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Posted: Jan 14, 2013, 12:14 AM
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Registered User
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Join Date: Aug 2002
Location: Toronto
Posts: 31,374
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Why walkable communities, sustainable economics, and multilateral diplomacy are the future of American power
Read More: http://www.foreignpolicy.com/article...tegy?page=full
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The ranks of the world's nouveaux riches are swelling. The planet is on track to welcome 3 billion new members of the global middle class in the next 20 years. For those fortunate enough to climb out of poverty, advancement translates into a 300 percent increase in income and resource consumption.
- That's great for each individual, but as a whole, it will strain our planet to the breaking point. We are not ready to meet the needs of this new middle class: Over the last 20 years, the world absorbed just 1 billion new consumers. Commodity prices, which have risen more than 300 percent over the last decade, are poised for further gains -- and we know that when the prices of strategic commodities rise sufficiently, markets do not adapt so much as states intervene to gain or preserve access to them, whether energy, water, food, or strategic minerals.
- In the face of the present danger and in the best tradition of the republic, America's response must be to lead. The country must put its own house in order and, with willing partners, author a prosperous, secure, and sustainable future. The task is clear: The United States must lead the global transition to sustainability. While some great powers and world capitals have been warning of these dangers for some time, it is clear that the effort ultimately requires an upgrade to the current international system. This will require the kind of principled, consistent leadership and hard-nosed geopolitics that only America, at its best, is able to deliver.
- From 2014 to 2029, baby boomers and their children, the millennial generation, will converge in the housing marketplace -- seeking smaller homes in walkable, service-rich, transit-oriented communities. Already, 56 percent of Americans seek this lifestyle in their next housing purchase. That's roughly three times the demand for such housing after World War II. The motivations are common across the country. Boomers are downsizing and working longer, and they fear losing their keys in the car-dependent suburbs. Millennials were raised in the isolated suburbs of the 1980s and 1990s, and 77 percent never want to go back. Prices have already flipped, with exurban property values dropping while those in walkable neighborhoods are spiking.
- It is not only the United States that needs to get its house in order. Within all regional-scale economic areas, the country will work with the global partnership to promote a mode of development that results in prosperity, security, and sustainability for their citizens. Export-led growth and resource-extraction strategies will no longer suffice. Housing, agriculture, and resource productivity will be the drivers of sustainable economic development, producing jobs, investment, and government revenue. While each region will have a unique starting point, global income convergence will unleash substantial trade opportunities as each region develops robust internal markets. Solutions pioneered in one region will find markets in others.
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$450 Billion in Federal Subsidies Tilt U.S. Real Estate Market Toward Sprawl
Read More: http://dc.streetsblog.org/2013/01/09...toward-sprawl/
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Real estate in the United States, it turns out, isn’t really guided by “the invisible hand” of the free market. In truth, federal policy puts a finger on the scale in a major way. Even apart from the quasi-governmental Freddie Mac and Fanny Mae, the federal government is the single largest investor in the American real estate market. And according to a new report from Smart Growth America, each year an assortment of subsidies, tax credits, and deductions exerts $450 billion worth of influence on the location and character of American residences and commercial spaces.
That massive influence can distort the market in significant, and insidious, ways. “Viewed as whole, federal funds are not targeted to those most in need, are not targeted to strengthen existing communities and are not targeted to places where people have economic opportunities,” says Smart Growth America’s research team. For starters, according to SGA, not a single federal program is primarily focused on support for existing neighborhoods. Government priorities are often contradictory on this front, with subsidies operating at cross-purposes. One program may subsidize new housing in undeveloped locations, for instance, while another attempts to shore up the city neighborhoods left behind. These programs also fail to factor in what it costs to support real estate development: There is no preference for projects with lower long-term infrastructure costs, leading to higher spending on things like roads and sewers at the local and state levels.
Overall, the report suggests, federal real estate interventions undermine market trends toward the development of more walkable places. About 85 percent of federal housing subsidies flow to single-family housing over multi-family, although only 65 percent of American households are homeowners and the majority of renters live in multi-family buildings. This has hampered the market for rental housing even as demand for multi-family rental housing has soared following the housing bust. “Federal real estate spending is stuck in the past,” said smart growth-focused real estate developer Chris Leinberger in an SGA-sponsored call with reporters yesterday. “It’s not what the market wants today, it’s what the market wanted in the ’70s and ’80s and into the ’90s.” Leinberger added that while consumers are demanding walkable urbanism, federal policy stands in the way of that kind of development — to the detriment of the economy.
Some federal programs, for instance, establish “use limits” on low-cost loans. In order to apply for an Federal Housing Administration loan or loan guarantee, a builder has to limit the amount of commercial space in the project, which ends up favoring more spread out, single-use development over the more walkable, mixed-use approach. The agency just raised the use limit for condo buildings, but more reforms are needed. “Real estate represents 35 percent of the asset base of the country,” Leinberger said. “It’s time to get the real estate industry back engaged.” All these government real estate subsidies add up to a regressive, poorly-targeted, and wasteful use of public funds.
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