The latest new voice suggesting city centers are the place to be: Fitch Ratings.  In what Joe Cortright calls “maybe the most under-reported story of the year” for urbanists, the investment rating agency shows housing demand shifting towards urban centers “in nearly every city analyzed.”

According to Fitch, downtown home values maintained the advantage throughout the crash and recovery.

According to Fitch, downtown home values maintained the advantage throughout the crash and recovery–and show no sign of slowing down:

Significant demand is returning to city centers following decades of suburban and exurban growth. Since 2000, home prices have grown 50% faster in urban centers than in the broader MSA areas, with population growth trends beginning to favor city centers as well. ‘This demand shift implies that city centers will continue to see growth even where regional prices have been stagnant, such as Atlanta or Chicago,” said Director Stefan Hilts.

More supply will come online with Dan Gilbert's acquisition today of the long-vacant Book Building...but only after years of renovation.

More supply will come online with Dan Gilbert’s acquisition today of the long-vacant Book Building…but only after years of renovation. (photo by Flickr user gab482)

As Cortright points out, this is a powerful signal that the market wants not just more housing in our great urban neighborhoods–it wants more great urban neighborhoods. I previously covered that survey by the National Board of Realtors showing that 25% of Americans are living in single-family homes even though they’d prefer to live in an attached home in a more walkable neighborhoods: the report from Fitch shows people are willing to put their money where their mouths are.

This is why it’s so important that we invest in placemaking, in “Redevelopment Ready” practices, and in transportation choices like transit, biking, and walking. Michigan can’t afford to go slowly when it comes to bringing our supply of great places up to where the demand is.

When my wife and I bought our home, we were hoping to find something like a duplex or condo in walking distance to downtown Ypsilanti–to no avail. While there were dozens of single-family homes available at the time, only one duplex came up in 6 months of looking, and the condos available were all in complexes on major roads towards the edge of town. We ended up in a single-family home as the best-available choice, rather than because it was what we really wanted.

A new study by the National Association of Realtors and Portland State University suggests this is a common problem. Among other topics, their Community & Transportation Preferences Survey of 3,000 adults across the country’s metro areas looked at the homes (and places) people live in currently vs. the homes they’d like to live in.

A full 25% of respondents reported that they currently lived in detached, single-family homes, but would prefer to live in an apartment, townhouse, or condo in a more walkable neighborhood.

NAR_HousingMismatch_July15Even though I’ve personally suffered from this particular failure of the housing market, this number is still surprising and significant: 1 in 4 adults living in our major metro areas would give up their single-family home to live in a more walkable neighborhood.

So why don’t they already live there?  The NAR study doesn’t delve into that question, but it’s a safe bet that lack of available supply plays a role.  The survey shows that nearly half of respondents, across age groups, would prefer an “attached” home in a walkable neighborhood over a single family home that requires more driving.  Yet across Michigan’s metro areas, only about 30% of housing units are attached of any kind, and a large share of those are in locations that could hardly be called “walkable”: massive complexes of bland beige-carpeted apartments sandwiched between strip malls on busy arterial roads are not what these respondents have in mind.

As further evidence of this supply/demand mismatch, where we do have quality multi-family home options in walkable downtowns and neighborhoods, Michigan is grappling with affordability problems: whether Midtown Detroit, downtown Grand Rapids, or downtown Royal Oak, housing options are scarce but highly sought-after, and prices are rising accordingly. Nearest to me, downtown Ann Arbor apartments are now leasing for as much as $2,000 per month, for a single bedroom: even the hundreds of new apartments being built every year can’t seem to make a dent in the pent-up demand for this living option.

While much coverage of the study focuses on millennials, the findings appear to hold up across generational cohorts:

Across generations, about as many Americans want attached homes in walkable locations as want detached homes in conventional developments.

Across generations, about as many Americans want attached homes in walkable locations as want detached homes in conventional developments.

Realtors obviously have a direct role in getting people into the homes they want, and when they say “more and more homebuyers are expressing interest in living in mixed-use, transit-accessible communities,” they’re in a strong position to know what homebuyers want, and how the market is failing them.  Helping to correct this market failure and create more of the places that people wish they were living in is one of the most important outcomes that our placemaking work can have.

Big box stores can have second lives, as Westland's Circuit City to City Hall renovation, completed in 2014, demonstrates.

Big box stores can have second lives, as Westland’s Circuit City to City Hall renovation demonstrates. (top: League staff, 2015; bottom: LoopNet listing, 2012)

In 2012, the City of Westland set aside plans to build a new city hall–the long-needed replacement to a ’60s vintage building that was literally rotting from a high water table–in favor of buying and renovating an abandoned Circuit City on Warren Road.  This choice saved nearly $5 million (a third of the original budget!) while netting twice as much square footage, allowing the city to consolidate its cable channel, Youth Services, economic development, and other functions into a single building. As a bonus, the city has one fewer vacant and blighted property to monitor.

Summit participants offer their ideas for the vacant parcels next to Westland City Hall.

Summit participants offer their ideas for the vacant parcels next to Westland City Hall.

This success story made Westland City Hall the perfect venue for the League’s first Suburban Summit, with teams from suburban communities around southeast Michigan gathering to discuss strategies for helping their neighborhoods and commercial corridors mature and adapt to changing societal needs. (A second summit was held the next day at Fifth/Third Ballpark in Comstock Park for West Michigan communities.)

Ellen Dunham-Jones leads discussion of strategies for dealing with shuttered shopping malls.

Ellen Dunham-Jones leads discussion of strategies for dealing with shuttered shopping malls.

Georgia Tech’s Ellen Dunham-Jones (watch her TED talk!) joined architect and Birmingham City Commissioner Mark Nickita to lead discussion of the possibilities for updating the commercial corridors and neighborhoods of the last half century to meet the growing demand for walkable communities and a wider variety of housing choices: as families with school-aged children become a smaller share of households, communities must offer some draw beyond the formula of a good school district and single-family homes with enough bedrooms. This formula worked from the 1950s through the 1980s, when Baby Boomers and Millennials were growing up, but we know that the preferences of those demographics have shifted to living in places with more, well, place to them.

While those post-war suburbs are starting without some of the assets that support placemaking in older downtowns and neighborhood nodes, they have a huge asset in their huge, single-owner commercial parcels.  As Nickita pointed out, a vacant Kroger and its expanse of cracking parking lot may offer the same acreage as all of downtown Plymouth, or the entire Mackinac Island townsite, with relatively few complications standing in the way of implementing a new strategy.  A single large commercial parcel can therefore support the creation of an entire new walkable, mixed-use neighborhood center, without any changes or disruption required in the surrounding area.

This is by no means a fast or easy process, but a committed city with engaged private development partners can combine complete streets, green infrastructure, good urban design, careful market research, and updated policies to provide their residents–new and old–with the sense of place that will serve them for the next few generations.

We’re proud to be part of Michigan’s leadership in building on place, but that doesn’t mean we’re content to rest on our laurels or pretend we’ve got everything figured out.  We’re still learning as we go, and updating our practice as we figure out what’s working well and what needs more attention in our communities.  As a result, many of the projects in this year’s third cycle of the PlacePlans program look very different from the initial pilots!

Yesterday, at the Building Michigan Communities conference, I was joined by some of our on-the-ground partners to talk about the different types of projects we’ve undertaken, and how the program has grown:

Allegan's first phase of construction shows the evolution from the vision created during their PlacePlans design process to the nuts and bolts of engineering considerations.

Allegan’s first phase of construction shows the evolution from the vision created during their PlacePlans design process to the nuts and bolts of engineering considerations.

Rob Hillard, city manager of Allegan, hosted one of our first PlacePlans projects: in 2012, we first teamed up with the team of physical space design experts from MSU’s School of Planning, Design, and Construction to look at the City of Allegan’s downtown waterfront. Allegan is one of our best-case scenarios: less than 6 months after the PlacePlans team wrapped up work, local voters approved removing $500,000 from the city’s sinking fund to seed implementation, and the city was able to leverage that to secure another $567,000 from other sources: the city is currently out to bid for the first phase of construction, which will create a public plaza with stage and amphitheater while “both reducing and improving parking.” Even while we see this as a successful move from our work to results, watching Rob’s follow-through helped us understand how we needed to look at funding scenarios–and getting potential funders involved–early in the process to support that transition. With that in mind, we’ve kept Samantha busy in her new role as President of the League’s Foundation.

We also decided that, while the design process worked well for Allegan, it wasn’t the type of support that many of our cities were stating a need for.  Laura Lam, community and economic development director for Kalamazoo, talked about her experience in the second round of PlacePlans, when we assembled teams of private consulting firms to address targeted needs in some of our cities.

LSL's transportation expertise helped Kalamazoo weigh trade-offs within the existing bounds of Portage Street.

LSL’s transportation expertise helped Kalamazoo weigh trade-offs within the existing bounds of Portage Street: the city will be undertaking a trial reconfiguration of the street this summer in advance of a planned reconstruction.

The City of Kalamazoo is acting on several of the recommendations from our work, but perhaps the biggest impacts will come from the engagement of the neighborhood’s anchor institutions, such as  and Bronson Hospital, which has committed to reduce driving and parking demand to their campus and is hiring a bicycle coordinator in support of that goal.  To make those connections, we had to change directions mid-stream in our work to catch up to and coordinate with related discussions that KVCC was hosting around the development of their new Healthy Living Campus. This year’s approach to our work in Saginaw is strongly shaped by that experience: sometimes all the right pieces are already on the table, and figuring out how to put them together is more important than bringing anything novel.

Berkley addressed ambivalence over turning a downtown street into a festival plaza by jumping in and trying it out.

Berkley addressed ambivalence over turning a downtown street into a festival plaza by jumping in and trying it out.

Finally, Sarah Szurpicki, a partner with New Solutions Group, talked about the projects that her team facilitated in Berkley and Utica last summer. These two cities had pitched us projects that we liked, but that weren’t quite ready for the full PlacePlans approach, so we engaged Sarah to help them road-test some ideas. Not only did this help the cities figure out where to take these project, but our experience with those cities’ stakeholder groups helped us organize community members better in all of our projects: we’ve added a “community steering committee” to most of our PlacePlans this year, to make sure we’re not missing any voices or opportunities. Additionally, these two cities reinforced that small-scale efforts need to be exceptionally focused: Berkley’s project gave clearer direction for next steps because it was tightly focused on a single downtown block.

We’ll probably never do PlacePlans the same way two years in a row, and that’s a good thing: it means that, even with our successes, we keep figuring out how we could do better with the next one.