Multifamily assets remain one of the most attractive product types in the United States. Demand throughout the country remains strong, and rents continue to steadily rise, providing stabilized, long-term investments for many owners, investors and developers.
Currently, multifamily development is at a record high throughout the United States, from repositionings to ground-up construction.
As growth in development continues to rise and more multifamily units are planned, one key area of focus for owners, developers, and investors is entitlements. The entitlement process is complex, and requires a significant amount of time and attention from the applying party.
As an owner with more than 30 years of experience in securing land entitlements, we’ve devised three of the top tips for maneuvering this process and ensuring that a multifamily project gets entitled.
Build support prior to filing an application.
The first step in securing a land entitlement is building support for the project. Owners and developers will want to identify a location, check underlying zoning rules, and get a basic understanding of the local municipalities. These will vary by location, and it’s extremely important to have a thorough understanding of all of these elements before getting started with the application process.
From there, put together a comprehensive team ranging from a local land use expert, architect and civil engineer, to a community outreach expert. Once the team is in place, meet with various stakeholders, including local officials and neighborhood groups. These members of the community will play a significant role in the land entitlement process and gaining their support early on, prior to filing the application, can be critical to success.
In addition, it’s extremely important to bring a rendering of the project when meeting with city officials and members of the local community. A picture is worth a thousand words, and having a visual to demonstrate the overall project will further aid in gaining support from these influential members of the community.
Determine potential impacts on the surrounding environment and understand hot-button issues.
As part of the process to obtain entitlements in California, CEQA (California Environmental Quality Act) requires a developer to analyze the projects’ impacts on the environment, including among others, traffic. It is important to develop a strategy that includes community input to address any concerns as they arise. Equally important is to understand local hot-button issues.
This means taking into account the multifamily community’s impact on local traffic, learning what the community feels is important, identifying potential objections from neighbors, etc. It is inevitable that these types of concerns will arise, and being prepared to address them is critical to the success of securing a land entitlement.
Pay attention to what’s on the ballot.
Items on a ballot can also significantly impact the entitlement process for a multifamily development. It is extremely important to pay attention to new initiatives, and how these may impact a property moving forward.
For example, in Los Angeles, there is currently an initiative on the March ballot known as the Neighborhood Integrity Initiative, which has ostensibly been proposed to limit new mega-developments in the greater Los Angeles area. In reality, if passed, this initiative will place a two year moratorium on most development within the city, not just “mega-developments” as advertised.
This is just one of many examples of proposed initiatives that can impact entitlements and the entitlement process of a new multifamily development. Any owner or developer seeking to secure a land entitlement should be well aware of proposed initiatives on the ballot, and understand how they might impact a project.
Ultimately, preparation and patience is the key to successful land entitlements. Be prepared to meet with local officials and community stakeholders; be prepared to rally support for the project; be prepared to address any concerns or environmental impacts the project will have; create a strategy to address those concerns; and be prepared for unexpected obstacles and political initiatives. The more prepared an owner or developer is, the more flexible they will be, enabling them to adapt to the ever-changing process, and ultimately, enabling them to secure the land entitlements they need.
Rob Solomon is chief development and legal officer at BLT Enterprises, an owner, operator and developer of more than $2 billion in commercial real estate to date that specializes in the acquisition, entitlement, development, operation, and property management of assets across all product types. Contact Solomon at [email protected].