N. Joy DeVue asks, ‘Why are golf courses combined with housing?’

By: Jeffrey D. Brauer

The Scots never maximized the possibilities of mixing golf with real estate, usually preferring to keep houses well to the perimeter of the course. When the game immigrated to the United States in the late 1800s, it did not take long for pragmatic American business minds to see that real-estate value increased significantly by intermingling golf courses with residential units. Prominent Scot and golf course designer Donald Ross predicted in 1900 that golf would flourish in America because of our unique ability to find profit in diverse ventures.

So, simply put, golf courses are good for real-estate developments! Interestingly, only a fraction of golf course homebuyers are actually golfers. For most, it’s the view that helps sell the lot.

For developers, the benefits are:

Prices increase – sometimes to double non-golf lots.
Houses Sell Faster – in some cases, non-golf lots have trouble selling at all.
Golf courses usually provide a profit-making green belt amenity.
Golf courses allow a wide variety of home products to be built.

According to Urban Land Institute, golf course frontage increases real-estate value from $125 – $1,000 per lineal foot of frontage. The average increase is approximately $350 per lineal foot. The actual value increase varies with the neighborhood (with expensive areas seeing the highest premiums) and the quality of all design elements including golf course, amenities, housing types, etc.

So, it is necessary to properly plan the development to maximize value associated with golf courses. The key to creating value is to maximize frontage. It is also necessary to provide a safe environment for the surrounding houses.

However, the design of golf courses in the housing development has evolved. In early developments, the golf course was often placed outside the front door of an owner’s home. Modern designs usually use the golf course as an “extended backyard,” perhaps a reflection of our more private nature today. For a while, developers were consumed with maximizing lots on the course, often to the detriment of good community planning. Now, sophisticated developers give up a few view lots to enhance the front entry and even multiple neighborhood entries so every resident feels a part of the golf community.

Golf courses within housing developments vary with the need for development itself and with “golf booms” in the history of the United States. Accelerated golf construction has occurred in the 1890s, 1920s, 1960s and 1980s. These periods of rapid development are generally concurrent with periods of high economic and development activity. Right now, most of the new courses built are within housing developments.

That’s because – pure golfing aesthetics aside – real-estate developments are good for golf. They do provide a ready source of golfers, given that most golf rounds are played at a convenient place. More importantly, they help fund the course. The dirty secret of the golf business is that most courses aren’t very profitable. Of the five major cost components to successfully run a golf course – land cost debt, construction cost debt, clubhouse operations, golf course operations and profit – it usually turns out that a course can survive paying about 3 to 4 of these items.

Assuming we can’t cut operations cost or profit willingly, it’s imperative that a golf course get free land and subsidize its relatively large construction costs. Building within a housing project allows both as the developer usually donates the land and a substantial part of the golf course construction cost, either up front or through rebates from home sales. Removing $4 million to $7 million of debt can improve the balance sheet of almost any golf course!

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.