Economic Woes Render Growth Debate Moot

In once-booming Charles County, combined commercial and residential building permits declined 26.5 percent last year from the year before, and the county had 984 foreclosures filed with the Circuit Court, nearly double the number in 2006.

In Prince William, where the county board is considering a 27 percent increase in the tax rate, 1,298 building permits were issued for single-family homes in 2007, about 40 percent of the number issued in 2005.

Although difficult, the economy has been an impetus for reform, officials said.

In Loudoun, Buckley said she wants to spend the entire year, not just a few hurried months, looking at ways to cut costs and increase revenue. Ideas on the table include scaling back property tax breaks on such items as airplanes, expanding the county's rainy day fund and cutting the size of government, she said.

However, capitalizing on the slow rate of growth to make gains on infrastructure will be difficult, some researchers said.

"It's a 'damned if you do, damned if you don't' " situation, said Christopher Leinberger, a developer and visiting fellow at the Brookings Institution. "In good times, you're flush with capital, but you're running so fat you're trying to keep up with sprawling demand, and then in bad times, you don't have the wherewithal financially to put in infrastructure."

The housing slowdown is probably cyclical, and the suburbs will eventually bounce back -- but possibly in an altered form, analysts said.

The market is trending toward smaller, attached homes, said Arthur C. Nelson, co-director of the Metropolitan Institute at Virginia Tech. He said surpluses of large-lot detached homes in such places as Loudoun and Prince William are just the "tip of the iceberg"; his research indicates that by 2025, there will be a surplus of 22 million such homes nationwide -- about 40 percent of the stock that exists today.

If the suburbs want to revitalize their housing markets, "they'll have to be reformed," he said. "The smart suburbs will figure out where the market trends are and retool their zoning codes."

But in an indication that the growth debate is likely to bounce back as well, some are unconvinced of that projection.

"Suburbia doesn't necessarily want to turn to urban, and not everybody wants to live in a condo," said Hobie Mitchell, a Loudoun developer who said the market has many developers in a holding pattern. "People still want to have a single-family house on a decent-sized lot where the kids can play in the back."

Staff researcher Meg Smith contributed to this report.