Washington-based Conner Homes Co. says it is approached by people fearful that new zero-lot communities in the Seattle area "will turn into slums," said president Charlie Conner. "Hardly. When the average unit is $350,000 and 80 percent of them are taken by Microsoft workers, that's not a concern. Smaller doesn't mean an inferior product."

Zeros a plus for builders, too
Value builder Choice Homes wanted to build its standard economy home product in Atlanta, but couldn't find reasonably priced lots, said Steve Wall, president of the Texas-based firm. So Choice built zero-lot liners instead, at a ratio of eight to nine per acre, featuring amenity centers with parks, pools and other common facilities. "We subsequently found out we were becoming competitive with conventional value homes in the area," he said.

Retro features, such as central back alleyways, are popular in zero-lot design. In Buford, South Carolina, about a dozen new narrow-lot communities have sprung up in the past few years that are somewhat reminiscent of old-fashioned city neighborhoods, said Coolhouseplan.com owner Raczkowski. "The homes are close to the sidewalk and they have Colonial-style porches where people will sit out and visit," he said. "That draws the community together. You are almost obligated to say hello to your neighbor ... and that can't be bad."

While prices on the small-lot product are higher on both coasts and other desirable geographic areas, zero-lot line houses in the Atlanta and Dallas markets start at just over $100,000, says Wall. In Memphis, the average sales price for an approximately 1,500-square-foot zero-lot-line house built on a 3,750-square-foot parcel was $155,994 in 2002, according to the Memphis-based real estate tracker, Chandler Reports. Buyers will pay $300,000 or so in metro areas along the West Coast, said Conner.

Barred in some places
While many cities don't bar zero-lot lines homes outright, some have imposed mandatory setbacks of 25 feet or so from the street, making small-lot development implausible. But some cities are starting to relent. That's because tax revenue on a cluster of homes compares very favorably to just one or two houses built on like acreage, Wall said.

In Washington, tough liability laws governing condominium construction have spurred development of many new zero-lot line homes and townhomes, Conner said. Most big cities in the state tightly restrict large-lot construction to save land, a trend he sees catching on elsewhere as growth-management and lot shortages become acute.

Some of Conner's zero-lot line developments are tucked into hillsides. "All the flat ground here is just about used up, so now we're having to be creative," he said.

As the older home-owning population continues to age, there will be even more gravitation to small lots, Wall predicts. "People will have that one-time opportunity to sell that family house, put some of the money in a smaller one and build up a retirement nest egg in the process or just giving some of it away to their kids," said Wall. Currently, single women who are heads of households constitute 40 percent of Choice's zero-lot line buyers, he noted.

Added Conner: "More people in general are being drawn to these homes because they are valuing their free time, since they seem to have so much less of it these days."

Steve McLinden is a freelance writer based in Texas.