Working it Out: What does workforce housing really take to succeed?

The team behind Avenue 26, a 534-unit workforce housing development in Los Angeles that opened two years ago, learned a lesson about their buyers’ solid work ethic. In their excitement, some buyers, who ranged from teachers to police officers, logged overtime hours to buy accessories for their new homes. The extra income threatened to disqualify them from assistance programs, says Sid Paul, Agoura Hills, Calif.-based AMCAL Multi-Housing’s vice president of for-sale housing.

Clean Energy

When Dream Developers began construction on its newest 55-plus community, Laurel Ridge, the desire to install natural gas for the 88-home development was sufficient, but the means were not.

The East Hampton, Conn., company, had few options: pay for the infrastructure to tap into the nearest gas line or move to an oil-based system, which it had installed in other communities. Instead, company owner Stephen Motto turned to a different type of gas: propane. “We chose propane because it’s a cleaner-burning energy and has less discharge of toxics,” Motto explains.

Cash Guzzlers - Developers brace for rising costs as big oil commands

In late spring, the price of oil hit a new record at $135 per barrel—and the price at the gas pump quickly followed. As a high-demand commodity, gasoline has a price tag that fluctuates daily, but recent price increases have been astronomical. Since January 2001, the national average for a gallon of unleaded gas rose from $1.85 to about $4.08 in mid-June 2008—a 221 percent increase, according to reports published by the Energy Information Administration (EIA) at the U.S. Department of Energy.

Dark Horse Markets - We’re betting these six under-the-radar cities will be the next hot spots for development.

Developer identified six markets that are hot spots for development based on Moody’s Economy.com forecasts for cities with the highest projected job growth over the next 12 months and low unemployment rates—both of which point to high demand for employees and a competitive situation for employers. Interestingly, none of these markets are major metros. Instead, the markets that are primed for the biggest job gains are small, off-the-beaten path markets that rarely show up on any developer’s hit list.

Empty Space - Declining imports and plummeting demand for distribution

Other U.S. markets are experiencing a similar oversupply of warehouse space, thanks to a surge of development activity from 2004 to 2006. Spending on warehouse construction nationwide increased 19 percent from mid-2006 to mid-2007, according to Norcross, Ga.-based Reed Construction Data; increases of, respectively, only 4 percent to 5 percent are anticipated in 2008 and 2009.