9/9 FRI 4:15 | Rethinking Florida 2060


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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

    1. 1. Florida 2060 Revisited<br />Charles Pattison<br />Frances Chandler-Marino<br />Melina Duggal<br />Debra Dremann<br />Wellyn Land Company<br />
    2. 2. Florida 2060<br />In 2006, the 1000 Friends of Florida sanctioned a trend analysis of development/population distribution<br />Based on 2005 data<br />Depicted a sprawling pattern of development that covered much of central Florida <br />
    3. 3. Population Forecast<br />35.8 Million<br />17.9 Million<br />2060<br />2005<br />
    4. 4. Revised BEBR Mid Ranch <br />Population Numbers<br />2005 – 2020 22,894,140 v. 21,325,800 (93%)<br />2020 – 2040 29,203,842 v. 26,081,800 (89%)<br />2040 – 2060 35,814,574 v. 32,591,262 (91%)<br />
    5. 5. Assumptions<br /> 1. Moderate Population Growth (BEBR trend line)<br /> 2. New population consumes land at same density as existing development, by County<br /> 3. New population distributed geographically based on land suitability (existing urban, roadways, water, coastline, wetlands)<br />
    6. 6. Developed Land<br />Conservation LandsPermanently Protected<br />Existing Developed Lands and Permanent Conservation Lands<br />
    7. 7. Developed Land<br />Conservation LandsPermanently Protected<br />2060 Developed Lands and Permanent Conservation Lands<br />
    8. 8. Statewide Land Use Allocation (millions of acres)<br />PermanentlyProtectedConservation10.8<br />PermanentlyProtectedConservation10.8<br />Agriculture, Other Undeveloped Lands12.5<br />Agriculture, Other Undeveloped Lands19.5<br />Water2.0<br />Water2.0<br />Urban Development6.0<br />Urban Development13.0<br />2060<br />2005<br />Total: 38.3 Million Acres<br />
    9. 9. Developed Land<br />Conservation LandsPermanently Protected<br />Developed Land and Permanent Conservation Lands<br />2005<br />2060<br />
    10. 10. Issues Not Addressed<br />Water supply<br />Additional land acquisition<br />Sea level rise<br />Changes in market demand<br />Reasonableness of business as usual<br />Local comprehensive plans<br />
    11. 11. IS Florida 2060 Still Relevant?<br />Have market conditions changed forever?<br />Are the 2005 assumptions still reasonable?<br />Has the sprawling pattern of development become obsolete?<br />Is the financial climate so dissimilar that growth can’t be funded?<br />
    12. 12. Revisiting 2060<br />Delayed or Different?<br />A Market Perspective<br />12<br />
    13. 13. We Are In The Recovery Phase…It Just Doesn’t Feel Like It Yet…<br />13<br />
    14. 14. Unemployment Rates By County<br />2007 Annual Averages<br />
    15. 15. Unemployment Rates By County<br />2009 Annual Averages<br />September 2010<br />
    16. 16. Unemployment Rates By County<br />March 2010 – February 2011 Averages<br />FL still suffering<br />
    17. 17. Unemployment Rates By County<br />August 2010 – July 2011 Averages<br />Starting to look better<br />
    18. 18. 18<br />2013 – The Next “Normal” Year<br />Slow To Moderate Growth Through Recovery<br /><ul><li>Moderate job growth in 2011
    19. 19. Housing starts begin to rise in 2012
    20. 20. Lending standards and regulatory uncertainties loosen in 2012
    21. 21. Boomers and Gen Y enter market in 2015+</li></ul>RCLCO PROJECTIONS FOR RESIDENTIAL REAL ESTATE RECOVERY<br />
    22. 22. 9 Million New People Projected in FL by 2040<br />Projected Population Growth (Thousands) by Planning Region<br />2010-2040<br />SOURCE: BEBR Medium-High Projections from June 2011<br />
    23. 23. In 2005, 35.8 Projected In 2060, Now 32.2m Projected In 2060<br /> SOURCE: BEBR, RCLCO, US Census<br />20<br />
    24. 24. 21<br />Current Supply And Demand<br />SUPPLY: STILL OVER SUPPLIED<br />But we’ve reduced inventories since 2007<br />Not out of the woods, but not 2007<br />THEN: Values will always go up: Wrong<br />NOW: Everything has changed permanently: Wrong<br />DEMAND: TWO BIG MARKETS WILL IMPACT FLORIDA<br />Generation Y enters housing market<br />Boomers retire – FL still warm and sunny<br />SOURCE: RCLCO<br />
    25. 25. Long-term Demographic Trends Influencing How We Live<br />Key Demographic Drivers:<br />Generational shifts<br />Rise of non-traditional households<br />Growth in minority households<br />Domestic migration and foreign Immigration<br />Income and wealth<br />22<br />
    26. 26. Gen Y And Baby Boomers Two Largest Groups Nationally And In Florida<br />SOURCE: Claritas, National Center for Health Statistics<br />23<br />
    27. 27. Life Stage Influences Housing Choices<br />SOURCE: RCLCO<br />
    28. 28. 25<br />Where Do Different Generations Want To Live?<br />Source: 2011 National Community Preference Survey, National Association of Realtors, March 2011 <br />
    29. 29. 26<br />How Does Product Preference Change By Generation?<br />Source: 2011 National Community Preference Survey, National Association of Realtors, March 2011 <br />
    30. 30. Product Preference By Location<br /><ul><li>Gen Y more open to MF products in all locations than other generations
    31. 31. City
    32. 32. More renters
    33. 33. MF, attached & small lot detached
    34. 34. 30% attached
    35. 35. Suburban
    36. 36. Dominated by SFD, both small and large lot
    37. 37. 15% attached
    38. 38. Rural/Small Town
    39. 39. Primarily large lot SFD
    40. 40. 8% attached </li></ul>Canin Associates<br />
    41. 41. Demographics: Impact Of Boomer<br />“Urban myth” = prefer “safe urbanism”<br />Village center – entertainment & retail services nearby – walkable!<br />Healthy active lifestyles<br />Affordability<br />Smaller, move-down homes, high-level of finish<br />May rejuvenate 2nd home market<br />Low-maintenancelifestyle<br />Niche SFD and SFA products <br />28<br />SOURCE: RCLCO<br />
    42. 42. Demographics: Impact of Gen X<br />Primarily families - still have to build for the family buyer<br />Good schools!!!!!!<br />Larger lots/homes<br />Affordability<br />Healthy active lifestyles – safe neighborhoods, parks, trails and walkability!<br />Hard to balance life - also desire in-town areas and inner suburbs close to jobs, entertainment & services<br />SOURCE: RCLCO<br />29<br />
    43. 43. Demographics: Impact Of Gen Y<br />In-town areas and inner suburbs will remain on an upward trajectory<br />Diversity, walkability and proximity to jobs keys to attracting this segment<br />Suburbs will need to evolve to remain attractive to Gen Y<br />More walkable areas, including new and existing town centers<br />Master planned communities<br /> Niche products and “village centers”<br />Affordability<br />SOURCE: RCLCO<br />30<br />
    44. 44. How is the Development Community Responding ?<br />2007 to 2010<br />TODAY<br />
    45. 45. Florida Housing Permits – Peak to Trough<br />2010 Florida increased to 38,679 Units – Ranking #3 of the Top 10 States<br />Texas #1 at 88,461 and California at 43,716<br />Source: US Census Bureau<br />
    46. 46.
    47. 47. Key Influencers:<br /><ul><li>Uncertainty of Market Demand & Market Values
    48. 48. Tremendous Amount of Competition
    49. 49. Changing Demographics
    50. 50. Availability of Capital</li></li></ul><li>Recession Worries Still Abound<br /><ul><li>Job Creation still not sufficient to reduce unemployment
    51. 51. Banks stillVERY slow to move non-performing loans off of balance sheets
    52. 52. Home Values not at Bottom Yet – Market Specific
    53. 53. Continued Foreclosures activity for 2 to 3 more years
    54. 54. Global & Wall Street Instability</li></li></ul><li>So What’s the Good News?<br /><ul><li>Home builders have ceased lay-offs and are hiring again for the first time since 2006
    55. 55. Access to Capital is BACK
    56. 56. Home Affordability is BACK (If you can qualify)
    57. 57. Florida still very desirable for Baby Boomers
    58. 58. The Rise of Gen Y
    59. 59. Low Interest Rates</li></li></ul><li>Who’s Buying and What’s Selling Now<br />“Value” – Affordability is Back!<br /><ul><li>Heart of the “for-sale” market: $150K to $300K
    60. 60. Boomers & Gen Y - Smaller homes & lots
    61. 61. Families - McMansions at $64/sf
    62. 62. Single Family Detached more so than Attached
    63. 63. Multi-Family High Demand</li></ul>Forest Creek in Parrish, FL – Neal Communities<br />Townhome – 1,496 SF<br />Rose Cottage – 27’ x 130’ - 1,200 SF <br />
    64. 64. What’s Important in a Home?<br />Some consumers motivated by “green” but not paying premium. Builder’s see it as a Differentiator!<br />Buying the house I “need” not NEED + INVESTMENT. 2nd Home and vacation home market still struggling (foreign national buyers back)<br />Primary Luxury market back in some places – Still at a Discount<br />
    65. 65. Where are they buying?<br />
    66. 66. AVAILABILITY OF CAPITAL<br />Private versus Public<br />
    67. 67. Master Planned Community Developers<br /><ul><li>Primarily Privately Owned & Funded (Debt & Equity)
    68. 68. Higher Costs of Capital
    69. 69. Cautiously approaching new land deals
    70. 70. Competition - A lot of new players on the scene
    71. 71. A lot of looking, not a lot of buying
    72. 72. Primary Interest - CDD Defaults, Bank REO’s & Distressed Loans (No Greenfield)</li></li></ul><li>AVAILABILITY OF CAPITAL<br />PRIVATE DEVELOPER<br /><ul><li>Increased Activity from Private Capital
    73. 73. “A” Markets - Bank Debt Back
    74. 74. “A” Markets - CDD Bond Financing Back</li></li></ul><li>Home Builder/Developer – National Publics<br /><ul><li>Wall Street & Privately Funded
    75. 75. Lower Costs of Capital
    76. 76. More Aggressively approaching new land deals
    77. 77. A lot of Competition
    78. 78. Must maintain a pipeline
    79. 79. Primary Interest – Finished Lots and undeveloped land under 500 units (will partner with other builder’s on larger sites)</li></li></ul><li>AVAILABILITY OF CAPITAL<br />PUBLIC HOME BUILDER<br /><ul><li>Good Access to Capital
    80. 80. Good Access to Cheaper Capital
    81. 81. May Dominate Land Development in the Future???</li></li></ul><li>AVAILABILITY OF CAPITAL<br />PRIVATE HOME BUILDER<br /><ul><li>Small Local and Regional Builder’s and Developers Devastated by Recession
    82. 82. Higher costs of Capital
    83. 83. Some new start-ups are emerging – Affordable Niche Products in Existing Communities & In-fill neighborhoods
    84. 84. Canadian Builders Investing in US – Ashton Woods & Mattamy Homes</li></li></ul><li>2011/2012 Forecast<br />More Planning<br />Re-Positioning<br />Re-Entitling<br />More Home Building<br />Increase in Multi-Family <br /> For-Rent Activity<br />
    85. 85. 2011/2012 FORECAST<br />“Greenfield” DEVELOPMENT<br />
    86. 86. DEVELOPMENT FORECAST<br />HEALTHIER & GREENER<br />And maybe a little more dense…<br />
    87. 87. Developer’s Perspective on 2060 – <br />Delayed or Different?<br />Different<br />State will continue with acquisition of state lands in the future when budgets rebound<br />Developer’s do understand that trails and open space are important to selling homes and good stewardship of the land<br />Demographic shifts and changes in affordability & Interest rate volatility will keep most homes in the more compact range.<br />
    88. 88. FLORIDA 2060 REVISITEDCHALLENGES & OPPORTUNITIES<br /><ul><li>To embrace a focus that is visionary & proactive instead of responsive & reactive
    89. 89. To create a bigger picture – a statewide vision that informs policy and spending</li></ul>September 29, 2011<br />Page 50<br />
    90. 90. REVISITING POLICY PRIORITIES:VISION FOR 2060<br />Focus on Natural Systems. Protect our natural systems as assets that serve to enhance our competitive position.<br />Key Economic Locations. Identify economic development priority locations and support these areas with land use a capital program planning – on a statewide basis.<br />Support the Evolution of Agricultural Industry. Prioritize commercial agriculture as an economic development objective and support the evolution of the agricultural enterprises.<br />
    91. 91. REVISITING POLICY PRIORITIES:VISION FOR 2060<br />State Multimodal Strategy. Create a statewide system of multimodal economic and social connectivity. <br />Local Multimodal Strategy. Recognize and respect individual community characteristics through a “connectivity transect.”<br />City, Town & Country. Allow ranges of policies to support various scales, densities, types, forms and uses consistent with the context of the community.<br />
    92. 92. FRAMEWORK FOR 2060 VISION:1. TAKE CARE OF FLORIDA<br />Place a priority on taking care of those things that make Florida special and unique:<br />Coastline<br />Beaches<br />Rivers<br />Natural Systems<br />Corridors<br />
    93. 93. FRAMEWORK FOR 2060 VISION:2. JOBS, JOBS, JOBS<br />Make economic development a priority – really.<br />Globally competitive on a statewide basis<br />Strategic infrastructure investments<br />Create a foundation for a 21st century economy<br />High tech / target (urban) + industrial (rural)<br />Tampa Biotech Incubators, UCF<br />September 29, 2011<br />Page 54<br />DeSoto Solar Power Plant, Arcadia, FL<br />
    94. 94. FRAMEWORK FOR 2060 VISION:3. CONNECT PEOPLE TO PEOPLE TO PLACES<br />Establish the framework for a statewide/ multi-modal system of economic and social connectivity.<br />Commuter Rail, High Speed Rail, & Support Transit<br />Airports <br />Ports<br />September 29, 2011<br />Page 55<br />
    95. 95. FRAMEWORK FOR 2060 VISION:4. CELEBRATE DIVERSITY<br />Recognize and support the unique visioning efforts & lifestyle choices of each community.<br />Regional Visioning efforts<br />Local Visioning efforts<br />Let Cities be Cities; Suburbs be Suburbs; and Rural areas be Rural – one size does not fit all<br />Page 56<br />How Shall We Grow? 2009<br />myregion.org<br />
    96. 96. PRIORITIES FOR A NEW 2060<br />TAKE CARE OF FLORIDA<br />JOBS, JOBS, JOBS<br />CONNECT PEOPLE TO PEOPLE TO PLACES<br />CELEBRATE DIVERSITY<br />Prioritize expenditures as investments to create our desired future – we’re worth it. <br />September 29, 2011<br />Page 57<br />
    97. 97. Florida 2060 Revisited<br />Frances Chandler-Marino<br />Melina Duggal<br />Debra Dremann<br />Charles Pattison<br />Wellyn Land Company<br />