September 17, 2017

Something More Troubling Than Stucco

A weekend topic starting with Jacobin Magazine. “Richard Florida, one of the most influential thinkers about cities in postwar America, wants you to know that he got almost everything about cities wrong. If you live in an urban center in North America, the United Kingdom, or Australia, you are living in Richard Florida’s world. Fifteen years ago, he argued that an influx of what he called the ‘creative classes’ — artists, hipsters, tech workers — were sparking economic growth in places like the Bay Area. Their tolerance, flexibility, and eccentricity dissolved the rigid structures of industrial production and replaced them with the kinds of workplaces and neighborhoods that attracted more young people and, importantly, more investment.”

“His observations quickly formed the basis of a set of breezy technical solutions. Eventually, the mysterious alchemy of the creative economy would build a new and prosperous urban core. Today, even Florida recognizes that he was wrong. The rise of the creative class in places like New York, London, and San Francisco created economic growth only for the already rich, displacing the poor and working classes. The problems that once plagued inner cities have moved to the suburbs.”

“After fifteen years of development plans tailored to the creative classes, Florida surveys an urban landscape in ruins. The story of London is the story of Austin, the Bay Area, Chicago, New York, Toronto, and Sydney. When the rich, the young, and the (mostly) white rediscovered the city, they created rampant property speculation, soaring home prices, and mass displacement. The “creative class” were just the rich all along, or at least the college-educated children of the rich.”

“His latest book, The New Urban Crisis, represents the culmination of this long mea culpa. Though he stops just short of saying it, he all but admits that he was wrong. He argues that the creative classes have grabbed hold of many of the world’s great cities and choked them to death. As a result, the fifty largest metropolitan areas house just 7 percent of the world’s population but generate 40 percent of its growth. These ’superstar’ cities are becoming gated communities, their vibrancy replaced with deracinated streets full of Airbnbs and empty summer homes.”

“Meanwhile, drug addiction and gang violence have spread to the suburbs. ‘Much more than a crisis of cities,’ he writes, ‘the New Urban Crisis is the central crisis of our time’ — ‘a crisis of the suburbs, of urbanization itself and of contemporary capitalism writ large.’”

From The New York Times. “Three years ago, Soo K. Chan, an architect well known in Singapore but new to the Manhattan luxury condo scene, posed a question to jaded New Yorkers: How about a pool in the living room? Well, why not? It was a hit overseas, where Mr. Chan had designed pools for luxury apartments in Southeast Asia, and at the time the New York City condo market was on fire.”

“So Soori High Line, the new 31-unit luxury mid-rise in West Chelsea that Mr. Chan designed and developed, will have four-foot-deep saltwater pools in more than half of its apartments. The 24-foot-long pools, surrounded by a glass enclosure, are heated and partially open to the outdoors, enticing residents to swim even during a snowstorm. The apartments — which range in price from about $3 million for a two-bedroom to $22.5 million for the five-bedroom, triplex penthouse — have ceilings as high as 18 feet, heated limestone floors, gas fireplaces and doorknobs wrapped in hand-stitched leather.”

“But with only a few months left until the building’s completion, just 15 of the 31 units are under contract or reserved, eight of them with private pools, although sales began in 2014. Since then, the developer has hired three different real estate brokerages to handle sales; the most expensive unit under contract so far is a $10.9 million duplex. ‘The expectation was that there are so many billionaires in the world, they’re a dime a dozen – and that’s not what happened,’ said Jonathan J. Miller, a New York real estate appraiser.”

From D Magazine in Texas. “While not as headline-grabbing as reminders of the Confederacy, Dallas’ older apartment stock has been under siege for years and is a more palpable threat to lower-income Dallasites who are increasingly being priced out of their longtime neighborhoods. Assuming you‘ve not been under a rock for the past few years, you’ve noticed the staggering amount of apartments being built in Dallas (and, well, nationwide, if we’re being honest). A good number of them are cheaply constructed, short-term buildings meant to squeeze every penny possible in rent before the glue holding the sawdust together gives way.”

“Most of these apartments are thunderously expensive. I looked at a building on McKinney Avenue and the cost for a 800-ish square foot apartment was about what I paid in mortgage, taxes, utilities, cable TV, internet and HOA dues on a 1,900 square foot high-rise condo. But as much ink and zings have been spilled about these Millennial pickpocket apartments, the city has remained largely mum about what was there before these new buildings. But if you scratch the surface you’ll see something more troubling than stucco.”

“Dallas was chockablock with modestly sized apartment complexes scattered on generous lots. Many were built in the 1950s and 1960s. It’s these older apartment buildings, often constructed with better materials than today’s quick-builds, that tell a story of neighborhood displacement. As the concept of condominiums took off and developers wanted to cash out, many complexes around the nation converted to condo beginning in the 1970s.”

“Flash forward to the current hyper-apartment building cycle we remain in. Developers have approached a number of these older complexes because of their low density, which result in larger, buildable lots. Taking down 30 condos on an acre or two makes economic sense when you replace it with 200 apartments. Current owners take the windfall of likely double the condos’ market value and run.”

“Sometimes selling is the right answer. Often, it’s not. As any homeowner will tell you in the frantic market of the past few years, the question isn’t selling, it’s where do you go next? Selling a $150,000 condo for $300,000 still doesn’t net you a lot of options. Certainly not nearby single-family or even townhome options. For all a seller’s newfound wealth, they’re probably don’t have the income to rent in the building that replaces their home.”

“But if you remain, what’s left of your neighborhood? Older two-story buildings are demolished and replaced with extremely dense, three- and four-story buildings. Gone are the old-growth trees that lined the streets. Gone are the generous setbacks and well-spaced buildings.”

“In the case of apartments being renovated, new rents likely rise in excess of many tenants’ ability to pay. However, while they cost more, increases are nowhere near the magnitude of new-build complexes. This wholesale affordability issue is problematic at most income levels, but nowhere more acute than in the lower-income brackets disproportionally comprised of minorities. While we can debate the merits of Confederate symbols in public spaces, Dallas needs to get off its high-horse in housing all its citizens.”