NOTICE: From the office of Dodge, Wiggle, Hack, Shrug & DeCamp, LLC
This story was originally posted on John Sanphillippo’s blog, Granola shotgun. It is shared here with permission. All images in this piece were provided by the author.
The future is a question of strategic adaptation within culturally acceptable parameters.
I spend a lot of time with people who are passionate about building quality places. I love their company and respect their ambition and goals, but I’m exhausted and feel the need to move forward in a different way.
I spoke with an architect friend in Los Angeles last week. He was considering recent legislation that allows for various forms of infill. On paper, he could build a cottage in the backyard or even subdivide his oversized 1920s lot into two separate smaller lots. He reached out to people in the industry who are familiar with the zoning and building approval process and released some numbers.
The first stumbling block they identified was the road in front of his house. It is only 18 feet wide, which is legally below standards according to the Fire Marshal. In an emergency, firefighting vehicles would have difficulty accessing the site. Thus, a special exemption request must be submitted to the city. This request costs $ 15,000. In order to have the best chance of the variance landing on the right desk and being viewed favorably by the right person (with no guarantee of a positive judgment), a seasoned professional should be hired to guide the documents through the process. The standard fee for this person is $ 10,000. Otherwise, the paperwork will simply be lost in the reshuffle and end up dying a slow, bureaucratic death.
If this variance process is successful (a very big “if”), the sloped site will need to be prepared with a foundation designed to meet applicable codes and technical specifications. It’s estimated at $ 300,000. Once the foundation is approved and built, the maximum size of the house that can be legally built in this particular case would be 1,000 square feet (93 square meters) and the minimum cost for bare constructions, nothing special is currently 400. $ per square foot. So my friend is considering an absolute minimum of $ 725,000 for an infill chalet.
Ideally, this whole process would take two or three years, assuming permits are issued in a timely manner, construction trades are readily available, inspections are approved on time, and there is no have no big surprises. At that price of $ 725,000, with today’s interest rates and going rents… he thinks he can cover his expenses and the property will generate cash. In theory. But he would put a lot of risk and the consequences of failure would be catastrophic.
Three years ago, I was in the suburbs of Atlanta visiting friends who were actively working on the redevelopment of a former car dealership. The existing 14,000 square foot (1,300 square meters) brick and steel building was structurally sound and could be rehabilitated. It spanned two acres with 100 parking spaces at a major intersection. The idea was to transform the whole by filling vacant areas with shops, work-living accommodation and apartments. These can be for rent or for purchase, depending on the specifics. They guided me through the process of obtaining project funding, obtaining permission from local authorities, market research, etc.
(Source: Building and land of the three cities.)
I reached out to these friends a few days ago to check on their progress and mentioned my architect friend from LA and his situation. Obviously, his problems were just the usual “California”, “Big City” and “Liberal” disasters to be expected in a place like Los Angeles. But no… Georgia’s suburbs have their own administrative frictions that also spoil the free market expression of raw capitalism. The zoning regulations and building codes that would theoretically allow this project to go ahead have proven to be flawed in practice. These are still only drawings and application documents three years later.
I’ve spoken to several different people who are familiar with this project and other related businesses to get a feel for the situation. The scuttlebutt was not good. I’m going to skip the gory details and say that sometimes when unorthodox proposals like this come forward, they can burn up the initial funding before they launch. It leaves people holding an empty bag with complaints. The right people can then acquire a damaged reputation. Was the whole concept bad? Was the execution faulty? Did government policy and red tape kill him?
Was it doomed from the start, or could it have worked without luck and bad luck?
Here is what I think is destined to happen to this property. It will be vacant for too long. Eventually, it will change hands and the new owner will deploy institutional money to scratch the ground and build exactly the type of suburban business establishment that everyone expects and understands. This could be a drive-thru fast food restaurant, national drugstore chain, auto parts franchise, dialysis clinic, bank branch, or gas station. Plain vanilla. Nothing weird.
And local authorities could even provide tax breaks and special sweeteners to help facilitate economic growth for the community. They certainly wouldn’t want this fantastic business to be built later in a competing municipality, would they?
As part of my reunion with old friends, I reached out to people in Minneapolis, Minnesota, to see how their latest project was going. I first remember them describing their project to build 12 units in 2015. The Sundial apartments were designed to the highest standards with solar panels, super energy efficiency, rainwater harvesting, triple glazed windows like a German submarine and all the latest innovations in technology. characteristics of the application. In addition, it is very similar to the existing buildings next to and in the neighborhood.
(Source: Heritage properties.)
There is a strong pent-up market demand for exactly this kind of accommodation at this exact location. And Minneapolis recently made it easier to build more housing to address the lack of supply by tweaking zoning regulations. It must be a slam dunk. After six years, I bet it’s been up and running for a while now.
But no. It is still a work in progress suspended in the regulatory aether. It continues to move forward and should become a reality, but not right away. These things take time.
From Minneapolis, I visited another friend’s house in the outer suburbs of Dallas, Texas. He’s a guy who’s done multiple multi-million dollar projects involving mall conversions, big box store reinventions, mall renovations, luxury hotel transformations and all kinds of shopping projects and smaller-scale residential homes for decades. He has cojones and likes a good challenge. But he’s also been hit hard by all kinds of setbacks along the way.
He shared with me his latest project. It is a distressed 1970s era brick ranch house on an acre lot. It was relatively inexpensive due to its poor condition.
I didn’t understand at first, but as we spoke I heard the same hint of exhaustion in her voice as mine. He’s tired of swimming against the tide. The juice is no longer worth squeezing.
He changed his tactics and came with me to the Johnny Dark Side. He bought an existing single family home and is doing absolutely nothing about it that requires special permission. In no case does he draw attention to the place or do anything abnormal. And it will never violate zoning regulations or the building code. No sir.
In this case, the existing home is renovated to a high standard and will eventually contain three luxury master suites. Each will have high-end amenities such as a private bathroom, a bar with a high-end sink and a separate door leading to the large garden, swimming pool and barbecue. The property is already equipped with a large parking lot for several vehicles. This is absolutely, certainly, of course, hand on heart, NOT a de facto three unit apartment building. No Madam.
He just intends to live in this house and hire a few roommates.