3-2-1: Enabling Better Places, Village Ventures' New Website, Going Through A Historic District Review, & More
Week #16
Happy Sunday —
Here are 3 things from others, 2 things from me, and 1 picture related to incremental real estate development.
Enjoy!
3 THINGS FROM OTHERS
I.
If you’re familiar with Reddit, then you likely know about Today I Learned (TIL), a popular subreddit where people post interesting, funny, or insightful facts. For example:
Or:
Well, today I learned something as well. Here’s mine:
TIL that many communities are giving away 80% to 90% of the land value that they create through public infrastructure investment.
(Courtesy of Financing Infrastructure with Value Capture by Strong Towns)
It all comes down to how property taxes are levied (sorry, not as exciting as manta ray fishing).
Traditionally, a property’s assessed value is broken down into land value and improved value where both are taxed at the same rate. The assessed value of the actual land is typically static whereas the improved value of scales with onsite development.
But what happens when a town wants to raise money for a new infrastructure project? Usually, the town will pass a resolution to take on debt and then allocate some identified new revenue stream to cover future debt service payments. That new revenue stream could materialize through increased taxes or lease of public property, for example.
The article referenced above outlines several different structures to source this new revenue. But let’s focus on the Development Impact Fee (DIF) and the Special Assessment (SA) as a way to understand the different downstream implications of each.
A DIF is a one-time payment levied on new development (e.g. a sewer connection fee). DIFs make development more expensive, thereby reducing the amount of it and raising its price.
An SA is additional property taxes levied within a defined area where new or improved infrastructure benefits those properties. If an SA is applied to land values (as opposed to improvement values), then it is said to utilize land value return and recycling (LVRR).
Here’s an illustration of the differences between the two:
What’s important is how each method creates opposing incentives for new development—the DIF fee effectively penalizes new development while an LVRR fee penalizes inefficient usage of land (e.g. vacant, parking lots, and underdeveloped properties).
It’s nuanced but there are massive implications for how future development plays out depending on whether a DIF or SA is imposed. My initial reaction was that DIF fees make the most sense given their inherent equitability—properties with larger developments are presumably taking advantage of a larger portion of the infrastructure project and therefore should be paying a larger share of the costs.
But I think the choice between DIF or SA really comes down to the goals of a town within a particular district. Many small towns have issues with underdeveloped properties staying that way indefinitely. Banking on the future development of those properties in order to capture DIF fees that pay for infrastructure may not be a realistic scenario.
Instead, a LVRR fee may be more appropriate. Not only will the revenue be captured starting Day 1 since it is based on the assessed value of the land (not improved value). But it will also motivate landowners to think carefully about the future of their properties. All of a sudden, it becomes more economical to redevelop to the highest and best use given the LVRR fee imposed does not scale with building improvements (only land value).
Of course, this would be a nightmare to try to sell this idea to landowners or speculators that don’t intend to redevelop their properties. Perhaps they’re content with the notion of selling their property for a quick buck once their neighbors have driven property prices up through their own redevelopment efforts. Selfishly, they’re likely thinking: why should I have to pay for infrastructure that I’m not using?
They’re not wrong. If I were in their shoes, I would be saying the same thing. But it’s important to take a step back and look at what is good for the community and town as a whole. If this new LVRR fee is used to fund an infrastructure project required to support density and economic development within a targeted growth district, then the added tax feels justifiable. Anyone that doesn’t maximize the use of their land is ultimately an inhibiter of the town achieving its goals. You’ll never please everyone in local politics—the important factor comes down to whether decisions are driven by the greater community’s goals and needs.
II.
I had the pleasure this past week of connecting with Jacob Hemmerick and Chris Cochran of Vermont’s Department of Housing & Community Development (DHCD)—two impact-driven leaders working on innovative strategies to address Vermont’s housing shortage. Currently in the works is a program to empower and support incremental development throughout the state and I’ve got to say—it’s extremely encouraging to see such a concerted focus on designing progressive housing solutions at the state level.
They turned me on to a guidebook their department released last year called Enabling Better Places: A Zoning Guide For Vermont Neighborhoods. It was written in collaboration with the Congress for the New Urbanism (CNU) whose mission it is to champion walkable urbanism.
Enabling Better Places is intended for any community considering bylaw reform, big or small. It contains clearly-articulated rationale for why communities should tackle zoning reform as well as actionable strategies to achieve the best results. It focuses on Vermont but many of the learnings are applicable across state borders.
Here are a few ideas that I would love to see adopted more broadly:
Reexamine nonconforming provisions. Zoning codes (especially ones established recently) may not reflect the historic pattern of development in town, creating numerous properties that are suddenly nonconforming. This makes redevelopment more onerous and subject to a more stringent review process. But DHCD has a solution: “If the nonconformity exists only because the regulations have not yet been synced with the historic pattern, those penalties should not apply.”
Remove density caps. The dimensional standards provided by
zoning (setbacks, building height, and sometimes building coverage) can be important to ensure that new buildings aren’t oversized or out of character. These standards can be used in lieu of density caps, which tend to inhibit opportunities for smaller buildings to add dwelling units.
III.
“Cookie-cutter” housing isn’t necessarily inferior. Case in point below. Our perception of cookie-cutter housing has just been tainted by the void in architectural creativity that persists in large-scale planned unit developments.
2 THINGS FROM ME
I.
I never have a good answer for people when they ask to see the website for Village Ventures, my real estate business. It’s usually some garbled response of “yes, it’s in the works” or “eff off, I’ll run my business how I want.” (Just kidding on that last one).
I never had a good answer up until now, that is.
Lay out the red carpet and unleash the pomp, folks. And add in a drum roll please.
The Village Ventures’ website is finally here.
Not to set expectations too high, though. It’s not much, but it works—a good foundation of sorts. As we all know, the pyramids weren’t built overnight.
There are quite a few readers local to the Upper Valley so I’ll put in two quick plugs to those of you sharing a backyard with me.
Resident waitlist. I’ve opened up a waitlist for folks interested in renting an apartment in Fairlee or Bradford at either of my current projects. Please feel free to sign up. We’ll be opening up applications on a first come, first serve basis once pre-leasing begins.
Micro-retail businesses. We’ll have two 300 SF micro-retail spaces at 501 Main in Fairlee coming available and are looking to connect with small businesses or entrepreneurs interested in opening up a retail location in a great area.
See the website for more details.
II.
The Bradford Planning Commission (PC) held the public hearing for 61 N Pleasant this past week. As a quick recap, I had submitted an application to convert the existing 3-family into a 7-unit apartment building.
61 N Pleasant is located in the Village Residential district where buildings with 5+ units are allowed by right. A site plan review is still required to allow the PC to check for things like parking, trash screening, lighting, and drainage. But at least we know there won’t be a density issue.
Because the property is also located in the Historic District, a separate review is required to moderate any alterations to the building’s exterior. I was able to combine both reviews into a single hearing since both are conducted by the PC.
The board will remain in deliberative session for a few weeks so I won’t speculate on the outcome of the hearing.
But I will take a second on the Historical District plan review. It was my first time going through the process and figured others might find some useful insight in recounting the process.
Any change to the exterior of a building in the Historic District (any side, not just façade) has to be approved by the PC—this includes changes to siding, roof line, windows, and architectural details. In order to communicate proposed changes effectively, the applicant is expected to prepare some sort of sketch, drawing, or plan that visualizes the alterations.
61 N Pleasant is a beautiful, old building built in 1900. Very neglected, but full of the architectural character that is both visually attractive and difficult to replicate affordably in today’s labor market. Intricate custom millwork and carpentry has since been relegated to the stratosphere of luxury homebuilding.
Below is my submission for the proposed exterior changes to front of 61 N Pleasant.
Essentially, my request was to:
Replace all original wooden windows with new, more durable and efficient fiberglass ones. Same size, different material. That said, I would like to salvage the original windows if possible, but I can’t determine whether that’s financial feasible until I uninstall them and start the restoration process. My goal is to secure the option ahead of time to replace them should I need to later on.
Remove the barn door and the adjacent entryway to the right hand side. The barn will be converted into two apartments with an entrance in the rear. The barn door will be replaced by siding and a window. With the new floor plan, the adjacent door becomes redundant—the space would be better served by a window.
Repair and repaint the existing wooden clapboard siding.
Replace the porch railings and posts with a slightly more modern system. Not only do the existing railings not meet today’s building code (they must be 36 inches tall, not 26 inches), but the porch is missing entire sections that would need to be cobbled together with something of lesser quality and workmanship than exists today (without breaking the bank, that is).
I have received quite a bit of well-intentioned feedback on the replacement of the porch railing system. Both from the PC and others that I have circulated plans to. And after some convincing conversations and exploration into alternative methods, I’ve been able to find a solution that retains much of the original millwork rather than replacing it.
Personally, I tend to gravitate towards minimalist or modern designs. I’m not opposed to ornate and traditionally decorative trim, it’s just not my first choice when developing the vision for a place that I’m renovating.
Despite my personal ranking of design styles, that’s not to say I don’t think old buildings are attractive. Because they absolutely can be. And I’ve come to realize that I’m often quick to discount the aesthetic value of existing architectural details—details that contribute significantly to the character and charm of the building and neighborhood.
I’ll admit I was quick to overlook this as I initially put together a scope of work for the project. It’s easy to fall into the rip-and-replace mindset when something doesn’t align with your initial vision. But, with a large renovation project such as this, I’m learning that the best product is often tailored around what exists today. In some cases, that may even be the most cost-effective approach.
Not to mention the hypocritical nature of striving for energy efficiency while also scrapping perfectly salvageable materials. Sure, embodied emissions only contribute a third of the greenhouse gases that operational emissions do, but still. The optics aren’t great and the adversity towards restoration only continues to feed the American consumer machine.
As a result, I’ve proactively reached out to the PC to retract my request to replace the existing rail and post system. Regardless, I have a hunch the request would have been denied anyhow.
The remainder of the proposed exterior changes I still stand behind—replacement windows, addition of new window rough-ins, and removal of the two doors. Those are absolutely critical to enabling well-functioning apartments. But I feel good about letting go of the request to replace the porch railings. It’s always important to gather community input to help shape the final product, and I recognize the value that the PC brings to the table towards ensuring new development happens within the context of the surrounding neighborhood.
1 PICTURE
I.
“Streets are the front yards for city dwellers and the quality of a street and the variety of its uses relate directly to its livability for everybody.”
— Janette Sadik- Khan
📍 Phillips Square Tactical Plaza, Boston
From: @berkie1
That’s it for today. Thanks for reading. If you haven’t yet, go ahead and subscribe here:
About me: I’m Jonah Richard, a small-scale real estate developer in Vermont. With my company, Village Ventures, I’m currently getting my hands dirty redeveloping mixed-use buildings along Main Street while trying to pick apart and replicate what makes other communities thrive.
Want to learn more about my projects and incremental real estate development? Connect with me on LinkedIn, Instagram, or Twitter.