Land Development

Introduction

Successful land development requires you as the developer to go through a complex process of many interrelated parts. While land development is both an art and a science, the most important aspect of the process is its holistic nature. Each separate part influences the others and a viable solution must take into account market demands, budget constraints, and site conditions.

The process usually begins with an idea for the creation of a new development that will serve the needs of the local market. This new development should take its place as a good neighbor within the local community by acknowledging its relationship to adjacent land uses. It should also become economically viable for both its inhabitants and the developer. Therefore, to produce a successful idea for your project, you begin with a thorough understanding of what your potential buyer needs and wants in a new development.

The Process

Instincts, timing, and planning play an important role in creating a new development. Although you can cultivate sharp instincts through experience, timing and planning can be improved if you understand the process of land development and its various components. As Figure 1.1 shows, creating a new development concept on a particular site combines three distinct endeavors: researching existing conditions; analyzing them for project opportunities, constraints, and costs; and synthesizing the results into a coherent, functional plan that supports the original development idea. The master plan is the basis for the design of the development. It can consist of a drawing of the development's layout on the site and a program, which is a written description of the design components of lots, streets, and project amenities.

The process in which these three endeavors are involved is not linear. At many points, you must retrace steps as you discover new information and its effect on previous decisions. This synthesizing information, discarding unworkable ideas, and then reevaluating information to generate new ideas is the hallmark of the process. Only when you appropriately modify original impressions and decisions at various stages along the way can you produce a successful project.

Where to Begin

You may approach the process from several different standpoints. How it is begun influences the order of the process itself. If you have already acquired a parcel of land, the process begins with determining the most marketable use for the site. Another approach might begin with a search for a suitable site that will support a previously determined marketable idea. The process can also begin with efforts to determine the best marketable idea for a given local area followed by the search for the best site to accommodate the idea. Once the site and the idea are placed together for serious consideration, the process of researching, analyzing, and synthesizing data to produce the final master plan is the same for each approach.

Key Elements

As described in Figure 1.2, the key elements of the land development process are market research, site selection and analysis, project design, site engineering, project costs, and financial feasibility . Each element has a unique role to play. Market research involves determining which type of buyers to capture; understanding their buying power, lifestyle characteristics, and product demands; and matching housing types and master plan concepts with those characteristics.

This part of the process can extend through to the marketing and selling of the project.

Site selection and analysis involve developing a list of desirable site characteristics; analyzing site conditions; and evaluating all the physical, legal and political, and off-site characteristics of a particular site for their contribution to the project's success. Project design matches marketing information on buyer preferences with site characteristics to produce a master plan and housing types that best satisfy these requirements. Site engineering deals with the physical handling of the topography and installing the infrastructure to support the master plan.

Managing project costs involves determining both soft costs (fees, marketing, and testing and investigating site conditions) and hard costs (labor and materials) for the project together with the schedule for completing each task. From this information, you can then produce an accurate project cash flow. Financial feasibility refers to determining the profitability of the project from sales forecasting and project costs.

New Complexities

By providing housing, places of business, and jobs for growing populations, land development remains an important part of the national and local economies. However, in spite of its necessary role, developers face more challenges in the form of regulatory requirements and adverse site conditions than ever before. It is not uncommon now to confront increased costs of site work and construction; shrinking municipal budgets for providing community security, schools, and infrastructure; and the growing public concern about decreasing environmental quality, which many unfortunately associate with development.

To compound these problems, growing public scrutiny is producing more organized attempts to influence the way land is developed. In many markets, the land with optimal development potential has already been developed. Most of the remaining land contains many restrictive qualities that caused developers to pass over it in the first place. However, this land is frequently found in prime marketable locations and may be worth developing if done correctly. But developing this type of land profitably increases the importance of discovering, analyzing, and synthesizing all the critical marketing, financial, physical, legal and political, and off-site information to determine project success.

The eighth edition of Land Development offers you, the developer, a sound, general framework for successful land development. However, each location can have different regulations, development standards, and markets, so you are urged to become as familiar as possible with the development process in your own community. Knowing local conditions along with the general process will enhance your chances of developing a successful project.

If you are a student of land development, use this book to step into the professional developer's shoes. As the book walks you through the process, try to imagine what it must be like to deal with its many complexities on a daily basis. By the time you finish the book, you should have a better grasp of the key components of this creative and exciting process.

The Project Team

Successful land development relies on expertise from a variety of professionals. Assembling the right mix of professionals and consultants to provide the specialized knowledge required for creating a viable project is one of the first milestones on the critical path to project success.

An effective project team is needed to determine the essential factors to investigate and analyze for each project. As the project leader, you as the developer are responsible for assembling and directing that project team. Primary members of the project team include the people in charge of market research, financial analysis, land planning, and design (see Figure 1.3). Once that team is assembled, proper coordination of data and information from the professionals and consultants is important to both project success and lower project costs.

Market Research and Financial Analysis Consultants

You may either purchase market research information or gather it with in-house capabilities. Similarly, an outside consultant or in-house staff person may perform the financial analysis. The team member responsible for market research directs efforts to determine the appropriate buyer and discovers buyer preferences. The financial planner determines the feasibility of the project under various sales rate projections when all project costs are considered.

Project Planner

The project planner or director of the project oversees the development of the master plan from the information about buyer preferences and costs provided by marketing and financial planning, as well as appropriate design concepts from other design team members. The project planner might be a professional land planner, urban designer, architect, or landscape architect. Although one of these professionals might be in charge, each would require input from the other experts on the project team during the process.

Another key member of the design team is the civil engineer who might analyze all geotechnical conditions and determine corresponding infrastructure requirements. The most Successful master plans depend on the planner, architect, landscape architect, and engineer working together to produce a developer's vision for the new development.

Auxiliary Advisers

At times, you may need to call in auxiliary project consultants to help the primary team members in their decisions on the master plan. These might include hydrologists, geologists, soil scientists, environmental experts, construction managers, and attorneys. The size of the project and the physical characteristics of the site will help you select the kinds of consultants necessary. The project planner should determine the need for additional consultants, advise you about their respective roles, and coordinate the distribution of all information among the project team.

The Developer

Successful integration of information from all disciplines requires strong leadership. From the beginning, you should clearly define the goals of the team to prevent duplication of work, gathering of unnecessary information, and increased predesign and preconstruction costs. You also need to clearly communicate up front how information will be shared and the schedule for project deadlines. As development progresses, you must coordinate through regular meetings the efforts of team members as they create and implement the ideas of the master plan. Throughout the process, provide clear guidance to keep the team focused on those aspects of the project that are critical to its success.

Although an effective project team is an expense that you must bear up front, it can actually help to hold down the rising costs of examining feasibility and complying with a more complex regulatory climate. Changing regulations and political and environmental impacts may create new project constraints and usually cannot be avoided. However, an effective team can help you look for ways to turn project constraints into opportunities for new designs with increased market appeal.

One reason for this is that buyers have higher expectations today about new developments. They expect more quality in products tailored to their particular needs. They also expect more customer service and follow-through after sale. Increasingly, quality in the form of environmental and community sensitivity sells. Marketing a development by emphasizing measures taken to preserve the natural features of the land and integrity of the community can provide the foundation for a quality-based approach with a strong appeal to the buyer.

Future Homebuyers

The so-called traditional family of mom, dad, a dog, and one or more children no longer makes up most of the homebuying public. In fact, the 1990 census reported that the traditional family represented only 26.7 percent of U.S. households. Changing demographics show a dramatic increase in older buyers, single parents with children, two income families with no children, single buyers, and two unrelated single buyers. These trends are expected to continue in the next 20 years and future homebuyers will demand a different kind of product than the traditional home and development.

Current trends translate into such new product offerings as smaller, low-maintenance lots; access to public transportation; fitness-oriented amenities; the two-master-suite home; and convertible offices and bedrooms. As market niches grow more narrow, the wise developer will continue to stay abreast of changing population characteristics in order to provide the most marketable product in the future.