REAL ESTATE
Empty spaces and hybrid places: The pandemic’s lasting impact on real estate
Hybrid work is here to stay. As a result, office attendance has stabilized at 30 percent below prepandemic norms.
The ripple effects of hybrid work are substantial. Untethered from their offices, residents have left urban cores and shifted their shopping elsewhere. For example, New York City’s urban core lost 5 percent of its population from mid-2020 to mid-2022, and San Francisco’s lost 7 percent. Urban vacancy rates have shot up. Foot traffic near stores in metropolitan areas remains 10 to 20 percent below prepandemic levels. Demand for office and retail space in superstar cities will remain below prepandemic levels. In a moderate scenario that we modeled, demand for office space is 13 percent lower in 2030 than it was in 2019 for the median city in our study. In a severe scenario, demand falls by 38 percent in the most heavily affected city.
https://www.mckinsey.com/mgi/our-research/empty-spaces-and-hybrid-places
The Challenges Suburbs Face in Refilling Office Space
A lot of suburban office space is isolated from other uses, islands in a sea of surface parking. Even before the pandemic, many suburbs recognized the need to revitalize those spaces, and build connections between office space, housing, public outdoor space and other commercial uses. Over the last decade and a half, suburban office parks have begun to recognize “urbanism as the new amenity,” Dunham-Jones says.
https://www.governing.com/urban/the-challenges-suburbs-face-in-refilling-office-space
What We’ve Learned by Assessing More Than 1,000 Potential Office-to-Residential Conversions
Our data reveals that only 25% of the buildings scored make for suitable candidates for conversion. Context, building form, location, floor plate size, and several other factors all play a crucial role in assessing a building’s aptness for conversion. That analysis has also revealed something surprising: all the features that result in an unpleasant office make for an excellent multifamily product. For example, a floor-to-floor height that’s typical of a Class C building is approximately 12 feet. Today, that’s considered oppressively low, as it translates to 8-foot ceilings in the office. With all the office ducts, lights, and ceilings removed, it can create a soaring 11-foot clear height in a residential building, which is considered luxurious.
https://www.gensler.com/blog/what-we-learned-assessing-office-to-residential-conversions
Denver Leads Peer Cities In Office Development, But Its Tenant Base Remains Unclear
Denver has more office space in its development pipeline than its peer cities in the Western U.S., according to a study compiled by the Downtown Seattle Association, with roughly 2.3M SF of office construction underway across the metro area. But who will lease Denver’s new office buildings once they are completed is an open question, as leasing activity in the Mile High City remains under pressure and historic tenant bases shift. The city’s development pipeline is well ahead of other cities mentioned in the report, such as Portland, Seattle and Chicago. Portland had roughly 525K SF of office space under development as of fourth-quarter 2023, according to data from Colliers. Seattle and Chicago had 1.4M SF and 759K SF of offices under construction, respectively, the brokerage found.
https://www.bisnow.com/denver/news/office/denver-leads-peer-cities-in-office-development-but-its-tenant-base-remains-unclear-122612
Adaptive reuse report shows 55K impact of office-to-residential conversions
The latest RentCafe annual Adaptive Reuse report shows that there are 55,300 units in the pipeline as of 2024—four times as much compared to 2021. Office building conversions represent 38% of the 147,000 residential adaptive reuse projects. This makes up the largest share with hotel-to-res following at 24 percent, factory conversions at 13 percent, and healthcare buildings at 6 percent. The office buildings being picked for conversion are, on average, 72 years old (20 years younger than many of the ones previously converted). This suggests a preference for newer buildings that require less refurbishment and investment to meet modern standards.
https://www.bdcnetwork.com/adaptive-reuse-report-shows-55k-impact-office-to-res
MOBILITY
Being doored to death is a cyclist’s nightmare. How can it be prevented?
“Dooring” and “doored,” colloquialisms among bicyclists, refer to a collision caused by a driver or passenger opening a car door into an oncoming cyclist. For some cyclists, such as Diaz, it is among their greatest fears. But collisions such as these, they say, can be prevented with greater awareness and better infrastructure.
https://www.latimes.com/california/story/2023-12-19/what-is-dooring-the-bicyclist-collision-that-killed-a-hollywood-producer
Nationalize Greyhound
As Sunkara pointed out in 2021, Greyhound’s problems mean that the government could buy it up cheaply, build dedicated lanes on the “already nationalized interstate highway system,” and soon have it be financially self-sufficient like the USPS. This would be very good for the climate — buses are one of the least emission-heavy forms of practical intercity travel — and “the buses would effectively advertise themselves: individual motorists, watching buses zoom by them, will soon realize that if you want to get somewhere fast, the bus is the way to go.”
https://jacobin.com/2023/12/nationalize-greyhound-infrastructure-transportation-inequality-air-travel
Autonomous driving’s future: Convenient and connected
The dream of seeing fleets of driverless cars efficiently delivering people to their destinations has captured consumers’ imaginations and fueled billions of dollars in investment in recent years. But even after some setbacks that have pushed out timelines for autonomous-vehicle (AV) launches and delayed customer adoption, the mobility community still broadly agrees that autonomous driving (AD) has the potential to transform transportation, consumer behavior, and society at large.
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/autonomous-drivings-future-convenient-and-connected
Is the EV revolution over?
Adoption will also grow as consumers see more EV chargers pop up across the country. The Department of Transportation recently announced $623 million in grants to support charging infrastructure across the country. “We’re at a moment now where the electric vehicle revolution isn’t coming, it is very much here,” Transportation Secretary Pete Buttigieg said in announcing the grants. This means that developers eyeing a new build or retrofit should still include EV charging, according to Pinter. In some cases, utility companies will offer incentives or rebates to multifamily developments, depending on the state. California Edison, for instance, offers up to $3,500 per charging port or $7,000 for a dual charging port.
https://www.smartcitiesdive.com/news/is-the-ev-revolution-over/706280/
Truck makers team up to push for electric vehicle chargers
The companies’ decision to work together underscores the degree to which the transition away from fossil fuels is dependent on government support and decisions made in Washington and state capitols. The Inflation Reduction Act, which Democrats passed in 2022, provides $1 billion for electric trucks, including tax credits of up to $40,000 for companies that buy them, as well as subsidies for charging infrastructure. But officials are just beginning to distribute the money, and the truck companies complain that they have gotten less attention from federal and state governments than makers of cars.
https://enewspaper.denverpost.com/infinity/article_popover_share.aspx?guid=1d8b71d3-9683-43d4-b922-67d07cf30194&share=true
Congestion Pricing: New York City’s Next Hero
According to a report published by the Frontier Groups and U.S. PIRG Education Fund, roads do not “pay for themselves.” In reality, they are subsidized by the government. “Since 1947, the amount of money spent on highways, roads, and streets has exceeded the amount raised through gasoline taxes and other so-called ‘user fees’ by $600 billion (2005 dollars), representing a massive transfer of general government funds to highways.” (p.1). This helps us understand that a “congestion charge” would do nothing more than help reduce this giant deficit, giving the government more capital to use in important projects. It is not a matter of unfairness; rather, it is about paying for the true cost of using the road.
https://www.planetizen.com/blogs/127163-congestion-pricing-new-york-citys-next-hero
Commentary: Free public transit would be a win-win solution
In late 2023, Albuquerque became the largest U.S. city to fully embrace fare-free public transportation. This decision came after nearly two years of a successful pilot program. As ridership dwindled during the pandemic, the city expanded free rides from a few routes to the entire system. Barely a year later, ridership was up 49.4 percent and the program proved to be more cost-effective than previously imagined. Now, free fares are here to stay. The policy has been tested in cities from Richmond and Alexandria in Virginia to Kansas City to Olympia, Wash. And last fall, New York’s Metropolitan Transit Authority – which operates the nation’s largest public transportation network – announced a fare-free pilot program of its own.
https://www.gazetteleader.com/arlington/opinion/commentary-free-public-transit-would-be-a-win-win-solution-8149069
REAL ESTATE AND MOBILITY
From Austin to Anchorage, U.S. cities opt to ditch their off-street parking minimums
Many more U.S. cities – including New York City, Milwaukee, and Dallas — are exploring getting rid of their parking minimums too. Duluth, Minn., lifted its parking mandates in December. Levine says getting rid of these rules is good news for cities. “It’s a huge drag on housing affordability. And it’s a huge impediment for cities fulfilling their destiny, which is enabling human interaction. Because what parking does is it separates land uses, separates people. It makes cities have a much more sprawling physical profile than they otherwise would have.”
https://www.npr.org/2024/01/02/1221366173/u-s-cities-drop-parking-space-minimums-development
How Parking Reform Is Helping Transform American Cities
Minneapolis, San Francisco, Buffalo, Hartford, Austin, San Jose, and Portland, Oregon have all stopped requiring parking in the last decade. So have college towns like Champaign, Illinois, Berkeley, California, and Cambridge, Massachusetts. California and Oregon have each chipped away at parking minimums in urban areas. There is even a federal bill, introduced in Congress last spring, that allows property owners to decide how many parking spots to provide for new developments. These changes have been accompanied in many cities by a new approach to managing street parking at the curb, a long-neglected component of urban infrastructure. The common problem with curb parking is that it is too cheap. All-day parkers (often, local employees) arrive first thing in the morning and take the best spots, leaving visitors to cruise in frustration — a phenomenon that appears to account for a sizable share of traffic in congested places.
https://e360.yale.edu/features/free-parking-reform
AFFORDABLE HOUSING
Is transit-oriented development affordable for low- and moderate-income households?
Furthermore, both voluntary and regulatory measures adopted at city, county and state levels to incentivize the production of affordable housing have only limited impact, resulting on average in 5–10 % of affordable units and rarely exceeding 15 %. In addition, they produce units affordable to households earning about 80 % of the AMI. Top-down regulatory measures seem to have a very limited impact on numbers of affordable units offered in TODs and are less effective than bottom-up voluntary and targeted programs, policies, and actions. This means that various forms of Inclusionary Housing Policies and Zoning (the way they are currently implemented) are ineffective in producing affordable housing in TODs.
https://www.sciencedirect.com/science/article/abs/pii/S026427512300584X
Colorado Democrats launch second attempt to allow more accessory dwelling units to ease housing crisis
Accessory dwelling units, also called ADUs, granny flats or casitas, are secondary residences that are either attached or adjacent to single-family homes. They’re often rented out or used for visiting family members and have long been seen as a way to boost Colorado’s housing stock and drive down the cost of living. Homeowners also rent them out to tourists as short-term vacation rentals. Research by Freddie Mac, the government-sponsored housing corporation, has found that ADUs are far more affordable than apartments and standalone housing units, but local prohibitions have limited their proliferation in all but a handful of places across the country. In Denver, for instance, a residential lot must be in a certain area to be zoned for an ADU to be legally built. The lot’s size determines how big the ADU can be. Getting a variance can be difficult.
https://coloradosun.com/2024/01/31/colorado-accessory-dwelling-units-housing-bill/
‘Housing affordability is reshaping migration trends,’ economist says. Here’s where people are moving
Last year, consumers moving interstate tended to pick new metropolitan areas where housing costs and competition are less severe, and construction is keeping up with demand, according to a recent Zillow Group analysis of United Van Lines data. Homes in those consumers’ new metros cost $7,500 less, on average, compared to the places they left.
https://www.cnbc.com/2024/01/23/10-metros-where-people-are-moving-for-affordable-housing-good-jobs.html
Why affordable housing can’t pay for itself
Often, people like to blame “land speculation” and “developer greed” as the causes for the undersupply of affordable housing. But our three-bedroom example shows this is mathematically incorrect. If we remove all acquisition costs from the equation (i.e., assume the property has been acquired for free and all “speculation” has been removed from the equation), there is still a funding shortfall of $147,802. If we further remove all developer fees from the equation (i.e. assume all the development work has been done for free and the costs of financial guarantees and risk are not accounted for), there is still a funding shortfall of $129,307, accounting for reduced LIHTC equity as a result of lowered eligible basis. The shortage of affordable housing is not a result of speculation or greed. It is a function of the cost of building new affordable housing.
https://ggwash.org/view/92306/why-affordable-housing-cant-pay-for-itself
Colorado Division of Housing is presents the Annual Report for State Fiscal Year 2022-23
In a groundbreaking year, Colorado witnessed key shifts in affordable housing initiatives. The American Rescue Plan Act of 2022 played a pivotal role by enabling $400 million for transformative affordable housing programs. These initiatives, meticulously recommended by the Transformational Affordable Housing Task Force and approved by the state legislature in 2022, were effectively implemented with demand for their funding far exceeding available amounts. Additionally, November 2022 saw the approval of Proposition 123 by voters, injecting substantial funding into six pivotal programs, two of which are managed by the Division of Housing. To access this funding, local and tribal governments committed to 3-year housing development goals, and the Division of Housing has already secured 202 commitments.
https://drive.google.com/file/d/1mXVknpquxvkehmqJ0niOqmb03mxKJKUc/view?mc_cid=a287a4f7e6
