The Ground Floor

Moving Beyond 'Drive until you Qualify'

In a joint effort by the Chicago-based Center for Neighborhood Technology (CNT) and Washington, D.C.-based the Brookings Institute, an interactive mapping web tool -- the Housing + Transportation Affordability Index -- was developed to measure the true affordability of housing by applying transportation costs.

The tool provides housing and transportation costs as a percentage of income on a neighborhood-level basis for 52 metropolitan areas using 2000 U.S. Census data and analysis of household transportation costs.

Urban planners, policy-makers, and transportation and housing advocates measure housing affordability as 30 percent or less of household income. However, housing affordability is not always what it seems.

As Scott Bernstein, president for CNT explained during a presentation today at the Brookings Institute, the old adage of "drive until you qualify" is really no longer an appropriate measure of housing affordability. As gas prices increase along with suburban sprawl, much of the population is paying as much for transportation as they are housing.

Collateral Damage: Squeezing Out Affordable Housing

While everyone's attention is focused on market gyrations, credit squeezes and the housing melt down, not to mention the latest sex scandal and—remember—the endless Democratic Presidential campaign, the affordable housing industry is being quietly closed down.  Look at what has happened:

• Low income housing tax credits—the price for these credits has fallen in the past few months from over $1 per dollar of credit to 80 to 82 cents to the dollar—a 20% decline that is making new deals unworkable.  The main reason for this meltdown is what has happened to Fannie Mae and Freddie Mac; their accounting scandals resulting in the new restrictions on their mortgage purchases as well as the decline in housing prices and the mortgage-backed securities markets all have combined to reduce or eliminate their profits.  Thus the biggest market maker for the tax credits, Fannie Mae, has reduced its purchases of credits from over $2 billion in 2006 to $1.1 billion in 2007 and is now reportedly a net seller of credits.  Freddie Mac has also reduced its purchases as well.  The major banks that were also buyers are now struggling with loses and don't need or want credits.  While the new pricing makes credits attractive investments to the corporations that used be in the market for credits, it will take months or years to get them back in as active buyers.

Compact Communities - Is Density Incompatible With Safety?

Reducing the carbon footprint of metropolitan areas will require making them more compact in order to reduce driving or vehicle miles traveled (VMTs). Forgive me for saying this (density being a four letter word) but this will require increasing the density of existing communities and building new ones with appropriate density. 

So what are the best ways to design compact, densely populated, walkable communities which are attractive, safe and lively? One thing clearly needed is enough housing so people live in the community; this is what creates the "24/7" communities which have been shown to be most successful over time. What are the best ways to do this while reducing crime and enhancing public safety?

The Urban Health Advantage

A recent article in New York magazine by Clive Thompson called "Why New Yorkers Last Longer" pulls together some intriguing facts that anyone interested in walkable, mixed use, mixed income communities should consider. The article, as the title suggests, explores why the "average life expectancy" of New Yorkers has grown faster than that of the U.S. as a whole, especially in since 1990. Now it is 78.6, while the national average is 77.9; as recently as 1990, the average life expectancy of a New Yorker was three years shorter than the national average.

Certain factors may be unique to New York, such as the drop in the crime rate (New York is now the safest city in the U.S.) and new drugs that have extended the life of AIDS patients. But other factors are more generic to all urbanized areas.

Here are some excerpts:

Newark Redux?

The 21st century is the Century of Urbanization, and cities across the U.S. are gaining population and economic vitality. But will this new life come to all cities in the U.S.? Maybe not, but take a look at Newark, N.J., historically one of the poorest, toughest, most corrupt and crime ridden cities in the country.

Talk of a comeback for Newark is not new, to be sure. In fact it's part of every mayoral campaign and has yet to take hold. That said, there is no reason why Newark should not become a thriving satellite of New York City if several previously intractable challenges can be met -- and a couple of them look like they are on the way to being resolved, namely crime and corruption.

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.

Context is Everything

How a building relates to its surroundings and neighbors is crucial for the creation of an active streetscape and to foster a sense of community. West River Commons, a small (one-acre) mixed-use project in the Longfellow neighborhood of Minneapolis, Minnesota, is an excellent example of context-sensitive design.

Like many pre-WWII inner suburban neighborhoods, the Longfellow neighborhood comprises single-family homes sited on a dense and walkable street grid. Also like many neighborhoods from this time period, the scale and walkability of the area has been comprised by fast moving traffic on arterial streets lined with one-story commercial strip centers.

West River Commons fronts one of these arterials, Lake Street. Its 53 apartments, three townhouses, dry cleaning shop, two restaurants and one cafe are designed in such a way to provide a transition from the activity and traffic on Lake Street to the more quiet residential feel just a block away. The focal point of the project is a small park which provides outdoor setting for the restaurants and serves as an informal community gathering point.

A complete case study of this project can be found on ULI's Development Case Studies Web site. (If you are not already subscribed to the Development Case Studies, you can subscribe here.)

Why So Slow in New Orleans?

ULI Senior Resident Fellow for Urban Development, Tom Murphy, paid a visit to National Public Radio's Diane Rehm Show today to talk about the Institute's efforts in the recovery from Hurricane Katrina and why the pace of reconstruction is so slow. The conversation, which included Lousiana Recovery Authority board member Sean Reilly and Advancement Project Co-director Judith Browne-Dianis, was at times contentious, but covered many of the issues that have stymied and challenged those working to effect change on the ground. WAMU has posted an archive of the discussion on their Web site.

Having a Say in Redevelopment

This post was written by The Ground Floor contributor John McIlwain.

Yesterday, the New York State Public Authorities Control Board gave final approval to the Atlantic Yards redevelopment project in Brooklyn, NY. It's the largest development in New York City in years, with some 6,400 units of housing, half of which will be affordable, along with retail, offices, and a basketball stadium for the New Jersey Nets. That makes it one of the largest urban redevelopment projects in the U.S. as well. This was the final regulatory approval needed for the project to go ahead.

But, as with all big (and most small) redevelopments, it has been quite controversial and has picked up lawsuits along the way just as a summer picnic attracts bees.

One to watch is the classic takings case filed last October by Develop Don't Destroy Brooklyn. Playing the role of Suzette Kelo, the named plaintiff in the now infamous Kelo v. New London Supreme Court case that has stirred a hornets' nest of federal and state legislation opposing the use of eminent domain to take private property for economic development purposes is Daniel Goldstein, who owns a condo in a building that will have to be acquired by eminent domain for the full project to go forward. He may not be quite as sympathetic a plaintiff to the general public as a little white haired grandmother; he's a good looking young man with a penthouse condo with a fine view of Brooklyn; he's the last hold out in the building. He's raising the same constitutional issues the Supreme Court rejected over a year ago, apparently in the hope that the new Bush appointees will reverse Kelo. And in the meantime, he and his fellow plaintiffs hope to hold up a major, much needed redevelopment of downtown Brooklyn, a fight they lost in the political arena and have now taken to the courts.

Watch this kind of legal action continue to pop up around the country, adding to the already high cost of vital urban redevelopment. While no major project will ever please everyone, Atlantic Yards has been reviewed and revised for years now, and has support from a wide spectrum of the local community, including local activists such as ACORN. Where is the best place to determine how to redevelop a city -- community meetings, planning boards, and elected leaders; or, on the other hand, appointed judges? I vote for the community, their elected leaders and professional planners all working together.

Building Out Neotraditional Towns

Over the weekend, The New York Times ran an interesting article highlighting some of the build-out issues faced by developers of neotraditional town communities. Obviously, such places are "made" by a concentrated presence of people, but what happens when a shift in the market occurs, and lots are not populated as anticipated?

This has been the case in WaterColor and WaterSound, both St. Joe developments on Florida's panhandle, which, I was lucky enough to visit last September on ULI's Place Making Study Tour. In 2002, the company frequently had ten applicants for every lot, but since the 2005 hurricane season, demand has slowed. St. Joe has been forced to mitigate speculation activity by extending requirements that buyers break ground within three years of purchasing their lots.

If you are interested in learning more about this dynamic real estate market, ULI will offer a second Place Making study tour of Northwest Florida on January 22nd and 23rd. The trip will include customized tours of the neotraditional towns of Seaside, WaterColor, Rosemary Beach, and Alys Beach. More information on this tour here.

Here's to Dancing, not Puttering

In a recent interview in the Wall Street Journal (subscription required), Toll Brothers co-founder Robert Toll discussed the company's decision to add downtown condominium development to its product line, which for nearly 40 years has centered around suburban single-family home construction. "We are following our people," Mr. Toll, 65, says in the article. "We have been a builder to the baby boom since we began…We (baby boomers) want the sophistication and joy of culture and music that comes with city dwelling -- and doesn't come with sitting in a big home in the burbs watching the day go by while puttering, painting, reading, writing, making flies for fishing, customizing your own golf clubs, stringing your own tennis racket, tending your tropical fish."

To be sure, Toll Brothers entering the urban condo market says something about the changing lifestyles of America's largest adult age group and the changing shape of our cities. And, in addition to empty nesters, the downtown migration is also being fueled by Generation X, the generation between baby boomers and Generation Y, many of whom are delaying marriage and children in pursuit of careers. As a result, the urban revival of many cities is one that does not, for the most part, include households with children. Is this a sustainable course? Can our urban cores, over the long term, remain viable if families with children remain living on the fringes? Many industry analysts point to public school problems as the main factor keeping families out of downtowns. Are there other factors as well? What do you see happening in your area?

An Outside View On New Orleans

They came, they saw, they left -- and unfortunately, they left convinced that New Orleans has yet to set a steady course for recovery. The delegation participating in ULI's study tour of this city and other Gulf Coast communities came looking for investment and development potential in this hurricane-ravaged city. And while participants were impressed with the outpouring of volunteer work to help residents in the Crescent City rebuild their homes and their lives, they  clearly felt that the city's governing officials need to be providing far more guidance and far more leadership to get New Orleans out of intensive care.

Delegates were troubled by the haphazard shape of rebuilding -- a house here, a house there in various phases of redevelopment, surrounded by vacant lots, rubble, and empty houses. Equally troubling: no people and no housing means no retail, no neighborhood amenities.  Among the comments:

"You get the feeling that if you came back in a year, it would look pretty much the same."

"My concern is that New Orleans is 16 months into this, and the city has not made a lot of progress in getting cooperation between agencies. My question is,'Who is in charge?'"

"For anyone coming into the area, a big concern is having an exit strategy. That is the most wearing factor. You wonder how much the leadership here will be able to catalyze (sustainable development). You wonder how you are going to be able to keep operating and how you are going to get out. This is going to inhibit out-of-state investment."

Do you agree with these views? Give us your thoughts.

Reinforcing the Levees in New Orleans

Throughout last week’s ULI study tour to the Gulf Coast, the issue dominating many discussions on outside investment and development interest in New Orleans pertained to the status of the city’s levees. As delegates were reminded several times, the city was ravaged not by Katrina’s wind and rain, but by the collapse of the levee walls yielding to unprecedented pressure from the storm surge. 

On the final day of the tour, participants saw firsthand the improvements being made by the U.S.Army Corp of Engineers to guard against a repeat of the catastrophe. It is an impressive site -- a series of massive flood gates are being installed at strategic points along the canals to keep a storm surge from rushing up into the canals during future storms. In addition, new pumps are being built to pump water out of the canals and around the flood gates when they need to be closed. Before, no such gates existed, leaving the levees and surrounding properties vulnerable.

It is sufficient reinforcement, Army Corps representatives said, to protect against a future Katrina-size surge. In fact, Army Corps of Engineer representative Barry Fletcher, who works in the Corps’ New Orleans district office, told the group he is so confident in the system that he is planning to rebuild his own home in Lakeview, a destroyed neighborhood adjacent to a major levee breach. “I am absolutely planning to rebuild here. Others are coming back here. I am confident in what we are doing,” he said.

Do you see the levee reinforcement and improvement as the “deal or no deal” factor in rebuilding New Orleans neighborhoods?

New Orleans Revisited

The taxi driver who drove me from the New Orleans airport downtown summed up the status of this battered city quite well: "I used to live in an apartment right in the middle of everything," he said, "But it flooded, and now I pay more than twice as much to live 30 miles outside the city, and it takes me a whole lot longer to get into the city where I can make my living. And, there are not nearly as many people paying fares as there used to be."

Indeed, New Orleans is certainly not what it was prior to Hurricane Katrina. This week, a delegation of about 30 land use professionals, including developers, investors, architects and urban designers,  is participating in a ULI study tour of this city and other areas of the Gulf Coast to determine investment and development potential. The tour began with an overview from former ULI chairman and New Orleans resident Joseph Canizaro, who cautioned the group that they would be shocked at the devastation that still permeates much of the city outside the French Quarter and Garden District. He listed five key areas that the city must focus on to move its recovery forward: 1) reinforcing and strengthening the levees ("If we can't keep the water out, we should not rebuild;") 2) leadership to implement rebuilding plans; 3) workforce housing; 4) rebuilding infrastructure and building new infrastructure; and, 5) public school improvement.

"We need a lot of new (outside developers and investors) to help us...redevelop this city the way it should be redeveloped," he said. "There is work here for at least the next 10 years."

Later, on a bus tour that meandered through Center City to Gentilly to the Lower and Upper Ninth Ward to Treme it was clear that it will be take several years to revive this great American city. The water marks and spray painted messages ("one dog under house") are still visible on many of the houses, and there is debris piled up on corners and on sidewalks. In the Lower Ninth Ward, the most houses still standing are vacant. There is no retail serving many of the neighborhoods.

But there are a few encouraging signs of a revival -- the Musician's Village, built by Habitat for Humanity International, and the Providence Community Housing organization's work in the Treme neighborhood. These sparks of life underscore the resiliency and pride of New Orleans residents. As Providence Community Housing President Jim Kelly said, "Grace is what will bring this community back." He encouraged the group to join the redevelopment efforts, urging them to "Take risks where you would not normally take risks."

Next on the study tour: a ride east along the Gulf Coast, visiting several towns in Mississippi that are trying to reinvent themselves in the post-Katrina environment. Stay tuned.