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Houston Master-Planned Communities Must Offer Everything Plus Truffle Fries To Attract Residents

Trends and people are changing, so the master-planned communities they will live in need to change, too.

That can be as simple as recognizing a sport gaining popularity and installing pickleball courts. But bottom line, panelists at Bisnow’s Houston Master-Planned Developments & Communities event Feb. 23 said, staying on top of changing desires is the name of the game.

In today's market, that means luxury amenitiesbuild-to-rent homes and access to businesses like coffee shops and grocery stores are all becoming must-haves for successful master-planned communities in the Houston area, even during an economic downturn.

Winstead's Mark Grobmyer, Rooted Development Services' Peter Houghton, JLL's Simmi Jaggi, The Signorelli Co.'s Danny Signorelli, Land Tejas' Uri Man and Toll Brothers' David Assid

“We're all evolving, and we're wanting to put the amenities into the community that people truly want for that lifestyle,” Toll Brothers Division President David Assid said at the event, held at the Westin Houston Memorial City.

That goes beyond meeting basic needs, said Simmi Jaggi, managing director for JLL. People want elevated food — including truffle fries and burgers with avocado mousse, she said, getting a laugh from the crowd.

“I hope that gives you an idea of what a master-planned community demands and honestly deserves,” Jaggi said.

That may seem unnecessary to some, but it wasn’t long ago that Assid said he didn’t even know what a dog park would look like. 

“But you're starting to see things like that become more and more prominent,” Assid said. “Pickleball, in particular.”

The generation that is aging into the single-family home market is accustomed to a certain lifestyle and level of amenities, said Jerrod Lee, Risher Fitness/Lifestyle Management partner and vice president, adding that Class-A fitness centers at universities have set expectations high.

The typical first-time homebuyer is older than in the past, Location Strategy President Scott Davis said, noting that it used to be common to find houses at $150K to $175K. But that category no longer exists, and the $200K to $300K category has been overtaken by build-to-rent houses.

“So that’s pushing these first-time buyers a little bit older than we saw 10 years ago,” Davis said. “And people are moving here from all over the country. We’re hearing, depending on the project, as many as 30% to 50% of the buyers are from out of state, from places like California.”

Centric Infrastructure Group's Kevin McKenna, Location Strategy's Scott Davis, Landmark Properties' Blair Sweeney, Lennar's Michael Reamer, Forestar Group's Justine Klinke, Taylor Morrison's Todd Rasmussen and Risher Fitness/Lifestyle Management's Jerrod Lee

Justine Klinke, Texas vice president and division president for Forestar Group, cited a statistic showing that most consumers are first searching online to find a home. So not only is it important to have those amenities, but they must also be photographed nicely, she said.

“The age group of where the buyers are, perception is reality,” Klinke said. “The Gen Z and the younger end of the millennials, they’re so focused on what does it look like, first. That just gets them in the door. Then obviously, proof’s in the pudding when they go out to see it.”

Master-planned communities offer a quality product, one that  is proven by sales in times of economic distress, Davis said.

“Looking back into the ’90s, typically MPCs in Houston have about a 30% to 35% market share," he said. "When we have a downturn, over the last three downturns, that share of MPCs has gone to 50% of sales."

That is because sales of traditional single-family homes drop, as they are seen as less valuable and less secure investment decisions, he said.

“Not that I think we’re having an extended downturn  I don’t think it’ll be longer than this year  but as you look to plan and position yourselves, that’s an area where it’s shown over time to really be a secure position for a developer and a builder from which to sell,” Davis said. 

While purchasing a house is becoming increasingly difficult due to pricing and interest rates, build-to-rent homes are becoming more popular and accepted within master-planned communities. 

“Up until about four years ago, we were really anti-rental within our projects,” Land Tejas Executive Vice President Uri Man said. “We thought it was a negative for our communities because people don't want to live around renters, in theory.”

But that perception has shifted, he said, and Land Tejas found builders of very high-end build-to-rent homes for specific parcels within its communities. Now, he is a big proponent of BTR being a part of MPCs, Man said.

Some BTR communities offer maintenance on the houses, like yard mowing, making them some of the nicest-looking sections within neighborhoods, Assid said. 

The Signorelli Co.'s Danny Signorelli and Land Tejas' Uri Man

Master-planned communities cater to people in all stages of life, The Signorelli Co. President and CEO Danny Signorelli said, whether or not they’re ready to purchase a home. 

BTR seems to have made itself a permanent part of MPCs for multiple reasons. 

Some people never want to purchase a home, but enjoy the flexibility of having a single-family unit, Landmark Properties Managing Director Blair Sweeney said.

"What I've been surprised by is there are many people who will tell you that they never want to own a home, they don't want to be locked down," he said.

Buy or rent, it still comes down to the fundamentals of people wanting to improve their lives through their dwelling, Lennar Division President Michael Reamer said.

"They're not giving up the truffle fries," he said. "So it's more about what can they afford at the time? What time of life are they at? And on top of that, if they're coming in from out of town, they probably are a little more likely to say 'Let's rent first and figure this out.'"