In-town housing: 'Hiving' trend leads to downtown development

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The development of housing in downtown areas has become an established real estate trend in urban areas nationwide, fueled by demand from childless households seeking a living environment conducive to "hiving," or frequent social interaction, rather than "cocooning," in which they are isolated from friends, neighbors and community activities, according to participants in an in-town housing conference sponsored by the Urban Land Institute.|ret||ret||tab|

According to an Oct. 3 ULI news release, the conference, which was held in Dallas, focused on a broad range of topics related to in-town housing development. Topics, including "correctly reading" the market to fulfilling the need for adequate parking in a pedestrian-oriented environment were addressed. |ret||ret||tab|

Participants concurred that in-town housing development while not immune to the economic downturn has remained stable and likely will gain strength in the years ahead, due primarily to the continued downtown migration of young professionals and empty nesters. |ret||ret||tab|

In addition to an urban lifestyle, many people moving downtown are seeking to avoid the growing traffic congestion that is stretching commutes from outlying areas. |ret||ret||tab|

"We know this is a major direction in housing development in the United States," said Jon Abbett, president of CIG International LLC, in Washington, D.C. "It offers the chance to serve new markets with little competition. Sales will be faster than you thought." |ret||ret||tab|

Despite a slip in some downtown populations following the Sept. 11 terrorist attacks, several urban areas have experienced downtown population increases since 1990. |ret||ret||tab|

U.S. Census Bureau statistics show that Houston, Seattle, Chicago, Denver, Portland (Ore.), Atlanta, Memphis and San Diego all experienced greater percentage increases in their downtown populations than in their entire urban areas over the past decade. Other cities, including Cleveland, Baltimore, Philadelphia and Detroit, incurred downtown population increases while losing population as a whole. |ret||ret||tab|

"The future of cities has changed," said Tom Gilmore, manager of Gilmore Associates LLC in Los Angeles. "Having people a lot of people living in a downtown is what keeps it from being a dead zone." Gilmore pointed out that downtown development has shifted from a focus on industrial uses to residential uses: while city cores once relied heavily on manufacturing and industries as their economic engines; now, they are increasingly reliant on residents to trigger a 24/7 atmosphere energized by shopping, dining and entertainment. |ret||ret||tab|

Moreover, the buildings that once housed downtown industries are now being converted to housing such as lofts, apartments, live-work units, and condominiums to accommodate the new population growth. |ret||ret||tab|

Several of the case studies presented at the conference involved industrial warehouse conversions, including the American Can Company in New Orleans (a 2003 ULI Awards for Excellence finalist). |ret||ret||tab|

"Cities are great gathering places to share culture, entertainment and parks. They are the one place where we are all of us, not just us," Gilmore said. |ret||ret||tab|

Greg Currens, CEO of Style Interior Design in Irvine, Calif., described the quest for a sense of community as "hiving," a social trend identified earlier this year by the Yankelovich market research firm. According to Yankelovich, Americans are becoming more eager to interact with friends, family and community, and are more apt to use their home as base for making those connections than as a retreat to withdraw in isolation. Currens cited results from a Yankelovich survey in which 64 percent of the participants identified themselves as "hivers," compared to 33 percent who identified themselves as "cocooners." The majority of the respondents said an ideal characteristic for their home is for it to serve as a hub of activity for friends and family; the majority also said they preferred maintenance-free living. |ret||ret||tab|

Currens noted the survey results suggest more consumers are seeking housing that is closely connected to the community, including in-town housing that is mixed with, adjacent to, within walking distance of, or connected by transit to recreation, culture, entertainment and work. Developments offering a convenient location, strong sense of community, an enriching experience and which have ample amenities have the best chances for success, he said. |ret||ret||tab|

The growing consumer interest in downtown housing is drawing developers from other sectors of the industry, including in-town commercial real estate developers who are interested in including housing in mixed-use developments, as well as residential developers who previously focused solely on outlying development. Pretlow Riddick, executive vice president of JPI Development in Irving, Texas, pointed out that although JPI was the "epitome of a suburban developer" when he joined it 14 years ago, 50 percent of its projects are now high-density, in-town housing developments. |ret||ret||tab|

Advantages of in-town development include the ability to be more creative with the architecture, generally more flexible zoning, steady market demand, and virtually no community resistance related to school crowding or traffic issues (since few families occupy the housing and the developments are not auto-dependent), Riddick said. However, he noted, in-town development has drawbacks that can test even the most determined: more complexity in construction; the likelihood of environmental waste clean-up; and numerous, unanticipated project delays. "Urban housing takes a lot of patience and hard work. You have to just go for it," he said. |ret||ret||tab|

Throughout the conference, panelists emphasized that demographic changes support taking the risk. The number of households with children the market segment least likely to prefer downtown living is steadily declining, while the number without children the segment most likely to live downtown is steadily rising. By some industry estimates, up to 75 percent of U.S. households will have no children living at home by 2010.|ret||ret||tab|

When the "back to downtown" movement started a few years ago, most renters and buyers were young singles or childless couples; however, aging baby boomerseither retired or still workingare becoming a bigger part of the market, conference participants noted. "We are seeing empty nesters who want a simpler lifestyle, as well as the children of empty nesters who don't want to live in the suburban environment their parents lived in," said Fran McCarthy, president, Daedalus Development, in Fort Worth, Texas. Given the car-dependent, isolated living environment, rising traffic gridlock and long commutes faced by many residents in outlying areas, "the utopia of suburbia is not panning out," McCarthy said. "As cities grow, more pressure is placed on getting housing closer to jobs."|ret||ret||tab|

Despite in-town housing designs that emphasize walkability and downplay auto use, parking is an issue that must be addressed, since so many of the residents want to keep their cars, and since many others visiting or working in the facilities will drive to them, participants noted. "Parking is the first and last impression" of any development, pointed out James Moran, vice president and managing director of Walker Parking Consultants in Austin, Texas. "Parking is a secondary function. It won't make or break land use, but good parking can be a big advantage." |ret||ret||tab|

Bernard Zyscovich, president of Zyscovich Inc., Architects in Miami, discussed case studies in which the company had provided structured parking above retail and other uses, to open up the ground floor and more efficiently connect it with street activity. In Miami Beach, above-ground, multilevel parking facilities are becoming more common, as more surface parking lots are being converted to green space and parks, he said.|ret||ret||tab|

ULI Senior Resident Fellow Robert Dunphy, who specializes in traffic and infrastructure issues, offered some tips on accommodating cars, including: 1) using the minimum space needed for off-street parking; 2) including streets as available space; 3) sharing parking spaces between residential and other uses; and 4) providing access to "gap" autos (cars available to residents for infrequent use). |ret||ret||tab|

"In-town housing is a centerpiece of smart growth, in that it generates interest in transit, and there is less reliance on frequent car use. The trick is figuring out how much parking is enough. It's an issue that must be dealt with first," Dunphy said.|ret||ret||tab|

The Urban Land Institute is a nonprofit education and research institute supported by its members. |ret||ret||tab|

Its mission is to provide responsible leadership in the use of land in order to enhance the total environment. Each year, the institute honors an extraordinary community builder through the Urban Land Institute J.C. Nichols Prize for Visionary Urban Development. Established in 1936, the institute has more than 18,000 members representing all aspects of land use and development disciplines.|ret||ret||tab|

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