Transcript: The Difference of Increase in Value vs. Buildable Space
Speaker A: You’re listening to environmentally speaking, a weekly podcast diving into legal matters surrounding the environment, public utilities, energy, zoning, and permitting laws in Rhode Island and the surrounding areas, with your host, Marisa Desautel
Clarice: Good morning, everybody, and welcome to this week’s episode of environmentally speaking. I promise I’m back on track, and I am joined with Kerin.
Kerin: Good morning. Hello. Good morning.
Clarice: I don’t know if Marisa told you, but last week we were, both of us came very prepared, well researched, and ready to go on two very different topics.
Kerin: Oh, that sounds like it could be a very good podcast to listen to.
Clarice: So this week we are ready to go. And, I’m sorry I skipped my intro. I’m Clarice, who’s finally read the memo.
Kerin: I love it.
Clarice: And today we’re talking about this kind of feels like the culmination of all the different laws and a good summary of all of the topics we’ve been talking about throughout. God, since January. There’s been a lot of changes.
Kerin: There’s been a lot of changes. And, we’re not going to talk about this part today, but the legislature just passed a whole other set of changes, mostly intended to kind of address some ambiguities and some cleanup in what happened on the big changes the year before. But we can get into that at another point. yeah, to your point. Yeah. The real question here is, okay, we have all of these changes that are intended to have good effects on increasing housing stocks, spurring development, and also increasing property values. And the question becomes, is it going to work? And, ah, no one really knows. But, there’s a lot of discussion out there.
Clarice: Yeah, absolutely. And I think one of the, you know, the first two things that I looked at when I opened up the right notes, still excited about that, was the idea of increase in value versus increase in buildable space. And sometimes those two can be beneficial for each other because the space you’re building on, or can now build on goes up in value when you now have these options. But also as neighborhoods become more dense, that might not affect the value positively.
Kerin: Exactly. That’s exactly right.
Clarice: You’ve got more options, there’s more possibility, but then, you know, it might not work out so much for the neighbor. And it was just, I mean, some of these kinds of review things are so. To me, they were so interesting. They were a good reminder. And the first one was the increased developmental potential, which we were already talking about.
Clarice: There’s now a ton more space that we can use that’s right. Which is positive. Yeah.
Kerin: Even on lots that maybe previously weren’t able to be developed. So that lot that wasn’t able to be developed now can be developed. So it went from a very low property value to a much higher property value just by virtue of the fact that you now might be able to put a house on it.
New laws make it easier to develop lots previously deemed too small for homes
Clarice: And m I’m wondering if you have any thoughts on the idea or if you’ve been thinking about do you think we’re going to be losing a lot of green space or do you think these spaces are majority, already paved, already developed in some way? They might not have a structure, but there is some sort of development happening.
Kerin: It’s a great question. To the extent that you have a greenhouse that’s already designated as green space, usually through some sort of development restriction or it’s been deeded over to the municipality or the state, those properties really won’t be affected. What this aims to do is to take those lots that are previously determined to be too small, to have a house on them. and say people are building smaller houses. You know, that whole idea of those McMansions that were happening in the nineties, people really aren’t doing it anymore. They’re not having as many children, ah, costs to upkeep a home, taxes are all higher. So I think what’s happening here is they’re saying, okay, that lot that was in your neighborhood and was previously too small to build on. Yeah, maybe we don’t want a 3000, 4000 square foot home there, but we were willing to make some changes to the law so that you can put maybe a smaller footprint of a home. and so I think it’s really geared towards residential properties first and then also a real push for adaptive reuse, which is all those, you know, the buildings like the mills, the old mills, we’re in New England got them.
Clarice: Tons of them.
Kerin: Yep. And we have some schools that aren’t being used. so things like that, churches and to take those types of buildings
00:05:00
Kerin: And now, put some life back into them. The new laws make it a little easier for property owners of those types of properties to put something on those lots.
Clarice: And I think the, something that makes me really excited about that is those properties or those lots aren’t looked at as a full teardown anymore. There is some benefit there. It’s not just we need to demolish everything, throw it all out and then bring in new products, that aspect of a recycling of the space. And a lot of those spaces do have a lot of charm. I think they’re really cool looking. You look at the mills, there’s, I’m instantly thinking of there’s an old elementary school on Broadway in Newport that I think is now businesses. There’s a coffee shop. It was just to me, I looked at that and I was like, what a great use. Because what was going to happen with that building otherwise?
Kerin: It’s a big, beautiful building.
Clarice: Yeah. So that’s something I’m really excited to see more of.
Kerin: previously, when you would take a mill, even a small mill, you know, typically in New England, you have the, you think of that giant, massive, long structure of a mill. But sometimes there are other buildings that were used for offices or I, you know, other smaller manufacturing aspects. And even those smaller buildings were difficult to develop. And the reason is, because of the size of them, there’s only so much square footage inside to do something with. and if you have to go through a lengthy, drawn out, development permitting process, it’s expensive, and then you don’t have as much money at the end of the process to then do what you want on the inside of the building so that you can rent it. So by making the process streamlined and making it easier for those types of projects to get back online, with the commercial tax role, you really are opening up some opportunities for some of these buildings. Now. Some of them just can’t be safe. Some of them. Sometimes you have a building, it just, it just can, but to the extent you have big buildings like that, that are structurally sound, beautiful, like the one you’re talking about in Newport. Yeah, I think it’s a great idea because it is expensive. I mean, oftentimes those buildings can be in a historic district. So that means you also have to abide by, you know, the type of window, the type of exterior, the materials and, the style of the exterior has to remain in keeping with the district. That’s another layer of permitting. And it’s also an added cost. You can’t just pick any window that meets the budget. You’ve got to pick one that meets the budget and satisfies your historic district.
Clarice: Yeah, absolutely. I instantly, when we think about historic, I think about downtown Bristol, Rhode island. And, there is a Dunkin donuts that you would not recognize as a Dunkin donuts because it fits in with that space. And they’ve, you know, upped to that historic requirement. and it’s. It’s expensive. Like, you look at that and you’re like, yeah, that must have cost them much more.
Kerin: Yeah. Yeah.
Clarice: Say your regular stucco, purple orange situation.
Kerin: Right. And, you know, good for. Good for Dunkin donuts for stepping up and agreeing to make some additional changes to their usual Dunkin donuts plan to make it different. Right. You remember that one and. Right. You remember it. You drive by and you’re like, that’s a really nice looking dunkin. And maybe you’re more apt to go inside. So there is. There is a benefit to it, but there’s. There’s a cost to it. And a company like Dunkin donuts does have a. Does have a bottom line.
Clarice: Mm
Towns now have the ability to combine zoning and planning into one board
So you also touched on the idea of faster approvals. That was another big change. And that was just to kind of summarize, is the not combination of planning and zoning completely, but in terms of the permitting process, those two do get combined. So you’re going in front of one board versus meeting, with planning or zoning and then waiting a month or two meeting with the other one and. Or having to go back over and over again. So you kind of get to stay in the same arena the whole time.
Kerin: You do. And interesting that you bring up that they’re not combined. So currently, under the. The last. Not this past session, the session before where all the big changes happen, they did create that exact process. And again, the idea is to make it easier and faster and hopefully cheaper for developers to get through the process. They’re not bouncing back and forth. They’re not waiting an extra month while their financing is and their interest rates are changing. Hopefully, that makes it easier. What is really interesting to me is that this last session, and we can talk about this at another time, but the last session, there was language that said that towns now have the ability to combine zoning and planning into one board if they want to.
Clarice: Oh, that’s going to have to be a whole episode all on its own. I could. I just thought of four follow up questions.
Kerin: Right. So,
00:10:00
Kerin: I mean, you know, you’ve got board members on both planning and zoning who have been on these boards sometimes for years. They’re very invested. and you’re gonna have to. If the municipality decides to do this, they’re going to have to make a decision, you know, who. How many boards? There’s rules on this, but who’s gonna fill those seats? and that’s gonna be a. That’s gonna be a policy decision, the town level.
Clarice: Yeah, that’s gonna be an interesting one on what the effects are. But yeah, I think overall there are some. I mean, there are some exciting things, like I’m most excited about them, The, Oh, goodness, say it for me. The underutilized property, the adaptive reuse. There it is. Yeah, I’m most excited about that. I think, you know, being cognizant of the idea that more spaces can be developed has some pros for that particular lot and maybe others, but not for. Might not be for the neighbor. So it’s kind of that balancing of what’s going to happen to value. How does the value change overall for the whole neighborhood?
Kerin: Yeah.
Clarice: And then even talking about. Oh, go for it.
Kerin: No, no, I was just thinking about, you know, what we talked about at the top. Right. So if you’ve got properties that then become more valuable because you can do more with them, ah, you know, and you can do it faster and cheaper in terms of getting through your permitting process and getting building permits. The other idea here is that this legislation is, or, a lot of it is aimed towards increasing the housing stuff. So, you know, anybody who took basic economics understands that you increase the stock of housing and there’s more houses available, the value, the purchase price comes down. So that’s the other thing to consider is that, you know, a lot of speculation is out there right now as to, you know, maybe these properties become more valuable, in the sense that you can do more with them. But as the housing stock increases, the real goal here is to reduce the price of housing and.
Clarice: Yeah, absolutely. I think, you know, speaking as a millennial, and I’ll pause for eye rolls from listeners, but, you know, there’s always that conversation that’s going around of affording a home for a lot of folks just isn’t possible right now.
Kerin: Yeah.
Clarice: So there’s a benefit in that. If you own a home and you’re looking to sell, obviously there’s a drawback to that. But, you know, it’s just, I guess. The pros and cons are going to come down to where you specifically are in that situation.
Kerin: I think you’re absolutely right. And, some of that issue I think, the legislature was trying to address with the adus.
Accessory drilling units could help increase housing value, but it’s speculation
Clarice: Right.
Kerin: The accessory drilling units. And this is the question I get asked the most out in public. You know, you get. Yeah, you get the legal questions where people call you in the office and then you, ah, get your friends and you get the people that you meet at the restaurant, at a bar, they find out what you do. This is the hot question, really?
Clarice: Yeah.
Kerin: Yeah. Can I put an adult on my property? And the idea is, with increasing costs to own a home, finance a home, pay taxes on the home. and you see it with a lot of these short term rentals. That’s a hot topic of people renting out their houses, especially in tourist areas, where people come to visit and they’re trying to offset the costs, right, of keeping their home. They want to stay in their home, they want to keep their home. And if they can offset that with a couple of weeks rental people are trying to do it. And that’s been a struggle. And there’s sometimes some interface between the towns and people doing that. But what’s happening here is that, if you could put a second dwelling on your lot, you then are able to increase the property value because anyone that’s ever going to buy that property is going to say, oh, great, you know, I’ve got not only the house, I’ve also got this other structure. Maybe I have a, ah, family that needs to live there, or maybe I want to rent it out. And the other thing about it is you then get to realize some rental income. So if I were to do that on my property, for example, and we put one on, I would then be able to realize a little bit of extra money.
Clarice: Absolutely.
Kerin: And maybe then I decide not to rent. Not that I don’t do that, but maybe I decide not to rent out my house, for a short term. so that’s the other thing that I’m looking at. We’re looking at Landie’s idea that this will help people get into not necessarily home ownership, but get into their own home, at a cost that does not include, you know, taxes, upkeep, all that stuff. It would just be rent, and that would increase the housing stuff. So it wouldn’t really. Wouldn’t really address home ownership. But I think it would also give a lot of people who maybe want to sell their
00:15:00
Kerin: home, downsize, and aren’t doing that because they can’t afford to go anywhere else, an opportunity to move to a smaller place, in adieu, for example, and then sell their home, that would free up that home for purchase. That’s all. But again, this is all speculation. All the hope, obviously, is to spur the economy, increase the housing stock and reduce the price of housing, but it still remains to be seen.
Clarice: Yeah. And I think you’re bringing up a great point. There are plenty of benefits of an adult versus an apartment. I mean, it’s not for everybody. There might not be the same level of amenities, but in places where, you know, your options are limited, I could understand the aspect of, you know, an Adu. In my mind, you’ve got a better chance of having a yard or an outdoor space or something like that. Not always true, but there are definitely some appealing aspects of it.
Kerin: Yeah. I mean, if you’re especially, you know, you’re a single person with kids and you want to stay in the school district, for example, and you want to be in a neighborhood, but you cannot afford to buy. You know, this sort of setup would be great, and I think it would give a lot of options also to older folks, especially for, you know, families. It used to be that I remember growing up, my, my great grandmother lived in the basement, you know, of my grandparents house, and that was very common family, multi generational living. And I personally like the idea, honestly, of bringing back that multi generational, living. I think it would be good for both the parents and the kids.
Clarice: Yeah.
Kerin Browning: I’m excited about these changes already
Well, I’m excited to hear about what these changes are. I know in the past couple of episodes, we’ve sort of ended it with a. Ah, we’ll have to wait and see. So to see that these changes are coming already, I’m excited to talk about them. Very cool. Well, thank you. If anybody has any questions. Comments? Do you have an Adu and you want us to know about it? you can reach out to us.
Kerin: At, kerin@desautelbrowning.com dot. All right.
Clarice: And you can also find us on Facebook, Instagram. I’m going to forever call it Twitter, Desautel Browning Law. Thanks, everybody.
Speaker A: Thank you for listening to this episode of environmentally speaking. If you’re in need of an environmental attorney, we are here to help. Call us at 401-477-0023 or visit our website at www.desautellaw.com. That’s www.desautellaw.com.
