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Sustainable Communities

TM

Vol 1, No 2 • March/April 2011 • www.p4sc.org • $12

Rental Housing:

NMHC Predicts Rising Demand

IN THIS ISSUE

California’s “anti-sprawl” planning process gets underway.. . . . . . . . . . . . . . . . . p. 22 The battle over high-speed rail . . . . . . . . . . . p. 26 Regional Focus: North Carolina.. . . . . . . . . . . . p. 34 Weatherization races the clock. . . . . . . . . . . . . . . . . . p. 44


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Contents MARCH/APRIL 201 1

44

6

Departments

2 Letter from the Editor 4 Letters to the Editor 5 New Directions 6 Around the Nation

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37

• Florida • Illinois • Oregon • Georgia

8 Land Planning & Design

Features

10 Green Building & Design

Duany sees decline in strict green building standards

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Multifamily Making a Comeback:

26 Transportation &

Doug Bibby and the National MultiHousing Council see a boom in apartment development coming in response to rising consumer demand.

20 Finance: The Obama Administration’s plans to reform the housing finance system call for winding down Fannie Mae and Freddie Mac and cutting back FHA single-family programs. But FHA rental housing programs would be strengthened and expanded.

22 California: Regional planning organizations hit high gear in public discussion of land use and transportation planning under the state’s “anti-sprawl” legislation (S.B. 375).

12 Urban Planning & Design APA president sets new direction

Development:

Federal funding for high speed rail development sparks debate. Find out why three governors rejected the federal money and what advocates and critics are saying about the issue.

37 Cities See High Value

in “Complete Streets” Find out how cities are making their streets much more vibrant and active without spending a lot or hurting traffic flow.

44 Financing Energy Efficiency:

On the Cover: As president of the National Multi-Housing Council, Doug Bibby advocates in Washington for rental housing, making a strong case for the benefits to community sustainability of properties like the 2400 M Apartments in Washington, D.C., a project of Equity Residential. Photo by Dennis Whitehead

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Time is running out for spending $5 billion appropriated for the Weatherization Assistance Program. Will the money be spent before the March 2012 deadline? How much will go to improve the energy efficiency of multifamily housing? Find out with our in-depth report.

March/April 2011 • Sustainable Communities

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Sustainable Communities

Letter from the Editor

TM

Vol 1, No 2 • March/April 2011 • www.p4sc.org

America’s Choice

Sustainable Communities Magazine 6i-2

By Andre Shashaty

W

ith the presidential election of 2012 entering its early stages and budget battles raging in Washington, Americans must choose sides. Long-term thinking has never been popular in American government, least of all if it promises to hurt the profits of any entrenched interests. The Obama Administration challenged that paradigm. It won federal appropriations to fund programs and investments that will make our communities more sustainable over the long run. A key part of its economic stimulus package was a renewed investment in America’s passenger rail system and other intracity transit programs. Billions of dollars were appropriated for these programs, including the beginnings of a high-speed passenger rail network in California, New York, Illinois and other major markets. Now, with the economy recovering and the scent of political opportunity in the air, Republicans in the House are attacking on a broad front, targeting spending for grants for regional planning, energy conservation, and Community Development Block Grants, among other domestic programs. But the pivotal issue in the fast-escalating political warfare in Washington will be the fight over what kind of wheels to subsidize: steel or rubber. Republicans in Washington and new Republican governors in Florida, Ohio and Wisconsin are trying to choke off proposed funding for passenger rail, especially the high-speed variety. They have framed this in terms of deficit reduction. Hogwash. They are quite happy to spend billions on roads and bridges but would “zero out” trains and mass transit. They ignore the near impossibility of spending enough on roads to serve an increasing population without massive congestion, the wackiness of a gas tax frozen at 1993 levels and the sheer insanity of depending so heavily on foreign oil. (We take for granted that they don’t consider air pollution and greenhouse gas emissions to be a problem.) The coming 20 months will have reverberations on our country for decades to come. If Republicans take the Senate or White House, they will finish what the House is starting now. They will not just terminate Obama’s initial steps to reinvest for the long-term, they will wipe out any sign that they ever existed. We have to fight back, and we must fight especially hard on the threshold issue of transportation. We must follow the lead of people like Christine Kehoe, the California state senator who represents San Diego. Defying powerful political forces, Kehoe has introduced a bill (S.B. 468) that would require mass transit to be improved in coastal communities before the state could add lanes to nearby freeways. If we follow Kehoe’s lead, the Obama initiatives will survive and our oil-addicted country will be on a new path. If not, just imagine what the history books will say about the choices we made in this pivotal decade. Make your voice heard in the coming political battle. And if you are not already a member of the Partnership for Sustainable Communities, please join today and help us make America sustainable, one community at a time. Learn more at www.p4sc.org.

Editor and Publisher Andre Shashaty, andre@p4sc.org Office & Member Services Manager Carol Yee, carol@p4sc.org Art Director Kay Marshall, kay.marshall@earthlink.net Advertising & Conference Sales Manager Wendy Chaney, wendy@p4sc.org Assistant Editor Megan Truxillo, megan@p4sc.org Board of Directors Rev. Betty Pagett, Community Acceptance Strategist Todd Sears, Vice President of Finance, Herman & Kittle Properties Patrick Sheridan, Senior Vice President for Housing Development, Volunteers of America Dianne Spaulding, Executive Director, Non-Profit Housing Association of Northern California Leadership Advisory Board Richard Baron, Chairman and CEO, McCormack Baron Salazar Doug Bibby, President, National Multi Housing Council Henry Cisneros, Executive Chairman, CityView; former secretary, U.S. Dept of Housing and Urban Development F. Barton Harvey, Former chairman and CEO, Enterprise Community Partners William C. Kelly, Jr., President, Stewards of Affordable Housing for the Future (SAHF) Kerry Mazzoni, public policy consultant, former state legislator and former California Secretary of Education Nicolas P. Retsinas, Director, Joint Center for Housing Studies, Harvard University Caleb Roope, President/CEO, The Pacific Companies Mitchell Silver, PP, AICP Director Department of City Planning for Raleigh, N.C. Sustainable Communities Magazine is published by Partnership for Sustainable Communities (“PSC”) is a private nonprofit organization incorporated in California. It is not affiliated with the United States federal interagency “Partnership for Sustainable Communities,” which is a venture between HUD, DOT and EPA. PSC is not supported by government funding. It depends entirely on membership dues and charitable donations to cover its costs. To make a donation, go to www.p4sc.org and click on the “donate now” button at the top of your screen in the green bar on the left. To join our cause, click on “become a member” also in the green bar.

900 Fifth Ave, Suite 201, San Rafael, CA 94901 415 453 2100 ext 302 www.P4SC.org Printed on SFI Certified 10% Recylced Paper with vegetable and/or soy based inks. At Least 30% Certified Forest Content

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Sustainable Communities • MARCH/APRIL 2011


Housing Demand 66% of new households will rent, NMHC predicts As new lifestyles tilt balance toward sustainability

Located within a short train or ferry ride from lower Manhattan, The Pier in Jersey City, N.J., exemplifies the kinds of properties that Equity Residential develops: Close to transit and jobs and on infill site in existing urban areas.

W ▲ Community facilty at Northpark Apartments in Burlingame, Calif., a property of Equity Residential

By Andre Shashaty

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Sustainable Communities • MARCH/APRIL 2011

hen George W. Bush was president, homeownership rates reached a record high of 69 percent, and everyone from the White House to Congress on down to local officials sucked all the political advantage they could get from the growing ranks of young homeowners. Apartment operators wondered how it came to pass that a young family could get a mortgage even if they could not qualify for a lease. Single-family cul de sac subdivisions sprouted in outlying areas of every U.S. city with a pulse. What a difference a few million foreclosures makes. Today, the homeownership rate is dropping and rental housing is making a comeback that could last for decades. It’s about time, according to apartment owners and their association, the National Multi Housing Council (NMHC), which has been arguing for years for government policies that value rental housing. “The single-family housing meltdown confirms that homeownership alone is not sufficient to meet our housing and community needs,” said Doug Bibby, NMHC president.  “We need a more balanced housing policy— and that policy needs to begin with ensuring a consistent and abundant capital flow to rental housing.” The shift toward rental housing dovetails perfectly with the preference of many mayors and city planners to see growth channeled into transit corridors and infill locations, as opposed to development of singlefamily homes in subdivisions far from services or jobs. “Not only do apartments offer housing to a wide range of households,”

>>


Fannie Mae headquarters

END OF AN ERA:

Pulling the Plug on Homeownership’s Life Support By Andre Shashaty

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ongress created Fannie Mae and Freddie Mac to make sure there was enough liquidity in the banking industry to provide a steady supply of mortgage lending at reasonable rates and terms. Now, in the aftermath of the mortgage meltdown, with the two agencies guaranteeing 90% of all home loans, the Obama Administration wants the government to reduce its financial support for the mortgage market. To make a long story very short, the administration is engaging Congress in a political dance that will probably end with Fannie and Freddie closing their doors in several years, and the federal government limiting its role to that of a guarantor of pools of home mortgages, rather than its current role as a buyer and securitizer of individual loans. The impact of the changes could be profound. Most analysts agree that home loans with fixed interest rates and long terms will be harder to get and more expensive. That will mean a reduction in the number of households that can buy homes and an increase in the number who must rent. There is some prospect that the changes will steer residential development back toward rental homes at higher densities than the single-family subdivisions that sprouted up during the last wave of easy mortgage money. The biggest unanswered question is whether households denied the safety of long-term fixed rate loans will once again find a ready supply of short-term, adjustable rate loans – the exact same kind of financing that caused the nation’s foreclo-

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Sustainable Communities • MARCH/APRIL 2011

sure crisis in the first place. The Obama plan talks in general terms about preventing predatory lending and requiring more “transparency” in how private market players do business, but it falls far short of a detailed plan with a clear chance of controlling the mortgage market. The long and very uncertain process of revamping the federal government’s role in housing finance began in February, when the Obama Administration released its 32-page report to Congress on “Reforming America’s Housing Finance Market.” The Obama proposal is very general, but it sets a clear direction: Federal backing for home loans is going to be cut back, but federal support for financing apartments will continue and might even be increased. The Administration wants to wind down Fannie Mae and Freddie Mac and shrink the government’s current footprint in housing finance on “a responsible timeline,” which could be as long as ten years. The Republican leaders in Congress say they want to do many of the exact same things, but faster. They want to phase out Fannie and Freddie in four years.  Currently, the U.S. government guarantees more than nine out of every 10 new mortgages.  Both Obama and the Republicans say they want to bring the private sector back as the primary source of mortgage credit and make it bear the burden for losses.  What will be put in place after Fannie and Freddie are


Federal Funding For High Speed Rail Development Republicans take the offensive against high-speed rail—Governors’ rejection of grants triggers spirited debate

T

PHOTO: courtesy amtrak

he U.S. has lagged behind other developed nations on high-speed rail for years, and now it is falling behind developing nations as well. A new crop of Republican governors and the GOP leadership in the House of Representatives wants to keep it that way. Newly elected Republican governors in Florida, Ohio and Wisconsin have loudly rejected federal funding for highspeed rail that was included in the American Recovery and Reinvestment Act of 2009 (ARRA). The money earmarked for those states will be spent in regions that want the projects. The House Republicans now want to block Obama administration requests for $1 billion per year in additional funding for its ambitious rail development plan. If they succeed, the states that have accepted the ARRA funding could find it very hard to proceed with their plans. The Obama plan looked at the $8 billion provided in the ARRA as a down payment “to jump-start a potential world-class passenger rail system and sets the direction of transportation policy for the future.” “High-speed rail will modernize America’s valuable transportation network, while reinvigorating the manufacturing sector and putting people back to work in good-paying jobs,” said Transportation Secretary Ray LaHood. The administration sees high-speed rail as the key to providing transportation for a growing population without massive congestion on our roads, and with less pollution. Republicans and the Tea Party activists who drive Republican positions are in a budget cutting frenzy, at least when it comes to domestic programs supported by the Obama Administration. But the governors who have rejected rail funding are slightly more pragmatic, saying there are too many unknowns and too many risks in the projects pursued by their predecessors. According to the Columbus Dispatch, Ohio Governor John Kasich believes “there are too many unanswered questions about how many people would ride the train, how fast it would

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Sustainable Communities • MARCH/APRIL 2011

go and how much it would cost the state at a time when it is facing an $8 billion budget shortfall -- and that he has his own job-creation agenda to pursue.” Kasich told the feds he would rather use the federal funds approved for Ohio’s Cleveland to Columbus to Cincinnati rail line for freight rail or highway infrastructure. His request was rejected. In Florida, incoming Governor Rick Scott rejected federal funding for a line from Tampa to Orlando primarily because


Sustainable Housing & CD Conference Set for September 19-20 in San Francisco “New opportunities to build lasting value”

The San Francisco Conference on Sustainable Housing and Community Development brings together policymakers and practitioners to explore • New directions in urban and regional planning and what they mean for developers • Mixing uses to achieve sustainability, focusing on retail and housing (market-rate and affordable) • Implementation of new green building standards including CALGreen • Financing green building and retrofits and renewable energy for homes • New land use and zoning issues for affordable housing developers • Affordable housing weatherization and retrofits, including state and federal funding programs • New opportunities for commercial

and mixed-use developments on infill locations • Assessing the potential and risks of transit-oriented development, including the challenges of preserving housing affordability while increasing density • Strategies for coping with NIMBY and for winning entitlements • The Green Financing Update: A review of sources & methods of financing and equity syndication trends • Energy and water-efficient building techniques and certifications • Renewable energy generation • Winning zoning, design and parking concessions

The preliminary line up of speakers includes: • Ophelia Basgal, Regional Administrator, U.S. Dept. of Housing & Urban Development • Dana Bourland Vice President of Green Initiatives Enterprise Community Partners, Inc. • Cathy Creswell, acting director, CA Dept of Housing & Community Development • Gary Downs, Nixon Peabody • Hasan Ikhrata, Executive Director, Southern California Association of Governments • Tim Kemper, Regional Managing Principal, Reznick Group • David Reznick, principal and chairman, Reznick Group

Save the Date: September 19-20, 2011 And plan now to come to downtown San Francisco, CA For details, go to www.p4sc.org/sfconference Or call 415-453-2100 x 302. To register now, send an email to admin@p4sc.org and put “conference” in the subject line.  Or call 415-453-2100  ext 302.

is the theme of the first annual San Francisco Conference on Sustainable Housing and Community Development, which will take place September 19-20, 2011. “It’s been a challenging time for real estate developers and city officials. Money has been tight, and for affordable housing, resources have diminished dramatically, “ said Andre Shashaty, conference chairman. “But this is also a time of exciting changes in how we plan and develop our communities – a time when we must look to the future and forge new paths to healthier communities and a healthier environment.” The conference combines high-level policy discussions on new directions in policy and new strategies for developers with nuts and bolts sessions on getting deals done, including using new models of public-private cooperation. The big story in California is how to move from the bold environmental visions of A.B. 32 and S.B. 375 to a workable strategy for more compact development, including location of housing affordable to all income groups closer to job centers. Find out how planners, city officials and developers are working together to realize the three goals of • Environmental protection through reduction of private vehicle usage and green house gas emissions • Economic development, including jobs and more efficient use of government resources • Equity for all income and ethnic groups The conference is sponsored by the Partnership for Sustainable Communities, a nonprofit group dedicated to helping city planners and development officials work with private real estate interests to advance smart growth and sustainable development. Cosponsoring is Reznick Group, a top 20 national accounting, tax and business advisory firm. Well known for our depth of knowledge in real estate and tax credit services, we also serve a wide range of industries that include government, healthcare/long-term care, financial services, nonprofits, professional services, renewable energy and technology. Other sponsors include: • Low-Income Investment Fund • Local Government Commission • Nonprofit Housing Asssociation of Northern California

March/April 2011 • Sustainable Communities

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Focus on North Carolina Raleigh planners serve up higher-density solutions to challenges of growing population, limited land

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aleigh, N.C.–If you haven’t been to North Carolina lately, you might not recognize it. New data from the 2010 U.S. Census shows that North Carolina’s population swelled 18.5 percent over the last decade, making it the sixth fastest growing state. In contrast, the total population of the United States grew at only 9.7 percent during the same period. The state is home to 9.5 million people, putting it among the nation’s ten most populous states. To accommodate the growth, the state’s cities and towns are carefully planning land use, zoning and public facilities investing. Even more noteworthy is the fact that they are coordinating their efforts through the newly created statewide Sustainable Communities Task Force. Here in the state capital, a new comprehensive plan for the next 20 years was recently adopted with the hope of redirecting a growth pattern that had earned the city the nickname “sprawleigh.” The city now has over 400,000 people, and expects to add 120,000 households or 250,000 people by that year. “We realized sprawl was not sustainable,” said Mitchell Silver, planning director. “We realized we needed a new way to deal with growth so we had a serious conversation with our residents.” For one thing, projected increases in vehicle traffic would be difficult to accommodate, and most roads would need to be widened if the previous patterns of development continued. The city also had to look at demographics changes. The most fundamental trend is

PHOTO: JM Turer, Courtesy Wikimedia


Multifamily Weatherization Hits High Gear DOE targets apartments for 20% of production as spending deadline nears March 2012 deadline. On the other hand, government watchdogs and cautious housing and environmental groups are concerned that the money will be spent in a rush, accomplishing far too little in the effort to cut energy use from millions of aging single- and multifamily homes. The federal Weatherization Assistance Program (WAP) received an infusion of just under $5 billion as part of the 2009 American Recovery and Reinvestment Act (ARRA) stimulus program. The money has to be completely obligated by September 30, 2010 and spent by the end of March 2012. Success in spending the WAP money has been carefully watched, largely because it represents a one-time cash infusion to upgrade the nation’s housing stock. After the money is gone, the most the Department of Energy (DOE) can hope for is $320 million per year. That’s what the Obama Administration is seeking from Congress. The House of Representatives has voted to appropriate nothing for the program. The program began in 1976 for weatherizing singlefamily homes. Even though it has been allowable to do multifamily projects since 1985, that authority has not been widely used by local sub recipients. Until now. With pressure on to get the money out, more states are working to start or accelerate programs aimed at apartments occupied by low-income households. At press time, states had only spent about half the stimulus money, so they will have to hustle to avoid sending money back to the U.S. Treasury. DOE is saying it expects to spend 95 percent of the money by the deadline based on current rate of spending and production of weatherized units. It has an official goal of 591,000 units, but is hoping to hit 700,000. It expects

Green building gets all the media attention but cutting greenhouse gas emissions from structures depends also on retrofitting existing buildings. Is the $5 billion provided in the 2009 economic stimulus package making a dent in the problem of inefficient buildings? Sustainable Communities magazine takes an in-depth look at the successes and failures of the Weatherization Assistance Program (WAP), especially in regard to multifamily housing.

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ith just about a year left to spend around $2.5 billion in remaining economic stimulus funds, 1,000 state and local administrating agencies are pushing hard to meet goals for retrofitting homes and apartments to save energy. They know the stakes go way beyond just how much they can save low-income families on utility bills. In the current politically charged atmosphere, nothing would please critics of federal spending on economic stimulus more than failure to spend all the money by the

Weatherization technicians repair and seal around windows

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