There was, until about five years ago, a lovely old three-story brick building at the corner Wethersfield Avenue and Airport Road in the South End of Hartford, the former home of two popular Italian restaurants. Built at the turn of the last century, the austere, graceful structure was of the Italianate style found in the neighborhood. One might think it important to preserve a good building that commanded a key location, but in this case one would be wrong.
It was demolished and replaced by a suburban-style strip mall, the same kind of cheap, bland, parking-oriented development that is built everywhere else. This, or some close variation, has happened countless thousands of time across the country. Why? Why are solid buildings — or green fields — that contribute to a sense of place replaced by generic mediocrities that don't?
One reason is that conventional real estate lenders won't finance a building that is bold, innovative and built to last 100 years. The real estate lending market has calcified into a hidebound, risk-averse, rigid institution that lends money to build only certain kinds of real estate "products," nearly all of which promote sprawl:
"America's real estate industry will finance little that falls outside a very limited menu of largely obsolete commercial and residential building types."
This is from a new book "The Agile City: Building Well-being and Wealth in an Era of Climate Change," by James S. Russell, an architecture and urban design critic for Bloomberg News.
Russell's thesis is that climate change is real and happening, and has potentially dire consequences. With resources — such as clean water — running low and a few billion more people expected on earth in the coming decades, cities must become "agile," build more sustainably and less wastefully.
Buildings account for 40 percent of U.S. greenhouse gas emissions, so would be a good place to start. And indeed, there are ways to build that require vastly less energy, in communities that require much less driving (another leading cause of greenhouse gas emissions). But try to finance them?
Russell traces the journey of real estate analyst, developer and author Christopher Leinberger, who moved from promoting traditional sprawl development toward more dense and diverse "new urban" models, only to find that banks weren't taking his calls.
Lenders, it turned out, didn't like higher densities, even though they were pedestrian-friendly; couldn't value a mix of housing types, even though the idea was to make a community affordable to a wider range of people; and could not reconcile the mix of retail and residential uses that is essentially the point of such projects, to increase pedestrian activity and social vitality.
If lenders won't finance the kind of development the country dearly needs, we have a problem.
Russell traces the problem to the real estate scaldal in the 1980s that wiped out so many savings and loans. This led to a nationalized system of real estate lending that increasingly focused on short-term returns. So instead of building for the ages, developers inevitably cut back on construction and design costs, leaving the country with a lot of cinder-block buildings in the middle of vast parking lots.
Leinberger formed a company that rewards patient, long-term investors, and used it to build a major mixed-use development in Albuquerque, N.M., Russell reports.
Russell also offers a scathing critique of the residential real estate system, which still favors "new construction of single-family homes on the suburban edge." It's harder to fund and build the redevelopment of an urban neighborhood or a stagnant downtown, even though this ought to be what public policy should be encouraging. Congress has piled on the benefits of homeowners in recent years, who can now can deduct interest on home equity loans as well as interest and property tax expenses on vacation homes, not to mention sheltering capital gains on home sales and deducting mortgage interest, both up to very generous limits.
No other form of consumer debt offers such generous benefits, and these goodies "aided speculator fever." They pushed a dramatic increase in house size, even as the size of families was falling, and encouraged speculators. Throw in subprime mortgages and the plot sickens. Homeownership is fine, but … Russell reports that homeowner tax benefits cost the federal treasury $127 billion in 2008, and the number will hit $185 billion in 2013. England, Canada and Australia don't allow most of these deductions, but have about the same percentage of homeowners as the U.S. does.
The country needs a better balance, more mutlifamily and more rental housing. It needs affordable housing arodund transit (and often needs the transit). But the system is still telling the home builders to plow up those last remaining farms.
An overwheming number of climate scientists believe that climate change is happening, and most likely is being driven by human activity. Even if they are wrong, society has to start husbanding its resources and living more efficiently. Russell's important and blessedly readable book encourages different thinking about planning, collective action and citizenship.
He's right: We need agile cities and states, and a more agile country.
Reprinted with permission of the Hartford Courant.
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