A Town Center Could Bloom on a Gaithersburg Fairground

A blog about business and economics.
March 29 2012 9:19 AM

A Town Center Could Bloom on a Gaithersburg Fairground

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Montomery County, Md. is one of the highest-income and most-expensive suburban jurisdictions in the United States. The town of Gaithersburg features a commuter rail station and a fairly dense concentration of retail establishments. It's also home to a fairgrounds that, while fun, is only in use for about 8 days a year, which is not a great value proposition for expensive land. The county would be smart to seriously consider rezoning for higher-value use:

Sixty-three acres off Perry Parkway in Gaithersburg could eventually become a sprawling town center, with 15-story skyscrapers for residences and offices and public plazas.
That is, if the Montgomery County Agricultural Fair moves.
Since 1949, the fair has drawn hundreds of thousands of visitors to the land at 16 Chestnut Street to see a cornucopia of farm animals and enjoy the midway’s attractions.
Montgomery County Agricultural Center, Inc., the nonprofit that owns and operates the fairgrounds, asked the mayor and city council Monday to rezone the land from industrial and light residential to mixed-use development.
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Something I think interesting: In this case the owner of the parcel understands the issue correctly. The valuable asset that the Montgomery County Agricultural Center owns is the land not the structures on it. And relaxing regulations as to what can be done with that land increases the value of the investment. Homeowners often think of themselves as invested in houses and thus resist any measure that would make houses cheaper. But just like the County Agricultural Center the potentially valuable speculative investment commodity a homeowner owns is land. The house is just another depreciating physical asset like a refrigerator. Less regulation makes the land more valuable, not less valuable, even if it makes houses cheaper.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.