I have made a few predictions on Rowlett's first Form Base Code subdivision. It was touted to be the best thing since canned beer. Of course, it is Homestead at Liberty Grove. It was paraded in front of all the Rowlett citizens as the premier design of all residential real estate development.
Let me go on record, here. I like Form Base Codes. I also like New Urbanism, the sire of Form Base Codes. When applied as intended, Form Base Code is an intelligent application of modern development logic. However, Form Base Codes do not work universally. They were originally conceived for inter-city redevelopment. That would simplistically mean, "tear down or rebuild the old in urban, high density areas, and rebuild to better codes." That is where Form Base Codes work the best. In that environment, I am solidly behind Form Base Codes. Unfortunately, cow pastures are not urban settings.
Homestead was our first FBC subdivision. I had early misgivings, but I was in the minority. I hoped that it would work. I was not so much worried about the lifestyle offered of FBC subdivisions in Rowlett as I was the market acceptance. The lifestyle is fine, with encouragement of neighborhood walking, easy access to parks, and denser housing. I do believe the opportunity for neighbors to get to know one another in higher density neighborhoods, is real. However, ALL people don't want high density living. They want more land with bigger yards. These people make up a measurable market.
I believe most people that make up this market move into the suburbs. If they wanted higher density living, they would move into higher density areas, nearer the core area of any major city. Do I mean everybody? No, but I do believe the majority market is made up of these people desiring lower density. This is not just true of Rowlett, but of most suburb markets. However, I do believe that some newer development could be done in suburbs for those desiring higher density living. It does not have to be exclusively either. I worried about the marketability of Homestead. It was, and still remains unproven. If it fails, it would put Rowlett in a very bad light.
Rowlett leadership has taken the position that anything worth developing must be based on Form Base Codes. I feel this position was heavily influenced by our previous city manager. I have often written that our previous city manager was the worst real estate analyst I have ever known in such a top municipal position. I still believe it. The Homestead of Liberty Grove is a direct result of her influence.
Now, lets look at what we have. Homestead will have been under development for two years at the end of May. They are just now completing the last access street into Old Princeton Road. It's a bizarre intersection, but it will work. The subdivision is probably not far from final acceptance by the city.
This project is probably a year behind a schedule that should have been. This takes into account three months of very unusual heavy rainfall last spring. I added three months to a normal production schedule for this type of subdivision. I have overseen several subdivisions that started and finished development in this same time frame. Homestead has been a terrible production rate for residential development.
We were first told "several" builders would be building in the subdivision. I understood this to be four or five builders. This is what the developer told us while I was on council. What he didn't know was that I already knew one of his builders had declared bankruptcy. Still, we were told "several" builders were going to build. Then, we were told the lots were sold. Then we were told D. R. Horton was going to buy all of the lots. Then, we were told Horton walked on the deal because he could not work out satisfactory details with the city on Form Base Codes. Then, we were told Weekley Homes and Cambridge Homes bought all the lots. That's the last I heard on sale of the lots.
But, something was missing. There is no evidence of builders.
Let me explain. A few weeks ago, the developer requested of city council that they approve the "set back" of several of the lot's front building line from 15 feet to 10 feet. Essentially, that created a larger footprint in which to locate the house. However, that puts the house only 10 feet from the deed line. But, that's another story. What this means is that the builder never purchased the lots. I know Weekley Homes very well. I once made him a $5 million revolving construction loan. I know Cambridge Homes by reputation. People, neither of these builders are stupid. In fact, these builders are some of the best in the business. They would have never gone to contract on any lots that would not serve their houses. That means, a few weeks ago, the lots were probably still not sold.
Furthermore, most cities issue model home building permits near the end of the land development cycle. Even though the subdivision would have not yet been accepted by the city, this would give the builders time to build their two or three models and maybe get a few pre-sales in their inventory before applying for production building permits. This is almost typical. The builder's marketing efforts are underway at least a month before the subdivisions are finished.
In Homestead's case, nothing, nada, zip. No signage at all. I drove thru the subdivsion today. There was no evidence of any home building activity. The subdivision is substantially complete, lacking little.
Now, my marketing worries are for real. Not only have we not proved the houses will sell, we can't even prove the builders are buying the lots. I fear they're having second thoughts about the marketability of the lots and subdivsion acceptance of the buying public. If so, Homestead is going to be a horrible embarrassment to Rowlett.
To compound the problem, the city council turned down two subdivisions that beautifully fit the current residential marketplace. These two subdivisions would have been contributing approximately $600K per week to our tax base. (One house per week per subdivision; a proven absorption rate in the $300K and up market.)
Folks, there's been some fibbing going on someplace. Rowlett's "officialdom" stuck their neck way out on this one. I lay this project right at the feet of the previous city manager.