Why Does it take Developers SO LONG to Buy Land?

Why Developers Take SO LONG to Buy Land

This is Brad from NorthGALandBuyers.com and Arbor View Properties. I’m a real estate investor and developer based in North Georgia, although we buy properties all across the state.

Today, I want to discuss why developers often seem to take a long time to complete their projects. The truth is, most developers would prefer to work much faster, but we are often at the mercy of various factors, particularly government regulations.

• Is the Land Suitable?
• Rezoning
• The Septic System Hurdle
• Engineering and Approvals
• Financing and Investor Confidence

Government Regulations

Government processes can move at a snail’s pace. For instance, if a property needs to be rezoned, there are several steps involved.

Initial Assessment: Is the Land Suitable?

1. We begin by evaluating the land’s suitability for the intended development. This involves considering factors like soil conditions, topography, access to utilities, and existing infrastructure.
2. A crucial part of this step is determining if the land can even support the project. For example, if we’re planning a neighborhood with septic systems, poor soil conditions could make the project infeasible or too expensive to fix. This initial assessment carries significant risk.
3. If the land isn’t suitable, the project may be abandoned at this stage.

Rezoning (If Necessary)

1. If the property needs to be rezoned, the process begins with publishing public notices.
2. A designated waiting period follows the public notices.
3. Next, a public meeting is held, allowing community members to express their opinions and concerns about the proposed rezoning.
4. The county then reviews the rezoning application, taking into account community feedback. They may identify issues that need to be addressed.
5. If the county raises concerns, we must revise our plans and resubmit them. This back-and-forth can happen multiple times.
6. Only after all concerns are addressed and approvals are granted can we proceed.

Project Continuation (Assuming Steps 1 & 2 are Successful)

Assuming the land is suitable and rezoning (if needed) is approved, the project can move forward to the next stages (not detailed here, but would include things like securing financing, obtaining permits, construction, etc.).

As you can see, even before construction begins, significant hurdles involving land suitability and rezoning can cause delays or even force a project to be abandoned.

Hurdles In A Land Development

There is a significant amount of groundwork and risk involved in development work.

The Septic System Hurdle

1.  A functioning sewage treatment system is absolutely essential for building houses. If a property can’t accommodate a septic system, building is impossible.
2. Septic systems require suitable soil conditions. If the soil isn’t compatible, this option is off the table.

The Public Sewer Connection Challenge

1. If a septic system isn’t feasible, the next option is connecting to a public municipal sewer system.
2. If no public sewer line is nearby, the project is likely dead in the water. There’s simply no way to dispose of sewage.
3. Even if a sewer line exists, distance is a major factor. A half-mile distance means installing half a mile of piping and potentially needing pump stations to move the sewage, plus obtaining easements from every property owner along that half-mile route to allow for the pipe installation.

Engineering and Approvals

1. All of this infrastructure (piping, pump stations, etc.) requires a detailed design. This means hiring a civil engineering firm.
2. The developer, not the county, is responsible for paying the engineering firm. This is a significant cost.
3. The engineering process itself takes time – often weeks or even months – and unexpected obstacles can arise, forcing revisions and further delays.
4. Survey work also needs to be completed, adding another layer of time and expense.

Financing and Investor Confidence

1. Securing funding is essential. While some developers may pay cash, many rely on investors.
2. Attracting investors takes time. They need to be convinced the project is viable before committing their money.
3. Investors are looking for profitable projects. If the project, especially the sewage situation, looks risky or unprofitable, they won’t invest. They don’t want to lose their money. Just like you wouldn’t invest in a losing proposition, neither will they.

In short, even one of these hurdles can derail a project. Successfully navigating all of them requires time, money, and careful planning.

There are many variables involved in getting approvals for development projects, and the process can be incredibly time-consuming. You have to submit your plans, and often, they will request changes. After making those changes, you must resubmit, which could mean waiting another three weeks for approval. They might come back with additional requests, and this cycle continues. It’s a frustrating experience. Some municipalities and counties are easier to work with than others, but the truth is that all of them present challenges.

If I could streamline this process, I would. A more efficient timeline for getting developments approved would lead to more affordable housing. The faster I can get a project off the ground and build homes, the cheaper it becomes for me to produce them. Lower costs mean I don’t have to charge as much for the homes, resulting in lower prices for the end buyers. However, the more complicated the approval process gets, the higher the costs will be, which ultimately increases the price of the houses for those buyers.

That’s how it works. It has always worked that way, and it always will. If you suggest that it shouldn’t work like this, I’m here to tell you that you’re mistaken. This is reality. I expect to receive some negative comments about this, but that’s just fine. I understand what it’s like.

So, why do developers take so long to build or buy properties? There’s a significant amount of runway, risk, and a myriad of hoops that we must jump through to prepare a piece of property for development before we even move one speck of dirt. A considerable amount of money, time, and effort goes into getting a property ready for development. That is why it takes so long.

I hope this helps you gain a better understanding of what happens in our world as developers. If you have a property you want to sell, I would be happy to make you an offer to buy it. Alternatively, if you prefer the traditional route, I am also a licensed real estate agent in Georgia, having held my license for several years. I am affiliated with OneSource out of Woodstock. Feel free to reach out to me, and we can discuss your options. You can visit NorthGALandBuyers.com and fill out the form on our site. Once you submit that form, a member of our team will contact you as soon as possible.

Really appreciate your time in watching this video. Hope you have a good day.