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Ten Things You Need to Know About Catalytic Development

The Brookings Institute recently published a report exploring a new planning and real estate model: catalytic development, which intends to jump-start redevelopment in languishing urban areas using a more place-based approach (yay for that!). As a former Brookings co-author of Chris Leinberger myself (of Walk this Way), I still tend to read his regularly seminal pieces, this one included! But in case you haven't had the time to read through the 78-page report, we created a handy, TLDR guide highlighting the 10 things you need to know about Catalytic Development: 

1. From Ashes to Dust to "It" Neighborhood

Catalytic development focuses on reinvigorating areas abandoned as a result of suburban migration in the 20th century. It brings new life to the vestiges of urban renewal by eschewing the design and planning principles that ushered in the demise of these places to begin with. It is decidedly rejecting (Robert) Moses and embracing Jane (Jacobs, duh ;)). focusing on good old fashioned urban design principles, such as "granularity, incrementalism, and mixed-use" (which sounds quite familiar to us here at State of Place!).

2. These streets are made for walking

Catalytic development responds to the increasing demand in recent decades for WalkUPs (walkable urban places). This demand represents a desire to return to dense urban areas that were the standard development before the rise of the auto-oriented suburbs in the early to mid-20th century - those vestiges of urban renewal.

3. Role Reversal

Catalytic development flips the traditional roles in public-private partnerships on its head, with public entities using private-sector like financing vehicles like TIFFs (tax increment financing) to borrow for development projects and private entities using value-capture-esq structures (including direct contributions and self-taxing) to construct traditionally public works and amenities, like private lanes, small-sector transit systems, and public spaces. Additionally, catalytic development brings together folks from many "stripes" - at least with respect to the real estate development world, including businesses, nonprofits and government working toward a common vision. Think Calvin Gladney's (SGA's new prez and my amazing friend) P5s: Public, Private, Non-Profit, Philanthropic, People...

4. Revenge of the (Young) nerds

Catalytic development and the increasing demand for WalkUPs is attributed to the rise of knowledge economy, which seeks to attract and retain young people by investing in the types of places they’re looking to live in: WalkUPs. Just look at the features listed in Amazon’s HQ2 proposal request, which sounds like a textbook WalkUP: smart millennials (check), mass transit and bike options (check), urban retail shops and restaurants (check), and proximity to excellent universities and international airports (check and check).

5. We are young (in spirit)

Catalytic development is NOT just for young people. Yup, you can never discount the Boomers. The areas targeted by catalytic development tend to have a deep sense of place and evoke strong memories, indeed one of the most unique and valuable assets of these neighborhoods. This is especially true for Baby Boomers, who were children during the “golden age” of walkable urban development. Powerful Baby Boomers are particularly inclined to devote resources to catalytic development efforts, especially when it is steeped in nostalgia: the report even highlights an Albuquerque councilwoman in her 60s who supported the rehabilitation of a historic building in their downtown, saying that it’s where she had her first kiss. Aw so sweet! 

6. Show me the money (eventually)

One of the main tenets of catalytic development is in its expectations for long return periods, which is a marked departure from traditional 3-5 year returns. Rather than seeking instant gratification, catalytic developers are in it for the long haul, seeking strong, sustained returns of over 5 to 20 years, or even longer. Investors expect an “upward spiral of value creation” where the creation of more WalkUPs exponentially increases the number of people who live, work and play there, the diversity of destinations, and of course, higher real estate values and tax revenues. We’ve all heard the saying - good things come to those who wait - catalytic development translates this into action by helping urban places increase and retain value for the long-term.

7. Give it to me (in b) flat

Catalytic development requires "horizontal integration" so assets may be managed as a portfolio rather than as discrete individual projects, allowing development decisions to be made in way that considers all properties and how they impact one another. In other words, this not only spreads risks across multiple assets, this mitigation strategy actually gives developers more room to make "riskier" or outside the box choices regarding specific developments or invest in urban design amenities, because they know the upside will be spread across multiple projects.

8. Jobs, and Jobs, and Jobs, And Jobs...

Catalytic development employs (tee hee) an “Employment First” strategy. This is another means by which catalytic development differs from the traditional model of downtown redevelopment; rather than focus on amenities like entertainment, catalytic models anchor themselves around employment creation and retention in the communities they’re developing, exponentially boosting their resiliency and sustainability. 

9. You can have your cake and eat it too (without calories)

Catalytic development is centered on the philosophy of “doing well by doing good,” emphasizing the need for developers to maintain an inclusive vision. Catalytic development calls for balancing between developers' need to be agile with the community's need to feel engaged and empowered, emphasizing that public buy-in is critical to a project’s success. The provision of key urban planning and design features, such as access to various transit options - including bike and pedestrian infrastructure - and mixed-use development helps ensure WalkUPs' inclusivity. Additionally, ensuring access to quality education, providing social programs, and addressing homelessness can create an upward spiral and ensure the viability of WalkUPs and in turn further benefit the local economy. Finally, Catalytic developers are further motivated to improve the social equity of the communities they seek to revive by "walking the walk" and actually locating themselves, their families, and their employees in the places where they are investing their capital. 

10. Stop it. This isn't the next silver bullet. (ahem, Stop looking for one already, would ya?)

Leinberger and Hadden Loh (who co-authored the piece) are careful to point out that catalytic development is not for all urban areas, with some areas succeeding through the conventional urban development process. Catalytic developers should seek to target areas that need patient equity, integrated development, and employment. Catalytic development is also not a silver bullet, but a step toward achieving greater sponsorship and buy-in from other outside investors. Additionally, this idea comes with three key risks: 

  • Thin(ning) pockets - not securing enough capital
  • No buy-in - not getting the trust or confidence of the community for your vision (and failing to get required approvals or funding)
  • Skimping on the amenities - you defeat the purpose of catalytic development if you cut corners on quality of place, public spaces or walkability, period.

11. State of Place is a natural catalyst for catalytic development

Ok, so this technically wasn't part of the report (and we do know how to count! ;)), but we couldn't help notice the synergies between the goals that Catalytic Development aims to achieve and the mechanisms it is adopting to do so and State of Place's own mission and vision! So for those of you who don't really know what State of Place is, we are a predictive analytics software that quantifies the things that people love about places (or catalytic development) based on over 290 features (think all the goodies that go into amazing WalkUPs); automatically recommends the best ways to make them better (more walkable, livable, sustainable and profitable); and calculates the ROI of doing so (creating more catalytic developments). So here are the key ways we think we can help. 

  • Know where you're starting from - the State of Place Index (which aggregates those 290 features into a score from 0-100) tells you your catalytic development baseline and the State of Place Profile (which breaks down the Index into ten areas of urban design performance - needed for successful WalkUPs) tells you what's working and what's not
  • Know how best to get where you're going - the State of Place Prioritization analysis tells you which changes you need to make to get the biggest bang for the buck given what goals you want to achieve (e.g., more people walking, higher retail revenues, etc.) and our super fun Sim-City style scenario analysis helps you identify the best changes or proposals to spur catalytic development 
  • Pave the path for getting there - the State of Place Forecasting analysis literally quantifies the real estate premiums, value capture and ROI of your catalytic development projects!! So you can actually get them funded and approved. And finally, our platform makes it super easy to involve the community, either via data collection, quantifying their priorities, or fun, accessible Sim-City style planning.