After refinery shutdown, what happens to the land?

Underneath southwest Philly’s oil refinery, which announced its closure Wednesday, sits 150 years of pollution and soil contamination.

Lead and benzene are just two of the compounds that have showed up in elevated levels on soil tests, says UPenn researcher Christina Simeone, who authored a study, “Beyond Bankruptcy,” that delved into pollution and land contamination at the refinery last year.

“There are hydrocarbons in the soil and groundwater throughout the site,” Simeone said in an interview with Curbed Philly Wednesday.

And now, following an hours-long fire last week and the announcement that the refinery will close permanently, the question of cleanup—and the future of the site—remains.

An early morning blaze

The fire was reported around 4 a.m. Friday at the refinery on the 3100 block of West Passyunk, when a vat of butane exploded. The explosion set off smaller fires as it traveled along pipes that contained fuel in the 1,300-acre plant.

The refinery continued blazing until 120 firefighters contained it around 7:30 a.m. Friday and there were still fires reported at the plant as late as 2:45 p.m. that day, according to Philadelphia Energy Solutions (PES), which operates the refinery. Five people were treated at the scene and The Office of Emergency Management (OEM) instructed area residents to stay in their homes until around 7 a.m. Friday.

AP

Philly’s Department of Public Health took samples of the air with hand monitors outside the plant and through the neighborhood, looking for hydrocarbons, combustibles, hydrogen sulfide, and carbon monoxide. All tests came back negative, said the health department’s communications director James Garrow.

A question of remediation

After the news of the refinery’s closure, PES announced that it would work on safely winding down its operations and preparing the site for sale and restart.

PES declined to answer questions from Curbed Philly Wednesday about whether the current owners would remediate the land, or if that job would be left to the site’s new owners.

Land remediation is when contamination, often of industrial land, is cleaned up, or at least brought to levels that no longer pose a heath or safety risk.

As it stands, Sunoco is legally liable for contamination at the site, says Simeone.

“They have legally binding agreements forcing them toward cleanup at some level,” she said, adding that PES is only responsible for any contamination that occurred following its takeover. It is possible that the responsibility for remediation could change over to any new owners, but that would be part of sale negotiations.

Whoever takes on the responsibility has a difficult job. Only part of the the 1,300-acre site can be remediated for some kind of commercial use, says Simeone. Anyone hoping to use the land in the future would have to examine it on a parcel-by-parcel basis.

“This is never going to be a neighborhood,” she said.

Activist group Philly Thrive, who have long protested pollution at the site, are calling for PES and Sunoco to conduct a complete remediation of the site, and to restore the space to public land.

The group also called for city council “to fund studies into development of community-owned renewable energy on the land.”

“Sunoco has legal responsibility to clean up land and water polluted by the refinery, but it has created inadequate remediation plans without the public input that is required by law,” the group said.

History of the refinery

The refinery dates back to the late 1800s, when Atlantic Petroleum Company built four warehouses along the Schuylkill River to store over 2 million gallons of refined oil product, according to PES. Sunoco, which bought the Atlantic refinery—and another refinery just to the south—entered into a partnership with the Carlyle Group in 2012, creating PES.

Now PES oversees the two refineries, which process 14 million gallons of crude oil a day, according to the company.

Pollution at the site likely started long before Sunoco’s ownership, says Simeone. It’s believed to date back to the late 1800s, before regulations regarding contamination and pollution caused by the fossil fuel industry were put in place.

“Specific chemicals of widespread concern include benzene (a known human carcinogen), lead, MTBE, toluene, benzo(a)pyrene, and many other toxic compounds,” Simeone’s report said of chemicals that are present at the site. Refinery products like gasoline have contaminated the groundwater at the site, and contaminants may have migrated offsite.

In the late 1990s, Sunoco entered into Pennsylvania’s voluntary Land Recycling Program to characterize pollution and develop a remediation plan for the site.

But they neglected to properly inform or take public input on the development of that plan, according to Simeone. “They did not follow the law in the process of public notice.”

The refinery narrowly emerged from bankruptcy last year.

Looking ahead

It’s unclear who—if anyone—might buy the refinery; PES could either sell or liquidate the plant. But groups like Philly Thrive hope that it can become the site of a new renewable energy source.

“We see the potential for the transition of PES, the largest oil refinery on the east coast, to be part of the journey towards winning a federal Green New Deal—transitioning fossil fuel infrastructure across the country and investing massively in clean energy job creation to address inequality and poverty head on,” they wrote.

AP

Simeone is not sure what the future holds for the refinery, especially since the land is so highly contaminated, but hopes people will think about the best uses of the site for the city as a whole.

“Think about what’s best for the city of Philadelphia from and economic, employment, and environmental aspect.”

She also said it’s imperative for the city to remember that it narrowly dodged a major public health crisis Friday morning. The explosion happened very close to an alkylate unit, which uses hydrofluoric acid, a dangerous and potentially deadly chemical. Hydrofluoric acid can let off a gas that would burn the skin and could potentially be deadly.

“Now is the time to think about the dangers of this type of petroleum manufacturing. Think about what we narrowly averted.”

https://philly.curbed.com/2019/6/26/18759820/pes-refinery-shutdown-fire-land-remediation

CBRE Expects Steady Decline, But No Recession Until 2024

Many economic pundits predict next year may be the start of the next recession. One prominent economist even sees the U.S. already entering the throes of one.

But an executive with CBRE — the world’s largest commercial real estate brokerage firm — said Wednesday the national gross domestic product will remain above any recessionary levels at least until 2024.

“What we’re looking at is over 2% GDP this year, but it’s slowly sliding,” John Shlesinger, CBRE’s vice chairman of advisory and transaction services, said during Bisnow’s Atlanta State of the Market event. “The economy is moderately slowing down, but a ton of money’s on the sidelines still.”

The change in forecasting came just this week after CBRE Divisional Research Director Dan Wagner revised his outlook from a 2021 recession based mainly on the growing dovish view of the Federal Reserve toward interest rates.

After increasing rates in December, there was an expectation that the Fed would raise rates three times this year. That has yet to happen, and there is now growing talk of an actual rate cut as signs of a global economic slowdown increase.

“The talk of future interest rate increases have basically disappeared,” Federal Reserve Bank of Atlanta Director of Real Estate Analytics Carl Hudson said during his keynote appearance at Bisnow’s event.“Clearly the expectation is that interest rates are going to be at worst flat, and a likelihood of a decrease.”

Wagner said CBRE predicts U.S. GDP will hit 2.3% this year. But it will slow in subsequent years, from between 1.5% to 2% through 2023. A rate cut will likely keep the overall interest rate environment low, which will just continue to expand the growth the economy has been experiencing since the end of the Great Recession, Wagner said.

“But growth may not feel great,” he said in an interview with Bisnow at the event.

There are still plenty of headwinds to the economy that could prompt a recession sooner rather than later.

“We have an asterisk that says Chinese tariffs,” Shlesinger said. “And whatever happens, [that] is going to change everyone globally in terms of economic forecasts.

Hudson said the Fed is closely watching money businesses are spending on fixed assets, such as new equipment or raw materials. The expectation this year appears to be 5.7% growth in that category, which is historically on the low side and down from last year’s 6% gain, according to a recent Kiplinger article.

“My main concern is the business fixed investment remains soft,” Hudson said.

Other panelists raised concerns about an aging workforce, the potential for wage growth to spike, prompting inflation, and the persistence of rising construction costs.

Selig Enterprises Executive Vice President Chris Ahrenkiel said Atlanta office developers could see construction costs approach $1K/SF by 2030 from the current $540/SF today, if the current, historic rate of 5% annual cost increases persists.

North American Properties Managing Partner Mark Toro said Atlanta’s notorious congestion is his biggest concern for the future of the metro area’s economic vitality. Toro was recently named as a board member to the new regional transit agency, the Atlanta-Region Transit Link Authority

“The thing that keeps me up at night, for the most part, is we are running the risk of killing the Golden Goose,” Toro said. “We still think we can pave our way to success and widen our roads, and we’re running out of room.”

https://www.bisnow.com/atlanta/news/economy/despite-headwinds-cbre-sees-no-recession-until-2024-99652

A-Rod takes bigger swing at residential real estate in NYC

Yankee legend Alex Rodriguez is continuing his apartment buying spree in New York City — just not with Barbara Corcoran.

Earlier this month, The Post exclusively reported that the retired third baseman had teamed up with the “Shark Tank” judge to buy a 21-unit rental building in the East Village — the first of what was billed by Corcoran as an ongoing partnership to buy multifamily buildings across the city.

Since then, however, the slugger’s A-Rod Corp. has teamed up with real estate investor and operator Ofer Yardeni of Stonehenge NYC and brokerage guru Adam Modlin of the Modlin Group in what they say is an exclusive as-yet-to-be-named venture to root out and purchase all sizes of apartment buildings and bulk condominium units in the Big Apple.

Corcoran says she and Rodriguez have already discussed his new venture — and that she’s fine with the pivot.

“They buy big stuff, and I’m a private investor and find scrappy stuff,” Corcoran explained.

As to whether or not Rodriguez continues to invest with her, she adds, “I hope so, because he’s a great partner.”

A-Rod also suggested he made the switch because he wanted to go bigger.

“I have always had the ambition of owning rental apartments in New York,” Rodriguez said in a statement.

“Over the years opportunities arose to do so — however, I was hesitant until I could team up with a local partner in New York with a proven track record for managing through the highly regulated environment,” the former Yankee said.

“After several one-on-one meetings with Ofer Yardeni … I concluded that Stonehenge NYC was the perfect partner for me,” Rodriguez said.

Of course, the 14-time All-Star is no novice to real estate investing.

Although Rodriguez’s investment with Corcoran was his first foray into New York City real estate, Rodriguez’s Monument Capital Management already owns about 15,000 apartments in 13 states.

The small Manhattan apartment building he bought with Corcoran, located at 133 Avenue D, was purchased from disgraced former President Trump attorney Michael Cohen and partner Eric Nelson for $8.3 million in a 2018 deal that predated his now-exclusive venture with Yardeni and Modlin.

“We will do what we did for 25 years — identify properties in New York from $5 million to $400 million and continue to acquire in Manhattan but also in the boroughs and collaborate with institutions and high-net-worth individuals,” Yardeni explained.

They will first be zeroing in on neighborhoods such as Chelsea and use Stonehenge’s larger properties to serve as amenity centers for the smaller ones. The venture may later lease out apartments that are beautifully furnished and targeted toward high-end lifestyles, Yardeni added.

The trio met up in Florida last fall during Art Basel when Modlin was having dinner at Prime 112 with Rodriguez and his then-girlfriend — now fiancée — actress and entrepreneur Jennifer Lopez. Spotting Yardeni with his wife, Sheri Yardeni, and son, Josh, an analyst with Lone Star/Hudson Advisors, Modlin decided to introduce them to Rodriguez, another longtime friend.

“We hit it off,” recalls Yardeni. “We met again at the Four Seasons for breakfast the following Tuesday.”

That turned into lunch at Casa Lever and then the whole group spent the holidays with Rodriguez and Lopez in Bel Air, Calif.

The three men talked while a white board was filled with ideas.

“It was almost like a military operation,” said Yardeni, a former Israel Defense Forces soldier. “Alex is a master student and wants to learn. And for two days, we discussed real estate.”

Stonehenge manages properties to institutional standards and uses technology-driven leasing and asset management platforms along with a proprietary tenant application that also impressed Rodriguez, the sports star said.

Modlin is a 25-year veteran broker who concentrates on high-end properties through the Modlin Group and completed $1 billion in sales last year alone.

He understands the valuation of condominiums and, with an eye on bulk condominium purchases, will be overseeing strategic planning while ensuring the building design and layouts meet the needs of today’s residents.

Modlin will also be introducing the venture to some of those high-net-worth individuals who span industries including technology and sports.

“It’s been a life-long ambition for me to own multifamily in Manhattan,” said Modlin. “This is a unique opportunity to work with these two friends I have known for 25 years.”

Yardeni added, “Alex is a well-liked, smart, hard-working guy and I am so happy to be his partner. Alex calls me early, and he motivates me to work in the morning. And as he was a winner in baseball, I have no doubt he will be a winner with multifamily.”

“We believe in the fundamentals of New York City,” Yardeni continued. “It’s still a desirable city despite some of the changes in the law. I don’t think it will affect the quality of life because New York City is a brand.”

https://nypost.com/2019/06/25/a-rod-takes-bigger-swing-at-residential-real-estate-in-nyc/

15-year deadline at hand for NYC sprinkler requirement

A 15-year deadline is days away for building owners to comply with a law requiring fire sprinklers in all commercial buildings 100 feet or taller, a post-9/11 mandate.

The City Council enacted the new sprinkler laws in 2004, based on the recommendations of the World Trade Center Building Code Task Force, empaneled following the attacks on Lower Manhattan. The law mostly targets structures built before 1984, when the city code required sprinkler systems for commercial towers.

At the time the law was enacted, there were 1,230 office buildings more than 100 feet tall without sprinkler systems, according to city Department of Buildings data. Owners of those buildings could face fines if they don’t submit proof they have installed the systems by July 1.

“The safety improvement for the city as a whole from this is unprecedented,” said Daniel Colombini, a principal and director of fire protection at the engineering firm Goldman Copeland. “This has never been done in the world before, where all of the high-rise office buildings have been made substantially safer.”

Cost and return

New sprinkler systems cost between $5 and $8 per square foot in most non-landmarked buildings, said Drew O’Connor, who oversees the management of a roughly 39 million-square-foot city portfolio for Cushman & Wakefield.

Part of the reason the city gave property owners 15 years to comply with the law is that leases typically turn over every five to 10 years. If landlords have to install sprinklers in an office building while tenants are still in place, O’Connor said the costs can rise to $12 to $20 per square foot.

Colombini compared the sprinkler law to the building emissions legislation the City Council passed last month. The bills will similarly enforce a retroactive requirement on landlords, requiring substantial reductions of fossil-fuel consumption in buildings 25,000 square feet or larger.

The green-energy mandates could cost building owners more than $20 billion total, by one estimate. But there is a chance that some landlords could get a return on that investment through long-term energy savings, Colombini noted. A new sprinkler system offers little in the way of returns, outside of some potential property insurance discounts.

“You’re getting a safer building; it is not a capital transaction,” he said.

Meeting the deadline

A Department of Buildings spokesman said the city has approved extensions for 23 buildings where adding sprinklers is complicated by interior landmark status or structural challenges.

The city has steadily sent notices about the pending deadline and required a status update from all city property holders last year. O’Connor said last week that 99% of the Cushman & Wakefield’s buildings are in compliance, with the rest expected to meet the deadline.

“That said, there have been some 15-year leases or landlords that may have thought this law would be pushed out and waited,” O’Connor said, speaking about buildings outside his portfolio. “So there can be a bit of a last-ditch rush.”

https://www.infabode.com/hubs/general-new-york-real-estate-market/hub_posts/110635

Developers Wanted: Cuomo Brings 5 World Trade Center Site To Market

The World Trade Center site from 7 World Trade

New York State is on the hunt for developers to build the final piece of the World Trade Center.

Gov. Andrew Cuomo announced the state is now seeking proposals from developers for the building, known as 5 World Trade Center. It could reach 900 feet, Crain’s New York Business reports, and may be a mixed-use, commercial or residential space.

“Nearly 18 years ago, New Yorkers vowed to rebuild Lower Manhattan stronger than ever and we are continuing to make good on that promise,” Cuomo said in a statement. “This project will create jobs, spur economic growth and bring us one step closer to completing downtown’s rebirth, reflecting New York’s courage and determination in the face of this tragedy.”

The announcement marks the end of an ongoing dispute between the Lower Manhattan Development Corp. and the Port Authority, which have controlled the site. Once known as 130 Liberty St., LMDC purchased it after the Sept. 11 attack and knocked the building on the site down. It then agreed to hand over control to the Port Authority as part of the larger deal that saw the authority donating the site next to One World Trade for what would become the Ronald O. Perelman Center for the Performing Arts.

However, a dispute over what type of property should be built there resulted in a standoff between the two groups, according to Crain’s.

Under the request for proposals, a developer could either buy or lease the site, and may develop a hotel with retail, an office building or a mix of different spaces.

However, Cuomo said if a developer builds a residential offering, it will need to include affordable housing. In the nearly 18 years since the attacks, the Lower Manhattan area has been completely reshaped into an office, retail and residential hub.

Durst Organization and Port Authority’s One World Trade Center, completed in 2014, is now 83% leased. Silverstein Properties’ 4 World Trade Center, 7 World Trade Center and 3 World Trade Center have all opened, and only 3 World Trade has significant vacancy.

As yet, 2 World Trade has not secured an anchor tenant, though developer Larry Silverstein told The Real Deal this year he could consider building it without one — a line he has repeated in the years since his deal with Rupert Murdoch to move his businesses to the new tower fell apart.

https://www.bisnow.com/new-york/news/construction-development/developers-wanted-to-build-5-world-trade-center-99661

Howard Hughes Corp hires Centerview to explore alternatives, including sale

Howard Hughes Corp., an owner, manager and developer of different types of real estate throughout the U.S., has hired bankers at Centerview Partners to explore strategic alternatives that include a sale of the company, according to people familiar with the situation.

The company, a one time spinoff from General Growth Properties, has been struggling to command a valuation that the board, led by its Chairman Bill Ackman, feels is appropriate for a company with its collection of assets and performance metrics.

People familiar with the board’s thinking say it is unclear the company is well suited to the public markets because — unlike most other real estate companies — it is not a REIT, but a C-Corp and has a diverse collection of assets that does not lend itself to the recurring and predictable cash flows real estate investors may be looking for.

The company is both an owner of land, such as 60 acres of beach front in Honolulu, and a developer of residential communities, such as the Woodlands in Houston and commercial developments such as the South Street Seaport, only a few blocks east of the New York Stock Exchange in downtown Manhattan.

Struggling stock

With vacant land, planned communities, shopping developments, self-storage facilities and a longer-term outlook to profit off those holdings, Howard Hughes may not be best for the public markets, at least judging from the stock’s performance over the last three years.

It is down 14%, while both builders and REITS are far higher. That has led management and the board to explore a sale, though its bankers are also exploring joint ventures or spinoffs as part of their mandate, according to people familiar with the situation. The bankers hope to complete the review process by the end of summer.

Ackman, who controls 4% to 5% of the company including stock and derivatives, is said to be fully supportive of the plan to review alternatives. The Pershing Square Capital Management manager did not return calls for comment, nor did representatives of Howard Hughes Corp.

Potential buyers are likely to include giant real estate holders such as Blackstone Group or Brookfield Property Partners. Others could include some of the largest family offices or sovereign wealth funds that are willing to patiently try to harvest a net asset value that analysts estimate at $130 to $170 per share.

In a bullish note out just Thursday morning, analysts at Citi cited the stock’s underperformance and said it is in part due to a slower-than-anticipated leasing of space at the South Street Seaport.

Howard Hughes shares jumped more than 9% following the first publication of this report. It was up 23% in the first hour of trading Thursday.

https://uk.finance.yahoo.com/news/howard-hughes-corp-hires-centerview-134353789.html

Landlord Groups Plan To Sue Over New Rent Laws in Federal Court

The outraged real estate industry isn’t giving up its fight against the state’s new rent-regulation laws, with two landlord groups now planning to try and overturn them in federal court.

The Rent Stabilization Association and the Community Housing Improvement Program are aiming to file a lawsuit by mid-July in New York federal court, the New York Post reports. They will be arguing that the laws are unconstitutional because they infringe on owners’ right against the “unlawful taking of property,” per the Post.

It’s not yet clear if Gov. Andrew Cuomo will be a defendant.

The Housing Stability and Tenant Protection Act of 2019, which passed this month, drastically alters the way landlords and property owners are able to raise rents and remove apartments from rent stabilization. Now, landlords will no longer be able to use the vacancy bonus, a provision that had allowed them to increase rents by as much as 20% when a unit became vacant.

Property owners who provided a preferential rent — a rent lower than they can legally charge — will not be allowed to increase the rent to the full price when leases are renewed.

The Major Capital Improvement and Individual Apartment Improvements programs, which had permitted landlords to pass on the costs of building improvements in rent, have been significantly reduced.

While tenant advocates have cheered the laws, real estate industry professionals are incensed by the legislation — arguing it will damage their businesses and encourage landlords to allow buildings to fall into disrepair.

“It’s very troubling. I made investments in good faith and I am being penalized for making those investments,” Taconic Investment Partners co-CEO Charles Bendit told Bisnow earlier this month. “I thought the legislature and government would come to a more balanced solution.”

https://www.bisnow.com/new-york/news/commercial-real-estate/landlord-groups-planning-to-challenge-new-rent-laws-in-federal-court-99614

Facebook in talks for 1M square feet in Hudson Yards

Facebook (NASDAQ:FB) is in major talks to take at least 1M square feet in the fast-growing Hudson Yards project, quickly establishing a technology sector on the west side of Manhattan.

That deal is close enough that the developers (Related Cos. and Oxford Properties) put aside a deal for about 450,000 square feet that law firm Debevoise & Plimpton was considering, Crain’s reports.

Facebook has office space in several New York City locations, but a recent search for a big new space has had landlords lining up to court the company, including potential deals like redevelopment at 1 Madison Ave. and a soaring office skyscraper that Vornado would build across from Penn Station.

https://seekingalpha.com/news/3473734-facebook-talks-1m-square-feet-hudson-yards-report

States Are Turning To Rent Control: How It Affects Affordable Housing

With about half of American renters spending more than 30% of their incomes on housing, advocates in cities and states across the country are building efforts to revive rent control policies.

In February, Oregon became the first state to impose a statewide rent control policy. And lawmakers in New York, Washington and California have proposed bills they say will protect tenants and allow low-income individuals to find reliable housing.

But why now? Is rent control is the best approach to lessen displacement and create affordable housing for all?

The Cases For And Against Rent Control

“Economists are still united that rent control has a lot of side effects, and it clearly has benefits, as well, for the people that are protected by rent control laws,” Palmer said. “And I think that’s why it keeps coming back. We have an affordability crisis and there is a deserving set of people that are renters and they’re struggling.”

“There are these benefits from having affordable housing units for low-income tenants. My research shows that you can think of rent control and affordable housing policies more broadly as providing insurance … if the loss of a job, for example, leads one to also lose one’s house,” Van Nieuwerburgh said. “I think as long as needy households are the ones who are ultimately the beneficiaries of this insurance … there can be large benefits from provisions of this insurance [that are] large enough to outweigh these costs.”

Palmer: “Rent control does a good job at helping current residents stay in their home, but it arguably backfires at making affordable housing more accessible. That is the pernicious effect of the fact that if you’re going to cap rents, it’s going to reduce incentives for people to supply housing. That might not be new housing — modern laws try to keep full incentives for supplying new housing — but people are more likely to convert to condos or to occupy their own unit. So we have a lot of leakage from the system. Rents end up rising for everybody else. It becomes harder to find a rent controlled apartment — everyone is staying there for a long time — and it makes the problem worse.”

Does Rent Control Benefit Those Who Need It Most? Not Always.

Palmer: “Often, the landlords we’re talking to feel very squeezed. And I’ve talked to landlords that say, ‘The tenants that I’m renting to make much more than I do and I’m subsidizing them while I’m being squeezed with costs rising for me.’ ”

Van Nieuwerburgh: “[Rent control] creates, in my view, a lot of housing misallocation, where the wrong type of tenants ends up in a lot of these affordable housing units. Maybe they were low-income when they first qualified for these units, but then over time, because they’re aging, their incomes go up and they make actually quite a lot of money, yet they’re allowed to stay in these units. So I think this housing misallocation problem is also an important feature.”

How Do U.S. Cities And States Value Housing Stability, And What Are Its Benefits?

Van Nieuwerburgh: “This boils down to, as a society, where do we want to fit on that tradeoff between efficiency and redistribution equality? All of economics comes back to, where on the spectrum do you want your society to be? The fact that a lot of Democrats have returned to rent control, in a lot of different places, has kind of tilted that balance towards more redistribution, more equality, and I think this is a good thing.”

Palmer: “People will look at the data and say, ‘Where are the promised rent decreases now that we’ve had a little bit of an increase in supply?’ … I don’t think what we mean — and we need to do a better job communicating this — is that an increase in supply is going to lead to outright decreases in rent. The idea is that the problem will be even worse if we don’t continue to build. And so I think that’s one of the pressures that we see in areas where foreign money is coming in, or areas where there are other pressures on price, and homeownership becomes unattainable.”

Van Nieuwerburgh: “There’s something to be said for having socioeconomic diversity at the neighborhood level. I think part of what is driving this push for more affordable housing is this idea that cities like New York City are losing 50,000, 100,000 rent-stabilized housing units pretty much every year for four decades now, and it’s affecting the ability of having economic diversity in every part of the city.”

What’s Happened In Oregon?

“Here in Oregon, we saw tenants who had been longtime tenants suddenly displaced with just a 30-, or 60-, or a 90-day notice, even though they had been paying their rent on time for years, following the contract and being great neighbors,” Fagan said of life before the state’s new rent control laws. “After a first year of tenancy here in Oregon, we’ve now banned the practice of no-cause evictions. The landlord will actually have to have a legitimate cause in order to kick someone out of their home. And then, second, we have [added] a rent stability feature to our new law, which provides that during a tenancy, a landlord cannot raise the rent by more than 7% plus inflation. So roughly 10% per year.”

Unaffordable Rent As A Statewide Issue

“Oregon has the highest rate of homeless kids per capita of any state in the country. And Multnomah County, which is that big county that really encompasses Portland [the most populous city in Oregon], and the Portland metro area, is not even in the top 50% of Oregon counties facing homeless students,” Fagan said. “And we know that rent-driven homelessness is really the leading cause of homelessness here in Oregon. And so it really is a statewide problem, and it needed a statewide solution.”

Balancing Rent Control With An Increase In Affordable Housing Stock

“We want to make sure that we’re not disincentivizing development, because we are about 150,000 units short, statewide, right now in Oregon. And so we need to be building units, and we’re taking a ‘yes, and’ approach, not an ‘either, or’ approach,” Fagan said. “We have some other legislation that hopefully you’ll be hearing about soon, where we are considering statewide banning of single family zoning in Oregon, and making sure that we can allow duplexes, triplexes, quadplexes on any property that otherwise meets city sighting and design requirements.”

https://www.american-apartment-owners-association.org/property-management/latest-news/these-states-are-turning-to-rent-control-how-it-affects-affordable-housing

Mom-and-pop landlords push investor share of home purchases to 19-year high

Small investors are making inroads against large institutions but they may be grabbing homes that first-time buyers would take gratefully.

More homes are being bought by investors, and their purchases are concentrated among starter homes, making it even harder for first-time buyers to break in to the housing market, according to a new analysis.

Investors commanded 11.3% of all purchases in 2018, according to CoreLogic, a real estate data company responsible for the report. That’s the highest level since 1999, and even dwarfs activity between 2012 and 2014, when the housing market was still mired in distress and big financial institutions with deep pockets swooped in.

For starter homes, investors account for one in five transactions, CoreLogic said.

What’s notable about recent activity is that smaller investors, not big financial institutions, are driving the uptick. Large investors’ share has declined from 24.3% in 2013, the aftermath of the crisis, to 15.8% last year.

Investors who purchased 10 or fewer homes were responsible for 60% of transactions in 2018, up from 48% in 2013. And those mom-and-pop investors are buying entry-level homes: 20.3% of them in 2017 and 2018.

Perhaps because lower-priced homes are more plentiful in metro areas that are seeing cooler growth, the housing markets with the greatest share of investor activity aren’t high-flyers. Detroit, Philadelphia, and Oklahoma City are among the top five communities with greatest investor activity. (Memphis, which has for some time been known as a hotbed of activity for the single-family-rental boom, is as well.)

In markets where investors have a stronger presence, there’s less housing inventory. But CoreLogic cautions against blaming them for the housing shortage. “While it’s certainly possible that an increase in investors into a market increases competition and lowers supply relative to aggregate demand, the opposite is also possible: markets with tightening supply could draw investors as they perceive markets with a dwindling supply to be safer bets than those with a more plentiful supply,” the group wrote.

https://www.marketwatch.com/story/mom-and-pop-landlords-push-investor-share-of-home-purchases-to-19-year-high-2019-06-20?siteid=rss&rss=1

KB Grand Opening of Cottages at Harbor Pointe in Harbor City, Cal.

New KB homes now available in the Los Angeles area. (Photo: Business Wire)

At Cottages at Harbor Pointe, KB Home will construct 48 townhome-style condominium homes in five distinct floor plans. With up to four bedrooms and three-and-a-half baths, and ranging in size from approximately 1,350 to 2,100 square feet, the KB homes at Cottages at Harbor Pointe feature desirable design characteristics like open floor plans and walk-in closets. Pricing begins from the $570,000s.

Residents of Cottages at Harbor Pointe will enjoy the gated community’s planned amenities, including a park, dog run, tot lot and barbeque area. Nearby Charles H. Wilson Park features a variety of sports courts and fields, a reservable outdoor amphitheater, a splash pad, an accessible tree house, a roller hockey rink and the twice-weekly Torrance Certified Farmers’ Market. Ken Malloy Harbor Regional Park and Machado Lake offer a variety of water activities and are home to over 300 species of migratory birds.

“At Cottages at Harbor Pointe, Southern California homebuyers have the opportunity to create and personalize a new home close to myriad urban amenities,” said Glen Longarini, president of KB Home’s Los Angeles/Venturadivision. “KB Home’s team of dedicated professionals will guide KB homebuyers through our simple homebuying process.”

The KB homes at Cottages at Harbor Pointe will be built to current ENERGY STAR® certification guidelines and include WaterSense® labeled faucets and fixtures, meaning they are designed to be more energy and water efficient than most typical new and resale homes available in the area. These energy- and water-saving features are estimated to save homebuyers between $564 and $684 a year in utility costs compared to a typical resale home, depending on floor plan.

KB Home’s distinct home building process allows buyers to personalize many aspects of their new home to suit their budget and style. After selecting their lot and floor plan, KB homebuyers can work with expert design consultants, who will guide them through every aspect of the process at the KB Home Design Studio, a retail-like showroom where they can select from a variety of design choices, including countertops, cabinets, lighting, appliances and window coverings.

The Cottages at Harbor Pointe sales office is located at 24500 Normandie Ave.in Harbor City. From I-110 South, exit Sepulveda Blvd. and turn right. Turn left on Normandie Ave. to community on the left. The Cottages at Harbor Pointe sales office is open daily, 10am to 6pm.

https://seekingalpha.com/pr/17552285-kb-home-announces-grand-opening-cottages-harbor-pointe-harbor-city-california

Making a modern beach house in the aftermath of Hurricane Sandy

This Long Beach Island, New Jersey, home was about to be built when Hurricane Sandy hit. “The old house had just been razed 10 days before the storm,” says owner Stephanie Carpenter. “It was a terrible event, but our area was incredibly lucky and, for the most part, the sand dunes did their job by sheltering this block.”

“It was chaos after the storm,” says architect Scott Specht of Specht Architects. “In the wake of it, FEMA [Federal Emergency Management Agency] changed the rules, and new homes needed to sit higher off the ground. The house we designed no longer worked, and we had to start from scratch.”

Its waterfront location means the home sits high on pillars. The vertical panels (left) are designed to break away in the event of a hurricane.

The hurricane set the project back by 20 months, but according to the owners (Stephanie, her husband Craig, and their three children), it’s a story with a silver lining. “It changed many things about the house—and it turned out for the best,” says Stephanie.

The big change was to the height of the house: They had planned on a three-story home. New regulations required the structure to sit higher off the ground, but local regulations prohibited them from raising the height of the roof—so it went from three stories to two. Of course, that made for a more compact space.

Clockwise from top left: A simple entry made of rugged materials makes an easy path between the beach and the home’s interior; the family heads to the water; the rooftop deck is done in fiberglass, like a boat deck—and it’s Craig’s favorite spot.

In addition to the new requirements, there was also a heightened awareness of the kind of damage a superstorm can do. “We rethought the whole process, and we opted for more extreme safety measures,” says Specht. “We built it like a boat designed to weather a storm. The roof deck is made of fiberglass, like the hull of a boat. We upgraded the windows and doors, choosing even stronger options and stainless steel trim. We also switched to cedar siding, which is durable and long lasting. This is a very resilient house.”

The clients have no regrets. “Some of the spaces are smaller, and we have fewer bathrooms, but in the end we have a better house for us,” says Stephanie.

One thing that didn’t change was the modern aesthetic. When Stephanie was in college, her parents built a contemporary home in the Midwest. “I fell in love with Modernism then, and I think that set me on this architectural path,” she says. “My husband feels the same way, so there was no question in our mind what kind of home we wanted.”

The master bedroom has its own outlook on the water. The Notturno bed is by Flou; The Berenice wall light is from YLighting; a TG-10 dining chair and the Kieran Stump side table are from BDDW.

So, although the weathered cedar is a classic choice in this beachside setting, the stark lines are something that’s a bit new to the neighborhood. “It’s more modern than the neighboring houses, but I like that juxtaposition,” says Specht. “It’s a house that runs counter to the nearby homes, yet it completely fits.”

Not only does it fit the site, it fits the family. “We are all in love with this home, it’s a sanctuary for us,” says Stephanie, who grew up visiting the Jersey Shore. Noting that their beach lives are very different from their New York City existences, she says: “It’s really nice to be in a setting where if the kids want to walk out the front door, they don’t have to ask.”

An Arc dome pendant and globe set from Allied Maker top the stairwell; the home’s connection with the beach is immediate, and the family takes advantage of it.

The architect says that trial and error led to the family’s perfect match. “We got to the right house by designing the wrong house,” Specht says. “Our first design was more precious, and made a statement with a grand entry. In reality, this is a house with lots of kids and lots of activity. They didn’t need a fancy glass entry, they needed a durable space where people could come in and out from the beach in wet and sandy swim clothes.”

That beach lifestyle drove the entire layout. “Many homes on Long Beach Island are built in ‘reverse living,’ with the bedrooms on the lower levels and the common areas on the upper levels,” says Stephanie. “That arrangement didn’t feel comfortable to us, so we chose a more traditional floor plan with the living space below the bedrooms—we get to wake up with the sunrise.”

In the living room, a Hepburn sofa from Minotti is flanked by a Cage side table and a Drought side table. The Equalizer light fixturefrom Ladies and Gentlemen Studio over the dining room table makes a statement. A ombre wallpaper is Aurora Ray from Calico.

The architect notes that while he sees the merits of both styles, for this family it was the correct choice. “Given how often they are in and out of the house during their stays, it would be awkward for them to have to go up two floors to the kitchen.”

No matter what the level, the rooms are designed to focus on the dunes, waves, and sky. Decks on each floor are a visceral connection to nature, and clerestory windows on the sides frame views of the skies. “When homes sit this tightly together, it’s a bit of a design challenge,” says Specht. “We solved it in a classic way, making the east and west sides as open as possible and giving the north and south sides clerestory windows that let in light and views while providing privacy.”

Clockwise from top left: The Shell chair is by Marco Sousa Santos, the dog sculpture is by Jim Budish, the painting is by Maggie Simonelli, the Soft Stone pouf is from Viva Terra; a Pelican chair by Finn Juhl and a Screw table by Pat Kim sit on an Oasis rug from Tibetano; Stephanie says that the original design included a swimming pool. When the storm altered their plans, it was deleted. “We realized we didn’t need it, we are beach people,” she says.

The rooms themselves are designed with spots for gathering, privacy, and sometimes both at once. The architect notes that bedrooms are small, but each of the three children has their own. The open-plan living room, dining room, and kitchen bring everyone together.

“The area under the stairs started with the chair and the bronze dog, and grew from there. It became the spot were we all go when we want to be close to the action, but a little bit separate—alone but together,” says Stephanie. “It’s for resting, reading, or doing the crossword.”

Given how much time the family spends here, there’s ample opportunity for family time; this is no summer retreat that’s shuttered when school starts in the fall. “We use the house year-round for free weekends, holidays, and school vacations,” says Stephanie. “This is a place where we can really relax no matter what the season.”

Contractor: Rolf Demmerle, Demmerle Builders

https://www.curbed.com/2017/8/7/16072666/modern-home-tour-long-beach-nj-specht-architects