DEVELOPMENT & DISJUNCTION
Beginning in Sept of 2021 the New York Times began circulating a story on the trials and tribulations of the residents at the newly minted 432 Park Avenue luxury high-rise condo building in midtown Manhattan. This is a sensational story complete with celebrity unit owners, a world-renowned architect, and an unapologetic developer. What is telling here is that even the rich and famous are unable to avoid the pitfalls associated with multi-family residential development in the big city.
Most new developments are faced with leaky roofs, missing insulation, non-existent waterproofing, substandard mechanical equipment, paper thin walls, drafty windows, warped flooring, unreliable plumbing isolation valves, elevator entrapments, a lack of air circulation, underperforming mechanical systems, insufficient storage space, negative building pressure, hairline cracks, back pitched drain lines, brown outs, poor indoor air quality, improper and/or incomplete installations, poor craftsmanship, no upgrade flexibility, no consideration of maintenance…the list goes on and on. These deficiencies have resulted in frustration and thousands of lawsuits worth billions of dollars over the years. They are so common in fact that developers have learned to park cash in escrow for the sole purpose of settling with their future buyers when the time comes. In the case of 432 Park alone, the board is seeking damages in excess of $165 million, including “...the diminution in value of the building and its units.” Unfortunately, the settlements rarely cover the full cost of repairs, many of which are not discovered within the statute of limitations. The developers know this; it is a calculated risk. It is ultimately the new building owners, the residents, who collectively bear the cost of the repairs and maintenance to bring them in line with the performance standards that they thought they had paid for. Needless to say, this is both frustrating and confusing.
How and why does this happen?
Most of what we see when we look out the window today is the result of development by private investors. Carol Willis, an architectural historian and director of the Skyscraper Museum in New York City, reminds us that “Speculative buildings constitute the majority of structures in every central business district, and they represent about two-thirds to three quarters of new construction in nearly every period.” p. 155 It is important to understand that real estate is a serious business, but, contrary to popular opinion, the reasons for development problems are not limited to the often-cited ‘evil developers’ and ‘fame-hungry architects.’
The circumstances surrounding problems in building development are not too dissimilar from plane crash theory. Plane crash reconstruction experts agree that in order for an airliner to crash, many different and seemingly unrelated things must go wrong, and in a particular order, for the crash to ultimately occur. Some things are active while others are passive. Some are the failure of a system while others are acts of negligence, or worse, unethical behavior. The same is true of bad buildings.
PART 1 - THE WHY
A LOW BARRIER TO ENTRY
For most would-be developers, access to capital is the biggest hurdle. The best developers know that you don’t build a building with your own money, you build it with someone else's. With access to capital secured, becoming a developer has a low barrier to entry. According to urban development consultant, Peter H. Brown, “It is not a legally recognized profession like architecture, engineering, or law, which requires specific academic degrees and work experience to obtain licensure.” p. 26 Most US states require an easy-to-obtain real estate salesperson license to become a developer. Having the certification alone allows the developer to take up to half of the broker’s commission when acquiring the land. With the real estate license in hand; developers can crunch some numbers, purchase land, assemble a team, and get the ball rolling. Becoming an architect, on the other hand, takes no less than five years of university training at an accredited college program, a 3-year internship under the guidance of a licensed architect, the successful completion of a five-part comprehensive examination, a state registration, triennial renewals, and no less than 1-hour per month of continuing education in construction + health safety and wellness (HSW) for as long as you intend to practice, and a 2-10 year liability per project. And yet, these days, developers, not architects, are largely responsible for our built environment.
OWNERSHIP STRUCTURE
The ownership structure of a new building includes two prevailing models. Developers can either “hold” the property for a long term return on investment (ROI), or they can sell, aka “harvest,” the property for an immediate ROI. For those developers turned owner/operators who intend to hold and rent out their buildings for the highest possible rents their goal is to lower maintenance and operating costs while extending the life of their buildings over time; this is the ‘total cost of ownership.’ These developers will typically use better vendors, higher quality and more durable materials, and design with upgrades, energy efficiency, and adaptability in mind. This attempt to slow the depreciation of the asset and extend its life allows the owner to keep a steady stream of passive income in the form of rent while the land itself increases in value and the property management fees, depreciation, and other expenses are tax write-offs. Skyscraper pioneer, Cass Gilbert, once said that a rental property is “A machine that makes the land pay.” p. 19 Willis This is true, but does not absolve an owner/operator of risk. These types of owners may face vacancies, difficult tenants, regulatory hurdles, and market fluctuations. And the cherry on top; ongoing liability.
For those developers who intend to harvest and sell out their buildings for the highest possible market prices as soon as feasible, their goal is to lower upfront costs and maximize their immediate ROI. Those harvesting properties are subject to the cycles of the market and may face high transaction costs and taxes. They benefit from not needing to maintain a full roster of tenants or maintain the property in the long run as the asset depreciates alongside that ongoing liability previously mentioned. No doubt it is more costly and difficult to make changes to a building after it has been built, but developers who intend to harvest are not concerned with these future changes since they will not be in the picture for long. And because these accommodations are not required by the building code, they are rarely implemented. The rub is when this strategy is employed, and the developer fails to hit the market before the wave crashes, he is left holding the bag on a substandard product. The cracks begin to show; pun intended.
SAVING MONEY
There are more than a few cases of developers and/or their contractors looking to save a dime and a minute by omitting acoustic barriers, thermal insulation, and/or waterproofing so that they can close walls faster while saving on materials costs despite the ramifications. The mechanical equipment, for example, need not last as long since the developer won’t be around when the equipment fails in the short term or depreciates more rapidly in the long term. Some developers are keenly aware that many buyers will end up renovating as soon they take ownership no matter what he installs. The unit purchase isn’t about the unit aesthetics, it’s about the prestige of the address, the amenities, and the views. Developers will outfit units with inexpensive finishes, fixtures, and equipment so as to not cut into their profits. This means more material will end up in a landfill when the “builder’s grade” kitchens and bathrooms are superseded by the new owners’ exotic marble and plumbing fixtures imported from distant lands. Developers are also known to underestimate the operating costs of the property, naively or purposefully, running the building with a skeleton crew to minimize carrying costs until the building sells out and the day-to-day operations are no longer their problem.
STARTING THE CLOCK, SAVING TIME, & BEING FAST
Most developers start with some of their own money, while the balance is a combination of bank loans, private investor equity, and government subsidies with strings of some sort. This is known as their “capital stack.” As soon as the meter starts running, developers are up against the clock to minimize interest, repay construction loans, start selling units, and get their product on the market at the right time. When time is money and money is risk; developers who save time, reduce their risk.
One practice is to prioritize the construction of dwelling units at the expense of common areas and amenities in a building. A developer is not legally obligated to finish these areas before he can obtain a temporary certificate of occupancy (TCO). With a TCO in hand, the developer can begin repaying his construction loan from the proceeds of unit sales. Unfortunately, this practice almost ensures that the CO is rarely obtained as new permits are opened by residents seeking to perform renovations of their own, whenever they are not satisfied with the developers taste in finishes, but before the sponsor has closed out all his DOB paperwork.
Obtaining the TCO starts the 6-year clock on the statute of limitations for claims against a condo sponsor for breach of contract and/or breach of fiduciary duty claims. Individual owners cannot make a claim against a developer for problems with common areas (lobby, gym, the elevator, roof deck, etc.), only for problems within their own units. However, the building’s Board of Directors, composed of unit owners elected by the residents, does have the power to make these claims.
CONTROL THE BOARD
The Board of Directors has a fiduciary duty to protect the interests of the unit owners, but, In a new building, the sponsor of the development controls the Board for a period of time, appointing members. The sponsor-appointed members may not be motivated to fix problems that expose defects in the construction of the building, because they would have to dig into their own coffers to address them or at least defend themself against claims. A building board typically takes over from the sponsor when a certain percentage of units are sold, usually around 50%. Until the Board composed of owners have control of the building, their options are limited. In the meantime, it is in the developer’s best interest to run down the clock.
SPACE IS MONEY
Given that the more square footage that can be sold will yield more profit for the developer, it is in his best interests to maximize the amount of sellable floor area and at the highest rate per square foot the market will allow. This results in two practices.
The first is taking advantage of all allowable zoning floor area (ZFA) permitted. Each building lot falls within a particular zoning district. These districts specify not only the allowable uses, but the maximum allowable buildable area expressed as a multiplier of the lot area, aka floor area ratio (FAR), inclusive of the bulk regulations for that property. As these bulk regulations use a series of limiting heights and setbacks along the “public way” (i.e. sidewalks), the forms that fill out the invisible limits set by the zoning resolution result in the all-too-familiar Ziggurats seen around town.
The second is the aversion to dedicating any more area to amenity spaces, storage, and/or mechanical back-of-house spaces than absolutely necessary for the building to function properly. This includes the storage of attic stock finish material (carpet, wood flooring, etc.), resident packages, or space to retain garbage until it can be set out for street collection on trash day. It is only after the Board of Directors has been elected, and the building Resident Manager/Superintendent has an audience who cares to listen, will it become painfully clear that there is not nearly enough space for the day-to-day operations of the building and the original architect’s peers (read, “janitors”) will be employed to make the necessary modifications when feasible.
THE BESPOKE NATURE OF BUILDINGS
Irrespective of the ownership structure, the approach to development has traditionally focused on economies of scale and cookie cutter repetition. The abundance of skilled labor and muscle memory churned out a fairly consistent product. And even as the industrial revolution ushered in new materials and construction techniques, you can still see carbon copy products up through the late 60’s. Development in suburban areas have continued to utilize this repetitious method for smaller stick-frame single-family dwellings, warehouses, strip malls, gas stations, 5-over-1 apartment blocks, and data storage centers. But this practice fell off a cliff in city centers during the ‘70s, along with construction in general during hard economic times. In the early ‘80s, while the economy overcorrected, real estate speculation increased in popularity.
These days, multi-family residential buildings are mostly bespoke. Aided by the introduction of affordable PC-based software, like AutoCAD in 1982, computer aided design (CAD) became accessible to a much wider audience. Larger and more complicated buildings could be planned and adjusted throughout the process as needed, far quicker than would be possible by a team of architects drafting by hand. And developers discovered that people are drawn to the new and novel as opposed to the tried and true. Unfortunately, this new approach eradicated the trial and error method previously responsible for working out the design and construction kinks in a building typology necessary to meet the needs of the users. As an added side effect, this has led to the inability of builders to hone their craft due to ever changing forms and building envelope innovations. Trade labor is expected to construct more complicated buildings without the benefit of practice. 432 Park Avenue’s gravity defying “ultra thin” approach to residential development has proven to be particularly fraught with problems. The purveyors of the zoning resolution could not have anticipated the audacity of starchitects, ambitious structural engineers, nor the availability of technology to support their fever dreams. And let’s not forget the zoning loophole whereby mechanical spaces on each floor were not counted towards the maximum allowable zoning floor area (ZFA) that the developers used to increase the height of the building for the sake of generating multi-million dollar views without penalty given their “as of right” interpretation.
LITTLE TO NO MAINTENANCE CONSIDERATIONS
Buildings are typically built to the minimum standards of the building code as doing otherwise could potentially reduce profits. These codes focus on structural integrity, life safety, and energy efficiency. They rarely address material quality, building performance, or maintenance considerations. Water, in all three of its states, combined with deferred maintenance, are the most effective at shortening the lifespan of buildings. In order to effectively counteract these persistent forces, buildings must be designed with these in mind.
LACK OF FEEDBACK
Lack of input by the people who will be maintaining the building during the design phase leads to buildings that cannot possibly perform. Some architects claim that capturing this data as a part of the design process is an “additional service” which is not performed simply because they have not been paid to do so. This is despite the countless overtime hours architects pour into other aspects of the project, namely formal investigations and articulations, that they are rarely, if ever, compensated for. It makes not sense as to how these critical steps can be cleaved from the design process any more than a surgeon proceeds with surgery prior to the problem that precipitated it has been diagnosed using available tools at hand. In short, this leads to harm both from a quality of life standpoint and from a financial perspective. Ignorance is no excuse. “An object that is designed to harm people cannot be said to be well-designed, no matter how aesthetically pleasing it might be,” p. 20 according to Mike Monteiro, UX designer and author.
THE WRONG TEAM
For the development of any project, it is only as good as its team. Even when the developers have the best intentions in mind, using consultants and contractors that are not the right fit for the size and scope of the project, do not have experience, and/or have poor track records are a perfect recipe for problems in the development of a project. This is more typical of first-time developers who are in over their heads, out of their depth, and/or are convinced they are saving a dollar by going with the lowest bidder rather than the best value. Those that do not carry the necessary experience, expertise, trust, or buy-in from the group will result in dangerous oversteps by one party or another beyond the reasonable boundaries of their role, and can have potentially disastrous implications for all parties involved. We need only look at the concrete cracks in the facade of 432 Park Avenue, the leaning tower of 161 Maiden Lane, and the leaks of 520 West 28 Street for examples of how things can careen off the rails.
OUTSIDE-IN
Unlike office buildings, which are compact service cores surrounded by open work space designed from the inside-out with efficiency in mind, residential developers design from the outside in. The FARchitecture mass is skinned, articulated, rendered and modeled for preliminary approval by the politician, building department, landmarks commission, and/or community Board. The brand ambassador, Marty Neumeier, says “For many products, the package is the branding.” p. 90 Architecture is private art that is displayed publicly; the image of the building is the first thing that community members and politicians latch onto. Once this hurdle is cleared and the entitlements are secured, the unit mix, amenities, structure, and mechanical/electrical/plumbing (MEP) systems are shoe-horned into the rigid envelope. This frustrating and complicated process must also be done with time and budget in mind. As you can imagine, it is difficult to work out all the kinks within the limited construction window.
FASHION OVER UTILITY
The smart developers tend to innovate at the edges. They do not normally take huge risks. They do their research and use any available data to support that what they are doing will be well received. Those developers who are willing to take big risks are either gambling, or they know something everyone else does not, i.e. the risk is calculated. If he succeeds, his peers will follow. Such was the case with nightlife icon Ian Schrager turned hotelier who employed the Pritzker Prize winning Swiss design firm, Herzog and De Meuron, in collaboration with Architect of Record (AOR) Handel Architects, to design a luxury condo at 40 Bond Street, Handel’s first. Once completed, it began selling out at a record setting $2,800 per square foot. Some users prefer couture living; the market has spoken. With success stories like this to provide confidence to their clients, architects have been empowered to make things that not only stand out from the crowd, but cost a pretty penny to make.
Real estate developers have discovered the power of design to differentiate their products in a highly competitive real estate market. According to Stephen Cairns and Jane M. Jacobs, authors of Buildings Must Die: A Perverse View of Architecture, “Under capitalism, architecture’s productive attributes - as creative expression and material form - are at the same time commodities.” p. 54 Where fashion and utility were previously relegated to separate buckets, fashion as a market differentiator has its own utility in the eyes of the developer looking to best his competition. Architects have found a foothold in providing differentiation for their developer clients. In the words of Coco Chanel, "Fashion is architecture: it is a matter of proportions."
But it is important to understand that fashion is expensive. There is a history of people spending money on sex, glamor, beauty, and wonderful packaging. This is not lost on the savvy developer who works with his design, marketing, and sales teams to ensure that the finishes, fixtures, and equipment on display in the showroom and glossy sales brochures are enticing. Buyers are drawn in by the glamor of it all, but they do not always consider the utility until their life savings is tied up with the bank. According to architecture critic Stephen Bayley, “Tom Wolfe coined the brilliant term ‘kerbflash’. Kerbflash suits business clients in pursuit of visual equity, but may be less well-adapted to the needs of real people.” p. Xi
Architects reject tried and true methods in favor of novelty and “originality” regardless of the potential performance and/or maintenance pitfalls that may result. And Mr. Neumeier reminds us that, “Anything new, by definition, is untried, and therefore unsafe.” p. 74 There is a function to the fashion, but it is often prioritized at the expense of the more practical utility of a building designed to perform for its users and against its surrounding environment. The ultra thin runway model who has sacrificed her health for the sake of beauty is apropos. The function of height that has beget the “ultra thin” building typology is intimately tied to the views that can be sold at a premium despite the risks to structural integrity. When Louis Sullivan said form follows function, he meant that the form should develop purpose. When the purpose of a building is an ROI, form follows finance. Most of the time, sky needles aside, these “unsafe” things are non-structural failures like: energy performance, passive solar orientation, spatial inflexibility, roof leaks, and vertical circulation limitations. The delicious undulating slab edges devoid of thermal breaks at Studio Gang’s award-winning Aqua Tower in Chicago are a perfect example of how to use architectural form to entice buyers while sacrificing energy performance.
GREED & MAXIMIZE RETURNS
With greater risk comes greater reward; this is known as the ‘risk premium.’ If you want the safest investment, you buy treasury bonds. If you want to increase your chances of a higher return, you might consider the stock market. The average return on the stock market is a lumpy 10% per year. Now juxtapose this against the potential ROI of developing a property. In the early 80s, deregulation blew open the doors for real estate as a vehicle for big and fast returns in the 90s. Today, rates of return on harvesting a property are expected to be 12% or more. This means making real money in less time. It is no wonder as to why the construction industry accounts for approximately 4.5% of America's GDP. Architect and author Matthew Soules states, “Buildings simultaneously fulfill three elemental roles: providing shelter, manifesting culture, and embodying wealth…Within finance capitalism, the function of buildings as profit-generating investment assets rises to such significance that in many instances it overshadows the historically more prominent roles of shelter and culture.” p. 23
INTOLERANT COMMUNITIES
Let’s be honest, when the public is in support of a new development, they do not typically attend Community Board meetings. These gatherings are filled with the NIMBYists (‘not-in-my-backyard’) who fear change and are concerned that something will either devalue their property or the change to the neighborhood demographics will expedite gentrification. What many attendees fail to grasp is that this does not stop a developer from moving ahead with the “As of Right” entitlements of the land. As of Right is a term used in property development to describe a proposed development that complies with all applicable zoning codes without any special exceptions. Members of the community often confuse “use value” with “exchange value.” The land in question is unlikely to be purchased by the city and turned into a dogpark, nor was it zoned vacant. Without community engagement, or worse, community intolerance, projects move forward without their input.
All of the above collectively amounts to the perfect storm, but this does not mean that we have no way to modify the course of real estate development in our own backyard.
How do we combat this situation?
There is no silver bullet to recalibrate the current course of residential development in American cities, but there are several different angles from which we should consider addressing the deficiencies in an effort to make real change.
PART 2 - THE FIX
RAISE AWARENESS
Raising awareness is the first way to hold development teams accountable. An educated consumer who can see through the smoke and mirrors will be more careful about what they buy, where they buy it, and from whom. Those who are pushing substandard products will be called out, or at least be left to change their ways if they want to continue making big money in a reliable way. This includes talking about it, writing about it, and injecting our culture with some cold hard facts. Staying silent will only perpetuate the problem.
RAISE THE BARRIER TO ENTRY
If the developer was more interested in architecture and the architect more interested in finance a balance between these two considerations can be struck. Raising the barrier to entry for developers on one hand and empowering architects with more access to capital on the other, so they have “skin in the game,” will go a long way in improving our built environment in general and our residential buildings in particular. Architect-led development is one step in this direction.
WARRANTIES, ECA’S, & THE STATUTE OF LIMITATIONS
It is important to know your rights. Developers should not presume that they are free and clear of their obligations once you have signed on the dotted line. In fact, the exact opposite is true. They must be held accountable by whatever means are available to do so.
A residential offering plan is a detailed, legally required document that a developer submits to the Attorney General's office before selling units in a new condominium building. It provides prospective buyers with comprehensive information about the building's physical characteristics, finances, governance, and the terms of sale. The plan is essential for the developer to get approval to sell units and helps ensure buyers receive full and accurate disclosures. A failure on the part of the developer to honor the offering plan and/or failure to disclose something significant is a breach of contract that a buyer can use to take legal action against them.
To protect themselves, buyers and the elected Board of Directors must recognize that a typical construction warranty is a one-year timeline from substantial completion. This is typically the date the TCO is received. The Board should engage a third-party architect and/or engineer to conduct an existing conditions assessment (ECA) to identify all building deficiencies before the six-year runway on the statute of limitations expires. This document is a powerful road map for bringing the building in line with the offering plan.
LEGAL ENFORCEMENT & LEMON LAWS
Herb Emmerman of EMS/Garrison, LLC says, ”Real estate is a point of purchase sale, so buying real estate is very similar to buying a luxury automobile at a showroom.” P.161, Brown You can test drive a car, but you can’t test drive an apartment. In fact, most people spend more time test driving a new car than visiting an apartment before purchasing it. And this is often most people’s largest investment. It is months, sometimes years, afterwards that performance issues rear their ugly head and the purchaser discovers that what they thought they had bought and what they actually bought are two different things altogether.
The first “Lemon Law” was a direct result of an accumulation of consumer complaints from folks who had purchased defective motor vehicles decades ago. In 1975, these complaints culminated in the creation of the Magnuson-Moss Warranty Act, commonly known as the Federal Lemon Law. This law was designed to protect consumers from defective products.“From the developer’s viewpoint, real estate is…first and foremost it is “product” and real estate development is “product development.” P. 62, in the words of Peter Brown. If condos, coops, and condops are in fact consumer products, albeit bespoke rather than mass-produced, it would seem to reason that they too should be protected by similar laws. These laws can be directly tied to the offering plan. Where a developer fails to fulfill their obligations as outlined in the agreement, the buyer is entitled to sue for damages or other remedies due to the breach. We can institute more stringent penalties under the law for developer lawsuits, especially for repeat offenders.
NO MORE TCOs
The current statute of limitations on a breach of contract claim starts at the date of the first sale, but would be more effective if it began with the last. By eliminating TCOs altogether and not permitting buildings to be occupied until they are fully complete with a full certificate of occupancy, we will ensure buildings are better planned, and defects reduced prior to occupation.
INCENTIVIZE HOLD V. HARVEST
Despite what many may think, not all developers are evil greedy liars looking to destroy the communities. In fact, some of the best known developers build within their own communities as they are most attuned to the wants and needs of the area. We must recognize the good ones, engage them in a conversation, collaborate with them, and incentivize them to hold onto their properties for the long term. This may come in the form of additional buildable floor area for their projects, tax credits for performance standards, and the right of first refusal on city land development opportunities among other things. When the feedback is incorporated, it attracts more potential users. By participating in the process, the community will have a say in what and/or how a project is built in the neighborhood they call home.
SUPPORT VALUE ENGINEERING OVER COST CUTTING
When money is shifted from the utility to the fashion of a project, but the overall budget does not change, the result is lopsided. Nicola Di Battista, architect and author of Towards and architecture of today, reminds us that “Architecture must not choose between technique and art, but if anything it should unite these two terms in the search for equilibrium. This is clearly hard to accomplish, but it is the only possible balance, upon which most of its credibility depends.” p. 82 It is important that throughout the process of designing and constructing a building that a balance be maintained between the budget, scope, and client’s expectations. Development teams must practice good cost management throughout the build by benchmarking and adjusting incrementally. This process will ensure that the most value is gained for each dollar, rather than resorting to “cost cutting;” an uneven distribution of capital that results in a building that will fail to perform as it was originally intended while simultaneously failing to clear the expectation bar of both the buyer and the user; often two sides of the same coin.
INCLUSIONARY ZONING
There is a history of federal, state, and municipal governments using zoning as a vehicle to steer development to accomplish governmental goals for our built environment using private sector capital. This practice has been useful in adding privately owned public spaces (POPs) like building plazas, parks, and affordable housing. It can and should expand. In New York City, Mandatory Inclusionary Housing (MIH) is a zoning tool created by the Department of City Planning and the Department of Housing Preservation and Development (HPD) that was enacted in 2016. Wherever MIH applies, any new building, enlargement or conversion above 10 units or more than 12,500 square feet must include a set percentage of permanently income-restricted affordable housing in an effort to create more economically diverse communities across New York City.
EXPAND THE BUILDING CODES
Developers regularly complain that new rules and regulations make it less and less affordable to build. In other words, they imply that the impact on their profits make the venture not worth the risk. This flies in the face of ever increasing rules and regulations over the last 100 years that are still accommodated in new developments that yield significant ROI’s for their investors. It isn’t that the developer can’t afford it, it is that they don’t want to take the time and energy to find out how to amortize these items into the purchase price and/or create the necessary draw to justify the increased costs. This is business as usual. If it ain’t broke, why fix it?
Like newer energy laws regarding the reduction in carbon emissions that focus on energy performance, there should also be codes focused on other types of performance. This includes cyclical materiality, utility isolation, equipment redundancy, and operational excellence.
Architects must involve themselves in advocating for the modification of building codes so that the code minimum will go beyond health, safety and wellness. It is an architect’s ethical responsibility to the people whose buildings he is involved in the production therein.
PRE & POST-OCCUPANCY EVALUATION
Architects are in position to speak with the building maintenance staff of a comparable product as a part of the design process to ensure the program will support building performance and longevity. Users of large multi-family residential buildings can also be surveyed for the good, the bad, and the ugly of their experiences in these types of buildings. This pre-occupancy evaluation adds value to the property that can be amortized into the dollars per square foot of the sale price, improves their public reputation, and the importance attributed to the profession above and beyond the hill of aesthetics that they are all-too-often prepared to die on.
A similar process, the post-occupancy evaluation, occurs at the end of construction after users have begun inhabiting the building and are in a position to attest to what worked and what did not. This is best performed no less than one-year after full occupancy. The information gathered helps architects understand the needs of a building, including: maintenance, operations, and future capital improvements for the duration of the structure. And architects can bake pre- and post-occupancy evaluations into their fees. This will not only increase the user performance of buildings, it will transfer knowledge from one development to the next forcing an evolution of these types of properties. This would not only lead to more user friendly, flexible, and incrementally upgradeable buildings, it would ensure an evolution in building performance and an increased expertise in those residential architects’ own work. This is information they can capitalize on with future clients. Without it, architects gain no knowledge of what worked and what didn’t.
INCREASE QUALITY CONTROL
Aside from prefabricated (modular and panelized) homes built in climate-controlled factories, which account for less than 4% of America building stock, the vast majority of buildings are assembled on site by human hands from components that are small enough to fit on the back of a flat bed trailer or delivered via a concrete mixing truck. Unfortunately, this makes it difficult to ensure a consistently high level of quality. As Rem Koolhaas famously quipped during a panel at the Venice Biennale, “Buildings are prototypes that never go into production.” There is no reason construction can’t be broken down into large chunks. By manufacturing kitchens and bathrooms as pre-built units that “plug-in” to site-built frames, quality control can be increased while simultaneously lowering labor costs. And yet, this type of cost-effective innovation is ignored. No doubt it is a combination of the fear of being first, reliable data, and/or construction teams unwillingness to leave their comfort zone. To date, there are plenty of case studies that attest to its viability. We simply need more press and more contractors willing to learn these new ways if we want to increase quality and extend the life of our buildings.
USE BRANDING AS A FORM OF ACCOUNTABILITY
Harvesting developers brand and sell the dream, but not themselves, as this would not allow them to run roughshod over the process and stay off the public's radar in general. As a result, owners/shareholders are unaware of a developer's track record. This behavior serves to tarnish the name of good developers with good intentions. Those who take pride in their work and/or want to be recognized for their efforts will ensure their name is attached to the product not hidden behind LLCs and shell companies.
Developers should be required to brand their properties with their credentials, like all other consumer products. This way people know what to expect from these brands and can hold the developers accountable. By default, this branding will set a bar for those looking to top their competition and corner as much of the market as they can, not unlike what Toyota has done with cars or Apple with smartphones. Trade magazines and websites will catalog the results of brand performance, like Consumer Reports or PCMag, for example, making it harder for the charlatans and sorcerers to find buyers and survive a professionalized game.
DESIGN FOR MAINTENANCE
As soon as a building is built, it starts falling apart. Physics never stops, but we can retard the process. According to Stephen Cairns and Jane M. Jacobs, “We act against these incremental endings by way of building maintenance.” p. 41 While this may increase the initial cost of the building, there is no doubt that buyers would be willing to absorb these amortized costs knowing that they, or their heirs, will not be subject to painful assessments down the line. Deferred maintenance is tantamount to neglect as the deterioration to a building is exponential when it is not tended to. And the cost of said maintenance benefits from being proactive rather than reactive. Consider the quarterly washing of windows or the required “close-up” inspection of facades for New York City’s facade inspection safety program (FISP) every 5-years. The difference in construction costs between engineering the parapets at the roof to support a swing stage hook suspended scaffold for the life of the building versus not could be a fraction of the cost to pay a vendor to build an elaborate temporary contraption on your roof to clear the parapets with outriggers for dropping a similar suspended scaffold over the side the building just once.
BUILD TO LAST
Let’s be clear, all the money in the world won’t replace our planet once we’ve gone too far. A poorly built building, no matter how much tinkering, will not last. So, when we build new, these buildings must be built to last. This starts with using more durable materials that will either not degrade so quickly and/or not lose their value once the building has reached the end of its life so that it can be repurposed.
Built to last means also means built to change. This includes baking in flexibility, upgradeability, and deconstructability. Thinking about how to design for access to building infrastructure decades after substantial completion is rarely taught, if ever, in the most prestigious of architecture schools. Not only does this ensure that architects walk away from the building as soon as construction wraps so they can move onto the next, it throws away opportunities for architects to maintain a relationship with both the developer and the building’s end users.
DON’T BUILD; REBUILD
The Environmental Protection Agency (EPA) estimates that between 230 million and 600 million tons of construction and demolition debris are produced nationwide each year. More than 90% of this comes from demolition projects, while new construction accounts for less than 10%. This debris will ultimately end up in landfills, often constructed near low-income and minority neighborhoods. The methane that is released due to the decomposing waste is a potent greenhouse gas. “The methane emissions from MSW landfills in 2022 were approximately equivalent to the greenhouse gas (GHG) emissions from more than 24.0 million gasoline-powered passenger vehicles driven for one year or the CO2 emissions from more than 13.1 million homes’ energy use for one year.” as per the EPA. Thinking of our existing buildings as valuable resources that can be repurposed, rather than disposed of, we can reduce the amount of waste being produced each year that are filling our methane producing landfills, much to the benefit of the earth’s remaining life. Registered Architect and 2024 national president of the American Institute of Architects (AIA), Kimberly Dowdell, says that “With 85-95 percent of today’s buildings expected to still be in use by 2050, retrofitting existing buildings is a sustainable solution. The most sustainable building is the one that already exists. We need to understand the importance of preserving certain buildings and breathing new life into them instead of demolishing.”
IN CONCLUSION
The United Nations currently projects that by 2050, the world’s urban population will grow by 2.5 billion people. This is an addition of circa 170,000 people a day. This is equivalent to adding a city the size of Providence, Rhode Island, every day for the next 25 years. As it stands, we are in the middle of a national housing crisis with a shortage of around 4.7 million homes. We need new buildings for people to live in. Patrice Derrington, the director of the Center for Urban Real Estate (CURE) at Columbia’s Graduate School of Architecture, Planning and Preservation (GSAPP) said it best in her article on the brief history of development for Baumeister in 2019, when she posited that "...it is timely, if not urgent, that the real estate development industry undertakes a self-evaluation and critique of the fundamental methodology by which it has come to exist, and persist, as the primary mode of delivering the built environment for much of the world today." p. 42 While the path toward making change in the residential development industry is neither singular nor expeditious, there are ways forward when it is properly dissected, diagnosed, and a multimodal approach applied. Standing quietly by is not an option; we must make change. Our future depends on it.
Copyright 2025 by Christopher Alker
Most new developments are faced with leaky roofs, missing insulation, non-existent waterproofing, substandard mechanical equipment, paper thin walls, drafty windows, warped flooring, unreliable plumbing isolation valves, elevator entrapments, a lack of air circulation, underperforming mechanical systems, insufficient storage space, negative building pressure, hairline cracks, back pitched drain lines, brown outs, poor indoor air quality, improper and/or incomplete installations, poor craftsmanship, no upgrade flexibility, no consideration of maintenance…the list goes on and on. These deficiencies have resulted in frustration and thousands of lawsuits worth billions of dollars over the years. They are so common in fact that developers have learned to park cash in escrow for the sole purpose of settling with their future buyers when the time comes. In the case of 432 Park alone, the board is seeking damages in excess of $165 million, including “...the diminution in value of the building and its units.” Unfortunately, the settlements rarely cover the full cost of repairs, many of which are not discovered within the statute of limitations. The developers know this; it is a calculated risk. It is ultimately the new building owners, the residents, who collectively bear the cost of the repairs and maintenance to bring them in line with the performance standards that they thought they had paid for. Needless to say, this is both frustrating and confusing.
How and why does this happen?
Most of what we see when we look out the window today is the result of development by private investors. Carol Willis, an architectural historian and director of the Skyscraper Museum in New York City, reminds us that “Speculative buildings constitute the majority of structures in every central business district, and they represent about two-thirds to three quarters of new construction in nearly every period.” p. 155 It is important to understand that real estate is a serious business, but, contrary to popular opinion, the reasons for development problems are not limited to the often-cited ‘evil developers’ and ‘fame-hungry architects.’
The circumstances surrounding problems in building development are not too dissimilar from plane crash theory. Plane crash reconstruction experts agree that in order for an airliner to crash, many different and seemingly unrelated things must go wrong, and in a particular order, for the crash to ultimately occur. Some things are active while others are passive. Some are the failure of a system while others are acts of negligence, or worse, unethical behavior. The same is true of bad buildings.
PART 1 - THE WHY
A LOW BARRIER TO ENTRY
For most would-be developers, access to capital is the biggest hurdle. The best developers know that you don’t build a building with your own money, you build it with someone else's. With access to capital secured, becoming a developer has a low barrier to entry. According to urban development consultant, Peter H. Brown, “It is not a legally recognized profession like architecture, engineering, or law, which requires specific academic degrees and work experience to obtain licensure.” p. 26 Most US states require an easy-to-obtain real estate salesperson license to become a developer. Having the certification alone allows the developer to take up to half of the broker’s commission when acquiring the land. With the real estate license in hand; developers can crunch some numbers, purchase land, assemble a team, and get the ball rolling. Becoming an architect, on the other hand, takes no less than five years of university training at an accredited college program, a 3-year internship under the guidance of a licensed architect, the successful completion of a five-part comprehensive examination, a state registration, triennial renewals, and no less than 1-hour per month of continuing education in construction + health safety and wellness (HSW) for as long as you intend to practice, and a 2-10 year liability per project. And yet, these days, developers, not architects, are largely responsible for our built environment.
OWNERSHIP STRUCTURE
The ownership structure of a new building includes two prevailing models. Developers can either “hold” the property for a long term return on investment (ROI), or they can sell, aka “harvest,” the property for an immediate ROI. For those developers turned owner/operators who intend to hold and rent out their buildings for the highest possible rents their goal is to lower maintenance and operating costs while extending the life of their buildings over time; this is the ‘total cost of ownership.’ These developers will typically use better vendors, higher quality and more durable materials, and design with upgrades, energy efficiency, and adaptability in mind. This attempt to slow the depreciation of the asset and extend its life allows the owner to keep a steady stream of passive income in the form of rent while the land itself increases in value and the property management fees, depreciation, and other expenses are tax write-offs. Skyscraper pioneer, Cass Gilbert, once said that a rental property is “A machine that makes the land pay.” p. 19 Willis This is true, but does not absolve an owner/operator of risk. These types of owners may face vacancies, difficult tenants, regulatory hurdles, and market fluctuations. And the cherry on top; ongoing liability.
For those developers who intend to harvest and sell out their buildings for the highest possible market prices as soon as feasible, their goal is to lower upfront costs and maximize their immediate ROI. Those harvesting properties are subject to the cycles of the market and may face high transaction costs and taxes. They benefit from not needing to maintain a full roster of tenants or maintain the property in the long run as the asset depreciates alongside that ongoing liability previously mentioned. No doubt it is more costly and difficult to make changes to a building after it has been built, but developers who intend to harvest are not concerned with these future changes since they will not be in the picture for long. And because these accommodations are not required by the building code, they are rarely implemented. The rub is when this strategy is employed, and the developer fails to hit the market before the wave crashes, he is left holding the bag on a substandard product. The cracks begin to show; pun intended.
SAVING MONEY
There are more than a few cases of developers and/or their contractors looking to save a dime and a minute by omitting acoustic barriers, thermal insulation, and/or waterproofing so that they can close walls faster while saving on materials costs despite the ramifications. The mechanical equipment, for example, need not last as long since the developer won’t be around when the equipment fails in the short term or depreciates more rapidly in the long term. Some developers are keenly aware that many buyers will end up renovating as soon they take ownership no matter what he installs. The unit purchase isn’t about the unit aesthetics, it’s about the prestige of the address, the amenities, and the views. Developers will outfit units with inexpensive finishes, fixtures, and equipment so as to not cut into their profits. This means more material will end up in a landfill when the “builder’s grade” kitchens and bathrooms are superseded by the new owners’ exotic marble and plumbing fixtures imported from distant lands. Developers are also known to underestimate the operating costs of the property, naively or purposefully, running the building with a skeleton crew to minimize carrying costs until the building sells out and the day-to-day operations are no longer their problem.
STARTING THE CLOCK, SAVING TIME, & BEING FAST
Most developers start with some of their own money, while the balance is a combination of bank loans, private investor equity, and government subsidies with strings of some sort. This is known as their “capital stack.” As soon as the meter starts running, developers are up against the clock to minimize interest, repay construction loans, start selling units, and get their product on the market at the right time. When time is money and money is risk; developers who save time, reduce their risk.
One practice is to prioritize the construction of dwelling units at the expense of common areas and amenities in a building. A developer is not legally obligated to finish these areas before he can obtain a temporary certificate of occupancy (TCO). With a TCO in hand, the developer can begin repaying his construction loan from the proceeds of unit sales. Unfortunately, this practice almost ensures that the CO is rarely obtained as new permits are opened by residents seeking to perform renovations of their own, whenever they are not satisfied with the developers taste in finishes, but before the sponsor has closed out all his DOB paperwork.
Obtaining the TCO starts the 6-year clock on the statute of limitations for claims against a condo sponsor for breach of contract and/or breach of fiduciary duty claims. Individual owners cannot make a claim against a developer for problems with common areas (lobby, gym, the elevator, roof deck, etc.), only for problems within their own units. However, the building’s Board of Directors, composed of unit owners elected by the residents, does have the power to make these claims.
CONTROL THE BOARD
The Board of Directors has a fiduciary duty to protect the interests of the unit owners, but, In a new building, the sponsor of the development controls the Board for a period of time, appointing members. The sponsor-appointed members may not be motivated to fix problems that expose defects in the construction of the building, because they would have to dig into their own coffers to address them or at least defend themself against claims. A building board typically takes over from the sponsor when a certain percentage of units are sold, usually around 50%. Until the Board composed of owners have control of the building, their options are limited. In the meantime, it is in the developer’s best interest to run down the clock.
SPACE IS MONEY
Given that the more square footage that can be sold will yield more profit for the developer, it is in his best interests to maximize the amount of sellable floor area and at the highest rate per square foot the market will allow. This results in two practices.
The first is taking advantage of all allowable zoning floor area (ZFA) permitted. Each building lot falls within a particular zoning district. These districts specify not only the allowable uses, but the maximum allowable buildable area expressed as a multiplier of the lot area, aka floor area ratio (FAR), inclusive of the bulk regulations for that property. As these bulk regulations use a series of limiting heights and setbacks along the “public way” (i.e. sidewalks), the forms that fill out the invisible limits set by the zoning resolution result in the all-too-familiar Ziggurats seen around town.
The second is the aversion to dedicating any more area to amenity spaces, storage, and/or mechanical back-of-house spaces than absolutely necessary for the building to function properly. This includes the storage of attic stock finish material (carpet, wood flooring, etc.), resident packages, or space to retain garbage until it can be set out for street collection on trash day. It is only after the Board of Directors has been elected, and the building Resident Manager/Superintendent has an audience who cares to listen, will it become painfully clear that there is not nearly enough space for the day-to-day operations of the building and the original architect’s peers (read, “janitors”) will be employed to make the necessary modifications when feasible.
THE BESPOKE NATURE OF BUILDINGS
Irrespective of the ownership structure, the approach to development has traditionally focused on economies of scale and cookie cutter repetition. The abundance of skilled labor and muscle memory churned out a fairly consistent product. And even as the industrial revolution ushered in new materials and construction techniques, you can still see carbon copy products up through the late 60’s. Development in suburban areas have continued to utilize this repetitious method for smaller stick-frame single-family dwellings, warehouses, strip malls, gas stations, 5-over-1 apartment blocks, and data storage centers. But this practice fell off a cliff in city centers during the ‘70s, along with construction in general during hard economic times. In the early ‘80s, while the economy overcorrected, real estate speculation increased in popularity.
These days, multi-family residential buildings are mostly bespoke. Aided by the introduction of affordable PC-based software, like AutoCAD in 1982, computer aided design (CAD) became accessible to a much wider audience. Larger and more complicated buildings could be planned and adjusted throughout the process as needed, far quicker than would be possible by a team of architects drafting by hand. And developers discovered that people are drawn to the new and novel as opposed to the tried and true. Unfortunately, this new approach eradicated the trial and error method previously responsible for working out the design and construction kinks in a building typology necessary to meet the needs of the users. As an added side effect, this has led to the inability of builders to hone their craft due to ever changing forms and building envelope innovations. Trade labor is expected to construct more complicated buildings without the benefit of practice. 432 Park Avenue’s gravity defying “ultra thin” approach to residential development has proven to be particularly fraught with problems. The purveyors of the zoning resolution could not have anticipated the audacity of starchitects, ambitious structural engineers, nor the availability of technology to support their fever dreams. And let’s not forget the zoning loophole whereby mechanical spaces on each floor were not counted towards the maximum allowable zoning floor area (ZFA) that the developers used to increase the height of the building for the sake of generating multi-million dollar views without penalty given their “as of right” interpretation.
LITTLE TO NO MAINTENANCE CONSIDERATIONS
Buildings are typically built to the minimum standards of the building code as doing otherwise could potentially reduce profits. These codes focus on structural integrity, life safety, and energy efficiency. They rarely address material quality, building performance, or maintenance considerations. Water, in all three of its states, combined with deferred maintenance, are the most effective at shortening the lifespan of buildings. In order to effectively counteract these persistent forces, buildings must be designed with these in mind.
LACK OF FEEDBACK
Lack of input by the people who will be maintaining the building during the design phase leads to buildings that cannot possibly perform. Some architects claim that capturing this data as a part of the design process is an “additional service” which is not performed simply because they have not been paid to do so. This is despite the countless overtime hours architects pour into other aspects of the project, namely formal investigations and articulations, that they are rarely, if ever, compensated for. It makes not sense as to how these critical steps can be cleaved from the design process any more than a surgeon proceeds with surgery prior to the problem that precipitated it has been diagnosed using available tools at hand. In short, this leads to harm both from a quality of life standpoint and from a financial perspective. Ignorance is no excuse. “An object that is designed to harm people cannot be said to be well-designed, no matter how aesthetically pleasing it might be,” p. 20 according to Mike Monteiro, UX designer and author.
THE WRONG TEAM
For the development of any project, it is only as good as its team. Even when the developers have the best intentions in mind, using consultants and contractors that are not the right fit for the size and scope of the project, do not have experience, and/or have poor track records are a perfect recipe for problems in the development of a project. This is more typical of first-time developers who are in over their heads, out of their depth, and/or are convinced they are saving a dollar by going with the lowest bidder rather than the best value. Those that do not carry the necessary experience, expertise, trust, or buy-in from the group will result in dangerous oversteps by one party or another beyond the reasonable boundaries of their role, and can have potentially disastrous implications for all parties involved. We need only look at the concrete cracks in the facade of 432 Park Avenue, the leaning tower of 161 Maiden Lane, and the leaks of 520 West 28 Street for examples of how things can careen off the rails.
OUTSIDE-IN
Unlike office buildings, which are compact service cores surrounded by open work space designed from the inside-out with efficiency in mind, residential developers design from the outside in. The FARchitecture mass is skinned, articulated, rendered and modeled for preliminary approval by the politician, building department, landmarks commission, and/or community Board. The brand ambassador, Marty Neumeier, says “For many products, the package is the branding.” p. 90 Architecture is private art that is displayed publicly; the image of the building is the first thing that community members and politicians latch onto. Once this hurdle is cleared and the entitlements are secured, the unit mix, amenities, structure, and mechanical/electrical/plumbing (MEP) systems are shoe-horned into the rigid envelope. This frustrating and complicated process must also be done with time and budget in mind. As you can imagine, it is difficult to work out all the kinks within the limited construction window.
FASHION OVER UTILITY
The smart developers tend to innovate at the edges. They do not normally take huge risks. They do their research and use any available data to support that what they are doing will be well received. Those developers who are willing to take big risks are either gambling, or they know something everyone else does not, i.e. the risk is calculated. If he succeeds, his peers will follow. Such was the case with nightlife icon Ian Schrager turned hotelier who employed the Pritzker Prize winning Swiss design firm, Herzog and De Meuron, in collaboration with Architect of Record (AOR) Handel Architects, to design a luxury condo at 40 Bond Street, Handel’s first. Once completed, it began selling out at a record setting $2,800 per square foot. Some users prefer couture living; the market has spoken. With success stories like this to provide confidence to their clients, architects have been empowered to make things that not only stand out from the crowd, but cost a pretty penny to make.
Real estate developers have discovered the power of design to differentiate their products in a highly competitive real estate market. According to Stephen Cairns and Jane M. Jacobs, authors of Buildings Must Die: A Perverse View of Architecture, “Under capitalism, architecture’s productive attributes - as creative expression and material form - are at the same time commodities.” p. 54 Where fashion and utility were previously relegated to separate buckets, fashion as a market differentiator has its own utility in the eyes of the developer looking to best his competition. Architects have found a foothold in providing differentiation for their developer clients. In the words of Coco Chanel, "Fashion is architecture: it is a matter of proportions."
But it is important to understand that fashion is expensive. There is a history of people spending money on sex, glamor, beauty, and wonderful packaging. This is not lost on the savvy developer who works with his design, marketing, and sales teams to ensure that the finishes, fixtures, and equipment on display in the showroom and glossy sales brochures are enticing. Buyers are drawn in by the glamor of it all, but they do not always consider the utility until their life savings is tied up with the bank. According to architecture critic Stephen Bayley, “Tom Wolfe coined the brilliant term ‘kerbflash’. Kerbflash suits business clients in pursuit of visual equity, but may be less well-adapted to the needs of real people.” p. Xi
Architects reject tried and true methods in favor of novelty and “originality” regardless of the potential performance and/or maintenance pitfalls that may result. And Mr. Neumeier reminds us that, “Anything new, by definition, is untried, and therefore unsafe.” p. 74 There is a function to the fashion, but it is often prioritized at the expense of the more practical utility of a building designed to perform for its users and against its surrounding environment. The ultra thin runway model who has sacrificed her health for the sake of beauty is apropos. The function of height that has beget the “ultra thin” building typology is intimately tied to the views that can be sold at a premium despite the risks to structural integrity. When Louis Sullivan said form follows function, he meant that the form should develop purpose. When the purpose of a building is an ROI, form follows finance. Most of the time, sky needles aside, these “unsafe” things are non-structural failures like: energy performance, passive solar orientation, spatial inflexibility, roof leaks, and vertical circulation limitations. The delicious undulating slab edges devoid of thermal breaks at Studio Gang’s award-winning Aqua Tower in Chicago are a perfect example of how to use architectural form to entice buyers while sacrificing energy performance.
GREED & MAXIMIZE RETURNS
With greater risk comes greater reward; this is known as the ‘risk premium.’ If you want the safest investment, you buy treasury bonds. If you want to increase your chances of a higher return, you might consider the stock market. The average return on the stock market is a lumpy 10% per year. Now juxtapose this against the potential ROI of developing a property. In the early 80s, deregulation blew open the doors for real estate as a vehicle for big and fast returns in the 90s. Today, rates of return on harvesting a property are expected to be 12% or more. This means making real money in less time. It is no wonder as to why the construction industry accounts for approximately 4.5% of America's GDP. Architect and author Matthew Soules states, “Buildings simultaneously fulfill three elemental roles: providing shelter, manifesting culture, and embodying wealth…Within finance capitalism, the function of buildings as profit-generating investment assets rises to such significance that in many instances it overshadows the historically more prominent roles of shelter and culture.” p. 23
INTOLERANT COMMUNITIES
Let’s be honest, when the public is in support of a new development, they do not typically attend Community Board meetings. These gatherings are filled with the NIMBYists (‘not-in-my-backyard’) who fear change and are concerned that something will either devalue their property or the change to the neighborhood demographics will expedite gentrification. What many attendees fail to grasp is that this does not stop a developer from moving ahead with the “As of Right” entitlements of the land. As of Right is a term used in property development to describe a proposed development that complies with all applicable zoning codes without any special exceptions. Members of the community often confuse “use value” with “exchange value.” The land in question is unlikely to be purchased by the city and turned into a dogpark, nor was it zoned vacant. Without community engagement, or worse, community intolerance, projects move forward without their input.
All of the above collectively amounts to the perfect storm, but this does not mean that we have no way to modify the course of real estate development in our own backyard.
How do we combat this situation?
There is no silver bullet to recalibrate the current course of residential development in American cities, but there are several different angles from which we should consider addressing the deficiencies in an effort to make real change.
PART 2 - THE FIX
RAISE AWARENESS
Raising awareness is the first way to hold development teams accountable. An educated consumer who can see through the smoke and mirrors will be more careful about what they buy, where they buy it, and from whom. Those who are pushing substandard products will be called out, or at least be left to change their ways if they want to continue making big money in a reliable way. This includes talking about it, writing about it, and injecting our culture with some cold hard facts. Staying silent will only perpetuate the problem.
RAISE THE BARRIER TO ENTRY
If the developer was more interested in architecture and the architect more interested in finance a balance between these two considerations can be struck. Raising the barrier to entry for developers on one hand and empowering architects with more access to capital on the other, so they have “skin in the game,” will go a long way in improving our built environment in general and our residential buildings in particular. Architect-led development is one step in this direction.
WARRANTIES, ECA’S, & THE STATUTE OF LIMITATIONS
It is important to know your rights. Developers should not presume that they are free and clear of their obligations once you have signed on the dotted line. In fact, the exact opposite is true. They must be held accountable by whatever means are available to do so.
A residential offering plan is a detailed, legally required document that a developer submits to the Attorney General's office before selling units in a new condominium building. It provides prospective buyers with comprehensive information about the building's physical characteristics, finances, governance, and the terms of sale. The plan is essential for the developer to get approval to sell units and helps ensure buyers receive full and accurate disclosures. A failure on the part of the developer to honor the offering plan and/or failure to disclose something significant is a breach of contract that a buyer can use to take legal action against them.
To protect themselves, buyers and the elected Board of Directors must recognize that a typical construction warranty is a one-year timeline from substantial completion. This is typically the date the TCO is received. The Board should engage a third-party architect and/or engineer to conduct an existing conditions assessment (ECA) to identify all building deficiencies before the six-year runway on the statute of limitations expires. This document is a powerful road map for bringing the building in line with the offering plan.
LEGAL ENFORCEMENT & LEMON LAWS
Herb Emmerman of EMS/Garrison, LLC says, ”Real estate is a point of purchase sale, so buying real estate is very similar to buying a luxury automobile at a showroom.” P.161, Brown You can test drive a car, but you can’t test drive an apartment. In fact, most people spend more time test driving a new car than visiting an apartment before purchasing it. And this is often most people’s largest investment. It is months, sometimes years, afterwards that performance issues rear their ugly head and the purchaser discovers that what they thought they had bought and what they actually bought are two different things altogether.
The first “Lemon Law” was a direct result of an accumulation of consumer complaints from folks who had purchased defective motor vehicles decades ago. In 1975, these complaints culminated in the creation of the Magnuson-Moss Warranty Act, commonly known as the Federal Lemon Law. This law was designed to protect consumers from defective products.“From the developer’s viewpoint, real estate is…first and foremost it is “product” and real estate development is “product development.” P. 62, in the words of Peter Brown. If condos, coops, and condops are in fact consumer products, albeit bespoke rather than mass-produced, it would seem to reason that they too should be protected by similar laws. These laws can be directly tied to the offering plan. Where a developer fails to fulfill their obligations as outlined in the agreement, the buyer is entitled to sue for damages or other remedies due to the breach. We can institute more stringent penalties under the law for developer lawsuits, especially for repeat offenders.
NO MORE TCOs
The current statute of limitations on a breach of contract claim starts at the date of the first sale, but would be more effective if it began with the last. By eliminating TCOs altogether and not permitting buildings to be occupied until they are fully complete with a full certificate of occupancy, we will ensure buildings are better planned, and defects reduced prior to occupation.
INCENTIVIZE HOLD V. HARVEST
Despite what many may think, not all developers are evil greedy liars looking to destroy the communities. In fact, some of the best known developers build within their own communities as they are most attuned to the wants and needs of the area. We must recognize the good ones, engage them in a conversation, collaborate with them, and incentivize them to hold onto their properties for the long term. This may come in the form of additional buildable floor area for their projects, tax credits for performance standards, and the right of first refusal on city land development opportunities among other things. When the feedback is incorporated, it attracts more potential users. By participating in the process, the community will have a say in what and/or how a project is built in the neighborhood they call home.
SUPPORT VALUE ENGINEERING OVER COST CUTTING
When money is shifted from the utility to the fashion of a project, but the overall budget does not change, the result is lopsided. Nicola Di Battista, architect and author of Towards and architecture of today, reminds us that “Architecture must not choose between technique and art, but if anything it should unite these two terms in the search for equilibrium. This is clearly hard to accomplish, but it is the only possible balance, upon which most of its credibility depends.” p. 82 It is important that throughout the process of designing and constructing a building that a balance be maintained between the budget, scope, and client’s expectations. Development teams must practice good cost management throughout the build by benchmarking and adjusting incrementally. This process will ensure that the most value is gained for each dollar, rather than resorting to “cost cutting;” an uneven distribution of capital that results in a building that will fail to perform as it was originally intended while simultaneously failing to clear the expectation bar of both the buyer and the user; often two sides of the same coin.
INCLUSIONARY ZONING
There is a history of federal, state, and municipal governments using zoning as a vehicle to steer development to accomplish governmental goals for our built environment using private sector capital. This practice has been useful in adding privately owned public spaces (POPs) like building plazas, parks, and affordable housing. It can and should expand. In New York City, Mandatory Inclusionary Housing (MIH) is a zoning tool created by the Department of City Planning and the Department of Housing Preservation and Development (HPD) that was enacted in 2016. Wherever MIH applies, any new building, enlargement or conversion above 10 units or more than 12,500 square feet must include a set percentage of permanently income-restricted affordable housing in an effort to create more economically diverse communities across New York City.
EXPAND THE BUILDING CODES
Developers regularly complain that new rules and regulations make it less and less affordable to build. In other words, they imply that the impact on their profits make the venture not worth the risk. This flies in the face of ever increasing rules and regulations over the last 100 years that are still accommodated in new developments that yield significant ROI’s for their investors. It isn’t that the developer can’t afford it, it is that they don’t want to take the time and energy to find out how to amortize these items into the purchase price and/or create the necessary draw to justify the increased costs. This is business as usual. If it ain’t broke, why fix it?
Like newer energy laws regarding the reduction in carbon emissions that focus on energy performance, there should also be codes focused on other types of performance. This includes cyclical materiality, utility isolation, equipment redundancy, and operational excellence.
Architects must involve themselves in advocating for the modification of building codes so that the code minimum will go beyond health, safety and wellness. It is an architect’s ethical responsibility to the people whose buildings he is involved in the production therein.
PRE & POST-OCCUPANCY EVALUATION
Architects are in position to speak with the building maintenance staff of a comparable product as a part of the design process to ensure the program will support building performance and longevity. Users of large multi-family residential buildings can also be surveyed for the good, the bad, and the ugly of their experiences in these types of buildings. This pre-occupancy evaluation adds value to the property that can be amortized into the dollars per square foot of the sale price, improves their public reputation, and the importance attributed to the profession above and beyond the hill of aesthetics that they are all-too-often prepared to die on.
A similar process, the post-occupancy evaluation, occurs at the end of construction after users have begun inhabiting the building and are in a position to attest to what worked and what did not. This is best performed no less than one-year after full occupancy. The information gathered helps architects understand the needs of a building, including: maintenance, operations, and future capital improvements for the duration of the structure. And architects can bake pre- and post-occupancy evaluations into their fees. This will not only increase the user performance of buildings, it will transfer knowledge from one development to the next forcing an evolution of these types of properties. This would not only lead to more user friendly, flexible, and incrementally upgradeable buildings, it would ensure an evolution in building performance and an increased expertise in those residential architects’ own work. This is information they can capitalize on with future clients. Without it, architects gain no knowledge of what worked and what didn’t.
INCREASE QUALITY CONTROL
Aside from prefabricated (modular and panelized) homes built in climate-controlled factories, which account for less than 4% of America building stock, the vast majority of buildings are assembled on site by human hands from components that are small enough to fit on the back of a flat bed trailer or delivered via a concrete mixing truck. Unfortunately, this makes it difficult to ensure a consistently high level of quality. As Rem Koolhaas famously quipped during a panel at the Venice Biennale, “Buildings are prototypes that never go into production.” There is no reason construction can’t be broken down into large chunks. By manufacturing kitchens and bathrooms as pre-built units that “plug-in” to site-built frames, quality control can be increased while simultaneously lowering labor costs. And yet, this type of cost-effective innovation is ignored. No doubt it is a combination of the fear of being first, reliable data, and/or construction teams unwillingness to leave their comfort zone. To date, there are plenty of case studies that attest to its viability. We simply need more press and more contractors willing to learn these new ways if we want to increase quality and extend the life of our buildings.
USE BRANDING AS A FORM OF ACCOUNTABILITY
Harvesting developers brand and sell the dream, but not themselves, as this would not allow them to run roughshod over the process and stay off the public's radar in general. As a result, owners/shareholders are unaware of a developer's track record. This behavior serves to tarnish the name of good developers with good intentions. Those who take pride in their work and/or want to be recognized for their efforts will ensure their name is attached to the product not hidden behind LLCs and shell companies.
Developers should be required to brand their properties with their credentials, like all other consumer products. This way people know what to expect from these brands and can hold the developers accountable. By default, this branding will set a bar for those looking to top their competition and corner as much of the market as they can, not unlike what Toyota has done with cars or Apple with smartphones. Trade magazines and websites will catalog the results of brand performance, like Consumer Reports or PCMag, for example, making it harder for the charlatans and sorcerers to find buyers and survive a professionalized game.
DESIGN FOR MAINTENANCE
As soon as a building is built, it starts falling apart. Physics never stops, but we can retard the process. According to Stephen Cairns and Jane M. Jacobs, “We act against these incremental endings by way of building maintenance.” p. 41 While this may increase the initial cost of the building, there is no doubt that buyers would be willing to absorb these amortized costs knowing that they, or their heirs, will not be subject to painful assessments down the line. Deferred maintenance is tantamount to neglect as the deterioration to a building is exponential when it is not tended to. And the cost of said maintenance benefits from being proactive rather than reactive. Consider the quarterly washing of windows or the required “close-up” inspection of facades for New York City’s facade inspection safety program (FISP) every 5-years. The difference in construction costs between engineering the parapets at the roof to support a swing stage hook suspended scaffold for the life of the building versus not could be a fraction of the cost to pay a vendor to build an elaborate temporary contraption on your roof to clear the parapets with outriggers for dropping a similar suspended scaffold over the side the building just once.
BUILD TO LAST
Let’s be clear, all the money in the world won’t replace our planet once we’ve gone too far. A poorly built building, no matter how much tinkering, will not last. So, when we build new, these buildings must be built to last. This starts with using more durable materials that will either not degrade so quickly and/or not lose their value once the building has reached the end of its life so that it can be repurposed.
Built to last means also means built to change. This includes baking in flexibility, upgradeability, and deconstructability. Thinking about how to design for access to building infrastructure decades after substantial completion is rarely taught, if ever, in the most prestigious of architecture schools. Not only does this ensure that architects walk away from the building as soon as construction wraps so they can move onto the next, it throws away opportunities for architects to maintain a relationship with both the developer and the building’s end users.
DON’T BUILD; REBUILD
The Environmental Protection Agency (EPA) estimates that between 230 million and 600 million tons of construction and demolition debris are produced nationwide each year. More than 90% of this comes from demolition projects, while new construction accounts for less than 10%. This debris will ultimately end up in landfills, often constructed near low-income and minority neighborhoods. The methane that is released due to the decomposing waste is a potent greenhouse gas. “The methane emissions from MSW landfills in 2022 were approximately equivalent to the greenhouse gas (GHG) emissions from more than 24.0 million gasoline-powered passenger vehicles driven for one year or the CO2 emissions from more than 13.1 million homes’ energy use for one year.” as per the EPA. Thinking of our existing buildings as valuable resources that can be repurposed, rather than disposed of, we can reduce the amount of waste being produced each year that are filling our methane producing landfills, much to the benefit of the earth’s remaining life. Registered Architect and 2024 national president of the American Institute of Architects (AIA), Kimberly Dowdell, says that “With 85-95 percent of today’s buildings expected to still be in use by 2050, retrofitting existing buildings is a sustainable solution. The most sustainable building is the one that already exists. We need to understand the importance of preserving certain buildings and breathing new life into them instead of demolishing.”
IN CONCLUSION
The United Nations currently projects that by 2050, the world’s urban population will grow by 2.5 billion people. This is an addition of circa 170,000 people a day. This is equivalent to adding a city the size of Providence, Rhode Island, every day for the next 25 years. As it stands, we are in the middle of a national housing crisis with a shortage of around 4.7 million homes. We need new buildings for people to live in. Patrice Derrington, the director of the Center for Urban Real Estate (CURE) at Columbia’s Graduate School of Architecture, Planning and Preservation (GSAPP) said it best in her article on the brief history of development for Baumeister in 2019, when she posited that "...it is timely, if not urgent, that the real estate development industry undertakes a self-evaluation and critique of the fundamental methodology by which it has come to exist, and persist, as the primary mode of delivering the built environment for much of the world today." p. 42 While the path toward making change in the residential development industry is neither singular nor expeditious, there are ways forward when it is properly dissected, diagnosed, and a multimodal approach applied. Standing quietly by is not an option; we must make change. Our future depends on it.
Copyright 2025 by Christopher Alker