Lee from Michigan writes. Hello, I really enjoy your podcast. Met you briefly at the Real Estate Guys Syndication conference in Sept. 2018.
Here’s my question:
My real estate partners and I have the opportunity to purchase a great 14-acre parcel of vacant land in the best demographic area of our community. The land borders a freeway on the south, a highly-traveled secondary road to the east, and single family subdivisions on the north and west.
There are existing roads that dead-end into the land from the north and west. The city would like us to develop the land and connect these two roads, which would be a benefit to the community in the sense that community services (school buses, garbage trucks) could navigate within the community more efficiently.
To make this project economically feasible, we would have to develop some multi-family properties. Currently, the entire 14 acres is zoned R-1, or single family residential.
Our group is proposing that we rezone only part of the property, the part that is contiguous with the freeway and the highly traveled secondary road, to R-3 to allow multi-family construction. Of note, 4-plexes would be our largest footprint. Further, ALL the land that borders existing single family homes, we would propose to leave R-1 single family zoning.
We have a preliminary meeting with the local planning commission in the next couple weeks to discuss our intentions. The mayor informs me that there are already 1 or more NIMBYs that plan to show up to discourage our proposal.
Previously, a production builder wanted to purchase the land and put up 200 low income housing units. The city basically laughed at the idea.
In the 14 acres, we propose 19 single family building sites and only 8, 4-plex sites along the designated roads. If multi-family development is impractical, our interest in the land will plummet.
With all this in mind, how would you proceed at the planning meeting?
Lee this is a great question.
There are generally three types of approvals that could apply. I don’t know the rules for your specific community. What I’m describing is what I see most often. The first is a minor application. In the case of a minor application, you don’t require community input. The second is a major application, and in this case, residents within a radius of the property (usually 500 feet of the property) are given the opportunity to comment on the application. This is a very public process. The third involves a change to the zoning.
The first thing I would do is get my hands on the minutes of the planning commission or the city council meeting minutes. In almost all communities, these are a matter of public record. In some towns, you can listen to an audio recording of the meetings, or in some cases watch a video recording of the meeting.
In your case, you’re talking about 19 single family homes and 32 units of multifamily. This is pretty low density for 14 acres. A general rule of thumb is that you can get about 8 single family homes per acre and perhaps 12 units per acre if you build town houses. Apartments could be much higher density of course.
If you built the 19 homes on half acre parcels, that would consume 9.5 acres. That would leave 4.5 acres for the higher density product.
I would actually advise against building 4-plexes and suggest you consider townhouses that might fit the R1 designation better. Since all the homes are co-located at the same site, they’re no more or less difficult to manage if they were apartments, townhouses or single family homes. But before going into a public meeting, you want to make sure you’re really well informed of what each of the planning commission members feelings are. There may be consultants such as an urban planner, or an architect who knows the decision makers and can predict what will be accepted.
