McKenzie Towne scales back TND plan

Despite selling nearly 1,600 homes in Canada’s fastest-growing new urban community, Carma Developers see a limited market for traditional neighborhoods. Carma Developers was one of the first Canadian development companies to take a chance with the New Urbanism, breaking ground on McKenzie Towne in Calgary, Alberta, in 1995. The project has consistently sold more than 250 homes a year and its absorption in the last two years has been better than ever — with 640 units purchased. Yet Carma has chosen to cut back its original vision of a 12-neighborhood, 2,400-acre project to a 4-neighborhood, 950-acre community with 6,000 - 7,000 units and a town center. On the land where the original plan by Duany Plater-Zyberk & Co. envisioned eight more neighborhoods, Carma has just opened New Brighton, a development with no traditional planning elements. Carma Vice President Robert Honsberger says the original concept was “more artistic than factual” and that Carma never fully committed to such a buildout. Though the company has been happy with McKenzie Towne’s sales performance, Honsberger estimates that the market for traditional neighborhood developments (TNDs) in Calgary tops out at 300 single-family lots plus multifamily a year, and thus it did not make sense for Carma to begin developing new neighborhoods that would compete directly with the product in the first three villages. “It would cannibalize McKenzie Towne,” Honsberger says. Unlike many new urban projects in the US, McKenzie Towne has been relatively affordable, selling homes ranging from $77,000 to $225,000 (US dollars). All production built, McKenzie Towne has looser architectural and materials standards than many TNDs, particularly well-known developments like Celebration, Kent-lands, and Harbor Town. This likely contributes to affordability, but McKenzie Towne has also not generated the kind of premiums often seen in new urban communities. Finding a market for high-end homes has been difficult, especially where housing types were mixed in close proximity. After completing the first village, Carma moved toward market segregation, building separate starter, move-up, and estate areas, Honsberger says. In terms of sales, the strategy seems to have worked. Carma had budgeted for 20 homes above $250,000 in the second village but has so far sold 29, and a similar range of homes will be introduced in Elgin, the third village under construction. “It’s a niche market,” Honsberger says, “you’re still going to sell more estate homes in a curvilinear development with garages out front.” Nevertheless, the estate homes in Elgin will have front-loaded garages, and the only restriction is that they not protrude more than six feet in front of the facade of the house. In addition to the continued rapid construction of single-family homes, Carma is building a 155-unit townhouse project in the town center and other developers have begun construction on a nursing home and an assisted living complex there. The project’s High Street includes 143,000 square feet of retail, including a 37,000 sq. ft. supermarket. Inverness, the first village, is sold out and its general store — which has struggled for years — was recently leased to a national chain of convenience stores. Calgary’s April 2001 census counted 3,044 inhabitants in McKenzie Towne, up by nearly 1,000 people from the year before. Honsberger stresses that Carma remains committed to TND for many years to come. “We still have 12 years more of TND development in McKenzie Towne, we have one village yet to plan, and it is our intention to remain consistent with what we have been doing to date.”