Arthur C. Nelson, Ph.D, FAICP

Director, Metropolitan Institute

Professor, Urban Affairs & Planning

Virginia Tech – Alexandria Center

August 30, 2007

Front Page December 4,

2004

America Grows200 million in 1968300 million in 2006400 million in 2037500 million in 2068600 million in 2099

America adds 100 million people faster than any other nation except India and Pakistan

Source: Analysis by Arthur C. Nelson.

Emerald Coast Grows Faster 700,000 in 2005

900,000 in 2020

1.0 million in 2030

1.3 million in 2060

1.5 million in 2080

1.8 million in 2100

As the US doubles its population the Emerald Coats grows by 2.5 times.

Source: Analysis by Arthur C. Nelson.

Getting Ahead of the Curve – US

US 2000 2030

Population 281 million 363 million*

Housing Units 116 million 150 million

Jobs 166 million 225 million**

*Census projections are always too low by roughly 5-10%.

**Woods & Poole Economics, 2006, based on US Bureau of Economic Analysis trends.

Getting Ahead – Emerald Coast

Florida 2000 2030Population 620,000 1,000,000a

Housing Units 280,000 450,000b

Jobsc 340,000 630,000d

Job spacee 170 million 320 million

a. GeoPlan, UF, 1000 Friends of Florida. Figures rounded.b. Estimated proportionate to residential units per person in 2000.c. Space-consuming jobs.d. Adapted from Woods & Poole Economics, 2006.e. Arthur C. Nelson, Metropolitan Institute at Virginia Tech.

Residential DevelopmentEmerald Coast 2000 to 2030Growth-Related Units 170,000Replaced Units 160,000*

Converted Units 80,000**Total New Units Built 250,000

Percent of 2000 Units 90%Total Housing Construction $90 Billion

*Loss rate =~ 20% per decade compounded based on loss-rate analysis of units enumerated in 1990 and 2000 censes.

**Half of residential units “lost” are assumed to be replaced in-place.

Nonresidential Development

Emerald Coast 2000 to 2030

NonRes Square Feet 2000 170 million

Growth-Related Square Feet 150 million

Replaced Square Feet 120 million*

Total Square Feet Built 270 million

Percent of Space in 2000 160%

Total NonRes Construction $35 Billion

*Loss rate =~ 20% per decade compounded. (Source: Arthur C. Nelson, Metropolitan Institute at Virginia Tech.)

Life-Span of Building Space

RetailOffice

WarehouseEducation

Nonres.Homes

0

50

100

150

200

Ye

ars

What About ….?

Telecommuting? Internet retailing? Emerging technologies?

And their effect on future space needs?

Telecommuting Promises

Higher productivity Reduce traffic congestion Reduce air pollution

Telecommuting Reality

Cabin fever reduces productivity in long- term after short-term gains.

Cabin fever increases trips in am, noon, pm. Cabin fever increases peak pollution emission

discharges with “cold” starts. Census “work at home” telecommuting

indicator:1990 = 3.0%

2000 = 3.3%

Internet Retail Sales Growth Rate and Share, 1998-2006

1999 2000 2001 2002 2003 2004 2005 20060%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rate

Share

Internet Retail Sales Growth Rate and Share Figures, 1998-2006

Year Retail Internet Share

1998 $1.20T $ 5.5B 0.46%

1999 $1.49T $12.3B 0.83%

2000 $1.56T $24.1B 1.54%

2001 $1.62T $31.0B 1.92%

2002 $1.67T $41.4B 2.48%

2003 $1.83T $53.9B 3.11%

2004 $1.87T $67.3B 3.59%

2005 $1.95T $80.9B 4.14%

2006 $2.03T $95.3B 4.69%Source: Dept. of Commerce; analysis by Arthur C. Nelson

Reality Check Nationally

Space Class 1992 2003 %Dif

Retail & Service 57 62 +9%

Office, Medical, Ed. 88 87 -1%

Total Glamour Space 145 149 +3%

Warehouse & Storage 45 35 -23%

All Other 75 63 -16%

Non-percentage figures per capita based on Census estimates.

Source: Energy Information Administration, Commercial Buildings Energy Consumption Surveys for 1992 and 2003.

Emerald Coast Construction 2000-2030

Construction Amount

Residential $90 Billion

Nonresidential $35 Billion

Infrastructure $25 Billion

Total $150 Billion

Source: Arthur C. Nelson, Metropolitan Institute at Virginia Tech

How Does It Grow?

Northwest Florida 2005-2060

Source: Adapted from 1000 Friends of Florida, Florida 2060

Market Analysts Finding Changing Preferences

National Association of RealtorsNational Association of Home BuildersNationally Recognized Market Analysts

Urban Land InstituteLend Lease/PriceWaterhouseCoopers

Joint Center for Housing Policy at HarvardGolfing Buddies and Taxi Drivers

“Traditional” Householdson the Wane

Household Type 1960 2000 2040 HH with Children 48% 33% 27% Single-Person HH 13% 26% 30%

Share of Growth 2000-2040

HH Type 2000 2040 Change %Share

W/ children 35 41 6 13%

W/o children 71 111 40 87%

Single-person 26 44 17 38%

Figures in millions of households.

Source: Adapted and extrapolated from Martha Farnsworth Riche, How Changes in the Nation's Age and Household Structure Will Reshape Housing Demand in the 21st Century, HUD (2003).

People Turning 65 Each Year

Source: US Census Bureau – 65+ in the United States: 2005; Wan He, Manisha Sengupta, Victoria A. Velkoff, & Kimberly A DeBarros. December 2005.

1000

1500

2000

2500

3000

3500

4000

4500

Smart-Growth PreferencesTra

nsit

Ac

ces

s

Scho

ol

Wa

lk

Sto

res

, E

ati

ng

Sid

ew

alk

s

Hous

ing

Mix

Eth

nic

Mix

Incom

e M

ix

Lif

e-C

ycle

Mix

Neighborhood Feature

0

10

20

30

40

50

60

70

80

Perc

ent

Source: National Association of Realtors & Smart Growth America, 2004.

Unmet Walkable Demand

Residential Form BostonAtlanta

% want drivable suburbs 30% 41%

% of those who have 85% 95%

% want walkable suburbs 40% 29%

% of those who have 70% 35%

Source: Jonathan Levine, Zoned Out, Resources for the Future, 2006.

Another Look at Demand

RCL Co. finds one-third of current buyers want smart growth / new urbanism features.a

Households relocate on average about once every 6 to 9 years.

By 2030 about 40-50+ million households will want smart growth / new urbanism features.

Future smart-growth demand more than all new growth-related housing units constructed

or converted combined.aGregg Logan, EPA Large-Production Builders Conference, January 31, 2007.

Housing Unit Preference by Type, Surveys

Unit Type ShareAttached 38%

Apartments 14%Condos, Coops 9%*Townhouses 15%

Detached 62%Small Lot (<7,000 sf) 37%

Large Lot (>7,000 sf) 25%Source: Low range of surveys reviewed by Arthur C. Nelson, “Planning for a

New Era,” Journal of the American Planning Association, Fall 2006.*Toll Brothers shifting product mix to 15% condominium; WSJ 12/06.

Looming Large-Lot Oversupply, 2005-2030

Supply Preference Mid-Point

Unit Type 2005 Change Change

Attached 39M 15M 13M

Small Lot 12M 40M 22M

Large Lot 58M - 23M - 3M

Figures in millions of units.

Preference change based on low-range of preference survey averages.

Mid-point is mid-percentage distribution between 2005 and low-range estimate of preference surveys and supply of occupied units in 2005.

The Opportunity

The Promise Land

The New American Suburb

Tear Up a Parking LotRebuild Paradise

Large, flat and well drained.Major infrastructure in place; upgraded facilities to

support redevelopment needed anyway.4+ lane access, 1+ sides, wide rights-of-way, often

capacity for dedicated transit lanes.Single ownership – Kelo problems reduced.Already removed from low-density subdivision use.FARs at 0.15 to 0.25May more easy to make NIMBYs into YIMBYs.Slide title phrase adapted from Joni Mitchell, Big Yellow Taxi, refrain: “Pave

over paradise, put up a parking lot.”

The Parking Lot Beckons

Calculation Structures Space

Food, Retail, Office,

Service, Warehouse 3.4M 43.0B

1- & 2-Floors 3.1M 38.0B

50+ Years Old in 2025 2.0M 24.3B

Assumed Average FAR 0.2

“Ripe” Acres 2.8M

Source: Building, space data, Commercial Buildings Energy Consumption Survey 2003

Re-Building Capacity

Calculation Result

Ripe Acres 2.8M

Percent Assumed Redeveloped 25%

Redeveloped Acres 0.7M

30 dwellings @ 1,500sq.ft.

30 jobs @ 500sq.ft. 1.4FAR

Percent Residential Demand 50%+/-

Percent Employment Demand 50%+/-

Actions NeededSystematically evaluate existing low-intensity

commercial areas for their conversion ripeness time-frame.

Assess redevelopment parameters, needs.Evaluate feasibility of creating transit corridors out

of existing commercial highways.Engage stakeholders now; create “sector” and

“form-based code” plans.Explore win-win financial tools to bridge rate-of-

return gap.

Thank you!