Urban Residential Land Redevelopment: Catalyst or Tag-along?

Submitted by Ben Beckman on Sat, 01/15/2005 - 22:43.

Does residential real estate development play a significant role in economic development? In effect, my question is whether real estate development can serve as a catalyst for the transformation of citzens' economic condition or whether it is merely a lagging indicator of other successful economic development activity such as job creation. Can a builder/developer be a source of added economic vitality to the community, or must the community's value be raised by other means before his/her activities can be supported?

Building attractive, sustainable, affordable housing for the workforce may contribute to the quality of the built environment, but can the working people who make up the region support such housing development without adequate jobs, etc.? Without adequate schools, shoppinng districts, public safety, etc. in the area of activity, can a developer connect with a market which will cover the costs of doing business? Since the medium- to large-scale real estate developer is committing resources in advance of sales, success seems to depend upon the a priori existence of a buying public that 1) desires to live in the region and 2) has the financial means to pay for the product and give the developer a return on capital invested.

Considering Cleveland's residential neighborhoods as places with gaping holes in terms of quality and connectedness, how can a real estate developer proactively create a market which both wants the housing and can pay for it? I know land prices are a huge deterrent, but that brings me back to the question of creating the market which can pay these costs and wants to do so. Is there any marketing advantage which urban neighborhoods can exploit to compete with outlying areas? It seems like the majority of ideas about developing comparative advantage involve alterations to the quality or content of commercial and governmental spaces. Are these "public" alterations necessary precursors to any improvement in the quality of the "private" spaces of the residential areas away from the main thoroughfares?

If "public" alterations to the built environment are not upstream requirements of residential innovation, I think the key to filling the gaps in our semi-vacant blocks will be in differentiating the urban residence as a unique good. To be successful as a locus of fresh economic development energy, the urban residence will have to be explained as a good in its own right, not merely in relation to its proximity to other attractive features of the enviroment. I can't see my way clear to how this notion can be articulated beyond moral platitudes, and moral platitudes don't convince homebuyers. (I should note that I am excluding "luxury" housing, where expensive amenities can act as a marketing draw in their own right.)

How can the notion that sprawl is "bad" or even "costly" be translated into buying pressure which understands and accomodates the financial difficulties of redeveloping urban land for residential use? In an economic environment where people can be persuaded to pay twice as much for admittedly good designer coffee, is there anything which the urban infill developer can do as an independent actor to prompt demand? It seems as though most of the players in the non-luxury segment of the Cleveland market have adopted a low-cost strategy which puts units of housing in the ground, but which sometimes falls short of being attractive or sustainable.

I've been tugging at this knot for quite some time now and have thought myself into a box full of despondency. I may be theorizing without enough grounding in the reality of the situation, but it doesn't seem that the market is driving widespread overhaul of vacant land in residential neighborhoods. It also seems as though what is being done in the field is not being done with a lot of input from the sustainability movement. Finally, developers do not seem to be creating innovative, unique housing solutions that go beyond mimicking the product provided in outlying communities.

I wish I had a better connection to people who are thinking about these issues, to data which accurately describes whatever market is available and to anything which would help me connect to the process of knitting these urban neighborhoods back together. It'd be great to share in a community of others with hopeful perspectives even in the face of the real obstacles here.