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Advocacy Angle: A Political Gain Today; a PR Problem Tomorrow 

By Scott Mooneyham, NCLM Director of Public Affairs

Some years ago, I ran into a friend in a convenience store who, when I said hello, had an interesting reply that I have not forgotten. “Don’t mind me. I’m just a dirty infill developer,” he said. His words had been prompted by a recent newspaper story in which some residents spoke pretty disparagingly of those involved in his chosen profession, that of tearing down old homes and building new ones in established neighborhoods.

In the roughly two-and-half years that I have been with the League, I have thought about his comments on a few occasions as the organization has been at odds with homebuilders over various pieces of proposed legislation. The League has lost plenty of those battles, but during this past legislative session our lobbyists’ efforts were critical in beating back a version of a bill that would have made wide-ranging changes to land-use regulatory statutes.

Among other things, HB 483 Land-Use Regulatory Changes would have undermined infrastructure performance guarantees designed to protect both new property owners and local taxpayers in the event that infrastructure fails and the developer walks away from the project. As the bill wound through the Senate, League staff and members were able to convey to legislators that the concerns about such scenarios are not hypothetical. These infrastructure failures have happened numerous times.

It’s not always the developer’s fault. A sharp dip in the economy, like the one that occurred in 2008, can put developers, with their need for capital, in some tough circumstances. Nonetheless, municipal taxpayers in general or those who buy in new subdivisions should not bear the costs of the business risk. That’s the point of performance guarantees.

The bill, though, didn’t stop there. It would have incentivized land-use litigation in a number of ways, and again, likely at taxpayer expense. Increased litigation and litigation costs would result because the measure would have allowed individuals to skip a Board of Adjustment appeal and take cases directly to Superior Court for a new and full review; protections for neighboring property owners would be weakened by a number of provisions, including by eliminating an existing legal rule that discourages continuing development during an appeal.

Although a version of the bill passed – and that version itself may create some problems for multi-phased developments – the worst parts of the bill were dropped.

Nonetheless, those onerous provisions may show up again in bills filed in 2017.

That possibility brings me back to my long-ago encounter with my friend. Understandably, he didn’t like being characterized the way that those interviewed in the news account portrayed members of his profession. The development community is politically powerful, but like any industry or public interest, it still needs public support.

Even if the bulk of home developers would avoid the worst problems anticipated by the requirements for performance guarantees, it’s worth reminding them that the broader public won’t remember those developers. They will remember the ones who left behind the problems. And a political gain today may turn into a public relations disaster tomorrow.

Convincing homebuilders on their home turf that this risk is real may be the best approach to keeping bad policy ideas like this at bay.