Economic Opportunity & Small-Scale Manufacturing

GMDC picThere is a new opportunity in our changing cities to connect more residents with economic opportunity. We can do so by integrating small-scale industrial uses into our city development. Let’s call this mixed-use industrial real estate.

We are seeing a resurgence of small, local producers who are harnessing cheap technology and changing markets to sell hundreds and thousands of locally produced consumer products. Documented early on by Chris Anderson, and seen across the country today, these companies are often businesses with fewer than 20 employees and sell both in local markets and globally online.

These small-scale manufacturing business owners generally need dedicated production space of less than 5,000 square feet (often as little as 1,000 sq. ft), use clean technologies (think laser cutters), but need affordable, dedicated industrial/production space. They do not fit into office space because of noise, and most retail space is too expensive. So they often find marginal, cheap space at the fringes of our cities and survive on short-term leases or move far out into the suburbs.

The time is ripe for policy change and private sector investment to create this kind of development. The demand for small-scale consumer goods and locally made custom goods are growing and access to tools and technology gets cheaper. We need to provide affordable space for our local producers to grow their businesses in our city neighborhoods. By doing this, we will be able to connect more people to good-paying jobs, strengthen our small business and startup sector, and keep them all in the city.

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Spotlight on Sustainability: Madison, WI

Unsustainable growth, lack of economic opportunities, community health concerns, and loss of natural resources—these are issues facing cities and towns across the country, and Madison, Wisconsin is no exception. But, regional planning organizations in the Greater Madison area are now attempting to confront these endemic issues in a strategic and sustainable way that utilizes Madison’s strengths rather than allowing its weaknesses to be barriers to an effective response.

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Partnership in the News: HUD officials visiting Texas witness economic development in action

During a recent trip to seven Sustainable Communities grantees in Texas, Department of Housing and Urban Development staff were able to see new and innovative economic development strategies in action. They visited Regional Planning grantees Houston-Galveston Area Council and Heart of Texas Council of Governments near Waco, as well as Austin, which received both Regional Planning and Community Challenge grants, and other Community Challenge grantees Dallas, Fort Worth, and Garland.

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Smart growth gaining traction during economic downturn

Smart Growth America’s President and CEO Geoff Anderson and Vice President of Policy and Research Bill Fulton sat down last week with the San Diego Union Tribune‘s Roger Showley to talk about places using smart growth strategies in a tough economic climate and the state of the smart growth movement. From ‘Smart Growth’ gaining traction in downturn:

Q: What is the state of smart growth at a time of slow growth and economic stagnation?

Geoffrey Anderson: Smart growth is gaining traction, particularly if you look over a 15-to-20-year perspective. If you think back to the mid-’90s when cities were almost assumed to be dead — relics of a past age that were overtaken by the domination of auto-oriented suburbs — the contrast between that view of walkable neighborhoods, of smart growth and what we see today, is striking by any measure, and nowhere more so than how the market views it. There was a lot of skepticism among the private sector that this was something people wanted, and now it’s practically a given by a lot of the development community.

Q: What’s driving this change?

Anderson: We’d be fools to discount the impact of changing demographics. The difference between the 1960s, when half the households had kids and today’s (is that) it’s 30 percent and headed downward — you can’t overstate that difference in the population. We’ve built up a regulatory, financial and development infrastructure to serve that market. Look away for a second and it’s changed, and we forgot to change with it.

Q: How has smart growth played out in the real estate recession?

Anderson: Part of what we’ve learned is where we have really overbuilt. Virtually every place around the country forms a concentric circle. Moving out, values have been dropping. You see center areas and walkable areas holding values best, and large-lot, drive-only places are losing value.

Read the full article: ‘Smart Growth’ gaining traction in downturn (San Diego Union Tribune, February 13, 2012).

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Spotlight on Sustainability: Mitchell to Rapid City, South Dakota

The following is based on an interview with Bruce Lindholm, Program Manager, South Dakota Department of Transportation.

For farming communities in South Dakota, high transportation costs for crops has a major impact on the economy. Increased mileage and fuel prices mean that less money goes back into farmers’ pockets and into the local community. All of that is about to change with the help of a TIGER II grant from the U.S. Department of Transportation, through the federal Partnership for Sustainable Communities. The Mitchell-Rapid City Rail Line, in the midst of rehabilitation, will soon be able to transport agricultural commodities shorter distances and at lower costs than the trucks currently in use. Once completed, the Line will carry grain and fertilizer over 60 miles from Mitchell, SD to Chamberlain, SD.

The improvements will be a boon to the economy. “Significant savings in transportation costs will allow the local elevator to pay farmers 15-25 cents more per bushel for their product. That money goes back into the local economy,” says Bruce Lindholm, Program Manager at the South Dakota Department of Transportation (SDDOT). He and others at SDDOT are overseeing the reconstruction of the rail line through a predominantly agricultural and rural region of the state.

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Spotlight on Sustainability: Thurston County, Washington

The following is based on an interview with Kathy McCormick, Senior Planner for the Thurston Regional Planning Council.

When the state of Washington adopted a Growth Management Act in 1990, local jurisdictions set about creating Comprehensive Plans; soliciting public participation in the process. Thurston County was one of them. Now, in the twenty-plus years since that piece of legislation was enacted, the region has grown by over 100,000 people, making it one of the fastest growing counties in the state. “We have a great foundation in the plans that exist from the 90s,” says Kathy McCormick, Senior Planner for the Thurston Regional Planning Council, “But, how can we continue to grow if people don’t know about those plans and how can we address the needs of a changing population if we don’t know what those needs are?” Over two decades later, the region is getting the chance to revisit those issues.

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Transportation projects will stimulate new jobs

The unemployment rate is staying stubbornly above nine percent and the President is preparing to offer new ideas for job creations. Hopefully he will pay attention to what groups like the American Society of Engineers and Transportation for America are promoting: infrastructure and transportation will create good, sustainable jobs across the country.

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Living may actually be cheaper in the region's core

Originally written by David Alpert and posted on Greater Greater Washington
August 3, 2011

The classic rule of thumb, “drive ’till you qualify,” holds that the farther you go from a city center, the cheaper the cost of living. But a new report shows how in the DC area, housing near the core and near transit stations can be cheaper when transportation costs are factored in.

The Office of Planning worked with the Center for Neighborhood Technology to customize their “H+T” housing and transportation index for our region, and to incorporate more recent American Community Survey data as well as Census data.

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Round Three: Your Stories About Avoiding the High Cost of Gas by Walking, Biking and Taking Public Transportation

A recent NBC poll found a whopping 69 percent say that high gas prices have affected them either “a great deal” or “quite a bit.” That was significantly higher than any other economic concern on the list– higher than rising food prices, foreclosures, or even unemployment.

When Smart Growth America asked for stories about the impact of high gas prices, a number of people told us about lifestyle choices they made so they wouldn’t be dependent on driving or severely affected by gas prices. Several people told us they chose to live in a place where walking, biking and public transportation were viable options because they wanted that kind of freedom for getting around. Here are some of their stories:

Seven years ago, when Patricia moved from “car-country California” to coastal North Carolina, gas prices were $1.38. But she said, regardless of the cost of filling up her tank, they wanted to live where they could walk or bike for most of their daily errands. Now gas prices have tripled. While she’s glad she’s not reliant on a car for most daily needs, her family is still carefully considering (and cancelling some) long-distance car trips. Patricia also noted that since gas prices started climbing she’s seen more people of all shapes and sizes out on their bikes– a trend she thinks is a good thing.

Steve from Kansas City told us “three years ago when my wife and I were considering buying a new house, availability of mass transit was a high priority and living in a ‘walkable neighborhood.’ We now live a half block from a bus stop and within 4 miles of my wife’s work. We regularly walk for errands or ride our bicycles.” Steve logged 3,500 miles on his bike last year (that means savings on gas and a gym membership!) and frequently rides the bus. He mentioned that now that gas prices have gone up he’s noticed many more bus riders, and he’s relieved that he and his wife don’t have to worry about gas prices too much.

When Gretchen moved to Boston last year, she got rid of her car. Gretchen pointed out that in addition to gas, she didn’t want to be beholden to maintenance, repairs and parking expenses too. It can be challenging to visit her family in New Hampshire where public transportation options are limited, but with some flexibility, carpooling, and building in extra travel time she’s been able to make due car-free and is happy with her decision.

As gas prices remain high, more and more Americans are looking to drive shorter distances or increase their transportation choices. The NBC poll is a reminder that even though gas prices have recently dropped 30 or 40 cents from their high earlier this year, this significant expense is still hurting household budgets across the country – and people are starting to make big changes in reaction to that. Part of Smart Growth America’s work is helping great communities have more low cost options for getting around, but we need to hear from you to do it. Read other stories about how people are dealing with the high cost of gas here and here, and click here to tell us your story.

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Smart Growth to Blame For the Housing Crash? Not By a Long Shot.

Cross posted from Streetsblog.

The Wall Street Journal yesterday posed the question of whether smart growth policies

and land use restrictions were to blame for the housing boom and bust. The hypothesis comes from Wendell Cox, a long-time critic of smart growth, who, in a recent paper, recycled a specious argument that land use regulations caused housing prices to increase unsustainably, creating the real estate bubble and, eventually, the collapse of the housing market. Cox claims to show that differences in how metro areas regulated development explain the recent housing crisis.

Cox’s argument is full of holes. He examines a few cherry-picked cities while ignoring what happened nationally.

The irrationally exuberant housing market affected real estate prices in most of the country in the decade before 2006, with a pronounced increase after 2003. The only national variable that correlates clearly with this overwhelmingly national trend was the loosening of mortgage lending rules and Wall Street’s invention of new ways to profit from bad loans — not land use restrictions.

In contrast to Cox’s hypothesis, rates of foreclosure correlate most strongly with the year a home was built. All other things being equal, newer neighborhoods – built during the boom and financed with non-traditional loans – have more bank-owned homes now. In other words, areas that pulled out all the stops on new development suffered more than those that took a more measured approach. Rather than impacting neighborhoods that built according to smart growth strategies, the foreclosure crisis is now a much bigger problem for peripheral suburbs that sacrificed quality and access to jobs in exchange for more taxable properties.

As Chris Leinberger, fellow at Brookings and president of Smart Growth America’s LOCUS project, told the WSJ, the price decline on the “drivable fringe” was generally twice as bad during the crash, “and it was that part of the market that is the least regulated.” Walkable, compact neighborhoods essentially “held their value, thank you very much,” he said.

Communities that developed more along the lines of sprawl than smart growth are struggling to recover from the housing crisis. Recent census data show suburban growth is slowing for the first time in decades, and it’s not just the housing crisis that’s to blame. Neighborhoods without transportation choices and located far from employment centers are less attractive to home buyers and are suffering more in the downturn. Desperate developers in the far-flung exurbs are including free cars with home purchases in empty neighborhoods, but it’s getting harder to persuade potential homeowners to commute 60 miles each way to work. Consumers increasingly understand that buying a home with a long, car-dependent commute — especially when gas prices are hitting record highs — can lock a household into an ongoing expense that can blow up their budget.

Smart growth neighborhoods, by contrast, offer insurance against foreclosure and can reduce the combined cost of housing and transportation. Due to consistent demand for walkable neighborhoods with a mix of uses and good access to jobs and public transportation, homes in these neighborhoods are much easier to sell and tend to hold their value. Places that invest in smart growth principles not only survived the housing crisis better, they protect their residents against spiking fuel prices as well. That is good for the homeowners in these communities as well as their local economies, and that’s news we think the Wall Street Journal should be pretty excited about.

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