Creating anything from scratch is more difficult than working from an established base. This is absolutely true when it comes to starting new neighborhoods and communities. What do you build first? What will be the anchors? And how do you balance hard and soft infrastructure to make it an attractive place before a critical mass is achieved?
I was thinking about this over the weekend while walking around Whistler Village, so I tweeted this out. If you've been before, you know it's packed with people all throughout the day. I would characterize it as a successful place.
But the responses I got on Twitter were along the lines of: "Are you joking? It's a fake utopia. It may be busy, but staff are forced to live on the outskirts of the village in dorms."
These comments are not entirely wrong. Resort villages are typically a kind of Disneyland. Attainable workforce housing is a major challenge for resorts, and it's typical to make the building of it a precondition to development. You can't run a resort without staff.
But none of this changes the fact that it is still very difficult to create successful places from scratch. There are lots of ski resorts that don't have the energy of Whistler, and lots of new planned communities that don't have the foot traffic of older neighborhoods. The Canary District in Toronto comes to mind as a place that is still settling in. That is how you know it's challenging.
Creating successful places from scratch requires the right strategy, careful design and programming, patience, and probably the ability to subsidize the right tenants to seed activity early on. It's also helpful if you can avoid going broke before the neighborhood comes alive.
Cover photo by Peter Robbins on Unsplash
I arrived in BC yesterday for ICSC Whistler. This is my first time here for this conference. I came around this time several years ago for a Slate investor day, but I never participated in ICSC activities per se. So, I’ve come to realize that I don’t really know the proper protocols. I’m an ICSC newbie. Most people I know don’t attend the actual conference. My loose understanding is that you wear Patagonia, ski and snowboard all day, après at Longhorn, and then real estate deals and capital get thrown at you from all angles. I’ll try this and see what happens.
If you’re around, drop me a text or email me at brandon.donnelly@globizen.com.
One of the common criticisms of new housing is that it's designed for rich people and that it does nothing to help the housing situation of average citizens. The YIMBY response to this is, "Well, yes, it does actually, because supply eases overall housing pressures and because of the filtering effect." This is the process whereby housing becomes gradually more affordable and available to people as new housing is built and vacancies are created. But most people don't like this explanation. It feels slow and indirect.
Here's something that might help.
In this recent study, researchers looked at the downstream effects of a new condominium tower in Honolulu called The Central Ala Moana. Completed in 2021, the building contains 512 units, of which 60% are income-restricted (310 units) and 40% are market-rate (202 units). It was developed under a state affordable-housing program that gave the developer height and density bonuses, plus fee waivers totalling about $13 million in exchange for delivering income-restricted units. (In my opinion, this is directionally preferable to unfunded inclusionary zoning mandates.)
Using address-history microdata, the researchers tracked who moved into the new condominium tower, and constructed detailed vacancy chains across multiple rounds of moves. Here's what they discovered:
Among documented vacancies, the 202 market-rate units produced 87 downstream vacancies (0.43 vacancies per initial unit), while the 310 income-restricted units produced 90 (0.29 vacancies per unit). Thus, market-rate units are more likely to generate a downstream vacancy. The main mechanism is new household formation: movers into income-restricted units are more likely to be a newly formed household, leaving family or roommates at the prior address and thus preventing a vacancy from being created.
In absolute numbers, they found that the completion of the building induced more than 500 local vacancies in the three years after construction, by setting off a chain of moves. Importantly, the researchers also found that the homes being vacated were, on average, about 40% less expensive than those in The Central. So even though a new building may be more expensive than the existing housing stock (which is generally the case or else the development wouldn't happen), it does generate benefits.
Creating anything from scratch is more difficult than working from an established base. This is absolutely true when it comes to starting new neighborhoods and communities. What do you build first? What will be the anchors? And how do you balance hard and soft infrastructure to make it an attractive place before a critical mass is achieved?
I was thinking about this over the weekend while walking around Whistler Village, so I tweeted this out. If you've been before, you know it's packed with people all throughout the day. I would characterize it as a successful place.
But the responses I got on Twitter were along the lines of: "Are you joking? It's a fake utopia. It may be busy, but staff are forced to live on the outskirts of the village in dorms."
These comments are not entirely wrong. Resort villages are typically a kind of Disneyland. Attainable workforce housing is a major challenge for resorts, and it's typical to make the building of it a precondition to development. You can't run a resort without staff.
But none of this changes the fact that it is still very difficult to create successful places from scratch. There are lots of ski resorts that don't have the energy of Whistler, and lots of new planned communities that don't have the foot traffic of older neighborhoods. The Canary District in Toronto comes to mind as a place that is still settling in. That is how you know it's challenging.
Creating successful places from scratch requires the right strategy, careful design and programming, patience, and probably the ability to subsidize the right tenants to seed activity early on. It's also helpful if you can avoid going broke before the neighborhood comes alive.
Cover photo by Peter Robbins on Unsplash
I arrived in BC yesterday for ICSC Whistler. This is my first time here for this conference. I came around this time several years ago for a Slate investor day, but I never participated in ICSC activities per se. So, I’ve come to realize that I don’t really know the proper protocols. I’m an ICSC newbie. Most people I know don’t attend the actual conference. My loose understanding is that you wear Patagonia, ski and snowboard all day, après at Longhorn, and then real estate deals and capital get thrown at you from all angles. I’ll try this and see what happens.
If you’re around, drop me a text or email me at brandon.donnelly@globizen.com.
One of the common criticisms of new housing is that it's designed for rich people and that it does nothing to help the housing situation of average citizens. The YIMBY response to this is, "Well, yes, it does actually, because supply eases overall housing pressures and because of the filtering effect." This is the process whereby housing becomes gradually more affordable and available to people as new housing is built and vacancies are created. But most people don't like this explanation. It feels slow and indirect.
Here's something that might help.
In this recent study, researchers looked at the downstream effects of a new condominium tower in Honolulu called The Central Ala Moana. Completed in 2021, the building contains 512 units, of which 60% are income-restricted (310 units) and 40% are market-rate (202 units). It was developed under a state affordable-housing program that gave the developer height and density bonuses, plus fee waivers totalling about $13 million in exchange for delivering income-restricted units. (In my opinion, this is directionally preferable to unfunded inclusionary zoning mandates.)
Using address-history microdata, the researchers tracked who moved into the new condominium tower, and constructed detailed vacancy chains across multiple rounds of moves. Here's what they discovered:
Among documented vacancies, the 202 market-rate units produced 87 downstream vacancies (0.43 vacancies per initial unit), while the 310 income-restricted units produced 90 (0.29 vacancies per unit). Thus, market-rate units are more likely to generate a downstream vacancy. The main mechanism is new household formation: movers into income-restricted units are more likely to be a newly formed household, leaving family or roommates at the prior address and thus preventing a vacancy from being created.
In absolute numbers, they found that the completion of the building induced more than 500 local vacancies in the three years after construction, by setting off a chain of moves. Importantly, the researchers also found that the homes being vacated were, on average, about 40% less expensive than those in The Central. So even though a new building may be more expensive than the existing housing stock (which is generally the case or else the development wouldn't happen), it does generate benefits.
It eases overall housing supply constraints and expands affordability in the local housing market.
Cover photo by Michael Olsen on Unsplash
It eases overall housing supply constraints and expands affordability in the local housing market.
Cover photo by Michael Olsen on Unsplash
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