DAILY MEMO: HOUSING:
Why slump could be a good thing
Valley needs timeout to consider quality-of-life design
Friday, Aug. 22, 2008 | 2 a.m.
Tiffany Brown
Ron Smith, a sociologist and dean of UNLV’s Graduate College, says the designs of many valley communities have been uninspired and lacking in such essentials as sidewalks.
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It’s remarkable these days to drive around the Las Vegas Valley and see few, if any, homes being built. It’s even more remarkable to consider why this could be a good thing.
For more than a decade, builders came here equipped with just-add-cement kits that in a few months helped cover acre upon acre of desert land with walled-in communities.
Then, tens of thousands of homes went into foreclosure, and the price of homes in Las Vegas fell 28 percent from 2007 to 2008. Over the first six months of 2008, permits for new home construction dropped 61 percent.
That climate is tough on sellers and the real estate and construction industries.
Yet for the Las Vegas Valley, it also is an opportunity. Not for people seeking to buy low and profit later, but for those who believe urban planners need a chance to take a breath and rethink the design of our suburbs.
“I think that would be wonderful,” said Robert A. Fielden, an architect and urban planner who has worked in Las Vegas for more than 40 years.
To build communities in Las Vegas with quality of life in mind would mean doing simple things, such as building homes within easy walking distance of grocery stores. Right now, you might live within a quarter-mile of a Vons but have to drive several times that distance around walls to get there.
Fielden doesn’t necessarily think developers will change their ways. “I don’t know that they’re capable of doing it or competent enough to do it,” he said.
But they could be forced to adapt by adopting an idea from California — a state that Nevadans grudgingly admit they have mimicked in many ways: restaurant smoking bans, sprawl, traffic jams and Proposition 13-like property tax caps.
In July, California adopted a state code to spur builders to create designs that save energy and water. The state has set targets: Decrease energy use in new buildings by 15 percent to 30 percent. Reduce water use in buildings by 20 percent and on landscaping by 50 percent.
Compliance is voluntary, for the moment. California is likely to make the targets mandatory in 2010. Dave Walls, California Building Standards Commission executive director, said enforcement will come at the local level through the permit process.
Reducing energy consumption through construction design can take many forms. At a basic level, it can be better insulation. More broadly, it could mean designing communities with mass transit opportunities, more trees, better routes for bicyclists and easier ways for people to get around without vehicles.
Nevada has adopted incentives for the construction of energy-efficient commercial buildings, but no similar incentives exist for homebuilders.
Ron Smith is dean of UNLV’s Graduate College and a sociologist who studies how the physical design of a building or community affects culture and human interactions.
“I hate to be so pessimistic, but community and housing design here has really been stuck in the not-thinking-outside-the-box mode for so long I can’t imagine anything innovative going on,” Smith said.
He cited such silly practices as developments with no sidewalks, or maybe a sidewalk on just one side of the street.
Fielden has a glimmer of hope, however, that national builders will design more livable communities, perhaps forced by government, or maybe lured by the smell of money Californians could make on green design.
“Then in 10, 20 years, maybe we’ll see it here,” he added. “I just hope that’s not too late.”
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This man has a job guaranteed and isn't worried about having to move. The slump may be a good thing? Not when you lose your job
If you think you're going to buy low and profit later, think again as it won't happen in your lifetime. If you're waiting to buy until the market bottoms, forget it. Higher interest rates will offset any lower price.
Bottom line, buy what you need, when you need it and enjoy it.
If you want to get an idea of whether current prices are close to the bottom, one indicator to look at is evaluating new housing supply in the pipeline that is coming to market in the next 6-12 months.
Add the 2008 land price plus the 2008 building costs. If the replacement costs are higher than comparable market prices, the current market prices are more likely than not to be stable. On the other hand, if new supply is coming on line at prices lower than current market prices, expect downward pressure on prices.
Land is being re-cycled through the system. Builders today, can buy land, build houses and sell them to consumers at prices 20-50% less than 2006 prices and still make a profit.
To get square footage costs for building check out
www.UsHousingMeltdown.org and look for the Replacement Cost Fundamental. You can select from four quality levels of construction. Basic, Tract, Custom and McMansion.