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

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).

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.

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).