Tuesday, November 10, 2009

Your Neighborhood Sucks and Soon Your School Will Too

First, from Kaid Benfield's blog at NRDC, where he discusses ULI/PriceWaterhouseCooper's newly released emerging trends in real estate, and wouldn't ya know it. They got it right.
In the near term, the report advises investors to "buy or hold multifamily" as "the only place with a hint of hope, because of demographic demand" as a large contingent of echo boomers seek their first homes.
I've talked for some time about the demand of the "communitarian" generation, eschewing the conventional factors for relocation (jobs) for things like diversity, sense of place, URBANITY. Clearly, they are the demand driver that will pull us out of this mess. As I previously wrote:

Boomers are retiring and desire the type of freedom found in ideal “retirement communities” like the Upper East Side or Key West rather than being “warehoused” in an actual retirement village. Millennials want to escape similar confines of suburbia for more authentic and diverse (yet affordable) experiences and ways of life.

I often say that cities progress from being Viable to Livable and finally to Memorable. To the City’s credit, they are undergoing several projects that would register as “memorable,” in some cases admirably so, but we still have not yet achieved livability (the hard part) in downtown (and this coming from a downtown resident).

We just need to put our brains together to make the numbers work for smaller residential space per resident (efficiencies or roommates) while getting land values and expected returns by current land owners back into the realm of practicality.

Interestingly, the report even arrived at conclusions that I had expected but not yet seen evidence of, at least locally, :
The report even questions the continuing supremacy of suburban school systems, noting that increasing numbers of them will start to falter as their supporting tax bases decline.
This is, of course, completely logical, as suburban schools are forced to compete for municipal dollars for their own student transportation infrastructure necessitated by the very thing they're competing against, the upkeep of overextended infrastructure for a too sparse (and increasingly less rich) tax base.

Conclusion, not everybody can afford all of those suburban houses that we've built. And, we're seeing that reality played out before us. As mentioned before, the demand for positive urbanity, which will create more localized and efficient economies, is there. We just have to define and overcome all of the barriers to the delivery of the supply to meet the demand.