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A study out of Nashville by Smart Growth America provides more evidence that building walkable development in existing communities is best for a city’s bottom line.

Nashville's "The Gulch" -- a mixed-use development downtown -- generates a much greater public return than more suburban developments in the same city. Image: Cumberland Region Tomorrow

SGA recently examined three different developments in the Music City. One was a large-lot, traditional suburban-style development called Bradford Hills built on greenfield site. Another was a “new urban”-style, mixed-use, walkable development also built on a greenfield, called Lennox Village. The third — known as The Gulch — was a mixed-use, compact housing and office development with retail and dining, built on a brownfield between Nashville’s Music Row and downtown.

The study compared the costs of local services to each new development with the revenues returned. Overall, the urban, infill development was far and away the best value for municipalities.

The Gulch — a 76-acre project, including 4,500 housing units and 6 million square feet of office space — yielded the highest returns in the form of “property taxes, sales taxes, and other recurring revenues,” according to SGA. Per unit, the development produced a total of $3,370 in public revenue annually, while costing the local government about $1,400 per year in infrastructure maintenance, policing, fire response, and other general fund obligations. In comparison, the traditional suburban development Bradford Hills generated only half the revenue — $1,620 per year — and cost more to service — $1,600 — making it basically a wash for local taxpayers.

Per unit, the performance of new-urbanist Lennox Village barely beat out the large-lot suburban development, generating $1,340 for the municipality annually while costing about $1,300.

When you factor in density, the differences between the three models really crystallize. The Gulch, filled with condo towers, generated $115,720 in net revenue per acre annually. That’s an astounding 1,150 times greater than Bradford Hills, which generated a total of just $100 per acre. The downtown development also performed 148 times better for the local government’s bottom line than new urbanist development Lennox Village, which yielded $780 per acre.

Developers often shy away from urban brownfield sites, fearing the cost of cleaning them up. Given the incredible benefits to the city of that kind of development, there should be better incentives for developers to look to infill, rather than greenfields, for their next project.

The Linen Building in Boise, Idaho, is the kind of local success story that makes the EPA’s Brownfields program so popular.

Top: American Linen Supply, Boise, Idaho in 1950. Middle: In 2004, it was a blighted, environmentally contaminated site that scared developers away. Top: The redeveloped Linen Building houses a hotel, coffee shop, and restaurant. The site also hosts weddings, concerts and art shows. Images: Idaho Department of Environmental Quality

In the late 1990s, this former commercial laundry had become a blight on the city — a large vacant building in a prime, walkable downtown location. Developers admired it, but they knew that the former occupant — American Linen — had kept tanks of diesel fuel and industrial cleaning solvents in underground tanks. The threat of contamination was enough to scare off developers like David Hale of Hale Development.

“The unknown risk associated with potential contamination in the groundwater flowing on to and off of the site has caused the majority of possible buyers to seek other options,” Hale said.

Today Hale himself has transformed the site into a local gem. The Linen Building hosts art shows, concerts and weddings, in addition to regular tenants, including a restaurant, a coffee shop and a hotel with 41 rooms. Later this month this building will host the Treefort Music Festival, a four-day indie rock festival, that will draw some 3,000 people each day.

With an EPA Brownfields grant, Idaho Department of Environmental Quality conducted a groundwater analysis back in the early 2000s that determined the site was not the source of groundwater contamination. And that was enough to convince Hale to move forward with his plans to “lure people and businesses associated with the creative class.”

What made this project possible was environmental analysis through the EPA’s Brownfield Utilization program, which assists communities that want to bring contaminated property back into productive use.

There are an estimated 450,000 such sites around the country. These parcels average 6.5 acres each, together amounting to some 4,570 square miles of contaminated land, Smart Growth America estimates. Virtually every community in the country has one of these sites, which further the impression among developers that it’s too complicated and costly to develop infill locations in the urban core. Instead they bring their development to greenfield locations on the fringes, draining revenues out of cities and perpetuating disinvestment.

But there’s good news for these communities this week. Lawmakers from both sides of the aisle have come together to support the reauthorization of the EPA’s program. The Brownfields Utilization, Investment and Local Development (BUILD) Act was introduced late last week by a bipartisan coalition, sponsored by some of the most conservative members of of the Senate, including James Inhofe (R-OK) and Michael Crapo (R-UT) as well as Democrats Frank Lautenberg (NJ) and Tom Udall (NM). The new legislation not only proposes renewing the program but also expanding some funding and increasing flexibility. The bill would allow nonprofits to seek funding for site remediation and raises the limits on those remediation grants from $200,000 to $500,000.

Geoff Anderson, SGA’s CEO and president, says what’s made this program a bipartisan priority in such polarizing times is the sheer need and its track record for success.

“This bill is a lifeline to communities that are struggling to overcome blight and contamination at abandoned industrial sites,” he said. “And it will work in every community — big or small, urban or rural — re-positioning vacant properties to create new engines of economic growth.”

Craig Chester is a fellow at Smart Growth America.

Not all transportation in Honolulu, Hawaii is a walk on the beach.

Honolulu, one of the most congested cities in the country, could benefit from more transit-oriented development. Photo: ShowBus

Known for its breathtaking natural beauty and warm temperatures, Honolulu is also plagued by heavy traffic congestion and delays. High energy costs and a lack of transportation choices compound the challenges of getting around Hawaii’s state capital and most populous city.

To put it in perspective, Honolulu recently surpassed Los Angeles to become the city with the worst traffic in the nation. And on average, households in the City and County of Honolulu spent a whopping $13,598 each year on transportation alone, wasting an average of 58 hours in traffic during that time.

The good news, though, is that things don’t have to stay this way. Hawaii can and should put a renewed emphasis on expanding access to residents’ transportation options. Business owners and visitors would benefit almost immediately, as new economic development happens and older communities attract reinvestment.

That’s the verdict of a new collaborative report, “Leveraging State Agency Involvement in Transit-Oriented Development to Strengthen Hawaii’s Economy,” from Hawaii’s Office of Planning and Smart Growth America. Right now, Hawaii and its congested cities have a prime opportunity to implement plans for TOD, drive economic development, and restore the quality of life many expect from island living.

Best of all, Governor Neil Abercrombie has already set the wheels in motion, with the 2010 announcement of the New Day Plan, which envisions “livable communities that encourage walking, bicycling, carpooling, and using mass transit.” TOD can be key to meeting the plan’s economic, social and environmental goals.

Well-executed TOD reduces dependence on fossil fuels, protects open space and cultural resources through sustainable land use, helps advance education by better connecting students to educational facilities, and can allow retirees and elders to remain in their communities and “age in place.”

Read more…

Real estate in the United States, it turns out, isn’t really guided by “the invisible hand” of the free market.

Federal housing subsidies flow disproportionately to single family homes over multi-family -- distorting the housing market. Image: Smart Growth America

In truth, federal policy puts a finger on the scale in a major way. Even apart from the quasi-governmental Freddie Mac and Fanny Mae, the federal government is the single largest investor in the American real estate market. And according to a new report from Smart Growth America, each year an assortment of subsidies, tax credits, and deductions exerts $450 billion worth of influence on the location and character of American residences and commercial spaces.

That massive influence can distort the market in significant, and insidious, ways.

“Viewed as whole, federal funds are not targeted to those most in need, are not targeted to strengthen existing communities and are not targeted to places where people have economic opportunities,” says Smart Growth America’s research team.

For starters, according to SGA, not a single federal program is primarily focused on support for existing neighborhoods. Government priorities are often contradictory on this front, with subsidies operating at cross-purposes. One program may subsidize new housing in undeveloped locations, for instance, while another attempts to shore up the city neighborhoods left behind. These programs also fail to factor in what it costs to support real estate development: There is no preference for projects with lower long-term infrastructure costs, leading to higher spending on things like roads and sewers at the local and state levels.

Overall, the report suggests, federal real estate interventions undermine market trends toward the development of more walkable places. About 85 percent of federal housing subsidies flow to single-family housing over multi-family, although only 65 percent of American households are homeowners and the majority of renters live in multi-family buildings. This has hampered the market for rental housing even as demand for multi-family rental housing has soared following the housing bust.

“Federal real estate spending is stuck in the past,” said smart growth-focused real estate developer Chris Leinberger in an SGA-sponsored call with reporters yesterday. “It’s not what the market wants today, it’s what the market wanted in the ’70s and ’80s and into the ’90s.”

Leinberger added that while consumers are demanding walkable urbanism, federal policy stands in the way of that kind of development — to the detriment of the economy.

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“Innovative” might not be the first word you think of when you think of state DOTs. But Smart Growth America and the State Smart Transportation Initiative are out to change that. The two groups have published a menu of options for states looking to get out of the cash-for-highways rut. “The Innovative DOT: A Handbook of Policy and Practice” outlines myriad ways states can save money and create better transportation options for their residents. If states take note, we could see a lot more innovation coming out of some unlikely places.

Congestion pricing is one innovative way states can address congestion without creating more problems later on. Image: WSDOT

Tennessee has already done some soul-searching and has come up with a plan to turn around the state’s transportation system, partly due to the realization that the state had nine times more spending in the pipeline as it had money for.

Indeed, SGA and SSTI frame the need for innovation as, primarily, an economic solution. “Revenues are falling and budgets are shrinking while transportation demands grow,” they write in the introduction. “The only answer is innovation.” They have a long list of goals for the transportation system and suggest that everything from safety to system preservation to livability can be solved with their prescriptions.

“Traditionally, a DOT has seen its avenues of addressing a state’s transportation issues as narrow,” SGA’s Tom Madrecki told Streetsblog. “It could widen a road, invest more in this corridor vs. that corridor, etc.” But what if they dip their feet into an area they don’t normally address, like land use? Or consider road pricing or transit, instead of going back to the old ways of reducing congestion that actually end up just inducing more driving?

Al Biehler, former secretary of the Pennsylvania Department of Transportation, wrote in his foreword to the document that when he was secretary, Pennsylvania had 26 expansion projects on deck with a $5 billion price tag. “At the same time, our roads and bridges were crumbling and we couldn’t maintain our infrastructure,” he wrote. “After an honest evaluation, we came to a stark realization — we couldn’t keep spending money we didn’t have on projects that didn’t protect our assets.”

He said DOTs have to invest smarter — and that means “wring[ing] more and better performance out of their existing systems,” rather than always building new.

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Source: Smart Growth America

Last week, the Tri-State Transportation Campaign revealed how states prioritize spending: 20 percent for transit, 2 percent for bike/ped, 38.5 percent for maintenance, and about 22.5 percent for highway expansion. Looking just at those last two numbers, that breaks down to 71 percent more spending on repair than sprawl-inducing new lanes.

But Smart Growth America cautions that these figures may be misleading.

“It’s important to note that the Tri-State report is based on an analysis of State Transportation Improvement Programs, so it’s looking at planned funding, not necessarily real spending,” said SGA President and CEO Geoffrey Anderson in a statement.

In a 2011 study, Smart Growth America found a very different story. Between 2004 and 2008, states spent an average of 36 percent more on road expansion projects than they did on road repair projects, based on data collected from the states by the Federal Highway Administration.

Between 2004 and 2008, states spent $37.9 billion annually on repair and expansion of roads and highways. Of these funds, 57 percent went to road widening and new road construction – just 1.3 percent of roads. 43 percent went to preservation of existing roads, which make up 98.7 percent of the system.

There are two different conclusions one can reach when looking at the disparity between current state transportation plans (the numbers that Tri-State crunched) and the history of state DOT spending patterns (the numbers emphasized by SGA).

One, we can assume that states are road expansion addicts, always promising to quit and then falling back on their old ways.

Or, two, we can assume, as Anderson charitably (albeit cautiously) does, that “states are coming to grips with the huge backlog of upkeep and maintenance that need to get done” and that the near future will be different than the recent past.

AASHTO Executive Director John Horsley insists it’s the latter. In fact, he disputes Smart Growth America’s analysis, saying the FHWA biannual reports on state spending – up to 2008, the latest year available — show “a consistent upward trend in the percentage that’s spent on rehabilitation and preservation, as opposed to system expansion.”

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Tomorrow night, President Obama will unveil his jobs plan before a skeptical Congress. It’s unclear how much of the $300 billion proposal will go to infrastructure, but the president has said that will be a centerpiece of the proposal. An infrastructure bank and a new version of the expired Build America Bonds program could also be on the agenda.

How about this for your next transportation stimulus, Mr. President? Image: Austin Strategic Mobility Plan

Given the GOP strategy of obstructing any stated goal of the administration, it’ll be a tough sell. Some Republicans have already made it clear they would rather see a $640 billion, 12-month payroll tax holiday. That would increase the deficit by more than twice what Obama’s plan would, but deficits don’t seem to matter as long as taxes are getting cut.

So it’s no surprise that the president is also looking for ways that he can spur infrastructure job creation without Congress’s approval. Last week, Obama pleaded with Congress to pass a clean extension of the transportation bill (a plea which some Republicans are gleefully denying). At the same time, he announced that he was directing some agencies to each identify three infrastructure projects that could use a little federal help in speeding up the process. Here’s what he said:

In keeping with a recommendation from my Jobs Council, today I’m directing certain federal agencies to identify high-priority infrastructure projects that can put people back to work. And these projects — these are projects that are already funded, and with some focused attention, we could expedite the permitting decisions and reviews necessary to get construction underway more quickly while still protecting safety, public health, and the environment.

He specifically called on the departments of agriculture, commerce, housing and urban development, interior and transportation to highlight three projects each. We were wondering whether this process will end up falling into some of the same traps as the stimulus, which emphasized shovel-readiness to the detriment of other evaluation criteria for new projects, like whether the money would be well-spent.

Though Obama didn’t use the phrase “shovel-ready” last week, he called for projects that are already funded and have state and local permits, which implies nearly the same thing. Without a new stimulus, which the Republicans have already promised to oppose, there is no money to fund new projects, making it imperative to find those that are already funded. Still, the president admitted last year that “there’s no such thing as shovel-ready projects.”

And despite the administration’s general friendliness toward transit and understanding of the limitations of the private automobile, 60 percent of transportation dollars in the stimulus went to highways, with just 20 percent to transit. (Most of the rest went to freight rail, with a little bit for aviation and maritime projects.)

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Got a road that needs fixing in your state? Don’t hold your breath. Chances are your state DOT has been busy building new roads, while neglecting maintenance.

A new report from Smart Growth America [PDF] finds that states spent 57 percent of their highway funds building new roads between 2004 and 2008. As a result, 23,300 new lane miles were constructed — a 1.3 percent expansion. Meanwhile, the existing 1.9 million lane miles deteriorated under a regime that prioritizes expansion of the system over its maintenance.

New roads got more than their share of tax money between 2004 and 2008. Image: Smart Growth America

The Federal Highway Administration reports that half of all major state roads were in “fair” or “poor” condition in 2008.

“It’s imperative that states rethink how they invest their precious transportation dollars,” said Erich Zimmermann, a policy analyst with Taxpayers for Common Sense, a co-sponsor of the study. “Since 1956 federal taxpayers have invested in the neighborhood of $1 trillion the nation’s highways and therefore have an interest in making sure these investments are kept in a state of good repair.”

“Unfortunately nobody gets to cut a ribbon when a road is fixed,” Zimmermann continued.

The lack of attention to existing infrastructure is likely to have a long-term cost, well beyond the immediate “savings” of doing nothing. The American Association of State Highway and Transportation Officials reports that every dollar spent to keep a road in good condition helps save $6 to $14 that would otherwise be required to rebuild a significantly deteriorated street.

“It just becomes incredibly expensive to fix these roads when they’ve passed a certain state of disrepair,” said Grace Crunican, former Director of the Oregon and Seattle DOTs. “We’re not doing a good job prioritizing what the needs are.”

Perhaps most significantly — and rather obviously — states’ fetish for new building means that road networks are actually expanding as they continue to fall into worse condition. Smart Growth America determined that states would collectively need to spend $43 billion every year for 20 years to bring “poor” roads into “good” condition and keep them that way. That’s more than the $38 billion all the states combined had to spend each year on both new construction and maintenance between 2004 and 2008.

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