Subdivision Saturation - Is Less More?

Does anyone else worry about the long-term impact of excessive subdividing? Sure, breaking up parcels into smaller lots is great for short-term profits, but could we be setting ourselves up for overcrowding, strained infrastructure, loss of community character, and environmental issues down the line?

Are we sacrificing long-term livability and sustainability for quick gains?

What if we end up with far more parcels than some markets need? Could we be creating an over supply?

Once a parcel is split, it’s a heck of a lot harder to merge them together again after they’re sold off to different parties.

I’m curious to hear thoughts from others. Do the benefits always outweigh the risks?

I see things a little differently to be honest. Out of all the subdividing being done by our peers in this space. It’s a drop in the bucket. Finding these opportunities in areas, that will pencil out… is not child’s play. I’d suspect that a lot of these acquisitions fall into the Unicorn deal space. My point is, is that it takes a GREAT deal of focused purposeful work to land these types of projects.

To answer your question, I don’t find it exploitive at all. Most of these folks are spending an enormous amount of time, money, and energy to find these deals. Unlocking larger properties and making the land accessible to the regular Joe, is a good thing in my book.

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I’ll admit, I’ve wondered about how long the subdivision business will be viable, but it’s not a major concern in my mind. And @tmiski makes some great points.

Even though a lot of land flippers have evolved into this space, they’re still a very small segment of what all land investors do. Subdivides don’t happen overnight, even in the markets where they’re easier to do.

Whether they’re needed really just depends on the market. If the demand truly isn’t there, or if the demand suddenly drops in the future, the market will force subdividers to either stop subdividing or change their methods.

Looking at the simple economics, if new child parcels aren’t needed in the market, then they won’t sell—or at least not at the anticipated higher retail prices. If an activity ceases to be profitable (and profitability is driven by market demand), you can only keep doing it for so long.

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