New Urban News June 2010


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Recently quoted in New Urban News with respect to demographic and real estate market trends.

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New Urban News June 2010

  1. 1. New UrbaN News At the same time, neighborhoods outer suburbs and exurbs will level off nation could easily occur within already made up of housing that had been built or decline nationally.” developed areas: in, or on the edges of, between 1950 and 1970 started to lose • “Suburban decline will accelerate in big-city downtowns; on busy corners of their privileged status. Areas developed middle-aged housing, but that won’t be city streets away from downtown; and in from 1950 to 1970 were “most likely to uniform; demand for housing in some new urban villages close to high-speed be dominated by small houses [whose inner suburbs will rise.” transit stations in suburbs.” appeal was waning], far from shops and • “Demand will increase for transit How each region responds to the other needs.” serving more areas more frequently.” challenges of transit and development In other words, both the nature of • “Demand for more mixed use and will vary, producing contrasting results. the houses and their construction and walkable neighborhoods will increase, Greater Atlanta and greater Washington, their closeness to, or distance from, ev- and prices in these areas will escalate as DC, illustrate the two extremes, in Lu- eryday needs and services precipitated supply lags behind demand.” cy’s view. “Washington, DC, and some a profound shift. Urban living gained He rejects the idea that rapid, continu- suburban cities and counties planned in popularity. ing, outward development is inevitable for transit-oriented development, and because of the nation’s growing popula- use of transit rose to the second-highest more ChIldren, jobs tion and a scarcity of room for develop- level in the United States,” he notes. It’s commonly asserted that middle- ment in cities. If we choose to make it “Atlanta’s transit use lagged, which may income families with school-age children happen, he says, “a tremendously high be one reason why Atlanta has the most avoid cities because of their poor educa- proportion of our future growth as a declining suburbs in the country.” ◆ tional systems. Lucy thinks that’s chang- ing. He cites the move of many families into Lower Manhattan condominium units — housing that was expected to New urbanists await be filled by empty-nesters, retirees, and young single professionals. Parents in those locations are de- demographic shift manding better schools. “If city public would trade a large lot for proximity Long-term prospects are good for schools improve, the trickle of middle- to shopping and work, Bartlett says. urban neighborhoods — but in the Two-thirds of this age group believe it income families with children back to cities may become a substantial stream,” short term, many projects have is important to live in a walkable com- Lucy predicts. stalled. Sprawl builders wait in the munity, he adds. Job trends may also support city re- wings. Baby Boomers, many of whom raised vival. Between 1998 and 2001, 33 of 36 robert steutevIlle their children in the suburbs, are also large cities studied by Lucy saw their looking to move closer in, says Laurie employment grow. (The exceptions were Detroit, St. Louis, and Buffalo.) “New economy” jobs — in the professions, D evelopers can expect a strong market for housing in walkable neighborhoods as the nation emerges Volk of Zimmerman/Volk Associates. “People are tired of apologizing for living in unsustainable locations,” she education, health, government, finance, from the real estate collapse and reces- says. insurance, and information— seem to sion, according to real estate analysts at “A demographic shift is in progress have pushed the per capita incomes of the Congress for the New Urbanism in that will create extraordinary opportu- non-Hispanic whites higher in many Atlanta in May. nity for developers and the people who cities than they are in the suburbs. While a bare majority of Americans are hired by them,” Bartlett explains. Affluent blacks have been moving still are inclined to pick conventional Also reported at the CNU: out of cities, but affluent whites, pre- suburbs as a place to live, urban hous- • The premium for new urban hous- dominantly households of one or two ing is undersupplied by at least 10 to ing is holding up during the recession at persons, have been taking their place. 20 percentage points, Sarah Kirsch, 11 percent, according to Bartlett. Building permits reflect an urban a senior principal at Robert Charles • The average size of houses sold rebound. “Between the early 1990s and Lesser & Company, told New Urban shrank 300 square feet last year. “That’s the six years from 2001 to 2007, New News. Kirsch expects the undersupply the first time that has happened in ages,” York City’s share of regional building to continue into the foreseeable future. says Volk. permits increased from 15 percent to 44 One reason is Generation Y, sometimes • The population sector that prefers percent,” Lucy reports. “Chicago went called Millennials, the children of Baby every aspect of compact, walkable from 7 percent to 23 percent. Portland Boomers. neighborhoods has remained steady for rose from 9 percent to 22 percent. Atlanta Generation Y has a high unemploy- the last decade — 27 to 33 percent of the grew from 4 percent to 13 percent.” ment rate — 17 percent for those in market, according to Kirsch. Lucy’s analysis of data suggests: their early 20s — and will be looking for • A larger percentage of buyers — 40 • “As the percentage of households rental housing as its members find jobs to 50 percent — is willing to make com- with children declines, and that of and the economy improves, says Jona- promises such as accepting a smaller singles, empty-nesters, and elderly in- than Bartlett, vice president at Robert lot or house if this enables those buyers creases, housing demand will increase in Charles Lesser. More than half of Gen- to live in a walkable neighborhood, cities and inner suburbs, and demand in eration Y, now in their 20s and teens, Kirsch says. june 2010 4
  2. 2. New UrbaN News ImmedIate ChallenGes corridor and district plans. Strategies aided by the grants Despite good long-term prospects for urbanism, national may include land acquisition aimed at creating places that are builders are ready to jump right back into the sprawl-build- walkable, mixed use, and transit-oriented, and have affordable ing mode as soon as the recession turns, some analysts say. housing. Thousands of entitled lots in non-walkable subdivisions in • As part of the Department of Transportation’s upcoming metro areas nationwide are ready for new construction. “Na- $600 million TIGER II grant program, HUD will distribute $35 tional builders are the last bastion of sprawl,” says Volk. Notes million to support land-use-related planning activities that Bartlett: “They are out there buying up land and picking up prepare the way for transit investment. Needed modernization lots. The guys that have survived like Pulte and Toll Brothers of building codes and zoning laws is a major purpose of the will not roll over and die because [new urbanists] don’t like $35 million program. The grants will be coordinated with the what they do. If they need to find new ways to make money Community Challenge Planning Grants — thus harmonizing — faster, cheaper, to meet entry-level price points — that’s transportation planning and land use planning, as has long what they will do.” been advocated in smart growth circles. The overall $600 mil- Also, new urbanist developers face lean times ahead until lion in competitive multimodal grants is for improving the demographic changes and a recovering economy provide nation’s infrastructure, including highways, bridges, ports, relief. Many new urban projects are currently stalled. “All of passenger rail, and freight rail. TIGER II will be similar but the long-term trends are fantastic and we will have to find not identical to the original TIGER grants, awarded in Febru- a way to house all of these people,” Bartlett told New Urban ary, a program that included funding for streetcar systems, News. “But in the near term, without job growth, it’s hard to multimodal facilities, and “complete streets” retrofits. imagine any of these projects taking off.” In the next year or The rating system of the LEED-ND (Neighborhood De- two, Bartlett sees some easing of the real estate recession, but velopment) program will be a factor in HUD’s overall grant- expects that a genuine turnaround will wait for 2012 or 2013. making, which totals $3.25 billion per year. LEED-ND ensures One exception is the rental market, which is becoming stronger that developments not only incorporate resource-conserving in some metro areas, he says. construction but also reduce people’s dependence on auto- Third, a number of analysts point to an oversupply of re- mobiles. tail in the US, which has five or six times as much retail per person as Sweden and other European countries, notes June loCatIon-effICIent Goes maInstream Williamson, coauthor of Retrofitting Suburbia. Within two years, “Location-efficient” mortgages, promoted by the Chicago- Amazon sales will top those of Sears and Kmart, according to based Center for Neighborhood Technology, have allowed Michael Messner of Seminole Management Co. Nationwide, some homebuyers to qualify for larger loans when the proper- vacant retail space has risen 42 percent since 2006, and 65 per- ties are in walkable or transit-served locations. Thanks to the cent of malls are either weak or transitioning to weak, he says. new initiative announced by Donovan, location efficiency will This tough retail market makes the prospect of a new genera- become a mainstream practice. tion of shops in mixed use neighborhoods seem daunting. The Federal Housing Administration has already instituted On the other hand, some urban locations are relatively un- changes that “expand our ability to do infill development and der-retailed, says planner and retail expert Robert Gibbs. De- recycle polluted land near transit,” Donovan added. ”We’re troit, for example, has no full-service supermarkets, he says. making headway promoting mixed use financing as well.” Planner Andres Duany has urged developers to consider Embracing the principles of the HOPE VI public housing constructing inexpensive one-story retail buildings with quality redevelopment program, which was cut back during the frontages as a way to cut costs and create a sense of place. When Bush administration, HUD is working with Congress on a in Portland, Oregon, Duany observed great retail streets with Transforming Rental Assistance initiative. The initiative would only one floor. “It’s hard to recoup the costs of building up three preserve affordable housing on public housing sites “but also stories when all you need is the first floor,” he says. ◆ allow for additional incomes and uses, including commercial, recreational, and transit-oriented development,” Donovan explained. Federal urban agenda HUD’s announcements were hailed by CNU Board Chair Victor Dover, who said they will make cities “more practical from paGe 1 for day-to-day living, more durable, more valuable, more self- reliant, and integral to the global environmental solution.” Director Shelley Poticha. Donovan said the notice of funds While praising compact, mixed use, and transit-oriented availability would be issued in “coming weeks.” The program development, Donovan took pains to say that federal agen- will “encourage metropolitan and rural regions to plan for the cies will not dictate how communities and regions develop. integration of economic development, land use, and transpor- Nonetheless, the intention is to steer federal funds toward tation investments.” Regions will be able to “realize their own patterns associated with smart growth. visions” and achieve “outcomes like less time commuting and In February HUD established an Office of Sustainable Hous- more time with family and neighborhoods,” Donovan said. ing and Communities and put Poticha in charge of it. HUD, • A $40 million Community Challenge Planning Grant the Department of Transportation, and the Environmental program is also being prepared now. It will help communi- Protection Agency are collaborating far more than they have ties to develop master plans and initiate zoning and building in the past. “The federal government must speak with one code reforms, including inclusionary zoning ordinances and voice,” Donovan asserted. june 2010 5