In most places throughout the country, practically any builder with a enough cash in his wallet can buy finished lots. But not in master planned communities in California, where demand for building sites far outstrips supply. And certainly not at Ladera Ranch, in South Orange County, one of the fastest selling master planned developments in the nation, which has been closing an average of 30 homes a week since the beginning of the year, according to first-half figures from developer and master planner, Rancho Mission Viejo.
To purchase lots in Terramor, the new, 320-acre green-oriented residential village within Ladera Ranch, which will have its grand opening in November, builders had to go through a rigorous five-month selection process in which they competed with each- other for some of the highly coveted 1,260 lots. But it was well worth the effort, according to two of those who made the final cut.
"It was definitely a step up from normal," says Les Thomas, president of Shea Homes' Southern California division in Brea, which won the privilege of purchasing 79 high-end lots. "But going the extra mile allows us to do some things we typically wouldn't do because of cost."
Tom Mitchell, president of William Lyon Homes, in Newport Beach, agrees. "We buy lots from a lot of other developers, but Rancho Mission Viejo is always on the cutting edge."
Not just cutting edge, but way of the future, suggests Paul Johnson, senior vice president of community development at Ladera.
"A lot of entitlement agencies are looking at places like Ladera Ranch and realizing there can be a better outcome, and they are telling developers to follow suit if they want to get their approvals," the 20-year housing veteran and former builder explains. "Change is always slow. Life will go on as it has, but what we are doing here could eventually become the norm."
The fifth of six villages planned at Ladera Ranch, Terramor is conceived as an eco-oriented village neighborhood aimed at would-be buyers who have been labeled "Cultural Creatives" by Brooke Warwick, president of American LIVES, the Oakland, Calif.-based marketing research firm. These are successful, well-educated people who express their altruism, idealism, and genuine concern for others in cultural innovation and caring for the environment, but who have tended to find little appeal in the homogenized qualities commonly found in many new home developments.
As a group, they make up 26 percent of the country's population. But as a segment of the home buying market, they are terribly underserved, says director of marketing Anne Marie Moiso, whose family is one of the property's owners. DMB Consolidated Holdings, the Phoenix-based development firm, also has an interest.
According to Johnson, more than 5,000 people have registered on Terramor's waiting list since publicity went out in June.
To satisfy the Cultural Creative's demand for authenticity and a highly individualized look, not just from home-to-home but also neighborhood-to-neighborhood, the development team decided to require diverse architectural styles, including settler-inspired Cape Cods and Colonials that are rare commodities in Southern California. A number of live/work residences also will be part of the mix.
Exterior detailing will be varied, with shed roofs, exposed rafter tails, timber accents, balconies, fences, and wing-entry gates, bay or recessed windows with awnings or shutters, all features that are unusual in this market.
In addition, houses will be oriented away from streets and on to communal open space so residents will be able to walk out their front doors and stroll or bike anywhere in the village without crossing a major road. And streets will be replaced by a network of arroyos, courtyards, greens, and paseos to get people out of their cars and onto their feet for greater social interaction.
In what Johnson calls "our green overlay," builders also are required not just to meet state energy efficiency regulations but exceed them by 20 percent. Furthermore, they must reduce their use of non-renewable resources by at least 10 percent, participate in a mandatory waste recycling program, and build from a list of environmentally preferred materials.
The detailed development plan covers site and landscape design, water conservation, energy efficiency, materials and resources, and indoor environmental quality. Builders must be innovative, too, for they are required to incorporate two additional features not on the developer's long list of mandates. And a full-time inspector will make sure builders follow the rules.
Not only that, but at least one model must feature, among other things, water-sensitive landscaping and shade elements, natural grasses instead of turf, drip as well as automatic irrigation systems, low-flow water fixtures, and appliances that beat California's tough energy standards.
Once the developer understood what it wanted for Terramor, the process of selecting builders began. Finding them wasn't a problem. "We have builders banging on our doors all the time, but they don't fit our criteria and we don't pursue them," says Johnson.
Still, several newcomers -- who had demonstrated their financial strength, a proven track record, and a strong commitment to customer service -- were invited to submit project proposals, as were the "stable of builders" who had been active in previous Ladera Ranch villages and were familiar with the company.
"There is a relationship side to how we work," Johnson explains. "Once a builder understands what works, we like to stay with him."
In all, 13 builders submitted schematic site plans and architectural renderings, along with a firm statement that they had the desire and wherewithal to take on the challenge of building green. Two builders for each of the 12 product types in the Village were pitted against each other.
After four weeks of pouring over the submission, the company ended up choosing 10 "guest" builders. Six are among the nation's 20 largest -- Centex Homes, D.R. Horton, Hovnanian Enterprises, Pulte Homes, Shea, and Standard Pacific Homes. Pulte is a first-timer to Ladera Ranch, as is another winner, Pardee Homes. The other builders selected were MBK Homes, Lyon, and Richmond American Homes.
There is no "off the shelf" here, according to Johnson. "Typically, whoever is willing to buy lots gets them, but that's never been our focus," the long-time builder/developer says.
"As we have moved through each phase and as our thoughts crystallize on exactly what we and our home buyers want, the criteria we require has gotten more and more refined. Builders have had to rise to the occasion each time. They have to see our vision and buy into it," says Johnson.
"There is an easy route to take, but we think we've broken the paradigm. As a master developer, we are sensitized to doing it right and leaving a legacy. That's why we control our builders right down to their door knobs. We are ingrained in their lives."
Learn more about markets featured in this article: Los Angeles, CA.