Plain talk on building and development
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Blog: Plain Talk

Plain talk on building and development.

Posts tagged Chuck Marohn
The First Year of Small Developer Activity

duncanville boot camp  

I tend to let too many files accumulate on my computer desktop.  As I was clearing out files today I came across the photo above and the text below.  As you can see from the photo, we did manage to put on the first boot camp in Duncanville.  By the end of 2015 we had done six bootcamps and workshops and launched non-profit to coordinate the effort to cultivate Small Developers around the US, the Incremental Development Alliance (IDA).  Next Tuesday, June 7th in Hamtramck, Michigan we will running the 7th event of 2016 the day before the 24th gathering of the Congress of the New Urbanism starts up on June 8th.

In addition to running the one day and three day training events, IDA along with Midtown, Inc has been awarded a Knight Foundation grant to do a deeper diver into the Midtown neighborhoods of Columbus Georgia, providing 18 months of extended training and mentoring for local small developers.

None of this would have been possible without the hustle and hard work of local sponsors and volunteers in each of the cities that hosted us and the ongoing efforts of the IDA staff and board.  Strong Towns helped us get started, hosting the boot camp registration for the first couple events on their website.  Lynn Richards and the staff at CNU have been tremendously supportive as we continue to figure out how to scale up the Small/Incremental Development Effort.  The CNU's Project for Lean Urbanism was the genesis of this entire effort.  The time we spent with the Lean Urbanism Working Group exploring what it would take to Make Small Possible made it very clear that we need a new business model for development, That shifting the scale of the development enterprise was going to be critical to building better places.   Thank you everyone.

 

June 5, 2015

Things are moving FAST with the rapidly expanding Small Developer/Builders Facebook group that we set up last April prior to CNU 23 in Dallas.

I have heard from a number of group members via email and phone calls that they would be interested in a hands-on workshop on basic skills needed as a small developer builder. There is an effort percolating to hold a one day workshop for Small Builders in Atlanta the day before the National Town Builders Association (NTBA) Fall Roundtable October 16-18.

But that’s all the way into late October and folks are pressing for something much sooner.

I think we can put this together in the Dallas area rather inexpensively. If the folks attending cover their own travel, lodging and meals, if we can find a venue at modest cost. It could be a very Lean affair.  A meet-up with other folks considering or practicing as Small Developer/Builders. Connect with some mentors, roll up our sleeves and get some skills.

Here’s what we are thinking for content:

  • BUILDING FOR-RENT VS. BUILDING FOR SALE PROJECTS.
  • HOW TO DO BASIC MARKET RESEARCH.
  • PRO FORMA BASICS, SORTING OUT YOUR DEAL ON PAPER.
  • HOW TO BUDGET FOR HARD AND SOFT COSTS.
  • OPERATING EXPENSE BUDGETS AND THE PROPERTY MANAGEMENT BASICS.
  • SITE SELECTION – EVALUATE SEVERAL SITES TO FIND THE BEST ONE TO START ON.
  • HOW YOUR FINANCING REQUEST LOOKS TO YOUR BANKER.
  • NAVIGATING THE APPRAISAL PROCESS.
  • HOW TO PITCH A DEAL TO AN INVESTOR.
  • DEAL STRUCTURES; ALIGNING THE INTERESTS OF PARTNERS.
  • POP-UP RETAIL AND STREET MARKETS; HOW TO CULTIVATE TENANTS (WHEN YOU HAVE NO MONEY).
  • UNDERSTANDING FHA LOAN PROGRAMS 203(B) AND 203(K) FOR 4 UNIT PROJECTS.
  • DEALING WITH CONSTRUCTION IF YOU DON’T HAVE A CONSTRUCTION BACKGROUND (AND EVEN IF YOU DO).
  • COMMON SENSE DESIGN STRATEGIES AND WORKING WITH ARCHITECTS AND ENGINEERS.
  • MULTIPLE ON-RAMPS, SCENARIOS FOR HOW TO GET STARTED AS A DEVELOPER/BUILDER.
  • A STANDARD 4-PLEX DEAL; ALL RESIDENTIAL OR SMALL MIXED USE BUILDING.
  • A STANDARD COTTAGE COURT DEAL.

What other content should we cover?

We are thinking folks would arrive in time for food and drink on Friday evening, leave after lunch on Sunday.  We are doing this on August 14-16,  Who’s in?

 

Asking Nicely for Something that should be Really Obvious ---(Again with the Parking Thing)

Providing convenient parallel parking at the curb should not be hard. Parallel parking at the curb provides some important and useful things:

  • Slower traffic.
  • A formidable barrier between passing cars and people walking on the sidewalk, so walking feels safer.
  • Parking spaces located close to where people are actually going.
  • Parking spaces without any additional circulation lanes (and additional impervious surface).
  • Greater flexibility for building on private parcels.

So if you want to build in a place that does not allow parallel parking on a public street and requires way too many off-street parking spaces on the private parcel, it is usually worth the hassle to ask for a variance or exception to the rules that are on the books.  Sometimes this decision is made by a municipal staffer like a Zoning Examiner or Planning Director.  Sometimes special permission for something really obvious, (like a better parking arrangement) will require the approval of the Planning Commission or even the City Council.

If you are asking for on-street parking or a reduction in off-street parking It is important to make that ask in the context of a thoughtful project .  When you show the amount of on-street parking being provided, the reduction in the number of off-street spaces seems like housekeeping item and not a big deal exception or some completely exotic one-off variance.

Just to be clear , (since it is often all about how you ask), don't just ask for a reduction in something that is on the books as a black and white requirement that everyone is supposed to follow. Show the reviewer, commission, or council the whole project and ask for the reduction as part of that larger conversation. When you demonstrate that you are doing more, doing better than a lot of what they are reviewing, relief from a number in the zoning code seems like a minor accommodation needed to get to a good outcome.

Parking Bloat Drives Down the Price of Land in Desirable Neighborhoods (which is really dumb).

Parking in Downtown Buffalo, NY.  A stark example of a city that has prioritized affordable places to house cars (--regardless of the cost or consequence). In an email exchange with my Architect friend (and aspiring developer) Sara Hines in Massachusetts, she asked "Okay, so I really want to build better places.  What towns in New England are going to let you build small scale walk-up buildings as-of-right, without requiring a lot of off-street parking?"

Good question.  More likely than not, you will have to satisfy some local version of a dumb minimum off-street parking requirement. This is particularly unfortunate and wasteful, since municipalities are genuinely terrible at guessing how much parking is actually needed.  Let's just call it what it is.  Parking Bloat.

With off-street minimums, parking becomes the driver of what can be built and what a developer can afford to pay for land.  (also called the "land residual" in finance speak).  Simply put --you can only build what you can park according to the rules. That drives down the price you can afford to pay for the land.
There is some minor good news if you have an appetite for parking reform.  Since the requirement for off-street parking just reduces what can be paid for the land, you may have an opportunity for some arbitrage as a small developer. Think of excessive off-street parking as a land bank.  A piece of the parcel that needs to be set aside in the right configuration so that it might be built upon later, (after the rules change).   The strategy to deal with this is to provide the unessessary surface parking so that it is configured to be converted to building pads later.  To do this you need to keep the utilities out of the future pad and watch out for how the site drains.
Another strategy is to build actual garages to provide some of the required off-street parking.  You can rent out garages at the same rate per SF as local self-storage (or more).  Let's face it.  They will end up being used as self storage anyway, but in the mean time they are a rent paying work around for Parking Bloat.
If a municipality is serious about the economic and cultural benefits of places worth caring about and they want to provide a greater range of options for where people can live and work, they will eliminate off-street parking requirements.  If they won't take that step, I wouldn't trust their well-intentioned planning efforts. It is clear that they are somehow just not equipped to do the most basic thing.   Parking Bloat is a telling metric for figuring out how a town works.  It could mean the elected officials and staff may not know what they are doing.  It could also mean that they know what needs to get done, but for some reason, cannot get it done.  Either way, the effect is the same.  The small developer/builder should watch out for surprises in dealing with the planning staff and elected officials. If the community is crippled by Parking Bloat, land will cost less and you will have to build less initially.  So don't overpay for land and start working on getting rid of the regulations that require Parking Bloat.
Don Shoup's book   The High Cost of Free Parking is out in paper back for $28.  Make sure your local public library has several copies.  Give copies to the leadership of your town's various neighborhood associations and to the prime movers at the local chamber of commerce. With a little luck, the Town will do the right thing and you may create a couple of building sites down the line within the projects you built under the old bloated rules.