Housing Complex

We’re Number One! (In Filling Offices)

It's the moment you've all been waiting for: The third-quarter office vacancy numbers are out. And D.C. still has the lowest vacancy rate in the country.

I'll take this opportunity to link to my predecessor's thorough case for scrapping the Height Act, an argument she's hardly alone in making. At the risk of lacking nuance, the argument, in a nutshell, goes like this: By capping the size of office buildings within District limits, the law holds down supply, drives up the cost of office space, and puts D.C. at a competitive disadvantage. D.C.'s continued low vacancy rate is evidence of the imbalance between supply and demand.

But I'd be remiss not to note that D.C.'s office vacancy rate is in fact rising, as the national vacancy rate shrinks. According to Reis Inc., which supplied the figures, office vacancies in the District have steadily crept upward since the second quarter of last year, from a rate of 9 percent at the time to 9.5 percent now. Reis blames “political deadlock and contracting government employment" for the decline.

Indeed, Congress is unusually deadlocked these days—it's even taken a toll on lobbying—and about a million public-sector jobs have been lost since President Barack Obama took office. So it's likely that the drop in office vacancy is a product of (hopefully) temporary circumstances rather than any sort of structural decline, and that the city will continue to face a crunch as long as the office supply remains limited.

Photo by Darrow Montgomery

  • LittleTavern202

    The Height Act is likely partially responsible for the rapid gentrification of neighborhoods. You have 4-5 story box condos spreading instead having of towers you see in other cities.

    One could argue that because of the height act, neighborhoods that would otherwise have been ignored are now being "revitalized", but that's at the expense of the generational true DC natives who are pushed out. With taller buildings, it would be easier to keep both high and low income residents.

  • Lance

    " At the risk of lacking nuance, the argument, in a nutshell, goes like this: By capping the size of office buildings within District limits, the law holds down supply, drives up the cost of office space, and puts D.C. at a competitive disadvantage."

    hmmm ... so how do you account for all the new office space going up in near South East? 'within District limits' there are many many underutilized commercial areas where the height limit is not playing a part in preventing construction of more office space. Given that commercial developers always have the option of building in these areas (as they are doing in near Southeast and in NoMA and other DC areas) it's a false claim to make that they are being pushed out to the suburbs (or even other cities around the US). Like your predecessor, you are falling victim to the canard being offered by the commercial developers who'd like the opportunity to cash in with an extra floor or two in ALREADY successful commercial areas in DC, rather than participate in helping transform more areas around DC into equally successful commercial areas. Adding the extra floor or two in areas with already high rents is that low hanging fruit that's just two tempting to at least not try to obtain. That's their job as profit-minded individuals and no one can blame them for trying. It's your job to see through such obvious ruses and not be fooled into fooling the public. You're part of the 4th estate. Please give your role some thought and live up to this responsibility in a way your predecessor was not capable of doing.

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  • http://www.washingtoncitypaper.com/blogs/housingcomplex/ Aaron Wiener

    Lance, thanks for your comment. I'm not taking sides (yet), but there is a case to be made that most businesses want to be downtown rather than in the less developed areas of the city, for the sake of proximity to other businesses, transit lines, and food/drink/entertainment. That's the reason downtowns exist. It's also the reason D.C.'s downtown has such a low vacancy rate despite the sky-high cost of renting office space there. Should the city promote commercial expansion to other areas? Of course it should. But downtown remains desirable for these reasons, and that won't be changing anytime soon.

  • Lance

    "But downtown remains desirable for these reasons, and that won't be changing anytime soon."

    Actually, the reasons THIS downtown has remained popular even through recessions and race riots is that it is the nation's capital. And that's the only part of it that hasn't changed over the decades. The businesses once located there which were the commercial core for this entire metro area have long ago moved out to the suburbs. The government offices which once filled downtown streets with people living near their employment and shopping near their work and homes have been transformed to a mix where there are now more contractors supporting the government than government employees and nearly all are living (and usually also working) in areas far from the core. What's left is the symbolism of a nation's capital and those most able to afford to be a part of that symbolism ... i.e., high priced lobbyists and lawyers who want access to highly placed government officials ... and the monies they control. That will always be the 'best and highest use' of this limited real estate. If you think adding more floors on K Street will facilitate bringing back their regular businesses which once made commerce happen in all of Washington and surrounding areas or allow more average Joes to live 'in the heart of things', you need to consider who'll win out for these additional couple of floors when the bidding starts. So, yeah you make a point that there is a demand for more of what we have --- that is: high priced real estate for lawyers and lobbyists --- but do we really need more of that? ... and is it worth losing our vistas of monuments and monumental streets AND open skies and everything else that defines us as this low rise city where monuments really are monumental and not stuck in the shadows of taller and less well built neighboring skyscrapers? Have no doubt, there'll be a cost to the symbolism of the capital if taller buildings are allowed to out-monument the monuments that symbolize our capital.

  • Lance

    And thank you for not taking sides yet. We need more journalists like you. You might even consider not taking sides at any point ... but laying out the arguments and the facts instead. That's what journalism used to be like before the blogs appeared and blurred the line between good journalism and just advancing one's own agenda. Good journalism is unbiased.

  • http://distcurm.blogspot.com/ IMGoph

    Aaron: It's worth noting that Lance is himself rather biased. Just an FYI.

  • Lance

    Aaron, I'm not a journalist. And I'm not reporting anything. Thus I have a right to be biased ... just like you do in your personal opinions ... vs. in your reporting.

  • drumz

    We shouldn't build higher on K street because it will just fill up with more lobbyists and contractors? Naturally the solution is to not allow any commercial buildings in DC and that will make lobbyists go away.

    Also building higher will just mean that people who could previously see the washington monument if they were on the top floor of a 14 story building may no longer be able to do so because of the presence of a 20 story building? The horror.