The upside of infill development

Home builders are shifting their focus from greenfields to smaller-scale infill projects close to jobs, transportation, and commercial opportunities. A successful project can become a catalyst for neighborhood transformation.

For that to happen, builders must navigate the rezoning process, win over the neighbors, and ensure the availability of mortgage financing. Nobody knows this better than Sarah Peck, who builds new homes in distressed areas around suburban Philadelphia. “You have to be sophisticated about understanding mortgage finance,” says the president of Progressive Housing Ventures, Malvern, Pa. “That’s gotten more challenging with the more stringent underwriting requirements, but financing is still out there.”

5 guidelines for successful infill
• Pick sites that are accessible to jobs, transportation, shopping, and other amenities.
• Be patient and persistent. Rezoning and design review can be a lengthy process.
• Nurture relationships with neighbors and municipal leaders. Listen to their concerns and demonstrate why your proposed project will benefit everyone.
• Make sure mortgage financing will be available to prospective buyers.
• Create a design concept that respects the architectural context of the neighborhood.

Toby Bozzuto, president of Bozzuto Development Co., Green­belt, Md., a large-volume multi-family developer in the Mid-Atlantic region, stresses the importance of good design. “The key is to respect the historic fabric of these neighborhoods,” says Bozzuto. “It doesn’t have to look the same, but it has to add something that resonates with customers so they will choose to live there.”

Many builders have turned a profit with market-rate infill, but there’s also a dire need for affordable housing, especially in working-class communities. Home builders might consider partnering with large employers such as hospitals, school districts, and universities, says Robin Hughes, president of Abode Communities in Los Angeles. “Using the land resources of those employers — I think that’s the connection,” says Hughes.

Revitalizing historic anaheim

With their stucco walls, simple building forms, tile roofs, and deep, recessed windows, the Garden Houses at Colony Park have a Spanish flavor that is in keeping with the architecture of Anaheim’s historic district. Garden House side yards maximize private outdoor living space on small lots. Visible at lower left is a doggie door that connects the laundry room to the yard.

In the historic Colony district of Anaheim, Calif., Brookfield Homes plans to build a total of 640 homes on a 40-acre brownfield site previously occupied by warehouses, a lumberyard, and a lock factory. It took almost nine years to complete the environmental cleanup process, says John O’Brien, VP of urban infill for the Costa Mesa, Calif.-based builder. 

The new community, Colony Park, will offer a variety of townhomes and single-family homes. The first two phases of townhomes are sold out. The single-family Garden Houses were introduced in response to buyer requests for more yard space, O’Brien says. “Our surveys showed that small-lot detached would be very successful,” he says.

Robert Hidey Architects of Irvine, Calif., designed 62 detached homes on 35 x 75-foot lots, for a net density of 12.2 DUA. The lots, which have rear-loaded garages, utilize a side yard to maximize private outdoor living space. The open floor plans make living areas feel larger and flow seamlessly from side to side. Expansive windows and glass doors flood the interiors with natural light.

Three plans are offered, ranging from 1,724 to 2,071 square feet. To date, 32 Garden Houses have been sold at prices from the mid-$400,000s to the mid-$500,000s. “There’s virtually no competition for new-home product at this price point,” says O’Brien. Garden Houses sited next to amenities such as the Pool House — “a world-class resort tucked into the infill residential” — have sold for more than $500,000, he adds.

The snowball effect

Arbor Heights, a new infill community in Norristown, Pa., has spawned street improvements and the renovation of old buildings throughout the neighborhood.

Arbor Heights in Norristown, Pa., featured in the October 2010 issue of Professional Builder, is in a historic district that used to be known for its upscale mansions. Progressive Housing Ventures built 12 affordably priced townhomes on a particularly blighted city block and sold them to first-time buyers.

“Since the project was completed there’s been a nice flurry of activity,” says Peck. Existing homes are being upgraded and vacant buildings are being renovated for sale or rent. A building across the street from Arbor Heights that had been empty for 10 years was turned into a restaurant. “It’s not a direct cause and effect, but there is a lot of synergy with the local businesses,” she says.

In the beginning, Peck had to deal with a lot of negativity. “It turned out that a lot of it was perceptual and left over from the 1990s,” she says. “The locals were too close to the situation. In fact, things had been moving in the right direction in the last couple of decades. Sometimes it takes a fresh perspective from someone who’s not from the neighborhood.”

Peck acknowledges that there’s a fair amount of risk associated with any infill project. “I had absolutely no idea if there was a market for Arbor Heights,” she says. “But I found that with the right sales pitch and the right financing package, I really could sell there.”

She notes that the Com­mu­nity Reinvestment Act (CRA), enacted in 1977, encourages lenders to provide mortgages in distressed areas within their target market. “When it comes time to expand and acquire new branches or merge with other banks, their CRA track record is strongly scrutinized by regulators, so they’re very anxious to show that they’re doing this kind of community lending.”

Peck has since started another project two blocks away and already has a waiting list.