Conscious Development: Creating Places Where People Thrive

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Density and Intensity of Eureka Springs, AR

David Twiggs

When is development good?  Many projects and developers took a bad rap over the past few years as projects slowed or were abandoned in the wake of the real estate bubble bust.  I have found this a very interesting time as we have been able to really see the wheat separated from the chaff.  Real value became evident from the sales prices. Some communities held and even grew in value while other stagnated and declined. We can read endless statistics on trends in housing types, square footages, amenities and governance structures.  We can study the different margins offered by new construction techniques. Even after sorting through these, I can find clear examples of  communities that remain great places and seem to defy much of the statistical logic.  Exceptions to the rules so to speak, with varying degrees of buildout, widely different amenity focus and different community personalities.

After looking at hundreds of communities from the most successful to the worst failures, I believe that the communities that have sustainable success are those disciplined enough to keep a conscious focus on creating relevant value during initial planning and as the community matures throughout the years.  Often when we think of value in real estate, perceived value is top of mind.  This seems to stem from a bias to the sales point of view.  A marketers creation of urgency and desire to purchase a specific property is creation of  perceived value in the mind of the potential owner. Property must sell for developers to get return on investment and everyone to paid. Nothing wrong with getting paid for working hard.  I wouldn’t use a marketer who did not know how to create perceived value.  In common usage the term perceived value is used generically to say how a resident feels about their property.  However, as creators of communities, we need to sharpen our vocabulary and be specific in what is created and evolved over time.

Truly successful communities have a different vibe going on. The success of great places comes from the sustained satisfaction of the dynamic population overtime. I call this Relevant Value because it evolves to prove or disprove the perceived value at the point of sale. As our products are typically the most expensive purchase our customer will ever make, we have the responsibility to assure that our marketing promises will not only be kept, but actually create inherently satisfying place to continue to evolve where individuals can thrive.

I believe life is happiness based.  Perceived value can be true or false for a potential owner, was it based in reality or just hype.  A property purchase is typically as aspirational as it is functional. Even more so in second home or retirement based real estate purchases.   Perceived value creates sales.  Some promises even when kept turn out to be hollow. The are not inherently satisfying.  Relevant value creates happy people over time.  It does not matter if our development is for  starter homes, a major tourism destination, or a mix of lifestyles and stages; being conscious of creating places that meet the higher happiness needs of the subcultures we attract is our responsibility.  We must focus on the nature of the different subcultures we want to attract and be sure they are complimentary.  We must be specific not generic.  One community model will satisfy everyone.  Yet for years, the second home and retirement market has basically supplied a single model and cast questioning glances at anyone wanting something different. We must make the right promises and keep them.

Recently, I was having a conversation with Todd Zimmerman of Zimmerman/Volk Associates who is doing a market study for a project I am putting together. After discussing the holistic approach I was planning for this project, Todd gave me the language to describe the elements I was trying to influence, a new framework for the terms of  “density and intensity.”  While Todd was much more eloquent and nuanced in his explanation, I simplified it to fit my need.   Density is how the built environment engages people. Intensity is how the mix of cultures engages people  To create relevant value, we must be conscious to address both to these elements. Exactly how we do this varies with the nature of the place we seek to create and the subcultures we seek to serve.  The quality of place we create impacts the happiness and wellbeing of those we seek to attract. That is a fundamental  responsibility of Conscious Development.

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Where Have the Real Estate Investors Gone? David Twiggs, AICP

Placemaking Planning: Grove Park Market Drawing by Dr. Yang Luo, Director of Placemaking Hot Springs Village, AR

Placemaking Planning: Grove Park Market
Drawing by Dr. Yang Luo, Director of Placemaking Hot Springs Village, AR

I was recently in two meetings that seemed to be lamenting the same condition. All of the real estate investors have disappeared. The consensus seemed to be, the recession killed the real estate investor. One of these meetings was a discussion by several community professionals trying to revitalize their respective master planned communities. The other was a grassroots organization to revitalize a historic but challenged section of a tourism driven city. This got me thinking about the role of private investment in existing community development and redevelopment.

In my present project, I find that the investor has not disappeared at all. The unsophisticated real estate investor is gone. The easy money for any project is gone.

The amateur buying twenty overpriced lots in pre-sale based on a rendering of what might be built is not a reliable entity as it was in the past. We must now supply sound business plans with specific value enhancing strategies; in other words, we must work hard to have projects worth investing in. The recession has killed the lazy uninformed investor that perpetuated mediocre projects. And that’s a good thing.

So how do we find investors in revitalizing our communities? The recession has brought on so many opportunities for assembling property that had previously been sold. Property may have been abandoned and fell into the ownership of an association. It may have reverted back to a town, county, or state for failure to pay the taxes. There is also the shadow inventory of people who pay taxes and assessments but would gladly rid themselves of an unimproved property if there were a market or an entity that would take it. My point, there is now property available at a low cost basis that was not available pre-recession. What are our plans for that property?

Today’s investor wants to see a clear plan for a property to become marketable and relevant to the present and coming marketplace. There needs to be specific strategies for adding value to specific property. Personal real estate is the ultimate lifestyle product. It fundamentally must have real community and ultra-local value. Community value is the lifestyle improvements you receive by living first in the chosen region and then the specific community. There must be true quality of place. There must be relevant lifestyle options.

Ultra-local value opportunities come from fulfilling the original lifestyle promises for all the properties inside a community. Many developers in the past 30 years focused on the premium lot sales. Waterfront, golf courses, view and open space lots were the cash cows and the remaining interior lots were simply not considered as to the livability. This worked in the sales process because the lifestyle of the premium lots was being promised to all; but  it was  never delivered to all in a livable fashion. The buyer of an interior lot finds that they do not have the access and lifestyle of the lake house across the street. They must get in their car and drive to access the lake or any other lifestyle amenity for that matter. It has no ultra-local value. I define ultra-local value as what I can leave my home and do without getting in an automobile. Can I walk the dog down to the lake, can I access a trail system, walk to the art studio, or bike over to a social area, have coffee and people watch? This is ultra-local value.

Value can be a point source. There is not much value to “your neighbor has great lakefront but you can drive to the access just 3 miles away,” or “you can’t see it or access it from here but there is a great open space just over there that you can drive to.” Property was sold as if the prime amenity had ultra-local value rather than simply community value. Look at where your homes developed. What was the source of that value? How much “gravity” does that point of value have? In other words how large a radius of lots does that value impact. A single private home with a great view radiates no gravity to the neighboring lot with no view. A coffee shop that is walkable from 300 homes radiates a lot of ultra-local value while still supplying community value. While we do want to have premium properties available, the premium price garnered by the view, lake or open space lot could be leveraged much better by allowing common access to that point source value gravity in the form of a neighborhood gathering area. This allows the property value and marketability to be raised over all property in a radius rather than at a single point.

The amount of value gravity will always vary by location within the community. From a technical point of view, the investor is looking for investment areas where the existing socio/spacial value gravity can be influenced. Specific improvements are wanted. Defined, understandable, and doable. In more general terms, we must get to work planning our futures. If we have feasible strategies to improve the livability and relevance of specific areas and market those correctly; the savvy investor will find you.

 

 

Changing Destination Values

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Who wants to be treated like a tourist?  We are now faced with creating and recreating destination communities to meet a new set of values that have rapidly shifted from the prerecession model.  Perhaps it was the financial reality check that accelerated the already growing shift in values into the mainstream.  Many have shifted from seeking a tourist experience to wanting to feel belonging and experience self-discovery when we travel, invest in a second home or look for a quality place for retirement.

In 2009, Kurt Anderson began the conversation about a great reset in American values.  He and others speak of a “new frugality” that has resulted from values being shifted away from a consumption-based mentality. Conspicuous consumption has lost favor as a value proposition and is being replaced with a value for simpler honest and authentic experience.  This includes a shift away from credit-based lifestyle, which will slow our traditional metrics for economic growth.  Those metrics do not clearly recognize the vitality that can come from formally marginalized places being rediscovered and appreciated.  It doesn’t directly show the benefit of the local shops, restaurants, cafes and services being supported by a shift from corporate destination tourism to destination community based tourism patterns.

When we speak of a value shift, it begs the question “from what.” Dr. Brene Brown (brenebrown.com,) speaks of moving away from a culture where being preoccupied, over scheduled and over connected has become a status symbol and into living wholeheartedly. Technology, industrialization and automation of tasks that formally were part of basic home economics has both created a lifestyle free of what many consider preindustrial “drudgery” but it has also a disconnected us from the basic human processes of thousands of years.

In the past many experiences were designed to allow us escape into artificial environments. Now destinations should seek to bring us into a different rhythm, show us another lifestyle point of view or seek to connect us to nature and the basic systems of being human. The common denominator in this value shift to more authentic experiences is a desire for greater understanding, physical and spiritual growth and renewal. Traditional destination activities such as golf will still be an important element but we must also create spaces for adventure, meditation, and learning.  In looking at how to grow tourism or relocation in your community, don’t worry about trying to satisfy this vast array of potential interests, remember you are not trying to attract everyone, you want those visitors and new residents that appreciate the authentic culture of your community.  Be who you are.

The 1950’s began major mind shifts for the boomer generation. It could first be seen in basic home economics.  This time period held the rapid expansion of processed industrial food distribution.  Prior to this virtually all food was whole food and slow food.  While not necessarily organic, it had simpler inputs and no genetic modification.  Most meals required cooking which meant planning and most homes had at least a kitchen garden in the backyard.  Until  recently the majority of the United States population lived in a rural setting.  That is no longer the case.  The 1950’s marked a clear turning point from the valuing of the agrarian home economics and self-reliant thinking into a consumer based lifestyle ideal. A new ideal was being set for the American Dream.  Gardening and putting food by was now considered only for the poor.  The prosperous Americans bought the wonderful new prepackaged foods in the new supermarkets.

Traditional urban evolution gave way to an auto centric planning mentality. The growth of air conditioning allowed America to move inside and the personal connections made on the front porch diminished, as it was no longer the most comfortable place to be during the heat of the day.  From the 1950’s through the 1980’s, the mainstream American dream became substantially based on an auto centric, industrial food, air conditioned consumerism. Within a single generation we went from totally analog to a  digital culture, from segregated to diversity, from the local paper to the Internet, and from agrarianism to urbanism.

All these “conveniences” created a great insulator. As a nation, we were rapidly losing knowledge of the fundamentals that were basic to the generations before us.  It insulated us from the rhythms of nature. We had not the need to neither produce nor prepare our food.  It insulated us from a requirement to live a life of face-to-face connectivity. As described by Rowan Williams, the former Archbishop of Canterbury, we are losing the “craft of being a creature.”

It wasn’t simply that modern conveniences made America feel that traditional knowledge and skills we irrelevant.  Popular culture created an urban and suburban contempt for the agrarian lifestyle.  Proliferation of television created new images of the ideal lifestyle as one of ease, convenience and sophistication. The popular media portrayed the hayseed farmer, the bumpkin and other stereotypes showing ignorance of the rural class even though most Americans had much of their immediate family remaining in rural or semi-agrarian lifestyles. This was reinforced with a viewpoint of the good life consisting of Ward Cleaver and June heading off to the Country Club, Tony Nelson taking Jeannie to the Officers Club, or Thurston Howell the III getting Gilligan to help build the island golf club.  While these were designed for comic relief, they all permeated the illusion of the Norman Rockwell perfect traditional family setting down for Thanksgiving dinner or the Madison Avenue sophistication as the norm.  These juxtaposed stereotypes created both an inferiority complex and dissatisfaction with the agrarian lifestyle and a false sense of what would be a satisfying lifestyle.

Developers used this model to create early generation lifestyle destinations and rightly so.  They we simply responding to the general desires of the market as it had been conditioned.  Many of these destination developers actually did good forward thinking community planning considering general lack of sophistication in the planning worlds at the time.   These early destination communities were completely new creatures and that made them unique and attractive in themselves.  The same basic model proliferated throughout the US because the capital market and bankers understood the model.  During the last housing boom, the model accelerated with even less creativity, imagination, and quality of place.

After forty plus years of destination development: generic is no longer unique.  Status quo is unacceptable.  With the current value evolution or reset, a large segment of the baby boomer and following generations are changing their value judgment to balance modern techno bombardment with an organic connection to the natural world.  The value of access is surpassing the need for ownership.  Commonality and diversity are overtaking insular isolationism.  Paths are replacing fences. Gates are welcoming concierge stations rather than roadblocks to check you papers.  Gardens are valued as much as golf courses. The local has become the exotic.  The attraction for commoditized monoculture is being rapidly lost to the value of the unique, the individual, the handmade and extraordinary.

I personally feel the most encouraging changes come shift from consumerism to stewardship as a key personal value. “Stewardship is simply the caretaking of gifts” said Wendell Berry.  We must build our destination models on the stewardship of unique resources in order to build extraordinary places.  The loss of perceived value in the consumption of consumer products or the depletion of natural resources for our convenience has not changed universally.  It has changed dramatically for the markets we are attracting and our development practices will have to be adjusted accordingly.

Changes in Values

  • Cultural evolution from the 1950’s created a false sense of what builds a fulfilling lifestyle.
  • Destination models based on inauthentic lifestyle expectations are now experiencing a loss of relevance in the face of changing values.
  • Recent shifts in cultural values are moving away from conspicuous consumerism, hedonic and luxury based value perceptions.
  • Modern destinations must create opportunities for real connection and belonging with others,  with nature, and with the authentic quality of place to be successful.

Community Builder or Consumer – David Twiggs

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To build an extraordinary destination community, we must realize our residents and visitors want to belong to a community rather than simply be a consumer.  We must create the seeds for citizenship.  We are often faced with a culture of community consumers not a group of contributing citizen community builders.

I spent 18 years living and working in the North Carolina High Country in the Blowing Rock, Beech Mountain and Linville triangle.  In this area, there was a proliferation of communities being built to meet the in migration, second home and rental housing demand.  Many of these were very well done creating a community personality that added to the cultural richness of the community.  While these were clearly defined areas they were relatively porous allowing exchange of communication, ideas, and commonality.   These communities were generally considered to be good engaged neighbors.

Other communities developed into isolationist monocultures that were generally considered unwelcome even after many years of existence.  These fostered the” Us vs. Them” mentality.  While they were successful real estate development projects in that they sold through and made the developer a lot of money.  They were not necessarily successful in adding to the long-term health of the larger community.

Consumers are like investors in a stock.  As long as the community is thriving, they receive their dividends in the form of quantity of amenity per dollar paid in taxes, dues, or fees and in increased property values when they decide to sell their investment.  Just like in stocks, owners change on a daily basis. If their dividends are not what they expect, they sell the investment. Since a community’s major dividend has been the lifestyle and perceived quality of life, the same dividend may leave one investor unimpressed while going beyond another’s expectations. A community cannot be all things to all people. It must enhance its unique qualities and values and seek those to whom the lifestyle resonates.  The one constant is that the people will eventually change.  With this come two schools of thought.

The American zeitgeist on what is considered of value is now shifting towards a citizenship point if view.  In response, we had better set up policies, governance and traditions that foster the unique authentic value in our community.  While enhancing and preserving, we also must celebrate individualism within that framework.

From a consumer point of view, there had better be something to attract the next purchaser for their business, home or property; the next “investor.”  While recent years has seen a decline in the investor mentality as a primary motivator for choosing real estate purchases, the change model holds true.  It is the value proposition that has changed.  People are looking for authentic lifestyle and an atmosphere that helps them become a contributing part of the community.

The mindset of a destination community being simply a marketable amenity delivery system has to change if a community is to thrive. In funding new development, the purchase and flip investor mentality made pre-construction sales to investors a reliable funding option until about 2008.  This has changed particularly if a destination wants to attract in migration in the second home and retirement markets.  We are now focused on an end user, a citizen, which is much more concerned with the authentic community values than the marketability of the real estate in the future.

Community must be defined as collection of human relationships rather than as a defined real estate space.  Many of the early pioneer destination communities were built with these more humanistic goals in mind.  In the 90’s and 00’s, many designs strayed for these values.  Creating fortified islands of monoculture did much harm to the traditional meaning of community.  The truly extraordinary places designed the governance structure to add value and enhance the region’s authentic nature.  This goes beyond the physical design of the neighborhoods.  There are many extraordinary places that have technical design issues that they continue to deal with as knowledge on neighborhood and civic space design evolves.  These places are extraordinary because the citizens are part of the positive regional dynamic rather than a separate protectionist subculture.

Now that some of our early pioneer associations are reaching 30 to 40 years old, we are starting to see some multigenerational ownership beginning.  Up until recently no current owners where born and raised in their community.  It was a created environment based on a theme that was quickly put in place rather than slowly evolving with the nature of the area.  There were no roots to speak of that would build a sense of citizenship as opposed to walking into a readymade ala carte consumer environment.  Mixed generation communities have faired much better over recent years than age restricted or retirement type communities.  Mutigenerational populations tend to vest much more quickly into the total community environment, both within and outside the association scope.  This is beginning to alleviate some of the challenges faced due to a transient consumer mindset that has been prevalent in community associations.

Boomers are not necessarily joiners.  The value of being a “member” is not nearly as prevalent as with prior generations.  There is much more value placed on being an individual engaged citizen.  This does not mean that the Boomer will not use the amenities of a community.  They may very well be more active than prior generations but the do not want any part of their “parents retirement community.”  They want to live in a community that engages their children and grandchildren as a family unit and individuals.  They want a “cool” factor.  There must be a new mental narrative about the community. They envision their grandchildren saying “let’s visit grandpa, he lives in the coolest place”. This is what the successful community of the future will be conjure in the mind.

A primary challenge is developing a real sense of citizenship.  Consumers look at the cost/benefit now and seek to extract as much product as possible for the least cost.  Citizen community builders have a longer look as they take responsibility in growing their community.  The sense of being a builder not simply a consumer is what builds community within our members.