Why Cities Want Density

The Real Estate Espresso Podcast

Why Cities Want Density

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Why Cities Want Density: A Deeper Dive

As we witness the continued sprawl of cities into suburbs, we have to ponder over the question: why are cities embracing a denser landscape? This trend is not just limited to a few cities, it’s across the globe and there are compelling reasons too. In this blog post, we aim to explore this shift towards intensification and the transformative impacts it brings.

The Financial Perspective

Take a look at single-family home developments. The cost of fully serviced roads, including seven utilities, averages around $1,200 to $1,400 per linear foot. If we talk about 200 homes in a subdivision versus a 200-unit high-rise apartment building, the apartment building costs significantly less, both in short term and long term. In fact, the difference reaches up to $13.5 million. Over time, roads need repaving and underground infrastructure needs replacement. This evident cost-efficiency underpins why many cities lean toward higher density in the urban area.

Efficiency and Resource Utilization

High density in an urban setting truly maximizes the use of scarce resources like schools. It improves the property taxes per unit area and minimizes costs associated with delivering services to the population. By converting functionally obsolete buildings and focusing on infill development, cities can meet the growing housing demand more efficiently and sustainably.

The Role of Zoning Codes

Relaxing zoning codes plays a crucial role in increasing density. Many cities allow medium density housing that may include townhomes and small apartment buildings in areas once designated for single-family residences. Despite the potential challenges of land assembly and neighborhood opposition, these changes provide cities opportunities to better use land and resources.

A Changing Retail Landscape

The rise and fall of shopping malls in the United States also provides cities valuable opportunities for repurposing large urban spaces. Older shopping malls, once bustling with life, have declined, leaving vast spaces for new development that many cities are looking to utilize. Some shopping areas are even being reconcepted as mixed-use projects that bring together retail and residential.

Infill Projects: An Untapped Opportunity

Finally, we should not undervalue the potential of infill projects within urban boundaries. They represent a top opportunity for development with support from city officials. Old shopping malls or fixer-upper apartment complexes may be the entryway into significant projects that maximize urban land use and contribute to the densification trend.

Checklist for Infill Project Consideration
Cost-efficiency comparison
Legal boundaries and zoning codes
Parking availability
Potential neighborhood opposition
Impact on city resources and taxes

Urban intensification is more than a trend. It’s an efficient and sustainable answer to growing cities’ demands and constraints. Delving into the world of real estate investing, it offers an untapped treasure of opportunities that savvy investors cannot afford to miss out on. As you ponder these insights, remember, every project’s viability is influenced by multiple factors, including parking availability. So, go out there, and make some great things happen in the world of real estate investing.

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