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Sometimes people
ask me how we -- Americans in particular, who have dug their Suburban Hell
hole the deepest -- can transition to a Traditional City/trains format.
June 6, 2010: Transitioning to the
Traditional City 2: Pooh-poohing the Naysayers
May 23, 2010: Transitioning to the Traditional City
The first step, as I noted earlier, is that you have to have some idea of
what you want to create. Obviously, you can't create it if you can't imagine
it. In fact, there are actually quite a few people, both "New
Urbanist" types and even some more commercially-minded property
developers, who want to create something like the Traditional City, but since
they haven't been able to imagine it properly, their results have basically
been a failure.
So, the first step is to be physically, mentally, and creatively capable of
making something that is worthwhile -- nay, that is a shining example to
future generations of the excellence of our civilization. But then, somewhere
along the line, someone is going to have to make a profit with the
Traditional City. Once this happens, consistently, then the transition will
be well underway.
All sorts of amazing things can happen when people start to turn a profit.
Look at wind turbine development, for example. While making electricity from
the wind might be a good idea on a lot of levels (although with some problems
like any real-world activity), the reason that there have been hundreds of
billions of dollars invested in wind turbine development in recent years,
worldwide, is because it provides an adequate return on capital. This was a
tree-hugging fantasy a decade ago. It might take some government subsidies to
make it profitable, but so what. (Many will argue that this simply mirrors
the hidden subsidy of fossil fuels, thus "leveling the playing
field" somewhat.) The fact that wind turbines are considered
"cool" today helps, but you still need to make that hurdle IRR.
Just imagine if hundreds of billions of dollars a year were invested,
today, in Traditional City development. We would just stop making so many
suburbs and start making some Traditional City neighborhoods instead. It's
the same amount of work. There is no "extra" spending or effort. In
2000, for example, the GDP statistics show that $449 billion dollars were
invested in residential strucutres, in the U.S. alone (not to mention the
rest of the world!). Another $318 billion was invested in nonresidential
(commercial) structures, such as office buildings, retail, hotels,
warehouses, factories and the like. I pick 2000 as a year that was not really
a bubble (in property), and not really a recession either. This was 4.5% of
GDP for residential structures alone, and 7.7% when you include commercial structures.
In 2009, 7.7% of GDP would translate into $1,087 billion.
Let me say that again: on average, smoothing out the boom/bust cycles, we are
spending about a trillion dollars a year on structures. Right now. Today. Not
including land costs, just construction. Not to mention government spending
on Suburban Hell infrastructure, like roadways, paid for with your tax
dollars. So, if half of that spending represented Traditional City type
development, and the remainder Suburban Hell development as is already going
on, then that would be $544 billion a year of spending on Traditional City
development, just construction costs alone without land costs, and more if
you include Traditional City government spending, and more still if you
consider transportation-related spending in the Traditional City/train
format.
One estimate
showed that, in 2001, there was $130 billion in total spending on U.S.
highways and roads, plus another $849 billion spent on personal automobiles.
It works out to 9.5% of GDP, which would be $1,344 billion today. So, there's
another $1,344 billion we spend every year, to maintain our Suburban
Hell/personal autos system. If we took half of that spending, and used it for
Traditional City/trains instead, that would mean another $672 billion
every single year devoted to building out the Traditional City/trains
pattern.
Combined with spending on structures, it adds up to 7.7%+9.5%=17.2% of GDP
that goes directly into building/maintaining Suburban Hell+personal
automobiles. If we put half of those resources towards building/maintaining
the Traditional City+trains instead, we would have about $1,216 billion
every single year of spending on the Traditional City+trains. Just
imagine what it would look like if we spent $1,216 billion (or 8.6% of GDP)
every year for ten years on the Traditional City+trains. That would be along
the lines of:
TWELVE TRILLION
BUCKS
... in total, over ten years. Actually more, if GDP grows as one would
expect. That is only for the U.S. What if the Traditional City concept
catches on elsewhere in the world -- as it should, since people in the rest
of the world are already living in Traditional Cities built by their
ancestors, and enjoying it? On a planetary basis, we could be looking at more
like ... fifty trillion bucks over ten years.
The point being: if you can make an adequate profit, the amount of resources
that can be directed into Traditional City+trains development is quite
stunning in its total scope. People say that "we don't have the
resources to build the Traditional City." Baloney. We have only a
trillion bucks a year, and that is even if we leave 50% for those who
prefer the McMansion/Lexus pattern. And if there was some sort of
super-disaster where the productivity of the economy declined by ninety
percent, we would still have the labor and resource equivalent of a
hundred billion bucks a year, in today's money, to build the best Traditional
City ... that we can imagine.
We've looked at the Traditional City from a number of angles. It just plain
looks good. It's fun to live in. It's cheaper, in terms of living expenses.
Resource demands are drastically reduced, and it's much better for the
environment. It's even easier to build. It's a winner from every angle (there
are more angles to come), the only real drawback being: it's hard to get
there from here.
March 14, 2010: The Traditional City: Bringing It All Together
Now let's look at a different angle: potential profitability.
The fact of the matter is, U.S. property developers -- the people who
actually build buildings, and sell/rent them for profit -- have already been
moving toward Traditional City ideals in recent days, in many situations. Not
all situations, of course, but you can see this trend pop up over and over
again.
One of the recent trends among developers, for example, is the combination
enclosed shopping mall and condo development. You can walk, or take the elevator,
right from your condo to the shopping mall.
Malls, the Future
of Housing?
http://www.housingwire.com/2008/12/29/malls-the-future-of-housing
The mall as we know it today is a mistake.
... In its newest incarnation, the mall has finally become not just a place
to shop, but to live. The mortgage meltdown, shifting demographics and a
growing antipathy toward suburban sprawl have caused developers to see malls
not as retail dinosaurs but as giant land banks, where going vertical can
appease environmentalists, potential buyers and stockholders alike.
It’s happening slowly, but it’s happening all over America, and
industry experts expect the trend to grow. If inner cities are starting to
see condo projects go rental or remain unsold, and some new suburban
subdivisions are settling into modern ghost towns as the foreclosure crisis
deepens, the one bright spot in the housing market might just be here: at the
mall.
“This is not just a fad,” says Anita Kramer, senior director for
retail development at the Urban Land Institute. “This is the wave of
the future.”
Roll right out of bed and into the mall
Condos, lofts going up at retail meccas around Valley in housing trend
Erica Sagon
The Arizona Republic
Aug. 9, 2005 12:00 AM
http://www.azcentral.com/arizonarepublic/news/articles/0809retailresidential09.html
Many people in the Valley already feel that shopping centers have become
their second homes, but soon they literally will be able to live at the mall.
Hundreds of condominiums and lofts are in the early-planning stages for
Valley malls, both existing locations and malls still on the drawing board.
Thirty lofts already exist at Kierland Commons in north Phoenix. A project is
in the works at SanTan Village in Gilbert. And housing has been built along
with other shopping centers across the country as part of developers' efforts
to reinvent the role of the shopping mall.
How about those
Baby Boomers and Silents who made every sacrifice for their Suburban
McMansion in the 1970s, 1980s, and 1990s? Mowing the grass every Saturday --
and paying off that backbreaking mortgage -- gets a little old. Been there.
Done that. Wasn't really what it was cracked up to be.
Condo living has
become ever so popular for retirees in this country. More
and more retirees are choosing this type lifestyle so that they can focus
their time on traveling, hobbies and spending more time with friends and
family.
http://www.seniorcommunityguide.com/condo-living.htm
Of course, the
"condo+mall" idea is really a super-crappy version of the Traditional
City residential/commercial combo.
"Condos," Traditional-City style, with retail at street level.
Spain.
"Condos" and street-level retail. Segovia, Spain.
Street with shops, townhouses, apartments. Kyoto.
Ski resorts have been trying to combine their slopes and lifts with
"European-styled alpine villages," including in-town condos. Maybe
the 3000 square foot log cabin ten miles from town, with a couple Chevy
Suburbans to get to the slopes, is falling out of fashion?
Town of Mountain Village
A Modern European Alpine Village
Perched at 9,500 feet, Mountain Village is an intimate alpine enclave with
luxury hotels and condominiums, stylish boutiques and innovative dining. Home
to the state-of-the-art Telluride Conference Center, and world renowned
hotels lumiere and Capella Telluride, this European-styled alpine village
provides unsurpassable scenic ambiance with an emphasis on guest service. Ski
runs meander through the town, giving many homes, condominiums, and hotels
direct ski access to the slopes. All elements combine to create a modern
alpine elegance to complement the rustic charm of Telluride.
http://tellurideskiresort.com/TellSki/info/summer/mountain-village.aspx
Unfortunately,
most of these attempts don't come anywhere near the fabulosity of a real
Traditional City. Anyone going to compare Mountain Village, Telluride, with a
real European alpine village?
Mountain Village, Telluride Colorado.
Ehhhh. Could be worse, but ... not really inspiring. Is this supposed to be
some kind of wonderful environment for pedestrians? Some kind of world-famous
destination for travellers? How many people do you see in this picture? A big
fat zero.
Look how many of the buildings are actually buffered from the street with
Green Space.
Mountain village, Switzerland. Pretty good, although you know that I would
prefer some Really Narrow Streets. This is more like an "arterial"
street. Maybe the Really Narrow Streets are off to the side.
No Green Space here. Also, note how we now have some people appearing in the
scene.
YESSSSS!!!!!!
Zermatt, Switzerland.
This is a proper Really Narrow Street pedestrian environment.
From the
standpoint of profitability, which do you think is going to be more
profitable?
a)
building something that sucks
b) building something that is fabulous, but costs the same price or less
than something that sucks.
Look at these photos. If you were going to make a ski resort village, do you
think you're going to make a bigger profit with the one on the top or the one
on the bottom?
From the place that nobody wants to go to, or the place that everybody
wants to go to?
We will continue our discussions on how to make a boatload of money from the
Traditional City in the future.
Nathan
Lewis
Nathan
Lewis was formerly the chief international economist of a leading economic
forecasting firm. He now works in asset management. Lewis has written for the
Financial Times, the Wall Street Journal Asia, the Japan Times, Pravda, and
other publications. He has appeared on financial television in the United
States, Japan, and the Middle East. About the Book: Gold: The Once and Future
Money (Wiley, 2007, ISBN: 978-0-470-04766-8, $27.95) is available at
bookstores nationwide, from all major online booksellers, and direct from the
publisher at www.wileyfinance.com or 800-225-5945. In Canada, call
800-567-4797.
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