When Mitch Steller He first moved into his home on a lush 117-acre golf course in Southern California. "It was like the Garden of Eden had a golf course in my yard," he said.
Today, his home in Poway, California, overlooks a dead, dry grass in place of a formerly green fairway. The golf club closed in 2017. "The fairways are brown, the greens are gone and the buildings are vandalized," says Steller, a 70-year-old marine management consultant.
Forty years after developers started covering Sunbelt with golf-built homes, many golf courses are closing as golfer numbers drop, leaving homeowners bearing the brunt. People often believe that a course will enhance the value of their properties. But many are discovering that the opposite can now be true – and legal conflicts erupt as communities argue over how to handle challenging pathways.
"There are hundreds of other communities in this situation, and they are trapped and do not know what to do," said Peter Nanula, executive director of Concert Golf Partners, a golf club owner and operator. which owns about 20 private clubs. In the United States, one of his ongoing projects is the rehabilitation of a recently acquired club in Florida, which closed one of its three golf courses and sued residents who had stopped paying their dues. .
According to the National Golf Foundation, a provider of market research on golf, more than 200 golf courses have been closed in 2017 nationwide, while about 15 new ones have been opened. Florida-based development consultant Blake Plumley said he receives about seven phone calls each week to seek advice on troubled courses offered by course owners or homeowners' associations. He stated that most of these cases were going to court and that he predicted that the United States is only about halfway through the number of closures of golf courses that will eventually become produce.
When a market closes, prices for neighboring homes generally fall by about 25%, Plumley said. Prices can fall by 40% or 50% if a controversial legal battle occurs, as potential buyers are reluctant to deal with the uncertainty that comes with litigation.
David and Deborah Jacobson at Coffee Creek Golf Course, now closed, where they own a house.
Brett Deering for the Wall Street Journal
In the 1980s and 1990s, developers flooded the market with golf course communities, offering not only golf courses, but landscaped grounds, a complex atmosphere and an instant social life. The country now has about 3,800 private golf clubs. Of the 1,200 or so private clubs with homes in or near the gates, some 950 were built between 1970 and 2010, said Jason H. Becker of Golf Life Navigators, a company that helps buyers find house to find clubs. Communities are structured in different ways: some golf clubs belong to a homeowners' association, while other communities line distinctly owned courses.
But the popularity of golf has declined in recent years as younger generations have not started playing football with the same enthusiasm as their predecessors. Golf participation peaked in 2001, when nearly 30 million people played more than 500 million rounds in 2017, this figure dropped to nearly 24 million people playing about 450 million rounds, according to the National Golf Foundation . In 2005, there were more than 16,000 golf courses in the United States; in 2017, they were less than 15,000.
In the early 2000s, as golf communities began to feel bad, many clubs began to force all their buyers to become members. Designed as a way to guarantee more cash to clubs, the so-called mandatory membership may end up hurting home values by reducing the number of potential homebuyers. "What we regularly see is that these properties, all things being equal, sell well below what they should be sold for," says Ken Johnson, real estate economist at Florida Atlantic University.
In Lake Worth, Florida, the community of Palm Beach fountains in the early 2000s forced all homeowners to become members of Fountains Country Club, located inside its doors. When the first owners of Fountains homes began to die or move, mandatory membership made it difficult to sell their homes, says Fontaines owner Sharon Harrington, who also works as a real estate agent in the area.
"Young people are not interested in golf," says Harrington. "They completely avoid these communities." Values began to go "in the washroom," Harrington said. "People just needed to go out." Houses that previously sold for about $ 400,000 were trading for less than $ 200,000, she said.
Meanwhile, club fees were increasing; Ms. Harrington said that in 2016, her dues had climbed to about $ 24,000, compared with less than $ 5,000 upon her arrival. Believing that the costs were unjustified, she stopped paying her dues. A number of other residents also stopped paying and the club sued to incite them to pay.
In 2016, the club closed one of its three golf courses on the site and in 2018, members voted in favor of selling the club to Concert Golf Partners. "Fountain Affiliation is no longer mandatory and house prices are recovering," said Nanula. He added that Concert had also repaid the club's debts, made capital improvements to its facilities and was currently preparing the third golf course, now closed, to be redeveloped into housing.
The clubhouse of the Coffee Creek Golf Course closed off Oklahoma.
Brett Deering for the Wall Street Journal
Ms. Harrington testified that the complaint against her was filed after the concert was purchased, as well as other cases that had not yet been returned or resolved. While she still owns her home at Les Fontaines, she is no longer a member of Fountains Country Club and now belongs to another nearby golf course.
Other clubs have maintained the idea of a mandatory membership. In Boca Raton, Florida, a new 10-storey condo called Akoya Boca West is being built in the gated community of Boca West. Buyers must become members of the Boca West Country Club, which requires an initiation fee of $ 70,000 plus a monthly fee of approximately $ 1,000.
About 40 percent of the project's units remain unsold after three years on the market, said Robert Siemens of the Siemens group, developer of the project. With late sales early on, he said Siemens had reshaped some of the units in response to comments from potential buyers. But he does not believe that mandatory club membership is a deterrent to buyers, for whom prices start at around $ 1 million. "They are very successful people with a lot of disposable income," he said. "If they want to live in Akoya, that $ 70,000 will not stop them."
Among the buyers in Akoya are Phil Kupperman and his wife Jill, who are under contract to buy a three-bedroom apartment there. Currently residing in another development in Boca West, they are reducing their workforce to a house of about 4,000 square feet.
Mr. Kupperman, a self-described "golf fanatic," said that Boca West's amenities – including four golf courses – largely justified its cost. He said that he considered mandatory membership as a positive element, providing funds to keep club infrastructure up to date and ensuring that "the people who come here are the ones you want in your community "because they are reviewed by the country club before. be allowed to join.
The Kuppermans had trouble selling their current home in Boca West, which they had bought for $ 1.175 billion in 2005. After being put on the market about three years ago at $ 1.575 million, the house is now priced at $ 999,999. The Kuppermans blame the softness of the market.
When a golf course closes, it causes distress to people who live there, many of whom have paid extra for a location overlooking the links. "We all paid more money to have a golf course, and that does not seem to please," said David Jacobson, owner of a house on Edmond's Coffee Creek golf course. , Ok so. After the sale and closure of the public land in 2017, the association of the owners of Coffee Creek homes brought a lawsuit against the new owners, saying that they had the obligation to continue operating a golf course on the site. The lawsuit is in progress.
About 40% of Akoya Boca West's housing (a piece of furniture shown here), a condo under construction in the gated community of Boca West, Florida, remains unsold after three years in the market.
Akoya Boca West
"They have not made any money on this golf course for years," said Kyle Copeland, who purchased the property with partners in 2017 and plans to expand it, noting that it is zoned for a residence. single family. "The thing is going to be redeveloped – it will never be a golf course again."
In November, City Council denied Mr. Copeland's initial plan for a mixed-use development on the Old Course site. He is now planning to build single-family houses.
At Mitch Steller in California, overlooking the brown grass of StoneRidge Country Club, which is now closed, the golf course is not coming back anytime soon. Kevin McNamara, a longtime resident, recently purchased a StoneRidge purchase option from his current owner, Michael Schlesinger. McNamara is a former club member who, he says, has struggled financially for years as his membership has declined. When he was contacted by the Wall Street Journal, Mr. Schlesinger asked for a list of questions sent by email without answering them.
After signing the option agreement, Mr. McNamara stated that he had interviewed consultants about the feasibility of reopening the course, but "they made fun of me", did he said, adding, "The economic situation simply does not work anymore." to build an "agrihood" development on the 117-acre parcel, with 162 homes and about 40 acres devoted to agriculture, such as a butterfly farm. McNamara's plan must be approved by local residents through a citywide vote.
For some, it's the lost paradise. Lou Altieri, 68, who paid more than $ 1 million for a house at the Kensington Golf & Country Club in Naples, Florida, in 2005, compared his first experience of life in a golf community. at all times. When he joined the club, he said he would be partially reimbursed for his $ 45,000 initiation fee when he left. But when he decided to resign from the club several years later, he was told that there were about 60 people in front of him on the "resignation list", each with a membership that was to be sold to a newcomer before Mr. Altieri can receive his repayment.
Not wanting to accept this, Mr. Altieri stopped paying his dues and the club filed a lawsuit. Both parties finally settled by arbitration and Mr. Altieri left the club, selling his house at a loss in 2011.
Kensington chief executive Dave Krzywonos said the club has since changed its rules to give members more opportunities to resign, and said the "refundable subscriptions" like those of Mr. Altieri are no longer sold. Members who join now may resign after a one – year waiting period, but those who resign must maintain social membership for a reduced fee as long as they live in the community.
Mr. Krzywonos acknowledged the problems faced by the golf club industry. "They built so many clubs," he said. To ensure financial stability, he said, Kensington and the other clubs have no choice but to institute rules such as the requirement of social adhesion . "A club can not exist in a closed community if 70 to 80 percent of the members do not support it," he said.
The golf market
In 273 counties analyzed by Realtor.com, dwellings with the word "golf" in their description were on the market for 75 median days, 14% above the median of their respective counties and 27% above the national median. The median selling prices of these golf courses were about 25% higher than those for all counties, and the square foot price was about 2% higher. In some counties, such as Palm Beach, the median square foot price of a golf course was actually lower than that of the entire county.
(News Corp, owner of the Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)
Write to Candace Taylor at Candace.Taylor@wsj.com