Wildfire Fears Fuel Furor Over Housing
The specter of the disastrous Southern California wildfires haunts residents of Nedonna Beach, Ore., a 350-home coastal enclave north of Rockaway Beach where wooden homes nestle among trees and the only way in and out is at the south end, where a street crosses railroad tracks to join U.S. 101. In a turbulent meeting at Rockaway Beach’s City Hall, home owners pleaded against new development they said would crowd too many people into their community with only one escape route in a wildfire, tsunami or other emergency. But the planning commission, after its annoyed chairwoman ordered the public out of the room, approved a new 47-home addition called Nedonna Estates — only to have its action declared invalid in subsequent days and scheduled for rehearing. The dispute stands out because it reflects what wildfire experts say is a dangerous trend across the West of new development with too little regard for the flammable landscape around it. Some of Oregon’s worst wildfires have struck in dense coastal forests. State fire officials say a second emergency access route to Nedonna Beach should be a key element of community planning, but city officials said it would be far too expensive to build a new access at the other end of the community, because U.S. 101 runs mostly along a ridge high above the homes. They said the developer would provide the city a new public right of way that might allow a second road access — if Nedonna Beach residents all chip in to pave it. (www.oregonlive.com)
The Oregonian (11/5/07); Michael Milstein
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Nation Must Adapt to Greater Wildfire Risk
Even though a firm link between one of the most intense California fire seasons in 50 years and global warming has yet to be made, planning for how to adapt to larger and more frequent wildfires is under way. It includes building homes with fire-resistant roofs and windows, and landscaping with fire-resistant plants. It also means planning new communities with streets wide enough to handle evacuation traffic even when the curbs are lined with fire trucks, and it means maintaining homes and property over time. People who live in flood plains or hurricane zones generally “understand the need to adapt and to build differently,” says James Smalley, who heads the wildfire-protection program at the National Fire Prevention Association in Quincy, Mass. “But people who live in natural settings don’t quite get it — that you can adapt, that you can still have a natural, beautiful setting. You have to understand that fire is part of the natural landscape. So you have to adapt.” The greatest increase in fire-hazard risk from climate change, some researchers say, is likely to come in the East and the Southeast U.S., not in the West. There, snowmelt and rainfall are unlikely to slake the increasing thirst of trees and shrubs as carbon dioxide spurs their growth during longer, warmer growing seasons. This could leave more of the eastern woodlands drier and more vulnerable to wildfires by summer’s end. Meanwhile, some of the densest mingling of homes and woods — what experts call the wildland-urban interface — can be found in the eastern U.S. On a related front, two years ago a team of forest ecologists at the University of Wisconsin found that 44.3 million homes in 2000 – nearly 39% of all the housing units in the lower 48 states — were built along the wildland-urban interface. (www.csmonitor.com)
Christian Science Monitor (11/1/07); Peter N. Spotts
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Government to Push for Homes Built to Last 200 Years
In a project aimed at reducing the need for rebuilding homes, Japan’s Prime Minister Yasuo Fukuda will propose a law next year for more durable types of houses and condominiums that will last for 200 years, including tax incentives to build and buy them. According to the Construction and Transport Ministry, the average life span of Japanese residences from construction to demolition is about 30 years, compared with 77 years in Great Britain and 55 years in the United States. Among the proposed changes in residential construction and design standards: the size of posts and beams would be increased to strengthen earthquake resistance; and building foundations would be higher to improve airflow and durability. The plan would encourage regular maintenance of houses and condos and electronically store and manage records on their state of repair. In apartment buildings, the construction method will separate the structural skeleton of the building from the interior design and layout of individual units so residents can make changes to suit themselves. The proposal hopes to decrease housing-related industrial waste by 10 million tons a year and reduce housing costs by as much as one-third for building or acquiring homes and maintaining them. However, the construction cost of such buildings is expected to be 10% to 20% higher than an ordinary residence, the ministry said. (www.yomiuri.co.jp)
Daily Yomiuri Online, The Yomiuri Shimbun (10/20/07)
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In Pursuit of a Downpayment: With Lenders Wanting More, Buyers Have to Dig Up New Sources of Money
Even for people who have money, coming up with a downpayment to buy a house has become a lot more challenging in recent months. After winning a bidding war on a 2,000-square-foot home in Takoma Park, Md. with an offer of $710,000, the hard part for Peter McGarvey was making enough of a downpayment to get a good rate on a loan and keep the monthly mortgage payments manageable. Because he had not yet sold the home he already owned, he had to put together a downpayment from other sources. “We have lots of equity in the house,” he said, “and we have money saved up. Unfortunately, most of it is in retirement funds and mutual fund investments. McCarvey and his wife came up with 10% down and the cash they needed for closing costs using $25,000 from the sale of mutual funds about a year ago, $25,000 from parents and another $50,000 from their Thrift Savings Plan, a retirement program for federal employees. Even a few months ago, borrowers did not have to go to such lengths and it was easy to get a mortgage that required little or no money down. The median downpayment for first-time buyers was 2% of the purchase price in 2005 and 2006, according to the National Association of Realtors®. While lenders are now looking for more down, that’s not to say they are requiring downpayments of 20% or more, which was the norm until the mid-1980s. FHA borrowers can get loans calling for 3% down; and veterans or members of the military still quality for 100% financing. On conforming loans up to $417,000 eligible to be purchased by Fannie Mae and Freddie Mac, 5% is now the minimum downpayment. Jumbo loans higher than $417,000 will probably require 10% down. Many employers will allow prospective home owners to borrow money from their 401(k) account; borrowers pay interest on the loan and repay it over a specified period of time with after-tax dollars. (www.washingtonpost.com)
Washington Post (11/3/07); Nancy Trejos
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Reprieve for the ‘Piggybackers’: Still No Credit-Score Crackdown
Despite industry pledges to do so at the end of the summer, “piggyback” credit-score-inflation schemes for mortgage applicants haven’t been reined in. As a result, lenders continue to be misled into treating loan applicants with poor credit as prime-credit candidates, worsening already critical delinquency problems in the mortgage market. The piggyback problem involves Internet-based firms that “rent” high-quality credit account histories to people with bad credit. Web sites claim to be able to raise consumers’ scores by 100 to 200 points, or more, in 30 to 90 days. They do this by paying credit card holders with excellent payment histories to open their accounts to authorized users, who are charged, sometimes $1,000 to $2,000, for the privilege. Once listed as an authorized user even with no physical access to the Visa or MasterCard itself — the positive credit history of the cardholder flows through to the credit files of the piggybacker. Consumers with FICO scores in the mid-500s can add multiple authorized-user accounts to their files, promoters claim, and boost their scores into the mid-700s. (www.washingtonpost.com)
Washington Post (11/3/07); Kenneth R. Harney
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Housing Woes Sting Region’s Retailers
The worst housing market in 16 years has dinged everything from banks to car dealers to staffing companies, and now it might prove to be the lump of coal in the Christmas stocking. Retail sales in Florida have been declining since the start of the year but now are reaching levels that are starting to alarm economists. “Every month this year through September, sales are down over the same month prior year,” said Frank Williams, an economist with the state demographic research office. “That’s true for most categories. In real terms, if you adjust for rising prices, they’d all be negative.” Part of the reason Florida has been hit so hard is that the state’s retail sales had been in overdrive for so long, pushed upward by a strong stock market followed by a hot real estate market, he said. Thirty-eight percent of Floridians say that the spiraling costs of insurance and taxes have affected their spending habits, says retail analyst Britt Beemer, who founded America’s Research Group. Couple that with the impact of resetting adjustable-rate mortgages taken out during the housing boom, and there is a huge drawdown, he said. “Some people are seeing mortgages that are up $200 and $300 a month,” Beemer said. “If you take $200 or $300 out of a marketplace, that’s a lot of dollars. There’s less disposable income and that’s why we have a problem in Florida.” (www.heraldtribune.com)
Sarasota Herald-Tribune (11/4/07); Toni Whitt
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