Lenders, community leaders analyze new economy for housing
GLENWOOD SPRINGS, Colorado – In today’s economy, developers, real estate brokers and buyers all face a similar dilemma: financing. Financing for that next project or new home is increasingly hard to come by, especially for multifamily housing and mixed-use development. On Jan. 25, a group of local officials, lenders, planners, housing experts, developers and brokers, as well as staff representing U.S. Sen. Michael Bennet and Third District Congressman Scott Tipton, convened to discuss lending challenges that have escalated in the recession.The Sonoran Institute, the Glenwood Springs Association of Realtors and the Garfield County Housing Authority hosted the real estate financing and economic development workshop, held at the Glenwood Springs Community Center, to heighten awareness of these challenges and their impact on economic development efforts. To recall, when the bubble burst in 2007, the nation’s housing market spun into a precipitous decline, devastating the investments of millions of Americans. Garfield County alone has seen some 1,800 foreclosures since 2009. Not surprisingly, lending regulations and practices tightened after the bust. Today, many think the system has become so onerous that changes are needed in order to ensure home ownership and new construction restarts.At the workshop, Carolyn Meadowcroft of Vectra Bank explained common lending challenges and their impact on development and resale financing, particularly for condominiums. She compared the rules to a pendulum that swung from overly lenient in the pre-2007 build-up of the housing bubble to excessively cumbersome after its burst. “It probably needs to tilt back towards the middle now,” said Meadowcroft. Andrew Knudtsen, an economist and housing expert with Economic & Planning Systems, described changing housing market trends, including growing demand in some markets for development that provides what he called a “sense of place.” He said this product usually includes a multifamily or mixed use component and has amenities such as trails and transit nearby.”The challenges related to lending are not unique to Garfield County,” said Knudtsen, “but they are issues that can be addressed. There are solutions.” Knudtsen discussed lessons from a variety of development projects that have successfully responded to today’s complex financing and market environment, including examples of public/private funding partnerships.Bill Kane, Basalt town manager, highlighted the local implications of a national challenge, and discussed Basalt’s efforts to work with developers and other partners to make projects that fit the town’s vision pencil out despite the recession. Kane called it a paradigm shift that responds to today’s realities and described how it applied to three recent projects, including the Basalt Community Campus, the Aspen Valley Medical Foundation and resurrecting Willits Town Center.The workshop concluded with a speaker panel that also included Gavin Brooke, of Land + Shelter and chair of the Garfield County Housing Authority, and John Wendt, president of the Glenwood Springs Association of Realtors. Panelists discussed the local market in greater detail as well as perspectives on ways to ease financing challenges on multi-family and mixed-use development from both a federal and local approach. Potential solutions ranged from altering how homeowners associations and appraisers work, to modifying lending standards, to letting the current cycle run its course. The presentations given at the workshop are available for download at the Sonoran Institute’s website, http://www.sonoraninstitute.org or by emailing Jillian Sutherland at jsutherland@ sonoraninstitute.org.
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