Ok, somehow among my group of friends, there are several developers, investors, mortgage brokers, realtors, etc. How did that happen? Well I am related to one of them and they are his friends and we all hang out together.
Anyways, conversation has stayed away from work topics until just recently. Now we talk about our respective roles in the biz and what we get out of it quite often. The developers talk about doing "design". What they mean is deciding if Unit A has 2 or 1 1/2 baths, and how much s.f. per unit. They had an in-house designer for awhile but they fired him because he asked too many questions. The talk is entriely filled with number of units, square footages, cost of land per acre, what builders are the cheapest, and how much money they are banking on each project. It is quite enlightening in a way.
Meanwhile, I can't hardly get a word in edgewise, and they wouldn't understand even if I did. When I do talk about my projects, I use my terms, and get interrupted with stuff like, "So YOU did the design? Why didn't the developer just design it himself (and you be his drafting/stamping service)?" "How much will that cost? We just found a builder who will build 25% less than our builder, and we'll be raking in the dough." "We are going to buy 800 units that size tomorrow." They talk about how they take naps at work, go out for fancy ass lunches all the time, play poker at work, work half days regularly, etc.
I hate developer mentality even more than ever lately. (Except that they buy me the most expensive drinks and don't even batt an eye.) One is my age and claims to make 1/4 million dollars a year, and is on his 2nd Mercedes (paid for by the company). These guys are thrilled about their careers and think they are SO fricking smart.
Perspective changes everything. If I didn't know any better, I would think they were smart too, I guess.
find a nice condo project of theirs and get some hungry construction-defect litigators... they can ALWAYS find something wrong w/ the building. see how smart those "designers" are when tenants are suing them cause it takes 30 seconds for the hot water to turn on or cause they can hear their neighbor's headboards banging away at 3am.
I hear ya Strawbeary! It's a different world out there. It's insane to hear what kind of margins developers are making on their projects. McMansions cost about $45-$60/sq.ft. to build, but are sold in the neighborhood of $300/sq.ft.
For all those garbage EIFS condos you see going up everywhere, they are so overpriced that the bank loans are paid off immediately after occupancy and there's plenty of money left over to cover the construction defect repair/litigation (usually <2years after occupancy) and new Benz's, BMWs, and Rolex's for everyone involved!
The kicker is that they have suggested me and my husband join them. And I say, "Well, no, I really..." (get's cut off).
Opportunity is knocking. Maybe I SHOULD. I'd get my arch license, quit working for the man, switch to real estate development and mortgage closings, have martini lunches M-F, make a few million, retire at 36 and do architecture as a hobby.
i think in california the statue of limitations is 4 year for patent and 10 years for latent defects... you gotta wait until the champagne has lost it's fizz and then get 'em!!
It worth a shot...whats the worst that could happen? you make a couple million, then decide you don't like it. If you decide to pass on the offer...send the info my way....
interesting topic. i think it is easy to stereotype the developer, as our office receptionist likes to say, as "the guy driving the bmw, talking on his cell phone, and cutting you off in traffic." however, i think to generalize developers this way is perpetuate the often antagonistic relationship between designers and developers. my friend says this world would be better if you just let designers do their job. to me it's not about being "allowed" to design, it's about TAKING something back.
reminds me of a meeting between a city planner, a developer team, my boss the architect, and I. became a heated debate about whether or not to add retail on corner x,y,z. planner wanted it. developer didn't. planner wanted to "activate pedestrian corridor". nevermind there were nothing but parking garages for 8 blocks. not this developer's fault planning department allowed previous condo developers to pillage the area and put podium garages everywhere. total lack of context. why should this developer be tied to building unleasable retail space. what authority does the planner have? she was not elected. it wasn't her money on the line. was it the extra class she took at harvard?
i doodled a sketch of a new scheme as they debated (total metaphor for the role of the architect in the scheme of things).
i guess the point is that developers are not the enemy. it is us, our own apapthy, our ivory tower mentality, our ivy league degrees (and the debt that goes along with it). we have the vision, just don't have the hustle to fullfill it.
something is missing from this profession and i want to take it back....if only i knew what it was that's missing. maybe developers are smarter, and we just don't want to admit it.
the developer on one of our projects flew to europe on his private jet, decided it was too slow and took the concorde back. (this was before it got grounded).
developers aren't necessarily smarter ... but they do control huge parts of the process ... and, at the end of the day, they are the one's taking the bulk of the risk ... we think we have a lot of E&O exposure ... but, if you ever go into development, you'll find that you go to a bank for some money to do a project and they want you to put up everything you own and also personnally guarantee the millions that you want to borrow. those are very sobering conversations.
right now, it doesn't seem like developers are taking much risk to pocket all that loot ... but, wait until the market turns.
i know a couple of retail developers who had a project go south on them ... the project was foreclosed and each of the partners in the deal wrote personal checks of $2,000,000 just to make the bank go away and stop hounding them. of course, they were fortunate to have $2,000,000 -- but, any way you look at it, that's some serious money leaving the house.
Developing is gambling, more or less. No risk, no reward, but the risk is in proportion to the reward, so while you can get rich quickly, you can lose it all in the blink of an eye.
I know of more than one developer that went from having tens of millions to living in an apartment almost overnight.
well i work for an architect who is also a developer. we do bring "real" design to our projects, but honestly i do think architects could develop the ability to think more like businessmen and still bring what they know to the table.
ACHF, why are you getting the legal and suing rhetoric in here? maybe thats why architects dont make friends with the developers and cry about being poor.
I met my first developer in the wild this weekend. A guy my age, actually. Upon learning that I was an architect, he launched into an energetic sales pitch about his company vision and process. He was noting that their residential developments REQUIRED "architectural" elements like cast stone window surrounds, wood clad windows, rounded rain gutters, and about a dozen other faux-tastic things. They gave their homes an "old world Europe" styling, right? They also had 4" caliper trees, that - get this - would grow to be larger trees in a decade...
Even the most delicious Koolhaas kool-aid couldn't achieve the potency of bonkers that this guy had ingested. And once he stopped talking, he would repeat my own comments back - worded differently - in the most condescending way I've ever encountered, as if everything I said needed some sort of clarification. He didn't agree that "old world Europe" developments were an abomination in North Texas, so what more needed to be said?
I'm not convinced that this guy does any actual work.
Nice comment, dot. And good conversation everyone.
I'll just add that in my limited experience with developers, they describe buildings as "products". I describe buildings as "projects": implying a loving approach, an ongoing relationship, a commitment to quality, a concern with future implication of decisions made, etc. But I think it would behoove (is that right?) architects to learn more about the idea of a building as a product without entirely letting go of the project aspect either.
Strawbeary, as freeborn said, you could always try it then leave. You could learn enough in the strictly-business-end developer world to later leave and start a modified architect-developer version, funded by your developer income, that feeds your soul.
Liberty struck the nail on the head that developers think of building's as products. It goes even further than that though; the thing you have to accept on the developer side is that a building is simply a vehicle to generate cash flow. The value of this building is only the present value of it's future cash flow. If building "A" can only generate so much cash flow then the only way to maximize profit is by minimizing first cost and design and construction are the easiest targets.
I'm not an architect but a work for a large general contractor. I spent time working for a very active developer in LA and was in general turned off by the experience. I'm okay with not driving a beamer and know that I'll have greater satisfaction one day in driving my kids by a magnificent building and saying "I built that." I get a kick out of knowing the intimate details of these buildings; what isn't built to plan and why, what terrible stress we had with something seemingly so simple. I love building too much to let it boil down to dollars and that's why I stepped away from the money, the easy hours and the fancy business card.
for the litigation side of things. we just had a "managing risk" seminar at our firm not too long ago which basically extolled all the reasons we should not get involved with such condominium projects. it basically leaves the architect wide open for lawsuits.
but to get back to the discussion (which is one of the better ones on archinect these past few days/weeks) architect as developer has it's own set of limitations as well. since you ARE taking the inherent monetary risk you have to be sure to deliver a product that is in the black. on the other hand you want to execute a project that meets your design goals. i think it's a very difficult position that you put yourself in when you have to balance the two. not saying it's a bad thing. but something that's even more difficult to do than just design. you have to be the one that determines your compromises. you don't get to have someone tell you "no, we can't do that, it's too expensive". you end up having to set your own limits; which can be quite difficult. not saying it's impossible.
i remember reading about a guy in san diego a while ago that was taking lots of urban infill sites and doing the whole architect/developer thing.
i spent about 10-years of my career on the developer side of the table ... like every other field of endeavor, there are good developers and there are bad developers ... it is unfair to paint all developers with sweeping generalizations
there are those developers who understand the value of good design / there are those who don't ... there are those developers driven totally by the immediate bottom line / there are those who take a longer term "investment" view ... there are those developers who become good stewards of the land / there are those who don't
to some, any developer is "Satan Incarnate" ... some deserve that description, but I know quite a few who do not ...
what's really important is that these people are not going away ... they will continue to operate because there is a need for what developers can do ... in some context, developers add value and they are paid well for that value ... our challenge is to learn to work more effectively with the development community ... we have to make a better business case for those aspects of design that we care about ... we have to speak more persuasively about the value that we can add ... otherwise, we will continue to be ignored and marginalized by the development community.
The guy in San Diego you are thinking of is Ted Smith of the firm Smith and Others.
Smith gave a rather inspiring lecture (entitled "Architectural Empowerment") at Georgia Tech last week where he outlined his approach to getting his projects funded and approved by code officials. He also mentioned that he runs an "MArch RED" program at Woodbury University in San Diego where they teach development to architects. I believe that another SD architect/developer, Jonathan Segal, is involved with the Woodbury program.
Judging from the work he showed at the lecture, it seems like Smith has developed some viable strategies for designing and building your own stuff, without interference from traditional clients or developers. Sounds like an architect's dream come true......
on the other side of things, how do we address the unscrupulous developers that just want the biggest profit margin possible? and what of the architects that pump out the tract homes and condos for these types?
An excellent discussion. And I'm glad to see some nuance in discussing developers--the source of funding for much of our work. Babs and Trace have it right: for every developer out there throwing money around, there are others who have lost money, big-time. It does seem that profit margins are out-of-whack for the successful ones, but not all succeed. (They're like actors, in a way. For every Jim Carrey making $20 million per, there's ten thousand or more shlubs showing up at casting calls between table-waiting shifts.)
It's never good to stereotype. Architects get stereotyped all the time, and just as unfairly.
"how do we address the unscrupulous developers that just want the biggest profit margin possible?
... i assume the issue here mostly is about "unscrupulous" and not necessarily the "biggest profit margin possible" ... the two can be mutully exclusive
in my experience, the most meaningful ways to restrain the unscrupulous developer are:
a) good zoning laws
b) good development controls
c) good building codes
d) competent, honest building officials
e) an activist citizenry that cares about liveable communities
f) a design community that's willing to exert leadership
as architects we can influence all of these, if we take the time to get involved in our communities
I didn't intend to stereotype or paint all developers with generalizations. I am working with a great developer as we speak.
I was very specific about who I was describing above - my friends of course! And those were real experiences, not made up.
"we have to make a better business case for those aspects of design that we care about ... we have to speak more persuasively about the value that we can add ... otherwise, we will continue to be ignored and marginalized by the development community." - this is what I hope to do. But as mentioned above, it is easier said than done. I get steam rolled with "lots of square footage, hunderds of units, undeveloped land on the freeway, new strip mall with new retailers..."
Where does one begin to speak to developers that she might be able to influence? This won't be easy. Is it even worth my time? They have looked at my projects, my portfolio, they don't know what to say. They have no idea what role architects play in the projects and aren't interested. They don't know that we understand the human body, perception, light, volume, line, texture, color etc. They said, "Hey! so you know CAD, maybe we can have you work on our stuff if we get overloaded. We'll tell you exactly what to do..." Something about the architecture community is not expressing itself to these important players in this game, it has me let down. How can people so closely involved with architecture as to pay to have it built, have the most childish definition of it?
the developers i've known have a pretty high tolerance for risk. they also have pretty strong safety nets under those tightropes.
i have to say, i feel pretty strongly against the insinuations that architects who shy away from risks such as development and/or working for same are lawyeristic wusses. i just passed up two projects that would mean the start of my own firm because of insurance and liability issues. when an architect can get sued for a worker falling off a ladder...why bother? 95% of the country would think it would be ugly anyway, and it's probably going to get torn down in 20 years.
sometimes i wonder why i tend to vote republican...but after the week i had, now i know. more to the point, sometimes i wonder why i just didn't move abroad when i had less to lose.
oh ... and one more point ... when I made my living as a developer, I had infinitely more control over the architecture than I ever have as a practitioner.
I'd say don't necessarily join them but try to learn from them as much as possible. A friend from college started his own development/architecture firm in new york and is doing very well. if you have the money to become a developer, I cannot see a reason not to. You would have total control. The problem is the money. My friend's family has it. Not everyone does. But if you can learn from them the tricks - not the corner cutting ones - but the ones about acquiring land, finding cheap ass buildings to renovate, finding investors, etc. I think you and your husband could benefit.
I saw Greg Pasquerelli of SHoP lecture a couple of months ago and he was a big fan of the architect doubling as developer concept. His firm had just started doing that sort of thing (within the last few years) and would really like to continue doing it. Think you can design a building AND make money - a foreign concept to the average architect. SHoP was their own developer (with investors) for The Porter House, one of their most famous buildings.
Actually, it is my firm's goal to be developer/architect/general contractor, a full service one stop shop for all your building project needs. There is a plan set forth already. I am excited.
Some points [from one who works with a developer]:
* Most developers I know started out renovating houses and slowly over time got bigger and bigger projects.
* Some have little tertiary education, but make it up with cunning and gall.
* I dont know any full-time developers that have 'learnt' what they do in academia.
* Most developers are in it to make money. Making money is proportional to the amount of risk taken. Lack of design is risk minimisation - therefore, frustration will always be experienced by architects interested in design.
* Most developers treat the architecture trade as equivalent with all other building trades. We/You are no more important than a plumber for example. Sometimes we are slightly more important. Everyone is judged by their effectiveness.
* Most developers provide a 'product' to a level that they think the public wants, but rarely have they asked. Therefore, they will always stick to the average in all aspects.
* Most developers are concerned with the appearance of quality rather than the authentic item.
* Most developers are not smarter than you. What they do have is the cunning and gall to make things happen. Never assume that a developer is rolling in cash and that having money solves all problems. Most started with nothing, or hardly something, and worked at it to get where they wanted to get to.
* Some developers are wannabe architects, but they dont really get what we do.
* All professions have their language. You have to learn the language to understand and to be understood.
* Architects have a huge opportunity to make things happen. there are a number of things we can do to move into development and contrast with what usually goes on with most developments.
* Solving the developer responsibility problem: outside each of their developments, place a plaque with their personal name on it. As we all know, most development finances take place within one off companies.
* Architects need to get over the fear of money, risk and control
strawbeary, wasn't implying you were generalizing. thought comments about your friends was excellent for bringing updiscussion. was going off my own observations.
aside from going the architect/developer route. what can be done within our own profession to empower the designer?
follow ups:
1. how does it reflect on future generations to work so hard for so little money? even to go so far as having the intern pay to work somewhere (e.g. renzo piano). * personal note: star architect system should be scrutinized.
2. what is the AIA doing?
3. why have we strayed so far from being the comprehensive "master builder"?
note: question 1 does not suggest working less. architecture is and should be an obsession. why are we not getting paid for it?
off the subject: why are we suing the hell out of each other in this country? law school enrollement is through the roof!
In a former life, I worked for a firm that played a developer-like role for institutional clients - generating feasibility studies, financial models, pro formas, etc. While I ultimately decided to return to architecture, I learned a few very valuable lessons. These are things that every architect should learn about and be exposed to; working for a developer for a brief period isn't such a bad idea.
- Development budgets: No architect should begin work for a client before knowing exactly what the construction budget (hard cost) is. (It's a simple rule, but it is not always followed.) Value engineering causes a lot of heartburn, and much of it can be avoided if the architect knows the budget AND the value of what he/she is designing.
Knowledge of development budgets is also helpful when determining your fee for architectural services. A good development budget will also hold a percentage of the base budget for additional services. You'll throw everything out of whack if you ask for more than the budget.
Most developers won't share a detailed budget for the soft costs, but it's good to know the standard percentages for things like owner-held contingency (different from the design contingency normally carried in cost-estimates), FF&E budget, land acquisition costs, and other owner-held contracts.
- Schedule: Especially when working on multiple-phase projects when buildings are being demolished or renovated, it is critical to know how revenue generation of operational/non-operational buildings will affect the bottom line.
- Benchmarking: Keeping up with the Joneses. Every architect should know about comparable projects done by other architects in the region - from materials to program to cost/sf. Strawbeary - you are fortunate to have a lot of developer-friends; listen carefully to what they say, and memorize their statistics - it will help you to become more knowledgeable about project feasibility.
P.S. I'm also intrigued by the concept of architect-as-developer because it seems so glamourous. Thanks to those who posted names/links to firms.
I am, in particular, interested in the work of Jonathan Segal et al...
...I hope to do something along those lines in the future...
quizzical,
in my experience, the most meaningful ways to restrain the unscrupulous [development] are:
a-f...
as architects we can influence all of these, if we take the time to get involved in our communities ...
I agree exactly with this sentiment. As an example for this strand of the thread, I offer the city of Jacksonville, FL (my current place of residence):
There is:
- a Downtown Masterplan,
- a Zoning Overlay that codifies the plan (makes it enforcable),
- a Design Review Committee that must approve all projects within the Master Plan Area,
- a number of citizen interest groups and community councils (some of which take a calculated approach to studying issues at hand, arriving at a plan of action etc.), and
- a number of design professionals engaging the discussion (through the community interest groups, involvement with local gov't / public projects and private sector developments)...
...It's working, slowly but surely...
Just this evening, the local AIA had the mayor of Jacksonville as the lecturer for the monthly meeting. The dialogue exists. Everyone is involved. The various forces (commercial interest, gov't, the people) are interacting...
I dont' think there is anythign wrong with architecture being thought of as a product. Whether it's one-offs or repetitive (like multi family), it's a something someone wants and pays more for something better.
I also think there are developers out there that appreciate good design and think that it is a 'product' that will sell better. I am working with two developers that have proven this to be the case (although I work with a ton more that don't care, or don't know better). Not only do they have award-potential quality designs, they have sold them quickly because of the design.
Generally speaking, there are bad developers and bad architects, just as any profession. Obviously, this is the majority (again, in any profession - still boggles my mind how many hi buck bad restaurants there are in business!) across the board.
iPods sell because they are a good design, etc., etc., etc. Good architecture will sell, too, but again, it is not the norm (developer involved or not). Like all things 'good', it requires talent, luck, vision, and the stars coming into alignment.
great discussion - and an impt one. every one of us at some point or another will have to figure out how we feel about developers, how we will work with them, and whether we will become developers on our own (whether it's for money or greater leverage in the design process).
over the years i've entertained fantasies of purchasing, developing, being my own client, etc. but as soon as the creative financing and tax-reduction schemes started to take over conversations i noted that my eyes would glaze over and i would check out. > wasn't for me. an impt thing to learn.
I heard of an architect looking for empty lots and then approaching developers with a project. Has anyone ever tried it?
Sounds like an interesting idea, architects are usually the ones to be hired by a client/developer but wouldn't you have more leverage if you approached the client yourself?
Over here in London I guess its much the same thing although their are a few architect/developers and the other ' enlightened' developers who appreciate that good design/architecture can actually improve their profits.
One of the points alluded to is that developers are selling a product. It is not necessarily the developer who needs educating but the consumer. developers want to produce something that is easy to sell quickly which means it needs to appeal to the widest range of people. An unsold property is every developers worst nightmare.
Make the consumer more demanding and the developer would have to respond. Thats not to say that the developer doesn't have a role in the process - just look at how apple brought good design to everyone.......
Interesting how neither of those firms mention anything about developing. Are you sure they are developers? I couldn't find anything that talked about anything beyond architecture, and a sentence or two abour reuniting the building industry (or something like that).
Yes they are developers on whatever scale. If I remember correctly, Skylab bought the land for the 1680 house which was an "unbuildable" lot, designed and built the houe, then sold it, and it all started from there.
Onion flats completed the Rag Flats project last year, which I believe they acted as developers on, maybe just design build, I may be wrong.
Nice thread going here- a lot of knowledge being kicked about.
In reference to architect/developers- Smith and Others in San Diego are interesting. I have seen Ted Smith lecture- If you get a chance to see him speak and you are interested in this subject- I highly recommend it. He went from developing co-housing with his friends to live in- a $10,000 investment, to changing zoning rules in downtown San Diego all in the course of about 10 years. Not radical design- but tasteful modernism that is urbanistically responsible and perhaps even neighborhood generating. The keys that I learned from going to his lecture: 1. look at how bankers see the world; 2. look for areas of town that undeveloped in terms of the allowable FAR, or have flexible zoning. Unfortunately, and curiously, they don’t have a website, this is what I was able to find on line: link (I saw this lecture).
Shop is a great model, but I wonder how many projects they are currently doing where they are developing it themselves?
A question I have: any suggestions on good course to take for a young architect that wants to learn about banking and real estate law? I am in a post-pro degree program (M-Arch II), at the moment they don’t really offer a course for architects wanting to get into small developments. Not that I would want to spend 2 years with this, but a 6-8 week course would be helpful, to learn about financing small projects and real estate law. The real estate class given here is geared towards large scale developments…
I think Johnathan Segal was previously mentioned, also in San Diego. I've been following his work the last few years, he seems to have very successful buisness model put together, along with some nice design work.
One part of this discussion that hasn't yet come up is pre-fab housing. It has been brought to the forefront of architectural discussion by Dwell mag and so much propoganda seems to suggest modern pre-fab units will soon take over the world... So, theoretically you could buy a plot of land and a 100 pre-fab Dwell house units in 4-5 different configurations and put them in some nice arrangement that supports cyclists and pedestrians and leaves some open space for parks... and it would sell out in pre-construction and you'd make a mint... and on top of that you'd be celebrated as being a modernist developer who didn't do terrible/typical McMansions... and Dwell would feature you in a cover story... and life would be grand... right?
Why isn't it that easy? Is the only thing missing from the equation the deep pockets to personally guarantee the loans?
That doesn't seem like a good enough explanation...
It's not that easy because it's something different. Different equals risk. Developers like to minimize risk (as any investor does), therefore radical ventures like that won't fly. They simply are not proven.
For loft design, modern arch has proven to help sell it. But lofts are selling to late 20s-early 40s or so, so it's a different market than a 100 single family residences that would cost $500k or more.
But dont' think that there are not things happeing out there, they are, just not on that scale (or not that I know of).
Also, keep in mind, that developers are doing things like this with prefab, and have been, they just don't tell anyone it's prefab because outside of Dwell, that's a bad word.
There are several flaws with the Prefab modern home development idea. First of all, there are still land costs involved and bringing utilities to the site(s), and foundations are required. Also, while most of the prefab modern homes are smart, tight, efficient, and well designed, they roughly cost the same as their McMansion counterparts and are a fraction of the square footage when completed.
I've had several discussions with many close non-architect friends in the business world regarding the appeal of McMansions to the general public. It boils down to this - size matters more than design. While John Q. Public thinks the design of a small, modern prefab house is cool, he's not going to plop down half a million for one when he can get a McMansion that's twice the size for the same price.
At a couple spots in thread the "architect as client" idea came up. I've been intrigued for some time with the idea of being my own client, and with ways that this idea can actually happen. I mean, who do I like more than me?
As an offshoot to question in the "Importance of Architecture" thread, which was: "how does one convince clients of the value of architecture?" -- in this hypothetical case the answer would be: "You don't have to". The decision-making client -- you -- already loves architecture.
However, the ideas thrown out thus far seem grand -- 100 res units here ...a purchase of acres and acres of land there....let's also be the GC.....I'll need two million bucks and a Beemer....etc.
On the contrary, as Diabase said, most successful developers started small -- rehabbing houses. Shouldn't our involvement naturally start thusly, as opposed to this all-or-nothing, book-the-next-flight abroad mentality?
As a side pursuit, I'm currently rehabbing houses -- well, one house and a duplex so far -- all on my own. I'm the owner, client, architect, and GC. All thing considered, this mini-scale developer mode is highly satisfying, and a HUGE learning experience. It's interesting to note how many people LOVE your ideas when they are built and finished and they can walk up and look at them, where the exact same people could NEVER be convinced of the same design up front on paper.
I think the biggest misnomer is that you need money to be a successful developer. I would imagine if you talk to a lot of developers they are cash poor like the rest of us. however they are not risk adverse. if anyone is serious about development you have to read books like nothing down (robert allen) and rich dad poor dad. it is more about thinking creatively, money not space.
I am in the process setting up my first development project over the next year to two. I have been investing in rental property over the past couple years, and as soon as the right opportunity comes along I will levrage the equity in existing real estate (paper money).
also do a lot of research on your market, get to know good realtors, builders, city officials, appraisers, potential investors, just about everyone you can think of.
on another note, at least in my city, a lot of developments get city subsidies, research funding sources for affordable housing, sustainable building . . .
lastly find ways to hedge risk, do not purchase land, option land, get partners, find grant money . . .
My question about the pre-fab housing generated just the answers I thought - which proved a point: Architects can't design pre-fab houses that make any sense! What's the point of making a pre-fab house if it costs $250sf? If you can build a McMansion for $60sf, why pre-fab?
When all of this pre-fab stuff started popping up, I was really excited, because I thought people were going to be selling really cool modern (albeit small) houses for less than a hundred grand. But all the ones that have come out end up costing like $250k minimum - just as much as regular construction (if not more).
Am I missing something here? What's the point?
I find that just like in normal life, some architects are good at managing money and others are not. One guy can get the same house built for $150k that another guy could get built for $300k. It totally depends on the willingness of the architect to be creative and how willing s/he is to work hard for inexpensive solutions.
The reason development is interesting to me is that the same thing goes for contractors. You can bid a job to 5 contractors and get a range in cost of 50%. That's crazy. There's obviously a lot of people out there getting taken by over priced contractors because those guys who charge 50% more are doing business...
So - if you're an architect who knows how to design something that can be built inexpensively, functions well and looks good, and you you're a contractor who knows how to build well at a low cost, then you should be able to be a developer who builds great buildings and also makes a huge profit...
developer culture
Ok, somehow among my group of friends, there are several developers, investors, mortgage brokers, realtors, etc. How did that happen? Well I am related to one of them and they are his friends and we all hang out together.
Anyways, conversation has stayed away from work topics until just recently. Now we talk about our respective roles in the biz and what we get out of it quite often. The developers talk about doing "design". What they mean is deciding if Unit A has 2 or 1 1/2 baths, and how much s.f. per unit. They had an in-house designer for awhile but they fired him because he asked too many questions. The talk is entriely filled with number of units, square footages, cost of land per acre, what builders are the cheapest, and how much money they are banking on each project. It is quite enlightening in a way.
Meanwhile, I can't hardly get a word in edgewise, and they wouldn't understand even if I did. When I do talk about my projects, I use my terms, and get interrupted with stuff like, "So YOU did the design? Why didn't the developer just design it himself (and you be his drafting/stamping service)?" "How much will that cost? We just found a builder who will build 25% less than our builder, and we'll be raking in the dough." "We are going to buy 800 units that size tomorrow." They talk about how they take naps at work, go out for fancy ass lunches all the time, play poker at work, work half days regularly, etc.
I hate developer mentality even more than ever lately. (Except that they buy me the most expensive drinks and don't even batt an eye.) One is my age and claims to make 1/4 million dollars a year, and is on his 2nd Mercedes (paid for by the company). These guys are thrilled about their careers and think they are SO fricking smart.
Perspective changes everything. If I didn't know any better, I would think they were smart too, I guess.
find a nice condo project of theirs and get some hungry construction-defect litigators... they can ALWAYS find something wrong w/ the building. see how smart those "designers" are when tenants are suing them cause it takes 30 seconds for the hot water to turn on or cause they can hear their neighbor's headboards banging away at 3am.
I hear ya Strawbeary! It's a different world out there. It's insane to hear what kind of margins developers are making on their projects. McMansions cost about $45-$60/sq.ft. to build, but are sold in the neighborhood of $300/sq.ft.
For all those garbage EIFS condos you see going up everywhere, they are so overpriced that the bank loans are paid off immediately after occupancy and there's plenty of money left over to cover the construction defect repair/litigation (usually <2years after occupancy) and new Benz's, BMWs, and Rolex's for everyone involved!
Product of a society based on consumption and the love of money.
viva la revolution!
The kicker is that they have suggested me and my husband join them. And I say, "Well, no, I really..." (get's cut off).
Opportunity is knocking. Maybe I SHOULD. I'd get my arch license, quit working for the man, switch to real estate development and mortgage closings, have martini lunches M-F, make a few million, retire at 36 and do architecture as a hobby.
dml-
i think in california the statue of limitations is 4 year for patent and 10 years for latent defects... you gotta wait until the champagne has lost it's fizz and then get 'em!!
It worth a shot...whats the worst that could happen? you make a couple million, then decide you don't like it. If you decide to pass on the offer...send the info my way....
interesting topic. i think it is easy to stereotype the developer, as our office receptionist likes to say, as "the guy driving the bmw, talking on his cell phone, and cutting you off in traffic." however, i think to generalize developers this way is perpetuate the often antagonistic relationship between designers and developers. my friend says this world would be better if you just let designers do their job. to me it's not about being "allowed" to design, it's about TAKING something back.
reminds me of a meeting between a city planner, a developer team, my boss the architect, and I. became a heated debate about whether or not to add retail on corner x,y,z. planner wanted it. developer didn't. planner wanted to "activate pedestrian corridor". nevermind there were nothing but parking garages for 8 blocks. not this developer's fault planning department allowed previous condo developers to pillage the area and put podium garages everywhere. total lack of context. why should this developer be tied to building unleasable retail space. what authority does the planner have? she was not elected. it wasn't her money on the line. was it the extra class she took at harvard?
i doodled a sketch of a new scheme as they debated (total metaphor for the role of the architect in the scheme of things).
i guess the point is that developers are not the enemy. it is us, our own apapthy, our ivory tower mentality, our ivy league degrees (and the debt that goes along with it). we have the vision, just don't have the hustle to fullfill it.
something is missing from this profession and i want to take it back....if only i knew what it was that's missing. maybe developers are smarter, and we just don't want to admit it.
the developer on one of our projects flew to europe on his private jet, decided it was too slow and took the concorde back. (this was before it got grounded).
developers aren't necessarily smarter ... but they do control huge parts of the process ... and, at the end of the day, they are the one's taking the bulk of the risk ... we think we have a lot of E&O exposure ... but, if you ever go into development, you'll find that you go to a bank for some money to do a project and they want you to put up everything you own and also personnally guarantee the millions that you want to borrow. those are very sobering conversations.
right now, it doesn't seem like developers are taking much risk to pocket all that loot ... but, wait until the market turns.
i know a couple of retail developers who had a project go south on them ... the project was foreclosed and each of the partners in the deal wrote personal checks of $2,000,000 just to make the bank go away and stop hounding them. of course, they were fortunate to have $2,000,000 -- but, any way you look at it, that's some serious money leaving the house.
Developing is gambling, more or less. No risk, no reward, but the risk is in proportion to the reward, so while you can get rich quickly, you can lose it all in the blink of an eye.
I know of more than one developer that went from having tens of millions to living in an apartment almost overnight.
well i work for an architect who is also a developer. we do bring "real" design to our projects, but honestly i do think architects could develop the ability to think more like businessmen and still bring what they know to the table.
ACHF, why are you getting the legal and suing rhetoric in here? maybe thats why architects dont make friends with the developers and cry about being poor.
I met my first developer in the wild this weekend. A guy my age, actually. Upon learning that I was an architect, he launched into an energetic sales pitch about his company vision and process. He was noting that their residential developments REQUIRED "architectural" elements like cast stone window surrounds, wood clad windows, rounded rain gutters, and about a dozen other faux-tastic things. They gave their homes an "old world Europe" styling, right? They also had 4" caliper trees, that - get this - would grow to be larger trees in a decade...
Even the most delicious Koolhaas kool-aid couldn't achieve the potency of bonkers that this guy had ingested. And once he stopped talking, he would repeat my own comments back - worded differently - in the most condescending way I've ever encountered, as if everything I said needed some sort of clarification. He didn't agree that "old world Europe" developments were an abomination in North Texas, so what more needed to be said?
I'm not convinced that this guy does any actual work.
Nice comment, dot. And good conversation everyone.
I'll just add that in my limited experience with developers, they describe buildings as "products". I describe buildings as "projects": implying a loving approach, an ongoing relationship, a commitment to quality, a concern with future implication of decisions made, etc. But I think it would behoove (is that right?) architects to learn more about the idea of a building as a product without entirely letting go of the project aspect either.
Strawbeary, as freeborn said, you could always try it then leave. You could learn enough in the strictly-business-end developer world to later leave and start a modified architect-developer version, funded by your developer income, that feeds your soul.
Liberty struck the nail on the head that developers think of building's as products. It goes even further than that though; the thing you have to accept on the developer side is that a building is simply a vehicle to generate cash flow. The value of this building is only the present value of it's future cash flow. If building "A" can only generate so much cash flow then the only way to maximize profit is by minimizing first cost and design and construction are the easiest targets.
I'm not an architect but a work for a large general contractor. I spent time working for a very active developer in LA and was in general turned off by the experience. I'm okay with not driving a beamer and know that I'll have greater satisfaction one day in driving my kids by a magnificent building and saying "I built that." I get a kick out of knowing the intimate details of these buildings; what isn't built to plan and why, what terrible stress we had with something seemingly so simple. I love building too much to let it boil down to dollars and that's why I stepped away from the money, the easy hours and the fancy business card.
for the litigation side of things. we just had a "managing risk" seminar at our firm not too long ago which basically extolled all the reasons we should not get involved with such condominium projects. it basically leaves the architect wide open for lawsuits.
but to get back to the discussion (which is one of the better ones on archinect these past few days/weeks) architect as developer has it's own set of limitations as well. since you ARE taking the inherent monetary risk you have to be sure to deliver a product that is in the black. on the other hand you want to execute a project that meets your design goals. i think it's a very difficult position that you put yourself in when you have to balance the two. not saying it's a bad thing. but something that's even more difficult to do than just design. you have to be the one that determines your compromises. you don't get to have someone tell you "no, we can't do that, it's too expensive". you end up having to set your own limits; which can be quite difficult. not saying it's impossible.
i remember reading about a guy in san diego a while ago that was taking lots of urban infill sites and doing the whole architect/developer thing.
i spent about 10-years of my career on the developer side of the table ... like every other field of endeavor, there are good developers and there are bad developers ... it is unfair to paint all developers with sweeping generalizations
there are those developers who understand the value of good design / there are those who don't ... there are those developers driven totally by the immediate bottom line / there are those who take a longer term "investment" view ... there are those developers who become good stewards of the land / there are those who don't
to some, any developer is "Satan Incarnate" ... some deserve that description, but I know quite a few who do not ...
what's really important is that these people are not going away ... they will continue to operate because there is a need for what developers can do ... in some context, developers add value and they are paid well for that value ... our challenge is to learn to work more effectively with the development community ... we have to make a better business case for those aspects of design that we care about ... we have to speak more persuasively about the value that we can add ... otherwise, we will continue to be ignored and marginalized by the development community.
A Center for Ants,
The guy in San Diego you are thinking of is Ted Smith of the firm Smith and Others.
Smith gave a rather inspiring lecture (entitled "Architectural Empowerment") at Georgia Tech last week where he outlined his approach to getting his projects funded and approved by code officials. He also mentioned that he runs an "MArch RED" program at Woodbury University in San Diego where they teach development to architects. I believe that another SD architect/developer, Jonathan Segal, is involved with the Woodbury program.
Judging from the work he showed at the lecture, it seems like Smith has developed some viable strategies for designing and building your own stuff, without interference from traditional clients or developers. Sounds like an architect's dream come true......
on the other side of things, how do we address the unscrupulous developers that just want the biggest profit margin possible? and what of the architects that pump out the tract homes and condos for these types?
karl- thanks for the names. you are correct.
An excellent discussion. And I'm glad to see some nuance in discussing developers--the source of funding for much of our work. Babs and Trace have it right: for every developer out there throwing money around, there are others who have lost money, big-time. It does seem that profit margins are out-of-whack for the successful ones, but not all succeed. (They're like actors, in a way. For every Jim Carrey making $20 million per, there's ten thousand or more shlubs showing up at casting calls between table-waiting shifts.)
It's never good to stereotype. Architects get stereotyped all the time, and just as unfairly.
... i assume the issue here mostly is about "unscrupulous" and not necessarily the "biggest profit margin possible" ... the two can be mutully exclusive
in my experience, the most meaningful ways to restrain the unscrupulous developer are:
a) good zoning laws
b) good development controls
c) good building codes
d) competent, honest building officials
e) an activist citizenry that cares about liveable communities
f) a design community that's willing to exert leadership
as architects we can influence all of these, if we take the time to get involved in our communities
I didn't intend to stereotype or paint all developers with generalizations. I am working with a great developer as we speak.
I was very specific about who I was describing above - my friends of course! And those were real experiences, not made up.
"we have to make a better business case for those aspects of design that we care about ... we have to speak more persuasively about the value that we can add ... otherwise, we will continue to be ignored and marginalized by the development community." - this is what I hope to do. But as mentioned above, it is easier said than done. I get steam rolled with "lots of square footage, hunderds of units, undeveloped land on the freeway, new strip mall with new retailers..."
Where does one begin to speak to developers that she might be able to influence? This won't be easy. Is it even worth my time? They have looked at my projects, my portfolio, they don't know what to say. They have no idea what role architects play in the projects and aren't interested. They don't know that we understand the human body, perception, light, volume, line, texture, color etc. They said, "Hey! so you know CAD, maybe we can have you work on our stuff if we get overloaded. We'll tell you exactly what to do..." Something about the architecture community is not expressing itself to these important players in this game, it has me let down. How can people so closely involved with architecture as to pay to have it built, have the most childish definition of it?
the developers i've known have a pretty high tolerance for risk. they also have pretty strong safety nets under those tightropes.
i have to say, i feel pretty strongly against the insinuations that architects who shy away from risks such as development and/or working for same are lawyeristic wusses. i just passed up two projects that would mean the start of my own firm because of insurance and liability issues. when an architect can get sued for a worker falling off a ladder...why bother? 95% of the country would think it would be ugly anyway, and it's probably going to get torn down in 20 years.
sometimes i wonder why i tend to vote republican...but after the week i had, now i know. more to the point, sometimes i wonder why i just didn't move abroad when i had less to lose.
... here's a couple of pretty good places to start: ULI Real Estate School and GSD Executive Education
if you speak their language and understand their concepts, you have a fighting chance
oh ... and one more point ... when I made my living as a developer, I had infinitely more control over the architecture than I ever have as a practitioner.
Once a developer told me he'd make a good architect because he can fanagle any plan to get the plumbing back to back...
So do we sound that stupid to developers when we try to define what they do? I suppose.
I'd say don't necessarily join them but try to learn from them as much as possible. A friend from college started his own development/architecture firm in new york and is doing very well. if you have the money to become a developer, I cannot see a reason not to. You would have total control. The problem is the money. My friend's family has it. Not everyone does. But if you can learn from them the tricks - not the corner cutting ones - but the ones about acquiring land, finding cheap ass buildings to renovate, finding investors, etc. I think you and your husband could benefit.
I saw Greg Pasquerelli of SHoP lecture a couple of months ago and he was a big fan of the architect doubling as developer concept. His firm had just started doing that sort of thing (within the last few years) and would really like to continue doing it. Think you can design a building AND make money - a foreign concept to the average architect. SHoP was their own developer (with investors) for The Porter House, one of their most famous buildings.
Actually, it is my firm's goal to be developer/architect/general contractor, a full service one stop shop for all your building project needs. There is a plan set forth already. I am excited.
"If you have the money to become a developer, I cannot see a reason not to."
Precisement.
strawbeary if u wanna get them real excited talk about boma square footage calculations...they'll be wet!!!
Some points [from one who works with a developer]:
* Most developers I know started out renovating houses and slowly over time got bigger and bigger projects.
* Some have little tertiary education, but make it up with cunning and gall.
* I dont know any full-time developers that have 'learnt' what they do in academia.
* Most developers are in it to make money. Making money is proportional to the amount of risk taken. Lack of design is risk minimisation - therefore, frustration will always be experienced by architects interested in design.
* Most developers treat the architecture trade as equivalent with all other building trades. We/You are no more important than a plumber for example. Sometimes we are slightly more important. Everyone is judged by their effectiveness.
* Most developers provide a 'product' to a level that they think the public wants, but rarely have they asked. Therefore, they will always stick to the average in all aspects.
* Most developers are concerned with the appearance of quality rather than the authentic item.
* Most developers are not smarter than you. What they do have is the cunning and gall to make things happen. Never assume that a developer is rolling in cash and that having money solves all problems. Most started with nothing, or hardly something, and worked at it to get where they wanted to get to.
* Some developers are wannabe architects, but they dont really get what we do.
* All professions have their language. You have to learn the language to understand and to be understood.
* Architects have a huge opportunity to make things happen. there are a number of things we can do to move into development and contrast with what usually goes on with most developments.
* Solving the developer responsibility problem: outside each of their developments, place a plaque with their personal name on it. As we all know, most development finances take place within one off companies.
* Architects need to get over the fear of money, risk and control
strawbeary, wasn't implying you were generalizing. thought comments about your friends was excellent for bringing updiscussion. was going off my own observations.
aside from going the architect/developer route. what can be done within our own profession to empower the designer?
follow ups:
1. how does it reflect on future generations to work so hard for so little money? even to go so far as having the intern pay to work somewhere (e.g. renzo piano). * personal note: star architect system should be scrutinized.
2. what is the AIA doing?
3. why have we strayed so far from being the comprehensive "master builder"?
note: question 1 does not suggest working less. architecture is and should be an obsession. why are we not getting paid for it?
off the subject: why are we suing the hell out of each other in this country? law school enrollement is through the roof!
In a former life, I worked for a firm that played a developer-like role for institutional clients - generating feasibility studies, financial models, pro formas, etc. While I ultimately decided to return to architecture, I learned a few very valuable lessons. These are things that every architect should learn about and be exposed to; working for a developer for a brief period isn't such a bad idea.
- Development budgets: No architect should begin work for a client before knowing exactly what the construction budget (hard cost) is. (It's a simple rule, but it is not always followed.) Value engineering causes a lot of heartburn, and much of it can be avoided if the architect knows the budget AND the value of what he/she is designing.
Knowledge of development budgets is also helpful when determining your fee for architectural services. A good development budget will also hold a percentage of the base budget for additional services. You'll throw everything out of whack if you ask for more than the budget.
Most developers won't share a detailed budget for the soft costs, but it's good to know the standard percentages for things like owner-held contingency (different from the design contingency normally carried in cost-estimates), FF&E budget, land acquisition costs, and other owner-held contracts.
- Schedule: Especially when working on multiple-phase projects when buildings are being demolished or renovated, it is critical to know how revenue generation of operational/non-operational buildings will affect the bottom line.
- Benchmarking: Keeping up with the Joneses. Every architect should know about comparable projects done by other architects in the region - from materials to program to cost/sf. Strawbeary - you are fortunate to have a lot of developer-friends; listen carefully to what they say, and memorize their statistics - it will help you to become more knowledgeable about project feasibility.
P.S. I'm also intrigued by the concept of architect-as-developer because it seems so glamourous. Thanks to those who posted names/links to firms.
great conversation.
I am, in particular, interested in the work of Jonathan Segal et al...
...I hope to do something along those lines in the future...
quizzical,
in my experience, the most meaningful ways to restrain the unscrupulous [development] are:
a-f...
as architects we can influence all of these, if we take the time to get involved in our communities ...
I agree exactly with this sentiment. As an example for this strand of the thread, I offer the city of Jacksonville, FL (my current place of residence):
There is:
- a Downtown Masterplan,
- a Zoning Overlay that codifies the plan (makes it enforcable),
- a Design Review Committee that must approve all projects within the Master Plan Area,
- a number of citizen interest groups and community councils (some of which take a calculated approach to studying issues at hand, arriving at a plan of action etc.), and
- a number of design professionals engaging the discussion (through the community interest groups, involvement with local gov't / public projects and private sector developments)...
...It's working, slowly but surely...
Just this evening, the local AIA had the mayor of Jacksonville as the lecturer for the monthly meeting. The dialogue exists. Everyone is involved. The various forces (commercial interest, gov't, the people) are interacting...
I dont' think there is anythign wrong with architecture being thought of as a product. Whether it's one-offs or repetitive (like multi family), it's a something someone wants and pays more for something better.
I also think there are developers out there that appreciate good design and think that it is a 'product' that will sell better. I am working with two developers that have proven this to be the case (although I work with a ton more that don't care, or don't know better). Not only do they have award-potential quality designs, they have sold them quickly because of the design.
Generally speaking, there are bad developers and bad architects, just as any profession. Obviously, this is the majority (again, in any profession - still boggles my mind how many hi buck bad restaurants there are in business!) across the board.
iPods sell because they are a good design, etc., etc., etc. Good architecture will sell, too, but again, it is not the norm (developer involved or not). Like all things 'good', it requires talent, luck, vision, and the stars coming into alignment.
great discussion - and an impt one. every one of us at some point or another will have to figure out how we feel about developers, how we will work with them, and whether we will become developers on our own (whether it's for money or greater leverage in the design process).
over the years i've entertained fantasies of purchasing, developing, being my own client, etc. but as soon as the creative financing and tax-reduction schemes started to take over conversations i noted that my eyes would glaze over and i would check out. > wasn't for me. an impt thing to learn.
its all about discounted cash flow baby...
I heard of an architect looking for empty lots and then approaching developers with a project. Has anyone ever tried it?
Sounds like an interesting idea, architects are usually the ones to be hired by a client/developer but wouldn't you have more leverage if you approached the client yourself?
Over here in London I guess its much the same thing although their are a few architect/developers and the other ' enlightened' developers who appreciate that good design/architecture can actually improve their profits.
One of the points alluded to is that developers are selling a product. It is not necessarily the developer who needs educating but the consumer. developers want to produce something that is easy to sell quickly which means it needs to appeal to the widest range of people. An unsold property is every developers worst nightmare.
Make the consumer more demanding and the developer would have to respond. Thats not to say that the developer doesn't have a role in the process - just look at how apple brought good design to everyone.......
some architect developer links:
Skylab Design out of Portland, headed by Jeff Kovel.
Onion Flats
out of Philadelphia.
Any other links anyone?
great thread.
Interesting how neither of those firms mention anything about developing. Are you sure they are developers? I couldn't find anything that talked about anything beyond architecture, and a sentence or two abour reuniting the building industry (or something like that).
Yes they are developers on whatever scale. If I remember correctly, Skylab bought the land for the 1680 house which was an "unbuildable" lot, designed and built the houe, then sold it, and it all started from there.
Onion flats completed the Rag Flats project last year, which I believe they acted as developers on, maybe just design build, I may be wrong.
Nice thread going here- a lot of knowledge being kicked about.
In reference to architect/developers- Smith and Others in San Diego are interesting. I have seen Ted Smith lecture- If you get a chance to see him speak and you are interested in this subject- I highly recommend it. He went from developing co-housing with his friends to live in- a $10,000 investment, to changing zoning rules in downtown San Diego all in the course of about 10 years. Not radical design- but tasteful modernism that is urbanistically responsible and perhaps even neighborhood generating. The keys that I learned from going to his lecture: 1. look at how bankers see the world; 2. look for areas of town that undeveloped in terms of the allowable FAR, or have flexible zoning. Unfortunately, and curiously, they don’t have a website, this is what I was able to find on line: link (I saw this lecture).
Shop is a great model, but I wonder how many projects they are currently doing where they are developing it themselves?
A question I have: any suggestions on good course to take for a young architect that wants to learn about banking and real estate law? I am in a post-pro degree program (M-Arch II), at the moment they don’t really offer a course for architects wanting to get into small developments. Not that I would want to spend 2 years with this, but a 6-8 week course would be helpful, to learn about financing small projects and real estate law. The real estate class given here is geared towards large scale developments…
I think Johnathan Segal was previously mentioned, also in San Diego. I've been following his work the last few years, he seems to have very successful buisness model put together, along with some nice design work.
www.jonathansegalarchitect.com
One part of this discussion that hasn't yet come up is pre-fab housing. It has been brought to the forefront of architectural discussion by Dwell mag and so much propoganda seems to suggest modern pre-fab units will soon take over the world... So, theoretically you could buy a plot of land and a 100 pre-fab Dwell house units in 4-5 different configurations and put them in some nice arrangement that supports cyclists and pedestrians and leaves some open space for parks... and it would sell out in pre-construction and you'd make a mint... and on top of that you'd be celebrated as being a modernist developer who didn't do terrible/typical McMansions... and Dwell would feature you in a cover story... and life would be grand... right?
Why isn't it that easy? Is the only thing missing from the equation the deep pockets to personally guarantee the loans?
That doesn't seem like a good enough explanation...
It's not that easy because it's something different. Different equals risk. Developers like to minimize risk (as any investor does), therefore radical ventures like that won't fly. They simply are not proven.
For loft design, modern arch has proven to help sell it. But lofts are selling to late 20s-early 40s or so, so it's a different market than a 100 single family residences that would cost $500k or more.
But dont' think that there are not things happeing out there, they are, just not on that scale (or not that I know of).
Also, keep in mind, that developers are doing things like this with prefab, and have been, they just don't tell anyone it's prefab because outside of Dwell, that's a bad word.
There are several flaws with the Prefab modern home development idea. First of all, there are still land costs involved and bringing utilities to the site(s), and foundations are required. Also, while most of the prefab modern homes are smart, tight, efficient, and well designed, they roughly cost the same as their McMansion counterparts and are a fraction of the square footage when completed.
I've had several discussions with many close non-architect friends in the business world regarding the appeal of McMansions to the general public. It boils down to this - size matters more than design. While John Q. Public thinks the design of a small, modern prefab house is cool, he's not going to plop down half a million for one when he can get a McMansion that's twice the size for the same price.
At a couple spots in thread the "architect as client" idea came up. I've been intrigued for some time with the idea of being my own client, and with ways that this idea can actually happen. I mean, who do I like more than me?
As an offshoot to question in the "Importance of Architecture" thread, which was: "how does one convince clients of the value of architecture?" -- in this hypothetical case the answer would be: "You don't have to". The decision-making client -- you -- already loves architecture.
However, the ideas thrown out thus far seem grand -- 100 res units here ...a purchase of acres and acres of land there....let's also be the GC.....I'll need two million bucks and a Beemer....etc.
On the contrary, as Diabase said, most successful developers started small -- rehabbing houses. Shouldn't our involvement naturally start thusly, as opposed to this all-or-nothing, book-the-next-flight abroad mentality?
As a side pursuit, I'm currently rehabbing houses -- well, one house and a duplex so far -- all on my own. I'm the owner, client, architect, and GC. All thing considered, this mini-scale developer mode is highly satisfying, and a HUGE learning experience. It's interesting to note how many people LOVE your ideas when they are built and finished and they can walk up and look at them, where the exact same people could NEVER be convinced of the same design up front on paper.
Best thing I've ever done.
I think the biggest misnomer is that you need money to be a successful developer. I would imagine if you talk to a lot of developers they are cash poor like the rest of us. however they are not risk adverse. if anyone is serious about development you have to read books like nothing down (robert allen) and rich dad poor dad. it is more about thinking creatively, money not space.
I am in the process setting up my first development project over the next year to two. I have been investing in rental property over the past couple years, and as soon as the right opportunity comes along I will levrage the equity in existing real estate (paper money).
also do a lot of research on your market, get to know good realtors, builders, city officials, appraisers, potential investors, just about everyone you can think of.
on another note, at least in my city, a lot of developments get city subsidies, research funding sources for affordable housing, sustainable building . . .
lastly find ways to hedge risk, do not purchase land, option land, get partners, find grant money . . .
My question about the pre-fab housing generated just the answers I thought - which proved a point: Architects can't design pre-fab houses that make any sense! What's the point of making a pre-fab house if it costs $250sf? If you can build a McMansion for $60sf, why pre-fab?
When all of this pre-fab stuff started popping up, I was really excited, because I thought people were going to be selling really cool modern (albeit small) houses for less than a hundred grand. But all the ones that have come out end up costing like $250k minimum - just as much as regular construction (if not more).
Am I missing something here? What's the point?
I find that just like in normal life, some architects are good at managing money and others are not. One guy can get the same house built for $150k that another guy could get built for $300k. It totally depends on the willingness of the architect to be creative and how willing s/he is to work hard for inexpensive solutions.
The reason development is interesting to me is that the same thing goes for contractors. You can bid a job to 5 contractors and get a range in cost of 50%. That's crazy. There's obviously a lot of people out there getting taken by over priced contractors because those guys who charge 50% more are doing business...
So - if you're an architect who knows how to design something that can be built inexpensively, functions well and looks good, and you you're a contractor who knows how to build well at a low cost, then you should be able to be a developer who builds great buildings and also makes a huge profit...
Right?
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