Greetings, and welcome back to ZacCast, your official podcast for local government nerdery. I'm Chad, that's Pat. Pat, you're back from Utah. Why don't you tell us a little bit about that trip?

Yeah, so just got back from the Utah City Management Association Conference. Uh, first off, let's talk about St. George, Utah, if nobody's ever been. You know, I've always been, like, a big fan of Scottsdale and Sedona, and, like, St. George is an incredible, uh, just beautiful city. Uh, it's got, you know, kind of like the Camelback Mountains on the right, like you'd have in Scottsdale, and then it's kind of got, like, the red mountains to the left. Um, you know, it's, it's got, like, uh... It's an arid environment, so kind of stays warm during the winter. So it's a big golf course resort. Uh, there, they've got some beautiful golf courses, a small little airport. Just an incredible two-hour flight from DFW direct. Um-

That's it?

Yeah, small airport, so, like, baggage claim-

Are you sure it's two hours after the time changes?

No, it's-

There's no way that's a two-hour flight.

It's a two-hour flight. It's a two-hour flight. It's in the bottom left-hand corner of Utah, though. Like, it's, it's not far, so incredible flight, very quick. Uh-

Is it Mountain Time?

Say what?

Is it Mountain Time?

It is Mountain Time.

Okay.

Yeah, so... But it is a two-hour flight.

Okay.

Yeah, so anyways, uh, I, I was, like, not expecting that when I got off the plane and I got into the airport. Small airport, you, like, use stairs to get off the plane. There's no, like, you know, whatchamacallit that comes out to the door. Uh, so it's pretty cool. I, I really enjoyed it. Um, got in the Uber, Uber driver starts driving, and I'm just-- I was just in a wow moment, just looking at mountains, like, sending my kids pictures of, of the place, and so pretty cool. Uh, it was also cool to go to a city manager conference that's not Texas and kind of see the differences that were there. Uh, some cool similarities, it... A lot of young students there, a lot of, like, assistants and department directors and assistant directors that were at this conference, uh, which I know in other states it's not always that way.

It's three hours.

Dude, it was two hours on the way... I'm gonna send you a screenshot.

11:15 to 1:11, plus the time change, is three hours.

Oh, well, maybe I'm wrong.

Sorry, man, I just could not let that- ... stand. I could not let that aggression stand.

So, um, really cool conference, got to meet a lot of really cool city managers, and we have, um, and folks who listen to our podcast, we have a lot of Utu- Utah-based folks that are city managers in Texas, uh, who happen to be really good city managers as well. A lot of them, BYU grads, so we got an opportunity to kind of, uh, do what we do in Texas, right? Support the graduate programs and, and the assistance groups, and so we got to kind of host a dinner for, uh, for some of those, uh, younger up-and-coming students, which was pretty cool to kind of sit there and, uh, hear about, like, how they do it there. Very similar to Texas, I mean, just not a lot of differences, um, and, you know, just a smaller group, obviously. I mean, the size of their conference was probably, I don't know, about a third of the size of TCMA's conference. Um, but yeah, really, really fun. Got to run into some old friends that used to work in Texas and get to know a lot of new faces. Very different for me there. I kind of explained to them, you know, at TCMA, I'm not really a vendor, 'cause I worked in the business for so long in Texas, I kind of know a lot of folks, and they don't really see me as a vendor, and so I don't really get salesy at all at TCMA. I try not to, just 'cause I want to see friends and, and chat. Uh, and then there, it's like you walk... I, I don't know anybody, and they don't know us, 'cause we're, like, brand new to Utah, right? So, um, it was a very different feel, uh, and so I, I felt like... Uh, you know how you tell me all the time, I tell everybody I was an offensive lineman at Katy, my dad's a developer, all those jazz things, right?

Here, everyone already knows that.

Here, everybody already knows that, so I don't have to say it anymore in Texas. But, uh, so I had to kind of introduce, you know... I had to kind of, like, start having conversations with folks, and, uh, and then when I would, like, know the business, they would kind of give me that look, and I'd be like, "Uh, you know, I was, I was in city management in Texas for, you know, 18, 20 years, right?" So, um, so it was kind of- kind of cool to get to know a lot of new people and see some new faces. They have a really good management culture there. They have more per capita MPA programs than we do, so, um, I had a lot of conversations with people about, "Well, what's Texas like?" Right? And, uh, Michael Kuhn, who works with us as well, was there, and Michael had, you know, made that transition from BYU into Texas as well. Um, and so, you know, we talked a lot about Texas opportunities and management because frankly, we just don't, we don't have the numbers in Texas to fill all the spots that we need to fill. Um, and they're kind of in that opposite. Uh, so I had a lot of conversations with BYU students about, um, you know, go, and then SEIU, I think, is the other one. Um, uh, that's another big program. Uh, Utah has a, a big program there, so there's, there's quite a few programs, and so I had a lot of conversations with them about taking internships out of state. Uh, and then, you know, maybe spending a summer in Texas and getting to know the Texas city crowd a little bit. Um, but yeah, it was, it was a cool trip, man. Like, really, you probably ought to go next time. I know that we kept you in a cave this week with all the other things we've got going on, so-

But your lights are on in your office right now. I've got the mood lights in the back-

Yep

... 'cause we're talking about maybe one day doing video versions.

Yeah, we're t-

So I'm just trying to get-

We're testing-

... everything set up

... a new, a new video, right? You're testing a new, I don't know, what do you-

Got my camera

My camera?

Fancy cam set up.

Yeah.

Okay.

It's a big word, camera. It took me a minute to get that.

It's a tough one.

Like, what?

Deep in the recesses of your brain.

Yeah.

Yeah, so the f- I went to Cal Cities last, uh, September, I think.

Uh-huh.

The biggest takeaway that I had of, of all of the-... differences was how sharp the elected officials were, like, how in tune to the sort of management questions that their cities were facing. Um, and at TML, a lot of the interactions that we have with elected officials are just, like, swag, you know, giveaways, and like, "Oh, what do you guys do?" Um, and we, we also try not to talk to the elected officials too much, certainly not from a sales perspective, 'cause-

Yeah, we believe in that dynamic.

We know better. Yeah.

Yeah.

Um, but we, we got m- a lot more detailed questions from people, not on our products, but on just the state of, you know, cities and, uh, the, the challenges that they were kinda dealing with, so that was, to me, probably the biggest difference.

Yeah, I had a really cool in-depth conversation with one of the, like, the, the directors of, um, the Utah, uh, basically like the Utah League, so like our TML, right? But, uh, kinda like the Utah League, which is the same as TML here, and I thought that was really interesting, um, because they are- they have this really cool program, uh, where they have hired, like, five city managers to go be, like, traveling pastors and work with cities all over the state to kinda help them. They're not actually, like, managing those cities, but they're just, like, facilitators. So they, like, facilitate and-

It's like Ben Wyatt and, uh, Chris Traeger in Parks and Rec.

Yeah, it's very similar, right? But it was interesting the reason why. First off, something that wouldn't happen in Texas right now, maybe later, who knows? They get a direct- they got, uh, they got a bill from the state to directly fund the program to the league, right? So the state is actually giving money to the Utah League to run this program, and you know, I was like-

I don't see that happening here.

Yeah, I don't see that happening here. I was like, "Ah, you know, I'm not sure if Texas is currently in that, in that spot, but maybe we should get there." Like, I thought that was a, a really cool program, um, and they're out there-

It would be nice to have that kind of relationship, but-

Correct! And so, um, and, and I'm, I'm gonna call my friends at TML and have this conversation with them at some point. But one of the big takeaways, or I asked them, I was like, "You know, how did you guys... " 'Cause, look, I mean, Utah, uh, politically is very similar to Texas. Um, so I asked the question, you know, "How do y'all, like, create that relationship with the state?" And their big selling point to the state of Utah was, "You've created a lot of new laws, especially when it comes to planning and development," right? Like, they have the development shot clock now, and they, they've done some things within, like, platting sizes and stuff like that, that cities are having to do, and they've kinda taken away some authority from the cities. And they don't have home rule cities in Utah either. Like, it- they almost work like little counties, like, uh, the way that we would work in Texas. So they only have the powers that are directly given to them by the state, right? Um, and so what was happening is the state was passing these codes and these laws, but the cities were not really updating their ordinances. And so the league basically came in and said, "Look, if we wanna go in and clean up all these small towns that don't have city managers, then we need to have somebody who kinda facilitates that need, and the state's gonna have to fund that. So if you wanna make these big changes and be able to handle development and growth, let's do that." And, um, and that's how they kinda got the funding. It's important to note that Utah is a fast-growing state. They're growing by two, three, four percent a year, depending on what area of Utah you're in. I mean, man, I saw no less than three... Uh, it's a 15-minute drive from the airport to where our hotel was, and I saw no less than three massive residential developments with huge, I mean, just water and sewer projects going in, right? So, like, my city manager brain going off as I'm, as I'm passing this. It was the, uh... It is currently, where I was there in St. George, that's the third-fastest growing county in the nation right now, so, uh, according to them. I haven't gone and looked at those, that data, but that's kinda what I was told by everybody there locally. Uh, so I just thought it was interesting that they're kinda dealing with that growth. They're dealing with that growing pain. Um, they don't do a lot on analytics right now, right? Like, we were the only game in town having conversations with them. Um, so they don't do a lot. Um, they're very against audit, the state. We've dealt with that with the state already. Um, but it w- it was a warm reception. I mean, you know, I thought, um, I think the reason they don't do it now is 'cause it's just, you know, same thing in Texas seven years ago. There's just so much data, right? And there's not really that capability in cities on an individual level. So cool trip, man. I really liked it. I enjoyed it.

They also have some interesting sharing agreements.

They do.

Which are not-

Like, sales tax-

... fully

is 50/50, right? So all sales tax made locally is, is 50%-

Like inside the county

... goes directly. Yeah, and then 50% is population shared within the county, so yeah.

And the idea there to, um, reduce the incentive to give economic development incentives, right? So the-

Also, the idea there is to encourage residential development because you get a greater share of the sales tax in the county based on-

That's true

... encouraging residential development. That- most of what they've written in their code is to avoid, you know, their words, not mine, to avoid California-style issues.

Mm-hmm.

Um-

It's funny when you get into the more red states, it's always to avoid- ... the California stuff.

I actually did say to one city manager, I said, "You know, now that we're working both in California and Texas, we can tell you they're a lot more similar than you would think from a taxation standpoint."

Mm-hmm.

So, um, you know, I know nobody wants to hear that in the state of Texas, but it's reality.

Yeah, it's funny. Like, we're headed to-

Yeah

... we're headed to Prop 13 here in Texas.

We are headed so close. Um, but yeah, I mean, and, and they do have lower property tax rates there. Just in general, their property taxes are lower. Um, but you know, it, it kinda, it's all made up in the wash by the time you look at income-

Yeah

... and everything else.

Yeah, the city- the state that I'm really the most curious about is Montana, 'cause they have super low property taxes and no sales tax.

... I mean, we wouldn't work there.

It's like, but why not? Well, obviously

Yeah.

So what are we gonna do?

Yeah.

But, uh, yeah, like, how, how do you fund things? A lot of their roads are just, like, chip seals and... But Bozeman was a beautiful town, nice little, uh, college town feel.

Yeah, I, I wish you were there, though, uh, for one reason and one reason only. We ran into, like, this, uh, this tourist couple, this German tourist couple, who, I mean, like, real heavy, like, from, um... I think they told me they were from Frankfurt, I think. Anyways-

Yeah

... um, and they were-

Did I tell you about my Frankfurt story?

No, you haven't told me about that-

Okay

... but it would've been nice for you to be there-

I should

... 'cause you could've started talking to them in all your, you know, German/Czech backgrounds.

Like, I can say bitte. That's about all I know.

Okay, nice.

Gute nacht.

So, but it was funny, we were at a, uh, like a hibachi, which is a really good, uh, hibachi if you're ever in St. George. Sakura was the name of it. Uh, but they were there, and the guy was like, "I want the brown rice," and I guess they deal with a lot of Ger- uh, German tourists there. Uh, it's a pretty common place for them to come, and, and, like, the waitress knew to ask, "Fried rice? Fried rice is brown. You want the one that's on the grill?" Like, you know, it was just... It was a- there was, like, this- ... Lost in Translation moment there. It was pretty interesting and fun, but, uh, also a lot cheaper than Texas. I was able to get my, my normal, you know, steak, chicken, and shrimp combo, um, and fried rice. It was, like, less than 35 bucks total, which in the, in the world of hibachi in Texas, like, that's cheap. Hibachi's gotten real expensive.

Yeah.

So-

The, uh, steak and shrimp at Benihana's is, like, 42.

Yeah.

And then the fried rice is, like, an extra five bucks.

Yeah, and their fried rice was-

So

... only an extra 3.25, so, uh, it, it seemed like things were less expensive there except for housing. Housing used to be really inexpensive and has shot up because post-COVID, it's become a place for people to work remotely. I mean, it's just, other than the summer months, the three, you know, high, hot summer months that they have, where it's like 115 degrees, very similar to Scottsdale. It gets really hot, but it's a dry heat. The rest of the year is beautiful. It's, like, 60 to 80 degrees, and it's dry, right? So the, the mountains off to the right are snow-capped, and then they're, like, in this, this dry valley. Uh, and it's with rivers that run through it off of the mountainsides. It's just a... It's really... I mean, it's, it's a really cool environment. It's not something you normally get in Texas, so it was kind of a cool place to travel to.

But, yeah, mountains.

Yeah.

So hold on to that, uh, remote work thing for one second, and I'll tell you my Frankfurt story. It's super quick.

Okay.

So on our honeymoon, uh, my wife wanted to... Like, one thing she's always wanted to do is buy a BMW and pick it up at the factory in Munich.

Mm-hmm.

So you do this, you can drive it pretty much for, like, six weeks, and then they'll ship it back to you for, for free. And you get to actually, uh, purchase the car, or you ship it back as a used vehicle, so it saves a bunch of tariffs or whatever. I don't know the... remember what it is, but it saved you, you know, 10 or so percent off the, the sticker price. So our drop-off was in Frankfurt. We were there for one night, so we just found a hotel-

Mm-hmm

... um, that was kind of close to the, to the train station that could take us to the airport. And, uh, that night, we just started walking around, trying to find something to eat. Kind of wanted some pizza for some reason. So, like, two blocks in to this walk, we realize we are in the red-light district. This is kind of seedy here, uh, but we did find a really good pizza place, so.

In, in the red-light district?

Uh-huh.

Oh, wow, okay.

Just, like, a tiny little walk-in, um, maybe, like, 200 square feet maybe.

Interesting.

Uh, just a little, like, walk-in shop.

Cool.

Got our pizza, head out.

Nice. Let's, uh, let's talk-

Scurried back.

Yeah, I would, uh, I, I would certainly scurry. Have you been to Amsterdam?

I haven't. I really wanna go.

Okay, so-

I wanna go to, uh, Belgium and the Netherlands, and I'd like to go to Denmark. Honestly, I haven't done that entire sort of northwest coast of the European continent.

Uh, that, that was funny, the German couple told me, 'cause I was- I was telling them all the places I've been in Europe and all the places I wanna go. And, like, Austria's on the top of my lip, uh, list-

Mm-hmm

... like, especially for the Alps. And they were like, "The Colorado Mountains are better." And I was, like, shocked by that, that they said that, and, uh, that was their 50th trip. Now, they're kind of an older couple, maybe 70, but that was their 50th trip to the United States.

That's wild.

Yeah, and they love... They just love the Western United States, so but have never been to Texas. So you know me, I'm selling Texas, right? "You gotta go to Texas." So but, you know, they're probably not gonna like it.

Yeah.

We did talk Texas barbecue-

Okay

... for a little while. He was very excited to talk about-

Okay, yeah

... brisket methods and cooking methods-

Some-

... of brisket. Yeah.

Some Tex-Mex and some barbecue-

Yeah

... might make the trip worthwhile.

100%, so, uh, you know, go to Fort Worth, go to the stockyards. That's a fun spo- spot to go if you're not from Texas. You know, there's, there's some things to do. I'm not sure if there's much to do in Dallas, but-

You can... No, unless you wanna, like, to go watch a play or a musical or something. Otherwise-

Yeah

... like, why? Why go out and go out east? Um, yeah, they could go down to the stockyards, and then they could see the drovers-

Mm-hmm

... who are, I think, the only non, like, farmers who actually do ride horses places.

Non, non-farmers?

Yeah, like, non-farmers, ranchers, like, non-agricultural-

Okay

... people that ride horses-

But farmers typically don't-

... on a daily basis.

Farmers typically don't ride horses. I just wanna, uh-

Okay

... I wanna point that out.

You gotta say non-agricultural people.

I'm not sure everybody on the podcast-

The-

... knew what you were saying there.

The, uh... What I'm saying is-

Ranchers

... that the trope is-

Okay.

Whatever. Okay.

Ride horses.

Ranchers, forgive me. I, I, I guess I deserve it because I nitpicked you on the-

You did

... flight times.

You did. That was 100% payback for the flight times.

You know exactly what I meant.

I was not gonna let that one go.

That's okay. Uh, the trope that we all ride horses to work and, you know, to the grocery store-... Yeah, I'm pretty sure, at least in the Metroplex area, that those drovers are probably the only people who actually ride horses on a regular basis.

Yeah, probably so. I, I think inside the city limits of Fort Worth, you're probably correct.

Yeah.

Yeah.

We used to have people in our neighborhood that had horses, and they would ride it around the neighborhood.

Okay.

But they moved, like, 10 years ago.

And that makes you sad? 'Cause it was kind of cool to see the horses.

I didn't like driving through the poop -

Okay

... and then having it stuck in the treads of my tires.

Nice.

So, yeah.

I, I did meet a nice- I did meet a nice vendor in Utah who, uh, some cool dudes that do some IT consulting all over the United States, but they're based out of Utah. Uh, and he lives, like, outside the national park there, uh, and he has a lot of horses, and offered to... 'Cause I, I love to horseback ride, and there's a, like, Zion National Park, you can kind of horseback ride through the national park. And he was like, "Don't go pay one of those guys. Just give me a call, and I'll take you horseback riding through the park." I was like, "Wow, that was really nice of you." It was a- it was a very kind city. I just wanna, like... I don't know. It felt very welcoming. Anyways, let's talk, uh, next topic.

So remote work.

Remote work-

Looking forward to it

... and what it's done to downtowns, right? Also known as-

Yeah

... the doom loop.

Boom. We need to get some sound effects.

I know.

Like, we need to pay for some actual-

Like

... like, bom, bom, bom.

Rah, rah, rah, rah.

Something like that.

Yeah, so-

Or maybe some thunder. As rain just starts.

Exactly. So, um, so a couple articles looking at this. I actually listened to a Wall Street- a Wall Street Journal podcast from a couple of days ago that, uh, discussed s- uh, specifically the city of St. Louis, and what St. Louis is going through in the doom loop. And to be fair with St. Louis, this doom loop, as they call it, and, and I need to define doom loop. Doom loop basically is the comment of downtowns that are in continual decline, and they basically eat away at themselves through their decline, right? So, uh, people stop working downtown-

What we call a vicious cycle.

It's a vicious cycle, yeah. People stop working downtown, and because they stop working downtown, and we've basically built downtowns in big cities to be just an office environment, and everything is very dependent on that office environment. So because they stop working down there, and they move out of that office area, the service industry that surrounds it also starts to close up, and then when the service industry close up, the other office users that are there that were depending on- dependent on those delis and dry cleaners, and so forth and so on down there, start to not like the amenities down there anymore, and so they close up. And then from a city perspective, they start losing significant amounts of revenue because buildings get repriced, sales taxes go down, and so they have to start trying to figure out a way to pay for the infrastructure in that area, and it just creates this constant loop of negative consequences, all based on remote work in today's world.

Well, you also have to think about the, uh, as valuations go down, loans become underwater.

Correct.

Um-

Buildings foreclose.

I don't remember... Yeah, they, uh... I, I have this transcript pulled up. There's also an episode of Odd Lots recently about the same thing. Um, but they noted that in San Francisco and New York, the rate of, uh, default was increasing on these types of, of users.

I mean, the, the rate of default in, in pretty much all office, uh, segment is, is increasing, right? Uh, but it's- I wanna specifically talk about, and you actually brought this topic up, and I stopped you from, from doing this in a green room, 'cause I thought it would be, uh, better to talk about on the fly. I wanna talk about the reasons why the doom loop is, is there. So I'm gonna ask you that question, and in your opinion, what, what kind of precipitates- what puts us in this position?

What puts us in this position is that these are fragile ecosystems that we've built.

And why are they fragile?

They're fragile because they're essentially monocultures.

Okay.

Okay? When you go plant a bunch of trees, like when we did the, uh, Green Ribbon Project in Hudson Oaks, we planted a ton, like, f- what? 300, 400 trees along the highway.

Correct. Mm-hmm.

We didn't just put the exact same tree next to each other.

Yep.

Right? You change the species, because that provides more resilience, right? You have a disease that comes through, it's not gonna kill everything.

Right.

Right, so you, you increase the cul- the, the sort of biodiversity in order to improve the overall long-term stability of that project.

Mm-hmm.

The same is true in our development patterns. When you have a monocultural development pattern, if it's just office, like, that is the primary use, and the secondary use, and everything else is just like sort of tertiary or, like, just kind of there to, to support it, you know, from 9:00 to 5:00, right?

Right.

Um, if, if your primary, like, place of employment in your city is dead after 5:00, it's already in trouble. Like, you've al- you've already l- laid the foundation for eventual failure. 'Cause a- all it takes is one little thing to f- like, one little domino to fall or Jenga tile to come out, and then the whole thing can start to crumble. It's not necessarily going to immediately, but it can, right? And that's the whole point is that, like, it's a f- it's a fragile system. So, like, to me, that's the f- the fundamental reason why this kind of thing happens. Um, and it also, I think, kind of gives you an answer about how to improve it, either what's on the ground now or in the future-

Mm-hmm

... you know, future developments. Um, but it's certainly not easy in these types of, like, urban environments, because those office buildings, it's very difficult to repurpose f- them for things like residential.

Yeah, I think, I think this is-

Right, so-

... correct. Yeah.

Did I lose you?

No, I'm here. Yeah.

Okay. Um, so 'cause the floor plates are really big, you end up with super weird layouts and floor plans. Uh, and it can be... It just, it's, it's very difficult. Like, people are trying to do it, and there are some success stories, but it's very difficult to repurpose these, uh, these towers for residential use when they've originally been built for offices.

Well, and even in, like, New York, uh, there's a 60 Minute story on this, uh, but even in New York-... because of the way the rules are written, they're repurposing office buildings, but they're basically donut holing the middle of the building in order to meet the-

Yeah

... zoning codes for New York for residential and commercial buildings. Like, um, we're, we're-

Yeah, and sometimes all these floors end up-

They leave floors empty and unusable so that they can put patio space in, right? Or things like... Like, it's just we're making it so difficult for no reason. Um, and I, I think you're spot on when you talk about what started it. And the question is, is like what got us there, though? Like, we know it was the... It was kind of the, the motto.

Yeah.

You just threw your hands up, and you know?

Yeah, 'cause we know what started it.

W- what? I mean, that's the question. What?

We used to build places incrementally where you could live and work and shop and dine, and do all these things at the same place.

Right.

Right? Now, originally we did this out of necessity, because we didn't have the ability to travel more than a couple miles in a day.

Right.

Right? So everything, you try to maximize the efficiency of a space. You would work in the front that faced the street, and you would live in the back behind the, the work, you know, the work area. Right? So you're, like, already being very efficient about your s- your space. The types of buildings that we built were easily repurposable, right? And in that way, we allowed these places to be flexible and adapt over time.

Mm-hmm.

Instead, we say, "Okay, here's our cultural district. We're gonna have all of our museums here, and then here's our sort of institutional government district. We're gonna have, like, our city hall and, you know, our police department. The- all of our governmental functions are gonna be here. And then over here is where we're gonna have our office spaces, right? They're all gonna be here." And so there's just no mixing. Like, we did this regul- regulatorily. I don't know if that's a word, but, like, we did this intentionally.

Yeah, we drew a map, we put colors on the map, and we say, "This color goes here-

Yes

... and that color goes there," right? I mean, referring to zoning code. And I think, you know, the car culture kind of drove us there, 'cause people could go where they wanted to go, um, and get what they wanted to get with a vehicle. So you could kind of get away with that and not necessarily understand the long-term detrimental impacts of that. But I think what we're seeing now in this doom loop of downtowns is, downtowns are not use mixed near as much as we think they are. So on a normal commercial building, you have maybe one floor of retail service, and then you have-

Mm-hmm

... 20, 30, 40, 100 floors of office space, right? Um, and so, yeah, I mean, we're gonna have to get ba- in order to get out of this doom loop, we're gonna have to rethink it, uh, and look at it. And like in St. Louis, they specifically stay- say in this podcast that one of the reasons they believe this has occurred is because there's another office district that has developed closer to the residential area of white-collar workers, right? And it's in the city of St. Louis, but it's, it's kind of developed a little closer to their homes. And I'm thinking to myself, "So it's basically like 20 or 30 years away from their doom loop? Just doing the same thing, right?"

Doing the same thing, yeah.

Um, and so, I mean-

Yeah, it's like, "Oh, I don't have to go to that shopping mall that's in the center of town, 'cause I- now I have my suburban shopping mall on the outskirts of-"

Oh, now we've, now we've built an outdoor-

Right. So then you have Highland Mall-

Yeah

... Northcross Mall, you know, Richmar Mall. Like, every- all these malls start to fail, because we've just pushed it a little bit f- little bit closer to the people that we've not allowed to actually live in the central city.

Correct. So now I'm gonna build this outdoor mall that's still commuter-driven, right? But I can just park closer to the store I wanna go to, and I don't have to walk through five stores to get to one store.

No, but I have to drive through- drive from this store to the other store.

Yeah, 100%, right? Um, and I'm gonna do that. I, I will say, there have been some urban shopping, mixed-use developments that have done well, village-style development that has, has done pretty well, and I think we could show that, um... You know, we, we could show that in communities that we serve. But like in these downtowns, these historic downtowns that are big, tall sky-scraping buildings, if you're not in a doom loop now, you ought to already be going through major changes in your zoning codes for downtown. You should sit down and have conversations with your development community, right?

Mm-hmm.

I mean, this is not something that anybody should sit on. If you're sitting with a downtown district that has a large office environment-

Basically no residential

... and no residential, you should be really worried if you're not already in this doom loop.

Yeah, if your downtown is pretty much quiet after about 6:00, you should probably be looking into ways to, to get people there for more than just during the day.

It... Yeah.

Like, people should have a reason to be there throughout the day.

The other thing that was talked about with St. Louis, it's important to note this, uh, is this- the, the first major building, like iconic building, in downtown St. Louis that closed, like literally just boarded up, was before COVID.

Well, I mean, we went through a doom loop concern in 2008.

Correct.

Uh, I mean, the- these, these concerns kind of fluctuate. I don't know if it syncs with the business cycle exactly, but as a retail or the real estate cycle is a little bit different than the, the overall business cycle. But, I mean, this isn't the first time we've had people concerned about a doom loop-

But if you, if you listen to, like, the Federal Reserve-

commercial real estate

... presidents, right, and you listen to, like, the big bank presidents, like a Jamie Dimon, right? And the conversations that they're having out there right now about office, you know, they're basically trying to encourage every major employer to require people to go to an office, because they know how bad it is.

Because they have a bunch of loans that are gonna default.

Correct. Like, this is... You know, it's, it's no different than 2006 through 2008, where we were giving loans to people that had no verifiable income, right? Like, we know this is going to happen. We know there's going to be a shift in the, um, in this- And it's like it's a slow bleed, right? Like, it's, it's like a leech on the skin right now, and it's just sucking the blood out little by little. It's not gonna kill you right away, but it's gonna kill you eventually. And I think cities actually have a chance right now-... to look at this and work with development communities where they're maybe not in this doom loop, to really encourage a shift in the thinking of those downtown areas, uh, and make it easier in the redevelopment of these buildings from office space to, to residential spaces. So, um, there's a lot of existing real estate that's empty right now. So I think, I think that's something that we really as a city should really focus on, and go in there and understand where it's at. You're gonna start seeing that in property- the, the problem is you don't see it fast, right? So tenancy drops in a building, it may be two years before you see in property tax data that that building has fallen in value, right? But just to give you an example, there is a unoccupied historic high-rise with over a million square feet of space that's selling for $3.5 million is what it sold for in St. Louis. $3.50 a foot. That's how far the doom loop in St. Louis has gone.

The land should be worth that.

Three and a half million.

Not 350-

Right?

... three and a half million.

But, like, 350 a square foot.

Yeah.

Like, we're talking in... You know, we're talking about stuff in New York selling, I- I'd have to get the exact numbers, but 4 or $500, $600 a foot, right, in these high-rise buildings. So man, that is just, um, that is a massive fall from grace for a downtown.

Yeah, like, if you can't, if you can't get tenants to cover a $3 a foot for that much space, like-

Oh, it's, I mean, it's-

That's bad news.

Yeah, absolutely terrible news. So all that being said, there are many communities that are not in that situation, that are not in this full-on doom loop yet. Uh, you know, in St. Louis it was like, "Well, well, how did you know it was in a doom loop? Panera Bread closed." I mean, that was it, right? It was a law firm that stayed in downtown, and how did they know that it was time to leave? The Panera Bread across the street, which is where everybody met for lunch, closed, and they had nowhere to go to lunch. And so it was like, "This is not... Why are we driving all the way here when we don't get any amenity? There's no gym, there's no livability, there's no place to eat, there's no social activities afterwards."

Mm.

"It's just, it's not conductive to a, a good workplace, a good work environment." And so the employers leave, and when the employers leave, the buildings fall in value. Uh-

And so in addition to just the s- the amenities and services like that, part of the value proposition of dense urban environments is the random interactions between other people and other disciplines, right? So, like, if you're not-

Funny, funny coming from you.

Yeah, it is, isn't it?

Yeah. Yeah, yeah.

I, uh... Just 'cause I don't live it, doesn't mean I don't recognize the, uh, statistical and economic value of it.

Yes.

Um, cities, as they double, they increase their per capita productivity by about 15%.

Right.

And the reason is, you have this random, unexpected mingling of different ideas. So why are you gonna pay premium prices to bring all of your people downtown, and then have none of the benefit of it? Like, you're just not gonna do it.

Agreed. Yeah, I mean-

So.

So I, I, I think there are things that we need to, to research in that a little deeper. Uh, but-

So w- we talked a couple of weeks ago about, um, a downtown project. We talked about that probably being, like, an opt-in. We've had some conversations, have a few opt-inners.

Yep.

I'm curious, just to kinda wrap this up, how do you think of, like, a downtown Austin or a downtown, you know, San Antonio, versus, you know, a downtown, I dunno, Marfa, right? Like, those are obviously, like, different stratas-

Mm-hmm.

... but I think, uh, I dunno, probably the way that you'd have to look at them is totally different, too.

Oh, absolutely. I, I, I think you'd have to segment by size, you'd have to segment by, like, true CBD environment, high-rise versus not high-rise, more than three or four floors. Like, different downtowns are gonna be in different transition phases over their-

Yeah, I mean, I think there are fundamentals that link even the small downtowns versus, like, a big urban downtown.

I think looking at square footages as a percentage, like, uh, you know, square footage as a residential versus square footage of a, of office versus square footage of, uh, service and retail, uh, is a good way to start, no matter what size downtown you have. Uh, and I think being able to compare that across multiple cities, uh... A- and I think this is what we're eventually gonna bring into the fold, and I, I love when I come up with ideas on the fly and have to, you know, tell Chad that he's gonna go build this at some point. It's always the most fun. But I think there's a lot of, we just don't know what it's supposed to be or what healthy really looks like, right? And I think the data can lead us there, right? I think once we look at this downtown project, and once we build out the ability for cities to actually see what other downtowns are doing, um, not by the individual taxpayer, but, you know, to the point of looking at a specific mix and trying to figure out what is healthy and what's not healthy, uh, overlaying crime indexes on that, things like that, uh, would be really beneficial for cities. I, I think that's the biggest issue we have is, we know we need to do something, but we don't know what. We have the gut feeling that we need to put more residential in these spaces so that we have a more sustainable, walkable, you know, development style, but we don't actually know what that mix needs to be. Uh, should that be 50/50? I mean, 'cause I would say, like, downtown Fort Worth right now has a lot of residential in it. I mean, it, it has a substantial amount of residential.

It has a, it has a good amount of residential surrounding it, for sure.

Correct. But I think the Seventh Street Corridor and, like, the Medical Corridor outside of downtown, it's not super far outside of downtown, but, like, the Magnolia Corridor and things like that, like, the urban villages that have occurred in those two areas-... are probably a little bit healthier than maybe downtown. You know, I'm saying that without looking at data.

Right, right.

That's just kind of like a gut feeling of where you drive around. But downtown has had some pains, right? Just like any downtown environment has had, um, it's had some pains. But I- they're probably more sustainable because they were a little bit more focused on residential and have built some residential towers there. Hospitality, how much hospitality do you need to have downtown in order to sustain a downtown area? Should a convention space be downtown? That was my one big takeaway from St. George, by the way, just gotta say this out loud, is that their convention space was, like, in a sprawl area, right? So it was just a sprawl area with, like, two restaurants and a couple hotels around it, and there was, like, no walkability to it at all.

So it's kind of like Dallas.

It's always gonna be-

If you've ever gone to Kay Bailey Hutchison Convention Center, you would understand that it is... It is, it's in the downtown area, but it is not near anything.

And it's totally unwalkable.

Mm-hmm.

Right? I mean, it's got, like, a raised freeway on one side. I've got a friend of mine who's an architect, who just complains about Dallas royally on the raised interstates and how that changed Dallas. Uh, and we had a really good conversation, uh, with a professor, a TCU professor, who's a good friend of mine, don't wanna, um, call anybody out, uh, at our UNT thing last week, where we talked about how that those interstates have created real problems in South Dallas. That was a fascinating conversation, and we need to get that individual to agree to be on the podcast because I- it... I mean, man, that was so much fun, just for 10 minutes of conversation.

Mm-hmm.

I know you were there for that, too. Yeah, Chad was out in the wild, by the way, last week, if you got the chance to see him. Uh, but I think we need to figure o- like, I don't think it's gonna be perfect for everybody, but it would be beneficial for people to know, like, "Hey, this is what I wanna shoot for. This is successful, so how do I get there?" And I think that's a big problem in this space right now, is we don't-

Yeah

... know what successful actually looks like. You can read the Jane Jacobs book, don't get me wrong, but Jane Jacobs is not telling you exactly what your mix needs to be.

No, 'cause I don't think there is a defined mix. I think the j- the truth is, a lot of the way that we have developed has been kind of vibes-oriented. Um-

E- explain that word. It's such a big word, even for me. Which all words are big for me.

Well, we're gonna talk about a vibe-oriented style of development here in just a minute-

Oh, yes, okay

... with the fire department conversation. But, you know, we-

Good segue.

Thank you. Uh, there's a lot of... When you think about the impediments to development and growth, a lot of it has to do with the vibes that people feel about what that new growth will entail.

Right.

"I don't want this neighborhood, 'cause it's gonna increase traffic. I don't want this, 'cause it's gonna have this negative externality. It's gonna cause drainage problems." This is really just kind of a vibe that people have, and we allow that to dictate how the city's growing. I think on the flip side, there's- there might need to be a little bit of vibe-oriented development when it comes to downtowns, 'cause, like, what do you want it to feel like when you're downtown?

Agreed.

Right? I, I don't think you can put a mathematical equation to it and say, "Well, you need to... You know, let me crunch the numbers here. Beep boop, you've got, uh, 2.4% less residential than you need, you know, and it has to go here, in this, this particular plot, because of these factors." I think it needs to just be a matter of, let's try something, see how it feels, see how it works. Does it make things better?

Yep.

Does it make the place more enjoyable? Does it make the place more lively? Uh, the... You mentioned Jane Jacobs. The biggest takeaway from that whole book, Death and Life of Great American Cities, is that there are elements that make places lively, and there are elements that make places feel dead. Um, but it's n- you have to have all of these elements, but you don't necessarily have to have a specific mix of them.

Sure.

But the only way to really do that is to try things, which means we need smaller-scale development, we need infill, we need... We, we can't just do everything with big projects, 'cause what happens if we mess up on a big project? We're setting ourselves even further back.

What?

Right, like, so I've got my downtown, and I'm gonna do this big project, 'cause this is what I think is gonna make everything better. Well, now that flops, too, then where you spend a bunch of money, you spend a bunch of time, a bunch of political capital trying to get something approved, and it also is a failure. Try small things. Just do placemaking things, like do you have... We probably need to talk about Greenville, South Carolina, because their downtown renovation was-

Mm-hmm

... extensive and iterative, and it's done, like, quite a bit for the, uh, for the city and the community. Um, but, like, y- you, you can't just think there's gonna be a silver bullet. You have to just go incrementally, small scale, try new things, experiment, and just try to make the place feel like a place that people would wanna be and come and see.

Well, the opposite of the experimentation on that is removal of certain things that have a significant impact on downtowns, right? I- and I know this is super vehicle-centric to say, I'll, I'll, I'll premise this before I say it, but we know that the residential mix in downtown Fort Worth was probably not enough because downtown Fort Worth has really suffered by the removal of free valet parking, right? Like, downtown Fort Worth was really famous for the ability to free valet park. I know you don't like it-

Mm-hmm. I, I, I think-

... but it tells us a lot.

I think that has more to do with entitlement than-

But, but it brought people there

... because, because we're used to it, right?

Yes.

We're used to the idea that parking should be free.

Yes. But, man, I, I mean, you know, my wife and I, and I know y'all used to do the same thing, too, but my wife and I would make regular dates at downtown Fort Worth because we could valet park on one side of downtown, right? Go to this restaurant, walk across the other side, go to a-

And park our car

... movie theater, and then I could go to any valet stand in downtown and get my car called to it, right? And so-

You can still do that. You just have to pay for it, though.

No, it's not done by... It's not done the same way.

They don't have a central valet anymore?

No, there's not a central-

Okay

... valet anymore, so you can't, you can't, like, Sundance Valet, right, which is what you used to be able to do in Sundance Square. You had Sundance Valet in front of, uh, the Cheesecake Factory, right, and then you could get your call, your car called in front of, um, what was the old bar named?

The city would love you for that.

Say what?

... City Nerd would love you for that.

Yeah, I know. But, but the, the, the reality is, is that it was just one of those things where it's like you talk about small things that you could just insert into an environment that doesn't have a lot of residential in it to kind of sustain the market until you can do some things, that may be it. And I know it's, like, encouraging vehicular movement, and it's really gonna hurt your feelings, Chad, but... That was almost like a Trump voice. Did you catch that?

I actually, I did.

That was actually pretty cute.

Yeah, it was a bit spooky.

So but, you know, it was huge. Uh, I gotta do it one more time. I couldn't help myself. But anyways, I, I, I think, you know, I think you're right. Like, experimentation can work both ways, right? If we're doing something now that we think may have a negative impact, we can actually remove it and see if something changes, right? Um, and I think on the other side. So let's segue in what you were actually talking about in the-

Yes

... fire departments. So intro the fire department conversation. And, and I wanna say before- sorry, before you intro this, we are going to try to find somebody to come on our podcast to counterpoint some of this conversation, 'cause I think it's important to do. And the reason I say that is because Chad and I are probably in agreement on most of this, and we're not gonna really have a devil's advocate point of view on it. So we are gonna try to get one of our, uh, dear fire friends on the podcast at some point to talk some of these things through. But from that, Chad, go ahead and give me an intro.

I would- we're probably gonna be in agreement on a decent amount. I don't mind doing a little bit of devil's advocacy here, but I came across an article on a sub- Substack about fire departments. So the premise of this article, or I guess the pretext for this article, was the role that fire departments and fire unions and fire groups have had, um, fighting against housing bills-

Yeah

... housing projects, right? So they name a couple of things. The LA Firefighters Union was an opponent of, uh, Measure HLA, um, which, which passed anyway. Um, there was a big thing in, in Arizona that was, uh, argued against by firefighters and fire departments, and then just generally the impact that fire departments and firefighters have on our building codes.

So the, the Arizona... Yeah, so sorry, the Arizona thing specifically was, it was a bipartisan bill. Uh, they called it the Starter Homes Act, which would have legalized smaller, more affordable homes-

Mm-hmm

... on smaller lots. Higher, higher density.

Yeah. Interestingly, I think it, it was also opposed, I think, by the Navy.

Weird. Okay.

Which is kind of weird. So when he talks about the, the fire departments and their role in building codes, at the beginning, kind of talking about the impact on, on housing affordability, which is a problem, and we'll kind of come back to it. There are also... He does acknowledge the some benefits that have come from that, right? Fire safety has been vastly improved in our building, uh, codes. We have sprinklers. We have, you know, firewalls. We have things that make it safer to live, uh, in more dense places. But as a result, the number of, of fires-

Right

... and fire deaths has, has fallen quite a bit, right? So, like, the vast majority of calls now for most fire departments is not fire. Uh, it's emergency medical, it's auto accidents, it's things like that. But he also touches on some things in the building code that fire departments kind of insert and focus on that have made housing less affordable. So, uh, like, one in particular, the double egress, right? So, like, point access blocks for, uh, for small to moderate-size apartments, um, where you could just have a single staircase, uh, that, that-

And not including the yet- the other thing is, is they don't, they don't include the use of the roadway as a fire lane.

Right.

Right?

Yes, especially-

That's also a very common-

Yes, especially in parking lots

... thing that fire departments fight against.

Yeah.

Right? When you're talking about, uh, higher-density development, um, whereas in, like, downtown districts right now, you know, we've, we've never- we've always included the street as the emergency access point.

Right. 'Cause what else are you gonna do?

Right. Correct, but if we- when we get into a suburban world and in normal building codes now, the street cannot be considered an actual setup point for a fire truck.

Right.

So...

Yeah, well, it can't be, because everything's set back behind parking lots, right?

Correct. Uh-

So-

... but even when the building is up, it's, it's still not permitted in the code a lot of times. So, um, yeah, one, one of the things-

Yeah, but so-

... they talk about... Sorry.

Real quick-

Go ahead

... uh, let me just go back to the single stair, and then I'll, I'll pass it off to you.

Okay.

So one reason why the single stair thing causes housing a- affordability issues is because when you have to have dual egress, the shape and the s- like, the layout of the building, the floor plan, it necessarily has to get bigger in order to make it affordable for the developer, like, to make it-

Yep

... profitable for the developer.

Yep.

Because now you've got these two points of access, you've got a sort of crosswalk in between them, right?

Mm-hmm.

So your apartment becomes like a hotel-

Yeah

... basically, with, like, long corridors, and then the apartment units kind of fit off of that. You can't do that in a 12-unit building and make any money on it.

Right.

So no one's gonna do that. So that kind of forces our, our, uh, projects to get bigger and forces them to be more expensive. Right, so that's just, like, one aspect of how that, that role that they have, that expert role of fire safety, causes problems-

Can I add on to that?

... on housing affordability.

Just a little bit more?

Of course.

Right, so the other thing I'd add on to that is not only do you have to have those, those two, uh, points of egress, ingress, uh, but those points of ingress, egress also have to be fire blocked now and-

Mm-hmm

... smoke controlled, right? Now, granted, this entire building, if it's over a certain square footage, is required to be fire sprinklered, right? So wherever the point of fire is, there's gonna be water on it. So we've now required them to build extra ingress, egress points. We require them to have a window in the building where somebody can actually get out of, right, size-wise by code. We require them to have an exit into a corridor-... that has two points of ingress, egress to get out of. And in those external outdoor, um, spaces, we require fire blocking and fire doors in many cases to be on those external stairways, not because we're afraid the stairway itself is gonna be on fire, but we're afraid somebody's gonna die of smoke inhalation in that stairway. A question that I asked for years as a city manager when we were building multi-family complexes of my local fire department, "Give me an example where the death has actually occurred in an outdoor, wind-blown space where smoke has caused the death," right, in a sprinkled facility. It's not that we just look at it. We look at the worst-case scenario if something can happen, and we layer on-

That becomes the baseline.

Correct. Whereas i- if it's a sprinkled facility, we wouldn't have that smoke issue there because we wouldn't have that fire raging as hot. Uh, it's just there are so many different things that you start to ask yourself the question of, we just add on because ultimately, to be fair to the fire department, fire marshal folks who are writing that code, they're looking at, "What do we have to have in order to save a life?" Right? And they're thinking about the worst-case scenario or the worst event that's there, and, and I think that's incredibly difficult way to look at it because every time you add that in, you're adding cost, more and more cost, and more and more cost means things are getting more expensive. Um, and so I- I'm gonna kinda go on to one other point that's here that also talks about making things more expensive just in the long run for the cities, not necessarily health and safety related, although it does play into health and safety, which is the road width requirement within residential communities, which also makes things more expensive. The reason why we have a 24, 28, or 32-foot wide road requirement is because the fire departments have come in and said, "I've gotta be able to get our fire truck on that street in order to fight a fire." Yet, we have more deaths from traffic accidents the wider the road gets, so we're actually saving-

We have, like, 48,000 li- uh, fatalities-

Correct

... in traffic accidents a year, many of which come on-

Many, many of them come on highways

... on highways, but also many of which come in more urban and suburna- or suburbanized areas.

Correct, and there, and there is a study. Uh, we're not, we're not just pulling this out of the, you know, out of the dark here. There is a study that studies this on residential roadways, and, and it will be in the show notes, but it is actually safer and slows traffic down. It's, it's that, it's that argument that we have all the time when people want speed bumps, and my response is, "Just shrink the street," right? If you make that a 22 foot to foot roadway where people have to slow down to get around cars, things like... They're only gonna be dr- able to drive 15 to 25 miles an hour, and if you have an accident at 15 to 25 miles an hour, your probability of death is, like-

You can live

... really low.

It's almost non-existent, yeah.

Even if you hit a pedestrian, right? Like, it's, it... That's, that's the thing, and so we are building a wider road to save somebody in a burning house that has advanced building materials, and fire blocking, and fire alarm systems, and everything else so that we can get a fire truck there to save a life-

So you said-

... and we're just killing more people on the roads to get the fire truck there.

In 2022, f- 470 fire deaths occurred in apartments. Meanwhile, two orders of magnitude that number-

And, and so does it-

... died on the highways.

Does it say how many of those had fire sprinkler systems in them?

Um, there's a study that's linked, which I can dig through.

Okay. I'm just curious.

Um-

Yeah.

But, but, I mean, basically, it says you're more likely to die in a single-family home fire than in an apartment, and most of those are older buildings, not newer ones.

So I, I think it's important to note, too, we're talking about that big fire truck side, and, and it talks about this as well, but one of the reasons why we have some of these code requirements that are there is because we are driving these just huge fire trucks, and we're equipping these huge fire trucks with the, the ability to fight all threats, right? Um, in order to try to, uh, fight all threats. Whereas our European out- uh, you know, individuals in Western Europe drive significantly smaller fire trucks because they have smaller streets, and they have actually a significantly lower fire death rate than the United States.

Yeah, they also have single-stair access apartments.

They do, yes, and so I, I, I think it's just, it's important to note that we're driving a code because of, um, a very specific item, and we could actually save money-

And life

... make housing more affordable.

Potentially.

Yeah, I mean, there, there are some things that we could do from a management perspective to, to do some things differently here on the fire side, and there have been some cities that have experimented with that, by the way. Uh, I don't wanna throw all... I, I don't think it's fair. I think there have been plenty of fire departments in cities that have experimented with smaller trucks and smaller truck formats.

Yeah, but, like, in a suburban area that, where nothing is bigger than three stories, like, how many ladder trucks do you, do you need? Are you trying to get over to the top in the middle of the Walmart, like, to put out a fire? Just get all the people out. It's a cinder block building.

Oh, I agree, yeah, and you're not gonna, you know, you're not gonna send firefighters into a building like that because it's gonna collapse from the middle, and it's a safety hazard. But you're... I mean, you're only sending somebody in for life and safety issues, right? Uh, but once again, that Walmart store is sprinkled.

Yeah.

And, I mean, I've been a city manager in a city that's had a Walmart fire, and the sprinkler system has gone off by zone and put the fire out prior to the fire department arriving. So, I mean, uh, just, you know, making that statement again, like, these buildings are insured, and those insurers are requiring that things be protected, and so-

Are you saying that, that there's a market element that can resolve some of these questions?

I, I mean, it, uh, there, there is, right? I mean, um, and I'm not saying that we shouldn't look at health and safety issues. I'm just saying that we-... we are writing codes to the least common denominator, right? Or to the worst possible thing that could happen, and that's actually costing more lives right now than it would be if we had a more reasonable, logical discussion about why we write fire- why we write the fire code.

It's not costing more lives on the thing that we're trying to prevent, it's costing them on a downstream reason, right?

But the 2019 IRC code, I think it was 2019 IRC code, was the one that changed the stairway smoke re- in a- inhalation, outdoor stairway smoke inhalation requirements, right?

Yeah, but it's, it's not gonna kill anyone to have that.

It's, it's not gonna kill anyone-

Right

... to have that.

Whe- whether it's gonna save a life is, is perhaps a debatable question, but it's not gonna kill anyone, it's just gonna cost more money, right?

It was like $6 million on that development to, to adapt to that over 300 units. So that added $20,000-

Yeah

... a door in that multifamily for one code change.

Yeah. So, like, maybe you could argue, "Well, this is making housing unaffordable, and so that could possibly result in a death." I don't know. I'm not trying to ar- make that argument. What I'm saying is that no one is gonna die in a fire because of that, right? You are making the building safer. The problem is that you have to balance these things with all of the other factors, right? Like, you can't just let... Bring in a bunch of experts in very specific fields, and then say, "Okay, you write the rules to make it as safe as possible, and we're just not gonna look at whatever other, uh, consequences that has."

Right.

So it's important to have those people with expert, uh, you know, expertise-

100%

... in the room providing guidance, but ultimately you need to have a generalist who's like, "Okay, well, I appreciate this, and we're gonna take a piece of that, but we can't go all the way, 'cause it will make this... It'll, it will generally make everything else worse," right? "It's gonna have effects over here." That's, I think, our biggest problem with this, is that we've ceded... And it's not just fire. You see it in transportation, you see it in waterworks with things that are severely overbuilt, because maybe in the one... You know, 20 years from now we'll need it. We don't need it now, but, you know, we're gonna be thankful we have it then. So it's important to have that expertise in the room when you're trying to make those decisions, but we shouldn't relegate the decision-making to the expert just because they're an expert in that, that one thing.

Agreed. I wanna, I wanna actually put this financial cost into perspective real quick, 'cause I just did some quick math, right?

That's always scary.

It is, and I did it... So just everybody- so everybody understands, I took that cost over the whole project, over the 300 units, and I just ran those numbers over a 10-year return at an 8% cash-on-cash, because that's how rent would be calculated based in, in these developments. That's, that's what the return on cash-on-cash that most multifamily developers wanna get. It would add $180 a month to the rent of an individual unit to fire block and fire door exterior open-air stairways.

On that project, which could be, what, 8 to 10%?

Yeah, it's a lot. But, I mean, I'm, I'm just- I'm just saying, like, when you look at that cost-

Mm-hmm

... and you look at what that is, it's $180 a month in additional rent on a unit. That's a, that's a lot, guys. We're trying to make housing more affordable. And I'm not saying this to... I, I wanna be clear, I'm not- I think your comment is really well taken. It's not the fire department's fault. They're looking at this and going, "If you want somebody not to die, you need to do all these things," right?

Yeah.

That is their job.

That is their job, is to tell us what is gonna make people-

Correct

... stay as safe as possible. It's a manager's job to take that information and apply it along with the context of everything else.

But historically, we've looked at this from a liability standpoint, right? As a manager, we looked at it and said, "Well, if the fire department tells me somebody could possibly die here, and we don't enforce this or we don't create this code to keep it from happening, then we're gonna be liable for it." That's the famous word that comes into city management circles. Are we though? And how do we, how do we change that mentality? I, I think that's the-

Yep

... my ending, my ending statement is more of a challenge, right? Like, we should challenge that concept.

Yeah. It's interesting to think about that. Maybe part of it, part of the difference here, like, if you talk about European cities that have narrower streets, and small fire trucks, and point out- or single stair blocks, whatever, maybe part of the problem is just the underlying litigiousness of Americans.

I mean, it's, it's possible that that's the case, um-

And maybe that's a cultural thing that's gonna be really hard to overcome.

I, I think a lot of it is just, um, we've always written code for the worst possible outcome, which makes everything else diff- more difficult, right? But we're protecting ourselves against the worst outcome. I mean, we were talk- we were talking... A- and, look, I, we're not getting into this debate over the TikTok ban, but we were just talking in the green room about there's gonna be a ban, a bill to ban TikTok, right? That just seems like we're legislating for the per- worst possible outcome.

I feel like TikTok is a pretty terrible outcome. Just from a social, from a social, uh, standpoint.

Oh, I think TikTok is terrible in general. I, I think-

Yeah, and I'm not arguing one way or the other on a proposed ban, but TikTok is terrible.

Yeah, this is coming from a guy who doesn't allow his kids on social media at all, so, I mean, I get it.

Yeah.

Right? But it's just we... Like, we don't love to land a pendulum somewhere in the middle where we can kind of protect ourselves a little bit, right? We love to, like, say, "We're gonna fully protect everything, and then we're gonna take away all innovation because we have those protections." That's kind of the point I'm trying to make, right? Uh, it's gonna have a chilling effect on innovation if you ban TikTok.

TikTok is not really an innovation as much as it is a just really, really good recommendation algorithm. I don't use TikTok, but I've read about it and its ability to start feeding you stuff that you're just gonna-

Okay

... churn through for hours on end after just a couple of videos that you watch.... but, I mean, I never go on Facebook anymore, but they're- like, Facebook knows me-

Yeah

... well enough at this point to put videos on there that I'm probably gonna watch if I didn't have any self-control. And they're just gonna go through. Like, everyone can do it. TikTok is just it- we had Vine, we had, uh, there was another short video app before that, before Vine. It's just the-

Right

... the current one. The challenge with TikTok is that it's owned by the Chinese government.

Right, and they're collecting data on American habits, which can then be used in psychological issues. I get it. I get it. Um, it's just are we taking an extreme action? I don't know. Maybe not. Maybe, maybe this is something we, we should do. I can't believe I have more of a libertarian stance on this than you do.

On TikTok?

Yeah.

I've never said that I supported a ban on TikTok. I just don't like it.

Man, you played some really good devil's advocate right there.

I don't like TikTok. I don't use it. I think it's probably bad.

Oh, I think it's t- I, I think it's-

I don't, I don't think that it's good for us to have the Chinese government basically knowing all of the sort of psychological profiles of, you know, hundreds of millions of Americans, but-

I mean, isn't that scary, though, that, like, Facebook knows everything about us?

Yes.

Yeah, I think so, too. So, boo, no, no, no. We need another, uh, sound effect right there. ♪ Ba, da, da, da, da, da, da, da. ♪

Yes, another doom loop sound effect.

So to wrap it all up, 'cause we've been going for a while, I think it would be really interesting to have somebody from the fire service on the show to talk about some of those things. So we will try to follow up with somebody in the future on that. I think it's also gonna be very interesting as we grow to start to analyze the mix of downtowns. We have the data. We just have to go do the work, and when I say we, Chad's got some work to do.

He means me.

So anyways, hey, we're gonna wrap it up there. Uh, we appreciate you taking the time to listen to ZacCast. Hope that you had something, uh, that you liked to hear. Uh, sometimes we hope that you had something that you didn't like to hear. Uh, we don't always make it fun and enjoyable. Sometimes it hurts. Uh, but if you wanna reach out to us, you can always reach out to us directly, uh, at Patrick or Chad@zactax.com. We will see you guys next time. Chad?

See you, buddy.

Bye.