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Originally Posted by ue
So, what, beyond zoning and wanting to max-out profit on larger scale developments, are making smaller scale but dense developments prohibitive in ways that they hadn't before? What are these hidden cost factors?
Average homes may not have adequate transit... sure, but that isn't the focus of this conversation. I'm saying reproducing much of what was done before WWII is possible and would reduce the need for car infrastructure.
I'm also not suggesting a third floor without an elevator is good. I like the accessibility requirements as it ensures everyone can, well, access a building adequately. The lack of an elevator is fine IMO for a rowhome type development much as it is for a SFH. Any staircases in these situations can be retrofitted to ramps. In small apartment buildings it is a bit different. I'm not sure what the perfect solution is, but I've highlighted some in my previous posts.
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First, the goal isn't just to "max-out profits." It's more basically to allow the project to get built at all. Projects with shaky pro formas have a hard time getting equity or lenders. Even if they're marginal and manage to get funded, the terms won't be good. And another goal is for the developer to avoid losing money (common in 2008 and 2020).
I tried to address your first question already, maybe not clearly enough: "Physically, elevators, stairs, lobbies, hallways, any amenities, etc., will need to be a large percentage of what you'd do for 50 or 100 units, and multiples on a per-unit basis. In soft costs, you're also spending far more money and time per unit."
In other words, a building with six units won't have that much less common space as a building with 60, and it'll have far more on a per-unit basis. Same with myriad other costs from utility hookups to the front door. The effort required for finance, design, entitlements, construction management, etc., won't be that much less either, and will be far more on a per-unit basis. And no bulk buying...everything from the architect's and contractor's fees to material costs will be higher per unit. Not to mention your own time as developer.
You can make all of that work in a vacuum. But when someone else can offer substantially lower rents by building on scale? That's why you don't see much in the 3-6-unit multifamily range even when it's allowed, unless other types aren't.
As for townhouses, yes they can avoid a lot of costs. In some areas they have the added advantage of avoiding most of the condo liability issue as each might be treated as a single house under defect law. Each home is protected, but you don't get the frivolous association suits that plague some states, or the various process and insurance costs that go into making sure the suit won't be too damaging.