If your pro forma is thin on infrastructure assumptions, you are not underwriting. You are guessing. Land Kings provides development capital for operators who need disciplined cost-to-complete work before closing land.
Why Infrastructure Is Usually More Expensive Than Promised
Every land developer has a story about a parcel with “city utilities nearby” that turned into a hundred-and-fifty-thousand-dollar utility extension once the engineer saw the plans. That is not bad luck; that is the normal outcome of underwriting with optimism instead of actual quotes. Water, sewer, electric, and gas extensions are complicated by right-of-way permissions, tap fees, easements, and utility capacity constraints that no spreadsheet assumption can fully predict.
The best way to protect your deal is to treat infrastructure like a line item you verify, not a number you hope. In this article we break down realistic ranges, common surprises, and how each utility interacts with manufactured home parks, RV parks, and storage facilities.
Water Infrastructure Costs
Water delivery to a development site usually involves three layers: the water main extension, individual service lines, and fire flow or meter infrastructure. For MHP and RV park sites, potable water must be delivered to every site with adequate pressure. Storage facilities only need water for office use and fire suppression, which dramatically reduces cost.
Range for Raw Land
- Tap fee per unit: eight hundred to four thousand dollars depending on jurisdiction.
- Main extension: twelve to seventy dollars per linear foot depending on diameter and paving restoration.
- Pressure issues: if the public main is lower than the site, you need a booster station.
What Owners Miss
Owners often say the city water is “right there” without clarifying whether the meter is on the owner’s side of the road or whether the city will allow a tap at all. Some jurisdictions refuse new taps on undersized mains. Others require you to pay for main upsizing. Always ask the utility whether the existing main has capacity for your density.
Sewer Infrastructure Costs
Sewer is the most expensive and most jurisdiction-specific utility to extend. For MHPs, every site needs sewer service or an approved septic alternative. For RV parks, many owners build centralized pump-and-vacuum systems instead of sewer when extension costs are prohibitive. Storage facilities almost never need deep sewer unless the park includes showers or laundry.
Range for Raw Land
- Lateral sewer per lot: four hundred to twelve hundred dollars.
- Main extension: twenty to ninety dollars per linear foot including manholes.
- Gravity vs. force main: gravity is cheaper to install but requires continuous downhill slope.
- Pump station: if you must pump sewer uphill, add one hundred thousand to three hundred fifty thousand dollars.
The Two-Point Rule
Sewer typically has to maintain minimum slope between cleanouts. If your site slopes away from the public main or crosses a low point, you may need multiple pump stations. That is a cost item most developers do not model.
Electric Infrastructure Costs
Electric service is usually the most predictable utility extension, but the cost difference between single-phase and three-phase is substantial. MHP and RV parks with lots of appliances and HVAC need three-phase service in many jurisdictions. Storage facilities with security lighting, office power, and EV charging can also push into three-phase demand.
Range for Raw Land
- Single-phase service drop per lot: eight hundred to two thousand dollars.
- Three-phase service drop per lot: one thousand five hundred to four thousand dollars.
- Distribution line extension: twenty to ninety dollars per linear foot.
- Substation upgrades: the utility may require you to pay a portion of a feeder upgrade.
What to Verify
Call the utility and ask whether the changeer bank serving the area has capacity for your load. If it does not, you may be responsible for a capital recovery charge or a longer extension. This is especially common in rural Texas and Louisiana growth corridors where demand has outpaced infrastructure.
Gas Infrastructure Costs
Natural gas is optional for most MHPs, RV parks, and storage facilities, but some MHP developers include gas heat and cooking because it improves marketability. If natural gas is available and local code allows propane alternatives, you must model the cost per lot correctly.
Range for Raw Land
- Service line per lot: five hundred to fifteen hundred dollars.
- Main line extension: fifteen to seventy dollars per linear foot.
- Backfill, paving, and restoration can double the installed cost in urbanized counties.
Alternative Fuel Choices
Many rural MHPs and RV parks use propane instead of natural gas. Propane requires a tank farm or individual tank deliveries, which is simpler infrastructure but adds ongoing operating cost. Evaluate both options early before marketing assumes one or the other.
Combining Infrastructure Into a Development Budget
A typical infrastructure budget for a new manufactured home park on raw land breaks down roughly as follows:
- Water: fifteen to thirty percent of utility costs.
- Sewer: forty to fifty-five percent of utility costs.
- Electric: fifteen to twenty percent of utility costs.
- Gas: five to fifteen percent of utility costs, or zero if propane or electric heat is used.
If you control a site where sewer is already available at the property line, your utility risk drops significantly. If sewer is not available and your soil will not support septic, you have a problem that either requires an expensive forcemain or a redesign of the product. Possibly from MHP to storage or a smaller RV park.
Tap Fees and Impact Fees
Most counties charge a tap fee for each water and sewer connection. Tap fees are often set by the utility commission or city council and range from a few hundred dollars per tap to more than five thousand dollars in growth-heavy jurisdictions. Impact fees, when present, cover broader infrastructure demand from your project and can run from five hundred to several thousand dollars per unit.
Who Pays?
In most Texas jurisdictions, the developer pays impact fees before or at certificate of occupancy. Some counties allow installment payment. Always read the municipal code section on impact fees before underwriting, because these numbers are often buried in administrative codes rather than published on the city website.
Utility Coordinators, Engineers, and Faster Closings
Land developers who hire a civil engineer early consistently close faster and with fewer surprises. A good engineer can call the utility, request a service availability letter, and pull a cost estimate before a land purchase agreement is signed. That letter is the only document that turns “utilities are nearby” from a guess into a fact.
If you are buying land to develop, ask your title company whether a service availability letter is available through the utility. If not, budget two to four weeks for formal utility response. That timeline changes your closing schedule and your earnest money deposit structure.
Working With Development Capital for Long Infrastructure Timelines
Utility extension is one of the main reasons development loans take longer than expected. Banks want to see a firm quote before they will release funds, and utilities move at their own pace. Having a development capital partner who understands infrastructure timing allows you to close land quickly and begin work while utility design is resolving.
Summary
Infrastructure is the single largest driver of cost uncertainty in raw land development. Water and sewer are the most expensive and most variable. Electric is usually predictable but can jump with capacity needs. Gas is optional and most projects substitute propane when it is cheap and available. The only way to underwrite reliably is to get service availability letters, ask the hard questions about tap fees and capacity, and include a contingency line item of at least fifteen percent for unexpected infrastructure work.