The Goldilocks Option: Why Townhouses Might Be Just Right for Housing Development
Nov 20, 2024
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Andrew Ganahl, managing partner at AND Real Estate, dives into the benefits of townhouse developments in urban areas, particularly Kansas City. He discusses townhouses as a new American dream, striking a balance between affordability and community needs. The conversation highlights unique challenges like zoning regulations and outdated infrastructure that affect costs. Ganahl also shares insights on blending different housing types and the evolving preferences for urban living, suggesting townhouses could be key to addressing housing shortages.
Townhouses are emerging as a critical housing solution to address affordability and the 'missing middle' in U.S. housing options.
Navigating complex zoning regulations and innovative financing strategies are essential for successfully integrating townhomes into urban developments.
Deep dives
The Role of Townhouses in Addressing Housing Affordability
Townhouses are positioned as a vital solution to the housing affordability crisis in the United States. They provide a middle ground between single-family homes and high-rise apartments, addressing the 'missing middle' in housing options that currently constitutes only 22% of U.S. homes. With a significant shortfall of homes estimated between three to seven million, the rising popularity of townhouses—where nearly one in five newly constructed homes are townhouses—highlights their growing relevance in urban planning. This shift towards townhouses could become a significant step towards making homeownership more attainable and sustainable in urban settings.
Personal Journeys and Urban Development Insights
The journey into urban infill development often meanders through various related fields, as illustrated by a real estate developer's background in public policy and economics. After experiencing major events like the dot-com crash and the 2008 financial crisis, the developer transitioned towards the tangible outcomes of real estate, seeking to create walkable and vibrant communities. This path reflects a shift in priorities, focusing on the appeal of building urban environments where new developments can directly enhance neighborhood life. Such experiences emphasize how an interdisciplinary approach can enrich the practice of urban planning and development.
Zoning Challenges in Townhome Development
Developing townhomes often entails navigating complex zoning regulations and infrastructure challenges, particularly in areas with little precedent for such housing. For instance, one developer noted the negotiations over alley widths during the permitting process, which involved discussions with public works and fire departments to meet safety regulations while maintaining feasibility for smaller projects. These zoning difficulties highlight the importance of aligning city regulations with the demand for denser urban housing solutions, as many neighborhoods face infrastructural limitations. Despite these challenges, a proactive approach to zoning can facilitate the successful integration of townhomes into existing urban fabric.
Innovative Financing Strategies for Mixed-Use Developments
Mixed-use projects, such as those combining townhomes with rental apartments, often present unique financing challenges requiring creative solutions. This developer encountered complexities regarding lender expectations, as traditional financing models typically separate for-sale and rental units into distinct loans. By working with a community bank familiar with their project, they crafted a unified financing approach that allowed for both townhome sales and long-term rental strategies. Such innovative financing structures can provide developers with flexible options to manage risk while meeting diverse housing needs in urban neighborhoods.
In this episode of Upzoned, host Abby Newsham is joined byAndrew Ganahl, managing partner of a real estate development company that specializes in urban infill housing. They discuss a Washington Post article about townhouses, exploring the benefits of this style of development and Ganahl’s own experiences with building townhouses in Kansas City.