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Apartments Play Key Role in Housing Starts' January Rise
Industry News
AvalonBay Ramps Up New Apartments, Betting Rental Glut Disappears
Bernstein Purchases Stake in $250M D.C.-Area Apartment Portfolio
Archstone Pursues Cleaner Electricity for NYC Apartment Communities
Plots & Ploys: Down Under, Worries on Rise
Triad Apartment Association Looks to Turn Old Cottage Into Youth Shelter
Futures Prices for Lumber Rise to Highest Level in Over Two Years
Western Michigan to Build On-Campus Apartments
Legislative/Legal News
Kansas Apartments in the Middle of Debate Over Bill Banning Local Sprinkler Laws
Ohio Apartment Owners Usually Not Responsible For Falling Ice, Icicles 
Carbon Monoxide Detector Deadline Nears for Wisconsin Apartments
Texas Town Council Votes to Support Reduced-Rent Apartments
Oklahoma Law Forces Apartment Owners to Clean Up Drug Houses
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Apartments Play Key Role in Housing Starts' January Rise
Digested From "Construction of Single-Family Homes Up 1.5 Percent"
Wall Street Journal (02/18/10) P. A7; by Justin Lahart; Jeff Bater
The Commerce Department reports that home starts rose 2.8 percent in January from the month before to a seasonally adjusted annual rate of 591,000. Much of the gain came from a 9.2 percent spike in groundbreaking on apartments and other multifamily housing. Although construction of single-family units climbed 1.5 percent in January to 484,000, the monthly level has remained within a narrow range since June.
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Industry News
AvalonBay Ramps Up New Apartments, Betting Rental Glut Disappears
Digested From "AvalonBay Ramps Up New Apartments in Bet Rental Glut Disappears"
BusinessWeek (02/18/10) by Prashant Gopal
AvalonBay Communities Inc. announced they plan to begin $400 million of new construction in 2010 in a move company management expects will capitalize on a rental shortage by 2012. Although apartment vacancies are at an all-time high of 8 percent, AvalonBay is counting on the demand to rise as the job market recovers and echo-boomers seek their own dwellings. With $300 million of cash and a $1 billion line of credit available, they can afford to take the risk when very few others can secure the financing. Initially, AvalonBay will focus on markets with lower vacancy rates, having already begun two communities in last year's fourth quarter in Northborough, Mass., and West Long Branch, N.J. Other new construction of apartments has dried up significantly. According to Reis Inc., U.S. builders started 92,000 units in 2009, a 58 percent drop from the previous year. This contraction in new development has also caused construction costs to drop approximately 20 percent from their peak, which means that AvalonBay can "build at an attractive price and deliver into an attractive market," reports CEO Bryce Blair.
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Bernstein Purchases Stake in $250M D.C.-Area Apartment Portfolio
Digested From "Bernstein Buys Stake in $250M Multifamily Portfolio"
CoStar Group (02/19/10) by Laurie Forbes
Bernstein Management late last week partnered with Forest City Enterprises to acquire a 50 percent stake in a portfolio of three high-rise apartment communities spread throughout suburban Washington, D.C. The deal is valued at $250 million, or approximately $186,567 per rental unit. Cleveland-based Forest City built each of the three assets in the 1990s. They include the Lenox Club in Alexandria, Va.; Lenox Park in Silver Spring, Md.; and The Grand in nearby Bethesda, Md. All three are at least 90 percent leased. Bernstein is a property investment and management firm headquartered in the nation's capital.
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Archstone Pursues Cleaner Electricity for NYC Apartment Communities
Digested From "Archstone Pursues Cleaner Electricity for New York City Apartment Communities"
PRWeb (02/17/10)
Archstone has agreed to purchase cleaner energy from Green Mountain Energy Co. to use at their 12 New York City apartment communities. Over the course of the one-year agreement, Archstone expects to purchase more than 14.6 million kilowatt hours of renewable energy that, when matched with U.S. sources of renewable energy, will offset 19 million pounds of carbon dioxide. That is the equivalent of removing approximately 4,000 taxi cabs from circulation for a month. This move is part of a continued effort by Archstone to implement better natural resource management and maintain better air quality in and around U.S. cities. Other initiatives taken by Archstone include energy-efficient appliances, sub-metering of utilities, and expanding co-generation projects such as solar panels. The partnership with Green Mountain Energy is significant for Archstone as Green Mountain is the country's leading retail provider of cleaner energy and carbon offset solutions. Since its founding, Green Mountain has helped its customers avoid over 9.8 billion pounds of carbon dioxide emissions.
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Plots & Ploys: Down Under, Worries on Rise
Digested From "Plots & Ploys: Down Under, Worries on Rise"
Wall Street Journal (02/17/10) P. C8; by Alex Frangos
Reserve Bank of Australia assistant governor Guy Debelle expects more pain to come for America's local and regional banks that loaded up on real-estate loans during the boom. In a speech this week on the global financial situation, the Australian central banker said his top concern is the mountain of U.S. bank loans tied to apartment communities, hotels, office buildings and warehouses. In particular, Debelle said he is worried about the small and medium-size U.S. banks that were not included in the federal government's stress tests. He remarked, "This lower tier, which is a sizable share of the U.S. financial sector, has loan portfolios which are very regionally concentrated with a sizable weighting to commercial property."
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Triad Apartment Association Looks to Turn Old Cottage Into Youth Shelter
Digested From "A Warm Place: Apartment Group Using Its Skills to Turn an Old Cottage Into a Shelter for Young People"
Winston-Salem Journal (NC) (02/18/10) by Kim Underwood
In Winston-Salem, N.C., about 150 volunteers have been renovating the Stultz Cottage at the Children's Home. Volunteers have been doing such things as clearing out items that had been stored in the building for years, replacing light fixtures and landscaping the grounds. The work will enable the cottage, which has not been used for 25 years, to serve a residential program that the Children's Home is moving to its campus. Spearheading the effort is the Triad Apartment Association, which has decided to make renovating the cottage its "Labor of Love" project for 2010. Jon Lowder, the association's executive director, expected to have nearly everything done by the end of this past weekend. However, the shelter will not be able to move in until the state approves the move, which could take another two months.
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Futures Prices for Lumber Rise to Highest Level in Over Two Years
Digested From "Lumber's Gain Is Impressive, But Its Foundation's Not Set"
MarketWatch (02/14/10) by Myra P. Saefong
New data shows that futures prices for lumber rose to a high above $280 per 1,000 board feet on the Chicago Mercantile Exchange earlier this month, the strongest level the market's seen since August 2007. In addition, that marks a more than 60 percent jump from a year earlier even though home-building numbers have not shown marked improvement. This could mean a number of things. Some analysts theorize it is an early indicator of an uptick in housing. Others say it is due to a possibly strong spring housing season ahead of the expiration of the new home buyers' tax credit on April 30. What is certain is lumber prices, which were depressed for the first ten months of last year, have broken out of a long-term downward trend that had been in place since prices peaked in 2004. Phil Flynn, a senior analyst at PFG Best, observes, "Just a year ago, prices dropped to the lowest levels since [around] 1991, making it difficult or impossible for mills to make a profit as the housing crisis took its toll." At the time, he adds, "lumber prices got slammed as demand tanked and commodities got caught up in a deflationary thud." Part of the reason lumber prices reached a more than two-year high recently is production across the board has been reduced by an estimated 30 percent. The main rationale, though, hinges on the growing belief that the U.S. construction industry "is on the upswing," concludes Jim Wyckoff, senior market analyst at TraderPlanet.com.
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Western Michigan to Build On-Campus Apartments
Digested From "WMU to Build On-Campus Apartments"
Kalamazoo Gazette (MI) (02/05/10) by Phillip Swanson
Next year, Western Michigan University will unveil a $13 million apartment community for upper-classmen. Housing options will range from one- to four-bedroom units, marking the first construction of apartment housing for undergraduate students in over 40 years. Apartment rents will range from about $400 to $700 a monht, depending on choice of unit. Funding for the project will initially be supplied from a bond issue. Both the Western Michigan Students Association and the Residence Hall Association submitted input for the floor plans and pricing of the apartments. According to WMU spokeswoman Cheryl Roland, students who live on-campus tend to perform better academically.
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Legislative/Legal News
Kansas Apartments in the Middle of Debate Over Bill Banning Local Sprinkler Laws
Digested From "Builders Get Revote on Bill Banning Local Sprinkler Laws"
Wichita Eagle (KS) (02/19/10) by Dion Lefler
The Kansas House of Representatives is planning to revote on a bill prohibiting local governments from mandating the installation of fire sprinklers in small apartment communities. Firefighters are strongly opposed to the bill, especially since two cities have already passed mandates requiring fire sprinklers in triplexes and duplexes. Others opponents argue that sprinklers save lives and that a state law restricting building codes would infringe on local home-rule powers. Those in favor of the bill contend that such a mandate could increase building and development costs by thousands of dollars.
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Ohio Apartment Owners Usually Not Responsible For Falling Ice, Icicles
Digested From "Building Owners Usually Not Responsible For Falling Ice, Icicles"
NBC4i.com (OH) (02/18/10) by Patrick Preston
There is debate in Ohio over whether or not apartment community owners should be responsible for injuries sustained by falling icicles. For the most part, however, there is not much a court can do for the injured person. Columbus-based personal injury attorney Mark Kitrick explains, "The test is simple: is it a natural accumulation of ice, or is it an unnatural accumulation. If it's a natural accumulation and you can reasonably expect to see that kind of ice or that condition, then there's no duty of the landlord to do anything." Even unnatural buildup caused by a problem with the building is unlikely to hold up in a lawsuit. But an incomplete clean-up job on the ice could warrant good evidence were someone to pursue a case against an apartment owner.
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Carbon Monoxide Detector Deadline Nears for Wisconsin Apartments
Digested From "Carbon Monoxide Detector Deadline Nears"
Stevens Point Journal (WI) (02/18/10) by Meredith Thorn
A new regulation in Wisconsin requires apartment owners to install carbon monoxide alarms in places where fuel-burning appliances are used. Such appliances include hot water heaters, dryers, and furnaces. Statewide, fire departments will be talking with apartment owners and managers to educate them on where the detectors should be placed. All detectors must be in place by April 1 in apartment communities built before Oct. 1, 2008. Communities erected after the October 2008 date were already required to have the detectors.
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Texas Town Council Votes to Support Reduced-Rent Apartments
Digested From "Frisco Council Votes to Support Reduced-Rent Apartments"
Dallas Morning News (TX) (02/17/10) by Valerie Wigglesworth
Two apartment communities are in the initial planning stages in Frisco, Texas. However, their development is contingent upon acceptance into the state's Housing Tax Credit program, which provides tax incentives to developments with below-market rents. If built, the communities would also include spaces set aside for Section 8 voucher-holders from the Dallas Housing Authority. The City Council voted 4-to-1 to approve writing letters to the state in support of the projects despite community protests. Community members have raised concerns about impacts to traffic, utilities, schools, crime rates, and decreases in their property values.
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Oklahoma Law Forces Apartment Owners to Clean Up Drug Houses
Digested From "Law Forces Landlord to Clean Up Drug House"
Tulsa Beacon (OK) (02/11/10) by Manny Gamallo
To protect against the toxic chemicals used to manufacture methamphetamine, a new law effective Feb. 14 in Sand Springs, Okla., will require owners of apartments, homes, mobile homes, motels and hotels to clean up units used as meth labs before they can be occupied again. According to Sand Springs assistant police chief Mike Carter, "We don't want a family moving into one of these homes and having their children play on carpets exposed to these chemicals. You could end up with children with lifelong medical problems as a result." Owners will be required to call police if they believe their units have been used to make meth or other hazardous substances, then hire a certified cleaning company to decontaminate the property. Violators could be slapped with fines of up to $200 per day. A report indicating that the unit has been cleaned must be submitted to the city before the home can be occupied, and owners must disclose to prospective renters that the unit once served as a meth lab.
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