Streetsblog San Francisco

The real estate market is undergoing the most rapid period of change in a generation — and the shift is decidedly urban. A succession of recent studies have found there is an under-supply of urban-style housing — attached and small-lot, single-family homes — on the scale of about 13 million units. On the other hand, there is an estimated oversupply of detached housing in the car-based suburbs of about 28 million units.

Public policy hasn’t quite caught up with the market, say the experts at the Congress for the New Urbanism. The Federal Housing Administration and its subsidiaries, Fannie Mae and Freddie Mac, are discouraging urban-style housing developments.

HUD lending standards dictate that mixed-use development projects can’t be more than 15 to 20 percent retail. Fannie caps retail share at 20; Freddie at 25 percent. And these standards set the tone for the private market — a tone that is consequently skewed toward single-family housing, and away from the pent-up demand for urban development with walkable amenities.

“It’s really disrupting the market,” said John Norquist, president of Congress for the New Urbanism. “It’s making it hard to developers to finance good projects.”

CNU is seeking reform. The organization has built a broad coalition including the National Association of Homebuilders, the National Association of Realtors, the National Town Builders Association, and the Center for Neighborhood Technology. Together, this reform group is planning to initiate discussions with Shaun Donovan, secretary of the Department of Housing and Urban Development; Rep. Barney Frank (D-MA), chair of the House Committee on Financial Services; and the U.S. Treasury.

“Our sweetest dream is that the Obama administration — the Treasury Department and HUD — would say, ‘Let’s change this before the end of the year,’” Norquist said. “The secretary of HUD, Shaun Donovan, has said very favorable things about this. He recognizes it.”

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Over the past two days at the Congress for the New Urbanism Project for Transportation Reform conference, attendees have called for transportation reform at local, regional, and national levels. In a panel debate about the future of transportation funding and the role of regional planning through MPOs, several speakers argued that the foundation of transportation and development funding had to be systematically overhauled.

Mike Krusee, former chairman of the Texas House of Representatives Transportation Committee, said that financial problems were more significant than environmental, though they should be tied together in the same discussion. "The reason there's not a new transportation bill is because there is no money. We've hit the wall of unsustainability on how we finance the transportation system," he said.

Krusee asserted it was urgent and necessary to understand the nature of this broken financial apparatus and to develop solutions to fix it. In Texas, he said that, on average, it cost the state 20-30 cents per person per mile to build and maintain a road to the suburbs, yet drivers only pay on average 2-3 cents per mile through the gas tax, vehicles fees, etc. "What we found was that no road that we built in Texas paid for itself," said Krusee. "None."

The expense to build roads and utilities further and further from the urban cores was not only driving costs to unsustainable levels, it created an imbalance in who paid for growth. Over the past 50 years, Krusee argued, the federal government was using tax money that came by and large from cities to subsidize roads to areas without access otherwise. "City dwellers have subsidized the land purchases and the development costs out in the suburbs," said Krusee. What's more, the gas tax, which city dwellers pay when driving on city roads, but which goes to freeways largely outside of urban cores, is "a huge transfer of wealth from the cities to the suburbs to build these rings."

Krusee said building the Interstate system was initially a good thing, because it facilitated interstate commerce and increased the productivity of cities.  Now however, because of congestion caused by ever longer commute patterns, system productivity is in peril. "What's happened is the federal government has basically reneged on the deal. By subsidizing highways out to the suburbs, it's no longer efficient for truck traffic, for goods and services and people to move between cities in the United States because those roads have been hijacked by all the commuters."

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The Congress for the New Urbanism's Project for Transportation Reform summit in Portland, Oregon, has brought together transportation engineers, city planners, and transportation reform advocates to share best practice policies for reforming transportation metrics, funding mechanisms, and regional practices that isolate transportation planning from land-use and growth targets.  The highlight of the first day of the program was Portland itself, as councilors from Portland Metro, one of the only elected municipal planning organizations (MPOs) in the country, elaborated on their multi-disciplinary mission, which seeks to limit development within an urban growth boundary and coordinate transportation, parks and recreation, and solid waste management to achieve a more sustainable city.

It's quite a mandate, one that Metro's own councilors and representatives reminded the audience was a work in progress. Despite Portland's reputation among new urbanists and livable cities advocates as a national leader in promoting pedestrian safety and multi-modal accessibility, the region's municipal stewards said they have a long way to go.  

Metro Councilor Robert Liberty said, "I know this is the image many of you have of our region," while displaying a slide of Dorothy and her cohorts skipping along the yellow-brick road to Oz (Portland's green bike lanes do beg at least a chromatic comparison to the Emerald City). In reality, said Liberty, moving onto a photo of one of Portland's many crisscrossing freeways, the city is still fighting off the influence of Robert Moses (who visited in the 1940s and convinced city leaders they should build bigger and faster roads). 

Since 1973, with the passage of Oregon's Senate Bill 100, which led to the original urban growth boundary around Portland, the region has incrementally chipped away at the Moses paradigm of freeway expansion, instead funding light rail, robust bus service, extensive neighborhood traffic calming, and ever more impressive bicycle infrastructure. So thoroughly have Portlanders embraced the bicycle, in fact, St. Stephen's Episcopal Church recently unveiled a new bicycle shrine in its efforts to reach out to cyclists.

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As mayor of Milwaukee from 1988 to 2004, CNU President John Norquist made urbanism and livability top priorities. Some of his most notable achievements centered on the redevelopment of highway corridors with street grids and infill, culminating with the demolition of the Park East Freeway in 2002 -- one of the largest voluntary highway removal projects undertaken in America. Other projects, like the introduction of a light rail system, never reached fruition.

In the second part of our interview (read the first part here), Norquist discusses these victories and setbacks, and how federal policy can help cities and towns do the right thing.

Ben Fried: Expanding the transit system in Milwaukee has been a very long, protracted process. You wanted to build light rail. What sort of resistance did you meet from other public officials?

Cincinnati, Milwaukee, Buffalo, Detroit, Cleveland -- the regional planning commissions they have really aren’t looking out for city interests, they're looking out for the exurban interests.

John Norquist: Any time I had to fix a problem at one level of government, there was another one that would pop up. We had a Democratic governor, but then we had a county exec who was against light rail. The mayor wasn’t really for light rail. When I got elected mayor, I was for light rail but the county exec was still against it, that was Dave Schultz in 1988. And then we had Tommy Thompson as governor who wasn’t for it. He said he was open to it at the beginning when Schultz was against it. And then once Schultz left, then Thompson became more against it. The right wing talk shows went after it and so he followed their lead, you know the local Rush Limbaugh types. And then it just seemed like every step of the way, we get one group that had to be for it on the other side. The county runs the transit system, so it’s kind of hard to do it without them. If the city had run the transit system we would have been able to do it right away.

It’s frustrating, because Milwaukee was always ranked by the Federal Transit Administration as one of the best places to put in a light rail, because it was built around the street car system. There was over 350 miles of street car in Milwaukee at the end of the war, 200 miles of inner urban. We had a really, really good transit system and by 1958 it was all gone. But the land use patterns were all built around street car lines. Now I think my successor, Tom Barrett, has got himself some clout with this. They put an earmark in the budget bill that just passed that gave him control of a nice big chunk of money, so he might be able to get that street car going.

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