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Bush Picks Executive for HUD
Industry News
Apartment Rents Rise More Slowly in Western U.S.
UDR Sharpens Focus by Scaling Down
HSC Real Estate Bought by Dallas Firm
JBG Recognized in Virginia for Workforce Housing
Second-Home Buyers Go Condo
Canyon-Johnson Fund Delivers Affordable Housing in Urban Areas
UDR Launches Mobile Phone Application
Study Ranks N.J. as Fifth Priciest Apartment Market
Survey Ranks Hawaii as Priciest Apartment Market
Hong Kong Has World's Highest Apartment Rents
Legislative/Legal News
Bill to Force NY Apartment Owners to Clean Up Mold
Illinois OKs Bill Forcing Apartment Owners to Give Notice
Feds Reject Syracuse Request for Delay on Apartment Auction
County Looks at Affordable Housing Incentive
NAA Announcements
NAA Education Conference (June 26-28 ~ Orlando, FL) – Development/Rehab Education Track
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Bush Picks Executive for HUD
Digested From "Bush Picks Executive for HUD"
Washington Post (04/19/08) P. A3; by Michael Abramowitz; Carol Leonnig
President Bush has named Steven C. Preston, the head of the Small Business Administration, to take over the Department of Housing and Urban Development. If confirmed by the Senate, Preston would replace Alphonso Jackson, who announced his resignation March 31 amid a criminal investigation into allegations of favoritism in awarding contracts. Preston has little experience in housing issues, though he is a well-regarded corporate and government administrator. Bush says the department needs "strong leadership at a time when our housing market is experiencing a period of challenge and uncertainty," describing Preston as "a reformer who would act aggressively to help Americans obtain affordable mortgages." Sen. John F. Kerry (D-Mass.), chairman of the Senate Committee on Small Business and Entrepreneurship, praised Preston's work at the SBA. He said the agency was in disarray when Preston arrived and that the administrator had "worked hard to right its course." Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee, expressed concern about Preston's lack of experience in housing issues, but said "I look forward to learning more about Mr. Preston and his qualifications for this important job at this trying time in our nation's economy."
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Apartment Rents Rise More Slowly in Western U.S.
Digested From "Apartment Rents Rise More Slowly in Western U.S., Survey Shows"
Bloomberg (04/17/08) by Daniel Taub
RealFacts reports that apartment rents in the U.S. West rose at a slower pace during the first three months of this year amid a decline in occupancies and higher unemployment. The average monthly apartment rent in 15 U.S. states, most of which are in the West, increased 3 percent from a year ago to $993. The average occupancy rate, meanwhile, slipped from 93.1 percent a year earlier to 92.6 percent. The drop in occupancies came as the U.S. jobless rate increased during March to 5.1 percent, the highest since September 2005. Gerald Cox, director of sales and marketing for RealFacts, states, "That is something that really impacts the multifamily market more than anything. It is very much job-driven.' Looking at individual markets, the average monthly rent increased the most in the Salt Lake City metro area, where it increased 9.9 percent to $803. Outside of the West, the smallest increase was in the Tampa, St. Petersburg and Clearwater region of Florida. There, rents rose 0.3 percent to $863 a month.
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UDR Sharpens Focus by Scaling Down
Digested From "UDR Decides Smaller Is Better"
Wall Street Journal (04/16/08) P. B6B; by Dawn Wotapka
Apartment owner UDR Inc. recently unloaded more than 25,000 apartment units--or roughly 40 percent of its portfolio--for $1.7 billion. Now, analysts are waiting to see whether UDR can transform itself from a national giant renting nondescript apartments into a smaller company with a sharper focus on newer units and pricier markets. Some industry insiders have their doubts. Philip Kibel of Moody's Investors Service remarks, "This is a nice chunk of their assets. It could affect their leadership and their brand name." Also, like all apartment operators, the REIT faces increased competition as foreclosures continue to flood the market with lower-priced supply. For now, analysts remain supportive of UDR's selloff. Haendel St. Juste, co-manager of Green Street Advisors Inc.'s residential research team, observes, "You don't find too often that companies are willing to sell off large blocks of their empire, for lack of a better word. Most companies don't like to shrink their empires."
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HSC Real Estate Bought by Dallas Firm
Digested From "HSC Real Estate Bought by Dallas Firm"
Puget Sound Business Journal (Seattle) (04/18/08)
Riverstone Residential Group, a subsidiary of Consolidated American Services, Inc., has purchased property management company HSC Real Estate Inc. for an undisclosed price. HSC Real Estate of Seattle has more than 34,000 residential units under management. "The time is right to take the next step with one of the premier national firms in our industry," said Walt Smith, president of HSC. Smith will become divisional president of the western division headquarters of Riverstone, overseeing operations in Washington, Oregon, Idaho, Montana, California and Northern Nevada. Consolidated American Services is the American property services company of United Kingdom-based Regis Capital Ltd.
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JBG Recognized in Virginia for Workforce Housing
Digested From "JBG Companies Take a Proactive Approach"
Fairfax Times (04/16/08) by Claire Compton
In Virginia, The JBG Companies has been honored with a 2008 Best of Reston award for its solid business practices. The developer, a relative newcomer to the market, has made a good impression by seeking community input during its various projects' public processes. JBG local legacy also includes a commitment to transit-oriented development, green building practices and affordable housing. Its Reston Heights development, for instance, is setting aside 12 percent of its residential units for workforce housing. John Schlicting, a managing director with the company, said the practice is a good one for the economic health of the region. He explains, "People that work for us and in our restaurants and hotels need affordable places to live. If we can't house those workers within reasonable commuting distance it puts a burden on the transportation network." Schlicting adds that the majority of JBG's developments are built near Metro subway stations. JBG arrived in Reston with its 2000 acquisition of the Sheraton.
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Second-Home Buyers Go Condo
Digested From "Second-Home Buyers Go Condo"
Wall Street Journal (04/18/08) P. W10; by June Fletcher
Vacation home sales plunged 31 percent to 740,000 last year from 2006, according to the National Association of Realtors. However, while sales of detached vacation homes fell 38 percent, sales of vacation condominiums dropped only 2.8 percent. Condos also accounted for 29 percent of the vacation-home market, rising from 21 percent the prior year, gaining popularity among second-home buyers because they provide pools and other amenities, do not require owners to undertake maintenance tasks, are priced lower than single-family properties, and are easier to sell than detached homes. Nevertheless, vacation condos experienced a 10-percent decrease in median price to $180,000 in 2007, mainly because investors are lowering prices to ensure a sale. Builders are erecting condos in new vacation spots, such as Lake Michigan, and also are offering "condo homes" for buyers who want detached properties without the maintenance hassles.
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Canyon-Johnson Fund Delivers Affordable Housing in Urban Areas
Digested From "Magic Johnson's Urban Development Fund Hits Pay Dirt"
Los Angeles Times (04/16/08) by Roger Vincent
A fund co-founded by basketball legend Earvin "Magic" Johnson has banked $1 billion for commercial developments in urban neighborhoods nationwide. Dubbed Canyon-Johnson Urban Fund, it has announced its third round of financing, which eclipses the combined $900 million total of its two previous funds. This latest round of funding will make possible more than $4 billion in new development and upgrades of property in the nation's biggest metro areas. The fund-- a partnership between Johnson and Canyon Capital Realty Advisors-- has already completed the construction of a retail and apartment project in Hollywood and the replacement of Chicago's old police headquarters with retail stores and condominiums. Bobby Turner, managing partner of the fund, reports that the need to upgrade urban centers is growing fast. America's population is currently rising at a rate of 3 million people per year, 90 percent of whom will be immigrants or people of color. Many will head to urban centers with established minority populations. Turner remarks, "Demand for affordable housing and community-serving retail is only going to increase." Additionally, Canyon-Johnson remains committed to making its projects environmentally friendly. The fund recently helped pay for $2 billion worth of green development, including a $70 million residential and retail tower in downtown Nashville. It holds the distinction of being the first green residential high-rise in the Southeast to be pre-approved by the U.S. Green Building Council.
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UDR Launches Mobile Phone Application
Digested From "UDR Offers Real-Time, On-the-Go Apartment Reservation Capability"
Centre Daily Times (PA) (04/15/08)
UDR Inc. confirms that it has launched a mobile phone application, enabling apartment searchers to use a mobile device to place a hold on an apartment any time, from any place. The application links front-end apartment search and online reservations processes with back-end systems to provide real-time apartment pricing and reservation confirmation. Jerry Davis, senior vice president of operations at UDR, states, "This application is a win-win. It not only enables us to deliver a secure, state-of-the-art search experience for millions of mobile appliance users, it also enhances sales force productivity and operational efficiency at UDR." UDR is an apartment REIT that is a leader in buying, selling, developing and redeveloping attractive properties in targeted U.S. markets.
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Study Ranks N.J. as Fifth Priciest Apartment Market
Digested From "N.J. Rent Ranks Fifth-Highest in U.S., According to Report"
Philadelphia Inquirer (04/15/08) by Tom Hester Jr.
According to a new report from the National Low-Income Housing Coalition, New Jersey ranks as the fifth most expensive state to rent an apartment. As a result, it is tough for many in service-oriented jobs to secure decent housing in the Garden State. The study estimates that roughly 50 percent of America's renting households cannot afford apartments big enough for their families. Coalition President Sheila Crowley states, "The current mortgage crisis has awakened everyone to what low-income renters have known for a long time--even modest homes are too costly for most low-income families." The study found that the average national apartment rent is $900, a 7 percent increase from a year ago. It reportedly would take a salary of $36,019 to afford such an apartment.
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Survey Ranks Hawaii as Priciest Apartment Market
Digested From "Isle Rents Ranked Highest in Nation"
Honolulu Star-Bulletin (04/15/08) by Sudhin Thanawala
A new study by the National Low Income Housing Coalition says Hawaii is the country's most expensive state for renting an apartment. The report says workers in the state must earn more than $29 per hour in order to afford the average two-bedroom apartment, which goes for an average $1,509 a month. That amounts to $60,355 a year, which is about $16,000 more than the median income of renters in the state. The coalition defines "affordable" as spending a maximum of 30 percent of gross income on housing expenses. Statewide, only on the Big Island was the rent for an average two-bedroom unit less than $1,000. Rep. Maile Shimabukuro, chairwoman of the House Human Services and Housing Committee, laments, "It's really out of control. You could easily have a person with two minimum-wage jobs working full time who is still not able to pay rent." The U.S. Census Bureau adds that nearly 10,000 Hawaii residents moved from the islands to the mainland between 2006 and last year, the largest exodus in at least eight years. Hawaii is followed by California, New York and Massachusetts on the National Low Income Housing Coalition's list of priciest apartment rental markets. The cheapest average rents were found in Puerto Rico, followed by North Dakota, West Virginia, South Dakota and Arkansas.
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Hong Kong Has World's Highest Apartment Rents
Digested From "Hong Kong Has World's Highest Apartment Rents--Survey"
Philippine Daily Inquirer (04/16/08)
A new ECA International survey shows that Hong Kong currently has the world's priciest apartment rents, with the average lease for a three-bedroom unit costing more than US$9,700 a month. Singapore, meanwhile, saw Asia's biggest year-on-year rental increase of more than 30 percent in 2007. The study, which covered all of last year, is based on lease prices for a three-bedroom apartment in popular expatriate areas. Asian cities accounted for six out of the top 10 most expensive rental locales, ECA International researchers report. Other Asian cities making the top 10 list were Mumbai, which ranked sixth; Seoul, seventh; Singapore, ninth; and Ho Chi Minh City, 10th. Globally, Moscow ranked second, followed by New York City, Tokyo, and London.
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Legislative/Legal News
Bill to Force NY Apartment Owners to Clean Up Mold
Digested From "Bill to Force Landlords Clean Up Mold"
New York Daily News (04/16/08)
Under newly introduced legislation, New York City apartment owners would be required to clean up moldy apartments if residents have asthma or other breathing problems. The bill, co-sponsored by Public Advocate Betsy Gotbaum and Councilwoman Rosie Mendez (D-Manhattan), would establish a standard level at which building owners would be required to get rid of mold. Mold complaints to the city's Department of Housing Preservation and Development rose from 8,288 seven years ago to 21,121 in 2006. While the housing code requires owners to keep their properties in good repair, the standard has always been somewhat vague and inconsistently enforced by city agencies. Gotbaum remarked, "If we're concerned about the health of New Yorkers, it's important that we do something about it."
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Illinois OKs Bill Forcing Apartment Owners to Give Notice
Digested From "House Approves Bill Forcing Landlords to Give Notice"
News-Gazette (04/15/08) by Mike Monson
The Illinois House of Representatives has voted overwhelmingly in favor of legislation that would require apartment owners to provide 48 hours' notice before entering a resident's apartment. Sponsored by state Rep. Naomi Jakobsson, D-Urbana, House Bill 4352 passed the House by a 113-2 vote to move on to the state Senate. Jakobsson reports that she has been contacted by a number of constituents who live outside of Urbana concerning this issue. She cited one seniors apartment community where the owner was making repairs over an extended period of time and wanted residents to leave their doors unlocked, regardless of whether they were home. Jakobsson stated, "The seniors felt unsafe trying to comply with their landlord's request to keep their door unlocked, even if they went out. . . . People should expect a reasonable amount of notice before a landlord enters their private space, and this legislation allows for such notice to be given to residents all across the state, not just at the local level." In addition, the bill would only allow owners to enter apartments between the hours of 8 a.m. and 8 p.m.
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Feds Reject Syracuse Request for Delay on Apartment Auction
Digested From "No Bids Force Cancellation of HUD Auction in Syracuse"
AM New York (04/15/08) by John Kekis
Federal officials canceled the auction of nine low-income apartment buildings in Syracuse, N.Y., earlier this past week after no bids were received. Prospective bidders had to have either a certified cashier's check for $200,000 or the equivalent in cash to place a bid. Foreclosure commissioner Christopher Willett commented, "This is a first. It's up to HUD now." That was good news for many Syracuse officials, who had urged HUD to delay the sale for six months. The city wants more say in who buys the properties and how they are used. Timothy Carroll, director of operations for the city, adds that Mayor Matt Driscoll will ask HUD not to start the process all over. Scattered across Syracuse, the nine buildings contain 275 federally subsidized low-income apartments. HUD foreclosed on the buildings early last fall after each failed inspection three times over three years.
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County Looks at Affordable Housing Incentive
Digested From "County Looks at Affordable Housing Incentive"
St. Petersburg Times (04/15/08) by Anne Lindberg
In Pinellas County, Fla., rising residential property prices, coupled with fewer affordable alternatives such as mobile homes and apartments, are making homeownership unattainable for many working-class citizens. Little relief is in sight, as the local population is projected to double in the next 50 years. Such a booming increase will put an even greater strain on housing, likely keeping costs high. One possible solution to the housing crisis now being discussed is the proposed Inclusionary Housing Ordinance, which would encourage developers to include affordable units as part of new residential projects. In exchange, developers would receive a density bonus, meaning they could build more units on a piece of land than is normally permitted under city and county rules. The proposal is currently in a 90-day public comment period. When that is over, the Pinellas County Commission will consider passing the ordinance. If that happens, the measure would become effective on Jan. 1. In addition, the ordinance would apply to developments of 20 or more units, which could be single-family homes, condominiums, townhomes or apartments. The developer would receive a density bonus of as much as 50 percent in return.
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NAA Announcements
NAA Education Conference (June 26-28 ~ Orlando, FL) – Development/Rehab Education Track
Register today for the NAA Education Conference and take advantage of the Development/Rehab Education Track. The multifamily housing industry is responsible for billions of dollars in real estate. The Development/Rehab Track will inform you about current trends that directly impact the assets you manage. With sessions including “Going Green: Best Practices in the Multi-Family Industry” and “Color Your Investment: Selecting the Right Hues for Higher Profits,” you are going to go home with ideas to make your properties better and brighter! Attendees are sure to go back to the office ready to work with great take-away ideas from these sessions!
Choose from more than 50 education sessions divided into nine education tracks including: Executive, Development & Rehab, Marketing & Leasing, Human Resources, Independent/Small Owner, Specialty Housing, Personal Development, Wild Card! and Shared Interest Roundtables.
Register for the conference and book your hotel room TODAY! Be a part of the largest show in the multifamily housing industry. Group discounts are also available for companies purchasing five or more full conference registrations.
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Is Your Team a Certified Success?
Learn some of the benefits of employees with NAA Education Institute professional designations. Click on the Web Link below or contact Julie Barden at 703/518-6141, Ext. 691 or juliebarden@naahq.org for more information.
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