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Business Management / Economy-Finance

Land Development Economics 101
Tuesday, May 10, 2005  

Merging concepts and reality provide new lessons.

By Rick Harrison

Over the past 20-25 years, the terminology in the land development industry has evolved and morphed to represent a wide range of concepts and strategies. Two of the them, “New Urbanism” and “Suburbia,” have lost their effectiveness for a number of reasons, not the least of which is that they don’t make sense anymore – especially in the area of economics and finances.

New Urbanism
In the past two decades we have been exposed to “New Urbanism” as a means of resolving our country’s suburban sprawl ills. This New Urban movement promises a new age of living standards that embrace the past with small blocks, alleys, mixed land uses, grid street patterns and independence from the automobile. New Urbanism encourages neighborhood interaction by featuring front porches, high densities and narrow streets.

This high density, architecturally driven solution to sprawl forces residents to interact with each other with little privacy. The New Urban narrow streets are designed to discourage the use of cars. In theory residents are supposed to walk and bike within the community, and use public transportation for longer distances.

That said, after two decades of educating the public, it seems only 20% of the total home market desires the traits of New Urban concepts. This means that 80% of the nation’s home-buying market craves as much space as possible and these people don’t mind driving their cars.

Suburbia
As a social model, suburban living often misses the point. Generally, suburbia contains little or no pedestrian connectivity, lacks architectural character, and is deprived of local conveniences. Suburbia is built on a set of rules based on zoning and subdivision regulations.

The land use designations are often determined by a snapshot of farm ownerships, where residential and commercial developments follow an existing farm boundary instead of a dimension that would work the best for future use. These ordinances only dictate minimum dimensions and square footage requirements.

Designers and developers read these rules as absolute dimensions, thereby encouraging the same subdivision designs that have been common since World War II. The cookie-cutter streetscape that now exists in every town is the result of stagnant planning methods that have been used, unchanged, for the past half century.

New Suburbanism
New Suburbanism comes from a completely different school of thought than New Urbanism does. Contrary to New Urbansim, New Suburbansim appeases the majority of the home-buying market, those who hunger to have as much space as possible while still maintaining affordability. Fresh solutions for integrating residential and commercial relationships, density, space, and connectivity are all addressed in New Suburban design.

For almost a decade, Coving (a technique used in New Suburbanism) has been discussed in many books and periodicals. The premise of coving is to enlarge the streetscape with homes that form meandering curves that are independent of the street. Coving is economically viable because the design relies on new patterns of street design that significantly reduce street length when compared to conventional suburban subdivision design. For any given density, coved designs reduce street length and in turn deliver more useable yard space with less construction cost.

Coving started a series of new design techniques that focused on reducing paved surfaces and enhancing neighborhood livability. The advantages of coving extend beyond the increased livability of a subdivision. With reductions in impervious surfaces, coving is superior to conventional planning both economically and environmentally. Coving has also disproved the theory that in order to have space, a neighborhood must have a low density. In this new era of design, space and density are two entirely separate functions.

Space, Not a Final Frontier
Ordinances regulate space by demanding a series of minimums. These differing minimums do not deliver any changes in the perception of space.

For example, take two zoning classifications, R-2 and R-4. Suppose the R-2 zone has a 12,000 sq.ft. minimum lot size and the R-4 has a 7,000 sq.ft. minimum lot size. Both offer 10’ side yards and 25’ front yards. As viewed from the street or from within the homes looking out the front, both will have the same sense of space. One lot may deliver a larger home than the other, but the perception of space does not differ. Homes in both the R-2 and R-4 zones will be placed 110 feet front to front.

Now imagine delivering a 7,000 sq.ft. minimum lot with the look and feel of a lot larger than 12,000 sq.ft. Using the planning methods that are associated with New Suburbanism, that dream is reality. New Suburbanism offers the density of a 7,000 sq.ft. lot, but delivers an average lot size in the 10,000 sq.ft. range. Now reduce the lot side yards to between 5 and 7 feet, and you can actually build a larger house than the 12,000 sq.ft. zoning.

In New Suburbia, we can deliver neighborhoods with more space that everyone can enjoy. The increased space is noticeable when driving through the neighborhood and from inside the homes.

Few, if any, home buyers care about actual lot square footage, they only care how large the lot looks and feels. This hybrid of design allows these new neighborhoods to have a greater impact on solving our problems with sprawl without destroying the desires of the suburban home buyer.

Needless to say, increased density in the suburbs has a positive impact on sustainability, and as we all know, increased rooftops are great for local businesses.

The F/W Ratio is the Answer
In a perfect world, a 70’ wide lot would only require 70’ of street to be built. The reality is that for any given lot in most suburban developments, the ratio of street length to serve the minimum required lot width (the F/W ratio) is somewhere in the neighborhood of 1.3 to 1.6. Some developments have a better ratio, however, most are in that range. Because of the short blocks required for the walking connectivity and traffic disbursement in New Urban designs, the F/W ratio is usually much worse. Why do you need to build more street than needed?

Again, referring to the perfect world, we would have one long block that has no side streets, interconnections, etc. As an example, if the W/R ratio (lot width / length of R.O.W.) of a development were 1:1 then a 70’ X 100’ lot (7,000 sq.ft.) would need just 2,100 sq.ft. of R.O.W. per lot (70’ road width X half of the 60’ right-of-way). In this case the overall density could be over 4.7 lots per acre.

43,560 sq.ft. per acre = 4.78 lots per acre
(7,000 sq.ft. lot + 2,100 sq.ft. in R.O.W.)= 9,100 sq.ft. per lot

Now suppose the F/W ratio is 1:1.6. This means for every 70’ wide lot, you’re building 112’ of street (70’ wide X 1.6). At this rate each lot consumes 7,000 sq.ft. + (112’ X 30’) = 10,360 sq.ft. This ratio would yield a maximum density just over 4 lots per acre. Now for the enlightenment, with new technological advances, we can use new methods that can achieve density with a far lower F/W ratio. If we can have F/W ratios less than 1:1.0 then in theory, we can increase density. Instead we use lowered F/W ratios to provide an increase average lot size, which delivers the park-like home settings that the suburban home buyer wants. Traditional design methods are very simplistic and can be understood in minutes; this new era of planning is difficult to understand and master. In the real world where sites have odd shapes and difficult topographic features, these new planning methods become even more attractive. The reduced development costs can then be applied to better landscaping, walks, and architectural features.

New Multi-family Housing Options
Another aspect of New Suburbanism involves taking a fresh look at housing types. As an example, let’s target the twinhome, or duplex. The first duplex units were joined by common interior walls and shared common utility runs. There were tremendous cost savings.

With today’s regulations, attached units must have costly structures between the units, and most have individual utility systems. In other words, construction of attached units no longer has the huge financial benefits that it did in past decades. Critically looking at current multi-family housing, we are able to find ways to improve upon it.

A twinhome unit that is 28 feet wide with a two-car garage is a good example of current multi-family housing. This unit is a total of 55’ deep. From the streetscape, the garage defines the architecture with only 8 feet left for the facade. In other words, the look from the street is the garage, an entrance door, and perhaps a very small window. The majority of the living space overlooks the unit to the side (typically 20 feet parallel to the unit next door) and a small rectangular rear yard that is likely overlooking other home rears or busy arterial streets. With 20’ side-to-side clearance between duplex structures, in this example, the lots are 38’ wide. The streetscape that is produced by the typical twinhome development ends up looking more like entering a mini-storage facility instead of a residential neighborhood.

Introducing the BayHome
BayHomes are architecturally similar to a typical single family home in a New Urban neighborhood. They are narrow, have a front porch and parking is located in the rear. The term “Bay” comes from the shape of the open space along the home fronts, and has nothing to do with the architecture of the home.

Architecture is a critical component of a BayHome. The front is defined by a proper porch, not something that emulates a porch. Once entering the home from the front porch, you would see an open living area and have a direct view into the kitchen. This open floor plan on the “front – living” orientated layout allows window placement to flow from the bay-like landscaped commons to the bulk of the living area. Careful placement of interior walls, attention to window locations and staggering the units themselves deliver a panoramic view of the common open space from within most, if not all, of the BayHomes.

Because of the freedom needed on design and placement, BayHomes use multi-family design standards with common space and walks in the front, and private drives serving the garages along the home rears. BayHome planning can easily provide three-car garages on most of the units, feeding the suburban need for vehicular storage. In fact, four-car garages are also possible. All of these features are located in one unit, which is typically 22 to 28 feet wide.

As mentioned above, the BayHome units are staggered, which creates panoramic views onto open space… not the unit next door. The side yards of these units are reduced to 10 feet between structures. This means that from a planning perspective, BayHomes are more efficient than duplex structures. The private drives reduce paved surface area, even with three-car garages. BayHomes will obsolete the twinhomes, and are competitive with townhomes in terms of density and profitability.

Land Use in New Suburbia
New land use techniques in New Suburbia create new financial models. Traditional suburban planning provides transportation based, transitional zoning that was based in Levittown, PA. This meant that major streets were lined with strip commercial or high-density multi-family housing.

As one drives farther into a conventional development, the lots and home values increase in size and price. This drive through the cheap housing to get to high priced homes does not make sense. Placing the highest density in the most undesirable living conditions and allowing only a lucky few to overlook quality space makes no social sense. And finally, trying to sell an upper-end home by driving through lower-end housing will not enhance the value of the home.

A new look at land use in New Suburbia showcases neighborhoods and gives lower income families pleasant living environments by reversing the transitional zoning. Instead of having plain housing at the entrance to a neighborhood, it makes more sense to place the architecturally deficient units in pockets within the topographically pleasant areas of the site, giving the best views to the most people.

Some concerns have been expressed over traffic volumes if the densest areas are located within the development, versus along its edge. However, at densities that are acceptable in suburbia, traffic should not be much of an issue.

Harmonious Commercial and Residential
The New Urban movement promotes the blending of both commercial and residential uses, not just on the same block, but also in the same building. In the bedroom communities of suburbia, this type of blend may not be as desirable, but surely in some locations it may be viable.

The largest problem that concerns both urban and suburban living are the conflicts that arise between commercial and residential land uses. Let’s face it, the loading docks and ugly commercial rears present terrible views for the surrounding residential neighborhoods.

The combination of awful viewscapes and the practice of placing the highest density near the edges of a development, places the most windows looking at the least appealing views. This creates an expensive proposition. The expense comes from either huge screening costs, devalued residential property, or both.

By taking a fresh look at commercial design, we are able to beautify the buildings and the site design so that it would not devalue the surrounding property. Picture a commercial center where the stores are front-loaded and the rears have their loading docks replaced by decks, gardens, and patios.

We are also able to design the architecture of the commercial buildings so that the buildings blend in with surrounding residential developments. Instead of having to screen this type of commercial area, we can actually place home fronts in fairly close proximity to it. Integrating commercial businesses with a residential development allows the commercial businesses to not be solely dependent upon vehicular traffic. Instead they have now become a pedestrian destination with access to the development through a connective pattern of walkways.

All of these advantages are possible without destroying the automotive convenience or the visibility of the retailer to the passing car traffic.

A Desperate Need for New Rules
Ordinances themselves are the main problem with land development. Many cities provide for innovation by providing Planned Unit Development (PUD) zoning. A PUD is a legal vehicle for developers to come up with a better product. However, this zoning is often used to circumvent the system and squeeze more units on a site, creating less useable space. In these situations a few developers have ruined the image of the PUD. For this very reason many communities are scared of these ordinances.

A reward-based system provides increased density for developers who provide a more functional neighborhood than can be achieved by using minimums. A reward-based system would encourage the best possible development that makes social, environmental, and economic sense.

The reality is that not all builders and developers care about creating nice neighborhoods and most do not naturally possess the vision to create an outstanding community. If the simplistic rules and regulations are all they understand, you will have simplistic neighborhoods. If given a set of regulations that lead the developers and builders to create better neighborhoods that are far more marketable, yet cost the same or less to construct, there is no way to lose. In fact, in this scenario the risky development uses the cookie-cutter pattern!

New Suburbia becomes a more attractive option for the home buyer. The automotive industry works this way. How many new car buyers actually “need” that new car? The fact is they want it and will take a loss trading in their perfectly functional car to get it. The market responds in the same way when home sales include people who simply no longer want to be an address along a monotonous and claustrophobic street.

About the author: Rick Harrison is the founder of Rick Harrison Site Design Studio and the innovative planning concepts of Coving, BayHomes, Connective Neighborhood Design (CND), and Suburban Town Centers. Using these design concepts, the firm has planned over 490 neighborhoods in 38 states and 7 countries totaling over 70,000 lots/units.

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