It has always seemed to me that you were either made for urban life or not. The Green Acres theme song plays in my mind that has the very stereotypical city lover, Eva Gabor, challenging her farm-loving husband: “New York is where I’d rather stay. I get allergic smelling hay. I just adore a penthouse view. Dah-ling I love you but give me Park Avenue.”
(If it is now in your head, you’re welcome. You can listen to it now and sing along.)
The song goes on to talk about city life defined by stores and Times Square. This show, aired in 1965, captured some of the very definitive qualities of urban life then, but that also have been able to persist over time.
The recent pandemic rewrote that storyline. During the pandemic, the media obsessed over urbanites fleeing the cities for more freedom and less dense places to live, which definitely happened to a certain extent. But, just like every other cycle of pandemic or urban fall out, this one will end according to the experts I spoke with, and when it does, urban life will come back bigger and better than ever before.
In his recent report, Daniel McCue, a senior research associate at the thinktank Joint Center for Housing Studies of Harvard University, notes that some urban areas may see even more demand. With the new remote work trends, some of the highly desirable city neighborhoods that were only convenient to a few commuters are now more accessible to a larger group of residents.
Mollie Carmichael, principal at real estate data firm Zonda, also shares data from 2021 that shows that net migration back to urban cities is already positive in many large cities like New York, where a net of 1,900 people were added in the first two months of 2021 versus a loss of 7,100 in the same two months of 2019.
Zonda data shows migration trends were down in 2020 but moving back up in 2021 because one in five want an urban location and that half want walkable town centers in suburban areas. Carmichael also sees that retail is on the way to reinventing itself and that safety and strong planning principles are more important than ever.
“It wasn’t that long ago when we transitioned to a world when there were more people in cities than not in cities, which happened in 2010 or 2011,” said Alison Novak, the head of Sidewalk Urban Development at Sidewalk Labs, an urban innovation company. “That’s the trajectory that we will continue to see. There will be growth in cities all over, but we are seeing trends to Sunbelt states.”
Novak is leading the company’s advisory services to developers and has been incredibly busy educating the industry at large. In the short amount of time that it took to write this, I heard her present at a couple different conferences, plus do an interview for an industry podcast.
She identified several very important trends that are impacting urban revival right now – sustainability and inclusivity.
“Development projects are hard – there are a lot of risks – you have to find the right market, the right product, and manage a lot of actors to produce a building where people will live, work and shop,” Novak said. “Developers need to eliminate risk. We need more models to look at that can be derisked, while at the same time, we need to take some risk to innovate, experiment and bring benefits to everyone.”
Several big events during the pandemic put social inequity into mainstream focus again, which is one risky, yet critically important element of today’s projects.
“One way social equity translates to developers is through the expectations and the demands of their investors,” Novak said. “There is even more awareness on ESG. It isn’t just impact investors who have to be aware of ESG, but it’s everyone.”
Jeff Foster is a principal at design firm GGLO focusing on urban design. He also finds that incentives encourage developers to include aspects of social equity because if there isn’t a mechanism, the developers aren’t interested.
Some of the tools that he sees can be enticing for developers include multifamily tax exemptions and inclusionary zoning.
“The incentives have to be valuable,” Foster said. “It has to be attractive enough for developers to make it work in their pro forma. We see all too often that municipalities think that there is more value in what they are offering than what there really is.”
The other factor that both Foster and Novak cited as critical to tomorrow’s urban landscape is sustainability. Fortunately, more stakeholders are prioritizing this at the same time. More policy makers are making mandates to lower carbon, while more investors are seeking investments that have a strong return, but also get sustainability gains.
“The approach to sustainable design is primarily from the perspective of carbon reduction and tracking it as part of a 2030 commitment,” Foster said. “We’re all looking for more elegant, desirable design solutions. We’re seeing more interest in mass timber for what would have been a typical wood frame and it’s starting to make financial sense. Other solutions include grey water recycling, green roofs, density, integrated storm infrastructure and district energy.”
Novak helps urban developers plan for operational savings that come from sustainability interventions, and that actually help future proof a project.
“There are things that might have a high capital cost today, but that make a property better positioned so that when you put it back on the market in 10 years that it is still considered Class A, and it has the same Cap rates versus buildings that didn’t take on the climate demands of the future,” she said. “Projects need to take on the demands of inclement weather, on site power generation, and islanding away from the city or block.”
Daniel Gehman, is a principal at architecture firm Danielian Associates, and outlines some of the ways to actually make a project more future proof.
First, it’s important to plan for a primarily electric future, which includes not only all building systems (HVAC, cooking, water heating), but electric vehicle charging as well. Developers need to size the building’s electrical service for future needs, and pre-wire for more future charging stations.
Second, it’s critical to integrate as much on-site energy generation as possible, including photovoltaics or even wind turbines where appropriate.
Third, is to think about transportation. If there is structured parking, design it with speed ramps to keep the parking floors level, and allow additional floor-to-floor height to accommodate adaptive re-use in the future to office or residential. Gehman also suggests planning for rideshare and places for residents to interact with autonomous vehicles that are pleasant and functional for pickup and drop off.
Finally, he suggests a new approach to water supply that incorporates or just anticipates the use of gray water for toilet flushing and irrigation.
Sustainability and Inclusivity In An All-Electric Neighborhood
Sidewalk Labs was called into a cutting-edge project in Potrero Hill, San Francisco, to advise on the right technologies to make it an all-electric neighborhood, with both the risky social inclusivity and sustainability objectives.
The 21-acre site is a former PG&E power plant that retired in 2012 when the city found it could bring power in from 37 miles away instead of within city limits. The unique site sits on the waterfront and was part of only 2% of waterfront that was not in public ownership.
“When this property came up for sale, it was a unique moment,” said Enrique Landa, a partner at real estate investment and development firm Associate Capital, that is managing the project. “The city had been expanding uninterrupted since 2007. This site, because it was large and in private hands and unplanned, allowed for a unique opportunity to reimagine a neighborhood.”
Associate Capital acquired the land in 2016 and has brought in a large group of architects, planners and advisors, like architecture and design firm Perkins&Will and later Sidewalk Labs to explore the opportunity, broken into feasible phases that make the project both flexible for future needs and functional for today’s needs.
The project represents one of the largest housing projects in the city, with a total of 2,600 housing units planned. It also will include 1.6-million-square-feet of commercial space, a hotel, 100,000-square-feet of retail, and 7 acres of parks.
The project represents the desire that stakeholders have for the sustainability and social equity values that Foster and Novak attribute to future urban development. The developer’s focus on sustainability and equity was received well by the community, which supported it strongly, leading to its unanimous approval in a few short years. Landa believes that this was a rare feat in San Francisco where large projects are often contentious, delayed, and at times rejected.
Construction on the infrastructure started in February and will take two years to complete before vertical construction starts. Delivery on the first phase is planned in 2025 and 2026.
With its history as a power plant, the site has unique buildings on it that the project developers want to retain. The original power plant is being reimagined by Herzog & de Meuron, an architecture firm that is transforming what remains of it into an office building. Planning for the future design of the second power station begins next year, but will focus on retaining the 300-foot chimney stack.
Handful of residential buildings designed by architecture and engineering firm Fosters + Partners. Set for multigenerational living.
“The folks at Sidewalk are mad scientists and magicians and are going to bring exciting projects to life,” said Landa. “We have to deal with the legacy of burning fossil fuels now, so we’re switching to all-electric buildings. It’s the first project to commit to all-electric execution, and that’s the part we are working with Sidewalk Labs on, to explore how all electric neighborhoods get built and then on a district level and economies of scale and what could be done, with an eye on affordable electrification.”
In the current process of building out the infrastructure, the electric has to be sized up to carry the load and there will be no natural gas involved.
The project had three principles: purpose, people, and proximity. The sustainability elements are part of the purpose. The focus on people includes childcare, a community center, the right type of housing, work, and transportation.
The retail is described as a work-in-progress to include destination waterfront retail, that maintains the neighborhood feel. Landa even proposes not making money on the retail, but positioning it as an amenity to assure a successful community.
“So, the retail is a partner in the placemaking of the project,” he said. “We are also looking at affordable, workforce housing, because that’s what makes neighborhoods stronger.”
For the proximity portion of the project, there will be quick and easy connections to everything that the residents need from jobs to transit to retail.
“Being in front of the water in San Francisco is a magical experience,” Landa said. “It is a hard place for residential, but this will be a wonderful place to live with the amenities the project offers and the water.”
Amenitizing The Future
Foster sees more cities and developers open to renovating spaces and introducing uses that were not in the realm of imagination. His firm is working on a project north of Seattle called Northgate that is a complete redevelopment of a single-purpose shopping mall into three NHL practice rinks, office, hospitality, recreation, and 900 units of housing all connected to a recently opened light rail station.
Based on his Harvard study, McCue deducts that since the pandemic has created a separation between jobs and housing, neighborhood amenities could play a bigger role in housing choices.
“Amenities have been getting bigger and more extravagant,” Foster said. “But, you couldn’t use any of those grand amenities during a pandemic. We will have another pandemic. We have to figure out how to live through the pandemic. We need to create social spaces. There is an increasing need for larger family units.”
Foster also notices that there is a disconnect in the process because it’s a challenge to estimate the value of new amenities. For instance, there is more emphasis put on the value of outdoor spaces and a renewed focus on sites that are close to trail systems and parks.
Foster is excited about the potential for improvements and making semi-urban, “hipsturban,” former languishing suburbs vibrant walkable communities.
“We are creating a pretty compelling project, with accessibility, diversity and waterfront experience,” Landa said. “Cities work spontaneously because of density and opportunities for creative collaboration. As a tool for cooperation, a city is unstoppable. The urban trend that we have, while there are ways to work differently, there are new lifestyle opportunities.”
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