When a neighborhood gets developed to the max, infill lots are all that's left to develop without either pushing outward or demolishing another property. In today's world, where cities increasingly embrace vertical construction and people of various demographics are learning to live in micro apartments, infill lot development is often deemed a sustainable and socially responsible development option.
What is an infill lot?
The National League of Cities info page describes infill lot development as "filling in the gaps" of already built-out areas. Think of a city or a suburban block where every parcel of land has a home or commercial building, except for one vacant lot -- perhaps a lot where something was torn down, or perhaps it used to belong to a neighboring business and was split off. That vacant parcel of land is an infill lot.
Do all infill lots allow for mid-rise development?
Some but not all infill lots allow for mid-rise development. It depends on the location, the existing zoning, and in many cases, whether the community or the people in charge of the district think that's the best use of an infill parcel.
The arguments in favor of infill development
From the sustainability and social impact standpoints, there are a few key arguments in favor of infill lot development. Building something useful in a hitherto vacant lot prevents blight and brings vitality to that part of the neighborhood, according to the Sustainable Development Code. It is an opportunity to add whatever type of building the community needs: multifamily housing, high-rise parking, mixed-use, etc. It actually is said to conserve land, because you're literally developing inward instead of pushing out into new, fresh space.
And from the economic standpoint, of course, it makes all the sense to get use from a parcel of land that's just sitting unused.
Should you buy an infill lot?
There's no set answer to this. It depends on whether you have the resources, expertise, and wherewithal to build in a place that's already densely developed and that has an existing infrastructure. It also depends on the size and scope of your potential project.
If you want to build a single-family home on the only remaining lot in a neighborhood of single-family homes, then sure, buy and build if you have the resources. There is a precedent, and not much of an argument against it. In fact, these types of communities often prefer not to have vacant lots as they're considered eyesores that draw vagrant activity.
However. Building from the ground up on infill lots in congested urban areas is more complicated. It may entail obstructing streets and sidewalks, creating debris and mess that residents won't like, and working at odds with neighborhood restrictions. While experienced developers can sometimes work with community planning leaders and neighborhood stakeholders to bring something needed and exciting to an infill site, others may be delayed or frustrated for a number of reasons.
Think about the following questions before you decide to buy an infill lot:
What's your expertise as an investor, developer, and/or builder?
And does this expertise align with what you're planning to do on the site? If you're thinking of building a mid-rise mixed-use building, have you worked on such a project before? Or are you simply thinking that way because you've seen other mixed-use buildings do well in the neighborhood?
Does your project bring value to the neighborhood?
Whatever you're hoping to do in the infill lot, is it something that will provide unique value and that should be in that site rather than anywhere else? Does the neighborhood want it? In a neighborhood that has a vocal residents' association, the developer can't build autonomously -- the neighborhood has to support it. If there's no real reason the project needs to go into that parcel, there may be less complicated, less densely populated sites for it.
Is the zoning on your side?
This might be the most important thing. If you want to build something that current zoning doesn't allow -- even if you've been told that the neighborhood will see changes soon -- you're making a gamble. You could likely have a long, stressful period of waiting and negotiating and pleading your case before you even get plans approved.
Even upzoning -- a change that allows higher vertical building -- is highly controversial in many places, and rezoning can literally change the face of a neighborhood.
All infill lots are not created equal
While infill lots can be a great investment, especially if the new proposed building aligns with zoning regulations, these parcels of land are not all interchangeable. Smart investors look at multiple options to decide which infill lot is the best fit for what they want to do.