IronRidge in Lake Forest, California, is one of Landsea Homes’ modern residential developments. | Images courtesy representatives of Landsea Homes

Challenges and Changes in Residential Development

Carrie Rossenfeld Residential & Mixed Use

The Southern California homebuilding sector continues to face the headwinds of restrictive legislation, soaring construction costs, a small labor pool, NIMBYism, and other factors. Some projects, like Ontario Ranch, on which SoCal Real Estate reported recently, are able to pencil, but others struggle to get off the ground.

Still, the demand for homes in this market abounds, and home developers recognize this. Irvine, California–based Landsea Homes recently hired veteran Tom Baine as president of its Southern California division. Baine, an industry veteran with close to 30 years of homebuilding experience, is responsible for overseeing the planning, development, and implementation of the company’s communities in the region.

SoCal Real Estate spoke with Baine about his new role, what’s spurring the company’s expansion, and his outlook on the residential-development market in Southern California over the next decade.

Tom Baine

SoCal Real Estate: What are you looking forward to accomplishing in your new role with Landsea Homes?
Baine:
Landsea Homes has a great reputation for designing and delivering homes that embrace the local lifestyle and environment in which they are built. I look forward to working with our team as we continue to establish ourselves as a prominent, high-quality homebuilder in the Southern California market.

Additionally, I look forward to continuing to build, develop, and enhance our high-performing team, from employees to contractors, outside experts and partners. I’m excited to add to their wealth of experience in building high-quality, modern-lifestyle homes.

Why is the company executing a big SoCal expansion at this time?
The company’s senior leadership consists of seasoned, veteran, local building executives who have extensive experience and long ties to Southern California. Because of our beautiful weather, close proximity to beaches and mountains, and a diverse, thriving job market and economy, Southern California is one of the most desirable places to live in the country. Our Southern California portfolio is one example of how Landsea Homes is creating communities in some of the more prominent markets in the United States, including the Bay Area, Arizona, New York, and Boston.

How would you characterize the state of residential development in SoCal, given the headwinds with legislation, land and construction costs, scarcity of labor, and NIMBYism?
The land-entitlement and -approval process in California continues to be one of the most complex and challenging processes in the United States. It takes tremendous skill, thoughtfulness, knowledge, and deep capital to navigate through this maze, all of which Landsea Homes possesses.

Strong, positive relationships are very important. The scarcity of land across the country has created a strong competition for opportunities to build new communities, creating a premium for companies who enjoy strong relationships with land sellers. The tight labor market allows trade contractors to select who they want to work with, so it is very important to have strong relationships and create an appealing environment in which to work.

How do you see residential development in this market changing over the next 10 years?
As millennials continue to enter the housing market, we believe it will be more important than ever to be the leader in delivering high-performance housing — building homes and developing communities that provide a sense of connectivity to the indoors and outdoors and clear energy efficiency and utilize sustainable products that are smart to use.

Over the next decade, I believe there will be more redevelopment and infill communities in older neighborhoods that are attractive because of their close proximity to job centers. The density of these communities will continue to increase, which is appealing to many of the younger buyers entering the housing market, who enjoy living in that environment.