FAR Madness
Do We Really Need This?
At the risk of angering FAR supporters and boring the rest of you with yet another horror story of that regulation’s oppressive effect, here’s an example of what we have done to ourselves. There is a ranch house in central Greenwich which is built into a hillside. One floor peeks above the hill while the walk-out basement serves a very nice terrace and pool. As of January, that basement is considered a full floor. Because the R-1 zone prohibits more than 2 1/2 stories, the house can no longer be turned into a real two story building. Fair enough, I suppose, except that the other houses on the street have been, or are being converted into $4.5 million homes. Every other lot on the street is worth at least $1.5 million just in land value. Not this one. I won’t estimate its eventual sales price but I guarantee that it will be below its present asking price of $1,495 because there is nothing one can do to it—it is, and will remain, a simple ranch, flanked on both sides by huge homes. If the goal of FAR is to achieve homogeneous streetscapes, what are we to make of this situation, where the street in question will soon be made up of a dozen large mansions with one lonely little ranch stuck in the middle? It’s easy to see whose property value has been destroyed; it’s harder to determine who is served by this inflexible new law.
There are many such examples cropping up as the new FAR takes effect. Most homeowners aren’t aware of what has been passed, but when they go to add a small addition and discover that they have to pay $10,000 in professional fees for grade surveys, interior square foot measurements and the like before shovel bites dirt, or when they learn that their house will sell for $500,000 less than their neighbor’s, they (that’s you and me) will be bitterly disappointed. The RTM has tried to rein in the P&Z on this issue, so far without success. Jefferson said of bureaucrats, “few die and none retire”. Perhaps that should change.
The Case of the Disappearing Home
Despite my occasional rants about over-priced houses, one particular slice of the market has absorbed almost everything thrown into it—that’s the $1.4 to $1.8 range. In just the past few days, 174 Cat Rock Road ($1,575) went immediately (via multiple bids), as did Doug Lederman’s (New England Land Co.) listing at 22 Indian Mill ($1, 685 – purchased in July 2002 for $1,450), 39 Indian Mill Road ($1,640), 15 Shore Acre Road ($1,595), 332 Stanwich ($1,495), 293 Stanwich Road ($1,595), 23 Frontier Road ($1,875) and on and on. A few houses remain in that price range but they’ll either be gone by the time you read this or they are still over-priced because of their location or other problems. One bit of brand new construction seems to have been designed by an architect who obtained his degree from the back of a matchbook; a steel fire door leads from the master bedroom to the garage, for instance; I don’t think they teach that design trick at Yale.
Two points: first, for buyers in this range, the market is moving away from you. Prices are going up, not down. Second, because of the shortage of decent houses in this price range, a modest profit can be made by picking up (the right) house at, say, $975,000, putting $300,000 into renovations and placing it back on the market at $1,550,000. While you may not want to boast at your next cocktail party about only earning a few hundred thousand dollars, the return will look and sound a lot better if you also own the NASDAQ at 5,000.
Man Bites Dog
I see that an oriental rug company on the Post Road is conducting a grand opening sale. How long before order is restored to the universe and it holds its first going out of business sale?
Shameless Plug
Just across the street from that amazing sight, East Putnam Variety has a fresh supply of my book, “The New Millionaire’s Handbook”. The store is located in the same shopping complex that houses Starbucks and Whole Foods and it’s where I conducted most of my research for the book. The sight of spandex-encased young mommies dueling for the handicapped parking space in their SUVs is awesome. If you haven’t already enjoyed the phenomenon, go see for yourself.
At the risk of angering FAR supporters and boring the rest of you with yet another horror story of that regulation’s oppressive effect, here’s an example of what we have done to ourselves. There is a ranch house in central Greenwich which is built into a hillside. One floor peeks above the hill while the walk-out basement serves a very nice terrace and pool. As of January, that basement is considered a full floor. Because the R-1 zone prohibits more than 2 1/2 stories, the house can no longer be turned into a real two story building. Fair enough, I suppose, except that the other houses on the street have been, or are being converted into $4.5 million homes. Every other lot on the street is worth at least $1.5 million just in land value. Not this one. I won’t estimate its eventual sales price but I guarantee that it will be below its present asking price of $1,495 because there is nothing one can do to it—it is, and will remain, a simple ranch, flanked on both sides by huge homes. If the goal of FAR is to achieve homogeneous streetscapes, what are we to make of this situation, where the street in question will soon be made up of a dozen large mansions with one lonely little ranch stuck in the middle? It’s easy to see whose property value has been destroyed; it’s harder to determine who is served by this inflexible new law.
There are many such examples cropping up as the new FAR takes effect. Most homeowners aren’t aware of what has been passed, but when they go to add a small addition and discover that they have to pay $10,000 in professional fees for grade surveys, interior square foot measurements and the like before shovel bites dirt, or when they learn that their house will sell for $500,000 less than their neighbor’s, they (that’s you and me) will be bitterly disappointed. The RTM has tried to rein in the P&Z on this issue, so far without success. Jefferson said of bureaucrats, “few die and none retire”. Perhaps that should change.
The Case of the Disappearing Home
Despite my occasional rants about over-priced houses, one particular slice of the market has absorbed almost everything thrown into it—that’s the $1.4 to $1.8 range. In just the past few days, 174 Cat Rock Road ($1,575) went immediately (via multiple bids), as did Doug Lederman’s (New England Land Co.) listing at 22 Indian Mill ($1, 685 – purchased in July 2002 for $1,450), 39 Indian Mill Road ($1,640), 15 Shore Acre Road ($1,595), 332 Stanwich ($1,495), 293 Stanwich Road ($1,595), 23 Frontier Road ($1,875) and on and on. A few houses remain in that price range but they’ll either be gone by the time you read this or they are still over-priced because of their location or other problems. One bit of brand new construction seems to have been designed by an architect who obtained his degree from the back of a matchbook; a steel fire door leads from the master bedroom to the garage, for instance; I don’t think they teach that design trick at Yale.
Two points: first, for buyers in this range, the market is moving away from you. Prices are going up, not down. Second, because of the shortage of decent houses in this price range, a modest profit can be made by picking up (the right) house at, say, $975,000, putting $300,000 into renovations and placing it back on the market at $1,550,000. While you may not want to boast at your next cocktail party about only earning a few hundred thousand dollars, the return will look and sound a lot better if you also own the NASDAQ at 5,000.
Man Bites Dog
I see that an oriental rug company on the Post Road is conducting a grand opening sale. How long before order is restored to the universe and it holds its first going out of business sale?
Shameless Plug
Just across the street from that amazing sight, East Putnam Variety has a fresh supply of my book, “The New Millionaire’s Handbook”. The store is located in the same shopping complex that houses Starbucks and Whole Foods and it’s where I conducted most of my research for the book. The sight of spandex-encased young mommies dueling for the handicapped parking space in their SUVs is awesome. If you haven’t already enjoyed the phenomenon, go see for yourself.
posted by Chris Fountain at 1:16 PM
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