11/07/2025
Earlier this week I presented to the Chamber of Commerce Executives of Kansas during their annual conference, which was held in Atchison this year. The presentation was titled, "Why Don't Developers Build Something in My Town?" discussing the challenges of making real estate development investable in rural communities across Kansas.
A few of my points from the presentation:
1 - Product development is upstream of marketing. Marketing certainly matters, but only once the product is reasonably good.
2 - Form always follows finance in real estate development. Local leaders (cities, counties, chambers, etc...) could benefit from drastically increasing their knowledge surrounding real estate development finance (math) and investment performance (risk adjusted return). For nearly every commercial and multi-family project in rural Kansas, and certainly for every project I've been involved with to date, the total development costs exceed the fair market value of a project upon completion. The reality of this situation is a strong indicator that various tax abatements and/or incentives (IRB, NRP/RHID, historic tax credits, etc.) are appropriate, especially in communities that are struggling with population decline, blighted neighborhoods, and places that see more demolition than new construction. Put most simply, real estate development has to be profitable or it won't happen enough to matter.
3 - Unless your community is satisfied with only seeing new dollar stores, drive thru fast food, and LIHTC (low income housing tax credits) housing projects, the outside development world is probably not coming to save your town. If the rural communities of Kansas want to see more downtown commercial revitalization, historic preservation, infill housing, etc. then we need to get better at growing, training, and incentivizing local people to become the homegrown real estate developers of tomorrow.
A handful of small, homegrown developers incrementally doing their thing in a community can add huge long term value. Let's work together to create more small, homegrown developers in Kansas.