Are Perrys in market for Governor's Condo?

12:10 AM CDT on Friday, September 14, 2007

By CHRISTY HOPPE / The Dallas Morning News

AUSTIN – Housing values might be dropping elsewhere, but for one Austin couple, the task of finding an affordable, suitable home has proved daunting.

Rick and Anita Perry need to move out of the Governor's Mansion next month for a planned 18-month, $10 million renovation of the historic 1856 building that has been their home for almost seven years. And by no less authority than the Texas Constitution, they must live in Austin, which also happens to be the most expensive housing market in the state.

When you're used to a house with nine fireplaces across the street from your Capitol office, the commute alone will be a step down.

"It's like anybody else who has to go out and look to find a house," press secretary Robert Black said.

Well, not exactly. The mansion has an electronically sophisticated guesthouse, occupied by the Department of Public Safety security detail, that will be hard to replicate.

"The first lady and DPS have been looking at a number of places," Mr. Black said.

"There are security concerns and there is the ability to still have official functions, and the logistics that come along with both of those – cars and traffic. And, of course, cost," Mr. Black said.

The search started downtown, where there are numerous upscale condominiums. For example, former Gov. Ann Richards lived at the nearby Nokonah, where her 2,500-square-foot condominium recently went on the market for $1.25 million.

But the governor's new digs will be paid for by taxpayers, and there is some political sensitivity about the cost.

"Downtown gets a little pricey," Mr. Black said.

When Gov. George W. Bush had to move out of the mansion in 1999 for a few weeks because of construction, he and his wife, Laura, stayed at the Four Seasons. That's not really practical for 1 ½ years.

In 1979, when Gov. Bill Clements vacated the mansion for a year's renovation, he and his wife, Rita, stayed in a downtown high-rise condominium. But Austin was going through a real estate bust then.

There are currently 22 listings in the central Austin area for rental homes of at least 1,800 square feet. Most of them are in the $3,000-a-month range, with the high at $6,500, said longtime Austin real estate agent Steve Crossland.

Compared with the mansion, in the hub of downtown, "He's going to have a hard time finding something that close in" that would be big enough and affordable, Mr. Crossland said.

Mr. Black said the governor has recognized that fact.

"Prices are pretty darn high in the Austin market," he said.

Former Arkansas Gov. Mike Huckabee faced a similar quandary in 2000 when his governor's mansion underwent a renovation. He and his family moved into a triple-wide mobile home parked on the mansion's grounds.

"I don't think that's going to happen," Mr. Black said wryly. "We'll find something."

Question: What's a New Year's resolution you wish your local leaders would make for 2007?

12:00 AM CST on Saturday, December 30, 2006

Approve public funding of elections like the Clean Elections law in Arizona.

Lynn Walters, Irving

I wish the city leaders of Lewisville would not clear-cut any more land for buildings that end up empty. When we moved here 18 years ago, there were trees and fields everywhere. Now, all I see are empty shopping centers and storage buildings.

Jennifer Lane, Lewisville

My hope for the new year is that the Bedford City Council members will really strive to understand the issue and hear more than one side before they vote on a resolution or ordinance.

Debbie Schmid, Bedford

I wish that state legislators would be more concerned about clean air than about the bottom line of TXU and the cement kilns in Midlothian. They are allowing these companies to reap unnecessary profits at the expense of the air quality of the entire area. Our elected officials should be demanding that these companies use the best available technology to reduce emissions.

Lois Day, Irving

Stop issuing building permits for commercial and multifamily developments without more-than sufficient infrastructure in place to support them: roads, water, drainage, electricity, green space. All the tax benefits in the world we may derive from new commercial entities cannot make up for the heavy traffic, water shortages, poor roads, flooding, crowding and loss of the country-living atmosphere for which we moved here.

Gale David, Flower Mound

It is my eternal wish that the City Council in Irving would make a serious and immediate plan to upgrade and even save the numerous older neighborhoods in Irving that have deteriorated dramatically in recent years. They are breeding places for crime and are causing longtime, good families to leave our town. This issue gets serious discussion at election time only, and after elections, no one exercises the leadership to make a difference.

Nell Anne Hunt, Irving

Return to focusing on common sense instead of teamwork – common sense usually leads to teamwork. The other way around usually leads to the tail wagging the dog and the will of the taxpayers being ignored.

Sue Richardson, Irving

Nov. 10 front page: "Legislators slam record TXU profits." How about a resolution to follow through on getting this back under control?

Butch Murden, Irving

Try telling the truth, the whole truth and nothing but the truth. I wish they would also do what we, the people, ask them to do and not what they think is best and in their self-interest.

Alfred Hersh, Carrollton

When they say they will help education, please spend some time in schools and classrooms to see what will really help education.

Tammie Gurley, Lewisville

Protect property owners from having their land taken, and protect citizens from taxation when used for private economic development in the form of sports stadiums, condos, retail shops, private toll roads, etc. Quit wasting millions and millions of dollars in tax money on "pet" boondoggle projects!

Linda Lancaster, Arlington

Enforce our laws, and cut wasteful spending of tax dollars.

Janice Grimm, Denton

Stay focused. It seems as though things sometimes get so sidetracked that nothing gets accomplished. Make a list, and mark things off as they get done!

Judy Gaman, Southlake

Stop raising taxes and spending. In Arlington, we have a problem with the City Council loving to do both.

Richard Weber, Arlington

Make it known to us what they are doing for the public! Promises made, promises kept, promises in progress! That way, we can intelligently determine if we want to keep or change them.

Shirley Gordon Jackson, Arlington

Dallas landmark bites the dust

12:23 PM CDT on Saturday, September 30, 2006

By AARON CHIMBEL / WFAA.com Mobile Journalist

Standing on what was the foundation of Baby Doe's Matchless Mine, Roy White, Jr. remembers the night he took his wife there for a surprise dinner.

The lifelong Dallas resident made just one trip to the restaurant that sat atop Goat Hill for more than 30 years, but he says it had a special place in Dallas. "It’s a landmark and it’s a very unique location and the intimacy of it when it was here," said White, who was there working for Dallas Water Utilities.

This week, Baby Doe's was bulldozed. It had been closed for more than a year. The owners of the five-acre property at the intersection of Interstate 35E and the Dallas North Tollway, Cienda Partners, bought out the remaining 25 years on the restaurant's lease and decided the site would be easier to sell if the boarded-up and graffiti-laced wooden building was gone.

"It was not a hard decision," said Cienda’s Phil Wise. "The site is five acres and has been under-utilized for years."

David Glasscock, an executive vice president at Colliers International, was hired to market the property, He said the restaurant had outlived it economic use. The land was simply too valuable to be home to just one restaurant.

"It's the most prominent site in the city," he said.

Cienda bought Goat Hill, the slice of raised land wedged between Harry Hines Boulevard and Interstate 35E and Oak Lawn and Victory Park, two years ago with the intention to sell it to developers. Wise said they have already received offers, and the site will probably be a mixed-use high rise with a hotel, condos, offices, shopping and restaurants all possibilities.

Both Wise and Glasscock said the proximity to downtown, uptown, Victory Park, Oak Lawn, The Katy Trail, American Airlines Center and several local highways—in addition to the elevated terrain—make Goat Hill attractive to developers.

Wise said just because the property is for sale, it doesn’t mean they will take any offer. "We’ve owned it for two years, and would be happy to own it for 25," he said.

But Glasscock is still pushing the property, and said it would take at least two years to complete any new development. He predicts that whatever materializes on Goat Hill will have the iconic status Baby Doe's did.

"Whatever is there will be a landmark," he said.

Consumer confidence falls in May, research group says

05:08 PM CDT on Tuesday, May 30, 2006
Associated Press

NEW YORK – Consumer confidence soured in May, as Americans fretted about the overall economy's future and the job outlook. The drop in a widely watched barometer of sentiment was the steepest since hurricanes pummeled the Gulf Coast last year, increasing worries about the health of consumer spending.

The New York-based Conference Board said Tuesday its consumer confidence index fell almost seven points to 103.2, down from the revised 109.8 in April. Still, May's reading was better than the 100.9 expected by analysts.

The decline stalled a rebound seen since November in the aftermath of last year's Gulf of Mexico hurricanes, which sent the index down 18 points in September. The exception was a dip in February when short-lived pessimism over the job market hurt consumer sentiment.

"Consumer confidence, which reached a four-year high in April, lost ground in May," said Lynn Franco, director of the New York-based Conference Board Consumer Research Center, in a statement. "Apprehension about the short-term outlook for the economy, the labor market and consumers' earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer."

Still, Franco said, consumers rate current conditions favorably.

The Expectations Index, which measures consumers' outlook over the next six months, fell to 83.7 in May from 92.3 in April. In fact, the proportion of consumers expecting their incomes to rise in the months ahead fell to the lowest level in three years, the survey reported. The Present Situation Index, which measures how shoppers feel now about economic conditions, slipped to 132.5 from 136.2.

Economists closely monitor consumer confidence because consumer spending accounts for two thirds of all U.S. economic activity.

Souring confidence, along with a jump in oil prices and a lackluster sales report from Wal-Mart Stores Inc., sent stocks plunging Tuesday. The Dow Jones industrial plummeted 184.18 points, or 1.63 percent, to 11,094.43.

The setback in confidence in May – while anticipated amid higher energy costs – is discouraging for retailers, which have seen sales slow during the month. In fact, Wal-Mart, the world's largest retailer, expects May sales at stores open at least a year to rise a modest 2.3 percent, at the low end of expectations. It cited high gasoline prices as a big factor. Wal-Mart and other major merchants are slated to report monthly results Thursday.

While shoppers have remained resilient in the face of higher gasoline prices, which have been hovering around $3 per gallon, the question is what will it take for consumers to dramatically cut their spending.

An AP-Ipsos poll in early May found 70 percent of Americans expect that increases in gas prices will cause financial hardship over the next six months – up from 51 percent a year earlier. The national telephone survey of 1,000 adults had a sampling error margin of plus or minus 3 percentage points.

So far, "there is a lot more worry about higher gasoline prices than there is action," said Mark Vitner, senior economist at Wachovia Securities in Charlotte, N.C. "Higher gasoline prices have certainly eaten into purchasing power, but spending is still barreling forward."

But Vitner noted that anxiety is building among consumers about what higher interest rates and higher energy costs will mean to the economy.

In a worrisome report issued last week by the Federal Reserve, core inflation, which excludes food and energy, rose 2.1 percent in April, the biggest gain in 13 months.

That's making economists nervous that high increases in oil prices are now expanding into other areas of the economy. And the Fed, which has been on an interest-hike campaign over the past two years, is being confronted with the challenge of keeping inflation in check without slowing the economy and hurting the housing market further.

Conflicting economic data is also making shoppers feel more uncertain about their future, said Karl Bjornson, retail strategist at Kurt Salmon Associates.

"We are in this conflicting, choppy water place, and consumers are beginning to be concerned," said Bjornson. He cited fluctuating gasoline prices and mixed messages about the housing market. Recent reports show the housing market has exhibited a split personality, with some hot markets in Florida, California and Arizona slowing down while some laggards are picking up momentum.

The Conference Board index was derived from responses received through May 23 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households.

Consumers' overall assessment of current conditions eased but remains upbeat. But consumers' outlook for the next six months, which improved moderately in April, turned pessimistic in May. Those expecting business conditions to worsen increased to 13.2 percent from 9.3 percent. Those expecting business conditions to improve declined to 16.5 percent from 17.3 percent.

The outlook for the labor market was also less upbeat. Those anticipating more jobs to become available in the coming months declined to 14.6 percent from 15.4 percent in April. Those anticipating fewer jobs rose to 18.2 percent from 16.3 percent. The proportion of consumers anticipating their incomes to rise in the months ahead fell to 16.6 percent from 18.0. That was the lowest since July 2003 when it fell to 15.9 percent.

Abandoned building near City Hall slated for condominiums, retail

Board approves $15 million in public subsidies

09:26 AM CDT on Friday, May 12, 2006

By DAVE LEVINTHAL / The Dallas Morning News

One of downtown Dallas' oldest buildings is primed for renovation from abandoned hulk into condominiums and retail space, now that a City Hall board has approved $15 million in public subsidies for it.

Built in 1910, the structure at 500 S. Ervay St. will be converted to 321 residential units and 45,000 square feet of retail, according to Bisno Development Co., which owns the property.

The building, vacant for most of the decade, sits across Ervay from City Hall.

The Downtown Connection Tax Increment Financing District board approved the $15 million in subsidies, subject to several caveats.

One is a report from the developer about how it will fulfill affordable housing requirements.

The Dallas City Council must approve the deal, which probably will come before it next month, city officials said.

"I don't believe the project can go forward without the subsidy," said Robert Bisno, chairman and chief executive of Bisno.

"But it's a great project."

Systemic risk is on the bubble

Danielle DiMartino
07:45 AM CST on Monday, March 27, 2006

The mortgage market remains a mystery to virtually every American.

For starters, the sheer size is inconceivable; it's hard to get your mind around a fast-growing $8.7 trillion market. Even saying it's more than twice the size of the U.S. Treasury market doesn't put things into perspective for the layman.

Try this bit of context, then: The mortgage market is so big that it has the ability to introduce systemic risk into our financial system.

Systemic risk is risk that affects an entire financial market or system, not just specific participants. As such, it's impossible to escape systemic risk through diversification.

The last time systemic risk reared its head was in 1987, when a steep sell-off in stocks triggered a huge number of Wall Street firms' portfolio insurance.

Reactionary, simultaneous, automated selling pressures succeeded in overwhelming a stock market that was supposed to be impenetrable.

Similarly, every time there are large swings in the Treasury bond market, automatic sell or buy orders are triggered in the mortgage bond market.

This intermarket dependency has yet to trigger a crisis of any kind. But then, the system has yet to be put to the test.

All of that could change as the loose lending standards of recent years collide with a buckling housing market.

Too alarmist?

Sound too alarmist? Consider a few facts:

•The collateral backing mortgages is stretched precariously thin – one in 10 homeowners has zero-to-negative home equity.

•Recent estimates put one-quarter of all mortgages underwritten last year in the subprime, or riskiest, category. That's well above the 13 percent average share for the decade through 2005.

•Even after adjusting the rate downward to account for Hurricane Katrina, mortgage delinquencies ended last year at 4.55 percent, an 18-month high. And subprime delinquencies are pushing 12 percent.

•Despite historically low borrowing costs, households spent a record amount of after-tax income at year-end to pay required principal and interest payments.

•In the next two years, about a quarter of all outstanding mortgages – or more than $2 trillion worth – will reset at higher rates.

•A record 62 percent of commercial banks' earning assets are mortgage-related.

The elephant

For good measure, Goldman Sachs recently recognized the elephant in the room:

"These are the early days. An ongoing deterioration in credit quality in an environment of improving labor market performance and rising home prices is therefore quite significant."

Home prices continue to appreciate at a double-digit pace, providing an out to many homeowners in the form of the ability to refinance or sell the house.

That's good, but the point is, there's already visible strain on the credit system, and the good times are still rolling.

Of course, we've lived through credit bubbles and their aftermaths before. What's new this time is how concentrated the banking system's bet is on the future of real estate.

Throw hedge funds' role into the mix and you've got all the ingredients for a batch of systemic risk.

Builder's retro units are hot sellers

Dallas townhomes are patterned after old fire stations

07:48 AM CST on Thursday, February 23, 2006

By STEVE BROWN / The Dallas Morning News

Builder Terry Gaston has a thing for old fire stations.

He's spent hours poring over pictures of historic firehouses and visiting the landmarks around town.

And residents in his Dallas townhouse projects get to share in his love. At least on the outside, the central city projects are patterned after the early 20th-century fire stations.

"Inside there is everything you'd expect to find in a new home," said Mr. Gaston, whose Brandenburg Homes sells the retro units for between $250,000 and $500,000.

He's just finished the seven-unit Fire Station Lofts project on Cedar Springs Road in Oak Lawn. The 1,600- to 2,100-square-foot units were inspired by the nearby historic firehouse.

"We sold those out before they were done," said Mr. Gaston, who has other projects in the works in Oak Lawn and East Dallas.

Originally, Brandenburg Homes was building traditional houses in northern Oak Lawn.

"We had never done townhomes," Mr. Gaston said. "My partner, Jeff Blackwell, and I were fascinated by old designs.

"I was taken with firehouse designs in particular," he said.

To get some styling clues, Mr. Gaston looked at vintage photos and plans at the Dallas Fire Fighters Museum near Fair Park.

"We are trying to build something that looks historic and fits in with old neighborhoods," he said.

"We don't want to build something you'd see in Plano."

Mr. Gaston worked for high-tech firms – including Texas Instruments and E-Systems – before forming the homebuilding company in 2000. Since then, Brandenburg Homes has built more than three dozen homes.

David Lovelace, who purchased one of the Cedar Springs units, said he was initially attracted by the interior design and quality of the townhouse.

"I appreciate the fact that it was different, and I liked the way it looked from the street," Mr. Lovelace said.

Mr. Gaston is a stickler for details. Brandenburg Homes was even nominated for a Preservation Dallas award for one of its projects on Mission Avenue that mimics a historic East Dallas fire station.

The builder's latest FireHouse Lofts project is under construction in the Lower Greenville neighborhood.

Each of the six units will have three bedrooms and two baths and a rooftop deck. They range from about $360,000 to almost $430,000.

"They are unique, and people seem to like them," Mr. Gaston said.

Housing Price Appreciation Cooling Slightly

by Kenneth R. Harney

The housing price appreciation boom isn't dead, it's shifting to new real estate markets. Arizona and Florida are on fire, but San Diego and Boston -- once the hottest markets in the country -- are now distinctly moving into a cooling phase.

The third quarter appreciation report issued by the Office of Federal Housing Enterprise Oversight (OFHEO) last Wednesday documented a modest decline in the national average annual appreciation rate -- 12 percent versus 14 percent last quarter. But the report also identified a new batch of leaders in house price growth: Arizona, where the average home soared a stunning 30 percent in resale value between the third quarter of 2004 and the same period this year, and Florida, which now accounts for 11 of the top 20 fastest-appreciating metropolitan real estate markets in the U.S.

Arizona and Florida replace California and Nevada, which had dominated OFHEO's hot-spot list for much of 2004-2005. Now California has just one market in the top ten, and that is relatively tiny Merced. Phoenix-Scottsdale was the fastest-appreciating major urban area over the past year, with average price gains per existing house of 34.4 percent. Prescott, Arizona saw average gains of 28.3 percent and Tucson gained an average 24 percent.

Florida markets sizzled at record-breaking rates, higher than any time in the past three decades: Cape Coral (33.2 percent), Naples (32.3 percent), Sarasota (30.4 percent), Orlando (28 percent) and West Palm Beach and Fort Lauderdale (26.7 percent).

The slowest-appreciating markets in the U.S. last year, according to OFHEO, were in the Rust Belt and parts of the Rocky Mountain region. Mansfield, Ohio, for instance, came in dead last among 260 markets with a 0.76 percent annual appreciation rate. Greeley, Colorado, was next slowest with average value gains of 0.7 percent in the third quarter but a net 2.2 percent gain for the full year. Denver saw just a 4.1 percent gain during the 12 month period covered by the study.

Texas markets continued to show generally modest growth rates -- Fort Worth gained an average 3.8 percent, Dallas 4.2 percent and Houston 4.6 percent.

Among the previously-sizzling markets now showing pronounced slowdowns are metropolitan Boston, which registered a 7.2 percent annual appreciation rate -- down from double digits throughout much of 2001-2004 -- and San Diego, which saw appreciation in excess of 24 percent last year. San Diego's third quarter rate of gain -- 1.7 percent or 6.8 percent annualized -- portends more significant cooling ahead. Boston's annualized quarterly rate was even lower -- 3.6 percent.

The new OFHEO numbers support the view of National Association of Realtors chief economist David Lereah that the real estate market is headed for a "return to more balance" -- especially in the once-superheated markets of the West Coast and New England. The appreciation action instead has now shifted south -- to the desert and to Florida -- in part because of net population inflows to those areas plus transfers of investment dollars out of the cooling markets.

A front -- page New York Times article last week, for instance, described a Long Island homeowner who sold his house for $550,000 and bought a larger home in St. Augustine, Florida, free and clear of mortgage debt for half of his tax-free gains. The seller said he knows of "dozens" of others from his area who were making similar moves.

But once prices inflate in Florida and Arizona to noneconomic levels -- out of line with what's affordable by in-migrants and local households -- those markets too will inevitably correct and begin to cool off.

After that, where are the next potential hot spots? Look to areas where prices are relatively moderate by national standards, and where appreciation rates have been steadily moving up after long periods of low annual gains. The new OFHEO data suggest a possible future contender: Utah, which had a 15 percent rate of gain this past year, after being among the slowest-growth states for years.

Slam the door on tax proposals

Cutting deductions on homes would hurt, not help, U.S. economy

10:30 AM CDT on Friday, October 28, 2005

President Bush's tax reform advisory commission is suggesting that we slash the home mortgage interest deduction and eliminate the home property tax deduction.

Why not raise interest rates to 20 percent and put an extra $6 per gallon tax on gasoline at the same time?

As long as we are going to trash the economy, let's do a complete job of it.

Housing, after all, has been the stalwart segment of the U.S. economy since the 1990s.

For the last two years, all consumers have heard is that the housing market is teetering on the brink of a crash.

Now the federal government wants to shove it over the edge.

In North Texas, the plan to do away with mortgage deductions on loans of more than $350,000 won't have a big impact.

After all, the average house here sells for less than $200,000.

But many East and West Coast markets have seen soaring home appreciation in the last few years. In those states, $350,000 won't buy much.

The real impact here would be the property tax proposal.

In states such as Texas, which have a high property tax burden, a curtailing of the federal tax deduction would penalize homeowners. In fact, it could be the bullet that bursts the home price bubble.

"What would it do to the housing prices if you take away the deduction?" asked Dave Seiders, the chief economist for the National Association of Home Builders. "You have to worry about what it would mean to pricing if you took it away."

The idea is especially troubling in an economy where consumer costs for everything from home heating bills to health care are skyrocketing.

The housing market has been the one part of the economy that has shrugged off worry.

Now White House tax planners are aiming at what they see as a fat goose – no matter if it lays golden eggs.

Expect Gables trust

to sell Uptown units

Look for Gables Residential Trust to put some of its Uptown apartment properties on the market.

Early this month, ING Clarion paid $2.8 billion to buy Florida-based Gables, which is Uptown's biggest apartment landlord.

Since then, Gables has put some of its rental properties in Atlanta up for sale. Uptown apartments probably will follow.

Brokers say the rental units will attract great interest from companies that would turn the apartments into condominiums.

Surrounded

by Frisco

Developers are building a 52,000-square-foot shopping center west of Frisco in Denton County.

The Village at Eldorado will be on the southeast corner of Eldorado Parkway and FM423, inside the Little Elm city limits.

"Frisco is on three sides of us," said Jesse Pruitt of CMC Commercial Realty Group. "The growth out there is unbelievable, and they need services desperately."

Blockbuster, Hibernia Bank, Long John Silver and CVS Pharmacy have signed on. Three anchor retail buildings and two smaller office and retail buildings are also planned in the shopping complex. The project will take about six months to build.

Pine Creek hospital

changes hands

Dallas' R.M. Crowe Co. and Roland Bandy Investments have teamed up to purchase the Pine Creek Medical Center, a physician-owned surgical hospital at the northeast corner of Harry Hines Boulevard and Research Row.

The recently erected medical building contains 45,586 square feet on 4.57 acres.

The property is leased for 20 years to a group of doctors specializing in orthopedic and neurological procedures.

Matt Bandy, a principal of Roland Bandy Investments, and Jim Roberts of First Texas Realty Inc. arranged the purchase. Terms of the transaction were not disclosed.

Wrapped up

in marketing

It's hard to miss the sign for Wachovia Corp.'s Texas banking headquarters in Addison.

Work crews have wrapped part of the Spectrum Center building at the Dallas North Tollway and Belt Line Road with a giant Wachovia banner.

The eight-story building is owned by Crescent Real Estate, which OK'd the temporary marketing tool. In case you were wondering, the high-tech sign is transparent and doesn't block views from inside the building.

"It looks great, and we may use this with others of our properties," said Crescent's John Zogg.

North of Lemmon could be another Uptown

FirstWorthing plans to redevelop 25 acres near the tollway

12:00 AM CDT on Thursday, September 1, 2005

By STEVE BROWN / The Dallas Morning News

Developers have quietly bought most of a neighborhood on the northern edge of Oak Lawn for an apartment and townhome community.

FirstWorthing Corp. – already one of central Dallas' busiest builders – has purchased almost 25 acres near Lemmon Avenue and the Dallas North Tollway.

The builder will knock down blocks of aging apartments and replace them with new housing.

John Allums, FirstWorthing's executive vice president, confirms that his company has acquired apartment houses along Bowser and Holland streets just north of Lemmon Avenue.

But, Mr. Allums said, the project is still in the planning stages, and it would be premature to discuss details.

Real estate brokers say FirstWorthing plans to rebuild the area as a new urban neighborhood similar to Uptown.

The property is zoned for apartment construction and could accommodate almost 1,000 units.

"It makes perfect sense as a development site," said Dallas-based apartment industry analyst Ron Witten.

"One of the struggles that the rental development industry has is finding some way to build new product they can lease at other than record-setting rents."

With land prices high in Uptown and rising on the east side of downtown, developers are looking for alternatives, he said.

"Taking a half step out of the fairway and saving a substantial amount of money on land gives the developer an opportunity," Mr. Witten said.

Most of the apartment buildings FirstWorthing bought have been emptied of tenants, and many of them are boarded up.

Most have two stories and were constructed in the 1960s.

The apartment blocks are just south of the Highland Park city limits and are close to the entrance to the Dallas North Tollway at Lemmon Avenue.

Developer Gables Residential is about to break ground on a smaller apartment community at Lemmon Avenue on the south side of the tollway.

Gables' Tom Bakewell said he isn't surprised that FirstWorthing and other builders are interested in the neighborhood.

"Even the car dealerships going in now along Lemmon are spiffy like Bentley – if you have to have a car dealership as a neighbor, that's the one to have," he said.

FirstWorthing is building in several central Dallas locations.

It has two Cityville projects east of downtown on Live Oak and on Fitzhugh avenues.

It's also planning to break ground soon on the first phase of a 16-acre apartment and retail complex on Motor Street near Parkland Memorial Hospital.

Is Housing Too Expensive? Blame the Government

everyday economics

Maybe zoning laws are causing the real-estate bubble.
By Steven E. Landsburg
Posted Friday, July 29, 2005, at 3:40 AM PT

Elementary economics tells you that in a competitive environment, the price of a new house should equal:

the price of land + construction costs + a reasonable profit for the developer

But in most cities, that sum is not even close to what buyers are paying.

Take Dallas, for example. If you live in central Dallas, and if you could magically add a quarter of an acre to your lot size, you'd add (on average) about $2,200 to the value of your house. (We know this from comparisons of similar houses on different-sized lots.) Do the same in central Philadelphia, and your house value increases by $8,400; in central Houston, it's more like $17,600. In that sense, central Dallas land is just about the cheapest urban land you can find in this country. Among large cities, only Atlanta, Boston, and St. Louis rank lower. In theory, that should be great news for Dallas housing prices. But it's not. A house that costs $100,000 to build typically sells for $140,000 in Dallas, maybe $120,000 in Houston, and under $90,000 in Philadelphia.

Aha! say the commentators. Housing prices must be driven by something other than fundamentals. Speculators, of either the rational or the irrational variety, are the obvious culprits.

Here's what's wrong with that analysis: Housing prices have to make sense on both the demand side and the supply side. No matter what you do or don't believe about the ability of crazed demanders to bid up prices, you still have to explain why competitive suppliers don't bid those prices right back down. In other words, if the housing market is so tight that builders are making a fortune, they ought to be flooding the market with new houses—and driving down prices.

In fact, buyers' behavior is relatively easy to explain. Most of the recent explosion in housing prices has been in cities like San Francisco and Santa Barbara—in other words, in really nice places to live. It's not unreasonable to believe that, as Americans grow richer, and as technology makes us more mobile, more and more of us want to move to California. And it's not unreasonable to expect that this trend will continue, so that even a very expensive house in the Bay Area can look like a good investment.

The great mystery is on the supply side. Instead of the traditional formula "housing price equals land price + construction costs + reasonable profit," we seem to be seeing something more like "housing price equals land price + constructions costs plus reasonable profit + mystery component." And, most interestingly, the mystery component varies a lot from city to city.

Even in cities like San Francisco, where there's little room to build and land is consequently dear (on the order of $85,000 per quarter acre, compared with $2,200 for Dallas), you can't use land prices to explain away housing prices. The mystery component in San Francisco housing—that is, the amount left over when you subtract land prices and construction costs from house prices—is the highest in the country.

Edward Glaeser of Harvard and Joe Gyourko of the University of Pennsylvania have computed these mystery components for about two dozen American cities. They speculate that the mystery component is essentially a "zoning tax." That is, zoning and other restrictions put a brake on competitive forces and keep housing prices up. (Read one of their papers here.)

When you buy a house, you're not just paying for the land and construction costs; you're also paying for a building permit and other costs of compliance. You've got to get the permits, pass the zoning and historic preservation boards, ace the environmental impact statement, win over the neighborhood commission, etc. If Glaeser and Gyourko are right, that's the mystery component right there.

It's hard to test this theory directly, because it's hard to get good measures of compliance costs in various cities. But Glaeser and Gyourko did the next best thing: They measured a part of the compliance costs, namely the average length of time for a permit to be granted.

If the theory is correct, that length of time should be a good but imperfect predictor of the mystery component in housing prices. The data largely support this theory. About half of all cities are rated 2 (on a scale of 1 to 5) in terms of how long it takes to get a permit; these are, without exception, the cities with the lowest mystery component in housing prices. Cities rated 3, 4, and 5 all have higher mystery components. (A bit disconcertingly, so do the three cities—Minneapolis, Chicago, and Anaheim—that are rated 1. Peculiar as these exceptions are, there are at least only three of them, and we should expect some anomalies given that Glaeser and Gyourko's measure of zoning costs is rather crude.) You can talk all you want about crazed speculators and bubbles in housing prices, but you still have to explain why competitive forces don't bring prices right back down. According to Glaeser and Gyourko, it's ever-expanding zoning laws that get in the way. If you want to lower prices, that's the bubble you've got to burst.

New downtown housing is a testament to faith

By Bob Ray Sanders
Star-Telegram Staff Writer

In and around downtown Fort Worth, people are flocking to old and new spaces to set up house.

The new urban-living scene is one I never expected to see, at least not to the extent that it is happening in the central business district.

And yet, just when I thought I could not be surprised by any new development in the downtown area, I got the rewarding shock of my life when I toured a nearby converted warehouse that seems out of place while at same time so obviously in the right place.

At first I'm sure many wondered, "Who would be foolish enough to want to develop housing right in the middle of an area that is home to most of the city's homeless?"

After viewing the Lancaster Lofts, a four-story, 12-unit building across the street from the Union Gospel Mission just east of downtown, the more fitting question becomes, "Who was savvy enough and caring enough to have the vision and the commitment to pull off such a project and prove it could work?"

The answer is Flora Brewer, majority owner of Rhythm Band Instruments, who has taken a keen interest in the near-southeast-side neighborhood where her business is.

Two years ago, she spearheaded a project sponsored by her family's foundation to have a giant mural painted on the company building that homeless individuals walk past day and night. The mural, 365 feet long and 25 feet high, is one of the largest public-art projects in the country.

She also recently provided land in the area for a park to be shared by the homeless and other neighbors.

But to refurbish a 79-year-old building on East Lancaster Avenue and turn it into livable space that some paying customer would want to lease still seemed a bit illogical -- that is, until Brewer did it.

"I've never done anything like this before," said a smiling Brewer as she searched for the right keys to get us into the building.

She had a right to smile.

The historic building, with its high ceilings, wide-openness, large windows and proximity to downtown, proved to be an attractive sale.

By the end of April, the first full month of operation, seven of the 12 units had been rented.

The lofts, 800 to 1,000 square feet, are on the second, third and fourth floors and start at $700 a month. The first floor has been used for an art show and might very well become a permanent gallery.

As we were about to enter the building at 1324 E. Lancaster Ave. one of the tenants, dressed in a blue uniform, was rushing out to his job downtown.

James Doyle is a conductor on Amtrak, and he moved to the Lancaster Lofts from Mesquite.

"I went from being an hour away from work to three minutes away," he said.

One of the primary reasons he chose the building, he said, was security, noting the fence in back, the steel doors on the outside and the all-wood doors to all the units inside.

Two tenants, a photographer and an artist, chose the building for its natural light. There is also a musician with a recording studio and one man who grew up in southeast Fort Worth and then moved to Dallas years ago but wanted to return to his old neighborhood.

All of those tenants chose a building with a great view of parts of the city and, of course, the homeless community that closely surrounds them.

The building, constructed in 1926, was originally a radiator-coring factory and later was home to a moving and transport storage company.

The building was donated to the Union Gospel Mission when property values in the area plummeted after Interstate 30 cut through the old neighborhood.

"Property owners got the mind-set that this was skid row now and the city wasn't going to do anything, so they gave up," Brewer said.

For a long time the mission used the building to distribute clothes and store junk. It was filled from bottom to top with debris when Brewer acquired it.

Brewer's family had given the mission $10,000 in 1996 to repair windows knocked out by the 1995 hailstorm. She would later buy the building for $1 million to start this project.

After talking with a developer and planner in Dallas and being encouraged by Southeast Fort Worth Inc., Brewer believed that it could work.

"Once people get past the homeless issue and see the benefits of the proximity to downtown and the TRE [Trinity Railway Express], they see this is attractive and still affordable," said Glenn Forbes, president of Southeast Fort Worth.

The Lancaster Lofts project is another sign that southeast Fort Worth is ripe for development.

Brewer, by the way, owns another building nearby that she thinks may be a great place for a restaurant.

What do you want to bet that it won't be long before people from downtown Fort Worth will head east to eat on the same street with the homeless?

North Texas house sales keep going up

But home starts outpaced purchases in first quarter, report says

12:02 PM CDT on Tuesday, April 12, 2005

By STEVE BROWN / The Dallas Morning News

The North Texas housing market continued to perform in the first quarter.

New-home sales were up 1 percent from a year ago, setting another record for the 12-month period. And pre-owned home sales rose 2 percent in the first three months of 2005.

"Interest rates are ticking up a little bit, but we are also seeing better job growth numbers, which help the housing market."

Dallas-Fort Worth builders sold 9,149 homes in the first quarter, Metrostudy said in a report released Tuesday. And for the year ending in March, more than 41,000 new houses were sold.

But sales aren't growing as fast as home starts.

In the first quarter, builders started more than 10,000 houses, a 17 percent jump from a year ago.

"In three of the last four quarters, we have started more houses than we have sold," Mr. Brown said. "I expected starts to be kind of flat this quarter, but instead we saw it ramp up."

Some of the increase may be seasonal.

"This is the time of the year that housing construction really picks up," he said. "From this point through the summer are peak selling times."

Builders report that demand for higher-priced housing is particularly good, said Ted Wilson of Residential Strategies Inc.

"Starts of homes over $300,000 are up about 33.6 percent," he said. "It's a direct result of better employment and relocation buyers."

So far the spring housing market is on track, surveys show.

"The builders say they have had a great season so far," Mr. Wilson said. "February and the first part of March were excellent.

"They've had a mixed result in the last few weeks because the mortgage rates have ticked up slightly," he said.

Average long-term mortgage rates have been near 6 percent in recent weeks, up about a half percentage point from early in the year.

Pre-owned home sales in North Texas were down about 1 percent in March, the latest period for which statistics are available from North Texas Real Estate Information Systems Inc.

More than 7,000 pre-owned homes sold in North Texas last month.

For the first quarter, 16,676 pre-owned homes changed hands.

While home resales remain near record levels, prices are virtually unchanged from a year ago.

During the first quarter, the median sales price for pre-owned homes was $137,000, up 1 percent from a year ago.

The number of homes on the market has increased 5 percent since March 2004, with 42,089 pre-owned homes now for sale.

D-FW AREA HOME RESALES UPDATE

March pre-owned home sales and prices in the Dallas-Fort Worth area vs. a year ago:

Single-family homes 7,004 - 1%
Median price $140,000 + 2%
Average days on market 73 - 6%
Pending sales 9,317 + 9%
Listed for sale 42,089 + 5%
Condos and townhomes 388 + 1%
Median price $114,900 + 10%
Average days on market 84 - 3%
Pending sales 564 + 15%
Listed for sale 3,276 + 11%

SOURCES: Texas A&M University Real Estate Center; North Texas Real Estate Information Systems

Public housing coming to Far N. Dallas

Legal battle over site in Far N. Dallas delayed development for 9 years

By KIM HORNER / The Dallas Morning News

The Dallas Housing Authority plans to move ahead with fiercely contested plans for public housing in Far North Dallas that have been delayed for nine years because of a lawsuit by homeowners who live near the proposed location.

The 5th U.S. Circuit Court of Appeals in New Orleans recently upheld a lower court ruling that approved the site at the southeast corner of Hillcrest Road and the Bush Turnpike in Collin County. Dallas housing officials said the decision allows the agency to start the project.

The local housing agency plans to file permits to start construction next week, said Ann Lott, Dallas Housing Authority president and CEO. She said she hopes that 40 of the 7,913 families the agency's waiting list for public housing could move in by summer 2006.

"I think this is going to give them a tremendous opportunity to move into areas that previously they haven't had access to," Ms. Lott said. "It's going to be a wonderful place for families to live."

Michael Lynn – lawyer for homeowners in the Preston Highland and Highlands of McKamy neighborhoods – said homeowners could appeal the ruling. He disputed whether the appeals court decision means that the housing authority can start the process to build the housing. He said housing officials have not told him of the plans to start construction soon.

"They haven't said anything like that to me, and I will have to deal with it when I see the facts," Mr. Lynn said.

The housing authority bought the land in 1996 to fulfill a landmark court order to desegregate public housing.

A year earlier, U.S. District Judge Jerry Buchmeyer had ordered the housing agency to provide homes for 3,205 families in predominantly white areas of Dallas and its suburbs – 474 of them new homes.

Homeowners who lived close to the proposed sites sued to stop the construction, but Judge Buchmeyer ruled against them in 1997. The 5th Circuit struck down Judge Buchmeyer's order in 1999, ruling that race cannot be used as a factor in choosing sites. The U.S. Supreme Court refused to hear an appeal of that decision in January 2000.

The housing authority reached a final settlement in that case in December.

The 40 town houses affected by the 5th Circuit's ruling last week are the last project needed to carry out Judge Buchmeyer's 1995 desegregation order.

Homeowners in the Hillcrest Road-area neighborhood had sought to stop the construction of the 40 town houses, arguing that the housing agency violated federal law by choosing the land because the Hillcrest Road-area neighborhood is predominantly white. The housing authority countered that the selection of the site was not based on race but met other criteria, such as a low concentration of poverty.

The decision by the 5th Circuit on the Hillcrest Road property means that 40 families will have the opportunity to live in a "good, safe" neighborhood with access to job and transportation, said Mike Daniel, a Dallas lawyer and longtime advocate for public housing residents.

An expert in housing discrimination and segregation law said the latest decision would be watched closely in other parts of the country that face ongoing desegregation lawsuits.

"What's important about this decision is this housing will get built, and there will be some racial and economic integration ... and people's lives are going to be improved," said Florence Roisman, a law professor at Indiana University School of Law in Indianapolis. Ms. Lott said the new town houses would blend in well with the surrounding neighborhood. Residents, who will be required to participate in a program to reach self-sufficiency, will pay a portion of their incomes in rent.

Through the years, the housing authority resisted several offers to buy the property and a proposed settlement with homeowners to abandon the project. Ms. Lott said her agency believed the land would be too valuable for the poor families who will live there.

"There was just no good reason to sell the property. It just wouldn't have been in the best interest of the 7,000 or so families who are waiting for public housing at any given time," Ms. Lott said. "To sell it would be to give up."

Home Sweet Tax-Advantaged Home: Texas CPAs Point Out Valuable Tax Breaks for Homeowners

3/3/2005 11:26:00 AM

DALLAS, March 3 /U.S. Newswire/ -- Dreams of painting the walls, landscaping the yard, building equity and paying relatively low interest enticed many Texans to shop for homes in 2004. According to the National Association of REALTORS(r), more than 697,000 single-family homes, apartment condos and co-ops were purchased in the Lone Star State last year alone, a 10.6 percent increase over the previous year.

New homeowners and those who’ve owned the roof over their heads for years qualify for several tax breaks when it comes to filing their income tax return, say members of the Texas Society of Certified Public Accountants.

WHEN YOU BUY YOUR HOME

When you buy a home, you incur costs that may qualify as tax deductions. For example, points you pay on a mortgage to buy, build or improve your personal residence are fully deductible the year you pay them. Points are deductible, even if the seller paid some or all of the points, if they are subtracted from the purchase price on computing its basis. However, in order to deduct points and other qualified expenses, you need to itemize your deductions.

WHILE YOU OWN YOUR HOME

The biggest tax break associated with owning a home is the ability to deduct the interest you pay on the mortgage for your principal residence (and second home). This amount is generally shown on Form 1098, received annually from your lender. Late payment charges —- which are additional interest -— are also deductible.

Real estate property taxes are also deductible. New homeowners should be sure to deduct any pro-rated taxes collected at closing. These items are not always included on Form 1098, but should be itemized on your real estate closing statement (HUD-1). If you refinance your mortgage, you may be able to write off the points paid for the new loan. However, points paid for refinancing must be deducted ratable over the life of the loan, rather than as a lump sum in the year they were paid.

There are two exceptions to this rule. First, homeowners who refinance more than once may deduct all remaining undeducted points on the prior refinanced loan in the year of the current refinancing. Second, the portion of the points allocable to the proceeds of a refinancing used for improvements may be deducted in the year paid.

If you borrow money against the value of your home in the form of a home equity loan, you can deduct interest paid on amounts up to $100,000 of indebtedness.

What if your home is damaged or destroyed? If a sudden, unexpected event such as a fire, storm, vandalism, or theft results in a loss to your property, the portion of the loss that is not covered by insurance is deductible. You must reduce the amount of the loss by $100 and 10 percent of your adjusted gross income before deducting it.

WHEN YOU SELL YOUR HOME

When you sell your principal home for a profit, you won’t be taxed or even required to report the sale of your home unless your gain is more than $500,000 for married taxpayers filing jointly or $250,000 for single filers. To qualify, you must have owned and used your home as your principal residence for at least two of the five years immediately preceding the date of the sale. Generally, you can claim this exclusion only once in any two-year period. Another bonus: To qualify for the tax benefit, you don’t have to buy another home with the sale proceeds.

Homeowners who must sell their principal home before meeting the ownership and residency requirements may be eligible for a partial exclusion if the sale was necessitated by a change in employment, health or unforeseen circumstances.

WHAT’S NOT DEDUCTIBLE

While there are many homeowners’ tax breaks, there are some expenses you must bear on your own. These include general closing costs and commissions paid to mortgage brokers and real estate agents as well as the cost of homeowners’ insurance or private mortgage insurance to buy, build or improve your personal residence. Also not deductible are homeowner association and co-op dues and local assessments that increase the value of your neighborhood, such as new sidewalks.

Keep in mind, too, that the amount of your adjusted gross income can affect your ability to claim certain deductions. Your CPA can explain this in more detail.

For more financial tips about your home, including insurance and estate planning information, visit http://www.valueyourmoney.org. While there, sign up to receive a free monthly electronic newsletter.

ABOUT TSCPA

TSCPA -- http://www.tscpa.org -- is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and has 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.

Pre-owned home sales slow in North Texas

Sales of existing homes in North Texas slowed in August, dropping 4 percent compared with sales a year ago -- the first decrease in seven months, according to the latest figures released by the North Texas Real Estate Information System.

August is traditionally one of the strongest months for home sales.

The housing market in the 40-county area that runs from the Red River to just north of Waco still is strong, however, analysts say, thanks to strong sales during the spring and summer. Sales in the region are still 9 percent higher than last year.

Area sales of existing houses totaled 7,151 in August, while and the number of houses listed for sale rose 6 percent in to 42,434. Sales totaled 53,954 during the first two-thirds of the year, according to the report.

The median sale price of a pre-owned house was $140,000 in August, a 3-percent dip from a year ago, the report says.

The condominium and townhouse market saw an even larger increase in inventory, with the number for sale in the Dallas-Fort Worth area up 27 percent this year. Condo and townhouse sales were down 7 percent in August.

A high number of existing houses on the market, combined with an oversupply of new homes in the Dallas-Fort Worth area has kept prices flat for several weeks, the study shows. The average number of days a house stayed on the market was down 1 percent, to 66 days.

Existing houses with large pricetags were more likely to sell than this year, with houses in the $30,000 price range and up increasing in the double digits. The average home price was $185,507, up 4 percent.

The number of pending house sales running ahead of last year, however, with about 7,755 purchases that haven't yet closed.

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