‘Vasectomy Housing’ Surges as New Jersey Tax Remedy
With the cost of educating a child in New Jersey’s public schools averaging $12,567 a year, the highest in the nation and more than double the property tax parents typically pay, local governments in the state are pursing age-restricted housing to expand the tax base without the expense of higher enrollment. New Jersey developers have responded by building an estimated one-fifth of the country’s adults-only housing, making the state the leader in the national trend fueled by baby boomers seeking new homes after their children move out. Nationwide, 2.8 million households were part of age-restricted communities in 2005, up 29% from 2001. The number in New Jersey grew 37% in the same period. More than half the housing units started in the state in the past two years have excluded children, data compiled by the New Jersey Builders Association show. Developers, who can make more money building unrestricted housing, sometimes find it’s more difficult to get those plans approved, said Patrick O’Keefe, chief executive officer of the association. “It’s almost a prerequisite that a project pass the child-exclusion test before a planning board will consider it,” he said. Some builders see “vasectomy housing,” as Massachusetts State Sen. David Magnani calls it, as protection against the wider housing slump. NAHB estimates that profit from age-restricted housing was $1.2 billion in 2006. Thirty-nine percent of the homes sold in 2005 by Pulte Homes had age restrictions, up from 33% in 2004. In 2001, Pulte was selling homes in 15 age-restricted communities in seven states; today it has 56 of these developments in 20 states, with eight more scheduled to open this year. “Age-restricted housing is growing more than the general housing market,” said Ara Hovnanian, chief executive of Hovnanian Enterprises, New Jersey’s largest home builder. Hovnanian will have 16 adults-only developments on the market this year, including 309 condominiums overlooking the Hudson River in the town of West New York, N.J. About 8% of homes sold by Toll Brothers, the biggest luxury home builder in the U.S., are in age-restricted communities; the number has doubled in the past five years. (www.bloomberg.com)
Bloomberg News (1/17/07); Bob Ivry
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Putting the Lid on Water Waste — New Toilets Are Going Green
Consumers, who have already embraced eco-friendly living in kitchens, gardens and cars, are targeting the bathroom, the largest drain on indoor water. According to the Environmental Protection Agency, the average family of four uses 280 gallons of water a day indoors, and toilets account for about 27% of that. Toilets made before 1994 guzzled 3.5 to 7 gallons per flush. A new federal law that year mandated 1.6 gallons. The quest for improvement has led to dual-flush technology that can use as little as 0.8 gallons to dispose of liquid waste and 1.6 gallons for solids. Ranging in cost from $200 to $500 for most models, dual flush toilets have doubled in sales over the past year. The EPA is releasing a voluntary 1.28-gallon-per-flush-or-less specification for high-efficiency toilets, and manufacturers who meet the new standard will be eligible to display the Water Sense logo. Dual-flush toilets are also going upscale. Last year, Toto USA, a pioneer in the development of efficient toilets, introduced the dual-flush Acquia, a stylish two-piece “skirted” design (smooth porcelain from rim to floor) available in six colors, including black and biscuit. According to the company, a family of four using the dual-control model could save 7,000 gallons of water a year beyond what is already saved by the standard 1.6-gallon models. Dual-flush toilets once were available mainly through plumbing wholesalers and kitchen and bath showrooms, but Home Depot says it carries several models in its stores and Lowe’s carries two that are available by special order. (www.washingtonpost.com)
Washington Post (1/18/07): Jura Koncius
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Energy Efficiency Should Be the Foundation for All Buildings
Recognizing the connection between global warming and the built environment, architects have stepped up to the plate and adopted the “2030 Challenge.” Originally drafted by Santa Fe architect Ed Mazria and adopted by the American Institute of Architects last year, the challenge calls for an immediate 50% reduction in fossil-fuel consumption in all new buildings, including homes. By 2010, the fossil-fuel-reduction standard for new buildings increases to 60%, and it will be increased by an additional 10% every five years, resulting in all newly constructed buildings being “carbon neutral” by 2030 and operating without relying on any energy sources that emit greenhouse gases. Gopal Ahluwalia, a researcher with NAHB, said that home buyers have some concerns about the environment, but in most cases these are not affecting their home-purchase decisions. When Ahluwalia asked focus groups of prospective new home buyers whether they would spend an additional $5,000 to make a $100,000 home more environmentally friendly, only 17% of the respondents enthusiastically embraced the idea. Half said they wanted a more environmentally friendly home but wouldn’t pay for it, a quarter said their environmental concerns would not affect their housing purchase and 11% said they had no concerns about the environment. At the same time, Ahluwalia said, the “must-have” features for most new-home buyers increase energy use. For example, most buyers want higher ceilings even though raising the ceiling from 8 feet to 9 feet increases the volume of space to be heated by 12.5%. Buyers do pay attention to conventional energy-saving features such as dual-pane windows, low-emission glass and added wall insulation, he said, but their interest does not extend to features they consider exotic — for example, a 90% efficient gas furnace or blown-in cellulose insulation that will plug up air leaks that cause drafts in the winter. (www.washingtonpost.com)
Washington Post (1/13/07); Katherine Salant
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The Next Big Kitchen Thing
NAHB surveys have shown that buyers of new houses are willing to forgo space in other rooms for additional square footage in the kitchen. But survey results released last year by GfK Roper Consulting indicate that consumers may be reluctant to spend more money on new and improved appliances than they think the products are worth and “bells and whistles” could convey the impression that something is “cool but unnecessary.” This hasn’t deterred the research and development divisions of product manufacturers. Swedish household-appliance manufacturer Electrolux solicits ideas for innovative products from students all over the world. In its fourth Design Lab competition last year, it sought food-preservation and preparation solutions that would promote healthy eating habits for consumers in 2016. A student from the Savannah College of Art and Design in Georgia came up with SpiceHood, which combines existing range-hood technology with an automated spice rack to reduce kitchen clutter while encouraging the use of spices. The hood filters and recycles extracted air from cooking to meet the storage requirements of the herbs inside. Working like a dehumidifier, the appliance condenses moisture from the extracted air and keeps spices in a dry environment. Cool, ambient air is sucked into the chamber from the top of the appliance to maintain a constant temperature. First prize in the competition went to a Turkish university student, whose design took its cues from a “sefertasi,” a food container that has been used in Middle Eastern countries for centuries. The Nevale is a personal food carrier that serves hot and cold meals when the user wants them. Built in layers, with a hood featuring a digital control screen, the Nevale can store as many as four different meals. A digital display provides information on the food’s storage conditions and can be programmed to start an automated reheating process at a specific time. Alternatively, for cold foods, the Nevale maintains a perfect preservation temperature. Each container works independently, so both hot and cold food items can be stored in the same appliance. The food is preserved through a vacuum system. You can take a portion of soup, a main course and a dessert with you, and the appliance will keep them free from bacteria throughout the day. “Nevale has been designed to help encourage a new age of homemade food,” said Metin Kaplan, a student at Istanbul Technical University. “It is an important step toward offering consumers an easy and effective way of bringing healthy meals with minimal fuss.” Power comes from a plug or a rechargeable battery at the bottom of the appliance. (www.capitalonline.com)
The Capital (Annapolis) (1/13/07); Alan J. Heavens, McClatchy-Tribune
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Realty Q&A: How Mortgage Scams Snare Unsuspecting Sellers
In a recent column, real estate columnist Lew Sichelman advised home sellers on how to guard themselves against mortgage fraud. “Don’t jump at a contract offer that…involves a kickback of the overage to the buyer at closing. Chances are the buyer wants an inflated price on the property so he can take the additional money and run without ever making the first payment.” Responding to a reader who asks how the seller could be held responsible, he elaborates: Home sellers can be charged with conspiracy or perhaps as the accessory to a crime if they knowingly sell a property at far more than it is worth and then hand the overage over to the buyer at closing or shortly thereafter. The buyer in this case may or may not obtain a mortgage on the property, and sometimes the bad guys are satisfied with the overage, but most often they must obtain a mortgage or they won’t have the money to buy the house. So they get a loan at the inflated price — using a faulty appraisal – pay you what you want and take the rest. Then they flee without ever making a payment or they turn around and resell the property to an unsuspecting buyer and take off with even more cash in their pockets. The latest con artist scheme is called “shotgunning” in which a property owner applies for several home equity loans with multiple lenders at the same time. “In one recent documented case,” he writes, “a would-be borrower applied with three different lenders over a 48-hour period. Because the lenders did not all report to the same credit bureau, none were aware the same owner had simultaneously applied elsewhere as well. Fortunately, the folks at the First American Title Insurance Co. noticed the attempted sham when they received multiple title orders on the same property and notified the lenders of the suspicious activity before they funded the loans. The owner was not deterred however. A few days later, the title company noticed two more orders on the same property with two new lenders and was able to alert them in time to avert a loss.” (www.wsj.com)
Dow Jones Business News (1/18/07); Lew Sichelman
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Scrub That Credit Score — This Important Figure Can Shape Your Financial Future
Although a credit score is the most important number for someone considering buying a house, and can make a significant difference in their ability to obtain a loan with the lowest possible interest rate and the best terms, about 97% of people have no idea what their credit scores are, and 86% did not check their credit reports last year even though doing so is free, according to an informal survey by Credit.com Educational Services in San Francisco. “Many people don’t know where they stand and they don’t know that they can improve their standing,” said John Ulzheimer, the group’s president. “Some think their credit is good and it’s not, and others think their credit is bad and it’s not.” The nation’s most widely used scoring formula, called FICO, became commercially available in 1989 and was adopted widely by mortgage lenders in the late 1990s after Fannie Mae and Freddie Mac endorsed it. The nation’s three largest credit reporting agencies — Equifax, TransUnion and Experian — use FICO software to calculate credit scores, which are then sold to lenders that underwrite car loans, credit cards and mortgages. As many as 50 million Americans are difficult to peg because of their credit histories; this group includes college students, consumers who pay their bills with cash and people who haven’t tapped into their credit for a long time. For everyone else, there are standard FICO scores, which range from 300 to 850, with a median of 723. To get the most accurate picture, mortgage lenders pull FICO scores from all three agencies and most base their lending decisions on the middle one of the three scores. In FICO’s estimation, whether someone pays their bills on time is such a good predictor of creditworthiness that payment history makes up 35% of the score. That’s followed by the amount owed, the length of credit history, the types of credit involved and new credit opened. Just one late payment can drag down a score by at least 100 points. Among other things, prospective home buyers are advised that having credit cards open does not harm their credit score and can even help if they are in good standing. Having them maxed out hurts. Also, according to Freddie Mac’s CreditSmart program (MyFICO.com), “ask creditors to raise your credit limit so that you do not appear to be overextended. Do not open new accounts, because it shows an interest in acquiring new debt, which can lower your score. Aim for a rich mix of credit, with revolving credit (credit cards) and installment debt (car loan, student loan). Correct errors on your credit report. Do not assume that a high salary guarantees a good credit score. Find out the key factors that are dragging down your score so you can fix them.” (www.washingtonpost.com)
Washington Post (1/20/07); Dina ElBoghdady
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