Document 9 of 43.


Copyright 1998 Information Access Company,
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Copyright 1998 Hanley-Wood Inc.  
Builder

March, 1998

SECTION: No. 3, Vol. 21; Pg. 92; ISSN: 0744-1193

IAC-ACC-NO: 20915481

LENGTH: 2327 words

HEADLINE: The great gate debate; gated communities; includes related articles

BYLINE: Baron, Lois M.

BODY:
   Some say gated communities offer security and exclusivity. Others see them as nasty social dividers. Caught in the middle of the cross fire are builders who must decide which side is right.

Welcome to America, nation of 20,000 gated communities. Land of the not-so-free, home of the not-so-brave. Over the last two decades, a growing number of Americans have asked to live behind gates - mostly for the sake of security and prestige. Enterprising builders have gladly meet their needs. Now restricted-access communities are coming under fire from politicians, sociologists, planners, academics, and other critics. What's a builder to do?

Put in more gates, if that's what the market demands and planners will allow. Despite mounting criticism, sometimes even from very high sources - Robert Reich, the former U.S. secretary of labor, has weighed in against gated communities - they are clearly on the rise. So say Edward J. Blakely and Mary Gail Snyder, who did extensive research for their forthcoming book "Fortress America: Crated Communities in the United States." The authors estimate that about 8 million people nationwide now live in 20,000 communities with restricted access.

Gated communities are on the rise in every metro area the authors examined. "They're increasing everywhere," says Snyder, adding that gated communities are most heavily concentrated in metropolitan and coastal areas, with California, Florida, and Texas the state leaders.

Though Snyder and Blakely found plenty of older gated communities, many of them dating back to the 1940s and 1950s, their research shows that gates really took off during the 1980s, a time of conspicuous consumption and high concern about crime. Crated communities have become ubiquitous enough that no one has to explain to a buyer what one is - every major metropolitan area has at least one or two.

A Breed Apart

Demand for gates historically has been strongest among wealthy home buyers. But now more and more middle-class communities are being locked up. "It's definitely a growth market in that sense," says Snyder. The trend disturbs critics who fear the nation will be divided between people who live behind gates and those who do not.

Gates add value to a residential development, at least for the people who live within them. The only question is how much value. Says market analyst Pete Halter, president of V. R. Halter & Associates in Atlanta, "From a marketing standpoint, gates can add an air of exclusivity, enhance the perception of security, and define a place, all of which can add value."

Perception is the key word. Though residents may find gates reassuring, they are not high-security devices. They create a barrier that casual visitors and passing motorists don't want to penetrate. "But they don't keep out serious criminals," says Snyder.

Gates don't guarantee property appreciation, either, according to Snyder and Blakely. "In Orange County south of Los Angeles, we looked at resale prices of gated vs. nongated in [detached] single-family homes vs. townhouses," says Snyder. "We found no pattern of higher resale [prices] or faster appreciation [among the gated communities]."

Meanwhile, critics have seized on gated communities as symbols of social segregation. Evan McKenzie, author of "Privatopia: Homeowner Associations and the Rise of Residential Private Government," thinks gates cause social and economic segregation the same way race-restricted covenants did in an earlier era. People who live in gated communities are saying that they don't support public services that support a community.

"Gated communities are special districts that aren't built into the intergovernmental framework. Even radical libertarians admit that public safety is the essential public function," McKenzie says. "It's a medieval approach - with builders turning into feudal lords offering refuge from the hordes.

"Just because people want to buy it doesn't mean it's a good idea," says McKenzie. "I'm not critical of those who want to make a profit, but I think public policy makers need to be concerned."

Increasingly, they are. Some municipalities don't allow gated communities, or else they make it so difficult to permit one that it's not worth the trouble. The city of Portland, Ore., for example, has very few gates, says Jerald Johnson, a real estate market and regional economic development consultant with Hobson Johnson & Associates in Portland. "A few popped up in the 1980s, and there are still a few at the highest end pieces of some subdivisions," he says, "but they are deemed anticommunity and opposed here."

Ditto for Minneapolis, says Peter Pflaum, president of Lundgren Bros., home builders in Wayzata, Minn. "It's became local feelings are against them. We're conservative here, and it's difficult to get approval," he says.

"There was a time when nobody asked questions," adds McKenzie. "It used to be a plain old design feature, and cities didn't care. Now there has been such a hue and cry that cities are taking another look."

To Gate or Not to Gate?

Even when municipalities allow gates, they may not be worth erecting. The cost of maintaining a manned gate may be more than buyers are willing to pay.

"We figured that a manned guardhouse takes seven full-time staff to cover for a week," says John Scott, principal of Scott, Kenney & Partners, Westport, Conn., who has consulted on a dozen or so gated communities and done research for many more in 24 years in the field. "Calculate a salary of $ 14,000 to $ 17,000 each and divide that by the number of units." Scott's rule of thumb is that buyers won't go for anything that costs more than cable TV.

Gates still make sense when the market demands them or when they can differentiate a community. But the decision to gate or not to gate should be carefully considered, says Halter. "To gate or not is not a linear or singular decision. You have to consider three main factors: local market conditions, the consumer profile, and psychographics," he says.

Local market expectations determine whether Del Webb Corp. adds gates to its communities, explains Martha Moyer, spokesperson for the Phoenix-based company. "We do whatever is the norm for the region. And we put one in every master planned community." Del Webb doesn't use gates in Phoenix, she says, because buyers there don't perceive a need for them.

U.S. Home Corp. gates all its retirement communities, says Robert Strudler, chairman and co-CEO of the Houston-based builder. These communities account for 25% of U.S. Home's activity, even though only 19 of its 230 communities are age restricted.

"In primary homes, however, it's a negative selling point," Strudler says. "Primary-home owners are concerned with the monthly payment. Once you gate you need a homeowners' association, different financing, and different regulations."

In south-central New Jersey, Exit 8A on the N.J. Turnpike leads to a heavily gated area. Starting in the 1970s, developers produced several gated neighborhoods there for active adults. "Everyone played follow-the-leader," says consultant Scott, who recently advised a builder client to buck the trend. The project was relatively small - 144 houses - and dense.

"At their density, [the builder] should select affluent empty-nesters. These people are put off by the active adult age restrictions and still have children who come and go," Scott says. "Automated gates are a hindrance for such people, and a manned gate doesn't appeal to people who prefer anonymity."

Like Halter, consumer researcher Barb Nagle says builders need to look carefully at the psychographics of their target market. "We find people at the entry level and at the very high end who want gates," says Nagle, president of Marketscape Research and Consulting in San Diego. "We also find people at both ends who don't want gates. We find people who admit that there are advantages to gates but who still avoid them." What this means, Nagle says, is that builders must choose an identity for their project from the beginning.

"Our research has shown that certain high-end buyers find gates offensive because they either oppose gates from a philosophical standpoint or see them as pretentious," says Sandra Kulli, president of Kulli Marketing in Malibu, Calif.

To some buyers, a gate sends up the signal that the whole area is unsafe, explains Toni Alexander, president of InterCommunicationsInc, Newport Beach, Calif. "Some find it troubling that it's difficult for their kids to walk to the next community."

Consider the Alternatives

If you choose not to gate, how can you satisfy your buyers' need for security? There are alternatives to gates that address buyers' concerns about crime, traffic, prestige, and control. Street design, for instance, can control traffic. "The most exclusive neighborhoods in Greenwich, Conn., have private streets and put up horse jumps," says Scott. "[This forces] cars to go slowly and gives the message that you're not welcome if you don't live there."

Neighborhood eyes-on-the-street campaigns are another effective crime deterrent, says Snyder. Some people report having reclaimed a sense of neighborhood after moving to a gated community, specifically because of a decrease in crime.

But Snyder's studies indicate that crime in gated communities drops only at first and then rebounds, and that a neighborhood crime-watch program can prevent crime as well as a gate can. Snyder suggests that crime-watch programs discourage crime because they foster a greater sense that neighbors are looking out for each other.

Passive security devices (such as surveillance cameras), roving patrols of police or volunteers, and a homeowners' association alliance with the police to fund additional patrols are other ways to address crime. So is developing communities that attract a mix of home buyers, says Alexander. Retired residents, for instance, can lend a presence during daytime hours and keep an eye on the neighborhood. "The way to have a secure community starts with the people within it," she says.

RELATED ARTICLE: Access Has Its Limits

In some developments, gates go up almost automatically, and urban planners don't seem to mind too much. Luxury apartments and retirement resort communities are good examples.

Bobby Page, CEO and senior executive vice president of JPI, Dallas, says the company puts gates on 100% of its luxury apartment buildings in municipalities that permit them.

The builder has featured "limited-access gates" as a standard amenity for its luxury product for more than 10 years, Page says, as have virtually all builders of luxury apartments. But Page has seen a move in the past five years toward gated apartments among less expensive product as well.

"We base our decisions on what residents want," Page says, and they clearly want security. In the metropolitan areas in which JPI builds, security always rates in the top three concerns on resident surveys.

As limited-access gates have become more popular, their technology has improved, too. "Wrought iron is wrought iron," Page says, "but computer technology [for gates] is pretty bug-free now."

JPI uses a gate that has an electronic "reader" at the entrance. As residents drive through, the reader recognizes a computerized card attached to the inside of their vehicle's windshield and triggers the gate to open. Visitors can use a system phone to gain access.

Page calls limited-access gates "relatively inexpensive." JPI spent $ 60,000 for gates (not including fencing) at one of its newest communities.

JPI's marketing materials emphasize that the firm's gates "limit access" rather than promise security. After all, liability is an issue, even though most people recognize that a gate doesn't guarantee protection against crime.

RELATED ARTICLE: Three Degrees of Separation

In their soon-to-be-published book "Fortress America: Gated Communities in the United States," authors Mary Gail Snyder and Edward J. Blakely divide gated communities into three types:

Lifestyle communities

In these communities, gates provide not only security but also separation for leisure activities and amenities within the development. Retirement communities and golf and country-club developments fall within this category.

Elite communities

Gates symbolize prestige and distinction in these communities. They offer people another form of security - security on the social ladder.

Security zones

Here, fear of crime and outsiders is the foremost motivation for fortification. These neighborhoods typically are retrofitted with barricades rather than built with them initially.

RELATED ARTICLE: Don't Let Gates Keep Buyers Away

Although gates can keep intruders away from your communities, they may also deter visitors you do want - home buyers.

According to John Scott, principal of Scott, Kenney & Partners, a consulting firm in Westport, Conn., prospects are just looking for reasons to cross builders off their shopping lists. If it's too difficult to enter a gated development to look at new homes, that may be just the excuse they need to drive off.

To make a gated community more inviting to prospects, Scott offers the following tips:

* If possible, leave the gate up when the sales office and the model home are open.

* Have the guard dress like a hotel desk clerk - a sports coat and fie are more welcoming than a uniform.

* Display a prominent sign in the guardhouse that says "Sales Model Open. Welcome." People don't like to have to ask directions or explain why they've come.

* Don't guarantee safety or security in your advertising. No one wants to get sued over promises that can't be kept. Emphasize "community," "peace of mind," and "limited-access gates" instead.

Lois M. Baron, a freelance writer and editor in Arlington, Va., is the coauthor of "Protect Yourself, Your Family, Your Home."

GRAPHIC: Photograph; Illustration

LANGUAGE: ENGLISH

IAC-CREATE-DATE: July 17, 1998

LOAD-DATE: July 20, 1998




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