Happy New Year Ward 6

In the past, the downtown area has been exempt from having to perform occupancy inspections at the sale or change of residency of a loft or condo. As a side effect from the rift going on at the King Bee Building, it was ordained that buildings downtown would begin to be incorporated into the city's HOUSING CONSERVATION PROGRAM

In November, I checked with the office in room 406 of City Hall. As a city landlord and resident, these inspections are familiar. Asking when they would be adding downtown buildings, they told me to check back.

So it was strange, last week, when I did look up the Terra Cotta address to find that they, along with all the other downtown buildings in the 6th Ward, were now assigned to Conservation district 54. (This presently includes 2020 Lofts, Terra Cotta Lofts, The Annex Lofts, Printer's Lofts, Railway Lofts, Windows Lofts, King Bee Lofts, Paris Style Lofts, Knickerbocker Lofts, Garment Row Lofts, Denim Lofts and Westgate Lofts) All the buildings are scheduled to require occupancy inspections by July 1.

Looking at downtown, it should be interesting. Just like any other situation, being able to get the occupancy inspectors into a building requires more leg-work than necessary in a house. Its also one more step in the process of selling or renting your loft.

Sick Buildings!

Nothing new to report here. Buyer's get freaked out when they see lots of places for sale in a given area. Drive down one street in a neighborhood and see two or three houses together with 'For Sale' signs and people start asking what's wrong with the area. Is the Love Canal flowing in back? Is there a crack house on the corner?

The funny thing about downtown is that some buildings go out of there way to force EVERY prospective buyer that walks into their building to see how many units are, or have been on the market based upon the number of lock boxes they see when they walk in the door or as they walk by the building. This is a problem that really should be fixed. Not only does it reflect on the building, but it reflects on downtown as a whole.

Of course, having a buyer's agent like myself, we can explain that there are a number of units that have sold and still have the box there. There are others that may be for rent, and there are still some that just need a lockbox for entry of a utility or service technician. We can also point out that in a building with 100 units, having 10 on the market isn't bad. In the mind of a buyer, no one would want to sell in the building they want. It would be too cool for that.

So this may be another post for the condo board members out there to consider. If the first message a buyer gets out of your building is that a bunch of units are for sale, you have a problem. At a time when re-sale value isn't something we even want to look at, its not a bad time to address the things that will hold back re-sale values in ANY market.

To Live or To Sell!

Last month at the Downtown Neighborhood Nights, we ran into one of our clients. With so much for them to do and see, we didn't spend too much time talking except for a few brief minutes. How's your life? Do you enjoy your space? etc.

We found out they had become the Association President too.

That brought up the subject of how they had chosen to implement leadership in the building.

One topic that seems to be coming up lately as a problem for people trying to sell is the creative RENTAL RESTRICTIONS have been implemented in some of the loft buildings downtown.

It seems that buyers, when faced with a decision between two or three lofts will choose one with less restrictive by-laws. Their "short list". That often times one of the determining factors is conveyed like this, "well if I ever needed to rent this one, I could." Of course some loft buyers have every intention of renting out their space at some point of their ownership.

We discussed that with our client. He cited some research that was provided regarding appreciation levels in comparable buildings. One building chose to "manage" its residents affairs with edicts and fines. Another similar building had higher fees with less restrictions. According to the study, in this situation price appreciation was higher in the building with less restrictions. Instead of being heavy handed, the condo association held parties and mixers in the building so that residents could get together and talk about issues in an informal setting.

Of course, I have no idea what study this is or the validity. There could be other factors not made clear in our discussion.

It seems interesting though, that the lofts we are trying to sell with the most difficulty have strict rental restrictions while the units that seem to sell faster have less absolute restrictions regarding rentals or other matters. Since the summer, we've actually sold more units in the Syndicate than any other building. While prices are drastically lower in resale units,

Also interesting to me is that often times condo board members we talk to only cite the negative problems that rentals can cause and seemingly have little or no interest in how restrictions can stiffle resale. Seemingly there are two sides to the matter, and those that believe having strict limits on rentals do so because they are entirely focused on the buildings livability and fear of renters. Selling and resale value tends to not be as high of a consideration. The minority of people selling seem to take up the issue of association restrictions at times, but as people leaving the group, they have little influence. As a realtor, of course, we'd like to think we focus on the "big picture" but my primary interest with buyer's is usually resale.

Condo assocations to have to consider the number of leases allowed in a building to keep the building "warrantable". Usually that number is a maximum of 40-49% leased units. The former giant Pyramid had a brilliant scheme: to only allow rentals for "original owners" creating a noble class within their buildings. This really was a scheme that allowed them to sell with less trouble, and to reduce competition for them down downt the road. Members of the noble class always seem to embrace this right. Sometimes those affected by strict rules talk lawsuit: forcing the will of one onto the many. That doesn't seem like the way things should be handled either.

No matter how this issue is viewed, or any other, one thing clear is that setting policy in condo associations can be a delicate matter. No training or education is required to be elected to the board or to lease, but having some collective wisdom or case studies available to those who serve would be nice.

Help Design Lucas Park TONIGHT!

In just 30 minutes from now, a "design charette" will be held at Crepes in the City, 500 N 14th St. It should last until about 9. Plenty of discussion has led up to this event in hopes to transform the current space into a more useful and welcoming park for all the city residents.

One Holiday Thought.........SHOP DOWNTOWN!

A Big topic of discussion this year is holiday retail shopping. Turn on the news. There's talk of the economy and its effects on how much a person will spend on gifts this season. Our thoughts aren't how much, but where our money is spent.

Growing up in suburbia, no one really had to worry where they shopped. Most shops were owned by big business paying minimum wage to its employees. My wife, on the other hand, grew up not far from me but had an entirely different outlook. There were the malls and all the big box retailers, but there were a few strip malls nearby her home with mostly independent businesses. It was important to her to support them because without LOCAL SUPPORT, the storefronts that made up that community would be empty.

Looking at the downtown streetscape, what's different? Particularly around the residential areas, take out the Sprint store and what's left? Small, locally owned and operated independent businesses; many of which are owned by downtown residents!

There was a big increase in store openings in the past year which really helps everyone. Turning around empty or unsightly street level retail does more to change public perception of an area than having 100 occupied lofts sitting above them.

Earlier in the year, we posted about shopping downtown. That was more about the city not being supportive of the downtown retail district.

This is the call to all city and downtown residents and workers. With the economy suffering and retail sales lagging, it's more important than EVER to take care of your own neighborhood by SHOPPING THERE! From my experience as a realtor, downtown residents always get excited by stores and restaurants opening up in and around their building. The thought of these same residents leaving the downtown area to shop would be a disappointment.

Last week, Mrs. G was out with a friend from Springfield MO, enjoying THE LONDON TEA ROOM and Sushi at Wasabi when they did a little window shopping at the new ladies accessory shop D'Elegance, someone pulled them inside and they began holiday shopping. Do your part by adding your "wish list" items from stores downtown and supporting them! Not only will it benefit the owners, the local residents but also will keep tax revenue in the city. SHOP DOWNTOWN!

Our National Audience

Last week, setting the record for audiences at the Gateway Arch Grounds was a nice day of publicity for our otherwise HO-HUM National Park.

Not that the Arch isn't great, but really, outside of some good scenery, what is it?

Today's cover article on STLTODAY.com talked a bit about the little struggle we have going over the hope for revisions of the arch grounds.

According to the NPS, they can't just listen to what St. Louisans want. It has to be opened up for a national competition, similar to the one that Eero Saarinen was in. Seems respectable, huh?

This was posted back in April, the last time the media covered it.


Three concerns I have now. 1. The Arch Grounds are a National Park and should be treated accordingly....BUT we have to live with it year in and year out. Plans should be something that takes into account the city's desire for a world class destination, not just a quick makeover.

2. The actual plan that Saarinen submitted for his original contest victory was more involved. What we have is a stripped down version. Original plans include a theater a levee restaurant, an architectural museum and a history museum. Also the grounds would be forested and the Old Rock House would have been re-built from original materials. The NPS had an opportunity to get it right already. It makes a hell of a fairground, but is it something that brings people downtown?

3. My hope was for a call to action from within the city. Contact your Congressman! Of course, saving the economy has been a bit more pressing, but this should be a close second!

Claims that its National Historic Site should prevent local pressure to make improvements is NONSENSE! I would understand if it was Arlington National Cemetery or something of historical significance but c'mon! Everything historic was razed for the modern art, grassy landscaping and westward expansion museum. Nice, but historic? I might even be swayed by a bit more history on the part of the city that was destroyed to plant the Arch.

Party in the Park

Lots of talks have taken place about what can be done with Lucas Park. What happened in the past month or so is really fantastic....the talk turned (quickly) to action. Who is to say what the best use of the park is, or how it figures into the neighborhood, but having it cleaned up is fantastic!

Support the efforts and show up!

Fearful?

Last week, Warren Buffet said something that really hit home with me about his investment choices. He said he follows a simple rule, to "be fearful when others are greedy and be greedy when others are fearful." As a believer in home ownership, it wasn't disconcerting back in 2004 or 2005 when many buyer's came to me wanting to find a home. Buying was a foregone conclusion in those days. At the Ely Walker Lofts release party, I remember some people that tried to reserve several lofts. Stories of huge profits from flipping lofts were legendary then and people wanted to cash in that night. I think about that evening often.

When the market really tanked in Florida, I thought about the launch party at Ely. I heard stories of people getting stuck with multiple units and not knowing what to do. Greed really reared its ugly side.

Despite the markets in many locations being turned upsides down and many of the builders downtown having to drastically change their business plans, the market isn't as horrible as we hear on the news.

One presidential candidate is going around saying that the housing market has "collapsed". When the stock market collapsed during the great depression, it lost nearly 90% of its value. In contrast, our housing appreciation has mostly just flattened out with slight drops or slight appreciation based on market demand.

Other things I keep hearing is that the credit markets are frozen. No one can get a loan. "You watch too much TV!!" was what one mortgage lender told me. I had called him to ask if they'd be able to fund a loan set for closing last month. Of course, there are limitations. Some good, some not so good. Most of what industry professionals called "exotic loans" are a thing of the past. Also, much of the lending going on is in the form of loans that can be sold on the secondary market or otherwise insured by FHA or VA.

So thoughts about the world today are that the news media is spewing bad advice, engendering terror and paralyzing the community. People that buy homes right now are following the most fundamental rule in investing: buy low and sell high. Had I not gone on my buying spree last year, I'd be greedy right now.