Growth in TND steady, but slower; neotraditional home sales strong

Traditional neighborhood developments under construction in the US rose by 28 percent in 1999. Traditional neighborhood development (TND) in the U.S. continued its steady growth in 1999. However, on a percentage basis, the increase was not as great as in 1998. TNDs appear to be holding their own against conventional suburban development (CSD) in sales, and TND builders generally are able to charge a significant premium for their homes. A study by George Washington University, which examined four TNDs, calculated this premium at 11 percent. Even higher premiums are common in TNDs with the right planning, architecture, and home features, based on New Urban News research. Many challenges remain for TNDs, however. Once construction begins, the biggest difficulties are creating viable commercial town centers, and, for some projects, incorporating production builders and offering affordable housing. Financing and development approvals remain significant concerns — a fact that is limiting the growth of TNDs. Some exciting new TNDs are appealing to previously unexplored markets. As TNDs grow, however, so do the number of hybrid projects that incorporate some elements of the New Urbanism — but retain many characteristics of CSD. New Urban News’ annual survey identified 124 TNDs in groundbreaking and construction in 1999 in the US, up from 97 in 1998 — a 28 percent rise (see table of projects on page 8). In 1998, TNDs under construction rose by 51 percent, from 64 in 1997. Including projects in planning, New Urban News identified a total of 252 TNDs, up from 201 last year. For the first time, New Urban News is only listing projects under construction, for there are now too many TNDs to list every project in planning. New Urban News defines TNDs as new urbanist projects built on a neighborhood scale, or larger. They must have a mix of uses and housing types, a compact, interconnected street and block pattern, a clearly defined center for each neighborhood, and pedestrian-oriented design. About 25 percent of the TNDs, or just over 60, are located on infill sites (in May, 1999, New Urban News published a separate list of 156 new urbanist infill projects nationwide, including TNDs and smaller infill projects that adhere to new urbanist principles). Three quarters of TNDs are built on undeveloped sites in suburban or exurban locations. Inner city TND exceeds market expectations One of the most significant new TNDs to come along in 1999 is located in a troubled urban area. Park DuValle is the first sizable new development on the west side of Louisville in at least half a century. A market analysis by Zimmerman Volk projected 39 home sales in the first year. “A lot of people were skeptical about that,” says Cash. “There was no good measure of the depth of market in this African American community.” Actual sales in Park DuValle, designed by UDA of Pittsburgh on the former site of a troubled public housing project, have greatly exceeded projections. Within three and a half months, 90 sales contracts were pending, with 38 completed. “The biggest surprise was the demand for estate homes,” says Cash. “Our primary target market was $80,000 to $130,000, because Louisville is a very affordable city.” But now builders can’t provide enough $250,000 homes to keep up with demand. In one case, a buyer backed out of a contract for a $245,000 house, and it was resold in 20 minutes, according to Cash. “As soon as we’re putting homes out there, they are selling. And when it comes to the bigger lots, people are fighting over them.” Park DuValle illustrates how TND can tap into a previously hidden market — a discovery that could prove to be a key contribution of the New Urbanism. “You couldn’t have paid a builder to come in here and do a project development,” says Cash. “Not if you covered all of his expenses, and paid him a fee.” With 1,200 units, Park DuValle may be the biggest attempt to date of New Urbanism in a run-down inner city neighborhood. The very size of the project enables the developers to offer potential buyers a level of certainty with regards to architectural appearance, safety, and the quality of the public realm. One third of homes in Park DuValle will sell at the market rate, one-third will be subsidized to sell at lower than the market rate, and one-third will be public housing. This makes for a “wonderfully diverse” neighborhood, Cash says, with bankers and doctors buying homes around the corner from public housing units. Codes ensure that the architecture of all units is compatible and similar in quality, he adds. Civano demonstrates affordable urbanism In Tucson, Arizona, Civano is another TND that got off to a fast start this year, selling 97 units from April through July. While not public housing, Civano is selling relatively affordable single homes, starting at $99,000. Designed by Moule & Polyzoides, Duany Plater-Zyberk, and Wayne Moody, the project is offering homes based on Sonoran adobe architecture — the first units of this style built in Tucson in many decades — mixed with southwestern bungalows. Civano has a very urban character for its location on the metropolitan fringe, with some zero lot line homes grouped around a mixed-use neighborhood center. “The next place you see zero lot lines is downtown Tucson” about 12 miles away, according to John Laswick, project manager for the City of Tucson’s Economic Development department. Although the developer, Community of Civano LLC, is private, the city contributed funds for Civano’s infrastructure. Most TNDs offer a range of housing types and prices, including rental units, but few are marketing moderately priced for-sale units. Civano is one of the few privately developed new urbanist neighborhoods that has met the affordability challenge head-on, while striving for interesting and attractive streetscapes. Intense urbanism amid sprawl The $500 million Addison Circle in Addison, Texas, is the most ambitious urban project undertaken by Post Properties, one of the leading new urbanist developers. When complete, Addison Circle will have up to 3,000 dwelling units, mostly various types of apartments plus townhomes, and up to 4 million square feet of commercial space on 80 acres. Post, which started out as a strictly suburban apartment developer, is the only firm of its kind to transition to building mixed-use urban neighborhoods. After phase two, which is nearing completion, 1,100 residential units, 110,000 square feet of streetfront retail, and 300,000 square feet of offices will be in place. Addison is smack in the middle of edge-city type sprawl about 12 miles north of Dallas. The project, designed by RTKL, is taking shape as a remarkable piece of urbanism. It’s also Post’s fastest leasing project nationwide, with about 60 new rentals per month. Apartments are renting from about $450/month for an efficiency to $5,000/month luxury units. The centerpiece of phase two is Mildred Street esplanade, where much of Addison Circle’s streetfront retail is being built. This esplanade will include a 7-Eleven convenience store, which will serve as the project’s “corner store,” in an urban storefront below apartments. A dry cleaner, a beauty salon, a pharmacy, a cigar shop, a coffee shop, and a handful of restaurants round out the mix. With the exception of the restaurants, which will draw patrons from outside the project, the shops are expected to primarily serve residents and workers in Addison Circle. Art Lomenick, Post executive vice president, says the high demand for renting in Addison Circle is “part of a hunger nationwide for urbanity.” Other projects of note In the Lowcountry of South Carolina, two projects are being developed by Vince Graham and Robert Turner, the developers responsible for Newpoint, one of the best looking small TNDs in the US. Vince and his father Tom are creating I’On, a 243-acre project that survived a lengthy power struggle with local officials and residents in Mount Pleasant, outside Charleston, and finally received approval in 1997. Eighteen months after home sales began, I’On is selling seven or eight homes a month built by local, custom builders. Robert Turner is now developing Habersham in Beaufort with Stephen Davis. Among the early buyers in Habersham is Peter Katz, author of The New Urbanism: Towards an Architecture of Community. Katz, who owns an investment home in Habersham, looked all over the US for top quality TNDs before he made the purchase. He notes that both Turner and Graham are among the best TND developers at working with builders to raise the level of home craftsmanship. Turner is offering some nicely detailed 2-bedroom cottages starting at about $140,000, and larger homes selling for substantially more. “People are willing to pay more for less, in terms of square footage, but it has to be really nice,” Turner says. “They want the hardwood floors, nice moldings, and all the bells and whistles.” One of the first buildings in the town center will be a fire and emergency rescue service substation. Turner has convinced local officials to build an old-fashioned, two story building — they even decided to install a brass pole. River Ranch in Lafayette, Louisiana, could be an inspiration to developers considering TND. Since July of 1997 the project has been designed, approved (111 variances granted), financed, come under construction, and the developer has sold 170 lots. “The real estate market is softening in Lafayette, and yet our sales are going up,” says Steve Oubre of Architects Southwest, the town planner. “That says a lot about this project and this type of community.” Town centers TNDs are maturing to the point where a number of town centers are getting underway. Building TND residential blocks and streets is a challenge, but the town center can be baffling. The location of the town center, the parking, the tenant mix, the architecture of buildings, whether and how to place apartments above retail and how to incorporate big box stores: all are difficult issues. When it comes to building town centers, few hard-and-fast rules apply. The long-awaited town center in Kentlands, called Midtown, is nearing completion. Like most mixed-use TND centers, Midtown is not in the center of Kentlands, but off to one side to benefit from traffic on Kentlands Boulevard. It incorporates some fairly large retail stores and a six-screen cinema, but includes no true “big boxes.” Most of the stores are in single-use buildings, although the center does have about 20 live/work units with shops below and apartments above. Kentlands’ Midtown, in short, borrows many elements from modern shopping centers and places them on a mixed-use, modified grid of streets. TNDs require unorthodox building types and mixes of tenants. At River Ranch, developer Robert Daigle is constructing his town center in 4,000 to 8,000 square foot sections of buildings, each with retail ground floors and either offices or apartments above. The buildings are a maximum of 2.5 stories, and that combined with the small square footage allows wood frame construction and keeps building costs at a reasonable $110 to $115 per square foot. At Mashpee Commons in Mashpee, Massachusetts, the developer has settled on a mix of tenants which is evenly split between national, regional, and local retailers. This differs significantly from Mashpee Commons’ main competition, the Cape Cod Mall, which is filled with national retailers, and from nearby historic main streets where almost all shops are locally owned. Incorporating big box stores remains a problem for new urbanist town centers. Some developers are trying to get big retailers to switch to more urban building forms, e.g. with liner shops along the front. Persuading them is not easy. Other new urbanists are designing town centers that incorporate conventional parking-in-front big box stores — placing them in locations that don’t disrupt the primary main street.Other challenges Production building remains a challenge for the New Urbanism. Many of the most successful TNDs to date are using custom builders, and charging custom prices. Others are incorporating production builders to cut construction costs per square foot. Many projects run into problems with production builders, and Celebration is a prime example. The construction quality of the homes was a major source of complaints in Disney’s town near Orlando. Two new books reviewed in this issue — Celebration U.S.A. and The Celebration Chronicles, offer detailed accounts of difficulties that were faced by Town & Country Homes and David Weekley Homes. While the main problems at Celebration related to labor shortages, subcontractors, and the pace of the construction, the architectural guidelines also put a strain on production builders, according to Douglas Frantz and Catherine Collins, authors of Celebration, U.S.A. Both Weekley and Town & County were new to TND when they signed up with Disney. In a number of TNDs, builders are constructing typical suburban homes — with minor modifications like moving the garage entry to the back or the side. This creates a problem because TNDs require a simpler, more elegant design than what is found in the typical suburban tract development. Furthermore, the smaller lots common to the New Urbanism demand special attention to creating backyard privacy. In many cases, builders are failing on both counts. The result can be a project that looks and feels little different from suburbia, with the additional burden of no privacy. This is happening in some projects that meet the basic planning principles of the New Urbanism, i.e. interconnected streets, mix of housing types and uses, neighborhood center, and compact, pedestrian-oriented layout. TND is often an exercise in compromise. For every developer like Robert Daigle of River Ranch, who was granted a truckload of variances in a short period of time, other developers are mired in entitlement and/or financing troubles. Otto Fullbaum expected to have Prairie Village in Waterloo, Illinois, under construction by now, and instead is still negotiating with local officials. He eliminated carriage houses, an important part of the plan, in order to keep the project alive. Prairie Village has much in common with the historic town of Waterloo, Fullbaum says, noting ironically: “It’s illegal to build Waterloo in Waterloo, just as it is in any community.”