Tag Archives: Gen Y

Camas Council: Consider Trends Before You Decide!

Below is the Draft Testimony of Mary Vogel,CNU-A, principal of PlanGreen, regarding the Lacamas Northshore proposal that Carolyn Foster covered in her blog earlier in August.

I know that you are concerned with the city’s economy—in the long term, not just today.  I suspect that you believe that the proposed master LN Concept Plan Mapplan will help the city’s economy.  But I want you to consider some future trends before you make up your minds.

Maureen McAvey, Senior Resident Fellow for the Urban Land Institute (ULI) in Washington, DC  was in Portland last year to discuss the ULI publication “What’s Next? Real Estate in the New Economy“.  The event notice read: A paradigm shift is unfolding over the course of this decade, driven by an extraordinary convergence of demographic, financial, technological and environmental trends. Taken together, these trends will dramatically change development through 2020. My notes indicate that McAvey said:

  • More single-family homes are being occupied by renters, changing the feel and politics of suburban communities
  • Seventy-five percent of households in the Portland area do not have children under 18
  • 47 percent are non-families
  • Twenty-somethings on tight budgets prefer places to congregate with friends — in parks, bars, restaurant clusters and building common areas — and can tolerate smaller living spaces.

Arthur C. Nelson, one of the nation’s most prescient housing market researchers, says declining homeownership, tighter lending standards, a sell-off of single-family houses by the nation’s fastest growing demographic — senior citizens—and even rising household sizes due to more multigenerational living will have an impact on the market you may be trying to attract with the single family home portion of the plan.

Nelson, professor of city and regional planning at the University of Utah, reports that the US faces a massive oversupply of large-lot single family houses and an undersupply of multifamily units. By 2020, Nelson sees 1.5 to 2 million homes from seniors coming on the market, and between 2020 and 2030, there will be a national net surplus of 4 million homes that they cannot sell. And Nelson believes those are conservative figures for what has been dubbed “The Great Senior Sell-Off.”

The 2009 American Housing Survey (AHS) found that 28 percent of houses are attached, 29 percent are detached on small lots, and 43 percent are detached on large lots. Three studies — by National Association of Realtors, the Robert Charles Lesser & Co. (RCLCo),USPreferencevSupplyHouseType and Nelson — all found a nearly identical, imbalance in US housing supply and demand.  Only 24 to 25 percent of Americans would prefer to live in large-lot single-family houses (see graph “Housing preference versus supply”).

Consequently, there’s an oversupply of approximately 28 million units in what developer, professor and author Christopher Lineberger calls “the drivable suburbs.”  Attached housing and small-lot housing, on the other hand, are undersupplied — by about 12 million and 13.5 million units, respectively.

Millennial Renters Survey

Source: RCLCo Consumer Survey

This imbalance is likely to grow in the years to come, reports Nelson. The generation that is currently moving into the housing market — Millennials — is the most urban-oriented cohort since World War II.  Melina Druggall with RCLCo reported at a National Association of Home Builders conference in January 2011 that 81 percent of Gen Y renters want to live in an urban setting.  (Wall Street Journal reported that number as 88% at that time and they were quoted in numerous sources such as Better Cities & Towns and Grist).

Ninety percent of the increase in the demand for new housing will be households without children, and 47 percent will be senior citizens (the latter resulting from the rising tide of Baby Boomers who started turning 65 last year). Both of these demographic groups—the Millennials and the Boomers—lean toward multifamily and away from large-lot SFH.

Referring to a recent National Association of Realtors (NAR) finding on percentage of households that prefer to live downtown or in mixed-use city or suburban neighborhoods, Nelson says “Back in ‘70s or ‘80s, people wanted drivable suburbs. Now 70 percent want to walk to discernable destinations, from transit to grocery stores. This wasn’t the case until recently.”  Nelson believes the most popular locations will be mixed-use, walkable, transit-friendly neighborhoods.

This Lacamas Northshore master plan is being portrayed as both walkable and mixed-use, but the concept plan I’ve seen so far indicates to me that it is not.  The zoning proposal shows a segregation of uses. Business parks, by their very nature, are drive-to!  The single-family and the multi-family seem quite segregated from each other and all are segregated from the shopping area.

Amazon Headquarters image

Rendering courtesy of NBBJ. Amazon Headquarters adjacent downtown Seattle, WA

As far as economic development is concerned, there is increasing evidence that the kind of high tech, light industrial firms that you hope to attract are choosing to locate near where their employees want to live.  Consider the choice of Amazon to locate adjacent to downtown Seattle and Adobe Systems to locate in downtown San Jose.

I hope you will take into account the “extraordinary convergence of demographic, financial, technological and environmental trends” that ULI talks about before making your decision on this zoning change and the future development that it presages.  I agree that a master plan with changed zoning is what is now most desirable for this area–but NOT the kind of segregation of uses we see in this plan. I urge you to delay approval of a zoning change–until you can get it right!

Reshaping The Housing Market?

Oregon Metro expands its urban growth boundary for more suburban development

This article originally appeared on my Sustainable Industries blog site

The Urban Land Institute (ULI) Oregon[1] recently advertised a workshop to the Oregon development community:

In the wake of the financial crisis and the great recession, sweeping structural changes are reshaping the housing market.  Generation Y and the retiring Baby Boomers will be the catalysts for the next wave of housing development.  The workshop promoters asked “Are you ready to meet this demand?”

Speakers from the development community all pointed to the market demand being urban and transit-oriented; and, for the time being, rental rather than homeownership.  Some quotes:

They have less money than any generation, but are well-educated, well connected and very urban. The cities that do it best for young creatives will thrive.  John McIlwain, ULI

Gen Y has no interest in the suburbs!  They value being close to friends and don’t want to commute.  You can bet on transit-related locations.  Clyde Holland, Holland Partners

Gen Y wants smaller, greener housing.  They want to live in the city and take responsibility for their carbon footprint.  Jim Winkler, Winkler Development

A few months earlier, ULI’s Young Leaders Group had attested to this same wave in its own sessions.  And it focused all its conference field trips close to the urban core along transit corridors of Portland, Oregon.  At least one of that conference’s participants brought his suburban developer dad along as well—perhaps to learn new skills.

In April 2011, ULI Oregon sponsored two of its national leaders at talks held at Metro on such impressive topics as: Carbon, Development & Growth: Navigating New Frameworks for Real Estate, Planning, Transportation, and the Economy and Finding Certainty in Uncertain Times.  Ed McMahon and Michael Horst both indicated that the pendulum is swinging re: how we invest housing dollars.  The trend is towards walkable, mixed use neighborhoods with transit—and towards green building.

Although McMahon and Horst have strong relationships with the US Green Building Council (their sons play important leadership roles there), McMahon pointed to an EPA study that transit-oriented development may outperform green building in reducing greenhouse gases.[2]  ULI’s Growing Cooler was a mega analysis of the impact of urban form on driving.  “We cannot address greenhouse gases without addressing vehicle miles traveled,” McMahon stated emphatically.

A September 21, 2011 story in the Oregonian reported that Renaissance Homes’ president, Randy Sebastian, a builder long known for its sprawling subdivisions on the fringes of the Portland market, thinks that the days of building on the fringes is coming to an end.  He has taken to doing urban infill instead.

During 2010, Portland’s metropolitan planning organization, Metro, had also pulled together an impressive list of professionals from the development community to serve as its Expert Advisory Group on Centers and Corridors.  Not only did that group tell Metro about the same trends that ULI events have showcased, it also made recommendations that Metro should take a larger long-term role in facilitating the implementation of compact urban development, by playing an enhanced role in education, technical assistance, gap financing, infrastructure financing, and legislative advocacy. These respected local experts in the fields of institutional real estate, financing, development and planning also volunteered their time to carry their message out to communities in the region and work with them to make changes.

Despite these strong messages from the real estate industry, the Metro Council, on October 20, 2011, decided to add another 1,985 acres to the Portland region’s urban growth boundary in areas of Hillsboro, Beaverton and Tigard.  About 330 of those acres will be brought in as industrial land.  The other 1600 plus acres is to accommodate projections for needed housing.  State law requires Metro to maintain a 20-year perpetual land supply.

Bob Stacey, candidate for Metro Council, thinks that the Portland area had more than enough land within its UGB to meet its needs.  He argues that Metro planners think that developers won’t choose to build enough housing on the land already in the boundary because its harder. The planners fear that if we don’t add land for housing to the UGB, developers will build outside Metro. . .”

Stacey maintains that residents within the existing UGB will pay by seeing needed improvements in their neighborhoods deferred or cancelled while highways, schools and transit are expanded to the new areas.

While none of the three ULI national experts who have visited Portland in 2011 had any answers about how, in the current economy, to actually finance and build development where it is most needed, Metro’s own Expert Advisory Group was more explicit.  Their report “Achieving Sustainable, Compact Development in the Portland Metropolitan Area: New Tools and Approaches for Developing Centers and Corridors” identifies one of the greatest obstacles in centers and corridors development as the current credit market.  Amongst the recommendations of the report are:

  • Develop a new approach to gap financing with creative lending tools and mechanisms for public-private collaboration.
  • Create a mechanism for metropolitan infrastructure investments that supports compact mixed-use development.

Even with Metro’s own role in convening the Expert Advisory Group, it is not apparent that anyone at Metro is paying attention to the advice of these experts.  Instead, while not bowing to ALL of the pressures that suburban communities were putting upon them,[3] some believe the Metro Council is following the old paradigm for growth–expansion, rather than embracing the sweeping structural changes savvy developers are predicting.

Next it will be interesting to see where Metro’s Climate Smart Communities scenario planning takes it!  Can the Portland region reduce greenhouse gases 75% below 1990 levels by 2050 while still following 20th Century development strategies?

 


[1] ULI is the preeminent think tank for the real estate industry.  ULI Oregon is the “District Council” or chapter for Oregon.

[2] That recognition did not stop them from promoting green building, however: “Stay on top of green or eat everyone’s dust.  There will be differentiation; over the long run—adapt or get crushed.”

 

[3] Wilsonville, Forest Grove and Cornelius had proposals for expansion that were not approved.