Much of my work in the past decade has involved representation of real estate developers, though they are fading fast. Though my firm has other sources of revenue–municipalities, lenders and homeowner associations–I really miss the developers, because I admire their courage and enjoy their personalities and optimistic approach to life. All of them are low, and some of them are sunk. Most of them will pop back up eventually: they’re buoyant.
It bothers me to hear people talk about how bad they are and how, in this downturn, they’re getting what they deserve.
Developers are easy targets. They send in bulldozers and push over trees. They cause erosion. They would rather apologize later than ask permission. In other words, they have the energy required to plan and execute capital intensive projects, requiring personal financial risks and coordination of dozens of others–lenders, contractors, subcontractors, architects, engineers, lawyers, escrow companies, mortgage underwriters, insurance agencies, etc.
The result is that we have houses, streets, places to shop, and places to work.
The development process is often obnoxious to all. The developer is frustrated by bureaucracy and NIMBYs. Citizens are alarmed by the destruction and the developers’ lack of sensitivity. Government officials accuse developers of ignoring regulations.
The irony is deep, because the bureaucrats’ bosses (elected officials) have encouraged development and would have trouble staying in office if it didn’t occur, and the current crop of NIMBY people are living in the neighborhoods built a few years ago over the protests of a previous group of NIMBY people, who wanted the development door to lock behind them. Often the regulations are illegal or stupid and everyone knows it.
Real estate developers are a lot different from the rest of us. They’re willing to bet everything they have to start a project, signing personal guarantees on loans that allow the lenders to do anything to them short of physical torture. Developers don’t mind ordering in heavy equipment to transform landscapes, whether the landscape is blighted or pristine or in between. They are willing to work closely with real estate brokers and designers to try to figure out what people want. They round up contractors and subcontractors. They don’t have time to put everything in writing, and they develop lasting relationships built on trust with a lot of give-and-take. They have great passion for what they do, and they wonder why the regulations that they work under are so poorly written and administered. If the regulations were intelligible and enforced fairly, developers and the public wouldn’t spend so much time in conflict.
The rest of us don’t take huge financial risks or accept the massive burdens of the development business; we don’t have the required broad shoulders, management abilities and courage. We would live with less, perhaps unhappily (even though there is a very good case to be made for living with less). However, most of us don’t want less, even if we think we should want less.
Real estate developers exist because there is an economic demand for their products. Just as we get the government we deserve, we also get the types real estate developers that fulfill our wishes. Banks need them so they will have customers for the money they have to lend. The public wants and is willing to pay for the houses and commercial and industrial facilities that developers make possible. Those who stand up to meet our demand are developers. We call them villains, but we are talking about persons who put all they have on the line to give us what we want.
Of course, some developers are jerks and bad citizens. With more than 20 years of law practice behind me, having heard the dark secrets of thousands of people and having attended scores of public and private meetings, my informed opinion is that the public morality of real estate developers is no worse or no better than that other businesspeople or people in government. If I were in a pinch, I’d call a real estate developer for help, because they are brave, resourceful and willing to overlook petty differences.
They like big challenges, and we need people who do.