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Affordable Housing Gets Treasury Boost
Industry News
Construction Industry Forecast to Rebound in 2010
Forget the American Dream, Many Figure It's Better to Rent
New Kentucky Apartment Community Appeals to Non-Traditional Students
Tishman/BlackRock Property in New York in Danger of Default
Apartment Vacancies Are Up in Wyoming
Griffis Group Pushes Green Living at its Colorado Apartment Communities
Rental Vacancies Soar in Kenosha, Wis.
Apartment Vacancies Leveling Out in Utah
UDR Announces Industry's First Augmented Reality Search Applications
Legislative/Legal News
Billing Options Could Surprise San Antonio Apartment Residents 
Homebuyer Credit Extended for Military
More Apartment Owners Using No-Smoking Strategies
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Affordable Housing Gets Treasury Boost
Digested From "Affordable Housing Gets Treasury Boost"
GlobeSt.com (10/20/09) by Erika Morphy
The Treasury Department has unveiled a temporary plan to provide additional funds to local and state housing finance agencies (HFAs) that are having a tough time stabilizing housing markets and providing support to local affordable housing programs. The initiative features a temporary credit and liquidity program for local housing agencies and a bond purchase program to support new lending. Treasury will buy securities issued by Fannie Mae and Freddie Mac that are backing the mortgage revenue bonds issued by the state HFAs. Officials say affordable multifamily housing development is part of the program, with the new bond issuance expected to support the construction of "tens of thousands" of new rental units.
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Industry News
Construction Industry Forecast to Rebound in 2010
Digested From "Construction Industry Forecast to Rebound in 2010"
Wall Street Journal (10/16/09) P. A5; by Dawn Wotapka
A new McGraw-Hill forecast expects the U.S. construction industry to register modest gains in 2010, as a rise in the building of apartment communities, single-family homes, highways, and bridges offsets projected declines in commercial and manufacturing space. New development will continue to be held back by tight credit conditions and high joblessness, say researchers. Overall construction starts are expected to climb 11 percent next year to $466.2 billion, with single-family housing leading the way at $162.2 billion -- a 30 percent gain. However, that is contingent on mortgage rates staying relatively low, the $8,000 federal tax credit for first-time home buyers being extended, and programs to ease foreclosures continuing to help homeowners.
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Forget the American Dream, Many Figure It's Better to Rent
Digested From "Forget the American Dream, Many Figure It's Better to Rent"
Fort Myers News-Press (10/09/09)
For thousands of people throughout Southwest Florida and elsewhere, the American dream of homeownership has lost some of its luster amid the foreclosure crisis. Earlier in the year, the National Foundation for Credit Counseling released survey results showing nearly 50 percent of all American adults no longer view homeownership as a reliable means of building wealth. In addition, 31 percent of respondents said they don't expect to ever be able to own a home. Several property professionals are weighing in on the trend. Foundation spokeswoman Gail Cunningham observes that more Americans are preferring to rent, rather than buy. She states, "For the people who have gone through foreclosure, it is going to take years for them to rebuild their credit scores, and there will still be a real fear of getting twice burned. And it doesn't necessarily have to have happened to you. We all know someone who has gone through it." Joe Gyourko, professor of real estate at the Wharton School of the University of Pennsylvania, cautions that the widely held expectation that everyone should own a home too often leads to people reaching beyond their means. Looking at specific markets, Southwest Florida Apartment Association Executive Director Trish Barton notes that local apartment occupancy is more than 80 percent currently -- a bit lower than owners and managers would like, but still up from earlier in the year. Barton remarks, "They are not having to offer as many incentives -- free first month's rent and things like that -- as they were."
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New Kentucky Apartment Community Appeals to Non-Traditional Students
Digested From "New WKU Housing En Route "
Bowling Green Daily News (KY) (10/18/09) by Joanie Baker Hendricks
A new apartment community near the campus of Western Kentucky University (WKU) aims to give non-traditional students the ability to live off campus, yet still enjoy an on-campus feel. Construction work will start soon on an estimated 60 units for students who are married, taking graduate classes, returning from military duty or are of non-traditional status. Brian Kuster, director of WKU's Student Life Foundation, said his program -- which funds and renovates student housing -- will take on the estimated $6 million project with revenue from student living costs. Construction will begin next summer and take place in phases in order for the various buildings to be paid for with cash. The first one- and two-bedroom apartments are slated to open in August 2011. Kuster remarks, "It's important that we use cash instead of borrowing additional money. We'd like to be able to rent these at the low end of the market because . . . there's no reason for us to build these if students can rent them for less in the community." The university conducted a marketing study this past spring, the results of which indicated there was a real need for both graduate and family housing. While WKU has had minimal apartment offerings in the past, it has been about 12 or 15 years since there was a good number of units available.
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Tishman/BlackRock Property in New York in Danger of Default
Digested From "An Apartment Complex Teeters"
Wall Street Journal (10/15/09) by Lingling Wei; Craig Karmin
In New York City, one of the most high-profile deals of the real-estate boom is now in danger of default. Peter Cooper Village and Stuyvesant Town, the sprawling Manhattan apartment complex that was acquired for $5.4 billion three years ago by a venture of Tishman Speyer Properties and a unit of BlackRock Inc., is quickly running out of cash. As of the end of this year's third quarter, sources say it had $33.7 million left of the $400 million in interest reserves established to service its debt. Currently burning about $16 million a month, the reserve is on pace to be depleted before the end of December. The ownership, which includes a number of high-profile investors ranging from the Church of England to the California Public Employees' Retirement System, currently has no plans to inject more capital into the venture. Deutsche Bank AG reports that those lenders who initially financed the deal projected the apartments' net operating income would triple to $336 million in 2011 from $112 million in 2006. However, net income is projected to only be $139 million this year, states Realpoint LLC.
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Apartment Vacancies Are Up in Wyoming
Digested From "Apartment Vacancies Are Up"
Wyoming Tribune-Eagle (10/16/09) by Baylie Evans
David Haney, executive director of the Wyoming Community Development Authority, reports that apartment vacancy rates are up in his state. Demand, though, continues to be strong. A recent Wyoming Community Development Authority report shows that there were more than twice as many vacancies in early 2009 as there were a year earlier, as the vacancy rate rose from 2.89 percent to 6.06 percent. Year over year, there were about 80 percent more vacancies. Nevertheless, Wyoming is not seeing the same vacancy rates or increases that other areas are. Haney points out that the state is actually in a leveling-off period on its way to a more normal rate. In 2006 and 2007, Wyoming witnessed a substantial increase in its workforce, causing the statewide apartment vacancy rate to be nearly non-existent. Indeed, the rate was a scant 1.5 percent in 2007. Haney notes, "We're probably much more balanced today." In turn, apartment owner are raising rents and are getting stricter about requiring application fees, background checks and deposits.
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Griffis Group Pushes Green Living at its Colorado Apartment Communities
Digested From "Griffis Group Commits to Environmentally Friendly Living at its Nine Luxury Colorado Apartment Communities with Wind Power"
PRWeb (10/14/09)
Griffis Group has vowed to reduce the carbon footprint of its nine Class-A apartment communities in Colorado by purchasing more than 6.9 million kilowatt hours of renewable energy credits (RECs) from Renewable Choice Energy. This commitment will offset the impact of 60 percent of the electricity use of its 2,290 apartments for one year and help save almost 7.8 million pounds of carbon dioxide pollution. David Birnbaum, managing director of the Denver-based Griffis Group, states, "We are committed to reducing our carbon footprint and educating our residents on the importance of conserving energy and encouraging the production of clean energy." The nine communities are located in Aurora, Boulder, Colorado Springs and Denver. They offer 1- to 3-bedroom apartments and boast such luxury amenities as swimming pools and spas, 24-hour fitness facilities and Starbucks coffee bars. Meanwhile, the environmentally friendly commitments range from on-site single stream recycling to energy-efficient lighting and appliances to on-site recycling for compact fluorescent light bulbs.
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Rental Vacancies Soar in Kenosha, Wis.
Digested From "Rental Vacancies Soar Locally"
Kenosha News (Wis.) (10/16/09) by John Krerowicz
In Kenosha, Wis., apartment vacancy rates appear to be following the worsening national trend. Larry Cappozzo of locally based Providence Realty estimates the vacancy rate citywide is currently around 25 percent, citing high unemployment as the main reason. Cappozzo reasons, "When people apply to rent a place but have no money and no job, you can't put them in a unit." From his vantage point, Kenosha's apartment rents have yet to decline in response to the vacancies due mainly to the fact that owners still have to pay their bills. Unfortunately, that hasn't stopped owners of single-family homes from slashing rents to attract occupants away from area apartment communities. According to Cappozzo's estimates, owners or managers of about 80 percent of Kenosha's single-family homes for rent are accepting payments for them less than their monthly mortgage. He remarks, "They just can't find tenants able to pay [any] higher amounts." Cappozzo concludes by noting that he has seen families moving into smaller apartments in order to pay less rent or combining with other adult relatives to share the costs. To help residents, some apartment owners are working with We Energies to improve energy efficiency in their apartments to reduce the cost of utilities that residents pay.
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Apartment Vacancies Leveling Out in Utah
Digested From "Apartment Vacancies Leveling Out"
ABC 4 KTVX (UT) (10/13/09)
CB Richard Ellis Group confirms that Utah's apartment vacancy rate was 6.8 percent as of the end of September, with signs of stabilization in the months ahead. CBRE researchers further predict more available apartments in 2010, as there are currently 13 new apartment communities being built throughout Salt Lake County. All are on track to open in the next year. This past year, eight new apartment communities were added.
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UDR Announces Industry's First Augmented Reality Search Applications
Digested From "UDR Announces Industry's First Augmented Reality Search Applications"
Business Wire (10/15/09)
UDR Inc. recently launched its augmented reality (AR) apartment search applications for iPhone 3G S phones and T-Mobile Google Android phones. The launch highlights the continued expansion of the apartment REIT's mobile services platform, which makes finding an apartment easier and more convenient. AR technology makes use of the smartphone's built-in spatial awareness components, including its GPS and compass to superimpose digital data on top of what is viewed via the phone camera's viewfinder. The Denver-based REIT's AR applications utilize Layar, an augmented reality browser that allows users to point their smartphone in any direction to locate and view available rental units within a 10-mile radius from their present location. Additional features provide users with the ability to show how many units are currently available for rent in a given community, where nearby restaurants and movie theaters are, and what the targeted apartments are going for a month. Steve Taraborelli, vice president of sales and marketing at UDR, states, "We pride ourselves as the industry leader when it comes to embracing and adopting new mobile appliance technology. Implementing AR search applications into our existing mobile services platform is another example of how UDR is working to make finding and renting an apartment easier for consumers."
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Legislative/Legal News
Billing Options Could Surprise San Antonio Apartment Residents
Digested From "Apt. Dwellers Could Be Surprised at Billing Options"
KENS5 (San Antonio) (10/17/09) by Barry Davis
Residents in most of San Antonio's hundreds of apartment communities have to pay for their own water. Lately, though, a growing number of local apartment residents have been expressing surprise and even anger that their water bills keep getting higher, seemingly without explanation. What many are learning is that a lot has to do with how each apartment community handles water service. It is the responsibility of the Texas Commission on Environmental Quality (TCEQ) to regulate billing practices for water and wastewater utility services for apartment communities. Once the local public utility measures water use for the entire community, a couple of billing methods are used: submetered and allocated. The most common billing method finds owners using submeters at each rental unit to bill residents based on their water usage. Under allocated billing, by contrast, the apartment owner uses a formula to divide utility charges among the number of residents. Both methods are legal. Residents are encouraged to ask which method is used prior to signing a lease.
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Homebuyer Credit Extended for Military
Digested From "Homebuyer Credit Extended for Military"
Clarksville (Tenn.) Leaf-Chronicle (10/09/09) by Chris Smith
The U.S. House of Representatives has unanimously passed a bill that extends and enhances the $8,000 first-time home buyer tax credit for military families. Foreign service officers and members of the military as well as the intelligence community serving away from home in 2009 would have an additional year, to December 2010, to take advantage of the incentive. The measure, which has not yet moved through the Senate, also waives the repayment requirements for service members who are required to move or sell their homes because of government orders.
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More Apartment Owners Using No-Smoking Strategies
Digested From "No-Smoking Strategy"
Stop Smoking (10/01/2009) by Sharon Stangenes
Apartment owners increasingly are using smoke-free policies to make their communities more eco-friendly. McCaffery Interests bans smoking for residents and guests in the 152 apartments in the Morgan at Loyola Station in Rogers Park, Ill. Pamela Austin, McCaffery Interests' project manager of development, says, "We decided to design the building according to LEED [Leadership in Energy and Environmental Design] standards to promote a healthy environment and lifestyle. No smoking seemed like a logical extension of that." AMLI 900, an apartment community on Chicago's South Loop, also implemented a non-smoking policy to improve indoor air quality and qualify for LEED certification. Spokespeople for both McCaffery Interests and AMLI Residential call their smoke-free policies "a quality-of-life amenity" that gives them a competitive edge. To this end, Apartment People marketing director Maurice Ortiz says more apartment owners in the Windy City metro area would like to make their communities smoke-free.
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