Another Look at Recycling Apartment Complexes

Fort Worth Star-Telegram

NORTH RICHLAND HILLS -- Apartment dwellers have been increasingly calling the city, concerned that their plastic bottles, magazines and soup cans are ending up in the trash instead of a recycling bin.

"I receive calls from apartment managers too, wanting to know what they can offer their residents because they're getting the same requests," said Debbie York, neighborhood services manager for North Richland Hills. "We really don't have anything for them."

It's a common and years-old refrain across Tarrant County, where few apartment complexes offer any kind of recycling. No one has been able to keep the cost and contamination low enough to make recycling possible for a significant number of North Texans.

But North Richland Hills apartments, which has offered curbside recycling for single-family homes since the early 1990s, is making another run at recycling on multifamily properties. The city has applied for $43,665 in grant money from the North Central Texas Council of Governments to start a pilot program at four apartment complexes.

City leaders will find out July 15 whether they can launch the program.

The complexes have not been chosen, but York said the city is leaning toward one with more than 800 units and three smaller ones. All told, she said, officials hope to try it with about 1,600 units, about 23 percent of the city's apartments.

"We've had people move here from other cities and states where they are able to recycle, and they are really appalled that they can't," York said. "We also have people who have lost their homes or haven't lived in apartments in years, and they're used to recycling. They want that same opportunity in apartments."

Recycling, in and of itself, doesn't provide much of a revenue stream. Prices for recycling have been quite low in recent years, and most cities consider it a victory to break even. But diverting all that material saves money by making a landfill last longer.

Apartment recycling has been a challenge for many cities and North Texas apartment buildings, said Perry Pillow, director of government affairs for the Apartment Association of Tarrant County, which represents the interests of the owners and managers of hundreds of complexes.

Many pilot programs have never advanced beyond that stage, and numerous studies have been commissioned, he said. He has worked for years with officials in Fort Worth and Arlington, but he said that contamination of recycling receptacles with regular trash makes it unworkable for complexes and haulers.

"Everybody wants to do it, and everybody knows we need to do it," Pillow said. "But it's been a hard nut to crack -- how do you get apartment residents to recycle? The challenge is contamination. You can't control what goes in."

In the vast majority of cases, Fort Worth apartment complexes contract with private companies to dispose of their garbage, so cities are left with only the power of encouragement.

Contamination isn't the only reason it isn't more widespread in North Texas, said Kim Mote, Fort Worth's assistant director for environmental management. He said cost is another major factor in the highly competitive apartment market. Offering on-site recycling would increase disposal costs for the complex, he said.

"We took a survey about five years ago to see what the climate was, and we found out that the managers did not want to add any costs and a majority of the residents did not want to pay more for rent to be able to recycle," Mote said.

York said educating residents will be a major part of the pilot program, provided that the council of governments approves the grant.

"There is a lot of continuous education because people move in and out of these Fort Worth apartments," she said. At the end of nine months, "We'll be giving the City Council a report -- how many Dumpsters were used, what was the contamination rate, how much was collected, what was the opinion of the apartment managers."

Relocating to Dallas: High Value Real Estate, High Quality Living

Stock Markets Review

 

People who decide to relocate to Dallas will be buying a home or renting a home in a major metropolitan area where real estate values have remained stable. Both the cost of living and the unemployment rate are well below the national averages.

** Major Population Center in North Texas **

With a population of 1,240,499 in 2009, Dallas ranks as the ninth largest city in the United States and the third largest in Texas. Although separated from neighboring Fort Worth by 32 miles, the two cities, forming the DFW Metroplex, comprise the 12th largest metro economy in the world with the fourth largest labor force in the United States.

Fort Worth has a population of 600,000 and is the 19th largest city in the nation and one of “America’s Most Livable Communities.” Whereas Fort Worth cherishes its western tradition and “Cow Town” image, Dallas fully embraces its role as a modern, 21st century, urban leader, proudly designated as one of the country’s “Most Ethnically Diverse Communities.”

** Diverse Population, Stable Economy, Strong Real Estate **

Together Dallas and Fort Worth apartments form one of most vibrant and compelling population centers in the United States. The area’s healthy economy is a significant draw for young professionals and families seeking to relocate to Dallas.

The cost of living index in the city is 7.06% lower than the rest of the nation (aided in part by the fact that Texas has no state income tax.) Dallas has grown at a rate of 3.73% since 2000 with a population of 50.4% males to 49.6% females. The median age is 30.5 years.

In May 2010, unemployment in Dallas stands at roughly 8% compared to the national average of around 10%. In recent years tech industries have made strong inroads in the metroplex. The city now has more than 233,000 tech workers, more than Austin and Houston combined, and is home to major companies including Research in Motion (the maker of BlackBerry smartphones), AT&T, Raytheon, and Lockheed Martin.

Real estate values in Dallas have weathered the recession well, remaining relatively stable with fewer of the wild price swings that have plagued other parts of the country. Currently median home prices stand at approximately $115,850, although they vary widely by neighborhoods within the city.

Anyone who is going to relocate to Dallas apartments should work with a knowledgeable real estate professional who can apprise them of all the implications of any location in the immediate city or surrounding suburbs. Dallas is a diverse urban area providing a wide variety of choices for anyone buying or renting a home.

** Education, Health Care, Culture, Access **

The region is especially strong in the terms of education and health care:

– The Dallas Independent School District serves more than 160,000 students.
– Overall, the DFW Metroplex is home to 17 two-year technical/trade colleges.
– There are 7 private colleges and universities, and six public four-year colleges and universities.

Fort Worth Fastest-Growing North Texas City in 2009

Star-Telegram

Bolstered by continued growth in the Alliance Corridor and in-fill housing completions in established areas like the Seventh Street district, Fort Worth was the fastest-growing city in North Texas last year.

But the lingering effects of the recession are still slowing down the regional housing market. The level of new single-family housing units and Fort Worth apartments was the lowest since 1989, according to figures released Thursday by the North Central Texas Council of Governments.

Fort Worth added 15,950 people for a total of 736,200, a sizeable step ahead of second-place Dallas, which added 10,000 people for a total of 1,316,350. Third on the list was Frisco at 6,250.

"The story is we are growing during a recession. It's very positive in this environment," said Tim Barbee, director of research and information services for the council.

For Fort Worth, "the story is the same as last year," when the city added 17,400 people, he said. "The growth has been surprisingly consistent, especially considering the downturn," Barbee said.

But the totals are slim compared with pre-recession numbers. In 2006, Fort Worth added 37,000 residents.

Tarrant County grew by 21,650 last year for a total of 1,829,400, an increase of 1.18 percent. At 2.87 percent, Crowley notched the fastest rate in the county, growing by 350 for a total of 12,550. By comparison, Arlington (370,650) was essentially flat, adding 200 people for a rate of 0.05 percent.

The 16-county North Texas region grew by 89,770 people to 6,729,400. In 2005, it was 6,075,000, up from 5,309,277 in 2000.

Among smaller cities in the region, Prosper in Collin County notched a one-year hike of 31.69 percent, adding 2,250 for a total of 9,350. In 1970, it had 501 residents. Roanoke in Denton County added 550 residents, an 8 percent increase to 7,500.

The council's population estimates are based on building permits, occupancy factors and household size factors.

For the first time in a decade, new single-family housing completions fell below 20,000, said Donna Coggeshall, research manager for the council. The region added 18,840 homes in 2009, compared with 27,300 in 2008. It's the lowest rate since 1989, when the region added 15,250 units, she said.

Despite the slowdown in new home construction, 2009 single-family occupancy rates were similar to 2008's, she said.

Fort Worth added 3,891 new single-family units and 3,452 multifamily completions.

"Compared to Dallas, Fort Worth still has room to grow," Coggeshall noted. "Most of that came in the Alliance Corridor, but there was also in-fill additions in areas like Seventh Street, where condos, town homes and apartments in Fort Worth were completed."

There was a small rebound in the number of new multifamily units (15,200) added to the regional housing stock, she said. In 2008, 13,400 multifamily units were completed.

"Multifamily developments that have been stalled by the economy are now being finished up in response to demand for rentals," she said. "Occupancy rates are up slightly this year."

Considering the economic climate across the country, Barbee said, North Texas is faring well.

"Other areas are flat or declining, and we're still growing. It has slowed down, but it is still happening. Compare that to places like Las Vegas," he said. "A lot of places would be happy to have these numbers."

By his own personal economic barometer, things appear to be looking up, Barbee said.

Two years ago, when the recession bared its teeth, the amount of traffic noticeably slowed on his commute to work at the council's office near Six Flags Over Texas in Arlington.

"In the past few months, it has picked back up," he said.

Dallas-Fort Worth Home Sales, Prices Rise

Ft. Worth Star-Telegram

After three months of declines, homes sales in North Texas were up 11 percent in March, according to the Texas A&M Real Estate Center.

Moreover, the median home price rose 6 percent, the largest increase in several months, the figures show.

Locally, Kennedale and central area Fort Worth apartments saw big sales increases of 100 percent and 107 percent, respectively. Those cities were followed closely by Euless, Hurst and Trophy Club/Westlake, all with sales increases of more than 50 percent.

Texas A&M compiles numbers from a 24-county North Texas region for its report.

In March, 6,036 homes were sold in the region. Sales last increased in November, when they jumped 31 percent on the strength of a surge of people returning to the market to take advantage of low interest rates as well as the first-time homebuyer tax credit. Sales numbers then fell in December, January and February.

The median sales price in March was $144,900, a 6 percent increase from a year ago. Median sales prices had only been increasing about 1 percent for the past few months.

Year-to-date, 13,466 homes have sold in the region, a 1 percent increase from the same period a year ago.

April sales numbers are also expected to be high as the second round of the tax credit expires at month’s end.

Ross Perot Jr. Selected to Real Estate Hall of Fame

The Dallas News

Dallas businessman Ross Perot Jr. and real estate investor James Sowell are getting top honors from the North Texas commercial property industry.

Perot and Sowell next month will be inducted into the North Texas Commercial Real Estate Hall of Fame.

The award is sponsored by the North Texas Commercial Association of Realtors and Real Estate Professionals and will be presented on May 13 in Dallas.

Perot’s Hillwood companies have developed landmark North Texas real estate projects including the Alliance apartments in Fort Worth and Dallas’ Victory Park development.

Sowell’s investment firm, Sowell and Co., has built residential communities such as Dallas apartments and in other Texas markets.

The new hall of fame members will join a group that includes the likes of Trammell Crow, Henry S. Miller Jr. and Roger Staubach. More than 70 past and present real estate players have been honored with this industry accolade.

Along with the awards to Perot and Sowell, a lifetime achievement award will be given to Dallas brothers Jerry and John Bradley, who’ve worked as commercial real estate agents here since 1970. 

Gables Residential Sells Dallas Apartments to California Investor

Dallas News

A California real estate investor has made its first push into the North Texas apartment market.

CIM Group's purchase includes two properties in the popular West Village neighborhood in Dallas' Uptown district: the 103-unit 3636 McKinney apartments and the 75-unit West Village apartments, at 3839 McKinney Ave. CIM also purchased the 334-unit Knoxbridge apartments, near the corner of Knox and Travis streets.

The investor, which specializes in urban-style real estate projects, bought the rental units from Gables Residential, which owns or manages more than two dozen apartment communities in the Dallas-Fort Worth apartments area.

The West Village properties were built in 2005 and are on top of retail space. Terms of the transaction were not disclosed, but the units are valued for taxes at almost $22 million.

The Knoxbridge, constructed in 1993 and 1995 at 4649 Cole, is listed on the tax rolls at more than $27 million.

As part of the deal, CIM also bought a Gables project in Houston apartments.

Gables will continue to manage all the Texas properties, which total 820 units.

Gables senior vice president Doug Chesnut said the developer decided to sell the properties because it was "overweighted" with Dallas-area apartments and had more in the works.

"We took the opportunity to move assets," Chesnut said.

CIM said in a statement that the apartments it bought are all in "districts positioned for economic expansion."

The investor also owns a mixed-use development called Penn Field in Austin.

CIM is a real estate fund manager that makes both private equity and debt investments in urban communities across North America. It has offices in Los Angeles, Oakland, Calif., and Bethesda, Md.

The Gables Dallas apartments sale is the second recent transaction involving high-end North Texas rental properties.

In December, Nebraska-based Slosburg Cos. purchased the five-story Delante Las Colinas apartments.

Forecasters Improving at Tornado Prognostication

Fort Worth Star-Telegram

For all their fury, thunderstorms are fragile things, dependent on a delicate balance of wind, water and heat.

Too much wind at a certain altitude can scatter storm clouds before they form. A storm's own rain can smother the columns of rising air that give the storm its strength.

Even rarer are storms that spin off a tornado. And it's rarer still for a tornado to hit a populated area and kill people.

It's happened only once in Fort Worth -- a decade ago. The storm killed two people, ripped houses from their foundations and pummeled several downtown high-rises.

The chance to spot a tornado -- and sound the warning early enough to save lives -- has spawned a corps of volunteer storm chasers who work with the National Weather Service every spring. And they're getting better at what they do.

Advances in radar and computer mapping have helped forecasters get a better idea of how severe storms work. For instance, forecasters originally thought that the storm that struck Fort Worth on March 28, 2000, was going to hit close to North Loop 820. They quickly adjusted their warning, Fox said. But today, the weather service would have a more accurate picture of the storm before it spawned a tornado.

Still, the weather service relied on a corps of more than 3,000 volunteer storm spotters.

"Even with all those technological advances, the electronic tools still don't show us all that's going on with a storm," said Gary Woodall, chief of the weather service's Phoenix bureau.

The idea of using volunteers started in Dallas-Fort Worth, the biggest metropolitan area in Tornado Alley, which stretches from Texas to Iowa, said Martin Lisius, chairman of the Texas Severe Storm Association and a storm tracker since 1987. During a typical storm, 20 to 40 volunteers take to the streets, communicating with ham radios. They provide crucial on-the-ground information to the weather service.

"You don't see them; they're sort of like unsung heroes, but they're out there," Lisius said.

About 450 storm spotters, Red Cross volunteers, students and other enthusiasts attended a storm association conference Saturday in Colleyville.

Most of the conference dealt with technical issues: wind shear, cold pools, rear flank downdrafts.

What most worries the spotters is the theoretical big one -- a severe tornado hitting a populated area.

Three years ago, an F-5 tornado, the top category on the Fujita scale, struck Greensburg, Kan., laying waste to 99.8 square miles. Eleven people were killed and more than 60 injured. By comparison, the 2000 Fort Worth twister had a footprint of 0.5 square mile.

But Greensburg is a small town. If the same storm struck, say, the Arlington entertainment district on a busy night, it could be devastating. Scott Rae, a planner with the North Central Texas Council of Governments, overlaid a map of the Metroplex on maps of the Greensburg storm to estimate that such a storm would affect 265,000 people in 111,000 Fort Worth apartments and houses.

Lisius projects that if it hit on a Friday night in April -- with crowds arriving for Good Friday church services and a Texas Rangers game -- hundreds or thousands of people could die. The roads would be too jammed for people to escape, and things would only get worse if drivers tried to take shelter under freeway overpasses, which is common during storms.

"A lot of them are not going to be able to get out of the path of the storm," Lisius said.

The upside is that the warning system is getting better. In 1986, 30 to 40 percent of the weather service's tornado warnings had no lead time, said Mark Fox, the warning coordination meteorologist at the service's Fort Worth office. By 2009, 80 percent of the warnings had lead time -- usually 10 to 12 minutes.

"Our average last year was about 12 minutes," he said.

Fox says the lead time could eventually reach 30 minutes. At that point, he said, the problem would become one of education: "Making sure people know what to do and making sure they believe the warning when they hear it."

Census Undercount Could Cost Texas Money, Political Clout

Fort Worth Star-Telegram

Think of it as the equivalent of tabulating Texas and forgetting Arlington.

An estimated 373,567 people in Texas were uncounted in the 2000 Census, second only to the 522,796 that were missed in California.

The undercount cost Texas about $1 billion in lost federal funds, according to a PriceWaterhouseCooper report on the census. Fort Worth, where the undercount was pegged at 24,661, lost $62.3 million in federal funds, the report said.

As the U.S. Census begins mailing its national questionnaire this week, it pays to be counted because power and money are at stake, says Gabriel Sanchez, regional census director for Texas, Louisiana and Mississippi.

The once-a-decade head count determines congressional reapportionment, and State Demographer Karl Eschbach believes that Texas, which has been the big gainer in U.S. population in recent years, will be the overall winner in added political clout. He predicts that Texas will add four seats in the U.S. House.

A new report illustrates the fiscal power of the count.

In 2008, $447 billion in federal funds were distributed based on the 2000 Census and later updates, according to the Brookings Institute, a nonprofit that examines U.S. public policy.

A Brookings study shows that 80 percent of the money tied to the census goes to state governments, many of which, like Texas, are struggling with budget shortfalls, said Andrew Reamer, who wrote the report.

In Texas, Reamer said, nearly $1,000 in Medicaid funds will be returned to the state for every person counted. "The key point here is that census participation means more money locally," he said.

Hard to count

Multiple factors make Fort Worth and Texas tough to tally, Sanchez said.

"Obviously, you have a lot of Hispanics and a lot of recently arrived immigrants. There has also been a lot of growth, and those people aren't as tied to the community as a family that has been here 25 years. You also have a lot of young children," who, historically, have been missed more often than people in any other age group, Sanchez said. "People forget about the baby."

The state also has 80 percent of the U.S.-Mexico border, which presents a different set of problems, he said.

"You have a lot of interaction back and forth across the border. And how those border communities feel about the federal government and how they interact with it -- they have to be approached in a different way," Sanchez said. "There are also large number of immigrants from Mexico that aren't as integrated as one would hope, and that leads to language barriers and cultural barriers."Another factor is Hurricanes Katrina, Rita and Ike, which destroyed vast tracts of housing in Texas and Louisiana, Sanchez said.

"We send forms to housing units and Fort Worth apartments, and if they've been destroyed we have problems. You might have one address with three trailers parked in the back," he said. "So we're hand-delivering questionnaires in the areas that have been hit by hurricanes."

Not to be discounted is the "true Texas independent spirit, which makes it a great place to live but a hard place to try to get a form back from everybody," Sanchez said.

Dallas Housing Stimulus Effort Slow to Spend $25 Million

Dallas News

North Texas received more than $25 million in federal stimulus funds last fall to move homeless people into Dallas and Fort Worth apartments and prevent others from losing their homes because of the tough economy.

But so far, only a fraction of the Homelessness Prevention and Rapid Re-Housing Program money – about $2 million – has been spent, according to the U.S. Department of Housing and Urban Development, which oversees the program. The amount may be slightly higher because of a lag time for reporting the expenditures to the federal government.

The program was designed to provide temporary relief to people who need help with rent or utilities because of circumstances such as job losses or medical crises.

Things are off to a slow start.

Many applicants have been waiting for weeks just to get an appointment to apply for the help. And some agencies distributing the assistance say they have been overwhelmed with requests and do not have enough staff to keep up with the demand and extensive documentation.

In Dallas, where applicants have complained about long waits, the city is evaluating whether more staffing is needed.

Three charities withdrew from the program because they said they did not have adequate staff to carry out its requirements, said Bernadette Mitchell, assistant director of the city of Dallas' housing and community services. She said others are reporting problems with the online system they're supposed to use to enter client data.

"The city of Dallas is very concerned and we are evaluating the need for more staff persons to address this particular issue," she said in an e-mail. She said the city has contacted agencies that applicants have complained about for not responding to phone calls.

"The volume of people trying to access the service is overwhelming the system," she said. "Only a certain number of people can be fully interviewed for assistance and provided other needed referrals per day."

Other officials worry that many of those eligible – especially those who have never used social services before – don't even know about the assistance, which has mainly been publicized by fliers, posters and word of mouth.

"There's a lot of money in Dallas that people don't know they could access," said Paige Flink, executive director of The Family Place, which helps family violence victims. She said The Family Place received $1.3 million in stimulus funds and has distributed more than $150,000.

The meeting

A Feb. 16 meeting highlighted the lack of awareness about the program.

Only four people attended the public meeting at Dallas City Hall to learn how to apply for the funds. All were homeless and had seen fliers or heard about the event from a friend.

But they learned that the help would not come fast: They were told it would take up to a month just to get an appointment to apply for the aid, and as many as four months to move into an apartment.

London Brooks, one of the attendees, left frustrated. He said he was in a hurry to get out of a shelter after sleeping on the floor because there weren't enough cots.

"I'm trying to get out of that place as quick and fast as I can," said Brooks, whose unemployment benefits recently ran out.

Brooks called several agencies before finally getting an appointment with the Urban League of Greater Dallas' office in Garland last week. He said he was told that he could not qualify for the assistance without some type of income. Brooks, who attends school to train for an electronics career, said he's looking for a job so he can qualify.

Shirley Walker, the Urban League's senior vice president for community services, said the program aims to make sure recipients can sustain themselves after the temporary help runs out.

"Otherwise, what have we done for him?" Walker said. "We've caused him to fail and we've also put a blemish on his credit and he won't be able to get housing once he does meet those other requirements. It's like a double-whammy."

Walker said her agency is short-staffed.

"I want to assure you, I know all of the people in this community care and are trying the best they possibly can with the constraints they have," she said. "If our clients just give us a chance, we'll work to the best of our ability to serve them."

Yvette Jackson, another person at the City Hall meeting, also said she wants to move out of a Dallas shelter as soon as possible. More than a week after the meeting, Jackson still had no appointment. She said the agencies on a list did not call her back or did not allow her to leave a message.

"Living in a shelter is something I'm not used to," said Jackson, who came to Dallas 10 months ago after losing her job.

She eventually found housing through another program not tied to the stimulus money.

'As expeditiously as possible'

The American Recovery and Reinvestment Act of 2009 provided $1.5 billion nationwide. The program can pay rent and utilities, but not mortgages, for people who meet very specific criteria.

HUD announced the rapid rehousing program in February 2009, but people could not apply for the aid in many local cities until late last year or January.

During that time, the federal government entered contracts with state and local governmental agencies and provided training so they could distribute the funds in North Texas. Some of those agencies solicited nonprofits, like The Family Place or the Urban League, to help disburse the funds, which go directly to landlords or utility companies.

Agencies found the process was not as simple as handing out money.

They need extensive documentation – such as financial records and Social Security cards – that some applicants have had trouble getting together. They also need to make sure the Texas apartments people rent charge fair market rents, have been inspected and accept the federal payments. Some clients have been rejected because of bad credit records or felonies.

The city of Dallas received nearly $8 million, which it is sharing with several nonprofits. So far, about $333,000 of that has been spent, according to HUD. But the actual amount is at least $100,000 higher because of a lag time from when the city submits expenses to HUD for reimbursement, Mitchell said.

Governmental agencies and charities have three years to spend the funds, said HUD spokeswoman Patricia Campbell. She said that Dallas officials initially faced delays executing contracts with charities but that they expect a dramatic increase in the money given out now.

"We certainly are encouraging all grantees to spend the money as expeditiously as possible," she said.

Despite possible hurdles, the money is helping many families keep a roof over their heads.

In Plano, officials have distributed more than $35,000 since Jan. 1, according to HUD. The city received $509,050.

Garland, which received $304,952, has helped at least eight families and sent 20 more to search for North Texas apartments, said Tiffinay Slade-McClinton of the city's housing agency. So far, the city has spent $3,467, according to HUD.

Chelsea White, development director of the Housing Crisis Center in Dallas, said her agency has $184,877 to distribute – and is seeing a lot of people at the brink.

"There are households that, without this money, would probably be homeless," she said.

AT A GLANCE: HOUSING HELP

Across North Texas, agencies received more than $25 million through the federal stimulus package to move homeless people into Dallas apartments and prevent others from losing their homes because of the economic downturn.

The Homelessness Prevention and Rapid Re-Housing Program is designed for people who only need temporary assistance to get back on their feet. It is not for the chronically homeless, who have disabilities and need long-term help.

The money can only be used for people who:

•Are homeless or would become homeless without the assistance.

•Have no other housing options and lack resources to obtain or remain in housing.

•Earn less than 50 percent of the area's median income of $23,650 for an individual or $33,800 for a family of four.

Applicants can call 2-1-1, a help line for social services, to be directed to the nearest agencies that offer the assistance. Applicants must have a consultation at the agency to determine the appropriate level of assistance. Documentation will be required to verify income and housing status.

Missed Payment Rate Jumps on Dallas-Area Commercial Property

The Dallas News

An increasing number of Dallas-area commercial properties are falling behind in their mortgage payments.

At the end of last month, the missed payment rate for Dallas-area buildings with securitized mortgages was more than 33 percent higher than the national average, according to a new report by Trepp LLC.

The New York-based analyst tracks thousands of commercial properties across the country that are financed with securitized mortgages.

More than 9 percent of Dallas-area commercial properties with securitized debt were behind in payments at the end of February, according to Trepp's report, released Wednesday. The national delinquency rate was 6.72 percent.

The Dallas-area late loan rate has increased almost 200 percent from a year ago, said Paul Mancuso, vice president of Trepp, which provides real estate data and analytics.

"Although elevated, the [Dallas] region is well below the double-digit delinquency rates experienced in troubled states such as Arizona, Nevada, Florida and Michigan," he said.

Almost 160 Dallas-area commercial and investment properties are on the list of troubled real estate deals. The debt on these properties adds up to about $1.28 billion.

Among the largest real estate deals cited in the report is the Four Seasons Resort and Club in Las Colinas, which has been posted for foreclosure.

"Excluding the delinquent $175 million loan to the Four Seasons Resort and Club, the current delinquency rate would decrease significantly to 7.9 percent," Mancuso said.

Downtown Dallas' Harwood Center office tower and the Village on the Parkway shopping center in Addison are also on Trepp's watch list.

The Dallas apartments sector with the highest mortgage delinquency rate is hotels. Almost 17 percent of securitized hotel loans here were behind in payments at the end of February. The office building delinquency rate was just over 12 percent.

Loan data from properties with securitized debt provides an important window into the health of the commercial real estate sector.

Trepp said the nationwide increase in late loans in February was 23 basis points,. It was the smallest increase in six months, but late loans are still at an all-time high.

In 2009, the number of commercial properties posted for foreclosure such as Dallas-Fort Worth  apartments area jumped almost 27 percent.

Transitional Apartments Offer Help to Homeless Veterans

Fort Worth Business Press

The finishing touches are all in place at Liberty House: the walls are painted, the carpet is in, the beds are turned down and the staff is ready to welcome home the first residents in a new transitional housing program for homeless veterans in Tarrant County.

Liberty House, a partnership between Mental Health Mental Retardation of Tarrant County (MHMRTC) and the United States Veterans Administration (VA), could begin accepting residents by March 1, once final approval is received from the government.

Located at 1501 E. El Paso St. adjacent to MHMRTC on the city’s near east side, Liberty House is part of Mayor Mike Moncrief’s 10-year plan to end homelessness in Fort Worth. The program also is an answer to a crucial need for residential, substance abuse and family supportive services for homeless vets in the community, according to Nikki Hatley, executive director of MHMR Visions. Founded in 2001, Visions is the charitable arm of MHMRTC and helps mobilize local resources and volunteers to bridge the gap in services the agency provides.

“There are almost 16,000 homeless veterans in Texas,” Hatley said, “and 920 of them are here in Tarrant County.”

The Department of Veterans Affairs provides funding for only 233 beds statewide. Liberty House will provide 30 beds for vets, who will stay about six months on average, but can stay up to a maximum of two years, Hatley said.

The need for more transitional housing for homeless vets is sobering, said John Goodrich, senior vice president of Worthington National Bank in Fort Worth. Goodrich is a veteran and a member of the advisory board for Liberty House.

According to the National Survey of Homeless Assistance Providers and Clients, 23 percent of all homeless people in America are veterans, and 89 percent of those were honorably discharged.

“They served their time and now they’re homeless,” Goodrich said. “The idea of Liberty House is to get them to reconnect back to the community and their families.”

Liberty House Transitional Housing Program differs slightly from MHMRTC’s other adult residential treatment programs, which include the 50-bed Pine Street rehabilitation facility and the 12-bed Billy Gregory Detoxification unit. There also is the Directions Home case management program provided by the city of Fort Worth and the veterans’ transitional housing program at the nonprofit Presbyterian Night Shelter, located next door to Liberty House.

The focus of the new program will be on addiction and sobriety, said Deirdre Browne, Liberty House program manager. Liberty House will give homeless veterans with chemical dependency, as well post traumatic stress disorder and other combat-related diagnoses, full access to all programs at MHMRTC. The program, expected to serve about 55-75 men and women each year, will offer vets supportive services leading them to recovery, residential stability, independence, employment and reintegration into the community.

“We’d like to provide more enriched services for the people who are here than the VA can provide,” Hatley said. “Our emphasis will be on getting them clean and sober and then helping them find a job and permanent housing. We’ll help give them opportunities to go to college and provide them other resources that will help them return to the community.”

Construction on the two-story, 7,500-square-foot veterans’ facility of Fort Worth apartments began in August 2009 after MHMRTC’s Addiction Services Division received a capital grant award from the VA totaling $600,000. The local agency was the only MHMR organization in Texas to receive the grant last year, Hatley said. Addiction Services matched the VA grant with an additional $300,000 to cover bricks and mortar construction costs that renovated and expanded an existing building into the transitional housing center.

The Architects Barnes/Associates Inc. of Fort Worth was the project architect. General contractor was Fort Worth-based RJM Contractors Inc.

Clients will live in a dormitory style atmosphere, two people to a room. Amenities include a kitchenette, a larger kitchen and dining room currently shared with clients of Presbyterian Night Shelter, a laundry room, separate showers for men and women and a courtyard. VA offices will be located upstairs.

Future plans call for a library and a computer room to facilitate employment preparation, a workout room and a clothes pantry stocked with donated business attire for the veterans’ job interviews.

“This will give opportunities for volunteers to come in and help the veterans develop resumes, coach for job interviews, teach them how to dress for interviews and help them with up-to-date computer skills,” Hatley said.

Because the VA capital grant did not provide for furnishings, Visions launched a fund-raising effort to furnish the interior spaces and make necessary renovations. All the bedrooms are complete, with several rooms sponsored by local businesses and individuals. Sofas, chairs, tables, a big screen TV and a piano have been donated. A quilting group from Richland Hills Church of Christ donated 30 handmade quilts for the beds. Lending some added decoration and a touch of home will be Fort Worth artist Nancy Lamb, who will paint panels of veterans through the ages. The paintings will be available for sponsorships, Hatley said.

Hatley estimates about $31,000 is needed to finish the kitchen renovation and purchase new appliances and utensils. The Fort Worth Airpower Foundation recently presented Liberty House with a check for $15,000 toward the kitchen makeover.

A grand opening and flag-raising ceremony is planned for Liberty House in late March, when the first homeless veterans are expected to have filled the housing unit. The Veterans Administration will determine the eligibility of individuals who apply for residency.

“These are the vets who are chronically homeless. When they come off the streets they need the time to adjust and become sober. They need to lose the bad habits they picked up on the streets,” Browne said. “Our goal is to create supportive good habits that will help them be successful.”

Drop in Construction Could Lead to Apartment Shortage

The Dallas News

A dramatic decline in U.S. apartment construction could lead to a shortage of rental housing in the years ahead.

This year, developers are expected to start about 87,000 units – less than a third of what they build on average each year. And the outlook for 2011 isn't much better.

"We will be facing a severe shortage of apartments in the next few years, which will increase the cost of housing for consumers," Sharon Dworkin Bell, senior staff vice president of the National Association of Home Builders, said at this week's convention in Las Vegas. "We believe we should have 300,000 starts every year to have a stable market."

That's not likely in the foreseeable future.

"We have a combination of limited supply coming on and increased demand when the economy recovers," Bell said.

Michael Costa, a partner in McFarlane Costa Housing Partners of California, said, "We know that the demand for housing – especially rental housing – is going to be there. Each month we are not able to get our starts going, we fall further and further behind."

At some point, a lack of rental units will take a bite out of consumers' pocketbooks. "We are predicting now we may see upwards of double-digit rent increases," Costa said.

His firm, which typically starts up to 35 rental communities nationwide each year, has just four projects in the works.

The slowdown has been even sharper for developer Jerry Durkin, whose Wood Partners builds rental units across the country, including several recent projects in the Dallas area.

In 2006, Atlanta-based Wood Partners started about 6,500 units.

"We closed one start in 2009 – a 150-unit deal," Durkin said. "I don't know how 2011 ramps up unless capital frees up."

Over the last couple of years, the Dallas-Fort Worth area has been one of the country's top rental housing construction markets. But startups of new Texas apartments have virtually stopped.

More than 11,000 Houston and Austin apartments were under construction in North Texas at the start of 2010, however, and there are lots of new units on the market, so rents have been falling and vacancies increasing.

The same is true in other U.S. markets, which makes apartment analyst Greg Willett of MPF Research skeptical about a shortage.

"To get back to an essentially full occupancy rate of about 95 percent, we've got to absorb about 600,000 apartments nationally and about 30,000 Dallas-Fort Worth apartments," Willett said.

"The builders are overestimating the number of kids in the basement" who will move out of their parents' homes when the economy rebounds, he said.

Dr. James Gaines of the Real Estate Center at Texas A&M University also says a shortage is a ways off.

"An offsetting factor is the number of foreclosures and other distressed properties being bought by investors and turning into rentals," he said.

Dallas apartments analyst Ron Witten predicts apartment markets around the country could be full by 2012, but that doesn't mean building would start right away.

"Developers have to find and entitle sites, then begin construction," he said. "It could easily be 2014 and possibly later before a meaningful number of new apartments are available for residents."

Apartment Vacancies At Highest Levels In 20 Years

Dallas News

Apartment vacancies in Dallas-Fort Worth have grown to the highest level in more than 20 years thanks to a combination of overbuilding and the recession.

At the end of 2009, about 11 percent of local rental units were empty. Occupancy fell by a full percentage point in the fourth quarter as several large apartment communities opened their doors, adding to inventory.

“While those numbers are bad, they actually look better than we’d anticipated a few months ago,” Greg Willett, vice president of research with MPF Research said in the firm’s report released Monday. “Several of the properties that were finished right at the end of 2009 report initial lease-up moving along pretty well, so North Texas sidestepped the seasonal net move-outs that are routine during the last few months of the year.”

D-FW renters leased an additional 1,520 apartments in the final months of 2009. But at the same time, developers were opening the doors for 7,895 new units.

“That’s the biggest quarterly block of new supply seen since savings and loan associations fueled a frenzy of overbuilding during the early and mid-1980s,” Willett said.

More new apartments were added in North Texas in 2009 than in any market in the country - 18,029 units.

Last year the sagging economy reduced demand for Fort Worth apartments.

“Job loss weakened the apartment figures seen early in the year,” Willett said.

For all of 2009, net apartment leasing was down by 890 units from 2008, MPF reports.

Overall rents in the area dropped by 2.6 percent last year to an average of $748 a month.

With the credit crunch and recessions, apartment development in D-FW and across the country has slammed to a halt.

Willett said that developers began only a handful of new projects here in the second half of 2009.

But more than 11,000 Dallas apartments remain under construction.

“Texas will be one of the last markets across the country to wrap up its construction cycle” Willett said. “Thus, despite the comparatively positive outlook foreseen for the local economy, Dallas-Fort Worth seems apt to trail the apartment market recovery anticipated elsewhere.

“It’s certainly possible that occupancy has essentially bottomed out now, but it’s going to be a while before the leasing environment is healthy enough for rents to move up again.” 

Dallas-Fort Worth Foreclosures Jumped In 2009

The Dallas News

Commercial property foreclosure filings in the Dallas-Fort Worth area jumped by more than a quarter in 2009.

But foreclosures of commercial real estate still account for less than 5 percent of total filings in the four-county area.

During 2009, lenders posted 2,431 commercial properties for forced sale, including offices, warehouses, shopping centers and land, according to a report released Monday by Foreclosure Listing Service. That's up from just over 1,900 commercial foreclosure postings in 2008, the Addison-based research firm found.

"In 2009, foreclosure postings of commercial real estate climbed at a slightly steeper pace than residential postings," Foreclosure Listing Service CEO George Roddy said in the report, "although there have been many more postings of homes than of commercial properties."

More than 61,000 D-FW area home foreclosure filings were recorded this year – an all-time high.

Commercial mortgage defaults here are still significantly lower than in the last big real estate market shakeout in the late 1980s and early 1990s.

"It's probably about 20 percent of what it was in the peak year of 1989, when we had more than 7,000 postings," Roddy said. "We are not close to that at this point."

But the numbers in the current cycle are definitely climbing.

"We have begun to see the economy's impact on the commercial sector in 2009," Roddy said. "And I expect postings of commercial properties to remain at this level or even higher throughout 2010."

The biggest rise in commercial foreclosure filings in 2009 was in postings for office buildings, which were up 121 percent, and retail buildings, up 90 percent.

Foreclosure filings for commercial land increased 71 percent compared with 2008.

Dallas and Fort Worth apartments were near the top of the list of commercial building foreclosure postings with more than 400 property filings.

The largest increase in commercial foreclosure filings was in Denton County, where postings more than doubled. Tarrant County saw a 2 percent decline in commercial foreclosure postings.

Not all properties posted for foreclosure auction are actually sold by the lender.

In many cases, the borrower works out new mortgage terms or the transaction is delayed by negotiations or bankruptcy.

Dallas-Fort Worth Housing Poised For A Rebound

Dallas News

After slogging through two years of decline, the North Texas housing market is headed for a rebound in 2010. The only question, analysts say, is how strong the bounce-back will be. And that depends on the economy, of course."Any sustained turnaround in sales and construction activity will definitely depend on the economy and job growth," said D'Ann Petersen, a business economist at the Federal Reserve Bank of Dallas. "We do see increasing signs that the local economy has bottomed out, and business contacts say they are through cutting staff."

Petersen said there are signals that the worst is over for the Dallas-Fort Worth housing market. Next year will look better for builders and buyers.

"It will be slow going in 2010, but I do think that Dallas' housing market is in a better position than many other areas of the country to respond to positive economic growth," she said.

During the last two months, sales of pre-owned homes have increased significantly from year-ago numbers, and price declines have slowed. At the same time, the number of homes for sale in North Texas has fallen to the lowest level in more than two years.

Given the demand from homebuyers, builders will have to start more houses in 2010, said David Brown, an analyst with Metrostudy Inc.

"There now is currently less than a six-month supply of homes priced under $250,000 and just over a six-month supply of homes priced between $250,000 and $500,000," Brown said.

"If homebuilders are not able to start as many homes as they are closing because of lending constraints, then some of those buyers may be forced into the resale market and could cause new home closings to fall further next year."

Builders started only about 13,000 homes this year in North Texas – the smallest production volume in almost two decades.

"The current annual rate of about 13,200 starts should prove to be pretty close to the bottom," said Ted Wilson of housing research firm Residential Strategies Inc. "Interestingly, several builders have suggested that the bottom would have been closer to 11,000 starts – similar to the 1990 bottom – had we not had the $8,000 first-time buyer tax credit."

Wilson is projecting about 15,000 home starts in the D-FW area next year.

"If job growth picks up sooner rather than later, starts could push as high as 17,000, but we are still feeling conservative about the market," he said.

Tight lending

With many small builders cut off from construction loans, Wilson said that large public companies with better access to capital could have an edge in 2010.

"I wouldn't be surprised to see some of the larger builders flex their muscles with regard to access to interim financing and pick up market share in 2010," he said.

In the pre-owned home market, the number of properties listed for sale fell below the six-month supply point in November. That's considered a balanced sales market.

Price outlook

The decline in existing home prices in North Texas has all but stopped. Median home prices have actually inched up from their bottom in February.

National analysts agree that Texas – which for the most part didn't experience the last housing bubble – is poised to see home sector gains in the year ahead.

"We expect the Texas economy to perform better than the national average over the next year," said David Berson, top economist with mortgage insurance company PMI Group. "And because the bubble was less in Texas than in most other states, that's positive for house prices in the state."

"Price gains may be somewhat less in Dallas apartments than some other parts of the state," Berson said. "But [they're] still likely to be at least equal to the national average and probably somewhat better.

Analyst Stephen Bedikian of housing consultant Real IQ is expecting an uptick in the market next spring.

"By March, we're likely to see volume increase and prices firming," he said. "That trend will continue throughout the summer, and then we will return to a market that treads water for the balance of the year.

"I would expect people to be surprised by strength of housing prices between the March and August period."

But foreclosures are unlikely to ease in 2010.

Dallas-Fort Worth apartments and housing foreclosure postings set a record at more than 61,000 filings in 2009 and could be up again in 2010, analysts warn.

"I expect foreclosures next year to be a tad above this year – they are not going down," said George Roddy, president of Foreclosure Listing Service, which tracks local filings.

Roddy said that even when the economy rebounds in North Texas, the foreclosure market will lag. "It takes time after the job market comes back to help people who have been trying to hang on to their house."

Housing Dilemma: Low-Wage Workers Face A Struggle

Fort Worth Business Press

While Fort Worth’s cost of living is lower than many similarly-sized cities in the United States, making ends meet is still a struggle for those living on a minimum-wage income.

With average rental rates hovering around $800 for a two bedroom apartment in Tarrant County, the National Low Income Housing Coalition estimates that a person looking to afford fair market rent in Fort Worth, while spending 30 percent of their income on housing, must make more than twice the minimum wage, or almost $32,000 per year before taxes.

A full-time worker with consistent 40 hour work weeks earning the minimum wage in Texas, $7.25 per hour, would bring in a yearly income of about $15,000. A single person making less than $10,800 per year is considered below the federal poverty guideline, according to the U.S. Census Bureau, and a household with two people – such as a single parent with one child – making less than $14,500 is considered below the poverty guideline as well.

“For folks at that [minimum wage] level, their life is one of extreme uncertainty,” said Danilo Pelletiere, research director for the National Low Income Housing Coalition. “If you are housed and earning that kind of money, the housing portion of your budget is going to be 50, 60, even sometimes 70 percent of your income. Now, again, most folks aren’t earning a consistent income, they’re earning an hourly wage, which can fluctuate with seasons such as the [holiday] retail season. Sometimes things are fine and you’re paying your rent fine, and sometimes they’re not.”

North Texas apartment statistics

Fair market rent in the Fort Worth and Arlington areas average around $650 for an efficiency apartment, $700 for a one bedroom, $800 for a two bedroom, and more than $1,000 for a three bedroom, according to data from a number of organizations.

Occupancy and rental rates, or the price per square foot, for apartments in Tarrant County rose from late 2007 through late 2008, but have dropped since, and are continuing to fall through the last quarter of 2009.

Rental rates have taken a steep downward turn in the last few months in Tarrant County, said Leah Christian, Apartment Data Services’ Dallas regional manager. The 12 month rental rate trend for the area is -1.5 percent, and the area’s three month rental growth trend is showing a sharper decline at -5.3 percent, she said.

And while rental rates are dropping, finding housing at a cost that will stay within 30 percent of yearly income for a person making minimum wage is nearly impossible, Pelletiere said. In order to follow the 30 percent rule, a person on minimum wage would have to find an apartment with rent under $375 per month.

Fort Worth’s affordability and new affordable housing efforts

“Compared to other parts of the country, [Fort Worth] is absolutely affordable,” said Fort Worth City Council Member Sal Espino, who represents District 2.

Compound the cost of living with stagnant and sometimes declining wages, and residents experience a tight squeeze, Espino said, adding that the city is planning programs to work on Fort Worth’s housing issues once the economy recovers.

A few years ago, Mayor Mike Moncrief put together a Quality Affordable Housing Task Force to look into the city’s housing issues, and the group found that Fort Worth has an affordable housing need of $1.8 billion, Espino said.

“That’s how much is needed to rehabilitate and build existing housing that would stay within 30 percent of annual median income, and infill housing,” he said. “What we’re doing now is, the city owns a lot of tax foreclosed properties, and we’re trying to target areas in the city, in individual council districts, where we could get some tax credits to build housing that is affordable.”

Espino added that any efforts on renovating the foreclosed properties would have to wait until the city’s budget is stronger and the economy is moving forward.

Life on the minimum wage

Workers who earn minimum wage incomes are often moving, Pelletiere of the Low Income Housing coalition said. They move often sometimes because they may not be able to afford their rent, or may have found cheaper rent, or maybe because they are moving into a shelter, he said.

“You’re always sort of one step away from that kind of move, and the feeling that the next move will be into a shelter or into your car,” he said. “Whether it’s a car accident, or an unexpected bill, or a family member who is sick, that will mean a move of some kind and possibly an eviction. The issue for these folks again is not only that they can’t afford rent, it’s that they’re always at risk of not being able to afford it, and the anxiety that creates,” he said. “And, there’s the tradeoffs you make. Tradeoffs in terms of health care, in terms of food, in terms of living in abusive situations to have secure housing.”

Andrea Helms, director of communications for the Tarrant Area Food Bank, said a food budget is what people believe is the most flexible tier of their budget.

“You have to pay your rent and utility bills, but food, that’s where you can skimp,” she said.

The Tarrant Area Food Bank collects donated food to send out to more than 300 food pantries in the Dallas-Fort Worth area. Since July of 2009, those pantries have seen a 28 percent increase over 2008 in the number of households served, Helms said.

‘Directions Home’

The high-risk pool for people living on low incomes who are at risk of becoming homeless has grown during the last two years with the recession, said Otis Thornton, homelessness coordinator for the city of Fort Worth.

“If you think about everything you need to have to function well in our society today, and you begin to total that up, it’s a little easier to see how it can overwhelm a low-wage household,” Thornton said.

In Fort Worth, the Directions Home program adopted by the City Council in 2008 aims to make chronic homelessness – defined as a period of more than 12 months without a secure living environment – rare, short-term, and non-recurring by 2018 by combining housing with supportive services.

As of Nov. 2, the Directions Home program provided housing, Fort Worth apartments and services for 144 people, Thornton said.

While programs such as Directions Home are cropping up across the United States as cities work to help homeless citizens find housing and work, awareness of the issues low- and minimum-wage income earners face is increasing, Pelletiere said.

“People certainly are more aware of how quickly one can become poor,” he said. “In a way, a few years ago most people probably felt that there was a lot of room between them and poverty, and the quick speed with which you can lose a home and find yourself driving around in an expensive car and not knowing where your next meal will come from. There’s recognition suddenly of our vulnerability.”