Indiana's South Dunn Street puts a colorful new spin on planned communities.

There's a new neighborhood in the college town of Bloomington, Ind., whose bright colors are not only turning heads, they're providing house-hunters with a "third way" between new construction on the outskirts of town or older city homes that need costly renovations. The neighborhood is called South Dunn Street, and its new construction, clad in crayon-bright hues, offers what developer Matt Press calls the alternative to beige, vinyl-clad suburbia.

"So much of my development is about emotion," Press says, and color plays a major role. "You're creating an environment where people feel happier, stimulated and more alive." South Dunn Street is grounded in the principles of New Urbanism, which combines traditional neighborhood layouts with modern amenities, yards, garages and porches, all within walking distance to town, shops, parks and schools.

Early in the planning stages, Press came across images of Scandinavia's vibrant, multicolored homes, which are instantly uplifting, especially during the gray days of winter. Inspired, Press went to his project's architects and told them he wanted to make a strong color statement. Ernesto Castañeda, an architect at Kirkwood Design Studio, loved the concept and came up with a mood board of Sherwin-Williams color-combination ideas, such as Scanda (SW 6529) with Colonial Yellow (SW 0030) trim.

"We always thought it should be a cheerful place, not a dreary, all-the-same-tan condition," Castañeda says.

Although the architects offer suggestions, there are no color restrictions. Each homeowner gets to choose two colors: one for the body of the house and another for the trim. Just when the project crew thought they were going to be disappointed – a house had been painted white, of all shades – the homeowner picked Robust Orange (SW 6628) for the trim. As Press says, "Nobody with a beige mentality will buy into this project."

When Kathryn Roszko moved to South Dunn Street with her husband and their two sons, she chose a colorful cottage look of purple (Mesmerize, SW 6544) with light green trim (Ryegrass, SW 6423) and a bright yellow porch and picket fence (Colonial Yellow).

"We didn't want to be boring," Roszko says, adding that she loved living in South Dunn during her family's brief detour from Massachusetts. Their home's distinctive hue gave it a strong identity. "We were 'the purple house' – that was our address."

Real estate agent Brian Lappin often sees smiles on clients' faces when he drives them through South Dunn Street, which he feels is a breath of fresh air compared to typical cookie-cutter suburban neighborhoods.

"A lot of people want to live closer to town, in an interesting house," Lappin says. He appreciates that South Dunn Street offers something new, that's well-engineered, fairly green and fun.

"It's entertaining," Lappin says. "People are jazzed by it; there's a buzz."