A New Take on Karp

I'm beginning to think we're looking at this whole Karp thing the wrong way.

Our common assumption is that Karp wants to turn Newburyport into Nantucket. Hence the catchy Nantucket North moniker, the excellent Stephen Tait series, the chain store bans, the fears of "high-end homogenization," etc. and so on and etc.

The formula used to reach that conclusion is quite simple. Karp owns most of Nantucket. Karp owns most of Newburyport. Nantucket has a charming downtown and is surrounded by water. Newburyport has a charming downtown that's on the water. Nantucket is populated by somewhat self-important, occassionally high-income egomaniacs. Newburyport is....well....well, we are.

So it's easy to make the connection.

But you don't become a billionaire making easy connection. You do so by remaining several steps ahead of the competition and several years ahead of the curve. And that's what Karp is doing here.

What the hell am I talking about? Good question.

Just finished a very interesting article in this month's The Atlantic magazine about the rapid and eventual decline of Suburbia. In "The Next Slum," author Christopher B. Leinberger--an urban planning professor and a developer--argues that homeowner preference is shifting away from the notion of owning two-acres and a McMansion and back toward the city--or communities with all the walkable, commercial qualities of a big city.

Helloooo, Newburyport.

Leinberger says the shift is driving up prices in communities capable of offering homeowners the opportunity to walk to stores, restaurants, theaters and leave the care behind. Clearly, this high demand is driving up prices in attractive urban centers, but there's a trickle down benefit as well.

It’s crucial to note that these premiums have arisen not only in central cities, but also in suburban towns that have walkable urban centers offering a mix of residential and commercial development. For instance, luxury single-family homes in suburban Westchester County, just north of New York City, sell for $375 a square foot. A luxury condo in downtown White Plains, the county’s biggest suburban city, can cost you $750 a square foot. This same pattern can be seen in the suburbs of Detroit, or outside Seattle. People are being drawn to the convenience and culture of walkable urban neighborhoods across the country—even when those neighborhoods are small.

This is the important distinction between Newburyport and Nantucket. Nantucket will never be anything other than a tourist destination for the vast majority of its population. Newburyport, on the other hand, already is a very real community offering an attractive lifestyle to those of us who don't want to live in a town of subdivisions (which is exactly what I left when moving here.)

Karp clearly sees community with urban centers as the future. First, he shifted from building shopping malls to so-called "Lifestyle Centers" instead of shopping malls. Then, his projects evolved into those like the Pinehills and Westwood Station project where he's creating entire downtowns or even towns, in the case of Pinehills.

Rather than being modeled after Nantucket, Newburyport may be a model itelf. Karp may not be as interested in turning Newburyport into a high-end tourist destination as he is riding the wave of popular interest in communities with real downtown. That seems to be the bigger picture here. From the article:

Builders and developers tend to notice big price imbalances, and they are working to accommodate demand for urban living. New lofts and condo complexes have popped up all over many big cities. Suburban towns built in the 19th and early 20th centuries, featuring downtown street grids at their core, have seen a good deal of “in-filling” in recent years as well, with new condos and town houses, and renovated small-lot homes just outside their downtowns. And while urban construction may slow for a time because of the present housing bust, it will surely continue.

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What's this all mean? Well, like anything else we've written on Karp this is all conjecture and speculation. But perhaps we should stop worrying about what Nantucket has become and start recognizing what Newburyport is--the Future of Housing. We need to make improvemente here and there--such as public transportation--but this city sit smacks dam in the path of a demographic and socialogical tidal wave. Karp knows it, and we should work hard to make sure he doesn't mess it up.

By the way, what's the fate of the McMansions and other new developments? It isn't pretty. The article is definitely worth the 5 minutes required to read it.