The challenge of urban planning is eternal, but its vocabulary and techniques evolve. The latest wrinkle in the field is the concept of placemaking, a friendly word encompassing the dirty details and hard work of turning around underused and uninviting features of a community. Vacant lots, dilapidated sidewalks, stretches of vacant storefronts, poorly maintained streets all serve to drive down community morale, lower property values and to repel imagination and the investment that follows it. Fixing these problems is not easy, as government and community and landowners and real estate pros all need to get on the same page.
Placemaking addresses the fact that markets alone can’t always combat blight and that planning and community direction of some kind must co-exist with purely commercial approaches in order to successfully turn blighted areas into inviting, usable, accessible and safe places.
REALTORS® On Point (As Usual)
Naturally, REALTORS® and their associations are in ideal positions within their communities to see up close what areas need work and to have an advanced sense of what is needed to revitalize an area. Even though that’s a significant head start, the challenges remain: how exactly does need translate into action steps?
Packed with examples from around the country, “Placemaking for REALTOR® Associations” will open your eyes to credible, proven solutions to thorny problems of blight and accessibility. Unsurprisingly, we find that when REALTOR® associations take the lead in their community efforts against dilapidation, it greatly increases the chances of success.
In “More Losers Than Winners In America’s New Economic Geography,” Atlantic Cities Editor Richard Florida faces a fundamental problem in urban planning and commercial real estate. The active attraction of the affluent and educated to a city’s central neighborhoods has long been touted as an economic cure-all for cities more broadly. The premise was that these high-tech high-education worker enclaves would cause the surrounding rings of neighborhoods to experience follow-on benefits of price stabilization and heightened quality of life.
All that was needed, went the doctrine, (sometimes called “Creative Class”) was city government to subsidize the creation of such enclaves and the magic would happen. The more stolidly middle-class worker would benefit from the help handed to the upper class in a familiar “trickle-down” mechanism.
The mechanism is familiar because we hear about it a lot. Over the past 30 years, we’ve seen it touted in tax policy and in the lionization of “job creators” as public priorities are constantly rearranged to serve concentrations of wealth first, always with the promise that such largesse will “trickle down” to the middle class.
While there’s not a thing wrong with educated, higher-paid people coming to live in troubled areas of major cities, it’s a trend that has expressed itself organically for decades. The problem occurs when cities, facing declining populations and tax bases fall under the spell of dubious economic theories. They make arrangements to subsidize this trend, with the wrong expectations. As it tuns out, the problems and property values of neighborhoods surrounding such affluent enclaves are their own, and such subsidies do not work to help them.
Atlantic Cities Editor Richard Florida would know: he spent most of the 2000s advocating that cities make such subsidy. Now he is forced to admit that help to the wealthy and developers does not trickle-down to the surrounding neighborhoods. In fact, it tends to make those neighborhoods less affordable and more susceptible to flight to the suburbs.
I’ve been examining the winners and losers from this talent clustering process in ongoing research with Charlotta Mellander and our Martin Prosperity Institute team. This research divides workers into three socio-economic classes — highly skilled knowledge, professional, and creative workers, and less skilled and lower paid blue-collar and service workers — and takes into the account the wages and housing costs borne by each.
Our main takeaway: On close inspection, talent clustering provides little in the way of trickle-down benefits. Its benefits flow disproportionately to more highly-skilled knowledge, professional and creative workers whose higher wages and salaries are more than sufficient to cover more expensive housing in these locations. While less-skilled service and blue-collar workers also earn more money in knowledge-based metros, those gains disappear once their higher housing costs are taken into account.
The trickle-down effect disappears once the higher housing costs borne by less skilled workers are taken into account. The benefits of highly skilled regions accrue mainly to knowledge, professional, and creative workers. While less-skilled blue-collar and service workers also earn more in these places, more expensive housing costs eat away those gains. There is a rising tide of sorts, but it only lifts about the most advantaged third of the workforce, leaving the other 66 percent much further behind.
Housing and economic policies need to be informed by knowledge, not fads. When the leading salespeople for a policy are forced to admit the benefits for all they promised aren’t there, it’s time to look at the assumptions made in our property markets and to separate wishful thinking from economic reality.
Smart Growth is important stuff. The commercial property market and the land use decisions that go with it loom very large in the balance of a community’s economic health. Growth needs to be managed intelligently to maintain that balance, and that takes experts in commercial property engaging the community at large, shaping that balance among stakeholders.
The range of member benefits to REALTORS® now includes grants in support of Smart Growth efforts in your community. Each year, the Smart Growth Action Grant Program makes available $120,000 to state and local REALTOR® associations to support engagement with communities toward effecting public policy intelligently. How do you get started with Smart Growth? Let’s first look at how it works in multifamily.
Smart Growth in Multifamily
If you’re in the multifamily market, download and read NAR’s White Paper on Short-Term Rental Housing Restrictions. Commissioned by NAR and conducted by Robinson & Cole, LLP, this report discusses three often-used regulation techniques and provides commercial real estate practitioners with ways to counter them in the public policy discussion. In addition, the report highlights “best practices” approaches to short-term rental housing that can guide engagement with local government.
Explore the Smart Growth Action Grants
Raising the profile of commercial REALTORS® in the conversation about land use is a main goal of NAR’s Smart Growth Action Grants. Members of state and local REALTORS® associations can take advantage of three levels of support, ranging from sponsorship of educational programs and speakers to seed funding that enables a local association’s initial efforts to guide their community’s Smart Growth, to support in-depth projects with multiple funding sources, including Charettes.
What’s a Charette?
Think of a Charette as a extended sit-down with all of the community stakeholders. Property owners, commercial practitioners, government, volunteers, and others are invited to a multi-day collaborative process over the issues of land use. As communities develop transit links, population evolutions and other social and economic effects, it makes sense to be the expert voice sounding the call for a huddle about these complex issues. A NAR Smart Growth grant can help make that process a reality in your market.