March 22nd, 2013


President and COO, Sunset Development

Senior Managing Director, Tishman Speyer

President and CEO, San Francisco Planning and Urban Research Association

With Bay Area population forecast to increase to 8 or 9 million people, the region is grappling with where current and future residents will live and work. Commercial and residential real estate is thriving in San Francisco, but most of the region's 6 million residents don't live or work in an urban core. In the face of rising populations and growing climate concerns, can the region develop sustainably while remaining prosperous and resilient? 
“I love cities,” said Gabriel Metcalf, executive director of San Francisco Planning and Urban Research Association. He spoke of the energy, diversity, and excitement found in cities. However, he said, “The cities of the world on the coasts are facing an existential threat we are utterly unprepared to deal with.” Referring to climate change, he cautioned against building suburbia. “If we continue to build this country the way we have in a suburban format, there will be so much carbon from that way of life that the seas will rise and there will not be a San Francisco or a New York or a Los Angeles or a Seattle or a Shanghai or a London or a Cairo.” 
Metcalf sees the growing population as an opportunity to “retrofit past mistakes,” and he believes that San Francisco is doing a good job of that. In discussing what other cities are doing, he sees opportunities for Oakland. But he took Palo Alto to task for not allowing increased density, saying they must not understand climate change. “That the impact of allowing someone else to live in an apartment building—not even yourself having to live in it—but allowing it to be permitted so that other people could live—that is too great. I just have to believe that human nature is better than that. That, if they understood the impact of denying that, they would change their mind.”
Alex Mehran, CEO of Sunset Development, responded by saying, “we’ve been a suburban developer since the early ’50s, and in all our communities we’ve tried to mitigate some of the issues by creating locations with good land planning, sustainable initiatives, transit-oriented and other things to have a really high-quality location that can mitigate some of the issues that most suburban locations suffer from.” He spoke about creating nodes in suburbs that include jobs and housing and good schools. 
Carl Shannon, managing director at Tishman Speyer, said that they are looking at the cause of the problem, limiting the carbon, more than how to deal with the symptom. “While it is challenging economically, putting housing and jobs near each other, and creating really vibrant 24/7 communities, I think is, from a development perspective, one of the most important things we can do.” He sees a shift in demographics. Where, following WWII, people left cities for the suburbs, today people in their 20s and 30s are wanting to return to cities for a richer environment. 
Shannon spoke of the increasing density in office buildings, where there is no room for so many people to park. He applauds Google for bussing people from the city and added that Google, for one, is a huge proponent of the electrification of Caltrain because it’s critical for bringing people to work. He spoke of the value standpoint—a rent differentiation—for commercial real estate within walking distance from train stations. “You’re seeing it translate into rent and into value, which will incent the development community to do the right thing.”