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Real estate brokers across city urge stop to Invest Medicine Hat contract decision – CHAT News Today

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Frank Devine, president of the Medicine Hat Real Estate Board says there was not sufficient time for other companies to submit a bid.

“ By the time the brokerages of Medicine Hat found out about it they didn’t have enough time to actually put something together. They also didn’t have enough information on what they wanted on the RFP to put something coherent together to get to city hall,” Devine said.

Devine is urging the city to be more transparent in the process . He also believes realtors in the city are more than capable of doing the work. Over the past four years, Devine said real estate agents have done over $1.3 billion in sales, far more, he said than Invest Medicine Hat since its inception.

“ Realtors in Medcine Hat have the knowledge, the experience and they have the infrastructure to market anything that the city has to offer, and we have been doing it for years. Now they are trying to close us out of the process which makes no sense to us,” Devine said.

Devine argues local realtors would also carry additional benefits, than what is currently used and proposed, because the expense, and pitfalls, won’t be carried on the backs of taxpayers. That’s because realtors work strictly off commission.

“ Basically Invest Medicine Hat lost almost a million dollars last year. If you are dealing with real estate companies in Medicine Hat you don’t lose anything. You only pay if the job gets done. It doesn’t cost the citizens of Medicine Hat a nickel, unless there is some productive gain for the city out of it,” Devine stated, noting Invest Medicine Hat employees get paid whether they sell or anything or not.

Going forward, Devine said he would like to see city council put the brakes on the proposal, and get more interest from other parties. He also said more clarity needs to come forward with what they are asking and The Medicine Hat Real Estate board is more than willing to work together for the sake of the city.

“ This is our city, this is our community, this is where we live. Obviously, we want to make it better for everyone that lives here,” Devine said.

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City incentives, 'red-hot' real estate market fuel action on brownfields – Windsor Star

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A city program created in 2010 to entice investors to build on contaminated old industrial sites has been blazingly successful in the last 18 months.

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In its first six years, uptake on the Brownfield Redevelopment Community Improvement Plan was tepid — just four approvals for grants to help investigate possible contamination and tax breaks to compensate for the considerable costs of cleanup. Things sped up in the next four years with 23 approvals. And since January 2020, interest has kicked into high gear with 15 approvals. The increased interest has been driven by the attractiveness of the incentives and the red-hot demand for housing, says Greg Atkinson, a senior City of Windsor planner who has administered the program since its inception.

“When I put the numbers together I was quite impressed,” he said Wednesday, referring to a recent report on the program’s success and suggested tweaks. Normally, such a review happens after five years but there wasn’t enough data available due to the low initial uptake.

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“We’ve got that now,” said Atkinson, referring to the 42 total approvals — most of which happened in the last few years — to spur new projects on these usually vacant properties contaminated by years of use as factories, dry cleaners, fuel depots, landfills and gas stations.

City council has so far approved $13.2 million in incentives to drive redevelopment of derelict old properties. The result is private sector investment to the tune of $182.7 million and a rise in the assessed value of the properties totaling $216.2 million.

“Just doing quick math, it’s close to $14 in private investment for every public dollar in incentives,” Atkinson said. “So value for money, this community improvement plan (one of several created by the city in recent years) is really performing well.”

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Greg Atkinson, a City of Windsor senior planner, stands by a vacant brownfield site on Riverside Drive in April 2016. Since January 2020 there have been 15 applications to the Brownfield Redevelopment Community Improvement Plan.
Greg Atkinson, a City of Windsor senior planner, stands by a vacant brownfield site on Riverside Drive in April 2016. Since January 2020 there have been 15 applications to the Brownfield Redevelopment Community Improvement Plan. Photo by Tyler Brownbridge /Windsor Star

A study conducted in 2009 identified 137 brownfield properties on 559 acres that had sat unused for many years. “Historically, there has been little interest in redeveloping brownfield sites due to the uncertainty surrounding the extent of contamination and the potential cost of cleanup,” Atkinson’s report said.

Mayor Drew Dilkens said the CIP was designed to change that.

“With the combination of the program and a hot real estate market, we’re seeing a lot of action,” he said, explaining that developers are looking everywhere — including these brownfields — for places to build.

“Having this program … is really instrumental in seeing some of the more difficult land activated in an improved way.”

The first application was approved back in 2012, for redevelopment of a long-abandoned gas station at Dougall Avenue and West Grand Boulevard. Andre and Hoda Abouasli used the grants available to help clean up contamination before building an attractive commercial building. The project served as a visible example of what the CIP can do to transform eyesores throughout the city, Atkinson said.

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The projects since have ranged from modest to major. The biggest by far was for up to $12.5 million in incentives to help with the cleanup of the former GM Trim plant on Lauzon Road so that Farhi Holdings could proceed with a massive $250-million residential development that’s one of the biggest in the city’s history. A cleanup costing $6.5 million to remove contaminated soil and remove the footings and concrete from the former building cleared the way for the project, which is well underway.

Other big projects approved recently approved include: $3 million in incentives for the 123-unit Graffiti residential/commercial project at 1200 University Avenue West; $457,700 for an 81-unit apartment project on Argyle Road, formerly the site of a pharmaceutical plant destroyed in a 2018 fire; and $579,185 for a project to build a 24-unit residential building at 840 Wyandotte St. E., formerly a commercial building destroyed in a 2016 fire.

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And in June, a committee of council endorsed a CIP application to help with the $81,600 cleanup of an 11-acre former industrial site bounded by Walker Road, Edna Street, St. Luke Road and Richmond Street. The owner, the Sood family, has a plan to build three five-storey towers with 62 units each, plus 90 two-storey townhouses. It’s a development that Atkinson believes will help link up Walkerville and Ford City, which for decades have been separated by industrial wasteland.

The CIP provides grants for 50 per cent of the cost of studies to see how feasible it is to redevelop a brownfield and study what it would cost to clean it up. Those are cheques the city writes in the range of $7,500 to $25,000. The CIP can also reduce development charges by 60 per cent. But the biggest incentives by far are the Brownfields Property Tax Assistance and Brownfield Rehabilitation Grant
programs, which provide annual grants to offset either 70 or 100 per cent of the tax increases that occur after a brownfield site is redeveloped into something more valuable, like an apartment building. The grants are paid out for 10 or 13 years and can end up saving developers many thousands of dollars — after the projects are built.

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  1. Developer Anuj Sood talks about progress made to rental units on Walker Road in Walkerville, on Wednesday, June 16, 2021.

    As Walker Road townhouses near completion, Soods plan transformation of industrial wasteland

  2. Farhi Holding Corporation drawing for 1600 Lauzon Road.

    ‘Massive’ 543-home project starts this fall at former GM Trim site

“The whole premise is the city is not collecting a lot of tax revenue, in some cases almost nothing, from these properties that are negatively impacting their neighbourhoods,” said Atkinson. “So forgoing some of that tax revenue, over a 10-year grant period, is a low price to pay for a redevelopment where you might get 50 dwelling units where you had vacant land before.”

If all 42 of the approvals proceed, the result will be 962 new dwelling units on 119.2 acres of brownfields. Based on a metric from a 2003 national round table, that would prevent 512 acres of greenfield from being developed, according to Atkinson’s report. In addition, the spinoff effect of $182.7 million in private investment is $694 million invested into the economy.

bcross@postmedia.com

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Billionaires Blow Pandemic Cash On Real Estate Shopping Spree – Forbes

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Over the past year billionaire wealth has reached record highs. Now comes the real estate boom as they blow their newly-earned cash on $10 million-plus properties.

So far this year, 785 properties worth more than $10 million have been sold in New York, Los Angeles, Hong Kong, London, Sydney, Singapore and Dubai. Knight Frank, a real estate consultancy, estimates that figure is more than double last year’s and up 52% on 2019’s.

In total, wealthy buyers around the world spent $13.8 billion on homes valued in excess of $10 million during the first six months of this year. “We expect super-prime sales to end 2021 on a high,” comments Liam Bailey, global head of research at Knight Frank.

New York has seen the biggest increase in the super-prime category, with 202 sales above $10 million this year. The city has just clocked its most expensive property listing ever: A penthouse at 432 Park Avenue valued at $169 million.

The penthouse might just sell for its asking price: Already there have been 220 penthouses sold in Manhattan this year, according to Corcoran market research. A separate report from Douglas Elliman and Miller Samuel shows the median price for Manhattan apartments hit $999,000 in the second quarter of this year, a new record.

After New York, Los Angeles has seen the biggest increase in super-prime sales. Transactions of $10 million-plus properties this year are three times higher than the same period last year, which Paddy Dring, global head of prime sales at Knight Frank, says is down to “lifestyle advantages, such as beaches and green space.”

But there is more to this real estate boom than lifestyle needs. The rich have amassed a record amount of wealth in the past year, and, with Covid-19 restrictions easing, they are desperately seeking somewhere to put it.

During the first 12-months of the Covid-19 pandemic, wealth hit record highs. By October 2020, billionaire wealth surpassed $10 trillion for the first time ever. Forbes’ list of billionaires, now at 2,755 individuals, grew their wealth from $8 trillion in 2020 to $13.1 trillion this year.

And it’s not just billionaires: Last month the world’s total net wealth hit $431 trillion, with over a quarter of it controlled by millionaires.

But with inflation around the corner, these billionaires and millionaires are now looking for somewhere to invest this new found wealth. Half of the investors surveyed by UBS in the second quarter believe inflation will accelerate over the next 12 months, and a third of them are planning to invest more in real estate to circumvent it from eroding their wealth.

Doubts over the future of the office are making residential real estate increasingly attractive for investors with cash to burn. There will always be a need for quality housing in New York, Los Angeles, Hong Kong, London, Sydney, Singapore, and Dubai.

But whether the wealthy will follow their money and return to these cities with their newly purchased apartments is still unknown.

By July last year, nearly half of wealthy individuals around the world had fled cities for good. Expats from Singapore and Dubai returned home and brought properties in the suburbs or rural areas. Alongside record $10 million-plus properties, countryside markets have reached record highs this year.

One billionaire, speaking over Zoom from an English vineyard he purchased just before the pandemic, says there is “not a hope” he will return to London full time. And yet he is still eyeing up real estate investments in the capital. Sales of $10 million-plus homes in London are up 10% on last year.

Buying prime property is a “tried and tested” way to ward off inflation, he says. But it is also a vote of confidence that, one day, these cities will again thrive.

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What Would Equitable Real Estate Finance Look Like? – Non Profit News – Nonprofit Quarterly

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The Art of RE-Membering How to Be Human,” Lola Audu

“Real estate is a defining issue of America,” noted Avery Ebron, who directs operations at The Guild in Atlanta. Ebron made those remarks at a press briefing last month at the release of the Inclusive Capital Collective (ICC)’s first “black paper,” titled Building Community Wealth: Shifting Power and Capital in Real Estate Finance. Ebron coauthors that paper, along with The Guild’s CEO, Nikishka Iyengar, and Chicago Trend CEO Lyneir Richardson. The report provides an important framework for not only identifying how structural racism disadvantages real estate development by and for BIPOC communities, but also identifying specific changes that could greatly reduce those barriers.

ICC defines itself as a “growing network of community fund managers and entrepreneur support organizations who have been designing and developing shared technical and financial infrastructure for aggregating and deploying financial capital and other resources to entrepreneurs and communities of color in the US.” Founded in the fall of 2019 at a gathering in Denver, the group is being incubated by Zebras Unite Cooperative, which formed in 2015 and seeks to promote capital access for socially minded businesses, especially businesses owned by women and people of color.

Often, discussion of real estate focuses on residential property and the gap between Black and white rates of homeownership. Here, however, the focus is less on residential real estate and more about the actual business of real estate development. As Amanda Abrams wrote in the New York Times earlier this year, “Commercial real estate remains a field in which the vast majority of developers are white.” Abrams noted that a 2013 industry survey found that only 4.4 percent of commercial real estate professionals were Black. A more recent 2020 survey from the Urban Land Institute finds that only five percent of its members were Black, while 82 percent were white.

In their paper, the authors note that, “Current community development practices and institutions tend to focus on outputs (notably affordable housing units) over outcomes that create structural change.” In their report, Iyengar and her coauthors contend that a commercial real estate industry in which Black and other real estate entrepreneurs of color played a larger role would not simply be more diverse and inclusive but would place the goal of community wealth building at its center. A “community centered” real estate market would, according to the authors:

  • Prioritize affordable operating space for local BIPOC-owned business
  • Be more democratic and involve community organizers, small business owners, and residents in the development process
  • Focus on providing space for key community goods, such as groceries and community meeting space
  • Use infill development to support affordable rental and homeownership that stabilizes existing BIPOC neighborhoods
  • Create opportunities for Black, Indigenous, and other residents of color to have an ownership interest in commercial real estate
  • Better link residents and businesses to public resources such as technical assistance, financial literacy programming, and business grants

Redesigning Real Estate for Equity

An important contribution of the report is that it provides a thoughtful list of both obstacles to equitable real estate development and potential solutions. As Joe Neri, CEO of IFF, a leading Chicago-based community development financial institution (CDFI), has explained, one of the many ways structural racism impacts real estate is that appraisals in BIPOC neighborhoods are lower than in white neighborhoods, making it harder to finance projects (since loans max out at a percentage of appraised value), requiring a developer to raise more cash.

As Neri put it, “Old government-sanctioned bank regulations drove down the property/land value for decades, and now current bank regulations prevent investment in those areas where appraised-values are low.” Building on Neri, the ICC report calls for “income-based lending” (i.e., lending based on a percentage of income the project is expected to generate), which is forward-looking, rather than appraisals, which bake in past discrimination.

The authors describe specific loan products that could bring down the cost of financing for BIPOC real estate developers. This includes “patient equity,” which the report authors define as having long time horizons (e.g., 10 years), low interest rates (zero to five percent), and provisions that protect development projects from early costs (such as having interest-only payments for the first 12 to 24 months of the loan). Foundations, the authors indicate, would be the likely providers of such financing, and this funding might be five percent of the project’s value. Another 20 percent of the financing structure could be “friendly debt,” such as low-interest loans from CDFIs. The remaining 75 percent could be standard bank loans. In other words, while the need for philanthropic support is clear, the report also shows how limited philanthropic dollars can leverage more standard commercial financing.

The authors also describe additional steps to overcome barriers—for example, easier access to lines of credit, reduction of zoning restrictions, loan guarantees (perhaps provided by CDFIs or foundations) to reduce interest costs, and partnerships with public land banks to help BIPOC real estate developers obtain low-cost land.

In the report’s conclusion, the authors note that “there are an abundance of Black developers creating equitable and contextualized real estate solutions for their communities—transforming the way real estate development is done and turning it into a vector for wealth creations for all Americans.” In the report’s appendices, the authors document this through case studies of BIPOC-led real estate ventures in four cities—Philadelphia, Chicago, Atlanta, and Florida’s Fort Myers.

At the report launch, Kevin Williams, a member of the Black Squirrel Collective in Philadelphia, spoke to the urgency of the work. “You see a lot of studies and research being done about the plight of minorities in America,” Williams observed. “But you don’t see any follow-up. Somebody writes a paper and says Black people are poor. Yeah, we know that. But has anyone done a follow-up to see what has been done to address that problem?… We need to continue to be vocal…and we have to continue to drive the point that equity has to occur.”

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