The 19 Building Types That Caused the Recession

Atlantic City Place Matters
By Emily  Badger
25 October 2011


"Among his favorite examples of all the standard real-estate products built ad nauseum across the en they’re most likely to be thinking about what to buy for dinner.

It has a major, 50,000 to 70,000 square-foot supermarket on one end and a drug store with drive-through on the other, with national and regional chain stores, maybe a Hallmark and a Starbucks in between. The parking lot contains four or five spaces per thousand square-feet of retail. There is, in theory, a sidewalk, although no one is expected to use it. Every shop is designed to be seen by potential customers passing by at 45 mph. And – with the exception of a few last-minute regionally specific touches for art-deco paint schemes or Mediterranean roof tiles – this L-shaped shopping center looks the same whether you’re pulling into it from Denver or Orlando.
“Everything is about that micro-second that you’re trying to catch the driver’s eye,” Leinberger says, “and say ‘hey, I’m a Supermarket! Pull in here!’”
Leinberger, an urban land-use strategist and professor at the University of Michigan, includes the Grocery Anchored Neighborhood Center on his list of the 19 standard real estate product types dominant in post-war America. Also on the list: suburban detached starter homes, big-box anchored power centers, multi-tenant bulk warehousing and self-storage facilities. All of these products are designed for drivable suburban communities. They reflect almost exclusively what investors have been willing to finance for the last 50 years. And as construction picks back up following the recession, Leinberger says we'll need to get away from every single one of them.
“Financiers like to finance commodities,” Leinberger says. “Financiers don’t like to finance one-of-a-kind pioneering, never-seen-before kind of things, whether it be real estate or whether it be Apple computers.”
These real estate models all coalesced around suburban growth, and the Grocery Anchored Neighborhood Center reflects one of the odder side effects: it helped push the storage of food and goods from retail shelves into our basement freezers and walk-in pantries. “This is no conspiracy,” Leinberger says. “People love big boxes.” And he means both big-box stores and all the things we like to bring home from them.
But we overbuilt these 19 models, he says.
“We built the wrong product in the wrong location, and nobody wants it any more,” he says. “That’s the reason for the housing crisis, and therefore the mortgage crisis, and therefore the Great Recession.”
Most people get that the housing collapse precipitated the recession. But Leinberger laments that we haven’t been talking about which housing, or which real estate products. Now the downturn – and the accompanying construction hiatus – may give developers and their backers time to think about this."
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