Dorms for Grownups

The Bridge quoted me in Why Dorms for Grownups Are a New Way of Life. It opens,

If you think applying to Stanford or MIT is a long shot, consider the odds of landing a spot in a Brooklyn co-living residence. Common, the company now operating six co-living facilities in the borough, recently received more than 15,000 applications for about 300 available rooms in three of the cities it serves: New York, San Francisco, and Washington, D.C. Why the demand? Co-living, essentially the residential version of the co-working trend, offers dorm-like, amenity-filled living that’s particularly attractive to millennials. The apartments come pre-stocked with furniture, appliances, fast WiFi, and lots of prospective friends.

John Bogil, 24, has shared a giant living room, kitchen, basement, and backyard with nine other people since moving into a Crown Heights facility called Common Albany a year ago. Although it sounds crowded, Bogil enjoys the company. “It’s awesome. I’ve made friends for life,” Bogil said. Common, launched in 2015, is Manhattan-based but has found fertile ground in Brooklyn. The growing portfolio in the borough includes the newly built Common Baltic in Boerum Hill, which offers co-living spaces as well as traditional apartments. The rent varies by neighborhood, with spaces in Crown Heights starting at $1,475 and Boerum Hill spots going for $2,143 and up.

Tenants have their own private bedrooms, many with private baths, but share the living room and kitchen as well as amenity spaces including lounges, fitness rooms, roof decks, dining rooms and work spaces. Convenience is a major selling point: the suites in a Common building come fully furnished with beds, dressers, couches, tables and chairs, a TV, towels and sheets, and a weekly cleaning service. Many of the issues that traditional roommates wind up fighting about have been taken off the table, like Real World with less drama.

Common was launched by Brad Hargreaves, who earlier had co-founded General Assembly, now a global educational company with campuses in 15 cities. Like many entrepreneurs, Hargreaves was looking to solve a problem. When the Yale grad first moved to New York City, he looked for an available room in an apartment on Craigslist and found the process cumbersome. “Common offers an alternative to this,” he said. “We make living with roommates better, more convenient, and more efficient.”

With young people increasingly crowding certain urban areas, the idea of a starter apartment is changing. While rents in Brooklyn have eased lately, thanks in part to new construction, the median rent is a daunting $2,785. With rents like those, some 76% of people 21 to 34 years old say they’ve made compromises to find a place to live, including living with roommates, according to the NHP Foundation, a group advocating affordable housing.

“Co-living has proven to be more than a passing trend,” said Hargreaves. “The response to opening our first home in Brooklyn was so strong that we were able to rapidly expand in the borough as well as into San Francisco and Washington, D.C. We now have nine homes on two coasts and are actively looking at new homes and new cities.” Common chooses its spots carefully, aiming to balance affordability and urban amenities. “We look to open in neighborhoods where there’s access to public transit and great local retail for our members to explore and enjoy,” said Hargreaves.

Common has the financial fuel to grow much more. The company has raised more than $23 million in two rounds of financing from 15 investors. The budding co-living industry now has multiple competitors as well, including WeLive, HubHaus, Node, and Krash. In Long Island City, a co-living company called Ollie plans to operate what it calls the largest co-living facility in North America, occupying 13 of the 42 floors in a new skyscraper.

While much of the allure of co-living is practical, many residents appreciate having the company, which in a cosmopolitan place like Brooklyn creates diverse collections of roommates. “I really appreciate the exposure to different peoples, ideas and cultures,” said Bogil. “I’ve learned so much about Australian politics and South African sports, for example, which might sound like useless info on the surface, but it helps me to learn about the world in a way that I never would normally. It makes the world feel smaller.” More than 70% of Common members are on 12-month leases but most stay longer than a year.

While typical co-living residents are in their 20s, the format could work for older adults as well, once the format goes mainstream. “There is growing interest in more communal types of living environments of the type offered by Common,” said David Reiss, an attorney and professor of real estate at Brooklyn Law School. “Co-living appeals to different people and our membership is diverse,” Hargreaves said. “We have young professionals, married couples, those moving to New York City for their first job, those moving from abroad, and ranging in their early 20s into their 30s and 40s.”

Advancing Equitable Transit-Oriented Development

photo by David Wilson

MZ Strategies has posted a white paper funded by the Ford Foundation, Advancing Equitable Transit-Oriented Development through Community Partnerships and Public Sector Leadership. It opens,

Communities across the country are investing in better transit to connect people of all income levels to regional economic and social opportunity. Transit can be a catalyst for development, and the demand for housing and mixed-use, walkable neighborhoods located near quality transit continues to grow. In some places like Denver, Seattle, and Los Angeles (to name just a few) land prices and rents near transit have increased substantially creating concerns with the displacement of small businesses and affordable housing.

In response, multi-sector coalitions are forming in a number of regions to advance Equitable Transit-Oriented Development (eTOD), which aims to create and support communities of opportunity where residents of all incomes, ages, races and ethnicities participate in and benefit from living in connected, healthy, vibrant places connected by transit. These transit-oriented communities of opportunity include a mixture of housing, office, retail and other amenities as part of a walkable neighborhood generally located within a half-mile of quality public transportation. This white paper pulls together emerging eTOD best practices from four regions, and highlights opportunities to use federal finance and development programs administered by US Department of Transportation to create and preserve inclusive communities near transit. It offers lessons learned for other communities and a set of recommendations for the Federal Transit Administration to better support local efforts by transit agencies to advance eTOD.

Achieving eTOD involves an inclusive planning process during the transit planning and community development phases. This entails long-term and active engagement of a diverse set of community partners ranging from local residents, small business owners, community development players, and neighborhood-serving organizations located along the proposed or existing transit corridor, to regional anchor institutions and major employers including universities and health care providers, to philanthropy, local and regional agencies and state government partners.

Equitable outcomes require smart, intentional strategies to ensure wide community engagement. Successful eTOD requires planning not just for transit, but also for how this type of catalytic investment can help to advance larger community needs including affordable housing, workforce and small business development, community health and environmental clean-up. (1, footnote omitted)

The report presents e-TOD case studies from Minneapolis-St. Paul; Los Angeles; Seattle and Denver.  These case studies highlight the types of tools that state and local governments can use to maximize the value of transit-oriented design for broad swathes of the community.

 

Walkers in the City

photo by Derrick Coetzee

The Center for Real Estate and Urban Analysis at The George Washington School of Business has released Foot Traffic Ahead: Ranking Walkable Urbanism in America’s Largest Metros for 2016. The Executive Summary opens,

The end of sprawl is in sight. The nation’s largest metropolitan areas are focusing on building walkable urban development.

For perhaps the first time in 60 years, walkable urban places (WalkUPs) in all 30 of the largest metros are gaining market share over their drivable sub-urban competition—and showing substantially higher rental premiums.

This research shows that metros with the highest levels of walkable urbanism are also the most educated and wealthy (as measured by GDP per capita)— and, surprisingly, the most socially equitable. (4)

This strikes me as a somewhat over-optimistic take on sprawl, but I certainly welcome the increase in walkable urban places over a broad swath of metropolitan areas. The report’s specific findings are that

There are 619 regionally significant, walkable urban places—referred to as WalkUPs—in the 30 largest U.S. metropolitan areas. These 30 metros represent 46 percent of the national population (145 million of the 314 million national population) and 54 percent of the national GDP.

The 30 metros are ranked on the current percentage of occupied walkable urban office, retail, and multi-family rental square feet in their WalkUPs, compared to the balance of occupied square footage in the metro area. The six metros with the most walkable urban space in WalkUPs are, in rank order, New York City, Washington, DC, Boston, Chicago, San Francisco, and Seattle.

Economic Performance: There are substantial and growing rental rate premiums for walkable urban office (90 percent), retail (71 percent), and rental multi-family (66 percent) over drivable sub-urban products. Combined, these three product types have a 74 percent rental premium over drivable sub-urban.

Walkable urban market share growth in office and multi-family rental has increased in all 30 of the largest metros between 2010-2015, while drivable sub-urban locations have lost market share. The market share growth for 27 of the 30 metros is two times their market share in 2010. This is of the same or greater magnitude as the market share gains of drivable sub-urban development during its boom years in the 1980s, but in the reverse direction.

Indicators of potential future WalkUP performance show that many of the metros ranked highest for current walkable urbanism are also found at the top of our Development Momentum Ranking—namely, the metros of New York City, Boston, Seattle, and Washington, DC. This indicates that these metros will continue to build on their already high WalkUP market shares and rent premiums.

There are also some surprising metros in this top tier of Development Momentum rankings, including Detroit, Phoenix, and Los Angeles.

The most walkable urban metro areas have a substantially greater educated workforce, as measured by college graduates over 25 years of age, and substantially higher GDP per capita. These relationships are correlations, and determining the causal relationships requires further research to prove.

Walkable urban development describes trends resulting from both revitalization of the central city and urbanization of the suburbs. For nearly all metros, the future urbanization of the suburbs holds the greatest opportunity; metro Washington, DC, serves as a model, splitting its WalkUPs relatively evenly between its central city (53 percent) and its suburbs (47 percent).

Social Equity Performance: The national concern about social equity has been exacerbated by the very rent premiums highlighted above, referred to as gentrification. Counter-intuitively, measurement of moderate-income household (80 percent of AMI) spending on housing and transportation, as well as access to employment, shows that the most walkable urban metros are also the most socially equitable. The reason for this is that low cost transportation costs and better access to employment offset the higher costs of housing. This finding underscores for the need for continued, and aggressive, development of attainable housing solutions. (4, footnote omitted)

There is a lot of import here. Is there more than a correlation between walkability and the educational level of the workforce and, if so, why? Why don’t more housing affordability studies take into account transportation costs when evaluating the affordability of a given community? What is the trend line of this new direction toward urbanism and how far can it go in the face of decades of investment in car-based communities? This annual study will help us answer those questions, over time.

Dos And Don’ts of Mixed-Use Development

Mixed Use Development

I was interviewed on Georgia Public Radio’s On Second Thought radio show about The Dos And Don’ts of Mixed-Use Developments. The segment was about John’s Creek,

an affluent suburb in northeast Atlanta. It’s fairly small — only about 80,000 people live there — but it has big dreams.

The city wants to transform some of its 728-acre office park into a town center with homes, shops and offices. John’s Creek mayor Michael Bodker calls the redevelopment project “The District,” referring to an area that would become the city’s downtown sector. Bodker believes this project will broaden the city’s tax base.

“John’s Creek does not have a healthy and sustainable tax digest,” Bodker said in his most recent State of the City address. “Homeowners are disproportionately supporting the load by covering 81 percent of the tax digest versus 19 percent for commercial.” Without doing something to change the current model, he says, there will be less money for public services like road repairs.

The segment was quite short, so it did not get to what I thought was the key issue — the appropriate role of mass transit in the design of urban centers. It appears that the mayor’s plan does not contemplate linking this new urban center to Atlanta-area mass transit. That seems like the kiss of death for what is supposed to be a walkable town center.

To be an attractive walkable environment, you need a critical mass of walkers. Mass transit brings walkers. Some walk by preference and some by necessity: young people without cars; senior citizens who have grown less comfortable driving; and people who might want to have a few drinks and enjoy the nightlife planned for The District.  Moreover, many retail and service jobs pay relatively low wages, so many workers rely on public transportation to get to work. John’s Creek should take a fresh look at the principles of Transit-Oriented Design and New Urbanism before finalizing its plan.

On Second Thought’s website also discusses some of my other thoughts on planning such a big project.

Equitable Transit-Oriented Development

Forest Hills RR Station

Enterprise Community Partners has issued a white paper, Promoting Opportunity Through Equitable Transit-Oriented Development (eTOD): Making the Case. The Executive Summary opens,

Investments in transportation infrastructure can catalyze regional growth and improve mobility. Given limited public funds, public officials and transportation planners have increasingly recognized the benefit of coordinating transportation investments with land use, housing and economic development investments and policies. In particular, there has been a specific emphasis on facilitating transit-oriented development (TOD) – a growth model characterized by compact development, a mix of land uses, and multi-modal transportation connectivity. When properly planned, such development can support transit ridership and revenues, boost property values and enhance economic competitiveness.

While TOD can take many forms, for a variety of reasons there has been increased demand for transit-oriented neighborhoods with a critical mass of population, neighborhood-serving retail establishments, employment opportunities and/or economic activity. Some prefer these transit-oriented, amenity-rich neighborhoods based on lifestyle preferences. However, for others – particularly people with lower incomes or for whom driving is difficult or impossible – the accessibility that TOD offers is crucial to reaching jobs and life’s other necessities in an efficient and economical manner.

Unfortunately, a number of factors – most notably the prevalence of zoning codes that separate residential from commercial and retail uses – have limited the number of compact, mixed-use, multi-modal neighborhoods. To the extent that demand for housing in such neighborhoods – as a result of either choice and/or necessity – remains strong, scarcity of housing in these neighborhoods can increase property values. Significant price increases can lead to additional cost burdens, potential displacement and/or barriers to entry for low- and moderateincome households. If these households are displaced it can also reduce likely riders’ access to transit and limit employees’ and customers’ access to businesses.

One solution to these challenges is equitable TOD (eTOD), which is well-planned and implemented development near transit that accounts for the needs of low and moderate-income people, largely through the preservation and creation of affordable housing. eTOD can expand mobility options, lower commuting expenses and enhance access to employment, child care, schools, stores and critical services. This development model also conveys ancillary benefits to the broader community, the economy, the environment and the transportation system. (5-6)

This is all to the good, but the report does not struggle with a fundamental problem: local governments do not want to build housing for low- and moderate-income households because they tend to be a net drain on municipal budgets a opposed to the typical household living in a single-family home. Even local politicians who are sympathetic to eTOD will face many roadblocks from their constituents if they try to make it happen. Enterprise promises a second report that will address barriers to eTOD. Hopefully, it will address this issue head on.

HAMP-ered Foreclosure Prevention

FDRfiresidechat2

The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) released a report, Treasury’s Opportunity to Increase HAMP’s Effectiveness by Reaching More Homeowners in States Underserved by HAMP. The Introduction opens,

TARP’s signature foreclosure prevention program, the Home Affordable Modification Program (“HAMP”), has struggled to reach the expected number of homeowners Treasury envisioned for the program. According to Treasury, TARP’s housing support programs were intended to “help bring relief to responsible homeowners struggling to make their mortgage payments, while preventing neighborhoods and communities from suffering the negative spillover effects of foreclosure.” Treasury announced that HAMP itself aimed “to help as many as three to four million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term,.” The only long-term sustainable help provided through HAMP is a permanent mortgage modification, which become effective after the homeowner successfully completes a trial period plan. Through December 31, 2014, according to Treasury data, 1,514,687 homeowners have been able to get into a more affordable permanent HAMP modification (of which, 452,322 homeowners, or 29%, subsequently redefaulted on their HAMP modifications), while there have been 6,165,544 foreclosures nationwide over the same period based on CoreLogic data.” (1, footnotes omitted)

There is a lot of soul searching in this report about why HAMP has been so ineffective and the report offers tweaks to the program to improve it. But perhaps the problem is structural — a program like HAMP was never really in a position to make a bigger impact on the foreclosure crisis.

When compared to the federal government’s intervention during the Great Depression, HAMP seems too modest. President Roosevelt’s Home Owners’ Loan Corporation bought out mortgages from banks in bulk and then refinanced them on more attractive terms than the private sector offered. HAMP, on the other hand, has trouble getting homeowners to apply to the program in the first place.

Bottom line: HAMP is too retail and what we needed and need is something that could be done wholesale.

 

Manufacturing Jobs in NYC

The New York City Council released a report, Engines of Opportunity: Reinvigorating New York City’s Manufacturing Zones for the 21st Century. I am always worried that discussions of increasing manufacturing jobs, especially in a city as expensive as New York, are informed by a romantic vision of a past that cannot be recaptured. This report seems to be aware of that trap. It focuses on marginal improvements that can be made to support the kind of manufacturing and creative economy jobs that can survive the brutal competition for space and skilled employees that New York companies have to deal with.

The report makes three land use policy recommendations:

1) Industrial Employment District – A zoning district which provides the space for those industries which are critical to the economic well-being of thousands of New Yorkers and the health of the overall economy. In places where a concentration of  manufacturing/ industrial activity exists — in many of the existing “Industrial Business Zones” for instance — a re-writing of the use regulations to focus on the protection and growth of these industries is essential, as is allowing for additional density to create the option for more space for new and existing firms to expand. Combined with strategic incentives and targeted enforcement, these districts will provide a stable regulatory framework for investment.
2) Creative Economy District –A dynamic new combination of industrial space and commercial office space. These creative economy districts would no longer be hindered by competition with incompatible uses like mini-storage or nightlife or blocked-out by unproductive warehousing of property in hope of future residential rezoning. With the additional density, property owners would gain much more lucrative development opportunities than under the current zoning while growing the City’s employment base. Robust workforce development strategies will need to be implemented in tandem with these new districts to ensure a wide variety of New Yorkers will have access to these new jobs.
3) A Real Mixed Use District–Mixed-use industrial-residential-commercial neighborhoods like parts of SoHo or Long Island City or Williamsburg or the Gowanus have a unique dynamism that has made them tremendously desirable. Other cities are increasingly trying to emulate the dynamic synergy of these mixed-use neighborhoods. The creation of the “MX” zone acknowledged the value of mixed-use neighborhoods and tried to find a solution that could increase the residential capacity while maintaining their dynamism. Unfortunately because MX allows but does not require a mixture of uses, the economics of real estate have lead residential development to dominate and displace other uses. A zone which supports and requires the creation of commercial and compatible industrial space alongside residential would create dynamic new neighborhoods instead of just residential development. (5)
The big problem with this (and similar reports) is that it does not directly address the opportunity cost of such proposals.  What are we giving up when we create these new zoning districts? For one thing, we make less land available for residential uses, which tend to crowd out other uses because of the immense demand for housing in New York City right now.
More generally, how do we properly balance the various needs of the City in our overall zoning plan?  There is no right answer to such questions, but they should be asked and proposals like this should put their answers on the table for others to consider.