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There are developments of non-profit housing in the United States. However, most people see developers as organizations with lucrative returns. It is part of the reason why developers has been hated for decades since they were around.
Based on a research done by Paavo Monkkonen and Michael Manville at the University of California Los Angeles (UCLA), the single most motivating opposition to new development was the idea that a developer would make a profit out of the project. Opposition to new development increases by 20 percent points when respondents learn that a developer is likely to earn a large profit.
At first glance, you might think it is very true. Yet, when you really think about it, it is really not a valid reason to be disliked. On what kind of daily scenario do we actively dislike people who provide us essential service (such as postman service or the bakery cross the street), even when they turn to a profit?
One possibility is that “making large profit” is their one and only goal as the profession. Major real-estate players who buys and sells like a monopoly. But is that the only reason why people hate developers? Aren’t many entrepreneurs being business monopoly?
Second possibility is that those developers making profit “effortlessly”. The only service people see is they have deep pocket to buy, to lobby, to build and to sell. Wait, aren’t other professions have similar traits? Look at those big lawyers, bankers and financial institutions, aren’t they also “effortlessly” making big bucks just by making few phone calls?
So perhaps it is not the nature of the profession being dislikes, is that people who have similar interests in real estate happen to be the majority of our population- home owners/renters. Both cynically see developers as single controller of their property’s value. As most Americans, their house is their single biggest investment in entire life. If their house price is fluctuated by those adjacent development (homeowners afraid of losing value, renters afraid of soaring rent), they might feel pretty threatened.
Moreover, if you look at this issue even closer, you will surprisingly see many of the jurisdiction regulations helps those developers with deeper pocket thrive. They are the one who can endure lengthy public approval process and extract permits. They are the ones who can afford higher construction types (towers, skyscrapers) to meet government’s incentive program. They often need to pay certain impact fee per unit for local jurisdiction to cover the investment in local schools, facilities or roads. If such development is not heavily subsidized, it must commend luxury rent/price to be economically viable. (Typically that means average absorption over 3 years, 6%-13.5% return to the investors, etc.)
So now we go back to our beginning assumption: people don’t like developers because: They make big profit >> Big profit developers control the market price >> People dislike developers even more.
However, if we factor residents’ desire into this equation. You will read the equation as follow: People want livable streetscape, comfortable roads and good schools >> the government put people’s desire into policy >> the developers need to meet the regulation and invest more to new development >> only those big pocket developers can pass the approval >> the market price rise >> people dislike the developers more.
“So how to be a 100% liked developer?”, you might be still curious.
By default, those developers who passed the approval process and keep their promises to the original plan has already been liked. (since there is community engagement during the process) Or
We need to make developer as a solely non-profit profession, so they won’t be seemed so despicable…
Be more empathetic to our neighborhoods and be more creative of using our spaces. There are many strategies and tips in the scorebook could improve your place without blowing the budget.
Notes and Reference:
Opposition to Development or Opposition to Developers? Survey Evidence from Los Angeles County on Attitudes towards New Housing, Paavo Monkkonen and Michael Manville, UCLA
How ‘Developer’ Became Such a Dirty Word, Emily Badger, The New York Times.
“The Salary to Need to Buy a Home in Every State”, Money.com/ November, 2018-
Even though the “community outreach” is not required for all the projects nor for all the approval process, it is to encourage responsiveness to community needs by inviting their opinion during the project design and planning phase. LEED ND has clear guideline on how to involve the community’s input during the development. Such as Community Outreach (1 point): engage the community during the Pre-design, Preliminary design phase . Establish ongoing communication between developer and the community throughout the design and construction phases, and in some cases, after the construction. Charrette (2 points): Conduct design charrette or interactive workshop of at least two days that is open to the public. This charrette will include nearby property owners, residents, business owners and workers during the preparation of conceptual project plans and drawings. Endorsement program (2 points): obtain an endorsement from an ongoing local or regional nongovernmental program that systematically reviews and endorses smart growth development project under a rating or jury system.
Last update on 1/19/2021.