This article originially appeared on the Irvine Housing Blog

Uncle Sam has embraced cash-for-keys as part of its initiative to streamline the short sale process. Can we expect to see many more successful short sales soon?

Stop your stalling,
And just give me more than you should,
Before we’re all in
The same mess I knew we would;
I will not call you,
‘Cos I know he’ll answer the phone;
There’s something stunning
About the way we lie till it’s gone.

Snow Patrol — Steal

Now that the US taxpayer is absorbing the losses from the US housing and mortgage markets, someone in Washington has decided it is more cost effective to pay everyone off at short sale rather than forcing foreclosure. More transactions may be coming if short sales are expedited, and that is probably a good thing.

Program Will Pay Homeowners to Sell at a Loss

By DAVID STREITFELD
Published: March 7, 2010

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.

Reach for your wallet; the government is streamlining….

Cash for Keys from Uncle Sam

To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

There it is; Uncle Sam is paying people to pack their stuff and get out of the taxpayer’s property — and it is the taxpayer’s property given that the taxpayer is the only party putting money into the deal to pay everyone off. Didn’t we all know it would come to this? How much longer before Uncle Sam gives up on this loan modification crap and cranks up the foreclosure meat grinder?

The owners of second mortgages must be thrilled with this program. The second mortgage is worth practically nothing when the property is underwater. Investors who expect little or nothing are getting a significant payout from Uncle Sam. I assume Goldman Sachs bought every underwater second mortgage in the country leading up to this policy change.

Cutting out flippers

This program will succeed by cutting out the cash market at foreclosure. Short sales are resales and subject to financing, so prices are higher and loss recoveries greater — at least in theory.

Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.

I think the statement about being better for a borrower’s credit rating is dubious. How much better is it to stiff a lender for $50,000 if you do it on good terms? Short sales often come with some kind of long-term repayment agreement or acknowledgment of debt. Rarely is it a clean break.

The last statement about benefiting the community is true. Empty houses serve no one. A short sale keeps the property occupied and maintained and keeps continuity in neighborhoods and communities.

With the large amount of distressed inventory, expediting short sales will become a necessity. If every distressed property goes through foreclosure and remains empty for a significant time, everyone involved loses, except perhaps the trustee sale flippers who will be asked to clean up the mess.

For years we’ve been hearing about gradual changes in the interior preferences of homebuyers, but during the boom years many builders stuck with the tried and true rather than risk their production schedules – and profit margins – on risky changes. Of course with discounted short sales and foreclosures continuing to dominate most local housing markets, new homes not only have to be competitively priced, but offer updated design cues and interior amenities.

Perhaps the biggest change today is that, on average, new homes are getting smaller after nearly doubling during the previous generation. According to a 2009 survey by the National Association of Home Builders (NAHB), 58% of potential buyers reported a preference for smaller homes with high-quality materials, and between 2007 and 2009 the desired square footage shrank from 2426 to 2292 square feet.

Although many production builders are getting ahead of this trend by ditching the status-seeking sweeping staircases, grand foyers and attention-getting fireplaces, Marianne Cusato, designer of the famous “Katrina Cottages” of 300 to 1800 square feet now available at Lowe’s, has introduced a “New Economy Home” for a larger audience.

At a reasonable 1676 square feet, Cusato’s design offers a flexible downstairs suite that can morph from a family room or office into a rental unit or a downstairs master bedroom in conjunction with an owner’s needs (and even, as she suggests, allow a divorced couple to share the house if finances are tight). What’s missing from her plans, of course, are features which might look nice but add little to a home’s utility value, such as long hallways, giant master suites, media rooms and that now-dated scion of the early 2000s – the Roman tub.

One key demographic group with design as a primary component of a home buying decision is Generation Y. While a large portion of this group may currently be doubled up with roommates in apartments or have temporarily boomeranged to live back with their parents, when the economy rebounds they’ll want their first taste of freedom in both stylish rentals and for-sale homes.

Importantly, for this cohort less is more, meaning clean lines and contemporary styling accented with bold colors against neutral backgrounds. Since both the Generation X and Y value social opportunities, builders can do a lot by properly merchandising small spaces for casual entertaining with the use of game tables and flat screen TVs.

Although the kitchen still remains the activity hub for most parties, the best designs create interactive flow with an adjacent family room by substituting breakfast bars for walls. And with outdoor spaces such as patios, yards and balconies increasingly becoming part of the overall entertaining experience, they should not only interact well with traditional interior rooms but also be easy to furnish.

For Gen Y, Gen X and Baby Boomers combined, they’re also increasingly demanding home offices or dedicated workspaces in lofts and alcoves, yet desire homes which require little maintenance and offer flexibility for a multi-tasking lifestyle.

And, while numerous surveys have demonstrated that buyers don’t want to pay more for green features, they still want to see them at least offered as an option (and one way to show a builder’s green credibility is to always offer appliances with an Energy Star label).

In the end, today’s more sophisticated buyers seem to be bringing a list of opposites to the sales table: homes that are both social hubs and sanctuaries, homes that are green but don’t cost any more, and homes that are well-designed but exclude pricey upgrades and options they can’t recoup when they re-sell. But for those builders who step up to that plate and are willing to swing, future riches may indeed await.

With steeply discounted foreclosures taking a huge bite out of the potential demand for new homes over the past couple of years, the nation’s home builders initially reacted with a combination of incentives and price cuts to stay competitive. Yet as the recession has worn on, the building industry has managed to find another trump card up its sleeve that will stay with us even as the economy rebounds: compelling architecture. Ranging from the practical and sustainable to the purely aesthetic, new home design is here to stay as a primary means for builders to stay competitive.

At the most recent Gold Nugget Awards in San Francisco, the one common element among the award-winning projects was not only offering attractive exteriors and an efficient use of space, but also incorporating designs into the scale and look of the surrounding area.

For example, Barry Berkus’ Yarnolani Court won Project of the Year for what is in fact a small, five-unit infill project in Santa Barbara not just due to its LEED Platinum certification and its unique way of combining interior and exterior spaces, but also due to its attention to detail. While remaining true to the city’s Spanish architectural traditions, Yarnolani Court offers a slimmed-down scale to accommodate less than 2,000 square feet of living space while still paying attention to details such as cantilevered wooden alcoves, wrought iron railings and arched windows and doors.

In areas throughout the Sun Belt, smaller interior square footages can be balanced by a more artistic approach to bringing in the outside. That’s how a project such as Shapell’s Grand Award for its Belmaison in San Jose can be recognized for its use of double courtyards that allow natural light and passive ventilation to maximize the impact of what nature has to offer on a very narrow lot.

For a high-density urban development, paying attention to the scale of the surrounding neighborhood is critical. In the case of Grand Award-winner The Renaissance by Signature Properties in the City of Concord (a suburb of the Bay Area), connections to the immediate area – including transit stops – are enabled by a scale friendly to pedestrians and enhanced by exterior articulations that underscore the high quality of materials used. The result is a project that won’t seem trendy five years from now and has become an integral part in the city’s revitalization plans.

Even for an infill project in an existing suburban area, sensitivity to local history and architectural norms is critical. When SummerHill Homes built Lane Woods in Menlo Park — once known as a weekend getaway for residents of San Francisco and San Jose – the builder preserved 96 existing trees, oriented lots around a central park, and offered up traditional wood siding, large porches and balconies. Suddenly a project with just 32 homes could lay claim to its own version of an ‘old growth’ neighborhood while still providing the environmental and technological benefits of new construction.

As builders – and their buyers – continue to embrace the advantages of green building, even small changes can make a difference. For example, porous pavers can assist water run-off during storms while re-charging underground aquifers, roof-integrated solar panels can help reduce power bills while minimizing the aesthetic impact to the exterior look, and specially treated paint applied to just about any surface can act as an insulator capable of cutting energy use by 20% to 40%.

On a national scale, the days of the ever-present stucco home may even be numbered. According to a recent survey conducted by Harris Interactive, 59% of homeowners with a preference for siding would choose brick, followed distantly by vinyl with 37%, stucco with 19%, fiber cement/composite with 14% and ‘other,’ with 11%. It looks like more sophisticated and traditional exteriors – those which win awards — are here to stay.

When you have a big gathering at your house, no matter where you try to set up the food and beverages, the crowd inevitably ends up gathering in your kitchen. The problem is you may not be proud of the kitchen you have. So what do you do? There are many different ways for you to take your existing kitchen and turn it into a place that you are proud to show off to your friends.
1. Appliances: Adding new appliances is one of the easiest things you can do to change the look of your kitchen.
2. Cabinetry: You can rip apart your entire kitchen and replace all of your cabinets, OR just sand and paint existing cabinetry or change the hinges and handles for a new look.
3. Countertops and floors: If you want a completely new look or shape to your countertop, concrete has become a surface that is extremely popular. When it comes to flooring, concrete is as viable an option as wood, linoleum or tile. Concrete floors and counters not only look great but are also very durable and easy to maintain. Check out ConcreteNetwork.com to find a contractor in your area that can help in redesigning your kitchen.

Each year about 70 percent of Americans make a New Year’s resolution and most soon forget they ever made one. Time for a change? Why not resolve to give your old house a new look in the New Year? Start the new decade with a new attitude about your home’s makeover.  Here’s one you can stick to. Many home improvement projects can pay dividends and save energy. For example, in 2010, U.S. tax credits abound for energy-efficient upgrades like windows, doors, insulation, water heaters, roofing and certain appliances. (see previous posts for more detailed information.)

• Paint a room to renew it. Apply new interior paint to brighten up your home and brush away the winter blues. Hot colors for 2010 include bright or warm yellows, lavender for bedrooms and slate or charcoal grays to replace tan and beige tones as popular neutrals.
• Front and center. While you’re painting, remember the front door. A fresh coat of paint or polyurethane on a fiberglass or wood entry door can refresh the new look and luster. Consider whether the door still closes properly or if you can feel air leaks around it. If so, it’s time to replace the weather stripping or the door itself. Cheers to you and your home!

5 Home Remodeling Trends for the New Year

Remodeling and decorating trends in 2010 are likely to reflect the fact that many home owners are settling in for the long haul.

Here are some ideas for updating homes and gardens from decorators and leading real estate practitioners:

• Environmentally sensitive furniture. Natural fibers, sustainable woods, and recycled products are key to attracting environmentally concerned buyers.
• Classic neutral colors. Deep gray browns and gray blues, muted beige, and chalky white will be particularly popular shades, Pittsburgh Paints predicts.
• Backyard gardens. First Lady Michelle Obama led the way in 2009 when she installed one at the White House.
• Backyard living. Wood-deck additions offer an 80.6 percent payback, according to the annual Cost vs. Value Report from Remodeling magazine and REALTOR® magazine. Simple fire pits and outdoor fireplaces also will be popular, trend-watchers say.
• Made in America. As more people feel compelled to support local employment, U.S. manufactured products and antiques will become more popular.

Selling Your Home During the Holidays

When deciding whether to decorate or not, take the demographics of your neighbourhood into account.  If the majority of home owners in your area do not celebrate the holidays, you may want to follow their lead and not decorate your home for the festive season either.

Here are some things to take into account if you are going to decorate:

• Less is definitely more.  Combat clutter by keeping your holiday decor to a minimum and choosing classic, tasteful pieces.
• Avoid displaying holiday collections.  I happened to mention one year that I like nutcrackers.  I didn’t even own one at the time, but now, 10 years later, I would have to guess that there are close to 80 of those little fellows standing guard in my home during the holidays.  If I were selling, I’d want people to look at my home, not my collection.
• Decorations should be in good condition.  This is not the year to bring out Grandma’s tattered Santa Claus or Rudolph with the missing nose.  Let them hibernate.
• Use an artificial tree for this year.  You can place some pine boughs in a large bowl and dress it up with a few pine cones and holiday balls.  You’ll still get that real Christmas tree scent without the mess.
• Never leave tree lights on when you are not home.  If you have a showing booked, turn the lights on just before the appointment and be sure to come back right after to turn them off.
• Consider the safety of small children that may be coming through your home.  Don’t leave out small decorations that could become a choking hazard.
• If Felix the cat has a bad habit of knocking your tree down on occasion, you might want to forego putting your tree up this year.  Murphy’s Law says that Felix will do this just when potential buyers are on their way over for a showing.

One last thing: once the holidays are over, make sure you take down your decorations soon afterwards.  As well, if the listing photos were taken while your home was decorated for the season, make sure that once mid January rolls around, new photos are taken.  Buyers that see a Christmas tree in your living room while viewing your property online in March will be tipped off pretty quickly to the fact that your home has been on the market for a while.

Monday, the administration announced a nationwide campaign to push their failing Home Affordable Modification Program (HAMP) out of the HAMPer. Until now the focus has been on getting loan modifications started with a stated goal of reaching 500,000 trial modifications by November 1, 2009. Unfortunately, despite having successfully hit this goal, it is becoming increasingly clear that the program is failing, as few of these trial modifications have converted to permanent modifications. A little over half of the 650,000 borrowers who started trial loan modifications are eligible to convert to permanent modifications by the end of 2009. The administration’s announcement today is an effort to rescue the program and make sure these modifications actually do convert with a campaign to:

• Extend the trial period, to allow more borrowers to complete the paperwork.
• Develop publicly reported operational metrics, to hold servicers accountable for their performance.
• Possibly impose monetary penalties and sanctions on under-performing servicers.
• Engage HUD field-office staff and HUD-approved counseling organizations to distribute outreach tools.
• Engage the National Governors Association (NGA), National League of Cities (NLC) and National Association of Counties (NACo) in thousands of state, local, and county offices, to increase awareness of the program and assistance for borrowers.

Apparently the assumption is that borrowers aren’t completing the paperwork because it’s too complex or confusing. But what if they aren’t completing the paperwork because they’re reluctant to fall for another toxic mortgage?

High-risk, sub-prime option ARM loans contributed to this mess in the first place. To fix the problem the administration proposes to:

• Offer homeowners temporarily lower payments on loans they are unlikely to ever be able to repay.
• Force servicers to expedite applications under threat of public flogging, financial penalties and sanctions.
• Enlist private associations and government agencies at all levels to hawk the its program as being good for homeowners.

Maybe borrowers have figured out that this program is really only another exotic mortgage like one they fell prey to when they bought or refinanced the house that resulted in their current predicament. HAMP and the adminstration’s newly announced campaign isn’t digging borrowers out of a hole. It’s only digging them a new one, and delaying the inevitable.

The original hole was created with a clear downside and a theoretical upside:

• The downside: exotic financing, that qualified buyers for homes they clearly couldn’t afford by offering a low payment up front, despite unaffordably high payments in the future.
• The upside: the expectation that the appreciated value in the house will allow the borrower to refinance or sell at a profit before their payment skyrockets.

The new hole offered by HAMP is all the downside with none of the upside.

• The downside: exotic re-financing, by which they make payments affordable today, but leave homeowners in the same boat down the road when payments ratchet back up after 5 years.
• The bonus downside: there is no reasonable expectation that home values will appreciate anywhere near enough to get these loans above water before the 5 years is up, or before the homeowner runs into a real life event like job loss, divorce or job relocation – leaving them stuck in an upside down prison of debt.

What’s more, it’s not just bad for borrowers, it’s bad for everybody. Servicers and lenders simply delay their inevitable losses and suffer a lousy rate of return thanks to the artificially low payment until then. Everybody suffers as the economy limps along, as it is hard to justify a spending spree when you are upside down in your home by tens or even hundreds of thousands of dollars. Even the stealth stimulus package disappears as people make their modified mortgage payments.

The housing problem may need an intervention, but not this intervention. Like offering drugs to an addict, repeating our past mistakes by putting people back into exotic mortgages is certainly not the cure. It’s time to go through withdrawal and kick the habit by addressing the real problem, negative equity.

The global central banks have flooded the world economy with hot money for years. Why has this created massive asset bubbles rather than inflation? In the 1970s, expanding credit triggered a decade-long bout of high inflation as cheap money chased scarce goods. Why hasn’t the massive expansion of credit/hot money of the past decade caused inflation? Short answer: overcapacity.

Let’s look at a few charts to recall the enormity of the current credit bubble: the trillions of dollars of credit created, the trillions borrowed in mortgages and other credit to chase asset prices upward, the trillions created as assets like housing rose in bubblicious euphoria, and the trillions extracted from those skyrocketing assets:

Despite the trillions being created, borrowed and pumped into the economy, inflation remained benign:

With all that money flowing around, jobs were relatively plentiful, setting a floor under consumption and consumer credit:

Even as all this money chased goods, services and assets, interest rates fell, earning savers less and less return:

Meanwhile, the capacity to make stuff like steel exploded:

So here’s the dynamic which enabled low interest rates and low inflation even as credit exploded and bubbles rose in one asset class after another.

1. Massive expansion of credit was paralleled by a massive expansion of industrial capacity in China and indeed the entire world.

2. This expansion of capacity was matched by an expansion of supply in commodities. As the industrialization of China (one of the so-called BRIC nations–China, Russia, India and Brazil) and other developing nations drove demand for commodities, the incentives to exploit new sources drove up supply of almost everything: oil, iron ore, coffee, etc.

3. While prices have fluctuated in an upward bias, at no time did the cost of commodities rise to levels which threatened global growth except for the oil spike in 2008. Adjusted for inflation, oil is well within historical boundaries even at $80/barrel.

4. To feed the giant credit-dependent machine they’d fostered, central banks kept lowering interest rates and increasing liquidity/money supply. This drove the returns on savings and bonds down to absurdly low levels, forcing money managers to chase riskier assets to make a decent return on investments.

5. This need to earn higher returns drove vast floods of money into assets, inflating one bubble after another.

6. Though consumption also skyrocketed, the vast expansion of industrial capacity and commodity supplies actually outpaced rising consumption, keeping supply and demand more or less in balance and prices relatively stable.

In essence, the hot money was forced to chase assets for higher returns while China’s capacity to make goods matched and then exceeded global demand for goods.

The only way credit can drive inflation is if the supply of desired goods is limited. Many of us foresee a time when oil will be that commodity which is no longer able to match demand, but for now, the rise of production in Russia, Africa and elsewhere has kept pace with (now slackening) demand. Indeed, we might well see demand fall enough as the global recession takes hold that oil will fall to $30/barrel.

China’s capacity to produce goods now exceeds global demand. Add in the rest of the world’s enormous overcapacity and you get deflation, not inflation. In one industry after another, massive overcapacity is the stark reality. For example, the world can manufacture twice as many vehicles as there are customers for those vehicles.

The two key exceptions are grain and oil. If grain supply doesn’t match demand, and reserves have been drawn down, then prices could rise suddenly.

At some point oil supply will fall below demand, but when that point will occur is unknown.

Until either or both grain and oil fall into scarcity, then inflation in goods and services has no foundation. As long as interest rates remain near-zero, then the pressure to borrow money and chase asset prices higher remains in force.

No trend lasts forever. At some point interest rates will rise, risky assets will fall from favor and global scarcity in key resources will arise.

How long can the central banks inflate the exponentially-expanding credit bubble? No one knows, but we can say the end-point will arrive when no one wants to borrow more money even at zero interest rates.

Though the Sacramento real estate market as a whole has taken a serious hit to home prices since the peak prices of August 2005, the urban core has largely held its values and remains out of reach for many in the region looking for an urban lifestyle. Advocates of more affordable market rate housing in Downtown and Midtown have found an ally in Jeremy Drucker.

Stitch Space concept drawing from stitch-space.com

Drucker, a bay area developer who is bringing San Francisco’s housing sensibility (I say this with not even a hint of sarcasm) to the capital, began opening people’s minds to the possibilities of alley-oriented living with 9 on F, an infill project on two adjacent alley-depth lots at 14th & F in Downtown Sacramento. Made up of nine urban dwellings, 9 on F features two traditionally styled tri-level homes facing the street, four courtyard “soft loft” rowhouses, and three decidedly urban alley units tucked neatly in the rear (definitely a happier backyard discovery than the home across the street—occupied at one point by the infamous Dorothea Puente—is known for). All nine homes were crafted with sustainability in mind and several of the units include solar (the street-facing homes don’t include solar, largely because they’re directly under Downtown’s famous tree canopy—itself an energy-saving feature because of the reduced cooling costs in the summer).

Now, with one local project solidly under his belt, Drucker is pushing for infill on a smaller scale: one backyard at a time.

Background: Lots of Potential throughout Downtown & Midtown

A common lot layout for a full city block in Downtown & Midtown Sacramento

Downtown and Midtown Sacramento are laid out on a grid of number and letter streets with predictable building numbering. For instance, a house on the 1800 block of Q Street would be on Q between 18th and 19th Streets. Similarly, a number street house’s location can be determined by associating the house number (in hundreds) to the corresponding letter’s numeric position in the alphabet. A house on the 400 block of 23rd Street would be between D and E Streets. This pattern goes beyond the central city but is less consistent south of Broadway and east of 30th Street.

This predictability extends to lots and lot sizes with the most common configuration on any given block being four alley-depth 40-foot by 160-foot lots in the middle of each letter-facing side of the block with four half-size 40-foot by 80-foot lots serving as the bookends, usually with four of these smaller lots facing each direction. This pattern is clearly illustrated here. (note: you’ll need to view the map in regular Map view, not Satellite view).

Falling out of love with suburbia

Homes in Sacramento’s central city aren’t cheap. Decades after a mass exodus from Downtown neighborhoods in the ’50s and ’60s (one that was mirrored in other cities throughout the country as the car became king) a small segment of the population, perhaps disaffected with suburban living and seeing weathered old Victorian era homes (quite affordable at the time because of their condition and the fact that downtowns had fallen out of favor with home buyers) as diamonds in the rough, began returning to what were still considered rough neighborhoods well into the ’90s.

A funny thing happens when enough people decide to change a neighborhood—it begins to change.

By the mid-’90s Midtown had become a Place Where People Want to Be. Restaurants began opening in buildings that had sat empty for decades. Within two decades Midtown was flourishing again as aging hippies, state government employees, young professionals, and bay area city-dwellers converged on an area approximately two square miles in size. While rents remained affordable, ownership opportunities rapidly slipped through the fingers of even moderate income-earners. Midtown had become hip and unaffordable.

YIMBYism

With vacant land in core neighborhoods at a premium and continued demand for new housing without compromising the character and feel of Sacramento’s old city, the urban core became ripe for infill even as the real estate market peaked and then softened. Rather than make the best neighborhoods in Downtown and Midtown more affordable, the declining real estate market widened the gap between these neighborhoods and the near suburbs.

A possible solution is being explored on a backyard scale.

Drucker and others see potential infill housing occupying the underutilized rear alley-facing portions of “full size” lots throughout the central city. These housing units could serve as a middle ground between aging but affordable studio and one-bedroom condos and the much more desirable (and expensive) street-facing Craftsman bungalows, Delta Highwaters, and Victorian-era homes.

The “Stitch” concept

Drucker is partnering with individual property owners with 160-foot lots, many of which already have flexible zoning that allows for additional housing units to be built within density guidelines. The idea is to add multiple attached housing units ranging in style from classic to contemporary to the rear half of these deep lots. By partnering with existing property owners, the cost of acquiring land is minimized and a profit-sharing model is used that splits proceeds from (or ownership interest in) the units built in this manner between the developer and the property owner.

One such site has cleared planning hurdles. Scheduled to open in May, a pilot project behind a property on the 1700 block of Capitol Avenue will serve as models to assist in pre-selling other units to be built on similar lots in other parts of the central city.

Drucker has partnered on this project with noted local architect Ron Vrilakas who is known for his design work in Midtown and surrounding neighborhoods on projects like 1801 L, the East End Lofts, 18th & Capitol, and the 4th Avenue Lofts.

For more information…

Jeremy Drucker & Stitch Development LLC
Tel (415) 335-3674
www.stitch-space.com

Ron Vrilakas & Vrilakas Architects
1221 18th Street
Tel (916) 441-4685
www.vrilakasarchitects.com

Rob McQuade & McMartin Realty
2031 K Street
Tel (916) 444-7577
www.forsaleinmidtown.com