Reading Chris Nelson's book Reshaping Metropolitan America.  Today the US has 31MM Single person households and 82MM households without kids.  In 2030 these numbers are projected to be 45MM and 105MM respectively.  Nelson describes the epic miss-match between the configuration, location and tenure of the existing US housing stock and the current demand.  He lays out good arguments for why he thinks 75% of new housing delivered between now and 2030 need to be rental.

Take the low side of his numbers for the annual production of housing units for 2015-2020 at 1MM to 1.8MM units, at say, a million units.  Seventy Five percent of that is demand for 750,000 rental units a year, with well over half of those households looking to live in walkable urbanism.

In addition to the huge unmet market demand for rental apartments consider that most of the folks delivering rental unit to that market understand how to build unfortunate garden apartment complexes, mid-ride podium buildings, or TYPE I towers.  They are not going to be able to build scattered site 2 and 3 story walk up buildings or modest mixed use, or single story workspace in an urban context.  This is why I am so emphatic about not wasting the time of people who understand urbanism on building detached houses for sale and condos for sale.

With the huge market demand Nelson and others are describing, we can rent as many apartments as we can build over the next 15 years, so I think that sorting out how to deliver those apartments in building types and neighborhood patterns that reinforce walkable urbanism is the challenge for the next 5-10 years.

As the national homeownership rate shifts down from the pre-crash high of 70%, there will still be lots of opportunities for people to buy a house if they want to, but there will be less and less good reasons for them to do so.

For sale housing requires a serious enterprise to deliver something like a 10-12% margin. You need to close 30-40 houses a year minimum to justify the overhead needed to control your costs, make sure your quality is right, deliver houses on time, and take care of any warranty issues. It is hard to keep outside realtors in line and have a full time superintendent on less than 30 closes a year. Also, you are at the mercy of the local appraisers who may not have a clue what a well located, well-built house in an urban neighborhood is worth, and if the appraiser says the house is worth less than you want to sell it for the buyer has to come up with a larger down payment, and you could lose the sale. If you are well organized enough to sell houses to buyers with crazy expectations, you could be building apartments and mixed use buildings with more flexible delivery deadlines and get a much better return on the brain damage of running a building enterprise.

 I lifted the text below from an email I sent to somebody thinking about becoming a developer out of frustration with what the local conventional developers had done to her town.

 I have had a number of conversation with people looking for ways to get developers to do things differently.  My response is usually along the lines of don't tell them, show them.  I end up sending emails like the one below connecting folks with resources, etc.  I figured I may as well put this one up as a FaceBook Note.

I can send you the PDF's and links and other materials that have been circulating among the growing ranks of rookie small developer/builders.  If you have an interest in pursuing this sort of enterprise, I encourage you to have a look at what the folks at Strong Towns are working on.  www.strongtowns.org  Chuck Marohn and Jim Kumon are serious about assembling content to help people become developers in their local communities.  Most of what is up on the Strong Towns web site to date has to do with public sector decision making, but they have identified the need to cultivate new developers as a priority at their recent national meet up.

Here is a link to a podcast I did with Chuck last Spring:

http://www.strongtowns.org/journal/2014/7/3/podcast-show-180-john-anderson.html

Also, there will be a lot of developer content available as past of next April's meeting of the Congress for New Urbanism in Dallas.  The CNU is my core network.  I would be happy to introduce you around to other people on the rookie developer track.

http://www.cnu.org/cnu23

There are also several videos from the last two gatherings up on You Tube:

http://www.youtube.com/user/Congress4NewUrbanism

The content presented in the CNU plenary sessions and the breakouts is good stuff, but I sincerely believe the greatest benefit of attending CNU is getting that collection of capable troublemakers in the same place at the same time.

The Chris Nelson's paper for ULI on California's changing demographics and markets can be found here: http://uli.org/report/the-new-california-dream/

Recapping our conversation,  You asked are there better forms of community engagement that would benefit conventional developers?  Technically yes, but it's like a chess puzzle where white can win in 5 moves and there is no defense possible by black.  You just need to find the five moves.  Because of the habits they find safe and familiar, conventional developers of single use sprawl are not going to be able to find the 5 moves that are right in front of them if they use both hands and a flashlight.  Here's what I think they might do:

• Change the product, build mixed use, press for better transportation options, build dignified apartment buildings instead of apartment complexes that are dependant upon individuals having cars.

• Recognize the under-served market in one and two person households.  If you can deliver apartments that appeal to single professional women, other market segments will come along. Recognize the big demographic changes that will play out in the next 15 years.

(See Arthur Nelson's excellent book on this topic) ----http://islandpress.org/reshaping-metropolitan-america

• Shift the scale of your projects to something that fits in the context of the neighborhood. 16-24 units at a time vs. 150 units.

• Build civilization, food & drink, groceries, services, and civic activity in the neighborhood as an amenity for your residents, instead of a pool and clubhouse nobody uses.

• Align your interests and the neighbors interests in a clean and safe stable place Engage you neighbors in any development project by working together to "make more pie"  You will need their genuine trust and their help if you want to convince the elected officials and to fix the public infrastructure -the overly wide streets.

I don't want to discourage you, but most developers have been shaped by the habits of building sprawl to a point where they can't understand how to build walkable urbanism, how to build more incrementally, or how to work with neighbors and local advocates. Issues of scale really affect work in existing neighborhoods.

It is time to develop an entirely parallel system of small developer/builders.  Maybe the old school local developers in your town can recognize the new opportunities and constraints, but it is more likely that they will keep doing what they have always done.  Telling them all about a different way to build is an awful lot like showing a card trick to a golden retriever.  (they appear quite attentive, but they really don't get it).  There will be a very low return on brain damage you will need to invest trying to convince or reform their methods and culture.  Better to cultivate a new generation of local developer/builders.

I think that the best public engagement practices cannot coerce reluctant developers to do excellent work under duress.  If you want excellent building/rebuilding at a fine grain, that fits into the neighborhood, the developer's heart really needs to be in it.  I really think you need new blood in the local development scene.  Finding ways for the old school developers to do the wrong stuff more efficiently through new forms of public engagement is a waste of calories in my view.  You could end up making the situation worse by raising the hopes and expectations of local residents and advocates and then disappointing them when the developers deliver a slightly different version of the same old crap.

So I recommend changing the goal, not just the tools available to people headed in the wrong direction.

For the best methodology I am aware of on public engagement I recommend that you check out the National Charrette Institute.  They offer scholarships for the training from time to time.  I recommend it without reservation.

http://www.charretteinstitute.org/

The principles of the CNU Charter ---http://www.cnu.org/charter   and the process of running proper charrette are at the core how our firm works in design and development.  I think they should be at the core of training a new cadre of developers.

Call or email if you need to follow up on your current paper.  For a capstone project for your Masters degree, I would recommend a business plan for launching a small development enterprise in your home town.  You clearly care a lot about the place.  Do you think a couple of new developers could make a difference there?

On a recent trip to Lafayette, Louisiana I gave a talk about the town's opportunities for smaller scale, incremental development.  In those great conversations that come after the Powerpoint I kept hearing multiple versions of the same question:

"Why aren't regular developers doing these small incremental projects you are talking about?"

This is sort of a variation of if you're so smart, how come you're not rich? (which is a good question.)

"If this is a real market opportunity, where are the "real developers"?

An Analogy:

I think that developers evolved into their current approach with the opportunities presented by post-WWII sprawl.  They found specialties, and focused upon building only one or two things and directed all their attention and energy into delivering one or two specialized products at scale.  Detached houses, Garden apartments, office parks, shopping centers, industrial parks, mini-storage, etc.  With scale and specialization came economies of scale and specialized network of the resources you need to get the job done. With scale came consolidations, the big office developers, the big retail/mall and shopping center developer, the big multifamily developer aligned with capital sources that needed financial conduits of specialized debt products; first with banks and Savings and Loans, later following the S&L meltdown and new banking regulation they settled in with pension funds and insurance companies.

They became dinosaurs that each needed tons of biomass every day to survive.  They were fueled with cheap capital and needed a habitat to range in typically made up of large scale projects.

They cannot recognize the habitat of the small infill or incremental developer/builder as anything even remotely viable for them.

They also cannot survive on what a small developer eats.  A dinosaur needs tons of biomass every day to survive, thrive, and reproduce.  A squirrel can get by on a dozen acorns a day, and can get by in a much smaller, scruffier habitat.

The Idea:

As we cultivate and mentor small developer/builders I think we should establish a common narrative.  Small developer/builders are a very different breed from the guys who build Walgreens and apartment complexes out on the highway.  They are delivering the next thing and the investors and municipalities that back their play are forward thinking insightful folk.  A small developer in Fayetteville would benefit from local reporting/replaying the story of plucky small developer/builder/architect Bruce Tollar in Ocean Springs, and vice versa.  Local folks should see their local small developer/builders as part of a larger growing trend, not as some sort of weird local  eccentric.