Sunday, June 29, 2014

Green Building Takes on Climate Change

In late 2013, a trio of business leaders including Michael Bloomberg, Hank Paulson and investment fund billionaire Tom Steyer teamed up to found the Risky Business Project with a simple mandate:  Determine the potential consequences for the U.S. economy without significant changes in the way we consume and deploy natural resources.

To achieve this goal, the group hired The Rhodium Group to provide an independent analysis of the economic risks from a changing climate.  In June 2014, the Risky Business Project released their first report from Rhodium’s analysis entitled “The Economic Risks of Climate Change to the United States.”

The report is quite sobering, and few industries will be impacted by these changes as much as home building, even though housing reportedly accounts for just 18 percent of greenhouse gas (GHG) emissions. Yet there is still plenty of hope, as the most severe risks can still be avoided by early investments in resilience and immediate action to reduce the emissions which have been found to increase global warming.

In terms of geography, the Risky Business report concludes that the two main impacts of climate change – extreme heat and a rise in sea levels – will likely affect certain regions of the country more than others.

In the states along the Gulf Coast and in the Northeast and Southeast, higher sea levels and stronger storm surges could lead to increasing property losses by 2030 which could total as much as $35 billion each year. For states in the Midwest and Southwest, a larger number of high-temperature days could threaten human health, reduce labor productivity (especially for those working outside in land development and home building) and strain already aging electrical grids.

Yet there will be some areas which will benefit from a warmer climate, such as northern latitude states including North Dakota and Montana. With higher winter temperatures, both frost events and cold-related deaths will decline while the growing season for certain crops will lengthen.

So just what can the building industry do to be resilient and protect its own interests while continuing to house a growing population?

Several years ago, the NAHB conducted its own research into the effects of housing and homebuilding on GHG emissions using data from the Department of Energy, the Census Bureau and other agencies. Similar to the Risky Business Project, the association hired its own researchers and economists to review existing data on density, land-use patterns and vehicle usage.

What they concluded was that given the complexity of building communities, caution is strongly recommended as choices are made about the future due primarily to the law of unintended consequences. Solutions that may seem simple on the surface are actually much more complex, and would involve various trade-offs that could create new problems to solve.

For example, increasing building density alone was shown to have minimal impacts on vehicle miles traveled (VMT) unless it was also paired with providing access to regional transportation centers. In addition, there are also the issues of consumer choice and housing durability which provide a huge reality check: Even if the combination of higher densities, land-use diversity and access to transit was maximized to reduce potential VMTs by 25 to 30 percent, those gains would be slow to achieve given the existing housing stock of 133 million units, up to 60 percent of which are still located in mostly car-dependent suburbs.

As a consequence, the nation’s builders and developers can’t solve this problem alone: they also need cooperation from residents who vote with both their ballots and wallets, and that’s where an “insurance policy” argument could assist.

Back in the late 1980s, when Risky Business Risk Committee member George Shultz was President Reagan’s Secretary of State, he urged Reagan to take action on the scientific controversy of that period: the shrinking ozone layer which protects terrestrial life from harmful solar radiation.

Rather than take a confrontational tone, Shultz’s team instead suggested a type of ‘insurance policy’ in the event that the science was correct. That policy, formally known as the Montreal Protocol on Substances that Deplete the Ozone Layer, was hailed by former U.N. Secretary General Kofi Annan as "perhaps the single most successful international agreement to date.”Eventually ratified by 197 countries, if the international agreement remains in place, the ozone layer is expected to recover by 2050.

While addressing the ozone layer is arguably much easier than general climate change, convincing various parties to cooperate rather than confront is perhaps our best hope for a sustainable planet.

Tuesday, June 24, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/24/14

Please click here to see the edition of BuilderBytes for 6/24/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Existing home sales rebounded strongly in May
  • Philadelphia Fed's Business Outlook Survey shows notable improvement for future activity in June
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, June 20, 2014

June column for Builder & Developer magazine now online

My column for the June 2014 issue of Builder and Developer magazine is now posted online.

For this issue, entitled "The Changing Face of Retail Forces Developers to Adapt," I wanted to revisit mixed-use communities (especially residential/retail) and how developers are having to adapt to the changes in the way that retailers serve their customers. An excerpt:

Today, many retailers are reducing their footprints, boosting their online presence and merchandising fewer products in their stores to avoid “showrooming,” in which customers compare products in person but buy them online. As a result, the future of the mixed-use project is also in flux, with the winners and losers likely to be determined based mostly on how well developers match retail stores with local and visitor demographics...
In the short run, businesses which can’t be replaced by online shopping – such as health clubs, yoga studios, doctor’s offices and restaurants – can take up some the slack, but in the long run the very idea of the traditional retail store is being challenged.
Not surprisingly, these changes are also impacting the types of smaller, mixed-use projects encouraged by cities, but often leave absorption of the retail space to the whims of the market as well as the marketing expertise of the local broker. So far, there seem to be two ways to goose retail demand: appeal to specific demographics or create an in-person experience unavailable online...
To read the entire column, click here.

To read the entire June 2014 issue in digital format, click here.

BuilderBytes' MetroIntelligence Economic Update for 6/20/14


Please click here to see the edition of BuilderBytes for 6/20/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Initial unemployment claims fall by 6,000 in latest report
  • Mortgage applications decline by 9.2 percent in latest survey as rates rise slightly
  • Federal Reserve continues tapering QEIII, keeps interest rates at historic lows
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, June 19, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/19/14

Please click here to see the edition of BuilderBytes for 6/19/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder sentiment rebounds to 49 in June
  • May housing starts dip from April but still up 9.4 percent year-over-year
  • May building permits dip modestly from both previous month and year-over-year
  • CPI rose 0.4 percent in May, up 2.1 percent over previous 12 months
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, June 17, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/17/14


Please click here to see the edition of BuilderBytes for 6/17/14 on the Web.


In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder confidence rises four points in June to 49
  • Consumer sentiment dips in June but still at favorable levels
  • Producer Price Index dipped in May but still up 2.0 percent over previous 12 months
  • Industrial production increased more than expected in May
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, June 13, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/13/14


Please click here to see the edition of BuilderBytes for 6/13/14 on the Web.


In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Employment grew by 217,000 Jobs in May; Unemployment rate at 6.3 Percent
  • Consumer Credit use rose in April at the Highest rate since November 2007
  • Wholesale Inventories rose more than Expected Again in April
  • Retail Sales rose slower than expected in May
  • Mortgage Applications rise by 10.3 Percent in Latest Survey
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, June 6, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/6/14


Please click here to see the edition of BuilderBytes for 6/6/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Initial unemployment claims dip by 8,000 in latest report
  • Mortgage loan applications fall by 3.1 percent in latest survey
  • Job cuts rose in May, due most to computer sector 
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, June 5, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/5/14

Please click here to see the edition of BuilderBytes for 6/5/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Personal income grew in April as personal spending dipped
  • Chicago PMI rises sharply as demand rebounds
  • Manufacturing sector grew in May but supply of materials tightening
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, June 3, 2014

BuilderBytes' MetroIntelligence Economic Update for 6/3/14

Please click here to see the edition of BuilderBytes for 6/3/14 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Personal income grew in April as personal spending dips
  • Chicago PMI rises sharply in April as demand rebounds
  • Manufacturing sector economy grew in May but supply of materials tightening
  • May dip in consumer confidence mostly due to the harsh winter 
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.