Home lots shrink in the wide, wide West

The Southwestern business center has grown so fast that sometimes it appears that the boom will never stop. Overnight, once-vacant land fills up with new homes to accommodate the flood of new residents.

But here, as everywhere else in the country, home prices are soaring. Thus, major Dallas builders are shrinking their product to insure that single-family homes will remain affordable to more and more people.

Today, homes are going up on far smaller lots than a few years ago. Some builders are reducing the size of the houses they build as well. Moreover, the two-story house is having a resurgence as some developers build upward to make new homes fit on less land.

The houses are beginning to suggest the American past when cities were built on a snug, if not congested, scale. The new houses hardly suggest the kind of limitless land for building that has been associated with the Southwest.

Economic facts of life have simply altered the Dallas version of the American housing dream. One example makes it graphically clear what has happened. When Ron Morris, a land planner, joined Fox and Jacobs three years ago, the big home builders sold its least- costly house for just under $23,000. Today, its cheapest house is priced at $42,000.

Fox and Jacobs, a major factor in the Houston, Dallas, and Fort Worth housing markets, has responded to rising costs by looking to smaller lots. And the trend is by no means limited to Dallas.

"It's a nationwide thing," says Mr. Morris. "In fact, we are a trend follower, not a trend setter."

The push toward smaller lots has been prompted by the soaring cost of land and the skyrocketing cost of developing it. Since development costs include such items as streets, these costs can be cut by reducing the length of the property that borders the street.

Phil Clegg of Dalcon Systems, a Dallas developer, cites one illustration of how the total development bill can be shrunk by slicing the size of a lot.These costs run up to $12,000 or more for a house on a 65-by-120-foot lot when land-development costs are included. On a 40- by-100-foot lot the costs drop by half to around $6,000. In special cases developers have built detached units on lots even shorter or more narrow.

Mr. Clegg tells of one lot which is only 32 1/2 feet long. Fox and Jacobs now is building houses on 40-by-80-foot lots near the downtown area of Dallas.

Right now such developments are just a fraction of the total housing market, to be sure -- no more than 5 to 6 percent by one estimate. But they are a growing part of the total housing picture.

Perhaps surprisingly, they are winning buyer acceptance. "What we find is that there is an increasing acceptance of the smaller- size lot," says Ron Witten, president of M-PF, a Dallas-based firm that does market research in real estate. Mr. Witten adds that such acceptance is not necessarily extended to smaller homes as well.

The reasons for buyer approval of the limited-size lots, he reports, are not only the savings but the fact that people don't want the responsibility for too much outside maintenance. A smaller-size yard clearly means less grass to cut.

Such acceptance, however, doesn't always extend to the public officials who are forced to change the building standards of their communities in order to allow for the scaled-down developments.

Fox and Jacobs, for instance, wants to build on smaller lots to keep homes affordable, but in a number of cases the home builder has run into opposition from governing bodies in the communities. In Mesquite, a suburb of around 71, 000, the firm gained approval in one instance but was turned down in another.

In one north Dallas suburb, the minimum width of a lot was recently increased from 55 to 65 feet. Fox and Jacob's Mr. Morris says the reasons cited for official opposition to reduced-size developments include the wish to attract more higher-priced housing for high- salaried executives. The officials also contend that the lesser-size houses won't pay in taxes for the services they need.

Mr. Morris says he doesn't agree with those arguments. "I believe it's a matter of ignorance," he asserts. "What the officials don't see is, if they put in the minimums [requirements], they are pricing their children out of the market."