Low mortgage interest rates continue to draw people away from the rental market and push them toward homeownership in the multifamily sector. Higher absorption rates in 25 of the 54 markets have lessened the severity of the decline in rental housing.
Completions of new rental apartments in the third quarter of 2002 was 10 percent below the 20-year quarterly average, an industry warning sign. Completions continue to outpace absorption, leaving vacancy rates rising.
Based on rent growth, the following areas were among the hottest multifamily markets in the third quarter of 2002, bucking the trend:
- Honolulu: Up 13.6 percent
- Norfolk: Up 6.5 percent
- Sacramento: Up 4.3 percent
- Baltimore: Up 3.7 percent
- Long Island: Up 3.4 percent
KB Home has found the partner it's been looking for in Los Angeles County. KB has sold City Ranch, a 1,985-acre development, to Anaverde LLC in an all-cash transaction. Anaverde LLC has been launched to develop City Ranch -- now named Anaverde -- into one of the largest mixed-use, master planned communities in the county.
The land, acquired by KB in the late 1980s, will be used for approximately 5,000 dwelling units. Holding the controlling interest in the land, Empire Land (part of Ontario, Calif.-based Empire Companies) will begin the construction of 14,000 single-family homes in the second quarter of 2003. KB has agreed to build homes on 400 lots in the first phase of development; prices will start at $250,000. Though the names have not yet been released, other home builders will be involved in Anaverde.
Industry Movers and Shakers
The Ryland Group has announced the promotion of two executives. Gordon Milne has been promoted to executive vice president and CFO. Milne previously served as senior vice president and CFO. Cathey Lowe has been promoted to senior vice president of finance. Previously, Lowe was vice president and treasurer for Ryland.
K. Hovnanian has appointed Jim Driscoll as area president for the Metro New York area. Driscoll joined the company in 1999 as a community builder. He will report to Joe Riggs, the region president of the company's Northeast Region.
Standard Pacific Corp. has tapped Kathleen Wade as president of the company's newly formed Southwest Region (includes Arizona, Colorado, and Texas operations). Prior to her promotion, Wade held the position of CEO of Standard Pacific of Arizona. She came to the company from UDC, where she served as president.
The Gulick Group has hired Philip E. Meany Jr. to be the company's new executive vice president and COO. Meany has been involved in the real estate industry for more than 26 years. Meany will be responsible for seeking out additional market segments in which the company can expand.
Personnel changes? E-mail Jill ralph at: email@example.com
Recognized for its development practices, Wellington Neighborhood, in the town of Breckenridge, Colo., has received the EPA's 2002 National Award for Smart Growth Achievement in the "Built Projects" category. Wellington's achievements are three-fold. It has increased the region's supply of affordable housing and created a walkable neighborhood with access to open space. And possibly most impressive is that the community was built on a site otherwise deemed contaminated.
David O'Neil, manager of Poplarhouse LLC, a developer based in Breckenridge, said that scarce. O'Neil points out that Wellington's proximity is crucial to its success. "We've taken what was basically a 'field of rocks', and we've made it a successful community that is proximal to urban services."
A small company in Hockley, Texas, may have a big idea: environmentally friendly and aesthetically pleasing land clearing. Using a mulcher, Enviro-Clear cuts and chips standing or downed trees, with all cut material being chipped into mulch as it is cleared. The benefits, says partner Toni Carlton, are many. "We're having builders tell us it's cheaper; there's no cost of clearing, burning, and haul-out." Builders and developers can also work together to pick and choose what trees to mulch and what trees to leave standing.
Builders have the advantage of being able to offer buyers homes with existing trees, "and we can even leave walking and hiking trails in the communities," says Carlton. "You hear of people losing trees because the 'dozers came in and cleared the entire property. Nobody wants that."
Education's the Key
Eight- and 12-hour educational workshops for home buyers are only part of what a new homeownership program in California does. Together, the East Los Angeles Community Corporation (ELACC) and the City of Los Angeles are helping turn low-income families into homeowners through the Affordable Housing Program (AHP), sponsored by the Bank of America. The partnership helps place low-income families in HUD homes, which have been purchased by the Enterprise Foundation and then renovated with the help of contributing partners.
Through AHP, low-income families can receive up to $20,000 (forgivable after 5 years) in assistance to buy a home. An additional sum of money (not to exceed $60,000) is available through the City of Los Angeles as a silent soft second loan. Families make no payments for the first 30 years of the loan, in which time the loan has accrued no interest.
Ana Rosales, financial literacy educator and counselor for ELACC, says the program is more than just education. "It's also a rehabilitation effort," she says. "The feeling is that if you own something, you'll take better care of it. We hope the new homeowners will really take ownership of their properties, and in turn, create pride in their community."
Published in BIG BUILDER Magazine, February 2003