WHERE THE ACTION IS

Infill development is finally catching on as buyers look for close-in opportunities.

By Randy Noles

Bill Silliman has a name for people born between 1946 and 1964. And it isn't "baby boomers." The longtime local builder has dubbed this rapidly growing demographic "the subdivision generation."

"Most of us were raised in subdivisions," he says, recalling the proliferation of far-flung suburbs following World War II. "Now, I can't think of a good reason to live in one."

Subdivisions, of course, remain popular. But an increasing number of boomer buyers now prefer urban areas, and are powering an emerging redevelopment trend. Millennials, many of whom have always preferred close-in living, are on board as well.

A 2011 survey commissioned by the National Realtors Association found that nearly six in 10 adults would prefer to live in a walkable neighborhood, with a mix of houses and stores and other businesses nearby. Six in 10 would also choose a smaller house and yard if it meant their commute time would be 20 minutes or less.

Nationally, according to a 2012 study by the EPA’s Office of Sustainable Communities, so-called infill development — use of land within a previously built-up area — accounted for about 21 percent of all new-home construction from 2005 to 2009. More than 70 percent of large metro areas saw increases — often substantial ones — during that time period.

But the percentage varies wildly from market to market, making the 21 percent number a bit misleading. New homes in infill developments ranged from just 2 percent in Prescott, Ariz., to 80 percent in San Jose, Calif. And in Orlando, the number remained static, at just under 10 percent.

Still, subsequent studies have confirmed the trend identified by the EPA. For example, a recent Brookings Institution survey found that between 2010 and 2013, primary cities have grown faster than their suburbs. That’s true even in Central Florida, a region notorious for sprawl, where compact Orlando proper grew by 2.1 percent and its far-flung suburbs by 2 percent.

“Orlando is always late to the party, but it’s changing now,” notes Silliman, president of Silliman Homes and a past president of the Greater Orlando Builders Association (GOBA). “People are wanting to come back. They want to be near the coffee shop, near stores, near their offices. We're just entering a period of urban redevelopment.”

While most places — Central Florida, in particular — are still growing more outward than inward, Silliman appears to be right. Locally, builders large and small are snapping up smaller, close-in tracts — and the trend has accelerated this year. Even production builders accustomed to developing on a grand scale are seeking smaller niches in which to build.

One driver may be SunRail, the new commuter train system. The EPA study noted that markets with commuter rail service had significantly more infill development than markets without it. Now that SunRail has become a reality, many builders are looking to get ahead of demand for housing expected to materialize along the first leg of the route. And they’re looking forward to planned expansion of the system, which will eventually run from Poinciana north to Deland.

Silliman has launched a line of CitySide homes, which he's offering in Maitland, College Park and other sought-after zip codes that have been largely built out for years.

The Maitland project consists of six new homes off U.S. 17-92, on the opposite side of the thoroughfare from Lake Lily. The homes are nestled in an established residential area and required tearing down some older structures.

“We’re not going to demolish any classics,” notes Silliman. Instead, his company is looking for circa 1950s and 1960s homes with dated floorplans and obsolete technology that happen to be located in highly desirable areas. “People buying in mature neighborhoods used to have to compromise. Now, chances are that they may be able to build a new home in the neighborhood they've always wanted."

For most of his career, Silliman built big and catered to the high-end custom market. The CitySide homes, however, are sized at a manageable 3,200 square feet and priced in the $700s and $800s. Although not huge, they're lavishly appointed and come with plenty of customization options.

So far, so good. Since its launch almost 12 months ago, Silliman’s acquisition team has bought $10 million worth of property in its targeted neighborhoods. The company has 15 homes under construction and already has logged about $5 million in home sales.

Production builders such as Meritage Homes are also looking close-in. Marketing Director Katie Suggs says that builders looking for tracts that will accommodate at least 200 homesites are by necessity pushed into fringe locations.

“Our overall strategy is to determine prime locations and concentrate on securing those pieces first,” she says. “Dedicating a little extra time and resources to a more difficult development position isn’t a strategy all homebuilders are willing to follow. However, to us it makes sense.”

Suggs says her company’s research demonstrates that proximity to shopping, dining and services is “incredibly important” to buyers. That, in part, explains why the company is anticipating a fast sellout in Baldwin Cove, a new neighborhood just minutes from the heart of downtown Orlando and within walking distance of the Cady Way Trail and Baldwin Park’s Village Center. Prices have not yet been announced.

Meritage is also introducing Lakeside in Winter Park and Tuska Ridge in Casselberry to attract buyers who want to be near, well, pretty much everything. And two new models have opened in Parkside, a neighborhood in the Dr. Phillips area near Orlando’s bustling Restaurant Row and upscale Mall at Millenia. The first phase was sold completely via lottery, Suggs says. Prices in the new phase will start in the $650s.

Taylor Morrison has also made major moves to offer close-in homes. It's building homes priced from the $800s in Windsong, which started a custom-home-only community on a 200-acre site bordering lakes Virginia, Berry and Mizell in Winter Park. It was the last large, undeveloped tract in Winter Park proper.

Taylor Morrison’s Eden Pointe, although it’s actually located in Seminole County, carries the panache of a Winter Park address and boasts frontage of Garden Lake. Just 41 homes are planned in the community, with prices starting in the $300s.

Now, some of the luxury gated communities that popped up throughout Seminole County in the 1980s are offering new-home opportunities. In Lake Mary’s Heathrow Golf & Country Club, for example, Taylor Morrison is offering new homes priced from the $400s. Adjacent to Heathrow is another new Taylor Morrison community, Steeple Chase, where new homes are offered priced from the $600s.

Alaqua is another luxury gated community that debuted in the ‘80s, and that many buyers assumed contained only resales. But Standard Pacific Homes has opened a new section called The Reserve at Alaqua, where homes priced from the $500s are nestled between the Gary Player-designed golf course and the 45,000-acre Alaqua Preserve.

With the impending opening of the new Dr. Phillips Center for the Performing Arts and a burgeoning cultural and entertainment scene, downtown Orlando has also become an increasingly desirable place for infill projects. D. R. Horton is there with Holden Cove, a small gated community with homes priced from the high $400s. 

So is Ashton Woods Homes with Copley Square, located in the so-called SoDo (South of Downtown) district. It’s a sleek and modern 66-unit, three-story townhome project where prices start in the high $200s. It was a hit from the day it opened in 2012 and is nearing sellout.

One of the toughest places for infill development is the west side of Winter Park, where vocal preservation organizations and zoning that restricts density can make building new a challenge. However, redevelopment of the west side’s retail district, Hannibal Square, has spurred interest in new west side housing. Plus, who wouldn’t want to live just blocks from Park Avenue?

David Weekley Homes is testing the market with Winter Park Villas, eight townhomes located just a block from Park Avenue at the corner of New York and Lyman avenues, not coincidentally near the SunRail station. Several have been presold at prices just north of $600,000.

Now the company is seeking a change in density regulations that will allow it to build an as-yet unnamed townhome project between Denning and Capen avenues on the west side. Prices in this new west side project are also expected to be in the $600s.

“It’s not just young people or empty nesters,” says Shad Tome, Weekley’s division president. “Across all buyer segments, we’re seeing a desire to live in urban areas. People want to live near cultural and arts opportunities, and near where they work. They have much less need or desire for a lot of outdoor space.”

But they do want to be pampered in their living spaces. That’s why Weekley’s townhome projects are decked out with all the bells and whistles. 

But, despite the trend toward more infill development, Tome expects his company to continue its primary focus on larger suburban projects. National builders still rely on economies of scale, and the suburbs aren’t going away any time soon.

Redevelopment opportunities are more limited and certainly more trouble, especially for builders accustomed to creating entire communities, not scattered homes in older neighborhoods. But there is a growing demand and smart builders — large and small — are vying to meet it.