Region's Builders Rein In Visions

Bob and Carolyn Stockton had hoped a revitalization project would attract business to their Springfield barbershop. (By Dayna Smith For The Washington Post)

By any measure, the Washington region's struggles have not nearly approached those in states such as Florida, California and Nevada, which are enduring a combination of plummeting real estate values and rapidly escalating foreclosure rates.

Equally apparent is that construction crews can still be found building large projects. On March 29, the Nationals are to open their ballpark in Southeast Washington, a neighborhood vibrating with office and residential construction. In Prince George's County, hundreds of acres of dirt are vanishing as the long-awaited National Harbor hotel and convention center takes shape.

Along the 14th Street corridor in Northwest Washington, developers are completing projects from Florida Avenue to Columbia Heights, where the District's first Target store is slated to open in early March.

Those projects were conceived and financed long before the slump began. "Many of the cranes you see in the air represent deals that were underwritten a year and a half to two years ago," said developer Jim Abdo. "The deal flow is literally like a spigot. Certain types of development deals have literally been turned off."

A sampling of statistics tells part of the story. In the District, nearly 2,000 units of housing were slated for construction in 2007, roughly a third less than the previous year's total. In Prince George's County, developers sought 78 subdivision permits last year, while more than 500 plans were submitted in 2005.

Across the region, there were just over 20,000 residential building permits issued in 2007, about half the number issued in 2005 and the fewest since 1991, when 16,500 were granted, according to an analysis of U.S. Census figures by Stephen S. Fuller, a professor at George Mason University.

Evidence of a changing market is also palpable on the ground.

More than 700 acres of farmland is slated for several thousand housing units in Upper Marlboro, just outside the Beltway, with easy access to downtown. At least part of the project is now in limbo because Pulte Homes' plan to build more than 2,000 homes has stalled.

While a Pulte spokesman acknowledged only that the company is negotiating to restructure the deal, a source familiar with the talks said the builder is seeking to withdraw. The developer is looking for a new partner, said the source, who spoke on the condition on anonymity, citing the private nature of the negotiations.

A few miles away, along Lottsford Road near FedEx Field, several parcels where developers promised office buildings remain untouched. Weeds are sprouting on one plot, where earth-moving equipment has sat idle for months. Signs advertise space for lease on many office buildings in the corridor.

While Prince George's leaders have long pushed for high-end housing to replace time-worn apartments, developer Mark Vogel cautions against establishing unreachable goals when a more modest approach may be prudent.

"Why are we ashamed of being a middle-class market?" he asked. "Our county always wanted to push the envelope. All the politicians wanted upscale, upscale, upscale. But we're not upscale. We're middle class, and there's nothing wrong with serving our teachers or middle-class people who don't make a bazillion dollars a year."