For years, Charter Homes of Lancaster, Pa., had a typical production builder's business model--design, build, and sell highly desirable home plans that could easily be reproduced on standard-sized lots.

But like many builders in the late 1990s, Charter's president Rob Bowman began encountering resistance to traditional subdivisions that gobbled up land, segregated product types, and shut new neighborhoods off from the surrounding community. The warning bells of "no-growth" policy were beginning to sound. Bowman concluded that Charter could keep doing what it was doing and face a constant battle for approvals, or try something different.

The builder opted for different. The first fruits of that decision debuted in the summer of 2003, when Charter Homes opened Millcreek, Pa.'s first smart-growth community. Building Millcreek required the company to rethink virtually every aspect of its operation, from product design and sales down to scheduling deliveries of materials and figuring out where the trade contractors could park their trucks on a much tighter site.

Charter Homes' experience at Millcreek is a mirror of the residential development landscape nationwide, as is Bowman's perspective on what smart-growth policies mean to volume builders. For all the headaches, he sees it as a do-or-die position for the future of home building. Municipalities--and the rising costs of land acquisition--are demanding a different kind of development from what's been built for the past 30 years.

"It has to work," Bowman says, within a broader community context. "You've got to get over it and get in there. I wouldn't want to be the builder sitting around waiting for people who want development on open farmland."

Even in places where open land is available for development, governmental agencies are pressing for communities based on smart-growth principles. Those hallmarks include tighter densities, open space, rear-loaded product, traffic patterns that integrate into the surrounding community, mixing product types, and placing residential product within walking distances of village retail centers.

What municipalities seem to be reaching for is a new-age approach to development: one that meshes the traditional notions of a village with the often-conflicting demands of an increasingly urban world. Some refer to it as the principles of new urbanism.

The village concept is hot because it recreates a feeling of small-town life with all its benefits, says Mack McMurry, a land-use attorney with Nossaman Gunther Knox Elliot, a California firm that represents major developers and builders.

"People in their heart of hearts want to live in Father Knows Best Land," he says. "People associate that with a lot of good values. Families were stable, kids weren't into drugs, and the local schools had good teachers. They yearn after that. You can't give them that, but you can give them some reasonable approximation."

The village model may be the paradigm for the future, says Terry Shook, principal and co-founder of Shook Kelly, a North Carolina-based urban planning and design group. People like the idea of being able to walk to get a gallon of milk or pick up their dry cleaning, says Shook.

"There are great premiums for builders that can deliver well done mixed-use main street town cores that are walkable," Shook says. "Research has shown that initial sale and resale prices of single-family homes are higher closer to the cores than ones that are further away. That flies in the face of research from 20 years ago."

Public-Private Partnerships

It also flies in the face of many of today's zoning ordinances. Builders across the country have horror stories about trying to get projects through the approval process. Dozens of builders in Virginia alone have filed lawsuits against local government agencies over permit denials related to smart-growth policies instituted after receiving initial site approvals.

It's ironic, say new urbanism advocates, that government itself contributed most to suburban sprawl by so strictly segregating uses.

"When you see sprawl, it's the implementation of public policy," says Michael Pawlukiewicz, director of environment and policy education for the Urban Land Institute. "Local government isn't out there fighting sprawl; they created it. It's illegal to build a Georgetown [D.C.] or Annapolis [Md.] anymore, and I don't know why. It's where people want to live. Think of Venice. There's no way on Earth you could build Venice today. The Army Corps of Engineers would lock you up."

But for every tale of frustration, there is a testimony about a positive public-private partnership. Issaquah Highlands, a 2,200-acre site near Seattle, Wash., has all the elements of smart growth. At build-out, the site will have 3,250 units, with 30 percent of those considered affordable housing. There are 1,400 acres of open space with parks owned by the city, a 1,000-space park-and-ride lot, an elementary school, and jobs. Microsoft has bought 150 acres for three million square feet of office space, says Judd Kirk, president of the Highlands' developer, Port Blakely.

To facilitate the development, the city created a zoning category called urban village with a 20-year development agreement governing the approval process. A separate planning commission and staff were established to handle the project; Port Blakely pays all the costs of processing. The developer has its own zoning and development standards because the existing ones didn't fit.

"There was an inherent assumption in our agreement that we would not follow the normal rules," Kirk says. "It's given us tremendous flexibility to respond to the market, not only in density and price but also in design. We have some very innovative site plans you could never get approved with normal zoning. It's been a great public-private partnership."

San Diego took a similar approach, creating a development corporation to fast-track projects, says Mick Pattinson, president of Carlsbad, Calif.-based Barratt American, which has several smart-growth projects in development. It's worked extremely well to redevelop dilapidated areas quickly, Pattinson says.

"We should be encouraging these kinds of organizations across the country," he says. "I'm convinced smart growth is the wave of the future, especially in places like California."

Lining Up Support

Across the country, builders stress the need to gain the support of area residents for these kinds of projects. In the Washington, D.C., area, the Urban Land Institute District Council formed an alliance with several other organizations representing builders, conservationists, land planners, and area businesses. Together, they review potential projects and offer a smart growth certification for those they all agree on.

"You can go to the county supervisors and say this coalition all said this is a good project," Pawlukiewicz says. "That's pretty powerful. It's improved the process and made it shorter."

The power of a consensus was especially evident in the development of Westhaven, a 1,500-acre community in Franklin, Tenn. At build-out, it will have 2,750 units, grouped in five neighborhoods, as well as a town center, retail shops, office space, an elementary school, churches, a golf course, and recreational facilities. The site is designed so that all daily needs are within a five-minute walk.

Through a series of community char-ettes, Nashville-based builder/developer Southern Land Co. was able to turn around Westhaven's substantial opposition, which was based in large part on fears that the development would be a repeat of an earlier project they all hated.

"There's a lot of pride in the local citizenship of the heritage of the area," says Brian Sewell, vice president of community development for Southern Land. "They didn't want to see it turned into strip malls and tract houses. By the time they saw the willingness of the company to listen to the desires of the community, there was a change of opinion."

Readdressing Opportunities

Planning experts are convinced that volume builders will play a critical role in the future of smart-growth development, simply because they have the expertise for building in the suburbs where smart growth is headed. It's inevitable in part because there are only so many people an urban core can absorb.

"Production builders are where the action is," Pawlukiewicz says. "If we can't get them to do this, it's over. There are a million more people in Washington or San Diego. There's no other way to do [smart-growth projects] without production builders."

To leverage this opportunity, builders already are seeing that it requires strategic changes in business practices.

"The economic engine that drives large publicly held builders is the ability to have the same product replicated in a variety of markets, so it has to have a broad base of appeal rather than a specialized one," says Jeff Kingsbury, vice president of sales and marketing for Boulder, Colo.-based McStain Neighborhoods. "For that segment of industry to respond to smart growth requires a different mindset."

That definitely applies to site selection. McStain has for several years been building in a redevelopment area of a former Air Force Base. It's now heavily involved at the former Stapleton Airport redevelopment site and at an old regional mall.

Those kinds of sites also require innovative product lines. To capitalize on mountain and city views at the mall site, McStain designed a three-story contemporary row house with penthouses and rooftop decks.

Chris Bove, vice president of home building for Southern Land, says the tighter lots and alley-loaded houses at Westhaven require "very creative floor plans" and a wide range of elevation deviations. Builders need to recognize why people buy in this kind of development, he says, and take advantage of common spaces to design ways for them to get to know their neighbors, such as larger porches and more outdoor spaces.

That part is easy, though, compared to the construction itself.

"You don't have an acre for a lumber drop or a place to park 20 cars," Bove says.

That means tightly managing materials delivery using the alleyways for parking spaces and bringing the trade contractors in to walk the house together and synchronize their schedules.

"If the subs are not working together as a team, it would fall apart," he says.

The sales process needs to be equally tailored to the concept. The whole message of Westhaven is communicated "from the minute they walk in the door," Sewell says. With 11 builders in the development, a centralized sales office is essential. Sales representatives explain the unique qualities of the community and the benefits of tighter densities that result in more open space for everyone.

"By the time they get to what homes we have for sale, they're pretty well sold on the community," Sewell says. "When we go into the desire and importance of architecture and control, they see it as a benefit. It becomes a selling feature. It's a protection for your value. It's an investment in more than just a floor plan."

Bowman has seen the same dynamic in developing Millcreek. The challenges have been significant--he says they haven't been completely successful yet in working around all the trees on the site. They've put a great deal of effort into developing relationships with residents and prospects to explain why people should want to live so close to each other. Quarterly calen-dars highlighting community events and public movie nights are part of the ongoing marketing.

"It's a new way of selling and building," Bowman says. "It takes a lot of effort, a lot of architecture, and a tremendous amount of forethought. The rules of having a product line you can plop down anywhere are out the window. But it will give the region a much better feel. It gives us the opportunity to continue to add to a history that's been here over 350 years. We have a tremendous heritage that brings people here; it's in everybody's best interest."

Building on the Past The Corky McMillin Companies creates a smart-growth model with Liberty Station on a historic naval training site.

On a fall day in 1923, the Naval Training Station in San Diego opened its doors. For the next 74 years, it would provide basic, advanced, and specialized training for 1.75 million sailors. When the station closed, it was instantly apparent that this was 361 acres of prime, waterfront real estate in need of a truly spectacular development.

Today, that property is known as Liberty Station and stands as an award-winning collaboration between the City of San Diego Redevelopment Agency and the Corky McMillin Companies, based in National City, Calif. The final design is a mixed-use, pedestrian-oriented community. It features an extensive historic district with dozens of original buildings, a cultural district, two hotels, 380,000 square feet of office space, a 22-acre educational campus anchored by High Tech High, shopping villages, more than 70 acres of public parks, a public golf course, and 349 homes.

Interest in the community has been extraordinarily high; more than 1,500 families entered a lottery for a chance to purchase the first homes, and the development was more than 50 percent sold out within eight months.

Courtesy Corky McMillin With a goal of being a model of smart growth development in southern California, Liberty Station was designed with extensive input from its neighbors and retired Naval officers who still live in the area, says Dave Warren, vice president of home building and senior project manager.

"We put a lot of effort into listening to the surrounding community," Warren says. "The main thought of Liberty Station was being pedestrian-oriented," he says. "We wanted people to be able to live, work, and play and not have to get into a car to get to your destination."

In keeping with the pedestrian focus of the development, the houses are alley-loaded, taking traffic off the areas where children walk to school. Homes are pulled close to the sidewalks with porches and balconies "to get people talking and bringing back a sense of community," Warren says.

The challenges of the development centered on infrastructure. "Typically, when a developer has raw land, there's nothing to contend with," he says. "Here you're trying to figure out what can be used, and if it can, make sure it lines up. One of the big issues of the site was getting roads to line up with the Point Loma grid. The Navy operated outside the city's grid system."

The land-use plan created by the City of San Diego for the project revolves around a zero lot-line design, for which McMillin Companies says it sees potential for use at other developments. The single-family houses have a minimum of eight usable feet outdoors for a hot tub or outdoor fireplace; the detached townhouses feature four feet between the houses and private outdoor courtyards. The architectural guidelines call for units that reflect the development's historic past. The project is unlike any other Warren has ever worked on, encompassing issues of preservation, energy efficiency, cultural diversity, and integrating a development into the surrounding community; and in keeping the peace.

"It is very interesting," he says. "After 20 years in the business, you never quit learning. You have to expect the unexpected and be able to react in the right way to keep everyone happy."

Learn more about markets featured in this article: Lancaster, PA.