By QUEENA SOOK KIM
Ryder Homes Inc. has been building houses in the San Francisco Bay area for more than 35 years. But now it believes its future depends on getting out.
Like many small builders, the closely held Walnut Creek, Calif., concern says restrictive development regulations are making it too expensive to do business in metropolitan areas. Those same regulations, and a host of other trends, however, are making it easier for bigger, well-funded home-construction firms to dominate the industry.
Ryder cites a project located 50 miles north of San Francisco. After spending two years and hundreds of thousands of dollars to acquire permits and to meet environmental regulations, Ryder might have to abandon the project because new wetland requirements could tie up the project indefinitely.
"We definitely need to look elsewhere for new projects to maintain the size of our company," says Jay Ryder, president and the son of the founder. "We'll go somewhere, where it's not so difficult."
But while such obstacles are chasing small home builders away, the nation's largest home builders are finding restrictive federal, state or local antidevelopment regulations to be a blessing of sorts. As small and midsize builders are priced out of metropolitan markets, large publicly-traded home builders with deeper pockets, such as Centex Corp., Toll Brothers Inc. and KB Home, are gaining greater control of a limited supply of land.
For consumers in regions like New Jersey, California and the District of Columbia, this phenomenon is contributing to higher house prices, says Stuart Gabriel , director of the University of Southern California's Lusk Center for Real Estate. "Regulations, coupled with the strategic release of product by builders, make for increasing house prices and could lead to significantly diminished consumer choice," he says.
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