A Tall Order for the D.C. Office Market
Monday, February 5, 2007
Skyscrapers in Washington?
Well, not quite. But Christopher B. Leinberger, a land-use expert at the Brookings Institution, last week brought up the prospect of raising the height limit on buildings in the District. He didn't specify a height but encouraged community leaders, planners and developers to at least entertain the idea.
"Things have changed," he told a standing-room-only crowd of about 130 people at the National Building Museum as he played the 1960s song "Downtown."
"We have an office market that needs to go someplace," he said. "Density is critical. We're running out of land. We need to build up."
But changing the height rule would require an act of Congress, which in the early 1900s passed an act prohibiting buildings from being more than 130 feet tall, according to former city planning director Ellen McCarthy.
Leinberger spoke about the demand to move back into cities at an event sponsored by the National Building Museum and the D.C. Office of Planning.
In the past 60 years, Leinberger explained, the District has lost some of its share of leased office space to Tysons Corner and Montgomery and Loudoun counties as companies built offices "near where the boss lived." At the beginning of 2005, one-third of the leased office space in the region was in the District.
But then more people and companies came back to the cities, and in 2006, 46 percent of the office space leased was in the District.
Leinberger said the city is running out of land and is expected to be built out in 10 years. He said raising the height limit could take pressure off developing in and around historic districts, lower rents that are upward of $60 a square foot downtown and increase tax revenue for the city.
"Ten years ago the air rights above NoMa were worthless," Leinberger said of the area north of Massachusetts Avenue. He said that if developers could build in the air rights of NoMa, $320 million worth of value and $120 million in tax revenue annually could be generated from the projects. He estimates that 16 million square feet of space could be built there.
"There's value sitting out there," Leinberger said. He said there is also potential to build in the air rights of other developing areas, including Anacostia and along the Potomac River.
Developer Bruce Baschuk, who is working on projects in NoMa, said he would welcome the opportunity to build more densely, if the community thought it "could benefit from more robust growth." In exchange, he said, developers should be required to put in such amenities as parks and community centers.
Raising the height limit should be considered "where you have underutilized land or vacant land," Baschuk said. "Most of the people who bought land in NoMa bought there with the existing height limits. But if they came to us and said, 'You can build more,' we'd do it. It would be more lucrative, but we should have to horse-trade and give something in exchange for it."
Baschuk said raising the height limit in certain areas wouldn't lead to a glut of space or lower rents because not every developer would do it at once.
Raising the height limits has come up before, according to David Maloney, deputy state historic preservation officer for the District, but has never gone anywhere. "It's come up from time to time, sometimes seriously and sometimes not so seriously."
Some in the audience agreed that raising the limit would create denser neighborhoods. But not everyone was interested in the idea.
"Rosslyn has tall buildings and views of the city, but if you change the height limit and someone builds in the air rights above the Watergate then you've blocked that view," said Don Kreuzer, a dentist who has lived in Foggy Bottom for 35 years. "D.C. is beautiful because of the height limits. If you change that you're going to ruin the view."
Dana Hedgpeth writes about economic development and commercial real estate. Her e-mail email@example.com.