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Urban locations are rife with opportunity for savvy builders willing to do their homework.

City Lights

Urban locations are rife with opportunity for savvy builders willing to do their homework.

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    Muffy Kibbey

    Acting as architect and developer, David Trachtenberg bought the former Rose Grocery, a century-old retail building that had stood abandoned for decades.

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    Muffy Kibbey

    The architect keept the original sign and left space for a courtyard between the units in the back and the garage in front.

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    Muffy Kibbey

    Owners are greeted by a warm wooden gate that leads to a private courtyard and garden.

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    Muffy Kibbey

    The private courtyard of the front unit.

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    MUffy Kibbey

    Trachtenberg kept the design and interiors simple to appeal to a wide market.

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    Muffy Kibbey

    Each house features Brazilian cherry floors and 10-foot ceilings.

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    Muffy Kibbey

    Despite the large doors and abundant windows, each unit offers privacy.

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    Muffy Kibbey

    One of the units at night.

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    David Trachtenberg Architects

    A site plan and floor plans of the project.

For 13 years, Patricia Smith and her husband lived in Madison, N.J., a small suburban town about 27 miles west of Manhattan. But when Smith’s husband retired from his job as the president of a small commercial insurance firm, the couple wanted to move back to the West Coast and envisioned a different type of living arrangement.

Fortunately for the Smiths, about 2,500 miles away in Berkeley, Calif., David Trachtenberg Architects was putting the finishing touches on the Rose Street Townhouses, a two-unit urban infill project offering the kind of urban living the Smiths wanted. “We were fortunate enough to find out about this project, so we jumped on an airplane and came out and looked at it,” Patricia Smith says. “We thought it was perfect, and we purchased it on the spot.”

The Rose Street project sits on the site of an old grocery store that was abandoned for four decades before David Trachtenberg purchased the property. The firm’s design incorporates the existing grocery façade as part of the garage, and the site plan gives each 1,500-square-foot home its own private courtyard. Centrally located, the project offers access to public transportation, retail, commercial, and other urban amenities. “Every day we woke up and said, ‘Man, are we lucky to be living here,’” Patricia Smith says.

Rose Red Built on the site of a former grocery store, the Rose Street project incorporates the old buildings façade in the front-loaded garage. Each unit features a private courtyard, 10-foot ceilings, and abundant natural light.

Photos: Muffy Kibbey

Rose Red Built on the site of a former grocery store, the Rose Street project incorporates the old buildings fa§ade in the front-loaded garage. Each unit features a private courtyard, 10-foot ceilings, and abundant natural light.

It’s very likely that the future of housing will depend on buyers such as the Smiths and on urban projects such as the Rose Street Townhouses. In a 2010 report, “Housing in America: The Next Decade,” John McIlwain, a senior fellow at the Urban Land Institute (ULI) in Washington, wrote that seismic demographic shifts, especially the aging Baby Boom generation and the rise of their children (Generation Y), will rock the housing industry’s future. “Together with the Baby Boomers, they account for over half of the U.S. population,” McIlwain writes.

Town, Not Country

Surveys show that both groups like the idea of urban living. ULI points to a 2008 survey by Robert Charles Lesser & Co. (RCLCO), a Bethesda, Md.–based real estate consulting firm, which found that 77 percent of Generation Y wants to live in an urban core, not in the suburbs where they grew up. “They want to be close to each other, to services, to places to meet, and to work, and they would rather walk than drive,” the ULI report says.

With demographics providing a gravitational pull toward urban areas, the future isn’t bright for far-flung surburban subdivisions. “The demographics of the next decade indicate that the market for urban living will continue to grow,” says ULI. “There will be regional winners and losers as markets recover, and the strongest markets will be found in places that provide a vibrant 24/7 lifestyle.”

Builders that capitalized on the infill and urban trend early had a leg up during the housing recession. For Bethesda, Md.–based EYA, urban infill was the company’s focus right from the start. “EYA was founded in 1992, so for 20 years, we’ve focused on urban infill as our particular market niche,” says Bob Youngentob, president of the company. “Our feeling was that there were not a lot of other builders/developers concentrating on larger-scale urban infill projects. There were plenty of people building single-family homes in the suburbs, and there were plenty of apartment or multifamily developers. But there were very few [companies] building higher-density, stick-built product in urban locations.”

Rose Red Built on the site of a former grocery store, the Rose Street project incorporates the old buildings façade in the front-loaded garage. Each unit features a private courtyard, 10-foot ceilings, and abundant natural light.

Photos: Muffy Kibbey

Rose Red Built on the site of a former grocery store, the Rose Street project incorporates the old buildings fa§ade in the front-loaded garage. Each unit features a private courtyard, 10-foot ceilings, and abundant natural light.

Even back in the early 1990s, Youngentob says, the company saw a preference for this type of living. “It wasn’t necessarily for the majority of home buyers, but for a significant minority of buyers that proximity to retail and amenities was very attractive to them,” he explains.

Though EYA often builds at a fairly high price point, a diversity of projects is also important to the company. One of its three current projects in the Washington area is Capital Quarter, a mixed-income community that’s one-third public housing, one-third workforce, and one-third market rate. But because the firm uses the varied architecture of classic row houses, it’s hard to tell one type of housing from the next.

Building urban infill housing in a market such as Washington, which has low unemployment and relatively stable housing prices, is not much of a risk, but are there opportunities in less robust cities? Architect Brian Phillips, a principal at Philadelphia-based Interface Design believes there are.