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Q&A
Kirk Goodrich details the financial and opportunity costs of development delays
0:54:56
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3 min
Commissioner Anthony Richardson asks developer Kirk Goodrich about the tangible costs associated with delays in the land use review process.
Goodrich explains that lengthy processes, like private rezonings, incur significant upfront costs (millions of dollars plus land carrying costs) and represent substantial opportunity costs as resources are tied up.
He argues that while delays harm developers financially, the greater harm is to the people waiting for housing, dismissing concerns over developer profits as illogical when addressing a critical need like the housing crisis.
- Pursuing lengthy entitlements like private rezonings costs millions upfront and ties up resources (opportunity cost).
- Delays significantly increase these costs, especially in high-interest environments.
- Goodrich emphasizes that the human cost for those needing housing outweighs the financial cost to developers.
- He argues against letting concerns about developer profits impede the creation of necessary housing.
Anthony Richardson
0:54:56
Yeah.
0:54:56
I'll be brief.
0:54:57
Thank you both for your testimony.
0:55:00
Councilmember, I'm sorry to hear your story.
0:55:04
I think that's too great of a cost for anyone to bear, and I certainly think it's not acceptable.
0:55:12
So I thank you for your courage.
0:55:14
Leila pointed out something earlier about opportunity cost.
0:55:19
And, Kurt, I think it'd be great maybe in follow-up or something because you are a developer to provide some information on during the the time it takes to move something through, how the the costs can increase because, certainly, in a in a time where there's a limited amount of money, there's another cost there of crowding out other potential fundings that could happen and so forth.
Kirk Goodrich
0:55:48
Yeah.
0:55:48
So your investment of time and money in a private rezoning, for example, means you're not doing something else.
0:56:00
And practically, for us, it needs to be a project of scale to justify the investment of time and resources.
0:56:16
If you have a piece of property that you've bought and are carrying costs for, for example, which is really hard to do in this interest rate environment, the private rezoning could be 2,000,000 to $4,000,000 and then whatever the carrying cost on the land is on top of that.
0:56:43
And so you could be in a situation and we were during between 2020 and 2024, which was really the hardest years of my career because we had multiple entitlements going on and things weren't moving well.
0:57:04
And so the combination of the length of time, the expense just to get to a closing, what I always say to folks is it's really bad for us.
0:57:15
It's worse for the people who are waiting for housing.
0:57:18
And the last thing I'll say on this, which I think is important, is that people talk about not wanting to embrace entitlements because they're worried about developers making money.
0:57:33
But that's like saying, I don't want to get this abscess out of my mouth because the dentist makes too much money.
0:57:39
Or I wouldn't really go for open heart surgery.
0:57:41
But do you know how much cardiologists make?
0:57:43
And my son really needs help.
0:57:46
He has a developmental disability.
0:57:47
But do you know how much those people make when they count?
0:57:50
It's like a I would really want fresh food and fruits and vegetables.
0:57:56
But do you know how much the grocer's going to make?
0:57:58
It's not a rational application.
0:58:05
And no one thinks that way in any other aspect of their life.
0:58:08
The question is, do I need that?
0:58:10
And is it fair?
0:58:13
And no one really takes, I think, the right approach in thinking about these opportunities as an activist or stakeholder or many council members not named Marjorie Velasquez.
0:58:27
So I'll
Mitchell Moss
0:58:29
stop there.
Kirk Goodrich
0:58:29
Thank you so much for this evening.
0:58:31
It's great to see you all.