Tag Archives: development

The importance of property values to NIMBYism

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NIMBYism is cited as a common American issue as homeowners often fight hard to protect their pristine homes and neighborhoods. I was reminded of this by an article looking at seven neighbors that damage property values:

Here, the seven suprising neighbors that can reduce your home’s value:

Power Plants. The data is fairly clear on the impact of power plants on nearby home values — it usually hurts them. A study from the University of California at Berkeley shows that home values within two miles of a power plant can decrease between 4% and 7%.

Landfills. A study from the Pima County (Arizona) Assessor’s office shows that a subdivision located near a landfill (and all other residential factors being equal, like house size, school quality and residential incomes) loses 6% to 10% in value compared to a subdivision that isn’t located near a dump.

Robert A. Simons, an urban planning professor at Cleveland State University, says that if you live within two miles of a Superfund site (a landfill that the government designates as a hazardous waste site), your home’s value could decline by up to 15%.

Sex Offenders. Living in close proximity to a registered sex offender is one of the biggest downward drivers of home values. Researchers at Longwood University’s College of Business & Economics conclude that the closer you live to a sex offender, the more your home will depreciate. In the paper, Estimating the Effect of Crime Risk on Property Values and Time on Market: Evidence from Megan’s Law in Virginia, Longwood researchers say, “the presence of a registered sex offender living within one-tenth of a mile reduces home values by about 9%, and these same homes take as much as 10% longer to sell than homes not located near registered sex offenders.”

Delinquent Bill Payers. One surprising way that neighbors can bring down the value of surrounding homes, especially in town home or condo communities, is by not paying their maintenance fees or their mortgages. “Bad neighbors bring values down by not paying their maintenance fees, in some cases their mortgage payments, and not maintaining the home’s appearance,” says Pordes. “These homeowners usually do not care about real estate values.”

Foreclosed Homes. Perhaps the biggest single factor that drives nearby home values down is a foreclosure. A recent study by the Massachusetts Institute of Technology concludes that a neighbor’s foreclosed home can slash the value of homes within 250 feet of the foreclosed properties by an average of 27%. Says Federal Reserve Governor Joseph Tracy recently in his economic outlook for 2011: “The growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market… Problems in housing markets can impact economic growth.”

Lackluster Landscaping. Studies show that lawn care has a big impact on surrounding home values. Virginia Tech University released a report stating that pristine landscaping can jack up the value of a home by 5% to 10%. But if the lawn looks like it just hosted the world rugby tournament, it can be a green thumb to the eye of local home prices.

Closed Schools. Sometimes, neighborhood problems can stem from local government action. For example, if a cash-strapped city or town closes a neighborhood school, that can easily steer home values south. The National Association of Realtors says that 75% of home shoppers, the quality and availability of schools in the neighborhood is either “somewhat important” or “very important.”

As the article notes, what an individual homeowner can do about these situations might be limited. Perhaps the best way to avoid this is simply to do one’s homework before moving into a neighborhood to assess what has happened or might happen in the future. This could involve checking community websites, reading local news, and talking with current residents. But, there are always trade-offs involved in this process. If someone desires a cheaper home, perhaps they might move into an area that has one of these conditions.

At the same time, there are plenty of land uses or neighbors that are not cited in the article where homeowners band together to protect their community. Here are a few recent situations in the Chicago region: a battle over affordable housing in Winnetka (with an update here), Naperville residents opposed to Show-Me’s and Evanston residents opposed to a Tilted Kilt restaurant, and a debate over lighting in Barrington Hills. Compared to a power plant or landfill, these uses seem much less obvious and yet are important concerns for residents of wealthier communities.

On the whole, this article illustrates that one of the primary goals of a homeowner is to protect and/or grow their property values. In order to do this, a homeowner may have to be in opposition to larger neighborhood or community goals. After all, power plants and landfills and sex offenders have to be somewhere. But, if you have the economic means in the United States, you generally move to nicer and nicer neighborhoods where these NIMBY concerns are likely reduced. It would be interesting to track how people’s neighborhood or suburban moves over the years progressively place them further and further away from such property value lowering uses.

Chicago’s Fifth Avenue an example of late 1800s growth machine

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Chicago has its own Fifth Avenue but it is the only numbered avenue in the city. Here’s why:

When what is now the East Garfield Park neighborhood became part of the city in 1869, much of the West Side was open prairie.

According to Streetwise Chicago: A History of Chicago Street Names (Loyola University Press, 1988), the street, originally called Colorado Avenue, was renamed in an effort to boost residential and commercial development.

The new name was meant to evoke the prestige of New York’s flashiest shopping strip—a far cry from the modest bungalows, brownstones and warehouses that have come to define the area…

Peter T. Alter, an archivist at the Chicago History Museum, says the name switch happened around 1890, near the time Chicago beat out New York for the right to host the World’s Columbian Exposition fair.

“Perhaps,” Alter notes, “that lessened the idea of Chicago being seen as second to New York City.”

This is a great illustration of a growth machine at work: in order to boost development in what was an undeveloped area, the street name was changed in order to invoke the wealthy street in New York City. Additionally, the name change seems tied to the 1893 Columbian Exposition (see here for a review of The Devil in the White City which describes some of this time period), an important moment in Chicago’s early history that established the booming city as a world-class city. It sounds like boosterism all around.

Comparing inner vs. outer suburban growth

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There are numerous types of suburbs (I think I now have at least 13 different types in one of my lectures in American Suburbanization) but one broad comparison includes looking at suburbs adjacent to cities (“inner-ring suburbs”) vs. suburbs on the metropolitan fringe (often referred to as “exurbs”). USA Today reports on some of the population trends in these two areas:

A new pattern is emerging this century. Most of the growth is happening on opposite ends of the suburban expanse: in older communities closest to the city and in the newer ones that are the farthest out.

“A few decades ago, all the growth was on the edge,” says Robert Lang, an urban sociologist at the University of Nevada-Las Vegas who analyzed 2010 Census data. “Now, there are citylike suburbs doing well on one side of the metropolis while conventional suburbs still flourish on the fringe.”

Close-in suburbs in the 50 largest metropolitan areas added 6 million people from 2000 to 2010, an 11.3% increase. The nation grew 9.7% in the same period.

At the same time, less populated suburbs on the outer edge grew even faster. They gained 6.7 million, a 24.5% increase.

DuPage County, Illinois is cited in this story as an example of suburban areas that are between these two extremes. Such “mature suburbs” had lower rates of growth as they “add[ed] 3.5 million people, a 7.8% increase” over the previous decade.

I like this emphasis on looking at the different rates of suburban growth depending on proximity to the city. There are a couple of stories that one could tell:

1. The suburban population is growing. I still am eager to hear the final 2010 figures that tell us what percentage of Americans live in suburbs compared to urban and rural areas.

2. The fastest-growing suburbs are on the metropolitan fringe. This is what might be considered typical suburban growth and/or “sprawl” as metropolitan regions continue to expand. It would be helpful to know how this 24.5% population increase over the last decade compares to previous decades.

3. Inner-ring suburbs are also growing quicker than the national growth rate. This may support recent findings that people want denser neighborhoods. It would be interesting to see how much of this growth is due to city dwellers moving just across municipal boundaries (for example, did those 200,000 people who left Chicago move to Oak Park or to Joliet?) or whether this population growth is from people from other areas, such as outer-ring suburbs, moving closer to the city.

4. So where does this leave mature suburbs? They are caught in the middle as they don’t have the open land for sprawl development but also are unlikely to have the denser or taller development of inner-ring suburbs. Most projects will either have to be small in-fill projects or bigger redevelopment projects. It will be interesting to see how these suburbs adapt: they were once outer-ring suburbs but will now have to make decisions about what direction to go.

h/t The Infrastructurist

One possible positive of higher gas prices: less deaths

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For the average American, driving or riding in a car is perhaps their most risky daily activity. So if gas prices go up (with the Chicago region leading the nation) and driving goes down, then less Americans may be killed on the road. This is according to a recent study of Mississippi data:

Traffic accidents seem to go down — even ones because of drunken driving — as gas prices go up.

“The results suggest that prices have both short-term and intermediate-term effects on reducing traffic crashes,” Guangqing Chi, assistant professor of sociology at Mississippi State University and demographer at Mississippi State’s Social Science Research Center, and colleagues wrote.

In their research, published in two recent studies in the Journal of Safety Research and Accident Analysis & Prevention, the researchers looked at car accidents in Mississippi between 2004 and 2008, and tracked gas prices during that period. The prices seemed to affect younger drivers the most in the short-term (over one month) and older drivers and men over a one-year period.

In addition, the investigators found a strong link between higher costs at the pump and a drop in frequency of drunken-driving crashes, they noted in a university news release.

This is data from one state so it would be interesting to see if such relationships hold in additional states.

But these arguments about safety in light of generally negative public opinion (regarding gas prices here) can provoke some contentious conversations. Some members of the public are bound to ask whether the government is most interested in safety or in revenue? The same issue has been raised with red-light cameras and I also ran into similar arguments about particular developments when doing research into the growth of nearby suburbs.

For the average American, would they rather have a higher risk while driving (which they probably don’t think about anyway) or lower gas prices? This seem easy to answer and I wonder if the safety argument will gain any traction at all.

Update on affordable housing debate in Winnetka

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The Chicago Tribune reports on Tuesday’s meeting in Winnetka regarding a proposed affordable housing ordinance. Here is how the comments at the meeting were summarized:

Rick McQuet, a Winnetka resident, said at the meeting that the affordable housing plan is intended to help young families and recent college graduates.

“That young family was me about 15 years ago, a new degree in hand and aspirations of becoming a member of a truly great community,” he said.

Northfield resident June O’Donoghue received applause after she said she opposes the proposal because it interferes with the housing market.

“Housing is affordable to the people who can afford it. That is a simple thing,” O’Donoghue said. “I think you need a referendum for people to vote to see if they want to go through all this social engineering.”

In recent weeks, the plan’s opponents have said it amounts to “hand-outs” for people with lower income that could result in Section 8 housing, decreased property values and increased crime. Supporters have lashed out at the opposition as bigoted, arguing that the plan would allow teachers, clergy and other employees to live in the community in which they work.

Some thoughts about these comments (which may or may not represent everything that was said at the meeting):

1. The first comment I included above is interesting in that it refers to a common understanding of affordable housing in suburbs: it is not about helping the disadvantaged in society but rather “young families,” “recent college graduates,” and often elderly residents of the community. While this may be a good goal for a community (particularly if residents want their own family members in these categories to live in the community), this is a different understanding of “affordable housing.” Perhaps this is what has to be done in many suburbs order to counter the plan’s opponents who are quoted as saying this is really about helping lower-income people. But overall, there are needs for cheaper housing in society beyond people who might fit a profile of a community but simply don’t have the money.

The plan seems to play to this more suburban understanding of affordable housing:

The proposed plan would apply to new developments, in which 15 percent of owner-occupied units must be affordable to households earning at least $75,000 per year, while 15 percent of rental units would be affordable to those earning at least $45,000. Current residents and senior citizens would receive priority, the plan says.

According to the Census, the 2009 median household income was $49,777 so the part of the plan for people making at least $45,000 is still drawing from near the top 50% of American incomes.

2. “Social engineering” is always an interesting term to think about. In finishing my taxes for this year, I was reminded that our tax code is riddled with all sorts of “social engineering” in terms of promoting or incentivizing certain activities. We as Americans value homeownership so we have a home mortgage interest deduction (which some argue should be taken away). We give deductions for giving money to charities. Is all social policy “social engineering” or just policies that some people don’t like?

Battle in Winnetka over affordable housing plan

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The community of Winnetka, Illinois is a northern suburb of Chicago that is quite wealthy: the Census says the median household income is $201,650 (in 2009 inflation-adjusted dollars). The Chicago Tribune reports on a recent debate over a plan to introduce affordable housing to the wealthy suburb:

Winnetka’s plan calls for a land trust to provide for-sale and rental property to those who make far less than the median household income of $201,650.

Under Winnetka’s proposed plan, owner-occupied units must be affordable to households earning at least $75,000. Rentals must be affordable to those earning at least $45,000 or more. Current residents and senior citizens would receive priority.

A lot of suburban communities talk about affordable housing but few propose plans like this. It would be interesting to know how the local government was able to even put this plan forward.

The plan itself describes the change that has occurred in Winnetka over recent years as the community has become even more exclusive:

Over the past several decades, Winnetka has become less diverse in age and income, and it contains a more transient population, according to the plan. The report states that Winnetka lost much of its housing market diversity with the demolition of older, smaller homes that were replaced with larger, more expensive houses. Between 1980 and 2000, the village also lost 262 rental units — a 38 percent reduction — due to the conversion of downtown apartments into commercial offices.

Between 1990 and 2000, the number of homes valued at less than $500,000 declined to 975 from 2,004, according to the report.

“Winnetka’s housing stock increasingly serves only one kind of resident — a family at the peak of its earning years and with school-age children,” the report states.

It sounds like teardowns have become quite an issue.

There has been some vocal opposition to the plan:

“There is plenty of affordable housing in neighboring communities,” said Carry Buck, chairman of WHOA, or Winnetka Home Owners Association. “Most people in Winnetka are conservative and they do not want more involvement from government.”

In a 25-page publication mailed to Winnetka residents last week, the homeowners association called the village Plan Commission’s proposal un-American, predicting it will lower property values, attract criminals and force residents to subsidize those who rely on “hand-outs.”

While this language might be more blunt than what one might typically find in such NIMBY debates, there are plenty of suburbanites who hold such views. Anything that might lower property values or might detract from the community that they bought into is seen as a threat.

The Tribune story suggests that an interfaith group is on the other side of the debate:

The lightning rod for complaints is the Interfaith Housing Center of the Northern Suburbs, a Winnetka-based nonprofit that supports the plan. The center, which advocates for fair and affordable housing and investigates housing discrimination complaints, is accused by WHOA of infiltrating village boards and commissions with “social engineers” who depend on federal funding.

Interfaith’s executive director, Gail Schechter, described the opposing arguments as absurd.

“Social engineering is what got us to look the way we do,” she said. “The way Winnetka looks today is not just pure market forces.”

Sociologists would tend to fall on this side: the suburbs were not just created by people voting with their dollars and feet. Rather, the whole suburban system is upheld by a massive system of government policy (building highways, promoting homeownership, tax breaks or incentives for developers and those with financial resourcse) and cultural values (emphasis on the single-family home and automobiles, an anti-urban bias, a desire to move away from problematic areas, etc.).

It will be interesting to see how this plays out. In my own research on suburban communities, I found such open debates (where each side clearly lays out their intentions and/or fears) to be relatively rare. Additionally, such debates are rarely just about particular development proposals; rather, they are about the broader character of the community. Here, it sounds like the debate is also about the image and status of Winnetka: is it just a upper-class suburb or should it be something different?

Update on “baseball McMansions” in Arizona: White Sox also facing issues

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Yesterday, I wrote about a new spring training facility in Arizona that one writer dubbed a “baseball McMansion.” While this particular park may have issues, it is not the only one. The Chicago White Sox also recently moved to the same area. Because of the economic recession, the White Sox are having attendance issues and the mixed-use development that was supposed to surround their facility has not been built:

Small crowds on the west side of the Valley are an alarming trend as the White Sox and other neighboring teams try to rebound in the wake of a depressed area.

“The opening of the Rockies-Diamondbacks stadium (Talking Stick at Salt River Fields) is definitely pulling people away,” Sox chairman Jerry Reinsdorf said before 10,074 fans attended Wednesday’s game between the Sox and world champion Giants. “Now you have six teams in the east valley…”

But the Glendale area hasn’t developed into what the Sox thought when they decided to move from Tucson after the 2008 season.”One of the attractions to putting this ballpark here was the plan for what was going to be built around it,” Reinsdorf said. “By now, in our third year, we were supposed to be looking at restaurants and retail and a hotel and condominiums. And the guys who were going to do that went broke. So we’re sort of sitting out here by ourselves.

“All of the projections for the Phoenix area growth had Glendale in 10 years being the population center of the valley, a ton of people west of here. And that stopped. But at some point the economy will come back. This is too vibrant an area. And when it does come back, those projections will come true. So it’s just a delay.”

It may be some time before the White Sox and other teams see an uptick in attendance and building as Arizona has been hit hard by the economic recession, evidenced by foreclosures and a slowdown in development. Reinsdorf sounds quite optimistic about the future – perhaps he has to be if he has put a decent amount of money into this project.

it seems like now would be the time to look into why exactly the White Sox and other teams moved to this area. In their projections about Glendale, was their any allowance for a growth slowdown? Was the main draw the growing population in this area or were there certain financial incentives that made this move attractive? And what will happen to these spring training complexes if population growth in this area is limited for a significant amount of time?

Green nimbyism

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NIMBY (Not In My Backyard) attitudes are typically associated with suburban sprawl and McMansions. So what happens when NIMBY is associated with more eco-friendly projects?

Nimbyism is nothing new. It’s even logical sometimes, perhaps not always deserving of opprobrium. After all, it is one thing to be a passionate proponent of recycling, and another to welcome a particular recycling plant — with the attendant garbage-truck traffic — on your street. General environmental principles may be at odds with convenience or even local environmental consequences.

But policymakers in the United States have been repeatedly frustrated by constituents who profess to worry about the climate and count themselves as environmentalists, but prove unwilling to adjust their lifestyles or change their behavior in any significant way…

Robert B. Cialdini, an emeritus professor at Arizona State University who studies environmental behaviors, points to two phenomena:

Humans hew to the “normative” behaviors of their community. In places where bike lanes or wind turbines or B.R.T. systems are seen as an integral part of society, people tend not protest a new one; if they are not the norm, they will. Second, whatever feelings people have about abstract issues like the environment, in practice they react more passionately to immediate rewards and punishments (like a ready parking space) than distant consequences (like the threat of warming).

Based on Cialdini’s ideas, perhaps it will just take one or two of these neighborhoods or locations adopting these projects so that it becomes normative. But who will be willing to go first? And what is the critical mass when such developments become normal?

While some might take this as evidence that certain people aren’t willing to sacrifice for green projects, I think we can take a broader view: in general, Americans don’t like two things that could possibly occur with the construction of something nearby.

1. The state in which they purchased their home or housing unit is altered. The idyllic scene they once bought into may not last forever. Whether this is due to a nearby condo building blocking the view or a new subdivision taking away a once-open field, Americans do not these sorts of changes. They paid money for a particular setting and want to maintain that setting as long as possible.

2. Their property values might be reduced. Because of the amount of money invested in homes plus hopes that many have about making at least some money when selling their homes somewhere down the line plus the amenities that come in living in places with higher property values, property values drive a lot of development decisions.

Developments like these green projects can be difficult to push through, particularly when those in opposition have money or status. Research has shown that typical dirty types of development, like power plants or landfills or public housing projects, tend to get placed in poorer areas where the people are less-equipped to fight back. Could these green projects be headed for similar places?

Suburban mayors look for Mayor Emanuel’s help

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There is often a tension between a big city and suburbs: these communities have different goals and access to resources. With a new mayor in Chicago, suburban leaders say they are looking to work with Rahm Emanuel:

But suburban leaders said Wednesday that they expect Chicago Mayor-elect Rahm Emanuel to recognize that the city he will soon lead and the surrounding communities are better off working together instead of fighting each other.

“I think, with his extensive government experience, he understands that we’re all in this together,” said Elmwood Park Village President Peter Silvestri, whose town is in Illinois’ 5th Congressional District, a seat once held by Emanuel.

Silvestri was among several leaders who also said they were hopeful that Emanuel, who has a reputation as a bare-knuckled political operative, will follow Mayor Richard Daley’s collaborative lead…

Among them is Elk Grove Village Mayor Craig Johnson, who fought bitterly with Daley over the expansion of O’Hare. He said he hoped Emanuel “will respect the concerns of his neighbor and work regionally.”

Emanuel supports  a Chicago casino, an idea that hasn’t gone over well in Des Plaines, which will soon open a casino of its own…

Naperville Mayor George Pradel was another suburban leader who said he hoped Emanuel would maintain a strong relationship with his suburban counterparts.

The Chicago mayor has influence on several issues that concern Naperville, including ongoing plans to build a western bypass around O’Hare and rates for Lake Michigan water, Pradel said. Naperville is the largest suburban user of water from the lake.

As a congressman, Emanuel supported an airport in south suburban Peotone and he has voiced support for extending the CTA’s Red Line to 130th Street — two important issues in the south suburbs.

Perhaps these suburban leaders do want to work with Emanuel but to me, it sounds like they are more interested in getting Emanuel’s support for their interests and projects. Perhaps Emanuel could ask these suburban leaders: and if I help you, how does your suburb plan to help the City of Chicago or the larger Chicago region?

This may be a cynical interpretation but this is the long-running history of suburban communities: many are not interested in regional or metropolitan issues except when they might threaten the quality of life in their immediate community. Going back to the 1890s and 1900s, suburbs stopped wanting to be annexed into the big city as they could provide their own basic services (water, sewers, electricity, etc.) and didn’t want to associate with cities which were seen as dirty and crime-ridden. Today, suburbs thrive on this idea of local rule: local taxes should go into local services, such as public school districts and basic local services such as police and fire. Local or regional projects are often judged on how particular suburban communities will benefit, particularly as it pertains to their tax base and property values.

In the long run, how many of these suburban communities are willing to help Mayor Emanuel?

What to do when development projects, such as HSR, encounter opposition from residents

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This is a common story: a developer, community, or a set of politicians put forth plans for a new development. Some residents or citizens complain that the project will negatively affect them. What is to be done to balance out their concerns versus the plans that have been made? How do we balance the rights of the individual versus the needs of the community?

This is taking place currently in California as state officials continue to move forward with plans for high-speed rail (HSR). According to The Infrastructurist, there are several fronts for complaints: one community suggests the high-speed rail will alter the character of their community and farmers are unhappy that some of their land will split by the tracks.

Within this debate, several themes emerge:

1. A longer and/or bigger view helps provide perspective. In the California case, the start of HSR in the Central Valley looks like a boondoggle because it doesn’t yet connect the largest cities in the state. But it is the start of a network that will expand and eventually provide 2.5 hour travel from San Francisco to LA.

1a. This might help: show that the funding for the later stages in the project, where the Central Valley start is connected at both ends to larger cities, is guaranteed. Otherwise, there might be some worry that this first part will get built and the later funding will dry up or disappear.

2. The time for debate about whether HSR rail is good or appropriate for California is over – it is going forward, particularly since there are Federal dollars committed to this. Yes, these farmers and communities may be affected but they are not going to be able to stop the whole project (unless, perhaps, they get a whole lot more people on their side).

3. The key for those promoting HSR is that they need to continue to focus on the benefits that will come. Some of this is through city revitalization as the HSR serves as a new economic engine. More broadly, it will benefit the state in terms of reducing traffic, provide a quicker form of transportation that flying, and be greener. Yes, people will complain that these are just guesses but then the promoters need to follow through and ensure that HSR actually does benefit the state.

4. Change is not easy. Even if all Californians agreed that HSR was good and it should be pursued, there are always issues regarding making it happen. This is a long-term project that will affect a number of people. The hope is that in the end, it will lead to more good than harm.