Thursday, September 8, 2011

Culture change or fad? - Finance & Commerce

Posted: 8:00 am Wed, September 7, 2011
By Bill?Clements
Tags: construction, development, economy, John Kari, land use, Libby Starling, Metropolitan Council, Robb Bader, Ryan Jones, Southwest Corridor

Robb Bader is vice president of St. Louis Park-based Bader Development. Three Bader generations work in the same office and these days are focused on developments closer to city cores and transit options ? like the Ellipse, a year-old mixed-use development on Excelsior Boulevard in St. Louis Park. It has been 100 percent leased for months. (Staff photo: Bill Klotz)

All that talk in recent years about ?transit-oriented? and ?mixed-use? developments appears to be more than just talk: Regional planners now have the data to back it up.

Planners for the Metropolitan Council released the information, which points to a statistically significant trend of more people in the seven-county metro region moving closer to the central core of cities and to more accessible transit options in higher-density areas. The land-use data also project a fast acceleration of the shift in the next 20 years.

It?s contained in a study that considers the 2005-10 period and looks forward to 2030.

(The projections to 2030 are based on land-use estimates in the comprehensive development plans, referred to as ?comp plans,? that metro cities last updated with the Met Council in 2008).

This move toward smaller houses and multifamily and transit-oriented housing closer to cities ?is not a flash in the pan,? said Ryan Jones, director for the Twin Cities of Metrostudy, a construction industry group that studies and tracks new home building.?However, it?s not going to be the absolute for everyone.?

In other words, whether the shift is a long-term cultural change or a fad is still in question.

The shift started in the late 1990s, said John Kari, a Met Council planning analyst. It got a boost after the start of the Livable Communities Act and its programs ?that really helped communities see the synergistic potential of walkable, connected land uses particularly with transit,? he said in an interview.

And it?s significant.

?This is the major change in planned land-use expectations that we?ve seen since we?ve been doing local comp plans since the ?70s,? Kari told the council in a recent presentation.

Key to this concept are ?mixed-use? developments, which Kari and research manager Libby Starling have defined as ?connected and integrated? developments that serve two or more purposes ? retail, commercial and residential. They do not have to include residential.

?A lot of communities don?t know exactly what the mixture [of mixed-use] will be in future,? Kari said, ?but this is where they want to see development, where they expect it to go ? and it?s more likely to be higher-density development.?

The land-use study data found that 5,625 acres in the metro area were taken up by mixed-use development in 2010, and projected that number will soar to more like 55,000 acres by 2030.

The data also show that transitway corridors in 2010 took up 8.4 percent of the region?s land area. But by 2030, it?s expected that transitway corridors will be home to 31.6 percent of mixed-use acres and 22.7 percent of high-density acres.

The bottom line, Kari told the Met Council, is that the new major transit corridors ? like the Hiawatha, Central and Southwest light rail lines ? are being built in established highway corridors.

?You put two and two together, and you can see that where we are investing in new infrastructure is in the transitway corridors,? Kari told the council. ?We are out of the highway business [out of building new roads].?

In the interview, Kari wondered whether the trend will stick: ?As we come out of this recession, it will be very interesting to see how the market responds. Is that a permanent shift toward more permanent attached and smaller single-family detached housing??

He thinks it just might be.

The numbers on the left of the chart represent the existing and expected acres that ?mixed-use? developments took up in the metro area in 2000, 2005 and 2010 ? and estimates for 2030. The projections to 2030 are based on land-use estimates contained in ?comp plans? that metro cities last updated with the Met Council in 2008. (Submitted chart: Metropolitan Council)

?The transit system really complements the highway corridors,? Kari added. ?Like when we had the railway- and water-transportation systems, I think our highway and transit systems will work together to give us a real transportation network.

?And where they overlap are the places that will see real growth.?

An example of a successful mixed-use, close-in development is the Ellipse on Excelsior Boulevard in St. Louis Park, which opened on Sept. 1, 2010. It?s within a half-mile radius of a planned stop along the Southwest Corridor LRT line and just off Highway 100.

Robb Bader, vice president of Bader Development, an arm of St. Louis Park-based Steven-Scott Management, said the 132 rental units in the Ellipse have been 100 percent leased since February ? and the four retail spots have been filled and open since June 1.

?We had confidence in the residential lease-up; we knew that would be a good area,? Bader said. ?The commercial, we were pleasantly surprised at how quickly that leased up.?

Bader said his firm is in initial discussions with St. Louis Park officials about beginning a second phase ? Ellipse II, which would be a 50- to 60-unit rental development next to Ellipse I.

Rents at Ellipse I range from about $1,100 for a 550-square-foot studio to about $2,300 for a 1,400-square-foot two-bedroom plus den.

?We certainly know that the rents need to justify construction costs, and right now that is happening close in to the city so that?s where we are building ? along with many other people trying to get projects going,? Bader said.

He added that while access to transit was an important factor for where his firm built the Ellipse, ?We still believe that the Minnesotan is really a vehicle-driven person. We?re not quite there yet in terms of transit.?

Kevin Locke, community development director for St. Louis Park, said the city?s planning goal is ?to make people places and not car places. It?s not that we don?t accommodate a car ? most of us still drive cars.

?But we can do our best to focus more on the pedestrian and the residents and less on the car.?

Jones of Metrostudy said the ?resurgence? of the multifamily rental market is ?a combination of the fears about the economy and with home buying.?

He suggests that the shift is part of a cycle.

?These types of cycles happen all the time ? before it was more out of the city and into the far-out suburbs, and now it?s moving back into the city,? Jones said. ?But just when you think you?ve got it all figured out, it starts to change again.?

Source: http://finance-commerce.com/2011/09/culture-change-or-fad-twin-cities-population-shifts-toward-central-core/

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