Walk This Way

Frank goes so far as to advocate distance-related impact fees and “pay as you drive” insurance policies to promote less driving. But some panelists, evaluating Frank's plan on its own merits, were skeptical about its practicality and efficacy. Berkus noted that many people who drive long distances every day are employed in lower-paying service sector jobs and can't afford to live nearer work, which, he added, is why inclusionary zoning must be a prerequisite for future growth.

Bruegmann thought Frank too readily discounted the probability that soaring fuel prices would lead to the discovery and application of cleaner, cheaper energy alternatives. “So much technological change seems to be ready to explode onto the scene.” He also rejected Frank's “hypothesis” because “it is not empirically proven that higher densities lead to less pollution.” Indeed, Bruegmann thought urbanization, which is occurring on a global scale, might prove equally toxic.

In the U.S., buildings consume 40 percent to 45 percent of America's energy output and produce 60 percent of CO2 emissions. “They are our greatest opportunities for change” through energy-efficient design and construction, said Greg Kats, managing director of Good Energies, which invests in renewable energy companies. “The market is saying something very clearly,” asserted Kats, when 1 billion square feet of green construction are committed to be built over the next two years, and when green building is growing at a 40 percent to 50 percent clip within a construction sector that increases only 1 percent to 2 percent per year.

PUSHED OUT: A survey of nearly 700 developers nationwide finds that in many regions they prefer higher densities than local planners are allowing, which University of Michigan professor Jonathan Levine (right) contends thwarts buyer choices.

“There's more emphasis on green building in the suburbs, too,” said Gary Garczynski, the former NAHB president who now runs National Capital Land & Development. “It's part of the way we do business today, where it wasn't 10 years ago.” But no one knows yet what buyer demand will be for greener or even higher-density neighborhoods. Geoff Anderson, director of EPA's Smart Growth Program, said his agency polled builders earlier this year and found that only one-third of their buyers ever ask about smart-growth options. And Tim Eller, CEO of Centex Homes, said his company can build zero-energy houses right now, “but the marketplace is more about cost and benefit. If one area required zero-energy homes, people would just move someplace else.”

Frank concedes that what he's recommending is only one piece to a complex puzzle that ultimately connects future development with environmental protection. But he's also impatient with many of the caveats voiced at the conference. “We need to get rid of these ‘or' arguments, that we can either do this or do that. ‘Or' has got to become ‘and' because we need to do everything.”

Centex's reluctance to roll the dice on a product few buyers might want mirrors Wall Street's perennial attitude about investing in the built environment, which is the largest asset component in the country. Investors for decades have directed capital mostly to drivable, low-density, suburban development that “are real estate products Wall Street knows, understands, and can be traded in large quantities,” said Chris Leinberger, a professor and land-use strategist at the University of Michigan.

That investment strategy misses the boat, Leinberger asserted, because it doesn't recognize “the emerging reality of walkable urbanism,” which other panelists estimated is now attractive to between 20 percent and 40 percent of all buyers. Leinberger noted that within Washington there are now 17 regional walkable communities, versus two 20 years ago.

But Wall Street's aversion isn't surprising when such developments can cost up to 40 percent more to complete than conventional suburban communities and take longer to repay investors (which is why Leinberger said developers should target “patient equity” that's less anxious about an immediate return). Developers and builders also must do a better job explaining why these communities are worth investors' time and money. “They need to prove that walkable communities are what buyers actually want,” said Pres Kabacoff, CEO of HRI Properties, which specializes in sustainable urban developments.

That Wall Street still doesn't “get” walkable urbanism could be because the free market doesn't determine what gets built where. “The belief that sprawl is caused primarily by market failures is based on the false assumption that there is a freely operating land-use market,” Downs wrote in 1999, and not much has changed since, according to Jonathan Levine, a University of Michigan professor specializing in urban and regional planning.

Levine's presentation characterized municipal planning as a “highly regulated” mechanism that “lowers development densities, separates land uses, and mandates large roadways and parking facilities;” in other words, “a template for urban sprawl, rather than being an inevitable product of Americans' transportation, land-use, and housing preferences.” Levine illustrated his point with photos of Fruit Heights, Utah, a community of single-family homes on large lots north of Salt Lake City, which initially had been planned for attached multifamily houses that would have sold for half the price. “Zoning does not allow enough smaller-lot, higher-density product to be built,” he tells BUILDER, adding that planners often seem oblivious to housing alternatives, their relative demand, or their communal benefits. Levine's research compared compact Boston, where 83 percent of people preferring transit- or pedestrian-friendly neighborhoods are living in them; with Atlanta, where only 48 percent live in neighborhoods that match their preferences. Levine sees this as evidence of how land-use policies thwart demand.

One of Levine's solutions is regional and state oversight of local planning and zoning decisions, and he found an ally in Eller, who said Centex's experience in Minnesota, which has regional zoning, “was much easier to deal with” than either Houston (with no zoning) or Portland, Ore., (with lots of zoning). But government intervention makes developers and builders nervous, even as one panelist—Roger Platt, senior vice president for The Real Estate Roundtable—wondered about the industry's “selective libertarianism” when it comes to supporting whatever land-use mandates advance its immediate business prerogatives. On the other hand, Parris Glendening, the former Maryland governor who is president of the Smart Growth Leadership Institute, saw progress in “form-based” zoning experiments that establish municipal standards “and then allow whatever kind of building the developer wants.”

Credit: University of Michigan

Policymakers and the public may opt for refinement or reinvention of the built environment. But if the America's Next conference affirmed anything, it's that change happens faster than people and governments can comprehend it. “Rather than being excited, many people seem withdrawn, afraid, and fearful,” says Bruegmann, “sure that whatever comes will be somehow worse or more expensive than what we have now. So the reaction is to pull back.” Katz believes the country “is still at the shallow end of the pool” in coming to grips with its own metamorphosis and falls back too often on land-use formulas from a generation ago.

Still, the panelists were mostly sanguine about the country's ability to adapt, even if it takes longer than they'd like. But they also said builders and developers are kidding themselves if they believe altruism drives buyers' decisions about where they live. “Global warming is not going to be enough to make people want to live in walkable communities,” concedes Levine. “If they choose a transit-friendly neighborhood, it's because they like it. I just want them to be able to have that choice.”

Do Developers Want Greater Density Than Regulations Allow?