Friday, July 29, 2011

Noodling Around July

Nood-ling (nōōd’lĭng) n. 1. Fishing for catfish using only bare hands, practiced primarily by crazy people who cannot afford proper fishing gear. 2. The intentional annoyance by bloggers who are skeptical of the news as it’s reported, as in “Noodling bureaucrats is more fun than fishing bare hand for catfish and a lot more surprising.” This is now an end of the month feature.

Apartments are Back
Even the Los Angeles Times has become aware that apartments are replacing for sale housing. They reported that multiple rental complexes, with a total of 1,000 units, were issued building permits in May. Considering the housing market in Los Angeles, the all but disappeared new home construction industry, and the growth of the region by 300,000 residents since 2000 (a 3.1% growth) it is not surprising. People have to live somewhere.

Bus Stop?
If you have been a reader of this blog for the past year, I don't have to repeat my skepticism about high-speed rail. For many reasons the whole idea should be shelved, in fact dumped would be a better solution. Yet San Francisco keeps pressing forward with its Grand Central Station of the west, the Transbay Transit Center. Putting aside its absolutely terrible signature sculpture and the billions to be spent before it’s done; there is also a very good chance they can't afford to run the trains to the building. Construction has been started, adjacent properties condemned and seized, traffic is a mess, and now there is no money to tunnel the one mile under the city to get the high-speed rail and the regional CalTrain to the station. Only buses to Marin, San Francisco (locals), and the East Bay will use the station when it's completed. It will be a very long time before the phrase “The train has left the station!” will be used.

And the Chinese high-speed rail system has its hands full dealing with the fallout from the bizarre official responses to the rail crash earlier in the week, the NY Times reports (see here). Seems that the Chinese version of Twitter called Sina Weibo is doing a better job of reporting the reality of the crash than the government. Now I know you’re shocked to learn that, but remember, there are only a small number of high-speed train manufacturers on this planet and some of them are Chinese.

City versus Suburbs
Joel Kotkin loves a fight and in his latest blog (see here), he adamantly believes that the growth in the suburbs will continue and even accelerate. This is contrary to academia, urban development programs, and the true believers in Sacramento who are fighting to protect the urban core. He says, to support his point:
This “strategy” seeks to all but reduce growth in the region’s lower-density outer fringe – eastern Contra Costa County as well as the Napa, Vallejo and Santa Rosa metropolitan areas — which grew more than twice as fast as the core and inner suburbs. Instead the ABAG-MTC projects a soaring increase in demand for high-density housing and its latest “vision” report calls for 97% of all the region’s future housing be built in urban areas, virtually all of it multi-family apartments, to accommodate an estimated 2 million residents.
I wonder what laws will be passed to make this happen? As always the pols and crats know better than the marketplace. Short of physically restricting the citizen through odious fees, permits, and legislation, the resident will do what is always in his own self-interest. This really ticks off the “official planners.”

Grayfields to Sub-divisions
This is not a new concept, but inter-urban areas as well as older edge industrial areas are more affordable now. It’s predicted by the Metropolitan Research center at the University of Utah that as many as 2.8 million acres of grayfields will be available for redevelopment by 2015. I’ll bet that none of them will have high speed rail but I can assure you that federal funds will be used to clean some of them up.

An Interesting Trend in Suburban Retail
The outdoor mall probably started sometime in early 8,500 BC when a couple of guys wanted to trade some rocks for a new-fangled shiny rock thing to another guy. That guy said it’s called copper and was named after his wife. The other guys said cool and rocks were exchanged. Then four sheepherders needed some rocks to teach another guy up the road a thing or two, so a sheep back then was worth three large, throwable sized rocks. The outdoor mall, the gun show, and the marketplace evolved from there. Later, maybe around 7500 BC, another guy figured he could rent out a chunk of land to these rock, shiny metal, and sheep guys and the shopping center was invented. Flash forward to the heady days of the post-World War II period and the open air shopping mall, then to the late sixties through to the early 1990s and the enclosed mall. Then to the New Urbanist’s dream of a town center in every master planned community, and then to what seems like a more permanent trend: the planned and gridded retail center modeled on the traditional Midwestern village grid pattern. I visited a newer version of this style in Jacksonville, Florida a few weeks back, the newish St. Johns Town Center (at least Simons didn’t spell Center with the affected Centre as seems the norm). On the West Coast we have Victoria Gardens in Rancho Cucamonga with a similar configuration. The pattern of these centers is a gridded street system, about 400 feet by 400 feet, parking in front of the stores, and service to the rear. Unlike the enclosed mall where substantive changes are very difficult, changes to these layouts can be block by block when needed. As the landscape and trees mature these modern agoras will develop into very comfortable places to shop and eat. It’s my guess you may see a lot of the old enclosed malls being scraped and this new look developed. This style also allows for other uses such as offices and residential either as stand alones or vertical mixed use.

Stayed tuned . . . .

Friday, July 22, 2011

And why does it have to be Texas?

Almost a year ago to the day, I declared that the master planned community was dead (click here). And now I read that there are Dr. Frankensteins putting electrodes to the necks of moribund and dead communities hoping to jolt them to life - in Texas. If there is one aspect of the development community that is never ending is their optimism, even in the face a dead market. I still maintain, as then, that this particular institution, these master plans, these new towns, these development prayers will remain dead for a long time. And I’m an optimist.

Sure, there may be a few sparks that ignite hope, but a sustained life will be difficult. The complexities of gaining approvals, entitlements, and funding are just a few of the obstacles to overcome. But it is the market, as always, that determines whether the carcass on the table will rise. We can go through all the political dancing and written reports and EIRs but, without the customer, nothing will succeed. Exceptions are very few to the point of being miracles when you see them. They are like Lazarus from the grave.

And why does it have to be Texas?

If you peruse the economic scene and push your way through the babble on the tube and elsewhere, something does seem to be happening, a spark is seen in the dark night. Where confidence is a strong, things can happen. While other states fight amongst themselves on how to wring and twist the last dollar out of their job creators, there are a few states with the clarity to see the opposite by encouraging business’s participation in their state’s economy. By keeping regulations within sane limits and watching how much silly money is spent, business will move toward them, like magnets that draw iron. They will make jobs, they will require housing and services, and they will need planned communities.

The process is more akin to shocking the body with low voltage over a long and sustained period, slowly awaking the beast. It is a methodical process with long term solutions in sight. Lightning strikes to tall towers may do great things for politicians but they do little for the long term economy.

And why does it have to be Texas?

As a Californian by choice, it is very sad and distressing to see how such a wonderful resource, California, is being squandered. We have become timid and fearful; we put off today hoping for a better solution tomorrow. We over regulate with thousands of associations, groups, councils, commissions, and boards. We are afraid to put the electrodes to the neck of the beast in fear of offending someone. We open little economic free fire zones, then pull the ammunition. We attack the redevelopment districts then offer nothing to replace them. We are so afraid that one group will get more than its “fair” share; so no one gets to eat. The whole state should be declared an economic free trade zone!

A client from out of state belittled and demeaned California. He effectively said it was done, toast, dead, put a fork in it. His friends from Jackson Hole, ex-Californians, only told tales of woe and how proud they were to escape. In my opinion they are quitters, they made their pile here in the state, put many of these wonderful politicians in office, then high-tailed it out here, wagging their fingers, clucking their tongues. Shame, shame.

And why does it have to be Texas?

There must be a slash and burn mentality in California, clear the deadwood, pull a Minnesota, develop a New Jersey attitude, find the swagger and the first-over-the-top leadership we once had. We are competing with every state in the union for jobs; in fact whole regions are competing with us. Be warned, understandings are being made between states, alliances are slowly forming, i.e. Illinois, Wisconsin, Indiana, Michigan; the southeast, and the northeast corridor. California is a state, a region, and an international competitor. It is an economy onto itself, but looks more like Greece or Portugal. It is much easier than we think if we can only get out of our way.

And why does it have to be Texas?

Think about it.

Stay tuned . . . .

Friday, July 15, 2011

Fact Finding

I am on a fact finding trip to north Florida and the regions around Jacksonville, I will return next week with updates and new information. Have a great week.

Stay tuned . . .

Friday, July 8, 2011

The Coming Sea Change

A sea change is a fundamental or significant transformation in life or business. In development it is where the form may be retained but the substance is replaced. Such as is the case with housing, we are moving from ownership to rental. Ownership has been shown to be fickle, unpredictable and unreliable. For home owners with ten years or more there is a collective breath-holding, a hope that values don’t drop. They have magic number in their equity and they watch the neighborhood comps like you might watch a stock in the stock market. “Please,” they hope, “don’t fall anymore.” Like a passenger on a boat taking on water, they pray to stay afloat.

Values are driven by the marketplace; it is the storm the home is tossed about on. The storm has taken many of its passengers, those left on board lift their eyes in trepidation. And the housing industry is watching. It’s in their collective genetics the need to build, to answer the marketplace. In the industry a home is call a product, no need to say more. For the last three years these builders have sat on the shore watching, they have seen the storm and the fear, they are now answering the passenger’s calls.

To rent is to remove a great anxiety from the shoulders of the home-seeker. Even the wealthy are shunning ownership; they are freeing their capital and releasing it from the guileful marketplace. While suburban foreclosed homes are now converting to rentals (horizontal rental complexes), it is in the cities and urban areas where remarkable events are changing the direction of the vertical landscape.

For years the development industry shunned the rental market. “No way am I building rentals, too much exposure, land prices are too high, can’t make it pencil. And besides who wants an 850 square foot apartment when you can own a 1,600 sf home for the same price. No, never. Never will build another rental, never.”

A sea change. . . . Land values have dropped through the floor in many markets, older office buildings can’t compete in the commercial lease market. Why pay $2.50 for Class C space, when you can get Class A space for the same price or significantly less. Commercial owners are under water, especially if they refinanced in the heady days of 2006. They, like the homeowner, are looking for life preservers and someone to help them out of their personal ocean of debt; they too are looking for a sea change. Many of their properties are in excellent locations, have good to great access to transit and are ripe for acquisition.

Cities recognize this as well; empty offices and commercial space do nothing for a community. Retail suffers, restaurants suffer, revenues drop. Conversion to apartments will help; they add vitality and density to urban centers and put butts on restaurant chairs. Whereas to sell out a condominium building might take years, rentals may fill faster. Neighborhoods are changed faster and for the better.

I also believe that the new rental market will be broader than last. It won’t be just inexpensive apartments under 1,000 sf; it will reach for the more affluent and offer 1,500 sf to 2,500 sf units (and maybe even larger). These complexes will cater to both the young professional and the empty nester and retiree. Better quality will be demanded, the industry will respond, they will have to.

Yes a sea change is in order. The ship is turning, but like a super tanker it is a slow and ponderous course change, but it will be a course hard to change.

In Shakespeare’s The Tempest the first use of the term sea change is found, for your pleasure:

“Full fathom five thy father lies,
Of his bones are coral made,
Those are pearls that were his eyes,
Nothing of him that doth fade,
But doth suffer a sea-change,
into something rich and strange,
Sea-nymphs hourly ring his knell,
Hark! now I hear them, ding-dong, bell."

To the development community: Do you hear the ding-dong, bell?

Stay tuned . . . .

Friday, July 1, 2011

The Fourth of July

As an urban and community planner I’m continually surprised and, yes, amazed at the goings-on at planning commissions and city councils. While often ridiculed and derided in the press and other media, these people spend a lot of their own time trying very hard to help make their communities better. For most, outside of Bell, California and a few others, it’s all volunteer service and a small per diem. And, contrary to opinion, it’s not some fulfillment of a deep seeded need to be loved or for power. With all the crap they put up with, the unconditional love from a dog would be more satisfying. What drives them? It is their strong desire to help move their city forward.

Often this is at great odds with my clients. Each comes to the negotiation with a different agenda, though both profess to support the other. On one hand is the project with its impacts, on the other is that this project will stay in the city long after the developer is gone. A balance and understanding is struck between the two, the project moves forward. Over the years I have watched appointed and elected public officials learn and grow in their positions, and I have watched clients become more understanding of a community’s problems and try to help. In good arrangements the result is a successful project, in great partnerships, the community changes direction, for the better.

Today’s blog is not going to list successes and failures, there has been far little of one and far too much of the latter these past three years, but I will offer an example. Earlier this week, we presented a dense urban project to a Bay Area city council for final approval. It had been through staff review and planning commission and now was in front of the council. A sticking point is the undergrounding of power-lines on one street frontage. It has been the policy of this city to underground all overhead lines. The wanted my client to pay for this even though these lines provided no services to the site. The cost would have raised the price of each house a minimum of $5,000. He objected, council understood but it was policy, client offered to split the cost, it is now under discussion. A final decision was put off for two weeks. Different goals by each side, yet an understanding by both that a solution could be reached. And much of this came from the council members themselves, they need the project but they need to support the underground policy. It will pass.

I know this is a mundane story. These processes happen thousands, if not millions of times in city chambers across America every year, it is not autocratic, it is a negotiated democracy. The failure in some communities to properly govern has thrown these decisions to plebiscites and the rule of the mob vote, which is sad and ultimately destructive.

Well back to the header, the Fourth of July. It is to these politicians, appointees, and volunteers I doff my three-cornered hat, and bow. I also raise my voice in “huzza” to their interest, their commitment, their energy, and their opinion. Yard by square yard, acre by acre, and section by section they have helped to grow America.

I also offer to you a movie tip for the Fourth. Every holiday has its movies, Christmas (the all-time favorite, hundreds of films), Thanksgiving (I think there are a few), Halloween (and please, just stop now with Halloween VII), Columbus Day (the Indians have had a serious issue with this since October, 1492, again hundreds of movies), and Groundhog Day (only one movie I can think of and it is on TV over and over and over). But there are a few movies for the Fourth of July. The first ones that come to mind always star Judy Garland and Mickey Rooney, then there’s Independence Day (over and over and over), all the historical movies (The Patriot, Drums Along the Mohawk, etc.), but my all-time favorite and a must see every year in the Randall house (like White Christmas), is 1776.

Done in 1972 and based on the play of the same name, our forefathers sing and dance their way to our independence. Historically correct, outside of the mass signing of the document and some of the delegate’s resumes, it is a fine example of visual history telling, staging and pomp. It also brings to life the greats of freedom, Jefferson, Adams, Franklin, Dickenson, and even Washington through his letters.

In one poignant conversation in the movie, John Adams and Ben Franklin lay out the fact they are only men:

John Adams: Mark me, Franklin... if we give in on this issue, posterity will never forgive us.
Dr. Benjamin Franklin: That's probably true, but we won't hear a thing, we'll be long gone. Besides, what would posterity think we were? Demi-gods? We're men, no more no less, trying to get a nation started against greater odds than a more generous God would have allowed. First things first, John. Independence; America. If we don't secure that, what difference will the rest make?

Again, hats off to those who give their time to our cities, Happy Fourth of July.

Stay tuned . . . .