Real Estate Relies on People: What Happens When People Change

Dwellings, offices, factories, warehouses, restaurants, even zoos, are all built for people. Seems an exceedingly obvious statement. Equally obvious is the fact that as society changes, its man-made structures change, too. Ebb and flow and all that.

But what I find fascinating is how little we learn. The old saying goes that those who don’t learn from history are doomed to repeat it, but when have we ever really learned? Most people want to live in an area of human contact, human proximity. After decades of decline, cities made a resurgence (until a lot were priced out). The mantra was vibrancy, walkability held in stark contrast to the suburbs’ winding roads to nowhere (an environmental and economic waste). But just as that happened, vibrancy was spirited away with a mouse click leaving only restaurants and dry cleaners.

Vacant storefront on Madison Avenue

Retail and People

Earlier this year, Candy wrote about the vacancy issues faced by retail spaces in New York City. We’ve seen it writ large whether New York City or Dallas, brick-and-mortar retail is changing rapidly because transportation changed – yes, transportation.

Back in the mists, people clustered near towns because distance was measured in foot or hoof steps. Early mail order firms like Sears, J.C. Penney, and Montgomery Ward delivered goods further without severely impacting town commerce, but transportation meant delivery time was still an issue. The automobile gave rise to shopping malls as distance became easier to traverse.

The mall was the first salvo at Main Street retail. Many formerly vibrant towns gave rise to the bedroom community. Discounters and big box stores further crimped Main Street. The suburban Chicago town I grew up in saw many retailers replaced by restaurants.

And now today, where the transportation ring is essentially planet Earth, complex supply chains and a grid of warehouses reduce delivery time to near nothing. While most perishables remain close by, little else does. At this exact moment, when urbanism and vibrancy are envied totems, the world is literally a smiley box away from your doorstep.

There is a disconnect because these same people report higher levels of loneliness, depression, and disconnection from society. Gee, I wonder why?

Foot Traffic is a Formula For Vibrancy

Vibrancy is driven by foot traffic that enables diverse businesses to operate in closer, urban proximity. This foot traffic is the engine of vibrancy and neighborhoods. However, the online world has made the routine of vibrancy clickable in a bathrobe. With less need to go out, vibrancy dwindles.

For nearly three months, I’ve been living in a hotel which has rerouted my walking routes. Until my gym unceremoniously closed last month, one of those walks took me through Victory Park. Vacant Victory Park. Unless there was something going on at American Airlines Center, the sidewalks were bare despite hundreds of apartments, condos, and restaurants.

It seems blocks of retail-less restaurants are an unsustainable combination. But there are only so many restaurants that can be supported within a certain human radius. For those seeking vibrancy, there is only escalation in response. As more consumption is drawn online (including the literal consumption of meal delivery), physical stores need a larger/denser customer base to draw fewer customers from.

Thousands of condos built atop a shopping center in Hong Kong with the second phase in foreground.

In cities across the globe, there is a concerted movement of shopping malls adding high-rise residential on-site – literally building their own customer base. Whereas when malls were built they were magnets for shoppers, the tables have turned where retail is more drawn to proximity of customers. These projects begin to function more like a town than a mall.

The first salvo has begun with cities becoming denser and more compact in order to support their own vibrancy. But it truly is a zero-sum game because consumption is largely stagnant – we only eat so much and buy so much. The evidence is found on once vibrant city streets with a steady stream of “for rent” signs where businesses used to wait for an opening.

What’s purchased online isn’t purchased on the corner store. Online shopping grows in proportion to the deterioration of the physical vibrancy so many desire.

Because let’s face it, without shopping, eating, drinking and dry cleaning adding to vibrancy, jungles of residential high-rises might as well be called vertically-walled gardens. Victory Park should be a warning, but we never learn.

The tapestry of vibrancy craved by many is diminishing, surrendered one mouse click at a time.

Even in the single-family world.

Penson home designed by O’Neil Ford razed in 2018

Residential Real Estate And People

In the home building sphere, it’s the same. The generation that built bigger, bigger, and bigger is being followed by one more circumspect, with lowered economic power. Maintaining their parent’s McMansions doesn’t fit their wallet or desire. In short-order I see great swathes of those cheaply built homes scrapped for smaller, more dense construction. A huge amount of new residential construction over the past few decades has been subjected to an HOA. I wonder how long it will be before a tumbledown subdivision gets bought wholesale (like an old apartment building) for redevelopment?

How much wasted building material will wind up in a landfill? How will their NIMBY neighbors react to 200 tract homes turning into 600 townhomes or 2,000 apartments/condos? Population growth and cheap construction all but guarantee it will happen.

But it’s not all about replacement housing tearing down cheap subdivisions. The luxury market is guilty of the same trend of replacement.

Penson, Mayrath, Dal-Tile, Crow, and Grady Vaughn are all homes connected by their pasts and futures. They are five singular monuments to their original architects and the owners who commissioned them – so significant they’re known by their original owners’ names. Three of the four have been demolished while the Grady Vaughn home at 5350 S. Dentwood Drive, listed for sale in 2016, remains on the market after failing to sell at auction over a year ago. I have no doubt it too will meet the wrecking ball. But why?

View of White Rock Lake from the Dal-Tile home

While few will ever do extensive renovations their homes, even fewer will ever build from scratch. The group who has consistently built from scratch continue to be wealthy. In part, because it’s a costly and complex process but also because the wealthy consistently possess a “look at me” ego. But even within the circle of those who can afford to splash-out and build, it’s slim pickings.

One only has to look at the Stoneleigh Residences for proof that humanity, including wealthy humanity, is largely unimaginative. I continue to be amazed that a building offering infinite choice without the hassle of foundations, walls, and ceilings didn’t have a waiting list of buyers. It’s such a rare thing.

Teardowns are torn down because those willing to save them are too poor to do so, while those who can don’t want to live another’s dream. I have spent a few hours in three of the homes called out and while they’re surplus to my needs, they were infinitely salvageable with a deft renovation.

Grady Vaughn home on Dentwood Drive

I have seen no plans for any of these now-lots, but I imagine their dirt will not find itself hosting a home with the architectural verve of their predecessor. I suspect it will be a little like my first kitchen that had layers and layers of linoleum on top of the wood floors. The first pattern of linoleum? Fake wood.

And make no mistake, while each of these homes was enormous by most standards, their replacements will hardly be things of restraint and diminuitiveness.

I think the very chest-thumping they expect to communicate to visitors via their new home will be equally less than the expressions of admiration they’d have received by breathing new life into the original structure. There is an awe reserved for the come-back story that painfully few new builds can capture.

I know it’s all pointless, but can’t we learn and remember?


Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.