Plain talk on building and development
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Blog: Plain Talk

Plain talk on building and development.

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Parking Hysteria, Sloth, and Indifference

scl-pwp-aerial-empty There is a relationship between how woefully uninformed people are about parking and how epically they lose their shit over parking problems.  I am really tired of explaining the basics of modern parking management to people who seem incapable of using the Internet.  Here are the highpoints from Donald Shoup's fine book The High Cost of Free Parking:

  • Recognize that all public parking is not equal.  Some spaces more convenient than others, so price them accordingly.  The spot at the curb in front of the coffee joint should not cost the same as the top floor of the seven level parking structure.
  • For retail areas, price the parking at the curb for a 15% clearance rate. Raise the prices for curb parking until you reach the point where when 15% of the spaces are available.  Reduce the price of parking in a rational gradient, the further away from high demand the cheaper the space.
  • Make it easy to pay with a credit or debit card or with a phone app.  Phone apps that message you to ask if you want to add another hours are particularly handy.
  • Folks that live in residential neighborhoods close to areas with high parking demand like universities, hospitals or retail areas get bent out of shape when the public parking spaces at the curb in front of their house gets a lot of spill-over parking.  This can be solved through the use of resident parking permits and the sale of parking permits in that area for daytime hours.  Proceeds from the sale of the permit can be used for public works and parks within the neighborhood by setting up a Parking Benefit District.

Folks that don't care enough about solving their parking issues to use these proven tools need to get a real problem.  How much sympathy or patience fan you have for difficulties born from sloth and inattention?

So Why Won't You Build Condos?

Big building. Complex Mechanical Systems. Lots of specialized details to make the exterior envelope keep the weather out. Condo Ownership. What could possibly go wrong? Disclosure;  Many of my Architect and Developer colleagues disagree with me on the subject of building condominium ownership.  They think the risk can be handled with the right insurance and the right attorneys.  My question for them; "As long as there are other non-condo projects to be built, why bother with this insurance/lawyer critical mess?

The Construction Defects Plaintiffs' Bar is a very good reason to stay the hell away from for-sale condominium projects. The General Liability insurance policies for builders and developers are more expensive than for fee simple for-sale or for rent project. For Architects and Engineers Professional Errors and Omissions insurance coverage gets really expensive once you start doing any significant portion of your work on condo projects. The result is that Architects either do a _lot_ of condo work, or they do very little. There is a statute of limitations for construction defects, typically 10 years in most states. In year 9 the staffers of the big construction defect law firms start to send "trolling" letters to owners of the condominium units hoping to hook a couple people interested in suing. The addresses are easy to find, since they are required to be recorded with the State Board of Real Estate or the State Attorney General's office. The letter tells the condo owner that the law firm is currently representing other owners in the condominium association in a lawsuit against the Developer, the builder, and the architect. The lawsuit is being handled on a contingency basis, so there will be no up front cost for the condo owner to join the lawsuit. The law firm gets 40% of any settlement or judgement if they win. The insurance companies for the developer, the builder and the architect, and maybe a few of the mechanical trades often just settle with the firm. Then they jack up the rates of their customers or just cancel their policies. So without any actual construction defects the tidy little extortion scam just ends up making the insurance needed to build condo's more expensive. There are actual defects in some of these lawsuits, but the deals cut between the insurance companies to spread the paid of settlement around are sleazy at best. A hugely bad structure for managing risk. This is why we advise Small Developer/Builders to avoid condominium projects whenever possible and to keep the scale of your projects small and your project LLC separate to mitigate your risk of bullshit litigation.

Quick Notes following the Small Developers Boot Camp

photo (8) The first Boot Camp is behind us.  100+ people came to learn about how to develop scale projects.  Everyone I spoke with was already pretty accomplished in some line of work, but looking at what it would take to move into development.  This crew is going to be able to offer each other a lot of help and support.  After a pretty grueling 14 hour day of instruction and discussion, people still had enough energy to hang out at the Pop-Up Art Gallery put together by Donna Harris and her crew for another 3 hours.

I figured we would see maybe half the class at 8 AM the next day.  I was quite wrong.  85 of the 100 attendees were in their seats at 8AM on Sunday morning, several driving in from the other side of the Dallas Metro.

We have lots of notes on what we can do differently or better next time.  Jim Kumon shot lots of video so I hope that he can get some good stuff up quickly on the CNU.org web site.

It is going to take me a few days to recover, so in the meantime, I hope that members of the Duncanville cohort will post comments about their experience here and on the FaceBook Small Developer/Builders Group page.

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