Cape Coral, Florida, builder Mark Steinberg has been building in the Sunshine State for 27 years. But Steinberg was born and raised in the New York City area, and he hasn't lost the New York accent. And his latest homebuilding concept, the two-family "flex house," has roots in New York's heritage of multi-generational living.
"Down here," says Steinberg, "any kind of two-family is called a duplex." But what Steinberg has in mind is a little different from the standard Florida duplex. "In the five boroughs and the nearby suburbs," he explains, "we had what were called 'two-family homes.' And in some neighborhoods, I would say 30% of the houses were two-family homes, with a small apartment, either a guest apartment, a small rental, a mother-in-law apartment — something of that sort. That's the way a lot of people got through various economies, were able to afford nice homes."
This wasn't the same as the typical Florida duplex, which Steinberg describes as "Twelve hundred square feet on one side with a mirror image on the other side. They're nice, but it's not your dream house. They're great for first owners, they're great for retirees, but mostly they work for investors. They're for rental properties."
In visiting Europe recently, Steinberg says, he saw the same pattern he was familiar with from his youth in New York: two or three generations living in the same house, sometimes with a shared kitchen, sometimes with separate kitchens. So working with partner Raymond Masciana, a long-time builder and developer in the New York City borough of Queens, Steinberg evolved a duplex geared not toward side-by-side rental units, but oriented toward owner occupancy of one unit, with flexible use of the other unit depending on changing family circumstances.
"It fills such a need," says Steinberg. "The multi-generational term means many, many scenarios. The house looks like a mid-upscale house. The apartment has a side entry and its own one-car garage, and the larger unit has a two-car garage. They don't have shared use of the rear yard. So one strategy is, a young family can own the house and collect $800 or $900 a month for rent of the apartment, which subsidizes their mortgage."
Typically it would be the smaller of the units that is rented out, and the larger that is owner-occupied, says Steinberg. "But we have had folks coming in to our open houses that have told us every combination you could think of," he says. "Sometimes they are snow-birds, and they did the math and this would give them an apartment to use for the season, and they would still keep the other half rented and it would cost them nothing to have their winter apartment here." Other people have proposed keeping the use of the one-car garage along with the larger dwelling, for storage, garaging a motorcycle, or perhaps as a shop space.
"I have half a dozen poignant stories," says Steinberg. "One of the major targets for this is when you have a senior parent, and the choice between putting them into assisted living or helping them out and living together," says Steinberg. With the flex design, the adult child can support the aging parent, and if the parent passes away, the apartment can be put to other use. "It's not like you just have three empty rooms in your house now," says Steinberg.
Other examples come to mind: "There's a military veteran who wants his unmarried daughter and his grandchildren to move in. I have another client who has a developmentally disabled sibling who needs care. They want to take care of him, but they also need their privacy. And then, you know, some people just need the rent."
Steinberg's local market crashed hard during the 2008-2009 recession, and the economy there is still struggling, he says. But at this point, his problem isn't his product or the market — it's local regulations. Steinberg's floor plan depends on putting a pass-through door in what would otherwise be the party wall between the two units of the building, so that the building could be easily converted between one-family and two-family functioning. Steinberg says that Florida state authorities have ruled that the design is permittable as long as the opening has two fire-rated doors, with hardware allowing the occupants on either side to lock the door for security (the same solution that is typical in hotels). But the local building officials are being "sticky," he says. So for now, Steinberg has only been able to build one example of his plan — and that model does not have the pass-through door.
"Lee County approved it, no problem," says Steinberg. "But the city of Cape Coral is still withholding their approval, even though we got a ruling from the state telling them to approve it. They are very resistant to change. But the reality is, these would be the nicest homes in the neighborhood, because it's bringing family stability to some of these rental neighborhoods."
While much of the developed land in Florida is now controlled by a handful of large builders, Cape Coral still has plenty of lots available, says Steinberg. "What we're doing now is in-fill lots," he says. "The city of Cape Coral is itself a subdivision. It's the second biggest land mass of any city in Florida, and there are thousands and thousands of lots available in the city. Both waterfront and non-waterfront. There are 400 miles of navigable canal in the city. So there's an ample supply of land. But for this product, we have to find something that is zoned two-family. That brings the available lot supply down lower, but there is still enough to keep us going. And if the economy got hotter and the demand went up, we could get a ten-acre plot and make a mini-pod. But there is land available for in-fill. In fact, a lot of the national builders are doing in-fill."
Steinberg can't compete with big national builders on price. But he doesn't try to, he says: "We compete on quality, including ICF construction," he says. "You couldn't sell ICF to a big national," he says, "because they need to build cheaper. And I tell people, if they go into one of those communities, they're getting a good value. But if you pay less, you get less. If you pay a little more, you get a lot more."
