Building in Pima County – the “outskirts” of Tucson

    The New York Times in the magzine article, “The Boomtown Mirage”, written by Samantha M. Shapiro about Maricopa, Arizona, certainly painted a dismal picture.

   This picture is not Tucson, Arizona.  Maricopa is a bleak situation in which builders, lenders, buyers, and real estate agents,  allegedly were complicit in trying to build a sleepy desert town into a booming suburban area.

    Although it appears that Arizona has an abundance of land, approximately 82% of all land in the state is owned by some type of governmental agency.   That leaves a mere 18% of land as a tax base and for development.  Land was and is at a premium price and therefore developers optioned property in seemingly remote areas where land was cheaper than urban areas.   (Developers have let some of those options expire because of the downturn in the market.)

     Developers also sought counties and towns which did not have stringent development regulations relative to other areas.  They looked for places where impact fees are low or non-existent which helped developers keep the price of housing lower.

     In Tucson, master planned communities have sprung up on the outskirts of town in Pima County.  Two story homes on small lots dot the landscape.  Two story homes were uncommon in Tucson prior to this wave of development.  Builders realized they could erect a 3600 square foot home on a lot which could previously sustain only an 1800 square foot one story home because of zoning and density changes.

     Much of the builder profit margin comes from the upgrades buyers put into the homes, so it is cost efficient and more profitable to build larger homes on less land.

     Large tracts of land were subdivided and various builders contracted for sections of the tract on which to build homes.  Perhaps 5,000 or so homes could be built on what was formerly cotton fields, desert raw land, or larger tracts 20 to 45 minutes from Tucson proper.

   This is not unlike Robson’s concept years ago in purchasing property more than 20 miles from the city to build Saddlebrook, a large master planned retirement community.  Activities for seniors, now called “active adults”,  were the lure for Robson.  Now water parks, golf courses, and “conservation” land (often unbuildable arroyos) are the lure other builders use to attract buyers.

     www.nytimes.com/pages/realestate/key/index.html

     Tomorrow – Builder Financing

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