9-line access access management access point accessibility ADA air quality alignment amenity antiplanner atlanta BART BID bike Blogs boston branded bus branded buses brookings brt bus Bus Rapid Transit BYU capacity car pool cars central link Centrality certification commuter rail condo congestion congestion pricing connections consistency coverage crossings CRT cycling DART dedicated dedicated right of way density denver depreciation developers development economics efficiency Envision Utah equity eugene exclusive extension FAQ favela Federal Funding Flex Bus florida free fare zone freeways Frequent Transit Network frontrunner frontunner Gallivan garden cities gas prices geotagging goat Google grade-separation Granary District growth headway heavy rail hedonic High Speed Rail history housing housing affordability housing bubble housing prices HOV income infill innovative intersections intensity ITS junk science LA land use LEED legacy city light rail linear park location LRT lyft M/ART malls mapping maps metrics metro MetroRail missoula mixed mixed traffic mixed-traffic mobile mode choice Mode Share multi-family MXD neighborhood networks news NIMBY office online op-ed open letter Operations parking parking meters peak travel pedestrian environment phasing Photomorphing planning Portland property property values Provo proximity quality_transit rail railvolution rant rapid rapid transit RDA real estate redevelopment reliability research retail Ridership ridesharing right of way roadway network ROW salt lake city san diego schedule schedule span seattle separated shuttle silver line single family SLC SLC transit master plan slums smartphone snow sprawl standing stop spacing streetcar streetscape streetscaping subdivision subsidy Sugarhouse Sugarhouse Streetcar Tacoma taxi technology tenure termini time-separation TOD townhouse traffic signal tram transit transit networks transit oriented development Transit Planning transponder transportation travel time TRAX trip planning trolley tunnel uber university of utah urban design urban economics urban land UTA UTA 2 Go Trip Planner utah Utah County Utah Transit Authority vmt walking distance web welfare transit Westside Connector WFRC wheelchairs zoning

Wednesday, June 15, 2011

Understanding Land Developers

Successful businesses are built on the premise of repeating economically profitable processes. Take inputs, add value, sell the outputs. Land Development is a business. The input is 'raw land', 'development' is the value added process, and the output is the *varied types* of building modern society demands. The issue of 'varied types' is key to understanding developers. To a developer, a development is a 'product'. Different developers make different types of products--some do housing developments, some commercial office, industrial, some retail. A few do highly specialized types--museums, student housing, etc.  Regardless, each is regarded as a high-risk, high-margin business with high labor costs, high capital costs, and high financing costs. Getting any specific development project to 'pencil out' so that it is worth attempting, an then actually getting a project built, and then sold (or leased out) is an ongoing struggle. The fewer complications along the way, the better.

Repeating an economic process is made simpler, if your inputs, your process, and your outputs are as similar as possible. In development, none are easy--no two parcels are ever the same, you'll never face the same regulatory environment twice, and the market demand may collapse by the time you get done building it.

Why Mixed-Use Development (MXD) is so hard to do: Low volume. For a developer, it's not worth the time and the trouble to develop the expertise needed for a type of development that you are only going to develop once or twice. Developers conceptualize MXD differently than planners. To planners, it is how all new development should be. To a developer, it's a confusing set of new requirements to be negotiated with the city. When volumes for an economic activity are low, the activity tends to become centralized into a few places where the necessary expertise can be gathered. For MXD, this is more difficult. There are wildly different regulatory and development requirements from jurisdiction to jurisdiction and state to state.