Home Builders Fear Increase in Speculative Buying
In a disturbing trend for builders in north Idaho’s hot housing markets, “For Rent” signs are becoming commonplace in many new subdivisions where investors have been snapping up homes with the expectation of re-selling them for a profit in a year or two and are looking for renters to help pay the monthly mortgage in the meantime. “We know of subdivisions in Coeur d’Alene where more than 50% of the new homes are rentals,” said Jim Frank, president of Greenstone Corp. “We think it’s very bad for home purchases.” Frank said he started noticing the phenomenon about a year ago and that investors had approached him offering to buy 30 new homes at a time in his subdivisions. Last year, he began requiring buyers to sign an affidavit that they intended to live in the home, and after that was found to be unenforceable, buyers must now sign a sales contract under which they agree to sell the home back at its purchase price if it is sold within 12 months. Speculative buying creates a “hidden market” that can potentially whiplash builders, said NAHB economist Michael Carliner. If investors cash out when home appreciation starts slowing, they could create a sudden glut of homes on the market that would be competing with new-home sales and drag their prices down, he said. (www.spokesmanreview.com)
Spokesman-Review, Spokane (8/9/05); Becky Kramer
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Builders Brace for Moratorium
Developers and real estate agents are predicting that home prices will rise and that first-time home builders will face a tougher housing market as the result of a six-month moratorium on new subdivisions in Thurston County, Wash. County commissioners imposed the moratorium in response to a state ruling finding that many of the county’s planning policies violate the state’s Growth Management Act, including urban growth areas that are too large, sometimes allowing the development of more than one unit per five acres of rural land and not setting aside enough land for farming. The county’s median home price was a record $228,500 in July. Glen Amendala, president of the Olympia Master Builders and owner of Horizon Home Builders, said that builders with new homes on the market will now probably get an artificial bump in the selling price. “That builder is drooling right now,” he said. “Their houses just went up $5,000 to $10,000 apiece.” He added that, “Every time you add a percentage to the price of a home, you knock out another percentage of first-time home buyers.” Smaller builders who are sitting on property they can’t develop could be driven out of business, Amendala said. And some builders will be forced to turn customers away. “I have six clients who want me to build and I don’t have any land to build on,” he said. (www.theolympian.com)
Olympian (7/21/05); Jim Szymanski
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Multifamily Housing Ban Ends
The U.S. Justice Department is investigating a moratorium against the construction of two-family and multifamily housing in east New Orleans that the city council allowed to expire on July 21. In March, Steven Rosenbaum, who is the chief of the Housing and Civil Enforcement Section of the department’s Civil Rights Division, wrote that his office was looking into complaints that the city had violated the federal Fair Housing Act through its restrictive measure. The council had been warned by the city attorney that moratoriums on permits for multifamily housing are most likely to affect poor people “who cannot afford to rent or own single-family homes.” Although a law discriminating against the poor is not necessarily illegal, she said, it is a violation of the Fair Housing Act if the effect of applying the law is to discriminate against minorities or people with disabilities. (www.nola.com)
New Orleans Times-Picayune (8/2/05); Bruce Eggler
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A Roof Garden? It’s Much More Than That
Landscapers have been installing a 35,000-square-foot green roof at Silvercup Studios in Long Island City, Queens, N.Y., where parts of the HBO series “The Sopranos” are filmed, in a design that aims to reduce air pollution, control heating and cooling costs, and absorb storm water runoff. Some 1,500 planters are putting 20 different species on the roof in soil that has been engineered to weigh only one-fifth as much as typical dirt. Data collected from the project will be used to convince commercial property owners and developers that green roofs can benefit the bottom line as well as the environment. A 2003 study in Chicago found that a green roof was able to absorb nearly half the water occurring during a downpour and that temperatures were 19%-31% cooler during the hottest hours of the day in July compared with a conventional roof. Low-rise, flat-roof buildings performed best. Green roofs typically cost $8-$10 a square foot, compared to $4-$6 for a regular roof, and local government involvement is critical, proponents say. “Isolated green roofs are expensive insulation,” said Leslie Hoffman, executive director of Earth Pledge. “But when you have a whole community of green roofs, it changes the microclimate of the area and reduces demand for energy.” (www.nytimes.com)
New York Times (8/10/05); Lisa Chamberlain
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Ordinance Produces Bland Residential Architecture
A county hillside development ordinance in western Riverside, Pa. will lead to “banality and sameness,” according to local architect Bill Warkentin, who has helped prepare these ordinances in the past and is a founding member of the county’s General Plan Advisory Committee. With the preservation of mostly flat agricultural lands and more than 500,000 acres for multi-species habitat, the hillsides are a “suitable and environmentally appropriate venue for development,” he writes. But the ordinance randomly excludes two-story entries, large glass areas and large chimneys, Warkentin complains, “when such features may be exactly what the owners are seeking to capture the view, accommodate the hillside grade and achieve energy conservation.” The ordinance also stipulates that the colors of homes within 500 feet of a protected ridge must blend into the natural color of the hillside. “However, as to whether summer brown, wintergreen or rock gray ought to be selected, the ordinance is silent. Elsewhere, all homes shall be in earth tones as though Riverside County residents had voted and determined that every hillside home should be the color of a mud hut.” (www.pressenterpriseonline.com)
Press Enterprise (7/31/05); Bill Warkentin
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Housing Gives Offices a New Lease on Life
Obsolete offices in the United Kingdom, Spain and Italy are being converted into apartments sought after by the “cappuccino” society that is embracing a return to city living. Realizing that there was a surplus of old office space that might be put to better use, local authorities in London amended the Central Government Planning Policy in January to make it easier to convert offices into apartments. According to the estimates of King Sturge, a real-estate advisory firm, about 30% of the new housing supply in the London borough of Westminster, where Parliament is located, is coming from the conversions of offices, many of them built in the 1960s and 70s. An affordable-housing policy requiring 25%-50% of housing in any new development to be affordable to workers such as teachers and nurses could squeeze developers’ profits and in turn slow down the number of conversions. (www.realestatejournal.com)
RealEstateJournal (8/10/05); Sara Seddon Kilbinger, Wall Street Journal
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No Place Like (Upgraded) Home; Remodels Rise With Equity
Thanks to the rampaging real estate market, while property values multiply, millions of home owners are remodeling to protect their investment and improve their living space. Remodeling activity accounts for about 2% of the total U.S. economy, according to the Harvard Joint Center for Housing Studies, and in 2003, home owners and rental property owners spent $233 billion on home improvements — a 52% increase over eight years. People are now renovating with an eye on recouping their costs when they sell. Remodeling magazine’s 2004 Cost Vs. Value Report shows that a home owner can recover about 93% of the $15,000 they spend on a minor kitchen remodel, for example. Some home owners are just trying to keep up with the Joneses and others figure that if their houses are worth double or triple what they paid, their kitchen and baths should match. (www.usatoday.com)
USA Today (8/4/05); Maria Puente
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In Outer Suburbs, Lighting Up the Night
In the Washington, D.C. region’s Calvert County, Md., measures to regulate outdoor lighting are at the center of a fight to limit urban sprawl. To some lifelong residents in the region, light pollution is just one more symptom of the transformation of rural outposts into bedroom communities. Growth for them means light from new subdivisions is obscuring the stars in the night sky. For newcomers who are accustomed to city lights, the main problem is that there isn’t enough light at night. A retired aeronautical engineer who moved to the county from Baltimore said that he wasted more than 2 ½ hours lost on the county’s unlit rural roads one night last winter after he was diverted from a major thoroughfare by a traffic accident. “I found it easier to navigate the California desert than make my way through the pathetically dark roads of Calvert County,” he said. Proposed county regulations would require light fixtures to be aimed down, prevent light from trespassing onto neighboring property and forbid neon-bright commercial lighting after 11 p.m. At least 11 states have adopted similar measures aimed at reducing light pollution. (www.washingtonpost.com)
Washington Post (8/5/05); Amit R. Paley
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