Now that I’ve set the scene for Chris Leinberger’s presentation on the shift to walkable urbanism, let’s move on to the actual talk. I took notes during the presentation (on my iPhone—how 21st century is that?), and for this post I’ve basically taken those notes and expanded them, adding a few parenthetical comments along the way. If you see any inaccuracies or omissions please contact me and I’ll update the post to correct them.
First up was John DeWolf, the Howard Hughes executive responsible for the company’s properties in Columbia and other east coast locations. After a brief apology for the somewhat ineffective air conditioning (see my previous post), DeWolf noted (among other things) that according to Leinberger America was leaving the age of Leave It to Beaver and entering the age of Seinfeld.
Columbia Association president Phil Nelson, who was next up, echoed this theme, noting that only 8% of families in Washington DC were traditional nuclear families, and that while the median age in Columbia in its early days was 11 [with half the population not even yet in high school], it had now increased to 39. Nelson introduced Leinberger and briefly reviewed his biography, including his activities as a real estate developer. Then it was on with the show.
Leinberger began by paying homage to Jim Rouse and recalling earlier visits of his to Columbia and the Rouse Company (to kiss the ring, as he put it). He noted that Rouse had always been at the forefront of trends: one of the first developers to build regional malls, a pioneer in creating new master-planned communities (i.e., Columbia), a visionary with respect to the rebirth of cities (including the role of the festival markeplace, and (most important for this presentation) the first mainstream developer to understand walkable urbanism. [The subtext of the comments, which he later made more explicit: Jim Rouse moved on from the original vision of Columbia, and you should too.]
On to the main presentation: I didn’t quite catch the full title of the presentation, but one key phrase in the title was the structural shift to walkable urbanism, with the emphasis on structural. [In other words, he’s not talking about a passing fad that drives people to contemplate leaving suburbia behind, he sees a deep shift in the economy that’s affecting long-term real estate trends.] After a brief comment about Columbia having gone flatline over the last twenty years, he pulled back to the big picture: [At this point I’ll drop the Leinberger noted and just present his comments as I understood them.]
The built environment (office buildings, retail stores, residences, etc.) accounts for 35% of U.S. assets, and in the midst of the fall-out from the mortgage crisis we must re-engage with the built environment in order to spur economic growth. The built environment also directly (e.g., via building heating) and indirectly (e.g., via transportation from home to office to retail and back) accounts for almost three-quarters of greenhouse gas emissions, and thus changes to the built environment will be key to addressing climate change.
Transportation drives development, and not vice versa. (That’s why the typical state government has a department of transportation, and not a department of sewage.) A single mode of transportation, i.e., driving on roads, drives a single form of the built environment, i.e., drivable suburban. Multi-modal transportation (roads plus rail) drives walkable urbanism.
The built environment is a direct reflection of the underlying economy, and changes to that environment are driven by structural shifts in the economy. The agricultural economy of the 18th and 19th century gave rise to 40 acres and a mule the dream that the typical American aspired to. [Though Leinberger didn’t mention it, in political terms this translated into the vision of Thomas Jefferson of America as a nation of yeomen farmers, as opposed to Alexander Hamilton’s vision of American as an urban manufacturing nation. Hamilton’s vision ultimately became reality, but Jefferson’s vision still exerts a powerful hold over our imagination and our politics.]
Beginning in the late 19th century and reaching its peak after World War II, the industrial economy produced a second dream, that of the house in the suburbs. [If I recall correctly, at this point Leinberger played some illustrative clips from Back to the Future, in which the protagonist traveled back in time to 1955 and the building of the suburb in which he would be born,] According to Leinberger the pendulum is now swinging back to a mix of suburban environments and walkable urban environments.
The shift to drivable suburban environment was in large part in response to market demand, but government had its thumb on the scale, as public policy helped promote drivable suburban environments through various means, most notably subsidization of road construction. Leinberger noted that development patterns in American cities in the latter half of the 20th century could be predicted by three factors: The location [often pre-existing] of executive housing [i.e., the sort of neighborhoods in which families aspired to live], the location of minority housing [usually on the other side of town from the executive housing], and the locations of freeways.
The result was that new residential, office, and retail development was preferentially directed to a particular quadrant or pie slice of the region surrounding central cities. In many cities, including Washington DC, this favored sector was to the north or northwest of the central city. [See for example Montgomery County, with Bethesda, Potomac, North Bethesda, Rockville, North Potomac, Gaithersburg, and Germantown all strung out along the I-270 corridor, with development finally reaching Frederick County.] Columbia is actually an exception to this rule of thumb—about which more later. The end result was classic suburban sprawl: As people moved further and further out in the favored sectors, the availability of open land [a consequence of simple geometry: there’s more pie in the slice near the rim than in the center] and the desire for bigger houses and yards meant that every 1% increase in population drove a 4-8% increase in land used for development.
However now we’re seeing the downside of suburban growth. For example, in the Chicago metropolitan region the outer suburbs (exurban communities) are by far the largest per-capita contributors to energy use and greenhouse gas emissions. Similarly, the mortgage crisis is mainly a phenomenon of drivable suburban communities: that’s where most of the foreclosures are.
Meanwhile the economy s shifting beneath our feet again. Having replaced the industrial economy while continuing the trend to drivable suburbanism, the knowledge economy is in turn being replaced by the experience economy. [I’m presuming here that Leinberger is using the term in the same sense as the book of the same name by Pine and Gilmore.] This is leading to a third American dream: Having the choice of either a drivable suburban or walkable urban environment.
Why is there a market deman for walkable urban environments? One factor is that suburbia contains within itself the seeds of its own destruction: more is less when it comes to the suburbs. As more people move to the suburbs, the ills people sought to escape (traffic, pollution, crime) eventually follow them. In reaction people form neighborhood associations [of which Columbia Association is the apotheosis] to preserve and protect the suburban experience. [Though Leinberger didn’t use the term, here we also see the birth of NIMBYism in its modern form.]
Just as their parents were seduced by the images of suburbia they saw on TV [cue clip from I Love Lucy], so kids who grow up in the suburbs were seduced by new images of how to live, in this case images of walkable urban environments as portrayed on Seinfeld [cue Jerry and George walking past a small grocery on a New York street], Friends, Sex and the City, etc. [It’s important to note here that these are manufactured images targeted at predominantly white middle-class consumers interested in the comedic and dramatic adventures of other white middle and upper-middle class consumers. Part of the Hollywood strategy here was to recast minorities from urban threats to background contributors to urban atmosphere.]
Other reasons for the rising popularity of walkable urban environments include the increasing number of empty nesters and other households without kids (only 14% of new households over next 20 years will have kids), boredom with life in the drivable suburbs, demand from members of the Creative Class, and the increasing expense of the car-centric lifestyle: Automobile-related expenses account for 19% of the average American household budget, 25% of the suburban budget, but only 9% of the budget in walkable urban environments. The household that gives up a car in return gets the ability to carry a mortgage of over $100K more than they previously could. [And they’ll need that extra money, as we’ll see.]
Market demand reflects these trends. Large houses on large lots have been massively over-produced: There’s enough surplus housing stock of this type to satisfy needs for a generation. This over-supply drives suburban housing prices down, while the desire for walkable urban environments drives housing prices in those areas up. Here Leinberger compared high-end housing in Great Falls, Virginia, with high-end housing in the Dupont Circle area of Washington DC. In 2000 the typical Great Falls high-end residence cost more per square foot than the typical high-end residence in Dupont Circle. Now the situation has reversed, with the Dupont Circle residence commanding a premium on a per-square-foot basis to the typical Great Falls McMansion.
This same dynamic played out on a larger scale in the recent mortgage crisis: Housing in (relatively) close-in suburbs rose in value and then fell, but housing in further-out suburbs fell more in relative terms. Housing in walkable urban environments, on the other hand, went from being less-expensive than suburban housing on a per-square-foot basis to being significantly more expensive, as housing values rose faster over the past few years and then fell less.
How to create walkable urban places? This is inherently complex to do vs. traditional development strategies. It’s like driving in a NASCAR race versus piloting a jet fighter: The NASCAR driver just has to drive straight and turn left, while the fighter pilot has to navigate in a three-dimensional environment. [In other words, “let’s build a subdivision!”—or a shopping mall, or office park—is easy compared to “let’s create a thriving mixed-use community with balanced transportation services and attractive and convenient residential, retail, and office spaces”.]
In a walkable urban community more is more. In other words, higher density and new added spaces and uses add to the value perceived by residents, if they are within walkable distance, roughly 1500-3000 feet, or an area of about 400 acres. [As Leinberger noted, this is from pi r-squared, the formula for the area of a circle. A circle with a radius of about 2,400 feet, or just under a mile from side to side, contains about 17 million square feet or about 400 acres.]
In addition to the walkable urban area itself, there’s also a premium that accrues to drivable suburban areas in close proximity to a walkable urban area: People just outside the boundary of the walkable urban area can to a large degree have the benefits of both a suburban lifestyle and easy access to urban amenities. [This is a very important point when it comes to Columbia Town Center redevelopment and its effect on the adjacent villages.] We do need to be conscious of affordability, but there are various good approaches we can take to help with this. [And one good approach is to have more walkable urban communities. Recall from earlier: The current per-square-foot premium for residences in walkable urban spaces is a function of high demand for those spaces and a limited supply. Increase the supply of walkable urban spaces to match the demand and the premium will disappear.]
It turns out that the Washington DC area has the highest number of walkable urban communities of any place in the country. [Higher even than New York? Leinberger didn’t address this.] Where there used to be only two such places in and around DC, now there are about twenty. In general across the U.S. we’d expect to find about four to seven walkable urban places per one million in population. 65% of walkable urban places have rail service, but in the DC area 90% of such places do.
There are five kinds of walkable places
downtown adjacent (e.g., Fells Point in Baltimore)
suburban town centers (e.g., Mountain View CA [or Bethesda])
suburban redevelopment (e.g., Ballston)
suburban greenfield (e.g., Reston Town Center)
The good news: There is pent up market demand for walkable urban places [as demonstrated by their price premium]. Creation of walkable urban places can be a driver for the economy [and such places in turn can become hotspots of entrepreneurial innovation]. This can help drive redevelopment of cities and suburbs, and lead to reduced greenhouse gas emissions.
There are various national issues that need to be addressed in order to support development of walkable urban communities. Two examples are the transportation bill (relatively small as these things go) and an infrastructure bank to fund infrastructure improvements. [I didn’t have time to write down all the points om this slide.]
[Finally, what we all were waiting for: What does this mean for Columbia?] What Columbia got right:
a prime location between Washington DC and Baltimore [which allowed it to avoid the curse of being in the wrong side of town vis-a-vis Baltimore]
the best in class of drivable suburban communities (essentially a pretty form of sprawl)
made the right thing easy to do [not sure of the exact meaning behind this]
Howard Hughes Corporation is picking up the Rouse vision
But [and a very big but] Columbia is missing an essential piece of a walkable urban community: rail transit. Bus rapid transit (with dedicated lanes) is a reasonable interim solution, but less desirable for the long term; in particular suburbanites won’t ride buses [a lower-status mode of transportation]. How to pay for rail transit? Maybe some government funding [but less than in the past], maybe some funding from developers (who subsidized streetcar systems for the original suburbs), but most likely the funding will have to come from residents themselves in the form of higher taxes. But people have shown themselves willing to take on this burden in other places, even in the midst of a recession (e.g., St. Louis), so it’s not out of the question here in Columbia.
[Leinberger then moved to questions and answers. Both the questions and answers below are paraphrased.]
Q: What would happen if nothing changes in Columbia?
A: Home values would drift downward over time [consistent with experience in the rest of the country].
Q: How can Columbia be walkable when the retail areas (e.g., the Mall in Columbia) have no sidewalks?
A: Existing retail centers need to put in a street grid and bring that grid right up to the center’s stores. Anchor stores will fight this, but it’s necessary to integrate existing centers into the walkable urban environment. In some places existing malls have been demolished and redeveloped, which solves the problem as a side effect.
Q: Rail transit is the most important infrastructure of 21st century. What advice can you give on how to push the issue with the relevant governments?
A: One approach is to go ahead and build a transit ready place, and deal with the rail issue later—basically grow the community to a point where its density and overall population are high enough to attract rail infrastructure. Reston Town Center is an example of this. One possible funding mechanism is through a supplement to the existing sales tax.
Q: How can we integrate existing regional malls?
A: In some cases they’ll be torn down and redeveloped. In other cases we can build right up to existing retail centers, and open them up to the outside world—maybe even run streets through them in some cases.
Q: What about the social values that have characterized Columbia?
A: Redevelopment doesn’t mean turning our back on our values, particularly when it comes to affordable housing. An example is the Albuquerque Trust [I think he meant the Albuquerque Civic Trust], which directs 15-20% of deals into affordable housing. Other possible approaches include inclusionary zoning, or allowing auxiliary housing [see below]. They’re working on metrics at Brookings in relation to this general issue; this will be the subject of a future book.
Q: How do we reuse existing single family homes?
A. This is a tough question. One possibility is loosening regulations to allow renting auxiliary space not needed by the households living there (granny flats). [Note: for a lot of houses this could require significant remodeling.]
Q: What about the cultural and educational aspects of walkable urban places?
A: We need regionally significant places, including sports (baseball but not football), education, and medical facilities. A good example is what Camden Yards did for downtown Baltimore. Such facilities can share parking with existing office and retail centers.
Q: What are the biggest obstacles for lenders?
A: Siloed thinking. Lenders are used to dealing with a single type of development at a time: just residential, or just office, or just retail. Go back to the NASCAR driver vs. fighter pilot analogy; lenders will have to learn how to navigate in this new environment.
Q: What about the role of the Internet? We can now work online, and organize online, and play online.
A: Most people who spend their days in front of a computer don’t want to spend their nights in front of a computer as well. They want to get out, see friends, and have fun, and they want to do it in walkable urban places.
[That was the last question and the end of the event. I hope this was useful both for those who didn’t attend and for those that did.]