Debate of Subdivision Morals

Debate of Subdivision Morals

New to Real Estate · Indianapolis, IN · Member since 2013 · 170 posts · 23 votes

I'd like to talk about this topic with everybody because I feel its a legitimate problem. WIth a recession upon us we know the housing boom was part of it. Including the fact that some entire housing developments were made just for people who couldnt afford them.

Do you ever look at airial photography and plot viewers and think to yourself "man, that guy subdivides like a jack###"? Some maps tell house density, ranging from 1 to 4 or 5 dwellings per acre of land.

When will developers draw the line between putting people in danger and trying to make a profit? Now I know the idea is to get as many as you can, but when one house catches on fire and takes 2 more with it, there is a problem. It dont matter what the extent of the damage is, most of the time its bad, especially when houses are 20 - 30ft apart. This would be an example of roughly 3+/- houses per acre.

There was a development nearby years ago, i seen for myself. These houses that people were charged anywhere from 85,000 to 120,000 for sure did get the shaft IMO! When you look at all the prefab walls, not 1 2x4 was whole. Instead spliced and glued together in pieces no more than 18 inches long. Things like the storm sewers lacked proper bedding material for code that would wash out easy under asphalt. Oh yea, and the asphalt was ontop of dirt. No stone subgrade. So you get all these junk cracker boxes that aint worth what people are paying for then they default on their loans? No wonder the bailouts had to happen! I mean duh, come on!

I would not buy a house in these types of neighborhoods. The only way i would buy in a neighborhood like that is if i could get 5 houses together for no more than 50,000. Keep one house, demolish the house on both sides of me, and 2 behind me while im at it. Afterwords it would be questionable if i would go ahead and do the house i'd want to keep, infact i would if it was on a concrete slab, becasue you cant get to the utilities without digging inside of your house.(common sense went out the window again didnt it?). I wouldnt care about the hastle with permits and utility disconnects, it would bring me joy to go in and have 5 houses down and cleared out in less than 2 to 3 days.

So with all this said, we got these hands off landlords that try to make money by marking up what somebody else put there further inflating the price on the junk house, in the process of all this, a house may sit for years. Lets say it develops a gas leak because nobody checks on the property? The gas company has to come out a few times, luckly the house doesnt blow up and kill the neighbors or somebodies kids playing in the street..

I say they should make a federal mandate that you cant develop more than 1.5 to 1.75 an acre for starters. Houses with 40 to 50ft between them would be better, plus you would have value in extra land and would benefit the consumer. This would be a appealing for the sale.

If you are a developer to be reading this, I hope you take this into consideration. You dont have to loose the shirt off your back but you dont need be greedy either. You might miss out on some money in the short term but the good you pay forward will always come back to you. After all, isnt that what this forum is about? Sharing information helps alot of people unlock potential they didnt know they had once they learn to see through smoke and mirrors.

Good day to all.

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J ScottPro Member
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Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y

You seem to be confusing shoddy building practices with building density. Just because there is a high density of housing doesn't mean the builder cut corners or is putting anyone at risk.

By your arguments above, builders should never build townhouses, apartments, row houses, etc., because a fire in one unit can threaten other units. Does that make sense to you?

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    13y

    You seem to be confusing shoddy building practices with building density. Just because there is a high density of housing doesn't mean the builder cut corners or is putting anyone at risk.

    By your arguments above, builders should never build townhouses, apartments, row houses, etc., because a fire in one unit can threaten other units. Does that make sense to you?

  • Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
    13y

    A federal mandate for density guidelines? No thanks. Do you realize that by using the standards you suggest that there would essentially be no chance that the working class or even large portions of the middle class could afford to buy a new house?

    I don't see where the line between profit and putting people in danger exists with regards to density.

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    In fact this "new urban" trend is moving toward higher densities, not lower. I don't think the "recession is upon us" any more. I drove around quite a bit of the area near downtown Denver recently when my sister was looking for a new apartment and I was amazed by the amount of construction. Its all high density, though. Duplexes/triplexes and then multi-family. The existing zoning where my residence is specifies up to four units per acre, and those can be single family or duplexes. The city's new plan pushes that up to 10 units per acre, and 19 per acre for my next door neighbor. Whether that will happen or not remains to be seen. But if it does, along with some of the other things they want (mixed use buildings along the main roads and a generally more walkable environment), I'm OK with it. My wife not so much, and some of my neighbors are strongly opposed.

    If anything, there's a strong "moral" argument against low density sprawl and for higher-density more centralized housing. My sister moved out of a house and into an apartment for 1) the amenities, and 2) proximity to her workplace. OTOH, I'm a believer in individual rights and think people should be able to choose. So, if you want a larger house on a larger lot and you can afford it and put up with the commute, I think you should be able to do that. I think it makes little sense to buy five houses in a higher density development and knock four of them down. Makes more sense to just buy in an area with the density you want. But if you want to do that and you can afford it, knock yourself out.

    Part of your argument is around shoddy building practices. I'm a strong believer in building codes. Look at Bangladesh where lack of building code enforcement has killed going on 1000 people. I saw the same sort of pushing to and over the limit in India when I used to do (non building) work there. What you describe is the same bad practice, if it doesn't conform to code. That said, just because you like what you see doesn't mean its non-conforming. "Prefab" sounds to me like structural insulated panels. Those are different than stick built and follow different rules. That doesn't make them bad or wrong. Nevertheless, shoddy building should be and isn't allowed. That does mean enforcement is always as strong as it should be or the money doesn't change hands to look the other way.

  • Investor · Northeast, OH · Member since 2012 · 239 posts · 106 votes
    13y

    In my mind, zoning is and always should be local. The communities have a far better idea of what is good for them than the Federal government does. Some communities do mandate lower densities, while others do not. Certainly utilities and traffic capacity play a part as well.

    Also, most areas on septic systems also have minimum lot sizes to allow adequate leaching/percolation for the system.

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    Oops, I meant "just because you don't like what you see doesn't mean its non-conforming."

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    Ryan Watson Seriously? First off, every area of the country has building and planning departments that set the standard for construction in their area. In addition, there's health and safety codes that must be met in order to keep people safe. Nobody is legally building houses with all the dangers you describe.

    Any developer will be happy when developing a subdivision to sell larger but fewer lots, if buyers are willing to make up the loss! The cost of land is a big part of what dictates pricing, along with the cost to develop. A developer buys a property for X amount of dollars, and has to put in all the infrastructure to support the project (underground utilities, roads, curb, gutter, sidewalk, drainage, deal with any environmental concerns, soil stabilization issues, earthquake requirements, cost of a neighborhood park, contribute to a nearby traffic signal, etc. and many unforeseen things) ALL of these things add costs to a development. Once they are in, the developer has to build the houses, with ever increasing material prices, hire subs, pay workmans comp insurance, property insurance, liability insurance, and worst of all, the fees for permits, etc. YEP... us developers are just robbing people blind with all the easy money we make! We should just do all of this as a public service, so that everyone in America can have a home, whether or not they can afford it.

    It takes a lot more than looking at Google Earth to understand what goes into developing a subdivision. Go educate yourself as to exactly what it takes and then tell me how horrible and greedy developers are.

  • Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
    13y

    Ryan, developers aren't interested in some kind of pay it forward karma. They are interested in making a profit. Just like the rest of us.

    The last thing we need is a bunch of folks from the federal government telling developers how to do their craft.

    The end user always absorbs the costs associated with any product or service. Forcing developers to maintain certain housing density's will only drive up the cost of homes or drive down the size and quality of homes.

  • Civil Engineer · Orange County, CA · Member since 2012 · 189 posts · 45 votes
    13y

    Ryan Watson
    I would have to agree with J Scott. It seems you are confusing cutting corners with building density.

    I think the key phase to explore is "I would not buy a house in these types of neighborhoods." A Developer's goal is to supply housing and make a profit by doing so exchanging value. That is really tough to do if nobody buys your houses cause they are too close together. Developers spend a lot of time and money researching the market even before starting a project that you never see and on project that may never happen as well.

    If you want some light reading you can familiarize yourself with the IBC (International Building Code) which has been adopted by most states in the US. The majority of the code is geared towards fire prevention for different types of structures as well as structural integrity. The US is leading the way since it was the regional US building codes in different areas of the country that was combined to make the IBC.

  • Civil Engineer · Orange County, CA · Member since 2012 · 189 posts · 45 votes
    13y

    Ryan Richard
    I would have to disagree with the pay it forward karma. I am thankful for the builder that built my home so my family can live in it. Cutting corners and shoddy work is a different story.

  • Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
    13y

    Chad Ballard, I'm not sure what you're commenting on. The OP suggested that builders should consider not making money or reducing their profit in order to "pay it forward". My point is that developers don't base financial decisions on paying it forward, they base it on returns.

  • Civil Engineer · Orange County, CA · Member since 2012 · 189 posts · 45 votes
    13y

    Ryan Richard, I see a profit as paying it forward. If you provide something of value to someone else, profit reflects the value you added to the transaction. Now if you throw in an unethical party in the transaction that is not truly adding value then you get problems.

  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    13y

    Here in eastern Canada the rethink on urban planning and a move towards higher density and more walkable/livable cities has been slow coming, but is finally arriving.

    The post-War subdivision sprawl grew-up, matured and demanded the services and amenities of the cities they surround {sewer & water, transportation, etc} while staying beyond the tax reach of those same cities. As a consequence, cities are running larger deficits and going bankrupt and the citizens in those Cities are paying higher taxes in support of amenities shared with the subdivisions (schools, arenas, etc).

    The initial attempt to address this imbalance of tax-base to services was an accelerating trend towards amalgamation of bedroom communities that we have seen over the past 20-years. While this has increased the city tax-base it has also increased the service costs and cities cannot afford their geographical footprint. The new version of the local municipal plan being developed here has the city wanting to retrench and establish a greenbelt around itself and concentrating on promoting higher density in-fill within.

    I agree with Jon Holdman, there should be personal choice. If you want the 4000 sq ft house on 1 acre, go the perimeter subdivisions and purchase it, but do not expect the same level of infrastructure services as the fellow with the stacked row-house downtown ... unless you are willing to pay the same tax rate per square foot.

    There is room for both types of development, we may just have to adjust our expectations of being able to live in the 'burbs but enjoy the city life.

  • Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
    13y

    I was going to immediately point to apartments and skyscrapers as a fallacy in your logic, but J beat me to it. Anyways, I think you hit the nail on the head with this quote:

    "I would not buy a house in these types of neighborhoods."

    There's your answer-- don't buy there. Nobody forced anyone to buy there. Buyers made those decisions, and lenders made the choice to loan them the money.

  • Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
    13y

    People buy what they can afford. Most people can't afford anything better than a ho-hum subdivision cookie cutter house. Or maybe they can, but they aren't willing to give up their 200/month cable bill and weekley trips to Khols and Target. That's life.

  • Tom SpaethPro Member
    Investor · Denver , CO · Member since 2011 · 129 posts · 59 votes
    13y

    On the density issue. Have you been in any city recently. The density in cities far exceeds what you are looking for. And I agree I no longer want to live in the big city, but lots of people do. In Chicago lots are only 25 feet wide. That's pretty dense. Other than 1 little fire in the late 1800's after which they stopped building wood buildings attached to each other there is no real problem. You don't hear about fires taking out multiple buildings very often. Heck look at Colorado springs last year. One fire took out all sorts of houses in a subdivision. Good codes prevent the problems not the actual density.

  • Denver, CO · Member since 2012 · 218 posts · 48 votes
    13y

    I couldn't disagree with the original poster more. I currently am developing infill projects in the city. My current single family project is on a 25 foot lot, and the structure is 22 feet wide. I have 18" to the property line on either side.

    My partner and I designed and developed a multi million dollar house in Denver on a 33 foot lot, the house is 23 feet wide and about 4700 sq feet.

    My current development project is an 11 unit, on a 50x125 lot. Density should be used in context, however the areas I want to be in in my market demand high density.

    In fact tonight I will be attending a micro housing competition put on by Modern In Denver, a magazine and the Denver Architectural League, a group my partner founded.

    A quote from the event invitation.

    "Living smaller sounds great, but also vast and broad without real-life perimeters. Modern In Denver is proud to be a sponsor (our publisher, William Logan, is one of the judges!) of The Micro House Ideas Competition along with the Denver Architectural League, Roth+Sheppard Architects, studio 2b, hobbs:design and Zeppelin Development.

    The competition brings the concept of micro housing home. Participating designers and architects were charged with creating a new housing typology, an 8 unit micro housing complex near 3457 Ringsby Court, located across the street from the entrance to the TAXI community. Their entries produce answers to questions dealing with thrive-ability, prefab design and ultimately living in smaller, more efficient spaces."

    My focus is different than most on BP, but one of the things I try to do is stay ahead of the game on trends. All of the data shows that whats important to the 25-34 year old is not their home anymore, but rather the amenities and entertainment that is around it. if it takes living in 375 sq feet to be near this, people are willing to pay top dollar. My partner was quoted in the Denver Business Journal just a few months ago on the same issue. Link to the article:

    http://www.bizjournals.com/denver/print-edition/2012/10/26/metro-denver-apartment-trends-mirror.html

    I have, nor do I ever plan to live a sub-urban area. Like I said earlier, density should be used in context, and where I invest and live it happens to be very dense.

  • Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    13y

    I Ryan Watson think you might want to re-evaluate your comments here. If you don't like the higher densities you do realize there are already processes in place right now.

    There are city council meetings, zoning commissions and meetings, variance hearings ect ect so you and everyone that complains about density has every right to prevent these things, but I have a feeling you and others are too lazy to do so. I know because I've been to some of these meetings when they effected me and I didn't want the higher density in the area I lived and there usually weren't a lot of people there even though it is an open public meeting.

    There is also another simple option. Look at google earth and if you'll notice there are HUGE areas of green all through the "heartland" with the densities you want often just an hour outside of a major city, so MOVE THERE and let people that like the density move to town.

    P.S. I believe you probably owe Karen Margrave and any other developers an apology because what you said in your post definitely was a slap in the face to her and every other developer on this forum. I have seen nothing but high ethical standards out of her and the others here, and they would probably all fit your criteria of bad Mr. Developer to a "T".

  • Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
    13y

    Chad Ballard, the idea behind "pay it forward" is that you don't profit from the transaction. In turn you expect the recipient to perform the same act of service, free of charge, to someone else. I'm not sure how you can relate profit and value with acts of service/charity.

  • Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
    13y
    Originally posted by Matt Devincenzo:
    I

    P.S. I believe you probably owe Karen Margrave and any other developers an apology because what you said in your post definitely was a slap in the face to her and every other developer on this forum. I have seen nothing but high ethical standards out of her and the others here, and they would probably all fit your criteria of bad Mr. Developer to a "T".

    You grow thick skin in the development business. Every city commission meeting there are people with very similar opinions of developers who like to come share their .02 which is often accusatory and not at all based in reality.

  • Civil Engineer · Orange County, CA · Member since 2012 · 189 posts · 45 votes
    13y

    Ryan Richard I stand corrected with the "pay it forward". It was not the correct phrase to convey my perspective. Mr. Watson seems to believe that profit must be traded for "good" in order to make a difference (scarcity mindset). My view is that if a good job is done profit is my reward for the service provided (not service is the charity perspective). Yes, there are people who rip people off but that is not really adding value to a transaction.

    I also agree completely that there are already enough regulations (i.e. building codes) and that while some ideas might seem to have good intentions the reality is, like you stated previously, that the costs all get passed down to the customer. It is a balance and we have been swinging in the wrong direction for quite some time now.

  • New to Real Estate · Indianapolis, IN · Member since 2013 · 170 posts · 23 votes
    13y

    Karen Margrave Do you see anything wrong with this picture? I certainly do.

    I work in excavating for a living and i can tell you about anything you want to know when it comes to the ground work for a neighborhood. I may not know much about the paperwork but i can tell if somebody is getting screwed or not.

    As for the other folks, Im not getting density and cutting corners mixed up. Just so happens they both played into the example.

    Apartments and town homes have their place. When they build them they need to make sure they build fire walls between units that go all the way to the roof. Fire does spread via the attic.

    So here is something like im talking about. Less density. Is it really too much to ask to build like they did back in the 50's where people actually have a yard? A nice ranch style home around 1700sq ft and roughly a half acre lot. I dont see why you cant sell a home for less than 150,000 and have some decency.

    If builders could keep outragous markup down it would be feasable.

  • New to Real Estate · Indianapolis, IN · Member since 2013 · 170 posts · 23 votes
    13y
    Originally posted by Matt Devincenzo:
    I Ryan Watson think you might want to re-evaluate your comments here. If you don't like the higher densities you do realize there are already processes in place right now.

    There are city council meetings, zoning commissions and meetings, variance hearings ect ect so you and everyone that complains about density has every right to prevent these things, but I have a feeling you and others are too lazy to do so. I know because I've been to some of these meetings when they effected me and I didn't want the higher density in the area I lived and there usually weren't a lot of people there even though it is an open public meeting.

    There is also another simple option. Look at google earth and if you'll notice there are HUGE areas of green all through the "heartland" with the densities you want often just an hour outside of a major city, so MOVE THERE and let people that like the density move to town.

    P.S. I believe you probably owe Karen Margrave and any other developers an apology because what you said in your post definitely was a slap in the face to her and every other developer on this forum. I have seen nothing but high ethical standards out of her and the others here, and they would probably all fit your criteria of bad Mr. Developer to a "T".

    I dont owe anybody an apology. I see the world in black and white and morals are going down the drain every day. Im not apologizing for being real, i speak my mind and if you dont like it then sorry about ya. Acknowlaging there is a problem is the first step to solving it. If anybody gets mad then thats their problem. I see your from california, that explains where your post is coming from quite well. Most of you in that state aint in touch with reality anyway.

    The fact that people actually buy into these dense communities shows their lack of ability to think outside of the box. They think just because someone puts it there its ok. Reguardless of how well built the community is its still dangerous to the residents if one house catches on fire and takes 2 more with it.

    I'm perfectly ok standing alone on this issue. its ridiculous.

  • Civil Engineer · Orange County, CA · Member since 2012 · 189 posts · 45 votes
    13y

    Ryan Watson, everyone has their opinion. I myself would prefer more space however the trend is towards higher density and people are buying the homes. If there is demand then builders will build and buyers will buy. Nobody is forced into these homes.

    As for the outrageous markup, yes Developers make money if they want to stay in business but I wouldn't call it outrageous. There are other businesses with higher margins.

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    Steve K Most people have NO idea all the hurdles developers have to jump over in order to bring a project to the point of actually building it. In a subdivision we built, we were hung up over a year while the Army Corp of Engineers and the City fought over whether or not a gate should go in a fence around 'sensitive' ground (a gully). Once we finally got our map approved and built, we offered upgraded cabinets, flooring, lighting, countertops, appliances inside the house as standards. Outdoors we had concrete mow strips, stamped concrete borders on the driveways, etc. again standard. It was by far the best buy for the money in town - we offered those features as standard, because we know how hard people have to work for their money, and what it takes to raise a family, and though we would have made less money, we thought it was worth it to offer good value. However; the market crashed while we were half way into the build out. The year lost because of the Corp and City made the difference in the project. But, that's how it goes, you pick up the pieces and move forward.

    Here in so Cal land is at a premium, and areas near the coast are like Grant P. describes. They're postage sized lots. But, it's unbelievable the multi million dollar homes built on those tiny lots!

    The point is, it all depends on the costs of land, the zoning density, and what it will take to develop it, as to the end price we have to charge for homes.

    Ryan Watson Google Huntington Beach, CA, and look at the lots there, you can't find one cheaper than $1,000,000! Even if you can find a "deal" for a $350,000 lot in Orange County, the house is going to be $1,000,000 or more! It's crazy, and that's why density has to be so high.

  • New to Real Estate · Indianapolis, IN · Member since 2013 · 170 posts · 23 votes
    13y

    Chad Ballard I understand nobody is forced to do it but all im saying is hopefully some developers will break this trend. Why fallow when you can lead?

    I have a feeling some people have misunderstood my pay it forward statement. Developers should make money, after all its why they are in buisness, but it wouldnt hurt to build a few less houses on a street. Especially if it prevents other neighbors from being effected in the event of a fire.

    Plus the homeowners would have a little extra value in their home with the extra land space.

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