Full Transcript for Why Local Developers Matter More Than Ever with Jim Heid

be the vehicle to help bring back the the mojo of the place. And so a lot of work like in Appalachia or rural Colorado where these, you know, amazing assets and towns that had been hollowed out but were starting to, you know, come to a second life. Recreation economies, mobile workers moving there, you know. So there was this movement, this coalescence of people that were either frustrated with what they were getting. Or yearning for ways to be the solution to what they wanted in their communities. So we decided, okay, it's got to be formalized. And we've got a great group of people. The other thing that I think is interesting about this organization is it is the people doing the work. So there's a lot of other what I would call sister or organizations working in a parallel universe. They're advocating, they're writing, they're helping with zoning policy. But they're primarily consultants and policymakers. They're not the people getting up every morning to get stuff done and most importantly signing personal guarantees. So we really wanted to fill that gap of the people who were doing the work, who were figuring it out, that were supporting each other, you know, morally, to some degree financially now with some of the capital programs we're creating. And so it just seemed like the moment was right, needed to formalize it. Jim can't do it all. Jim shouldn't do it all. So, yeah, so building small LLC was formed in January, and and then we have a small nonprofit arm called Small Spark, which will fund scholarships and other program development. I wanna ask you about building small, because it seems that it's already inferring that there's an antithesis to building big. And can you sort of define what small is? I know that some people who are listening maybe from the lending side are like, ⁓ that's less than 20 units, or that's less than four units. But is there really a quantifiable size too small? So I'll give you the little shtick that I give in my 42 presentations last year. And it's first of all, it's it's not a quantitative definition, it's a qualitative definition. And I think real estate inherently is quantitative. And so that's the question I always get. And it really is. qualitative in this sense, it's about the attitude by which developers bring to it. On our forums, we spent a full day at the Pearl in San Antonio, which is a very big billion dollar project, but we called it big with a heart of small because their approach to incremental, locally owned, organic focus on the public realm and the way that those buildings shape and activate the public realm was very much the ethos by which that was built. A lot of our projects, yes, are probably sub ten million. They may be five hundred thousand dollars. They're probably not, you know, two hundred units. They may not be fifty units. They may be more like, you know, quadplexes and triplexes and twelves and you know, eighteens and things like that. ⁓ a high proportion are adaptive reuse. And I

think that is because of the sponsors. interest in what I call the soul of buildings. You know, we love adaptive reuse because there's a soul, there's a story to be told, and you get that by repurposing old buildings, not by just building ground up. So, you know, the short answer is there is no single quantifiable definition. And if there's a lender out there listening to this, what I would say is it's projects that are transformative. They punch above their weight class. They add to the community. So while they may not look like they're going to be a huge return on your balance sheet, the community benefit that they create far outweighs what a lot of the other bigger things you might invest in are doing. There's this inherent or intrinsic value of building small that you're alluding to. And I was wondering if maybe you could start talking about the big side and what the big side loses in terms of that. I don't want to say magic, but like the magic of small buildings and small developments. Yeah, so I think there's there's clearly a process and an opportunity that gets lost, but then there is this bigger sense of place. And you know, it's we've gotten to a place where big is largely the solution for a number of reasons. One is the regulatory environment has gotten so challenging and both the combination of the way the regs are written. And the way the public gets involved in the approvals, that the only way as a developer, if you're gonna put risk money out there, you have to be prepared for a long ride. And if you're gonna be prepared for a long ride, you gotta have deep pockets. And if you're gonna have deep pockets, you wanna have a big return. And if you want a big return, it's gotta be a big project. So you're not gonna spend ten years getting approval for a deal that's, you know, five million dollars. So and then the capital is the same thing. I mean, they would much rather write a hundred million dollar check than a hundred one million dollar checks because it's much more efficient. So we've set up an industry that has really greased the skids and made it, you know, really set itself up for big projects. But in that process, then you do get a lot of formulaic design. The codes kind of transfer from place to place, the building materials transfer from place to place, the REITs. The developers that move across markets, they have their formula of what works. So everything pretty much starts to look the same. And so what a community loses then is that uniqueness of place that comes from just those crafted, you know, little moments. Call them moments, call them accents, the little places that really define a community. And the thing about big and small is it's not binary. It's not like, ⁓ we don't want any of that big development, or ⁓ you know, it's everything's gotta be small. There are times when big is the right solution. When we lose all of the small, I think you lose the kind of humanity. That's the other thing I think about small scale is it's something that I think people intrinsically and psychologically can grasp. They they connect to the scale of the building, the size of the doorway, the space that they walk into that just makes them feel you know, whole and inspired. And you don't get that. I mean, a a new building may be nice and it may be kind of interesting, but it it looks like a new building, right? And it looks big. So there's a there's a granularity I talk a lot about in the projects and the importance of that. And then the other thing that I think a community loses is the flexibility and adaptability that small brings. And so the thing that is so great about smaller projects, especially because it's typically going into An existing fabric. It's an evolutionary process where people watch things change. They feel a sense of authorship as it changes. They kind of take ownership of it psychologically. And they feel like they're a part of the evolution. And from a developer standpoint, you could build 5,000 square feet because you've got this vision and you find that half the vision was right and half the vision was wrong. So when you go to do the next 5,000 square feet, you can get it all right. If you built forty thousand square feet or a hundred thousand square feet and you got it wrong, you're really stuck, right? Like what do you do with it? So this idea of what I call you know rapid prototyping authenticity, trying things out, seeing what works, let the community kind of get their fingerprints in it so they feel like they're a part of the the evolution of their neighborhoods, their streets, whatever, I think just creates so much more connection and you don't feel like you're having something imposed on you by the big bad. out of town developer, you feel like you're part of the co-creative process of building the places that you live and therefore come to love. I like that evolution of neighborhoods because for a very long time, neighborhoods and cities were built by incremental development. And somewhere along the way we lost that. And I think most recently people would want to point to the financial crisis in 2009 and the way that funding and financing changed around these projects. But maybe there are other touch points in history that have made this shift towards building large more palatable to cities and communities. Yeah, and I and you know, I I think when people were doing this stuff, they weren't calling themselves incremental developers, right? They were just pillars of the community. They were creative. They wanted to build stuff. The key was they lived in that community. And so they weren't building stuff that they were embarrassed by or felt was extractive to the place they live. They felt like they were creating things that were additive and they were solving problems. In a lot of ways, development, I like to say, was a noble profession. It's inflicted it on ourselves that real estate developers are probably ranked somewhere between politicians and

attorneys or something in terms of not being particularly loved. And it's because it has become a largely extractive profession and it should be one of the key professions because we're the people that get stuff done. You know, we work with all of these competing imperatives, sustainability, social equity, transportation, mobility, you know, creating places, all of the wonky stuff we talk about as planners. And we should be generalists and conductors and admired for what we do. And instead we're pretty much derided because we're not doing those things well, or we haven't done those things well. I mean, everybody points to post-World War II. And I think that that was obviously in the housing sector where things changed a lot, but I think it also set the stage for what's happened in commercial environment too, which was the industrialization of real estate development as opposed to the local pillar of the community wanting to be additive to the community versus it being purely a transactional industry. Can I buy the land right? Can I buy it at the intersection of the The interchange to be able to get in before the interchange is built. So I, you know, and then I'll put in the next whatever it is. And so that industrial approach to development lost the sense of craft and creating for our communities. And then it just it, you know, it continued on from that. I was I was doing a little research before this. And one of the things is so last year, million six housing units built, about 600,000 of those were multifamily. The top 10 builders built 30% of. And the next 40 home builders built about another 20%. So 50% of the single family housing units built in the country were by the big builders. And there's been this race, you know, who's going to get to 100,000 units first? And so it's a very different kind of mentality than what was an army of smaller builders working in their community, proud of their craft, you know, building things that really belonged, experimenting, trying new things. mixing product types on a block because they bought things. It's just just a very different approach to, you know, it's kind of the industrialization of housing, which we also, you know, sort of need. It's not helping affordability, but it's probably a lot more affordable than if it was a bunch of onesie twosies out there building. One of the frictions I feel in these conversations is the idea of development for community benefit and development as an investment asset. Yeah. And I would love to hear your thoughts sort of on that friction as it pertains to small developers. Yeah, it's one of those definitional characteristics of small that I like to use a lot. And I explain it this way, which is small scale development sees real estate as the means to the end as opposed to the end itself. So I think a lot of the investment based real estate is I need a twenty two percent return. I don't care if it's a data center or a storage unit or whatever else I'm gonna drive to that, I'm solving for that return number. And the small developer is, you know, I grew up in this community. ⁓ I'm disappointed with what's happened in this neighborhood. I see an opportunity. I want to heal the neighborhood. I want to create more affordable housing. I want to create some places that my friends can live in affordably and we can try, you know, whatever it is. I want to activate the main street with a cool little bike shop or indie shop. And I do that by developing real estate. So the end is something much bigger than simply building an asset and getting an investment return. And I think again, the institutionalization of real estate, the way that it is viewed as part of the investment portfolio. I've got my stocks, I've got my investment in bonds, and I've got my investment in real estate has really removed too many people from The fourth dimension of real estate, which is it's it's an asset that touches people every day and it has a significant long term generational impact on our communities, unlike I think stocks and bonds. But when you treat it like a stock and bond and you don't really care what the asset is or what the outcome looks like or how it impacts humanity, it it takes on a completely different nature than than really what it should be. And I think what the responsibilities that we have as developers has kind of been lost to that. So You know, you talked about how the twenty two percent return isn't front of mind for small developers because they are looking for the return to the community, which is easier to qualify as opposed to quantify. Right. ⁓ so I could imagine that finding f investors or ⁓ funds for these types of small projects might be one barrier to them and I'd love for you to speak on that. But what are the other types of barriers to building small if it really does so much for communities? Well, capital is is clearly our pain point. When I wrote the book and after what that point I forget how many forums we had done, but you know, no matter which kind of city, blue, red, rust belt, emerging urban, whatever, there were two common themes in terms of barriers, which was capital and regulatory. And the regulatory environment has shifted. It's not solved yet, but it certainly shifted. But capital mean continues to be the pain point. And I think the solution will not be solved by Hoping the institutional investors will finally wake up one day and say, gee, this is really worth doing. I think we've come to the conclusion after 10 years of beating my head on the wall that that's never going to happen. So there really needs to be an alternative source. And I do think we are seeing more community-minded investors who care about their community and see the value of this kind of work, that they look at their returns in a multidimensional way. So they may still have their whatever in their portfolio that's yielding them their twenty percent returns, but they recognize the value of what kind of positive

transformation a project might bring to their community. They want to support an entrepreneur who believes in the community is striking out on their own. So they're kind of backing them for social good, not just for a 10X return. And they want to be part of they they maybe reached a point in their life where, hey, I've done well, I've made a lot of money. I don't have to make that much more on top of that. I want to put it to good use. So it's an important distinction to understand. I think a lot of kind of small aspirational developers think, well, I'm just going to go to Bank of America and I'm going to get a loan for my project. It's like, well, it doesn't really work that way, you know. So this idea of the friends and family, the country club, the impact investor, knowing how to tell that story, knowing how to show a broader, what I call a bigger scorecard than just financial returns. is a really important part of raising that capital and then making the community aware of what the opportunities are. And then there's, you know, there's some new tools. Obviously the crowdfunding, what Eve Picker has done with small change is a really good example of kind of Main Street to Main Street investment. There's some things that we're working on within building small that will be funds for smaller projects. And the thing that's important to say in all of this ⁓ I'm a big believer. This is not about philanthropy. This is not about, gee, that's a cool project, you know, let's cobble together a bunch of grants and we really don't expect it to make money. This is disciplined capital execution of real estate, but it's with a bigger mindset than what they will teach you in grad school and a lot of the other professional development programs. Yeah. ⁓ because you've done so many of these forums and all throughout the country too, I was hoping you could talk about a few distinct examples. Of projects that are getting it right. And when you talk about the bigger scorecard, how they are telling that narrative to build momentum around a project. Yeah. So you go into these communities, and it's one of the both the joys and also the challenges of the small-scale movement. You know, it's a highly fragmented, very small, you know, these are all entrepreneurs, they're one or two people. So they don't have a big marketing department and they don't, they're just kind of out there getting up every day to to work. their communities and do great things. So when you uncover them, they're so excited to find us. And we're so excited to find them because like, ⁓ my God, and I hear this all the time. I finally found my tribe. So there is this kind of undercurrent of all of these people doing amazing things that, you know, it was one of the reasons for the book is somebody's got to tell this story. So last fall we were in Fayetteville in Bentonville, which is a fascinating place. And obviously it has some economic engines that not many places would find replicable, but the story

there of an ecosystem of entrepreneurialism that I think spun out of, you know, just the roots of the culture, the university, an incredibly strong and well-established community design program, which was kind of the champion and the holder of the vision and the provocateur for what could be better. set the stage for you know young people and some people you know probably know Ali Quinlan from Inc. Dev now, Ward Davis, Matt Petty, you know, people that are doing really interesting stuff. And it's because you've got a context there that was willing to try some new things. And you also had a lower cost of entry and a lower cost of construction. So you could try some things. But it was a great example where there was a really good ecosystem that was happening and they were supporting each other and the codes were supportive of it. We're in Kansas City the year before that. Kevin Klinkenberg, Diane Botwin were doing some really interesting infill work, and that was enabled by some things the city was doing. So they were accelerating and expediting small infill projects in target neighborhoods. So they would identify a neighborhood that they needed some love. They figured small-scale development was the right way to get the flywheel going. And so there was expedited approvals. And property tax abatements for smaller projects. So, you know, a really powerful economic tool that usually gets thrown to the big, you know, 40, 200 unit projects, you know, was actually targeted towards smaller scale ones. That that's fascinating. And you spoke about so many different places. Yeah. And he said there are two things that remain consistent in all of these places as barriers to entry. And one is the money, and the other one is the regulation. And so I'm curious in these different locales. How is regulation hindering and maybe it's evolving to helping smaller developers? And if you maybe you can speak to one or two examples, that would be great. Yeah, so it's been fascinating again as I've been kind of toiling in the wilderness on the small scale stuff to watch the concurrent conversation that's happening around zoning reform and you know single staircase and all of these. I mean it just shows that. There is no silver bullet, as we all know. It's a thousand tiny silver BBs and you just have to work so many levers in the system if we're gonna fix what's you know, we've managed to I mean, if we wanted to create a system that was like the worst possible system you could, if you sat down to create it, you would just look back and say, Well, look at what we've done. I mean, it's like you know, how did we get here? It wasn't intentional, but we've certainly built a you know, a juggernaut that doesn't work. So in California, I think is an interesting model because you know, we're in some ways the poster child for public involvement that has basically just stalled our entire housing market. ⁓ and the recognition finally at the state level that it's got to come from the top down. I mean we're we're a place of local land use laws and it has really shot us, you know, shot us in the foot. And so I forget how many pieces of legislation California has passed, something like 250, to try and fix all of the little challenges that have been created. And some of the early ones were really, you know, they had great high hopes for, like SB9, which allows you to self-divide your lot, but you have to live in one of the units. You have to do this. And so they would come up with these great ideas and then they would throw enough handcuffs on it that it wouldn't really yield anything. But I think we're finally getting to the point where we've had enough trial and error that it's actually starting to yield some promise. And especially some of the ministerial subdivision of lots to you know, 10 lots as small as 800 square feet, I think, holds a lot of holds a lot of promise. When we were in Fayetteville, one of the interesting comments that I can't remember it was Ali or Matt mentioned, but the thing that they said was fascinating about that place was they weren't afraid to change a code. And if something didn't work, change it back. And so this idea that an era where we're looking for solutions, the ability to be willing to experiment and fail and then figure out what you learned from that and be able to adapt to I think is something we've completely lost because we're so afraid that we're gonna get it wrong. So the perfect becomes the enemy of the good. And you go to these public meetings and they play what I call stump the chump. Well, what if happens, you know, it's a Sunday of Super Bowl and somebody, you know, there's two fire trucks on each end and you know, you got a barbecue and all this kind of stuff. It's like, ⁓ man. So this ability to try things. ⁓ I I loved when lean urbanism came up with the idea of the pink zone. don't know if you've heard, you know, that concept, but yeah, where the Red tape is lighter. And and I've tried that in so many places where like, don't rezone the whole city. Let's just pick an area and let's try a pilot. Let's call it a pilot. And if it doesn't work, you put five years on it. So I think that we need to find ways to experiment and be willing to say, hey, that didn't work. Let's go back to what we're doing, or that didn't work, but it would work if we did this and this. So we need to get there. The other big thing is I think the codes and the regulations are really twenty percent of the problem. And there's a lot of people working on that, but I think a lot of people are saying, ⁓ well, if we just change the codes, everything's gonna change. And the real change needs to happen within the culture of the approval process. And there's a lot of, I think, jurisdictions where they feel like they're there to say no, because everybody knows the developer has a five million dollars hidden in their performer that they're not sharing with you. ⁓ and they just feel like they're there to protect the

public good over the long term, versus, yeah, we all want the same thing. Here's what's on the table for us. What is it that you need to make this work and how do we get there? And so a lot of us in this building small movement talk about we don't want to go to places where they don't want us to come work because there isn't enough time and energy to try and fight that battle. No matter how much how great their economic develop development department looks like or makes things sound, if their council's not aligned and the neighborhoods, you know, they're not gonna they don't have the political will to stand up to. You know, the one guy who's an attorney in the neighborhood where you can want to do a project, it's it's just not worth it. You spoke earlier about how developers sit somewhere between politicians and attorneys. And I've had the good fortune of working for multiple developers and multiple jurisdictions. And that somehow seems to be a consistent thing that regardless of the size you're working at, regardless of how good your intentions are. Someone is still thinking that you do have that extra five million dollars sitting somewhere and you're only doing this for your own profit. And that ⁓ that perspective I feel like puts small developers on an even playing field with big developers, even though they're working with very different levels of resources, I would say. So when you think about small development, is it the same amount of difficulty as large development? But just with different resources. Somebody explained it to me that your small project is almost as hard as your biggest project. And there's not really like a hockey stick of a learning curve that you're on. Everybody has the same learning curve regardless of what the size of the project is. Can you speak to that a bit? Yeah, and I think both sides of it. So I think it it is as hard if not harder. And the reason it is harder is what I talked about at the beginning, the institutionalization of the process is really geared for the bigger project. So your basic approval fees, your approval times, the expectations of what the hoops you have to jump through for a you know, a ten unit cottage court project versus ⁓ you know, forty or hundred unit apartment building is not much different, but you only have ten units to amortize that cost of time and approvals over versus 40 units. So there's an inherent bias towards bigger projects. And I've often talked about one of the key things I would like to see is what I call the small bypass. And I think it's somewhere around 20 units. If you join 20 units, it should be ministerial. The fees should be pretty much nothing, no impact fees, no inclusionary housing ordinance, because these are transformational projects that add a lot of value and good. I think the the opportunity that small developers have is it is you. It's not, you know, some unnamed Reek that comes into town with their, you know, attorneys doing the zoning approvals and their

fancy architects doing the presentations at the public meetings. It's you. You stand up. It's a real person and you live in the neighborhood and you can talk about things you've done. And you know, one of the pieces of advice I give is small developers. Give everybody your cell phone number. And they're like, what? Why wh why would I give somebody my mobile number? And I said, just the act of giving them your mobile number, A, makes you human and B, builds a level of trust. I did it on my project. I never got a single call. The only call I got was when somebody was breaking into my site at two in the morning and one of the neighbors saw it and called me. So would they have done that if I was an out-of-town big developer? Probably not. But because they knew me. So that was a really good investment. And I think I've been talking as a small developer, you build a brand, not projects. And because you're working hyper locally, everything you do adds up to the next project, hopefully in a good way. So that's the opportunity and the secret sauce a small developer has to the challenge of approvals that a big developer doesn't necessarily have. But you are colored with the same cloth as big developers because you have the name developer. That's why I call myself a built environment entrepreneur because it's strategically ambiguous, but it sounds a lot better than real estate developer, right? And I think when people meet the people that we've met either at the forums or in our cohort, and they hear the passion, they hear the commitment, they hear the interest in social good, ⁓ it does start to help turn the tide a little bit in terms of that perception of what a developer is and how evil they are. The margin for error in a small project is obviously much thinner than it is in a big project. So one unexpected expense, one additional year of approvals, one additional traffic study or mitigation requirement suddenly takes a project that was really good for the community, gonna help you build your portfolio. You weren't gonna retire on it, but you were building towards something, and it could wipe all that out in that one move. And I don't think the public officials, the regulatory staff, and the average citizens understands how thin these projects are and how much an individual is putting at risk when they do these. So they're not as empathetic as I wish they would be in terms of, hey, let's get this together. Let's make sure you come out of this alive. Let's make sure we it's a know, we all win out of this as opposed to, well you can absorb that. You're a developer. You always got money, right? So that's such a good point. And I Didn't bring you onto the podcast to scare everyone out of out of building small. So I I want to talk about the support network that you and your organization provide and the tribe sense that this is a group of people who care deeply about the communities they live in. I think you said in one of the previous podcasts that you only develop where you can bike to. So you yourself understand the the nature of small development as being local development. So can we sort of like frame this up for the listener? And if they are interested in development or supporting small developers, what can they do? Great. I think those of us that have lived with it long enough, and obviously I live with it every day one way or another, it it can be daunting and it can be somewhat discouraging. The flip side of it is it can be extremely joyful. And we talk about one of the the pillars of why we do what we do is the joy of building. I mean, we're people that don't want to sit around and just draw plans to have sit on a shelf where we want to get up we want to build stuff. And there's a real level of personal satisfaction when you drive by something you've created, realized And then you see people living there and activating it and taking part in it, coming up to you afterwards and saying, ⁓ I love the what you've done here. I mean, that's a return that you can express to a banker, but is why we all continue to do it, because it's it's really, really meaningful. And and over the long arc of things, to be that instrument of change and positive change in neighborhoods that have been forgotten or as Chris Alcorn called, gone to sleep, you know, being part of that waking them up to to to realize the potential. I mean, it's something that you know, not everybody gets to do and is extremely, extremely powerful motivation. The genesis of building small was, hey, I, you know, I love this stuff. I actually was a consultant and I worked on really big projects. And then I would go to these really cool places all around the world. And when we were all done with the charred or the meetings in the big boardroom with all of the fancy pants architects and everything else, then you'd go look for the cool little alley that had the interesting and so I kept, you know, it's like Hanging out in these places and thinking, yeah, this is what gets me up in the morning and why can't we do more of this? So that's what led me to the forum, and it led me to my first projects to try and figure out how to do that. And then the forum was, okay, if I feel that way, is there anybody else out there that does? And pretty quickly found there were a lot of people that did. And as I said, many of them were coming because they weren't finding that level of shared joy, hard. times that they could open the kimono and talk to somebody about and you know, feeling like, ⁓ I'm so stupid. Why did I do that? And then you find three other people that went through the same thing. It's like, ⁓ I'm not so stupid. This is just like really hard to do. So I call the forums part training and part moral support. And it's just knowing that the the things that you're passionate about and that you feel matter there are other people that feel that same way. And the things that you're struggling with and sometimes filling yourself with self-doubt about.

others are in that same place along the journey and they're either in it or they've been through it and have come out the other side and are there to tell you it's worth doing. So just keep doing. So it's a lot of the tribe is that is just, you know, finding people that have that shared sense of value, are interested in getting things done, not just talking about it academically, and then supporting each other along the way. And now after It's just our 14th year of the forums. We'll do our twenty-fifth one in the fall. You know, people are starting to do deals together. I mean, it's interesting as as I've gotten older and many of the crew have gotten older now. And we all said, you know, we're on a point where we just want to work with people we like. It's no longer just about, ⁓ I gotta get another deal, I gotta feed the machine. It's like, you know, I'm at a point where it's it's been good, but I wanna I wanna do things that are meaningful. I wanna work with people I like that share the same value. So it's become this connection point. For people again with shared values who like being around each other, who appreciate what each other are doing and are there to, you know, have your back when when things get tough for you. I really appreciate that because it does seem, you know, from the periphery that it's a very solo entrepreneurial experience and having that resources like invaluable, really. Yeah. But I know as somebody who's listening to this who might be thinking, ⁓ I would love to be a built environment entrepreneur. As you put it, there are so many aspects to this from the design and the entitlements to getting the right financial partners on the table. And then there's also the programming. Like, how do you make this unique and specific to the place that you are living that you want to develop in? What is the first step somebody takes towards becoming a built environment entrepreneur? When you buy the book. Which I have right now. There we go. Okay, we have the book normal small. and I say that somewhat tongue in cheek, but I also say it with some real heart because one of the things is so the again, the backstory on the book was all these forums need to tell this story. I decided, okay, I'm gonna write this book. And and if the book had finished on time, it would have been a very different book because somewhere along the course of the first instead of two years it took four. But in that third year, I started developing my own. projects. And I realized this needed to be more than just a coffee table book about cool projects and why they matter to how you get this stuff done. But equally important, what you need to find within yourself to be able to follow this path. There's a lot of people that I think love the joy of building something, leaving your mark, being the person who helped, you know, pull together the community and save the main street and all that kind stuff. And I don't think they appreciate the challenge of laying awake at night because you're not sure how you're gonna make the next payment, or you do get that sudden surprise where you've got an additional, you know, fee that the city forgot to tell you about and oops, yeah, we're sorry we didn't tell you, but you still got to pay it if you're gonna do the perfect thing. So understanding what your aptitude and and fortitude is to deal with risk and ambiguity, I think is one and it's not to say that if you're a r not a risk, a high risk taking person, you can't be a small developer. You know, there's a thing about entrepreneurs, it's not that we love risk, we just know how to manage it. So the key is first of all, understanding what are the risks that you're looking at, and then how do you manage it and how do you personally internalize and deal with those risks. And then the next thing is understanding what you're good at ⁓ and playing to that strength rather than trying to cover the weaknesses. And then find a complementary partner that will cover those weaknesses. And often talk to a lot of young developers like coach and stuff like that. It's like, you know, 50% of a deal that gets built is worth a lot more than 100% of a deal that never comes out of the ground. And there's a lot of pay well, well I found the site and I had this vision and I talked to the city and I sort of got it approved. So I want, you know, ninety percent of the returns and so all they're doing is writing a check. And it's like, yeah, well that wouldn't happen without the check and that's why they're in that position. So you know, suck it up. And acknowledge that on this first deal, they're probably going to get an outsized return, but it helped you get launched. The other thing is, you know, don't make the first one too complex. I I love these, you know, these people of that, ⁓ I just went to the such and such conference and I saw this, you know, living-rated building that was, you know, green roof and it had, you know, it was a well standard built inside and it would have this component and we were doing this program. It's like, you know, just go build an ADU. And get a certificate of occupancy and then maybe move on to the next thing. Because taking a smaller project that you can get through quicker, get some quick wins, but understand the process of managing your architect, signing a construction contract, getting a bank loan, paying, dealing with construction draws, getting that ultimate certificate of occupancy and how good that feels. Go through that on something that has a lot less complexity to it. So you get those basic skills in place. And then scale up to complexity after that. I've seen so many projects that unfortunately die under the fatigue of over complexity, and they think they're gonna solve it intellectually, and it's still kind of a brute force business where you just gotta get up every day and grind through certain aspects of it. So the future of our cities may not come from waiting on one massive project to save the day. It may come from many smaller acts of investment, creativity, and local leadership happening all at once. That means the next great housing solution, neighborhood revival, or main street comeback could start with someone who simply decides to take the first step. Maybe that someone is you, and maybe it's someone that you know. In either case, go ahead and share this episode and the importance of building small. And if you'd like more episodes on housing, infrastructure, and ideas shaping better places, be sure to check out our work at buildingbettercities.com. Until next time, let's keep building better cities together.