In my last post, I introduced the idea that
neighborhoods are more stable if the housing isn’t all of the same type. I argued that homeowners are more willing to
make investments in expansions, remodels, and even maintenance tasks such as
painting if their chances of later recovering their costs aren’t inhibited by
comparison with nearby homes that are nearly identical but unimproved.
Among the
urbanist ideas I’ve introduced to people, the concept that neighborhoods need
variety to thrive is the one that many find most puzzling. Many have a mental image of 1990s subdivisions
where they’ve always dreamed of living and where the rows of little differentiated
stucco McMansions are doing just fine.
But twenty
years is an inadequate time over which to judge the stability of a
neighborhood. I’ll instead ask those
people to go back further in time and to consider two types of neighborhoods
that co-exist in many towns. The first is
the neighborhoods that were built before 1930 and almost always include a
variety of housing types. The second is
the neighborhoods that were built in the 1950s and late 1940s, in the first
flush of the Levittown model for accommodating the post-World War II housing
boom and are largely composed of what Malvina Reynolds called “little boxes
made of ticky-tacky”.
In most
towns, the older neighborhoods are doing just fine. At any one time, a couple of the homes on a
block might be showing their age, but then a young couple with energy or a
older couple with savings will snap up the property and, with confidence in their
investment, happily bring it up to match or to exceed the surrounding homes. (Admittedly, the typical location of these
neighborhoods in the more walkable parts of town is also a factor in their
vitality.)
My wife and
I live in a house that was built in 1920 in a neighborhood that was developed
in 1914 and observe that regeneration process constantly going on around us.
Indeed, in many
communities, the concern isn’t the upkeep of the pre-1930 developments, but how
to keep the pace of gentrification under control.
Conversely,
the 1940s and 1950s neighborhoods, even if still mostly neat and tidy, aren’t
showing the same robustness. Perhaps the
only improvements being made are the conversions of garages into spare
bedrooms, modifications that are often illegal and will need to be unwound
before the homes can be sold. Nor are
buyers with energy or deep pockets attracted to invest in those
neighborhoods. The neighborhoods may
still be reasonable places to live, but they’re not progressing in a good direction.
And there is
no reason to argue that the 1990s developments that some may admire aren’t on
the same glide path, fifty years further out from the same crash landing, as
the 1940s subdivisions which we now find unappealing.
There are
ways to build more differentiated subdivisions, but first let’s look at why we
moved from the 1920s model of land development to the 1950s model.
There were
several factors that came together in the years immediately following World War
II. First, there was pent-up demand
after the economic malaise of the 1930s and the commitment of all resources
toward the military during the war years.
The generation of returning soldiers eager to resume their lives also added
to the pressure for housing.
Furthermore,
several economic reforms of the 1930s, including tax deduction for mortgage
interest, which had only modest effect when first implemented, became
significant drivers for new housing after the war.
To meet the
new demand, builders found ways to apply the assembly line model pioneered by
Henry Ford to the home-building business.
But assembly lines work best when the output is nearly identical, so
there were financial reasons for homes to look alike.
Lastly, we
began asking more of developers, a progression that continues today. While a developer a century ago might have
gotten by with a two-inch water main (good luck in the case of fire) and an
expectation that the homebuilder would install a septic system at his own cost,
we now require developers to build water systems capable of suppressing fires,
to connect to municipal sewer systems, to bury all electrical, gas, and
communication lines, and to contribute to the cost of infrastructure
improvements elsewhere in the community.
Developers
have shown that they can still make a profit with the greater requirements, but
a primary strategy employed to stay profitable is to build homes efficiently
and to sell them quickly, both of which require homes that are similar in style
and details. (A secret of housing
development is that absorption rate is critical to profitability. Holding a built home, or even an improved
lot, for several years can wring all profit out of the development effort. So building and marketing homes to a limited demographic
segment that can be targeted effectively is a proven financial strategy.)
Obviously, I’m
not suggesting that we should return to the days of two-inch water mains and
septic fields because they would result in better neighborhoods for our
ancestors. But at the same time we
should recognize that putting more financial demands on developers results in “little
boxes made of ticky-tacky”. If that isn’t
the built environment we wish to leave to our children, it’s incumbent on us to
change the rules.
(While it’s
true that some developers try to ignore the incentives that we’re inadvertently created and to build projects that they think will better meet community needs, but for many it’s only a path to bankruptcy. Whether building homes, toaster ovens, or
toothpicks, employing suboptimal strategies is rarely a path to financial
success. Smarter regulation, not
reliance on benevolence, is the only reasonable path to better outcomes.)
So, how do
we incentivize better outcomes? I’ll offer
three possibilities, although none of them are easy or universally applicable.
First, the
Pittsburgh reader who asked the question that triggered this topic writes that
he grew up in a neighborhood that was a builders’ showcase of 55 years
ago. The lots were improved and
individual builders were then solicited to build their best homes in exchange
for marketing benefits. The reader
confirms that the neighborhood has stood up well over time, better than other
nearby monolithic neighborhoods.
Second, in
his book “The Last Harvest”, Witold Rybczynski tells of a greenfield
development near Philadelphia where the local authorities required a certain number
of the homes to be built by a home builder other than the developer. The goal was to broaden the demographic span
of the project. But facilitating an agreement
between the builders wasn’t easy. Early
in the process, the intention was to have three builders for the project, but
when the third builder opted out, unhappy with his prospects in the deal, and
no replacement could be found, the authorities let the development proceed with
only two builders.
Lastly,
smaller projects help. Twenty homes of
similar style and vintage have a less stultifying effect than two hundred
similar homes. But our entitlement
processes actually encourage larger projects.
The costs of conforming to local regulations and CEQA aren’t
proportional to project size. The two-hundred-home
development would have less than ten times the entitlement cost of the twenty-home
development, so the larger project has lower entitlement costs per home and
therefore more potential profit.
The same
problem applies to more walkable urban projects. Economies of scale in both entitlement and
construction argue for ten-acre walkable projects, even if long-term city financial
health argues for ten one-acre projects.
Over fifty
years ago, Jane Jacobs made her case for “fine-grained development”. She was absolutely right, but we’ve only
moved away from her ideal in the years since she expressed it.
A few years
back, I was involved in an entitlement process that showed the difficulties of trying
to break the monolithic mold. Next time,
I’ll tell the story.
As always,
your questions or comments will be appreciated.
Please comment below or email me.
And thanks for reading. - Dave Alden (davealden53@comcast.net)
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