Are Local Cities Delaying Build-to-Rent Projects?

So what's it like working with local government when you're looking to build a rental property? And in what ways can you expect them to slow down the process before you're able to get your project finished?

Watch the full episode here: https://youtu.be/6uHbi4-LkHw

Usually, you want a little bit of time to do your due diligence and walk through the whole city process. Right now, we're seeing major delays in the cities coming from COVID I guess... maybe some of them got laid off, I'm not sure.

Chase Leavitt

There was a moratorium in Caldwell, Idaho.

Steve Olson

Caldwell, Idaho. Yeah, they, they screwed up. The city screwed up on taxes, and they just weren't collecting enough revenue. They froze everything, right? I actually think it was the state that said that you can't raise property taxes more than a certain percentage.

And it kind of froze a bunch of the cities in their tracks. Because with all the new construction they had approved, they're like there's no way we can support this. If they're capping how much that we can raise property taxes. Caldwell, Idaho is one of them that said, well, no moss. We're not going to approve any new developments until we get our arms around this.

Chase Leavitt

And we could probably speak to Syracuse a little bit. Our project that got not denied, but it didn't go through. We're super bummed about it. It wasn't backed up from the city. But I guess the delay that we saw there is they weren't willing to approve it. Because they were going through a change or city council change. Right? They're having voting for that year, there was an election and I was looking for an election year. And so they weren't really well. They were delaying approving the project.

Steve Olson

Yeah, the city councilor doesn't want to approve a semi-controversial multifamily project right before an election. Yeah, let's do that right after the election.

Sherida Zenger

They were also looking at what was going on around us saying, Hey, we're thinking maybe this is the hospital going in? Do we really want this to be multifamily? So we kind of got blacklisted.

Chase Leavitt

We saw a very unique delay within that city to where we could move forward is very risky to move forward without getting that preliminary plat approval. Well, and

Steve Olson

Then it's important to note that not only are you going to get delays on whether you can move forward or not. But once you've been given the green light, you've got your approvals, these hoops that you have to jump through, it just takes longer, right. Part of that is the fact that the city of Phoenix has been driving me crazy. lately. We're waiting on a number of approvals.

And I'm talking not just the metro, the city of Phoenix, it's taking a long time to get anything done. These guys were understaffed as is and then COVID hit and there's this massive demand for new construction. asked me if they have hired anybody new. In fact, it's really hard. It's hard to hire anybody for anything right now. Let alone Hey, come work for the government.

Sherida Zenger

But they're working remotely too. And so that's even more difficult.

Steve Olson

That's another problem. Yeah. So not only are they understaffed, that city is still hiding from COVID. Right? Remember, when COVID first hit, I was filling up for gas one day, I thought, am I gonna get COVID at the gas pump? Right? The guy that pushed 85 octanes ahead of me? Did he have COVID? Right.

So some people are still living that way. If you are, then that's your prerogative. But that's it's slowing down development massively and by not allowing people to be an office, that city workers who have to work with, with clients and other different apartment departments and engineers, it's just going to be slower. When you're working remotely like that.

Sherida Zenger

Yeah, when you're only communicating via zoom or phone calls or emails. It's, I mean, you understand how being face to face is so valuable, right? Yeah, you can get so much more done in that time. I know we have a project that we're waiting on. Final plat approval on. We were told originally we would have that in July and now it looks like it's gonna be pushed back to you know, the end of November.

Steve Olson

Yep. They just keep pushing back.

Chase Leavitt

And the last thing I'll say about city delays is that people want to build right now. So you have a lot of builders that are submitting these, these plans with these plants and they're wanting to get those approved. So just get in line, I guess.

Steve Olson

Less city staff, the staff that it is not as efficient. And there's as much demand as there has ever been for their service. Yeah, their backlog. You got to scale up.