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The average price of net signed contracts was $886,800, compared to $847,800, in last year's fourth quarter. This fourth quarter was our 13th consecutive quarter of year-over-year growth, in total contract dollars and units, highlighted by 20% or higher year-over-year dollar growth, in each of the past five quarters. We finished fiscal year 2017 with 305 selling communities, and intend to grow community count by 5 to 10% by the end of fiscal year 2018. However, I will note that due to the timing of openings and closings, we will end fiscal year 2018's first quarter with about 295 selling communities.

2017's fiscal year-end backlog of $5.06 billion, and 5,851 units, increased 27% in dollars, and 25% in units, compared to 2016's fiscal year-end. The average price of homes in backlog was $865,100, compare to $850,400, one year ago. This backlog should result in strong revenue, and earnings-per-share growth, in fiscal year 2018. In 2017, we reaped the rewards of our geographic diversification strategy, particularly in the west. Acquisitions of builders in Seattle, in 2011, California in 2014, and Boise in 2017, as well as quality land purchases across all of our western markets, have led to significant growth.

California and the west region combined for 47% of our revenues, this fourth quarter. California was our largest region. With great land, great homes, and great locations, contracts there were up 56% in dollars, and 54% in units in our fourth quarter. We also benefited from our ongoing product diversification strategy. In addition to continued success in our core, luxury move up market, we are expanding our active adult product line nationally, have introduced a new, millennial-focused product line, and continue to develop our Toll Brothers City Living and Apartment Living divisions.

Our Apartment Living business continues to expand across the nation. We have well-established divisions, focused on urban and suburban markets in the corridor from metro Washington DC, to Boston. In addition, we now have teams focused on growth in Los Angeles, San Francisco, San Diego, Phoenix, Dallas, and Atlanta. Our pipeline of completed projects, those under development, and in the approvals, totals over 14,000 units.

We have begun to harvest some of the value created under our Apartment Living Rental Division Brand. In fiscal year 2017, we monetized a small portion of the value into recently developed, now stabilized properties, through a recapitalization, resulting in income to Toll Brothers of $26.7 million. In fiscal year 2018 and beyond, we expect to continue to grow the income from this business. Our City Living High Rise Division remains active, with its primary focus still on the New York City area, including Manhattan, Brooklyn to Hoboken, and Jersey City.

In fiscal year 2017, we formed separate joint ventures, to develop two new Manhattan high rise towers, with projected costs totaling over $600 million. By forming these joint ventures, we will lower our investment, increase our return on equity, reduce our risk, and benefit from attractive construction financing. As of today, we have already taken 64 contracts, and an additional 12 deposits at these two projects, 121 East 22nd Street, and 91 Leonard Street. This quarter, our wholly owned City Living contracts increased, compared to the same quarter last year. As 10 Provo Street, at Provo Square, our first Jersey City high rise condo community in a decade, continued to sell well.

Located a block from the Grove Street PATH station, this 28-storey high rise will contain 242 residences. Since opening this summer, we have taken 93 agreements. Now, let me turn it over to Marty.

Marty Connor -- Chief Financial Officer

Thanks, Doug. Before I address the specifics of this quarter, please note that a reconciliation of the non-gap measures discussed during today's discussion to their comparable gap measures, can be found in the back of today's press release. Our growth in revenues, contracts, deliveries, and earnings per share in fiscal year 2017 reflect the benefit of a strong market, our excellent land holdings, our diverse geographic and demographic product mix, and our great brand. I would like to point out that heading into fiscal year 2017's fourth quarter, we had expected to close three high-dollar condo units in New York City, in projects on balance sheet, that we'll instead deliver in Q1 of fiscal year 2018.

These three units represent $43 million plus in revenues, and their delay was the primary reason for our Q4 fiscal year 2017 average delivered price, revenues, SG&A leverage, and operating income, coming in slightly below our expectations. On their own, these three units represent approximately 3 cents of earnings per share. In addition, the I-joist issues in the north and the west resulted in 35 cancellations, and 20 lot swaps. And, remediation took a bit longer than anticipated. As of this week, all homes have been remediated, and most of the issue is behind us. We expect all units impacted to be delivered by the end of fiscal year 2018's third quarter.

With our strong backlog, as well as significant projected contributions from our joint ventures and other income lines, we expect continued growth in revenues, as well as in our earnings per share, in fiscal year 2018. We have pursued a number of initiatives to improve our return on equity, including share repurchases, utilizing lower rate variable borrowings, forming capital and risk efficient joint ventures, optioning more land, and increasing absorption. We're up three homes per community per year, to 25.8 homes for the full year 2017.

We entered fiscal year '17, with the goal of improving our return on beginning stockholders' equity to 12%, and adjusted that upward mid-year, to 12.5%. We have ultimately achieved a 12.7% return on beginning equity, at the end of fiscal year, '17. We expect further improvements in fiscal year 2018. We purchased 7.7 million shares of stock during fiscal year '17, at an average price of $37.81. We have increased our option lots to 35% of our total lots. Two years ago, it was only 20%. Based on the midpoint of projected deliveries in fiscal year '18, our year's supply of owned land is at 3.8 years, with an additional 2.1 years under control.

In fiscal '17, we closed two large New York City JVs, with total projected costs of approximately $600 million. By using joint ventures and construction financing, we have reduced our projected investment in these projects to $55 million, compared to the $600 million if we did them on balance sheet, by ourselves. Conversely, we bought our partners' interest in the Sutton City Living project, and the final units in that project will be delivered on our balance sheet. The combination of these initiatives resulted in significant cashflow. In our fourth quarter, we retired $288 million of convertible debt, paid off $400 million of senior notes at maturity, repurchased $200 million in shares, and spent $383 million to buy and improve land, all while maintaining liquidity in excess of $1.8 billion, and lowering our net debt to cap by 390 basis points, to 34,5%

Let me turn to some income statement guidance for fiscal year '18. We expect fiscal year '18 first quarter deliveries of between 1,300 and 1,500 units. With an average price of between $820,00 and $840,000. And, full fiscal year '18 deliveries of between 7,700 and 8,700 units, with an average price of between $810,000 and $860,000. Adjusted gross margin for fiscal year '18 is expected to come in at 23,75%, to 24.25%, a midpoint of 24%. This approximately 75 basis points in contraction from 2017 is associated with two primary items. First, our margin in city living projects, delivering in fiscal year '18, while a still very healthy 27.4%, will be below the 35.1% margin, delivered in fiscal year '17.

Reflecting the market conditions, we have noted previously, in certain New York City buildings, and at certain price points. This will impact overall margin, by approximately 50 basis points. Second, in California, we expect to see margin decline from 30% in 2017, to a still-strong 28.4% in fiscal year '18. As replacement land costs are slightly higher in new communities than those in some communities that are selling or sold out. We expect the balance of our home building business to maintain margin.

For 2018's first quarter, we expect an adjusted gross margin of 23.3%, based on mix. We expect interest in cost of sales to decline from 3% in 2017 to 2.8%, for both the full year and first quarter of fiscal year '18. SG&A, as a percentage of full 2018 revenues is projected to drop 50 basis points, to approximately 10% of full year revenues. First quarter SG&A, as a percentage of first quarter revenues will be approximately 13.3%, reflective of lower revenues, compared to subsequent quarters, and some immediate expensing of stock compensation.

While we have mentioned that fiscal year 2017 JV and other income would be outsized compared to other years, we are pleased to guide to a fiscal year '18 midpoint, just $20 million lower than fiscal year '17. The company's full fiscal year 2018 other income, and income from other, unconsolidated entities, is now expected to be between $130 million and $170 million, with approximately $40 million in our first quarter.

In fiscal year '17, we reported income from sales of portions of our ownership positions of certain apartment projects of $26.7 million. In fiscal year 2018, we expect gains from apartment sales to be more than double that total. Our fiscal year 2017 fourth quarter tax rate benefited from a $3 million reserve release, resulting from a statute expiration. Our Q4 effective tax rate came in at 36.4 percent. We estimate our effective tax rate for fiscal year 2018 to be approximately 37 percent, for the full year, assuming no impact from tax reform.

A benefit from the new accounting for excess stock compensation deductions should reduce our Q1 fiscal year '18 tax rate by approximately 3.5%, based on the current stock price. Thus, driving the Q1 rate to an estimated 33.5%. Obviously, the contemplated changes in corporate taxation would be a significant positive to our bottom line, if enacted. And, since our deferred tax asset has now flipped to be a net liability, any drop in the corporate rate will also create a one-time accounting benefit.

Lastly, our weighted average share count for the fourth quarter was 164.6 million shares. We estimate a weighted average share count for Q1 '18 of 161 million shares. This is down approximately 23.7 million shares, roughly 13%, from just two years ago, reflecting our share buybacks, and the retirement of our convertible securities. Now, let me turn it over to Bob.

Bob Toll -- Executive Chairman

Thanks, Marty. We are very pleased with the market, as we begin fiscal 2018. There are a number of tailwinds in our favor. Last Monday, the Census Bureau reported the highest new home sales total in a decade. Recently released data from the National Association of Realtors indicates that, with continuing, solid demand, the small number of months' supply of new home, and of new and existing homes on the market remains constrained at levels still well below historic norms.

This shortage plays to our advantage, given our multi-year supply of well-located, geographically diverse and already entitled homesites. Meanwhile, our customers in the upscale market are benefiting from low unemployment income growth, a strong stock market, and attractive mortgage rates. As millennials become a bigger part of the rental market, the rental apartment and new home markets -- as growing families seek out larger homes, in better locations, and as baby boomers buy second homes, or move to active living communities, we believe we are well-positioned for many years to come. This summer, we celebrated the 50th anniversary of the founding of Toll Brothers. From our start as a local builder, in the suburbs of Philadelphia, we are now a Fortune 500 company, and we have been named world's most admired home builder the past three years in a row, by Fortune magazine.

Our accomplishments are directly attributable to the diligence and dedication of our Toll Brothers associates, to whom we are very grateful. Thank you. Now, let me turn it back to Doug.

Douglas Yearley -- Chief Executive Officer

Thank you, Bob. Thank you, Marty. Before we take questions, let me very briefly comment on the pending tax reform. On the corporate side, we are encouraged by the potential reduction in the corporate tax rate, as it will help our earnings and cash generation. On the personal side, while the potential reduction in the MID, real estate tax and SALT deductions not being helpful to buyers, especially in our coastal regions, we believe they may be offset by a lower stated tax rate, the doubling of a standard deduction, the potential removal of AMT, lower passthrough tax rates, and the elimination of the phaseout of itemized deductions.

We have always believed that our buyers are generally not tax driven, when it comes to buying our homes. The issue of tax reform has been looming for months, and we haven't seen a change in our buyers' behavior. They continue to buy, sales continue to be strong. With the Senate bill coming out last week, the headlines have only increased, yet this past week had the highest sales for a first week in December since 2005.

So, Chad, let's open it up to questions.

Questions and Answers:

Operator

Certainly. We will now begin the question and answer session. To ask a question, you may press * then 1, on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press * then 2. At this time, we will pause momentarily, to assemble our roster. The first question will come from Stephen East of Wells Fargo. Please go ahead.

Stephen East -- Wells Fargo -- Analyst

Thank you, good morning, guys. Doug, first, quick follow up on that tax reform. Do you think this would affect -- with SALT disappearing, do you think this would affect pricing in those markets? And then, switching gears to my other question, you all have done a tremendous amount on capital allocation this year, and Marty walked through all of it, which, quite frankly, was pretty impressive, just in the fourth quarter alone. So, as you look into 2018 and beyond, can you repeat what you were doing there? Where's your focus go, what would you like to do, and maybe put some numbers around that, at least generally?

Douglas Yearley -- Chief Executive Officer

Sure, Stephen. I'll take your tax issue, and then, turn it over to Marty on ROE. It's just too early to tell what exactly will happen with tax reform, as the Senate and House bills are now reconciled. If SALT passes, where there is limited or no deductibility of state and local taxes, then obviously, California, New York, New Jersey are impacted, with higher state tax rates. But, I'll reiterate what I said before. We don't think our buyers, at our price point are driven by the taxes they pay, when it comes to purchasing our homes. We've also studied in some detail, a typical buyer, in eastern states, and also in California, and again, without knowing exactly where the new bill comes out, when you consider the things I mentioned, which is potential removal of AMT, lower passthrough tax rates, elimination of the phaseout of itemized reductions, which is big.

Because that's the current tax law, and it's proposed not to be the future tax law, it comes across, it appears, as a wash, or very close to a wash. But, our activity in California continues to be strong. We are not hearing from sales managers that buyers are on the sidelines, waiting to see exactly where tax reform plays out before they buy. Remember, California today is not a great state to live in, when it comes to taxes, but it's our hottest market. Because the sun shines, the lifestyle's great, and most importantly, there's tremendous job growth. And so, I don't think any changes in this tax code, as proposed by either the House or the Senate will have an impact on prices in California.

Supply of houses is still very low, land is very hard to get entitled, and you know, our buyers out there are very affluent, and our business has been very good over the last couple of months, as there's been a lot of headlines about this tax reform.

Marty Connor -- Chief Financial Officer

And, Stephen, with respect to the capital allocation, as you put it. Thank you very much for that commentary, I think the entire management team is pretty proud of what we've accomplished this year. As we look to future years, I think we're going to continue down the various paths we've gone. We have significant financial flexibility, to do a number of things. But, the first priority has always been to grow the company, and so, we will continue to look at land opportunities, and company opportunities, and apartment opportunities, and we will complement that, with opportunistic stock repurchases, and we are coming up on our one-year anniversary of our dividend as well, so we will be taking a look at that as another option. Hope that helps.

Stephen East -- Wells Fargo -- Analyst

Yeah, that does. And then, Doug, last question. Going back to orders, you mentioned California, you all have just had huge numbers there. The gross margin, as you look into '18, is coming down a little bit. Could you talk to us some about the decision to run hot, around 50 to 60% growth, and -- versus the ability to price more? And then, along those lines, I didn't catch on the cancellations, it's up about 300 basis points. It sounds like a fair amount of that was coming around the joist issue. But, if you could put some color around the cancellations, moving up?

Douglas Yearley -- Chief Executive Officer

Sure, so, I'll answer that. The easier one, the quicker one. The increase in CAN rate is almost all -- it is all Warehauser. The flat joist issue, we lost 35 agreements, Warehauser will fully compensate us for the costs associated with that, and having to resell those homes, but that is the reason it spiked a little bit, in the fourth quarter. With respect to California, last year, we delivered a whole bunch of homes out of Hidden Canyon, which I know many on the call have seen, in Orange County, and that was 50% gross margin, plus or minus. I'm really proud of a 28.5% gross margin coming out of California, and it's mix driven But, what we have right now, selling, is selling very well. We continue to raise price, Stephen, we will continue to evaluate that trade-off between price and pace. It's of course driven by how long the backlogs get, and how quickly we can build homes and deliver them, and we evaluate that regularly.

But, we continue to be set up for great things in California, and continue, through this call, to see terrific demand. I'm so proud of what we're doing out there. Our homes are different, our communities are different, the buyers in the market recognize it, and I think our future is very bright out there. And, like I said, I'll take a 28.5% margin in the California market all day long.

Stephen East -- Wells Fargo -- Analyst

I'm with you, I'm with you. Thanks a lot, guys.

Operator

The next question will come from Alan Ratner of Zelman and Associates. Please go ahead.

Alan Ratner -- Zelman & Associates -- Analyst

Hey guys, good morning. Thanks for taking my question. So, appreciate all the detail on the margin guidance. One thing I thought was interesting, I didn't hear from you, Marty, as far as a driver, was the optioned land piece. Because you guys have done a great job driving that higher, I think that there's been a lot of chatter in the industry about becoming more asset light, and you guys getting a 35% option is very impressive. I was curious if -- how should we think about the margin differential on your optioned land, versus your self-developed portfolio, and if it's not really impacting your '18 margins, what point should we start to see that reflected?

And then, just one follow up to that is, how high can that number go? I think there's a lot of discussion about how difficult it is to option land in some of the coastal markets you guys operate in. California, the northeast. So, just curious if you can expand a little bit about what you're seeing in the land market that's allowing you to drive that number higher? Thank you.

Marty Connor -- Chief Financial Officer

Sure, and I think, before I address it, Alan, I think we're gonna talk about structured options, as well as approval options, and structured options is where you find a buyer who's willing to take back some financing, or sell it to you over time. And, that, generally, is going to result in a higher cost to acquire the land. And, we are seeing a bit more of those opportunities, although it's always a selective trade-off by us, as to whether we wanna buy the whole thing ourselves, and improve margin, or maybe defer it over time, and improve return on equity.

And then, you have the approval options, where you identify a piece of ground and agree to buy it, subject to you getting approvals. And, I think the combination of those are gonna work in opposite directions. If you find the land on an unapproved basis, and create the value through approvals, then that would be margin enhancing. Versus the converse, of structured options. So, we're looking at both of those types of alternatives, as well as a direct, initial purchase.

Alan Ratner -- Zelman & Associates -- Analyst

And, just in terms of, I guess, the composition then, of the options, the 35% today, can you give some split between those two, and should we expect, at some point, kind of a cliff, or a gradual impact from more option deals falling through at lower margins?

Marty Connor -- Chief Financial Officer

I think we've given the margin guidance we're gonna give for 2018, and with both of the initiatives working in opposite directions, we're gonna leave it at that.

Alan Ratner -- Zelman & Associates -- Analyst

Got it. Okay. A second one, if I could, Marty, on the tax reform. If we do assume it gets passed, and we take your current guidance, probably frees up about $100, $100+ million of additional cash to the company. So, I was just curious if there's any big picture views on what you would do with that incremental cash.

Marty Connor -- Chief Financial Officer

Right, I'm not sure we get quite as high as you do, but call it $100 million, $80 to $100 million, and it depends on whether that happens in '18 or '19, and there's a couple different alternatives, depending on which body of Congress you're looking at right now. I think we don't have any particular direction for that incremental cash, other than to put it in the general coffers, that I spoke about on the first question. And, our priority will always be growth of the company, through land and company acquisitions, and then, we'll look at other alternatives, as the opportunities present themselves.

Alan Ratner -- Zelman & Associates -- Analyst

Gotcha, thank you, good luck.

Operator

The next question will be from Michael Rehaut, with JP Morgan Securities, please go ahead.

Neil Basu Mulligan -- JP Morgan Securities -- Analyst

Hey, good morning. This is Neil Basu Mulligan, for Mike. I guess going back to the gross margin guidance, and net of the big pieces you highlighted. I guess core gross margins are pretty much flat, year-over-year. But, again, some of the pricing you've been seeing, I wanna see if any of the cost buckets have kinda shifted over. Maybe labor, or raw materials. So, any color on that would be really helpful.

Douglas Yearley -- Chief Executive Officer

Sure. We continue to feel some pressure, on the cost side, driven by some material increases, but moreso labor. It's nothing out of the normal. This past quarter, it's creeping slowly. In some markets, we are offsetting, or more than offsetting that coast increase with pricing power, and in other markets, we have been unable to do that. The mix, as Marty stated, when you take out the margin issue coming out of New York City, and the very small margin issue coming out of California, that -- our gross margin is flat, in the rest of our business around the country. Which suggests that we have pricing power that pretty much equals the cost creep. I would highlight that we've had a little more cost increase in Houston, because of the hurricane.

We have not seen an impact on sales. On the sales side, that market recovered very quickly, but as trades are being pulled toward the repair of houses and infrastructure that was impacted directly by the hurricane, it has made it a bit more expensive, and it's taken a bit longer to build some homes in Houston. It's a very small market for us, it's less than 3% of our business. And, the west coast of Florida, which is also very small. Less than 1% of our business, we've had the same issue, although not to the same extent.

Neil Basu Mulligan -- JP Morgan Securities -- Analyst

Okay, that's helpful. Yeah, I guess on the SG&A side, too, given the really solid improvement your expecting next year, I guess what are the really big opportunities you've identified? Talked about some investments in the past, do you think those'll kind of improve the long-term trajectory of SG&A?

Douglas Yearley -- Chief Executive Officer

So, I think you're referring to our technological investments, upgrading our general ledger package, our customer relationship management package. Those are still ongoing, and the benefits of those will be beyond the 2019 year, most likely. So, we're still in a build-and-spend mode, not a reap-the-rewards mode, quite yet.

Neil Basu Mulligan -- JP Morgan Securities -- Analyst

Okay, that's helpful. All for me.

Operator

The next question will be from John Lovallo, with Bank of America/Merrill-Lynch. Please go ahead.

John Lovallo -- Bank of America -- Analyst

Hey guys, thank you for taking my questions. The first one is on the community count growth expectation of 5 to 10%, which is definitely better than what we were expecting. Are there particular regions, or even community types that are driving this?

Douglas Yearley -- Chief Executive Officer

Sure. The community openings for '18, we project to have 17 new communities opening in Pennsylvania, 11 in Reno, 8 in Seattle, 8 in Northern Cal, and 6 in Southern Cal. So, those five markets lead the list.

John Lovallo -- Bank of America -- Analyst

Okay, that's helpful. And then, two of your competitors have recently executed what could be transformative transactions with a land developer acquisition, and the acquisition of a major competitor. Did either of these transactions kind of change the way you guys are thinking about the business, or even your strategy, going forward?

Douglas Yearley -- Chief Executive Officer

Well, we've always been opportunistic on builder acquisitions, although in the past, they've always been smaller acquisitions to enter a new market. We continue to be focused on those opportunities, as we evaluate a couple of new markets that we're interested in. With respect to the land side of the business, we already have our Gibraltar joint venture with Pimco, which is a $400 million land fund, that provides land banking services to many builders, and we just closed our first deal with that Pimco fund, with -- on some Toll land. But, we are also evaluating the opportunity to create, or acquire an off balance sheet land fund, or land company, that could give us the vehicle to efficiently, with a great ROE, feed land back into Toll Brothers. And, those discussions will continue.

John Lovallo -- Bank of America -- Analyst

That's very interesting. Thanks, guys.

Operator

The next question comes from Robert Wetenhall of RBC Capital Markets. Please go ahead.

Robert Wetenhall -- RBC Capital Markets -- Analyst

Hey, good morning. And, congrats on a very successful year, Doug. It's nice to see you guys diversifying geographically, diversifying product, and reaching your targets. On the heels of a big victory, you guys were talking about ROE coming in ahead of your expectations. You were at 12, and then 12.5, and then 12.7. Maybe it's for Marty. What kind of headroom do you have, to drive ROE higher? If you're thinking about 2019, or 2020, what are the primary levers you're gonna be pulling? Where do you think that number can go?

Marty Connor -- Chief Financial Officer

So, Bob, thanks for your commentary, we appreciate it. As we look at ROE, we're really focused on what can we do, and kinda commit to internally, here, over the next 12 months, with an eye toward continued improvement. If you recall, a year ago, when we set the 12% target, we had hinted to 50 to 100 basis points beyond that in subsequent years. Well, we chewed into a lot of that subsequent year goal already, that makes it harder to set the goal equally as high, going forward, So, I think we're looking at somewhere in the neighborhood of 25 to 50 points, absent tax reform or significant joint venture formation here, in this year.

Beyond that, we'll continue to structure the balance sheet and the company, so that we can focus on improving ROE, while balancing gross margin.

Robert Wetenhall -- RBC Capital Markets -- Analyst

And, what's gonna be the big lever for you? Is it gonna be buybacks, or? What's gonna be the lever that gets you up there, or is it just a combination of multiple things?

Marty Connor -- Chief Financial Officer

I think it could be buybacks, it could be joint ventures, it could be improved income, it could be reduced taxes, there's a whole series of events that we could look at, over the course of the next 12 months, and beyond that, it's just a continuation of all of the initiatives we opened the call with.

Robert Wetenhall -- RBC Capital Markets -- Analyst

Got it. That's very encouraging. Wanted to ask you if you could frame up the quarter for me. It seems like some big-dollar, high-margin projects are getting shifted out of 4Q into 1Q, it seems like you're still extracting great margins out of California. How do we think about California and other west coast margins on a longer-term basis? 28.4%'s pretty awesome. Where does that go in the next two to three years, and how should we think about that piece of the business, in terms of profitability?

Douglas Yearley -- Chief Executive Officer

Bob, I think we're pleased to give you margin guidance for the next year, and we're gonna limit it to that, thanks.

Robert Wetenhall -- RBC Capital Markets -- Analyst

Good. No problem, guys. Congratulations, good luck next year.

Bob Toll -- Executive Chairman

Thank you!

Operator

The next question will be from Susan McClary with Credit Suisse, please go ahead.

Susan McClary -- Credit Suisse -- Analyst

Thank you, good morning.

Douglas Yearley -- Chief Executive Officer

Good morning, Susan.

Susan McClary -- Credit Suisse -- Analyst

You guys have seen a nice improvement in your absorption pace this year, even with the community count being relatively flat. As we think about that growth, and communities coming through next year, can you talk about how we should think about the absorptions, moving with that?

Marty Connor -- Chief Financial Officer

So, we're pretty happy with the three unit increase we had this year, that's more than 10%. I don't think we'll see something quite that sizable next year. The market will dictate, but we hope it goes up modestly.

Susan McClary -- Credit Suisse -- Analyst

Okay, and then, as we think about you coming up to the anniversary of launching the T-Select product, can you talk to maybe some of the things you've learned with that, or is there anything that's been different than what you had expected? And, can you perhaps leverage some of that into some other markets, or other product areas that you have out there, that you weren't maybe initially thinking about?

Douglas Yearley -- Chief Executive Officer

Sure. T-Select exists as a brand in Houston and Philadelphia, it is a millennial-focused product line. As I've mentioned on this call, it's our 3-series Toll Brothers home, so it is still luxury, albeit smaller, and more affordable, to attract the leading edge of the millennials, who are buying homes later, and therefore wealthier. But, for the moment, let's forget the T-Select name, and just think about that buyer. We are selling homes to that buyer in many markets around the country. The Boise market, as an example, is very much driven by an affluent millennial. Jacksonville, Florida is driven by an affluent millennial, to some extent. We have town homes that are doing extremely well in Ann Arbor, Michigan. Which is that buyer demographic, etc. So, whether it is branded T-Select, or whether it is Toll Brothers branded communities, that are just designed for the leading edge of that demographic, you will see more and more of that coming out of us.

I think the one thing we've learned with new product is that we need to have models opened and decorated, before we open the community. Because the buyer wants to see it and walk it, before they buy. So, it's harder out of a sales trailer to pre-sell, and so, to strategically -- we will be opening those communities from decorated models, going forward. That is probably the number one thing we've learned.

Bob Toll -- Executive Chairman

I think one of the other things is that as much as we somewhat direct this to the younger buyer, we are seeing more than we expected from the moved down, slightly older buyer.

Susan McClary -- Credit Suisse -- Analyst

Okay, thank you. That's helpful.

Operator

The next question will come from Megan McGrath with MKM Partners. Please go ahead.

Megan McGrath -- MKM Partners -- Analyst

Good morning. I just wanted to follow up a little bit on your City Living comments. As you mentioned, you have been talking about some of the sort of weaker conditions in the very high end. Just wanted to follow up on that a little bit, versus maybe what you were seeing in the market, at the beginning of the year, or six months ago. Has it shifted at all, has it deteriorated, are we sort of Steady Eddie, versus what you were seeing a few months ago?

Douglas Yearley -- Chief Executive Officer

It's Steady Eddie, and we're pleased with our -- as I mentioned, our continued sales, over in Jersey City, and we're very pleased with the new opening we had last month, actually the end of October now, at Leonard Street, down in Tribeca, and that what we've learned is that, in New York City, if you're at $2,000 a foot, in a good location, you're gonna do pretty darn well, and we are. And, if you're at $800 to $1,000 a foot, in Hoboken, and Jersey City, you're gonna crush it, which we have, over the last year, in both locations. So, I think we're positioned really well, and I'm feeling good right now about the market, based on those buildings I just mentioned to you.

Megan McGrath -- MKM Partners -- Analyst

Great, thank you. And, just a quick follow up. I know you talked about the I-joist issue in the cancellations, and just wanted to make sure, obviously, you saw a decent decline, year-over-year, in closings in the north, was that also due to the I-joist issue, or was that a sort of community counts decline thing, as well?

Douglas Yearley -- Chief Executive Officer

Yes. It was both the I-joist, and a declining community count, coming out of the north.

Megan McGrath -- MKM Partners -- Analyst

Okay, thanks.

Bob Toll -- Executive Chairman

Thank you.

Operator

The next question will be from Nishu Sood, with Deutsche Bank. Please go ahead

Nishu Sood -- Deutsche Bank -- Analyst

Thank you. Just wanted to ask a little bit, dig into the math on the gross margin decline for '18. Of the 80 basis points, I think you were -- broke out to 50 basis points was gonna come from City Living. The remainder, that is going to be driven by the California erosion, I just wanted to understand that a little bit better. Your sales pace in California is at about 2X pace the rest of the company, so I would have thought, even with some erosion of California gross margins, there might even have still been a positive effect. It seems to imply that the closing pace in California is not gonna be as high as that 2X order pace. Just wondering if you could help me reconcile that please?

Marty Connor -- Chief Financial Officer

I think you've done a bit more precise math than we've chosen to get into, in trying to categorize a couple different reasons. So, I guess I would say, don't doubt your math.

Nishu Sood -- Deutsche Bank -- Analyst

Okay, OK, alright. And, second, I just wanted to ask you, on Active Adult. You've been talking about that as a growth priority. Obviously, there's been great, tremendous growth in that, up to I think 19% last year, of closings. What did you come in at this year, and since you're still talking about the growth ability of that division, where could that go in the coming years?

Douglas Yearley -- Chief Executive Officer

Hold on one second, as Gregg pulls the numbers together. So, right. 2017, active living, which is our 55-and-over business, was 19% of units, and for '18, it's projected to be about 20%.

Marty Connor -- Chief Financial Officer

But, there are a number of markets where we don't that product offered, and we are looking to find land for that product.

Douglas Yearley -- Chief Executive Officer

And, we have a number of locations where land is controlled in significant communities, that will come through in '19.

Marty Connor -- Chief Financial Officer

Right.

Douglas Yearley -- Chief Executive Officer

So, this is a growth business, based on the land that we control, and some of the deals that we're playing with. And, the appetite.

Bob Toll -- Executive Chairman

I think the California deals and the exchange deals were done yesterday, coming through the pipe.

Douglas Yearley -- Chief Executive Officer

Right

Marty Connor -- Chief Financial Officer

Right.

Nishu Sood -- Deutsche Bank -- Analyst

Okay, thanks for the call.

Bob Toll -- Executive Chairman

Thank you, Nishu

Operator

The next question will be from Steven Kim with Evercore ISI, please go ahead,

Trey Morrish -- Evercore ISI -- Analyst

Hey, it's actually Trey on for Steve, with respect to land, what was the total dollars spent in the quarter, for acquisition development, and how are you guys thinking about land going into 2018? Do you think about that your land spend's gonna keep up with the revenue growth that you're expecting, or do you think it will grow a little bit faster, a little bit slower, given how you're looking into continuing to ship to more options? Crosstalk

Marty Connor -- Chief Financial Officer

Yeah, Q4 land spend was $192 million, and improvement costs, another 163. And then, some soft costs gets you into $380 million for the quarter.

Douglas Yearley -- Chief Executive Officer

And, with respect to '18 land spend, we're opportunistic. We will spend as much as we need, on the good deals that are presented to us. But, I would say, with the company growing, and with our appetite, I am hopeful that the land spend will increase in '18.

Trey Morrish -- Evercore ISI -- Analyst

Okay, and then, turn to City Living for a bit. I know you [inaudible] [00:51:39] here in the greater Manhattan area, and then down in Maryland. But, how has the continued prospecting out for new buildings, or new types of developments in other cities gone, over the past 3 to 6 months?

Douglas Yearley -- Chief Executive Officer

So, we have two properties in greater LA, that we control, and are excited to launch City Living in the LA market. We're continuing to look in San Francisco, Seattle, Miami, Washington DC, Boston --

Bob Toll -- Executive Chairman

Philadelphia.

Douglas Yearley -- Chief Executive Officer

Philadelphia, we have a pretty cool opportunity in Philadelphia, that we're negotiating on right now. Plus, a second property we control, that we're going through the entitlements on. So, I continue to be hopeful that the City Living brand will be bigger, and be more geographically spread.

Marty Connor -- Chief Financial Officer

So, just to follow on that term, control, control often means we still have diligence points to get through, or approvals to get through. So, just because we control it doesn't necessarily mean we're gonna execute on it.

Trey Morrish -- Evercore ISI -- Analyst

Got it. Alright, thanks very much, guys, Appreciate it.

Operator

Our next question will be from Mike Dahl, with Buckley's Please go ahead.

Mike Dahl -- Buckley's -- Analyst

Hi, thanks for taking my question. I had a question just, first, around tax reform, and more philosophically, if you think about the corporate rate potentially going permanently lower, how do you think that affects land purchasing decisions? Do you really think that builders will fundamentally harvest more cash and returns out of the existing business, or do you think it -- especially in more land constrained markets, you effectively have some work in that in due higher land prices?

Douglas Yearley -- Chief Executive Officer

Mike, we'll have to see how it plays out. We're certainly not approaching tax reform as an opportunity to pay more for land.

Bob Toll -- Executive Chairman

Or a reduced margin.

Douglas Yearley -- Chief Executive Officer

Or a reduced margin. It's a competitive market, buying land. Sometimes we get lucky, and we're the only ones talking to a seller, but in most cases, sophisticated sellers are running a process, or talking to a number of different buyers, and that competitive environment dictates how we do, subject, of course, to making sure we're not diluting margins. So --

Marty Connor -- Chief Financial Officer

I think the tax theory is that reducing the rates will lead to more growth, more jobs, an improved economy. Whenever those factors come together, the housing prices seem to go up, and house builders are in a better position.

Mike Dahl -- Buckley's -- Analyst

Right, got it. Secondly, just a -- I know this is relatively small, but the decision to on-balance sheet the rest of the -- can you talk about just what was driving that decision, to finish out the project yourselves?

Marty Connor -- Chief Financial Officer

I think some of the reasons we looked at a joint venture are, because there's construction risk, there's development risk, there's marketing risk, there's execution risk. We took most of those risks off the table, as the building got built, and three quarters sold, and delivered. And, we just said, it's strategically important for the partner to get cashed out, and improve their return on equity, and their IRR, and it's pretty good for us, because we get a good gross margin, and we put it on balance sheet. So, it was a win-win as we looked at it, in a different timeframe, or piece of the development cycle, than at the outset.

Mike Dahl -- Buckley's -- Analyst

Okay, got it. And, if I could sneak one quick one in. Marty, you mentioned the three units that were expected to close in 4Q. I think all of those are concentrated at one project. My understanding was, there's potentially two of those three haven't been actually sold yet. Could you just give us an update on those units? Have they been sold, are they in backlog, or how should we think about timing, here?

Marty Connor -- Chief Financial Officer

It's two different projects, and all three units have been sold, and all three are expected to settle in the first quarter.

Rick Hartman -- President and Chief Operating Officer

It's due by the end of this week.

Marty Connor -- Chief Financial Officer

By the end of this week. I'm looking at Rick Hartman here, to see how confident he is in that, and he's nodding his head up and down.

Mike Dahl -- Buckley's -- Analyst

Alright. Thanks.

Operator

The next question will be from Mark Weintraub, with Buckingham Research. Please go ahead.

Mark Weintraub -- Buckingham Research -- Analyst

Thank you, just a couple follow ups. One was, could we also get a breakdown of your deliveries for fiscal '17? How much came from optioned, versus owned lots?

Marty Connor -- Chief Financial Officer

Well, by the time we begin construction on the lot, we own it. So, at some point, everything's an optioned lot, because we have it in diligence, and we haven't closed on it. So, we control it, once we put it under contract, even if the diligence period hasn't expired. So, that's a really challenging question for us to answer, in the manner you want us to.

Mark Weintraub -- Buckingham Research -- Analyst

Kind of direction, just so I can get a sense. Is that 80/20, where you went from to the 65/35, is that sort of maybe -- would the 80/20 have been more indicative of the type of underlying ownership of the lots, at the relevant times?

Marty Connor -- Chief Financial Officer

I'm gonna say we just don't know. So, I don't wanna hazard an estimate or a guess.

Mark Weintraub -- Buckingham Research -- Analyst

Sure. And then, second, on the JV and other income, I know you've still got that interest in the hotel in Brooklyn Bridge Park. Is that included in the guidance for '18, or is that something that could provide upside, if that were to come to pass?

Marty Connor -- Chief Financial Officer

There's a moderate level of operating income, but not a transaction gain.

Mark Weintraub -- Buckingham Research -- Analyst

Okay, great. And then, lastly, you mentioned that you're evaluating opportunities now to create an off-balance-sheet land development investment. How recent is that, that you started to kind of look at that possibility? Is that something you've been doing for a while, or is this more with what's been going on, you've focused on it more?

Bob Toll -- Executive Chairman

I think we've always had it as something we've considered, but I think -- and, the industry has looked at that type of structure for decades, but a couple of the recent transactions, as mentioned earlier, have heightened our interest in it, and given us -- I'll say more optimism that we might be able to get something done.

Mark Weintraub -- Buckingham Research -- Analyst

Okay, thanks very much.

Operator

The next question is from Jack Micenko, with SIG. Please go ahead.

Jack Micenko -- SIG -- Analyst

Hi, thanks for fitting me in. Curious what percentage of communities in the quarter you were able to push price on, and then, if you'd maybe frame out some regional relative leaders and laggers, on the pricing side?

Douglas Yearley -- Chief Executive Officer

One second, Jack. While Gregg's getting specifics, the leaders are out west. We've had the most pricing power in Southern California, Seattle, Northern Cal, Reno, Michigan. Believe it or not, Boise has had nice pricing power. And, smaller market for us, Orlando would round out that list of the most pricing power.

Jack Micenko -- SIG -- Analyst

And then, while he's looking, I get another follow up. I know Terrapin Row, I know that's not a big business for you guys overall, but I wanna understand it more. Was that more of a financial decision? Or, was that more strategic, how we think about the student housing prospects, in line with that sale?

Douglas Yearley -- Chief Executive Officer

Our partner in that property, who has 75% of the equity was inclined to sell, after full stabilization. We got the highest price, I believe ever, for a student housing property. We ran a process, and sorta had a number in mind, that if we hit it, we go, and we beat it. So, it was a great return, and a very good income to Toll, and a very happy partner. And, as we said all along, some of the apartments, whether they be student housing or market, will be held long term, and some will be sold as stabilization. And, that was one that was performing very well. Was 99.9% occupied, which, I think that means one bed out of --

Marty Connor -- Chief Financial Officer

1,492 out of 1,493.

Douglas Yearley -- Chief Executive Officer

Was not vacant, and that's the story behind that one.

Marty Connor -- Chief Financial Officer

So, our business mentality, strategy for the apartment business remains the same. If we build three, we'll probably sell one. And, sometimes, that sell is a portion of our interest, and sometimes it's 100% of our interest. So, that'll be a 2018 first quarter gain, that we've projected into $40 million of guidance we've given you for the first quarter, JV and other.

Jack Micenko -- SIG -- Analyst

Okay, great. Thanks.

Operator

The next question comes from Jade Romani, with KBW. Please go ahead.

Jade Romani -- KBW -- Analyst

Thanks very much. In terms of construction efficiency, I was wondering, is there an opportunity to further increase the amount of offsite integrated work you guys already do?

Douglas Yearley -- Chief Executive Officer

So, we have four panel and trust plants, that serve the mid-Atlantic, the northeast, and the Midwest. We are certainly, as all of the other builders are, evaluating some of the new start-up companies, that are talking of robotics, and much more of the home produced offsite. We've met with a few of those providers, and it may come to the industry over time. We don't see anything today that's a game changer. Frankly, we haven't seen much yet that is all that better or more sophisticated than the four plants that we've had for a long time. Transportation in our industry's a big deal, because you're not moving computers or refrigerators on a truck, you're moving parts of houses, on local roads and highways. And, for the moment, very little has changed, and I think it's gonna take some time, but it's certainly an interesting time in our industry, because there appear to be more and more tech companies that are experimenting, and trying to figure out how to make it work.

So, we'll be on top of it, and one day, but not today.

Jade Romani -- KBW -- Analyst

In terms of the amount of JV income, could you quantify what proportion comes from City Living, and what the other -- whether it be land joint ventures, Gibraltar, what the other contributions are?

Marty Connor -- Chief Financial Officer

For 2017? Do you have that, Greg? I don't have it off the top of my head. I know $22 million is the apartment business, consisting of roughly $27 million of gains on transactions, and $4 or $5 million of overhead, as we build out the rest of the business. We have -- how much was the other income? Which is just kinda routine. I got it here, too. $53 million was just title insurance, and internal subsidiaries. With JV and other, the vast majority last year was associated with our Peer House project, that was nearly $63.5 million. We made $8 million at the Sutton, $8.5 million at the Sutton, before we put it on balance sheet. And, those are the biggest components of the JV.

And, the other, our title insurance business, which is a pretty good run rate business, you can kinda count on this. It should kinda grow as we grow, was around $13 million of income, and then, management fees for some of the joint ventures was close to another $10 million. Actually, $13 million. And then, $5 million of repaying customer deposits on cancellations. So, a pretty healthy year, and we're well on our way to replacing that sizable set of income from the Jupiter -- I'm sorry, the Peer House project, and a lot of that will come from the apartment business, that I said is gonna double next year.

Jade Romani -- KBW -- Analyst

And, in terms of supply dynamics, when do you anticipate peak deliveries, for the market, in New York City? Is it 2018, to peak, or 2019, do you think?

Marty Connor -- Chief Financial Officer

Well, I think that all depends on whether we find new projects, and we do have a couple that we have under control right now.

Jade Romani -- KBW -- Analyst

Thanks very much.

Operator

The next question will be from Ken Zenner of KeyBank, please go ahead.

Ken Zener -- KeyBanc -- Analyst

Afternoon, gentlemen.

Marty Connor -- Chief Financial Officer

Good afternoon, Ken.

Ken Zener -- KeyBanc -- Analyst

So, your question I have is on SG&A at 10%, with your rez guidance where it is. Can you talk to your variable cost, if that's staying the same? Because if it is, it seems like your fixed cost in communities is going up quite a bit, and can you expand on that? Thank you.

Marty Connor -- Chief Financial Officer

Well, I think we continue to see our investment in our sales team, and in our model homes pay dividends, in terms of our topline growth, and we mentioned earlier that we continue to make investments in the G&A line, for our technology initiatives. But, I think overall, G&A, as a percentage of revenue is gonna be a bit flat, whereas the sales component is gonna go a bit up, in terms of -- I'm sorry, what are you saying there, Greg?

Gregg Ziegler -- Senior Vice President and Treasurer

So, in terms of absolute dollars, ask next year versus this year. In absolute dollars.

Marty Connor -- Chief Financial Officer

Fine. In absolute dollars, S is gonna go up, right, OK. Thank you.

Ken Zener -- KeyBanc -- Analyst

Thank you.

Operator

The next question will be from Will Randow with Citi, please go ahead.

Will Randow -- Citi -- Analyst

Hey, good afternoon, and congrats on the progress, as well as comings on the buyback. So, I was hoping to bridge a gap between two or three different data points. Specifically, firstly, you mentioned demand was nearly as strong as 2005, and I'd love to hear your feel about absorptions versus price today. Conversely, secondly, the last time you saw this kind of bump up in cancellation rate was the first fiscal quarter of 2006. And, obviously, your margin of expectations are a bit lower for next year, on a pre-tax basis. So, I guess, can you help me bridge the gap between those three data points, as well as give out letter grades for each of your markets, as Bob used to do?

Marty Connor -- Chief Financial Officer

I think the cancellation rate, we mentioned earlier, is entirely attributable to the I-joist issue, where, of the 350 impacted homes, we had cancellations on roughly 10% of them. That all happened in the fourth fiscal quarter. In addition to that, we had 20 buyers swap lots, we didn't count those as cancellations, and we didn't count those as new sales. I think we've gotten away from the letter grades, and we'll stay away from the letter grades, but maybe Doug wants to make some comments on some of the healthier markets.

Douglas Yearley -- Chief Executive Officer

Sure. Without letter grades, I can give you the A's. There's no snow right now in Colorado. Southern Cal, I mentioned, very hot. Northern Cal, very hot. Seattle. We're actually putting houses on the market with a recommended bid price, and letting the buyers submit a sealed bid, to take it higher than our price sheet. Las Vegas, very strong. Reno, very strong. Northern Virginia, come back. It was slow to recover, and now it's clicking. One of our hotter markets. New Jersey has broken into the top five. And, New York City Living, on absorptions actually leads the company, because of some of the success we've mentioned on this call, at our new openings, and over in Jersey City. So, I could add a few more. Pennsylvania's done very well. Colorado's done very well. Michigan has done very well. So, there's a nice handful or more, of some highlighted markets that are doing A-level work.

Will Randow -- Citi -- Analyst

Thanks for that, and lastly, do you have a plan to reduce the amount of debt outstanding in the next couple of years, or are you OK with the current notional outstanding of a little over $3 billion? And, I guess also, can you skim over tax reform carveouts for real estate?

Marty Connor -- Chief Financial Officer

So, I don't think we have any particular plans, with respect to debt. We'll evaluate where rates are when debt matures, right now, we enjoy a 35% or so, 34.5% net debt to cap ratio, in our mix of long term and variable rate debt, gives us lots of room in our weighted average maturity, and our weighted average interest rate. We're pretty happy with those things right now. What was the last question, Will?

Will Randow -- Citi -- Analyst

In terms of carve-ups for real estate, in regards to the new tax reform?

Marty Connor -- Chief Financial Officer

So, as we look at our interest as a percentage of, I guess pre-tax income, we have quite a bit of room to go, before we bump up against the carve out of 30% of -- interest can only be deducted up to 30% of your pre-tax income. So, we're comfortable with that.

Will Randow -- Citi -- Analyst

Thanks Marty and Doug, and congrats again.

Marty Connor -- Chief Financial Officer

Thank you.

Operator

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Doug Yearley, for any closing remarks.

Douglas Yearley -- Chief Executive Officer

Thank you, Chad, thanks everyone for listening in, and for your support. Have a wonderful holiday season, and we'll see you in the new year.

Operator

The conference is now concluded. Thank you for attending today's presentation, you may now disconnect.

Duration: 74 minutes

Call participants:

Douglas Yearley -- Chief Executive Officer

Bob Toll -- Executive Chairman

Rick Hartman -- President and Chief Operating Officer

Marty Connor -- Chief Financial Officer

Fred Cooper -- Senior Vice President, Finance and Investor Relations

Joe Sicree -- Chief Accounting Officer

Kira Sterling -- Chief Marketing Officer

Mike Snyder -- Chief Planning Officer

Gregg Ziegler -- Senior Vice President and Treasurer

Don Salmon -- President, TBI Mortgage Company

Megan McGrath -- MKM Partners -- Analyst

Stephen East -- Wells Fargo -- Analyst

Alan Ratner -- Zelman & Associates -- Analyst

Robert Wetenhall -- RBC Capital Markets -- Analyst

Neil Basu Mulligan -- JP Morgan Securities -- Analyst

Trey Morrish -- Evercore ISI -- Analyst

John Lovallo -- Bank of America -- Analyst

Carl Reichardt -- BTIG -- Analyst

Nishu Sood -- Deutsche Bank -- Analyst

Susan McClary -- Credit Suisse -- Analyst

Ryan Tomasello -- KBW -- Analyst

Will Randow -- Citi -- Analyst

Mark Weintraub -- Buckingham Research -- Analyst

Jack Micenko -- SIG -- Analyst

Ken Zener -- KeyBanc -- Analyst

Alex Barron -- Housing Research Center -- Analyst

Mike Dahl -- Buckley's -- Analyst

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