Building is in full swing on Thursday, September 14, 2017, at Azure at Esencia in the North Walk project at Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are interspersed with larger units and are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

Building is in full swing on Thursday, September 14, 2017, at Azure at Esencia in the North Walk project at Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are interspersed with larger units and are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

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Building is in full swing on Thursday, September 14, 2017, at Azure at Esencia in the North Walk project at Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are interspersed with larger units and are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

Charlie Ware, director of governmental and community relations at Rancho Mission Viejo, looks over a map of Azure at Esencia in the North Walk project at Rancho Mission Viejo on Thursday, September 14, 2017 in Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s which are set within the buildings at right. The one-bedroom, 700 square feet units are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

Brandon Marks, assistant superintendant works at Azure at Esencia in the North Walk project at Rancho Mission Viejo on Thursday, September 14, 2017. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)



Building is in full swing on Thursday, September 14, 2017, at Azure at Esencia in the North Walk project at Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are interspersed with larger units and are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

Site Manager Matt Maier, left, is part of the busy activity at Azure at Esencia in the North Walk project at Rancho Mission Viejo on Thursday September 14, 2017. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

Building is in full swing on Thursday, September 14, 2017, at Azure at Esencia in the North Walk project at Rancho Mission Viejo. New Home Company, one of the region’s top luxury-home developers, is building homes priced the low $300,000s. The one-bedroom, 700 square feet units are interspersed with larger units and are the lowest priced units in this dense master-planned community with 17 units to the acre. (Photo by Ana Venegas, Orange County Register/SCNG)

The New Home Co. is building $350,000, 700-square-foot units in Rancho Mission Viejo. (Sketch, courtesy of New Home Co.)

Coming this fall to Orange County: New residences, built by one of the region’s top luxury-home developers, priced around $350,000.

That’s not a typo. It’s not a marketing gimmick. Nor is it some in-fill urban project located in a questionable gentrifying locale.

Inside New Home Co.’s 80-unit Azure project at Rancho Mission Viejo in south Orange County’s foothills lies what could be a turning point in the quest for more affordable housing in the region. Sales are scheduled to begin Nov. 12.

Yes, the eye-catching price is for just 10 townhomes in this densely built community. Yes, these units are small: One-bedroom, 707 square feet with a one-car garage.

But change starts slowly.

Larry Webb, New Home Co.’s chief executive, is a veteran local builder whose companies are known for their deft touch with high-end housing. The last time New Home Co. was making a market breakthrough it was quickly selling out Lambert Ranch in north Irvine, one of Orange County’s earliest luxury developments in the post-recession era.

So, how did Webb’s team switch gears to create such apparent affordability? (FYI, Webb has built at all price levels in his career.)

He says affordable housing can be simple.

“It’s all about compromise,” he says.

On all sides, he says.

Landowners and creators of master-planned communities must be reasonable with pricing and construction requirements. City planners, lawmakers, and neighbors have to be sensitive to the benefits of expanding housing needs. Development critics have to acknowledge that density will grow, with or without new housing, as long as the region remains a jobs magnet.

Affordable housing advocates have to tone down their finger-pointing, too. Plus, it’s key that house hunters must have reasonable expectations for what can be constructed at lower prices. It’s not a niche for everybody.

Look, “affordable” detached single-family homes on the cul de sac with a pool will not happen. But there are creative ways to offer cheaper housing to buyers who embrace those realities.

And, yes, Webb willingly admits his building industry must rethink how they do things, too.

“We’ve all gone over the top,” he says of the industry’s pursuit of the deep-pocketed house hunter. “We’re trying to be more sensitive … we are listening to people.”

Webb said developer Rancho Mission Viejo deserves much of the credit for Azure for its flexibility with land-use and design rules for its NorthWalk neighborhoods, which feature lower-cost options.

Paul Johnson, a Rancho Mission Viejo senior vice president, says New Home Co.’s willingness to push the price envelope downward was a good fit for NorthWalk, a densely packed but amenity-filled community.

“Attainability is an important issue for us,” Johnson says.

In a county where residences sold for a median $675,000 in 2017’s first half — and new homes went for $829,000 — Azure could be a trendsetter. Consider new townhomes in a densely built project in Irvine — Parasol Park at the Great Park — start high in the $500,000-range. Countywide, ReportsOnHousing found only 254 of 5,544 existing properties for sale this week were listed below $350,000.

On top of Azure’s 10 one-bedroom units, 20 townhomes will have two bedrooms and 1,158 square feet of space priced in the low-to-mid $400,000s. The remaining 50 homes will start in the high $400,000s.

And New Home Co. is also building 72 paired homes in the nearby Cobalt neighborhood with two or three bedrooms up to 1,575 square feet priced “from the low $500,000s.”

But Webb also reminds me Azure isn’t charity work, saying “it’s fair to want to make a profit.” And as a public company reporting to Wall Street, many eyes are on New Home Co.’s bottom line.

So when builders often bemoan the high costs of local construction, how can New Home Co. make Azure fly financially?

The financial secret sauce is a fast turnaround. More expensive housing projects have fatter profit margins, yet it can take years of costly planning and marketing to cash in on pricey lots. Time is money, especially when the financial backers of homebuilding efforts want solid returns on their money.

At Azure, Webb is eyeing the project’s alluring “internal rate of return” — a yardstick incorporating timing of sales into its profit scoring.

How does that work in real life? Think of supermarkets, businesses that thrive in an industry with razor-thin markups by enjoying repeated, quick turnover of inventory. So New Home Co. is betting these units will sell quick.

Webb thinks relatively uber-low-end homebuilding is a growth opportunity, and not just in Orange County. His team is scouring Southern California for similar situations. Near Rancho Cucamonga, there’s a chance New Home Co. can do something like Azure in the mid-$200,000-range.

And others have taken notice. Like Emile Haddad, CEO of Five Point Communities which is developing the Great Park. He knows of Azure. And he’s impressed.

“Larry Webb is a great product guy. His products are ones I usually can’t wait to see,” Haddad says.

FivePoint is exploring its own spin on Azure at the Great Park. Haddad said his designers are working hard to get starting prices below $400,000 — tossing a friendly barb at Webb’s seemingly lower prices by saying comparing pricing is like looking at car models on dealership’s lot.

“Does it include windows and doors?” he jokes.

Take a moment, Orange County, please! We are hearing two local home-building heavyweights happily talk about building homes at working-class prices.

To me, that offers far more hope for affordable housing for the region than any academic study, statistical index, blue-ribbon panel, bureaucratic rethinking, legislative action or ballot-box initiative.

“We’ve done tons of research to find out what people are looking for,” Webb says. “What would they need to move out of their expensive apartments?”

So ponder Webb’s insistence on compromise.

Just build it.