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CRE Dirty Words: Demystifying Density

A detail of glass office buildings

“Density” is a common enough word in the general American vernacular, but in commercial real estate, the concept has become contentious over the years.

At a basic level, the word refers to how many people can fit into a given building or neighborhood relative to the amount of land occupied. Growing cities like Denver and Austin are navigating increased density, particularly in their downtowns, and weighing the need for more space for people and businesses against the somewhat pervasive public perception that more people means more problems.

Last December, we at SideCar set out to debunk a few of commercial real estate’s “dirty words,” and density is one we’d like to break down.

Although density can be used to talk about office buildings as well, the term is usually used in the context of housing. Taller apartment buildings with lots of apartment units on small parcels of land are considered dense. Although it seems like a simple enough concept, the idea can be quite complicated – and fraught with strong emotions about its application in communities of all sizes.

As with most things, the reality is that issues surrounding density are not black and white. What looks like density to one person might look entirely different to someone else. For one person, adding a four-plex to a lot that used to house a single home might look like density, while for someone else, it’s a 30-story apartment complex. Density is a tool – and a word – best used with specificity and care.

Combating Negative Perception

Particularly in rapidly growing cities, a sudden influx of new people and activity can be jarring for long-time residents of a neighborhood, resulting in backlash against new developments.

As denser developments have come to growing cities, increased scrutiny has followed as negative effects such as traffic congestion, greater strain on public systems and higher prices have crept in. And in a post-COVID world, the very idea of putting hundreds of people in one building has lost some of its luster.

Using Density as a Tool for Good

In examining how density became a dirty word, our team came to think of density as less of a destination and more of a strategy. Used correctly, this strategy can be powerful. For one, there are a number of economies of scale that can be leveraged in denser environments. The concentration of businesses, goods and people in urban environments creates a critical mass that serves as an economic and cultural engine. Some of the most popular cities in the world to live in and to visit are also some of the densest – think Paris, New York City, Barcelona, Tokyo.

City planners have also long pointed to the connection between density and sustainability. Concentrating living centers around mass transit, for example, helps alleviate the need for single-occupancy vehicles. Creating more housing units in a rapidly growing cities like Denver and Austin, where housing availability has been a growing problem for years, can help ease shortages and bring rents down by shifting the supply-demand imbalance. Creating a concentrated talent pool in an area likewise helps attract companies that are searching for places to grow or relocate.

Quality in the Quantity

Looking at the friction that arises when it comes to density, the issue often lies not just with the idea of more people, but with the application.

Quality matters when it comes to adding density. Design matters.

Entire Facebook pages have been devoted to lampooning examples of poorly designed apartment complexes across Denver. When adding people means creating an eyesore, you’re not doing much to help the perception of density.

As city centers grapple with the ramifications of the pandemic and a new set of concerns about people being in close proximity to one another, the quality of the spaces we add to our cities will take on even greater significance.

If density is to rise from its current status as a third-rail topic, as planners, designers and city-builders, it’s vital to find ways to build trust with wary residents. Good design, applied with careful consideration for the present needs and wants of the community, the environment and the future is the first step.

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