Greenprint of Growth Summary of Findings Shyam Kannan, Principal - - PowerPoint PPT Presentation

Greenprint of Growth

Summary of Findings

Shyam Kannan, Principal and PSG Director, RCLCO skannan@rclco.com

DOT-HUD-EPA Partnership for Sustainable Communities| February 22, 2012

STUDY OBJECTIVES

Quantify and qualify the nature

• f regional development trends

Ground truth the anecdotal

information prevalent in the marketplace

Forecast the likely development

activity at and around Green Line C id t ti th h 2030 Corridor station areas through 2030

Estimate the number of jobs and

amount of tax revenue to be created at and around Green Line Corridor station areas through 2030

RCLCO

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Demand for Transit Oriented Development

RCLCO

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WHAT DOES THE SURVEY SAY?

ONE QUARTER OF THE MARKET WANTS FIXED RAIL TRANSIT

23% 76% Households with preference for Fixed Rail Transit Households without preference for Fixed Rail Transit

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Source: National Association of REALTORS, 2011, RCLCO

WHAT DOES THE SURVEY SAY?

ONE QUARTER OF THE MARKET WANTS FIXED RAIL

22.5%

2+ with Children

Preference by Household Type

19.7%

70+

Preference by Age Group

28.7% 21.8%

Single No Children 2+ No Children

25.9% 22.9% 21.9%

18-34 35-54 55-69 500 1000 1500 2000 Transit Preference Total Respondents 200 400 600 800 1000 1200 Transit Preference Total Respondents

Preference byIncome Level

21.1% 21.4%

Mid High

Preference by Income Level

25.7%

500 1000 1500 2000 Low

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Transit Preference Total Respondents

Source: National Association of REALTORS, 2011, RCLCO

WHAT DOES THE SURVEY SAY?

PREFERENCES IN METRO AREAS WITHOUT RAIL TRANSIT

70%

Transit Preference Among Respondents in Metropolitan Areas with No Existing Rail Transit

50% 60% 30% 40% 0% 10% 20% 0% Low Mid High Low Mid High Low Mid High Low Mid High 18-34 35-54 55-69 70+ Single No Children 2+ No Children 2+ with Children

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Source: National Association of REALTORS, 2011, RCLCO

WHAT DOES THE SURVEY SAY?

PREFERENCES IN METRO AREAS WITH RAIL TRANSIT

70%

Transit Preference Among Respondents in Metropolitan Areas with Existing Rail Transit

50% 60% 30% 40% 0% 10% 20% 0% Low Mid High Low Mid High Low Mid High Low Mid High 18-34 35-54 55-69 70+ Single No Children 2+ No Children 2+ with Children

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Source: National Association of REALTORS, 2011, RCLCO

What about Jobs?

RCLCO

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SALT LAKE CITY/OGDEN JOB CREATION

WITHIN 0.5 MILE OF TRAX STATIONS

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Source: RCLCO, Metropolitan Research Center, University of Utah

SHIFT SHARE ANALYSIS: SALT LAKE/OGDEN CBSA

TOD CAPTURED MORE THAN 20% OF TOTAL JOB GROWTH

1,362 344

• 15

1 168

• 3500
• 2500
• 1500
• 500

500 1500 2500 3500 4500 5500 6500

Utilities Construction Manufacturing Manufacturing

• 1,168
• 3,079

2,433 158 112 Manufacturing Wholesale Trade Retail Trade Retail Trade Total TOD Employment Growth 04 to 10 Share of LRT EMP to CBSA Performance (NS) SHARE of LRT EMP to CBSA Industry Performance (IM)

• 622

731 3,135 Transportation and Warehousing Transportation and Warehousing Information Finance and Insurance Real Estate and Rental and Leasing TOD/"Local Advantage" Shift of Employment (RS) 130 1,147

• 32

1,910 5 027 Real Estate and Rental and Leasing Professional, Scientific, and Technical Services Management of Companies and Enterprises Admin, Support, Waste Mngmnt & Remed Services Educational Services 5,027 6,276 1,141 1,212

• 408

Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation and Food Services Other Services (except Public Administration) Oth RCLCO

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1,884 Other

Source: RCLCO, Metropolitan Research Center, University of Utah

IMPLICATIONS AND QUESTIONS 1.Are we undercounting the overall demand for transit-oriented environs? 2.What are our regional transportation network i l ? A th ffi i t? expansion plans? Are they sufficient? 3 What are the neighborhoods areas and regions 3.What are the neighborhoods, areas, and regions that make the most sense for additional transit service? 4.Are transit opponents the majority, or just a very ?

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vocal minority?

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DENSIFICATION ALREADY UNDERWAY

THE REGION IS REORIENTING ITS GROWTH PATTERNS

Ab t 20% f th About 20% of the region’s household

growth between 2005

and 2015 is currently and 2015 is currently taking place within

walkable, urban, transit-oriented transit oriented areas.

The growth of Gen Y, increased demand for

Transit-Oriented Development, and p

demand for

sophisticated urbanity in part

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y

driving this trend.

Source: MWCOG Regional Activity Centers, RCLCO

GEN Y DRIVING THE FUTURE OF REAL ESTATE

RE-URBANIZING AMERICA THROUGH RECOVERY

RCLCO Consumer Research shows:  77% of Generation Y plan to live in an Urban Core, and is re-urbanizing America year over year  This is where the future of growth is – capturing Gen Y will be critical to economic vitality through 2050 4,000,000 4,100,000 4,200,000 3,700,000 3,800,000 3,900,000 3 400 000 3,500,000 3,600,000 , , 3,400,000 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2

Number of 22 Year Olds Same 22 Year Olds Turn 25

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NOTE: Number of 22-year olds is based upon birth rate and does not factor in death rates and migration. SOURCE: U.S. Centers for Disease Control and Prevention

CORE TO ADD NEARLY 150,000 HHS BY 2030 HH GROWTH DRIVEN BY GEN Y, MILLENIALS

Th D C i ’ hi t i l F d Y h h ld d The D.C. region’s historical Favored Quarter has emanated due west. Growth in the post 1960s period followed thi t j t Younger households and new economy employment is redrawing the investment map. G X d G Y d i i d d f this trajectory. Boomers and retirees may continue to favor the westward trajectory of historical th Gen X and Gen Y are driving demand for urban locations. Bulk of household growth through 2030 d i b 18 34 ld h h ld

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growth. driven by 18-34 year old households.

DC/MD/VA METRO AREA

MORE DEMAND FOR TOD THAN SUPPLY

72,368 45 660 52,616 68,635 124,984 22,975

Prince George's Virginia

48,432 45,660 81,378 32,946

Montgomery

169,901 472,570 302,669

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 DC 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 HH within 0.5 miles of Metro Expected (23%) preference for transit Deficit of HH in proximity to Metro

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SOURCE: RCLCO

Implications for Development in Washington, D.C.

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CONSIDERATIONS

The questions that the Capitol Riverfront BID have asked are even i t t i th b more important given the above background They raise questions of: y q Regional (and global)

competitiveness

Economic sustainability

fi l h lth

District fiscal health Public return on

i t t

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investment

The Green Line - Redrawing the Investment Map

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FOCUS ON THE FACTS

A CHANGING REALITY

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D.C. – ONCE AGAIN A DESTINATION OF CHOICE

18-34 YEAR OLD HOUSEHOLD PREFER A D.C. ADDRESS

• 10,568
• 10,082

Prince George's County

Washington, D.C. has re-emerged as a regional and national destination for young, affluent, professional households.

5 824

• 12,453
• 800
• 3,248

Fairfax County Montgomery County

It’s population resurgence has manifested in a percentage growth in 2010 that was the

highest in the nation.

1,557

• 5,824
• 76

Alexandria City

g

While D.C. recaptured the mantle as the region’s growth market, the Green Line station areas repositioned themselves as

2,796 11,177 6,900 Arlington County

p destinations of choice.

225 ,

• 20,000
• 10,000

10,000 20,000 District of Columbia 2000 - 2010 1990 - 2000

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THESE HOUSEHOLDS ARE CHOOSING THE GREEN LINE OVER ALL OTHER OPTIONS

1990-2000 2000-2010

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THE GREEN LINE CORRIDOR LEADING THE WAY

SETTING THE BAR FOR URBAN AND TOD DEVELOPMENT

Over the past ten years,

multifamily units added near Green Line Corridor Green Line Corridor station areas outpaced

Northwest D.C. Red Line station areas areas. Over the next 20 years, the Green

Line Corridor study area Line Corridor study area

may see market-driven demand for

8,100 housing units, 4.35 million SF of office and million SF of office and

approximately 400,000 SF of retail.

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Unveiling the New Green Line Householder

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THE NEW GREEN LINE HOUSEHOLDER

HIGH INCOMES, HIGH STANDARDS

New households moving into Green Line station areas ma have incomes that are areas may have incomes that are

twice as high as existing data suggests prevails in these submarkets.

Restaurants and retailers that can locate proximate to this spending power and household growth concentration may have the household growth concentration may have the advantage of harnessing an underserved

high-income market.

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THE NEW 100% LOCATION?

SOME GREEN LINE STATIONS SET TOP-OF-MARKET PRICES

By 2010, the for-sale multifamily pricing at certain Green Line stations caught up to and even eclipsed pricing in the Line stations caught up to and even eclipsed pricing in the

top of market, high-priced Dupont Circle neighborhood.

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The Green Line as an Employment Destination

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JOBS - THE GREEN LINE EFFECT

THE GREEN LINE – A MAGNET FOR HIGH-WAGE JOBS

Of the 24,600 net new jobs added to the District of Columbia between 2004 and 2010, 11,200 of them were added within a

t il f th quarter mile of the Green Line station

areas. areas. That represents 46% of

the city’s total the city’s total employment growth

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growth.

JOBS - THE GREEN LINE EFFECT

THE GREEN LINE – A MAGNET FOR HIGH-WAGE JOBS

Real Estate, Legal, Architecture,

` `

Engineering, Management, and Scientific/Technical Scientific/Technical

jobs all gravitated to the station areas under investigation in

far in

`

numbers that were far in

excess of their capture in

either NW D.C. Red Line station areas in D.C., Orange Line station areas in D.C., or the R-B corridor in Virginia.

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JOBS – THE GREEN LINE EFFECT

THE GREEN LINE – A MAGNET FOR HIGH-WAGE JOBS

The above findings suggests in clear terms that the Green Line station areas, are in fact the most competitive locations in the areas, are in fact the most competitive locations in the

District for high wage employment growth. They

are the places where professional employment – private sector professional l l d where employers should employment – wants to locate, and where employers should

be looking for locations to meet this demand.

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THE FUTURE OF GREEN LINE REAL ESTATE

PROJECTIONS OF FUTURE DEVELOPMENT ACTIVITY

Over the next twenty years in the Green Line Corridor, RCLCO forecasts market-driven demand for: demand for:

• 8,100 housing units (20%)
• 4.35M square feet of office space

(21%), and approximately

• 400 000 square feet of retail (22%)

400,000 square feet of retail (22%) As well as

• 550 construction jobs
• $2 32 billion in tax revenue and

$2.32 billion in tax revenue, and

• 19,000 permanent jobs

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THE FUTURE OF CAPITOL RIVERFRONT BID

PROJECTIONS OF FUTURE DEVELOPMENT ACTIVITY

Over the next twenty years in the Capitol Riverfront BID, RCLCO forecasts market- driven demand for: driven demand for:

• 6,000 housing units
• 5 3M square feet of office
• 5.3M square feet of office

space, and approximately

• 287,000 square feet of

retail As well as…

• 21,000 permanent jobs
• $2 28 B fiscal impact

$2.28 B fiscal impact

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SUMMARY

PERCEPTIONS VERSUS CHANGING REALITIES

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IMPLICATIONS

HARNESSING THE POTENTIAL IMPACT OF THE GREEN LINE

The Green Line Corridor and the entirety of the Capitol Riverfront are poised to add

billions of dollars in tax revenue to the District while adding thousands

• f jobs and housing units over the next two decades
• f jobs and housing units over the next two decades.

The public sector paved the way 20 years ago, and the private sector has

responded in a major way responded in a major way.

We are at the beginning of the next 30 years of continued strong

investment along the Green Line Corridor investment along the Green Line Corridor

The Green Line Corridor has already cemented its role as a

destination of choice for employers and their employees.

The Green Line Corridor plays a significant role in the future of the regional economy,

the future is now

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and the future is now.

Greenprint of Growth

Summary of Findings

Shyam Kannan, Principal and PSG Director, RCLCO skannan@rclco.com

DOT-HUD-EPA Partnership for Sustainable Communities| February 22, 2012