Consistent market found for NU

Consumer surveys in seven cities find that around 30 percent of respondents would seriously consider a new urbanist housing product.

Everyone involved in building the New Urbanism (NU) — designers, developers, and financial backers — would like to know just how many consumers would prefer compact, pedestrian-oriented neighborhoods if the choice were available to them. The US housing market is probably too vast and diverse to supply a nationwide average, and a truly in-depth study has yet to be conducted. But localized studies continue to challenge the conventional wisdom that developers and builders are simply building what consumers want.

Robert Charles Lesser & Co. (RCLCO), one of the nation’s leading real estate advisory firms, has conducted consumer studies for developers of new urbanist and hybrid projects. Managing Director Gregg Logan of RCLCO’s Atlanta office says that studies in cities as diverse as Atlanta, Phoenix, Denver, Provo, Albuquerque, Boise, and Chattanooga show that a consistent 25-33 percent of respondents would seriously consider buying a home in a new urbanist setting.

The clients include Arcadia Land Company, developers of Alvarado in downtown Albuquerque; Stephen Macauley, developer of Ridenour Town Center and the Walden Park project in Georgia; The Conservation Fund, which is involved with a Covington, Georgia, project that was recently designed in a charrette by Duany Plater-Zyberk & Company; and Grossman Family Properties, the developers of Hidden Springs in Boise, Idaho.

Tradeoff questions
The results were obtained not by asking people directly about their attitude to smart growth or NU, but by posing a series of tradeoff questions that contrast elements of NU with conventional suburban development. The surveys asked, for example: 1) If people would prefer a larger home on a larger lot with average workmanship or a smaller home on a smaller lot with a high level of workmanship. 2) If they would prefer a community with high levels of privacy or one where neighborliness and community were more highly prized. 3) If they would prefer a community where children have to be driven to a larger school, or one where children can walk to a smaller neighborhood school. 4) If they wanted the convenience of one-stop shopping at a super store or would prefer shopping at a number of smaller stores. Other questions touched on proximity to nature, architectural style, and streetscapes.

In the survey conducted for the Conservation Fund in Atlanta, respondents picked the new urbanist options by large margins, ranging from 71 to 78 percent. However, only 30 percent of respondents ultimately expressed a willingness to buy into a community with these characteristics — lot size turned out to be the major stumbling block. Logan speculates that consumers have been conditioned to believe that they need large lots and equate them with value.

“Considering that their choices are so limited and that they don’t have any experience of the product, I think the fact that 30 percent are interested in it is a pretty significant number.” Logan says. “In all these cases, what has driven us is developers who like the idea, and since we can’t take our lenders to see the last five successful deals like it, we need a survey that will help them appreciate that there is indeed a market there. The result of the study convinced us that there is.”

Another million people are projected to move to the Atlanta area over the next 20 years, Logan says. “Thirty percent is 300,000 people, and if they could be accommodated in new urbanist housing, that would have a tremendous impact.”
He adds that the percentage may actually be higher because the demographic trends away from the traditional nuclear family household favor growth in the segment of people who prefer a NU type of development. Furthermore, the more projects are built, the more home buyers will be educated about the benefits of alternative development patterns.

A caveat
Logan emphasizes that these are local surveys that happen to show a consistent preference for NU. They have not been weighted to reflect a nationwide trend in consumer attitudes. Another keen observer of the market, Todd Zimmerman of the market research firm Zimmerman Volk & Associates, categorically rejects any attempts at pinning down a percentage of American households that would prefer NU because such numbers have no meaning in specific locations or for specific projects. “I think the average is actually something north of 50 percent, but I don’t have any statistics to back that up,” he says.

“All I know is, that in 120 studies in 37 states we have always found a significant market, and the one common thread is that they are all different.”

The surveys by RCLCO deliberately targeted people with the means and opportunity to purchase a new home. The randomly selected sample groups typically numbered about 500 people who earned above $30,000 or $50,000 (depending on the market) and contemplated moving within the next 18 to 24 months, Logan says.

While such studies may prove useful for specific clients, Zimmerman notes that RCLCO “made some assumptions about the demographic and socioeconomic characteristics of the market and then phoned those types of people. It doesn’t uncover what the market is or who they are, but it does look at what the attitudes are of the groups that they selected.”

Both Logan and Zimmerman point out that this kind of consumer survey is hampered because the majority of Americans don’t have a proper frame of reference to what a genuine traditional neighborhood would be like. “A lot of people don’t know what it would do for them.” Logan says. And telephone surveys give respondents no visual clues, he adds.

Visual surveys show greater acceptance of density
Emil Malizia and Susan Exline of the Center for Urban and Regional Studies at the University of North Carolina last year published a study that collected and analyzed many of the available statistical and visual surveys on consumer housing preferences. Consumer Preferences for Residential Development Alternatives concludes that visual surveys are more appropriate for measuring people’s attitudes about density. When they can see what is being talked about, respondents showed a greater preference for higher density development with smaller lots, smaller homes, and a mix of housing types. “They will accept mixed land uses as long as human scale and good design are prominent,” the report states. “They will make tradeoffs as long as the objectives of safety and investment value are not compromised.”

In a visual survey in Fort Collins, Colorado, 65 percent of respondents agreed that neighborhoods should include a wide variety of housing. In a Midtown Atlanta study, 57 percent of survey participants wanted future development in the form of neighborhoods with a mix of residential, commercial, and civic uses all within walking distance of each other.

Zimmerman has some suggestions for how to reach a reasonable conclusion on the size of the market for the New Urbanism. “A qualifying phone or mail survey to a truly random sample would be the starting point.” Following that, the survey should ask tradeoff questions such as the ones used in the RCLCO surveys and refine those results through a visual survey. Finally, Zimmerman says, qualitative focus group interviews are necessary to get a full picture. Such an undertaking would cost a lot of money and would have to be carried out by an expert public opinion research firm such as Gallup.
Common to all surveys, statistical or visual, is the discrepancy between what people say they believe and what they are willing to pay for. Ultimately, the most important survey for NU is the number of downpayments and rental contracts.