Marketing Home Products

The 2008 IBS aisles were flooded with sizzling new building products, thought-provoking industry events, celebrated eco-friendly initiatives and celebrity appearances. K&A’s most exhilarating achievement was the Carey Brothers’ presence at Eternal® by Grand Hall’s booth! Third-generation contractors, the Carey Brothers – Morris and James – are well-known experts in the home building and renovation industry. With their numerous published “how-to” books, nationally syndicated weekly radio program and newspaper column, On The House, the Carey Brothers’ combined 55-plus years of experience aids millions by providing money-saving tips on building, remodeling and repairing homes.

Appearing twice at Eternal® by Grand Hall’s booth throughout the duration of the show, the Carey Brothers attested to the reliance and dependability of Eternal, as Morris Carey has the leading hybrid water heater installed in his home. Eternal – a premier hybrid water heating system – is engineered to out-perform all other water heaters on the market. Using patented counter-flow design and multi-pass heat exchanger technology, Eternal maintains an 86 percent thermal efficiency rating with consistent pressure. “The biggest change I’ve seen [since installing Eternal] is on my utility bill,” says Morris Carey. “I am receiving water at the temperature that it is supposed to be, and no longer have to worry about my tank running all the time.” Tim Merritt, director of marketing for Grand Hall, was thrilled by the endorsement of the Carey Brothers. “I am a huge fan of the Carey Brothers and am elated that they see the Eternal as the most sophisticated water heating technology on the market,” he said.

Needless to say, the established reputation of the Carey Brothers drove in a multitude of attendees to the show and to the Eternal by Grand Hall booth. K&A couldn’t have been more thrilled – one our best tradeshow successes yet! K/BIS 2008 will be here before you know it. So, don’t forget to check out all the pre, during and post action by logging onto www.kleberandassociates.com.

With land in short supply, the bleak outlook of the housing market and the lending atmosphere becoming less flexible and more risk-aware, today’s cities are taking matters into their own hands to create more affordable housing options for modern-day homeowners. Or are they?

While some cities are fostering affordable housing projects, other local governments are hindering these cost-effective new developments.  The questions that remain:  who is to blame for the lack of affordable housing plaguing the U.S., and, how do we alter the rulings of local municipalities to accommodate more plans for affordable housing options?

Setting an example

In Pittsburgh, the Pittsburgh Downtown Partnership is launching a $3.5 million loan program that it hopes will spur the creation of new, affordable apartments on the vacant upper floors of its Downtown midrises, as reported by the Pittsburgh Post-Gazette.   The loan program will provide “gap financing” for building owners and is enough to fund 10 projects, allowing for approximately 80 new housing units. The project money will be used to leverage larger loans from banks that might otherwise view the conversions as “marginal projects.” In years past, a developer might have been able to secure a loan with less than 20 percent down. Now, some lenders want 30 percent or more. Pittsburgh city officials say “it’s important to keep Downtown healthy – and part of that prescription is more housing options.”

The Chattanooga Times/Free Press also noted that the city gave Chattanooga Neighborhood Enterprise (CNE) $500,000 in HOME funds this year. The money will be used to bring economic diversity to the downtown area by offering low to moderate income families up to $50,000 to purchase a downtown condo. Developers are expected to break ground this month on a 24-unit residential complex encompassing eight townhomes and 16 courtyard flats with the goal of making downtown Tennessee an area where people from all income levels are able to live.

Yet some cities aren’t so lucky.

The cities are the problem

According to John Delaney, an attorney with Linowes & Blocher in Bethesda, Md., who recently spoke at last Wednesday’s “Property Rights and Land Development” session at the International Builders’ Show, local governments are the cause of the housing affordability problems still affecting many cities around the country. “You don’t get a density bonus, but you still have to build affordable housing. Something is wrong,” Delaney said, as reported by Multifamily Executive News. “In many places, inclusionary zoning laws require developers to chip in 10 percent to 15 percent, and even up to 22 percent…for affordable housing in a new development. Why is it appropriate to ask developers to contribute some of their built housing to the city?”

So, what’s the solution?

Publicly owned land is an essential resource for affordable housing options in the form of utilizing vacant land for development, building at higher density and adding residential space on top of existing structures.

In his presentation at IBS 2008, Delaney also urged that developers and builders adopt a checklist that gauges how local and state governments are doing in balancing jobs and housing. He suggests looking at the Comprehensive Plan and the Capital Improvement Plan to see if they include housing and affordable housing provisions. He also suggests monitoring the zoning laws to see if high-density building is encouraged.

Local governments CAN make affordable housing a reality. As is the case in both Pittsburgh and Chattanooga, commiting to the development and supply of affordable housing options not only provides residents with enhanced living options but allows for an increase in vitality, economic growth and community development.

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With land in short supply, modern-day builders are looking for infill spots in older neighborhoods to make the most of existing communities. Most prevalent in single-family neighborhoods and teardowns on lots that previously held single homes, these spaces are transformed with the development of newly-built town homes, condos, duplexes or multi-family homes.

Infill neighborhoods build on established community strengths and are typically stable communities that development parcels were never fully built out, or, where the demolition of older buildings has left vacant space. They can be in the form of additional units built on the same lot, by dividing existing homes into multiple units, or by creating new residential lots by further subdivision or lot line adjustments. These neighborhoods generally have secure infrastructure and hold precious real estate value.

Infill development trends align with the new urbanism and smart growth designs that encourage the reduction of the need for cars and allow for more “walkable” cities. Among one of the latest building trends to save energy and enhance the sustainable living movement, infill development will continue to gain momentum in the years to come due to cost-justification in a sluggish housing market and strong consumer backing.

Why infill development?

There are several reasons for builders to embark on the creation of infill neighborhoods. Some of the more popular include:

· Short supply of land, i.e., less areas to develop due to growth management.

· The ability to regularly yield cost-effective, profitable results.

· Record high gas prices forcing today’s workforce to reside in areas closer to their jobs in order to save on gas-related costs and valuable commute time.

· A variety of housing choices such as, a traditional public realm, transit access and commercial amenities within walking distance of one another.

· The existing infrastructure is usually adequate enough to provide all the needs for utility and other services.

· They do not require the subdivision of greenfield or agricultural land and natural areas.

Which of the nation’s regions are experiencing the trend?

The NAHB showcases several “smart case studies” on its Web site for those builders looking to embark on infill development. One of the featured projects was developed in Seattle, Wash., in the form of Victorian town homes. A turn-of-the-century apartment building with inadequate on-site parking was slated for rehabilitation and conversion to condominiums. To supply an additional 60 parking spaces for the condominium conversion while minimizing the impact of a needed garage on the surrounding historic neighborhood, the plans called for construction of a new, partially underground, two-level parking garage with housing above in order to accommodate its affluent, politically active, and design-conscious neighborhood residents.

In Alexandria, Va., the Portner’s Landing project  incorporates an existing Civil War-era brewery on one corner of the site, paying homage to the familiar urban patterns, textures, and architectural details that distinguish nearby streets while implementing additional housing options that include 20 town home condominium units within a brewery building — complete with below-ground parking — as well as 38 apartment flats within a new four-story condominium building adjacent to the brewery. Much of Portner’s Landing’s success is attributable to the project’s unique design, particularly the loft-style condominium units and town home condominiums literally inserted into the shell of the brewery.

The AIA also recently recognized the works that exemplify excellence in urban design with its 2008 Institute Honor Awards. The recipients’ projects are featured in states like Arkansas, California and New York.

In Colorado, the Birch Street Group develops everything from upscale townhouses in the more modest North Denver Highlands neighborhood, to multi-family units near 17th and Downing streets, to 5,000-square-foot homes in Cherry Creek, according to the Denver Business Journal. With a track record of over 100 completed residential projects, the Birch Street Group began its infill development creation with two “fix and flip” renovations on Denver’s Birch Street in Park Hill.

And, in some areas like Seattle and Bellevue, high-rise infill development has become the norm.

Which consumer groups are buying into this new movement?

Infill housing primarily attracts existing residents, as these are the individuals who have invested the time and money into the area’s homes and businesses from the get-go. Friends of existing residents and those familiar with the neighborhood are also primary marketing targets. The more the local community remains a part of the new housing choices, the better the opportunities for superior real estate value, both short and long term.

Additionally, infill construction appeals to affluent buyers, young families who desire a safe urban living experience and an ever-growing population of empty-nesters looking to be closer to the action. Furthermore, as immigration rates continue to display record-breaking numbers, the need for multi-family housing options will continue to rise, driving the infill development craze.

Looking for more information about new building trends?

The K&A team will be reporting every day from the International Builders’ Show. Stay tuned daily, February 13-16, at www.kleberandassociates.com, to receive up-to-the minute information about the latest and greatest findings from this year’s show.