Smart money is finding its way to smart growth; investors are finding that once distressed urban areas offer considerable upside in a largely tapped out real estate market. Some have raised concerns that once the tide turns, the new investors will turn out to be just another set of absentee landlords.

1. Big money finds Bronzeville. Central Station’s corporate developers, Forest City Fogelson, have purchased eight acres (about two blocks) from Mercy Hospital for a $150 million market-rate development called Eastgate Village: “on the east side of the hospital campus, located between 25th and 26th streets, and from Michigan Avenue to King Drive. The estimated 550 townhomes, duplexes, senior living units and condominiums will be priced from $185,000 to $450,000.”

Loft conversions first moved south to Cermak maybe 3-4 years ago, as converters ran out of buildings closer to the Loop. A few small developments have taken place south of the McCormick Place/I-55 blockade that separates Bronzeville from the Near South; this is by far the biggest non-HOPE VI development on the mid-south side since the days of urban renewal.

2. Magic Johnson is investing in a 216-unit conversion of the 1929 Williamsburg Savings Bank. Brooklyn’s tallest building has long stood alone over Fort Greene and offers both commanding views of Manhattan and great subway access within the building; it’s also around the corner from BAM.

Canyon-Johnson Urban Funds hopes to deliver $1.5 billion in investments in 25 cities by year’s end. Additional financing comes from Citibank Community Development.

“H. Thomas O�Hara has been tapped as the architect. He has been instructed to maintain the landmark property�s exterior fa�ade, interior bank vaults as well as its famous clock tower perched atop the building, according to a spokesman for CJU. K. Robert Turner is a managing partner of Canyon-Urban Johnson Funds, an equity investment fund that is devoted to revitalizing apartment buildings and mixed-use projects in inner cities. He is a partner with Johnson.”

Odd that Magic Johnson seems to have succeeded in raising a higher profile nationally than, say, Andrew Cuomo or Henry Cisneros.

3. Phil Angelides leverages yet more funds for smart growth, in cooperation with foundations and private investors. From GlobeSt:

“Phoenix Realty Group and the San Diego Capital Collaborative have launched a new venture called the San Diego Smart Growth Fund with a $90 million investment that they plan to leverage into $500 million in market rate housing and commercial development. The $90 million includes $60 million from CalPERS, the California Public Employees Retirement System.

“The partners describe the new fund as an effort to revitalize urban centers and to create affordable housing for middle-income residents. It will provide funding to build approximately 2,000 market-rate housing units throughout San Diego County as well as neighborhood retail centers that would serve the housing.”

“The Smart Growth fund will be capitalized only with private sector capital, and will operate in accordance with market disciplines to produce an equity return from mid to high teens.”

Composed for a group of people I don’t know, at the request of my boss, in response to attacks by Charles Shaw on New Urbanism’s good name:

I think that Charles fundamentally misunderstands New Urbanists’ role and response to gentrification in three crucial ways.

First and foremost, New Urbanist practice plays at best an incidental role in the process of gentrification. New Urbanism is a method of implementing market and/or government investment in cities — it is not the (capitalist, corporatist, whatever it is, I agree that it’s problematic) ideology behind that investment. The forces of public and private investment, disinvestment, and reinvestment are too broad for anyone — much less New Urbanists, who hardly enjoy hegemony over the nation’s housing market — to control. As Charles Bohl wrote in an extensive article on “New Urbanism and the City” in Housing Policy Debate (with equally interesting responses by Michael Pyatok and Shelley Poticha):

“New Urbanism is not a housing program: It cannot defy the dynamics of real estate markets nor ensure that affordable public housing units will be provided without public sector involvement… New Urbanism is subject to the limitations of place-based initiatives, which do a poor job of addressing problems that originate outside the local community, such as racism; inequality; spatial mismatches; and local, state, and federal policies affecting low-income populations…

“What happens to the portion of the inner-city neighborhood that is displaced in order to create a more diverse, mixed-income neighborhood? What happens to the residents of public housing projects where highrises are destroyed and fewer units are replaced by low-rise development? New Urbanism does not provide solutions for these and other problems spawned by inner-city revitalization strategies.While the different types of housing espoused by New Urbanism might present better options for inner-city households, many will be excluded from these options without housing assistance and some type of fair share or inclusionary measures, density bonuses,and other incentives.”
(Charles Bohl, “New Urbanism and the City,” http://www.fanniemaefoundation.org/programs/hpd/v11i4-index.shtml)

Further, Shaw’s claim that New Urbanism has nothing to offer to America’s poorest has no basis. Public housing revitalization, as epitomized by the HOPE VI program (which CNU helped to write the design guidelines for), has had a truly momentous impact in strengthening poor, inner-city communities nationwide. A recent (but, as of yet, unpublished) study by Danny Boston of outcomes for residents of new, mixed-income housing in Atlanta found dramatic improvements on almost every quality of life indicator — joblessness, school performance, safety, resident satisfaction, etc. Those gains have come all while investing public dollars wisely — in durable, sustainable communities, built along time-honored patterns of human settlement.

HOPE VI did indeed result in an overall loss of housing units affordable to extremely low income families; even if densities remained stable, reducing the percentage available to public housing tenants from 100% to 40% results in a significant reduction of units, and funds for replacement public housing are scarce. Yet where funds and programmatic support were available — as at Diggs Town in Norfolk, Archer Courts in Chicago’s Chinatown, Columbia Point in South Boston, at Aliso Village in East Los Angeles, or at Arverne and Edgemere at Far Rockaway in Queens — new urbanist redesigns of public housing have been accomplished without displacing a single resident. Even critical authors agree that the problem is with underlying social policies rather than New Urbanist strategies per se:

“In the transformation of public housing, NU is not categorically the culprit. Rather, the NU principles are used to justify reducing the number of public housing units overall. Instead of dismissing it wholesale, activist planners need to capitalize on the NU climate, particularly the promotion of mixed-income housing, to push for more, not less, affordable public and private housing in all our communities.”
(Janet Smith, “HOPE VI and the New Urbanism,” http://www.plannersnetwork.org/htm/pub/archives/152/smith.htm)

Secondly, the issue of gentrification is much too complex to reduce to a single perspective or a single “correct” answer — it is not a subject to be examined cavalierly. The many social and economic forces underlying gentrification interact with even individual lives in countless, conflicting ways. For instance, I am, for better or worse, a Wicker Park gentrifier — a well-educated recent arrival working as a “symbolic analyst” downtown, shopping at the boutiques and calling the cops with quality of life complaints. Yet simultaneously, my grandfather’s old neighborhood–Chinatown in Los Angeles, itself an early (ca. 1939) example of “festival marketplace” urban renewal — went through a long period of disinvestment as many of its residents (e.g., my parents) moved out to suburbia. Nowadays, Sunset Boulevard is Cesar Chavez Avenue and German fashion designers occupy the storefront where my uncle sold produce. How are we as individuals, or as communities, supposed to understand and respond to such broad forces of social change — some of which spring out of the failing codependency between America’s markets and its governments (i.e., its communities)? It’s a challenging enough question without resorting to broad-brush attacks, and I don’t trust anyone who claims to have a simple answer to a complex question.

As Ellen Dunham-Jones, a charter member of CNU puts it, New Urbanism is “a forum, not a formula.” That’s why New Urbanists created the Congress — not the Center — for the New Urbanism. The ranks of New Urbanists include many voices, who (in my experience) collectively have done tremendously thoughtful (and often effective) work on understanding the root causes and ramifications of gentrification, and addressing those factors through New Urbanism.

For example, one new initiative that CNU staff are coordinating seeks to understand how good design — including revivals of historic housing types — and streamlined regulations can help builders reduce the cost of housing. Yet most of our resources lie in our members, the ones out in the trenches and working on these conditions every day. New Urbanists include developers and architects who build and design housing affordable to both the workforce and very low income individuals; the chair of our Real Estate Development task force is a mixed-income developer in Chicago, and architects on our Board of Directors (like Ray Gindroz and Dan Solomon) have designed tens of thousands of homes — public housing, private subsidized housing, workforce housing, and market-rate housing. New Urbanists include activists from community development corporations in small Southern towns like Macon, Georgia and large Northern cities like Washington. New Urbanists even include advocates like the Henry George land-value-taxers, who despite their lack of political instinct do have a constructive answer to the problem of land speculation (and its ancillary effects, including gentrification). As New Urbanists, all of these voices engage in often-rancorous and always ongoing debate about issues like gentrification; for evidence, see the recent posts below from a New Urbanist list, only the latest of many waves of posts about gentrification. (The posts were by David Brain, John Hooker, and Emily Talen.)

Third and most obviously, gentrification existed before New Urbanism did, so it’s specious to call the latter the progenitor of the former. The following dates are mostly from Neil Smith’s openly Marxist book “The New Urban Frontier”:
circa 1870.: “embourgeoisement” coined in France
1963: “gentrification” coined by Ruth Glass in “London: Aspects of Change”
1976: ULI study finds half of US cities seeing some signs of “gentrification”
1985 December 23: “Is Gentrification a Dirty Word?” ad in New York Times
1988 August 6: First Tompkins Square riot
1993 October 8: The Congress for the New Urbanism first meets

The effects of pre-New Urbanist gentrification are on wide display throughout urban North America: for instance, the many 1960s slabs of middle-income housing along Chicago’s north and near-south lakefront, along the East River from Stuyvesant Town to Yorkville, or in the West Ends of Vancouver or Boston. By any definition, that was gentrification but categorically not New Urbanist.

Conversely, I can’t think of any examples where New Urbanism has de-gentrified a neighborhood (i.e., lowered its socioeconomic status), but examples abound of instances where NIMBYs have opposed New Urbanism with such fears clearly in mind. Examples of New Urbanist intervention in stable, working-class neighborhoods without gentrification are limited to a few infill housing developments and community plans, but that’s more because these neighborhoods’ political marginalization means that little large-scale investment or planning takes place in those neighborhoods precisely until the moment gentrification — by definition, an influx of outside investment — begins.

and while I’m posting things I wrote at work today, a response to a question about “a certain kind of economy… conducive to the development of New Urbanism.”

Although there’s some literature out there on the impact of telecom on urbanism and economic development, not much of it has specifically discussed New Urbanism. Some of it has focused on urbanism more generally, though, and a theme that I’ve seen across the literature is that while the internet may make transferring data easier, in another sense it even further privileges face-to-face interaction. Thus, the theory goes that online retailing will ultimately hurt resellers of commodities, like big box retailers, rather than downtown merchants who can trade on the experience of personal contact; similarly, although commodity work like call centers can be easily outsourced, “creative” industries that rely heavily on personal interaction to generate ideas will continue to thrive within urban settings (cf. Florida).

New Urbanist development regulations largely arose alongside slow-growth, pro-environment political coalitions in many cities — particularly along the Pacific coast. Some authors have said that the increased mobility that the internet allows will lead telecommuters not to single houses atop hilltops, but to high-quality-of-life towns within reach of metropolitan amenities (cf. Nevarez), and that those towns will develop slow-growth (and often, although not necessarily, pro-New Urbanist) politics as a result.

Some books you may want to look for:
– William Mitchell, “E-topia” (MIT, 1999)
– Leonard Nevarez, “New Money, Nice Town” (Routledge, 2003)
– Richard Florida, “Cities and the Creative Class” (Routledge, 2004)
– Joel Kotkin, “The New Geography” (Random House, 2001)

Joel Kotkin has lately made a name for himself by disparaging Richard Florida, but some aspects of his book echo Florida’s argument: that engineering jobs thrive in manicured, suburban “nerdistans” while economies in urban areas are dominated by a “cultural-industrial complex.”