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Wednesday, June 23, 2004

'Inclusionary Zoning' Strikes Out

by Lew Sichelman

Although some believe that a zoning technique which requires builders of market-rate housing projects to set aside a portion of their product for moderate-income families is the best way to bridge the affordable housing gap, a new study says the process has failed miserably in California.

So-called "inclusionary zoning laws" enacted by 13 Southern California cities are actually backfiring, driving housing prices up by as much as $100,000 while also prompting significant decreases in new home construction, according to the latest installment of a study by the Reason Foundation, a self-described Libertarian think tank based in Los Angeles.

The new research comes on the heels of a similar Reason Foundation study in Northern California which found that attempts in the Bay Area to provide affordable housing by requiring developers to sell a percentage of new homes at prices below market value also have backfired.

In 45 Bay Area cities where inclusionary zoning has been enacted, new housing construction decreased by 31 percent the year following the adoption of the policies, the Northern California study found.

Both studies were commissioned by the California Building Industry Association. And their findings are diametrically opposite another recent report by the National Housing Conference which held that well-designed inclusionary zoning laws work for builders as well as buyers.

The Reason Foundation said that inclusionary zoning is actually making California's housing crisis worse.

The latest study finds that affordable housing mandates in cities within Los Angeles and Orange Counties increase the price of new homes by anywhere from $33,000 to $66,000 to compensate for the mandatory discounts on the "restricted" homes.

In San Juan Capistrano and Laguna Beach, inclusionary zoning adds more than $100,000 to the price of each new home, the study said.

The report examines data from all 13 cities that have implemented inclusionary zoning mandates within the two counties. In all 13, the average production of housing fell in the year following adoption.

It wasn't a one-year dip, either: In the eight cities with data for seven years prior and seven years following inclusionary zoning, 17,296 fewer homes were produced during the seven years after the adoption of inclusionary zoning. In those cities only 770 "affordable" units were produced.

"Homebuyers and taxpayers have to question whether a paltry 770 units are worth the cost when it means a total of 17,296 fewer homes," said Benjamin Powell, assistant professor of economics at San Jose State University and co-author of the report.

"By discouraging production of 17,296 homes in those eight cities, $11 billion worth of housing was essentially destroyed."

In Northern California, where 45 Bay Area cities have enacted inclusionary requirements, the price of new homes has increased by $22,000 to $44,000, the earlier study found.

In some communities, like Cupertino, Palo Alto, Los Altos, Tiburon, and Portola Valley, the price controls have added more than $100,000 to the price of new homes.

In addition, new housing construction decreased by 31 percent the year following the adoption of the policies. And in the 33 cities with data for seven years prior and seven years following inclusionary zoning, 10,662 fewer homes were produced during the seven-year period after the adoption of the ordinances.

"Inclusionary zoning should only be enacted if the goal is to make housing even more expensive and to decrease the quantity of new housing available," Edward Stringham, assistant professor of economics at San Jose State University and co-author of the report, said at the Pacific Coast Builders Conference in San Francisco earlier this month.

Adrian Moore, vice president of research at the think tank and the studies' project director, said the ever-growing mountain of evidence says inclusionary zoning is bad for buyers. "These affordable housing mandates started with good intentions, but are producing terrible results," Moore said. "The worst possible solution to our affordability crisis is to pass policies that restrict the supply of housing."

Published: June 23, 2004

Lew Sichelman has been covering real estate from his home base in the Nation's Capital for more than 30 years. He writes a weekly consumer column that is distributed to newspapers throughout the country by United Media. He also is a regular contributor to numerous shelter magazines and housing and housing finance industry publications.

Copyright © 2004 Realty Times. All Rights Reserved.

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Getting An HOA Roof Ready

by Richard Thompson

For many homeowner associations, this year will bring new roofs. Roofs, of course, come in many variations, designs and materials. Some can last a hundred years like tile, or a few decades like flat hot tar buildups. With longevity comes increased cost, although many higher priced options are better values. Architectural composition shingles are very affordable and carry 30 to 50 year warranties. For flat roofs, rubberized membranes offer better durability and ease of repair than traditional hot tar varieties.

While improvements in roofing materials is great news for consumers, the best roof invented can be your worst nightmare if it's not installed properly. Installing a roof is a technical exercise that requires special training and attention to detail. Since roofs are intended to last many years, selecting a roofing company that will likely be around for years is also extremely important. Here's how to get ready for a proper roof job:

Hire only licensed roofing contractors that specialize in the kind of roof you want. If you have a multiple year roofing repair schedule, it's very important to use the same roofing company even if it costs a bit more money. When different contractors are used, sorting out repair, maintenance and warranties becomes nearly impossible.

Get at least three bids from qualified contractors.

Check contractor licensing with the appropriate state agency. Most states keep licensing and insurance information plus a history of complaints made.

Call at least three references from each of your bidders to inquire about performance.
Unless the roofing job is straightforward (remove and replace with no repairs), invest in a roofing consultant (not a contractor) to prepare detailed specifications which can be bid by the contractors. Those specifications should include:

Removal and disposal of existing roof.

Repair of damaged sheathing.

Protection of landscaping, decks, etc.

Properly installed sheathing if required.

Proper underlayment.

Proper attic ventilation.

Adequate insulation, if applicable.

Selection of the right roof system.

Proper flashing.

Gutters and downspouts, if necessary.

Rain protection during course of work.

Regular debris clean up.
There are building code and product specifications that need to be considered. Code allows no more than two roofs over a dwelling. Regardless, it's recommended to remove the existing roof system so that the roof deck can be properly inspected and repaired. Also, some manufacturers will not warranty their product when it's installed over an existing roof. Finally, a roof installed over another never lays down properly and detracts from curb appeal.

If a new type of roofing is being considered that is heavier than the original, like tile or slate, a structural engineer should calculate the weight load requirements. It may require structural enhancements to carry the additional load.

Since a roofing project is always costly, it's worth hiring an attorney to prepare a contract which includes the manufacturer's installation specifications. Besides getting the work done properly, getting it done within a certain time frame is important. This is done by including a per day dollar penalty for non-weather-related delays.

The payment schedule is extremely important. DO NOT enter into an agreement that requires prepayment for labor or materials. This is a red flag for a contractor that is financially strapped or using your money to pay for other bills. Making several progress payments is normal but the payments should be based on actual work completed. Of course, never tender final payment until all work is completed and the contractor provides a properly executed lien waiver. Finally, assemble a roofing file which includes the contract, product information and warranty.

Getting ready for a roofing job takes time, money, scheduling and expert input. You will live with the results, good or bad, for many years. Take your time and the advice of Rambo the Rottweiler: "Roof! Roof! Roof!"

Published: June 23, 2004

Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to www.Regenesis.net. He can be contacted by email at rich@regenesis.net.

Copyright © 2004 Realty Times. All Rights Reserved.

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Be Safe, Lock Up Your Home

by Phoebe Chongchua

In about the time that it takes to sing the traditional birthday song, a not-so-happy event can be occurring in your home or one near yours. In the United States a home is burglarized every 14 seconds. Even more alarming, 60 percent of the time the home is occupied, according to the FBI.

With statistics like that, how do you avoid becoming a victim in your own home?

Crime prevention experts say locking up is the key deterrent.

"You'd be surprised how many people don't lock their front doors. It's just like, oh I'm running down to the market so they leave out the garage, so they forget about the front door," said San Diego, California Police Officer Bob Van Wulven.

Some crime statistics report that burglars are seemingly rather lazy. They're looking for the easy way into your home -- an open door or an unlocked window. The highest percentage of break-ins occur through unlocked front doors during daylight hours.

"It's a grand opportunity [for criminals] that people are leaving," said Carlsbad, California Police Crime Prevention Specialist, Jodee Sasway.

According to Crime Doctor, Chris E. McGoey, a professional security consultant, July and August are the peak months for burglaries. The low is in February.

Despite the boldness of burglars, some residents still have a nonchalant attitude about protecting their home. "Don't be complacent," warns Howard Feldman, President of Pioneer Security Services, Inc. "The thought of having a break-in in the house or a fire, you know, like cancer, is so unpleasant to think about that people just don't think about it and therefore they believe by putting their heads in the sand it's not going to happen," said Feldman.

But in fact, Feldman says, "There's a 75 percent chance that their home will be broken into, at least once, over the next 20 years."

Feldman's company provides home security systems. He says they can reduce your chance of a break-in.

"We don't solve the burglary problem; we just move it from one neighbor to the next. We displace it; that is if we put a [home alarm] sign up on house 'A' the burglar sees the sign and generally will move to house 'B' -- the unprotected house," said Feldman.

However, it's important to remember that, "A security system alerts you if there's an intruder. It's the physical security of your house that keeps [criminals] out," said Sasway.

An open window, even on a second-story floor, for instance, can attract burglars.

Other safety tips include:

Lock everything up when you leave your home.

Make sure your lock is a good deadbolt.

Install a locking security screen door.

Use blocking devices, such as a wooden dowel in the track, on sliding glass doors.

Use an alarm system.

Display alarm decals in highly visible locations.

Know your neighbors, even exchange phone numbers in case of emergencies.

While on vacation, stop newspaper circulation so papers don't pile up indicating the home is vacant.

Use light timers for lights inside the house.

Install motion-detection lights for exterior areas.

Cut back your landscape so that big bushes aren't blocking windows and other entryways, making easy hiding places for criminals.

Secure windows with through-the-frame pins.
Keeping your house safe requires educating everyone in the home about the importance of remembering to lock up. Taking preventive measures now is far better than trying to fix the emotional and physical damage that's caused by burglary.

Published: June 23, 2004

Phoebe has nearly 20 years of experience in the broadcast and print industries. She is a realtor with Prudential California Realty and is a real estate reporter for The Coast News in San Diego, California. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Today, Phoebe writes, sells and speaks on real estate. Visit her web site: www.phoebechongchua.com or call: 858.259.3646 or email her at mail@phoebechongchua.com for more information.

Copyright © 2004 Realty Times. All Rights Reserved.

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