What is a Certificate Of Occupancy?

A certificate of occupancy (C.O.) is a document given by a building department or local government agency that certifies that your commercial building and/or space complies with the plans you submitted to and that were approved by the city, the city’s / county’s applicable building codes and laws, and that it’s in a suitable condition to occupy. 

Who Needs a Certificate of Occupancy?

The procedure and requirements for a certificate of occupancy vary from jurisdiction to jurisdiction and on the type of commercial property. In general however it’s required when

• A new building is built
• When a property is changing from one use to another(e.g. an industrial building changed to residential use)
• Change of ownership
• Occupancy of a commercial building changes
• When doing tenant finish outs and a permit is required

Temporary Certificate of Occupancy

A Temporary certificate of occupancy gives the occupants the same rights as a CO however only for a temporary time period.

Certificate of Occupancy in Austin TX

If you are buying or leasing commercial real estate Austin Tx and doing any construction or improvements you more than likely will need to get a permit and then ultimately approval for a certificate of occupancy. When you complete and pass the inspection phase after tenant finish out and construction you will receive a certificate of occupancy. The C.O. proves that your building and space is safe for your particular use. If you are trying to get a C.O. in Austin and not sure where to start the following steps will help.

1. Start with the City of Austin Development Assessment center . Here you will verify the intended use that is allowed under current zoning, submit plans for construction, determine if a site plan is needed.
2. Next is Commercial Plan Review. Anytime a structure is erected, altered, improved, repaired, etc the review staff has to approve.
3. Permitting – After the commercial plan review has approved your building plans and application you can pick up permits and pay.
4. Inspections – Your project will be inspected to ensure that it’s compliant with mechanical, electrical, plumbing, and zoning, as well as other structural and engineering inspections. Once everything passes you will be issued a certificate of occupancy.

How to Choose a Reliable Commercial Contractor

When buying or leasing commercial real estate in most cases you will end up having to build, renovate, construct, or do some sort of tenant improvements whether you want to occupy office, retail, or warehouse space. Choosing the right contractor however can be a difficult process especially if you have not been through the process before.

Picking the wrong contractor can lead to your tenant improvement project being way over budget and not on time which can create a lot of stress especially if you have a hard deadline or existing lease expiration date. Going through a commercial real estate renovation is not ideal or fun however choosing the right commercial contractor can make the different between a successful move in and a stressful one. Below are a few tips on how to select the right contractor that will keep your project on time and within your budget.

Know What Your Needs Are First

Have some plans and ideas. Contractors can’t guess your needs and while verbally telling them what you want is possible on a small job in most cases you want to have things in writing. If the scope is really small (e.g. just building a couple of walls or having new flooring installed) then you really won’t need plans but do have what you want done in writing. If the scope is larger you need to hire an architect or space planner to draw up an office layout that meets your current and future needs. Once you have a good plan that you are at least 90% sure will work then you are ready to get preliminary bids.

Find Out Commercial Contractor Recommendations

There are a few ways to go about choosing the best contractor. If using a commercial real estate company Austin you can start with them. They have been through the process a ton and can share a complete list. You can also ask the landlord for a few references on who they have used for tenant finish outs. Ask neighboring tenants who they used and how their experience was. As you do your research you will find that there will be a handful of commercial contractors that do most of the tenant build out work in your city. 

Ask Contractors Lot’s of Questions Before Asking For Construction Bids

Before asking for contractor bids you want to interview at least 5-6 contractors and ask them a lot of questions about their experience.

• Find out how busy they are right now and if they have the bandwidth to do your job. 
• How they communicate during construction regarding timelines, challenges, issues, etc
• What do they do to keep costs down and within budget?
• What do they specialize in?
• Get references for other projects they have done
• Do they have employees or do they subcontract everything out?
• What work will be completed by subs vs employees?
• What vendors do they use (e.g. architects, electricians, plumbers, etc..)?

Obtain at Least 3 Preliminary Construction Bids

Now you are ready to request preliminary commercial construction bids. You may have not signed a lease yet or closed on a property however BEFORE you do it’s important that you get at least 3 preliminary written bids first. The landlord may be giving you $50,000 in a tenant improvement allowance however how do you know if the total construction costs will be above or below that? In most cases it ends up being above and if so it might make this property too expensive for you. You don’t want to be surprised later on by finding out you have to come out of pocket by $100,000.

You need to set your expectations and having an idea of what the costs will be is VERY important. Even if you are 90% sure you are going with XYZ company getting a few other prelim bids will educate you on typical costs and you will be able to keep your contractor honest. Make sure the bids include a line item for every aspect of the build-out. For example total plumbing, electrical, flooring, walls, mechanical costs, etc.

Compare Each Commercial Bid

Make sure to compare each bid ensuring each one includes the same level of materials, tasks, and scope of work. You want to ENSURE they are apples to apples. If the landlord is charging a construction management fee make sure you know whether it’s on the total construction amount (hard and soft costs) or just the hard costs. Also make sure to get estimates on architectural and engineering fees if needed and insert those as line items on the bids.

Value Engineer the Construction Scope of Work If Needed

If the bids came back much higher than you anticipated then discuss with each contractor how you can value engineer. This essentially means reducing the scope where possible to get the costs down. You want to meet in person or jump on a conference call and go through the bids line by line. Do this with each contractor and find out where (if possible) you are able to reduce the costs. You can also negotiate with the contractor to see where they are able to reduce their list price.

Choose the Least Expensive Qualified Commercial Contractor

After comparing all the bids now is the time to choose a contractor. Don’t always go for the cheapest, however picking the most expensive doesn’t mean you will get the best service. I like to pick the “least expensive qualified contractor”. I also make sure I pick the one that I know has the time and bandwidth to work on my project. If I have a deadline it’s important that it gets met. In addition you want the contractor to commit in writing to give you weekly progress updates whether physical onsite meetings and/or conf calls. There needs to be some sort of penalty for not doing this. Communication is key to a successful build out.

Don’t Pay Contractors All Up Front

You may be required to pay a small retainer fee or money needed to cover ordering materials but paying the full construction costs in advance is not advisable.

Get Building Permits If Necessary

For small jobs a construction permit may not be required. However if the scope of work is significant the city will require a building permit. In most cases (such as City of Austin) a qualified commercial contractor is required to obtain permits of their work. Be wary of one that asks you to obtain a permit on their behalf. The party that pulls the permits is held responsible for any construction work that does not meet city code. Before the project begins request proof from the contractor that the building permits and trade permits (if required) have been obtained.

Weekly Construction Updates & Timelines

Communication is key for a successful tenant improvement finish out or other construction. Get in writing up front that the contractor will have a predefined day and time to either meet onsite or have a conference call to review construction progress and if the project is still scheduled to be completed on time. The best experiences I have had have been when we have all met in person to discuss project progress, obstacles, etc..

For more info checkout Federal Trade Commission Consumer Information hiring a contractor

City of Austin Building Permit Services Commercial & Residential Property

If you are planning on buying a commercial building or leasing commercial real estate Austin you will more than likely need to do some sort of construction and/or tenant improvements. Whether it’s office, retail or warehouse space, if it’s located within the City of Austin, and depending on the scope of work, you or your contractor will probably be required to pull a permit before getting started.

Services City of Austin Building Permits Provides

• Issuing building permits
• Issuing trade permits such as mechanical, electrical, plumbing, & irrigation permits
• Permit payment services
• Registering licensed contractors to perform work (e.g. mechanical, electrical, plumbing, and irrigation)

When is Permit Required in Austin?

A building permit in Austin is required to construct, erect, alter, enlarge, improve, repair, convert, remove, demolish, or move any structure or building within the City’s zoning jurisdiction or in particular MUDs (Municipal Utility Districts). The permit can be 

Before a permit is issued all building plans must be reviewed by Residential or Commercial Building Plan Review. Depending on the scope of work a trade permit (e.g. mechanical, electrical, plumbing, irrigation) may also be required. To determine whether or not your project needs a permit call (512) 978-4000

What Type of Commercial Work Does Not Require a Permit?

 An Austin building permit is not required for the following commercial work, however you still must comply with applicable city codes, building codes, etc. To see the full list and details of commercial work in Austin not requiring permit click here.

Building

• Finish work such as carpeting, tiling, painting, cabinetry, counter work, etc.
• Movable and non-fixed fixtures, racks, counters, cases, and partitions no higher than 5 feet 9 inches
• One story detached buildings used as storage & tool sheds, playhouses, etc that are not greater than 120 sf, provided not in a flood zone
• Fences 8 feet high or less provided not in a flood zone
• Retaining walls 4 ft or less
• Driveways and sidewalks no more than 30 inches above grade

Electrical

• Replacing cables and cords on portable appliances
• Replacing dimmer switches or fans
• Replacement of electrodes, transformers, overcurrent protection devices, etc of same size, capacity, voltage, amperage, etc.

Mechanical

• Portable heating appliances, cooling, ventilation equipment, evaporative coolers
• Replacing any parts that do not alter its previous approved status or make unsafe

Plumbing

• Work needed to stop leaking drain, waste, soil, or vent pipe
• Work needed to clear a stoppage
• Repairing and replacing fixtures and exposed traps

What Happens During Construction and After Permitted Work is Completed?

Depending on the scope and type of work that was permitted an inspection will be required during construction. After the work is fully completed whoever a final inspection must be performed. The inspection scheduling is the responsibility of the permit holder. This can be initiated by a licensed contractor, homeowner if listed at general contractor on permit, official agents registered under contractor, or a master trade contractor.

When Do Permits Expire?

Permits are only active for 180 days. On the 181st day the permit will expire if a project has not received any inspections. If you let the permit expire this must be resolved before they city will issue a new permit. To check if your property has an expired permit call (512) 978-4000.

City of Austin Permit Search

The Austin permit search tool allows the public to do searches for permits, plan reviews, inspections, and the status of those permits/cases. You can also view issued construction permits and the online user manual for public search assistance.

The city of Austin provides this tool so registered users can apply for permits online, pay for permits, schedule inspections, apply for right of way permits and assign permits.

 

Lifespan of Commercial Heating Ventilation Air Conditioning Units

In most cases when leasing warehouse or retail space tenants are responsible for the maintenance, repair, and replacement (if needed) of the heating, ventilation, and air conditioning (HVAC) units. Before renting commercial space you need to make sure that you know how old the units are and how they have been maintained over the years or you will end up paying for costly repairs that were not caused by you. Below we will go into more detail as to why.

What Does HVAC Stand For or Mean?

HVAC stands for heating, ventilation, and air conditioning. In most states that experience extreme heat and cold HVAC is common in residential properties such as apartments and single family homes, hotels, senior living facilities, apartment buildings, commercial properties such as office, retail, and industrial space, etc.

How Long do Commercial HVAC Systems Last?

The life expectancy of commercial hvac units is typically 15 to 20 years however depends on a number of factors such as:

• Size of the system in relation to the building or space square footage
• Size of the Unit in relation to the ductwork size
• Preventative maintenance regularity
• How often filters are changed
• Climate and weather conditions
• Intensity of use such as extreme cold settings or hot
• Installation quality
• Compatibility of system components age vs the units age

Average Lifespan of HVAC Components

• Central Air Conditioner – 15 years
• Rooftop Air Conditioner – 15 years
• Air Compressor – 15 years
• Heat Pump – 15 years
• Boilers – 30 years

How Much Does it Cost to Replace an HVAC System per Unit?

The average cost can range from $4,500 to $5,000 however that depends on the size of the space you are trying to heat and cool. For example if you are trying to cool a 1200 sf space you might need a 2 ton unit. A 5,000 sf space might need a 5 ton unit. For larger commercial spaces expect to pay anywhere from $4,500 to 10,000 for each hvac unit being replaced. Replacing HVAC units can be costly upfront however your roi will be tremendous. When all the units are of similar age the entire system within the premises is more reliable and efficient, which means you can worry less about repairs costs.

Why Worry About HVAC Units When Leasing Warehouse Space?

When your leasing industrial space such as warehouse space Austin or office/warehouse space you most likely will be responsible for 100% of the repair, maintenance, and replacement (if needed) all all the HVAC units that service your space. That is because those units ONLY service your space an no others as you see with traditional office space. If the units die or need repair you have to pay for those costs no matter how old or bad the units are.

Because of this you have to make sure that you don’t sign a lease until you know all the important details about the HVAC units such as:

• Age of each unit
• Date installed
• Manufacturer & model numbers
• Repair & maintenance history of each unit (work done and cost)
• Warranty information
• Operating instructions
• Previous service agreements

During the negotiations ask the landlord to have all of the HVAC systems inspected, maintenanced, and repaired or replaced if needed before you take occupancy. You may also ask for a warranty for the first year or two.

If the units are newer ask if their is any remaining manufacturer warranty.

If the systems are older and close to the lifespan of 10-15 years then you definitely want to get some sort of warranty or CAP on any hvac expenses. You have to keep in mind that an old unit will need more repairs than newer ones. Also, your utility bills will be higher because the older units are less efficient.

At the end of the day if the landlord is asking you to take over the maintenance and repairs of HVAC units that are at or over the typical life expectancy you need to stand your ground and negotiate to have them take most of the responsibility………….or go find another space.

 

You Can’t Understand Big Tech Without Understanding Network Effects. Here’s a Road Map.

Platforms are unique businesses — their purpose is more often to bring customers together to interact or make exchanges with each other than it is to sell something directly to the customers. The service being provided is that of a matchmaker, finding two people who could profitably trade or communicate but haven’t done so yet because transaction costs were too high without a trusted intermediary.

The platform business model also leverages one of the more powerful forces in the economy — network effects — to scale quickly and maintain momentum behind the entire ecosystem. Network effects mean the product or service increases in value with the total number of customers. The classic example is the telephone: The more people who have one, the more useful each phone is.

Platforms that serve multiple customer groups can also have indirect network effects, meaning that when one user group grows, the platform becomes more valuable to a complementary user group. Operating systems are a case in point: Developers’ demand for adopting a particular operating system depends on the number of users, and users’ demand depends on the number of developers creating applications.

If an operating system can reach critical mass — the point at which the value of the platform exceeds its cost for a large number of customers — it can engage a powerful flywheel effect where more users create more value for developers and vice versa. Research has shown that the social benefit from someone buying a new computer can exceed the private benefit due to these indirect network effects.

A successful platform can decrease search costs and reduce deadweight loss by brokering exchanges that never would have happened without it. But before a platform reaches that point, it must overcome a chicken-and-egg problem caused by the interdependence of demand between the customer groups. Who wants to join a two-sided market with no one on the other side? One way to solve this problem is for the platform operator to subsidize one side (usually the one with the higher elasticity of demand or the one that creates more value for the platform) by raising prices on what’s known as the “money side.”

Where the Network Effects Are: A Taxonomy

The charts below map the digital and analog markets with significant network effects. The vertical axis measures how strong their indirect network effects are, and the horizontal axis measures how strong their direct network effects are.

Communications networks have the strongest direct network effects — in which each user benefits when a similar user joins — of any platforms. Their raison d’être is to enable people to interact with others. WhatsApp, Facebook Messenger, Slack, iMessage, and Snapchat all serve this purpose, and collectively they have billions of users. In the pre-Internet age, the phone and fax machines were communications networks that also grew in value with their size.

Marketplaces facilitate transactions between two or more distinct groups and help minimize transaction costs, which results in more exchanges and an increase in social welfare. From the analog era, we have shopping malls that match retailers and shoppers; flea markets that match buyers and sellers; and nightclubs that match singles (n.b.: ladies’ night means that women are the subsidy side of the market and men are the money side). In the digital economy, there are eBay, Craigslist, and Amazon Marketplace for matching merchants and customers; Uber and Lyft for matching drivers and riders; Postmates and GrubHub for restaurants and eaters; and Airbnb for hosts and guests.

Social media networks like Facebook, Instagram, Twitter, Pinterest, Reddit, YouTube, and LinkedIn combine the direct network effects of communications networks (the “social” part of the name) with the matchmaking of marketplaces. Social media networks aggregate attention and then sell pieces of it to advertisers for targeted campaigns. Newspapers, magazines, television, and radio used to be the primary platforms for this latter function in the pre-Digital Era.

Platforms, such as operating systems and video game consoles, are ecosystems of users and developers and demonstrate both strong direct network effects (many apps that involve communication and collaboration become more useful with more users) and indirect network effects (app developers want more users and users want more apps), with the result that these markets tend toward oligopoly. Today, there are only three big personal computing platforms: Windows, which leads the desktop OS market with more than 88 percent market share, and Android and iOS, which together have almost 97 percent of the mobile and tablet OS market.   Sony, Microsoft, and Nintendo control almost the entire video game console market.

Data networks are a new type of network that did not exist before the Internet made collecting, analyzing, and applying large datasets economical. Waze uses a driver’s speed and location to improve routing and navigation for other users of the app. Yelp and Netflix collect data and ratings to improve recommendations for users. AncestryDNA and 23andMe create databases of their customers’ genetic data, which are then used to improve genetic analysis for those same customers. All of these data networks have direct network effects, i.e., after each user’s data is added to the network, the value of the service provided by the network increases to every user.

Network Effects Aren’t What They Used To Be

Last century, all the action revolved around the desktop computer. This century, the multiplicity of devices and ease of direct communication means platforms can quickly find themselves cut out or replaced. Here are a few reasons why network effects may not be as strong in the 21st century as they were in the 20th century:

1. The proliferation of physical devices and digital platforms lowers switching costs.

2. Network effects have become highly localized, diminishing the advantage large networks have over small networks.

3. Network effects can be negative due to congestion, competition, advertising, and spam.

4. Users have an incentive to go off-platform for repeat business or high-value transactions.

In light of the empirical evidence, antitrust regulators should proceed on a case-by-case basis in markets with platform business models, identifying negative and positive network effects and determining if they are diminishing, increasing, or constant before making conclusions about market power.

Read the full comment we submitted to the FTC here.

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from nicholemhearn digest https://niskanencenter.org/blog/you-cant-understand-big-tech-without-understanding-network-effects-heres-a-road-map/

How the Tea Party Paved the Way for Donald Trump

The Tea Party that arose in 2009 seemed initially focused on bailouts, health care, and taxes. But new research suggests that concerns about cultural change and distrust of distant elites, the same themes that drove Trump supporters, were also central to the Tea Party—not just in the electorate but among activists and even for aligned Members of Congress. Bryan Gervais finds that Tea Partiers in Congress veered rightward on racial concerns and pioneered the social media incivility now associated with President Trump. Rachel Blum finds that the activist network of the Tea Party worked as a party within the Republican Party to reorient its ideology to focus on cultural threats.

The Niskanen Center’s Political Research Digest features up-and-coming researchers delivering fresh insights on the big trends driving American politics today. Get beyond punditry to data-driven understanding of today’s Washington with host and political scientist Matt Grossmann. Each 20-minute episode covers two new cutting-edge studies and interviews two researchers.

You can subscribe to the Political Research Digest on iTunes here.

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from nicholemhearn digest https://niskanencenter.org/blog/how-the-tea-party-paved-the-way-for-donald-trump/

How Iran Solved Its Kidney Shortage, And We Can Too

The U.S has a major shortage of kidneys for transplants. In 2015, there were over 121,000 people with End Stage Renal Disease (ESRD) on the kidney transplant list. With an aging population, and thousands of people dying or becoming “too sick to transplant” every year, the gap between people in need of a kidney and completed transplants has widened dramatically.

Dialysis, the primary treatment option for ESRD, is not only time consuming and exhausting — it’s also expensive, accounting for $87,000 per year, per patient, and over 7% of Medicare’s budget.

Without a bold strategy for increasing the supply of kidneys for transplant, thousands will continue to suffer while Medicare’s budget balloons. Fortunately, unlike many problems we face, we know how to solve the kidney shortage, and save taxpayer money in the process.

To do so, we should look to Iran. An unlikely innovator in organ transplant policy, Iran offers monetary compensation to living donors in order to help supply meet demand, a policy so effective that their kidney transplant waiting list was virtually eliminated within 11 years of implementation. Meanwhile, providing donors with any form of “valuable consideration” is prohibited in the United States under the National Organ Transplant Act, contributing to the current crisis.

Iran’s experiment in donor compensation dates to the 1979 revolution, a tumultuous event that left its economy struggling. Transplants from cadavers were not yet feasible, so kidney transplants were done between friends and relatives, although black market transactions for kidneys were not uncommon. In response to the pressing shortage, Iran legalized compensating donors in 1988.

Receiving a kidney in Iran is relatively simple. Once a recipient is identified, a transplant team searches for a biologically related donor. If no relative is found, they are transferred to the Dialysis and Transplant Patient Association, waiting six months for a kidney from a deceased donor. If no kidney becomes available, they search for a living donor. A donor is required by law to be a healthy young-adult who has the consent of their spouse or parent. Donors are compensated $1,200 from the government, and receive additional payment from the recipient or a non-profit broker.

While unsettling to some, the Iranian kidney system has its strengths. First, a jury of doctors decides whether an individual is eligible to sell, ensuring the health of the donor to verify that the kidney will perform well. Second, the Iranian government has rebranded the compensation as a reward for the “act of donation.” This has softened the stigma around selling organs. And, finally, the government has strict nationality requirements that discourage transplant tourism.

This is not to say the system is flawless. The value of the donor reward has eroded considerably over the years due to inflation. In Iran, 76 percent of individuals donating a kidney are impoverished, and often use the money to pay off debts. This is worsened by Iran’s routine imprisonment of debtors. Having mostly impoverished donors also puts the recipients at risk, as transplants from poor donors are more likely to cause kidney infections.

Fortunately, all these shortcomings have obvious solutions. If the United States were to follow Iran’s path, the size of compensation could be indexed to inflation. Prospective donors could be required to have a six month “cool-down” period to avoid true exploitation. And additional guardrails — like basic hospital sanitation and health screenings— would help preclude most, if not all, nightmare scenarios.

Past research suggests the market-clearing price for a kidney in the U.S. could be as low as $25,000. Yet rather than permit a true “market” in kidneys, the entire process could be facilitated within Medicare. Every dollar put into increasing the supply of kidneys would pay for itself many times over.

While we’re a long way from that vision, there’s some near-term hope on the horizon. The Organ Donation Clarification Act was introduced in congress last July and has 14 co-sponsors. The bill would clarify the National Organ Transplant Act’s definition of “valuable consideration,” making it clear that donors can be compensated for things like medical expenses and lost wages. The bill would also permit the U.S. government to run pilot programs, testing the viability of non-cash incentive systems.

With the kidney shortage reaching a breaking point, exploring new models to encourage donation is really the least we can do.

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from nicholemhearn digest https://niskanencenter.org/blog/how-iran-solved-its-kidney-shortage-and-we-can-too/