Thursday, May 17, 2007

Toll gives Colorado a 'C'

In a conference call discussing F2Q07, CEO Robert Toll issues his grades for performance in various markets:

Thank you. San Antonio, I said we haven’t got our product up and running as we should yet, so it’s only a C market, but suspect it is really a B. Northern California averages to be a C market for us, though there are some pockets that are Bs and some that are Ds. California southern market is a C market for us. California Palm Springs is a C market for us. Arizona, other than for the new special Wingate Ranch community, I would rate as a D-minus. Vegas is definitely an F. Reno is an F. Colorado is a C.


So there you have it . And here's the end of the call:

Timothy Jones - Wasserman & Associates

Bobby, this is the best breakdown that anybody gives, but you have quite a bunch more Fs than you had the last time. Does that imply that the business -- which I think you are saying -- is the business at best is going downward. Is that a correct interpretation?

Robert I. Toll

Yes.

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Finally, here's Seeking Alpha's latest agglomeration of housing-related articles. According to RealtyTrac's sometimes maligned foreclosures ranking, Reuters reports that CO came in 2nd to NV in April with 1 foreclosure for every 314 HH's, while among cities, Greeley was no. 3 (1:165) and Denver no. 10 (1:236). Nationally, foreclosures were down 1% from a two-year high in March, and up 62% from a year ago.

Sales & Marketing at Four Season



A press release announces that Distinguised Group will market the 102 residences at the new Four Seasons in Denver. Here's the pitch:

Four Seasons Private Residences Denver will offer homeowners professionally-designed dwellings of distinction, access to the services and amenities of Four Seasons Hotel, and the best of the city's surrounding arts and culture, entertainment, retail and recreation on their door step. It will offer a mix of floor plans from one-bedroom pied-a-terres to two-level penthouse suites, and have the added convenience of a multi-level, underground parking garage. The Private Residences will begin on the 18th floor and extend to the 45th floor with some of the most spectacular mountain, front range and cityscape views.

In addition to the physical features of the Residences, owners will enjoy 24-hour Concierge service to fulfill their every need, as well as access to a dazzling array of services including in-residence dining and catering by renowned Four Seasons chefs, on-site dry cleaning and laundry, turn-down service, housekeeping, valet and limo service. The residents will also enjoy use of the in-house spa, pool and fitness center, owners' private lounge and a host of other amenities.


Here's the copy from the official website:

Your new, urban-oriented lifestyle of convenience and comfort is now available in Colorado's capital city.

Other world-class cities have had them for years: Luxury hotels that include ultra-exclusive private residences. Denver has never experienced this kind of personalized service and unparalleled access to such premium amenities in an urban address; until now.

Introducing Four Seasons Private Residences Denver. The newest landmark-and an amazing place to call "home."

For the first time, discriminating homebuyers can have it all: The ultimate in Four Seasons Hotel services with the comfort and privacy of personal ownership. Majestic views of the Front Range and high plains of Colorado with the convenience of sophisticated downtown living. All this packaged together with a level of care and amenities previously unavailable outside cities like Paris, London and New York.

A completely new tower of 45 floors and just 102 luxury suites of 965 sq. ft. up to 6,100 sq. ft., the Four Seasons Private Residences offers all the Four Seasons Hotel services, facilities, and amenities of Denver 's first Four Seasons Hotel to its residents. Located on the 4th through 16th floor, the hotel gives the tower's private residents unequaled access to all its many comforts and services on an as-needed basis.

Living here means just about anything you desire is but a phone call away. Need someone to detail your car or water your plants while you're away? Arrange and cater a party for 30 at the last minute? Schedule an herbal body wrap, manicure and massage at a spa just a few floors away? It's as simple as picking up the phone and speaking with your concierge, available 24-hours-a-day and every day of the week. It's like being a treasured hotel guest while never leaving your own home.

With this week's groundbreaking at Spire and hope that 1401 Lawrence will go forward, the 14th Street Corridor has the potential to transform Downtown Denver and its skyline with some buildings that will loom large, and more importantly, add hundreds of residents to downtown.

Saturday, May 5, 2007

South Of Border

The LAT writes about the effects of the housing slowdown on Mexican immigrants working construction jobs. Nearly 3 million Latinos, 3/4 of them foreign-born, work in the U.S housing industry, according to the Pew Hispanic Center.

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The old adage, that a homeowner shouldn't be in the house when it's being shown to a prospective buyer, definitely applies in this case:

JANESVILLE, Wis. (AP) -- A couple who'd been checking out a house for sale in Janesville, Wisconsin got quite a shock. They found the 55-year-old homeowner dead in her bed.

Their real estate agent was standing in the dining room while Justin and Colleen McKeen walked through the home Monday night. She knew something was wrong shen she heard Mrs. McKeen scream.

The real estate agency listing the home says it had been on the market for a while. Authorities say they don't suspect foul play in the death of the home's owner, Linda O'Leary.

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Andres Duany talks abouts new urbanism [video]. A granny flat is a bedroom that has gravitated in the house so that it can be rented out. Planning departments, however, have vigorously stamped out this configuration as much as possible out of fear of duplex-ing a neighborhood and "overloading" a home.

Here's Duany's firms project tearsheet for Bradburn Village in Longmont (Colo.).

Sunday, April 8, 2007

The Fed Stands Pat

Kiplinger writes that the "Fed Won't Ride to Housing's Rescue" as it keeps its eye on inflation. This concern stems from the Fed's belief that the economy may heat up during the second half of this year. The Federal Open Market Committee (FOMC) has conceded that the economy has weakened since it last met on Jan. 31, when it stated that housing had begun to stabilize. It more recently stated that "adjustment in the housing sector is ongoing", perhaps caught flat-footed by the unfolding subprime mortgage fallout. The Fed still isn't overly worried about the housing sector pulling down the broader economy. The Kiplinger article predicts that the 30-year fixed rate mortgage will increase from 6.1% to about 6.4% by the end of 2007.

Naples...Florida

A Businesswire story sings the praises of mixed-use development. First, it points out that this concept existed since the beginning of American cities in the 17th century, when, for example, there would be homes above small shops. Then, the segregation of land uses began in the 1920s, mainly in an effort to keep industrial uses away from residential and lighter commercial uses.

The mindset of many Americans today is changing. They want to be in a place where there is activity, where they can walk to work, get a cup of coffee, enjoy community events and rely less on their cars, said Jack Antaramian of Antaramian Development Group, a Naples, Florida-based company that specializes in mixed-use development.

Antaramians newest offering, Naples Bay Resort, encompasses three distinct locations within the City of Naples that together provide a variety of residential and commercial environs, each with its own unique character, including a state-of-the-art marina, a four-star condominium hotel, a 15,000 square-foot club that just opened, and waterfront shopping and dining. Renaissance Village, the third and final component of Naples Bay Resort, will have 300 luxury residences with up to 2,935 square feet of living space. Pre-construction pricing starts from the mid-$700s. Construction is set to begin in the summer. In addition to the luxury residences, Renaissance Village will also have over 200,000 square feet of commercial space, including a boutique grocery, restaurants, shops and office space. Additionally, Florida Gulf Coast University will locate its Naples Educational Center and Renaissance Academy there, which includes a 350-seat performance venue.

Keys to success:

You need to be careful to have the right amount of retail and commercial uses and the right residential density, said Matthew Kragh, partner of Architectural Network Inc., a Naples, Florida-based architectural and planning firm and the designer of Naples Bay Resort and Renaissance Village. There needs to be a sense of cohesiveness and connectivity with the projects surroundings. Renaissance Village is a great example of this with its mix of residential, commercial and retail. Plus the bonus of a performance venue and open spaces for community events in an open and ungated location. Its important to see activity with people enjoying all the project offers.

Some of the challenges of mixed-use development cited are the presence big box retail with vast surface parking lots and the need to build at much higher densities (than surrounding areas) in order for these projects to make sense financially.

For many of us, deciding where to live has a lot to with affordability. For ski/ride bums, this often entails couch surfing, living in closets or commuting to resort communities. The Town of Vail wants 30% of its workers live in Vail, which is about where it stands right now, but there is a concern that escalating rents and home prices will drive too many workers out of Vail. A story in the Vail Daily introduces an eight-year resident and Australia native who plans to move this year to New Hampshire since "rent these days is out of control". Vail's $1 billion Lionshead redevelopment will be subject to stricter affordable housing rules. Council Mark Gordon is pushing a program that purchases then sells "buy downs" to qualified buyers with ownership subject to deed restrictions.

Saturday, April 7, 2007

State Houses

"Housing Slump Pinches States in Pocketbook" (NY Times, Apr. 7): "State tax revenues around the country are growing far more slowly this year and in some case falling below projections, a result of the housing market slowdown that has curbed voracious spending on real estate, building materials, furniture and other items... Nowhere is the downturn more apparent than in Florida, where tax revenue is projected to drop this year for the first time since the energy crisis of the 1970s... Those events not only threaten revenue streams for things like building materials and labor, but also affect spending on big-ticket items like cars and furniture, which many homeowners financed with home equity lines of credit... In one hint of how much Floridians were relying on property wealth during the real estate boom, 16 percent of new car purchases here were being made with home equity loans in 2006, compared with 7 percent nationally... In California, the percentage was even higher — about 30 percent, said Art Spinella, the firm’s president... Arizona, California, Florida and Nevada, the chief beneficiaries of the housing rush, are also expected to suffer disproportionately from the slump. From late 2005 to late 2006, existing home sales fell by 21 percent in California, 27 percent in Arizona, 31 percent in Florida and 36 percent in Nevada, the steepest drop in the nation... others expect the revenue lag to last two years at most, because with the exception of industrial Midwestern states like Michigan and Ohio, the economy remains relatively healthy.... Alan Greenspan, the former Federal Reserve chairman who has expressed worries about the housing market, has said he believes there is a one-in-three chance the economy will slip into recession in 2007.

Michigan's House of Representatives is fielding a bill that would provide property tax relief from the state's "pop-up tax".

Massachusett's Sec. of State is urging to Legislature to make foreclosures a little bit less automatic for those facing the possibility of losing their homes by forcing mortgage lenders to get permission from a local judge before seizing a foreclosed home.

Here's some in-depth info on Northern Colorado's housing market, primarily Mar. 2006 vs. Mar. 2007.

Las Vegas developer Jim Noteware takes a personal read on the direction of the Las Vegas residential real estate market in a series of essays.

I’ve come to the conclusion that the reason for the confusion, denial and dismay is that few local participants have previously been through anything like our current situation. The Las Vegas residential market has been so strong for so long that few know how to interpret and respond well to the new market signals they are receiving. Some are overreacting; some are not reacting at all. Very simply, few know how to behave and plan for the future when the old rules do not work as before... Three primary causes can be ascribed to the current real estate softness: overbuilding, media confusion and now, of course, buyer skepticism.

Yahoo and RealtyTrac have teamed up to beef up the search giant's foreclosure feature on its real estate page, which prominently features its mapping tools, including an option for a map-based search for foreclosures.

The Economist worries about overreach from legislators, many of whom are eager to score points with their constituents suffering from the sluggishness of the housing market in their home districts. In its characteristically dry tone, the magazine smacks at America's homeownership "fetish": Populist politicians may well make much of the contrast between a second house in the Hamptons and no house at all. Instead, they should stop making a fetish of homeownership. That people are free to borrow to buy their own home, should they wish, is fine. That politicians should encourage homeownership for its own sake is not. That they foster it with tax breaks, as they do in America, is daft.

CNN/Money link the housing slowdown to sluggish auto sales.

HUD is fielding more complaints, a 65% increase in 2006 vs. 1996.

For fiscal 2006, HUD said the basis of 40% of the complaints was disability, 39% was race, with familial status and national origin each accounting for 14%. Other reasons for complaints included sex, religion and retaliation. Complainants most often alleged discrimination in the terms and conditions of the sale or rental of housing, or refusal to rent.
HUD believes that this upsurge in complaints has resulted from its outreach and education efforts. Nonetheless, its staffing has been reduced by 20% since 1993.

In Austin, New Urbanism is arriving in the form of affordable homesteading at the cite of the city's extinct Robert Mueller Airport: Homesteaders adventurous enough to settle this new territory can register – through April 30 – to become one of the "Mueller Pioneers," the first 340 households to stake a claim at Mueller. Already, more than 4,500 Austinites enticed by the future New Urbanist community – on a 711-acre site east of I-35 near 51st Street that today looks like, well, an abandoned airport – have registered to receive information about possibly living at Mueller.

Tuesday, April 3, 2007

Meet Alt-A, the New Subprime


On Wednesday's page A2, the WSJ runs a story about continuing bad news surrounding growing late payments, not just among subprime loans but also Alt-A, the category between subprime and prime that doesn't typically require income and asset verification. Late payments in this category rose to 2.6% in Jan. vs. from 2.3% in December vs.1.3% in January 2006. Mark Zandi, the oft-quoted chief economist at Economy.com, predicts that median home prices will fall almost 5% this year, the biggest drop since the Great Depression. This appears to be a classic credit crunch in the work as lenders tighten standards, preventing some potential buyers from getting loans. Combined with rising foreclosure, the shrinking availability of credit looks to be putting downward prices on home prices. The next couple or few years could be ugly or uglier as some borrowers face "resetting" mortgages, i.e., higher payments. That said, not all markets are reeling. The last sentence of the article: "Prices are falling in some areas but still rising in others."

Today's WSJ Marketbeat runs commentary about "More Housing Pain". He quotes NAR's characteristically rosy David Lereah, who explains that the 8.5% drop in pending new home sales since last Feb. wasn't so good because of "unusually bad weather in February" [Hey, what about bad weather in Colorado circa Decemeber and January?]. Citibank's Lewis Alexander strikes a much more ominous tone: "The U.S. housing market faces considerable challenges, notably the overhang of unsold [and resale?] new homes, the tightening of lending standards for new mortgages, a and a substantial volume of adjustable-rate mortgages that should reset to higher interest rates over the next couple of years." Ouch!

Taking light to Park Meadows...or not

The WSJ today reported on page A4 that "New Century Buys Time With Bankruptcy Filing", namely in the form of Chapter 11 bankruptcy in order to allow NC time to sell its business.
"The subprime business is dwindling as fast as it grew during the housing boom of the first half of this decade. the dollar value of subprime loans granted this year is likely to drop 30% from last year's total of around $600 billion," said Bear Stearns. Now there are signs that "Alt-A loans", a category between prime and subprime loans, may be susceptible to a similar retraction. The article goes on to say that remaining subprime lenders have quickly tightened up their rules, eliminating no-money-down loans and stepping up income verification.

Back in Denver, or south of Denver, RTD has criticized operators of the Park Meadows mall for planning to build a circuitous walkway to the adjacent County Line light rail station rather than, say, a more-or-less straight line, reports the Denver Post. Apparently, Nordstrom doesn't want light riders (criminals? thrifty spenders?) from walking through its store. The plan had been for RTD to spend $4.5 on this more direct path pointing towards Nordstrom, it appears that the
city of Lone Tree, where Park Meadows is located is going to build the alternate ped route along the mall's ring road, which, if you haven't ever been to Park Meadows, is like the edge of any mall's vast parking lots - not somewhere where you're ready to take on -- with your own two hands and feet -- ravenous shoppers roaring away with their loot.

RTD director Bill McMullen: "I'm going to walk right across the parking lot" and into Nordstrom from the light-rail elevator tower.

There does happen to be an existing shuttle that connects light rail riders to the mall, but RTD states that "Park Meadows has determined that they will no longer fund their portion of the full-week service and it will recede to weekends only". Service had been daily until February 19.

In other news, downtown Denver office space remains red hot. John Rebchook reports that many would-be Class A tenants are being steered to slightly lower quality properties after rents rose 28% in Class A from $20.68 to $25.68, according to Studley, a commercial real estate firm. This bodes well, at least indirectly, for the residential side, in the sense that jobs are staying and growing in the CBD. Now if only the Rockies could have a winning season, downtown would really be on a roll.

[Image credit: SEMA Construction]

Sunday, April 1, 2007

Ups and downs, mostly downs

The NAHB/Wells Fargo index of homebuilder fell for the 1st time since Sept. to 36 (50 or less means "poor"; the index rose from 35 to 36 in the West). Builders are apparently skittish about the spectacle of tightening mortgage lending standards. Toll Bros. CEO Rbt. Toll says that cancellations remain high. Reuters reports that housing's impact on jobs appears to be spreading beyond construction jobs closely tied to homebuilding.

This just in...Vail has ahousing affordability problem, and the local government plans to "approve new affordable housing rules that outline two methods for adding affordable housing to the denser areas of Vail Village, Lionshead and the West Vail mall area. They include requiring developers to provide housing for a certain amount of jobs they create and changing zoning to require that a certain percentage of new homes or housing be affordable." This sounds pretty vague?

The S&P/Case-Shiller Home Price Indexes are decelerating, especially in Detroit (-6.9%) and Boston (-5.6%).

Tuesday, March 13, 2007

Woonerf (voon-erf)

[completestreets.org]
Housing woes not affecting economy: Paulson

Reuters
Tuesday, March 13, 2007; 7:04 PM

[Reuters] U.S. Treasury Secretary Henry Paulson acknowledged the effects of the meltdown of subprime mortage market: I continue to believe the U.S. economy is healthy...We have had a significant housing correction in the U.S. You can't have a correction like that without causing some dislocations. It's too early to tell whether it's bottomed, I believe it has...there's some fallout in the subprime mortgage market ... but it's largely contained.

Paulson alluded to softening concerns about inflation, citing the economy's more "sustainable" pace.

The backdrop of today's comments was the Dow's second biggest drop of the year, influenced by concerns that the deteriorating suprime lending picture could adversely affect the broader economy, a fear that is more psychological than fundamental, perhaps, according to a portfolio manager quoted in the article. The dollar fell against most major currencies, and there was a flight to safety with rising treasury prices.



OK, so what's a woonerf. The Seattle Post Intelligencer defines this Dutch term for a "living street" as Dutch for "living street" as a new way of designing streets to be people-friendly open spaces, city planners say. It refers to a European concept of creating roadways that favor pedestrians and bicyclists rather than automobiles. A modified version, dubbed "complete streets," allows the uses to peacefully coexist, similar to Pike Place at the Market.

Spurred by the arrival of light rail in the Beacon Hill neighborhood, boosters and civic leaders see a unique opportunity to give the neighborhood a center of gravity in the form of a plaza adjoining the future light rail station. "Traffic calming" is a key component of woonerf, but a Seattle DOT official commented that woonerf is a concept mostly limited to residential neighborhoods. As a rule, automobiles and pedestrians are segregated for the sake of safety. The Post-Intelligencer names Complete Streets as an organization that, as the name suggests, is seeking to make streets complete by accomodating cyclists and pedestrians. Here's an article about Complete Streets in Planning magazine.

In a health/fitness article, the Los Angeles Times discusses what "walking advocates" are citing as success stories -- America On The Move, which has created a virtual community for walkers; King County, Washington, where walkability has long been a priority; and Denver's Lowry and Stapleton, where:

neighborhood grids link homeowners to stores, restaurants, workplaces and public transport to downtown Denver via tree-lined sidewalks and pedestrian-friendly intersections. Walking groups abound, civic activity revolves around centrally located parks and recreation facilities, and "active living" is marketed by real estate agents. At Lowry, directions to shops and parks are posted in numbers of steps. New residents are welcomed with walking maps, pedometers and lists of walking activities. Many local businesses give patrons who show their pedometers a discount.
Prevention magazine recently published its ranking of "The Best Walking Cities of 2007". Denver's ranking? 22nd. Colorado Springs? 13th. First place? Madison, Wis.

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Quote of the day: "I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year." -- D.R. Horton CEO Donald J. Tomnitz, speaking at an investor conference in New York

Thursday, March 8, 2007

BankRate's 2007 Real Estate Guide

Bankrate, the nation's leading aggregator of financial data, released its 2007 Real Estate Guide, which includes 10 steps to selling, and a prediction that " a smaller volume of homes on the market, increasing income levels and rising interest rates could be contributing factors to cause the buyer's market to disappear by the end of 2007 and be replaced by a neutral market that favors neither buyer nor seller."

The press release: " stable interest rates, rising consumer confidence and bargain prices make for an overall optimistic outlook for 2007.However, new housing starts and foreclosures due to ARM resets keep experts on guard."

Its forecast for Denver: partly cloudy. "It's a low time for the Mile-High City's housing market [emphasis not added]. Denver experienced price declines last year, along with a drop in single-family home construction. Population growth is also low. Job growth was impacted by the last recession, losing jobs particularly in the telecom industry, but it's returning with moderate gains of 2 percent, which Ingo Winzer predicts may spur in migration in the next few years." The blurb reports Denver's 4Q06 median home price at $245,600 and calls for a decline to $244,980 at the end of 2007. According to the profile, there was 1 foreclosure for every 331 households in Jan. 2006 versus 1:283 in Jan. 2007.

The experts:

" Chris Porter, senior consultant with Irvine, Calif.-based John Burns Real Estate Consulting, predicts the market will hit bottom in mid- to late-2007. Spots such as San Diego and Sacramento, Calif., which got hit early, may be among the first to emerge, he says."

"Richard Moody, chief economist and director of research for Texas-based Mission Residential, says the increase in sales and prices during December and even November...was more of a blip because of warmer-than-usual weather in some parts of the country and seasonal adjustment. He believes the first half of 2007 will look much like the second half of 2006, with housing starts continuing to decline and sales further softening."

"Ingo Winzer, president of Massachusetts-based Local Market Monitor, a real estate analysis firm, disagrees.

'Interest rates are still low by historical standards, although not as low as a couple of years ago,' he says. 'I do believe that interest rates will drift upward and that will be bad for the housing market.'"

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Here's DenverInfill.com's blog entry on the Auraria Campus Master Plan, which has long been something of an island in downtown Denver.

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The Colorado Bankers Associated released a random survey of Colorado foreclosures, as reported by the Denver Post. Here's the full report. 374 randomly selected foreclosure filings were examined, revealing the following average profile: a 2.8-year-old mortgage valued at $202,000 and issued by a nonbank lender (banks originated only 22% of foreclosures studied) between 2003 and 2005.

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Here's an interesting analysis of Seattle's condo market, written by a consultant at Seattle-based Realogics, Dean Jones. Seattle's three urban condo markets are affordable ($350-$550 PSF), market rate ($450-$800 PSF) and luxury (700-$1,500+ PSF). Jones says that market fundamentals support a positive outlook for Seattle's urban condo market thanks to a healthy job market and the growing numbers of lifestyle buyers (re: downsizing baby boomers, retirees and second-home buyers).

Friday, March 2, 2007

Greenspan's Shadow

U.S. stocks just suffered from their worst week in four years. I listened to three economists on BBC talk about whether the global economy will correct or crash. Ben Bernanke, who one of the economists said is way too much of a proponent of printing money, sought to allay investors' fears earlier this week, yet he's still in the shadow of his predecessor, Mr. Greenspan, who said that "there is the possibility, but not the probability of the U.S. moving into recession". This followed his comments made to an audience on 2/26 to the effect that there was a risk of recession due to the slowing growth of profit margins, which is said to have contributed to the big selloff the equity markets witnessed this week. Bernanke assured that the central bank still expects the economy to pick up this year. Journalists perhaps prefer the sometimes inscrutable sometimes elucidating statements of Greenspan to Bernanke's relatively straightforward statements. Markets still hang on Greenspan's every word and go to great lengths to interpret his comments, even now that he's no longer in power but rather on the global speaking circuit. He encapsulated broad financial trends by coining catchy phrases such as "frothiness" (re: the real estate market) and "irrational exuberance" (re: the stock market boom that ended in 2000).

Greenspan's forthcoming book, which he's been writing since retiring in Jan. o6, is entitled "The Age of Turbulence".

There was a big announcement in the real estate marketing world this week: Realogy, the bohemoth that owns the Coldwell Banker, Century 21 and ERA brands, is partnering with Google and Trulia, to provide searchable, mappable listings.

The blogosphere is a sometimes trifling, puerile realm, but this can be worth a few cheap laughs: Fortune interviewed David Lereah, the NAR's chief economist (and some say its cheerleader/spinmeister), who shared that a blogger almost made his mother cry, simply for taking Lereah to task for his rosiness towards the housing market. The blog, DavidLeareahWatch, has the following subtitle: David Lereah is the Chief Economist and Senior VP of the National Association of Realtors (NAR). Mr. Lereah regularly makes statements regarding the housing bubble. The media regulary turns to him for real estate quotes. He is very influential. Mr. Lereah tells half truths and manipulates facts and figures. He cannot be trusted as he is a paid shill. Lereah said that the 26-year-old blogger has it out for him because he couldn't afford to buy a townhome. Salon's Andrew Leonard in his How The World Works column, puts it all into perspective: "the basic thrust is that Jackson believes David Lereah spins the numbers to make them look as good as possible for his employer, the National Association of Realtors. Not exactly a shocker, but still, I guess, a little hurtful."

Maybe NAHB members are drinking the Kool Aid too, as their confidence, according to the Wells Fargo/NAHB index continues to climb out of a September trough, when the index bottomed out at 30. Existing home sales jumped to their highest level in seven months and were up 3% from a year earlier for Janaury, but Business Week cautions that real estate's not out of the woods yet, citing the latest and most threatening culprit -- subprime mortgages.

Thursday, March 1, 2007

Ain't Life Grand (Avenue)?


Photo Credit: Los Angeles Times

The largest single development in downtown LA gained final approval after a unanimous vote by City Council. This mega-project -- 3.6 million SF of development and at least five highrises -- will be built almost entirely on public land that will be transferred through a 99-year lease to the developer, Related Cos. Through this blog, continue exploring the issue of subsides and public-private partnerships. There appears to be plenty of risk to go around:

Early estimates put the tax rebates for Grand Avenue at $40 million over 20 years. But a recent report from the city's legislative analyst estimated that the rebates could cost $66 million. The largest tax break would be in the 14% city hotel tax, a maximum of $60.5 million over 20 years, the report said.


From the beginning, the Grand Avenue project has been marked by a nontraditional public-private marriage. Besides the proposed tax breaks, government agencies are providing the land, investing in street improvements and subsidizing affordable housing in the project.

Related and its fiscal partners, meanwhile, are taking much of the financial risk — particularly tenuous in a downtown real estate market that has shown signs of softening. They also are subject to a number of requirements, including the condition that all construction and permanent jobs in the development meet the city's "prevailing" or "living" wage requirements.

The first phase is expected to begin construction in October of this year with completion slated for 2011. A lot can happen in five years, but even if there's some exposure to taxpayers and developers alike, this investment in big ideas that could pay off immensely both financially and otherwise.

In today's Los Angeles Times, an op-ed essay by columnist Patt Morrison wonders aloud: "Does L.A. need another downtown?", asserting that the city that elicits images of ten-lane freeways and endless suburbs has already "turned the corner", somewhat organically and perhaps marginally, if only because more and more people are already moving to the Bunker Hill area, where Grand Ave. and its star-chitecture (re: Frank Gehry) will soon dominate. So does LA need a mega project that will create a downtown? Or is downtown revitalizing on its own, thank you very much?

Morrison comments broadly on American culture that is applicable from Omaha to Oceanside, one of convenience and instant gratification -- anywhere:
Big-screen TVs and iPods create audiences of one. And nearly every suburban city and neighborhood replicates the chain-store commerce of the next one, which proves that, like certain actresses and the Botox needle, the risk lies in too much as well as in too little. No one is going to travel from the San Fernando Valley to 1st Street for the same Pottery Barn experience that's available 10 blocks from home. If you've seen one Gap…
Morrison points out that NYC, of all places, doesn't really have a defined center, arguing that no city really needs a desginated center, then likens the "ranchos" from early CA days to today's self-sufficent suburan pods, a constellation of centers if you will. Still, doesn't Grand Avenue have the potential to be, if not the center of gravity in Southern California, an iconic place of which Angelenos would be proud? His main point is that any new place must offer something that people can't get in their own "burgs", and it seems that if Grand Avenue goes off well, people will leave the 'burbs for downtown LA, even if they're still plugged into their iPods. Morrison wraps up his column with a hilarious and telling encounter:
The day I knew to a dead-bang certainty that downtown was already back was when I was crossing a street on the way to a restaurant. Walking toward me, in the crosswalk, was a couple with skis over their shoulders and ski boots in hand. I looked around for the cameras that had to be shooting a chewing gum or beer commercial — that's a lot of what downtown has been for ages, Hollywood's ready-made back lot.

No cameras. I had to ask them: "Were you … are you … do you?"

Yep, they said. We've been skiing. And we're coming back home. To downtown.
Now, let's turn to Denver, where Union Station has been one of Denver's central icons. Falling into disrepair for decades in the 20th century, downtown Denver is already well on its way to recovery, and then some. So maybe downtown Denver is already standing on its own two feet, and there's no need for the grand vision and public-private commitment to Union Station. Absent this redevelopment, however, I think that a cobbled-together Union Station could be turn into something much less than grand that would leave a gaping hole in the heart of downtown. Aesthetics, finance and politics aside, it's very encouraging that cities are dreaming big and seeking to make sense of their center(s).

Sunday, February 25, 2007

"Master Planning Is Over In San Diego"

Lack of Land, Traffic Congestion Forcing More Mixed-Use, Infill Projects

Era Over for Large-Scale, Mixed-Use, Master-Planned Suburban Communities

San Diego Business Journal Staff

Several of the retail shops in the Marketplace at Liberty Station celebrated grand openings this month.
Several of the retail shops in the Marketplace at Liberty Station celebrated grand openings this month.
The age of large-scale, mixed-use, master-planned communities in suburban areas of the county may be over.

Tony Pauker, regional president of the Olson Co. and chairman of the Urban Land Institute of San Diego/Tijuana, said future development will shift from master-planned communities to smaller infill mixed-use projects.

“With the exception of a couple large parcels, master-planning is over in San Diego,” said Pauker.

While we are at the end of that era, Pauker said future projects may be as small as a few acres on the waterfront downtown to a few hundred acres in and around Otay Mesa and in North County.

Craig Clark, president of La Jolla-based commercial real estate developer C.W. Clark Inc., said a number of factors played into the growing use of mixed-use, redevelopment projects in San Diego and elsewhere in the past few years.

Clark said the lack of land, congestion and demand for shorter commutes are the leading causes for these adaptive uses.

Shortening The Commute

He stressed the importance of having work and home closer together.

“When you can find a community where a lot of these things are intermingled in a general geographic area, it is much better,” said Clark, citing areas in the city such as Mission Valley.

With the benefits of having a self-contained, self-sufficient community come drawbacks.

“The negative is cost, cost, cost. It is expensive to operate. It is expensive to build,” said Clark.

Nonetheless, Clark said he and other developers would continue pursuing mixed-use development.

“We don’t have a choice,” said Clark.

[Source: http://www.sdbj.com/industry_article.asp?aID=22141724.4341242.1438632.410194.7617086.305&aID2=110655]

Saturday, February 24, 2007

TIF-ed about Condo-rado



In a Rocky op-ed, Jennifer Lang, a researcher at the Independence Institute's loftily named Center for the American Dream, takes issue with urban renewal authorities and mechanisms such as tax increment financing (TIF). The II's chief, Jon Caldara, is a radio personality on Denver's biggest AM station, 850 KOA, and II's beliefs are decidedly libertarian and staunchly anti-tax and anti-most-things-related-to-(our) government. Caldara fancied himself as a modern-day Robin Hood as he spearheaded opposition to Referendum C in 2005 state elections.

In the op-ed piece, Lang contends that "urban renewal aims to stimulate growth and tax revenue to remain competitive with other cities, but ultimately, it could slow regional growth as private development will be drowned out by the influx of subsidized development." The general idea behind TIFs is to finance development or improvements that might not otherwise occur, creating future taxable value. To be sure, some TIF's flop. But it seems misguided to oppose the likes of Stapleton, Lowry and Belmar, which have created thousands of jobs and and millions in tax revenue at sites that would otherwise languish. Today, Stapleton, Lowry and Belmar are thriving centers that provide tax revenue for their respective jurisdictions and more lively public spaces for citizens. The private sector is a key player in this process, and takes on its own risks in undertaking the complexity of mixed-use development, but the public-private partnerships here in Colorado have been vastly successful. Categorcial libertarian opposition to urban renewal authorities is somewhat paradoxical, because it seeks to "free up" private enterprise by shackling government practices that often unleash the positive forces of capitalism.

Lang's piece likens New Urbanism to the "latest planning fad" that greatly undermines the American bedrock, single family homes, replacing them with " high-density, walkable communities with multifamily housing on tiny lots combining retail, office and living space." Oh no! On its website, the Center posts a PowerPoint presentation entitled "Urban Renewal In Colorado's Front Range". Slide 27: "Land as far as the eye can see for eight hours, no land shortage".

Thursday, February 22, 2007

Low Fat Pringles and New Urbanism

Suburbs import urban features to create sense of community

BETSY TAYLOR
Associated Press

Right now, City Hall is in a doublewide trailer where the power just went out.

But if Mayor Pam Fogarty has her way, a new municipal building, still on the drawing boards, - or, really, still in her imagination - will become part of a new chapter in this growing town's story.

The mayor and other supporters, with design help from a firm known for pioneering the New Urbanism movement in architecture, are planning a place to bring people together, where they can walk the streets and pass time, and where a sense of community can flourish.

Dardenne Prairie is getting a downtown.

Once an agricultural community with fields of corn, wheat and soybeans and the occasional cattle farm dotting the landscape, Dardenne Prairie is located about 35 miles west of St. Louis. It is a stone's throw from the two Missouri cities that are growing most rapidly, Wentzville and O'Fallon.

Today, bedroom communities have sprouted in Dardenne Prairie's pastures, and franchise stores line the roads into and out of town. Its population has expanded by about three-fourths, from about 4,000 people at the start of this decade to nearly 7,000 in 2005, according to U.S. Census figures.

But, Fogarty says, her little city is missing something.

"Everybody wants a third place. You have your work. You have your home, but everybody wants a gathering place," says Fogarty, a mother of five.

Her reference is a nod to sociologist Ray Oldenburg who defines the third place as "a setting beyond home and work (the `first' and `second' places respectively) in which people relax in good company and do so on a regular basis."

Fogarty's vision for her town: This third place will include a proper City Hall building, perhaps with a front porch where residents can gather. The new district will give the community a place where people can have "cookies with Santa and the Fourth of July parade," she says, envisioning a walking district filled with shops, offices and living space.

"When you have a downtown, people say, `There's Dardenne Prairie,'" the mayor says.

And she knows exactly where they'll be when they say that.

The would-be downtown is 80 acres, part of it occupied by a baseball diamond that will remain, the rest open fields and a few privately owned houses. Several are rental properties whose owners are interested in selling, Fogarty said.

The site's transformation into a downtown begins with town meetings in April.

---

Dardenne Prairie isn't the only community seeking to establish a sense of place by designing it.

In Storrs, Conn., the University of Connecticut has drawn notice for a plan to essentially build itself a college town, with shops, restaurants, apartments, and even a traditional New England town green. UConn officials have said they don't know of another university that has attempted the same thing.

The belief that aspects of traditional neighborhoods can enhance communities has been growing with certain architects in recent years.

After World War II, suburbs flourished. As many commuters moved farther from cities into housing subdivisions, their lives became more separate from one another. Homes were no longer down the block from the corner store. Offices sprung up in business parks. It became yet another drive to get to church or school.

In their book, "Suburban Nation, The Rise of Sprawl and the Decline of the American Dream," Andres Duany, Elizabeth Plater-Zyberk and Jeff Speck criticize suburban sprawl and related development that appear to have only one goal: "making cars happy."

Duany and Plater-Zyberk are among about a dozen people credited with the New Urbanism movement. They drew much attention after developer Robert Davis asked them in 1979 to design Seaside, Fla., which was inspired by aspects of small-town life.

Now Dardenne Prairie has hired their firm, Miami-based Duany Plater-Zyberk & Co., to help shape its downtown and its future.

---

Not far from Dardenne Prairie, a made-from-scratch community with the fitting name New Town is rising from fields that were mainly used for growing sod.

The 750-acre development, whose full name is The New Town at St. Charles, drew from classic city architecture, with detached garages in back of homes and including a church, a bookstore, a market and other shops with more on the way. Residents can swim, kayak and fish in manmade lakes with fountains and canals that are actually a stormwater system. Wide front porches and parks are intended to encourage neighbors to get to know one another.

New Town is pitched by its creators as "a return to the towns of yesterday."

Developer Greg Whittaker said he wanted to build a community where, "once you park your car, you don't have to get back into it."

In all, 5,700 homes could be built in the instant community, with townhouses selling from $120,000 and a couple of single-family homes topping out at over $1 million.

New Town, which is more than 10 percent complete now, was designed right down to its intricate manhole covers.

A sign at the center of the development displays "The Shades of New Town," the 28 paint colors largely in use at the development. A yellowish cream is called "New Town Latte," and a light green is "New Town Celery." Whittaker says residents can pick their own colors to paint their homes, as long as they clear them first with the town architect.

There are other restrictions. Outdoor furniture can't be plastic, for aesthetic reasons. Gas lawn movers can't be used, an effort to reduce environmental and noise pollution. Venetian blinds facing the outside need to be neutral colors, and individual homes don't have individual mailboxes. Residents pick up their mail at a mail center, a decision made in part to get people socializing and out of their homes, Whittaker said.

Several residents said they've found just what they were looking for in New Town.

Peggy Riley, 56, recently had lunch at the Prancing Pony bookstore with her grandson, Will Statler, 3, before heading to a meeting with a couple of women from St. Charles Christian Church, also located in town.

She said her family is related to eight other families that have opted to move to New Town. She loves how the community looks, but more importantly she's very fond of the other residents. To many of them family is important, she said, and they like to stay active, taking part in church and social gatherings.

"We really try not to leave New Town," she said. "It's like being on vacation. Why would you want to go out into the other world?"

An architectural photographer, Toby Weiss, whose day job is with a residential design-build firm, visited New Town and wrote about it on a blog. Weiss found it ironic that she had to drive "over 30 miles to deep suburbia to see a modern replica of my city neighborhood."

Weiss said she found it a pleasant place to visit, but called aspects of New Town like a movie set or Disney World.

"New Town is the visual equivalent of the taste of low-fat Pringles," she wrote.

"So we should have buildings falling down and graffiti?" Whittaker asked, when told some think the development looks a little too perfect or inauthentic.

"It needs a little time to grow," he said. "It needs a little patina."

---

New Town was planned by DPZ, the same firm that Dardenne Prairie is going to use for its downtown.

A DPZ team, hired for $325,000, plans to come to Dardenne Prairie on April 18-24. They'll hold meetings to talk to residents, business owners and other decision-makers and sketch ideas about their hopes for the new downtown.

To help fund the more traditional downtown it is seeking, the town used an unusual approach to development, first drawing some big-box retailers to generate tax revenue. A Target, J.C. Penney and Shop 'N Save grocery store have gone in, as well as a multi-screen movie theater.

In 2003, the community sought to bring in commercial development, simply to raise basic operating funds. There was no city park, no way even to pay for a trash can, Fogarty said. She noted that she still cleans the bathroom at City Hall, where power went out temporarily during a reporter's visit as utility workers relocated lines.

Over time, as Dardenne Prairie sought development, community members began to think more about the type of place they wanted to be living. A small group started kicking around the notion of a downtown. From there, aldermen passed a resolution, and two community hearings were held last year for public comment.

With more money coming in, the community thinks it has a chance to determine what it wants its future to be, even as it draws on its past.

"You're seeking to enhance a sense of place that hopefully is already there," DPZ project manager Senen Antonio says.

Fogarty, the mayor, said a century-old Catholic church, with caramel-colored stone and simple stained glass windows, may serve as a design inspiration for much of the new downtown.

Either way, she believes the community will get its needed town center.

"You go get what you want," she said, "or you wait for what comes."


For Whom The Bell Tolls

The Denver Post reports that Denver/Boulder/Greeely inflation (3.6%) outpaced the nation (3.2%) in 2006, pushed by rising shelter and apparel costs. Metro's core inflation raced ahead at a 5.5% clip vs. 2.7% for the nation. The WSJ cautions that the core rate went up 0.3% last month after three straight months of 0.1% increases. briefs that the Fed is "expected to hold its key rate target steady at 5.25% a sixth time next month, but further increases are still possible this year. Data out this week showed consumer prices rose faster than expected in January, signaling inflation pressure hasn't abated enough for the Fed to relax -- or cut rates."

~

On Wall Street, Toll Bros. reported a 67% decline in 1Q07 net profit. On the bright side, Toll's cancellation dropped to 29.8% from 36.9% the previous fiscal quarter. Still, only 6,000 to 7,000 homes are expected to be delivered, off from a November estimate of 6,300 to 7,300.

Robert Toll: "There are too many soft markets at this stage of the selling season to call a general upturn in the new-home market," said Chairman and Chief Executive Robert Toll. "Demand varies greatly from week to week in individual markets."

Is it Time yet to talk about housing? The weekly newsmagazine by that very name runs a story under the banner "America's House Party". Nothing earth-shattering here but the article suggests that the latest boom will have lasting effects on how Americans view their homes:
The deeper changes of the real estate boom are likely to stick, particularly the notion that the house is no longer just a home. By tapping their built-up home profits through refinancings and home-equity loans, owners have ensured that the home-as-piggy-bank will be with us for some time, and that may have wide implications for tomorrow's economy.
We can at least take solace in the inherently different nature of housing as an investment vehicle, for houses are after all much more tangible and less prone to crashes than tulips or stocks. Okay, so Wikipedia says there is such a thing as a housing bubble; it's just that "a real-estate 'crash' is usually a slower process, because sellers just decide not to sell. Historically due to inflation, prices do not fall in nominal terms, rather they stay "flat" for a period of 3-5 years."

If you're not so worried about bubbles bursting, think about Colorado's water:

The Colorado River serves seven states - Colorado, Wyoming, New Mexico and Utah in the upper basin and Arizona, California and Nevada in the lower basin. When the 1922 Colorado River Compact divided the water among the states, the annual flow was estimated at 15 million acre-feet. Hoerling said that the recent annual flows are about 13 million acre-feet, but by 2050, climate change may drop that to about 10 million acre-feet - less than what is currently used by all of the states. That could mean there would be no extra water to store in Colorado.
A water bubble? Maybe someday. But back to real estate...

~

Here's John Rebchook's article about Lincoln Station in its entirety:

Work starts on Lincoln Station
Westfield Development and Bradbury Woods have broken ground on the first-phase of Lincoln Station, a transit-oriented development on 35 acres next to the Lincoln Avenue Light Rail station, along Interstate 25 between Lincoln Avenue and C-470.

The mixed-use development will be anchored by a 151,000-square-foot, six-story, energy efficient office building called One Lincoln Station.

Phase one also will include the Clock Tower and Station Street South buildings, which will include 34,500 square feet of boutique office space on two floors above 18,800 square feet of retail.

The commercial space will cost $45 million — $30 million in equity and $15 million in a commercial loan.

The first phase also will include Station Street Lofts, a 73-unit "loft" building with 8,000 square feet of retail.

Eventually, the entire development will have more than two million square feet of additional office space, 2,000 residential units, and 50,000 square feet of retail space.

The first phase will be completed in the spring of 2008.

~

Rebchook also scoops a new eight-townhome project, MetroView, in Jefferson Park.

Here are some renderings from website, denvercore.com, announcing the project:

~
Another Front Range story to ponder: is Foothills Mall ripe for redevelopment? The article doesn't suggest anything of the sort, but consider recent Front Range success stories such as Boulder's Twenty Ninth Street (wikipedia). Just as Centerra is beginning to siphon off retail revenue from Ft. Collins, Flatiron Crossing had been doing the same number on Boulder until they responded. I wonder, by the way, if the new Wild Oats HQ at 29th Street will change now that the Boulder natural grocer has been, um, consumed by its now parent company, Whole Foods.

Twenty Ninth Street Site Plan:

Wednesday, February 21, 2007

Housing related job cuts

The International Times Herald attributes the loss of 100,000 jobs in the United States last year to the slowdown in the housing market, including 24,000 by homebuilders alone in the last three months. Furniture makers, who cut 28,000 jobs in 2006, and other businesses, trades and service providers that support homebuilders are generally struggling. The Joint Center for Housing Studies at Harvard University (Graduate School of Design + Kennedy School of Gov't) claims that "housing and related industries account for about 23 percent of the economy" and expects housing-related unemployment to rise this year. Whirlpool, for example, is expected to cut jobs this year. The IHT article also cites NAR:

New-home sales probably will decline to an annualized pace of 944,000 in the third quarter and then rise to 959,000 in the last quarter, the National Association of Realtors said Feb. 7. Sales of previously owned homes bottomed in the fourth quarter at an annualized 6.24 million and will rise through at least the second half of 2008.
And the US Dept. of Commerce:

Builders broke ground in January on the smallest number of new homes since August 1997 as the industry struggled to unload the record 542,000 unsold properties from last year, the Commerce Department said in a report Friday. In the past three months of 2006, housing starts fell 24 percent from a year earlier.
These last figures are certainly encouraging, suggesting that there's plenty of sobriety among homebuilders in today's tough market.

~

OK, if you know anything about the DFW metroplex, you're well aware that Big D and Cowtown despise one another. The former is supposedly where the East ends, while the latter is where the West begins. LA is to Dallas as ... well, there's no equivalent for Fort Worth. It's compact enough, at least for now, to maintain a "small town" feel, yet it has first-rate cultural offerings, thanks in large parts to pre-eminent Ft. Worth families like the Basses. It's more laid back than Dallas, and arguably more friendly and more Texan.

An article in the Fort Worth Star-Telegram laments the Dallas-ification of Ft. Worth, covering the shuttering of a venerable Ft. Worth watering hole called the Wreck Room.

I suppose change is afoot, but it is a shame that venues with local character and a loyal following get elbowed out. Because of escalating land values, more residents preferring denser city living and cities encouraging mixed-use, retail/residential "urban village" concepts, it was perhaps inevitable that these types of developments would pop up near the city's core. Advocates for this transformation say it's less about the city becoming a knockoff of Dallas than it is about offering an expanded range of living, entertainment and dining alternatives for a growing and increasingly sophisticated population.

An open question: if the places (shops, restaurants, public spaces, etc.) change, will the people change with them? What's the "push" and what's the "pull"?

Saturday, February 17, 2007

Housing News and Vail's Growing Pains


On page A1, the WSJ covers January new home sales, down 14.3 % from December and 37.8% from January 2006. Consumer spending has remained unfettered, despite a surge in delinquent payment among subprime loans. Some economists don't find this segment of loans to be significant enough to become a "macroeconomic event", unless late payments spread to other loan types. Dave Seiders of NAHB now believes that the cut in residential investment will shave one percentage point from inflation-adjusted growth this year.

In a semiannual monetary report issued both on 2/14 and 2/15 before Congressional committees, Ben Bernanke looked favorably upon the housing market's "tentative signs of stabilization":
New and existing home sales have flattened out in recent months, mortgage applications have picked up, and some surveys find that homebuyers' sentiment has improved. However, even if housing demand falls no further, weakness in residential investment is likely to continue to weigh on economic growth over the next few quarters as homebuilders seek to reduce their inventories of unsold homes to more-comfortable levels.

Bernanke said that the biggest risk, or downside, to the FOMC's forecast for 2.5 to 3.0 percent GDP growth in 2007 is is "the ultimate extent of the housing market correction" and any "spillover effects from developments in the housing market onto consumer spending and employment in housing-related industries."

Moving on from the dismal science, the blogging phenomenon is growing in the residential real estate world, providing ground-level intelligence in what has traditionally been the information-constrained business of buying and selling homes. Some blogs take on shoddy home construction while others sing the praises of particular neighborhoods. Realtors, meanwhile, are providing more numbers to consumers striving to be well-informed.

The NYT reports Solaris, a $250m mixed-use development in Vail that, on its face, doesn't sound too controversial: 75 mountain-view condominiums, a two-story lobby, a Japanese restaurant, shops, three cinemas, a bowling alley and a public plaza. "The controversy is an Alpine lodge building that will be constructed of steel, wood and stone. Though its style is more indigenous to the area than the faux-Bavarian style of Vail, the proposed building was criticized for not conforming to the prevailing architecture." At 113', the building would become Vail's tallest.
The developer, a Long Island transplant, wants to make Vail Village a better place for families and others to shop, dine and "conduct business", citing Edwards and surrounding areas that have had the benefit of more room to grow relative to Vail Valley's lack of elbow room. Sixty percent of the condos sold within 6 weeks, with prices ranging from $2.2 million to $18.6 million. Knobel won a 4-3 decision from city council after two opponents to the project lost their re-election bids in November. A special election in July of last year in which a vote was taken on the project showed that a resounding number of voters supported the project: 1,100 of 1,577 voted in favor, revealing a rift between the older vanguard of Vail and the growing younger families who want more retail and entertainment, but perhaps, as opponents, content don't care to preserve Vail's identity, or at least to allow the Village to grow more slowly.

Knobel's foes also claim he's feeding his ego. Here's his statement on the Solaris website:
I want to create effortless mountain living with metropolitan convenience, unsurpassed quality, amenities and service. Most importantly, I want to do it in a way that enhances Vail's pristine beauty and feels world's apart from sterile urban environments.

Are "metropolitan convenience" and "sterile urban environments", though, two sides of the same coin? Regardless, Vail is evolving, and, perhaps, this is what the (majority of) people want.

There has been a lot in the press recently, including many mountain towns that ring uber-expensive ski resorts, regarding the (un-)affordability of housing. Witness this story from the NYT on a presumed ski/ride bum renting out a closet for $200 a month. Once he came out of the closet, literally, after a year, the couch-occupant took the closet-dweller's (more privacy?), um, space. Big Sky, the MT ski area, is a sometimes treacherous 32-mile drive on a two-lane road to the nearest community of signficant size, Bozeman, where many of those who work at Big Sky live. While ski bums from Chicago might willingly live in sub-standard living conditions for a year or two, immigrants from outside the U.S. are flocking to resort communities that face labor shortage.

Saturday, February 10, 2007

What Homes Will Look Like in 2015

The Orlando Sentinel kicks off the International Builders Show with an article predicting the size and shape of homes in 2015. The typical American home will remain at today's average of 2,400 square feet, up from 1,000 square feet fifty years ago. The future home will be more energy efficient and feature more amenities. The bar has been raised for community amenities and floor plans are becoming more open and practical:

Gayle Butler, editor in chief of Better Homes and Gardens magazine, said the "new urbanism" trend of recent years has "reset" expectations. People now look for wide sidewalks, winding streets, community centers and "real front porches," Butler said, all of which allow for a greater sense of openness and interaction among residents.

"A sense of neighborhood," while common in older parts of many towns, is impossible to "retrofit" in more recent subdivisions, she said. Homes of the future will have flexible floor plans but will not be quite as "wide open" as recently constructed models, she predicted. They will have flexible room dividers and "partial walls," more natural lighting, "mud rooms" for storage adjacent to kitchens, and "closet-sized" home offices.
One of the centerpieces of the show is The New American Home 2007, located in the Lake Eola Heights Historic District near downtown Orlando.
~

Some homes are, however, getting bigger. In Athens, Georgia (that is), there is concern about in-town, supersized McMansions.


Forbes
takes a bullish look at homebuilder stocks Beazer, Pulte and Toll Bros. Housing sectors stocks are up 24% over the past six months.

~

A columnist in The Oregonian pits two landowners in downtown Portland against one another. Greg Goodman and his family own 25 prime lots where parking is a more lucrative than mixed-use development: "A city block containing 200 parking spots probably generates a steady income of $500,000 annually, less insurance and property taxes." On the other side, John Russell owns four buildings downtown and has trouble attracting tenants in buildings surrounded by lifeless parking lots. One proposed solution is to raise height limits on downtown buildings. Otherwise, Goodman contends, the Portland Development Corp. has to offer subsidies the employers and businesses it recruits.

Wednesday, February 7, 2007

All Aboard

In yesterday's Denver Business Journal, an article details "Denver homes selling for lower prices" -- more listings and more homes under contract.

Recognized as one of two projects nationwide with "advanced engineering and design", RTD's West light-rail line, due for completion in 2013 has secured $40 million of an overall $290 million in federal fuding, according to yesterday's DP. The Feds will cover $525 million of the approximately $880 million total cost for the southeast line.

SLC's Mayor, Rocky Anderson, a kindred spirit of Denver's Mayor Hickenlooper, talks to Grist, an environmental concern, about overcoming opposition to change, including light rail, in Utah:

We have a corresponding joke, and that is that there are two things people hate: sprawl, and density in their neighborhoods.

But you know, you come up against a lot of resistance to any change. When we put in the first line of light rail in the Salt Lake City area, there was greater opposition to that than anything I can remember in politics: the cost, the contention that it's outdated technology, that people won't give up their cars to ride it. We don't hear that any more, because it's been immensely successful. It's been so successful -- and this is one of those cases of success breeding more success -- communities that were adamantly opposed to light rail before the first line was ever built are now clamoring for it in their neighborhoods.
"Streetcars are for people who don't use public transportation", quotes the Christian Science Monitor in discussing the debate on the value of streetcars in cities and towns across the country, many of which have no mass transit precedent save for buses. The article cites the relatively cheap outlays for streetcars compared to commuter rails and subways and mentions cities -- Tampa, Little Rock and Kenosha, Wis. -- that have witnessed a net benefit from streetcars. The efficiency of streetcars is called into to question by ULI's Robert Dunphy, who likens them to "amenities", and a Charlotte booster describes her city's streetcar as a "moving museum" and an "attraction".

The Wall Street Journal, meanwhile, introduces Jennings, Mo. and Richfield, Minn., aging suburbs of St. Louis and Minneapolis, respectively, that have survived by creating the right conditions for new development. Richfield lured Best Buy with 45 acres for its new HQ, and in Jennings facilitated the redevelopment of a shopping mall and kicked off a $63 mixed-use development that is going forward with the help of city, state and federal subsidies.

The Salem Statesman Journal reports on the partitioning of lots in this OR town of 150,000. Infill development, literally in what used to be backyards, raises concerns about changing the character of neighbhorhoods.

On Monday, Merril Lynch issued a research note that warned about the growing trend of vacant for-sale homes, triggered by the Commerce Dept.'s report of the homeowner vacancy rate rising to 2.7% in 4Q06 vs. a 50-year average of between 1% and 2%.

The University of Colorado-Boulder's Leeds School of Business has released its 42nd annual Business Economic Outlook (PDF, 110 pp.) . The summary states that
"employment growth in Colorado will be moderate, similar to the soft landing experienced by the national economy. The slower growth rates that began in mid-2006 are expected to continue through the first half of the year, followed by stronger perfromance as th presidential eletion draws near...The outlook is for employment to increase at a rate of 1.9% compared to 1.4% for the United States. This will translate into 42,300 additional jobs in 2oo7. this projected growth is above the 10-year average of 36,200 jobs per year."
This is a positive outlook, but the report puts contemporary employment growth into perspective by pointing out that the average annualized rate of job growth during the 1990's was 3.8%. The report also talks about quantity (McJobs) vs. quality (high paying jobs). Positions in the Professional and Business Services category, which often fall into the latter column, netted 60,000 new jobs between 1996 and 2005. Also, the state's population is expected to grow 2% vs. 1% nationally in 2007. Other tidbits from the Outlook: "mortgage rates will stay relatively stable...retail sales will show moderate, but slower growth...the Buffs will again post a winning season in 2007". Stranger things have happened.

Sunday, February 4, 2007

Can "walkable urbanity" drive national and local residential recovery?

An article in ColoradoBiz discusses the gradual shift of national homebuilders towards infill, though the author, Stephen Titus, stresses that it has in some cases squeezed their profit margins due to rising land costs, especially at transit-oriented locations. Chris Leinberger of the Brookings Institution cites the higher home values within the quarter- to half-mile "walkable" radius of Metrorail stops in the DC metro area, though Denver is more than decade away from FasTracks buildout, making such a comparsion a bit premature. Locally, Titus disucsses older homeowners who are downsizing from bigger homes in places like Highlands Ranch and younger buyers who are buying in quickly evoloving neighborhoods like Highland. Today's New York Times, by the way, talks about well-informed, proactive young buyers who are also willing to take on more debt in buying a home.

Saturday, February 3, 2007

WSJ - 'Goldilocks' Economy: Can It Last


Today's "Main Event" column in the WSJ provides a clear take on this week's economic news, revisting the Goldilocks characterization -- not too hot, not too cold -- of the curent state of the national economy. On housing:

Why hasn't the housing slump slowed growth? Investors worried last year that falling home prices and slowing sales could spark a recession by cutting into consumers' spending power. The housing slump shaved 1.16% off annual GDP growth in the fourth quarter and 1.2% in the third. But lower oil prices, which fell as low as $51 last month from a high of $77 a barrel last summer, helped offset those losses. High stock prices, fueled by the 14th consecutive quarter of double-digit earnings growth, also helped to offset the slump.

The latest indicators suggest the housing recession may have bottomed out. Sales of existing homes increased at a seasonally adjusted annual rate of 4.9% in December, the largest such gain since March 2004, although that may have been influenced by unusually warm weather. Mortgage applications and building permits have also increased.

In spite of the concerns on many American minds, wages not keeping up with productivity gains along with rising benefit costs, the consumer confidence index reached a five-year high (110.3) in January.

~

Also in today's WSJ, many cities have employed more innovative, market-driven approaches to parking, which has led to more expensive parking in some areas, greater use of mass transit and more "churn" to help ease parking shortage. The premise that higher prices, not more parking, is the solution to the parking crunch may or may not be true. It seems that in "newer", less dense cities like Denver, free parking is in abundance throughout the metro area, putting the central business district at a competitive disadvantage. The article discusses Donald Shoup's 2005 book, The High Cost Of Free Parking, as a key catalyst in new thinking of coming up with parking solutions. One of his precepts includes ensuring that 85% of available parking spaces are occupied at all times by adjusting rates in real time. Perhaps a technological solution for drivers, such as a "toll tag" for parking, would alleviate some of the headaches involved when rifling under car seats for loose change.

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On Wall Street, Irvine, CA-based Standard Pacific Homes stated that its profits were off 72% in 2006. CEO Stephen Scarborough: "We believe many prospective homebuyers are waiting on the sidelines for signs of stabilized pricing."