The Ground Floor

Drinking the Growing Cooler-Aid

This post was written for The Ground Floor by Robert Dunphy, senior fellow of Transportation at the Urban Land Institute.

The most important new insight in the book Growing Cooler, is the finding that location (titled Regional Accessibility) swamps density, land use mix, and design in influencing travel and reducing auto travel. It affirms that 'being there' is the best transportation solution.

The book, published by ULI was developed in cooperation with Smart Growth America, the Center for Clean Air Policy, and the National Center for Smart Growth Research and Education at the University of America. The author team includes lead author, Reid Ewing, a research professor at the National Center for Smart Growth at the University of Maryland, and Steve Winkelman, director of the Transportation program at the Center for Clean Air Policy.

It has been the topic of a ULI webinar and a ULI Seattle program, as well as other events including a Capitol Hill program, "GROWING COOLER Federal Transportation and Development Policies for Climate-Friendly Communities," co-sponsored by the Environmental and Energy Study Institute and ULI.

Touring the ICC

This post was written by The Ground Floor by Brandon Sedloff of the Gerson Lehrman Group (Asia).

With the sun setting on another Hong Kong day, a group of 56 participants stepped aboard 2 oversized orange construction lifts en route to the 77th story of the International Commerce Center (ICC). An iconic West Kowloon property, the ICC is being developed by Sung Hung Kai and when completed will stand at 118 floors and 490 meters (1,608 ft). It will be the tallest building in Hong Kong and the third tallest in the world.

Hosted by N. Asia's Young Leaders Group, this property tour was the first in a series of "first look" events, which consist of a site visit followed by a cocktail reception. This format gives participants the opportunity to learn about the design and construction concepts, "walk" the property and see construction's progress, as well as network with other young leaders.

As a chair of the Young Leaders Group for N. Asia, I was especially excited to witness the enthusiasm among Hong Kong's Young Real Estate professional. I look forward to watching ULI and the Young Leaders Group expand throughout Asia.

The Fire Next Time

The San Diego and Los Angeles areas are hit by a raging series of high-impact wildfires -- the worst in the state's history. Many of the blazes coincide with areas already scorched in 2003 by fires that themselves were declared California's worst ever.

But is there any move to move homes away from the areas where a century of firefighting has left many forests choked and overgrown, thick underbrush creating tinder-box conditions? Apparently not. Most homeowners vow that they'll stay in the fire-prone areas, or return to rebuild on the charred foundations of their former homes.

-- Nationally syndicated columnist Neal Peirce

There is one lesson all major disasters teach us -- the first and strongest reaction of local residents is to rebuild what was lost in the same way and the same place. Look at New Orleans: residents of the city's low lying areas that flood frequently have raised such a firestorm of protest at the mere suggestion that New Orleans's land use plan might be rethought after Katrina that rational discourse has been impossible.

Now those who have been burnt out in the San Diego fires vow to rebuild despite the obvious danger that the fires will return once again. Their losses have been tragic, but their commitment to return may be more tragic still.

The Youthful Face of the Industry

The real estate recessions of the 1980s and early 1990s, which created a lack of 10- to 15-year veterans in the industry, have been referenced numerous times here in Vegas. We can speculate that the state of the capital markets is bringing this to top of mind. The number of young faces at the Fall Meeting, however, is proof that the industry is teeming with those who have three to ten years of experience. Many of them have advanced to the leadership roles that otherwise would have been filled by the "missing" generation. Others have worked for a couple years in their first position in the industry and are poised to consider a new job. Studies show that young real estate and land use professionals typically change employers every three to four years (and from observation it often appears significantly less than this). Those in generations X and Y are attracted to a position for many tangible and intangible reasons, such as corporate culture, the challenge of learning new things, gaining responsibility, and -- let's be frank -- compensation. These same things, too, can attract them away.

What can companies, both large and small, do to retain these critical workers with three to five years of experience? How can middle managers and corporate executives breed leaders out of this group? Whether it be mentorship programs, professional development, or increased feedback in the workplace, this is a real problem as the possibility of another downturn looms on the horizon. Noone wants to lose great staff to their competitors if bonuses run out or fewer deals are in the pipeline. This is especially true when you consider the time and money that companies invest in training their staff.

What is your company doing to retain this vital part of the workforce and grow them into leadership roles?

Buzz McCoy on Decisions

This post was written by The Ground Floor contributor and ULI senior resident fellow, Bill Hudnut.

Buzz McCoy is the best I have ever seen or read at relating business to ethics and value systems. He is not pontifical, adversarial, or self-righteous. He does not try to espouse a particular religious point of view. He understands the ecumenical and personal nature of values, that is, that they can be derived from many traditions, secular, spiritual, religious, etc., and they involve intensely personal decisions each person has to make individually. He talks about the importance of trust, for example, and the willingness of leadership to learn from mistakes.

During his book talk in Vegas, one listener raised the question about ULI doing more in this area, which might be worth considering.

Most of our decisions we make are pragmatic: they can be made quickly, and do not involve crises of conscience. Some decisions have to be made on where the preponderance of right lies, because we live in a realm of indeterminate greys where there are very few, if any, blacks and whites. They are more agonizing. Finally, a few decisions are conscience ones, where we have to do what we think is right and let the chips fall as they will. As my Dad used to say to me, do your best and leave the rest.

Two Views on Change

This post was written by The Ground Floor contributor and ULI senior resident fellow, John McIlwain.

Is change something a serious business person or investor should be thinking about now? Or is it something to simply keep an eye on for the future? Here are a couple of different views on the subject.

This weekend the question came up during a small gathering of well educated, successful college roommates. They have had a range of careers: one at the most senior levels of the federal government and now as a tenured professor at a world class university; one as a well known news anchor; and another as a leading foreign currency manager and successful businessman. There was also a distinguished doctor and a retired senior civil servant and commercial attaché.

They dismissed the question as of little interest. Voluntary changes will not be enough, they said, if we have to get to the levels of carbon reductions called for by the scientists (20% to 40% of the U.S.'s 1990 levels), and the government will never adopt the policies needed. We will reach these only if technology makes it possible, they concluded, and went back to talking about the upcoming Presidential primaries. Indeed, they did not expect the levels being called for by the science to be achieved and were unconcerned about the outcome.

What's the Tipping-Point for Gas Prices?

Today's Washington Post article, "Tipping-Point Shock," found that even with high gas prices "most motorists still plan to stick to the roads at least until pump prices climb another dollar."

This information was the result of a new Washington Post-ABC News poll of a random national sample of 1,007 adults conducted by telephone interviews May 17-21.

While the poll found that nearly six in 10 of those surveyed say higher gasoline prices are a hardship, "only 11 percent said that soaring prices would curtail their driving habits in the coming weeks."

The poll seems to confirm Americans' love affair with their automobiles despite rising gasoline prices.

But at what point will we begin to change our behavior? The new poll found that the price of gasoline would have to increase to $4.38 a gallon. And, if you live in the West, that price for a gallon of gas would have to reach $5.12.

The Economics of Climate Change

The United Nations IPCC report released Friday was a wake up call for the world. The report stated that between 1970 and 2004, greenhouse gas emissions increased by 70 percent. And, the Intergovernmental Panel on Climate Change stated that without global action, emissions would increase between 25 and 90 percent by 2030 compared to 2000 levels.

"The largest growth in global GHG emissions between 1970 and 2004 has come from the energy supply sector (an increase of 145 percent)."  The report continues, "CO₂ emissions between 2000 and 2030 from energy use are projected to grow 45 to 110 percent over that period."

That's the bad news!

The good news: there is an opportunity to mitigate greenhouse gas emissions over the coming decades that could offset the growth of global emissions or reduce emissions below current levels. The IPCC report states that an estimated 3 percent decrease in global economic output over the next 25 years is the projected cost of cleaning up emissions.

Time to Sound the Alarm

ULI Senior Resident Fellow Bill Hudnut found the discussions at the recent World Cities Forum in Shanghai troubling as well as enlightening. Below are some additional thoughts from Bill upon returning back to the United States:

"I found the World Cities Forum meeting in Shanghai frightening. A couple of speakers referred to a train wreck coming down the road if we do not change our ways, and make a national, local and global commitment to greater energy efficiency and environmental conservation, to say nothing of alleviating poverty and fighting global warming. I found it frightening because I have a 14-year-old boy who will hopefully someday be a parent with kids of his own. What's going to happen to them if our mentality is not changed? If we go on with business as usual and don't take the imminence of the train wreck seriously? Americans are so comfortable, so unused to sacrifice, so averse to changes in their lifestyle, so spoiled. Can we create positive change? That's why I am frightened. I see no leaders on the national stage who are up to the challenge of rallying our country around goals of sustainability. I am troubled by the clouds on the horizon. What can any of us do? What does the World Cities Forum say about the role of ULI? To me, it says, SOUND THE ALARM. RING A CLARION BELL. GIVE AS MANY PEOPLE AS WE CAN A WAKE-UP CALL. ULI should become a gadfly for change. I have tried to sound this theme in projects I have been working on, in areas such as climate change, affordable housing, regional thinking and acting, funding the infrastructure deficit, balancing growth with preservation and conservation. But I do not feel as though I have spoken forcefully enough. It should be a collective effort by all of us at ULI, and our members, to face the problems discussed in Shanghai and deal with them as directly and positively as we can. We cannot do everything, but we can do something, and because we cannot do everything, that does not mean we should not do what we can do."

From China: Different Takes on Leadership

ULI Senior Resident Fellow and former Indianapolis Mayor Bill Hudnut reports from the World Cities Forum on a discussion regarding effective leadership.

"There's an interesting dialogue that has developed here between what is being called 'authoritarian democracy' and the more traditional form we know in America of 'ballot box democracy.' Actually, they are two sides of the same coin. The former refers to the people like Robert Moses or Mayor Daley in Chicago, who basically made tough decisions and then had a take it or leave it attitude. The appeal is that they get things done. They are strong executive-type leaders, whether elected or not. Mayor Ron Littlefield of Chattanooga expressed reservations about this concept, pointing out that you could have a bad leader who would not do good by the community. He preferred working within the system, forming partnerships, engaging stakeholders, trying to achieve forward momentum through cooperation rather than strong 'my way or the highway' executive action.

"Ron is probably more right, but the key is to have strong leadership within the system because so much change is occurring and leaders need to help their communities adapt. They need to embrace change and rise to the challenges -- global warming and affordable housing among many -- rather than just getting along by going along, without creating any ripples.

"The key here in ying-yang China is balance between the two approaches. Elected officials cannot just be caretakers, although they must mind the store. But, they must see the big picture, have a wide vision, and the courage to go after the tougher issues and meet them head on. It's the opposite of running a government by poll numbers. Leadership is a job, not a position. It requires 1) vision; 2) motivating others to follow it; and 3) following through, implementing it."

World Cities Forum II

Better City, Better Lives. That's the motto of Shanghai's leaders and sums up the attitude of those attending ULI's second World Cities Forum this week.

Voting in the opening session, more than 85% agreed that to be competitive in the world market, cities must invest in the necessary infrastructure, create a sustainable and livable environment, provide a strong employment base, and enable dynamic civic leadership.

The jury is still out--the majority of participants noted that many aspiring cities have yet to meet these criteria. How do cities in emerging markets live up to their aspirations?

Over the next two days, we will be tackling the more difficult quesions of "how" to pull this off. Participants will be posting their comments and ideas, and invite you to do the same.

For more information, check out the report on a ULI workshop held here last September 2006 that you can find at Shanghai Urbanisation and EXPO 2010 Forum—A World Cities Forum Workshop Report.

As noted, "Shanghai’s current planning and the new 1-9-6-6 strategy provide a visionary planning framework and an excellent starting point for the municipality’s future development. Regional in approach, it encompasses many of the large issues facing the city’s future development, particularly the issues of how to manage explosive population growth and mitigate against high densities within centre city core areas."

This Just In...From the World Cities Forum

"A country without a past is like a man without a memory." So writes ULI Senior Resident Fellow Ed McMahon, noting the alarming rate at which historical buildings in Shanghai are being torn down and replaced with new high-rises. McMahon is one of 100-plus participants at ULI's second World Cities Forum, being held this week in Shanghai. Below, he shares some insights on development in the city and surrounding area during a tour just prior to the event:

"Shanghai really blows the mind: 20 million people, 6,000 skyscrapers (all built in the last 25 years). On the positive side, they [private- and public-sector officials involved in land development] are building new housing, roads and other infrastructure -- all on a scale that Americans can't even imagine.  Yesterday, I went on a tour to the historic city of Suzhou and afterward visited a "new city" of 600,000 people, built in about five years. Everything here is on a mammoth scale and the drive to transform China is occurring at breathtaking speed. 

The Other Face of Las Vegas

Like Dorothy in the Wizard of Oz, I find Las Vegas to be a land of fantasy. Walking down Las Vegas Boulevard is a bit like following the yellow brick road with the promise of finding something magical at the end.

Ater six days in Las Vegas, however, it becomes abundantly clear that there are two faces to this world-famous city.

The face the world is familiar with is that of the Las Vegas strip with its monolithic casinos -- each trying to outdo the other to attract the throngs that flock to the city for its gambling, entertainment and fun. That world includes million dollar homes and luxury condos being bult by the likes of "The Donald."  The city even has a TV show named after it that portrays the "behind-the-scenes" Las Vegas.

But veer away from the neon strip and another world takes shape; a world of the working poor and the homeless. A visit to a flea market in North Las Vegas exposed the city's underbelly; people living along a river creek in makeshift "houses" who bathe in the river and scavage for food. This is the "other face" of Las Vegas that tourists don't see. Las Vegas's motto, "What Happens in Las Vegas Stays in Las Vegas," is not one that should apply here.

Alternatives for Growth

Tysons Corner, Virginia -- just a stone's throw from Washington, D.C. -- was carved out of the Virginia countryside and evolved from one major shopping mall more than three decades ago into a two-mile swath of offices, strip malls, car dealerships and housing. Today, Tysons has 8,000 residential units, 45 million square feet of commercial and retail space and 116,000 people who either live or work in the area.

Tysons is slated to be the site of four future Metro stations and Fairfax County is trying to get a grip on how growth should develop. The county has appointed a Tysons Land Use Task Force (www.fairfaxcounty.gov) to examine three scenarios for future growth. The Task Force held a series of six public workshops March 19, 20 and 21 to receive input from the community on various alternatives for growth. Approximately 400 people participated in the workshops.

The three scenarios all assumed mixed-use development but each had a different emphasis. The "housing emphasis" would increase residential density and support a live-work-play community, while encouraging the use of public transit. The "employment emphasis" would assume increased job growth with a focus on using transit as well as providing additional housing for a better balance of living close to work. The "pushing the envelope" scenario assumes growth that approaches the limits of sustainable development for traffic, transit and other infrastructure.

Following Shackleton's Lead

Perhaps one of the greatest leaders of the past century was Sir Ernest Shackleton, who brought all of his 27 crew members safely home after two years of being shipwrecked off the coast of Antarctica.

The group's successful return is widely attributed to Shackleton's extraordinary leadership skills, which were based on creating optimism, building morale, communicating effectively, and leading by example. These principles formed the basis of a ULI leadership workshop hosted this week for industry professionals and ULI staff.

Margot Morrell, co-author of the best-selling Shackleton's Way, led the course, showing how incorporating Shackleton's fundamentals can lift negativity and create an atmosphere in which employees perform well individually and in teams, making contributions that can benefit the entire company.

"Green" Practices

Today's Wall Street Journal outlines a new initiative by Charlotte-based Bank of America "to promote 'green' business practices at its own facilities and by its commercial and individual customers."

The $20 billion, 10-year initiative will help the bank's commercial customers "finance the production and use of new environmentally friendly products, services and technologies." BofA will also create the capability to trade carbon emissions credits, according to the article.

The bank's initiative does not stop with its commercial customers.  BofA will also provide mortgage incentives to customers buying homes that meet environmentally friendly standards. In addition, BofA will spend $1.5 billion for constructing its own new office and banking facilities and for implementing conservation measures at its existing facilities.

This is a big step toward acknowledging the necessity of building in an environmentally responsible manner and one that can set a benchmark for other corporations to follow.

While building green initially costs a bit more, the long-term savings more than offset the additional costs.  To learn more about the benefits of building green you can attend ULI's 3rd annual "Developing Green" conference in Pittsburgh April 23-24.

Affordable Housing: The Next Opportunity?

Related Companies may become a trendsetter for developers struggling to find ways to sell new homes in a down market. The Miami-based company is turning away from its luxury condominium development in favor of affordable housing.

According to an article in the March 1 issue of Investor's Business Daily, "Seeking Curbed-Cost Appeal, Builders Cut Homes' Price And Size," the company recently created an affordable housing division.

Related's experiment seems to be working. A planned Miami high-rise building has already presold 497 of the 500 units available with prices starting at $159,000, "about half the median price of existing condos."  The article states that the company will make about a 15 percent profit on these units, but that "the demand for this type of housing is so great that the volume you can do justifies the concession on the returns,' said Oscar Rodriguez, senior vice president of Related's affordable housing division."

It seems KB Homes is also "retooling"' to make its homes smaller and more affordable. Perhaps this is the beginning of a much-needed trend in new home building. According to Investors Business Daily:

Developers are watching how Related fares in its Miami affordable housing mission, Finnie says. [Bryan Finnie, managing director of North Miami developer Redevco]

"Over the last 24 months you were almost a heretic to talk about affordable housing," he said. "Now the conversation is, 'Oh, market opportunity.'"

With all the unmet demand for housing that is affordable, developers could earn a reasonable profit as well as do something to give back to the communities in which they build.

Will other developers follow and make this a nation-wide trend?

Not In Disney's Backyard

Walt Disney Company advertises its theme parks as a "family affair" but apparently does not adhere to that principle in reality.

As reported in yesterday's Wall Street Journal, “Disney Files Suit Against Low-Cost Housing Plan” (subscription required), the company filed a law suit Monday against the city of Anaheim, Calif. to stop the construction of housing that includes a designation that 15 percent of the 1,500 units be set aside for lower-income residents.

While these affordable units would help provide housing for the city’s lower-wage entertainment workers, whom Disneyland employs, it seems the Disney Company wants to choose its neighbors. Company officials are pushing for a high-end hotel-condominium on the 26-acre site adjacent to the theme park.

The article states, "The entertainment company says residents would be out of place in a district designed for tourists."

Going Green

London's Mayor, Ken Livingstone, plans to cut carbon emissions in the city by 60 percent by 2025. The mayor announced a Climate Change Action Plan, backed up by a budget of $90 million.

In a broadcast aired on NPR yesterday, Livingstone said that he would attack the problem on several fronts: a green homes program with reduced-cost wall insulation; a green business program to encourage conservation; a green energy program to change how energy is generated and supplied; and a green transport program to encourage fuel-efficient cars and public transportation.

This is quite an ambitious undertaking and one that deserves serious consideration as a model for the U.S. to emulate. Mayor Fenty (the newly-elected mayor of Washington, D.C.), what say you?

Superstar Cities Losing their Shine?

Joel Kotkin, Irvine Senior Fellow at the New America Foundation, penned a thought-provoking commentary, "The Myth of 'Superstar Cities,'" in the February 13 edition of The Wall Street Journal. He challenged the assumption that America's "elite" cities -- New York, San Francisco, Boston -- hold an edge, in terms of potential to attract the most talented workers and most desirable businesses.

While those cities are economic, cultural and entertainment hubs that appeal to the highly affluent, Kotkin points out that the high cost of living -- specifically, housing -- in those places have priced out a large segment of America's workers, who, while not rich, are desirable residents, many of whom are no less smart and no less entrepreneurial than those with the highest incomes.

"Economic and demographic trends suggest that the future of American urbanism lies not in the elite cities but in younger, more affordable and less self-regarding places," Kotkin says, noting that Houston, Charlotte (NC), Las Vegas, Phoenix, Dallas have created more jobs and gained more net domestic migration than the superstar cities. He points to the movement of large firms, including Fortune 500 companies, to more "opportunistic" cities that are more affordable to a larger percentage of the workforce. Such cities, he predicts, will increasingly lure some of America’s most talented, highly educated workers seeking to live in an environment that is more family- and business-friendly. "The urban future," Kotkin asserts, "will belong mostly to places that continue to draw and nurture the middle class, which has driven the rise of most successful capitalist cities."

Are Americ'’s global cities losing some of their shine? Is a city that is not income-diverse truly sustainable? Over the past several years, America as a whole has been increasingly described as a nation with a growing gap dividing the haves and the have-nots. Are our cities also falling into one of these two categories? If so, which type of city -- elite or opportunistic -- might be considered a "have-not" city or a "have" city?

A Good Time to Buy?

The National Association of Realtors countered news accounts regarding the housing market decline by reminding reporters at a Washington, D.C., press conference this week that homeownership remains a sure bet for those who think long-term. The main message: Real estate is a local business, influenced primarily by local economic and employment factors.

According to NAR President Pat Vredevoogd Combs, the current ample inventory of housing in many markets, couple with low interest rates, may have created "the best time to buy" since 2001. Her advice to buyers: Plan on staying in a home five to seven years to recoup your initial investment and start building equity. Her advice to sellers: Price your home appropriately for local market conditions.

A self-described "bastion of hope for down markets," she said, "Houses priced right are still selling."

Attendees got a preview of a new $40 million NAR advertising campaign, consisting of two ads, one prepared for buyers, the other targeted to sellers, slated to run throughout 2007. The radio and television ads build on a print campaign NAR launched last fall. The effort, said Coombs, aims to "answer the consumer confidence question."

What are you seeing in your market? Are houses moving? Are prospects still on the fence? Do you think it is a good time to buy or sell?

A Fond Memory of President Ford

Hoosiers in central Indiana might appreciate this little anecdote about former President Gerald Ford, who was honored and eulogized this week.

I forget the date, but when Mr. Ford came to visit Indianapolis, Governor “Doc” Bowen and I went to the airport to meet him. The President invited us to ride to downtown in his limousine, the Governor in the comfortable back seat, I, the lowly mayor, at 6’5”, on the jump seat. We had a pleasant ride on the Interstate, but when we came off at the Illinois Street ramp, we hit a rather substantial chuckhole which shook the whole car.

Said the President to the Governor: “Some streets you got here, Doc.” To which Doc Bowen replied: “Don’t blame me. These streets belong to Hudnut.” And what could I say, but “I’ll get it fixed ASAP.”

I thought to myself: “Well, that’s the way it goes in our federal system. ‘Stuff’ in the form of unfunded mandates, grants, and regulations of all sorts, comes down from the feds to the state, and down from the state right into the lap of local officials, who have to pay for and clean up the mess!” But of course, I didn’t say that.

During the short while I was in Congress, it was my privilege not only to vote for Jerry Ford as Vice President, but also to work with him as the Republican leader in the House. He always told us what the “party line” was on a vote, but always also said: “Do whatever is best for your constituents and your conscience.” He was a humble, honest man, not egotistical or imperious, decent and ethical in all regards, eminently civil in his relationships, respectful of varying opinions, fiscally conservative and socially moderate, an example of responsible Republicanism at its best.

He served our country well, and we will miss him.

P.S. And if anyone is interested, his favorite lunch in the cloakroom off the floor of Congress was cottage cheese with ketchup on it!

Editor's note: This blog is posted on behalf of ULI Senior Resident Fellow William H. Hudnut III, who served in the U.S. Congress from 1973-1974, and as mayor of Indianapolis from 1976-1991.

The Gift That Truly Keeps on Giving

I received a pleasant surprise in the mail today -- a holiday gift from Salt Lake City-based Kennecott Land that truly reflects the company's dedication to land conservation and sustainable building. The company sent a tote bag made completely of recycled 2-liter soda bottles. The bottles were shredded, melted and spun into fiber, which was then woven into cloth. Not only are these bags attractive and useful, they send a very clear message that Kennecott cares about the environment and wants others to share that commitment. 

Indeed, according to a note from company president Peter McMahon, "More important than a sustainable bag is sustainable collaboration. We would like to thank you for the many ways in which we are able to work together to build a strong community."

It's a clever way for Kennecott to "walk the talk" on going green, and to reinforce the benefits of sustainable development.

Certainly, Kennecott is an industry leader is environmentally conscious development. Do you feel this type of development is becoming more mainstream in your community? Why or why not? Give us your feedback.

 

Density, Mobility Explored in 2006 Venice Biennale

The November/December issue of Urban Land has a feature story by Penny Kay, City Challenges, on the 10th Biennale exhibition in Venice that closed November 19.  Written prior to the opening, the article is a good introduction, but could not capture the experience which was both fun and informative.  Creative use of multi-media brought the cities to life to understand both the shared challenges and unique solutions. 

For me, it also brought to life the guidelines distilled at the ULI World Cities Forum in London, in three dimensions and twenty feet high.  (Here's a pdf of Trish Riggs' August 2005 Urban Land story: Download urban_agenda_c_uli_2005.pdf) 

Did you visit the Biennale exhibit this year?  What did you take away from the experience?  Add your comments and ideas to this post or EMAIL:aoliveri@uli.org, and we will keep the conversation going.  Ciao! AO

A Negative Victory for the Democrats?

This perspective is posted on behalf of ULI Senior Resident Fellow William H. Hudnut, III, a former U.S. representative and mayor of Indianapolis.

Never, since 1974 when I lost for re-election to Congress in the aftermath of the Watergate debacle, have I seen so many angry voters lined up at the polls as yesterday. So many of them seemed so fierce, so determined, so hot under the collar, and the results show that they wanted to send a message. They were mad, and frustrated.

Reading between the lines, I think the voters were saying they were tired of one-party Republican rule in Washington, a do-nothing Congress, and a President who, for better or worse, rightly or wrongly, appeared to them as an ineffective leader. They demanded change. They said we need new strategies devised for the war in Iraq, and the war on terror. They yearned for healing and unity and a true spirit of bipartisanship in our polarized political atmosphere, and they called for an end to vicious negative campaigning that emphasizes character assassination over adult discussion of the issues.

They wanted a restoration of true values like honesty, accountability, transparency and integrity, and a clean-up of the culture of corruption that seems to have seeped into the political system. They shouted: Enough is enough.

So the victory was a negative one for the Democrats, not an affirmation of their agenda. What we can all hope for is that the next two years will not be stalemate, but rather bipartisan commitment to working together. My own feeling is that that will be hard to fashion. There's still too much lingering rancor, too much of "us vs. them" and "win or lose" attitudes, too much "gotcha" politics. Which is too bad, because a whole host of issues require attention: global warming, our dependence on foreign oil, minimum wage considerations, deficits, tax cuts, homeland security, urban policy, infrastructure funding, immigration policy, and so forth. In spite of my pessimism, let's hope with all our hearts that some modicum of reasonable dialogue can occur, and some responsible legislation can result.

The Nov. 7 elections involved a couple of issues in which developers and ULI members in general, might have a special interest. The first is eminent domain. Due to the backlash against the Supreme Court's Kelo decision, which affirmed the right of municipalities to use eminent domain on private property to promote private sector economic development, eleven states had this issue on their ballots. Nine states (AZ, FL,GA, MI, ND, NH, NV, OR and SC) voted against using this power to transfer private property to a private person or entity. Two -- California and Idaho -- voted against such limitation. This is a controversial issue, easy to distort, and it involves the traditional conflict/tension between individual property rights and community interests. Certainly, from the viewpoint of most mayors, eminent domain is a necessary arrow in the quiver to advance economic development opportunities, but obviously, it has to be used judiciously. Without it, a city has no leverage to bring a recalcitrant land owner to the table.

The second issue is infrastructure funding. California voters approved $37 billion in borrowing for a variety of public works projects -- roads, bridges, schools, ports and levees. This is as remarkable as it is far-sighted, because ordinarily, one would expect such propositions to be defeated by the anti-tax increase forces. But California is facing pressing infrastructure needs (in 2005, the California Infrastructure Coalition's Annual Report estimated that the state would have to spend $82 billion on infrastructure upkeep and construction by 2009). Coming on the heels of initiatives in other states -- like the passage in Austin, TX, and Denver, CO, a couple of years ago to fund light rail and commuter rail development -- the voters' approval of additional funding for infrastructure in California represents an enlightened effort to address future needs with current action.

Integrating Technology

Today's Planetizen pointed out a new direction the City of Durango is taking in their comprehensive plan update -- the city is using Google Earth to help citizens visualize the city's Preferred Development Scenario, and has posted a video tutorial for users on how to download Google Earth and view the file. This is particularly interesting in that it follows a theme we've been discussing here at ULI; namely, how technology is becoming very accessible and user-friendly, so that it is no longer a barrier, but rather a springboard into new methods of communication and collaboration. It is a discussion that many businesses are (and should be) having.

ULI's very own Ann Oliveri recently pointed readers of her blog in the direction of Robert Scoble and Shel Israel's book, Naked Conversations ("how blogs are changing the way businesses talk with customers"). The idea of corporate blogs is interesting both because the origins of the blogging movement were firmly grassroots and anti-establishment and because the more informal, topical, opinion-centric nature of blogs clashes with the hyper-formal, over-edited, and tightly-controlled communication strategies of many businesses. But blogs as a communications vehicle to customers are taking off, particularly in the real estate arena. (Inman News just ran a four-part series on why and how real estate professionals should start their own blogs.)

Blogs are just the tip of the iceberg. Like the City of Durango, governments, organizations, and businesses can use new technologies such as online mapping and social networks to help communicate better and more openly with their residents, customers, or members. It is getting easier to do every day; the hard part is dipping that first toe into the water.

Windy City Infrastructure: Public or Private?

The City of Chicago has become "the Silicon Valley of infrastructure privatization," and Mayor Richard M. Daley its Bill Gates.

First, the sale of the Chicago Skyway.

Second, the privatization of downtown parking garages.

Now, the proposed leasing of Midway Airport.

The opportunities for Chicago?

1. Money -- today -- lots of it -- that can be spent on more infrastructure or other projects and programs.

2. Private know-how and entrepreneurship running multi-billion-dollar assets.

3. Market-value pricing, which will help travelers make more rational transportation decisions.

The potential threats to the Windy City?

1. Formerly "public" goods now run with goals of profitability.

2. Potential exclusion of those without money.

3. Public accountability of private concerns -- especially private concerns headquartered in foreign lands (e.g., Spain and Australia).

What is the effect of infrastructure privatization on "the responsible use of land?"

Comment below.

Scan ULI's Infrastructure Initiative home page.

And come to ULI's Spring Council Forum May 9-11 in Chicago to find out.

"Danger -- Explosive Loans"

"Danger -- Explosive Loans" is the title of an article in the October 23rd issue of Business Week describing the explosive growth in a new debt instrument known as the "collateralized debt obligation" or "CDO". The article is a must-read if you want to gain an understanding of the "newest of the new" in the debt capital markets.

CDOs are much praised for the liquidity they have added to the debt capital markets and much maligned for being a highly leveraged collection of lower rated assets which Wall Street firms "slice and dice", i.e., repackage into investment grade offerings. Sort of like making silk purses out of sows ears.

Like most things financial, reality is somewhere in the middle and will not be known until some event which withdraws liquidity from the capital markets occurs which then stresses the system.

Read the article and let us know what you think. Are CDO's what their cracked up to be or an accident waiting to happen?

Where Will Our Children Live? (Manufactured Housing)

Manufactured housing is no longer just for trailer parks. Manufactured -- or pre-fab or factory-built or modular -- housing is emerging as a viable housing option for many types, locations, and sizes of housing. Rising construction costs and growing land costs are forcing builders and buyers to look for ways to bring down overall costs, including increasing the speed of construction. And high profile and design-oriented architects are creating contemporary products that appeal to younger generations for more urban settings. Popular magazines geared towards design, like Dwell and Metropolis, highlight pre-fab products. Sustainability and green practices are even being employed in pre-fab. The stigma of trailer parks as the sole repository of manufactured products is vanishing. If costs can be kept down while providing modern green manufactured homes, these products may be poised for mass acceptance and appeal.

Friday Wake Up: Leadership is Essential

Good morning and welcome to the final day of the fall meeting! Last night was a late night, with dinners and receptions and networking opportunities at venues all over downtown Denver. The Women's Reception packed the Denver Athletic Club across the street from the convention center, while the Young Leaders gathered at Rise nightclub, reportedly staying until the wee hours of the morning.

Today, the meeting winds down with two leaders that occupied posts at the highest levels of the government. At breakfast, former Secretary of Health and Human Services and current president of the University of Miami, Donna Shalala, will discuss the long-term outlook for healthcare in the economy, while this afternoon, former Secretary of State Colin Powell will close out our time here in Denver with his experiences on the power of diplomacy. In between, we have a full slate of blogging activities planned for today.

At 11:15 a.m. Mountain Time, be sure to catch our webcast of the Battle of the Best Ideas, a high-energy session that is billed as ULI's version of American Idol. We also will be bringing you podcasts recorded yesterday with Jim Collins, Bill Emmott, and Peter Calthorpe. We'll cover sessions on energy prices, mixed-income housing, manufactured housing, and second homes.

Yesterday's poll asked about global influences on the real estate industry, and 66.7% of you clearly agreed that China will likely have the most impact in the coming decade (click on the poll image at right to see the full-size version of the results). Today's poll brings up a topic discussed in Emerging Trends in Real Estate 2007, released yesterday, about obstacles to investment and development.

When the last attendee hops on their flight home, it doesn't mean that we'll be shutting down our operations. Keep an eye on this blog in the coming weeks for more wrap up of what happened in Denver, as well as coverage of news, trends, and more.

Planned communities - lessons for Europe?

On finding that I head the Centre for Regeneration and Sustainability for ULI in Europe, U.S. members often comment on how much the U.S. can learn from European best practice in this area. I certainly agree that we have much to offer and are willing to share but my time spent with the Sustainable Development Council yesterday also reaffirmed my view that Europe will also be looking to the U.S. to shape our communities.

Appropriately, the Sustainable Development Council was hosted at Stapleton. I'm sure many of those at the fall meeting have taken the time to visit this grand new planned community being developed 4,700 acres out at the old airport site. Coming from Europe, it was fascinating to see this project being undertaken on such a large scale and to see so many of the same issues we are all tackling in our communities being built in from the ground up: the mix of housing styles, the density, social infrastructure (good schools is such a key factor for all our communities these days) and the celebration of green space as an integral part of the project.

What I saw shaped my contribution to the Council's debate over what the US and Europe could learn from each other. In many ways, what we are tackling in Europe is urban renewal; taking our beautiful but aging cities and halting the decline that we blindly built in through supporting a separation of uses (for example, removing retail from our town centres) and not forseeing the effect that poor quality housing stock would do to our communities. Therefore, we have much to offer in terms of best practice in adaptive re-use of existing assets, infill development and the general revival of the heart of communities through mixed-use.

But what I take home from Denver is that Europe can learn from planned communities such as Stapleton; in the U.K., for example, we need 1.1 million new homes over next 20 years and while we will aim for high density in our cities (yes, I know you probably don't think that is possible) some of these housing needs will have to be satisfied in greenbelt areas. The Thames Gateway region, to the east of London, will get 200,000 new homes -- so we are going to have to get our new planned communities right the first time round.

Stapleton is certainly a case study to take back to Europe. It illustrates that developers such as Forest City can successfully tackle the social issues that bind our communities enabling us to build new homes rather than new houses.

Urban Renewal of Ski Resorts

Generally considered playgrounds for the wealthy, ski resorts function as small towns with many of the same issues as the largest metropolitan areas -- aging infrastructure, affordable housing shortages, traffic and transportation woes, diversifying economy, growth management, and loss of open space. But, these issues are addressed on a much smaller scale and, oftentimes, in a much more direct manner than their big city counterparts (by virtue of their smaller scale).

Many ski resort  areas have been successful in creating affordable housing, preserving vistas and open space, and operating well -used transit systems. Places like Aspen, Park City, and Sun Valley, among others, have been able to fashion sustainable futures. Updating, redefining, and redeveloping the base villages have defined the "town center." So, based on the success across many issues and due to the fact that the smaller size arguably makes them easier to dissect, investigate, and analyze, ski resorts can be viable laboratories from which  larger cities can extract workable models for growth management.

Parking - The key to a walkable, transit oriented community

It is ironic that one of the critical components to creating a pedestrian and transit oriented community is a parking. This is borne out by Belmar, a mixed-use development in the first ring suburb of Lakewood, Colorado, a destination for many ULI and Council tours this week. The mix of retail, office, and residential on a street grid carved out of a dead 1960's mall required 9,400 parking spaces, 6,000 in garages. While this was about the same number that served the mall, the prior surface lots did not work for an urban enviroment, requiring configuration into smaller, more compact parking. The parking, streets, and drainage improvements required $120 million in infrastructure spending, too heavy a burden for the financial success of the project, so the city raised money through bonds. The result is an attractive environment with an active street presence, lacking from the mall. The transit connection today is limited to bus routes -- a future rail connection is planned -- which anecdotally serve both shoppers and residents. This is a very different access than a mall setting, where the transit often runs on boundary streets, requiring a long and inhospitable walk. In addition to mixing the parking better into the retail, office, and residential uses, the shared parking allows the same number of spaces to serve three times the density as the former mall. While it seems odd that to create pedestrian and transit orientation requires parking, that is the key to making such projects work in the suburbs. Form follows parking.

For further information on parking in mixed use settings, see the ULI publication, Shared Parking.

Thursday Wake Up: The Business Edge

The big chill outside is thawing, perhaps thanks to the tremendous energy being harnessed at the Denver convention center. Yesterday's posts gave you a taste of the many different activities and ideas going on here in the Mile High City, but today is the day that everyone rolls up their sleeves and gets down to business.

In fact, business and the economy are the hot topics today. Attendees will have the opportunity to attend a breakfast featuring former Economist editor Bill Emmott discussing the lessons for the 21st century that can be gleaned from the events of the 20th century, as well as lunch with business expert Jim Collins. (Both speakers will be the subjects of podcast interviews that will be featured on this blog.) Today's poll focuses on the global economy -- specifically the importance of certain regions to the business of development -- while the resuls from yesterday's poll highlight the technological advances that have most helped blog readers in their business. As you can see, mobile e-mail and Internet devices, such as Blackberries and Treos, were the clear winner (click on the image for a larger version of the poll).

Today is also a day that is hotly anticipated by many in the real estate and development business -- the release of Emerging Trends in Real Estate 2007. Yesterday's Wall Street Journal gave readers a sneak peek, and today the full report is being made available to ULI members.

On tap for today's webcast is a panel on the housing bubble (tune in today at 11:15 to watch live), and today's podcasts will feature conversations with Bill Emmott, Peter Calthorpe, and Jim Collins.

Finally, we are enjoying the warm reception the blog has received in its short existence and the participation of blog readers in our polls, in the comments, and behind the scenes.

We hope you keep coming back to check out what is happening on The Ground Floor.

Young Consumers and What They Want

What does the future hold in terms of the wants and desires of Generation Y and Generation X? After Gadi Kaufmann's discussion of the demographics of these two age cohorts, including statistics on population growth, homeownership, and spending power, the panel prognosticated on the keys to success for the retail and residential markets. The panelists seemed to agree on the importance of authenticity, interaction, and inclusion of sustainable/environmentally-friendly components. But, the importance of home ownership v. rental opportunities and neighborhood/community amenities v. in-home features was less clear, perhaps because of Gen X and Gen Y's tendency to be somewhat nomadic and more interested in social interaction. Even more unclear, however, was the relationship between the preferences for residents of top tier urban areas and those of second or third tier cities. Does the willingness to trade square footage for good design or the notion of trading a back yard for a vibrant urban community apply across the board to Gen X and Gen Y, regardless of type, size, and location of the larger city or region in which they live? Is it possible to declare preferences for the entire age cohort, or is it really a matter of narrowing down the types within the cohorts?

To see what the panelists were saying, check out the archived webcast of the session.

Fewer Picket Fences, More Offices and Regionalism

This post was written by The Ground Floor contributor Richard Haughey.

J.C. Nichols Award winner Peter Calthorpe laid out a set of challenges for the future of the New Urbanist movement including pushing for regional approaches, figuring out how to attract office development to new urbanist communities and how to better challenge the existing road framework created by traffic engineers. He called regions "meta-communities" and sees ULI as a major force in pushing regionalism. Calthorpe admitted that new urbanist communities haven't been successful in attracting office development to create true mixed use communities. Isolated suburban new urbanist communities can't be true to the movement's principles. Solving the regionalism problem is a tough nut to crack but why can't new urbanist communities attract office development?

16th Street--Yea or Nay?

Does the 16th Street Mall in Downtown Denver work?

In the 1970s and 1980s, a number of American cities, in response to competition from suburban shopping malls, took cars off of their Main Streets and replaced them with pedestrian malls or transit malls--the public infrastructure equivalent of "If you can't beat 'em, join 'em."

According to the Downtown Denver Partnership, the 16th Street Mall was completed in 1982 after two years of construction.

Most downtown pedestrian/transit malls were adjudged in the 1990s and 2000s to be failures.  City after city (Chicago's State Street, Raleigh, Memphis, Kalamazoo) has "de-malled" and reintroduced cars to former malls.  Other cities (Buffalo, Fresno, Las Cruces) are looking at doing the same.

A few pedestrian/transit malls are noted success stories:  Third Street Promenade in Santa Monica; Church Street Marketplace in Burlington, Vermont; Lincoln Road in Miami Beach; Downtown Charlottesville, Virginia; to name a few.

My experience, admitted non-scientific, is that downtown pedestrian/transit malls seem to work best if they're:

1. Relatively short

2. Relatively narrow

3. In a good climate

4. In a college or tourist town.

The 16th Street Mall is some, but not all, of the above.

What the 16th Street Mall does have, though, is:

1. Extremely frequent transit (seemingly every 2-3 minutes), with buses well designed to make it easy to get on and off.  The building of more light rail and commuter rail means that, in the future, the mall buses will become even more a part of an integrated public transit system.

2. A very high level of maintenance services, provided by the Downtown Denver Business Improvement District, an affiliate of the Partnership.  (ULI's book on BIDs is available at the ULI bookstore.)

3. A very high level of marketing and promotional services, honchoed by the same BID.

The Denver Metro Convention and Visitors Bureau trumpets that the 16th Street Mall is the Number One tourism destination in the metro area.

Nevertheless, the lack of cars on 16th Street did make it seem a little, shall we say, lonely walking back to the Adam's Mark Hotel from the District Council dinner last night.  Of course it was a snowy, Tuesday night in mid-October.

What do you think?

Regionalism: Hope or Hype?

In the September issue of Urban Land, we devote no small amount of attention to the many forms of regional cooperation in the Denver metro area. The efforts of regional coalitions thus far have been impressive, with the near completion of the T-REX light rail expansion, the voter approval of the ambitious (and badly needed) FasTracks rail network, and the signing of the Mile High Compact. But is this regionalism a model for communities seeking ways to accommodate growth or an anomaly caused by the frontier spirit mixing with the thinner air? Let us know what you think in the comments section of this post.

Neighborhood Upturn or Upheaval?

Last week, ULI members discussed how to manage gentrification so that it benefits neighborhood residents of all incomes. The economic impact of revitalization, they said, often masks the unraveling of neighborhood roots as longtime residents and businsses are pushed out by affluent new residents and upscale retailers.