Being profitable as a building owner in a city like Los Angeles or San Francisco today is arguably as hard as it’s ever been. The elephant in the room is that buildings are static, or at least have been so historically. Even the poorly designed, cheaply-built ones somehow soldier-on empty because they are too costly to demolish and replace. In hindsight, our assumptions were right for a snapshot in time but became increasingly wrong in the face of a myriad of changing baseline conditions: Industrial production moving overseas, office workers telecommuting from home, the shift toward online shopping, more retirees vs. fewer workers, smaller disposable incomes in the face of currency inflation, and outmoded ideas about cities being zoned into separate districts by use. The damage is done. Now what? Here are some thoughts:
1. Realize Things Have Changed
Assuming the Work from Home movement and the expansion of Artificial Intelligence (AI) is here to stay, corporations will take the rent savings offered by shrinking and densifying their space programs. As existing leases expire, many if not most offices will incrementally shift away from dedicated desks and offices to adopt a coworking model heavy on huddle spaces and meeting rooms and lighter on workstations. Tuesdays, Wednesday’s and Thursdays may well become the new shorter urban workweek with office-serving businesses like restaurants, dry-cleaners, and retail learning to survive by catering to home workers through delivery services like Postmates or Uber Eats combined with flexible job descriptions that cover both public facing and packing-for-delivery modes.
2. Uses Attached to Leisure Time Will Expand
Dining out, high-quality shopping experiences, weekend jaunts to cultural venues, and enjoying the great outdoors are just some of the potential applications of increased leisure time coming out of the shift of Baby Boomers to semi-retired or retired life as well as a shorter workweek for all afforded by AI and robotics diminishing the need for so much human labor to keep the world turning. Having the dollars to spend is an economic challenge, not meant to be seriously solved here, but the expansion of productivity through automation unquestionably will create dollars. Who will benefit is a work in progress.
3. Use Finite Land Boundaries to Afford Upkeep of Already Proven City Centers
Albeit a rather dramatic and desperate strategy to preserve a decent urban life, city planners may wish to consider doubling down on existing downtown edge conditions (like a ring road, large parks, or bodies of water) to more strictly limit and focus density within a downtown core, leaving the periphery to gradually unwind into other uses. Good public transit within the newly densified urban core will be essential to attain high-walkability scores for the offices and services within. Further serving pedestrian life, buildings within the downtown core will likely need to up their game architecturally, incentivized to become attractive gems rather than simply the homely beneficiaries of the old real estate maxim: “Location, location, location.” The upside of strict densification within a defined downtown core will be higher rents, opportunities for tourism, getting fuller use of costly mass transit infrastructure, and opportunities to expand public-serving cultural venues like performing arts centers and museums. All of these benefits will feed upon each other, ideally, to create a great city in the place of what was once just a place to do business.
4. Restore Community Redevelopment Agency Powers to Address De-densification Outside of City Centers
Vacant storefronts and vacant commercial buildings are the same sort of blight that Community Redevelopment Agencies were formed to address in the Mid-20th Century. Is the time right for California to reinstate such a vehicle to buy-up private land? The objective would be to sensibly convert these parcels to lower density uses: New park land or beneficial and sustainably proximate uses like expanded warehouse space for online retailers and coworking kitchens, industrial space for production being brough back from abroad, farmland for food production, or farmland for wind or solar energy generation.
5. Use Creative Financing to Take Civic Beauty Out of the Realm of “I can’t afford it.”
The very same community redevelopment agencies discussed above could incentivize high quality architectural design of private projects through subsidized loan rates that flow with higher design fees and 30+ year loan terms that flow with “permanent” 100-year buildings. Tourism-related tax income, such as an occupancy tax, can theoretically be counted on to at least partially repay such subsidies, assuming these incentives create the beautiful, appealing buildings and associated public open spaces that tourists seek out.
6. Avoid Dinosaur Buildings: Design Adaptable, Multi-Use Buildings
Duh. Seems obvious is hindsight but the formulaic workflow of most commercial developers and architects led to building for a momentary now rather than for the long haul. Synchronis participates in and endorses efforts for Open Building Design led by groups like the Council on Open Building.
