Arlington Greens will meet on Tuesday Feb. 4 at 7:30 PM in the Ballston Firehouse Community Room (located at the corner of George Mason Drive and Wilson Boulevard, about 1 mile from the Ballston Metro station). Meetings are open to the public.

Major topics:

Amazon new Headquarters HQ2 in Arlington

Westover Historic Preservation of Garden Apartments

Upcoming county and General Assembling election

Result of Green advocacy in Richmond for the Green New Deal

Election of 2019 Arlington Green officers

Plan to attend. The public can participate, but only members can vote. Membership is open to any Arlington resident and dues are $5 a year.

Virginia and Arlington Greens gathered in Richmond in the cold on Jan. 22 to support a Green New Deal resolution in the Virginia General Assembly, along other Virginia grass roots organizations including the NAACP and the Chesapeake Climate Organization and the Virginia Sierra Club. We then visited our elected delegates and state senators.

Virginia Delegates Rasoul and Guzman and others introduced this house resolutions that would begin the process of drafting a comprehensive bill in 2020 as state law that would radically redirect Virginia into a sustainable energy future. A somewhat similar bill at the federal level has been introduced in Congress, but its prospects this year are doubtful. The goal is to have Virginia have a secure environmental energy future and many new high paying jobs. Solar, wind turbines, and insulating and conserving energy will bring far more jobs to Virginia than the few now in coal mining and fracking.

It is striking that the NAACP would join environmental and labor groups to seek a just environmental future for Virginia that would begin to address environmental racism that continues to target communities of color in our state, including in the path of the Virginia gas pipeline in Buckingham County. A Green New Deal means high paying jobs in our state; ending environmental degradation of our state, and addressing climate change that likely will devastate many parts of Virginia, including the Hampton Roads ares which is likely to be under water with the rising of the Atlantic Ocean and Chesapeake Bay.

Assuming that Amazon does open its 25,000 employee office in Crystal City, Arlington residents most of whom are renters, should plan on a substantial increase in rents and housing costs. A recent forecast by a local realtor with McEnearney Brokers indicates that housing costs may rise in the 15-20 percent range as a direct result of HQ2. (http://www.mcenearney.com/blog/2018/11/impact-amazons-hq2-move-northern-virginia/). This rise will not happen over night as it will take a number of years before most of these 25,000 employees are hired (and as many as another 10,000 support workers are added), but it is clear that renters are going to be jeopardized.

Current home owners will reap an unexpected windfall, but only when they sell their residence and in the meantime will pay higher property taxes. Most homeowners are not interested in selling and leaving Arlington in the immediate future, and so they will experience an increase in their property taxes which now average about $7,000 a year. Homeowners–expect to pay another $1,000 to 1,400 a year in taxes.

Renters, who are about 55 percent of Arlington residents, are going to be severely impacted, and there is no upside for them but simply paying higher rents. The McEnearney analysis does not specifically indicate how much rents will rise, but indicates areas close to Crystal City both in Arlington and Alexandria will experience the highest rent pressure. It is certainly prudent to expect rents to rise by at least by half the rise expected for prices of homes and condos: this would mean a rent increase of 7-10 percent.

The average rent in Arlington in 2017 was about $2,000 per month for an apartment, and thus renters should expect a $140 to 200 a month increase in rents charged. Rents are much higher in high rise buildings (above $2,500) and lower in garden apartments ($1,800) so the effect will vary but most of the apartments in Crystal City, Pentagon City and Potomac Yards are high rises.

There are fewer than 2,000 market rate apartments that are affordable to anyone earning 60-percent or less of the area median income in Arlington, and virtually none in these three areas. In 2013, there were 17,000 households earning 60% or less of the area median income (AMI) ($51,000 for a couple) who account for 30 percent of Arlington residents. (Arlington County Affordable Housing Master Plan, p. 37).

Most renters today earning 60 percent or less of the area median income are housing cost burdened, meaning they are paying more than one third of their income for rent. Another $200 a month in rent is going to further their housing burden, and in many cases they will leave Arlington for cheaper, far suburban areas like Loudon or Prince William Counties.

Arlington County Board has proposed to spend an additional $7 million a year to subsidize the construction of 100 units a year (a subsidy of $70,000 per unit). Unfortunately most of the $7 million will be absorbed by the housing builders and developers and only a few people will be able to get into these units.

Meanwhile, a 10-percent rent increase across the 50,000 apartment units in Arlington means that the total rent increase will be in the $100 million range, a great windfall for apartment complex owners but a loss for renters. The county board’s offer of $7 million would only cover an insignificant fraction of the total rent increase, and in essence is just window dressing.

About four years ago the county board adopted the affordable housing master plan with an annual goal of the county providing 630 households earning under 60% AMI with housing assistance to be able to rent an affordable unit in Arlington. https://housing.arlingtonva.us/affordable-housing-master-plan/ unfortunately the county added fewer than 300 units a year, and, last year, cut the amount of financial housing assistance for rental grants for seniors, disabled persons and families with a child, all of whom earn under 40-percent AMI.

The HQ2 will mean a worsening of the housing burden for all Arlington residents, and will disproportionately affect those lowest in income who tend to be black, Latinos, the elderly, the disabled and the young. The HQ2 deal is consistent with the unstated Arlington County’s goal for many years to displace lower income people and replace them with the affluent. It means a whiter, richer, and less diverse community with no place for working people, the elderly or young professional just starting their careers.

The Arlington County Board is going full speed ahead to sell its deal to provide hundreds of millions of public local tax dollars to Amazon for a new headquarters in Crystal City, and the “listening session” in mid-December at Gunston Middle School just highlighted this full bore sell campaign.

County Board members present heard an earful of good objections to giving this corporate giant any of our local tax dollars, and then gave bogus arguments in favor of this deal.
County officials and some board members present gave misleading reasons on why Amazon HQ2 would be good for Arlington County—Arlington needs more jobs; Metro can handle the transit problem of 25,000 more employees and they won’t clog up our streets; Amazon will fill up vacant office space which will raise more local tax revenues and improve county finances; and new GMU and VA Tech IT campuses are needed.

Crystal City High rise Buildings

Arlington Needs more Jobs in Crystal City?
Katie Cristol, a county board member present, said that Crystal City lost over 35,000 jobs when the Department of Defense moved employees to other areas of Northern Virginia with the so-called BRAC realignment beginning around 2005. This is misleading.

It is true there are fewer federal employees in that area of Arlington after BRAC, but total employment throughout Arlington is 28,000 higher today (up from 196,000 in January 2004 to 224,000 in January 2018). Other employers have picked up the slack, and added more jobs to Arlington. There is one job in Arlington for every resident, and the unemployment rate is about 2 percent. Arlington does not need to subsidize businesses to come to Arlington—they already are locating here without a fat subsidy from taxpayers.

The office vacancy rate in Crystal City is about 18 percent today, and it is true that the main commercial realty company JBG/Smith there is having a hard time renting its vacant space. Still, Crystal City does not have the highest vacancy rate among all business areas in Arlington, the highest vacancy rate is in Ballston and Rosslyn, each with 24 percent. Filling office space is NOT the taxpayers’ or county government’s problem but JBG’s or other realty company’s problem to solve.

>Metro and buses can handle another 25,000 employees, and there will be no further traffic congestion, and Arlington County needs to spend $360 million on Metro in Crystal City?

The county transportation director said at the Gunston MS meeting there are far fewer Metrorail passengers using Crystal City Metro stations today than a decade ago, and that, therefore, Metro can handle 25,000 more employees working there. Just spend $360 million and add new entrances to the existing Metro stations, and voila.

The reality is that Metrorail ridership is down substantially, for example daily weekday ridership declined by 25 percent on the Orange Line during 2000-17, according to WMATA data. The decline is mostly because of train breakdowns and unreliable train service, but also Uber and Lyft competition. Under its current state of disrepair, Metro can barely handle current passengers. Metro rail cannot handle another 25,000 passengers into/from Crystal City today, and the problem is not a lack of Crystal City Metro stations or entrances but rather a lack of reliable service of the trains. Amazon employees will drive to work, use Uber and Lyft, clog up our neighborhood streets, and make life miserable for Arlington residents as well as themselves.

Metrorail needs a massive infusion of billions of dollars to fix equipment, trains, and stations that now exist. The county wants to spend $360 million to add two new unneeded entrances to Metro stations in Crystal City and Pentagon Yards; these funds instead should be directed to Metro rail operations and infrastructure. The rest of us in Arlington depend on Metrorail, and just fixing up two stations in Crystal City will do nothing to fix the Orange, Blue or Silver Line delays or help Arlington residents with effective mass transit.

Filling vacant office space will automatically raise county tax revenues and improve county finances?

Libby Garvey, another county board member present, said the HQ2 deal will reduce the average office vacancy rate in the county from 18 to 14 percent, and this will raise county tax revenues and improve county finances. Roughly each drop in office vacancy rate in Arlington yields about $3.4 million in local tax revenues annually; so a 4-percentage point drop yields another $13 million a year. However, HQ2 is expected to draw up to 5,000 employees to live here, who will add another 1,000 public school children who will cost the county about $20 million more in school spending. Other costs for non-school county services will rise nearly as much. So, the NET tax revenue increase is going to be very small once the cost of additional public schools and county services are deducted.

The county board is taking responsibility for lowering the office vacancy rate but this is no business of local government, rather the problem of the largest landlord JBG/Smith to fix.

Another graduate campus for GMU and VA Tech at a cost of $375 million or more will benefit Arlington residents

The State of Virginia has promised at least $375 million to build a new campus for a VA Tech and GMU that would have graduate IT education. Why?

There is no evidence today that there is a shortage of IT graduates coming from local or other nearby universities. Why should the government subsidize Amazon and train its employees who earn $150,000 each? There are hundreds of colleges that provide IT graduates all over the U.S. today, and scores in the D.C. area already that offer advanced degrees in IT. We don’t need any more colleges in our area.
Arlington probably has the most educated population in any county in the U.S.–Arlington residents do not need another college here.

Amazon located in Arlington because it is within the second largest region in the U.S. with current IT employees (New York City being the largest Metro region). IT employees will come from all over the U.S. to work for Amazon. These Amazon employees will be earning $150,000 a year, and they can pay for their own education.

Perhaps if this $375 million went to pay the costs of college education for lower income students in Arlington and in Virginia graduate from college, this might be a good idea. This amount could finance total college costs for 1,200 low income students per year for the next 20 years! There are many low income students from other parts of Virginia who also need a chance to succeed so why not provide college tuition grants to lower income students from Arlington and all over the State?

Arlington County now spends about $20,000 or more per student for K-12 education. Lack of funding is not an issue for Arlington for so-called STEM education. We don’t need the funds for our K-12 IT studies either.

Arlington County and the State of Virginia’s subsidy package for Amazon to locate its HQ2 facility in Arlington is another version of trickle-down economics or voodoo economics theory that giving more public funds to the rich and corporations will trickle down to lower income and middle class people. This is yet another episode in the Democratic county board’s determination to gentrify Arlington and eliminate the few remaining moderate income residents, both renters and homeowners and replace them with households earning well in excess of $150,000 a year.

The first impact on Arlington housing will be to raise rents and to raise prices of condos and houses. In Arlington a majority of resident are renters and not homeowners, and renters will clearly pay a price in the form of higher rents. The Arlington County Board has promised to spend $7 million a year to add 100 subsidized apartment to help renters, an amount so small in relation in relation to Arlington’s over 50,000 rental units as to be a joke.

The county and the State are giving Amazon roughly $1.5-2.0 billion in incentives; the chief beneficiary is the CEO and principal owner of Amazon Jeff Bezos, the wealthiest man on the Planet. So the premise is that if taxpayers in Virginia and Arlington give the richest man on Earth $2 billion, then there will be a wonderful world created that will trickle down prosperity on the rest of us.

The Arlington County Board’s mindless enthusiasm over giving Amazon as much as $400 million as incentives for 25,000 more Amazon employees to Crystal City within a decade or so must be dampened with the likelihood that higher local government expenses will absorb a high share of the expected higher tax revenues and that the cost of the subsidy itself will have to paid by current taxpayers.
The essential problem for Arlington is that we spend today about $22,000 per public student, and it is expected that these new Amazon employees will add at least 1,000 students to APS. Our schools are already overcrowded, and these new students will require the equivalent of two new elementary schools or a new middle school or a new high school. The new residents will also need our other services—recreation, libraries, social services, police and fire, sanitation, and the myriad services we Arlington residents cherish.

A George Mason University (GMU) report in November 2018 by Stephen Fuller found that a new Amazon HQ2 in Crystal City would add about 8,000 Amazon related households to Arlington, (The Economic and Fiscal Impacts of Locating Amazon HQ2 in Arlington, VA,). It also highlights that currently Arlington County spends $850 more per capita today than it gets from tax revenues so adding 8,000 new households with around 2 persons/household means that Arlington’s fiscal deficit rises by about $15 million, which is somewhat offset by $8.7 million in added tax revenue. Non-resident Amazon employees are expected to generate tax revenues that will add up to $19 million in tax revenue,

However, if one uses current school spending costs of almost $22,000 per student to obtain more accurate fiscal costs in Arlington, then the net fiscal impact of HQ2 shrinks to about $5 million a year. This is a trivial or negligible sum, compared to Arlington County’s annual fiscal revenues of about $1.3 billion in FY 2017. It also underscores how fragile are reports that there will be a large positive impact on Arlington of HQ2.

Beyond the higher school and services spending to meet the needs of these new Amazon employee residents, the county government will still have to pay off the $359 million in infrastructure bonds for Crystal City, come up with $7 million more per year for 10 years for affordable housing assistance, and then pay Amazon roughly $51 million from TOT and IFF funds over 10 to 15 years. This merely adds to net fiscal deficit that Amazon HQ2 will bring to Arlington.

This trickle down deal for Mr. Bezos the richest man in the Planet certainly provides a financial boost to Amazon, but it will cost Arlington taxpayers big time.

Bailout for Amazon and developers and tax rise for everyone else

Arlington County has now pledged upwards of $400 million for Amazon HQ2 in Arlington, but the hard part is yet to come as to how they will come up with such a sum. Likely they will have to significantly raise taxes in Arlington on current residents so that this boondoggle can be financed.

The announcement in early November 2018 that Amazon would locate 25,000 employees to the Crystal City area of Arlington (with another 25,000 in Queens New York City) brought loud acclaim from elected Arlington and Virginia officials who proudly outlined how they are going to give Amazon about $1.5 billion of taxpayer funds to one of the largest corporations in the world. The State of Virginia will provide $550 million in direct cash ($22,000 per job added), $200 million for transport; $375 million for a new VA Tech campus and expanded GMU campus, and $50 million for k-12 tech education.

Arlington will provide about $450 million dollars: $137 million for transport (combined with $220 million previously committed) in Crystal City; $20 million for direct subsidies for Amazon; and $70 million ($7 million more per year for the next ten years) for affordable housing assistance.

The politicians apparently expect that over the long run that the promised 25,000 more employees in Crystal City who earn $150,000 will provide significant more income tax and sales tax revenue, and in addition, fill empty office space in Crystal City to boost real Arlington estate tax revenue. All of these conclusions depend on a series of shaky assumptions, and, in any event, it will take years to attain, whereas the county and state will need to finance their promises immediately.

Virginia’s income tax rate is about 5 percent, and, assuming that 25,000 employees earning $150,000 were to live in Virginia, this generates $200 million more annually in Virginia income tax revenue. However, many of these employees will not live actually in Virginia or already live here, and many will likely live in Maryland and the District of Columbia (2 Metro stops away). Even if half of the new employees live in Virginia, the annual increase in income tax revenue shrinks to be less than $100 million. Arlington can expect to receive maybe one fourth of the state income tax or $25 million a year.

County board members have long deplored the high rate of commercial office vacancy in Crystal City and other parts of Arlington (the rate is 18 percent) is higher than it was 10 years ago. However, the national office vacancy rate is nearly this same average level as Arlington—about 16.5 percent according to Reuters, so Arlington is not that unusual compared to other U.S. metro areas. The county board wants to fill up offices in Crystal City, but Amazon will not fill up the vast empty buildings in Ballston or Rosslyn or the dozens of new buildings under construction today.

Filling more office space in Crystal City will not fill empty space in Ballston or Rosslyn each of which have a 24-percent vacancy rate. Filling empty office space in Crystal City with Amazon will eventually raise commercial rents there, and then drive out current businesses that then locate to much cheaper Reston or Tysons Corner. The county board is not responsible for irrational realty companies with trillions of dollars to spend nor can we ignore the maniac building boom in Tysons and Reston since the Silver Line opened.

How will Arlington finance its subsidies to Amazon? Arlington County has issued or authorized to issue about $1.4 billion in long term bonds for its schools, Metro, community and recreation needs, and cannot exceed that amount or its credit rating (now AAA) will drop raising financial costs for taxpayers. So it cannot issue another $300 million in general bonds unless it wants to impair its credit rating.

Arlington county operating budget has been very tight recently as rising school and Metro-rail costs have absorbed nearly all the increase in tax revenue, and cuts were made to other programs. In 2018, the county board cut spending for affordable housing assistance (housing grants), environmental programs, and adult education. There is no significant cash or rainy day fund to use, and 2019 will be another year when another $10 million will be needed for the public schools and the troubled Metrorail will need another infusion of capital.

Where then will the county get the short term funds to finance Amazon? It will have to raise the tax rate for the 230,000 current Arlington residents–higher property taxes for homeowners, renters, and l commercial businesses. In essence, the county board will force we the resident and voters in the county who will reap NO significant benefit from Amazon moving to Crystal to pay higher taxes to finance this corporate piggy deal.

The county board and the State of Virginia are playing a dangerous game of picking winners and losers in a capitalist world using tax payers’ funds that are urgently needed for other things, like schools, Metrorail, affordable housing assistance, recreation and parks, public safety, and community infrastructure like storm sewers and sanitation.
It would be far better for the county government to simply welcome Amazon and refuse to give them one cent of public dollars.

Arlington Greens will meet on Wednesday, Dec. 5 at 7:30 PM at the Ballston Fire House located at N. George Mason Drive and Wilson Boulevard, Arlington, VA  22203.   The public is welcome to attend, but only members can vote.  Membership is open to any Arlington resident for $5 annual dues.

Agenda items

Outcome of local election and implications

Historic preservation of Westover Apartments

Amazon Headquarters in Arlington

Arlington Energy Plan and environmental advocacy in 2019 with the Virginia General Assembly

Plan to attend.

For more information, email John Reeder  info@greensofarlington.org

Arlington Greens Oppose as Wasteful the Three County and School Bonds on the Arlington County, Virginia November Ballot, but Support the Metro Bond

Arlington Greens voted at their October meeting to oppose three of the four bonds on the November ballot, but to support the $75 million bond for Metro and transportation.  Greens felt that the need for more spending on Metrorail is imperative given safety, and improving bus and rail reliability, and urged Arlington voters to vote “Yes” for the Metro bond on the ballot referendum.

Greens however oppose the $29 million parks and recreation bond, the $37 million community infrastructure, and the $103 million public schools bond.  None of these three bonds are based on well thought out projects that have already been carefully designed, bid for construction costs, and scrutinized for waste.  The parks and recreation bonds will actually destroy or impair parkland since it will be used to build and pave over existing green space, demolish trees, and build extravagant energy-wasteful buildings.

The county government is issuing $80 million in bonds this year, and moreover has another $108 million in unused authority to issue more bonds, with more than sufficient funds for its needs. The county government and the school board both need to go back to the planning boards, and come back with precise and accurate information on projects for Arlington voters to consider.

About $44 million of the proposed $103 million school bond is to be used to build an entirely new Reed Elementary School in Westover.  The latest estimated cost of Reed is already far more at least $55 million, with possibly tens of millions of dollars in costs for a parking garage.  The school board has no idea what Reed School will cost.  In 2009, the school board spent about $20 million to fully renovate and expand Reed School which now will be demolished. Why?

The City of Alexandria just opened a new elementary school that cost around $22 million and was completed in about one year.   The City bought an commercial office building and re-modeled it into a 500-student school that opened in one year.   Fairfax County Public Schools did this several years ago to build an elementary school at 7-Corners within one year.   Why does Arlington have to build the most expensive schools in the U.S. and then tear them down ten years later?

If the county goes ahead and issues another $243 million of bonds on the ballot in November, it will likely endanger the county’s triple-A bond rating for municipal bonds since this will pass the 10 percent limit on bond service used by leading municipal bond rating companies.

The county already has issued $1.1 billion in bonds, and adding $243 million as well as the $188 million in already authorized bond will raise the debt service to over 10 percent of the county’s general revenue.