2009 April | MHN Blog

‘Editor’s Notebook’ with Diana Mosher: Is Your Laundry Room Working For You?

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Apr 082009

New apartment communities are being constructed with eco-friendly materials and processes, but older properties can also implement a green agenda. Whether your communities have laundry rooms or in-unit appliances, this is an easy place to start and one that’s sure to build resident awareness of environmental concerns. You can also use a green laundry project to generate interest in other eco-initiatives like submetering and recycling that require their participation in order to be successful.

Gauging the energy and water efficiency of equipment used in common laundry areas is increasingly important to apartment owners and managers, whether the machines are leased or owned. “When it comes to community laundry areas in multi-housing, the prevailing trend is improved efficiency. Developers and [apartment] owners, like all of us, are seeking to lower water and utility costs,” notes Dick Casey, director of multi-housing sales at Alliance Laundry Systems (ALS), a commercial laundry equipment specialist that manufactures Speed Queen.

Going beyond using green washer/dryer equipment, Jonathan Rose Companies LLC is incorporating truly forward-thinking methods to further conserve water and/or electricity in laundry rooms. At Metro Green Apartments in Stamford, Conn., the company is diverting rain water for use in its laundry rooms. Rain water is harvested from the roof and stored in 10,000 gallon storage tans and, in addition to laundry, is used for irrigation.

For laundry purposes, the water is filtered and treated with ultraviolet light. At another Rose Development in New York City, smart technology is being used to regulate the air fan that powers dryer vents. Sensors ensure that dryer fans are only activated when dryers are running. This technology also prevents the loss of air-conditioned air from the interior space.

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

“Gimme Shelter” with Daniel Gehman: Design Values: Vitruvius Redux

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Apr 072009

When the ancient Vitruvius attempted to capture the essence of architectural quality many centuries ago, he arrived at a tri-partheit formula: “firmness, commodity and delight.” To very roughly translate that into today’s terms, every building or project should be evaluated on the basis of “Will it last? Will it work? Will it please?”

Naturally, the first two criteria are by far the more objective. Has anyone yet placed a value on the ultimate life span of a wood-frame building (let alone a hybrid, such as today’s “podium” style multifamily dwelling)? Clearly there are specimens of eighteenth century wood frame buildings still standing today. “Firmness,” therefore, even in wood construction, suggests a potential existence in the multiple century range.

“Working” is the next most subjective category of Vitruvius’ trinity. While the last decade has seen a raft of adaptive re-use projects, which capitalize on the “firmness” of some stout building stock that can be re-jiggered to support a new use (say a factory being converted to live/work lofts—we’ve all seen that: where the new use is informed and colored by the historical use, and are all better for it), the definition of “working” is subject to at least the indiscriminate whimsy of fads and trends. As Paul Simon said, after all, “One man’s ceiling is another man’s floor.”

But the Vitruvian quality that really rocks our world is that of delight. Who can possibly define what this means? If ever anything were firmly ensconced in the eye of the beholder, this is it. What makes something “pleasing”? Can it be measured? At a recent seminar I attended, the considered answer to this question ultimately boiled down to, “I can’t tell you what it means, but I know it when I see it.”

Oh sure, there were half-hearted attempts to draw measurable stats from things such as scale, proportion and balance; but when have any of those things ever been objective? It’s like trying to get a room of disparate age groups to agree on a musical style. (For extra credit here, try asking a Beatles’ fan about Paul McCartney’s work with Wings.)

We multifamily architects like to believe we don’t design to trends, but c’mon, we’re not really fooling anybody with that discussion, are we? To really reach the hot button of what turns the customers on, we must listen to them, on any wavelength they care to communicate. “What’s hot in kitchen design? What defines the post-Obama household? Who drives the decision making in an “alternative” household formation?

Sheesh. We are trying to have an “ear to the tracks,” I promise you. But with the triumph of diversification as a value, and an ever-splintering customer base, the deal points for lease signings are growing more and more customized to the individual, and less likely to be accommodated by a “one-size-fits-all” approach. I predict more and more communities will grow to resemble just that—in the traditional sense, a blended community where many distinct individuals will work together to form bonds that are mutually beneficial—all within the same physical domain.

We will keep listening. Every new trend brings a new challenge, and with it, new ideas from those who will stretch enough to consider that which, yesterday, was uncomfortable.

What’s your delight?

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

“Capital Insights” with Jack Kern: NAR Proves Renting is a Better Alternative

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Apr 062009

Probably the best commentary I’ve heard when listening to the housing economists from the National Association of Realtors comes from Forrest Gump, who said:

“Stupid is as stupid does.”
Forrest Gump (c) Robert Zemeckis, Paramount Pictures 1994

And now the proof:

Jed Smith, managing director of quantitative research at NAR was recently quoted as saying, “There is a slight trend showing that people are beginning to realize that houses are a good buy right now.”

Meanwhile, Lawrence Yun NAR’s chief economist is quoted as saying, “Pending home sales have a long way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains…it will take a few months before we could see this turn up in measurable sales contract activity.”

It’s nice to see that voodoo economics has made a comeback at NAR. I guess wishing and hoping has its place beyond the third grade, especially if you’re an industry economist or part of the housing lobby.

How about this one:

“This is the time to buy, if you can, and you have the intention. Even the most pessimistic economists agree that a recovery is likely to happen by the second quarter of 2010 and that prices are going to be higher in five years,” according to Jed Smith.

I guess it’s important that miserable little distractions, like, well facts don’t get in the way of what NAR is trying to accomplish. Take for example the assertion about the recovery happening in 2Q10. With record unemployment, huge underemployment, uncertain fiscal stimulus and falling corporate profits and exports, and massive layoffs, who wouldn’t want to run right now and buy a house? NAR seems to lack the initiative to propose a balanced policy and keeps spewing this foolish line of non-reasoning.

A first year finance student, or a fifth grader can easily see through the flaws in NAR logic. (I’m not trying to insult 5th graders. Have you seen them on Are You Smarter Than A 5th Grader?)

Rental is doing fine now because it works. The collective wisdom of anyone who follows housing markets, and certainly the average Joe and Jane all recognize an irrefutable truth: that as long as homes are losing value, why buy one? That is the substance of the argument, and you’ll hear plenty of industry luminaries telling anyone that will listen that waiting for a new cycle is the best solution. There is no pent up demand, and with the inability of most to come up with a 20% down payment and a 720 credit score, there are going to be lots of house languishing on the market for a long time to come.

Prices up in 5 years? Only if inflation grows being the Federal Reserve soft targets. Recovery by second quarter, 2010? It depends on how you measure recovery.

And that will make all of the difference.

(Jack Kern is the managing director of Kern Investment Research and a frequent critic of unbalanced housing policy. Opposing viewpoints are welcome as long as they don’t disagree with the contents of this column. He can be reached at JKern@KernIRC.com and 301.601.1900.)

“Capital Insights” with Jack Kern: NMHC Pragmatists Try to Call the Bottom

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Apr 032009

“Whoever knows he is deep, strives for clarity; whoever would like to appear deep to the crowd, strives for obscurity. For the crowd considers anything deep if only it cannot see to the bottom: the crowd is so timid and afraid of going into the water.”
Friedrich Nietzsche (1844-1900)

At the NMHC Research meeting, just concluded in Chicago, the sidebar conversations were as interesting as the content. While the meeting was billed as the researcher's response to the year of the operator (in China, it's between the year of the Rat and the year of the Water Buffalo), the perceptions of the participants was interesting. As professional research people, I think the attendees almost all uniformly want to be able to figure out how the moving parts of the economy work. To that end, it was curious to see the divergent opinions. With varying backgrounds and differing perspectives there is a sense that somehow this process is orderly and definable. I suspect we're caught within the context of the quarterly syndrome, where it's going to be better at some mythical point in time, next quarter, second half of next year and so on.

I think the really prescient people I spoke with got it right.

What, exactly are we trying to forecast? As it was suggested so correctly, there isn't just one date or scenario, because in reality, different functions of the economy will run on their own cycles. For example, there will be a bottom in housing permits, there will be a bottom in home sales, there will be a bottom in new starts, and so it is true for other important indices and measures. The fact remains, none of these bottoms will occur at the same time.

Where we are in a recession and in a real estate cycle will not be trended and measured by our own lack imagination and qualification based on quarterly dates, but on a largely tiered structural change in the economy, beginning with modest changes in consumer attitude and business conditions and then followed by other largely ignored but important indicators, like shipping indices, semiconductor manufacturing and automobile sales.

There I said it, car sales. Believe it or not, automobile manufacturing is a core competency in this country and a critical technology as well. Can you imagine not having military humvees, but instead an armor plated Honda Civic with a gun turret on the front? There is a correlation between car sales, home sales and rental trends, and without them working together in a statistical ballet of amber waves of grain, you get amber graves of pain. That's where we are now.

The economy and the recession are moving in lockstep fashion, with minimalist turns to the right and left and deference to the failed policies from both sides of the aisle on the hill. The stimulus is working on some level and the global economy is seeking its own inexorable level.

But can we see the bottom?

The doctoral level cocktail chatter emanating from the far corners of the quiet side of the equation seem to think so, and we're hearing towards it now. If these birders from the deep end of the gene pool can count on their observations, we're presuming a year or so from now is when the worst will be pushed, to paraphrase F. Scot Fitzgerald, ceaselessly into the past.

Perhaps then, the timidity that Nietzsche is talking about will end, allowing the greater economy to move forward.

(Jack Kern is the Managing Director of Kern Investment Research and can be reached at JKern@KernIRC,com or 301-601-1900.)

“Capital Insights” with Jack Kern: “It Smells Like Teen Spirit”

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Apr 012009

I’m at the NMHC Research meeting staying at the Chicago Renaissance Hotel. OK, first things first, they shouldn’t name a hotel Renaissance anything because it’s too hard to spell. What happened to calling a hotel a hotel? Isn’t the name Marriott too long anyway?

Then, after a hard day of running around, visiting friends and walking around sunny and freezing Chicago (..hey I have an idea, next time why not Antarctica? I hear they have great room rates and it’s warmer than Chicago?), I went back to my hotel to get some work done. I’m on the 17th floor above the loop and every 90 seconds a train zips by, brakes squealing and slamming to a halt.

I love this city.

When I went to take a shower, I noticed they didn’t have any soap. At least not what I think of as soap. I’m not interested in washing with something that leaves me smelling like a fruit salad. The avocado this and the lime that is probably designed to impress someone who is obviously a fan of produce, because everything has this scented bias to it. I want to remind you that the last time I was offered a shampoo called, “It Smells Like Teen Spirit,” I told them it better be made out of teenagers or I’m not using it.

I’m looking forward to seeing my colleagues tomorrow. I want to find out, honestly, how many of them needed to call the front desk to find out how to turn on the shower. It turns out, you have to pull the handle away from the wall. Now I’m not sure if I’m going to take the handle home with me, now that I ripped it out of the wall, but for now, the water is running just the way I like it.

I can’t wait to see what happens tomorrow.

(Jack Kern is the managing director of Kern Investment Research. He can be reached at 301.601.900 or jkern@kernIRC.com.)