Done right, a housing development is generally a good thing for a community, spurring economic and community development long past the initial construction phase.
Last month, Scottsdale-based CFT Ventures announced its plan to build the Silverado at Simonton Ranch development located on property west of the Bashas’ shopping center. As proposed, Silverado is a 55-plus community of 585 lots, each of which will contain a 1,300- to 1,800-square-foot manufactured home.
Community amenities include a pool, walking trails, extensive golf cart paths, an amenities center, a dog park and six pickleball courts.
One feature of the development, land leasing, spurred the most conversation during CFT Ventures’ neighborhood meeting at Camp Verde Community Library on Sept. 21. A land lease means that a property owner does not own the land on which their property sits. When buyers purchase their home, their monthly mortgage payment will be less because the home price is reduced — which CFT Ventures’ Patrick Clifton sought to capitalize on.
“A big part of what we’re trying to do is provide more for less,” he said. “We want our average price point right around $140,000 ... significantly below our competitors.”
The complication is this: While land-leased properties are significantly cheaper than homes built on land owned by the property owner, each resident of a land-leased property pays a monthly land lease fee. Clifton did not disclose how much this fee would be at Silverado, only stating that owners would sign a three- to five-year lease term.
Moreover, Clifton did not specify how long CFT Ventures intended to keep the land or at what rate lease increases were likely to occur. Clifton also stated that CFT Ventures is encouraging residents, not renters, at Silverado. He did not address whether CFT Ventures would seek a restriction on rentals.
These facts were not lost on the community during CFT Ventures’ neighborhood meeting; nor were they ignored on social media. On Sept. 26, Facebook user Helen Jarnes responded to the Camp Verde Journal’s story “Housing development shares plans,” saying, “So you have a manufactured, mobile or custom home built on a lot that you will not own? And required to lease three to five years? And they don’t want rentals? Where is the upside?”
Camp Verde Mayor Charlie German said his impression of land-lease properties in Southern California has been positive, providing an avenue for homeowners to afford property they might otherwise not be able to afford due to the restrictive cost of land ownership.
“It’s something that is going to come into more and more in Arizona,” German said, adding that his conversations with area developers have led him to believe land is in extremely short supply, encouraging more novel approaches to property development and ownership. “The market develops its own niches. If people can’t afford the land and the property, they need some other option.”
According to Town of Camp Verde Community Development Director Carmen Howard, “[CFT Ventures’] whole point is that what they’re doing leaves them a little more control. It provides a low cost they can control. Their whole mantra is trying to provide affordable housing with great amenities. By using this model, they can control how that happens.”
Howard said she has not seen a lease example from CFT Ventures but hopes to receive its application within the next week.
Howard anticipates construction beginning during the winter or spring of next year, but the timeline is dependent on how quickly the developers move after the 90-day minimum application process. With all the engineering and planning completed or near completion, Howard said the process should be rapid.
“These guys are really ahead of the game [in] their level of readiness,” Howard said. “I expect that once they get their application through we can move it through pretty quickly.”
Adam Baugh of Phoenix-based Withey Morris, the land use law firm representing CFT Ventures during the Silverado development, referred questions about land leasing to Clifton. Clifton did not respond by press time.