Tuesday Report, May 17, 2011
Special to the Texas Low Income Housing Information Service
Groundbreakings for new residential units dropped in April as the housing industry continues its freefall. In California, lenders have drawn out “short sales” with a myriad of paperwork to the extent that realtors are protesting.
Meanwhile, a year-long Washington Post investigation of HUD reveals almost 700 housing projects have been abandoned or stalled nation-wide. Among the backlog is Galveston’s hurricane recovery program that has produced only 14 houses after three years of funding. More than a thousand homeowners could be assisted if the program moved forward.
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Housing starts and permits fall in April
Reuters May 17, 2011
Housing starts and permits for future home construction fell in April as an overhang of homes on the market discourages builders from taking on new projects, pointing to prolonged weakness in the housing sector.
The Commerce Department said on Tuesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 523,000 units. March’s starts were revised up to a 585,000-unit pace from the previously reported rate of 549,000 units.
Economists polled by Reuters had forecast housing starts rising to a 568,000-unit rate. Compared to April last year, residential construction was down 23.9 percent, the largest decline since October 2009.
Why are short sales so long and drawn out?
By David Lazarus Los Angeles Times May 17,2011
The housing market may be on the ropes, but Curt Beck was ready to come out swinging. He offered $385,000 for a three-bedroom house in Acton. The seller was happy with the terms. But it was unclear if the mortgage holders would allow the deal to go through.
Beck, 56, is typical of many would-be home buyers trying to navigate what’s known as a short sale — when a property is sold for less than the outstanding mortgage (or mortgages).
Real estate experts say this can be a particularly challenging process, complicated by lenders trying to squeeze as much money as possible from a transaction, even though a failed deal often results in the property being foreclosed on.
The situation has grown so problematic that the California Assn. of Realtors recently ran ads in newspapers statewide saying more needs to be done to assist homeowners on the verge of foreclosure by expediting the short-sale process.
A trail of stalled or abandoned HUD projects
By Debbie Cenziper and Jonathan Mummolo Washington Post May 14, 2011
The federal government’s largest housing construction program for the poor has squandered hundreds of millions of dollars on stalled or abandoned projects and routinely failed to crack down on derelict developers or the local housing agencies that funded them.
Nationwide, nearly 700 projects awarded $400 million have been idling for years, a Washington Post investigation found. Some have languished for a decade or longer even as much of the country struggles with record-high foreclosures and a dramatic loss of affordable housing.
The U.S. Department of Housing and Urban Development, which oversees the nation’s housing fund, has largely looked the other way: It does not track the pace of construction and often fails to spot defunct deals, instead trusting local agencies to police projects.
The result is a trail of failed developments in every corner of the country. Fields where apartment complexes were promised are empty and neglected. Houses that were supposed to be renovated are boarded up and crumbling, eyesores in decaying neighborhoods.
Recovery program ‘progressing steadily’
By Amanda Casanova Galveston County Daily News May 17, 2011
GALVESTON — With the city’s help and a threat of termination still fresh, the multimillion-dollar disaster housing recovery program is “progressing steadily,” a city official said. Massachusetts-based CDM was hired about a year ago to manage a $167 million federal Community Development Block Grant program to rebuild homes after Hurricane Ike, but the program has been blasted for management problems and a crawling pace. More than 2,000 people applied for the disaster assistance program and about 851 applicants have been approved. The most recent numbers show that 93 houses are under construction and 14 houses are complete. That’s about three times the amount reported in March when Mike Spletto, director of disaster recovery for CDM, said 19 houses were under construction and five were finished. City council members also are worried that the program could leave out island residents. Sterling Patrick, the city’s director for grants and housing, estimates about 1,033 people can be served from the program. “Well I’m glad I’m not 1,034,” said council member Steve Greenberg, who first asked in March to terminate the contract with CDM.
Full story at: http://galvestondailynews.com/story/231894
The Death of the McMansion
When the housing market returns, we’ll want smaller homes built closer together.
By Witold Rybczynski Slate May 11, 2011
The U.S. housing market is going through an adjustment of historic proportions. Before 2006, when the housing slump commenced, American home builders regularly built as many as 2 million new houses annually, rarely less than a million. This amount was needed to keep up with new household formation, immigration, homeowners moving up, and replacement due to obsolescence. Since then the number of new houses built has dropped drastically—the seasonally adjusted annual figure announced by the federal government in February 2011 was about 400,000! What’s going on?
Full story at: http://www.slate.com/id/2293106/?from=rss
Third Houston Outerbelt Would Turn Prairies Into Texas Toast
Angie Schmitt American City May 7th, 2011
There’s a place just outside Houston where the vinyl siding and attached garages thin out and recede into grasslands.
In this place — one of the country’s few remaining tall-grass prairies — something amazing happens each fall. First hundreds, then thousands, then millions of birds arrive here at Katy Prairie, an international wintering grounds for migratory birds, especially waterfowl.
Over the decades, this 1,000 square mile sanctuary has largely survived the encroachment of farmers and relentless development pressure from neighboring Houston, thanks in no small part to its dedicated supporters.
But the Katy Prairie has never faced a Houston Tomorrow opponent like the Grand Parkway before. Piece by piece, the Houston area has been building a third — yes, third — bypass for the region. And much to the horror of local environmentalists, the next segment is planned to directly bisect this extraordinary habitat.
Full story at: http://americancity.org/buzz/entry/2981/
Smart building: 290-unit apartment project is first step for Montecillo plan
By Vic Kolenc El Paso Times May 12, 2011
Work has begun on a 290-unit apartment project that’s the beginning of El Paso’s first Smart Code development — the 292-acre Montecillo community in West El Paso.
When fully developed years from now, it’s expected to have about 4,500 apartments, townhouses and single-family homes. It also will have stores, offices and open spaces.
The city’s almost 2-year-old Smart Code is aimed at building developments that cater more to pedestrians than cars and provide for a high density of various types of residential housing mixed with commercial and open-space components.
Full story at: http://www.elpasotimes.com/business/ci_18044027
City Council: Smart Code project sought for West El Paso
By Diana Washington Valdez El Paso Times May 17, 2011
The City Council today will consider an economic proposal for a Smart Code project of about 204 acres near Interstate 10 and Executive Center Boulevard in West El Paso.
City Rep. Ann Morgan Lilly said the proposed Aldea development would include a new Wal-Mart.
“This will probably be our most important item on (today’s) agenda, and I expect a long discussion for it,” Lilly said.
If the city approves the agreement with Geltmore, LLC, then Aldea will become the third Smart Code development for El Paso, a signature policy of the current City Council.
Under the plan, the city would grant city property tax rebates to help pay for infrastructure that developers usually pay for, such as streets, parks and utilities, in exchange for using the Smart Code, city Rep. Beto O’Rourke said.
Full story at: http://www.elpasotimes.com/ci_18074496
Downtown Austin condo sales update
By Shonda Novak Austin American-Statesman May 16, 2011
After a surge of construction a few years ago, no new major downtown-area condominium projects are on the horizon. We asked developers of the 5 major projects for updates on how sales are going.
Combined, the projects have more than 1,000 units.
1. Barton Place
1600 Barton Springs Road
85 of the 270 units have been sold. Another 54 are under contract, said Larry Warshaw, partner with developer Constructive Ventures. Prices range from the mid-$200,000s to the upper $800,000s.
300 Bowie St.
201 of the 248 units have been sold, and 14 more are under contract, according to Constructive Ventures.
Prices range from about $230,000 to the high $800,000s.
3. W Austin Hotel and Residences
200 Lavaca St.
Developer Stratus Properties Inc. reported Monday that 40 of the 159 units have been sold, with another 46 under contract.
The sold units went for a total of $38.8 million, at prices ranging from $374,000 to more than $3 million.
4. The Austonian
200 Congress Ave.
Benchmark Development did not provide updated sales figures for the 56-story tower. Last fall, the company said 40 percent of the 178 units were sold or under contract.
5. Four Seasons Residences
98 San Jacinto Blvd.
Developer Post Properties said that 68 units have been sold and 11 more are under contract. The 32-story tower east of the Four Seasons Hotel has 148 units.
The remaining units are on the market at prices ranging from the $400,000s to more than $4 million.
HUD awards large grant to Salvation Army
Lubbock Avalanche-Journal May 12, 2011
The United States Department of Housing and Development awarded a three-year federal grant of $845,113 to the Salvation Army of Lubbock on April 28.
According to a press release from the Salvation Army, the grant will fund the Army’s Red Shield Home Transitional Living Program, which addresses short-term, long-term and cyclical homelessness.