The Self-Storage Conundrum

The Saint ReportProperty Development

When your projects benefits become its negatives.

Self-storage is experiencing explosive growth. Annual industry revenue in the US is now $38 billion and it remains one of the fastest growing sectors in commercial real estate with over 7% annual growth since 2012.[1]  Changing lifestyles, trends towards smaller housing units, downsizing and other factors continue to drive demand for more storage space.

Finding sites was fairly easy once upon a time.  Depressed areas, industrial parks and places where a giant concrete box would not be perceived of as a blight on the landscape welcomed this sort of investment in the community.  Those easy opportunities are now tough to find as the industry matures and successful developers attempt to locate new storage facilities closer to more densely populated areas. It is hard and getting harder to get new facilities approved. Some communities are even moving to ban their use completely.

Self-storage facilities are a low impact use and offer a number of unique benefits that might lead you to think that there would be minimal opposition.

  • Low impact use- They do not use significant electrical, gas, oil, water, sewer or other resources. In fact, many now use solar for their minimal electrical needs.
  • Low traffic generation- Only about 25% of users visit the facility monthly on average. Some may go once or twice a year. The traffic it does generate is not adding to rush hour but tends to happen Saturday mornings or evenings.
  • No significant parking needs.
  • No municipal Impacts- While paying their fair share of local taxes, these facilities do not add students to the public schools or add to police and fire department burdens.
  • No significant environmental impacts.
  • Limited hours of operation.

So why are some communities opposing self-storage? Some qualities that make this use an attractive development option are being turned upside-down by opponents.

  • Low intensity use- Flipping many of the uses primary benefits and turning them into perceived negatives, some communities are actually looking for a use that will generate vehicle and pedestrian traffic and bring new life to an area to aid in retail revitalization. Self-storage will not generate that kind of activity but that’s a big plus for any abutting residential neighbors.
  • Ugly buildings. While these storage facilities are essentially giant concrete boxes, some well-known national self-storage chains have built their branding around giant orange or green buildings. That’s great for getting attention and building brand recognition… until you try to put one near a suburban neighborhood. These market leaders have successfully tainted the perception of what a self-storage facility looks like and it is a major factor in why the idea of a self-storage facility is often greeted with initial skepticism and scorn.
  • Xenophobia, classism and elitism- Home owners in nice suburbs will not say it out loud but they worry – If you build that here, “undesirable people” from out of town or from the bad side of town will come here. It all feels a little sketchy. “What are they storing in there anyway?”

Self-storage developers have a great story to tell focusing on the increasingly needed services they provide, and the benefits of this low intensity use compared to other potential or allowable uses on any particular site.  Talking to neighbors early is absolutely crucial. Let them hear about the project from you, educate them on the use and try to invest them in the process.

Address the ugly issue right off. Let neighbors know that this will not be like other self-storage facilities they may have seen. You will want to work with them to come up with a plan that will benefit and enhance their community. It’s that giant ugly wall that scares them but there are an endless number of potential solutions to not only minimize that impact but actually turn it into a project asset.

Every project, plan and site are different but leveraging demonstrable support is always important. Maybe its potential local residential or business users or it could be municipal workers who stand to benefit from the additional tax revenue. While you may find support from those who see this use as better than other more intense uses, be careful to not sound like you are threatening that if you do not get approved for self-storage, you will build something less desirable. Those threats, real or perceived, can easily backfire.

[1] https://www.ibisworld.com/industry-trends/market-research-reports/real-estate-rental-leasing/storage-warehouse-leasing.html