 | 
Veteran industry observer Tom Dooley is president of TWD Associates, a real estate consulting firm in Arlington Heights, Il., and editor of two monthly newsletters. Contact him at 847/398-6410; tdoo@aol.com.
| | Terrorism's impact
Lack of Insurance Slows Economy
The unavailability of terrorism insurance may be stalling real estate transactions.
BY TOM DOOLEY
Real estate and commercial lending are beginning to feel the negative effects of insufficient terrorism insurance coverage, says the General Accounting Office. In a report to the House Financial Services Oversight and Investigations Committee, the GAO noted that “an increasing number of commercial transactions are being cancelled or deferred” because of the unavailability of affordable insurance against terrorist attack. If the problem isn’t remedied, these cancellations could result in a slower economic recovery, concludes the report. The NATIONAL ASSOCIATION OF REALTORS and other real estate organizations are working to encourage the federal government to become the terrorism insurer of last resort. To review NAR’s position on terrorism insurance, visit REALTOR.org.
The State of Arizona scores high marks for its recent efforts at smart growth planning, according to a report recently issued by the American Planning Association. EntitledPlanning for Smart Growth: 2002 State of the States, the document bases its high evaluation of Arizona on the state’s passage of the Growing Smarter Growth Act and the creation of a 15-member Growing Smarter Commission. The legislation:
· Requires large or fast-growing communities to establish voter-approved plans that include designated growth areas.
· Grants counties the same power as cities to assess developer impact fees, provided the county adopts a capital improvements plan.
· Requires local plans to analyze how water will be supplied to serve future growth.
· Authorizes municipalities to designate infill incentive districts and adopt an infill incentive plan to encourage redevelopment in such districts.
· Mandates municipal government authorization for subdivision and split-parcel reviews involving five or fewer lots.
The study cited nine other states--California, Hawaii, Maine, Nevada, New Hampshire, New York, Texas, Utah, and Virginia--for statewide initiatives that strengthen local or regional planning requirements. On the downside, the report found that 25 percent of states didn’t have, and weren’t seeking to implement, significant statewide planning reform.
California continues to lead the nation in the number of active real estate professionals, according to the 2002 Digest released by the Association of Real Estate License Law Officials. ARELLO says there are 311,900 practitioners authorized to engage in the real estate business California. Of this number, 204,990 are licensed as salespeople, 89,938, as brokers, and 17,062 as companies.
Pennsylvania has the second largest licensee population with 230,511. Other states with more than 100,000 active real estate licensees are Florida (157,391), Texas (115,139), and New York (102,435). North Dakota has the fewest number of licensees (1,838), just slightly below Alaska’s 1,885.
FM Watchis questioning whether Fannie Mae actually is fulfilling its original mission to help “underserved communities” obtain real estate mortgage financing. Fannie Mae reported helping 676,000 minority families obtain financing in 2001--an 86 percent increase over the previous record year of 1988.
Beneva Schulte, spokesperson for the Washington, D.C., FM Watch, says her group isn’t questioning the accuracy of the numbers. Schulte alleges that Fannie Mae receives $10.6 billion in government benefits, which Congress mandated must be used to “lead the market” in increasing the availability and affordability of housing finance. But according to FM Watch, Fannie Mae lags the private sector in serving those homebuyers.
Fannie Mae spokesperson Robert McCarson said FM Watch’s charges are motivated by competitive self-interest. As he sees it, “FM Watch is [engaged in] a public relations and lobbyist smear campaign paid for by Fannie Mae’s competitors, including large mortgage insurers . . . and subprime lenders.” FM Watch is backed by trade associations that represent financial and housing-related industries.
Thanks to their sheer numbers, aging Boomers were responsible for most of the significant growth in the homeownership rate during the 1990s, reports Multiple-Housing News. The publication noted that a study by Dowell Myers of the University of Southern California found that as Boomers moved from the 35-to-44-year-old to the traditionally higher ownership 45-to-54-year-old age group, their homeownership rate rose from 66.2 percent to 75.3 percent. Movements between age groups account for 1.2 percentage points of the overall 2 percent increase in the homeownership rate in the '90s. There was very little increase in homeownership rates in other age groups, with the exception of those 65 and over, said Myers.
A new effort to reduce traffic in London’s central district appears to be having a detrimental effect on the future balance sheet of Cendant Corp. The recently adopted procedure will charge motorists five British pounds (about $7.15) for driving into the city center at peak hours (between 7 a.m. and 6:30 p.m.). London's rush hour traffic has grown nearly unbearable in recent years with twisting narrow streets and road repairs combining to snarl motorists. The Cendant connection arises from the company’s ownership in and current attempts to sell a subsidiary called National Car Parks whose lots charge 9 pounds ($12.88) to park for two hours. Prior to adopting the “pay-to-drive” plan, the investment community predicted that National Car Parks could sell for as much as $1.4 billion. Initial bids from a host of would-be buyers dropped that figure to about $1.1 billion. | |
|
