Currently viewing the tag: "Infill"

Some bad economic news was reported yesterday. According to the New York Times article new home sales dropped by 33% in May:

The new housing market has never been this bad, at least not since the government started tracking such things in 1963.”

New homes declined by a record amount in May to a new low.”

In a separate report, New Urban News reviewed William Lucy’s new book, Foreclosing the Dream: How America’s Housing Crisis Is Reshaping Our Cities and Suburbs. Mr. Lucy is a professor of urban and environmental planning at the University of Virginia.

According to New Urban News, Lucy’s analysis of data he collected suggests:

• “As the percentage of households with children declines, and that of singles, empty-nesters, and elderly increases, housing demand will increase in cities and inner suburbs, and demand in outer suburbs and exurbs will level off or decline nationally.”

• “Suburban decline will accelerate in middle-aged housing, but that won’t be uniform; demand for housing in some inner suburbs will rise.”

• “Demand will increase for transit serving more areas more frequently.”

• “Demand for more mixed use and walkable neighborhoods will increase, and prices in these areas will escalate as supply lags behind demand.”

He (Lucy) rejects the idea that rapid, continuing, outward development is inevitable because of the nation’s growing population and a scarcity of room for development in cities. If we choose to make it happen, he says, “a tremendously high proportion of our future growth as a nation could easily occur within already developed areas: in, or on the edges of, big-city downtowns; on busy corners of city streets away from downtown; and in new urban villages close to high-speed transit stations in suburbs.”

How each region responds to the challenges of transit and development will vary, producing contrasting results. Greater Atlanta and greater Washington, DC, illustrate the two extremes, in Lucy’s view. “Washington, DC, and some suburban cities and counties planned for transit-oriented development, and use of transit rose to the second-highest level in the United States,” he notes. “Atlanta’s transit use lagged, which may be one reason why Atlanta has the most declining suburbs in the country.”

The gap between city and suburban growth has narrowed dramatically. From Foreclosing the American Dream: How America’s Housing Crisis is Reshaping Our Cities and Suburbs

I don’t think the decline in new-home sales is a total anomaly. New home builders, particularly those that build single family homes in new suburban and exurban communities are going to have a difficult time going forward. Real estate developers that focus on infill and mixed use development as well as TOD should perform better. We are reaching the tipping point; people are leaving the suburbs and returning to the cities.

I just finished reading the 2010 Emerging Trends in Real Estate.  Now in its 31st year, this report is jointly produced by PricewaterhouseCoopers and the Urban Land Institute (ULI). This is the first time I have read this report, but I am very impressed. According to the PricewaterhouseCoopers webpage this report:

is the oldest, most highly regarded annual industry outlook for the real estate and land use industry and includes interviews and survey responses from more than 900 leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.”

The report is downright bearish on real estate development for 2010.The report goes on the say that real estate developers are “largely dead” and that “builders can leave on long sabbaticals”. They don’t foresee construction picking up until 2012, but when it does, most construction will be focused on urban infill development.

This is great news for those of us that believe that our cities are our future. Below are some of my favorite excerpts from this report:

Next generation projects will orient to infill, urbanizing suburbs, and transit-oriented development. Smaller housing units-close to mass transit, work and 24 hour amenities-gain favor over large houses on big lots at the suburban edge.  People will continue to see greater convenience and want to reduce energy expenses, shorter commutes and smaller heating bills make up for high infill real estate costs.” (Page 12)

Infill vs. Suburbs. Road congestion, higher energy costs, and climate change concerns combine to alter people’s thinking about where they decide to live and work.  ‘It’s a fundamental shift.’ The lifestyle cost-of-living equation starts to swing away more dramatically from bigger houses on bigger lots at the suburban edge to great convenience and efficiencies gained from infill housing closer to work. These homes maybe more expensive on a price-per-pound basis, but reduced driving costs and lower heating/cooling bills provide offsets. And time saved avoiding traffic hassles moderates stress and enhances productivity. ‘Two-hour commutes reach a tipping point with higher energy costs’ and ‘near-in suburbs will do well especially if they link to business cores by mass transportation.” (Page 32)

Investors tend to favor the following:

  • Global gateway markets on East and West coasts- featuring international airports, ports and major commercial centers.
  • Cities and urbanizing infill suburbs with 24-hour attributes-upscale, pedestrian-friendly neighborhoods, convenient office, retail, entertainment, and recreation districts; mass transit alternatives to driving; good schools (public and/private); and relatively safe streets.
  • Brainpower centers-places that offer dynamic combination of colleges and universities, high paying industries-high tech, biotech, finance, and health cars (medical centers drug companies)- and government offices.” (Page 27)

Denver metro area wins points for building out its light-rail network, encouraging transit –oriented mixed-use projects around stations.” (Page 35)

So what does this mean for Miami’s future?

  • We should hold the Urban Development Boundary, this report confirms that 2 hour commutes are out of vogue.
  • Miami 21 should be implemented immediately and not delayed any further.
  • A large scale light rail system, including Baylink, is long overdue
  • If Miami wants to become a competitive city we need to diversify our economy as much as possible in order to become a brainpower center. A service economy based predominantly on tourism will not attract educated people seeking high paying jobs.

You heard me right — Tri-Rail’s Deerfield Beach Station is poised to have transit-oriented development by 2010.

According to real estate website globest.com, Atlanta-based developer York Residential has received final approval to begin construction on the the Deerfield TOD. The project is expected to cost $180 million, with construction beginning in early 2009. Let’s hope that our market conditions don’t squash this development.

The mixed-use TOD will be adjacent to Deerfield Beach Station along Hillsborough Boulevard. Some specs according to the article:

  • It will include three residential buildings with 467 market-rate apartments and 82 workforce-housing units, 36,000 sf of office space, 14,500 sf of ground-level retail space, a 140-room hotel and two parking garages with 1,146 spaces.
  • The residential units are expected to come on line in 2010 while the completion date for the remainder of the project has not been determined.
  • Target rents for the residential units also have yet to be set. According to Yonce, rents for a one-bedroom unit in the area range from $1,100 to $1,150 per month.
There are also 3,500 employees that work within a quarter mile of the development site, which means there could be a considerable walk-to-work element to this TOD. Let’s just hope that the design is up to far so that walking in and around the development will be a pleasant experience.

Note: Photograph is not a rendering of Deerfield Beach’s proposed TOD.
Photo: mhginc.com

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