The development process is defined by variables. A successful developer identifies, monitors, understands, and attempts to control these variables. Most development projects require the developer to be prepared to negotiate with any number of parties, and much of the time, the tie-up or acquisition of the property is only the first step in a long process. For many projects, the discretionary approval process at the local level, commonly called entitlement, is the major consumer of time and resources. It is through this very process, however, that value is created. Gaining an understanding of the legal aspects of land-use regulation in general— and entitlement in particular—can help developers effectively identify and manage risk. This paper provides an overview of the procedural and legal underpinnings of the entitlement process in order to illustrate the risks involved. Several techniques for creating value and mitigating risk, as applied through the approvals process, are also discussed.
What happens when the ideology commonly referred to as “New Urbanism” meets the dreaded consumer preferences of automobile-addicted sunbelt cities such as Dallas, Texas? New Urbanist ideology permeates current planning policies and influences many discussions in the development community around sustainability and sprawl. Yet policies and hopes often take on a different identity entirely once molded by the preferences of the American consumer. New Urbanism offers potential solutions to many of the problems associated with suburban sprawl in the United States, but it is no panacea. Ideologues and opponents may debate its merits and shortcomings, but it is the consumers’ votes in dollars and cents that ultimately render the verdict in practice. The market dynamics of sunbelt cities present challenges and preferences different in many ways from higher density cities on either the west or east coasts. Recent developments show that New Urbanism, and mixed-use development in particular, offers competitive differentiation and may be extremely successful in the sunbelt. Yet the ideology does not meet all needs of this market, and the development community must carefully analyze what elements of New Urbanism will work in practice and which will not. This paper will provide the background of New Urbanism and explore the view points of its proponents and opponents. Finally, two developments in Dallas, Texas will be used as case studies to illustrate how the debate has manifested itself in the sunbelt and what each teaches about the viability of New Urbanism in this type of market.
Editorial Board, Cornell Real Estate Review; Zell, Sam (2008-07-01)
[Excerpt] In October 2007, Sam Zell was the keynote speaker at the Cornell Real Estate Conference, aptly titled “Real Estate Titans.” Zell, equally well-known for his ebullient personage and his contrarian investment philosophy, had recently completed the now legendary EOP sale to Blackstone, and was moving toward closing the deal for the Tribune Co.
Thousands of Floridian families in need of affordable housing rely on privately-owned multifamily rental apartments that were constructed under federal government programs in the 1960s through 1980s. The terms of the subsidy programs and the age of the structures now cause many units to be faced with a high risk of loss to the affordable housing stock. Units are lost as a result of conversion to market-rate housing upon the prepayment or maturity of a subsidized mortgage, or the expiration of a rental assistance contract or use restriction. Units are also lost through physical deterioration and mortgage default. Preservation of affordable housing has been hampered by a lack of multifamily housing research and data. This paper describes the creation of an assisted housing inventory and the analysis of property characteristics as an approach to identify properties most at risk of loss and to steer preservation policy and funding. This risk assessment approach is applied to Florida’s assisted housing stock. For units at risk by 2015, it found that the majority receives project-based rental assistance, that all population groups are impacted by the potential loss, that almost half have non-profit ownership, and that only four counties house almost 50 percent of atrisk units. Rent restructuring, debt restructuring, additional funding programs and property tax relief are described as preservation strategies.
Editor’s Note: Last year’s edition of the Cornell Real Estate Review featured an article by Mark Nadel presenting a criticism of the traditional real estate broker fee structure, the perceived value of brokers’ services, and alternative compensation methods that, from the author’s point of view, would better serve the public (“A Critical Assessment of the Traditional Residential Real Estate Broker Commission Rate Structure” Cornell Real Estate Review, Vol. 5, pages 26-46). Following the article’s publication, Barbara Nichols, a seasoned residential broker in Los Angeles and Cornell alumna, submitted a rebuttal to Mr. Nadel’s stance. If a scholastic journal’s aim is to provide a platform for staging new ideas relevant to its trade, so should a journal encourage germane issues to be concurrently or sequentially debated. Thus, in the spirit of thought provoking debate accompanying an academic journal, the Cornell Real Estate Review presents Ms. Nichols’ defense of the residential brokerage industry.
[Excerpt] Dear Readers, Welcome to the sixth volume of the Cornell Real Estate Review, a publication of the Cornell University Program in Real Estate. This volume continues to reflect the nexus between theory and practice that is a hallmark of the program’s curriculum as well as the mission of the Review. As this issue is being sent to press much uncertainty remains regarding the nature and duration of this down cycle. Now more than ever, we see the relevance in bringing together scholarly discourse and professional expertise to gain a fuller understanding of the issues confronting the industry and where to go from here.