Site Planning

Pros and Cons Of Gated Communities?

For the most part, everyone would think that a gated community increases home values and therefore could increase a project’s profitability.  While that is generally true, there are also some costs and issues that need to be considered.

First, it is likely that the streets will need to be private as the cities do not typically maintain streets behind gates.  In housing developments with no gate, the streets are often dedicated as public streets and the maintenance costs are covered by the local jurisdiction.  With private streets, an HOA would likely need to be formed and street maintenance would be funded by HOA dues.  If a development has public streets and no common area, it is possible that an HOA is not required.  The lack of HOA dues, which also can have expensive insurance and management costs, might add value to home prices as the homebuyers look at total monthly housing expenses.

Another concern may be the amount of land area that is needed for the gated entry.  The site plan may need to accommodate enough area to allow cars to stack off the main road and allow for a turnaround.  In larger suburban tracts, this land area may not be relatively significant but it could be critical in small infill sites.  As well, the gated entry has some extra construction costs in terms of the gate and enhanced features.

One possible positive, though, with the private streets might be the opportunity to avoid city street standards that could save some land area and costs.  A city will have a standard street width that will include the asphalt, curb, gutter, and sidewalk.  The private streets might be narrower, no sidewalks, or with rolled curb.  You would need to determine these possibilities with the local jurisdiction.

And a final comment about man-guarded versus key-card gates.  The cost of a man-guarded gate has some extensively higher monthly costs due to the guard salaries, and it is normally seen in larger master planned communities where the costs can be amortized over a larger number of homes.  Smaller communities tend to use the key-card gate to avoid excessive HOA dues.

Please feel free to share with us below your comments and questions.

John Kaye has over 30 years experience within the land development and homebuilding industries, having held senior management positions with The Irvine Company, Koll Real Estate Group, and Brookfield Homes. As a developer, John has overseen the land acquisition, entitlements, and development of master planned communities, residential tracts, urban infill sites, and land assemblages. His experience and skill sets include land acquisition, land brokerage, project management, market analysis, finance, and strategic planning.

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