Preservation Green Lab's Liz Dunn on the Economics of Urban Grain

By Julia Levitt

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Liz Dunn is a champion for Main Street. A long-time resident of Seattle's eclectic -- and gentrifying -- Capitol Hill neighborhood, she spent years battling insensitive new development as an outspoken community member before she decided to lead by example. In 1997 she launched her development practice Dunn & Hobbes, which specializes in new-build urban infill projects and adaptive reuse of character buildings left over from Capitol Hill's gritty "auto row" past. Many of her projects have been among Seattle's most talked-about, garnering design awards and becoming veritable magnets for star tenants from the local restaurant and business scene.

Dunn extended her reach beyond Seattle three years ago when she became consulting director of the Preservation Green Lab, an initiative of the National Trust for Historic Preservation. The Lab works with cities to develop policies that leverage the value of existing buildings toward achieving sustainability goals. She speaks frequently to audiences in the U.S. and abroad about the importance of nurturing "urban grain" with more sensitive approaches to urban infill, and possesses a formidable ability to connect with both the business and policy communities.

Liz recently sat down with us to discuss the importance of historic neighborhoods as economic engines, and why it would be wise to put a locavore lens on investing.

The term "urban grain" seems largely qualitative, and thus potentially problematic as a basis for developing and enforcing policy. Are there certain aspects of urban grain that draw a predictable response from a majority of users, and should be regulated?

There are many possible interpretations of the phrase "urban grain" or "granularity" that have to do with the scale and composition of cities. A lot of work has gone into analyzing the street grid -- for example, the size of blocks within a grid. I'm personally most interested in block-scapes, and the elements that coexist within a block or set of blocks.

Yes, I think there is a set of attributes here that is both recognizable and useful for policy making. I think we could be measuring, for example, the economic and social activity that occurs on blocks that have a larger number and variety of skinnier buildings, compared to what you find on blocks occupied by large, homogeneous building fronts. Measuring how the pattern and mix of buildings impacts urban activity would provide a way to assign value to organic, incremental development that would be more quantitative than the cultural arguments for preservation, which would in turn inform land use policies. There are many win-win solutions for balancing urban grain with new development.

As new technologies develop, retrofitting existing buildings to meet new standards -- for energy efficiency, for example -- can be daunting and expensive. Can you talk about how the Preservation Green Lab works to show owners and policymakers how existing buildings can be assets rather than problems?

We will be publishing a piece of research this winter that studies the life-cycle environmental impacts of keeping an existing building of average environmental performance compared to replacing it with a new high-performance green building of the same size. We studied six different building types, and what the early findings are telling us is that the environmental resource impacts of new construction (in terms of energy, carbon, water, materials, toxicity, etc.) are such that it takes decades for the greenest new building -- even one with significantly lower energy and water use -- to pay back these up-front costs.

Our grid fuel mix is as dirty now as it's ever going to be (we hope), so now is not the best time to incur this up-front penalty when we don't have to. My point here isn't that we shouldn't be pursuing new construction projects to increase the supply of urban space, but rather that it makes very little sense to replace existing buildings to do that. I think we need a more precise, surgical strategy for inserting new density. Interestingly, energy efficiency is a completely different lens on the issue than the question of granular urban block-scapes, but one that begs for many of the same policy solutions.

Some of the most economically and socially successful neighborhoods are the ones with a stock of older, three- to six-story buildings.

What are your suggestions for creating policies and practices that would support the surgical infill approach you suggest without over-regulating and discouraging development in general?

My concern is that suburban-style developments are being dropped onto urban sites. There are a number of issues at play here that have to do with the scale of global real estate finance and the skill sets of larger traditional developers, that don't lend themselves well to building more surgically in a community context.

The scale and speed at which the larger pools of real estate money want to be deployed is mismatched with local infill opportunities in terms of size, timing, and geography. It's naïve to think that a huge fund that wants to see returns from deals in cycles of less than five years will engage in the more granular kind of development that leads to better neighborhood economic performance over the long run. They won't be around to reap the longer term returns. But what's unfortunate is that this money funds projects that sometimes effectively suck up and spit out the burgeoning local identity, or neighborhood character, that attracted investors in the first place. What's needed is a locavore model for real estate investing, in which local patient money is connected with portfolios of smaller opportunities within a given district.

Edward Glaeser argues that urban development should be less restrained by policy; specifically, that redevelopment of low-density urban areas is necessary to supplying housing at pace with demand enough to keep housing prices affordable in the cities where people most want to live. You have taken issue with Glaeser's approach, saying that it is too dismissive of existing buildings that have a role despite offering lower density than new towers. What is the argument for urban grain in extreme cases such as derelict urban neighborhoods or burgeoning megacities like Delhi or Karachi?

Let me address the North American context first. We need to put a different lens on density, or folks like Glaeser will have us throwing out the urban baby with the bathwater. This question is far more complex than just supply and demand for raw square footage or numbers of residential units. We should be measuring the value of built form in terms of the 24/7 intensity of human use that it fosters.

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In cities like Seattle, Portland, and San Francisco, some of the most economically and socially successful neighborhoods are the ones with a stock of older, three- to six-story buildings. These neighborhoods have unbelievable street life and entrepreneurial business activity, and they also already have density between 30 and 100 residential units per acre. According to the Urban Land Institute, the average density of urbanized areas in the United States is only seven units per acre. So, from a policy perspective, shouldn't we focus on bringing the benefits of walkable, compact urban neighborhoods to the people in those seven-per-acre places, rather than tearing down and replacing the city neighborhoods that are already working? The new economy is happening in old neighborhoods -- at least in what I would call the hot market cities. The dream of most 20- or 30-something professionals today isn't to work in a cubicle in a brand new high-rise -- it's to be in a flexible, creative space where they can walk out the door into a 24/7 neighborhood. So it's no accident that employers like Google and Microsoft are moving facilities in from the 'burbs to compact, moderate-density neighborhoods with a variety of buildings and local businesses, not to downtown office towers.

What I think is a really interesting challenge is to look at shrinking cities that are experiencing dis-investment, and ask ourselves how that same kind of built infrastructure -- the old stuff with character that people love -- could be used as a catalyst, the backbone for social and economic development policy in those places.

To address your question about the developing world, many experts have also contested the tear-it-down and rebuild approach when it comes to addressing urban slums, for many of the same reasons. The role of the informal economy and the density of human activity in those places is enormous, and much more is lost than gained by displacing it. Again, this is where measures of raw square footage are not very useful. Although conditions in these places are far less than ideal, they function extremely well in many ways. What is needed is a more incremental approach to, and insertion of, transportation and other essential services into such places.

This article available online at:

http://www.theatlantic.com/national/archive/2011/12/preservation-green-labs-liz-dunn-on-the-economics-of-urban-grain/248190/