Don Chen’s Recent Comments

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  Fixing Those High Prices

  There's an easy explanation for why some New Urban developments cost more than otherwise comparable ones: More people want to buy them and are willing to pay a premium. There's a bunch of research backing this up, but one of the first studies was Valuing the New Urbanism, by George Washington University profs Mark Eppli and Charles Tu. Their most recent research shows that New Urbanist homes not only sell for a premium when they're new, but they also hold their premium values over time because there's such a small supply.

  The problem is that New Urbanist developments are often hard to build because existing subdivision regulations and other land use rules dictate that low-density sprawling neighborhoods be built. So it's illegal to build in the New Urban way, unless an enterprising developer is willing to go through the time-consuming and costly rigmarole to get special approvals and variances. Today's rules were written during the mid-20th Century, when we were trying to make room for a country full of families with kids (in 1960, about half of our households had kids). Now we've got aging Boomers and empty nesters, Gen Xers who aren't as crazy about the 'burbs, and lots of one-person households. Only about one-third of households have children, and the percentage is declining.

  We ought to make the rules of development more flexible to allow for more compact neighborhoods. That would make a lot more American homebuyers happier.

  Our nation is growing. As we build to accommodate newcomers, we ought to make both the houses and the neighborhoods greener.On Land-use and development decisions are crucial in the fight against climate change, says new report posted 2 years, 1 month ago 11 Responses

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  Old Habits Die Hard

  Eric, that's a great observation. The fact is, loads of Baby Boomers and Gen Xers are flocking to condos, townhouses, and smaller houses on less land because that's the kind of housing they prefer. This is old news in the real estate sector--check out studies by the Nat'l Assn of Realtors, the Nat'l Assn of Homebuilders, the Urban Land Institute, PricewaterhouseCoopers, Robert Charles Lesser & Co. and lots of other institutions that analyze consumer housing preferences.

  The average size of new homes has recently started to decline and condo sales and values are soaring because about one-third of homebuyers prefer compact, walkable development. Despite this, lots of people--including many reporters--think that all Americans still want bigger houses and are allergic to more intimate living arrangements. As Gregg Logan from Robert Charles Lesser & Co. once said, that's "me-search, and not research." For a good presentation on this stuff, see Prof. Chris Nelson's recent PPTOn Does anyone choose to live in a condo? posted 2 years, 1 month ago 7 Responses