“Updating Albuquerque’s zoning code is among the single most impactful things anyone can do today for our future… It will literally shape the the next several decades of our city.
Done right, it can accelerate the future we want.”
–Gary Oppedahl, City of Albuquerque Economic Development Director
On the evening of September 21st at the convention center, 85 bankers, brokers, developers, planners, design professionals and neighborhood residents worked in diverse teams for three hours to “reality test” the City’s draft zoning code to see how easy it was to use and what kind of new developments it will generate.
What We Learned
- Almost everyone in the room learned something about the development process itself–whether it be some of the challenges in balancing construction costs with locally obtainable rents, or the need for an easier, more predictable process from both the neighborhood and developer perspective, among other things.
- The current, decades-old zoning code is 1,000+ pages. It has grown like sedimentary rock–layer by layer. It has convoluted pathways and often, parts of it conflict with others.
- As such, it hinders development, especially the type of development that many people in Albuquerque would like to see more of. It also provides a painful experience for development that does happen. Streamlining it is essential.
- Sector plans have historically been a key way to envision and implement neighborhood or district development or redevelopment. They also can add a another layer of complexity, even confusion, for anyone trying to develop a property.
- For the most part, current on site parking requirements diminished the quality, and often the very possibility of, development on a site.
- Modernizing the zoning code for an entire city is an enormous undertaking. Envisioning what it will look like and what it will lead to in any one part of the city can be difficult to do by just reading it.
What Is The Missing Middle?
The specific focus at this session was on the “missing middle”. According to Missing Middle Housing:
These kinds of buildings can be found throughout cities across America and in Albuquerque’s historic and older neighborhoods. Since zoning codes were introduced around the 1960s, many of these building types have been made illegal to build today. They’re often classified as ‘nonconforming’ uses, making them literally illegal to build new, despite their existence. What has resulted since the 1960s is neighborhoods consisting almost exclusively of single family homes, no mixed use buildings (like the old neighborhood grocery, shops or restaurants), and a reduction in the diversity of our neighborhoods.
When diverse teams came together at over 20 tables, participants at each one came away with a better understanding of what it takes for development to happen, how the market determines what can get built and how the code can either drag that down in bureaucracy and uncertainty, or set a clear and achievable standard for developers and investors that protects neighborhood character–by design.
Setting the Right Expectations
It is far more efficient for neighborhood character protections to be “baked into” the regulations, not “designed by committee” once a development is proposed. The community should be involved in setting the bar upfront, getting it written into law once and for all, and then only developers meeting that bar can develop. Instead of zoning regulations driving developers away, many communities are streamlining their codes to “advertise” exactly what kind of development they want with the understanding that if a developer can deliver it, they have a clear path to success prescribed in the code.
Getting what we want, however, needs to happen within the constraints of what kinds of rents our local market will generate. As each team learned, rents determine how much the developer can afford to build–size, shape, stories, and amenities.
“If you can’t get the rent needed to cover the construction costs, you can’t build the building!” – John Anderson
While teams learned about how rents in a particular market can make or break a development, some people also reflected on the relationship between zoning and the city’s tax base: by allowing more density, we will generate more tax revenue. One question raised: how can neighborhoods that might tolerate higher density share in the benefits of an increased tax base? Examples exist where some revenues could be invested back into a neighborhood to implement desired capital improvements such as sidewalk repairs, new street lighting, and more.
Our exercise on September 21st was similar to the one hosted by UNM and the local ULI chapter on September 13th, as discussed in our previous article. However, our exercise asked some slightly different questions:
How can the new IDO allow or encourage small scale, neighborhood sized development in the City of Albuquerque?
How can the new IDO allow or encourage mixed-use, mixed income, pedestrian friendly development along high capacity transit corridors such as Central Avenue?
With a similar mix of different stakeholders, this event focused on the work of John Anderson, a small scale infill developer.
John has a formula that anyone can use to develop smaller properties at a reasonable cost, a cost so reasonable anyone can do it. John’s formula explicitly works for people who don’t necessarily consider themselves developers. Often those with some background in construction labor are, in fact, becoming entrepreneurial “solo-preneurs”among the now thousands he’s trained across the US.
Teams of stakeholders and interested folks were created to include a diverse mix of perspectives—from neighborhood residents to city regulators, developers to design professionals. Each table was given a sample site and charged with using the proposed zoning category and draft zoning code to create a development plan and a budget, called a pro forma, that would work in Albuquerque’s real estate market. Sample sites were similar to many found across Albuquerque:
- Single and double lots
- Mid-block lots, with or without an alley
- Corner lots
With teams acting as potential developers, participants got a sense of whether the draft zoning code helps streamline the development process and whether it facilitates the kinds of development we want. The teams were also able to identify potential improvements in the draft before it becomes final sometime in 2017. Participants experienced first-hand the challenges of the development process by working with team of professionals, concerned neighborhood groups and department officials. They learned what affects development and how the new IDO strives to streamline the development process and ensures that the buildings built in Albuquerque in the future are in line with community desires.
Making the Projects Pencil
So what happened? Did the attendees learn more about the development process? Did they figure out out to make the rent pencil? Let’s see:
About half of the tables were able to figure out how to make their development work with the proposed new zoning code, or IDO, requirements. Some of these tables used unique loopholes to make their projects work, such as putting their required open space on the roof, something which likely wouldn’t be allowed in the real world. Many of the unsuccessful tables were impeded by the costs of parking requirements. For example, see what happened when one table tried to add underground parking to their project:
- “Our lot was really small. We fit in 13 parking spaces on our lot but we have 16 units plus commercial space. If there wasn’t on-street parking or good transit service, we might be in trouble.”
- “Our lot was too small to build anything dense under the proposed zoning code.”
- “Low income housing could be built on the far end of town but…. affordable housing should be close to where there’s services, where there’s jobs, etc. In these locations, the rents are higher for commercial tenants. If the rent is higher than you need more stories of residential to balance your incomes.”
- “In order to effectively develop mixed use low income buildings, the zoning code should allow for five stories.”
- “Do you really want just one and two story buildings along the largest transportation investment that we have? Or do you want to accommodate mixed use, a vibrant ground floor that provides amenities to the area? You could just do a standard workforce housing project but it’s not really accomplishing the goals of the city.”
What Did You Think?
We’d love feedback on this or other posts. Like it? Too long? What would you like to see instead? Whatever your reaction, we’d love to hear it at CentralGood2Great@gmail.com