Why Cities Want Density

The Real Estate Espresso Podcast

On today’s show we are exploring why so many cities have recently embraced the notion of intensification.

Through the last several decades cities have continued their relentless sprawl out into the suburbs. You have some extremely low density cities that have no natural boundaries and continue to sprawl. Dallas may only stop gobbling up land when it reaches the Oklahoma border. Phoenix may eventually become one with Flagstaff. You can literally drive for hours in Phoenix and the surrounding suburbs and I swear you would think that you have seen this street before. The houses look the same and the strip malls look the same, but you have not made a single turn.

Let’s look at the budget for development of single family homes. We’re going to zero in on the infrastructure for services for a single family home.

These days the cost of building a fully serviced road with 7 utilities is averaging about $1200 per linear foot of road.

If you have to install deep utilities for storm water management or if you have to blast through bedrock, or maybe you need a sewer lift station then those costs can multiply.

If you compare the cost of servicing 200 homes In a subdivision with a 200 unit high rise apartment building, the apartment building is going to cost a lot less in the short term and in the long term.

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