SOUTHERN CALIFORNIA ENTERPRISE : Thinking Small : Builder Bets That There’s a Big Market for Little Homes
Everett Wilson had just taken a quick tour of a housing tract that may be the wave of the future in Southern California--and he was not much impressed.
Many of the houses under construction at the new south Orange County development are as small as 870 square feet--about a third the size of a typical 7-Eleven. On top of that, about 15 homes sit on each acre of land--about twice the number in a typical tract.
“The homes are just too close to each other,” opined Wilson, an appliance repairman who said he would rather keep renting his Mission Viejo apartment than buy one of the small houses at Los Abanicos, a neighborhood in the master-planned community of Rancho Santa Margarita.
“If my neighbor ate garlic for lunch,” he added, “I’m afraid that I’d smell it from my own living room that night.”
Such skepticism notwithstanding, builder RecreActions Group of Cos. thinks that its new development of 306 free-standing houses--with prices starting below $130,000--could be an important step toward ameliorating Southern California’s longtime housing affordability problem.
The homes are among the least expensive single-family detached houses to be sold in the high-cost areas of Southern California in recent years. The last time a developer offered detached houses in Orange County at this price was more than a decade ago.
Officials at Newport Beach-based RGC are betting that many people who work in the coastal areas will buy a small house close to their jobs rather than a condominium or larger home in Riverside County that would require a long commute.
“We’re targeting people who are willing to accept a slightly smaller home and a smaller yard in exchange for an affordable home that offers shorter commutes and more time with their family,” said Jim Murar, an RGC co-owner.
Murar said Los Abanicos is RGC’s investment--which so far has totaled $10 million--in the idea that “some of today’s home buyers will say, ‘Enough is enough.’ ”
“We think a lot of people are willing to give up some of their living space if it’s going to give them more time at home and save them money too,” he said. “What good is buying a house if you’re too tired from driving to enjoy it at the end of the day?”
Although inexpensive by Southern California standards, all the homes at Los Abanicos have at least two bedrooms, 2 1/2 baths and feature such niceties as tiled roofs and two-car garages. Base prices include central air conditioning, designer countertops and a kitchen full of built-in appliances.
The key to keeping sales prices down? Density. The average of 15 homes per acre compares to about eight homes per acre in most new tracts and five homes per acre in a typical 1950s Southern California tract. The houses are precisely 10 feet apart, the minimum separation allowed by building codes.
Squeezing that many homes onto each acre was critical to the project because land in Orange County is among the most expensive in the nation.
Ready-to-build land where Los Abanicos is rising sells for about $500,000 an acre, which means that the lot itself would account for about $63,000 of the cost of each house in a typical tract of eight homes to an acre, according to the Meyers Group real estate consultants of Newport Beach.
By roughly doubling the number of homes on each acre and shrinking their size, RGC can trim about $33,000 from the cost of each house and pass the savings on to the buyers.
“We’ve seen some builders put 10 houses to an acre, but nobody has tried 15,” said Jeff Meyers, Meyers Group president. “It’ll be interesting to see how buyers receive it.”
Indeed, if Los Abanicos sells out quickly, other developers may quickly follow suit, real estate specialists say. “Builders are the biggest copycats in the world,” said Sanford R. Goodkin, a well-known real estate consultant in La Jolla who has worked in Southern California since the 1950s.
“If this project flies, RGC will look like pioneering geniuses. If it flops, everyone will call them fools. It’s the nature of the business.”
The difficult job of coming up with a design to make the small homes seem larger than they really are fell to McLarand, Vasquez and Partners, a Costa Mesa architecture firm.
The result was an unusual layout composed of a series of courtyards, each one horseshoed by seven or eight homes. The front windows of each home look across the courtyard--which functions as a sort of community front yard--and on to the houses on the other side.
Each home is also angled slightly so that its front door faces a different direction from the doors of neighboring homes, giving each owner a private entrance and a small but private yard. Most windows are angled too, allowing residents a view of the surrounding hillsides rather than of their neighbor’s bedrooms or exterior walls.
“Nobody wants to open their blinds and stare right into the wall of the next building,” architect Ernesto Vasquez says. “That might be OK if you’re living in a New York apartment, but, hey--this is sunny Southern California.”
All of the homes have two stories, Vasquez added, because building that way is cheaper and uses less land than building a house of the same size all on one level.
“The homes are small, but they don’t really feel small,” said Karen Jeffers, who--with her husband, Daniel--recently plunked down a small deposit on an 870-square-foot house.
Until they happened across Los Abanicos, the Jefferses had been resigned to the idea of buying a condominium because of their limited budget.
Their new house will be just a few minutes away from Karen Jeffers’ part-time job as a bank teller and the work her husband does as a painter. It also will have a yard for their 4-year-old daughter and the baby the family will welcome this fall.
“We’ve finally got our piece of the American Dream,” Karen Jeffers said, “even if it is a smaller piece than usual.”
Making a Home Seem Larger
While the architects at RecreActions Group of Cos. squeezed as many houses as possible onto the land at Los Abanicos, they also tried to make the inside of the homes seem larger than they really are.
For example:
* Ceilings in many rooms are unusually high and oversized windows are used to let in more sunlight.
* Bathroom vanities are only 19 inches deep instead of the standard 24 inches, which the designers say still leaves plenty of storage space but gives families more floor space.
* Medicine cabinets in the bathrooms are recessed into the walls, leaving more space over the sink.
* Upstairs bathrooms are separated by a single wall, which saves money because both can be served by a single plumbing line.
