Maryland finding: Close-in housing has held value better

Confirming a pattern found elsewhere across the country, a study by the Maryland Department of Planning finds that after the housing bubble burst in 2007, home prices in the state's more densely developed growth areas dropped less than those in more outlying areas.

Mark Goldstein, a demographer for the department, analyzed the median sale prices of houses inside and outside Priority Funding Areas (PFAs) — the places that counties and the City of Baltimore have designed for growth.

"Perhaps to be expected, the homes inside the PFA didn't tumble in value quite so steeply as the (larger) homes outside the PFA during the 2007-2009 downturn," Andrew Ratner, the department's director of communication and education, wrote on the Smart Growth Maryland blog. 

And though houses in the generally lower-density locations outside the Priority Funding Areas have consistently commanded higher prices (see graph) than those inside the PFAs during the entire 2002-2009 period covered in the study, it turns out that in percentage terms, the houses in the compact, more close-in areas always performed best:

• During the period in which housing was booming, from 2002 to 2007, houses in the PFAs jumped in value by 75.3 percent, slightly more than the 71.9 percent increase of houses outside the PFAs.

• During the bust from 2007 to 2009, the median sale price outside the PFAs dropped by 15.0 percent, while the median price declined only 11.1 percent inside the PFAs.

• Over the entire period from 2002 to 2009, prices in the PFAs ended 55.9 percent higher than they began, while those in the more outlying areas gained ended up 46.2 percent higher than they started. 

Ratner concludes: "Some have cast sustainable land planning as being at odds with prosperity or economic development, but to the contrary, at least by some recent measures, property values inside Maryland’s designated growth areas have held their value quite well when compared with the open land beyond."

Sustainable Growth Commission

One of Maryland's recent forays into promoting compact development in locations well-suited to accept it was the establishment last year of a Sustainable Growth Commission. The commission is to "assess and advise on the progress of State, regional and local planning in Maryland to achieve the goals of State economic growth, resource protection and planning policy," Ratner wrote in an Oct. 25, 2010 blog. 

The commission, which succeeds the two-year Task Force on the Future Growth and Development in Maryland, includes state and local officials and representatives of the development, environmental, and agricultural communities from throughout the state. "The Department of Planning and other agencies are currently developing the first-ever comprehensive strategy for sustainable growth called PlanMaryland," Ratner noted.

Last fall, to get a first-hand look at issues across the urban-to-rural Transect, commission members embarked on a bus tour of varied locales. Their starting point was the State Center complex in West Baltimore, which is "about to be wholly remade as a Transit-Oriented Development [TOD]," Ratner wrote Nov. 9. "The project seeks to transform an oft-described 'urban wasteland' of government buildings into a mixed-use complex with retail and housing that can better capitalize on the location’s proximity to subway, light rail and bus service."

On the tour, Caroline Moore of Ekistics, a private partner in the $1.6-billion project, told the commission that the 28-acre site has enormous potential. It is surrounded by some of the city’s poorest and richest neighborhoods as well as major instititions of higher education and culture. "The development," Ratner observed, "is projected to generate taxes and vibrancy in an area where offices now shutter at nights and on weekends."

A transit-oriented development is also in the works for Owings Mills, a 1980s planned development which centers on an enclosed shopping mall that has struggled. It's hoped that the TOD will enliven the area with restaurants, a library, and a college branch.