- The Option of Urbanism: Investing in a New American Dream
Developers on the Verge of a New Built Environment
Since the early 1990s, metropolitan America has seen a great wave of new investment in downtown and other "urban" kinds of housing. Before the real estate market collapsed in 2007, city after city (and, increasingly, suburb after suburb), from Charleston to Detroit to Los Angeles, saw loft conversions in once-industrial neighborhoods, sleek high-rise condos next to transit hubs and sports arenas, and apartment complexes atop new open-air "lifestyle center" shopping malls. What perhaps began with back-to-the-city gentrification among counterculture types in the 1960s and 1970s blossomed by the late 1990s and early 2000s into a real estate phenomenon unprecedented in postwar Amer-ica: the pouring of big money into relatively high-density, multifamily housing in "walkable" locations.
Christopher B. Leinberger, a well-known [End Page 100] real estate consultant and occasional developer now affiliated with the Brookings Institution and the University of Michigan's graduate real estate program, has long observed this phenomenon, both professionally and as a resident of Atlanta and of Washington, D.C., places that feature prominently in The Option of Urbanism. He has concluded that these new genres of housing represent the leading edge of a shift in how and where most Americans want to—and eventually will—live. He argues that the American dream of a detached suburban house in what he calls a "drivable suburban" environment is being superseded by a new version of the good life: that offered by "walkable urbanism." Unfortunately, Leinberger writes, despite substantial shifts in real estate production over the past fifteen years, conservative structural forces have stifled change, leading to an oversupply of conventional suburbia. A primary goal of this book is to nudge the real estate industry in the right direction by exposing this gap between supply and demand.
The book is organized into eight chapters, along with an introduction and a preface. (The paperback edition includes an additional preface, written in late 2008 or early 2009, that responds to the current depressed real estate market; the main body of the text seems to have been completed in 2007.) Chapters 1 and 2 discuss the genesis of drivable sub-urbanism and outline its distinguishing features. While there is little new for historians, chapter 2 in particular offers a useful overview of the emergence of the edge city, a topic that enjoyed much attention in the 1980s and early 1990s but little since. Chapters 3 and 4 cover the logic of real estate production since the 1980s and rehearse the many familiar limits of this model of growth, from social segregation to obesity to climate change. Chapters 5, 6, and 7 outline the contours of walkable urbanism: where it is, what it looks like, who lives there, its prospects for growth, its benefits, and its potential shortcomings. In the final chapter Leinberger explores some of the tools available for stimulating the production of walkable urbanism, and encourages us to use them.
One of the most illuminating parts of The Option of Urbanism is the discussion, in chapter 3, of long-term changes in the way that real estate development has been financed in the United States. Before the late 1980s, Leinberger points out, most real estate development was financed locally. During the real estate boom of the 1980s, much of the money came from poorly regulated savings-and-loan-type financial institutions (S&Ls), which began engaging in fast-and-loose lending. In the wake of the real estate bust of the late 1980s and early 1990s (accompanied by the S&L crisis and bail-out), developers needed new partners. Regulators in Washington were anxious to avoid the mistakes of the past. Wall Street investment houses came forward with assurances that they would behave carefully. New partnerships were formed, and by 1993 shortages of construction credit evaporated.
The specific requirements of different sources...