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9/9 FRI 4:15 | Rethinking Florida 2060
 

9/9 FRI 4:15 | Rethinking Florida 2060

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Melina Duggal ...

Melina Duggal
Charles G. Pattison
Debra Dremann
Frances Marino

The 2060 Plan prepared by the 1000 Friends of Florida presented an ominous scenario of sprawling development in Florida. Since
then, new policies at the state and local level, changes in the availability of capital both for development and conservation, and
demographic and economic trends have likely altered Florida’s future outlook. Is 2060 just delayed, or have development patterns
changed forever? A panel of experts will discuss likely growth scenarios, define ways to capitalize on alternative development trends and present ideas on conservation, planning, financing,
and approaches to development that can be successful in these economic times and the future.

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  • Acceleration in job growth in 2011 not likely to produce typical rebound in owner occupied housing as in past recoveries due to:Tighter underwriting standards for 1st time buyersLack of urgency/confidence by potential buyersUncertainty around “qualifying mortgages” under Frank DoddBuilders focusing on rebuilding profitability over volume in 2011Improving macro economic conditions in 2012 will lead to increased housing starts in the 10-15% rangeHousing starts increase slowly toward the end of 2011 with minor price appreciation beginning in 2012 as foreclosures and shadow supply gets liquidated, and as buyer confidence around prices and jobs improvesRising rental rates (3 quarters of national growth) will push migration to increased ownershipLending standards and regulatory uncertainties loosen in 2012QUOTE: “It will be a slow recovery in demand (and thus values)” OR “Even in the recovery, we will see a bifurcated market, with well-leased, well-located product receiving a disproportionate share of investor, buyer, and renter interest.”

9/9 FRI 4:15 | Rethinking Florida 2060 9/9 FRI 4:15 | Rethinking Florida 2060 Presentation Transcript

  • Florida 2060 Revisited
    Charles Pattison
    Frances Chandler-Marino
    Melina Duggal
    Debra Dremann
    Wellyn Land Company
  • Florida 2060
    In 2006, the 1000 Friends of Florida sanctioned a trend analysis of development/population distribution
    Based on 2005 data
    Depicted a sprawling pattern of development that covered much of central Florida
  • Population Forecast
    35.8 Million
    17.9 Million
    2060
    2005
  • Revised BEBR Mid Ranch
    Population Numbers
    2005 – 2020 22,894,140 v. 21,325,800 (93%)
    2020 – 2040 29,203,842 v. 26,081,800 (89%)
    2040 – 2060 35,814,574 v. 32,591,262 (91%)
  • Assumptions
    1. Moderate Population Growth (BEBR trend line)
    2. New population consumes land at same density as existing development, by County
    3. New population distributed geographically based on land suitability (existing urban, roadways, water, coastline, wetlands)
  • Developed Land
    Conservation LandsPermanently Protected
    Existing Developed Lands and Permanent Conservation Lands
  • Developed Land
    Conservation LandsPermanently Protected
    2060 Developed Lands and Permanent Conservation Lands
  • Statewide Land Use Allocation (millions of acres)
    PermanentlyProtectedConservation10.8
    PermanentlyProtectedConservation10.8
    Agriculture, Other Undeveloped Lands12.5
    Agriculture, Other Undeveloped Lands19.5
    Water2.0
    Water2.0
    Urban Development6.0
    Urban Development13.0
    2060
    2005
    Total: 38.3 Million Acres
  • Developed Land
    Conservation LandsPermanently Protected
    Developed Land and Permanent Conservation Lands
    2005
    2060
  • Issues Not Addressed
    Water supply
    Additional land acquisition
    Sea level rise
    Changes in market demand
    Reasonableness of business as usual
    Local comprehensive plans
  • IS Florida 2060 Still Relevant?
    Have market conditions changed forever?
    Are the 2005 assumptions still reasonable?
    Has the sprawling pattern of development become obsolete?
    Is the financial climate so dissimilar that growth can’t be funded?
  • Revisiting 2060
    Delayed or Different?
    A Market Perspective
    12
  • We Are In The Recovery Phase…It Just Doesn’t Feel Like It Yet…
    13
  • Unemployment Rates By County
    2007 Annual Averages
  • Unemployment Rates By County
    2009 Annual Averages
    September 2010
  • Unemployment Rates By County
    March 2010 – February 2011 Averages
    FL still suffering
  • Unemployment Rates By County
    August 2010 – July 2011 Averages
    Starting to look better
  • 18
    2013 – The Next “Normal” Year
    Slow To Moderate Growth Through Recovery
    • Moderate job growth in 2011
    • Housing starts begin to rise in 2012
    • Lending standards and regulatory uncertainties loosen in 2012
    • Boomers and Gen Y enter market in 2015+
    RCLCO PROJECTIONS FOR RESIDENTIAL REAL ESTATE RECOVERY
  • 9 Million New People Projected in FL by 2040
    Projected Population Growth (Thousands) by Planning Region
    2010-2040
    SOURCE: BEBR Medium-High Projections from June 2011
  • In 2005, 35.8 Projected In 2060, Now 32.2m Projected In 2060
    SOURCE: BEBR, RCLCO, US Census
    20
  • 21
    Current Supply And Demand
    SUPPLY: STILL OVER SUPPLIED
    But we’ve reduced inventories since 2007
    Not out of the woods, but not 2007
    THEN: Values will always go up: Wrong
    NOW: Everything has changed permanently: Wrong
    DEMAND: TWO BIG MARKETS WILL IMPACT FLORIDA
    Generation Y enters housing market
    Boomers retire – FL still warm and sunny
    SOURCE: RCLCO
  • Long-term Demographic Trends Influencing How We Live
    Key Demographic Drivers:
    Generational shifts
    Rise of non-traditional households
    Growth in minority households
    Domestic migration and foreign Immigration
    Income and wealth
    22
  • Gen Y And Baby Boomers Two Largest Groups Nationally And In Florida
    SOURCE: Claritas, National Center for Health Statistics
    23
  • Life Stage Influences Housing Choices
    SOURCE: RCLCO
  • 25
    Where Do Different Generations Want To Live?
    Source: 2011 National Community Preference Survey, National Association of Realtors, March 2011
  • 26
    How Does Product Preference Change By Generation?
    Source: 2011 National Community Preference Survey, National Association of Realtors, March 2011
  • Product Preference By Location
    • Gen Y more open to MF products in all locations than other generations
    • City
    • More renters
    • MF, attached & small lot detached
    • 30% attached
    • Suburban
    • Dominated by SFD, both small and large lot
    • 15% attached
    • Rural/Small Town
    • Primarily large lot SFD
    • 8% attached
    Canin Associates
  • Demographics: Impact Of Boomer
    “Urban myth” = prefer “safe urbanism”
    Village center – entertainment & retail services nearby – walkable!
    Healthy active lifestyles
    Affordability
    Smaller, move-down homes, high-level of finish
    May rejuvenate 2nd home market
    Low-maintenancelifestyle
    Niche SFD and SFA products
    28
    SOURCE: RCLCO
  • Demographics: Impact of Gen X
    Primarily families - still have to build for the family buyer
    Good schools!!!!!!
    Larger lots/homes
    Affordability
    Healthy active lifestyles – safe neighborhoods, parks, trails and walkability!
    Hard to balance life - also desire in-town areas and inner suburbs close to jobs, entertainment & services
    SOURCE: RCLCO
    29
  • Demographics: Impact Of Gen Y
    In-town areas and inner suburbs will remain on an upward trajectory
    Diversity, walkability and proximity to jobs keys to attracting this segment
    Suburbs will need to evolve to remain attractive to Gen Y
    More walkable areas, including new and existing town centers
    Master planned communities
    Niche products and “village centers”
    Affordability
    SOURCE: RCLCO
    30
  • How is the Development Community Responding ?
    2007 to 2010
    TODAY
  • Florida Housing Permits – Peak to Trough
    2010 Florida increased to 38,679 Units – Ranking #3 of the Top 10 States
    Texas #1 at 88,461 and California at 43,716
    Source: US Census Bureau
  • Key Influencers:
    • Uncertainty of Market Demand & Market Values
    • Tremendous Amount of Competition
    • Changing Demographics
    • Availability of Capital
  • Recession Worries Still Abound
    • Job Creation still not sufficient to reduce unemployment
    • Banks stillVERY slow to move non-performing loans off of balance sheets
    • Home Values not at Bottom Yet – Market Specific
    • Continued Foreclosures activity for 2 to 3 more years
    • Global & Wall Street Instability
  • So What’s the Good News?
    • Home builders have ceased lay-offs and are hiring again for the first time since 2006
    • Access to Capital is BACK
    • Home Affordability is BACK (If you can qualify)
    • Florida still very desirable for Baby Boomers
    • The Rise of Gen Y
    • Low Interest Rates
  • Who’s Buying and What’s Selling Now
    “Value” – Affordability is Back!
    • Heart of the “for-sale” market: $150K to $300K
    • Boomers & Gen Y - Smaller homes & lots
    • Families - McMansions at $64/sf
    • Single Family Detached more so than Attached
    • Multi-Family High Demand
    Forest Creek in Parrish, FL – Neal Communities
    Townhome – 1,496 SF
    Rose Cottage – 27’ x 130’ - 1,200 SF
  • What’s Important in a Home?
    Some consumers motivated by “green” but not paying premium. Builder’s see it as a Differentiator!
    Buying the house I “need” not NEED + INVESTMENT. 2nd Home and vacation home market still struggling (foreign national buyers back)
    Primary Luxury market back in some places – Still at a Discount
  • Where are they buying?
  • AVAILABILITY OF CAPITAL
    Private versus Public
  • Master Planned Community Developers
    • Primarily Privately Owned & Funded (Debt & Equity)
    • Higher Costs of Capital
    • Cautiously approaching new land deals
    • Competition - A lot of new players on the scene
    • A lot of looking, not a lot of buying
    • Primary Interest - CDD Defaults, Bank REO’s & Distressed Loans (No Greenfield)
  • AVAILABILITY OF CAPITAL
    PRIVATE DEVELOPER
    • Increased Activity from Private Capital
    • “A” Markets - Bank Debt Back
    • “A” Markets - CDD Bond Financing Back
  • Home Builder/Developer – National Publics
    • Wall Street & Privately Funded
    • Lower Costs of Capital
    • More Aggressively approaching new land deals
    • A lot of Competition
    • Must maintain a pipeline
    • Primary Interest – Finished Lots and undeveloped land under 500 units (will partner with other builder’s on larger sites)
  • AVAILABILITY OF CAPITAL
    PUBLIC HOME BUILDER
    • Good Access to Capital
    • Good Access to Cheaper Capital
    • May Dominate Land Development in the Future???
  • AVAILABILITY OF CAPITAL
    PRIVATE HOME BUILDER
    • Small Local and Regional Builder’s and Developers Devastated by Recession
    • Higher costs of Capital
    • Some new start-ups are emerging – Affordable Niche Products in Existing Communities & In-fill neighborhoods
    • Canadian Builders Investing in US – Ashton Woods & Mattamy Homes
  • 2011/2012 Forecast
    More Planning
    Re-Positioning
    Re-Entitling
    More Home Building
    Increase in Multi-Family
    For-Rent Activity
  • 2011/2012 FORECAST
    “Greenfield” DEVELOPMENT
  • DEVELOPMENT FORECAST
    HEALTHIER & GREENER
    And maybe a little more dense…
  • Developer’s Perspective on 2060 –
    Delayed or Different?
    Different
    State will continue with acquisition of state lands in the future when budgets rebound
    Developer’s do understand that trails and open space are important to selling homes and good stewardship of the land
    Demographic shifts and changes in affordability & Interest rate volatility will keep most homes in the more compact range.
  • FLORIDA 2060 REVISITEDCHALLENGES & OPPORTUNITIES
    • To embrace a focus that is visionary & proactive instead of responsive & reactive
    • To create a bigger picture – a statewide vision that informs policy and spending
    September 29, 2011
    Page 50
  • REVISITING POLICY PRIORITIES:VISION FOR 2060
    Focus on Natural Systems. Protect our natural systems as assets that serve to enhance our competitive position.
    Key Economic Locations. Identify economic development priority locations and support these areas with land use a capital program planning – on a statewide basis.
    Support the Evolution of Agricultural Industry. Prioritize commercial agriculture as an economic development objective and support the evolution of the agricultural enterprises.
  • REVISITING POLICY PRIORITIES:VISION FOR 2060
    State Multimodal Strategy. Create a statewide system of multimodal economic and social connectivity.
    Local Multimodal Strategy. Recognize and respect individual community characteristics through a “connectivity transect.”
    City, Town & Country. Allow ranges of policies to support various scales, densities, types, forms and uses consistent with the context of the community.
  • FRAMEWORK FOR 2060 VISION:1. TAKE CARE OF FLORIDA
    Place a priority on taking care of those things that make Florida special and unique:
    Coastline
    Beaches
    Rivers
    Natural Systems
    Corridors
  • FRAMEWORK FOR 2060 VISION:2. JOBS, JOBS, JOBS
    Make economic development a priority – really.
    Globally competitive on a statewide basis
    Strategic infrastructure investments
    Create a foundation for a 21st century economy
    High tech / target (urban) + industrial (rural)
    Tampa Biotech Incubators, UCF
    September 29, 2011
    Page 54
    DeSoto Solar Power Plant, Arcadia, FL
  • FRAMEWORK FOR 2060 VISION:3. CONNECT PEOPLE TO PEOPLE TO PLACES
    Establish the framework for a statewide/ multi-modal system of economic and social connectivity.
    Commuter Rail, High Speed Rail, & Support Transit
    Airports
    Ports
    September 29, 2011
    Page 55
  • FRAMEWORK FOR 2060 VISION:4. CELEBRATE DIVERSITY
    Recognize and support the unique visioning efforts & lifestyle choices of each community.
    Regional Visioning efforts
    Local Visioning efforts
    Let Cities be Cities; Suburbs be Suburbs; and Rural areas be Rural – one size does not fit all
    Page 56
    How Shall We Grow? 2009
    myregion.org
  • PRIORITIES FOR A NEW 2060
    TAKE CARE OF FLORIDA
    JOBS, JOBS, JOBS
    CONNECT PEOPLE TO PEOPLE TO PLACES
    CELEBRATE DIVERSITY
    Prioritize expenditures as investments to create our desired future – we’re worth it.
    September 29, 2011
    Page 57
  • Florida 2060 Revisited
    Frances Chandler-Marino
    Melina Duggal
    Debra Dremann
    Charles Pattison
    Wellyn Land Company