WilmingtonBiz Magazine

Outer Limits

By Jenny Callison, posted Mar 24, 2022
Homes in various stages of construction can be seen throughout Brunswick County master planned communities, including Compass Pointe.
A planned housing development application working its way through Brunswick County’s approval process could be an example of a relatively new approach to addressing the demand for housing in the fast-growing Cape Fear area.  
Malmo Ventures LLC is proposing to build 1,875 housing units on 685 acres just off U.S. 74/76, across the highway from Compass Pointe. Unlike that master-planned golf community of mostly single-family homes, Malmo Ventures is proposing a mix of multifamily, duplexes, townhouse and single-family units. Some of the single-family homes would be intended as rentals.  
For Malmo Ventures to move forward with this development, Brunswick County would have to rezone the tract from low-density residential to high-density site-built residential. That kind of zoning reconsideration could become more common as high demand for suburban living meets a dwindling supply of housing.  
“Brunswick County has an extreme housing shortage,” said Brunswick’s director of planning Kirstie Dixon, while not commenting specifically on Malmo Ventures’ application. “We need affordable housing desperately, and we need middle-income housing for people like teachers, public service workers and government workers. We also need a variety of housing types for people at different phases of their lives.”  
That includes a big demand for what Dixon calls “estate lots”: large lots that accommodate a spacious home or even a mini-farm.  
“The challenge is land prices, whether it be for workforce housing or estate lots,” she added. “Developers have to make a living. Estate lots might not be the way to go.”
Add to what might be considered normal demand for property, there is the pent-up demand from the past year-and-a-half, said Ashley Kent, owner of Kent Homes, a residential builder in Brunswick County.
“Land can’t be developed quick enough,” she said. “With our business model, we pretty much build on your lot. Most of where we build is in communities like Compass Pointe, The Bluffs in Leland, St. James Plantation and Brunswick Forest. In those four communities, the developers open a new section of lots, and they are sold out quicker than (the developers) expect.
“It used to be people would want to build on their lot in six months to three years, but now we’re seeing people getting in as quickly as possible. That drives up land prices and certain projects in certain communities.”
Some national homebuilders are also entering the local market, creating more competition for dwindling resources, Kent added, explaining that those builders are aggressive, and they have the means to buy up whole sections of newly available building lots.
“People are moving here every day. Wilmington is a desirable area and is going to remain a desirable area,” said Cameron Moore, executive officer of the Wilmington-Cape Fear Home Builders Association. He agreed that the availability of developable land is the top challenge facing developers and would-be homeowners. In New Hanover County and its municipalities, where available land is truly at a premium, there is more focus on density through infill projects as well as mixed-use, multifamily developments such as Mayfaire and a couple of other projects in the works along Military Cutoff Road.
“New Hanover County and the city of Wilmington are going through a kind of metamorphosis: they’re ready to see more vertical construction – one way to gain density,” he said. “To create affordable housing you can use density, diversity and height.”  
In the two counties adjacent to New Hanover, there is more land, but some areas may lack water and sewer, Moore continued.  
“The lack of sewer hurts (developers) in Pender County. It is changing: Some private companies are coming in to provide sewer or the developers themselves are bringing in water and sewer, but with septic, you must have larger lots so you’re not going to see efficient use of land. A standard subdivision lot is 7,000 to 10,000 square feet; in Pender, lots are more likely to be 15,000 to 20,000 square feet.”  
Water availability is one of two major limiting factors to development in Pender County, according to the county’s planning director Travis Henley. The other is school capacity, which he says is always a county priority.  
Regarding water supply, Henley said, “The county has made some significant progress in building additional water capacity through the construction of a few wells, and is currently exploring more significant projects toward that end.”  
Moore said there are more areas with water and sewer service in Brunswick County. “There are a couple of sources of water and sewer: sanitary districts and municipalities themselves,” he said. “The completion of I-140 is opening up a lot of development moving into northeast Leland and Navassa.”  
Brunswick County, which saw rapid growth before the economic downturn of 2007-08 and is once again one of the fastest-growing counties in the U.S., began preparing for this growth several years ago, according to Dixon. Not only is demand coming from New Hanover County and people moving to the Cape Fear area; it’s also coming from Horry County, South Carolina.  
Pender County is now one of the fastest-growing counties in the state and is seeing development demand from New Hanover as well as Onslow counties, Henley said. Moore pointed to the more than 30% jump in permits for housing projects in the Surf City area, near Pender’s boundary with Onslow County.  
Both Brunswick and Pender counties have a Unified Development Ordinance that lays out rules for new development, classifying most new subdivisions as major subdivisions or planned developments.  
Because of limited land supply and the costs of building new neighborhoods, even smaller-scale developers are looking for ways to gain density and keep costs down, according to Dixon. In planned developments, builders can cluster their housing and put half the tract in a conservation use. The result, she added, is a win-win for the developer and for the environment.  
“Clustering (homes) saves a lot of (infrastructure) costs, and maybe some of the land in conservation is wetlands,” Dixon explained. “Our ordinance is designed to balance everything. Planned developments require buffers on projects. Some back yards border buffers or conserved property. That really helps adjacent neighborhoods.”  
By contrast, standard lots in major subdivisions are 10,000 square feet, taking up more land with fewer homes. And there are no buffer requirements. And while a planned development can include a variety of housing types and even some appropriate commercial development, a major subdivision contains single-family housing only.  
“We really encourage planned developments. They are better for the community and better for the environment,” Dixon continued. “Developers won’t lose any housing possibilities. There are a lot of positives from development, such as community health and the local economy. We can’t stop most development in North Carolina, but we can help mold it.”  
Pender County officials are seeing more requests for higher-density developments, but those are being scrutinized closely because of infrastructure concerns, Henley added.  
“We definitely encourage planned developments where they are appropriate, whether that is accomplished via our Planned Development zoning district or through a conditional rezoning,” he said. “Both have proven effective at yielding more positive development outcomes for property owners or developers as well as neighboring residents, while also increasing the conformity to the county’s long-range planning documents like the Pender 2.0 Comprehensive Land Use Plan.”  
Brunswick, meanwhile, is in the middle of creating Blueprint Brunswick 2040, which addresses land use, conservation and parks and recreation for the future. Dixon said that the plan, once approved, will help officials decide where the county should invest money.  
In gathering information for Blueprint Brunswick, county officials heard plenty about three issues affecting development: affordable housing, water and transportation, Dixon said.  
“Every focus group we held talked about affordable housing,” she said. “We’ve lost a lot of trailer parks, which provided affordable housing. Those properties are now being used for other things.”  
The big water issue, she explained, is flooding. Building homes in flood zones is discouraged in planned developments. Some major subdivisions, “probably have lots in the flood zone, so they may need emergency services in a hurricane.”  
Many developers, Dixon continued, are using more restrictive flood standards than are required because they realize the area’s increasing vulnerability to floods. “They are oversizing their infrastructure to hold storm water. Most developments are coming in at 10- to 25-year flood standards – Leland has just updated its minimum to 25 years – while most bigger developments are developing voluntarily to 100-year standards.”  
Regardless of the size, scope and type of project a developer is planning, a huge sticking point these days is the rising cost of land, materials and labor and supply-chain bottlenecks.  
“There’s no such thing as delivery on time anymore,” Moore said.
Kent calls the delays in getting building materials “unprecedented and extremely challenging.”  
“We are ordering windows and doors three to four months before we start a home; garage doors months before,” she said, adding that delays extend to labor and even inspections.  
“Inspections departments are extremely overburdened,” she said. “And we had a whole crew out for weeks with COVID. Our base price for homes in the past year has probably gone up $100,000.”
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