For some communities in Puget Sound, the Great Recession has been a blessing in disguise.
I'll explain in a minute. First, some recent history. The early part of the past decade saw twin phenomena: rapid outward expansion towards the urban growth boundary and rampant redevelopment in the centers. At one point Snohomish County had approved hundreds of subdivisions in unincorporated areas, while downtown Seattle saw more than two dozen proposals for residential towers. In-between cities like Burien, Mill Creek, Bainbridge Island, Bellevue, and Redmond saw similar versions of ambitious multistory and mixed use buildings. Perhaps a bit too ambitious, for a goodly number of these have fallen into bankruptcy and repossession by their banks.
Furthermore, one cannot fly over the Puget Sound metropolitan area in a small plane without noting scores of housing developments — or rather their ghosts — etched into the landscape. Trees were cleared, roads were graded, some even were paved and outfitted with street lights — all just before the dramatic downturn.
Many of these projects, whether urban or exurban will never come back, but their wreckage with be felt for some time. Scarred landscapes. Fenced-in sites, some still stacked with weathered or rusting construction materials. Isolated houses. Not perhaps as bad as in areas like Sacramento or Las Vegas, where vandalism of half-built structures has occurred. Nonetheless the region is littered with the detritus of an era of wild expectations and manic behavior. As one developer friend of mine has said, “Six years ago, a lot of developers were smoking crack.”
So where is the “blessing” part of the Recession and the housing bust? It's that those development were tearing through the permitting systems of counties and cities at a pace far more rapid than public investments could keep up with. The State’s Growth Management Act contains a requirement of “concurrency” — a term meaning that utilities, roads, parks, and public services should be built as development occurs. During the heady days of building, many cities simply adopted a plan that included a wish list to be constructed at future dates, whenever financing was available. Now, of course, the revenue tap has been all but shut off and little comes in to create the pools of money for such promised public investments.
The Recession has caused a reset in banking practices, consumer preferences and behavior, and real estate development of all kinds. Now, counties, cities, and towns are re-examining where they want to go from this point forward. During the lull, which some economists say could last for another five years, local governments will be doing some serious and welcome soul-searching.
One of these searches will need to re-examine the widespread disdain for rental housing. For far too long, elected officials and citizen groups have treated apartment developments like a pariah, relegating them to noisy arterial streets or slamming them behind strip malls. It's as if only decent folk are those who own single family homes.
If we learned anything from the past five years it is that the American ideal of home ownership has been cruelly oversold. At least 5 million people had no business trying to purchase a home. Once bankruptcies, foreclosures, and underwater loans have run their course, that number will surely be even higher. Yet people still have to live somewhere. And in fact, the first wave of new development financing is for rental housing, not owner housing. The challenge for local governments will be to ensure that these places are livable.
Another fascinating new direction is that many elected official are now seeing the value of making long-term investments in “public goods” — those parts of a community that have a life well beyond the amortization periods of private sector development. They see the importance of making good places rather than simply issuing permits.
For example, several towns have been building new city halls. Puyallup, Shoreline, and Burien among others have used new buildings to signal a commitment to their town centers instead of simply hoping the private sector would sign on and do it all. Making major, highly-visible public investments can attract private partners to the table as they see a city government putting its money where its mouth is.
Puyallup created a distinctive, vertically prominent, landmark building as part of an emerging ensemble of public buildings facing its charming downtown park. An initial attempt to include some housing as part of the mix may come back in the future. Burien combined its city hall with a library to add even more civic import to the place. The Burien City Hall marks a gradual effort to revitalize SW 152nd Street as a lively main street of locally-owned shops and services. Shoreline sees its new city hall as part of a long term effort to dramatically alter the Aurora corridor by increasing the quality of new development and adding public spaces. By this way of thinking public investment is part of a broader urban design strategy.
Even during the height of the Recession, Seattle voters approved a levy for adding and upgrading parks throughout the city. Civic organizations like the Parks Foundation have made a convincing case that investing in shared public spaces is as important as economic development. Indeed, enhancing a community’s common public goods for future generations is a solid economic development strategy. This seems to elude some people who view such non-revenue producing amenities as frills.
Likewise many cities are even now investing wisely in re-designing streets to encourage multiple modes of travel — not just by automobile. Waterfronts are being upgraded with stunning parks and esplanades. (Witness the dramatic turn-around that Bremerton has made in less than a decade.)
This is precisely the time for local governments to spend money on key investments as well as to clean out codes that stand in the way of new forms of housing. Not only are jobs provided in the process, but the foundation is laid for the next wave of development, whatever form that might take. This is managing growth in the best sense of the term.