From the Ground Up

A home with a white picket fence, behind which a dog and children play on a mantle of green grass is the American dream. Long Island has fostered that archetype since the end of World War II when it became one of the first planned suburbs, and has been gathering a wide range of house styles and locations ever since. There are modest Cape Cod-style houses in nearly every town, sandwiched between a layer of bungalows near the water on the South Shore and the exclusive estates dotting the hilly Gold Coast.

Still, building a house on an empty lot has a unique allure. Finding that
perfect piece of land and erecting a home on it isn’t easy—even for those with an ample budget. It’s a big job and it requires a team of professionals helping navigate hundreds of tiny details and decisions. For those with the gumption to see it through, it’s the chance to not just live the dream, but to live your dream.

Assembling a Team and Acquiring Land

Rush hour on the LIE might lead most to believe there isn’t room for more homes or people on Long Island, but buildable lots can be found throughout both counties. They range from grassy and graded chunks of land in well-established neighborhoods to rough and tumble untouched plots cleaved off larger tracts. Before ideas of grandeur take hold, know that the towns set strict parameters when it comes to land and the allowable square footage of the finished project. Turning to a group of professionals— each familiar with a specific set of rules—helps ensure the house fits on the parcel in question.

Michael Stanco, a Douglas Elliman real estate agent who specializes in land purchases, works on the North Shore where plots generally run two acres or more. That affords plenty of room and privacy, but at a price. “In Old Brookville we sold one in a community that was developed 15 years ago but where this parcel of land was never developed and it was right in the middle of high-end homes,” Stanco said “The original owner bought it 15 years ago and held on to it thinking it was going to be worth much more and he was right. My client ended up buying it for $1,162,500.”

The townships across Long Island dictate lot sizes and experts agree they tend to start at a half acre. $200,000 gets you a wooded lot just over a half acre in Ronkonkoma, adjacent to a state-owned bird sanctuary. On the Gold Coast a two-acre plot in Laurel Hollow, within the Oyster Bay-East Norwich Central School District, has a paved road and water views for $1.2 million. “It’s typically priced the same way a house is, mostly by comps,” said real estate agent Kristen Rishe, broker-owner of North Fork Real Estate. “We look at what other comparable lands have sold for, location, proximity to beach, proximity to town, size of property—so it’s valued in a very similar way to a home.”

An empty lot within an established neighborhood is always an easier project to take on because utilities are usually close by. Part of building a house requires proving to the town where site improvements like gas, drainage, water, sewage and the driveway will be located and when most of that is roughed out already it makes getting approvals easier. If that dream custom home will sit on a beach, that can be the most challenging build. “Waterfront is another layer of expertise,” said real estate attorney Patricia Moore, partly because the discussion involves the Department of Environmental Control and stiff regulations regarding proximity to the water. But even marshy land adds to the difficulty—a proper foundation in unstable footing might cost an extra $150,000, blowing the budget.

The time between closing on land and starting the home building process can take months to years. Insuring the new asset typically requires a small tweak to an existing homeowners insurance policy. “What you’d do is extend the liability from your homeowner’s policy to cover the land and then you can add the land to your excess liability policy in addition to that,” said Kevin Lang of Lang Insurance. “An excess liability is a laymen’s term for an umbrella policy. Normally it’s $100.”

Pitching the Town

An architect familiar with the town’s building codes typically knows the three key numbers that dictate the size and shape of a potential house. The setback legislates how far away the house has to be from the street, property lines and the neighbors. The building envelope is the maximum three-dimensional space a plot can tolerate. And lot coverage essentially determines how many square feet the house can be, though some municipalities also lump walkways, driveways, patios and other built structures, like a shed or pool house, into this figure. Soon-to-be homeowners either have a specific style in mind, and will often ask an architect to evaluate a potential piece of land to determine its tolerances, or will work within the town’s parameters after acquiring the land.

Working with an architect familiar with the town helps with everything from buying the right piece of property to submitting a design that won’t cause uproar with the neighbors. “I had one client send me the survey of a nine-acre plot and you could only really build on about two [acres] of it because of all types of preserves and other restrictions,” architect Joseph Scarpulla said. “So the actual building area was quite limited for what the client wanted and we ended up walking away from it.” The architectural review process is a public one, meaning anyone living close to the location can weigh in on the design. “Clients sometimes complain about the process, but I say, ‘look, this system is in place so we don’t build Taj Mahal next to a small house,’” said architect-builder George Sudell.

Few things halt an approval like a variance, where you ask the town to approve something that is typically against the code. They range from small issues, like seeking permission for a slightly larger deck that might come a bit too close to the neighbor’s yard, to bigger issues, like expanding the footprint of the first floor to accommodate a bedroom for older family members. Regardless, the town needs to hear the justification behind the change. “Each variance has an application fee and requires the applicant or their lawyer or architect to establish the reason behind the variance,” Moore said. “And it can’t be, ‘Oh because I want it. I want my fifty by fifty-foot deck on a ten by ten-foot house.’”

In the run up to having plans approved, most homeowners would do well to understand how the home will be taxed. “The taxes on a piece of land don’t usually go up just because it changed hands,” said Dale Allinson, partner in Certilman Balin’s real property tax certiorari practice. “The taxes change once the home is finished. But you can bring your plans into the assessor’s office to get a ballpark of what the taxes will be using the building plans.”

Getting It Built

Architects generally help send a homeowner’s project out to potential builders, one of the last steps before securing a building permit. A reputable builder will have liability and workman’s compensation, but extra insurance for this endeavor is always a good idea. “The homeowner should be made additionally insured on those policies,” Sudell said. “I make the homeowner additionally insured. In other words if someone fell and hurt themselves on my project and there was a lawsuit my insurance would have to defend the homeowner and me.” Lang advised buying a builder’s risk policy to cover things like fire.

Once the crew shows up, the process of building a new home is similar to a large renovation, strung out over 10 to 12 months. In the Northeast weather plays a big part in the efficiency of a crew and oftentimes is the cause of delay— which Sudell said is typically not a big deal so long as builder and client communicate. “Spring is a good time to start, you’ve got all summer and you really want the shell [building’s exterior] to be closed up by the fall or winter,” Scarpulla said. “We do start in the fall a lot because people don’t want to start in the summer; they’re vacationing or their kids are off from school. I’ve done projects when we started in November and went throughout the winter. We heated the foundation, we had heat going and we just built right through the cold weather. It is doable, but it’s costly.”

The builder provides a work schedule to keep tabs on progress and also sets the payment schedule. There is a wide range of payments—from dozens of little weekly ones to a handful of large installments— with a balloon payment at the end. Sudell says the former protects both builder and homeowner. “I advocate whether I’m building it or someone else is building my design, I want multiple smaller breakdowns,” Sudell said. “It could be weekly or biweekly. On a $500,000 job I might have 35 payments of $10,000 to $12,000 each payment. It’s a cash fl ow thing. I was doing a half-a-million-dollar job in Westbury and halfway through, the homeowner ran out of money because they were banking on a 401k cash out, which lost value. But when I looked at my books we only had a spread of $4,000 between us, so I was able to walk away and resume when the finances picked up.”

Even the best laid building plans and schedules will have a hiccup or two along the way: a window arrives broken, framing material is damaged on delivery and tiles arrive chipped. In most instances the responsibility to resolve the issue is between the builder and his purveyors, and rarely involves the homeowner. “That argument with my supplier should have nothing to do with the homeowner at all,” Sudell said. “They shouldn’t hear or see that and it’s completely independent of them. The homeowner is saying to me, ‘Look, I’m paying you to give me a finished product that’s of the quality we discussed.’ That’s their main interest.”