New Urbanism's flip side

Wave of renewal projects subsidized by our tax dollars without our say ultimately could slow region's growth

Denver-area residents are being bombarded with high-density living centers and the convenience of living catty-cornered to light rail in a transit-oriented development. Urban renewal authorities in each municipality from Aurora to Wheat Ridge have traditionally existed for removing blight and kick-starting the local economy but are now in the developing business, using property taxes to implement this latest planning fad.

New Urbanism is a planning concept that replaces the typical suburban single-family home with high-density, walkable communities with multifamily housing on tiny lots combining retail, office and living space. Certainly, singles and childless couples will find these areas attractive, but how many more New Urban developments can Denver's housing market handle without surpassing the saturation point of becoming Condo-rado?

Absent from the media is the explanation behind all this development. Taking a closer look, under Colorado law, urban-renewal authorities can declare almost any area "blighted" and then use eminent domain to take people's land and give it to developers. The authorities can also use tax-increment financing to capture taxes on new development. A TIF is a public incentive for redevelopment that sets aside the new project's tax revenue for a set number of years and uses it to either finance bonds or reimburse the developer's costs.

These new developments all pose added costs on fire, police, libraries, schools and other urban services. But since the taxes collected from the developments are subsidizing the projects, other residents must pay these urban-service costs, either through higher taxes or by accepting lower quality services themselves.

Urban renewal authority members are appointed by the city council. Without a vote of the people, redevelopment proposals are passed at the discretion of the city council.

For instance, Louisville's Colorado 42 corridor is getting a makeover whether the citizens like it or not. The Louisville City Council rejected, then accepted, an urban renewal development with tax-increment financing worth $77.5 million despite citizen uproar.

Subsidized development will have an unfair advantage, and the planners have won the jackpot. In this way, taxpayers have spent nearly $300 million subsidizing Stapleton, $35 million subsidizing Lowry, $45 million subsidizing Arvada City Center, $95 million subsidizing Lakewood's Belmar and $62 million subsidizing Arista in Broomfield. Urban renewal aims to stimulate growth and tax revenue to remain competitive with other cities, but ultimately, it could slow regional growth as private development will be drowned out by the influx of subsidized development.

"Subsidies breed subsidies" would be a more accurate quote than what was described in "Developers, Former Foes Grow Together," (Rocky Mountain News, 2/1 7/07), where Elise Jones is quoted as saying "Success breeds success."

The Denver Regional Council of Governments has a vision complete with 70 transit-oriented developments to be built in metro Denver, many facilitated by urban-renewal authorities. Even with the subsidies, how many more people want to live with little or no yard and with all the urban annoyances of noise, crime, etc?

Urban renewal authorities see tax-increment financing as a magic wand, and some property owners see it as an overbearing use of power. Controversy over a proposed high-density development that would replace older neighborhoods near the University of Denver light-rail station is brewing and becoming a common complaint in metro Denver.

The freedom to choose where you live is subtly being eroded by the insistence of planners with New Urbanism on the mind. Freedom to live in Colorado has been reduced to politically correct neighborhoods where suburban and exurban living and auto travel has been called ugly. Regardless of labels, what the real estate market demands is of utmost importance for success in the free market.

Socially engineering the lifestyle of Coloradans seems to be the goal of many urban-renewal planners, unfortunately at the cost of taxpayers who have no say in where their taxes go. Millions have already been poured into funding new urban renewal, and without a foreseeable market correction, planners see no end in sight to transforming Colorado with high-density development.

Jennifer Lang is a researcher for the Independence Institute's Center for the American Dream and author of "New Urban Renewal in Colorado's Front Range."

For More Housing Information go to http://www2.blogger.com/www.ColoradoDreamHomes.net

Bills call for licensing mortgage lenders

By John Rebchook, Rocky Mountain News February 24, 2007

Two state lawmakers plan to introduce bills on Monday that would require mortgage lenders in Colorado to be licensed, as well as other requirements designed to "put some teeth" into measures to help stem the foreclosure tide sweeping the state.

Denver Democrats Rosemary Marshall, a representative, and Peter Groff, president pro tem of the Senate, will introduce the bills.

Marshall said Groff would introduce the licensing bill and she would carry it in the House. Democrats have championed such legislation for years, but efforts to pass it were shot down when Republicans controlled the House and Senate.

Marshall said she will introduce legislation that would "close the loophole" that exempts Federal Housing Administration lenders from registering with the state.

Until last year, Colorado was one of only two states that did not regulate lenders. Now, mortgage brokers are regulated by the Colorado Division of Real Estate.

The bills also would require lenders, for the first time, to consider the financial suitability of borrowers before making loans.

Attorney General John Suthers' office is investigating a case in which an elderly person on a fixed income of $860 a month was talked into swapping a $400 monthly mortgage payment for one that has risen to more than $1,100 per month.

"There are a lot of unscrupulous brokers out there, and we are trying to ensure that some of the methods they are using to beat people out of the biggest investment they will ever make won't happen," Marshall said.

"Really what we are trying to do is put some teeth into our laws," she added. "You know, the FBI has identified Colorado as one of the top 10 hot spots in the country for mortgage fraud. . . . These laws will allow the Division of Real Estate to fine offenders or revoke their licenses."
Also, she said, lenders should not be allowed to advertise bait- and-switch loans. A recent ad, for instance, promoted a 0.25 percent loan.

"Oh, yeah. Just try to get that loan," Marshall said.

More than 19,000 foreclosures, a record, were filed in the Denver area last year.
People losing their homes to lenders is "absolutely a huge issue" with her constituents, Marshall said.

"I represent some really vulnerable populations, where there are a lot of refinancing and first-mortgage schemes happening," she said. "But it is not just happening to the unsophisticated borrowers. These schemes are so varied and so complex, very sophisticated people also are falling prey to them."

Chris Holbert, president of the Colorado Mortgage Lenders Association, said the proposal may cause a number of "unintended consequences."

Costs, for instance, could be raised for many small businesses, costs that will be passed on to consumers, he said. In additiion, the licensing of brokers in other states, he said, has not reduced fraud or foreclosures.

While suitability requirements make sense for securities, it doesn't for loans, he said, "because the money is moving the other way."

That is, if you invest in a stock or a partnership, you are handing over your money, but with a loan, the lender is giving you money. While it sounds benign, this measure ultimately could reduce the number of lenders willing to make loans here, driving up prices, Holbert said.
Mortgage lender Jim Spray, however, applauded the measures.

"I've been calling for the licensing of mortgage brokers for more than 10 years," Spray said. "It's only logical to get rid of the FHA exemptions. And it is just stupid for a lender to be making loans when they know the borrower can't pay it back."

Spray said measures such as those being proposed never had a chance when Republicans controlled the statehouse.

"Now, with Democrats in control and a Democratic governor, it is an ideal time to get these laws on the books," he said. "This is huge."

rebchookj@RockyMountainNews.com or 303-954-5207

For More Housing Information go to www.ColoradoDreamHomes.net

Big Time Luxuries

The World's Most Expensive Homes Boast Big Luxuries & Bigger Price Tags
Friday February 23, 2007

Last month we told you about plans to build the world's most expensive home at an exclusive club in Montana. It's value: $155 million.

But until it's actually up, there's only one place on the entire planet that can claim to beat it. It's in Surrey, England and it's called Updown Court (left). And if you have to ask how much it costs, you can't afford it.

In fact, it's hard to imagine how anyone can.

According to Forbes Magazine, which keeps track of such things, the incredible estate is the priciest place on earth. It's listed for an astounding US$138 million and has 103 rooms.
What do you get for that money? How about a 50-seat movie theatre, your own glass elevator, a 35,000 bottle wine cellar, an indoor squash court, a heated driveway that holds eight limos, several indoor spas and pools and of course, your own helicopter landing areas, in case you want to get away from the place.

But who'd want to?

It may be the penthouse when it comes to shelling out for real estate, but it's by no means an exclusive neighbourhood.

Forbes says the second most expensive home in the world belongs to Prince Bandar bin Sultan bin Abdul Aziz.

His living quarters are located in trendy Aspen, Colorado - whose climate couldn't be more different than his native Saudi Arabia.

The Starwood Estate comes with 15 bedrooms and 16 bathrooms, some stables, a tennis court, and an indoor swimming pool. It's a steal at just $135 million.

It seems only appropriate that the man who owns the third costliest domicile in the world made his fortune through real estate - and did it without an apprentice.

Donald Trump bought his Palm Beach, Florida edifice at an auction three years ago for the bargain price of $41 million. It's now worth $125 million.

It has a 100-foot swimming pool and its own ballroom, not to mention 475 feet of beach front.
And because Trump knows a thing or two about the market, it's for sale. We don't even want to think about the mortgage.

Other homes on the Top 10 list include a steel magnate's London digs worth $127 million, a Lake Tahoe, Nevada monster owned by the co-founder of the Tommy Hilfiger clothing chain ($100 million) and a waterfront estate in Istanbul, Turkey (also $100 million).

Some of the real estate comes with unique features - like a $75 million 60-acre Bridgehampton, N.Y. complex that includes its own regulation size golf course.

And then there's a place that's not technically a house at all, but more like the world's most incredible apartment.

The penthouse on top of the Pierre Hotel in New York City occupies three floors, has five master bedrooms, 7 baths, five fireplaces, what's described as the world's most elegant living room and a panoramic view of the big Apple's famed Central Park. It's yours for only $70 million.
No Canadian homes made the list, although most GTA residents would tell you our prices here are already outrageous.

But considering the amount of snow we get, that heated driveway would be a nice touch.

For More Housing Information go to http://www2.blogger.com/www.ColoradoDreamHomes.net

The NEW Worlds Most Expensive Home

The World's Most Expensive Home Will Have 10 Bedrooms & Your Own Private Ski Slope
Monday January 29, 2007

Think Toronto house prices are outrageous? You've obviously never tried to buy one near Bozeman, Montana.

O.K., so the wilderness isn't exactly your idea of a home on - or off - the range. But it will soon be the location of the world's most expensive house.

Real estate mogul Tim Blixseth currently owns the Yellowstone Club, one of the world's biggest members-only residential ski and golf resorts near the Montana city.

He hasn't even laid a brick or a foundation yet, but has already announced plans to put up a home on club property for those who like to live in the lap of luxury. His price for this expensive expanse: an unbelievable $155 million.

If he gets it - and it's bound to go for at least that much - it will officially become the most expensive home ever sold.

Blixeth tells Forbes Magazine this deluxe wood and stone domicile will be 53,000 square feet, take up 160 acres, boast 10 bedrooms, and will allow those living inside it to have their own private chairlift to Yellowstone's oh-so-exclusive ski slopes. It will also have its own built-in movie theatre and a swimming pool that starts indoors and winds up outdoors, when a glass panel slides away to separate nature from the closed off interior.

The fully furnished villa will also come with a completely stocked wine cellar and a driveway that measures just over 2 kilometres long.

Will anyone actually be rich enough to pay the price for this place?

Apparently someone will.

Blixeth admits he's already received a huge response about the property from the well heeled. And the mogul, who grew up poor but made his fortune in the lumber business, admits even he's been taken aback by the interest in the less than humble abode.

"Some of (the world's richest) just have to have the best. Price is not an issue," he told Forbes.com.

It could take another 14 or 15 months before the super exclusive place in the super exclusive club is ready to be listed.

So the next time you go house hunting in Toronto and the price seems a little high, consider relocating to Montana - where the Big Sky is clearly not the limit.

The asking price for this majestic mansion tops the previous record. That was set by a place called Updown Court in Windelsham, England. That location could be had for a paltry $139 million. But good luck paying down the mortgage.


For More Housing Information go to http://www2.blogger.com/www.ColoradoDreamHomes.net

Risky Loans Come Home to Roost

To understand what's happening to the mortgage industry, take a look at Douglas County. One of the country's most prosperous communities now has a foreclosure rate approaching what its former public trustee calls a "tipping point."

In 2006, foreclosures as a percentage of population were higher than any other year since 1991, said Jack Arrowsmith, Douglas' former public trustee and its current clerk and recorder.
At a recent foreclosure sale, Douglas officials offered 32 residential properties for auction. According to Arrowsmith, nobody bid on 31 of them.

That's why mortgage companies making risky loans are now closing by the hundreds.
Offering no-money-down home loans to unqualified buyers using artificially low teaser interest rates was just that - a tease. Especially here in Colorado.

We led the nation in foreclosures most of last year. We're still No. 4 in the latest RealtyTrac poll.
So on Tuesday, when a Federal Reserve governor expressed shock at the quick national collapse of the risky lending market, she sounded vaguely like Capt. Reneau in "Casablanca."

Subprime lenders, as risky-loan makers are called, are closing up so fast that financial experts now debate if it will affect the entire economy. Analysts can't agree. But with stock-market-traded mortgage companies reporting huge losses from subprime lending, it can't help.
The explanation for crazy lending has always been crazy.

"It is no longer community banks making mortgage loans," Englewood lawyer Robert Hopp told a recent foreclosure seminar at the Colorado Bar Association. Out-of-town lenders provide mortgage money for a fee. Risky loans are quickly packaged with other mortgages and sold as securities for a fee. Investors buy the mortgage-backed securities expecting a fat return.
Everybody gets paid. Risks get diluted in big loan portfolios. Those who can't afford houses suddenly can.

And lo and behold, the American Dream comes true. Is this a great country or what?
It all sounds too good to be true because it is.

Now, the only people capable of stopping the madness - the money grubbers - are getting a clue. Loose and deceptive home lending profits no one.

In Douglas County, Arrowsmith believes fewer risky home loans is good news. It makes lenders and borrowers more accountable, he said. That, in turn, will help everyone's property values.
Stabilizing home values is what this is all about. Arrowsmith lived through the real estate bust of 1988, when home values actually declined. It was ugly.

"It's a positive thing that lenders are starting to review the process," Arrowsmith said of the risky-loan meltdown. "But it's going to take time.

"In the long term, lenders are going to require borrowers to put some money into their property."

Sure, that thins the homebuying herd, but it forces folks back to the reality - and responsibility - of homeownership.

The risky-lending boom of the early 21st century was a Ponzi scheme. It depended on constant growth in real estate values. You could lend anybody anything so long as their house was worth 10 percent more each year. For lenders, growth meant collateral would always be worth more than the money tied up in it.

According to Hopp and Arrowsmith, some lenders made loans worth up to 20 percent more than the assessed value of homes. These lenders believed appreciation would make up for negative equity. When the market stagnated and borrowers couldn't keep up with mortgage payments, negative equity and zero-down lenders ended up with a bunch of houses worth less than the amount of money owed on them.

When that happens, you get foreclosure auctions where only one house in 32 is worth a bid.
And lo and behold, the American Dream comes to Jesus.

Jim Spencer appears Monday, Wednesday and Friday. Reach him at 303-954- 1771 and jspencer@denverpost.com.


For More Housing Information go to http://www2.blogger.com/www.ColoradoDreamHomes.net