Tuesday, June 9, 2020

Post #7: Building Mixed-Use Density - Part 1

In some of my prior posts, I have advocated for midwestern cities to both increase their density and to increase the diversity of uses within a given district or neighborhood.  This post will be the first of a two-part series that take a deeper dive into this “mixed-use density” (for lack of a better term) that I think is so essential to the future success of cities.

To be clear, I am not saying that every neighborhood should change into an assortment of high-rise mixed-use buildings.  Some areas will need to be relatively low density and some land uses do better in a specialized, single use environment.  Many people, for example, will have a strong preference for a single family home in a low-density neighborhood of similar single family homes -- that is perfectly fine.  As a second example, many manufacturing businesses function better when they are located in a low-density industrial district that allows only a very limited range of land uses.  There is no need to mix a steel plant with elementary schools and single family homes.

However, the typical midwestern city is far too spread out to be able to prosper in the future.  And many segments of our society would enjoy and would be better served with a wider variety of land uses located reasonably nearby than traditional development patterns have produced over the past several decades.  In my opinion, it will be crucial for cities to develop numerous nodes of mixed-use density (not just a single downtown core) throughout each urban region.  This is a trend which has been building slowly for the past decade or two, but the trend needs to be aggressively supported by cities for the next couple of decades in order to meet the economic, housing and social needs of our society.

This post is going to focus on the “why” of mixed-use density.  The next post in the series will focus on the “how” and “where” parts of the equation.  Before getting to the “why,” some background information might be helpful.

How Dense is Dense Enough?

This is a difficult question to answer because there are so many unique characteristics in any given situation, but I will suggest some general parameters that I think are a reasonable starting point.  First, however, it will be helpful to agree upon how density should be measured.  In the United States, the most common technique is called the Floor Area Ratio (FAR), which is the ratio of building floor area to land area.  For example, a building containing 5,000 square feet of floor area located on a lot that contains 10,000 square feet of land has a floor area ratio of 0.5.  The building could be either a 1-story building with 5,000 square feet on the ground floor, or a 10-story building with 500 square feet on each floor (or any of a variety of configurations).

For comparison purposes, a typical suburban single family neighborhood has a floor area ratio (FAR) of 0.1 to 0.3.  A suburban strip center generally has a FAR of 0.2 to 0.3 and a suburban office park might have an FAR of 0.25 to 0.4.  At the other end of the scale, in New York City the

Financial District has an FAR of approximately 18, and even the mostly residential area of Greenwich Village has an FAR over 5 (1).

So where should midwestern cities be aiming?  This is an area that I think would benefit from a lot more analysis by planning researchers, but I’m going to go out on a limb and say that a mixed-use district (between 300 and 600 acres in size) should shoot for an average FAR between 1 and 3.  In some areas, it might be fine to go a bit higher (perhaps 4 or 5) but I think you can easily get into an area of diminishing returns where more density hurts the overall character and resilience of an area.  As much as I like visiting New York City, I wouldn’t want to live there and I don’t think that trying to create Manhattan-like densities in a midwestern setting would be a good idea even if it were possible.  Remember, city building is not just about density -- livability, mobility and sustainability need to be considered as well.  Which leads me to the three reasons that I think mixed-use density is vital for midwestern cities.

A Robust and Resilient Micro-Economy

A short while back, Amazon conducted a “search” for their second headquarters.  Hundreds of cities spent thousands of man-hours to put together information for the application process -- dreaming that their city would somehow win the economic development equivalent of the lottery.  In fact, the odds of Indianapolis, or Kansas City, or Tulsa landing the Amazon headquarters was infinitesimal. In my opinion, most cities would be much better off ignoring opportunities for what appears to be a “grand slam” to instead focus on hitting “singles” -- the much less glamorous process of building small businesses from the ground up.

Over 15 years ago, Richard Florida wrote a book entitled The Rise of the Creative Class (2).  The book was his attempt to explain the forces which had been (and continue to be) transforming our economy and society.  He argued that creativity was a fundamental economic force that was leading to a rise of a new economic class:  the creative class.  Not just artists and musicians, the creative class includes programmers, inventors, scientists, entrepreneurs, and media creators of all types.  Much of what he observed at that time is now widely accepted and much of what he predicted has come true.  This has led to a new economic development strategy that is much less focused on recruiting companies and much more focused on building a workforce that is smart, creative and technologically savvy.  If you have the right workforce, the jobs will appear.

From a community perspective, what this shift suggests is a focus on building places that are attractive to creative people.  It turns out that mixed-use density is one of the physical characteristics that cities which have been successful at attracting the creative class have in common.  And although the big metropolises on the coast have had notable successes, they don’t have a lock on the market.  Nashville, for example, may have been the real winner in the Amazon sweepstakes when it was announced that the company will be building a 5,000-employee “Operations Center of Excellence” in downtown Nashville.  It can’t be a coincidence that lots of smart, creative people call Nashville home and that the fastest growing

portions of the community are not the outer edges, but the core areas in and around the downtown.

Not every creative millennial, of course, will want to live in a condo above a coffee shop in a trendy, mixed use district.  Some will prefer a traditional single family home in a traditional neighborhood.  That is fine.  My point is that midwestern cities already have thousands of single family homes in nice neighborhoods.  What is missing are the trendy, mixed use neighborhoods.  Most cities have a handful, but what is needed are dozens and dozens.

Finally, allowing mixed uses not only makes it easier to build a hip neighborhood, it allows the neighborhood to adapt quickly to changing economic conditions.  Rapid adaptability is essential for economic resiliency and it allows the creative class to do what they do best.  It also increases the odds that combinations of businesses will build economic synergies where the whole is more than the sum of the parts.

Lifestyle and Mobility Options

The auto-oriented, suburban style development patterns that have dominated urban growth for the past 70 years were designed primarily for the benefit of affluent white people who had a lifestyle that fit into a fairly limited range of options (e.g. nuclear family, young single professional, empty nest retiree, etc.).  People of other races, ethnicities or sexual orientations were left to fend for themselves in the older parts of the city that were left behind.  The result was suburb after suburb that was safe, pleasant, and bland.  In fact, blandness was virtually ensured through development regulations that prohibited anything that was too odd, too eye catching, or too different.

In my opinion, one of the most positive hallmarks of the millennial and gen-z generations is their willingness to accept a wide variety of backgrounds and lifestyles as normal.  To be honest, I have a hard time keeping track of the various labels and characteristics, and I try to suppress my Boomer inclination to be judgemental.  Younger generations, however, seem to embrace the diversity and celebrate the differences.  The very areas that affluent whites escaped in the 70s and 80s are now being reborn as hip, urban oases that pulse with energy around the clock.  It is this diversity and energy that fuel the creative class.  Even people who can’t tolerate the chaotic energy 24/7 will visit on a regular basis because these areas are fun and exciting.

The new “knowledge economy” is a global economy, and you won’t thrive in a global economy unless you embrace diversity.  Cities will not thrive in the new economy unless they build places where people from different backgrounds create unexpected connections, odd business combinations create unexpected synergies, and buildings designed for one thing end up being used for something completely new.  It is in these creative places where mixed-use density is most appropriate.

Hand in hand with a diverse array of lifestyles is a need for a diverse array of transportation options.  Although the younger generations own cars and appreciate their usefulness, they are not in love with the automobile the way that Baby Boomers were and they are much less likely to let a car be a major part of their self-image.  Consequently, they are much more open to other forms of transportation.  The problem is that other forms of transportation are really effective only where there is density.  Walking, biking, scooters, Ubers, transit and car shares are convenient when your destination is relatively close by, but much less convenient in low-density suburbia.

While all of these options are important, the one that should be at the top of the list is walking.  It is easy, cheap, flexible and provides all sorts of mental and physical health benefits.  If walking came in the form of a pill, it would be considered a wonder drug.  Unfortunately, most cities make walking hard.  Streets are designed to maximize vehicular flow so that pedestrians feel unsafe.  Sidewalks are often too narrow, in poor condition, or missing entirely.  Buildings are allowed to present blank facades to the street so that walking is boring.  All of these problems are easily corrected provided cities prioritize the pedestrian environment and pay attention to streetscape design instead of treating it like a left-over wasteland in between buildings.

Municipal Solvency 

Although the first two reasons are compelling, midwestern cities should embrace mixed-use density simply because it is the best way (and perhaps the only way) they will have the financial capacity in the future to meet the demands of their citizens.  Municipal budgets are being eaten alive by rising service costs and infrastructure maintenance requirements at the same time that revenue sharing from state and federal sources has largely dried up.  Many cities chase new growth at their edges thinking that the additional tax revenue from that development will solve their dilemma -- it won’t, it just makes it worse.  New suburban growth requires that new infrastructure be built which simply adds to a city’s infrastructure liabilities.  Yes, there is a bump in revenue, but like a Ponzi scheme, the new revenue is never enough because it can’t keep up with the growing liabilities.  (For more information, see the writings of Charles Marohn on his Strong Towns website. (3) )

The dirty little secret of municipal finance is that what cities build most of -- single family neighborhoods and strip shopping centers -- doesn’t pay enough in taxes to cover on-going service costs and long-term maintenance costs.  Everything seems fine initially, but after 60 or 70 years infrastructure starts to crumble and it is really expensive to replace.  So cities start to prioritize.  Critical infrastructure tends to get fixed correctly, although often several years after it really needed to be replaced.  Less important infrastructure tends to get “band-aid” maintenance that appears to fix the problem but really lasts for just a few years before starting to crumble again.  Low priority infrastructure, often concentrated in poor neighborhoods, gets either minimal maintenance or none at all.

The problem is a difficult one to solve and I certainly am not going to claim to have all the answers.  But basic math seems to dictate that either tax revenue per square mile must go up and/or costs per square mile must go down.  Moving to minimal maintenance is an example of a “costs going down” strategy although it is not as useful as you might think.  Cities aren’t necessarily spending less per square mile, it is just that their maintenance needs have skyrocketed as infrastructure has reached the end of its useful life and their maintenance dollars are spread so thin that band-aid solutions are all that can be accomplished.

A more productive approach, in my opinion, is to increase tax revenue per square mile.  This is where increased density comes into play, but it only works if cities increase density in areas that are already served by existing infrastructure.  In other words, what is needed is redevelopment of existing neighborhoods not new development on the edge of town.  Actually, there will probably always be some new development on the edges, but it should be a small fraction of the amount of redevelopment or infill in areas that already have streets, sidewalks and utilities.

Redevelopment can be done in several different ways, but it almost always involves neighborhoods that are declining or blighted.  If property values have fallen far enough but some residual demand still remains, redevelopment can simply be fixing up dilapidated structures or in-filling vacant sites without changing the previous uses.  In most cases, however, redevelopment is more financially feasible (and hence more likely) if density is allowed to increase (at least doubling or tripling).  This has the added advantage of not only restoring but actually exceeding the original tax value of the neighborhood.

Mixed use is important to this equation because it gives property owners, residents and developers the ability to make rapid land use adjustments as opportunities arise or fade away.  Governments (and neighborhood leaders) are notoriously bad at being able to predict the exact land use mix that an area needs to be financially vibrant, and the process of getting a land use designation changed is generally so onerous that people just don’t try.  A well designed mixed-use designation can allow the experimenting and adaptation that a creative place requires.

Thoughts?  As always, share your thoughts and ideas by leaving a comment below or sending me an email at doug@midwesturbanism.com.  Want to be notified whenever I add a new posting?  Send me an email with your name and email address.


1. An Analysis of Methods for Calculating Floor Area Ratios; Kohn Pedersen Fox Associates PC;  Floor Area Link

2. Richard Florida, “The Rise of the Creative Class,” 2002; and an essay on the Rise of the Creative Class - Revisited; at Essay Link

3. Charles Marohn, “Strong Towns: A Bottom Up Revolution to Rebuild American Prosperity,” 2019; and the Strong Towns website at www.strongtowns.org.