Land scarcity leads to increased costs, other challenges for homebuilders in Carmel


With undeveloped land becoming increasingly scarce in Carmel, area homebuilders are looking beyond detached single-family neighborhoods to increase the supply of for-sale dwellings in the city.

The Carmel Housing Task Force focused on the single-family housing market during its April 25 meeting at Carmel City Hall. Homebuilders Justin Moffett, CEO of Old Town Companies; Kelli Lawrence, CEO of Onyx+East; and Clint Mitchell, CEO of Estridge Homes; provided insight and answered questions from the task force.

Mitchell said that development and construction costs have increased in recent years, which have led to higher home prices in Carmel and elsewhere.

“It’s getting close to impossible to build affordable in new construction,” Mitchell said.

Because of high land costs and other factors, Moffett said the average cost to build a new home in Carmel is “eclipsing $1 million.”

“I don’t see a world where we would ever deliver a home under $750,000 in Carmel again, with the few infill opportunities remaining. Even an apartment costs $300,000 to build,” Moffett said. “The reality of the costs are driving us vertical. That’s where there’s going to be a generational shift in what’s tolerable. A lot of people have this idealized dream that they want the suburban ranch home or the large lot, but even a small urban lot costs us about $90,000 to develop just the site infrastructure – not the land.”

Lawrence said increased density could help lower price points. She said that other municipalities have made it easier to add accessory dwelling units, such as a detached cottage, on existing lots. These types of dwellings are often a fit for those looking to downsize or first-time homebuyers, two groups that often struggle to find homes in Carmel.

Task force member Adam Aasen, who also serves on the Carmel City Council, said the city considered an ordinance a few years ago that originally aimed to boost the number of ADUs in Carmel but that the measure did not pass.

“We scrapped it because there was so much pushback,” Aasen said, noting that the idea was challenged by Carmel homeowners and some elected officials.

During the public comment portion of the meeting, Carmel resident Maurice Sellers urged the city to upgrade infrastructure and amenities in areas of the city with less expensive homes – such as Home Place, where he lives – rather than allowing older homes to be purchased and demolished to make way for a new home that sells at a much higher price point.

“We feel like we’re being pushed out, and every time you build what we basically call a mini mansion on these properties, you make the neighborhood look disjointed. You ruin the atmosphere of a long-standing neighborhood,” Sellers said. “You already have affordable homes. If you would just improve our neighborhoods, and not redevelop our neighborhoods, that would really solve the problem.”

Task force member Christine Zoccola, who also serves on the Carmel Plan Commission, said that Carmel has older “neighborhoods that are worth preserving” and that it is an aspect the task force should consider as it puts together recommendations.

The task force is set to discuss multi-family housing at its next meeting, set for 7:30 a.m. May 23 at Carmel City Hall. Learn more and view past meetings at