4 Simple Things Your Town can do Right Now to Make Life Easier for Small Scale Developers

Small-scale developers are the entrepreneurial spirits quietly working to make towns stronger across America. They’re young people like my colleague Kea, who just bought a four-family apartment near her home in St. Louis and is fixing it up for affordable, high-quality housing. They’re seasoned developers like Monte Anderson who, rather than taking the easy path of luxury real estate, chose to stay in their struggling neighborhoods and fill empty storefronts and apartments with new businesses and families.

Taking a structure to the next increment of development is how we create lasting wealth that will support a town for generations to come.

Unfortunately though, while converting a single family home into a modest duplex or renovating a vacant storefront for a new shop should be some of the most basic, simple processes for anyone to undertake, our cities make these sorts of developments very challenging. Rules about everything from how many parking spaces a property needs to how big a bedroom must be end up crowding out so much potential development in our communities. Even the very processes by which a developer gets approval for a project or learns what’s required for that project in the first place can be prohibitive for a small time developer without a team of lawyers and a bottomless bank account.

It doesn’t have to be this way, though. Towns and cities of any size, with any budget, can make basic changes to their local laws that would allow for a blossoming of the type of incremental development that would benefit everyone — from the young couple that can now afford a home to the business owner who can open up shop to the city that gains property taxes from a newly renovated building.

If your city requires a stack of papers this thick just to get approval for a simple addition on a home or business, something is wrong. (Source: Niklas Bildhauer)

I chatted with small scale developers from across the country for their recommendations on basic changes that any city can make to encourage and welcome development. Here are the four things that rose to the top of the list:

1. Simplify the permitting process.

A number of developers I chatted with brought up the convoluted, expensive and lengthy permitting process that so many cities require for even something as simple as adding an extra bedroom to a home or building a patio in front of a restaurant. As developer Andrew Gibson shared, “One of the most frustrating parts about dealing with most municipalities is the arbitrary nature of the process. It is nearly impossible to accurately predict review time, required documents, and total costs associated with permitting and agency required public improvements. I’ve been building for 15 years and am very diligent about trying to nail down the variables, but I am inevitably hit with some new or slightly modified requirement on most jobs. [It's] endlessly frustrating.”

The developers I talked with suggested expediting and simplifying these processes so that they can be clearly followed — and don’t require a dictionary to understand. And if your city is still requiring paper copies of proposals, move it into the 21st century and put that process online.

Cities can also ensure that permitting occurs more smoothly by having all requests and questions go through one office. Many developers I spoke with mentioned that their cities have multiple offices handling different aspects of permitting, and a basic question requires them to run around to five people just to get an answer. 

House permitting in one place with a clear and simple step-by-step process and you will make developers’ lives a whole lot easier — and probably city employees’ lives easier too.

2. Reduce or waive fees for small projects with low impact.

For a small developer implementing a small project — say, converting a duplex into a triplex — the impact fees involved can be utterly cost-prohibitive. “Make impact fees actually correlate to something,” developer Danielle Zeghbib requests. “In Portland, builders pay $20k in system development fees per unit, regardless of whether the unit is a 250 sq ft microunit in an apartment building, or a 3,500 sq ft [single family home].”

When you account for the fact that infill development does not require new roads, street lights or sidewalks, or add much to the municipal budget at all — especially in relation to the tax value per acre that these sorts of developments provide — lowering impact fees is a no-brainer if it means that more vacant spaces will become productive places.

3. Eliminate requirements like minimum lot sizes, parking, floor area ratios and open spaces.

These sorts of requirements drastically limit the ability of a developer to do simple things like add a small unit onto an existing home or build a second story onto a one-floor commercial space. Most of these requirements stem from imagined concerns about over-crowding. In reality, the majority of neighborhoods will not suffer or even look much different if every house is no longer required to have a large front lawn and a two-car garage.

And any concern over a house that looks slightly different than the others on the block should be mitigated by the knowledge that removing requirements about lot size, parking, FAR and open space will allow more people to be affordably housed and more businesses to be able to open. Get rid of these requirements and you open the door to lots of valuable development in your city.

Quiz: Does this neighborhood have single family homes or multifamily apartments? Answer: Both. In the above picture, duplexes and single family homes blend seamlessly with one another. (Source: Tim Evanson)

4. Allow duplexes, triplexes, fourplexes and accessory dwelling units in single-family zones by right.

Permitting the next increment of development — like a single family home becoming a duplex — is the simplest, most low-lift and high-return step we can take in growing our cities. So many of our neighborhoods are full of single family homes that are either empty or occupied by a family that is barely scraping together their mortgage payment each month. Imagine how many more people could become homeowners and live in housing they can afford if we allowed for the creation of some smaller, lower cost units in our neighborhoods. Suddenly, seniors who are getting too old to live alone wouldn’t have to give up their homes and move to a senior center on the edge of town, but could instead live in a unit on the same property with another family member. Suddenly, young families who can’t afford to buy a whole single family home could live in a duplex and gain rental income from the other unit.

Furthermore, duplexes, triplexes, fourplexes and accessory dwelling units (ADUs) can blend seamlessly in any single-family zone so any concerns about “neighborhood character” changing if these developments are allowed by right can be put to rest immediately.

“Allow things to be built by-right, without having to go to a planning commission or city council,” says Strong Towns member Grant Henninger. “That’s the hardest thing for cities to give up, but if there is a good code that ensures the types of development that the commission/council would approve anyway, then there is little risk of giving up that control.”

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If you’re interested in learning more about how to adjust the codes in your city to be more welcoming to developers, check out these resources:

• CNU’s Project for Code Reform seeks to streamline the code reform process by providing local governments place-specific incremental coding changes that address the most problematic barriers first, build political will, and ultimately create more walkable, prosperous, and equitable places.
• The Oswego Renaissance Association produced this report, “A Time to Choose: Working for a Better Oswego” offering several recommendations that would help communities encourage investment and development.
• Lean Urbanism offers several helpful resources for encouraging small-scale, incremental development.
• The Incremental Development Alliance educates small scale developers and also works with cities to conduct “stress testing” on local regulations and helps them create a near term pathway for the legalization of small scale development.

I’ll close by adding a final word of caution to local government leaders who might be reading this article and thinking: “Development? We don’t want more development in our city. We just want things to stay the same…”

Let me offer another way to frame development: “expanded tax base.” Whether it’s new homes or new businesses, an occupied, fixed up space will contribute far more to your community’s tax base than a vacant, empty one. That tax base means the ability to provide better police and fire protection, put more teachers in classrooms, fix up local parks… you name it.

So before you shake your head at the prospect of “new development” because you’re worried that neighbors might oppose it, remember that that new development should be an asset for your community. Of course, some businesses — like a liquor store or a strip club — might not have a positive influence on your city. But chances are, that small apartment building someone wants to fix up and that new shop someone wants to build on a street corner are going to offer far more benefit for your city and your residents than any gut reaction against change might suggest.

Take any one of the four simple steps above and you'll be putting your city on track to welcome more productive development and, in doing so, to become a stronger town.

A huge thanks to everyone in the Small Developers/Builder Facebook group for sharing their input and suggestions on this topic.

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