CBL Header

 

 

 

˚ ˚ ˚ ˚ ˚

THE STRUCTURAL SHIFT TO "WALKABLE URBANISM"

The building of the built environment (real estate and the infrastructure that supports real estate) is in the middle of a structural change, only comparable to the change that took place two generations ago following World War II.

The structural change that occurred in the mid-20th century converted real estate development into a commoditized, formula-driven industry, based upon access by and parking of automobiles and trucks. I refer to it as "drivable sub-urbanism" and it had substantial market support for decades. The real estate industry responded to this market demand and the results yielded many economic benefits in the then dominant industrial economy. Yet we now know that it actually narrowed consumer options, consumed land at 6-8 times population growth and produced "could be anywhere" places, based upon the "19 standard product types". These drivable sub-urban formulas have been re-enforced by real estate finance, which has turned what for thousands of years was a 40-year asset class into a product with a 7-10 year life.

However, drivable sub-urban development became overbuilt and came to an abrupt collapse in 2007/8, directly leading to the Great Recession.

There are many unintended social, economic, health and environmental consequences resulting from how America has been developing its built environment over the past 60 years. These consequences include, among others:

  • Dependency on a car/truck-only transportation system which is putting financial pressure on household budgets.
  • Social segregation and the secession of financial elites.
  • The dependency of about 1/3rd of the US population who do not drive.
  • Subsidized drivable sub-urban public and private infrastructure that is too expensive to continue building and much of it cannot be maintained.
  • Lack of unintentional daily exercise which has partially contributed to the obesity and diabetes epidemic.
  • Indirect impact on American foreign policy which is skewed toward securing sources of foreign oil from countries increasingly hostile to the US.
  • The built environment generating over 70% of greenhouse gas emissions and, therefore, the #1 contributor to climate change.

Since the mid-1990s, many consumers have been demanding different options to the "one-size-fits-all" drivable sub-urbanism. While single-family homes on large lots and strip commercial will be a significant part of the American landscape for decades to come, its supply has been overbuilt for years to come.

Many households and businesses want something different; "walkable urbanism". This is where most daily needs can be met within walking distance. The convergence of the rising Millennial generation and soon-to-retire Baby Boomers, over half the US population, are on the forefront of demanding the walkable urban alternative. This includes downtown and suburban downtown revitalization, New Urbanism, transit-oriented development, green field mixed-use development ("lifestyle centers"), regional mall redevelopment, among other new ways of building. Public policy responses that allow for and promote this kind of development include smart growth, balanced investment in all transportation modes, strategy and management of walkable urban places, impact fees that "level the planning field", affordable & workforce housing development and engaging in scenario planning for the economic development and transportation future of metropolitan areas.

There is substantial pent-up market demand for walkable urban development. Our research shows it will take 20-30 years to satisfy, given we only add 2% to the built environment in a good year…and we have been underbuilding walkable urban development for at least this real estate cycle, from 2010. We in real estate are fundamentally re-tooling how we design, plan, regulate and finance to serve this pent up demand. There has been much accomplished in this regard over the past decade, led by real estate developers, political and civic leaders, organizations such as Urban Land Institute, Congress for the New Urbanism, Enterprise Community Partners, Smart Growth America and my home organizations; Brookings Institution, Center for Real Estate and Urban Analysis at George Washington School of Business and Arcadia Land Company.

Working with many like-minded people and institutions, we are formulating and implementing the next American Dream.