Studies: Gentrification a Boost for Everyone
Recent studies of New York City and Boston find that the movement of mostly white, upscale households into rundown, mostly minority neighborhoods contributes to no more displacement of low-income residents from their homes than occurs in non-gentrifying neighborhoods. Lance Freeman, an urban planning professor from Columbia University, and Jacob Vigdor, an economist from Duke, said that several factors are involved. Many older neighborhoods have high turnover, with about half of all urban residents moving in five years. Also, these neighborhoods often have so much vacant or abandoned housing that there’s no need to move people out in order for new people to move in. A quarter of the housing in one section of Boston’s South Side was vacant in 1970, with the population dropping more than 50% over 20 years. Today, its population has increased by more than 50% and there is less than a 2% vacancy rate. While higher housing costs do force some residents to leave, changes such as more jobs, safer streets and better trash pickup encourage them to stay. Gentrification has spawned emotional debates in cities around the nation, including New York's Harlem; Chicago’s Logan Square area; northwest Fort Lauderdale, Fla.; east Austin, Texas; Charlotte, N.C.; and Boston’s North End. “We were angry when the middle class moved out of the city,” said Vigdor. “Now we’re angry when they move back.” He asks if Detroit, which has lost half of its population in 50 years, would not have been better off today if gentrification had occurred there. (www.usatoday.com)
USA Today (4/19/05); Rick Hampson
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Census Figures Predicting California Will Keep Growing
California is expected to grow by some 12.5 million residents — or 37% — by the year 2030, according to new projections from the U.S. Census. That puts the state in 13th place in terms of the rate of projected growth, behind its two fast-expanding neighbors, Nevada and Arizona, and behind Alaska and Idaho, two states with relatively small populations. Last year, California was the home of roughly one in eight Americans, or an estimated 35.89 million people. Although most of the state’s population is along the coast, Riverside and San Bernardino Counties east of Los Angeles and other landlocked counties are expected to fuel the state’s population growth because of their lower housing prices and new jobs. (www.dailynews.com)
Los Angeles Daily News (4/21/05); Associated Press
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Affordable Housing Effort Kicks Off
The California Building Industry Association (CBIA) has kicked off its “Campaign for California Homeownership,” a public petition drive urging state legislators to act on housing bills that will make homes affordable to first-time buyers. The association’s agenda is focusing at increasing the supply of housing and reducing the cost of development by streamlining review processes and limiting home-defect lawsuits. It also supports SB 948, which would speed up environmental impact reports for high-density housing in existing neighborhoods, and a bill with the California League of Cities that would require cities and counties to plan for housing and population growth over the next 20 years instead of the current five. “As housing prices continue to skyrocket, the first-time home buyer is becoming an endangered species,” said Wes Keusder, the association’s treasurer and secretary. CBIA has launched a Web site — www.cahomeownership.com — where people will be able to sign up in support of the legislation and to post stories about their tribulations in trying to buy a home in California. (www.venturacountystar.com)
Ventura County Star (4/21/05); Gretchen Macchiarella
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Meet the Neighbors; Clubhouse Culture No Longer for Condos Only
Builders of large, mid-price-range, single-family developments in Oregon are starting to provide recreation centers — an amenity that has long been associated with apartment and condominium developments and some upscale golf course subdivisions. In Sunset Ridge, a single-family development by Pacific Lifestyle Homes, the recreation center includes an indoor pool, a fitness center, a game room and a large meeting space. Developers build the centers, which can cost more than $500,000, but they are usually turned over to home owners associations once the development is entirely sold. Home owners pay monthly fees of $50-$155 to manage the center. Rec centers are “a real plus for every development where we’ve put one,” said Don Guthrie, general manager for West Hills Development, the parent company of Arbor Homes. “There’s been a tremendous sales reaction to the concept. I think we are going to be putting centers in every development we do with more than 100 units.” According to a home owner preference survey by NAHB, a majority of home buyers in the $150,000-$350,000 price range list parks, play areas and walking trails as must-haves. Thirty percent identified swimming pools, 24% clubhouses and 21% recreation centers as “must haves” in new developments. (www.oregonian.com)
The Oregonian (4/17/05); Tom Gauntt
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Home Buyers ‘Flip’
Measured by the number of homes sold that had previously been purchased within the prior six months, the practice of “flipping” houses appears to be at a record high in Santa Clara County in California’s Bay Area, according to statistics from DataQuick Information Systems. About 84 of the 1,882 houses and condos sold in the county in February fell into that category, about 4.5% and up from 3% a year earlier. The previous flipping record was 3.5% in June 1989. General contractor Brian Brager said that he has bought and sold 13 Bay Area homes over the past 18 months, earning at least $25,000 on each. He makes repairs and adds upgrades such as new flooring, new kitchens and new paint on the “fixer-uppers,” which are worth as much as $1 million. Many would-be flippers have been restrained by the area’s high prices, and many home builders have added clauses to purchase contracts to forbid the practice. “Just to make sure we don’t get into that concept, we have an addendum to our contracts that pretty tightly prohibits spinning it in less than a year,” under most circumstances, said Steve Delva, South Bay president of Standard Pacific Homes. In the first eight months of 2004, Bay Area residents purchased more than 13,700 homes outside the region in markets like Las Vegas, Sacramento and Phoenix, although it is not known how many of them have been sold again. (www.mercurynews.com)
San Jose Mercury News (4/15/05); Sue McAllister
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Condo Development on Miami Coast Is Hot, Hotter, Hottest
An estimated 50 major condo projects are proposed or under construction within 50 blocks in Miami on or near Biscayne Bay, and 69,000 condo units are currently in the permit pipeline or newly built and for sale. Las Vegas, by comparison, issued 40,000 permits for all types of housing last year. Real estate expert Lewis Goodkin of Goodkin Consulting is absolutely sure that not all of these units will be built, because so many units have been pre-sold to speculators with small downpayments that some projects will have difficulty getting construction loans. Goodkin estimates that up to 70% of recent condo buyers are speculators. Many construction lenders are now requiring developers to put clauses in their sales contracts forbidding buyers from flipping their units before they close. Others are requiring 30% downpayments or limiting the number of units any one buyer can get to one or two. One-bedroom units in new oceanfront projects now start at $500,000 and run into the millions. Prices at Trump Grande in nearby Sunny Isles Beach range from $700,000 to $25 million for an 18,000-square-foot penthouse. Jonathan Ornstein, CEO of Mesa Air Group in Phoenix, says he just put 10% down on a small, furnished condo-hotel room in a project adjacent to the Fontainebleau Hilton Resort that won’t be completed for at least two years. At $580,000, the unit was $1,000 a square foot. (www.usatoday.com)
USA Today (4/9/05); Marilyn Adams
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Habitat Shifts Gears as Property Values Continue to Climb
Local chapters of Habitat for Humanity in the Pacific Northwest are reporting that they are increasing the density of their developments to help keep prices at affordable levels at a time when there is stiff competition for available lots. “I don’t know that we can keep land prices reasonable,” said John Godsey, the volunteer director of Willamette West Habitat for Humanity. “But we can build to the maximum density allowed.” In Portland, Ore., Habitat aims to sell its homes for $75,000-$80,000 to families earning 30%-60% of the area’s median income, so it can’t afford to pay the $50,000 that is typical for a single-family lot in the city. Construction costs for a simple Habitat-style dwelling are running about $60,000. Godsey’s group will complete about six Habitat homes this year, but wants to increase its annual capacity to as high as 15. However, land is a major obstacle. “I think it’s what you’re seeing throughout the metropolitan Portland region as a result of the urban growth boundary,” he said. “It looks like a lot of hard work. I think we’re in the same boat as the developers and the home builders in the market. Land is really scarce. It’s hard to find pieces.” (www.bizjournals.com/portland)
Portland Business Journal (4/15/05); Wendy Culverwell
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A Castle Built for Two
Instead of downsizing to more manageable homes, a growing number of empty nesters are pouring their life savings into the types of mega-homes that traditionally have been occupied by the superrich and growing families. “These people have the desire — and the money — to trade in the house that they lived in for 30 or 40 years and move into a home that has all the bells and whistles they’ve every imagined,” said Leslie Marks, the former executive director of the NAHB Seniors Housing Council. In the past five years, the number of home buyers 50 and over making purchases of $500,000 or more has doubled, according to Jim Gillespie, president and CEO of Coldwell Banker Real Estate Corp. Troy Campa, a principal of Newberry Campa Architects in Houston, said that people in this age group buying large custom homes now account for about 30% of the firm’s business, compared to zero just a few years ago, and it’s increasing at an annual rate of 10%. (www.time.com)
Time (4/25/05); Laura Kossfeder
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Soaring Worldwide Prices Not Confined to Gas
Some economists see the steadily growing boom in commodities over the past three years as a normal part of the business cycle, but others believe it reflects the emergence of China and, to a lesser extent, India, as global consumers rivaling the U.S. and Europe. With all of them competing for the same basic industrial resources, the demand for commodities, and their prices, could become permanently higher. Copper has been trading at its highest level in 16 years, aluminum hit a 10-year high in March and iron-ore producers this month have raised the price they charge many steel mills by 71.5%. Home builders have been feeling the commodities pinch. Prices for construction materials rose 9.9% in the 12-month period ending in February, according to NAHB. Lumber, cement, steel and gypsum all were more expensive last year, and builders had to absorb the increases because their homes had already been sold. Now, those prices are being passed on to buyers. “This year, people who are buying a house will see it as one of the factors that pushed up housing prices,” said NAHB economist Michael Carliner. (www.freep.com)
Detroit Free Press (4/18/05); Kevin G. Hall
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Is Green Building Building?
While builders have generally focused their green building efforts in states facing energy and water storages or with extreme climates, such as California and Colorado, consumer polls are showing gathering support for design efficiency and conservation nationwide. “Historically, green building has been the domain of a relatively small number of niche builders,” said Ward Hubbell, executive director of NAHB’s Green Building Initiative. But bigger, high-production builders are finding that building green is a way to distinguish themselves from the competition, he said. “Good builders are using a lot of this already, they’re just not calling it that,” Hubbell said. “This raises the bar for the mass builder.” Green building has also received a boost on national television, according to John Loyer in NAHB’s Energy and Green Building Department. “If you watch ‘Extreme Makeover: Home Edition’ on ABC, they recently had a segment on a zero-energy house, a house that not only saves energy but sells back enough energy to the grid to have a net zero” energy bill, Loyer said. “If it’s coming up on national television in prime time, it’s getting an enormous amount of attention. It’s quickly becoming a question for our high-production guys of ‘why aren’t you green?’” (www.washingtonpost.com)
Washington Post (4/16/05); Sandra Fleishman
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Non-Asphalt Jungles
Cities are increasingly interested in “green” roofing system technology because it reuses water that otherwise would have to be treated and also helps reduce the urban heat island effect when black roofs absorb heat and light. Vegetation on roofs also provides additional insulation for buildings and can reduce their heating and cooling costs. Cities like Seattle and Chicago are starting to specify the systems on government-owned buildings. About 95% of rainwater runs off regular roofs, according to Cary Robertson, product manager for Henry Roofing Systems, compared to only 30% from the company’s green roofing system. “These systems not only retain water in the growing medium,” Robertson said, “they also have a water storage component in what we call a drainage water retention mat. These have small cups that act as water storage reservoirs. The growing medium retains a certain amount of rainwater. Once it gets saturated, the water penetrates into the retention mat, which stores the excess water and uses it to hydrate the soils above it during drier periods.” (www.remodeling.hw.net)
Remodeling Magazine (3/1/05); Elizabeth Landry
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Toads’ Habitat Sharply Reduced
Citing costly impacts on development and water supply, the U.S. Fish and Wildlife Service has scaled back protected habitat for the arroyo toad to less than one-tenth of the area proposed four years ago from 182,360 acres to 11,695 acres in Santa Barbara, Ventura, Los Angeles, Riverside and San Bernardino Counties in California. Deleted from the final designation were areas where protections would have been too costly to projects or developments and some private lands protected by habitat conservation plans. In a study released in February, federal officials said that a previous proposal to protect the nocturnal toad on more than 95,000 acres would have cost more than $1 billion over the next 20 years. The cost would have included regulatory delays to developers, alterations to construction projects to minimize harm to toads and the purchase of land for toad habitat. (www.dailynews.com)
Los Angeles Daily News (4/17/05); staff and wire services
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