I always admire anyone who spots a trend ahead of the curve. I.e. all of you who figured out FaceBook and Twitter could be revolutionary marketing tools before any uf us had profiles and those of you in anticipation of the housing bubble who had the where with all to get educated and branded before many of us even knew what a short sale was.
Can I get an Amen?
I realize I’m the resident “green” blogger but because Civic Design and smart growth are an integral part of the green building movement, I thought I should explain what it is and why it is quickly becoming the catalyst for recovery in many hard hit cities such as Detroit and Cleveland. First of all, here is wikipedia’s definition of smart growth for anyone who is unsure what it means: Smart growth is an urban planning and transportation theory that concentrates growth in the center of a city to avoid urban sprawl; and advocates compact, transit-oriented, walkable, bicycle-friendly land use, including neighborhood schools, complete streets, and mixed-use development with a range of housing choices. Smart growth values long-range, regional considerations of sustainability over a short-term focus. Its goals are to achieve a unique sense of community and place; expand the range of transportation, employment, and housing choices; equitably distribute the costs and benefits of development; preserve and enhance natural and cultural resources; and promote public health.”
Here is where it gets interesting. Brookings recently posted a fascinating article entitled “The Next Real Estate Boom” specifically addressing increasing consumer demand for walkable neighborhoods and latent lack of inventory. Their case is simply that if governments locally and federally restructured some tax incentives and subsidies already in place for developers who build in suburban districts in to more urban dense settings with a focus on integrating all of the elements of smart growth, jobs would be created and the housing industry would see a meaningful and sustainable recovery. The highlights for this rather bold assertion are as follows: (however I highly recommend you read the article)
- The Baby Boomers and Generation Y (their children) make up roughly half of the American population. Baby boomers are downsizing, while between 2013 and 2018 many Y’ers will be purchasing their first home. Both express walkable neighborhoods with commercial infrastructure and convenient transportation options as being a primary factor in the purchasing decision. 2008 fuel costs, longer work week, convenience, and social trendienss (i.e Y’ers grew up with Sex in the City and Friends rather then Leave it to Beaver or the Brady Bunch) are all factors in the preference.
- The great recession has highlighted a shift in American purchasing habits. In many cities, suburban homes have sold for less than the materials it took to build them. Urban walkable neighborhoods, while experiencing some loss in value even at the recession’s peak, it was half as much as their suburban counterparts.
- Walkable communities are shown to have a much healthier population than their more sedentary counterparts which could greatly improve with issues of health costs in the US. The focus on building with environmentally friendly and energy efficient components could/would spark a slew of manufacturing jobs which would put millions back to work and in a position to purchase homes again. Smarth growth would put less demand on utilities and other city services therefore freeing up more money for investment in services such as education which is incredibly underfunded.
Is there any evidence to support this theory?
Yep. Here is a quote from NAR’s 2010 home buyer survey. “Commuting costs and environmental efficiency have increasingly factored into home buying decisions due to higher energy costs, but also as appeal of growing overall concern for the environment. Commuting costs were at least “somewhat” important to 76 percent of home buyers. Heating and cooling costs were at least “somewhat” important to 88 percent of home buyers. energy efficient appliances and energy efficient lighting were “very” or “somewhat” important to a majority of home buyers.” Many of these questions weren’t even being asked 5 years ago.
NPR also had some recent discussion with city planners in some hard hit cities as Detroit, Pittsburgh, and Cleveland who have had major loss in mfg. jobs and loss of population. Cleveland is particularly interesting because they have been re purposing abandoned warehouses, factories, and homes in to agricultural plots with early success and seeing some resurgence in their core. Here is an interesting quote from the Mayor of Binghamton, NY who has also lost population in the recession.”if we don’t increase our people living in our city, we’re just going to keep batting our heads against the wall because cost of government goes up while we don’t have any – a lot of new revenues unless we get more people living in our city. But we’re really seeing a lot of investment in our downtown, a lot people coming back, especially young professionals, renovating old buildings and really getting a core back together again, which have been largely abandoned for the last 20 years.”
As I said at the outset, it’s the early adapters that get the worm. We as Realtors have a tremendous opportunity to be a catalyst in the recovery of the economy and of our industry simply by understanding where consumers want to be and taking an active role within our local associations and governments to advocate for these. Here are some exciting things happening in Nashville through our Civic Design Center and some accomplishments from this year which all have heavy focus on smart growth. Most cities have civic design centers, urban land institutes, and hopefully leadership who are already investing in this trend. Educating yourself, positioning yoursef as a legitimate advocate and expert, and becoming a part of the conversation with your local Realtor association and community leadership on the front end is in my mind, a phenomenal opportunity to be on the cutting edge of buidling a sustainable business stragegy that will pay off not just in the short term “what’s hot now” but for years to come.