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Foreclosure fallout: Official says Las Vegas should turn from sprawl
Alan Mallach, a senior fellow at the Brookings Institution in Washington, is shown Monday outside of UNLV’s Greenspun Hall.
Tuesday, Oct. 26, 2010 | 2 a.m.
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Alan Mallach is a senior fellow with the Brookings Institution in Washington, and a visiting scholar at the Federal Reserve Bank of Philadelphia who specializes in housing policy and urban planning. He’ll give a free lecture at 5:30 today at Greenspun Hall at UNLV about the long-term effect of the foreclosure crisis in American housing.
What are you going to address in your lecture?
The question I’ll try to answer is what is going to happen long term to housing? Is this a blip, or a reset? My hypothesis is that this is a very major reset, and that for 10 years we’ll see low prices, low demand, low new construction. In the meantime, this is a good opportunity to take stock of what our housing policy is and what we should be doing.
And what should we be doing?
We need to take a serious step back from sprawl. In the early part of the last decade, we had this fantasy that we could have it all. That we could have redevelopment in our cities, development out on the outer rings, growth in the Sun Belt, growth in the older parts of the country.
Why was that a problem?
Nationwide we wound up building 7 million more housing units than occupied housing units. We don’t need that volume of housing stock. It’s wasteful. It’s environmentally unsustainable, and it diverts resources away from investments that would help us rebuild our economy.
What about the situation locally?
Clearly Las Vegas was overextended. What we’ve seen for four years, some would argue is a blip, and that in a year or two you’ll absorb oversupply. The other possibility is that it’s not a blip, and that it reflects a continued long-term slowdown, in which case there could be a lot of difficulties ahead. It’s not like Detroit, which has wide swaths of abandonment, but there are some areas that will be progressively less desirable, and then there’s the risk of long-term abandonment.
So what should we do?
There’s surprisingly lots of vacant land close to the Strip, and close to major economic anchors. The city and county should look at this vacant land and determine how it could be used to make a stronger community, and then create incentives and a tax and regulatory structure to encourage development there. It should be relatively close in, and at least medium density. Start filling in some of those holes.
Why do you recommend that kind of infill development?
It’s more efficient in terms of energy use. And I hear many people say Las Vegas needs to diversify its economy. To do that, you need a more sophisticated workforce. To attract those kinds of workers, you need a more diverse building pattern that includes more interesting, walkable neighborhoods.
Discussion: 7 comments so far…
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Las Vegas is one of the most dense cities in the country. NO TAX dollars are needed for incentives.. If there is demand and it can be done without losing money... the Private Sector will do it. Save the Tax Dollars for enforcing laws and making the core a safer place to live so people don't avoid it like the plague.
'Start filling in some of those holes.'
First, the view from the Penthouse level is certainly different than ground level, Penthouse guy.
Second and last...when you have nothing to say, you shouldn't say anything at all.
Chunky says:
He'd like to know where and how our over-spent government and over-taxed businesses are going to get the money to in-fill this vacant land?
Let's get more butts in beds here in the Valley and treat them like the valued guests they are and we'll see Vegas begin to recover in pace with the rest of the country when the cycle begins to swing up again.
That's what Chunky thinks!
put a moratorium on new construction and stop with the printing of new building permits until this economy improves. look across the valley and see the careless suburban planning for housing. what a disgrace! and you paid how much for that? what a ripoff!
Finding the tax money is simple. Stop funding wars. WE give 2 billion dollars A WEEK to Iraqis to stop fighting. That is really what Petraus is doing.
We are now handing out 1 billion a week in Afghanistan.
Imagine what that money could do in the US.
There is no problem with tax money. It just is sent outside the US to corrupt governments and corporations.
I'm not sure there was really good planning over the last 15 years. I appears to have been "boom sprawl" without much thought to real planning. The old, "get as much money as we can, while we can" was the motto.
The valley is really not that big. Many large cities have neighborhoods bigger than the Vegas valley. That four local governments were not consolidated in some fashion many years ago is beyond me.
Without thoughtful leadership from our politicans; consolidated planning efforts; attracting new business; more educated workforce; and sense of community we will continue on this path.
New business growth is going to be paramount over the next 25 years for Vegas. The corporate casions are showing that Las Vegas is quickly becoming a part of their "portfolio" of gambling companies. When the fish are biting in better waters, don't count on them to pay much attention to our lake.
Vegas is going to be different, fact. What it will be is up to all of us.
Clark County and its cities had planning staffs and plans -- and this is the result. Now it is proposed that the way out of the present condition is (drum roll, trumpets): planning. So we change one fad (suburban-exurban) for another (compact development). Only two problems: (1) it costs a lot of money to redevelop the infrastructure to support infill; and (2) if we spend the money, will people spend more of their money to live in cramped, noisier, smellier, more expensive places?
There are tens of thousands of homes across this valley that are not even fit to live in. As builders build and banks foreclose, a large portion of those unfit properties need to be demolished, by them, first!
Who is paying for Alan to give his Washington opinions here in Las Vegas?
There was so much double talk...
He states ... "My hypothesis is that this is a very major reset, and that for 10 years we'll see low prices, low demand...." and then he goes on to sate ..."create incentives and a tax and regulatory structure to encourage development..."
If there is low demand and low prices why build anything?
For every new home built it delays the reset and prices will remain stagnant and every homeowner is hurt....
Looks like developers and land barons are promoting his seminar...
His words should be the best reason for Vegas to push for a three year home building MORATORIUM, which will reset the housing bust for homeowners.
Las Vegas needs to stop building. We are going to run out of water. Tear down vacant/dilapidated properties.
DO NOT BUILD ANYMORE!
If you do build, build one property for every two you tear down.
Thanks.
Can't work, you teach. Enough said.
"put a moratorium on new construction and stop with the printing of new building permits until this economy improves."
"DO NOT BUILD ANYMORE!"
dipstick, Blockiest -- government doesn't have that kind of authority. Otherwise how would you propose to compensate the parties to contracts to build?
Some good posts here -- keep 'em coming!
"The paper bubble is then burst. This is what you and I, and every reasoning man, seduced by no obliquity of mind or interest, have long foreseen; yet its disastrous effects are not the less for having been foreseen. We were laboring under a dropsical fulness of circulating medium. Nearly all of it is now called in by the banks, who have the regulation of the safety-valves of our fortunes, and who condense and explode them at their will. Lands in this State cannot now be sold for a year's rent; and unless our Legislature have wisdom enough to effect a remedy by a gradual diminution only of the medium, there will be a general revolution of property in this state." -- Thomas Jefferson by letter to John Adams, 1819, from "The Works of Thomas Jefferson" Vol. 12
Maybe we should keep building until there is no water.
The Lake is going to continue to drop no matter what conservation the SNWA does.... Including raising the price to the citizens in Southern Nevada (which they have two price increases on the table for next year.. but won't talk about it until after the elections)
Every time that Lake Mead drops 20 feet Nevada's impact is only 9 inches of the 20 feet. Nevada needs to worry about the other 19+ feet and how to stop this drop. Because once it drops another 80 feet Clark County is out of drinking water.
They should have filed suit with the Federal Courts to re-adjust the water allotment to each State based on the true-water flow into the system.
So we might not have to wait for a moratorium ... just have to wait for the mass exodus because of no more water...
@ mcmc
Hoover dam serves several purposes: water regulation, water supply and power generation. Power generation does require a certain amount of head and the prospect of power generation loss is likely not acceptable. The generators aren't likely lowerable so the lake level will have to be maintained to a certain level. That certain level will be maintained, whether that would mean less release downstream or increased upstream supply. Or reduce the amount available to Vegas, I suppose. Wouldn't it be amazing if the turbines spun while the city thirsts...
Let's build the kind of housing that seniors and retirees want and need. Single story homes with garages and serious patios. In areas that we can walk to the bus line and the grocery. We might have cars now but who wants us driving for another 20 years..... Keep your high-rise condos. We don't want them.
2bxx
Wish you were right but here is what the Bureau of Reclamation has to say...
"Lake Mead dipped to 1,085 ft in September, less than 40% of its capacity, following a decade of boom growth and drought. As a result, Hoover Dam may have to shutter its 17 Francis-type hydroelectric turbines, each generating 130 MW, by 2013. The facility also has two 60-MW turbines and two 3-MW service generators. Lake levels have been dropping by 10 ft annually and cannot feed the turbines below 1,050 ft. "It was designed as a high-elevation dam," says Pete DiDonato, dam facilities manager for the U.S. Bureau of Reclamation." [close quote]
SNWA has been the opposite of the boy who cried wolf .. they have circulated everything from the underground river, the water bank in Arizona ($350,000,000), the catch basin in California ($400,000,000), the tunnel under Lake Mead ($750,000,000) and of course the Pipe line from the North (1.5 billion), as our saving solutions. Yet none of these will work...and if they didn't need something why spend over 1.5 billion dollars to date with a proposed 1.5 billion dollars on the Pipe line?
Mark my words...The Federal Government will have to reduce all 7 states allotment's equally, and that will mean Nevada will only receive 240,000 acre-feet per year. Leaving 100,000 homes without water in Clark County because the SNWA didn't spend the money to build a filtering system that would allow us to filter non-drinkable water from lake mead, they have always relied on Lake Mead as the final filtering system and now I believe we are screwed...
But again I hope you are right...
Somebody should tell this Progressive Liberal that Las Vegas is surrounded by Federal Land and does not have much farther to go.
Infill will eventually take care of itself and the Private Sector will take care of it when there is True Demand. In other words.. no need for another excuse for higher taxes and big wasteful Government spending.
My Tax dollars should not be allocated to an area that I have ZERO interest in living in.
Some bearded Ivory Tower liberal intellectual from back east can't possibly have anything useful to tell Nevadans.
You people are so screwed, and you don't even know it. But then, the state with the dumbest city, the worst Governor, and the whackiest Senate nominee would never see it coming.
Tax cuts for the rich!
Where else would Obama put the illegals?
Brookings is living in la la land. Their existence depends huge government grants. What exists in Las Vegas is different that what exists in Portland,Oregon or any other city. I guess they use the same study and just change the name from Portland or Seattle to Las Vegas.Word processing programs easily allow you to do that. Brooking studies are garbage since they are unrealistic. Las Vegas is a very unique city and will always be. A PhD does not give you common sense.
The Dumbest City in America is a good label for the regional planners. Every major road does not need miles of strip centers. They are eyesores. How many Massage and Nail Salons do we really need?
A Bar and Grill at every corner, really? Industrial, Commercial and Residential at one intersection, Really?
We could really use some outside help. Heck, even a kindergartner playing Sim City City would know better than building like this.
To the water chicken littles:
It appears that the annual Rocky Mountain snowpack is returning to near normal (it had been hugely down several years ago). Why Lake Mead continues to drop is that they're trying to get Lake Powell (which was even worse), back up from essentially empty. If the snowfall stays near normal, they can eventually start allowing more water down into Lake Mead.
And if there's one thing I'd blame on Harry Reid, it would be not using his influence over the last four years to up Nevada's allocation of Lake Mead water.
To the regurgitators of "Markets take care of EVERYTHING" claptrap, reckless markets and the short-term profit mentality blew up our nation's economy and left our own community here on life-support. Empirical evidence proves you wrong, and that a little oversight and controlled growth would serve us well.
Just tonight, there is a story about a Georgia company coming to the Valley to build a $15 million dollar facility here. Admittedly, there will be construction jobs from that. But instead of building that facility way out on the fringes of the Valley, some local incentives (ex., 10 year tax holiday) to have same facility built in more centralized, commercial area (and there a LOTS of those around) would be better. Better yet, enticements to use some vacant commercial building (and there are lots of those, too). Let's revitalize the core of this community. Allowing our Valley to turn into a bad imitation of the L.A. basin is something only brain-dead right-wingers who have stupid, knee-jerk reactions to a Brookings man, would think is a good idea.
To the water ostriches: The snow drought of the late '90's early '00's has been over for about five years, and during that span the water levels in Powell/Mead have continued to fall. Water woes are very real.
Looking to the federal Government to solve a regional problem won't work. The Governors of the Colorado Basin states must get together to hammer out a new water pact. Only when there is consensus among those Governors and their states, will the Feds be able to adopt the agreement. But don't hold your breath waiting for a consensus to develop. The current agreement will probably remain in place, and that spells pain and trouble for Nevada.