $83,963 306 3,679College Park-U of Md 2,476 869 $58,359 762 6,615Columbia Heights 34,897 5,380 $44,008 168 1,514Congress Heights 7,372 2,086 $24,509 96 3,085Court House 17,768 10,041 $89,384 1,119 15,996Crystal City 10,237 6,157 $87,439 869 16,804Deanwood 5,785 2,142 $42,643 110 2,606Dunn Loring|Merrifield 4,543 1,953 $84,655 346 6,419Dupont Circle 18,508 12,870 $76,409 6,374 86,665East Falls Church 4,212 1,676 $148,382 172 1,319Eastern Market 12,688 6,850 $87,826 1,023 11,330Eisenhower Ave 3,228 1,553 $112,289 297 5,335Farragut North 8,554 5,866 $54,292 10,065 165,557Farragut West 7,605 3,688 $46,209 9,491 168,452Federal Center SW 4,749 2,728 $51,889 592 21,561Federal Triangle 1,887 1,481 $59,419 2,459 67,779Foggy Bottom|GWU 13,794 7,210 $52,301 4,266 87,605Forest Glen 4,853 1,962 $82,355 170 4,263Fort Totten 7,156 3,123 $65,130 81 922Franconia-Springfield 1,228 635 $88,347 96 1,491Friendship Heights 9,514 5,086 $101,368 1,154 19,807Gallery Pl-Chinatown 9,044 4,932 $33,155 4,140 106,452Georgia Ave|Petworth 17,819 6,172 $44,884 519 4,821Glenmont 3,973 1,330 $69,306 52 420Greenbelt 12,198 608 $54,201 658 9,231Grosvenor-Strathmore 4,725 2,977 $76,779 91 853Huntington 2,719 1,194 $89,307 131 2,198Judiciary Sq 7,798 4,137 $31,998 3,430 95,805King Street 5,871 3,109 $116,468 1,098 11,494Landover 4,434 1,550 $42,899 124 2,260Largo Town Center 1,759 908 $49,279 415 5,658L'Enfant Plaza 2,646 1,705 $52,971 735 30,238McPherson Sq 12,507 7,105 $45,355 7,638 138,465Medical Center 1,346 416 $120,890 330 3,311Metro Center 2,950 2,065 $51,682 5,093 117,666Minnesota Ave 9,249 4,056 $35,069 169 2,348Morgan Boulevard 4,247 1,285 $63,796 71 1,251Mt Vernon Sq - 7th St|Convention Center 20,390 10,039 $42,116 3,034 55,055Navy Yard 4,755 2,359 $36,894 292 9,447Naylor Road 6,801 3,080 $44,225 62 404New Carrollton 502 165 $50,873 170 3,571New York Ave 7,468 2,750 $43,713 604 11,010Pentagon 1,991 1,334 $78,972 309 6,596Pentagon City 10,240 6,272 $80,359 456 8,845Potomac Ave 8,926 3,987 $59,919 529 5,597Prince George's Plaza 4,265 1,604 $55,790 387 4,260Rhode Island Ave 7,460 3,078 $37,304 314 5,043Rockville 4,997 2,168 $63,674 982 8,926Ronald Reagan Washington National Airport 4,275 2,579 $91,455 514 9,511Rosslyn 8,871 5,452 $72,113 1,300 25,127Shady Grove 1,786 855 $109,458 196 3,015Shaw-Howard Univ 17,558 6,884 $46,624 924 11,337Silver Spring 13,306 7,608 $58,150 1,587 18,165Smithsonian - - - 446 20,780Southern Ave 5,686 2,162 $41,897 107 1,996Stadium|Armory 9,583 3,367 $50,882 145 1,609Suitland 3,815 1,438 $55,956 88 498Takoma 5,534 2,365 $79,164 363 2,995Tenleytown-AU 5,023 2,216 $129,726 399 4,855Twinbrook 4,860 2,113 $68,507 552 12,394U St/African-Amer Civil |War Memorial/Cardozo21,888 10,215 $53,638 1,143 12,372Union Station 8,742 3,630 $53,530 1,271 27,539Van Dorn Street 887 363 $88,347 144 2,351Van Ness-UDC 8,145 5,003 $96,747 333 4,957Vienna|Fairfax-GMU 6,019 2,287 $93,301 133 1,888Virginia|Square-GMU 12,605 6,953 $97,141 811 16,048Waterfront|SEU 12,640 7,428 $48,428 514 17,442West Falls Church|VT/UVA 2,320 1,065 $121,194 179 1,438West Hyattsville 8,200 3,147 $46,675 156 889Wheaton 6,132 2,269 $66,813 759 6,575White Flint 3,478 1,942 $90,346 855 15,256Woodley Park-Zoo|Adams Morgan 12,347 7,970 $90,292 567 7,297TOTAL 650,201 302,669 96,071 1,775,706 AVERAGE 7,560 3,519 $67,687 1,117 20,648 SOURCE: RCLCO, CLARITAS

Station Population Households Median Income Businesses EmployeesTOTAL 650,201 302,669 96,071 1,775,706 AVERAGE 7,560 3,519 $67,687 1,117 20,648

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DC/MD/VA Metro Area ½ Mile from Metro Station Data

Prince George’s County ½ Mile from Metro Data

SOURCE: RCLCO, CLARITAS

Station Population Households Median Income Businesses EmployeesAddison Road|Seat Pleasant 2,427 779 $69,914 82 605Branch Ave 1,208 390 $68,418 76 2,159Capitol Heights 1,344 530 $57,847 34 208Cheverly 13,969 4,460 $48,779 318 3,279College Park-U of Md 2,476 869 $58,359 762 6,615Greenbelt 12,198 608 $54,201 658 9,231Landover 4,434 1,550 $42,899 124 2,260Largo Town Center 1,759 908 $49,279 415 5,658Morgan Boulevard 4,247 1,285 $63,796 71 1,251Naylor Road 6,801 3,080 $44,225 62 404New Carrollton 502 165 $50,873 170 3,571Prince George's Plaza 4,265 1,604 $55,790 387 4,260Southern Ave 5,686 2,162 $41,897 107 1,996Suitland 3,815 1,438 $55,956 88 498West Hyattsville 8,200 3,147 $46,675 156 889TOTAL 73,331 22,975 3,510 42,884 AVERAGE 4,889 1,532 $53,927 234 2,859

Line

Station Population Households Median Income Businesses EmployeesBethesda 7,273 4,220 $82,108 2,872 39,897Forest Glen 4,853 1,962 $82,355 170 4,263Friendship Heights 9,514 5,086 $101,368 1,154 19,807Glenmont 3,973 1,330 $69,306 52 420Grosvenor-Strathmore 4,725 2,977 $76,779 91 853Medical Center 1,346 416 $120,890 330 3,311Rockville 4,997 2,168 $63,674 982 8,926Shady Grove 1,786 855 $109,458 196 3,015Silver Spring 13,306 7,608 $58,150 1,587 18,165Twinbrook 4,860 2,113 $68,507 552 12,394Wheaton 6,132 2,269 $66,813 759 6,575White Flint 3,478 1,942 $90,346 855 15,256TOTAL 66,243 32,946 9,600 132,882 AVERAGE 5,520 2,746 $82,480 800 11,074

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Montgomery County ½ Mile from Metro Data

SOURCE: RCLCO, CLARITAS

Station Population Households Median Income Businesses EmployeesArlington|Cemetery 2,392 1,334 $78,972 65 1,037Ballston-MU 15,473 8,837 $95,075 970 25,011Braddock Road 8,394 3,856 $100,948 985 9,593Clarendon 11,173 5,718 $112,820 999 11,525Court House 17,768 10,041 $89,384 1,119 15,996Crystal City 10,237 6,157 $87,439 869 16,804Dunn Loring|Merrifield 4,543 1,953 $84,655 346 6,419East Falls Church 4,212 1,676 $148,382 172 1,319Eisenhower Ave 3,228 1,553 $112,289 297 5,335Franconia-Springfield 1,228 635 $88,347 96 1,491Huntington 2,719 1,194 $89,307 131 2,198King Street 5,871 3,109 $116,468 1,098 11,494Pentagon 1,991 1,334 $78,972 309 6,596Pentagon City 10,240 6,272 $80,359 456 8,845Ronald Reagan Washington National Airport 4,275 2,579 $91,455 514 9,511Rosslyn 8,871 5,452 $72,113 1,300 25,127Van Dorn Street 887 363 $88,347 144 2,351Vienna|Fairfax-GMU 6,019 2,287 $93,301 133 1,888Virginia|Square-GMU 12,605 6,953 $97,141 811 16,048West Falls Church|VT/UVA 2,320 1,065 $121,194 179 1,438TOTAL 134,446 72,368 10,993 180,026 AVERAGE 6,722 3,618 $96,348 550 9,001

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Virginia ½ Mile from Metro Data

SOURCE: RCLCO, CLARITAS

Higher density yields exponentially higher tax revenues to Prince George’s County

1/Includes tax revenues generated from property and income taxes

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PGC Revenues per Acre1

Subsidy will be needed across most land uses to close funding gap

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For-Sale Residential For-Rent Residential Retail Office

Green Line Capture of Regional Growth

Densification Already Underway The Region Is Reorienting Its Growth Patterns

About 20% of the region’s household growth between 2005 and 2015 is currently taking place within walkable, urban, transit-oriented areas.

The growth of Gen Y, increased demand for Transit-Oriented Development and demand for sophisticated urbanity in part driving this trend.

Source: MWCOG Regional Activity Centers, RCLCO

Core to Add Nearly 150,000 HHS by 2030

HH Growth driven by Gen Y, Millennials

The D.C. region’s historical Favored Quarter has emanated due west.

Growth in the post 1960s period followed this trajectory.

Boomers and retirees may continue to favor the westward trajectory of historical growth.

Younger households and new economy employment is redrawing the investment map.

Gen X and Gen Y are driving demand for urban locations.

Bulk of household growth through 2030 driven by 18-34 year old households.

Over the past ten years,

multifamily units

added near Green Line Corridor station areas outpaced Northwest D.C. Red Line station areas.

Green Line is Region’s Growth CorridorSetting the Bar for Urban and TOD

The New 100% Location?Some Green Line Stations Set Top-Of-Market Prices

By 2010, the for-sale multifamily pricing at

certain Green Line stations caught up to and even eclipsed pricing in the top of market, high-priced Dupont Circle neighborhood.

Jobs – The Green Line EffectThe Green Line – A Magnet for High-Wage Jobs

Of the 24,600 net new jobs added to the District of Columbia between 2004

and 2010, 11,200 of

them were added within a quarter mile of the Green Line station areas.

That represents 46% of the city’s total employment growth.

Real Estate, Legal, Architecture, Engineering,

Management, and

Scientific/Technical jobs all gravitated to the station areas under investigation in numbers

that were far in excess of their capture in either NW D.C. Red Line station areas in D.C., Orange Line station areas in D.C., or the R-B corridor in Virginia.

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Jobs – The Green Line EffectThe Green Line – A Magnet for High-Wage Jobs

Economic and Demographic Prince George’s County

Neg. HH Growth 1-250 New HH 251-500 New HH 501-1,000 New HH >1,000 New HH

HH Growth in TOD LOCATIONS Concentrated in Favored Quarter in Last Decade

Total Household Growth in TOD Areas1990-2000

Total Household Growth in TOD Areas2000-2010

Source: ESRI

Household Growth ProjectionsLittle to No Growth Projected for Prince George’s County

Households Lost

0- 500 HH Gained

501 – 1,000 HHs Gained

1,001 – 2,000 HHs Gained

More than 2,000 HH

Gained

Total Household Growth Projected by TAZ2010-2030

Source: MW COG Round 8.0 Forecasting

2010-2020

2020-2030

Projected MSA HH Growth

350,000 296,000

Projected Prince George’s County HH Growth

25,000 18,000

Home Value ComparisonEmpirical Evidence of TOD Premium in DC MSA

Source: ESRI

Median Home Value Comparison2000-2010

144% 88%

County Metro Stations Losing Office Jobs

• Regionally, 13.8% of MSA total employment growth (excl. Wash DC) occurred in TOD locations. In Prince George’s County, only 3.8% of County growth was near a metro station.

• Trend is even more pronounced in office employment:– 12% of MSA office employment located near

transit. – Prince George’s TOD locations LOST 2,180

office jobs, despite an overall county gain of 1,970.

Total Employment Growth in TOD Areas2004-2010

13.8% 3.8%

Office Employment Growth in TOD Areas2004-2010

12.8%

-149%

Job Growth Land Area

Total Office % land ½ mi from Metro

MSA (excl. Wash DC) 293,490 83,340 0.5%

Prince George’s 29,418 1,615 2.4%

Source: InfoUSA; ESRI

Job Growth ProjectionsOpportunity to Capture Regional Growth

Jobs Lost

0-500 Jobs Gained

500-2,000 Jobs Gained

2,000 – 3,000 Jobs Gained

3,000+ Jobs Gained

Total Employment Growth Projected by TAZ2010-2030

Source: MW COG Round 8.0 Forecasting

2010-2020

2020-2030

Projected MSA Job Growth

628,000 519,000

Projected Prince George’s County Job Growth

25,000 36,000

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MSA (Excl. Wash DC) Metro Station Areas (excl. Wash DC) Prince George's County

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Certain Office Users Prefer TOD LocationsPrince George’s Losing Out

Total Job Growth Office & Govt Job Growth

MSA (excl. Wash DC) 293,490 83,340Metro Station Areas (excl. Wash DC) 40,564 10,657Prince George’s County 29,418 1,615

Contribution to Total Job Growth for Office-Using Employment Sectors2004-2010

Source: InfoUSA; ESRI

Opportunities and Barriers to Investment Around Prince George’s County Green Line Stations

GSA Will Not Save the Day for Prince George’s CountyNeed to Make the Case Agency by Agency

Agency directors make site selection calls more so than GSA

Agencies are looking for: Amenities for workers (near-by restaurants

and coffee shops, attractive streetscape) Safety Proximity to employees’ place of residence Synergy with nearby agencies

GSA is looking for: County Commitment

• Financing in place (TIF, other incentive committed)

• County or State commitment to take new office space (e.g. MD Housing & Community Development helped secure IRS in the new Forest City development at New Carrolton)

GSA agreement with WMATA is opportunity for Branch Ave. and Naylor Rd. Metro TOD

2012 2013 2014 2015 2016 2017 2018 2019 2020

776,000

305,000

155,000

487,000

68,000

0

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GSA Office Lease Renewal SchedulePrince George’s County

1.9MM SF of GSA Office Space in Prince George’s

County

Federal Anchors

DHS

Andrews AFB

Census Bureau

NOAA

Federal DOT

Bolling AFB

10-minute Drive Areas

DHS; St Elizabeths

Andrews AFB

Overlapping Area

Growing Federal Anchor TenantsHow can study area benefit from proximity?

Source: ESRI; RCLCO

Public Agency Land OwnershipOver 1/3 of of study area belongs to public agencies

No Hierarchy of PlaceScattershot Development Patterns

Class AClass BClass C

Office Stock in Submarket by Building ClassMSA Class A Office Clusters

Newest Shopping Center inStudy Area Built in 1990

Marlow HeightsBuilt 1960; 500,000

SF

Iverson PlazaBuilt 1985; 18,000 SF

Sam’s Shopping Plaza

Built 1985; 12,000 SF

Silver Hill StationBuilt 1990; 36,000 SF

Silver Hill Shopping CenterBuilt 1990; 32,000 SF

Suitland Shopping CenterBuilt 1940; 45,000 SF

Select Retail Developments in Study Area2011

Source: Reis

Submarket Total Retail

New Retail

South Prince George’s Submarket

64 SF/HH 0 SF/HH

Prince George’s County 74 SF/HH 10 SF/HHMontgomery County 62 SF/HH 2 SF/HHWashington DC 16 SF/HH 5 SF/HHArlington County 36 SF/HH 3 SF/HH

Note: New retail defined as centers constructed after 2000. Statistics only reflect retail SF in managed retail centers.

Newest Apartments in Study Area Achieving Strong Rents

1/ Station Square commands the highest $/SF in the Suitland station area at $1.59/SF; however, this is misrepresentative of the market as its absolute rent is a $250 discount to The Verona.Source: Reis

Select Apartment Communities in Study Area2011

Metro Place at Town Center297 units

Built: 20076.5% Vacancy

$1.70/SF

Chelsea West252 units

Built: 20097.5% Vacancy

$1.79/SF

Marlborough House, 1963

Carriage Hill, 1964Top-of-the-Hill,

1961

Marlow Heights I, 1930

Marlow Heights II, 1940

Marlow Plaza, 1964

Hickory Hill, 1966The Verona,

1965

Station Square, 1962

Windham Creek, 1974Pinewood Chase, 1972

Ashton Heights, 1970

Forest Hills, 1968

Station Area Top Community Top Avg Rent Top $/SF

Southern Ave Forest Hills $997 $1.14

Naylor Rd Carriage Hill $1,157 $1.55

Suitland /1 The Verona $1,354 $1.38

Branch Ave Chelsea West $1,753 $1.79

    Fee/Rate per Dwelling Unit (FY 2011)

County Type Detached 1 Townhome 2 Multifamily 3

Anne Arundel 4 Impact Fee $9,958 $8,976 $7,663Calvert Excise Tax $12,950 $10,325 $7,750Caroline Excise Tax $5,000 $5,000 $5,000Carroll Impact Fee $6,836 $7,610 $2,787Charles Excise Tax $12,097 $11,473 $8,730Dorchester Excise Tax $3,671 $3,671 $2,604Frederick Impact Fee / Excise Tax $15,185 $13,089 $2,845Hartford Impact Fee $6,000 $4,200 $1,200Howard 4 Excise Tax / Surcharge $4,300 $3,763 $2,580MontgomeryIn Metro Station District Impact Fee $27,626 $21,172 $14,061Outside Metro Station District Impact Fee $33,331 $25,840 $17,692

Prince George'sInside Beltway Surcharge $10,539 $10,539 $10,539Outside Beltway Surcharge $20,945 $20,945 $20,945

Queen Anne's 4 Impact Fee $8,720 $7,630 $5,232St. Mary's Impact Fee $4,500 $4,500 $4,500Talbot Impact Fee $6,113 $4,444 $4,444Washington 4 Excise Tax $6,000 $5,250 $3,600Wicomico Impact Fee $5,231 $1,524 $1,524

1/ Assumes a 2,000 SF residential unit

2/ Assumes a 1,750 SF residential unit

3/ Assumes a 1,200 SF residential unit

4/ Impact fees/excise tax assessed on a per square foot basis

High Permitting Costs in County Detract from New Residential Development

Key Takeaways

Region is growing…and recent trends demonstrate that growth will concentrate around Metro

Prince George’s County has not captured its fair share of regional growth…and if we do nothing, more household and job loss is projected for the

county

Higher density, TOD products would generate significant tax revenues to Prince George’s…

but market economics do not support development costs today

GSA and private sector will not lead new office development today…but are committed to Prince George’s and look to county to signal

partnership

There is no shortage of retail availability in the Study Area…but the retail stock is aging and nothing new has been built since 1990

Some multi-family for-sale units around Green Line stations achieve top-of-market prices…

but price appreciation in Study Area has not kept up with regional average

Newer apartment stock in the Study Area commands high rents…but county impact fees make development costs infeasible