Why Small Lot Development Works

Article by Matt Adams (The Land Group) and Chris Danley (Vitruvian Planning)

Idaho is short at least 55,000 attainable homes. American Enterprise Institute analysis suggests at least 12,000 more starter homes could be built across the state each year if local lot and zoning policy got out of the way. Those numbers can feel abstract until you look at what’s already been built on the ground, in three very different Idaho communities, once the lot-size math was allowed to work. We want to make the case for small lot development the way we’d make it to a city council not with theory, but with three real projects that are either built, entitled, or under construction right now.

This isn’t a new idea for Idaho.

Walk through the older neighborhoods of downtown Nampa, Sandpoint, or Coeur d’Alene, or through Boise’s North End, and you’ll find block after block of homes built 100 to 125 years ago sitting on lots close to the size S1352 now sets as a floor. A small home near 18th and Bannock in Boise, for example, sits on a lot of roughly 1,600 square feet, about .04 acres, built decades before any city wrote a minimum lot size into its code.

Coeur d’Alene’s own planning department makes a version of this same point. In its FAQ on “Coeur Housing,” the city notes that missing middle housing includes historic examples of large homes converted into four or five units, the kind already found throughout its older downtown neighborhoods. Coeur d’Alene’s Garden District, its earliest residential neighborhood, was platted on a tight grid with consistent setbacks between 1886 and 1974, exactly the kind of compact, walkable pattern this article argues for.

None of this is a new housing product - rather, it’s a request to let cities build what Idaho was already building before mid-century zoning codes made it illegal.

Bonneville Commons, Pocatello: What infill looks like when the code gets out of the way

For nearly two decades, the old Bonneville Elementary School site sat shuttered in the middle of a Pocatello neighborhood, a two-acre infill parcel doing nothing for anyone. NeighborWorks Pocatello, working with The Land Group and Myers-Anderson Architects, turned it into 26 units of high-quality housing, an infill density of roughly 13 homes per acre on a lot most cities’ codes would have restricted to a fraction of that. The design team spent six months studying housing inventory gaps, in-migration trends, and stagnant local wages before laying out a single lot line, then spent three months working through a municipal code revision process alongside the city, and 18 months in participatory planning with the Bonneville neighborhood before the project was entitled. The result won a Planning and Analysis Honor Award from the Idaho/Montana Chapter of the American Society of Landscape Architects, and it left Pocatello with an amended infill development code that makes the next project easier than this one was.

The lesson isn’t that every city needs a three-month code overhaul for every infill site. It’s that Pocatello’s code, like most Idaho cities’ codes, wasn’t built for small lots until someone did the work to fix it, and the moment it was fixed, 26 homes appeared on a parcel that had produced zero for twenty years.

Cole Bluff Cottages, Boise: How far a lot can actually shrink

NeighborWorks Boise’s Cole Bluff Cottages, on West Fairview Avenue, is the clearest illustration we have of how much room most codes leave on the table. Boise’s C-2D zoning district calls for a minimum property size of 5,000 square feet per dwelling unit and a minimum street frontage of 30 feet. Cole Bluff was approved at roughly 933 square feet per dwelling unit, with zero feet of required street frontage on interior lots, a mix of duplex and triplex cottage buildings arranged around shared drive courts instead of individual street-facing lots. The project used a duplex and triplex building form on individually-owned small lots, that only worked because the city created a pathway, in this case a planned unit development process, that let the site plan justify a dramatically smaller footprint than the base code allows.

NeighborWorks Cascade: Small lot development works in small towns too

NeighborWorks Boise’s project in Cascade, Idaho, a mountain town of roughly a thousand people, on a third-of-an-acre infill parcel on North Idaho Street, fits eight units on lots ranging from 995 to 1,698 square feet, with front setbacks reduced to 8 feet from the code’s 20-foot standard and side setbacks reduced to as little as zero on interior lots. Cascade’s base zoning technically allows a 720 square foot minimum lot already, smaller than what many larger Idaho cities require. The constraint here wasn’t the lot size floor, it was the setback and configuration standards layered on top of it, the same pattern we see everywhere: the lot size conversation and the dimensional standards conversation are the same conversation. Once those standards flexed through a planned unit development, a small mountain town added eight income-appropriate homes on land that would otherwise have supported one or two.

Why the math works: Infrastructure, walkability, and land cost

Beyond the three projects themselves, there’s a bigger reason cities should care about small lots: it changes the underlying economics of a subdivision, not just the shape of it. Infrastructure gets cheaper per home. Roads, water lines, sewer, and stormwater systems are priced by the linear foot, not the rooftop. Spread that same linear foot of pipe under twice as many homes and the cost per home drops accordingly.

National research bears this out at scale: smart growth development saves an average of 38 percent on upfront infrastructure costs for roads, sewers, water lines, and other infrastructure compared to conventional suburban development, and some studies put the savings as high as 50 percent. It doesn’t stop at construction, either. More compact development also saves an average of 10 percent on the ongoing cost of police, ambulance, and fire service, because a single station or patrol route can cover more rooftops without added travel time.

On the revenue side, compact development generates roughly ten times more tax revenue per acre than conventional suburban development, which means the same city budget stretches further per mile of pipe it has to maintain. (Source: Smart Growth America, “Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development”) For a city worried about the long-term cost of maintaining infrastructure built for low-density sprawl, small lot development isn’t a compromise, it’s the fiscally conservative choice.

Post Falls just released a memo on its financial outlook, and one section demonstrates this larger point about value-per-acre. Smaller lots end up costing taxpayers less, by a longshot. The city partnered with Urban3 to map assessed value per acre across Post Falls, and the results echo what we’ve seen in other Idaho cities: dense, walkable development generates far more tax revenue per acre than typical suburban sprawl. In one comparison, a higher-density neighborhood produced $6M in value per acre compared to $2M for a lower-density neighborhood covering the same acreage, and big box retail came out net negative for the city compared to small downtown-style commercial. Their conclusion: low-density growth doesn’t generate enough tax revenue to cover its own infrastructure costs, while denser infill actually helps keep taxes low for everyone else. Lower density cities will end up needing to have much higher taxes, over time.

Small lots also build walkable neighborhoods almost by default. Cole Bluff and Cascade both used the same design logic: cluster the homes, shrink the private yards, and let shared green space and drive courts do double duty as gathering space. That’s not an aesthetic choice, it’s a byproduct of the lot math. When homes sit closer together, distances shrink between front doors, a bus stop, a corner store, or a school. Bonneville Commons’ 13-homes-per-acre density on a walkable, already-platted Pocatello street grid is a small-town example of the same principle a big city planner would use to justify a light rail stop. You cannot retrofit walkability onto quarter-acre lots after the fact nearly as easily as you can design it in from the start, and small lot standards are how that design gets unlocked.

It’s simple: smaller lots are also just inherently more affordable. Land is the biggest lever on attainability, because it’s usually the biggest line item. Nationally, the finished lot is the second-largest cost in a new home’s sales price, behind only construction itself. NAHB’s 2024 Construction Cost Survey found the finished lot accounted for 13.7 percent of a new home’s sales price (Source: NAHB, “Cost to Construct a Home Rose Significantly Over Last Two Years”), and in high-cost markets that share runs well higher. That cost is largely fixed per acre, regardless of how many homes sit on it. Split a $150,000 lot four ways instead of one way, and the land cost per home drops from $150,000 to roughly $37,500, before a single stud is framed. That is the whole logic behind Cole Bluff’s 933-square-foot lots and Cascade’s sub-1,700-square-foot lots: the same acre of dirt, entitlement work, and utility hookups gets divided among more buyers, and the savings shows up directly in the price tag, not in a subsidy program that has to be renewed every budget cycle.

What these three projects have in common

None of these are hypothetical renderings. They’re a former school site in Pocatello, a cottage court in Boise, and a small subdivision in a town of a thousand people in Valley County, and all three needed the same thing: a city willing to let the dimensional standards, not just the headline lot size, flex to fit a smaller footprint. Every one of them went through some version of a planned unit development or code amendment to get there, which means every one of them also proves the same point in reverse: without that flexibility, none of this gets built at all.

Idaho’s Starter Home Subdivisions law, S1352, takes what Pocatello, Boise, and Cascade each had to negotiate project-by-project and makes it the floor everywhere. For a qualifying subdivision of at least four acres, cities cannot require lots larger than 1,500 square feet. This is an opportunity for cities to encourage more small-lot home development - which is inherently more attainable in price. We shouldn’t wait for a developer to bring you a PUD application and then negotiate the dimensional standards from scratch, the way Pocatello, Boise, and Cascade each had to. The homes these three projects produced already prove the demand and the design solutions exist, and the infrastructure, walkability, and land-cost math prove why cities should want more of them.

Join us for our September Lunch + Learn to hear more about why small lot development works

Matt Adams (The Land Group) and Chris Danley (Vitruvian Planning) are hosting a virtual Lunch + Learn to share more about these unique projects and why small lot development works. This virtual Lunch + Learn will cover what constitutes “small lot” development, how to move projects forward, and the impact of small lot development for Idahoans.

Join us for Why Small Lot Development

📅 Thursday, September 3 · 12–1 PM MT (11 AM–12 PM PT)

💻 Virtual via Zoom · Click here to register.