The fiscal case for smart growth is gaining steam. New Urban News (now Better! Cities & Towns) reported on a groundbreaking study in Sarasota, Florida, in September of 2010 that showed enormous advantages in per-acre tax yields for mixed-use, downtown properties.
In the March 2013 issue we reviewed Arthur C. Nelson’s book, Reshaping Metropolitan America, and some of his numbers are further analyzed in an article in the current issue of Better! Cities & Towns. One of Nelson’s main findings is that a demographic wave of Millennials, who are delaying having children and strongly prefer urban places, combined with the downsizing Baby Boomers, will transform the character of the housing market in the next two decades. There will still be plenty of households with children in America — Nelson forecasts more than 38 million in 2030. But these households will make up a very small share of the nation’s growth — and therefore a small share of the growth in the housing market. The majority of the growth will be single-person households (see table above). “The bottom line is that a new reality has emerged: The future of American planning and public policy will be geared to meeting the needs of households without children, with half the new market being single-person households,” Nelson says. “Yet, our planning, zoning, and development codes remain rooted in reality that no longer exists — that of mass family and child-oriented markets.”
Three developments were studied in the Nashville area: New urban infill and greenfield neighborhoods and a 1990s conventional suburban development. The infill development far outdistanced the others in net revenue, according to a report by Smart Growth America. The Gulch neighborhood in Downtown Nashville, a redevelopment of a 76-acre brownfield site originally designed by Looney Ricks Kiss, generated $115,720 in net revenue per acre — almost 1,150 times the net revenue generated by Bradford Hills (conventional suburban) and 148 times the net revenue of Lenox Village (new urban greenfield). The Gulch cost less per unit to provide services than the greenfield projects. The lesson: Investments required for infill revitalization generate a higher return on investment (ROI) than building in far-flung suburbs — in this case at least. When building does take place in distant suburbs, it appears that a new urban design performs better. The Gulch has additional advantages: It appeals to the young and educated workforce that is a key market segment this decade, and it supports transit. The Gulch — and to an extent, Lenox Village — also offers strong placemaking, which creates a distinctive identity for an urban neighborhood.