EPA Halts KB The Environmental Protection Agency ordered KB Home to stop construction at its Huntington subdivision in Las Vegas or face a $32,500-per-day fine for not having a Clean Water Act permit from the Army Corps of Engineers. Audrey Liu, an EPA environmental protection specialist, said at press time that the agency and KB Home are negotiating a settlement for the company's grading of a 160-acre construction site. The builder is being “very responsive,” she said.
Liu also said the EPA could levy fines as high as $11.9 million. A settlement could mean the company will have to create, enhance, or restore a wetland.
Soldiers' Homes The Financial Counselors of America launched a fund to help cover down payments and closing costs for active members of the armed forces, Reserves, and National Guard. The Military Housing Assistance Fund (MHAF) will be funded entirely by individual and corporate donations. There's a catch: The home builder must pay $600 administrative fee to cover the fund's overhead, but that enables 100 percent of donations flow to beneficiaries MHAF says it provide assistance military families the year.
TOUSA Buys Gilligan Technical Olympic USA of Hollywood, Fla., has acquired certain assets of Glen Burnie, Md.-based Gilligan Homes. The purchase includes approximately 1,100 home sites in Maryland, southeastern Pennsylvania, and Delaware, where Gilligan Homes has built for 50 years. The acquisition strengthens TOUSA's mid-Atlantic presence and “provides an entry into the emerging Delaware market,” said Antonio Mon, TOUSA's CEO. TOUSA operates in 14 metropolitan markets located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West.
Wise Wording A listing of a "professional home office" in real estate ads subtracts an average of 5 percent from the selling price of houses, according to an NAR study co-written by G. Stacy Sirmans of Florida State University in Tallahassee. That's probably because the shelving or other fixtures of professional offices keeps the space from being used for other purposes. By contrast, the listing of a “den/study” adds approximately 7 percent to the selling price, according to the study.
Seeing Shortages New construction outside Florida and other parts of the country affected by the hurricanes may be impeded by strong materials demand in the wake of hurricanes. Building materials may be diverted to Florida, Alabama, and Louisiana for post-storm rebuilding projects. Some experts believe that the shortages and subsequent slowdown will boost home prices, as happened after Hurricane Andrew. The shortages are being attributed to transportation inefficiencies, as railroads do not have enough tracks and cars to meet demand.
NAR Is Positive The National Association of Realtors is optimistic, expecting new home activity to hit 1.16 million units this year, up 7.1 percent from 2003. The NAR also believes that new home prices will jump 8.9 percent to a median of $212,300. “Price appreciation is projected to be only slightly higher than historic norms next year, as supply levels come closer to market demand,” observes NAR chief economist David Lereah. “We expect the number of home buyers to continue to exceed the number of sellers,” he says.
Tech Trouble Gets Pricey A lack of up-to-date technology may have cost the U.S. building and construction industry $15.8 billion in 2002, according to a new study by The National Institute of Standards and Technology (NIST). The NIST analyzed the cost of business software systems and redundant paper records management throughout a building's life and compared this to what the costs would be with more integrated data exchange software. North Carolina-based RTI International, which conducted the research with the Virginia-based Logistics Management Institute, found that construction projects involve many companies working together but keeping records differently. Companies could save time by converting to a central data source, which would enable them to more easily seek records from one another during a project.
Liability Shield California Governor Arnold Schwarzenegger signed a bill to protect developers who build on contaminated land after a government agency approves a cleanup plan as a condition for building. The law, known as California Land Reuse and Revitalization Act of 2004, was sponsored by two lawmakers in land-scarce Southern California: Assembly-woman Cindy Montanez (D-San Fernando); and Sen. Gil Cedillo (D-Los Angeles). It was created with the hope of attracting builders to develop abandoned brownfield parcels by reducing their legal risks.
Rocky Road South Florida developers, pressed for land, are finding creative ways to free up land for new commercial, industrial, and residential projects, including filling in rock pits once used for road construction. Miami-based developer Antonio Cabrera says it costs about $7 to $10 a square foot to fill rock pits, which is equivalent to industrial land prices. While some builders are willing to pay a premium for prime locations, others believe such projects are cost prohibitive. Developers are reclaiming a total of 18 rock pits in Broward County and six in Miami-Dade County. Residential builders are seeking permission to fill in lakes, ponds, and canals to secure land for new building projects.
Learn more about markets featured in this article: Los Angeles, CA.