Fletcher: As it relates to redevelopment, what's going on in parts of Newport Beach—i.e., West Newport Beach or the Newport Mesa area, a combination of Costa Mesa and Newport Beach—is a term called urban renewal. It's a form of gentrification that takes an area of desirability from a location standpoint and converts many of the previous uses in industrial and commercial zones.

Four years ago, we built Sea House in Costa Mesa at the end of a dead-end street, West 18^th St. It was a previous industrial site with an old abandoned house on it, and we built single-family, detached three-story homes with roof decks. It was very high density, and that was kind of the first project of its kind. Since then, the market has seen close to a dozen very similar high-density (16 to 25 units to the acre) new sites from builders including Taylor Morrison, Meritage and us that have developed into really cool, contemporary, three-story residential communities.

Ebb Tide is technically in the Newport Beach city limits, kind of an extension of the Westside Costa Mesa vibe, but with a Newport Beach address that definitely has value. Homes are three stories with a roof deck, and, like Sea House, when you're up on the third floor, you get panoramic views—but the roof decks at Ebb Tide are probably two to three times bigger than what we built at Sea House. They also have outdoor kitchens, BBQs and refrigerators on the roof decks that allow builders to extend the home's square footage without additional cost and for the home buyers to enhance their indoor/outdoor lifestyle.

GlobeSt.com: What has led to the advent of three-story homes in Orange County?

Fletcher: We're seeing so much three-story product in Los Angeles in Redondo Beach and parts of Manhattan Beach. In San Diego's Pacific Beach and Mission Beach, we've seen two-story and three-story homes with roof decks, but not from a developer standpoint—these were one offs. But now cities want density, and that's a type of tract that they will approve.

From a city's perspective, higher densities could lead to higher population growth and higher income growth; they're perceived to be more sustainable. Builders want to go vertical and provide density because we want to increase home size and the functionality of a home, but we have a very limited footprint because of what the city is approving.

The benefits of a three-story home like this are you get a side-by-side two-car garage, a large bedroom on the first floor, a main living area on the second floor and a lot more space to work with because you're not sharing that living space with a two-car garage. We built Sea House and ebb tide on 10-foot plates, so you get the feeling of a 10-ft space, where the windows are bigger and there's a lot more glazing in the architecture and a lot more natural light. Buyers go in and like the feeling, and builders have gotten a lot more comfortable with roof decks in the last few years. Traditionally, these have created problems with water intrusion and proper drainage, but we got comfortable with it and so have other builders. It's a great way to offer benefits to the buyer with limited or no yard space. It's really starting to proliferate. You have a little yard that's compact and low maintenance for dogs and children, but when you really want to entertain and spend some time outside, you go to the roof deck.

GlobeSt.com: How do three-story homes fit in with multifamily and other single-family homes in the area?

Fletcher: What I see out there in the resale housing stock in Newport Beach and Costa Mesa are single-story homes that developed decades ago. Most of the homes from this area are older, garden-style apartments or the the mid-sized or podium wrap developments in Irvine, Fashion Island and the Costa Mesa metro area by South Coast Plaza. In this area of Newport Mesa, you'll find low-slung industrial and commercial buildings. Now, with the entitlement process and how cooperative Costa Mesa has been in approving residential tract maps, you're seeing everything, including three-story homes with rooftops, attached or detached. Now your street scene has some relief. The skyline and street scene are a lot more interesting. That, along with the benefits of density. Cities are really pro-residential development, particularly in this area, and they are approving three-story product.

GlobeSt.com: What else should our readers know about Ebb Tide?

Fletcher: If it's not the only new-home opportunity in this market below $1 million, it's one of the few. In Newport Beach, the average new home is pushing $2 million. This is an opportunity to get into one of the most rarefied zip codes in Southern California for a price that's a really good value. We've sold 24 homes in the five weeks since we opened, and there's a waiting list for future phases.