What is the cost of a lot? 11/17/2019
Let's consider homes and lots by definition to be:
- 24 feet wide and 50 feet deep.
- Lots are 4 feet per side extra and 20 feet front and back
- Linked homes are 0 feet to 3 feet between the homes
- Semi-detached (2) homes share a common wall
- Town houses (6) share common walls.
- A serviced lot costs $144,000 per 2880 square feet.
- Additional savings are realized on survey, gutter, landscaping costs ++
- Minimum lot size for a free standing home would be 32 feet wide by 90 feet deep.
- Minimum lot size for a linked home would be 56 to 59 feet wide by 90 feet deep.
- Minimum lot size for 2 semi-detached homes would be 56 feet wide by 90 feet deep each.
- Minimum lot size for 6 town houses would be 152 feet wide by 90 feet deep.
Then the most expensive part, the lot, would show savings of:
- Free Standing Home, 2880 square feet - 0
- Link-detached Homes - 5040 to 5310 sq ft - 840 to 450 sq ft or $21,000 to $11,250 per home.
- Semi-detached Homes - 5040 square feet - 840 square feet or $18,000 per home.
- Town Homes - 13,680 sq. ft. - 17,280 sq ft or $30,000 per home.
The savings on the lot size are easy to determine, it's the rest that is difficult. Putting up with common walls or narrow spaces between homes can be deal breakers. I have kept things to a minimum using 90 feet deep were most bylaws requiring 100-foot deep lots.
There are more saving in building larger spaces than smaller free standing ones so the construction costs will increase the savings in most of the models I have shown.
It is a greed driven system, new home construction. It is not what are the costs but what the market will bear. A hundred acres can be bought today for $2,000,000 in smaller communities. That yields 44,000,000 square feet or 70% for building lots 30,800,000 square feet and based on the above model of a single-family home that would be 9,625 lots (we used a 100 foot deep lot). Hence the pre-prep lot cost is $208 each. You can scratch your head and even with a $60,000,000 land prep and services costs that still works out to only $6234 + 208 - $6,442 per lot.
I suppose you have to look at $62,000,000 invested over a period of years and ask yourself where are all the costs.
The community gets the sub-division fully serviced and all they have to provide is the connection and ensure adequate services. Communities can charge the builder development fees that we've seen as high as $10,000 per lot. That still only takes the lot cost up to $16,442 per lot.
The community also picks up taxes on these additional homes. Using $3,500 each per year that is an annual pick up of $33,687,599 to cover costs of services like sewers, strm sewers, snow plowing and street repair. Water is something you may pay extra for.
We believe that in today's market, and if the assumptions are correct, a fair lot cost would be $30,000 or less.
If you think that's fair and not greedy than happy new home buying.
Conclusion, the farmer should give the land to developer and and get a royalty of @10,000 for each individual family unit built. In this example that would add up to 9,645,000 and may take 10 years. So get $1,000,000 down payment to be deducted from the first 100 homes built and the royalty starts after that. It doesn't make sense to sell outright.
When time permits we'll look at the building costs of s single-family unit that is 1,200 square feet with a full basement of the same size.
Just to get the thought process started my estimate is, only from the top of the basement up, $65,000 for labour and 85,000 for materials. You still need a basement, weeping bed, water proofing and excavation of course. My thoughts on the basement are in the $30,000 range and include the driveway and grass. so a 1,200 square foot home with an unfinished basement would be approximately $180,000 that works out to $150 per square foot. That package would consist of a three bedroom homee with no garage, 1-1/2 baths and complete with paved drive-way and grass covered lawn. Don't hold me to this, just a quick estimate based on previous experience.
Including the lot we believe it would be $325,000 complete, give or take 10%.