Structural Adaptivity Facilitation Examples - Part III

Here are my last three Facilitation Examples, proposed activities by planners and others to influence the development of the built environment toward structural adaptivity and resilience as we progress into an ever more uncertain and unpredictable future. 

Rethinking Homeownership.  Conventional owner-occupied land and buildings in the US many times tie the owners into long-term tenures.  It makes moves, to other locations, overly cumbersome even when such moves are in the occupants’ best interests.  Adaptivity requires the ability to make quicker changes than in the past, including the self-initiated movement of people and businesses to other locations when beneficial.  Alternative types of ownership or tenure must be facilitated, types which are more adaptable to quick change.

Traditionally, total fee simple or similar ownership of real property in our country has been an important value that has contributed to our stability and growth.  It has been an important way for families and others to build savings.  Mortgages have allowed early entry into the ownership-purchase process and allowed people to pay for other expenses or make other investments at the same time.  However, now times are changing.  Now we must be able to capture the value of our investments and move on much more quickly and easily. 

During the first half of the 20^th century, well more than 50% of our population lived in rental housing.  This does not necessarily mean they were frequently moving around but it did mean that they could.  It probably was the result of the difficulty of paying for or even getting a mortgage for the purchase of a single family home until a household could save up a lot of money.  Minimum down payment sizes were high.

However, after WWII there were a number of changes that encouraged people to purchase a home while their children were still young.  Government sponsored programs, for example, reduced the minimum down payment percentage and offered lower interest loans.  In addition, the rapid rate of inflation made housing investments an especially attractive method for people to build wealth.  Inflation was at least 5% or more for each year from 1941 through 1982 (and during one year it was 14%).  By 1959, the percent living in rental units decreased to about 45% and, by 2000, it decreased to less than 35%. 

Early in the 21^st century, however, it has started increasing.  Part of the cause no doubt has been the increasing number of people in their late middle ages or older and/or the lower birthrate and household size.  In addition, the inflation rate has been averaging less than 4% yearly since 1992.  Whether this trend will continue is difficult to predict.

Many alternative forms of ownership and/or occupancy rights exist.  Some include rental, lease, lease-with-purchase options, long-term leases (with any of a number of special provisions), cooperatives, condominiums, land contracts, life estates, various types of occupancy/use easements, and more.  Ownership may also be in the form of family trusts, community land trusts, other trusts, partnerships, limited partnerships, and corporations. 

Obviously many of these alternative forms of tenure might be difficult to understand.  However, as we progress more and more into a “service economy” the service industries should be able to translate any of a number of standardized ownership/lease/occupancy instruments into convenient and “friendly” products. 

It is the contention herein that the people (and businesses) in the U.S. should be able to choose their form of tenure without social, political, economic or other pressures placed on them.  Homeownership should no longer be automatically favored.  It dampens adaptivity to an unknown future.

Some of the factors to consider:

• ·         The federal government forgoes about $380 billion in income taxes every 5 years because of the homeowner mortgage-interest-payment-deduction (a subsidy for homeownership).
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• ·         Household characteristics were considerably different in the past (one earner households, many children) from what they might expect to be in the future (two earner households, few children; etc.).
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• ·         Homeownership is a good way to build household wealth only when annual inflation is high; the stock market increases wealth faster over the long term.
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• ·         There have been many housing bubbles and crashes in value; these have been quite harmful to many homeowners.
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• ·         Households in renter units tend to move/relocate at approximately five times the rate of households in owner occupied housing.
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• ·         Worldwide, homeownership is highest in the least urbanized nations and homeownership declines as nations get wealthier.
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• ·         Homeownership is frequently a good way to move into communities with the best local schools.
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• ·         Given the baby boom shortly after WWII, there are now large numbers of homeowners of ages where they are inclined to move out of their homes and seek housing tenures in retirement communities.

In considering their desired type of tenure, people should keep in mind that as the unknown changes of the future materialize and as these lead to the wisdom of moving in many situations, we will certainly regret if the nation continued to promote homeownership and other ties to properties, neighborhoods and urban areas.  Such moves could be to avoid worsening threats to their welfare - or they could be to adapt to new technologies and life opportunities in other locations.

Land Banks/Trusts.  Land banks and land trusts are fundamental to being ready for an unknown future.  They should be focused on saving undeveloped land in the best locations for a variety of the most important adaptivity needs.  The needs for such entities are closely related to the applications and benefits described in the sections regarding infill development and open space.

While the private marketplace is the primary mechanism for developing an adaptive manmade environment, there is also a crucial need to intervene sometimes in the development process with planning and strategic action to identify and hold particular properties and lands for priority attention as relate to structural adaptivity and resilience.  These include:

1.     

small or moderately small sites and properties where certain urban infill actions should be delayed for future developments/uses that we already visualize as probable alternative future essentials (e.g. more climate-change mitigation open spaces, alternative energy production/capture facilities, etc.)

2.     

larger sites and properties in the path of development where certain uses or developments are especially important to fostering growth in adaptive patterns (e.g. corridors of open space, sites/properties especially important to localization, etc.); and

3.     

larger sites and properties well removed from the path of development where less predictable long-term future developments may be highly desirable (e.g. new cities, spaceports, giant wind farms, etc.).

Fortunately, we already have several types of land bank/land trust entities that are established and operating for one or more public purposes and for which the public purposes could be expanded to specifically include holding land for the longer-term future.

The three major types of public, quasi-public or non-profit organizations already operative are:

• ·         Local/Regional Land Banks that were chiefly created by local government units to acquire, enhance, and re-circulate properties into the private property market as productive and sound buildings and uses for the local economy and tax base, and/or to help meet the needs for low and moderate income housing or similar current public needs.
• ·         Community Land Trusts established and operated by local non-profit organizations with high priority for long-term low and moderate income housing (often involving long term leases of properties to other organizations upon which housing can be built and provided at below market costs).
• ·         Conservation Land Trusts created and operated by larger, typically special purpose conservation non-profits for acquisition and management of lands for habitat protection, wildlife propagation, forest and woodland conservation, recreation, scenic enjoyment, cultural preservation and appreciation, and many similar purposes; and often times for combinations of such purposes.

Each of these types has certain advantages and certain limitations.  At present, the best approach for the purposes of structural adaptivity is to utilize several in combination.  Local land banks for example have compelling authority for the acquisition of properties but typically are not appropriate for long-term depositories of lands.  They are able, however, to dispose of properties to land trusts for appropriate longer-term public uses. 

Land trusts and banks also have important tools for their purposes that should be mentioned.  These include:

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trading properties with other agencies or even with private owners;

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acquiring only a part of the ownership rights to a property – e.g. the development rights – thus lowering the acquisition costs; and

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managing the properties to produce income over time – e.g. leasing/renting them out for agricultural production, for temporary uses such as festivals or fairs, of for short-term disaster relocation dwellings.

At present, we also have to set up mechanisms for coordination among the entities of the deferent types and, maybe even more problematic, among the many different authorities, public agencies, and non-profit agencies all presently operating in the land market.  These have many diverse and perhaps sometimes conflicting resolves. 

As the objectives of resilience and structural adaptivity become far more embedded in our governance institutions, hopefully legal structures will be created for a single type of entity to carry out the activities identified herein more simply and efficiently.  Nevertheless, there also still may be advantages in having both regional and local scale organizations operating in most all areas and in having some special purpose corporations. 

Land banks and similar organizations are authorized and set up under state statutes and laws.  Currently there is no standard enabling model and most all have different criteria.  This can be confusing.  This should be changed.

Land banks and land trusts will also need effective guidance and information from researchers and professionals in many aspects of their management, especially advice and guidance concerning future development needs and opportunities that have not yet fully materialized.  Futurists and risk management organizations and companies are the most capable to begin assuming such role.

Funding from foundations and other endowment (and grant) sources will be necessary.  Hopefully, before long, such sources will begin committing a certain percentage of their revenues to purely future investments of which land banks/trusts should be major beneficiaries.

Several obstacles will need to be faced.  One of these is the wording and intent of the state enabling legislation/statutes that focus only on short-term benefit.  Long-term benefit needs to be included as equally important.  Another one is possible apprehensions about the demand to make all properties in local taxing districts as tax-revenue-productive as possible.  For this and many other reasons, tax revenues need to be shared as broadly as possible.

Windfall Plans.  Many financing mechanisms will need to be considered for facilitating resilience and structural adaptivity.  There is at least one source of financing that should be directed toward these goals as soon as possible.  They are windfalls.  Likewise, I am urging that this source be guided by plans on how to use such funds.

When thinking long term, we can include possibilities of large supplies of funding that only become available every once in a while – as well as sources that can be utilized on a sustained basis.  We have the advantage of not needing to make large expenditures immediately.

The term windfall in meant to include all those unexpected situations where large revenues are received only occasionally.  There have been many and many more should be anticipated.

Examples include:

• ·         Large gifts, inheritances;
• ·         Local property tax revenues from multi-million/billion dollar developments;
• ·         Large spikes in local revenues from the shale boom and fracking;
• ·         Sales of local, state, or federal public property and/or leases;
• ·         Sale of air rights above public owned property or rights of way;
• ·         Settlements, fines, etc. of environmental harms caused by private companies, e.g. the 2010 Gulf of Mexico oil spill;
• ·         The 1998 giant multi-state tobacco companies’ settlement;
• ·         Settlements from the securities and banking crisis of 2008;
• ·         Recovery of local back taxes in dispute for many years;
• ·         Sale of local/state government enterprise functions (electric power, parking garages, liquor sales, etc.);
• ·         Large criminal fines/punitive damages;
• ·         Federal economic stimulus programs;
• ·         New or special local/state/national taxes or changes in the tax structures (casino taxes, omitting the homeowner mortgage interest payment deduction, inheritance taxes, marijuana taxes, etc.);
• ·         Crowdfunding (someday); and
• ·         Mineral extraction levies (severance taxes) and royalties, impact-fees, etc. and their additional opportunities.
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Many of these windfalls are directed for repayment of certain specific losses of the public but some are put into a public benefits fund or natural resource fund, or otherwise made available for unspecified uses.  However, once the windfalls become known, government agencies and politicians all try to get the funds diverted to their particular interests. 

It is the contention herein that the most fair and reasonable approach, instead, would be to place all or a share of them into a fund or repository for broad long-term-future benefit of the public welfare, for future generations. 

Expenditures from such fund or repository should then be made only periodically as the best uses for the long-term-future benefit become identified.  A process for doing this should include the presentation of Windfall Plans for specific uses and with explanation of the relationship of the uses to the long-term-future benefit.  The plans should not be prepared only at the last minute.  There should be a portfolio of plans already on file waiting for the funding to appear.

Moneys from windfall profits taxes/fees, to be established, should supplement these funds as needed.

It is suggested that public/private foundations take the lead in preparing Windfall Plans for the use of such funds and for the purposes of public education and exposure to the futurist perspective.

It is urged that the foundations set up highly gifted advisory councils of futures-oriented scientists, engineers, planners, and similar professionals to guide the plan preparers in the soundest possibilities of the future.  Guidance should include all the latest research on emergent trends and technology and the adaptivity and resilience based principles that best can be incorporated. 

This need, in itself, should be tied in to the general need for more/better futurist-based think tanks in many subject matters in many areas around the US.

The preparations of such Windfall Plans should begin as soon as possible, even before we know just how they will fit into such funding programs. 

The types of plans needed should be based on our expectations of the desires of the windfall sources, the types of plans that could best garner the support of other key people and organizations, and the types that would focus, in a straightforward manner, on the key trigger points vital to get certain things started.  For example, they should be related, if possible, to stimulating jobs, government revenues, demonstrations of feasibility for new ideas, protecting and increasing public health, or similar such goals. 

Additionally, they should focus on how to leverage private enterprise expenditures with only a modest amount of public/quasi-public expenditure.  Moreover, they should include a strong component of citizen participation carefully guided to be the most meaningful.

There will be a need for a nationwide clearinghouse to coordinate among the agencies interested, to share knowledge and ideas, to make the plans known to the public and to begin and lead a process of public review and prioritization.

Based on the perspectives and writings in these papers on structural adaptivity, following are some suggestions for Windfall Plans that should be considered:

• ·         Evac roads, highways or corridors for the most vulnerable urban areas
• ·         Three or four spaceports (or robot centers) in strategic locations around the country
• ·         Modular water storage facilities and rainwater collection in areas with shortages
• ·         Food production sites and structures in/around urban areas
• ·         Experimental/demonstration-oriented alternative energy production facilities

William Schnaufer