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  • Writer's pictureRichard Mandell

Stop Building Golf Courses Solely To Sell Back Yards

For years now I have always wondered what will happen to all the old houses people are leaving to go to the hundreds of thousands of homes that were being built in the past few decades, particularly the ones along the fairways of America. Did you know that, on average, no more than 40% of all people who live on a golf course actually play the game? Is it any wonder why the golf business is in freefall when the majority of golf courses built in the last few decades were built primarily as an amenity to sell surrounding real estate? Countless projects have crossed my desk with residential development as the primary driver. So here’s a novel idea to stimulate the golf business without getting a bailout from somewhere else: Do not build a golf course to sell backyards, build it to sell green fees!

Granted, I have been involved in my share of golf course development projects. I have grappled with the dire realization that a particular golf course project may not see the light of day if there are not enough yields on the lot-selling side to justify a developer’s profit. I have first-hand realized that shifting a hole to one side or the other may mean the addition of ten more lots at the sacrifice of a better golf hole. Without adjustments like these, there may not be a golf hole at all and that strikes at the very core of our profit-margin (the moral dilemma of the golf architect).

The modus operandi for many developers is to build the golf course first and foremost based upon the need to sell homes. The secondary need for golf is often glossed over by enthusiastic authors of feasibility studies who don’t want to deliver bad news to the one who is paying their fees. Once the development is sold-out, the developer walks away based on a variety of exit strategies which leave the golf course to a third-party or even the homeowners themselves, which brings me back to an earlier point: If just forty percent of all homeowners who live on a golf course play golf, is that enough demand to keep the golf course floating? Obviously there is not in many cases.

Yet in many cases there is a proper demand for golf beyond the gates of the community. In fact, I have a new residential golf course project sitting on my drawing table in Lynchburg, Virginia where there may just be sufficient demand for residential development and golf. It is in the over-saturated markets where developers continue to compete for home-buyers where the game of golf suffers. In those locales, demand quickly falls below supply. As soon as one golf course is built to sell homes, the next community will most certainly be at a greater disadvantage to create not only its own demand, but avoid sucking demand from its neighbors as well. Then both golf course developments fail as the developers continue to close on lots.

To make matters worse, the depth of infrastructure that goes into golf course construction continues to rise in order to offer a backyard which is more impressive than the one down the street. We all know that golf courses have been in a tug-of-war to outdo the competition from a golfer standpoint (focusing on aesthetics more than the game itself) for years. But at least those decisions were being made for the ones who would actually use the facility, not the passive neighbors.

Whereas many golfers could do without perfect emerald green conditions (and in the future will be forced to do so), few of those golfers as homeowners would be willing to sacrifice views and greenery. The fact that only a few of these golfers actually are homeowners creates a situation that drives up construction and maintenance costs, thereby driving up greens fees and other expenses for the golfer more than the homeowner. It is a vicious cycle in which the golfer gets burned first. But now even the homeowner is getting burned by their backyard views turning brown and overgrown. The Great Contraction is underway and those who bought into the golf course as a backyard are not going to be happy. I feel for them and have little solution to offer in regards to preserving that picturesque golfing carpet.

But I do have a solution that will help golfers and homeowners alike: The re-introduction of the community park, green space, or open field (take your pick). By converting struggling golf courses into ribbons of green space for homeowners to pursue other recreational pursuits, the golf supply will slowly shrink, forcing demand to rise to healthier levels and allowing remaining golf courses to become profitable. The ones left with the conversion will realize some maintenance costs, but not nearly on the same level as what it takes to maintain a golf course that not only must remain green for the neighbors, but pristine for the golfers as well. With general open space as a backyard, the percentage of residents who can use the ground will probably rise from the forty percent user level to possibly full capacity.

The bottom line is that we need to really study the attributes of a golf course as a way to sell homes, regardless of the current housing crisis. I am not a sage economist by any means, but it seems to me that when you create a facility (any facility) whose primary user is NOT the same person you are building that product for, it is probably not the best business plan. Unfortunately for me and my golf course architect cohorts, that means less feeding at the development trough. But for the overall health of the game, it is worth it in the long run. There will still be residential golf courses to be built, but as long as they don’t cannibalize themselves the game will hopefully survive. For the courses which are going down, a re-positioning as an urban park or a different type of golf facility should satisfy many and not just the few who were making a profit at the expense of the game.

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