Harvard Business Review Eschews Sprawl

"To put it simply, the suburbs have lost their sheen," writes Ania Wieckowski in the May edition of Harvard Business Review." Her article, Back to the City, suggests that "(some) companies are getting a jump on a major cultural and demographic shift away from suburban sprawl. The change is imminent, and businesses that don’t understand and plan for it may suffer in the long run."

"The change is about more than evolving tastes; it’s at least partly a reaction to real problems created by suburbs. Their damage to quality of life is well chronicled. For instance, studies in 2003 by the American Journal of Public Health and the American Journal of Health Promotion linked sprawl to rising obesity rates. (By contrast, new research in Preventive Medicine demonstrates, people living in more urban communities reap health benefits because they tend to walk more.) Car culture hurts mental health as well. Research by behavioral economist Daniel Kahneman and his team shows that out of a number of daily activities, commuting has the most negative effect on people’s moods. And economists Bruno S. Frey and Alois Stutzer have found that commuters who live an hour away from work would need to earn 40% more money than they currently do to be as satisfied with their lives as noncommuters.

A recent report sponsored by Bank of America, the Greenbelt Alliance, and the Low Income Housing Fund examines the inefficiencies of the current “geographical mismatch between workers and jobs.” Focusing on California, it says that sprawl “reduc[es] the quality of life,” “increase[s] the attractiveness of neighboring states,” and yields “higher direct business costs and taxes to offset the side-effects of sprawl”—which include transportation, health care, and environmental costs."

The article also quotes Carol Colleta, the Executive Director with CEOs for Cities that “increasingly CEOs understand that without a vibrant central city, their region becomes less competitive. Good CEOs care about the fate of their cities, because they have to question whether that is the place where they can attract the talent they need.”

Slowly but surely the pieces are all being tied together by many formerly disparate interests that suburbia isn't as healthy or sustainable as it was once promoted. Suburbs have their place, for sure, but not to the exclusion of the rest of our developed and undeveloped areas. Natures dislikes a monoculture and the single-minded focus on suburbia as the exclusive panacea to our society's ills is thankfully being unraveled.

Can we re-charter our US cities for success?

My company’s headquarters is located in downtown St. Louis. As an urban planner in the new south, my frequent trips to our mothership have granted me the opportunity to explore much of the urbanism, both good and bad, that this region has to offer. And let me say, St. Louis have some absolutely extraordinary urbanism. From historic walkable neighborhoods rich in architectural character to vibrant business districts to its rich cultural amenities, St. Louis provides its residents with the potential for a very high quality of life.

For the outsider, most think that St. Louis, at least the city of St. Louis, extends from the Mississippi River to the Missouri River. And with the airport (as a city facility) located not too far from the Missouri River, this is arguably correct. But in reality, the city itself ends as a corporate entity at the western boundary of the 1200 acre Forest Park. Beyond that lies dozens upon dozens of incorporated jurisdictions including large swaths of unincorporated St. Louis County. I suspect that in years past they simply denoted that area as “beyond this there be dragons.” Today, the population of St. Louis County is nearly three times that of the city but is spread across 91 incorporated jurisdictions.

With a few notable exceptions such as Webster Groves, Kirkwood, University City and Clayton, many of these cities are little more than incorporated neighborhoods with some comprised of just a few streets and houses. Fourteen of these “cities” have less than 500 people with the smallest one (Champ) clocking in with 12 residents.

The result of this “pandemic of place” is evident. Complex taxing structures, municipal inefficiencies, fractured decision-making, and hyper-competitive tax base stealing runs rampant across the area. Some have adapted to these growing costs by creating strategic alliances with neighboring “cities” to contract for services and reduce operating overhead but most are hamstrung by soaring costs (and expectations) and declining revenues.

The question I ask myself every time I visit, which has been more than 50 times over the past decade, is whether a city/county with such great urbanism, can ever be truly competitive in the new economy. And unfortunately, I have yet to come up with a positive answer. This answer has nothing to do with its physical structure which is in many ways far superior to a Charlotte or a Phoenix. Rather, what holds it back from truly being competitive on the national or global scale again is the political structure. By my estimate, the regional probably contributes nearly as many politicians per square mile as Washington, DC. (Assuming a minimum of 5 elected officials per city times 91 cities and the County Council equals 450 plus the City of St. Louis’ 29 alderman and one Mayor for a grand total of 490 elected officials – perhaps someone from the local municipal league can provide a more accurate number). Regardless, even if the number is half of that, it’s still too many to provide a truly competitive region with appropriate representative leadership and effective decision making.

This issue resonated with me on my last trip to St. Louis as I read the current issue of Harvard Business Review. One of the lead stories was a listing of breakthrough ideas for 2010 and coincidentally one of the issues addressed governance and political structures for competitive cities.

Entitled “Creating More Hong Kongs,” Paul Romer, the senior fellow at the Stanford Institute for Economic Policy Research suggests that charter cities can help to change the rules for struggling economies. Focused particularly on the emerging third world, the suggestion was that if a Cuba or an India created a new port city with open-market rules more like Hong Kong than like North Korea, it could help to give a boost to that nation’s overall economy much like Hong Kong’s free-market tendencies have done for the rest of China.

So as I sat there and reflected on the thesis, I realized that the opportunity for a truly new city and not just an extension of an existing urban area, while possible in a place like Dubai or Mumbai with rapidly growing populations, is not likely to produce an overwhelming number of new entrants for the first world which desperately needs a means to reinvent itself to better compete on the global scale. Rather, I wondered if this idea of a charter city could extend to the re-invention of an existing city or urban area. How many communities across the United States are plagued by byzantine bureaucracies that are so ingrained that decision making is more like an Olympic sport than a deliberative, predictable exercise? How many places have tried strategic reform when a more generalized carpet bombing was necessary?

St. Louis certainly isn’t alone in this, though the sheer breadth of decision makers poses a unique challenge. In other areas of the country, particularly the northeast, the levels of government offer a similar conundrum. Just how many county, township, town, and village governments are necessary to manage the exact same populations that are in fact shrinking, not growing. And even if they are growing, is this still the right approach?

Is there leadership, particularly at the state level to impose such a change on areas that are clearly dysfunctional? Cities and counties are, after all, creatures of the state and can be created and dissolved in a single act. And what are the catalyzing events that make such a radical change possible? Does the area have to be so decrepit or abandoned, like parts of Detroit or Buffalo (with apologies to the great areas of both) to bring about this type of change? Even San Francisco, with its beautiful urbanism, is considered by many to be governed by a structure that is one of the most bloated and ineffectual in the country.

All of this brings to me a clear focus that in order for cities to thrive in the new economy they must be much more than beautiful, functional, urban places. They must be well governed, from the individual neighborhoods to the Mayor’s office, without being onerous and contradictory to the future vision. Part of this is a discussion on development codes, but it really speaks more to the daily policies of service delivery and business support that a city is best able to provide.

So, is there hope for the St. Louis and it’s hundreds of tiny body politics to be positioned for the future? Can they effectively set aside their individual tax base needs to compete in the global economy? The current economics of St. Louis appear more like a shell game, simply moving tax base around, often in the form of new retail centers that bleed off the adjacent jurisdiction. And often, these “projects” have been at the expense of population, forcing whole neighborhoods to move in order for “progress” to occur. And to be fair, they are all doing it. To point fingers would be futile because you would be spinning in circles. And with declining population, most economists will tell you that no new revenue is being created - it is simply being moved around from one shiny new big box to the next. And we also come to understand that the St. Louis region is really on the precipice of becoming a shrinking city, a place where population growth is inversely related to land consumption.

How would things be different if St. Louis County were comprised of say, eight to ten cities rather than the current 90 plus? And what if one of those new cities were a charter city with a radically different structure that had previously been imagined before? Because to consolidate and yet to continue the same business as usual is more than a missed opportunity for incremental progress. It might just be a missed opportunity for truly global competitiveness that restores St. Louis to the prominence of centuries past and ensures that we aren't having the same conversation about St. Louis or Memphis or Charlotte in fifty years that we are having about places like Detroit and Buffalo today.

Are Sustainable Suburbs Possible - Yes, But It Depends on Your Definition

This blog has often railed against suburbia in favor of more urban arrangements of our communities. And while there are a growing legion of those who support this position, there are still a number of individuals who, for many and varied reasons believe that the suburbs are superior and that cities are the antithesis of their dreams. What I have come to understand is that there is a broad spectrum of opinions, experiences, and understandings when it comes to creating great communities.

The truth, as always, lies not in the margins of the conversation, but at its core. When it comes to community-building the core of the debate lies often in our definition of terms. And fundamentally it is the fact that "urban" does not universally describe only place like Manhattan or inside the loop of Chicago. In like manner, suburban does not always mean a ranch house on 1/2 acre lot with nothing around for miles to walk to. And the solution to our current unhealthy pattern of development is not for everyone to live in a apartment above a store in the downtown. In fact, our small towns can have urban centers and our cities can have suburban neighborhoods.

The term "urban" simply refers to being in a city. A city can be New York with the tall skyscrapers of Manhattan and the 2 and 3 story neighborhoods of Brooklyn or it can be a town like Davidson, NC with its simple Main Street, college campus, and surrounding neighborhoods. The notion is scaleable but it shares common characteristics. Mixed-use centers with civic spaces surrounded by walkable neighborhoods (that contains parks and playgrounds) and connected by multi-modal transportation corridors. Depending on what part of a great community you are in, this scale could transition block by block or be more elongated. This concept is best illustrated by the transect diagram made famous by Andres Duany and Elizabeth Plater Zyberk.

Within the context of the metropolitan area, Davidson, is in fact, suburban. The same can be said of Brooklyn. Neither can be truly sustainable community without access to a larger region of jobs. Like Lake Forest, IL (a classic walkable, mixed-use community to the north of Chicago) Davidson will hopefully be soon linked to the largest job center in the region - downtown Charlotte - via a commuter train. Yet there will still be those who must commute by car to jobs that are outside the core. But even within the city of Charlotte, a majority of the jobs are currently inaccessible except by car - a fact that is changing with a rapidly emerging transit, bicycle, and pedestrian network. But once you arrive into either community - Davidson or Brooklyn - you have an immediate sense of its urbanism within its context.

By contrast, suburbia offers no such civic amenities neither within its borders nor in its connections to the outside world. 100% of the embodied value of most suburbs today lies behind the front door. They lack any urban amenities - civic spaces and buildings, multi-modal corridors, walkable, mixed-use activity centers, etc.

Most of us who espouse the ideas of smart growth, sustainable communities, and new urbanism (all of which largely share the same set of core principles - making them different flag over the same nation, so to speak) are not anti-growth, anti-car, anti-freedom of choice, raging socialists (or communists, or humanists, or pagans for that matter). Sure, there are folks out there who are in fact opposed to cars and think that we should all live in high-rise apartments under the direction of a strong central government, but they are some of the individuals that I mentioned are in the margins and do not represent the core. In fact, most new urbanist (and old urbanist) planners and designers have helped to create places that are diverse, well-connected, and mixed-use with little government intervention and free-market financing. In Charlotte, NC this includes first ring suburbs of Myers Park and Dilworth (the image below) and newer neighborhoods and centers like Birkdale Village and the Village of Baxter. In St. Louis, this includes most every older neighborhood in the City and newer neighborhoods like the New Town at St. Charles.

Does living in one of these places mean that you no longer need a car and that you can live a carbon-free lifestyle (if that is your desire)? Perhaps, but it's your choice. These places give people choices. They are filled with car drivers and bus riders, families with children and single-person households, avid gardeners and lawn mowers, efficiency apartments and detached houses with yards, driveways and alleys, trees and pavers, Democrats and Republicans, Priuses and Ford F-150 Trucks.

The debate about the future of our communities and our future quality of life should be centered around our ability to make choices not our subjugation to a one-size-fit-all approach of modern suburban development. This includes choices for the developers who are the ones who create most of what is built as well as the tenants in the office buildings and the homebuyers who will be the daily users of that community. Great cities can have vibrant, walkable, and mixed-use suburbs that are connected by multi-modal transportation networks.

To paraphrase Vince Graham, a new urbanist land developer, most suburbs simply sell privacy and exclusivity, making each incremental addition a degradation of the original promise. Cities, and by extension all urban places (towns and villages included), add value to the greater community with each new home, civic space, street, or neighborhood center. Value is shared in the sense that all boats rise with good urbanism.

To close, as we look forward to a new year, let it be one in which communities across the country make development decisions that provide the greatest return not only for the residents of today but for our children, our grandchildren, and future generations.

Housing After the Fall: What Will Be the New Market?

The October 2009 edition of Urban Land magazine, the official publication of the Urban Land Institute included an article by John McIlwain entitled, "Dialogue Housing - After the Fall: What Will Be the New Market?" In it, McIlwain opines on the future of housing in our communities. Among the many interesting observations he notes that the trend towards more urban living is likely to continue and that this trend is fueled by a convergence of demographics, housing production, and an analysis of historical trends:

"Will this urban shift continue once the housing market rebounds? This depends in part on whether people believe that the price of gasoline will stay at or below $2 a gallon or whether it will rise back to $4 a gallon or more. The more sensitive people are to the price of gasoline, the more they will pay to live in closer, more urbanized locations. Keep in mind, too, that studies of past crises suggest that trends emerging prior to the event were not changed afterward, but rather accelerated.

...there is growing demand for new homes and apartments, demand that is constrained by unemployment, cost, income, and tight credit. Demand for more urbanized living is growing, too. The paradox is that urban housing is more expensive and takes longer to build than homes on undeveloped greenfields due to the lack of available sites, tougher building codes, and intense resistance to development in existing neighborhoods. Will local governments ease the process of development and expand opportunities for infill development? Will the industry produce sufficient housing in urban and suburban infill markets to meet the pent-up demand and keep prices within reach of today’s price-constrained echo boomers? Or will this generation chose to—or have to—either rent in the central city and suburban town centers or buy their first home on the outer edges as generations before have done?"

The full text of the article is below:

Now that green shoots are beginning to appear in the economy—even the housing market appears as if it may be at or nearing the bottom of its fall—it is a good time to look at what the housing market may become as it rebounds over the next few years. What will sell—and where will the strong markets be?

The first factor he noted to consider is demographics:

• The U.S. population is growing at a rate of 2.5 million to 3 million people a year. The average U.S. household comprises 2.6 persons—and is shrinking, which suggests the nation needs some 1.2 million new homes per year, plus additional homes to replace those lost to decay, fire, and the like.
• The actual number of new homes needed is probably higher since the top half of the echo boomers—those born between 1980 and 1994, and the largest demographic tranchein U.S. history—have now reached their mid- to late 20s, the prime age for forming new households. An analysis conducted earlier this year by Fannie Mae based on data from the Harvard Joint Center for Housing Studies predicts there will be 14.6 million net new households formed in the United States between 2005 and 2015, an average of 1.46 million a year.

Compare this with the current rate of housing production:

• In 2008, only 485,000 new homes were sold, and at year-end there was an unsold inventory of 353,000, for a total of 838,000 new homes. Add to that the 275,752 new rental units started and the total production of new units was around 1.1 million, a shortfall of 350,000 units needed just to meet new household formation.
• At present, new housing production is trending around 500,000 per year—again, well below the rate needed to meet new household formation.

Thus, the potential demand for rental and for-sale housing is high and growing, but is constrained by rising unemployment, tight credit, and uncertainty about housing prices. Indeed, first-time homebuyers will continue to find buying their first place challenging for years to come—especially if the first-time homebuyer credit is not extended beyond November 30—and the expectation is that they will rent for longer than past generations had, either by choice or necessity.

To help this large group buy a home, homebuilders will need to offer starter homes at low prices, meaning smaller, simpler homes on smaller lots. This is easier said than done, of course, except in the outer suburbs, where home prices have fallen mostly due to high foreclosure rates. That said, it is too soon to know whether these outer neighborhoods will again attract large numbers of people who want to buy and live in them.

Therefore, it is an open question whether the rapid housing development on the outer edges of metropolitan regions witnessed over the past six decades will continue. Planners and pundits have been arguing about this for years, but there are emerging trends to watch closely.

A recent U.S. Environmental Protection Agency study titled “Residential Construction Trends in America’s Metropolitan Regions” shows that there has been a striking move back to the urban core in many markets. In other markets, this reurbanization is small but growing; elsewhere it has been negligible. The study looked at the 50 largest metropolitan regions in the United States from 1990 to 2007 and concluded that “. . . in roughly half of the metropolitan areas examined, urban core communities dramatically increased their share of new residential building permits.” For example:

• In 15 regions, the central city more than doubled its share of permits.
• In the early 1990s, New York City issued 15 percent of the residential building permits in the region. Over the past six years, it has averaged 44 percent.
• Chicago saw its share of regional permits rise from 7 to 23 percent over the same period. Portland, Oregon, went from 9 to 22 percent. Atlanta went from 4 to 13 percent.
• The increase has been particularly dramatic over the past five years.
• Data from 2007 show the shift inward continuing in the wake of the real estate market downturn.

The report concludes that this acceleration of residential construction in urban neighborhoods reflects a fundamental shift in the real estate market. In fact, if core urban suburbs are included—i.e., those closest to the central city—more than one-half of all residential permits in New York, Chicago, and Los Angeles were in the urban core in 2007. There were, of course, those urban areas where little or no shift occurred, among them cities like Cleveland, Cincinnati, and Dallas.

Will this urban shift continue once the housing market rebounds? This depends in part on whether people believe that the price of gasoline will stay at or below $2 a gallon or whether it will rise back to $4 a gallon or more. The more sensitive people are to the price of gasoline, the more they will pay to live in closer, more urbanized locations. Keep in mind, too, that studies of past crises suggest that trends emerging prior to the event were not changed afterward, but rather accelerated.

Today, the weakest housing markets are in the outer suburban edges, where declines in housing prices have been most dramatic. Urban markets by and large have been stronger; home prices have held up better, and foreclosure rates have been lower except in certain lower-income but previously gentrifying neighborhoods.

Over the past years, baby boomers have shown increasing interest in urban living as they age. They are finished with moving to the suburbs, and are moving to the city or the sun when they look for their next home. While the jury is still out on the echo boomers, anecdotal evidence suggests they are a more urban, environmentally sensitive generation. However, it won’t be known if they will shy away from the outer suburbs until they have school-age children.

In short, there is growing demand for new homes and apartments, demand that is constrained by unemployment, cost, income, and tight credit. Demand for more urbanized living is growing, too. The paradox is that urban housing is more expensive and takes longer to build than homes on undeveloped greenfields due to the lack of available sites, tougher building codes, and intense resistance to development in existing neighborhoods. Will local governments ease the process of development and expand opportunities for infill development? Will the industry produce sufficient housing in urban and suburban infill markets to meet the pent-up demand and keep prices within reach of today’s price-constrained echo boomers? Or will this generation chose to—or have to—either rent in the central city and suburban town centers or buy their first home on the outer edges as generations before have done?

John McIlwain is a senior resident fellow at ULI and the ULI/J. Ronald Terwilliger Chair for Housing.

Can We Change the Climate, Really?

In 2007, we proudly declared that the environmentalism movement had achieved its opus. They convinced a worldwide audience that the human activities of the past one hundred years had in fact contributed to a change in the global climate. Companies began falling all over themselves declaring that they were green. Sustainability had achieved buzzword status and now pervades most every discussion about growth and development.

Then our house of cards fell down. If we marked 2007 as the year that we all went green, perhaps 2008 will be best remembered as the year we all went red. Now, with the recession still looming large, 2009 might be the year that environmental sustainability gave way to economic survival. Or will it? Congress is busy preparing a massive climate protection bill whose centerpiece is a complex cap and trade program that, according to recent reports might be managed by Wall Street. “Cap and trade” is a theoretical model of buying and selling pollution credits as a means to lower our overall carbon usage. In addition, it seeks to regulate our carbon emissions through a variety of controls, incentives, and investments. Is this just a gizmo-green, trillion-dollar boondoggle? And does it really matter?

Perhaps not. The truth is that our climate is always changing. Global warming is not a new phenomenon. In fact, we have been in a warming trend since we emerged from what scientists refer to as the “little ice age” in the 1850’s. That doesn’t mean to suggest that there isn’t in fact an anthropological (human-induced) acceleration of climate change occurring. On the contrary. There is in fact substantial consensus that our carbon-based economy is having some real adverse impacts on local and global climates.

Enter the resilient city. According to the Center for Resilient Cities, city resilience is “the ability of an urban area to effectively operate and provide services under conditions of distress.” The term sustainability suggests that organizations can operate in such a manner that they have a minimal long-term effect on the environment. Resilience, on the other hand, seems to take on a more pragmatic tone, whether intentionally or not. If sustainability is depicted with a Toyota Prius driving through a meadow in full bloom, resilience might be more akin to a fire fighter containing a fire from spreading down the block. And, in many ways city resilience is the opposite of city reliance, an unwritten protocol which has enabled far too many local governments to perpetuate inefficient urban services and unsustainable infrastructure with a combination of new growth at the fringes and state and federal grants to subsidize it. And this cycle of co-dependency is being perpetuated with the American Recovery and Reinvestment Tax Act of 2009 (ARRTA) whose greatest offering to our American cities is an expanded use of debt for infrastructure investments.

Resilient cities must be better than this. No more widened interstate highways and industrial parks in the name of economic development. Instead, resilient cities must build innovative new schools in walkable, urban neighborhoods; construct parks and greenways to foster a healthier (less obese) population; create a multi-modal transportation system that gives residents a true choice with high quality bus and rail service, bicycle networks, and sidewalks everywhere; and finally, and perhaps most importantly, they must implement strategies that ensure a broad level of housing opportunities are within close proximity to the previously mentioned amenities. Cities must also innovate with localized production and management of energy and other utilities, and they must radically re-think how they deliver efficient and essential urban services.

If we can crack this nut, and figure out a way to keep our nation’s cities growing, vibrant, affordable and attractive, perhaps we can attack our climate issues at the core. Only then can we convince people to pass up that cheap house in the suburb and live more compactly and more efficiently. And only then can we really lower our greenhouse gas emissions and affect climate change, if we can do anything about that at all. If we can’t, our cities will be better able to adapt to whatever climate-related impact might befall us. Either way, cities win. And if cities win, we all win.

How will the next 50 years be different?

Interesting question. Perhaps the bigger question is why the next 50 years must be different. To do so we must have an understanding of the failure of our built (and natural) environment since the end of World War II. I don't need to rehash the well documented impacts that the explosion of suburbia has had on the global economy. To find the best resource on that, check out Suburban Nation, by Andres Duany, Lizz Plater-Zyberk, and Jeff Speck. More importantly, just open the paper.

The most tenuous parts of our economy were based on the suburbs. The auto-industry failed because it over-leveraged itself into gas-guzzling sport utility vehicles sold to people with average commuted in excess of 20 miles each way. Foreclosures are highest in the suburbs because families "drove until they qualified" for a large house or builders/developers constructed subdivisions for whole populations that never arrived (I'll need to cover that more in the myth of popular demographics). Banks and large financial institutions failed because they either bundled highly leveraged mortgages for those people who couldn't afford the home in the first place (mortgage backed securities) and then insured their profitability as credit default swaps. And then someone tugged at the loose string of our economic sweater and it all unraveled.

Perhaps if there is one lesson that we have learned it's that the suburbs are predicated upon an often untenable dream - one that is mired in debt, future costs, monthly payments and IOUs. And I'm not just referring to the average household. And this debt is not always in the form or a financial instrument. Often times our built environment is built on premise that a future generation will pay for what we purchased. Drained wetlands, drought-starved rivers, lost farmlands, dependence on foreign oil (if we still use oil in 50 years) - these are the costs that future generations will be saddled with if we don't continue to change our fundamental approach to growth.

Smart growth, new urbanism, compact communities, sustainable cities - these are all buzzwords that boil down to the need to think strategically and systemically. Yes, growth is indeed good. And to borrow as phrase from Charlotte, NC Mayor Pat McCrory - "if you are not growing (as a city), you are dying." This site is therefore intended to explore the ways in which our communities can grow more sustainably - economically, environmentally, and socially - into the next 50 years. We'll find some lessons and best practices in the past and the present but mostly we'll be inventing a new wheel, a new way of growing our cities and towns. As a city planning practitioner, I'm excited about the possibilities. The moonshot of our generation will not be the compact, florescent light bulb. I believe it will be the compact, efficient community that's paid for by this generation and left to the next as a debt-free inheritance.