Submitted by PublicCommenter t3_11x56x9 in pittsburgh
Gnarlsaurus_Sketch t1_jd2g0av wrote
Reply to comment by askmeaboutmysciatica in Let's pour one out for the developers of Pittsburgh by PublicCommenter
So you’re glad the zoning review fee has gone up 1600%, ensuring less new housing gets built, which keeps the housing stock shittier and more expensive?
If only there were a more tactful way to encourage more equitable development instead of punishing and discouraging all development with extortive fees. /s
What a short sighted take. Keep Pittsburgh shitty!
ktxhopem3276 t1_jd3529u wrote
Your using a statistic about how much the fee went up to get sympathy for developers. What is percentage of the development cost? Is the fee really the impediment to development or is restrictive zoning, excessive litigation and lengthy revisions the real issue? Can these developers discuss logistical issues to speed up reviews instead of just being money grubbing cry babies anytime they have to part with a believed dollar. A lot of the mega developments that pay the most fees get huge tax grants anyway. I’m looking at you walnut capital and piatt esplanade.
Willow-girl t1_jd2nw94 wrote
> extortive fees
Reminds me of the way Detroit used to charge (IIRC) $9,000 for a permit to tear down a derelict house.(And thus it became a tradition to set them on fire on Devil's Night. Would you look at that? It burned to the ground ...)
AirtimeAficionado t1_jd3dd5c wrote
These projects are, in all cases, more than $100 million, if not $200 million in cost. This has no impact whatsoever on any project moving forward.
Gnarlsaurus_Sketch t1_jd3idfl wrote
Just because the numbers are large does not mean the money is unlimited. Fees and regulatory process have a huge impact on whether projects not only move forward, but also whether they are proposed in the first place. Especially when the fees are levied in percentages and non-refundable.
Demand and prices in Pgh (or even much more expensive cities) aren't nearly high enough for developers to build with no regard for costs.
Your impression of the business likely comes from memes, TV, and a certain orange tinted ex-president.
Also, higher fees affect smaller and mid sized developers the most. Want to make sure only big developers can build? Jack the fees up and make the review process an unpredictable quagmire without a reasonable time frame.
AirtimeAficionado t1_jd3q6kg wrote
- The primary factor here is the yield projects command, which influences the financing a project can gather and the rates with which that financing matures. These fees have no impact on a project moving forward, period. There is still considerable demand that allows for prime yields (10%+), even with an increase in this fee.
2)These new fees are not fixed, they are variable based upon project costs, which means they will not have an outsized impact on smaller developers.
I do not need to be condescended to on this issue. I am telling you the reality of the situation. There are plenty of things that are insanely expensive and non-refundable in this process, this is a drop in the bucket. It’s only a concern for developers because it will help the city adequately staff DCP and hold proposed designs more accountable than we are today— which is ultimately a good thing.
Gnarlsaurus_Sketch t1_jd3x6fg wrote
Raising fees while interest rates are skyrocketing effectively kicks the projected yield rate while it's down. Use all the buzzwords you want, it won't change the fact that this fundamentally discourages development because it decreases the yield rate. Developers who have already submitted proposals might be more likely to move forward, because of their sunk costs. Developers who haven't already committed could decide to build elsewhere.
Even though they are assessed at a percentage rate, the fees still affect smaller developers more because the fees are a larger percentage of their net worth than they are for bigger developers. It's the same principle that renders a percentage based flat tax unfair. Even though it's the same percentage, it affects the little guys way more.
More staff to enforce the shitty zoning we have isn't a good thing unless we reform the zoning first. Other existing expensive non-refundable costs aren't a valid excuse to impose new ones.
AirtimeAficionado t1_jd48ui4 wrote
I’m not sure what you’re on about, this is written like an AI language model would write something after being asked to integrate a new term it isn’t really familiar with— in this case “yield.”
The yield is assessed versus the entire construction cost of the project— why I mentioned that in the first place— which is why these sums do not really matter. It’s equivalent in cost to something like four days of a tower crane rental, and does not have a substantive impact on developable yield. Period.
And these developers— Millcraft, Walnut Capital, etc— are not building elsewhere. Development is a field highly dependent on local knowledge, and these firms exist with portfolios exclusively in this area for this reason. The city-especially areas like Oakland— remain extremely compelling for development by anyone, but are particularly important to these local development firms because they have a strategy and portfolio hinging on almost exclusive development here. It would be far more costly and risky for them to go elsewhere. They are not.
Increasing interest rates and inflation matter, but are happening regardless of this policy. These are much larger costs, and the real thing holding development right now. Developers could still build in areas like Oakland in this climate, but are waiting on doing so because they foresee lowering interest rates in the future which will reduce ultimate project cost.
I’m not sure what you’re saying about the “little guys,” but the percentages outlined here should be the same or lower for them— before it was a flat rate of $15,000, now it is variable on project cost.
And I agree the zoning needs to be improved, I am arguing it will improve as a result of better staffing from better funding. I do not know anyone at DCP that is happy with the way things are going, but they are currently underwater and are struggling to keep things moving. This should help, not harm, zoning efforts.
askmeaboutmysciatica t1_jd2glcz wrote
Found the developer
waddersandwich t1_jd38ilw wrote
Not all developers are bad. Pittsburgh just makes you think they are because it's only the huge, mega-corporation, conglomerate developers that have the resources and cash to get anything done. And those developers suck soooo much. Pittsburgh zoning all but eliminates small-time developers who really do want to improve their communities. Compared to other cities, it's absolutely insane. Cities need development and when the only ones who can afford it are the plain Jane corporations that only care about dollars in their spreadsheet, you get a shitty, boring city.
Gnarlsaurus_Sketch t1_jd3jd0s wrote
Exactly what burdensome fees, abysmal zoning, unpredictable government response, and a regulatory quagmire of a review process tends to do.
Pittsburgh's relatively low housing prices also limit potential profit, so along with the fees and unpredictable review process, the only way to reliably profit is to go very large scale and exploit local political connections.
Gnarlsaurus_Sketch t1_jd2hl5t wrote
Gainey has been in over his head since he took office, and the foundering hasn’t improved over time. Classic one term and done mayor.
Ever take an economics class?
tbst t1_jd2ibd1 wrote
Bill Gatti, how did you choose this username?
Gnarlsaurus_Sketch t1_jd2j6p9 wrote
Skiing in a little town called Assspen.
69FunnyNumberGuy420 t1_jd2sjf2 wrote
> Ever take an economics class?
Ah, economics, the "science" that assumes everyone is a perfectly rational actor that does exactly what is best for themselves every single time.
Gnarlsaurus_Sketch t1_jd2xftw wrote
Behavioral economics makes very different assumptions than the rational choice theory you're describing. Also, many if not most seemingly irrational decisions can be explained by incomplete access to information or people valuing money differently.
Yours is a common and, to some extent, valid criticism of classical and neoclassical economics. That said, don't throw the baby out with the bath water here.
69FunnyNumberGuy420 t1_jd2xw51 wrote
Economics exists as a "science" to backfill an explanation for what the capital-holding classes want to do anyway. You know that and I know that.
My favorite economics story is from the book Princes of the Yen, wherein Japan sent their youngest and brightest minds to Chicago to learn economics, and they took what they learned there and trashed the Japanese economy for over three decades and counting. Good stuff.
Gnarlsaurus_Sketch t1_jd31k2r wrote
>capital-holding classes
lol, that's a loaded phrase if I ever saw one. I've been called worse.
I'd chalk Japan's lost decades up to too much micromanaging by the Bank of Japan, a liquidity trap, and bad demographics (birthrate too low).
69FunnyNumberGuy420 t1_jd31ujj wrote
> I'd chalk Japan's lost decades up to too much micromanaging by the Bank of Japan,
Read the book, the entire issue started when the Chicago School guys came back and said BoJ meddled too much that they had to move to a "free market" solution since those were the only thing that worked. Whoops!
https://www.amazon.com/Princes-Yen-Central-Bankers-Transformation/dp/0765610493
Prior to the 1980s Japan had basically a command economy pointed towards producing consumer goods.
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