Industry Watch: Wetland Rules May Loosen

Army Corp. of Engineers' decision may make real estate development easier.

July 1, 2001

The Army Corps of Engineers is proposing to ease a number of year-old rules to protect wetlands and other environmentally sensitive areas from increased real estate development. The June 4, Washington Post reported that the Corps has introduced more than a dozen proposals that would effectively do away with measures that made it more difficult for developers to secure “general,” rather than the more difficult-to-obtain “individual” permits to drain or fill wetlands areas. According to the Post, the Corp is proposing that a rule would permit any project disturbing less than 300 feet of streams to dispense with a specific permit. Instead the developer would only have to notify the Corps of “potential impacts.” Individual permits will still be required for developments affecting more than one-half acre of wetlands.

Although the Environmental Protection Agency, the Fish and Wildlife Service, the National Marine Fisheries Service, and the Office for Surface Mining are all opposed to the rule relaxations because of the potential damage to the environment, the National Association of Home Builders, which sued the Corps over last year’s regulations, says the agency “is moving in the right direction.”

California’s exploding population is likely to put even greater upward pressure on home prices in the future, according to a well-regarded California economist. Addressing a recent meeting of the Manufacturers Bank Economic Symposium in Los Angeles, Stuart Gabriel, director of the Lusk Center for Real Estate at the University of Southern California, said that California’s population is expected to increase by 10 million people between 2000 and 2020. Those new residents will form 3.5 million new households (at approximately 2.8 persons per household), creating the need for 220,000 new housing units per year.

When you consider that even in the “boom” year of 1999, only 144,000 residential permits were issued, California will face an increasing housing deficit in coming years unless construction expands. Gabriel added that disjointed planning efforts by local governments compound the problem by creating a maze of conflicting zoning laws and building codes for developers to follow. He noted that there were 170 incorporated cities in the Los Angeles Basin, each independently making development decisions.

Ninety-eight percent of sixth graders know that no one owns the Internet, while 23 percent of senior executives in Fortune1,000 companies think that the Microsoft Corporation controls the Net, found a recent survey by Volchok Consulting of New York City. A total of 93 percent of the sixth graders could explain what a modem is; only 23 percent of the corporate executives could do so.

Atlanta tops the charts in new multifamily construction for the first quarter of 2001, according to TortoWheaton Research, Cambridge, Mass. The city posted an annualized rate of 16,588 units through the first quarter. Other cities experiencing strong first-quarter multifamily permitting activity include Orlando; Chicago; Washington, D.C.; and Phoenix. Preliminary U.S. Census Bureau data on national multifamily building permits showed a decrease of 7.6 percent from February to March. However, permits are still ahead by 16.8 percent on a year-over-year basis.

The first new public school to be built in Washington, D.C., in 20 years was just completed--at no cost to taxpayers. The James F. Oyster Bilingual Elementary School, home to a nationally recognized dual-language immersion program in English and Spanish, was constructed and financed through a public-private partnership between the District of Columbia Public Schools and LCOR Inc., a national real estate company headquartered in Baltimore.

School construction was financed by an $11-million, 35-year, tax-exempt bond package issued by the District. LCOR will repay the financing entirely from new revenues generated by a 211-unit apartment building the company is developing on land adjacent to the school. The land, previously part of the school site, was traded to LCOR under the partnership agreement.

Houston tops the list of the best places for blacks to live, according to an article in a July 2001 issue of in Black Enterprise magazine. The magazines “Top Ten Cities” list also included (in descending order): Washington, D.C.; Atlanta, Charlotte, N.C.; Memphis, Tenn.; Detroit; Baltimore; Dallas; Chicago; and Philadelphia. In developing the list, the publication found that seven out of the ten cities had a black mayor and half had populations that were at least 25 percent black.

If you feel like you can’t keep up with the changes in the technology industry, you’re not alone. The June 2001 edition of National Relocation and Real Estate magazine, one of the industry’s highly regarded trade publications, carried a six-page cover story entitled “Firetap Speeds Up The Industry.” Problem is, Firetap filed for bankruptcy the same week that the magazine was distributed.

“Lead Management” can be a “gateway to profitability” says industry consultant Jeremy Conaway in the June issue of Chicago REALTOR, official publication of the Chicago Association of REALTORS. Among his highly pertinent observations:

  • A successful lead-management program must provide the incoming lead with a sense of absolute hospitality and stability. The interaction must leave consumers with a sense that they have indeed made the correct decision in responding to the company’s marketing message.
  • A lead isn’t a gift for being in the right place at the right time, nor should it be used as a reward for past performance. A lead is the seed of profitability; brokers should make referrals on the basis of potential consumer satisfaction and brokerage profitability.
  • Company and salesperson resources are wasted in chasing leads that were never going to close. Inexperienced salespeople continue to pursue leads that lack even the basics for success.
  • In today's real estate transaction, there’s no such thing as “a fact without an economic impact." A lead management system must be designed to capture, store, and provide access to a stream of major and minor facts, since every bit of information may in some way contribute to profitability.

History is again losing ground to urban sprawl, says The Civil War Preservation Trust, the country's largest nonprofit battlefield preservation organization. The group issued a list of the most endangered Civil War sites, most of which are being chipped away by urban and suburban growth. They are: Allatoona Pass, Ga.; Mansfield, La.; Brice’s Cross Roads, Miss.; Raymond, Miss.; Fort Fisher, N.C.; Gettysburg, Pa.; Stones River, Tenn.; Loudon Valley Sites (Aldie, Upperville, and Middleburg), Va.; The Wilderness, Va.; and Harpers Ferry, W.Va. Details about the significance of each site can be found in the July/August 2001 issue of American Heritage magazine.

Veteran industry observer Tom Dooley is president of TWD Associates, a real estate consulting firm in Arlington Heights, Il., and editor of two monthly newsletters. Contact him at 847/398-6410;

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