Real Estate News

Urban living in a suburb? Developers say that’s the latest trend in Folsom and Davis

Townhomes such as these Heirloom units at The Cannery in Davis have proven popular with suburban buyers recently.
Townhomes such as these Heirloom units at The Cannery in Davis have proven popular with suburban buyers recently. The Sacramento Bee

In place of big houses and sprawling lawns, some buyers in the Sacramento suburbs are opting for townhomes or densely packed houses on tiny lots.

Think of it as city living but closer to Costco.

“In a sense, it’s been turned upside down,” said Greg Paquin, a consultant to the new home industry. “Even though it’s urban living in a suburban location, it’s still suburban.”

New or planned subdivisions in Davis and Folsom have attached homes or closely built houses in areas where larger single-family homes with bigger yards have long been the norm. The newer units look a lot like the modern townhouses springing up in downtown and midtown Sacramento, but they’re a half-hour drive from the central city.

Paquin and other experts say such homes attract many aging baby boomers who are downsizing and millennials buying their first homes. Both generations want suburban amenities such as plentiful shopping and restaurants and, in the case of younger buyers, good schools. Yet they’re willing to forgo the large lots and houses that drew people to the suburbs for decades and justified freeway commutes.

In a report prepared for the Urban Land Institute, John Burns Real Estate Consulting said, “A new supply of smaller homes with little or no yards in high-population areas will meet the demand to commute less and live closer to restaurants and entertainment.”

The company, which provides research and advice nationwide, trademarked the term “surban” for “these developments bringing the best of urban living to a more affordable suburban environment.”

Significant financial and development changes have helped drive the move away from larger single-family homes on larger lots.

Affordability is a major factor. Attached homes or detached houses built eight to 12 per acre can be more reasonably priced than larger homes. Escalating construction costs and rising real estate values have driven up the price of new stand-alone houses beyond many family budgets. Townhouses cost less.

Another reason is that suburbs are becoming more walkable.

Cities such as Folsom and Davis have trail systems connecting neighborhoods with shopping and restaurants. Developers are putting new subdivisions near grocery stores and movie theaters, making residents less vehicle dependent and creating more of a sense of community.

“Having a big house far away doesn’t mean much now compared to meeting friends at a restaurant or coffee shop or park,” said Kevin Carson, president of the New Home Co. in Northern California.

New Home was an early contributor to the suburban-urban trend in the Sacramento region. The company formed during last decade’s recession and concentrated on doing things differently.

Among its first successes was The Trails at Folsom, a cluster of smaller, low-maintenance single-family homes in an area of Folsom dominated by larger houses.

The Trails revolves around a community park and playground and sits across the street from a shopping center with a Raley’s supermarket, restaurants and stores. Folsom’s extensive network of paved trails is a short stroll away.

In 2012, The Trails quickly became the region’s fastest selling new-home community, with buyers praising its lock-it-and-leave-it sensibility. Prices then were in the $300,000s.

Since then, the New Home Co. has emulated its own success with projects that emphasize walkability, community amenities and a mix of homes that include attached townhouses and detached units with lots that are minimal or nonexistent.

New Home’s project in Davis, called The Cannery, sold all of its 72 “Beech” houses arranged around courtyards with zero-lot lines. Its 72 “Heirloom” townhomes also sold out this fall. The attached houses range from roughly 1,400 to 2,000 square feet and were priced in the $400,000s and $500,000s, which wasn’t especially expensive for the pricey college town.

Larger single-family homes with higher price tags have been slower to sell.

Townhome buyers Laura and Cyril Juanitas, both in their 50s, raised four children in a larger single-family home in Davis before moving to The Cannery once their kids were grown.

“We were left with a larger single family residence and were only using 50 percent of it,” Cyril Juanitas said. “We thought, ‘What’s our next move?’ 

They decided to buy one of The Cannery’s Heirloom townhomes in part to get rid of yard work and in part to “try to alleviate our footprint” in terms of energy usage and the space they take up, Cyril Juanitas said.

Their home is less than a 10 minute bike ride from downtown Davis with its movie theaters, coffee shops and restaurants, and The Cannery itself will feature some restaurants and services as part of the mix once it’s fully built-out.

The Cannery was built on the site of a former tomato processing plant in the Davis city limits. The 15-acre “clean slate” allowed New Home put up a mix of apartments, townhomes and single-family houses with shopping and services, all connected by bike paths, Carson said.

More recently, New Home applied to the city of Folsom to change its plans to build 265 single-family houses in the Russell Ranch area south of Highway 50. Instead, the builder wants to construct 118 townhouses and a 205-unit gated community for older adults.

The proposed projects are aimed squarely at the largest home-buying populations: people in their 20s and 30s buying first homes and older couples buying retirement houses.

“It’s what we’ve termed the first-time-last-time phenomena,” said Paquin.

A number of other developers in the area are also planning denser housing in the suburbs, with more to come, he said. “I think it’s a coming thing you’re going to see in a greater degree over the next five to 10 years.”

The Sacramento Area Council of Governments, the region’s transportation planning authority, has been promoting denser mixed-use developments for years via its Sacramento Region Blueprint, largely in an effort to reduce suburban sprawl.

SACOG’s chief executive officer, James Corless, said the similar desires of the millennial and baby boom generations are helping to finally make such plans a reality.

“These two trends are conspiring together,” Corless said. “We want to take full advantage of it in the Sacramento region. That’s why we think it’s exciting to see the products on the ground.”

Hudson Sangree: 916-321-1191, @hudson_sangree

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