San Francisco and Kansas City Top Forbes List of Vacant Cities

Where Vacancy Rates Are Rising
by Zach O'Malley Greenburg
See the article at forbes.com here

The big news in Kansas City is the Chiefs' off-season acquisition of quarterback Matt Cassel. Filling in for injured superstar Tom Brady in New England last season, Cassel became a starter for the first time since his senior year of high school.

When trading for a backup quarterback is cause for citywide celebration, it's a sign of a metropolis starving for good news--and perhaps an indicator that other troubles are afoot.

Indeed, the Kansas City metro area tops our list of America's Abandoned Cities. In Kansas City, rental vacancy rates rose from 11.9% to 15% over the past year; homeowner vacancy rates nearly doubled, up from 2.1% to 3.8%. Comparatively, the average homeowner vacancy rate in the country's 75 largest metro areas improved slightly from 3% to 2.7%, while the rental vacancy rate edged up to 10.2% from 10% a year ago.

Kansas City isn't the only metro where rental and homeowner vacancy rates are rising in tandem. Second on our list is the San Francisco-Oakland metro, where high prices are pushing Bay Area residents out of the region. Third is Tucson, Ariz., where the aftermath of the housing boom has left a glut of inventory. The pair's predicament illustrates both sides of the vacancy coin.

"There really are two reasons why you'd have vacancies: supply-related and demand-related," says Nicolas P. Retsinas, director of the Joint Center for Housing Studies of Harvard University. "A number of these places have experienced substantial overbuilding, which would lead you to have supply issues. Others, with troubled local economies, are more demand-related."

Many of the cities on the list are still digging themselves out of the wreckage of the real estate bubble. Miami, which ranks No. 8, owns a whopping 12.7% rental vacancy rate, up from 11.4% a year ago; residential towers built in the final stages of the boom now stand as empty monuments to an over-hyped market downtown. Homeowner vacancy stands at 5.6%, up from 3.8% last year, thanks mostly to a spate of foreclosures. According to Trulia.com, 40% of the homes available in Miami's city limits are foreclosures.

To form our list, we looked at vacancy data from America's 75 largest metropolitan statistical areas and metropolitan divisions (or metros)--geographic entities defined by the U.S. Office of Management and Budget (OMB) for use by federal agencies in collecting, tabulating and publishing federal statistics.

Our rankings, a combination of rental and homeowner vacancy fluctuation rates for the 75 largest metros, are based on year-over-year changes in the first quarter from the Census Bureau. Each metro was ranked on the year-over-year change in rental vacancy and homeowner vacancy rates; the final ranking is an average of the two.

San Francisco boasts balmy weather, seaside diversions and the best baseball stadium in the country.

But despite the perks, the Bay Area is losing people at an even greater clip than Miami--and ranks second on our list. Rental vacancy rates swelled from 4.7% to 7.1%; homeowner vacancies more than tripled from 1.1% to 3.4%. Why the dramatic change?

"One of the things we're noticing is that rents are still high," says Ken Shuman, a Bay Area-based spokesman for real estate data provider Trulia.com. "What we're also seeing is the economy. San Francisco, of all cities, is the most transient. People flock here when times are good--they don't mind paying high rent as long as pay is high. Now, in many cases, wages are frozen or reduced."

And that's if you're lucky enough to still have a job. According to the Bureau of Labor Statistics' latest reports, Bay Area unemployment has more than doubled since last year, up from 4.6% to 9.4% as of April. Many laid-off workers aren't sticking around.

"People are migrating. It happened after the dot-com bust too," says Shuman. "As much as it's a beautiful place to live, you really have to think about lifestyle. There's no point in being here if you can't enjoy it."

Second Annual Ohio City Blues and Brews Fest Set for September 19

You can order your tickets at www.ohiocity.com.

Join us for the second annual Ohio City Blues Fest on Saturday, September 19, at Wendy Park on Whiskey Island.

Come hear six fantastic blues acts and enjoy a wide range of craft and import beers, wine and food for purchase. Tickets for admission to the festival are just $15 in advance or $20 at the door. Children under 10 are free. Tickets are on sale now. Capacity is limited to the first 2,000 attendees.

The event, which benefits Ohio City Near West Development Corporation and the Wendy Park Foundation, kicks off at 2:00 p.m. with a special acoustic set by Jeff Powers, followed by Memphis Cradle. The Colin Dussault Blues Project, the self-proclaimed “hardest working band in Northeast Ohio," makes a return appearance to the Ohio City line-up, and are followed by local favorites the Armstrong-Bearcat Band. Walkin' Cane and his band keep the evening jamming until the closing set by the Blues Disciples, a Milwaukee-based quintet making their Cleveland debut.

The performance schedule is as follows:
2:00-2:30: Jeff Powers
3:00-4:00: Memphis Cradle
4:30-5:30 p.m.: Colin Dussault Blues Project
6:00-7:00 p.m.: Armstrong-Bearcat Band
7:30-9:00 p.m.: Walkin’ Cane
9:30 p.m.-11:00 p.m.: Blues Disciples

In addition to the music, Cleveland Plays will sponsor a volleyball tournament from 1:00 – 5:00 p.m. at the Wendy Park sand courts adjacent to the music venue. All participants in the tournament receive admission to the festival. For more information on the tourney, contact Cleveland Plays.

To keep abreast of the latest on the Ohio City Blues Fest, join the event's Facebook page.

In Praise of Shopkeepers

In Praise of Shopkeepers
It Takes Courage These Days to Start a Useful Business

By JOSEPH EPSTEIN
Published in the Wall Street Journal, July 17th, 2009

Within three blocks of my apartment in Evanston, Ill., are 21 restaurants, six coffee shops, five manicurist-pedicurists, four cellphone purveyors, three dry cleaners, two quite good libraries, one multiplex theater, and (not a partridge in a pear tree) a paucity of interesting and useful shops. Shops we do have, but they are preponderantly corporate-owned: Design Within Reach, Joseph A. Bank, North Face, Athletica, LA Fitness. Lacking are the odd shops, the curiosity shops (to use the Charles Dickens' title), whose character and contents might pleasantly surprise a passing pedestrian.

My friend Edward Shils, the Cambridge and University of Chicago sociologist, used to say that he judged a city by the number of blocks of interesting shops it contained. By this measure, he felt, London and New York surpassed all others. By the same measure some cities scarcely qualify as cities at all: Los Angeles, for example, and possibly San Francisco. I do not count as interesting those shops in parts of cities that I think of as Poloville, after the logo of Ralph Lauren. Ah, those gentle strolls through Poloville, its shops filled with goods only a person who no longer cares about money would buy: Prada, Dunhill, Chanel, Barney's, Gucci, Emilio Meshuganah, and the rest.

Evanston used to be teeming with shops, or so I remember from my boyhood. In those days, it was the retailing mecca of Chicago's North Shore suburbs. People drove in from as far away as Lake Forest (home, you will recall, of F. Scott Fitzgerald's Daisy and Tom Buchanan) to shop in Evanston. Women's and men's clothing stores, elegant ceramics shops, and serious jewelers were then in business. But the advent of shopping malls, especially one in nearby Skokie called Old Orchard, put paid to Evanston's retail glory days.

Slowly the good, useful shops began to fall away. These were replaced by shops catering to students, that transient class, at Northwestern University, located on the northeast end of Evanston. Downtown Evanston is Taco Bell country now, land of Starbucks and Burger King and The Gap, though it is good to report that a landscape disfiguring McDonald's not long ago went belly up at a major intersection. Did things, I sometimes wonder, have to turn out this way?

Three or so miles south of Evanston is a revived Chicago neighborhood, once chiefly Swedish working class, called Andersonville, on whose main thoroughfare, Clark Street, reside a charming gallimaufry of odd shops and non-franchise restaurants. Andersonville has been gentrified, or, more precisely, gayified, for many gay and lesbian couples now inhabit its older homes and apartment buildings. Upon the advent of gays and lesbians, a rich array of shops almost invariably follow.

Walking along Clark Street in Andersonville one never knows upon what one's eye will alight. Here is an excellent independent bookstore, specializing in women's and children's books; here is an unpretentious and excellent shoe store with good prices; here is an elegant pastry shop, run by a handsome young Italian couple. There, tucked into a small space off Clark Street is a hot dog joint, which gets the Chicago hot dog just right, with properly steamed bun and appropriately greasy French fries; and there is a thrift store, loaded with surprising items. The element of unpredictability, of delightful surprise, should be part of the adventure of shopping -- an element precluded by the standard stores never owned by anyone on the premises but, as far as one knows, two Saudis in Houston.

"England is a nation of shopkeepers," remarked Napoleon, unconsciously quoting Adam Smith and suggesting that they, the English, as mere shopkeepers, were unfit to fight the French. Well, we know how the shopkeepers fared at a place called Waterloo. No great surprise, really. Considerable courage and perseverance are required to start and keep a good shop running. Especially is this so today, when real estate rental is expensive, taxes on profits high, and the prospect of being clobbered by a national chain store moving in discourage the initiative needed to open a useful shop.

Running a good shop is a service to one's community, of much greater value, in my view, than the work of two hundred social workers, five hundred psychotherapists, and a thousand second-rate poets -- and more honorable than the efforts of the vast majority of the members of Congress. A nation of shopkeepers, far from being the put-down Napoleon thought, sounds more and more like an ideal to which a healthy country ought to aspire.

A Trend to Watch: New Appraisal Rules Impact Housing

Confronting New Appraisal Rules, Impact on Housing
By Paul Gores

RISMEDIA, July 2, 2009-(MCT/RISMedia)-When Chad Gartzke put his three-bedroom ranch home in Wauwatosa up for sale for $196,000, one of the first people to view it liked the house so much she was willing to pay $196,500 to make sure she got it.

Despite a tough residential real estate market, it looked liked smooth sailing for Gartzke, who already had his eye on a bigger house in Richfield for him and his family.

Then the appraisal came in.

The appraiser concluded the house was worth $190,000, a judgment based in part on information about sales of “comparable” area homes. In turn, the buyer’s mortgage lender didn’t want to finance a house for more than its appraised value.

After the appraiser refused to reconsider what Gartzke and his real estate agent considered a flawed valuation, they were left to try to salvage the sale with a new deal.

The buyer ultimately was able to come up with another $1,000 for the down payment, and Gartzke reluctantly lowered the selling price to $191,000.

“Honestly, had we not had another house lined up that we wanted to purchase, we probably would have just called the whole deal off and tried our luck with another buyer and another appraiser,” Gartzke said.

Gartzke’s case isn’t an isolated one, real estate and mortgage professionals say. They contend home values, already hurt by the bad economy, sometimes are being worsened unnecessarily by low appraisals stemming from new rules meant to prevent the kind of puffed-up valuations and conflicts of interest that helped fuel the housing bubble.

Under an industry code of conduct that took effect May 1, mortgage brokers, real estate agents and loan officers are prohibited from selecting home appraisers. In order to avoid trouble with the rule, called the Home Valuation Code of Conduct, many lenders are hiring companies that put together pools of appraisers and then assign them to individual housing transactions, they say. The code applies to mortgages that will be sold to Fannie Mae or Freddie Mac.

Real estate agents and mortgage brokers say it has led to an increase in questionable or stingy valuations by appraisers who are leery of producing estimates that are too high, or who may be from outside the housing market and unfamiliar with the nuances of neighborhoods to which they’re sent.

“On one of the condos we just got an accepted offer for in the West Bend market, the appraiser that went out there was somebody from Racine,” said Scott Stortz, the owner-broker of Star Properties in Jackson.

Home appraisals that come in at lower-than-agreed-upon sale prices can kill deals, some say. At the very least, industry professionals say, they are delaying sales and undermining momentum that the housing market needs to regain. They say the drop in appraised values often is particularly large for high-end homes for which there now are few recent comparable sales, and argue the appraisal can cripple plans to sell or refinance — even when everything else seems in order.

“The appraisal is really the one and only subjective item in the loan file because it’s the opinion of the appraiser,” said Brian Wickert, president of Accunet Mortgage in Butler.

Nationwide impact

Last week, Lawrence Yun, chief economist for the National Association of Realtors, said poor appraisals are “stalling transactions” nationwide.

“Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” Yun said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

Congress has been listening to testimony on the issue.

The appraisers, however, say their valuations simply reflect what’s happened to the market over the last few years.

Bill Garber, director of government and external relations for the national Appraisal Institute, said appraisals are meant to be a risk-management tool for lenders “who typically don’t want to lend beyond what the value of the collateral is worth.”

Late last week, Representatives Childers (D-MS) and Miller (R-CA) introduced legislation requesting an 18 month moratorium on the Home Valuation Code of Conduct (HVCC).

“The introduction of this legislation is a victory for consumers and members of the industry alike,” said NAMB President Marc Savitt, CRMS. “We thank Congress for recognizing the need to address the issue of appraiser coercion without causing undue harm to borrowers or diminishing competition in the marketplace.”

NAMB has taken an active stance against the HVCC since its introduction in March of 2008. “We urge Congress to pass H.R. 3044 as soon as possible to ensure that more borrowers will not be negatively impacted by this de facto rule,” stated Savitt. “In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo’s rule.”

“Appraisers don’t make the market. They simply report what is occurring within the markets, and they are sort of the eyes and ears of the lender,” said Garber, whose organization is the nation’s largest association of appraisers. “In the end, it’s really a lending decision.”

Garber said that failure to enforce rules meant to keep appraisers separate from real estate agents and mortgage brokers-who, of course, make money when home sales and refinancings are successful-had put appraisers “under fire from these parties with a vested interest for many years.”

“People who stand to benefit by the closing of these loans are no longer in the position they once were in terms of dictating the appraisal process,” Garber said.

Response too late

There’s little doubt there was collusion nationwide in past years between some appraisers and lenders, which led to abuse, said Steve La Due, vice president of business development for Waterstone Mortgage in Pewaukee. It wasn’t widespread here, he said, but everyone must obey the new rules.

“The government’s response to appraisal problems is they are locking the barn door after the horse is gone in a big way,” he said.

Mike Polega of Re/Max Realty 100, who was Gartzke’s Realtor, said he’s concerned that low appraisals are having a negative effect on a real estate market that had been picking up.

“I’m not proclaiming that a half-million homes or more were lighting the world on fire, but that engine at the lower end was starting to build back up and there was some confidence-building going on. It’s this kind of thing that dampens that kind of spirit,” Polega said. “To me, that’s the bigger consequence of this.”

Copyright © 2009, Milwaukee Journal Sentinel
Distributed by McClatchy-Tribune Information Services.

New York Times Covers Fortieth Anniversary of Cuyahoga River Burning

From the Ashes of ’69, a River Reborn
By CHRISTOPHER MAAG
Published: June 20, 2009 in New York Times

CLEVELAND — The first time Gene Roberts fell into the Cuyahoga River, he worried he might die. The year was 1963, and the river was still an open sewer for industrial waste. Walking home, Mr. Roberts smelled so bad that his friends ran to stay upwind of him.

A healthier Cuyahoga River in Cleveland, which was known as “The Mistake by the Lake” after the river caught fire in 1969. Recently, Mr. Roberts returned to the river carrying his fly-fishing rod. In 20 minutes, he caught six smallmouth bass. “It’s a miracle,” said Mr. Roberts, 58. “The river has come back to life.”

Monday is the 40th anniversary of the Cuyahoga River fire of 1969, when oil-soaked debris floating on the river’s surface was ignited, most likely by sparks from a passing train.

The fire was extinguished in 30 minutes and caused just $50,000 in damage. But it became a galvanizing symbol for the environmental movement, one of a handful of disasters that led to the creation of the Environmental Protection Agency and to the passage of the Clean Water Act.

“The Cuyahoga River fire was a spark plug for environmental reforms around the country,” said Cameron Davis, who was recently appointed to become the special adviser to the E.P.A. on Great Lakes environmental issues.

The fire turned Cleveland into “The Mistake by the Lake,” a national punch line that would endure for decades. Meanwhile, the city worked to reclaim its river.

Today, the Cuyahoga is home to more than 60 species of fish, said Jim White, executive director of the Cuyahoga River Community Planning Organization, a nonprofit group that coordinates cleanup efforts. Beavers, blue herons and bald eagles nest along the river’s banks. Long sections of the Cuyahoga are clean enough that they no longer require aggressive monitoring, regulators said.

“We’re very impressed with the progress made in the Cuyahoga,” said John Perrecone, a manager of Great Lakes programs for the E.P.A.

Other rivers in industrial cities have experienced similar rebirths, said Matthew Doss, policy director for the Great Lakes Commission, which oversees development and environmental efforts in the region for the United States and Canada.

“The Cuyahoga’s progress is notable because of how infamous it was,” Mr. Doss said. “This 40th anniversary gives us an opportunity to celebrate the progress we’ve made nationwide.”

The 1969 fire was tiny compared with those that engulfed the Cuyahoga and other rivers that received large amounts of industrial pollutants from the 1800s through the 1950s. One reason it received national attention, including a prominent article in Time magazine, was that the problem of rivers catching fire was mostly solved by then, said Jonathan Adler, an environmental law professor at Case Western Reserve University.

The outrage caused by the fire was a symptom of a society starting to leave its industrial identity behind, Professor Adler said.

“In the 1930s, when most people in Cleveland worked in factories, a fire on the river was considered just a nuisance,” he said. “By the ’60s, there was a hunger for symbols of humans’ insensitivity to the environment.”

The cleanup of the river advanced on many fronts. A year before the fire, Cleveland residents voted to tax themselves an additional $100 million for river restoration. Since then, local industries and the Northwest Ohio Regional Sewer District have spent $3.5 billion to reduce sewage and industrial waste pollution, Mr. White said.

The sewer district built miles of subway-tunnel-size tubes beneath the city. The tubes hold excess rainwater until it can be processed by treatment plants, reducing the number of times that plants become overwhelmed and spew sewage into the river.

In the next 30 years, Cleveland-area residents will spend about $5 billion more on the wastewater system, said Julius Ciaccia Jr., sewer district director.

“This didn’t happen because a bunch of wild-haired hippies protested down the street,” Mr. Perrecone said. “This happened because a lot of citizens up and down the watershed worked hard for 40 years to improve the river.”

Local governments removed dams, which trapped pollution and impeded fish migration. In 1974, President Gerald R. Ford created the Cuyahoga Valley National Recreation Area, which became a national park in 2000. The park saved miles of the river from suburban development.

Problems remain, however. The E.P.A. sued the City of Akron in February for dumping excessive amounts of sewage into the Cuyahoga. Along the last 5 of its 100 miles, the river is enclosed by steel walls and dredged regularly for commercial ships, making it difficult for habitats to recover.

“The good news is that we know what the problems are, and we know what the solutions are,” Mr. Davis said. “Now it’s a matter of getting the funding, rolling up our sleeves and doing the work.”

On Monday, people who have worked for years to clean the Cuyahoga will celebrate at its banks. “It’s just remarkable,” said Steve Tuckerman, the Cuyahoga River specialist for the Ohio Environmental Protection Agency. “I never thought I would see in my lifetime, let alone in my career, such an amazing comeback of a river.”

Cleveland Public Art Sponsors Design Competition for Downtown Bike Station

Call For Entries

Cleveland Public Art in partnership with the City of Cleveland invites interested artists, designers, architects, and other creative professionals to submit design ideas for a permanent public art project that will call attention to and raise the visibility of a new commuter bike facility being constructed in downtown Cleveland.

Eligibility

This project is open to local artists, architects, designers, creative professionals, and students of all ages. (Applicants must be a current resident or student of the State of Ohio) Collaborations are welcome.

Location

The site is located between the Gateway Sports Complex and the E. 4th Street neighborhood. The new bike station will be located on the ground floor of the Gateway Parking Garage. The area surrounding the bike station is among the most visited locations in the city, with more than 3 million visitors annually to the nearby sports complex and E. 4th Street neighborhood.

Requirements

Please submit one 24”x 36” board that contains as much information as you need to convey your idea. ONLY ONE SUBMISSION IS PERMITTED PER PERSON OR TEAM. Entries must be mounted on firm cardboard or on foam core. The name, address, email and phone number must be labeled on the back of the submission. Any submission with the artist’s name on the front will be disqualified. Anyone under the age of 18 must include a parent’s or guardian’s name and phone number.

Sponsors

Cleveland Colectivo

Competition Deadline

06/26/2009

Budget

An additional fee of up to $3,000 will be paid to the winning artist or team for any additional time that is required to implement the project. The implementation budget for the selected design is $20,000.

Awards

Three cash prizes will be awarded. Each winning entry will also be eligible for fabrication and implementation. The first prize winner will receive $1,000, $750 will be awarded to second place, and $500 will be awarded to the third prize winner. CPA also reserves the right to implement designs not associated with this competition, in the event that winning entries cannot be fabricated. All entries will be judged by an independent jury of arts professionals, neighborhood constituents and design professionals. CPA reserves the right to use all entries for publication purposes. The winners will be notified by mail. Submissions will NOT be returned.

Larchmere Porchfest Set for June 20th - Check it Out

Larchmere Porchfest is a FREE event that will be held on June 20, 2009 in the Larchmere neighborhood of Cleveland. For one day, and one day only, porches will transform into stages featuring local musicians. Based on a similar event in Ithaca, New York, Larchmere Porchfest will highlight local talent, showcase exciting living options and create a fun and exciting atmosphere for socializing... and dancing!

For complete information, visit www.larchmereporchfest.com.