My Built Environment: Good, Bad, and Really Ugly

Well, it has finally happened. As we all know, gas prices have shot through the roof, and it is hitting us all in the pocket book. In my opinion, we have been living on borrowed time for a long time with relatively low gas prices, and it is finally time to pay the bill. People have been asking me a lot lately what this will mean for the development industry that is already down and out for the most part. To me, it basically means that most of the things I have been predicting for the last decade are finally going to come true, and we will have a paradigm shift in the way people live their lives. We are finally going to have to recognize resource conservation, and not just gasoline. Anyway, here are a few of my thoughts.

DOWNSIZING
No, I am not just talking about the empty nester’s who don’t need all that room now that the kids are gone. People are going to start realizing that they don’t need the McMansion’s on the hill, 5-6,000 square feet with 1 acre and more lots. Not only is this a lot of house to heat, cool, and maintain, but that is a lot of ground to maintain, water, fertilize. People are going to look for smaller homes, I say in the 1,800 to 3,000 square foot range on smaller lots. They might even become adjusted to raising families in townhomes, condos, or other high density living areas. The “Not so Big House” phenomena will become the norm, not just the latest fad.

But even more importantly, people are going to downsize there neighborhoods. They are going to want to live, work, and shop in relatively small geographical areas. People are going to become increasingly more willing to live in New Urbanism style developments with mixed income, mixed product, and mixed lifestyles all wrapped together. The one size fits all mega-burbs with the look-alike homes are going to be a thing of the past. People really want a sense of community and belonging. And the with cost of transportation, they won’t want to drive 5 blocks to the pool, or 5 miles to the grocery store. They will walk or ride there bike.

Which leads me to my next point. I think we are going to see the rise once again of the corner grocery store…in the 10-30,000 square foot range. This supports the concept of sustainability and not having to drive for miles to pick up a gallon of milk. Of course, only denser development can support this kind of store.

This is happening now. As proof I offer up Stapleton, Lowry, and a host of other New Urbanism projects. In a down housing cycle, these projects are still selling well, and at a premium also. Stapleton is now about 1/2 built out, in only 6 years.

SUSTAINABILITY
Of course, this is hardly new, as being “green” is what it is all about. But there are multiple levels of sustainability. One level is building homes and commercial buildings that are energy efficient. This has been happening for some time now, and it keeps getting better. Of course, when I started building homes back in 2000, I was focusing on energy efficiency. Back then though, nobody wanted to pay the premium for that. I am always ahead of my time it seems.

However, another level of sustainability involves land conservation, redevelopment, higher density development, reduced sprawl, water conservation, etc. I think we will see community gardens become more popular. Maybe we will see edible landscapes. People are going to have to get used to more native and wild landscaping…and not the manicured lawns with lollipop shrubs.

We are already seeing recycling becoming a way of life…now people are getting into composting. All of this keeps stuff out of the landfill. I think we are starting to see a paradigm shift of quality versus quantity. People will buy things that will last for years, and not look at products as being disposable. If it breaks I will just get a new one. I know I have been guilty of that myself.

Anyway, I had some other thoughts, but at the moment they escape me. Of course, none of this will come about overnight, but I do believe that with the cost of transportation now, it will happen faster than it would have otherwise.

Here we go! We now have a residential project where the client wants to follow the LEED ND checklist as much as possible in the hopes that the development may become LEED certified when the LEED ND checklist comes online in 2009. We are just starting the project, so I am not certain yet what all we will be doing. It is a smaller development, only 28 homes, but that size should be good for testing this. Over the next few days we will develop concept plans and review the LEED ND checklist in more detail and see what we can and cannot do. As part of this process, we will also be evaluating the market feasibility of LEED ND.

Another component of this that we will be studying is which green home building tool that will be implemented along with the development. This might be following the built green program, energy star, and LEED for New Homes. Whether a specific program will be implemented, or wheaher that gets left up to each builder will be decided at a later date.

Tonight I attended the Group Inc’s real estate forecast presentation for 2008. For those of you not in Northern Colorado, The Group is the largest real estate firm in Northern Colorado. The main thing I got out of it, which is what I have been thinking, and have been hearing from many people, is that our local market has “bottomed out” for lack of a better term. Things are going to start improving. It won’t be booming by any means, but it will be more balanced. The latter half of the year looks to be better than the first half, and that will carry over into 2009. For the next year, they are predicting that sales will be slightly over 2007, which was down a little from 2006, which in turn really dropped from 2005. That points to a bottom of the market. It is funny though how things are in perspective. For Fort Collins, they are predicting about 3,700 home sales. For everyone concerned that is a down market for around here. Interestingly, that is only 300 sales less than the peak back in 2004, and is similar to the sales pace in 1998. I remember 1998 being a pretty good year. It is amazing how it is all relative.

They also stated that in some neighborhoods, price points, etc. there is actually a shortage of homes available, which can happen in any market, good or bad.

Now for what I wish they would have done. I wish they would have spent some time talking about the various market segments, where is the activity? I wish they would have spent some time talking about what buyers are looking for, where they are coming from…what product is selling. Is the only thing selling homes Granite Kitchen counter tops, or are buyers looking for something else.

Now, for my predictions. Overall, I feel the market will continue to improve, though at a sustainable pace, not a torrid pace. I think the markets will be there for infill product, niche product, and amenity based communities. I think people are going to demand more from good design and architecture. They will want their homes to be unique and individual, a reflection of who they are…even from production builders. The street scape will become more important, with a variety of architectural styles, colors and materials. The look alike homes of the past decade will become a thing of the past. I predict buyers will become more interested in mixed use and mixed income neighborhoods…intermixing products within blocks, and not so segregated as they have been in the past. Buyers are going to continue to look for homes and neighborhoods that are designed within the context of the green movement, and that are energy efficient.

Well, that is all for now. I would be interested to hear what your thoughts are!

Recently a friend of mine and I were discussing what I was going to do with my LEED accreditation and discussing LEED in general. I actually have thought about this, and what I would like to do is specialize in LEED for New Developments, as well as New Home Construction. This will be in addition to what we do for commercial projects, but I want to specialize in the residential end.

With new development, particularly residential neighborhoods, there are very few standards for green development, other than doing what is right to minimize the impacts of development and creating them to be more sustainable than the current development patterns. In this respect, I think LEED-ND will be very beneficial and I want to be in the forefront of this. Convincing developers to go this route will not be easy, and it will also require municipalities, utility providers, and contractors to all think differently. One of the first projects I want to test with this will be own development. Right now, LEED-ND is in the pilot process, and will not be brought online until early 2009, so we will follow the pilot guidelines and hopefully become certified as we go to construction.

LEED for homes is an entirely different matter. There are many green building standards for residential construction. Locally, we have the Built Green program administered by the Metro Denver HBA, Energystar, the upcoming ANSI national standards, and some others. All are good programs with varying degrees of market acceptance. When I was building several years ago, I followed the Built Green program, and even listed some of the homes. At the time, that program was unknown in Fort Collins and it had little market viability.

Both the Built Green and Energy Star programs focus more on the building, mostly favoring energy and water consumption. I think where LEED might be different is that it looks at a more comprehensive picture from site development all the way through indoor air quality. It is also designed to dovetail with LEED-ND. With our development, we will also require the builders to follow some kind of green standard. Whether we want to dictate which standard, or allow flexibility we will have to decide. Of the measures that we will have to evaluate will be market acceptance of the various standards, and the cost of implementing those standards. LEED in particular can be quite expensive. Just the fees paid to USGBC and to have a third party rater involved can run from $3-7,000 per home depending upon the level of certification (taken from Green Builder magazine, July 2007). This is pretty steep for the typical home where every dollar counts for affordability and buyers compare prices per square foot more than features. That being said, there could be some economy of scale achieved if a builder has stock plans that are repeated several times, or uses the same materials and specs from home to home. This would in theory reduce the paperwork that is incurred. I don’t know if this is possible, but will look into it further. If USGBC wants LEED to be a viable standard for home building, they will have to address the cost issues.

Hey I passed! The actual test was nothing like all the practice ones I took. I can’t say it was easier or harder, just different. Anyway, no more testing for awhile…