Developers fear red tape strangling housing revival
Published: Sunday, November 3, 2013 at 5:44 p.m.
Last Modified: Sunday, November 3, 2013 at 5:44 p.m.
The vision of developments with more green space, a mix of housing types and commercial space that Alachua County commissioners codified into land regulations nearly a decade ago is starting to take tangible shape, with developers moving forward on projects such as Celebration Pointe and Springhills.
But developers who build suburban single-family neighborhoods are concerned that as the cost of complying with the regulations is added to home prices, working-class families who prefer a house with a yard over apartments will be priced out of the market, pushed instead to outlying towns with less expensive real estate.
The various rules governing development have been in place for seven years or more but have been little used, with so many projects approved under prior rules put on hold when the housing market crashed.
County Growth Management Director Steve Lachnicht said there are about 4,000 lots already approved that have yet to be built in the unincorporated county.
With the housing market recovering and the pace of new home sales increasing, builders foresee the compliance costs becoming more of an issue as they burn through those lots.
“We probably have five years' worth of lots developed or that have approvals,” said Adam Bolton, president of Robinshore.
After that, he said builders probably will look to Alachua, High Springs and Newberry, where there are a large number of approved lots with established prices.
Tommy Williams Homes is one of the few builders developing a single-family home project under the new rules with the 472-home Finley Woods development off of Williston Road southwest of Gainesville.
With 118 wooded acres, payments to the county for tree removal mitigation will add as much as $3,000 per lot, said Todd Louis, the company's vice president. Another rule requiring that 20 percent of the land be set aside for green space might add another $5,000 since the overall development costs are spread over fewer lots. Add to that utility hookup costs that have increased incrementally over the years and building permit fees.
“That's $25,000 to $50,000 just in fees and tree mitigation per lot before we even start building the home,” Louis said. “We can't really have a meaningful discussion about affordable housing when that's your starting point.”
With that expense on top of $100 per square foot for construction, even a two-bedroom, 1,200-square-foot home would have to be priced over $200,000 for a builder to make a profit, he said.
As a builder specializing in energy-efficient homes, Louis sees an irony in regulations that were designed to be environmentally friendly when people who can't afford their homes would have to live in outlying areas in homes that burn more energy.
“We don't really get any credit for that, for the amount of trees we save as a builder because our homes are 60 percent more efficient than code,” he said. “That's 60 percent less biomass.”
Patty Moser is president of Horizon Realty of Alachua. She said several developments in Alachua, High Springs and Newberry have lower costs because they were bought in foreclosure, but she disagrees that the cost of development in those towns will be much different than in the county going forward.
She said she has seen some home buyers look at those communities after pricing homes in northwest Gainesville, but the majority choose the communities for the small-town lifestyle.
Moser said several residents of Oak Ridge in High Springs work at UF Health Shands Hospital and said it is quicker to get to work on the interstate than to drive across Gainesville.
Lachnicht said county commissioners developed the regulations in the late 1990s and early 2000s to encourage more compact growth and environmental sensitivity. After three years of litigation, the rules took effect in 2005.
Along with the 20 percent green space requirement, the regulations did away with minimum lot sizes, allowing more flexibility and more compact development to encourage a mix of housing types.
“There are a lot of things to encourage affordable housing,” Lachnicht said.
“Affordable is a range of housing, not just single-family. It's rental, condo and townhouse-type units.”
Lachnicht said there are cost savings for developers that take advantage of the more compact design since they don't have to extend streets and sewer lines as far.
The regulations also fit the trend of growing interest in mixed-use, transit-oriented development, especially among younger and retired demographics, Lachnicht said.
“The market is going there, nationally, state and locally,” he said.
Skeptics say to let the market, and not regulations, decide where working-class people will live.
“I don't think teachers and law enforcement should be forced into multi-family,” Louis said. “Most people in that price range and that category and that demographic would like a yard of their own. They would like some privacy. They would like some windows on the side of their home and not just a neighbor on the other side of the wall.”
County Commissioner Susan Baird, who is also a Realtor, said she would like more flexibility in land regulations, adding that requiring developers to add bus lanes and bike lanes in transit-oriented developments adds additional costs.
As regulations encourage more mixed housing, she said homes in Haile Plantation and Town of Tioga will sell at more of a premium “because families are always going to want yards for the kids.”
Commissioners Mike Byerly and Robert “Hutch” Hutchinson, who regularly advocate for environmental interests, did not return calls for comment.
As the Tioga developer, Luis Diaz is a true believer in the walkable, bikeable community with open space and a mix of housing space and commercial uses.
The demand in Tioga has proven that the concept works, he said. There is a waiting list to get into Tioga Town Center apartments that rent for about $1,000 a month, and the community's single-family homes that range from $200,000 to $1 million held their value through the recession.
Diaz said the regulations can be a little too restrictive, but that the county is approachable.
“They like to promote pedestrianism and community and open space, and I like that. I think most people in general like that,” he said. “But they should allow different things. The marketplace will take us in the right direction. If people like connectivity and community, they will say so with their dollars.”