Single Family for Rent – A Consultant’s Perspective for Project Success

Emily Drake:

I’m joined here today by a couple of my colleagues from Kimley-Horn, and we’re here to discuss some of the challenges and opportunities that we’ve seen in the single-family for rent market over the last few years. I will say that this is really meant to be a single-family for rent 101 presentation. While we’ll get into a few of the details that tend to be challenging from a site planning exercise, this is not meant to cover every single item that might come up.

A couple of housekeeping items: thank you for joining us, this is being recorded and you can, after the presentation, get onto the link that will be sent to you and find the recording as well as contacts to other professionals at Kimley-Horn that can help out in your local market. We have a question and answer area at the bottom of zoom or wherever it’s located on your screen. Feel free to type in your questions as we go along and we’ll try to answer those as we go along in the presentation or field them at the end, we will have a little bit of time to discuss questions then.

I’m joined by a couple of my colleagues, Joseph Hornisher, and Lori Lusk, both civil engineers with Kimley-Horn and as many of you know, Kimley-Horn is a nationwide firm we’ve got over 4,500 individuals. In the next slide you’ll see we just completed our 200 millionth multi-family unit nationwide. We have so many single-family units, I don’t know that anybody in the company could even count them. Why that’s important is that this product type, the single-family for rent product type, kind of fits in the middle of those two. We’ve got experience that bookends that product type and we’ve been developing that product type with our developer friends for the last few years as well.

I like to say from big to small, we do it all. We work on one acre, small little commercial pads, all the way up to 20,000 plus acre master plans. And we do everything on the site from site civil, to structural engineering, basically anything outside of the envelope, we can address. That’s important as well because as you look at this product type, you’ll see in this presentation, there’s a lot of coordination that has to happen when you talk about these sites and having that expertise in house just puts you at a greater advantage for developing this parcel, and we can help you along in that process.

In today’s agenda, we’re going to be talking about kind of the process, and challenges that we’ve seen over the last few years in developing this product type, anything from entitlement site planning, we’ll get into a little bit of grading and accessibility challenges. What are the things to think about as we go through water, sanitary, sewer, and then storm water? You’ll see there’s some icons on the screen here. These will pop up throughout the presentation and represent what we think are kind of the most impactful things that you need to think about when addressing the single-family for rent product type. I apologize, you guys can probably hear my Christmas clock in the background going off right now. Just a little hold over from Christmas, a little Christmas cheer.

If you guys are all here today, you’ve heard the buzz lately about the single-family for rent product type. It has just grown in popularity over the last year, and in the few years before that. That’s primarily driven by this market sector that hasn’t been served very well in the market in the past. That includes people coming out of college for the first time that aren’t quite ready to buy a house, but they want to not live in an apartment anymore. They want the same amenities that they would get in an apartment, but they’re not quite ready to step into the purchasing of a house quite yet. They also might be testing out communities as well to see where they want to kind of start building a family.

That next market sector that we’re seeing are that is that young family that are maybe growing out of their apartment. They’ve got maybe one or two kids. They want a little bit more space. They might not be financially ready to purchase a house, but they want that sense of community, the connection to community. They want the good schools that they could get in certain communities. They want to be able to get out and take walks and feel that they’re safe within the community, that kind of thing.

Then the opposite end of that spectrum, we’re seeing the empty-nesters, those folks that no longer want a big maintenance nightmare and a house, or you know, they want to stay connected to the community, but they want to be able to leave and go on vacation or go see their family that lock and leave lifestyle. Fitting into that spectrum as well is the business person that might have a house somewhere else in the country, so they don’t want to purchase, but they’re there more on a long-term lease basis throughout the year. We’ve seen a rise certainly over the last year in the desire to have more of a home as it relates to COVID 19. The impact that it’s had on a socially where we’re seeing more people want to get out of apartments, they want to have space, they want to have the amenities, they want to be able to get out in a backyard and have space to kind of spread out, and that’s really been fueling the flames of this market rise that we’ve seen in the last year, for sure.

Where does single-family for rent fit in? If we’re talking about these kind of different market sectors, this product really helps to, to fill a gap that we currently have. This is really about density in many ways. It also fills that need for the end-user we call this in planning, the missing middle. There’s a lot of this product that’s not out there that could get that missed market and what we see of course on the low end of the spectrum with single-family, you know, your half-acre to four and a half to five units per acre, you get into the duplex townhome range and you can take that up to eight units per acre, you might get into nine depending on your requirements for open space and accessibility and those kinds of things. Then there’s a big gap, and this is that missing middle. There’s a big gap between that and what you’re seeing in a courtyard apartment, which is 20 units per acre, all the way up to 28 units per acre, depending on parking and open space and city requirements and all of that. You can see in the bottom of the screen, how this product can end up being pretty dense, but it’s still a single-family home. We’ve seen different mixed reactions from cities and Joseph’s going to talk a little bit about that, but what this drives home is that this addresses a concern in the community—this product type does. When you’re talking to other single-family owners, those folks that say not in my backyard they don’t want apartments, but because it’s a lower story, it’s only two stories max, it’s not getting up in that three to five story range, they’re much more accepting of this product type and it makes it a little bit easier for cities to be accepting of it. We’re going to talk a little bit on the next slide about entitlements. I’m going to hand it off to Joseph and he’s going to talk a little bit more about that kind of city interaction.

Joseph Hornisher:

Thanks, Emily, for establishing the baseline as far as why it’s needed in the community. Now, what we’re shifting into is how were the cities and the entitlements and how is it accepted? We’re going to talk about entitlements and that’s from a high level, that’s are you allowed to build this proposed use by right, meaning it’s just staff approval or is there going to be some sort of modification to the zoning, which obviously means more risk? And more risk means that from a developer’s perspective, there’s more challenges maybe with investors. With entitlements, similar to multifamily, single-family, all the other uses, you really need to be cognizant of the future land use map, as well as your current zoning.

We are sort of in the middle, which there’s some code or there’s some interpretation of, “well, the future land use map shows that this is supposed to be single-family”, or it put some parameters on it. There is a little bit of gray area that you need to talk to the city about. On this slide, you’ll notice we have the two icons, time and money, I have those as well as code requirements. Entitlements—and this leads into the first question—does the city have experience with single-family for rent? And entitlements, there’s not a definitive end date. There’s a lot of times where you’re working with staff to try to get on the same page, have something that they’re supportive of, but there could be multiple rounds and that timeline can be prolonged especially if the city doesn’t know what this product is. It’s very challenging to say, “just go down the street and you can see our product.” Oftentimes, you’ve got to go to a different state or it’s a new market we’re entering. All that to say at the very beginning, having an understanding of, is this is the city’s first experience with single-family for rent, is very important and that can help set your expectation of, are we writing the code or are we the trailblazers and we’ll get a couple of bumps along the way, but setting expectations early. The second item, once we have an understanding of the city’s familiarity, is, so now what do we do with their code?

At this time, we’re often relying on ordinances, which take a while to for them to be modified, to target this specific category, this gap that Emily has mentioned. What we’re seeing across the nation is really a broad spectrum to how cities are responding. There are some cities where their code may be vague enough where we can just fall under a multi-family zoning without really any variances or deviations needed. You’ve got multi-family entitlement and you just move straight ahead. Whereas other cities, even if it is entitled multi-family, they’re saying, you know what, this is a new special classification. We need you to go to a PD, a plan development. The important thing to pick up here is cities are working on incorporating and updating their ordinances. In the meantime, we’re stuck in this middle where cities across the nation are approaching it and handling it in different ways and just trying to figure it out.

That leads into the third item that I’m sure lots of you all were interested in is: what are the entitlement issues that the entitlement challenges that we’re facing? On the next slide is a little example site plan. Because this is a new product type, there’s going to be small changes, little differences that can become really impactful, especially as this sets the foundation for your project. So what are some of those items that you need to look for?

As most engineers will say, every site, every city is different. You really need to have your team understand the city’s requirements beyond the ground, as well as understanding your product. Once you have that, going through the city code to kind of a line by line and identifying, okay, here’s something that may be in conflict. Let’s talk to the city to see how they want to proceed with this. Some of those items that we commonly see include, what is the base zoning? For example, in the future land use map example, is this single-family, is it multi-family? In all those little codes and items that may be stuck throughout the zoning ordinance, which way is the city going to classify this development as? Oftentimes it probably see it as multifamily, but it’s a question you need to ask.

Another example of where that plays out and where it can be very impactful to the site is your buffer requirements. This is an example where we can see it swing the other way to single-family in that, you know, is this single-family next to single-family? To the end-user, who’s driving by kind of looks that way. Or is it single-family next to multi-family? All of the buffer, the screening requirements, they impact developable land, they impact what you’re doing around the perimeter and costs. Those are just items to specifically pay attention to. Other unique items, are you approaching this as a single lot with several homes and community homes on the site or are you treating this even more like single-family where you’ve several individual lots with private access easements or something like that? That’s a very important thing to establish and discuss early with cities. In my experience, I’m not seeing a lot of cities taking the multiple lot approach, but I know that developers are asking for that.

Open space, you can see that with open space, traditionally you’ve got these big open areas, whereas in single-family for rent, the areas are much smaller, you know, five feet here, 10 feet there. Some cities have requirements on, we’re not allowing you to count backyards to meet open-space requirements, or unless it’s a certain size, we’re not going to allow you to count that. And so these are little details that really can become impactful if you find out about them two to three months into the design process.

Last couple items I’ll hit on: building separation is a key driver in the density that you can get. It is connected to some other factors as Lori will mention. As well as things like building variation. Some cities are starting to apply sort of a single-family perspective of making sure that you have variation in your units so that it just isn’t the same building over and over. And even more so, we’re seeing some cities even add requirements that that they can’t be in a straight row, that you’ve, you’ve got to mix it up a little bit. What I’ll leave you with on the zoning and entitlements discussion is I would recommend just making sure that you and your team pair up with a local resource that can review your product type as well as they’re familiar with the city requirements, so they can see where those two items may be in conflict so that we can establish what the course of action is moving forward. As we continue to get into more detail, I’m going to pass it back to Emily so that she can start talking about some of the other site items you should consider.

Emily:

Yeah, thanks, Joseph. One of the things you just brought up is real important for everyone to note is that when you’re dealing with one of these projects and dealing with the local hyper-local market it’s important to have a friend on the ground, if you would. Kimley-Horn obviously has folks all over the nation that can help out. One of the key things we bring to the table too, is often we know the characters involved, the city council or the mayor. We know what’s kind of happening politically because we are plugged into those local environments. That’s also helpful as we’re bringing these projects through the entitlement process.

I want to talk a little bit about site planning as we’re going from that 5,000-foot level down. The key thing to remember about site planning is coordination. Joseph talked a lot about different items you’ve got to think about as you’re going through the entitlement process. One of the big things that stands out here in this slide is you can see the density of this product type. Now this product type is one of many that could be developed in the single-family for rent market. This is what we’re calling kind of the, the cottage style home. There’s also kind of a cluster style that Joseph showed in the last slide. We’ve also seen these as townhomes and duplexes and that kind of varies depending on what market you’re in, whether you’re in Florida or Texas or Arizona what that market demand is. So, there are various product types, number one that you need to know about as you’re beginning is that site planning exercise. The other thing you need to think about is just the coordination of all these elements. Even from the process that you go through.

A lot of the times we’ll get involved really early on when a client comes to us and says, “Hey, I’ve got this piece of land. I’m thinking about doing single-family for rent. I’d like to get 12 units per acre on it.” I think that’s something I didn’t mention previously in that missing middle bucket. This, this falls between the nine unit per acre to 12 to 14 units per acre, depending on your site. This is a perfect example. They might come to us and have perfectly rectangular site, no topo issues. There’s no trees. There’s no tree mitigation. There’s no floodplain. The city is on board with it. They understand it. They’re excited about it. They might say, “Hey, I need 12 units on this site.” We can very quickly look at it and do a real quick site plan and confirm that they’re able to get to that density before they even go through the entitlement process.

It’s really important that the design process is a cyclical kind of element. We go through design and we figure out what those parameters are for entitlement that we’re willing to either right into a PD or make variances of their existing code. Then, we go through another iteration to make sure that that’s really where you want to be. Or maybe the product changes or the number changes or something like that. You know, on the other hand, we’ll get a client that comes in the door with a triangular shape site. They’ve got all of these issues. There’s topo, there’s tree mitigation, there’s floodplain, the neighbors are single-family, and they’re not quite sure what this product is, and the city maybe doesn’t quite understand what this product is and there’s challenges with it and they still say, “Hey, I want 12 units per acre.” We can pretty quickly look at that one and say, well, you’re, you might get more in the range of nine units per acre with this and that might be a non-starter for the client. We’re able to, help them out pretty quickly in determining where they can kind of sit with that density to give them a good feeling going forward into the entitlement process.

There are multiple things to think about when you’re talking about site coordination site planning and coordination. You can see it’s a very dense site. There’s things like backyards. Think about topography and backyards. If you’ve got a lot of slope, how are you going to make those great changes work? You’ve got parking. These streets have parking on them on the streets. Are those streets public, or are they private? How does that get drained? Lori’s going to talk a lot about that a little bit later on, but on the next slide, you can see a couple of the examples, these are all kind of choices that the developer makes, and it impacts your density and impacts your basically your profitability at the end. Whether this really looks and feels like a single-family home. Is it more like a town home? Is it more of a cottage style kind of community? Is it a two-story product that might get you more density, but what is the negative out of that? Challenges with parking or challenges with utilities at that point? You know, you can see backyards are a big driver or a big entity for this product type. You can see how small they can end up getting—that picture on the middle right there, how small that backyard is, it’s only 10 feet wide. How do you get utilities in through these corridors? How do you drain that element when you’ve got a solid fence all the way around it? Lori’s is going to talk a lot about garages in a little bit and tell you some of the challenges with them. You’ve got different garage types. Are they attached to the unit? Are they freestanding? Is it really more of a car port situation? And then open space. Many people are coming to the development because they want that desire to have an open space, an amenity like they have at their apartment buildings or something like that. So, what is that market that you’re really reaching out to? Appropriately sizing those open space components and making sure that you’re getting your open space requirement met by the city by those elements. That’s key. I’m going to hand it over to Lori, so she can talk a little bit more about the accessibility and grading issue.

Lori Lusk:

Thanks, Emily. So now that we’ve covered entitlements and site planning, I’m going to get a little bit more technical and touch on some of the design considerations, starting with grading elements that are critical to consider as you start to grade your site. These are the four topics we’re going to cover. It’s ADA and fair housing requirements, garage access, retaining walls, and just a couple of other grading challenges that you need to be aware of and thinking through as you go through the process. First, ADA standards, it’s important that you know how they relate to your site and knowing do they apply into what portions and one key in determining this is whether your site is privately funded or publicly funded, and whether you’re gated or not gated. Every state has different accessibility requirements that are going to impact how you’re required to comply with these rules and regulations.

On the next slide, you’ll see an example. This is from Texas code, but the state has certain exemptions to ADA rules and regulations for site improvements. This rule is Architectural Barriers Administrative Rule 68.30. It has a residential exemption that states those portions of publicly or privately funded apartments, condos, townhomes, and single-family dwellings used exclusively by residents and their guests. So it’s been my experience that in the state of Texas, if you are privately funded and you’re gated the only portion of your site that is required to meet ADA requirements as far as accessibility on the site, improvements goes, are those where the general public can access. That would be something like your leasing center, probably your amenity center, because there would be guests there. And then anything outside the gates or in public rights of way. Given that every location is a little bit different I would encourage each of you to reach out to registered accessibility specialist in your region, that your site-specific different requirements for the buildings to make sure that they’ll comply with all applicable ADA and fair housing objectives.

On the next slide, we’re going to talk a little bit about garage access. This is going to be particularly true for garages that directly abut the fire lane, but it’s looking at your grading in detail and knowing if your residents are going to be able to access their garage without bottoming out. When you grade the site, particularly on sites of significant topo, you need to really consider the slope of the fire lanes and consider the access into the garage bays. Depending on your ability to break the foundations in between each bay and how many bays your garage building have, this might slightly restrict the maximum slope that you can have on your fire lanes.

The perfect example of this is a project that I just completed work on. We had a significant amount of topo across the site and when we did our initial grading plan, our fire lane was approaching 5% in one area just in order to minimize the height of a perimeter retaining wall. What we didn’t think about is that while we were doing the grading we needed to think about the finished floors at the garage and how they’re going to be set. What we found is that that 5% slope that we used caused too much of a grade change across our four bay garage building for the downstream garage bay to be accessed without a car bottoming out or even a car accessing at all. That left us with two options. The first being to place foundation breaks in between every single garage bay or the second being regrade the site and potentially relocate some of the garage buildings so that they’re on fire lanes with a flatter slope. In our particular situation, we ended up doing the latter of those two and we regraded our site so that our fire lanes abutting the garages were no steeper than 2%. If we had to have a fire lane that was a little bit steeper, we moved garages off of that fire lane. It just didn’t make financial sense for our client to place breaks in between each of the garage foundations for each building. These same considerations would also apply if you’ve got a larger block of buildings, kind of like a townhome setup that directly abut the fire lane.

The next thing we’re going to talk about is retaining wall placements. It’s really critical to think about where you’re placing retaining walls and be mindful of what’s happening under the surface. Really think through whether there’s water, sewer, landscaping, landscape drains, franchise facilities, those types of things, running in the area. And really think through the ability to maintain those facilities after the wall is constructed nearby.

It’s also important to consider the placement of your condenser pads, private yard, fences, or other external building obstructions that’ll be on the ground to make sure that there’s enough room for them and to maintain the area around them with a wall nearby. A specific example of this is shown on your screen. This is from a project we are working on. When we started the grading design, our client and the architectural team hadn’t quite finished their architectural plans or their MEP plans and we had some uncertainty about what units would have private yards, whether it was only a few, whether it was all of them, whether we weren’t doing them at all. We wanted to keep pressing forward to our city submittal. So we went ahead and continued grading the site based on our approved zoning site plan and the grading criteria we knew from the developer. What we learned is that after completion, the architectural and the MEP plans were completed, and we learned that the buildings had gotten slightly larger by a foot or two.

The condensers were located on the ground instead of on the roof of the building. And we learned a couple of other things, but based on this information that we learned our site plan actually, and our grading plan actually no longer worked and our site plan would no longer comply with our approved zoning site plan. We had to move several buildings further apart to accommodate the yards. To accommodate the condenser pads and we also had to move out the retaining walls just due to space constraints and ease of future maintenance. We also, and this is kind of a larger impact, ended up having to swap out a couple of building types for smaller units just due to constraints now with the retaining walls and all these other obstructions. Having to swap out the units for smaller ones that has an overall impact on the project financials for the client.

I say all of this to remind you how impactful such seemingly minor details can be on such a dense site and while they’re easily addressed and solved, they impact the overall project timeline and project financials. I would encourage you early on in the process while you’re doing your site plan to try to nail down where some of these obstructions will be. Know most of the constraints and really think through where you might need walls so that you can leave adequate room and save yourself the headaches of moving buildings around later during the design process.

The final thing I wanted to talk about, and we’ll get into it a little bit more later in the presentation, but it’s thinking through how your water is going to get through the sites to the stormwater facilities. Think through where the obstructions are that the water has to get through, you know, through the buildings, the private yards, your landscaping. Generally these sites are dense and there’s limited space between each unit. That means limited sunlight can reach the soil and dry up any moisture. In order to minimize the potential for standing water or soggy grass and landscaping, make sure you provide a path with adequate slope away from the buildings and out to the fire lane or storm drain as efficiently as possible.

Later in the presentation, I’ll give a fairly detailed talk into stormwater, and I’ll talk about one other consideration during that part of the presentation. But these considerations are critical to consider when designing your site in order to minimize costs, ease, future maintenance, and to ensure that your site drains well, making it a better community for your end user. With that, I’m going to turn it back over to Joseph, so he can talk about water and sewer design considerations.

Joseph:

Thanks, Lori. What we’re going to talk about now, and this was actually one of the questions that has already popped up is water and sanitary sewer and the costs associated with them. What are some things that developers should start considering whenever they’re trying to produce their pro formas? With traditional garden-style developments, water and sanitary sewer are what they are, you just fit them on the site, and they have an impact, but let me just kind of roll them in. With single-family for rent, what we’re seeing is that it’s actually much more impactful. It can also impact your density from one perspective and number two, it can impact your construction costs.

We’re going to look at those two items in kind of three stages, the impact fees that are associated with your, we’ll say your upfront fees during permitting. Then the second item would be your infrastructure costs or your construction costs. The third is the long-term maintenance costs based on some of the decisions that are made at this point. One of the caveats that I’ll immediately start with is cities are used to you know, certain procedures and going about having their infrastructure in a certain way. While some cities may be open to alternate approaches, some of the approaches we’re going to talk about, some cities will say, I definitely want you to go what we’ll call the master meter route and ee’ll discuss later. While another city will say “absolutely not, that’s not even allowed.” There’s this ongoing kind of back and forth between cities and the problem is the developer’s in the middle and it impacts layout and it impacts costs. Understanding city expectations and how to build those in early is what we’re going to talk through.

On the next slide, we’re just going to walk through a quick example, because I think pictures explain this best. We have a potential site plan. We’re just looking at the green area on the left for now. I’ve talked to my colleagues out in the east and this even happens in a couple of the DFW metroplexes, which is master metering. That’s where you have one large one or two large meters at the property line and then everything internal to the site is private. With this, the other caveat I’m putting is some cities even have your private fire hydrants running off of this line. What that can do is your master meter size can increase, which is directly tied to your impact fees and those fees can quickly grow. One of the services that Kimley-Horn can provide is we can do some flow modeling and just model, you know, what are the head losses along the site? What is the meter size that is required in order to hopefully bring that size down and be more accurate. The advantages of the master meter is that the infrastructure is all private, so on a dense site, you’ve got a little more flexibility in what you can do and where you can place it because it’s not a public line that the city has to maintain. The con is it’s your line, you’ve got to maintain it. It’s sort of making sure that when there’s a water leak or when there’s an issue, it’s a private line that you are prepared to maintain it.

The next slide shows a very similar with a small difference and this is where we’ve found that some cities want you to master meter. Again, just the meter is at the property line but because they have concerns with servicing fire hydrants and providing fire service, they actually want you to run a dual loop next to the private system that is just providing service to all the fire hydrants. Now, this is impactful. While your meter size may be reduced, what happens instead is when now you’ve got all this double infrastructure and some of this infrastructure is public, meaning it takes up more space. Space is a premium, if you haven’t caught onto that yet.

The third option, on the next slide that we have is what we’ll call cluster meters or individual meters for each unit. I know that one city, for example, says based on our interpretation of the code sub-metering is not allowed in for this unit type. We want individual meters for each unit. Other cities are saying we could have one meter serve up to 10 units or whatever the calculations and whatever makes sense. But, there is a little bit of engineering that we can provide where we work with the MEP inside the building and the flows to determine, looking at the impact fees, looking at what the city will allow, I think it makes the most sense for the site layout to have a cluster meter layout where you’re going with a two-inch meter that serving X number of homes. That’s all sort of an analysis that can be completed to try and figure out what the best path forward to minimize those impacts fees. In this scenario, you’ve got more public infrastructure, but the main running through the site, connecting all of the meters, all the blue dots would be public, but then still all the laterals running to each building are private. So another long-term costs that may pop up is, well, now, if you’ve got 10, 15, 20, 30 meters onsite you know, the city has minimum usage charges. If each of those meters aren’t pulling enough demand, well, now you’ve got all of these city fees that are incurred just maybe small, but when you have lots of these meters, they can potentially add up.

The last thing that we’ll talk about is we’ll take a look at a sanitary sewer layout to express this point, and that has to do with whose code are we reviewing and what design standards are we building this to? Traditionally, as an engineer, I’m following the engineering manual, public works and their manuals for the infrastructure throughout the site. There’s a handoff as we get to the building of, okay, now that we’re within five feet the, the MEP takes over and they’re building per building code and plumbing, international plumbing code and that’s part of the building inspection. What we’re finding on this product is that handoff, that line is moving closer to what we’ll call the main street in the middle of the road and that’s causing some confusion. There are some benefits in that the plumbing code is a little more nimble in that it can snake in between all of these units. The challenge becomes, and, you know, they’ve got different design requirements, different material requirements, and a different code. There are similarities, but there are definitely differences. What we’re finding is you know, sometimes those conversations where we’re trying to identify what code are we following happens pretty early in the process. By the time it makes it out into the field, the constructor or the inspector who’s been doing this for 10, 15 years is like, “wait, that’s not how we do this.” That’s not what I’ve typically done and that can cause some confusion and potential delays.

I think it’s pretty important that throughout the process, continuing to follow up with the city and making sure that we’re all on the same page as this is a new product type and as it’s a little bit non-standard from what maybe the inspectors are, what different levels of the staff may be used to, we’re all on the same page, because what we’re trying to avoid is the potential construction, the delay that occurs during construction, when it is it is even more impactful and definitely important. With that, I will pass it back to Lori so she can talk through stormwater.

Lori:

Thanks, Joseph. We’re going to hit on four key items related to storm water. The first one is runoff rates. What we’re finding is that depending on your site configuration the single-family for rent sites, they trend towards a lower runoff coefficient than a traditional multi-family or commercial use, but they’re slightly higher because they’re more dense than a standard single-family use. This means that your storm water facilities will likely be somewhere in between the single-family and the multifamily requirements. These lower runoff rates means that the, the stormwater facilities will be smaller and less land will be taken up for your stormwater detention and water quality ponds, which results in lower costs for you and more developable land to maximize the number of units on your project. This is why we think it’s critical that you really consider these coefficients early on when you’re designing your stormwater system to make sure that you’re using appropriate storm water coefficients.

The next thing is how is your stormwater system going to be classified. Is it going to be classified as a public system or a private system? Very similar to what Joseph mentioned on the water and sewer slide. This is going to be generally determined by the municipality. They’re going to tell you whether your systems public or private. If the city is going to consider your system private, there might be in some cases, not in all, but there might be an opportunity to utilize some kind of non-standard materials maybe to utilize HDPE or another kind of non-standard material that’s suited for this application in lieu of your standard RCP. Knowing how your systems class lead early on might help you identify some cost savings.

It’s also important to know whether you’re public or private, so that you can better determine the configuration of your stormwater system and know if the municipality is going to allow you to use a valley section with grate inlets versus a more standard street section with curb inlets. It’s been my experience that if you’re private, you generally have more flexibility in how you configure your stormwater system. You might have the ability to utilize the valley section with grate inlets versus the standard street section with curb inlets, or even a valley section, and then warping the pavement to get the drainage to a curb and lit, or even using a straight cross slope section with curb inlets.

It’s been my experience here in the DFW metroplex, that there are a couple of municipalities that they, whether you’re public or private, they won’t allow you to use grate inlets. If you’re working in a municipality and that’s the case, you really need to give thought on how you’re grading your fire line or fire lane how you’re grading your parking lot and where you’re going to strategically locate these curb limits so that you can keep water out of your garages.

Really thinking through these different elements early on will help you configure your storm drain and asking these key questions to the municipality early on is key. Just again, so you can plan in your site from the beginning, save yourself some headaches as you get into detailed design and later down the road.

The last element I would really encourage you to consider using landscape drains. It just helps move the water away from the buildings more efficiently, minimizing the potential for standing water around the units. Cause as we mentioned, the sites are very dense. There is limited amounts of sunlight that can reach the ground and help you dry out all the standing water and run off. Depending on the amount of rain that your area receives, like say if you’re in Florida, for example, it might even be worth taking this one step further and tying your downspouts directly into the landscape drains and then into the storm sewer system. Again, that’s just that much less runoff that hits the ground and it has to find its way to the nearest drain and enter your storm water system. While it adds cost to your development. It could lead to a better quality community for your end user. I’m going to turn it over to Emily and she’s going to wrap up the presentation.

Emily:

Great. Thank you guys. Just a point to note also on those landscape drains, one of the things we’ve kind of talked about over the last few weeks is the turf areas between the buildings and how tight these areas can become, especially on the North side of the building and whether we should be doing some sun studies, some sudden shade studies that can be more impactful from a landscape standpoint and that’s certainly something that Kimley-Horn can help with in that process as well, so that the development withstands the elements, if you would. That’s definitely a concern I could see in Texas and in Florida, if you’ve got graphs in a spot that is really not getting a whole lot of sun really anywhere, then you really have some challenges. You might need to replace that with a different material.

In summary, we talked about different elements that impact the development of these types of products in the marketplace from entitlements, things like density and the timing that it takes to get through entitlements is of course, you know time equals money, and then how does that relate back to code? A good question I think we had is, “do we have any examples of municipalities that have kind of started to write this into their codes?” That’s something that we can maybe chat a little bit more. I have not seen any specific ones in the area that I work in. I know that cities that are forward-thinking are starting to think about it in their comp plans and they’re starting to address their land use maps related to single-family residential. But I haven’t seen any cities actually rewrite their code to include a single-family for rent product type yet. I don’t know if Joseph or Lori has seen that to date in any of the projects they’ve worked on.

Joseph:

What I would maybe add, is it starting to pop up in maybe some draft ordinances. Part of the Addison ordinance and they’re building in these new clauses. I don’t think cities have actually adopted it. There might be you know, in places like Austin, where it sort of fits into an existing zoning that’s a little vague, so Celina and Addison, I think are a couple of examples that are working on it on a specific product like this.

Emily:

Celina was the one I was thinking of, they’re incorporating it into their comp plan. I should mention too, that these are Texas examples were the three of us on this call are primarily in the Texas market. But we have folks nationwide that are working on this product from Florida to Arizona to California, across the state.

I just want to summarize a little bit more by talking about entitlements. This is a perfect example of know the rules or change them. What does it take to change them and is that something you’re willing to spend the time and effort and money to do? Does that get you the end result that you’re looking for?

Site planning success is always planned. Key to this is coordination. You saw the amount of detail that needs to be thought about, even at the site planning, you need to have a consultant that is aware of all of these issues that could pop up when they’re in that site planning stage and see what’s the best and highest use for or lay out for the property that gets you to your end results. Grading and accessibility, this is one you want to stay inside the box for, so know your constraints and design to them. This is a coordination and a code issue as well. Water and sanitary sewer, details matter of course, you know, where are you going to lay that line? How that affects the bottom line that Joseph talked about, this is getting into infrastructure.

Time and money; you don’t want to waste a whole bunch of time doing one design when in the end result, you’ve got to do something else. Stormwater basics: don’t flood your building. We want to make sure that we keep these buildings high and dry, and of course that’s also related to time and money and and code.

Really the big thing that stands out in my mind across all of these is coordination. If I had one of these to pick, I would say coordination is key. You got to start that early on when you’re first starting this single-family for rent product and all of that coordination is going to in the end, help save some time and money on your part on the back end.

As I said, we’ve got partners across the nation. We have a hundred offices nationwide. When you sign up for the webinar, you’ll get a link after this to that email that you put in that will take you to the website that shows a map and link to partners in your specific area. If you’re an Arizona looking for a single-family for rent partner, you can be able to track those folks down and have direct contact with them. It’ll also have a link to this webinar and some more information related to the single-family for rent product type.

And so that I think concludes our presentation. Thank you for joining us. We had a few more questions pop up during the presentation that we can field now and then if you guys have anything else that you’d like for us to address in this presentation, feel free to jump into the Q and A.

Joseph, I think you answered the infrastructure cost one pretty well. That fluctuates obviously, depending on what kind of infrastructure you’re going to have to be implementing.

What obstacles do you see for developers who want the flexibility to plat individual lots for the option to sell homes in the future?

I think from a planning standpoint point from a site planning standpoint, some of the challenges with that are related to what the city’s going to expect from a basically a single-family development. This is basically going to turn into a single-family development in the future. Some of the benefits that you would get from doing a single-family for rent product, from the standpoint of are you able to do the private drives? Are you able to change the way that the current city codes are for engineering standards for roadways so that you can capture stormwater differently? Are you able to front the lots differently? Those kinds of things are real important to keep in mind when you’re going to sell the product later and when it becomes more of what the city might refer to as just a standard single-family development. I think they’re going to be really more stringent with their current code as opposed to being flexible with the for-rent product. What do you guys think? Any other thoughts on that Joseph or Lori?

Joseph:

I’ve seen cities hesitant to look at single-family for rent on a lot by lot basis that could eventually be sold off and still view it as multifamily. I think they begin to apply more single-family requirements. Which means bigger lot sizes, public rooms or treating it maybe a little more like townhomes as well.

Emily:

I think we have time for one more question, Joseph, is there a new one that pops out in your mind that might be good to answer in this forum? I will say that if we don’t get to your question we do have note of who is asking the question so we can field that question in an email at a later date feel free to reach out to either us or one of our partners across the nation can help you as well.

Joseph:

Kaliah Jones asked about the presence of an HOA with this type of development.

If you go with the single-family approach where you’re trying to do individual lots, I believe that there is probably more of an HOA role in trying to make sure that the group stays together and that it functions as one property. But if you instead are treating this as a multifamily development, then it’s more of a property manager. At that point that’s maybe something single-family users may not be as familiar with is just making sure that you have a property manager to collect rent and sign people up complete leases, service the amenities. That’s probably someone on the multifamily side has a leg up or an advantage on just because they’re maybe used to the long-term hold and the challenges that come with that as opposed to a single cell.

Emily:

I think there was a question about amenities and how are these amenities different from multi-family or master-planned communities?

That’s a pretty easy one I think we could capture before we have to end here. It depends on the type. If you’re looking at the cottage type, the community that we showed in this presentation, the amenities are very similar to a multifamily. You’re seeing usually a pool structure. There might be a dog yard or a pooch park or something like that incorporated. There’s the benefit to these is different from multi-family is that most of the time every unit has a yard space and so there may be less kind of open space that than what you would see in a multifamily development, because there are those backyard spaces. There’s generally one larger amenity that usually has a pool and maybe some small play equipment. Again, that depends on the product type. The townhome and duplex might have less of an amenity associated with them because their yards may be a little bit larger. It just kind of depends on the product type that’s being developed.

I think that we’re getting pretty close to four o’clock now, so we’re going to wrap up the presentation. I appreciate everybody logging in and signing up for the webinar. This is truly been a great experience for all of us. We hope that you’ve gained a little bit of knowledge and are maybe a little bit more interested in the single-family for rent product. Again, if you’ve got any, or if we weren’t able to answer your question that you already had, or you have a question about a specific project feel free to reach out to us. We’re happy to help in whatever way we can.