Jan 22 2007 5:20AM | Permalink | Email this | Comments (0) |
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Plans for building moratoriums are back in the news again after a five year absence. This was expected. It happens at the end of every building boom. Consumer groups try to stop building so that their neighborhood stays the way they like it. They claim they will be annoyed by more traffic. Utility and highway officials try to stop building because they are unable to expand infrastructure fast enough. They claim it is the developers fault. Make them stop until we can catch up. Government planners try to stop building so they can reject permit requests on parcels of land where they had penciled in a different use. They claim they need a moratorium to update their master plan. Groups that want a public expenditure that the local budget will not accommodate try to stop building so that developers will buy their goodies for them in exchange for a permit. They call this an impact fee.

The most recent call for a moratorium is in Montgomery County Maryland in the rapid growth northern suburbs of Washington DC. The Washington Post reported on January 17th that county officials are considering halting already approved permits for 5,000 homes and more than two million square feet of commercial projects. All of the usual objections to private development appear to be involved. Projects near Metro (rapid transit) stations would be exempt from the moratorium because these projects were steered to these locations by the planners. Only other peoples’ plans would be interrupted.

Expect to see more calls for moratoriums in metro areas that experienced rapid growth in the last few years. That means the biggest risk is in South Florida, Washington DC, the Rocky Mountains and the Pacific Northwest. Public official elsewhere in the country are still pursuing more development.

Commercial developers and builders have the most risk or rejections and delays due to moratoriums. Public and non-profit projects typically get treated better because public officials and planners see the managers of these projects as “one of us”. The recent plunge in homebuilding in cities is recognized as a blow to the local economy so home builders can expect to be treated better than a developer planning a spec office building on a parcel no utilities or roads in place.