Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Thursday, September 04, 2014

Urban farming vs. Urban residential infill

A corn-based entryway, Chillum Road, Prince George's County
A corn-based entryway at a house on Chillum Road in Prince George's County, Maryland.

The Atlantic Cities has a piece, "How Urban Farming Is Making San Francisco's Housing Crisis Worse," which makes the point that providing tax incentives in San Francisco for vacant lots to be urban farms/gardens, when San Francisco has a housing crisis is bad policy (a/k/a "insane").

Interestingly, I had the same kind of argument apparently 4 years ago ("Gardeners near Capitol Hill prepare to repel a Marine Corps invasion," Washington Post), with an ex-commenter, about this same issue in the context of Greater Capitol Hill and the expansion of the Marine Barracks.  Said expansion will end up taking out an urban garden.

I said that the choice was easy, build.

... making the point that urban gardens are a land utilization strategy for weak real estate submarkets when there are no or limited viable alternatives for absorbing/using the land.  Ironically, an Atlantic Magazine blog ("Community garden, or gardening community") argued in favor of not building on the garden, using it as a community building element.  (I see the point, but in the Capitol Hill neighborhood, most people have alternatives, they just can't garden on a large scale.)

A household on the 100 block of 4th Street SE plants basil and tomatoes in the treeboxes adjacent to their house.

Ideally, urban gardens aren't aren't an end game, but an interim strategy--just like the sad end when artists get displaced after improving the "quality" and perception of a neighborhood so that it is repriced and becomes "valorized".

He challenged me to come up with reasons.  I didn't get into it.  It's all about "highest and best use."

I wasn't that great at economics in college--graphic reason and math skills (not good at calculus) did me in.  But urban real estate issues make very clear how economics works.

The reason for DC's skyrocketing housing prices?   Greater demand and minimal supply.  So prices go up.

Limited supply of new affordable housing?  New construction costs more than previously built properties (most of the time).

Because of the height limit, land supply and build out capacity is limited.  This constrains the economic viability of constructing lower cost housing at a profit.  So people build to the most profitable, expensive segments.

When housing demand is high, residential lots should be used for housing.  If not, it's one more contributor to higher rents or property purchase prices.

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5 Comments:

At 8:57 AM, Anonymous charlie said...

Not arguing with the larger point, which is well made.

But it does show that WITHIN markets there are areas that are not doing well, and urban gardens make sense. A question of magnification.

But going to economics, DC has skyrocketing housing prices?

http://www.marketwatch.com/story/only-a-dozen-large-metro-housing-markets-feature-both-affordable-for-sale-housing-and-affordable-rental-housing-2014-08-21

(the cleveland fed just did a report as well, and basically "DC" is returning to 2005 or 2006 levels. Can't find the link, sent it to GGW, perhaps they will run it)

Yes, housing prices in now desirable areas of DC are 10x what they were in 1999. Hard to find a towhouse for sale for 100k, or a apartment to rent for 250 a month. But as you have said before those are artifically low.

SFH are a bit bubbly in DC, but that is what you happen when you have couples who both make over 100K bidding.

 
At 9:19 AM, Blogger Richard Layman said...

you're absolutely right that it's not a good idea to overgeneralize, that the issues are submarket-based.

So yes, for e.g. a long time the H Street submarket (anything north of H) was subpar compared to Capitol Hill, so was Hill East, but somewhat better than H Street, Trinidad much worse, etc. Logan Circle/14th Street were subpar compared to Dupont Circle. U Street worse than those places (which is why U Street feeling screwed because Whole Foods--forget the name of the predecessor company at the moment--chose P St. instead of U Street). Georgetown more pre-eminent than any of those, etc.

I remember massive apartments at Cathedral Gardens (a/c units) across the street from the Zoo for about $800/mo. in 1989.

But that "one over neighborhood" velocity changes things over long periods of time.

For me, the escalating price thing in DC is mostly a function of a "slight" increase in demand coupled with limited inventory, especially of SFH, and underwriting guidelines + the high income households.

(which is why lower income households need three incomes to buy a house)

Interestingly, and I haven't written about it yet, "recently" the city-state of Hamburg made a commitment to producing 6,000 units of new multihousing every year for the forseeable future. And their planning and permitting is aligned with that goal. And it's in response to escalating prices.

Interestingly/2, the previous government (c. 2000) believed there was no need for additional social housing, so production of social housing was not prioritized at all. Therefore, none was provided for in the initial HafenCity plan, in acccordance with stadt policy.

That changed with a successor government and in 2010 they updated the HafenCity plan, and in the to be constructed areas, the social housing percentage will be 33%.

That change in policy hasn't been discussed much in the public presentations by HafenCity...

 
At 10:20 AM, Anonymous charlie said...

http://www.economist.com/news/finance-and-economics/21614165-house-prices-europe-are-losing-touch-reality-again-deflating-bubbles

Again in germany a function on interest rates.

And in the US, we've hit new records wiht multifamily construction. I have a hard time imagining how we could have built more in DC.

Inventory is low, and presumably part of the problems is families in Ward 4 and 5 dont' want to move because they can't buy a replacement house. No idea what you paid for yours but I am sure it is doing very well on paper.

 
At 10:53 AM, Blogger Richard Layman said...

not sure. The market is so funny. Ironically, the assessment value has dropped significantly from the time of purchase, which is great for taxes, obviously.

But a few weeks ago, we went into a house a block away. It had been "fully renovated," not done too badly. A basement renovation, more bathrooms than our place, dinky yard compared to ours (our backyard is about 90x48), but small rooms, not super better, but it's all a matter of taste.

It's on the market for almost $650K. I can't see it selling for that but with limited inventory...

2. wrt your point about European interest rates, wrt "the last US bubble" that was my point the whole time, that the reason that the US housing market was doing "so well" was because the economy was doing somewhat poorly so that interest rates were abnormally low.

When we (former wife) bought a house in 1989, the interest rates were about 10% (a little under). The decade before, they were around 15%...

 
At 10:57 AM, Blogger Richard Layman said...

not sure how the market is working in w5. In w4, houses turn over slowly, but a lot of houses are literally, empty (a lot meaning between 5-10% depending on the area). They've been in the family for awhile, they are paid off, etc. E.g. a house two doors down has been "being renovated" for 6 years, empty all the while. They've been waiting for the price to rise. It's gross, on the outside, what they've done, but apparently the inside is nice.

On our face block (22 houses) at least 3 are empty and 2-3 are only semi-occupied.

... but virtually every new household is white, hispanic or mixed race, not so much black.

And it is incredible these days how many white people you see walking dogs, baby carriages, etc. to the point of being somewhat disconcerting.

 

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