A basic consideration, always to be kept firmly in mind, is that private housing development for a private market is first, last, and all the time a business operation, conducted for profit, and the merit of decisions is always judged by their effect upon profit. A great many factors affect the final profit from a housing development.
First come the price paid for the land and the cost and availability of credit when needed. Then various skills come into play: skill in minimizing tax liabilities, taking advantage of numerous and often complicated federal programs, and selling the final product. Each of these factors is highly important. A bad decision on any one of them may wholly offset great effectiveness in handling all the others. But it is the interrelationship of these factors which offers the greatest challenge to the managerial skill of the developer. If you are a property developer, always have an experienced Ogden Utah real estate lawyer working for you. In a great many housing developments, the margin between considerable loss and relatively high profits may be rather narrow. A little extra delay in construction or in sales may lead to losses, while better management or more luck which reduces time involved may lead to high profits. A somewhat higher vacancy rate in apartments than anticipated may lead to losses, while just a little higher occupancy rate may lead to fairly high profits. Abrams, in discussing the rebuilding of older parts of cities, cites some dramatic examples of how this works; the same general relationships exist for new housing in suburbs.4 In part, the explanation lies in the heavy use of credit and the low equity capital of many developers.
Early in the process of planning a housing development, every builder must make some kind of an estimate of the demand for housing — in general or nationally, for his city, and for the type he wants to build. This estimate may be highly sophisticated or very simple, even impressionistic. It may be based upon various general factors, such as rate of household formation, the state of the national money market, or other general considerations. Or it may be highly localized and personal — a simple judgment that ten or twenty houses of a certain type and price range can be sold in this location over the next year or so. Since the developer is really concerned with the state of the housing market for his houses when the latter are ready, he must forecast ahead, often by one to two years, when he is considering undertaking development of a specific tract of land. Obviously, additional uncertainties enter when the future rather than the present demand is concerned. In order to carry out a housing development, a developer must first have a tract of land. He may have in mind his ideal tract, ideal as to size, location, physical characteristics, and price; and he may also have in mind the degree of divergence from the ideal which he will accept if he has to. His decision-making unit is the subdivision of a size for his operation, but this may vary considerably in acreage. In any case, the kind of houses, their price, and their market must be related, in his judgment, to the character of the site. It would be wasteful to put low-priced houses on an expensive tract in a high-class neighborhood.
Probably it would be financially disastrous to put expensive house into a lower-middle-class neighborhood. However definitely the developer has an ideal tract in mind, in practice he may very well have to choose from among a very few tracts, none of which conforms to his ideal. The managerial function consists here, as it does so often in every field, in deciding among alternatives, none of which is wholly satisfactory — a selection of the least-worst, or tolerable, as well as of the best. In the case of sites for building, the developer has a further decision to make: how far ahead to plan and to acquire land for planned building, or how much to take advantage of present opportunities to buy available tracts for future use. There are advantages in having land readily available as needed, but there are also costs in holding land.
Once a tract has been acquired, the developer has to make some decisions on street and lot layout. A simple and obvious way is to employ straight streets run on cardinal directions and linked in a grid with similar streets in adjacent areas, and to lay out lots of width and depth suited to the size and cost of the houses contemplated. Many suburbs have been so developed, and there is much to be said in favor of such simple layout, in spite of its lack of variety. The curving street, however, has become the symbol of even the modestly ambitious suburban development. It does provide vistas which are likely to be much more attractive than those available to motorist or pedestrian in the grid layout, and houses may have somewhat different directional orientations. A newer subdivision form, with many advantages, is clustering of houses so as to provide larger open space for general use. If well planned, a clustered development will reduce the land area in streets, perhaps yield a few more buildable lots, and yet produce more usable open space than the typical rectangular subdivision. Topography may well dictate a subdivision plan other than the grid.
The developer constructs a house or apartment — a physical structure — for an expected clientele; but, more importantly, he provides something more nearly approaching a total housing package. People who will buy his houses or rent his apartments are concerned with the nature of the community, with the kind and quality of public facilities of every type, with general location, with transportation to the central city and elsewhere, and with other factors, none of which are under the primary control of the developer. He may choose his site with these factors in mind, but as a general rule he must adapt to them, rather than altering them, although he may be able to influence public action with respect to some of them. Considerations of architectural style, variety, and standardization influence the prospective occupant. He is also interested in the household appliances and conveniences installed in the house.
Lastly, the developer must decide whether to sell or to rent the housing unit he builds. Virtually all suburban construction of single-family homes has been for sale; apartments are usually rented but may be sold under a condominium arrangement. Even when the property is rented to the occupant, the developer may sell it to a person or firm who is more interested in investment and more capable of property management than he is.
An experienced Ogden Utah real estate lawyer can help a property developer in many ways starting from ensuring that the tract of land been acquired can be developed till the developed property being sold by preparing the sale documents.
The cities and the counties have had the greatest impact upon the direction and rate of suburban growth, in ways that have greatly influenced if not determined which specific tracts would be used, for what, and when. When the boundaries of a city are so far-flung that suburban-type development can take place within its legal boundaries, then it is the city which exercises power over residential growth. More commonly, the suburban growth takes place in unincorporated areas outside of any city (in the legal sense), and the legal powers and actions of the county as a unit of government are determinative.
A very large number of local governments exercise various powers with respect to planning, zoning, subdivision regulation, housing codes, and other aspects of urban and suburban development. These functions may be exercised by part-time boards of citizens, often unpaid, as well as by official units of government. Cities and counties have the power to make land use and other plans; develop zoning regulations; promulgate control ordinances over subdivision procedures and methods; develop and enforce building codes; provide a range of public services, which may include water, electricity, and gas, either directly or by power companies under governmental regulations, sewerage, schools, roads and streets, parks, and a host of other services required or desirable for modern urban living.14 These legal powers are exercised with greatly varying diligence and skill, and for different policy ends.
Cities and counties have the power to make land use and other plans; develop zoning regulations; promulgate control ordinances over subdivision procedures and methods; develop and enforce building codes; provide a range of public services, which may include water, electricity, and gas, either directly or by power companies under governmental regulations, sewerage, schools, roads and streets, parks, and a host of other services required or desirable for modern urban living. These legal powers are exercised with greatly varying diligence and skill, and for different policy ends.
Cities and counties exercise their planning, zoning, subdivision, building code, housing code, and similar activities under the broad concept of police power — the power to regulate individual activity in the interest of the safety, health, morals, and general well-being of the whole population. Courts have generally upheld exercise of such powers when the purposes to be served were reasonably clear, the means to the end reasonably defined and relevant, and the procedures in accordance with due process. At the same time, courts have been unwilling to deprive property owners of all rights to use of their land in the name of such general public purposes.
In addition to the police power, local government has several other broad types of legal powers which are or can be used in the suburbanization process. The power of eminent domain enables government to take private property, for a fair compensation, for a public purpose. The definition of a reasonable public purpose has surely broadened over the past several decades — urban renewal and public housing are accepted today, when a generation or more ago they were not — and probably will broaden further in the decades ahead. Government also has the legal power to impose taxes, subject to limitations of fair treatment to all taxpayers, and in some jurisdictions subject to some maximum limit. While taxes as instruments of social policy — i.e., to encourage one kind of land use and to discourage another have generally been illegal, or not upheld by courts, or politically unacceptable, most taxes have some side effects in terms of private actions induced or restrained. Taxes in relation to services rendered, such as sewerage charges to repay costs of new sewer lines, have generally been used and upheld by the courts.
If eminent domain is to be deployed to acquire property, several things need to occur. First, the condemnor is going to have to adopt a resolution that declares a public use and its intent to condemn or take specific properties. At this hearing, several things must occur. First, owners must be given legal notice that their properties are going to be subject to a taking. This is more than perhaps a general notice. Owners must receive specific notice served upon them. At the hearing, the condemnor will state its reasons for the condemnation, gather information that will justify the public use, and perhaps even declare the public use. Members of the public, including the owners, will then be given the opportunity to state their reasons for or against the decision to proceed with the condemnation.
At the conclusion of these hearings, the government must finally declare that a public use exists to take certain properties and it must adopt a resolution, ordinance, or law declaring its use and the intent to take the properties via eminent domain. If this happens, again new efforts will be undertaken to negotiate a sale with the owner, but if unsuccessful, the owners will receive notice that their properties are being condemned and taken by a city or other government. This notice is served personally upon the owners.
If your land or property is affected by zoning or the government is planning to take away your property, consult an experienced Ogden Utah real estate lawyer.
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