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.
by Naomi Shaw
A real estate partnership can be a lucrative venture for many individuals with a limited amount of money to invest. Forming a partnership will increase your working capital, and you’ll be able to buy properties you couldn’t afford on your own.
However, there are some significant risks that can come with forming a partnership. If you choose the wrong person or company to do business with, you could find that your investment quickly becomes a loss.
Before entering into any sort of real estate business partnership, make sure you do your homework on who you’ll be working with.
Knowing Your Partner
Entering into a real estate partnership with another person or company is something you should do only after you understand who you’re working with. While helpful to work with people you know and trust, there are some questions you should ask any person or company before considering a partnership.
● How much money do you have to invest? How is your credit score?
● How many properties do you currently own?
● When do you expect to make a profit from your properties? Do you plan on holding properties for years or do you want a quick turnaround to leverage into other ventures?
● Have you had other real estate partnerships in the past? Do you currently have other real estate partners? Do you have references to any past or current partners?
Understanding Your Partnership Agreement
Before you commit to any type of partnership, it’s essential that you come up with an agreement as to how the partnership is going to work. The most important things you need to discuss when setting up a real estate partnership include:
● What your responsibilities in the partnership are. Usually, one partner will manage properties while another is responsible for finding new properties. Of course, all partnerships differ. Defined roles are important.
● Is the partnership going to be reviewed at certain times? Many partnerships review profits about once per year. After all, not all partnerships are worth maintaining if there’s no growth or profit.
Hire an Attorney
If you form a good partnership, chances are you won’t ever need to consult your attorney. However, you do need to hire a qualified attorney who will help you setup your partnership.
Trying to do it yourself will most likely leave big gaps in your contract, and unless you’re incredibly well versed in business partnerships, those gaps could create potential problems down the road when it becomes time to sell properties, split profits, or dissolve the partnership and its assets.
Hiring an attorney seems costly, but it’s going to cost you a lot less than a business partnership gone wrong.
A real estate partnership is often an excellent way to make more money than you ever could on your own while balancing the work that real estate investing takes. However, partner with the wrong person, and you could end up losing all of the money that you had to invest.
Do your homework and ask questions, and always set up a binding legal agreement that helps both partners understand how they’ll be working together and how they’ll be able to exit the partnership if needed.
Naomi Shaw is a freelance writer in Southern California. She loves real estate and home design, and enjoys covering both topics in her writing. She contributes to HarrisHousePainting.com often.
Is the party over? The apartment market has been on an exceptional run for the past four years. During the Great Recession we stumbled through a for-sale housing market in tatters, a weak recovery in the labor market that created mostly middling jobs for young workers, and benign supply growth. Combine all of the lackadaisical factors and you’ve hit the recipe for impressive strength it the apartment sector.
As they always say, all good things must come to an end. The for-sale housing market in Los Angeles County has again become vibrant…but that’s not the main use. Over-construction is.
For example, builders have completed another 1,400 rentals in the Westside Cities over the past year, representing a 1% rise in inventory. Research from Marcus and Millichap notes that the largest project to come online in the past year is Marina Del Rey’s Shores > 12 buildings, 544 units.
During the past year, vacancy jumped to 3.2% percent. Net absorption was negative > rents have peaked for the time being. Looking forward, experts expect Westside vacancies to rise to 3.4% in 4Q 2013. Average effective rents at developments constructed since 2000 dipped 5.3% year-over-year in the third quarter to $2,769 per month.
The trend toward excessive unit construction is a national phenomenon. New completions in the top 82 markets in the country averaged just 10,623 units per quarter in 2011 and 19,585 units per quarter in 2012. Over the first three quarters of 2013 new completions averaged 27,411 units per quarter. This is the highest quarterly average since 2009.
New completions in the top 82 markets for 2013 are expected to total roughly 124,000 units. 5,400 units were added in L.A. County. These amounts is on par with the long-term annual average of +/-120,000…but just wait, in 2014, new completions are expected to total about 164,000 units, well above the historical long-term average. Expect 9,000 units in L.A. County in 2014.
Although demand for apartment units will remain rather robust, it is unlikely the market will be able to absorb this many units, causing vacancy to increase. This would represent a pronounced change from the past four years, when vacancy was compressing rapidly as demand far outpaced a subdued level of new completions.
For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.