What Cities to Avoid as a Land Developer

Developing commercial real estate has an extreme amount of risk involved with it. The key is to limit the amount of risk before getting started on an actual project.

One of the ways in accomplishing this is to work only in cities that are open to growth and progress. There are many cities that want to remain stagnant or maintain the current infrastructure and way of living and are completely opposed to growth.

As a land developer or investor, these are the cities you will want to avoid at all costs. Cities that are not open to growth or progress are generally very easy to spot.

Let’s look at three reasons as to why cities are not open to growth and what would inhibit a land developer or investor from even attempting a new project- no matter how good it may look on paper.

The first is the people voted into local office are elected to keep the city the way things are. The politicians are put into office because of their commitment to keep things the same so growth and development are out of the question. They focus in maintaining not growing which is suicide for a developer. You can bet 30 acres of raw land zoned commercial will not be approved as a new mall or office park. The red tape and barriers would be so thick, that it would take years and years before a project would ever be approved- or ever approved for that matter. City officials would simply lay every obstacle in your route before they would allow such huge changes. These are the cities a land developer MUST avoid unless they want to spend 3-5 years spending money and trying to get a project approved.

The second is purely political. Even if city officials are pro-business and development, well-organized opposition can sway votes and cause projects to die. Maybe not with the city, but with the people in the city as well. The city officials may have an election coming up or there are strong opposing forces and any major moves may hurt their campaign and position. It could even carry to the lenders in that if they realize there is opposition, even though they could say “Yes,” they will say “No,” to avoid public ridicule. Politics can be a huge constraint to growth in a city.

The third is state law restricts local governments from planning growth. So the local government may have ideas, but the state restricts them from actually moving forward. There may be extremely strict guidelines or jurisdictions or even conflicting views between the local and state governments. And you know where this leaves the land developer or investor? In the middle running around with no real future for a project. This is where you do NOT want to find yourself.

As you can clearly see, it is of the utmost importance to work in a city that welcomes your ideas and skills. Otherwise, valuable money and time will be wasted on a project that will never really come to fruition.

Go where your growth strategies are welcomed and even will earn strong incentives from the government. These government will bend over backwards to see the city grow and allow more places for business and homes for the growing population or dire need for increased infrastructure. Become a hero to the local government and community and you will be guaranteed future jobs there, especially if you provide them exactly what they need and do it well.

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