Posted by Brandon Copeland
It’s incredibly interesting to me, living in Atlantic Canada, when people oppose real estate development. Growing up in Nova Scotia, I heard often how important it was to preserve downtown Halifax. Moving to St. John’s in 2007 I encountered an even more vocal anti-development crowd. At least, that’s my read.
Now don’t get me wrong. Being pro-development does not mean being anti-heritage, or anti-affordability, or anti-anything really. In old cities, like the two I just mentioned, it is integral that the heritage and culture of a city be preserved. St. John’s and Halifax are what they are because of their history, and development that would damage this history has no place in these cities.
So to be clear, I’m not talking about all proposals. I would be right there on the picket-line if someone wanted to knock down the Basilica to replace it with a condominium.
However, it isn’t major heritage structures that seem to receive criticism and earn advocates. When it comes to downtown St. John’s, it seems like development opponents will come out forcefully for, well, any development at all. The most recent case-in-point is the proposed development on the Atlantic Place parking garage. Long bemoaned as one of the worst structures built in the downtown core, the garage received a proposed new use over the summer. The proposal looked to add several stories to the garage, and use this new space as a hotel. The ugly garage would also receive a facelift to make the entire structure appear more modern and uniform. Lastly, there was talk of reviewing the possibility of adding some commercial spaces on Harbour Drive.
Personally, I didn’t find the proposed rendering (seen below and compared to the existing structure) particularly attractive. Architecture is art though, and art is in the eyes of the beholder I suppose. I did like the use – making the structure not just for vehicle parking. I also liked the possibility of a hotel in this part of downtown, contributing to the goal of bringing people to the core of the city. This assumes the hotel will do well, (at a time where hotel occupancy rates are decreasing) but if it works then that could be a real positive for downtown businesses that have been struggling in recent years.
I didn’t see this perspective actively discussed though. There was opposition to the height, opposition to the shadows, opposition to the views that could be blocked, and opposition to the development in general. Social media definitely does not provide confidence that the general public are participating in nuanced assessments. The development was in the downtown core, and it was taller than what’s there now, so it was bad. Case closed.
Opposition to development is prominent here – and I’ve always wondered why people will argue against things that could conceivably help them. After all, the same people arguing against this project and the added downtown density will bemoan the loss of downtown businesses and the reduced foot-traffic during the economic downtown. We can’t want more people downtown but then be against developments that will bring more people downtown.
Turns out, the answer may be pretty simple. People just absolutely hate real estate developers.
Developers Profiting is the Problem
I don’t say this facetiously – I really enjoyed reading this study that came out of UCLA this year. Let me copy and paste the portion of the abstract that touches on the research purpose and findings:
“Problem, Research Strategy, and Findings: Opposition to new housing at higher densities is a pervasive problem in planning. Such opposition constrains the housing supply and undermines both affordability and sustainability in growing metropolitan areas. Relatively little research, however, examines the motives behind such opposition, and much of the research that does exist examines only the opponents’ stated concerns, which may differ from their underlying reasons. We use a survey-framing experiment, administered to over 1,300 people in Los Angeles County, to measure the relative power of different arguments against new housing. We test the impact of common anti-housing arguments: about traffic congestion, neighbourhood character, and strained local services. We also, however, introduce the idea that local residents might not like development because they don’t like DEVELOPERS. We find strong evidence for this idea: opposition to new development increases by 20 percentage points when respondents see the argument that a developer is likely to earn a large profit from the building. The magnitude is double the increase in opposition associated with concerns about traffic congestion.”
The entire research report is worth a read, but the summary says quite a bit. There are plenty of reasons that people utilize to oppose development, but the report suggests underlying biases strengthen these sentiments. Quite frankly, it sounds better to say you are standing up to traffic congestion even though your main issue is that you hate those blasted developers! They’re worse than lawyers!
More often than not, it is opposition to developers in general, and their profit motives, that leads to anti-development sentiment.
Now, this article was specifically about high-density housing, but can the same logic be applied to something like the Atlantic Place hotel? I’d argue yes. The key takeaway is that people are more likely to oppose a housing development if the profit of the developer is front and centre in their thinking. Certainly then, when development is specifically business related and not at all tied to increasing the housing supply, this sentiment is likely the same if not more significant.
Why This Is Problematic
The sad reality is that opposition to development for the reasons presented (profit) is both misguided and detrimental to the places we want to see improved.
Profit is a tough one to track, but level of profit tends to be directly tied to level of risk. Brandon Donnelly, someone I quote often, talks a bit about this in one of my favourite posts of his of all time, “What Real Estate Developers Do and Why I Became One”. Donnelly describes developers as “effectively the entrepreneur that make a new building happen. They go out and buy the land, they put a team in place, they get the necessary approvals to build, they finance the deal, and they get a builder to actually construct the project. Developers are like an orchestra conductor. They don’t play any instruments, they just direct the performance.” Donnelly continues, “…developers assume 100% of the risk of the project. If the building fails (because you can’t sell units or lease out space), that all falls on the developer (and his/her investors). All of the other team members are getting paid based on services they provide. They’re consultants. This distinction is what (can) make real estate development so lucrative – with risk comes reward.”
We talk often about the importance in entrepreneurship in our economy – so too should we talk about the importance of developers in our built environment. We, as a community that wants to grow and thrive, need to encourage creative ideas and pursue exciting new projects. If there is no incentive, then there will be no interest. If there is no interest, then we will forever be stuck in limbo. I have heard from several developers that St. John’s is not an attractive place to pursue projects because of the anti-development sentiment. Imagine wanting to grow small businesses in the city, but being starkly anti-entrepreneur. It’s craziness, because it would never happen. So too will our built environment fail to improve and evolve if no one is willing to take the risk and invest. As we shut down projects, we increase the risk associated with investing in St. John’s, because getting to the proposal stage sure ain’t cheap! If development proposals are likely to be denied, than the risk associated with considering building here rises as well.
The other point that builds on the previous is in regards to how detrimental it is to a place if development progress isn’t happening. Forget about the benefit to the developer. Think instead about benefits to the neighbourhood. The Atlantic Place hotel, as an example, could potentially draw new people to the downtown core who otherwise would stay far from this particular site. This site helps the surrounding businesses – business we all know are struggling in the current downturn. This sort of development also solves a problem that people have long had with the Atlantic Place parking garage – offering to reclad the exterior in an attempt to fix an otherwise unattractive building. Perhaps most interesting to me, the proposal suggested exploring the opportunity for retail on Harbour Drive. This is incredibly attractive – Harbour Drive is an unfortunately designed street. One architect I respect greatly has bemoaned Harbour Drive as only getting to see “the ass side of the buildings.” Harbour Drive has no real attractions and no stopping points when walking. Retail on Harbour Drive would go a very long way towards increasing the walkability along our most prominent natural feature – our harbour.
Not Developing Has Neighbourhood Impacts
One thing I always try to do with projects I work on is examine and present how a development will impact the neighbourhood in which it is built. The perception, particularly in areas with housing challenges, is that developers are profiting on something they shouldn’t. As the referenced research paper points out – “…in supply-constrained cities – when people both need housing and have trouble affording it – the mere idea of profiting from it might seem morally inappropriate. In times and places when housing prices do not heavily burden people, property development might be less objectionable.” Simply put, perceptions around developers and their motives can be tied to the experiences of residents at the time that proposals are submitted.
I’m not pushing for the Atlantic Place hotel proposal with this article. What I am stating is that the kickup from citizens is often unfair and unhelpful. One comment that graced my Facebook wall regarding the Atlantic Place hotel talked about how“...downtown is bad enough and needs to be left alone" while also suggesting that "...corporations and other greedy people are competing to have the tallest building and best view.” This sort of mentality very clearly indicates the priority of the individual and their reason for opposition. It has little to do with a true understanding of heritage preservation or urban planning, and lots to do with opposition to people building things in general. It also lacks awareness of how "leaving downtown alone" will contribute to the continued struggles of downtown.
Developers stimulate our economy and improve our built environment. They take the risks that, if executed properly, can create better places. Citizens should embrace development and assess these projects based on their merits, outcomes, and design. With that in mind, we also should oppose bad ideas and developments that hurt our city or our heritage. However, just because something is tall or modern does not automatically mean it falls into one of those categories. We need to move past distrust of developers and towards embracing real estate entrepreneurs, or our city will suffer as a result.