I continue to ask Urbanists "why aren't you a developer yet?" That's a sincere and serious question. I am serious about recruiting Architects, planners, engineers, activists who consider themselves to be urbanists (New or otherwise) into the ranks of the small developer cohort because I think it is the best way for an urbanist to have an impact in a place they care about. If you have devoted thousand of hours of study and practice to what makes a good place, why leave the construction and renovation of buildings to developers? This question becomes a bit more pointed when you recognize that many conventional developers are doing work in urban settings under duress or without much of a clue how to make their efforts fit a more urban context.  I think the typical generalist/urbanist will do a better job than whatever big development outfits are working in their city.

While Urbanists are working to heal the city or build better places, they should hang onto some of the buildings that get built/rebuilt along the way.  Having a modest portfolio of buildings that pay rent will help them weather the next recession.  (It is really hard to make a living doing fee for service or consulting work when nothing is getting built).

With those reasons in mind, we still need to have a sober and realistic grasp of what is involved for someone making a transition to become a developer, given the arena they are likely to operate in.  This stuff ain't easy.

People tend to think that all real estate developers make a ton of money, because some developers have.  For every major league star in the real estate game there are scores of people hustling to make a living by making their neighborhood better.  Lots of people are fooled by the guy in the nice suit driving a  very nice leased vehicle.

I don't know how people arrive at the amount of money they assume is made on a development project. The assumptions may be ridiculous, but until somebody actually goes through the process, it is not reasonable to expect them to know the math.

I also recognize that until you can demonstrate otherwise, a new developer is part of a disgraced enterprise. So folks considering taking up this work should not expect thanks or regard.  Start small. Hustle on a small project will help you acquire the know how and relationships that will make larger or more complex projects possible, but hustle will only take you so far and you don't want to get into a project that will turn you into a former developer because it is too big or complicated.

 

Writing is hard.  Sarah makes it look easy.  Take a look at how she describes the mechanics of a team exercise from the Incremental Development Alliance's Small Developer Boot Camp.  She lays out that rather technical set of tasks and rolls right into the real world limitations of the moldering zoning codes you find in most cities these days.

Accidental Urbanist

My favorite quote from Sarah:

"Everyone has sexy dreams, but as a developer it’s important to maintain a long-term, monogamous relationship with math."

This afternoon I got another phone call from someone convinced that they should develop condominiums and sell them. I am really struggling to find a better way to communicate on this really basic point. I feel like the guy in the Far Side cartoon above.

 

If you have the know how required to produce buildings that people live and/or work in, using that very valuable resource to produce houses or condos that you sell to people has a huge opportunity cost.  Opportunity cost is a big deal, as in lost opportunity and wasted opportunity.  What else could you have been doing instead of building and selling?

I cannot emphasize this enough. If you have the wherewithal to build something, Don't sell it.  Hold onto it and rent out space in your building. The market for new or renovated rental buildings is hugely under-supplied in most markets, particularly in anything even remotely resembling walkable urbanism.  There are lots of places where a couple of decent buildings will have a wonderful effect upon the neighborhood.  The people who fill in the missing teeth in the neighborhood will do well, while doing good.

 

Our culture has created completely unrealistic expectations for what is supposed to happen when you buy a home. Avoid putting yourself in a place where you have to deliver on all the delusional nonsense that fills the heads of people who watch too much HGTV. Build to hold and rent. Build in places where the amenities are exotic stuff like proximity to transit, day care, $2 coffee and a genuine local bar.