Developer-Planner Interaction in Transportation
and Land Use Sustainability
JUNE 2002
Dr. Aseem Inam, University of Michigan
Dr. Jonathan Levine, University of Michigan
Dr. Richard Werbel, San José State University
a publication of the
Mineta Transportation Institute
College of Business
San José State University
San Jose, CA 95192-0219
Created by Congress in 1991
planning to modify behavior versus planning to accommodate preferences 6
does planning encourage density? 8
organization of the remainder of this report 16
literature review of existing research and major issues 17
alternative developments and obstacles 17
the market for alternative development 32
successful developments: case studies 43
unsuccessful developments: case studies 65
findings from literature review 85
appendix A: survery of experience with alternative development 95
abbreviations and acronyms 103
pre-publication peer review 112
National transportation policy faces a number of urgent imperatives, including mitigation of air pollution and greenhouse gas production, and coping with congestion in the face of constrained capacity to construct and expand roadways. Because of these concerns, research into the interaction of land use and transportation policy has focused on the capacity of alternative land use approaches--including transit villages, New Urbanist development, jobs-housing balance, and compact development in general--to moderate growth in vehicle miles traveled (VMT). These development forms are referred to collectively in this study as "alternative" development.
A number of current planning and transportation regulations may currently preclude the development of these alternatives. These regulations come in the form of zoning that seeks to lower densities and separate land uses and transportation regulations that specify ample roadways and large parking lots. These regulations, implemented by scores of communities in each metropolitan area, amount to a design template guiding and regulating both new development and redevelopment. It may be the relaxation of this design template--rather than the imposition of still stricter requirements--that is required in order for the land use alternatives to develop. The purpose of these development alternatives is not strictly the reduction of VMT. Rather, where land use policy allows for this kind of variation, it provides greater household choice among land use and transportation environments. While VMT reduction would be a desired side benefit, scientific uncertainty regarding these effects is an inadequate basis to exclude these alternatives by regulation.
This study argues that significant unmet demand exists for alternatives to conventional auto-oriented development; and further that planning interventions that restrict densities and land use mixing in developed areas are a major reason that this demand remains unmet. In order to explore these hypotheses, this study carried out two principal investigations. The first is a national survey of developers, randomly selected from the database of the Urban Land Institute in Washington, DC, the premiere national organization of land developers. Overall, the survey reveals considerable interest on the part of the private development community in developing in a fashion that is more compact than regulations currently allow. This interest varied by region, with the greatest interest expressed in the densely settled regions of the mid-Atlantic and the Northeast. Developers in the Southwest and South Central regions (Texas, New Mexico, Oklahoma, Arkansas and Louisiana) expressed considerably less interest in developing in a more dense or mixed-use fashion than permitted by current regulation. Similarly, interest in developing more intensely than current regulations permit varied by setting. Little such interest exists for development in rural areas, but developers' interest in such development in inner suburbs was especially keen.
The second investigation switched from a macro, national focus to four very local settings with case studies of actual development projects. The cases were located in California and in Michigan. Two kinds of case studies were developed in each state. A "successful" case was one in which the private sector succeeded in producing a development that qualified, in the judgment of the study's authors, as an alternative to standard auto-oriented suburban development forms. An "unsuccessful case" was one in which such developments were proposed but significantly modified as part of the planning process, in a fashion that reduced considerably their "alternative" character. The successful development case studies included Rio Vista West in San Diego, a Transit-Oriented Development (TOD) and West Village in Dearborn, Michigan. Unsuccessful development case studies included Whisman Station in Mountain View, California, a development adjacent to a Santa Clara County Transit light rail station whose proposed density was substantially reduced (by over 50 percent) in the course of the planning process. In Michigan, an unsuccessful case, Pembrooke Park, was studied in West Bloomfield Township, where a development proposed for 122 units to the acre was reduced in density by 50 percent in the course of the planning process. The two unsuccessful cases were characterized by a reduction in the numbers and types of housing units and in their affordability. In contrast, in the case of the San Diego development, the principles of TOD (if not the letter) were held, with different types of residential and retail uses at relatively high densities within walking distance of the station. A different situation held in the West Village project in Dearborn, where the original mix of uses, densities, and housing types were maintained at a much smaller scale and in a more pedestrian-oriented (rather than transit-oriented) context.
The arguments presented here are not intended to criticize land use regulation per se. Such intervention arose from early reformist activism aimed at unhealthful urban conditions, a concern that remains relevant today. But, these concerns aside, this research suggests that the tools are broadly misused to exclude some development forms (and by extension, the population groups that would inhabit them) from selected communities, and to preclude innovation in metropolitan transportation and land use patterns. They are not the only such barriers. As tools implemented by the planning profession, these regulations and their potential choice-constraining effects deserve more critical scrutiny by transportation and land use researchers than is currently evident.
National transportation policy faces a number of urgent imperatives, including mitigating air pollution and greenhouse gas production, and coping with congestion in the face of constrained capacity to construct and expand roadways. Largely because of this urgency, research into the interaction of land use and transportation policy has focused on the capacity of alternative land use approaches--including transit villages, New Urbanist development, jobs-housing balance, and compact development in general--to moderate growth in vehicle miles traveled (VMT). These development forms are referred to collectively in this study as "alternative" development, in that they constitute alternatives to the more common auto-oriented, low-density suburban development.
For the purposes of this study, alternative development projects possess one or more of the following characteristics: higher than usual densities in a suburban context, a mix of land uses in close proximity, a variety of housing types in the same development, pedestrian- or transit-oriented amenities, a range of different transportation modes, and easy accessibility to major regional destinations.
Considerable debate surrounds the issue of the impact of alternative development on travel behavior. Because of the impossibility of controlled experimentation in this area, the data remain open to a number of conflicting interpretations. On the one hand, residents of neighborhoods that are more compact, mixed in terms of their land uses, and amenable to pedestrianism and transit use do appear to consume fewer VMT than their counterparts in more auto-oriented and suburban neighborhoods. But this simple observation is complicated by self-selection; people may select neighborhoods to begin with at least in part on the basis of the transportation possibilities that these areas offer. The fact of self-selection does not negate any VMT-reducing potential of these alternative land use forms; in the absence of these development alternatives, even the household who prefers pedestrianism and transit use may have few alternatives to an auto-intensive lifestyle. But in the face of such methodological complexities, the prospects for resolving unambiguously the impact of alternative land use forms on VMT remain remote.
Some authors (Giuliano 1999, Crane 2000) have suggested that in the absence of reasonable scientific certainty regarding the influence of land use on travel behavior--or alternatively, doubt about the capacity to effect the massive land use changes that would be required to alter travel patterns significantly--these alternatives have a very limited role to play in transportation policy. This view implies that VMT reduction is the principal criterion by which these land use alternatives should be judged, at least as an element of transportation policy. That is, a failure in the VMT reduction test would undermine the rationale for the planning interventions that are presumed to be needed in order for these alternatives to arise. Thus some researchers, notably Boarnet and Crane (2001), have called for concerted efforts to understand the link between land use development and travel behavior better as a prerequisite to the formation of sensible policy based on this connection. Much of this current effort is documented in a review of over 50 current studies by Ewing and Cervero (2001).
While improved social-scientific understandings of the influence on built form on travel behavior are unquestionably called for, it is doubtful that scientific advances in this area alone will resolve the debate over land use and transportation policy. This is because both the policy interpretation of these findings and implications for public action depend intimately on the observer's theory regarding the paucity of alternative development to begin with. For example, one guiding notion is that the reason for the relative lack of alternative developments is weak market interest on the part of potential tenants and purchasers. An observer who explicitly or implicitly adheres to this theory might suggest that a prerequisite for public intervention would be the scientific establishment of the efficacy of these developments in modifying travel behavior and thus mitigating transportation's external costs. And the mode of intervention--should benefits be established with sufficient certainty--would be "market forcing" and might include regulations and subsidies to alter market outcomes fundamentally.
In contrast, others might suggest that it is regulatory obstacles--such as zoning, transportation standards, or NIMBYist sentiment that is played out through local government intervention--are at the root of the relative lack of such developments. To the extent that this theory holds, both the rationales for public attention and the modes of intervention would change radically. Removal of such regulatory obstacles would be designed to increase households' effective range of choice of land use and transportation environments; any scientifically established benefits in travel behavior modification would be seen as "icing on the cake" rather than the sine qua non. The mode of intervention would be altered as well; policy attention would not be based on market forcing, but would be aimed at removal of obstacles to such development, together with the designation and reservation of territory to facilitate critical masses of agglomeration of such developments. These policies would produce alternative development only in areas where land development market can support these alternatives. Interestingly, Giuliano (1999:20) suggests reducing zoning restrictions would increase development densities, though since this increase is presumed not to be sufficient so reduce congestion or VMT significantly, she does not view it as particularly relevant to transportation policy.
In practice, a number of current planning and transportation regulations may currently preclude the development of these alternatives. These regulations come in the form of zoning that seeks to lower densities and separate land uses and transportation regulations that specify ample roadways and large parking lots. In many cases it is not the rigidity of the regulations per se that constitute an obstacle to alternative development, but the willingness of the local decision makers to employ the regulatory function to exclude these alternatives. While mechanisms for altering regulatory obstacles abound, the political will to employ them may be in shorter supply.
Implemented by scores of communities in each metropolitan area, these regulatory frameworks amount to a design template guiding both new development and redevelopment. It may be the relaxation of this design template -- rather than the imposition of still stricter requirements--that is required in order for the land use alternatives to develop. While VMT reduction would be a desired side benefit, scientific uncertainty regarding these effects is an inadequate basis to exclude these alternatives by regulation. Where there is ample market interest in these alternatives, lack of proven benefit in VMT reduction would hardly be sufficient reason to exclude them; and where there is insufficient market, no land use regulation is required for their exclusion, as the discipline of the market accomplishes this much more effectively.
If land use and transportation choices have been limited by current regulation, remedying such constraints on choice would be highly relevant to transportation policy, quite independently of any demonstrated effects on VMT. This is because it would allow people to forge a closer match between their transportation and land use preferences on the one hand and choices on the other. We refer to this argument as a "choice-based" rationale for alternative development forms. Such a rationale rests in part on the notion that the private development market is interested in providing more alternative development than current regulations allow. Such desired growth may take the form of expansion in sheer numbers of housing units developed in a more compact, pedestrian- and transit-friendly fashion; in addition, it may take the form of more accessible locations for such developments. It is considerably more difficult, because of local opposition, to create an alternative development in the heart of an already developed community than in undeveloped territory beyond the metropolitan fringe. New Urbanism is a significant movement in contemporary American urban design, which draws its inspiration from 19th and early 20th century American towns, in terms of higher densities, mixed used, walkable distances, diverse housing types, human-scale architecture, and pedestrian amenities. This may imply a constraint on the supply of alternative neighborhood styles in particular locations, in addition to restrictions that may limit supply overall.
This study argues that significant unmet demand exists for alternatives to conventional auto-oriented development; and further that planning interventions that restrict densities and land use mixing in developed areas are a major reason that this demand remains unmet. If this notion were true, one would expect significant numbers of developers to express interest in developing in a more dense or mixed-use fashion than regulations currently allow. This should hold particularly in areas where development pressures are high, but where land use standards seek to restrict development to low density forms. This issue is explored here through a national survey of developers, randomly selected from the database of the Urban Land Institute in Washington, DC, the premiere national organization of land developers. Overall, the survey reveals considerable interest on the part of the private development community in developing in a fashion that is more compact than regulations currently allow. This interest varied by region, with the greatest interest expressed in the densely settled regions of the mid-Atlantic and the Northeast. Developers in the Southwest and South Central regions (Texas, New Mexico, Oklahoma, Arkansas and Louisiana) expressed considerably less interest in developing in a more dense or mixed use fashion than permitted by current regulation. Similarly, interest in developing more intensely than current regulations permit varied by setting. Little such interest exists for development in rural areas, but developers' interest in such development in inner suburbs was especially keen.
Planning to Modify Behavior versus Planning to Accommodate Preferences
Despite the constraints on alternative development forms posed by current land use and transportation regulations, one widely held view is that current low density, auto-intensive development is largely the product of the neutral accommodation of peoples' travel preferences. Under this view, alternative development, such as that proposed by the New Urbanists, represents directed intervention oriented towards conscious modification of individuals' travel behavior. For example, Boarnet and Crane (2001) argue that
(M)ost transportation planning of the first half of the twentieth century sought to respond to the rapidly increasing demand for automobile travel. This is importantly different from the more recent goal of using urban design to, among other things, change how people wish to travel. In the former instance, even if planners sought to transform cities and transportation systems, the key players viewed themselves as responding to changes in travel behavior that were caused by other factors, such as the popularity of the newly developed automobile. In the latter case of the more recent urban designs, the projects often have the more ambitious behavioral goal of seeking to change the desired travel patterns of some persons. (p. 185).
There is considerable evidence against the assumption that equates the development of alternative land use forms with directed governmental intervention. In many communities, the situation is reversed; regulatory structures in place are quite antithetical to development at higher than usual densities, and it is when that regulatory template for low density, auto-oriented development is relaxed that the more compact and accessible alternatives arise. For example, land use conflicts frequently arise on the basis of developers' desire to build more densely in highly accessible areas than allowed by local government general plans, zoning ordinances or negotiated agreements (Bogart 1998, Fischel 1985). Thus in the name of preserving local environmental quality such planning activities may, on aggregate, be limiting the supply of accessible residential opportunities.
It is important to separate conceptually the analysis of New Urbanist theorists from the on-the-ground reality of how alternative developments are developed or excluded. Many of the former will in fact argue for directed interventions for the express purpose of reducing people's automobile travel. But in implementation, New Urbanist designs and other alternatives referred to here are subjected to the discipline of the market; they can be provided only where they are commercially accepted. Developers studied here who have experience with alternative development may well tout its capacity to reduce automobile trips, but ultimately these individuals are guided by profits, not social engineering. The households who choose to reside in such areas do so because these neighborhoods offer a bundle of attributes--including their transportation characteristics--that render them a desirable choice. In this way, these development forms are best seen as one of a range of market choices, but a choice that has been significantly limited by planning intervention.
Does planning encourage density?
Current planning practice employs a number of tools developed ostensibly to encourage the private market towards denser development. These include transfer of development rights, incentive zoning, and new urbanism codes. This section examines the prevalent assumption (e.g., Nelson 1999, Smith 1986) that these tools constitute planning's encouragement of more compact development. It concludes that in general, even successful use of such tools does not represent planning's encouragement of denser-than-market development. Quite the opposite: where such tools are effective they provide evidence that the property development market seeks to provide greater density than is ordinarily allowed by planning regulations.
Transfer of development rights is a land use regulatory tool that allows developers or land owners who wish to develop in areas slated for growth, to purchase the development rights from land owners in areas where growth is to be discouraged (Maiorana 1994). The land where growth is to be encouraged is referred to as the "receiving" zone; land where development is discouraged is the "sending" zone. Land in the sending zones remains the property of its original owner, but it becomes undevelopable, the rights to build having been sold. In contrast, the land in the receiving zone is permitted to be developed at greater density than would ordinarily be permitted by the zoning code.
This technique is frequently seen as an approach to encouraging more intense development in the receiving zone. It is clearly appropriate to view this approach as discouraging development in the sending zone, as it creates a mechanism for rights to development in these zones to be sold permanently. But regarding the receiving zone, such a technique amounts to the municipal authority allowing developers to pay extra for the rights to build densely, which hardly constitutes the "encouragement" of dense development. To see this, consider that an alternative to transfer of development rights might be rezoning the receiving area to allow the higher density that the developer prefers to build. Under these conditions, the developer would be allowed to build densely without additional cost, in contrast to a transfer of development rights policy that allows the developer to build densely but in exchange for a payment. Thus, far from an incentive to dense development, transfers of development rights amounts to a levying of a fee for density. The fact that in some cases developers are willing to pay the fee provides prima facie evidence of private markets' interest in developing more densely than conventional planning regulations allow.
Incentive zoning, also called density bonuses, is a regulatory approach that increases allowable density or floor area ratio in exchange for some desired public contribution by the developer. For example, the City of Seattle allows development at densities beyond the conventional zoning for amenities such as a day care center, a shopping atrium, sidewalk widening, or urban plaza (reported in Garvin, 1996). Similar to transfer of development rights, incentive zoning is sometimes referred to as a technique for promoting dense development.
But in the same fashion as transfers of development rights, incentive zoning is in fact a technique for billing developers for the right to develop more densely than zoning regulations permit. The reason why it works it that rights to develop densely are limited and hence valuable; but the limitation in the first place is the product of zoning restrictions. Thus the incentive zoning itself is additional evidence of the extent to which the private development market desires to develop more densely than conventional zoning allows.
New Urbanism codes are zoning ordinances inspired by a New Urbanist design approach. Such codes could specify smaller lots, narrow streets, alleyways, mixes of residential and commercial uses, and minimum development densities. Clearly, these codes can allow New Urbanist development, in contrast to standard zoning and transportation standards that limit densities and specify large streets and parking lots. But because the codes are detailed and prescriptive, they may be seen as going beyond this to impose New Urbanist designs by regulatory fiat. This section considers that interpretation.
To start with, it should be noted that the environment within which nearly all new development occurs is guided by a regulatory design template of current zoning and transportation standards. In the vast majority of cases, development densities are specified as maxima, not minima. In relatively few cases nationwide do zoning ordinances seek to specify minimum densities of development; New Urbanism codes would be one example of this phenomenon.
The distinction between regulation for maximum density and regulation for minimum density is very significant. Consider, for example, a parcel of land that could provide a developer greater profits if developed at higher than usual densities. Assume the territory is zoned for low density despite this development potential. Notwithstanding the superior profit potential of high-density development, as long as lower density development provides at least normal profits for developers, the property would in fact develop in a low-density fashion. Thus the regulations will have effectively forced the market to produce a product that it would not otherwise have produced.
Conversely, consider the situation in which a parcel of land is zoned for higher density development--say in a New Urbanist zone--but that such dense development in that location would offer developers only subnormal profits. Under such circumstances, there is no ability, short of outright subsidy, to induce developers to invest in such a zone; they will simply seek more attractive development opportunities in other areas of the city, region, or nation. In this way, whereas maximum density standards can force the market to produce lower densities than it otherwise might, minimum density standards, under ordinary circumstances, are unable to compel the market to produce higher densities. Minimum density standards ultimately enable such densities, but cannot require that they be constructed.
Table 1-1: Interaction of municipal regulatory stance and profit situation to produce alternative development outcomes.
|
Regulatory Stance of Municipality Towards Denser Development |
||
These outcomes are outlined more formally in Table 1-1. The left column specifies four possible municipal regulatory stances towards denser development, representing the range of possible approaches: on a particular site, the city can either prohibit such development, allow it, facilitate or require it. Interacting with this regulatory stance are the potential profit circumstances for denser development; such development can offer profits that are either lower or higher than other development opportunities (the case where profits are precisely equal to those of other development opportunities is omitted). The following discussion assumes that developers have foresight regarding the profit situation they face at various sites. This assumption is clearly a simplification; many developers are less than systematic about their profitability analyses, basing their decision instead on other similar projects, instinct, encouragement from other factors, a booming local economy, incentives from local government, or favorable financial terms. Thus perfect foresight is clearly impossible; nonetheless it is assumed that developers ultimately stay in business by accurately judging the profitability of investment opportunities.
The following simplified scenarios are described in order to establish a finer-grained and more nuanced discussion than is common on the interaction between land use regulations and land development markets. Planning that is supportive of alternative development is sometimes characterized as imposing these development forms on a market that is not especially interested. In contrast, these scenarios point to the crucial role markets play in determining the levels of density that gets built, if regulations allow.
In circumstances where zoning disallows dense development, and no rezoning has been undertaken, such development will not be allowed to occur. This is clearly the case when dense development offers only subnormal profits. In addition, even where denser development might command higher profits, but is zoned out, it is assumed that such development will not occur. At that point, developers need to examine the profitability of lower density development at the site. Assuming that it provides at least normal profits--a reasonable assumption given that the site could have supported higher density development--the site would be expected to develop according to a lower density pattern. Under these circumstances, regulations would have altered the outcome that the property development market would have sought to provide.
Where the city adopts a permissive attitude toward density of development, the potential profits will determine the density at which the development occurs. Urban economic theory holds that under such circumstances, land that is more accessible becomes more valuable, and that higher land values tend to support greater development densities (Heilbrun 1987). Thus more peripheral land that offers relatively low accessibility will tend to develop at lower densities; land that is closer to destinations such as employment centers will tend to develop more densely.
At the same time, there are clearly forces that could lead similar and adjacent parcels to be developed very differently. For example, the profit situation for higher density development may differ at different points in the business cycle. During periods of economic expansion, development at higher densities may be more supportable on a particular site than during periods of slow growth and or recession. During such periods, a site may developed at low densities, thus precluding higher density development later. Similarly, developers' habits vary; where one may develop a site densely and profitably, another may opt on the same site for low-density development based on the kind of products he or she is accustomed to providing.
For this reason, a strictly permissive stance may lead to the loss of opportunity for a city to foster a district of higher density development. The city may view this as a forgone opportunity particularly in areas of high accessibility, such as near a public transit station. Under these circumstances, the city may designate areas in which dense development is required, and seek developers interested in carrying out transit and pedestrian oriented projects.
Such facilitation can ease the process of proposing, securing approval and creating such development, and as such can lower its cost to the developer. Where this happens, such facilitation may render some alternative development worthwhile that otherwise might not have been feasible. Still, in areas where there is inadequate market for such development, facilitation alone would be insufficient to bring this development about.
By requiring alternative development on a given site, the city is signaling that any proposals for development at lower than the minimum densities would be rejected as inconsistent with the area's zoning. If higher density development offers higher profits, there is no conflict between the market and current zoning; one would expect higher density development to arise on the site. In contrast, if higher density development offers lower profits than other development opportunities, developers would be expected to shun the site in favor of other sites elsewhere in the city, region or country. In other words, despite the mandatory nature of the zoning ordinance, the municipality has no ability to force developers to develop according to the specified template. This stands in sharp distinction from the much more common maximum density regulations, which clearly hold the potential of inducing the market to produce development forms it would not otherwise have produced.
Thus, in a circumstance where high-density zoning is enacted in an area for which there is insufficient market demand for such densities, the land would be expected to remain vacant. Ultimately, the municipality would be faced with a choice: allow lower density development or face the prospect of the land continuing to remain undeveloped. Under these circumstances, the municipality may well ultimately relent. If this were to happen, then the development outcomes associated with "requiring" dense development would be identical to those associated merely with "permitting" such development. In this way, minimum density requirements--under current circumstances where they are clearly the exception, rather than the rule--ultimately permit, rather than force denser development.
As described above, there is more to New Urbanism codes than minimum densities, however. Lot sizes, design guidelines and street widths all tend to be prescribed in a highly specific fashion. Regardless of the specificity of the codes, municipalities will depend on developers who see profits in such development; without such private development interest, the designated zones will remain vacant. An example of a city designating a New Urbanism district proactively is found in the following story from Westminster, a suburb of Denver, reported in the Denver Rocky Mountain News (Patty 1999, 20A):
Westminster Wants `New Urbanism' Development
Westminster officials took steps this week to take a step back to an old concept.
The city wants to build a "test'' development project that includes a mix of residential housing with retail and commercial uses. The idea is called "new urbanism" because it harkens back to the old mixed-use neighborhood...The concept dovetails with regional smart-growth initiatives that call for more transit-friendly developments that encourage walking with less dependency on cars, Carpenter said. The higher density of such projects makes for more efficient use of land, he said.
On Monday, the city council gave the go-ahead to seek proposals from developers for a mixed-use project. One developer has expressed an interest to do such a project along West 120th Avenue between Lowell and Sheridan boulevards..."We realize there is a place for both types of development, the traditional and the neo-traditional," Carpenter said. "But we believe there is an interest for some residents to live and work and shop in this new-old type of environment." (emphasis ours)
Thus, the city of Westminster could designate the district for New Urbanism development, but then was dependent on private development to take advantage of the opportunity. Not being in the development business itself, it was not in a position to provide such a neighborhood directly, merely to permit it should private development see profit opportunities in this manner of development. In this case, there was sufficient development interest, as detailed in the following story, reported a year and a half after the first, in the Denver Post (Couch 2001, M1):
Firm plans urban style in suburbia
Westminster alters zoning for dense Continuum project
Continuum Partners starts construction this week on a $220 million urban village in an unlikely place: an undeveloped field in Westminster.
The Denver real estate developer hopes to carve a new pattern in the land of suburban sprawl.
With its narrow streets, front porches, back alleys and urban-style townhouses, the 120-acre Bradburn development will bring a new look to suburban development...In late April, the Westminster City Council agreed to revamp its zoning rules to let Continuum build its brand of denser, more urban-style development at West 120th Avenue between Interstate 25 and U.S. 36.
Continuum plans to blend offices, stores, restaurants and houses into a cozy neighborhood that will promote walking from site to site...That planning philosophy guides Continuum's projects, but it is the economics that makes them work, Falcone said.
The value of office buildings, stores and houses increases faster when they are surrounded by multiple uses rather than similar uses, Falcone said...Bradburn in Westminster is a true test because it applies Continuum's new urbanist principles to the clean slate of a green field...The project will put 310,000 square feet of commercial space next door to 756 residential units in a compact, walkable neighborhood filled with parks.
Falcone contends that the pieces belong together.
`People accuse me of complicating and intellectualizing the development process,' he said. `If you are in it with a short-term horizon--three to five years--then you can afford to not worry about it.
`I think it's better to think of the long-term value, and that is not simple. That is very complicated.' (emphasis ours)
Importantly, the revision of the zoning rules is seen as enabling the development company to pursue its desired style of construction, rather than imposing a design template on an unwilling private sector actor. Revision of previous zoning codes were the prerequisite to this innovation, as prior zoning would not have allowed for the density or mixed use that this project entails.
Thus New Urbanism codes can permit compact development better than the older tools of incentive zoning or density bonuses, in that they allow the developer to build more densely than standard suburban development without having to purchase the right. Nevertheless, ultimately, such codes amount to enabling legislation permitting such development on the part of the private sector. For municipalities interested creation of such areas, zones such as these can be useful in reserving land for this purpose, but the ultimate fate of such territory will be determined by profits available.
ORGANIZATION OF THE REMAINDER OF THIS REPORT
Between the extremes of excluding alternative development by regulation on the one hand, and seeking to reserve territory for it on the other lies the range of planning stances towards these development forms. This study seeks to develop better understandings of the ways in which the planning function both impedes and facilitates the development of such alternatives. Chapter 2 reviews relevant literature in the production of neighborhoods, and the interaction of planners and developers in this process. Chapter 3 presents the results of a national survey of developers on the impact that land use regulation has on their products. Chapter 4 presents the two "successful" development case studies that were developed. Chapter 5 presents the "unsuccessful" development case studies that were significantly modified in the course of the planning process in a fashion that reduced their density, and pedestrian and transit-friendly character. Conclusions of the study are drawn in Chapter 6.
Literature Review of Existing
Research and Major Issues
This chapter examines existing research on development processes in cities and the role various major actors play in these processes at the local level. As a short hand, we use the term alternative development, which refers to alternatives to automobile-oriented, single-use, low-density, suburban development such as single-family housing on large lots located in segregated land uses.
Alternative Developments and Obstacles
Demand for alternative developments arise out of changing demographics (e.g. increasing numbers of single parents and couples without children), a diversity of lifestyles (e.g. gays and lesbians), cultural preference for urban lifestyles, a need for affordable housing where land is scarce, changing work habits due to technology, emergence of niche markets including those catering to minorities, and most especially an increasing awareness of the costs of the low-density, single-use, automobile-oriented development, such as long commuting times, decreased access for those without cars, high consumption of a precious resource that is land, physical and social fragmentation, and built environments which are inhospitable to human beings.
Thus, new issues and players are fast changing the rules of the residential and mixed-use development market, making some types of development faster and easier while making others more difficult or more costly. The reductions in federal funds for infrastructure are straining local budgets. Empty nesters, single-parent households, ethnic groups and an aging population are changing the face of the housing market. New ideas in community design are literally rewriting a few local zoning regulations, and increased concern for open spaces, the environment, community character and sense of place are affecting what consumers are interested in buying and what politicians will approve (Anderson et al. 1998, 4-11). These changes are happening, but at a much smaller and slower scale.
However, alternative developments face a number of obstacles such as lack of critical mass in terms of market demand, resistance from neighborhood residents, zoning and other regulations which favor conventional development, and in terms of financing, difficulties with appraisals and finding suitable comparables, lack of good market research to show the financial feasibility of such projects, and the difficulty of assessing the risk of mixed-use development (in which, for example, the residential component might be more or less risky than the commercial component) (Moudon 2000). The focus of the present study is the nature of developer-planner interaction in these alternative developments, but in order to understand this interaction, we first examine the larger political and economic contexts within which they occur.
Thus, in this part of the study, we review research material (e.g. studies, essays, articles) on the role of developers and planners in conventional suburban development, as well as in alternative suburban development (e.g. high density, mixed-use, abundance of usable public spaces, compact size, interconnected street networks, pedestrian or transit-oriented, ecologically sensitive--such as respecting native vegetation and climate, mixed-housing type designs, etc.). For example, the research addresses questions such as who takes the initiative in promoting alternative (and often, innovative) developments--planners or developers? Do developers simply respond to market demand for alternative developments, and do planners act as bureaucrats who simply enforce rigid regulations (e.g. zoning ordinances)? What is the range of developer-planner interaction in residential and mixed-use development, and what is the role of tertiary actors? Emerging from the literature in the following sections are a number of themes: development process, planners as police, developers as builders, market demand, tertiary actors, contentions of alternative developments, and dominant trends.
Cities are built and maintained by a host of agents: families, industrial firms, city bureaus, developers, investors, regulatory and subsidizing agencies, utility companies, and the like (Lynch 1981, 40-41). Each has its own interests, and the process of decision is fragmented, plural, and marked by bargaining. Typically the leading agents are single-purpose actors, whose aim is to increase their profit margin, complete a sewer system, support the real estate market, or maintain a taxation system, which generates sufficient revenue. No single actor takes anything like a comprehensive view of the evolving spatial structure, except perhaps the local planning agency, which is one of the weaker actors. In the development process, there are five distinct classes of participants that must be considered in any development undertaking: (1) entrepreneurs (e.g. developers, sponsors, and owners); (2) consultants (e.g. designers, financial and legal experts); (3) public officials (e.g. mayors, city council members, county commissioners); (4) city staff (e.g. planners, members of the public works and building services departments); and (5) community members (e.g. as consumers, citizens, and political constituents). Their roles are discussed in the following sections.
First are the developers, sponsors, or owners--the proponents who initiate a project and have the most to gain from its implementation. These entrepreneurs do not appear automatically whenever there is unfulfilled demand for something. They have to believe that the risk of failure is minimal and the rewards that come with success are generous (Garvin 1996, 21-26). Unless such favorable conditions are prevalent, entrepreneurs will exploit other more attractive opportunities. The role includes coordinating a plethora of participants, dealing with uncertainty, recognizing available opportunities that have not yet been exploited, and frequently accomplishing things in ways that have never been tried before. While private developers rarely seek to generate and sustain a widespread private-market reaction, some of their projects make profound changes to surrounding communities. For example, the Ghirardelli Square project altered the character of Fisherman's Wharf and shifted a substantial amount of San Francisco's tourism to the waterfront. Related to the entrepreneurs and the developers is the second group, including the designers and other consultants hired by the developer. These actors are project proponents, who bring in specialized expertise.
In American cities, despite the power that public officials and planners hold to stop development, it is primarily developers who determine what actually gets built, when it gets built, and what it looks like (Peiser 1990, 496). They lay out the streets in subdivisions and direct the architects who design the public spaces in shopping centers and business districts where people congregate. According to Peiser (1990), then, it is developers, working within existing political and economic institutions, its built environment who plan America--at least, its built environment.
However, most developers believe that planners do not trust developers' motives and are suspicious and cynical about their actions. Many developers feel that planners want to keep developers from receiving permissions that are theirs by right--such as the right to build according to zoning. They believe, perhaps all too often with some justification, that planners loathe developer "profits" and that the role of planners is to soak development of its profits by requiring many (and sometimes outlandish) "public interest" improvements (Peiser 1990, 497).
A developer can also learn to work within almost any constraints, if they are known. If a city is going to require extensive fees and mitigation measures, and these are known in advance, the developer can either pay less for land, or build only when market conditions will support the higher prices that will be needed to offset mitigation costs. Typically higher entitlement costs are borne in part by diminution in land value and in part by higher prices passed on to the ultimate consumer. However, when working in an entitlement process that does not provide certainty to the developer, the developer must assume greater risk. If the developer's projections are too conservative, others will offer more for land, and the developer will not have any chance to develop. If the developer makes assumptions that are too aggressive, the developer may acquire the site but then be unable to recover costs (Cuff et al. 1994, 157).
Developers also make convenient villains. According to Bookman (1999, 5B), there is a popular perception that they turn beautiful green pastures and forests into subdivisions and strip malls; they manipulate politicians like so many puppets on a string; and once a project is finished, they take their profits and scram, leaving neighbors and nearby property owners to deal with the consequences. While there may be an element of truth to these claims--after all, developers are motivated by profit--there is also a risk of over-simplification--after all, developers respond to market demand, which is driven by consumers. Consumers feed the demand for growth and development, but consumers (in the guise of neighborhood associations, for example) also generate planning templates which restrict densities, uses, and other innovative urban design characteristics.
A third group comprises officials elected with the intention that they will represent some group of constituents. These individuals' futures often depend in part upon how they handle contentious development. They, along with the fourth group of city staff--including planners--must approve the project, as well as manage and control the process. These third and fourth groups together exercise their power to approve or stall a project based on the planning function (e.g. zoning regulations and master plans), or based on political interests (e.g. pressure from the city council or neighborhood associations). According to Garvin (1996, 27), these groups can play a major role in fostering desirable interaction between proposed real estate development and their neighbors. Government can use investment (housing subsidies), regulation (e.g. parking requirements) or incentives (a zoning bonus) to alter the ingredients of a successful project (e.g. market, location, design, time of operation.).
According to some authors, planners are the police of contemporary urban America (Peiser 1990, 496). They enforce the rules, they regulate the process, and they stop the offenders. Most planners believe that developers would ignore them if they could. They feel that developers view the planning and approvals process as a needless meddling and a waste of time and money. At heart, many planners believe developers feel no responsibility for improving the quality of urban life beyond their projects, think only of the near term, and are fundamentally selfish (if not outright greedy) about profits (Peiser 1990, 497).
However, there are limits to what planners can achieve through regulation. Dalton's study (1989) of local planning agencies in California demonstrates the weaknesses of regulation for implementing plans. She notes that the reactive nature of the regulatory process leaves the initiative for implementation in the hands of developers rather than planners: When distributive and redistributive policies are implemented by a regulatory agency, they become subject to the limits of regulatory policy. That makes them contingent upon the demand for new development--which is likely to be absent in some of the very communities where distributive and redistributive programs are most needed.
Most planning regulations (e.g. zoning codes and ordinances) deal in quantities of things: heights, setbacks, coverage, lot dimensions, parking stalls etc. and uses, rather than the quality or design of things (Hinshaw 2000). Zoning ordinances are paradoxically both restrictive and subject to change, leading to less certainty on the part of designers and property owners. The latter find themselves restricted to smaller building envelopes, down zoning, and often, required negotiations with neighbors. While the result may be fewer disastrous developments, all parties to the development process feel their interests are somewhat alienated and threatened (Cuff et al. 1994, 2). For example, a comprehensive plan for development was approved by Cranberry Township officials in Pennsylvania, which had three goals--to decrease the density of residential development, to decrease the density of commercial retail development, and to carry out both of these goals while remaining attuned to the environment. Some developers and retailers were not happy with this, and as a property owner in the community since 1948 claimed, the township administrators had bowed to the demands of homeowners while ignoring others (Kogut 2000.)
On the other hand, zoning ordinances can also be deeply ingrained. In many cases, they are the result of many political compromises, and nobody wants to tinker with them (Stuart Meck of the American Planning Association, cited in Conte 2000, 32). In these cases, local zoning ordinances are greatly responsible for hindering sustainable and accessible developments. In an extensive review of land use near more than 200 existing and proposed rail stations in southern California, Boarnet and Crane (1997) found little evidence of residential TOD in local zoning codes (Boarnet and Crane, 1998). The overwhelming trend was one of commercial and industrial zoning in station areas, a pattern that held across community and commuter rail systems characteristics (Boarnet and Crane, 1998). Many authors suggest that local governments will favor commercial over residential uses in a system dependent on either property or sales tax finance, since commercial properties often generate tax revenue without the service requirement of new residents (e.g. Ladd 1975; Schneider 1989; Altshuler and Gómez-Ibáñez 1993; Fisher 1996; Boarnet and Crane, 1998).
Furthermore, local citizens are often buttressed in their anti-development uprising by the cooperation of local bureaucracies. Indeed, in their analysis of San Diego planner, Calavita and Caves (1994) found that public planners tended to mirror closely anti-development views of the general population, while planners working in the private sector were more likely to reflect pro-development views. On the other hand, it is also true that, under certain circumstances, public planners might be more likely to moderate their policies if their budgets are affected by the rate of development in their respective locales. This situation must create some degree of pressure to modify, restrain, or otherwise ignore the impulse to restrict development (Nieman and Fernandez 2000).
Planners--and the planning function (e.g. planning commissions, zoning ordinances, public policies)--are also facilitators of alternative development, albeit in a small number of cases. Public policies, programs, and regulations have provided significant support for transit-focused development, by guiding or even mandating the locations, densities, and other aspects of development in station areas. These actions may be strategic in nature: e.g., adopting community policies to focus development in station areas and constrain it elsewhere, and preparing plans for station areas that anticipate development, or local governments can act in highly specific ways to promote station-area development: e.g., instituting redevelopment programs, funding infrastructure improvements, or mandating parking restrictions. However, most government initiatives are effective only when supplementing market forces; except for public facility siting, they can entice demand but not create it (Porter, 1998).
The fifth category of participants consists of the active community members, generally organized into ad hoc groups advocating local concerns or larger environmental interests. There is usually more than one group representing competing claims upon the development project. Consumers purchase or rent real estate by economic means (and represent market demand), while citizens support or oppose real estate development by political means (and represent public opinion). Of course, these two groups are often the same and their roles are often conflated.
The heart of free-market economists and interests' argument is that consumer demand--in particular, our strong appetite for large houses and big yards--is the dominant force shaping America's urban landscape. Government efforts to control urban growth are not only wrong but also doomed to fail because they ignore the enduring desire for a spread-out, car-centered way of life (Conte 2000, 29). At the same time, there are groups of consumers, who, when shown slides of standard suburban development versus the New Urbanism--village greens, mixed uses, houses with picket fences a few feet from the street--almost always express a preference for the latter, notes Paul Gottlieb of the Center for Regional Economic Issues at Case Western Reserve University (Conte 2000).
A demographic study by the marketing firm American LIVES indicates a growing desire for community, open space, and town-centered living with less reliance on the automobile (Anderson et al. 1998, 9). Demographic shifts underlie and support these trends. The "typical" family--a married couple with children--described 40 percent of all households a generation ago, it now accounts for only 26 percent. Homebuyers are getting older too. Fully one-third of the home-buying market is over the age of 45. In surveys published by the National Association of Home Builders, most respondents in this market segment wanted to live in communities where residents are of various ages and where various types and sizes of housing are available. Three of their top four location priorities were based on easy transportation, access to shopping, access to family and friends, and access to medical care. And of mature homebuyers who intended to move, most intended to move to smaller houses with smaller yards to reduce cleanup and yard work (Anderson et al. 1998, 9).
Why, then, don't we see types of alternative residential development? Gottlieb believes a massive amount of risk aversion keeps developers from building and consumers from buying different kinds of housing. In his view, Smart Growth advocates have done little to educate consumers on how their individual decisions--to seek a big house on a big lot, to move out of a neighborhood when minorities move in, to drive a sport utility vehicle, or to look for a home "in the country"--can add up to social outcomes that neither they or their neighbors particularly want (Conte 2000, 33).
Another important factor that should not be negated is the (Not In My Back Yard) NIMBY syndrome. While most suburban people advocate higher densities, strong advocacy groups have been instrumental in opposing such developments in their neighborhoods (e.g. in the Whisman Station and Pembrooke Park case studies, later in this report). Despite the strong importance that our national myth gives to broad democratic participation in our political processes, in practice these processes go forward with a substantial exclusionary effect (Brion 1991, 63). A person participates not just on the basis of intensity of feeling over the particular issue at stake but also on the basis of intensity of personal material interest. This often results in a political gridlock where the community is strongly against a development even though the city officials might be for such a development.
Community opposition to a particular development may be triggered by a shared perception that it will not provide a good fit between the proposed design of a new project with the surrounding built and natural environment. The most commonly voiced physical concerns include building height and massing, density, parking, traffic, contextual architectural design, and environmental conservation. If the project's context has some cohesive history and enduring, if not unique, location, landscape, or architectural heritage, the question of fit is likely to become a central issue. But place issues are more than just a matter of aesthetics. The basis for community opposition is rooted in deeper concerns about the sense of place, which is difficult to articulate. In such instances, traffic, noise, pollution, density and building heights, loss of views, or socio-economic balance, may serve as surrogates, even though they never satisfactorily capture the deeper concerns that motivate community organizations (Cuff et al. 1994, 3).
Take the issue of density. To a lot of people, it's simple: High-density growth is bad; low-density growth is good. Quality residential growth is always defined as large houses built on very large lots; smaller houses on smaller lots might be barely tolerable, while apartments are associate with all that is wrong with public housing, for example (Bookman 1999, 5B). Density makes people of suburban and rural communities uncomfortable since that evokes the feeling of inner city--the very places suburbanites supposedly are trying to escape (Platt 1999, 74). Also, concerns about what would happen to property values and who may reside in high density housing gives rise to community opposition.
Critics of community-developer negotiations find fault with the process because there is no one looking out for overarching interests. This tends to create a fragmented environment of enclaves, operating within an ignored, malfunctioning whole. Thus, the neighborhoods try to stop the homeless from peopling their streets merely by pushing them into other parts of the city; a building is designed to respond to local concerns without regard for urban design issues; environmental concerns produce local solutions such as parks rather than the systemic solutions that sustainable development would demand. Since few constituencies advocate large scale planning priorities, these are downplayed in the advocacy-based process of hearings, and among the voters who will judge elected officials. Similarly, no-growth activists may be able to stop growth in their own communities, but that growth merely occurs elsewhere, where advocacy groups are less powerful or non-existent (Cuff et al. 1994, 104).
Alexander Garvin (1996) argues that neither planners nor developers plan America, that bureaucrats and bankers do. Bureaucratic regulators determine what the landscape looks like. Many people think that homeownership is driven exclusively by supply and demand. However, by creating a tax advantage for the purchase of larger, more expensive housing, subsidies tend to favor new, low-density developments located outside the central metropolitan core. In addition, infrastructure policy and spending have been managed to enable and promote current patterns of development (Anderson et.al. 1998, 7). Special care has been taken to ensure that telephone, electricity, and mail services are available regardless of residents' choice of location. The federal government historically has paid to build new water and sewer facilities with grant programs and revolving loan funds. Government support for the suburban lifestyle, and for the exodus from cities and older suburbs has been substantial (Anderson et.al. 1998, 7).
The number of actors increases yearly--fire and safety officials, environmental health officials, air quality officials, and so forth. Bankers determine what gets built, since developers depend on them for financing. The financial community is conservative in its tastes and follows a herd instinct. Concepts and designs that have been financially successful elsewhere are much easier to finance than those that are new and innovative (Peiser 1990, 499). For example, Chip Abernathy, senior vice president of First Union National Bank in Jacksonville, Florida says that many bankers look at elements of the New Urbanism--particularly multi-use buildings--as risky. Nevertheless, First Union made a $2.5 million loan to finance part of a neo-traditional project, Amelia Park, in Fernandina Beach, Florida. Abernathy explains that the developer did not emphasize the uniqueness of the project, but presented it as he would an ordinary subdivision. (Chapman 1999).
Still, it is through developers that financial institutions affect the built environment. They depend on developers to initiate the projects and to assume the risk of development, and to receive their permissions from planners, planning agencies, and planning regulations.
There exist a few trends which may affect the way residential development--especially alternative development--is conceived and implemented. These include federal policies which encourage transit use and development, financial institutions which are becoming more comfortable with financing New Urbanist developments, and local planning regulations which are being modified to reflect more closely market demand and sustainable practices.
At the national level, major changes in federal transportation legislation--coupled with a rising mobility crisis in many cities, the advancement of the smart growth movement, and increased federal transit spending--are expanding opportunities for joint development projects near transit stations (Zimmerman 1999, 101). The 1988 passage of the Transportation Equity Act for the 21st century (TEA-21) codified Federal Transit administration (FTA) guidelines on joint development and created new incentives for transit agencies to promote joint development projects as a way to supplement revenue and increase ridership (Zimmerman 1999, 101). "TEA-21 provides significant funding to help communities and commutes overcome traffic congestion. TEA-21 provides funds for transit, enhanced coordination between transportation and land use planning, and the development of bike and pedestrian trail system" (ULI-Smart Growth: Myth and Facts). Until now the two biggest obstacles were limitation on private ownership of land, which restricted the types of projects developers could pursue, and lack of incentives for transit agencies to engage in these ventures since most of the revenue was returned to the federal government.
Also at the national level, some banks, particularly in the Southeastern U.S., already are comfortable lending to New Urbanist projects. Vince Graham, developer of I'On in Mount Pleasant, South Carolina, reports that two banks, Wachovia and Nations Bank, were bidding to finance the 243-acre Traditional Neighborhood Development (TND). Wachovia ended up making the loan, even while Graham was still fighting a zoning-related lawsuit. Familiarity with successful projects like Newpoint, which Graham is developing with Robert Tuner in Beaufort, South Carolina, added to Wachovia's comfort level. Turner agrees that, once banks have seen some TNDs work such as Newpoint they will be more comfortable with financing developments of this type ("Maryland County takes a New Look at Street Standards," Urban Land, Dec. 1996 from ULI packet no. 338, New Urbanism/Neotraditional Planning).
Communities are realizing the need for a change at basic design standards stipulated in their planning books and are taking the initiative to change it. For example, continuing reliance on street standards created in 1950s in Montgomery County, Maryland, forced pioneering developers like Joseph Alfrandre to go the costly and time-consuming "waiver route" in obtaining permits to build the sociable street in Kentlands, an award-winning community. As in many jurisdictions, old road standards drastically limited the types of roads that could be built and did not always accommodate sidewalks, street trees, or on-street parking. In some cases, the old standards were actually in conflict with county policies to encourage transit-oriented development and use of public transportation. So Montgomery County transportation officials, urban designers, consultants and developers have been quietly hammering out a new set of road standards designed to avoid reliance on waivers and create a more transit-oriented, pedestrian-friendly street system. The new standards for the first time include a set of transitway standards accommodating transit lanes in medians and along the curbside of a street and as separate transitways.
These are however, exceptions, as the following sections of the study--the national survey of developers and the four case study projects--will demonstrate; for the vast majority of suburban residential development continues to be low-density, land-use segregated, and automobile-oriented, thanks in no small part to planning.
During the winter of 2001, a national survey was conducted in order to assess developers' perceptions of the impact of planning regulations on their products. Principal themes of the survey included:
Perceptions regarding the market for alternative development. Is it sufficient or insufficient currently to expand the provision of alternative development forms? Is the level of such development adequate currently to satisfy the demand for it? If not, what are obstacles to its expansion?
Developers' experience with proposing and developing these alternatives. How many have experience with such proposals? How are such proposals handled, modified, accepted or rejected by the planning system?
Strategic behavior in response to planning interventions. In what ways do developers modify their behavior in anticipation of the intervention of the planning function?
Impact of regulations on the densities and land use mixing of development. How do developers believe that their products would change if land use and transportation regulations were liberalized?
The survey form is presented as Appendix A. It began by defining alternatives to conventional, low-density, automobile-oriented, suburban development. The survey characterized these alternatives as having:
A variety of housing types close together;
Pedestrian or transit-oriented design;
Availability of a range of transportation modes; and
Easy accessibility to major destinations.
"Alternative development" as referred to in the survey and throughout this report is development that has a significant share of the characteristics described above. In the case of the survey, what counts as alternative development was a function of a developer's individual perceptions; this must be identified as a limitation of the study methodology. Undoubtedly some developers may consider a number of their products to be "alternative," many architects or urban planners evaluating these same products may judge them to be quite conventional. Data regarding a developer's individual experience with alternative development must be assessed in this light. In contrast, data regarding developers' desired density of construction and land use mixing would not be subject to this limitation. Nevertheless, the entire survey clearly measures developers' perceptions, rather than any objective reality.
Two databases were considered for use as a sampling frame for this study: the membership of the National Association of Home Builders, and the developer membership of the Urban Land Institute. The latter was selected as better representative of developers, as opposed to builders. While sometimes the two functions are combined in a single firm, the two roles are readily distinguishable from each other. Builders construct homes and commercial structure on land that is prepared for development, generally including subdivision, permitting, infrastructure provision, etc. In contrast, developers' role is to bring land to the point where it can be built upon; thus they take care of land purchase and assembly, as well as the functions referred to above. By the time the builder is involved, there is frequently little latitude regarding the directions of development, as the fundamental template has already been established. In contrast, developers have significant leeway to propose a number of different development forms. For this reason, the membership of the Urban Land Institute, the nation's leading association of land developers, served as a basis for development of the survey sample.
The Urban Land Institute staff selected from its membership database all those individuals who were classified as "developers." In all 4,183 individuals matched this description. Questionnaires were mailed to a simple random sample of 2,000 was drawn from this group. The cover letter indicated the purpose of the survey, and offered ten prizes of $100 each to randomly selected survey respondents. Questionnaires were marked with a code identifying the respondents, and several weeks after the initial mailing, a follow-up postcard was sent to people who had not responded to the initial mailing. Several weeks after the follow-up postcard, a duplicate questionnaire was sent to people who had still not responded. Each of the additional mailings triggered new responses, and overall the response rate to the survey was 36.5 percent (Table 3-1).
Respondents were asked to indicate the geographic areas in which they worked. To analyze the survey data, multistate regions were defined, based on the regions of the Department of Housing and Urban Development (HUD), (See Table 3-2). In some cases, two HUD regions were combined in order to ensure reasonable sample sizes within each geographic unit. The regions, together with the surveys received from each are shown in Table 3-1.
Table 3-1: Response to Survey Questionnaire
|
Returned incomplete with indication that the survey respondent is not a developer |
|
|
Qualifying respondents (i.e., residential, commercial or mixed use developers) |
Table 3-2: Response to Survey Questionnaire by Region
The market for Alternative Development
Overall, developers perceive considerable market interest in alternative development. Over three-quarters of the nationwide sample estimated that at least ten percent of households are interested in such alternatives, and over one third of the sample saw a potential market of at least 25 percent (Table 3-3). The highest levels of interest were perceived by developers in the Northeast and Mid-Atlantic regions; considerably less interest was reported by developers in the country's central areas: Midwest, Plains, Mountains and South Central Regions. Nationwide and other multi-region developers reported high levels of interest, comparable to those reported along the East Coast. It is notable, however that even among the regions where comparatively low interest was perceived, around seventy percent of developers perceived interest in at least ten percent of households. In general, the market for such development is perceived as more than "niche" in character.
Table 3-3: Developer Perception of Market Interest
in Alternative Development
|
What share of the households in your markets are interested in alternative development? |
||||||
Assessments of the size of the potential market needs to be interpreted in light of perceptions about the adequacy of current supply of alternatives development forms, and respondents were asked to assess the adequacy of current supply in their regions. While notable differences existed between regions, the consensus overall was that of inadequate supply of alternatives currently (Table 3-4); under 15 percent of respondents believed that supplies were ample currently, and in the appropriate locations. The share of developers viewing supplies as adequate and appropriately located varied from a low of two percent in the Northeast to a high of around 20 percent. About one-fifth of developers nationwide judged current supplies to be adequate overall, but that such supply has not necessarily materialized in the right locations. This may be indicative of the greater ease of providing alternatives in undeveloped territory beyond the metropolitan fringe than in locales that already enjoy high levels of accessibility.
Table 3-4: Perceptions of Adequacy of Current Supply
of Alternative Development
|
Is there adequate supply of alternative development in existing housing and new construction? |
||||
In conjunction, Table 3-3 and Table 3-4 establish both the presence of a significant market and the inadequacy of current supply, in the perception of the respondents. The perceived reasons for the apparent undersupply are reported in Table 3-4. Respondents were asked to indicate all significant obstacles to the expansion to the supply of alternative developments. With the exception of developers in the South Central district, few respondents saw lack of market interest to be an obstacle to the further development of the options. In contrast, an overwhelming majority of respondents viewed local regulations, including zoning ordinances, subdivision regulations, parking standards or street width requirements to be a significant obstacle. The second most broadly recognized obstacle was opposition on the part of neighborhood residents. It should be pointed out that a close relationship exists between "neighborhood opposition" and "regulation" as an obstacle to the development of alternatives. Neighbors opposed to development are unable legally to halt such development through direct action; rather their mobilization is channeled through the municipal land use authority, such as the city or the county. The authority in turn can choose to use the regulatory power delegated to it from the state to exclude, modify or permit the development in question. These two categories are thus very nearly identical in meaning for the purposes of this study.
The other significant difficulty reported is securing financing. Developers often portray lenders as conservative and unwilling to finance other than conventional development. The perceived reasons for the apparent undersupply are reported in Table 3-5.
Table 3-5: Obstacles to Expansion of the
Supply of Alternative Developments
|
Which are significant barriers to the expansion of alternative developments? |
|||||||