Edited by Jodi Summers
Bravo to the City of Los Angeles. Through innovative public policy and creative private development, L.A.is demonstrating how older buildings can be repurposed and repositioned for the new economy while reducing carbon emissions.
Believe it or not, Downtown Los Angeles contains one of the nation’s finest collections of early 20th century architecture. Most of these buildings sat vacant for decades, until a carefully targeted Adaptive Use Ordinance (ARO) removed regulatory barriers, provided incentives, and helped make it possible to repurpose more than 60 historic buildings over the past 14 years as new apartments, lofts, and hotels.
A recent report from the Urban Land Institute and the National Trust for Historic Preservation’s Green Lab concludes that more than 10 million square feet of space in the city’s urban core is currently vacant. The report, Learning from Los Angeles, was presented to Mayor Eric Garcetti this morning, at an event organized by the ULI Los Angeles District Council. It describes strategies that build on the success of the ARO to unlock the economic and community development potential of underused older buildings. The report documents demolition, building, and vacancy trends throughout the city and recommends strategies for removing regulatory barriers, streamlining approvals, and providing incentives to make building reuse easier to accomplish.
Conversations organized by the Preservation Green and ULI Los Angeles identified key barriers to building reuse and recommend solutions to overcome these obstacles. The Los Angeles Conservancy, a key partner in this effort, served on the project Advisory Committee along with practitioners in real estate development, planning, design, construction, community revitalization, and local government.
Learning from Los Angeles is the first in a new series of research and policy reports being developed by the Preservation Green Lab through the Partnership for Building Reuse, a joint effort of the National Trust and ULI. Launched in Los Angeles in 2012, the Partnership for Building Reuse is designed to foster market-driven building reuse in major U.S. cities through dialogues with community stakeholders about building reuse challenges and opportunities.
by Jodi Summers
By taking a population-weighted computation of local sales tax rates and combining it with the prevailing state rate, the Tax Foundation has computed the combined sales tax rate for each U.S. state.
Oregon, Delaware and New Hampshire are the only three states without either state or local sales taxes. The five states with the lowest average combined rates are Alaska (1.69%), Hawaii (4.35%), Wisconsin (5.43%), Wyoming (5.49%), and Maine (5.50%).
Curiously, Tennessee takes the biggest toll, with the highest average combined rate of 9.45%, followed by Arkansas (9.19%) and Louisiana (8.89%). Other states in the top five for the greatest sales tax burden for consumers include Washington (8.88%) and Oklahoma (8.72%).
Keep in mind states with low or no sales taxes often have high income taxes. Oregon is an example. On the other hand, the Tax Foundation notes that Washington State has high sales taxes but no income tax.
edited by Jodi Summers
Here’s the premise…a recent study notes the impact structural economic shifts and how it’s impacted new workers in the work force. The results show that young adults are delaying their career launch, as well as leaving home and beginning a life of their own.
In the meantime, older adults are working longer because they’re getting paid better.
The report, “Failure to Launch: Structural Shift and the New Lost Generation” analyzes the divergent labor market trends for young and older adults since 1980. Major findings include:
- In 1980, young adults reached the middle of the wage distribution at age 26; today, they do not reach the same point until age 30. For young African Americans, it has increased from age 25 to 33.
- The 2000s were a lost decade for young adults. Between 2000 and 2012, the employment rate for young fell from 84% to 72%.
- Young adults’ labor force participation rate has returned to its 1972 level, a decline that started in the late 1980s and has accelerated since 2000.
- Opportunities have especially dwindled for young men, high school graduates, and young African Americans.
- Older workers aren’t crowding young adults out of the labor market: there are more job openings created from retirements per young person today than there were in the 1990s.
The report, “Failure to Launch: Structural Shift and the New Lost Generation” analyzes the divergent labor market trends for young and older adults since 1980. The report is a joint effort by the Georgetown University Center on Education and the Workforce and The Generations Initiative.
Experts agree, the multifamily market will continue to remain suitably tight to allow landlords to continue to raise rents. Currently, for regions on the western half of Los Angeles County, vacancy is in the low-3% range, allowing operators sufficient leverage to lift rents more significantly than the pace of inflation.
Current Los Angeles market trends data indicates an increase of +16.2% to $169,156 per unit compared to last year’s prices in the City’s more desirable areas – for the properties that are available. The number of multifamily properties for sale in Silicon Beach neighborhoods like Culver City, Mar Vista, Marina Del Rey, Venice, Santa Monica and Westwood is way down, forcing prices up, yet again.
Of the 12,500 units currently beyond the groundbreaking stage, nearly 12,000 are in the western part of the county, observes Marcus and Millichap’s most recent Apartment Market Research Report.
At the current pace of demand growth, pundits believe vacancy will rise to close to 4% next year as new supply competes with existing units.
National housing vacancy rates in the fourth quarter 2013 were 8.2% for rental housing and 2.1% for homeowner housing, according to the Department of Commerce’s Census Bureau. The rental vacancy rate of 8.2% was 0.5 percentage points lower than the rate in the fourth quarter 2012.
For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – firstname.lastname@example.org or 310.392.1211, and let us move forward together.
by Jodi Summers
Environmentally conscious real estate leases faster and at better terms than traditional buildings, yet it is extremely difficult for property owners to finance green upgrades. A recent McGraw-Hill survey concluded that building owners looking for finances to pay for energy retrofits for their properties are often are forced to rely on their personal resources rather than outside funding.
Granted, there are some options green loans, but the routes are not traditional. The government and utility companies are doing their share to facilitate green loans. Out of the box choices may include ESCO (energy service company) financing, energy service agreements, government loan programs, PACE (property assessed clean energy) programs, and on-bill utility financing.
Richard L. Kauffman, senior advisor to the secretary, Department of Energy suggests that owners should be look to capital market investors, state bonds, local banks and government incentives to generate the necessary capital for individual green improvements to their existing commercial buildings.
If you want to try the traditional route, instead of asking the bank for a green loan, try rolling the cost of energy efficient improvements into a building retrofit or renovation. This is an easy way to sidestep lenders’ reluctance to loan on green improvements as a stand-alone investment.
The issue at hand many banks is that green lending is a new thing. They have yet to assimilate green loans in into their underwriting programs…which may require years of data for evaluating risk and assessing the long-term financial impact from green investments.
Research and statistics show that Energy Star and LEED-certified buildings can attract higher rents and generate increased demand from tenants < and that a green property can garner a better lease rates and higher sales price. Lenders aren’t persuaded by research. They want empirical data on risks, and actual cost vs. performance data, not just assurances of what a new technology is expected to deliver.
Run the numbers, buying can be cheaper than renting until the 30-year fixed rate reaches 10.5%. Trulia has published a really fine Rent vs. Buy Calculator @ http://www.trulia.com/rent_vs_buy/
Which helps you calculate if buying a home makes sense for you by asking appropriate questions such as:
- What is your target monthly rent?
- What is your target home price?
- How long would you live there?
- What is your income tax rate?
- What is your mortgage rate?
It’s a good site. Learn more @ http://www.trulia.com/rent_vs_buy/.