Friday, January 26, 2007
Audio (1 hour 16 seconds 8.8Mb)
Wednesday, January 17, 2007
January 16, 2007
Buyers Scarce, Many Condos Are for Rent
By VIKAS BAJAJ
WASHINGTON — David Franco’s illuminated model of a proposed 10-story condominium tower dominates a sales center that, in spite of the “Now Selling” banner still fluttering outside, is conspicuously closed for business.
“We could have waited it out and kept pushing and pushing,” Mr. Franco said about the decision to abandon plans to sell 180 luxury condominiums with floor-to-ceiling windows offering views of the Washington Monument and Capitol Hill. “But it would have taken significantly longer.”
After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, Jeff Blum, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings.
Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling.
In many cities, banks have significantly scaled back loans to condominium builders. Some have demanded that developers sell half or more of the units in a building before even beginning construction.
In hopes of salvaging something from their costly plans, hundreds of developers like Mr. Franco are looking to the strong market for apartments, planning to rent their units for at least a couple of years while waiting for today’s condo surplus to shrink. Mr. Franco and Mr. Blum hope to break ground on what will be a somewhat less expensive building this spring.
In some cases, developers are even turning older buildings back to rentals after a brief or aborted attempt at condo conversion. Meanwhile, another 2,500 proposed condominiums in the Washington area have been scrapped altogether, according to Delta Associates, a real estate research firm.
The latest salvage operation on the part of condo developers is far from a sure bet, however. Condominium buildings generally cost more to build and operate than those built for apartments from scratch. And while rents are high and rising in most cities, in many cases they still are not sufficient to turn a profit.
Industry analysts also point out that rents may start sagging if too many condos are converted into apartments too quickly. While rents were rising at a robust 6.1 percent annual pace in the Washington area late last year, according to the Bureau of Labor Statistics, some buildings in the suburbs have recently started promoting move-in specials and other incentives to lure renters.
“You can do it, but it isn’t as attractive,” Tom Meagher, a Boston real estate consultant, said about converting condos into apartments. “You are not going to get enough rent to cover the cost. You might have to go back and redesign the floor plans.”
In the Boston area, Mr. Meagher is tracking 600 condo projects representing about 49,000 units in various stages, from applying for permits to active construction. While the recent slowdown is forcing developers to consider converting their projects to apartments and offices, he expects as many as a third of them will never be built at all.
Mr. Franco said that he and Mr. Blum were able to cut 10 percent from the costs of their planned building, on land in the trendy U Street corridor. That should be enough to make a profit, he said. Beyond switching to some less expensive materials, they also decided to subdivide some larger units into smaller apartments.
The partners are now going through a similar financial exercise on another proposed building across the street, which was to house 225 condominiums but now could be recast as a rental building as well.
Lenders started tightening the purse strings for the condominium market in early 2006 as sales weakened first in cities like Miami and Las Vegas.
“Did the lenders pull back soon enough?” asked Robert Brennan, managing director of real estate finance at Credit Suisse in New York. “I don’t think we know yet.”
Real estate experts say condos are more susceptible to booms and busts than single-family homes are because they attract more investors who do not intend to live in them and are easier to build than a new subdivision in many cities.
And while there are tentative signs that the worst of the overall housing slump may be easing as builders cut back and interest rates remain relatively modest, condo markets continue to suffer.
Take the owner trying to sell a spacious two-bedroom condo for $879,000 in the former Columbia Hospital for Women, which closed in 2002, in the Foggy Bottom neighborhood of Washington. In 2004, the investor was so confident that he would make a handsome resale profit that he told his agent, Thomas P. Murphy, he wanted to buy five condos. Mr. Murphy said he flatly told his client he would only assist him in purchasing one unit in any one building.
“He needs $890,000 to break even, but the offers are at $800,000 to $840,000,” Mr. Murphy said. “He does remember that I told him he was not getting five of them.”
Could he rent the condo? Yes, but that option is not appealing, either. Mr. Murphy estimates that the unit could rent for $4,000 a month, far short of the $6,800 a month the condo costs in mortgage interest, maintenance fees, insurance and taxes.
“They have a choice of how they want to lose it,” Mr. Murphy said of investors and condo developers. “Drip by drip or in one slap.”
Mr. Murphy said he believed condo sales had picked up somewhat lately and he even ran a four-way bidding contest on one well-priced condo in Foggy Bottom, near the State Department. But the supply of newly built condos is so large and so many of them are similar to each other that many sellers are having to sharply cut their asking price. Others have simply given up.
At the end of 2006, 24,200 units were on the market in the Washington area, up from 13,000 at the start of 2005. Sales have slowed to 663 in the fourth quarter of 2006 from 3,520 in the first quarter of 2005, according to Delta Associates. Recorded prices have been flat, which probably masks an effective decline since only the most attractive properties are selling and many owners throw in extra inducements that do not show up in official figures.
One of the few exceptions to the trend is in Manhattan, particularly at the high end. Condo and co-op sales increased to 2,441 in the fourth quarter, from 1,574 a year ago, and inventory was relatively flat at 5,900, said Jonathan J. Miller, an appraiser. Much of the increase can be attributed to a legal change in how sales of co-ops are recorded, but Mr. Miller said a 5.5 percent drop in prices from the third quarter also helped.
Nationally, condominium sales have fallen further than those of single-family properties, 13.6 percent from November 2005 to the same month in 2006; free-standing homes showed a 10.7 percent decline in the same period. Inventories have risen 38.1 percent for condos and 29.6 percent for individual homes, according to the National Association of Realtors. The national median price — half the condos sold for more and half for less — was $224,600 in November, unchanged from November 2005.
But there is no comprehensive, national source of data for new condominiums sales. The Realtors group only measures sales of existing units and the Commerce Department, which tracks sales of new single-family homes, does not collect data on condominiums.
In the recent housing boom, many cities welcomed condos, hoping the young, upper-income set they attract would help revitalize older neighborhoods. In some cities, condominium construction also gave municipal officials an opportunity to demand that developers set aside some units for affordable housing in exchange for zoning and building approvals.
In Washington, the area around 14th and U Streets was one of several formerly run-down neighborhoods to get a facelift largely from new condo projects. The area was once a hub of African-American civic and cultural life, but the neighborhood was ravaged by riots in 1968 after Martin Luther King Jr.’s assassination and fell into decades of neglect and disrepair.
The area has now become home to trendy cafes, a Whole Foods grocery and other stores. But signs of its hardscrabble past linger on in dilapidated apartment buildings and storefronts. The influx of transplants from nearby Dupont Circle and Adams Morgan has also raised the usual strains that accompany gentrification — rising rents, increased traffic and the displacement of local residents.
Mr. Franco, who lives in the neighborhood, said he was sensitive to those concerns. His company, Level 2 Development, contributed $1 million to help a group of tenants in low-income apartments buy their building as part of a deal with the local government for the approval of his condo project.
He had hoped to take up residence in a 3,200-square-foot corner unit with an expansive terrace, which will now be cut up into smaller rental apartments.
But as he drove around the neighborhood recently pointing out rows of redeveloped buildings, he acknowledged that the market might have reached its limit for now. As an example, he pointed to a used car lot that seemed to be a vestige of a bygone era.
“The reality is not everything can make way for condos,” Mr. Franco said. “This guy may be doing so much business that it has far more value than what a real estate sale can fetch.”
Copyright 2007 The New York Times Company
Monday, January 15, 2007
Hear him pitch it:
After I read Tracy Jordan’s first article on “the award” being bestowed upon the City of Easton for accomplishing nothing tangible, I immediately researched the Partners for Livable Communities.
It took me all of 5 minutes to find out that they are a municipal consulting organization. And the organization does not hide why they exist. On their webpage they readily offer their Technical Assistance Consulting brochure which clearly catalogs their price list (http://www.livable.com/images/documents/Technical%20Assistance.pdf page 16). It cost $5k to get honored and $10k to join their club for a year. And joining their "Sam's Club for Local Government" allows us the privilege of buying plans, seminars, and other consultation from them.
Mayor Mitman has correctly stated that “The Partners” are a charitable non-profit [501(c)(3)], but his comparison of the organization to ProJeCt of Easton is misleading, and belittles the truly benevolent work of ProJeCt. The partners fit the criteria because of the types of services they SELL.
I am sure the “award” means more to the Mayor than it could ever mean to us taxpayers. A person networked with these guys (their board is politicians, lawyers, and bankers) has some pretty good prospects for future employment.
Their award is a sham-- a Trojan Horse. They are feeding on our collective low city-esteem. They found a slightly bruised community, then they told us how beautiful we were, and promptly asked us to pay for the compliment.
No one really knows how many marginally moral and/or ethical situations will evolve from the Mayor’s $5,000.00 purchase of the “Entrepreneurial American Community Award” from the Partners for Livable Communities. All we really know is that the Mayor expects us to be a lot more gracious and grateful.
Hear it happen:
Read the resolution. http://eastonundressed.org/eufiles/resolution213_2006.pdf
Easton is a city where history is so important that we take significant efforts to celebrate and preserve it.
Patrons and residents of Easton have heroically toiled to preserve our architecture.
We Eastonians relish in our attachment to our country’s birth through our annual reading of the Declaration of Independence.
In Easton we do not use “liability” as a reason to destroy aged buildings. If we did there would be vacant lots on the northeast corner of 2nd and Northampton and the northwest corner of 5th and Northampton.
Come Hell or (as we well know) high water the Declaration will be read.
History is such an integral element in our city that we gave it top billing in new logo.
Because of this I must protest Council’s unanimous resolve (Resolution 213-2006 of 12/28/06) to destroy the audio history of City Council proceedings.
To eliminate history in order to avoid liability is not noble. In this, we also eradicate assets. Destroying the audio archive is not a tenet of government transparency. It is comparable to book burning; stinks of cover-up; and is one of the most permanent forms of revisionist history.
The advice that our Council is acting under does not protect the interest of their constituents—it protects them against the interest of their constituents.
Hiding from history is not noble; thus not in the spirit of History- Heritage- Home.
I Have a Dream.
I am happy to join with you today in what will go down in history as the greatest demonstration for freedom in the history of our nation.
Five score years ago, a great American, in whose symbolic shadow we stand signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of captivity.
But one hundred years later, we must face the tragic fact that the Negro is still not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land. So we have come here today to dramatize an appalling condition.
In a sense we have come to our nation's capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men would be guaranteed the inalienable rights of life, liberty, and the pursuit of happiness.
It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check which has come back marked "insufficient funds." But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. So we have come to cash this check -- a check that will give us upon demand the riches of freedom and the security of justice. We have also come to this hallowed spot to remind America of the fierce urgency of now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to open the doors of opportunity to all of God's children. Now is the time to lift our nation from the quicksands of racial injustice to the solid rock of brotherhood.
It would be fatal for the nation to overlook the urgency of the moment and to underestimate the determination of the Negro. This sweltering summer of the Negro's legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. Those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. There will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.
But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred.
We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force. The marvelous new militancy which has engulfed the Negro community must not lead us to distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny and their freedom is inextricably bound to our freedom. We cannot walk alone.
And as we walk, we must make the pledge that we shall march ahead. We cannot turn back. There are those who are asking the devotees of civil rights, "When will you be satisfied?" We can never be satisfied as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as the Negro's basic mobility is from a smaller ghetto to a larger one. We can never be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream.
I am not unmindful that some of you have come here out of great trials and tribulations. Some of you have come fresh from narrow cells. Some of you have come from areas where your quest for freedom left you battered by the storms of persecution and staggered by the winds of police brutality. You have been the veterans of creative suffering. Continue to work with the faith that unearned suffering is redemptive.
Go back to Mississippi, go back to Alabama, go back to Georgia, go back to Louisiana, go back to the slums and ghettos of our northern cities, knowing that somehow this situation can and will be changed. Let us not wallow in the valley of despair.
I say to you today, my friends, that in spite of the difficulties and frustrations of the moment, I still have a dream. It is a dream deeply rooted in the American dream.
I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."
I have a dream that one day on the red hills of Georgia the sons of former slaves and the sons of former slaveowners will be able to sit down together at a table of brotherhood.
I have a dream that one day even the state of Mississippi, a desert state, sweltering with the heat of injustice and oppression, will be transformed into an oasis of freedom and justice.
I have a dream that my four children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.
I have a dream today.
I have a dream that one day the state of Alabama, whose governor's lips are presently dripping with the words of interposition and nullification, will be transformed into a situation where little black boys and black girls will be able to join hands with little white boys and white girls and walk together as sisters and brothers.
I have a dream today.
I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.
This is our hope. This is the faith with which I return to the South. With this faith we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day.
This will be the day when all of God's children will be able to sing with a new meaning, "My country, 'tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the pilgrim's pride, from every mountainside, let freedom ring."
And if America is to be a great nation this must become true. So let freedom ring from the prodigious hilltops of New Hampshire. Let freedom ring from the mighty mountains of New York. Let freedom ring from the heightening Alleghenies of Pennsylvania!
Let freedom ring from the snowcapped Rockies of Colorado!
Let freedom ring from the curvaceous peaks of California!
But not only that; let freedom ring from Stone Mountain of Georgia!
Let freedom ring from Lookout Mountain of Tennessee!
Let freedom ring from every hill and every molehill of Mississippi. From every mountainside, let freedom ring.
When we let freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God's children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, "Free at last! free at last! thank God Almighty, we are free at last!"
Friday, January 12, 2007
I know the issue is kind of small, but I am determined to save the City’s recordings of City Council sessions. Apparently Council decided to destroy the entire collection of recordings because someone at City Clerks’ School said it was a good idea. In a town that relishes history this is irreprehensible. I need your help.
Audio (7.7Mb 1 hour 7 minutes)
Thursday, January 04, 2007
Audio (7.4 Mb 1 Hour 5 Minutes)