วันศุกร์ที่ 1 กันยายน พ.ศ. 2560

Americans Fail to Support Innovative Developments - Key to Survival of Sustainable Real Estate

Perhaps the key component behind America's great economic achievements is the entrepreneur. For example, Henry Ford helped the US dominate the global car industry for decades and Bill Gates helped make it dominant in the software market. Investors in Google, Facebook, YouTube and Twitter insured dominance in social media. While these success stories are well know, the factors behind them are less so. For his part, Ford did not invent the car nor did Gates invent the computer or DOS. And key technology components of all social media and search engine sites were invented by others.

Similarly, real estate development followed a similar pattern with many innovative developments started by "idea men" that did not carry the project to fruition. Those dreamers are lost in the mist of history.

In the last part of the Twentieth Century developers were often accused of inducing sprawl, endless paving, and undermining natural beauty. Some of this arose from bad ideas, but the real innovators in real estate created outstanding concepts that they might not have completed due to a variety of reasons. Insufficient financing is the leading cause of development failure. The current carnage in the real estate market destroyed many good development ideas along with bad.

One such innovator was Charles Fraser, considered the father of the modern American beach resort. Mr. Fraser along with his brother and father developed the Sea Pines resort on Hilton Head Island, creating a resort of beach property, shopping, marinas, golf courses, and tennis courts out of wooded, sparsely populated island. Mr. Fraser was also involved in the initial development of Amelia Island Plantation Resort. Both developments were ahead of their time and eventually experienced financial hardship with other investors turning both of resorts into viable ventures.

Donald Trump also made his name as a real estate innovator WITH some of the first brownfield redevelopment projects in New York City. His first attempt was to redevelop the Penn Central yards on the West Side in 1974, but a lack of financing caused him to lose the project to a competing group. When that group was unable to obtain financing, Trump stepped back into the picture in 1985 with a new plan for Television City, but it never materialized due to zoning problems that caused NBC to back out of the project. While Trump did complete the majority of his vision eventually he lost control in the 1990s due to financial problems. The final pieces of the project were finished with a development group from Hong Kong.

Many other examples of smaller, less famous developers can be seen in almost every city in the US due to the financial turmoil and the global real estate bubble, but this is an exception rather than the rule. More often than not the less well financed developers base their plans on idealized conditions and when these conditions fail to emerge they generally do not have a fallback plan.

Americans often say they want something unique, that they are against sprawl and uniform subdivisions. However, what they really mean when they want something different is just a different color front door! Innovators offering revolutionary ideas are often met with skepticism and resistance to change. Ultimately this resistance causes the innovators plan to deviate from course. With little time and capital to react, they are prone to fail. Only after a larger source of capital picks up the pieces is the ทาวน์เฮ้าส์มือสอง ราคาถูก project completed. In rare instances the original vision of the "idea man" survives the change. Most often the vision is modified and in the end just a shadow of what might have been.

Interestingly enough, I believe the root cause of the plan failure is our own resistance to innovation. Two innovative development concepts currently under threat are "New Urbanism" and "New Ruralism". Both are reactions to suburban development. New Urbanism is the more established of the two thus more likely to survive the current real estate conditions. New Urbanism had been embraced by the public, but many of its capital intensive projects face stiff challenges under current market conditions. Redevelopment of an area that includes essentially all the infrastructure of a small town requires enormous capital resources. These projects must include a town center with commercial elements. Initially, an interesting anomaly arises with homebuyers seeing an empty city while businesses see empty homes. As such, a delicate balance is required to shorten the natural lifecycle of town development.

New Ruralism on the other hand is far less established with either the general public or sources of capital. It suffers in part due to a lack of a clear definition as developers have different interpretation of the concept. Some of have centered on farming, with a restaurant of bed and breakfast as seen in the Atlanta development Serenby. Others like Harvest in North Carolina center on individuals owning larger tracts of land for farming. Another incipient trend combines America's love of wine with a housing development with Montaluce Winery and Estates as one example. The big question given the current economic climate is whether nonconventional developments like these will survive. (For a more in-depth discussion of New Ruralism look at my previous Ezinearticles publications.)

http://en.wikipedia.org/wiki/Sea_Pines_Resort

http://en.wikipedia.org/wiki/Riverside_South_(New_York_City)


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