March 31, 2008

Franklin studies affordable housing issue

Franklin creates task force to look at affordable housing
Nashville Business Journal - by Jenny Burns
An affordable workforce housing task force is being created in Franklin to study barriers builders say keep them from building affordable homes in Williamson County - high land costs, impact fees and low-density restrictions.
Franklin's new mayor and board of aldermen say they recognize the need for teachers, policeman, city employees and retail workers to be able to buy homes where they work, says Vernon Gerth, assistant city administrator for community and economic development.
"There's mid- to higher-end but not much toward the lower price ranges," Gerth says. "That is a very critical community and economic development issue in our community as we continue to grow."
"Having a balanced community includes affordable and moderately priced housing, which is a challenge and needs focused attention," Gerth adds.
The median price for a home in Williamson County increased to $387,000 from $371,118 in February. The median is the mid-range in a series of numbers, meaning half the homes sold for more than those amounts, and half for less.
"In the $150,000 to $250,000 range, there are very few properties that are for sale [in Franklin] and if they are, they're 35 to 40 years old and may need repair. That's another problem," says David Pair, government affairs director for the Williamson County Association of Realtors.
The committee will examine Franklin's zoning regulations in areas such as density, design standards and impact fees. Gerth says the goal is to facilitate the ability to offer more affordable housing.
Builder Peggy Krebs of Elite Homes says zoning, privilege taxes and land costs make it difficult to build affordable homes in Williamson County.
She focuses on building affordably-priced homes, she says, because she remembers struggling to pay apartment rent and then buying her first home.
Krebs says she can only build affordable homes in Davidson County where there is no privilege tax.
"The trends for affordable housing are not good," Krebs says. "I give [the Nashville] mayor and city [praise] for trying to address it. Some of our other surrounding counties, not so much."

Refinancing? When is it a smart move?

Does refinancing save money? It depends
By BENNY L. KASS • March 29, 2008
I bought my condo 18 months ago. The interest rate on my 30-year loan is 6.25 percent. Should I consider refinancing to a lower rate? I plan on staying here and paying off the loan so it seems even if I save some money on a lower interest rate I will be extending my loan and paying more over the long haul. — Scott
Since you've had your loan for a relatively short time, the costs to refinance your loan may not outweigh the benefits of a lower interest rate.
Let's take this example: Your loan was $300,000.The monthly payment at a 6.25 percent interest rate is $1,847. (This is only for principal and interest; it does not include escrows for taxes and insurance.) If you refinance at 5.75 percent, the new monthly payment will be $1,751, or $96 less per month. You have to do the numbers. Contact your current lender and see if they will agree to allow you to refinance and not charge you all of the settlement costs. Some lenders will be willing to do this.
If not, contact other lenders in your area and compare closing costs. Let's say that they will run approximately $2,500. It will take you 26 months to begin to see the savings on the refinance loan (divide $2,500 by $96).
So in your case, it is a close call. But since you plan to stay in the condominium for a long period of time, it might be worthwhile to refinance.
Here are two suggestions should you decide to go that route: First, instead of paying cash for the closing costs, if you have sufficient equity in your unit, have the lender add those costs to the amount of your new loan. This will not increase your monthly payments very much.
Second, if you can afford it, try to make extra payments each and every month, and specifically advise the lender (when you send in your check) of the amount of these extra payments. If, for example, you make one additional monthly payment every year, you will reduce your 30-year loan down to approximately 22 years.

A new neighborhood for Thompson's Station?

THOMPSON'S STATION — A proposed neighborhood that would link rural Dean Road with Heritage Commons via a new bridge that would go over the CSX railroad tracks was approved by the town Planning Commission last week.
Commission member Millie Halvorson cast the lone vote against River Ridge Farms, though she was not the only member to share concerns. The new development would have 252 lots on just under 227 acres.
Halvorson said she worries about the traffic the development would add around the Heritage Elementary and Middle schools campus.
Commissioner Nina Cooper added an additional concern. "I just feel like these country roads can't handle a lot of construction traffic," she said.
Builders would access the site from Evergreen Road and Dean Road in the first phase of the project, representatives from Cornerstone Development said. This phase will include creating the railroad overpass and the new road,
That phase would take about six months to complete. Afterward, construction traffic would be routed from Highway 31 through Heritage Commons on Trader's Way.
Halvorson said she feared that people would use Thompson's Ridge Road instead, which fronts the campus, because it has a traffic signal at Highway 31.
The site plan and request for residential zoning must be OK'd by the Board of Mayor and Aldermen, which meets at 7 p.m. April 8 at the community center, 1555 Thompson Station Road W.

Nashville ranks 16th in affordability!

Nashville ranks 16th for housing affordability in a new Bizjournals study of 50 U.S. cities ranked by income, mortgage payments and taxes.
Nashville Business Journal-March 2008
While builders and Realtors say they applaud Nashville's top 20 ranking, they note some communities in Middle Tennessee need to embrace the need for workforce housing.
"This is just one more feather in our cap," says Mandy Wachtler, president of the Greater Nashville Association of Realtors. "It tells our nation that we're in the top 20. That brings retirees here."
The study ranked the 50 largest metropolitan areas as of mid-2006. It based mortgage payments on a 10 percent downpayment with a 6 percent, 30-year, fixed-rate mortgage.
Oklahoma City ranked most affordable with low taxes and the lowest mortgage payments - $667 a month for both. California cities ranked at the bottom of the list, with Los Angeles the most expensive.
Nashville's median house payment was $960 per month, but its median monthly household income, at $3,975, was lower than other similar-priced cities.
St. Louis ranked 13th with a $962 median monthly house payment but a much higher median income at $4,147 per month.
Builder Peggy Krebs of Elite Homes sees buyers who spend as much as 60 percent of their incomes on mortgage and utilities, which she says is too high. Experts recommend 30 percent.
"Why should people care?" Krebs asks. "Because the individual who's trying to get by with $40,000, what happens is a disproportionate share of their income is put toward housing, which means less money is put into shops, dining, spending."
Krebs focuses on building for the lower-income demographic in Davidson County because there are no impact fees, she says.
Local buyers find Nashville more affordable than buyers find metro areas in other parts of the country. A survey by the Greater Nashville Association of Realtors shows 48 percent of buyers in Nashville purchased homes because of their affordability while 42 percent said that nationwide.
Davidson County has done a good job of offering high density development and incentives to builders to sell a portion of the units at affordable prices, Wachtler says, but higher-priced markets such as Williamson County need to do more.
"We need to look to all surrounding counties to offer workforce housing, not just 5-acre tracts with mansions on them," Wachtler says.

March 25, 2008

Signature Tower Moving ahead with Marketing

Marketing push set for Giarratana Development's Signature Tower
Nashville Business Journal - by Jim Stinson Nashville Business Journal
A major marketing push will begin in April to sell another 100 reservations in the 400-unit, $250 million Signature condo tower.
That magic number is necessary for the 70-story tower in downtown Nashville to be financially viable, says Tony Giarratana, Signature's developer.
Giarratana says he has sold 103 units and needs another 100 to get financing. That's a change from how he financed the 333-unit Encore condo tower in SoBro, reflecting the nation's credit slowdown.
"While we financed Encore and Belle Meade Court with no pre-sales, current market conditions dictate that we secure 200 pre-sales prior," says Giarratana.
The tower also will feature a 200-room Kimpton Hotel at the base and a restaurant. The Signature would be the tallest building in the Southeast and eclipse Atlanta's Bank of America Plaza.
Downtown observers say they expect the 70-story Signature to go up eventually and note Giarratana has endured tough times to build the Cumberland, Viridian and Encore towers.
The Cumberland apartment tower, opened in 1999, was the first new residential project in the core downtown district since Metro rewrote zoning laws in 1993.
The 31-floor Viridian, Middle Tennessee's tallest residential building, followed in 2006 with 305 units, and the 333-unit Encore opened in early March.
"[Giarratana] has practically built the entire downtown [residential] market," says Tom Turner, executive director of the Nashville Downtown Partnership.
There are 1,178 residential units under construction downtown, says Turner, a number which excludes the 300 units in SoBro's Encore, where move-ins have begun.
The downtown residential units number includes land south of Jefferson, inside the interstate loop, so Gulch properties such as The Icon are included, Turner says.
Eighty-two percent - or about 966 - of those 1,178 units are sold, says Turner.
Nashville is behind such Southern cities as Knoxville, Charlotte, N.C., and Louisville, Ky., Turner says when it comes to downtown residential development.
The cities average one residential unit for every seven office workers downtown. Nashville averages half that, with about one unit for every 14 workers downtown.
Giarratana says he often hears people skeptical about the downtown market suggest there are 10,000 units downtown, when in fact the market is underbuilt. The reason, in part, he says is the city only legalized new downtown residential construction in 1993.
Turner says he believes the Signature Tower will survive the national economic downturn because of the strong demand for downtown condos.
"I think there is a disconnect between residential demand and the residential economy," he says. "A lot of people are looking at national market stories and not necessarily looking at the local economy. [Nashville] is on a steady uptick."