Thousands of new housing lots are coming online in the Richmond area in October. Johnson Development Corp. broke ground on Veranda, a nearly 600-acre master-planned community adjacent to Long Acres Ranch, on Sept. 29. The development will contain roughly 2,500 homes at build-out. PulteGroup is also  launching an estimated 760 new lots at its Talavera community at FM 723 and Bellaire Boulevard. This is in addition to existing communities that continue to build out vacant lots.

The growth comes despite a 25 percent drop in new home construction across the Greater Houston area, according to real estate research group Metrostudy’s third quarter 2016 survey of the Houston housing market.

“When it comes to Fort Bend County, we’ve got a pretty big bet in that area—we have over 21,000 acres that we own, and we’re going to build over 36,000 homes,” said Doug Goff, Johnson Development Corp.’s chief operating officer.

As one of the largest developers in the U.S., Houston-based Johnson Development has six other master-planned communities in Fort Bend County, and Goff estimates the company is not yet halfway through total build-out in Fort Bend County.

The company also developed Harvest Green, a farm-themed community south of the intersection of Harlem Road and the Grand Parkway. The company said Harvest Green will include 2,600 homes at build-out. The first 233 homes were completed, and another 198 were started so far this year.

The area’s more established communities are also building on their remaining open lots. Long Meadow Farms, for example, is building out the last 275 of its 2,200 lots, according to sales records.

Upstream downturn

The Metrostudy Houston Housing survey released in August said the Greater Houston area is the second-largest housing market in the U.S. when it comes to new home construction, even with a 25 percent drop in overall new home starts.

Richmond was identified in the report, along with Katy and Cypress, as an area with the most potential for demand fluctuation due to the downturn in the energy market.

Christi Borden, a Richmond-area Realtor and member of the board of directors for the Houston Association of Realtors and the Texas Association of Realtors, said one of the reasons there may be demand fluctuation is because the Richmond area is home to many people who relocate to Houston to work in the energy industry.

“Your relocation buyer isn’t making as many purchases right now,” Borden said. “There’s not typically any robust sales right now, but some of these communities have been less affected than others.”

Homes priced in the $200,000 to $300,000 range are being built at the fastest pace, according to Metrostudy. Borden said that price range tends to sell more quickly, even in a down economy, due to the lack of starter homes available in the area.

“Has [the downturn] been drastic? No. But at the higher price point, [homes] have sat longer,” Borden said. “It’s so hard to find anything under $200,000. So anyone selling near that—it’s moving faster.”

Goff said the housing market is counter-intuitive during a downturn, with many homebuilders experiencing slight growth in sales. He said Johnson Development has had a 5 percent increase in sales across Houston, with the most dramatic increase at Cross Creek Ranch just north of FM 1093. The west side of Cross Creek Ranch is zoned to Lamar CISD.

“Has [the downturn] been drastic? No. But at the higher price point [homes] have sat longer.”

— Christi Borden, Realtor, HAR board member

“We found in the past when you have difficult market conditions there’s what’s called a ‘select to quality,’” Goff said. “Many [developers] gain market share during these times [because] it’s a safe haven versus buying in a little subdivision somewhere.”

Goff said lot sizes are getting smaller to bring price points down, and there is more emphasis on creating a “lifestyle” community with resort-style amenities to meet market demands.

“We’re seeing a shift toward small boutique communities,” Borden said.

That boutique community experience includes Harvest Green’s marketing appeal to buyers interested in a farm-to-table lifestyle and Del Webb as an active adult community for people over the age of 55, she said.

Suburban Land Use

City of Richmond Economic Development Director Rob Tobias said as more master-planned communities break ground and expand, developers are key to building roads and infrastructure in the unincorporated areas around Richmond.

“It’s about connectivity—how will [a] Johnson [Development community] connect to Del Webb, and how will that connect to H-E-B?” he said.

Municipal utility districts, or MUDs, are formed to provide water and infrastructure services whenever a master-planned community is formed. However, Tobias said it falls on the city or county to establish and maintain the connections between master-planned communities.

The city negotiates strategic partnership agreements, or in some cases limited purpose annexation agreements, that enable the city to collect a portion of sales tax from retail establishments in a master-planned community. These agreements help cover the cost of road and drainage projects between MUDs.

The county, however, relies on bond measures to cover the cost of new roads and mobility improvements on county land, according to assistant county engineer Stacy Slawinski.

Fort Bend County’s most recent mobility bond was in 2013, and the Commissioners Court met for a special mobility workshop Sept. 21 to discuss whether the county would call for another bond in 2017. Another meeting will be held in January before a decision is made.

The city of Richmond is also considering the cost of developments. At the Oct. 17 City Commissioners meeting, city manager Terri Vela said the city will hold a special workshop on annexations and partnership agreements to address the legal and economic implications of these agreements. A date for the workshop has not been set.

Open land

The George Foundation and the Henderson-Wessendorff Foundation own the majority of undeveloped land in the Richmond area, Tobias said. The land for the Veranda project was purchased from the Henderson-Wessendorff Foundation, and Goff said the foundation has worked closely with Johnson Development on establishing aesthetic guidelines.

“Johnson was chosen by the foundation after an extensive search and interview process,” Henderson-Wessendorff President Pat McDonald said in a written statement. “The foundation has been allowed input into the standards of quality for the development to enhance the surrounding area of Richmond, one of the priorities of the foundation.”

McDonald said the foundation owns 768 acres of land adjacent to Veranda. Known as Long Acres Ranch, the foundation partnered with Texas A&M University’s AgriLife Extension Service to provide educational programming.

“The public will have opportunities to participate in coordinated, group programs as well as individual guided tours,” McDonald said. “Programming at the ranch currently accommodates school and scouting groups on a limited basis with plans to be fully operational by January of 2018.”   

Borden likens the housing market in Fort Bend County to driving on a Texas freeway after driving on the autobahn.

“We’re still driving at 65 miles per hour, but because we were going so fast before it only seems like we’re going slow,” she said. “[Richmond] is an area for growth. I feel we’ll have more development in the coming year—there is definitely the land, but the question is, will developers have the money to build?”