For Release Sunday, August 1, 2010
“That site is going to sit vacant for a decade.” That was the comment made to me by a frustrated developer as we left a public hearing after the city council voted down his planned apartment project. Although this scene occurred in a suburb of the Twin Cities, it could have happened anywhere. Unfortunately, it’s replicated time and again across the country.
This begs the larger question: if city after city continues to shoot down economically viable rental housing projects, where exactly we are going to accommodate the expected growth in this country in the coming decades? Furthermore, why are cash-strapped cities passing up economic development opportunities? I’m all for local decision-making, but the result of these decisions, multiplied across our metro areas, simply pushes more growth to the urban fringe — an ecologically and economically wasteful choice.
The plan called for an attractive apartment building in a city that has seen little new rental housing in recent decades. The market study indicated that the project could “pencil out,” or be financially feasible. Furthermore, the site in question was located along a transit line and close to freeways and employment. Everything seemed to line up.
The sticking point was leadership. Like so many other inner ring suburbs, this one has a stock of rental housing that averages 40 years old. They often suffer from functional obsolescence, plus increasing crime. Result: in the eyes of the suburb’s public and elected leaders, all rental housing has a bad reputation, and any new project is unacceptable — even with a willing developer, a good design, a market study that supports the project, and the absence of any request for public subsidy.
The city council listened as the development team gave a presentation as to why it believed the project would succeed and bring a $20 million investment to the city, all at a time when revenue is badly needed.
But the reaction? A steady stream of residents who, one-by-one, got up to oppose the project. Over a three-hour period, every single resident, save one, stood up to speak against the project.
All opposed were existing homeowners in the city and all were older than 50. One gentleman even reported that he not only owned a home in the city, but also several apartments. The fact that he kept his home in better shape than his rental properties was proof, he asserted, that rental housing is bad for the city!
The lone person to spoke in favor of the project was about 30, a recent home buyer in the city. Reinvesting in this project would be good for the future finances and demographics of the city, she said. One could tell she was having second thoughts about her home purchase as she explained how she’d formerly lived in a neighborhood where renters were embraced. But here, even as a homeowner, she was unable to meet new neighbors, the area seemingly unfriendly with shades drawn and nobody about.
Something is out of balance. A recent Urban Land Institute publication, Housing in America, predicts the coming years’ demographic and economic trends will mean substantial demand for rental housing nationwide. But concurrently, millions of acres will become available for redevelopment on greyfields, often obsolete retail centers. More often than not, rental housing of some kind is an appropriate use for these sites. Developers and many city planning departments are there. But where’s the local leadership?
Michael Carliner, visiting fellow at the Joint Center for Housing Studies at Harvard, is researching issues surrounding rental housing for a report scheduled for release later this year. He agrees that my story is not uncommon in suburbs (and sometimes core cities) across the country. “It is more common for suburbs to zone it out,” he says, referring to multifamily housing in general. “They don’t make it easy to develop it. These are very local decisions.”
Local decisions, indeed, and I can sympathize with the city council’s perspective. Like those residents opposing the project, the council members were older, and remember building their home when the city was a growing suburb, everything was new and shiny, kids played in the parks, schools were full and crime was low. Now the kids have grown up and the homes need some renovations. The apartments built in the late ’60s for young baby boomers have become run down, and full of people the city founders don’t recognize. Crime festers. Even the old drive-thru on the drag is closed and falling down. (This is like a Bruce Springsteen song.)
Multiply this scenario by the hundreds of American cities and suburbs that act against the welfare of their region and their city itself. One’s led to agonize: what is the future of our metro areas?
I’m all for local decision-making and public process. But one has to fear for the future of our country when real estate development decisions are driven by an angry and vocal few. One thing is certain: if that lone 30-year-old woman in favor of the project wants to run for city council, I’ll contribute to her campaign.
Sam Newberg is a Twin Cities-based writer and real estate consultant. His e-mail address is email@example.com.
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