Yesterday's blog post drew some criticism from a colleague who, over the 15 years I have known them, continues to assign me additional pro bono work they think I should be doing :

"--the G word is generally offensive to anyone who want to improve their neighborhood for their family. However, talking about small development in the vein of gentrification is a nonstarter unless the small development houses a diversity of incomes. Do the folks who work on a construction project live in the neighborhood they are working in? If they are currently residents, do they subsequently get pushed out when values rise? Construction jobs are usually higher paying than those in the service industry, but not by much, and they rarely provide benefits. This is especially true when the developer is small. What is true is that by virtue of their small scale any negative impact on housing costs / rents is minimal compared to large scale development. Before John writes an op-ed he should gather more ammunition or at minimum address these issues."

I will attempt to further explain what I wrote.

As to the word Gentrification being offensive, I laid out the common narrative of a developer coming in from outside the neighborhood and being the apparent cause of why rents go up and people who have lived in the neighborhood can't afford it any more.

At the start of the next paragraph I asserted that I think this familiar narrative presents an opportunity for small developers to flip the script. If that term is unfamiliar, here is a definition..

flip the script

phrase of script

1. 1.

   NORTH AMERICAN informal

   reverse the usual or existing positions in a situation; do something unexpected or revolutionary.

To illustrate how small developers can flip the Gentrification script, I described how Monte Anderson, a small developer in the Southern Dallas Metro, mentors local entrepreneurs initially so that they can make it as tenants, but eventually so that they can purchase the building they are renting.  For example, if the tamale guy buys the building he where he is operating, the prospect of getting forced out by Starbucks level rents paid by national credit tenants is greatly reduced.  This moves the building into being part of a local entrepreneur's net worth.  Working with a tenant to help them buy their building builds local wealth in the neighborhood.  It is a win/win, because that same sale frees up the small developer's limited capital and credit to do something else, because now that the building is performing well for the neighborhood and does not require the developer's risk capital.

In the final paragraph I described the necessary symbiotic relationship between the local building trades who probably live in the neighborhood and the small developer working incrementally in the same neighborhood.  The local trades need steady work that they don't have to travel long distances to perform.  The small developer needs a stable trade base to be able to build effectively at a small scale, which is increasingly difficult through arms length bidding in markets with a shortage of skilled trades.  I recommended taking this symbiotic relationship to the next level by helping individuals in the trades start their own crews, mentoring them, introducing them to a capable bookkeeper, guaranteeing their trade credit with local suppliers for a while.  With time, the tradesperson turned small trade contractor could become a small developer in their own right, building, renovating and owning buildings in their neighborhood.  Again, creating local wealth and local jobs.

The point of the blog post was to alert small developer to the necessity of doing the right thing.  Cultivating local trades is essential to the small developer business model.

Perhaps the blog title:

Gentrification? Nah. Let’s talk about local jobs and local wealth.

-was too subtle.

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)...