Removing Federal Obstacles to Urbanism

Urbanists and smart growth advocates often talk about long-standing Federal policies and practices that undermine cities and small towns and stand in the way of realizing the benefits of good urbanism. In meetings with CNU board members, representatives of the Obama Administration showed a sincere and refreshing interesting in learning more about the obstacles. Put them in writing, they said. So that's what we did.

FEDERAL POLICIES BLOCKING A SUSTAINABLE COMMUNITIES AGENDA

Through CNU's monthly e-newsletter and two large listservs (Pro-Urb and Pop-u-list), CNU members and other urbanists were asked to identify Federal policies that stand as obstacles blocking economically and environmentally sustainable urban development and redevelopment, as reflected in the six livability principles advanced by the HUD-DOT-EPA Interagency Partnership for Sustainable Communities and the Charter of the New Urbanism.

The responses covered a range of policy types — financial, environmental, transportation, land-use. Key obstacles mentioned by multiple respondents are described in the next paragraphs.

A longer list of significant obstacles suggested by respondents follows. A few of those suggestions may be better directed at local government but serve to indicate how Federal-level obstacles interact with obstacles involving other units of government. If officials desire further detail on any of these items, CNU will be pleased to discuss these matters further and retrieve additional information as needed.

Key Obstacles:
1) Traditionally, through the history of human civilization, streets have served three purposes in the urban context: the movement of people and goods, the conduct of commerce (the market place) and the social interaction of the community (Main Street). The US DOT and by extension state DOTs, however, classify streets almost exclusively by their "level of service," which reflects the street's performance on just one of these three key functions: movement. And narrower still, this functional classification system excludes considerations of how well streets serve pedestrians, bicycles and transit service and instead focuses solely on motor-vehicle traffic. Since the system rates streets more highly for carrying more automobile and truck traffic regardless of impacts on the economic and social value of streets, federal and state funding flows to street designs that actively undermine community's efforts to create valuable, livable and sustainable communities. The goal of the federal road program is reducing automobile congestion. This is far too simple since congestion is much like cholesterol: it can be both good and bad. In sustainable communities with highly connected networks of walkable streets and transit, concentrations of people are signs of health, vitality and outstanding environmental performance.

Federal funding also facilitates long trips and fails to account for the value of short-distance and non-motorized trips. In an economic and social sense, a person walking across a street to work at a job contributes as much as a person driving 25 miles to work at the same job. Federal policy should support economic value without disadvantaging compact, energy-efficient transit served urban development, as Harvard economist Ed Glaeser argued persuasively in the Boston Globe.

2) Federal housing policy disadvantages urban living by favoring home ownership over renting through subsidized mortgage programs (Fannie Mae, Freddie Mac and FHA) and by allowing tax deductions up to $2 million on mortgage interest. Also HUD's 221 D4 capital subsidy for rental housing obstructs mixed-use development including housing and retail by prohibiting more than 20 percent of the imputed value of a project to be non residential. Fannie Mae and Freddie Mac impose similar restrictions on owner-occupied housing. Potential buyers in a new four-story building with three floors of housing and shops on the ground floor would find it difficult or even impossible to secure mortgage financing because rules at Fannie Mae or Freddie Mac bar the mortgage giants from involvement in buildings where non-retail uses exceed 20 percent. Likewise developers of either for-sale housing under Fannie and Freddie or rental housing under 221 D4 find it nearly impossible to get financing from banks, almost all of whom mimic and impose the Federal restrictions on mixed use.

Cities, towns and villages work best when citizens have abundant options for housing. Variance in scale, building type and financing (rent or mortgage) are the ingredients of a housing market that serves the varied needs of citizens. When Federal programs are built around specialized concerns they can obstruct the beneficial complexity of urban places. Financial requirements that require a separation of uses or discourage rent-based housing work against the interests of diverse urban areas and the people who live in them. They also severely limit the ability to bring homes, schools, stores, offices and other important destinations within walking distance, a pattern shown to yield dramatic benefits in energy efficiency, public health, household transportation costs and environmental impact.

List of Identified Obstacles
Environmental Regulations
• Mandatory greenways trump and curtail urban network connectivity.
• On-site storm water retention/detention lowers density and discourages infill redevelopment.
• Categorical street tree planting requirements preclude urban sections.
• Limiting lot coverage discourages density.

Transportation, Land-Use and Development Planning
• Federal funding requires capacity expansion independent of context, leading to excessive width.
• Modeling in transportation planning reflects the Fed- and AASHTO-backed functional road classification system.
• Lack of federal and state-wide general plans. Without a vision for the future development of states and nation, competing local tendencies do not create favorable results. In a country with nearly infinite land, the property rights approach that was first developed was appropriate, but now we have disjointed approaches to addressing larger issues.
• The Interior Department’s Rule 9 in the Historic Preservation code requires additions to historic buildings to use contemporary architectural styles to distinguish themselves from the original building, an overly rigid rule that may impede context-sensitive urban redevelopment efforts.
• Federal transit and highway funding formulas view transit service in a vacuum, failing to link them with appropriate local infrastructure.

Financing
• The secondary mortgage market favors standard suburban typologies, in many cases excluding urban typologies such as the two- through four-story mixed-use buildings that are the mainstays of revitalizing Main Streets across the United States. Condominium buyers in infill buildings of this type face the hardship of obtaining unconventional mortgages, if available, which impairs resale value. And similar requirements for rental housing, mean proposed buildings of this type fail to qualify for HUD support despite being key
• Commercial mortgage lenders require excessive mandatory parking as a precondition for financing, even when cities have lower requirements. Although not a Federal government obstacle, these requirements reduce density, increase the cost of development and discourage use of public transportation. Federal incentives could ease these restrictions and help parking markets regulate themselves.
• The tax code encourages the built environment to be quickly depreciated, leading to a condition where long-term solutions are penalized.

Remedies and Resources:
President Barack Obama’s administration shows a commitment to reforming Federal policy to improve the prospects of US cities and suburbs. CNU recommends administration housing, transportation and environmental officials consult the following as key resources: the Charter of the New Urbanism, the Canons, coding reform information and model codes from SmartCode Central and the Form-Based Codes Institute, and the new, just released guide, Designing Walkable Urban Thoroughfares from CNU and the Institute of Transportation Engineers.