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back to Trust the Process, podcast where we talk
about the real estate world, new home construction,
the housing industry, and everything in between.
Today we are going to talk about a couple of
upcoming projects that we have. So we've talked
to you guys over time about a couple of the things
that we've been doing. We have upcoming projects
that are just getting started. And so those had
a meeting with the Henderson City of Henderson
last week. And so updating on those, just kind
of introducing those two projects to, to our
listening audience as they will become conversation
over time. Right. And then using using that to
tell a story. Absolutely. Right. To say this
is the these are the things we interact with,
with a case study versus an anecdote. So and
we had some, boy, we had some good anecdotes.
I didn't want to do an answer. So we have two
new subdivisions, in addition to our serene subdivision,
and they are very near each other. They're both
in the Henderson jurisdiction. Uh, one is a five
home and one was originally supposed to be a
23 home subdivision of town homes and that has
been whittled down substantially. Uh, as a result,
well over time, but then as a result of last
week's meeting, it really got whittled down.
Yes. So, so this is a somewhat small two acre
parcel infill, meaning that there's their neighborhoods
and communities. completely surrounding it it's
on an improved street uh surrounded by a new
home construction community that was about four
or five years old and then one from the 90s all
the infrastructure is there but it's a really
small parcel zone for religious facilities oh
is it yeah so we ended up with it but we bought
it from the city of henderson by way of one other
owner. So someone bought it from the city, Anderson,
and then we bought it from them over the span
of a couple of years. It's kind of all transpired.
So we're in the land acquisition phase right
now. So that's that part's been done and secured.
And then what we're doing now is submitting for
our initial zoning to say, okay, well, we don't
want it to be a religious facility, we're going
to make it into housing development. And our
initial plan that we laid out with the civil
engineers was well received. They said, okay,
we're fine with you pulling this out of the master
plan. Does not have to be a religious facility.
We're good with you doing residential usage.
Now you abide by the residential usage rules.
And so much residential around there. I'm surprised.
It's all been anything. Yeah. And so we weren't
really surprised that it would that it would
go that way. What I think is that maybe along
that southern part of that street Horizon Ridge
drive, it probably was all various public uses.
And then this developer switched to residential
and slowly. We're now we're the last one that
is is a that's called a semi public use. Okay.
Or PS classification and our zoning code. So
because we're asking for any type of zoning change,
they can pretty much demand anything of us because
we're not abiding by the prescribed rules. Therefore
they don't have to abide by the prescribed rules.
Now, all this costs you about $20 ,000. I mean,
you've got to get the topography done, the actual
site boundaries. You have, you retain a civil
engineering firm to do that. And they draw it
up. They get the exact dimensions and everything
based off the survey. And then they take their
knowledge of the codes and say, okay, we're going
to put a 33 foot wide street in here. And I kind
of came up with the conceptual map of how I wanted
it to go based on the parcel size. And I wanted
to create some good lots in there instead of
just running a street right down. And then you
have homes cornering a busy street. I wanted
to pull in and L around, and then everyone kind
of lives off of that cul -de -sac. So that part,
I kind of started start your engines and then
they ran with it and then use their knowledge.
And I have rudimentary knowledge, elementary
knowledge, I should say, of zoning. I know that
certain zoning classifications have minimum lot
sizes, I know roughly how big a cul -de -sac
is and how big your right aways have to be, setbacks,
I know things like that. But there's a lot of
technicality and a lot of nuance to the zoning
laws as well. So what they do is take this and
get what's called a tentative map, take all that
information that I mentioned and draw a tentative
map. And we have our first CPR, which you need
CPR after that. That's not what it stands for.
Comprehensive Planning Review. And that's about
a three week process. By the time you get it
submitted, the city reviews it, that's a 10 day
period. And then they issue you back your comments.
So you submit it on a Monday. You usually have
your comments back the following Friday. So I
shouldn't say three weeks, but by the time you
draw it, submit it, get your comments back, it's
about three weeks. And then they have those submittals
every three weeks. So you get your notes back
and then you schedule a meeting with the city
the following Monday. So they get us our comments
back on Thursday and said it was a three page
PDF. Then we can maybe put it up on the screen.
It was astoundingly tedious. And it had things
as simple as all garages must be 22 feet deep
and have an electric car charger. which station
anyway, which is what we would do anyway. And
now there is new code where you have to have
electric car chargers, but we've had a 22 foot
garage, deep depth code in the city of Henderson
for many, many years before I was even home builder.
So, but they put it in there. It's one more thing
that kind of crowds it out. It's what the market
would require. So the market would require anyway,
except you want to be able to fit your car in
some storage and yeah, exactly. So it was, that's
just one small example of You know that the tediousness
that comes with this type of plan of you because
you're sifting through all those things and saying
okay That's a given that's a given. Of course.
I'm gonna do that Of course me that and buried
in there was we want the cul -de -sac to be 100
foot diameter not 86 86 is the code Room for
the street. So the so we call it a 43 radius.
Okay, so 86 total in diameter. They wanted 100
They want a 10 foot That's why. Oh, you want
to know why? Because the people that requisition
acquired a sewage maintenance truck that must
be the size of a locomotive, because it needs
a 100 foot diameter cul -de -sac. So we're in
this meeting, and the city. That's why they want
that. They want 100 foot turning radius or 100
foot deck for one truck for one truck that might
need to get up there in 20 years. And mind you
that all of the other cul -de -sacs in the city
are designed by that old coat. So I would argue
the problem is with the truck, nothing, cul -de
-sac. No, that's so true. You would think. So
when you, when you put your map to the city,
it goes to every single department, department
of public works, which is water, sewer, uh, and
the energy doesn't touch it at that, at this
juncture yet. Um, city planning, building and
standards, those types of entities are all looking
at it. So I want to say there were about 12 people
in that meeting. And everyone had a comment.
And the reason they're in that meeting is because
they're responsible for I think there were 50
something comments. So maybe this one person
is responsible for eight of them. This other
person is responsible for 10 of them. So you
can see why when one person and building standards
looks at and goes, well, he better make sure
he does 22 foot garage steps. That in there,
you know, it's that's kind of how they're thinking
This is only tentative maps. Oh, so there's homes
are not designed yet. Okay, so It's people just
putting in their two cents, right? They someone
that feels like they have to contribute so they're
you better make sure there's 22 foot garage steps
Yeah, okay. I know that I can't get a building
permit without that but okay can't sell the houses
without that but aren't I was gonna go 14, but
Everyone had a Fiat or a moped or something So,
um, they send it back and you're going through
it. So you're going through each person and they're
saying that, you know, so we get to the cul -de
-sac comment and the planner said, oh, this must
be a fire requirement. And the fire chief is
like, ah, no, we were good with the standard
86 diameter is completely fine with us. We designed
for a hook and ladder. So the biggest fire truck
ever. I feel like the fire truck would be bigger
than you would wonder. So Yeah. Yeah. Apparently
I want to see this sewer truck because also these
cul -de -sacs accommodate 18 wheelers because
you can have, I'm sure you've seen 18 wheelers
delivering furniture and think about you get
a furniture delivery. It's going to come on an
18 wheeler. Yeah. They get in and out of cul
-de -sacs. They get in and out of cul -de -sacs
all the time. So what does a sewer truck look
like? I really want to know. I'm just afraid
to Google sewer trucks and get sponsored ads
from Peterbilt. So little comments like that.
And then Zoning says we're going to enforce the
10 foot landscape buffer on each side. The code
actually says only if you're up zoning from the
adjoining parcel. The adjoining parcel is a town
home community on this side. This doesn't need
a 10 foot landscape buffer. That property to
the west of me is an RS6 zoning. So we're RSA.
So technically we're up zoning. Fine. That's
all right. We'll do a 10 foot landscape buffer.
And he said, no, we want a 10 foot landscape
buffer. And just on both sides. RS6 versus RS8,
what is the classification, the differential?
So most of it is density, but it's also dictates
lot size. So RS6, you have to have a 6 ,000 square
foot home site. RS8, you have to have a 4 ,000
square foot home site. When you click into RS8,
it triggers community elements. So community
parks. and then different setback rules for the
individual homes. So basically it'll just have
a different feel. The neighborhood, an RS6 neighborhood
will have a different feel to an RS8. So we were
shooting for RS8 and we thought we could fit
our community element in there. More homes. I
would have fit more homes, but oddly enough it
would have been eight homes, even though RS8
zoning would have allowed me to go all the way
up to for this parcel could have been 15. So
it's eight homes per acre. Okay. So eight homes
breaker and you have to satisfy the other elements.
So if you hit something else, like the community's
park space, you're not going to hit the RSA.
You're going to have to sacrifice a lot because
it's a multiplier. Every lot requires 500 square
feet of open space. Some common element, not
open space. There's a distinction, a common element.
And the trick is, is that, and this gets into
why we kept losing lots. Every time I talked
to the city, I'd leave a lot. So, okay, now you're
taking 10 feet off of a 400 foot parcel. We're
losing 4 ,000 square feet of the lot of the total
undeveloped parcel. And it's on this site too.
It is, it is a whole lot really. So we're losing
a lot here and now it's 10 foot strip. So you're
probably not losing a lot in its entire, it's
10 foot strip. So you're probably not losing
a lot in its entirety, but you are Now this lot
would have been a 45 knots, 35, cause you had
to lose 10 feet. Well, now if it wasn't at least
120 feet deep, now it doesn't fit the size requirement.
So you kind of rendered this lot useless because
it doesn't meet the minimum. So you, your common
element also is not satisfied by your landscape
buffer and any other kind of easements or anything
does not satisfy your land, your common element.
So it's all of those requirements plus a common
element. And the common element has to be usable.
So they want some sort of sidewalk in there,
some sort of greenery park, whatever. And I'm
all for that. I get it. But is it a little out
of context for an eight or nine or 10 home subdivision
to have a 4 ,000 square foot park? That's not
a usable park. At 4 ,000 square foot, for context,
if you think of when you look from the air, a
cookie cutter neighborhood, you'd say, boy, those
homes are all on top of each other. Those lots
are usually 4 ,000 square feet. So what are you
going to do with that park that's 35 feet wide
by 120 feet deep? Yeah, you would be forgiven
to just not even realizing it's there. You could
live on that street and not even think of that
as a park because it's not going to look like
a park to you. It's going to look like emptiness.
And we'll landscape it and make it look nice,
but it's not going to be a place where your kids
can go play catch. So and ultimately you have
city parks and actual legitimate fields and that's
how I look at it is that if they were That in
my opinion there should be some sort of waiver
if you're within a quarter mile of a major city
park That requirement should be waiting. It's
not it should be it should be a thing Yeah, exactly.
I'm sure with all my sway should they're sure
they're gonna love to hear that Yeah, so And
I get it. Again, best laid plans. We've talked
about this 101 times. The best laid plans. Everyone,
oh yeah, we should have more parks. Oh, the home
shouldn't be on top of each other. Okay, well
you can't have your 8K Canadian too. Ultimately,
development is a capitalist endeavor and landowners
don't generally care because there's just not
enough land sellers. There might be a lot of
landowners, but there's not enough land sellers
at any given time. So they don't really care.
They're just finding, they're capturing a lot
of the profit that's baked into the home that
you're buying at the end of the day. They got
that money. I got a portion of it, but they're
getting it. They're pulling forward those gains
now. A lot of times the landowners are paid on
next year's home prices. And I don't want to
do that, but I have to. So when you look at a
major publicly traded company, which I've known
I lovingly calling them tonnage builders. Tonnage
heard from my friend Howard at BDG. He called
it a tonnage builder. And I really liked that
they're building in tonnage. So what they're
doing is they're looking at a seven or 8 % price
appreciation, cut it in half just to be safe.
So when they're doing all of their math on these
neighborhoods, they're looking at not this year's.
So when they're penciling it out, they think
those homes can sell for 800 ,000, but they think
there's going to be four or 5 % appreciation.
They're now going to say Okay, do all the math,
but with $840 ,000 South's prices, because there's
such a shortage of actual available land, they
want to be the most competitive, they want to
make sure they're looking at it in the most competitive
way, so that they don't keep losing out to other
nationwide tonnage builders. And that's unfortunately
how I have to think as well. Certain areas are
different when there's a lot of land available,
like in South Shore Country Club, I can pick
up lots all day long and kind of does become
a race to the bottom because if I can find five
or six equal lots, I can probably find the most
motivated seller of those five. And then six
months later, when I'm ready to acquire another
lot, I can find the most motivated seller of
those four plus whatever else came onto the market.
So if land sold like that acreage for subdivisions
sold like that, it would be a lot easier to negotiate.
But because there's not enough land sellers or
anything available at any given time, you're
just stuck with what they want for the land.
And usually it's 20 % higher than what you would
normally expect. So I guess my point is, is that
it's not up to the land seller to worry about
zoning. It would be nice if they said, Hey, you're
making the value of my land. If you can sell
this line for 13 homes versus eight and have
to go to the expense of building a park and all
these other components to go into it. I have
to pay less for land or get more for the houses
and or make less. And if you're making less,
if enough people are making less, enough people
exit the space and then home values go up anyways,
you have a supply issue, which is what we're
in right now. We're we're in that still from
2009. In my opinion, we're still in that mode
where we're enough small builders get out of
the game. And you're left with the big tonnage
builders who are publicly traded and only care
about next quarter's returns. My you know, to
circle back to my my point is that it's not that
I don't want to do those things. It's not that
I that I don't believe in little community parks.
It's not that I don't believe in wish I could
do 6000 square foot home sites. I wish I could
do all those things and still deliver an affordable
product. Unfortunately, the nature of the beast
is not that we're paying almost $1 million for
this. We will have almost another million dollars
in engineering. infrastructure, the cul -de -sac,
everything, the grading sits on a hillside and
it's a mess. It's going to be a lot of work to
get these things kind of ready. Easily. Easily.
It might even be a little bit more. So it may
be 21 or 215. So you can see when that is the
numerator, I want to minimize the lot cost by
maximizing the denominator, i .e. the total amount
of home sites. So I go into it thinking, Okay.
Can we get townhomes in here? Let's just say
2 .3 million divided by 23. I'm into a hundred
thousand dollars per pad or door. Okay. Very
doable in that area. Cause even a townhome would
still sell for five or $600 ,000 if I did them
right. So then I'm starting there at a hundred
thousand dollars. Amazing. That's let's do it.
So you take it down to, okay. Then we started
getting a little nervous because we were worried
about selling 23 townhomes without And we would
have the common space and all those requirements.
Now that makes sense to have a little bit more
space. You do. I mean, and I wouldn't. So that
actually, that's why I aborted that deal. Not
because or that that that strategy, because I
didn't believe I would want to live in that.
I didn't want to live in that product. Yeah,
I wouldn't want to live in a 23 home town home
community with zero amenities. We could have
satisfied the open space, we could have done
it. But then where do you go? Do you build a
pool? Did you gate it? What do you do? Do you
do dog park? What are you going to do there?
So then by the time I factored all that in, it
just didn't seem like I could get a product that
I liked. So I said, okay, let's flip to single
family. At that point, I thought we could maybe
technically, legally, if we went R6, we could
have gotten about 15 home sites in there. And
of course, assuming they satisfied everything
else, I thought, okay, let's start from 15 and
work our way back. This is before I even retained
my engineer. It wasn't even on the radar. I was
laying it out in my I have rudimentary software
that runs like cat and I was laying it out and
I could not get a comfortable map. So then I
was trying to avoid messing with the mountain
side too. So I said, okay, let's not mess with
the mountainside. Let's take out a whole nother
side. That's a hillside overlay. We kind of talked
about that in the previous episode. They would
want more surveys. And then of course it's just
a lot more work, maybe some blasting. It would
have been a lot of work. And I said, I didn't
want to go through that. It just didn't pencil
out for to go from because I knew I was going
to get around eight or nine. So do I really want
to go to 12 or 13 but spend another $700 ,000
in blasting and site work and every home still
costs even the town homes would have cost me
a water tap fee and reclamation fees and all
these other per home site fees would have been
a little higher. Even though your lineal sewer
pipe and all that would have been roughly the
same because everything's so much closer, you
still get a surcharge for every single door you
add into the infrastructure. So when I reverse
course and said, let's go single family, let's
not disturb 24 ,000 square feet of hillside.
And I'm only working with a hundred thousand
square feet of total parcel. So I lost another
25 % of the parcel to not touch the hillside.
As a town home, I would have had to touch the
hillside, but it made sense to get 23 townhomes
in there. It would have made sense. It would
have been enough doors to make sense. So we dial
that back. We preserve the slope. We've now lost
a quarter of our, of what I paid a million dollars
for. So now I lost 250 grand, but that will make
the neighborhood more beautiful. You're going
to pull into the street. You're going to see
the foothill of a mountain. It's going to be
a small neighborhood, but boy, it's going to
be pretty special. It's going to feel like a
nice little enclave. So I thought let's go that
route. And then let's maximize what we have.
So we did a LIDAR map. This is at this point
where I pulled in the engineer. Let's do a LIDAR
map and figure out where exactly that slope ends.
Where's the toe of that mountain? And then we'll
go from there. We could probably cheat it and
go five foot up the slope and just hope that
the city doesn't trigger a hillside overlay.
It's all about that little kind of fine line.
Well, we could push back five feet and then maybe
the back of their backyards would kind of start
sloping up and then they would have a view fence.
This would still be pretty nice. But again, I
didn't want to push it too much So let's just
go right to that hillside and then go five feet
past it right to the toe of the mountain and
go five feet I gotta get a little bit of a win
here. So So we do all that we lay everything
out and then that's where we got to where we
were for our early April submission Which was
about three weeks ago So we submit that map that
has ten homes and I was really really comfortable
and I knew There was probably gonna be a comment
on the common area space, but I also thought
can we do a waiver standards can we because sometimes
if it's a small you could maybe go to city council
and say can I get a waiver standards it's only
10 homes it's all connected you know to the main
grid can you let the people walk to the city
park is that okay and maybe just see how they
felt about it and at that point we would have
been into each home site for about 190 000 because
it would have it would have cost a little bit
less to do to do these uh um 10 homes instead
of 23 so I thought okay we're probably going
to be at around let's just call it 1 .9. So I
thought, okay, we're going to 10 homes, we're
at 190 ,000. But now we've got beautiful single
family home sites, they're narrow lots, they're
35 foot wide, but they're deep and you can put
a nice 2300 square foot product in there, which
on new construction in that area is probably
around an $800 ,000 house, maybe 750 to be conservative.
So that still really works. You know, you're
at 200 ,000 per home site, we'll water down the
actual homes themselves a little bit and see
how much we can push the market. Bottom line
is the project works. So we send that in, all
the comments. What really nailed us were the
10 foot setbacks and the cul -de -sac. And then
they said, unless you want to apply for a waiver
of standards, we want a 47 foot wide street where
we had drawn a 37 foot wide street, which is
technically in the code. So the street is short
enough where it doesn't have to be wide because
the thought is that it's only 10 households.
And you're going slowly up there. You're going
slow and really cars comfortably in a parking
lot probably only have 18 feet between stalls.
This is twice that. Maybe you'd form an HOA that
didn't allow street parking on one side of the
street just so it didn't get too crowded. But
again, it was like 10 homes and there was a lot
of blank space because of that cul -de -sac and
it was just a lot of dead space without you.
There's going to be enough parking here. Every
home is going to have a two car deep, you know,
two car wide driveway, one car deep, obviously
a 22 foot deep garage as we know, which can fit
about nine cars. So we we had a you know something
I felt comfortable with and they that that that
three pages worth and She was very blunt with
me and she's been really great My my contact
at the city and she said I'll be honest with
you the climate right now You don't want to go
for a waiver of standards Just the people that
are composing the City Council the people in
the Planning Commission said it's just probably
not a good idea unless you want to sit and At
that point is when you probably would retain
a lawyer because you would have a lawyer represent
you to go through the waiver of standards and
to kind of get those things solidified and negotiated
with the city of Henderson. I don't want to go
that route because here's the bottom line. If
I give them what they want, I thought, okay,
we're going to go down to eight lots. We're just
going to give them the community space. We're
going to give them the 10 foot on this side.
We will argue the 10 foot on the town home side,
but that's not a waiver of standards. That's
just an interpretation. We helped. So I said,
okay, if we do that, We can get everything in
here and the lot is very irregular now that we've
kind of avoided that mountain So what we were
gonna do is do a 10 -foot path down to the open
space in here You wouldn't see the open space
You'd see a little Paseo kind of a pathway weave
through maybe do some landscape lights and I'll
have it open up under a 4 ,000 square foot park
and Everything was great. We had eight home sites
And this is last weekend, last Thursday. So I'm
sitting here going, we have some really irregular
lots, but we have eight. So let me start designing
a product that can go on these. We talked that
day. We actually did. Yeah, we did a little thought
we had had it kind of well dialed in. I mean,
I know you were feeling after, you know, sitting
on the council meeting, you kind of felt like
you had a good gauge on it. And since then, well,
it did. So I spent the In a few days, we talked
on, we talked on Thursday, I think. Yep. So Friday
I'm saying, okay, I have some office time and
Saturday I have some office time. I'm going to,
I have to before we send this map off because
the cutoff is today for the new map to be submitted.
So I said, I have to make sure that I did tell
my engineer run with this map and Monday submit
it along with all the other paperwork and all
the other answers to the three page PDF, get
it ready and get it teed up. And I'm going to
start working on the houses just so that I can
get excited about this product before we get
too far down the road. And I rack my brain. I
had two lots out of the eight that were only
70 feet deep, but they were wide. And if you
think you got to be 20 feet off the curb, a 22
foot deep driveway, I'm never going to let that
down. And then your garage is now the entire
length of that. You can't get any house behind
that because the garage plus the setback is already
42. You have to be 15 feet off your rear wall.
So now you're at 57. The entire lot's only 68
deep. What room is 11 feet behind the garage?
You see how challenging that would be. And then
the lot itself was irregular and you're limited
by a five foot side setback at the narrowest
point. So then it ended up with this really weird
house and I was feeling okay about it and I got
down to my fifth iteration. I thought, okay,
this one I like. and then the lot next door to
it five and six were very similar and I thought
if I can mirror it and maybe make it work and
it didn't by the way but I got was able to get
something under five that worked and it wasn't
nearly as painful as six and then I designed
two different products for the other two lot
types so we have three of one lot type and then
three of the other and two of the really regular
ones so I designed I did all this and it was
Sunday at 11 Saturday night at around 10 30 and
I may or may not have some help from Kim Crawford,
some Sauvignon Blanc. There was an empty bottle
on my desk, let's face it. And I was feeling
so good about somebody, I don't know, it was
Kim. So there was an empty bottle of Kim Crawford
on my desk and I felt really good about it. I
don't like a lot five and six, but I love the
other product that we're gonna put on the other
six. And five and six will still sell, they'll
be fine. They back them out and they're gonna
have other features that are redeeming qualities.
They're smaller than I wanted. They were kind
of irregular, kind of weird floor plans, but
I use that to make them unique and kind of interesting.
So Sunday morning, I'm getting up and I, I make
my coffee and I go sit down at my desk and boot
up my computer. And the first thing on my computer
is that map again. And as I have my coffee like
this, like tomorrow we'll submit good. And I
zoom my computer wakes up and I look at the monitor
and you can believe this out. What? I completely
missed that we drew it. I missed it. Two other
engineers missed it. And the engineers admin,
admin person missed it. We didn't calculate it
right. We drew it with the 36, the 3575 of open
space because we had kind of wavered back and
forth. And he said, do you want seven or eight?
And so let's go to eight. If we do seven, it's
a different zoning classification and to be lower,
we don't need a park at all. If we do seven,
because then we follow the RS6. So we go to RS8.
but with eight homes, not seven. And I think
in his mind and in my mind, I knew we were doing
eight houses, but 500 times eight is 4 ,000,
not 3 ,500. And I have a degree in biochemistry
and pharmacology. He has a master's in engineering
and probably a bachelor's too. And I'm sure there's
other engineers. And none of us got that math.
We all missed it. And we agonized over this Monday,
Tuesday, Wednesday, we had a three hour meeting
on Wednesday, finalized it. Thursday I say, okay,
this is good. Go ahead and go for it. Because
Wednesday we had some revisions and he said Thursday
morning I'm going to have you two revisions,
one with seven lots and one with eight. Seven
is going to be our six. You're not going to need
a park at all. You're going to lose a lot, but
they're going to be better, better lots. Eight
is going to have this, but you're going to be
satisfied to figure out if you like it and tell
me which one. So that's why I said. go with eight
before I even really looked at it, but I'll figure
out a product that'll work there. So I guess
we're both thinking seven with RSA. We just weren't
thinking. But after two days of agonizing over
the plans, I had my coffee and the first thing
they boots up and it was zoomed in on the common
area, almost comedic, like cinematic. And it
zooms in and the screen lights up and I 3575.
I'm gonna calculate. It's not 500 times eight.
That's 500 times seven. So after all that, I
had to scrap it all. And then I agonized over
that map for another two hours on Sunday morning.
There is no way. And we'll put the map over the
screen. I want people to see how irregular it
was because we're limited by 4 ,000 square feet
of open space and every single lot has to be
at least 4 ,000. The lots around the common space
were exactly 4 ,000. The lots over here were
4 ,500, 4 ,300. We had room to spare. We had
it. We had the square footage. But then we were
limited by the frontage because there's also
a code that says how wide lots have to be. So
yes, we could have shrunken those lots to 4 ,000,
but it would have come at the expense of their
width because we would have had to shift everything
over this way. We couldn't rob from behind them.
We had to shift them. The common element has
to all be continuous. So it has to touch. We
couldn't just rob from some of them and make
a common element here to satisfy it. And it has
to be usable. It can't be part of a slope. So
it was just checkmate, checkmate, checkmate,
checkmate, checkmate. And that's how it felt.
And then the common area has to be at least 30
feet wide. So we already have to apply for a
waiver of standards on that 10 foot Paseo that
was going to walk in. But he thought you're going
to be able to get it because you're only walking
100 feet, 10 feet wide. We'll draw a nice landscape
planet and it will open up and you see it. But
believe it or not, those Paseos are usually 30
feet wide. They just look small and scale 10
feet is pretty narrow. That's half of a garage.
It's pretty narrow. I wasn't loving that, but
it was it was the best I could do with what I
had. So it was, I was already worried about that
because then you'd argue. Well, can't you just
make a strip of land on the side? Make that your
common area element. Great. That's awesome. But
it's got to be 30 feet wide. You can't just make
a, a seven foot park, a seven foot by 400 foot
park gave a little bit of that common area. to
each home except right to be connected. They
have to all be connected. Exactly. So it was
a puzzle. In fact, I had it cut out a little
paper doll cutouts. You know, I was moving around
like if I move this here, move this. No, if I
move this here, move this. No, move this here.
No. So there's a couple things. The street being
wider took from us because that took from these
lots. The cul de sac being 14 feet wider took
enough square footage from this lot that we could
have you know, given some to the common element.
And then they the one of the last comments was
we want a five foot wide setback around the entire
cul -de -sac. We don't want to just on half of
it. And there's there's gray area in the code
that would have said, yeah, we could there's
a gray area, the code that said we could have
sidewalk just on one side, because there's only
four homes on this side. If you want to get to
the sidewalk, you can cross your cul -de -sac
get to your sidewalk and be inside the network
of sidewalks that take you to the rest of the
city. Conversely, you could go on this side of
the cul -de -sac, just walk down your street
on the block top. Eight people live on that street.
It's a 47 foot wide street. The cars can get
around you. They wanted a sidewalk on both sides.
The beauty of it is lot square footages, setbacks
are measured from the back of the sidewalk. So
not only did we lose 14 feet with the cul -de
-sac, we lost another five feet with the sidewalk.
We lost from 33 to 47. We lost five feet as well.
and that takes away. So now when you look at
this map and we'll put it up on the screen, it
looks like 30 % of it is asphalt. Skullsack is
massive. It's only eight homes. cul -de -sac
is massive. The street is wide. You've got anything
about every hard surface sucks up heat. Oh my
gosh. And in Vegas, that's just a huge deal.
It's a heat sink. It's a convection oven. It
is. You've walked out to a parking lot and you
feel that heat radiating even eight o 'clock
at night when the sun's down. It's like a brick
oven. It just radiates. So I'm looking at this
map and thinking instead of having rooftops,
which are radiant by nature, instead of having
landscape even desert landscaping with maybe
some vegetation, some ground cover, that's heat
absorbing by nature, heat reflecting. We have
asphalt and sidewalk to make our city more sustainable.
Because these are sustainability standards. If
you read, I don't want to make any enemies of
the city of Henderson. I love the city of Henderson,
especially the people. They are amazing. I wish
I did more in Henderson. I want to build as many
50 foot cul -de -sacs in my career as I possibly
can. Did you hear me? You heard me wrong. I don't
want fool for you. They're loving. Yeah. Within
the first 20 words of the Henderson mission statement
is the word sustainable. There is absolutely
nothing sustainable about all of that aspect.
The criteria they're requesting is not sustainable.
There are so many interests that the person who
really wants a sustainability or the livable
city or the breathable city or the walkable city.
You look at what makes people feel not safe walking.
It is boulevard width. There's science to this.
There's a formula that how wide the avenue is,
how tall the nearest structure is, and how much,
if there's a break of trees between you and the
street, tells the walkability score to say, that's
how people are comfortable. If you ever feel
like, ah, it feels like I don't want to walk
across that parking lot. It's because it's too
much horizontal space. Right. You don't know
what could be lurking. Right. I mean, more space,
you do feel... You feel less secure. Yeah. And
cars drive faster. That is a science. Cars drive
faster on wider... avenues and boulevards. So
that's why, you know, we have these massive,
non walkable cities, we're watching it in real
time, you're going to be sitting in your driveway.
And your neighbor is one if you're on either
side of that cul -de -sac, your neighbor is 100
feet of asphalt, 100 feet of asphalt from you.
The street I grew up on. I measured it on I went
on the satellite imagery. The street that I grew
up on was 18 feet wide. East Coast narrow streets
and our homes were set way far back from the
road So we would play rollerblades and bikes
on our 60 -foot driveway the homes got the space
Imagine if that same city was designed today
the street would be three times that width And
I will tell you we had a lot of great times on
that street and cars drove slow on that street
We felt comfortable on our bikes with that street
get dropped off the bus. He just felt Comfortable
so that long driveway where you played that was
your childhood memories. Yeah is Now that's taken
out of the street and this is all now We're 20
feet off the street and now you get to live instead
We had a grassy front yard East Coast but a grassy
front yard You're playing building snowman in
the winter and planting trees in the spring and
a lot of great memories in that yard And the
home was set back for you just felt better And
we've given that to roads now because there might
be a sewer truck that in 30 years needs to go
down there. That sort of truck won't even be
on the road by that point. These are not going
to need an email. So I don't want to, it's not
a mail truck that goes up there every day. This
is a sewer maintenance truck that might never
ever go on that call the sec ever. There's a
chance that it never goes there. That is always
a possibility. it's not like fire where well
fire there's a pretty strong chance i know one
will be there but maybe someone has a yes you
hope but but you want them to be you want to
be able to get there yeah i'll for now get a
bigger truck to be able to be more efficient
in their firefighting then great we'll support
that absolutely but this is this feels like a
that they built something that isn't even going
to be practical. It's not even practical. Yeah,
99 % of the cul -de -sacs are that size or smaller
because the codes were smaller before. So a better
driver or the better or someone, you know, got
some kickbacks from someone who bought the extra
large sewer truck. So it's been interesting to
watch a play out in real time. Why are cities
like the way they do? Why are homes cost the
way they do? So now, these few little rules on
the rulebook, we lost. I mean, effectively, we
lost. We went from 15 to now we're down to seven
because technically, if we didn't have to worry
about that hillside overlay, I could have made
that neighborhood work. So now instead of 15
families living in there, or maybe even 23, but
let's just say 15 single family. Now you're down
to seven. And guess what? I'm not going to just
make less. I'm going to build a more luxurious
home because now my lots are much larger. Now
I don't have to build a park. Great. I mean,
I want to but I don't want my books to have it
in their yard anyway. I mean, it's nice to have
a park if you want to walk your dog down there.
But if you do have you want you want to be able
to put your own pool and you want the course
you want the privacy and what ultimately what
ultimately happens though, is that because I
can only fit seven onto a $2 million land development
deal. Now the homes have to get bigger. So the
yards don't actually get bigger homes get bigger
because I sell square footage. I don't really
sell land. Ultimately, at the end of the day,
no matter what people say, they're buying square
footage. So I sell square footage. So therefore,
I could have either sold 2200 square feet times
eight, or I can sell that same amount of square
footage divided by seven. So the homes are going
to get bigger. Trust me, I was already working
on the schematics for some of them. They take
up as much of the lot. Yeah. Because I have to
now build a 35 to 3 ,800 square foot home that's
going to sell for 1 .5, 1 .6 million in order
to make this project work. That's why the market
is so top heavy because of these rules. But the
bottom line is the interests don't know that
or care. They just say, oh, my job is to make
sure that the sanitation truck can turn around
here. That's his job. He's not doing anything
wrong. Right. Fire. My job is to make sure the
city's safe from fire. Great. Planning. Our job
is to make sure that the city standards that
have all been agreed upon by city council and
voters and people that put the mayor in office,
the population at large, the standards that these
people have told us indirectly that they want
to live in, that's my job. Their job is not to
preserve the real estate market. But is there
no consideration for lifestyle that will be happening
there? They think this is lifestyle. This is.
That's what they think. Because there's so many
moving parts to development into cities, you
know, to city planning, I should say. that there's
no one sole arbiter of it. There's no one person
that sits there like Oz behind the curtain and
says, you know, get your Tin Man and get your
dog. There's no one that is in charge of that.
It's a committee basically, more or less. I mean,
it really is. It's a committee of people. Is
there not some rule book that they It is. But
that's the thing is that when when most of these
are rules, but there's always usually a waiver
process or something, you could fight it. But
you don't want to go With this with the zoning
change and about nine waivers of standards. Yeah,
I told my engineer that I said we are gonna pick
one or two waivers That's it. I don't want to
go with them and go to them and say oh by the
way I know I already asked to not have to do
any park space can also do narrower streets Can
I also not do a sidewalk can also not do a cul
-de -sac? That's what your sanitation person
wanted now. I'm gonna get none of them. So it's
like a little kid Do you want to stay up till
10? And ask nicely or do you want to go for midnight
and also ask for ice cream too and also has to
go to the park tomorrow and also So I think that
you know that was the path of listers that are
going to That are going to influence what you
can sell who your buyer will be what they would
pay how much home They're gonna get how much
that's really what it came down to is that I
didn't want that fight because this project will
probably pencil better and Make me lose less
sleep by doing seven luxury homes versus ten
more middle -market homes I'm already more excited
about it, because that's what our company does.
Anyway, we build premium. So this is in our real
house. This is what we do. So now this product
will be congruent with what we're used to doing.
And I'm excited about it. And by the way, so
is the Excel spreadsheet with a performer on
it where it says, Oh, oh, oh, if you sell everything
for 1 .5, that is a that is a great project.
That's a very good project. Way better. So then
I guess that answers my question. Had you known
that these obstacles would be in your future,
would you still have moved forward with the purchase?
And it's yes. I mean, had I known, I was already
mentally prepared for it because I knew it was
going to be a long shot. I didn't necessarily,
and by the way, here's the other thing. I'm choosing
to cave on these things. I could fight these
things. I could spend two or three years, make
my case. And just develop for the sake of developing
and say, I don't care how much blasting is. I
don't care how much hillside overlays. Cause
I blast the 23, 24 ,000 square feet of hillside.
I can fit whatever I want to in here. I could
do a rockery wall. You know, those beautiful
Boulder retaining walls. I could do a wall like
that. I could really get creative here. I could
do a ton of site work. I could fight the city
too on certain things. And I could probably get
my 15 homes in there and they would probably
all be luxury homes. But my interest is let's
get into this project. Let's develop it. Let's
move on to the next one. This is not my end all
be all. This is not my opus. I'm not here to
make this little hillside on Horizon Ridge, a
15 home subdivision. I don't make it seven. Right?
I'll leave 23 ,000 square feet on fin of you
know, preserve hillside and we'll move on. I'm
not going to fight on the common area element.
I'm going to reduce the zoning. I'm not going
to fight on the street with I'll give them a
street with Right? So that's kind of, I was prepared.
And I think that's why I cave so easily because
quite frankly, I had already run numbers going
all the way down to seven. I never went below
seven because I thought you six is really challenging.
That's going to be really tough because now you're
hitting maybe 2 million. And then now it needs
to be gated. Now it needs to have maybe a better
level of finish or whatever. There are certain
things that aren't going to matter to a 1 .2
or mattering to 2 million. So an area can carry
anything between there. I mean, there are some
like we've talked about before. There are homes
within a stone's throw that are there's 10, $15
million homes that are behind guard gates. But
that zip code has some of the most expensive
homes in the city. Actually, I think it does.
I think that zip code is the most expensive zip
code. If I had to look, I'd have to verify it.
But I'm just looking at what's in there. There's
multiple country clubs in there. There's multiple
enclaves of very wealthy people and celebrities
that that the top point zero one percent of our
city has outside of that, you really could build
any any level between there. And I mean, trust
me, I've laid awake and I thought I just do a
little blister or a little knuckle of four insanely
luxury custom homes that are two and a half million
dollars. I mean, it'd be risky, but it would
be good. I could technically do that. I think
it would carry it. Cause you'd find that buyer.
You'd find somebody for them. You only have to
find four of them in a city of 300 ,000. They'd
move slowly. They'd be different. Cause if you've
got two, if you've got two and a half million
that you could put into a home, you'd rather
be behind the guard. You'd rather be with that.
I mean, there, there is that, that trade -off
that somebody would make. I don't know. Cause
I guess there's people who don't want to. There's
a seat for every house. So I mean, or a nice
forever seat in this situation. So I think it's,
I mean, I'm, I'm still very excited about the
project. It's just interesting to me that to
watch it unfold in real time. That's the bottom
line is that, wow, this is why cities look the
way they do. And this is why an older neighborhood
has different charm than a newer neighborhood,
because they're not, they don't have a hundred
foot cul -de -sacs. That's why a newer neighborhood
might feel soulless. It's so much road, it's
so much street. And people will say, builders,
you know, they don't build like they used to,
it doesn't feel the same, it doesn't have that
same charm. And they're right. But they don't
know the backstory as to why it isn't necessarily
that you had some greedy idea to build less houses
and put in more street. No, there are these these
rules. Trust me. I don't want to do and they'll
see, you know, I can already imagine people coming.
I've got more luxury homes. Everything's luxury.
Yeah, just the nature of the beast. Or we can
just not do them because it's that it would be
I can't do seven entry level homes on that. I
just can't. There's just I would be doing it
as a charity. I couldn't do it. I tried, but
can you just put more basic product on there
and give people really nice lots and really nice
homes? And I would lose money on it. And it's
a good story. I mean, the story, the backstory
and how we got here is really interesting and
things that people don't really think about any
of that. Right. How we got here. Right. Well,
that's it. That's that one. And I bored the audience
enough. I'm not going to get into other projects,
but there's been some funny stuff. Nothing as
egregious as that. So And obviously it's a project
we'll continue talking about, but interesting
to see how we have gotten to where we are and
still lots of headway to be made. I mean, I haven't
even resubmitted. So yeah, well, it's technically
today. So hopefully they got it in. I don't know.
And then the funny thing is to look at it where
another eight to 12 months before. we've got
six more months of just approval process then
we got six months of civil improvement plans
and then we got six months of developing the
site and then i got to build the houses so very
long process very very long horizons yeah and
i know you've talked about that upstream this
is the upstream yeah and then you're hitting
a moving target because you don't even know what
they're going to let you put there or what you're
able i shouldn't say what they're going to let
you because there are rules there are waivers
i don't want to make it out to be some monster
where they're saying I'm picking my fights though
and saying, eh, I don't want to do that. I don't
want to go for nine waivers because I'm going
to get none of them or two of them. And what
works for you, what works for your business plan,
what works for the level of stress. That's a
good way to put it. You have your own, that's
what makes Trust Home Builders who they are,
right? You have your standards and the fights
you're willing to put in on. That's right. For
you are most important, the builder to the community
that you're putting together. And what I'm passionate
about, I'm passionate about. turning, getting
these projects up and running and going and sold
and done before I'm worried about when I get
to put there. I didn't inherit this from great
grandma. I have a vision for this lot. There's
going to be other parts. It's exciting. I don't
want to spend it as a negative thing. It's actually
been really great. I'm very excited about it
and it's been enjoyable to go through the process.
And, you know, keep kind of the pivot, right?
Okay, we're gonna pivot. Actually, the pivots
are fun. They are. Now I'm challenged again.
Yeah, now I want to go back in my software and
say, well, what kind of luxury product can they
put there? That's still exciting. Yeah, absolutely
excited. I'll be excited to see what kind of
progress we put there. We'll see. We'll keep
watching and we'll keep you informed as we go.
Thanks for joining us on another episode of Trust
the Process Podcast and we will see you next
time. Thanks. Bye -bye. Thanks for tuning into
the Trust the Process Podcast. Make sure to follow
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