Development sparks fear of rental houses

Developers of a planned subdivision off Yandell Road agreed to work with the Madison County Board of Supervisors to implement covenants to make it harder to rent homes.

The action followed a lengthy discussion on Monday over everything from the reputation of the national home builder to the sizes of homes. 

Woodgate subdivision, which will feature approximately 379 homes ranging from 1,500 square feet and up, is going to be built by D.R. Horton, a national homebuilding company that has received negative publicity over the last few years for allegations of sub-par construction. The company has been involved in a number of lawsuits. 

Developers of Woodgate include Carl Sandberg, Nick Gullette, and Parker Sullivan, all of Madison County.

Supervisors unanimously approved a preliminary plat for the subdivision back in March, and are seeking approval of the final plat. However, concerned citizens living in neighboring subdivisions are worried about D.R. Horton as the homebuilder, the size of the homes, the potential for the new homes to become rentals, and the overall impact on existing home values. 

The developers and representatives of D.R. Horton answered a barrage of questions from both supervisors and citizens for over an hour on Monday. 

Before the discussion even began, Board Attorney Mike Espy cautioned supervisors about what they say, alluding to the possibility of a lawsuit from the developers if the board were to go as far as rescinding the preliminary plat.

“I see a stenographer, that’s fine,” Espy said. “The board did not invite or hire the stenographer. I assume it’s from developers. There’s a lot of inferences. As your lawyer, whatever you say, your words will be taken down. It may be for litigation. It may not be.” 

Espy warned supervisors of “rezoning, reliance, and recension.” 

He said this was not a matter of rezoning, so the board can’t take into consideration things like a change in the neighborhood. He said the developers relied on the unanimous approval of the preliminary plat to get started with ground clearing so the county could be liable for damages if the board ultimately decided to rescind the plat. 

“There will be a measure of damages if this thing ever ends up in court, I’m sure,” he said.

District 2 Supervisor Trey Baxter asked Espy how the county could regulate whether or not these houses can be leased, with Espy saying there would have to be language in the covenants. Covenants are prepared by the developer, not the county.

“If you try to impose these restrictive standards on them, they’re going to ask if you did it to anybody else,” he said. 

Sandberg and Gullette told supervisors that the intent was not to create a build-to-rent neighborhood, meaning that the goal is to sell these homes to homeowners and not for rental property. 

But, they said it was illegal to put a blanket restriction on rentals because it would violate federal law and certain language would also impact the ability to receive an FHA or VA home loan. 

Board President Gerald Steen said that there are subdivisions in the county that don’t allow for any rentals at all. Baxter said the municipalities have strict guidelines for rentals. 

“We don’t want to do anything that’s illegal from a Fair Housing (Act) standpoint or prejudice to a class of individuals,” Gullette said. 

Gullette said that even if a neighborhood outright bans rentals, that doesn’t mean it’s legal, just that it hasn’t been challenged. 

“We don’t want to do anything illegal with this development,” he said. 

Sandberg said that he was unable to find any neighborhoods with outright bans and only a handful with restrictions, such as a fee and length of occupancy requirements. 

David Humphries, an attorney with Carson Law Group representing the developers, said he was sure they all could come to an agreement on covenants to ease concerns. 

“I think that these guys are perfectly willing to take a suggested covenant — take it and consider it and most likely incorporate it,” he said. 

Humphries then asked the board to treat other developers the same way, saying recently two other subdivisions were approved without discussion or asking for rental restrictions. 

He said everyone needs to be on “the same playing field.”

Scott Whitehurst, the regional president for the Gulf Coast region of D.R. Horton, said they, too, aren’t looking at this becoming a rental neighborhood and that everyone seemed to be on the same page but saying different things. 

He also tried to alleviate concerns from the board members and others about the company’s recent negative publicity. 

Whitehurst said that they use the same local subcontractors and local suppliers as other builders, a sentiment echoed by District 4 Supervisor Karl Banks. 

“We have built a million houses,” Whitehurst said. “Have we screwed up? Yep. Do we always try to make it right? Yes. That’s what we strive to do, a little better than we did yesterday. We’re not perfect, but we try to be.”

Sandberg said he was aware of the negative publicity and ended up touring a development in Alabama that Woodgate would be modeled after. He said he even built a house in Sweetbriar Plantation where D.R. Horton has built homes. 

Banks said in his over 30 years as a county supervisor, the board has never asked a developer who was going to be building the homes, and that the issue with Woodgate all centered around D.R. Horton and national negative press. 

“For some reason in this development, these developers have been getting hit upside the head,” he said. “I feel sorry for the developers.”

The lengthy discussion didn’t leave many assurances for concerned citizens though. 

Regina Edwards, a resident of Deerfield, said she has read all the negative publicity and just doesn’t “trust” D.R. Horton “right now.”

“What are you going to do to ensure that our property values do not depreciate with the Woodgate development,” she asked the board, before saying if they do lose home values the board and developers could expect a lawsuit to be filed. 

She is also concerned about the traffic situation on Yandell Road.

Mona Crothers brought up mold issues in D.R. Horton homes and asked if a D.R. Horton employee would move into a D.R. Horton home. She also wanted to know the number of houses that will be over 2,200 square feet. 

Whitehurst said they have had mold problems in the past, mainly in coastal areas, but they are familiar with the local climate. As far as the square footage of homes, he said the minimums are the minimums but the market will ultimately dictate what is built. 

Sandberg said he hopes the entire development is completed within the next 8 years.