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Demand Growing in U.S. for Rental Housing
Industry News
Apartment, Health REITs to Rebound First
Fewer Apartments Being Built in Charlotte Area
UDR Releases a New Bundle of Applications for the Most Popular Smartphones
Firm Offers Apartment Communities Plug-In Points for Electric Cars
Mid-America Apartment Communities Announces Quarterly Dividend
A $63 Million Push to Retrofit 4,300 BHA Apartments
Legislative/Legal News
Plans to Reshape Fannie Mae and Freddie Mac
Developers Hold up Colorado Bill on Affordable Housing
Recycling Violations Increase in N.J. County as Enforcement Is Stepped Up
Social Security to See Payout Exceed Pay-In This Year
Houston Apartment Community OK with Nude Sunbathing
DeBoer: Carried Interest Tax a Big Issue
Housing Compromise Wins First Council OK in Lexington, Ky.
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Demand Growing in U.S. for Rental Housing
Digested From "Demand Growing in US for Rental Properties"
NU Wire Investor (03/25/10) by Jon Prior
Many Americans are still priced out of the traditional housing market, despite month-over-month declines in home prices and some of the lowest mortgage rates on record. The income needed to pay a mortgage on a median-priced home fell in more than 90 percent of the markets examined by the Center for Housing Policy, the research arm of the National Housing Conference, an affordable housing policy advocate. Despite the decline, however, many Americans still do not make enough to buy a home. The study, which ranked purchase and rental costs for properties in more than 200 U.S. metropolitan areas, found that consumers are renting more and are paying higher rental costs than in previous years. Bob DeWitt, CEO of GID Investment Advisers, recently testified before federal lawmakers that the apartment industry is in need of government backing. He cautioned lawmakers about the risks of creating a capital shortage for the second-priority rental sector as they strategize on ways to mitigate taxpayer exposure. "This is important," he stated, "because the nation is increasingly relying on apartments as fundamental changes in our society are changing the types of housing we need to build. Housing expert Professor Arthur Nelson of the University of Utah projects that half of all housing built over the next 10 years will need to be rental housing to meet the dramatically changing landscape of demand."
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Apartment, Health REITs to Rebound First
Digested From "Apartment, Health REITs to Rebound First"
TheStreet.com (03/24/10) by Gregg Greenberg
Jay Leupp, manager of the Grubb & Ellis AGA US Realty Fund, forecasts that those REITs that invest in apartments, health care and self-storage sites will be the first to rebound in the months to come. The $2 million fund has more than doubled over the last year, gaining 14 percent since Jan. 1. The fund bought real estate stocks at this time last year, even though most investors were selling off their shares. Leupp comments, "What we did during that tumultuous time period was focus on real estate fundamentals, which is what we do best. We focused on the best management teams and we focused on the best values." Leupp sees the overall commercial real estate sector in the initial stages of a three- to five-year recovery. He confirms, "We see apartments, health care real estate and some of the specialty areas, like self-storage, recovering very soon, over the next 12 to 24 months. Some of the other areas, like lodging and office, will take longer periods of time to recover. In between those two, we see the industrial space and the retail space recovering in 18 to 36 months."
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Fewer Apartments Being Built in Charlotte Area
Digested From "Fewer Apartments Being Built in Charlotte Area"
Charlotte Observer (NC) (03/24/10) by Kerry Singe
The apartment market in Charlotte, N.C., is showing signs of a rebound now that construction on new apartments has slowed, according to Real Data. The number of new apartments shrank to less than half the number being built at the same time last year, and the number of new apartment communities being planned has also dropped. New construction pushed rents down during the last year, but they are on the rise again. Tami Fossum, president of the Greater Charlotte Apartment Association, said the market was headed in the right direction. She added that a slowdown in construction would likely speed up the recovery in the multifamily housing industry. Real Data surveyed more than 105,000 apartments in Mecklenburg, Cabarrus, Gaston, Iredell, Union and York counties for the Charlotte-area report.
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UDR Releases a New Bundle of Applications for the Most Popular Smartphones
Digested From "UDR Releases a New Industry Leading Bundle of Applications for the Most Popular Smartphones"
Business Wire (03/25/10)
UDR Inc. has announced the availability of new apartment search applications for BlackBerry, Palm Pre, Android and iPhone. The apartment REIT also released an industry-first, custom-designed social reality apartment search app. Users will now have the ability to: check daily updated apartment pricing; view an array of apartment photos, amenities and floor plans; check unit availability; and access GPS mapping and directions to find various UDR communities. Steve Taraborelli, UDR's vice president of sales and marketing, states, "The future of apartment social media networking will be utilizing technology that fosters customer interaction on a more intimate level. Our new augmented social reality apartment search application provides this opportunity to our customers and prospects today." As of the end of last year, UDR's portfolio contained more than 45,900 apartments with another 1,415 rental units in various stages of development.
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Firm Offers Apartment Communities Plug-In Points for Electric Cars
Digested From "Md. Firm Offers Plug-In Points For Electric Cars"
NPR Online (03/26/10) by Elizabeth Shogren
Sema Connect specializes in outfitting commercial properties so that they can service electric vehicles. The Maryland-based company, headed by Mahi Reddy, is looking to sell hookups to apartment communities, hotels, office buildings and other businesses to appeal to city dwellers looking for a place to plug in their electric cars.
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Mid-America Apartment Communities Announces Quarterly Dividend
Digested From "Mid-America Apartment Communities Announces Quarterly Common Dividend"
TheStreet.com (03/23/10)
Mid-America Apartment Communities Inc.'s board of directors has approved a quarterly common dividend of $0.615 per share, which will be payable April 30 to shareholders of record as of April 15. Mid-America is a Tennessee-based REIT that currently has ownership interests in more than 43,600 apartments throughout the Sunbelt region of the U.S.
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A $63 Million Push to Retrofit 4,300 BHA Apartments
Digested From "A $63 Million Push to Retrofit Housing"
Boston Globe (03/18/10) by Andrew Ryan
The city of Boston is undertaking what is being billed as the largest energy efficiency overhaul in public housing in the nation's history. The $63 million renovation will target 4,300 apartments in 13 Boston Housing Authority (BHA) developments. Energy-intensive lights will give way to hyper-efficient LEDs and compact fluorescents, and oil-guzzling boilers will be upgraded to cleaner natural gas varieties that will allow residents to control their heat. A dozen failing tar roofs that absorb major amounts of heat will make way for white surfaces that reflect warmth and for solar panels. "It's the nation's largest public housing energy performance contract, right here in Boston," says Boston Mayor Thomas Menino. "I think it's a win-win for everyone in the fact that it is energy efficient and there is no cost to taxpayers because it is paid for with savings generated by improvements." HUD, which covers utility costs for Boston public housing units, has agreed to continue paying the same amount for the next 20 years. The BHA will borrow $63 million against those future payments and use the money to pay the energy firm Ameresco to complete the three-year project. David Anderson, an executive vice president at Ameresco, estimates that after the BHA repays the loan and interest over the next two decades, taxpayers will save $7 million annually in utility costs for public housing.
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Legislative/Legal News
Plans to Reshape Fannie Mae and Freddie Mac
Digested From "A First Step on Fannie and Freddie"
New York Times (03/23/10) by Sewell Chan
Despite urgings from Congress, the Obama administration is moving cautiously to create a strategy to reorganize Fannie Mae and Freddie Mac, the mortgage-finance firms acquired by the government more than a year and a half ago. In a meeting before the House Financial Services Committee on March 23, Treasury Secretary Timothy F. Geithner said the administration would "take a fresh, cold, hard look at the core problems" in housing finance and put forth a "comprehensive set of reforms" to Congress, but did not specify a schedule. The secretary promised in his written statement that whatever the final result of the overhaul is, Fannie and Freddie will be reformed. "Private gains will no longer be subsidized by public losses, capital and underwriting standards will be appropriate, consumer protection will be strengthened and excessive risk-taking will be restrained," Geithner said. Robert E. Dewitt, speaking on behalf of the National Multi Housing Council and the National Apartment Association, which represent the rental housing sector, put out the call for a "balanced housing policy that doesn't measure success solely by how much home ownership there is."
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Developers Hold up Colorado Bill on Affordable Housing
Digested From "Developers Hold up Colorado Bill on Affordable-Housing"
Denver Post (CO) (03/28/10) by Tim Hoover
In Colorado, a bill that aims to preserve affordable housing -- particularly in pricey ski-resort towns -- has drawn criticism from developers and apartment owners alike who equate it to New York-style rent control. House Bill 1017 has already passed the House and one Senate committee. However, its progress to the Senate floor has slowed as supporters seek to ease opponents' concerns. The legislation clarifies that agreements between a government entity and a developer setting aside land for affordable housing are legal. In addition, it calls for such agreements to remain in place if the property changes hands. But apartment owners and developers charge that the bill does not make clear the agreements would be strictly "voluntary." Consequently, they assert, the bill enables cities and counties to strong-arm developers into including affordable units as a means of obtaining permission to build the property. Nancy Burke, lobbyist for the Colorado Apartment Association, argues, "The municipalities or local governments have the heavier hammer when it comes to negotiations."
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Recycling Violations Increase in N.J. County as Enforcement Is Stepped Up
Digested From "Recycling Violations Increase in Morris County as Officials Prompt More Enforcement"
Newark Star-Ledger (NJ) (03/28/10) by Lawrence Ragonese
Recycling of household and commercial trash declined in New Jersey's Morris County from a high of 55 percent in 1995 to 36 percent currently, recent state data shows. The main culprits for the nearly 20 percentage point decline are apartment communities, schools and businesses. As a result, these three have all been targeted for improved recycling in an enforcement push by the Morris County Municipal Utilities Authority (MUA), which began two years ago. Morris County Solid Waste Coordinator Larry Gindoff says, "We're looking for blatant violations, for trash generators who are just ignoring the rules." The main objective is to prevent a recurrence. County recycling coordinator Kathleen Hourihan comments, "We're trying to double our efforts, keep as much recyclable materials as possible out of the trash stations. We're doing a lot more follow-ups, trying to make people and businesses more aware of the recycling rules."
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Social Security to See Payout Exceed Pay-In This Year
Digested From "Social Security to See Payout Exceed Pay-In This Year"
New York Times (03/25/10) by Mary Williams Walsh
The economic recession has hurt employment, real estate, and now Social Security. In 2010, the fund will provide more in benefits than it receives in payroll taxes, an action that was not supposed to occur until at least 2016, according to the Congressional Budget Office (CBO). Social Security Administration chief actuary Stephen C. Gross says that while the CBO's prediction will likely occur, the change will not affect benefits in 2010, and retirees will continue receiving checks. The system's payout will be higher than the pay-in because payments have increased more than expected during the recession because more people are unemployed and applying for Social Security benefits sooner. The program's revenue has also dropped because there are fewer jobs to collect taxes from. This problem highlights the desire to determine when Social Security will use all of its funds, and experts currently believe that it will occur in 2037. President Obama has developed a bipartisan commission to review the nation's debt, including Social Security. The panel will make recommendations on how to reduce the country's deficit by Dec. 1, 2010. Alan Greenspan, former chairman of the Federal Reserve, says the government has three options to protect the Social Security fund: raise taxes, lower benefits, or bail out the program by using general revenue. "Even if the trust fund level goes down, there's no action required, until the level of the trust fund gets to zero," says Greenspan. "At that point, you have to cut benefits, because benefits have to equal receipts."
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Houston Apartment Community OK with Nude Sunbathing
Digested From "Houston Apartment Complex OK with Nude Sunbathing"
Houston Chronicle (03/25/10)
La Maison, a luxury apartment community in the River Oaks area of Houston that is managed by ZOM Living, now advertises as offering a "clothing optional sun deck." There are no deed restrictions currently in place from the city that could restrict such activity. Houston Apartment Association's Andy Teas said the community had found a way to offer something that competitors have not. Resident John Harrington called it a "value-added thing."
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DeBoer: Carried Interest Tax a Big Issue
Digested From "DeBoer: Carried Interest Tax a Big Issue"
GlobeSt.com (03/24/10) by Erika Morphy
Political analysts say the next 30 to 45 days will be a crucial period for the commercial real estate industry on Capitol Hill. During that time, the House of Representatives and the Senate will decide whether to change the tax characterization of carried interest. The risk is particularly great this year, notes Real Estate Roundtable Jeff DeBoer, who explains, "What we have now is a situation where the House bill on tax extenders needs to be conferenced but the revenue sources in the Senate bill are gone. The temptation to adopt the House provisions on carried interest will be significant." Last year ended without federal lawmakers passing this Extenders package. However, the House passed its version and used it as a funding source. The Senate, meanwhile, passed its version without the carried interest proposal, paying for it instead with other sources. Those sources are now being used to finance health-care reform, DeBoer notes, thus the crucial 30- to 45-day period. He concludes, "This is when we expect the Extender bills to be conferenced and resolved in some way."
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Housing Compromise Wins First Council OK in Lexington, Ky.
Digested From "Housing Compromise Wins First Council OK"
Lexington Herald-Leader (KY) (03/24/10) by Beverly Fortune
Lexington's Urban County Council this past week approved a series of compromises to help regulate rental property around the University of Kentucky. The changes define "family" for zoning purposes to limit the number of unrelated people who can live in one rented house and impose restrictions on apartment managers who create de facto dormitories by building large additions. One provision defines a family as "any number of people related by blood, marriage, adoption or other authorized custodial relationships" and says four or fewer unrelated people are permitted to live together. Another key provision mandates that rental homes in single-family or two-family neighborhoods cannot be expanded by more than 25 percent of their original size. The changes define boarding and lodging houses, single-family and two-family dwellings, and fraternity and sorority housing. They also define the conditions under which the Board of Adjustment will consider when determining the qualifications for a "functional family." The Greater Lexington Apartment Association and the University Area Housing Association plan to soon hold information sessions for apartment owners to help them better understand the changes.
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