Steve Spillette
CDS Community Development Strategies
CDS Community Development Strategies
CDS was recently hired to perform a demographic study in the Oklahoma City area. While completing this study, we were somewhat surprised by the prevalence of large-lot residential subdivisions of relatively recent vintage. This article examines the possible reasons why large acreage residential developments are more common in the Oklahoma City area.
In many cities, large acreage residential developments can be found on the outskirts of town—although they typically make up a rather small share of the total housing stock. In the Oklahoma City area, these types of residential developments are common around much of the perimeter of the built-up suburban areas and in formerly rural towns. In these developments, residential lots are typically 0.5 to 2.0 acres, each with on-site wells and septic systems, and newly built homes are $300,000 to $500,000. This price puts developments such as these well within the reach of most upper-middle class single income households, and many dual income middle class households.
These developments are typically situated within a reasonable commute of central Oklahoma City. For example, the aerial photos below are two areas of large-lot residential we found during our research. We have included an accompanying directions map to illustrate the commute to the Devon Energy Center (Devon Tower)--Oklahoma City’s most well-known high-rise office building. (Click on the images below to increase the size).
These developments are typically situated within a reasonable commute of central Oklahoma City. For example, the aerial photos below are two areas of large-lot residential we found during our research. We have included an accompanying directions map to illustrate the commute to the Devon Energy Center (Devon Tower)--Oklahoma City’s most well-known high-rise office building. (Click on the images below to increase the size).
While we found large acreage developments to be relatively common in the Oklahoma City area, this type of housing is generally rarer in many other metro areas, particularly those in Texas. In the Houston region, while such developments were more common in decades past, today these types of residential properties are uncommon and mostly relegated to exurban areas far beyond suburbanizing areas. The few new large-lot subdivisions that do occur closer to the edge of suburbia (and provide a reasonable commute) tend to be much more expensive and within reach for upper class households only.
We have an educated guess as to why this may be so.
First, of course, Oklahoma City is a much smaller metropolitan area in terms of population than Houston (1.3 million persons vs. nearly 6.5 million) and the spatial expanse of developed area. This means that a greater amount of exurban land will be within a commutable distance of the urban core employment centers.
However, we suggest there could be another reason. Based on our experience performing many studies across Oklahoma, suburban and exurban development in the State differs from that in Texas in a major respect: the methods of financing and building basic utility infrastructure (water / sewer / drainage).
Oklahoma developments that require community water and sewer systems must generally obtain such services from a municipality which can provide connections to the existing public utility systems. Conventional suburban development, with lots usually ranging from 50 to 80 feet in width and of total area a quarter acre or less, cannot use a well and septic system on each lot, for environmental and health safety reasons; a common water and sewer system is required. In Oklahoma, therefore, conventional suburban development can only occur where connections to existing public water and sewer systems are available, limiting the geography of development possibilities. Land with no prospects for connection to a municipal water and sewer system would not be valued for conventional suburban development. Such tracts instead would be feasibly priced for moderately upscale acreage residential subdivisions.
On the other hand, in Texas, various types of special districts are available to make it financially feasible for a developer to install common water and sewer systems on property that is not able to connect to existing public water and sewer systems. With development tools such as Municipal Utility Districts (MUDs), a conventional suburban-style subdivision can therefore be located on more isolated exurban properties. This means that most exurban land can be valued for its conventional suburban development potential. In general, this represents a higher value than large-lot residential--so properties within a reasonable commuting distance of major job centers (even the more outlying suburban job centers) are likely to be priced for conventional suburbia, not acreage residential.
While this is purely a theoretical analysis, we see a lot of logic to it, and view it as one more way MUDs and other special districts have had an impact on property markets in Texas.
We have an educated guess as to why this may be so.
First, of course, Oklahoma City is a much smaller metropolitan area in terms of population than Houston (1.3 million persons vs. nearly 6.5 million) and the spatial expanse of developed area. This means that a greater amount of exurban land will be within a commutable distance of the urban core employment centers.
However, we suggest there could be another reason. Based on our experience performing many studies across Oklahoma, suburban and exurban development in the State differs from that in Texas in a major respect: the methods of financing and building basic utility infrastructure (water / sewer / drainage).
Oklahoma developments that require community water and sewer systems must generally obtain such services from a municipality which can provide connections to the existing public utility systems. Conventional suburban development, with lots usually ranging from 50 to 80 feet in width and of total area a quarter acre or less, cannot use a well and septic system on each lot, for environmental and health safety reasons; a common water and sewer system is required. In Oklahoma, therefore, conventional suburban development can only occur where connections to existing public water and sewer systems are available, limiting the geography of development possibilities. Land with no prospects for connection to a municipal water and sewer system would not be valued for conventional suburban development. Such tracts instead would be feasibly priced for moderately upscale acreage residential subdivisions.
On the other hand, in Texas, various types of special districts are available to make it financially feasible for a developer to install common water and sewer systems on property that is not able to connect to existing public water and sewer systems. With development tools such as Municipal Utility Districts (MUDs), a conventional suburban-style subdivision can therefore be located on more isolated exurban properties. This means that most exurban land can be valued for its conventional suburban development potential. In general, this represents a higher value than large-lot residential--so properties within a reasonable commuting distance of major job centers (even the more outlying suburban job centers) are likely to be priced for conventional suburbia, not acreage residential.
While this is purely a theoretical analysis, we see a lot of logic to it, and view it as one more way MUDs and other special districts have had an impact on property markets in Texas.
About the Author: Steve Spillette is President of CDS Community Development Strategies and has performed a variety of market studies and financial pro-forma analyses for both private and public clients. Mr. Spillette has several years of experience in retail market analysis and multiple degrees related to real estate and planning--including an MBA from Texas A&M University.
About the Author: Steve Spillette is President of CDS Community Development Strategies and has performed a variety of market studies and financial pro-forma analyses for both private and public clients. Mr. Spillette has several years of experience in retail market analysis and multiple degrees related to real estate and planning--including an MBA from Texas A&M University.
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