Not in My Condo’s Backyard!
Folks who live in the District’s residential neighborhoods have a strong sense of entitlement to quiet, to parking, to darkness at night—all the things that come with the kind of house where you can have a driveway and a picket fence.
Living downtown is supposed to be different. This is the District’s public zone, after all, full of tourists and revelers. Aren’t noise and flashing lights what you sign up for when you rent an apartment or buy a condo in Gallery Place? The question practically asks itself: “I mean really, what did you expect?”
But downtown D.C. is still D.C., as Monumental Sports and Entertainment found out this past month. The company, which owns and operates the Verizon Center and its three pro sports tenants, wanted to add nine digital displays to the side of the building, advertising everything from iPods to insurance. All it would take is a tweak to D.C.’s special sign law, which Monumental argued would be a win-win for the city: $8 to $9 million in tax revenue over four years, plus a glitzier and more glamorous Gallery Place that would draw revelers at night.
“If you go to Times Square, people come there to see the signs,” said Randall Boe, Monumental’s general counsel, at a recent meeting of Advisory Neighborhood Commission 2C. “Tourists come, and that helps build the neighborhood.”
Times Square might not have been the right image to evoke when pitching a change to a neighborhood that’s increasingly full of people who just want a good night’s sleep. Census figures show more growth downtown, percentage-wise, than any place in the city: The core almost doubled in size, going from 4,900 people in 2000 to 8,500 in 2010. Although the condo association nearest to the Verizon Center approved the signs, residents from surrounding blocks quickly took issue with covering the arena with flashing lights.
“I don’t think any of the other residents who moved in here thought, ‘I want to see big billboards,’” says Downtown Neighborhood Association president Nanette Paris, who says she could see the lights from her apartment at 8th and E streets NW when the Gallery Place movie theater first opened. And she doubts that the kind of people coming in will benefit the neighborhood much either, like residents do by patronizing high-end restaurants (though, of course, plenty of non-residents come to her neighborhood from elsewhere to go to the high-end restaurants, too). “What are those people going to do, stand around and gawk at the signs?” she asks. “Are those the people who are going to Proof, to Rasika?”
The problem, Paris says, is that in its rush to foster an entertainment zone downtown, the city sometimes forgets that residents create jobs and pay taxes too—and there are now enough of them to look out for their own interests.
If the city’s priorities for Gallery Place conflict with those of residents, officials should have been able to see problems coming—mostly because the city caused them. Over the past two decades, the District government has worked hard to bring about the residential community that’s now asserting its rights.
It wasn’t easy. At first, starting in the 1980s, the federally-chartered Pennsylvania Avenue Development Corporation sold off land on the condition that developers use it to build housing. One of the first completed projects was the Lansburgh, a 400-unit apartment building (named for the department store that used to operate there) between 7th and 8th streets. Kevin Wilsey, who’s managed the building for the last 15 years, says it was a tough sell: Apartments didn’t rent, and they had to lower rates until they did. Wilsey himself had to move there from Arlington, which didn’t please his wife. I ask him what she was afraid of.
“I think nothingness,” Wilsey replies, laughing. And the city wasn’t doing much to help by fostering a club district along F Street. “You can’t set up a 5,000 seat nightclub next to a residential building; it just doesn’t work,” he says. (In fact, the 9:30 Club used to be right around the corner; it closed and moved to V Street about when the condos came.)
There were a few turning points. The privately-built MCI Center (now named Verizon) opened in 1997, drawing people downtown at night. Special zoning in the area took effect in 2000, giving housing developers the right to build more densely than usually allowed. Then-Mayor Anthony Williams even handed out tax abatements for residential development.
It worked. By the mid-2000s, condos were selling out, as the national real estate boom came to the District’s newest neighborhood. Jo-Ann Neuhaus, who had worked for the Pennsylvania Avenue Development Corporation and is now executive director of the 23-year-old Penn Quarter Neighborhood Association, says she saw her annual holiday party swell from a small affair in the Navy Memorial to a full-blown gala in the National Building Museum. Residents don’t have the same feeling of abandonment as when there were only a few hundred of them scattered between Pennsylvania and Massachusetts avenues.
It’s taken the city a while to realize that downtown isn’t just a sterile office district, though. Until recently, Wilsey says, it would permit construction to start at 9:00 p.m., figuring that nobody would be around to hear it.
Who are all these new residents, and what do they want?
First of all, they’re wealthy. While early on it was possible to buy condos in the $100,000 to $200,000 range—“These weren’t people who were buying in the Watergate,” says Neuhaus of that misty past—the average cost is now $535 per square foot, which comes out north of half a million for the smallest of units. The city didn’t prioritize affordable housing downtown, figuring its subsidies would go further in cheaper neighborhoods. And since all the apartment buildings became residential after rent control went into effect, all of them are market rate. That means rents of $3,000 a month for a one-bedroom in some buildings. According to surveys conducted by the Downtown D.C. Business Improvement District in winter 2011, a plurality of household incomes—35 percent—fall between $150,000 and $300,000 per year.
Downtowners are also childless. The BID’s data show 94 percent of respondents don’t have kids, which means there’s not much demand for things like playgrounds in the small parks nearby, which would be difficult to set up anyway.
All of that adds up to an awful lot of disposable income in the neighborhood. But in an area that’s a shopping and entertainment destination for the whole city, retail doesn’t really match the local demographics. Mid-market stores like H&M, Zara, and Forever 21 are doing well, but TJ Maxx is moving into the Homer Building on 13th Street*—not the higher-end Nordstrom, which downtown residents ranked number two out of a list of stores they’d like to see in their neighborhood (number one was Target). Residents only got a grocery store in 2008, the CityVista Safeway at 5th and L streets—a planned Balducci’s on 7th Street fell through during the economic collapse—but now 67 percent of residents say they shop for grocery items in the area (up from 10 percent in 2007). Downtown isn’t quite dense enough for retailers to make money just by catering to local residents; offices still abound, driving rents up, so stores have to serve broader audiences.
Neuhaus and Paris are downtowners by nature. Both spent long periods of time in Manhattan (to Neuhaus growing up, “the only house in the city that had a lawn was Gracie Mansion”). So they say they appreciate the urban lifestyle. But while downtown has been growing, it’s still a different kind of community than the surrounding neighborhoods. Wilsey’s building has very high turnover; he says many residents came to work at the Department of Justice or Federal Bureau of Investigation, and might take another job in a few years. As much as those folks might patronize local restaurants and businesses, they don’t tend to get involved in local politics (which, from the Verizon Center’s perspective, isn’t a bad thing at all).
That transient constituency isn’t going away, and unlike other cities where buildings aren’t capped by height limits, it won’t be diluted by other kinds of residents, either. The last big piece of downtown is getting built right now: CityCenterDC, which will have 674 condos and apartments total. Only 150 units are in the pipeline after that, compared to 5,444 in NoMa and 4,624 in Capitol Riverfront, by the baseball stadium.
So it looks like downtown is pretty much as big as it’s going to get. And it looks like it’s finally grown up enough to ask for what it wants.
* Corrected from an earlier version; Filene's Basement is leaving the National Press Building, but a replacement hasn't yet been announced.
Got a real-estate tip? Send suggestions to email@example.com.