Redesigning and Redeveloping the Inconvenient City: The Art, Business and Culture of Sustainable Urbanism

The future of urban development was the intended topic of the panel discussion “Redesigning and Redeveloping the Inconvenient City: The Art, Business, and Culture of Sustainable Urbanism,” held at the University of Miami Global Business Forum Jan. 15 – 16, 2009. But the current economic free-fall and its impact on real estate expanded the discussion considerably. As moderator Charles Bohl, director of the University of Miami’s Real Estate Development and Urbanism Program, pointed out in his opening remarks, “It’s hard to talk about ‘mixed use’ when there’s only enough money for one use. It’s also hard to talk about smart growth when there is no growth.

“Change,” he concluded, “is inevitable. All trends point towards a greater demand for more efficient, compact, urban places with a high quality of life — the types of walkable, mixed-use neighborhoods that have proven to be great places to live in and work in for generations — and making them solid long-term investments. The shift away from the unsustainable, low-density, single-use suburban paradigm and short-term investment cycles is now upon us, and a new paradigm combining livable community design, sustainable development and a long-term investment outlook is on the horizon.”

For panelist Stephen Owens, president of Swire Properties, the real estate development branch of the international Swire Group, the economy will remain the foremost change agent for the foreseeable future. The next two or three years will be extremely difficult for U.S. businesses, he predicted, but those that survive will emerge “very focused, and very efficient.” Noting that “I’ve survived more recessions” than his younger colleagues on the panel, Owen attributed his professional longevity, and that of his company, to an informed, cautious approach. As an example, he cited the rush to invest in China during the global real estate boom. The Swire Group held back, he said, largely because in China, “there is no system for enforcement of contract law.” It was an approach that served them well. “Very little profit was made by anyone in that time,” he said.

Owens viewed this type of old-fashioned, conservative thinking as an effective survival strategy in a turbulent economy. “Honesty with oneself,” he said, facilitates clear-headed evaluation of the market and its opportunities, leading to greater discipline in investing. (“We’ve not had much of that lately,” he noted.) Accountability, he said, is crucial. “Reputation and credibility, going forward, will be looked at quite differently,” he told the audience, explaining that developers will be expected not only to stand behind a product but hold equity in it.

The economy was also an immediate concern for panelist Carlos Rosso, executive vice president of The Related Group. A privately held, 30-year-old real-estate firm based in Miami, The Related Group has specialized in the development of high-end condominium complexes, rising to prominence with projects that helped redefine downtowns of cities throughout South Florida. In its work, the company has embraced many of the concepts of the new urbanism. “We believe there should be a concentration of people living downtown,” Rosso said. “We need denser cities concentrated around mass transit — not suburban sprawl.”

Despite its successes, The Related Group has not been immune to the changes in the real estate market. “About three years ago we saw lending problems in the U.S.,” Rosso said, “but nobody saw the size of the credit crunch.” Now, “the lack of credit is forcing everyone to rethink how they will advance.”

In response, The Related Group has created an international division to expand into markets that are less reliant on credit: Mexico, Panama, Argentina, and Uruguay. The firm has also teamed up with hotel companies, including the Mandarin Oriental Hotel Group, to develop resort properties and other products beyond its traditional condominium purview.

As for opportunities here in the U.S., Rosso remained cautiously optimistic. “We still see value in Florida real estate,” he said. “It’s just a problem of aligning our interest with the banks’ interest.”

Panelist Jaime Correa, a UM architecture professor and principal in the design firm Jaime Correa and Associates, saw change in broader terms and took a correspondingly more visionary approach. “I am here to rock your world,” he announced.

In Correa’s analysis, the future of development — and, he added, society as we know it — will rely on embracing a simple but revolutionary concept: “relocalization and contraction of our resources.” For Correa, social and economic problems ranging from climate change and increasing global poverty to suburban overexpansion, are “evidence of a disturbed society.” Our expansionist economy was doomed, he said, because it was underwritten by cheap oil, and that era has ended. He called for implementation of what he termed the “40 percent solution” — scaling back consumption by a dramatic 40 percent.

“I’m arguing that the future is contraction,” he said.

Like Rosso and The Related Group, Correa is a believer in densely populated urban centers. He spelled out some of the advantages of abandoning suburbs in favor of more centralized urban areas, including easier commutes to work and carless shopping by bicycle or on foot — both of which would reduce fuel use. In a visionary leap, he saw abandoned suburbs converted into local food production zones, generating food that would cost less to ship to market. In this and other ways, he said, society would become more efficient.