Urbanexus Update - Issue #139
Urbanexus Update - Issue #139
This selection of real estate and community development news and information is curated by H. Pike Oliver, co-author of a forthcoming book, Transforming the Irvine Ranch: Joan Irvine, William Pereira, Ray Watson, and THE BIG PLAN (June 2022.)
Please note that some items in this compilation may be behind a paywall.
The economy
Inflation in times of high debt
A growing number of economists hold the view that the US government’s growing debt is nothing to worry about. They believe this because real interest rates are not only historically low but are also forecast to stay low for a long time. As such, the government can carry high debt levels without worrying about debt sustainability.
However, a deeper fact should worry economists more than it does—namely, it is hard for the government to make good policies when it swells so large that it has little practical choice but to depend on annual deficit financing. In particular, high and growing levels of public debt are likely to induce higher inflation while the growing burden of debt and deficit financing increases political pressure to continue pursuing an inflationary policy. High debt levels also make inflation harder to control if it becomes persistent.
War in Ukraine
What the war in Ukraine means for real estate The conflict has wide-ranging implications for property investment in Europe and the US, and across the capital stack.
Where wealthy Russians own trophy real estate in the US A look at trophy properties bought and sold by oligarchs and other ultra-wealthy Russians in the U.S. amid calls to seize property.
Who are the Russian oligarchs?
Russian oligarchs have lost more than $38 billion in 2022 because of Western sanctions on Russia in reprisal for the invasion of Ukraine. Visual Capitalist has created a poster of the ten wealthiest oligarchs.
Housing
Home prices across the USA hit a record high According to national property broker Redfin, U.S. home prices climbed 16% year over year to a new all-time high of $389,500 in February 2022, as the number of homes for sale fell to another new low. The lack of inventory is holding back home sales, which were down 4% from January 2022.
Demographia international housing affordability survey
The Urban Reform Institute and the Frontier Centre for Public Policy have completed the 2022 edition of Demographia International Housing Affordability. This report provides housing affordability ratings, using the median multiple, a measurement of income in relation to housing prices, for 92 major markets (metropolitan areas) in eight nations for the third quarter of 2021.
As the pandemic and lockdowns continued into a second year, the movement of households from denser urban neighborhoods to larger homes in suburban and outlying areas has continued. The result has been to drive up prices at unprecedented rates in many markets. As a result, many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline.
Using California surplus property for affordable housing
In an audit of state surplus property released on March 22, the California State Auditor found that the state is doing little in response to a 2019 gubernatorial executive order that prioritized the use of excess and surplus state-owned land to support the development of affordable housing.
Curator's note: I worked on a similar recommendation contained in the Urban Strategy for California issued by the Governor's Office of Planning and Research (OPR) back in 1978. Clearly, little has happened in more than four decades! Thanks to former OPR colleague Peter Detwiler for calling attention to this audit.
Homelessness is a housing problem
It’s in the title. In Homeless is a Housing Problem (UC Press, 2022), housing scholar Greg Colburn and data journalist Clayton Aldern seek to explain the substantial variation in rates of homelessness in cities across the USA. The researchers test a range of conventional beliefs about what drives the prevalence of homelessness in a given city--including mental illness, drug use, poverty, weather, generosity of public assistance, and low-income mobility --and find that none explain rater, for example, rates are so much higher in Seattle than in Chicago. Instead, housing market conditions, such as the cost and availability of rental housing, offer a more convincing explanation.
We could fit lots of homes in old strip malls Redeveloping just ten percent of strip malls could fill a nine-year supply of housing in the Boston region, a new study finds. What could similar efforts elsewhere do?
Retail
2021 review of mall foot traffic
A report from Placer.ai analyzes a variety of shopping center categories and location analytics data sets to understand how malls and consumers have changed during the pandemic and identifies best practices that will empower mall stakeholders and retailers to thrive in the years to come.
Master-planned communities
Infrastructure finance for master-planned communities
Launch Development Finance Advisors and RCLCO Real Estate Consulting have published a listing showing that 46 of the top 50 master-planned communities (based on home sales in 2021) have employed some form of special taxing districts to fund infrastructure improvements.
Retirement the Margaritaville way At the active-living community for Jimmy Buffett enthusiasts, it’s five o’clock everywhere.
Lots of room for cars in Utah’s walkable ‘15-minute city’ A planned community set to rise in a suburb near Salt Lake City could feature a network of shared mobility hubs and walking trails — plus tens of thousands of parking spots.
Regional and metropolitan dynamics
Coastal metros continue to dominate tech work
The persistence of the sector’s superstar geography is striking. Since 2010, the geography of the sector has remained highly skewed, with its activity and growth concentrated into a shortlist of large, mostly fast-growing hubs on the West Coast and the Boston-Washington, D.C. corridor. Even amid 2020’s pandemic disruptions, eight superstar metro areas still slightly increased their share of the nation’s tech sector employment and housed 38.4% of all U.S. tech jobs.
Census 2021 estimates indicate increased dispersion
According to the US Census Bureau, the year ended July 1, 2021, reflected the slowest population growth of any year on record. The driving factor was the Covid-19 pandemic, which increased deaths and reduced the natural increase of population (births minus deaths).
At the same time, there was a rise in domestic migration. The Census Bureau characterized it as in some cases “a shift from larger, more populous counties to medium and smaller ones.” This was accelerated by the rise of remote work that kept organizations open, even during lockdowns Some households took advantage of the opportunity to obtain more space — inside and out — farther away from workplaces.
Among the major metropolitan areas, Wendell Cox points out that the data reveals:
Riverside-San Bernardino became the nation’s 12th largest metropolitan area, displacing San Francisco, which fell to 13th largest. Riverside-San Bernardino became California’s second-largest metropolitan area and San Francisco now ranks as California’s third-largest.
Phoenix entered the top ten among metropolitan areas, having passed Boston. Boston fell out of the top ten, for the first time since the initial 1790 US Census.
Honolulu, which reached 1,000,000 just last year, suffered a large loss, dropping its population down to 1,001,000, and would drop below that figure if losses continue.
There were signs of life in the Midwest’s “Flyover Country.” Despite the negative trends around the country, Columbus, OH, Indianapolis, IN, and Kansas City, MO-KS each posted small gains in both population and net domestic migration.
Seattle and Portland lost both population and domestic migrants, after a long run of gains.
Denver’s gain was only 3,300 in the last 12 months, after a gain of 5,500 in just the three months from April 1 to July 1, 2020.
Urban planning
One of the most politically charged and controversial terms in planning, the acronym NIMBY stands for Not In My Back Yard. With the controversies and tacit implications of the term in mind, this article provides a balanced account of the various definitions for the term and a conceptual framework to identify the connotations for the term when, and wherever, it is encountered.
Construction
A 25-story timber building — www.thinkwood.com
A turning point in architecture has the potential to revolutionize America’s built environment: the timber tower. Strong and innovative engineered wood products have enabled timber construction to reach record-setting heights—25 stories to be exact—with Milwaukee’s Ascent. The 493,000-square-foot, mixed-use residential tower eclipses INTRO, the current nine-story U.S. record holder for tall mass timber construction, and with it ushers in possibilities for low-carbon, high-density living.
A home construction startup lands $50M in funding
Diamond Age, a home construction startup that uses 3D printing technology, intends to construct its first batch of houses in Arizona later this year.The company, which was founded in California but recently shifted its headquarters to Arizona raise $50 million in series A financing to help it complete its first construction contract. Diamond Age is a vertically integrated general contractor, but it swaps some materials and labor sources from the traditional mix. The company uses an automated robotic arm to print concrete walls and plaster interiors.