The Revitalist

CoolTown Studios remarks on the rumored-to-be-slowing condo market. Rising interest rates, rising condo prices, and the surging numbers of new condos on the market mean that more condos are available for fewer buyers. Not a developer's dream. CoolTown sees a compelling reason for developers to consider rental - unless they are offering something special.

The NY Times offers an example of this phenomenon in northern New Jersey. More developers are going rental because "demand for apartments remains high, because there is always a large group of New Jersey residents who are 'renters by choice.' And as interest rates have begun to climb, pricing more people out of the homebuying market, the number of renters inevitably increases."

The Herald reports that North Enders packed a recent City Hall hearing to protest the conversion of the former Prince Pantry into luxury condos. The residents say that their way of life is threatened by development that is driving the neighborhood shops out of business. The developer says that he tried to find a retail tenant for the space but couldn't. Ultimately, the developer withdrew the condo proposal – what will happen at the site remains unclear.

There's no doubt that the developers who are creating these condos are making money, and there is no doubt that the people who are buying them are getting what they want (cool space in a great neighborhood). The original building owners are probably getting a good deal as well. I guess it's the neighbors who are upset about the change happening around them. It's an old story, and I'm not sure that anyone has a solution with a happy ending for all. 

CoolTown Studios highlights the up and coming term "attainable" to describe middle-income housing or housing that is affordable or workforce housing or mid-market housing or whatever you want to call it. We have heard this term being bandied about lately and wholly approve. "Affordable" simply has too many historical and emotional connotations to explain around – kind of like "preservation."

The post also touches another over-worked word: loft. They are adopting Zimmerman/Volk's classification to distinguish between "hard lofts" (the lofts you remember from the good, old days - spare and unadorned with almost no demizing walls) and "soft lofts" (apartments that have the look and feel of urban lofts without all the grittiness and with some walls). We have worked with the Zimmerman/Volk people and swear by their finger-on-the-pulse market analysis – it's nice to see them get some well-deserved good press.

Following on yesterday's post about the loss of middle-income affordability in major cities, the NY Times presents two examples of developers bucking the trend.

In Chicago, developer David Hill, previously a developer of suburban homes, is putting mixed income housing on the site of the former Cabrini Green and Stateway Gardens projects. The townhouse condos will mix market rate with middle-income affordable and public housing replacement units. He is convinced that this kind of development, where the market rate units support the affordable ones, can support competitive returns to the investors (the deal involves a great many development partners and a variety of subsidy sources, although no federal funds). "Affordable by itself simply doesn't pencil out." One of the keys to making the mix work is in the design: from the street it isn't apparent which units are affordable and which high end.

In Providence, Antonio Guerra has been waiting over 40 years for his payoff. He and his partners bought the former Brown & Sharpe manufacturing complex in 1964 after cobbling together financing ("It was a tough, tough loan to make"). He leased as much of the space as he could, while he worked on developing one building at a time, the first in 1987. He just opened the final phase: Promenade at the Foundry with 220 loft units. The site is now convenient to the Providence Place Mall and  the Water Place Park, none of which were even dreamed of when he bought the property. The article nicely points out the importance of the state historic rehabilitation tax credit in this project and many others in downtown Providence – projects that are providing badly needed middle-income housing. Rhode Island obviously understands the catalyzing power of the credits and is reaping the benefits.

The NY Times reports on the phenomenon of the middle class being squeezed out of the country's biggest cities and replaced with the wealthy. There has been a lot of anecdotal evidence, and a recent Brookings Institution study confirms it. For example, NYC lost over 200,000 homes affordable to essential personnel (firefighters, police officers, etc.) between 2002 and 2005. At the same time, the article says that "fewer than 13,000 of the 2.3 million households that pay income tax are expected to account for nearly 30 percent of the city income tax paid in 2006."

The question is: is this a problem? Harvard's Edward Glaeser says, "As a New Yorker, I understand the view that exile from New York is consignment to hell; but that's not accurate. The majority of middle-class people that have moved out have presumably found themselves better lives out there." The idea is that the middle class can find affordable option in 'burbs or can get a second job to afford a place in the city. Thankfully, the article points out that others are concerned that this will lead to greater polarization in the cities and a lack of opportunities for the poor to move up. In a city like Boston, where there is a residency requirement for police officers, it becomes even more problematic. I'm a firm believer that we all (individually and on a societal level) benefit from mixed (economically, racially, socially) communities. The trouble on the development side is that the economics don't support "attainable" housing, and all the subsidies are for "affordable" housing. Without some sort of prioritization and incentives from the city, middle-income housing will continue to be squeezed out of our cities.

Smart City has an interview with developer John Elkington, who has been working on the revitalization of Beale Street in Memphis. He outlines the five key factors (via Planetizen) for the revitalization of historic and entertainment districts. It's great to hear the story of this complex, large-scale turn around: "I think all developers have to work on faith."

Elkington's five factors:
1. government support - don't waste your time if you don't have the support of municipal leaders
2. deal with policing issues - safety first - public perception of safety is key
3. potential market base - if you're not Orlando with droves of tourists, you have to make the most of who you do have
4. specific tenant plan - go out and pitch to tenants (local and regional) who fit the concept
5. well-defined concept - match the public's expectations with what you plan to deliver

The EPA's has published online a new resource called Smart Growth Illustrated. It lays out 10 principles of Smart Growth planning and design and links to two examples of each principle. They are:

Mix Land Uses
Take Advantage of Compact Building Design
Create a Range of Housing Opportunities and Choices
Create Walkable Neighborhoods
Foster Distinctive, Attractive Communities with a Strong Sense of Place
Preserve Open Space, Farmland, Natural Beauty, and Critical Environmental Areas
Strengthen and Direct Development Towards Existing Communities
Provide a Variety of Transportation Choices
Make Development Decisions Predictable, Fair and Cost Effective
Encourage Community and Stakeholder Collaboration in Development Decisions

Once again the majority of the examples are in the West, with a smattering of Southeastern sites thrown in. Are there no good smart growth projects in midwest or northeast? (I'm not trying to be snide, just asking.)

This list is inspiring because it looks beyond project-level development and sets out goals for communities and municipalities. I particularly like "Make Development Decisions Predictable, Fair and Cost Effective" - not only will the efficiencies save money, but you will encourage more investment if the process is predictable and reasonable. If a community could be united around these principles, wouldn't you want to live there? People would be beating down the door.

The Globe reports on the veto override that saved in the increase in the historic rehab tax credit program. It's a nice bit of publicity for the cause, if a little light on details.

After 10 pedestrians have been killed on DC streets this year, DC is cracking down on drivers who breeze past pedestrians in the crosswalk (via Planning Livable Communities). Undercover officers set up a sting operation where they attempted to cross and alerted patrol officers down the street to drivers who did not stop. The new initiative is based on the Three Es: engineering (better designed intersections with bumps and rumble strips to reduce speed), education (the new Street Smart campaign), and enforcement (i.e., the sting operation).

As I stood at the crosswalk on Washington Street in Brookline this morning, five cars rolled passed me without slowing down (2 sedans, 3 suvs). This despite the sign that says that they are required by law to stop and the yellow marker in the middle of the street with the universal pedestrian symbol. This is the norm for my neighborhood. Far more remarkable is the driver who stops without a screeching of brakes or an exasperated look. Is it that much of an imposition on their valuable time?

Forbes.com has ranked Essex County, Mass as the #1 most overpriced place in the United States. The ranking is based on median home price, cost of living, job growth, and a salary index. "We added up the rankings; the 10 metros with the 'worst' combined scores -- the highest -- made our list. They had the highest cost of living, lowest salaries, least job growth and least affordable housing." In Essex County the glut of dot com era McManions on the market are to blame for the high ranking, along with a high cost of living and mediocre job growth. The median home price is listed as $373,750.

We are doing our bit. With Washington Mill Lofts we will be bringing housing that is affordable, rental at first but condo in a few years. WM Lofts will be an economic spark for the neighborhood. And our redevelopment of the nearby Morehouse Bakery Building will bring new businesses and jobs to Lawrence.