Community Planning Academy
Atlanta Metro 2040
FUTURE SHOCK
Arthur C. Nelson, Ph.D, FAICP
Professor & Director, Urban Affairs & Planning
Virginia Tech – Alexandria Center
March 23, 2006
Front Page
December 4,
2004
Getting Ahead of the Curve
Metropolitan Atlanta 2000-2040
Category
Population
Housing Units
Jobs
2000
4.2 million
1.6 million
2.8 million
2040___
9.4 million
3.7 million
4.7 million
Residential Development
Metropolitan Atlanta 2000-2040
Figure
Growth-Related Units Built
Replaced Units Built
Total Units Built
2000 to 2040
2 million
1 million
3 million
Nonresidential Development
Metropolitan Atlanta 2000-2040
US
Growth-Related Square Feet
Replaced Square Feet
Total Square Feet
2000 to 2040
1 billion
2 billion
3 billion
Life-Span of Building Space
200
Years
150
100
50
0
Retail
Warehouse
Nonres.
Office
Education
Homes
What About ….?
Telecommuting?
 Office hotelling?
 Internet retailing?
 Emerging technologies?

And their effect on future space needs?
Retail Trends
Share of grocery store, warehouse club, super store, & department
store sales, catalog sales, Internet sales
60%
40%
20%
0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: US Census Bureau
Reality Check
Space Class
1992
Retail & Service
57
Office, Medical, Ed.
88
Total Glamour Space 145
Warehouse & Storage 45
All Other
75
2003
62
87
149
35
63
%Dif
+9%
-1%
+3%
-23%
-16%
Figures for U.S.
Non-percentage figures per capita based on Census estimates.
Source: Energy Information Administration, Commercial Buildings Energy
Consumption Surveys for 1992 and 2003.
Bottom Line
New Construction
Metropolitan Atlanta 2000-2040
Construction
Residential
Nonresidential
Infrastructure
Total
$750 Billion
$400 Billion
$150 Billion
$ 1.3 Trillion
Where Does It Grow?
Market Analysts Finding
Changing Preferences
National Association of Realtors
National Association of Home Builders
Nationally Recognized Market Analysts
Urban Land Institute
Lend Lease/PriceWaterhouseCoopers
Joint Center for Housing Policy at Harvard
Golfing Buddies and Taxi Drivers
The New Urban Economics

Old School
 People
locate where jobs are
 The “employment-centric” model

New School
 Jobs
locate where people are
 The “homo-centric” model

The New Urban Economics
 Real
estate development follows people
 Where are people going?
Source: Arthur O’Sullivan, Urban Economics, Sixth Edition (2007).
What is the Market Telling Us?

Resale prices of condominiums rival
resale prices of single-family homes
for first time ever

Appreciation of condominiums is
higher than single-family homes
nationally and in every region
Resale Prices 2002-2005
[SF = detached + townhouse, CC = condominium + cooperative]
Region
US
NE
MW
S
W
2002SF
$158
$164
$136
$147
$215
2005SF
$207
$244
$166
$178
$314
Figures in thousands of dollars.
Source: National Association of Realtors 2006.
2002CC
$142
$147
$149
$115
$172
2005CC
$218
$252
$189
$195
$261
Appreciation 2002-2005
Region
US
NE
MW
S
W
SF Percent
31%
49%
22%
21%
46%
CC Percent
54%
71%
27%
70%
52%
Source: Adapted from National Association of Realtors 2006.
“Traditional” Households
on the Wane
Household Type
HH with Children
Single-Person HH
1960
2000
2040
48%
13%
33%
26%
27%
30%
Figures for U.S.
Source: Census for 1960 and 2000, 2040 adapted from Martha Farnsworth
Riche, How Changes in the Nation’s Age and Household Structure Will
Reshape Housing Demand in the 21st Century, HUD (2003).
People Turning 65  1950-2025
Thousands
4500
4000
3500
3000
2500
2000
1500
Source: Rosen Consulting
20
25
20
20
20
15
20
10
20
05
20
00
19
95
19
90
19
85
19
80
19
75
19
70
19
65
19
60
19
55
19
50
1000
Share of Growth 2000-2040
HH Type
2000
W/ children
35
W/o children
71
Single-person 26
2040
41
111
44
Change %Share
6
13%
40
87%
17
38%
Figures for U.S.
Figures in millions of households.
Source: Adapted and extrapolated from Martha Farnsworth Riche, How
Changes in the Nation's Age and Household Structure Will Reshape
Housing Demand in the 21st Century, HUD (2003).
Life-Cycle Mix
Income Mix
Ethnic Mix
Housing Mix
Sidewalks
Stores, Eating
20
10
0
School Walk
80
70
60
50
40
30
Transit Access
Percent
Neighborhood Feature Preferences
Neighborhood Feature
Source: National Association of Realtors & Smart Growth America, American
Preference Survey 2004.
Retired Location Preference
In a city
In a suburb close to a city
Total “urban”
In a suburb away from a city
In a rural community
14%
37%
51%
19%
30%
Suburbs away from cities are the losers
Source: National Association of Realtors & Smart Growth America,
American Preference Survey 2004.
Housing Choices of Elderly
Housing Type All Elderly
Detached
69%
Townhouse
5%
2+ Units in Bldg
19%
Manufactured
7%
All Attached
24%
Owner
80%
Elderly Movers
35%
11%
43%
11%
54%
41%
Source: American Housing Survey 2003. New movers means moved in past
year. Annual elderly movers are about 5% of all elderly households; 75%+ of
all elderly will change housing type between ages 65 and 80.
Elderly Downsizing
Measure
House size
% Change
Lot size
% Change
Before
1,687 sf
After
1,450 sf
-14%
0.35 ac
Source: American Housing Survey 2003.
0.24 ac
-31%
Preference Survey Signals
All Households
Housing Type
Owner attached
Small lots (<7k sf)
Survey Range, Unit Type
Townhouses
17% to 33%
Condos
9% to 14%
Cluster, other
37% to 57%
Source: Adapted from Myers & Gearin, “Future Demand for Denser Residential
Neighborhoods”, Housing Policy Debate (2001).
Future Housing Shares – US
Housing Type
Apartment
Owner Attached
Small Lot
Large Lot
2003
24%
11%
15%
51%
2040
30%
20%
30%
20%
Source: 2003 data from American Housing Survey 2003. 2040 figures
derived from preference surveys.
US Demand in 2040
50% Attached (apartment, TH, condo, etc.)
30% Detached small/cluster/zero-lot
20% Conventional subdivision
80% = Traditional Urban Density
Even in Plano, Texas
Atlanta Future Housing Shares
Housing Type
Apartment
Owner Attached
Small Lot
Large Lot
2004
19%
4%
15%
62%
2040
25%
15%
25%
35%
Source: 2003 data from American Housing Survey 2003. 2040 figures
derived from preference surveys.
Atlanta Demand in 2040
40% Attached (apartment, TH, condo, etc.)
25% Detached small/cluster/zero-lot
35% Conventional subdivision
65% = Traditional Urban Density @ transitsupportive density
2004 Supply & 2040 Demand
Housing Type 2004
Apartments
350
Owner Attach
65
Small Lot
135
Large Lot
1,250
Total
1,800
2040
925
555
925
1,295
3,700
Change
575
490
790
45
1,900
Figures in thousands and may not add due to rounding.
Source: 2004 data from American Housing Survey – Atlanta.
% Dif
165%
750%
585%
4%
106%
What Futurists Tell Us
Cheap energy is over.
Rising global competition for
construction materials.
Bio-medical advances will extend
lifetimes. Another 20 years added?
Wasteful Residential Energy
Georgia Energy Lost as % of Energy Used
Percent Residential Energy Lost
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
5-Y ear Periods 1970 to 2000
Source: Energy Information Administration 2006.
Invest Where the People Will Be
71% of elderly want transit options (AARP)
 50% of public want expanded transit investment
but only 25% want new roads (NAR)
 Large-scale home builders want transit options
 ULI, PriceWaterhouseCoopers, others 

Do not invest in suburban fringe
 Highest rates of return in redevelopment, infill


Understand changing preferences 
Affluent elderly who want urbane opportunities
 Young professions who delay child-rearing
 Some shifting preferences even in families with children

Planners Need To …
Know implications of demographic changes.
 Anticipate rising prices in energy, construction.
 Understand market responsiveness to
New Atlanta Metropolis development.
 Invent new financing tools to earn high
long-term gains in the New Atlanta
Metropolis investments despite short-term
low returns.
 Create win-win public-private partnerships.

THANK YOU!