In Land of Giants, Smallest Houses Larger Than Ever In the Washington, D.C. market, the 1,400-square-foot, three-bedroom townhouse once thought of as the “starter home” has all but vanished, or at least expanded beyond recognition. In Fairfax County, Va., the median size of new townhouses is nearly 1,900 square feet, larger than the median size of a single-family house built in the county in 1970, and the median size of a new single-family home in the county has more than doubled to more than 3,700 square feet. At a time when the average household size is declining, the virtual disappearance of smaller new homes goes to the heart of the region’s housing affordability crisis. “The only way to make housing more affordable is to make housing units smaller,” said Stephen S. Fuller, director of George Mason University’s Center for Regional Analysis. Some builders say they would like to build smaller houses, but that sky-high land prices, restrictive zoning and neighbors opposed to higher-density housing make this difficult. “We’re only designing for 20% of the population right now,” said architect Christian Lessard. “That can’t last. As a society, we’ll have a problem because eventually no one’s going to be able to afford this other stuff.” But many in the industry believe that Americans don’t want less space and that first-time buyers would rather stretch their price limit or delay buying. “The answer is simple: the consumer doesn’t want it,” said Gopal Ahluwalia, vice president of research at NAHB. “The consumer is convinced that bigger is better.” (www.washingtonpost.com)
Washington Post (7/9/06); Alex MacGillis [Return to top]
Piggybacking Onto Trouble A policy change at Standard & Poor’s effectively requires lenders selling piggyback loans into secondary mortgage market bond pools to purchase substantial additional credit enhancements — which is likely to raise interest rates and fees for some home buyers this summer, according to mortgage experts, and could reduce the volume and availability of piggyback programs overall. Under a piggyback arrangement, the borrower takes out one traditional mortgage for 80% of the property value and simultaneously obtains a second lien for a portion or all of the balance, and avoids private mortgage insurance premiums. With their low cash requirements and often generous credit standards, piggybacks have become highly popular among home buyers, especially in high-cost areas, during the past several years, quadrupling their market share from 2001 to 2004, according to SMR Research Corp. In a sample of loans in California markets, according to SMR, the percentage of piggybacks exceeded 60% in some cases. Kyle Beauchamp, a credit analyst for Standard & Poor’s, says that an exhaustive study of the performance of piggyback loans found them 43% to 50% more likely to go into default than comparable stand-alone first-lien purchase transactions. One reason is that many of the second liens have been floating-rate home equity credit lines tied to short-term interest rate movements. (www.washingtonpost.com)
Washington Post (7/8/06); Kenneth R. Harney [Return to top]
Plants, Grass on the Rooftop? No Longer an Oddity. Chicago’s City Council has announced a pilot program that will provide up to $100,000 in matching funds for developers who retrofit existing downtown buildings with green roofs, out of a $500,000 pool of financing. Last year, the city began awarding $5,000 grants to small projects, many residential, and the city has started requiring green roofs on new buildings that receive city financing. More than 200 green roofs have been constructed in Chicago or are under way, covering 2-1/2 million square feet of tar with plants, by far the most of any American city. In a recent survey by Green Roofs for Healthy Cities, Chicago was followed by Washington, D.C. and Suitland, Md. (home of a huge green-topped National Oceanic and Atmospheric Administration building) in green-roof square footage. But the amount of space is increasing rapidly — up 80% in the U.S. between 2004 and 2005. It is often twice as expensive to install a green roof, though experts say that’s usually recouped through the roof’s 40- or 50-year life span (compared to a typical 20 or 25 years) and energy savings for the building. And some buildings aren’t designed for the additional load, even a few inches of lightweight soil. In Chicago, there are green roofs on the Apple store, a Target and a McDonald’s, and a soon-to-open Wal-Mart will have one, the first for the company. Nationally, green roofs grace the Gap headquarters in San Bruno, Calif.; a Ford Motor plant in Dearborn, Mich.; and the American Society of Landscape Architects building in Washington. (www.csmonitor.com)
Christian Science Monitor (7/10/06); Amanda Paulson [Return to top]
Medical Legend to Build Master-Planned Community Focused on Living Healthy Lifestyle Construction is expected to begin in September on a 512-acre, master-planned community just outside of Dallas valued at upwards of $1 billion. The nation’s first luxury residential community to totally focus on health and wellness, Cooper Life at Craig Ranch will be anchored by the existing 75,000-square-foot Cooper Aerobics Center, a cardio and strength-training center and spa. Homes in the community will include single-family cottages, town homes, brownstones, row houses and mid-rise condominiums. The plans were announced by Dr. Kenneth H. Cooper, who coined the term “aerobics” in his first best seller in 1968. Cooper Life will integrate the doctor’s principles of wellness into every aspect of its residents’ daily lives and will likely cater to residents between the ages of 40 and 65 who are “very active,” according to Rusty Criminger, sales and marketing director of development partner Wellstone Communities. “They’re drawn to fitness,” he said. “A dietician or personal trainer may come knocking on their door.” Residents will have easy access to outdoor exercise and stretching areas, nature trails, gardens, parks and winding streams. (www.multi-housingnews.com)
Multi-Housing News (7/13/06); Matthew Marin [Return to top]
Weight Loss Plan: I’ll Mow Your Lawn for Free Realizing that he needed to lose weight and having trouble keeping to an exercise program, Darrell Nelson, a resident of the Minneapolis-St. Paul area, posted a listing on the Craig’s List Web site advertising free lawn mowing services. Weighting 258 pounds, the 5-foot, 9-inch former power lifter was aiming to lose 30 pounds by eating healthier and mowing five or so lawns a week, an hour per lawn. He said his ideal weight-loss goal was 50 pounds. Nelson has received plenty of responses, including many from news producers asking for interviews, and the offer of a new lawn mower for an appearance in an ad for some hardware stores. “This is just insane, this has turned upside down,” he said on the day before he was scheduled to appear on “The Early Show” on CBS. “I’m in an onslaught of phone calls….I never anticipated what this has turned into. I have to lose weight now. I cannot fail, now that this has gotten this big. I’m getting my 15 minutes of fame and didn’t expect it. I just wanted to lose weight.” (www.startribune.com)
Minneapolis-St. Paul Star Tribune (7/7/06); Eric Hanson [Return to top]
Garages Motor to New Heights “The garage is the new frontier,” says Barry Izsak, author of “Organize Your Garage in No Time. “Everyone is getting in on the action,” he says, and it was only a matter of time. “The average American two-car garage had become the no-car garage. Ironically, the room in the house that has its door open to the world every day is the most unsightly. It’s the family dumping ground, the place to put something we don’t know what to do with.” According to NAHB, there are 65 million garages in the U.S., and demand for bigger ones is growing by the day. There are now more than 500 businesses that specialize in organizing garages, twice as many as in 2000, according to the National Association of Professional Organizers, which represents an industry that generates sales of more than $800 million a year in general organizational products. Although it is possible to spend tens of thousands of dollars redoing the garage, Home Depot reports that the average garage makeover purchase runs about $500. Julie Morgenstern, author of “Organizing From the Inside Out,” attributes the newfound love of garages to “lightening up” by organizing and to investing in real estate. Money spent on kitchens, bathrooms and garages, says Carl Zinn, a real estate developer from Sherwood, Minn., you’ll get back. (www.usatoday.com)
USA Today (7/11/06); Craig Wilson |
