In Toronto we have something known as Development Charges. In the US, they are more commonly referred to as Development Impact Fees, which in my view, lends a certain precision to their intent.
The idea behind these fees is that they account for some or all of the off-site public costs required to serve a new development. Initially this meant utilities, but today these fees usually include everything from transit and parks to child care and pedestrian infrastructure.
According to Wikipedia, the first impact fees were implemented in Hinsdale, Illinois in 1947. By the 1980s, impact fees had become a universally accepted mechanism for funding the costs associated with growth.
Not surprisingly, there’s substantial case law around impact fees. One of the concepts that comes up a lot is this idea of essential or rational nexus. That is, can the fee(s) be rationally linked to the impacts of a particular development?
One well known example is Nollan v. California Coastal Commission (1987).
The Nollans proposed to build a 2-storey house within the exact same footprint of their current 1-storey house. As an approval condition, the Coastal Commission wanted a public easement across the beach in front of their house.
The U.S. Supreme Court sided with the Nollans and held that the development exaction (public easement) was not adequately related to their new development (additional storey). A “rational nexus” did not exist.
If you’re interested in this topic, the American Planning Association has a policy guide on impact fees available on their website.
For those of you interested in real estate development (and architecture), the New York Times recently published an article about New York developer Harry Macklowe.
At 80 years old, he has been in the business for almost 60 years and he has what some might describe as the typical developer story. He has seen ups. And he has seen downs. As a result of the 2008 economic crisis, he was forced to give up seven landmark properties in New York.
The article doesn’t paint a particularly nice picture about developers. It talks about how he demolished several single room occupancy hotels in midtown Manhattan (hours before a new moratorium was set to go into effect) and how he recently filed a lawsuit against his son, William Macklowe. After their relationship went south, William went off and started his own real estate company and presumably that is causing some problems.
There’a also mention of a book called The Liar’s Ball, which I am pretty sure would be a good read:
Real estate “is not an industry full of camaraderie and good will,” said Vicky Ward, the author of “The Liar’s Ball” (Wiley, 2014), a book about Mr. Macklowe and the G.M. building. Developers “are set up to dislike each other, yet occasionally they do come together to partner.”
If the real estate business has anything, it has characters. Click here for “Harry Macklowe on New York Real Estate.”
Earlier this week the Seattle Times published the following graphic showing the US cities with the most (construction) cranes up in the air at the end of 2016:
At the top of the list is Seattle with 62. And in second place is Chicago with 56.
You really need to see these numbers over time to get a better sense of activity. But supposedly, Seattle has been holding pretty steady. Also, these numbers only include cranes within each city proper. The suburbs don’t seem to be counted.
To put these numbers into perspective, here’s a snippet from the article:
“Seattle remains behind Toronto, which has 81 cranes, for the North American lead. In Australia, the Middle East, and elsewhere, there are cities where more than 100 cranes are at work.”
I wonder which city has the global lead. Any guesses?