ShareBuffalo Wild Wings did the city of Chattanooga an unintended favor when it built one of its restaurants at a choice downtown location.
It was the latest in a series of underwhelming projects gnawing at the development potential of prime downtown real estate — and the last straw for folks who worried that low-value development was consuming the heart of their city.
“As soon as that building went up, people were calling saying, ‘Why did you let this happen?’ Well, because our [zoning code] says it’s OK,” said Karen Hundt, director of the Community Design Group in the Chattanooga-Hamilton County Regional Planning Agency.
For many years the city relied on “an advice and persuasion mode” to convince developers to follow good urban design practices like placing buildings near the street and moving parking to the rear even though the zoning code didn’t mandate it, Hundt said.
Then times changed. “As we saw more national chains moving in, they knew they didn’t have to go along with what we asked,” Hundt said. “As long as they were following our code, they were OK.”
But many Chattanoogans weren’t OK with the quality of development that occurred as a result — single-story/single-use buildings surrounded by parking lots like those found in suburbia.
“The perception was the development we were getting wasn’t very high value,” Hundt said. “Not to pick on a particular company, but Buffalo Wild Wings was the example everyone held up.”
What exactly is high-value development? It’s developmentthat maximizes the potential of a piece of property to welcome growth, generate tax revenues, drive economic activity and enhance quality of life — all in conjunction with the infrastructure required to support it.
If that’s what Chattanooga wanted, something had to change. And it was the old zoning code with its indifference response to low-value development. “A lot of us realized ... that it wasn’t generating the kind of taxes, for instance, that we should be getting out of new development,” Hundt said.
In 2016, the city replaced its old zoning code with a form-based code covering downtown and several surrounding neighborhoods.
The old code — like most conventional codes — focused on separating uses. Certain types of residential here, but not over there. Certain types of commercial here, but not over there.
“Conventional zoning was always a tool of prevention,” said Tony Perez, director of form-based coding at Opticos Design, a consulting firm based in Berkeley, Calif. “It was never a tool made to generate anything. Form-based codes are exactly the opposite.”
Form-based codes focus on the physical composition of development — the relationship between building facades and the public realm, the form and mass of buildings in relation to one another and the scale and types of streets and blocks. They still regulate use, but provide leeway to combine housing, shopping, restaurants and offices in the same neighborhood and even the same building.
This focus on the physical composition of development fosters the kind of vibrant and walkable places that are currently in high demand — especially among young professionals, said Brandon Palanker, a master developer based in Dallas.
“At the end of the day, this is really about place-based economic development,” Palanker said. “There is a whole cohort of the employment base that will choose where to live and then they will go find a job.”
Cities that don’t satisfy this demand for lively urban environments will “be at a disadvantage in attracting a talented workforce and the companies that employ them,” he said. Form-based codes spur investment in high-value development by — among other things — ensuring that high-value development is the rule and not the exception across a wide area.
“They give me, as a property owner, a sense of confidence that the properties around me will be good development and good form ... as opposed to someone coming in and doing a suburban-style development that would detract from my value,” says Palanker.
Chattanooga sought “intensity and density” in its formbased code, Hundt said. The code doesn’t just allow taller buildings, it requires them in certain areas. Under the new code, for example, Buffalo Wild Wings would have had to be at least two stories tall. In other locations, buildings must be at least three or four stories tall.
The code drastically reduces building setbacks — in some areas to zero — although it allows for variances to use a certain amount of frontage for outdoor dining. Parking is pushed to the rear or to the side if screened with landscaping. And the new code restores the flexibility that existed before conventional zoning by allowing a wider mix of uses.
“We have buildings in our downtown that are over 100 years old,” Hundt said. “The same building that has been industrial, housing, and warehousing, maybe a restaurant in the future. The uses change so it doesn’t make sense to say you can only have this one use forever and ever.”
While a number of new projects are in the pipeline, most of the development completed since 2016 was already entitled under the old code. “I would say that while some of [them] didn’t technically get permitted under the formbased code, they pretty much fit in,” Hundt said.
While high-value development is possible under conventional codes, those codes aren’t very predictable about the form of what they produce, Perez said. “They are designed to stop things. Whatever isn’t stopped gets allowed by definition.”
According to Jeffrey McVay, manager of Downtown Transformation for the city of Mesa, Ariz., in 2012, Mesa adopted a form-based code for its downtown in preparation for the pending completion of a light-rail link. “The idea was to create ... a pedestrian-oriented downtown that would help us urbanize and bring in the type of development you would expect in the downtown of a city of 500,000 people,” he said.
Light rail, which arrived in 2015, was bound to spur development with or without a form-based code, McVay said, but the city would have had less control without it.
“The prescriptive nature of the form-based code makes us pretty confident ... that we’re going to get development that is consistent with our vision for downtown,” he said. Right now, $500 million worth of form-based code development is in various stages of planning and construction.
Mesa’s form-based code doesn’t replace the old code, but provides an alternative that can save developers time and money.
Conventional codes require public review and political approval for each individual project. That adds costly delays and greater risk to the approval process — especially if rezones or variances are needed for development that mixes uses, not separates them.
Form-based codes allow developments to proceed “by right” through a streamlined approval process because all of the design requirements are baked into the code upfront and — if done correctly — reflect the community’s vision.
“It’s no longer this constant mother-may-I process,” said John Baucke, a master developer and form-based code consultant who is president of New Urban Realty Advisors in Santa Barbara, Calif. “Every time you go through that process, the risk just goes up because it’s more time, more money and lack of surety.”
But form-based codes aren’t foolproof. To truly succeed, a form-based code must be the product of extensive public involvement.
“It has to be [adopted] through an open process,” Baucke said. “I’ve seen form-based codes be proposed that were [developer] driven and not through a public process ... and that can be a problem if there isn’t the political buy-in of the community and the politicians and the staff.”
In 2009, Miami, Fla., adopted a form-based code that covers the entire community. The city’s stunning oceanfront has always attracted high-value development, but neighborhoods a few blocks from the beach and old industrial areas are sharing in some of that sugar because of the form-based code, said Joseph Eisenberg, a planner with the city of Miami.
Form-based codes give developers the flexibility to change a building’s use to meet changing demand without a rezone or variance — a tremendous development incentive that adds great value compared to a building that’s shackled to a single use.
“Because our code is so focused on scale and much more permissive on use, a developer has the opportunity to switch uses even after getting a building permit,” Eisenberg said. “It’s made our real estate market extremely adaptive and extremely responsive to even the slightest change in market demand.”
If Amazon had chosen to come to Miami, for example, there would have been no need to go through a series of zoning changes to bring in more office space, Eisenberg said. Ditto for other types of uses.
“Most of the property that [developers] would be interested in can accommodate high-intensity residential, hotel, office, commercial, education — even three or four uses in the same building,” he said.
Much of the relationship between form-based codes and high-value development boils down to the law of supply and demand, said Marta Goldsmith, director, Form-Based Codes Institute, Smart Growth America.
Form-based codes are tailor-made to create the kind of vibrant and walkable places that many people want, but there’s still a scarcity of such places, creating a price premium. “That adds value to property in areas that are regulated by form-based codes,” Goldsmith said.
So far, however, most of the evidence that form-based codes drive high-value development is anecdotal. “There’s been a lot of conversation about it, but what there hasn’t been is ... research that really measures the economic impact of form-based codes,” she said.
Smart Growth America hopes to conduct a formal study that will compare two places with similar socio-economic profiles and similar histories of suburban strip development. The only difference: one has adopted form-based codes and the other hasn’t.
The study will look at their economic performance over time using tax revenues and property values as a yardstick. Goldsmith is confident the outcome will validate the value of form-based codes. “I’m anxious to see the numbers,” she said.