L.A. Economic Forecast Conference Coming Up: June 21, 2011

Please join us on June 21st, 2011 at the Bonaventure Hotel in downtown Los Angeles!

Special discount available through MetroIntelligence- click here.

MetroIntelligence Real Estate Advisors, Beacon Economics and the Graziadio School of Business and Management at Pepperdine University invite you to join us at What's Next LA? Entrepreneurialism and California's Competitive Future. This year's event delivers a stellar line-up of leading economic and business thinkers including the following:

• Christopher Thornberg, Founding Partner, Beacon Economics
• Brad Kemp, Director of Regional Research, Beacon Economics
• Linda Livingstone (emcee), Dean, Pepperdine University Graziadio School of Business and Management
• Randy Churchill, Director - Emerging Company Services, PriceWaterhouseCoopers
• Christos Costakos, Former Chairman & CEO, E*Trade Group, Inc.
• Alexander Haislip, Financial Journalist and Author
• Scott Lenet, Managing Director - Los Angeles, DFJ Frontier

Attendees will hear a new outlook for the U.S., California, and Los Angeles economies, delivered by some of the state's most reputable forecasters, and revealing insights into the direction the economy will take in the near and long-term future. Some questions addressed will include the following:

• Is California going to stumble or stride down the road toward economic recovery in 2011 and 2012?
• How high do oil prices have to rise to significantly affect the economy?
• How will the housing market's battle with distressed properties affect home sales and prices in California and the nation over the next few years?
• Inflation? Hyperinflation? Deflation? Why are experts all over the map?
• Are the conditions for business success still in place in California today?
• What are the greatest barriers to California’s existing businesses? To entrepreneurialism?

The program will also cover one of the most pressing and hotly debated topics in the state: entrepreneurialism and California's competitive future. Charges of a hostile business climate in the Golden State have exploded in intensity since the downturn began in 2007. We have invited an exceptional line-up of experts from the worlds of venture capital, technology start-ups, banking, and journalism to debate critical questions that go to the heart of California's future success.

Conference attendees will receive the following:

• 2011 Los Angeles Economic Forecast Book - a data-packed analysis of the region's economic indicators
• Sections on residential and commercial real estate authored by MetroIntelligence Principal Patrick Duffy
  
• Quarterly updates to the forecast for one full year
• Chance to interact with forecasters and speakers
• Prime networking opportunity
• Breakfast buffet
• Hosted self-parking

Special discount available through MetroIntelligence- click here to register.

May column for Builder & Developer magazine now online

My column for the May 2011 issue of Builder & Developer magazine is now online. For this issue, entitled "A New Dawn For Solar Energy" I discuss how the combination of higher oil prices, falling prices for solar power technology and tax incentives are encouraging more builders to offer these systems in order to separate themselves from the existing housing stock.

From the column:

Although it’s difficult to find anything positive in the likelihood of higher oil prices for the foreseeable future, one silver lining is that it makes renewable energy much more competitive. For the homebuilding industry specifically, a combination of lower prices, constantly improving technology and financial incentives, including tax credits and lease programs, are allowing builders to bolster their own solar power initiatives while also better separating themselves from older (and often discounted) resales...

To read the entire column, click here.

To read the entire May 2011 issue in digital format, click here.

Reforming Housing Market Research

The building industry largely missed the signs of the housing bubble, ignored its profound consequences, and adjusted too late. What went wrong? How can it be fixed? And, going forward, how can we develop a more objective and comprehensive framework of market-based due diligence?

The first question is easy to answer: blinded by one of the greatest housing booms in history, homebuilders and developers enlisted compliant market research consultants to massage and parse data in support of assumptions that had little basis in reality. I distinctly remember reading a market study a few years ago that proclaimed new construction was able to command a 50% premium over the existing resale stock in a popular, high-income suburb of Los Angeles. And just what was this premium based on? Because they said so!

Not surprisingly, the urban division of that homebuilder was among the first to fail. In its wake, it left the partially finished shell of a large project in the middle of a dense (and formerly gentrifying) neighborhood, thus also punishing thousands of neighbors for its internal myopia. It’s hard to imagine worse PR for the building industry than that.

So how can this be fixed? Hopefully, the industry’s own role in helping to destabilize the global economy by over-building for false demand will never be repeated, but these boom-and-bust cycles do have a tendency to repeat themselves, in large part because solid, objective data is often difficult to obtain.

For example, state-mandated affordable housing study guidelines require consultants to use demographic estimates from private companies such as ESRI or Claritas that, at least for now, can be based on Census data that’s over 10 years old. So, if the mathematical models used by Wall Street firms to gauge risk on mortgage-backed securities failed so spectacularly, why should we assume the forecast models used by demographers are any different?

Although these companies will soon be updating their databases as more findings from the 2010 Census are released, for each year that passes, the data only becomes more stale. Moreover, the changing demographics of the country’s population – which is now projected by the United Nations to grow from 310 million to 400 million in 2050 and nearly 480 million by 2100, will require the building industry to better match supply with demand. To be sure, population growth of two million per year is exciting, but the winners will excel only by ensuring that they’re building for the right buyer (or renter) in the right locations.

Fortunately, soft markets can be the best time to try out new strategies, and formulating a new framework for due diligence is becoming a crucial topic of discussion for builders, developers and investors. At the 2011 PCBC taking place in San Francisco next month, two different panels on which I will be participating -- and moderated by G.U. Krueger of HousingEcon.com -- will focus on reforming how housing market research is conducted, analyzed and distributed.

Split among two different days, the Consumer Insights panel will focus on today’s homebuyer, including those investors buying foreclosures or REOs and the impact of shadow supply. It will also ask how to best quantify the behavior of groups such as Baby Boomers or Millennials, and how they’re reacting – often in different ways – to being surrounded by an increasingly diverse population. The next day, the Innovation Strategy forum will review market research techniques which haven’t worked (such as faulty pent-up demand assumptions), the difference between cyclical and non-cyclical factors, and new tools that we are now using to better gauge housing demand based on job growth.

To be sure, history may repeat itself, but we can at least seek to moderate the damage.

For more information on these panels, the 2011 PCBC or to register, visit www.pcbc.com.

April 2011 column for Builder & Developer magazine now online

My column for the April 2011 issue of Builder & Developer magazine is now online. For this issue, entitled "A New Era for Home Finance: The Building Industry Can Either Lead or Follow," I wanted to touch on the very important subject of the national debt and the potential impact on home mortgages and the tax deduction for mortgage interest.

From the column:

As I sit here writing this column, the U.S. national debt is climbing past $14.25 trillion, or an average of nearly $46,000 for each citizen. Each day, that national debt rises by about $4.1 billion, as 40 percent of the 2011 federal budget is made up of borrowed money. Of the Obama administration’s proposed $3.7 trillion budget for 2012, 30 percent will go to Medicare and Medicaid, 22 percent will pay for Social Security benefits, 19 percent will go for defense-related programs and nearly 13 percent, or $474 billion, will be used to service the existing debt. So just what does that have to do with mortgage finance? Everything...

To read the entire column, click here.

To read the entire April 2011 issue in digital format, click here.

A New Dawn for Solar Energy?

Although it’s difficult to find anything positive in the likelihood of higher oil prices for the foreseeable future, one silver lining is that it makes renewable energy much more competitive. For the home building industry specifically, a combination of lower prices, constantly improving technology and financial incentives including tax credits and lease programs are allowing builders to bolster their own solar power initiatives while also better separating themselves from older (and often discounted) resales.

The idea for offering solar energy in new homes is certainly nothing new: when I founded a Technology Task Force for the BIA of Southern California ten years ago, private builders such as Shea Homes were already test-marketing them as options in certain markets. By 2008, Shea decided to make solar power systems a standard feature just as federal tax credits were becoming more robust. And this year, after also previously offering solar systems as add-on options, KBHome took the plunge, offering basic solar power systems as standard features along with more robust system upgrades.

For large builders which enjoy economies of scale, they can offer solar systems for a fraction of the retail price which buyers could obtain on their own. For example, if buyers of a KBHome want to upgrade from the standard $7,500 system (which is estimated to cut electricity bills by an average of 30%) to the highest upgrade (which could cut them to nearly zero), buyers would pay $5,000 versus the $15,000 retail cost elsewhere.

For smaller builders not quite ready to offer solar systems as standard features, there are several options available to entice buyers to buy them as an upgrade. Besides federal tax credits of up to 30% of the system’s cost, Energy Efficient Mortgages (also known as ‘green mortgages’) offered by Fannie Mae, FHA and the VA allow borrowers to roll the cost of energy-saving upgrades into their mortgages. Even better, they can allow underwriters to count the estimated monthly savings as extra income, which for strapped buyers can mean qualifying for a higher loan amount.

Of course major solar companies such as SunPower and SolarCity also offer their own financing with interest rates ranging from 5% to 8% depending on the term (generally 5 to 20 years) and no pre-payment penalties. More recently, however, the industry has been promoting leases for these systems, which work a lot like leases for new cars with advantages such as low or no down payments, lower monthly payments (which are often less than the monthly savings in utility bills) and end-of-term options such as a renewing the lease, buying it outright or returning it to the company.

Still, for now the industry remains largely reliant on federal and local incentives, which is why California-based SolarCity is only expanding into states which offer them. Their hope is that once they create larger economies of scale, the costs of the systems will be low enough to be competitive without any incentives at all.

At the same time, improvements in technology will also do their part. According to Bloomberg New Energy Finance, the installation of solar systems worldwide will almost double by 2013, while manufacturing capacity has almost quadrupled since 2008, and will grow by another 43% this year. That will also mean lower per-unit costs, with the cost for rooftop systems already falling by 5% to 8% each year and expected to drop by half by 2020. In many sunny climates with high peak electricity costs, solar energy is already at parity with gas or oil, and will match that of coal within a few years. And that’s certainly a silver lining which can give builders a distinct advantage.

Towards Reforming Housing Market Research at PCBC 2011

For this year's PCBC in San Francisco, I'll be participating on two different panels discussing how and why traditional housing market research during the boom years (including consultants who were all too willing to write fiction to keep builder & developer clients happy) failed to fully recognize the financial cataclysm that was to come. Here's a description of the panel, which will take place over two days but focus on different issues:

The building industry largely missed the signs of the housing bubble, ignored its profound consequences, and adjusted too late. What went wrong? How can it be fixed? And, going forward, how can we develop a more objective and comprehensive framework of market-based due diligence? A panel of prominent economists, housing consultants, financial bloggers and market research data experts will discuss necessary reforms, the current outlook, and new tools to get a better handle about where the market is going.

I plan on turning off my censor completely for this opportunity, because by engaging in such deceptive practices, industry consultants not only tanked the housing market, but also played a minor role in destabilizing the global economy. Today, I still see those same consultants working within the industry, yet no one seems to care about the danger of history being repeated (hint: these guilty parties aren't going to warn you about their previous behavior in their marketing materials). If you choose a consultant who lies to you to get your business and then your project fails, guess who's to blame? YOU ARE!

If you're planning to attend PCBC, please join me and the following panel for what I'm sure will be a provocative discussion:

Moderator: Gerd-Ulf Krueger, Principal Economist, HousingEcon.com
Patrick Duffy, Principal, Metrointelligence
Rick Sharga, Senior Vice President, RealtyTrac, Inc.
Belinda Sward, Executive Managing Director, Strategic Solutions Alliance
Alexander Villacorta, Senior Statistician, Clear Capital

Click here to register for PCBC (prices go up after May 10th).

Los Angeles Economic Forecast Conference: June 21, 2011

Save the date: June 21st, 2011 at the Bonaventure Hotel in downtown Los Angeles!

Special discount available through MetroIntelligence- click here.

MetroIntelligence Real Estate Advisors, Beacon Economics and the Graziadio School of Business and Management at Pepperdine University invite you to join us at What's Next LA? Entrepreneurialism and California's Competitive Future. This year's event delivers a stellar line-up of leading economic and business thinkers including the following:

• Christopher Thornberg, Founding Partner, Beacon Economics
• Brad Kemp, Director of Regional Research, Beacon Economics
• Linda Livingstone (emcee), Dean, Pepperdine University Graziadio School of Business and Management
• Randy Churchill, Director - Emerging Company Services, PriceWaterhouseCoopers
• Christos Costakos, Former Chairman & CEO, E*Trade Group, Inc.
• Alexander Haislip, Financial Journalist and Author
• Scott Lenet, Managing Director - Los Angeles, DFJ Frontier

Attendees will hear a new outlook for the U.S., California, and Los Angeles economies, delivered by some of the state's most reputable forecasters, and revealing insights into the direction the economy will take in the near and long-term future. Some questions addressed will include the following:

• Is California going to stumble or stride down the road toward economic recovery in 2011 and 2012?
• How high do oil prices have to rise to significantly affect the economy?
• How will the housing market's battle with distressed properties affect home sales and prices in California and the nation over the next few years?
• Inflation? Hyperinflation? Deflation? Why are experts all over the map?
• Are the conditions for business success still in place in California today?
• What are the greatest barriers to California’s existing businesses? To entrepreneurialism?

The program will also cover one of the most pressing and hotly debated topics in the state: entrepreneurialism and California's competitive future. Charges of a hostile business climate in the Golden State have exploded in intensity since the downturn began in 2007. We have invited an exceptional line-up of experts from the worlds of venture capital, technology start-ups, banking, and journalism to debate critical questions that go to the heart of California's future success.

Conference attendees will receive the following:

• 2011 Los Angeles Economic Forecast Book - a data-packed analysis of the region's economic indicators
• Sections on residential and commercial real estate authored by MetroIntelligence Principal Patrick Duffy
  
• Quarterly updates to the forecast for one full year
• Chance to interact with forecasters and speakers
• Prime networking opportunity
• Breakfast buffet
• Hosted self-parking

60 Minutes covers bogus foreclosure documents

Just when you think the issues related to mortgage fraud couldn't get any worse, they do. Last night, 60 Minutes covered the story of lenders which outsourced their foreclosure process to outside firms, who in turn hired untrained bodies -- aka 'robosigners' -- for $10/hour to pretend they were officers of the banks and sign thousands of documents per day.

Only problem? Many of those forms weren't filled out correctly (often laughably so), which has slowed down the entire foreclosure process. Of course the banks which hired these firms -- companies such as Bank of America, Wells Fargo, Citibank and others -- deny any knowledge of these irresponsible practices. So who's going to jail for this huge fraud? As usual in this country, no one. They'll probably pay (another) fine and call it a day.

Changes to home mortgages seem inevitable

As I sit here and write this post, the U.S. national debt is climbing past $14.25 trillion, or an average of nearly $46,000 for each citizen. Each day, that national debt rises by about $4.1 billion, as 40% of the 2011 federal budget is made up of borrowed money. Of the Obama Administration’s proposed $3.7 trillion budget for 2012, 30% will go to Medicare and Medicaid, 22% will pay for Social Security benefits, 19% will go for defense-related programs and nearly 13%, or $474 billion, will be used to service the existing debt. So just what does that have to do with mortgage finance? Everything.

For starters, in order to reclaim up to $131 billion in annual foregone tax revenue, the National Commission on Fiscal Responsibility and Reform has the long-standing mortgage deduction in its crosshairs, to be replaced by a 12% tax credit that would help those who don’t itemize their deductions but punish many who do. Not surprisingly, trade groups representing real estate agents and home builders have strongly opposed the idea for a number of very solid reasons.

Meanwhile, however, the leaders over at AARP are also fighting against any changes to Medicare or Social Security that would anger their 40 million-plus members, while lobbyists for defense firms visit Capitol Hill to offer dire consequences resulting from defense cuts. But if no one budges at all and simply throws up walls of discontent at the mere mention of changing the status quo, how do we ever fix this huge – and escalating – problem?

It’s in times like this that true leadership is required, and for the building industry that may require some compromises on not just the tax deduction, but also the nature and duration of home mortgages. Instead of being purely re-active, what if the leaders of NAHB and NAR were pro-active enough to discuss some type of gradual and reasonable changes to the tax code – such as grandfathering in existing owners and leaving it in place under certain conditions to promote homeownership -- but only if commensurate changes are also made to entitlement programs and the defense budget?

Those who want to see the deduction disappear argue that other countries such as the United Kingdom and Italy have phased out their own tax deductions for homeownership and survived – and Canada’s housing market has done quite well without one at all – but those countries’ mortgage markets remain largely the domain of banks, and not of investors buying securities. In the U.S., it’s a different story. That’s also why the fate of the mortgage tax deduction and the market itself – including the phasing out of Fannie Mae and Freddie Mac -- are so closely intertwined.

For a fully private investor such as Bill Gross of Pimco in Newport Beach, CA to buy mortgage bonds, he’s been quoted as demanding a 3% premium to compensate him for his risk. But Moody’s Analytics economist Mark Zandi and a colleague have instead offered up a sort of public-private hybrid solution that would have government insurers act as market intermediaries for mortgage securities but maintain a large bail-out fund and ensure reserve capitals can withstand steep price declines. They claim their plan would keep interest rates competitive while boosting sales, prices and homeownership.

Whatever the outcome, it seems highly unlikely that the system which led to the unraveling of the housing market – and the global economy – will ever return in the same form it was before. Into that vacuum, builders and agents will have no choice but to support eventual reforms that support not just their own businesses, but also the country in which they live. The clock is ticking.

March column for Builder & Developer now online

My column for the March 2011 issue of Builder & Developer magazine is now online. For this issue, I reviewed how the nation's builders continue to improve the quality of their products and services to home buyers. This is crucial in order to compete against both heavily discounted foreclosures as well as fairly new homes they themselves built just a few years ago. In fact, the results from the 2010 JD Power survey were the highest since the company started covering new homes in 1997. An excerpt:

During the boom years in new home construction, by far the largest challenge to builders was maintaining build quality and customer service to a dramatically larger customer base – an issue which continues to hit the bottom line of some the country’s larger builders with increased costs to address warranty issues and defects. But as boom turned to bust and new home starts plummeted, builders refocused on improving their entire production chain to great effect.

According to the most recent J.D. Power & Associates survey in 2010, customer satisfaction with home builders has risen for the third year in a row to 826 on a 1,000-point scale – the highest level since the study was started in 1997. The 2010 survey was based on responses from over 16,400 buyers of newly built, single-family homes in 17 different markets. Most buyers had lived in their homes for four to 18 eighteen months.

Not surprisingly, the most important takeaway from the survey was that those builders who actively listened to what customers wanted and were sincere about building ongoing relationships have endured the best. Alternatively, those companies which lost this consistent focus either had to scale back operations or leave the marketplace entirely...

Click here to read the entire article.

Click here to read the entire magazine in digital format.

Is the lending faucet beginning to open?

According to a story in today's Wall Street Journal (via MarketWatch.com), the lending faucet may be finally squeaking open -- at least for certain commercial real estate projects. From the article:

An influx of fresh capital into U.S. commercial real estate is bringing some long-stalled development projects back to life and launching new construction of apartments, office buildings and shopping centers.

The moves show that the industry, in a deep slump just a year ago, has entered recovery mode—at least in the nation's largest and healthiest markets. Analysts say the improved economy is giving rise to pockets of demand for new commercial space, while low yields on other investments prompt investors to seek higher returns in real estate...

Of course, the U.S. still is dotted with thousands of stalled construction sites, ranging from struggling apartment projects on the Brooklyn, N.Y., waterfront to shells of buildings in suburban Sacramento, Calif. And it will take years to replace more than two million construction jobs, or about 30% of the 2006 peak, lost since the real-estate bubble popped...

But office buildings and other projects could help cushion the U.S. economy if public-sector building declines, as expected, due to government budget cuts and waning economic-stimulus aid...

Click here for entire article.

New Home Satisfaction Continues to Improve

During the boom years in new home construction, by far the largest challenge to builders was maintaining build quality and customer service to a dramatically larger customer base – an issue which continues to hit the bottom line of some the country’s larger builders with increased costs to address warranty issues and defects. But as boom turned to bust and new home starts plummeted, builders refocused on improving their entire production chain to great effect.

According to the most recent J.D. Powers & Associates survey in 2010, customer satisfaction with home builders has risen for the third year in a row to 826 on a 1,000-point scale – the highest level since the study was started in 1997. The 2010 survey was based on responses from over 16,400 buyers of newly built, single-family homes in 17 different markets. Most buyers had lived in their homes for four to 18 eighteen months.

Not surprisingly, the most important takeaway from the survey was that those builders who actively listened to what customers wanted and were sincere about building ongoing relationships have endured the best. Alternatively, those companies which lost this consistent focus either had to scale back operations or leave the marketplace entirely.

Between 2009 and 2010, customer satisfaction improved in eight of nine categories with the largest jumps in workmanship & materials, home readiness and the builder’s design center; the only factor not seeing an improvement from 2009 were the recreational facilities provided by the builder.

But what was most interesting to me was that the importance of factors driving that overall satisfaction has shifted from 2009: whereas the ranking of price/value and warranty/customer service fell, it rose for the builder’s sales staff as well as the construction manager. This rise seems to have matched up directly with the renewed focus on retraining sales managers as well as hiring or retaining the most professional construction experts in the business in order to shepherd skittish buyers from contract through closing.

Another big trend showing up in the survey results was the awareness of ‘green’ features in their homes; whereas just 31 percent of new-home owners perceived their homes as environmentally friendly in 2009, a year later that rate had nearly doubled to 61 percent. In some markets, builders such as KBHome are even marketing annual energy savings as a means to separate their new designs from the competition.

J.D. Powers also surveys buyers on new-home quality alone, and that also reached a record high of 844 in 2010 after improving in 15 of 17 markets. The biggest remaining quality issues? Landscaping, kitchen cabinets and HVAC systems.

In terms of the highest-performing markets in 2010, those included Phoenix, Las Vegas, Southern California, Orlando and Sacramento – all challenging markets in which builders are competing with a high level of discounted foreclosures.Since builders tend to be strong in specific markets, it’s difficult to hand one builder a national #1 ranking, but Shea Homes and Standard Pacific Homes both ranked highest in three separate markets, while KBHome ranked highest in two markets. Other builders which are well-known regionally also led the survey in their respective home markets.

Finally, J.D. Power also ranks home appliances, and the winners for 2010 were the following: Samsung (refrigerators), Wolf (range/cooktop/oven), Miele (dishwasher) and Samsung (clothes washer and dryer). While the traditional brands seen most often in new homes such as GE, Whirlpool or KitchenAid certainly performed well in the surveys, it’s clear that Samsung’s renewed focus on improving its own quality has also paid off well for the company – and something smart builders could leverage to boost their own rankings.

For the complete surveys mentioned, visit www.jdpower.com/homes.

February column for Builder & Developer magazine now online

My column for the February 2011 issue of Builder & Developer magazine is now online. For this issue, I wanted to focus on the importance of social media when developing ongoing relationships with clients. An excerpt:

A decade ago, it was considered essential for a serious company to at least have a traditional Web site. But since then, the combination of ever-evolving technology and shorter attention spans now suggests marketing campaigns should also include Web site versions for smart phones, traditional blogging, micro-blogging (Twitter), video (YouTube) and regular social networking (Facebook) to connect with potential buyers.

To be sure, most small companies aren’t set up for this additional workload, so many outsource the new tasks to their respective PR firms, or even hire specialists who focus exclusively on helping maintain an online presence. For example, if a builder wanted to launch a comprehensive campaign on their green building practices, a package could include blogging and Twittering several times per week, reciprocal links with green-oriented blogs and Web sites in the area, shooting informational videos for YouTube which rank high on various search engines and tapping Facebook fans or friends to help consistently spread the word.

At the same time, however, the most successful campaigns manage to pair these online offerings with traditional offline events such as model opening parties, community gatherings or even charity benefits. The goal of that is also increasingly long term: if a company shows that they’re truly invested in the local community, then buyers are more likely to gravitate to their products and services...

Click here to read the article in digital format (Page 20).

California's Redevelopment Agencies: A Compromise?

Recently, new California Governor Jerry Brown suggested gutting the state's 400 Community Redevelopment Agencies in a bid to help balance the yawning budget deficit. One reason for that is because these agencies don't pay property taxes on their holdings, which adds up to billions on lost revenue each year. On the other hand, were it not for the incentives made possible by these agencies, many urban infill projects would be made impossible. Two colleagues of mine, Christopher Thornberg of Beacon Economics and G.U. Krueger of HousingEcon.com, argue that there should be a compromise for this very important -- and controversial - issue. From the Sacramento Bee:

On the pro-redevelopment side, there is a legitimate claim that these agencies have played an important role in helping to build California.

Developers wanting to invest in urban communities, particularly areas that are underdeveloped and need it the most, face daunting challenges. There are fights with local zoning boards, a potential lack of appropriate infrastructure for a specific project, and huge environmental remediation costs for urban land. Having a local redevelopment agency behind the effort can be an enormous help, as can the right to declare an area blighted, something a redevelopment agency has the power to do.

Some developers go so far as to say that the soft money from redevelopment agencies is the "make or break" difference in a project. This is especially true for affordable housing projects, which California desperately needs.

Redevelopment agencies also bring much-needed organizational principles to the table. A fancy entertainment zone will not be profitable without local draws such as sports venues and hotels. No single developer will be willing to make an investment unless others are willing to make them as well.

Redevelopment agencies act to coordinate these efforts. They guide the collective actions of multiple developers, provide technical expertise and take risks where local bureaucrats won't. Without this kind of central, guiding force, many profitable projects might never start at all. This is particularly true for very large projects – think Downtown Los Angeles Live.

There are also serious cons to the redevelopment argument. Brown and his supporters make valid points. Most basically, the idea that redevelopment must be funded during this period of intense fiscal crisis is simply wrong. Pick your standard cliché here – rearranging the deck chairs on the Titanic, or fiddling while Rome is burning. Clearly there are more pressing uses for the state's funds in the short run...

To read the entire opinion piece, click here: http://www.sacbee.com/2011/02/08/3384812/find-compromise-in-redevelopment.html#ixzz1DaO4Jsiy

Telling my harrowing story about Egypt on local radio

When the protests in Egypt started to break out, I was actually on a tour of the Nile with my mother, who had joined me after we visited my older brother on a family visa to Saudi Arabia (since Saudi Arabia offers no tourist visas, I wasn't able to go with friends and no other immediate family members were interested in going).

By the end of the week, we were back in Giza, a suburb of Cairo, but instead of going on sight-seeing tours of the city, we were told to stay in the hotel. By Saturday, looters had surrounded the hotel and the army was called in to protect the area around the pyramids. It was then, via WiFi that was still working in the hotel, that I emailed the John & Ken Show in Los Angeles, since I thought it'd be a great story for their radio show. The story I told them was what it was like to be trapped in that hotel, our experience at the chaotic airport, and how we eventually got out of the country.

You can find the podcast of that radio show by clicking here (I believe it requires a PC and not a MAC):

http://www.kfiam640.com/mediaplayer/?station=KFI-AM&action=ondemand&item=20858681&feed_name=JohnandKen.xml