REAL ESTATE
Developers Sit on Empty Lots After Historic Apartment Boom
During the biggest apartment construction boom in decades, a growing number of developers can’t make the numbers work to get started on their project, or can’t get the money to complete them. Higher interest rates, tighter lending conditions and flattening rents in parts of the country have left property companies from California to Florida waiting for financing that might not come soon. The amount of time the average apartment project spends between construction authorization and when construction begins has risen to nearly 500 days, a 45% increase from 2019, according to property data firm Yardi Matrix.
https://www.wsj.com/real-estate/developers-sit-on-empty-lots-after-historic-apartment-boom-1c0e5fe8?mod=djem10point
REAL ESTATE AND MOBILITY
Denver’s train network was built for car commuters. With parking lots empty, RTD thinks housing could help save it
RTD has long encouraged new housing to be built near its stations; more than 40,000 units have opened in the last quarter century. It’s also selling land at 29th and Welton Street in Five Points at a discount that will soon hold 62 affordable condos. Legislators have been pushing the development of more transit-oriented homes in a bid to lower housing costs and promote cleaner forms of transportation, like walking, biking and transit. Lawmakers have loosened local parking restrictions and mandated a certain level of housing density in transit corridors. They also just removed the requirement that developers pay transit agencies fair market value for the use of their land, a move that could make more housing projects economically viable. All of those efforts dovetail with RTD’s own shift in recent years to become far more aggressive in pursuing new housing on its own property — even if that property was once-coveted parking.
https://www.cpr.org/2024/06/21/housing-development-rtd-park-and-ride-parking-lots/
Two-block stretch of Glenarm envisioned as ‘heart of Upper Downtown’
The program grew out of the pandemic, when open space was in high demand and restaurants needed patio seating to stay in business. Of the blocks that closed, only three remain free of vehicles: Larimer Square, the 2900 block of Larimer Street in RiNo and the two blocks of Glenarm downtown. The Larimer Square and RiNo closures could become semipermanent. Asana Partners, which owns all the buildings within Larimer Square, and a new RiNo nonprofit — in conjunction with the RiNo Business Improvement District — are in the process of applying for a street closure permit that can be renewed annually for up to five years. Afterwards, the city will decide whether or not to permanently close the blocks.
https://businessden.com/2024/06/17/two-block-stretch-of-glenarm-envisioned-as-heart-of-upper-downtown/
Denver’s Transit Visions Haven’t Come True. What Does That Mean For Transit-Oriented Developments?
Chris Nevitt, the city and county’s manager for transit-oriented development, told Bisnow he recognizes how much is riding on ridership. “With all of this development, the transit is meaningful,” he said. “The more frequency, the more reliability, the more it is comfortable and safe, the more powerful that dynamic. When transit is infrequent or unreliable or unpleasant, or unsafe, that dynamic recedes. That impact is less. And that spreads the development out in a way that generates a lot of traffic, which is not in our interest.” He said he thinks traffic on public transport will rebound and continue to benefit nearby projects.
https://www.bisnow.com/denver/news/construction-development/are-issues-with-denver-mass-transit-creating-roadblocks-for-the-regions-transit-oriented-development-projects-124882
Five key smart growth points from a new report on transit station area development
The Transit Station Area Development and Demographic Outcomes report is a treasure trove of insights for smart growth enthusiasts. It highlights how strategic transit-oriented development can create more sustainable, inclusive, and economically vibrant communities. By focusing on job growth, household diversity, reduced transportation impacts, and the careful management of gentrification, we can build cities that are not only more livable but also more equitable. As we move towards a future where urban development must meet the challenges of environmental sustainability and social equity, the lessons from this report offer a clear roadmap. In the end, smart growth isn’t just about planning for the future—it’s about creating a better present, one transit station at a time.
https://smartgrowthamerica.org/five-key-smart-growth-points-from-a-new-report-on-transit-station-area-development/
6th Street Mall reaches tipping point as business frustration grows with delayed renovations
The 16th Street Mall may be one of the most iconic stretches of real estate in Denver, but its status as a retail hub and public hangout has been threatened by the massive — and delayed — reconstruction project that pedestrians have experienced as a stifling maze of construction fences and detours for nearly two years. Large national chains that for decades anchored the mall, including McDonald’s, TJ Maxx, Hard Rock Cafe and Banana Republic, shuttered their stores, along with local retailers such as Tea With Tae Cafe, citing factors ranging from declining sales to public safety.
https://coloradosun.com/2024/06/23/16th-street-mall-renovation-delays/
Senate Committee Reviews How TOD Can Be Financed and Built in America
Though the term “transit-oriented development” was only introduced thirty years ago by architect Peter Calthorpe, the concept of concentrated mixed land-use near transit nodes has existed for centuries. TOD is experiencing a renaissance in the U.S. Recent TOD success stories can be found in diverse contexts nationwide: a commons development in small-town Concord, MA, a downtown revitalization in Collingswood, NJ, development near an Amtrak station in Emeryville, CA, and the Rosslyn-Ballston Corridor in Arlington County, VA, among many others. Given that an estimated 25 percent of housing-seeking households will desire to live in high-density housing near transit by 2030, the success of TOD will likely continue to grow.
https://enotrans.org/article/senate-committee-reviews-how-tod-can-be-financed-built-america/
The demand for parking in downtowns remains hard to predict.
The growth of working from home during the COVID pandemic era has transformed American work on a scale similar to the shift from a six-day to a five-day workweek in the first half of the 20th century. The downside is that offices have been left empty and nearby businesses that depended on the daily influx of office workers have struggled to survive. This shift has dramatically impacted every aspect of commuting and therefore made it more difficult to gauge how much parking is sufficient, especially in downtowns. Many in the office sector hoped that once it became safe for workers to return, a recovery to normal would soon follow. That has proved to be optimistic.
https://www.naiop.org/research-and-publications/magazine/2024/summer-2024/business-trends/parking-and-the-return-to-office/
MOBILITY
America’s Commute to Work Is Getting Longer and Longer (paywall)
Examining two million morning commutes over the same four-month period in 2023-24 and 2019-20, Stanford University economists Nick Bloom and Alex Finan found the number of longer drives—though still a fraction of total trips—rose the most over the four years: As a share of all morning commutes, those between 50 and 74 miles rose 18%, while those 75 miles and up rose 32%. Commutes less than 35 miles, which were the majority of all commutes, declined, according to their analysis of data from transportation research firm INRIX. Bloom says the data points to a shift away from living close to workplaces. He attributes the widespread adoption of hybrid work—allowing employees to do their jobs from home on certain days—as the key driver. A two-hour long car ride, performed twice a day, would be punishing as a regular commute. The difference now, he adds, is that many of these commuters are doing it once or twice a week.
https://www.wsj.com/lifestyle/workplace/americas-commute-to-work-is-getting-longer-and-longer-0fbf79c3?mod=djem10point
Need for Speed: Formula 1 Is Driving Billions to American Cities
That F1 management structure changed in 2017, when Liberty Media, led by president and CEO Greg Maffei, purchased a controlling interest in the sport, valuing Formula 1 at around $8 billion. Among its top growth initiatives was to bring the sport to more cities in the U.S. Whereas Ecclestone preferred secrecy around F1’s operations, one of Liberty’s most effective moves was to promote the sport via Netflix and Drive to Survive. Now in season six, the series is largely credited with helping to grow the sport’s fan base dramatically, both in the U.S. and internationally.
https://urbanland.uli.org/design-planning/need-for-speed-formula-1-is-driving-billions-to-american-cities
Ripple Effects From NYC’s Pause on Congestion Pricing
New York Gov. Kathy Hochul’s decision to indefinitely halt a long-awaited congestion pricing plan for Manhattan reverberated in cities across the country that had been closely watching the ambitious experiment in traffic management. Media outlets covering the impact called on Michael Manville, chair of UCLA Luskin Urban Planning and an expert on congestion pricing. “With a policy this controversial, it is always helpful if someone else goes first,” Manville told the New York Times. “Being able to say, ‘These guys did it and it worked out,’ seems like a small thing, but it’s much, much better than saying, ‘We’re going to stick our necks out over this untested policy.’” Manville also spoke to the Los Angeles Times about prospects that congestion pricing will take hold elsewhere. “Had New York moved forward, I think it would have opened up some breathing room for Los Angeles and San Francisco to take their fairly dormant proposals and rev them back up,” he said.
https://luskin.ucla.edu/ripple-effects-from-nycs-pause-on-congestion-pricing
Has Your City Passed the ‘Bikeability Tipping Point’?
A whopping 183 American communities achieved a score of 50 or higher on PeopleForBikes annual City Ratings this year, up from just 33 in 2019. The means 183 communities have scored at least half of the available points on the group’s signature “SPRINT” rubric that includes such measures as protected bike lanes, safe intersection treatments, and reduced speed limits that are unlikely to kill a cyclist in the event of a crash, among other factors. And when a city clears that 50-point threshold, the authors of the ratings say that its local bike culture has firmly taken root — and that every new roadway improvement will inspire more improvements, rather than a fierce fight against a car-dominated status quo.
https://usa.streetsblog.org/2024/06/25/has-your-city-passed-the-bikeability-tipping-point
The Bus Lines That Can Solve a Bunch of Urban Problems
Multiple pressures are bearing down on America’s cities. Many of them are fiscally pinched. They need to renew aging infrastructure. And they are looking to upgrade and expand their public transit offerings. Fortunately, there is one type of project that helps with all of these: bus rapid transit (BRT). Bus rapid transit is a bus line that has light rail characteristics, including dedicated travel lanes, limited stops, entry-level boarding, off-board fare collection and traffic signal pre-emption. The exact details vary from system to system. Some are little more than express buses with special branding. Others are almost rail lines on tires. One benefit of BRT is that it is much more capital-efficient and faster to implement than light rail. For many years, urban advocates have promoted light rail over bus transit, impressed by the success of light rail systems such as the one in Portland, Ore. But today’s light rail lines are extremely expensive.
https://www.governing.com/transportation/the-bus-lines-that-can-solve-a-bunch-of-urban-problems
AFFORDABLE HOUSING
Apartment starts plummet 52%
Starts for buildings with five or more units dropped 51.7% year over year to a seasonally adjusted rate of 278,000 in May, according to a report from HUD and the U.S. Census Bureau. Developers pulled permits for a seasonally adjusted rate of 382,000 apartments in buildings with five units or more in May, a 31.4% YOY drop. At the end of the month, 898,000 units were under construction, an 8.6% YOY decrease. Overall, housing starts came in at a seasonally adjusted annual rate of 1.3 million in May — a 19.3% decline YOY. Single-family builders broke ground on 982,000 million homes — a 1.7% YOY decrease.
https://www.multifamilydive.com/news/multifamily-construction-apartment-starts-labor-prices/719789/
Costco’s bold new plan for the California housing crisis
An approved upcoming Costco location in South Los Angeles (the Baldwin Village/Crenshaw area specifically) is slated to open in the coming years, and it combines the company’s more-is-more brand with a novel new approach to residential construction. The project, to be built by developer Thrive Living and architects AO, was first announced early last year in a press release that revealed renderings of a mixed-use model with multiple floors, open courtyard spaces and other amenities. All told, the build would encompass not only the Costco store (and necessary parking) but a whopping 800 residential units, including 184 set aside specifically for low-income tenants.
https://www.sfgate.com/la/article/costco-housing-apartments-south-la-19541521.php
Colorado wants to give tenants money for paying rent
In 2022, Colorado voters approved Proposition 123, which set aside 0.1 percent of the state’s income tax revenue for affordable housing programs. This includes familiar programs like housing vouchers and downpayment assistance for home purchases. But Proposition 123 also included a program that would allow tenants of new affordable housing financed by the initiative to be paid the “equity” for the homes they rent, in theory giving them some of the financial benefits a homeowner might get. The Tenant Equity Vehicle program is still in its early stages and has not been fully developed. The state has slowly started making some of its parameters public.
https://shelterforce.org/2024/06/20/colorado-wants-to-give-tenants-money-for-paying-rent/
The Price of Housing in the United States, 1890-2006
We find gross market rental yields were at least 8% annually for much of the 1900-1945 period but fell during the 1920s boom and rose during the Great Depression. Yields then fell to 7% by 1960 and to 3% by 2006. Capital gains were largely unimportant until the 1940s, after which they averaged 6% annually in nominal terms for the rest of the 20th century. In aggregate, the average annual nominal housing return across the 1890-2006 period was 11.3%, with 3.7% as capital gain and 7.5% as rental return. Over the long run, the return to housing has been dominated by the rental income component. The post-1980 period, with its high and sustained capital gains, is somewhat of an anomaly from a historical perspective.
https://www.nber.org/papers/w32593
City Council Approves $5M in Loans to Convert RTD Lot Into Affordable Housing
According to HOST, the six-story condo building going in at 29th and Welton will be made up of one- to three-bedroom units, all of which are income-restricted to households earning up to 80 percent of the AMI. For single-person households, that would be up to $71,900 and up to $92,400 for three-person families. Elevation — which has helped build affordable condos across the city in recent years through partnerships with Denver housing giants like Shanahan Development — will lease land and ground-floor community space on a renewable 99-year land lease, per city officials. Adam Lyons, HOST’s housing opportunity development director, told the council that initial and subsequent buyers will have to be maxed out at 80 percent AMI, but applicants can be lower than that “if they can qualify for a bank mortgage or bring with them some down payment assistance from some of the programs HOST funds.”
https://www.westword.com/news/denver-city-council-approves-permanently-affordable-condos-21078968
Study finds US does not have housing shortage, but shortage of affordable housing
Kirk McClure, professor of public affairs & administration emeritus at KU, and Alex Schwartz of The New School co-wrote a study published in the journal Housing Policy Debate. They examined U.S. Census Bureau data from 2000 to 2020 to compare the number of households formed to the number of housing units added to determine if there were more households needing homes than units available. The researchers found only four of the nation’s 381 metropolitan areas experienced a housing shortage in the study time frame, as did only 19 of the country’s 526 “micropolitan” areas — those with 10,000-50,000 residents. The findings suggest that addressing housing prices and low incomes are more urgently needed to address housing affordability issues than simply building more homes, the authors wrote.
https://news.ku.edu/news/article/study-finds-us-does-not-have-housing-shortage-but-shortage-of-affordable-housing
