Building Booms & the Drawbridge Effect

I’ve written before about the building moratorium in Chevy Chase, MD, where our new home happens to be under construction (and not affected by the moratorium). Well, since then it’s become a national story. We missed the Sixty Minutes story last Sunday, since it’s the kind of stuff we don’t watch until Parker goes to bed, but I managed to find the written version and video online, and found some of it very interesting though it painted a somewhat incomplete picture of things, at least based on my experience.

The Maryland town of Chevy Chase has become divided over size.

Pat Rich has seen eight teardowns on her street, including the house next door. She has a nickname for one the homes in her neighborhood: Wal-Mart.

“I just don’t know why people need that much space because it’s not as though everybody has a lot of children. Coming in here are two people,” says Rich.

The Riches have been offered $1 million for the house they paid $19,500 for in 1960.

One builder, Rich remembers, offered a sob story about wanting to buy a nice little house for his ailing mother “so he could be close to her. I think she’d last about a month and the house would come down.”

Chevy Chase finally decided to put a temporary moratorium on all teardowns.

Greg Bitz is not happy about the moratorium. “I bought a house in a country, in a county and in a town that believed in freedom, not in a town that wants to legislate taste, to rule what, where, when and how people can do things to their homes that they have invested, in some cases their life savings,” says Bitz.

He paid $726,000 for a house he wanted to tear down, but Mr. Bitz has been blitzed.

The house he bought was about 1,100 square feet. The house he planned to put in its place would be a bit more than 3,000 square feet.

Except that’s not quite the whole story.

First, the only reason we’re not in the same position Greg Bitz is that we broke ground well before the moratorium went into effect. However, if you just watched the video and listened to the report you’d get the sense that most of the homes that are being torn down are homes that the folks buying properties in the area should be perfectly able to live in “as is.” And there are some fine homes that are original to the community.

But Chevy Chase was a planned community to an extent, and the plans included houses like the one that used to be on our lot, that are now worth a lot less than the land they’re sitting on, and that aren’t likely to be lived in by anyone who can buy the property. I didn’t see the inside of the house that used to stand on our lot, but judging from the outside it looked a lot like the kind of house I grew up in for the first 10 years of my life; small, built in the 1950s, and built as cheaply as possible. At most it had an eat-in kitchen and a living room in front, two bedrooms in back with a bathroom shared between them, and probably clocked in at no more than 1,000 and most likely came in under that. The house that’s being built, plans for which were underway before we entered the picture, comes in at less than 3,000 square feet, which is less than a lot of the houses depicted in the Chevy Chase portion of the Sixty Minutes story.

The existing house on the lot wasn’t going to sell to anyone who could pay the cost of the land it sat on. That’s part of the problem with Chevy Chase. It has two things that appeal to people looking for homes in the area which tend to drive up the cost of land and housing: great schools and close proximity to D.C.; in other words, the best of the city and the suburbs. If D.C. disappeared tomorrow, taking with it the perks of proximity to it, property costs in Chevy Chase would likely plummet and it wouldn’t need for a building moratorium because fewer people would probably seek to move there and those that did would have different reasons for doing so.

Not everyone in Chevy Chase is up in arms. All of the neighbors we’ve met seem as enthused as we are about the house, and are glad it’s being built based on what they’ve said to us. That may be because they know that if there were more limits on what could be built on the lot, the old house would probably stand empty because no one who could buy the property would buy the if there were stricter limitations on what they could build. No one is going to pay a lot of money not to be able to live the way that they want to. And people do live differently than they did 50 years ago. That’s part of the reason that most of the houses in our neighborhood — built just like the old one on our lot — have been remodeled, expanded, or rebuilt entirely.

So, with the real estate market already cooling and the moratorium placing even more of a chill on anyone’s willingness to spend the money buy in Chevy Chase, it’s likely that some of those homes that might have met the wrecking ball will just stand empty and turn into eyesores, or worse. And with significant aged and aging population the suburb there will likely be more and more such houses. (The previous owner of the old house on our lot died.) But at least the character of the neighborhoods will remain intact. Sort of.