Builders in fast-growing markets are running into a familiar problem: The land works, the demand is there, and the pro forma pencils out, but connecting to natural gas is prohibitively expensive.
“They’re looking always and forever for less expensive land,” says Harris Baker, president of Austin, Texas-based HBH Gas Systems. “Land is their driver and quite often they outrun infrastructure they need.”
That can create a difficult choice for builders and developers who want to offer more than an all-electric package. In many communities, buyers still expect gas cooktops, fireplaces, tankless water heaters, and outdoor amenities. As Baker puts it, “It is the desire for the blue flame.”
That’s where community propane systems fill the gap.
A community propane system delivers gas to multiple homes from a central tank or tank array through an underground distribution network, giving each home its own meter. For builders and buyers, it functions much like natural gas service, but without requiring access to the natural gas grid.
As an example, Harris points to a project he worked on called Lakes Edge, a 118-home development outside Austin. The appeal of the site was obvious—it was in a desirable school district where development parcels had become scarce—but the area had no access to natural gas. The developer planned for a community propane system so builders could still offer the gas features buyers expected. Harris says homes in the development commanded some of the highest prices among nearby competing communities.
The same logic applies at a very different price point. At another Austin project, Chaparral Crossing, a high-density, 511-unit detached condominium community, the challenge was not just access, but cost. Extending natural gas to the property boundary would have required a potentially expensive developer-funded transmission extension. In that case, the propane installation was a far less expensive alternative that could help support affordable housing goals and lower homeowner heating costs compared with an all-electric option.
The two projects show propane serving different purposes in different communities. At Lakes Edge, it helped preserve the amenity package buyers expected in an upper-end development. At Chaparral Crossing, it offered a more economical path for a dense, more affordability-driven project. In both cases, it gave developers a way to move forward without abandoning the product strategy.
Speed matters too. Baker says a community propane system can often be designed, installed, and permitted within 60 days. And if a builder originally planned for natural gas, the pivot may not be as disruptive as expected.
“We use the same components that natural gas does,” he says. “So if they were planning for natural gas and they’ve built their infrastructure for it, our materials are identical to natural gas.”
Another consideration is scale. Baker says the economics often become clearer during due diligence, when builders learn that extending natural gas may require a large upfront contribution that does not always align with the size of the community they are planning. By contrast, he says, community propane systems can be sized to match the development more closely, allowing the system to serve the number of homes being built and expand as the project grows.
Rather than absorbing the cost of a major utility extension sized for a broader network, builders and developers can match the propane solution more closely to the actual scope of the community at hand.
“So if you’re building 350 homes, I’ll give you gas for 350 homes,” Harris says.
Learn more about how community propane systems work and where they may make sense.
