The Baltimore Peninsula was supposed to be a $5.5 billion walkable city of residences, shops, and offices built on a former industrial site. Promoters convinced the city of Baltimore to put up well over $600 million in subsidies for the project. Now, most of the construction is done and it looks like one of China’s many ghost cities.
The creator of the above video suggests the project was supposed to be like Dubai but ended up being like a suburban community like Columbia, Maryland. But Columbia is a low-rise city of single-family homes, while Baltimore Peninsula is mostly a mid-rise complex of five- to seven-story condos, offices, and shops. In other words, the epitome of New Urbanism.
The video points out that developers misjudged the office market, as the rise in remote working has left most of the offices in the Peninsula unoccupied. He doesn’t say so, but they also misjudged the residential market. Baltimore’s population has been shrinking, and the average home sells for around $185,000. New home construction is rare in Baltimore, but according to Realtor.com, the 113 “new construction homes for sale in Baltimore, MD have a median listing home price of $225,000.”
Despite the affordability of single-family homes, developers somehow thought there was a market for hundreds of $600,000 condos and $500,000 townhomes. It turns out there isn’t, which is why most of the retail shops in the Baltimore Peninsula are also empty.
Why would anyone want to pay $510,000 for a 1,600-square-foot condo or $750,000 for a 2,500-square-foot condo when similar-sized single-family homes are readily available for $200,000 to $400,000? There might be a few who go for “walkability” over economy, but not enough to fill the projects at Baltimore Peninsula, and certainly not enough to justify the subsidies to such a project.
We may feel sorry for the developers who so misjudged the market. But I feel even more sorry for the taxpayers who had to subsidize this project. Most of the subsidies are in the form of tax-increment financing, which means the property taxes on the project that would otherwise have gone for fire, police, parks, schools, and other services are instead going to the developers. That means everyone else in Baltimore has to cover the costs of those services to the Peninsula or accept a lower level of services for themselves. This is just one more example of an urban planning fad gone wrong.
