Three Game Changers in Rebuilding America by Martin Melaver
I had the opportunity recently to participate in a 3-day workshop in Washington, DC, sponsored by the American Architectural Foundation, on the design of sustainable cities. The workshop, put on three times during the year, focuses on three case studies particular cities are currently focusing on.
In the event I participated in, the projects showcased were: Brattleboro, VT and its efforts to redevelop a sliver of brownfield land on the edge of Main Street, fronting the Connecticut River; Prince George’s County, MD and its efforts to create a multi-modal corridor in what is currently an asphalt speedway; and the Lower Ninth Ward in New Orleans, LA and its efforts to prioritize a monumental list of revitalization projects and create a clearly-defined implementation program. Brownfield mixed-use development, multi-modal transportation, restoration of community through restoring affordable housing and catalyzing economic development: it’s a heady mix of issues most cities looking to restore their urban core areas are all facing today.
In one respect, the challenges each of these three municipalities are facing seem quite distinct. Brattleboro’s big challenge is to persuade town leadership into playing an active role as at least a quasi-developer of the site. Prince George’s County’s key issue is to have its planning commission and the state’s transit authority working collaboratively from the get-go so that a shared vision and shared strategies facilitate ease of planning, financing, and implementation. The Lower Ninth Ward’s daunting challenge is to tunnel its way out of mounds of planning efforts from the five years following Hurricane Katrina, execute on some low-hanging fruit projects, and start the monumental work of rebuilding a community that once housed 18,000 residents (now about 2500).
But the differences among the three projects and locales mask a few larger, shared challenges or opportunities that reflect a common landscape throughout the country. Each project underscores market forces highlighting 1) the growing in-fill of neglected urban areas, 2) the need to shape development projects through systemic thinking (transportation, housing, economic development, etc.), and 3) the need for innovative financing structures through various public/private partnerships. And the intersection of these three market forces brings us to three game changes in American life today. These changes are in some ways subtle, in other ways obvious. But they are revolutionizing the way we will be thinking about rebuilding our cities in the decades to come.
Game-changer #1: The shift back to urbanization. We are not only an urban culture for the first time in US, history, but we are in the early stages of seeing a rebound from over a half century of suburbanization. A ULI study back in 2004 noted that over the next 20 years, 50 million Americans—or about 40% of the current non-urban dwelling public—will be moving into cities with dynamic work/live/play environments. A more recent study (May, 2010) by the Brookings Institute on the status of metropolitan America (http://www.brookings.edu/reports/2010/0509_metro_america.aspx) provides a more thorough-going analysis of the same phenomenon: basically, greater growth within urban core areas, although with the caveat that a significant portion of that growth is happening on the fringes of these urban areas. The significance for anyone concerned about the future viability of his or her town could not sharper: There are going to be winners and losers in this migration back to urban environments. Get it right—like Portland or Austin—and you are likely to ride a wave of livability for decades to come. Get it wrong—maybe Detroit is the whipping boy here—and you’ll find yourself having to downsize your extensive environs significantly.
Game-changer #2: Shaping urban development systemically. This past year has seen an unprecedented level of collaboration among three of the most important federal agencies around: DOT, HUD, and EPA. The three agencies, forming a Partnership for Sustainable Communities, has basically come to the right-headed conclusions 1) that housing, transportation, and environmental issues are all interrelated, and 2) that their respective funding of projects really ought to leverage each other. And so out of such basic, obvious, and desperately needed collaborative thinking came the decision to agree upon Six Livability Principles (more transportation options; economic competitiveness, equitable, affordable housing, supporting existing communities, value communities and neighborhoods, leverage policies and investment) which would then be the basis upon which the three agencies would allocate federal grant monies. Again, the message could not be clearer to any municipality looking for largesse: Following the money means planning systemically. As the August 23 deadline looms for community and regional planning grants under the Sustainable Communities Partnership, every city in the country is scrambling to figure out how to tell its own story of how it is working collaboratively across historically-siloed lines to plan for systemic urban revitalization. It’s creating a sea-change in how governments are suddenly having to function.
Game-Changer #3: The vacuum created by the collapse of the conventional capital marketplace. Most anyone involved in real estate development these days is painfully aware that the conventional capital marketplace has dried up. There’s virtually nowhere to go for either debt or equity. Dead. Kaput. So if you are involved in development today, one of a handful of things is happening: you are trying to dig yourself out of negatively-leveraged holdings; you are sitting on a boatload of cash and hoping to cash in on hugely discounted sales and foreclosures; you are devoting your time to planning until the next up-cycle occurs. OR, you are looking at creative financing schemes to help move projects forward. And those creative schemes invariably involve some form of public/private partnership. These various PPPs come in a whole slew of shapes and guises, but they invariably involve the following paradigm shifts:
¨ The public is weighing in with its own interests, as the price of admission for helping source the capital (on either debt or equity side or both). Which means that most development occurring these days has a strong social/public component.
¨ There is a strong push not only to develop projects with a public interest, but to structure these deals in ways that extend the time-frame of investment. Instead of having private capital invest with a typical short-term exit strategy (money enters then exits a community), public/private ventures mean that the length of investment in a community is likely to be extended.
¨ There is also a strong push for deals to result in a type of revolving loan structure. Typically, private investment capital exits the community after a short period of time. Private/public ventures can result in a tendency to have at least a portion of investment returns re-invested in future community projects.
So: paradigm shifts in population demographics, in governance, and in capital structure are all happening simultaneously, a perfect storm for shaping long-term investment in projects that integrate housing, transportation, economic development, and environmental stewardship within urban core areas. This perfect storm could not have happened at a more opportune moment, just when we need to design cities that are more livable while also being more benign on our larger natural habitat.
Read the original post at Melaver-McIntosh.com.
Why 'smart' homes are 'green' with envy: green homebuilding set to expand by $38 billion by 2010
June 9, 6:11 PM • Atlanta Green Matters Examiner • Jill Elizabeth Westfall
Smart was the buzzword that swept through residential real estate in the 1990s, starting with the grand unveiling in the early 1990s of what is considered the granddaddy of all Smart Homes, Bill Gates’ 66,000-square-foot Smart House along the shores of Lake Washington. But many “Smart Homes” have gone the way of the oh-so-smart classmates you knew growing up. They hit a wall, so to speak. There are still so few cost-effective applications for all that upgraded wiring. A decade later, the mainstream market still talks about “Smart Houses” in terms of their potential.
Talk to experts with a birds-eye view on the market and you quickly become aware of a budding new trend: Green. “Green” is the new “Smart” in real estate, with a high-end market and awe-inspiring amenities and gadgetry once attributed to “Smart.” “Green” is that hippie classmate you once thought you knew – but didn’t. It’s taking on surprising new growth and according to industry experts this is only the beginning.
Business visionaries like Charles Brewer, who founded Mindspring, are now going “Green.” So are celebrities like George Clooney, Virginia Madsen, Amy Smart and Julia Roberts. Roberts drives a Prius, and is building a solar-powered house. Even boomers like Jane Fonda are getting into the act – she’s been spotted driving a Prius around Atlanta.
"Green homebuilding is at a tipping point among the builder population," said Harvey Bernstein, vice president of Industry Analytics and Alliances for McGraw-Hill Construction. The market is expected to expand to $38 billion by 2010.
Brewer founded Green Street Properties in 2001 and developed Glenwood Park in Atlanta, where he sold a Southern Living Idea House with amenities like a cistern system connected to satellite service. The system collects rainwater to water the yard and the satellite checks for rain. The system automatically dumps water in advance of a storm. Tiles on the roof of the main building work just like solar panels to power the guesthouse. Lights are programmed to turn on and off automatically, the water heater heats instantly. Permeable concrete around the home allows rainwater to reach the ground.
“Green” homes rival “smart” homes in terms of awe-inspiring features and amenities like geothermal heating and windows with photochromatic glazing. “Climate change is the greatest threat that our planet faces today,” says Dennis Creech, the Executive Director of the Southface Energy Institute, which promotes environmental awareness and helped initiate EarthCraft - a green-building program in Atlanta.
“It’s all about energy. Buildings use a third of energy, which is at the foundation of green building. If we don’t start addressing energy use in buildings, the quality of life over our entire planet will be affected.”
Martin Melaver, the head of Melaver development, is right at the cutting-edge of green – both in terms of residential and commercial real estate. Over 80 percent of his company is LEED accredited – a program established by the United States Green Building Council. “We have some of the first LEED-certified buildings anywhere including the first LEED shopping center in the country, the first LEED McDonald’s in the country. We have about a dozen LEED projects in motion in around six Southeastern cities, with a total market value of $250 million. And I’m in the process of putting together what amounts to the first green portfolio of properties in the United States,” he says.
In his personal life, Melaver is going one step beyond what he is doing professionally: “We’re beginning a major rehab of our family’s home in Savannah and trying to do it off the grid. The energy is going to be solar power. There is not enough wind yet, although there is experimentation off the coast. With respect to water, it will depend on how much of a willing partner the city is. We’re considering a Living Machine. The waste system is filtered through a series of plant materials, natural material, and filtering materials that filter the water and loop it back through your system in about a week’s time.”
"Some experts predict that within a decade almost all home builders will be engaged in green building practices and many of them will be doing so through formal programs," says Ron Jones, the Editorial Director and Founding Partner of Green Builder Magazine. I can see a time in the not-so-distant future when we won’t even have to use the term “green” because those who are not building green will no longer be in the business."
An example of one of the most high-tech all-green communities, nationwide, today is Fern Valley in Tewksbury, N.J. - one of the wealthiest towns in the United States. Anthony Sblendorio had the vision to build a community that would actually enhance the environment. To realize that dream, he worked with scientists, engineers, environmentalists and designers to create it. They created high-end homes that are not only “green,” they are also “smart.” They conserve energy, have enhanced indoor air quality, recycle rainwater for irrigation and flushing toilets, and also connect to the latest information technologies through high-tech wiring. Each home’s garden is a key component of the overall design: the plants feed on water from rain barrels, which collect the water from the roofs. Builders educate homeowners on maintaining the “greenness” of their homes - throughout re-sales and renovations.