Site Planning

Acres – Gross vs. Net?

In the process of site planning, financial analysis, and land development, one of the main goals is to determine if the site plan is as efficient as possible.  In other words, maximizing density and therefore profits.  In a previous post, we gave some rules of thumb for density depending on various lot sizes and product types.  Those rules of thumb are typically based on net acres, not necessarily gross.

Gross acres are generally defined as the entire parcel, while net acres tend to be calculated based on flat usable area plus the streets.  As example, a 20-acre parcel would have 20 gross acres.  If the parcel were completely flat, the parcel would also have 20 net acres.  But when you have a parcel that has more topography, the grading plan will probably incorporate slope areas that will not be included in the net acres.  Depending on the topography, you might only have 10 – 15 net acres when you consider the flat area, usually defined as 2% or less grade, and the streets.

Let’s take a rule of thumb for 5,000 square foot lots where the density is 5.0 lots per acre.  If the 20-acre parcel is flat, you might have a yield of 100 lots.  If the net acreage is 10 acres, due to topography, then the yield might be more around 50 lots.  Obviously, the flatter site is more efficient and yields more lots, but a parcel with topography has some possible advantages to offset the lot count.  With topography and slope, there is a chance you will have some views which can be sold as house premiums.  As well, side yard slopes can create more separation between the homes, which could make the homes more valuable to homebuyers.

The land planner or civil engineer should be able to calculate the net acres based on the site plan.  As a developer or builder, you are looking at how efficient the site is being utilized based on the net acreage calculations.

Please share with us below any of 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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