I think incremental development, modest projects by Small Developers focused on a specific neighborhood, present an genuine opportunity to get well past the usual arguments about gentrification.  The usual narrative describes how immoral developers come into a neighborhood that is in rough shape and start renovating old buildings and building new ones.  New trendy restaurants appear and before you know it rents are going up and folks who have lived in the neighborhood all their lives can no longer afford to live there.

Here's where I think Small Developers can flip the script.  If you are committed to working in a specific neighborhood, it may be a place that has a lot of room between what it is now and what it could be.  As a small operator you have limited cash and limited credit, so you can only do so much.  I am impressed with the approach Monte Anderson takes when recruiting tenants for some of the buildings he renovates or builds.  He looks for a local entrepreneur that show promise and works with them to build their business to a point where they can qualify for an SBA 7A loan to buy the building.  It is a win/win.  Monte frees up his capital and credit to build or renovate another building in the neighborhood and the local entrepreneur is building their net worth and creating local jobs.

The next place where small operators can make a difference is in cultivating the local building trades.  Chances are the plumbers, framers, electricians, drywallers and roofers already live in the neighborhood you want to work in and they may be traveling significant distances to find steady work on large projects.  What if you could provide a steady backlog of work for those folks right in their neighborhood?  It is going to be in your interest as a developer or builder to do so, since small outfits are usually impacted more severely than big operations when skilled construction labor is in short supply.  Cultivating a reliable trade base is going to be the cornerstone of your business model as a small developer.  How many tradespeople are close to being able to open up their own shop if they knew they had steady work for their crew?  Maybe you introduce them to Janet the excellent local bookkeeper who knows Quickbooks and how lien releases and trade credit works.  Small business people doing favors for each other can go a long way toward building local wealth and local jobs in the neighborhood.  Maybe you guaranty their first line of credit at the lumberyard for a year to help them get on their feet.  Introduce your framer to your banker.  Before long you may be mentoring them so that they can own a couple buildings in the neighborhood.  Building local wealth and local jobs could start with you in the place you are committed to.  Start by taking the long view in cultivating relationships with your building trades. Keep your eye out for local bookkeeping talent.

on street parking in queens

I was in Southwestern Michigan recently where I encountered an odd idea about parking on the street.  In many of the residential neighborhoods you cannot park overnight on the public street.  I asked if this was to facilitate snow removal during Winter months.  I was told that the ordinance is in effect all year.  Maybe there was a freak blizzard in July in years long past and that event lead folks to want to err on the side of caution.

Parking is a volatile subject.  Anyone who has ever be frustrated trying to find a place to park is an expert on the subject without applying any effort or legitimate mental rigor to the topic.  Proposals to change parking rules can whip up the kind of hysteria that makes you question the mental capacity of folks you used to hold in some regard.

What does this mean for a small developer looking to get relief from the municipality's minimum parking requirements?  Don't assume that common sense will prevail.  Parking can be such a hot button issue that it clouds the minds of otherwise reasonable people.  If you want to challenge or change the local parking rules, you really should not expect grownup behavior from your neighbors, city staff, or elected officials.  Don't base your project on an assumption that you will get any reduction in parking, particularly if that relief will require a public hearing.  You may be able to get some relief, but don't count on it to make your project pencil.

Many municipalities are getting rid of minimum off-street parking requirements, recognizing that cities have done a lousy job of guessing how much parking is going to be needed for any given use.  Other cities have figured out what a nifty tool charging the right price for parking is for managing the supply of public parking in desirable areas.  These islands of common sense are still too rare.  Professor Donald Shoup has done excellent work debunking common parking myths.  I recommend reading his book The High Cost of Free Parking (now in paperback) to anyone serious about understanding how to manage parking issues.

If you are not ready to read a 700 page book about parking, I recommend this short paper by Prof. Shoup as an illustration of how warped and hysterical everyday thinking about parking has become: Roughly Right or Precisely Wrong  Parking Bloat is needless and wasteful.  It is born of myth and sloppy thinking.  Providing alternatives will require clear thinking and well-informed local leadership, (so it is going to take a while)...

You raise a lot of good points and express concerns which I have also heard from other folks looking to get started in incremental development.  We should probably talk about this by phone or video chat when you have an opportunity.  Some responses;

The most satisfying projects deliver on several levels

• They post good financial returns that justify the risk of construction and leasing.

• The process of getting the the building built or renovated builds relationships of trust among your team making it possible to take on another effort with greater confidence.  I think that working with people you genuinely like and respect, seeing them grow and develop new capabilities is very rewarding.

• A good project contributes to the social and economic flywheel of the neighborhood.  The best projects have lots of synergy that benefits other people.  A restaurant opening across the street from a coffee place strengthens both enterprises and makes that block a good place for someone to want to open their new office.  Building projects that create local wealth and local jobs within a neighborhood protects the long term value of your own buildings in that setting.

Farming

I think it is critical to have a geographic focus for incremental development.  Monte and I talk a lot about "farming"--identifying specific areas and getting to know them well.  That investment of focused time and attention reduces your risk, because you can know the place well enough to understand where catalytic efforts will have the impact needed.  Have you picked an area or neighborhood where you would want to concentrate your efforts?

New Construction vs. Renovation for a first project

I started out in the trades as a carpenter and later, an electrician.  So, I tend to think it is always better for folks who want to understand the nuts and bolts of development and property management to start with a piece of new construction, rather than an ambitious renovation.  That first construction project should also be of modest scale.  Small scale helps you limit your risk and focus your learning. You are not looking for economies of scale on your first building experience, you are looking for an opportunity to learn the basics and connect the pieces so that you can communicate effectively with your team.  Once you get a handle on the  fundamentals and mechanics, you move to more subtle stuff like refining the design to make construction and maintenance easier, or to making the units more pleasant for your tenants.  Renovation and new construction both have risks, and tradeoffs that you need to identify from the start and manage through the process.  (I just think the risks and tradeoffs  of new construction are more straightforward).

Affecting people's lives

If we think about the resources we have; capital, skills, determination, and vision as things that we have stewardship over, understanding how  we manage them in ways that affect the lives of people in the neighborhood should guide what we do and how we do it.  Building a culture within the team that looks outward is really important in my view.  Conventional development practices applied to existing neighborhoods tend to displace people who have limited choices and opportunities, so we need to have different strategies grounded in the principle of increasing choices and opportunities for local folks.  I really appreciate the way that Monte Anderson finds the local entrepreneur tenants and puts them on a track to eventually buy their own building, so they are not displaced by Starbucks or some national tenant down the line.  The local entrepreneur gets to build local wealth which stays in the community.  That's  better for everybody.  The current shortage of skilled construction labor presents a problem and an opportunity for an incremental developer working in an underprivileged neighborhood.  A small developer can generate steady work  for the trades.  That steady work can become the platform for training local folks in the trades, with the goal of helping them sort out the logistics of having their own contracting enterprises and eventually owning their own buildings.  There are more opportunities in these neighborhoods than there is capacity to meet them, so the wise strategy would be to build a local trade base to add to that capacity.

Acquiring and sharpening tools

I understand that you have capital you want to put to work soon.  Rather than look for deals right now, I encourage you to sharpen your tools and build your skill set for a while. Maybe set a target of getting into a project by the end of 2016.  One potential way for you to get up to speed on the tools and techniques that will help you as you look at opportunities for incremental development is to come to a boot camp.  The concentrated format of two and a half days gives you a lot of information in a short period of time and getting to know other folks at various stages of doing this kind of work will help you build a network of people you can reach out to for counsel when things get tough.  You will find the the network of small developers has a culture where nobody wants to see their colleagues repeat their learning curve.  There is a lot of lateral support among the crew.  They are generally looking for a chance to pay it forward.  We are scheduling at least one event a month through most of 2016.  Keep an eye on the Incremental Development Alliance website for new dates as events get confirmed.