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Eminent Domain and Economic Development: An Admirable Colorado Example

(Speaking of Pruitt-Igoe and “urban renewal”, a version of the following appeared in yesterday’s Brighton Blade, co-authored with Kyle Cascioli and Ron Throupe)

The Metro Wastewater Reclamation District (MWRD) recently paid for 84 families and businesses to relocate in order to make way for the district’s new $470 million dollar wastewater treatment plant in Brighton, Colorado.  MWRD District manager Catherine Gerail was quoted as being very pleased that the city was able to help all parties move to new homes—including a colony of feral cats that now occupies a new space at the Brighton Animal Shelter.  We’re pleased too!

We were among those shocked when, in 2005, the US Supreme Court ruled in Kelo v. City of New London (Connecticut) that municipalities have the authority to exercise their power of eminent domain and legally transfer property from one private owner to another in order to further economic development as a remedy for urban blight.  New London used its authority to transfer 115 residential and commercial lots encompassing 90 waterfront acres adjacent to a Phizer Corporation research facility to a local developer.  The city defined “blight” to include single family homes with one car garages—which happened to describe just about all of the middle class bungalows and historic homes located in the 90 acres desired by the city.  However, the developer was unable to finance the project and redevelopment of the site never occurred.  Today the razed 90 acre site stands vacant, a symbol of failed redevelopment, eroded property rights, and municipal economic greed.

By all accounts, the MWRD’s negotiation with 84 families living at the Sylmar Manor Mobile Home Park and the Seven Sons Auto Salvage operation in Brighton appears to have been conducted with far more sensitivity than the one in New London.  The MWRD’s commitment to negotiate and settle with the displaced families and businesses is exemplary given their available options under Eminent Domain.    We also believe that the MWRD’s  decision to acquire these private lands “at arms length” for a legitimate public use and not for speculative economic development—in a way that respected the citizens who would be adversely affected by the decision—was the most humane approach.  The resulting satisfaction on all sides seems to bear that out.

The City of Aurora, Colorado—whose council voted last summer, above citizen objections, to designate 125 vacant acres near the Denver International Airport as “blighted” in order to clear the way for a private corporation to build a hotel and conference center—could take a lesson from the Metropolitan Wastewater Reclamation District.

(Affordable) Housing and Urban Development

(A version of the following appeared in today’s Denver Post, co-authored with Kyle Cascioli).

In Colorado many of us think about access to affordable housing as a problem for resort workers in mountain towns.  Although it is a peculiarity of the current economic recession that homes are becoming more affordable for those who can qualify to buy them, today’s record number of foreclosures, sharply reduced personal income, rising rents, and high unemployment mean that good, affordable housing is beyond the reach of many Americans.

The Department of Housing & Urban Development (HUD) defines “affordable housing” as housing that costs no more than 30% of the resident’s monthly income for rent and utilities.  This is significant because so much of our economy is dependent on consumer spending.  When a family has to spend more on housing it has less disposable income to help drive our economic engine.

The Joint Center for Housing Studies at Harvard reports that between 2001 and 2007 affordable housing stock fell 6.3 percent to 1.2 million units while affluent housing stock increased by nearly 100 percent.  The Center further reports that for every new affordable housing unit that is created two are lost to abandonment, waste, “condominiumization,” or expensive rental conversions.

The record compiled by HUD and other public agencies to fund construction of affordable housing in major metropolitan markets is not a happy one.  Last year The Dallas News broke a story about HUD-subsidized housing at the Ridgecrest Terrace Apartments that is disturbingly reminiscent of stories told by residents at some of public housing’s more celebrated failures like Pruitt-Igoe in St. Louis and Cabrini Green in Chicago.  At Ridgecrest tenants reported “a hellish swirl of drug activity, mold and mildew simply painted over, carpet so filthy it causes blackened feet and rashes, and water-leak stains on walls.”

Corridor, Pruitt-Igoe, St. Louis

What can be done to correct this historical tendency and help those in need of more affordable housing?  What are some possible solutions?

Because HUD defines affordable housing as housing whose cost does not exceed 30% of its resident’s income for rent and utilities, perhaps one solution is not to develop additional affordable housing stock but rather to find ways to make the current housing stock more affordable.  One strategy is to incentivize the private sector to develop new “co-housing” models like The Wild Sage Community in Boulder.  New private sector

Wild Sage Community, Boulder

mortgage financing instruments could also be developed to provide the necessary investor protections while expanding the qualified buyer pool of homeowners for affordable properties.  A combination of property tax abatements could be made available to both individuals and corporations that can demonstrate that they have reduced their rents to below market rates. Ensuring access to rent-controlled housing for those who need it most is another strategy.  In our larger cities rent controls have existed for decades but rent-controlled units are far too rarely leased by people of modest means.

The current affordable housing crisis presents not only a challenge but also an opportunity.  This is to use existing resources and common sense strategies to solve a longstanding urban development problem that, if left unaddressed, will only serve to prolong our economic woes.

Land Tax Reform and Urban Growth

(A version of the following appeared in the Pueblo Chieftain, co-authored with Kyle Cascioli, June 19, 2011).

Colorado Governor Hickenlooper recently signed into law House Bill 1146 rolling back the state’s favorable agricultural property tax rates for landowners who do not maintain farming or ranching operations on the property.  This became an issue when it was discovered that the state had a policy dilemma regarding the equitable application of Colorado zoning laws that determine whether a given parcel qualifies for the lower agricultural zoning property tax rate as opposed to the higher vacant land or residential zoning tax rate.

The critical point concerns developers who acquire large blocks of agricultural land for speculative future development as part of land banking strategies.  In some cases developers either discontinue agricultural operations, scale operations back to insignificant production levels, or fail to maintain the land so that it remains agriculturally viable until such time that it is developed.  Taking agricultural land out of production prematurely can have disastrous consequences.  Last year in Florida, for example, tens of thousands of citrus groves “land banked” by homebuilders for future development were unmaintained, and became a breeding ground for a type of lice that eventually destroyed millions of acres of crops across the South.

The new law does nothing to address the premature removal of land from agricultural production.  The law will zone and tax these properties at rates that are higher than the agricultural property tax rates, but only for properties under 2 acres.  During the run up to bill passage JoAnn Groff, the state’s property tax administrator, was quoted as saying that, “A  large number of Colorado agricultural properties include residences, and it will take effort to determine whether they are integral to agriculture.”  She went on to state that “Perhaps not from a revenue standpoint, but from a fairness and equitable standpoint, I think you [we] are taking a very large step.”

Ms. Groff, and our state legislators, have failed to address the real issue.  While the new law will require Tom Cruise to pay his correctly zoned share of property taxes for the Telluride parcels where he grazes a few sheep it will not discourage some production home builders from potentially gaming the system in land banking strategies.  Speculation and the accelerated disappearance of Colorado’s agricultural lands will be especially consequential for Colorado’s metropolitan suburban and exurban communities that benefit from nearby farming and ranching.

The critical issue here is not the equitable application of Colorado property tax law but the need to maintain productive agricultural lands until such time as they are developed in response to market demand.   Our legislators should amend this law in keeping with an ethos of agricultural and urban sustainability. They should work to create policy that will keep producing farms near urban communities on both slopes, mitigate exurban sprawl along the Front Range, and maintain the quality of life for all Coloradoans.

Agricultural Zoning and Urban Sustainability

(A version of the following appeared in The Fort Collins Coloradoan, co-authored with Kyle Cascioli and Ron Throupe, April 9, 2011)

It is sometimes said that the last crop to come out of dedicated farmland is a subdivision.  The Denver Post recently ran a two-part exposé on how tax breaks intended to help struggling farmers in Front Range counties, including Larimer County, are benefiting not those who make a living by growing wheat or grazing cattle, but rather those in the business of building houses and strip malls.

Agricultural lands are taxed at one of the lowest rates (mil levies) available. This rate is significantly below the ad valorem tax rate associated with unimproved property that’s zoned as “vacant land.”  Often owned by family operators or their descendants, undeveloped lands are typically dedicated to continuing agricultural use.  The Post story detailed how vagueness in state laws governing agricultural zoning have been exploited by real estate investors and land speculators to acquire and hold vacant lands for future commercial development.  Such “land banking” may artificially subsidize developers and land speculators while reducing the amount of land available for agricultural use.

Several questions arise from this situation.  One is whether investors and developers who acquire agricultural properties via land banking strategies—and who do not maintain those properties as productive agricultural lands—should benefit from reduced property tax rates that, technically, are being subsidized by other property taxpayers.  Another, more compelling question for us is whether the state’s policy accelerates urban sprawl, reduces the quality of Front Range life, and compromises the long-term sustainability of our towns and cities.

We believe that it does.  How so?

Once an agricultural property is no longer maintained its fertility is reduced.  Agricultural lands must be maintained to be productive, and many investors and developers do not maintain these newly acquired farmlands in the same manner as when they were dedicated farms.  Additionally, water rights are often stripped from the land and sold as a separate property interest to the highest bidder.  If the land is not maintained, it will be both difficult and expensive to return it to productive agricultural use.   The consequences of non-maintenance can be devastating, as evidenced by the continuing real estate bust in Florida.   In October 2010 The Wall Street Journal reported that nearly 140,000 acres of citrus groves across Florida have gone to waste as a result of failed land banking strategies.  The unmaintained land has become a breeding ground for a type of citrus lice responsible for a plague that is

Asian citrus psyllid

wasting millions of acres of crops in the Southeast.   Whether Colorado is susceptible to such an ecological and economic catastrophe as a result of land banking is an open question.  But there are certainly other sustainability implications.  As increasing amounts of agricultural land on the metropolitan periphery are taken out of production more farm produce and other food stock must be imported from more distant locations to supply Front Range cities.  With oil prices rising and continued political unrest in the Middle East it is likely that the cost to import produce and food stock from further distances to urban areas may also rise.  This could inflate metropolitan food prices, which are on the rise, and result in greater economic hardship for our most vulnerable urban populations.

The economic and cultural sustainability of cities is intimately connected to the availability and productivity of agricultural land.  Colorado’s agricultural zoning laws should only apply to actively maintained agricultural lands.  It should not provide incentives for those who would take agricultural land out of production to inventory for future development.  If the state were to create clear policy and guidelines for counties regarding the equitable application of these zoning requirements, we believe less land would be taken out of production prematurely and more would be properly maintained until such time as the seeds of that last crop – the subdivision – are sowed.

Housing Colorado’s Homeless

(The following appeared in The Boulder Daily Camera, co-authored with Kyle Cascioli, February 27, 2011).

Governor John Hickenlooper has long been an advocate for Colorado’s homeless.  As mayor of Denver Hickenlooper’s 2010 budget increased the amount that the city spent to support programs for the homeless.  Last January the US Department of Housing and Urban Development chipped in, awarding $18.6 million to Colorado homeless-assistance programs in order to keep them functioning in 2011.   HUD’s regional administrator Rick Garcia has pledged that two-thirds of the money will be used for transitional and permanent housing, with the balance being applied to the purchase of a new homeless management software system and homeless services.

Homelessness is a complex social problem that has many causes.  Increasing  gentrification of American neighborhoods, decreasing availability of low-income housing, deterioration of the social and economic safety nets that keep people from falling into homelessness, and routine political disenfranchisement of the social groups from which the homeless are generally drawn all contribute to the problem.  Effective efforts to cope with homelessness often combine subsidized housing with a variety of case management services.  While lots of attention has been paid to the kind and quality of services made available to the homeless (e.g., assistance in finding jobs, provision of child care, etc.) much less attention has been paid to the kind and quality of the buildings that house the homeless.

One city that is ahead of the curve in addressing homelessness from a “built environment” perspective is Los Angeles.  In recent years LA’s Skid Row Housing Trust commissioned a couple of new apartment buildings from the American architect Michael Maltzan that serve not only the homeless person’s need for shelter and basic services but also their psychological need for community and security—both key elements that can assist recovery and a return to self-sufficiency.   History has clearly taught that such needs were not fulfilled by the infamous “urban renewal” housing projects of the 1960s.   These generic, ruthlessly vertical projects—drawn up and somewhat deceptively marketed as “Towers in the Park”—tended to produce soulless, dehumanizing, and ultimately dangerous spaces against which residents understandably rebelled (think Pruitt-Igoe in St. Louis, or Cabrini Green in Chicago).

The Los Angeles experiment is quite different and signals a new way of thinking about the urban built environment and the people who occupy it.  Maltzan’s Carver Apartments, for

Carver Apartments

example, serves the homeless person’s need for community and security by encasing a grand staircase, central courtyard, and overhead view of California sky within a curved, scalloped, and narrow-windowed exterior that simultaneously engages with its local context while presenting a bit of a defensive air.  In one inspired tweak of design the building’s third floor community room and laundry—conceived as the domestic heart of the project—allows, through a long horizontal window, for direct and prolonged eye contact between residents and drivers on the adjacent Santa Monica Freeway.  These features have the effect of allowing the building’s occupants, in Maltzan’s words, “to not only begin to reconnect with each other, but to the larger city beyond.” While some might think the building’s design is extravagant for its intended use, isn’t it worth the cost if it allows residents to make a more successful transition from homelessness to self-sufficiency?  Plus, why should affordable housing be boring?  And why shouldn’t it both impact, and possibly improve, the surrounding neighborhood?

With the American economy continuing to struggle and foreclosures at an all-time high it is likely that the number of homeless people in Colorado, as elsewhere, will continue to rise.  Before building new homeless shelters in the state it would behoove Governor Hickenlooper and Mr. Garcia to think about how buildings themselves can serve as weapons in the war against homelessness.  They would be well-advised to explore how the ethos driving building design in other places might be re-interpreted and translated for a uniquely Colorado context.

Culturing Community in Urban Design

(A version of the following appeared in The Denver Post, co-authored with Kyle Cascioli, February 7, 2011).

Former mayor Federico Peña once implored Denverites to “Imagine a Great City.”  The Denver Post is regularly filled with opinions about how we might build something more akin to a “Good City.”  The concept of Good City was first introduced in the 1960’s by the philosopher Lawrence Haworth.  Haworth believed that the Good City must offer its citizens economic opportunity as well as the means to build strong community.  He noted that these two “ingredients” are often in conflict, so they need to be carefully balanced.  Today the Good City is also conceptualized as one that is environmentally sustainable.

In pursuing Good City visions planners and developers have generally looked to the outside for inspiration and best practices. They’ve looked to other cities (like Portland, Oregon) for guidance in creating mixed use, walkable, and tightly-knit communities.   Such communities are exemplified locally by Belmar, Lowry, and Stapleton.  They’ve also looked to  foreign architects (like Daniel Libeskind and Santiago Calatrava) for civic building designs (Denver Art Museum, Denver International Airport) that signal Denver’s economic viability and world city ambitions.

Largely ignored in the Good City dialogue are the cultural values that shape how ethnically-diverse groups respond to and use the urban built environment.  Given the increasing ethnic diversity of Denver and other American cities we believe that urban sustainability should be broadly viewed in cultural as well as economic and environmental terms.   In contrast to the typical “outside in”  approach to urban redevelopment described above, we favor an “inside out” approach that starts with locality—local culture and history, local community needs and aspirations—in planning for vibrant and sustainable urban communities.   We thus view real estate development as “Contemporary Urban Anthropology” (CUA).

Building community in a way that is sensitive to social and cultural difference is a central value of New Urbanist approaches to urban redevelopment.  However, this goal is rarely achieved in practice.  New Urbanist developments often don’t provide the variety of affordable housing that would allow even minimal social mixing, much less the kinds of architecture and other built spaces (e.g., parks and plazas) that appeal to the cultural tastes of different potential user populations.   The problem is amplified by the fact that land prices rise exponentially the closer a parcel is located to the urban core, where public civic space is most needed.   As Haworth understood, the project developer’s need for economic  profitability can easily impede efforts to build community.

Balancing opportunity and community is central to the inside out approach of Contemporary Urban Anthropology.  CUA has proven its value when applied in other American cities.  In Houston, for example, the real estate profession’s traditional “Highest & Best Use” (HBU) approach to development failed to produce a successful anchor tenant for a retail center called Westchase Plaza, located in one of the city’s most ethnically diverse trade areas.  HBU analysis seeks to find a balance between plans that are legally permissible, physically possible, financially feasible, and maximally productive…where productivity is measured as profitability.   Alternatively, the CUA approach added “culturally sustainable” to the HBU formula.  It specified that the best anchor tenant for Westchase Plaza would not be one of the more typical retailers or office users but rather a Hispanic cosmetology school.  The school has not only served the local population’s need for jobs training but has nicely integrated into the wider community’s diverse ethnic fabric.

Effective, culturally-sensitive urban planning will depend on changes in the way that we educate real estate professionals.  Not much has been written in the Post about the next generation of planners, developers, and contractors who would accomplish this work. We believe that higher education can and should be the catalyst for imagining new ways of thinking about real estate redevelopment, as well as the infill architecture and other built space that might better allow the users of redeveloped real estate to create distinctive identities for themselves. The academic studies of real estate and anthropology are bound by a common interest in the relationship between people and their built environment.  We need better ways to integrate the two.  Students must learn to view urban design and development as both an economic challenge and a cultural opportunity.   They must learn that where designed space can be culturally transformed by its users into lived place the prospects for sustainability are improved.  More and better collaboration across established academic disciplines promises to deliver ideas and plans that better serve the cause of building viable, sustainable, and good cities.