on common ground: winter 2015

8/10/2019 On Common Ground: Winter 2015

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on common groundREALTORS& Smart Growth

CITIES

ASCENDANT

WINTER 2015

Resurgent Downtowns

Innovation Districts

Streetcar Boom


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2 ON COMMON GROUND WINTER 2015

For more information on NAR and smart growth, visit www.realtor.org/smartgrowth.

On Common Groundis published twice a year by the Community and PoliticalAffairs division of the NATIONAL ASSOCIATION OF REALTORS(NAR),and is distributed free of charge. The publication presents a wide range ofviews on smart growth issues, with the goal of encouraging a dialogue amongREALTORS, elected ofcials and other interested citizens. The opinionsexpressed in On Common Groundare those of the authors and do notnecessarily reect the opinions or policy of the NATIONAL ASSOCIATION

OF REALTORS, its members or afliate organizations.

Editor

Joseph R. MolinaroManaging Director, Communityand Political Affairs

[email protected]

Assistant Editor

Hugh MorrisManager, Smart Growth [email protected]

NATIONAL ASSOCIATION OF REALTORS500 New Jersey Avenue, NWWashington, DC 20001

Distribution

For more copies of this issue or to be placed on our mailing list for futureissues of On Common Ground, please contact Ted Wright, NAR, at(202) 383-1206 or [email protected].

On Common Groundis also available online at:www.realtor.org/publications/on-common-ground

2015 NATIONAL ASSOCIATION OF REALTORS

That the nations economy is focused in our metropolitan

areas is nothing new. Eighty-three percent of Americans live

in its 363 metro areas, and nearly one-third of all Americans

now live in one of the 10 most populous metros. Recent

gures (2012) show that 92 percent of new jobs added and

89 percent of economic growth take place in the metro areas.

But focusing closer than the metro scale reveals a new pattern.

The largest cities are becoming larger, and the central cities

are seeing more growth than the suburbs. From 2010 to 2012,

cities with more than one-half million in population grew

considerably more rapidly than they did, on average, over the

previous 10 years, according to demographer William Frey of

the Brookings Institution. And between 2010 and 2012, big

cities in the nations largest metropolitan areas grew faster

than their suburbs for the rst time since the 1920s.

Demand for living and working in cities is higher than at

any time in the past 60 years. One result has been that the

strongest sector of residential construction is the building of

apartments in cities, while homebuilding in distant suburbs

has not come close to returning to its high pre-recession

levels. As tastes change and employers try to attract young

talent, vacancies in suburban ofce parks with no amenities

within walking distance remain high, while many companies

relocate their work forces to downtowns.

The leaders of tomorrows economy are the young and thewell-educated. Young, college-educated adults are choosing

to live in large metropolitan areas, but more specically,

they prefer close-in urban neighborhoods where walking to

multiple destinations is possible. Their very youth suggests

that this urban moment in which we nd ourselves is at its

beginning stage and will grow and ourish as the millennial

generation (our largest generation ever) matures and takes

its place as social, economic and political leaders. The urban

reawakening is the future of our economy.

The Urban Moment

Courtesy of Visit Denver


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Shifting Patterns of GrowthAmericans return to urban life 4

by Brad Broberg

Downtowns are ThrivingAround the Country 10by Brian E. Clark

The Rise of Multifamily HousingMultiple-family residences are dominating

new construct ion 16

by Christine Jordan Sexton

Whats Behind the Fastest-GrowingSuburban Cities in America? 20by G.M. Filisko

Growing Up and Not OutThe fiscal benefits of higher density development 30by Brad Broberg

Streetcars SpurringUrban Development 34by Joan Mooney

The WalkUP MovementShifting development patterns to

walkable communities 40by John Van Gieson

Coding for the FutureCasting off outdated regulations 44by David Goldberg

Detroit: Big Upside 50by Tracey C . Velt

Techs Place in Urban GrowthInnovation districts play an important role in

developing city spaces 56by Christine Jordan Sexton

Everything Is Bigger in Texas Including urban growth challenges 60by Brian E. Clark

REALTORSTake ActionMaking smart growth happen 66

Winter 2015

On Common Groundthanks the following contributors and organizations for photographs, illustrations andartist renderings reprinted in this issue: Doug B. Adolph, City of Sugar Land, Texas; Colby Berthume, Rock

Ventures Family of Companies; Travis R. Crane, City of Raleigh; Lee D. Einsweiler, Code Studio; Cherie Gibson,

District of Columbia Department of Transportation; Rebekah Grmela, Austin Convention & Visitors Bureau;

Trey Hatt, City of San Marcos, Texas; Melanie Lentz, City of Carmel, Ind.; Brian McHugh, Buckhead Community

Improvement District; Derick ONeill, City of Boise; Camden Podesta, Visit Seattle; Daniel Parolek, Opticos

Design, Inc.; Brian Preece, City of South Jordan; Dave Robison, GoBE Realty; Josh Weaver, Sunlink Tucson

Streetcar; and Jane Whitledge, Frisco ISD Communications.

On Common GroundCourtesy of DCVB


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Cities upstaging suburbs

Historically, the suburbs within the nations large metro areas have

grown much faster than their primary cities. Between 2000 and

2010, the suburbs grew at an annual average rate of 1.38 percent

compared to 0.42 percent for primary cities.

Te trend is now reversed. Between 2010 and 2013, primary cit-

ies with populations of 100,000 or more outgrew suburbs each

year 1.05 percent to 0.95 percent in 2010-11, 1.13 percent

to 0.95 percent in 2011-12 and 1.02 percent to 0.96 percent in

2012-13, according to an analysis of metros with populations ofone million or more by William Frey, a demographer with the

Brookings Institution.

Although 32 of the nations 51 large metros experienced faster growth

in their suburbs between 2012 and 2013, primary city growth in

the remaining 19 metros was as a whole stronger, pushing the aver-

age growth rate for primary cities past the average rate for suburbs.

Unlike most population trends, which tend to favor the West and

South, multiple examples of primary cities growing faster than

suburbs can be found in all regions, including metros in the East

like Boston-Cambridge-Quincy, Mass./NH. (1.2-0.8) and in theMidwest like Columbus, Ohio (1.5 -1.0 percent).

Frey found the biggest gap in New Orleans-Metaire-Kenner,

La., where primary cities grew by 2.4 percent compared to sub-

urban growth of 0.5 percent. Te next biggest gaps were in

Charlotte-Gastonia-Rockhill, N.C./S.C. (2.4-1.7 percent), Seat-

tle-acoma-Bellevue, Wash. (2.1-1.4 percent) and Minneapolis-St.

Paul-Bloomington, Minn./Wis. (1.6-1.0 percent).

Many cities are not only outpacing the suburbs, theyre outpac-

ing their own growth rates from the previous decade. Looking

strictly at cities with populations exceeding 250,000, Frey foundthey grew twice as fast from 2010 to 2013 1.06 percent, 1.11

percent and 1.01 percent than they did between 2000 and 2010,

Between 2010 and 2013,

primary cities outgrew suburbs.

Many cities are not only outpacing the

suburbs, theyre outpacing their own

growth rates from the previous decade.

Greater Houston Convention and Visitors Bureau

Photo by James Willamor


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6 ON COMMON GROUND

when their average annual growth rate for the decade

was 0.49 percent.

In general, Frey wrote, the cities that are growing fast-

est are in metros with economies and amenities that are

attractive to millennials, graduates and young profes-

sionals. Among the fastest growers with rates exceeding2 percent are Seattle, Austin, Charlotte, Denver and

Washington, D.C.

In some metros, geography is reining in suburban growth

especially on the edges, said Robert Lang, an urban

affairs professor and executive director of Brookings

Mountain West, a partnership between the University

of Nevada Las Vegas and the Brookings Institution.

In the past, it was go-go-go to the edges, but in some

places theres no edge left, he said. Teres a lot more

growth now in the centers of cities and older suburbs.

In the Phoenix-Glendale-Mesa, Ariz. metro area, the

suburbs outgrew primary cities in 2013, but the margin

was slim, 1.7 percent to 1.6 percent. Even there, how-

ever, development patterns are shifting.

If you look at single-family development, theyre build-

ing homes on smaller lots and much closer together,

said Mike Orr, a REALOR and the director of the

Center for Real Estate Teory and Practice at Arizona

State University. At the same time, multifamily devel-

opment apartment construction being the most

active segment of the market is surging at infill

locations along the main corridor between empe and

Scottsdale, Orr said.

A more metropolitan America

Te number of Americans living in metropolitan areas

with an urban core of 50,000 people or more grew by

2.3 million in 2013, according to the Census Bureau.

Te number of Americans living everywhere else grew

by only 35,000.

By and large, rural America is in decline ... except

for select rural areas like the energy belt (in the Great

Plains), Lang said. If you have energy instead of agri-

culture, you have growth.Large metro areas those with total populations of one

million or more collectively grew twice as fast as met-

ros with populations of less than 250,000, according to

the Census Bureau. Nearly one-third of all Americans

now live in one of the 10 most populous metros led

by New York (19,949,502), Los Angeles (13,131,431)

and Chicago (9,537, 289).

Greater Houston Convention and Visitors Bureau

Courtesy of ExploreAsheville.com


7/68WINTER 2015

As large cities and metros grow, many are morph-

ing from collections of disparate municipalities,

organizations and special interests into productive

networks with common goals, said Jennifer Bradley,

a researcher at the Brookings Institution and co-author

of the book, Te Metropolitan Revolution: How Cit-

ies and Metros are Fixing Our Broken Politics and

Fragile Economy.

Te public and private entities within cities and metros

understand they are stronger together than separate,

Bradley said. You see people getting beyond this idea

of silos.

o maintain a healthy rate of growth, said Brad-

ley, cities and metros need to expand exports, foster

innovation, develop a skilled workforce and take a

multi-sector approach to problem solving. Tis is

our research-based hypothesis about how they can

have a sustainable approach to the future, she said.

Ages and stages

Young and well-educated adults are among the most

mobile Americans. Where they choose to live is impor-tant to an areas economic success because they are the

workers that many businesses want and because the

location decisions they make early in life can deter-

mine where they will put down roots for the long run.

It appears from at least one study that most are choos-

ing to live in large metropolitan areas and that they

prefer close-in urban neighborhoods.

All this comes from Te Young and the Restless and

the Nations Cities, a report by City Observatory, a

Portland, Ore., think tank that analyzes population

data. Te report explores the 2000 to 2012 migration

patterns of 25-34-year-olds with a bachelors degree

or better.

Te report found that two-thirds of the young and

restless were living in a metro area of one million or

more in 2012. It also found that the number living

in close-in neighborhoods increased more than twice

As large cities and metros grow, many are morphing

into productive networks with common goals,

as much as the number living outside close-in neigh-

borhoods 37.3 percent to 16.7 percent between

2000 and 2012.

Te metros where the young and restless population

grew fastest between 2000 and 2012 were Houston

(49.8 percent), Nashville (47.6 percent), Denver (46.6

percent), Austin (44.3 percent) and Portland, Ore.

(37.3 percent).

In a new report for the Center for Community Prog-

ress called Whos Moving to the Cities; Who Isnt:Comparing American Cities, researcher Alan Mallach

looked at the distribution of adults with a bachelors

degree or higher by age group in 2000 and 2012 in

24 major U.S. cities. Te research found that most of

the cities studied were attracting these college-educated

millennials, but not all of them. Te key magnets for

millennials were San Francisco, Seattle, Boston, Wash-

ington, D.C., Austin, Portland, Atlanta and Miami.

Courtesy of Visit Denver


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8 ON COMMON GROUND

Also attracting significant numbers of millennials were

the post-industrial cities of Baltimore, Philadelphia, Pitts-

burgh and St. Louis. Lagging in drawing millennials wereDallas, Phoenix and Las Vegas.

Te study also found that none of the cities studied

showed trends toward urban living among college-edu-

cated adults 45 or older, highlighting the fact that the

shift toward cities is a young persons movement.

Carolina comes on strong

wo North Carolina metro areas, Charlotte and Raleigh,

made headlines this year when they were projected to be

the fastest-growing major metros (500,000 or more) in

the country between 2010 and 2030 with cumulative

population gains of 71 percent each.

I was kind of surprised to find that, said John Chesser,

a population analyst with the University of North Car-

olina Charlotte, who sifted numbers from a UnitedNations world population report to come up with

the projection.

What isnt surprising is the rest of Chessers list.

Te next 14 fastest growing metros are all in the

South and West led by Austin, Las Vegas and

McAllen, exas. North Carolinas neighbor, South

Carolina, has two metros on the list, Columbia and

Charleston-North Charleston.

Te Raleigh metro is part of the Research riangle

anchored by three major universities, Duke, NorthCarolina and North Carolina State. Corporations

are drawn there by the universities and the highly

educated population, creating a strong and stable econ-

omy. Te universities also drive an attractive arts and

entertainment scene.

In terms of development patterns, Raleigh is growing a

little bit all over the place, said Mollie Owen, president

of the Raleigh Regional Association of REALORS.

Raleigh is growing a little bit all over the place, which includes

condos downtown, infill neighborhoods and surrounding small towns.

Photo by James WillamorPhoto by Dan Reed


9/68WINTER 2015

Tat includes condos downtown, infill neighborhoods

within the Interstate 440 beltway and in surrounding

small towns, she said.

Dont mess with Texas

Seven of the 15 fastest growing cities with populations

of 50,000 or more are in exas based on 2012 to 2013

data including three of the top four. San Marcos (8

percent) is number one and Frisco (6.5 percent) is num-

ber two. Cedar Park, exas, (5.6 percent) is number four.

exas also placed two cities among the top five in terms

of numeric growth. New York is number one with

61,440 new residents followed by Houston (35,202),

Los Angeles (31,525), San Antonio (25,378) andPhoenix (24,843).

Te fastest growing metro areas from 2012 to 2013 were

Te Villages, Fla. (5.2 percent), Odessa, exas (3.3 per-

cent), Midland, exas (3.3 percent), Fargo, N.D. (3.1

percent) and Bismarck, N.D. (3.1 percent).

Houston-Te Woodlands-Sugar Land, exas (137,692)

led metro areas in numeric population growth from 2012

to 2013 followed by New York-Newark-Jersey City,

N.Y.-N.J.-Pa. (111,749), Dallas-Fort Worth-Arlington

(108,112), Los Angeles-Long Beach-Anaheim (94,386)and Washington-Arlington-Alexandria, D.C.-Va.-Md.-

W. Va. (87,265).

Where the good times roll

Te 10 fastest growing economies among the 100 larg-

est metro areas are all in the West and South, according

to a report from the U.S. Conference of Mayors. Te

top five based on 2013 data: Austin-Round Rock-San

Marcos, exas (4.6 percent), San Jose-Sunnyvale-Santa

Clara, Calif. (4.2 percent), Nashville-Davidson, enn.

(4.2 percent), San Francisco-Oakland-Fremont, Calif.

(4.1 percent) and New Orleans-Metairie-Kenner, La.

(3.9 percent).

Te same report predicts where annual economic growth

is expected to be strongest through 2020. Te top 10 are

once again all in the West and South led by Austin-Round

Rock-San Marcos, exas (4.4 percent), Raleigh-Cary, N.C.

(4.3 percent), Fayetteville-Springdale-Rogers, Ark./Mo.

Seven of the 15 fastest growing cities are in Texas.

Courtesy of VisitHouston; Photo by Jim Olive

(4.2 percent), Riverside-San Bernardino-Ontario, Calif.

(4.2 percent) and Durham-Chapel Hill, N.C. (4.1 percent).

Seven of the 10 large metros (one million or more work-ers) where job growth was strongest in 2013 are in the

West, according to an analysis of U.S. Bureau of Labor

Statistics numbers from 2013 by Professor Lee McPhet-

ers at Arizona State University.

Riverside, Calif., is number one at 4 percent followed

by San Francisco (3.9 percent), Denver (3.6 percent),

Houston (3.5 percent) and Orlando, Fla. (3.2 percent).

Brad Broberg is a Seattle-based freelance writer

specializing in business and development issues.

His work appears regularly in the Puget SoundBusiness Journal and the Seattle Daily Journal

of Commerce.


10/68


By Brian E. Clark

When Sharon Leicham moved from

California to Memphis, enn., she

was looking for an artsy neighbor-

hood similar to ones shed known

in the San Francisco Bay Area.

Before her jump halfway across the

country, Leicham was living in the hills above Oakland.

And while that locale offered great views, shed grown

weary of having to drive pretty much everywhere to ful-

fill any of her daily needs. So being able to walk to shops,

work, the grocery store and entertainment was high on

her priority list for her next home.

Leicham says she found just what she was looking for

in the South Main neighborhood of downtown Mem-

phis. Always adventurous, her first apartment was in a

converted auto parts store that had cement floors with

holes that would fill with water when storms blew rainunder the front door.

Leicham, who has since moved up to a higher-end town-

house, is far from alone. Tousands of others are flocking

to downtowns around the country, according to figures

Downtowns are

trivinAround the Country

Being able to walk to shops, work, the grocery store

and entertainment was high on the priority list.

Courtesy of ThisisCleveland.com

(Above) Photo by William Reiter

(Right) Photo by Scott Meivogel

Below) Photo by Larry E Highbaugh Jr


11/68

from the U.S. Census Bureau. Tese core areas in manycities are particularly popular with young people in their20s and 30s and some empty nesters who are no longer

wedded to living where their kids can go to school.

In fact, according to census figures, downtowns havegrown at a faster rate than the suburbs over the past four

years. In 19 out of the countrys 51 largest metro areas,city center growth outpaced suburbs last year, a phenom-enon dubbed the great inversion by some demographers.Figures show that many cities grew more in the nearlyfour years since the 2010 Census than they gained forthe entire previous decade.

I wanted a more urban experience, so I took a leap offaith, says Leicham, a merchandizing consultant, writerand baby boomer. South Main, which is in the arts dis-trict, just caught my fancy so I decided to give it a try.Tis area really did remind me of some of the wonderful

little neighborhoods in Berkeley and Oakland that hadgrown up with good restaurants.

Tough she knows that some people who live in EastMemphis still wont venture downtown, she says shesnever felt unsafe and is pleased with her neighborhood.

So much so that she now serves on the Downtown Mem-phis Commission (DMC) and several other city boards.

Downtown is evolving in a positive way, she says.My neighborhood now has a dozen restaurants in a six-to-seven block area. Right across from my townhouse,400 units are going in. I think this area is a great place

to live, filled with lots of history and character. Teyrealso building lots of bike lanes, which makes it all themore attractive. I couldnt be happier with where I live.

Bill Frey, a Brookings Institution demographer, says thesurge in downtown population growth is due in largepart to the desire by young people and some boomers,too to live in core areas of cities. Te second reason,he adds, stems from the lingering effects of the mortgagemeltdown, which stalled the growth of suburbs.

Downtowns are attractive to young people who areextending adolescence and putting off getting married

and having kids, he says. Instead, they are investing intheir careers. Tis cohort has historically liked living incities because of the bright lights and night-time culture.In the past, theyd settle down after a time, have kids and

head off to the suburbs.

Thousands are flocking to downtowns around the country.

The surge in downtown population growth is due in large part to

the desire by young people to live in core areas of cities.

www.fickr.com/photos/josepha

Photo by Shannon Tompkins

(Above right) The South Main area is a revitalized neighborhood of downtown Memphis.


12/68

2 ON COMMON GROUND

But many of them are delaying this step. And I think

the jury is still out on whether they will eventually move

out of downtowns. A lot of it depends on what cities do

to get them to stay, like add schools for their children

when they eventually have them. Tat may be a lot to

ask, however. Most school systems are in tough fiscal

straights. But opening new schools would be a big plus

for downtowns.

Te mortgage meltdown of the past decade also altered

the housing market, which for decades favored the sub-

urbs over downtowns, he says. A lot of young people may

have seen their parents or acquaintances lose their homes,

making them reluctant to take on the debt and responsi-bility of owning. Instead, they choose to rent.

Tat meltdown seems like an old story, he says. But

were really not out of the woods with it yet in lots of ways

and places. Its part of the reason weve seen the flip in

the past two or three years where downtowns are grow-

ing faster than suburbs. If you look at the broad span of

time, some might say this is just a blip. Only time will

tell as the economy improves.

Frey also emphasizes that all downtowns are not alike.

San Francisco, Denver and Seattle are not Detroit, hesays, noting that while some downtowns are thriving,

some cities are struggling overall. Downtowns have been

attracting young people for some time. But over the past

few years, most cities in general have been doing better

because of generational preferences and the housing mar-

ket, which has kept downtowns holding onto people who

might have otherwise moved off to the suburbs.

Paul Morris, president of the Downtown Memphis Com-

mission, says the core area is growing much faster than

the rest of the city. Since 2010, the downtown has grown

by 7 percent, while the rest of Memphis has increased byjust 1 percent. He moved to the South Main neighbor-

hood in 2002 and drove to a suburban law firm to work.

He hated the commute.

Opening new schools would be

a big plus for downtowns.

As fast as housing units are

built, they get filled up. Photo by Tim Thompson

Photo by Tim Thompson

Historic Pioneer Square is Seattles oldest residential area, now

a major visitor attraction with restaurants, galleries and lively clubs.

Sunny, summer days can be well spent exploring the many

treasures and owers of Pike Place Market in Seattle.


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WINTER 2015

Right now, were at capacity for the downtown, says

Morris, who grew up in suburban Memphis, went to lawschool and worked for a time in Manhattan.

Tere are about 24,000 people living in our downtown

and wed have a lot more people if we had places to putthem, he says. As fast as housing units are built, they

get filled up. And its happening because the downtown

is awesome. I live here because I enjoy the vibrancy, the

activity, the diversity and being able to walk to a Broad-

way show, NBA basketball, professional baseball or 100

restaurants. Its just a great place to be.

According to DMC statistics, a third of downtown resi-

dents are aged 18 to 34, while those 45-plus make upanother 33 percent. Te smallest group are those from

35 to 44, who make up around 16 percent.

Where we are weakest is families with school age kids,

says Morris, who is 44 and whose children are 5 and six

months. When its time for them to go to school, wed

like to stay. In our downtown neighborhood there are alot of families with young children, so others are in the

same boat.

o keep the ball rolling, he said DMC is encouraging

investors to redevelop historic buildings to capitalize on

the character and authenticity of the downtown. We havemore historic listed buildings per square mile than most

downtowns. Were fighting blight and trying to repopu-

late areas that were depopulated in the 70s, 80s and 90s.

Were attracting with new restaurants and retail. Were also

incentivizing and spreading the word with marketing.

Joe Marinucci, president of the Downtown Cleveland

Alliance, said his city has experienced what he calls sig-

nificant growth in its downtown in the past few years

thanks to some major capital investments.

Weve had two major projects, one of which was a new,

$450-million casino in the core of downtown that openedin the spring of 2012, he says. Builders transformed

an abandoned department store into the Horseshoe

Casino, a joint venture between Caesars Entertainment

and Rock Gaming.

Te other big development was a new convention center,which cost more than half-a-billion dollars and replaced

one that was functionally obsolete and had ceased to

be an attractive venue for conventions for a long time,

says Marinucci. Yet another recent project is a

450,000-square-foot office complex called Flats East on

the Lake Erie waterfront.

As those projects were developing, we also saw a surge

in residential demand with a number of housing projectscoming on line, he says. Te good news now is that we

have about 12,500 people who live downtown, and thatsa 60 percent increase since 2000.

During the same period, according to Census Bureau

figures, the overall city of Cleveland lost 6,702 residentsin what demographers say is a 60-year trend. Te citys

total population is now roughly 390,000.

In the heart of Cleveland, however, Marinucci says devel-

opers cant build apartments fast enough.

Downtown Memphis is growing much faster than the rest of the city.

Developers cant buildapartments fast enough.

Photo by Sean Marshall


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4 ON COMMON GROUND

Right now, we are running at about 98 percent occu-pancy in terms of our downtown portfolio, he says. Wehave a number of other projects in the pipeline that appealto people who want to live, work and play downtown.

Te city also landed the Republican National Conven-

tion for 2016 and has five new hotels under construction.When finished, that will add 2,000 rooms for a total of5,500 in the core, he says.

All these factors are coming together to create themomentum that we are experiencing right now, he says.

And the city got another big boost this spring when bas-ketball star LeBron James announced he would return tothe Cavaliers which plays in the Quicken Loans Arenain downtown Cleveland.

We have a very strong amenity base in our core. Weare probably one of the very few downtowns in Amer-ica where you can literally walk from your office or yourapartment or condo and go to three major sports facilitiesand never get into your car. In addition to the Cavaliers,the Cleveland Indians are in the Gateway complex whichis in our downtown and the Browns play downtown as

well. We also have the second-largest theater complex inthe United States, outside of the Lincoln Center in New

York, with 29,000 subscribers and 10 stages in the com-plex. Were continuing to push the envelope to attractmore people to this area.

Marinucci said downtown Cleveland is especially popu-

lar with millennials who want to live and play close towhere they work.

Tey are much more interested in walking and biking

and are more apt to use public transportation than auto-

mobiles, he says. Weve had a 68 percent increase in thenumber of 25- to 34-year-old college grads moving intodowntown. But were also seeing empty nesters moving

into the area. In fact, our expensive product is leasing ata faster pace than others because boomers and retirees

want to be down here, too.

Marinucci says the opening of a 33,000-square-foot gro-cery store in an old, domed bank building, complete

with a iffany glass ceiling in its rotunda, new parks anda business development center that has attracted 30 newcompanies and 5,000 tech jobs should keep downtown

Cleveland growing. He says he hopes Cleveland Metropol-

itan School District will open a magnet or charter schoolcampus downtown to serve the children of residents.

Our challenge now is to create amenity bases or pack-

ages that will help those families make the decision tostay downtown, he says. Schools definitely need to bepart of our future.

In the northwest corner of the country, Seattles down-

town population has surged to 65,000, up 7 percent in the

Downtown Cleveland is especially popular with millennials

who want to live and play close to where they work.


Progressive Field in downtown Cleveland


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WINTER 2015

past five years. Jon Scholes, vice president for economic

development and advocacy with the Downtown SeattleAssociation, says the key to that growth was changes in

zoning that allowed for taller buildings to be constructed

in the city core.

We also believe we have the right fundamentals that

every downtown strives for: a great natural setting, a great

transit system, a lot of amenities and strong job growth in

downtown since the end of the recession, he says. Ama-

zon.com, which moved its urban campus into the South

Lake Union neighborhood of downtown in 2010, is really

driving a lot of the economic activity. Amazon doesntrelease employment numbers, but Scholes estimates it will

have a whopping 30,000 workers in downtown Seattle

when its two office towers planned and under construc-

tion are filled.

As in other cities around the country, he says its both

young professionals and empty nesters who want to live

in the citys core. Roughly a third of the people who

live downtown now are between 25 and 34 years old,

a significant increase from the past decade.Tere are a lot more families with kids, too, he says. Itsnot a huge percentage of the population, but the growththere has been very strong. Tere are now about 3,000kids under the age of 18 in downtown. We expect thatnumber to continue to grow. Unfortunately, we donthave a public school downtown, so were working withthe school district to locate a K5 school here. Tat is abig priority of ours. Weve seen other downtowns aroundthe country in recent years get public schools developed,so we are kind of behind the curve with that here.

A 45-minute bus ride to get to a school outside of down-town is not a popular idea. In some cases, kids are nowgoing to schools that are outside downtown, which sortof defeats one of the purposes of living here. We knowif we want to keep young families, we need to havea public school.

Scholes says his group tracks a lot of data. Four key met-rics that are strong indicators of the downtowns health arenumber of residents, workers, total taxable sales for retailand total taxable sales for entertainment, arts and sports.

We coin that live, work, shop, play, he says. In each

of those areas since 2009, we are increasing market sharerelative to the region. Te rate of growth for population,employment, taxable retail sales and then spending onarts and entertainment is about twice the rate that we areseeing in the surrounding metro area. Tat wasnt the casea decade ago, as far as employment goes.

Te suburbs were gaining jobs then and we were sort ofholding steady. Tats completely flipped and its what isdriving a ton of the investment and population growthdowntown. Everywhere you look around here, you see

construction cranes. And four more other big employersfrom the suburbs south of Seattle have announced they are

going to relocate downtown. Tats an impressive shift.

Brian E. Clark is a Wisconsin-based journalist and

a former staff writer on the business desk of The

San Diego Union-Tribune. He is a contributor

to the Los Angeles Times, Chicago Sun-Times,

Milwaukee Journal Sentinel, Dallas Morning News

and other publications.

Downtowns strive for a great natural setting, a great transit

system, a lot of amenities and strong job growth.


Cleveland Metroparks Edgewater Beach


16/68


By Christine Jordan Sexton

Aresurgence in new construction

is happening across the coun-

try, but its not being fueled just

by traditional home construction.

Instead its multi-residential hous-

ing units leading the way in what

may be a growing and potentially lasting trend in the

21st century.

As the nation recovers from the Great Recession, a look

at recent housing numbers are encouraging.

Information released jointly from the U.S. Depart-

ment of Housing and Urban Development and the

United States Census Bureau on October 17 shows

the number of permits issued in September for pri-vately-owned housing units was 1.5 percent higher

than the number of permits issued in August and

2.5 percent higher than the number of permits issued

in September 2013. Te government reports on per-

mits because they are considered a good indicator of

future building growth.

Likewise, the number of housing starts in September

this year was 6.3 percent higher than the previous

Multi-residential housing units are

leading the way in a growing

and potentially lasting trend.

The Rise of

MultifamilyHousingMultiple-family residences are

dominating new construction

Photo by Mike Madrid

Photo by Dan Reed

Photo by Dan ReedPhoto by Dan Reed


17/68

month and was 17.8 percent higher than the number of

starts in September 2013.

Housing completions, too, were up in September 2014 toa seasonally adjusted rate of nearly 1 million. Tats a 31.3percent increase from September 2013.

But a closer look inside the numbers shows that a lot ofthe growth in new construction is due to a spike in multi-residential construction.

New multi-residential construction in 2013 the latestavailable annual figures increased 25 percent from the

previous year, while single-family housing for the sameperiod increased 15 percent.

Indeed, larger multi-family units, with 5 or more units,accounted for half of the number of housing units autho-rized in 2013 in the District of Columbia, New York, North

Dakota, New Jersey and California.

And in 2012, the growth in starts for residential unitsincreased a whopping 37 percent from 2011, while sin-gle-family housing starts increased by 24 percent for thesame period.

Tough annual figures arent available for 2014, a reviewof the first and second quarters indicate the trend in new

multi-residential isnt going to change.

Te trend to build multi-residential isnt surprising to CarlFrinzi, senior vice president of multifamily housing for Bal-four Beatty Construction. Balfour Beatty Construction isthe third largest multiuse builder in the nation and, accord-ing to the companys website, has produced 11,000 units

over the past five years.

Demographics is destiny Ive often heard. And the pref-

erences of young people for renting and this type of livingdefined that destiny and is a big reason for the trend, saidFrinzi, who has 25 years experience in multifamily residen-tial construction.

Millennials or the 34 and under age group are choos-ing to rent instead of buy and more are choosing city life

over suburbia, studies show.

Mike Rouse, M.D., is renting a remodeled loft in downtownKansas City, Mo. Fresh from finishing his internal medicineresidency, 30-year-old Rouse said he initially rented becausehis schedule was varied while he was finishing his residency.He didnt want to worry about what he considered two

down sides of homeownership: yard work and home repairs.

He gravitated downtown because the location gives himquick access to the two hospitals that serve the city res-

idents. Tat was a major deciding factor when I wasinitially looking, he said.

It also has access to the major highways which can maketravel easier for any purpose, Rouse added. Lastly, I amable to walk to downtown venues such as Power and Lightor other events which is nice when the weather permits.

National Apartment Association President Doug Culkinsaid his group has noticed a trend to build apartments indowntown and urban areas in order to mostly appeal tomillennials such as Rouse.

An urban core really appeals to young professionals who

are saving a lot of time that would otherwise be spentcommuting to work or the city on the weekends from

the suburbs, he said.

Tats not to say that all new construction is in the urbancore. Frinzi said a well-located suburb close to a job center such as a university or state college is also a prime

place to build a multi-residential project. It will be sup-

ported by investors, he said, and easily filled with tenants.

New multi-residential construction in 2013 increased

25 percent from the previous year.

Millennials are choosing to

rent instead of buy.

Photo by Dan Reed


18/68

8 ON COMMON GROUND

If anything, traditional real estate fundamentals aregoverning even more strongly in this (building) trend:

location, access, proximity to work. Perhaps the biggest

change is a return to those fundamental market drivers

through the eyes of the customer, he said.

While millennials are attracted to apartment living they

arent the only ones gravitating toward rentals.

A recent study conducted by Harvard and AARP shows

there is and will be demand for well-located afford-

able housing for older Americans.

Te report Housing Americas Older Adults, Meeting

the Need of an Aging Population notes that younger

baby boomers in their 50s arent as financially stable as

their parents. Tey have lower incomes than their parents

as well as less wealth and homeownership. Additionally,

they are less likely than their parents to have children,

meaning they dont have anyone to care for them as they

age in place.

For these people, affordable apartments located near tran-sit hubs are a must, the report notes.

Te HUD/Census data show that 23,000 age-restricted

units were started in 2013 or about 8 percent of all units

under development. Age restricted developments in the

North and the Midwest outpaced the national average.

Perhaps the largest driver of multi-residential housing has

been student housing, where residents are charged by the

bed not the unit.

Culkin said the amenities in the student-housing sec-

tor run the gamut from modern gyms to resort pools

and fire pits.

Some of the student housing product out there today

is amazing true luxury living and it is easy to see why

that would appeal to a college student, he said.

Te online publication National Real Estate Investor

flagged cities in Florida, Georgia, exas, and California,

as well as Philadelphia in its op 10 list of hot markets

for student housing investments. Four cities in Florida

ampa, Orlando, Gainesville and allahassee were

cited as good investment opportunities with allahassee

home to Florida State University, Florida Agricul-

tural and Mechanical University, allahassee Community

College and branches for Keiser and Flagler universities

topping the list.

Floridas state capital is considered an all out college

town, the online publication notes, describing allahas-

see. Over the past year, it saw about $173 million instudent housing sales.

While it varies with the demographics, Frinzi said the

growth in market rate multifamily residential and stu-

dent housing generally has outpaced the growth in new

construction for senior multifamily residential or afford-

able multifamily residential.

But the trend in both, he said, referring to senior and

affordable multifamily residential is still upward.

There is demand for well-located affordable housing for older Americans.

Photo by Mike Madrid Photo by Greenbelt Alliance


19/68WINTER 2015

Frinzis assessment is underscored by data collected by the

National Association of Home Builders. Te NAHB gauges

market sentiment with its multifamily production index,

or MPI. Te MPI measures developers and builders per-

ceived interests in three areas: market-rate rentals, affordable

rentals and for-sale units. Scores in the 50s or higher indicatetheres a positive perception or that the market is improving.

MPIs across all three sectors of multi-family residential rose

in the second quarter of 2014, the most recent data available.

Te MPI for market-rate rentals increased by nine points to

68. Te MPI for affordable units increased by four points to

52 and the MPI rose two points to 56 in the for-sale sector.

A corresponding analysis the MVI tracks builders

and developers perceptions of vacancies. Again, the MVI

for the second quarter increased by one point to 38. Te

lower the number the less vacancies perceived.Culkin said despite the uptick in multifamily residential

housing, the market isnt in danger of being over-flooded

with rental choices.

Te apartment sector did not overbuild during the housing

boom, and then built nearly nothing for two years after the

market crash because no financing was available, he said.

Construction is now increasing but it still remains below

the levels needed to meet rising demand.

Vacancy statistics kept by the National Multifamily Housing

Council suggest hes right. Tere was a 9.1 percent vacancyrate in 2013, according to the group, and moreover, vacan-

cies are quickly filled. In 2012 the last year there is

complete data 63 percent of new units that came on the

market were rented within three months of completion and

81 percent were rented within 6 months of completion.

Frinzi said the flurry of multifamily building activity

and the willingness of Wall Street and conventional banks

to fund the projects actually dovetails at a time when

there are less skilled construction workers available.

Te combination, he said, has caused a lot of pushback onprice and construction costs are beginning to rise. We will

have to see how that plays out over the next several years.

Christine Jordan Sexton is a Tallahassee-based free-

lance reporter who has done correspondent work

for the Associated Press, the New York Times, Florida

Medical Business and a variety of trade magazines,

including Florida Lawyer and National Underwriter.

The trend for senior and affordable

multifamily residential is upward.

Construction is now increasing but

it still remains below the levels

needed to meet rising demand.

Photo by David Mayfeld

Photo by Dan Reed


20/68


By G.M. Filisko

P

op quiz: Name five of the fastest-growing suburban citiesin the country.

Give yourself a point if you came up with Frisco, exas. Add

another if you named Carmel, Ind. Ditto for Sugar Land, exas,South Jordan, Utah, and Franklin, enn.

Tese suburban cities are booming because theyre more than

suburbs. Teyre destinations for families and businesses. Teyve got char-acter and a uniqueness things so hard to find in the mass of cookie-cutterand strip-mall-dominated suburbs. Teyre also the result of diligent plan-ning. Finally, luck plays a part. Each of these go-go suburbs is located withinan economically healthy metro region.

Te leaders of these cities are not only planning the wisest ways to build

on their already-burgeoning populations. Teyre also planning to head offthe challenges that typically follow rapid growth. Only time will tell the

success of that planning, but theyre confident theyre on the right track.

No more blinking yellow light

About a half-hour due north of Dallas sits Frisco, exas, named in the pastfive years by both CNN and Forbes as one of the countrys best cities in

These suburban cities are booming because

theyre destinations for families and businesses.

Courtesy of PLACE Built Environment Centre

Whats Behind theFASTEST-GROWING

Suburban Cities in America?

The suburban

cities whose growth

is outpacing that of

their neighbors are more

than suburbs. Theyre

destinations to work,

play and live.

Carmel, Ind.

Courtesy of the City of Carmel, Ind.

Courtesy of VisitHamiltonCounty.com


21/68

which to live. Many people 136,000, at last count agree, pushing the citys growth rate from 2012-2013 to

6.5 percent, according to the U.S. Census Bureau. Before

then from 2000-2010 Friscos growth was a whop-

ping 247 percent, taking the city from 33,714 residents

to 116,989.

Maher Maso, the citys mayor, says its all been part of a

plan. When I moved here in 1992, we had 6,000 people

and one blinking yellow light and not much else, he

remembers. Our growth hasnt been an overnight thing.

Weve planned for it.

ony Felker agrees. Were aware and proud of the growth,

but theres a concerted effort to ensure the growth by itself

isnt the thing were most focused on, explains the pres-

ident/CEO of the Frisco Chamber of Commerce. We

want to make sure its smart, sustainable, and quality

growth, and growth in the right areas so its not some-

thing that gets away from us, becomes something we cant

manage, and eventually leads to issues.

For about 20 years, the city has guided growth through

a master plan leaders tweak every five years or so. Teyre

doing that now, says Felker, in particular evaluatingwhether to develop a majority of the city with residential

housing. Teyre also deciding what they want Frisco to

look like at buildout. Our timeframe is variable depend-

ing on annual growth, says Maso. Our estimation is that

well have close to 350,000 in population, and thatll be

in 15 to 25 years.

Maso says Frisco has also grown because its focused on

education. One-third of our growth has been below the

age of 17, and about 10 percent has been below the age

of five, he says. We have, on average, been adding three

schools a year, and for this school year, we opened five.One was a new high school, but well also open a new

high school every year for the next three years.

Te area also benefits from being in a natural corridor of

expansion for Dallas. Tat may be what has helped it attract

many professional sports teams, who arent just building

office and sports facilities in Frisco. Te city often creates

partnerships that allow local school kids to also play in those

facilities. In August 2013, the Dallas Cowboys announced

Frisco benefits from being in a natural

corridor of expansion for Dallas.

theyd build their corporate headquarters and training facil-ity in Frisco, and the Frisco school district will be able to

use the center for some sports events.

Finally, a critical component of the citys success is keep-

ing its small-town values, says Felker. It created Heritage

Village, where key older structures from old Frisco,

such as a church and log cabins, have been moved to

create a walkable community. A big draw is Babes

Chicken House, which serves family-style dinners in an

up-to-code structure that developers designed to look

ancient and on the verge of collapse. We want to remem-

ber our history and that this was a small town not thatmany years ago, says Felker.

Photo by Edward Mao

Babes Chicken House diner highlights Friscos small-town history

and is a big draw for residents and tourists.


22/68

2 ON COMMON GROUND

New development, however, inevitably pushes up against

tradition. Friscos leaders have worked to marry the two.

We used to have just one high school, and weve always

had a homecoming parade down Main Street, explains

Felker. People made floats, and everybody has come out.

As new high schools have opened, people began asking

whether thered be a parade for each school, or would the

city have to end its homecoming parade tradition? Tere

was talk that the parade was nice, but that we couldnt

have it anymore, says Felker. But several entities said

no to that, and weve now converted it to a communityparade. Well use it to tie the historic part of Frisco to

the new part of downtown. Were growing and chang-

ing, but we still try to keep a sense of history and those

things that make it feel like a small town.

A night on the town

Just north of Indianapolis is Carmel, Ind., which boasts

more than 86,000 people and an 8.5 percent growth rate

from 2010-2013, reports the Census.

Te city, which houses more than 50 corporate headquar-

ters, has long had a master plan. But when Jim Brainard

was knocking on doors in his run for mayor in 1995, he

heard a common complaint from residents, says Nancy

Heck, director of community relations and economic

development. Tey wanted places downtown where they

could go to dinner and a show.

When Brainard took office, he began creating that down-

town. Just north of our civic square, where things like

city hall and the fire department are located, was basically

a farm field, says Heck.

With that as a foundation, Brainard began planning for

whats now City Center, a mixed-use development that

opened with residential and commercial uses in 2010 and

New development inevitably

pushes up against tradition.

Photo by Edward Mao

Courtesy of Lifestylefrisco.comPhoto by Edward Mao Photo by Jamie Wallace

Frisco, Texas


23/68

WINTER 2015

restaurants and retail in 2011. Heck says eight more

buildings are still slated to open in the development.

Te city also had a low-traffic area called Old own.

Te mayor had heard about a lot of places making

arts and design districts and thought that would be

a good use for the Old own area, says Heck. Tevision for those two areas came simultaneously, and

now in the arts and design district, we have 10 gal-

leries all within a few blocks of each other.

Currently in the works is another mixed-use devel-

opment to fill in the space, called Midtown, between

those two hubs. It takes about 15 minutes to

walk from city hall to the arts district, says Heck.

Tis will be a way to have infill development and

make the whole area walkable without any industrial

section in between.

New music and theater venues have also really

enhanced the quality of life for residents, says

Heck. Tere once was no dedicated concert hall in

Carmel. oday, theres Te Palladium, which Heck

says has among the best acoustics in the world.

Across the green is another building with a 500-seat

and a 200-seat theater. We now have nine resident

companies for music, dance and theater that most

weeks are performing several shows a week, she says.

Tat really added a much-needed component to

the community.

But the story of Carmel wouldnt be complete

without a mention of the roughly 80 roadway round-

abouts the city added to replace stop signs and stop

lights during all the redevelopment. Residents were at

first flummoxed, but the city did a major education

campaign to ease concerns. Now its statistics match

national statistics showing a 78 to 80 percent reduc-

tion in accidents with injuries where roundabouts

have been installed, says Heck. Teres also been a

40 percent reduction in overall accidents.Te mayor has a degree in, and is a real student

of, history, adds Heck. Hes learned a lot about

building for quality of life, and he believes you lose

vibrancy when everybody works in your city and

then goes home to someplace else. But when you

have regular exchanges with others because you see

them more frequently, you enjoy life more and feel

more connected to your community.

New music and theater venues

have enhanced the quality

of life for residents.

Photos courtesy of the

City of Carmel, Ind.

Courtesy of the City of Carmel, Ind.


24/68

4 ON COMMON GROUND

A perfect storm in a good way

Exactly when the population of South Jordan, Utah,

began to explode is hard to pin down. Forty-year-old Dave

Robison, broker at goBE Realty and the 2014 president-

elect of the Salt Lake Board of REALORS, has lived in

the Salt Lake City suburb since he was four. He says its

steadily shifted from not having a gas station when he

was a kid to growing at a faster clip in the past 10 years.

A huge contributing factor, says Robison, has been

Daybreak, a master-planned community the National

Association of Home Builders has twice rated the nations

number-one housing community.

Brian Preece, director of commerce for South Jordan,

agrees Daybreak has been a factor, but says people often

overestimate its importance in South Jordans growth.

I think people give Daybreak more credit than they

should, he says. Weve been growing like crazy since

the 1990 Census, and during the last 10 years, Daybreak

has been only about half of our growth.

South Jordan went from a population of 12,220 to 29,461

from 1990-2000, says Preece. Tat number spiked to

50,418 in 2010. Now our guesstimate is that its about61,000, he says. I think its been because of good plan-

ning by the city. South Jordan has been growing because,

even before I came here just shy of 10 years ago, the city

required high-quality developments, both commercial and

residential, and it became the zip code of choice where

people want to live.

Robison says many factors have collided to bring growth.

You could say its been a perfect storm, he says.

Our population is increasing at a really high rate because

of the amount of kids all the families have. Te second

factor is Daybreak, which has a lake and a lot of ameni-

ties. More than 3,000 homes have been built there in the

last 10 years; theyve got condos selling as low as $150,000

and luxury homes priced at $1 million.

Robison expects Daybreak to have 10,000 homes within

10 years. But the development isnt for everybody. People

either love Daybreak or dont like it at all, says Preece. If

they dont like it, its because its designed to be a walkable

You lose vibrancy when everybody works in your city

and then goes home to someplace else.

Photo by PhotoDeanCourtesy of

Daybreakliving.com

Photo by PhotoDean

South Jordan, Utah


25/68

WINTER 2015

The citys leaders have a master plan

they review every few years.

community, but even in Daybreak, you pretty much

need a car. Its also higher density, and some peoplewant a one-third or half-acre lot and dont want to be

that close to their neighbors.

Lucky for them theres other housing in South Jordan,

even some thats affordable. Te next contributing fac-

tor to South Jordans growth is that our past mayor,

who specialized and worked his whole life in develop-

ment, did some really good things to make sure the

city had affordable housing, says Robison. Right now,

about 43 percent of all homes sold are on one-third

an acre or less. en years back, that number was less

than 25 percent.

Growth has triggered challenges. Te biggest, says Rob-

ison, is schools. Our schools are overcrowded, he says.

Tey have a lot of pods, which are portable rooms

that sit outside the school, for students. o fund the

school system, we need different types of development

including multi-housing and commercial which

would increase our tax base. If people dont allow

those types of developments, their property taxes will

have to increase.

Like Frisco, the citys leaders have a master plan they

review every few years. Leaders are currently address-

ing how to do infill development wisely, says Preece,

in addition to transportation issues. We have a high-

speed train [the RAX light rail system to Salt Lake

City] that runs through the east side of our city, but you

have to get in the car to get to the train station, he says.

We have buses, but theyre not convenient. Planners

are really focusing on getting people that last mile with-

out getting in your car.

Annexation spurs growth

Another city on the fast track is Sugar Land, exas,

about 20 miles southwest of Houston. It had a 6.5 per-

cent growth rate from 2010-2013 and now has more

than 80,000 people, reports the Census.

In 1960, our population was just over 2,800, says

Jennifer May, the citys director of economic develop-

ment. Really weve been growing for decades.

(Above) Courtesy of Daybreakliving.com

South Jordan, Utah

Photo by PhotoDean

South Jordan, Utah


26/68

6 ON COMMON GROUND

A good chunk of that growth has come through annexa-tion of master-planned communities, she says. In 2006,

Sugar Land annexed the Avalon community. It fol-

lowed that several years later by annexing the River Park

planned development.

Since then, however, all of Sugar Lands growth has been

organic. May says city estimates from 2004-2014 show

that about 60 percent of its population increase came

from growth, while 40 percent came from annexation.

Te biggest reason is our quality of life, says May. We

have really good schools; a very, very low crime rate; greatpublic spaces like an in-town square; and were actively

developing entertainment venues. Were now finalizing

the design on a 6,500-seat performing arts center. People

can literally live, work, shop and play here.

Growth has also come in part because of elfair, an in-

city master-planned community. Its one of the more

successful communities in the Houston area, says May.

Teres a lake, and there are trails throughout it. Tey

also have an incredible pool, a community center and afitness center. Teres a bridge within the development,

and it isnt just a bridge. Its a piece of art.

Te development is on former state prison property,

and it still includes one of the old prison buildings. Te

developer donated that building to the city, which then

spent about $6 million, says May, to create the Houston

Museum of Natural Science at Sugar Land.

As the city has grown, its become more diverse. Weve

seen a huge, huge increase in the diversity, with the major-

ity split between Asian Indian, Chinese, Vietnamese andPakistani populations, says May. Tat required a lot of

learning on the citys part to understand the different cul-

tures. We did a session for city staff to understand things

like the holidays our residents celebrate and how police

officers are perceived in various communities. But its also

giving us an opportunity to explain to residents, When

you call 911, this is what you can expect, and Heres what

to expect when you want a building permit.

Sugar Land has really good schools; a very, very low crime rate; great

public spaces and is actively developing entertainment venues.

Photos courtesy of Sugar Land, Texas


27/68

WINTER 2015

Te citys now working on updating its land-use plan toevaluate challenges arising from expansion. Infrastructure,

transportation and mobility are issues. As we have more

people and development, sometimes that can outpace

infrastructure updates, says Lisa Kocich-Meyer, direc-

tor of planning. We dont have any public transit, but in

some limited cases, we have pedestrian connectivity. Get-

ting people in and around the area has been a challenge.

A couple of years ago, we did a pilot program for a local

shuttle circulator during the holiday season. But it wasnt

well used because we have an abundance of parking, and

its free. Were still trying to figure that issue out. Here in

exas, people are still tied to their cars.

Preserving history is a big draw

About a half-hour south of Nashville lands you in Frank-

lin, enn., a city thats worked diligently to preserve its

historic center while attracting corporations like Nissan

and Healthways. Tat may be why from 2000-2010,

Franklin grew 49 percent, bringing its population to

66,000. It also grew at a 10-percent pace from 2010-

2013, when the Census counted nearly 70,000 residents.Much of the growth can be attributed to the work of the

Heritage Foundation of Franklin and Williamson County,

a historic preservation group that has focused on renewing

the use for many of the downtowns historic buildings.

It raised $8 million to create a 300-seat, multi-use venue

in the historic Franklin Teater, which opened in 2011

and features live music, theater productions and movies.

Te entire downtown encompasses a 16-block National

Register district, and its Main Street claims more than

150 buildings on the National Register. Te district isfilled with a mix of businesses ranging from restaurants

and antique shops to artists studios.

Te preservation community worked with the busi-

ness folks to redevelop the entire downtown Main

Street area, says Mayor Ken Moore, which involved

undergrounding utilities, upgrading infrastructure, and

for many of them upgrading the facades on their businesses.

Now its a place that people love to walk, have a cup

of coffee, have lunch, and also wed like them to goin and spend a little money.

Next up for the foundation: Te Old Old Jail. In

2013, the foundation purchased the historic art-deco

building from the city for $25,000 an amount

donated by FirstBank. Renovations are underway

to transform it into office space that will serve as the

foundations headquarters.

G.M. Filisko is an attorney and freelance writer who

writes frequently on real estate, business and legal

issues. Ms. Filisko served as an editor at NARs REAL-

TORMagazine for 10 years.

The preservation community worked with the business folks

to redevelop the entire downtown Main Street area.

Courtesy of VisitFranklin.com


28/68


San Marcos is nations fastest growing city

The key to the exas city of San Marcos burgeon-ing growth which expanded by 8 percenteach of the past two years, according to theU.S. Census Bureau isnt just location,location, location.

But it certainly doesnt hurt that this com-

munity of more than 54,000 occupies a sweet spot on

the Interstate 35 corridor about halfway between Aus-tin, the states capital, and San Antonio. Respectively,they are the nations 7th and 11th largest cities in thenation. Tey, too, are growing fast.

But why San Marcos? muses Daniel Guerrero, whohas been mayor there for four years. In addition toour location, there are a number of reasons. But Idhave to say exas State University is a big draw. Wealso have a lot of natural beauty and the cost of livingis significantly lower than some nearby communities.When you figure in the price of housing, it costs about38 percent less to dwell here than in Austin.

Moreover, our government regulations are reasonable,we have a business-friendly environment and we donthave a state income tax. All those things contribute.Other assets are our lively arts and music scene, plusan attractive downtown.

San Marcos companies also have access to an abundantand educated pool of potential employees.

If you draw a circle with a 45-mile radius from thecenter of San Marcos, it would encompass portions ofAustin and San Antonio, with a workforce of about 2.5million, he says. Tat territory would draw in 25 dif-ferent colleges, universities and technical schools that

generate a very diverse and enthusiastic workforce.Major employers in the city include the university, sev-eral hospitals and core industries that include advanced

manufacturing and materials, aerospace and aviation,clean technology, and corporate and professional oper-ations. In addition, the city is also home to the largestoutlet mall in the state, which draws a whopping 14million shoppers a year.

San Marcos downtown also has seen significantimprovements.

We recently invested $15 million to $20 million in

the redevelopment of our downtown to beautify itand improve it by redoing our lighting, restructuringsidewalks, improving roadways and making it safer forbicyclists, he says. Weve created a destination down-

town and densified it to make it a place where peoplewant to live, work and play. Its a historic area, so wehave done our best to be respectful of the preservationand history in our downtown community.

As the community has grown, steps have been takento add parks and protect the San Marcos River, whichflows through town.

Were trying to balance growth while holding ontoour unique character and whats near and dear to ourhearts as a community, he says. By protecting the

river and investing in greenspace, folks will still haveplaces to play for generations to come, not just workand do business. Certainly the investments weve madein our infrastructure and natural resources havent

been easy or inexpensive, but weve tried to be as pro-active as possible.

Photo by Don Anders


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Guerrero, who was born, raised and educated in SanMarcos, credits his predecessors in city government aswell as the folks who manage the surrounding Hays

County for doing a good job of planning for the areassteady expansion. He calls them enlightened.

One of the most positive aspects of that leadershipover a number of decades is that growth was antici-pated, he says. I dont think we knew the magnitudeor the timeframe of what the growth was going to be.But we saw all the factors and were prepared.

We havent had the explosive kind of growth that somecommunities in south exas have experienced becauseof the presence of the Eagle Ford (oil-and-gas-bearing)shale which has brought on a lot of positive things, but

also a lot of challenges, he says.

He acknowledges, however, that the city has a shortageof single-family housing though many multifam-ily units have been built in recent years. While SanMarcos population has increased, enrollment in publicschools remained flat over the past decade in part

because of what he calls false perceptions about thequality of the schools. But enrollment in the 7,200-stu-dent San Marcos Consolidated Independent School

District saw a surge of more than 500 students this year.

o plan for the future, district residents passed a $77-

million bond recently.

Over the past decade, San Marcos, Hays County and

the state invested greatly in roadways and wastewater

and other utility infrastructure. Te city is also the

lead investor in the regional economic development

engine known as the Greater San Marcos Partnership.

Adriana Cruz, president of the Partnership, agrees that

there is a tight inventory of single-family homes in and

around San Marcos, but she says that should be eas-

ing with new developments coming on-line. And she

praised local and county governments for spending

roughly $500 million on road and other improvementsin recent years.

Teyve done a really great job of handling this expan-

sion, she says. While other parts of the nation were

hit by the recession, we continued to have positive

growth with just some slowing down. I think well

continue to draw new residents and businesses here,

too. Fortunately, we seem to be doing a good job of

handling it a ll.

Courtesy of Rice University

Photo by Don Anders


30/68


By Brad Broberg

As municipal governments struggle to

balance their budgets, Joe Minicozzi

suggests borrowing a page from the

book Moneyball: Te Art of Winning

an Unfair Game.

Moneyball describes how Oakland As

general manager Billy Beane bucked conventional wis-

dom to build a winning baseball team despite havingless money to sign players. Rather than using traditional

statistics to measure a players worth, Beane dug deeper

into the numbers to find the stats that matter most and

acquire players whose skills were undervalued.

He challenged the way we think about baseball,

Minicozzi says.

Minicozzi, principal at the land-use consulting firm

Urban3 in Asheville, N.C., is all about digging deeper

into the numbers, too. But instead of trying to win a

World Series, hes helping communities improve their

bottom line by doing the math when making decisions

about where to focus development.

Tats my bumper sticker slogan do the math,

Minicozzi says.

Doing the math means taking a fresh look at how devel-

opment patterns drive a communitys tax revenues.

Rather than looking at the total tax production of a

given piece of land to gauge its economic performance,

Tax production per acre is

the best way to measure a

piece of lands relative value

to the community.

Minicozzi advocates looking at tax production per acre

as the best way to measure a piece of lands relative value to

the community.

Its the same principle people use to compare the fuel

efficiency of cars. People dont look at the total miles per

tank a car can travel to determine whether one car per-

forms better than another. Tey look at the number of

miles per gallon.

In case after case, Urban3 has shown communities that

they get more mileage i.e. tax production per acre

from development in their more dense urban centers than

Growing pnd Not OutThe fiscal benefits of higher

density development

Courtesy of Greater Houston Convention and Visitors Bureau; Photo by Julie Soefer


31/68

Information about the fiscal differences between various

development patterns is critical because decisions about

where and how to focus growth ripple through municipal

budgets in any number of ways, from the cost of con-

structing roads and providing police and fire service to

property values and tax collections.

Te studies that form the basis for Building Better Bud-

gets show what happens when municipalities do the

math. In Champaign, Ill., a study found that a smart

growth approach to future city development could save

$54 million in upfront infrastructure costs and $19 mil-

lion in public services costs over 20 years. And in Raleigh,

N.C., a study concluded that a six-story building down-

town produces 50 times as much property tax per acre

as the average Walmart store.

Te goal of the report isnt to tell communities what they

should and shouldnt do, Preuss says. Te goal is to helpcommunities make decisions with their eyes wide open

about the economic consequences of what gets built

and where.

Every community has the right to decide what kind of

development they want, she says. It comes down to

development in their less dense suburban fringes because

the land there is more highly utilized and highly valued.

If you look at the data, the data will tell the story for

you, Minicozzi says.

Asheville, N.C., is a good example. After Urban3s par-

ent firm, Public Interest Projects, converted the vacantAsheville Hotel into a mixed-use retail/residential prop-

erty, it ignited a wave of redevelopment throughout the

downtown that increased the taxable value of property in

the central business district from $104 million in 1991 to

$665 million in 2010. Te hotel, which sits on 0.2 acres,

generates $634,000 in property taxes per acre and $83,000

in retail taxes. Meanwhile, the local Walmart, which sits

on 34 acres on the outside of town, generates $6,500 per

acre in property taxes and $47,500 in retail taxes.

Urban3s work is part of a growing conversation about

the economics of development decisions. With municipal

budgets tight but expectations for public services high,

many local governments are under financial siege.

As Urban3s tax production per acre model suggests, smart

growth with its emphasis on urban infill and compact

development offers municipalities a way to glean a greater

return from their most important asset the land.

A 2013 report by Smart Growth America drives that point

home. Building Better Budgets: A National Examina-

tion of the Fiscal Benefits of Smart Growth examined

data from 17 previously completed studies from aroundthe country and found that denser smart growth devel-

opment patterns generate an average of 10 times more

tax revenue per acre compared to less dense conventional

suburban development. Te report also found that smart

growth saves municipalities an average of 38 percent on

the upfront cost of infrastructure and 10 percent on the

annual cost of public services.

I was disappointed at how few studies had been done

comparing different development types, but the outcomes

were so consistent that we are very confident about whatwe found, says Ilana Preuss, chief of staff at Smart Growth

America, an advocacy group based in Washington, D.C.

Building Better Budgets is the first report to combine

comparative data from multiple studies and calculate

national averages. Te response weve received is quite

remarkable, Preuss says. Local government leaders and

elected officials across party lines are looking for this kind

of information.

Information about the fiscal

differences between various

development patterns is critical.

Photo by Larry E. Highbaugh, Jr.


32/68

2 ON COMMON GROUND

giving local leaders clear and quantifiable information

about the fiscal impact.

A case study prepared specifically for Building Bet-

ter Budgets compares the costs and benefits of three

residential developments in the combined city/county

municipality of Nashville-Davidson County, enn. wo

are smart growth developments an infill development

in a brownfield location and a new urban development

in a greenfield location and one is a conventional

suburban development.

Both smart growth developments proved to be better deals

than the conventional suburban development. Te new

urban development cost 19 percent less in city/county

services per housing unit and the infill development cost

13 percent less per housing unit. Te infill development

generated 1,150 times more net revenue per acre and the

new urban development generated 148 times more netrevenue per acre.

Such findings seem obvious. Youd expect it to cost less to

provide services and infrastructure in a compact geogra-

phy versus a sprawling one. And of course a more densely

Smart growth developments proved to be better deals

than the conventional suburban development.

developed acre of land is likely to produce more tax rev-

enue than a less densely developed acre.

Even though its obvious, it has not been conventional

wisdom, Preuss says. People have assumed that if there

is a demand for (sprawl development), then whatever tax

you can get out of that is good. Any development was

good development because people wanted the tax base.

But that approach counted on federal funding to help

build infrastructure and on taxes/fees from new rounds of

development to maintain infrastructure and provide ser-

vices added during previous rounds. Like a Ponzi scheme,

it could only last so long. When the Great Recession hit,

poof went federal funding, poof went new development

and poof went tax revenues as property values in the sub-

urban fringe plunged.

We are in a day and age where there are limited resources

and [municipalities] have to spend their money wisely,Preuss says. A lot of places that built low-density devel-

opment for a very long time are finding they cant afford

to maintain the infrastructure ... because they cant gen-

erate enough revenue to cover the cost.

Photos courtesy of ExploreAsheville.com


33/68

WINTER 2015

People have never really looked at this stuff, Minicozzi

says. Why hasnt anybody done this before? Sometimes

the simplest stuff is the most difficult to get at.

ax production per acre is one half of the equation for

making economic comparisons between different devel-

opment patterns. Te other is the cost of providing

public services.

A lot of communities just look at revenue in a vacuum

without looking at cost, says Lee Sobel, director of public

strategies for RCLCO, a nationwide real estate consult-

ing firm based in Washington, D.C.

Using data collected from four cities, Sobel is creating a

model to help municipalities calculate and compare the

relative cost of services police, fire, roads, utilities

for different development patterns. For example, how

many fewer fire stations might be needed if growth is

tightly focused rather than spread out?

Its intuitive on some level. Tere are always efficiencies

that come with higher density. But its rarely [tabulated]

in a comparative way, Sobel says.

ogether with tax production per acre, cost of services

data can help municipalities weigh the long-term eco-

nomics of where and how they choose to grow. Sincethe Great Recession, a lot more communities are sensitive

to the impacts of growth on their budgets, Sobel says. I

think interest (in the cost of service model) will be high.

Some municipalities may use the information to adopt

policies that increase density such as encouraging infill

development to make more efficient use of existing infra-

structure, but they may also use it to determine whether

they can afford continued low-density development as

well, says Sobel.

Its not an all or nothing proposition. You can have both

kinds of development, he says. Youre just pointing out

that one does a more efficient job of paying for itself than

the other.

Brad Broberg is a Seattle-based freelance writer

specializing in business and development issues.

His work appears regularly in the Puget Sound

Business Journal and the Seattle Daily Journal

of Commerce.

Sprawls toll on a communitys long-term fiscal health was

diagnosed at least as far back as 1974 when the federal

government released a report called the Costs of Sprawl.

Yet conventional suburban development remained the

dominant form of development decade after decade.

People like the suburbs, but weve known how (prob-

lematic) they are since the mid-1970s, Minicozzi says.

He likens the nations unhealthy appetite for sprawl to

someone eating bacon every day. Were now paying the

price for all those years of eating bacon, he says.

Not everyone wants to change the menu. High den-

sity has always been tough for many people to swallow.

But the numbers dont lie about the benefits of density,

Minicozzi says especially in downtowns where the only

way to grow is up. As youre stacking up stories, youre

stacking up dollar bills, he says.

Urban3 uses geographic information systems technologyto make Minicozzis point in highly visual ways includ-

ing a dramatic three-dimensional model that visualizes a

communitys tax production per acre as spikes rising out

of the ground. Te taller the spike, the greater the tax

production at that spot on the map. Whenever Urban3

applies this model to a city or a region, the tallest col-

umns inevitably spring from the downtown core and other

densely developed spots such as transit stops.

The numbers dont lie about

the benefits of density.

Photo by Tau Zero


34/68


By Joan Mooney

T

he streetcars that many cities are building now

are very different from the ones that criss-

crossed the country in the early 20th century and not just because theyre air-conditioned

and wheelchair-accessible. Streetcar lines are

being built as catalysts for urban develop-

ment and economic revival. Tey are connecting to other

parts of a citys transit system, connecting neighborhoods

that were not previously connected and creating a new

cityscape in the process.

Modern streetcars have been in place for a while in

Portland, Ore., Memphis and Little Rock not cities

typically thought of as trendy urban centers. Seattle and

Dallas are adding second lines. Streetcar systems haveopened or will open this year in ucson, Atlanta and

Washington, D.C. Another 11 are planned for 2015 or

later in cities ranging from Fort Lauderdale to Milwau-

kee to empe, Ariz.Tere are 38 streetcars in cities around the country today,

up from just seven in 1980. And usually one of the goalswhen a city builds a streetcar successfully met in the

ones that have been built so far is to spur development.

ransportation and development go hand in hand andalways have, says Art Guzzetti, vice president of pol-

icy for the American Public ransportation Association.

Te current streetcar wave is back to the future becauseits hard to comprehend how much of urban American

life revolved around the streetcar from 1890 to 1930.

Tere was huge urban development in that era, largelyaround streetcars.

Streetcars are connecting

neighborhoods that were not

previously connected.

STREETCARsSPURRING

URBAN DEVELOPMENT


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Streetcars (also known as trolleys) have some definite

advantages over light rail. Streetcars are typically smaller,

lighter, less expensive than light rail and usually operate

in mixed traffic, rather than in their own exclusive rightof way, DC Streetcar writes on its website. Streetcar

systems can be built more rapidly, a

on common ground: winter 2015

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