NO BUILDER OR DEVELOPER needs to be reminded that plan approval and land entitlement get longer, thornier, and more expensive every day. John Wieland Homes and Neighborhoods is in year five of trying to get 290 lots for the same number of homes entitled in Peachtree City, Ga., near Atlanta. Standard Pacific Homes labored through several years, including 30 months of litigation, for the privilege of building 286 homes in Walnut, Calif., on a site where it initially wanted to build 2,700. And Florida-based developer South-Star Development Partners had to commit to $40 million in off-site road construction and build a regional elementary school in order to get approval for two projects in Jacksonville, Fla.
It might still be relatively rare for builders' construction plans to be stopped cold. But land development and zoning regulations ranked highest nationwide among the industry's major concerns in the NAHB's annual “Critical Issues” survey, based on 169 responses from officers of state and local HBAs and covering the period from October 2004 through December 2005. “Regulatory approvals”—specifically, countywide ordinances that relate to wet-lands—“have become a major problem because counties create their own rules,” says Russ Vogel, Midwest regional president/community development for Kimball Hill Homes, based in Rolling Meadows, Ill. He notes that counties have been known to identify land where crops are grown as “wetlands.”
Barriers to development are typically being thrown up by three problematic constituencies: municipalities whose understaffed and inexperienced planning and zoning departments are swamped by the sheer number of permit applications; the Army Corps of Engineers, which some builders contend takes its mandate to protect the nation's water resources to unreasonable lengths (see “All Wet,” below); and well-organized homeowners and community associations that rarely sign off on adjacent development without strings attached, that encourage implicit redlining by their opposition to entry-level or smaller-lot projects, and that at the drop of a hat will pressure public officials they know can consign any subdivision to limbo.
Greg Snow, co-owner of Meridian Pointe Homes in Redding, Calif., says the latest catchword to describe homeowners' resistance to development is BANANA (Build Absolutely Nothing Anywhere Near Anything). Entitlement usually takes Meridian at least a year, and it's been working on an infill project in Redding for five years. “We had it approved, it was appealed, and now we're going back to the planning commission,” said Snow in late April. Another California builder, Sacramento-based Reynen & Bardis, finds that it's taking at least seven years to go from optioning land to grading it for construction. “It's a game, but in California, if you try to do entitlements part time, you're going to get smoked,” says vice president of land acquisition Mike Winn.
Seven Reynen & Bardis employees, including a wildlife biologist, are dedicated full time to entitlements and planning. The expertise of their staffs and their connections with city planners often allow builders to keep approval and entitlement moving forward. Builders and developers are also joining forces on projects to form united fronts and, more frequently, take over functions, such as engineering surveys and mapping, from cash- and people-strapped local governments. Neighborhood outreach and an astute appreciation of a market's political environment are also essential. “All zoning is political,” asserts Michael Saint, CEO of Hingham, Mass.–based The Saint Consulting Group, which specializes in the politics of contested projects and recently completed a nationwide survey about land-use issues (see “Digging Deeper,” page 176).
HOSTILE NEIGHBORS Builders try many tactics to gain access to land quicker: demanding that entitlement be a condition of approval, avoiding wetlands or other contentious property, and buying smaller and scattered entitled lots. But even those that confine their purchases to entitled land can find themselves put on hold. “Developers here are running a year behind schedule due to all the delays,” says Alex Sololik, director of land development for Melbourne, Fla.–based Holiday Builders, who estimates that the time it takes to get land entitled has nearly tripled, to up to 30 months, over the past few years. Mike Edge, vice president of real estate for Choice Homes, which also buys only entitled land, says approval of a variance his company sought on property in Arlington, Texas, for 150 to 200 townhomes (which is zoned for retail and residential), was held up “by a few people,” existing homeowners who objected to the plan's density.
Vocal opposition to residential development, no matter how small, inevitably will find a receptive ear in elected officials whose jobs hinge on which way they swing on market growth. “Almost everything we do is geared around the timing of elections,” says Doug Krah, Standard Pacific's regional president for Northern California. Aproject that Capital Pacific Homes worked on in Elsinore, Calif., got derailed last year by anti-growth forces that ushered in a new slate of planners, recalls Bob Henrickson, Capital's vice president of land acquisition. And on the outskirts of Chicago, Lakewood Homes' plan to build 2.5 entry-level homes per acre on 3,000-plus lots “got caught up in the election cycle,” says Lakewood president Buz Hoffman. “Our name was mentioned on the radio and in the newspaper every day, and the first planning commission meeting caused such a stir that I pulled the land off the table.”
Public relations, for better or worse, can be a major factor in determining how quickly projects are approved and land is entitled. “There's not much you can do about any of this, except recognize what you're up against,” says Vogel of Kimball Hill Homes. “Part of that is the need to become a citizen of the community. We're constantly selling ourselves.” Krah of Standard Pacific notes that growth opponents are “better informed than in years past. It's not so much passion anymore as it is facts and figures.”
By touching base with planners and homeowners more frequently, builders and developers sometimes can neutralize antagonism toward their plans. John Wieland Homes and Neighborhoods conducted 21 meetings with county officials, adjacent property owners, and civic organizations for a project in Sandy Springs, Ga., where it recently started building 44 homes on 54 acres. Terry Russell, the builder's CEO, says that approval there took only seven months.
Last January, Coral Gables, Fla.–based SouthStar Development Partners submitted a proposal to Lee County, Fla., requesting the creation of a new town center district designation within the county's comprehensive land-use plan for The Fountains, a 2,769-acre New Urbanist community that, if approved, would include 4,215 homes, 900,000 square feet of retail space, 1.5 million square feet of commercial space, 300 acres for recreation, and 1,300 acres that will remain natural and undeveloped. To minimize unforeseen snags in the approval process, SouthStar sought input from any constituency that might impede its project.