Why has Texas fared better?  Ironically, Texas, a pro-business state, has better and more logical mortgage regulations that helped avoid toxic loans: Restrictions on Home Equity Loans (a borrower can only borrow 80% of their home equity), restrictions on sub-prime loans (limits on balloons and prohibitions on pre-payment penalties) and better regulations on mortgage brokers. In most other states, borrowers used their homes as an ATM cash machine as their home values increased.  Additionally, poor credit borrowers were encouraged to takeout sub-prime loans they could never repay.

The result: Texas foreclosures are much lower than the national average and Texas housing prices did not experience hyper-inflation and therefore never came crashing down. From January 2000 until they peaked in 2006 or 2007, the price of single-family homes rose 174% in Los Angeles, 181% in Miami, 135% in Las Vegas and 107% in 20 metropolitan areas tracked by the Standard & Poor’s/Case-Schiller Home Price Indices. In the Dallas-Fort Worth market, by contrast, home prices rose less than 27% before peaking in June 2007. Housing prices were also stable because supply and demand remained in balance with new home construction and resale.

The city signed a deal with local firm Austin Urban Rail Partners to complete the study. Officials hope to have the results in time for an expected vote on the rail plan next November.

The effort is part of the Austin mobility program, which aims to mitigate traffic.

The project is separate from the Capital Metropolitan Transportation Authority’s rail line and does not involved Cap Metro.

“If downtown and all the roads are full, then we have an economic issue in Austin,” Rob Spillar, Austin’s transportation director, has said.

The city will need at least some preliminary engineering results by spring to have a good chance at for a transportation bond on the November ballot.

Department officials are optimistic, but “we will not head into something we are not prepared for,” a spokeswoman has said, adding that bond issues are up to counsel discretion.

If officials decide more work needs to be done, it could be deferred to a May 2011 election.

On Monday, the Federal Housing Administration started limiting the number of buyers in condo buildings that can get loans insured by the agency. The rules also put restrictions on buildings with poor finances, too many delinquent owners and a high number of rentals.

The tighter lending standards are designed to protect the financial health of the FHA. Roughly 18 percent of loans insured by the FHA are either delinquent or in foreclosure and the agency’s financial cushion has dipped below the federal minimum.

But the move is a blow to condo buyers because the FHA has become a key source of mortgage financing. The agency insures roughly one in four new loans today because buyers need to have only a 3.5 percent down payment.

“It is a huge debacle for us,” said Rene Oehlerking, marketing director for Salt Lake City developer Garbett Homes.

The company has canceled a 300-unit condo project, spending $300,000 to redesign it into free-standing homes. Most of the builders’ homes and condos this year went to buyers with FHA loans.

Garbett’s condo project didn’t pencil out with the new FHA rule that allows only half of a condo building’s units to have FHA-backed loans, with some exceptions. That number falls to 30 percent in 2011.

Another new rule requires at least 30 percent of units in new buildings be pre-sold before the agency insures any loans. That number will rise to 50 percent in 2011.

Government officials, however, say the rules are necessary to ensure consumers are purchasing units in viable buildings and to help ensure that defaults on condo projects don’t rise too high.

While the rules could be tough for builders, they will protect consumers because lenders will be forced to be more careful about which projects they fund, said Richard Vetstein, a real estate lawyer in Framingham, Mass.

“On the whole, it’s a good thing,” he said. “Financially sound condominiums make better investments.”

In the 27 metropolitan areas covered in the ZipRealty survey, housing inventory dropped by an average of 28% over the last year and 2.4% during the last month. In Austin, the number of home listings slid by 19.8 percent over the last year and 3 percent between October and November.

The slide in inventory is a positive step: it means that supply and demand are returning to a more normal balance after a very difficult year. While seasonal trends will cause inventories to rise again in January, it’s the year-over-year trend that is most important.

According to the Journal, the one month change is less significant as “Inventories typically decrease modestly in November compared with the previous month, according to Zelman & Associates, a research firm. Over the past 25 years, the average change has been a decline of 1.8%.”

The Journal also notes that the exact level of supply is impossible to pin down, partly because multiple listing services don’t include all the foreclosed homes that banks are preparing to put on the market. As of the end of October, banks and mortgage investors had 639,000 foreclosed homes for sale across the U.S., Barclays Capital estimates. That’s equivalent to more than 10% of expected U.S. home sales this year. The bank-owned homes are largely concentrated in Florida, California, Arizona and Nevada.

The MLS also excludes newly constructed downtown Austin condo units that are not being sold by realtors. This means that most of the units in the Austonian, Four Seasons, W, Spring, and other projects are excluded from the inventory numbers. Since the same was true last year, the 12 month change does seem to be a significant development.

New construction is unlikely

Updated: Thursday, 19 Nov 2009, 7:44 PM CST
Published : Thursday, 19 Nov 2009, 3:41 PM CST

• David Scott

Share and share a car

German car maker introduced 200 Smart cars to Central Austin streets in car-sharing pilot likely to expand to public next year.

By Ben Wear
AMERICAN-STATESMAN STAFF
Wednesday, November 18, 2009

Snub-nosed, blue-and-white Smart cars suddenly were as common as grackles downtown on Tuesday.

The City of Austin and car2go, a subsidiary of Stuttgart, Germany-based Daimler AG, launched a car-sharing partnership and released about 200 of the truncated two-seaters in the city’s core. The stubby vehicles — they’re less than 9 feet long and get about 33 miles per gallon in city driving — will be parked here and there around town, and city employees who register as car2go members will be able to use them free of charge for errands related to city business.

They’ll be able to use them for personal business as well but will have to pay 35 cents a minute during those trips. Members can either make a reservation up to 24 hours in advance or walk up to an available car2go vehicle and, after completing a series of steps, drive away. A Web site will show where each available car is at any given time.

If the several-month pilot project works out as the company expects, next year it would bring even more Smart cars to Austin and open membership to anyone willing to pay by the minute or hour for a set of wheels.

The company, which will keep track of where each car is parked, will have a corps of employees maintaining them and keeping them gassed up. And, under a barter agreement with the city that allows free use by city workers on business, there will be no parking charges for the cars, which have “car2go” logos prominently displayed.

The city will pay nothing under the agreement but will set aside 40 marked parking spaces around downtown for the cars and “host” about 85 of them in municipal garages and parking lots. The rest will be, in effect, free-range Smart cars, although each trip must begin and end within a “geo-fence” roughly bounded by 51st Street, MoPac Boulevard (Loop 1), Oltorf Street and Interstate 35. Trips may extend outside that area, however.

The nonprofit Austin CarShare offers seven vehicles for short-term rentals, but with the new venture, Austin will move in a big way into the growing “car-sharing” movement. As of July, there were more than 320,000 registered car-share members in the United States, according to Susan Shaheen, a lecturer and researcher at the University of California, Berkeley. What makes the Austin program “interesting and provocative,” Shaheen said, is the one-way nature of the rentals.

The option for one-way trips is more expensive because it requires more workers to bring the cars in for maintenance, Shaheen said. “One-way is very, very rare,” she said.

Zipcar, another car-sharing company, has about 6,500 car-share vehicles in 50 cities in Canada and the United States, including at Rice University in Houston. Dallas and San Antonio have no car-share programs, Austin CarShare board member Brandi Clark said.

“The more the merrier,” Clark said of the Daimler venture. “Car2go can afford to do what Austin CarShare can only dream of doing.”

This will be car2go’s second such proving ground. The company a year ago released 200 Smart cars into the streets of Ulm, a town of about 125,000 people in southwestern Germany, again starting with public employees. The program was opened to the general Ulm populace in March, said Nicholas Cole, president and CEO of car2go’s North American division. About 15,000 of the town’s 80,000 licensed drivers are now members, the company says, and the cars are rented up to 1,000 times a day.

Aside from the $16,000 cost of each car, the company covers insurance, fuel and maintenance. With more and more Austinites living downtown and others perhaps considering public transportation to get to work if gas prices shoot up again, Daimler believes it can make a profit offering Smart cars as an alternative.

“This sort of fills that gap,” Cole said. “Is it my expectation that people will start selling off their cars? Not immediately.”

The Ulm program is not profitable at this point, Robert Henrich, car2go’s European president, said in an interview after the program was unveiled at an elaborate news conference Tuesday at the Long Center for the Performing Arts.

The company estimates that each car must be rented four hours a day on average for the initiative to be profitable.

Here are the rudiments of how the program would work were it expanded beyond city employees:

Licensed drivers 18 and older could register as members online, listing their driver’s license number and a major credit card number for payment. If approved, they would receive a membership card in the mail a few days later. The cards have microchips that communicate with a card reader just under the windshield on the driver’s side. Becoming a member would be free initially, Cole said, although that policy might change later.

If a car is not checked out to another user — the reader has green and red lights to indicate availability — passing the membership card near the reader would unlock the driver-side door. Then, after the customer answers some questions on a dashboard computer screen, the car key would be released from the glove box.

The timer would begin when the car starts. That 35-cents-a-minute rate would be discounted for longer use: $12.99 an hour or $65.99 for a full day. And if the gas tank is below a quarter full, a driver would use a prepaid credit card in the glove box for a fill-up. In that case, 10 minutes is deducted from the trip time to account for refueling.

No smoking and no pets would be allowed inside the car. Eating is OK, but members would be expected to leave the car’s interior clean when they release the car.

A driver could go as far as 200 miles outside that geo-fence in Central Austin but would have to leave the car inside it at the end of the rental.

When one leg of a round trip is completed, the driver could either keep the meter running while leaving the car to do something else or sign out, return the key to its hiding place and risk losing the vehicle to another user.

bwear@statesman.com; 445-3698

By Shonda Novak | Wednesday, September 9, 2009, 03:47 PM

In the first major new hotel announcement in nearly two years, a 17-story hotel is planned for downtown Austin near the Warehouse District.

The hotel, proposed for the southwest corner of West Fifth and Colorado streets, would be a new “eco-luxury” concept called One, by Starwood Capital Group. Starwood Capital has billed the concept as the first luxury, eco-friendly global hotel brand.

Starwood has hired Woodbine Development Corp. to build the hotel with 250 to 275 rooms.

Woodbine, a seasoned hotel developer based in Dallas, developed the Hyatt Regency Lost Pines near Bastrop, as well as the Hyatt Regency Hill Country and the Westin La Cantera, both in San Antonio.

Steve Drenner, the Austin attorney for Starwood Capital, has filed a request for a zoning change that would allow a building with more square footage than city rules allow. Many downtown projects have received such allowances, including the 360 condominium tower and the W Austin Hotel and Residences under construction north of City Hall.

The higher side of the Starwood project would face Fifth Street, rising approximately 210 to 215 feet. The southern side, backing up to the Warehouse District, would be 30 to 35 feet high. There also will be a large deck, about 60 feet above ground level, with amenities including pool, public bar and “green” roof with significant landscaping.

The site is now occupied by a two-story brick building.

The board of the Downtown Austin Allliance, a group of downtown property and business owners, has endorsed the zoning change after hearing a presentation on the project last week.

Molly Alexander, executive director of the alliance, said that Starwood’s willingness to bring its new concept to Austin “continues to prove that Austin is the place to test new products, and that downtown is still a hot market.”

And to roll out a project with an emphasis on green features and sustainability, she said, “shows that we are on the cutting edge of the next phase of development.”

The City Council will have the final say on the project once it moves through several city commissions for approvals.

The zoning process is expected to be completed before the end of the year.

The hotel is the first new hotel project to be proposed downtown since Hixon Properties Inc. announced plans in February 2008 for a Westin hotel at Third and Colorado Streets. Hixon has not said when it would start the project.

Several other downtown hotel projects have been put on hold due to a lack of financing, including a 1,000-room Marriott hotel planned on Congress Avenue between Second and Third Streets.

At the former Seaholm Power Plant, a mixed-use project is planned that would include a 180-room hotel. Jeff Trigger and his La Corsha Hospitality Group will oversee the construction, management and operations of the hotel, but work may not start until next year, Trigger said.

“Currently, neither we nor the debt financing market are ready to begin construction of the high-rise building where the hotel, office and residential uses will be housed. We hope next year when we are ready, the financing will be as well,” said Trigger, former managing director of the Driskill Hotel.

Effort aims to attract upscale demographic and area investment

Bobby Longoria

Daily Texan Staff

Jacqueline Gilles/The Daily Texan

Two people walk by Mother Egan’s Irish Pub on West Sixth Street on Monday afternoon. A new bar and hotel are planned as renovations to the neighborhood get under way.

The West Sixth Street district will undergo renovations during 2010 that will add to and transform aspects of the area’s character and commercial viability.

Plans to renovate the area will include building redevelopment, as well as the reconceptualization of the area to attract a more mature and affluent demographic. Bars undergoing renovation projects include Star Bar, Hi-Lo bar and Mother Egan’s Irish Pub. Also, a new bar, the Kung-Fu Saloon, and a hotel will be added to the district in the near future.

Mother Egan’s will undergo extensive renovations, which will include a complete tear-down of the building’s interior. General manager Grant McMichael said the bar established in 2000 will lose its lease in May 2010 to the Womack brothers, who own the Chuggin’ Monkey and recently began running the Molotov Lounge.

“The character of West Sixth Street has become very different than what it was when Mother Egan’s opened,” McMichael said. “These other bars popped up, and they have been changing the dynamic to a more upscale expensive attire — more like Dallas.”

Stratford Property Group President Chris Horne is a developer for the new hotel project and a managing partner with Nick Adams on the development of the Kung-Fu Saloon.

The hotel will have 16 suite-style rooms and the property will be a mixed-use project encompassing a cocktail lounge open to the public, a street-side coffee house, small office spaces for lease and a conference center.

“The hotel will be a first-class, garden-style, low-rise, contemporary boutique hotel,” Horne said.

At this point, the renovations are not within the city of Austin’s downtown redevelopment plan. Michael Knox, city downtown officer and Economic Growth and Redevelopment Office co-project manager, said the city may consider the West Sixth Street district as part of a city-sanctioned redevelopment.

“A portion of West Sixth may be looked at as part of the Downtown Austin Plan district planning in an upcoming phase,” Knox said.

Adams said the Kung Fu Saloon will be a relaxed, upper-scale concept featuring vintage arcade games such as “Ms. Pac Man,” classic table games including Air Hockey and a full bar.

McMichael said West Sixth has been going in a new direction for the past two and a half years and that it is far different than what it was 10 years ago. He said Mother Egan’s business has been stable even within the recession and that this was not a deciding factor in the bar losing its lease.

“They are knocking this place down and building an entirely new concept,” McMichael said. “Yeah, it’s not destroying the character of Austin — obviously we are in a recession and the city is still opening up new businesses and bars. It’s not what I want to happen, but [in the] big picture, it’s what’s best for the economy.”

To my relief, the meeting was not confrontational. They agreed wholeheartedly with my recommendations. Which allowed us to dig into a hundred or so questions I had about their strategies for preserving and improving this vital social gem.
The main eye-opener: Although work on the the Waller Creek Tunnel will begin in January, it will take four years to complete. If businesses decide to improve their properties along the creek’s banks in the interim, they’ve rolling the dice that a major flood could wash away some amenities.
As it stands, downtown’s northeast sector, split by Waller Creek, remains something of a blank slate. Positive developments include full apartments across the street from Club de Ville and Mohawk, a planned national Episcopal archive on Seventh Street and a youth center/parking garage for the First Baptist Church uphill of the archives. That leaves too many blocks fallow. But gives developers time to consider much-needed affordable housing. (The type of development that has lifted the southwest sector is hampered by terrain and Capitol view corridors).
Even blocks away, this makes an impact on East Sixth Street, as does the campus for the homeless on East Seventh Street. City leaders are looking into a comprehensive strategy for the homeless on the model of San Antonio’s Haven for Hope. But it’s not likely to land elsewhere, given the city’s rampant NIMBY-ism. Improved order — along with consistent, disciplined empathy from all of us — seems the only answer.

_____________________________________________________________________________________________________

What about the seemingly abandoned business sites, like the burned out Black Cat club? Turns out rebuilding is often hampered by overlapping building code requirements in one of the city’s oldest neighborhoods. The Black Cat, for instance, needs a larger water pipe for a new sprinkler system. The good news here is that the current City of Austin administration gets good marks for coordinating such needs across government departments.
All agreed the East Sixth Street sidewalks require complete replacement — wider, better designed and easier to clean. (One can’t spray down often vile East Sixth Street weekend mornings because of environmental concerns. That and the poorly chosen sandstone sidewalk pavers would erode almost immediately.)
Among the positive gains for these groups pushing downtown improvements is the addition of traditional retail — groceries, apparel, etc. — to complement the glut of restaurants and bars. I’m not sure how well shops such as Patagonia, St. Bernard Sports and The Texas Clothier are doing, but the real test will come when the new residential and hotel towers come completely online.
What could really help East Sixth Street and downtown as a whole: The same thing that could help the country— liquidity and credit. Key projects like the planned Marriott complex on Congress Avenue have been sidelined because even the highest-rated developers can’t raise the money.
East Sixth and surrounding areas will still be plagued by low-impact storefronts — like the Texas Lottery offices at Sixth and Red River streets — and warehoused land, such as big swaths of East Fifth Street. You can’t force landlords serve the greater good in a strong property-rights state.
Still, I’m delighted to know that nonprofits like 6th Street Austin and Downtown Austin Alliance — as well as business leaders like League — are working quietly, diligently to make East Sixth Street and the rest of the urban core welcoming for everybody.