Mastering Density

September 24, 2008
4:00 p.m. – 5:30 p.m. EDT

Answers to Additional Questions

Transportation and Parking

Question 1:Would developers would be willing to supply less parking than the zoning code allows and still be confident they could sell units? In a dense urban environment, could developers still market a building that had one space per 2 units, 4 units, or even no parking?

Answer from Mark Hinshaw: This is an evolving subject. Financial partners often set the parking ratios, regardless of what a city says. But in every market where urban housing has been occurring, ratios have been dropping because residents are gradually realizing they don't need as many (or any) vehicles. What a city needs to do is simply get out of the way and allow this transformation to occur. The first step is reducing or even removing minimum requirements. A subsequent step would be to add in maximum ratios.

Answer from Jason Wittenberg: It has been relatively rare for developers to provide less than one space per dwelling unit in Minneapolis. Our zoning code requires one space per unit in most districts; 0.9 spaces per unit in some districts. We also allow a 10 percent reduction for multi-family development projects within 300 feet of a transit line with headways of 30 minutes or less. Many projects have provided exactly one space per unit, but developers do seem hesitant about marketing units without a parking space. Most large development projects here seem to provide between 1 and 1.5 spaces per unit. In some cases developers have told us that one can walk into the underground parking garages of their developments during weekday work hours and find that the garage is largely full. So it appears that while many residents are walking or taking transit to work, they still like to have a place to put their vehicles so they can use them when they need to or wish to use them.

Answer from Bill Anderson: If parking requirements are more than necessary, developers are "willing" to provide less, but usually cannot since they must comply with the code. In San Diego, however, we provide allowances to reduce parking requirements within transit overlay zones, mixed-use credits, and deed-restricted affordable housing. Also, some communities, such as downtown, have lower requirements through their Planned District Ordinances. We are currently evaluating additional reductions for affordable housing, SROs, senior housing, and within our transit overlays. Developers are also interested in flexibility; for example, tandem parking and mechanical systems, to meet the requirements. This gives them greater design options in tight urban spaces. San Diego has a Residential Tandem Parking Overlay that allows this flexibility, subject to design requirements. Finally, we have several parking districts that allow commercial uses to pool resources (parking meter revenue, assessments, in-lieu fees) for common parking structures so that each commercial use doesn't have to provide their full share of off-street parking (or any parking) on site.

Question 2: How do you sell the idea of fewer parking spaces to those businesses that have a minimum ratio as part of their business model?

Answer from Mark Hinshaw: Retain a consultant to study actual use by time of day and year. Such studies always show reduced need. Most retail businesses really want the high ratios only for the peak Thanksgiving to Christmas period. The study should also examine ways of managing parking demand during that period, such as valet parking, off-site parking for employees, etc.

Question 3:Is there a difference between fixed transit (i.e. subway, light rail, etc.) vs. non-fixed transit (bus routes) in promoting/accommodating density? Is either more conducive to fostering density, either from the developer or community's perspective?

Answer from Mark Hinshaw: Rail in whatever form is the best, since it is a permanent investment and routes can't be changed year to year. But bus transit with frequent headways (and safe and clean vehicles) can also support higher density and vice versa. Frequent bus service with10 to 15 minute headways requires 10 to 20 dwelling units per acre. In either case, transit service will need to be partially supported by area-wide revenue collection, like a general utility tax.

Answer from Jason Wittenberg: Developers have indicated that they are much more likely to invest in high density development projects near fixed rail because they are basically assured that, given the substantial public investment required for rail transit, the transit will not disappear any time soon.

Answer from Bill Anderson: I agree that fixed-rail tends to be more attractive than bus lines. We're in the process of planning a regional Bus Rapid Transit system, which, based on the experience in other cities, particularly outside the U.S., could also induce higher-density development.

Question 4:Under what conditions do car sharing programs become desirable from both the developers perspective and residents perspective?

Answer from Mark Hinshaw: The most effective car sharing programs do not involve individual developments, as there does need to be a critical mass to justify maintenance, insurance, and management. It is fairly hard to do that in an individual project. Far better is to get a company like Zipcar — who has done this in many cities — to come in and manage a fleet that is available on a wider basis. Sometimes this requires cities to change their standards, for example allowing spaces for shared vehicles in parking lots or on streets, removing tax barriers such as rental car taxes, or allowing reductions in required parking.

Question 5:Jason Wittenberg mentioned that the developer provided a shared vehicle for residents. Could you provide more information about the logistics of that shared vehicle?

Answer from Jason Wittenberg: The City of Minneapolis wasn't directly involved in the provision of the shared vehicle. Please contact the developer for more information (Klodt, Incorporated).

The Market

Question 6:David Dixon discussed that rents increased in mixed-use, dense communities, but does that correlate to buyers? We are still seeing demand for suburban neighborhoods.

Answer from David Dixon: My comment focused on the increased value that the market now attaches to lively, mixed-use, walkable, environments — which in almost all cases are able to offer these qualities because they are relatively more dense — stems from research being conducted by Chris Leinberger for Brookings. His research focuses on the Washington, DC metropolitan area, but he also indicates that the DC region tends to be a leading indicator in terms of real estate economics. In a nutshell, his findings indicate that for office rents, retail rents, and housing for-sale prices and rents, the market will pay a 30-40% premium for lively, mixed-use, walkable environments. In determining this premium, he has compared suburban single use to suburban mixed-use/walkable (e.g. Reston downtown) settings and urban single use to mixed-use/walkable settings. It is important to remember that these "premium areas" represent a relatively small part of the overall regional real estate market at this point in time and that a relatively modest shift in demand from suburban to mixed-use urban areas, for example, can have relatively little impact on suburban markets but very considerable impacts on mixed-use urban markets. For example, downtown Kansas City, where our office is working on a new mixed-use urban neighborhood, has historically represented approximately 10% of the Kansas City regional housing market. A shift of three or four percentage points — for example from 10% to 14% of the total market — would have relatively little impact on most of the region's suburban markets, but support development of the urban neighborhood in which we are working as well as many other developments across the downtown area. These kinds of shifts are occurring across America, which is one reason that many downtown and closer-in urban housing markets are holding up better during the current housing recession than further-out suburban markets.

Codes and Regulations

Question 7:Mark Hinshaw mentioned a building code change in Seattle. What is the code citation for this building code?

Answer from Mark Hinshaw: The code is accessible online at http://www.ecodes.biz/product.cfm?category_id=82, in Chapter 5 of "Seattle Building Code — 2006 Building."

First, Table 503 (page 96) changes the basic allowable height for a Type 5, R-1 occupancy to four stories rather than the 3 stories in the standard IBC. Seattle has had this amendment in place for almost 20 years now. With an additional story for sprinklers, you get five stories of Type 5 construction. The details are in 509.2.

Affordable Housing

Question 8: How do we ensure affordability and limit displacement of low and moderate units when we plan for increased density without inclusionary zoning? How do we assure residents that they will not be displaced?

Answer from Mark Hinshaw: I'm not sure you really can do this. The market is constantly changing in our capitalist system. However, you can soften the effect by encouraging non-profit housing providers, offering incentives to include below-market rate units, and passing bond issues to build below-market housing. Regulations by themselves won't do it.

Question 9:What kind of density is needed to support a 20% affordable housing set-aside?

Answer from David Dixon: There is no consistent formula that will provide a density level that will support any particular affordable housing set-aside. The ability to internally subsidize affordable housing is a function of each real estate market. That said, it is possible (often with the help of a real estate consultant) to determine at what density level a development can provide greater amounts of affordable housing. For example, once a development has absorbed its land cost (which in high value real estate markets can be $50,000 to $100,000 or more per market rate unit), a significant portion of that amount becomes available to fund affordable housing. For example, if a development's pro forma requires 100 units to absorb a $5 million land purchase and related site improvement cost, approving an additional 20 units could create as much as $1 million that would be available to subsidize affordable housing. It is essential to make clear that a density bonus must be used to fund affordable housing; otherwise the market will begin to assume that these bonuses will be granted for a variety of purposes and land sellers will factor the potential additional density into their land price.

Context and Public Acceptance

Question 10:For the two developments Jason Wittenberg discussed in Minneapolis, how did they compare to the surrounding context? What were the vacancy rates or the time on the market for sales?

Answer from Jason Wittenberg: While Minneapolis experienced a boom in condominium construction during the decade, both the West River Commons and Oaks Hiawatha Station development projects featured are primarily rental housing. I'm afraid I don't have the current vacancy rates for the two development projects, but my understanding is that both have been doing well. (The West River Commons development includes several for-sale townhome units.) Both projects represent a significant increase in residential density compared to their immediate surrounding context. My recollection is that the neighborhood association was supportive of both projects but that there was some opposition to the West River Commons project from nearby residents.

The West River Commons development is situated on a major mixed use corridor. While the corridor is primarily commercial, there is a high-density, 1960s-era apartment building directly across the street to the south. Outside the corridor, the character is primarily single-family homes and duplexes. The site is also situated adjacent to West River Parkway, with the Mississippi River being a major recreational amenity. Walking and biking trails are directly across the parkway and the river's edge is approximately 450 feet from the edge of the building. The residential rental vacancy rate at the end of 2004 was approximately 4.8% (compared to the metro-wide rate of approximately 7.3%). The retail spaces seem to be doing well.

Oaks Hiawatha Station is located in a light rail transit station area. It was quite clear that this project would not have happened if not for the arrival of a nearby passenger rail station. Currently this particular station area is predominantly low-density. The project is located between a variety of commercial uses to the south and west and a predominantly single-family district to the east. The residential rental vacancy rate at the end of 2006 was approximately 3.3% (compared to the metro-wide rate of approximately 4.7%). It seems like the retail spaces took some time to fill; they're now occupied by a tax office and fitness center. Since the time of completion of the Oaks Hiawatha Station project, the same developer has been working on a larger development project two blocks to the north, this one with 233 units on a 4.2 acre site.

Question 11: How can we encourage municipal officials and create public support for density in areas of older development (1920's streetcar suburbs)?

Answer from Mark Hinshaw: One way to create support is to identify types of people they might know such as their children, their parents, school teachers, fire and police people who might need different types of units than what is available.

General

Question 12: What indicators should planners look at to determine whether or not a location is density ready or that density can succeed there?

Answer from Mark Hinshaw: Key factors include the availability of public amenities including parks, greens, waterfront, and public facilities such as libraries and community centers. If a city hasn't nurtured the setting so these are available, the chances of implementing density are much lower.

Question 13:In any of the case studies presented, were public health benefits explicitly targeted or evaluated before, after or during the development of the projects?

Answer from David Dixon: In Atlanta, the Centers for Disease Control is conducting a public health evaluation of Atlantic Station — a large, higher density, mixed-use center being developed near downtown. For more information, I would suggest contacting Julie Ralston at the Atlanta Regional Commission. Her agency is not conducting the study, but I suspect she could put someone in touch with those who are involved. Her e-mail address is jralston@atlantaregional.com.

Answer from Jason Wittenberg: To my knowledge, the public health implications/benefits were not explicitly targeted or evaluated in the two Minneapolis case studies. The relationship between higher density development and public health in Minneapolis has been implied, for the most part. In other words, the importance of proximity to transit, pedestrian orientation, and neighborhood-serving commercial uses are typically discussed and noted, but we generally have not taken the step in staff reports, for example, of saying, "This development will contribute to ensuring that physical activity will be built in to the daily lives of residents."

Question 14:David Dixon indicated that 1000 to 2000 dwelling units within a 10-15 minute walk are needed to support one block of new Main Street. How many dwelling units per acre is this? How large is the block in terms of square feet of commercial or retail? Why was walking time the metric in lieu of aerial distance?

Answer from David Dixon: To respond in reverse order...

Walking time is the metric because those within a "short walk" of a Main Street or neighborhood commercial district are more likely to spend a higher percentage of their retail dollars in that district. It is also much easier to fit new or expanded retail space into a community with lower parking ratios (a retail district with a relatively large walk-to clientele can support parking ratios of three per thousand or less compared to five or more for auto-dependent districts).
These calculations assume supporting 30-50,000SF of retail, an amount sufficient to line two sides of a block of Main Street.
The required density is roughly 25 to 40 units per acre, a density that can be achieved, for example, with a mix of narrow-lot single family houses, row houses, and lofts. The number of housing units required is to a large extent a function of disposable income and the rents required to lease retail space. It should be noted that in neighborhoods where housing values do not support the costs of structured parking or placing parking one or one-half level below a multi-family building, it is difficult to achieve densities greater than a little over 30 units per acre.

Question 15:What is the ADT of Clifton Road by Emory University?

Answer from David Dixon: I believe it is roughly 50,000.

Question 16:David Dixon mentioned visual density. How is that defined and what are its elements?

Answer from David Dixon: "Visual density" refers to the visual impact of height and massing. For example, the City of Alexandria, Virginia, routinely requires developers to put parking below-grade because even if an above-grade parking structure is shielded from public view by placing the structure behind housing, the structure literally pumps up the massing on the site. At 1.5 parking spaces per unit, a parking structure can literally increase the visible massing by more than one-third. In my experience two design factors immediately convey a negative impression of density:

The most objectionable is horizontal massing that is visibly out of scale with its neighbors. For example, a building that forms a continuous slab rising even a few stories above the predominate height of nearby row houses raises far more objection than a building of the same square footage that offers a variation in height (in some cases achieved by using some two story duplexes at the building's top floors to vary the height without the need for an additional elevator and fire stair core.
Replacing the rhythm of multiple doorways found along a traditional row house or narrow lot single family block or along an urban Main Street with a single doorway and lobby. Placing multiple townhouse-type units at the base of a larger multifamily building (in some cases as single-loaded with townhouses, and doorways, facing both sides of the building)—or multiple retail entries for a mixed-use building along a Main Street — that repeat the pattern found in traditional urban neighborhoods conveys a more human sense of scale to a building that in other terms is considerably larger — and denser — than buildings on adjacent blocks.

Question 17:What are your thoughts on gap financing, say using tax increment financing (TIF) to make redevelopment feasible? Should we use TIF to cover gaps by funding private structured parking vs. use TIF only for extra public enhancements?

Answer from Bill Anderson: San Diego uses TIF to gap finance affordable housing and some catalytic market rate projects, as well as public facilities. Financing of catalytic market rate projects is usually focused on infrastructure and land write-downs. We do more of this in the early years of a redevelopment project area when market risks are highest to help reduce the risk for investors, demonstrate market demand with the pioneering development, and establish quality standards.

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