Higher density equals higher value

A new urbanist community is far more complex, and therefore more risky to finance, than a conventional subdivision. But with this complexity comes the possibility of creating a much greater long-term value. That’s the conclusion drawn by Tom Low, an architect in Duany Plater-Zyberk & Co.’s (DPZ) Char- lotte office, in a comparison of competing design scenarios for the site of Vermillion, a TND in Huntersville, North Carolina. In this case, both a conventional and a new urbanist site plan were completely designed and engineered, and both plans obtained permit approvals and financing. DPZ’s new urbanist plan won out, and Ver- million now has more than 30 single homes and close to 50 townhomes built and many more under contract. In the conventional development scenario, the 300 acre site is carved into only 38 lots for single family houses. With an estimated average price per unit of $200,000, the total value of the development would be $7.6 million. In the new urbanist scenario, however, single family houses are built alongside townhouses, live/work units, and apartments, 168 dwellings in all. In addition, the new urbanist plan adds a mix of uses with 64,000 square feet of office, retail, and civic buildings. At build-out, the total estimated dwelling value would be $21.28 million and the value of commercial and civic buildings $6.45 million, for a total value of $27.73 million. Low’s estimate of a $145,000 average price for a single family home is actually somewhat lower than the real prices in Vermillion, where single homes now sell for from $150,000 to $260,000. Town homes go for from $95,400 to $165,000 and the price for live/work townhouses has reached $140,000. These numbers are very much in line with Low’s estimates. The infrastructure costs per unit in the new urbanist plan also appear to be significantly lower. The new urbanist plan calls for 551 square feet of pavement per dwelling, compared to 2,018 square feet of pavement for the conventional suburban plan.