European-style village to promote relaxed community feel inside Loop 610

Luxury homes rising three and four stories will line new streets and small parks being built on 46 acres inside the northwestern corner of the 610 Loop. The most expensive among them will sit alongside a canal running through a portion of the former industrial property that's being redeveloped into a European-style residential community.

This summer, Houston-based Hines, which took a decades-long break from developing land for single-family homes in Houston in favor of building office towers, will open its newest housing project: Somerset Green, a walled development that will have some 500 homes when completed.

The property, just north of Interstate 10 off Old Katy Road, has been designed for Houstonians who enjoy socializing and the outdoors, the developer said.

"We believe a community is what you're selling," said Adil Noorani, senior managing director of Hines. A main building for the residents will have a kitchen for catered events, and there will be a swimming pool next to a reflection pond. The streets will be lined with mature trees, and driveways will be accessible through alleys.

By and large, the homes won't have private yards, but there will be community gardens, dog parks and other green spaces with benches designed to hold wine buckets.

"Two things market research says we have to cater to is wine and dog lovers," Noorani said.

"Anything that allows you to de-stress," he added.

Urban projects

The Hines project is one of several densely packed upscale housing developments underway in urban locations around Houston.

As land prices have skyrocketed in recent years, builders have been creating small clusters of high-end homes often behind secured gates and sometimes with community pools and parks.

Houston-based Midway is planning million-dollar homes, luxury apartments and commercial space on 14 acres along Memorial Drive. A central plaza will be used for events like jazz concerts, classes and other events.

David Weekley Homes has been active as well with all-residential projects in the Heights area and in Spring Branch, where it is planning 105 homes on an 8-acre tract off Long Point, a busy commercial street.

Who's buying

The buyers at its urban developments tend to be mostly single or married young professionals in their 20s and 30s, though there have been some empty nesters moving in from Houston's suburbs.

"They want to be closer to shops, restaurants and museums," said Chris Weekley, president of David Weekley Homes' central living division.

The Hines project will have homes ranging from 2,600 to about 4,000 square feet and priced from $500,000 to $800,000. Community fees are estimated to be around $200 per month and cover such amenities as a 24-hour guard stationed at the front gate.

Coventry Homes, Pelican Builders and Toll Brothers will build the homes. They are expected to move sales trailers onto the property within the next couple of weeks.

The scale of the homes, "Regency and Normandy" in style, will be similar, but the facades will be either stucco, stone or brick, Hines said.

LRK, a national land planner, was involved in the design, meant to emulate a dense European village with attractive streetscapes.

Easing back

Hines announced Somerset Green in fall 2013, when the price of oil was just above $90 per barrel and Houston home sales were red hot.

With oil now hovering around $50, the overall housing market is slowing from that recent torrid pace.

New homes closings in January were down 6.5 percent from the same month last year, according to data from housing research firm Metrostudy.

With job growth expected to slow this year, low mortgage rates should help demand for homes. Construction costs are expected to moderate and lot supply should increase in the Houston area, contributing to new sales, Metrostudy said in a report.

Many have said a lack of inventory will help protect the market from the slowdown in the oil patch.

Noorani said he's not worried about Somerset Green.

"We learned a long time ago at Hines if you're going to be in a downturn, be in a great location," he said.

To be sure, the project will help the ongoing transformation of Old Katy Road.

The land on which the project is being built formerly housed warehouses and light industrial operations.

Near design center

Its location at 6900 Old Katy Road is just behind Star Motor Cars and next to Houston Design Center.

Hoping to further enhance this transitioning area, the design center recently announced an initiative that would create a shopping destination called the Houston Design District.

In addition to Somerset Green, an upscale apartment complex is being constructed on Old Katy.

The Hines project is one of two single-family housing developments it has underway in Houston. The other is in Spring.

Years ago, the company was involved in the development of the First Colony master-planned community. But until recently most of its residential development has been outside Houston.