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HUNTERSVILLE – Single-family residential density vs. the price of land and its development.
That’s the crux of one of the hottest residential real estate development debates in many of the municipalities just outside Charlotte, and it received one of its clearest and most compelling explanations at a Huntersville Board of Commissioners meeting last week.
The larger problem goes like this:
Some of the towns, all of which want to manage residential growth for economic reasons, do so by restricting many rural and semi-rural areas to low-density development, sometimes as low as one home per five acres.
And many established residents of the towns want it to stay that way, saying they fear their homes, which are on larger lots, will be devalued by higher density nearby, though data gathered in areas of existing conservation subdivisions does not consistently support that theory.
Critics of the low-density scenarios – not only landowners and developers but also many planning experts and environmentalists – say that approach to managed growth doesn’t always work so well for a number of financial and environmental reasons.
Former Cornelius Mayor Gary Knox, a real estate agent, calls it being “sentenced to a down-zoning.”
He and many others have another idea: conservation subdivisions. The concept and practice have been around in many Charlotte-area municipalities, such as Mint Hill, Weddington and Davidson.
But they’re just now getting some attention and traction in others as an alternative to restrictive rural zonings, including the high-growth areas of Cornelius, Huntersville and Matthews, where studies are under way to create or expand conservation development options.
The idea is to keep the number of homes allowed in a subdivision the same, but to cluster those homes on lots as small as 12,000 square feet to lower development costs and environmental impact.
Developers say that under low-density regulations, they can’t create new subdivisions to meet market demands in restricted areas because the cost is prohibitive. The market, they say, is quickly changing, expanding several population segments that want homes clustered on smaller lots that are easier to keep up in subdivisions with more open space and natural areas that are maintained by homeowners associations.
Owners of large tracts of woodlands and pastures say the taxes on their low-density properties have zoomed as development creeps closer, but they cannot sell their land for the property tax value if developers aren’t interested.
And planners, land-use experts and environmentalists steeped in new-urbanist methods say clustered homes promote walkability and connectivity and actually conserve forests and pastures better than low-density techniques.
They also say the conservation subdivisions encourage the use of public sewer and water over septic systems and wells, which are not so good for public health and environmental reasons; and lower the amount of impervious area that causes drainage problems and lawn area maintained with chemicals, which is good for the same reasons.
But from a developer and land-owner point-of-view, it’s the economic advantages of conservation subdivisions that matter most. At the root of situation, they say, is a changing market, several segments of which want to buy the same size house cheaper and with less land to maintain.
In Matthews – where a new draft unified development ordinance under consideration would expand an existing residential conservation zoning designation from a single neighborhood to other areas in the town’s jurisdiction – Planning Director Kathi Ingrish neatly summed up the increasing market demand for higher density single-family developments this way:
“As our community grows and the nation’s demographics change, new households are forming or changing over time. Empty-nesters, for example, sill want some of the traditional things in their lifestyle, but they don’t want three-quarter acre or one-half acre lots, and the new generation of buyers coming up wants something different, too.
“That’s where (conservation subdivisions) come into play. People want to get out of their houses and don’t want to have to get into their cars every time they walk out the front door. People want to eat and visit their neighbors and shop within close proximity of their homes. They want lots of common areas and less to own.”
That argument, which has been made repeatedly by developers and builders large and small in towns without residential conservation zoning designations or land-use options, got a thorough airing at last week’s Huntersville Board of Commissioners meeting, complete with dollars-and-cents estimates of the costs of low-density development vs. clustering and conserving.
New zone proposed
The Huntersville case-in-point involves landowner Alex Barnette, the executor of his mother’s will, which left 116 acres of largely vacant land to him and other family members, and requires him to sell it. He told the Board of Commissioners he wants to keep 40 acres in pasture “with animals on it” and to sell the bulk of the rest to developer Hopper Communities for a residential subdivision.
The land is in what Huntersville’s land-use ordinance calls “transitional,” areas outside high-density development in and near the Interstate 77-Statesville Road corridor but inside farther-out rural areas.
“There are stipulations in the will that we have to sell, and we want to see it done properly, to fit the town and neighborhood,” but to also do it at a reasonable profit, Barnette said.
But rather than seek modifications for Barnette’s land to Huntersville’s zoning ordinance rules for transitional areas – which now call for lots in subdivisions to average 0.75 acres, with no lots being smaller than 0.5 – Barnette and developer Hopper Communities want to rewrite that portion of the zoning code to give landowners and developers a choice between traditional and conservation subdivisions.
That’s because, Hopper Communities founder and owner Bart Hopper told the commissioners, Barnette’s is not the only property in Huntersville transitional areas he is looking at.
“We just wanted to see what could be done and not done,” said Hopper, who has development and construction projects throughout the Carolinas and in several Texas markets. “Things have changed in the costs (of development), in what works (financially) in terms of building communities. Thirty-thousand square-foot lots – that’s just huge in today’s realities.”
The new text amendment proposed by Hopper and Barnette would allow developers to create subdivisions with lots averaging 12,000 square feet and in no case less than 10,000 square feet – a little less than one unit per 0.25 acres. Lot widths would average 75 feet and could be no narrower than 60 feet.
In terms of the overall density allowed, the text amendment proposes a sliding scale based on the amount of open space preserved. At 25 percent to 30 percent preserved area, density could be 0.8 units per acre; at 30-35 percent, 1.2 units per acre; at 35-40 percent, 1.6 units; and at 40 percent or more, two units.
And, in an unusual but not unheard-of twist, the proposal would award a density bonus for any open areas in a subdivision that dedicates open space to a public agency – the town, the county, the state or the federal government – for use as parkland or greenway space. Under the density bonus, any land so dedicated would be counted at 1.5 times the actual acreage toward the amount of overall density allowed in the subdivision.
Under the current Huntersville transitional area guidelines, a 100-acre subdivision could have a maximum of 93 dwelling units. Period. Under the proposed conservation subdivision option, a developer could build anywhere from 55 to 139 units, depending on how many acres are conserved, and even more if the developer dedicates some land to a public agency.
The Huntersville planning staff report recommends the Board of Commissioners deny the text amendment because it “is inconsistent with the Town of Huntersville 2030 Community Plan.” That plan, Planning Director Jack Simoneau told the board, was researched in 2010, “in the midst of the (financial) meltdown,” and written the following year. It was intended to be revisited and possibly tweaked in 2016.
“This would move the timeline up,” Simoneau said.
But the staff report is not entirely negative: “The proposed request would provide an incentive to place these more sensitive (scenic and cultural) assets in community ownership rather than in private lots.”
In fact, Simoneau said, if the commissioners wanted to know how such subdivisions work, they could see some in Huntersville that were approved by the town before the current rules came into effect. They include the popular developments of Beckett, Mirabella and parts of Olmsted.
Costs don’t add up
In response to the staff report and questions from the commissioners, Barnette and Hopper described the financial pickle in which they find themselves, and laid out figures to back up that description.
Barnette, for example, said that he had the land in his mother’s will appraised twice – once if used for a residential development and another as farmland. There was a $1 million difference. As the executor of the will, he said, he was charged with getting as much as he can for the land.
“I can’t make those numbers or my numbers work for the landowners or myself,” Hopper said. “And the end-consumers, the homeowners, can’t make their numbers work either.”
Lots measuring 35,000 to 40,000 square feet, Hopper said, cost about $40,000 to buy, contrasted with about $25,000 for a 12,000 square-foot lot. With development costs added in, the prices go up to about $95,000 for the bigger lots and $65,000 for the smaller ones.
Using that as a baseline, Hopper estimated that the asking price of one of his homes would be $475,000 on the lot sizes now approved for transitional zones of Huntersville. The same house would go for closer to $325,000 on a 12,000 square-foot lot, he said.
“There’s not a whole lot of development profit, if any, in those numbers,” Hopper said, meaning he’s not going to be interested in buying Barnette’s property under the current lot-size restrictions.
Hopper also presented figures compiled by MetroStudy, the Houston-based new-home analytics firm that produces a quarterly report on the Charlotte housing market. It shows, he said, that only 5.3 percent of the new homes sold last quarter in the Charlotte area were priced at $500,000 and up.
“That’s what we’re dealing with,” Hopper said. “It’s close to being economically prohibitive to do (residential) development in the (transitional) zone. The usability of the land is diminishing.”
The commissioners and members of the planning board who were in attendance had questions, but appeared to be open to the idea of some kind of conservation subdivision plan, as long as it increased density in a subdivision but did not necessarily mean the residential development would have more houses than a traditional one. Under those circumstances, developers can still save major bucks because water and sewer lines are shorter and cheaper to install, lots are smaller and cheaper to develop, roads aren’t as long and rights-of-way often don’t have to be as wide – substantial costs that add up.
The board asked Hopper and Barnette to delay their request – and by law, the petitioners are allowed only one delay request – which they agreed to do.
Toward the conclusion of last week’s hearing, Simoneau seemed to signal that the petitioners might be able to persuade the town to consider making a change to the zoning ordinance, but he also advised the commissioners to be cautious.
“We need to be very careful,” Simoneau said. “They say the economy is picking up, but I am hesitant to gauge that. But it is pleasant surprise to see the market picking up. At the end of the day, it’s all driven by economics.”
