Category Archives: Land use & development

Rocky Mountain High Real Estate Values

Street scene in Aspen, Colo.

Street view in Aspen, Colo.

by James A. Bacon

According to a 2011 Wall Street Journal article, Aspen, Colo., could boast of having the most expensive real estate in the country. I don’t know if that’s still true, but I wouldn’t be surprised. As I sit here blogging at Ink! Coffee, looking upon a patio filled with Pellegrino umbrellas and baskets of bright mountain flowers while perusing the real estate ads in The Aspen Times, it quickly becomes clear that this is a place where I could never afford to live. A 3,414-square-foot home with a view of Aspen Mountain and within walking distance of downtown is on the market for $4,995,000. Select neighborhoods in Manhattan might be more expensive on a per-square-foot basis — I don’t pretend to know the national real estate market — but there cannot be many places that are.

Prone as I am to over-thinking absolutely everything, I have been asking myself, how did Aspen get to be one of the most desirable locations in the planet, while small mountain towns in Virginia with comparable natural beauty slide into senescence? Does Aspen provide lessons that Virginia communities can learn from — not with the unrealistic aim of becoming a playground of the one percent, but with the modest goal of attracting tourists and retirees, supporting jobs, lifting the tax base, and paying for amenities that make life more enjoyable for the people who live there?

In the article that follows, I will endeavor to address those questions, fully cognizant that anything I say is based upon the hasty and superficial impressions. My methodology is simple: I stroll around town with iPhone camera in hand and an eye to observing land use, architecture, transportation, and the retail scene. As always, I pay attention to the quality of the public sphere and the “small spaces.” When possible, I engage people in conversation. As it happens, Aspeners (or Aspenites, whatever they call themselves) are incredibly friendly and eager to talk about their fair city.

Aspen got its start in the late 1880s as a silver-mining boom town. When the silver boom went bust, so did the town. Fortunes did not revive until 1946 when Friedl Pfeifer, a former Austrian skiing champion, linked up with industrialist Walter Paepcke and his wife Elizabeth to form the Aspen Skiing Corporation. The town’s most enduring resource, as it turned out, was not silver but world-class skiing.

The inter-mountain west has many  popular ski resorts, but none has done as well as Aspen at winning name recognition and attracting the super-rich. One key to its phenomenal success, I would suggest, is its silver-mining inheritance: a downtown laid out in a classic grid street pattern, a number of handsome brick buildings, and a municipal government intent upon preserving that heritage. Aspen has something that many of its ski-resort peers does not: walkability. Admittedly, Aspen isn’t the only walkable ski town — Jackson, Wyoming, springs to mind — so pedestrian ambiance is not exclusively responsible for vaulting it into the real estate stratosphere. But a comparison with Virginia/West Virginia ski resorts such as Wintergreen, Snowshoe and Massanutten lacking downtown districts suggest that walkability is a critical differentiator.

Downtown Aspen, comprising about two dozen blocks, is a destination in itself, and real estate ads tout houses’ proximity to the urban center. While the “Mountain Modern” style of architecture often presents a jarring contrast with the 1880s-era buildings, the overall effect is still magical. Visitors come to Aspen, fall in love, and gladly pay a premium to buy a house or condominium that allows them to live here.

Aspen5

Not only are historic buildings from Aspen’s silver-mining past architecturally distinctive but they help define the walkable street space.

Walkability

One of the first things my wife, friends and I noticed when strolling around downtown was the paucity of cars. Traffic was negligible. I assumed the empty streets reflected the lassitude of the summer season at a skiing destination. But a friendly acquaintance, a commodities trader who moved here from Chicago, assured me otherwise. We were, in fact, experiencing peak downtown traffic. Summer tourism is booming, and a lot of people bring their own cars and four-wheel drives to take advantage of the hiking, fishing, rock climbing, and whitewater rafting.

While cars may be scarce, human beings are everywhere. The ability to live here without driving is a prime attraction. People can meet most of their daily needs by walking and biking. The commodities trader said he goes a week at a time without ever stepping in a car. Another acquaintance, a native Philadelphian who lives here eight months of the year and does business in New York, said when he recently sold a Jeep he’d owned twelve years, it only had 15,000 miles on it.

Uncongested streets are the result of thoughtful design. Aspen hews to the rules of classical urbanism. For starters, the buildings define the street space. Rather than standing out and saying, “Hey, look at me” with egocentric starchitect designs, they conform with one another in size, height and relationship to the street. By abutting the sidewalks, their facades delineate the public space of the sidewalk realm. While you won’t see many cars driving around, plenty are using the on-street parking — and that’s a good thing. Parked cars and building facades bracket the pedestrian domain as a distinct space. This pedestrian realm, as I shall describe, is adorned by flower gardens, rain gardens, statuary, street seating, and window shopping that make it extraordinarily inviting. Continue reading

In Praise of Carytown

carytown

by James A. Bacon

One of the Bacon family’s favorite places to go in Richmond is Carytown, an eight-block retail strip embedded in Richmond’s Museum District. Some of our favorite restaurants are there — Can Can Brasserie if we’re in the mood for French, Amici’s if for Italian, Cappola’s if for subs. For soon-to-be empty nesters like us who parachute in from the ‘burbs, the food is the main draw. But not the only one. I look for any excuse to visit Carytown… just because.

As much as I cherish Carytown, I was astonished to see that Cushman & Wakefield profiled it as one of America’s top “cool streets,” giving it a tongue-in-cheek rating of “prime hipness” on its hip-o-meter. I’m so un-hip it hurts. I’m the opposite of hip — I’m pih. Moreover, other than the culinary scene, I’m not accustomed to anyone uttering the words “Richmond” and “hip” in the same breath.

But I do agree, there is something very special about Carytown. Moreover, there are lessons to be learned from its success. Along with Brooklyn’s Sunset Park, Chicago’s Logan Square and other cool streets profiled in the report, Carytown is an urban laboratory, a live demonstration showing how retail can thrive in the age of failing malls, shrinking chain stores, and ubiquitous e-commerce.

According to Cushman & Wakefield, Millennials are the generation that defines what’s what’s cool, fashionable, and chic. Almost by definition, cool streets are areas that draw large numbers of Millennials as patrons and entrepreneurs. Urban Millennials are looking for affordable housing and walkable neighborhoods. The cool streets in the Cushman & Wakefield survey meet those criteria. They tend to be older, affordable neighborhoods developed decades ago when grid streets were the norm, went to seed and now are coming back. Tony, long-established retail districts are too expensive to attract Millennials, either as patrons, entrepreneurs or residents living nearby.

Cool streets are dominated by small, independent businesses. They are eccentric and eclectic. They are never dull and predictable. As such, says the report, they are incubators for new retail concepts.

Carytown, notes the report, is home to about 300 boutiques, shops, restaurants and bars in about 950,000 square feet of retail inventory. Rents vary from $12 to $40 per square foot. Millennials account for 43.1% of the population, one of the highest percentages of the cool streets surveyed, and average household income exceeds $81,000. Vacancies are extremely low and rents are rising, but there are no major redevelopment projects underway.

A couple of observations about how Carytown came to be Carytown.

First, Carytown did not emerge from some master planner’s vision. It evolved organically. This stretch of West Cary Street was built in the 1930s as an extension of the Fan neighborhood, and the standard practice of that time was to lay out the city in grid streets, with buildings abutting and facing the street. Other than the magnificent old Byrd Theater and a converted church, none of the buildings are architecturally distinctive. But the cellular structure of the small, street-facing buildings is perfect for shops, boutiques and small restaurants.

Second, the City of Richmond has stayed out of the way. Other than building a two-story parking deck on a side street, the city has busied itself with projects in other parts of the city. It has not spurred “redevelopment.” It hasn’t blessed the district with big plans.

Third, the district combines automobile accessibility with walkability. Parking lots and the parking deck are either tucked away behind the buildings or concentrated in the shopping centers on the west end — they do not violate the integrity of the streetscape. The sidewalks lining Cary Street create a hospitable environment for pedestrians, with visually interesting shops on one side and parked cars creating a buffer from traffic on the other.

Fourth, only modest attention has been given to “place making.” Those features that exist have come largely at the initiative of the businesses themselves — on-street dining, statues and artwork on the sidewalks.

Carytown is a classic example of organic, from-the-bottom-up development that costs taxpayers almost nothing but adds immeasurably to the quality of life. It’s not the only model for urban revitalization, but it’s a darn good one.

Can Atlanta’s East Lake Experiment Work in Virginia?

The Drew Charter School Junior and Senior Academy in Atlanta's East Lake community.

The Drew Charter School Junior and Senior Academy in Atlanta’s East Lake community.

by James A. Bacon

It is axiomatic among social scientists that concentrating poor people in public housing projects accentuates the social pathologies that make poverty self-perpetuating and unbearable. The oft-touted solution is to create more mixed-income neighborhoods that de-concentrate poverty. Presumably, the presence of working- and middle-class households people would moderate the anti-social behavior of the poor. There’s just one problem: While the poor perceive mixed-income neighborhoods as beneficial, the non-poor do not. Typically, the non-poor flee poor neighborhoods associated with crime, poor schools and disorderly behavior.

How, then, does one develop mixed-use neighborhoods? The answer, according to Carol R. Naughton, president of the not-for-profit Purpose Built Communities: The developer needs to partner with allies who can provide amenities — grocery stores, recreational amenities, and above all else good schools — that make a neighborhood attractive to the non-poor.

“Poverty and place are tied together,” said Naughton Tuesday when addressing the Richmond chapter of the Urban Land Institute. Neighborhoods of concentrated poverty are “swamps” that breed inter-generational poverty that children can’t escape from. Changing the “place” can change the dynamic of poverty.

Naughton came to the view that developers can make a difference when working with the Atlanta Housing Authority. Her aha moment came when meeting Tom Cousins, a mega-developer and philanthropist with grand designs for repairing East Lake Meadows, a community dominated by public housing projects where the crime rate was 18 times the national average and the employment (not unemployment) rate was 12%.

Working through the East Lake Foundation, Cousins targeted 175 acres in East Lake Meadows to build mixed-use housing. But his approach differed from that of other such projects in several regards.

First, East Lake found people to start a charter school. The Atlanta Board of Education was too broken to help, said Naughton, but the George legislature had just passed a charter school bill. Second, upon the advice of local residents, mixed-use housing was limited to people who worked. Third, the foundation developed key partnerships: with the YMCA to build a community facility, with Publix to build the first grocery store to serve the area in 40 years, and with two Atlanta banks to put branches in the neighborhood. Fourth, the foundation morphed into a “community quarterback” pushing a vision for community wellness and cradle-to-college education.

Each element of the plan was important but the charter school proved decisive, Naughton said. In its first year, the school was the worst-performing school in Atlanta. But it improved year after year, and 20 years later now stands as one of the top schools in the city. “Our kids can compete against anybody, against the wealthiest kids in the city,” she says. “We’re serving more low-income kids than any other school in the community.”

The result is transformational, she said. “Now East Lake is an education destination. People want to live there. It’s a great neighborhood for kids.” Middle-class families are moving into the neighborhood. Indeed, the lure of the charter schools is driving revitalization of neighborhoods beyond the original project.

Naughton is not a big fan of the department of Housing and Urban Development. “HUD confuses funding streams with programs,” she says. Programs take more than money. They require local leadership to put it to good use. She believes that the backing of an entity like the East Lake Foundation, with a high-powered and well-connected board, is a critical ingredient to success.

The East Lake redevelopment model has proven so successful that it is being replicated by the Bayou Foundation in New Orleans, and Naughton runs her own organization, Purpose Built Communities, to work with dozens of other initiatives around the country.

Bacon’s bottom line: Even allowing for the fact that Naughton is a cheerleader for the East Lake project, the concept sounds enviably successful — certainly successful enough that it’s worth a try in Virginia. Could the concept work here? The biggest obstacle likely would be the hostility of Virginia’s educational establishment to charter schools. On the other hand, here in the Richmond area at least, there are dozens of entities — Tricycle Gardens and its community farms, Bon Secours and its community hospital, and the vibrant Communities in Schools program — that would make natural partners.

I am amazed by the number of Richmonders who are actively engaged in trying to ameliorate the concentrated, inter-generational poverty in the city’s East End. There is much good will, and there are many great anecdotal stories, but I don’t see much traction in actually vanquishing poverty. Perhaps the missing elements are a purpose-driven real estate developer and community foundation dedicated to building a physical community and institutions to support it.

Questions about Bidding War for FBI HQ

Rendering of proposed new FBI headquarters

Rendering of proposed new FBI headquarters

There’s a bidding war between Virginia and Maryland to snag a planned, 2.1 million-square-foot Federal Bureau of Investigation headquarters campus. Maryland Governor Larry Hogan is in for $317 million in state and local funds, according to the Washington Business Journal. Governor Terry McAuliffe is in for $120 million. In both cases most of the money would be applied to make transportation improvements near the proposed sites.

The Virginia location would be in the Springfield area, and the funds would be used to mitigate the transportation impact of relocating thousands of employees from Washington, D.C., to Northern Virginia. There are many interesting angles to this story:

  • Would the $120 million McAuliffe proposes spending benefit mainly the FBI and its employees, or would the contemplated improvements benefit others in the Springfield area as well?
  • Where would the money come from, and what alternate uses are there for that money? What other projects would be deferred?
  • How would the move alter commuting patterns? Would a significant number of employees be “reverse commuting” from Washington, D.C., to Virginia? Will the relocation ease or stress Northern Virginia’s transportation problems?
  • What would be the economic benefits of bringing the FBI to Virginia? Presumably, as a federal facility, the headquarters would generate no real estate tax revenues. Would a Virginia location inspire many FBI employees to move to Virginia — and, given the lack of property tax revenue, would they represent a net gain to the state and local governments and their taxpayers?
  • Who owns the Springfield site for the new headquarters? How much would the property owner stand to benefit from this deal and resulting investment in transportation improvements?

— JAB

A Once-in-a-Century Opportunity to Get Transportation Right

Photo credit: Wall Street Journal

Photo credit: Wall Street Journal

by James A. Bacon

Take the Uber revolution of summoning rides with a smart phone. Then add driverless cars, which eliminate the expense of paying someone to drive the car. Then overlay the emerging business model of Transportation As a Service, in which people pay for rides when they need them rather than buy cars that sit idle 90% of the day, often incurring parking fees in the process. Shared self-driving cars could take up to 80% of all vehicles off the road, according to a Massachusetts Institute of Technology study noted in a Wall Street Journal thought piece by Christopher Mims.

How would the impact of such an eventuality ripple through the rest of the economy? While acknowledging that such things are impossible to predict, Mims speculates that shared, self-driving cars will spur “suburban sprawl.”

Nearly everyone who has studied the subject believes these self-driving fleets will be significantly cheaper than owning a car…. With the savings you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children.

As for the putative preference the Millennial generation has for living in the city, writes Mims, it’s a myth. “Not only do 66% of millennials tell pollsters they want to live in the suburbs, they are moving there, as population growth in suburbs outstrips growth in cities.”

I don’t agree with Mims’ conclusion, but these are ideas worth exploring. I’m most intrigued by the MIT forecast that the shared, driverless-car future will take 80% of all vehicles off the road. For purposes of argument, let’s say that shared, driverless cars take only half of all vehicles off the road. That’s still an astounding number.

My first question is this: Will the streets, roads and highways in a world of shared, driverless cars be less crowded? To answer that, we must distinguish between the number of vehicles and the number of trips taken. Unless people take fewer trips, they still will need means of conveyance. If everyone rides solo cars, the country may need fewer cars but there will not be fewer cars on the road. Only if people share rides — either in conventional cars, vans or micro-buses like the one pictured above — will there be a need for fewer cars on the road. I think it’s possible that we’ll see fewer cars on the road, but no one can make such a prediction with any confidence.

Here’s what we can predict: A shift to shared, driverless cars will reduce the number of vehicles needed to serve the population. To the extent that fleet operating companies maximize the asset value of their fleets by running them 24/7, most cars will be on the streets (or in maintenance garages or recharge stations) instead of sitting in parking lots and parking decks. The most confident prediction we can make is that America will need fewer parking spaces.

Shrinking acreage dedicated to parking will have a profound impact on human settlement patterns. While it will free up some land in densely settled urban areas — putting a lot of parking garages out of business — the biggest impact will be in the scattered, low-density areas we think of as suburbia. Millions of acres of parking lots across the country will become redundant and unnecessary.

If localities are intelligent enough to eliminate minimum parking requirements, retailers would have every incentive to convert acres of land into something useful — offices, townhouses, apartments, parks, whatever. So much land would be freed up from redundant parking lots that there would be no need to develop another acre of greenfield land for another generation. Localities that anticipate this opportunity by revising their comprehensive plans and zoning codes will enjoy a huge advantage over the laggards in attracting new development.

Now, back to Mims’ observation that Millennials prefer “the suburbs” by two to one over “the city.” That’s a meaningless statement. True, young families may prefer so-called “suburban” jurisdictions with quality school systems, but the operative factor is the quality of the schools, not the low-density and auto-centric design of the communities. Other research shows that Millennials also prefer walkable, bikeable communities. The preference for good schools may be stronger, but that doesn’t mean the Millennials wouldn’t jump at the chance to live in a community that offered both good schools and walkable-bikable places.

In contrast to Mims, I do not think that shared, driverless cars will spur more of the scattered, disconnected, low-density that we call “suburban sprawl.” To the contrary, I believe it will stimulate the redevelopment of low-density, auto-centric communities into walkable urban places.

Localities across Virginia will enjoy a once-in-a-century opportunity to convert parking lots into taxable development without incurring the offsetting liability of needing to upgrade the transportation infrastructure to support the denser population. But this will happen only if they stop mandating parking lot requirements and revise their comprehensive plans and zoning codes to accommodate the new possibilities.

Likewise, the Commonwealth of Virginia, which once again (and as predicted) finds itself short of dollars to fund the roads, highways and rail systems, needs to re-think the twenty-year future. The transportation infrastructure of the 21st century will be Uber-fied. Throw out all long-range traffic projections! Rather than sinking hundreds of millions of dollars into expensive new highways, light-rail rail and Bus Rapid Transit systems, we need to start thinking what kind of investments will expedite the coming of shared, driverless cars.

States and localities that work out the solution first will be winners. Those that stick to the current transportation paradigm will lose.

Walkable Urbanism Is Still on a Roll

The Clarendon area of Arlington is a good example of suburban "WalkUP" development.

The Clarendon area of Arlington is a good example of suburban “WalkUP” development.

by James A. Bacon

Skeptics of a sustained urban revival have pointed with some glee to the fact that most commercial and residential development in the United States continues to take place in “suburban” jurisdictions rather than central “city” jurisdictions. Yeah, they say, there’s been an urban revival in the past decade, but the broader development trends haven’t changed very much.

That line of reasoning is profoundly misleading because it is based on an underlying assumption that the growth in “suburban” jurisdictions is comparable to the scattered, disconnected, low-density development that dominated growth and development between World War II and the Great Recession of 2008.

The fact is that much growth and development in suburban counties consists of walkable urban spaces, or what smart growth theorist Christopher Leinberger calls “WalksUPs.” In a newly published report underwritten by Smart Growth America, “Foot Traffic Ahead,” Leinberger and Michael Rodriguez found that WalkUPs, walkable areas of mixed-use development, gained market share compared to traditional suburban areas in every one of the 30 largest metropolitan regions in the country between 2010 and 2015.

Metropolitan Washington is an exemplar of the larger trend. Renowned for its sprawling Northern Virginia suburbs, the Washington region in fact has the second highest ranking under Leinberger’s methodology. It has 44 WalkUPs accounting for 53% of all office space, 20% of retail, and 23% of multi-family housing in the region. In contrast to the New York metro, where 94% of WalkUP space is located in New York City proper, Washington, D.C., accounts for only 53%of metro Washington WalkUP space — the rest is found in Arlington, Alexandria, Bethesda, Md., and other communities outside the core city.

The data presented in this report suggests [a] structural shift is now taking place; walkable urban development has returned, occurring in some metros more quickly and in some more slowly. Our analysis shows that walkable urbanism has gained market share in the office, retail, and multi-family rental product types over drivable sub-urban, possibly for the first time in 60 to 70 years.

Richmond was not on the list of cities analyzed, but anecdotal evidence suggests the same dynamic is occurring in midsized cities, too. The City of Richmond proper is redeveloping rapidly, adding more new residential than it has seen in decades. But “suburban” counties are urbanizing, too. Some of the biggest real estate projects underway in Henrico County where I live are re-developing land as mixed use projects at higher density, and even the new stuff tends to incorporate mixed-use elements.

Remarkably, the return to urbanism appears to be persisting in the face of the lowest gasoline prices (adjusted for inflation) in history. The move back to walkable urbanism appears to represent a fundamental and long-lasting societal shift.

Virginia Beach on Another Wild Goose Chase

wild_goose_chase

by James A. Bacon

Virginia Beach City Council voted yesterday to give 155 acres to build a biomedical park, reports the Virginian-Pilot. The Virginia Beach Development Authority will oversee the design and promotion of the property.

Virginia Beach Mayor Will Sessoms justified the initiative to lure health care and biotech companies as a way to diversify the city’s economy away from the military and tourism sectors. “You’ve got to look around the country and see what is really growing. As you know, health care numbers continue to increase,” Sessoms said earlier. “We saw that as an opportunity.”

Economic Development Director Warren Harris said the city has identified some prospective tenants, including a regenerative medicine/cancer research firm and a stem cell research firm. MedImmune, a research and development arm of British drugmaker AstraZeneca, met with city officials last month and “left very impressed,” Harris said.

Bacon’s bottom line: This cannot end well. In its pursuit of “economic development” Sessoms seems to be chasing every shiny object that someone dangles in front of him. Last night City Council also voted to sign two agreements with the state that keeps on track plans to extend Norfolk’s light rail system into Virginia Beach on the promise of the most nebulous of benefits. The mayor also supports a mega-convention complex (committing the city more deeply to a tourism-oriented economic development policy). And he supported city subsidies to jump-start redevelopment of the old Cavalier Hotel into a resort complex (another tourism-oriented initiative). As if all these city-backed projects were not enough, now he wants a biotech park.

Well, get in line. Everybody sees high-tech medicine as the next big thing, and everyone wants a piece of it. Bacon’s Rebellion has highlighted the plans of Inova and George Mason University to build a Center for Personalized Health in Fairfax County, and the ambition of Virginia Tech and Carilion Clinic to build a biotech cluster around neuroscience in Roanoke. While both those initiatives face major challenges, they at least have resources that Virginia Beach doesn’t have. The Inova-GMU project is located in the Washington metropolitan area, one of the largest biotech clusters in the country, and Inova has publicly stated its willingess to put $200 million into the project. Meanwhile, Virginia Tech is the largest research university in the state, and it is partnering with western Virginia’s largest health care system.

There is no indication in the Virginian-Pilot reporting that Virginia Beach has forced an alliance with either the Eastern Virginia Medical School (EVMS) or the Sentara Health System. Despite the fact that the Virginia Beach site is not located anywhere near EVMS or Sentara General Hospital, the region’s flagship hospital, Harris sees the park focusing on diabetes, cardiovascular disease, neuroscience and traumatic brain injury. As for supporting assets, Harris cites a branch of Tidewater Community College and the Sentara Princess Anne Hospital, which opened in 2011. Virginia Beach also has donated $1 million to fund the initiative. Really? Is this serious?

The city has many assets. Biotech is not one of them. The chances of building a high-end biomedical cluster are just about nil. For biomedical projects lower down the value-added scale, a run-of-the-mill office park will likely do. If Virginia Beach wants economic development, maybe it should persuade Governor Terry McAuliffe to stop subsidizing the relocation of Virginia Beach businesses to Norfolk. In the meantime, the city should focus on providing core government services of the best possible quality at the lowest possible cost. It’s that simple.