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Anita Cash asks, ‘Just how much value can I create with golf courses?’

By: Jeffrey D. Brauer


Other than water frontage, golf courses are the best housing amenities. Park or natural open spaces are now closer in value than formerly, especially versus developments where the houses are placed too close to the course in an effort to squeeze out a few more lots. The advantage to golf is that it pays for itself. Parks do not, but lakes and nature areas usually are “self-maintaining” and provide a low-cost privacy amenity.

According to Urban Land Institute, increased real-estate value from golf course frontage varies with neighborhood location and design quality (with expensive areas seeing the highest premiums) housing types and density, other amenities, and safety of adjacent properties. Higher density usually creates more premiums. For example, using 50-foot-wide, zero-lot-line lots over 100-foot-wide single-family lots nets about twice the total premium units. Three-story condos may yield six times as many view units which usually translates into more total view premiums.

Maximizing value usually means maximizing frontage (or “rearage”). Planners have developed several ways to do this, with which golfers are familiar. Golf course architects abandon holes in interesting juxtapositions, as is typical on a “core” course in favor of extending holes through the development in pairs or singly to place houses on one or both sides of the fairway. The following table shows how the basic types of golf course configurations fare in land usage, frontage, net added value, etc.:

Configuration
TYPICAL ACREs(1)
TYPICAL FRONTAGE
VALUE (2)
Potential
Frontage VALUE(3)
LOST LAND VALUE(3)
NET GAIN/LOSS
TRADITIONAL CORE
180
8,000/LF
$350/LF
$2.8M
$10.8M
-8.0 M
CORE W/“FINGERS” (NO ROAD CROSSINGS)
190
16,000/LF
$350/LF
$5.6M
$11.4M
-5.8M
DOUBLE
200
24,000/LF
$350LF
$8.4M
$12M
-3.6M
SINGLE/DOUBLE
210
32,000/LF
$350/LF
$11.2M
$12.6M
-1.4M
SINGLE
220
40,000/LF
$350/LF
$14.0M
$13.2M
+0.8M

(1) Assumes minimum golf course land use in each category.
(2) Uses 1997 average value increase for golf frontage.
(3) Assumes 3 lots per acre at $20,000.00 average sale, or $60,000 per acre. Assumes all golf land is uplands.

As can be seen, single fairway schemes use the most land, because parallel holes of other configurations share buffer space, reducing required golf acreage. Generally, planners provide a larger safety buffer for adjacent properties, assuming non-golfers may not be aware of the hazards of the game. Even taking up more acreage, however, single golf hole configurations create the most value, and can yield 50 percent golf course frontage lots, but 35-45 percent is more typical using cost-effective “double-loaded” roads. If market conditions dictate premium lots, a higher percentage of premium lots is achievable using expensive “single-loaded” roads.

The numbers show why developers generally prefer the single-loop configuration. However, sometimes, site factors make other configurations logical on certain parcels, from a developer’s perspective.

In general, larger parcels are more suited to maximum frontage, single-loop fairway schemes, as they take up the most land. A combination of single, double and core configurations is typical on smaller sites.

Flood plains can be used for golf courses or parks, but not housing. If the site has a large, concentrated flood plain area, it may be logical to use that area as a core golf course, since there is no net land given up for the development, thus improving the economics of a core-style golf course. In other cases, the developer may use the golf course as a screen or buffer for highways, commercial areas, etc. Golf makes a great front entry, and the development may benefit from the “free advertising” offered by placing the golf course by the road.

Each case is site and developer specific, and there must be value to accepting lesser frontage. In any event, the mingling of golf and housing is likely to continue for economic reasons. See you at the new “Condo Canyon Golf Links” real soon!

Jeffrey D. Brauer and his firm, GolfScapes, have designed 40 golf courses and remodeled 80. Canterberry Golf Course in Parker, Colo., and Giants Ridge are rated among the best affordable public courses in the United States, while his Avocet Course at Wild Wing Plantation in Myrtle Beach, S.C., was a Golf Digest best new course winner, Champions Country Club is rated 5th in Nebraska and TangleRidge Golf Club is 12th in Texas. President of the American Society of Golf Course Architects during its 50th anniversary year in 1995-96, Brauer also designed Colbert Hills Golf Club at Kansas State, which opened in June 2000 as the cornerstone golf course for The First Tee program as well as the first collaboration between the PGA of America and Golf Course Superintendents Association of America. To contact Jeff, call him at 817-640-7275 or send him an email at jeff@jeffreydbrauer.com.