Developer Extending Our Neighborhood

by C. Waldron
(Little Rock, Arkansas)

Note: When a developer proposes to extend a neighborhood and submits a plan that is quite different from the original subdivision proposal, all sorts of both typical and situational issues arise. For visitors who struggle with some type of change in development plan, this visitor-submitted question and our comments are worth reading.

Visitor Says:
Background: There are forty acres, owned by a trust. adjoining our street. It is a cul de sac on either end. On the western end there is a pie shaped lot with the end in the middle of the cul de sac.

In the BOA, it states that the purpose of this lot is access for one home. There are some other statements that it can be joined to other parcels of land, but it says nothing about future development.

Another thing is the fact that on the master plan, there was never any plan to extend the street. The developer, one of our neighbors, showed a proposal for extending the lot and adding 10 houses from our end and then developing the rest of the property with green space and houses adjoining one of the neighborhoods down the hill.

Now: The plans submitted to the Planning Commission now include two streets and fourteen lots. There are problems with the variances that will have to be addressed.

So, the developer lied. Also the way the second street is set up, the second phase of the project will be coming down our street.

What the problem is: 1) Our street is too narrow and in too bad a shape to sustain the traffic. 2) The area now is a wildlife refuge. We have all types of wildlife that will be displaced with the amount of development there and less than a quarter of a mile from us on the other side of the hill a local developer has clear cut for apartments and commercial area. 3) How can you tell if city growth will support the development? Houses on our street are taking months (6+) to sell.

We need suggestions.

Editors Response: First, we apologize for taking a ridiculous amount of time to answer this. We include it because it is beneficial to the rest of you, even if of no use now to the original questioner.

We comment on several specific aspects of this issue:

1. The visitor says the developer lied. This is highly probable, as lying is part of the usual mode of operation for developers. Expect it.

But we want to soften our statement by pointing out that often in the course of a project that takes years, such as a real estate development, markets, lenders, competition, and even site conditions change. A developer is dealing with much complexity and also with other unpredictable actors such as governments and lenders.

Our experience too is that developers often are incompetent rather than deceitful. The promise of big bucks entices many individuals to become developers when they lack the expertise to carry out their project successfully.

2. The original development approval sounds too lax to us. The lesson for government officials, including paid staff, elected officials, and unpaid planning commission members, is that they need to make sure that ambiguous statements such as the future ability to join the pie-shaped lot to other lots are not made, and that details are worked out in advance.

3. It is a bit unclear from the original question, but we think what has happened now is that the developer has come back to substantially amend the original plan. The good news for the original questioner is that this matter was before the planning commission, so the government is not asleep at the wheel and is reviewing the matter. Again, local government people, make sure that you have very strict rules about how changes to development plans are reviewed.

Our thought is that planning commissions should be very conservative about allowing changes of this type after a subdivision is occupied.

4. Whether the wildlife refuge is formally dedicated as such or not is very relevant to this situation. The questioner may mean that the undeveloped area is a de facto wildlife refuge, in which case our visitor joins the large company of others who regret that an area that wildlife enjoy is being taken away from them. That regret doesn't necessarily make the expanded development illegal though; frankly most development is tough on desirable and interesting wildlife.

In this case, though, if this land is an official wildlife refuge designated on the subdivision plat or approved site plan, or this land has been designated through a deed restriction as a wildlife refuge, that is quite another matter. Your local government should have overwhelming justification for changing its mind on a wildlife refuge if that was included in something it approved.

If the wildlife refuge was established by a deed restriction, that's a tougher situation, since deed restrictions are not enforced by local governments and only through homeowners associations (HOAs) or in court.

5. The last point we would like to address is the question about whether city growth will support the development. We think you have it exactly right, original questioner, that there is no evidence for the market need for new houses, since houses are not selling for six months on average.

That is actually a slow pace of absorbing single-family development. The developer himself or herself should be very cautious about further building in this environment.

Our guess is that the developer's optimism about future upturns in the market is overwhelming common sense.

We comment on this particular aspect of the situation because we believe so strongly that planning commissions and city councils should look at market demand as a criterion for approving or disapproving development. Courts in some jurisdictions are not kind to this approach, so by all means talk to the city attorney before following this advice.

But absent a judicial record of slapping down local governments that review market demand, we think there is every reason for the local government to look at whether what a developer proposes should be built. It costs real money for a government to maintain infrastructure (roads, utilities, and hopefully sidewalks and street lights), so it is appropriate to ask whether this infrastructure will have to be maintained while the lots sit idle waiting for demand to catch up.

Without many more specifics, those are the observations we can offer on the subject of a developer wanting to expand a neighborhood.

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