The next real estate boom is already here

by Dan Krell © 2010
A couple of years ago, I wrote an article about a future real estate boom that would occur as suburbanites would seek out urban homes. As I discussed in my May 2008 article, peak gasoline costs and increased traffic compelled many to seek housing closer to their employment; as well as being close to metro and mass transit. A recent Brooking Institution report appears to agree with my premise, and expands on the idea of urbanite living with a focus on sustainable and walkable neighborhoods.

The November 2010 article titled “The Next Real Estate Boom” (Leinberger & Doherty; The Brookings Institution) discusses how baby boomers and their children have been increasingly seeking out housing that is close in vicinity to commercial spaces, mass transit, and easily traversable by foot (walkable). The article discusses how the development of high density neighborhoods will once again spur on real estate growth, and ultimately forge a new economy in the United States.

Although, Leinberger & Doherty proclaim that the great recession was the climax for the change from suburban to urban lifestyles; the trend has been increasing for the last two decades, but actually had roots much earlier with planned communities such as Columbia and Greenbelt (MD). And although his first planned walkable community of Cross Keys (in Baltimore) came to fruition in the 1960’s, there is no mention of James Rouse in the Leinberger & Doherty report. It must also be pointed out that recent planned local communities such as King Farm and the Kentlands were built in the spirit of walkable and sustainable communities.

Mid_Town_livingThe trend, as Leinberger & Doherty discuss, is toward shifting from sprawl to revitalization. However, urban renewal has gone through many cycles and forms of re-development in many cities; from the revitalization of New York City in the 1950’s, by Robert Moses who seemed to transform the city single handedly, to the revitalization of Baltimore’s Inner Harbor in the 1970’s;

Notably, the May 20th signing of the Sustainable Communities Tax Credit by Governor O’Malley highlights the focus on revitalization. The tax credit expands the current tax incentive beyond historic properties so development is encouraged to renew and revitalize existing local communities.

A prime example of what Leinberger & Doherty describe is the redevelopment of the North Bethesda corridor along Rockville Pike (MD 355). The White Flint Partnership has been advocating and promoting the revitalization of this community to become one of Montgomery County’s newest walkable and sustainable neighborhoods. The project is transforming the area into high density living with adjacent commercial development that is described by the developers as sustainable, accessible, safe, connected, and containing an abundance of green spaces.

Additionally, market demands have and will transform existing neighborhoods to become the walkable and sustainable communities that are becoming vogue. And it may be that suburban renewal will become the trend in the near future, as isolated sprawling communities will eventually transform into smaller versions of Leinberger & Doherty’s vision.

Maybe the point is not to transform all communities into the high density, walkable communities that exist in mid-town Manhattan, but aim higher in community planning. Their description of a high density urban utopia appears healthy for residents, due to increased physical activity (i.e., walking); and healthy for the environment, due to green and sustainable buildings as well as reducing car emissions.

Comments are welcome. This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of November 8, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

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