Room for Urban Growth: A Study on Developable Vacant Land in U.S. CBDs
One of the recurring features of a growing U.S. city is a tendency to greatly expand its footprint, a phenomenon popularly known as urban sprawl. Oddly enough, this centrifugal kind of mobility is not the result of a lack of developable land within a city’s existing perimeter. On the contrary, there is increased scrutiny and pressure to make the most of swaths of vacant land in the very heart of a city. Before city planners, developers and designers can outline a comprehensive urban development plan, a good starting point would be to assess the amount of developable parcels available within a particular city, especially in the downtown area.
COMMERCIALCafé conducted a three-part study on the subject of undeveloped land in 25 major U.S. central business districts. Using combined data sets from Property Shark, Yardi Matrix and several government sources, COMMERCIALCafé calculated the volume of urban infill, the number of development projects delivered in the past five years, as well as construction projects scheduled for delivery in the urban cores of these 25 cities. In a matching survey, 1,549 respondents living and/or working in these areas responded to questions about what they would like the land to be used for, as well as what kind of development they feel the CBD really needs.
Which U.S. CBDs Have the Most Undeveloped Land?
The numbers show that metros in the South, West and Southwest lead in terms of undeveloped land within their downtowns, with several major cities in Texas ranking high, while New York City rests somewhere in the middle of the list, with a moderate amount of undeveloped land left (approximately 16.49 acres). If we examine the top positions, Dallas and Las Vegas seem to have a sizeable amount of vacant land in their urban cores, 86.3 and 75 acres, respectively, while Tampa, Florida, is positioned at the other extreme, currently sporting only 6.29 acres in its CBD.
New York City still has 16.49 acres of vacant land in its downtown, despite the frenzied development in the area adding roughly 30 million square feet of property between 2013 and 2017. That number includes 14.3 million square feet of housing, 3.12 million square feet of office space and 3.1 million square feet of hotels. It’s worth noting that New York City still has more room in its CBD than cities like San Jose, California, Los Angeles, Washington, D.C. and Miami.
Outside of New York City, Dallas has seen the most construction activity in the last five years, with 8.5 million square feet of delivered projects, followed by Chicago, with roughly 7 million square feet, and Houston with 6.5 million square feet.
U.S. Cities Have Yet to Solve Their (Affordable) Housing Issues
Many downtowns provide plenty of development opportunities. To find out which projects could gather the most popular support, COMMERCIALCafé asked Americans in 25 major cities about what developments are necessary or desirable for their communities. As it turns out, there isn’t a significant difference between wants and needs, as most respondents think that housing is of paramount importance right now. At the national level, 72 percent of respondents voted for more housing and homeless shelters in their CBDs. When asked to consider the necessities of their community, the number of people making this choice went up to 83 percent.
These answers are driven by a serious shortage of affordable residential units. For instance, although construction companies in places like New York City are busy delivering much needed housing solutions, very few of the resulting New York City apartments end up being affordable. More than half of New York renters are rent-burdened, forking over 30 percent of their incomes to pay for rent and utilities, while one-third of them give up nearly half of their earnings for these purposes. Millennials currently bear the brunt of this unfriendly housing market, spending an average $93,000 on rent by the time they hit their 30s, roughly 45 percent of their income. Since few millennials can choose to become homeowners and future trends don’t seem to point to a decrease in rent costs, this issue is poised to have a lasting impact on this generation, as well as on the incoming Generation Z.
Los Angeles has seen 3.3 million square feet of housing added to its downtown inventory alone since 2013, with 6,200 residential units in the pipeline and 6,900 more planned projects waiting for city hall approval. Unfortunately, the city remains one of the areas with the “biggest single group of unsheltered people in any U.S. city.” Angelenos are aware of these problems, with 39 percent of respondents signaling the need for homeless shelters in the urban core, a priority second only to the need for more housing.
The predominant message of the survey answers is the need for a more sustainable and caring community, able to resolve issues that have an increasing social impact as more and more people cluster around superstar cities.
For more about the results of this survey and details about the methodology, read the full study on the COMMERCIALCafé blog.
Researcher by nature, curious by profession. With years of intense research on the U.S. commercial real estate market behind her, Diana is currently putting her experience to use by writing for the COMMERCIALCafé blog.
