Last year, U.S. News and World Report ranked states by housing affordability.  They compared the cost of living with how much citizens in each state had to spend.  According to their ranking, Ohio was the most affordable, with Hawaii being the least.  Ohio ranked highest even though it has only the 11th lowest cost of living.  What made Ohio rise to the top was how their household income favorably compared with cost of living.  Mississippi, on the other hand, which has the lowest cost of living in the 50 states, ranks 13th in housing affordability thanks to its lower incomes.


Housing costs typically consume the largest portion of a household budget.  The category usually in the number two spot is transportation.  When an individual or family is making a decision on where to the live, they often overlook how transportation costs can add a significant amount to their household spending.  Homes may be cheaper away from town, but did you consider how much more you might spend traveling to work, shopping and other trips?


To help draw attention to transportation cost the Center for Neighborhood Technology created a Housing and Transportation Affordability Index (H+T Index).  This index compares housing prices with incomes, but also adds in transportation costs.  They regard 45% as the most a household should spend on housing and transportation.  Their online tool is available to all at https://htaindex.cnt.org.  You can see down to the neighborhood how well home prices match up with incomes.   Then you can add in transportation costs and see how affordability shifts.


Where I live in Traverse City, Michigan, in town houses fetch nearly twice the cost per foot as those in the suburbs, and even more than twice those out of town.  So a home buyer would naturally be inclined to look to the ‘burbs and beyond for value.  But according to the H+T Index, most in town neighborhoods are rated affordable, whereas most neighborhoods beyond are not.  And affordability generally fizzles the further away from town you get.  Now some of this has to do with higher income households being attracted to urban living, but the impact of transportation costs is unmistakable.


Living in town affords households to shed a car, or even two, and can lessen the impact on the car or cars they do own because they are used less.  The ability to walk or bike to destinations, along with the availability of fixed route transit, and on call services like taxis and Uber, make personal cars costs go down (or disappear!)  The Center for Neighborhood Technology calls this “locational efficiency.”


Living in a location efficient neighborhood can save you $10,000 annually, or more.  Consider that the next time you are looking to move.

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When it comes to downtowns, we often get what we ask for…or what we don’t.  We focus on place-making, great events, on improving retail, attracting office businesses and having a good mix of housing, all inside the boundaries of our downtown.  But what happens outside of its boundaries is just as important, and has a profound impact on the success or failure of your town.  This is especially true of smaller towns.  It is critical to be aware of what is happening outside your borders, and to advocate on your downtown’s behalf.


When downtown managers are struggling to understand where their downtown is and what it needs, often I recommend a market study.  These studies looks at real estate in your district and measure such factors as vacancy rates, retail leakage and turnover.  Market studies also look at your downtown’s trade area.  A retail trade area is the geography that your shops and restaurants pull customers from.  The extent of a trade area depends on what kind of pull factor your town exudes, and also on travel time for the shopper.  The more compelling a downtown you have, the more pull factor it has, and the further diners and shoppers are willing to travel to go there.  This, of course, it why downtown organizations work tirelessly on improving their town’s draw and appeal.


Besides identifying the geography of the trade area, market studies look at the buying power within in.  Your downtown may enjoy spending from daytime workers, but for smaller towns without a significant office base, the bulk of spending comes from households in and around your town center.  Buying power is a function of the average household income in your area and the number of households within your trade area.  The more households, the better.  But is your town spreading out beyond your downtown’s trade area?  This is a slippery slope you do not want to slide down.


Small downtowns with 40 or less shops can have a trade areas of only three miles.  If a town’s trade area is only three miles but is seeing housing growth beyond three miles, it likely is losing potential spending.  When housing spreads out, so does retail, and usually in the form of auto-centric sprawl retail.  This further hurts downtowns by creating retail competition that draws more spending dollars away from within that downtown’s trade area.  The slippery slope of this phenomenon includes overbuilding retail, which ultimately hurts everyone.  As homes and retail spread further out, so do other uses like office, services, industrial and other uses exacerbating the problem.


There was a time in Traverse City when our well-meaning Chamber of Commerce was promoting the idea of a suburban office park.  The Chamber felt such a park was needed to help attract businesses that bring with it the kind of jobs Traverse City needed.  The Downtown Development director at the time, the iconic Bryan Crough, argued against such a park.  He knew that this park would draw away many of the office businesses already located in downtown.  Bryan’s message was “Downtown is our office park!”  Bryan prevailed and the suburban park was never build.  Instead, downtown became the strongest and highest value office submarket in the region.  


We often feel that as downtown managers we do not have control of what happens beyond our borders.  We may not, but we have influence, and that influence should be brought to bear when decisions are being made that hurt our town centers.

Just returned from Savannah Georgia where Leslie and I attended the Congress for the New Urbanism conference.  Savannah was founded in 1733 by Brit James Oglethorpe, who is credited for the city's layout and, most notably, its iconic squares.  It is a city that not only has a long history, but also boasts a living history book in its one square mile historic district.

Savannah's historic district is not only filled with its famous squares, but more importantly, building after historic building offer historical perspective and a sense of place any city would envy.  Many of these buildings are accompanied with interpretive plaques to give the passer by details of the building's importance to the city's past.  But the buildings themselves add the most value to the Savannah experience.

Savannah's buildings span the architectural spectrum from Colonial to Regency to Beaux Arts.  These buildings frame the city's 22 squares and give them life and context.  Like only a few other cities in North America, their rich form and authentic materials give the visitor the sense that they are on another continent. 

It is it's preservation of history; not just through tours, signs and plaques, but also through the insistence to preserve irreplaceable buildings, and to maintain their character; that makes Savannah such a compelling place.

Savannah is so compelling that 7 million people visit annually.  New hotel construction is on the rise, indicative that even more tourists want to experience this magnificent historic district.  These new hotels and other new buildings are built with quality materials and with a form respectful of Savannah's pedestrian friendly environment.

We spoke to a couple from Northern Michigan who just bought a home in the historic district and plan on spending their winters in Savannah.  They said they had been visiting Savannah for years and "fell in love" with it.  Savannah's charm and authenticity make it a hard place not to love. 

The popularity of cities is self evident these days.  Millennials and empty nesters are flocking to downtowns across American, attracted by culture, ubiquitous dining options, and the ability to reduce or eliminate their reliance on the automobile.  Some cities exhibit so much gravity that high prices and gentrification are real problems.  But there is another, related trend of equal importance.  This is the growing popularity of so-called “surban” living.

The term surban was coined by John Burns, a real estate consultant in California who studies shifting housing preferences.  He catalogued an offshoot of the popularity of cities driven largely by millennials who were getting married and having kids.  This cohort loves city living, but also looks for the additional room families require, better schools suburbs often offer, and good transit to them to jobs in the city.  Burns looked at this trend is the context of larger cities like Chicago or San Francisco, where folks seeking surban living are drawn to walkable suburbs such as Naperville in the Chicago area or Walnut Creek east of San Francisco.  These suburbs offer many of the characteristics of downtown, but on a smaller scale, and allow for the house and yard growing families seek.

Larger metropolitan areas are well served by surban communities.  These larger metros have suburbs with historic downtowns that have the form and density to provide the attributes surban wannabes seek.  Smaller city metros, characterized in the census as micropolitan areas, often lack natural surban areas and therefore only have sprawl to offer those not willing or able to live in the central city.  These regions have to work harder to encourage development that attracts surbanites.

Creating new urban areas (a.k.a. surban areas) requires vision, planning, and leadership.  Left to its own devices, development usually comes in the form of suburban sprawl.  This is not because there is not market demand for surbia, there is as Mr. Burns found out.  Sprawl happens because conventional zoning and transportation policy encourages it, and often outlaws more urban development.

Regions must understand their demographics and the housing preferences of their citizenry.  Once understood, making sure preferred development is permitted and encouraged is critical to assuring the newly identified need can be met.  If your citizens are demanding surban development, you must be sure you have a good plan in place to surbanize!