Loudoun’s aversion to new single-family homes driving surge in this type of housing

From The Washington Business Journal (Subscription required):

Loudoun County is opening the floodgates to new age-restricted communities in a move that some county officials and other observers say could be detrimental to its economic future.

The Loudoun Board of Supervisors recently approved two new age-restricted communities that will add hundreds of units for individuals 55 and older, part of a growing trend to accommodate older citizens who need fewer public services than, say, families.

It approved Toll Brothers’ request to develop 26 acres within the Belmont Executive Center with 105 age-restricted townhomes, up to 100 workforce multifamily units, and up to 34,000 square feet of retail. County officials also approved plans by the National Conference Center, a corporate training center near Leesburg, to add 74 two-story age-restricted units. Neither development was originally proposed as age-restricted.

And just last month, Pulte Home Co. proposed another 406 age-restricted homes for a property in the Sterling District called Montebello Farms.

The projects add to a total of 6,414 age‐restricted units, including single-family and multifamily dwellings, that have either been built or issued permits as of July 1, 2017, according to Loudoun officials. Jill Kaneff, county demographer, said Loudoun began tracking age-restricted units, which include assisted living facilities, about three years ago as the number of applications grew for that use.

Meanwhile, there is a backlog of residential units in the pipeline: As of July 1, there were approximately 29,200 approved residential units yet to be permitted. Of that figure, about 18,000 are multifamily, most of which are bunched by the county’s future Silver Line Metro stations, while about 10,370 are single-family and about 820 are group quarters such as congregate care facilities.

The increasing number of age-restricted units is something to keep in mind as Amazon weighs Loudoun as a prospective home for its $5 billion second headquarters, a 50,000-job prospect that would generate demand for all types of housing. A 2017 report from George Mason University’s Center for Regional Analysis predicted a housing shortage approaching 20,000 units in Loudoun over the next 25 years, particularly for young families.

“If Loudoun doesn’t accommodate the future workers, then where do they end up going?” said Jeannette Chapman, co-author of the GMU report. “If they can’t live here, those jobs can’t come by definition. That is really what that housing conversation is mostly about.”

Loudoun County Supervisor Suzanne Volpe, R-Algonkian, shares the same concern. She said the county needs senior units but also must pursue a greater diversity of housing to accommodate a range of workers.

“A house is where a job goes home to sleep at night,” Volpe said. “So yes, the supply of housing directly relates to economic development. We need housing for millennials. We need housing for a husband and wife with children. We need to work on our diversity of housing.”

There’s room in Loudoun for senior housing, a means of keeping citizens in the county who would otherwise leave and take their retail spending with them, said Leonard Bogorad, a managing director for Bethesda-based real estate advisory company RCLCO Real Estate Advisors. On the flip side, failing to permit a range of housing types would adversely effect Loudoun’s ability to attract new business and to grow a retail segment that relies largely on a strong residential base.

“A lot of retail spending is done by younger, middle-aged households, ” Bogorad said. “To attract business and support existing businesses, you need housing that can accommodate a range of ages so businesses are likely to be hiring.”

What’s driving the change? $1.62

Loudoun’s shift away from new single-family homes can be traced in part to a disputed 2011 report from Loudoun’s Economic Development Commission, which found that for every $1 in tax revenue generated by new residential construction, Loudoun must spend $1.62 on public services.

Cooley LLP land use attorney Colleen Gillis, whose clients include the National Conference Center and Pulte at Montebello Farms, has witnessed the change firsthand.

“The desire to trend away from market-rate residential has been happening for at least six or eight years,” she said. “As a county, we continue to welcome data centers and a higher proportion of those who are 55 and older.”

She said her clients often face pushback from county officials over their residential proposals due to concerns about impact on traffic and schools. Consider Lexington 7, a mixed-use project on 60 acres north of Lexington Drive between Howard Hughes Medical Institute and the Potomac Farms community. Capital Associates, which owns the project, originally proposed market-rate residential but it was rejected by county officials. What was ultimately approved: 113 age-restricted single-family homes constructed by Pulte Homes, a 125-unit continuing care facility, and roughly 200,000 square feet of retail and office.

The same thing happened with National Conference Center.

“We went through the process, and it was pretty apparent to my client that there was no way they were going to get non age-restricted housing,” Gillis said. “The concern really was one of traffic impact that drove us toward the age-restricted component.”

Landowners are increasingly pursuing age-restricted communities because they are not as scrutinized as other market-rate single-family residential developments, said Ricky Barker, Loudoun’s director of planning and zoning.

“Since it’s restricted to 55 and older, they don’t have children that impact the school system,” he said. “They don’t work as much, so they don’t have as much traffic generation at peak times.”

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Copyright Washington Business Journal, reprinted with permission