I’ve been hearing a lot of chatter on the news lately about this new development going in on the South West side of Salt Lake County. 8700 lots on 930 acres.
At face value, that seems like a lot.
So the hundred million dollar question is: Is this a mistake?
This comes out to being 9.35 homes per acre. That sounds tight. The question however remains, is this the right decision.
Well, that’s what I’d like to dive into a little bit today. The mayors and many people in surrounding cities have voiced concern, and while I’ll let you be the judge, I’d like to throw in some thoughts.
After all, I’m a developer, and while I know very little about this particular project, there are a few things I like to watch closely, thus I might have a different take on the matter. So for your consideration, whether you find it valuable or not, buckle up. It’s time to tackle this smoking hot issue.
Should we support the new Daybreak style community next to Herriman??
Housing in Utah is currently undersupplied. For any student of economics, this means that prices of homes are higher because the demand for new homes outweighs the available amount. This can be hard for new homebuyers to afford the new homes on the market.
So why aren’t we building more homes faster?
There are a few reasons for this. The first, and most obvious, is that available land is becoming more scarce. With less buildable land, the pricing of what’s left goes up. Same principle as the housing market, but concerning the raw land instead.
Don’t get me wrong, there is still lots of land here in Utah, but not all of it is buildable, and not all of it is available for residential construction.
Another problem with the supply of housing, is that once a developer has ground, the process of getting through cities has become very difficult in the last several years. We’ve had communities where the cities have held us up, in some cases over two years. That’s a long time to hold land without any work being done while we still have to pay interest on it. This doesn’t even begin to address the risk of buying the land at whatever price premium we pay, and risk a recession before we can actually develop.
Why does holding onto land so long decrease housing?
Well, the sooner we can build, the sooner we can free that money to buy another piece of property and develop it.
Utah is growing at a phenomenal pace. This in fact, is one of the key ingredients to Utah’s historically robust economy.
Our population is expanding quickly, not just from the higher birthrates that we have in Utah, but also from people moving here from out of state. Utah has a diverse set of industries that are attracting attention from all sorts of sectors, from technology to the arts.
Some estimations place Utah’s population growth at not just thousands, or hundreds of thousands, but millions of extra people over the coming two decades.
With Utah growing so fast, and land disappearing even quicker, we have to ask, where are we going to house all these new people?
I recently had lunch with an old buddy who works for a large builder here in the state. He was explaining to me that they’re having a harder time selling their ¼ and 1/3 acre lots here in Utah. This is clearly a function of price. What was once affordable, is quickly becoming a luxury. One of the biggest disconnects here, is that the vast majority of homeowners haven’t realized this yet.
So many people have the mindset that quality communities need to be on ¼ acre lots or larger. They need to have larger rambler and two-story homes with yards. The idea of anything closer together, usually translates into crummy neighborhoods with transient populations.
It’s not hard to see why many people are so resistant to denser neighborhoods, especially if they grew up in less dense communities. If we’re to accept higher density neighborhoods, then many of us will need to change our perspective on what our community should feel like.
Whether we like it or not, our suburban neighborhoods are turning into big cities.
I’ll let you draw your own conclusions. I don’t want to persuade you that this new development is right or not right.
All I’m trying to say, is that higher density communities are going to increasingly become a topic of discussion within our communities, so long as we are to continue on the path of growth and prosperity that we’ve experienced so far.
Daybreak was the first community of this sort to be built. There’s a lot that we can learn from this first attempt. I don’t know the densities that were placed in Daybreak, nor am I familiar with how well everything has been received there, but the fact that it was built from a large, over-arching master plan, would suggest that this experiment can teach us something of how we might proceed on this next big community. If we’re half as smart as we all think we are, I’d imagine that we should be able to find some good take-aways from this and make a really great master plan for this place next to Herriman.
In conclusion, and if I were to offer any suggestions, I would submit that instead of stonewalling any attempt at higher density communities, we instead find creative solutions to make those densities more comfortable, beautiful, and economical.
The fact that this is a 930 acre piece of land, means that there is real opportunity to design something from scratch that is more than just a lot of densely packed homes.
If we are to go forward with this, lets use this as an opportunity to bring good minds together, look at other examples around the country and around the globe, and display how higher density doesn’t have to mean higher disgust. Lets show how ingenuity can bring us together in attractive ways we hadn’t previously thought we’d like.