The Politics of Real Estate Development
Does your project have community support?
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Before I joined a big real estate development shop, I thought our business was just about building fantastic projects in the right neighborhoods. Little did I know...
A few days into my time at the “big shop,” I attended a public meeting to discuss how our project would fit into the surrounding community. There was a gentleman who owned a one-bedroom condo next door, and he was extremely worried about potential shadows on his unit. My boss spent a good deal of time listening to him and discussing how we could shift the entire massing of the building to better suit this community member’s needs. We’re talking about a 450-unit multifamily development with three towers over a retail podium—no small adjustment. But my boss assured the condo owner that we could move the apartments into two towers closer to the front of the property, which alleviated his concerns.
As a young guy learning the ropes, I asked my boss after the meeting, “How much of that are you actually going to try to do?” He simply said, “All of it.”
I was floored. “How could you let the neighbors push you around?” I thought. However, I soon realized that my boss was a great developer because he listened to the community and integrated their ideas into his projects.
A few weeks later, at a formal public meeting, I expected my boss to present our project and take comments. Instead, he gave a short presentation on the changes we made, and then the floor opened up for questions.
A long line formed at the microphone. I was nervous. Were we about to face a barrage of negative feedback? I hoped we were prepared.
To my surprise, the line was full of people from the local community and union groups, all speaking in favor of our project. Our senior team had spent the previous three-plus months reaching out to these groups and winning their support.
At the “big shop,” I learned that real estate development is a business where politics play a major role. You need public support to make your vision a reality. And once you’re done, it’s not really “your vision” anymore—it’s a collective vision shaped by input from public officials and community members.
At first, I was concerned. “How could we let other people dilute our great concept?”
But not long into my time at the “big shop,” while working on approvals for a large project (more than 1.5 million SF), I learned something important.
The beauty of real estate development isn’t in forcing your idea through. It’s in presenting an initial concept and thoughtfully integrating input from the community.
The outcome is almost always much better than you might expect.
Never underestimate the value of others’ input, especially on large development projects where there are always elements you might not have considered.
Here are some areas where politics comes into play in real estate development:
Zoning and Land Use Regulations: As a developer, you must be aware of the land use regulations and any proposed changes.
Permitting and Approvals: Without community support, getting project approvals will be challenging.
Affordable Housing Mandates: What are the local, state, or federal affordable housing mandates?
Public Subsidies and Incentives: What public subsidies or tax incentives are available to support your project?
Community Support or Opposition: How can you effectively build support for your project and engage with those who disagree?
Environmental Regulations: What environmental regulations need to be considered, and are there any proposed changes that might impact your project before you receive the required approvals?
Gentrification and Displacement: How will your project impact the neighborhood?
Infrastructure Development: What infrastructure projects are approved in your area, and how will they impact your project?
Lobbying and Political Contributions: Who do you need to support?
City/County Long-Range Planning: Does your project align with the municipality’s vision for its future?
Many people get into real estate development because they want to build great places for people to live, work, and play. But in reality, it’s about developing a long-term strategy, monitoring the regulatory environment, and finding the right support to advance your vision for the community.
Cheers,
John
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