Real Estate Development in Asheville: What It Takes to Build Housing From the Ground Up

AVLmeetup's February 2024 event, Buildin' Buildings: RE Development, put three Asheville developers on stage to explain what it actually takes to turn a piece of land into houses. At The Mule at Devil's Foot Beverage, 156 attendees heard from Jonathon Zetterholm of 2020 Builders, Mike Romero of Amarx Homes, and Amanda Williams of JRO Investments. Romero put the stakes plainly late in the panel: without more supply, "guys like me are going to start looking outside of Asheville... this is just going to be a place for millionaires."

Key Takeaways

The median Buncombe County home sold for $440,000 in month 47 of the local market report, with a median 29 days on market across all price ranges.
Jonathon Zetterholm's 2020 Builders had 74 homes under construction, about 80% of them single infill lots, built by a 32-person team that aims to keep land under 10% of a home's sale value, though Zetterholm said that hasn't been holding lately.
Mike Romero's Amarx Homes targets a 16% to 20% land-to-house-value ratio and once spent a year and more than $100,000 on due diligence for a property his team ultimately walked away from.
Amanda Williams' JRO Investments, named for her three sons Jackson, Ryan, and Owen, sticks to infill subdivisions of six lots or fewer; its largest project so far has been 21 lots.
City fees can erase a small project's margin: Williams' team was charged almost $35,000 in paving costs for splitting one lot into two, and $30,000 to $40,000 for a mandated road widening and fire truck turnaround on a separate six-lot project.

The Market Zac Ruiz Set Up Before the Panel

Buncombe County's supply and demand imbalance framed the night. Zac Ruiz, who runs the Ruiz Report, told the room the county had been pulling homes off the market for three straight years before recently starting to add some back. He pointed to REMC.co data showing homes priced up to roughly $600,000 sitting on the active market for a median of 93 days, longer than the room was used to.

His point was structural, not seasonal: a long-running national deficit between people wanting to buy homes and homes available. The lever he pointed to was shifting the supply curve through zoning changes, building codes, and tax incentives, since land availability and construction costs sit mostly outside anyone's control. He closed by urging attendees to vote for development-friendly candidates in the March 5 local election.

What Buying Land Actually Costs

All three described due diligence as the part newcomers underestimate. Romero said his team once spent 12 months and over $100,000 on a property before walking away because the numbers never worked; on a project called Baker's Creek in West Asheville, he asked for 4 months of due diligence and ended up needing about 6. His process starts with an engineer, not the seller's price: what will the pro forma support, 30 doors or 50?

Williams said land is riskier than a house because its problems are hidden. A missing easement or the wrong road access can leave a parcel unable to do what a buyer assumed, with no fix after closing. Zetterholm, whose team only buys single infill lots, said water and sewer approvals raise a lot's value mainly by saving the next buyer time, though he would not put a dollar multiple on it.

Where the Red Tape Bites Hardest

Romero and Williams both pointed to city road and utility requirements as the biggest unplanned costs on small projects. Williams described subdividing one Asheville lot into two, adding a single house, and getting hit with nearly $35,000 in paving costs on homes that listed for $325,000, leaving little margin. A separate six-lot project on a city-maintained road required widening it, paving it, and building a fully paved fire truck turnaround, adding another $30,000 to $40,000.

Romero had two stories of his own. On a North Asheville project, the city took $40,000 from him in lieu of a sidewalk, then spent it on sidewalks elsewhere, which he called the wrong answer. On a current project adding eight homes, the city is requiring a full rebuild of an existing road plus a turnaround. Ruiz tied the frustration to an earlier AVLmeetup, saying the Q&A at the Affordable Housing meetup "got a little spicy" between city and county representatives.

Williams and Zetterholm framed the fix as relational as much as political. "You're an obstacle navigator, that's what you do," Williams said of working with municipalities. Zetterholm agreed: once his team scaled past two or three houses at a time, "it became clear really quickly that we weren't in the homebuilding business anymore. We were in the people business."

Questions

How long does it take from under contract to ready to build? Williams said her projects typically run 6 to 12 months since JRO depends on outside builders for vertical construction. Zetterholm said his team can be in and out in 5 months on infill lots that already have utilities in place.
Can you give examples of unnecessary bureaucracy that slows projects down? Williams and Romero pointed to the paving, road-widening, and fire turnaround costs above, line items that can wipe out a small project's margin before a house sells.
What can realtors and sellers do to understand what their land is actually worth? Williams said zoning alone does not determine buildable density, so sellers need true comps: similarly sized parcels with comparable road and utility access. Romero described giving a realtor friend a rough door count before any listing price was set, since every developer runs land through similar underwriting math.
Is there a rough return on getting water and sewer approvals done before selling a lot? Zetterholm said he could not offer a specific multiple, but the approval work, especially a septic approval, mainly saves the buyer time, and a prepared lot will typically sell faster and for a little more.
What strategies help when dealing with city bureaucracy on a project? Romero said building direct relationships with city staff and bringing projects that make sense on their own merits works better than fighting the process. Williams said the goal is staying solution-oriented rather than discouraged. Zetterholm added that remembering city staff are people, not an institution, changes how the conversation goes.

All three closed by describing how to get involved: Romero pointed land brokers with development-ready parcels to Amarx Homes; Williams said JRO was opening consulting work and lower-entry investor spots; Zetterholm said 2020 Builders wants land or investment partners for projects under 10 lots.