transportation, Adaptive reuse, and TOD

The last day of class, we discussed about adaptive reuse, redevelopment, and transportation.
We begun our discussion with transportation issue, in recent years, high speed train has came up as next generation of public transportation because of several reasons. Environmental y, public transportation system provides better chance to reduce gas emission mostly caused by automobile. One more thing that makes it more controversial is that high speed train is going to be part of government stimulus package, in reality, there are clear pros and cons, as one of article note that constructing railway infrastructure requires massive amount of fund which is going to be tax burden soon or later, however, at the same time, job creation related to construction also expect to be huge which will give positive influence on economy locally or broadly.

The next issue that we discussed was recycling building. One of advantage on recycling building is that building would be able to get extra point in the LEED qualification process, on the other hand, energy efficiency stand point, recycling building never be able to get better energy efficiency than brand new buildings.
We also discussed about many case of adaptive reuse, recently, a lot of reuse project are under construction. From the developer perspective, it is pretty attractive buying old historical building and transforming into new structure, one thing that came up my mind was the Montgomery plaza case. The Montgomery was built in 1928 and completely remodeled couple of times because of flood and hurricane, it had been unoccupied for a while, now it has turned into mixed use complex. We might don’t know the consequence yet, however, to me, it’s pretty good example for adaptive reuse.

Technology change our normal life style, such as consumer spending habits, significantly within a short period of time, in the same context, we touched the issue how technology change our working environment and, furthermore, how this change could effect on real estate trend for the future. What if everyone could work at home instead of office using broadband technology, remaining office space would be overburden for real estate market and impact in local economy would be huge.

Single, Multi-family housing and appraisal issue

We discussed several issues associated with residential sector such as single family and multifamily, green development, and appraisal.
We began with talking about house inventory level in DFW area, pretty interesting point was that, in this economy downturn, construction is still going on. Economically, it make sense that multi-family housing assume to be performing very well next few years because many future home buyer, especially younger home buyer, may not afford to get mortgage from bank, furthermore increased foreclosure rate and job loss make people more scare to buy house. Under these circumstances, lease demand will be steadily increased next few years, furthermore, judging from recent material price index, price has decreased almost double compare to year age, which means investor could take advantage until the material is cheaper to build.
According to market survey, building permit has increased during 2009. One of reason for this is probably government stimulus program that make some developers feel much wormer than reality, however, so far, It still be suspicious construction recovery has begun or not.
D. R. Horton, one of major home builder, has released a 50.5milion profit in June this year, the company said that home buyer tax credit was one of reason that they recoded pretty good performance, on the other hand, there is some kind of criticism on the market participant because D. R. Horton has cut the house price significantly for recovering their massive loss occurred the last year.

One of interesting article came up on the discussion was reappraisal issue on Florida state, because the stat want to know what losses BP oil spill brought to property and may want to charge compensation responsibility on BP. I think, this reappraisal could be double edge sword, if property value has decreased result from reappraisal, the state government will lose huge amount of tax bases.

7.29 Trinity River Vision - Forth Worth

As comparison of the Dallas Trinity River Project that we saw last week, this time, we visited the Trinity River Vision in Fort Worth. The Trinity River Vision is described as multi-partner project which several nonprofit organizations have involved as partner.

The Trinity River Vision is divided to couple of different aspects that first part is development of the uptown river which will provide the link from downtown to the Stockyards and the Cultural District. This new infrastructure will offer 12miles of active urban waterfront and a 33acre lake. It also produces recreational opportunities with flood control and environmental enhancements.

One of biggest aim for Trinity River Vision is flood control because present flood control was designed to cover 1960’s population. An added 1.5mile bypass channel will revamp present flood system and will increase the accessibility to water front. Unlike to Dallas Project, massive private development opportunity will take a place, specially new zoning and form based code will help transform the area into high density waterfront neighborhood that hosts over 10K mixed-use housing units and affordable house.

Another exciting component of the Trinity River Plan was the Gateway Park. This huge park will be fully filled with recreational amenities and unique landscape will encourage economic development around the park.

7,22 Trinity River Project - Dallas

We had class on the Trinity River Trust located in Dallas instead of having traditional class on school. The Trinity River Project which we are going to observe next 2weeks is two separated project the Trinity River Project - Dallas, we joined in today, and the Trinity River Vision – Forth Worth.

Basically, the main purpose broadly support this plan is balanced development of Trinity River Corridor, which associated with long term goal such as healthier environment and vitalization of city function. Actually, ultimate goals that the Trinity River Project is seeking to are defined as protection of river flooding, creating recreational urban open space, revitalization of city environment, and creating job opportunity with positive influence on local economy.
After all, project overview and scale were pretty impressive even if whole drawing is yet to be finished, however, one of curiosity that I had during the presentation was the project didn’t have income model which make this project financially feasible. I personally think, judging from scenario, massive construction cost and acquisition cost will be paid off by tax or public fund, furthermore, in the same context, expected huge amount of maintaining cost that probably occur after construction has done will possibly cause city’s budget shortage.

Overall, the project that I saw today was quite impressive, generally speaking, this kind of project is going to be win-win game because, at the end of project, the citizen of Dallas will be able to enjoy plenty of leisure facilities and a present environment, on the other hand, the city’s stand point, appraised value of property near Trinity River will be increased a lot, thus, tax revenue is expected to be incremented.