Headlines – Week of March 6, 2011
March 15, 2011
According to Justin Hollander, an urban planning professor at Tufts University, Sun Belt states such as Florida must embrace the idea of “smart decline” — doing more with less, whether it’s fewer people, fewer home buyers or fewer jobs. Hollander is the author of Sunburnt Cities, a book which was published March 1st.
The idea is that Sun Belt cities will get fresh start after the housing bust suggesting that climate will remain one of the biggest draws and growth likely will return, the economy will rebound, and millions of vacant homes will be lived in again.
The current pause in the boom could be a seminal moment for cities across California, Nevada, Arizona and Florida – the Sun Belt states that grew the fastest and have been hardest hit by the housing collapse.
He believes these boomtowns have a chance to limit growth for growth’s sake by allowing dense development and reducing parking requirements to encourage walking, public transportation and more green space.
This is happening in cities such as Detroit and Buffalo which are trying to adjust to economic decline by shrinking smartly; concentrating development in small pockets and razing abandoned homes to make way for parks.
The economic slowdown along with rising energy prices, tight local government budgets and changing demographics is prompting new conversations that could lead to a substantial change in the future design of Sun Belt cities say many new urban planners.
These planners envision the cities of the future as resembling cities of the past. They will include more high-rise apartments, condos and townhouses near transit stops, shops and businesses on street levels and fewer parking garages.
In many Florida cities, medical facilities and research centers are being lured to reduce reliance on tourism and housing. Arizona and Nevada are chasing technology companies. All three states are trying to attract solar-energy companies and other renewable-energy industries.
Central cities lost people to suburbia where people yearned for a big house and a big yard they could afford.
And now, Sun Belt suburbs have the highest percentage of homeowners who owe more on their mortgages than their houses are worth.
Many Sun Belt cities have seen the suburban flight that caused the decline of many Northern cities during the past 50 years.
They believe the country will now be facing the depopulation of the suburbs.
The transformation from the suburbs to the cities will be pushed along by:
- Gas prices – As the cost of a gallon of gas starts to near $4, the 45-minute commute loses its appeal. Research by think tanks such as the Center for Neighborhood Technology shows that households in distant suburbs spend more on transportation than they save on housing.
- Environmental concerns – Protecting natural resources and reducing U.S. dependence on foreign oil are part of the national agenda. Living in smaller homes near public transit or within walking distance of stores and services can lower energy use and preserve green space by not using up as much land.
- Social and demographic change– Young adults don’t want to live in gated subdivisions far from entertainment, shopping and jobs, according to research by CEOs for Cities, a non-profit alliance of urban leaders. More are delaying marriage and childbirth, extending the time they’re likely to want an urban lifestyle. Also, 77 million Baby Boomers are or soon will be empty nesters, and many are gravitating back to urban centers.
As an example of what is going on in this area, Orlando is creating three “medical cities” around hospitals, medical schools and research facilities. Baldwin Park, site of the former Orlando Naval Training Center, now is a city within a city, offering a wide range of residential choices, from custom million-dollar homes to condominiums.
On March 11th, regulators shut down small banks in Oklahoma and Wisconsin, lifting to 25 the number of U.S. bank failures this year after157 banks were closed 2010.
The pace of bank failures reported by the FDIC for the first two months of 2011 is actually slightly ahead of 2010’s pace, with 23 failures in 2011 versus 22 in 2010. However, the $9 billion in assets of those 2011 failed banks is well below the $16 billion in assets for the banks that failed in the same period of 2010.
CMBS Delinquencies Up Again
According to New York-based researcher Trepp, the U.S. CMBS delinquency rate rose again in January with the percentage of loans 30 or more days delinquent, in foreclosure or REO climbing 14 basis points to 9.34%, the highest in history for U.S. commercial real estate loans in CMBS. The value of delinquent loans now exceeds $61.4 billion.
According to the new report, the office sector is weathering the downturn best, while industrial and multifamily continue to underperform.
The firm also reported that CMBS delinquency rates edged up 5 bps to 9.39% in February. Multifamily and lodging lead other asset classes in total CMBS delinquency at 16.6% and 14.6%, respectively although they saw their overall delinquency rates decline for the first time.
8 Vacation Rental Hot Spots
RISMedia, a real estate information website recently published an article entitled “Getaways: Top Vacation Rental Hot Spots for 2011”.
The article quotes data obtained from TripAdvisor, a travel Web site, recently released a list of America’s top vacation rental hot spots for this year.
TripAdvisor’s picks, which factored in search data from its site, include:
1. Kissimmee, Fla.
2. Big Bear Lake, Calif.
3. Gatlinburg, Tenn.
4. Kihei, Hawaii
5. Destin, Fla.
6. Palm Springs, Calif.
7. Outer Banks, N.C.
8. Lahaina, Hawaii
Posted by Scott R. Lodde