Wonderful change is afoot in one of LA’s most notorious neighborhoods. Jordan Downs, located in the heart of the community of Watts, in South Los Angeles, is targeted for redevelopment. The design team, led by the capable staff at the Housing Authority of the City of Los Angeles (HACLA) is in the midst of the community outreach for the project. Jordan Downs may be noted as one of the last public housing projects to be developed in the city of the angels back in the 1950s. Regrettably, it is probably better known for being in the middle of the neighborhood that gave birth to LA gangs knows as the “Bloods” and the “Crips.”

Last Saturday I attended the fourth stakeholder outreach meeting, my second in the series, which was held, as always, in the community center located at Grape Street and Century Avenue. At the former meeting, there was a modest security presence, with uniformed officers generally keeping watch over folks arriving on Grape Street by car. This time, however, the detail was beefed up a bit, complete with orange traffic cones demarcating a drop off zone by the front door. I had heard there would be “special guests,” so I supposed this was for them.

As it turned out, the dignitaries on had for this event were Antonia Villaraigosa, the mayor of Los Angeles, and Maxine Waters, the congresswoman for the district in which the community is located. For having such star power on hand, I expected a massive turn-out, with standing room only for us “observer” types. But this was not the case. Attendance was marked (as the LA Times pointed out) by a handful of residents, and a bevy of consultants, handlers, and onlookers.

The mayor, dressed down in jeans to look approachable (as he himself quipped) offered a mellow, uplifting encouragement, along with a pledge of the City’s devotion to the project. Ms. Waters, who, admirably, was recognized by a handful of residents as well as most of the JD Advisory Committee and vice-versa, was a bit more animated. She made a very interesting point: without weighing in on what direction the re- development should take, she emphasized that the burden on the designers and HACLA was to engage the community in every step of the process, “from planning to picking paint palettes.”

This noble commitment is riddled with challenge. There are many, many layers to the “community” of Jordan Downs. As mentioned above, there were only a handful of residents present. (The community consists of 700 apartments, suggesting a total population of at least 1500 persons; there were perhaps 40 at the peak of the activities.) It was mentioned that some residents don’t attend out of fear of retribution. From whom wasn’t quite clear. What was clear was the wild proliferation of half-truth, rumor, innuendo and ignorance. It was disheartening, but comprehensible.

What this milieu set up was a context in which the design team, which included Dan Solomon and John Kaliski, spent the majority of their presentation time de-bunking bad information that had to be cleared up before anything resembling a design discussion could occur. Then, in what was an eye-opening experience for me, it became necessary to always search for the “question behind the question,” to have a decent shot at answering what was being asked, because it was extraordinarily easy for misunderstandings to occur due to the lack of even a basic design vocabulary. Dan and John, to their credit, avoided pontificating in “architect-ese”, which would have been especially dreadful in this instance, where two groups of people where already reaching WAY beyond their comfort zones to communicate with the other parties.

In brief, the proposed project envisioned a “Hope VI” type of arrangement, that would replace the 700 public housing units on a one-to-one basis, then add 700 units of “work-force” housing, plus 700 units of market rate housing. This 1/3, 1/3, 1/3 approach has been very successful in other parts of the country. Good thing HACLA was able to purchase an adjacent 21-acre parcel, which would enable them to start a first phase with enough replacement units to allow a “rolling” redevelopment of the site without any residents actually needing to leave the community. Even with that land included, the average density of the new neighborhood would more than double that of what it is today. This, naturally, was of grave concern, for a collection of reasons, to almost all residents who spoke,.

This project, as they say in developer lingo, “has a lot of hair on it.” Props to HACLA and the development team for diving into it, believing in the vision, and having the love and patience to continue to work with the community to seek out not just consensus, but even a common language basis from which to begin a dialogue! This is where design really hits the streets.

The spokesperson from my break-out table, who presented to the overall assembly the ideas developed there, spoke with passion of how the residents’ hopes had been raised before, only to be dashed when re-development plans were scrapped. Some were dumped, incidentally, due to overwhelming negative feedback from residents that created insurmountable political hurdles. Let’s believe (stronger than hoping) that this time the process will be successful, that the proper leaders will emerge to shepherd a dramatic transformation of a “project”, and by extension, it’s neighborhood and community.

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

With space at a premium, imagine a kitchen without boundaries or barriers, an environment free from conventional thought and restrictions, a kitchen created to successfully achieving the delicate balance between form and function reflect the needs and lifestyle of the modern homeowner. 

The new “kitchen matrix” allows for maximum usage of space with the focus on utilization and optimization of the interiors and exposed work areas, allowing the homeowner, apartment dweller or loft inhabitant to maximize the usage of the space at hand. Like the Roman God Janus, who could see the past and future at the same time, the modern kitchen is centered on the duality of purpose and space.

The new approach to kitchen design is to challenge the way we look at space, so we may better understand the problem. As designers, we must move away from a one-dimensional approach to kitchen design and began to think of the kitchen as a multi-dimensional canvas. The static, cluttered, restricted and unchanging kitchen of the past must now evolve into a living stage, a place where it is possible to create an environment that alters old beliefs about space and structure and infuse new concepts that reflect the needs of today’s modern homeowner.

Today’s kitchen has grown far from its primary function of food preparation to that of “the social center of the home”. In the modern kitchen, the family, both nuclear as well as tribal, still gathers to share, rejuvenate and commune together, but the walls have come down and this once hidden and secluded place is now part of a larger social arena. It serves as a meeting place, a dinning room, a home-office, a place to do homework; it can even serve as a hide away for quite reflection, as well as a place to gather for family fun and social entertaining.

The modern kitchen, in its new domestic role, finds itself reflecting a family lifestyle based on the sharing of traditional roles and functions. The living area embraces the kitchen as a multifunctional arena, were food is prepared, people talk, homework is finished and where family and friends sit by a modern hearth to bath in the warmth of community.

Today’s kitchen is open to the rest of the home, and as such, the kitchen now must function on several levels, from food preparation to social interaction, from entertainment center to living-room. More furniture, than cupboards, the modern kitchen must blend seamlessly into the living areas of the home,

(Kevin Henry is the Executive VP of Bazzeo LLC as well as a writer, speaker and environmental activist. He can be reached at kevin@bazzeo.com or you can read his blog at www.theessentialkitchen.blogspot.com)

 Last week, I had the opportunity to meet with some of the industry’s most green-oriented executives, whom MHN had invited to judge our Second Annual Green Initiative Awards.

Needless to say, it was quite an experience to get together with a group of four individuals who are so completely devoted to sustainability that, in at least one instance, they have actually spearheaded the movement. (And let me add that I learned quite a bit when some heated debates broke out.)

In reviewing the submissions, the panel of judges—which included Anthony Morena, principal of The REDD (Real Estate Design & Development) Group; Dana Bourland, vice president of green initiatives for Enterprise Community Partners; Andy Padian, vice president of energy initiatives for the Community Preservation Corporation (CPC); and Robert Roth, Esq., president and founder of Green Envy Development—raised a number of rather interesting points.

Though I’ve heard it before in numerous interviews regarding a variety of topics, the panel noted the importance of water conservation, as “water becomes the new oil,” that is, that water is sure to become the resource over which wars are fought.

Since this is not the first time I’ve heard this statement made, it really got me thinking—how much water does each of us waste in our daily lives? What are some seemingly basic steps that each of us can, and should, take to ensure water does not become such a hot-button issue? In addition to the seemingly ubiquitous low-flow fixtures, what should building owners and operators do to make their buildings—and residents—consume less water? With all the new advances in technology, it would appear that the answer is an obvious one—but is it?

Share your thoughts. Email me at Erika.Schnitzer@nielsen.com

Last month, I attended a press briefing given by Prudential Real Estate
Investors (PREI), which invests in real estate on behalf of
institutional clients.

Here is what PREI CEO Allen Smith said. The company has sold more than
$1 billion in commercial real estate this year, and Smith said that a
lack of liquidity has not been a problem with its buyers.

Buyers in these transactions were able to do get financing, if they
were willing to pay a price for it. We are talking about commercial
real estate in general, and not only about multifamily.

One encouraging sign in the market, says Smith, is that some buyers
have been willing to pay all-cash in some instances, and this has been
the case even on the large deals. But he notes that although the
bid-ask spread is narrowing, the volume of investment sales
transactions is still coming off of a small base.

Where financing is concerned, Smith noted that for now, those involved
want to avoid the problem of maturing loans that may not be able to
refinance for one reason or other. Borrowers and lenders are “engaged
in a delicate dance” in which neither wants to “rock the boat” unless
there is payment default, Smith says.

The strategy is to try to “kick the can down the road” to a point where market conditions are more favorable than today.

Cap rates today are in the low-6 to low-7 percent range for apartment
properties, compared to 8.5 to 10 percent range for commercial
properties, reports Smith. Most investors are looking at IRRs of 9.5 to
11 percent.

As for fundamentals, Smith notes that they are deteriorating across the
board. As long as unemployment increases, commercial real estate will
not recover, says Smith, and unemployment is not set to decline until
the middle of next year (2010).

Smith sees opportunities in three areas: debt related instruments,
public securities and distressed property investing. But he says the
distressed property market is “slow to reveal itself,” and it will take
some time before opportunities will be available “in scale.”

(Keat Foong is executive editor of Multi-Housing News. She can reached by email at Keat.Foong@nielsen.com)

Some time ago I wrote about a new senior housing community that was being proposed in my neighborhood. Since this is a product type that my company also designs, I was quite interested in who was proposing just what, so I followed the process. I can’t recall exactly how it happened, but I ended up on the mailing list of the association that represents my neighborhood, and is called upon to review proposed projects for design consistency.

(As a curious aside, when I first moved here about fifteen years ago, I attended a couple of meetings in an attempt to gain familiarity and perhaps even make some connections. At that time the majority of projects being reviewed were cell phone tower installations, and this committee was tough, tough, tough! I believe it was partly due to the great hurdles they put in front of the companies proposing these installations that the coverage at my house is abominable. Seriously, there’s one place I can stand in my driveway to take calls on my work phone. But I digress.)

It quickly became clear to me that the association was, shall we say, vehemently opposed to the project. I took the bait and looked up the drawings myself, and, frankly, saw what I believed to be a sensitively designed community that proposed a modest 150-some units on just over seven acres, which is quite a bit less dense even than the three-story walk-up communities we’ve been doing forever—around 20 DU/AC. I wondered how they made it pencil at such a low number then learned the land had been donated to a religious organization so they could develop retirement homes for their maturing clergy, which I thought was a marvelous gesture.

Because of my inclusion on the mailing list, I got to witness the battle over the proposal, which, due mostly I think to its proposed zone change, engendered so much ire you would have thought it was the President’s new health care proposal. This to me would all have been fine and well, except when the discussion started to distort the facts. The project was called “extremely dense”, “commercial”, “enormous”, and worse. I didn’t think it was any of those things, so, because the connections were provided to me, I contacted the county planner, and even my county Supervisor (who had already been drawn into the fray) to express my support for the project and go on record as such. Finally, I contacted the developer to deliver the same message.

I heard nothing for several months, then received a Notice of Preparation for the required Environmental Impact Report. This involves a public meeting (not a hearing—it is just intended to collect resident concerns about what should be included in the study.) I figured that to be consistent to my position I should show up and see what might unfold.

Well, the meeting was last Tuesday. I got tied up in a client meeting and arrived 45 minutes late, so I missed the presentation by the developer. The room was filled to literally overflowing, with a few brave souls standing outside with their heads stuck through the door, hoping to catch the gist of things. A speaker, who I learned to be an attorney, was pontificating against the development. “Hmmm,” I thought, “I guess I better follow through fully and register to speak.” When I handed in my speaker card, there was a pile nearly an inch thick. How merciful that each speaker was limited to three minutes.

OK, before I get to the punch line here, I must say that in fairness, I heard several issues that evening that had not occurred to me, which I believed were reasonable, and which should be considered in the EIR. This is the essence of a scoping meeting—to uncover the salient issues for analysis, and I look forward to seeing what answers are conveyed in the draft.

I’m not sure how many of the other 150 plus citizens understood that process. Speaker after speaker railed against the project, some reasonably, and some more viscerally. Often the remarks were prefaced with “I’ve lived in this neighborhood for 40 years,” or something along that line. I felt inferior for only having resided here for fourteen. I believe I listened to 20 or more residents before my turn came.

Now, I speak in public all the time, so I’m a pretty good manager of my own nerves. However, I’m usually speaking in the role of the developer’s consultant, and I precede the outpouring of public opinion. I took a breath, and attempted to present my thoughts, about design, precedent and process. I congratulated my neighbors for their willingness to engage in public discourse, observing that the NOP process was precisely for that purpose. I opined that this single zone change would not necessarily topple the first domino in an unstoppable juggernaut, and that this process was accomplishing exactly what it was supposed to do. Perhaps if had more sense, I would not have added that I believe it is important to separate the dry, rational facts of the case from the loaded, visceral reactions.

I concluded in just under the allotted three minutes. A millisecond after uttering my “thank you,” and somewhat to my surprise, the crowd erupted in booing. Seriously. One attendee even shouted out, “How much are they paying you?” I returned to my seat (on the floor) a little shaken, but incredibly energized. “In for a penny, in for a pound,” I thought. Though I was briefly tempted to leave, I realized I had to stay till the end to see what else might happen.

As I was leaving, I did receive one greeting from another (against) speaker, an attorney. He warmly smiled and shook my hand and thanked me for participating in the process. That was good to hear. What a great place we inhabit. What a fascinating experience for me to be on the other side of the podium for a change. How proud I am of my neighbors, even if I don’t agree with them, for taking their time to come out and exercise their rights. How fortunate I am I wasn’t beaten to a pulp in the parking lot by a gang of restive septuagenarians!

As John Mellencamp might say, “Ain’t that America? Home of the Free. Little pink houses for you and me.” Just no “monstrosities” (another speaker’s term) for our aging parents, and yours, too.

I’ll keep you posted.

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

Last month, I attended a press briefing given by Prudential Real Estate Investors (PREI), which invests in real estate on behalf of institutional clients.
 
Here is what PREI CEO Allen Smith said. The company has sold more than $1 billion in commercial real estate this year, and Smith said that a lack of liquidity has not been a problem with its buyers.

Buyers in these transactions were able to do get financing, if they were willing to pay a price for it. We are talking about commercial real estate in general, and not only about multifamily.

One encouraging sign in the market, says Smith, is that some buyers have been willing to pay all-cash in some instances, and this has been the case even on the large deals. But he notes that although the bid-ask spread is narrowing, the volume of investment sales transactions is still coming off of a small base.

Where financing is concerned, Smith noted that for now, those involved want to avoid the problem of maturing loans that may not be able to refinance for one reason or other. Borrowers and lenders are “engaged in a delicate dance” in which neither wants to “rock the boat” unless there is payment default, Smith says.

The strategy is to try to “kick the can down the road” to a point where market conditions are more favorable than today.

Cap rates today are in the low-6 to low-7 percent range for apartment properties, compared to 8.5 to 10 percent range for commercial properties, reports Smith. Most investors are looking at IRRs of 9.5 to 11 percent.

As for fundamentals, Smith notes that they are deteriorating across the board. As long as unemployment increases, commercial real estate will not recover, says Smith, and unemployment is not set to decline until the middle of next year (2010).

Smith sees opportunities in three areas: debt related instruments, public securities and distressed property investing. But he says the distressed property market is “slow to reveal itself,” and it will take some time before opportunities will be available “in scale.”

(Keat Foong is the executive editor of Multi-Housing News. You can reach her by email at Keat.Foong@nilsen.com or by phone at 646-654-4490)

“Should 5% appear too small, be thankful I don’t take it all.”
Taxman (c) The Beatles, 1965

Property values are declining in virtually all sectors of commercial real estate and with local governments seeking relief any way they can get it, assessments are rising. In New York, starting in January the Department of Finance released their tentative assessment listings planned for 2010. Not surprisingly the assessed value was up for all major groups. Most notably, apartment buildings rose 7.8% and commercial buildings went up 9.9%. Single family residences didn’t escape the increases either, rising by 4.41%. All of this designed to help close budget gaps plaguing the state. This is all part of a 5 year plan and so future increases are almost guaranteed.

There was a time our industry has peace of sorts, and apartments, especially pre-1980s were seen as workforce housing. In the days before REITs and the commoditization of units, apartment rents rose slowly, and incorporated communities recognized the need for all kinds of housing. Sadly, the reckless excesses of municipal spending, irresponsible politics and a clearly distracted affordable housing policy have collided in a most unfortunate way.

With the prospects of a continuing loss of pricing power in most markets, underwriting just got a lot trickier. It would be unusual, in today’s environment for property taxes not to rise, and ultimately the yields are going to suffer. At some point, when the markets turn, the cities that choose this short sighted tact will find their citizens paying higher rates and dealing with less competition. Tax increases apparently don’t discriminate, regardless of need.

(Jack Kern is the managing director of Kern Investment Research, LLC, a
market research firm. He can be reached at
301.601.1900 or JKern@KernIRC.com.)

Consider for a moment the above inquiry. It is merely a simple (if not terribly creative) tactical question, designed to engage a prospect in conversation. Think about it for a minute—even if you don’t use the phrase yourself, have you ever seen it fail to evoke the desired response? Me neither.

There’s a similar phrase that’s been circulating through the design and building industry for the last few months; it may sound somewhat different, but, in reality, it’s pretty close to prodding about the weather. The question is “Are you staying busy?” What a layered and peculiar question that is! Is there anyone who would actually answer, “Well, no, not really; things are so bad I’ve pretty much decided to just take the rest of the summer off.” I’ve heard a lot of people think that thought out loud, but no one ever says that as the answer to the staying busy question.

In truth, I have a few close acquaintances who were let go from their positions earlier this year, some with generous severance packages. Some of these folks were actually able to pause for a bit, take a breath, and evaluate their direction and intentions. Bully for them! What I believe they will do, when they re-engage in the industry, is come back more than fully re-charged and really chomping to get things done. I’m looking forward to it.

By comparison to the rest of the economy, our industry has done some things in a pretty similar manner. By that I mean that every firm I know has reduced staff and other (ahem) related expenses to keep the doors open during these lean times. However, I must say I don’t really know of any shop that has closed down completely. Boil all this down and what you get is the realization that, as with so many other American industries, we in the design and construction trades have been doing more with less. Sometimes a lot less.

Looking back over the last quarter, my memory suggests that perhaps May or June was the darkest of the dark—the time when, due to the lack of new business coming through the door, there seemed to be more opportunity to start or refine in-house research and development projects, build the network, and maybe catch up on required learning units and, of course, mix with others in the industry. While we all did this, we continued to trim expenses, as noted above, so that many of us are operating with very high octane teams, ready to spank a quarter mile like a Daytona dragster.

 “Out there” in the industry, there’s plenty of simmering going on. Folks have moved on from one organization and grouped with other “move-on-er’s” from former competitors to form new entities that are absolutely stamping and snorting to get back into the race. Developers, after all, as I’ve heard noted, need to be doing a deal in order to feel vital, and to survive.

All around us, the rules of the game are in flux. Many have asked if the recession will stall the efforts to produce more “resource sensitive/high performance building” type projects. Not on your life! At least here on the left coast, the concept of enhanced environmental management through design is gaining steam, not losing it.

In short, for those of us blessed to still be at what we were doing when the bottom fell out, this is no time to rest. It’s pretty much the opposite, really: we’re trying to do what we used to do with fewer resources, in less time, for less money. We’re honing the world’s finest tactical teams to leap on and devour the next opportunity.

Brothers (and sisters), brace yourselves. This is going to be an autumn like you haven’t seen in a while. May the force be with you.

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

Sometimes news events remind me of the ancient plagues. Just when you thought things couldn’t get any worse, frogs rain down from the heavens or a comedian gets elected from Minnesota. In a way, that kind of makes sense because after electing a professional wrestler governor, a comedian was the next step. I do wonder if they ever called Jess Ventura the First Wrestler, instead of governor. (Expect to see a clown from Minnesota in the House of Representatives in 2012. There are quite a few there already.)
 
Florida is one of those states in transition, with elderly residents vying for city services against a tsunami of immigration. Somewhere in the mix, something dumb is happening.

Recently, as if unemployment, immigration problems and a hurricane prone coast weren’t entertaining enough, the Florida Hometown Democracy Act was certified for the November 2010 election. This initiative, if passed by the voters would require local referendums on all comprehensive plan amendments that have been approved by their respective local governments. This means a property developer would have to obtain not just local and sometimes state government approval, but also the local citizens approval. The expense alone of mounting a public relations campaign to convince the electorate to support your project will cast a daunting pall against a lot of new projects.

Since this act has a very good chance of passing, it might just mean the inadvertent decline in unchecked Florida development and reward the citizens of Florida with less competition, higher rents and vastly more constrained surburban markets. This sort of citizen activism has done little across the country to foster the kinds of development and improvements that build strong communities. This may well mean that Florida will now see vastly less employment and ultimately watch its housing stock age in place, something that won’t benefit anyone.

There needs to be a pretty dramatic response by the development community in advance of the November 2010 vote or we can cross Florida off the list as a state worthy of development capital. Let me know if you’d like to get involved. For me, I’m going to the Bahamas next time I want sun and surf, or maybe Las Vegas and Caeser’s Palace, which is a lot like Miami Beach, except for the plethora of wrinkles.

(Jack Kern is the managing director of Kern Investment Research, LLC, a
market research firm. He can be reached at
301.601.1900 or JKern@KernIRC.com.)

Delaware Apartment Association Expands Scope of Services

Since the economic crisis began, the apartment industry has looked for a variety of ways to help renters stay in their apartments. But sometimes, despite these efforts, residents do lose their homes. The Delaware Apartment Association wants to help.

As Kevin Wolfgang, President of the Delaware Apartment Association, points out, multifamily professionals are on the front lines of this hardship and they witness the devastating impact on families.

“Renters want to know where they can turn for information and help. Through our own experiences as apartment operators and our involvement in task forces,” says Wolfgang, “we found it incredible that there is no single agency, source or web site where renters in Delaware can go to get all the information, resources and support they need to successfully manage their rental experience.”

With these needs in mind, The Delaware Apartment Association now offers an online Renter Resource Center to help all renters manage the renting process from beginning to end.

The Renter Resource Center provides information ranging from financial assistance to online rental guides, community services to renter’s insurance, tenant’s right guides to employment assistant—and more.

“While the website was created for renters, we are very excited by all the positive feedback we have gotten from the nonprofit agencies, charities, branches of government, and state agencies that have chosen to become our partners,” comments Wolfgang. “If an organization who provides a service to renters wishes to be part of this website, we encourage them to contact us.”

For more details, contact Michelle Carre at DelawareApartmentAssociation@gmail.com.

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