How Does the Demise of Big Builder Magazine Relate to Southwest Denver?

As I've been saying for a while, destroying greenfields in exurbs is a business model that is slowing down and may end for a long time.

A symptom of this is the announcement of the end of Big Builder Magazine.

If there are any Big Builder types thinking of what next to do with their lives, here's an idea:

Start a land bank in SW Denver, where there are hundreds of homes available for $50k to $100k.  These prices don't seem to be going up any time very soon, but they are very competitive with the cost of greenfield lots.  Throw in the fact that they are eight times closer to the jobs and entertainment of Denver's city center, and you start to think they may eventually be worth a lot more than those far-flung lots.

Now add in some recent pro-density changes in Denver's zoning code, and you have a pretty compelling business model.

Denver's Zoning Now on the Cutting Edge

By now, anyone studying urban planning knows that cities brought wasteful sprawl upon themselves through idiotic policies, culminating in the "greatest mis-allocation of resources in the history of the world"

If cities are to heal themselves, we are unfortunately at the mercy of the same species that got us here, the zoners and planners.

The City of Denver recently adopted a new zoning code after a six year process.  A lot of  anti-sprawl policies were incorporated, however, some "neighborhood preservation" policies were included that tend to be anti-density and therefore pro-sprawl.

Rewriting the zoning code is difficult, because it's like answering the question, "How will our great grandchildren live, work, commute, and what do they want their city to be like?"  So Denver has taken a stab at it, and in some ways we're on to something.

A recent article predicts that the housing market will help revive our economy, but it's not your father's housing market anymore:
http://www.washingtonmonthly.com/features/2010/1011.doherty-leinberger.html

" the Great Recession has highlighted a fundamental change in what consumers do want: homes in central cities and closer-in suburbs where one can walk to stores and mass transit. Such “walkable urban” real estate has experienced less than half the average decline in price from the housing peak."   


Denver has responded to this change in the market by legalizing carriage houses for a few thousand lucky homeowners, and introducing tandem house zoning for some of the neighborhoods that used to be zoned for duplexes (R2).


During the recent real estate boom, many reasonably nice homes in gentrifying R2 neighborhoods were being demolished to make way for profitable duplexes.  Due to the limitations of the old R2 zoning, building a duplex was formerly the only way homeowners and infill redevelopers could take advantage of the changing demand.


Under the new tandem house and carriage house zoning,  a detached new home can be built to the rear or side of the lot without having to scrape the old house.  In fact, in the present economic climate, it would be very risky to scrape a performing asset and invest $500,000 to $1M in a speculative duplex.  Very few other cities now offer this new option, but those that do will have a clear economic development edge.  The livability of these neighborhoods will gradually improve, and home values should follow.