A Neighborhood In North Carolina Is Put Up for Sale

By MICHELLE CROUCH

Charlotte, N.C. - In many parts of the country, developers are buying up older homes, tearing them down and building million-dollar mansions in their place.

Now, 22 homeowners here are taking matters into their own hands with an unusual marketing proposal.

They've put their entire neighborhood up for sale.

Homeowners in Sherbrooke, a neighborhood about six miles from downtown, are betting that a developer will pay a premium for 15 acres of prime real estate under their 1950's ranch houses. Their asking price: about $700,000 a lot, triple the individual value of most of their homes.

More than 20 developers have been in touch since the owners advertised their proposal in the local paper in the spring. Several developers have told the neighborhood they planned to put together proposals.

The homeowners aren't the first to realize that their lots are worth more together than separately. Neighborhoods in urban areas like Orange County, Calif., Washington and Chicago have sold collectively to home builders, pocketing thousands more than they would have individually.

But analysts who track teardowns said it's still rare for a neighborhood to initiate the idea.

"It makes sense from an economic point of view, but it's a tricky thing to organize," said John K. McIlwain, senior fellow for housing at the Urban Land Institute, a nonprofit research center in Washington.

Sherbrooke is a subdivision of three-bedroom, two-bath ranch homes. Most were built in the 1950's on what was then a dirt road surrounded by cow pastures and cotton fields.

In 1970, the city's first suburban mall opened on a nearby farm, attracting offices, restaurants and a flood of homes. Over the years, SouthPark Mall grew into the city's toniest fashion destination, with dozens of high-end specialty stores. The area around it soon became one of the city's most desirable - and expensive - places to live.

Luxury condominiums and million-dollar homes sprouted on open lots. As land became harder to find, developers started tearing down some of the original homes.

It wasn't long before Sherbrooke residents felt the pressure. Their large, wooded lots made their land especially valuable.

Several months ago, three homeowners signed contracts with a developer who planned to build high-rise condominiums, sparking concerns that the neighborhood would lose its character and quiet charm.

The project died when the homeowners failed to persuade everyone else to change the covenants to allow multistory buildings. But it got neighbors thinking.

"We've seen so much destruction and teardowns of dated homes," said Jim Rogers, a real estate broker who lives in the neighborhood and who helped organize the effort. "We just don't fit in anymore."

Along with Keith Fackrell, president of the neighborhood association, he researched the price of land within a mile of the neighborhood and found it was selling for $400,000 to $900,000 an acre, with larger tracts going for more. Because each lot in their neighborhood was significantly larger than any other parcel sold, they decided they could ask about $1 million an acre, knowing they would probably end up getting less.

Their next challenge was persuading the rest of the neighborhood to go along. While some homeowners had lived there for years and were ready to downsize, others were young families who had recently moved in. The best way to gain a consensus, they decided, was to agree that everyone would get the same amount in the sale, even though some lots were larger and some homes were in better condition than others.

Mr. Fackrell and Mr. Rogers called a meeting and pitched the idea. If they didn't sell en masse, they told their neighbors, a developer would likely pick them off one by one, and they would have little control over what went up next door.

Still, some neighbors were initially reluctant.

"Then we told them the asking price," Mr. Rogers recalled. "One man said he could be in a hotel by Saturday."

As traffic has worsened and commutes have lengthened, Charlotte builders - like those in Chicago, Washington and New York - are trying to meet the demand for newer houses close to town.

While there are plenty of one-house-at-a-time teardowns, developers increasingly are looking for larger parcels where they can build planned communities. But getting each homeowner to agree can take years, and one dissenter can kill a deal.

Sherbrooke's residents have signed legal contracts agreeing to sell at a minimum price, which they declined to name. "These folks are saving the developer a step," said Dan K. Cottingham, a partner with residential real estate firm Cottingham-Chalk & Associates.

Todd Harrison, land acquisition manager for Centex Homes in Charlotte, said the site is too small for his company but would be attractive to a builder of small custom homes or condominiums.

A developer could make an easy profit there, he said, if the city agreed to change the zoning to allow condominiums or a mix of town homes and single-family homes. Otherwise, under the current zoning, a developer would need to build at least 50 homes priced at about $1 million apiece to make it worthwhile, he said. That would be harder, he said, but not impossible.

At least one other neighborhood nationwide has successfully pulled off a joint sale originated by the homeowners and not by a developer. Poplar Terrace, a neighborhood of Vienna, Va., formed a real estate collective several years ago. Most of the 70 homeowners in the community agreed to sell to Centex Homes, which plans to build 500 to 1,000 condos and town homes.

"The people who haven't signed are on the edges of the development and we've been able to work around them," said Stephen Fritz, vice president for operations at Centex in Washington.

In Charlotte, Sherbrooke homeowners say it could be months before they strike a deal, as developers study the numbers, seek financing and talk to city officials about a possible rezoning.

Some homeowners, like Louise Nezelek, say they will win no matter what the outcome. Mrs. Nezelek and her husband, Ed, fell in love with their three-bedroom, two-bathroom home the minute they walked in two years ago. She especially enjoys drinking coffee on her porch, "where it doesn't even feel like you're in the city," and picking blueberries, figs and asparagus on her three-quarter-acre lot.

But she said she knew it would be foolish to say no to the deal if she can get three times the market value of her home. She would be able to find something similar, or better, nearby. "If something works out, we'll go along," Mrs. Nezelek said. "But to tell you the truth, I don't really want to move. I'm happy here."