Category Archives: Housing

Takeaways From the GOP’s Big Win

gillespie warnerBy Peter Galuszka

The night of Tuesday, Nov. 4 was an ugly one for the Democrats and a big win for Republicans. Here are my takeaways from it:

  • U.S. Sen.Mark Warner clings to a tiny lead that seems to grow slightly, still making it uncertain if opponent Ed Gillespie will ask for a recount. The surprisingly tight race is an embarrassment for Warner. It likely takes him out of consideration to be Hillary Clinton’s running mate in 2016 although Democrats Tim Kaine and Jim Webb are still possibilities.
  • Ed Gillespie ran a smart campaign and came off as a solid candidate. Of course, we are comparing him against Kenneth Cuccinelli and that’s a very low bar but Gillespie’s projection of being relaxed and confident helped him. Gillespie did very well despite being dissed by the national Republican money machine. Look for him in the gubernatorial race of 2017.
  • Barack Obama takes his lumps — again. The country’s on the mend and things are going fairly well (despite what you may watch on Fox), but Obama is incapable of cashing in on that. His cool, detached style is a big minus and makes him seem careless and incompetent, especially when crisis like ebola come up that are not of his making.
  • The Republican wins on Capitol Hill are more significant than the Tea Party inspired once during the 2010 midterms.But the earlier races brought in a kind of mindless negativity and gridlock by both parties that truly hurt the country. Will that happen again? Or will older, wise heads prevail?
  • Increase in coverage my Obamacare The New York Times

    Increase in coverage by Obamacare
    The New York Times

    You might get some bipartisan action on taxes and the budget, but deadlock remains for Affordable Care and immigration. The fact is that Obamacare is too far along to change much and people actually like it, despite what you hear in the right-wing echo chamber. This chart from the New York Times shows that the ACA has boosted health coverage in some of the poorest parts of the country, such as the Appalachian coal country, the African-American belts of the Deep South; and poor parts of the Southwest like New Mexico and parts of Arizona. This alone is a big success.

  • Immigration. Look for Obama to use executive authority to come up with an immigration plan. It is an emotional, hot button issue that reveals lots of ugly attitudes. But something needs to be done fast. The GOP has no plan, except for George W. Bush who actually pushed a workable solution that was compassionate. That got soaked by the Tea Party, but then Republican Mitt Romney came up with a health care plan for Massachusetts that looks remarkable like Obamacare and was a precursor. If the GOP can get back to those helpful ideals, there may be hope.
  • Warner lots big swaths of voters who had been with him, like Loudoun County and parts of rural Virginia. This is alarming for the Dems and shows they need to project their messages a lot better. Warner’s poor performance in debates didn’t help either.

It is a big win for the GOP, but somehow I don’t feel as bitter as I was in 2010.

Brat’s Strange Immigrant-Bashing

BratBy Peter Galuszka

It must have been an interesting scene. Congressional candidate David Brat had been invited to a meeting of the Virginia Hispanic Chamber of Commerce along with his Democratic rival Jack Trammell to outline his views on immigration and undocumented aliens.

Brat, an obscure economics professor who nailed powerhouse Eric Cantor in a Republican primary for the 7th Congressional District in June, danced around the topic, according to a news account.

It took several attempts to get him off his spiel on just how wonderful free market capitalism is to actually address the issue at hand. Before him were a couple dozen business executives, many of them Hispanic.

They, naturally, were interested in Brat’s views because of his over-the-top Latino-baiting during the primary campaign. One of Brat’s ads trumpeted: “There are 20 million Americans who can’t find a full time job. But Eric Cantor wants to give corporations another 20 million foreign workers to hire instead.”

Finally, Brat claimed, “I have never said I’m against legal immigration.” He later said, “nations that function under the rule of law do well.” Brat also said he wants to “secure” the U.S. border with Mexico. Trammell said he supports the DREAM Act that could provide a path to U.S. citizenship for some of the 11 million undocumented aliens in this country.

Brat’s immigrant-baiting and his “rule of law” smacks of a lot of ugliness in American history. “Know–Nothings” of white Anglo Saxons beat and harassed Catholic immigrants, primarily from Ireland. Chinese were harassed on the West Coast and Japanese-Americans were locked up in concentration camps during World War II. Jewish newcomers were met with restrictive covenants and college quotas.

In Richmond during the 1920s, efforts by Catholic Italian-Americans to build a monument to Christopher Columbus were fought by the Ku Klux Klan, which insisted that any such statue not dirty-up Monument Avenue and its parade of Confederate generals. Columbus had to go elsewhere in the city.

There’s a new twist and judging from Brat’s behavior on Tuesday. He seems uneasy by getting so out front on immigrant-bashing. He’s not the only Republican to take such strident stands. Look at New Hampshire, where Scott P. Brown, a Republican, faces Jeanne Shaheen, a Democrat, in a closely-watched race for the U.S. Senate.

Groups backing Brown, such as John Bolton, the surly former U.S. Ambassador to the United Nations, have run anti-Shaheen ads showing throngs of people clambering over a border just before showing Islamic militants beheading James Foley, a journalist and New Hampshire native, according to the New York Times. The ad was pulled after the Foley family complained, the Times says.

A major coincidence is that the Times‘ description of New Hampshire almost matches that of Virginia’s 7th Congressional District. Neither seems a hot bed of immigrant strife and threats.

The Granite State has one of the smallest populations of illegal immigrants in the country, the Times says. Of the state’s 1.3 million residents, only 5 percent are foreign-born and 3 percent are Hispanic.

The Virginia district has a population of 757,917 of whom 12.7 percent are foreign born and 4.9 percent are Hispanic. Most of the residents, 74.3 percent are white.

The district runs from the largely white and well-off western Richmond suburbs in Henrico and Chesterfield Counties and scoots northwest across mostly rural farmland to east of Charlottesville and up to Madison. With only 7.6 percent of the people living below the poverty level, it isn’t exactly a barrio of Los Angeles.

It is hard to imagine hordes of brown-skinned people swarming from up Mexico or Central America displacing the managerial executives, small business people and farmers in the Seventh. People that Brat seems to be worried about are employed in other nearby areas, such as the poultry plants of the Shenandoah Valley. But those workers are there because of local labor shortages. One wonders where Brat gets his ideas that illegal immigrants are going to steal true-blue American jobs in his district.

Last June during the primary, there was plenty of news about thousands of young Hispanic children coming across the southern border from Central America. At the time, there were estimates that up to 90,000 such children might come illegally into the U.S. this year. Many are fleeing gang violence in their homelands.

This is apparently what Brat is running against – a bunch of poor, 12-year-old Nicaraguans out to steal jobs and provide cover for Islamic terrorists. Their plight is a serious issue, but it is a humanitarian one. Brat chose to make it an odd classroom lesson in economics. He says the U.S. should not put up “green lights” and “incentivizing children from other countries to come here illegally and at their own peril.”

The news from the border seems to have calmed down since June. Brat may have found that now it is likely he’s going to Washington, playing the Hispanic-baiting card may not work as well on the national scene as it apparently did in his mostly-white district. It could be why he was hemming and hawing so much before the Virginia Hispanic Chamber of Commerce.

Illegal immigrant Ayn Rand

Illegal immigrant Ayn Rand

Perhaps other Republican politicians are having the same epiphany. As the New York Times writes: “Republicans have long relied on illegal immigration to rally the conservative base, even if the threat seemed more theoretical than tangible in most of the country. But in several of this year’s midterm Senate campaigns — including Arkansas and Kansas, as well as New Hampshire — Republicans’ stance on immigration is posing difficult questions about what the party wants to be in the longer term.”

There’s another strange contradiction with Brat. He’s a former divinity student interested in probing how unfettered free market capitalism can magically make the right choices for the betterment of mankind.

He draws a lot of his thinking from Ayn Rand, the famous thinker, refugee from the Bolsheviks and backer of her own brand of anti-government capitalism.

It may interest Brat that by today’s standards, Rand would have been an illegal immigrant.

Hope for the Burbs

Ellen Dunham-Jones

Ellen Dunham-Jones

by James A. Bacon

While urbanists trumpet the resurrection of America’s core cities, the nation’s inner suburbs are seeing a lot of action, too. In fact, the transformation of the burbs may be more radical. While cities are seeing more of the same — gentrification that restores decaying neighborhoods, in-fill development looking a lot like the existing development — real estate developers are reinventing suburban structures from the inside out. Shopping malls surrounded by seas of asphalt are being converted into town centers. Big box stores are becoming public recreation centers. Fifty-year-old shopping centers built over streams are being torn down and the waterways restored as greenways.

This is a time of tremendous opportunity for “suburban” counties that developed since World War II, said Ellen Dunham-Jones, an architecture professor at the Georgia Institute of Technology, co-author of “Retrofitting Suburbia,” and a leading light of the New Urbanism movement. What she did not say in her enthusiastic, up-beat speech at Virginia Commonwealth University last night is that it is also a time of peril for counties that don’t embrace a strategy of selective urbanization.

Change is not only desirable, it’s necessary, Dunham-Jones contended. The low-density suburbs consume two to three times more energy per capita than central cities, making them vulnerable to upward spikes in energy prices. Local governments are suffering fiscal stress from the burden of maintaining a sprawling infrastructure. Poverty is an increasing problem as poor people, either immigrants or poor people leaking from inner cities, move into older, run-down suburban neighborhoods. At the same time, housing affordability is becoming a middle-class issue as rising transportation costs kill the old “drive ’til you qualify” housing model. Last but not least, Dunham-Jones cited suburbia’s automobile dependency as a public health issue. Infectious diseases (despite the ebola virus hype) are not a major health hazard in the U.S. The real problem is chronic disease stemming from obesity and sedentary lifestyles, which leads to diabetes and heart disease.

Demographics also are driving the transformation of the burbs. People still think of the suburbs as Leave It to Beaver land of households with school-age children. But a majority of households in the burbs now are childless, said Dunham-Jones, and 85% of the growth in household formation in the U.S. will have no children. Millennials are driving the shift to urban lifestyles. They don’t want to live like their suburban parents. But those parents, Baby Boomers mostly, are approaching retirement differently from preceding generations. YEEPIES (Youthful, Energetic Elderly People Into Everything) aren’t looking for suburban privacy; they’re looking for urban engagement.

While many childless families would love to live in old-style, walkable urban neighborhoods, not everyone can afford to do so because restricted supply has driven up prices. And the reality is, a majority of jobs remain in the suburbs. By default, much of the “walkable” community development will take place in suburban counties where land is cheaper. And that creates opportunity for creative real estate developers who can figure out how to retrofit aging suburban properties and for the counties that will accommodate them.

There is more than enough land in suburban counties to make room for the surge of Americans looking for urban lifestyles in suburban counties without disrupting the lives of people who still want to live in their conventional cul-de-sac subdivisions. One third of all malls are dead or dying, said Dunham-Jones. Thousands of big box stores are empty. Retail as a real estate category is shrinking, probably permanently, as more people shop online. As a result, vacancy rates remain stubbornly high in shopping centers. Meanwhile, as Millennials show a strong preference for working in an urban environment, businesses are less interested in putting their workforce in suburban office parks.

“It’s an opportunity,” said Dunham-Jones. “We get to do a make-over!”

Developers have not yet settled upon a fixed formula for re-developing the burbs. Right now, an extraordinary amount of experimentation is going on. Dunham-Jones and co-author June Williamson have built a database of more than 900 case studies of radical suburban make-overs across the country, many of them in Virginia.

Dunham-Jones said suburban retrofits fall into three broad categories.

From single-use to mixed use. Suburbia is loaded with malls and big-box stores whose retail function is no longer economically viable. Some of these structures are finding a new life by adding new uses. Dunham-Jones cited the example of Hundred Oaks Mall, a dying mall in Nashville; the property still had retail on the ground level but had abandoned the upper level. Vanderbilt University took over the lease for the upper level and installed a medical center. Now the medical center draws patients who otherwise would not have frequented the mall, and patients visiting Hundred Oaks can hang out at the mall while waiting for test results. Patients prefer Hunred Oaks to Vanderbilt’s city facility.

Regreening. An astonishing number of commercial properties were built in wetlands and flood plains. It was routine practice in the 1950s and 1960s to obliterate wetlands and route creeks through culverts underneath the buildings, said Dunham-Jones. The culverts could handle the run-off from undeveloped land upstream but as that land got built upon and paved over, run-off got worse and flooding became an issue. Today, an increasing number of suburban projects are “regreening” old development — ripping out buildings and culverts and restoring the stream beds. Benefits include not only better storm water management but attractive ribbons of greenery through the suburban landscape

Walkability. People are willing to pay a major premium for walkability, even islands of it in an otherwise autocentric environment, said Dunham-Jones. Perhaps the most spectacular transformations are occurring in plots of land large enough — typically old malls — to allow for a restoration of walkable streets and mixed-use development common to traditional cities. Continue reading

Millennials Want a New Kind of Suburbia

Image credit: Demand Institute

Image credit: Demand Institute

by James A. Bacon

The Millennial Generation (18- to 29-years old) will be a predominantly suburban generation, contends a new study by the Demand Institute based on a survey of 1,000 Millennial households. Significant majorities of the younger generation aspire to owning a single-family home and consider automobiles a necessity, while a 48% plurality expresses a preference to live in the “suburbs” over an urban or rural environment.

These findings, the authors contend, contradict “myths” perpetuated by advocates of smart growth and urbanism that Millennials “all want to move to the city and rent; they don’t want to own things; they won’t need cars anyway — and there will be a massive slump in demand because they are all going to be living single in their parents’ basements for the foreseeable future.”

Phew! It’s hard to know where to start with this. The study does provide a useful benchmark for what Millennials are thinking and it reaches at least one very interesting conclusion. Unfortunately, the analysis totally clouds the debate by misstating what smart growthers and urbanists are actually saying and by what employing what our old friend Ed Risse terms “core confusing words.”

The Demand Institute does make some useful observations. While there are only 13.3 million households headed by Millennials today, young people will emerge from their parents’ basements. Their number will swell to 21.6 million households by 2018. Almost four in five expect their financial situation to improve within the next five years, and three out of four plan to move. The reasons they list for wanting to move: 71% for a better home or apartment, 59% for more privacy or space, 50% to establish a household, and 48% to own, not rent. While Millennials have delayed family formation, 30% are married today, 64% expect to be married within five years, and 55% expect to have children within five years.

Three out of four Millennials believe home ownership is important, and 60% plan to purchase a home within five years. When they do rent or buy a new home, 61% want more space. Sixty-two percent want to either rent or purchase a single-family dwelling for their next home.

Here’s where it gets interesting for those following the urban vs. suburban debate: Millennials’ locational preferences are:

48% suburban
38% urban
14% rural

Those who say it’s important for their next home to be within “a short drive” of grocery stores, restaurants and retail outnumber those who say it is important to be within walking distance by more than two to one. Meanwhile, 88% of Millennials own a car, down only one percentage point from 2001.

Among the study’s main conclusions: “The suburbs are going to remain important destinations for young families, but the ideal suburban location for Millennials may not be the same as it was for previous generations. Communities that can offer the best of urban living (e.g. convenience and walkability) with the best of suburban living (e.g. good schools and more space) will thrive in the coming decade.”

Very good. I believe that to be true. One of the great challenges of the next two or three decades will be urbanizing the suburbs, or, to be more precise, to replace the “suburban sprawl” pattern of development characterized by large lots, segregated land uses and autocentric streets with a more traditional “urban” pattern of small lots, some mixed-use and walkable streets.

The authors confuse the issue, however, by their indiscriminate use of the words “suburbs” and “suburban.” They do not differentiate between close-in suburbs where single-family dwellings have small lots and walkable streets and the far-flung “exurbs” on the metropolitan fringe where single-family dwells have large lots and rely exclusively upon automobiles. I would argue that while Millennials assuredly seek to live in communities with good schools and reasonable taxes, they are far less interested than previous generations in living in the “exurbs.” However, it is impossible to prove or disprove that argument with the way the authors constructed the survey.

As for dispelling the “myth” that all Millennials want to live in the city, rent an apartment and give up their cars, the authors have created a straw man. I don’t know of anyone who says “all” Millennials want those things. But the Demand Institute’s own data suggests that a significant number do. Thirty-six percent of Millennials say they expect to continue to rent multi-family housing over the next five years; 24% say they want the same amount of space, and 15% want less space. Thirty-eight percent say they prefer to live in an urban environment. As for transportation, 48% say they take mass transit at least once a week, 22% say they walk and 15% ride a bicycle. I would suggest those numbers represent a major shift from previous generations. It would be nice to compare those preferences with those of Generation Xers 20 years ago. The Demand Institute data would mean far more if we could put it in a generational context.

Bacon’s bottom line: In actuality, there is a big shift in Millennial preferences compared to those of previous generations. A big percentage of Millennials prefer urban lifestyles and a bigger percentage prefer a “best of both worlds” approach typical of the older, denser suburbs. There is little evidence here that Millennials are craving an “exurban” lifestyle of big houses on big lots in locations that make them dependent upon cars for long commutes. The study missed a chance to make that clear.

Poor Blacks Must Abandon Negative Learned Behaviors

Morris Daniels

Morris Daniels

The discussion about poverty in America is dominated by politicians, academics, journalists and members of the professional caring class, most of whom have their own biases and agendas. We hear very little from poor people themselves.

The Richmond Sheriff’s Department has launched a new program, Recovering from Everyday Addictive Lifestyles, to help inmates convicted of violent crimes prepare for re-entering society. Program leader Sarah Scarbrough leads participants in regular discussion of current events, drawing from newspapers, magazines and blogs. One of the participants, Morris Daniels, wrote a letter to Scarbrough in response to a Bacon’s Rebellion post about Mayor Dwight Jones’ anti-poverty plan. Daniels has no institutional agenda. He speaks from the heart. I publish his letter (with light editing, as I would do for any writer) with his permission. – JAB


By Morris Daniels

You posed two questions to the group on Wednesday: (1) What are the problems with the people having subsidized housing? and (2) What can be done to resolve these problems?

For question #1, the problem is the people. Blacks are a “broken people” who acquired hundreds of “learned behaviors” from their slave masters a long time ago. When we were brought to this land, we learned how to discipline our children and we learned how to feed our children. I don’t know of any Caucasians who eat pork belly, chitterlings, pigs feet, pigs tail, or pig ears, let alone fried pig skin. We are the best improvisers in the world because we can take “something from nothing” and make it work for our good.

The problem is that we learned negative behavior, probably starting from watching the white man build his stills and sell moonshine. We bought and sold the moonshine to “provide for our families,” despite the fact that it turned us into alcoholics. This act became a “cultured mind state pattern” to the black people. We started selling marijuana in the ‘60s, gambling, opening up shot houses (places that sell liquor/beer and food), gamble and play numbers. Women prostituted themselves. Then came cocaine, heroin, crack, and back to pills.

After the Civil Rights movement, I feel, black people “gave up the good fight” and reverted back to those learned behaviors. They settled for subsidized housing, welfare checks and food stamps because it was free money that they didn’t have to work for. That’s what they knew from so many years of negative learned behavior. Please don’t get me wrong, I’m not saying that Oh Mighty Whites are the cause of the black man’s problems as a whole, because we do know right from wrong, according to the laws of the land. We make our own choices, according to what we desire to have instead of what’s best for our lives.

The difference between whites and blacks is culture. The whites have their culture through education and training, but blacks had their “culture” imposed on them: miseducation, uneducation, inequality, inferiority, impoverishment, genocide and homicide, self-hate, envy, pride, racism and exploitation just to name a few examples of self-destruction through ignorance.

The problem in subsidized housing is that black people are addicted to their own culture. The only solution is to change the culture itself. It will take over a hundred years to fix what happened to the mind of black people over the five hundred years as an enslaved people. The new and old generations have to die off and a “rebuilding” of the mind of the black nation has to take place because if you start with a negative “as a people” you are going to end with a negative.

We need a rebirth.

Two UMW Daughters of the ’60s

Birmingham By Peter Galuszka

Just a few days ago, Elena Siddall, a Mathews County Republican activist and Tea Party Patriot, posted her account on the Rebellion of being a social worker in New York in the 1960s and the wrong-headedness of Saul Alinsky, a leftist organizer who had had a lot of influence back in the day, among others. I won’t comment on Ms. Siddall’s lively account and conservative point of view. But I do notice one thing: she is a 1963 graduate of what is now the University of Mary Washington, which then was considered the female side of the University of Virginia (campuses being segregated by sex back then).

I have a tie as well to Mary Wash, which is now coed. My daughter graduated from there last year and my cousin-in-law, now living in Tennessee, went there was well before moving on the U.Va. nursing. Our family experience at Mary Wash has been a big positive and I support the school. So, it is with considerable interest that I noticed that the Spring 2014 issue of the University of Mary Washington Magazine had a cover story of a different kind of graduate than Ms. Siddall with some very different views.

So, in the interest of providing some equal time among women who came of age during those years of intense ethical and political awareness, I thought I’d toss in the magazine story to further the debate and show that not every Eagle from Mary Wash thinks like Ms. Siddall (no disrespect intended).

The story has to do with Nan Grogan Orrock, class of ’65, the daughter of an Abingdon forest ranger, who got the civil rights fever when it wasn’t always easy for a young, white woman in Virginia to be an activist. But activist she was, from exhorting her classmates to join protests, to spending summers and other time in the Deep South demonstrating with African-Americans in SNCC, to staring down the real possibility of being beaten or killed and to even today, when she’s been active in the Georgia legislature shaking things up, such as trying to get the Confederate flag off public buildings.

The article, written by Mary Carter Bishop, class of ’67, is intriguing. The writer is a career journalist who was part of a team that won a Pulitzer in 1980 for the Philadelphia Inquirer when that paper was one of the liveliest and best in the nation.

As Bishop writes:Nan Grogan Orrock ’65 is among the South’s most veteran and well-respected advocates of social change. She is one of the longest-serving and most progressive members of the Georgia legislature and has left her mark on every sector of social justice: civil rights, women’s rights, worker rights, gay rights, environmental rights.

“She’s chased after cross-burning Ku Klux Klansmen, cut sugar cane in Cuba, started an alternative newspaper, organized unions, led strikes, been arrested a bunch of times, and still stands on picket lines. At 70, she’s far from done. I had to finally get to know her. The week before Christmas, I flew to Atlanta and sat down with her at the State Capitol.”

Please read both accounts – Ms. Siddall’s and Ms. Bishop’s article – and see ideas through opposite prisms of the 1960s involving two obviously very bright women.

Menu Items on the Free Lunch Smorgasbord

Last week I published “Lean Urbanism and the Bureaucratic State,” a post that described a New Urbanist project to rectify the baleful effects of excess regulation upon urban re-development efforts. Questions arose in the comments regarding this initiative. What were these terrible regulations? Were the New Urbanists exaggerating the costs they imposed? Reader Richard N. Maier, a real estate manager for a major Central Texas homebuilder, contacted me to share his experience trying to redevelop a single property in Austin a few years ago. I republish this with his permission. Remember, this is Texas, where it is easier to build than almost anywhere in the country. — JAB

Bungalow for rent in Austin, Texas

Bungalow for rent in Austin, Texas

The Cost of Regulation: The Effect of Municipal Land Use Regulations on Housing Affordability

by Richard N. Maier

One of my professors at the University of Chicago told the class on the first day, “I don’t expect you to remember everything I talk about here, so my suggestion is for you to walk out of here with one takeaway from each class.” I can’t really say I did that every time, but sitting at convocation at Rockefeller Cathedral, I decided the one takeway that trumped all others was, “There is no free lunch.”

Throughout my career it has intrigued me how many of us travel through our careers and personal lives thinking otherwise.

A discussion of “affordable housing” is a perfect platform for testing this statement. While attending the University of Pittsburgh as an undergraduate, I worked for the Allegheny County Housing Authority in Pittsburgh. Our mission was affordable housing. The Authority constructed, rehabilitated and managed thousands of housing units aroud the count. This program was provided courtesy of the Federal government (a/k/a the American taxpayer). After getting my Bachelor’s degree, I entered the private sector and began my lessons in the practicalities of how such programs became re-titled as “exactions,” “incentives,” “impact fees,” “water quality preservation” and so forth. While I understand that various governments believe their regulations, laws and ordinances serve a variety of purposes that are in the public interest (neighborhood and historical preservation, safeguarding of public safety and the environment, “saving” resources, and so forth), the cost of that menu of delicacies can be expensive to the homebuyer and therefore a tax on the economy.

Inasmuch as my career the lat twenty-five years or so has centered around Austin and Central Texas, my examples will be drawn from that experience.

If life in the development/homebuilding business were simple, we could find a property, get it properly zoned, develop the lots or building sites, and construct the homes. But then it’s not, in fact, simple.

Let’s start with an actual example of building on a single lot in a central city residential neighborhood in Austin. A few years ago we contracted to purchase a lot in an area known as North Hyde Park. This example is utilized to illustrate the extreme costs incurred when developing in the central city, an area of high demand and low supply. The various regulations that overlaid this property were the zoning code, a residential design compatibility ordinance known as the “McMansion Ordinance” (all 26 pages of it), impervious cover limitations, “Neighborhood Conservation Combining District” regulations (a 28-page ordinance that supplements the zoning ordinance), handicapped accessibility requirements, sidewalk construction ordinances, a tree protection ordinance and an historic preservation overlay (which threatens even the simplest of structures with the prospect of being labeled “historic” or “significant”). While each of these eight regulation categories (which I consider to be menu items on the free lunch menu) have what the municipalities or jurisdictions consider to be public purposes, in many instances they are very costly to the ultimate homebuyer and contribute to the reduction in home affordability. As such, they are certainly not free. The following addreses a few of these categories and their impact on development.

Menu Item #1: Historic Preservation

The building lot in this real example in the City of Austin, Texas, was 80′ x 130′; approximately 10,400 square feet in total area. Situated thereon was a bungalow constructed in the early ’40s. It was about 90 square feet in size, had no particular architectural significance (there are probably a hundred similar structures within a mile and a half), was generally rented to students at the University of Texas and was acquired for the value of the land ($266,000) for new home construction. Despite the builder’s determination that the structure was beyond its useful life, the demolition permit was opposed by a neighbor (a renter, in fact; it should be noted that none of the neighbors who owned their homes opposed the demolition). This neighbor posited to the municipality that the structure to be demolished was historically significant and should be preserved. This declaration launched the seller of the house into an entirely new and unanticipated process of having to fight historic designation of the structure. The process from start to finish took approximately nine months during which time the property was left empty.

Continue reading.

The Rise of Walkable Urbanism and “the End of Sprawl”

foot_traffic_aheadby James A. Bacon

The Washington metropolitan region is the national model for “walkable urbanism” in the United States — more so even than metropolitan New York, according to the findings of “Foot Traffic Ahead: Ranking Walkable Urbanism in America’s Largest Metros,” a report released this morning by LOCUS, an organization of smart-growth real estate developers, and Smart Growth America.

The study identified 558 WalkUPs — regionally significant activity centers characterized by a high level of walkability — in the nation’s 30 largest metros. Forty-five of them are located in the Washington region, about half in the District of Columbia and half in surrounding Virginia and Maryland jurisdictions. The overall walkability exceeds even that of New York. While Manhattan is the single-most walkable place in the United States, it accounts for only 0.3% of the New York metro region’s land mass, and outer jurisdictions dilute its overall walkability, explained Christopher B. Leinberger, LOCUS president  and co-author of the report, during the LOCUS annual conference.

Washington’s lead in developing “walkable urbanism,” in contrast to the “drivable suburbanism” that dominated U.S. growth and development between World War II and the Great Recession of 2007-2008, should stand the region in good stead as it faces an economic future made insecure by the retrenchment of its main growth industry, the federal government. Walkable urbanism is closely correlated with the presence of a highly educated workforce, and a highly educated workforce is closely correlated with faster economic growth. While correlation does not necessarily mean causality, an argument can be made the the desirable attributes of walkable urbanism make it easier to attract and retain educated workers who, in turn, contribute to economic growth.

The report findings suggest that there will be future demand for hundreds of millions of square feet of walkable development over the next generation, said Leinberger. “This is likely the end of sprawl.”

A clear sign of shifting market preference is the 74% premium the market is willing to pay for office space in WalkUPs compared to space in Drivable Urbanism.  That’s the reverse of 30 years ago when suburban office parks enjoyed a marked advantage, Leinberger said. Even excluding the New York market, which skews the results, WalkUps enjoy a 44% edge, he said.

While Washington was the star metro, some surprising regions have been coming on strong thanks to dramatic shifts in development patterns in the post-2008 development cycle. Metropolitan Atlanta, which only 20 years ago was the poster child of sprawl, has concentrated 50% of its development in WalkUP districts comprising only 1% of the region’s land mass. Perhaps even more surprisingly, Detroit has seen similarly focused re-development in downtown, midtown and a handful of urbanizing suburbs.

Leinberger attributed Washington region’s success to five main factors. First, the region has the highest overall education level of any metro in the country, Second, the region has been aggressively expanded its Metro rail system; 80% of the WalkUPs in the region are, or soon will be, served by Metro. Third, for the most part local governments put in the right kind of zoning around their Metro stations, encouraging walkable, mixed-use development. Fourth, the region’s real estate industry has mastered the discipline of developing WalkUPs, which are inherently more complex and expensive than green-field development. And fifth, the public sector has done an exceptionally good job of “place management” — creating quality walkable places.

While rail transit gives a big boost to walkable urbanism, said Leinberger, it is not essential. One out of five WalkUPs in the Washington region are not connected to the Metro. Also, many small cities and towns have walkable places. “It sure does help but it is not required.”

Emerick Corsi, president of Forest City Enterprises Real Estate, agreed. “Walkable can be built anywhere,” he said. He cited the example of a town miles outside of Los Angeles where his firm is converting an old shopping center into 2 million square feet of new buildings with the capability to expand a lot more by going “totally vertical.” There is no transit but the development will be highly walkable, he said.

Leinberger predicted that real estate development in the foreseeable future will be driven by the desire to meet the demand for walkable urbanism. The process won’t necessarily be smooth. Some metros — San Antonio, Kansas City, San Diego — have continued to sprawl. Providing affordable housing in the most desirable areas will be a challenge. But if Leinberger is right and the most walkable regions prove to be the most economically dynamic regions, the success of metros like Washington, Boston, New York and even Atlanta and Detroit will be clear for all to see.

Lean Urbanism and the Bureaucratic State

building_codesby James A. Bacon

The really big idea to emerge from the 2014 Congress for New Urbanism (CNU) was “lean urbanism.” The idea isn’t entirely new. Andres Duany, New Urbanism guru and the driving force behind “lean” urbanism, has been publicly discussing the idea for a year or more. But he used the annual confab to flesh out the idea in a series of forums and conversations with others. The idea received a positive response — far more people attended his sessions than Duany had expected — but he received at least one reminder, which I shall recount shortly, that bringing about the kind of reforms he envisions will be exceedingly difficult. The fundamental problem resides not in bureaucratic intransigence or political obstreperousness but in the extraordinary complexity of modern democratic society.

The concept of lean urbanism arises from Duany’s observation that municipal zoning codes and building codes are so complex and onerous that they make it exceedingly difficult for young people, artists, gays and other small-scale players with a high tolerance for risk to gentrify and re-develop decaying urban neighborhoods. They simply lack the scale to hire the architects, planners and lawyers needed to push their projects through City Hall. Without the risk-oblivious pioneers to pave the way and demonstrate the viability of a neighborhood, big-money developers stay away unless government mitigates the risk through partnerships and subsidies, which, of course, are highly risky and expensive for government.

Duany experienced what he calls an “aha” moment, however, when touring Detroit not long ago. He was astounded by hot spots of revitalization where young people had moved into neighborhoods and begun rebuilding under the radar. Detroit’s bankruptcy, he contended, had forced the city to pare back its code enforcement apparatus, with the result that the Millennial pioneers no longer faced the bureaucratic obstacles that had halted re-development before. Was there some way to replicate that experience by, in effect, pre-negotiating a stripped down set of codes and regulations for districts targeted for development?

Lean urbanism, as best I could decipher it from the CNU sessions I attended, moves along two tracks — one on the private-sector side, the other on the public-sector side. In a series of sessions, a succession of lean-urbanism advocates presented papers on different strategies and tactics for bringing down the private-sector cost of re-development projects. Duany sat in attendance as commenter and interloculator.

Thus, David Brain, a board member of the National Charrette Institute, made a presentation on how to reduce the cost of charrettes, which are visioning and design sessions conducted with extensive public input. Charrettes are manpower-intensive and run up significant bills for the developers who hold them. Perhaps the idea could be re-tooled, Brain suggested, by bringing in smaller teams that focused on incremental changes rather than grand visions and by settling for rougher sketches without the complete documentation. There would be trade-offs, to be sure, but the result would be a tool that can “do more with less in the way of financial resources.”

Another concept was to build on the idea of tactical urbanism, in which planners, non-profits and/or volunteers mock up changes to the cityscape by repainting traffic lines, bringing in trees and bushes in planters, installing movable street furniture and holding events to show people what is possible. The idea is to undertake small, inexpensive experiments. If they fail, they can be scrapped at little cost. If they succeed, municipalities can follow up by making permanent changes.

One CNU session highlighted an example of “lean sprawl repair” for the Oak Hollow Mall in High Point, N.C. That project visualized transforming an abandoned mall into a business incubator with space for live-work studios, artisan workshops and a culinary institute. Parking lots would provide space for cheap, pop-up business quarters in the form of shipping containers. Cheap. Fast. Low risk. Other presentations explored the potential for making greater use of live-work units, using lean urbanism to revitalize small towns, and adopting the vernacular architecture of the Philippines to increase energy efficiency of American buildings at low cost.

But achieving public-sector reform is a tougher nut to crack. In yet another session, Richmond, Va., attorney Daniel K. Slone tackled the prospects for reforming the building code. Rules in the building code exist for a reason, he said. They are designed to protect against hazards common to the construction of buildings and they have constituencies that will fight to preserve them. Responsible builders prefer having codes because they protect against competitors underbidding them by doing shoddy work and because hewing to accepted best practices protects them against lawsuits if something does go wrong. When Millennials in Detroit ignore the permitting process, they take on risks — or pass them on to others — that they may or may not be prepared to deal with.

Unlike many government standards, which are imposed from above, building codes come from a grassroots, bottom-up process in which government plays a negligible role in setting the standards. The process is open to anyone who wants to participate, and the results reflect a give-and-take between stakeholders. The 1990s saw important updates to the code as environmentalists pressed for alternative building designs for such things as green roofs, adobe houses and putting outdoor lighting in trees rather than on creosote phone poles. Another wave of reform resulted in the creation of a Rehab subcode that recognized that the renovation of existing buildings justifies different rules than does construction of new buildings, achieving some of the goals that the Lean Urbanists are agitating for.

It might be useful, suggested Slone, to examine the concept of sovereign immunity that protects public officials for the negligent actions of government. Sovereign immunity has eroded over the years as citizens, legislators and courts have sought to hold public officials more accountable. Understandably, government officials are reluctant to expose themselves to the risk of lawsuits by modifying the building code. Clarification or expansion of sovereign immunity may be one of the most overlooked aspects of achieving lean regulatory reform, Slone wrote in a draft white paper. However, reformers should expect the possibility of resistance from the plaintiff’s bar and consumer advocates. Continue reading

Mobile Homes, Wealth Accumulation and the Poor

trailer_parkby James A. Bacon

Manufactured dwellings — mobile homes, trailers, call them what you will — are a major source of affordable housing in the United States. But a few market reforms would make them even more affordable to lower- and middle-income families and make them better vehicles for accumulating wealth. That was the message from a session Friday morning at the 2014 conference of the Congress of the New Urbanism in Buffalo, N.Y.

The great advantage of manufactured housing is that it costs less than site-built housing– $44 per square foot on average compared to $86 per square foot, not counting the value of the land, said Doug Ryan, director of affordable housing initiatives for the Corporation for Enterprise Development. But there are drawbacks. Many homeowners don’t own the land beneath their trailers and they cannot obtain long-term mortgage financing like other homeowners can. Also, zoning codes often marginalize manufactured housing, relegating trailer parks to undesirable locations, if permitting it at all.

Many problems with the industry originate from its origins decades ago when companies manufactured mobile trailers primarily as recreational vehicles. Over time, the trailers evolved into houses set in semi-permanent locations while campgrounds evolved into trailer parks. In 1976 legislation formally recognized the difference between “recreational vehicles” and “manufactured housing” but the underlying business model – RVs/mobile homes sitting on land owned by someone else – did not change.

Severing the connection between home ownership and land ownership created at least two big problems. First, trailer owners were subject to the whims of the landowner. In most states, trailer park owners could evict tenants for undesirable behavior or any other reason with only 30 days’ notice. If the landowner wanted to sell to a developer – boom – long-term tenants found themselves uprooted and forced to move to another location, if they could find one, at considerable expense.

Second, financing companies classified trailers as “chattel” property the same as RVs, which meant that homeowners could not access mortgage financing which charged lower interests rates and stretched out payments over longer periods. The second problem was tied to the first: The disconnect between the trailer and the land beneath it made it less desirable collateral for financiers.

Fortunately for mobile homeowners, a non-profit movement has arisen to address those problems. As Lisa Davis, program officer for the Ford Foundation, described it, reformers are moving across a broad front: changing the law to get manufactured housing titled as real estate; improving product quality with a focus on energy efficiency; solving the land-tenure problem; and reforming the financing system.

ROC USA, a not-for-profit enterprise, is addressing the land-ownership issue by converting trailer parks into land-ownership co-ops. It is impractical to subdivide trailer parks into individual lots for individual trailers, said Paul Bradley, president of ROC USA. But giving trailer tenants an ownership interest in a communal property does several positive things. It gives them equity ownership in the land, and it gives them security against the landlord selling the property and evicting them. Thirty years of experience has shown that homes in resident-owned communities sell faster and sell for more, allowing homeowners to build more equity.

Next Step Network is working on several initiatives to help trailer owners. The organization provides education and credit counseling to trailer buyers to ensure they make intelligent consumer decisions, and it works with the industry to make the costs and risks of ownership more transparent, said Dave Betler, marketing and operations specialist with Next Step. The group urges homeowners to look beyond up-front costs and look at life-cycle costs, which include energy payments. Manufacturing trailers to Energy Star specifications can lower monthly payments and increase re-sale value. Energy expenditures loom large for low-income families – twice the percentage of their income compared to average households.

Bacon’s bottom line: For the most part, I find these initiatives to be highly commendable. Instead of seeking government subsidies or engaging in social engineering, they are trying to make the market work more effectively. The goals of greater transparency and consumer education are laudable. Addressing the land-tenure issue by converting trailer parks into co-ops is inspired. Nudging the financial industry into providing mortgage financing sounds reasonable, although there may be complicating issues, such as the use of long-term mortgages that extend longer than the expected life of the trailer, that the panelists did not discuss.

The other reason I prefer this approach to many other affordable-housing initiatives is that it does not bilk taxpayer or turn lower-income people into wards of the state — it turns poor people into property owners and gives them a means to accumulate at least a small amount of wealth. That builds a much healthier society.