September 22, 2008

Responsible, Sustainable and Profitable: Why We Matter in Today’s Economic Climate

by Donovan D. Rypkema

The following is an edited version of a speech delivered on September 18, 2008, at the Traditional Building Exhibition & Conference in Chicago, IL.

I first started watching presidential campaigns when I was in the 7th grade in 1960. Leaving the presidency was Dwight Eisenhower – at age 70 the oldest president in U.S. history. Running to replace him were John Kennedy, age 43, and Richard Nixon, age 47. I very clearly remember the newspaper stories at the time that said, “America will never again have an old president.” And, of course, elected in a landslide two decades later was Ronald Reagan, who was the same age at the beginning of his first term as Eisenhower at the end of his second. And this year we have John McCain, who, if elected, would be the oldest president yet.

Then, in 1964, Barry Goldwater lost in the biggest landslide in America history, and the newspapers all said, “The Republican Party is Dead.” Four years later, Richard Nixon was elected. And four years after that George McGovern did even worse than Goldwater and those same newspapers said, “The Democratic Party is Dead.” Four years later Jimmy Carter was elected.

I begin with these examples, because very often, when we say, “things have changed forever,” we simply don’t know what we are talking about. The trouble with looking at trends is akin to trying to count railroad cars when you’re sitting right next to the track – it’s very difficult to do. To understand where the train is going and how long it is, you need some distance. And we are in the midst of the changes that are affecting us today, and their length and their direction remains fuzzy at best.

Part of the issue is sorting out which trends are cyclical and which are systemic. Those differences affect both our responses and our opportunities. While I caution myself to make sure I understand the difference between cyclical and systemic, I’m often wrong. Less than a month ago I said in a speech, “I think $140 is going to be the floor, not the ceiling for oil.” And, of course, on Monday oil was at $96 a barrel.

So I have basically divided observations into four parts: 1) the trends that, if not permanent, are at least going to affect us for a number of years; 2) the risks that these trends pose for those of us interested in historic preservation and traditional buildings; 3) the opportunities these trends might represent; and 4) the actions that we need to be taking.

First, on this election. Both candidates are running on change. But the reality is that whatever change either can make will be severely limited. The size of the national debt; the trade imbalance; the renewed military ambitions of Russia; the growing military strength of China; the magnitude of the Chinese and Indian economies; the concentration of oil-generated wealth in a relatively small part of the world; the percentage of U.S. debt held by foreigners; the size of the baby boomer population approaching retirement; the shrinking populations in Europe and Japan; and the self-centered selfishness of the AARP are all patterns that have huge impact on the U.S. economically, socially and politically, and there is almost nothing that either McCain or Obama can do about any of them.

If we begin to sort out cause and effect, there will be some changes the next administration can make as to how we respond to those trends – health-care policy, greater or lesser degrees of protectionism in international trade and altering relationships among traditional allies, for example. But even those changes will not make substantial differences until long after the next president is gone from office.

Two-thirds of federal spending is in entitlement programs. So the share that there is left to make “change” with isn’t all that much. Here’s the reality – my grandchildren, which are not even conceived yet – will be paying off the bills run up in the last eight years. And the damage that has been done to America overseas will take a generation or more to undo.

I don’t mean to say there is no difference between the candidates. I do mean that we have to be realistic about how much change of any kind we’re going to see in the next eight years, particularly on the federal expenditure side. There may be some policy adjustments that can have some impact, but if we’re waiting for the federal government to make major differences in our daily lives, we’ve got a long wait.

Everybody is pointing fingers at everybody else in this real- estate mortgage crisis. But let me remind you of what no one is talking about. Over the last decade there has been a huge push, across political and ideological spectrum, to increase the number of homeowners, particularly among minorities and those of limited means. The Bush administration certainly did that, but so did the whole range of housing and social service advocacy groups. And in this decade we reached all-time levels of home ownership, especially among Hispanics and African-Americans.

Well, how are you going to get more people, particularly those of modest means, to be homeowners? Obviously, get them loans. But what do you do if they don’t have the 20 percent down payment for traditional loans and don’t have strong credit histories? Well, you change the standards for home loans. And what did those new standards come to be called? Sub-prime mortgages. I’m not defending anyone, and obviously there should have been closer oversight on what was happening. But it is a perfect example of unintended consequences – a commendable goal of higher levels of homeownership, particularly among those who didn’t meet traditional underwriting standards, and a result no one anticipated.

But this whole mortgage crisis was certainly not driven by a single factor. A weak economy, slow wage growth, and rising unemployment made problems for some borrowers. Rapidly escalating costs of transportation made problems for others. And we had a 15-year run of absurd levels of real-estate appreciation – and the corresponding assumption that, “Well, even if this borrower gets in trouble, since the property will be worth 10 percent more next year, if I have to foreclose I can still get the mortgage balance back.” When you have an industry dominated by 27-year-old MBAs who have only seen the real estate market go one way, you end up with foolish decisions. And the few adults in the mortgage industry were obviously more concerned with their production bonuses than with the long term consequences of their actions.

Three years ago over 40 percent of single-family homes were purchased by people for other than as their primary residence – as a second or third home or as an investment property. Added to this is a 20-year pattern of the price of the average house and the amount of the average household income having very different growth curves. So you take 40 percent of the available inventory off the market as options for a primary residence, you add millions of potential buyers with easy-to-get mortgage money, a belief among both lenders and borrowers that real estate only goes up in value, and lo and behold the law of supply and demand works – prices rise at ridiculous rates but sooner or later there’s a crash. And its not over yet.

I think it will be another six months before there’s enough measurable data to be sure, but at least based on past experience in real-estate downturns, and on anecdotal evidence from this one, I think historic districts will end up being much less adversely effected around the country than the market as a whole.

While bankers like to define themselves as rational, reality-based decision makers, they are a very over-reacting industry – moving from providing credit way too easily to shutting it off all together. So it’s going to be a while before the real-estate market gets back to some kind of normalized situation. I think there’s a real risk that at least in some markets real-estate values will fall another 15 percent. Keep in mind that the real-estate market works because of the liquidity provided by the secondary market and the insurance that guarantees those loans. Now both are in government hands. The fix will be neither easy nor quick.

But once there is a correction, maybe three years from now, I absolutely believe that close-in, historic neighborhoods will be in very strong demand – partly because of their urban character and partly because of their proximity to the core, to public transportation, to goods and services, to schools and to jobs.

So here, in no particular order, are trends that I believe will shape our decisions:

-There is beginning to be a significant push for and acceptance of density.

-There is a very rapidly increasing shift to using public transportation. In the last three months almost one in five American workers say they have shifted their commute to work habits away from driving alone in their car.

However there is not the capital available in reserves and in many instances not enough borrowing capacity to add to public transportation infrastructure – be that more busses, additional subway stops, more train cars or whatever.

A story a week ago noted that busses in Louisville, KY, are now periodically skipping some bus stops with passengers waiting, because there is no more room on the bus but no money to buy new busses.

At the same time, the cost of fuel is causing some, even wealthy, school districts to reduce the number of students who are served by school busses – requiring more of them to walk to school. I’m not so sure that’s not a good trend, but for 40 years we have built schools like we built shopping centers – surrounded by open space and designed with automobile orientation rather than pedestrian orientation. Therefore both the distances and the walkability between students’ homes and the schools are often very problematic.

-There will be a renewed interest in neighborhood schools, and this will spur a rebirth of the neighborhoods around them. More and more unused schools will be taken over by charter schools. But many will be reactivated by public schools systems generally.

-Local governments and advocacy groups are beginning to understand the importance of mixed-income housing, both on the building level and on the neighborhood level. This is going to mean more inclusionary zoning ordinances and an increased role for non-profit housing providers.

-Corresponding with the enlightenment about mixed-income housing will be greater encouragement for mixed-use buildings and mixed-use neighborhoods.

-We all know about the infrastructure in this country that is in desperate need of repair and replacement. That is going to be becoming more apparent in close-in and older neighborhoods. And where is the money going to come from for that? I have no idea.

-We are going to see the rates of overall homeownership fall. They peaked at nearly 70 percent of all households at the end of 2004. They are down a couple of points since then. But it’s not just going to be people who are no longer homeowners because they lost the property in foreclosure, nor those who might have qualified for a loan three years ago, but won’t today. There is going to be a sizable shift from ownership to renter status for baby boomers. If the house is no longer the great investment it once was perceived to be, if it is too big now that the kids are gone and the taxes too high, and there’s a decreased interest in shoveling walks and mowing grass and an increased interest in travel, millions of baby boomers will become renters.

-Fewer people will want to be owners of second homes, and choose to rent a place at the beach or in the mountains for a month or two rather than owning it year round.

-Both historic buildings and new construction in traditional styles will be faced with an ongoing debate between aesthetics and technology. The market will respond and design technological solutions that are not like giant ugly warts on buildings, but only if design ordinances all over the country require them to do so.

-There will be more and more at home workers, both as independent businesses and as a part-time alternative to going into the office. All three levels of government will move to have many of their workers work from home at least part of the time. This will make neighborhoods safer, but also increase the demand for more public services, better maintenance of streets, sidewalks and lights, and a greater interest in mixed uses within the neighborhood.

-Transportation advocates will be playing a more prominent role in neighborhood policies, and many more transportation options will be created. Many of these will come from the private sector, either independently or through a public franchise to provide transportation services. Even small towns are going to see wider transportation options. Included in this will be more demand for sidewalks and bike paths within neighborhoods.

-There will be a significant reduction of number of automobiles per household. It isn’t that everyone is going to give up their car. But there will be households that move from three vehicles to two, and from two to one. Even a 15 percent reduction in total cars will have a huge impact on traffic, air pollution, fuel consumption and neighborhood quality. It will also mean a reduction in the amount of land in a city that is devoted to parking cars. The old ratios of “x” parking spaces for “y” square feet should be thrown out the window.

-There will be more multi-generational households, including both aging parents moving in and 20-somethings moving back in. There will need to be zoning adjustments to allow not only for the granny flat but simultaneously for the boomerang apartment in the basement. In many instances, however, this will mean a net increase in automobiles per residential lot, in spite of an overall reduction in vehicles.

-Housing costs and immigration will increase the numbers of non-family members occupying a house, having significant implications for the bathroom/bedroom ratios, privacy areas, etc. There may be opportunities for special designs for houses for multiple, unrelated adults and redevelopment of large historic houses for the same purpose. At the same time some cities will continue to pass ordinances severely limiting numbers of non-family persons in dwelling units, often driven by anti-immigrant attitudes.

-In spite of growing public dissatisfaction we will continue in many places to see the McMansion. These are parasite buildings. They are taking advantage of the character of the existing neighborhood, but are fundamentally destroying that character. They look out the lumberyard Palladian window of their 1,000-sq.ft. master-bedroom suite on a great residential neighborhood. And their neighbors now have to look out the window at a residential structure on steroids. I recently heard them called “starter castles.”

-While these out-of-scale houses are doing is adding size, they are also often reducing density. Virtually none of those five-bedroom, 6,000-sq.ft. houses actually has enough people to fill those bedrooms. Size and ground cover are increased, but density reduced.

-New materials are going to be compared with existing materials in appearance, energy efficiency, life expectancy, life-cycle costing and embodied energy.

-More and more places are adopting the SmartCode. This will be positive for cities overall and in the long run may end up being by far the most valuable contribution of New Urbanism to urban quality.

-More so-called green builders are going to justify the demolition of historic houses by saying, “yeah, but we’re going to be reusing the materials.”

And speaking of materials reuse, A few months ago in the Washington Post was an article about firms providing recycled materials to re-incorporate into house construction. And, of course, this received the adulation of environmentalists. The president of one of these firms was quoted as saying, “We have never cut down a tree to make our product.” He added with pride, “It’s all from 100 percent reclaimed wood.”

Now what could possible be wrong with that, you might ask. Here’s what was in the next paragraph: “…the wood averages 100 to 600 years old and comes from barns, ancient temples, buildings and schools around the world, including countries as far away as China.” So tearing down 600-year-old temples in China to provide flooring for some McMansion in suburban Chicago is sustainable development? I beg to differ. And the excuse that “well, we didn’t tear down the temple, we just bought the wood” is no more legitimate then saying, “We didn’t kill the elephant; we just bought the ivory after it was already dead.”

-We are going to continue to hear charges of “gentrification” but the definition is going to move away from being primarily race based to being income based.

-Unfortunately for those of us who believe in historic preservation, we will see an increasing use of historic designation as a NIMBY tool, abetted by preservation consultants who will make claims that anything over 50 years old is historic, without any qualitative judgments or only spurious claims about historic criteria. It’s not that there’s some great tidal wave of born-again preservationists. It’s just that there are very few tools available to influence neighborhood quality, so the historic preservation stick is the one that’s grabbed.

-As I’m sure you know, today, not infrequently, LEED designation is being used as the justification for the demolition of historic buildings. In Lexington, Kentucky a proposal is getting final approval to build a 40-story hotel in the middle of downtown. And to do this the developers said it is necessary to tear down 14 historic structures built between 1826 and 1930. Preservations responded that they certainly don’t object to a new hotel downtown but that there is no reason the historic structures couldn’t be incorporated into the development. “Not possible” said the developer. The idea that this development couldn’t be a mix of old and new suffers from a paucity of the imagination. And their stick to justify the demolition? “Yeah, but we’re going to be LEED certified.” Oh, and by the way, as a reward for destroying the history of Lexington, the developers are to be rewarded with $80 million of Tax Increment Financing.

But it’s not just private sector developers. Here’s my latest example of myopic idiocy of environmental groups. The Nature Conservancy – allegedly a leader in the environmental world – is building a new state headquarters in Indianapolis, IN. Their director even says, “We’re an international conservation organization. If anyone should be walking the walk of sustainability it should be The Nature Conservancy.”

I couldn’t agree more. So what is their version of “walking the walk”? – tearing down a 100-year-old industrial warehouse to build a LEED-certified suburbanesque green gizmo building. Why? “Oh, it’s deteriorated beyond saving,” they say, when in fact engineering reports says that is not the case. “Oh, but it would be too expensive,” they say, and yet their budget would permit $175 per square foot to be spent? Is that enough? Well, another non-profit is renovating an older building of about the same size in Indianapolis that will be LEED certified, and their estimated costs? $68 per square foot.

OK, I’m not being exactly fair. They are going to be reusing the building – they are going to grind up the bricks and use them for the walkway in their “conservation” garden.

And when local preservationists began objecting to the plans to demolish an historic structure, how did The Nature Conservancy respond? “You do that and we won’t build here at all” – bully tactics one expects from some sleazy corporate site-selection guy, not from a non-profit organization that brags about its concern for communities.

-Earlier I mentioned the huge percentage of single-family homes that were purchased as second homes. Some cities are realizing this has a significant downside. While the out-of-towners are paying property taxes, the two or three weeks a year they are in the house means that 50 weeks a year no one’s there to buy groceries, eat at restaurants, or join the YMCA. And there is certainly no employment generated. Some cities are looking for ways to limit the number of second homes, particularly in historic districts.

-In some markets, the weakness of both the dollar and American real estate has meant strong interest by foreign buyers, particularly Europeans and those flush with oil wealth. The dollar is beginning to strengthen, but is still 50 percent lower against the Euro than just five years ago. But as long as this weak dollar/soft real-estate market continues there will be sales opportunities. The good news is that those buyers are used to historic districts, design guidelines, and quality cities, so won’t be among those shouting, “you can’t tell me what to do with my house.”

-Finally, there will be an ongoing battle – each being waged under the environmental/smart growth/sustainable-development banner – among affordable housing, density, historic preservation, small business incubation and public transportation. And at the moment density and public transportation interests are trumping the other three.

Those are some of the trends – but what risks do they represent for historic neighborhoods and traditional and heritage buildings? Here are some of them:

-First, is the push for density. And the argument will go like this: “If density is good, if proximity to the center of the city is good, then let’s tear down those little old houses and replace them with six-story condominiums.” Historic neighborhoods and buildings will be vulnerable from three directions. First, their proximity to jobs, shopping and schools make them targets of further densification. Second is their imagined deficiency in energy efficiency – regardless of how spurious the arguments. Third, because of their locations, historic neighborhoods tend to be near transportation nodes.

-Over the years local historic districts have sometimes been opposed by so-called property-rights proponents and sometimes low-income housing advocates. Segments of the real-estate community also used to oppose historic-district designation, claiming one more layer of regulation would prima facie hurt property values. Well, that argument has been demonstrably disproved all over the country. So now we have the anti-tax people joining in the fray, saying, “Well, sure, the property values will go up, but that just means you’ll pay more taxes.”

-We are going to see more instances of opposition to historic districts being joined by environmentalists and transportation advocates – the environmentalists because they don’t want to have to figure out how to install windows and solar panels within design guidelines, and transportation advocates saying there needs to be bigger buildings to make ridership numbers feasible.

-This push for density will also manifest itself in more “facadomies.” Recently I heard one of the self-proclaimed spokesmen for New Urbanism say, “You preservationists are going to have to accept saving only the façade because density is a moral imperative.” Well, I’m not so sure I want a former real-estate developer who now bills himself as a “metropolitan land strategist” deciding what moral imperatives are. Furthermore, not a dictionary written by Salvador Dali on drugs would call this lunacy “historic preservation.”

As I’ll repeat later, sustainable development is a combination of economic responsibility, environmental responsibility, and social/cultural responsibility. The “facadomy” isn’t responsible in any of those categories.

-Every enforceable historic preservation ordinance has to have an economic hardship provision. In the past, claims under that provision have usually been made based on the Penn Central “reasonable return” standard. I think there’s a risk that there will be appeals for demolition or inappropriate rehabilitation under economic hardship clauses based on fuel costs. And preservation commissions are going to have to figure out how to respond.

-I said earlier that once the real-estate market gets back to something representing normalcy, historic neighborhoods will be in strong demand. That’s good, of course, but the risk is that we’ll start seeing the European pattern of rich in core and poor at edges. We need to be taking steps right now to mitigate that.

-Many of you have heard me say this before, but we need to be working toward sustainable development, not just green buildings. The whole EPA/Green Building Council/green architect world has been getting away with making believe green buildings are sustainable development.

The whole bevy of LEED standards are only measurements of green buildings. They are in no way, shape or form remotely measurements of sustainable development. Stop letting the manufacturers of green gizmos and the U.S. Green Building Council getting away with pretending it is.

This is what sustainable development is: a comprehensive consideration of environmental responsibility, economic responsibility and social/cultural responsibility.

We are at great risk of that “green building” position carrying the day – back draft dampers, waterless toilets and solar bike racks instead of environmental responsibility, economic responsibility and cultural responsibility.

More and more city governments are adopting “sustainable city” ordinances, but almost all of them focus exclusively on green gizmo technology. If preservationists don’t quickly turn around this very fast moving train, historic buildings will continue to be disposable in the name of green architecture.

-I will readily acknowledge that there are some great buildings built in America over the last 50 years, and they should be identified and protected using the same qualitative criteria that has always been applied for historic designation.

But when the movement for the preservation of the recent past succeeds in designating whole neighborhoods of low-density, automobile-oriented, mediocre buildings as “historic” simply because they are 50 years old or because they represent a “typology of development” three things happen: 1) We are no longer in the position to claim that our historic neighborhoods are how cities ought to be built and represent the best of urbanism; 2) We move from being the epitome of sustainable urban development to its antithesis; and 3) We lose hard-won credibility in political, financial and business circles.

Because of some fixation with the neighborhood the Partridge family lived in, we designate wide swaths of suburban crap as historic, we will have abandoned the fundamental link between historic preservation and quality, sustainability and common sense. For the most part those aren’t the neighborhoods that should be preserved; they are the neighborhoods that should be densified.

These trends and risks both open up avenues of opportunity. Here are some of them, in no particular order:

-We have the opportunity to make the case not just for density, but density at a human scale, which is exactly what our historic neighborhoods are.

-The neighborhood based shop – the original prototype for what is today the 7-Eleven will make a comeback in those places wise enough to change zoning laws to allow it to happen.

-With sizable numbers of baby boomers shifting from home ownership to being tenants there will be significant opportunities both to design infill housing to suit their needs, but also to manage properties on a neighborhood level.

Earlier I mentioned that just three years ago 40 percent of single family sales weren’t as primary residence – they were either second homes or investment housing. Based on the average selling price of the investment side those were older, smaller homes targeted to tenants who couldn’t afford to buy.

But those same small dwellings – both historic bungalows and cottages, but also new construction at a smaller scale – might represent a real opportunity for rentals to baby boomers who, in fact, have money, just are no longer interested in having all their assets tied up in home ownership. In the next 15 years there will be a both a desire and increased need for baby boomer assets to become more liquid, and this real estate recession is giving them a heads-up that their house isn’t a liquid asset.

-In the last three decades we’ve seen the urban townhouse morphed into the garden apartment with the townhouse typology plopped into a site surrounded by asphalt and grassy knolls. The townhouse model will re-emerge but as connected to the urban fabric, not isolated from it by streets, parking and berms.

-There is a great opportunity for preservationists and builders of traditional housing to make the case to government officials and housing advocates, that size, in and of itself, is a major contributor to affordability. We should be keeping older, smaller housing stock, and rehabilitating it as an economic and environmentally responsible alternative to what has been done – building units that are expensive in dollars but cheap in construction and short-lived as housing.

-The whole issue of embodied energy is being refined and brought to the forefront in the more comprehensive debates about sustainable development. Historic district commissions have an opportunity to add embodied energy costs to the evidence that has to be presented in demolition applications.

-Instead of eviscerating historic buildings and neighborhoods, there is a whole series of salvaged land sites that can be used for densification, and this is a great opportunity for those building traditional housing types. Where are those sites? Brownfields, or course, and that has been going on for a while. But also the following: strip centers, failed malls, car dealerships, vacant big box developments, public housing sites, and school sites – hopefully reusing the school itself as housing then infilling around it.

-As those of you in the rehabilitation industry know, there is a severe labor shortage of those trained in a wide range of preservation skills. There is great opportunity here for both the private and public sectors to enhance existing training programs and start new ones. These are well paying jobs, particularly for those without advanced formal education. And they are jobs that can’t be shipped overseas. This is an area where even a small shift in funding priorities from state and federal education and labor programs could make a huge difference.

-Innovative firms that are suppliers of materials and building components will shift their product line, and invent new products, in response to regulatory requirements. It’s just that the design guidelines that establish those regulations need to be wide spread and consistent enough to justify the capital investment. But who better than the people who attend this conference to be the ones who come up with product innovations that are both the cause and the effect of regulatory amendments.

-I’m not so sure that we don’t need to take another look at the Segway – and maybe even begin to make design decisions based on making buildings and neighborhoods more Segway friendly.

-Some cities have already begun to do this, but here is maybe the biggest opportunity coming out of this sub-prime mortgage foreclosure crisis – those foreclosed properties ought to be acquired and used as an inventory for workforce housing. In spite of this real estate recession, affordable housing for workers remains the number one economic development challenge today, and will continue to be so for the foreseeable future. Who is being most affected are those that are necessary for our local economies to survive – teachers, nurses, policemen and firefighters. Cities should buy these properties from banks after the foreclosure process has been completed – and buy them for 60 or 70 cents on the dollar.

-Ninety percent of all businesses in America employ fewer than 20 people, and fully 60 percent fewer than five. There is a whole range of small business opportunities emerging but in many parts of the country it is primarily immigrants who are small business owners. We need to aggressively court those immigrant entrepreneurs to capture the opportunities that will simultaneously advance our goals. -There’s an opportunity to conduct more of the kind of research that was recently undertaken by Terry Holzheimer, the director of economic development in Arlington, Virginia. He looked at density patterns in the entire Washington, DC, metropolitan region, and concluded, “Relatively high intensity development can be achieved within constraints posed by the height, form and texture of traditional communities as is demonstrated in places such as Georgetown and Alexandria.”

-And, again, for the next 25 years at least there are immeasurable opportunities for small-scale contractors, most of which are and will remain non-union. But in contracting, in training and in procurement these small firms are often at a disadvantage. Maybe there needs to be a strong, national trade organization of small contractors who specialize in historic preservation and traditional building.

I started by saying there wasn’t much real change that either Obama or McCain would be able to do at the federal level. But in writing this I’ve changed my mind. So I’m going to conclude with five changes that could be made at the federal level that would have huge impacts on historic preservation, on traditional building and on the quality of cities of all sizes in America:

-Abolish the Environmental Protection Agency.

-Establish the Department of Sustainable Development.

-Spend the first 18 months of the new administration establishing measurable standards for Economic Responsibility and Social/Cultural Responsibility.

-Use or modify the existing LEED standards as the metrics for Environmental Responsibility.

-Use this balanced measurement for sustainable development, for every applicable Federal program – housing, economic development, transportation, community development, foreign aid, school construction funds, tax incentives, everything that might apply.

There is certainly precedence for this. Every federal undertaking that might affect historic resources have to undergo Section 106 review. Federal housing projects all have to meet accessibility tests. Economic development funding has to pass equal employment opportunity criteria. Education grants are contingent on receiving No Child Left Behind standards

So let’s have a sustainability checklist for federal projects, and set some minimum score that a project has to meet to move forward. This checklist would certainly consider environmental measurements, but also economic and cultural ones.

I’m not sure which projects would still move forward, but I’ll tell you which ones would not: bridges to nowhere; hotels on the ruins of historic buildings; highways through traditional neighborhoods; foreign assistance for giant dams of negative environmental impact; and sprawling suburbs which well fit the Lockean phrase, “the undistinguishable inane.”

In fact, since Fannie Mae and Freddie Mac have essentially been nationalized, let’s use them to apply the sustainable development evaluation. If that analysis considered all three of the sustainable development components here are some things that could happen: 1) no mortgages would be bought from sprawl exacerbating subdivisions; 2) no mortgages would be purchased for properties that were constructed on a site where a historic building was torn down; 3) no mortgages for McMansions would be funded; and 4) historic properties, and neighborhood-based mixed-use properties, would receive priority funding.

Here’s an idea that would be sustainable development – since nearly 45 percent of all foreclosed properties are owned by Fannie and Freddie, they could begin tomorrow conveying those houses to local governments and housing authorities for future use as workforce housing. Since it’s going to cost us taxpayers billions in any event, we might as well get a sizable public benefit from it, including sustainable development.

For all the strong arguments for the environmental contributions of historic buildings – virtually none of which are acknowledged in any of the LEED checklists – the reality is this – if we continue to allow the discussion to be about green buildings, historic buildings will lose 90 percent of the time.

If we change the debate to be about sustainable development, both historic buildings and traditional building typologies will win 90 percent of the time.

So McCain and Obama aren’t the only ones for change. I’m for changing the debate from the myopic view of green buildings to the comprehensive view of sustainable development. That’s a change that can take place. Then we will be responsible, sustainable and profitable.

Donovan D. Rypkema is the principal of PlaceEconomics, a real estate and economic development-consulting firm based in Washington, DC.
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