"The End of Segregation..."

In the 1910's and 20's the majority of American Cities were a combination of gold encrusted night clubs and movie theaters around the corner from the filth and squaller of tenement houses, and down wind from the black soot of the shoe factories, etc.

Even today when you say the word "Pittsburgh", some people (who have never been there) think of city trapped underneath a black sky of fumes being belched by steel plants working over time. Well they have not made much steel in Pittsburgh, and to the best of my knowledge there are no more shoe factories in Chicago and the housing laws enacted in New York have pretty much wiped out the fire-trap apartment buildings of yesteryear. However, we all today still live with many of the zoning laws that were enacted in the 1930'2 and 1940's that were designed specifically to do one thing -> Segregate land uses in this County. Specifically, New York City in 1916 passed the first set of laws to regulate (city wide) what land owners could do on their land. These laws were called "Zoning Regulations", and in 1926 the United States Supreme Court upheld the right of all U.S. states to impose zoning laws on landowners. The specific court case was Village of Euclid, Ohio v. Ambler Realty Co. (Euclid v. Ambler), for you legal scholars: 272 U.S. 365 (1926).

Ever since Euclid v. Ambler, cities and counties all across America have enacted laws designed to do one thing: Segregate!

To keep the home owner from the factory and the warehouse from the apartments. And for an industrial society controlled by "profiteers", one can argue that this was probably a good thing.

But we are now 100 years later, and to the best of my knowledge, the only thing we "mass assemble" in America are Big Macs... "two all beef patties, special sauce, lettuce, cheese all on a sesame seed bun..."

So in reality, zoning codes designed around the America of the 1920's in many ways do not work for America of the 2020's. And many cities, especially big cities, have begun to realize this. In fact even smaller cities like Bowie, Maryland have come to realize that shopping, next to restaurants next to offices, next to housing (done right) is a "Good Thing"!

In the Washington DC area, the three regions of town with the highest land values (Alexandria, Bethesda and Georgetown), all have one thing in common, which accounts for them being the "Most Desirable" places to live using land values as an indicator: They all believe strongly in the concept of MIXED -USE. or the mixing of uses right next to, and in some cases right on top of, each other!

All Hail the END OF SEGREGATION AND THE Dawn of MIxed-Uses!!

Clearly, the grand idea of living, working and "playing" in the same neighborhood is coming of age, versus getting in the car and driving to everything...

Chicago is a great town to see the idea of "mixed-uses" in full swing. Even in the "suburban" parts, neighborhood shopping is close to housing, and small office buildings. With beautifully landscaped sidewalks connecting everything, and many pieces within an easy walking distance of each other.

As investors, this is a trend that we need to pay attention to. I understand that many of us our "opportunist" and will go where the deals are, but as we fine tune our craft, targeting areas that have either a strong-mixed use orientation, or are moving in that direction could prove to be very profitable, long term.