Monday, March 1, 2010

The New American Home Goes Unfinished

Ngai Pindell and I have been lobbing this article back and forth, so I thought I'd go ahead and post it.  A desirable in-fill community containing the "New American Home 2010" is going unfinished due to the construction financing crisis.

The New American Home 2010 had already survived delays in the approval and installation of its insulated concrete form walls, rejection by the city of an innovative graywater recycling system, and an arson fire that engulfed a framed house on an adjacent lot. But it could not overcome an [acquisition, development and construction] lending environment that has dried up in Las Vegas and across the country.

Record-setting bank closings, tighter regulations for real estate lending, and reappraisals that are less than the amount of outstanding construction loans have put builders nationwide out of business or on the brink of insolvency. “The only way to describe the [AD&C] market is horrible,” says David Ledford, NAHB senior vice president for housing finance and land development. “Even good projects can’t get money, and it’s hard to identify any patterns about the lending that is being done.”

Is this true everywhere?  It certainly seems to be so in Georgia.  Developers with their own money or with nontraditional partners are the only folks getting anything built nowadays.  Do comment and tell us about the situation in your area.

Jamie Baker Roskie

http://lawprofessors.typepad.com/land_use/2010/03/the-new-american-home-goes-unfinished.html

Development, Georgia, Las Vegas | Permalink

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