2009 April | MHN Blog

‘Capital Insights’ with Jack Kern: Will Housing Sink or Sail for Obamania?

"The Accidental Economist" with Jack Kern No Responses »

Apr 272009

“The only function of economic forecasting is to make astrology look respectable”–
John Kenneth Galbraith, (1908-2006) Noted historian, economist and commentator.

Presidents rise and fall with their public’s perception of economic progress. With the advent of personal computers, spreadsheet software and a few hours of instruction, the motivated executive can now construct a financial model and forecast that will ultimately provide the answer they need, with little regard for pesky things, like rules of logic, facts and an economic history that simultaneously flies in the face of reality while making the author of the worksheet look like a genius.

“Wow, nice worksheet,” I’ve heard people explain, “and you made good use of pivot tables and lookups too!”

Probably the only command lacking in Microsoft Excel is the Bozo quotient. If you could take a worksheet and put in the Bozo quotient or BQ as the cognoscenti call it, you’d get a more reasoned result. It might mean a big clown face pops up and a voice says, in Italian, “lei è idiota” you’re an idiot, (because it always sounds better if you insult people in Italian) but at least you’d be saved from yourself.

Such is the nature of housing economics. Between the wide ranging forecasts from the National Association of Realtors, “It’s always a good time to buy a home,” to the National Apartment Association, “Only a moron would buy a home,” (I have a t-shirt that says that) and everything in between, the forecasts don’t always provide a factual basis or interpretation. We of the rental brethren need to understand the housing situation to help figure out how to price our communities and determine what choices today’s renters face. Since a lot of new data just came out, let me lay it out for you:

Existing home sales fell 3% in March to a 4.8 million unit seasonally adjusted annual rate, effectively balancing out the almost 5% gain in home sales in February. (Now, for one thing, I do find it funny to call them existing homes, as opposed to what? Existential homes or psychic cottages?)

At the current slow pace of sales, it would take about 10 months for the entire inventory to be absorbed, and we’re still adding huge numbers of foreclosures and other homes to the mix.

Now to add some order and interest to this, let’s look at an ordinary situation and a typical purchaser across the U.S., meaning we’re going to ignore multimillionaire owners and bottom feeding investors.

The FHFA home price index rose about .7% month-to-month in February, after posting a 1% gain in January. This means that home prices are only down, net about 6.5% on a year-over-year basis. This is a complete, but welcome contradiction over other indices. The FHFA numbers are for conforming mortgages only and because of our old friend seasonality and some reduced unit sales volumes, the trend is positive and more representative of typical buyers than not.

It goes with my assertion to you that the recession, having been stalled in a trough for most of the past year, is now lessened in severity, and these more typical indictors are going to show strength in markets once again.

Until then, put away the worksheets and fancy forecasts and just see if the average Joe and Jane you know are starting to spend money again, because if they are, the end of this recession can’t be too far off.

(Jack Kern is the managing director of Kern Investment Research and can be reached at JKern@KernIRC.com. If you’d like a t-shirt that says, “Only a moron would buy a home” or “Solo un idiota comprerebbe una casa,” please let him know and he’ll see about getting a bulk deal for multifamily owners.)

‘The Green Picture’ with Erika Schnitzer: Embracing the Earth—All Year Long

Miscellaneous 1 Response »

Apr 222009

Earth Day is now Earth Week.

News about climate change and the green movement—and what everyone is doing to advocate against one and promote the other—is everywhere this week.

Last weekend, for example, The Tower Cos. held a “Recycling Day Festival@The Blairs,”—a 1,400-unit community in Silver Spring, Md.—collecting donations of clothing, electronics and furniture with participating sponsors. And Archstone is hosting a “Green Leasing Expo,” a four-day event in the West Region designed to encourage residents and prospects to conserve natural resources—and at the same time is offering a “Go Green and Get Green” savings of up to $500 in rent with the signing of a new lease.

On a larger scale, the Environmental Protection Agency took its first step toward regulating pollution last week when it declared CO2 and other heat-trapping gases as pollutants that threaten the public heath and welfare of individuals.

To some of you in the industry, all of this may not seem so—excuse the pun—earth-shattering. I keep talking to industry experts who insist green building is no longer just a trend or a movement; it is here to stay. (And with the recently approved National Green Building Standard, green building has become even more expected, to some extent.)

So what is the new norm? As an industry, have our expectations surpassed those of the average consumer?

The National Association of Home Builders recently announced that over 2,700 industry professionals have achieved its Certified Green Professional designation. And the Green Building Certification Institute (GBCI), the organization that administers LEED AP certification, just last week announced that over 101,000 professionals have earned their LEED (Leadership in Energy and Environmental Design) AP credential.

As we keep one eye on the environment and the other on the economy, this number is only expected to rise. According to GBCI, the number of LEED APs doubled in the last year, outpacing the organization’s projections, as the economy took a turn for the worse and industry professionals recognized the competitive edge this certification would provide for them.

Perhaps, then, the government should look to the built environment for examples of best practices for cutting energy costs. As an industry, we have seen some truly innovative—as well as seemingly ordinary—measures to reduce greenhouse gases and improve residents’ quality of life—not to mention that many, if not all, of these initiatives end up positively affecting the bottom line in the long run.

A New York Times magazine article this weekend discusses how some evidence seems to suggest that, at least for now, homeowners are making more environmentally sound decisions. Though the author notes this may be a sign of the economic times, certainly we are all becoming more aware of the health and financial benefits of greening our homes.

And its not just homeowners. According to a recent Apartments.com study, renters are becoming more conscious of the environmentally friendly measures they can take in their apartments. The survey found that 65 percent of renters emphasize the need for an environmentally friendly lifestyle and that 60 percent of renters claim to search for apartments based on their sustainable offerings (Click here to read MHN’s coverage of the study).

It’s not as if we are just now waking up and realizing that we all must take part in reducing greenhouse gas emissions to help the environment and preserve whatever future our children may have. Our industry, which is certainly one that has a tremendous impact on carbon emissions—buildings are responsible for 70 percent of electricity use and 40 percent of carbon emissions, after all—has quite clearly taken a stance on the importance of sustainability.

Share your thoughts, as well as what you doing to celebrate Earth Day, or rather, Week. Email me at Erika.Schnitzer@nielsen.com.

(Erika Schnitzer is the associate editor at Multi-Housing News)

‘Editor’s Notebook’ with Diana Mosher: Working Smarter Not Harder

"Editor's Notebook" with Diana Mosher No Responses »

Apr 212009

In New York City the daffodils are in full bloom and you don’t have to go to Central Park to see them. You may not find any blooming flowers in Times Square, but in other parts of town urban landscaping is plentiful and quite effective. It provides excellent curb appeal—a concept that takes on a much more literal (and urgent) meaning in city environments where, frequently, only a small bit of sidewalk separates the entrance of an apartment building from the curb.

With smaller green footprints to design and care for, urban locales generally mean easier—and less costly—landscaping choices.

One of the highest-priced aspects of suburban multifamily landscaping is turf maintenance. IREM reports in its April Journal of Property Management that some multifamily communities are opting for low-maintenance ground covers rather than maintaining a lawn. They’re realizing savings as a result of reduced water use and lower fuel and labor costs associated with lawn mowing. Ground covers, on the other hand, only need occasional pruning.

What’s your approach to curb appeal, landscaping, and water management? What type of irrigation system do you have, and does it employ sensors that detect when watering is (and isn’t) needed?

Share your tips and ideas with us. Drop me a line at diana.mosher@nielsen.com

‘Gimme Shelter’ with Daniel Gehman: A Better Mousetrap

"Gimme Shelter" with Daniel Gehman, TCA 1 Response »

Apr 202009

It is a balmy Southern California evening as I sit on the porch to write this post. The seasons are clearly changing as we slip further into spring, which definitely feels like the beginning of summer.

The harbingers of change continue to abound for the housing industry, signaling the stirrings of a return to better health. Shaken and awakened as we are by the tumult of the last year, especially the last six months, all eyes are on the future: when the recovery finally takes hold in earnest, what will it look like for the multifamily industry?

One thing is becoming abundantly clear: the next generation of denser housing will definitely not be “your father’s Oldsmobile,” a phrase made particularly poignant by the fact that grand old nameplate no longer exists. The paradigm that will emerge from the shake-up is one of renewed vigor and innovation in response to startlingly different market demands.

Housing is product. There, I said it. It is mass produced (though on a smaller scale than, say, the afore-mentioned automobile) and marketed, in an increasingly competitive marketplace. We, as designers, must seek solutions that help our clients to find and maintain the edge.

For the foreseeable future, the places we build must bring great value. That is, within each of the typical product thresholds (walk-up, wrap and podium), it is more necessary than even to not only be in the game, but be on top of our game.

The cost of the “stick and bricks” of each of the afore-mentioned genres are relatively fixed. Therefore, within each area, it will be necessary to search, as perhaps never before, for solutions that rigorously pursue the values of the developers and operators. Which features will most successfully attract and retain the most residents? Which will simplify and streamline the operations processes? Which will be the most efficient to build?

The housing bubble stretched the sensibilities of what might work, because, for a brief moment, almost anything worked. Today, not so much. It is true that the burgeoning condo market had an indelible effect on the expectations of renters, as the fit and finish of almost everything approached “condo specs.” With multitudes of condominium projects entering the market as “shadow rentals,” the options available to leasing clients remain at an unhistorical high. Add to that slipping rental rates and occupancies, and we have quite an issue on our hands.

But this could be a good thing. Developers, of course, must continue to develop, even if it is at a wildly reduced pace. For those in the apartment business, models must be found that can stand against the rental condo market for the next several years, but with fundamentals that make them worthwhile to build.

Where do the answers lie? Generally speaking, it is in the combination of density, efficiency, flexibility and value. Within each type, this will mean different solutions. High-rise concrete rental communities are pretty much off the table for the moment, which means we will see several years of increasingly sophisticated mid-rise products, in all but the most urban markets.

The new communities we will see will be focused more than ever on the utilization of emerging technologies in wood construction, especially in the basic systems needed to power and service these structures. Pre-fabrication and modularity may finally see its well-deserved place in the sun. Systems for heating, cooling, and energy generation will be more and more seen as integrated elements in a new generation of “ultimate living machines.” Because rents will be so competitive, the costs of renting must also be kept to a minimum, and this will be inextricably linked to resource consumption.

Small, as you may have heard, will be the new “black.” However, the new small will be a feature-intensive environment that was rarely even dreamed about in the pre iPod Nano era. Yes, we can do more with less—but it has to do it extremely well.

Multifamily structures are enormously complicated machines. As with the best cars available today, these communities will rely more and more on the performance qualities of the hardware than on the sex appeal of the skin. High performance will become sexy because of the returns.

I’m glad we still have a drawing board, because, believe me, we’re hitting it like no other time in recent memory. The future is a great big place, full of unimaginable possibility.

Let’s get on board. The train is leaving the station.

(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)

“The Green Picture” with Matt Voorhees: Water Conservation is Really, Really Easy and Doesn’t Need to be Expensive

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Apr 172009

You don’t need to own or manage multi-housing units to see how effectively today’s high-efficiency conservation fixtures work. Even in a single-family unit, the results of retrofitting with high-efficiency products can be impressive. But when you begin to do math for the multiple units, the results can be downright awe-inspiring. If you are prone to green thinking at all, you can’t help but wonder what it would be like if everyone everywhere decided to conserve water.

The beauty of water conservation is that it is really, really easy. And it can be very inexpensive, too.

High efficiency toilets (HETs), of course, make an enormous difference in the conservation effort. But toilets are a bigger-ticket item, and installing/retrofitting with the latest water-efficient models generally only appeals to owners/managers who are either doing new construction or whose existing fixtures are old and need replacing anyway.

Owners/managers who fall into those two categories are usually candidates for “flapperless” toilet models. The appeal there is that the flapperless guarantees 1.28 GPF (gallon per flush) (because it is not the tank that fills with water, but a tip bucket within the tank, and it only holds 1.28 gallons). The flapperless is virtually maintenance-free, because there is no pesky flapper constantly calling for replacement—and then often leaking anyway if the replacement parts are even slightly off-kilter.

But toilets aside, the easy-to-install, incredible-result-getting conservation fixtures I’m talking about are so small they can fit in the palm of your hand, and are so inexpensive that one retrofit or installation can cost less than a gallon of paint. I’m talking showerheads and aerators.

Replacing an old water-hog of a showerhead with one of the many high-efficiency models that are currently being manufactured is so easy a kid on a step-stool can manage it in just a couple of minutes—and without any tools. But even more exciting is the fact that the high-efficiency models being made these days don’t feel “low-flow” at all.

A special technology uses a flow compensator (instead of a flow resister) to allow less water to stream out but at a higher pressure, so it feels just as luxurious as showerheads that use more water. And the models being made today are just as adjustable as the water-hog models of yesteryear, offering everything from a gentle needle spray to a forceful jet. Today’s high-efficiency models generally offer between 40 and 50 percent reduction of water over standard models. And they are nothing compared to some of the models in development.

Think of it: The average person spends about seven minutes in the shower daily. If we’re talking an average of 1.8 people per household unit showering for seven minutes a day, that’s almost 13 minutes of nonstop water usage, not to mention the electric or gas energy that is heating it. Once you start multiplying 40 to 50 percent savings by multi-unit housing numbers, you can get into some pretty big numbers.

Aerators are in some ways even more of a conservation tool than showerheads. They are outfitted with the same flow compensator technologies, but while their water- and energy-saving percentages are slightly less impressive (they generally offer about a 30 percent water/energy reduction) when looked at on a case-by-case basis, some new kitchen aerators feature a pause lever that reduces water to a trickle while keeping it at the same temperature.

Anyone who spends a lot of time in the kitchen doing dishes can tell you that this fantastic feature can’t be underestimated. It means that you can wash a plate, flip up the pause lever while you place the plate on the drain board and reach for the next plate, and then flip the pause lever back down when you are ready to wash plate number two. People don’t realize how much time (and thus wasted water) passes between plates until they begin to use this feature.

Even owners/managers who are not in a position (because they don’t pay the utility bills) to gain directly from such savings can still experience a gain. By installing conservation products in their units, they can pass savings onto their renters and/or customers. The current standards for showerheads are 2.5 GPM at 80 psi; for aerators it is 2.2 GPM; and toilets are currently at 1.6 GPF. These guidelines were established in the EPA legislation of 1992.

Once you start cutting away at these water levels, and multiplying the savings by units, you are talking enormous savings for the earth too.

Almost everyone wants to go green these days, but many people have no idea where to begin. In this way, owner/managers can actually become leaders in the green revolution.

(Matt Voohees is the business development representative for Niagara Conservation)

‘Foong on Finance’: Prognosis for TALF: Not Good?

"Foong on Finance" with Keat Foong No Responses »

Apr 162009

The Term Asset-Backed Securities Loan Facility (TALF) was extended by the Obama Administration in February to provide government financing to private investors for the purchase of CMBS in addition to other types of asset-backed securities. At this point, signs that TALF would have a positive effect in reviving the conduits market may not be good.

According to Sam Chandan, president and chief economist of Real Estate Economics LLC, in his Monday report of April 13, the results of the second round of funding from the government “raise serious questions about the viability of the TALF program in its current form.”

The problem may be that private investors are not stepping up to the plate to obtain the financing, administered by the Federal Reserve Bank of New York. In the second round of funding in April, “loan requests totaled just $1.7 billion, down 64 percent from the first round’s already meager $4.7 billion,” writes Chandan.

These first two rounds of fundings are for the purchase of the other types of asset-backed securities initially covered by TALF. In the first round of TALF funding, for example, private investors requested loans for auto- and credit card-backed securities, though none for student loan- or small business-backed securities.

The Federal Reserve Bank of New York has characterized the first round of loan requests as “a good start” and stated in its announcement that “spreads in the areas where the program is now focused have narrowed significantly.”

So far, TALF funding has not been applied to the purchase of commercial real estate securities. The Wall Street Journal reports that details remain sketchy on the expansion of TALF funding to CMBS. Perhaps investors will respond better to CMBS? If not, as Chandan states, policy makers may need to “revisit options for improving commercial mortgage credit conditions.”

(Keat Foong is the executive editor of Multi-Housing News. She can be reached at keat.foong@nielsen.com)

‘Eye on the Economy’ with Adam Perrotta

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Apr 152009

As concerned taxpayers around the nation take to the streets in “tea parties” to protest the federal government’s spending on financial rescue efforts, an eventual economic recovery still seems far away. But there are a few glimmers of hope on the horizon.

Those aggrieved tea partiers can at least take some solace in the fact that the money they do have left after doling out to Uncle Sam will go a bit further these days. The Consumer Price Index fell in March by 0.1 percent and—more notably—registered its first annual decline since 1955, dropping 0.4 percent from March of 2008.

Of course, that is not exactly cause for dancing in the streets, as most of the decline was due to the rapid fall of gas prices from their record highs of last summer. As the weather warms again, prices at the pump should begin to inch back up again, though probably not to the astronomical, speculation-driven levels of summer ’08. Still though, as consumers continue to feel the pinch in their pocketbooks, rising gas prices could further curb spending in other areas.

On the other hand, though, comes news that world demand for oil is continuing to shrink–and rapidly so. OPEC’s latest monthly oil market report predicted that demand would sink by 1.37 million barrels per day in 2009, to an average of 84.2 million barrels per day. A big chunk of the slowdown is being pegged to developing countries such as China and India, whose formerly-booming appetite for oil has been curbed by the global economic slowdown.

The demand drop should put downward pressure on prices, but OPEC said it will slash production by 4.2 million barrels per day in order to bolster price levels. What the net outcome will be to the American consumer—and by extension, the American economy—remains to be seen.

One illustration of how the spending of John Q. Public ripples throughout the economy; as consumers pull back at the cash register, U.S. states are seeing sales tax coffers dry up. State revenue fell 4 percent in last year’s fourth quarter, the biggest such drop in 50 years, according to a report by the Rockefeller Institute of Government. Thirty-five states saw total tax revenue drop during the quarter, with six-seeing double-digit declines.

And the situation is not likely to improve any time soon. So far this year, initial data indicates that 41 states have reported tax collections in January and February were down 12.8 percent compared to the first two months of 2008.

As the economy continues to weaken, state and local governments are likely to continue to see tax revenue shrink, limiting options for fiscal stimulus at those levels. Whether you agree with this week’s tea partiers or not, one thing seems certain; any further government effort to kick start the economy will probably have to come from Washington.

(Adam Perrotta is a news writer at Commercial Property News, MHN's sister publication . He can be contacted at Adam.Perrotta@nielsen.com)

‘Gimme Shelter’ with Daniel Gehman: Resurrection

"Gimme Shelter" with Daniel Gehman, TCA 2 Responses »

Apr 142009

A couple weeks back I wrote about the travesty of the house next door, which had, under my unsuspecting nose, been transformed into an ultra-sophisticated hydroponic pot farming operation. This went on for nearly three years, with my wife and I suspecting nothing.

Not long after I posted that, I heard through the grapevine that the house had been sold. We waited, praying (admittedly, rather selfishly) that the new owners would be a good fit for us personally, and for the neighborhood.

Yesterday, we got our first glimpse of the new reality. Shortly after the thirty cubic yard dumpster arrived on site, so did the workers—who set about the task of dismantling the chaotic yet technically brilliant trappings of the enterprise. On my Saturday morning roller-blading outing, I stopped at the house and met the new owner and his contractor buddy.

What I think is about to unfold next-door sounds wonderful in many ways. First, the new owner is a newly married early-40s type with no children (Check!) who also happens to be a contractor, who is doing the work himself (Check! Again.) He is also a very pleasant, articulate fellow with a charming wife (Check! Check!) Of course, he asked me to relate the situation of how the property came to be in its alarming state, and I had another adventure of describing the byzantine rise and fall of the dope farm next door. Oh, and I urged him to scrub the blood off the front porch before his wife arrived to help out.

In what I deem to be an amazing “extreme makeover” episode, he and his crew had largely removed from the house most of the detritus by Sunday afternoon, and it lay in crumpled heaps in both the dumpster and the driveway. Huge sections of insulated ducts and circulating fans lay among the residue of drywall and light shafts. When I walked through the house, the windows were all uncovered again, revealing the bones of what is a pretty nice, if modest, single-family dwelling. With the heavy demo work complete, my new neighbor set about the task of cutting the grass, which had grown into a meadow.

I’m telling you this story because to me it is a poignant metaphor for what our industry has been enduring over the last year and a half. Clandestine enterprise was the culprit behind the devastating destruction of value that took place over my back fence. Today, at least one of the perpetrators is behind bars, and heaven only knows what became of the man gunned down by sheriffs at the house next door.

Our new neighbor bought the house with cash, for less than half of the previous sale price. The amazing thing is that he was able to see through the horror of the jerry-rigged “intervention” to the quality bones of the place showing through underneath. Now, with a little sweat equity and good sense, he has set about transforming it into a love nest for him and his new wife. In the process, we have gained promising new neighbors, and, if all goes well, new friends.

It is an astonishing turn of events, one that leaves me struck with wonder and gratitude.

There is the short term annoying factor that this sale will continue to torpedo the comps for my house. Last summer, the property to the east of me sold as a foreclosure to another young couple with whom we have a developing relationship. Nevertheless, the sale price was a shock to the system, like a cool sip of water following a mouthful of cranberry sauce. But they have both improved the property, as well as the culture of our street.

Now the northern neighbor, I expect, will do the same thing. As I consider all of these things, I pause to grasp the bigger picture. Sure, the “paper” value of my house will be suppressed for a while, but that’s what it remains—paper. On the other hand, the tremendous improvement of the social milieu is one that I anticipate will yield dividends far into the future.

What will come of all the wreckage in the housing industry? I hope that many of you will enjoy the tremendous good fortune and pleasant turn of events that my family is currently experiencing. What was broken down and de-valued by the unscrupulous can be picked up, dusted off, and returned to circulation better than it was before.

I am filled with hope. From all the news around us, it is possible that the darkest days of this crisis may be coming to an end; it may even be in the process of turning around as you read this. Continue to expect the unexpected; work hard, and believe in the future, and keep your eyes peeled for small glimmers of re-construction like the one to which I am presently witness.

May you be pleasantly surprised, and soon.

(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)

‘Capital Insights’ with Jack Kern: The Department of Justice is Anti-Multifamily

"The Accidental Economist" with Jack Kern 2 Responses »

Apr 132009

“Government has laid its hand on the health, housing, farming, commerce and education industries, and to an ever increasing degree interferes with the people’s right to know. Government tends to grow; government programs take on weight and momentum as public servants say, always with the best of intentions. But the truth is that outside of its legitimate function, government does nothing as well or economically as the private sector of the economy.”

President Ronald Reagan, 40th President of the U.S. (1981 to 1989)

The housing markets are a mess. The massive fraud, perpetrated while the regulators were sitting on their fat policies and gorging on donuts and coffee, desperately needs to be investigated and cleaned up. Priorities have to be given to ferreting out the fraudsters and putting into place policies that make sense.

So what’s that Department of Justice up to now? (Remember, this is the new Department of Justice, promised by Obama to be more open, more honest and more reasonable. We have Eric “I’m not related to Capone” Holder to thank for this piece of Federal Racketeering.)

They’re taking aim at JPI and six affiliated JPI companies. Here’s the story:

According to the complaint, “certain JPI complexes designed and constructed by the defendants have inaccessible steps and curbs leading to units, steeply sloped routes leading to units, and no accessible routes to site amenities, including inaccessible trash facilities, barbeque grills and cookout tables. In addition, certain housing units have narrow doors and hallways; kitchens that lack accessible clear floor space at the sinks, ranges and refrigerators; bathrooms that lack accessible clear floor space at the toilets and tubs; and thermostats that are mounted too high to be accessible to a person using a wheelchair. The lawsuit seeks a court order requiring the defendants to modify the complexes to bring them into compliance with federal laws and prohibiting future discrimination by the defendants. The lawsuit also seeks monetary damages to compensate victims and a civil penalty to be paid to the government.”

It is becoming increasingly obvious that with Federal policies so overtly slanted against multifamily we’re going to see a return to homeownership preferences at any cost after the foreclosure crisis is resolved. This continuous level of attacks on professionally managed apartment buildings is a policy sham. Does anyone at the Department of Justice know how to read? Have they seen that all construction plans go through rigorous entitlement and review processes, not to mention excessive and burdensome inspections during construction? Did some moron on Holder’s staff all of a sudden become an expert in what is a reasonable accommodation for someone with disabilities? And lastly, and I’ve been doing this a long time, where the hell are the disabled people living? I’ve not only never seen anyone come into any community I’ve worked with, but have only heard of an occasional disabled renter. And in that instance, I know for a fact that the rental office staff worked diligently and well beyond the call of what we’d expect to accommodate the needs of the disabled individual.

Multifamily construction is down by volume, permits and every other measure. We can only presume that when the economy turns and capital markets permit the development pipelines to move forward once again will larger owners and developers become targets of the Department of Justice. It’s time for the Congress to repeal the ADA (Americans with Disabilities Act) and rewrite the law to permit a rational discussion of what constitutes accessibility. Requiring every unit to be accessible is burdensome, unreasonable and economically unviable for the industry. Let Obama stand up and resolve this issue, instead of hiding behind continuous campaign platitudes about working together. We get it, now tell Holder and his clowns to back off.

(Jack Kern is the managing director of Kern Investment Research and can be reached at JKern@KernIRC.com.)

“Editor’s Notebook” with Diana Mosher: Stabilizing Neighborhoods Hit by Foreclosure Crisis

"Editor's Notebook" with Diana Mosher No Responses »

Apr 102009

The effects of widespread single-family home foreclosures on American neighborhoods have received much media attention. We’ve seen light-hearted footage of enterprising teenagers skateboarding in abandoned swimming pools—as well as disturbing images of block after block of empty houses falling into disrepair.

Lately the media has been focusing on new opportunities created as a result of these foreclosed homes.

Americans who were previously unable to afford certain properties are now snatching them up at auction prices. This is good news for neighborhoods on the brink, but others will require more assistance to be revitalized. Multifamily and single-family specialists will need to work together for this to happen.

Last summer Enterprise Community Partners Inc. and its partners worked with Congress to secure $3.92 billion for a Neighborhood Stabilization Program (NSP) in an effort to avert further destabilization. NSP is a recently developed federal program based upon the Community Development Block Grant (CDBG) and designed to provide localities with funds to reduce the harmful effects foreclosed and vacant properties have on neighborhoods.

Localities that received NSP allocations from the U.S. Department of Housing and Urban Development (HUD) were required to submit an action plan describing how they’d use NSP funds to confront the foreclosure crisis and stabilize communities.

In order to compile suggestions and best practices for communities hardest hit by the foreclosure crisis, Enterprise analyzed 87 of the 306 plans submitted, to see what the recipients of these NSP funds planned to do with their allocations.

Besides quantitative analysis, researchers looked for promising and innovative approaches in a number of areas including acquisition and discount strategies, disposition strategies, geographic targeting, green building and rehabilitation strategies, income targeting and long-term affordability, and leveraging NSP funds.

The report “The Challenge of Foreclosed Properties: An Analysis of State and Local Plans to Use the Neighborhood Stabilization Program” can be downloaded from the Enterprise website.

Also, read Erika Schnitzer’s story about NSP on MHN today.

(Diana Mosher is the Editor-in-Chief of Multi-Housing News. She can be
reached at diana.mosher@nielsen.com)