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Outlook 2000 and beyond

by David Harlan Cade

Redeveloping America's cities and towns, mixing older 19th century principles of community with the needs of modern civilization, and finding a balance between new development and preserving open spaces presents unlimited opportunities for the profession of landscape architecture as we head into the next century. 

 

 

 

 

According to William H. Frey, PH.D., the biggest changes in households by age of householder will be in primarily three groups from 2000 - 2210: Early baby boomers (55-64); Late baby boomers (45-54); Young elderly (65-74). Frey predicts those born between1966 and 1975 (35-44 years on the chart) will not be a growing market in the first decade of the next century.

 

 

 

From 1990 to 1997, California, Texas, Florida, New York, New Jersey, and Illinois had the highest gains in population from new immigration to the U.S. (above). In contrast, the highest gains in population from net domestic migration took place in Washington, Oregon, Nevada, Arizona, Texas, Florida, Georgia, Tennessee and North Carolina (below). Source: William H. Frey

 

 

 

 

 

 

 

 

 

 

Currently, the city of Seattle, Washington (left) boasts one of the lowest office vacancy rates in the country.

 

 

 

 

 

In 1999, the retail sector has been particularly good in Sunbelt cities from Phoenix to Orlando, and in the core cities of Philadelphia, New York, Boston and Chicago.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"The school construction market is vibrant," said Norma Kacen, who works on the government relations staff of the National Education Association. Kacen reiterated the tremendous need for school construction and renovation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respondents in the Luntz Poll, reminded that dollars from Washington are limited, ranked their top priorities for how money dedicated to "building and maintaining park, forest, and recreation areas" could best be used, amoung seven possible selections. The key findings are shown on the graph below. Source: 1999 Luntz Poll

 

An overview of important trends, markets and philosophies shaping America's growth into the next millenium

"How do we want to grow? What kind of lifestyle do we want? How do you take what we've learned over the last 2000 years regarding human settlement and nature, and then incorporate that with the contemporary needs of society?" - Stephanie Bothwell, director of the Center for Livable Communites, American Institute of Architecture.

Outlook 2000 and beyond is a look some of the important trends, markets and philosophies shaping our growth as we head into the next century. Perhaps at no other time in our history has the role of Architects and Landscape Architects been of more profound importance to the development of an entire civilization than right now- in terms of providing leadership, new ideas and direction.

As you well know, how Architects and Landscape Architects approach growth and development as a profession will be greatly affected by the demographic profile of the U.S.. It is going to be one of the key players driving construction markets and the overall economy for at least the next 10 to 20 years. As baby boomers approach old age and head into retirement, as their children come into greater financial affluency and more of them start having children of their own, as new immigrant populations increasingly cluster in certain metropolitan areas, stimulating domestic migration to suburbs, other cities, towns and even states- all of these forces will be driving housing and related markets on a very fundamental level.

Housing in the 21st century

How America's population will change over the next two decades as the post millennium generation comes of age, and we become an older, knowledge-based society?

This was one of the many important questions addressed at the "Housing in the 21st Century" symposium in Washington D.C. this year. Sponsored by the Urban Land Institute and the Center for Housing Policy, the symposium featured many prestigious and knowledgeable speakers who discussed a wide range of trend topics from varying perspectives. One of those trend topics was demographics, markets and lifestyles.

Baby Boomers & New Immigrant Minorities

According to William H. Frey, Ph.D., Senior Fellow, Milken Institute and Center for Social and Demographic Analysis at the State University of New York at Albany, when "considering the myriad of forces that going to shape the demographic landscape of the United States over the next 10, 20, 30 years, probably two of the most important actors in this scenario will be: (1) the baby boomers and (2) the new immigrant minorities. These two groups are really going to have a large effect on the demographic dynamics of regions, metropolitan areas and neighborhoods. Both will have a huge impact on housing demand, housing preferences and related kinds of consumer behavior."

Frey predicts new immigrants will account for well over half of the 50 million people who will added to our population over the next 25 years, if one counts their children as well.

Household Changes

In the first decade of the next century, Frey predicts the biggest changes is households by age of householder will be in primarily three groups: (1) early baby boomers (2) late baby boomers (3) and the young elderly.

Early baby boomers, between the ages of 55 and 64, will have the largest gains, according to Frey. They will be making the transition from empty nesters to preretirees. Frey said "many of them will retire from their regular jobs, so to speak. But they won't retire completely. Recent trends show that retirement is something that will be phased in-through bridge jobs or part-time jobs. They are likely to make some moves during this period, although not a large number. They are certainly a force to be reckoned with in the first decade of the next century."

Late baby boomers, those born roughly between 1956 and 1965, will still be in their prime career and earning years. Frey predicts many of them will be looking to upgrade their housing and will have more freedom concerning migration and housing choices. Frey believes this is because, unlike previous generations, they will have fewer children and much more likely to be empty nesters.

The young elderly, between the ages of 65 and 74, will have the third largest gains. Frey said "they were fortunate to come into adulthood during the prosperous 1950's, when they had good jobs, including benefits and pensions. As parents of the baby boom generation, they have plenty of children to help them through their elderly years. While a smaller component of the household growth trend, this is a relatively lucky cohort of folks who are moving into elderhood in the first decade of the next century."

Changing Needs of Suburban Areas

According to Frey, "when we look at the current distribution of households between cities and suburbs, it becomes clear that the suburbs constitute the dominant place of residence among households above age 35.

Among the 45-64 year-old population, poised to enter their elderly years, couples with or without kids are especially likely to reside in the suburbs. The 'aging in place' of this group will likely take place in the suburbs. Now living in a dispersed suburban community, they will be in greater need of medical services and other kinds of social services. The reality is that very few of today's soon-to-be elderly cohorts will move back to the city. The challenge will be to accommodate them in a more dispersed suburban settlement system."

New Immigrant Minorities & Domestic Migration

Of all the new immigrant minorities in the first eight years of the 1990s, 2/3 of them went to ten metropolitan areas throughout the U.S.. In contrast, "most of these high-immigrant-attracting areas actually lost domestic migrants over 1990s. Among people moving within the U.S., more are leaving these areas than are moving into them (Houston & Dallas being two exceptions)" Frey said.

The reasons for these trends are simple. New immigrant populations tend to move where "they have friends and support systems to anchor them in a small number of immigrant gateway areas. Domestic migrants tend to move where the jobs are. During the 1990s, Atlanta and a lot of the Southeast, as well as the Rocky Mountain and western States, have been major gainers of domestic migrants."

Racial Generation Gap

In summary Frey talked about the emergence of what he calls "a racial generation gap." Frey said, "these trends also suggest very different demographic profiles for different regions of the country in terms of their race-ethnic makeup, as well as their age profiles. U.S. statistics-with respect to race-ethnicity and age, and their demands for housing and many other consumer items-will differ sharply across regions."

The "racial generation gap" and the idea it encapsulates emphasizes the "long-term implications of the aging baby boomers and the clustered nature of immigration," two important trends to take note of as we move into the 21st century.

North American Construction Forecast Conference

This years NACF conference, presented by the CMD Group and the National Institute of Building Sciences, once again assembled leading economists and analysts at the National Press Club in Washington D.C.. The outlook for 2000 and beyond was generally very good, with the economy and overall growth of the nation expected to be strong, although somewhat slower in the next few years.

Construction & Related Industries

"Good days are ahead for construction and related industries," said Bill Toal, chief economist for the Portland Cement Association. By the end of the year, total construction is expected to have increased 3.5% in 1999, followed by a small decline of 1% in the year 2000 due to a drop in residential construction. Then it should begin to rise again in 2001, according to Toal.

Toal expects most of the weakness in the residential market will be in the number of first time homebuyers, which he predicts to drop off about 8%. Toal expects housing starts to continue a downward trend from the 1.6 million units this year to 1.4 million units in 2000.

Toal pointed to several factors that could drive the markets fluctuation. Toal said, "inflation might heat up, which would cause the Fed-which has already raised rates twice-to raise them again. That could have some effect on lowering residential construction from the lofty levels that it is at today." The current inflation rate is at 2%, but has started to rise. The Asian basin countries are now stabilizing and petroleum prices have doubled.

Toal thought Y2K might also be a player. Then there are potential jolts to the world economy. Toal said to watch various sources of worldwide turmoil, including the current crisis in Russia, where many people may not make it through the winter.

On the flip side, Toal pointed out many things going good with the economy. For the second year in a row the country has had a federal budget surplus of approximately $130 billion, with State and local governments also running surpluses. "That gives us the wherewithal for the public works spending that we think will be coming down the road over the next couple years," Toal said.

Office and commercial construction is essentially in balance, with vacancy rates running about 9%. Even with rising interest rates and a slowing economy, commercial and office construction should maintain levels if not increase further, according to Toal.

Another factor contributing to the strength of the industry is technology. "Technology has helped hold down inflation and had kept our economy growing at a rate we haven't seen. It's one of the reasons we've had the longest expansion we've ever had. We as economists really don't know its full impact," Toal said.

Toal said school construction should improve because the school age population is on the upturn, meaning more new and renovated schools. Nonresidential as a whole should see a slight decline of 0.5% by the end of the 1999, but then increase 1% in 2000, before going up to a 3-4% growth, according to Toal.

Overall, public works construction should remain consistent and strong. Toal said it has increased 6% so far this year and is expected to rise another 5.5% next year. Toal explained that public works construction has held the strength for overall construction activity for about 20 years and should continue to do so.

Retail & Industrial Construction

Retail and industrial sectors are expected to dip slightly at the turn of the year, but should rebound and continue on a strong course throughout 2000, according to Hugh Kelly, chief economist of Landauer Associates. The dip, resulting from investor anxiety over Y2K, should only be temporary. Overall, Kelly predicts an economy characterized by a healthy, somewhat slower-growth over the next two years.

"We are halfway through the consumption phase of the expansion," Kelly said, "which should last another one to two years."

Kelly said the retail sector has been particularly good in Sunbelt cities from Phoenix to Orlando, and in the core cities of Philadelphia, New York, Boston and Chicago. As we enter the new year, Kelly expects the laggards will be cities in Connecticut, New Orleans and Pacific cities like Honolulu, Portland and San Diego, where supply has recently caught up with demand.

Kelly also addressed the impact of e-commerce on traditional retail construction. "Although retail commerce on the Internet is growing tremendously at about 50% per year, and by 2001 the figure will reach $30 billion, this is still less than 1% of retail sales nationally," Kelly said. "It will not affect retail construction any time soon."

As far as industrial construction, Kelly predicts the hotspots will be Seattle, Los Angeles, northern New Jersey and Denver. The laggards, Kelly predicts, will be Phoenix, Washington D.C., Orlando and Tampa.

Kelly also reported that investment in real estate, only amounting to $4 billion in the first quarter of 1999, bounced back to a record level of $7.5 billion in the second quarter-with $3.9 billion going into office buildings, $846 million into retail buildings and $479 million into industrial buildings.

"The strongest region in the quarter was along the Pacific, especially California," Kelly said. "It has led the nation in retail and industrial construction building investment for the last two years. Currently, it is the region of preferred investment."

Transportation Construction

TEA-21, the federal Transportation Equity Act for the 21st century, remains the big story for transportation construction, according to Bill Buechner, director of economics and regulatory affairs for the American Road and Transportation Builders Association (ARTBA). The latest chapter this year is RABA, or Revenue-Aligned Budget Authority, which is adding another 5% to highway allocations in the fiscal year 2000.

The reason for this, Buechner explained, is because revenues into the federal Highway Trust Fund exceeded projections. RABA is triggered when this happens and these surplus funds are distributed to the States for highway construction and maintenance in proportion to the States Highway Trust Fund.

"Because people are driving more and buying more sport-utility vehicles, which use more gallons per mile, they are buying more gasoline, which means that lots of money is pouring into the Highway Trust Fund," Buechner said.

In the short term, Buechner thinks this is a trend likely to continue, which means TEA-21 along with RABA would be offering the States an extra $28.4 billion in fiscal year 2000, $29.5 billion in fiscal year 2001, with gradual increases to $31.4 billion by the fiscal year 2004, when TEA-21 will be replaced by new legislation.

According to Buechner, given these assumptions, and depending on how quickly and thoroughly the State and local governments raise matching funds, the total national highway spending for fiscal year 2000 is expected to be $56.8 billion, followed by an increase to 59.9 billion in fiscal year 2001, with a gradual increases to $66.5 billion by the year 2004.

Buechner pointed out that these figures assume a RABA contribution each year and the States not raising 100% of matching funds. "To do so," Buechner said, "States might have to raise taxes," a scenario he thought generally unlikely.

As for mass transit, Buechner projected the federal government will be spending $5.8 billion in fiscal year 2000-$4.6 billion from the mass transit account and $1.2 billion from general funds. By the fiscal year 2004, Buechner expects these figures to have grown to $7.3 billion $5.8 billion from the mass transit fund and $1.5 billion from general funds.

As for airport construction, Buechner reported that it is unsettled because the FAA (Federal Aviation Administration) Reauthorization and Airport Improvement Program is caught up in Congress. The House proposed $2.45 billion for the program in fiscal year 2000, with an increase to $4 billion in fiscal year 2001, followed by gradual increases over the next three years. The Senate proposed $2.45 billion in fiscal year 2000, followed by small declines over the next two years.

Buechner pointed out that regardless of which version passes, the needs for existing airports are vast.

In summation, Buechner said 1999 was a very good year for highway construction, but 2000 would be better and in the years following, increases in construction spending are expected to rise, although more slowly. "Transit will increase year after year, and airport funding will depend on whether the legislation coming out of Congress will be closer to the House or the Senate version."

Veterans Affairs Construction

Radical changes are ahead for the Department of Veteran Affairs, according to Lloyd Siegel, director of the Service Delivery Office for the department. Part of the FEDCON 2000 construction forecast conference in Washington D.C., also sponsored by the CMG Group and the National Institute of Building Sciences, Siegel emphasized that the VA of today is nothing like the VA of the past or the future.

"In the future the VA faces competition from medical systems," Siegel said. "What veteran, if he had complete choice would pick a system where he can have his health care, but his wife and family members have to go to some other system? It does not make rational sense."

With this in mind, the veteran services organizations are working toward transitioning from a hospital-care business to a patient centered, community-based healthcare system. Currently, it has 22 Veterans Integrated Services networks or VISNs.

According to Siegel, the VA is doing more enhanced-use projects than any other federal agency and continues to produce "some of the most innovative buildings, using some of the most innovative processes." Siegel said the VA is doing a fair amount of new construction, including new ambulatory care additions such as a $20.8 million addition in Cleveland, Ohio and a $25.2 million addition in Tucson, Arizona.

Siegel also noted that the VA is becoming more proactive in its effort to control the quality of its facilities, issuing Design Alerts which inform architects of recurring problems so they do not happen again. In addition, the VA also issues Construction Alerts, pointing out major and sometimes life threatening problems that recur across the system.

U.S. Army Corp's Construction

Improving military housing and implementing environmental programs is a major focus for the U.S. Army Corps of Engineers' FY 2000 budget, according to Major General Milton Hunter, Deputy Commander for Military Programs. Also part of the FEDCON 2000 forecast conference, Hunter spoke candidly about the challenges of maintaining military facilities.

"When we're forced to chose between military readiness or facilities, facilities usually get short shrift. And when that happens decade after decade, the problem of keeping facilities up-to-date is exacerbated. Providing decent housing for soldiers, airmen, Marines and their families is a major goal of ours this year."

Hunter also noted that one of the Corps' biggest challenges lies in their historic properties. Once a facility is 50 years old, historic preservationists often get involved, making even basic modifications impossible. "Historic preservation is expensive," Hunter said, "but if repairs and maintenance were factored into the annual operations and maintenance, the facilities would stay in shape for a long time."

As far as the Corp's budget, $76 million has been earmarked for military housing, part of an overall FY 2000 military support program of $7.1 billion. The Corp's environmental program's FY 2000 budget is $1.8 billion and is divided into seven categories, including "super fund" work with the Environmental Protection Agency ($251 million), environmental quality ($200 million), and a Defense Environmental Restoration Account ($429 million) for work like restoring various ecosystems in the Florida Everglades.

Hunter also said the Corps is trying to find better ways to leverage private capital and speed up the delivery process, citing the recent awarding of a privitization project in Ft. Carson, Colorado. "It's an entire installation family housing project that was done under the Request for Proposal process, which is admittedly not popular. We have three more experimental projects coming up: Ft. Hood, Texas; Ft. Mead, Maryland; and Ft. Lewis, Washington, for which we're going to use the Request for Qualifications process."

School Construction

"Twenty-five thousand schools are in serious disrepair. Fifteen million students attend schools with substandard HVAC or air quality systems. The average U.S. school is 42 years old and the victim of obsolescence and deferred maintenance. One quarter of schools built before 1970 have had no renovation in 20 years," Kacen said.

According to a recent U.S. General Accounting Office report Kacen cited, $112 billion is needed to bring the nation's schools up to proper standards. Add to this the increasing student population and another $73 billion will be needed to build new public schools by 2008, which, according to Kacen, means a total of $200 billion is needed to meet current construction and renovation requirements.

Kacen reported that $16.3 billion in school construction will be completed this year-half for new construction, about one quarter for additions to existing schools and one quarter for renovation. An additional $17.2 billion in schools contracts will be started this year-half for new construction and as much as 28% for renovation.

Kacen finished by saying the backlog of deferred maintenance, and the demographics of the current surge in school-age population, guarantee a long-term positive demand for school construction.

Information from the National Education Association concurs with Kacen. According the them, "our nation's schools are in desperate need of repair and renovation. State and local schools face an enormous cost to repair existing schools and to build new schools to accommodate record numbers of students."

In the "Campaign to Rebuild America's Schools," the National Education Association reported a list of 12 states and localities that need an estimated $80 billion for school modernization.

· Alabama estimates $1.5 billion is needed for school modernization.

· California projects a five-year cost of $20.1 billion is needed for school modernization and $4 billion just to build new facilities to accommodate enrollment growth.

· Florida estimates a five-year cost of $11 billion for growth, major repair and maintenance needs, including $6.8 billion for expansion to accommodate enrollment growth.

· Illinois currently has approximately 60 facilities that are over 100 years old. Just to replace these facilities would cost $1 billion.

· Maine projects $637 million is needed for school construction and renovation.

· New York estimates $10.9 billion is needed for school modernization in New York City alone, including $2.2 billion for new construction.

· North Carolina projects a five-year cost of $6.2 billion is needed for new school construction and renovation of existing facilities.

· South Carolina estimates a need of $4 billion for modernization, including $1.8 billion for new school construction.

· Tennessee reports a need of $2.5 billion for school modernization.

· Texas reports a need of $9.1 billion for immediate new construction and repair needs, plus an additional $6.4 billion by the year 2003.

· Virginia reports a $6.3 billion school modernization need.

· Wyoming estimates a need of $563 million for school modernization.

Trails & Greenways Revolution

"If the last ten years teaches us anything, it is that trails and greenways-this new environmental, transportation, community-building product is, in fact, an absolute good," said David Burwell, president of the Rails-to-Trails Conservancy, in his keynote address at "Making the Connection II," the organizations International Conference h


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June 26, 2019, 11:56 am PDT

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