The Valley Stream Herald published this story this week on the Island's affordable housing situation.
Valley Stream resident Nina Petraro Bastardi, 26, says there is a glaring problem on Long Island: a lack of housing for young adults.
She is disturbed that many of her friends either can't afford to move out of their parents' homes or are leaving the Island altogether.
Petraro Bastardi, an attorney with Farrell Fritz and a deputy prosecutor for the village, is a member of Action Long Island, a volunteer nonprofit organization that advocates for a better quality of life for Nassau and Suffolk County residents. One of its big issues is housing for young adults.
Through a young-adult database, Action Long Island keeps people informed of potential housing developments that would be beneficial for those in their 20s. Petraro Bastardi said the purpose is to encourage them to attend public hearings for these projects and show their support. "A lot of good projects get voted down," she said, adding that it is often a vocal minority that gets developments defeated.
Petraro Bastardi said it is time for young adults to take a stand. "We're trying to make our generation a voice for the issue," she said. "Things won't really change until we're the spokespeople."
Because it is difficult for people in their 20s to buy homes, that age group looks to apartments, she said. But there are simply not enough affordable rentals on Long Island, Petraro Bastardi explained - though it doesn't have to be that way.
As a downtown revitalization project begins in Valley Stream, she expressed hope that this could lead to the creation of more next-generation housing. The village has hired a planning firm, but a recommendation of how to proceed is still several months away.
"A good idea would be to have housing on Rockaway Avenue," she said. "You could have condos or apartments over those stores."
Petraro Bastardi sits on the village's business improvement committee, which will be part of the decision-making process.
Mayor Ed Cahill said there are a few apartments above stores on Rockaway Avenue, and that adding more housing downtown is a possibility, but he first wants to see what recommendations the planning firm has. Cahill stressed that the purpose of the revitalization project is to bring more shoppers downtown, not to create affordable housing. However, he acknowledged, the two concepts could end up working hand in hand. "We're open to anything that will increase business," he said.
For example, a new 90-unit condo development will open up on North Cottage Street this fall, Cahill said. The location is just two blocks from Rockaway Avenue, and he expects the development to be a boon to downtown businesses.
David Sabatino, a 23-year-old from Valley Stream, said he and his girlfriend have been looking for a place to live but have been unsuccessful. According to Sabatino, their search for an apartment to rent has spanned more than a year. "It's very difficult for my girlfriend and I to find an affordable place to live," he said. "I would like it if there was a better housing option."
Sabatino, an NYU graduate student studying urban planning, said he has found a few places that interested him, but no one has been willing to budge on the price. He said he likes County Executive Tom Suozzi's push for "cool downtowns," which would create urban centers featuring a mix of stores, offices, restaurants and housing in close proximity to public transportation. Suozzi targeted Valley Stream as a potential location for such a downtown."
"I have a lot of faith in the village and Nassau County," Sabatino said of the housing issue, though he added that he hopes the problem is solved before he is forced to move off Long Island, like many of his friends have. "It's very tough," he said. "It's hard to stay, but I'd really like to."
Petraro Bastardi, too, wants to stay, and hopes to help make that possible for herself and others: She plans to run for the county Legislature in the fall.
She said that she and her husband, Chris, have had their share of struggles on the housing front. While they have owned a home in Valley Stream for two years, she said it took them about two years to find something affordable. There is little money left over for anything beyond the necessities after they make their monthly payments on the house, she explained.
Like Sabatino, Petraro Bastardi said she likes the idea of revitalizing Nassau County's downtowns and including housing for young adults. As far as she's concerned, it makes no sense for communities to spend millions of dollars educating people, only to have them go elsewhere. "It's obviously not good for any businesses," she said, "when you have skilled people leaving the region."
Comments about this story? AHackmack@liherald.com or (516) 569-4000 ext. 265.
Friday, April 24, 2009
Friday, April 3, 2009
WSJ: FASB Eases Mark-to-Market Rules
This article was in today's Wall Street Journal.
http://online.wsj.com/article/SB123867739560682309.html#printMode
FASB Eases Mark-to-Market Rules
By KARA SCANNELL
U.S. accounting rule makers made it easier for banks to limit losses, but in an unexpected move they bowed to critics and backtracked on one proposal that would have let companies ignore market prices in some cases.
The vote by the Financial Accounting Standards Board followed a debate in which members of Congress pushed for steps to help banks weighed down by troubled assets, while some investor groups warned that the plans would allow executives to cover up losses. The rules change spurred Thursday's stock-market rally.
For the most part, the board ratified proposals it had put out for comment two weeks earlier, including changes that would lessen the need for banks to take an earnings hit when assets run into trouble. Financial stocks led the market up in the morning on the expectation that the rules would be approved, but faded and ended roughly on a par with the broader market.
More
Mark-to-Market Changes May Have Muted Impact on Banks
04/02/09'Mark" Rule Change May Subvert Treasury Plan
04/01/09Heard on the Street: Accounting Rules Should Avoid Impairment
04/01/09Bankers argue that the "mark-to-market" principle of valuing assets at market prices is sometimes flawed because markets have ceased to function. They say that can lead to unnecessary alarm about the financial system's stability, an argument lawmakers have echoed.
One member of the five-member accounting standards board tried to address criticisms that the body had bowed to political pressure.
"We are an independent standard setter and it's important that we maintain our independence," said Lawrence Smith. But he said the board can't "ignore what's going on around us" as banks plead for help.
Under one of the changes adopted Thursday, the definition of an asset that is "other than temporarily impaired" will change. Once an asset gets that designation, it triggers a write-down in value that feeds through to the bottom line. In the case of banks, that may put capital below regulatory requirements.
Currently, to avoid the designation, management must assert that it has the intent and ability to hold on to the asset until its value recovers. Under the new rule, adopted by a 3-2 vote, companies could avoid the classification by stating that they intend to hold on to the asset and that it is more likely than not that they will, a looser standard.
Patrick Finnegan, director of financial reporting policy for the CFA Institute, said the move gives managers too much room to fudge the truth. "Financial statements are not there to reflect management's assumptions.," said Mr. Finnegan, whose group runs a self-study program for financial analysts.
Getty Images
Bank stocks like Citigroup were higher after the FASB eased rules to allow companies more leeway in valuing their investments.
The new rule draws a distinction that is especially relevant to mortgage-backed securities. The market for these securities has largely dried up, but banks say that most homeowners still are making mortgage payments.
The rule says that once an asset is other than temporarily impaired, only losses related to the underlying creditworthiness would affect earnings and regulatory capital. Losses attributed to market conditions would be disclosed and accounted for elsewhere.
Business groups mostly commended the changes, but said they aren't enough. "Significant problems remain with asset valuations, and guidance is needed for auditors," the U.S. Chamber of Commerce said in a statement.
Some investors were relieved that FASB backtracked from one of its proposals, which would have allowed companies to ignore all market prices when coming up with a value for securities once a market was determined to be inactive.
FASB instead said that more weight should be placed on transactions when a market is operating in an orderly fashion and less when the market is less active.
Write to Kara Scannell at kara.scannell@wsj.com
http://online.wsj.com/article/SB123867739560682309.html#printMode
FASB Eases Mark-to-Market Rules
By KARA SCANNELL
U.S. accounting rule makers made it easier for banks to limit losses, but in an unexpected move they bowed to critics and backtracked on one proposal that would have let companies ignore market prices in some cases.
The vote by the Financial Accounting Standards Board followed a debate in which members of Congress pushed for steps to help banks weighed down by troubled assets, while some investor groups warned that the plans would allow executives to cover up losses. The rules change spurred Thursday's stock-market rally.
For the most part, the board ratified proposals it had put out for comment two weeks earlier, including changes that would lessen the need for banks to take an earnings hit when assets run into trouble. Financial stocks led the market up in the morning on the expectation that the rules would be approved, but faded and ended roughly on a par with the broader market.
More
Mark-to-Market Changes May Have Muted Impact on Banks
04/02/09'Mark" Rule Change May Subvert Treasury Plan
04/01/09Heard on the Street: Accounting Rules Should Avoid Impairment
04/01/09Bankers argue that the "mark-to-market" principle of valuing assets at market prices is sometimes flawed because markets have ceased to function. They say that can lead to unnecessary alarm about the financial system's stability, an argument lawmakers have echoed.
One member of the five-member accounting standards board tried to address criticisms that the body had bowed to political pressure.
"We are an independent standard setter and it's important that we maintain our independence," said Lawrence Smith. But he said the board can't "ignore what's going on around us" as banks plead for help.
Under one of the changes adopted Thursday, the definition of an asset that is "other than temporarily impaired" will change. Once an asset gets that designation, it triggers a write-down in value that feeds through to the bottom line. In the case of banks, that may put capital below regulatory requirements.
Currently, to avoid the designation, management must assert that it has the intent and ability to hold on to the asset until its value recovers. Under the new rule, adopted by a 3-2 vote, companies could avoid the classification by stating that they intend to hold on to the asset and that it is more likely than not that they will, a looser standard.
Patrick Finnegan, director of financial reporting policy for the CFA Institute, said the move gives managers too much room to fudge the truth. "Financial statements are not there to reflect management's assumptions.," said Mr. Finnegan, whose group runs a self-study program for financial analysts.
Getty Images
Bank stocks like Citigroup were higher after the FASB eased rules to allow companies more leeway in valuing their investments.
The new rule draws a distinction that is especially relevant to mortgage-backed securities. The market for these securities has largely dried up, but banks say that most homeowners still are making mortgage payments.
The rule says that once an asset is other than temporarily impaired, only losses related to the underlying creditworthiness would affect earnings and regulatory capital. Losses attributed to market conditions would be disclosed and accounted for elsewhere.
Business groups mostly commended the changes, but said they aren't enough. "Significant problems remain with asset valuations, and guidance is needed for auditors," the U.S. Chamber of Commerce said in a statement.
Some investors were relieved that FASB backtracked from one of its proposals, which would have allowed companies to ignore all market prices when coming up with a value for securities once a market was determined to be inactive.
FASB instead said that more weight should be placed on transactions when a market is operating in an orderly fashion and less when the market is less active.
Write to Kara Scannell at kara.scannell@wsj.com
Monday, March 23, 2009
Create river greenway without busting the bank
This editorial appeared in the March 19 edition of the Riverhead News Reivew. We could not have said it better ourselves.
Create river greenway without busting the bank
The town is about to close on its $1.25 million purchase of the old Weeping Willow Motel property on West Main Street. The buildings on the site, which runs along the Peconic River, will be razed and the property preserved as open space. It's a welcome move, as it will open up a chunk of downtown's hidden riverfront and enhance the western gateway to Riverhead. The acquisition cost is being funded by the town's Community Preservation Fund, out of the 2 percent real estate transfer tax.
There are many such properties and structures hiding the Peconic River from view -- many of them dilapidated eyesores. We have long held the belief that cleaning up the West Main Street corridor is essential to downtown revitalization. Removing the Weeping Willow is a very good start.
But consider the cost of such a cleanup. While we believe property taxes lost to preservation would eventually be recouped by economic development in a revitalized downtown, simply acquiring all the properties needed to create a true Peconic River greenway carries a huge price tag -- easily mounting to tens of millions of dollars -- that the public treasury can ill afford, especially not in the current economic climate -- or any time soon, for that matter.
But we can provide the incentive for the private sector to create the greenway for the public benefit. Riverhead Town, through zoning, could allow for denser residential use of the north side of West Main Street, with conditions based on the purchase and transfer of development rights from parcels on the south side of the street. Developers of multifamily units on the north side of the street would thus fund the preservation of open space on the south side along the riverfront. West Main Street would become an attractive gateway to downtown, lined by a lovely riverfront greenway on the south and upscale condos, co-ops and rental units on the north -- perhaps three stories high, with river views.
But state DEC bureaucrats in Stony Brook and Albany will never let this happen. The Peconic River is "protected" by the Wild, Scenic and Recreational Rivers Act, which essentially makes development of such a vision impossible. The much ballyhooed change to a "community river" designation (from its present "recreational river" status) is a red herring. It will not, contrary to popular myth, significantly ease development restrictions in this part of the Peconic River corridor. It simply eliminates the requirement for a DEC rivers act permit for new single-family homes and minor (one- and two-lot) land subdivisions in the river corridor. The law will continue to limit multifamily dwellings to one dwelling unit per acre. So a would-be developer of a five-unit complex would have to have a five-acre site. It's not going to happen.
So the hodgepodge collection of buildings on both sides of West Main Street are destined to remain there until they collapse, or until taxpayers cough up enough dough to buy the riverfront, piece by piece.
Create river greenway without busting the bank
The town is about to close on its $1.25 million purchase of the old Weeping Willow Motel property on West Main Street. The buildings on the site, which runs along the Peconic River, will be razed and the property preserved as open space. It's a welcome move, as it will open up a chunk of downtown's hidden riverfront and enhance the western gateway to Riverhead. The acquisition cost is being funded by the town's Community Preservation Fund, out of the 2 percent real estate transfer tax.
There are many such properties and structures hiding the Peconic River from view -- many of them dilapidated eyesores. We have long held the belief that cleaning up the West Main Street corridor is essential to downtown revitalization. Removing the Weeping Willow is a very good start.
But consider the cost of such a cleanup. While we believe property taxes lost to preservation would eventually be recouped by economic development in a revitalized downtown, simply acquiring all the properties needed to create a true Peconic River greenway carries a huge price tag -- easily mounting to tens of millions of dollars -- that the public treasury can ill afford, especially not in the current economic climate -- or any time soon, for that matter.
But we can provide the incentive for the private sector to create the greenway for the public benefit. Riverhead Town, through zoning, could allow for denser residential use of the north side of West Main Street, with conditions based on the purchase and transfer of development rights from parcels on the south side of the street. Developers of multifamily units on the north side of the street would thus fund the preservation of open space on the south side along the riverfront. West Main Street would become an attractive gateway to downtown, lined by a lovely riverfront greenway on the south and upscale condos, co-ops and rental units on the north -- perhaps three stories high, with river views.
But state DEC bureaucrats in Stony Brook and Albany will never let this happen. The Peconic River is "protected" by the Wild, Scenic and Recreational Rivers Act, which essentially makes development of such a vision impossible. The much ballyhooed change to a "community river" designation (from its present "recreational river" status) is a red herring. It will not, contrary to popular myth, significantly ease development restrictions in this part of the Peconic River corridor. It simply eliminates the requirement for a DEC rivers act permit for new single-family homes and minor (one- and two-lot) land subdivisions in the river corridor. The law will continue to limit multifamily dwellings to one dwelling unit per acre. So a would-be developer of a five-unit complex would have to have a five-acre site. It's not going to happen.
So the hodgepodge collection of buildings on both sides of West Main Street are destined to remain there until they collapse, or until taxpayers cough up enough dough to buy the riverfront, piece by piece.
Thursday, March 19, 2009
Long Island Population declines
With all its wonderful attributes, Long Island's biggest problem should be dealing with all the people who WANT to move here. Instead we see population declines as delineated in Newsday this morning. Click here for the full story.
Friday, February 20, 2009
What to do with all those dead people?
Editor's note: News12 ran a story on Monday about environmentalists protesting the Diocese of Rockville Centre's decision to use property it owns as a cemetery. See the story at the end of this piece for more details.
By Michael Watt
When I first saw about a dozen or so people, led by Dick Amper and Adrienne Esposito, on the news protesting outside the Diocese of Rockville Centre about the Church’s plans to use its property in Old Westbury as a cemetery I thought, “these people have finally gone too far.”
Then, being a fair and open-minded fellow, I thought about it some more and realized that the protestors had a point. It would be a sin to allow Long Island’s deceased a rightful resting place.
Look at the facts. Cemetery proponents argue that dead people do not produce those nefarious school children who wreak havoc on local school districts. Of course they don’t. But what about the families of the dead people? They have children, and more often than not those families drive through local neighborhoods to get to the cemetery. Is the Old Westbury school district ready to run the risk of dozens of families deciding Old Westbury might be a nice place to raise a family as they drive through town on the way to the cemetery?
And what about those funeral processions? Sometimes as many as two dozen cars can be seen following a gas-guzzling limousine and a hearse. Most of those cars have only one or two people in them, tops. And the real problems start once those processions get to the cemetery. Noise-level studies have shown that grieving families at grave-sites, especially the “ethnics” from Queens, generate enough of a racket to interfere with the mating habits of the hoot-eared grey spotted owl. And the less said about the Irish and THEIR funerals, the better.
The protestors also have legitimate concerns about over-crowding. Surveys show that the 65 and over crowd is the fastest growing segment of Long Island’s population. Where are they going to go? To the cemetery no doubt, at least eventually. And don’t let that “senior citizens make the best residents” argument fool you. Go to any cemetery on Long Island and there is a good chance you will find individuals under the age of 65. Try as you might, there’s no realistic way to enforce the “nobody under 65 is allowed to die” rule.
Now, a case could be made for the need to honor those American men and women who saved the world for democracy by winning World War II. But was winning World War II really such a great thing? The Germans are wonderful when it comes to preserving open space – you can travel for miles in Germany and see nothing but beautiful vistas interrupted only by the occasional castle. And does anyone do more with less space than the Japanese? Besides, when those same “veterans” were done “winning” the war, the vast majority of them then came to Long Island and plowed over the beautiful potato farms of Levittown for their own selfish needs. Need we remind anyone of all the construction that had to happen to accommodate those people?
If not cemeteries, then what? We could advocate for cremation, but that creates a whole new problem: what to do with all that ash. We could ship it to Brookhaven but that might undercut the town of Babylon’s price points at its landfill. Perhaps we could put the deceased into those satellites that are constantly being shot into space. Wouldn’t that be a creative use of all that available space in those rockets?
The irony in all this is that if the protestors had their way only the people who already have their houses on Long Island would be allowed to live here. It almost doesn’t matter where they get buried because their descendants will have moved to other regions and therefore unable to visit them when they’re gone anyway.
Opponents call Old Westbury cemetery a grave mistake
02/16/09) OLD WESTBURY - Environmentalists are lining up against a plan to build a 97-acre cemetery in Old Westbury, saying it’s dangerous to put grave sites over the drinking supply.
The Catholic Church wants to build a new 42,000-plot cemetery on land located between Hitchcock Lane and Powell's Lane off Jericho Turnpike in Old Westbury.
Adrienne Esposito, of Citizens Campaign for the Environment, says the proposed cemetery is within the state-designated ground water protection area. She says corpses and coffins leak bacteria and lethal toxins like formaldehyde, which ultimately will end up in the water supply.
The diocese claims the environmentalists don't understand the chemistry involved, and have no proof that toxins will leak.
The Village of Old Westbury will hold a public hearing about the proposed cemetery on Feb. 23.
Public Hearing
Monday, February 23
7 p.m.
Old Westbury Village Hall
1 Store Hill Road
Old Westbury, NY 11568
By Michael Watt
When I first saw about a dozen or so people, led by Dick Amper and Adrienne Esposito, on the news protesting outside the Diocese of Rockville Centre about the Church’s plans to use its property in Old Westbury as a cemetery I thought, “these people have finally gone too far.”
Then, being a fair and open-minded fellow, I thought about it some more and realized that the protestors had a point. It would be a sin to allow Long Island’s deceased a rightful resting place.
Look at the facts. Cemetery proponents argue that dead people do not produce those nefarious school children who wreak havoc on local school districts. Of course they don’t. But what about the families of the dead people? They have children, and more often than not those families drive through local neighborhoods to get to the cemetery. Is the Old Westbury school district ready to run the risk of dozens of families deciding Old Westbury might be a nice place to raise a family as they drive through town on the way to the cemetery?
And what about those funeral processions? Sometimes as many as two dozen cars can be seen following a gas-guzzling limousine and a hearse. Most of those cars have only one or two people in them, tops. And the real problems start once those processions get to the cemetery. Noise-level studies have shown that grieving families at grave-sites, especially the “ethnics” from Queens, generate enough of a racket to interfere with the mating habits of the hoot-eared grey spotted owl. And the less said about the Irish and THEIR funerals, the better.
The protestors also have legitimate concerns about over-crowding. Surveys show that the 65 and over crowd is the fastest growing segment of Long Island’s population. Where are they going to go? To the cemetery no doubt, at least eventually. And don’t let that “senior citizens make the best residents” argument fool you. Go to any cemetery on Long Island and there is a good chance you will find individuals under the age of 65. Try as you might, there’s no realistic way to enforce the “nobody under 65 is allowed to die” rule.
Now, a case could be made for the need to honor those American men and women who saved the world for democracy by winning World War II. But was winning World War II really such a great thing? The Germans are wonderful when it comes to preserving open space – you can travel for miles in Germany and see nothing but beautiful vistas interrupted only by the occasional castle. And does anyone do more with less space than the Japanese? Besides, when those same “veterans” were done “winning” the war, the vast majority of them then came to Long Island and plowed over the beautiful potato farms of Levittown for their own selfish needs. Need we remind anyone of all the construction that had to happen to accommodate those people?
If not cemeteries, then what? We could advocate for cremation, but that creates a whole new problem: what to do with all that ash. We could ship it to Brookhaven but that might undercut the town of Babylon’s price points at its landfill. Perhaps we could put the deceased into those satellites that are constantly being shot into space. Wouldn’t that be a creative use of all that available space in those rockets?
The irony in all this is that if the protestors had their way only the people who already have their houses on Long Island would be allowed to live here. It almost doesn’t matter where they get buried because their descendants will have moved to other regions and therefore unable to visit them when they’re gone anyway.
Opponents call Old Westbury cemetery a grave mistake
02/16/09) OLD WESTBURY - Environmentalists are lining up against a plan to build a 97-acre cemetery in Old Westbury, saying it’s dangerous to put grave sites over the drinking supply.
The Catholic Church wants to build a new 42,000-plot cemetery on land located between Hitchcock Lane and Powell's Lane off Jericho Turnpike in Old Westbury.
Adrienne Esposito, of Citizens Campaign for the Environment, says the proposed cemetery is within the state-designated ground water protection area. She says corpses and coffins leak bacteria and lethal toxins like formaldehyde, which ultimately will end up in the water supply.
The diocese claims the environmentalists don't understand the chemistry involved, and have no proof that toxins will leak.
The Village of Old Westbury will hold a public hearing about the proposed cemetery on Feb. 23.
Public Hearing
Monday, February 23
7 p.m.
Old Westbury Village Hall
1 Store Hill Road
Old Westbury, NY 11568
Saturday, February 14, 2009
NAHB: New Data Confirms Low Number of School-Aged Children in Multifamily Building
New Data Confirms Low Number of School-Aged Children in Multifamily
Building new multifamily housing tends to increase local demand for public education, but the real question is by how much. Results published in NAHB’s Multifamily Market Outlook in 2004 showed that there were, at that time, considerably fewer children per unit in multifamily housing compared to the number in single family detached units (click here for report).
Those results were based on the HUD/Census Bureau American Housing Survey (AHS). It’s now possible to revisit this issue and see if the single family/multifamily results can be replicated using a new data source—the American Community Survey (ACS), an ongoing annual survey conducted by the Census Bureau that is designed to replace the long form decennial Census questionnaire. Compared to the AHS, the ACS produces data more frequently (every year instead of every other year) and is based on a much larger sample. The weakness of the ACS is that it contains relatively little information on specific characteristics of multifamily and other types of housing units.
Nevertheless, the ACS contains enough information that it can be used to investigate the number of school-aged children in different categories of housing of units. Results from the most recent ACS data available (2007) are consistent with the AHS results reported in 2004. Per unit, households living in multifamily buildings tend to have fewer children than other types of housing structures, and the number of school-age children tends to be particularly low in larger multifamily structures, and in multifamily condominiums.
The Public Education Budget
Education generally accounts for the largest share of local government budgets. Across all local governments in the U.S., the expenditure on public education is about $433 billion—far more than other major categories such as social services, utilities, public safety, and transportation, etc., according to the 2002 Census of Governments (Figure 1). During the fiscal year 2001 to 2002, local governments in the U.S. spent a little over 1.1 trillion in total, and the largest share is on public education. Among the $433 billion on education, $407 billion is spent on elementary and secondary schools. Even the second largest budget item—social services—only account for $120 billion dollars. In contrast, only $28 billion is spent on housing and community development.
Although residential development has an impact on the demand for public education, it is important to remember that school enrollment can also rise as a result of natural population growth or households with different numbers of school-age children moving into and out of existing units. Moreover, there are many other factors that tend to mitigate the impact of new residential construction on local school system. For one, in most parts of the country, when new households move into an area, school districts typically receive additional state and federal government aid.
Also, some parents choose to send their children to private schools. According to the National Center for Education Statistics (NCES), there are about 11% children enrolled in private elementary and secondary schools nationally in 2005, and this percentage is projected to be quite stable in 2006 and 2007 as well. Since local governments rarely subsidize private schools, this tends to further reduce public school expenses, although the extent to which that occurs varies from place to place. There were about 2.2% school-age children receiving home schooling in 2003 according to the NCES statistics.
Finally, if there is excess capacity in the school system or economies of scale exist, cost per pupil goes down as enrollment rises.
Fewer Children in Multifamily
As shown by the 2007 ACS, there are 50.9 school-age children (age 5 to 18) for every 100 households in the U.S., illustrated in Table 1. However, the average number of school-age children varies substantially across structure types.
As illustrated in Figure 2, there are 32.6 school-age children per 100 households in multifamily structures, compared to 58.8 in single family detached homes, 42.9 in single family attached homes, and 50.2 in manufactured housing units. A traditional explanation for the differences is that families with children have a preference toward homes with back yards that the children can play in.
Within the category of multifamily housing, larger apartment buildings tend to have fewer number of school-age children on average than small, garden-style apartments. There are about 43.1 school-age children per 100 households in structures with 2 to 4 units, compared to 33.1 in multifamily structures with 5 to 19 units, and 20.8 in 20+ unit structures.
Renters Compared to Owners
Within a given structure type, renters have more children than owners, but the magnitude of the difference varies by structure type (Figure 3). In multifamily buildings with 2 to 4 units, there are 45.1 school-age children per 100 renter households and only 34.9 per 100 owner households. In multifamily buildings with 5 to 19 units, these numbers become 35.4 per 100 renter households versus 14.3 per 100 owner households. Fewer numbers of school-age children exist in 20+ unit multifamily buildings. A similar pattern is observed in other structure types such as single family detached, single family attached and manufactured housing.
As noted above, there tends to be fewer children per household in larger apartment buildings. If this is combined with the effect of ownership status, it produces an even larger spread between 45 children per 100 renters in 2 to 4 unit multifamily buildings and fewer than 11 per 100 owners of condos in 20+ unit buildings.
Recent Movers
In multifamily structures, households who stay put tend to have more school-age children than households that have moved in recently (Figures 4 and 5). This is not generally true for other structure types, however. Recent movers into single-family detached homes have, on average, 67.9 school-age children, which is much larger than 57.9 per 100 non-movers in single family detached homes.
In Table 1, the highest number of children per 100 households is 90.8, and this is for households who have recently moved into newly constructed single-family detached rental units. The lowest number is 3.2 for newly constructed 20+ unit condominiums. .
Conclusion
On average, there are fewer school-age children in multifamily structures than in other residential structure types. There are even fewer in particular types of multifamily structures—such as condos, or buildings with more than 20 units. Therefore, when local governments make plans for new residential development, it is important that they take these factors into consideration when estimating the impact on their education budgets.
To get a complete picture of the budgetary impacts, local governments should also take the benefits of new construction—including income and jobs for local residents, as well as increased taxes and other forms of government revenue—into account. Estimates of these local economic benefits for general multifamily housing in a typical metropolitan area were last published in the October 2005 issue of Multifamily Market Outlook. Estimates of the benefits of tax-credit multifamily development were last published in the October 2007 issue.
Building new multifamily housing tends to increase local demand for public education, but the real question is by how much. Results published in NAHB’s Multifamily Market Outlook in 2004 showed that there were, at that time, considerably fewer children per unit in multifamily housing compared to the number in single family detached units (click here for report).
Those results were based on the HUD/Census Bureau American Housing Survey (AHS). It’s now possible to revisit this issue and see if the single family/multifamily results can be replicated using a new data source—the American Community Survey (ACS), an ongoing annual survey conducted by the Census Bureau that is designed to replace the long form decennial Census questionnaire. Compared to the AHS, the ACS produces data more frequently (every year instead of every other year) and is based on a much larger sample. The weakness of the ACS is that it contains relatively little information on specific characteristics of multifamily and other types of housing units.
Nevertheless, the ACS contains enough information that it can be used to investigate the number of school-aged children in different categories of housing of units. Results from the most recent ACS data available (2007) are consistent with the AHS results reported in 2004. Per unit, households living in multifamily buildings tend to have fewer children than other types of housing structures, and the number of school-age children tends to be particularly low in larger multifamily structures, and in multifamily condominiums.
The Public Education Budget
Education generally accounts for the largest share of local government budgets. Across all local governments in the U.S., the expenditure on public education is about $433 billion—far more than other major categories such as social services, utilities, public safety, and transportation, etc., according to the 2002 Census of Governments (Figure 1). During the fiscal year 2001 to 2002, local governments in the U.S. spent a little over 1.1 trillion in total, and the largest share is on public education. Among the $433 billion on education, $407 billion is spent on elementary and secondary schools. Even the second largest budget item—social services—only account for $120 billion dollars. In contrast, only $28 billion is spent on housing and community development.
Although residential development has an impact on the demand for public education, it is important to remember that school enrollment can also rise as a result of natural population growth or households with different numbers of school-age children moving into and out of existing units. Moreover, there are many other factors that tend to mitigate the impact of new residential construction on local school system. For one, in most parts of the country, when new households move into an area, school districts typically receive additional state and federal government aid.
Also, some parents choose to send their children to private schools. According to the National Center for Education Statistics (NCES), there are about 11% children enrolled in private elementary and secondary schools nationally in 2005, and this percentage is projected to be quite stable in 2006 and 2007 as well. Since local governments rarely subsidize private schools, this tends to further reduce public school expenses, although the extent to which that occurs varies from place to place. There were about 2.2% school-age children receiving home schooling in 2003 according to the NCES statistics.
Finally, if there is excess capacity in the school system or economies of scale exist, cost per pupil goes down as enrollment rises.
Fewer Children in Multifamily
As shown by the 2007 ACS, there are 50.9 school-age children (age 5 to 18) for every 100 households in the U.S., illustrated in Table 1. However, the average number of school-age children varies substantially across structure types.
As illustrated in Figure 2, there are 32.6 school-age children per 100 households in multifamily structures, compared to 58.8 in single family detached homes, 42.9 in single family attached homes, and 50.2 in manufactured housing units. A traditional explanation for the differences is that families with children have a preference toward homes with back yards that the children can play in.
Within the category of multifamily housing, larger apartment buildings tend to have fewer number of school-age children on average than small, garden-style apartments. There are about 43.1 school-age children per 100 households in structures with 2 to 4 units, compared to 33.1 in multifamily structures with 5 to 19 units, and 20.8 in 20+ unit structures.
Renters Compared to Owners
Within a given structure type, renters have more children than owners, but the magnitude of the difference varies by structure type (Figure 3). In multifamily buildings with 2 to 4 units, there are 45.1 school-age children per 100 renter households and only 34.9 per 100 owner households. In multifamily buildings with 5 to 19 units, these numbers become 35.4 per 100 renter households versus 14.3 per 100 owner households. Fewer numbers of school-age children exist in 20+ unit multifamily buildings. A similar pattern is observed in other structure types such as single family detached, single family attached and manufactured housing.
As noted above, there tends to be fewer children per household in larger apartment buildings. If this is combined with the effect of ownership status, it produces an even larger spread between 45 children per 100 renters in 2 to 4 unit multifamily buildings and fewer than 11 per 100 owners of condos in 20+ unit buildings.
Recent Movers
In multifamily structures, households who stay put tend to have more school-age children than households that have moved in recently (Figures 4 and 5). This is not generally true for other structure types, however. Recent movers into single-family detached homes have, on average, 67.9 school-age children, which is much larger than 57.9 per 100 non-movers in single family detached homes.
In Table 1, the highest number of children per 100 households is 90.8, and this is for households who have recently moved into newly constructed single-family detached rental units. The lowest number is 3.2 for newly constructed 20+ unit condominiums. .
Conclusion
On average, there are fewer school-age children in multifamily structures than in other residential structure types. There are even fewer in particular types of multifamily structures—such as condos, or buildings with more than 20 units. Therefore, when local governments make plans for new residential development, it is important that they take these factors into consideration when estimating the impact on their education budgets.
To get a complete picture of the budgetary impacts, local governments should also take the benefits of new construction—including income and jobs for local residents, as well as increased taxes and other forms of government revenue—into account. Estimates of these local economic benefits for general multifamily housing in a typical metropolitan area were last published in the October 2005 issue of Multifamily Market Outlook. Estimates of the benefits of tax-credit multifamily development were last published in the October 2007 issue.
Friday, February 13, 2009
Americans may be getting more realistic about their home values
This is from Marketwatch.com
More than half of homeowners recently surveyed by Zillow.com believe their home lost value in 2008, a sign that Americans may be getting more realistic about what their homes are currently worth.
Fifty-seven percent of the 1,573 homeowners who participated in the survey in January said that their home lost value during the year, compared with 38% who said their home value was declining in the second quarter of 2008.
In reality, 76% percent of U.S. homes lost value last year, according to Zillow.
"It's clear that the 'not my house' sentiment that was so prevalent in earlier surveys is waning, and homeowners are opening their eyes to the unfortunate reality of significant losses in home values across most of the country," said Stan Humphries, Zillow's vice president of data and analytics for Zillow, in a news release.
Still, many think that the worst may be over. More than two-thirds believe their home's value will increase or stay the same in the first half of this year, according to the survey.
"There's a curious optimism for homeowners when asked about the future -- most seem to believe we've hit a bottom and the worst has passed. Unfortunately, the data tells another story. With year-over-year home value losses continuing to accelerate, most areas of the country will see housing values get worse before they begin to stabilize," Humphries said.
Get more real estate news in this week's pages, including an audio report on why job losses will accelerate foreclosures this year. Also read the latest ideas floating around Washington on how to save homeowners from foreclosure.
It has taken awhile for Americans to accept that their homes are decreasing in value. But according to the Zillow survey, many still see the glass half full for 2009 -- at least when it comes to the value of their own home.
-- Amy Hoak , Real Estate writer
More than half of homeowners recently surveyed by Zillow.com believe their home lost value in 2008, a sign that Americans may be getting more realistic about what their homes are currently worth.
Fifty-seven percent of the 1,573 homeowners who participated in the survey in January said that their home lost value during the year, compared with 38% who said their home value was declining in the second quarter of 2008.
In reality, 76% percent of U.S. homes lost value last year, according to Zillow.
"It's clear that the 'not my house' sentiment that was so prevalent in earlier surveys is waning, and homeowners are opening their eyes to the unfortunate reality of significant losses in home values across most of the country," said Stan Humphries, Zillow's vice president of data and analytics for Zillow, in a news release.
Still, many think that the worst may be over. More than two-thirds believe their home's value will increase or stay the same in the first half of this year, according to the survey.
"There's a curious optimism for homeowners when asked about the future -- most seem to believe we've hit a bottom and the worst has passed. Unfortunately, the data tells another story. With year-over-year home value losses continuing to accelerate, most areas of the country will see housing values get worse before they begin to stabilize," Humphries said.
Get more real estate news in this week's pages, including an audio report on why job losses will accelerate foreclosures this year. Also read the latest ideas floating around Washington on how to save homeowners from foreclosure.
It has taken awhile for Americans to accept that their homes are decreasing in value. But according to the Zillow survey, many still see the glass half full for 2009 -- at least when it comes to the value of their own home.
-- Amy Hoak , Real Estate writer
Tuesday, February 3, 2009
Citigroup to deploy $36.5 billion to boost lending
This comes from today's LIBN "Flash Report."
http://libn.com/blog/2009/02/03/citigroup-to-deploy-365-billion-to-boost-lending/
Citigroup, under pressure to increase its lending, says it will spend $36.5 billion to issue mortgages, make credit card loans and buy distressed assets in the tight credit markets in the coming months.
The decision arrives after the bank received $45 billion in capital from the federal government in two installments late last year, and taxpayers’ questions mounted about the use of that money.
In a report reviewed by The Associated Press that Citigroup Inc. plans to release Tuesday morning, the bank detailed how it is boosting lending efforts by using funds from the Troubled Assets Relief Program, or TARP.
It’s not that the $45 billion in TARP is being doled out by Citigroup directly to borrowers. Rather, having the extra capital allows the bank to borrow more money from various funding sources, and then lend that money out to others. A bank makes money by borrowing cheaply for the short-term and lending at higher rates for the long-term; if a bank has no capital, other institutions and investors won’t lend to it.
So while Citigroup says it will deploy $36.5 billion in the coming months as a result of TARP, that figure could grow substantially should the funding markets improve.
“Our responsibility is to put these funds to work quickly, prudently and transparently to increase available lending and liquidity,” said CEO Vikram Pandit in a statement included in the report.
“TARP capital will not be used for compensation and bonuses, dividend payments, lobbying or government relations activities, or any activities related to market, advertising and corporate sponsorship,” Pandit said.
After considering $51.2 billion worth of proposals from its various arms, the bank said it approved $36.5 billion. That includes $25.7 billion in U.S. residential mortgage activities; $5.8 billion in credit card lending; $2.5 billion in personal and business loans; $1.5 billion in corporate loan activity; and $1 billion in student loans.
The $36.5 billion deployment is in addition to the $75 billion in new loans that Citigroup made in the fourth quarter. It also does not include the $10 billion Citigroup used in November to buy pools of mortgages secured by Fannie Mae.
Of the $25.7 billion Citigroup set aside for U.S. residential mortgage activities, $10 billion will go toward buying securities backed by mortgages that conform to Fannie Mae and Freddie Mac standards. Another $7.5 billion will be used to buy prime home mortgages in the secondary markets. The final $8.2 billion will be mortgages issued directly to aspiring homeowners — including mortgages with values that exceed the limits set for government-sponsored loans.
Citigroup will be making more loans than it would have without TARP, but said in the report it will not “take excessive risk with the capital the American public and other investors have entrusted to the company.”
The bank will continue to read proposals for increased lending from its various divisions, and plans to issue quarterly reports on TARP use.
While TARP will be used to back lending efforts, Citigroup’s expenses will come out of its cash flow, the bank said.
The government has used TARP money, in many cases, to buy preferred stock in banks.
Where TARP capital sits on banks’ books, however, is just a technicality to many of Wall Street’s critics, who have harshly excoriated banks for their spending decisions.
New York state Comptroller Thomas DiNapoli reported last week that Wall Street spent $18.4 billion on bonuses for 2008; President Barack Obama called the payouts “shameful.”
Citigroup has been criticized for its corporate jets — most recently, the fact that Citigroup’s former CEO Sanford “Sandy” Weill, as a consultant to the company, had a contract that allowed him to use the jet for personal trips. (Weill and Citigroup last year agreed to terminate his consulting contract in April, and Weill on Sunday night said in a statement he would immediately stop using the corporate jet.)
Citigroup’s announcement about TARP use comes as the government tries to figure out how to help the nation’s ailing banks so they can lend more. Treasury Secretary Timothy Geithner is expected to announce new plans for rescuing the financial sector in a speech next week.
Banks are not lending massively because of three factors: Demand for loans is down due to the weak economy; there are fewer creditworthy borrowers in the weak economy; and the loans the banks already hold are expected to bring big losses in the coming quarters.
This is why banks’ cash balances have jumped by $800 billion to $1.1 trillion since August, pointed out Miller Tabak & Co. analyst Tony Crescenzi in a note last week. Crescenzi said the idea of a “bad bank,” or “aggregator bank” — which would take the bad assets off banks’ balance sheets — could encourage banks to boost lending.
Another option is having the Federal Deposit Insurance Corp. guarantee more securities issued by financial institutions.
The Federal Reserve in its quarterly survey of bank lending practices released Monday found that nearly 60 percent of banks said they tightened lending standards on credit card and other consumer loans, about the same portion as in the previous survey released in early November. About 80 percent of domestic banks said they tightened lending standards on commercial real-estate loans, slightly less than the roughly 85 percent that reported doing so in the previous survey.
In January, Citigroup reported a fourth-quarter loss of $8.29 billion — its fifth straight quarterly deficit — and announced that it would be splitting into two parts. One portion, Citicorp, will focus on traditional banking around the world, while the other, Citi Holdings, will manage the company’s riskier assets and tougher-to-run ventures.
The company has also made some significant changes at the board level.
Robert Rubin, a former U.S. Treasury Secretary, in January said he would be retiring from Citigroup’s board. Less than two weeks later, Win Bischoff, chairman since December 2007, announced his retirement, too. Longtime board member Richard Parsons, the former CEO of Time Warner Inc., became the new Citigroup chairman.
http://libn.com/blog/2009/02/03/citigroup-to-deploy-365-billion-to-boost-lending/
Citigroup, under pressure to increase its lending, says it will spend $36.5 billion to issue mortgages, make credit card loans and buy distressed assets in the tight credit markets in the coming months.
The decision arrives after the bank received $45 billion in capital from the federal government in two installments late last year, and taxpayers’ questions mounted about the use of that money.
In a report reviewed by The Associated Press that Citigroup Inc. plans to release Tuesday morning, the bank detailed how it is boosting lending efforts by using funds from the Troubled Assets Relief Program, or TARP.
It’s not that the $45 billion in TARP is being doled out by Citigroup directly to borrowers. Rather, having the extra capital allows the bank to borrow more money from various funding sources, and then lend that money out to others. A bank makes money by borrowing cheaply for the short-term and lending at higher rates for the long-term; if a bank has no capital, other institutions and investors won’t lend to it.
So while Citigroup says it will deploy $36.5 billion in the coming months as a result of TARP, that figure could grow substantially should the funding markets improve.
“Our responsibility is to put these funds to work quickly, prudently and transparently to increase available lending and liquidity,” said CEO Vikram Pandit in a statement included in the report.
“TARP capital will not be used for compensation and bonuses, dividend payments, lobbying or government relations activities, or any activities related to market, advertising and corporate sponsorship,” Pandit said.
After considering $51.2 billion worth of proposals from its various arms, the bank said it approved $36.5 billion. That includes $25.7 billion in U.S. residential mortgage activities; $5.8 billion in credit card lending; $2.5 billion in personal and business loans; $1.5 billion in corporate loan activity; and $1 billion in student loans.
The $36.5 billion deployment is in addition to the $75 billion in new loans that Citigroup made in the fourth quarter. It also does not include the $10 billion Citigroup used in November to buy pools of mortgages secured by Fannie Mae.
Of the $25.7 billion Citigroup set aside for U.S. residential mortgage activities, $10 billion will go toward buying securities backed by mortgages that conform to Fannie Mae and Freddie Mac standards. Another $7.5 billion will be used to buy prime home mortgages in the secondary markets. The final $8.2 billion will be mortgages issued directly to aspiring homeowners — including mortgages with values that exceed the limits set for government-sponsored loans.
Citigroup will be making more loans than it would have without TARP, but said in the report it will not “take excessive risk with the capital the American public and other investors have entrusted to the company.”
The bank will continue to read proposals for increased lending from its various divisions, and plans to issue quarterly reports on TARP use.
While TARP will be used to back lending efforts, Citigroup’s expenses will come out of its cash flow, the bank said.
The government has used TARP money, in many cases, to buy preferred stock in banks.
Where TARP capital sits on banks’ books, however, is just a technicality to many of Wall Street’s critics, who have harshly excoriated banks for their spending decisions.
New York state Comptroller Thomas DiNapoli reported last week that Wall Street spent $18.4 billion on bonuses for 2008; President Barack Obama called the payouts “shameful.”
Citigroup has been criticized for its corporate jets — most recently, the fact that Citigroup’s former CEO Sanford “Sandy” Weill, as a consultant to the company, had a contract that allowed him to use the jet for personal trips. (Weill and Citigroup last year agreed to terminate his consulting contract in April, and Weill on Sunday night said in a statement he would immediately stop using the corporate jet.)
Citigroup’s announcement about TARP use comes as the government tries to figure out how to help the nation’s ailing banks so they can lend more. Treasury Secretary Timothy Geithner is expected to announce new plans for rescuing the financial sector in a speech next week.
Banks are not lending massively because of three factors: Demand for loans is down due to the weak economy; there are fewer creditworthy borrowers in the weak economy; and the loans the banks already hold are expected to bring big losses in the coming quarters.
This is why banks’ cash balances have jumped by $800 billion to $1.1 trillion since August, pointed out Miller Tabak & Co. analyst Tony Crescenzi in a note last week. Crescenzi said the idea of a “bad bank,” or “aggregator bank” — which would take the bad assets off banks’ balance sheets — could encourage banks to boost lending.
Another option is having the Federal Deposit Insurance Corp. guarantee more securities issued by financial institutions.
The Federal Reserve in its quarterly survey of bank lending practices released Monday found that nearly 60 percent of banks said they tightened lending standards on credit card and other consumer loans, about the same portion as in the previous survey released in early November. About 80 percent of domestic banks said they tightened lending standards on commercial real-estate loans, slightly less than the roughly 85 percent that reported doing so in the previous survey.
In January, Citigroup reported a fourth-quarter loss of $8.29 billion — its fifth straight quarterly deficit — and announced that it would be splitting into two parts. One portion, Citicorp, will focus on traditional banking around the world, while the other, Citi Holdings, will manage the company’s riskier assets and tougher-to-run ventures.
The company has also made some significant changes at the board level.
Robert Rubin, a former U.S. Treasury Secretary, in January said he would be retiring from Citigroup’s board. Less than two weeks later, Win Bischoff, chairman since December 2007, announced his retirement, too. Longtime board member Richard Parsons, the former CEO of Time Warner Inc., became the new Citigroup chairman.
Friday, January 30, 2009
Green Day Has Finally Arrived
NAHB APPLAUDS ANSI APPROVAL OF NATIONAL GREEN BUILDING STANDARD
WASHINGTON, Jan. 29 --The National Green Building Standard for all residential construction work including single-family homes, apartments and condos, land development and remodeling and renovation was approved today by the American National Standards Institute (ANSI).
The approval signals a new era for the nation's builders, remodelers and developers and also provides an extra measure of reassurance for home buyers, said Joe Robson, a home builder in Tulsa, Okla., and Chairman of the National Association of Home Builders (NAHB).
"The National Green Building Standard is now the first and only green building rating system approved by ANSI, making it the benchmark for green homes," said Ron Jones, who chaired the consensus committee charged with developing the standard.
"The standard provides home builders and remodelers with a much more expansive third-party rating system that they can use to achieve green certification under NAHBGreen and the National Green Building Certification Program," said Mike Luzier, CEO of the NAHB Research Center.
The Research Center provides certification for NAHBGreen projects, which until now have only included single-family homes. "Consumers are looking for authentic, verifiable green building practices, and now they'll find them with a true industry consensus standard for residential green building," Luzier said.
The standard defines what green practices can be incorporated into residential development and construction and how home owners can operate and maintain their green homes.
But the National Green Building Standard also provides for flexibility - allowing home builders and home buyers to make green choices based on climate and geography as well as style preferences and budget.
As part of the stringent process required by ANSI, NAHB and the International Code Council gathered a fully inclusive and representative consensus committee composed of a broad spectrum of builders, architects, product manufacturers, regulators and environmental experts. The work of the consensus committee was administered by the NAHB Research Center, an ANSI Accredited Standards Developer.
The consensus committee deliberated the content of the standard for more than a year, held four public hearings and evaluated over 3,000 public comments in the development of the standard.
ABOUT NAHB: The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 200,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for 2009.
WASHINGTON, Jan. 29 --The National Green Building Standard for all residential construction work including single-family homes, apartments and condos, land development and remodeling and renovation was approved today by the American National Standards Institute (ANSI).
The approval signals a new era for the nation's builders, remodelers and developers and also provides an extra measure of reassurance for home buyers, said Joe Robson, a home builder in Tulsa, Okla., and Chairman of the National Association of Home Builders (NAHB).
"The National Green Building Standard is now the first and only green building rating system approved by ANSI, making it the benchmark for green homes," said Ron Jones, who chaired the consensus committee charged with developing the standard.
"The standard provides home builders and remodelers with a much more expansive third-party rating system that they can use to achieve green certification under NAHBGreen and the National Green Building Certification Program," said Mike Luzier, CEO of the NAHB Research Center.
The Research Center provides certification for NAHBGreen projects, which until now have only included single-family homes. "Consumers are looking for authentic, verifiable green building practices, and now they'll find them with a true industry consensus standard for residential green building," Luzier said.
The standard defines what green practices can be incorporated into residential development and construction and how home owners can operate and maintain their green homes.
But the National Green Building Standard also provides for flexibility - allowing home builders and home buyers to make green choices based on climate and geography as well as style preferences and budget.
As part of the stringent process required by ANSI, NAHB and the International Code Council gathered a fully inclusive and representative consensus committee composed of a broad spectrum of builders, architects, product manufacturers, regulators and environmental experts. The work of the consensus committee was administered by the NAHB Research Center, an ANSI Accredited Standards Developer.
The consensus committee deliberated the content of the standard for more than a year, held four public hearings and evaluated over 3,000 public comments in the development of the standard.
ABOUT NAHB: The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 200,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for 2009.
Friday, January 23, 2009
New homes get smaller
This piece is from Friday's Marketwatch.
Say goodbye to McMansions, Americans are buying 'right-sized' homes
By Amy Hoak, MarketWatch
Last update: 7:38 p.m. EST Jan. 22, 2009LAS VEGAS (MarketWatch) -- These days, a bigger home isn't always a better one: Recent research suggests that homes being built today are getting smaller.
The average size of homes started in the third quarter of 2008 was 2,438 square feet, down from 2,629 square feet in the second quarter, according to the U.S. Census Bureau. Similarly, the median size of homes started in the third quarter was 2,090, down from 2,291. The statistics confirm what the housing industry has suspected for a while.
"We've been hearing for a long time 'Why is the home size not declining?'" said Gopal Ahluwalia, vice president of economic research for the National Association of Home Builders. He spoke about the trend at the International Builders' Show, held in Las Vegas this week. Anecdotally, he had heard smaller homes were being built as housing prices tumbled and the economy began to weaken. Still, "we never had data to back it up," he said.
Gayle Butler, editor-in-chief of Better Homes and Gardens, said for many homeowners, it is not so much a matter of downsizing as "right-sizing," giving up big homes with unused space and buying a home that better fits their needs.
"Either by necessity or choice, they're willing to take a step back from the McMansions," she said at the Builders' Show. In fact, according to a survey conducted by the magazine, 32% of participants said they expected their new home to be either somewhat smaller or much smaller then the one they already live in, she said. The magazine's online study involved 733 potential new-home buyers.
Builders are responding to those consumer desires. According to the National Association of Home Builders, 88% of builders surveyed in January said that they are building or planning to build a larger share of smaller homes. Eighty-nine percent said they're planning on building more lower-priced models.
As homes get smaller, home-owners are looking to economize the space they do have. Butler says she is seeing more interest in "Wii-sized spaces" -- family rooms that are flexible enough to accommodate a variety of activities, from video games to fitness systems. Outdoor spaces aren't being wasted either, and outdoor kitchens and entertaining areas continue to rise in popularity, she said.
According to the Better Homes and Gardens study, top priorities in a new home include an affordable price, natural light and comfortable family gathering places. The era of super-sizing may be ending, Butler said, with buyers looking for a home that is "right-sized, organized and economized."
Other consumer housing trends include:
Fewer luxuries. Consumers say they need fewer luxuries in their next home, Butler said. Twenty percent or more of the participants in the survey viewed upgraded landscaping, upgraded finishes such as granite countertops, and luxurious master suites as less important in their next home, she said. High ceilings in main living areas were less important to 35% of those surveyed. There are also fewer fireplaces in new homes: While 62% of new homes completed in 1991 had at least one fireplace in it, 51% had a fireplace in 2007, according to Census statistics.
Green elements. Ninety percent of those who participated in the Better Homes and Gardens survey said they're planning to have energy-efficient heating and cooling systems in their next home and 31% plan to have geo-thermal heat, Butler said. There has also been increased interest in home gardens, with more people wanting to know where their food is grown, said Robin Avni, senior director and consumer strategist for the firm Iconoculture, a cultural trend research firm. "The green theme touches everything in the home, from the food we look to consume, our health concerns in the home, building -- even our furnishings in the home," Avni said.
Getting organized. With smaller spaces, organization systems are continuing their popularity. More entryways are being outfitted for storage, and homeowners often want more functional use of wall space, Butler said. Sixty-nine percent of those surveyed by the magazine said no-space-wasted design and ample storage will take on more importance in their next home.
Practical appliances. Although sales of appliances have been down, freezer sales have been up. The reason: More people are shopping for bargains and freezing what they won't use right away. "Appliance sales have taken a hit ... except the freezer. Which is really all about going back to basics, a very practical kind of living," Avni said. "If you look at your parents and your grandparents, they used to have a freezer -- they used to buy stuff on sale and put it in the freezer and use it for later. It wasn't just run out and buy something that day."
Say goodbye to McMansions, Americans are buying 'right-sized' homes
By Amy Hoak, MarketWatch
Last update: 7:38 p.m. EST Jan. 22, 2009LAS VEGAS (MarketWatch) -- These days, a bigger home isn't always a better one: Recent research suggests that homes being built today are getting smaller.
The average size of homes started in the third quarter of 2008 was 2,438 square feet, down from 2,629 square feet in the second quarter, according to the U.S. Census Bureau. Similarly, the median size of homes started in the third quarter was 2,090, down from 2,291. The statistics confirm what the housing industry has suspected for a while.
"We've been hearing for a long time 'Why is the home size not declining?'" said Gopal Ahluwalia, vice president of economic research for the National Association of Home Builders. He spoke about the trend at the International Builders' Show, held in Las Vegas this week. Anecdotally, he had heard smaller homes were being built as housing prices tumbled and the economy began to weaken. Still, "we never had data to back it up," he said.
Gayle Butler, editor-in-chief of Better Homes and Gardens, said for many homeowners, it is not so much a matter of downsizing as "right-sizing," giving up big homes with unused space and buying a home that better fits their needs.
"Either by necessity or choice, they're willing to take a step back from the McMansions," she said at the Builders' Show. In fact, according to a survey conducted by the magazine, 32% of participants said they expected their new home to be either somewhat smaller or much smaller then the one they already live in, she said. The magazine's online study involved 733 potential new-home buyers.
Builders are responding to those consumer desires. According to the National Association of Home Builders, 88% of builders surveyed in January said that they are building or planning to build a larger share of smaller homes. Eighty-nine percent said they're planning on building more lower-priced models.
As homes get smaller, home-owners are looking to economize the space they do have. Butler says she is seeing more interest in "Wii-sized spaces" -- family rooms that are flexible enough to accommodate a variety of activities, from video games to fitness systems. Outdoor spaces aren't being wasted either, and outdoor kitchens and entertaining areas continue to rise in popularity, she said.
According to the Better Homes and Gardens study, top priorities in a new home include an affordable price, natural light and comfortable family gathering places. The era of super-sizing may be ending, Butler said, with buyers looking for a home that is "right-sized, organized and economized."
Other consumer housing trends include:
Fewer luxuries. Consumers say they need fewer luxuries in their next home, Butler said. Twenty percent or more of the participants in the survey viewed upgraded landscaping, upgraded finishes such as granite countertops, and luxurious master suites as less important in their next home, she said. High ceilings in main living areas were less important to 35% of those surveyed. There are also fewer fireplaces in new homes: While 62% of new homes completed in 1991 had at least one fireplace in it, 51% had a fireplace in 2007, according to Census statistics.
Green elements. Ninety percent of those who participated in the Better Homes and Gardens survey said they're planning to have energy-efficient heating and cooling systems in their next home and 31% plan to have geo-thermal heat, Butler said. There has also been increased interest in home gardens, with more people wanting to know where their food is grown, said Robin Avni, senior director and consumer strategist for the firm Iconoculture, a cultural trend research firm. "The green theme touches everything in the home, from the food we look to consume, our health concerns in the home, building -- even our furnishings in the home," Avni said.
Getting organized. With smaller spaces, organization systems are continuing their popularity. More entryways are being outfitted for storage, and homeowners often want more functional use of wall space, Butler said. Sixty-nine percent of those surveyed by the magazine said no-space-wasted design and ample storage will take on more importance in their next home.
Practical appliances. Although sales of appliances have been down, freezer sales have been up. The reason: More people are shopping for bargains and freezing what they won't use right away. "Appliance sales have taken a hit ... except the freezer. Which is really all about going back to basics, a very practical kind of living," Avni said. "If you look at your parents and your grandparents, they used to have a freezer -- they used to buy stuff on sale and put it in the freezer and use it for later. It wasn't just run out and buy something that day."
Thursday, January 22, 2009
Greetings from Las Vegas
I am back from the International Builders Show in Las Vegas.
The overall tone of the show was somber, at best. There seemed to be plenty of people walking the aisles of the show itself, but the NAHB folks said the expected attendance was only half of the close to 100,000 who participated last year. The common theme among the seminars offered was what you might expect: We all need to hang in there until things get better.
When will they get better? Nobody seems to know, but the conventional wisdom is later this year. There were plenty of whispers about the other banking shoe having yet to drop this year, with more losses coming down the pike. It seems almost inconcievable that the banking industry still has more pain to inflict on the rest of us, but then again so much of what happened in 2008 seemed so inconceivable, doesn't it.
Somebody once said "best way to predict the future is to make it happen." LIBI embraces that philosophy and will do everything it can to make a better future happen for Long Island builders. Stay tuned for new plans to be announced in the near future.
The overall tone of the show was somber, at best. There seemed to be plenty of people walking the aisles of the show itself, but the NAHB folks said the expected attendance was only half of the close to 100,000 who participated last year. The common theme among the seminars offered was what you might expect: We all need to hang in there until things get better.
When will they get better? Nobody seems to know, but the conventional wisdom is later this year. There were plenty of whispers about the other banking shoe having yet to drop this year, with more losses coming down the pike. It seems almost inconcievable that the banking industry still has more pain to inflict on the rest of us, but then again so much of what happened in 2008 seemed so inconceivable, doesn't it.
Somebody once said "best way to predict the future is to make it happen." LIBI embraces that philosophy and will do everything it can to make a better future happen for Long Island builders. Stay tuned for new plans to be announced in the near future.
Thursday, January 15, 2009
Suffolk reveals shovel-ready projects
This is from yesterday's LIBN Report. Click here for the story or read below.
by Michael H. Samuels
Published: January 14th, 2009
Suffolk County has released a list of 19 shovel-ready wastewater and public works projects awaiting federal funding.
The projects listed require $743 million in future planning, construction and repairs, would yield more than 36,000 jobs and boost the local economy by as much as $4.6 billion, according to the county’s public works department.
“It all starts with sewers,” said Suffolk County Legis. Wayne Horsley, chairman of the Wastewater Treatment Task Force. “When you’re talking about growing the economy, smart growth, affordable housing, you can’t do any of that without the proper wastewater infrastructure.
He said more than 70 percent of Suffolk County is still without sewers.
“In a county of 1.5 million people, that’s not a good thing,” Horsley said.
The list includes eight “ready to go” projects and 10 in the pre-planning stage.
The last project is the Bergen Point Outfall Pipe Replacement Project, which needs $150 million in funding and could create up to 7,125 jobs.
The “ready to go” projects are:
The Brookhaven Sewer District
Huntington Sewer District
Northport Village
Patchogue Village/East Patchogue
Port Jefferson Village
Sag Harbor
Smithtown/Kings Park
Wyandanch
The pre-planning projects include:
Bellport
Center Moriches
Lake Ronkonkoma Hub
Mastic/Shirley
Centereach/NY 25 Corridor
Rocky Point
Sayville
Southampton
Yaphank
Horsley said the task force started looking at wastewater projects last year and was asked by Reps. Tim Bishop and Steve Israel to give them a list of those ready for go.
“We didn’t know how bad the economy was going to be, but we knew what the problem was,” Horsley said.
“Now, the issues have come together with real force. Congress is going to be putting together these lists and we’ve let them know that there is nothing more important to Suffolk County than the wastewater treatment issue.”
by Michael H. Samuels
Published: January 14th, 2009
Suffolk County has released a list of 19 shovel-ready wastewater and public works projects awaiting federal funding.
The projects listed require $743 million in future planning, construction and repairs, would yield more than 36,000 jobs and boost the local economy by as much as $4.6 billion, according to the county’s public works department.
“It all starts with sewers,” said Suffolk County Legis. Wayne Horsley, chairman of the Wastewater Treatment Task Force. “When you’re talking about growing the economy, smart growth, affordable housing, you can’t do any of that without the proper wastewater infrastructure.
He said more than 70 percent of Suffolk County is still without sewers.
“In a county of 1.5 million people, that’s not a good thing,” Horsley said.
The list includes eight “ready to go” projects and 10 in the pre-planning stage.
The last project is the Bergen Point Outfall Pipe Replacement Project, which needs $150 million in funding and could create up to 7,125 jobs.
The “ready to go” projects are:
The Brookhaven Sewer District
Huntington Sewer District
Northport Village
Patchogue Village/East Patchogue
Port Jefferson Village
Sag Harbor
Smithtown/Kings Park
Wyandanch
The pre-planning projects include:
Bellport
Center Moriches
Lake Ronkonkoma Hub
Mastic/Shirley
Centereach/NY 25 Corridor
Rocky Point
Sayville
Southampton
Yaphank
Horsley said the task force started looking at wastewater projects last year and was asked by Reps. Tim Bishop and Steve Israel to give them a list of those ready for go.
“We didn’t know how bad the economy was going to be, but we knew what the problem was,” Horsley said.
“Now, the issues have come together with real force. Congress is going to be putting together these lists and we’ve let them know that there is nothing more important to Suffolk County than the wastewater treatment issue.”
Wednesday, January 14, 2009
Blogs Going Forward
The NAHB's International Builders Show starts Sunday. LIBI will be out there and report back each day and then maintain a daily blog going forward. There is so much going on and so much at stake that it is incumbent on us here at LIBI to keep everyone apprised of the latest developments.
Be sure to check back Monday morning and every day after that. As always, comments and feedback are welcome.
Be sure to check back Monday morning and every day after that. As always, comments and feedback are welcome.
Monday, January 5, 2009
Happy New Year!
Okay - so we're already a week into January. Woo hoo!
One can only hope and expect 2009 to be better than 2008. LIBI certainly expects this to be the case and is working to make sure it is. Stay tuned to this space for more information regarding what's in store for the year and why your LIBI membership will be more valuable than ever.
One can only hope and expect 2009 to be better than 2008. LIBI certainly expects this to be the case and is working to make sure it is. Stay tuned to this space for more information regarding what's in store for the year and why your LIBI membership will be more valuable than ever.
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