Stacked Deck

Most builders agree that location continues to be an attached home's strongest selling point. Consultant Bill Becker, of The William E. Becker Organization in Teaneck, N.J., says that several projects he's been involved with lately have either included mixed-use components, such as shopping villages or farmer's markets, or are near colleges, restaurants, and other “lifestyle centers” that are close enough for residents to walk to.

From a design standpoint, Speer says Royce Homes emphasizes the “sharp curb appeal” of its buildings to suggest what their potential resale value might be. Sares-Regis concentrates on “space utilization” within its homes by reducing the square footage dedicated to corridors and devoting as much area as possible to closets and storage. Bozzuto points out that over the past decade, virtually all of the multifamily projects his company has worked on have required some degree of “handcrafting,” in that each has been unique. Consequently, he says, production builders that are adept at constructing the same detached house over and over again within a large community must rethink their approach as they get into attached-home building more seriously.

Buster says that while putting up one- or two-story townhouses and flats isn't much different from building detached homes, three- and four-story buildings are “entirely different, with more complicated sets of documents.” He also observes that production builders keep making the same mistakes when they get into attached products: They don't have good reconnaissance about what kinds of attached products local buyers want; they use the same subcontractors that build detached homes; and they don't provide jobsite supervision early enough in the process.

Bozzuto and Stack caution production builders about the increased liability that comes with the attached territory, especially in the areas of potential fire and water damage. “There are many insurers that won't have anything to do with multifamily,” Bozzuto says. Glieberman of Crosswinds Communities acknowledges that insurance is a “big problem” for any builder of attached homes, which is why companies like his buy completed-operation insurance that covers the entire building.

In Glieberman's view, such obstacles actually give builders the chance to spread their creative wings, particularly when they're developing projects with 100 units or more per acre. Roy Russell, vice president of strategic planning and marketing for Centex's Houston division, adds that developing a multifamily site that might have only 1.5 acres, with per-acre densities of 20 to 35 units ranging from 18 to 24 feet wide, requires “talented architects and a keen understanding of consumer preferences for optimizing the smaller space.”

Two factors determine density, say builders: market demand and municipal regulation. Each presents challenges, although the first is proving to be a lot easier for builders to deal with than the second. For example, Ivanhoe-Huntley has five different multifamily building schemes, including a 12-unit, stacked-ranch product for buyers looking for an affordable alternative. Perlman says his company's plans are flexible enough that it can alter its product mix depending on market and land circumstances.

Ivanhoe-Huntley favors densities of seven to nine homes per acre, says Perlman. Other builders in more populous areas want more. “We try to get as high a density as we can,” says Stack of Sares-Regis, whose recent projects have between 24 and 55 units to the acre. Buster thinks the broader acceptance of the traditional neighborhood development concept has softened some municipalities' resistance to attached housing. But city planners in many markets still view “attached” solely in terms of more traffic congestion and children. “We build attached in five markets, and two of them are flexible, two aren't there yet, and in Texas it's not on their radar screens,” says Asaro of Corky McMillin. Eilermann of McBride & Son says that municipalities also regularly demand “upscale designs with lots of passive amenities,” such as parks. “The key is to match the look, feel, and density of the project [with] surrounding zoning.”

While municipalities' entrenched negative perceptions about attached homes might be changing in builders' favor, it's still not a slam dunk. On one of its newer projects, the Villas at Glenealy in Dublin, Ohio, it took Epcon 21 months to get land it wanted rezoned from industrial to attached residential, and even then it ended up with a density of only 3.4 homes to the acre. But by October, when construction of the units and clubhouse was 80 percent complete, “people [were] saying that maybe it's not so bad after all,” says Bacome.