To continue on this week’s political trend, I wanted to take a moment to share an extremely insightful book with all of you having to do with real estate, specifically, land use and zoning. Most developers are familiar with the acronym NIMBY, which refers to the phrase “Not In My Back Yard.” What many developers do not seem to realize, however, is that all ground up development is as much, if not more, an exercise in politics as it is an exercise in real estate. P. Michael Saint, Robert J. Flavell and Patrick F. Fox of the Saint Consulting Group in Boston have done a tremendous job not only of exploring the dichotomy between the two, but exploiting the process in favor of the developer. Regardless of whether you want to develop an urban infill location, a brownfield, or an environmentalist-heavy rural sprawl, there are do’s and don’t’s during the approval process. Failing to follow certain procedures can kill your deal and make it exponentially harder to resurrect. Play the game the right way and you can win over even your most ardent opponents. Let’s take a look at some of the book’s finer points…
1. All Politics is Local, All Land Use is Political
What does psychology have to do with real estate development? Well, way more than you’d think, that’s what. “Politics is not about elections…Politics is about how people define themselves, their society, and their environment, including their quality of life.” As the authors go on to point out, this seemingly obvious observation is the crux of why real estate developers face opposition in the first place. Every citizen may agree that certain public developments are needed in the community, they simply do not want it anywhere near their home because it could affect anything from traffic patterns to their home value. Once a development becomes in any way personal, it becomes political, because people have a habit of getting loud about things they oppose far more often than things they are in favor of (Town Halls anybody?)
2. Why Common Approaches Don’t Work
Possibly an even bigger issue is that many real estate developers believe they know how to influence the decision makers. Just because they are chummy with local politicians, they too often forget that friendship or even small campaign donations pale in comparative importance to getting re-elected to a local politician. If too many citizens make too much noise, they are not going to vote to approve your project. Worse still is that many developers naively think that because their project provides so many benefits to the community, that any opposition must stem from ignorance. If they can educate the public as to the pros of the project, they will be in the clear. But this approach is laden with poor assumptions. You expect a community leader to make a risky political commitment before re-election? You expect citizens to blindly follow community leaders and ignore they own personal concerns with the project? You expect everybody you talk to to be malleable judicious and logical? Ha!
3. Why Use a Land Use Politics Approach?
“A developer who spends two years going through an approval process only to be voted down in the end has wasted both his time and money, and has only two choices: start over or walk away. To throw good money after bad after trying and failing with one or more of the obsolete approaches to project approval seems ill-advised, if not foolish, particularly when a more politically effective method is available.” Now, obviously, having a political campaign manager for a real estate development sounds expensive. And when you compare it to the cost of a direct mailing approach to the entire community, it is surely the more expensive option. But the fact of the matter is that the former works, and the latter rarely does. If I am a developer and I am forced to spend money during the approval process, I’d rather spend more money and increase my probability of winning ten fold than save a few bucks, while still likely to fail.
In closing, I strongly encourage EVERY developer, and those peripherally involved or interested in the development process, to pick up this book. Unfortunately there are too many salient points in this book to include in a blog post book review. But if you are in real estate, and there is one book you are going to read this year, I strongly suggest NIMBY Wars. With more and more development projects seeking public financing, the value of understanding the political elements of land use are all the more vital to your success.