P1000505

In most places the demand is large and the supply is pretty damned small.  So just how large is the demand?  If we were able to wave a wand and redirect the entire US housing industry to deliver only new rental housing in walkable urban places tomorrow, we would not catch up with the demand until 2050

If you understand urban places and have the ability to produce modest buildings for a living, I encourage you to figure out how to build apartment buildings and mixed use buildings, rent them out and and hold onto them. You should look for opportunities to do this in walkable or even marginally walkable places.  Avoid completely car dependent locations so you don't have to build swimming pools nobody uses.

If you are a contractor, I think this might work out better than building for other people.  If you are an Architect or urban designer I think this will work out better than performing fee for service design or consulting work.

If this seems like a crazy idea, please read Arthur C. Nelson's book Reshaping Metropolitan America and give it a a little more consideration.

http://www.islandpress.org/book/reshaping-metropolitan-america

Here is a link to Dr. Nelson's entire data set (in excel file format).

https://www.dropbox.com/s/3fzf8e8l89o1w0b/9781610910194_reshapeamericadatabase.xls?dl=0

Go ahead and download it and poke around.  At a minimum, cruising through the spreadsheet will make you want to read the book, where Dr. Nelson very helpfully explains what all this data means. I suspect that if you are half as geeky about this stuff as I am, you will hone in on the place where you live to see what the housing future holds for a place you care about.

 You can look up your Metropolitan Statistical Area (MSA) and find out what the annual demand for new rental apartments will be in your backyard.  Then hop over to the US Census website to look at how many multifamily building permits were issued in your county in 2014 and 2015.  

http://censtats.census.gov/bldg/bldgprmt.shtml

For example, I live in Albuquerque.  In the Albuquerque/Bernalillo County MSA, the annual demand for new rental units, according to Dr. Nelson is 4,000 units.  Imagine that a quarter of those units get delivered by the apartment fairy in the form of converted single family houses and the demand number comes down to 3,000 units.

In 2014 there were 400 units built in Bernalillo County, so the short fall of 2,600 would roll over into 2015.  Add the conservative number of 3,000 units for 2015 and that comes to a demand for 5,600 new rental units.  I check in on the permit activity for the City of Albuquerque and the number for the city (admittedly not the entire MSA) for 2015 was 570.  So now the demand for 2016 is something over 8,000.    Vacancy for apartments in Albuquerque over the last couple years has been less than 2% (--about what you would see when apartments need to be repainted and re-carpeted between tenants)  Rents have gone up 5-10% a year in this market with the higher rents in the walkable parts of town.

Is your area any different?  Do you see an opportunity?

Next week Jim Kumon, Bruce Tollar and I will be in Atlanta for another small developer boot camp.  The Georgia Conservancy and the Atlanta Chapter of the Congress for the New Urbanism have put together a great venue and did an excellent job getting the word out. Most of the folks who have signed up are from the Atlanta region, but I saw the names of colleagues from Washington DC and Asheville on the list. Last I heard from Jim, 110 people have registered.  So here is a heads up.  Registration closes on Monday.  People infected with the small developer virus have the nerve necessary to wait until the last minute, so there is usually a bit of a surge in the last couple days of registration.

We get started Tuesday evening with a get together at the nifty converted church offices of Kronberg Wall Architects in Reynoldstown and we will be at the Center for Civic Innovation all day Wednesday. (near the Five Points MARTA station)

If you are still on the fence, give a listen to Eric Kronberg explaining what to expect:

Switchyards Podcast with Eric Kronberg

Then go register on the CNU.org website: Register for the Atlanta Small Developer Boot Camp

The next boot camp on the schedule is an in depth 4 day event in Western Michigan in early December.  Jim Kumon is firming up the dates with the local hosts.

When I hear the question "How Do I get Started as a Developer?"  it is usually followed by a string of questions which amount to "Can you draw me a map that will guide me through every detailed step to becoming a developer?"

People who are interested in this line of work come from a wide range of starting points.  A lot of them already have a fair amount of skill in one aspect or another of the built environment.  They may be very accomplished in one or more specialized areas as a contractor, broker, planner, activist, architect, or property manager.  They know enough about how things work to recognize that they have a lot to learn outside of the field that originally led them to development.

So let's group the skills a developer needs into 7 groups:

1. Urban Design, Site Selection, Site Planning and Civil Engineering.
2. Building Design.
3. Deal Architecture, Pro Formas and Finance.
4. Entitlements.
5. Construction and Construction Management.
6. Marketing, Sales, Leasing and Property Management.
7. Communication and Follow Through.

Very few people master all of those skills.  If you start with small projects, you can gain an overview, and understanding when they are needed at the various stages of a project.  You get a sense of the basics for each skill set.  If you don't have the skill which the project requires, you can't go without.  So you should borrow or rent the needed skill.  Look for people who are genuinely interested in your project and who are actually happy to teach you about their specialty.  I figure a developer does not have to know everything, but they should have a good idea who to call before it is too late.

After a number of Small Developer Boot Camp (calendar here) Jim Kumon and Gracen Johnson have put together the graphic above which has three types of skills and activities allocated over 5 phases of a development project.  I think it is a substantial improvement over the list of 7 skills because it give the reader a sense of when they need to know what, or when they have to find help as they move their first project from idea into an actual building.  This is a work in process, so comments and critiques are welcome and needed.  What do you think?