Tuesday, October 21, 2014

Sustainability or Gentrification – every action has a reaction or in this case an unintended consequence.




Let’s start in the 1970’s as the benchmark of change altering family, faith and freedom of today.
Changing the landscape of our culture has taken decades so stopping the momentum or finding alternatives will not easy. Let’s briefly review the ‘70’s:

Live: we started to live further out from urban cores; “nice but not necessary” not practiced; today, vertical mixed use developments are the modern small town America located outside of urban cores.

Work: Mom’s and Dad’s started to both work; today over 50% of mothers and over 50% single parents with preschool children are employed outside the home; hand held calculators in the 70’s to iPads now

Shop: Walmart went national in the 70’s; from the JC Penny catalog and wood floors at Woolworths to internet shopping

Play: HBO was founded in 1972 and ESPN in 1979. Today, technology overload. Eyes clued to a screen rather than play outside.

Learn: Probably 85% of high school students in the ‘70’s were studying for college as the next step. College was affordable and students were taught that you would not be successful if you didn’t go to college. Student loans are in the trillions and recent graduates can’t find a job.

Energy: In the ‘70’s, we had cheap gas but long lines from the lack of supply. Gas was
36 cents per gallon before the 1973 oil crisis and jumped to $1.25 per gallon by the end of the ‘70’s. Today, gas has been over $3.00 per gallon for over 4-years. The oil crisis in the ‘70’s brought energy conservation, solar and energy related building codes. Not much different now with the same results.

Transportation: V8 to V6 and now electric cars or cars that will drive you. Mass transit. Bicyclists must wear a helmet. 



Over the past year, I have been thinking “out of the box” to forecast how the real estate development industry may change once the economy is back on track. You may think housing is back on track as the engine of our economy. I believe we are far from that notion.

1. Local governments will be more diligent in directing development patterns utilizing existing infrastructure facilities i.e. roads, water and sewer.

2. It is only time before the federal government uses incentives for local governments to force the redevelopment or “urban renewal” of existing urban core areas.

3. Vertical mixed use projects will become the norm rather than the exception. If transportation and energy components are included in the plan, the project will receive density credits.

4. Sustainable projects will have to meet certain standards before moving forward through the regulatory process.

5. Local government will use eminent domain more as a development tool by directing the private sector to predisposed land uses. Partnering between developers and local government may be the next stakeholder alliance.

6. Public facilities and services will be limited to urban core areas. Government expanding services or facilities beyond an urban limit will not be common practice.

This is only a short list of thoughts but the result of the above actions may cause urban gentrification. Instead of suburban flight of homebuyers with long commutes, we may experience urban revitalization with families moving closer to employment centers.

Gentrification is the sociocultural change of an area resulting from people moving back into urban core areas and buying houses in less prosperous areas. Obviously this will displace homeowners and renters from the area due to rising housing costs and rents due to re-development, urban renewal or urban revitalization efforts supported by local government.

Long time residents will be forced to move due to increased property values and real estate taxes. Lower income residents in these areas will be forced to sell and move to a more affordable community where ever that may be. As the influx of middle and upper income wage earners move into neighborhoods experiencing transformation, the gentrification of the community occurs.

$5.00 per gallon of gas and federal programs will alter local government’s approval of future development patterns. The result, jobs may have to go to where the workers are located rather than the workers moving to where the jobs are located. Job generators will relocate to suburban areas. The result will make small towns and communities the back-bone of our culture - again.
 
“Sustainability” is a reasonable goal but almost impossible for a real estate project to meet.
 
The last four Presidents have all supported the conclusions and initiatives outlined at The United Nations Conference on Environment and Development (UNCED), also called the Earth Summit, which took place in Rio de Janeiro, Brazil, in June 1992.  

I have highlighted certain points of interest.


President George H. W.  Bush 
The President's News Conference in Rio de Janeiro June 13, 1992The President. “Well, let me first express my thanks and congratulations to President Collor and the Brazilian people and to all responsible for this Conference for their hospitality, for their tremendous success in hosting the Earth summit.
It's obvious to all who came to Rio that the Brazilians made a special effort to accommodate so many heads of states and delegates and journalists and visitors. They managed it flawlessly, and they managed it with grace and good humor. We've had a very successful visit.We've signed a climate convention. We've asked others to join us in presenting action plans for the implementation of the climate convention.We've won agreement on forest principles. We found a warm reception among the G - 7 and many developing countries to our Forests for the Future initiative.Many U.S. proposals on oceans and public participation on the importance of economic of economic instruments and free markets were included in this mammoth Agenda 21 document and the Rio Declaration.”

President William J. Clinton

Introduction
The President's Council on Sustainable Development (PCSD) was established by President Clinton in June 1993 to advise him on sustainable development and develop "bold, new approaches to achieve our economic, environmental, and equity goals."

"In the United States, the PCSD was conceived to formulate recommendations for the implementation of Agenda 21" 
Formally established by Executive Order #12852, the PCSD was administered as a federal advisory committee under the Federal Advisory Committee Act.

I The President's Council on Sustainable Development states that -

"In April 1997, President Clinton asked the council to advise him on: next steps in building a new environmental management system for the 21st century... and policies that foster U.S. leadership on sustainable development internationally. The council was also charged to ensure that social equity issues are fully integrated..."
” government using the guidelines outlined in Agenda 21.
 President George W. Bush

 "Sustainable" means to create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations of Americans...

President George W. Bush
January 24, 2007
(Executive Order #13423)

Section 2 of the E.O. directs Federal agencies to implement sustainable practices for:

Energy efficiency and reductions in greenhouse gas emissions.

Use of renewable energy.

Reduction in water consumption intensity.

Acquisition of green products and services.

Pollution prevention, including reduction or elimination of the use of toxic and hazardous chemicals and materials.

Cost-effective waste prevention and recycling programs.

Increased diversion of solid waste.

Sustainable design/high performance buildings.

Vehicle fleet management, including the use of alternative fuel vehicles and alternative fuels and the further reduction of petroleum consumption.

Electronics stewardship.

President Barack H. Obama

President Obama issued Executive Order #13575 on June 9, 2011.

This executive order established THE WHITE HOUSE RURAL COUNCIL and in part:

Executive Order

By the authority vested in me as President by the Constitution and the laws of the United States of America and in order to enhance Federal engagement with rural communities, it is hereby ordered as follows:

Section 1. Policy. 16% of the American population lives in rural counties. Strong, sustainable rural communities are essential to winning the future and ensuring American competitiveness in the years ahead.

These communities supply our food, fiber, and energy, safeguard our natural resources, and are essential in the development of science and innovation. Though rural communities face numerous challenges, they also present enormous economic potential.

The Federal Government has an important role to play in order to expand access to the capital necessary for economic growth, promote innovation, improve access to health care and education, and expand outdoor recreational activities on public lands.

To enhance the Federal Government's efforts to address the needs of rural America, this order establishes a council to better coordinate Federal programs and maximize the impact of Federal investment to promote economic prosperity and quality of life in our rural communities.

And in part: (d) identify and facilitate rural economic opportunities associated with energy development, outdoor recreation, and other conservation related activities.

What is Agenda 21?

“This largest-ever world meeting brought Heads of State and government officials together with international organizations and representatives of non-government organizations (NGOs) from around the world.

A 700 page global plan of action called Agenda 21 was produced as a result of the Earth Summit: it represents the consensus reached by 178 States on how we can secure our future.

Agenda 21 is like a blueprint for global partnership aiming at a high quality environment and a healthy economy for all peoples of the planet.

Agenda 21 addresses the critical issues we face as a global community: continuing damage to ecosystems, the worsening of poverty, hunger and ill health, increasing world population and illiteracy.

Agenda 21 is composed of 40 chapters that identify each challenge and propose simple realistic solutions towards sustainable development which is: meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Around the world, governments, businesses, non-governmental and other organizations are already putting the ideas from Agenda 21 to work. It is crucial to maintain the momentum of the Rio process and implement the agreements that were reached. This task will require not only the leadership and funding of governments and business, but also the vision, cooperation and work of every citizen. Sustainable development cannot be achieved without all sectors of society working together.”




Permission granted to use the illustration by:  International Council for Local Environmental Initiatives (ICLEI)

The Local Agenda 21 Planning Guide:
An Introduction to Sustainable Development Planning



ICLEI-funded city projects promote “sustainability.” They draw their inspiration from the Rio Earth Summit, the 1992 United Nations environment conference held in Brazil. Communities that adopt Agenda 21 projects get ICLEI’s help in creating “sustainability inventories” and they pass resolutions affirming that they will pursue the “three E’s” of sustainable development:

Environment
Economy
Equality

Their explanation of each of these categories is much different than our real estate development approach which is controlled at the local level within a fragmented industry.

In many respects, the above overview of Agenda 21 outlines reasonable and attainable goals. However, it is important to read the fine print! It is my intent to clearly illustrate how the UN, our federal regulations and federal funding have altered the lens in which real estate development is viewed. Is it reversible? I would say YES.

In fact, the basic notion of freedom is in our land and land ownership. If our vision of freedom is altered and Agenda 21 initiatives continue to be implemented our basic rights will forever be violated.

We must become aware of the Agenda 21 initiatives implemented at the LOCAL LEVEL ---- where the real estate development industry is directly affected and quickly changed!

Introduction
The President's Council on Sustainable Development (PCSD) was established by President Clinton in June 1993 to advise him on sustainable development and develop "bold, new approaches to achieve our economic, environmental, and equity goals." Formally established by Executive Order 12852, the PCSD was administered as a federal advisory committee under the Federal Advisory Committee Act.
Mission
The Mission of the PCSD was to:
  • Forge consensus on Policy by bringing together diverse interests to identify and develop innovative economic, environmental and social policies and strategies;
  • Demonstrate Implementation of policy that fosters sustainable development by working with diverse interests to identify and demonstrate implementation of sustainable development;
  • Get the word out about sustainable development; and
  • Evaluate and report on progress by recommending national, community, and enterprise level frameworks for tracking sustainable development.
National Goals
The following goals express the shared aspirations of the President's Council on Sustainable Development. They are truly interdependent and flow from the Council's understanding that it is essential to seek economic prosperity, environmental protection, and social equity together.
Goal 1: Health And The Environment
Ensure that every person enjoys the benefits of clean air, clean water, and a healthy environment at home, at work, and at play.
Goal 2: Economic Prosperity
Sustain a healthy U.S. economy that grows sufficiently to create meaningful jobs, reduce poverty, and provide the opportunity for a high quality of life for all in an increasingly competitive world.
Goal 3: Equity
Ensure that all Americans are afforded justice and have the opportunity to achieve economic, environmental, and social well-being.
Goal 4: Conservation Of Nature
Use, conserve, protect, and restore natural resources -- land, air, water, and
biodiversity (note – see map posted) -- in ways that help ensure long-term social, economic, and environmental benefits for ourselves and future generations.
Goal 5: Stewardship
Create a widely held ethic of stewardship that strongly encourages individuals, institutions, and corporations to take full responsibility for the economic, environmental, and social consequences of their actions.
Goal 6: Sustainable Communities
Encourage people to work together to create  healthy communities where natural and historic resources are preserved, jobs are available, sprawl is contained, neighborhoods are secure, education is lifelong, transportation and health care are accessible, and all citizens have opportunities to improve the quality of their lives.
Goal 7: Civic Engagement
Create full opportunity for citizens, businesses, and communities to participate in and influence the natural resource, environmental, and economic decisions that affect them.
Goal 8: Population
Move toward stabilization of U.S. population.
Goal 9: International Responsibility
Take a leadership role in the development and implementation of global sustainable development policies, standards of conduct, and trade and foreign policies that further the achievement of sustainability.
Goal 10: Education
Ensure that all Americans have equal access to education and lifelong learning opportunities that will prepare them for meaningful work, a high quality of life, and an understanding of the concepts involved in sustainable development.

CONCLUSION:
Fast forward 20-years from when The President's Council on Sustainable Development (PCSD) was established.
Has the real estate development industry been guided by regulations toward the goals created by the UN and followed by the last four Presidents? YES.

The problem is government’s momentum on implementing regulations design to save government jobs but destroy the real estate industry – among many other industries.
The EPA has not and will not stop implementing regulations that control industries because they have a mandate to follow. We have to stop the federal government’s momentum on many fronts and dial back regulations before there is no return. Repealing regulations is almost impossible to do but a true leader can accomplish it by downsizing the federal government.



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