Why Municipalities’ Rules are Preventative (LA 1363)
Why Municipalities’ Rules are Preventative (LA 1363)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill DeWit:
Howdy.
Steven Jack Butala:
Welcome to the Land Academy Show, Entertaining Land Investment Talk. I’m Steven Jack Butala.
Jill DeWit:
And I am Jill DeWit, broadcasting from pretty Park City, Utah. Had to think about that for a… I almost said Park Lake City, I don’t know where I got that. Park City.
Steven Jack Butala:
Salt Lake City and Park City.
Jill DeWit:
I know.
Steven Jack Butala:
It’s like a combined.
Jill DeWit:
Well, that true. I’m all confused.
Steven Jack Butala:
Today Jill and I talk about why municipalities rules, their rules, are preventative. I’ve never talked to anyone in my life that said, “You know, that municipality, the city of Park City or the county of Summit County, they’re doing a good job.”
Jill DeWit:
They are. They’re helpful.
Steven Jack Butala:
Yeah. They help us.
Jill DeWit:
They want me to prosper.
Steven Jack Butala:
I wanted to split that property. They let me split it.
Jill DeWit:
Yeah, no problem. I just had to do these forms. What the heck?
Steven Jack Butala:
It’s not just… We’ll get to it in a second.
Jill DeWit:
Okay.
Steven Jack Butala:
Before we get into it, let’s just take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Eric wrote… Is that the title?
Steven Jack Butala:
Yeah.
Jill DeWit:
Okay. It says, “impulse bought data.”
Steven Jack Butala:
“I impulse bought data from Leelanau County, Michigan.” How’s the water? Just joking.
Jill DeWit:
Okay. And it goes on to say, “I usually let the data tell me where to mail. But after a recent trip to Leelanau County, Michigan, I found myself poking around the data on RealQuest. Next thing you know, at the accept button, I started looking a lot like a Snickers bar at the grocery checkout. Hello everyone. I’m now the proud owner of a 1000 ownership records. The County indicators looked reasonable when plugged into Steve’s red, green, yellow test for rural vacant land, slightly high, active, two total properties at 1.23%, but still within reason. I don’t have any experience in that area. It’s surprisingly expensive at 10 to $20,000 an acre for low acreage property, low acreage properties, lots of beautiful lakes around there. Ideally I’d find a funding partner, but I don’t want to scare them off with the high dollar, low acreage properties in a lesser known market. Also anyone else who has impulse bought data? I blame Steve and Jill for making it so easy.”
Steven Jack Butala:
If I had a nickel for every time I impulse bought data. Some people buy impulse jewelry, some people have gambling issues, drinking issues, I have data issues. And I have bought, impulse bought data in this state. Leelanau County is Traverse City. And if you’re a data person or a Michigan person or you’re into this at all, there’s a lot of cities, municipalities, a lot like Traverse City, where the county split. Traverse City is made up of two counties, Leelanau is to the North that runs just a ton of waterfront property everywhere, which is why it’s so expensive. And then there’s a different county. I think it’s Grand Traverse County to the South. So, if you drove through there and didn’t buy data, this isn’t for you. I bought all kinds of data on this trip. We’ve been in Park City for almost two weeks. There’s lots of data that I purchased and we will send mail out just based on driving around. So don’t worry about it.
Jill DeWit:
I would argue though, it’s still better. Buying data at 10 cents is better than sending it out at 55, or whatever it is.
Steven Jack Butala:
Oh, gosh, yeah.
Jill DeWit:
So you’re okay.
Steven Jack Butala:
The real tragedy would be if you-
Jill DeWit:
Mailed them all.
Steven Jack Butala:
if you impulsively did a mailer and price it wrong.
Jill DeWit:
Right.
Steven Jack Butala:
You bought the dress in the window instead of walking in, see what’s on the sales rack before you bought the trust in the window. What do you do? You just buy the dress in the window and that’s it?
Jill DeWit:
I’ll have to be honest. Sometimes I do.
Steven Jack Butala:
Sometimes I do, too.
Jill DeWit:
Do you know why? Because I’m very picky about it. You know what? I’m picky about property though, too.
Steven Jack Butala:
Yeah, me too.
Jill DeWit:
I don’t buy everything. I buy the right property.
Steven Jack Butala:
Traverse City is a, again, we call it a couple of days ago, it’s a zoom city. And so this 10,000 to $20,000 per acreage, that’s not going to scare anybody at all. In fact, you’re going to find people who would probably rather spend more on that, then the smaller, 100, $200 an acre desert property. There’s a lot more uses for-
Jill DeWit:
If it’s worth.
Steven Jack Butala:
If it’s worth it.
Jill DeWit:
If it’s worth 30,000 an acre, buying it at 10 or 20 or buying it at 10 is good. So if it’s worth 10 an acre, we want to buy it at two or three.
Steven Jack Butala:
So, and don’t be afraid about the red, green, yellow test. So traditionally, not so much anymore, but traditionally these zoom cities or second home cities or I grew up going to Leelanau County as a child in my grandparents’ cabin, believe it or not, so those types of properties usually they have historically had longer days on market. So the red green, yellow test is not… is going to come out… if you just get done doing like Warren, Michigan, out of Detroit, the red green, yellow test is going to be… it’s going to pass with flying colors. And if you line that up against Warren and Leelanau County or Traverse City, Warren’s in Mocomb County, it’s not going to pass. But my whole thing about the red, green, yellow test is it’s got to be apples to apples. So you can’t compare Oakland or Mocomb County, Michigan to LA County. It’s just, it’s apples and oranges. Same thing with Traverse City. So I wouldn’t worry about that at all. 1.23 is great.
Jill DeWit:
Thank you. Today’s topic?
Steven Jack Butala:
Why municipality’s rules are preventative? It’s the meat of the show.
Jill DeWit:
Okay. I would like to ask this question. Do you know why?
Steven Jack Butala:
Yeah.
Jill DeWit:
Oh, please share with us.
Steven Jack Butala:
There’s a few reasons. Number one, the vast majority of these municipalities are run by people who can’t get a job doing anything else.
Jill DeWit:
Okay.
Steven Jack Butala:
Number one, hold on.
Jill DeWit:
It’s not like it makes sense why.
Steven Jack Butala:
And it’s not entirely their fault.
Jill DeWit:
Okay. That’s true.
Steven Jack Butala:
In some cases they’re running off of rules that were created in the 1800s. I’m going to use Park City as an example.
Jill DeWit:
That’s true.
Steven Jack Butala:
So don’t get me wrong, it’s not everything that’s wrong. My general rule is, for myself, I’m happy to abide by rules that affect other people. So there’s a rule here in Park City that for properties that have been built before 1924 I think-
Jill DeWit:
Something in the 1920s, yeah.
Steven Jack Butala:
that you can’t alter, materially alter the exterior to keep the charm of the town, which I understand, that affects everybody, knock yourself out on the inside. But properties that are not subject to this rule… This is a good rule. Sedona’s got a rule like this, Sedona, Arizona, they have fast food restaurants, but they all look like they’re built into the side of a Canyon, the golden arches, you can’t see it. So there’s some rules that I think are good, but the vast majority are… I don’t believe that… Like the entitlement process in California is atrocious and they’re not trying to keep… I believe in my soul that the real root of this reason is that people don’t want to get fired. They don’t want to make a decision where their boss says, “You should’ve never made that decision.” So they do nothing.
Jill DeWit:
I know.
Steven Jack Butala:
Or they drag it out forever.
Jill DeWit:
This is a reality now. I know the reasons why also. I want to know why no one’s changing them. Why? It makes me so mad.
Steven Jack Butala:
Me too, Jill. It really makes me mad.
Jill DeWit:
They really are keeping good people from doing good things. For example, I know of two properties that we actually looked at here in Park City that are, it’s two buildings, one APN, and they’re two completely separate, full 2000 square foot homes, a separate driveway. This one we looked at yesterday, driveways and everything. You have to buy it as a two pack. They will not let you subdivide them.
Steven Jack Butala:
And you would never know it, looking at it.
Jill DeWit:
No.
Steven Jack Butala:
If you weren’t in the real estate business, you would say, “This is two separate APNs.”
Jill DeWit:
You got to read the fine print.
Steven Jack Butala:
Yeah.
Jill DeWit:
They will not separate them for any reason. And it doesn’t make sense. So it’s keeping the poor owner stuck until they find the right buyer when it could be two wonderful buyers and it’s not going to change anything. It’s not going to change the city. I would argue the taxes are going to be higher.
Steven Jack Butala:
I agree.
Jill DeWit:
They would get more money in the end, but they’re keeping it pushed down. And that’s the part that I don’t understand.
Steven Jack Butala:
There’s so many rules.
Jill DeWit:
I know.
Steven Jack Butala:
These municipalities just love, governments in general, they love to create these rules. I really believe when they go to bed at night, they pat themselves on the back and say, “I’m really doing the world a service by creating these rules to save all you people from yourselves.” That just goes against every fiber of my being. Instead of saying, “Within reason, we are going to review what you submit, and if it’s reasonable, we’re going to approve it. Because we trust you. We trust your judgment. And we believe that you want be part of this community and build something or separate some property or consolidate some property.”
Jill DeWit:
That’s going to make it a better place.
Steven Jack Butala:
Yeah.
Jill DeWit:
That’s the whole point. You’re going to make this better in some way.
Steven Jack Butala:
And that’s just not their attitude. Their attitude, now this is more stuff I have to do.
Jill DeWit:
That’s what I want. That’s true.
Steven Jack Butala:
And there’s all these rules that were set up in the 1800s or let’s even say the 1970s, that just don’t apply to any of this. So if I sound frustrated, it’s because I am.
Jill DeWit:
I agree. You are not wrong.
Steven Jack Butala:
It’s preventative. It’s right in the title. It’s preventing people like us who really want to do something good and make some money while we’re at it, from doing that.
Jill DeWit:
I found it interesting, we met with a builder here and he was shocked and amazed, as were we, that he got to be on the planning committee for a while, for a few years. I can’t believe they even allowed a builder/developer on the committee. He wasn’t able to really make any changes, but in his eyes, it was good for him because he gained a lot of information. He gained a lot of knowledge about it because he’s building all over here and now he really knows all the rules. Why is it so hard to change this?
Steven Jack Butala:
Where it rears its head, in my opinion, and it’s flat out incredibly frustrating for me in the last year, is mobile home parks. Everybody complains. Los Angeles is a perfect example. For whatever reason, Los Angeles is very pro-development and they do not care about traffic. There’s no traffic… They’ve never done a traffic study. They don’t care, or parking.
So why in the hell wouldn’t you allow, there should be multiple mobile home parks. Granted, architectural review, I get architectural review and I agree with that. Nobody wants to build a dump. But the very definition of a mobile home park is affordable housing. And yet they will never, if anybody out there listening to this knows where you can start a mobile home park pretty easily. Will you please email me? I’d love to know. Because I’ll start one there. If the market supports it.
Jill DeWit:
You’re not wrong. You’re not nuts.
Steven Jack Butala:
Instead, we’ve got places like Los Angeles. Los Angeles literally has a rule where, from a squatter’s perspective, if you live in an RV in a single overnight parking spot long enough, you get to just stay there forever.
Jill DeWit:
Yeah. They can’t kick you out.
Steven Jack Butala:
So how’s that possible?
Jill DeWit:
You don’t get a parking ticket. I get a parking ticket, but you’ve been living there. You don’t get a parking ticket. You can live in your car.
Steven Jack Butala:
And it’s not pretty.
Jill DeWit:
No.
Steven Jack Butala:
If somebody has been living in an RV for, I don’t know, a year in the same spot-
Jill DeWit:
Maybe that’s what I should do.
Steven Jack Butala:
It’s not pride of ownership situation.
Jill DeWit:
I’m going to keep a bunch of crap in the back of my car, make it look like I live there. And take a picture every time I get a parking ticket. Just kidding. I wouldn’t do that, but it just doesn’t make sense.
Steven Jack Butala:
And there’s something, I’m not going to get political here at all. And I don’t care about the right or left. I’ve said it a million times and I’ll say it again. I really don’t care, but something has changed recently where the role of government is up our noses. They believe for some reason, on both sides, that they’re going to make all these rules for us and we’re going to comply. Instead of saying, “You know what? I believe, Jill, you know what’s best for your family. Nobody knows your family better than you. And I trust you as an American to make some good decisions for you and your family.”
Jill DeWit:
Here’s all the information.
Steven Jack Butala:
Why would I ever presuppose making decisions on behalf of your family that have to do with health and all kinds of stuff. You do it.
Jill DeWit:
I know.
Steven Jack Butala:
It wasn’t that long ago that administration, full administrations were saying, “I don’t believe that it’s the role of government to get involved in that at all.”
Jill DeWit:
I know.
Steven Jack Butala:
You’ve never heard a municipality say that.
Jill DeWit:
No, and it’s so hard because when you really dig into it, too, back on this topic that, say I want to build something. I could find three rules for it and six rules against it. And which one’s the right one, because the reality is there’s rules and laws that just keep layering on top of each other and they never take away the old ones.
Steven Jack Butala:
That’s right. That’s correct.
Jill DeWit:
I don’t know if it was in a… it wasn’t a class. I was just kind of listening to someone speak about laws and the creation of laws. And it’s just that the sheer volume of laws every year that go into effect and they don’t go take out the old ones. They just leave them there. So it’s so hard to go and figure out which applies where. It’s nuts.
Steven Jack Butala:
Here’s a great example.
Jill DeWit:
That’s why I couldn’t be an attorney, by the way, I couldn’t handle that.
Steven Jack Butala:
There’s a property type that does not require zoning. You can put it anywhere you want, and that’s places of worship. So have you ever just driven down a subdivision somewhere and then all of a sudden, bam, there’s church? Or even an industrial area or an office area, it’s like, bam, there’s a church. Because they don’t have to, as a nonprofit religious organization.
Jill DeWit:
Yeah.
Steven Jack Butala:
What? Is that accurate? Why would you get to be able to put a church in a subdivision? Who made that rule and why is it still around?
Jill DeWit:
Right. It’s very interesting.
Steven Jack Butala:
And they don’t have to pay taxes as a non-profit. So how does it help anyone except the five people that belong to that organization?
Jill DeWit:
I know.
Steven Jack Butala:
Is this becoming a rant?
Jill DeWit:
Little bit. Can I live there?
Steven Jack Butala:
Yeah. Yeah. I think you can.
Jill DeWit:
Maybe I can live there in the rectory.
Steven Jack Butala:
The non-profit status would probably be, if the whole thing became a primary residence, it would change. It’s just frustrating because Jill and I could really come into a small community like Park City and make some huge improvements and create affordable housing and all kinds of things. There’s just this lack of trust at all municipal levels, starting at the federal and going down to the small towns. This lack of trust that we as individuals and as Americans are independent and intelligent enough to do something good for all of us, and make a little dough while it’s happening.
Jill DeWit:
You’re not wrong.
Happy you could join us today. Monday through Friday, you can find us right here on the Land Academy Show.
Join us.
Steven Jack Butala:
Join us next-
Jill DeWit:
Join us next week.
Steven Jack Butala:
Join us next week for another interesting episode. I was a little amped up. You are not alone in your real estate ambition. I might be alone in listening to this podcast.
Jill DeWit:
That could be. It’s a tough one. It’s important to talk about, I guess, because you’re not nuts. If you step into this business and you realize, wait a minute, this is a good show to hear don’t go there. We’ve all thought it and wanted it to happen, but let me just save you a little bit of energy. Just pick another area. That’s the end result.
Steven Jack Butala:
Or buy a piece of property and resell it exactly how you bought it.
Jill DeWit:
This is very true.
Steven Jack Butala:
This is a common theme all throughout Land and House Academy. Do not improve it. Do not go through any type of zoning rechange or parcel splits. There’s a trend on the internet now, among some of these land groups to talk about changing zoning, and I’m here to tell you it is 99.999% of the time, not going to happen.
Jill DeWit:
Right.
Steven Jack Butala:
You’re going to end up pulling your hair out.
Jill DeWit:
You’re going to waste 90 days of your life, and right, and gray hair that you can never get back. That is very true.
Thank you for tuning in. We hope you find this content valuable and we appreciate your support. Please check out our YouTube channel and hit the subscribe button.
Steve and Jill:
We are Steve and Jill.
Steven Jack Butala:
Information
Jill DeWit:
and inspiration
Steven Jack Butala:
to buy undervalued property.
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