Thursday, December 18, 2008

Doing Urban Corridors the right way, the Houston way

Had a conversation this week with Josh at HRG about the Urban Corridors initiative moving forward at the Houston Planning Commission, which involves encouraging dense development near Metro rail stops. There are debates about the right standards, but the real issue is mandatory vs. incentives. Another big issue is who will pay for needed infrastructure upgrades, like wider sidewalks, landscaping, utility moves (and burials), public space, and street parking (ideally diagonal).

Here's an interesting compromise solution we came up with:
  1. The Planning Commission describes their "ideal" development standard around rail stops.
  2. Landowners near each stop have the option to voluntarily join together to put deed restrictions on their property meeting something close to this standard (although it does not have to be exact, if there are certain "ideals" that don't make sense for their specific case).
  3. If the Planning Commission signs off on the voluntary group deed restrictions (i.e. they're close enough to the ideal), a partial TIRZ gets created around that stop where some (but not all) of the tax increment gets reinvested into infrastructure upgrades around that stop. This is a strong incentive for the landowners to come to a voluntary deed restriction agreement: their value goes up, and that tax increment goes directly into improving the public assets around their land.
This is a win for everybody involved:
  • Property rights are respected and everything stays voluntary.
  • No "one size fits all" standard is forced on everyone. The landowners around each stop have the flexibility to craft specific standards that work in their context.
  • Landowners get improved land values, rents, and adjacent public infrastructure investments.
  • Development gets maximized because no onerous regulations drive developers away (i.e. no "dead zones" near rail stops), which is also raises the city tax base.
  • It creates money for the needed infrastructure investments.
  • The city gets some dense, new urbanist neighborhoods attractive to a certain young creative class demographic that is more likely to ride the light rail rather than add to traffic woes.
  • The citzens and taxpayers get maximum benefit from their expensive rail investments by increasing density and ridership near the stops. (aside: this is not an argument for rail - I'm just taking it as a given and asking how we can get the most out of it)
One issue that would have to be worked out is the percent sign-off by landowners to create enforceable deed restrictions. Does it have to be 100%? Can it be a super-majority like 70-80%? By land area or value? I'm not saying everybody within a quarter-mile of each stop has to buy-in - probably just the commercial land (non-single-family-home) nearest the stop. I'm sure acceptable details could be worked out.

I'd love to hear your feedback in the comments.

UPDATE: This was passed along to me today. Hat tip to David.


DALLAS (Prescott Realty Group) – The city recently approved its first TIF district focused on multistation transit-oriented development.

The new TIF includes 559 acres in addition to public rights-of-way. It stretches from the Lovers Lane and Mockingbird area along the DART rail line to the Lancaster and VA Medical Center region.

The district will have a 30-year life, during which real property values are predicted to grow from $320 million in 2008 to $3.52 billion by 2038. About $328 million in incremental tax revenue is expected to accrue in the district during the life of the TIF.

"The primary focus of this effort is to encourage high-density, mixed-use, pedestrian-friendly developments around existing DART Rail stations," said Dallas City Manager Mary Suhm. "The TIF provides an effective development tool to encourage the redevelopment of important, centralized areas of the city, as well as new development."

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At 7:46 AM, December 19, 2008, Blogger Peter Wang said...

Tory, one really huge problem being brwed up by METRO is that they are failing to plan to accomodate bikes in the new trains. See for a nice picture from a Phoenix, AZ light rail car. This system goes live in about 10 days! Our METRO refuses, refuses, refuses to do it. We have letters in support from all four County Commissioners, Judge Emmett, Councilmember Clutterbuck, Dr. Renu Khator of UH, and they still won't do it. HELP!!!

At 8:02 AM, December 19, 2008, Anonymous Anonymous said...

Most deed restrictions usually need a 70% property owner signature rate to be adopted. It can vary, but 70% is a typical default I seen written in residential areas.

Currently, Mayor White and the City of Houston are anti-new TIRZ creation and only in favor of expansion of existing ones. It doesn't mean it can't change, but a couple of TIRZ's have ruined the reputation of all TIRZ's and cause this policy shift.

Also, regarding infrastructure: TIRZ's do not rehab or updgrade water lines and sanitary sewers. The city funds all this in TIRZ projects. Storm sewers, roads, and other private utilities the TIRZ will handle the cost. I've work on several stree and pedestrian rehab projects for the Midtown TIRZ and this was the case for each.

At 8:37 AM, December 19, 2008, Blogger Tory Gattis said...

Peter: I have forwarded your comment to some top people at Metro, and will also mention your blog in a future post. Good luck!

At 9:50 AM, December 19, 2008, Anonymous Anonymous said...

Clarififcation to kjb434: TIRZs are fully enabled to fund water and sewer line projects. The Uptown TIRZ helped fund a water line improvemement.

At 1:39 PM, December 19, 2008, Anonymous Anonymous said...

Let me add in so more clarification.

Typically when a TIRZ rebuilds a street, they'll coordinate with the city to see if any planned utility upgrades were in works.

If they are, the TIRZ will pay for the incorporation of the utilities into its construction plans with the city funding a portion of the construction cost.

Yes, a TIRZ can pay for utilities such as water and sewer and the Uptown example is true. This situation occurs with the existing system is woefully in adequate and the city has no funding able to be directed for the needed improvements.

The primary reason for the coordination is so that the city doesn't come back and tear up a perfectly good rebuilt street to upgrade some utilities.

A well funded TIRZ district like Uptown can move a project quicker to construction by being able to fund these improvements.

At 12:25 PM, December 22, 2008, Anonymous Anonymous said...

In our office we deal with Houston developers all the time, and one of their most common complaints is the hodge-podge of deed restrictions they run in to. Try assembling land for redevelopment when each parcel you acquire has a different set of rules governing it’s future use!

For that reason, I don’t ever think that deed restrictions are the right way to govern infrastructure design issues. Deed restrictions create complex baggage for property that becomes more and more of a headache over time as the market demand and neighborhood character change.

I do like the idea of voluntary adoption of the urban corridors standards. I think that if an “urban corridor” designation is created in the ordinance it could be a fusion of a few minimum standards, and primarily voluntary recommendations with incentives for adoption.

But it is important to define what areas constitute an urban corridor, however, and minimum sidewalk standards need to be mandated as they relate to the creation of a continuous street. The design of the sidewalks needs to be consistent across all properties to have any positive effect.

More on my blog...

Always a great read, Tory. I really appreciate your coverage of what's up in Houston!

At 4:17 PM, December 22, 2008, Anonymous Anonymous said...

My biggest concern with the proposal would be the emphasis on the “voluntary” nature of the proposed urban corridors. If we have learned anything from the last eight years it is that “voluntary” regulations do not work and I would seriously doubt they would work here.

Of course, any proposed density or other setback (more properly “lack there of”) requirements should not be rammed down the throat of landowners. Consultation and an open review process should be carried out. And certainly some building should be grandfathered in but in the end, these regulations must be mandatory. A voluntary system does not work and even if you could somehow get every owner to agree, the transaction costs are often astronomical.

Some on here are probably already thinking in their head, “But that will hurt development and slow the process.” But frankly, we have seen the exact opposite in other cities. Landowners are not stupid and most wish to develop their property to the maximum extent possible. If an area is designated an urban corridor, given the choice, a landowner will likely develop the property to conform to the requirements (or sell to someone who will) rather than leaving the place abandoned. This of course depends on demand but given that Houston (America’s 4th largest city) has so few walkable, pedestrian-oriented areas, this is hardly a problem.

Finally, I would agree with Andrew in that one of the most important requirements of such a system would be to make sure these development zones are integrated with sidewalks, crosswalks, setbacks, etc that are consistent across the zone. I live in Midtown (supposedly the most “walkable” neighborhood in Houston) and seeing how spotty these basic services are distributed and how developments like the CVS right across the street from Post Midtown break up the attempt at urbanity in the area, is enough evidence for me to know that what Houston has done in the past is not the way forward.

At 8:59 AM, December 23, 2008, Blogger Toure Zeigler said...

I agree with both of the comments made by Andrew and common_sense.

I know people hate it some times but to get the desired effect you want some time there needs to be some type of reguatlions especially if you are trying to have a consistent street edge.

My jurisdiction back east also tries to use voluntary or advisory code enforcements and they do not achieve the results we desire. The comments about deed restirctions I thought were interesting. It seems that creating a bunch of deed restrictions instead of a controlled regulation just creates more complications and headaches.

Going back to the original post, I understand how zoning and reguatlions some times stifle development but allowing the free market to decide where things should go rarely creates liveable neighborhoods. For example, back east, developers almost never build supermarkets inside cities because they say they need 70-100K of floor space and then almost 2 acres of parking. By allowing the market to dictate their own regualtions supermarkets to do not go to neighborhoods that need them creating major health issues. However through some control we can convince developers to change their footprints, maybe add another floor and locate near transit to reduce parking and create a successful store that fits into the mold of the neighborhood. There are countless examples of this with several big box stores.


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