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The Race
for Space
With housing starts up, town planners weigh just how much
development their communities can bear
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Business New Haven
8/10/98
By: Elizabeth Guertin Regan
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With Connecticut's recession a rapidly fading memory, it's a great time to build a house, or buy a house, or set aside some land for permanent open space, depending on your point of view and the size of your wallet.
Housing starts are the highest they've been in a decade, with the statewide total for the month of May topping 1,000 and the year-to-date total of permits up by more than ten percent over last year. At the same time, the market for previously owned homes is slightly less active and towns are scrambling to take advantage of new state funding available for preserving open space.
Some communities are enjoying the benefits of increased residential development, while others are keeping a watchful eye on the cost of services to new residents. In Guilford, more than 100 permits for new houses were granted last year and already a third of that number have been granted this year.
“It's quite a shock to existing residents. There was a long lull and now a new subdivision springs up. The reaction [among residents] is that they want to control it,” says Guilford Town Planner George Kral.
In fact, Guilford is currently revising its Town Plan of Development & Conservation, which charts the course of development for the next couple of decades. It's the ideal time for residents to get involved in determining which land is set aside for commercial, residential, or industrial development, or for open space.
Most of the land available for residential development in Guilford is zoned for four-acre lots. Although that rule seems fairly prohibitive, there is a loophole. A developer can opt to create an “open space subdivision” and create smaller lots in exchange for one half of the tract of land.
In rough terms, a 100-acre parcel subdivided into four-acre lots might yield 20 houses (taking out some land for roadway and wetlands). If the developer donates 50 acres to the town or the land trust, the remaining 50 acres may yield closer to 30 smaller lots with roadways and wetlands.
Kral describes two different markets in Guilford. The “entry level” home in the $300,000 range may be situated on likely no more than 1.5 acres. At the next level, $400,000 to $450,000 homes may have as much as two acres or more.
“People aren't really willing to pay any more for a four-acre lot than they are for two-acre lot,” explains Kral. “It doesn't add that much to the value of the property to have two more acres of woods.”
On the other hand, it does add to the value of living in Guilford, where open space is a priority. The Guilford Land Trust is seeking funding to purchase a tract of land near the Durham border that is approved for subdivision, but is particularly desirable as open space because of its hiking trails.
“The open space subdivision is really the encouraged form of development,” Kral reasons. “We look for contiguous areas of open space to create larger unsubdivided land for recreational use.”
Setting aside open space in favor of smaller lots also makes sense from the perspective that clusters of houses are easier to service with road repairs, plows, garbage pick-up and school buses. It also reduces the cost to the developer to build roadways connecting houses that are four acres apart.
According to Kral, much ado has been made to quantify and analyze the cost to the town of supporting new residents with services. Almost all of the new homes built in Guilford are single-family dwellings, which typically means school-aged children. Of the two markets, those who purchase the more expensive option, Kral reasons, likely have older children who will attend public schools for only a few years, if at all.
“Not that we're encouraging the more expensive house,” he adds.
By contrast, in neighboring Branford condominiums and multi-family housing comprise nearly half of the residences in town. “For the most part, they're smaller households,” according to Branford Town Planner Shirley Rasmussen.
Rasmussen also points out that tax revenues from residential property rarely equal the costs of services to those residences. Thus, a town needs commercial and industrial property as well.
“Branford is very strong,” Rasmussen says. “There has been a steady increase in jobs, even in the recession years.” Rasmussen says, crediting the town's success to its easy access to I-95, relatively low tax rate and proximity to the cultural centers of New Haven and New York.
Branford is also the “end of the line” for the New Haven metropolitan sewer system, which is considered critical for commercial and industrial development.
In fact, at one point in the midst of the recession, Guilford and Branford negotiated a partnership whereby Guilford's West End Development Zone, between Exits 56 and 57 off I-95, would tie into Branford's sewer system. Little has actually come of the development zone or the partnership arrangement and Guilford residents are now taking a second look at the idea of encouraging development there.
Rasmussen estimates that Branford is nearing its capacity, at least in the area of residential development. The only substantial land left is about 300 acres nearly abutting Guilford's Development Zone. Slightly less than one-quarter of the town is dedicated open space, owned either by the town, the state or the land trust.
“The zoning here has been pretty well set for about 40 years. There aren't going to be any major changes,” Rasmussen explains.
Jim Wang, executive director of the Greater Bridgeport Regional Planning Agency, believes municipalities need to strike a balance between residential and commercial or industrial.
From the planning perspective, according to Wang, a town needs to provide three things to its residents: a job or source of income, an infrastructure of roadways and public facilities, and public services such as schools and maintenance. With 169 separate municipalities, there are almost too many towns, Wang says. Jobs are frequently concentrated in big cities, causing people to leave their town to work.
“The problem is most towns are not balanced. It puts all the burden on the big cities,” Wang says.
Connecticut allows each town to devise its own ordinances to control growth and development. Not everyone likes it that way, of course.
The Home Builders Association (HBA) lobbies at the state and federal level to reduce the regulations placed on builders. The HBA represents a half million builders and their associates nationwide, and several hundred in the New Haven area.
“Towns are getting very touchy,” according Jack Muller, president of the New Haven County HBA. “There's no such thing as one-stop permitting. It can take more than a year to get all the permits.”
In fact, a national survey by the HBA found that regulation adds approximately $12,000 to the cost of a new home. Eighty-three percent of builders surveyed said regulations have “significantly increased” over the last decade. Muller believes regulation is driving up the cost of building a house to the point where in order to make money, a builder must sell high-end homes.
“There's nobody that addresses the $30,000-a-year guy anymore. What happened to the $110,000 home? That's the American dream. It should be available,” Muller says.
Muller is quick to point out that the HBA is not opposed to open-space initiatives. In fact, he says, they're “in 100 percent agreement on most of it,” but that it always seems the prime land is chosen for preservation.
“They're not making any more land. So the remaining land becomes more expensive,” Muller argues.
“ There should be some protection on all levels, so that we can build affordable, quality housing,” he adds.
Monroe Town Planner Dan Tuba insists that regulations exist for the benefit and protection of a town's residents.
“If you listen to anyone who pounds nails for a living, there should be no regulations,” Tuba says. “By and large, most regulations are required to maintain quality of life, public health, public safety and to keep property values in good standing.”
The Regional Planning Agency's Wang says each town should consider its resources, and choose a planning direction from there. A town such as Fairfield on the turnpike may choose to develop more commercial property, at least on the main roads. While further inland, a town like Easton that has a great deal of land right now may seek to maintain a residential profile.
But the choice will have some consequences: “Number one, we want to balance the budget,” according to Wang. How that is accomplished - either through more expensive housing and higher tax rates or through more commercial development - is the question. In many cases, Wang said, commercial or industrial property is taxed at a higher rate than residential property, and therefore is a key source of revenue for a town.
Monroe considers itself unique in that its residents work in the labor markets of New Haven, Waterbury, Danbury and the Stamford/New York area. Because of this, Monroe has chosen to zone its residential land with lots of variety.
“We have conventional single units with one-, two- or three-acre minimums, as well as elderly housing, cluster-type developments and higher density residential zones with condominiums,” according to Tuba. “We're not afraid to try things that are less conventional than the cookie-cutter subdivisions.”
The one element missing in Monroe is commercial and industrial, resulting in a tax load that is “pretty disproportionate,” according to Tuba.
Homeowners are attracted to Monroe, which has already approved 26 housing permits this year, because of its reputation for good schools and for its town-owned parks, Tuba explains.
“It's a seller's market for new homes,” explains Tuba. “Before they're even out of the ground, they have a contract. But it's a buyers market in terms of resale. People just seem to want to buy new.”
The price range in Monroe, part of Fairfield County, is $300,000 to $500,000, which Tuba says isn't out of line for Fairfield County. The middle and low end “dropped out of the market” during the recession of the early 1990s, he explains.
The bottom line, according to Tuba, “When someone buys a home in a community, they make a tremendous life investment. They should have a reasonable expectation that their property values will be maintained, if not increased.”
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