AndrewAlexanderPrice

Let's Build A Traditional City (And Make A Profit)

March 30, 2013

In my last post I showed three ways to transform an existing automobile-scale environment into a human-scale one. However, a better way would be to start from scratch. This means purchasing some land - and we have two options;

  1. Found our own town completely from scratch.
  2. Infill an existing town or city with traditional human-scale development.

Founding our own town is tempting - rural land is cheap, and we have the ability to build whatever we want. However, it has its downfalls - no one currently lives there, and unless you've somehow managed to convince 1,000 families to relocate with you without any guarantee of a job when they get there, you will have a hard time populating your town. Let's also add to the fact we could be building on potentially valuable agricultural land or interfering with some other natural habitat.

We can still build a traditional urban environment from scratch, even without founding our own city. Look around your city - I am sure you will be able to find plenty of suitable locations. For example, take a look at this satellite image of Houston;



I have outlined all of the potential infill locations in red. As you can see, there is no shortage of land in most of our city's today.

Infill development has many advantages;

  1. You're not contributing to urban sprawl.
  2. You can utilize the city's existing infrastructure like fire and police protection, there are already water, electric, and telecommunication utilities, garbage collection, mail services, and perhaps even transit - without having to worry about all of that yourself.
  3. You already have an existing population base around you. It'll be much easier to attract residents and shoppers that already live in the city.


What's Wrong With New Urbanism?

Most developers looking for a profit and urban planners wanting something 'better' than suburbia tend to build New Urbanism;







'New' Urbanism isn't exactly new. New Urbanism is a marketing name for 19th-century and early 20th-century Americana. There really isn't that much difference between a 21st century New Urbanist neighbourhood;



And this turn-of-the-20th-century neighbourhood;



The only difference is that the houses are newer and bigger now.

Yes, it is better than your conventional suburban sprawl;



But only slightly so. New Urbanism is just a realization that what we're doing now is stupid, and since we don't know of anything better, let's build what we use to build before - even if that was also stupid.

New Urbanism started when we saw old photos of this;



And thought that it looked significantly better than this monstrosity;



So we tried to rebuild it;



And we failed.

Why doesn't it work? Because these were the sorts of places that we flew to the suburbs from;



The automobile just made it possible. Making the buildings shiny and new isn't going to change anything this time round.

When I look at this I get depressed;



Yes, the buildings are nice and shiny, but where are the people? All I see are cars. It is not a very human-centric environment, nor very inviting. I would not pay money to travel there or move there without a good reason to.

Previously, I discussed that if you want to get people walking, you need to build human-scale environments. New Urbanism;



Is just a recreation of the 19th century hypertrophic city, complete with wide roads. When we paved the middle and segregated pedestrians from motorized traffic, it became obvious that we had built an auto-centric environment dominated by machines that felt inhuman to experience first hand;



So to compensate for the harsh inhuman brutalist imposing environment we built, we had to flee to our leafy suburban outskirts to feel in touch with nature just so we felt human again;



Building more suburbia is not the answer, nor is returning to the environment that we fled from. We need to build a human-scale, human-centric environment that is warm and inviting, not an automobile-centric one.

The proof that New Urbanism is an automobile-centric environment is in the pudding. Take a look at this New Urbanist neighbourhood;



Where are the people? All I see are cars. This is not progress. Add a few more decades and we will flee from it again.

We have to get out of the ugly habit of building such automobile-friendly environments. Once we make it automobile-friendly by adding wide roads and segregating automobile and pedestrian traffic, the automobile will take over. Remember, we fled from this. The result just happened to be worse, because we did not know any better.

When we break the habit of building wide roads and segregating automobiles from pedestrians - even without having to ban them - we will begin building pleasant urban environments.

Let's think 'human-scale';









The other side of the street should not feel like it is a world away - it should not be divided by a dangerous highway of heavy machinary;



It should feel human-centric - safe, warm, inviting;



We should feel safe walking anywhere on the street;



The street should not feel divided into a 'left' and 'right' side. We should feel like we are on the entire street;



The secret to building these great warm homely-feeling places is so simple. The secret is to build narrow streets! That is all we have to do.

We do not have to ban cars, nor do we have to start out with fantastic public transportation - all we have to do is build narrow streets like this;



Instead of this;



And we are naturally going to walk. We don't have to spend more money - we don't have to change the architecture. None of that matters. All we need to do is build narrow streets;



In a human-scale environment like this, we can save a lot of money.

At a government level; we do not need to pay for the upkeep of such wide roads.

At a business level; if the majority of our customers choose to walk, we also do not need to provide massive parking lots.

At an individual level; if we live there and can do most of our daily needs on foot, we do not need to own a car (or a second car).

That means everyone has more money to enjoy on everything else in life.

Every day, people are spending tens of thousands of dollars to escape this;



And jump on a 12 hour flight to spend a few weeks with their family in this;











What do all of these places have in common? Very narrow streets. That is the traditional way that we have been building cities for millenia. It is our natural habitat. It feels very inviting and human-scale. It is not expensive and does not require any specialized skills. Just build it, and you will attract a lot demand.

It is not about trying to achieve density by building up. You will just spend more money building skyscrapers, and it does not solve the problem of it feeling like a soulless auto-centric environment once you step outside;



Anyone who thinks New Urbanism is the pinnacle of urban design is wrong. Just build narrow streets and ignore the New Urbanists and their wide-road fetish.

Taking an Old Airport

Let's use the example of Cantrell Field Airport in Conway, Arkansas. The city is relocating their airport and selling off the existing airport's land. I got this map from the city's website (click here for the PDF);



The red area represents the 151 acre site that they are trying to sell as a single piece of property. The asking price is around $9 million. If I could afford to buy it (investors and venture capitalists - where are you!) I would purchase it. It's a little over 1 mile out of downtown Conway;



Our Requirements

So let's imagine for a minute that we own this land and we want to build a traditional human-scale urban environment there;



Before we can begin to draw up a plan, we will have to work out a few requirements;

  1. We should waste as little land as possible by trying to achieve a high Place:Non-Place ratio.
  2. There needs to be a variety of wide and narrow roads, and open-spaces in the form of parks and plazas.
  3. The environment should be clearly designed for people - not automobiles, not bicycles, and not transit. It needs to accomidate automobiles, bicycles, and transit - but they should be secondary.
  4. Since we are interfacing with a car-dependent suburban environment, we need to accomidate for parking so people can enter and leave our human-scale environment, but we need to keep as much of this infrastructure out of view as possible to not destroy the sense of being in a human-oriented environment.
  5. We are playing the role of a private developer, so we need to get a positive return on our investment.

So let's summarize what we want the end result to look like;









If that's not your style, let's try something a little more single story;



If you don't like that architecture, we could make it feel a little more Japanese;



Personally, I like something with a little charm;





But maybe you like modern, clean, high-rises?



To be honest, the architectural style doesn't matter. Infact, we're not even going to specify it - just let people build in whatever style they want and let a local style emerge naturally.

However, we want to avoid this at all costs;



Yuck. The building's architecture is great - there's nothing I could criticize about it. But look at the overall environment. It's very car dominated and human-unfriendly.



The sad thing is, it looks like the architect actually tried to make something nice here.

Imagining The Possibilities

Now that we have our requirements, and our 151 acre site, how much can we fit into it?



We could take the easy option out and fill it in with more suburban sprawl;



But what are we accomplishing besides contributing to suburban sprawl? Nothing.

We could try to build a Portland;



151 acres is starting to look like a significant amount of land. But even Portland;



While better than suburban sprawl, still isn't the human-scale environment complete with narrow streets that we are trying to build;



Let's try building a Barcelona instead;



Now 151 acres is looking like it is large enough to fit its own city in there, with a mixture of wide and narrow roads.

Do you see that large green road that's running down the middle? This is what it would look like;



While the majority of the streets would feel more like;



Do you notice the lack of cars?



We are certainly not banning them from our environment (this would be problematic for emergency services and shops expecting deliveries) - but because our environment is very human-scale, most people would perfer to walk over drive any day.

We don't have to follow Barcelona. We could build our own Venice;



Don't like the European theme? Then let's built a Kyoto;



What do Barcelona, Venice, and Koyoto have in common? They are all human-scale environments. They all have a nice mixture of wide and narrow streets. What else do they have in common? Many people spend their entire life savings just to spend a few weeks there.

Now that you know what is possible, we are going to attempt to build an environment that will pull in the tourists, be a hub for cultural flourishment, an incubator for small businesses, and have a fit populous that rely on their own two feet instead of their cars, save a lot in infrastructure costs, dramatically increase land values, and ultimately - make a profit.

Does it sound too good to be true? Then let's do it.

Drawing Up A Plan

We are now at a stage where we need to draw up a plan. Let's define the major arterial streets;



These are your standard wide American style Complete Streets, with traffic lights, sidewalks, and possibly even bike lanes;



They are expensive to build, so we have to limit ourselves to placing them in just a few major arterial corridors.

Now, it's time to insert our narrow streets. Ideally these will be between 11 to 15 feet wide, building front to building front;



Before we can draw our narrow streets, we will have to determine our block sizes. We want a mixture of block sizes so that we get a variety of architectural styles. On average, we will aim for 200 foot wide blocks - but we will not stick strickly to this - we want to allow some to be bigger and some to be smaller, and try to avoid exact 90 degree angles;



This may look very alien and chaotic if you are use to seeing maps with perfectly square uniform streets;



But we are not aiming for a sterile square grid, instead we are trying to imitate the organic nature of traditional cities;



What do those narrow streets look like from ground level?



Notice that we are not going to ban cars, but by building an environment at a human-scale, we are going to discourage driving as much as possible.

See the lack of surface area on those narrow streets? It's much cheaper to maintain than this;



It's also more aesthetically pleasing.

Open space is still important, so we will reserve a nice 250 x 160 foot park in the middle;



Our park may look something like this;



Is not this form of open space much more pleasant than the busy road?

A park by itself will not do. We also want to encourage a sense of community and culture by giving the people an outdoor space to play in and host farmers markets, concerts, and other cultural events in too. To achieve this goal we will build several outdoor plazas;



Three large plazas will provide ample room for outdoor entertainment;



They are not complex or expensive to build, just pave the block;



Or get as intricate as you want;



But avoid the easy temptation to open your plaza up for parking. Otherwise it will turn into this;



Yuck. We are trying to build a place for humans, not cars. Once we let cars overtake an environment built for humans, we have lost. Our plazas are community spaces. We should be able to have lunch with friends there;



Watch a concert there;



See a street performer perform a magic trick in front of a crowd there;



Not park our car there;



A parking lot is not a community space. It is soleless infrastructure that caters for one thing only - your automobile - and should be hidden from view. It does not add any sort of destination or aesthetics to the environment.

Our final step is to fill in the rest of the land, and sell it off;



Accommodating Parking

Because we are surrounded by a heavily car-dependent suburban environment, we need to interface with it and accomidate for parking. Our blocks that average 200 x 200 feet provide ample room for parking. However, our single restriction is that our parking should not waste precious street frontage.

Never allow this;



It's unsightly, it's unattractive - it wastes precious street frontage. It has instantly killed any walkability, and makes our environment look very automobile-oriented - and that is exactly what we are trying to avoid.

In a human-scale environment which encourages walking, there is no need to accomidate for so many cars. We need to accomidate for those commuting in and out of the surrounding suburbia, but the environment encourages them to do as much as possible on foot once they are already here. There is no need for every shop to have enough parking spots for the Black Friday sales rush.

A cheap way to easily add surface parking is to do a European perimeter block style approach;



By building around the outside of the block, we can use the middle for rear parking;



It keeps the environment fully walkable and human scale from the street;



Except for the occasional opening, you would never know that there was a parking lot behind those buildings! From a cross section of the block, this would look like:



And it's no more expensive to build than this monstrosity;



The primary difference is that we have rearranged the layout so the parking lot is behind the building.

What if that still isn't enough parking? Then you can simply cover the first parking lot;



With a ramp up to the roof;



And still from the street, you will not see a thing;



A cross-section of this building would look like;



How about a large department store that needs a lot of parking?



Now we are starting to get a little expensive, but if you desperately need that much parking and you are willing to pay for it, it is entirely possible;



Remember, we are not in the suburbs anymore. You can easily have tens of thousands of customers living within walking distance of you - so you don't need to accomidate the storage room for a car for each one of them. This makes building in a traditional city much cheaper than you think.

If you are a hotel that wants to use the upper floors for rooms instead, nothing stops you from placing your parking underground;



Perhaps we want something other than parking? Perhaps we are developing a mixed use retail/apartment complex, and part of the selling point of our apartments is a safe, semi-private outdoor space?



You now have something like this;



Or even this;



With a little creative use of how we use our land, it is not very difficult to come up with solutions for offering parking and even private backyards, without having to sacrifice street frontage, walkability, or having to transform the human-scale environment into an automobile-scale environment. In most cases, it is not very expensive either - just build as we build now, but put the parking lot behind the building. It only becomes expensive if you try to build a lot of parking - but hopefully the walkable nature of the environment eliminates the need for excessive parking in many cases.

Budgeting

We want to make a profit on our investment, so we will have to budget how much this will cost to build and maintain. Let's look at our plan again;



We will first calculate our construction costs. I measured 10,373 feet or nearly 1.97 miles of wide arterial streets, and 42,200 feet or nearly 8 miles of narrower streets. That's a total of 52,573 feet of street we will have to build. (When taking these measurements I rounded up as I prefer to err on the upper-side of my cost estimations.)

Our artertial roads will be your typical wide Complete Streets;



Starting from one side, there will be 10 feet for the sidewalk, 10 feet for parallel parking, 6 feet for cyclists, and another 10 for traffic, then reverse it on the other side for a total of 72 feet - building front to building front. That's extremely wide! That is also why we are only building so few streets like this (just as the boulevards of Paris only make up a tiny fraction of the streets there.) Wide streets are a non-place, but a tolerable one - so long as we keep their usage to a bare minimum.

The rest of our streets will have a much more human-scale 11 to 15 foot width;



So let's work out how much land will be used by our streets, our park, our plazas, and ultimately, calculate much land is actually available to develop on.

Arterial Streets (Purple) 746,856 square feet
Narrow Streets (Black) 788,595 square feet
Parks (Green) 38,934 square feet
Plazas (Grey) 57,245 square feet
Available Land 4,945,930 square feet
Total 6,577,560 square feet
(151 acres)

We have an astonishing 4,946,930 square feet of land that we can develop on! We are not actually going to build any of the buildings ourselves, but rather sell that land off and let property developers do the building themselves.

But before we go selling this land off to developers, we need to work out what our construction and maintenance costs will be.

We will use plain brick to pave our narrow streets and plazas. It's simple, aesthetically pleasing, and we can add any other ornimation (such as benches and fountains) later;



We also have to think about connecting underground utilities, maintaining our parks, and other associated costs. Our plazas also require maintenance, but we can cover those costs by placing them in the hands of a trust responsible for renting them out to make them financially self sufficient.

Our estimated budget works out to be;

Initial Cost Per Year
Purchasing the land $9,000,000
Arterial roads - About $5 million per mile - with a 15 year life span. $9,822,900 $654,860
Narrow streets - About $3 per square foot - with a 50 year life span. $2,365,785 $47,316
Plazas - Also $3 per square foot. $171,735 $3,435 - Handled by a trust responsible for renting out the plazas for community events.
Parks - Construction costs are about $6.75 per square foot, yearly maintence costs are about $1.40 per square foot. $262,804 $54,508
Electrical and Telecommunication Cabling - About $40 per foot for 52,573 feet of street. $2,102,920 Handled by the property owners and the utility company.
Sewage and Water Pipelines - About $60 per foot - doubled to $120 per foot for both water and sewage. $6,308,760 Handled by the property owners and the utility company.
Total $30,034,904 $756,684

$30 million is a significant investment. Still, that is about the cost of building a subdivision anyway - so the price tag should be nothing too shocking to an investor.

I would also like to point out something interesting - notice how much more it is to construct and maintain the arterial 'Complete Streets' compared to our narrow brick streets - and those more expensive Complete Streets have a much shorter life span too!

Construction Cost per foot Maintaince Cost averaged per year
Our 72 foot wide arterial 'Complete Streets' $947 $63
Our 15 foot wide brick street $15 $1.12

And you wonder why our cities are going bankrupt!

When you start bringing things down to a human-scale, our budgets also shrink down to a human scale. What would have cost millions to pave;



Now only costs thousands;



Anyway, back to our plan. We need to raise at least $30,034,904 to cover our initial construction costs, and at least $756,684 per year to cover maintenance costs. The only way we are going to make money initially is by selling off plots of land. We have 4,945,930 square feet of available land, so it's simple math;

$30,034,904 / 4,945,930 square feet = $6.07 per square foot

We have to sell off plots of land for at least $6.07 per square foot to break even. Land around Conway sells for anything around $1 per square foot in low density industrial areas, up to $15 per square foot in desirable retail locations. One particular abandoned fast food restaurant location is selling for $10 per square foot - which seems to be about the average price in the area.

Since we are property developers, we want to get a decent return on our investment to make it worth our while. I think it's fully reasonable to sell plots off at $8 per square foot to attract interest, and we can still get a decent profit from it. At $8 per square foot, a developer can purchase an entire 200 x 200 foot block for around $320,000.

We also have to consider our $756,684 per year maintenance costs to keep our streets and our park in top condition. In many cases, when someone purchases into a subdivision, they are often charged a maintenance fee to cover landscaping and street maintenance. We can do the same, by dividing the maintenance fee among property owners based on how much street frontage they have access to.

We have 52,573 feet of streets. Considering that we will build against both sides of the street, that gives us a total of 105,146 feet of street frontage. Our park and our plazas take up 1640 feet, so that leaves us with 103,506 feet of taxable street frontage. By using simple math again, we can calculate our maintenance costs to charge per foot of street frontage;

$756,684 per year / 103,506 feet = $7.32 per foot per year

We will need to charge $7.32 per foot to break even - but as profit-hungry investors, we want to make some income off of it, so we will bump this up to $9 per foot. If you owned a 200 x 200 foot block, you will find yourself with a $7,200 per year fee. However, a 15 foot wide shop;



Would only pay $135 per year in street frontage tax. That's not very expensive at all, and tries to discourage a single business from taking up an entire block just for the sake of it.

It's now time to budget it out, and calculate our profit;

Once off Per Year
Land sales $39,567,440
Construction -$30,034,904
Street Frontage Tax $931,554
Maintenance -$756,684
Profit $9,532,536 $174,870

More importantly, what will the return on our investment be? We will calculate the return on investment as;

(Profit / Cost) * 100% = Return on Investment

Just by selling off all of our available land, we can calculate our initial return on investment.

$9,532,536 / $30,034,904 = 32%

A 32% return on investment is very good compared to other real estate investments. As a long term investment, our ROI increases over time;



In 15 years, our ROI grows to 40%, and after 32 years it passes the 50% mark. All of the numbers I used to calculate this are above - so if you don't believe me, you can do the math yourself!

If this development was undertaken by a city rather than a private developer, your ROI will be potentially higher because you will also be collecting property and sales taxes.

This is much better than your typical suburban sprawl;



With your $5 million per mile 'Complete Streets';



No wonder most cities can barely keep themselves financially solvent.

Conclusion

In my last blog post I discussed ways of transforming an existing environment to make it much more walkable and human-scale, but this time we have built an environment completely from scratch. It does not have to be expensive - what I presented was a comprehensive multi-million dollar 151 acre undertaking - but you can start much smaller. Just look at all of the infill development possibilities around you! I also showed the financial benefits of using extremely narrow streets - they are much cheaper to construct, maintain, and they also last a lot longer.

In the end, I have shown you how to create an environment similar to one where many people will sacrifice their entire life savings just to spend a few weeks in or dream moving to;







We can build this right here;







Instead, we just end up spend many millions of dollars building more of this crap;





It frustrates me how many people just don't seem to get it.



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