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The Journey From Box to House
Architect Mark Strauss hopes to build 351 multi-level duplexes in Gloucester, MA, using some of the millions of vacant metal storage containers piling up along the New Jersey Turnpike. It is cost-prohibitive for companies to return the storage containers after each shipment, and Strauss believes his plan would kill two birds with one stone by both emptying the overflowing storage yards and creating affordable housing. The containers are made of corrugated steel — which means they are strong enough to survive fires, winds and major snowstorms. Though blowtorches can be used to make windows, doors and stairwell openings, the containers could eventually be constructed with removable panels to facilitate the conversion process. Most storage containers are only eight feet wide, but they can be expanded to widths of 32 feet if they are joined together. The interior of the storage containers could be designed like traditional dwellings, and Strauss believes their industrial exteriors are "a colorful, active, very playful aesthetic." In addition to affordable residences for lower-income families, the containers also could be transformed into military housing, homeless shelters and temporary refuge in the event of natural disasters. (www.csmonitor.com)
Christian Science Monitor (01/07/04) P. 11; Atkin, Ross
Rate of Spending on Construction Climbs to a Record
The U.S. Commerce Department confirms that the pace of construction spending nationwide rose 1.2% during the month of November to a seasonally adjusted annual rate of $934.5 billion. The federal report shows that residential activity increased 1.9% to a seasonally adjusted annual rate of $501.6 billion, as low mortgage rates continued to boost home buying numbers. Also in November, housing starts gained 4.5% to a seasonally adjusted 2.07 million annual rate — the highest level in nearly two decades. Finally, Commerce officials report that office construction increased 1.3 during the month, while health-care construction slipped 1.7%. (www.wsj.com)
Wall Street Journal (01/06/04) P. A2
Age-Friendly Features Complement House Design
Builders are targeting retiring baby boomers with 55-and-over developments featuring universal design components that let them remain in their homes as they age. Though retirees generally prefer such communities because they do not want to deal with landscaping and maintenance projects, many also desire the age-friendly features that will enable them to live independently. Lower light switches, wider hallways and entrances, pull-out cabinets, raised dishwashers, door levers, higher toilets seats, adjustable showerheads and bathroom grab bars are just some of the features gaining popularity among home buyers. Home owners can even incorporate many of these into existing dwellings without incurring significant costs. According to Boca Raton, FL-based architect Quincy Johnson, builders probably will make universal design standard in new construction as the population of seniors and disabled people expands. (www.sun-sentinel.com)
Fort Lauderdale Sun-Sentinel (01/05/04) P. 10; Friedman, Robyn A.
Granny Flats Finding a Home in Tight Market
The "granny flats" and "in-law suites" that gained popularity in the first half of the 20th century are making a comeback across the United States, from Chicago and Boston to North Carolina and Washington state, after being largely outlawed beginning in the 1950s. Ground zero for the movement is in California — where half a million newcomers per year are taxing an already strained housing market. With shelter costs there and elsewhere drifting out of the reach of college students and graduates, working-class professionals and the elderly, authorities at the state and local level increasingly are leaning in favor of revised zoning that allows home owners to construct secondary residential units on their single-family lots. These small apartments — most commonly located in garages and basements or as backyard cottages and guesthouses — provide an economical option for penny-pinched renters, say proponents, and reduce the country's reliance on subsidies by saving local governments the expense of building affordable housing units at an average cost of $100,000. "It's a viable and important source of affordable housing that even a wealthy community can benefit from," according to Portland State University urban studies and planning professor Deborah Howe. Although state and local governments are coming around to the advantages of granny flats, a great many home owners see things differently, bristling at the growing number of multifamily housing units cropping up in their single-family neighborhoods. (www.usatoday.com)
USA Today (01/05/04) P. 3A; El Nasser, Haya
Building Green Has Financial Benefits and More Behind It
Research by the U.S. Department of Energy and the U.S. Green Building Council reveals that energy-efficient construction compliant with Leadership in Energy and Environmental Design (LEED) and Energy Star standards produces annual energy savings of 20%-50%. Commercial developers can recoup a project's cost in as few as two years, while residential builders earn their payback within five years. LEED certified buildings offer other benefits as well, such as lower operating costs and higher asset values. In addition, better indoor air quality and natural light boost worker productivity, improve employee attendance and even drive up sales. New York, Maryland and Oregon already offer green-building incentives; and experts believe these research findings could prompt other states and local governments to follow suit. Among the cities offering grants and private loans for green projects are Portland, OR; Seattle; Pittsburgh; and Columbus, OH. (www.columbus.bcentral.com)
Columbus Business First (01/05/04) Welsh, Tim
Option Adoption
According to builder estimates, new home buyers are spending about 5%-10% more on upgrades due to low interest rates, post-Sept. 11 nesting and the belief that real estate is a better investment than the stock market. Even first-time buyers are taking advantage of low interest rates to purchase more upscale countertops, appliances and flooring; while in the past they stayed away from options because all of their money was being put toward the purchase of the home itself. Meanwhile, builders now offer a number of upgrades as standard features, including Corian countertops, gas fireplaces, recess lighting and energy-efficient glass. Hardwood floors, stainless-steel appliances, decks, closet organizers, trash compactors, laundry room valets and high-end cabinetry are among the most popular upgrades; and builders say that finished basements and wine storage areas are attracting a lot of attention as well. Though many of these options boost the home's resale value, builders note that move-up buyers and downsizing empty-nesters, in particular, care more about comfort and personal preferences than value. (www.mcall.com)
Allentown Morning Call (01/04/04) P. G1; Orenstein, Beth W.
Bathrooms Are the Winner as Study Pins a Value on Specific Housing Amenities
According to research by Florida State University professors G. Stacy Sirmans and David Macpherson, a 1,000-square-foot addition boosts home prices by 3.3%. Property value jumps 4%for every extra bedroom and 12% with the addition of an air conditioning system. The biggest impact on home value, however, appears to be the number of bathrooms — with each additional one boosting the worth of a property by a whopping 24%. The study, based on analysis of nearly 29,000 transactions in the Philadelphia area over an eight-year period, also found that homes are less valuable between 21 and 30 years of age but are assigned a cost premium as historic properties when they surpass age 100. While basements, in-ground swimming pools, garages and attics drive up home prices by 2%-13%, the study findings show, above-ground pools, carports, walk-in closets and lofts do not affect value. While the study fell short of its nationwide aspirations, it still is being held up as one of the most comprehensive research efforts of its kind. (www.chicagotribune.com)
Chicago Tribune (01/04/04) P. 1; Sichelman, Lew
Southern Arizona Builders Lose Appeal
The Arizona Court of Appeals has upheld the Pima County ordinance that requires all new single-family homes to have wheelchair-accessible entrances, wide doorways, reinforced bathroom walls for grab bars and high outlets. Washburn Custom Builders and the Home Builders Association of Southern Arizona filed suit against Pima County on the grounds that the requirements are cost-prohibitive and prevent home owners from designing dwellings to their specifications. However, county officials believe the ordinance boosts property prices by just $100; and they insist that developers can apply for exemptions if costs top $200. While the court acknowledged the rights of home owners regarding design, it noted that they "do not have a right to be completely free from government regulation of the use and occupancy of their real property." The court also accepted the county's argument that the number of disabled residents will rise as the population ages, pushing accessibility to the forefront. According to attorney William Altaffer, the decision could prompt officials in Phoenix and Tucson to enact similar laws. However, Washburn and the builders association plan to move the case to the state Supreme Court. (www.azcentral.com)
Azcentral.com (01/01/04) Fischer, Howard
Sudden Impact: New Fees Kick In
The number of permits submitted by builders in Durham County, NC, surged from 90 in December 2002 to 350 in December 2003 as many hurried to beat an impending hike in school impact fees. Single-family home and multifamily unit fees jumped to $2,000 and $1,155, respectively, on Jan. 1, which county officials believe will generate $4.9 million during the 2004-2005 fiscal year. Developers of affordable housing and senior complexes are exempt from the fees. Home Builders Association of Durham and Orange Counties Executive Director Nick Tennyson expects the fees to tack $2,500 onto the cost of a single-family house, closing the door to homeownership on many lower-income buyers. In response, the group filed suit against the county; and until the court makes a decision, the county will hold the fees in a separate fund. Orange and Chatham Counties charge school impact fees as well, but they have received the approval of state lawmakers. (www.herald-sun.com)
Durham Herald Sun (01/01/04) Assis, Claudia
Rondos Make a Comeback in New Markets
For the first time since the 1980s, rondos are gaining popularity among home buyers. These normally high-end units are rental apartments that have been transformed into for-sale condominiums; and attractive interest rates, low or no downpayment options and the sluggish rental market have lured buyers. Rondos are most common in Atlanta, Chicago, Phoenix and Miami but are now popping up in Las Vegas, Los Angeles, lower Manhattan, Seattle, Orlando, Tampa and Washington, D.C. Demand for condos and the weak rental market have prompted many apartment developers to either shift their focus to condos midway through the development process or sell their buildings to condo developers. In fact, an NAHB survey reveals that over 10% of the 300 or so respondents have plans to convert apartments into ownership units in the coming months. With the apartment vacancy rate in major metropolitan markets up from 3% in 2000 to 6.9% in 2003, apartment developers have turned to condos to boost their profits. Condos are preferred by singles and empty nesters because they are more affordable than single-family dwellings, allow them to enjoy the city lifestyle and do not require them to handle maintenance; and rondos are catching on because they offer the same amenities for less than the cost of a new or resale condo. (www.wsj.com)
Wall Street Journal (12/31/03) P. B6; Smith, Ray A.
How Apartment Markets Shape Up
Marcus & Millichap's 2004 National Apartment Index provides a snapshot of multifamily property markets that are likely to perform well in the near term. The analysis generally suggests that investors should look to the western United States for opportunities, with several California locations —San Francisco, Oakland, Riverside/San Bernardino, Los Angeles and San Diego —claiming slots in the Top 10. While Southern California's dominance at the top of the listings is logical considering that the region has maintained itself in the midst of a sluggish economy, the best prospects for investment also include surprise appearances by such markets as Las Vegas and Fort Lauderdale, FL — both of which are expected to benefit from robust job growth. Besides the employment outlook, all of the 40 apartment markets studied by Marcus & Millichap were measured by several other forward-looking supply and demand indicators — including housing affordability, construction, vacancy and rent growth. Ranking toward the bottom of the compilation were such cities as Indianapolis, Cincinnati, Milwaukee, Cleveland and Houston. (www.wsj.com)
Wall Street Journal (12/31/03) P. B7; Smith, Ray A.
Condos More Popular as Boomers, Kids Seek City Living, No Lawns
U.S. condo sales and prices are on the rise, with third-quarter sales swelling 18% from a year earlier to an annualized rate of 974,000 units. While single-family sales gained by a close 19%, condo prices far outpaced the single-family market — as they have for the past three years — and narrowed the gap between the two segments. According to the National Association of Realtors®, the median price of condos soared 17% from 2002 to $167,200 in the first nine months alone of 2003. By comparison, existing single-family homes saw the median price rise a more modest 12 to $177,000 over the same time span. While condos have long been considered as starter homes for first-time buyers or last-resort options for those who cannot afford stand-alone property, NAR estimates that 42% of the condo market is comprised of buyers aged 45 and older — many of whom downsize from larger residences. The catalyst for the change often is retirement or an empty nest as the last child leaves home. Besides the practicality of a smaller dwelling, condo owners give up the hassle of high maintenance — often while benefiting from such amenities as clubhouses and pools. Young professionals — which, by one estimate, account for 25%-30% of condo buyers — also are turning up their noses at the upkeep required for detached housing, especially as they put off starting families until they are older. (www.investors.com)
Investor's Business Daily (12/30/03) P. A1; Mandaro, Laura
Securing Peace of Mind at Home
An increasing number of home owners in the Baltimore area are opting for security systems similar to those in commercial buildings, spending upwards of $10,000 for remote-monitoring functions, fingerprint or eye scanners, digital cameras and infrared sensors. Experts attribute the interest in more sophisticated systems to the booming housing market, the 2001 terrorist attacks, ongoing violence in the Middle East, developer requirements and lower-cost technology. According to Chesapeake Security Alarms Inc. President Bishop Carter, home owners are even installing high-end systems in lower-priced dwellings. Many builders forge partnerships with security firms so home owners can save money by having the wiring put in during the construction process. The popularity of security systems, however, has driven up the number of false alarms. In response, many municipalities force home owners to register their systems for a fee and impose fines after three false alarms in a single year. (www.sunspot.net)
Baltimore Sun (12/30/03) P. 1B; Sentementes, Gus G.
Pennsylvania, Delaware Land Prices Luring Maryland Builders
Builders in the Baltimore area have been moving into Delaware and Pennsylvania due to rising land and home values, building moratoriums and other growth controls, and the scarcity of large developable parcels. In fact, permits slipped 17.5% to 2,048 in the Baltimore area during the third quarter at the same time that the average single-family home price rose 17.2% to $392,886. Meanwhile, home prices range from $130,000 to $150,000 in York County, PA, and from $150,000 to $200,000 in New Castle County, DE. Though Maryland smart-growth experts insist that smaller parcels and revitalization projects can be successful, builders say they must charge significantly more to turn a profit. Builders add that many Maryland residents are willing to endure lengthy commutes in exchange for cheaper housing, which experts believe will worsen sprawl. Branching out into Pennsylvania and Delaware has helped many Maryland builders to stay in business and meet demand. However, the shift could hinder Maryland's economy, which has depended on the construction industry for jobs and tax revenue over the past three years. (www.sunspot.net)
Baltimore Sun (12/28/03) P. 1L; Hobbs, Erika
In-Town Suites Become an In Treat in Chicago
Chicago will soon be home to two hotels featuring upscale, for-sale condominium units whose owners enjoy hotel services when they occupy the property and earn rental income when they are out of town. Elysian Development Group is working on a 146-unit hotel, with 72 one-bedroom condos priced between $500,000 and $700,000. The 326 condo units in the Trump International Hotel & Tower, meanwhile, will fetch $559,000 to more than $1 million. Sales at both of these condo-hotels are better than expected due to demand from baby boomers, young couples with children and investors looking to take advantage of hotel amenities, live in the city and turn a profit. According to Trump Organization Senior Vice President Charles Reiss, owners could reap yearly returns of 5%-10% by renting out their units. While owners in the Trump project can rent their units whenever they want and earn 100% of the rental income, those who live in the Elysian Hotel must decide to live in their units for 14, 35 or 90 nights per year and receive only 20%-42% of the rent. Such arrangements have been successful in resort locales, but it is still uncertain whether the concept will catch on in Chicago and other large metropolitan areas. However, some experts are optimistic as the city gains popularity among travelers. (www.chicagotribune.com)
Chicago Tribune (12/26/03) Bergen, Kathy
What's New Urbanism Worth?
Homes in new urbanist communities cost 15.5% more than those in conventional subdivisions, according to research from Gerrit Knaap, executive director of the University of Maryland's National Center for Smart Growth Research and Education. These planned developments are designed to be pedestrian friendly with connected streets, smaller blocks, easy access to businesses and nearby public transit — which together are intended to create a sense of community. Though buyers are willing to pay more for homes close to such amenities, Knaap believes many would prefer to live on cul-de-sacs and not directly next to stores and light rail stations. "The American public seems conflicted and self-centered" in terms of where they want to live, Knaap infers. At the same time, Urban Land Institute Senior Resident Fellow John McIlwain does not believe that prices are negatively impacted by density. "If you are going to use land intensively, how you design it and the amenities you include are critical," he surmises. (www.wsj.com)
Wall Street Journal (12/24/03) P. B6; Frangos, Alex
Sun, Wind, Corn Pare Utility Bills
Alternative energy sources have gained popularity in recent years and especially since the Northeast blackout in August. The Edison Electric Institute estimates that the average household uses 20% more energy now than it did in 1981 due to computers and other energy-eating devices, but a growing number of home owners are looking to cut their utility costs and curb their dependence on the national electric grid. "The reason comes down to one thing — independence, reliability, self-sufficiency," observes Home Power Publisher Richard Perez. It has become easier and more affordable for home owners to reduce their energy consumption now that nontraditional energy sources are cheaper and appliances, lights and furnaces are more efficient. Consumers can slash their utility bills by about 50% by turning off lights that are not in use; purchasing energy-efficient refrigerators and other appliances; using compact fluorescent light bulbs instead of incandescents; relying on power strips; and opting for outdoor clothes lines over power-hungry dryers. After decreasing energy consumption, they can save even more money by implementing solar panels to heat water and run electric appliances, installing corn-burning stoves to heat their homes and purchasing wind certificates to handle their remaining power needs. These systems can cost thousands of dollars; but home owners can benefit from state grants or tax credits, federal discounts, home-equity loans and credits for selling surplus electricity to local utility companies. (www.sunspot.net)
Baltimore Sun (12/21/03) P. 1D; Mirabella, Lorraine
Homeownership Gap
Although the Clinton and Bush Administrations made affordable homeownership for minorities and low-income buyers a priority, Stuart Gabriel of the University of Southern California at Los Angeles' Lusk Center for Real Estate says the gap between white and minority home owners has held steady at 25-30 percentage points. However, minorities and immigrants are expected to be the strongest buyer segments in the coming years, according to NAHB. Gabriel notes that these demographic groups depend on homeownership to create wealth and increase their economic status; but they face language and income barriers, among others. Still, builders are preparing for a massive influx of immigrants over the next decade by implementing new designs and marketing campaigns that promote inclusivity and flexibility. (www.philly.com/mld/philly/classifieds/real_estate/7530566.htm)
Philadelphia Inquirer (12/21/03) P. J1; Heavens, Alan J.
Garages Grow in Size, Number With Lifestyles
Super-sized cars, the desire for storage and hobby space and neighborhood regulations that force home owners to keep cars out of their driveways are fueling demand for bigger garages among U.S. home owners. Single-car garages are things of the past, and many home owners are even asking for more than one. Many builders turn garages away from the street and add widows to disguise them; and some even install back doors so cars, boats and other items can be easily moved into the backyard. Insulation is also popular, considering that many families use their garages as game and exercise rooms or work spaces. (www.chicagotribune.com)
Chicago Tribune (12/20/03) P. 2; Plotnick, Jennifer
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