How apartment rents and vacancies can rise (or fall) simultaneously

via Richard's Real Estate and Urban Economics Blog

photo by thinkpanama

We at the Lusk Center put out the Casden Forecast for apartment economics in Southern California every spring.  When we put out our San Diego numbers last week, we presented a result that confused people--we expect both rents and vacancies to rise in the next year.

The reason this can (and often does) happen is that real estate markets operate with lags, and feature "natural" rates of vacancy.  The "natural" rate is the rate at which real rents stay constant--if vacancies fall below the natural rate, real rents rise; if they rise above, rents fall.  Stuart Gabriel and Frank Nothaft did a nice paper on this some time ago.

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more about real estate:

A. Gary Shilling's cogent analysis of the US Housing Market

European urban development: Sustainability and the role of housing

Urban Planning and Real Estate Development

E-book: Urban Planning And Real Estate Development

Urban Planning and Real Estate Development

A. Gary Shilling's cogent analysis of the US Housing Market

via eKonometrics 

The collapse in housing and the 33 percent plunge in house prices since 2006 are favoring renting over homeownership. This trend will dominate the housing market for the next four or five years, and put additional pressure on a weak economy.
Policy makers in Washington continue to have a soft spot for homeownership. Many recent government actions can be viewed as attempts to keep people in their homes, even owners who clearly can’t afford them. In addition to specific plans such as the Home Affordable Modification Program, or HAMP, and the Home Affordable Refinance Program, or HARP, the Obama administration is trying to revive the moribund housing sector by encouraging mortgage lenders and servicers to refinance loans at lower rates.
This reduces interest income for banks, which are now compelled by the Dodd-Frank law to retain 5 percent of the credit risk on lower-quality residential mortgages that are securitized and sold to others. Furthermore, banks are reluctant to refinance loans that Fannie Mae and Freddie Mac (NMCMFUS) then guarantee and put back to the lenders if they find any defects. The White House plan is a tough sell.

As banks deleverage and mortgage activities increasingly involve unwanted loans, the ability to deal with refinancing has diminished. Four banks now control more than 60 percent of the mortgage market, and many mortgage servicers have reduced staff or been slow to gear up to handle delinquent mortgages and refinancings. Except for those who qualify for HARP, refinancing is highly unlikely for 8 million owners who are underwater -- owing more than the value of their homes -- because new terms are treated as new loans. Those who have positive home equity face dramatically tightened lending standards, a clogged refinancing system and new fees that can wipe out the savings from refinancing.
Almost 90 percent of mortgages today are only originated because of guarantees from Freddie Mac, Fannie Mae and the Federal Housing Authority, and all three have raised their fees substantially. As a result, many of the 20 million borrowers who could cut their mortgage rates by more than one percentage point through refinancing are unable to benefit.
 

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more about housing:

Urban shrinkage in Leipzig and Halle, the Leipzig-Halle urban region, Germany

What happens when there are not enough houses?

The Comprehensive Plan and Land Development Regulations: Putting Words Into Action

A Libertarian View of Urban Sprawl

New Report: Transport Determines Housing Affordability

Shifting the Suburban Paradigm

What happens when there are not enough houses?

via Cities Matter 

Closing CHRANZ
Yesterday the Centre for Housing Research Aotearoa New Zealand (CHRANZ) closed. This public agency funded independent and contestable research into New Zealand’s housing markets.


The Centre commissioned some important research, developing tools for analysing housing markets; looking at housing supply and demand, and their impact on prices; identifying the needs of different groups; examining regional markets; and most importantly documenting changing trends in affordability, ownership, and the disturbing emergence of the intermediate housing market.

But this posting is not a wake for CHRANZ.  Fortunately it has created an important knowledge base that enables us to understand the challenges we face, and which will be relevant for some time to come.[1]

It’s ironic, though, that its closure takes place at a time when there are more questions over housing than ever, more challenges and more uncertainties.

Housing – the perfect storm?

Rebuilding Christchurch The earthquakes in Christchurch throw up huge questions over how and where many residents will be housed, and even more questions over just what will happen to the city’s population in the medium term, and its projected demand for housing.

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Westhaven, Auckland, New Zealand, photo by Sandy Austin

Mount Victoria, Auckland, New Zealand, by Squirmelia

more about housing:

The Comprehensive Plan and Land Development Regulations: Putting Words Into Action 

Can Ontario deliver the continent's best land-use plan?

Low Carbon Housing for `Young Cities`: Experiences from Hashtgerd New Town, Iran

Accessibility effect on urban land values

Affordable Housing - theoretical utopia or achievable reality

European urban development: Sustainability and the role of housing

by IVÁN TOSICS

In the new Millennium, sustainable urban development is becoming a fashionable topic, almost as popular as globalization or city competition. European countries differ widely from each other on whether they have a national policy for urban development or not, and if so, on the emphasis of such a policy. Pan European organizations are reluctant to establish a clear vision of a desirable European path toward urban development. This is even true for the European Union: although the EU is running extensive systems of support policies, it has no clear expectation of how European cities should develop or what they should look like in the future. (The European Spatial Development Perspective, ESDP, contains some statements about desirable urban development, but this is far from being a binding document or having substantial influence on the allocation of means of support.) The criticism leveled at the EU for having no common policy for the future of its cities should be seen in perspective, as the lack of ideas/patterns for sustainable urban development is even more visible in the accession countries and in Eastern Europe. The dramatic changes in the cities of the post-socialist countries even appear to be moving in the opposite direction - away from sustainability. .
Sustainability is a complex phenomenon, having economic, environmental and social aspects. Any concept of sustainable urban development must incorporate sectoral concepts; these must be well integrated in the overarching urban, regional and governance policies. One sectoral policy of great importance to sustainable development is housing. Without suitable suggestions for housing policies, no concept of sustainable development can be successful (and vice versa). Yet, housing is one of the less frequently discussed aspects of sustainability. This might be explained by the way housing research has developed; economic and social aspects have taken precedence over environmental effects and externalities. Of course, the fact that housing is not part of the common policies of the EU also helps explain the present situation. 

This paper elaborates on the link between housing and urban development. U sing examples of good and not so good practices, we consider why housing experts should investigate the environmental and spatial externalities of housing policies and why experts working on urban development policies should take the results of such analyses into account. Such collaboration could raise the status of sustainable urban policies supported by suitable housing policies. The analysis presented here pertains to the Western and Central parts of Europe, roughly to the area of the soon-to-be-enlarged European Union. The structure of the paper is as follows. The first chapter discusses models and trends of urban development. The second chapter gives an overview of policies with the potential to influence urban development, followed by good and not so good
examples for such policies taken from both Western and Eastern Europe. The third and fourth chapters concentrate on large housing estates, where interventions were needed to ensure the sustainability of development. Finally, chapter five offers some concluding remarks.

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A housing project of US Army in Europe, by USACE Europe District

more about housing:

A New Look at Germany's Postwar Reconstruction

AN EQUILIBRIUM MODEL OF SORTING IN AN URBAN HOUSING MARKET: A Study of the Causes and Consequences of Residential Segregation

Residential Location Decisions: Heterogeneity and the Trade-off between Location and Housing Quality

Affordable Housing - theoretical utopia or achievable reality

Accessibility effect on urban land values

The World's Housing Bubble

by Richard Florida

America has suffered through a housing crisis for the past several years, with the average price falling 30 percent, and much more than that in some areas. So it may come as a surprise to many Americans that much of the world still appears to be in the throes of its own housing bubble. The chart below, from the Global Housing Monitor produced by the International Monetary Fund's Prakash Loungani, offers some perspective.

Housing prices have been falling in about half of the countries, but they're rising on the other half.

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photo by jekemp

photo by YST (aka kryptos5)

more about housing:

A New Look at Germany's Postwar Reconstruction

AN EQUILIBRIUM MODEL OF SORTING IN AN URBAN HOUSING MARKET: A Study of the Causes and Consequences of Residential Segregation

Residential Location Decisions: Heterogeneity and the Trade-off between Location and Housing Quality

Subsidies in the Suburbs

What is the Effect on Affordability as Small Cities Invest in Market Rate Housing in their Downtowns?

What is triple-bottom-line real estate development?

via Cooltown Studios

Many of us know that the triple bottom line means “people, planet and profit”, being economically, socially and environmentally beneficial. That is, expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance (Wikipedia).

So what does this mean for real estate development? What would triple bottom line real estate development look like? Keep in mind this is about the real estate development industry, not about the city or neighborhood as a whole, which is obviously more important, but a separate focus nonetheless.

Economic/Profit
- It’s financially viable to the real estate developers and investors. Many say that developers make too much money and some say they shouldn’t make any. That of course is unrealistic, as real estate development is a hugely risky industry (just witness the recent state of affairs) and it’s not like they’re dominating the Fortune 500. Really though, the real estate developers that sincerely care about and work with the local residents are often embraced as heroes, while the ones that don’t are seen as villains. Simple as that.

Environmental/Planet
- The development is LEED-ND certified and the buildings are LEED certified. The U.S. Green Building Council has established a reputable standard by which to make developers accountable when going green. It covers just about any kind of green consideration you can think of, from rainwater barrels to alternatives to car ownership.
- Housing and transportation options that reduce carbon footprints are available. As stated, the opportunity to live in smaller units (heating/cooling of buildings has the largest carbon footprint) and walk or bike (transportation is second) to destinations is the best one can do to be green.

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more about real estate:

Shifting the Suburban Paradigm 

Urban Planning and Real Estate Development  

E-book: Urban Planning And Real Estate Development 

Sustainable Urban Form and Real Estate Markets 

Shifting the Suburban Paradigm

By ALLISON ARIEFF

Is there anything made in America that’s less innovative than the single-family home? While we obsess over the new in terms of what we keep in our houses — the ever-increasing speed and functionality of our Smartphones, entertainment options built into refrigerators, sophisticated devices that monitor, analyze and report on our sleep cycles, even the superior technology of the running shoes we put on before heading out the flimsy fiberboard door — we’re incredibly undemanding of the houses themselves. These continue to be built the same way they have for over a century, and usually not as well. Walls and windows are thin, materials cheap, design (and I use the term loosely) not well-considered. The building process is a protracted affair, taking far too long and creating embarrassing amounts of building waste (over 50 percent of all waste produced in the United States, in fact).

But the lack of innovation extends beyond the high-tech. Not so long ago homes were designed to make the most of their surrounding climate and terrain. Vernacular forms like the shotgun, in places like New Orleans, served a purpose that went far beyond aesthetics — they encouraged natural cooling by improving cross-ventilation. In Texas and New Mexico, thick adobe walls similarly kept heat in during the winter, and out during the summer. Houses were sited and windows placed to maximize or minimize sun exposure as needed.

No longer. Today, it’s essentially the same floor plan, sheetrock and construction that’s used coast to coast. Glossy brochures with stock images of smiling families advertise “Spanish Gothic” or “Tuscan Villa,” but what’s really on offer is the same dumb box with a stage set of a façade tacked onto the front. The reasons behind the advertised vernacular styles have long since disappeared, their function surrendered to ornament.

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more about suburbia:

Development at the Urban Fringe and Beyond: Impacts on Agriculture and Rural Land

Compact Sprawl Experiments Four Strategic Densification Scenarios for Two Modernist Suburbs in Stockholm

Evaluating urban ambience – an investigation into quantifying the qualities of the walkable city

Neighborhoods: Is East Atlanta Losing Its Soul?

 

Urban Planning and Real Estate Development

The twin processes of planning and property development are inextricably linked – it’s not possible to carry out a development strategy without an understanding of the planning process, and equally planners need to know how real estate developers do their job. This third edition of Urban Planning and Real Estate Development  guides students through the procedural and practical aspects of developing land from the point of view of both planner and developer. The planning system is explained, from the increasing emphasis on spatial planning at a regional level down to the detailed perspective of the development control process and the specialist requirements of historic buildings and conservation areas. At the same time the authors explain the entire development process from inception through appraisal, valuation and financing to completion and disposal. In recent years both planning and real estate development have had to become increasingly aware of their legal and moral obligations. Sustainability and corporate social responsibility and their impact on the planning and development processes are covered in detail. Written by a team of authors with many years of academic, professional and research experience, and illustrated throughout with practical case studies, Urban Planning and Real Estate Development is an invaluable textbook for real estate and planning students, and helps to meet the requirements of the RICS and RTPI Assessment of Professional Competence.

 
more urban planning ebooks:

E-book: Planning and Urban Change (2nd Edition)

Recent Advances in Design and Decision Support Systems in Architecture and Urban Planning

E-book: Urban Planning And Real Estate Development

Ebook: Urban Planning in Europe

E-book: Urban Planning And Real Estate Development

This text brings together urban planning and real-estate development. It should be useful to students of real-estate studies, estate management, land management, land economy, and general practice surveying.

other urban planning ebooks:

Information Systems for Urban Planning

Planning for Protestantism in Urban America

Urban Planning and Cultural Inclusion

E-book: Urban and Regional Planning

Urban Planning and Real Estate Development

This book is a comprehensive treatment of the twin processes of planning and development and is the only book to bring the two fields together in a single text.

more ebooks:

AutoCAD 2006 for Architecture 1st Edition

Sustainable Urban Planning

Close Out Version: Drafting and Design for Architecture

Sustainable Urban Form and Real Estate Markets

Colin Jones and Charlotte MacDonald
Heriot-Watt University
Paper presented to the annual European Real Estate Conference, Milan, 2-5 June, 2004.

Abstract

A number of models of sustainable urban form have been promoted but the concept has not been subject to a fundamental review of its theoretical and empirical underpinnings. Sustainable urban form implies an inter-linkage of sound environmental, social and economic foundations. This paper initially focuses on the nature of the economic debate surrounding sustainable urban forms. It then considers the principal elements of urban form - land use patterns, position/ transport infrastructure, density, characteristics of the built environment. From this base it considers the underlying urban economic forces that shape these elements and their impact in turn on the urban economy. The role of transport infrastructure and spatial real estate markets is highlighted in the determination of urban form. The paper suggests an alternative formulation of the approach to urban sustainability that requires as a necessary condition a viable real estate sector with sustainable markets. As a consequence the paper argues the need for policy to understand and shape functional (sub) land use market/ catchment areas.

Read the paper here