Monday, November 23, 2009

An idea whose time keeps coming, and coming

This spring the Volvo Round the World maxi boat race sailed into Boston harbor. Their arrival was preceded by the Puma pop up store that was erected on the pier in a day.

Thousands of us clambered aboard, bought gear, partied, and became impressed with the possibilities of container architecture.

I had seen "Positions"the art installation village consisting of "galleries" assembled from around the world and then transported in containers, lined up along the beach, and forming an instant art's district on Miami Beach, but this project moved the possibility from art to reality.

LOT-EK has been experimenting with containers for some time. An earlier example of a project was their

container home.

Bob Vila's web site featured a story on home creation utilizing containers and concluded: "Perhaps the biggest barrier to increased production of container homes is the stigma that is attached to the ugly metal boxes left abandoned in urban shipping yards. Transformative thinking and a willingness to move outside of the box can bring this technology to the forefront of urban planning agendas everywhere."
Text by Mark Fuller

A Seattle based architecture firm Hybrid Seattle coined the term "cargotecture" to describe their development and their first structure has landed.
I also know that when talking to the principals of the firm they are at work on an infill concept that is so smart it is a wonder that it hasn't been implemented yet. They view dorment development plots, builders waiting for financing might be a reason for a plot to lay fallow, as sites for temporary villages of container homes. The portability of the containers would allow them to have a temporary location until such time as the underlying project was green lighted, and then would move to the next site. A much better use than surface parking or weed patches.

The AIA, and the City of Newark sponsored a world wide competition for a container based development for their city. The results are amazing.

The beat goes on. LOT-EK won a competition to build a new shopping mall on a NYC pier, an Italian firm built a jewel box and slowly the concept is winning acceptance. It is important to take away the reality that zoning and planning board rules that might inhibit creative housing solutions are responsive to political will. If you have the will, there is a way.

Wednesday, November 18, 2009

Maximizing the built environment

A scenario:
Barbara is a single mom who got herself behind the eight ball. Her husband died from a sudden heart attack while jogging. They had no life insurance. To help her with cash flow she refinanced her modest three bedroom, two car garage home in middle America using an adjustable rate mortgage. The way it was explained to her, "when the affordable rate is about to adjust, we will refinance again, and the monthly payments will remain the same". The problem is that when the adjustable rate reset, there was no bank ready to refi her loan and now she was saddled with a mortgage that was breaking her.

Barbara works in human resources at a mid-sized utility company. After her debt service she barely has money left to feed her two kids, 3 and 5 years old.. She was very close to foreclosure when a group of three approached her office with a concept for a new small business (house retrofitting for conservation) that they imagined was allied with the utility, and that the utility might want to fund. This was beyond her pay grade and she pushed the proposal up the chain but kept the cover sheet of the proposal in her desk. Weeks later she called one of the principals out of curiosity. No the utility hadn't funded the venture but the group had secured some start up money and was plunging ahead. They were looking for space.

No one can ever trace the sparks that trigger creative energy. What Barbara blurted out was, "would you consider renting my house from me during the working day?" Meetings were had, problems discussed, and the resolution worked as follows: They split the debt service and utilities. For the start-up this was far cheaper than the office options they had explored and far more comfortable. The living room, dining room, kitchen, and one bedroom would be shared by the business while Barbara was at work. Barbara and the kids each maintained a private bedroom. The key to the success of the concept was the separation of stuff in the shared space. Barbara contacted the head of the architecture dept. of a nearby university and posted a want-ad for a design project. A short description was included and of course a student responded within days. In addition to a little money beyond materials what the student needed was a practicum for credit. For that the student required they document the process. No problem.

Barbara suggested the student set up shop in the garage. He did. And what he fabricated was a set of three modular storage cubes on wheels. During the work day they opened to include the work surfaces, and communication storage areas that were needed, and at the end of the day, were secured and rolled against a wall, out of Barbara and the kids' way.

The kicker was that when the project was finished, the student suggested that he could retrofit the garage and create an apartment for himself in the space. He did. You will be pleased to know that Barbara is secure in the house, the start-up has positive cash flow, and the city certified the garage as a legal ancillary space.

Wednesday, November 11, 2009

They're Back

They're back:
From the gang that brought you the economic collapse of 2008.

The building and allied trades, has been the most successful economic enterprise in human history. They formed a perfect alliance with government at all levels, becoming the largest donor in most campaigns. The result has been the pairing of interests so that government revenue is tied to developer success in bringing tax generating projects to ground.

The fact is that to develop, the building industry needs land. In the past they supported planning and development boards that ripped out entire neighborhoods in all of our major metropolises, giving them the space they needed to construct new projects. They created language,"highest and best use", that sanctified the process. They determined what the half life of a building was and if creative destruction wasn't rapid enough, they destabilized entire neighborhoods by red-lining, lax policing, or finding some other incentive (removal of politically weak minorities). In one of the more amazing acts of political manipulation the building industry got tax payers to foot the bill for the Impacts, (costs of schools, water treatment, public safety) of their developments.

They supported "white flight" and built the suburbs that sprawled across the countryside. When the price of gas rose, and it appeared there might be advantages to inner city living, they stimulated gentrification and created new "workforce" housing near the plants that hired the former inner city resident they displaced. They got highways and ramps built to facilitate access to their projects again at tax payer expense.

This kind of manipulation is not easy and they need the appearance of independent thinkers to rationalize their behavior. For example, when an argument is needed to support the myth that more building will create a bigger tax base, it helps to have a think tank to create the story.

To that end the industry created the Urban Land Institute (ULI). This group includes every major mortgage bank, builder, developer, real estate sales firm, and even many government agencies send representatives as members. They publish, hold conferences, train youth, and steer development by creating trend analysis.

Some of their hits include urging the FED to support the idea that everyone deserves to own a home, and deregulating the banking practices that stood in the way of loans for people who couldn't afford them. They got the right of eminent domain to include taking private land for the benefit of private developers. They made it illegal to have more than one head of household in a residence, and saw to it that there was a strict separation of work and living spaces. They define what space is, what building material can be used to create it, and who can build the space, all in an attempt to suggest a shortage of available space, creating the opportunity for yet more building.

Every effective monopoly overreaches and in this case they created a doozy. In the wake of the disaster of their overbuilding, over leveraging, and over lending, they have created the greatest economic debacle in the history of mankind.

They have an enormous problem. After transferring the blame for the collapse on the hapless home owner, they have to concoct another scheme to keep their engine going. They count for over half of the national economy. Talk about "too big to fail". They use other people's money and even the average citizen is starting to get the fact that if they fail, we pick up the tab.

Opportunities are being created as I write this. They are creating new wastelands,
taking down structures they couldn't sell and turning their backs on the suburbs they created.
The effect of this on the individual is to wipe out a lifetime of saving, belie the myth the real estate is a good investment, and that home ownership, as defined by the industry, is a noble objective. The industry needs a new set of suckers, and it is setting about creating them.

The ULI concluded their annual conference in San Francisco last week and their proceedings are fascinating. Here are some highlights:
ULI "Icons" have advice they share with attendees.

Emerging Trends in Real Estate®, released this week at ULI’s Annual Fall Meeting in San Francisco.
Emerging Trends predicts that investment and development will start to pick up steam in a couple of years. In the meantime, those who are in a position to do so should buy or hold multifamily; buy hotels; buy distressed condos and second homes; buy land; buy or hold industrial; hold office; and apply a "triage" approach to retail.
Looking past the recession, "The future is about green development, infill, and transit-oriented development."

The panel discussed two main demographic groups that will drive the next decade’s housing market: Generation Y and their parents (the aging baby boomers). Looking past the recession, "The future is about green development, infill, and transit-oriented development."

In other words: If they play their cards right, they can get a whole new generation of people with no experience to buy the idea that they are going to build them the green future we demand. As for their parents, who they just wiped out, and the brown and black immigrants who barely speak the language, they will validate new multiple family dwellings.

And they concluded: "The bad news is that it is unlikely that enough new housing can be built in urban areas to meet this growing demand. The result is likely to be rising urban housing costs--good for developers and owners and bad for homebuyers and renters with limited funds."

Let me tell you what that means in plain english. When a developer applies to the commission of a "built out" city for permission to build yet more, higher, denser property for which he is not willing to contribute additional costs of operating the services that are necessary to sustain it, and is requesting public money and tax forgiveness, he will use the argument that the new young workers need these places if they are to move here, and it will increase the tax base.

The city will fall deeper in debt, the tax burden will increase, and a new class of home buyers will suffer the ravages of the second wave of housing destruction.

The reality as reported by Fortune Magazine is more realistic.

Wednesday, November 4, 2009


We read the
NYT story on the destruction of bikes in the Paris share program with sadness. The French sociological perspective is that the program is troubled by the inequality of persons who are acting out a salvo of class warfare. Could be.

I lived through the Provo white bike program in Amsterdam and witnessed the same destruction 35 years ago. That failure and evidence that humans seemingly won't maintain that in which they have no personal stake, motivated the antipathy of The Tragedy of the Commons thesis of Garrett Hardin. He was wrong then and those who snicker are wrong now. But not nearly as wrong as the silly but well intentioned civil servants in Paris, and their followers, constructing complex multi million dollar bike rental programs complete with corporate sponsors. (In the day, you went to a bike rental store and borrowed a bike).

I think the most important contributing factor in the Paris Debikel is the fact that the bow ties who designed this program had NO street smarts! I am afraid that they represent the legions of sustainable opportunists who believe that the answer to our environmental problems will be to build our way out, create green jobs, and be the next cool thing in the process.

Smart city dwellers know that their commuter, around town bike, is likely to be stolen. They buy them by the thousands for tens of dollars. They scrounge the millions of summer rentals that are blown out at the end of a season. They reclaim the bikes of the graduating college kids who leave them as they move on. They buy them at yard sales from people who are moving up or out of the sport. They know that police auctions are a great place to buy a bike on the cheap. Millions of bikes are retrofitted every year by smart riders looking for a set of wheels. Some of these recycled bikes are the stuff of legend.

Smart cities are adapting programs that begin with biker's needs. Bike stations are becoming more widespread The problems of commuting to work are being addressed and are discussed at length here.

That is not to say that bike sharing is doomed. Three days before the Paris story ran the Times featured a group ride to a Princeton based program.

There's hope. It just might be class warfare.