Are Local Land Use Plans Ready for Emerging Housing Trends?

quarryvillagerd2.pngJonathan Miller, in his recent Emerging Trends in Real Estate 2011 forecast prepared for the Urban Land Institute suggests we are entering a new economic period that he calls the “Era of Less”—less home ownership; smaller size housing; and the need for less “stuff” to put in less space.  Tougher lending requirements; former homeowners re-entering the rental market after losing their homes to foreclosure and echo boomers entering the job and housing markets, but with more difficulty finding jobs that pay enough to support home ownership all suggest an increased demand for rental housing and an overall demand for less expensive (thereby smaller) housing in the coming years.

Less demand for single-family housing and increased demand for smaller, more affordable, and likely more rental housing suggests that local development patterns are headed for a corresponding change.  Local governments should be evaluating their local land use plans and regulations to be sure the demand pattern changes can be accommodated, if not encouraged.  Residential zoning and housing capacity evaluations should consider increasing demand for multifamily rental housing and smaller dwelling units overall.  As consumers reduce expenditures related to homeownership, the need for regional shopping centers and other large-scale consumer retail developments may decline, or at least not continue to expand as rapidly as in the recent past; opening up opportunities for redevelopment of some of these existing, underutilized sites for mixed use residential, office and retail development. 

Simply put, the newer, large-scale suburban developments, and their accompanying infrastructure, which were prevalent during the economic boom may no longer be economically viable. Washington’s Growth Management Act already encourages these changing land use patterns by containing growth, reducing sprawl and recognizing infrastructure limitations on where development can and should occur.  As the Brookings Institute recently theorized, perhaps the most recent “Great Recession” is resetting the market with an economic reality that will direct housing choices and related development toward locations and housing types that are more in synch with GMA goals and objectives.

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