How Land Use Regulations Affect Property Values

Most of you have heard by now that we are soon to have a new Title 21, the ordinance dealing with the municipality’s land use regulations. All of the chapters except Chapter 14 which deals with definitions have been provisionally adopted by the Anchorage Assembly. Just getting to that point has cost hundreds of thousands of dollars and almost as many, if not more, hours of brain power, and almost ten years.

During the process, hundreds of concerned citizens, dozens of civic groups and private development interests have had an opportunity for input. In addition, the Anchorage Assembly had a weekly subcommittee meeting which examined the draft word for word, line by line which was chaired by then assembly member, Dan Coffey. Many of the decisions that were finally made were contentious, such as the fate of non-conforming uses, residential design standards (to have or not to have narrow garage door front homes) and subdivision requirements.

And after all of that hard work and input, it is still not finished. Last September, Mayor Sullivan hired Dan Coffey to review the provisional draft approved by the Assembly and make additional recommendations on some of the hot button issues. That work is expected to be finished within the next 90 days at which time it will return to the Anchorage Assembly for a vote on any changes. Prior to that public hearing, depending upon the extent of the new recommendations, it may or may not make a stop at the Planning and Zoning Commission. (For disclosure purposes, I am a member of the P & Z Commission.)

Potential changes to the provisionally adopted Chapters have not been revealed but suffice it to say, the Sullivan Administration is most likely going to modify some of the more prescriptive changes to be more friendly to builders, developers and property owners. Hot button issues, other than those mentioned above, include height limitations in some commercial districts and a limitation of uses in the commercial catch all B3 district.

But whatever the changes which are finally adopted, new developments for commercial, residential and land development will become more expensive. First, no one is really going to know how the new regulations will apply. Thus, private planners, architects and engineers will have to charge their clients more just to figure out what it all means. New code interpretations will vary. MOA planners, engineers and reviewers will also have to spend more time interpreting the new codes and that extra time will also be charged back to the applicants on an hourly basis.

And time is money, especially when you have a loan with the bank for a new project. Developers can expect additional pre-development (before you even get in the ground) expenses and time delays. The new code does not address accountability by MOA officials. In other words, a developer pays his application fee and there is no requirement for the MOA to respond within a specific time frame. With new regulations, applicants can expect several reviews and modifications. Each review and modification creates additional interest charges on a loan, additional fees by the engineers and architects and more fees charged by MOA officials.

Change is inevitable and we need revisions to the new title 21 which was written over thirty years ago. Having said that, however, developers and builders are going to be in for a rough ride as all the new requirements get implemented. The economy may be picking up. The Anchorage Economic Development Authority predicted this past week 500 new jobs in Anchorage for 2011. Unfortunately, the new title 21 will slow down development as no will want to be the guinea pig out of the shoot with the first application.

All this means more expense for the end product and thus to you, the consumer, whether it’s for a new home, office space, retail space in strip mall or a residential lot. For the next two years, your best buy in any of these categories is real estate that is already built.