Deciding to become a developer can be attractive for some folks in public service

angry mob
Angry Planning Mob at a Planning Commission Meeting

 

At every One Day Workshops I do with IncDev,  there are always a few folks attending from the planning staffs of communities in the region.   We also see elected officials and planning commissioners taking these classes.  Often these folks are there looking for insight and techniques on how to craft policies and zoning ordinances that will encourage incremental development (or at least level the playing field for small operators).

Talking with them one on one, I found that some plan on starting small projects of their own as a side hustle while they keep their current day jobs.  I am curious to see how these project go and what they learn in the process.  While they have a lot of insight into what can be accomplished with variances and all manner of discretionary approvals, they also know how uncertain doing anything that is not a straightforward as-of-right project can be.  That understanding leads most of them to look at simple as-of-right deals, especially if they are looking to build something in the municipality they serve.

I think that recovering elected officials, planning commissioners and municipal planners would make good small developers. They have already spent years being insulted and condemned by the wide range of poorly-informed citizens and colleagues pictured above.  So they may already have a thick skin, a good thing in a small developer. They also have developed the ability to suspend disbelief and critical thinking so that they can operate effectively within some rather arcane and contradictory rules. They know all too well that planning policy and implementation are never about objective facts and municipal math, but instead are always awash in the feelings of people fearful of change and contemptuous of potential neighbors.  That knowledge will protect them from being overly idealistic of hopeful about the planning and development process.

Elected officials and public planning staffers have been stagehands and bit players in the rather elaborate Kabuki theatre production of Planning and Development in the US. When they leave public service or a staff gig they are ready for more substantial and meaningful roles.

Helping Your City Go Broke When You Know Better is Borderline Criminal

18 x 60 shot gun cottage for Columbus

Do you know where your town comes up with the money needed to repave streets, expand the sewer plant, pay cops, firefighters, teachers, bus drivers?  Most municipalities rely upon a combination of sales tax, utility bills, impact fees on new development, and the big reliable source of money for the General Fund and Capital Projects; property taxes.  Property taxes are assessed according to the value of the buildings on a parcel  The more a building is worth, the more taxes the building owner pays.  Once a building is built, there is a good chance that it will be the basis of the property taxes that will be collected for a very long time.  It makes sense for a municipality to know how much taxable value per acre a given pattern of development yields, since there is only so much serviced developable land within its borders.  Joe Minicozzi of Urban3 does a good job of explaining this fairly obvious math in this video .

The straightforward little two bedroom cottage above is proposed on a 37.5′ X 135′ lot  in city with a minimum lot width of 50 feet.  There are lots of existing platted lots with water and sewer taps in an established and desirable neighborhood that are less that 50′ wide.  A vacant lot in the neighborhood pays about $70 a year in property taxes.  Removing the minimum lot dimension from the local zoning code would make it possible to build modest houses like the one shown above, but like many places, the city foolishly decided to downzone its established neighborhoods a couple decades ago.  That downzoning in favor of a more suburban model damaged their tax base.  There are roughly eight 37′ X 135′ lots in an acre.  If this little two bedroom cottage sold for $135,000 X 8 lots to the acre, the result is $1,080,000 in taxable value per acre.  Compared with the taxable value per acre of the biggest fanciest Super WalMart in the same zip code at $520,000 per acre.

When a developer builds a shopping center of residential subdivision these days, it is fairly typical for the developer to turn ownership the new streets, sewers and other utility infrastructure over to the municipality.  If the taxable value of the new development does not produce enough money to pay for the repaving of the street or the repair and replacement of the other infrastructure when it wears out, this turns out to be a lousy deal for the municipality.  The developer has essentially given the municipality a free great dane puppy.  Unless that dog gets a job, it will be a long term financial drain.

Getting senior staff and elected leadership to recognize the looming cost of replacing and repairing infrastructure in parts of the city that cannot pay their way is going to be difficult. Coming to terms with this structural and systemic failure cannot be done with short term impact fee patches. The problem is bigger and more expensive than what can be laid off on new buildings. The source of the problem comes from building a place with the wrong pattern of development over decades. If you build in a way that spreads civilization too thinly, (Auto-only Sprawl) what gets built cannot support the repaving of roads or the repair and replacement of other infrastructure, let alone paying for cops, fire fighters, schools, parks, libraries, and public health services. If towns and cities create big backlogs in infrastructure repair that they cannot pay for, the financial burden becomes so great that people elected to two or four year terms end up just ignoring the problem and resisting any effort to do the honest math that will force folks to face how much taxes are going to have to be increased to cover the repair and replacement costs that are coming down the line.  This is big money with big consequences.

If you cannot do the math to understand the taxable value per acre of serviced land, you should not be in local elected office or running a municipal department. I recognize that this is typically a problem of ignorance and not one of deliberate malice, but the effect is the same in either case. We have to build differently to provide folks with greater opportunity, but we also have to build differently because towns and cities cannot afford the financial fall out of the wrong development pattern. A town going broke while while elected officials and senior staff are ignorant is unfortunate, but kinda understandable. Going broke when you know better is borderline criminal.

So what pattern is your town going to build in?  Is anyone doing the math?

Three Story Urbanism? No Problem.

 

I think it is important and valuable to build Accessible/Adaptable apartments as  currently required under HUD’s Fair Housing Design Manual .  Here’s how to do that in a straightforward three story walk-up building you could build with ordinary residential construction trades in your local market:

The requirement for apartment building or mixed use buildings containing four or more units, and built without an elevator is that all of the ground floor units must be Accessible/Adaptable.  If the 1st floor has no residential units on it, (say because the ground floor is occupied by commercial space or parking garages), then the next floor (the 2nd floor) becomes the “Ground Floor” for the purposes of compliance with the federal Fair Housing Act and you would have to install an elevator for access to that floor unless the building was adjacent to a steep enough grade to provide access to the 2nd floor without an elevator or lift.  As I explained in an earlier post that seems to be getting a fair amount of play, The International Building Code (IBC) allows you to build a three story TYPE V (wood frame) structure with fire sprinklers with a single exit stair, as long as the upper floors do not have more than 4 units on each of them and that the travel distance from the farthest location within each unit is less than 125 feet from the exit stair enclosure.  Follow the link for the specific IBC code citations:

Another Look at how to build a 3 story building without an elevator

The photos above show some capably designed 3 story buildings.  It is possible to do this.  If you have doubts and you need some help,  I suggest that you contact the good folks at Union Studio in Providence, RI They designed the two 6-plex buildings on the lower left or Eric Brown at Brown Design Studio in Savannah Eric designed the white 6-plex walk-up in the larger image on the right.  My able partner David T. Kim designed the 22 unit Hutchinson Green Apartments in the upper left as our first major project after the Great Recession.

So 3 Story Urbanism is no problem?  Okay, admittedly that title does cross the line into Click Bait, because while these hard working modest buildings are very useful in creating 3 story urbanism, your local zoning code with it’s needlessly deep building setbacks, or bloated off-street parking requirements may make it quite difficult to build good #3StoryUrbanism.  But as you can see, but the International Building Code should not be an issue for you.

Bloated parking requirements will mess up your site plan so that you cannot build the same way as the venerable 1920’s 3 story apartment building across the street.  Municipalities are famously bad at guessing how much parking you should be required to build on your private parcel.  Many cites will not even give you credit for the parking spaces at the curb in front of your potential building -as if they do not physically exist.  Unnecessary parking takes up space, creates additional impervious surface that you have to address for the storm water requirements, and those additional spaces cost money to build and maintain.  Bloated parking screws up perfectly good projects every day.  The development math for parking you don’t need never works in your favor.

 

Sharing a Cottage Court Pro Forma (A Live Excel File)

2017-09-13 07.52.09 HDR
Repurposed MEMA Cottage, Ocean Springs, MS

 

Here is a link to a live Excel File you can download for a modest rental cottage court:

 

Cottage Court Excel File

You may recognize the Static Pro Forma tab as the template used in the IncDev Small Developer Workshops.

Please post comments and critiques here or email me with questions.  The sooner folks understand the small developer business model the sooner building/rebuilding will get better.

Beyond the Tiny House

374 sf MEMA Cottage
374 SF MEMA Cottage 11′ x 34′ plus a 6′ porch.

I guess the phenomenon of the “Tiny House” is now part of our culture, since there are now HGTV shows about Tiny Houses.  I love a well designed small house.  I am not a fan of Tiny Houses on wheels for a couple of reasons.  It can be hard to find a place to park a tiny trailer and actually hook it up to a sewer line unless you go to a trailer park or RV park.  Tiny Houses on wheels are not built under typical local building codes but under a  the ANSI standard A119.5 for Park Recreational Vehicles, (specifically RV’s without motors, gasoline tanks or diesel tanks).  If you would like to put your tiny house on wheels on a permanent foundation, you will need to convince the local building official that the trailer meets the local building code.  It is possible to get your tiny trailer certified to comply with the International Residential Code (IRC) by a third party inspector who watches the trailer being built by the fabricator, but this is not a typical practice by many of the folks building Tiny Homes/Trailers.

For the next couple of months my wife and I are living in the little pink cottage shown above in the Cottage Square neighborhood in Ocean Springs, MS.  This little one bedroom cottage was used as temporary housing during Mississippi’s recovery from Hurricane Katrina and was later removed from its transport frame and placed on a foundation at Cottage Square.  It was dual certified by the manufacturer as a HUD Manufactured Home (mobile home) while it was attached to the transport frame and as a IRC compliant modular cottage when removed from the frame and set on a permanent foundation.

We are finding the cottage to be quite comfortable.  We have an actual bedroom compared to the sleeping lofts often provided in Tiny Houses/trailers.  The kitchen and bathrooms are pretty straight forward, built from standard cabinets and fixtures.  There is plenty of natural light and a porch we can sit out on when the weather allows.

Video from the Recruiting Lecture for Emerging Developers – Memphis/May 2017

 

I love Memphis.  More specifically, I love the people I have met in Memphis.  Lots of heart and lots of hustle.

The video above is from an introduction lecture we gave as part of an effort to cultivate a cohort of Emerging Developers working in a number of Memphis neighborhoods.  Following the lecture Incremental Development Alliance (IncDev) held two One Day Workshops and a Two Day Boot Camp.  The folks who attended continue to get together and support each other.

I think it is vital for small developers to “find their people”.  The work is challenging enough and doing alone with out friends and colleagues makes it even harder.  What we have seen in the Memphis cohort of Emerging Developers is a willingness to help each other that is inspiring.  Nobody wants to see someone else repeat the learning curve they went through.  The Emerging Developer effort has been supported by a number of local sponsors and is worth exploring if your community is thinking about how to cultivate local entrepreneurs doing small scale real estate projects.

I figured out how to do remote coaching for Small Developers

 

IDAmidtown-0179

 

After spending a fair part of the workday on the phone or on video calls coaching small developers, it has been pretty common to find me staying up late to finish work on my own projects.

In an effort to bring more discipline to my daily work routine, my well-organized wife, Eleanor has set up the pay button on the blog (above the photo in the black menu bar) as a way for folks to buy some of my time in scheduled 20 minute blocks.

The rate is $80 per 20 minute block. If you would like to schedule a session, please email me at janderson@andersonkim.com to set up a time. You can attach information to your email that will help me understand your project. (There is no charge for any time I spend reviewing your background information). I typically use Google HangOuts for video call coaching session. Hangouts allows 3 or 4 people on the call and you can share computer screens. Please install Google Hangouts prior to the session and test it out. We can also use Facetime, but Facetime does not allow screen sharing and is limited to two party calls.

As an unexpected side benefit, upgrading the version of the WordPress blog platform to get the pay button feature eliminated those random advertisements that used to show up in the free version.

 

Best, John