Tuesday, March 17th, 2009
This is the latest installment in my series on “Building Suburbs That Last”. Essential background reading is in my review of Retrofitting Suburbia.
To reprise, the trouble facing America’s aging suburbs is likely to be one America’s top urban challenges of coming years. As suburbs age and fall into decay, they are abandoned for rejuvenated center cities or newer edge suburbs. As I previously asked, who is going to buy a beat up used car when you can get new car with a warranty for cheaper on the fringe? Nobody, which is why we see older suburbs falling into decay. If most newer, booming suburbs think their fate is any different when they get old, they are in for a rude shock down the road. The key is to figure out how to build suburbs that last, ones that maintain their appeal over time, and which are demographically, economically, and fiscally healthy for the long term.
I identified five key challenges that needed to be addressed to solve this:
- The strategic dilemma that, once full, there will always be a newer, more modern suburb to compete against on the edge.
- The problem of overdetermined form
- The 20 year depreciation cycle
- The accumulation of unfunded liabilities
- The fact that most suburbs are shadow cities
Today I discuss two strategies to deal with these: New Urbanism and parcelization.
I won’t speak much about New Urbanism since it is a well covered topic. If you want to know about it, the best place to start is the Congress for New Urbanism, which is run by former Milwaukee Mayor John Norquist. There is a ton of information on their site. One page you might particularly find interesting is the Charter of the New Urbanism, a sort of statement of principles. CNU is an advocacy organization, with all that implies, and certainly doesn’t have a monopoly on the concept, but I think they are a great first starting point. Another great way to learn about new urbanism is to buy Retrofitting Suburbia.
I would probably sum up new urbanism as about re-creating the urban form in the suburbs. That is, creating mixed use, walkable developments, with a well-defined sense of place, and usually with increased density. One nice thing I’d like to note about the new urbanism charter is that it explicitly says we also need to consider the needs of the car. The idea isn’t to create a car-free utopia, but rather to make sure developments provide equal footing to pedestrians and transit users.
New Urbanism is important because it helps solve the problem of over-determined form. If you think about a strip mall, for example, it is sort of hard to imagine it functioning as anything other than that. Most suburban development follow such a rigid “form follows function” model that it is difficult to have adaptive reuse of the space. Also, this overdetermined use is usually a single use throughout the development, which limits things further. This makes it very difficult to redevelop and reuse a building over time as older uses become obsolete.
Contrast this with, say, a traditional three story urban storefront building. You could have a variety of ground floor uses (retail, restaurant, entertainment, residential, office) as well as a multitude of upper floor uses (probably residential, but also second floor office space or an upstairs bar). It could be a live/work space. It could be totally residential. It could be many different things. It also generally features floor plates that are small enough that they don’t exclude lots of uses. Contrast that with a shuttered big box store. In short, this type of building is very flexible and adaptable to new uses over time. Indeed, these buildings are common in the inner city, and as they age, they turn over many times to new and different uses. The have staying power.
New Urbanism does something similar with modern structures. It creates an environment that is conducive to multiple uses, is accessible by multiple forms of transport, and is generally more adaptable over time.
I am not religious about new urbanism. I don’t think it is the one true way to build. I don’t think it is a moral imperative that we redevelop in this manner. But I do think this is a very useful development style and we probably ought to encourage more product like it, particularly for commercial nodes and neighborhood center or town center development.
However, I think New Urbanism as usually implemented today is incomplete. I think we need to extend the model of new urbanism using a technique I call “parcelization”. This is for two reasons: 1) to reduce the spikeyness of redevelopment and 2) to restore urban function, not just urban form, to the suburbs.
The authors of Retrofitting Suburbia devote a lot of ink to defending new urbanist redevelopment against the charge of being “instant architecture”. The criticism seems to be that you can’t just artificially create a city or thriving neighborhood zone all at once from scratch. Rather, it requires organic growth over time. These all-at-once town center developments can be seen as lacking in character, or Disneyesque. In defense, the authors go so far as to contrast these developments against the similarly rapid development of Morningside Heights in New York.
I actually think the defense of new urbanist instant architecture is pretty simple. The original suburbs that are being redeveloped basically came into being at all once in a pretty narrow time window originally. This means all that development gets old at the same time, requiring redevelopment more or less at the same time. Also, unlike those old urban storefront buildings, most suburban commercial space, especially the closer we get to the present, is made up of large, monolithic developments under a single owner. This makes it hard to redevelop piecemeal.
The challenge though, is how to break out of that vicious cycle. Because guess what? Today’s shiny new, very exciting new urbanist town center and neighborhood is all going to get old at the exact same time. Even where there are adjoining developments, it is likely they will be done in a pretty narrow window.
This fact of aging creates spikey redevelopment costs. Because many of these developments are also large and under single ownership, it also makes redevelopment very costly. It seems to me that most such redevelopments today are somehow subsidized with tax dollars. Even an extremely upscale suburb like Carmel, Indiana required TIF funding to redevelop its older core. This also limits the types of developers who can be involved. And of course, large developments are always more complex.
My idea for breaking out of this cycle is what I call parcelization. That is, we need to try to explicitly break up these large, monolithic, single owner complexes into smaller lots, possibly under separate ownership, and attempt to break the lockstep synchronization of development.
If you think back to our storefront example, you’ll notice that in most urban storefront districts there are lots of buildings on narrow street frontage, mostly with separate owners. They don’t all need to get redeveloped at the same time, and the size of the structures means that both many people can get in the game, and your are less likely to need subsidies. While even real, older urban neighborhoods tend to rise and fall as a unit, having fragmented ownership and many individual structures does flatten out the growth curve, and also provides for a diversity of business and development strategies, which is good for your overall hit rate for success.
In the current approach to suburban development, every 25 years or so you end up with a huge problem and a massive redevelopment liability. Through parcelization and desynchronizing development, you reduce this spikeyness, making your redevelopment challenge much more manageable. In a theoretically ideal world, your redevelopment cycle would be fairly flat, or with gentle waves, showing a constant, steady stream of development and redevelopment over time instead of massive “let’s start over” redevelopments every X years. (I should really graph this, but don’t have the time).
This also let’s us ride the technology curve over time, for example, to constantly be incrementally improving energy efficiency. And it always keeps some property being redeveloped to the current style (which, like fashion, is always changing), preserving appeal where a neighborhood of nothing but 20 year old structures wouldn’t. In short, we’re trying to make this not just look like a city, but start functioning like one in some respects.
Taking this further, the second reason to try to do this is to address the problem of suburbs being shadow cities. For more details on what I mean by this, see my article “The True City“. But in brief, most suburbs are like those small, branch-plant manufacturing cities. Their economic life force comes from outside. The commercial base is often made up, for example, of national chain retailers. This is good when you are in favor with them, but if your demographics slip, watch out. They will abandon you like yesterday’s news. I talked about the 20 year depreciation cycle. These developers create a cheap strip mall, lure in the national chains, all predicated on a 20 year or so business case. At the end of that time they can dump the properties and move on to greener pa$ture$, and any salvage value they get out of it is gravy. The town is left holding the bag.
If you are dependent on outside forces to animate your economy, if you have no internally generated economic life, then you are living on borrowed time even if you are nominally successful for a period of time. The way to combat this is to make sure you have indigenous industry. Most of these are small and medium sized enterprises. These are the types of businesses that, especially when they start, don’t have the financial heft to compete with national chains for space. And indeed, their business many not even fit with the format the mall developer wants.
Beyond just having greater access to capital, national chains have huge advantages over a locally owned business. I was talking about this the other day with someone who listed a few. Chain retailers can hold their trademarks in foreign low tax jurisdictions and shelter income by having each store pay royalties to an offshore entity. They get favorable merchandise return terms with manufacturers. Banks will extend credit against a signed lease from a big national chain, but often not against a lease from a new small business. The list goes on and on. Add it up and locals can’t afford to be in the type of “Class A” space national chains target. And if you redevelop your old decayed strip mall into nothing but new Class A space, you can basically only attract national retail unless the developer (perhaps at the behest of the municipality putting in funds) specially reserves space for them with rent concessions.
On the back end, as the space ages all together, the national chains and their drawing power abandon the area, and all the uses eventually become economically marginal, which isn’t healthy. You ultimately want a mixture of these types of uses. This actually can occur naturally if you have a mixture of building ages. The Class A space can support the latest and greatest chains. The Class B space can support newer, local, or more speculative businesses.
This should sound familiar to you since it is exactly how Jane Jacobs described a healthy city neighborhood. She says it better than I ever could: “Flourishing diversity anywhere in a city means the mingling of high-yield, middling-yield, low-yield and no yield enterprises.” And, “Time makes the high building costs of one generation the bargains of a following generation. Time pays off original capital costs, and this depreciation can be reflected in the yields required from a building. Time makes certain structures obsolete for some enterprises, and they become available to others.”
If you having nothing but high value buildings, no one but national chains can afford to invest. If you have nothing but low value buildings, no one wants to. It is important to have a mixture of buildings, supporting a mixture of uses, mixture of high, medium and lower values uses, and both national chains (which bring much good with them) and indigenous business. It is this diversity that again helps to mitigate against the failure of any one element. And also provides room for the local business that is both committed to the town and a source of at least some independent economic life.
Again, this is about making redevelopment not just look like a city, but also to some extent function like one. A new urbanist development that is nevertheless totally suburban in its economic functioning will not sustain itself over the long term and probably merits, to use a term someone else coined but I think is great, the opprobrium of being called a “Potemkin downtown”.
To restate, we should look to extend new urbanist development to include the concept of parcelization, which is about breaking up large, monolithic, single owner developments into smaller chunks that can eventually de-synchronize and be redeveloped independently over time.
Now, you no doubt see the problem here. What I’ve described is what every suburb out there wants to avoid. They don’t want to allow old buildings next to new. Many of the national chains would never stand for it. The idea of looking urban is bad enough for some, but the thought of urban functioning? Remember, people left downtown for a reason.
Also, a developer buys a failed mall and invests millions to redevelop it. Why would he want to sell parts of it to someone else out of his control, who might do things that are either competitive or harmful to his investment? Not an easy sell to be sure.
I won’t pretend this is an easy sell, or that there is a straightforward way to actualize it. But I think it is a potential add on to the way new urbanist redevelopments are often implemented today that I think merits serious study. New urbanism, in its traditional form, solves only the problem of overdetermined form. New urbanism, with parcelization, starts to chip away at the problems of the 20 year depreciation cycle cliffs and the shadow city phenomenon.
We certainly won’t get there overnight nor get it right the first time. I call this an extension of new urbanism because I don’t want to give the impression I think the current new urbanist approach is a failure. Quite the opposite, actually. If you think about the problem, you’ve got people who in many cases have spent all or the majority of their lives in an environment built in a purely suburban form and who may regard cities negatively. You’ve got a town government that has experience with nothing but the suburban form. You are not going to turn the dial all the way to urban overnight. Nor, frankly, is that likely the right thing to do. A more urban suburb is going to be a very different animal, ultimately, than the city properly so-called.
What today’s new urbanist developments are doing is starting on the journey. They are getting people accustomed to the idea of a more urban experience in the suburbs, and demonstrating that it won’t be the end of the world. As suburbs – including residents, businesses, developers, and governments – start to get more comfortable with this type of development, then additional steps can be taken. Parcelization might be one. More adventurous architecture might be another. More density might be another. It is going to take a while and a lot of experimentation to find the right balance and the right answers – and those answers will be different for different places. Unfortunately, what this means is that we might not get it right even this redevelopment go around. It might take another cycle to get there.
To wrap up, a couple of thoughts come to mind as I think about this. One is that older suburbs might actually find themselves advantaged over newer ones in redevelopment. They already feature lots of smaller office and commercial development, with lots of fragmented land ownership. At least one neighborhood group I’ve talked to thinks this fragmented land ownership is a barrier to redevelopment. And it might be in the short term. But in the long term it might be a very good thing. The newer suburbs, and regional malls in older suburbs, are where you are likely to see the monolithic developments. These are likely to be bigger redevelopment challenges as they come up for renewal. Thinking about, for example, the Lafayette Square area in Indianapolis, it is not surprising to me that many of the old, small strip centers along Lafayette Rd. are now full of ethnic businesses that liked the small storefronts, while Lafayette Square Mall itself remains an albatross for the neighborhood. In other words, you ain’t seen nothin’ yet. Just wait till our more modern suburbs start aging.
The second relates to the “spikey world” view as expounded by folks like Richard Florida, compared to that of his hero Jane Jacobs. Jane Jacobs said new enterprises usually require old buildings. That is, where rents are low and it is cheap to set up shop. The spikey world model tells us economic growth occurs where land values are highest. Interestingly, I think this is resolved by looking at what Jacobs described as the self-destruction of diversity. That is, over time, successful diverse district tend to increasingly concentrate in their most successful use, crowding out other uses. Then ultimately, lacking the vitality that diversity brought, those ares eventually declined.
I think about, for example, downtown Chicago. Could eventually the risky startup enterprise that isn’t backed by tons of VC money get run out of the Loop? It strikes me that the older buildings that would have provided cheaper rents are increasingly getting taken off the market by conversion to residential use. This is reducing the supply of low rent office space, though fortunately there are still several older office buildings around. I wonder if at some point, the entertainment and producer services businesses boosted by globalization, which can afford to pay premium rents, will ultimately crowd out other functions from the Loop, choking off its success and leaving it vulnerable when those functions are no longer as valued as they are currently.
As our urban cores become ever more pricey, artists, shoe string entrepreneurs, and others who are part of creating and essential part of real urban energy get squeezed out. Perhaps some of these inner ring suburbs could snarf up that talent? An empty big box could make some killer studio space. We already saw an abandoned mall in Indianapolis converted into a data center. If suburbs are willing to open themselves to a demographic and type of use they’ve previously shunned, maybe one day they could end up with the last laugh. At least, that’s something to speculate about.
Building Suburbs That Last Series: