All posts in “News”

Growing an Inclusive Innovation Ecosystem

As our cities become more dynamic, the growth of an inclusive innovation ecosystem is essential to ensuring that all residents are able to access a better economic future.

 
In cities across the country, innovation ecosystems are coalescing in places with large employment bases, strong institutional anchors, and diverse mix of uses that prioritize a high quality of life.
 
New York City is home to several of these clusters – including Flatiron, Lower Manhattan, downtown Brooklyn, and Long Island City. Across the city, over 322,000 people are directly enabling, producing, and facilitating the technologies that drive the industries at the city’s core – advertising, media, finance, fashion.

HR&A worked with the Queens Borough President’s Office to develop a roadmap for growing in inclusive innovation ecosystem in Western Queens.

 
With this plan, Western Queens, which employs 8,400 people, is well-positioned to transform into a full-fledged tech district. By commissioning a strategic plan, the Borough President aimed to keep Western Queens competitive while ensuring that the growth of the local innovation ecosystem could generate meaningful economic mobility for all local residents, including the 20% who live below the poverty line today.
 
In developing strategic recommendations for Western Queens, HR&A utilized a planning framework structured around People, Place and Programs to support inclusive growth of the local innovation ecosystem. The framework focuses on providing educational and employment opportunities, creating tech-friendly places, and promoting programs and incentives that make tech-supportive investments and job creation possible.An imperative for growing any successful place is to ensure that people can learn, create and innovate. In Western Queens, this means working with educational institutions and existing tech employers to create a stronger pipeline for connecting disadvantaged residents to tech training and jobs in a sector that is ripe for growth.
 
Communities looking to grow their tech ecosystems should also consider making place-based investments to create a physical environment that promotes and supports growth. Indeed, a successful tech district must be attractive to tech talent, employers, and residents. Density of activity is essential for generating interest among companies, as it encourages the informal, serendipitous connections that are the linchpin of collaboration and innovation. Additionally, tech companies, drawn to places by presence of talent, also seek affordable office and production spaces with digital connectivity. In Western Queens, we recommended strategic place-based investments designed to leverage existing concentrations of tech ecosystem assets – education institutions, production zones, and buildings desired by tech companies.
 
Finally, the development of tech-supportive programs is essential to support an innovation district. A district’s organizational infrastructure, tailored to address the area’s specific opportunities and challenges, represents the connective tissue that makes a district more than just a place. With its wealth of tech talent and existing tech activity, Western Queens would benefit from strategic actions and activities to help differentiate it from other New York City tech districts and better engage the community to build a more robust homegrown tech workforce.
 

THE ROAD AHEAD

Our work with Western Queens resulted in a plan with 21 specific actions to grow an inclusive innovation economy in Western Queens. As a first step, HR&A’s Roadmap recommended that a group of key stakeholders form a Western Queens Tech Council charged with creating a strong, tech-focused brand for the neighborhood, and coordinating events, networks, and resources to increase the district’s visibility and attractiveness to the tech ecosystem. The Council, whose creation was announced on June 28, 2018, will strategize to create and tech-supportive incentives tied to performance metrics to ensure that the growth of Western Queens tech economy directly funds local, high-mobility jobs and workforce development efforts.
 
As the area’s leaders come together to grow the local tech ecosystem, they must do so with an eye towards ensuring that the 20 percent of local residents who live below the poverty line are given every possible opportunity to participate in and benefit from this growth. Implemented holistically, the strategic initiatives in the roadmap can meaningfully shape Western Queens’ growth and secure its future as one of New York City’s most desirable tech districts.
 
If you’d like to learn more about how you can attract tech investment to your city -reach out to our urban tech practice leads Kate Wittels, Danny Fuchs and Bob Geolas.

Mayors Rebuild Puerto Rico

On September 20th, 2017, Hurricane Maria made landfall on Puerto Rico. Electricity was knocked out across the island and the accumulated damage was widespread and unprecedented. Already burdened with weak physical and economic infrastructure, the island is still struggling to restore basic services and recover from the staggering storm-related death toll, which is in excess of 4,600 lives.

 

To support those on the front lines of recovery, HR&A has partnered with the Open Society Foundations to design, manage, and execute the Mayor Exchange, a peer exchange and technical assistance program to improve the capacity of and resources available to Puerto Rico’s mayors. Through the exchange, we have matched 14 mayors from the US mainland with 14 Puerto Rican mayors to create a network of support through knowledge sharing and a series of reciprocal visits.

 

The Exchange also facilitated two day-long technical assistance workshops to build the capacity of Puerto Rico’s mayors and municipal staff on topics such as resiliency planning, fiscal health, and economic development.

 

 

HR&A’s is honored to be leading the charge on this work. “We are already making an impact,” says partner and lead of the Inclusive Cities practice, Andrea Batista Schlesinger, “influencing the ways Puerto Rican cities think about resilience, bringing mayors across party lines together for the first time to advocate for their interests, and offering technical assistance that would otherwise be unavailable. It’s work to be proud of, but the needs are so profound that we are but scratching the surface.”

 

The Exchange is co-chaired Mayor Pedro García Figueroa of Hormigueros, Mayor Javier Jiménez Pérez of San Sebastián, and former Mayor Mitch Landrieu of New Orleans, whose deep understanding of the important role that mayors play in leading their cities through recoveries from disaster has been an invaluable resource to this program. See below for the list of mayors matched to date.

 

 

Puerto Rico Mainland US
José Santiago Rivera, Comerío Rahm Emanuel, Chicago, IL
Roberto Ramírez Kurtz, Cabo Rojo Gary McCarthy, Schenectady, NY
Nelson Torres Yordán, Guayanilla Jorge Elorza, Providence, RI
Ángel Pérez Otero, Guaynabo Tom Tait, Anaheim, CA
Pedro García Figueroa, Hormigueros Mike Duggan, Detroit, MI
Carlos Delgado Altieri, Isabela Stephen Hagerty, Evanston, IL
Julia Nazario, Loíza Rahm Emanuel, Chicago, IL
Jesús Márquez Rodríguez, Luquillo Chris Cabaldon, West Sacramento, CA
Jorge Márquez Pérez, Maunabo Catherine Pugh, Baltimore, MD
María Eloisa Meléndez Altieri, Ponce Mitch Landrieu, New Orleans, LA
Carmen Yulín Cruz, San Juan Jim Kenney, Philadelphia, PA
Javier D. Jiménez Pérez, San Sebastián Mark Stodola, Little Rock, AR
Bernardo Márquez García, Toa Baja Paul Soglin, Madison, WI
Luis Javier Hernández Ortiz, Villalba Ravinder Bhalla, Hoboken, NJ

 

Interested in learning more about the program? Contact Partner Andrea Batista Schlesinger.

Martha Welborne Joins HR&A Advisors to Lead Transformative Urban Projects

Martha Welborne Headshot

“Martha’s exceptional career as a civic change-maker and her wide range of interdisciplinary skills are unique and perfectly complement our work to bring large, complex transformative projects to life. HR&A gives her an international platform to continue to shape the character of urban life in Los Angeles and beyond.”

 

– John Alschuler, Chairman

 

We are delighted to welcome Martha Welborne to HR&A as a Senior Advisor to the firm and our clients. For over 30 years, Martha’s impressive career has spanned the country, with a focus on complex development and mobility management in Los Angeles. Martha will join Partners Paul Silvern, Amitabh Barthakur, and Judith Taylor in HR&A’s Los Angeles office, advancing our mission to improve quality of life in one of the world’s great cities.

 

“HR&A is an amazing firm that takes on the most complicated, seemingly impossible, urban problems and always finds winning solutions. I am delighted to take on the role of Senior Advisor with this incredible team as our goals are perfectly aligned. “

 

–  Martha Welborne

 
With experience in the private, public, and nonprofit sectors, Martha has spearheaded some of Los Angeles’ most innovative public transportation and revitalization projects in recent history—including the installation of the county’s first rapid bus lines and the redevelopment of the Grand Avenue corridor. Most recently, Martha was the Senior Vice President of Corporate Real Estate for the Walt Disney Company and served as the Chief Planning Officer at the Los Angeles County Metropolitan Transportation Authority, where she was responsible for planning the long-range mobility future of the county.
 

Martha began her career as an architect and planner, working on both individual building design and large-scale projects at Skidmore, Owings & Merrill LLP and Sasaki Associates, Inc. She has served on the board of the Exposition Metro Line Construction Authority and as President of the Los Angeles Chapter of the American Institute of Architects. Martha is a former member of MIT’s Visiting Committee for the Department of Urban Studies and Planning, the Board of the Community Foundation Land Trust, and the Board of Councilors for USC’s School of Architecture and for KUSC.
 

In addition to her role as Senior Advisor at HR&A, Martha will also serve as Project Director of LA Aerial Rapid Transit Technologies, LLC, the first permanent public transit link to Dodger’s Stadium since it was built nearly 60 years ago.
 
Please reach out to welcome Martha to the firm at MWelborne@hraadvisors.com.

Working Better, Together: Improving Joint-Development Agreements for Transit-Oriented Development

For transit agencies, joint-development projects can look like an easy win. Agencies can extract value from their incredible real estate assets, enliven station areas, and boost farebox revenues from new riders. Developers also have much to gain – incredible locations, built-in foot traffic, unique uses, etc. – but the complexity of partnering with a transit agency through joint-development agreements can leave them slightly wary.

These concerns usually stem from the increased difficulty, time, and costs typically associated with joint-development. But, transit agencies can offset these risks and increase value by building greater confidence with developers – establishing clear expectations, minimizing delay from process, and sharing an appropriate amount of risk for necessary improvements.
 
Earlier this year, we sat down with the Washington Metropolitan Transit Agency (WMATA) and a group of local real estate developers to discuss how each party could create better opportunities for successful joint-development agreements. The agency is a leader in advancing joint-development since it began rail service in 1976. Now, under the leadership of Nina Albert, Director of Real Estate and Parking, WMATA is continuing to push innovative approaches toward leveraging its real property to build ridership and create value for the agency.
 
Our conversation was enlightening and productive, revealing concerns and seven practical solutions that can increase confidence and create better outcomes for both parties.
 

1. Signaling: Policies and Support for a Feasible Concept

To attract development partners, transit agencies can start by defining their expectations and requirements through a set of clear policies, procedures, and development guidelines. This reduces uncertainty and helps developers understand the costs of requirements like transit infrastructure, parking, and affordable housing.
 
Understanding the real estate market conditions and gaining support from the local community and municipality is paramount before pursuing development. This step is crucial for decreasing the risk of project derailment – especially where there are community pressures and concerns about density, gentrification, displacement, and congestion. This involves identifying a range of feasible development concepts through a market analysis, along with generating support from local communities and authorities through well-thought out, community-driven planning.
 

2. Procuring Better Odds

An ideal procurement process allows developers to deliver higher-quality responses with strong financing proposals. To get the most out of a procurement, agencies can increase the number and quality of respondents by reducing the difficulty and cost burden of the solicitation process. 
 
One strategy includes employing a two-step solicitation process – a request for qualifications followed by a request for proposals – that narrows the field of respondents to a small group of well-qualified candidates.  Rather than developing detailed proposals against an unknown and/or large field of competitors, respondents can better justify investing the time and resources to respond to a much more rigorous Request for Proposals with a unique offer that is truly the right fit.

 

3. Empowering Teams to Work at the Speed of Development

Once an agency selects a development partner, the development team must be empowered to “work at the speed of development.” To reduce the risk of missing a favorable property market, transit agencies must enable their development staff to make routine decisions along an established timeline that is responsive to private sector. Also, teams should be positioned to addressed unexpected obstacles without delay by bringing key transit agency decision-makers (real estate, rail operations, bus operations, safety, etc.) to the table when meeting with development partners.

 

4. Leveraging Outside Real Estate Capacity and Support

To execute tasks confidently and quickly and inform key decisions, transit agencies need reliable information and analysis. While transit agencies regularly communicate and work with private developers to increase ridership and promote transit-oriented development, a trusted real estate advisor can provide support, capacity, and expertise to pursue more advance real estate tasks including the negotiation and structuring of complex public-private partnerships. When transit agencies can rapidly increase capacity and make data-based decisions in partnership with a real estate advisor, development partners trust that a fair and timely deal can be made.

 

5. Increasing Demand Through Placemaking

In WMATA’s case, many of its remaining development sites don’t attract enough foot-traffic or activity – think stations surrounded by huge surface parking lots in suburban locations. To increase the desirability of dormant sites to potential users and developers, WMATA and other transit agencies can direct resources into placemaking. A particularly innovative approach could involve sponsoring a Business Improvement District focused on site activation and branding during the initial years of a new development.
 

6. Sharing Risks: A Partnership for the Necessary Infrastructure

Many large sites with development potential often require a significant infrastructure investment to support new development. These costly up-front investments are a large financial risk for developers, however transit agencies – in partnership with local municipalities– can help address this risk and cost burden. Solutions might involve working with the municipality to provide the infrastructure financing for  and creating a tax increment finance or special assessment district by which the eventual development reimburses the costs.  Alternatively, transit agencies themselves can explore strategies for establishing a revolving TOD infrastructure fund to enable co-investing in projects that create value and ridership for the agency.
 

7.  Creating a Toolkit for Success – Structuring the Deal

Ground leases for joint-development are complex documents that must address numerous uncertainties about the future real estate market. Ensuring that the terms and conditions are reasonable for both sides can be a drawn-out affair, and mistakes can be very costly. By creating a familiar, financeable ground lease template from a particularly successful joint-development, transit agencies can create a replicable and market-tested toolkit that reduces uncertainty for development partners, expedites the negotiation period, and enables a fair allocation of risk and value.
 
~~~
 
Executing a successful joint development project is inherently challenging as agencies balance the needs of transit riders while also creating commercial development opportunities to attract new riders and revenue.  But, getting this balance right can reap considerable rewards and an opportunity to provide incredible benefits for agencies, developers, neighbors, and riders.

 

As transit agencies look to build more transit-oriented developments through joint-development agreements, it’s important to consider best practices for minimizing risk for themselves and their development partners. By ensuring internal process are well-communicated and designed to reduce obstacles and delays, transit agencies can use joint-development as a tool to maximize value from their real estate assets and achieve shared development and policy goals.

 

Thanks for reading! If you’re interest in learning more about our joint-development and transit-oriented development advisory services, contact Stan Wall to discuss how HR&A can help your organization navigate the joint-development process.

HR&A Partners with WeWork to Evaluate its Economic Impact and Define the Future of Work

Technology is changing the way we work faster than ever before.

In the past, workers typically worked for a single company and businesses generally operated from a single office. Today, 36% of American workers are either freelancers or entrepreneurs. Businesses are following talent back to urban areas and increasingly operating from multiple locations around the world and even within the same city.
 

WeWork is at the forefront of this change.

Since its founding in 2010, the company has revolutionized the way people work and created a community of over 250,000 members around the world. While WeWork’s growth story is clear, the impact it has on members, neighborhoods, and cities had yet to be quantified. HR&A Advisors partnered with WeWork to get a better understanding of its influence by assessing the company’s economic impact in three major cities: New York, Los Angeles, and Chicago.
 
Building on our experience assessing the economic impact of the Tech Ecosystem in New York City, the film and post-production industries and disruptive technologies like Airbnb, we measured WeWork’s impact using sales and census data from WeWork and publicly available data from the Census, Bureau of Labor Statistics, Bureau of Economic Analysis, and the Kauffman Foundation. This granular approach enabled us to examine WeWork’s impact at the member, neighborhood, and city level.
 
Among our favorite findings from the study, we found that:
 

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Source: WeWork, HR&A Analysis

 

Read the full report on WeWork’s website.
 

WeWork’s impact is undeniably significant and has far-reaching implications for how cities approach economic development. How can cities partner with innovators like WeWork to recruit new businesses? How can public schools, universities, and workforce developers tap into resources like WeWork’s Flatiron School to train the next generation of talent? What will the future of work look like and what, if anything, should cities and economic development agencies do today to shape it?
 

We are excited to help cities and innovators like WeWork answer these questions. By bringing together public and private resources, we can build a future of work that is better for every city and every worker.

 

Interested in learning about the future of work and how your city or company can prepare? Reach out to Kate Wittels, the leader of HR&A’s urban tech practice.

Get Ready for a Driverless Future: Neighborhood Planning for the New Urban Mobility

In March, HR&A hosted a discussion with ten transportation and urban development thought leaders on how new mobility options will change our cities. Innovations in mobility – ranging from bike share to transportation network companies (TNCs) like Uber and Lyft to microtransit and future autonomous vehicles – have incredible potential to help cities like Dallas create vibrant neighborhoods and an inclusive and prosperous future. During our conversation, our panelists discussed the possible implications of current mobility trends and identified four key strategies for proactively planning for a driverless future.

 

Shared-use mobility technologies are rapidly transforming cities.

Ridesharing apps will more than double in users between 2014 and 2020, and bikeshare users have increased more than 10x since 2012. User surveys by the Portland Bureau of Transportation have demonstrated that citizens are already substituting shared-use mobility trips for private car usage and segments of public transit trips. As described in HR&A’s 2017 Driverless Future report, autonomous vehicles are coming soon, and will fuel additional disruption in urban mobility. The average car in America is used only 5% of the time, and there are approximately six parking spaces per car nationwide. TNCs and ride sharing will result in efficiencies that will shift these needs over time, enhancing mobility throughout metropolitan areas and allowing for the reuse of existing vehicular and parking infrastructure.

 

Cities must anticipate and proactively plan for mobility innovation.

Using the tools within planning, urban design, development policy, and investment, cities can thoughtfully shape private sector innovations. Public guidance and investment is often necessary to support private sector operational excellence and equitable service. Acknowledging that technological change far outpaces the infrastructure that supports it, cities must invest with both strong vision and adaptable policies that can leverage future innovation.

 

In North Texas, and in similar auto-oriented metro areas throughout the country, new mobility technologies provide a generational opportunity to support inclusive and connected urban development.

Dallas Area Rapid Transit (DART) operates the largest light rail system in the country; however, due to last mile connectivity challenges (only 5% of the regional population lives or works within a half mile of light rail), only 1.5% of the regional population uses public transit. Recognizing the potential of new mobility innovations, DART launched an experimental mobility sandbox program – new GoLink on-demand shuttles connecting to select transit nodes and the GoPass shared mobility payment app – that can increase transit patronage and access. Meanwhile, North Texas remains one of the most active real estate development markets in the country. Mobility and access will shape the next generation of development in North Texas, changing the face of urbanism more significantly than in densely growing cities or shrinking cities.

 

To make the most of the mobility revolution, the local and regional governments of North Texas should implement four key strategies:

 
#1 Update zoning and building codes to support nimble development. Developers are already anticipating a sea change, most notably in parking needs. According to Ben Crawford of HOK, many of today’s developers are providing adaptable parking structures that can be converted to alternative uses such as residential even though it costs as much as a 25-35% premium per space in Dallas. Currently, Dallas, like many other cities, mandates a number of parking spaces per square foot for developments. But the tide is changing – the cities of Austin and Buffalo have already reduced the parking ratios developers are required to meet. Dallas could seize the opportunities associated with new mobility options to implement its own policy changes – such as reducing parking requirements and implementing curb/sidewalk management tools to encourage bike share and on-demand services – that help its real estate developers be more nimble in responding to a changing market.
 
#2 Make investments in urban nodes that support multiple modes of access. Today, the urban form in many areas of Dallas sends a clear message to residents: road areas are for driving only. This discourages walkability and bike usage, given the lack of lighting, shoulders, continuous sidewalks or other amenities that create a safe path for other forms of transit. Successful urban districts require public space that prioritizes people over cars. Moreover, the success of tech-enabled transportation depends on access to multiple modes, from traditional mass transit to ride-hailing/AVs to walking and biking. Urban nodes will need new and renewed infrastructure for last mile connections: continuous sidewalks, active public spaces, bike lanes and parking, and curb-space designation for ride sharing.
 
#3 Rethink 20th century transportation infrastructure. As modes of transportation change, so too must our transportation infrastructure. Rather than having mainly empty busses on certain lines, transportation authorities could run lower-capacity vehicles as on-demand micro-transit services that act as feeders for higher volume routes – improving cost efficiencies, customer experience, and ridership. Additionally, as current highway networks fall into disrepair, there may be opportunities to selectively decommission underutilized infrastructure as public space and/or new development. For example, the IH-345 spur, which separates Deep Ellum from the rest of downtown Dallas, has been identified by both community advocates and TxDOT for potential decommissioning and demolition to reconnect the urban grid.
 
#4 Explore new funding models that maximize return-on-investment (ROI). Funding streams for transportation are likely to change as rapidly as the change in mode of transportation. For example, as riders transition away from private vehicles, gas tax revenue, the most significant source of highway funding, is likely to decline. With these changes come new opportunities, such as mobility providers investing directly in new roadway infrastructure. For instance, Uber or Lyft could create a “ridesharing” tollway for which they deliver the capital investment and charge access fees to other users.
 
Meanwhile, reduced transportation costs associated with AVs could drive development away from urban cores, in the phenomenon described by Alan Berger of MIT as “infinite suburbs.” However, such development can only be made possible with ongoing investment in suburban and ex-urban roadway infrastructure, which can be extremely costly on a per capita basis. Local governments must therefore rationalize transportation investment where it can be most impactful in terms of value created and people served – in urban multimodal transit and not on highways to nowhere.
 
North Texas has a generational opportunity to lead the rest of the country in urban innovation. To succeed, local governments, residents, and private businesses must be united in their vision for a vibrant, inclusive, and people-oriented future. Together, guided by this vision, we must prepare for changes in 21st century mobility and its cascading implications for where and how we live, work, and move. This scale of change will require proactive regional coordination between planning processes and policies as well as local design and investment decisions. We can build on a tradition of collaborative planning established with DFW Airport and extend that tradition to engage private businesses and citizens.
 
This paper was coauthored by the following individuals as part of a conversation convened by HR&A Advisors:
 

Microtransit & Transit Agencies: A Bridge to our Driverless Future

For the first time in nearly a decade, transit ridership is down in almost every major metropolitan area in America. Even as cities experience impressive growth and increased demand for dense, walkable neighborhoods, transit systems in the United States are stressed. According to the American Public Transit Association, U.S. transit ridership has decreased by 400 million rides, or nearly 4%, since its decades-high peak in 2014. Many factors have led to this decline in ridership, but there are a few main culprits in this transit-whodunnit: decades of disinvestment in state-of-good-repair and maintenance; lower gas prices; and transportation networking companies (TNCs) like Uber and Lyft offering low-cost, on-demand, door-to-door service.
 

Autonomous Vehicles: Disruption on the Horizon

The disruptive impact of TNCs on conventional public transit agencies will only be further compounded by autonomous vehicles, which will make on-demand trips even cheaper and more convenient. Though manufacturers are still testing autonomous vehicles, and have considerable obstacles to overcome, widespread adoption will arrive sooner rather than later. Industry experts expect the technology to be widespread by the early 2020s.

If the advent of the internet, smartphones, and Snapchat filters have taught us anything, it’s that we should embrace this disruption and use it to improve our public services. In fact, cities and transit agencies can start curbing declining ridership now, while also creating a vision for the future of public transit.
 
How? By embracing microtransit.
 

Microtransit: A micro-solution to macro-disruption

Microtransit is not new, and you may have even ridden it before. It can go by many names, in many forms –  jitneys, airport shuttles, dollar vans, or downtown connectors. No matter the name, these services all have a common purpose. Today, the proliferation of smartphones and route optimization algorithms makes it easier, more customer-friendly, and less expensive for cities and transit agencies to provide microtransit services. Using dynamically generated routes – riders can call a vehicle to any shared destination just by using an app on their phone.

 

Instead of regulating micro-transit to the edges of our public transportation systems, transit agencies can embrace the convenience of dynamic routing to address the long-standing challenge of first and last mile transit connections. Microtransit can work in concert with existing transit networks by improving accessibility to less-traveled, previously inefficient routes, which eventually connect to higher-capacity transportation corridors already served by fast trains and buses.
 

Microtransit’s Multiple Benefits

In the short term, the convenience and simplicity of seamlessly integrated microtransit with conventional public transit can help improve customer service and serve more riders. In the longer-term, well-designed microtransit vehicles (perhaps autonomous) will get people out of their own cars and onto the transit system, reducing parking demand at pick-up points and destinations. This behavioral shift will have significant impacts on land-use planning, economic development, and the ability for transit agencies to cultivate new revenue streams.

 

Will microtransit make the park-and-ride obsolete? Image Courtesy of: Hertfordshire Mercury News

 

Robust microtransit may help cities and transit agencies reduce parking and catalyze development of underutilized space. Station parking, an often costly and inefficient use of space, can then be redeveloped to build housing that accommodates growth.  The Regional Plan Association estimates that in the New York metropolitan area alone, we could build up to 250,000 homes on existing station-area parking lots. Redeveloping park and rides is a no-brainer: it encourages growth, increases the tax base, provides more housing options for young people and baby boomers, and creates more walkable, dense nodes near transit. But residents will be reticent to give up their parking if they are not assured they will have equivalent or better ways to get to the station.

 

Image Courtesy of: (Aric Crabb/Bay Area News Group)

 

First-Movers: On the Cusp of a Revolution

Some transit agencies and municipalities are starting to see the potential for microtransit in their communities. The Eno Center of Transportation recently issued a fantastic report on the growth of microtransit systems in the United States.  The City of Summit, New Jersey introduced a pilot with Uber, and now with Lyft, that allows Summit residents to ride to and from their commuter rail station during weekdays for the same cost of a daily parking space. This program has already helped the city avoid making capital investment in a new parking deck. East Bay suburbs are piloting programs to replace or enhance existing on-demand shuttle services around BART stations, and to replace low-performing bus systems. Large, sprawling cities are also getting in the mix –  LA Metro is building a pilot microtransit program to help address first and last mile issues in target areas in its vast, low-density, service area and Dallas’s transit agency has introduced its own on-demand shuttle service.

 

As more cities and transit agencies experiment with microtransit, more details on the benefits and challenges associated with the various systems employed will emerge. While we have outlined some potential approaches to creating microtransit pilots around the country, it’s clear that more localized research is needed, particularly on how microtransit’s costs compare to traditional bus or jitney service, and how its use will impact customer transportation and parking behavior.

 

As our driverless future approaches, new bus and train infrastructure is built, and nascent transportation start-up ventures are being tested, America’s urban centers are moving towards a truly multimodal transportation future. Transit agencies, cities, and states can try to get ahead of the curve – but only if they choose to embrace innovation, and are willing to think big and small about how to improve service today to lay the groundwork for tomorrow.

 

Are you thinking about the different ways microtransit and autonomous vehicles will imapct urban land use? We’d love to hear your thoughts! Please reach out to Eric Rothman with any questions or comments.

Finding the Opportunities in Opportunity Zones

Governors have submitted designations for Opportunity Zones as part of a new federal incentive program that promotes real estate and business investments in high poverty neighborhoods by favorably taxing capital gains. This new incentive creates a substantial opportunity to direct much-needed capital into distressed areas, but big questions still remain regarding how the program can and should be used to achieve critical economic development goals.
 
In conversations with our clients, we sensed considerable curiosity and interest about this new investment vehicle, and its ability to promote growth and opportunity in communities that desperately need new investment. We thought it would be helpful to provide insight on opportunities and challenges that should be considered when using this tool.
 

What are Opportunity Zones?

Established in December’s rewrite of federal tax law, the program is still in its initial stages of implementation, and federal regulations are still pending. But the broad strokes are simple, taxpayers can defer paying capital gains taxes by investing those gains into Opportunity Funds, which invest equity into businesses and property within Opportunity Zones – low-income census tracts designated by each state’s Governor and subject to approval by the IRS.
 

An Incentive that Plays Well with Others

In its current form, nothing precludes investors and local governments from mixing existing incentives, like New Market Tax Credits, Historic Tax Credits, or Low-Income Housing Tax Credits with investments through an Opportunity Fund. Additionally, Opportunity Funds appear to be very flexible in terms of eligible investments, including real estate, infrastructure, affordable housing, or even a new transit extension. While there could be future guidance offered on this topic, public and private community development professionals should consider Opportunity Funds as a uniquely-flexible new tool in their financing toolbox.
 

Local Government at the Helm

Cities won’t be the only places with Opportunity Zones, but as leaders of the movement to create smarter, efficient, and better monitored place-based revitalization, they are particularly well-positioned. Cities can guide the direction of this new source of investment capital to address multiple bottom line objectives by:
 

  • Establishing their own Opportunity Funds
  • Using Opportunity Funds to support long-term development strategies
  • Focusing new investment in affordable housing, infrastructure, and small business development to catalyze long-term community and economic development goals.

 

Thinking Equitably: Early and Often

This program was designed with investors in mind, and its success will depend on whether they consider the risk of investing in a distressed area worth the reward. Already, cities like Cleveland are seeing nominations of census tracts in quickly gentrifying areas of the city, where arguably development would have continued without the use of any new public incentive.
 
However, it is extremely important to the health and sustainability of a city’s economy to ensure residents and businesses in Opportunity Zones receive balanced benefits from this investment without the threat of involuntary displacement. Nothing in the Opportunity Zones legislation provides protection against speculation and runaway gentrification.  Cities will need to carefully monitor the pace and character of change in Opportunity Zones and have policies and programs in place to ensure that existing residents and small businesses share in the benefits of revitalization. These may include targeted hiring and small business participation programs, initiatives that remove barriers to workforce participation, flexible loan programs, and capital directed to new housing that is affordable to low- and moderate-income households.
 
While there are many outstanding questions about this provision of the Tax Act will translate into new investment in distressed areas, it isn’t too soon for investors and public and private economic development professionals to think creatively about using it. What other opportunities do you see in Opportunity Zones? For more information, contact Paul Silvern in HR&A’s Los Angeles office.

How Should Cities Set Goals to Address Housing Affordability?

Housing affordability is on all of our minds, especially in cities. Rents are rising faster than incomes, housing production has not kept up with demand, and, in many cities, more and more households are rent burdened – spending more than 30% of their income on housing.
 
As stewards of local housing policy, local governments are the key to providing solutions to combat the challenges of an affordability crisis. By enacting proactive preservation and development policies for affordable housing, local governments can stem associated issues like displacement and disproportionate inaccessibility to transit, employment hubs, and neighborhood amenities for lower income residents.
 

AFFORDABLE HOUSING IN A RECOVERING MARKET

As population loss slows and new buildings rise, Detroit is beginning to see signs of recovery and growth. But, new investment and rising housing prices have also created pressure on housing affordability. And, while average housing costs in Detroit are lower than in other markets, 57% of renters pay more than 30% of their income toward housing.
 
In other areas of the city, decades of disinvestment have left neighborhoods without urban amenities, and a regulated affordable housing stock at risk of obsolescence or loss of affordability.
 
The City has proactively pursued affordable housing transactions and has begun implementing policy to support its objectives, but it did not have a formalized strategy for pursuing policies and programs to realize its equitable growth goals. HR&A worked with the City to develop a strategy for tackling affordability by preserving and developing 12,000 units of affordable housing by 2023.
 
To address these and similar affordable housing challenges cites can create a affordability strategy in five steps:

SETTING GOALS

The City designed the strategy to meet two main goals: ensure rising housing costs are met with the creation of new affordable housing, and that investment in key neighborhoods includes preservation of existing affordable housing.
 
Guided by our analysis of the local housing market and proposed affordable housing policy, the City recognized an opportunity to expand initiatives to preserve a greater share of already affordable housing stock, including naturally occurring affordable housing, while encouraging modest growth of new affordable units. It quantified these goals into concrete targets of preserving 10,000 units of affordable housing and developing 2,000 new units by 2023, which will help the city determine resource needs and provide a metric to measure success.
 

Detroit Multifamily Affordable Housing Strategy Roadmap

MAKING IT TO THE FINISH LINE: ACTIONS & ACCOUNTABILITY

To accomplish these goals, the City needed to ensure it could point to specific actions and outcomes that will propel growth and preservation, and also identify adequate measurements of successful implementation.
 
Prioritization & Planning
Based on identified local challenges, overall City goals, and the availability of existing and new resources, we confirmed the affordable housing priorities of the City and established a plan for implementation. This process clarified the City’s goals and led to both the development of policies and initiatives that would drive toward these and reinforced the level of accountability that could be provided through a plan like this one.
 
Policies that Work for the Local Market
The specific challenges of Detroit’s local market required the City to identify state and local policies that would leverage limited resources for funding new affordable housing and prioritize strategies that preserved affordable housing for existing Detroiters. While strategies such as an Affordable Housing Trust Fund have been successful in many cities, Detroit’s approach, including the creation of an Affordable Housing Leverage Fund, creates a targeted tool for accomplishing key affordable housing projects within the city, and allows the City to drive toward its goals, even in the face of dwindling public funding. Other strategies, such as the prioritization and use of publicly-owned land, leverage Detroit’s unique assets to accomplish key housing goals. HR&A supported the City team in identifying strong precedents and crafting the Detroit-specific approach to these tools.
 
Staying Accountable
As with any good strategy, the City set measurable goals and defined actions for implementation within a defined timeframe. The City of Detroit will undertake the actions identified in the strategy through 2023, at which point it can evaluate the efficacy of specific initiatives or programs and reevaluate goals based on evolving market and policy conditions in the City.
 

OUR COMMITMENT TO INCLUSIVITY AND AFFORDABILITY

HR&A was founded with the mission to continue the reinvention of cities into vibrant urban centers that offer jobs and a high quality of life for diverse communities. Supporting equitable, affordable housing and the development of mixed-income communities is a key priority for ensuring our cities stay diverse and promote a higher quality of life. From our economic development strategies to real estate advisory work, HR&A embeds this mission into every engagement with our clients.
 

If you are a city leader or advocate interested in how HR&A can build an affordable housing strategy for your city, or would like to hear more about HR&A’s work on the Detroit Multifamily Affordable Housing Study, please reach out to Stan Wall, Philip Kash, or Olivia Moss, we’d love to hear from you.

Imagine Boston 2030 Wins Comprehensive Planning Award

The Imagine Boston 2030 plan was honored with the 2017 comprehensive planning award by the American Planning Association’s Massachusetts chapter. This is the city’s first comprehensive plan in fifty years, and sets the agenda for future growth, investment, and development in Boston.
 
Starting in 2015, HR&A and Utile Architecture and Planning worked with a dedicated team of city leaders, designers, and planners to understand the needs of Boston’s residents, businesses, and government – and create actions and programs to address goals of affordable housing, transit accessibility, economic growth, and more.
 
Under the direction of Mayor Martin J. Walsh and refined by the input of over 14,000 community members, this plan will enhance and preserve Boston’s historic communities while accommodating long-term population and job growth. The final Imagine Boston 2030 plan, launched in 2017, articulates how priority actions and initiatives will be funded, led, and measured to ensure success.
 
Learn more about our work to create a strong, equitable future for the City of Boston.
 
We’re thankful and humbled to see this plan receive the highest level of recognition from APA Massachusetts. We founded this firm to continue the reinvention of cities into vibrant urban centers that offer jobs and a high quality of life for diverse communities and are committed to working with more cities to shape the actions and strategies that will promote their long-term economic health.
 

To learn more about how comprehensive citywide planning can set the stage for inclusive growth in your city, please contact Partner Jamie Torres Springer.