Subdivision

Historical Background

Until the 1930s, the subdivision process was highly speculative. Investors purchased tracts of land, employed surveyors to lay out streets and building lots, registered “surveys” at local registry offices, advertised, and sold individual lots. Most lots were bought and sold several times before being built upon. Only in upmarket areas did subdividers act as developers, installing services and imposing building restrictions that mandated minimum standards or prices. The result was a varied and uncoordinated pattern of development, both between and within subdivisions, some of which remained partly developed for many years.

During the 20th century, coordination increased. Subdividers learned that most buyers would pay a premium for a serviced lot in a regulated area where investments were thought to be more secure. Suburban and exurban jurisdictions learned that scattered sites were expensive to service. After 1945, most shifted the cost of installing hard services onto the developer, while introducing impact fees (“development exactions” or “charges”). These defray the extra costs of providing and maintaining services (e.g., regional roads, trunk sewers) that serve the subdivision but which lie beyond its boundaries. Municipalities also frame zoning plans that mandate consolidated patterns of development, although exceptions still exist.

The Process of Subdivision

The modern process of creating a subdivision has been described by Witold Rybczynski. It depends on the interaction of four players who, when acting together, shape the suburban land market. More so in the United States than in most countries, the developer is the key player. He—most developers are men—initiates the processes by buying and holding land in large parcels and then releasing smaller quantities onto the market according to demand. He performs the tasks once undertaken by the land subdivider, while paying for installation of major infrastructure, including piped water, sewers, and internal roads. Costs are incorporated into the prices of building lots. During the building boom of the 1950s, some large developers, notably the Levitts, undertook house construction, but this remains unusual. Most work with one or more builders, usually those who can offer the designs and styles that should appeal to the sorts of buyers the developer hopes to attract. The developer markets the subdivision, using billboards, newspaper advertisements and, increasingly, the Internet.

Most builders are locally based, but since the 1990s, some have increased their scale of operation to the regional or national scale. Depending on the [Page 708]nature of the subdivision and whom they wish to attract, the developer may work with proven local builders or those with a national brand. Subdivision marketing may include construction of a model house, perhaps by each builder, which serves as a sales center. A third agent, the lender, now becomes important. Because installing services often costs more than the land itself, developers need credit. Lenders prefer low-risk subdivisions that conform to tested formats. As Charles Leinberger has explained, this helps account for the standardization of residential subdivisions across the United States and for inertia within the industry.

...