WHEN YOU PUT BIG HOME BUILDERS and California state politicos in the same room, automatically, a preternatural geographic tension seems to clench those who hold power over land entitlement and those seeking some of that power to build. When builders bidding for entitlements in the state also need city officials to grant them permits to ply their trade, you can almost cut the tension with a knife. Different rules apply to play in the streets, and city officials sometimes make them up as they go along. So, as he created Seal Beach-based The Olson Co. in 1988, CEO Steve Olson's hunch about the city game was pretty simple: You don't look to beat your opponent, you move them onto your side or out of your way. Either way, you win; and most times, they come out winners too.

Here it is 16 years later, and Olson's street intuition has blossomed into a fully formed corporate identity among America's top 100 builders in volume and top 60 in annual revenues. It takes a special breed of builder to strike a harmonious chord with 70 cacophonous California cities, and that's exactly what Olson's doing. Fluency in the language of city politics, entitlement issues, and technical and logistical challenges, and an inevitable altruistic dimension added to his company's land use plans, have all become constants in the Olson tactic on when to give, when to sway, and when to grab.

URBAN INSIGHT: Intuition has paid off for The Olson Co.'s president Mark Buckland, bottom left, and chairman and CEO Steve Olson as they navigate their company through the increasingly crowded streets of urban infill. Now, lots of home builder company leaders, many of whom painstakingly have earned their stripes these past two or three decades mastering the politics of the greenfields, have begun beating a pathway into the urban jungle. Looking somewhat askance at how to bring their large-scale game to all the complexities particular to metropolitan area building, players are more often than not trying to walk the talk like Olson as they try to steer their massive juggernauts not away from the sprawling suburbs, but to include the high-risk grids of America's cities.

Motivating national volume builders into urban infill, a number of compelling factors escalate: First among them, perhaps, is the relentless pressure to one-up themselves in growth over the previous year as they go to all extremes to court higher share values among investors. Meanwhile, there's the land constraints issue. Those constraints tend to deflect attention to under-used parcels that might otherwise stay off the radar if greenfield development was limitless. Demographics also come into play in a big way, as growing armies of young professionals and empty-nesters alike seek out low-maintenance lifestyles in vibrant cultural meccas vs. quiet, tame, isolated suburban living. At the nexus of these trends, more builders—intent on following the dollars—have built more infill into their business models than ever. While some of the nation's biggest home builders are still just getting their feet wet, others target the downtown development as a strategic imperative.

“I think many builders will be examining every niche they can as they get bigger, and out of necessity [will] branch out from their home product base,” says former UBS Warburg analyst John Stanley, president of Charlotte, Vt.-based consultancy StickSpin. “However, I do not believe this is going to be terribly important to the bottom line as the opportunities for infill are just not that big in absolute terms relative to the numbers of homes these guys are delivering in the ‘burbs now.”

POWERFUL BREW: Plans for redeveloping the Maxwell House coffee factory center around Maxwell Place (above), which will include 832 luxury units in six 12-story towers. Toll Brothers partnered with Pinnacle Downtown to tackle the project on the Hudson River. Still, wherever they are along this spectrum of involvement, almost all can learn a lesson or two from the Olson modus operandi, since the company is demonstrably one of the best at deciphering the different code of conduct needed to succeed in urban building. Of the country's top 100 home builders, the Olson Co. posted its highest increase in closings—up 159 percent year over year in 2003. In the same 12 months, revenues jumped 134 percent. In 2004, the pace kept strong, with a unit count estimated near 800 compared with 700 in 2003 and 270 in 2002. Olson predicts the growth will keep coming, based on a highly visible and secure three-year pipeline of projects. “I think 2005 will be a year for step growth, but ‘06 and ‘07 are going to be very significant as well,” says Olson. “When you look at our pipeline today, every project that we need for ‘05, ‘06, and ‘07, is in-house—as well as a significant amount of ‘08.”

Despite longer cycle times in municipalities than one typically encounters in greenfield development deals, Olson says he believes benefits mitigate the hassles when he aligns his company in a city. “Every community has a vision,” says Olson. “When you get behind that, you have the will and resources working with you. You're expending your company's time and money on targeted energy.” Case in point: In a complex, multi-year partnership with the city of Richmond, Calif., The Richmond Redevelopment agency, and BART, The Olson Co. developed an unprecedented 231-townhome project named Metro Walk surrounding the Richmond BART station.

Even though Olson had worked in the East Bay for only four years, the company's ability to synchronize its interests with the city's goals won Richmond officials over, according to Tony Bosowski, regional president of Olson's Northern California division. The East Bay Business Times named Olson home builder of the year, “an important validation of our business model,” says Bosowski.

From Olson's perspective, the key to success with cities is clear: “Cities want to have a strong voice,” he says. “They want someone to listen to their needs and help solve their problems. Above all, they need a company with the proven skill set and financial abilities to complete a project. We walk the walk,” he says. And to demonstrate that symbolically, every project the company executes is named with the word “walk.”

Sales are currently under way in three communities: Renaissance Walk includes a collection of town-homes near downtown Hayward, the Providence Walk project in Fairfield includes single-family homes, and Willow Walk near Concord includes a mix of product types. In addition, a mixed-use, retail/ residential project is currently under construction in historic Benicia.