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Saturday, August 16, 2008

What is in a Name?

Most streets in Utah follow the grid system and are therefore generically named with numbers. It is only when you have entered the residential neighborhoods that you start to see names for the streets. Is it easy to name a street? Not if you live in a valley as big as ours. Each time a development is planned, its founders must struggle to find names that have not already been used somewhere else in the valley. The names must be submitted and go through several different entities to assess if the name is unique and practical. Most of the names submitted are rejected.

Some developers will get creative with their street names. This can be a good or a bad thing. Some will create theme neighborhoods. Names like oak circle, pine street, maple lane, and a dozen other trees will find their way onto the street signs. In the neighborhood just South of the University of Utah you will find that many of the streets are named after ivy league schools. You will find Cornell, Harvard, Princeton, and Yale for example. They can also get corny with the names as well. Apparently there is a neighborhood in California that named its streets after Star Wars characters. Vader Avenue anyone?

Some names are clever, Hemming Way, Ubinaranda Circle, and Willbea Road. Others just make you shake your head. How would you like to live on Finally My Way? So when I started to see words that I had never heard of before on the street signs in Daybreak, I thought that I would look up their meaning.

In Daybreak, a few of the street names are actually French. Mille Lacs means “thousand lakes” and Lac Vieux means “old lake.” Of course many of the names in Daybreak seem to be the average type of names that you would expect of a new development: Cold Canyon, Warm Canyon, Cool Canyon. However, there is a theme that most Daybreak streets have in common. Most of them are named after lakes or towns in the Midwest and Southern portions of the U.S. Degray? Lake Degray, Arkansas. Greer’s Ferry? Greers Ferry, Arkansas. Dardanelle? Dardanell, Arkansas. Coralville? Coralville, Iowa. In fact, most of the names seem to be concentrated in Arkansas, Illinois, Iowa, Missouri, California, Oklahoma, Michigan, Maine, Minnesota, and Oregon. Why? Who knows, maybe some of the planners of Daybreak left a small imprint of themselves by naming the streets after places in which they grew up or have fond memories. I can only guess. If someone knows, then please comment and enlighten us all. In the meantime I encourage you to look up the street you live on. You might find something hidden in plain sight.

Saturday, August 9, 2008

Daybreak Down Payment Option: First-Time Home Buyer Tax Credit

While Utah has so far enjoyed a relatively small decline in the residential real estate market, many other states have not fared so well. With the strict standards in place for mortgage qualification and the lack of plentiful buyers home values have dropped quite rapidly. In light of this crises, the US government has made efforts to intervene and boost the economy. One of the facets of their efforts is the First-Time Home Buyer Tax Credit. For those who would like to purchase a home in Daybreak any time soon: listen up.

The First-Time Home Buyer Tax Credit is not an actual tax credit. A tax credit is when the government either reduces your tax liability or increases your tax return dollar for dollar. The name sounds like it is free money. It is not free money. However, this does not mean that you should not consider using this program. The First-Time Home Buyer Tax Credit is actually an interest-free loan. You pay the loan back via your taxes for the next fifteen years. At this point you may be asking - is it worth it? My answer is definitely yes.

If you understand the time value of money you will know that a dollar in 1993 was worth more than a dollar now in 2008. Why? Because it had more buying power. It could buy you more bread, electricity, even gas. (Actually then it could buy you about one gallon) That was 15 years ago. In short, while you will have to pay every cent back to the government in the next 15 years you will gain a lot of value with this deal.

The maximum amount that you can qualify for is 10% of the value of the home you intend to buy with a cap of $7500. So if you buy a home in Daybreak you will qualify for the full amount. You can even use the tax credit as a down payment for your new home if you work it right. You get the benefit of the tax credit after you file right? Yes, however, right now FHA financing requires a minimum down payment of 3.5%. On a $250k purchase that is $8,750. The FHA allows a buyer to borrow money from family for down payment. This means that a first time buyer could borrow the down payment from relatives, make a home purchase, then use the tax credit to pay back all or a portion of the borrowed funds.

If your still not sure, consider this: assuming an interest rate of 7%, the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. If you are still a little worried about the housing market in Utah consider this: if it goes down further and you are forced to sell, then you will not have to pay back the government for the tax credit "loan." So if you are on the edge, it would probably be a good idea to jump off before the July 1st, 2009 deadline.

Two Creeks in Herriman, Utah: A Disaster in Density

In an earlier post I mentioned housing density and how it impacts the surrounding community. The main point of the article was to show that density in and of itself is not a bad thing. However, if a dense development is not properly planned and located, it will almost certainly have a detrimental effect on the community.

When writing that article, I was not aware of the aspirations of a developer to build a high-density rental development in Herriman. Considering the proximity to Daybreak, this development will almost certainly affect those residents of Founders Park Village. Daybreak as a whole will be affected by this new development as the new high school for the area will be located adjacent to the development.

The new development will be called Two Creeks. Miller Timbergate Associates LLC appeared before the Herriman City government to gain approval for the first two phases of the project: Timbergate and Farmgate. These two phases will be dense. At around 20 units per acre, this will truly be the densest development around. Even Daybreak following the concept of new urbanism cannot claim densities as high as this development. Even if densities get higher in Daybreak in the future, they will be integrated into the community with a transect style of planning. Two Creeks is located near homes that are not even close to the planned density of nearby developments. Imagine your home next to multiple 4 story, 32 unit complexes. The Two Creeks plan suggests that the developer wants to develop his land his way without regard to the surrounding community in a piecemeal fashion that really doesn't fit.

The estimated population of the two approved projects is 1,696 people. With this many people, traffic is a real concern. However, this development will be located next to the proposed path of the Mountain View Corridor. By doing this, much of the traffic from the development will likely be dissipated. Not a bad idea right? Most local governments are in cooperation through Envision Utah to put higher densities next to the transit corridors. One problem with this plan is that it assumes that the Mountain View Corridor will be built and that when it is built that it will not be a toll road. If it is a toll road, I cannot imagine many of the residents of Two Creeks utilizing the road. TRAX is nearby, but these residents will be made to cross not only 118th South, but also the Mountain View Corridor to access it. Unless significant infrastructure is put in place to make this crossing safe, you will see additional problems. It will just be easier for them to hop in a car and drive. The location of this development, on the fringe of Salt Lake County, should also be a consideration as the price of gas would prevent the necessary long commute for many of these residents. Most of which are calculated to not have substantial financial means.

The traffic problem will only be exacerbated by the fact that the new area high school will be located literally within feet of the development. I wonder if all of the sports facilities that come along with the high school will be perceived as amenities for Two Creeks. Also, with the concentration of a lower socio-economic population you will have dual working parents and transient families. With many of the parents gone, I can imagine quite a few students hanging out in Two Creeks without supervision after school.

The single worst part of this development is that it will concentrate thousands of citizens of a lower socio-economic class. As stated in an earlier post about density this can cause a multitude of problems. Crime and social disruption will increase in this area with such a large concentration. This cluster will enable all of the myths that are associated with a higher-density development to have an opportunity to come true.

I have it from a good source that these units are meant for government Section 8 housing. The Section 8 program allows those who qualify to pay rents that are adjusted to their income. 30% of their income goes to rent. For example, if a low-income family made 1500 dollars per month they would spend about 450 dollars for rent each month. The government covers the rest. This program can truly help those in need, but the idea is to spread those who are on the program over a wide geographic area not concentrate them. We already have Section 8 families in our community, but they are dispersed.

So why is this happening and why now? With the housing market being in doubt there are many people waiting out the market in hopes to buy when the market starts to go up again. Other people cannot afford a mortgage as the new lending criteria prevents them from qualifying. So what do these people do? They rent. With Utah’s strong economy, there are more people moving to the valley in search of jobs and many will opt to rent for a variety of reasons. All of this combined has pushed monthly rents up 10% in the last year alone. The rental market is starting to look really attractive to a lot of investors. I would not be surprised to see a lot of developments pop up in various communities that are high density and haven’t been integrated properly. That is why people need to be more involved at the local government level about what happens in their community. I believe the Sunstone residents (just to the west of Daybreak) would agree with me as they seem to have attended the relevant meetings and have even appealed the approval of Two Creeks. Hopefully this mess will be stopped before it is too late.

Saturday, August 2, 2008

Utah Obesity and Daybreak

The University of Utah recently released a study that compares rates of obesity with where people live. This study concluded that people who live in older neighborhoods are significantly thinner than residents of the newer suburbs. Most of these older neighborhoods were built before 1950, but considering the amount of building during the depression and the war, you will find that many of these neighborhoods had homes built in the first and second decade of last century. It was during this time that mixed-use communities were still legal before the separate zoning of commercial and residential. A prime example is the Yale / Harvard area of Salt Lake City. With village centers at 13th South and 17th East, 15th South and 15th East, and another nearby at 9th South and 9th East, most people can walk to the necessities of life. Schools are right in the middle of the neighborhood as well.

This study adds to the growing amount of literature linking obesity to non-walkable suburbs. People find it easy to say Americans are lazy and gluttonous, but the fact is that many U.S. communities simply are not designed for walking. Utah suburbs discourage walking because they are not very safe for pedestrians. Simple attributes such as sidewalks or traffic calming devices are not present. Another discouraging factor is when walking in a cul-de-sac you literally have to walk through a maze of secondary streets to reach most destinations. The only real direct route is to cut through yards. In the traditionally designed suburb, most destinations are not even within an easy walking distance of the homes. All of these factors play a role in discouraging pedestrians. This new study indicates that this active lifestyle is simply easier to achieve in communities that are walkable.

Virtually everything American society has done for the past 100 years has made it easier for us to be lazy. Early concerns about this were shown by the government with fitness and health campaigns being introduced in the early fifties. Currently, it is estimated that 17.1% of US kids Ages 2-19 Are Overweight. This sedentary lifestyle that correlates with obesity does not necessarily stop in childhood. This lifestyle is carried on to adulthood where almost two-thirds of all adults are overweight or obese. It is passed down through the generations, but this is not done solely by genetics. If you are overweight your child has a 40% greater chance of being overweight or obese. With so many opportunities to exercise in Daybreak, it is time that parents be an example to their children and lead a healthy lifestyle.

While Daybreak is cited in this study as being a model of healthy residential development, the study is only referring to the Daybreak that is planned. In an earlier post I talked about walkability in Daybreak. Daybreak is currently not a walkable community. This status will only change once the village center is up and running. With the giant district behemoth shopping center outside the gates, it will be difficult to entice residents out of their cars to visit local shops.