Tag Archives: Density

702,445 – DC’s population reaches heights not seen since 1975

In case you were wondering what the hex code color is for 702,445, here it is.

While the pace of DC’s population growth has slowed a bit in the last year, the city nonetheless officially surpassed a big milestone this week. According to the state-level estimates from the US Census Bureau, DC topped 700,000 residents for the first time since 1975.

Last year’s estimates meant the city was close to this mark; the city even celebrated the (estimated) birth of the 700,000th resident back in February 2018.

Milestones like this are a good time to step back and look at the broader context:

  • 700,000 is still 200,000 below DC’s all time peak population
  • The current level is more like 100,000 below DC’s sustained peak population level (absent war-time restrictions)
  • The pace of growth is impressive, but still slower than historic rates when DC had greenfield growth opportunities within the District limits
  • Population growth will continue due to the number of units already under construction, with approximately 15,600 units under construction right now.

On the other hand, it’s worth remembering how small DC remains. Brooklyn alone has a similar land area to the District (71 square miles to DC’s 61 square miles) housing nearly 4x as many people:

https://twitter.com/profschleich/status/1075504407431798786?s=21

Likewise, the new estimates put DC’s population density at approximately 11,500 per sq mile, still less than Chicago, Boston, Philadelphia, and any number of other cities.

Even DC’s peak population of 900,000 would only yield a population density of 14,750/sq mile – less than San Francisco, Cambridge, Jersey City, Somerville, and others.

In other words, there’s lots of room to grow.

The challenges of adding housing in single family neighborhoods

Too often, news articles on housing prices fall into easy traps and cliché, whether in discussing gentrification or city vs. suburb tropes. But Conor Daugherty’s piece in the New York Times (The Great American Single Family Home Problem) hits all the right notes.

In it, he tells the tale of a modest redevelopment proposal to redevelop a single family home into three units on the same lot. The political opposition is fierce, leading to years of delay and legal proceedings. And this is for a parcel already zoned for additional density; this particular saga doesn’t even touch on the challenges of rezoning an area currently occupied by single-family homes.

A couple of things stand out to me:

The missing middle: The author frames the cost trade offs well. Lots of cities allow downtown and highrise development, but this requires expensive construction techniques, and thus requires pricey rents to pencil out. Smaller-scale development (low-rise apartments, duplexes, townhomes, etc) can pencil at much lower prices – the thorny issue is the politics of building in existing single-family neighborhoods.

The problem is that smaller and generally more affordable quarters like duplexes and small apartment buildings, where young families get their start, are being built at a slower rate. Such projects hold vast potential to provide lots of housing — and reduce sprawl — by adding density to the rings of neighborhoods that sit close to job centers but remain dominated by larger lots and single-family homes.

Neighborhoods in which single-family homes make up 90 percent of the housing stock account for a little over half the land mass in both the Bay Area and Los Angeles metropolitan areas, according to Issi Romem, BuildZoom’s chief economist. There are similar or higher percentages in virtually every American city, making these neighborhoods an obvious place to tackle the affordable-housing problem.

“Single-family neighborhoods are where the opportunity is, but building there is taboo,” Mr. Romem said. As long as single-family-homeowners are loath to add more housing on their blocks, he said, the economic logic will always be undone by local politics.

Capital-A Affordable, vs. affordable: The three units proposed for the lot wouldn’t be cheap, but (crucially) they’d be cheaper than a re-habbed SFH on the same lot – and there’d be more of them.

They are estimated to sell for around $1 million. But this is an illustration of the economist’s argument that more housing will lower prices. The cost of a rehabilitated single-family home in the area — which is what many of the neighbors preferred to see on the lot — runs to $1.4 million or more.

The “economist’s argument” might be sound, but it’s a hard sell for the neighbors.

This kind of evolutionary redevelopment would’ve been completely natural and non controversial before the advent of zoning.

It’s always worth remembering how different the Bay Area’s housing market dynamics are. Daniel Kay Hertz notes that many of the same issues are in play in weaker regional markets, though the way things play out is quite different:

Aaron Renn doesn’t think much of the Bay Area’s strategy of generating affordability through redevelopment of single-family housing:

https://twitter.com/urbanophile/status/937159416847175680

First, it’s hard to say this is a cogent strategy; the vast majority of single family homes aren’t going to be rezoned anytime soon.

Second, Renn is correct, historically – at least since the advent of zoning. This was true for the Bay Area, too – suburban development offered a then-cheap and cost-effective way to add housing to the region’s supply. But that was decades ago (the NYT article includes maps showing the expansion of the suburbs over the recent decades), and the region has run out of room for new/expanded suburbs within a reasonable commuting distance.

Renn’s implied regional strategy isn’t going to work well in the Bay Area, either. Consider the recent articles on Bay Area super commuters. Relying on Stockton to be San Franscisco’s bedroom community has severe costs, after all.

Building Height and Density in Center City Philadelphia

With a hat tip to this tweet from John Ricco, linking to this compendium of tall buildings in Center City Philadelphia from the Philadelphia City Planning Commission. The document provides a brief profile of each building, showing building height, site size, gross floor area, floor area ratio, year of completion, and floor count.

Example of information from the Philadelphia FAR catalog. Screenshot from the document.

Example of information from the Philadelphia FAR catalog. Screenshot from the document.

Pulling the data into a spreadsheet allows for some quick charts to show the relationship between building height and density.

Height v density

It’s generally true that taller buildings are more dense, but not universally so. Buildings with the same density come in different shapes. Both the Liberty Place complex and the 230 South Broad St have an FAR of ~19.5; but Liberty Place includes a 960′ and 783′ tall towers. 230 South Broad St is just 250′ tall, but the building’s floorplates occupy 100% of the site.

By comparison, the densest zoning in DC is for 12 FAR (the C-5 zone), located in one of the few exception areas for DC’s height limit (allowing 160′ tall buildings along some blocks of Pennsylvania Ave NW). Quite a few blocks are zoned for up to 10 FAR, but nothing in DC can be built to an FAR of 15, 20 or 25, as in Philadelphia.

Considering DC’s effective downtown height limit of 110′ to 130′ combined with a maximum FAR of 10, it’s not hard to understand why DC has so many boxy buildings forced to occupy entire parcels. Likewise, DC’s height limit is indeed a hard limit on office density. Beyond 10 FAR, any additional density requires more height than the law currently allows.

In New York, the Empire State Building has a FAR of about 28. At less than half the height, the Equitable Building (inspiration for New York’s 1916 zoning code) has a FAR of 30.

Note: almost all of these very dense buildings are offices.

Back in Philadelphia, a more obvious example: the obvious relationship between building height and floor count (taller buildings have more floors).

Height v floors

Looking at building height by decade, you can see the clear trend of taller buildings emerging following the end of Philadelphia’s ‘gentleman’s agreement’ on building height – that no building should be taller than the Statue of William Penn atop the City Hall clocktower. This agreement left plenty of room for tall buildings; at 548 feet tall, City Hall was the tallest building in the world between 1901-1908. The agreement was breached by the construction of 1 Liberty Place in 1987.

Height by decade

This particular data set doesn’t include any buildings shorter than the City Hall tower; it’s not a complete record of all construction in Center City, just high rise buildings (the document was published in 2010). You can clearly see the approximate 500′ limit prior to 1987.

If you put all of these characteristics into one chart, you get something like this:

height GFA FAR year

The size of the circles indicate the gross floor area of the project.

Decreasing opportunities for incremental development in American neighborhoods

Several months ago, Charlie Gardner had an excellent, thought-provoking post asking why have American cities seen the demise of the duplex? In a time when growing cities are bursting at the seams and facing severe affordability challenges, an incremental kind of development might be welcome in many cities, offering new housing while allowing an evolutionary pace of change to a neighborhood’s physical fabric, instead of the abrupt transition of large-scale redevelopment. So why don’t we see more of it?

Consider international comparisons of small-scale incremental development: Charlie Gardner compares the built form on both sides of the US-Mexico border, noting how on the Mexican side houses grow incrementally over time, often adding new uses along the street. The net result is a slow transformation of the entire neighborhood, evolving towards denser development patterns. Gardner speculates on reasons for the difference with standard American development patterns (including finance and regulation), noting that the small-scale development open the door to homeownership at a much lower price threshold.

Conversely, there are examples of American neighborhoods adding units on a relatively small scale. Let’s Go LA has been tweeting highlights from Wallace Frances Smith’s “The Low-Rise Speculative Apartment,” published in 1964. The book documents the replacement of single-family homes with low-rise speculative apartments (often in the form of dingbats), concluding that this small-scale, relatively low-cost form of construction plays an important role in adding housing supply to the market. Without requiring challenging lot consolidation or more-expensive construction methods, this kind of incremental, small-scale development allowed neighborhoods of single-family homes to evolve into denser places – even without large incomes in the neighborhoods to afford expensive new construction.

Despite the small scale of each individual building, the net result was a substantial increase in housing production overall.

So, why don’t we see more of this today? While various New Urbanists might not like the specific dingbat product, the idea of small-scale urban density is still appealing. The so-called ‘missing middle’ forms, such as townhouses, flats, and small apartment buildings are all lauded as contextually-friendly ways to add housing and increase density in already developed areas. So, why are these housing types missing?

As Let’s Go LA points out, much of this kind of development has been regulated out of existence. In LA, large portions of the city have been downzoned; the newer zoning no longer allows for by-right development of dingbats and other small-scale apartment buildings. In aggregate, the result is a huge decrease in the potential development allowed in LA.

Much of that LA zoning potential would’ve been in the hands of small-scale landowners rather than large real estate development firms. One consequence of removing that development potential is to erode the ‘franchise’ for incremental development. Let’s Go LA notes that “by zoning small developments out of existence, we’ve made land development a much less democratic process, in the sense that far fewer individuals in the community are able to participate economically.” Instead, 20% of LA’s recent growth has been absorbed in the relatively small confines of downtown. While this is good for downtown (thanks to regulatory changes such as LA’s adaptive re-use ordinance and relaxation of off-street parking requirements – discussed previously here), limiting growth to such a small area of the city has consequences: “when growth is restricted across so much of the rest of the city, there will still be pressure on regional housing prices, and gentrification will continue.”

The phenomenon isn’t limited to LA or to dingbats. Stephen Smith, writing at New York YIMBY, looks at the demise of small-scale development (buildings smaller than five units) in New York: “Put simply: New York City’s small builders have been nearly eradicated. The segment of the market that normally produces about half the city’s new building stock has all but vanished.”

New York City building permits, by number of units. Chart from New York YIMBY, data from the US Census Bureau.

New York City building permits, by number of units. Chart from New York YIMBY, data from the US Census Bureau.

Smith considers several hypotheses for this decline in small-scale development, including the end of some tax abatement programs and weak markets in some parts of the city. Smith also hypothesizes that New York’s recent ‘contextual rezonings’ removed development potential from areas ripe for small-scale development:

The result is that many neighborhoods that were once full of redevelopment opportunities are now closed off to anything but the smallest of one- or two-family projects on vacant lots. This sort of redevelopment was largely banned after the implementation of the 1961 zoning code, but throughout her tenure Amanda Burden closed off the last few areas where it was still allowed.

DC is seeing similar conversations. Demand for additional housing often leads to ‘pop-up’ development, often in the form of vertical additions to existing rowhouses. The term even gets used as a catch-all for any kind of smaller scale infill development. Many existing residents are concerned about the changes (though others are supportive).

Responding to political pressure and resident requests, the Office of Planning proposed their own version of a contextual rezoning.However, during a hearing on the measure, one of the zoning commissioners expressed deep concern about the overall impact of reducing this development potential in a city with a growing population and decreasing housing affordability. Greater Greater Washington’s summary of the exchange captures the concern: “I just don’t think we have a comprehensive housing policy in this city and I’m worried about all the unintended consequences of [this proposal].”

While Charlie Gardner contrasted American urbanism to Mexico, there are other options as well. This paper from Sonia Hirt looks at German land use regulations. German zoning is guided by federal standards, localities have some flexibility within those standards but cannot add restrictions to the basic zoning classifications. One end result is that there is no such thing as a residential zone devoted solely to single-family homes. Likewise, even residential zones must accommodate commerce to meet the “daily needs” of the neighborhood.

In outlining potential routes for zoning reform in the United States building off of lessons learned from Germany, Hirt suggests that instead of relatively small areas of mixed-use zoning, planners could focus on a wider area of limited flexibility for residential development – something that might not look that different from the small, speculative apartment developments of the 50s and 60s; or of duplex development.

A country of hyperdense cities

"How to build good cities," from Vishaan Chakrabarti's 'A Country of Cities.'

“How to build good cities,” from Vishaan Chakrabarti’s ‘A Country of Cities.’

Well, that was fast.

Based on the heft of my gift, I expected to take more time to read through Vishaan Chakrabarti’s A Country of Cities. The book, however, is wonderfully illustrated and laid out, thanks to Chakrabarti’s firm, SHoP (for a sampling of the illustrations and an essay adapted from the book, see Chakrabarti’s piece in Design Observer). All those illustrations make a hefty book into a rather quick read.

Chakrabarti paints a wonderful picture of the virtues of dense, urban places. Hyperdensity isn’t so hyper anything, merely the kind of density sufficient to support subway transit. While his vision of and advocacy for dense cities is persuasive, Chakrabarti’s specific policy recommendations are not new: massive investments in urban-focused infrastructure (subways, transit, high speed rail) as well as a more broadly defined “infrastructure of opportunity” of schools and parks. This would be financed by eliminating subsidies for oil, utilizing revenue from cap and trade of carbon emissions, and eliminating the mortgage interest deduction. He proposes to allow the market to provide additional housing and density that can support expensive transit infrastructure via the implementation of  “cap and trade zoning.”

After reading the book, however, the original criticism remains: feasibility. I find Chakrabarti’s call for density persuasive, but I wouldn’t shape the message with terms like ‘hyperdensity.’ His ideas on reforming the zoning process are interesting, yet the basic mechanisms for reform are difficult to execute. DC is closing in on year seven of a zoning regulations review – and the proposed revisions focus mostly on structural changes and do not take on the task of upzoning. In the meantime, the unintended consequences of existing planning and zoning procedure are adding up.

Any conversations about re-shaping the city (and removing certain legal constraints such as DC’s federal law against tall buildings) aren’t focused on the benefits of hyperdensity, but on the required procedural changes and need to amend DC’s comprehensive plan for future upzoning  to take effect. At the same time, WMATA is pushing a concept for additional subway capacity at the core of the system. Their efforts are constrained by regulations that link land use plans to transportation investments, thus Metro can only plan new subway lines in the limited areas already designated for what Chakrabarti would call hyperdensity.

Linking land use intensity and transportation investment is a good idea, but codifying the concept into regulations opens the door for unintended consequences. The chicken can’t happen without the egg, the transit agency can’t plan subways without supportive land use, the planners need infrastructure before they can add density. The idea of connecting transit to land use isn’t the problem. The challenge is in implementing the concept, adjusting the regulations, and amending the procedures that shape how we build cities.

More federal funding for infrastructure isn’t a novel idea, either – but the prospect for action from Congress seems unlikely at best. Similarly, phasing out the mortgage interest deduction isn’t a new idea, either – but it seems to hold sacred status on Capitol Hill.

This isn’t to discount Chakrabarti’s ideas. His argument for urbanism is persuasive, the broad brushstrokes of his policy agenda are fine. However, the procedural, legal, and political changes required to implement the agenda are missing. Consider the comparison of affordable housing and rental apartments in suburban New Jersey to suburban Long Island: it’s hardly an embrace of hyperdensity, nor is it an unvarnished success, but the limited improvements in adding density and fighting against exclusionairy zoning in New Jersey are the product of legal battles, not a comprehensive plan or master design. The same argument can apply to city building in general, where the future may lie in selling people on the need for more permissive rules/regulations and letting cities evolve, rather than simply selling them on the benefits of hyperdensity.

The real question, however, is if we’d ever see such legal and regulatory battles without this kind of manifesto to rally around.

(note: the book has been added to the reading list)

Fearing ‘hyperdensity’ in urban areas

Aerial view of Toronto. CC image from rene_beignet.

Aerial view of Toronto. CC image from rene_beignet.

One of the books I picked up through the rounds of exchanging holiday gifts is Vishaan Chakrabarti’s A Country of Cities: A Manifesto for an Urban America. I’ve read an excerpt of the book published in Design Observer and watched Chakrabarti’s accompanying lecture; I’m looking forward to reading the full book.

In my initial reaction to the book’s excerpt embraced the praise for dense, urban, transit-supportive cities, but expressed concern about the political and regulatory hurdles to achieving such a vision. In particular, the ‘hyperdensity’ terminology Chakrabarti used to describe levels of density that can support subway transit seemed like it could directly antagonize citizens skeptical of change – citizens that currently hold the upper hand in many of the procedural and regulatory battles over new development.

Consider some of the reactions in Toronto. This op-ed from Marcus Gee in the Globe and Mail echoes Chakrabarti’s praise for urban density, but also shows the risk of the ‘hyperdensity’ terminology:

A spectre is haunting Toronto – the spectre of hyperdensity. Jennifer Keesmaat, the city’s dynamic chief planner, worries about it. So does one of Toronto’s smartest local politicians, city councillor Adam Vaughan…

[T]he city’s Official Plan seeks to direct new development – office buildings, condo towers and so on – to key areas of the city, fostering the process known in planners’ jargon as intensification. The aim is to put new buildings on about a quarter of the city’s geographical area, keeping the three-quarters that is left – residential neighbourhoods, quiet, smaller streets – free from runaway growth.

As anyone can see from the thickets of development around nodes like Union Station or Yonge and Eglinton, it has been remarkably successful – too successful for some. “We have reached this exciting and terrifying tipping point where we are starting to question whether it could be there is something called too much density,” Ms. Keesmaat said. “There are some areas of the city where we are seeing too much density – hyperdensity – and there are other areas of the city where we are seeing no growth at all.”

Here, the warnings about hyperdensity echo San Francisco’s concerns about “Manhattanization” – long-standing skepticism about growth and urban development with serious impacts on the city and region’s affordability over the past decade plus.

It would seem that Toronto’s plan is working exactly as intended: growth is channeled to some areas while it isn’t allowed to happen in others. Seeing little to no growth in areas of the city planned for little or no growth would all be according to plan.

This isn’t to say that the plan is wise. Trying to focus all growth in a city with high demand into downtown and a handful of mid-rise corridors might be too much of a constraint. It’s a strategy tailor-made to minimize conflict with the single-family neighborhoods, not dissimilar from Arlington County’s focus on Metro station areas while preserving single family homes nearby. It’s also one that bears a great deal of similarity to DC’s current discussions about how, how high, and where to grow. As Payton Chung notes, even this modest bargain is no guarantee to avoid conflict:

Among large North American cities, only Toronto has joined DC in making a concerted effort to redirect growth into mid-rise buildings along streetcar lines — and only as an adjunct strategy in addition to hundreds of high-rises under construction. (The two metro regions are of surprisingly similar population today.) Yet there, just like around here, neighborhoods are up in arms at the very notion.

Nor does it guarantee the city can actually match supply to demand:

DC cannot put a lid on development everywhere — downtown, in the rowhouse neighborhoods, in the single-family neighborhoods, on the few infill sites we have left — and yet somehow also accommodate enough new jobs and residents to make our city reliably solvent, much less sustainable. The sum of remaining developable land in the city amounts to 4.9% of the city, which as OP demonstrates through its analysis, cannot accommodate projected growth under existing mandates.

Something will have to give.

Toronto’s plan took the lid off in downtown, yet now the resulting development is derided as ‘hyperdensity.’ Marcus Gee notes that hyperdensity’s impact on infrastructure also provides the means to upgrade those facilities; build more transit; expand parks and urban amenities:

If the hyperdensity tag catches on, it could become a useful tool for downtown councillors who want to appease their constituents by blocking new development or for suburban councillors who want to steer more development to their wards even if there is no call for it there. It could also help kill exciting projects like the Frank Gehry-designed proposal by David Mirvish for King Street West. Ms. Keesmaat’s planning staff oppose the plan for three towers of more than 80 storeys each – too tall, too dense – and city council backed her up in a vote on Dec. 18.

It is reasonable to worry that new development will cause overcrowding on transit or overtax other city infrastructure. But if that is the concern, let’s build better transit to keep up with the growth, not halt the growth for fear of the future. Central Toronto is still far less dense than it could or should be. Hyperdensity should be a goal, not a thing to fear.

Emphasis added. This is the crux of my concern. How we frame the issue matters, even if the eventual solution won’t be about convincing the public of the virtues of hyperdensity and embracing it as a goal. Rather, achieving that goal will require reforming the processes and procedures for making decisions about land use and development.

I hope Chakrabarti’s book will touch on this; I look forward to reading it.

Exporting success from Hong Kong’s MTR – rail transit plus development

Hong Kong at night. CC image from Diliff via Wikimedia Commons.

Hong Kong at night. CC image from Diliff via Wikimedia Commons.

If you were to pick a rail transit system to envy, it would be hard to pick one better than Hong Kong’s MTR. The system is known for extraordinary operating efficiency; both in terms of on-time performance (99.9%) and farebox recovery (186%). Intense development around rapid transit stations both provides a market of potential rail users and an investment opportunity for the MTR’s parent corporation.

The MTR corporation, in turn, is looking to export their expertise in efficient transit operations around the world. An article in the Wall Street Journal profiles MTR’s ambitions:

Hong Kong’s MTR Corp. 0066.HK -1.15% is taking its high standards abroad, bidding to run subways in Europe, Asia and Australia. If it wins just a few of the bids, it will become the biggest operator of metro systems in the world. Led by a New Yorker, the company is also considering other projects, including in Germany, another place that puts a high value on efficiency.

“MTR in Hong Kong is probably the best-run metro in the world, and that brand is what they bring with them,” said Nigel Harris, managing director at the Railway Consultancy Ltd., a U.K.-based firm.

The train operator, which exports even its trademark door chimes and train-service announcements, already runs lines in the Chinese cities of Beijing, Shenzhen and Hangzhou, as well as in Melbourne, London and Stockholm. It has been shortlisted to run a train line in Sydney and three more lines in London, including Crossrail, one of the biggest rail projects in the city in decades.

Just how exportable is MTR’s success? Purely operational measures (on-time performance) seem to present the strongest case, particularly with such inefficient operations elsewhere in the world. Financial measures (whether simple metrics like farebox recovery or broader measures of profitability of the entire corporation) depend on the context of the system – not all cities have Hong Kong’s kind of density to support efficient transit. Planning metrics depend on key governance and financial attributes; legal matters complicate things further.

Operations: There is clearly a case for MTR’s ability to make existing operations improve efficiency; the Wall Street Journal article notes that London’s Overground went from 88.4% on-time to 96.7% after a few years of MTR-led operations. Clearly, you can export the expertise to make the trains run on time.

The rail network itself is not particularly expansive – 108 miles of heavy rail, 84 stations, first operating in 1979; not all that different in scope from DC’s Metrorail system of 106 miles and 86 stations (prior to the opening of the Silver Line) first operating in 1976. Yet the MTR sees 4.5 million daily riders, compared to Metro’s modest 780,000.

The Checkerboard Hill blog (named for the old visual marker on the nasty approach to the old Kai Tak airport) provides a nice overview of the MTR system, complete with a link to a track diagram.

Finances: MTR Corporation operates the rail system, owns and develops real estate around stations, and contracts with other entities to build and operate transit systems around the world. The corporation is 76% owned by the Hong Kong government, with shareholders owning an increased share of the company since an IPO in 2000.

Popular myth holds that MTR is only profitable due to real estate investment, but that is easily dispatched with a quick glance at a financial statement shows operating profits on transit operations (the aforementioned 186% farebox recovery ratio) as well as real estate.

An exported version of MTR can directly control operations and make the trains run on time, but they won’t always have direct control over adjacent development. Nonetheless, it’s worthwhile to look at their success. Even without profits from real estate development, MTR’s development plans serve the key role of ensuring transportation investments are paired with supportive land uses. The Atlantic puts it this way:

Like no other system in the world, the MTR understands the monetary value of urban density—in other words, what economists call “agglomeration.” Hong Kong is one of the world’s densest cities, and businesses depend on the metro to ferry customers from one side of the territory to another. As a result, the MTR strikes a bargain with shop owners: In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself. The Hong Kong metro essentially functions as part of a vertically integrated business that, through a “rail plus property” model,  controls both the means of transit and the places passengers visit upon departure.  Two of the tallest skyscrapers in Hong Kong are MTR properties, as are many of the offices, malls, and residences next to every transit station (some of which even have direct underground connections to the train). Not to mention, all of the retail within subway stations, which themselves double as large shopping complexes, is leased from MTR.

Payton Chung digs into the numbers on MTR’s retail-heavy revenues:

55.4% of MTR’s total 2012 profits stemmed from property and in-station commerce: 36.1% from rents and management income and 19.3% in for-sale development. Profit margins on the property businesses are certainly healthy: 81.6% on investment property and 89.2% on in-station commercial, vs. 46.1% on Hong Kong transport and just 4.7% on the emerging international transport businesses. A near-90% margin practically qualifies as minting money. (In fact, it’s much better than minting money: the U.S. Mint cleared only 21% seigniorage on circulating currency in 2012.)

Note that in-station commercial offers the richest margins; over half of this business unit’s revenues come from in-station retail, with the rest from advertising and telecom fees within stations. MTR collected US$276.4 million on 608,729 square feet of in-station retail, for an unbelievable-for-the-US (but not for HK) average rental rate of $454/foot, well over twice the rents garnered per foot of investment property above the stations. Averaged across MTR’s 84 heavy-rail stations, that’s 7,247 square feet of retail per station.

This kind of in-station retail isn’t dependent on the kind of development rights seen elsewhere in the MTR system (though other cities might will certainly struggle to meet that ‘unbelievable for the US’ rent without Hong Kong-like density). Some in-station retail isn’t that different from examples around the world; making better use of empty spaces fronting streets in stations and under viaducts.

Street-facing retail spaces beneath the station mezzanine. Image from Google Maps.

Street-facing retail spaces beneath the station mezzanine. Image from Google Maps.

Other examples are internal to the station, and not different in concept from small-scale retail you’ll find in a shopping mall or at an airport:

Mezzanine level retail spaces in MTR's Kowloon Bay station. CC image from Wiki.

Mezzanine level retail spaces in MTR’s Kowloon Bay station. CC image from Wiki.

MTR’s practice of intense and extensive development around stations ensures maximum linkage between the investment in high-capacity transit and the land use to support that investment. Land is leased to MTR at pre-rail values (all land is owned by the government). This extends beyond just TOD; it represents the full integration of transit planning and development. The corporation both captures value created by the transit system, but also earns a long-term source of revenue to augment the system’s operational revenues.

Current US practice for TOD and joint development is barely integrated by comparison. Too often, the transportation-only focus (and a healthy dose of auto bias) leads to extensive park and ride lots rather than dense development around stations. Where dense development does happen, the transit agency isn’t always a direct beneficiary. Speaking to an audience at Harvard’s Kennedy School (as reported by Capital New York), MTR CEO Jay Walder put it in terms of financial sustainability:

“If the infrastructure is not self-sustaining, then the reality is that it cannot rely on public funding always being there,” Walder said Thursday, at Harvard’s Kennedy School. “At some point politics simply diverts the money elsewhere. And you might say it doesn’t have to be that way, but that’s just the reality of the case.”

In Hong Kong, the independently run MTR Corp. buys the land adjacent to future rail lines from the government at pre-development prices and then, once the line is built and the land alongside developed, captures the growth in value of that land and uses it to fund rail operations.

“In that way, the increase in the value of the property becomes a proxy for the broader public benefit and aligns the financial basis with the societal benefit that is being created,” said Walder. “And it also ensures that subject to normal business risk … that the corporation has the proper resources not just to be able to build a rail line, but also to be able to operate it, maintain it and renew the systems and equipment over time.”

Speaking of New York’s Second Ave Subway, Walder has no doubt it “will create a tremendous amount of value,” but that within the current financing scheme “we don’t have any mechanism to capture that back.”

Proxies for such integrated transit and development might include models we see in the US already, such as TIF or other special assessments to finance new infrastructure with development revenues. Yonah Freemark argues there might be a “residual fear” of urban renewal in allowing a public agency to directly develop real estate. Likewise, backlash against the use of eminent domain for economic development might torpedo integrated TOD before it gets started. It’s one thing to re-develop existing parking lots or air rights above key rail yards and other infrastructure, but the politics of land development and property rights will be difficult in the US.

Governance: Other elements of the MTR model (transit plus development) aren’t anything new to the US. Plenty of transit operators in the US also historically developed land to provide riders to their systems (or, on the other side of the coin, built transit to improve the access to their land). Privatized transit operations isn’t a new idea either. However, the current US system of public agencies and authorities operating transit isn’t set up to take advantage of land development around stations.

There are plenty of examples of successful land use intensification around stations; Metro’s Orange Line in Arlington, VA stands out. However, Metro did not develop any of that land. Joint development agreements for private sector developers to make use of WMATA land returns marginal rent to the system, despite huge increases in value from the presence of the system.

MTR’s corporate structure allows the company the autonomy to build a development team capable of delivering world-class real estate projects; current transit authorities would not have the expertise to develop real estate. While the government owns a majority of the corporation, it is publicly traded and has access to capital markets for both real estate and transit projects often unavailable to existing authorities.

As noted in the discussion of finances and land use, none of this is new for transit in the US. However, associating that kind of development with government agencies or public authorities would be new ground.

Planning: Emulating MTR’s operations is one thing; it still doesn’t guarantee the kind of ridership success seen on the MTR system. Hong Kong’s geography is well suited to efficient transit; high-density, compact development built among a series of geographic choke points (mountains, water bodies) that offer an opportunity for transit to gain an edge on other transport modes. These same principles apply elsewhere, but likely to a lesser degree.

Density – a vision for an urban America

The world is urbanizing. But is it doing so in a truly urban fashion, or is it merely a way of noting that ‘urban’ can be defined as ‘not rural?’

This is one of the concerns Vishaan Chakrabarti brings up in his discussions of ‘hyperdensity’ and his book making the case for a truly urban future: market-driven, transit-supportive, and more dense and urban than what we have today. Chakrabarti notes that this isn’t meant to denigrate suburbanism, but to merely level the competitive playing field and to stop direct subsidy of suburbanization.

ArchDaily links to a video of Chakrabarti speaking before a panel of big names in architecture and academia at Columbia University. They summarize as follows:

Through the compelling representation of statistics, Chakrabarti makes a concise case for the benefits of investing efforts in a development strategy that is based on dense cities. By identifying issues in modern infrastructures, current city planning policies, and paradigms within the design and construction fields, he paints a new urban landscape.

And the video:

[youtube http://youtu.be/ZBC_Pa1a6bc]

In the panel discussion, Bernard Tschumi notes that the ideas Chakrabarti presents are not new; to which Chakrabarti asks rhetorically, “then why are we in this mess?”

More on the geometry of transportation: “Transport is mostly a real estate problem”

In June, the Urbanization Project at NYU’s Stern Center posted several graphics looking at the space devoted to transportation in our cities. As the author, Alain Bertaud, frames it, “transport is mostly a real estate problem.” That is, different transportation modes require different amounts of space to accomplish the same task.

Comparison of population/employee density and street area per person. Image from NYU Urbanization Project.

Comparison of population/employee density and street area per person. Image from NYU Urbanization Project.

Each of the selected examples cluster around the diagonal blue line, representing an average of 25% of a city’s land devoted to streets.

Percent of land use devoted to buildings, streets, etc. Image from NYU Urbanization Project.

Percent of land use devoted to buildings, streets, etc. Image from NYU Urbanization Project.

Two observations: the 25% pattern is remarkably consistent; as is the geometric relationship between modes of transport and the intensity of land use.  The green horizontal lines show how much space a car uses at various speeds – the faster the car goes, the more space it requires. A parked car occupies 14 square meters, while one moving at 30 kph takes up 65 square meters.

The obvious corellation is between a city’s density and its type of transportation network. Cars take up a large amount of space relative to their capacity, and a transport system based on cars alone cannot support a great deal of density.

Alex Tabarrok frames this in terms of “the opportunity cost of streets.” While there is certianly an opportunity cost to various street uses, it’s worth noting that some space must be devoted for streets in order to access property. Charlie Gardner at Old Urbanist takes note that the role of streets is not solely about transportation:

In addition to their transportation function, streets can also be understood as a means of extracting value from underserved parcels of land.  The street removes a certain amount of property from tax rolls in exchange for plugging the adjacent land in to the citywide transportation network.  Access to the network, in turn, increases the value of the land for almost all uses.  For the process to satisfy a cost/benefit analysis, the value added should exceed that lost to the area of the streets plus the cost of maintenance. (This implies rapidly diminishing returns for increasingly wide streets, and helps explain why, in the absence of mandated minimum widths, most streets are made to be fairly narrow.)  For many of the gridded American cities of the 19th century, as I’ve written about before, planners failed to meet these objectives, although these decisions have long since been overshadowed by those of their 20th century successors.

Charlie also notes that many great, dense, walkable cities around the world devote about 25% of their land to streets, yet many American downtowns use a much higher percentage of their land to streets.

Some of those numbers might depend on the exact method of accounting. While Charlie’s estimate for downtown DC shows 43% of the land used for streets, DC’s comprehensive plan shows approximately 26% for the city as a whole:

Land Use Distribution in DC, from DC's 2006 Comprehensive Plan.

Land Use Distribution in DC, from DC’s 2006 Comprehensive Plan.

The graphic doesn’t specify if the street figure refers to street right of way, or just the carriageway portion of the street, but not the ‘parking area.‘ Seattle’s planning documents also showa similar pattern: 26% of land city-wide used for streets, but also a higher percentage of downtown land devoted to streets.

Seattle land use distribution by neighborhood. Image from Seattle's 2005 Comprehensive Plan.

Seattle land use distribution by neighborhood. Image from Seattle’s 2005 Comprehensive Plan.

The Seattle calculation looks at land devoted to right of way for streets, rather than just impervious surface.

Making better or different use of existing right of way is one thing; however, once that right of way is set, it is very difficult to change. Transportation networks awfully path dependent. Chris Bradford looks at Austin’s post-war planning and the abandonment of the street grid – path dependence in action:

Back then, “planning” chiefly meant “planning streets.” It’s a shame that planning lost that focus. The street grid that permeated Austin in 1940  is of course still with us, and forms the backbone for a number of quite livable neighborhoods.

So what happened? Developers building large, planned subdivisions (Allandale, Barton Hills) continued to add decent street networks after 1940. But the City itself appears to have gotten out of the grid-planning business not long after this map was made…

Collectively, these could and should have been platted into 40 or so city blocks. Instead, they remain two big blobs of land. The lack of connectivity funnels traffic onto South Lamar and Manchaca; impedes east-west mobility, dividing eastern and western neighborhoods; forces people to make circuitous trips to run even simple errands; and forecloses any sort of low-intensity, mixed-use development in the area. Then there’s the sheer loss of public space: South Austin should have a few more miles more of public, connected streets than it has today.

Once the street grid is set, it is very difficult to change.

“Hyperdensity” and providing cities the room to grow

CC image from Alan Grinberg

The first thing crossing my mind when reading Vishann Chakrabarti’s piece in Design Observer (Building Hyperdensity and Civic Delight) was: what the hell is ‘hyperdensity?’ Thankfully, Chakrabarti answers that question in the first paragraph: “density sufficient to support subways.”

The second thing to cross my mind was why he would frame a reasonable kind of urbanism – transit-supportive density – in such extreme terms? Chakrabarti is a principal at SHoP Architects and a professor at Columbia. Hearing someone in that position praise the very real benefits of density isn’t surprising, though the framing of the issue as ‘hyper’-anything seems naive in the face of neighborhood opposition to even minor changes like the allowance of accessory dwelling units.

Contrast Chakrabarti’s position to that of Brent Toderian. Toderian, formerly the chief planner in Vancouver, BC, is a veteran of many contentious civic battles over development and density. His calling card is to focus on mitigating any possible downside of density, re-branding the ideal as ‘density done well.’ Leaving aside any substantive differences between Toderian and Chakrabarti, the difference in framing is significant. Both praise the benefits of density for an urban economy, for climate change, and for city life; both agree that dense environments demand good design to address the challenges that density can present. Yet, Toderian emphasizes that it can be ‘done well’ (implying that it currently isn’t done well) while Chakrabarti emphasizes the need for more density (implying that we don’t currently have – or allow – enough of it).

Chakrabarti isn’t satisfied with the small-scale focus from current planners, and embraces the general focus of the econourbanists:

Today the global economy demands that we embrace large buildings not just for housing but also for many modern office functions; yet many planning professionals remain fixated on smaller-scale development. They tend to ignore that height limitations have held back the Parisian economy in comparison to the forward-looking redevelopment of London, both at Canary Wharf and within its city center, which is now marked by a series of glistening and respectful new towers by Norman Foster, Richard Rogers and Renzo Piano. There is, in fact, a marked correlation between those European cities that have allowed skyscrapers and those that have successful economies.

Chakrabarti also mentions the challenges of building denser cities in today’s regulatory environment of zoning codes and lengthy reviews, risk-aversion from incumbent residents and landowners, and the feasibility of adding new infill development into established neighborhoods without fundamentally altering their character.

Perhaps the single most compelling reason to act is the growing challenges of affordability. This Wall Street Journal article highlights the challenges in New York, quoting Professor Chakrabarti extensively:

In the coming decades, New York could confront a problem many cities would love to have: too many people and nowhere to put them.

The city is expected to add one million more residents by 2040, but there likely won’t be room for hundreds of thousands of them unless a small city of new housing is built, according to a report by a Columbia University think tank.

“What surprised me most was the scale of the problem,” Mr. Chakrabarti said. “It’s a clarion call that we don’t have enough housing.”

At the same time, plenty of other publications about affordability challenges in cities around the world do not even mention the restrictions on and challenges to add housing supply.  At the same time, the fact that many American cities used to have more people residing in the same area will lead them to believe that the city can accomodate more people without exanding the city’s building stock. The reality is that those older population figures included larger household sizes and fail to account for housing stock lost to commercial development from expanding downtowns. Payton Chung looks into these claims for DC:

These conditions were common in District homes at the time. The 1950 census found 14.1% of the District’s 224,142 occupied housing units to be overcrowded (with >1 person per room). By 2011, that figure had fallen two-thirds, to 4.7% (an increase from 3.3% in 2008) — a figure lower than the 5.3% of homes that were extremely overcrowded (>1.5 occupants per room) in 1950.

On average, every apartment and house in DC had one more person living inside — households were 50.2% larger! In 1950, 3.2 people occupied each dwelling unit (for non-whites, it was 4.0). In 2007-2011, the number of persons per household had fallen to 2.13, while the number of housing units had grown to 298,902.

As the city gets reacquainted with the notion of population growth, and begins to plan for a much larger population within the same boundaries, we’ll have to have a realistic conversation about household sizes and housing production. A change of just 0.09 persons per household means the difference between planning for 103,860 units or 140,515 units.* In either case, though, that is one heck of a lot of construction for a city of 68 square miles, of which 10.5 are parks and 7 are underwater. It works out to 2,000-3,000 additional units per square mile — as simple as building a platform and plop 5 DUA suburbia across it, or as complicated as infilling a contentious, built-up city. (More the latter than the former, I suspect.)

That problem can’t be solved with just a few new mega-development sites absorbing all of the demand for urban growth. It requires existing neighborhoods to help absorb some of that demand.

At the same time, Chakrabarti is well aware of the regulatory challenges to merely allowing the market to add density to an already-established city:

At Columbia University, my students and I have been working on a concept I call “cap and trade zoning,” which would allow the free flow of air rights within an urban district, with an understanding that the overall amount of developable area would be capped in relation to proximity to mass transit. This would result in hyperdensity, to be sure, but would also create a “high-low” city of diverse heights, uses and ages. This concept would strengthen small businesses by permitting owners to sell their air rights, while allowing development to occur on nearby lots. Critics may argue that this approach would result in unpredictable development with varying building scales, to which I would reply “Hip hip hooray!” Much of what passes as good planning today is known as “contextual zoning,” a mechanism through which new architecture is tamed into mediocrity by mimicking a false understanding of the scale and aesthetics of existing neighborhoods. Too often this process allows a lowest-common-denominator mentality to trump the wonders of the unpredictable city. Half a century ago, in The Death and Life of Great American Cities, Jane Jacobs relentlessly critiqued the planner’s urge for control; her critique is no less pertinent today.

The concept is good, but what remains to be seen is if it could pass the political test – and if it could adjust the regulatory process (not just the regulatory content) that governs urban development decision-making. Perhaps the first test of the political viability of ‘hyperdensity’ will be if the name helps advance the needed regulatory reforms.