How to redo commercial strips, one piece at a time

Visions for how to remake drivable suburbs into walkable neighborhoods usually depend on large plans, government infrastructure investments, developers with deep pockets, and significant financing. All are in short supply in 2011 — and may be for years to come.

Incremental Sprawl Repair (ISR), which emerged out of the 2010 Congress for the New Urbanism in Atlanta, is conceived to bypass those barriers. The ISR Working Group has created building types designed to kickstart change in what members call “corridors of crap,” the spread-out, haphazardly planned commercial arterials and collectors that can be found in abundance in every metropolitan area.

The buildings offer low-cost, small-scale, rental-based, mixed-use models that can be built with conventional Federal Housing Administration (FHA) and Small Business Administration (SBA) backed loans. One of the types even comes with a development pro forma.

The buildings don’t require good urbanism, although some kind of community vision for a better built environment is important.

ISR theorizes that even a single, well-designed, low-cost building can add diversity and set a precedent for transformation of a poorly planned place.

Fayetteville, Arkansas, architect Robert Sharp, active in the working group, recalls that his thinking changed on a CNU tour of new urban resort town Rosemary Beach, where the group examined a four-plex residential building.

“Andres Duany gestured and said: ‘This is the future of New Urbanism: four-and six-plex stacked flats with surface parking behind. Abandon all plans that require structured parking, your clients can’t afford it.’ Duany also said that we must learn to create good urbanism with single-story commercial buildings for the same reason. He was essentially saying that the multi-story mixed-use building type was a bridge too far in the current situation.”

The need for developing new building types designed for sprawl locations is driven by two factors, Sharp explains: First, the ongoing real estate crash has severely limited available financing — the current lending environment favors small buildings that meet FHA and SBA criteria. Second, much of the inexpensive, underutilized land is in the suburbs — where infrastructure that favors automobile-only transportation cannot be transformed quickly or easily.

Mixed-use that the feds will back

Anderson|Kim, participants in the ISR Working Group, designed a two-story building with four apartments and one commercial space (see the first image). The building can be financed with a standard 20-percent-down, FHA-insured mortgage. Because the commercial component is just under 20 percent, it meets FHA standards. The commercial can be leased as retail or one or two offices — making for high-visibility, inexpensive spaces. The building requires no elevator and meets accessibility requirements. “The slab-on-grade construction and simple form make it cost-effective,” says John Anderson of Anderson|Kim.

The footprint is 2,300 square feet. The total size is 4,588 square feet — about as big as a McMansion. The modest size means that, even with surface parking in the back, this mixed-use building could easily fit on a quarter-acre site.

“The discussion in our shop settled in on the quarter-block (about a half-acre) as the biggest increment we want to mess with in the near term,” Anderson says. “You can always aggregate smaller scale projects into a bigger one, but it can be tough to phase a big project in smaller coherent pieces.”

Parking in back and modest size make this building ideal for ISR. Parking lots on the street are a primary factor in why commercial strips are unfriendly to pedestrians. This building will not perpetuate that problem — instead its placement along a sidewalk begins to create an urban space. The small footprint means the building won’t interfere with larger-scale retrofit plans in the future — which may involve breaking up vast parcels into smaller blocks. In the meantime, residential and mixed-use elements are injected into a suburban monoculture.

Static pro forma

Anderson has written up a “static pro forma” for this building, based on conditions in his town of Chico, California — but it can be customized for any city or town (see the static pro forma image). A static pro forma looks at the cash flow in the first year and is a “back of the envelope” way of testing a building’s financial feasibility, Anderson explains.

The building requires only a $122,800 down payment and, under the Chico scenario, yields a 9.8 percent pre-tax return on equity (cash flow — no long-term equity is considered). The important debt-service coverage ratio, i.e., net operating income over debt service payments, is 1.38 percent. “Lenders want this to be at least 1.25 in good times, 1.35 these days,” says Anderson.

Livable microclimate

For a half-acre site off of a four-lane suburban collector in Fayetteville, Sharp designed six townhouse units in two buildings enclosing a courtyard. “By orienting the townhouse frontage along a shared pedestrian space that is parallel to existing arterial streets, a livable micro-climate can be created,” explains Sharp (see third image at right).

This arrangement can also include two sets of four-plexes, for a total of eight units. “Each group of townhouses can be financed as a fourplex or triplex,” Sharp says. “In addition, each townhouse unit can be sold separately if built with a two-hour-rated wall and separate utility services.” This flexibility gives the investor options of selling off portions or all of the units in the future.

The townhouses units are combined with a small standalone commercial building that could be financed as an SBA loan, Sharp says. “This example shows retail or office below with office above.” The commercial building is about 2,400 square feet, with similar-sized spaces above and below that can be further subdivided. The mixed use, in this case, is horizontal rather than vertical.

How to cut costs

Robert Sharp gives this advice, based on strategies for cutting costs in his ISR designs:

• Keep unit sizes small. Design the dwelling units so that they are flexible and can be used for many purposes and reduce wasted space. For commercial units, allow maximum flexibility and keep the unit size small. Our local market is glutted with 1,500 square foot and larger retail shops and 3,000 square foot and larger office suites. There are many budding entrepreneurs that need very little space to do their business. I am seeing lower vacancy rates in the smaller units.

• Limit the number of corners.

• Stick with conventional residential construction techniques: Sloped roofs, operable windows, and wood-frame construction are far more cost effective than flat roofs, glass curtain wall, and steel.

• Use “Light Imprint” techniques for paving and storm water. For example, we are recommending the use of gravel parking lots rather than asphalt. We try to avoid drop inlets and buried concrete piping in favor of stone channels on the surface.

• The mixed use programming allows shared parking, which allows us to use the land more efficiently and therefore reduce the cost of land and parking relative to the leasable areas of the buildings.

• Minimize interior finishes. It is easy to add interior trim, flooring, and upgrade appliances and fixtures over time.

• Renovate where possible. We look for ways to keep and rehab existing buildings where possible. It’s more cost-effective than new construction and allows an income stream during the process.

• Use slab-on-grade construction where it makes sense — such as retail and office spaces and wheelchair accessible units at grade. Sometimes crawl space construction is cheaper than slab on grade if it reduces site grading.

How not to cut costs

The following are items on which Sharp says he will not compromise:

• Parking is always carefully placed: on-street parking, screened parking courts, and small parking lots are used to make sure that the buildings relate to the street and the public realm properly.

• Vinyl siding and fake materials such as inoperable shutters will not be used. “Even though we are working in areas that are characterized by cheap throwaway buildings, we are trying to change that culture,” he says.

Sharp notes that large-scale plans for the suburban transformation are admirable — just difficult to pull off in this economic climate and open to only a small number of players.

“We’ve had these vast master plans with multistory buildings, going from sprawl to a great European city with nothing in between,” he says.

ISR can empower people of lesser means to make a difference. “We’re looking for small victories,” he says. “We feel that many people working on many small projects will come together to create a changed built environment.”

To find out more about this idea, go to isrworkinggroup.posterous.com