Atlanta: Small Scale Developers Boot Camp

6 thoughts on “Atlanta: Small Scale Developers Boot Camp”

  1. “In most locations in North America these buildings are explicitly forbidden by zoning and building codes and are nearly impossible to finance with traditional bank loans.” How difficult are these to change? I’m sure it depends on each city but with all the talk about higher tax revenues it seems like more flexible zoning codes would be considered. In regards to the banks, why is it harder to get a loan for this kind of development? What about a local bank like a credit union, do they have the capital to support this kind of development? Basically I’m interested in addressing the structural limitations. You make good points in your posts, I think if people of any given city were educated on these they would be open to consider things that were previously in the category of “NIMBY”. Thanks in advance, Kyle.

    1. Kyle, Over the last sixty or seventy years a variety of rules, codes, and procedures have accumulated that collectively mandate a particular kind of development. For example, single use zoning forbids putting an apartment above a shop. (That’s to eliminate noise and pollution from noxious commercial activities near where people live.) Or a prohibition on small sized lots or homes under a certain square footage. (That’s to keep out the riffraff who can’t afford a larger property.) Or a fire code that mandates sprinklers and a $75,000 standpipe. (These things can be amortized in a large multi-unit building, but the cost can’t be justified in a small building.) Americans With Disabilities civil rights legislation mandates that all buildings be accessible. (I’m all for it, but an elevator costs $100,000 so you either build a one story building or you build something big enough to justify the expense.) Banks no longer hold the loans they issue. Instead they bundle them up and sell them off in batches of 20,000 to the pension funds and institutional investors as if the loans were corn or pork bellies. Consequently, all the loans have to be uniformed and fungible. This batch of 20,000 needs to be single family homes, this batch of 20,000 needs to be strip malls, this batch of 20,000 needs to be garden apartments… Standardization is essential for finance.

      You can often overcome one, or two, or three of these constraints by applying for a zoning variance or arranging financing from private sources. But it’s really tricky to find work-arounds for everything. It can be done, but you need to know what your doing. And every location and jurisdiction is unique.

  2. I wonder about a few other issues that still feel missing maybe:

    1- Proximity/Density.
    Small-Scale must also mean almost exclusively zero lot line and down to 4 meter urban streets. The default in the US is way to spread out to ever be sustainable, so that means where necessary the US needs to re-platt out their neighborhoods, because it’s 70% too spread out. Other than maybe some abandoned parts of Detroit or something, whats the likelihood of this ever happening? Basically 0% if we’re honest.

    2- Construction Durability.
    Standard US mode is fiberboards, sticks and HVACs. Not heavy masonry, zinc roofing and passive systems that lasts 400 years. Imagine our success and solvency if traditional durability was an available affordable option let alone the default. International tourists are great barometers for development, and they overwhelming like to go to durable authentic places with charm and beauty.

    3- Critical Mass.
    The shift in thinking to get successful infill in most insolvency exposed places around the US, is off the charts huge. Do you know of any place in the US that’s on board with PROXIMITY, DURABILITY, and AFFORDABILITY, as central motivations to their development? Currently I mostly see a flickering of interest spread evenly across the continent (connected through facebook mostly) without critical mass or serious political influence. Even in innovation centers like SF or Austin, cranky stuff like this are still total non-starters. So maybe Cleveland, or Baltimore maybe? Lets just call this the “construction design inspired solvency seeking internal migration” issue.

    4- A Sense of History.
    You’ve seen what it’s like in the Netherlands for example. Even though it looks like its the poshest place, where everyone is at ease cruising around fields and brick villages on their bikes. The reality is that they live very dynamic yet affordable lives. Emotionally and culturally rich lives sustained by relatively simple (but durable) material lives. When you walk/ride/drive on any street there, you can clearly see how their construction design choices affect their running costs. It’s like civic management magic compared to the US; where disfunction, decay and errors are rewarded as natural phenomena that just happen to be business friendly.

    Debt is currently baked into the scale and specification defaults of the US. This has to change for everyones development investments to be sustained.

    1. At the moment there’s really no way to have any kind of conversation about changing anything. Society just isn’t “ripe” for that yet. I suspect that economic loss and dislocations will focus peoples’ attention sooner or later.

      There’s a lot of talk about suburban retrofits. Professionals focus on big heavy handed multi-million dollar projects that transform a dead shopping mall into a faux High Street “Towne Centre.” I’m not opposed to that sort of thing, but really it’s just a new twist on the same old corporate plastic development model. Oh look, a Cheese Cake Factory. Oh look, an Old Navy and a Starbucks. Oh look, cookie cutter condos. Oh look, genuine peel-and-stick stone veneers. and synthetic laminate panels.

      The best model I can find for the end of one system and the emergence of a new one can be found in Eastern Europe. I’ll be doing a blog post on Riga, Latvia soon. They inherited some seriously bad Soviet architecture and there simply was no way to remove and replace all of it. So they’ve had to retrofit what was there to a more traditional Scandinavian design. I think something like that will unfold in the States over time.

  3. You are so, so right here. I would love to find small developers who are interested in building those cottage groups, maybe for groups of older friends and a caretaker. Maybe even out of pre-fabs. We need to re-invent old age housing choices.

    1. Wendy – the whole point of the Small Scale Developers Boot Camp is to let people know that there are no big developers coming to the rescue. If you want to see these modest projects built in your town you might just have to do it yourself. At the very least you need to educate yourself and those around you about the legal, financial, and cultural barriers that prevent other little guys from successfully building these projects.

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