When traveling for business, it seems there’s often one little detail that gets overlooked. Today I had to be in Phoenix to visit a property with a client, as sort of a fact-finding mission. (“Shade” at Desert Ridge, a former Gold Nugget “Rental Apartment Community of the Year.”) It’s only a short flight over to Arizona, but the community is about a half hour drive from the airport. (Sprawl—go figure.) A rental car was necessary.

Since business has been slow for a while, I haven’t traveled a ton, especially to destinations where a rental car is required, so I guess I’ve lost my edge. I neglected to select my style of vehicle in advance. When I do, I typically select the most economical ride I can manage, including a hybrid vehicle when it’s available, which it often is. Well, on this occasion my reservations were made by others, and this is the element that slipped through the cracks.

“Ewww” was my response when the rental agent handed me the keys to a Grand Marquis. Number one, this is the exact car my dad used to drive, so that was kind of creepy; number two—it felt like the kind of government-issued land yacht that might be piloted by a character on Law & Order, with a gaping maw of a back seat ready to have a perp stuffed into it. Its trunk probably would have swallowed up a smart car. Hard to hide in one of these babies, if you know what I mean.

Well, the crew with whom I was visiting the site certainly noticed, jumped on me like it was some sort of fraternity hazing—mocking me, the erstwhile tree hugger, for transporting myself in the Mercury Valdez. (At least we had two people in it.)

But it wasn’t negative, not in the end. The only reason I got teased for driving a huge car was that I have been known for some time as the designer who walks the walk. It’s been my responsibility to be the Lorax on the projects I’ve been leading, consistently bringing the sustainable ideas to the table to try them on for size. I decided a long time ago that it would help my credibility if I were personally practicing the ideas I was pitching to my clients. They all know about my Prius, and the solar PV on my house, and, for goodness’ sake, that I schlep home the coffee grounds (and filters) from the office to be composted in my organic back yard—it just comes up in conversations. If it wasn’t for all of that, my monstrous rental would have just been chalked up to another day of doing business.

But it wasn’t. It was called out for being inconsistent with my other convictions. And that made me proud.

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

Jobs, jobs, jobs. Speaking to executives in the commercial real estate financing industry, I hear that the most important economic indicator for them is, without doubt, job growth. Job growth has to increase before the commercial real estate fundamentals can improve.

If Tea Party candidates sweep the upcoming elections in November, will that bring about better job growth prospects for the economy? There are two courses of action one would think a Tea Party politician would want to implement immediately and radically: (1.) cutting taxes and (2.) cutting spending.

Will cutting taxes and cutting government spending at a deep level bring about better job creation?

As it stands, those with capital are already sitting on a lot of cash and there has not been any extraordinary job creation. Also, if cutting spending would bring about job creation, the federal stimulus could not be a good thing. Yet economists would likely bemoan the “last extension of unemployment benefits” and “last round of federal aid to the states” that have already occurred this year.

The more stringent rules HUD announced this summer for the FHA multifamily mortgage insurance program were no surprise. By the time the Mortgage Letter 2010-21 came out on July 6, the multifamily development and financing community already pretty much knew what the main points were going to be.  

Among the biggest, and most contested, changes are the decrease in the required the Loan-to-Cost (LTC) from 90 percent to 83.3 percent, for the FHA 221(d)(4) program for market-rate new construction. The Debt Service Coverage ratio (DSC) has also been increased, to 1.20 percent from 1.11 percent.

The new requirements make it incumbent on developers to raise more equity‑as much as an additional 10 percent more in cash, according to calculations by Johnson Capital.

Developers are not pleased with the increased requirements. HUD has said it will revisit the guidelines around January 2012 to see if market conditions still warrant the new rules. Will change come before then, however? Word is that although the rules have been passed, the National Association of Home Builders continues its discussions with HUD…

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