Department of Urban and Environmental Policy and Planning, Tufts University Summer 2013 Real Estate Development and the Planning Process Instructors: Richard Reynolds and Christine Cousineau Session: First Summer Session Wed, May 22 Mon, June 31 Schedule: Mondays and Wednesdays, 9:00 am 12:30 pm Location: Brown House classroom, 97 Talbot Ave, Medford Description: A course on real estate development and its relationship to the urban planning process. Objectives: To understand how real estate development is an essential part of urban planning. To develop skills in producing development budgets, pro-formas, and financial projections. To analyze and visit development projects of different types (LEED Platinum affordable housing, uban market-rate housing, and mixed-use transit-oriented development), and meet their developers. To gain experience in putting together and presenting a development proposal in response to a Request for Proposal (RFP). DRAFT Syllabus Real Estate Development and the Planning Process 1 Wed 5/22 Course introduction: objectives, topics, readings, assignments, site visits. Definitions and discussion: what is real estate development? What is urban planning? Who does what? How is success measured in each field? How do we create value? How do we protect the public interest /common good, and ensure a fair process? Roles: who are developers? differences between developer, owner, and project sponsor; public developers and private non-profit developers. Who are planners? directors and staff of city/town planning departments, metro and state planning agencies, non-profit organizations, private planning firms and consultants. Who are the clients of planning consultants? Walk to and visit the Powder House School site. Miles, Mike et al. Real Estate Development: Principles and Process. 4 th ed. ULI, 2007. Ch. 3 Developers and their Partners, pp. 40-64 Mon 5/27 (no class- Memorial Day) Miles, Mike et al. Real Estate Development: Principles and Process. 4 th ed. ULI, 2007. Part II The History of Real Estate Development in the United States, pp. 64-145 Ch. 4 The Colonial Period to the Late 1880s Ch. 5 The Late 1880s to World War II Ch. 6 Post World War II to the Present 1
2 Wed 5/29 Historical overview of real estate development and planning. Ideas, initiatives, practices, public/private relationship, and programs. Individuals who left their mark in the development and planning worlds: A. Levitt and Sons, Robert Moses, Jim Rouse, Mayors Daley father and son, Ed Logue, the Leventhals, Gerald Hines, Mossik Hacobian (Urban Edge), Marty Jones (CMJ). Approaches to development, images of projects and legacy. Bloom, Nicholas Dagen. Merchant of Illusion: James Rouse: America's Salesman of the Businessman's Utopia. Urban Life and Urban Landscape Series. Columbus, OH: Ohio State University, 2004. Introduction, pp. ix-xxii Ch. 2 Reinventing the Capitalist City, pp. 27-43 Ch. 6 American Midas: James Rouse and Festival Marketplaces, pp. 150-179 Cohen, Lizabeth. Ed Logue and the Struggle to Save America s Cities, Harvard University Real Estate Academic Initiative (REAI) Research Brief, March 2010. Peiser, Richard and David Hamilton. Professional Real Estate Development, ULI, 2012. Ch. 8 Trends and Issues, pp. 373-393 3 Mon 6/3 The overall urban planning and development processes. How do they interact? Key factors for achieving success. The real estate cycle, what drives supply and demand. Location, location, location replaced by Timing, timing, timing in the real estate cycle. Theories of urban growth and neighborhood change in urban history and sociology. Miles. Real Estate Development Ch. 1 The Real Estate Development Process, pp. 1-17 The Market Cycle in Theory. Powerpoint, 2013. Burgess, Ernest The Growth of the City: An Introduction to a Research Project from Robert Park et al., The City (1925) in Richard LeGates and Frederic Sout (eds.) The City Reader, fourth edition, Routledge, 2007. pp. 150-157 Porter, Douglas. Breaking the Development Logjam: New Strategies for Building Community Support. ULI, 2006. Part I Making Room at the Table: The Need for Community Engagement, pp. 1-13 Boston Redevelopment Authority. A Citizen s Guide to Development Review Under Article 80 of the Boston Zoning Code. Boston, 2004 Assignment #1 given: Development of a proposal in response to the City of Somerville s RFP for the redevelopment of the Powder House School site. Draft reports due on 6/24. Presentations are on 6/26 and final reports are due on 6/31. 2
4 Wed 6/5 Development budget and pro-forma analysis. Determination of project feasibility and step by step development process, from inception to occupancy. Problem definition, market analysis, site and user analysis; financial projections, risk analysis, types of public and private funding; construction loans and grant applications; use programming; public process and community involvement; designer selection and contractor bidding; design, construction, and construction management; marketing by type of use; commissioning, occupancy and management. How to estimate construction costs, hard and soft costs, cost variables as functions of Total Development Cost (TDC); project revenues from sales or rental income; uses and sources in One Stop state funding application form for housing developments. Project property performance, income and costs over time. Miles. Real Estate Development Ch. 10 Stage One: Inception of an Idea, pp. 235-252 Ch. 16 Stage Three: The Feasibility Study, pp. 391-413 Sample Development Budget and Operating Pro Forma for Commercial and/or Mixed-Use Projects. NSP Toolkits. Neighborhood Stabilization Program (NSP), HUD, 2010. https://hudnsphelp.info/index.cfm?do=viewtoolkitshome&programtypeid=6 Development Budget and Pro Forma, Office Component, Powder House School Site Proposal, Tufts 2013. Assignment #2 given: Development budget and pro-forma for the housing component of a Powder House School site redevelopment proposal. Due 6/17. 5 Mon 6/10 Planning and development concepts and tools: land development controls; use zoning and form-based codes; FAR, density, dimension controls, parking ratios; valuation methods, forms of ownership, leasing and ground leases; development exactions, impact fees, bonuses; smart growth, growth boundaries, transfer of development rights; RFPs and development proposals. Forms of incorporation and partnerships. Morris, Marya. Smart Codes: Model Land-Development Regulations. (PAS 556). APA, 2009. Ch. 2 Development Codes and Smart Growth, pp. 6-23 Land Development Regulations and Unified Development Codes, pp. 5-8 APA Smart Growth Policy Guide and U.S. EPA Smart Growth Principles, p. 28-30 Elliott, Donald, Matthew Goebel and Chad Meadows. The Rules that Shape Urban Form. (PAS 570) APA, 2012 Ch. 3 Form-Based Controls in the Broader Planning Context, pp. 69-102 Porter, Douglas. Managing Growth in America s Communities (2 nd ed.) Island Press, 2008. Ch. 7 Managing Growth to Advance Social and Economic Equity, pp. 209-240 3
6 Wed 6/12 Affordable housing development process and key challenges. The role of Low Income Housing Tax Credits. Green strategies in affordable housing. Site visit to Putnam Green, Cambridge, Platinum LEED certified. Guest speaker on site: Jane Carbone, Homeowners Rehab Inc. Materials on Putnam Green, Cambridge Bratt, Rachel and Chester Hartman. A Right to Housing: Foundation for a New Social Agenda. Philadelphia, PA: Temple University Press, 2006. Ch. 16 Community Development Corporations: Challenges in Supporting a Right to Housing, pp. 340-359 Schwartz, Alex, Housing Policy in the United States. New York, NY: Routledge, 2010. Ch. 5 The Low-Income Housing Tax Credit, pp. 103-124 Massachusetts Housing Investment Corporation (MHIC) One Stop 2000 Application for Affordable Housing Finance Application [ version 1.21]. Parts updated to 2012. 7 Mon 6/17 Urban sites, brownfield redevelopment, demographics of urban living. Site visit to Maxwell s Green, Somerville. Guest speakers on site: Ted Tobin, KSS Realty and Kyle Warwick, Gate Residential Properties, as Davis Square Partners for this project. Materials on Maxwell s Green, Somerville Haughey, Richard. Getting Density Right: Tools for Creating Vibrant Compact Development. ULI, 2008. Ch. 3 Community Case Studies, pp.31-101 (selected case studies) Jerke, Dennis. Urban Design and the Bottom Line: Optimizing the Return on Perception. ULI, 2008. Ch. 1 The Design Dividend Assignment #2 due. 8 Wed 6/19 Transit-Oriented Development. Planning challenges and market analysis for mixed-use projects. The role of transit in urban development. Site visit to Station Landing, Medford. Guest speaker on site: Ted Tye, National Development. Materials on Station Landing, Medford Dunphy, Robert et al. Developing Around Transit: Strategies and Solutions that Work. ULI, 2005. Ch. 1 Who, What, Where, Why. pp. 3-30 4
9 Mon 6/24 Commercial real estate Trends in the retail, office and R&D markets. Results of Jones Lang LaSalle national research. Characteristics of corporate and institutional clients. Case studies: University Place in Harvard Square, for Harvard University, and other projects by Gerald Hynes, Spaulding & Slye/Jones Lang LaSalle. Guest speakers: Benjamin Breslau, VP, Director of Research for the Americas and Daniel St. Clair, Managing Director, Investment and Development, Jones Lang LaSalle Peiser, Richard and David Hamilton. Professional Real Estate Development, ULI, 2012 Ch. 5 Office Development, pp. 239-273 Ch. 7 Retail Development, pp. 327-366 Draft reports due. 10 Wed 6/26 Student presentations 11 Mon 6/31 Wrap-up session (with lunch): the role of individuals and the culture of organizations in real estate development and planning. Examples from case studies. Final reports due. --------------------------------------------------------------------------------------------------------------------------------------------------- 5
Bibliography and Further Reading ULI = published by the Urban Land Institute. Washington, DC. APA = published by the American Planning Association, APA Planners Press, Chicago, IL. PAS = Planning Advisory Service report, part of APA publications. Angotti, Thomas. New York for Sale: Community Planning Confronts Global Real Estate. Cambridge, MA: MIT Press, 2008. Bloom, Nicholas Dagen. Merchant of Illusion: James Rouse: America's Salesman of the Businessman's Utopia. Urban Life and Urban Landscape Series. Columbus, OH: Ohio State University, 2004. Bratt, Rachel and Chester Hartman. A Right to Housing: Foundation for a New Social Agenda. Philadelphia, PA: Temple University Press, 2006. Brett, Deborah and Adrienne Schmidtz. Real Estate Market Analysis. ULI, 2009. Boston Redevelopment Authority. Boston Zoning Code Article 80. Development Review and Approval, 1996. Dunphy, Robert et al. Developing Around Transit: Strategies and Solutions that Work. ULI, 2005. Elliott, Donald, Matthew Goebel and Chad Meadows. The Rules that Shape Urban Form. (PAS 570) APA, 2012 Haughey, Richard. Getting Density Right: Tools for Creating Vibrant Compact Development. ULI, 2008. Jerke, Dennis. Urban Design and the Bottom Line: Optimizing the Return on Perception. ULI, 2008. LeGates, Richard and Frederic Sout (eds.) The City Reader, fourth edition, Routledge, 2007. Myerson, Deborah and Richard Haughey. The Business of Affordable Housing. ULI, 2007. PricewaterhouseCoopers and Urban Land Institute. Emerging Trends in Real Estate 2013. ULI, 2012. Miles, Mike et al. Real Estate Development: Principles and Process. 4 th ed. ULI, 2007. Morris, Marya. Incentive Zoning. (PAS 371). APA, 2000. Nelson, Arthur and Robert Lang. Megapolitan America: A New Vision for Understanding America s Metropolitan Geography. Chicago, IL: APA Planners Press, 2011. Nelson, Arthur and Robert Lang. The New Politics of Planning: How State and Local Governments are Coming to Common Ground on Reshaping America s Built Environment. ULI, 2009. Peiser, Richard and David Hamilton. Professional Real Estate Development: The ULI Guide to the Business. ULI, 2012. Porter, Douglas. Managing Growth in America s Communities, 2 nd ed. Island Press, 2008. Porter, Douglas. Breaking the Development Logjam: New Strategies for Building Community Support. ULI, 2006. Schwanke, Dean. Mixed-Use Development Handbook. ULI, 2004. Schwartz, Alex, Housing Policy in the United States. New York, NY: Routledge, 2010. Wallace, David. Urban Planning, My Way. Chicago, IL: University of Chicago Press, 2004. 6