Credit Crunch Visits High Rises

by: Duane Craig - October 31st, 2008   Filed under: Finance

There are a couple of examples where the construction of skyscrapers is stalling out due to credit availability issues. In Chicago, two spectacular residential projects have seen their space sales stall leaving them wanting for construction funds.

Looking like a steel and glass spiral the Chicago Spire was begun in 2007 with a completion date of 2010 (since changed to 2012) and is supposed to be the tallest building in the U.S. at 2,000 feet. There were 34 caissons used in the construction of its foundation and you can see a wealth of construction pictures here. But in a surprising development the architect himself, Santiago Calatrava, has filed a lean against the project claiming to be owed a bit more than $11 million. The developers say 30 percent of the building units are sold while acknowledging the construction site is quiet right now.

The other project, a hotel and condo effort called Waterview Tower is supposed to top out at a little more than 1,000 feet high. One real estate appraiser claims the two projects broke ground and then went for financing. But the developer of the Spire says “the banks should start acting like banks,” and continue lending. In the final analysis, many believe the projects will go on because of the momentum around them.

 

Chicago Spire may one day top out the city's skyline.

Chicago Spire may one day top out the city

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Great American Places Announced

by: Duane Craig - October 30th, 2008   Filed under: Architecture and Design

What does Mill Avenue in Tempe, AZ have in common with Clarendon and Wilson Boulevards in Arlington, VA? You guessed it. They are both finalists in the American Planning Association’s (APA) Great Places in America: Streets. These streets are designated as such because they are places of “exemplary character, quality and planning.” The organization also cites them as places where people want to be and to live and work. There are slide shows of the various winners at the Web site.

Besides the great streets there are categories for neighborhoods and public spaces. Downtown Salem, MA and Greater Park Hill in Denver, CO were in the top 10 neighborhoods, and Portland, OR’s Pioneer Courthouse Square along with Charleston, SC’s Waterfront Park ranked in the public spaces category. APA says the public spaces honorees are places that help promote social interaction and a sense of community. Great streets have both form and composition, character and a sustainable environment. The other category, Great Neighborhoods, capitalize on architecture, design, scale and other attributes to create visual experiences and other qualities.

There is a lot more at the links above along with the complete list and plenty of pictures. There are also guidelines for those who would like to submit an entry for next year’s event.

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Home Energy Tax Breaks Keep Coming Home

by: Duane Craig - October 29th, 2008   Filed under: Green, Home Improvement

As the total 2008 home energy costs begin going over $2,000 for the average U.S. Household, the Alliance to Save Energy put out a reminder about the energy tax break that came as part of the Emergency Economic Stabilization Act of 2008 signed into law on October 3.

The cap is $500 and can be used by those who claimed less than the total credit available in 2006 and 2007. Check with your tax advisor, or the IRS if in doubt as to whether you may qualify.

The kinds of purchases that qualify include:

  • 10 percent of the cost of insulation products, exterior doors and roofing products;
  • Up to $300 toward the full purchase price of central air, heat pump, water heater or bio-gas stove;
  • Up to 10 percent of the costs of Energy Star rated windows;
  • Up to $150 toward the purchase of a furnace or boiler; and
  • This one runs through 2016 – 30 percent of the cost of Energy Star geothermal heat pumps, up to $2000.
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Office Space Morphs To Reflect Change

by: Duane Craig - October 28th, 2008   Filed under: Architecture and Design, Green, Managing

If you have been in the business of building office space there are some changes underway that may make you rethink how this space is built, according to Corporate Portfolio Analytics. Large corporate occupiers of business office space are expected to decline by 40 Percent over the next five years.

The reasons are diverse and span technology, economics, sociology and organizational structures. Instead of the current 250 sf per employee the demand will be more like 150 sf by 2013.  Mobile devices are freeing people from landlines and allowing them to work most anyplace. Then too the Gen X and Y crowds are different from earlier generations in their desire to just take responsibility for their work without having to be seen everyday by their bosses. Currently 40-70 percent of the cubicles in the U.S. are unoccupied during the workday.

So, if you build out this kind of space you may be seeing reductions not only in the sizes of the facilities, but also in the sizes of the individual spaces that are planned for them. Companies will be aggressively trying to balance the cost of building ownership with the number of people they support. Very green solutions should become higher priorities in this pursuit so that operational costs of buildings don’t get too high per employee. While fuel costs have momentarily subsided, in the long term, rising gas prices are going to keep more people from driving to a workplace. Most interestingly it appears this is not just about telecommuting but also about sizing workspaces to fit the type of work.

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Monday Morning Mumblings for 10/27

by: Duane Craig - October 27th, 2008   Filed under: Managing, Materials, Process

PVC Improving at the Cellular Level: In yet another attack on the cost of labor in construction is a continuing drive to improve cellular PVC products. Behaving like wood but having extreme durability with little to no care the material is now undergoing an improvement that reduces its density without sacrificing performance. That is supposed to make it cheaper to manufacture things like trim pieces in particular. The labor savings come in during construction when corner pieces and wraps easily slip over any siding to produce an instantly finished look with all the benefits of cellular PVC. Rohm and Haas shares a video on this topic as it relates to their new foam cell stabilizer that is used in the manufacture of these items.  

Enforcement Bolsters States’ Coffers: Last Monday here you may have read how Ontario is pushing legislation to make workers compensation insurance a mandatory requirement in the construction sector. California already has such requirements yet fully 25 percent of contractors are not providing the coverage, according to state officials. In recent sweeps of construction sites the State Division of Labor Standards and Enforcement gave out almost a half million dollars in fines to those companies not in compliance. Expect to see more of these money-raising activities as more states struggle with dwindling operating revenues.

Moving The Permitting Process Online: Atlanta becomes one of the cities moving its permitting process online as it rolls out ePLANS. The electronic plan submission, review and tracking effort features software by Avolve called ProjectDox. Currently the system is available to those doing commercial alterations and over the next year it will roll out to include the other types of permits. Just think, no more trips to the copy shop to make five large copies you’ll never see again. Plus, plan changes should be easier to incorporate into the final record. The only thing I’m wondering is why it has taken so long. Not specifically in Atlanta’s case, but in general. 

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Connecting Sips to ICFs Demystified

by: Duane Craig - October 24th, 2008   Filed under: Green, Materials, Process

 

The continuing push for better energy efficiency in buildings is leading the charge on the use of insulated concrete form (ICF) structures with structural insulated panel (SIP) roofs. The combination of the two technologies leads to incredibly tight structures that resist the loss of heating and cooling BTUs. 

Every now and then I like to see just how disparate materials are supposed to be connected together. Any mind that has worked in the process of joining concrete and wood can come up with an amazing array of techniques for doing so, but not all of them may be sturdy enough to survive wind loads, or long-lasting enough to survive to the expected end of the structure’s design lifetime.

HUD recently had a few things to say regarding the connecting of SIP roofs to concrete walls and it has made a PDF booklet available to all who might be interested. This is some in-depth that will help you to use the best connection for your area and types of materials being used. Bear in mind that you still need to satisfy your local codes. Below is just one example of how to connect SIPs to ICFS when it comes to roofs.

 

Connecting SIP Roof to ICF Walls - just one example

Connecting SIP Roof to ICF Walls - just one example

 

 

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Nanomaterials Have Two Edges

by: Duane Craig - October 23rd, 2008   Filed under: Materials

Nano technology holds a lot of promising developments for construction and at the same time it is presenting some challenges that may end up diluting those promises.

In a recent instance a spray that is made from carbon nanotubes can be applied to bridges at critical points so a sort of early warning system is set up to alert engineers of potential problems. This sprayed-on material conducts electricity so whenever a crack occurs in the underlying material it breaks the current thereby alerting a computer to higher than normal resistance in the area of the crack. So not only is the damage detected, but the location is pinpointed. This skin will also observe corrosion, which is another major contributor to the decline of the nation’s bridges. This definitely looks like a great advancement.

But on the other side of the coin nanomaterial advantages are showing some signs of being offset by the process used to make them. At the University of Illinois at Chicago researchers discovered the strict material purity requirements, lower tolerances for defects and the overall lower yields related to the manufacturing process of nanomaterials can lead to greater environmental burdens than traditional manufacturing. And at Ohio State University it was found that life-cycle environmental impacts could be as high as 100 times more per unit of weight than for traditional materials.

It’s unlikely that nanomaterials will run aground but it appears they will increasingly be subject to scrutiny with benefits being weighed against known detriments.

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Cordless Drill Battery Blues

by: Duane Craig - October 22nd, 2008   Filed under: Managing, Products 2 Comments

I have a cordless DeWalt drill that came with two 12v battery packs. One of them died and won’t recharge – the charger light blinks continuously and according to information on the the charger that’s when the battery pack should be replaced. I got a little more life out of it by cleaning the contacts and then charging it overnight, running it down and charging it overnight again. But, after few more charges it wouldn’t charge anymore. 

This drill has done a lot of work from deck building to siding to kitchen cabinets. So, I can’t complain too much but it kind of galls me that a new battery costs about half what the whole kit originally cost on sale. These batteries ought to be $10. According to DeWalt, 85 percent of Ni-Cd batteries are used in cordless power tools and the company estimates there are 431 million of these tools in U.S. households. And that number was from 2001. You would think that economies of scale would have kicked in by now and they would be cheap.

But the first step in any battery decision is finding out what to do with the old one. DeWalt recommends recycling the old batteries through Rechargeable Battery Recycling Corporation (RBRC). Basically it tells you where to recycle your old batteries at a facility near you. So I put in my zip code and sure enough there were more than a couple of options including Radio Shack and Home Depot. So, now I can sleep better at night knowing the old battery will be dealt with so I don’t have the fate of the human race on my shoulders if I just throw it in the trash. But, I still need a new battery. Anyone who has ever used a cordless drill knows that if you want to use it for six or eight hours you need at least two batteries.

I read some opinions (expert testimony) regarding the concept of buying refurbished batteries and they were not favorable. If any of you have a contrary opinion I’d like to hear it, but by my readings refurbished is questionable. There is another option where you send in your battery and they rebuild it (isn’t that refurbished?). The one place I looked at, ToolBatteryRefill.com called it “Refilling” the battery and claimed the process they use gives you a battery that will run 20-40 percent longer than the original equipment. I used the form that narrowed down just what my battery was and the cost was $41.25.

An Internet search showed the battery available at a couple of places for $46 (I always round up since the whole 90-something-cent concept used to price things just means it’s going to cost the next dollar anyway). 

So, shipping, handling and other expenses considered, buying new appears to be the way to go.

So, now I come back to costs. In a world that is well polluted wouldn’t you think people would be offering solutions that encourage you to recycle, or reuse your old batteries? The incentive comes in the performance, but the price has to match up as well. Okay, so maybe I’m being too stingy what with the costs of having to dispose of the waste material so let’s say it costs $20 for a refurbished or refilled, and I’ll even factor in another $6 for shipping and handling, both ways. That’s $26. If you know of someone who will deliver to my door a $26, 12v, NiCd battery that will fit my DeWalt drill, and that will last at least as long as original equipment, let me know. Comments are welcome for this post and all the others, too.

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What Headlines Don’t Say About Housing Decline

by: Duane Craig - October 21st, 2008   Filed under: Finance, Industry

As the headlines screamed of the large decline in building permits issued in September, and the plunge in new home construction reaching its lowest in six decades, what went largely unreported is just how important those events may be for housing’s recovery. With building permit issuances finally getting into the 700,000s, and if historical records will hold true, the bottom may be here. 

The number of housing building permits issued in the 48 years from January 1960 to January 2008 has never dropped below 709,000, and whenever the numbers did hit rock bottom they did it in the 700s. In November of 1966 it was 736,000, in March of 1975 it was 709,000, in October of 1981 it was 731,000, and in January of 1991 it was 786,000.

Of course the climb back up could easily take several quarters. The 1966 dive took a year to get back to its previous high. The 1975 adjustment never did recover fully to its previous high of more than 2,300,000 permits issued, but it did get back to an average number in about three years. That was three years of a lot of ups and downs though. The 1981 slide climbed out in 20 months and the 1991 market adjustment did it in 34 months. 

Being at or near the bottom of this cycle means it’s a good time to be reviewing business practices and long-term plans with an eye toward avoiding the kinds of things that may have ended up hurting this time around. The realistic way to view the construction cycles is simply with an understanding that they are going to happen. They offer great learning opportunities for those who are willing to learn.

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Monday Morning Mumblings for 10\20

by: Duane Craig - October 20th, 2008   Filed under: General News, Materials, Products

Ontario Eyes Mandatory Workers’ Comp: Claiming companies that don’t pay workers compensation insurance premiums have an unfair advantage in the marketplace, the Building and Construction Trades Council of Ontario is seeking to put a stop to that. The governmental body is introducing legislation that will make having workers compensation mandatory for those in the construction sector. The agency also says that by expanding the pool of participants the costs to all participants will go down. It is expected that 90,000 workers would be picked up on coverage.

Buildings on the Moon May Go Waterless: Take some lunar soil and add some sulphur and you are ready to pour, er, plop, some concrete down in the form of a building. A University of Alabama professor says the mixing of those two components means concrete could be made without water. Since any water that may be on the moon is in extremely limited supply, and moon dust is not, this makes for some wonderful building opportunities. 

Speaking of Concrete: The material is used the world over and is more and more popular for its formability and strength. But, because it is porous it allows moisture inside where it can corrode reinforcing steel and woven wire mesh. Now, researchers say you can use sodium acetate to make the concrete less permeable. But, where do you get sodium acetate? Why from potato chips of course. It is used to flavor them. This could give the meaning of “lunch break” a whole new slant.

Houses Built from Waste: A UK researcher is writing a recipe for a new material for building homes. This one uses recycled glass, metal slag, sewage sludge, incinerator ash, and pulverized fuel ash to make – you guessed it – building blocks. By binding the components together with bitumen the resulting bloc is six times stronger than a cement block, requires less energy to make, and is made of 100 percent waste material. I can see the instructions now: Combine ingredients in mixing bowl, form into a block and place in very hot oven for awhile. Makes 1 block. This could be on the market in the next five years. Of course great plans like these need great followups. Next they’re going to try blocks made with the help of used vegetable oil, and tentatively have thought about calling them – Vegeblocks.

 

What will they think of next?

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Focusing on the Real Value of Homes

by: Duane Craig - October 17th, 2008   Filed under: Finance, Home Improvement, Managing

The world is searching for value. The things of value that people have relied upon have turned out to be fair weather friends. In the not so distant past people usually had a portion of the value of their homes in equity. Basically there was a portion that they really owned. As the real estate bubble heated up the equity in homes was tapped for all kinds of things, many of which had nothing to do with increasing the home’s value, or helping to keep it maintained. No doubt we all knew of people who owed more on their homes than the homes were worth. One big item that drained home value was consumer goods. Plasma TVs, don’t add value to a home but many home equity lines of credit bought those kinds of goods. Of course as more and more players in the market piled on for the feeding frenzy the values of homes kept rising and everybody was getting rich.

But we now all know this was a fairly large illusion. The truth about illusions is that as long as everybody is still buying into them they continue to live, but as soon as cracks begin to show and some people start running for cover, the illusion fades into stark reality. The illusion that everyone has been sold is that home ownership is a great investment. Sure, when times are heady as in the past five years that holds true, but the reality is that homes are low-end investment vehicles over the long haul, and always have been. If you look at the return on investment of a home over the lifetime of a 30-year mortgage and adjust for inflation, taxes, purchase costs, maintenance costs, insurance and a few other variables a five or six percent return is typical. Of course, you can find all kinds of analyses to the contrary that are enthusiastically put forth by people who have a vested interest in keeping the illusion alive. Still, homes are predominately the easiest way the average person can build some equity – if they actually take the time and trouble to do that and don’t go spending it as quickly as it is earned.

Today, for anyone providing construction-related services to the home sector it is probably more important then ever to figure out ways to help people increase the value of their homes. That means a lot more than just reading the trade press as it heralds the next big remodeling craze, or touts some new product with little long-term proven value, and then rushing out to do as many jobs as possible in the shortest amount of time.

Instead it means getting back to the basics of what a home is all about. Homes are for living in. They are places to get out of the elements and find some measure of safety for resting and eating and attending to family. Making homes warmer in the winter and cooler in the summer, and offering better air quality, more efficiency, less maintenance, ample storage, and the best environment possible for mind, body and spirit puts the focus on the real value of a home. These are the things that in the end will endure, even when market values have to adjust.

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Vote Yourself A $10,000 Bonus

by: Duane Craig - October 16th, 2008   Filed under: For Fun 1 Comment

Sometimes just voting for something can make you some bucks. That’s not likely the case in any political elections this year. It’s a given that regardless of who gets elected, in any of the elections, the costs of government will be going up. So, why not offset those coming costs?  

Just cast your vote for the Ugliest House of the Year Award being offered by HomeVestors America, Inc. The company is going to give $10,000, $5,000 and $2,500 prepaid debit cards to three people who luck out in the draw. People can cast their votes between now and November 15. Winners will be announced December 3.

Of course none of this takes any skill other than the skill to find the web site and figure out how to cast a vote. No doubt all the houses will be at least as ugly as the next so it’s not like much thought would need to go into the process. Then too, since the winners are determined by a drawing it wouldn’t matter anyway just what house you select.

Why not go for it. You know you want to. Below is a shot of last year’s winner. You can vote here.

 

Interior of Ugly House of the Year winner, 2007.

Interior of Ugly House of the Year winner, 2007.

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Dreaming of Trash Solutions

by: Duane Craig - October 15th, 2008   Filed under: Managing, Materials

Now here’s the ticket for drywall days, and other building days when the trash just goes crazy. The Crusher (albeit not a very original name) could vastly simplify the disposal of debris on a job site. This one is for metal and scrap recyclers so it’s probably a bit more than needed on a site, but still the concept could work out really well. The only thing that would need to be worked out is who gets to push the buttons.

The ultimate dumpster.

The ultimate dumpster.

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Delivering Value Is Never Out Of Style

by: Duane Craig - October 14th, 2008   Filed under: Finance, Industry, Process

The size of a home that a person inhabits has always been a measure of community stature and economic ability. The picture of the huddled masses freezing their proverbial asses off in shacks at the bottom of the hill that held the factory owner’s mansion eventually gave people pause, and so the wealthy started moving uptown and congregated in groups of mansions where they wouldn’t have to consider the plight of the average “ner-do-well.” 

This trend was probably one of the causes of the innate desire in people considering the purchase of a home to want to be in the “right” neighborhood. Oh, of course there were the prejudices about race and ethnicity that also figured into the mix. 

In this challenging new era there are a multitude of things that are causing people to reconsider just how big of a home they need, or want. Granted, as long as there are tax advantages to home ownership the rich will always go for the biggest and grandest. But what is going on for the not-so-rich and the upper middle class of eco-conscious homeowners is the desire to have efficient, low maintenance, healthy homes that beyond being easy on the planet, are also easy on their spirits. They don’t want to feel like they are taking more than they are giving back.

So, there are a wealth of new home plans aimed at the small, bungalow type of home, and builders are getting the message. KB Homes pared down a 3,400 square foot home by 1,000 square feet and cut its price from $450,000 ($132.35 sf) to $300,000 ($125 sf). 

Next the builder came out with a line of homes with a base size of 1,230 square feet at a cost of $200,000 ($162.60 sf). And that was in a community that had been ravaged by foreclosures. Do you see where this is going – smaller home, higher cost per square foot on less valuable land. This is like delivering less value at a time when more value is in order. Not that everything should be based upon square foot prices – but it is an indicator of the degree of efficiency throughout the building environment.

Warmington Homes, based in Costa Mesa, CA, is an example of a home builder that is downsizing the homes and keeping square foot costs steady. It took an area that had square foot prices in the $142 range and delivered a smaller home in the $136 range.

I can see the pencils being sharpened already. 

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Global Construction News: Algeria, South Korea and Tanzania

by: Duane Craig - October 10th, 2008   Filed under: General News, Industry

Just Build It Right: In Biskra, Algeria, the housing and town planning minister is cracking down on what he calls “urban anarchy” in building. Armed with additional funds the organizations that police compliance with building codes are imposing sanctions on builders who violate the “rules of urbanism and construction.” While a lot of the rest of the world reels under the current economic storm it seems Algeria is on a growth path. According to the International Monetary Fund the country is expected to post 4.9 percent growth in 2008 and 4.5 percent in 2009.

South Korean Builders On Growth Path: South Korean builders are building more and more of the Middle East. With overall construction orders up a record 45.4 percent year-on-year the boom is being enjoyed by medium and large firms alike. South Korean builders are also increasingly grabbing contracts throughout Asia with a 56 percent gain in that sector. In one interesting collaboration a consortium of South Korean construction companies won a $6.3 billion refinery project in Kuwait. The country’s builders are also handling desalinization and gas facility projects.

Concrete Figures Prominently In Africa: Tanzania is undertaking the construction of the single largest cement plant in the east African region. Expecting demand in that area to grow at twice the rate of projected economic growth of 5 to 6 percent, Kenya’s Athi River Mining (ARM) company will build the plant with a capacity of 4,000 tonnes (4,480 tons) a day. Funding for the project was concluded before the world’s recent economic crisis and it drew from both national and international sources. A spokesman for the project said a reduction in the demand for cement because of the market turmoil is not expected to be significant. ARM is the second largest cement maker in Africa.

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