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Federal Regulations at Odds with Demand for Urban Housing

Despite growing demand, developers of mixed-used development face an additional hurdle thanks to outdated federal regulations. Photo: CNU

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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Applications for TIGER II Funding Overwhelm What U.S. DOT Can Dish Out

For every dollar awarded from the U.S. DOT’s TIGER II grant program, there are more than $30 that applicants are asking for but won’t be getting.

The Tucson Modern Streetcar project was awarded $63 million in the first round of TIGER funding. (Image: Tucson Regional Transit Authority)

The Tucson Modern Streetcar project was awarded $63 million in the first round of TIGER funding. (Image: Tucson Regional Transit Authority)

That’s the word from the DOT, which announced on Friday that it had received about $19 billion in applications for nearly 1,000 projects “from all 50 states, U.S. territories and the District of Columbia.” The volume of applications, which range from “highways and bridges to transit and ports,” far exceeds the $600 million available in TIGER II funds.

States competing for TIGER II money need to show that their transportation projects will have significant economic and environmental benefits at a city-wide, regional, or national level. Since the money is awarded at the discretion of DOT using set criteria, not disbursed through the rote formulas that govern most transportation funding, it’s been a catalyst for innovative transportation projects.

David Burwell, a co-founder of the Surface Transportation Policy Project, isn’t surprised at the overwhelming response to TIGER II. “It shows the enormous interest states have in discretionary money,” he says. “With formula money, states will tell you, ‘That’s our money; we don’t have to do anything for formula money.’ Offer discretionary money and they’ll do backflips.”

According to Burwell, who now heads up the Energy and Climate Program at the Carnegie Endowment for International Peace, the volume of TIGER II applications indicates that state DOTs are willing to reform their focus on highways, but they want something in return for the reforms they make. “Otherwise they’ll spend all their money filling potholes and keeping bridges from falling down,” he says. In other words, if you want states to make real advances on transit and smart urban design, you have to give them some incentive.

Transportation Secretary Ray LaHood made a similar point in last week’s announcement. “The wave of applications for both TIGER II and TIGER I dollars shows the back-log of needed infrastructure improvements and the desire for more flexible funds,” he said in a statement. According to the DOT, the appetite for TIGER II funds is not quite as ravenous as it was for TIGER I, when the department got $60 billion in applications for $1.5 billion in available grants.

This time around, TIGER II includes a partnership between the DOT and the Department of Housing and Urban Development to disburse planning grants. $35 million in TIGER II funds will combine with $40 million from HUD to pay for transit-oriented development. In another sign of the closer collaboration among federal agencies, two other departments – Agriculture and the EPA – are getting in on the action too, helping to evaluate the planning grant applications.

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Livable Communities Act Clears Senate Committee

The Senate Banking Committee voted 12-10 yesterday in favor of the Livable Communities Act, legislation that would bolster the Obama administration’s initiatives to link together transportation, housing, economic development, and environmental policy.

donovan_lahood_jackson.jpgShaun
Donovan, Ray LaHood, Lisa Jackson: Together forever? The Livable
Communities Act would codify the partnership between HUD, US DOT, and
the EPA. Photo: EPA

The administration has been taking steps since last March to coordinate between the Department of Transportation, HUD, and the EPA. This bill, carried in the Senate by Connecticut’s Chris Dodd, would formalize those partnerships and authorize substantially more funding to work with. 

Most of the action would flow through HUD. This year the agency is funding $150 million in grants
supporting regional efforts to improve access to transit and promote
walkable development. The Livable Communities Act promises to scale up
that program significantly, creating a new office within HUD, called the
Office of Sustainable Housing and Communities, that will distribute
about $4 billion through competitive grants.

The initial round of grants would fund comprehensive plans — local
initiatives to shape growth by coordinating housing, transportation,
and economic development policies. Most of the funding — $3.75 billion
– would be distributed over three years to implement projects
identified in such plans.

While some Senators from rural states had expressed skepticism
about the benefits of the bill for their constituents, yesterday’s vote
split strictly along party lines, with Democrats Jon Tester of Montana
and Tim Johnson of South Dakota both voting in favor.

To make the case for the bill to his rural and Republican counterparts, Dodd singled out Envision Utah,
a campaign that has built public support for smart growth policies in
one of the country’s reddest states. Not a single GOP Senator voted for
the bill, however, even Utah’s Bob Bennett, who told UPI, "I think the overall philosophy is wise, but I will be voting against it."

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Feds to Start Scoring Transportation Potential of Housing Grant Applicants

Housing and Urban Development (HUD) Secretary Shaun Donovan said late
Friday that his agency will soon start gauging the "location efficiency"
of its grant applicants, determining each project’s potential for
connecting residents to surrounding neighborhoods — and mirroring the
recommendations of a
recent report
that found a correlation between homeowners’
foreclosure risk and their dependence on car ownership.

Secretary_Donovan_0.jpgHUD Secretary Shaun Donovan, right,
with Rep. Hank Johnson (D-GA) at left and Atlanta Mayor Kasim Reed at
center. (Photo: White
House Press
)

Donovan’s announcement came during
an address
to the Congress for the New Urbanism’s (CNU) annual
meeting in Atlanta. During his visit, the former New York City housing
commissioner also toured the BeltLine
project
, an ambitious local effort to convert former rail track into
new light rail and trails.

In his remarks to the CNU, Donovan depicted the integration of
"location efficiency" measures as a way to encourage housing developers
to pursue more mixed-use, denser construction.

"[I]t’s time that federal dollars stopped encouraging sprawl and
started lowering the barriers to the kind of sustainable development
our country needs and our communities want," Donovan said. "And with
$3.25 billion at stake in these competitions, that’s exactly what they
will start to do."

Evaluating the range of transport options available for prospective
residents of urban and suburban areas was among the central
recommendations of a
foreclosures report
released in January by the Natural Resources
Defense Council (NRDC). That study was aimed at mortgage lenders rather
than the government, but Democratic lawmakers last year began
pushing for
HUD to insure more mortgages based on the properties’
"location efficiency."

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Dodd Vows to Pass Livability Bill Amid Skepticism From Rural Senators

Even as the Obama administration ramps up its work on a sustainability initiative that treats transportation, housing, and energy efficiency as interconnected aspects of development policy, the effort remains without an official congressional authorization — a situation that Senate Banking Committee Chairman Chris Dodd (D-CT) vowed to fix yesterday.

dodd_working.jpgSenate Banking Committee Chairman Chris Dodd (D-CT) (Photo: The Washington Note)

During an appearance in his home state with Ron Sims, chief of the administration’s inter-agency Office of Livable Communities, Dodd vowed to work for passage of his legislation authorizing $4 billion in grants for Sims’ work.

"I only have about eight to 10 months," he said, according to the Hartford Courant. "My goal is to see the Livable Communities Act become law before I retire."

Dodd, whose panel has jurisdiction over housing and urban development, is working with that 10-month deadline as he anticipates retiring from Congress at year’s end. His push to create a long-term foundation for the administration’s sustainability effort also could run into resistance from rural lawmakers whose states have tended to benefit from a transportation spending system based on road-mile formulas.

The first stirrings of rural skepticism came on Thursday, when Sen. Mark Begich (D-AK) questioned the administration’s move to emphasize "multi-modal" transport projects that would combine roads, transit, and bike-ped access.

Begich asked the U.S. DOT’s No. 2, John Porcari, to make sure that rural states are "not lost in the mix." That sentiment was echoed later in the day by Sen. John Thune (R-SD).

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EPA and HUD Make Big Investments in Sustainable Development

The Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA) are making significant progress on their joint effort, with the U.S. DOT, to connect cleaner transportation options with affordable  housing and denser urban development.

fairmount539__1237909144_3098.jpgA future commuter rail station along Boston's Fairmount Line, one of five areas selected for EPA sustainable development aid. (Photo: Globe)

The latest moves came as Obama administration officials gathered in Seattle for the annual New Partners for Smart Growth conference, where HUD Secretary Shaun Donovan officially tapped Shelley Poticha and Ron Sims as leaders of his agency's sustainable communities office.

On the HUD website, Donovan's aides are seeking input and suggestions from local planners as they prepare to award an initial $100 million in grants to cities with plans for transportation and land use reform.

Not to be outdone, EPA took the opportunity to launch two pilot grant programs aimed at using clean water funds to boost community development and rebuilding brownfield communities around transit access.

The water-funding pilot will focus on New York, California, and Maryland, while the brownfields -- former industrial sites where hazardous materials may impede environmental cleanup -- selected for transit-oriented development aid are located in Indianapolis, Iowa City, Denver, Boston, and the San Diego area.

The three federal agencies involved in green development work are also beefing up their message, connecting a number of recent policy shifts on their respective fronts into a larger narrative of progress towards a more harmonious approach to transportation and housing. For a recap of the recent steps taken by the EPA, HUD, and U.S. DOT -- many of which were covered by Streetsblog Capitol Hill -- check out the agencies' January bulletin [PDF].
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How Will Obama’s Sustainability Team Spend Its $150M? A Preview

Before the U.S. DOT gave some early
clues
as to how the agency would craft its new transit funding
rules
, deputy housing and urban development (HUD) secretary Ron
Sims answered another question that’s been on the minds of transit and
local-planning wonks: How will the Obama administration’s three-agency partnership
for sustainable communities spend its $150 million in funding for this
year?

2008528267.jpgDeputy HUD Secretary Ron Sims (Photo: Seattle
Times
)

Here’s what senior officials are thinking,
Sims told the U.S. Conference of Mayors:

  • $100 million is set aside for grants to local communities that
    present innovative energy-efficiency plans.
  • $40 million is set aside for grants to encourage enactment of
    local zoning and planning reform that makes mixed-use, transit-oriented
    development more feasible.
  • $10 million is set aside for research into "the link between
    transportation and the built environment," Sims said, with an eye to
    creating location-efficient mortgages that take mobility costs into
    account.

After Sims spoke, Environmental Protection Agency (EPA) chief Lisa
Jackson told the mayors that the nation’s ongoing economic crisis would
require managing local growth in new ways.

"The boom in commercial and residential real estate drove us, and
it was good … but we now know that there are some impacts to
sustainability from that growth," Jackson said.

"We continue to do the hard work of pulling ourselves out of the
economic decline, and part of that work" is growing more smartly, she
added.

One question Jackson did not address, despite questions from
reporters after her speech: congressional
efforts
to prevent the EPA from taking action against carbon
emissions if Congress fails to pass a climate bill this year.

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Obama Quietly Gets Federal Agencies Involved in Transport Planning

When President Obama signed an executive order in October requiring federal agencies to craft strategies for reducing their greenhouse gas emissions, he described the mandate as Washington "lead[ing] by example" on the pollution-reduction front.

Obama_bike.jpg(Photo: AP)

And
that’s true — but the order also includes language telling federal
agencies to get involved in integrating local transportation planning,
with a particular focus on selecting sites for government facilities

that are pedestrian-friendly, near existing employment centers, and
accessible to public transit, and emphasize existing central cities
and, in rural communities, existing or planned town centers;

The
overall goal for government agencies, as Obama’s order put it, should
be to "strengthen the vitality and livability of the communities in
which federal facilities are located." Given that more than 2,200
communities host federally owned or leased property, that edict could unleash a lot of local energy for transit and pedestrian improvements.

The
order also gives federal agencies eight months to craft long-term
sustainability plans focusing on how to implement "strategies and
accommodations for transit, travel, training, and conferencing that
actively support lower-carbon commuting and travel by agency staff."
The White House budget office and Council on Environmental Quality are
charged with vetting each agency’s proposal.

And as each agency devises those emissions-cutting plans, the Obama administration’s push to consider sustainability as a transportation, housing, and environmental issue is given a meaty role in the process.

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Quantifying the Value of San Francisco’s Unaccepted Streets

As we have reported, Berkeley Professor Nicholas de Monchaux's Local Code proposal for activating San Francisco's "Unaccepted Streets" called for transforming the patchwork of 529 acres of underutilized alleys, street-ends, and pathways into a network of green spaces. Were San Francisco to build out the more than 1500 identified sites, de Monchaux estimates that the city would save $4.8 million in air pollution mitigation, $6.9 million in energy savings, and a staggering $1 billion in stormwater infrastructure.

From the proposal:

The final outcome of our proposal is a pedestrian network of places, and a virtual network of spaces as well. A focused web threaded through real and virtual fabric; our systematic interventions turn away from the idea of urban infrastructure driven by cars and highways to a more robust, and perhaps natural, notion of urbanity. Instead of the old metaphors of lungs and circulation, we propose a robust, networked logic of health and social welfare, a distributed immune system for the 21st-century metropolis.

While the project didn't win UCLA's WPA 2.0 design competition, Professor de Monchaux and the five other WPA 2.0 finalists were afforded an audience in late November with President Barack Obama's Director of the Office of Urban Affairs Adolfo Carrion and HUD Deputy Secretary Ron Sims, who both apparently showed great interest.

"My goal now is to initiate some of those conversations with local agencies," said de Monchaux. "I think a very interesting next step would be to implement some of the designs locally, create a community based laboratory to see how these designs would perform."

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California Cities Lead Nation in Reducing Emissions from Streetlights

pg_and_e.jpgPG&E workers installing an LED streetlight. Photo: PG&E

Streetlights are an enormous part of any city's energy consumption and cities that wish to cut down on their emissions and their energy bills are getting in line to convert their older street lamps to LED technology. According to Clinton Climate Initiative (CCI) and Department of Energy (DOE) data, street lighting costs are one of the biggest components of a city’s utility bill, accounting for 10 percent to 38 percent of the total. With nearly 35 million street lights in the United States, about 1 percent of all electricity is used by street lighting systems.

Like other cities in the Bay Area experimenting with LED streetlights, including San Francisco and Oakland, San Jose has embraced the nascent technology as part of a sustainability platform called Green Vision, which sets ambitious targets for reducing energy consumption and emissions, including an expected 50 percent or more energy and cost savings from the street lamp conversions.

"Our goal has always been to move to a more energy efficient light," said Laura Stuchinksy, Transportation Sustainability Officer at the San Jose Department of Transportation.

Stuchinsky said San Jose intends to replace all 62,000 streetlights throughout the city before the Green Vision target date of 2022. The city initiated a pilot streetlighting project in Hillview North in 2008 to replace 118 low-pressure sodium streetlights with LEDs and a recent American Recovery and Reinvestment Act (ARRA) stimulus fund grant of $2.2 million will offset implementation costs for the next wave of conversions expected later this year.  Further, the city intends to backfill with new renewable energy generated locally and possible purchases through PG&E. San Jose currently spends $4 million annually on street lights, which consumes over 35 million kilowatt hours of electricity, according to Stuchinsky.

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