by The Associated Press

ATLANTA – The number of people 65 and older living in metro Atlanta will more than triple in the next 24 years, according to the Atlanta Regional Commission.

The wave, estimated at 917,000 people, is the result of a big number of aging baby boomers and a growing number of retirees flocking to Atlanta because of its amenities and climate. But some question whether Atlanta’s housing market will be affordable enough for a swelling senior population.

Seniors on fixed incomes often can’t afford a traditional neighborhood home and have problems with maintenance because of declining physical skills, said Kathryn Lawler, director of the Aging Atlanta program.

About one in four Atlanta seniors pays more than 35 percent of his or her income for housing, according to research by the Commission. And many seniors are not able to afford houses even in neighborhoods built for those 55 and older, where homes usually cost from $200,000 to $500,000.

That’s why some developers, like Noel Khalil, are building housing for seniors who can’t afford high rent. Khalil built the 132-unit Columbia Heritage Senior Residences in Atlanta with federal tax credits to keep rent affordable. The maximum rent for a two-bedroom unit there is $795 a month.

“What I am very concerned about is, as the tsunami of boomers age, I am not clear in my mind we will have enough housing for them,” Khalil said.

A local nonprofit, Mercy Housing, is planning a 65-unit apartment complex for seniors in Chamblee. Ground hasn’t been broken on the project yet, but the organization already has a list of 35 applicants.

Some of the counties in the state are beginning to respond to the housing demand by creating special zoning for senior housing. Cobb County was the first in the state to do so, hoping to make it easier to locate seniors’ homes near transportation lines, shopping areas and traditional neighborhoods.

But some Cobb County residents argue that senior housing is too-high density for many neighborhoods and could create problems.

To succeed in a tough market, you’ve got to change your strategy. MONEY found owners, sellers and buyers making smart moves in three very different markets.

Money Magazine
By Stephen Gandel, MONEY Magazine senior writer
May 29, 2006: 1:51 PM EDT

NEW YORK (MONEY Magazine) – Home sales are slowing. Condo prices are slipping. Sellers can’t get their asking prices.

And even real estate bulls are now waving the caution flag.

If you’re expecting a short-term gain, “you should be looking elsewhere,” says Christopher Mayer, a Columbia University economics professor who not long ago argued that land shortages and rising populations would translate into ever-rising prices in “superstar” cities like New York and San Francisco.

Clearly, it’s time for a re-think, whether you’re mulling over buying, selling, refinancing or remodeling a home or investment property. Or if you’re just wondering, Is our house still worth what we think it is?

The short answer: It depends on where you live. If you reside in one of the past decade’s boom markets along the coasts or in the Southwest, brace yourself. Prices there were powered by two kinds of fuel: low interest rates and the willingness of buyers to pay up for the American dream.

That tank is almost empty.

In Los Angeles today, the median dream goes for 10 times the median income. That’s unsustainable no matter how creative banks are in coming up with new hybrid loans.

Mayer thinks that, with fewer people buying but plenty still hoping to cash out, prices in the most expensive markets could drop 15 percent in the next year, if mortgage rates rise another point. The forecasters at Fiserv Lending Solutions and Moody’s Economy.com, who crunched the numbers for our 12-month nationwide forecast, aren’t so pessimistic, but they’re hardly Pollyannas.

Prices will flatten in most ex-boomtowns this year, and next year will be worse, says David Stiff, Fiserv’s chief economist. “A lot of markets – particularly those where prices have increased dramatically compared with income – will see drops by late 2007,” he says.

Those declines are expected to range from a few percentage points in Boston to as much as 20 percent in Miami and Las Vegas, says Economy.com’s Mark Zandi. The more unhinged prices are from local incomes, the more likely a fall.

That doesn’t mean, however, that real estate is about to crash across the United States.

First, if you live someplace that hasn’t gone wild – think Atlanta or Philadelphia or just about anywhere in the Midwest or Texas – you’ll see slower rates of increase, but losses aren’t likely. “There are sizable parts of the nation’s housing market that will be just fine,” says Zandi.

Second, a strong economy and job growth should hasten a return to a normal housing market in which prices rise just a bit faster than inflation. Since World War II, notes Stiff, the housing market and the economy have moved largely in sync.

Then, starting in 2002, the Federal Reserve’s rate cuts in the wake of the tech meltdown and 9/11 kept home prices rising even as the economy stalled. “Now, as the housing cycle unwinds,” Stiff says, “the rest of the economy will keep growing. That puts a floor under prices and will let housing and the economy sync back up.”

The caveat, of course, is that if the economy falters, housing will really start to look overvalued.

So what do you do? If you’ve got a place you like, a mortgage you can handle and no plans to move or build a new wing, relax. But if you’re active in the market, or you soon might be, rethinking is indeed in order.

Again, your strategy should depend on where you live. MONEY found owners, sellers and buyers making smart moves in three very different markets:

By VIKKI CONWELL
The Atlanta Journal-Constitution
Published on: 03/02/06

During what could have been one of the most embarrassing moments of her life, Mashunté Glass possessed the poise and grace of a professional dancer.

As the young artist twirled on stage during a performance, her costume got caught in a fan. The audience erupted in laughter, but the brave teenager kept dancing.

“You learn to persevere over any obstacle, no matter how big or small,” said Glass, now 21 and a junior in college. “I had to pretend like it didn’t happen.”

Perseverance is one of the many skills Glass said she developed at Moving in the Spirit, a nonprofit after-school program that uses dance and movement to teach leadership and development skills. Moving in the Spirit recently was named one of 17 outstanding youth and humanities programs by the President’s Committee on the Arts and Humanities. It was the first program in the Southeast to receive the national honor, which came with a $10,000 award.

“I was able to be myself in dance,” said Glass, who joined at age 6. “It gave me much more confidence.”

Each year, the Grant Park/East Atlanta program instructs about 225 students ages 3-18 in various forms of dance. More than 1,250 students have participated in the program since its inception in 1986.

Students, most of whom are from inner-city neighborhoods, attend two-hour sessions two or three times a week, and daily during spring and summer breaks. The older students also tour the country during July.

Participants must audition to join the program and pay a fee ranging from $35-$60 a month, depending upon age group.

At age 22, Dana Lupton founded the program to build better relationships with youth. While other outreach efforts and ministries she had worked with removed children from their neighborhoods for short periods of time, Lupton wanted to develop a continuous and creative outlet for children within their communities.

“I had been so self-righteous, thinking I was coming in and saving these kids,” said Lupton, executive and artistic director. “I realized that my calling was to do things with kids and not for kids.”

Initially, Lupton brought dance instruction into community centers and children’s shelters throughout Atlanta before opening the current location. Through performances and choreography, she addressed issues such as social justice and racial reconciliation, while peer discussion groups helped teach love, respect and responsibility.

What began as an arts program evolved into a youth development center with 90 percent of high school participants attending college.

“Dance is a very powerful medium for expressing your thoughts and ideas in a constructive way,” said Lupton, who has a degree in business management and has a background in modern dance. “It’s about building mutual respect and a commitment to work together.”

For Jessica Scudder, who joined Moving in the Spirit when she was in seventh grade, the program has helped her trust and accept people of other racial and ethnic backgrounds.

“When you dance, you learn to share your space and adjust to different performing conditions,” said the college freshman. “I had to learn that everybody doesn’t understand us and our message, but I don’t let their ignorance change the way I am.”

Creating “ambassadors for social change” is the goal of the leadership training at Moving in the Spirit, Lupton said.

“They have a responsibility to stand up for those who cannot stand up for themselves and embrace tolerance … and make the world a better place,” she said.

Builders must raise home prices or see profits fall

By JULIE B. HAIRSTON, MICHAEL E. KANELL
The Atlanta Journal-Constitution
Published on: 12/10/05

The rising cost of building materials is putting pressure on builders to choose between earning lower profits and charging higher prices for new homes.

Prices for such materials as concrete, gypsum, PVC and steel have been rising steadily during the past two years, driven by global demand and a long-running boom in the U.S. housing market for new homes.

Hurricanes Rita and Katrina prompted even more dramatic spikes through the fall, as higher energy prices made it more expensive to get goods from port to market.

And with rebuilding in storm-devastated areas just beginning, many housing experts believe that the true impact of the hurricanes on construction materials’ prices won’t be realized for months.

As demand for building materials increases in the Gulf Coast region, other areas of the country, including metro Atlanta, could feel the pinch of higher prices, said Michael Carliner, chief economist for the National Association of Home Builders.

“Hurricane Andrew, which had destroyed the most homes of any storm up to that time, demolished about 28,000 houses,” Carliner said. “Katrina destroyed more than 200,000 homes.”

Oil prices are down dramatically from September’s crests, but they are no longer falling and remain above last year’s levels.

Rising oil prices not only have made oil-based products such as carpet more expensive, they also have jacked up the cost of material deliveries, said Terry Russell, chief executive officer of John Wieland Homes and Neighborhoods.

The expense of concrete, too, is wearing on home builders, Russell said. Not only are home foundations dependent on concrete, the piping systems under the homes use it as well.

Pressure on margins

The increased price of construction materials is squeezing builders’ margins. Russell estimated that materials constitute about one-third of total building costs.

What builders and developers now must decide is how much of that cost to pass along.

“Where we can recapture these costs, we do,” said Casey Hill, president of the Georgia division of Pulte Homes, Atlanta’s largest home building company. “But it’s hard to recapture dollar-for-dollar in the current market.”

The challenge is especially difficult for small builders.

Covington home builder Ross Mundy said materials account for more than half of the price tag of a Ross Mundy Custom Home, so there’s no avoiding some effect on the listing. “Costs have gone up, and in turn, we are having to raise our prices about $10,000 to $20,000.”

The prices he pays have jumped 15 percent for carpet, 20 percent for concrete and 30 percent for lumber, just since Hurricane Katrina hit the Gulf Coast in late August.

Builders are struggling to read the tea leaves on an uncertain economic outlook for 2006 as they decide how to cope with their rising costs. Economic experts warn of a potentially dramatic slowdowns in some of the nation’s hottest markets, such as San Diego, Miami and New York.

But locally, housing industry experts expect Atlanta’s Sun Belt location, the absorption of Gulf Coast evacuees and more stable housing prices will keep the market humming.

“In a down market, a lot of locations still do very well,” Russell said. “We’ve done very well here.”

Many builders are taking a wait-and-see approach to pricing new homes.

Atlanta-based Monte Hewett Homes has delayed putting a price tag on many houses until the costs for materials are easier to gauge.

“It may not be until February or March that we see the full change in prices due to Katrina,” said Dina Gunderson, director of marketing for Monte Hewett Homes, which is building and selling about 150 homes this year.

New eye on prices

Some subdivisions have been priced — for now. “Some we are starting in March or April, and we will re-evaluate the pricing after the first of the year,” Gunderson said. “Unfortunately, that has to be factored in.”

This is easier to do in some parts of metro Atlanta than in others. Both location and the style of home factor into builder’s ability to sell.

Homes are built in a place to appeal to a particular set of purchasers with a certain buying power. In a good market, where demand is solid, there’s usually some wiggle room, but shove the price too high and you might disconnect the buyer from the home, Mundy said.

“Location is everything in building,” he said. “As we have to increase our prices, you look at your locations and hope that you did the right thing in building there. So far, we are still selling houses.”

Will the materials costs mean a substantial change in prices?

“It really depends on how drastic the charge is going to be,” Gunderson said. The company’s operations manager “determines each month how much it costs to build every one of our homes. And pricing is evaluated and possibly re-evaluated each month as needed.”

Published on: 11/09/05

A major home builder’s warning of weakness in next year’s housing market chilled Wall Street on Tuesday, halting the stock market’s latest winning streak at four sessions.

Given how important home building and home sales have been to the economy during the past four years, the prospect of slower growth was enough to send the prices of housing shares plunging.

Toll Brothers shares fell $5.36, or 13.8 percent, to $34.05. The Dow Jones home construction index fell 7.4 percent on Tuesday.

“It appears we may be entering a period of more moderate home price increases, more typical of the past decade than the past two years,” said Toll.

Toll lowered the number of homes it expects to sell next year to a range of 9,500 to 10,200 from its earlier projection of 10,200 to 10,600.

The company said it had detected that home buyers were taking longer to make their buying decisions after Hurricane Katrina, which Toll attributed to a “significant decline in consumer confidence in the last two months.”

Among home builders, the shares of Atlanta-based Beazer Homes USA fell $3.36, or 5.3 percent, to $59.98.

Even before the hurricanes, strategists were speculating that rising interest rates, paced by the Federal Reserve’s increases in short-term rates, eventually would have a negative impact on the housing boom.

Long-term bond rates, to which mortgage rates are pegged, had failed to rise as much as expected over the past two years, but recent trends indicated that the long rates are moving higher.

The benchmark 10-year Treasury yield rose to a seven-month high of 4.66 percent last week, or high enough to attract investors.

That yield, which moves opposite to price, has moved down this week on increased bond buying.

Another factor is this week’s Treasury auction of $44 billion in government debt, starting Tuesday with three-year notes. Five- and 10-year notes will be sold today and Thursday. The yields on all those notes have been at their highest levels of the year.

The price of crude oil also moved up slightly on Tuesday to $59.71 per barrel in New York. Gasoline futures rose 0.4 percent to $1.5623 per gallon, but heating oil futures fell on reports of increased supplies.

In other trading on Tuesday, the shares of Atlanta-based home improvement retailer Home Depot were also affected by the Toll report. Its shares fell 93 cents, or 2.2 percent, to $40.57.

Fairmont Hotels & Resorts rose 2 percent to $36.29 on the disclosure that investor Carl Icahn and affiliates now control 9.3 percent of the company.

Icahn reportedly had urged Fairmont to sell some of its hotels or other assets, among other strategic options.

After four consecutive winning sessions, the Dow Jones industrial average closed Tuesday at 10,539.72 with a loss of 46.51 points, or 0.4 percent. The Standard & Poor’s 500 fell 4.22 points, or 0.4 percent, to 1,218.59; the technology-weighted Nasdaq composite index fell 6.17 points, or 0.3 percent to, 2,172.07; and the small-stock Russell 2000 index fell 5.01 points, or 0.8 percent, to 656.23.

> Area works to go from pass-through to settle-down city

> By KAREN HILL
The Atlanta Journal-Constitution
> Published on: 03/24/05

Chamblee has always been filled with the sounds of people going somewhere else.

It’s been that way in this northwest DeKalb County city of 9,522 people, tucked just inside Atlanta’s Perimeter, for almost a century, beginning with the doughboys whose training marches through nearby Camp Gordon are part of the soundtrack of World War I.

They were followed by Navy and Marine pilots who trained here before flying off to the far corners of World War II; the blue-collar workers who traveled Chamblee’s main drag, Peachtree Industrial Boulevard, to the sprawling General Motors auto plant in neighboring Doraville; and the commuters from tonier suburbs driving through — or parking and taking a train at the Chamblee MARTA station — on their way to downtown Atlanta skyscrapers.

But these days, hammers are adding staccato accents to the steady rumble of cars and trains and planes in Chamblee, as a growing number of fed-up commuters and empty-nesters are calling the formerly pass-through city home.

Several townhome developments, with the brick and wrought-iron look of old money in an old city, are sprouting up in Chamblee, whose core is tucked just east of Peachtree Industrial, the beaten path of car dealerships, fading strip malls and fast food franchises that make up Chamblee’s better-known face.

Now the city is trying to present a different look. The turnaround began in 2001, when Chamblee received a $1.9 million grant to begin developing its “Mid-City District,” where the townhomes are being built.

Rachel Pero is one of the newer residents willing to gamble on Chamblee’s future.

“We feel like this may be the next Virginia-Highland. It’s nice and safe and clean,” said Pero, sitting recently with a friend in a new Italian restaurant that anchors one of the new townhome developments. Pero and her husband, Peter, grew up in north Atlanta but moved to Chamblee, where they own the Antique Factory, one of the dozens of antiques shops in town.

The townhomes under construction up and down Peachtree Road in Chamblee mean more neighbors, more community — and more business, Pero noted.

“We sell a lot of mid-century, ’50s stuff, and the lofts going in have the look of a lot of what we sell and buy. You can buy a loft and furnish it all in one day, all on the same road,” Pero said.

The influx of higher-end residential development is noteworthy in Chamblee. The city’s inexpensive housing and access to public transportation drew large numbers of immigrants in the 1990s. Chamblee’s foreign-born population increased to 64 percent in 2000 from 33 percent in 1990. During the same period, its white population fell from 54 percent to 45 percent.

That mix of old and new is part of the city’s emerging identity. Kara Paden, a co-owner of Slice Pizzeria, grew up in Chamblee. She said she was struck by the buzz of energy in town when she and partner Mario Gonzales were considering where to put their business. It opened in February, on the ground floor of Heritage Lofts.

“”They’re cleaning up, they’re getting grants, they’re making a new Chamblee and drawing people,” Paden said of city officials. “We’re just trying to get in on the ground floor before it gets huge.”

The city got seed money from the Atlanta Regional Commission through its Livable Centers Initiative. That initiative gives cities money to plan and build more pedestrian-friendly communities that encourage people to walk. The goal is to reduce air pollution and traffic congestion.

In Chamblee, ARC money translated into a chance to transform about 250 acres of forlorn industrial sites, many of them padlocked, into a small enclave of shops and restaurants, ringed with townhomes. So far, the plan has attracted five residential developments that have either built or plan to build 438 townhomes or apartments.

A planned commercial development on the site of a closed BellSouth office building will be anchored by a Wal-Mart SuperCenter, albeit one more discreetly cloaked than usual, with three-quarters of the parking underground and smaller retail shops rimming the development’s perimeter.

Chamblee’s approach has differed from the “not in our back yard” reaction that has sometimes greeted Wal-Mart elsewhere in metro Atlanta. City Manager Kathy Brannon said the retailing giant’s move to Chamblee has been relatively trouble-free.

That’s because no annexation or rezoning was necessary, she said, and the building guidelines for the Mid-City District already were in place.

Brothers Eric and Neil Johnson are building 25 townhomes near the Wal-Mart site, on land that had been a MARTA parking lot. Five have been sold and seven more are under contract to empty-nesters and young couples paying $320,000 for three-story homes, including two-car garages, Eric Johnson said.

Eric Johnson said he was impressed that Chamblee was planning its growth, unlike other areas where “there’s no control; it’s just rampant.”

When the brothers finish building the townhomes, they plan to begin work on a mixed-use retail development nearby.

“To build a town center, a community . . . there’s nothing like it,” Eric Johnson said.

The proposed Beltline project would increase the city’s parkland more than 40 percent. But for now, it’s just a vision.

> By STACY SHELTON
The Atlanta Journal-Constitution
> Published on: 02/14/05
On the crest of a hill overlooking an old train track and a sunset view of downtown Atlanta’s skyscrapers, 2 acres of possibility await in Reynoldstown.

A padlocked fence with barbed wire protects the city-owned lot. Inside, the only visible assets are a covered vehicle and a storage shed.

But there’s so much more.

A 141-page report released last month by the Trust for Public Land, a national land conservation group, sees the overgrown lot turning into Holtzclaw Park, one of four parks proposed along 22 miles of train tracks looping Atlanta and called the Beltline.

The site could become a beautiful neighborhood park at minimal cost, according to the report, written by the design team of Alex Garvin & Associates of New York.

“Due to its small size, an organized group of neighborhood residents might even spend a Saturday turning this abandoned lot into a spectacular gem,” the report suggests.

Atlanta’s proposed Beltline has been dominated by visions of a trolley or train line encircling the city, accelerating redevelopment for lofts and funky urban businesses in formerly abandoned industrial centers and blighted neighborhoods. But the first plan to hit the streets is not about transit-oriented development. It’s a proposal to create a connected series of new and expanded parks.

The Trust for Public Land’s grand, green vision, as laid out by one of the country’s top urban planners, would add 1,400 acres of parkland, increasing the city’s existing park acreage by more than 40 percent. Atlanta would no longer be a basement dweller among big cities when it comes to public parks.

The vision includes joggers running around the Atlanta Waterworks reservoirs on Howell Mill Road, à la New York’s Central Park; boaters sailing on a quarry-turned-lake west of downtown; and horseback riders cantering along a Georgia Power easement in southeast Atlanta.

“All this is speculation,” said Jim Langford, the land trust’s Georgia director. “What do people want to see happen? What does the city want to see happen? We’re laying this out as a possibility.”

A 21st-century model

The problems are as numerous as the possibilities.

They are specific. The potential lake is now Bellwood Quarry, owned by Fulton County but under lease to Vulcan Materials Co. through 2034. If converted to a park, it would become the city’s largest at 579 acres — nearly three times larger than the current title holder, Freedom Park.

The problems are also comprehensive. Acquiring just the parkland could take 10 to 20 years and cost several hundred million dollars. On the upside, though, most of the properties identified in the report as potential parkland are already owned by a public entity: the city, Fulton County, MARTA or the state Department of Transportation. Langford said fewer than 150 landowners control the rest.

A public-private effort would be needed, much like the trust-led Chattahoochee Land Protection Campaign.

Since the mid-1990s, that effort has raised $141 million in government grants and private donations to create a protected greenway along the Chattahoochee River from its source near Helen downstream to Columbus, on the Alabama border. About 70 miles of river frontage and 14,000 acres have been acquired.

While the Chattahoochee campaign will continue, Langford said, “We are evaluating now how and whether to do a similar campaign for the Beltline. Atlanta has done it for Symphony Hall, for the Arts Center. People have come together, and it may be time to do that for the Beltline. It can become a model: the 21st-century model of park systems in the country.”

On the public side, the Atlanta Development Authority, which focuses on economic development, is looking at whether a special tax district could be used to pay for the Beltline, from land acquisition to construction to maintenance.

‘City-altering experience’

The first large private donation for Beltline parkland was made last month by the Arthur M. Blank Family Foundation, which has decided to focus its donations for green space aquisition along the Beltline. The foundation gave the Trust for Public Land $2.5 million — some of it set aside as a challenge grant for others.

Elise Eplan, the foundation’s vice president for special initiatives, said the Beltline “would be an immediate, city-altering kind of experience.”

Another likely donor is the Robert W. Woodruff Foundation, which already has given $200,000 to the PATH Foundation for Beltline work, said foundation President Pete McTier. But first, that venerable Atlanta foundation will need to see more coordinated leadership behind the Beltline. “The various parts have to come together,” McTier said.

In addition to the Trust for Public Land’s report, MARTA and the Atlanta Development Authority are completing their own studies. And Gwinnett County investor Wayne Mason is trying to figure out what to do with the 4.6 miles of track he recently bought in northeast Atlanta, through some of the city’s priciest neighborhoods.

“It is a most worthy ambition for our city, but one that is completely fragmented and very expensive, particularly if it is to unfold as a unified project,” McTier said.

A history of neglect

If the city, and Mayor Shirley Franklin, take charge of the Beltline project, and if it comes to fruition, the next question will be how the city maintains the public spaces. Atlanta has done a poor job of maintaining its parks in the past, and not every park can generate a group like the privately funded Piedmont Park Conservancy to take care of it.

A 2002 report by Franklin’s Parks and Green Spaces Task Force found that the city spent far less to maintain its parks than cities recognized for their park systems. In 2000, Atlanta spent $58 per resident on park maintenance, while Seattle spent $160, Minneapolis $144 and Chicago $128.

As Garvin & Associates put it in its report, “There is no point in spending millions of dollars to create a great public realm if it starts to deteriorate from the moment it opens.”

Both the mayor’s task force and the Trust for Public Land report recommended setting up an independent city agency to run the parks. The Atlanta City Council, though, has opposed that concept, in part because members worry that it could open the door for a state takeover of city-owned Hartsfield-Jackson International Airport.

Ryan Gravel, whose Georgia Tech thesis launched the Beltline vision, is trying to engage the help of the people of Atlanta. He helped start Friends of the Belt Line, a nonprofit group, to give people a way to stay informed and take part in discussions.

“The Beltline is for the people, for the city of Atlanta,” Gravel said. “It will contribute to citizens’ quality of life both by offering parks and green space — which includes public health and other concerns — and also transit, getting people to work and where they need to go. And redevelopment in areas that haven’t seen development in decades. . . . It’s not just about developers, and it’s not just about the city. It’s about the people who live in the communties along the way.”

Trees for health

The Beltline would pass through 46 neighborhoods, within walking distance of more than 137,000 people.

Peggy Harper, a neighborhood leader inMechanicsville, in south Atlanta, and president of the Atlanta Planning Advisory Board, which advises the city on zoning decisions and other planning issues, said that whether or not a train ever loops the city, adding the parks and connecting them with a trail will make a huge difference.

“If nothing else, this NPU-V has the highest incidence of childhood asthma in the city of Atlanta,” Harper said. “If buying the Beltline keeps my children from having asthma, I’m all for it. And that’s exactly what happens when you put in a park and plant trees. The health of an individual goes up.”

> By ROBERT KIRKMAN
> Published on: 02/02/05

Debates about metropolitan growth and suburban development in the Atlanta region tend to focus on economics and politics: What are the costs and benefits, in money and political capital?

But debates about growth also have an ethical component.

Now, I know I’m already in trouble for saying this. Many are worried I’ll start denouncing suburbs as evil and suburbanites as immoral, misguided or stupid. I have no intention of doing so.

For philosophers, ethics is not just a matter of commandment, accusation, guilt and punishment. Instead, it is an inquiry into the values and obligations that should guide human conduct. It is a way of asking questions rather than a set of established answers.

Among the basic ethical questions: What is the best kind of life for a human being? What do we owe to one another? And, what can we hope for?

A particular way of changing or using our environment is generally good to the extent that it supports and contributes to a “good and just life” that can continue into the future; it is bad to the extent that it impedes or detracts from such a life.

Of course, people disagree strongly about what it means to lead a “good and just life.”

In saying that suburban development is an ethical matter, I mean only that it raises questions about values and obligations, questions that should have a central place in public debate and decision-making at every level.

We should focus on the three basic ethical questions: “well-being,” “justice” and “sustainability.”

In matters of well-being, the question is: What makes a good place to live? We should consider human health and safety, sense of place, community and family life, and access to educational, economic and cultural opportunities.

For example, suburban development provides comfortable housing in quiet neighborhoods for those who can afford to live in them.

But it also reduces opportunities for making physical activity a regular part of everyday living, and it has radically changed how we interact with our fellow citizens. We are much less likely to see our neighbors on a daily basis, and to live, travel and work with others unlike ourselves.

Matters of justice concern our obligations to one another and perhaps to nonhuman creatures and natural systems.

The questions include: Who gets to live here, and who bears the costs? Who is excluded? In what ways do those who benefit not pay their fair share of the costs?

We also should keep thinking about the relationship between private property and the public good.

For example, requiring developers to provide affordable housing as part of any new development will allow a wider range of people to benefit from living in good places, but it also imposes limits on the rights of developers to do as they see fit with their property.

We still must figure out when such limits are appropriate and who should have the authority to enforce them.

We also should consider sustainability: How long can the dynamics that shape this place last?

We should keep a sharp eye out for ways in which our patterns of building and living might undermine themselves by disrupting natural systems, imposing unbearable fiscal burdens, or by pushing the ideal landscape farther and farther out into the countryside.

As more people move into the suburbs, the suburbs offer less of the tranquility and semi-rural charm people are looking for.

When we bring all three sets of issues together, we are likely to find what many might expect — that the current dynamic of metropolitan growth has some good features, including clean and safe living places and access to economic opportunity for those who can afford to live in better suburban communities.

But there are also a number of serious problems, including persistent patterns of exclusion and the high environmental and fiscal costs of maintaining suburban infrastructure and suburban ways of life.

The challenge will be to have a serious public conversation about what better places might be like and how we can start to build them. This will lead us deeper into the much more difficult conversation about what it means to lead a “good and just life.”

But if we are honest with ourselves and willing to learn from each other, then we have at least a chance of making reasonable and responsible decisions about the future of our built environment.

Robert Kirkman is an assistant professor in the School of Public Policy and director of the Philosophy, Science and Technology Program at Georgia Tech. He has a degree in philosophy and his current research includes how environmental philosophy pertains to the built environment, especially to the process of suburbanization and metropolitan growth. He lives in Decatur.

Firm retools sites for mixed use

By DAVID PENDERED
The Atlanta Journal-Constitution
Published on: 12/20/04

It seems a little odd that the most active retail developer in metro Atlanta has demolished so much property, but apparently that’s part of the job of creating new places for people to live and shop.

The Sembler Co. has razed more than 1.2 million square feet of office and retail space, said Jeff Fuqua, Sembler’s president of development. More than half of that was near Perimeter Mall, where Sembler tore down two former BellSouth office buildings.

“We feel like we’re an agent of change,” Fuqua said.

Sembler has nearly $500 million worth of construction under way in metro Atlanta, Fuqua said. It’s developing projects in burgeoning Henry County and Atlanta’s emerging intown neighborhoods, in the aging Perimeter area and in bustling Canton.

Along with building retail space, Sembler is the master developer of projects that are to provide about 1,200 new residences near its big retail developments.

The company is at the forefront of the trend in the region to retool sites that no longer suit their most recent use. In this regard, Sembler is akin to the company building the mixed-use Atlantic Station development on the site of a former steel mill adjacent to the Downtown Connector.

Sembler’s two ventures near Perimeter are significant redevelopments. Sembler is retooling both the old BellSouth site and Park Place, an aging retail and entertainment center.

The 42-acre office site is no longer a traditional corporate campus in one of the region’s first centers of sprawl. Soon it will be a development that takes the trend of mixing retail and housing to a new height — 27 stories, to be exact.

Its high-rise condo tower will provide about 220 units near a six-story building of about 330 rental units. The retail center is to be about 500,000 square feet, which would fill a third of Lenox Square.

Park Place will be updated and about 110 condos built on land that once served as parking.

The two projects are high-profile examples of Sembler’s strategic plan. The plan presumes that shoppers are tiring of traditional enclosed malls and would prefer to spend their time and money at places that seem more like the Main Street of a small town that shoppers either once experienced or might wish they had.

Shoppers visit these “lifestyle centers” 3.8 times a month vs. 3.4 times for a regional shopping center, according to a trade group, the International Council of Shopping Centers.

There’s a market reason behind the shift to lifestyle centers that goes way beyond the warm and fuzzy, said Kenneth Bernhardt, who studies consumer behavior and is regents professor of marketing at Georgia State University.

“They have become more popular because they respond to the consumer’s poverty of time,” Bernhardt said. “Ten or 15 years ago, consumers engaged in recreational shopping. People don’t have time anymore. The lifestyle concept provides the same mix of stores that one might find in a mall, in a more convenient environment where one can get in and out quickly.”

Sembler is adding a few twists to lifestyle centers.

First off, the company is packing a lot of stuff onto rather small sites. Sembler has convinced big tenants such as Target that they can thrive with less parking than they might prefer. For example, at Perimeter Center Place, where a SuperTarget is the anchor, Sembler is building 60 percent of the parking that would serve this size development in most suburbs.

One of Fuqua’s rivals marveled that he could get tenants to agree to that amount of parking. “My hat’s off to Jeff,” said David Witt, executive vice president with Selig Enterprises. “You have to be a tough negotiator to get below the [parking] a typical retailer wants.”

Retail and residences

Another twist is teaming with a residential developer to build lots of housing on these small sites. The sites’ small size means residents will be within 60 feet of retail at both Park Place and the Edgewood Retail District being built in Atlanta, on Moreland Avenue south of Little Five Points.

Lastly, the architecture and materials used in the projects often reflect the taste of nearby residents. Buildings in the development near Little Five Points will look a bit like those in Virginia-Highland, because that’s what residents wanted. In Buckhead, the redeveloped Lindbergh Plaza will look a little 1950-ish, because that’s the look favored by neighborhood leaders there.

Negotiations with intown neighborhoods typically are hard-fought. Residents often have their own ideas on the type of project they want, particularly as intown development takes off with a rising number of households with disposable incomes attractive to retailers.

“It took months and months of negotiations, and we won some battles and lost some battles,” said Sally Silver, a Buckhead resident who worked with Sembler on the Lindbergh Plaza project. “We had hoped to not get another big-box development. We wanted a more urban style. But we are getting some retail . . . that we don’t have now and which you can get to right off the street. We’re getting a residential component on Piedmont Road that we’re told will be built concurrently with the retail, and having it built concurrently is important to us.”

Talks continue, even though progress is so far along that the old mall has been demolished. Retailers still are battling for attention-grabbing signs, which residents don’t want.

Sembler is a survivor in the cutthroat world of retail development. And as the company grew, its founder rose to the top of Republican circles.

Mel Sembler started his retail development company in 1962; it’s based in St. Petersburg, Fla. All the capital stock is owned by the officers’ family, and financial details are closely held.

Over the years, Sembler has built more than 80 major shopping centers and more than 120 free-standing retail stores, according to the company’s reports. The firm focuses on the Southeast and has an office in Puerto Rico.

Mel Sembler is no longer active in the company business, Dun & Bradstreet reports. Instead, he has shifted his attention to promoting Republican causes. Sembler has served as national finance chairman of the Republican Party and currently serves as U.S. ambassador to Italy. During former President George Bush’s administration, Sembler served as ambassador to Canberra, Australia, and continued to serve the former president as a trustee of Bush’s presidential library foundation.

Sembler’s two sons work for the company, and both are listed as vice chairmen. Sembler’s two other board members are Fuqua, who joined the company 17 years ago, and Craig Sher, the president and CEO, who joined in 1984.

Fuqua said the company began moving away from traditional shopping center development and toward the lifestyle center approach about a decade ago. It hasn’t always been an easy path.

Retailers such as Target and Publix hate to reinvent the retail wheel when it comes to opening stores. They are comfortable with their own formulas for success, which include expansive parking.

“This whole urban thing is new to a lot of retailers, and the concept of changing their prototypes and parking requirements is new,” said Witt, whose big current intown project is anchored by a Wal-Mart. “We can try to convince them that the loading and parking will work [at lower levels], but they aren’t going to sign until their own people are convinced.”

Projects in emerging areas such as Little Five Points also can be a tough sell, Fuqua said. Part of his job is to convince retailers they can make a profit on untraditional sites — and to encourage them to act before a competitor, such as Wal-Mart, moves in.

Fuqua has engaged in these efforts for several years in Atlanta. In the late 1990s, he persuaded Target to open a two-story store in Buckhead, and it became almost a tourist attraction because of its escalators.

At another intown development, a complex anchored by Home Depot on Ponce de Leon Avenue, Fuqua says store revenues have exceeded expectations to the point that he wishes he could renegotiate the long-term leases.

Convincing arguments

“We have to show retailers that they can do well in nontraditional centers,” Fuqua said. “They find that they can do big volumes [and] that they’re able to park and load and get their stores open. And it’s not easy to get stores open in this [economic] environment.”

Sembler can afford to plow ahead because its chief managers don’t have a board to answer to — they are the board. Fuqua said more than 90 percent of developments are funded with Sembler’s equity, and traditional bank loans fill any gaps.

Fuqua wouldn’t say where in metro Atlanta the company might turn for its next project. He said a few spots had caught his eye, but the scant detail he provided was that they might involve tearing down old structures.

If intown proves to be the next Sembler site, the company can be expected to continue encouraging retailers to buck conventional wisdom. And in doing so, the company will be following through on the mission statement of its founder.

“There’s one thing we must always remember about shopping centers,” Mel Sembler said.

“The only constant is change.”

by Anya Kamenetz
Bright Lights, Big Rent Check
You can work here, but don’t expect a decent place to live

Geoff Fellows, 32, couldn’t take it anymore. After five years, he was officially priced out of New York City. “I just looked at my situation—where would I be two years from now if I stayed in the city?” he said. “I’d most likely be living in the same small apartment, not making that much more money, still trying to pay off my credit cards, college loans. It was the right time to go.”

Geoff, who left this month for cheaper pastures in Atlanta, is no struggling slacker or recession casualty. He’s a success in advertising who made up to $90,000 a year in New York. But close to half of his take-home pay went to rent: $1,950 for a 450-square-foot apartment on the Lower East Side. In Atlanta, he is sharing a 2,700-square-foot three-bedroom with his girlfriend; the mortgage on the townhouse is about the same as his rent for the shoebox in Manhattan. If industry averages hold true, he can expect to make $10,000 less in Atlanta, but his Madison Avenue credentials go a long way down South. Geoff had interviews already lined up.

He’s not alone in recalculating the cost of New York living versus the value of New York opportunities. Nor is this the only market forcing that kind of choice. This year, Forbes magazine named New York City, along with San Francisco, Boston, and Philadelphia, one of the worst rental markets for singles, based on their ratio of job growth to rents. In the very places young people once flocked for opportunity, they now face a prohibitive cost of entry with an uncertain reward.

One 24-year-old found this out the hard way. “I moved to New York City to go to culinary school,” said Sara (not her real name). “I want to find a job in hotel catering sales or event planning, but entry-level positions in Manhattan pay about $25,000 a year. Obviously it is not possible to live in Manhattan on that salary.” Now Sara works as an advertising sales assistant at a television network. Her $33,500 salary somehow covers $900 in rent—for a third-floor walk-up, a one-bedroom railroad apartment in the far East Village. She walks through her roommate’s bedroom to get to her own. “I’m moving to Portland, where a two-bedroom in a really trendy area is $700,” Sara said. Her plan is to break into her chosen industry out there, where wages are only slightly lower, then return to New York at a higher salary. But she’ll have to contend with Oregon’s 6.9 percent unemployment rate, the second highest in the nation.

Devika Srivastava is another soon-to-be New Yorker facing the harsh reality of the housing market. The 25-year-old Houston native is moving here to complete her Ph.D. in counseling psychology at Fordham University. She said she loves New York for its “cultural diversity, the urban mentality of the city,” but she doesn’t love the hot competition for inferior apartments. “Oh my gosh!” she exclaimed. “Everything goes within a day. Some places don’t have doors, or the room that they’re showing is really a nook or a cranny. I looked at a place in Park Slope the size of a small closet, and they were asking $600 for it.” Devika will be surviving off loans, parental help, and a graduate assistantship; she expects to dedicate upwards of 60 percent of her income to rent, even if she manages to find a second job. She was looking in Jersey City, where her commute would have been around an hour. “I’m getting desperate at this point,” she said.

Although it doesn’t get much worse than New York, affordable housing for the middle class has become a serious concern nationwide. A study of the nation’s largest housing markets, released by the Center for Housing Policy in July, found incomes lagging dramatically behind housing prices. Formerly solid middle-class occupations like nursing, teaching, and law enforcement will no longer pay for a middle-class home, especially in the nation’s fastest-growing counties in the South. Ironically, many of the places people are headed for cheaper housing and increased opportunity are also characterized by lower wages. The median hourly wage in the New York metro area is $17.50; the mean annual salary for all occupations is $48,050. In the Atlanta metro area, wages and salaries are lower, $14.38 and $38,760; in Las Vegas, the fastest-growing metropolitan area in the 1990s, they are a dismal $12.82 an hour, $33,420 a year.

The same real estate bubble that has been such a boon to retiring baby boomers is bad news for younger workers. They are starting their working lives with fewer assets and more liabilities, in the form of student loan debts, than previous generations, and they are facing higher housing costs than ever. According to the Census Bureau, in 1991, 62 percent of U.S. residents between the ages of 25 and 34 could not afford to buy a modestly priced (below median price) home in the area where they lived. By 1995, the proportion had risen to 69 percent. In 2004, the home-ownership rate for those under 35 was just under 44 percent, compared to 69 percent for the population at large. The average age of a first-time home-buyer has climbed in the last decade from 30 to 33.

“Housing is very expensive,” said 31-year-old Sally, an accountant in Boston who asked that her real name not be used. “It’s usually half my monthly salary. I have to live in the city because I work for the city and that’s a requirement. I can’t even remotely start thinking of owning a home yet—I have too much debt right now. Maybe in two years.” Fran (not her real name), a 27-year-old college faculty assistant and single mother, is moving from northern Massachussetts to a smaller, more expensive space in Boston. She will pay more than 50 percent of her income in rent in order to cut down on her commute and be closer to child care. “I imagined owning a home at my age, but with the high prices it’s too hard,” she said. “Plus, now that I have a baby I can’t even afford to entertain such a dream.”

But owning a home, even in New York City, is not impossible for all young people—just extremely difficult. Maya, 27, and her husband became owners soon after they got engaged, about two years ago. “We both knew we were going to live in New York for a long time,” explained Maya (not her real name), “and we were done with throwing money away on rent.”

The resolute young couple cashed out their 401(k)’s and sank all their savings into a 550-square-foot one-bedroom on the Upper West Side. The co-op was a bargain at $200,000 with only a $400 monthly fee for maintenance, but it needed a new kitchen. They scrimped on the renovations, buying their own materials at Home Depot and living for eight months under a fine layer of dust. “It was the most frustrating thing in the whole world,” Maya said. “I seriously think it was harder than planning the wedding.”

Maya, a freelance photographer, works from home; her husband, a business manager, owns an office nearby. They are now on the right side of the market; their apartment has at least doubled in value, and with the brand-new kitchen, it could probably fetch even more. But Maya wouldn’t necessarily advise other twentysomething New Yorkers to follow in their footsteps. “I have a lot less space than my friends that rent. My neighbors are old farts who are grumpy or clinically insane. You also have to commit to a neighborhood and you can’t live in a very centralized location. And it is hard to muster together all the money that you have saved up for a down payment. Especially if you have other debts, that’s really tough.”