Joe Urban | Sam Newberg, Urbanist

Arrested Urban Development

Dateline: 6:18 am July 9, 2012 Filed under:

There certainly has been a lot in the media lately about demand for urban living. Everywhere you look there is a study indicating cities are in demand and suburbs are on the outs. It may already be happening – according to the Brookings Institution, cities are “thriving” and suburbs are “sputtering.”. Long range demographic analysis shows that demand increasing. So if the long range forecasts are true and the American Community Survey (ACS) results are more than just a blip, then urbanists like you and I should be giddy. So why am I so gloomy?

Articles in the Minneapolis Star Tribune in July offer a glimpse in to the problem, where an urban infill project hit a “snag” while suburban projects are reviving. The infill project in question, a proposed mixed-use development that would contain 500 mixed-income housing units for a variety of ages, is located immediately adjacent to the Lake Street light rail station and is perhaps the best transit-orented development opportunity in the upper midwest. After three years of planning and neighborhood buy-in (not an easy thing), the project was effectively scuttled by the Minneapolis Public Schools, the owner of the site, which did an about face by deciding not to sell its vastly underutilized site. What is so galling is next to that article (yes, I still read the print edition of newspapers) was the piece describing how suburban Eden Prairie’s housing market is recovering as evidenced by all 23 housing permits issued so far in 2012 (somehow, the Star Tribune managed to conclude that 23 permits is more than last year’s 32, so you choose – poor reporting or wishful thinking).

The suburban article indicates the 52-unit Eden Prairie Woods development is the final piece of a larger project that has been going since 2001, so there is momentum. In other words, the land was already owned by the developer and already entitled by the city. The developer indicates they have an “interest list” of 100 people, so you could reasonably expect that perhaps a handful of homes will indeed be built this year. It was only a matter of time before these homes got built.

Contrast this to the TOD site in Minneapolis, where you could probably lease all 500 units within a year, given half of them were affordable, a quarter were senior and a quarter were market rate. This site is simply in an excellent location for housing and commercial development, not to mention a permanent home on a new public plaza for an existing popular farmers market.

What is troubling is how these events can be applied nationwide. If we take changing demographics (the huge increase in single-person households, for starters) and changing desires for housing as fact, then the question has to be raised do we have anywhere near the resources or tools to accommodate this demand? If our recent experience here in the Twin Cities is any indication, then the answer is a resounding no.

Let’s take A. C. Nelson’s forecast that there already exists a sufficient supply of large lot single family homes to satisfy demand for that type of housing over the next 20 years! Think about it – there is no need to add any more suburban homes. Of course, that doesn’t mean people necessarily want the houses that already exist. Therefore in many cases, an older suburban home could be torn down and replaced by a new one on the site – but still, no net gain. Other new homes will be built essentially at the cost of existing ones elsewhere in the market. Those existing homes will either become rental homes (as is already the case in many places) while others will languish, vacant and uncared for – this is already occurring in many suburbs around the country. And still others will be lived in and proudly kept up even if they are not the first choice of location or type of residence.

Of course, in cities themselves there is an apartment boom going on that, according to ULI, “has legs.” Yet we all know there is only so much demand for luxury apartments. The real demand will come from moderate-rate and affordable apartments. There is also significant opportunity to develop housing for seniors (though not necessarily “senior housing” as we currently think about it). Furthermore, not all urban markets are attractive, as many of our poorer urban neighborhoods continue to empty out.

But in many ways the two examples in the Twin Cities are a microcosm of current and future housing demand. Sure, there is a sliver of demand for high-end suburban homes and the developer is ready and waiting – the wheels are greased. But there is real and genuine demand for a variety of housing types in a transit-rich and urban location. How deep that market is we may never know, and that is why I’m gloomy. We may not be able to say “time will tell” about all of these forecasts for demand for urban housing, and the Brookings reports cannot speculate at what could have been if the best laid infill plans never get built.

I understand infill is more difficult to develop, plan, finance, clean-up, acquire, etc. Before you dismiss the Brookings findings as a mere blip, understand and accept that demand for urban living is higher than ever, and there must be a much more concerted effort to make it happen. Otherwise we’ll just forge on in a state of arrested urban development.

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