As home building company patriarch John Osborn looks at an open chunk of land for the first time, he is rarely thinking about elevations and architecture. He's thinking potential. Already, Osborn is tinkering with a slew of creative ideas for the site. To him, a community is a reflection of the surrounding area's heritage: character, energy, and spirit. Osborn, CEO of Village Homes of Colorado, is known for his visionary approach to community building, land use, and design. His 22-year-old company's name is much more than just a signature. To him, a village means a place of harmony as much as it means a house with a roof over one's head.

His “placemaking” philosophy goes something like this: Take an empty piece of land and transform it into a unique living environment. Basically, it's going beyond just building a neighborhood. To Osborn, placemaking is creating a community where people want to live and build memories, step outside their homes, and feel a sense of intimacy and closeness. So rather than build a conventional cookie-cutter community, Osborn sticks to a land-planning technique that is imaginative and vibrant.

“We focus on the heritage of the area, and anything interesting we can play off [it],” Osborn notes. “We also look at the site's special physical features and the ground's prior uses. We coalesce all of our ideas and decide on what's going to make the community unique.”

OPEN SPACE: Kimball Hill Homes at Settlers Ridge, a TND-style development in Chicago's suburb, set aside as much as 44 percent of its acreage for preservation. Not a bad strategy to take, especially in light of land position's role in the challenges that builders face in the housing market. Today, good land planning can easily mean the difference between what's likely to sit as unsold inventory for months or what can be notched as an order, which will lead to a closing, based on the unique values it may have in a home buyer's mind. What's more interesting is that innovative land use may be the key, not only to inventory turns, but also to more profitable ones. From a home buyers' affordability standpoint and a cost-containment perspective, home builders and developers are looking to extract greater rates of return on lots by adding density to tracts. As a result, more builders are thinking up innovative land use and planning methods—in an effort to get the most out of whatever size land parcel they can get their hands on. To them, no parcel is too small or too big, as long as it can be mined for its ability to attract home buyers in a tougher market.

PLAYING BY THE RULES As much as builders take pride in infusing their developments with unique personalities, they have to conform to strict policies and development guidelines, often set by the landowner himself. Although this might sound like a sticky situation, builders tend to come up with ways to adhere to the rules, yet still manage to sketch out a land-use design with its own distinct flavor.

“Land prices are going up, construction costs are accelerating, and it's getting more difficult to obtain entitlements,” says Ralph Spargo, Standard Pacific Homes' vice president of planning for its Orange County, Calif., division. “As home prices normalize, these factors have a significant effect on the bottom line. All of these issues force builders to look at new ways to approach the planning process, especially in markets where land prices are exceptionally high. It's also forcing builders to think of more creative higher-density solutions that will address the needs of both landowners and jurisdictional agencies.”

A number of builders choose to offer more mid-rise or high-rise products to take advantage of a smaller land space, whereas other builders are penciling out neo-traditional/pedestrian-friendly developments to offer buyers something out of the ordinary. And that's what it's all about—taking a piece of land and nurturing it to the next level so that it can exert magnetism in a difficult selling environment.

BA-DA-BING, BA-DA-BLEND For example, Kimball Hill Homes took a unique land use and planning approach to develop a vast tract of land in Sugar Grove, Ill., in western Kane County, a Chicago suburb. The development, spanning 1,300 acres, is called Settlers Ridge. Here's where Kimball Hill took a different route.

As master developer of the site, the builder blended two very distinct land-use concepts—conservation design and traditional neighborhood design (TND)—at Settlers Ridge. The builder could have opted to plot down homes in traditional subdivisions, but it had something more in mind.

Under the conservation design model, Kimball Hill will set aside as much as 44 percent for open space, preserving the site's native plants, in an effort to keep up its rural prairie landscape. Settlers Ridge will also offer walking trails and nature parks. The site will feature more than 2,600 residential units, an average two units per acre.

Learn more about markets featured in this article: Los Angeles, CA, Denver, CO.