In another casualty of the housing bust, The Shire, a Lord of the Rings-themed development in Bend, Oregon, has fallen into bank hands, according to the The Bend Bulletin.

The 6-acre property, which only has one-partially completed home and 14 vacant lots, is now on sale for $1.3 million. A public auction in December resulted in no bids which forced lender Umpqua Bank to foreclose in mid-January.

Umpqua had originally loaned developers $3.4 million in 2004 to build out their fantasy "village".

The Shire was conceived as a place where Lord of the Rings enthusiasts could congregate and, as such, the codes, covenants and restrictions of the project reflected this goal.

The CC&Rs promoted the use of English architecture, including unique stonework, artificial thatched roofs, terraced gardens and a network of streams and ponds with a pathway leading to what was called The Ring Bearer’s Court.

In all likelihood however, this vision will never be realized, according to the listing agent.

“The bank is trying to sell it to a single developer,” he said. “The CC&Rs could, in most probability, change.”

Say it ain't so, Bilbo!

(h/t re: PDX)

A billionaire's planned construction of "the world's most expensive home" has soured, Forbes.com reports. Tim Blixseth, owner of The Yellowstone Club near Big Sky, Mont., had plans to build a home valued at $155 million on a 160-acre lot. That undeveloped lot -- the "superhouse" was never built -- has sold for $10 million, Forbes reports.

Another super-rich guy, Donald Trump, has sold a home for $100 million in Palm Beach, Fla., after dropping the price down from $125 million, the Palm Beach Post reports. Trump reportedly paid $41.35 million for the six-acre oceanfront property in 2004.

Some Hollywood moguls who were ready to build a $282 million movie production studio they claimed would bring 2,000 high paying jobs and "a river-like flow" of movie and television shoots to the tiny community of Plymouth, Mass. are getting an education in clearing title.

After winning approval from local residents, securing a promise of $55 million in highway and other infrastructure improvements from state officials, and spending $4.5 million of their own money on preliminary site work and design (see Patriot Ledger story), Plymouth Rock Studios "dropped a bomb" on the town's selectmen this week by announcing that the 1,000-acre site they'd picked has a little problem associated with it: clearing title on 7,058 individual campsites dating back to the early 1900s.

"Tracing the chain of title on each of them is necessary and half of them have serious problems that will take extensive time to rectify," Emily Wilcox of WickedLocal.com reports. The job would take about two years, even if the city tried to take the land through eminent domain, the story said. Two weeks after voters gave the project the go-ahead in a 8,530 to 1,118 vote, Plymouth Rock Studios officials say they're looking at nine other sites, two of which are outside the town.

Makes you wonder what kind of mess rustbelt cities are going to have redeveloping neighborhoods hard hit by foreclosures. Reporting on the city of Cleveland's lawsuit against 21 investment banks and mortgage lenders, Newsweek says the city and surrounding Cuyahoga County have 22,000 vacant foreclosed properties.

"More people have left Cuyahoga than any other county in the U.S. with the exception of New Orleans," County Treasurer Jim Rokakis tells the weekly magazine. "They had a hurricane; we had lenders."

Many of those properties are undoubtedly scattered throughout some neighborhoods that are still viable, but there are probably opportunities to bulldoze others, combine lots, and create public spaces or build larger residential or commercial projects. The National Vacant Properties Campaign provides information and tools for cities tackling such challenges.

The picture above, by the way, is from a set of 32 depicting abandoned homes in and around Missouri taken in last two years and posted to Flickr by Serrator3. Watch the slide show for the full effect. Most or all of these homes appear to have met their fates long before the housing downturn came along (they've also been tagged for inclusion in the "Rural Decay" pool, which has 13,000+ members). More pictures of abandoned homes from other Flickr members.

Some builders are offering price guarantees to new home buyers -- assurances that they will be protected from falling prices not only up to closing, but for a year, two years, or more.

Reno, Nev.-based Pacifc West says its guarantee is good until all the homes in a development are sold.

"Our Life-of-The-Project Price Guarantee is the best in the industry, bar none," the company claims. "Unlike other guarantees that last 30 days or 90 days, ours lasts for as long as your community is selling new homes. If we do reduce the base price of your home model in your community below our guaranteed pricing, we'll write you a check for the entire differece."

Companies offering two-year guarantees include Signature Properties, and CNH Homes, while Cornerstone Homes offers a 12-month guarantee.

The fine print in such offers may specify -- as does Pacific West's "Life of The Project Price Guarantee" -- that they expire when the last home with the same floor plan in a development is sold, or, more ominously, if "all such floor plans are withdrawn from sale." And, of course, if a builder goes out of business, well...

Bill Sumski, managing director for Paladin Pacific LLC, noted the trend at the annual Fisher Center Real Estate Conference in San Francisco this week (see Inman News story). Sumski that while builders are slashing prices to compete with foreclosure properties, buyers dry up when the market is headed down. "There is a great fear about making a large purchase right now," he said.

You might recall another recent Inman News story about an outfit in Utah, EquityLock Financial Inc., that sells 15-year contracts as a hedge against falling home prices. The contracts, which aren't available in the riskiest markets, are being marketed to developers and builders for 1.5 percent to 2 percent of a home's sale price.

Signature Properties is offering its "Live Secure" guarantee on homes in some California markets where prices have fallen hard, including Sacramento and Oakland. Pacific West says it's offering its "Life of the Project" guarantee in Reno and all but one of its projects in California, and has already seen a boost in sales.

The debate over super-sized homes and sprawl flared up in the Pacific Northwest this week with the torching of several multi-million-dollar show homes. The National Association of Home Builders is blaming the Earth Liberation Front for a series of fires that destroyed four new homes in a Seattle suburb.

The Seattle Post-Intelligencer newspaper reports that fires destroyed three homes in Woodinville, Wash., and a sign at the scene bore initials "ELF."

The homes that burned in Woodinville were a part of a controversial development -- the homes were built to demonstrate environmentally friendly or "green" building techniques and were the first homes built as part of a 100 acre cluster development. A group of neighbors had sued to block the project, which the Snohomish County Council approved in March 2007, according to the newspaper report.

The sign left at the fire site stated, "Built Green?! Nope BLACK!," and also referred to "McMansions" and cluster development as "not green."

Law enforcement officials quoted in the report said that the fires did bear some resemblance to past ELF-linked arson fires, though the investigation hasn't concluded. The state's Building Industry Association is offering a $100,000 reward for information leading to convictions of the culprits.

The National Association of Home Builders issued a statement that blamed ELF for the blazes. "The FBI has previously identified ELF members as domestic terrorists and attributed many millions of dollars worth of damage to new homes and communities to this extremist group." NAHB charged that such attacks "destroy property and put human lives in danger."

Several similar home arsons have been reported in the Pacific Northwest and elsewhere in the past decade. In 2005, incendiary devices were recovered at a luxury home development site in the Sacramento, Calif., area (see Inman News), and several area newspapers published a letter that was allegedly penned by ELF members. A suspected ELF member is currently on trial for her alleged role in serving as lookout during the firebombing of a university building in 2001.

Radical environmental groups aren't the only opponents to big houses -- some cities have passed "anti-mansionization" restrictions to keep house sizes in check.

The National Association of Home Builders is a co-sponsor in a day-long seminar planned Friday titled, "State and Local Immigration Laws: An Open Dialogue."

"Business leaders, state officials, and immigration experts will examine the current legislative proposals on immigration at the state and local levels, the economic impact of these proposals, and how to improve dialog between businesses and public officials to prevent unintentionally hindering economic growth," according to an event announcement.

Economists have puzzled over construction labor statistics that haven't reflected the type of decline they expected to see in construction jobs -- a likely factor is that there are many undocumented workers in the construction industry who are invisible to most of the typical statistical reports (see related blog post).

Builders know that immigration reform could be bad for the industry if it cuts off the industry's supply of workers: The builders' trade group announced back in June that it was taking a strong stand against immigration reform legislation that it said could "threaten small business."

NAHB CEO Jerry Howard said at that time that a proposed federal immigration reform bill had several problems: it "could be used to unfairly prosecute an employer who unknowingly hires an illegal alien; general contractors could be held responsible for the legal status of employees hired by subcontractors; the program to provide a future flow of immigrant workers for the construction industry is unworkable; the new, mandated electronic verification system is untested; and the new record-keeping requirements are unduly burdensome, especially for small businesses."

Howard will participate in the Friday conference, along with Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, and state Rep. Sharon Tomiko Santos, D-Wash. The chamber group, along with the National Conference of State Legislatures and National Roofing Contractors Association, are also co-sponsors of the event.

Home builder Beazer reported this week that it cut 650 positions -- or 25 percent of its workforce, in October (see Inman News). Since peaking in March 2006, the company's workforce has been slashed by about 50 percent "through reductions in force and attrition," the company reported this week. The company referred to the major layoff and dramatic downsizing in workforce as "recent headcount reductions."

Meanwhile, an investment group that works with pension funds sponsored by affiliates of a group of unions that collectively represent about 6 million members is asking for another head to roll at Beazer: that of the CEO and president.

In a letter dated today, CtW Investment Group executive director William Patterson recommends that Beazer swiftly replace CEO and president Ian J. McCarthy, charging that a "combination of improper practices, compliance failures and poor corporate governance ... constitute a stinging indictment of Beazer's leadership in general and of Mr. McCarthy in particular."

It wasn't CtW's first jab at home builders. In September, the group issued a letter charging that builders "are not passive victims here," and calling for the boards at each of the 11 largest home builder companies to establish legal and regulatory compliance committee of independent directors "to conduct a comprehensive review of the company’s compliance status and implement a compliance program to detect and prevent material compliance failures."

Beazer has been beset by troubles in the past year, including federal and internal investigations, the attempted destruction of documents, an admission of business practices in violation of U.S. Housing and Urban Development Department regulations, shareholder lawsuits and the pending restatement of earnings. Heap onto that a dwindling stock price, a national credit crunch and an ailing real estate and mortgage market.

Beazer reported a cancellation rate of 68 percent for the fourth quarter of the fiscal year ended Sept. 30, and a 53 percent decline in net new-home orders for the quarter compared to the same quarter last year.

Beazer, though, is not the only builder that is in trouble, and some analysts have said that one or more major builders could go belly-up during these market doldrums.

What does the $58 billion U.S. trade deficit have to do with innovation in the housing market? Here's a tangent I bet you never thought of: Every day, the United States takes in more goods than it exports. In addition the goods the U.S. exports are often high tech, or software-based products that do not require a great deal of shipping volume. As a result, America has a giant surplus of shipping containers. A quick check on eBay gives you an idea of just how cheap and plentiful these giant steel structures are.

While anyone in search of a cheap storage shed solution can see the opportunity this provides, some architects are looking at shipping containers as innovative, new ways to build unique, yet affordable housing...

Projects vary in scope from simple studios to high-end modern housing, and grassroots forums full of prospective builders have formed to discuss this new idea in home building. Possibly the most impressive completed project is Container City, a 100-unit, multifamily live/work space in London.

Building with containers has some unique advantages. It takes recycling in home building to an entirely new level. The ability to "ship" a simple home also makes them ideal candidate for emergency housing. They can also be built at affordable rates, especial when comparing other building techniques used to construct modern-style homes.

But are shipping containers truly a viable option, or are they the modern equivalent of geodesic dome homes?  Gregory La Vardera, a New Jersey-based architect whose projects/designs include innovative home building materials like steel frame construction and structural insulated panels (SIPs) makes a case for this building method:

"As a form of prefabrication IBUs have certain several that make them desirable. The first is their inherent strength. Some of the first prototypes were built in hurricane prone areas. The structural properties of the box goes a long way towards reducing risk. The second is their transportability. The standard ISO dimensions are truckable without special road permits or leading/following vehicles, all which create additional expense. Without those additional transport issues it is much easier to move modules. Third, the steel construction obviously is not flammable, nor does it contribute to the growth of mold or provide habitat for insects. IBUs out perform conventional construction in many ways. They can be used to build homes that appear very conventional, or they can be used exposed for a contemporary aesthetic - my own preference."

As a mortgage broker by trade, my first thought is, "How am I ever going to get that financed?" However, where there's a will, there's a way. I doubt shipping container-based homes will ever replace stickbuilt as the popular choice of construction, but for a builder looking for an affordable, green, efficient, and unique home, it's time to start looking back inside the box.

--Todd Carpenter, Lenderama

Home builder KB Home, which has had some troubles with past stock-option grant practices, announced today that the company is not a target of a Department of Justice investigation into stock-option practices.

The DOJ "has informed KB Home that it is not a target of this investigation," KB reported. "KB Home has and intends to fully cooperate with any government agency looking into this matter."

KB in November announced the resignation of CEO Bruce Karatz, who had led the company for 34 years. Karatz agreed to pay $13 million to KB after an investigation found that the company had incorrectly reported stock-option grants from 1998-2005 (see Inman News story).

Matt Heaton laid a big compliment on Inman News columnist Arrol Gellner.
Below is the column that Matt mentioned. Enjoy.

American architecture turns drab
By Arrol Gellner

Traveling the United States has, among other things, gently tutored me that the residents of Wilkes-Barre, Pa., pronounce their town's name WILKS-bree, not Wilks-BAR; that the good citizens of Vermont call their capital MontPEELyer, not MontepeLEER, and that that lovely town in southern California is called LaHOYA even though it's spelled La Jolla. These are nuggets of everyday wisdom that book learning can seldom impart, but that being on the spot can teach one in a hurry.

Alas, traveling the U.S. also reveals a dismaying transformation that's more obvious year by year: What was once a nation of kaleidoscopic architectural variety is slowly being turned into a homogeneous landscape stretching from coast to coast -- one in which freeways and boulevards, suburbs and downtowns all look more or less like their counterparts everywhere else.

As a nation founded on individualism, it's a sad trend, especially since it's being furthered by a number of forces we usually think of as positive.

One is our ever-increasing speed of travel and communication. Among the earliest such milestones was rail travel, whose speed and convenience profoundly shrank the nation during the latter half of the 19th century, linking city, farm and suburb. Our familiar standard time zones -- an attempt to rationalize train schedules nationwide -- are one enduring legacy of this period.

A generation later, the rise of the automobile set off even more dramatic changes, culminating in the construction of the interstate highway system after World War II. And as American cities were brought closer, regional distinctions became more blurred. The interstates also hastened the rise of standardized architecture, beginning with off-the-shelf designs of gasoline stations, hamburger joints and motels. Suburban shopping centers were next, anchored first by large chain department stores and later by the ubiquitous big-box outlets.

Now the last bastions of regional distinction, the downtown cores, are succumbing to the same brand of monotony. In city after city, shopping streets are lined almost exclusively with the usual suspects -- the Gaps, Barnes & Nobles, Banana Republics, and the other overfamiliar retail chains -- bringing on a rather queasy sense of deja vu. Is this Portland, Ore., or Portland, Maine?

Civic design-review boards, who fancy themselves the guardians of the built environment, have only helped increase urban banality by promoting the idea that there are "right" and "wrong" styles of architecture for such settings. At the moment, traditionalism is the reflexively "right" style, and those eerily similar shopping streets with their happy applique storefronts are as much a product of modern planning ideals as they are of chain-store commercialism.

Lastly, for all its positive effects in networking America, the very universality of the Internet is ironically helping dissolve what few traces of regional idiosyncrasy remain. What a loss it will be if the brilliantly uneven patchwork quilt that is America is allowed to fade into a monotone devoid of the offbeat or the unexpected -- a nation whose cities have been Wal-Marted, Old Navied and Starbucked, networked and new-urbanized into lookalike places, set apart by little more than signposts reading "Welcome to Wilkes-Barre," or Montpelier, or La Jolla, or your town.

Copyright 2007 Arrol Gellner