Why Are Developers Still Building Sprawl?

Boomers and Millennials say they want to live in compact, walkable developments, but builders are putting their money into suburban McMansions

There are communities that have successfully made the shift to building more compact, walkable developments, even in the most unlikely places. Some of the most excessive sprawl during the housing boom, for instance, occurred in the inland areas of Northern California, places like Brentwood, Antioch, Vacaville. But those areas are now rethinking what kind of building they want to allow, and what kind they don’t.

“There was, up until 2008, a profound overbuilding of single-family homes,” Jeremy Madsen, with the Greenbelt Alliance, a Bay Area smart-growth group, told me. “The ‘drive ’til you qualify’ syndrome ran rampant in the Bay Area.”

Now, many of these developments are half empty or unfinished, waiting for demand to come back—if it ever will. But cities in the Bay Area are starting to put in urban-growth boundaries, which prevent building from happening outside of that area. Voters handily defeated a proposal to allow developers to build on Doolan Canyon, an open space outside of the city of Dublin’s urban-growth boundary. In the city of Windsor, in Sonoma County, a new-urbanist developer decided to create a downtown and built a mixed-use combination of offices, retail, and homes near a transit station. And a planning commission in Stockton, another epicenter of the housing boom and bust, recently said no to developers who wanted approval to build 2,000 homes on what is currently farmland, the first-time observers could remember the commission doing so.

Even San Jose, once considered just a giant suburb of San Francisco, has shifted its mentality, Madsen said. The city’s newest general plan, adopted in 2011, emphasizes ‘smart growth’ and called for the growth of ‘urban villages’ located along current and future transit lines. It promotes infill development rather than sprawling out to open lands, aims to reduce the number of trips that have to be made by car, and rethinks street design to encourage walking and biking.

“I think we’ve moved into a different era in the Bay Area in term of how we’re going to grow in the future,” Madsen told me. “The consumer preference side of things appears to be changing.”

But, he said, even though leaders and consumers might be on the same page, it isn’t going to be easy, since a lot of the zoning and building layouts are from the old era.
“There’s going to be a major challenge when it comes to implementing this shift, but there’s a critical mass of opinion and market direction to get it going,” he said.
It’s easy to dismiss the Bay Area’s plans as another California anomaly. But California often leads the rest of the country when it comes to adopting environmentally-friendly policies that are sustainable for the long term.

Other areas may continue to eschew ‘smart growth,’ and just as America is divided politically, it could become a more divided country in the way its residents live. People in cities such as Washington D.C., Boston, and Seattle, will want more walkable developments, while consumers in what Leinberger calls “the laggards,” including Phoenix, Dallas, and Las Vegas, will continue to live in sprawling suburbs.

But it’s also possible that Boomers and Millennials in the laggard cities will come around. After all, even in Las Vegas and Atlanta, some builders are starting to shift their mentality. Zappos founder Tony Hsieh has poured $350 million into downtown Las Vegas, creating a shopping center built from shipping containers, mixed-use residential development, and a host of walkable amenities like a donut shop and a bookstore. And in Atlanta, a developer is in the midst of converting a former Sears building near downtown to a mixed-use community of apartments, restaurants, and retail.

Not everyone will want to live in downtown environments like these. But if they’re appealing to consumers, they could motivate a whole new segment of buying, even in cities such as Las Vegas and Atlanta. If consumers come around to “smart growth” in those areas, perhaps builders will too.

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