Or does it still mean something?
LEED (Leadership in Energy and Environmental Design Green Building Rating System™) has been the industry benchmarking standard for sustainable development for over a decade. Developed by the U.S. Green Building Council, a private nonprofit corporation often mistaken for a federal agency, the LEED standards were developed a dozen years ago, and are widely respected as a way to demonstrate that a development, building or facility meets certain sustainability objectives. The LEED ratings are often seen in press releases, annual reports, and the entryways to office buildings, residential complexes, and other rated locations. The LEED standards are undergoing review and comment now, and the new standards should be available soon.
However, in California, there is some question about whether LEED is still relevant. In 2010, the California Building Standards Commission issued the CALGreen Building Code, which are now effective for all construction in the state. CALGreen is now fully implemented for new construction and that opens the question, if all construction in California is required to meet the CALGreen standards, what is the role of LEED? Continue reading
MoveLA held their 4th Annual Transportation Conversation last week, and, as usual, it was filled with golden nuggets of knowledge delivered by the wise men and women who work in the fields of transportation, urban development and housing.
One of the themes was the need to link new transit with the businesses, workers and residents of the communities being served by LA’s growing fixed guideway public transportation system. It is recognized that transit location has an effect on property values and development patterns.* (See the post Getting Ahead of the TOD Train in this blog for some examples of how Century has worked with developers in this arena.) There was some discussion on how LA can accelerate its transit construction program and how best to plan for the kinds of development that will optimize the use of the transit and benefit the community, without leading to gentrification.† We will be talking more about some of those ideas in the coming weeks and months. Continue reading
Forward-thinking developers are excellent customers. An article in Monday’s Los Angeles Times highlighted NMS Properties’ purchase of the Denny’s restaurant site at Colorado and Lincoln in Santa Monica, and how the property is near the expected end of the Metro Rail to the beach. The train won’t be running for at least four years (and could be more), but NMS will be well positioned with 250 apartments close to the coming station and in a newly zoned commercial corridor along Lincoln Blvd (per Santa Monica Patch).
from Santa Monica LUCE study
Our second deal with NMS, Century provided a $9 million acquisition loan, giving them the time to get their proposed development through the city’s approval process. While the price of $300 per foot is close to peak prices from five years ago, the value is generated by the allowable density in the corridor, with residential buildings permitted to have at least one extra floor. More apartments means more residents means more vibrancy on the street, the key amenity for a walkable, sustainable neighborhood, especially when transit is added to the mix. Continue reading
Noted bloggers Megan McArdle (The Atlantic) and Felix Salmon (Reuters) recently had a bit of back and forth about payday lenders and credit unions, and as a (former) credit union customer, I was intrigued by the arguments both were making about how credit unions should be making more of the short-term small loans that payday lenders make, but at much less usurious rates. AND that more people should become credit union members. AND that the missing element is education (if only people KNEW how payday lenders and check cashers were treating them, the would ALL flock to banks and credit unions). But who really doesn’t understand that payday lenders charge astronomical interest rates? and that the one benefit of a payday lender over a loan shark is that your thumbs won’t get broken? Is it really an education gap?
Or is it that banks are an unwelcoming place to people who are unfamiliar with them? The 99% Invisible blog and podcast did a show on the design of payday lending and check cashing stores back in March 2011, and it is worth a listen. As a “retail” operation for a broad client base, banks fail on many fronts. What the bank is offering is not always apparent (other than current CD rates, and maybe not even that); there are almost never prices posted for their services; and you need to have some numbers (a PIN, some balances, something) to get any service. A check cashing store is absolutely transparent about what you can get there and what it will cost. Isn’t that worth something to a customer?
Nationally, the apartment market (both in sales transactions as well as new development) is the strongest sector in real estate. Since mid-2010 all four of NMHC’s indices have been positive, showing greater demand for apartments and more availability both debt and equity. (from the National Multi-Housing Council’s Quarterly Survey, via Calculated Risk).
In California, multifamily construction has more than doubled since the trough of 2009, but single family construction has been flat to slightly down over that same period.
Doug Bibby, president, National Multi-Housing Council, noted that not only are multifamily developers eagerly buying land and filling development pipelines, but also many single-family businesses are looking at the multifamily sector, as this product type continues to be weak. (from MHN Online)
The job market is continually improving (if more slowly than most would hope for).
Monday’s Orange County Register posted a story (Doomed redevelopment agencies leave debt of $30 billion) warning that the Successor Agencies to the 25 RDAs in Orange County will inherit $29.8 billion in unpaid long-term debt (their emphasis). First, of course it is unpaid, otherwise it wouldn’t be a debt. The story goes on to summarize recent events and state that there is much confusion in the air over what will happen to the employees and assets (financial and real estate) of dissolving RDA’s after February 1.
But nowhere is the “risk” of existing RDA bonds addressed after the first paragraph. To be clear, there is always a repayment risk when money is being loaned, even to bond investors. But as to the risk of RDA-issued bonds, a key provision of the RDA dissolution law is that debt service for any bonds issued by the RDA will be paid before property tax revenue is distributed to the other agencies (school districts, city general funds, etc.) in the line. Fitch and Moody’s have both commented negatively on the credit quality of California RDA bonds (Fitch here, Moody’s here), as the dissolution process is moving too quickly for anyone to know what will happen on the other side of February 1st.
But it sure is making it fun!
Century is proud to announce that we have closed a $300,000 predevelopment loan to Operation SafeHouse, for the creation of Roy’s Place, a new supportive housing project to be built in Thousand Palms. Construction is expected to start in February and completed before the end of 2012. Roy’s Place will provide homes for runaway, homeless, and emancipated youth, and will connect them with the other services Operation SafeHouse provides to their clients. Continue reading
The California Supreme Court’s ruling in CRA v Matosantos has been widely reported and is beginning to be digested by the more than 400 redevelopment agencies (RDAs) and cities that have to begin unwinding their agencies, accounting for all of the funds on hand, projects in progress, debts owed (mostly bonds), and determine the best course for their city (or county). There are, of course, several emergency legislative efforts underway to delay and/or soften the blow from dissolving every RDA in California, especially with the potentially huge impact on affordable apartment development. But there doesn’t seem to be serious effort to reverse the decision, which is wise – the Senate and Assembly votes to end redevelopment agencies are on record, very difficult to walk those back (from David Smith’s learned Affordable Housing Institute blog).
Well, unfortunately, our prognistication (or at least alertness to the possibility) was correct – the CA Supreme Court split the baby and ruled to kill RDA’s without allowing a quick-and-easy means for their rising from their own ashes (does Phoenix have a redevelopment agency? Phoenix Lake doesn’t.). The reaction by many parties will be to try and reestablish the status quo – is this a good thing? I think that there is an opportunity here for a new and more effective use of affordable housing subsidy funding, as was debated at the May 2011 California Housing Consortium Policy Forum. It seemed very hypothetical at the time, concentrating funding decisions at the state level, but that may be the outcome of this ruling. Much more to come….
Ed Pinto thinks so. Ed Pinto is a scholar at the American Enterprise Institute, a conservative think tank in Washington, DC, who writes on housing issues. In a recent op-ed published by Bloomberg, Mr. Pinto observes that:
Twice in the last 20 years we have seen spectacular failures of U.S. housing finance, each at enormous cost to taxpayers. Both the savings and loan crisis, and the Fannie-Freddie bailouts can be traced to congressional support for, and subsidization of, the 30-year fixed-rate mortgage.
But is it clear that the pattern of 30-year, fixed-rate mortgages is unsustainable? Continue reading