BROOKFIELD SAN DIEGO Builders has initiated five master planned communities in the past five years. Those projects should carry this division of Del Mar, Calif.–based Brookfield Homes through to 2008. But the division hasn't bought land in two years, and its president, Stephen Doyle, wonders if its supply of entitled real estate will last the decade, as the regulatory approval process in Southern California markets now takes at least five years to complete.
Builders and developers from west coast to east lay a good measure of the blame for procedural delays on zoning regulations that many communities are wielding to contain their growth as much as sustain it. Political and environmental winds that blow zoning every which way can leave developments dangling or in protracted litigation and landowners steaming over assets suddenly made less marketable. And builders are being forced to jump through hoops to comply with zoning that some say is out of step with current land-use trends, home and lot designs, and buyer demands.
“Dealing with zoning regulations is like being Sisyphus,” says Debbie Bassert, assistant staff vice president of land-use policy for the NAHB. It's taking the builders she's spoken with up to two years to push their rock up the zoning hill, compared with three to six months several years ago. Tamara Kolstad, land acquisition manager for Technical Olympic USA's (TOUSA's) Las Vegas division Trophy Homes, notes that public companies like hers must stay alert about not keeping land assets on their books for extended periods “so that it doesn't kill you if the [approval] process takes longer.” Todd Stutz, president of The Rottlund Co.'s Minnesota division, calls zoning the “undercurrent” that builders struggle against to find land at prices that make sense.
Some builders see zoning as an anti-growth cudgel, especially in markets where there's scant evidence of long-range regional planning that would arbitrate development and controlled growth more reasonably. Local planning and zoning bureaucracies can be unfathomable, say builders, in that they say they favor growth for their communities but incongruously resist residential construction that would support economic expansion because it would put pressure on their schools, roads, public services, utilities, and tax revenues.
“People are voting based on their perceptions of what they see in the morning driving to work and at night driving home,” says Joe Riggs, president of Hovnanian Enterprises' division in Edison, N.J. “Many people look at more traffic and blocked views, and their uneducated first reaction is that [development is] bad, whether it's vertical, horizontal, or underground. But when you equate growth and standards of living, their response is very different.”
More than one million people have poured into the Atlanta market in the past decade, “but there hasn't been one major roadway built,” says Thomas Krobat, president of Ashton Woods Homes in Roswell, Ga. As a result of that poor planning, Atlanta now ranks fifth in the nation for traffic delays, and those snarls have helped trigger what Krobat calls “a tremendous backlash against development within the general populace. Citizens' response is not to build anything, and people don't want anything rezoned.”
Atlanta's DeKalb County now considers only a limited number of development applications and issues approvals only two times a year. This has forced local builders to, in Krobat's words, “go up the highway” to towns where zoning may be more manageable, which he acknowledges exacerbates sprawl and its attendant traffic problems.
Sprawl is also being “legislated,” say builders, by zoning that favors spacious homes on massive lots. Krobat recalls a zoning issue that Ashton Woods faced a few years ago, when it wanted to build homes around Atlanta that would have sold for $80,000 more than the current resale market rate, only to be rebuffed by local owners who demanded that the new homes be $180,000 more.
Rules In Motion This not-in-my-backyard (NIMBY) mentality, and the aversion in many communities to multifamily construction, is nothing new, although opposition has gained ferocity in recent years, say builders, as owners protect the ever-increasing values of their homes and shield their communities from what many perceive as avaricious developers. “NIMBY is still a factor, but it's gone under cover,” observes Karen Anderson, the mayor of Minnetonka, Minn., and former president of the National League of Cities. “It's no longer politically correct to say, ‘We don't want these people in our neighborhood.' What you hear instead are complaints about density, traffic, and drainage,” which builders agree are zoning's unholy trinity.
City councils in Minnesota are required by law to render zoning approval decisions based strictly on land-use laws, says Anderson. Minnetonka's zoning includes ordinances that protect wetlands and trees and limit what's built on steep slopes. “None of these prevents development, but [builders] have to know the rules and play by them.”