Basic, Time, Free

Episode Summary

• Amazon is looking at increasing square footage near urban centers. This aligns with last-mile infrastructure strategies and continues to challenge local zoning in new ways.
• We do have a parking problem but it's a parking problem for bikes. Bike sales continue to grow but there is no significant investment into bike parking in the United States.
• Affordable housing is a supply and demand issue. California is taking a two-pronged approach with legislation and housing quotas in municipal master plans in an attempt to increase supply. This regulation, unfortunately, complicates the process for small developers.

Links To Sources

Amazon Basics coming to a mall near you? (paywall possible, 2 articles, 3 min reads)

A follow up to last week: Where will we park our bikes (5 min read)

California implementing patterns of development via series of state legislation ( 7 min read)

34 urban planning and architecture classics, for free.

Beyond The Episode

Transcript

Hey. What's up everybody it's Kyle. Where, on this podcast, I share and discuss the urban planning, architecture, and real estate development patterns. My hope is that I share something, and you have ammo for that next meeting, another arrow in that metaphorical quiver so that you can make your case for better places and spaces.

We wouldn't be a very good urban planning podcast if we didn't tell you that the US Government is planning on investing $1.2 Trillion dollars into infrastructure.

Of course that's a lot of money.

Top highlights:

• Roads and Bridges
• Public transit
• Amtrak
• Broadband internet
• Electric grid
• Clean drinking water $50b
• Environmental clean-up around the Great Lakes got $50b...as a resident of the Great Lakes state...sweet.

Biggest challenge?

• Infrastructure costs in our country. And the strategy used by most opponents to projects, "Time is money, money is power, power is delaying projects".

Eyes will likely turn to Pete Buttigieg. Presidential hopeful. McKinsey Alum. Stars in his eyes.  A big opportunity here...

So that's the hot gossip. Let's talk patterns:

I've talked about e-commerce and if/how e-commerce businesses will change our urban fabric. Specifically talking about last-mile infrastructure and zoning. I wanted to revisit this theme. And talk about the big dog, Amazon. It's been well documented that they intend to move into brick and mortar.

They've had their bookstores. They bought whole foods. They continue to build their strategy around opening large retail locations. At face value, it seems strange to consider that all those vacant sears stores will become Amazons. But this is all related. Amazon needs the warehouse space and they need it closer to their customers aka in the suburbs. And what's in suburbs? Malls. These malls can give them a place to build temples to their brand (think apple stores), and essentially sneak in through the backdoor of zoning to get their warehouse space and save costs on shipping.

This gives Amazon the opportunity to sell their brand, Amazon Basic along with other private labels and compete in a similar way with Walmart.

According to the article by Sebastian Herrera, Esther Fund, and Suzanne Kapner, "Amazon executives have felt that bricks-and-mortar stores would enable better engagement with customers and provide a showcase for its devices and other products to shoppers who otherwise might not have tried them, a person familiar with the matter said. The company has sought to innovate in bricks and mortar while building a network of stores that could glean insightful customer data and provide new shopping experiences."

Another follow-up, let's spend some more time on how and where we can park our bikes. I love this article from Streetsblog. The article specifically talks about the investment from Plan Velo which includes 70,000 bike parking spots.

So we know e-bike sales are double that of electric cars. We also know traditional bikes...regular bikes...sales are still going up. Since April 2020, bike sales are up 57%, an estimated $6.5b according to npd.com. It's also estimated that for the space of storing 1 car, you could store somewhere between 10-20 bicycles.

We've got a parking shortage in the United States for bikes. I rode my bike to a football game recently. Best hack ever. Because all the systems in place are to control parking cars far away. Or you need to have some special credentials. So I got VIP parking, got to ride upright to the stadium gate. And guess what...no bike rack! I made it work. But you get the point.

You don't build the infrastructure when someone needs it, you need to build it so that people can use it. We've talked about this with pedestrian crosswalks. You build crosswalks so people might decide to walk. If you don't build the crosswalks, people won't walk.

The infrastructure world is looking differently than the business world. In the business world it's bad advice to "build it, they will come." Because in the business world you need to make sure you have a paying customer. The infrastructure world seems to have the paradigm, "build it, so people can use it."

More thought is required there.

Last thing this week, California's multi-pronged approach to accelerate housing construction in their state. The article from Full Stake Economics by Timothy Lee does a good job illustrating the action lawmakers and regulators can take to help focus on solving the supply and demand problem.

Mr. Lee interviewed Laura Foote who is quoted saying, "There are two parallel theories of how we're going to get the housing we need. One approach is to set statewide minimum zoning standards. An example of this approach is SB 9, which legalizes the construction of duplexes across the state. Governor Newsom signed it last week."

“The other theory is we'll set goals and local jurisdictions have to meet their goals. Under this approach, known as Regional Housing Needs Allocation, the state requires each city to plan for a minimum number of new housing units each year. Cities that don’t do their part face a range of sanctions, from fines to loss of authority over their local planning process."

So the first problem is that it's illegal to build structures that provide density (missing middle housing) ...the 2nd is that even if the state passes rules making these structures allowed, there are influential (loud) people in communities that seek to block these changes from happening in their neighborhood. Remember, "Time is money, money is power, power is delaying projects".

So developers go elsewhere but then the effect dominos (the city down the road blocked this extra housing, we can too..). And that's where the state requirements for housing come into play. In extreme cases, developers can go around local planning and appeal at the state level.

This...is complicated. This is why only big developers do projects. The timeline is so extended and if you're going to do 2 units and go through all this pain you might as well do a 5:1 and get as many units built as possible.

Let's end with some free stuff. If you're interested in reading some classic but previously out-of-print architecture and urban study books, MIT Press Open Architecture and Urban Studies have 34 books available for free. Pretty cool. Check out the show notes for that link.

This leads to the key patterns:

• Amazon is looking at increasing square footage near urban centers. This aligns with last-mile infrastructure strategies and continues to challenge local zoning in new ways.
• We do have a parking problem but it's a parking problem for bikes. Bike sales continue to grow but there is no significant investment into bike parking in the United States.
• Affordable housing is a supply and demand issue. California is taking a two-pronged approach with legislation and housing quotas in municipal master plans in an attempt to increase supply.

Talk to y'all soon.