Build-to-Rent and the financialization of rental housing: future research directions

Abstract

With the expansion of institutional investors into urban rental markets, many cities have witnessed a rise in Build-to-Rent (BtR). This article reviews the financialization of rental housing literature and identifies opportunities for urban housing scholars to progress understandings of BtR through future empirical and theoretical efforts. In particular, it proposes a broadening of the housing research agenda around three analytical entry points. These entry points relate to relatively understudied structural transformations of our urban housing systems implicated in the rise of BtR, namely: (1) the diversification of build-to-sell development models; (2) the evolution of the private rental sector; and (3) labour market–housing market realignments. Comparative inquiry promises to enrich understandings of BtR by revealing how city rental accommodation and tenancies are recalibrated by the investment imperatives of institutional investors and BtR asset shareholders, and with what benefits and at what costs to whom. Such contributions will also provide rich data to progress conceptual efforts to locate BtR within broader processes of housing financialization.     

Implementation as more than installation: a case study of the challenges in implementing green infrastructure projects in two Australian primary schools

ABSTRACT

Green infrastructure delivers a range of benefits for urban water management, amenity, human well-being, and ecosystem health. However, the implementation of green urban infrastructure can be challenging, whether in private or public spaces. In Australia and elsewhere, there is increasing investment in green infrastructure projects in schools. To date, the implementation issues experienced in schools have not been investigated. This article reports on a case study of the range of factors influencing implementation of green infrastructure projects in two primary schools in Melbourne, Australia. Interviews with diverse stakeholders in these projects revealed four key areas of concern for implementation: 1) professional roles and relationships; 2) planning and design; 3) value to the school community; and 4) engagement of the broader community. We conclude that successful implementation is not simply the installation of well-functioning green infrastructure; rather, it is an ongoing achievement that is as social as it is technical.     

The Intersection of Planning,Urban Agriculture,and Food Justice: A Review of the Literature

Problem, research strategy, and findings: We draw on a multidisciplinary body of research to consider how planning for urban agriculture can foster food justice by benefitting socioeconomically disadvantaged residents. The potential social benefits of urban agriculture include increased access to food, positive health impacts, skill building, community development, and connections to broader social change efforts. The literature suggests, however, caution in automatically conflating urban agriculture’s social benefits with the goals of food justice. Urban agriculture may reinforce and deepen societal inequities by benefitting better resourced organizations and the propertied class and contributing to the displacement of lower-income households. The precariousness of land access for urban agriculture is another limitation, particularly for disadvantaged communities. Planners have recently begun to pay increased attention to urban agriculture but should more explicitly support the goals of food justice in their urban agriculture policies and programs.

Takeaway for practice: We suggest several key strategies for planners to more explicitly orient their urban agriculture efforts to support food justice, including prioritizing urban agriculture in long-term planning efforts, developing mutually respectful relationships with food justice organizations and urban agriculture participants from diverse backgrounds, targeting city investments in urban agriculture to benefit historically disadvantaged communities, increasing the amount of land permanently available for urban agriculture, and confronting the threats of gentrification and displacement from urban agriculture. We demonstrate how the city of Seattle (WA) used an equity lens in all of its programs to shift its urban agriculture planning to more explicitly foster food justice, providing clear examples for other cities.     

Canberra: Myth versus reality

Abstract

Since the onset of the recession in 1976 the Canberra urban economy has undergone radical change. This paper analyses this change in five interrelated areas: demographic structure, socio-economic ‘well-being’, housing availability, public investment and private investment. Government policies and an inadequate planning response have exacerbated the recessionary impacts. Selected planning responses are discussed with a view to further debate.     

Urban Heat Management and the Legacy of Redlining

Abstract

Problem, research strategy, and findings: Historical patterns of discrimination and disinvestment have shaped the current landscape of vulnerability to heat in U.S. cities but are not explicitly considered by heat mitigation planning efforts. Drawing upon the equity planning framework and developing a broader conceptualization of what equity means can enhance urban heat management. Here I ask whether areas in Baltimore (MD), Dallas (TX), and Kansas City (MO) targeted for disinvestment in the past through practices like redlining are now more exposed to heat. I compare estimates of land surface temperature (LST) derived from satellite imagery across the four-category rating system used to guide lending practices in cities around the United States, summarize the demographic characteristics of current residents within each of these historical designations using U.S. Census data, and discuss the connection between systematic disinvestment and exposure to heat. LST and air temperatures are not equivalent, which makes it difficult to reconcile existing research on the human health impacts of heat exposure that rely on a sparse network of air temperature monitoring stations with more granular LST data. Areas of these cities that were targeted for systematic disinvestment in the past have higher mean land surface temperatures than those that received more favorable ratings. Poor and minority residents are also overrepresented in formerly redlined areas in each of the three study cities.

Takeaway for practice: By examining areas that have experienced sustained disinvestment, cities may be able to more quickly narrow the focus of heat mitigation planning efforts while furthering social equity. Efforts to mitigate the negative impacts of rising temperatures in U.S. cities must be tailored to the local climate, built environment, and sociodemographic history. Finally, geospatial data sets that document historical policies are useful for centering and redressing current inequalities when viewed through an equity planning lens.     

Citizen vs. customer: Different approaches to public participation in service delivery in Cape Town

Conclusion The neo-liberal shift in how public authorities shape the subject at the local level must be contextualized as part of the structural transformations of local government in decentralizing its core responsibilities for the provision of collectively consumed goods to a more-market-oriented interpretation of being a service enabler. This global trend certainly influenced South African debates during the transition period on the vital role of local government in rebuilding a deeply- divided society while simultaneously entering the global economy. We have reviewed the outcomes of these macroeconomic and social tensions on the development agendas of the City of Cape Town. The post-apartheid South African state was deeply committed to democratization, as illustrated through an extensive set of pieces of legislation designed to incorporate public participation in service delivery. In this article, we have shown how local government has grappled with implementing procedural equity through the notion of Developmental Local Government. We have reviewed the institutional limitations to implementing public participation mechanisms that were part of the goals of DLG, such as the RDP and IDP fora. We then illustrated two competing visions of development within local government and how these visions shaped the practice of service delivery in the city. The MSD prioritized efficiency in service delivery and in doing so shaped the subject as a customer. Alternatively, COMDEV prioritized equity and in doing so shaped the subject as a citizen. These different approaches to service delivery significantly shape the development trajectory of low-income communities. Ahmedi Vawda is in national government as Deputy Director General of Housing.     

The Proof of the Planning Is in the Platting: An Evaluation of Florida's Hurricane Exposure Mitigation Planning Mandate

Problem: In his “Competitive Advantages of the Inner City” papers, Michael Porter maintained that comparative advantages of inner-city economies, once recognized, would lure profit-motivated investors to start new ventures and expand existing businesses in these areas. Porter stressed limited access to financing as a major barrier to inner-city economic development and its expanded provision as a remedy.

Purpose: I consider whether Porter's claims match the evidence.

Methods: I investigate both private and government-assisted providers of debt and equity capital to inner-city businesses that appear to exhibit Porter's competitive advantages. I distinguish successful inner-city business financing operations from those that are unsuccessful and use these results to draw lessons about effective and ineffective strategies for increasing inner-city businesses’ access to financing.

Results and conclusions: Lack of financing appears to be an important barrier to inner-city economic development, as Porter concluded, but the comparative advantages he thought made the inner city attractive to profit-seeking investors have not been demonstrated. Porter asserted that inner-city households seeking to buy consumer products were underserved by local firms. However, other researchers did not find this to be the case and new business ventures serving this market have had poor profits and poor rates of survival over time. Porter's revitalization blueprint aimed to create jobs and sustainable businesses to benefit inner-city residents, yet evidence indicates that inner-city firms largely meet their staffing needs by employing workers living outside the inner city. Private venture capital investment in the inner city has not generated attractive returns. However, inner-city lending can be profitable under the right conditions.

Takeaway for practice: There is a lack of business financing available to fund the creation and expansion of inner-city ventures, creating a barrier to inner-city economic development. However, my case studies illustrate that private lenders can be profitable in this market if they have: (a) a sufficiently large and diverse portfolio of investments; (b) lending policies requiring sufficient collateral or loan guarantees to offset defaults; and (c) skilled, experienced, professional managers.

Research support: None.     

Whiteness and Urban Planning

Abstract

Problem, research strategy, and findings: The ability of planning to address America’s urban problems of inequality, crime, housing, education, and segregation is hampered by a relative neglect of Whiteness and its role in shaping urban outcomes. We offer a justification for centering Whiteness within urban planning scholarship and practice that would examine its role shaping and perpetuating regional and racial injustices in the American city. The focus of planners, scholars, and public discourse on the “dysfunctions” of communities of color, notably poverty, high levels of segregation, and isolation, diverts attention from the structural systems that produce and reproduce the advantages of affluent and White neighborhoods. Planners and planning scholars frequently invoke a “legacy of injustice” with regard to concentrated poverty and disadvantage but not in regard to neighborhoods of White affluence. One is segregated and problematized and the other is idealized.

Takeaway for practice: Planners and planning scholars need to understand the role of Whiteness, in particular White affluence, to assess the potential impacts of planning interventions. Doing so will inform a wider range of planning approaches to problems of racial and spatial equity.     

Without zoning: Urban development and land use controls in Houston

Houston is the only major city in North America without zoning. The growth of Houston illustrates a traditional free market philosophy in which land use zoning is seen as a violation of private property and personal liberty. This paper explores how the lack of zoning has an impact on land use controls and urban development in Houston. Using a theoretical framework derived from institutional economics and public choice theories for institutional analyses of land development controls, it explores how local land use policies made by both the local government and non-governmental sectors shape urban development in Houston. The study results show that despite the city’s lack of zoning, local land use regulatory policies made by the municipality have significant influence on urban development. Additionally, civic and private organizations such as super neighborhoods and homeowner associations fill the gaps left by the lack of land use zoning. These two aspects contribute to land use controls and urban development of the city. The study finds that land use controls by private contract and by government legislative intervention are not mutually exclusive or immutable; that equity goals are not met in market approaches, and public planning intervention is necessary; and that deed restrictions might be better at facilitating property sales and maintenance than at improving neighborhood welfare and governance.     

How Art and Culture Happen in New York

Problem: In the last two decades, urban economic development has shifted its focus from industrial recruitment to talent and human capital, including art and culture. Many have argued that talented people are drawn to artistic and cultural amenities, but few have examined art and culture as a production system and drawn meaningful insights for urban planning and economic development based on understanding its inner workings.

Purpose: This article looks closely at the mechanisms that structure and drive the cultural economy and suggests possible avenues for cultural economic development and policymaking based on these mechanisms. I focus on the ways cultural producers obtain jobs, advance their careers, gain value for their goods and services, and interact with each other.

Methods: I conducted 80 interviews with cultural producers, cultural gatekeepers, and owners and managers of entertainment venues these groups frequent.

Results and conclusions: I find that not only are artistic and cultural producers densely agglomerated, but that key social mechanisms structure and inform this clustered production system. These industries depend on unique kinds of social interaction, from nightlife to gallery openings, to thrive. This is more than just fun and games, and is critical to the operation of this economic sector.

Takeaway for practice: Cultural producers rely heavily on their social lives to advance their careers, obtain jobs, and generate value for their goods, so that the local arts social milieu is critical to the cultural economy. Cultural producers also tend to cross-fertilize, collaborating to create goods and services, review each other's products, and establish new careers, meaning the ability to live and work in close proximity to one another is important. Finally, a large concentration of creative people and an active cultural milieu has made New York culture a known brand. While New York is unique, the cultural life of other cities and regions can also be economic development assets. Places can strategically cultivate the social milieus that are most conducive to the production of art and culture.     

Vernacular Culture and Urban Economic Development: Thinking Outside the (Big) Box

Problem: This article addresses the increasing homogeneity of urban commercial areas and the loss of local culture associated with this trend. It seeks to identify strategies that build effectively on vernacular culture as an asset in neighborhood development.

Purpose: We aim to identify tools that advance the cultural preservation approach to urban economic development and to describe instances in which planners and neighborhood groups have applied these tools successfully.

Methods: We completed a wide-ranging literature review to identify the characteristics of places that have employed cultural preservation approaches and conducted six case studies involving 43 interviews in five cities.

Results and conclusions: Our interviews and case studies showed us that there are at least three types of anchors in neighborhoods with strong vernacular culture: 1) markets; 2) ethnic areas and heritage sites; 3) and arts-and-culture venues and districts. Although the balance between preservation and development will be different in each place, we did cull some widely applicable lessons learned while conducting our fieldwork: a) involve residents; b) find assets in local needs; c) transfer lessons rather than replicating others' work; d) create opportunities for ownership; e) if it doesn't exist, invent it; and f) balance culture and commerce. Our analysis also suggests that a neighborhood wishing to pursue a neighborhood development strategy based on vernacular culture should have at least one of the anchors listed above and strong, community-based organizations.

Takeaway for practice: We argue that it is both possible and preferable to advance an urban economic development strategy based on the local cultural assets that exist in urban neighborhoods. Our research illustrates different paths that places have taken to advance this kind of strategy and provides several ways for local planners and policymakers to integrate the maintenance of vernacular culture into their larger economic development plans.

Research support: Our research was supported by the Fannie Mae Foundation.     

Fair Shared Cities: The Impact of Gender Planning in Europe

ABSTRACT

The existing literature suggests that gated communities and master-planned estates represent a form of private governance. They are a response to the state’s retreat from providing public goods. In post-reform China, newer residential development projects also take the form of gated neighbourhoods. To what extent do these neighbourhoods represent a new form of “private governance”? Results from the perspective of residents reveal that the meaning of “private governance” refers to services delivered by private organisations rather than self-governance. Gated neighbourhoods in urban China are a response to the state’s intention to retreat from serviced land provision while retaining neighbourhood control.     

Urban sprawl and municipal budgets in Spain: A dynamic panel data analysis

Urban sprawl has recently become a matter of concern throughout Europe, but it is in southern countries where its environmental and economic impact has been most severe. This low‐density, spatially expansive urban development pattern can have a highly marked impact on municipal budgets. Thus, local governments may see sprawl as a potential source of finance, in terms of building‐associated revenues and increased transfers from upper tiers of government. At the same time, sprawl leads to increased levels of expenditure, as it may raise the provision costs of certain local public goods and requires greater investment in extending basic infrastructure for new urban development. What, therefore, is the net fiscal impact of urban sprawl? Do local governments consider the long‐run net fiscal impact of new urban growth or do they simply focus on its short‐term benefits, ignoring future development costs? This paper addresses these questions by analysing the dynamic relationship between urban sprawl and local budget variables. To do so, we estimate a panel vector autoregressive model using data for 4,000 Spanish municipalities for the period 1994–2005. Computed generalized impulse response functions show: (i) that sprawl considerably increases demand for new infrastructure; (ii) that the capital deficit generated by this new infrastructure is covered in the main by intergovernmental transfers and, to a lesser extent, by revenues linked to the real estate cycle; and (iii) that sprawl leads to a short‐term current surplus, as the increase in current revenues offsets the increase in current expenditures due to public service provision for new developments. Overall, these findings point to a moral hazard problem for local governments in which inordinate intergovernmental transfers and development revenues encourage excessive urban sprawl.     

When Do Plans Matter?

Abstract

Problem, research strategy, and findings: Plans often sit on the shelf and fail to promote action. This raises the question of how and when plans matter. This is especially important in sustainability planning where local governments are more likely to take actions with short-term benefits that are easy to adopt. How can planners promote more sustainability actions, especially those with longer term benefits? In this study we examine factors influencing local sustainability actions by tracking 651?U.S. local governments’ adoption of 34 sustainability actions from 2010 to 2015. We differentiate places that recently adopted a sustainability plan from those that have had a plan for a longer period and those that have never adopted a sustainability plan. We use difference-in-difference (DID) modeling to assess what effect plans have on the level of sustainability actions. We find a plan may have its greatest effect in motivating actions when it is newly created. Places that adopted a plan between 2010 and 2015 exhibited a significant increase in sustainability actions during those same years. By contrast, places that already had a plan in 2010 showed higher initial levels of sustainability actions but did not show a higher level of growth in the number of actions adopted compared with places without plans. In general, we find local governments with higher levels of sustainability actions articulate social equity goals, devote staff and budget resources to the effort, engage the public, and promote interdepartmental coordination. Local governments under Republican control enact fewer sustainability actions.

Takeaway for practice: Sustainability plans are most effective in spurring local sustainability actions when they are newly created. However, this initiation impact in motivating actions wanes over time. Promoting continued adoption of sustainability actions requires a comprehensive approach with attention to political support, public participation, social equity, interdepartmental coordination, and local capacity.     

Transport Characteristics and Policy Implications for Four Australian Cities

Abstract

The smaller capitals have larger levels of vehicular travel per head than the larger capitals and are more dependent on private transport, due mainly to greater non-work trip frequencies. Policy approaches are examined for reducing vehicular travel through increasing travel costs, changing land-use patterns and modifying people's values and attitudes to urban vehicular travel.     

Globalized Freight Transport: Intermodality,E-Commerce,Logistics and Sustainability

Problem, research strategy, and findings: Recent research reveals growing spatial disparities in warehousing-related environmental externalities, including air pollution and traffic safety concerns, across municipalities. The existing research, however, fails to present how institutional factors contribute to spatial variations. In this study, I explore how variations in planning practices contribute to the different trajectories of warehousing development. I interviewed planners, local residents, warehousing developers, and regional agency staff to identify local planning practices and policy elements that affect the location choice of warehousing facilities. My results show land use policies (land use permission, industrial zoning, and land parcel division schemes), job-related policies (job creation initiatives and job density requirements), financial incentives (tax rates and financial incentives), and environmental regulations (building design, land use buffering, and landscaping) are the major planning elements that affect warehousing development. Relative to brownfield redevelopment in the municipalities close to the urban core of a metropolitan area, developing greenfield warehousing facilities in suburban cities is likely to cause more environmental concerns in the near future. However, unmeasured factors could be responsible for some of the warehousing development patterns I find in the data.

Takeaway for practice: Knowledge, communication, and collaboration are needed to cope with the rapid growth and, in particular, the disproportionate concentration of warehousing-related environmental externalities in certain municipalities. In this study I also provide planning strategies to regulate excessive warehousing development, including land use- and job-related policies, financial incentives, and environmental regulations. With these strategies, planners in warehousing-intensive cities can determine the best way to reduce the impacts of environmental externalities on local communities in the long term.     

Complementary Pricing and Land Use Policies: Does It Lead to Higher Transit Use?

Problem, research strategy, and findings: A shift toward more sustainable transportation requires both adequate pricing of externalities from driving and supportive land use policies. However, proponents of each approach often under-estimate the complementarity and potential synergy between them. This study investigates the interaction effects between gasoline prices and land use (policy) variables using a panel dataset of transit ridership in 67 urbanized areas between 2002 and 2010. We found that while doubling the average gasoline price would increase transit ridership by 8.4% in an urbanized area with mean density and no regional containment policy, in areas with slightly higher density and a regional containment policy, the impact of higher gasoline prices would rise to 21%. In communities that had adopted a package of smart growth land use options, the impact of higher gasoline prices on transit use is even greater.

Takeaway for practice: Pricing schemes will be more effective where alternatives to automobility and supportive land use policies exist. The impacts of urban form on travel behavior are also strengthened when driving externalities are correctly priced. Planners and policymakers should take advantage of the complementarity between pricing and land use planning approaches by implementing policies in combined and well-coordinated ways.     

Inter‐city migration and policy*

Optimal allocation of people between heterogeneous cities is studied in a club model. Because of externalities, migration alone cannot yield efficiency. First‐best optima are feasible, if the externalities are properly internalized to people's decisions by local or national policy. Yet, implementation of these policies suffers from instability problems and too exacting information requirements. Joint local‐national policy based on individual welfare is superior in these respects. In club theoretic terms, the main finding is that total‐economy viewed policy‐making is not necessary to evoke first‐best efficiency even when the number of non‐homogenous clubs is fixed. In other words, resting on standard Pigovian and Coasian patterns is not needed. Se estudia la asignación optima de individuos entre ciudades heterogéneas en un modelo de club. Debido a las externalidades, la migración por sí sola no puede conllevar eficiencia. Lograr óptimos del mejor primero (first‐best) es factible si las externalidades se internalizan adecuadamente a las decisiones de los individuos mediante políticas locales o nacionales. A pesar de ello, la implementación de estas políticas padece problemas de inestabilidad y requerimientos de información demasiado rigurosos. Las políticas conjuntas locales‐nacionales basadas en el bienestar de los individuos son superiores en este aspecto. En términos de teoría de club, el hallazgo principal es que la formulación de políticas bajo la visión de economía total no es necesaria para insinuar la eficiencia del mejor primero, incluso cuando el número de clubs no homogéneos es fijo. En otras palabras, no es necesario el apoyarse en patrones pigouvianos y coasianos.      

Greening the Rust Belt: A Green Infrastructure Model for Right Sizing America's Shrinking Cities

Problem: Existing planning and redevelopment models do not offer a holistic approach for addressing the challenges vacant and abandoned properties create in America's older industrial cities, but these shrinking cities possess opportunities to undertake citywide greening strategies that convert such vacant properties to community assets.

Purpose: We define strategies shrinking cities can use to convert vacant properties to valuable green infrastructure to revitalize urban environments, empower community residents, and stabilize dysfunctional real estate markets. To do this we examine shrinking cities and their vacant property challenges; identify the benefits of urban greening; explore the policies, obstacles, and promise of a green infrastructure initiative; and discuss vacant property reclamation programs and policies that would form the nucleus of a model green infrastructure right-sizing initiative designed to stabilize the communities with the greatest level of abandonment.

Methods: We draw our conclusions based on fieldwork, practitioner interviews, and a review of the current literature.

Results and conclusions: We propose a new model to effectively right size shrinking cities by (a) instituting green infrastructure plans and programs, (b) creating land banks to manage the effort, and (c) building community consensus through collaborative neighborhood planning. Our model builds on lessons learned from successful vacant property and urban greening programs, including nonprofit leadership and empowerment of neighborhood residents, land banking, strategic neighborhood planning, targeted revitalization investments, and collaborative planning. It will require planners and policymakers to address challenges such as financing, displacement of local residents, and lack of legal authority.

Takeaway for practice: We conclude that academics, practitioners, and policymakers should collaborate to (a) explore alternative urban designs and innovative planning and zoning approaches to right sizing; (b) collect accurate data on the number and costs of vacant properties and potential savings of different right-sizing strategies; (c) craft statewide vacant property policy agendas; and (d) establish a policy network of shrinking cities to share information, collaboratively solve problems, and diffuse policy innovations.

Research support: Our field work was supported by technical assistance grants and contracts through the National Vacant Properties Campaign.