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Saturday, March 29, 2008

New Urbanism and Affordability

In a previous post I stated the 10 main principles of new urbanism. One of the most important of those principles is mixed use neighborhoods. This includes having affordable housing mixed in with the higher-end housing. This goal of new urbanism is a difficult one to realize as most of the affluent population of the United States have a biased fear of living in close proximity of lower-income households. It is a tough sale. I can just imagine the thoughts of many of the developers to whom Kennecott first pitched the idea of Daybreak when they heard about this goal. How well was this goal accomplished in Founders Village? I think that this goal was not accomplished that well in the first phase. I think Kennecott decided that this aspect of new urbanist communities had to grow on people. So Kennecott (and Calthorpe) decided to locate the majority of affordable housing on the outskirts of the community. The various shades of white town homes, the terrace condos, the row homes, and finally Garbett Homes' new complex are not located anywhere near the heart of the village. To give the planners credit, most of the housing was affordable when Daybreak was first introduced. However, Eastlake has definitely improved upon Founders in the integration aspect with most of the lower-end housing being integrated into the center of the neighborhood. In fact, Eastlake seems to be the opposite of Founders in that the expensive custom home lots and higher-end housing is located on the fringes of the village.

The difficulty of providing affordable housing in Daybreak has become evident. Only a select few condos remain below the median home value of Salt Lake County and demand for these units is starting to drive up price. This is not unique to Daybreak. The rapid appreciation of all real estate in Utah has rendered prices that the average income cannot afford. Nationally, new urbanist communities have had a difficult time remaining affordable. Seaside in Florida and Kentlands in Maryland have appreciated well beyond the range of middle-class affordability. Many even see these communities as elitist. Rich well to do people living in their own yuppy community fantasy. The Congress of New Urbanism, the main force behind the new urbanist movement, has admitted that affordability is a problem. In one of its conferences a speaker suggested that the only sure-fire way of keeping certain units affordable is bad design. They have been working on this issue for years, but have not really come up with a proper solution. Many proponents have suggested design attributes that may help affordability.

One of the solutions suggested by proponents is to have deed-restricted properties. Doug Cornish of Cornish Associates, a developer of a new urbanist community in the East, stresses,

Owners of the deed-restricted units still get the benefits of homeownership, including a share of appreciation. The rest goes back into a land trust, to help maintain a stock of affordable units in the community. Still, Storrs points out, for these first-time home-buyers, “the return is immense,” given that they may have put down less than $5,000,

Another way is to make sure that the exterior of affordable housing matches that of the higher-end housing. Make the dwelling as small as you like, skimp on indoor amenities, but do not make the outside of the house from inferior materials.

Bottom line: unless we can integrate affordable housing options into Daybreak, we will soon be known as a elitist society by many of our peers in other neighborhoods and diversity will not be truly achieved in Daybreak. Of course, many of the designs that I have seen in Daybreak might just keep it affordable. Many of you might ask the question: why should we try and keep housing affordable in Daybreak? One of the trademarks of a decent community is that property values go up right? Obviously this rings true, but the reason for the diversity is to eliminate the segregation that is a typical element of sub-urban sprawl. This in turn makes a community walkable and eliminates the poor or rich from having to commute out of their segregated neighborhoods.

Wednesday, March 26, 2008

A Buyer's Market

You hear it all the time on the radio, "It's a buyer's market, hurry don't miss the boat!" These ads are run by mortgage companies, home builder's, etc. Then you here the Utah Association of Realtor's commercial about getting the facts about Utah's housing market, that it is different than California or Florida. Go online and you find blogs and comments that talk of the bubble that is about to burst in Utah or the major price correction. Who are we to believe?

The case for a fairly stable market is strong. Economically Utah has been leading the nation for years. With a low unemployment rate and job growth that led to 55,000 new jobs last year alone, people can easily find jobs. Key sectors of the economy are growing and we have a net in-migration of about 41,000 people a year. Many of these people are equity refugees from other states and are buying houses. We have a bright economic outlook. Interest rates have gone down quickly in the last few months as the fed has cut several key rates. Sounds like a recipe for demand and price increases.

On the other hand, Utah has a big inventory of houses on the market right now. Enough to last about 10 months if nothing else is built. While home prices increased in 2007, the real estate forecast for 2008 is fuzzy. Forecasters have predicted low single-digit gains if not small decreases in home values. This forecast has put many would-be buyers on the sidelines watching and waiting to see what happens. Foreclosures have added to the downward trend with many people who bought homes that they could not truly afford. Possible inflation in the future may drive up interest rates. Just ask those who took out a home loan in the early 80s, to them 12% was a deal. While all this may sound scary most experts feel a major correction is unlikely.

What does this mean for Daybreak? It depends on your point of view. If you intend to stay in your home for five or ten years, then do not fear. If you need to sell your home now, then get ready to make some concessions and lower the price of your house. The market has been divided into two main segments: those houses over 300k and those under 300k. Daybreak includes both of these market segments. However, the under 300k segment is dominated by condos and the over 300k segment is the majority of single family homes in Daybreak. Condos and the low-priced small homes of Daybreak will sell fairly easily. The cheaper they are the easier they will be to sell. That's why Garbett Homes' cannot build their condos fast enough. The higher the price goes over 300k, the more discounts and price slashing will have to be done to sell the home. Unique conditions do exist. A house across the street from the temple, park, school, or other amenity might not have to be discounted at all. Looking at the recent statistics of houses sold in daybreak, prices have been reduced anywhere from 100k to 5k on homes ranging from 600k to 230k. Home builders in Eastlake have made concessions and reductions in price as much as 30k. The existing home market is where the big discounts are. Either way, for now it is definitely a buyer's market.

Saturday, March 22, 2008

Coming Soon: TRAX

One of the main principles of New Urbanism is the integration of mass transit into the community. In following this principle for Daybreak, Kennecott planned on a light rail line running through the town center. On all of the maps and brochures of Daybreak you can see the two future TRAX stations displayed prominently. The one word that always caught my eye on the map was "proposed." Not set in stone. Well it seems that this mass transit option will become a reality soon. UTA brought in the heavy-duty equipment to start building the line today. UTA projects that the project may be completed in the next three to five years. Will Daybreak be built out that far by then? The row homes and condos on the West side of Daybreak will be near the South station, but will the other villages North of that or the Town Center itself exist? Kennecott has a lot of building to do.

Kennecott did play a large role in encouraging the development of the TRAX line. They did it in classic Kennecott style: money and land. Kennecott donated hundreds of thousands of dollars to the initial study of the line. Greasing the wheels of development never hurts. They did this with the Mountain View Corridor as well. What will this mean for Daybreak residents?

  • Peak hours travel time to downtown Salt Lake City: 46 minutes
  • A train will come to the station every 15 minutes
  • Direct connection with commuter rail for regional travel
  • Two huge parking lots: 600 spaces and 400 spaces for park and ride
  • Direct transit to fashion place mall, covey field, energy solutions arena, U of U stadium etc.
You can see that there will be some pros and cons to the whole picture, but with good planning I can see the benefits outweighing any downside. APTA (American Public Transportation Association) has conducted numerous studies alongside university researchers on the value that a light rail line brings to surrounding property. The studies all agree that properties in close proximity to a station increase in value. The stations also give a commercial boost to those retailers located within two blocks of a station. The biggest benefit of all: less people on the road.

Friday, March 21, 2008

Businesses In Daybreak: A Wishlist

Everyone has their favorite stores that they would like to see in their neighborhood or close by. In many ways I miss the local independent businesses that were located near my neighborhood. Of course I would love to see similar businesses come to daybreak. Here are just a few:

Emigration Market

Emigration has served the Harvard/Yale community since 1942. The market specializes in the finest cuts of meat and seafood, bakery, produce, home delivery and is proud of it's award winning deli and catering.

Game Night Games

Game Night Games is a game store located in Salt Lake City that carries a large selection of strategy board games and card games, particularly European games. They feature an in-store play area and regular game nights, tournaments and events. The store is also available for private game parties.

Eggs In the City

This neighborhood coffee shop and diner is inviting and comfortable with large windows, cozy booths, and an outdoor patio. The food is simple but tasty, offering up a traditional menu of bacon and eggs, pancakes, sandwiches, and fresh bakery items.

The King's English Bookshop
The King's English is a locally-owned independent book store. They have the most comprehensive children's book selection in the state of Utah as well as mysteries, new fiction, poetry, literary nonfiction, nature, and western writers. They have eight book-packed rooms and host frequent readings and signings by both national and local authors.

Spoon Me
Spoon Me is a new frozen yogurt restaurant located in Salt Lake. The shop was started by a local entrepreneur that graduated from the U. Spoon Me cups, spoons, straws, napkins, even the garbage bags are 100% biodegradable in as little as 90 days. Spoon Me frozen yogurt is also low in sugar and with less than 80 calories a serving it’s a treat that everyone can enjoy.

Pollution Waning in Utah?

While many groups have been disputing the proposed Mountain View Corridor, the Wasatch Front Regional Council has released information indicating that automobile pollution is down in Utah. The report which can be found at attributes the trend to stricter EPA standards, cleaner engines, more mass transit options and increased awareness. I definitely consider this good news. I personally attribute the lower pollution to gas prices forcing residents to buy low emission vehicles. These new cars use less energy and go much further than their older counterparts. This is confirmed by the fact that a car in 1966 produced 57 times the amount of emissions than a car made in 2004. According to the report 51% of the harmful particulates in the air come from vehicles. These particulates are harmful to children especially those with asthma. With future solutions such as mass transit, ultra low emission vehicles, and tougher government standards, pollution in Utah will trend downward to a point that will be comfortable for us all.

One matter that was not strongly addressed was Carbon Dioxide or CO2 emissions. This gas is the primary culprit for depleting the Ozone layer. Locally we have a limited impact on our global atmosphere, but every bit counts right? Some things that we can do as residents are:

1. Make sure your car that you drive is in optimal shape. This means checking the tire pressure, getting a tune-up, and avoid stomping on the gas when the light changes to green.

2. Combine trips and people. When you do drive, carpool and try to squeeze all of your errands into one trip.

3. Walk and bike everywhere that you can. Considering the design of Daybreak, this will be much easier for us to do.

4. Trees. Trees filter the air and reduce home energy costs if you plant them in the right place. Planting a deciduous tree on the South side of your house shades windows from the sun in the summer and allows the sun to warm the house in the winter.

Saturday, March 15, 2008

Buying Local

One of the cornerstone principles of New Urbanism is that a community must be walkable. To be walkable, most of the essential needs of residents should be within a 10 minute walking distance. Schools, shops, dining, and recreation should all be a walkable distance from your house. So far, Kennecott has delivered well on these principles except for two obvious components: shops and dining. Kennecott is currently in negotiations with a variety of possible retail vendors for placement in the Village Center. I have heard different rumors about grocers, coffee shops, bakeries, and the like, but nothing solid yet. In the mean time, we go against the whole philosophy behind Daybreak: we get in our cars and drive to big box retail and grocery stores outside of Daybreak. Now that we have established our purchasing behavior with the big box stores, what will happen when the intended small stores move into Daybreak? These local businesses will have to start out in the shadow of the big box stores and they are right outside the front gate of our community.

The Boyer Company is the company when you are talking about commercial real estate. This company has a portfolio that includes the Gateway, Draper Peaks, Quarry Bend, and the Junction. This is the company that planned and built The District right outside of Daybreak to the East. Kennecott has less than stellar relations with The Boyer Company. In fact they filed a lawsuit against South Jordan on November 3rd of this last year accusing the city of making a back-door deal with The Boyer Company. The deal was to put a high-density housing development right next to Daybreak. This deal would have made a traffic nightmare and did not consider the impact of the surrounding community at all.

So will our local shops survive in a big box world? That question will be answered collectively by the Daybreak community. If we want to be able to walk down the street on a Monday afternoon to buy the meat for a barbecue, fresh produce for a home-made smoothie, or the best lure to catch fish in Oquirrh Lake, then we need to support the local businesses that come to Daybreak. In business you vote with your money. Buy local. But don't just support the local businesses because it is part of the overall Daybreak master plan, do it because of the many benefits gained by everyone:

Local, independently owned businesses are the heart and soul of any community. These are the stores in our neighborhoods; their owners are our friends and neighbors. More often than not, it is the knowledgeable service and attention to your needs that you value and respect in local businesses. What you may not know is that local business contributes more to the local economy, since the money you spend at a local merchant has three times the impact in our local and regional economy. Those who work with local businesses are more likely to earn a living wage and receive benefits. Food that is produced locally is fresher and requires far less energy to transport to market And not insignificantly, it is local business owners who are there with contributions for schools, hospitals, local projects, youth groups, neighborhood functions, and civic projects. They don’t have to go to corporate headquarters for approval. The owners are your neighbors. -Local First Utah

According to the professional brokers flier that has been circulated, Kennecott has signed Black Diamond (rock climbing & multi-sport facility), a baker, a grocer, and will have a music conservatory. I hope they succeed in making Daybreak a truly walkable community.

Sunday, March 9, 2008

Crime in Daybreak

How much crime is in my neighborhood? This is a question that everyone is concerned about. I can tell you that my former residence was located in a part of Salt Lake City that definitely had a lot of crime. When I moved to Daybreak I found that I was still locking my doors, but that I had definitely gained a sense of security that could not be found in my old neighborhood. For this article I decided to compare the crime statistics from my old neighborhood and Daybreak. Fortunately, statistics are available for both.

According to government published statistics, in the last 3 months my old neighborhood had 84 crimes committed within its boundaries. The most notable of these were 5 cars stolen, 1 sexual assault and 1 aggravated assault. Of course my old neighborhood looks tame compared to a West Salt Lake neighbor hood that has had a few homicides and drive-by shootings. Daybreak on the other hand is not without crime, but is definitely better. The South Jordan Police Department has seven sectors from which they gather crime statistics. Daybreak is partially covered by sectors 1 and 7. In these sectors approximately 48 crimes were committed in the last 3 months. However, sector 1 covers The District which reports all thefts from their stores which adds up quickly from month to month. It also covers the neighborhood around the district which has had a few problems in the past. Talking to a South Jordan policeman, I found out that crime in Daybreak is really as low as it can get in a community this size. Daybreak definitely wins the safe neighborhood award here.

With houses so close together and neighbors who keep a watchful eye over the neighborhood, new urbanism plays its role in keeping crime down. Daybreak also has an official neighborhood watch program. South Jordan even sponsors a citizen's police academy which gives one class a week for nine weeks. This class is great place to learn about your local law enforcement roles, techniques, and concerns. If by chance you ever do witness something suspicious or have information you can call the hotline at 253-5281. Hopefully with neighbors looking out for each other and a good police department, crime will stay low in daybreak.

Saturday, March 8, 2008

Affordable Daybreak Options

I wrote a blog article a while ago about first-time home buyers being priced out of Daybreak. Well it seems that measures have been taken to ensure affordability with a new home builder being introduced. Garbett Homes is now building terrace homes in the Southwest corner of Founder's Village. I went to the sales office just to take a look inside and found the interior of these condos to be quite appealing. With a starting price of 159,000, it is definitely an affordable option for those who cannot afford to live anywhere else in Daybreak. I did find out that there is a hitch to this deal. According to the staff on site, HOA fees for each unit will be around 150 per month. Fairly expensive if you ask me, but those fees will definitely help out the HOA budget so I'm not complaining. I still think that it is amazing that just a few years ago you were able to get an actual house for this price in Daybreak.

The Temple Effect

The idea that a temple will raise the value of all residential real estate within close proximity is called "the temple effect." The location of future temples is a heavily guarded secret because of this very effect. Imagine the real estate speculation that would happen if news of a future temple site were to be leaked to the public. This is a case of simple supply and demand economics. The supply is few. Not every LDS follower can live right next to a temple. However, most of the devout LDS population want to live as close as possible. This high demand and limited supply drives prices of nearby real estate up. While this is simple in theory, it can be more complicated with varying circumstances. The size of the temple, its topographical location, and the demographics surrounding the location are all variables.

The Oquirrh temple will be about 60,000 sq. feet and will reach a height of 183 feet. As LDS temples go this particular one is right in the middle for size. But considering the outstanding spot that the temple was placed in, you will be able to see it for miles around. Unlike the Salt Lake Temple, the Oquirrh Temple is located literally within yards of residents at Daybreak. With the lake, parks, and distinct architecture that Daybreak has to offer, you have a recipe for a literal boom town of value appreciation. Whether the market goes up or down in the next few years, those houses that are between the temple and the lake, especially on the promenade, will be sold for a premium in the future.

Ken Edmunds, a Mormon developer of a 49-unit subdivision near Twin Falls' new temple, paid a premium for his land. When asked about it he said,

"In my mind, it was an economic cycle-proof development. And that was proven out."

An actual study has been done about the temple effect. This study focused on temples being built in areas that do not have a dense LDS population, but found that the value of the homes increased all the same. The study was conducted by Steven J. Danderson and can be found at This study used rigorous economic and real estate models in their scientific investigation. Of course most of the appreciation of value has already been realized, but long-term appreciation effects and cycle-proofing are benefits that will endure.

Monday, March 3, 2008

First-time Home Owners in Daybreak

I have talked to a lot of potential first-time home owners in Daybreak. You see them all the time. They are walking through the parks, at the visiting center, walking out of the model homes, and driving slowly while their heads swivel looking at the houses. These prospective buyers have been passed up by the whirlwind of appreciation that has lifted the Utah housing market in the last 5 years. If these couples had been old enough or bought at the right time, then they would have nearly 100,000 in equity to put down on their new house in Daybreak. As it is they can barely make a 3% down payment. For the most part, these seem to be honest hardworking people who just missed the boat. Many of them can no longer afford some of the town homes in Daybreak let alone an actual house. Because of this we will see a dramatic shift in the demographics of Daybreak. The main difference will be between Eastlake and Founder's Village.

Founder's village contains those original residents of Daybreak. These families bought their homes when the starter homes were going for the mid 100s. At the time you could buy a house with an income of just over 40,000 a year. Yes, two teachers together could easily afford to live in Daybreak. The down payment required was half what it is now. These "starter" homes are now selling between 265 and 330. Well out of the price range of the aforementioned teachers. These young families moved in at the right time. The 1100 kids that go to Daybreak Elementary are a testament to the demographics of Founder's Village. Eastlake on the other hand might be altogether different. Are young families still moving into Eastlake? Yes they are, but not near as many. Are these possibly teachers or blue collar workers? Not unless they were able to get in on the equity from the housing boom. No, these will be families that have already owned homes for a few years or have high incomes relative to the average income in Utah. Essentially these families are more likely to be established and have older kids. This will bring a whole new demographic to Eastlake. Instead of toddlers running around in the splash pool you might find teenagers running around the new swimming pool or lake.