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  • October 19, 2018 11:02 AM | Anonymous member (Administrator)

    Preston Hollow People
    October 19, 2018
    Staff Report

    National Night Out attracted throngs of residents Oct. 2 at Preston Hollow Park where members of the Dallas Police Department, Preston Hollow Homeowners Association, and the Center for Transportation Safety spoke on neighborhood safety.

    Juli Black, president of the Homeowners Association, emphasized neighbor awareness, and Neal Johnson of CTS spoke about bicycle safety. In Briarwood, 13 restaurants participated in a Taste of Lovers-themed event along with the Briarwood Crime Watch Association.

    (Photos: Chris McGathey and William Legrone)

    View article online

  • October 11, 2018 2:18 PM | Anonymous member (Administrator)

    by Jon Anderson
    Candy's Dirt

    Tower Spacing: Through Thick and Thin, Thick Matters

    There’s a bit of a special language being formulated between the Authorized Hearing committee members. For example, when the city facilitator recaps a prior discussion by saying, “We agreed on X,” a committee member or two will pipe up “We didn’t agree on that.”  What they really mean is they didn’t. And since they didn’t agree, there could be no agreement. Everyone believing they’re getting 100 percent out of this is a recipe for nothing ever being decided. Ancient children not wanting to share their toys.

    Parking

    The session revolved around a review of responses to last meeting’s homework on a variety of topics, and trying to get some consensus. The first of those topics was a discussion of parking requirements. In many regards it was a pointless discussion. The committee members are not parking experts so to ask their opinion on whether it should be one space per bedroom, 1.5 spaces per unit or two spaces is all so much guesswork. Woven into this was the fear that developers would build too much parking and be left with a surplus once Uber took over the world.

    Here’s the thing, there’s never unused parking in multifamily developments. If there was a global automobile rapture tomorrow, parking spaces would be repurposed for storage (much to the chagrin of the storage industry), or amenity space, or even built out for additional living space (above-ground, flat garages). It’s not like it would go to waste. So don’t worry about too much, only too little.

    There was light discussion on street parking with a few wanting to eliminate it. But you can’t really. Each building will likely maintain a handful of outside spaces for drop-offs, quick visits and the like, where going into a garage is a little silly.

    Beyond numbers, most seemed OK with at least some above-ground parking so long as it was camouflaged in some way (wrapped in apartments or attractively screened). I did smile at one response that thought underground parking should be required for Athena and Preston Tower as though they should dig a hole 50 years post-construction.

    Height Limits Using RPS. (Boo-boo: Preston Tower is 8-stories taller than Athena but only 17′ taller?)

    Residential Proximity Slope (RPS)

    You recall, RPS is not required for PD-15 but many want to see how using RPS would play out. RPS is a slope that runs from single-family neighborhoods towards areas with higher allowable buildings. It’s designed to curtail tall buildings from looming over homes by pulling them back and away. Think about the stair-step buildings you see at Preston Center along the tollway that pull away from Devonshire.

    RPS caused a lot of heebie-jeebies. Diamond Head Condos’ representative was particularly vocal about not wanting to be subjected to the measure because it would limit their redevelopment from infinite height.

    But the funniest head-snapping happened when someone said RPS should be used, and that the Athena and Preston Tower should be subjected to it should they ever redevelop voluntarily or as a result of an act of nature (shrinking their allowed heights).  You never saw two grandmothers stammer “grandfather” so fast. You see, they’re OK dictating to everyone else and giving no purchase, but limiting their properties sent a few volts through.

    And you know what? As negative and stingy as the towers have been, were I a low-rise representative, I’d make it my life’s work to tie the Athena and Preston Tower to the RPS.

    Sorta in the same ballpark as RPS is Tower Spacing – step-backs when two tall buildings are too close.  Athena said “yes” and Diamond Head said “no.” I say “yes” and here’s why:

    Everyone points to Preston Tower’s garden building, saying it’s not on top of Preston Tower, but here’s the thing: The garden building is two units deep. Diplomat and Diamond Head are two buildings deep with a slight separation. This makes their buildings twice as thick as the garden building and therefore twice as close to their neighbors. As it stands, there is a wider separation between Diplomat and Royal Orleans already, but Athena and Diamond Head get REALLY cramped at height. If Diamond Head Condos is going to extend into the residential floor plane of Athena there needs to be a step back. I would daresay that the complexes on Diamond Head’s northern boundary would want a step back, too.

    Oh, and by the way, it doesn’t matter what I, Athena, or Diamond Head think. PD-15 states that if some parameter is silent in the PD-15 documents, it defaults to MF-(3) within Chapter 51. Tower Spacing is denoted in Chapter 51. While the committee may be empowered to waive it, unlike RPS, they’re already governed by it. City staff seemed to position it as an option. Not really. It’s there.

    One protectionist thing the towers representative said I did agree with: Diamond Head lamented having to look out her window at the tall face of Athena. The response to Diamond Head was, “you knew what you were buying” – and they’re right. It’s a corollary to moving next to an airport and complaining about the noise. I have no sympathy for that argument.

    Diamond Head Condos

    This is as good a place as any to say that Diamond Head annoyed me last night. I’m not telling tales out of class here as I spoke to their representative after the meeting. Their goal last night for any dimension was the tallest, widest, densest structure possible – more than a little greed. She said later that she figured the city would probably not approve such a building, but they wanted an enormous envelope so a developer could then fight it out at City Hall.

    The first thing I said was that her unrealistic excessiveness was scaring people and causing some to dig their heels in (counterproductive in a negotiation). The second thing is that a huge envelope that you then leave the city to decipher misses a trick. The wonderful thing about this often-confusing and frustrating process is that it places a level of control in the neighborhood BEFORE projects go to Plan Commission and City Council. Why would you want two sets of eyes on something instead of three? Especially when one of the sets is the very local neighborhood that can add some specific tweaking that might not matter to the city, but would matter a great deal to the neighborhood?

    What I didn’t say, only because it occurred to me later, was that even if a virtually unlimited buildable envelope was given, the city would knock it down to something realistic when a developer tried to fill it. Developers don’t pay on “maybe,” they pay on “permits.” So whatever a developer agreed to pay (on contingent) for a seemingly unlimited envelope would be discounted right back to what they got permitted. So there is no point in getting a bazillion dollar buildable envelope when the city will only ultimately approve a quarter of a bazillion dollar project. The ultimate money paid to the landowner is the same. But the process is stretched out unnecessarily due to the battles that would be fought and it needlessly scares the behoozis out if the neighborhood. Ultimately it serves everyone if you work towards an 80-90 percent nailed down envelope so a developer only needs minor tweaks.

    Setback relief could eat into the frontage road??

    Setbacks

    More comedy ensued on setbacks. I’m going out on a limb and say this homework question wasn’t explained very well.  There is an existing 100-foot setback from Northwest Highway north to Preston Tower, Preston Place, Royal Orleans, and Athena. As far as I’ve determined, it’s in each of the building’s deeds. But the question asked what an appropriate setback should be.

    Before getting to the responses, it’s important to know that the actual Pink Wall from Northwest Highway to the first curb is about five feet. Then there’s a parallel parking lane across most of the stretch (call it 10 feet). Then there’s a generous two lane road. After that there’s differing land uses before hitting a building. All totaled, 100 feet.

    Three committee members were OK with a 30-foot setback from the “property line” which is Northwest Highway. That would result in a building almost in the middle of the frontage road. At 40 feet, it would only be a handful of feet north of the roadway before a sheer face of building would be possible.

    Maybe you want to rethink that. Not only would it pull the buildings out of alignment, but it would be fairly ugly (you don’t see single-family homes next to the sidewalk either).

    There is really only one reason to even consider this – Royal Orleans. While Preston Place has all the land it needs at about two acres, Royal Orleans sits on a lot made tiny by required setbacks on all four sides. If they could build significantly into the 100 foot Northwest Highway setback, it would make their property more valuable. But at what cost to the neighborhood aesthetic? The building already encroaches onto the 100-foot setback with a yard and pool that pinches the frontage road.

    Their representative seemed to be advocating for zero setback outside the frontage road. This would add about 65 feet to their buildable lot and pull one building significantly out of alignment. Coupled with their desire for the “front” of their building to face Diamond Head Circle leaving the frontage road framed by a tall, sheer block jutting out of alignment and into the view plane.

    No. I’m sorry, that’s too much ugly to swallow. I didn’t design PD-15 and the current owners of Royal Orleans likely didn’t purchase with the hope of cashing out to a developer (and if they did, they shouldn’t have bought the smallest plot in the area). Sure, it’s frustrating and feels unfair when neighboring buildings are able to redevelop into more salable projects, but life ain’t fair. While some accommodations may be made, Royal Orleans’ dirt simply isn’t worth as much because there isn’t enough of it.

    Also, Royal Orleans has been in talks with Preston Place’s buyer, Provident. If Provident connects the two parcels, no setback relief is needed, period.  And the neighborhood certainly doesn’t need both buildings to be pulled forward.

    Side And Alley Setbacks

    Who’d a thunk there could be so much hoo-ha about alley setbacks. They’re currently 20 feet which essentially equates to the carports lining the alley. For some reason city staff kept harping on wanting sidewalks in the alley. Why? Leisurely strolls by mechanicals, HVAC chillers, and whiffy dumpsters all while gazing poetically up at power lines?

    Side lot setbacks range from 10-to-40 feet with a patchwork of sidewalks. I urge ALL committee members to carpool around Uptown, Oak Lawn, and Knox and look at new apartment buildings and their setbacks. Most are 10-ish feet plus a sidewalk – pretty dang close to the street. Put in perspective, my sofa is 10 feet long, and as a setback not too impressive. As for sidewalk width, let’s call it a two-scooter passing width.

    Height And Density

    The question of height returned silly answers. Responses were cast for all the low-rises between 25 and 330 feet tall.  Density-wise, responses ranged from existing units per acre to 160 per acre (35 units per acre MORE than A.G. Spanos is asking for seems excessive). Helpful, no?

    The Athena and Preston Tower were pegged at their existing heights with other replies including RPS (205′-285′ – or 125′ for garden building), 250′, and 330 feet tall. Ditto on density here too – existing to 160 per acre. Again, not too helpful.

    One committee member’s math skills proved shy of the mark. It was posited that $700,000 townhouses would be just as profitable for everyone. Nope. Here’s the deal: assuming the average footprint of a townhouse and cramming 15 on an acre (pretty crammed), that’s a project value of $10.5 million. I believe A.G Spanos proposed Diplomat project (about an acre) will have a done-done value of $50 million give or take. If we believe the rumor of an $18.5 million price on Preston Place’s two acres, Provident would only have $2.5 million left for a full build out. Certainly to err is human.

    Leading The Kitties To Water

    This meeting city staff were more noticeable in their opinion on the path forward. Some found this off-putting, but I was thrilled. Without someone to help guide this process and capture decisions when made, this process would stumble on longer than a Law & Order franchise. As long as staff isn’t putting words in the committee’s mouths, I’m good with a little cat herding.

     

    Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.

  • October 11, 2018 7:26 AM | Anonymous member (Administrator)

    Steve Brown, Real Estate Editor
    Dallas News

    Dallas-Fort Worth tops the list of U.S. cities that real estate industry execs say will be the best for their business in 2019.

    D-FW has been rated the highest for property investment and construction in a closely watched real estate beauty contest — the annual Emerging Trends in Real Estate report, which polled industry leaders on their outlook for 79 U.S. cities. The last time D-FW topped the list was in 2015, in the report looking ahead to 2016.

    "I'm thrilled to see Dallas at the top of the list again," said Byron Carlock, national real estate leader with PriceWaterhouseCoopers, which, with the Urban Land Institute, sponsors the annual survey. "Dallas is doing a lot of things right.

    "Dallas is one of the bright spots in our country," Carlock said. "We are watching Dallas lead the way among major cities pivoting to the new economy."

    The recent strongest U.S. market for both job growth and population gains, D-FW is the top home and apartment building center in the country and a leader in demand for all kinds of commercial real estate. In just the first half of 2018, more than $11 billion in construction projects were started in North Texas. Only New York City had more total building.

    Austin and San Antonio also placed among the Emerging Trends report's 20 favorite cities for investment and development in 2019. 

    Seventeen of the 20 cities are considered "secondary" markets — as opposed to the big "gateway" locations such as New York, San Francisco and Washington, D.C., that are usually favored by investors.

    Along with D-FW, the cities investors like most for next year include Raleigh-Durham, N.C.; Orlando, Fla.; Nashville; and Charlotte, N.C.

    "More job growth is happening in those markets," said Urban Land Institute's global CEO, Ed Walter. "And the amount of investment [capital] that has flowed into the gateway markets has in a lot of cases created some imbalances."


    Some of the biggest  issues in the real estate industry for next year.

    Walter said Dallas-Fort Worth is a prime example of one of fast-growth, non-coastal metro areas.

    "The five-year growth rate of Dallas for employment is more than double the national average," he said. "When you add up all the different ingredients, Dallas ends up ranking as the best market over the near term."

    More than 2,300 property owners, lenders, brokers, investors, builders and other property professionals were polled for their outlook on the U.S. real estate market.

    This is the 40th year that the Emerging Trends report has been published. Real estate execs were asked to rank their favorite property types for next year — industrial buildings, garden apartments and shopping center redevelopments. Chief industry worries for the coming year were also highlighted.

    The top concerns for 2019 include:

    *Rising interest rates, which are at the highest level in more than five years.
    *Higher property insurance costs, because of climate change and expensive storms and fires, which are raising policy premiums.
    *Immigration restrictions, which could cause "negative economic consequences and long-term weakening of our national growth potential" and lead to further labor shortages.
    *The long real estate cycle, which means a future downturn is more likely. "The decline in real estate transaction volume seems to say that investors as a group are pulling back in the face of such concerns."

    So far, there's no sign of oversupply in most of the country's cities, Walter said. "What's been different about this cycle compared to the others is that supply growth has generally been constrained."

    PwC's Carlock said only a tiny percentage of the property professionals surveyed were negative about 2019.

    "As you look at supply-demand characteristics and the disciplined approach to the market and the amount of equity going into deals, we have a fairly healthy industry," he said.


    D-FW heads the list of the U.S. cities with the best property market prospects for next year, according to the Emerging Trends in Real Estate report.

    View online

  • September 26, 2018 7:19 AM | Anonymous member (Administrator)

    Steve Brown, Real Estate Editor
    Dallas News

    Homebuyers aren't the only ones who have been slammed with soaring prices in the last few years.

    Dallas-area apartment residents have also endured several years of significant price increases.

    But just as home-price growth in North Texas is slowing, increases in apartment rents are also starting to wane.

    During the third quarter, the Dallas area's average apartment rents rose at only 1.3 percent from a year earlier, according to new data from Richardson-based RealPage. That's less than half the annual rent growth among the major U.S. cities surveyed by RealPage.

    The slowdown in Dallas apartment rent increases isn't a surprise. With almost 28,000 new apartment units hitting the North Texas market this year, analysts are tracking a steady decline in percentage rent hikes.

    "We are about to move into the period of seasonally slow apartment leasing that comes with the cold weather months," RealPage chief economist Greg Willett said in the report. "Demand will trail completions just ahead, making it tough for the rent-growth pace to gain additional traction."

    Dallas was on RealPage lists of the major U.S. rental markets that saw the weakest apartment-rent growth in the third quarter.

    The fastest growing apartment rents were in Las Vegas (up 6.6 percent year-over-year) and Orlando, Fla. (up 6.5 percent). Houston-area rents were 3.7 percent higher than in third quarter 2017, according to RealPage.


    Overall, North Texas apartment rents are still up by more than a third since 2010.

    The average Dallas-Fort Worth-area apartment rent is at a record of more than $1,100 a month.

    Still, the rate of rent increases in the area is just a fraction of what it was a couple of years ago, when landlords were bumping up their prices by more than 5 percent a year.

    With more than 35,000 units still under construction, D-FW is one of the country's top apartment-building markets. And only less than 5 percent of the local apartment market is vacant.

    Net apartment leasing in the D-FW area totaled more than 8,500 units in the third quarter — the best quarterly performance in more than a year.

    "There was a little bit of an upward shift in momentum than we have been seeing," Willett said. "We still have a whole lot under construction.

    "If we hit a bump in the road in the economy, that makes it a challenging environment."

    Even with lower rent increases, there's no sign developers are cutting back on apartment building in North Texas.

    "You look at the building permit numbers and start the numbers and there is still no indication of that," Willett said.

    Apartment rent increases nationwide are slowing.

    Annual rent appreciation was unchanged in August for the first time in 12 years, according to a recent report by Zillow.

    Zillow estimated that Dallas-area rents were actually down 0.3 percent in August from a year earlier.

    "Slower rent growth means that renters may feel less urgency to buy," said Zillow Senior Economist Aaron Terrazas.

    View online

  • September 25, 2018 7:08 AM | Anonymous member (Administrator)

    Urban infill is attracting a lot of new people.

    By Matt Goodman Published in FrontBurner September 25, 2018 12:13 pm

    Back in May, the U.S. Census published new population data that highlighted a march back to the cities. Dallas and Fort Worth were beneficiaries of this trend, adding more residents than all but two other cities in the country. But the northern suburbs—namely Frisco and McKinney—were still growing at a quicker rate relative to their population.

    This week, the Census released more nuanced data as part of its annual American Community Survey. You can explore all sorts of fun data right here. So you see the population jumps (which were actually higher than the Census previously reported), but we can also see things like education level, median household income, median home value, total housing units, vacancy rates, and so on and so forth.

    Before we go further, these are one-year estimates, which carry the highest margin of error of all Census data. But it does paint a general picture. Dallas added 24,000 people between 2016 and 2017. That’s more than triple what we added between 2000 and 2010, and brings us to more than 150,000 new residents since 2010, when the last Census was taken. Median income jumped by almost $4,000, landing at $50,627. The median home value rose by more than $30,000, which now sits at $190,600. This spike occurred despite the fact that there are more housing units in 2017 as well as more vacancies than in 2016. So much for supply and demand.

    “If you look at those things by themselves, when there is more supply than demand, costs should be going down. But that’s not what’s going on,” says urban planner Patrick Kennedy, who also is a DART board member and sometime D contributor. “Incomes are going up, education is going up, some inflation is happening in the housing market nationwide, and the international capital flows going to cities for housing investment … all of that happening is inflating urban housing prices all over the place.”

    Plano actually lost about 1,000 people, while McKinney and Frisco both added another 9,000 and 14,000, respectively. Kennedy thinks that’s a clear result of land availability. Collin County is stretching farther north, and Plano doesn’t have the land to grow that its northern neighbors do. Instead, Plano has begun exploring infill projects like Legacy and building up its downtown

    Dallas has about 43,000 fewer people in poverty than it had in 2015, enough to drop our total percentage four points, to 18.5 percent. That’s still well above the statewide rate of 14.7 percent, however. Median rent jumped to $1,024 in Dallas, up from $961.

    “Those areas are pretty built out,” Kennedy says, referring to what have become the middle suburbs like Plano. “There are two moves happening. One is to urban places, back to the city. When people relocate from other places, usually they’re not expecting Plano to have some urbanism elements, which it does in downtown and Legacy, but I don’t think people generally expect that. When I first moved here, I wanted to get as close to downtown as possible. That’s what people think when they move to a place, or they move to Frisco or McKinney where their jobs are.”

    About that infill: Kennedy pulled numbers from the Census’ Public Use Microdata Areas (PUMA for short), which is super Census jargon for geographically bounded regions that it chooses to analyze. It’s the smallest, and therefore most targeted, of all the geographies that the Census digs into. One of those includes downtown, Uptown, and a stretch of East Dallas that ends at Abrams. He found that 28 percent of the city’s population growth occurred on 4.5 percent of its land. Rent here is at $1,358, up from $1,222 in 2016.

    These residents are also driving less, taking more public transit, and biking and walking more often. Public transit use jumped by 1,247 people within the PUMA, good enough for a 1.3 percent boost to 5.8 percent. Biking jumped from .47 percent to 1.29 percent, up 698 people. About 1,688 people are walking more, a jump from 3.76 percent to 5.61 percent. Kennedy says the numbers should encourage the city to reinvest in enhancing walkability and public transit.

    “That’s the result we want out of urban infill, not having to use a car for every trip, and that’s really the only way to reduce vehicular use,” he says. “I think this is an impetus for us to be reinvesting and making more places where active transportation is useful and safe because demand is there.”

    View online

  • September 23, 2018 11:06 AM | Anonymous member (Administrator)
    Preston Hollow People

    September 23, 2018 Bianca R. Montes

    Saint Michael and All Angels Episcopal Church has announced plans for a mixed-use development on its property along Douglas Avenue in the southwest part of Preston Center.

    The plans include a mid-rise office building on Douglas Avenue and a residential building on the western side of the site. The project will feature a full-service restaurant with a patio and other ground-floor retail that open onto public green space along Douglas Avenue.

    Parking for the project will be a mix of self-parking and valet.

    A key component of this project is expanded off-street parking for the church, said the Rev. Chris Girata, rector of Saint Michael and All Angels.

    “By reducing our surface parking and investing heavily in underground parking, we not only solve our long-term parking needs, but we can create a more inviting campus with expanded green and open spaces and improve traffic flows for the benefit of the neighborhood and the church,” Girata said.

    The new plan, he said starts to bring to life the vision his congregation has had for what their campus can be.

    Saint Michael and development partner Lincoln Property Company considered a project on the same piece of land in 2015 but put plans on hold pending recommendations of the Northwest Highway and Preston Road Area Task Force led by Dallas city council member Jennifer Gates.

    “Just like the task force, our parishioners want wide sidewalks, plazas, and green spaces,” Girata said. “Not only was it the right thing to do to wait on the task force recommendations, but we believe that we now have a far better plan than we had in 2015 – better for us and better for the neighbors.”

    John Walter, executive vice president with Lincoln Property Company, said the goal is to build a development designed to meet both the guidelines of the Preston Center Task Force and needs of the church and its surrounding neighborhood.

    “It has taken a significant commitment of time and money to accommodate the task force recommendations, but we believe the new result will be worth it,” he said.

    Peter Kline, a leader of the Northwest Highway and Preston Road Area Taskforce, agreed.

    “Based on my review of the preliminary plans for the proposed Saint Michael mixed-use development, I believe this project could be a role model for future developments in the Preston Center area,” he said. “They have gone to great lengths to address the concerns and the priorities of the area plan.”

    View article online

  • September 14, 2018 8:31 PM | Anonymous member (Administrator)
    by Jon Anderson
    Candy's Dirt


    The latest PD-15 meeting was interesting and odd. Unlike in prior meetings, this session was more of a conversation between committee members and city staffers Andrew Ruegg, Neva Dean and City Plan Commissioner Margot Murphy. It was a chance to ask questions of staff and each other to explore the next steps and possibilities moving forward.

    It was also a time to debunk some misinformation. Personally, I think the more free-flowing conversation was needed. The committee had absorbed plenty of information from the city and the neighborhood, and needed to make some sense of it to begin piecing it together.

    100-FOOT SETBACKS ON NORTHWEST HIGHWAY

    One topic of discussion, the existing requirement for 100 foot setbacks along Northwest Highway, highlights my feeling of oddity. The answer from the city, that the committee could change the existing setbacks within PD-15 was half-true. Yes, the committee can, but the 100-foot setbacks are contained within the individual parcels’ deeds and therefore would require city action to change, which is outside the power of the committee. I whispered this to city staff and was told I was correct, but no one clarified this for the committee.

    The reason for the setback chat was Royal Orleans, whose swimming pool and garage entrance encroach on the frontage road (not visible on map above). In a scenario where new development would increase traffic, a non-compliant, pinched road isn’t ideal.

    JUST FILE A ZONING CASE

    Thankfully on another question, Margot Murphy jumped in with an expanded clarification. The question concerned the misinformation floating around the neighborhood, propagated by those against this process – namely whether a developer could just file a zoning case and bypass the authorized hearing.

    As I’ve said, yes, a developer can, but they can only file a case for the 60-ish surplus units available. Commissioner Murphy expanded that to say the 60-ish units are a shared resource within PD-15. The other buildings in the PD would view one parcel trying to take those units as diminishing their own value and would fight it. Because of this, passage through Plan Commission and City Council would be very unlikely.

    COOKING THE COMMITTEE’S BOOKS

    Another piece of gossip is that the city already knows what they want to do with PD-15 and will just run over whatever the committee says. The fuller answer came back that whatever the committee decides will be captured and legalized by city staff, after which the committee will see/vet the final language.

    As it comes to Plan Commission, city staff and Plan Commission may add differing recommendations which are called out in separate boxes. It’s then up to CPC and City Council to work with the community before and during those approval steps to accept or deny any suggested modifications.

    At this point it’s is just like a regular zoning case where a developer typically says they want “X” and city staff either agree or amend before sending it on. The public gets to weigh in on those changes before they’re voted on. The public and committee aren’t shut out of these decisions until the final City Council approval is done.

    TRAFFIC STUDIES

    Traffic studies are a catch-22. The city has no money to fund one and won’t require one until a zoning case is filed by a developer, so how does the committee understand the traffic implications on their recommendations (that developers will use to guide their plans) without a traffic study?

    After much back-and-forth, the city said they could provide a traffic planner to speak with the group. During this exchange, I had another thought and texted a land-use professional in the room asking how much a study would cost. The answer was “thousands, not tens of thousands” of dollars.

    There are six buildings within PD-15, each building should kick in the $1,000-ish and get a study done where they design the parameters and there’s no whiff of developer or city steering the outcome.

    ECONOMIC VIABILITY

    The city reiterated they have no interest in the financial viability of any development project. Unfortunately, this translates into the city providing no guidance on what would be profitable to build while protecting the neighborhood’s interests.

    It was noted that A.G. Spanos, contract holder on the Diplomat parcel, funded two studies on the economic viability of various construction projects within the PD. As part of the developers’ plans, author of the most recent and detailed study, Joseph Cahoon was available to answer questions that the committee didn’t ask.

    In tonight’s meeting, city staff poo-pooed the idea of inviting Cahoon to a session to explain his work. Thinking this a mistake, I texted A.G. Spanos’ representatives asking them to invite the committee to a separate session. Alternatively, committee members can also contact Diplomat’s committee representative and pass along any desire to meet.

    ALTERNATIVE USE BEYOND MULTI-FAMILY RESIDENTIAL

    Thinking they were beyond contemplating uses beyond straight multi-family, one committee member was reluctant to completely abandon the concept of a neighborhood coffee shop and social venue (or even a dry cleaners) within PD-15.

    Preston Tower representatives were quick to point out that in the past there was a restaurant, various convenience stores, sandwich shops, and a coming wine bar. They said all those uses failed to attract enough customers to remain open and they gave the wine bar a year before it too closed.  Without the ability to advertise and the extremely limited parking, these uses would continue to fail from lack of patronage.

    Dry cleaners are a chemical nightmare for any site and are on par with gas stations for chemical contamination. Getting approval for one might be challenging and would likely wind up being a kiosk where clothes are cropped off and picked-up translating to a bevy of delivery vehicles in the neighborhood providing there was enough business to keep it going.

    REMOVE THE DENSITY CAP

    Another oddity. If the committee so chose, they could simply raise the overall unit density number and walk away. The density cap is the lynchpin to the PD’s control of development. Were that removed, traditional zoning cases could be filed with developers asking city hall to approve increases in height, lot coverage, setbacks, sidewalks, greenspace, etc. so long as they stayed under the density cap (just like today where someone could apply for the surplus 60-ish units).

    I’m glad the committee saw this as the cheat it is. Diplomat representative Maggie Sherod said is best when she said that this process of thoughtfully expanding development rights is complicated, time-consuming and a bit frustrating. However, it would net the neighborhood a better, more controlled result than just abdicating responsibility and hoping, (fingers-crossed) the city would get it right.

    Sherod’s words were particularly poignant because those selling (like Diplomat) are portrayed as just trying to grab as much gusto to line their pockets before they run away and leave the neighborhood in ruins.  Were that true, she’d only be pushing for the cap to be raised so she could run faster.

    CLIQUES AND MORE CLIQUES

    I’ll leave you with a little high school reminder. Note that no entity has polled the residents within PD-15 or the Pink Wall in general to get their opinions on what’s going or thoughts on development. Everyone who speaks, speaks for the few handfuls of people they’ve personally spoken to. Those who are against everything hang in their clique while those who are more open to the potential hang in another. Except when being harangued by someone from the opposing clique, folks stay in their clique. It’s warm, fuzzy and non-confrontational.

    So when anyone says, “everyone I talk to…”, remember “everyone” is a small number and their own opinion makes it highly unlikely they’ll hear from the other side. It’s the echo chamber of the clique.

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  • August 31, 2018 11:06 AM | Anonymous member (Administrator)

    by Jon Anderson
    Candy's Dirt

    I’ll cut to the chase (shocking, right?). Of the speakers last night that held opinions about the prospect of development, I counted 10 that were making positive comments and five were negative. There were a couple whose position I wasn’t sure of because their comments were more “don’t forget about X, Y or Z” – perhaps they’re the “undecided” voters?

    Not too shabby. The same cast were in each camp with the area low-rises being positive to the process while residents from Preston Tower and the complexes on Bandera being negative. Like politics these days, actual facts don’t shift the world views of people who “just know they’re right.”

    Those seeking positive change had many of the same messages on quality, permanence, uplifting the neighborhood, and equity, punctuated by admissions that the low-rise buildings, at 50-plus years old, were simply pooped out. Of course they pointed out that the economics of the situation make increasing density a necessity (unless impoverishing the whole area is a goal).

    But beyond economics, increased density done right can make the neighborhood more vibrant, benefiting all. D Magazine recently dedicated a special issue to “Dallas and the New Urbanism” and I read every word. In fact, the city should send one to every home and force citizens to pass a test. It’s that good.

    A pair of speakers from the Diamond Head Condos said the word that must not be said. They said that whatever density and height everyone else gets (including a high-rise), they should get too. The word they shouldn’t have said?  Height. While I believe there will be equity in density, there isn’t a snowball’s chance of a high-rise going up across the street from Athena, nor do I think the city would approve one. It would be mutually assured destruction. Spanos isn’t getting a high-rise (and isn’t asking for one) and I’d bet Provident won’t get height on their northern section either. Height isn’t winnable, density is.

    The Two Faces of Laurel

    The Laurel continues to do double duty being almost unanimously disliked in one breath while being held up as the paragon of future development in PD-15. You can’t have it both ways. You can’t demand setbacks, underground parking, green space, and walkability and hold up the Laurel that gives the neighborhood precious little except underground parking (that one speaker was already complaining about moments later).  The neighborhood squeezed every penny out of the deal in exchange for lower height.

    John Pritchett, president of the Preston Hollow South Neighborhood Association continues to point out that if the Laurel could be built at four stories, so can Preston Place and the Diplomat. Here’s the thing. Two financial analyses say it can’t. Also, the Laurel’s land price was last negotiated in 2016. My PD-15 building has seen a dramatic increase in average unit selling prices per square foot since 2016. These last two-ish years are the only time the building has been in the black in pure dollars in the past 15 years. I’m assuming other neighboring buildings have also seen prices rise quickly in recent years (our tax bills sure have).  So no, the Laurel doesn’t prove four-story construction is economically viable today.

    IBM a better investment than Pink Wall real estate?

    That 15 year study on my building’s selling prices?  Adjusted for inflation, average selling prices are almost identical in 2002 and 2018. Put in perspective, had that buyer invested the same money in IBM, they’d be sitting on an inflation adjusted $56 per share, instead of a Pink Wall goose egg. Smart development will bring real property appreciation to the neighborhood.

    Pritchett said that it was false that former Dallas mayor Laura Miller hijacked the Preston Center Area Plan. I’ll say this: People who were in the room when her private meetings were held told me I was absolutely right. City staff and the consultants have told me they were not invited to the closed door sessions. Oh, and I was at the public meeting, sitting in back of Miller, when she announced she and the committee would rewrite the consultants’ report and deliver it back to Council Member Gates. If not a hijack, then what?

    He spoke about the monies spent, consultant-created reports created and such. Well, none of it made it into the main part of the report, whatever scant information the consultants provided can only been seen in the appendix. None of the major recommendations  on density, increasing residential in Preston Center or the Pink Wall made it into the main report.

    Lastly, let’s talk money. If it’s to be believed that the Provident contract was for $18 million and that it intended 220 units (versus the bloated vision they showed), that’s $81,818 in land costs per constructed unit. Extrapolating that down to the 60 units Preston Place could build by right, that equates to $2.45 million per acre. Not only does that impoverish Preston Place owners, but the resulting building would impact area-wide values.

    One speaker noted that were either Athena or Preston Tower destroyed, they’d not adhere to the Preston Center Area Plan either. She’s right. At $2.5 million per acre, each Athena unit would be valued at approximately $35,000 while Preston Tower residents and business owners would reap a pitiful $27,700 on average. They’d be whining bloody murder, and yet it’s fine for everyone else to adhere to the plan they pray to.

    On The Upside

    After the meeting, one high-rise resident commented that seeing Spanos’ proposed project during the prior meeting had alleviated a lot of fears (while Provident’s proposal heightened many). What that person didn’t seem to know is that last year Spanos presented their project in a closed door session with the Athena and Preston Tower representatives and volunteered to present to the towers’ residents. Both towers refused their request.

    A few seemingly innocent comments focused on items, like traffic planning, the committee simply hadn’t addressed yet. There was continued scoffing at studies showing that traffic on Preston Road and Northwest Highway has been decreasing for years. During the Preston Center Area Plan meetings, I wrote about the data presented …

    Preston Road and Northwest Highway Traffic DECREASING?

    The imagined current state of traffic on side streets wasn’t the only figment. Turns out much to everyone’s surprise (certainly mine), actual traffic on Preston Road and Northwest Highway has been decreasing … since 2001! There was a big dip during the recession, but it’s pretty much returned to pre-recession levels which are lower than 2001. In fact, according to Patrick Kennedy, a partner at the urban design and planning firm Space.Between.Design.Studio, when comparing traffic on Northwest Highway just west of the Tollway from 2004 to 2013 traffic decreased by 17 percent! Using another metric, Northwest Highway traffic at Preston Center has vacillated between 52-57,000 cars per day for eighteen years … in spite of the fact that the City of Dallas’ population has grown by hundreds of thousands of residents during this time (over 151,000, or 6.4 percent growth in Dallas County since 2010 alone).

    Who’d a thunk?

    Turns out that this mythology that traffic must be getting worse over time, is just that, mythology.

    Finally, one Preston Tower resident blamed Council Member Jennifer Gates for giving away money earmarked for fixing area flooding. Memory is a bitch, but Gates wasn’t in office during that bond program. Her predecessor secured the funds but didn’t spend them at the Pink Wall because that plan required University Park to help and they refused.

    Finally (really), in between meetings, a PowerPoint presentation was distributed calling on the committee to adhere to the Preston Center plan while also wanting underground parking, large setbacks, and the usual green space. For the last time (probably not), an expensive wish list doesn’t get done with no money in the deal.

     

    Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (201620172018) and two Silver (20162017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.

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  • August 20, 2018 2:24 PM | Anonymous member (Administrator)

    The hyperlocal social-media platform highlights small grievances—and proves that neighbors have more in common than they think.

    Ian Bogost July/August 2018 Issue
    The Atlantic

    Here are some of the things I heard about in my neighborhood over the past year: A thunderstorm downed a tree, blocking a central road; a shadowy agent called “the night clipper” arose, surreptitiously cutting overhanging bushes while unsuspecting property owners slept; several dogs and cats were lost, found, or “on the loose,” whatever that means for a cat; a federal-grand-jury-summons telephone scam struck; someone sought belly-dancing classes, an apparent alternative to Pilates; and, innumerable times, people deposited bags of dog poop into lawn-clipping and recycling canisters at the curb. All of this news came courtesy of the social-media service Nextdoor. On its website and app, people can post recommendations, updates, and warnings about their building, block, or neighborhood.

    Anyone who has subscribed to a neighborhood email listserv—or used the internet—can guess what might go wrong. Social networks connect people, but many of those connections degrade into vitriol. If Twitter is where you fight with strangers, and Facebook is where you vie with friends, then Nextdoor is where you get annoyed with neighbors—for sending “urgent alerts,” pushed late at night to mobile phones, about questionable emergencies; for trying to sell a tattered massage table or used carpet shampooer at near-retail price; for issuing nasty reprisals on matters large and small. But it can also foster connections among neighbors and help counter the social isolation brought about by technology.

    Nextdoor works a lot like Facebook, but instead of a “Like” button, it offers a “Thank” button, encouraging a kind of neighborly grace. More important, in order to join, you have to prove that you live where you say you do (by entering a code mailed to your home address, for example). Which means the community you enter is not imagined or diasporic, comprising people from the same school, profession, or interest group—it’s physical. You can “mute” neighbors on Nextdoor to hide their posts, but you can’t make them move away. Like it or not, these are the people in your neighborhood—the people that you meet each day, as the old Sesame Street song goes. Not just the postman and the barber, but also the aspiring belly dancer, the night clipper, the cat looser, and all the rest.

    Thanks to its popularity, the service offers a unique window into daily life around the country. Nextdoor’s virtual communities—which cover more than 180,000 U.S. neighborhoods, including more than 90 percent of those in the 25 largest cities—are becoming representative of the country’s actual populations.

    What do Nextdoor users talk about? On April 18, 2018, to pick a random day, the nation mourned former First Lady Barbara Bush, Japanese Prime Minister Shinzo Abe visited Donald Trump to discuss North Korea, and the world reacted to a deadly accident aboard a Southwest Airlines flight. But on Nextdoor, the overwhelming majority of Americans were focused on the impacts of late-season snowstorms: stuck cars, downed power lines, and especially snowplows. Grout and kittens were on mountain-time minds, and Oregonians seemed to be enduring a spate of lost wallets and duck encounters. In Florida and Colorado, problems with telecom services dominated the conversation.

    This is pretty normal. Steve Wymer, Nextdoor’s vice president of policy, told me that the same topics arise again and again, modulated by region and neighborhood type. Service requests and recommendations constitute 30 percent of chatter, and discussions of real estate make up another 20 percent. About 10 percent of Nextdoor conversations relate to crime and safety, Wymer said. (Suspicious persons come up a lot, often amounting to sightings of people of color in predominantly white areas. Nextdoor has attempted to discourage posts that use appearance as a proxy for criminality by prompting users to add more detail and blocking some posts that mention race.) Public agencies such as police and emergency-management departments also post updates to their constituencies. Noise complaints are another popular subject, according to Wymer—fireworks seem to raise particular ire—as are classifieds, missing pets, and gardening tips.

    Judging by the conversations on Nextdoor, it would seem that Americans are concerned first about the safety and security of their property, family, and pets, and then with their property’s, family’s, and pets’ upkeep and improvement. Though the platform breeds its share of conflict, it is notable—in contrast to other social networks—for the commonality it reveals, even in these times of unprecedented political division. No one, Democrat or Republican, wants a neighborhood strewed with dog poop.

    Jenn Takahashi operates a Twitter account and Facebook page called Best of Nextdoor. Because Nextdoor posts are private to local communities, Takahashi relies on users to submit funny or weird things they see in neighborhood groups across the country. (When her Twitter following recently surpassed that of Nextdoor’s corporate account, the company’s head of community congratulated her, while also gently wondering whether she would blur the neighborhood names in her posted screenshots.) Less than a year after launching the accounts as a loving gag, Takahashi has built what might amount to the most complete contemporary picture of day-to-day American behavior, a kind of crowdsourced Kinsey report on municipal perversity.

    Takahashi echoes Wymer on noise complaints—talk of fireworks or gunshots (they are rarely actual gunshots) is common, she says. Sometimes these complaints have dramatic consequences. In Seattle, a post about a dog’s bad reaction to some kind of cannon that was sounded during Seahawks football games led to an online dispute, and a neighborhood meeting at a library to talk it out erupted into a brawl. “Seattle is like the Florida of Nextdoor,” Takahashi told me, referring to the Sunshine State’s tendency to surface all manner of improbable events. Los Angeles is another source of good material: She’s received a handful of submissions about unrest in parts of the city where YouTube stars live, as fans mob the streets trying to catch a glimpse.

    Best of Nextdoor reveals a charming cluelessness that pervades America’s communities. People in cities can’t seem to tell the difference between a possum and a house cat, for example. In Alabama, someone tried to sell an unopened box of Hot Pockets. Near St. Louis, one resident asked why the neighborhood of WingHaven is called “Swinghaven.” In a suburb of San Diego, someone posted an image of a found sex toy and—not comprehending the purpose of the device—worried that it “looks valuable.” But most of Takahashi’s collection catalogs more-mundane patterns, like the poop-in-the-trash-bin crisis that seems to plague all Americans. Takahashi has amassed countless specimens, as it were, from run-of-the-mill lamentations to complex home-surveillance-camera-facilitated stakeouts conducted to find and shame the offending dog walker.

    In our conversation, Steve Wymer brought up Robert Putnam’s 2000 book, Bowling Alone, about the decline of in-person social discourse in America and its consequences for civic life. Putnam criticized the technological individualism encouraged by television and the internet, which had already shown a capacity to promote selfishness. Wymer argued that Nextdoor cuts against that trend: The company boasts dramatic examples of new collaborations the service helped enable—the neighbor who donated an organ to someone 10 doors down, whom she wouldn’t have known were it not for Nextdoor, and the person stranded on a roof by Hurricane Harvey who was able to summon a rescue boat via the service.

    But usually life is less dramatic than that. In the most-common Best of Nextdoor submissions, neighbors worry about a weird truck driving by slowly, early in the morning. Ever vigilant, other users respond that they have already reported the suspicious vehicle to police, as law-enforcement representatives on the service encourage. Typically, the offending vehicle turns out to be the newspaper-delivery person, plodding through the suburbs to bring print news to the residents who still read it that way. Eventually, someone explains how newspaper delivery works, and order is restored.

    I’ve seen a version of this post in my own neighborhood. Someone writes: “Concerns about white man with turban on bicycle.” Almost instantly, responses arrive: “Oh, that’s Floyd, he’s harmless,” and “Yeah, he’s been around forever.” Some neighbors theorize that he might be a wizard. It’s a small thing, and maybe not one to be proud of—but the neighbors’ concerns get assuaged, and Floyd escapes torment. That’s a post worth clicking “Thank” on.

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  • July 27, 2018 10:54 AM | Anonymous member (Administrator)

    by Jon Anderson
    Candy's Dirt

    Example of seven-story building construction and density options

    A.G. Spanos has released a second, more thorough economic analysis of the feasibility of redeveloping Pink Wall parcels within the confines of the Preston Road and Northwest Highway Area Plan (PRNHAP). Spanos has a contingent contract to redevelop the Diplomat condos within PD-15 and has financed both viability studies. While Spanos has obvious motives, any economic data supplied is certainly more than the economic nothingness contained within the $350,000 PRNHAP study. How the city adopted that Santa’s lap of a plan, containing no financial underpinnings, still astounds.

    You’ll recall that in October 2017, my rough calculations exposed the then 10-month old PRNHAP as economically bogus. That was followed up in January 2018 by Spanos’ first report developed by architects Looney Ricks Kiss that backed-up my findings. Namely that the recommendations contained within the PRNHAP study’s “Zone 4” are not viable to build. This latest study offers more detailed and dire details for the PD-15 area (download here).

    To be clear, “not economically viable” means that a condo unit would sell for more money as a condo than as developable land. To sell under those conditions would equate to owners taking a loss on their home. In many cases it’s good when land is worth some fraction of a structure. It helps with neighborhood stabilization, curbing gentrification, etc.

    PD-15 area

    However, neighborhood revitalization is hampered when the combination of land costs and development rights are less than the value of existing development.  I catch flak for “secretly” wanting to bulldoze the Pink Wall and put up acres of junky apartments. I don’t. But I do realize that some Pink Wall buildings have undercharged their HOA dues, resulting in years or decades of deferred maintenance. A cursory glance tells me that Imperial House is the only building to have swapped their original inefficient windows, let alone the number of hidden plumbing, foundation and electrical issues that continue to mount. Residents of more than one Pink Wall complex have told me that while they look good on the outside, they’re rotting on the inside.

    The Latest Study

    Produced by internationally known real estate consulting firm HR&A, the 18-page report isn’t for the feint hearted looking for a quick read. The firm’s business ranges from High Line Park and a five-year advisor on energy efficiency in New York to analyzing Dallas’ underinvestment in its park system. Author Joseph Cahoon has extensive work experience in multi-family residential development and is an adjunct professor and Director for the Folsom Institute for Real Estate at SMU’s Cox School of Business. In a word, qualified.

    For the uninitiated, the document is dense, probably requiring more than one read-through (I did). There’s jargon that won’t be immediately comprehended, so before we discuss, here’re the two biggies:

    Residual Land Value: The cost of land. We typically think of land prices from a seller’s point of view. But from a developer’s viewpoint, land value is backed into by deconstructing the total cost and ultimate selling value of a building (rent, cap rate, profit margins). Therefore, residual land value is how much a developer can pay for land minus the costs of a project and expected cap rate (below).

    Capitalization or “Cap” Rate: The initial yield or profit margin expected from the project (total generated rent minus construction and long- and short-term operating costs).

    With that in mind, the study builds out nine scenarios (three heights, three average unit sizes). The four-story examples adhere to the PRNHAP study’s height and underground parking limitations. The seven- and 10-story scenarios are three-story steps in height, taller than the PRNHAP study allows, but do include completely underground parking.

    Ignoring PD-15’s density limitations, the assumed number of units are what could be built on an acre of land with reasonable setbacks. Extrapolating these to the larger Preston Place and Diamond Head lots or Royal Orleans’ smaller buildable lot would adjust unit counts accordingly (but not linearly as larger and smaller lots offer different economies of scale).

    Next is the estimation of construction costs per square foot based on unit counts, size and underground parking. Construction costs may appear high but they include all underground parking (expensive) and also factor in the tighter one-acre example lot. Smaller lots are less efficient to build on. Construction costs relating to the two-acre Preston Place costs would be lower, all things being equal.

    Filtered into the numbers is the type of construction. Four-story construction would be wood “stick” construction above ground sitting on 1.5 to 2.5 levels of underground concrete parking (depending on unit size/count – fewer/larger units require less parking). Of the three this is obviously the cheapest to build and can be seen at the Laurel on Northwest Highway and Preston Road.

    With seven stories, hybrid building techniques come into play. From the bottom, there would be 2.5 to four levels of underground parking. Concrete would continue for an additional two stories of apartments above ground before five stories of stick construction for the bulk of units. These are sometimes called “five over two” buildings

    At 10 stories, there would be 2.5 to 4.5 levels of underground parking with a full 10 stories of concrete construction. You may be wondering why the uplift to all-concrete is less than the difference between the four and seven story examples if concrete is supposed to be so much more expensive. Two points: There isn’t a lot of difference in the number of total units between seven to 10 stories due to lot coverage differences (a 10-story building covers less lot). Essentially adding 10 units (and three stories) to the seven story model raises overall costs nearly 15 percent. Because of the small number of units added, there’s not much more underground parking required either. Lot coverage could be increased were the pool placed on the roof (which would add height and/or cannibalize a whole floor).

    The 10-story example is what I call the “no man’s land” of building. The gains over a hybrid building aren’t enough to justify going all concrete (unless you go higher).

    Studying the Dallas area, the report sets a 5 percent return (cap rate) as the average based on comparable buildings. By comparison, the interest rate on a no-risk 10-year Treasury note is currently around 2.85 percent. A cap rate less than the Treasury rate wouldn’t make sense for the risk involved. Risk comes from a variety of factors including future property taxes and chargeable rents.

    There’s a lot of red in this table. Essentially, based on the PRNHAP study, none of the four story scenarios are cost effective to build in the current market. The higher buildings even less so.

    The report concludes with the understanding that the PRNHAP study is economically unworkable if the goal is to revitalize the neighborhood as it claims. Even at its best, can you imagine the Preston Place owners paying a developer $260,000 (double lot) to build a four-story building with average units of 1,450 square feet?

    The report states that in order for the math to work, there has to be give in the PRNHAP study and/or rents will have to rise well above expected rates in a market where the high-end is cooling. There’s little anyone can do about rents, but construction costs are another ball game.

    Underground Parking

    One of the big levers is the preference for completely underground parking. The cost differential between above- and below- ground parking is roughly two- or three-to-one. Were some of the parking allowed above ground, the economics shift for the taller buildings. But the four-story would need to trade residential space for parking, reducing unit counts (and profitability) and therefore it never reaches economic viability. Played out …

    Take the mid-sized example of 950 square foot units — 80 units in total and two full underground parking levels. Bringing those two floors above ground could cut the unit count in half to 40. But 40 units wouldn’t need two floors of parking, so call it a single floor of above ground parking with three levels of 60 apartments. While you’d save the excavation costs of the parking, you’d still incur the concrete costs of the above ground garage (can’t park cars in a wood parking lot). Net-net, the reduced unit counts would reduce the profitability so you’d still be in the hole (and so no one would build it).

    Looking at the seven- and 10-story examples and it appears that those projects are even more unprofitable. But there’s opportunity in their height and resulting unit counts to enable some above ground parking (wrapped inside the building and invisible outside) to make the numbers work.

    Combining an ability to increase to seven stories with a mixture of above and underground parking gets you so far. Building a better quality building that generates slightly more rent is the intersection where developer, seller, and neighborhood meet.

    With the ongoing trade war impacting raw material pricing and the ongoing shortage of construction workers that federal immigration policy is exacerbating, construction margins are more on a razor than a year ago when labor shortages alone had raised prices.

    A little on the nose?

    Some of you may be thinking that this research plays suspiciously into Spanos’ hands because their proposal is for just such a seven-story building at Diplomat. But here’s the thing, this isn’t Spanos’ first turn on the dance floor. Surely they ran their own numbers before deciding to proceed. After all, they spent a year measuring, drilling core samples, negotiating and crunching numbers before writing their contract for Diplomat.  Like Goldilocks, the four-story was too little, and the 10-story wasn’t worth the aggravation for little upside, but the seven-story was just right.

    And sure, there are ways to push and pull the metrics that the PD-15 authorized hearing can explore to further fine tune things for the neighborhood. Just remember that higher margins enable a developer to give back more to the neighborhood. Higher density also allows for the costs of givebacks to be spread out. Balance is key.

    At any rate, this new report gives committee members (and the neighborhood at large) some idea of the financial aspects in redevelopment.

    Finally, to those praying at the altar of the Preston Road and Northwest Highway Area Plan, where are your numbers? We know none of the $350,000 spent was for economic modeling to back up its desires, but how about now?

     View article online

Preston Hollow East Homeowners Association
PO Box 25528
Dallas, Texas 75225

info@pheha.org

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