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Continued: Exurbs greet housing rebound with caution

  • Article by: SUSAN FEYDER , Star Tribune
  • Last update: January 12, 2014 - 10:51 PM

Pfeffer and others agree that for now, the relative affordability has made farther-out areas attractive. “If people are looking for a bargain, they’re willing to drive a little further out to get it,” said Mike Devoe, president of Ryland Homes. In the past year, the company has built homes in Otsego, Rogers and Waconia on lots that had gone back to lenders when original developers ran into financial trouble. Devoe figures the Waconia houses sold for about $75,000 less than comparable homes Ryland had built in nearby Chanhassen.

Larger lots a draw

The lower land prices also make it easier for houses to be built on larger lots. Angela Schumann, community development director in Monticello, said some buyers there have combined two-standard sized lots to accommodate large homes.

Narrower lots with smaller front yards have become more popular in closer-in suburbs so builders can keep prices down. In Lakeville, more than one-quarter of the houses built in 2012 and 2013 were on downsized lots.

Ted Pelzer said the ability to get a house on a half-acre lot was another reason he and his wife were drawn to Otsego. Their new house is one of 16 to be built by Rogers-based Christian Builders. Bill Christian, vice president and a partner of the homebuilder, said it’s not unusual for his company to build houses on up to five-acre lots, especially in farther-out communities like Livonia. The small township near Zimmerman saw its housing permits jump from two in 2012 to 22 last year.

City officials say it’s still too early to know whether the increase in homebuilding will spur commercial development. In Otsego, City Administrator Lori Johnson said there are no new commercial buildings in the works, but space in existing ones has started to fill up.

Johnson noted that the value of last year’s home permits topped $43 million and that the contribution to the city’s tax base will likely exceed that after the completed houses are valued for tax purposes. She said the city expects to get back to developing and improving parks near some of the new homes. “It won’t be a quick turnaround, but it will eventually come back.”


Susan Feyder • 952-746-3282

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  • Bill Christian, a partner and vice president of Christian Builders, at his site in Otsego, one area showing growth again.

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