• Developers and Neighborhoods: If you lived here, you'd be home by now!
  • June 19, 2003 | Author: James E. Cousar
  • Law Firm: Thompson & Knight LLP - Austin Office
  • Introduction

    Relations between a neighborhood association and a developer can easily become adversarial. Associations primarily seek to preserve a neighborhood's quality of life, while developers generally want to realize maximum economic benefit from their property. This article is based on the author's experience working with neighborhood associations in Austin, Texas (where organized neighborhoods exercise considerable influence in the land development process), and thus largely reflects the concerns of associations and individual homeowners. However, developers who understand a neighborhood's viewpoint can avoid common mistakes and more effectively achieve their business goals.

    Neighborhood Association Basics

    Neighborhood associations are voluntary, non-governmental organizations. They "speak" for their neighborhood only in an unofficial capacity, and their credibility is based largely on their size and reputation.

    Neighborhood associations are by definition self-governing, and cities are usually cautious in dealing with them. If an officer or representative of an association tells an official governing body that the association supports or opposes a project, most consider that to be sufficient evidence of the homeowners' position.

    Associations are conservative by nature, and usually must be persuaded that a zoning change, variance or conditional use permit will improve the neighborhood. Developers pursuing such actions should recognize that they bear the burden of persuasion, and that treating their plans as entitlements can create problems. By contrast, developers who follow these ten common sense guidelines to address neighborhood concerns are much more likely to obtain neighborhood support and governmental approvals.

    Top Ten Tips for Working with Neighborhoods

    1. Talk to the neighborhood early in the process and provide complete information. Developers' problems often begin when homeowners learn of a project through rumor, news stories, or a public notice. The best approach is to take the initiative with a phone call to the association contact person (often identified in public records) seeking a presentation at a regular board or membership meeting. An early contact should allow the association adequate time to schedule a meeting, investigate and take a position. At the meeting a developer should be prepared to illustrate the project, and discuss it in non-technical terms.

    2. Don't buy land in an established neighborhood based on assumptions or assurances that a zoning change or variance will be granted. A prudent developer will contact the relevant association before a land deal closes and not rely on city staff assurances of approval. An association will support or oppose a zoning change regardless of whether the land deal has closed. If neighborhood support is doubtful, it is wiser to take an option and pursue zoning approval before closing.

    3. Neighborhoods do not necessarily agree that the price paid for property dictates a certain use or intensity. To homeowners, preserving neighborhood quality of life is a primary concern. If a new commercial structure or apartment complex is viewed as detrimental to neighborhood quality, few neighborhood associations will be won over by a developer's requirements on density, profit and rate of return.

    4. Don't assume that neighborhood will prefer a "less intensive" property use category over a "more intensive" category. The typical zoning district ranks rural residential, single-family and low-density multi-family zoning as "less intensive," followed by intensive multi-family, office and retail uses, culminating in such "intensive" uses as warehouse, industrial and central business district zoning. "Down-zoning" from commercial to residential multi-family is no longer always welcome. Today many upscale single-family neighborhoods prefer adjacent office development over residential multi-family units because office use is seen as quieter and less intrusive.

    5. To understand the neighborhood's position, step back and look at the proposed development as if you lived next door. This would seem obvious, but some developers become so enamored of a project that they cannot understand the neighborhood viewpoint. Development opponents often assume that a new project will diminish neighborhood quality of life (increased traffic and noise, lower property values) and are determined to preserve things as they are. Such concerns should not be trivialized, and a developer with a compatible, well-planned project stands a better chance of convincing the skeptics.

    6. Tell the truth. The neighborhood will not work with a developer they think is lying. Even perceived or minor misrepresentations can create opposition that is hard to overcome. A developer who threatens to build an "even worse" project if not granted a variance, or who denies a variance is needed while knowing otherwise, will lose all credibility once found out. The land development process is not a poker game, and neither side is likely to win by bluffing.

    7. Don't try to fool the neighborhood. They may not be sophisticated about land use, but they're seldom stupid. Individuals involved in neighborhood associations often have or quickly develop knowledge of land development processes, and even have access to consultants and other experts. A neighborhood will usually turn against a project if the developer treats the neighbors as if they were gullible or stupid.

    8. If you reach an impasse, consider mediation. Accept that the final answer is sometimes "no." Development disputes are often emotional, pitting the developer's economic risks against the neighborhood's quality of life concerns. Sometimes a neutral third party individual or agency can mediate a solution by helping each side agree on common interests and objectives. However, some differences are such that the developer and neighborhood have nothing to negotiate. At that point, just saying "no" and letting the appropriate local governing body decide remains the time-honored way to resolve a development dispute.

    9. Don't assume you have a deal based on discussions with a few neighborhood leaders. Neighborhood associations are grassroots organizations, and some proposals acceptable to neighborhood leaders are not favorably received by the entire neighborhood. Association leaders may be more familiar with current development trends and "get ahead" of their members by accepting a project that others see as a threat to quality of life. As a result, a formal position by the association board may be overturned by a majority vote of the membership.

    10. Respect the process: personal lawsuits, threats and cash payments are not legitimate tools in land use planning. Participants on either side of a dispute can put their position at risk by personalizing it too far. Threats of lawsuits or an attempted financial quid pro quo (such as a cash contribution to a purported neighborhood "school supply fund") poison the process. They also risk alienating the local governing body that must make the final decision, and when clumsily done can win unintended sympathy for the opponent's side.

    All-out fights between developers and neighborhood associations often leave both sides exhausted and embittered. The guidelines set out here are no guarantee of an accord, but they should facilitate cooperation and help both sides avoid a "winner take all" situation that ultimately benefits no one.