Where the Wolf Comes Knocking: Areas Already in Economic Distress Feel Rise in Housing Foreclosures
So far, the rising mortgage defaults that have panicked the financial markets have been concentrated in areas of the country already reeling from layoffs in the automobile industry and in hurricane-stricken states on the Gulf Coast. For those living in economically hard-hit areas, getting a loan from banks that specialize in “subprime” or risky mortgages was not an investment play or a way to get into an expensive home. It was often a matter of keeping families afloat as money got tight. Michigan has lost nearly 300,000 manufacturing jobs since 1999, with about half of those in the auto industry, according to state officials. And, while the rest of the country was recovering from the recession of 2001, Michigan’s economy sank into trouble. The loss of auto-related jobs “has been just devastating to our housing market,” said Dana Johnson, chief economist at Comerica Bank. “In other parts of the country, prices raced ahead of incomes. In Michigan, incomes fell away from housing prices.” Now, as the market for the riskiest types of loans collapses, the home owners holding such mortgages are the most likely to lose their homes, economists said. Whether the most troubled states are a sign of what is to come for the rest of the country will depend on what happens to the nation’s economy. While home-building and related industries are likely to shed more workers this year, most economists, including those at the Federal Reserve, have forecast that the economy will keep growing, albeit more sluggishly, propelled by job growth in health care, education, finance and other services. (www.washingtonpost)
Washington Post (3/15/07); David Cho and Nell Henderson
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Could This Robot Build a House in a Day?
USG has decided to invest in Contour Crafting, a process in which a concrete mixture-depositing, bulky one-armed robot layers rows atop each other until a structure forms. The robot takes its orders from a computer, and prints the concrete onto the earth the way a printer lays down ink. An invention of Behrokh Khoshnevis, an engineering professor and director of the Center for Rapid Automated Fabrication Technologies at the University of Southern California, the first machines were small, table-top robots that took computer instruction to make shapes that resembled beehives, funnels or curvy vases. By 2004, he made a larger version able to build a wall. “It is very early, but I think we see that it could change how at least some buildings are done in developing parts of the world and in remote sites where you don’t want to bring in a lot of outside material,” says Dan Boss, associate director of the Discovery Group at USG’s Corporate Research and Technology Center. Khoshnevis says it could bring about a more sweeping change in the construction industry. “Eventually, this technology can be used to make single-residence structures, condos or high rises,” he says. “We are just at the beginning of an era in construction where full automation is going to be important.” And it could greatly reduce the cost of constructing a new home — perhaps by two-thirds. (www.cbsnews.com)
CBS News.com (2/28/07); Christine Lagorio
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Manure: You May Be Walking on It Soon
Researchers at Michigan State University and the U.S. Department of Agriculture say that fiber from processed and sterilized cow manure could take the place of sawdust in making fiberboard, which is used to make everything from furniture to flooring to store shelves. The researchers hope it could be part of the solution to the nation’s 1.5-trillion- to 2-trillion-pound annual farm waste disposal problem. Under pressure from regulators and the public, more large livestock operations are installing expensive manure treatment systems known as anaerobic digesters, which use heat to deodorize and sterilize manure, while capturing and using the methane gas it produces to generate electricity. The systems also separate phosphorus-laden liquid fertilizer from semisolid plant residue. The solids have some known uses, such as for animal bedding and potting soil, but agricultural scientists would like to find more. In testing on various types of fiberboard made with the “digester solids,” the manure-based product is made the same as with the wood-based original by combining fibers with a chemical resin, then subjecting the mixture to heat and pressure. So far, fiberboard made with digester solids seems to match or beat the quality of wood-based products. And the manure-based fiber is “cheaper than dirt,” according to a consultant on the USDA lab’s research project. (www.usatoday.com)
USA Today (2/10/07); David N. Goodman, Associated Press
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A Concrete Step Toward Cleaner Air
Visitors to the Italian Pavilion of the architecture exhibition in last fall’s Venice Biennale got a breath of fresh air because parts of the concrete walls and grounds were built with cement containing an active agent that, in the presence of light, breaks air pollutants such as carbon monoxide, nitrogen oxide, benzene and others through a natural process called photocatalysis. The technology, called TX Active, has been under development for almost 10 years in the labs of Italcementi, the world’s fifth-biggest cement producer, and is starting to be applied commercially to buildings and streets in France, Belgium and elsewhere. The results so far are astonishing: a street in the town of Segrate, near Milan, with average traffic of 1,000 cars per hour, has been repaved with the compound, “and we have measured a reduction in nitric oxides of around 60%,” says a spokesperson for the manufacturer. In a test over an approximately two-acre industrial area paved with active blocks near Bergamo, Italcementi’s hometown, the reduction was measured at 45%. Depending on specific atmospheric conditions, covering 15% of all visible urban surfaces — such as walls and roads — with products containing TX Active could abate pollution in a city like Milan by up to 50%, according to company and outside estimates. “To transform the façade of a five-story building into a photocatalytic surface would add only 100 or so euros to the cost of a traditional paint or plaster,” the company says. (www.businessweek.com)
BusinessWeek (11/8/06); Bruno Giussani
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FHA Comes to the Rescue of the Credit-Challenged
With the subprime mortgage industry in free fall, the Federal Housing Administration is actually expanding its business nationwide for credit-impaired and first-time home purchasers. The agency recently has seen a doubling of customers refinancing out of private, subprime loans into its insured mortgage programs. The FHA doesn’t have problems with Wall Street investors who now see subprime mortgage bonds as toxic; its bonds, by contrast, are gilt-edged and backed by the federal government so there’s no shortage of mortgage money. Equally important, FHA-insured loans are more consumer-friendly than subprime and come with interest rates roughly three percentage points below directly comparable subprime loans. Among drawbacks to the loans: mortgage maximums top out at $363,000 in high-cost areas; 3% downpayments generally are required; borrowers are required to document their incomes; and there have never been “payment option” plans that allow borrowers to send in almost nothing every month while adding to their principal debt through negative amortization. Up until recently, the FHA’s share of the market withered while the private subprime market boomed because the FHA had developed a reputation for bureaucratic red tape, slow processing and excessive rules on mandatory repairs of properties before sale. The FHA also did not forge ties with the fast-growing mortgage brokerage industry, which now originates nearly two-thirds of all new home loans. But easy-money, no-questions-asked loans for people with bad credit habits are now the dodo birds of the mortgage market, and the FHA is taking steps to improve. (www.washingtonpost.com)
Washington Post (3/17/07); Kenneth R. Harney
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NextGen House Steals the Show
Not a thing of beauty, at least on the outside, the 2,700-square-foot NextGen House gave visitors to the International Builders’ Show a peak into the future of home construction. Just up the stairs, several cutaways allowed builders to see in action a hybrid heating and air conditioning system by Carrier that switches automatically from natural gas to electricity, depending on the outdoor temperature. Up on the roof, stone-coated, shake-like steel roofing panels made of 25% post-consumer recycled steel were interlocked to protect against earthquakes and 120-mile-an-hour winds. Among the crowd stoppers in the interior was the master suite, which was coated in Kelvar, the same material that is used in bullet-proof vests, so that it can function as a storm shelter. Another was the disappearing faucet by Delta, designed to save kitchen work-space. To get water, simply pull the inlaid joystick and the spout rises out of the countertop. When you’re done, push the control back and the spout retreats back out of the way. (www.realtytimes.com)
Realty Times (3/14/08); Lew Sichelman
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