How We Helped This Business (and Could Help Yours)

Sometimes we are the last chance to save a business from drowning in regulations.

We recently helped a small business, The Grayson, resolve a zoning compliance matter that threatened to shut them down because their c0-housing solution to long term rentals for corporate relocation clients was defined as a “hotel” despite the fact it’s a far cry from a hotel.

Since it would be incredibly difficult to walk through the intricate challenges of their situation in a single blog post, we will try to simplify it.

The Grayson was an AirBNB style co-housing rental that the owners live in.  Unfortunately, such uses (businesses) aren’t defined in the County’s code.  When a use is not defined, it’s not allowed except that the County can interpret what use it most closely resembles.

In this case, their undefined use was found to be most closely like that of a “hotels” and hotels are not allowed in the zone where our client is located.

To solve the problem, we tenaciously pursued a code interpretation that argued our client was operating a boarding house.  And upon securing that code interpretation we helped bring the client into compliance with those regulations, saving the business.

Our client was willing to let us share her thoughts on our work. . .

“Toyer’s firm has a great background and working knowledge of regulations, zoning, and code. Toyer was able to navigate the complexity of county planning department and code, succeeding in getting a resolution that kept our business from having to close. More incredible was the fact that Toyer was successful where attorneys had failed to help us with the problem.  Without Toyer Strategic’s involvement, we would have spent thousands of dollars fighting a losing battle!”  Mariam Zinn, Owner, The Grayson

We’re proud of the work our company does and what it means to small business and entrepreneurs.

Got a zoning or zoning compliance issue?  We can help. Contact us

You Don’t Know You Need Us (Until You Do)

We’re a land use and economic development company.  Most people aren’t sure what that means, but essentially we have three types of clients:

  1. Developers – we help developers get the permits and approvals then need (especially difficult ones) in a timely manner.  We also help them analyze and select locations for their projects.  We also help bridge the gaps where a jurisdiction’s policies, permits and practice don’t quite fit or are not anticipatory of a type of project.
  2. Cities/Countys/EDOs – knowing what it takes to make a project happen, we help advise communities on policies, programs and marketing so that they are more effective at getting the economic development they want.  Essentially, we help these clients get smarter, more strategic and we do it for a better cost structure than “planning” companies.
  3. Small Businesses & Individuals – zoning is one regulation that applies to every business, every non-profit and every individual, so when small businesses run into zoning challenges that are complex and political, we help them navigate to safety.  Click here for an example

Unfortunately, we frequently hear our new small business and individual clients say something like, “Wow, I didn’t even know people like you were out there. . .”

We recently helped a small business, The Grayson, resolve a zoning compliance matter that threatened to shut them down because their c0-housing solution to long term rentals for corporate relocation clients was defined as a “hotel” though it’s a far cry from such.  It would be incredibly difficult to walk through the challenges of their situation in a single blog post (so we won’t try).  But, we’d like to provide you with our client’s thoughts, which she allowed us to share:

“Toyer’s firm has a great background and working knowledge of regulations, zoning, and code. Toyer was able to navigate the complexity of county planning department and code, succeeding in getting a resolution that kept our business from having to close. More incredible was the fact that Toyer was successful where attorneys had failed to help us with the problem.  Without Toyer Strategic’s involvement, we would have spent thousands of dollars fighting a losing battle,”  Mariam Zinn, Owner, The Grayson

We’re proud of the work our company does and what it means to small business and entrepreneurs.

Got a zoning or zoning compliance issue?  We can help. Contact us

 

Additional Factors in Project Feasibility

Companies, especially those in real estate development, have developed comprehensive due diligence/feasibility processes to determine if a project is a go or no-go.

But even the best due diligence/feasibility processes we’ve seen lack an understanding of the ‘political’ elements impacting a project, which often results in one of two scenarios:

1. The company passes on a project in response to a perceived regulatory roadblock, which if investigated further might be easily navigated, or

2. The company proceeds with a project only to run into an ‘unexpected’ political change that threatens the entitlements they seek (e.g. moratoriums, more stringent regulations, emergency ordinances, etc.).

We’ve got solutions and here’s how we help:

  • Political & Regulatory Risk Assessments – We specialize in understanding local and state regulatory systems and we excel at researching local regulatory trends, past project results, changing political winds (example: is the no-growth neighborhood group running candidates to flip the local council/board?).  We can help your company assess the political and regulatory risks prior to your investment.
  • Reverse Engineering of Regulatory Roadblocks – Have you ever passed on a project because you ran into a single regulatory limitation that didn’t fit the project (e.g. allowed % of lot coverage was too low for your home designs)? We help companies assess regulatory roadblocks and design strategies that can change the red flag your seeing into a green light.
  • Maximizing the Project’s Value – What if you could get a little more density?  Shorten your approval by a few weeks?  Or reduce some of your project’s conditions?  We can help with that.  We understand the politics of negotiation, as well as the opportunities to speed up local regulatory processes, and we can assist you in maximizing your next project’s value.
  • Proactive Project Mine-Clearing – Developing relationships, seeking code interpretations, securing code amendments – are all efforts we can manage on your behalf prior to your next project moving forward.
  • Community Outreach – There’s nothing worse than thinking everything is going great only to go to hearing and have dozens of neighbors show up in opposition.  We are experienced at communicating with neighborhoods and adjacent landowners, and we can help your company manage long-term project risk by utilizing the opportunity to address concerns early in the process.

Want to learn more about how we can help your projects?  Contact us.

The National Housing Problem

Availability, affordability, attainability . . . have a few things in common. First, they can be used to describe various elements of a supply demand model (e.g. if it is rarely available, it is rare it’s affordable).  Second, they are key discussion points in housing debates that are growing in importance nationwide. Why?

Fast growing urban markets don’t have enough supply to keep prices under control.  Hence why Seattle is the fastest growing metro (over the last two years) and the metro with the largest increase in home value during said same period. In a different, but similar situation are the rural markets where the few that are built face higher construction costs and are thus generally limited to the high end of the housing market.  Another supply side problem. In both cases regulations have an impact on the supply and thus the affordability.  This article by Dan Bertolet for the Sightline Institute does a fabulous job of explaining how regulations are further driving up housing costs in fast growing urban markets.

But what about the regulations and supply side issues in rural markets?

In many rural areas a regulation induced supply-demand disconnect is occurring because of high construction costs (not land prices), requirements for the same type of urban infrastructure as in a large metro, lower densities, and an inability to reduce other costs of developing housing.  This creates huge gaps in the type and price of housing available.

As a result, developers/builders often seek incentives like moderately higher density, tax abatement and municipal extension of some utilities – requests that are scoffed at by communities as benefiting the pockets of the developer/builder and not the end user.  This is a false assumption.  When fewer homes are built and those new homes come to the market almost exclusively at the top end of the market, this impacts first-time and new-to-market home buyers who become limited to buying homes only when existing owners move up.  This lack of variety in the housing stock and inability for first-time, move-up, move-down and new-to-market buyers to find affordable options in turn stifles rural population growth.

Why is this so important in rural areas?  Workforce.  The competition for workforce is fierce.  Traditionally, your competitive advantage as a rural (non-metro) area has been based on your quality and cost of living (generally).  If housing becomes a challenge for you, then you lose a big part of your competitive advantage.  That is to say if your area has a similar job, an overall lower cost of living and some amenities, but it lacks housing, you will lose out because you don’t have what they want at a price they can afford.  Your community becomes a market for the buyer that makes them feel like their trying to shop at Tiffany’s with a minimum wage job or searching a hardware store for bread, cereal and milk.  In both examples there is a disconnect between buyer and product.

The lack of competition from new housing has even bigger impacts as existing homeowners and landlords seek out and get higher prices and higher rents while investing less in property care and quality.  The lack of housing becomes a disincentive to investing in the existing housing stock.  This is one cause for declining neighborhoods, higher crime (reference the “broken windows theory”) and greater burdens on municipal services that must enforce nuisance codes, inspect rentals and manage buy-out/tear down programs.

As the problem grows, it gets worse.  Rural communities start to see a decline in some property values eroding any gains to their overall tax base.  And employers start to complain they can’t attract workers because the prospective workers can’t find a place to live.  Alas, at a certain threshold your community becomes incapable of attracting the new workers necessary (let alone retaining what you have) to support anything more than ‘replacement’ economic development.

If your rural community wants to grow its tax and jobs base, then you absolutely must address the housing.  While it’s not the silver bullet to future success, it’s a key ingredient.

So what can be done to encourage new housing and new housing investment?

  1. Allow moderate increases in density.  Many rural communities have ore-1980s small homes on small lots.  There were reasons for that type of development: affordability, efficiency and ‘community.’  I often hear elected officials and citizens will say they want to preserve the character of their communities, but they’ve adopted codes and policies that seek big (1/4 to 1/2 acre) lots.  Allowing more density spreads the cost of infrastructure, reduces the cost to develop and creates efficiency for future community services.  It also encourages more affordable housing options.
  2. Waive water and sewer hookup fees.  The theory is that you need to make the new home pay for the system improvements built years ago to accommodate them.  However, in many cases rural utilities have had this available capacity going on a decade or more and at the same time they need more ratepayers to fund current facility maintenance and ever changing environmental regulations that require frequent upgrades.  In the grand scheme of things, having more ratepayers is a better deal for these utilities, allowing them to fund day-to-day operations better, as well as bond for the bigger upgrades and improvements.
  3. Tax abatement (Version 1).  Forgo the first 5-7 years of property taxes on new housing and see what happens.  A buyer that barely qualifies to buy a house (and pay the mortgage, insurance and annual property taxes) will be more encouraged to purchase new housing if they know they have five years tax free to grow their earnings.  This also ensures that these new home buyers are more likely to have the resources in the early years to habitually care for their homes and still participate in retail spending in the local marketplace.  Note that the key word here is forgo, as a community is not losing anything they currently collect, but deciding for the greater good to wait a few years before they get the benefit of something new.  It should be viewed as an investment by the community and not an incentive for the builder.
  4. Tax abatement (Version 2).  Forgo property taxes on the value of any new improvements made to an existing home for 5-10 years.  This encourages the existing homeowner to not only take care of their residence, but to add that additional room, deck, etc.  While the city won’t collect the revenue for a few years, the result is higher collections when it does kick in.
  5. Tax increment financing (TIF).  Infrastructure is the biggest cost burden on new housing in rural areas.  Communities can use future property tax revenues over a period of time to reimburse the developer for a portion of the cost to build the ‘urban’ level of infrastructure that they’ve required.
  6. Municipal improvements.  In some rare and more extreme cases we’ve seen communities acquire land and install improvements to the level of a finished plat in order to entice new home building.  It sometimes can work, but it’s more risky and doesn’t yield home-building overnight.

Client Win: Marysville WA Approves Code Changes

A Win for Our Clients!

Last night the City of Marysville, WA unanimously adopted (7-0 vote) Ordinance 3057, increasing the maximum impervious surface to 65% and allowing building heights up to 35 feet on lots with a 10% or greater slope.  Request a copy of the ordinance.

How did this change happen?  

Toyer Strategic Consulting was retained by a Marysville landowner/developer that was hamstrung by the City’s impervious surface requirements.  The client requested we find a way to solve their problem.  After a brief assessment, our solution was to propose a code change and request the change also allow vested projects to use the minor modification process to gain approval to utilize the new and improved standards.

Our efforts opened the door for the Master Builders Association to propose several additional code amendments favorable to our client and other builders/developers.

How long did it take to get the change? 

58 business days.  The process was initiated on February 15th and required two planning commission work sessions and public hearing, as well as both a city council work session and regular business meeting.

This was a significant victory for our client and the industry due to the impact of the changes and the speed at which we were able move everything forward.

Need a solution for your project?  Contact Us!