We Design Economic Spaces for Everybody.

Kevin S. Crowder, CEcD, EDP

December 5, 2022

"So I'm here to talk about the economics of density, but what I'm really going to cover is the economic development profile of density because we're not gonna sit up here and bore you with a bunch of formulas and numbers and feasibility profiles and return on investment theory and that stuff. What we're going to do instead is talk about some reality checks. I'm talking about hopes and dreams, and public policies and goals.

That's what you have. You have public policies and goals. You have things as elected officials you want to accomplish and things as administrators you want to implement, that reach those hopes and dreams of your community as envisioned through your elected body. So, one thing is you have to think about is how do you reach authentic success?

Okay, you have to have a balance. And so, if you think about these three things I'm going to talk about, cities, successful places, attractions, brands... it can be Airbnb, it can be Disney, it can be your community. You have to have a balance and it's a unique balance to your place. It is a balance between financial and market feasibility, regulatory efficiency and identity and brand. You have to find that right balance in regulatory efficiency, and one of the several tools that you have in there is density to help with that, finding that balance for your success in achieving your public policies and goals. And some of those, they have to do with the fears, we're going to talk about them, and some of those have to do with the financials. Okay. If your community won't have a conversation about density, then just at the beginning you took away one of those tools that might be necessary to get the balance to achieve what you want.

Time for our first reality check, which is, you know, communities are either improving or declining, they're never in a state of remaining in one place, as much as some may want them to. Places are never, ever as good as the way we remember them at their best, in the old days, or when we first found them.

So what are the things we hear about, what are the things we look for in economic development when we come into a community to help it improve, what are those common themes that we hear? I went back and looked at the surveys and the meetings and the conversations we've had in a lot of communities. At least 60 Florida communities. Will density stop you from achieving what your community wants, how it wants to improve? What do we hear: We need more activities. We need more community events. We need the flavor of the month retailer, that you know at one time Starbucks, then we wanted a Cheesecake Factory. And then we wanted Trader Joe's and then we wanted Wawa. First off, you know, none of those are locals and we're going to talk about locals in a minute. We want to attract tech, because now we think we're the best place for tech and tech will save our economy. We want millennials, and we think our no-density community is the best place in the country for them, that we are the place they want to be. We want more restaurants. We want more things to do. We want an innovation economy. We want places to work. We're not safe enough (we need eyes on the street). We're not clean enough. We're not attractive enough. We're not affordable enough. Out of that list, does density help or hurt a community's ability to achieve those items? It's a rhetorical question.

Often one thing we're hear a lot is we want what I call that flavor of the month retailer. We want more retail. We want a better grocery store, or we want a grocery store to begin with. We don't want to drive so far to buy things. Well, the next reality check is that you as cities, you don't get to pick your retail. Retail picks its cities. If you're not being picked for what you want, you have got to figure out why. But then you also have to figure out what you can do to improve your position to be picked for what you want. So, think about what happens with that decision. And then you take density off the table because we won't talk about it.

So then there are some fears and misunderstandings that come with density, like scale, changes to community character, and traffic. Those are some of the big ones. You know, first, scale. Density doesn't mean tall. It doesn't mean housing projects. It doesn't mean urban; it doesn't mean crime. It means proximity. Proximity of people. Human engagement. Density can also improve design feasibility, but you have to be able to say no to the easy way out and you have to set and stick to your standards.

Density is how cities functioned for 1000s of years until the car took control and you drove your downtowns out of business.

Another fear… You just know that it's going to be too crowded; well crowds are what drives engagement, social offerings and innovation. Crowds are customers, crowds visit locally owned businesses. You know the changes in community character, affordability is the first one we hear as two different fears: Either that it will get where I can't afford to stay here, or it will become affordable for people we don't want to move here. Well, a lot complain about affordability, and we hear a lot of resistance to this. The simple, basic fact of affordability when it comes to housing is supply, the supply and demand dynamic. But the fact is there's not enough supply. The only way, you're wasting your time having discussions and complaining about affordability, if you're not acknowledging that the foundation of trying to fix it is increasing the supply. You also have to have a healthy mix. You have to have a healthy mix of housing, different types, different price ranges, and you have to have a healthy mix of businesses.

You know, it used to be every community they had a hardware store, they had a grocery store, they had women's and children's and men’s shops and shoe stores, toys, and more. There are 20 different types of traditional downtown businesses, we call them the butcher the baker and the candlestick maker. Well, now all they are all departments at Walmart. Your market is gone. It drove away in a car. Your car.

You know, your downtowns are not places where people want to be anymore. You've got to make it that again. So, the next reality check is that economic development is inevitable, but where it occurs is not. So economic development is about making places people want to be.

You know downtowns used to function, and that meant activity and engagement. How do you create places people want to be? You do it through aesthetics and how it looks and feels. You do it through activities and social offerings and opportunity for people to engage with each other. And you do it through openness, being open and welcoming. Again, creating a place people want to be, you know, go back, think historic preservation, you know, go back old school… density and walkability and local ownership.

You know, all these chain stores. They're just sucking the capital out of your community. They're not local businesses, and they're not leaving a dime in your community that they don't have to.

And then the last fear is traffic. You already live in traffic, especially if you're not living in a dense place. You know what low density drives. It's it drives car dependence, which drives sprawl. You know, sprawl drives chain businesses, chain businesses killed the demand for local businesses and chain businesses suck the capital and wealth out of your community. This to me is the most maddening and ridiculous part of the density discussion. People spend more time in their cars than their homes because they're scared of the possibility of one extra car on a street near their home. Their empty home. Because they are 30 minutes away giving their money to a chain store that will send it to the corporate mothership's bank in another state.

Which is what every national retailer or chain bank or all of those types do. They're funneling more and more of your money back to headquarters and back to their shareholders. It's just economic extraction, they're mining your towns for your wealth. You have turned, through this resistance to density, to a desire to satisfy and quieten five loud voices, you have turned us all onto dependence on the car that has driven sprawl. You've transferred control over your community’s commerce to outsiders.

So, the economic cycle, when we get to the economic balance, you know, there there's a trade off in the benefits and the costs. And that tradeoff is going to be a unique perspective of every single person in the community, in part dependent upon when they established themselves in your community and how their individual lives have evolved once they got there. Newcomers compared to old timers are going to have different views of that tradeoff and if you're in the leadership position, you have to balance all those different voices.

Density is a cause and a consequence of the evolution of cities. You have a place that has high productivity, activity, amenities, you created a place, a place people want to be, which leads to migration and people coming and that drives housing prices up. Housing prices go up, developers come in, they realize that 'I've got to increase my capital to land ratio'. That means 'I have to build a bigger building'. Your city and your leadership have to not settle and give into that developer on the things that protect your community character, which is not density, rather things like design and scale, to make sure you're extracting the standards and the public benefits and the things that you need to achieve to answer that list of community wants.

But then that building increases in the cost per square foot, so the residents end up in smaller spaces. Smaller spaces in those larger buildings. It leads to an increase in density. But what do you get out of that density? Density is geared towards local ownership. It generates more revenue for public enhancements, much higher property values per acre and taxable values per acre compared to sprawl.

Density is cheaper and more efficient to build. It's cheaper and more efficient to maintain. It's easier to encourage energy efficient construction. It makes it easier for you to raise and maintain your standards and not settle which is what sprawl forces. It facilitates community, it reduces travel distances. You know, it improves access to goods and services through the market enhancement and efficiency that it creates. It encourages innovation by creating these collisions and these engagements by people that would normally not meet up with each other. It improves economic feasibility, not just the feasibility of the housing investment, but overall economic activity, and boosts productivity.

Now I understand density is not for everybody, you know, it's a lifestyle choice. And you want to own it from a bigger perspective. So, it's not about forcing everyone to live in higher density buildings or live in apartment buildings. Some people still want a home with a yard and not to live around other people. Some people even do not want to see their downtowns revitalized and improved. You still control the character of your community. You know, and you want to create, to try and do the best that you can to create that opportunity in your community for people to succeed and be able to make those lifestyle choices, on where and how they want to live, on their own terms and preferences."