How did TIC handle the early-to-mid-90s housing bust?

NEW -> Contingent Buyer Assistance Program
Westpark was being developed during the last recession. The land usage was efficient based on a grid system to maximize density. Since no land was wasted home price was affordable at $145/SF compared to communities developed before the 90’s recession for $170/sf and the home buyers convinced by the price drop began to buy. Trees were planted in precise orderly fashion and parks were designed functionally flat for recreation. Most homes came with much smaller backyards and shorter front yards. Creative zero lots and Z lots were introduced to allowed my neighbors to benefit from the use of my unusable side yard. More sf of homes was sold per acre in Westpark than any previous communities.



Communities developed prior to the 90’s recession have picturesque quality. Landscape was designed to evoke a sense of natural scenery. Plantings were deliberately done in random clusters. Both Woodbridge and Turtle Rock have curvilinear street pattern and unexpected surprise of neighborhood pocket parks and large passive parks with meandering paths and topography. The wasted land and lower density were absorbed into the higher selling price. Less sf of homes per acre in older communities compared to Westpark. Homes have greater setback and bigger yards but also were priced $25/sf higher for the extra elbow room between neighbors.



The price drop for a brand new home made sense and the newer smaller homes also have 4 bedrooms just like homes in Woodbridge and Turtle Rock. Newer floor plans were efficient. Site planning were cleverly packed together like a jig saw puzzle. More revenue was generated per acre than the previous communities prior to the 90’s recession.



Renaissance of fresh ideas in 1995 enticed home buyers’ desire to upgrade. Mahogany and Mayfield built in Northwood revolutionized the home building industry. More home builders from across the country and curious neighbors visited the 2 projects than Disneyland that year. Taylor Woodrow printed 200,000 brochures per project. Garages were located at the back with private driveway located under porte cochere. Detached granny flat was built over the garage at the back of the property. Garages were hidden and turned sideway to avoid ugly garage doors facing on to the street. Porches were introduced to add a friendlier feel to the neighborhood. Courtyards brought light and ventilation to the middle a house were previously would have been dark retrofitted with a leaky sky light. There were a grand front stairs and a back stairs that went up to a ping pong room.



People wanted to move out from their old, tired and dated house and move up to one of the new prototype. People want to trade in their old Macintosh Performa for an Apple Slimline or their walkie talkie for an Iphone. That was the start of a buying frenzy and creative financing did the rest.



TIC has a tougher job this time around than the last. What is possibly out there to be invented?
 
<p>Jcara,</p>

<p>Have you looked at that mess over on State College and the 5?</p>

<p>"Free rent up to $5000"</p>

<p>They can't sell them, and they can't rent them either. Oops, there's another 700 or so units within a block of that project that are 90 days away from being ready to occupy.</p>

<p>They only build high density when land costs drive them to do it. Looks like nobody can build anything today and make a profit if my trusty HP10B still works right.</p>
 
OC buyers are into "lifestyle". Prefab is todays generous and politically friendly term for trailer park. Higher density is key but look at Avenue One and the Highrise inferno. Green Buildings cost more to build and there just are not enough Birkenstock peace loving buyers out there willing to pay more to compensate for the expensive recycling process. The city is mandating Leed certified requirement but the consumers will not buy a recycled home to save us from a recession.
 
Learn from the toothpaste company. Use the same size tube but take 1/2 once out and pump air in to fill the vacant cavity. Label the weight in very fine print at the back of the tube. Oversize the exterior box packaging and use cardboard shims hidden inside the box to prevent the toothpaste inside from wobbling. The assumption is the tube is as big as the box. Then lower the price. Now translate that to creative land planning and architectural design.
 
no_vase, wow, thanks for the market update and your intimate knowledge on real estate finance, but the question was, "what's left to be invented?"



I suggested pre-fab which, yes i agree is currently the PC term for trailer park, but like it or not this is the future. Some of these SFR's in the OC can be considered partifally pre fab as trusses are completely manufacutred off site. Ikea, has started their own line of pre-fab, and whatever you think about the design, these buildings,when the tech is right and the volume goes up, will be much much cheaper.



High density isn't only built due to land cost, for one, there's zoning code, and for another, there market niche, some people want condos because they are cheaper. Very simplified reasoning would be that an $800K house is would move slower than two $400K houses on the same lot. Extreme case would be the high rise with $200K units that are like 200 sq ft.



In so cal, new home construction is already practically leed certified due to the state regulations, there's just the additional reporting, paperwork and plancheck that makes certification a headache. I don't know what blks problem is with the recycling process as it's a non factor, the bigger more expensive problems tend to be with energy efficeny and runoff. Anywyas, green is potentially a marketing tool (i don't buy that theory), but as time progresses, could effectively lower upkeep costs and promote healthier lifestyles (big maybe) which could factor into the homeowner upgrade from a power book to that ultra thin mac laptop.



That's gotta be the stupidest analogy ever, i feel dumber for having read it. Thanks.
 
JC:



1. Where are they going to build prefabs? Why would they do it when they can construct something and add more value? Notice nobody's built a trailer park in some time in SoCal? You need cheap land for that part of the equation. Which brings us to............



2. High density only works when land costs are sky high - or, if the project is blessed by a bankrupcy. Belive it or not, there is plenty of developable land in SoCal. It just isn't cheap. Zoning is the easy part, getting the whole value equation to turn positive is the real trick. And the sky high RE prices are now gone.........



3. Green housing. Yeah, whatever. Not enough granolas. Scratch that. Not enough granolas who are trust fund babies. It's not cost effective.



Anyway, you're entitled to your opinion. Even if it is wrong. Becasue even though there is some truth to your points, the biggest one is my trusty calculator, which won't go positive for some reason.



I wonder why that is?
 
<p>After rereading, I missed the question.</p>

<p>"<em><strong>but the question was, "what's left to be invented?" </strong></em></p>

<p>IMO - nothing. Bkshopper hit it square.


</p>
 
OKay, now you're just being ignant no_vase. they build pre-fab on land, any piece of land will do. Big piece's of the home are built in factories and the ultimate building is assembled on site as a permanent structure. Sure, they may have some design and development left before they become cheaper and more appealing to the masses, but they are on there way, its something left to be invented.



Zoning is the easy part? That may be the dumbest statement i've heard on this website. This is California, not texas.



Yes, it's obvious that green currently does not pencil, as i previously acknowledged, that why it's something left to be invented.



Well, you can't make a deal pencil with just your calculator, first you actually need some intelligence...err..financial intelligence, second a calc alone can't factor the complex jv or profit sharing structures, third land and construction prices are moving all the time, clearly, you have nothing to do with development and i'm sure your numbers are way off. Ha ha, this is you dude, this is you brah, "duh, duh, one acre of land equals one home, and my place is duh worth $800,000 and so duh that land is worth duh $800,000 so duh i can't duh build it there cause IHB says its stupid to be in real estate duuhhh plus 6%"



But what i really want from you is a detailed explanation of the toothpaste analogy. And let's try to focus on the positive rather than making pathetic attempts to shoot down other people's ideas.
 
<p>JC, I appreciate your valiant and positive attitude. It is an idealistic way to think about the future. There are places where Prefab, Modular component in repetition, and Leed certified building material could be employed. It is still quite academic and this idealogy is every architectural students' dream project. Institutional and public projects is much farther ahead in this idealogy than housing. OC is not ready for it and consumers are still looking for their castle in various forms: detached, attached or stacked.</p>

<p>Land is too expensive in OC to put just prefab on it because the perception by most consumers of the structure is "cheap". Saving money on construction cost by prefab is good but not being able to sell it kills the deal. To justify the price tag the structure has to be a "wow" sitting on a piece of expensive land. A good example would be by replacing Mrs.IR's dream home with a prefab house in Shady Canyon she would not love it as much. One would not built a Wal-Mart near Nordstrom at South Coast Plaza eventhough Walmart is cost effective, high density stocked merchandise and heading green with its products specification. </p>

<p>I have seen customization of prefab. No matter what kind of trim packages added to the single wide or double wide to enhance their appearance the perception is the same eventhough the door knob or the toilet is gold plated. The width of the roads will always dictate the prefab module. </p>

<p> </p>
 
I appreciate that you appreciate, but shady canyon is a terrible, nay worst, example. A good example would be starter homes in the great park, where, if pre-fab homes were built, they could be sold at low to mid $300K. We are talking about strategy on how a developer could handle digging themselves out of a housing bust, i offer reducing construction costs by using pre fab construction techniques. What's your bright idea?



Gee, tell me again how pre-fab homes are unappealing, i didn't get it the first three times. I recognize that, which is why I suggested it as an innovation. Zero lot lines and Z lots were considered unappealing in the 70's and 80's but they are common place now. Even three story townhouses were considered unsellable just a few years ago and they've become appealing to many first time buyers. Yes, for the last time, i understand prefab is the pc word for trailer, but technology gets better and everyone's perceptions change, except old people with lots of cats, and clearly that's whose posting in this thread.



There's a sears next to nordstroms
 
"i offer reducing construction costs by using pre fab construction techniques. What's your bright idea?"



Let them go broke?



The construction costs aren't out of control (once you strip out the stainless/pergo/granite). The land costs are.



FWIW, My wife is a S.E. and is of the opinion that prefab stuff is of higher quality than build in place, but if you do prefab, you cut the builder out of the profit stream. If he can't make a profit, he won't do it.



Your ideas all have merit. And all of them ignore the fundamental problem: they have to be profitable for somebody to take them on. But for some reason you don't want to talk about that.........so I guess I'm done here. Feel free to continue to rework the wheel all you like.



Have a nice evening.
 
In terms of what to build, the answer is mixed-use. The demand for mixed-use communities vastly exceeds the supply, which is reflected in the steep premium New Urban developments get everywhere. There's a lot of possibilities for both practical and aesthetic ideas in mixed-use, especially with regard to welding it to a traditional suburban background. TIC may be too wedded to 20th century zoning to try it, but I've got my fingers crossed.
 
<p><em>"except old people with lots of cats, and clearly that's whose posting in this thread".</em></p>

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<img alt="Jen" src="http://www.lolcats.com/images/u/07/35/lolcatsdotcomd353r93bctv2b2wp.jpg" />











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