County Office Space Vacancy Rate Continues to Rise, Fairfax County Economic Indicators, June 2015

The County's just released Economic Indicators report for June 2015 shows a continuing rise in the commercial office space market in the County to near record highs.  The brief report attributes this increase to the aging of the County's office inventory, which is not the primary or even secondary cause of the growing vacancies.  The core causes are

•  A change in the way businesses--especially those in high technology  industries--do business, relying on the Internet to allow workers to work from anywhere and, therefore, requiring less office space.

•  A global shift to reducing office space per worker by using open work spaces to encourage collaboration and reduce office space costs.

•  A reduction in federal direct and contract spending as part of its continuing austerity budgeting, sequestration, and occasional shutdowns, resulting in less office employment. 

A comprehensive independent report by a Washington consultant for Montgomery County that we published here highlights these trends, not old office buildings.

Here is what the County had to say about the Commercial Office Market.

 

Until County leaders consider the REAL issues in the high and rising office space vacancy rate and its critical implications for the County, especially its property tax base, the County will not make progress in balancing its budgets, attracting businesses, and increasing its economic growth.

Does density matter in technology growth in the 21st Century?

For nearly a decade, Fairfax County has highlighted the prospective role of the Silver Line as a critical driver in making the Dulles Corridor a hub of high technology, a mini-Silicon Valley if you will, thriving on a well-educated, densely populated area surrounding the Metrorail stations from Loudoun County to Tysons. 

Recent research by several economists (its always the economists and "the dismal science") suggest that that vision is dying.  Here is the overview of a paper entitled "Are Larger Cities Losing Their Edge," published in the National Bureau of Economic Research's Digest.  Here is the overview of their article:

Are Larger Cities Losing Their Edge?

Inventors in densely populated areas relied on newer scientific breakthroughs more than their more-isolated peers until the middle of the 20th century, after which the disparity steadily narrowed.

Nearly a century ago, the eminent economist Alfred Marshall hypothesized that ideas were more likely to germinate into useful inventions in large cities than in smaller ones. Innovators working in close proximity to other creative minds, he argued, had a greater opportunity to learn of the latest advances and to engage in brainstorming.

In Cities and Ideas (NBER Working Paper No. 20921), Mikko Packalen and Jay Bhattacharya test this conjecture. They study U.S. patents granted between 1836 and 2010, and calculate the population density per square mile where the inventor resided. This enables them to distinguish patents that were developed in urban areas from those that were developed elsewhere. They also identify the key concepts that each patent refers to, which in turn reflect the scientific or engineering foundation on which the patent is based. For each concept, they search the entire patent database to determine the date on which this concept was first mentioned. This makes it possible to classify patents based on the age of their scientific background. A patent for which the key concept first appears in the patent database just one year before the patent was filed is based on "younger" innovations than a patent for which the key concept has been referenced in patents for several decades.

The authors find that, on average, patents that were filed by inventors in densely populated areas relied on newer science than patents filed by their more-isolated peers until the middle of the 20th century. In 1900, for example, a two standard deviation increase in the population density of an inventor's home town was associated with a 20 percent increase in the probability that the patent would be one that relied on the latest scientific advances. The study defines a patent as using "latest advances" if the age of the patent's key concept falls in the youngest 5 percent of the concept age distribution.

The tendency for patents filed by inventors in densely populated areas to rely on newer scientific breakthroughs has waned in recent decades. There was a decline between the 1950s and the 1970s, and, after an uptick in the 1980s, a decline again in the 1990s and 2000s. "Taken together," the authors write, "our results suggest that in the late 20th century agglomeration has become less important to innovation both in absolute terms and relative to other factors—like collaboration—that predict the use of newer ideas."

The authors hypothesize that the recent decline in the difference in use of newer breakthroughs between more- and less-densely populated areas may be due to the spread of new communication technologies that have made new ideas available more readily to all. For example, with the emergence of the Internet, virtual communities may be erasing the advantage of physical proximity, and those in less-urban areas may be able to participate as effectively as those in larger cities in debating the merits and application of new ideas.

— Steve Maas

The ideas presented in this paper are fully consistent and supportive of the notion Reston 20/20 has been presenting to County leaders, the development community, and the public for several years concerning the trend toward less office space per worker.  A key driver in that argumentation is that the internet permits teleworking and there are few advantages to having people clustered in office space (especially enclosed offices) most of the time.  This paper suggests that trend may have national implications for future technology development that undermines that current County vision that a high-density technology corridor such as that currently planned for the Silver Line will have little, if any advantage, to offer either businesses or residents.  It suggests the County's vision may be a plan for the last century although that has yet to be seen in full.

For those interested, here is a link to the full NBER paper.

Colin Mills: Celebrating Reston’s Spirit of Innovation, RestonNow, February 6, 2014

Reston’s 50^th anniversary is at hand. Lately, I’ve been at several meetings where the focus has been on Reston’s history. There are a series of exciting events planned for this year that will take a look back at our past. I’m excited about attending as many of them as my schedule will allow.

But you know me; I like to look forward. I like to think about the future, and where our community is headed.  Fortunately, just around the corner, we have an event in Reston that’s all about the future, and about fostering the spirit of experimentation and innovation that makes Reston special. And it comes as no surprise that this event is being put together by one of my favorite organizations: Nova Labs.

I’ve written about this terrific Reston-based nonprofit before.  In case you don’t know, Nova Labs is a makerspace.  That means that it provides space for people to create and build things, a place to collaborate with like-minded people, and an opportunity to learn about new technologies, tools, and skills. Basically, it’s a dream come true for people who like to make things.  I’m proud that Reston is home to a creative and exciting venture as this.

At last week’s RCA Board meeting, we received a presentation from Nova Labs. We learned all about the projects that they’ve been doing, such as using drones to do an aerial survey of the Wiehle Metro station and hosting programs designed to get kids interested in STEM (science, technology, engineering, and math).   We learned about their plans to move into a larger space within the near future.  And most interesting of all, we learned about their plans to hold a Mini Maker Faire, right here in Reston next month.

What’s a Maker Faire?   Basically, it’s the coolest show-and-tell you can imagine. It’s a gathering for engineers, crafters, tech types, and other makers to display and talk about their projects. The idea was hatched in the Bay Area by MAKE Magazine back in 2006. Since then, Maker Faires and Mini Maker Faires have been held across the country, and even internationally; combined, they’ve had over 1.5 million attendees.

What will you see at the Mini Maker Faire?  It all depends on the exhibitors, and what they choose to display. That’s part of the excitement; you never know what you’re going to going to see. The focus is often on displaying new technologies, but you might also see innovative projects in science, engineering, or the arts as well. You might see some robotics projects, a 3D printing demonstration, exciting new apps, breathtaking Lego sculptures, artisanal crafts, performance art demonstrations, inventions, and more. And you won’t just be able to see what other people are making; you’ll have the chance to learn how to create things too!

I love the idea of the Maker Faire for the same reason that I love the idea of Nova Labs.  Reston is all about creativity and innovation, and has been since the very beginning.  Bob Simon created a New Town that was one big experiment, a new way to build and organize a community.  Bob’s vision attracted open-minded and forward-thinking citizens, who formed groups like RCA to embrace that creativity and use it to help build a community.  This innovative spirit no doubt helped Reston become a hub for the tech industry in later years.

Even though Reston is now a mature community, we still want to live in a place that’s creative, innovative, and forward-looking. That’s why Nova Labs and the Mini Maker Faire are such a boon to Reston. The maker movement encourages creativity at the individual level, and Maker Faires are a great way to celebrate and develop creativity at the community level.

Mini Maker Faires don’t just celebrate the do-it-yourself spirit; they are true DIY events. The event is being organized and run by Nova Labs, along with a collection of local sponsors and volunteers. The Mini Maker Faire isn’t just being done in our community, it’s being done by our community as well.

Excited?  Me too!  The Maker Faire is being held on Sunday, March 16 at South Lakes and Langston Hughes. If you’d like to go, you’ll need to get a ticket, which can be purchased through the Nova Mini Maker Faire website. And if you’d like to volunteer, they can always use a few more helping hands; you can sign up to help out through the site as well.

Reston  has always been a creative and forward-looking community. I’m very proud that a cool makerspace like Nova Labs calls Reston home.I hope that they’ll be here for decades to come, fostering creativity, incubating cutting-edge small businesses, and inspiring our children to experiment and create and learn. And I hope that this year’s Mini Maker Faire is the first of many here in Reston.As we prepare for a year of celebrating Reston’s history, I’m glad that we have events like these to help us keep our eye on the road ahead.

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Are you interested in Reston’s future?  Want to have a hands-on role in shaping how our community develops?  Then join the RCA Board!  We’re now accepting applications for open seats on our Board of Directors.

You can go to our website to download the form; fill it out and return it no later than February 17^th. Help us serve Reston’s citizens and plan for Reston’s next 50 years.

Colin Mills is the president of Reston Citizens Association.