Episode Summary

  1. Developers follow the money. Baby boomers have it and maybe they don't want to think "senior housing" they want to think "downtown apartment where my kids might visit me."
  2. Farmers markets are economic engines. It's estimated that in Pennsylvania each market does over a quarter mil in revenue each season.
  3. Favoring pedestrians and bike lanes does not negatively impact businesses.

Developers are targeting people with money, baby boomers (wsj paywall possible, 4 min read)

2021 study estimating farmer's markets economic impact (3 min read)

Another study demonstrating that bike lanes do not negatively impact businesses (30 page pdf). And a guy who doesn't get it. (6 min read)

Episode Transcript

Senior, Fresh, Lane

This is patterns of development.

Hey everyone. I’m Kyle Gulau and on this show, patterns of development, we take less than 10 minutes each week to deconstruct what's going on in real estate, architecture, and urban planing.

Developers...are a crafty bunch. Developers are starting to ask themselves who has all the money? And, for the first time ever, it's not the youngest generation. That's right for the first time ever in American history it's estimated that the younger generations with not be able to accumulate the wealth of their parents.

And developers are taking notice according to an article in the Wall Street Journal by Peter Grant.

Developers are betting that aging baby boomers will pay bigger rents in favor of urban housing that has extra amenities.

The article specifically references a joint venture between developer Related and Atria Senior living to build a 208 unit project with rents ranging between $8,000 - $25,000/month. Amenities for a proposed project in San Fransisco include multiple on site dining options (meal plan options), house keeping, concierge services, rooftop terrace that includes outdoor pool, garden and bocce courts.

So hold on. Before you think that's a lot of money for rent and those are extravagant amenities. Consider traditional senior assisted living. Housing, keeping, meals, a gym, onsite support staff. Expect they're in the suburbs, not downtown. When we think about it through that lense, essentially a rebrand of senior living, the rent and services start to make sense. According to senior living.org these rent rates are in line with some states national average.

What we have here is a developer that's wondering what if an older person with a lot of money doesn't want to live in the suburbs in an old folks home? Where might they live, what might that type of service look like in an apartment building in the city? Would this rebrand make it easy, more accessible, and comfortable for the family to visit? It's an assumption, but creative thinking for sure.

Next up a study published by Penn State University, and this is included because I love anything quantitative I can point to so say, see it's real, it's been measured.

The research was initiated at the end of 2020, when Penn State Extension (a program of PSU) received $10,000 from the Pennsylvania Department of Agriculture to support a data collection project during the 2021 market season. The project was aimed at creating a culture of data collection within markets and communicating the value of these businesses across Pennsylvania.

The group collected data from 50 markets and measured gross sales of about $18m from May-October 2021.

I'm going to quote the study now, "The researchers then extrapolated these sales figures to take into account the more than 330 open-air community farmers markets in the state. Their analysis indicated that these markets generated, conservatively, $100 million of direct economic activity over the six-month market season."

So, I'm a big numbers skeptic. Here's how they got to the $100m. And a podcast is the worst medium to talk numbers. Hang with me.

If 50 markets generated $18m. How much is that per market? 18m divided by 50 = 336k. So 336k per market multiplied by the estimated number of markets 330 = 118.8m. So when they say conservatively, they're taking off 18%. Either way, strong farmers market numbers in Pennsylvania. The study intends to keep collecting data in 2022. And I love the sentence, "culture of data collection."

Last up - removing on street parking in favor of pedestrian space and bike lanes does not negatively impact businesses in the area.

We've talked about this before and we'll continue to back up this pattern with some more data. A paper published in the Transport Review by Jamey Volker and Susan Handy review evidence of economic impacts on local businesses in bicycle and pedestrian project areas.

It's a 30 page pdf and points to the following conclusion, quoting the article now, "creating or improving active travel facilities generally has positive or non-significant economic impacts on retail and food service businesses abutting or within a short distance of the facilities, though bicycle facilities might have negative economic effects on auto-centric businesses."

There's a great example of this conversation playing out in Chicago where a local business owner claims the new bike lane in front of his business of 75 years is forcing him out of business. He does not understand causation with out correlation. He appears to have forgotten that there is a global health pandemic. Online reviews of his store also complain of horrible hours and an unorganized store where things are difficult to find.

Which leads us to our patterns of the week:

  1. Developers follow the money. Baby boomers have it and maybe they don't want to think "senior housing" they want to think "downtown apartment where my kids might visit me."
  2. Farmers markets are economic engines. It's estimated that in Pennsylvania each market does over a quarter mil in revenue each season.
  3. Favoring pedestrians and bike lanes does not negatively impact businesses.