Fearmongering. Disinformation. Hostile opposition. No, this is not the lead up to the next election, but the reality in zoning and city council approvals for real estate projects.
Real estate developers are not always welcomed with open arms in local communities. Instead, resistance from city council members, planning and zoning commissions and residents has become the new normal, making it that much more important to address community concerns – some warranted, some not – before moving forward on a project. But I have noticed that certain types of real estate development receive far more than their share of scrutiny and opposition than others.
In fact, there is a trend toward local governments putting blanket bans or limitations on projects they see as less desirable. While this move may provide temporary relief for a problem, it actually stands in the way of long-term solutions and the free market economy.
Restrictive zoning codes prohibit new construction of apartment buildings in cities hit hardest by housing shortages, like San Francisco and Los Angeles, crushing supply as demand continues to rise. Affordable housing in particular faces a “not in my backyard” attitude that also extends to senior living facilities and tiny houses for the homeless. And in self-storage, the industry I specialize in, municipalities across the country are placing moratoriums on new facilities to try to cope with rapid growth.
In all of these examples, myths based on fear or misinformation drive the narrative. I believe sweeping bans hinder economic growth and do more harm than good in a community. Instead of taking a black-and-white approach to development decisions, local governments should trust supply and demand and evaluate each project on its own merit. Here are a few ways we can show local governments that this strategy is mutually beneficial.
Find The Best Use For A Site
Not all locations are created equal. While a city council may dream of transforming every available plot into a trendy retail area, that’s simply not realistic. The main question we should be asking is: What is the best possible use for this site? What can it reasonably be used for? What are its challenges and limitations? Have there been any offers at all to purchase it?
In the self-storage industry, we are rarely vying for the same real estate as developers in retail, multifamily housing or office space. Storage can’t be competitive in bidding at that level of pricing. It’s simply not the use with the highest rental rates or the most density. The locations we are interested in would generally benefit from our development. If a plot is zoned industrial and backs up to the train tracks, for example, it has limited options, and self-storage is easily preferable to an empty lot or a facility that can be put there “by right” like a concrete batch plant.
Despite whatever common logic exists to support the development, getting this message across requires patience and persistence. If you believe in a project, be prepared to plead your case multiple different ways. Our company just received approval on a site that the city council voted down three years ago. This time after the area around the site had matured, the sensible mayor believed our proposal was the best possible use for the parcel, and he brought the council around to his point of view.
Improve Curb Appeal
Local governments and residents often fear that a new construction will be an eyesore in their community. It’s up to us to assuage their worries and prove that our interests align with their own.
Invite the city to look closely at your company’s track record before making a decision. What similar projects has this company completed in other cities? What were the positive and negative outcomes? How do the city and the neighborhood feel about the project now? By asking the right questions, they can gather enough information to make an informed decision.
Local governments must be discerning about which projects they grant approval, of course, but they should do so on a case-by-case basis.
If you do receive approval on a project, go out of your way to be a good neighbor from the beginning. Talk to people who live nearby, answering questions and giving them phone numbers to call if they have concerns. When our company is building a new facility, we make an effort to meet our neighbors and debunk any misconceptions they may have about self-storage. We express our commitment to building an attractive, well-maintained facility that adds value to their neighborhood – and then prove it by investing in modern design, quality construction materials, good lighting and proper security.
Address Community Needs
Cities are constantly changing, and so are the needs of residents. To make a stronger case for your project, look beyond just your company’s goals. Identify all the ways your project will benefit the city as a whole. Are you bidding on a land parcel that wouldn’t bring in city tax revenue otherwise? Will your business create new jobs in construction, management, maintenance, IT or other fields? Will you be installing infrastructure, like water and sewage lines, that will make it easier for other businesses to start in the area? Emphasize how your presence will give back to the community for the long term.
For many of our self-storage projects, we are building on parcels that would be challenging for other businesses. We can “rightsize” land parcels that may have too much acreage of depth by putting a facility in back, thereby making the site more appealing for more uses up front. Our facilities can fit land with unusual topography or provide a visual or sound barrier next to freeways, utilities or railroads. Flexibility is also key. Many of our recent projects are mixed-use sites, combined with offices, retail space or flex services that are coveted by tenants. As a bonus, this checks the box for city councils that think the site could have other uses.
As real estate developers, we have to work to dispel myths and act on sound reasoning and a site’s true feasibility. When we encourage local governments to avoid far-reaching bans and assess each project individually, we can do what’s right for our companies and our local communities – because at the end of the day, what good is real estate without local customers to support it?