Tools and strategies for transition
NOTE: Sustainable development in Phoenix, like sustainable development around the country and the world, is very often uneconomic in competition with sprawl, unless we take steps to “unlock” the opportunities. That usually means identifying and addressing barriers, “monetizing externalities” (costs and benefits that are not usually priced into development) and finding other tools to make the development feasible and economically rewarding.
The following report discusses one such opportunity, the remarkable canals of Phoenix. Other than in rare exceptions (like the high-income section of Scottsdale shown in the photo) the hundreds of miles of these canals have remained almost entirely unused as a livable amenity for people. Instead they have only added to the many disruptions of the city’s fragmented pedestrian and biking network.
The City, and the canal manager, SRP, are trying to change this, and they are adding biking paths and other amenities. But much more needs to be done. This report was developed for the City of Phoenix by a class of the Arizona State University’s School of Geographical Science and Urban Planning. Students in the class helped to develop the main body of the report and also wrote detailed appendices, which are available at www.sustasis.net/pup361.htm
The City of Phoenix today has a remarkable asset: over 180 miles of irrigation canals within its city limits, offering significant potential for waterfront development. Many of these sites are well-located near existing jobs, services and other amenities, and many would likely feature a wide range of transportation choices, including walking, bike, light rail and bus, as well as shorter trips by car. Mixed infill development at these sites could make substantial contributions to jobs and economic development, more efficient use of existing infrastructure, appealing and livable new neighborhood centers, and more economically and environmentally sustainable land use.
Recognizing this opportunity, planners have offered a series of detailed proposals for development along the canals (e.g as documented in Ellin et al., 2008). Some areas have already been redeveloped, such as the Waterworks at Arizona Falls (a remarkable new community center). The adjacent community of Scottsdale has also successfully redeveloped a portion of the Arizona Canal just east of the Phoenix city limits, near Camelback Road.
At the same time, there are many barriers to canal redevelopment. The many owners, agencies and stakeholders along the canals have complex and often conflicting requirements, and ownership patterns are often fragmented. There is a chicken-and-egg problem with the creation of viable markets, which can be eaiser to create in greenfield conditions. The entitlement process itself can be complex and uncertain – and uncertainty in development translates into risk, which translates into cost.
More specifically, the complex structure of incentives and disincentives – regulatory, policy, technical, and so on – often makes it very challenging to redevelop these infill sites, and often favors exurban greenfield sites. Compounding these long-term challenges, there are severe short-term challenges from the current depressed real estate market, and availability of development capital. Both near term and long-term, if the bottom line is an unacceptable assurance of profit for an unacceptable level of cost and risk, projects will simply not be built.
Yet we believe the evidence shows that these barriers are not insurmountable. Tools do exist to unlock the potential of these and other development sites – tools that realign and increase incentives, reduce regulatory barriers, streamline entitlements, address technical requirements, and coordinate the generation of viable markets. But these tools must be coordinated with each other, within a kind of “toolkit” system. They must be made available in an easy to use, “plug and play” format. First – the scope of the present project – they need to be identified, along with the specific challenges they are meant to address.
We believe the present environment is an opportune time to identify and assemble these tools, for two reasons. First, the current downturn does provide some “breathing room” to prepare a more orderly planning process, including any needed regulatory changes, site assembly, and other preparations. Second, some of these tools will still be useful in the short term, in encouraging smaller-scale, “bottom-up” growth along the canal, which may already be viable in a more modest form in some cases. This growth can help to catalyze future stages of growth in a more incremental, orderly, well-adapted pattern.
Engagement by the City of Phoenix
In light of these issues, the authors of the present report were engaged by Senior Planner Carol Johnson of the City of Phoenix to complete a report on the status of canalscape development, with a specific focus on proposed design guidelines, and to offer recommendations. The authors committed to complete the following tasks, and report the results to the City:
previous work completed on “canalscapes” and make preliminary
identification of implementation issues and resources.
with canal-area stakeholders, and/or representative groups of them,
and evaluate their assessment of the Canalscape proposals. What do
they like? Not like? Visually? Aesthetically? Functionally?
the largest concerns over implementation. For example, funding
needs, fragmentation of properties, easement and rights issues,
agency coordination issues, etc.
the preferences and concerns relating to possible design standards.
How do we promote synergies that lead to mutual economic benefits,
without compromising individual initiative and ability to exploit
identify concepts, tools and methodologies that might best meet the
needs and concerns identified.
For the first phase of work, the team reviewed the previous canal development proposals, and identified opportunities and challenges within them. Each student researcher selected a particular topic, representing a challenge or opportunity, and conducted research on that topic. At the same time, each student researcher identified stakeholders that would likely provide the most relevant feedback on that area of research.
Next, the team developed a questionnaire, a sample of which is included in the Appendix. The questionnaire asked stakeholders about their general understanding of the canal development opportunities, their perceptions of waterfront development relative to other US cities, and their perception of challenges. Then they were asked to comment in more detail on the existing proposals – not only the aesthetic issues, but other issues of implementation regarding technical requirements, costs, and related issues.
The stakeholders were then asked to comment on existing and proposed City of Phoenix design standards and guidelines for the canal areas, as well as other implementation concerns. Finally, each student investigator asked specific questions about their own area of research. Stakeholders were also free to make additional comments, which were recorded.
We have compiled a summary of the questionnaire results herein, and the original questionnaires are also archived for future research. Students discuss their own area of research in the appendices, and there is additional discussion of the questionnaire results there.
Finally, the research team convened to develop its conclusions and recommendations, as reflected in this report, and in a presentation made to the City.
Findings: The Nature of the Barriers on the Phoenix Canals
Many of the barriers we have identified are common to any infill project in almost any city. Some of these barriers are more challenging in the Phoenix region, in part because the region has developed a major portion of its economy around edge or “greenfield” development, and existing tools, skills and resources are still geared largely to support this class of development. By contrast, tools to support infill development have limited availability or, where they do exist, limited functionality in the present environment.
The barriers we identified are summarized below. These include familiar barriers for any infill project, as well as particular barriers for the Phoneix canal areas.
land ownership and control patterns. Several
large agencies and jurisdictions control much of the land along or
adjacent to the canals, including SRP, APS and the City of Phoenix.
They present a complex and sometimes conflicting mix of regluations
and requirements for use of their sites or sites adjacent to them.
(These requirements are logical and necessary, but in combination
they have the effect of limiting coordinated land use changes.)
Other owners may have sites that are too small or too fragmented to
present workable sites.
mixed-use and infill development, made more complicated because of
the mutiple agencies and jurisdictions, with the result that this
form of development is likely to be much slower and more costly than
Uncertainty in the entitlement process, in part because of the regulatory
complexity, and also because of high scrutiny and potential
opposition by stakeholders. Meanwhile, the public process does not
yet provide substantial support for more walkable mixed-use, compact
cost of higher-density projects,
especially when structured parking is needed to fulfill parking
requirements or expectations.
advantages for suburban edge development relative to infill development. These include natural advantages
(such as lower development costs) and artificial advantages (such as
lower permit fees and other effective subsidies). This has the
effect of making infill development relatively uncompetitive, and
more difficult to finance and sell.
and egg” problem of weak markets in areas where amenities have not yet been developed (e.g. lack of
groceries, etc) and where there are negative aspects of amenities
within existing neighborhoods (e.g. long stretches of empty canals,
And there is one other factor that is very important at the present time, but may become less important as financial markets stabilize:
of capital for larger,
more conventional development projects. There are notable
exceptions in student housing and multi-family rental, but other
markets are likely to remain weak for the foreseeable future.
Overcoming the Barriers: Changing the Structure of Incentives and Disincentives
To understand the tools and strategies needed, we should begin by noting that every act of development occurs within a context of incentives and disincentives. These, and all the other resources and requirements, play a fundamental role in determining how much a development costs, in relation to how much it is rewarded. Since no developer is in business to lose money, if we want to see good development in a given area, we need to do what we can to ensure that the rules, requirements and incentives work to make the project financially rewarding.
Moreover, these rules, requirements and incentives all interact together to determine whether the ultimate outcome is financially rewarding. It may not matter if a developer wants to use a given incentive, if another rule or condition prohibits its use. This overall structure can be likened to a computer’s “operating system” – the specific “software,” or in this case the development program, has to operate within the overall set of rules, standards and incentives. So the parts of this “operating system” include all the laws, rules, fees, standards, and all other parameters that govern what can be done and where, and for what cost and reward.
For most projects, the market itself provides perhaps the most obvious set of incentives and disincentives – namely, whether buyers (or renters) are prepared to pay a price sufficient to cover all the costs of development, plus a competitive profit. The more they are willing to pay above the threshold of profitability, the more there is an incentive for that development to occur. Conversely, if they are not willing to pay enough to make a minimum threshold project, then developers say the project “doesn’t pencil” – and in most cases, it simply doesn’t get built.
But market behavior does not arise in a vacuum. Buyers have their own set of incentives and disincentives, which often depend on conditions set by the public sector. Construction and expansion of public infrastructure (roads, water, etc) is clearly a major incentive to development, and a disincentive when that infrastructure becomes inadequate. Other sources of buyer incentives and disincentives include the cost of resources and services, the structure of tax policy, and the “pricing signals” of such services as toll roads and parking charges.
Buyers also have non-economic incentives, of course, including neighborhood aesthetic appeal, amenities, convenience, attractiveness, and peer-group desirability. These in turn are sensitive to public investments in area services and amenities, and the perceived quality and effort made by the public sector in things like schools, parks, streetscapes, public transportation and other amenities. Many of these conditions develop slowly, and are difficult (and usually expensive) to change quickly.
There are also important incentives and disincentives in the cost of development itself. This includes the cost of planning and entitlement, the cost of regulatory requirements, the cost and complexity of construction, and – one of the most significant for the public sector – the cost structure of development fees, including infrastructure system development charges, which are in theory supposed to reimburse the public sector for the costs of development that it bears. But these fees are often consciously structured in a way that incentivizes suburban edge development, which is intended to generate new tax base and additional economic activity. The regulatory and entitlement process is often also greatly streamlined in smaller suburban jurisdictions, adding more powerful incentives to this form of development.
But there is a growing concern that these incentives are, in effect, subsidizing development today by passing costs off to tomorrow’s taxpayers and citizens, who will have to bear the costs of infrastructure operation and repair, as well as rising costs of energy and water, the health impact of air pollution, and other such “externalities” (costs passed on to others). There is an analogy to the unsustainable debt sutiation the country has found itself in – indeed, the 2008 “mortgage meltdown” began in these very exurban communities, as rising energy prices and other returning “externalities” pushed many homeowners into default.
As a result, many people have become interested in the advantages of infill development in lowering future costs to taxpayers and citizens of development. Most people support at least a viable choice for buyers between exurban car-dependent communities, and infill communities with greater transportation choice. But the regional economy has historically been heavily dependent on exurban and greenfield development, along with its system of standards, rules, expectations, fees, and other elements of the regional development “operating system.” Such systems are very slow to change, and they often exhibit a condition known as “lock-in” – the incentives tend to reinforce and to perpetuate the same patterns of activity.
Therefore it is not a surprise to see that while many infill sites stand vacant, including many adjacent to the canals, the overwhelming volume of development activity in the Phoenix region remains at the suburban edge. This pattern of uneven regional development reflects an uneven playing field when it comes to incentives. If the public sector wants to see a more spatially efficient form of development that makes greater use of existing inner-city resoures, and likely lowers worrisome externality costs – which seem likely to hit future taxpayers and citizens especially hard – then it must examine the steps needed to re-balance the equation of incentives and disincentives.
Therefore we can express the steps that the public sector can take, in partnership with private and NGO entities, to help overcome the infill development barriers previously summarized:
to overcome fragmented land ownership patterns by
creating partnerships that can identify and assemble “opportunity
sites.” Provide incentives for owners to collaborate with each
other and with other developers to create coordinated development.
Implement codes and other incentives that provide maximum
flexibility in use, while assuring maximum coordination of form.
(We will have more to say about this important issue below.)
and coordinate regulations and requirements for
mixed-use and infill development, by establishing a set of unified
and coordinated requirements, and by offering pre-approved types
that overcome regulatory barriers.
certainty in the
entitlement process by providing a clear framework, and clear,
workable regulatory requirements such as zoning codes. Provide a
more formalized process for public and stakeholder involvement that
increases neighborhood confidence in the quality of the result.
the relative cost of higher-density projects,
by easing parking requirements and other major drivers of cost.
Work to reduce cost through economies of standardization in the
the playing field relative to suburban edge development by eliminating hidden subsidies and requiring all development to pay
its true cost to taxpayers and citizens. Examine fees and other
“pricing signals,” and consider tools such as “feebates” to
equalize incentives for infill development. Consider targeted
public investment catalytic projects across a range of scales (a few
large, many small, etc.) to promote additional growth.
the “chicken and egg” problem of weak markets by identifying areas with weak amenities (e.g. isolated canal areas)
and by incentivizing needed amenities that can be provided
reasonably (e.g. activities, amenities, safety measures along the
canals). Build on existing resources to create desirable amenities,
if necessary through modest means (e.g. food vendors, artist
studios, galleries, etc).
for lack of capital for
larger, more conventional development projects, by incentivizing
smaller, pay-as-you-go development, and by preparing sites for
incremental development as capital becomes more available.
All of these issues are interrelated, and the specific tools developed to address them must also be interrelated and coordinated. Moreover, they must be made available within a coordinated planning framework that is sensitive to the varying requirements of different development sites.
Specific Stakeholder Feedback
As noted, we interviewed a range of stakeholders, including representatives of government agencies, private developers, area businesses, NGOs and private citizens. Our findings are summarized at the end of the Appendix section (Appendix 30). We can summarize them here:
is generally strong support for the concept of canal-oriented
development and its potential contribution to quality of life and
sustainable development within the Phoenix region. But there is
also notable skepticism about whether canal redevelopment will move
beyond “pretty plans” into reality.
there is awareness of the Canalscape project specifically – which
is highest among already involved area stakeholders – there is
generally good support for these proposals. However, there is
limited awareness among members of the general public.
members of the general public expressed concerns about
gentrification, congestion and other possible problems from
development. Others expressed concerns about existing levels of
crime and safety, parking requirements,
of key agencies expressed willingness to work through existing
regulations and requirements to achieve innovative new developments.
there is also notable concern from these agencies that all parties
must understand the realities, and find ways to work through them.
is notable concern from key agency stakeholders that specific design
standards may be premature at this time, since more basic issues of
process and access must be addressed first.
general stakeholders, there was uncertainty about the implications
of proposed design standards,
Conclusions and Recommendations
A number of key conclusions loom large in our recommendations. First, perhaps most significant, Jim Duncan, Senior Analyst for SRP, reported to us in his stakeholder interview that any structures that front onto the canals would need to coordinate with them regarding access and use, and SRP would not likely favor a city-administered form-based code. Clearly this issue should be explored further to clarify and identify a consensus approach.
The City does provide an informational document outlining the approval process for canal-oriented development, and referring to required SRP reviews (City of Phoenix, 2011). But given the complexity of these and other highly technical requirements, and the goal of encouraging good development in a challenging economic environment, we suggest that the City should consider a more pro-active approach.
We suggest that the City consider partnering with SRP to develop a unified approach to development along the canal, offering a resource for coordinated design, and including education and outreach. As an alternative to a complex set of design standards or guidelines, the also city might offer streamlined entitlement paths, such as a set of agreed-upon design models that could be quickly approved.
Recommendation One: Consider forming a partnership, led by the City and SRP (and other key stakeholders if appropriate) to streamline and coordinate development along the canal. Consider creating a joint office to take this forward. Partner with other stakeholders to forge a set of models and tools that can overcome the barriers to development.
Second, many of the barriers that need to be overcome can be done so best through pilot projects, where the complex mix of issues can be resolved under actual conditions, and stakeholders can view and evaluate the results. These projects will also serve to catalyze other developments around them. Therefore:
Recommendation Two: Partner with willing developers on a series of small (or larger in some cases, if resources permit) pilot projects that will serve as “research and development” projects for both canal development specifically, and infill development more generally.
Third, the surrounding community has many unmet needs, but also has untapped capacity to engage in smaller-scale development and related economic activity. They have a right to be engaged in the public provess for development within their own community, of course. Moreover, they represent a vital asset in the development process, not only as potentially informed supporters of projects, but as economic development agents in their own right. Therefore:
Recommendation Three: Create an ongoing stakeholder engagement process that will not only build involvement and support for development, but tap the capacity of the community to generate its own development at a range of scales. This may take the form of a community design center or other resource “clearinghouse”.
Fourth, the Phoenix area offers good examples of older models that incorporate many coordinated solutions to mixed-use, livable, sustainable development. In some cases, these models can be easily developed, adapted and personalized — a key need for small developers. Most important, they can greatly simplify otherwise complex development models with too many “moving parts.” This can mean the difference between a successful project, and one that succumbs to a too-complex technical and regulatory process. Therefore:
Recommendation Four: Identify and make available a series of design prototypes, covering a range of issues and opportunities on the canalscape. Use existing simplified types, and develop them as pre-approved or streamlined models that can be easily personalized, using decorative artwork and other inexpensive custom touches.
Fifth, in an environment of daunting barriers to infill development in general, and canalscape development in particular, we believe that any regulatory changes must be developed very carefully so as to convey more incentives than disincentives. As noted, the City of Phoenix is now considering elements of “form-based coding” – a kind of zoning code that is more liberal on use but more prescriptive on form, especially at the public frontage. But we believe that any such innovation must provide three essential benefits: one, greater reulatory certainty; two, greater flexibility in responding to market conditions; and three, greater likelihood of increased property values as the result of coordinated area development.
The last point bears some discussion. Many property owners are resistant to the proposition that zoning codes will restrict what they can do with their property. But if the ingredients above are met, then they will likely enjoy a greater opportunity to develop a successful project at maximum value – or, if they so choose, to sell to others who will do so. Studies show clearly that buyers will pay more for an individual property if it is located in an area with coordinated, attractive development – precisely the goal of form-based codes.
However, we suggest that such coding be developed carefully, with as straightforward and simple a set of regulations as possible. Rather than a long, complex set of provisions, the code may perhaps combine simplified types (see Recommendation Four) and more flexible “packaged” design options. (For example, see the “pattern language” proposal included in a separate research report prepared for light rail infill, prepared as part of the Phoenix Urban Research Lab, and titled “Unlocking Development Potential on the Phoenix Light Rail Line: A ‘Toolkit’ Approach.” Therefore:
Recommendation Five: Develop code reform carefully, and in a way that serves to remove development barriers rather than creating additional ones. Consider using simpler, coordinated types and flexible “design packages,” rather than extensive regulatory language.
Sixth, as the title of this report suggests, and as discussed earlier, we have concluded that tools are needed to overcome the barriers to good development, and that there is a need to coordinate such tools into “toolkits” that allow them to be used easily and in combination – what has been termed “plug and play.” Such resources need to be made available to a range of potential developers across a range of project sizes and types.
Many of these tools and toolkits already exist – for example, form-based design codes – but there is still a need to coordinate them, and adapt them to the particular requirements of canal-oriented development. In other cases, there may be a need for new tools and approaches, based on new opportunities or challenges.
We have done research on a number of such tools, and sought evaluation from our representative stakeholders. The summary reports on these elements and their feedback can be found in the Appendix. While this is by no means an exhaustive list of the resources needed, we hope it provides a first step in demonstrating concrete tools and how they might function to facilitate good development on the canal.
Such resources might be made available through a user-friendly Design Center, with both a physical office and a web presence. We suggest this is important to provide access to the tools and skill to use them, as well as capacity to develop in a peer-to-peer, capacity-building format. (In fact some of the tools are focused specifically on that goal.)
This initial list of tools and toolkits is as follows (listed alphabetically by researcher):
Heat Island Reduction and Albedo Enhancement Tools (Alex Ageno)
Streets Tools (Amanda Arifiana)
Dwelling and Live Work Tools (Shaina Begay)
Design Checklist (Jonvieve Bryant)
Coordination Strategy (Stephanie Bubenheim)
Food Tools (Paul Carriere)
and Security Design Toolkit (De’Ondre Charles)
strategy toolkit (Chelsea Comfort)
Ownership Opportunity Diagnostic Tools (Ryan Fulmer)
Finance Tools (Brandon Glimcher)
Resource Center Tools (Drew Hanley)
Vending Tools (Tino Hernandez)
Visualization Tools (Jaycen Horton)
Incentive Tools (Daniel Johnson)
Network Planning Tools (Nick Johnson)
Screen Tools (Will Langton)
Feature Design Models (Ryan McCann)
Cart Options (Josh McKenzie)
patterns (Joey Meisenheimer)
Device Toolkit (Kent Nielsen)
and Non-Allergenic Plants (Matthew Pechous)
engagement tools (Mia Sanchez)
Readiness Diagnostic Tools (Joey Sefcik)
development checklist (Daniel Sheldon)
Community Design (Taylor Shell)
Food Venues (Jeremy Thompson)
Retrofit Checklist (Ryan Winkle)
Housing Strategy Tools (John Zaimes)
Recommendation Six: Develop an evolving “toolkit” of tools that are adapted to overcoming the barriers and exploiting the opportunities of canal-oriented development. Make these tools available through a coordinated resource that combines a physical office and a web-based collection of resources.
We note that much more remains to be done to change the “rules of the game” and to provide resources to facilitate good development along the canals and in adjacent areas. We hope that this outline suggests a useful outline of the concrete opportunity ahead, to move from a promising set of good design ideas, to a new era of thriving, livable canal-oriented developments.
Ellin, Nan et al. (2009) “Canalscape: An authentic and sustainable desert urbanism for metro Phoenix.” Accessed November 26, 2011 at http://canalscape.org/exhibit-publication/publication/
City of Phoenix Zoning Code (Canal Design Guidelines) (1996). Section 507 Tab A. http://www.public.asu.edu/~safeldma/Canalscape/COPCanalZoning.pdf Accessed November 28, 2011.
Salt River Project (2011). Canal Multiple Use. Information website. http://www.srpnet.com/water/canals/use.aspx. Accessed November 28, 2011.
City of Phoenix (2011). Process for Review of Projects Utilizing SRP Canal Bank Right of Way. Informational document. http://phoenix.gov/planning/rezfrm25.pdf Accessed November 28, 2011.