Monthly Archives: November 2011

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.

Occupy Sprawl

Occupy Sprawl – by Galina Tachieva as posted to a Pro-Urb Listserv

Inspired by the recent popular discontent expressed so colorfully on Wall Street, I offer this proposal: Occupy Sprawl!

People are not happy with the economy, with politics, with the government. Consider the physical surrounding of the protesters: the streets and squares in lower Manhattan where there are plenty of places to gather. Good urbanism provides good spaces for assembling and protesting. Our sprawling suburbs are devoid of such places. Where can people get together to show frustration (or to celebrate)? Are people happy with their physical environment in sprawl? Why not revolt against the system of sprawl, which is responsible for some of the most serious environmental, economic, social and health problems in recent history? Sprawl has been central to our economic troubles: the mortgage meltdown, dependence on cars and oil, pollution and waste of resources to mention just a few. Sprawl has even been blamed for the death of the American dream itself.

How about taking on sprawl in the passionate way the protesters are taking on Wall Street? The metaphor of occupation can serve us well in the quest to reform sprawl because we will need a dramatic overhaul   of the physical pattern, of the law, of the financing mechanism that created, supported and encouraged sprawl for decades. The whole system must be shaken from its foundations, in the same way the occupiers demand systemic changes on Wall Street.

There is so much to occupy in sprawl! People should reclaim the empty, unproductive, wasteful spaces: over-scaled parking lots, empty big boxes, dead malls, vast front lawns, foreclosed McMansions, massive cul-de-sacs, underperforming golf courses, etc. Suburban strip corridors can become main streets and boulevards, malls can incubate much-needed town centers, deserted McMansions can house students and seniors, and parking lots can be transformed into productive community gardens.

There is a direct connection between Wall Street and the future redevelopment of sprawl. A few years ago Christopher Leinberger identified 19 real estate categories or standard product types preferred by Wall Street and showed the need to provide new alternatives that are walkable, diverse, more resilient. The redeveloped sprawl types will be the new products in the Wall Street toolbox.

Leinberger put it succinctly and unambiguously:  We can stay outside the world of Wall Street-dominated real estate finance, discuss, and (occasionally) design and build precious, expensive alternatives. Or we can work hard to develop new product types that the mainstream can understand, accept, and prosper by developing and owning.

The good news is that things are already moving. The New Urbanists have been building numerous projects redeveloping sprawl, piling up experience and success. Sprawl is under attack from many sides ≠ from the grassroots as well as from the private and the public sectors. The market is shifting towards more intelligent, human-scale urban patterns and Wall Street is paying attention. Adam Ducker of RCLCO pointed out in his CNU presentation on the economic context of sprawl repair, that Walkscore is becoming a Wall Street underwriting tool.

But more voices and hands are needed for this Herculean effort. The resources are here and plentiful; just help yourself. Use the strategies from Retrofitting Suburbia, the toolkit of the Sprawl Repair Manual, the maneuvers of the Tactical Urbanists, the interventions of Incremental Sprawl Repair and Planned Densification, the common sense of the Original Green, the sustainability of Rainwater-In-Context and Light Imprint, the techniques for re-zoning sprawl of CATS and get support from the many minds of the CNU Sprawl Retrofit Initiative.

Get out and Occupy Sprawl!