Remodeling developers

Strategy: With county land growing scarce, homebuilders are moving into the renovation business.

March 03, 2003|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

For 30 years, Howard County has been fertile ground for housing developments and commercial complexes as Columbia and the rest of the county have blossomed and matured.

But now that land is scarce, developers and homebuilders who have made their livings locally have been forced to find new ways to keep their businesses alive. Some are moving their crews to Harford County and rural parts of Pennsylvania to look for business.

But others are finding ways to keep operating locally by buying more commercial properties or transforming their businesses to offer new services.

Allan Homes, one of the largest homebuilders in the county, started a home-improvement company called Allan Homes Unlimited three years ago. Since then, the $3 million remodeling company has revenue that equals about 25 percent of the new-homes business, said President Allan Waschak.

"There's a lot of opportunity in Howard County. There's not that many professionals doing this," Waschak said. "What we're hoping for is, in five years, the homebuilding will be 25 percent and [the remodeling] will be 75 percent."

Development of open land in Howard County is coming to an end. According to the county's planning office, all of the undeveloped county land zoned for commercial and residential use will be gobbled up within 20 years, based on the county's typical rate of land absorption.

That means the next business wave for local business owners is redevelopment, said Marsha S. McLaughlin, the county's planning director.

"At some time, there will be very, very limited amounts of undeveloped land, and most of the business will be opportunities to redevelop. ... The Route 1 revitalization study really looked at redevelopment as the future frontier for development in Howard County in probably another 10 years," she said.

For some companies, diversification is the key. Although land is going quickly, there is more commercial space than residential, McLaughlin said. That might be enough to keep companies local, such as Security Development LLC, one of the leading developers in the county, one company executive said.

"We already are both residential and commercial, and that is an important diversification," said James R. "Rob" Moxley, a principal with the company, which has projects in other Maryland counties and Virginia.

"As a developer, we've had the opportunity to diversify and develop residential, retail, flex space and apartments," he said. "That helps stabilize the business over the long haul."

Jared Spahn, president of Old Town Construction, said the commercial sector has enough work, but the next steps for him are clear.

"There's always redevelopment, [and] there's always remodeling," he said.

Spahn said his company does redevelopment with historic rehabilitation projects, which constitute about 20 percent of his business, and he expects that portion of his business to grow.

Waschak said remodeling was the next logical step to continue to expand his business. The work calls for many of the same subcontractors he hires for new construction projects, and he can continue to live and work in the community that he has helped build during the past 30 years.

Besides, he said, remodeling and expansions are becoming popular in Howard County because many of the homeowners, like the builders, don't want to leave.

"A lot of it has to do with everybody's property values [being] over $100,000," he said. "They can sell their home for a lot more, but they can't find a replacement for it. And most of the people are not unhappy with where they're living."

Some builders and developers hold out hope that their opportunities in Howard County won't dry up too soon. Michael Pfau, president of Trinity Homes, said he is undecided about moving his small company to other counties.

"If I have enough lots in Howard County, I would love to stay," he said. "But that depends on what piece of property I could buy next, and at what price."

Dale Thompson, president of Dale Thompson Builders, said he knows the pressure. He said he bought a research and development company last year because the land it was sitting on was more valuable than the business.

His company has started building in other areas, but he said housing pressures might force Howard County government to reconsider its land-use policy.

"We're just a byproduct of the people's demand [for] homes," he said. "If there is no one who wants to buy homes, this land question goes away. But if people still want housing, they will have to make more land available. What else can they do?"

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