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Sustainable Communities
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Vol 1, No 4 • July/August 2011 • www.p4sc.org • $12
Holding Housing Hostage
Washington Holds up Housing Market Revival
IN THIS ISSUE
Washington D.C. implements its regional plan........................ p. 16 LEDs light up the commercial sector...................................... p. 18 Design ideas for a pedestrian-friendly Seattle waterfront..... p. 20 The importance of public transit to the nation’s economic sustainability........................................................ .p. 29
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Contents July/August 201 1
20 3
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Departments
2 Letter from the Editor 3 Ideas & Trends Are jitneys the solution for
affordable transit?
4 Urban & Regional Planning Sustainable Planning Grants
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Features 10 Washington Hurts Housing: Federal financial regulatory agencies are starting to plow through thousands of public comments on a proposed rule to implement the Dodd–Frank Wall Street Reform and Consumer Protection Act. How they define mortgages that don’t require originators to retain risk could be a drag on the housing market for years to come. Meanwhile, Congress is considering legislation to cut back federal support for the secondary mortgage market, creating uncertainty that is already having a negative impact.
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Energy Efficiency: Innovations in LED lighting technology have cut the cost of using this incredibly energy efficient lighting source for room lighting. With the mandated phase out of energy wasting T12 florescent lighting, LED lighting manufacturers are hoping to become the frontrunners in the commercial lighting sector.
20 Seattle Waterfront Project: Seattle plans for a new and improved central waterfront made possible by the planned demolition of an elevated freeway that has cut off the waterfront from the rest of downtown for over five decades. Design team James Corner Field Operations reveals exciting plans for new public parks and spaces, enhanced public transit and pedestrian and bicycle pathways.
29 Reducing the Cost of Living: The government must invest in public transit and other things than can help reduce the cost of living, said Scott Bernstein, President of the Center for Neighborhood Technology (CNT). The Chicago-based nonprofit, that Bernstein co-founded, is focusing much of its effort this year on developing tools to help policymakers focus on “economic sustainability,” Bernstein said.
4 6 Around the Nation
• California • New York • Vancouver, Canada
7 Financing Energy Retrofits 8 Transportation & Development
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july/august 2011 • Sustainable Communities
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Sustainable Communities
Letter from the Editor
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Vol 1, No 4 • July/August 2011 • www.p4sc.org
Overkill Undermines Housing Recovery
Sustainable Communities Magazine 6i-2
By Andre Shashaty
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ashington, DC–Watching the white marble halls of government shimmer in the July heat, I would like to think our government can finally begin to reverse the housing market slump. But it appears policy decisions being made now might only delay a recovery and put homeownership out of reach for millions for a long time to come. In order to correct for the risky mortgage lending practices during the housing boom, federal policymakers are shoving the pendulum way too far back the other way. Proposed mortgage lending reforms would make it harder for many people to qualify for a loan, and require that the standard loan carry a requirement for a 20% down payment. The proposal would make homeownership “a lot whiter and a lot richer,” as one knowledgeable housing finance expert put it. In other words, minorities and moderate-income households could find it impossible to become owners. The other part of the problem is the bipartisan desire to curtail government backing for mortgage lending through the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac. The Obama Administration has proposed a range of policy options that would curtail the federal role over many years so as not to cause too much disruption in the home lending market. But Republicans are on the warpath against Fannie Mae and Freddie Mac, and want to put them out of business as soon as possible. While the Republican proposals are not likely to become law, they almost certainly will undermine the confidence and certainty that are crucial to restoring liquidity to the mortgage lending markets. It’s hard to defend Fannie and Freddie. They were guilty of recklessness and arrogance. They share the blame with banks for making profits privately while “socializing their losses” through federal bailouts. Most financing experts say there is a critical need for some form of federal support to facilitate securitized mortgage lending, preferably using new mechanisms that don’t carry as much risk as federal backing for Fannie and Freddie did. But the Republicans don’t acknowledge this reality. They not only want to curtail Fannie and Freddie, they want to block any attempt to create new entities to provide federal credit support. Neither the Obama Administration nor Republicans in Congress seem capable of calibrating their response to the mortgage crisis and targeting reforms to the actual reasons for the mortgage debacle. Where they should be using a scalpel, they seem intent on employing jackhammers. In their zeal to prevent another bubble, they seem to have forgotten that encouraging homeownership was and is a good thing – for families, for communities and for the economy. The government should find ways to curb the excesses of subprime lending and the peddling of extremely risky loan structures. It should not make across the board changes in down payments and income qualification standards, and should not curtail federal support for home mortgage lending in the near future. At the same time, the government should encourage responsible lending that helps hardworking families become owners and helps clear the “overhang” of properties that have gone through foreclosure or are facing possible foreclosure.
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.
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Sustainable Communities • July/august 2011
ideas & trends
Public Transportation: Are jitneys the solution for affordable transit?
july/august 2011 • Sustainable Communities
PHOTO: courtesy wikipedia
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mid all the talk about ways to reduce the reliance on private cars, one solution is conspicuous by its absence from the debate: jitneys. These generally privately owned vehicles are bigger than taxicabs but cheaper and more flexible than most bus systems. They are basically large shared taxis that operate in many cities but are not common in the U.S. The best information I found online comes from David Lawrence, a high school senior in Kansas. He operates a very informative web site at www.jitneysnow.com “I am passionate about public transit reform and US poverty policy, and I would be happy to hear any comments or ideas you have,” he writes on the site. Lawrence’s very intelligent site lays out the problem of job growth occurring in the suburbs while the people who need the jobs live in cities. “It isn’t cost effective for public transit to take on routes from the inner-city to the ▲ Atlantic City Jitney Association bus 29 operates in the shopping district. suburb, but it has been and would be cost effective for Jitneys to do so,” he writes. Lawrence goes on to cite a number of studies, inother transportation interests with more money and power? cluding “The Road from Welfare to Work: Informal TransporWrite to me at andre@p4sc.org. tation and the Urban Poor” by Nicole Garnett, an Assistant Professor of Law at Notre Dame. Inter-city bus service evolves Another web site talks about the fact that jitneys are thrivBusses may not be as exciting or as fast as high-speed rail, ing in Detroit, despite a city law banning them. It’s operated but they are coming back strong as an affordable inter-city by a magazine, The Freeman: Ideas on Liberty, edited by Sheltransportation option. don Richman. Check it out at http://www.thefreemanonline. Since launching in April 2006, megabus.com says it has org/columns/a-tribute-to-the-jitney/ served more than 7 million passengers throughout nearly Jitneys offer an obvious low-cost solution for serving 50 major cities in the Midwest and Northeast of the USA and people where population density does not make bus or subCanada, according to the company. way service feasible. Obviously, if they are privately operated, It operates from five hubs at New York, Philadelphia, they need no public subsidies, a good thing in a time of budWashington DC, Chicago and Toronto. get constraints. Plus, they create jobs for operators. Megabus.com bills itself as the first, low-cost, express bus Where are the major policy advocacy and research organiservice to offer city-to-city travel for as low as $1 via the Inzations on the wisdom of encouraging localities to allow jitternet. A sample fare from Washington, D.C., to Raleigh, N.C., neys with proper regulation? Why aren’t they on the political was $25 each way. or policy radar? The company describes its busses as offering comfort and The web sites I visited say jitneys are left in the shadows convenience far in excess of the old-line intercontinental bus because they have no wealthy or powerful municipal or corpo- companies. rate entities behind them. They also say that the taxi industry “Our luxury single and double deckers offer free wi-fi, atand the public transit industry both oppose them. seat plug ins, panoramic windows and a green alternative way What’s your take? Should jitneys be promoted as a public to travel. Meticulously maintained with professional drivers at transit option? Are they left off the transportation alternathe wheel, when you travel with us, you will be riding in comtives agenda for policy reasons or due to the opposition of fort and confidence,” the firm states. —Andre Shashaty ❧
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U R B AN & RE G IONA L P L ANNIN G
Sustainable planning grants survive budget cuts; Grantees shift focus to economic development
PHOTO BY Dennis Whitehead
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espite intense political pressure to cut the federal budget, both Congress and the Obama Administration support continued funding for planning sustainable communities. The application deadline will be announced soon for $67 million in fiscal 2011 funds for that purpose, and the administration is seeking another appropriation for fiscal year 2012, which starts Oct. 1. A total of $100 million was appropriated for planning grants this year, including the $67 million for the Sustainable Communities Regional Planning Grant Program. The balance of the funds is for challenge grants to help with specific implementation of local land use plans. The administration had requested $150 million for the current year, the same as was appropriated in fiscal 2010. The fact that the program was only reduced by 33% was widely considered good news considering the very aggressive effort of the new Republican majority in the House of Representatives to cut federal spending. “An awful lot of people made sure their representative understood how valuable this was to them, “ said Shelley
▲ Strong political support helped keep sustainable communities planning grants alive in 2011, said Shelley Poticha, Director, Office of Sustainable Housing and Communities, U.S. Dept. of Housing & Urban Development.
Poticha, Director, Office of Sustainable Housing and Communities, U.S. Dept. of Housing & Urban Development, the office that runs the program. It shows that there’s a tremendous amount of readiness at the local level for this kind of work, she added.
The Administration requested $150 million for fiscal year 2012, which begins Oct. 1. This shows a strong commitment to the program, since the overall HUD budget is shrinking, Poticha said. The budget includes just a couple of programs that “look to the future,” and the Sustainable Communities Grant Program is one of them, she added. The first round of grants for regional sustainable community planning went to 45 recipients last fall. For information, visit http://www.p4sc.org/articles/ all/cities-receive-millions-hud-grantspromote-sustainable-planning. Poticha is pleased that a number of grantees have brought in new partners, beyond those they originally identified in their grant proposals. “That’s going to really help ensure we have broadbased community voices at the table,” Poticha said. The expanded list of partners is part of an increased focus on economic concerns, Poticha said. A number of grantees are focusing on engaging with their local business community, not just real estate development but people who run businesses, she stated. A theme running through the early
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work of grantees is the effort to link together a sustainable development strategy and an economic development strategy, Poticha said. “At the time people were submitting proposals, they were focusing on more traditional aspects of land use and infrastructure planning. Now, there’s been a shift to see if these funds can be a catalyst for economic development,” Poticha said. Many local government officials see the planning process as crucial to the economic well-being of their regions, she said. For example, in Charlottesville Va., 300 people came to the county commissioners meeting when they were going to vote on a specific work plan for the planning process funded by HUD. There was a lot of disagreement on whether this should be a priority, Poticha said. The county commissioners voted to support the program
because they felt it was necessary for the survival of the region, she said. Poticha feels the planning grants have an inherent economic benefit by helping people look at all the various aspects of public policy and spending in a holistic way. She said the grantees and all those who applied understand that public and private funding is extraordinarily scarce, and they have to get multiple benefits out of every investment. “We can’t afford to have separate conversations any more, about what kind of businesses to attract, what kind of incentives to offer and separate conversations about housing, roads, transit, quality of life,” Poticha said. “They are all part of one discussion.” She said that a typical revelation of the planning process for city leaders is that the key to economic success and attracting businesses is regional qual-
ity of life, including access to nature. Poticha acknowledges that the grantees are hearing citizens complaining about change in traditional land use and growth patterns. She said HUD is committed to making sure public engagement is an integral part of the planning process, and is authentic and not an afterthought. However, she also made it clear that HUD believes grantees must work to help participants in public processes recognize the facts about growth, transportation, density, infrastructure, energy and the environment. “We are supporting a fact-based, outcome-oriented process. We are not telling anyone how they are going to live. But we are asking that communities look at the facts about what’s in store for the future. Part of what we are supporting is the ability of communities to grapple with facts,” she said. ❧
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ARO U ND THE NATION
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California
Proposed state law would reduce parking for TOD To incentivize development on infill locations, one state legislator wants to mandate reduced parking requirements for transit-oriented developments. A.B. 710, the Infill Development and Sustainable Community Act of 2011, introduced by Assemblymember Nancy Skinner (D-Berkeley), would state the intent of the Legislature to “reduce unnecessary government regulation and to reduce the cost of development by eliminating excessive minimum parking requirements for infill and transitoriented development.” According to Skinner’s website, AB 710 addresses “one of the most costly and burdensome roadblocks to sustainable urban development—excessive parking requirements. Urban development should require fewer parking structures due to the available transportation options and the proximity of housing to employment, schools, and commercial establishments. AB 710 decreases the parking requirements in these limited areas, thereby increasing project feasibility, increasing economic development, and lowering project costs.”
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readily available at attractive cost to borrowers. The corporation will also serve as an information center, providing know-how on carrying out retrofits and navigating existing financing and technical programs.
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The law would prohibit a city or county from requiring a minimum parking standard greater than one parking space per 1,000 square feet of nonresidential improvements and one parking space per unit of residential improvements for any new development project in transit intensive areas, as defined.
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New York
Energy efficient buildings As of this August 1, all owners of New York City buildings over 50,000 square feet must have their buildings’ energy use evaluated or face fines, under the new Local Law 84. This review of energy bills and building size will become the starting point for coordinated citywide investment in building upgrades. The newly formed New York City Energy Efficiency Corporation (NYCEEC), which was launched with $37 million in federal stimulus funds, will facilitate access to financing for building owners seeking to upgrade their properties. Susan Leeds is CEO of the corporation. NYCEEC will be able to provide a range of credit enhancements and innovative capital structures in order to make financing of energy efficiency
Sustainable Communities • July/august 2011
Vancouver, Canada
Making density palatable Vancouver’s scheme for increasing density in a way that is politically acceptable to property owners is producing new rental units that have rents ranging from $1000 to $2100 for oneand two-bedroom units, according to a study of the first 100 laneway houses built in Vancouver. The survey found that 67% of the laneway units are 1 bedroom units, 28% are 2 bedroom units, and 5% are studio units. The data was reported in the City of Vancouver’s Monitoring of Laneway Housing Implementation Report. Since July 2009, laneway housing has been permitted in several types of single-family neighborhoods. Laneway houses are detached dwellings located in the typical garage area of a single-family lot, facing the laneway and maintaining backyard open space. A minimum of one parking space must be provided on each lot with a laneway house, and many laneway houses include an enclosed garage. Both contemporary and traditional designs are permitted, in single-story and partial upper-story configurations. Homeowners may add a laneway house while retaining the existing main house, or a laneway house may be built alongside a new main house. A laneway house can be the third dwelling unit on a site, in addition to the main house and a secondary suite. The City of Vancouver’s Laneway Housing Website, http://vancouverlanewayhousing.com/, provides a wealth of information on everything laneway house related, including a really helpful “Laneway Housing How To Guide.” ❧
Financing Energy Retrofits
HUD, Fannie Mae, B of A launch new programs To improve existing structures’ energy efficiency
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wo new lending programs hold promise to open the doors for financing improvements to the energy efficiency of existing multifamily properties. Commercial lenders see potential to originate loans for that purpose under a program launched by Fannie Mae and HUD’s Federal Housing Administration (FHA) called Green Refinance Plus. A smaller initiative was announced this spring by Bank of America. The bank said it was launching a $55 million program to encourage energy efficiency improvements to older buildings. The new competitive program will provide low-cost loans and grants to Community Development Financial Institutions (CDFIs) specializing in financing energy efficiency improvements. The Green Refinance Plus program will allow owners of existing affordable rental housing properties to refinance into new mortgages that include funding for energy- and water-saving upgrades, along with other needed property renovations. FHA and Fannie Mae will share the risk on loans to refinance existing rent-restricted projects while permitting owners to borrow additional funds to make energy-saving improvements to their properties. Every 10-to-15 years, owners of existing multifamily affordable properties typically refinance their mortgages. In older apartment buildings, however, owners are hard-pressed to find additional financing to maintain or improve the physical condition of their properties, including making energy-efficient upgrades.
Program specifics Fannie Mae and HUD anticipate approximately $100 million in initial refinance volume with an average loan amount of $3.5 to $5 million. FHA will insure up to an additional fourto-five percent of the loan amount, or an average of approximately $150,000 to $250,000 per loan, to provide additional loan funds to pay for property improvements that save energy and water costs for owners and tenants, such as energy effi-
cient windows and Energy Star appliances. Property owners will be able to select the energy-efficiency upgrades that make the most economic sense for their properties. However, properties must go through a “Green Physical Needs Assessment” by an authorized provider to identify property improvements that both reduce energy and operating costs. Under its new program, Bank of America will select up to 12 CDFIs with the most effective solutions for funding energy efficiency improvements to existing buildings. “Residential and commercial buildings account for approximately 40 percent of all primary energy consumption in the United States. That’s why, if we really want to address climate change, we have to improve the energy efficiency of existing buildings, particularly older ones that tend to be the least efficient,” said Anne Finucane, Global Strategy and Marketing officer, Bank of America. “Through this program, Bank of America will fund the community lenders that have developed creative and effective approaches to financing energy efficient retrofits, with the aim of bringing these innovative financing structures to scale for greatest impact in reducing U.S. carbon emissions,” she added. The $55 million includes $50 million in low-cost, long-term loans to CDFIs with innovative energy efficient retrofit programs that finance the upfront investment costs for building owners to make energy efficient improvements. The energy cost savings realized over time will create cash flow to repay the loan. An additional $5 million in grants will also be awarded to help with staffing, training, reserves, and marketing needs associated with the implementation of the programs. Once CDFIs have made loans to property owners, Bank of America will work with them to collect pre- and post-retrofit data in order to measure program outcomes, including impacts on energy and water usage and associated financial savings. EnergyScoreCards, a subsidiary of Bright Power, Inc., will be the third party consultant for data collection and analysis. ❧
july/august 2011 • Sustainable Communities
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TRANS P ORTATION & DE V E L O P MENT
Final Element Completed in Massive TOD Project: Apartments already fully leased By Megan Truxillo
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ment planned around the Pleasant Hill Bay Area Rapid Transit (BART) Station. BART constructed the Pleasant Hill station in 1972, which connects Walnut Creek to San Francisco and the rest of the East Bay. After the station opened, far-sighted planners saw the potential to create a community that actually utilized the public transit system at its doorstep. Beginning in the early 80s every piece of this 125-acre parcel has been meticulously planned and designed to take full advantage of the Pleasant Hill Bart station.
Photo: courtesy Contra Costa County Redevelopment Agency
he Avalon at Walnut Creek, a residential mixed-use development in unincorporated Walnut Creek, California, is having early success since its grand opening in October. The residential portion of the development, 422 apartments with 20 percent set aside for individuals making less than the area median income, is already 99.5% occupied. The Avalon at Walnut Creek wasn’t built overnight. The Avalon is the final piece of the Contra Costa Centre Transit Village, a transit-oriented develop-
▲ The Contra Costa Centre Transit Village with the Avalon at center.
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Sustainable Communities • July/august 2011
The Contra Costa Centre hosts 7,000 residents, 6,000 employees and 6,000 Bart customers a day. There are 2,700 housing units (22% of which are affordable housing units), 423 hotel rooms and 2,440,487 sq. ft. of commercial space all within a 1/4 mile of the BART station. According to surveys, over 40 percent of Contra Costa Centre residents use BART or walk to work. This high use is largely a matter of self-selection, says Jim Kennedy Contra Costa Redevelopment Agency director, with
TOD PROJECT TIMELINE 1972 BART Pleasant Hill station opens. 1978 County adopts General Plan for higher density employment and residential uses in Pleasant Hill BART Station Area. 1983 Pleasant Hill BART Specific Plan adopted. 1984 County activates Redevelopment Agency (RDA) and adopts Redevelopment Plan Pleasant Hill BART area.
Photo: courtesy Avalon Bay
1985
Area property owners form the Contra Costa Centre Association (CCCA) to collectively operate a TDM (Transportation Demand Management) program.
1984 - 1995 Build out of area including condominiums, apartments, hotel, office, retail and infrastructure.
▲ Exterior of the Avalon at Contra Costa Centre Transit Village.
individuals choosing to live near BART so they can take advantage of the transit system. Maintaining affordable rental prices in the area, and offering a number of affordable housing units, ensures that those living closest to the station are the individuals that actually use it. The Avalon development sits on the site of the former BART station parking lot at Contra Costa Centre. In 2001, the Contra Costa Redevelopment Agency, in partnership with BART and then property-developer Millennium Partners held a six-day design charrette to build support and consensus on redevelopment of the parking lot into a mixed-use transitoriented development at the heart of Contra Costa Centre. What followed from the charrette was an innovative and complicated public/private partnership between the County, the County Redevelopment Agency (RDA), BART, Millennium Partners and Avalon Bay that took four years to negotiate. “Dealing with the animal of three public agencies negotiating for development on a transit agency site” was the most challenging aspect of the development process, said Kennedy. Kennedy
hopes that other cities and counties can learn from the process that took place at Contra Costa so they can reach the same result in less time. Avalon at Walnut Creek is built on land owned by BART. BART, the County and County RDA, collectively the “Pleasant Hill Bart Leasing Authority” lease the land from BART, and in turn sublease it to private developers Avalon Bay and Millennium Partners. The RDA financed public infrastructure and improvements including a replacement BART station parking lot, roads, drainage and parks. The County issued $135 million in tax-exempt housing bonds and the RDA contributed $2.5 million for housing construction. The County and BART share the revenue from the ground lease, 75% and 25% respectively, a sizeable revenue stream for both agencies. The Avalon at Walnut Creek includes a network of retail, parks, plazas, open space, heritage tree preservation, public art, and residential units. There are two remaining parcels Avalon will develop on the site, one commercial and one for sale residential. Filling the retail space in the development has been slow, but is finally gaining some traction. ❧
1997 BART issues Developer Request for Proposals for transit village area. Millennium Partners selected proposing a multiplex cinema anchored entertainment retail project. 1998 Political firestorm results in Millennium withdrawing entertainment project, and agreeing to a community planning program. 1999 Comprehensive amendments to Specific Plan completed; Initial community planning program for BART property concludes with unsustainable results. 2001 BART property charrette conducted to create residential/mixed-use project. 2001 - 2005 Negotiations between County, County Redevelopment Agency, BART, Millenium Partners and Avalon Bay for development of transit village. 2005 BART Transit Village development program approved by County with Millennium Partner and Avalon Bay Communities; Initial business documents for BART Transit Village are approved and executed; County renames the area “Contra Costa Centre.” 2006 Construction of BART replacement parking garage begins; initial financing for Transit Village is raised. 2008 BART Garage completed; Transit Village construction starts. 2010 BART Transit Village, now named Avalon Walnut Creek, opens for occupancy.
july/august 2011 • Sustainable Communities
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Policymakers fiddle while housing burns Regulations, legislation delay housing recovery, worse may be yet to come By Andre F. Shashaty
If you think mortgage lending is tight now, it could stay that way for many years to come, with serious consequences for the health of our communities and our economy. It appears that every politician in Washington has decided they are an expert on housing finance and wants to make their mark on policy. There are dozens if not hundreds of cooks in the kitchen, plus a few thousand lobbyists, and the pot is beginning to boil. On one side, there are banks, lenders and securities firms that want to fight new federal regulations and retain as much freedom and profitability as possible. On the other side are the politicians and bureaucrats who know the government let bankers and investment banks run wild earlier in the decade and are determined that it won’t happen again – even if it means throttling the mortgage lending industry and potentially killing the already critically ill housing market in the process. At the top of the list of unfolding developments is implementation of the Democrats’ package of financial industry “reforms.”
“Nothing significant has taken place to arrest the foreclosure crisis. It continues to worsen year over year.” —James H. Carr Chief Business Officer at the National Community Reinvestment Coalition
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Sustainable Communities • July/august 2011
As you read this, federal financial regulatory agencies are starting to plow through thousands of public comments on a proposed rule to implement the Dodd–Frank Wall Street Reform and Consumer Protection Act. It’s the biggest financial services “reform” law since 1999, when Republicans under the leadership of former Senate Banking Committee Chairman Phil Gramm destroyed most of the bank regulatory structure that had been in place since the 30s.
Placing homeownership out of reach For housing, the critical part of the bill requires mortgage lenders to retain some risk in the loans they originate, rather then selling off 100% of the loans and 100% of the risk, leaving themselves with no stake in making quality loans. They can get around that requirement for a very specific type of loan called a Qualified Residential Mortgage (QRM). The proposed rule generally would require sponsors of asset-backed securities to retain at least 5 percent of the credit
“The proposal that the new standard for home mortgages should be a 20% downpayment could “prohibit a significant segment of qualified borrowers from being able to achieve homeownership.” —David H. Stevens President and CEO of the Mortgage Bankers Association
to a white paper issued this spring by the Mortgage Bankers Association, National Association of Home Builders (NAHB), National Association of Realtors and several lending groups. The paper, “Proposed QRM Harms Creditworthy Borrowers And Housing Recovery,” can be downloaded from the NAHB web site at http://www.nahb.org/news_details. aspx?newsID=12469. “High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates. The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions,” the paper states. Low down payments were not an important cause of the foreclosure crisis, said Jim Carr, chief business officer at the
Existing Home Sales Seasonally-adjusted monthly home resales, in millions, in the United States Data Source: National Association of Realtors
7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
3.0 Feb 2010
risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. The proposed rule states that a QRM must have a down payment of at least 20%. That and other restrictions on who can get a QRM will make homeownership unavailable for a large number of potential buyers, according to a range of Washington advocacy groups “These rules will have a profound long-term effect on how we finance residential, commercial and multifamily real estate in this country. For example, the Qualified Residential Mortgage (QRM) will define who will and who will not get the most affordable mortgage products, potentially prohibiting a significant segment of qualified borrowers from being able to achieve homeownership,” said David H. Stevens, President and CEO of the Mortgage Bankers Association. The proposed definition of QRM will mean that “first time homebuyers will have to choose between higher rates today or a 9 to 14 year delay while they save up the necessary down payment. And 25 million current homeowners would be locked out of lower refinancing rates,” according
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New Home Construction Seasonally-adjusted annual rate in thousands Data Source: Census Bureau
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600
2011
2010
2009
2008
2007
2006
2005
2004
2003
400
National Community Reinvestment Coalition (NCRC). The biggest causes were poor underwriting and overuse of very risk loan types, including adjustable rate loans for which underwriting was based on low “teaser” rates, he said. The attack on low down payment loans represents “an approach to rebuilding the housing market that has no basis in common sense,“ Carr said.
on “Reforming America’s Housing Finance Market” in February. It calls for winding down Fannie Mae and Freddie Mac on “a responsible timeline,” which could be as long as ten years. The Republican leadership on banking and finance wants to do many of the exact same things, but faster. They want to phase out Fannie and Freddie in four years. Rep. Scott Garrett (R-NJ), Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said “Fannie and Freddie’s days are numbered. It’s not a matter of if, but when – the quicker we begin the process of dismantling them the better off we’ll be.” Garrett and his fellow party members have introduced a series of bills intended to hamper Fannie and Freddie in a variety of ways. Their goal is to make sure “they are no longer a drag on the American taxpayers, a threat to our economic security, and an impediment to private market growth and development.” In a closely related move, Rep. Ed Royce (R-CA) is the lead sponsor of legislation to abolish the Affordable Housing Trust
“Elimination of the authorized but unfunded Affordable Housing Trust Fund is necessary to move beyond the era of crony capitalism that kept Fannie Mae and Freddie Mac alive despite their reckless risk-taking.”
The future of Fannie and Freddie The QRM is just one of several time bombs Washington politicians and bureaucrats are playing with. The second biggest policy battle is the one just starting over the future of Fannie Mae and Freddie Mac, the two secondary mortgage market firms that were taken over by the U.S. Treasury Department at the height of the economic crisis. They now buy the vast majority of home mortgage loans as well as a substantial portion of loans originated for apartments. The Obama Administration released its report to Congress
FEDS CITE POOR-PERFORMING SERVICERS This year, The Obama Administration began to do more to hold mortgage servicers accountable for their performance in modifying loans to prevent foreclosure. It reports that four servicers have been identified as needing substantial improvement. They are: • • • •
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Bank of America, NA; J.P. Morgan Chase Bank, N.A.; Ocwen Loan Servicing, LLC; and Wells Fargo Bank, N.A.
Sustainable Communities • July/august 2011
—Ed Royce U.S. Congressman (R-CA)
Fund, which would be funded out of Fannie Mae and Freddie Mac’s profits (if they ever have any again). “Eliminating this fund is a necessary step in moving beyond the era of crony capitalism that kept the GSEs alive despite their reckless risk-taking,” said Royce.
Impact of policy Phasing out Fannie and Freddie will mean that long-term, fixed rate mortgages will be harder to obtain. Without federal support, lenders will make high-risk, short-term and adjustable rate loans as much as possible, the same kinds of loans that helped lead to overbuilding and foreclosures in the first place. 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
“A series of bills introduced by Republicans in the House of Representatives will tie the hands of Fannie and Freddie so that they are no longer a drag on the American taxpayers, a threat to our economic security, and an impediment to private market growth and development.” —Scott Garrett U.S. Congressman (R-NJ)
the primary source of mortgage credit and make it bear the burden for losses. The Obama report is vague as to timing, but it is expected to move this year to reduce the number of loans eligible for purchase by Fannie and Freddie, and to jack up the pricing for such loans. The plan also calls for increasing required
down payments so that any mortgage that Fannie Mae and Freddie Mac guarantee eventually has at least a 10 percent down payment. The other area of federal policy change is in the policies governing Federal Housing Adminstration programs for insuring home loans. The administration proposes to make changes to FHA single-family programs to ensure that, as Fannie Mae and Freddie Mac shrink, the private sector – not FHA – picks up their market share. The administration will do that by increasing mortgage insurance premiums and reducing the maximum mortgage amounts FHA can insure. The plan recognizes that there were flaws in how Fannie and Freddie were pushed by federal law to finance more and more loans to low and moderate-income borrowers. It also recognizes the wisdom of making FHA home loan programs more flexible so that FHA underwriters can better adjust loan terms to reflect the risk on individual loans.
Foreclosures continue Meanwhile, the foreclosure crisis continues unabated, according to NCRC. “We are exactly where we were three years
Loan modification program flops in California California homeowners are having trouble accessing sustainable home loan modifications, and borrowers of color are disproportionately facing specific problems that are making it more difficult for them to access modifications, according to a new report from the California Reinvestment Coalition (CRC). The report is titled “Race to the Bottom: An Analysis of HAMP Loan Modification Outcomes by Race and Ethnicity for California.” It analyzes recently released data from the Treasury Department about the HAMP program, in conjunction with CRC’s April/May 2011 survey of nonprofit housing counselors. The findings of the report suggest that modifications are still hard to come by, and that servicers have not corrected many of the problems that have led to investigations of foreclosure abuses. • Of 568,630 borrowers requesting loan modifications in California, 46% were denied immediately. A mere 23% of those who applied received a permanent modification. The other third of the applicants were either stuck in aged trial modifications or had their modifications cancelled. • Principal reductions are nearly impossible to receive. In Los Angeles and Fresno, for example, only 5% of
loan modifications included some degree of principal forgiveness. • An astonishing 94% of housing counselors reported that homeowners are losing their homes while negotiating for a loan modification with their servicer (the “dual track” problem). • Much of the data released from Treasury was incomplete or inadequate for true transparency. “The new data, along with the latest survey of housing counselors in California, confirm that things are tough for all families trying to avoid foreclosure, but it may be tougher for borrowers of color,” said Kevin Stein, CRC’s Associate Director and author of the report. “Federal and state regulators need to ensure that banks give all borrowers a fair chance to stay in their homes.” Racial disparities were evident in various dimensions of the HAMP data. • “Incomplete modification requests” was the most frequent reason for trial modification cancellation, but borrowers of color had the highest share of cancellations for this reason. In Fresno, Latinos and African Americans had trials cancelled for this reason 47% and 44% of the time, compared to 37% of white borrowers.
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ago. Nothing significant has taken place to arrest foreclosure crisis. It continues to worsen year over year,” said Carr. In 2010, there were 2.8 million foreclosures, and it would have been higher except for legal problems for mortgage servicers in asserting their right to foreclose, said Carr. There will probably be 2 million more foreclosures in 2011, he stated. Federal efforts to prevent foreclosures have fallen short of what’s needed, according to NCRC and other groups. The most important tool is the Home Affordable Modification Program (HAMP). Mortgage servicers were authorized to help borrowers that meet eligibility requirements to avoid foreclosure by modifying loans to a level that is affordable for borrowers and sustainable for the long-term. It also allowed for servicers to grant qualified unemployed borrowers a forbearance period during which a borrower’s monthly mortgage payment may be reduced or suspended. The federal web site on the program is at http://www.makinghomeaffordable.gov/ pages/default.aspx. NCRC has multiple criticisms of the program. In essence, it says the program relies on mortgage servicers to cooperate and offer loan modifications to their troubled
Galante likely for top housing spot Carol Galante has been named acting assistant secretary for housing at the U.S. Department of Housing and Urban Development (HUD). She will replace David Stevens, who resigned in the winter. Galante has not yet been nominated to take the post permanently. The assistant secretary oversees all federal mortgage insurance programs, including single family home loans and multifamily and mixed use loans. Galante has been the deputy assistant secretary for multifamily housing programs. Before that, she was president and CEO of BRIDGE Housing, a San Francisco based developer of affordable housing.
borrowers, but it doesn’t really hold them accountable if they don’t do it. It has also suffered from confusion because of a steady flow of program changes. “The problems of the HAMP program have been completely, unacceptably massive,” Carr said. He said only“a paltry number” of borrowers had obtained workouts under the pro-
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gram. Monthly data from the federal government talks about loan modifications that have been started, but is not clear about how many are completed. Recent changes to the program to improve enforcement and hold servicers accountable are too little too late, said Carr. In July, a new report by the California Reinvestment Coalition (CRC) slammed the home loan modification program for failing to help enough borrowers in California. Of 568,630 borrowers requesting loan modifications in California, only 23% of those who applied received a permanent modification. The report is titled “Race to the Bottom: An Analysis of HAMP Loan Modification Outcomes by Race and Ethnicity for California.” For details, see related story on page 13. NAHB, NCRC and others recognize that failure to address the foreclosure problem make a housing recovery impossible. Continuing housing market problems are in turn the kiss of death for economic recovery. “It’s absurd to think we will have a sustainable recovery when the problem that brought the economy to its knees is still churning away with no end in sight,” said Carr. “If we have a mortgage market so poorly managed, and we fail to deal with foreclosures, and fail to deal with the unsold inventory, and then we put in rules that will restrict buying in the future, we are not going to do anything with the market except make it sag and fall apart,” said Carr. Carr points out that the loans, capital infusions, and guarantees that collectively constitute the banking “bailouts” add up to more than $23 trillion, according to Neal Barofsky, the Department of the Treasury’s Special Inspector General for the Troubled Asset Relief Program (TARP). You would think the government would get some concessions from the banks it helped to ease the foreclosure crisis. But you’d be wrong. “The bailouts did not stem the foreclosure crisis and have not encouraged those firms that received the greatest public support to increase lending,” Carr wrote in an article in the Suffolk University Law Review. ❧
A European Neighborhood Rises in Downtown Sarasota
Photos: courtesy Citrus Square.
I
nspired by European design and Andres Duany’s New Urbanist philosophy, the developers of Citrus Square in downtown Sarasota, Florida created a beautiful small-scale mixed-use community in the heart of downtown. Boutique-style condominiums, 20 in all, are set above ground-level shops, restaurants, green space and an open plaza. The condos are upscale but of moderate size, ranging from 550 to 1,250 sq. ft. Prices range from $150,000 to $335,000. The developers hope to appeal to those seeking an urban way of life. “We’re selling a lifestyle, where owners can walk outside, buy a cup of coffee and get their newspaper and be part of urban life,” said George Birkhold, one of the developers behind the project. ▲ Diners enjoy the sidewalk terrace at The Savory Street Cafe & Bakery. Mark Pierce, the other primary Citrus Square developer, travelled to Europe for inspiration, signer, Chris Gallagher, of Jonathan Parks Architects wanted finding it in Italy and France, areas with similar weather and to create the “feel of a great urban building.” Storefronts are proximity to the water. There, he discovered that the typical set right up to the sidewalk and architectural details designed building proportion, small-scale, tall and narrow made for a with the pedestrian in mind. On a trip to Barcelona, Gallagher beautiful building that would fit nicely in Sarasota’s downphotographed hundreds of balconies, predominantly to mimic town. design for the underside of the balconies. The developers also spared no expense on the details. DeOne retail space is still available and only three of the condos remain unsold. ❧
Retail shops were hand selected to provide desired amenities for residents.
The colorful façade is reminiscent of Mediterranean Italy.
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Getting along in Washington: Local leaders work together to implement regional plan
T
he Region Forward Coalition (RFC), a new coalition of Washington D.C. area leaders hopes to take Region Forward, a comprehensive regional plan for the area, to the next level of implementation. The coalition includes local, state and federal government officials, business and non-profit leaders. Members include representatives of 21 local governments, including Deputy Mayor of D.C. Victor Hoskins, Prince George County Council Vice Chair Eric Olson and Arlington County Board Vice Chair Mary Hynes. The Greater Washington 2050 Coalition, headed by the Metropolitan Washington Council of Governments (COG) created the Region Forward plan as a means to address growth, transportation and the environment in a comprehensive way for the national capital region. Like many, if not all, regions across the country, the D.C. area suffers from years of land use planning that did not ade-
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quately take into account transportation and affordable housing. But, the plan is not limited to land use and transportation planning. Region forward is “our vision for making the region the best that it can be” said Paul DesJardins, director of community planning and services for COG. The region includes the 21 local jurisdictions served by COG, including the District of Columbia, and parts of Maryland and Virginia. Ambitious goals focus on land use, transportation, environment, climate and energy, education, public safety, housing, health and human services and the economy. Land use goals include “the enhancement of established neighborhoods of differing densities with compact, walkable infill development, rehabilitation and retention of historic sites and districts, and preservation of open space, farmland and environmental resource land in rural areas.”
For housing, the goal is to provide “a variety of housing types and choices in diverse, vibrant, safe, healthy, and sustainable neighborhoods, affordable to persons at all income levels.” Now, the Region Forward Coalition will work to implement the goals set forth in the Region Forward plan. The group will take a threepronged approach by dividing into teams: The Regional Analysis and Performance Baseline Team will define what baseline information must be gathered and will then identify a means of data collection and measurement of progress toward the plan’s goals every 3-4 years. The Complete Communities Team willlook closely at existing regional centers in terms ▲ At the Region Forward Coalition kickoff meeting, area leaders discuss of housing, employment, transportation and implementation of the regional plan. education, to identify what could make these analyzing the impact of different initiatives towards the places better and define what constitutes a goals and objectives. complete community. Over the next several weeks the groups will meet to create The Impact Team will develop specific projects, policies a specific agenda and timeline for implementation efforts. and financing mechanisms toward implementation of the For more information visit www.regionforward.org. ❧ goals and targets in the plan. The team is also charged with
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LED Lighting Poised to Takeover the Energy Efficient Lighting Sector By Lucia Olson
The Furniture Row, Oak Express store in Yuma Ariz. saves $4,200 a month in energy costs with its new LED lights.
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Sustainable Communities • July/august 2011
Photos courtesy CREE Inc.
T
he mandated phasing out of T12 fluorescent lighting by July 2012 has LED lighting manufacturers stepping up their game to compete in the energy efficient commercial lighting market. LEDs or light emitting diodes are tiny light bulbs that fit easily into an electrical circuit. Unlike ordinary incandescent bulbs they don’t have a filament that will burn out. Instead, they are illuminated solely by the movement of electrons in a semiconductor material. Although LEDs have been used for decades in, among other things, electronics and automobiles, the technology necessary for LEDs to be used in room lighting is relatively new. In 2006, the company ▲ The Hyatt Grand Regency in Orlando, Fla. switched to LED lighting, saving CREE Inc. of North Carolina introduced $131, 659 in the first year. the first lighting-class white power LED. LED lighting, as opposed to incandescent or fluorescent, Since then, LEDS have slowly been is longevity and energy efficiency. According to LED lightmaking their way into the residential and commercial lighting ing manufacturer CREE, its LED lights are designed to last sector. Until now, high upfront costs hindered widespread ap50,000 hours of use, that is 23 years at 6 hours of use a day. plication, but new technologies have reduced the cost to at or In contrast, fluorescents average 8,000 hours and incandesbelow comparable fluorescent lighting. cent bulbs only 2,000. In addition to their small size, the primary benefits of In a commercial setting CREE calculates that replacement of fluorescent lighting with its LED lights will deliver an immediate to two-year payback. In addition, its commercial LEDS will outlast comparable fluorescents by 8 years and save 10-15% in energy costs. To calculate the payback period and energy savings for your property visit www.creeledlighting.com. LEDS also do not pose the environmental hazards that mercury containing fluorescent bulbs do. In many states, fluorescents must be
Department of Energy Phases Out T12 Fluorescent Lamps In 2010, the Department of Energy passed regulations requiring T12 fluorescent lamps to be phased out by July 2012 in the name of energy efficiency. T12 fluorescents, used in commercial lighting, are an outdated technology. Originally designed in the 70s, they use 30 to 40 percent more energy than T8 or T5 fluorescents. Despite this, commercial buildings continue to use and replace them, unnecessarily wasting energy and money. By restricting production of T12s, the Department of Energy hopes to phase out this outdated lighting system.
recycled through specialized recycling facilities to prevent mercury contamination. Research and consulting firm Frost & Sullivan reports bright prospects for the LED lighting market, predicting double-digit growth in the next ten years. The firm predicts LED lighting will
have a majority share in the lighting market by 2020. Properties that have made the switch are reporting short payback times and high energy savings: The Hyatt Regency Grand Cypress, in Orlando, Florida switched to LED lighting as part of a large-scale remodel. CREE LED recessed downlights were installed in the hallways with a projected cumulative savings of approximately $131,659 in the first year and a return on investment of about nine months. Replacing existing halogen lighting in the lobby reduced energy consumption by 80 percent. The Furniture Row Companies, a home furnishings and bedding retailer recently installed 13,000 CREE LED spotlights of the 80,000 planned for all of its stores across the country. The first Furniture Row Shopping Center to install CREE LED lights saved $4,200 on monthly energy costs compared to the original lighting. In addition to reduced energy consumption for lighting, the LED lights generate much lower heat output thereby saving on air conditioning costs. Furniture Row also anticipates significant maintenance savings given the much longer service life of the LED lights, which are designed for a 50,000-hour lifetime in open applications. Prior to the LED lighting upgrade, store employees spent an estimated 15 hours per week replacing burned out halogen bulbs. ❧
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july/august 2011 • Sustainable Communities
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Photo courtesy WSDOT.
▲ Seattle today, with the Alaskan Way Viaduct travelling the length of the central waterfront.
Toward a Great Waterfront:
Recentering Seattle Around Elliot Bay By Megan Truxillo Are public hot tubs going to line downtown Seattle’s waterfront? We’ll see, but this is one of the “exotic” ideas put forward by James Corner Field Operations, the design team behind the redesign of Seattle’s waterfront. As principal designer James Corner told a packed crowd in Seattle, “why not?” The redesign of 26 blocks of downtown Seattle fronting Elliot Bay comes about from the needed demolition of the Alaskan Way Viaduct and supporting seawall. For more than five decades the Alaskan Way Viaduct, a raised portion of state route 99, has served as a major North-South artery through downtown Seattle, carrying 25% of traffic through the city. It offers spectacular views but also places an elevated freeway directly between the waterfront and the rest of downtown. Years of wear and tear, earthquakes and the salty marine air have taken their toll on the structure and supporting seawall, which engineers concluded is too costly to retrofit.
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The replacement of the viaduct with a bored tunnel running beneath downtown, and a surface street in its place, is the controversial preferred alternative advanced by the Washington Department of Transportation (WDOT). Governor Christine Gregoire and the Seattle City Council also support the bored tunnel alternative. The final environmental impact statement for the viaduct replacement will be released in July. Despite the uncertainty surrounding the replacement structure for the viaduct, the viaduct will be demolished, so the city is moving forward with plans for redesign of the central waterfront that the demolition will open up, said Marshall Foster, planning director for the city.
Taking Back the Waterfront Instead of merely replacing a failing freeway, Seattle is seizing the demolition of the viaduct as an opportunity to reconnect downtown Seattle with the waterfront.
Image by James Corner Field Operations, courtesy of the City of Seattle, 2011
As part of the viaduct replacement program, the state is funding a surface street along the waterfront and the City of Seattle is making plans for over nine acres of new public spaces as well as improved pedestrian, bicycle and public transit access to the waterfront.
The Designers Out of 30 design firms vying for the project, Seattle chose James Corner Field Operations as the principal design team. Founded by principal James Corner and headquartered in New York, the firm is most famous for turning the High Line, an abandoned elevated railway in New York City, into a beautiful public park and space. Seattle chose James Corner Field Operations in part because of its reputation for engaging the public in the planning process. To date it has lived up to its reputation. Corner kicked off the design process with a public event in February with over 1,000 Seattleites attending to voice their opinion on a new Seattle waterfront. At it, through creative interactive installations and surveys, the crowd was asked what their dreams and aspirations were for Seattle’s waterfront and also what they would be most disappointed to see come of the area. At the follow up presentation on May 19th, Corner present-
Courtesy of James Corner Field Operations
▲ Seattle connects to a new green Waterfront, looking East from the Bay.
▲ James Corner, Principal of James Corner Field Operations
ed the survey results: foremost people wanted public spaces and to be able to touch the water. They didn’t want private unauthentic development and view blocking structures. The team took these dreams and came up with some preliminary design ideas that could reshape Seattle’s waterfront into a spectacular area of the city. Corner and Seattle Planning Director Marshall Foster are quick to point out that the current designs are just preliminary. The project timeline is closely linked to the demolition and replacement of the viaduct. A conceptual plan and framework design are slated for completion by the end of 2012, with a final design by 2016 when the central waterfront portion of the viaduct will be demolished and construction will commence on the waterfront project.
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The Initial Design: 8 Districts and 29 streets The redesign of Seattle’s waterfront focuses on the area at three different scales: city, urban and waterfront. City Scale: “Recentering Seattle around the bay” Downtown Seattle is already a spectacular place, with beautiful beaches, public parks and attractions, but for the most part they are not well connected by foot, transit or road. At the city scale, the dream is to connect ▲ Overlook Fold, connecting Victor Steinbrueck Park and Pike Place Market to the new and existing attractions and public the Aquarium, Pier 62/63 and the Waterfront; view looking East. spaces around Elliot Bay by bike, transit and road. Corner uses the idea of a ring, with Elliot The Waterfront Scale: “Tidelines and folds” Bay as the center. From a design standpoint there are two main challenges to The waterfront is also to be a model and catalyst for susthe project: the tide and the hills. tainability. The team will focus on habitat restoration, water quality issues in the bay, alternative transportation infrastrucThe Tide ture and utilizing design elements to generate energy and From high tide to low tide there can be a ten foot differfilter water. ence in the height of Elliot Bay’s shoreline. To allow access to the water at both high and low tide, the team is proposing, inUrban Scale: “Connecting the city to the waterfront” stead of a vertical wall, creating sloped, terraced and stepped At the urban scale, the focus is on access to the waterinterfaces between water and land, creating an intertidal zone front by car, foot, bike and public transit from the adjacent at the waterfront. eight distinct districts of downtown. From an environmental standpoint, a terraced seawall Seattle’s waterfront is not a pedestrian friendly waterfront would have an additional benefit besides offering residents at the moment. It is difficult to get to, poorly serviced by pubaccess to the waterfront: it would act as a stormwater manlic transit, there is limited parking and steps are a challenge agement system. The terraces would be engineered to collect for strollers and the disabled. and filter stormwater before it enters the bay. The intertidal Planning is focused on enhancing and adding to public zone would also offer a superior habitat for salmon fry and transit, bike and pedestrian paths and also parking. Although other marine life. the strategy is multi-modal, Corner promises the central waterfront will be an area “where the pedestrian is prioritized above all else.” Highlights of the initial design include: • A streetcar running down 1st Avenue. • Sustainable transit along the waterfront, including nimble small-scale busses. • “Complete” surface streets with pedestrian signalized intersections at every crossing. • Pedestrian-friendly walkways that tie to existing and future parking and public transit. The Tideline • A continuous bicycle path along the terraces interlace with waterfront, being able to support runthe public realm, becoming viewing terraces and platforms. ners, joggers and bikes.
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Sustainable Communities • July/august 2011
Images by James Corner Field Operations, courtesy of the City of Seattle, 2011
▲ Colman Dock Gallery, looking North.
“The Folds” The “folds” are areas where the team will be creating major public spaces and dealing with significant topographical and structural challenges. There are four folds, they are: the Pike Place Market, Pier 48, Colman Dock and the Belltown Overlook. The Market The biggest of the folds is the Pike Place Market. The focus is to connect Seattle’s famous Pike Place Market to the waterfront adjacent to it, which holds commercial piers and the Seattle Aquarium. These two main public areas are adjacent to each other, but it takes a detective to figure out how to actually walk from one to the other and then a good pair of lungs to do so because 84 vertical feet separate them. To remedy this, the team proposes creating a park starting at the already existing Victor-Steinbrueck park that slopes all the way from the market down to the waterfront, allowing pedestrians to flow easily from one to the other. At the waterfront, the fold would be elevated providing commercial and parking space underneath. And, to make it worth the walk down to the piers, Corner proposes placing thermal hot tubs at the end of Pier 62/63. Pier 48 Purchased from the city in 2008, Pier 48 is now owned by the Washington Department of Transportation. Until 1999, the Pier housed a ferry terminal. In 2008, WDOT tore down the warehouse on the pier to use the dock as a staging ground for viaduct construction, after which it will become a new public park and space. The team proposes turning Pier 48 into a park oriented around festivals and large gatherings. The initial design
includes creating a large beach, a new promenade and building up the land so that commercial space is created underneath to house cafes and shops. Colman Dock Colman Dock houses the Washington State Ferry Terminal. Ferries and cruise ships come and go from Colman Dock daily, bringing a large number of people to the city through this area. The team wants to make Colman dock a celebrated and civic area. To do so, the preliminary design adds a new roof on the dock that acts as a public rooftop sun lawn. In addition, a covered gallery is proposed in front of the dock that could house markets, performers and other civic life. Belltown Overlook Connecting Belltown, a vibrant neighborhood in downtown, to the waterfront poses a topographical challenge because of a 100 foot drop from the height of Belltown to the waterfront. There are already significant improvements taking place in this area to create pedestrian and bike friendly streets and better connect the neighborhood to the water. In Belltown, the team proposes taking advantage of the peak of the hill, by
▲ Public Thermal Pools at Pier 62/63, looking West.
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creating an elevated public park, offering expansive views of Elliot Bay and housing neighborhood cafes underneath.
The Million-Dollar Question How is Seattle planning to fund this expansive project? The State will fund the demolition of the existing viaduct and the new Alaskan Way surface street. Estimates for that portion of the project are $290 million. The design of both the seawall and Waterfront Seattle projects is currently funded through 2012. A cost estimate for the public spaces will be developed as part of completing the Concept Design in 2012. At that point, financing for that project portion will be identified. Funding options being considered include: • Creation of a local improvement district • Federal, state and city support • Agency partnerships (i.e. Port, Ferries, King County/ Metro, etc.) • Philanthropy For a wealth of information and to submit your comments on the Seattle waterfront project visit waterfrontseattle.org. ❧
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Sustainable Communities • July/august 2011
What makes a great waterfront? As part of its public process, Seattle conducted a survey to determine what Seattle residents most wanted and didn’t want for their waterfront. What people would love to see most on the waterfront: • Opportunities for views. • Opportunities to touch the water. • Parks and open spaces. What people would be most disappointed to see on the waterfront: • View blocking structures and large-scale private commercial development. • Oversized roads and parking, lots and too much hardscape. • Tourist-oriented uses, including chain restaurants and shops that do not feel authentic to Seattle.
Poor Public Transit Hurts Seniors Study predicts 15.5 million seniors will have poor access to public transit
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tlanta, Riverside, Calif., Houston, and Detroit top the list of metro areas with over 3 million people for the worst transit access for seniors, according to a new report by public transit activists Transportation for America. The Center for Neighborhood Technology conducted the transit access study. “Aging in Place, Stuck Without Options” ranks metro areas by the percentage of seniors, age 65 and older, with poor access to public transportation, now and in the future. According to the report, by 2015, 90 percent of seniors in metro Atlanta will live in neighborhoods with poor access to transit. This means, those individuals have access to less than 1.9 bus, rail or ferry routes within walking distance from their homes. The percentage is 69 in Riverside and 68 in Houston and Detroit. Kansas City, Oklahoma City and Fort Worth, Texas ranked poorest for metro areas of 1-3 million. “The baby boom generation grew up and reared their own children in communities that, for the first time in human history, were built on the assumption that everyone would be able to drive an automobile,” said John Robert Smith, president and CEO of Reconnecting America and co-chair of Transportation for America. The result: four out of five seniors age 65 and older live in suburban or rural communities that are largely car-dependent. Absent relocating, which studies suggest fewer and ▲ A new study shows negative impact of poor public transit on fewer seniors choose to do, once these individuals stop seniors driving they face serious mobility issues. “The vast majority of people age 50-plus want to without considering the needs of an aging population. But stay in their homes for as long as possible, according to many of the steps we could take to fix that – improving our research,” said AARP Executive Vice President Nancy public transportation service, retrofitting our streets to be LeaMond. “When they do move, they most often want to safer for walking – will improve quality of life for the entire stay in their communities.” community.” Absent access to affordable travel options, seniors who Cities that fared better in the study include: no longer drive suffer a reduced quality of life. A 2004 • Over 3 Million population: Los Angeles/Long Beach –17 study found that seniors age 65 and older who no longer percent of seniors have poor access drive make 15 percent fewer trips to the doctor, 59 percent • 1-3 Million: San Francisco – 12 percent fewer trips to shop or eat out, and 65 percent fewer trips • 250,000-1 Million: Jersey City, N.J. – 3 percent to visit friends and family, than drivers of the same age. • Less than 250,000: Yolo, Calif. and Laredo, Texas – 17 “Communities like Atlanta have an enormous challenge percent before us, but it’s also an opportunity,” said Cathie Berger, For the full report and to see how your community division chief of the Area Agency on Aging in Atlanta. “It’s ranks visit, http://t4america.org/resources/seniorsmobilitrue that many of our suburban neighborhoods were built tycrisis2011/ ❧ july/august 2011 • Sustainable Communities
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CNT supports ‘Economic Sustainabilty’ with Tools to show how transit cuts cost of living
Public-private partnership Bernstein is calling for public investment that accelerates our ability to reduce the cost of living. In ▲ Regional Transportation District’s light rail system in Denver, Colo. the transportation area, he said advocates must look high-speed rail projects is good but that funding is also needbeyond greenhouse gas emission reduction as a solitary ed for regional mass transit systems. goal. They must also look at economics. For example, he said The model Bernstein puts forth of this kind of partnership car sharing is good to reduce emissions, but we have to “bite is one that is being championed by leaders in Los Angeles the bullet and make some investments in public transit” to get County. Voters there approved a sales tax increase to pay for more economic benefit. transit expansion. Los Angeles Mayor Antonio Villaraigosa He is also calling for risk sharing between the federal and other government leaders have called on the federal govgovernment and localities along the same lines as the parternment to expedite the 30-year development cycle by maknerships that allowed us to build the transcontinental railroad ing loans to be repaid from annual tax revenue. The advocates and interstate highway system. He said federal funding of
Photo: courtesy wikimedia
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partnership between the federal government and local jurisdictions willing to vote for taxes to finance transit could be the “guts of a national urban policy,” according to Scott Bernstein, President of the Center for Neighborhood Technology (CNT). The Chicago-based nonprofit, that Bernstein cofounded, is focusing much of its effort this year on developing tools to help policymakers focus on “economic sustainability,” Bernstein said. “Efforts at job creation are not enough. Our ability to reduce our cost of living might be much faster than increasing incomes as a route to improving the economic outlook,” he said.
What is CNT? Founded in 1978, the Center for Neighborhood Technology (CNT) has been a leader in promoting more livable and sustainable urban communities. It calls itself a “creative think-and-do-tank” that researches, invents, and tests urban strategies that use resources more efficiently and more equitably. The Chicago-based organization says it is engaged in three primary activities: • Researching urban problems to build knowledge through tools and activities that change how residents, policymakers, and market actors respond to issues such as efficient use of resources, strategies for reducing pollution, or ways to improve public transportation. These studies are readily available for use by residents, policymakers, students, and other researchers.
• Building coalitions to advocate for public policies that can help address urban sustainability issues.
• Designing, developing, and operating economic development demonstration projects to address urban sustainability in innovative ways. CNT received a lot of attention for providing a research tool that allows people to look at the combined cost of housing and transportation for regions across the U.S. The Housing + Transportation (H+T®) Affordability Index was developed by CNT and its collaborative partner, the Center for Transit Oriented Development (CTOD), as a project of the Brookings Institution’s Urban Markets Initiative. For information, visit http://htaindex.cnt.org/ about.php
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called this the 30/10 program, to reflect the goal for doing 30 years worth of development in ten years. It has been renamed America Fast Forward (http://americafastforward.org/), and is being promoted in Washington, DC, as a national program. The web site for America Fast Forward says that enactment of such a program of federal loans for locally-supported transit would “create 920,000 jobs per year building our national infrastructure without contributing to the national debt.” In essence, the proposed legislation would allow communities to issue bonds supported by the federal government for transit projects, leveraging locally-based funding streams that will be used to repay the bonds.
Becoming a one car household CNT is working to develop tools to help show the economic benefits of transit investments, as well as other aspects of sustainability, including greenhouse gas reductions. Currently, the federal government looks at the benefit of transit in terms of travel time reduction, which translates into increased productivity. Bernstein says that’s not a helpful analysis, since travel time is not that significant. He advocated changing development patterns so housing is closer to jobs as well as putting jobs closer to where people
live. “We need to stop subsidizing the movement of jobs away from population centers and existing communities,” he said. Most cities assume two cars per household in their land use and transportation planning. CNT is working to show that land use planning and household wealth would both improve if one car per household became the norm. Having one car instead of two would mean a 10 to 20% increase in disposable income for an average newly-minted household, he said. Public transit investment benefits more people and creates longer lasting assets than personal transportation spending. Focusing on the economy is a high priority for obvious reasons, Bernstein said. But, he added, it’s also a good way to overcome opposition to higher density development. “The key to building public and political support for increased density and mass transit is to start with the idea of an economy that works for everyone. It’s necessary to talk about how changes in the way communities are planned can reduce our cost of living, help create jobs and help contribute to a more stable tax base.” “Statistically, we may not be in a recession, I think we have halted the slide, but we are not stuck at a very good rung of the ladder,” he said in regard to the economic outlook. ❧
Defend Sustainablity: Join The Partnership for Sustainable Communities With budget battles raging in Washington, D.C. and many state capitols, the community sustainability movement faces severe setbacks. If you care about making communities sustainable, now’s the time to act. Take a moment now to become a member of Partnership for Sustainable Communities. Go to www.p4sc.org and click on “become a member” in the green bar at top, or call 415-453-2100 x 302. You pay just $99 for an entire year. You will be supporting a good cause, and you will receive these practical tools you can use immediately to advance your organization’s goals:
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Sustainable Communities • July/august 2011
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Commercial real estate developers embrace efficiency, attract top-tier tenants
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ronmentally friendly. These can require an investment, but ofome of the nation’s most successful commercial real esten many of them have very short pay-backs that can either be tate developers are seeing long-term benefits from makpassed through as operating expenses because they ultimately ing their buildings green and sustainable. reduce tenants’ operating expenses, and save significant rental After more than a decade of experience with LEED® and costs or can be financed through building ownership. Other retENERGY STAR®, Hines is one of the world›s leading developrofits can take advantage of incentives from utilities and state ers and managers of, and investors in, susand federal programs. tainable real estate. Hines is a privately owned real estate What are the ways that green buildfirm with a presence in more than 100 cities. ing benefits your firm and clients who own The Hines portfolio of projects underway, buildings financially, i.e. higher rents? Or is completed, acquired and managed for third it more about the demands of tenants for parties consists of more than 1,100 propergreen office space? ties including skyscrapers, corporate headquarters, mixed-use centers, industrial parks, There is little question that tenants medical facilities, and master-planned resort and tenant-brokers understand that a susand residential communities. tainably managed building is generally more In an exclusive Q & A, Hines’ Global Sustaincost efficient as well. Additionally, as tenants ability Officer, Gary Holtzer, tells us why Hines incorporate sustainable practices into their embraces green building, what it costs to go own business plans they want their leased green and what its plans are for continuing to ▲ Gary Holtzer, Hines’ Global premises to support that business plan. be a leader in green building into the future. Sustainability Officer Appraisers, lenders and bankers increasingly see sustainable management as a How does Hines measure return on marker or indicator of a well-managed asset, and will underinvestment (ROI) on the added capital cost of being green? write quicker lease-up time and higher rents. Sustainable practices are increasingly necessary to be considered Class A. This question assumes that there is added capital cost for being green, which is not always the case. There are What does it typically add in cost to go LEED gold a great many steps that owners, managers and tenants can or platinum? As a percentage of construction costs? take that collectively make a huge impact. Simple behavioral changes cost little to nothing to implement. Through our Hines Green Office (HinesGO) program, we have introduced tenants to actions they can take in their own spaces to behave more sustainably. We are thrilled with the number of tenants who wanted to participate in HinesGO and who wanted to implement sustainable practices in their leased space – they just needed the tools. Over 850 of our tenants have already joined the program and have been certified as HinesGO. Further, it is critical to understand exactly how our buildings operate, to retro-commission where necessary and to use the energy management tools already available. With some training and encouragement, the building operating engineers and managers become passionate about sustainability, and figure out very cost-efficient ways to pull energy-waste out of the system. If the organization values it, and recognizes and rewards sustainable practices, generally the staff delivers in this area. Once the so-called low hanging fruit is harvested, there are further steps that can be taken to make buildings more envi-
Minimizing costs to achieve LEED certification for new construction is all about integration and early design and construction decisions. We constantly analyze the market as well as what is important to our tenants in relation to sustainable practices. We have found that if the LEED requirements are designed into the earliest design decisions, and embraced by everyone in the process – architects, engineers, construction managers, achieving LEED Certification up to the LEED Silver or Gold level costs less than 1-2% of the construction budget of a typical high-rise office tower. What R&D does Hines do on new technology and materials? What’s new and exciting on the horizon? We work very closely with major manufacturers and developers of new construction materials. We are currently —continued on page 34
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New Directions in the Land of Sprawl:
Finding good sustainable planning examples In the far-flung cities of Southern California
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f you think Los Angeles, Orange County and the Inland Empire are not the places to look for good examples of more sustainable land uses and comprehensive climate change plans, think again. Excellent examples of proactive local planning are popping up all over. For a taste of what’s going on, consider the summaries reprinted here describing selected winners of The Southern California Association of Governments’ Compass Blueprint Recognition Awards. The awards recognize local jurisdictions in their efforts to promote the principles of the Compass Blueprint Program, and provide them a region-wide showcase of the innovative plans they have undertaken. For more details, including videos describing the winning projects, visit http://www.compassblueprint.org/awards.
Visionary Planning for Sustainability Award City of West Hollywood Climate Action Plan The West Hollywood Climate Action Plan (CAP) is an example of how a community can implement all four Compass Blueprint principles through a multi-disciplinary and comprehensive program that promotes sustainability. The CAP makes clear the critical links between land use and mobility, tying transit-supportive mixed-use and infill development to meaningful reductions in GHG emissions. The CAP also seeks to improve quality of life for all community members and to enhance West Hollywood as a model of livability and walkability. Importantly, it provides an action framework to engage all segments of the City – residents, property owners, and businesses – to work together to achieve plan goals. Lastly, the
City of West Hollywood’s Climate Action Plan demonstrates the ability of even a small city to effectively contribute to global environmental solutions at the local level, using creative programs tailored to its specific setting and needs.
Visionary Planning for Prosperity Award City of San Bernardino Sustainable San Bernardino Energy Efficiency Pilot Program San Bernardino Energy Efficiency Pilot Project, which is a component of Sustainable San Bernardino, is designed as a model local program that creates green jobs, lowers building energy costs, and reduces pollution and carbon emissions through the installation of energy efficiency and renewable energy measures in existing buildings from every sector of the local economy. The Program creates new jobs and provides resources for training for individuals seeking to gain employment as auditors, retrofitters, solar installers and other green occupations. San Bernardino’s Energy Efficiency Program is a project of the City of San Bernardino, Southern California Association of Governments, Green Valley Initiative and several community partnerships. Developed with the assistance of Southern California Edison and the Gas Company, the program is designed to inform, educate, and invite property owners who wish to convert homes, offices, or business into more energy efficient structures. The program has long term benefit for the City and the region by creating a competitive advantage for future development and sustainability.
Visionary Planning for Livability Award
▲ Water use and efficiency is a key reduction strategy in the Climate Action Plan, which includes measures to encourage low-water plant materials in municipal and private landscaping.
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City of Brawley Downtown Specific Plan The Brawley Downtown Specific Plan allows for mixed use and increased residential density, This Specific Plan encourages property owners to re-purpose existing vacant and underutilized properties as mixed-use (retail and office), live/work and recreational uses; thereby eliminating blight and facilitating the re-birth of Downtown. Encouraging the retention,
the City of Fullerton’s leaders have embraced sustainability as a framework for the community’s decisions and actions. They believe that it is vitally important to address the needs of the present without compromising the future generations’ ability to meet their own needs.
Visionary Planning for Mobility Award City of Santa Ana Transit Zoning Code The Santa Ana Transit Zoning Code provides development standards, graphics and architectural images, and guidelines which are a tremendous resource for any community considering land use changes along transit corridors or major arterials. The Transit Zoning Code achieves all of the Compass core values: It is fundamentally grounded in the concept of improving livability through compact, transit-supportive development, which encourages greater walkability. It promotes prosperity by increasing the amount of developable land and allowing higher densities, which creates new value for existing properties and the opportunity of investment in the area. Additionally, the Transit Zoning Code seeks to promote social equity and sustainability, by allowing for ▲ The Brawley Downtown Specific Plan
expansion and recruitment of office professional and medical uses compatible with the existing City and County uses will also elevate the livability index of Downtown for prospective residents. Downtown will become the concentrated “live, work and play” lifestyle center within the City. The plan creates a walkable community that will help improve livability and promote a mix of uses, and when this plan is implemented, Downtown Brawley will emerge from this economic downturn as “the place to be” within the Imperial Valley.
Sustained Leadership City of Fullerton Transportation Center Specific Plan The City’s vision is to create the premier transit-oriented destination in Orange County -- an urban and sustainable transit-oriented neighborhood. The neighborhood will provide opportunities to live, work, learn, play, dine, and shop. Most importantly, it will provide opportunities to commute to a variety of major employment and leisure destinations throughout Southern California by transit. This reduces our dependency on the automobile, per capita greenhouse gas emissions, and traffic congestion on regional freeways and other major thoroughfares. The Transportation Center plan includes green buildings that reduce the impacts of construction and operations. Because the community is designed for people, the built environment encourages people to walk, bike, or use transit instead of driving private automobiles. The Transportation Center Specific Plan shows that
▲ The Santa Ana Transit Zoning Code
the development of workforce housing and the expansion of public transit opportunities. Finally, Santa Ana’s Transit Zoning Code promotes the revitalization and sustainability of “Orange County’s Downtown” and historic county seat for future generations to rediscover and thrive. The Transit Zoning Code encourages mobility through transit oriented development to complement an improved transportation network allowing more travel choices. ❧ july/august 2011 • Sustainable Communities
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Commercial real estate developers embrace efficiency —From page 31
testing some new products and expect to see some exciting changes in lighting and glass in the near future. What is your firm’s view on solar energy for electricity and heating water in your large commercial buildings? Do you put them in new buildings? Where does it work, where not? Much of the product that Hines builds and manages is in higher density urban or first ring suburban environments where surface area for solar panels is problematic. We continue to examine solar as a potential alternative energy source – and the technology is improving all the time.
What is the overall extent of the sustainability program? As the global sustainability officer, what are your primary responsibilities? Hines has a long history of responsible investment from its founding in 1957. Gerald Hines, who was trained as an engineer, imprinted efficiency and sustainability on the firm from its earliest days. It is my responsibility to ensure that legacy be continued and that we as a company think about and embrace practices that allows us to conduct business in the cities and towns in which we operate that is respectful of the environment, and delivers the returns to our clients and partners that they expect. We believe and have proven that we can do both. ❧
Green buildings attract top-tier tenants Sustainability is part of the DNA of dertaking with Korean Air. It will be a our projects from day one,” said Thommodel for sustainability and transitas S. Ricci, executive vice president of oriented development. It is located Thomas Properties Group, Inc. The pubadjacent to the 7th Street/Metro licly traded firm has made a commitCenter station where the Blue, Red ment to green its portfolio nationally, and Purple Lines converge and will and all of its development projects are be built to LEED Silver Certification pursuing LEED certification. standards. Thomas Properties Group is a fullThe plan is to replace the existing service real estate company that owns, 58-year-old complex with two highacquires, develops and manages ofrise towers totaling approximately fice, retail and multi-family properties 2.5 million square feet: a 45-story throughout the United States. It is pubtower housing a luxury hotel of licly traded on the NASDAQ. 560 rooms topped by several floors There is no short-term bump in with 100 residential units; and a 1.5 rents for what Ricci calls “high permillion-square-foot, 65- story office formance” buildings. But he said the tower; and 275,000 square feet of company is thinking long term, and sees public spaces including a spa, meetbeing green as important to attracting ing space, retail shops and other and keeping good tenants paying top amenities. A plaza will connect the dollar. two buildings and will provide peThe firm believes efficient buildings destrian walkability throughout the attract a better class of tenants and block. The building is being designed ▲ The Wilshire Grand project help keep them for long-term leases. by A.C. Martin Partners, a Los AngeThe firm believes it will benefit from a les architectural firm. higher occupancy rate and less turnover. Ricci believes government should not mandate efSince commercial space is usually leased on a net ficiency of buildings, but should provide incentives to basis, lower operating costs don’t benefit the owner. Howencourage it. ever, they can tip the balance for a tenant trying to decide With mandates, developers will do only what they’re where to lease space. required to do. With incentives, there could be much One example of the firm’s approach is The Wilshire more effort on the part of developers and more interest Grand redevelopment project Thomas Properties is unon the part of investors and tenants.
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Sustainable Communities • July/august 2011
Are you ready for changes in land
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Unlock the secrets of success in this challenging new era with Sustainable Communities Magazine, the only publication focused on sustainable planning and community development. If you develop, design or finance real estate, you can’t afford to miss a single issue of Sustainable Communities Magazine. • Get a clearer picture of where growth is going to occur, where you should acquire sites, and what kinds of projects to plan. • Tap into new public private partnerships to win financial assistance, zoning concessions and exemptions from onerous environmental reviews. • Learn how to make the numbers work for green building and alternative energy generation, and how to choose the most cost effective products and techniques
• Find out what financing is available for mixeduse and infill construction • Keep up with changing state and local green building and sustainability requirements and priorities for funding • Take advantage of transit-oriented development opportunities and new incentives for affordable housing construction. • Learn how to turn environmental concerns from a negative into a positive in the battle against NIMBYism. If you want to get all the critical information you need in one succinct, readable and insightful package, there’s only one place to turn: Sustainable Communities magazine. Don’t miss an issue: Join the Partnership for Sustainable Communities and you’ll receive all 6 issues.
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