Proposed rental community moving forward


A developer wants to develop 85 lots for single-family rental homes on nearly 30 acres in the southwest corner of Interstate 70 and Blue Road.

Submitted image

GREENFIELD – A proposed rental home community cleared a hurdle this week when planning authorities gave it a favorable zoning recommendation.

AMH Development, an offshoot of Calabasas, California-based American Homes 4 Rent, wants to develop 85 lots for single-family rental homes on nearly 30 acres in the southwest corner of Interstate 70 and Blue Road. The firm and the owners of the undeveloped land are also asking Greenfield officials to annex the site into the city.

The site is just shy of meeting a state law requiring territory sought for annexation to have at least one-eighth of its boundaries touching the annexing municipality. When the site is split, however, the easternmost portion of just over 20 acres meets that threshold. Therefore, the landowners plan to seek annexation for that part first, which, if approved, would allow the remaining portion to meet the contiguity requirement as well. That would pave the way for the remainder to be annexed and allow the development to proceed as planned.

The Greenfield Plan Commission voted 6-1 Monday night to give Greenfield City Council a favorable recommendation on a residential zoning designation for the first portion of the site. If the council approves the annexation, it will take that recommendation into consideration when voting on the site’s zoning designation.

Greenfield planning director Joanie Fitzwater supports the proposal but recalled her and other officials’ concerns over single-family rental communities.

“Greenfield has had one or two throughout its history, and what we are most concerned about is the long-term maintenance of the homes and the property,” Fitzwater said.

To try to quell those concerns, the city is asking AMH Development to enter into an agreement over ongoing maintenance of the community’s common areas and structures. The agreement would require AMH to post a bond that the city could draw from to perform maintenance if AMH fails to do so.

City officials also have concerns over the possibility of AMH selling individual homes to owners that would rent them out and not keep up with maintenance. AMH agrees to work with the city on a commitment to restrict the sale of lots on an individual basis for a to-be-determined period of time.

Briane House, a partner with Greenfield-based law firm Pritzke & Davis representing AMH Development, gave reasons why selling off individual properties would be unlikely. The development would be owned by a real estate investment trust, or REIT, made up of investors owning shares of the portfolio of properties. House said selling off individual properties would be impeded by the regulatory procedures that would be required for such a change. He also pointed out that 75% of a REIT’s investments must be in real estate and that REITs must provide 95% of their gross income from real estate sources, in this case – rental income.

“The mere fact that this is in a trust is a tremendous protection to Greenfield to guard against the concerns about selling off individual properties,” House said.

He said exterior maintenance would be provided in the community and that monthly rental rates would start around $1,800.

“The architectural features in the construction is consistent with any fine home built in this community, and in fact these homes would have a market value of about $375,000 apiece,” he said.

He noted that because it would be a rental community, it would be taxed up to the state’s 2% cap on commercial properties rather than 1% on owner-occupied homes, resulting in more revenue to the city.

House said existing AMH Development rental communities have a 98.5% occupancy rate and median household income of $122,000. While minimum leases are one year, they average three to five. Tenants are mainly made up of those relocating for a job opportunity, empty-nesters and those not in the market to buy a house.

A pool, cabana building and playground for small children would be part of the development as well, along with a trail along Blue Road.

Plan commission members Chris Cooper, Jason Koch, Jeff McClarnon, Paulette Richardson, Becky Riley and David Spencer voted in favor of the zoning recommendation while Gary McDaniel voted against. Kristi Baker and Mike Terry were absent.

Richardson asked several questions during Monday’s meeting, including how AMH Development has determined the community can support the proposed rental rates. Mark Connor, who works in land acquisition and development for AMH, said the firm conducts market studies for every area it considers and that the figures proposed for Greenfield are feasible.

McDaniel, the sole dissenter on the favorable recommendation, also serves on the city council and as the president of his homeowners association. He told the Daily Reporter that his neighborhood has rental homes, some of which are owned by AMH. McDaniel added that while AMH is one of the better rental companies to work with, he’s heard from constituents who don’t want rental homes in their community.

Deb Watson, who owns the land for the proposal with two of her sisters, recalled how their late parents sold other land in the area where J.B. Stephens Elementary School and Brandywine Community Church currently stand. She added that a developer proposing apartments approached her and her sisters, but that they turned it down, thinking it not right for the area.

Then AMH Development came along with what she called a plan for a good use of the space and quality homes.

“We have been very conscientious and believe that this is what our parents would be proud of,” Watson said.

Roy Wilson of F.C. Tucker Company’s Greenfield office, who’s brokering the deal, said he thinks the city is being too hard on AMH Development because its plan involves rental houses. AMH was transparent about its intentions from the beginning, he continued, adding it could’ve pitched a traditional housing development, gotten it approved and rented the houses out regardless.

“My point is we seem to be over-regulating, over-controlling, micromanaging a subdivision because of rentals, when in fact I think almost every subdivision that gets approved could have rentals,” he said.