Open Thread 7-25-2009
Monday is our big day. The IHB Community has been invited to an open conference call with Daniel Young, President of Community Development for the Irvine Company. The time is 7:00 PM. The call-in number is 877 269-7289. Callers will be asked to enter a PIN, which is 13113. That allows them to listen to the conversation. If they want to ask a question—and Dan will remind people of this periodically—they need to hit *3. They can also e-mail questions to Dan at info@cardinalhq.com.
We have two threads going in our forums What do you want to ask the Irvine Company?, and An Open Invitation to The Irvine Company. You can also use this open thread to pose questions.
This will be meeting between the makers of our community and the residents who live within it. An opportunity for both parties to learn from each other; you can make your voice heard, and and you can hear from the inner sanctum of The Irvine Company.
Let’s keep this encounter respectful. This kind of direct contact is rare, and if we make this a positive experience for everyone, it will happen more often. This is one of the unique opportunities opened by social networks.
Daniel Young, President of Community Development for the Irvine Company
Dan Young is president of Irvine Community Development Company LLC (ICDC), an affiliate of the Irvine Company responsible for all residential development on The Irvine Ranch®.
As president of ICDC, Mr. Young guides all facets of the Irvine Company’s community master-planning and development process, which began more than 45 years ago. From the villages of Woodbury, Northpark and Woodbridge in Irvine, to the coastal communities of Crystal Cove and Newport Coast, the residential communities on The Irvine Ranch have won many national awards and are admired for their unique character and livability.
Mr. Young came to the Irvine Company in November 1999, after a 20-year career as a real-estate developer and a consultant to the industry. In his previous role with the Irvine Company, he served as executive vice president of Entitlement and Public Affairs, overseeing the company’s entitlement on The Irvine Ranch.
His community involvement includes 11 years on the Santa Ana City Council, including eight years as mayor. In his official capacity as mayor, Mr. Young also served on the board of directors of several regional agencies, including the Metropolitan Water District and the Orange County Transportation Authority.
Mr. Young received his bachelor’s degree from California State University, Fullerton, and his master’s degree in public administration from the University of Southern California.
The Irvine Company is a 140-year-old privately held company known throughout the world as a best-of-class master planner and long-term owner, investor and operator of a large and diversified real estate portfolio. The company also is known as a steward of some of the most beautiful, permanently preserved land in California. In addition to its master-planned communities on The Irvine Ranch® in Orange County, Calif., the company also is known for its portfolio of high-quality investment properties—office, retail and apartment—it owns in San Diego, Orange County, West Los Angeles and the Silicon Valley. The company traces its roots to the 1860s with the assembly of The Irvine Ranch from Mexican and Spanish land grants. The Irvine Company was incorporated in 1894.
One of the first posting I remember at IHB, was from another writer named “irvinesinglemom”. It was the first local commentary that I remember that provided absolute proof that something had definitely gone wrong with the Irvine real estate market. In my mind, it was the initial exposed cracks on the frozen surface of an inevitable collapse of what was to come.
Irvine Single Mom, posted a gratifying story on what was happening in the Villages of Columbus. She told of recent buyers, who had vastly overpaid in a previous development phase, and were protesting with bodies and signs (and balloons too) because the builder had recently dropped the price of the very models they had bought weeks prior. Not only were there words included in her story, there were PHOTOS, showing the home-debtors protesting right across the street from the models being offered by William Lyon Homes. Ohhh, the gleam that came across my heart as I read about the “FOOLS” who vastly overpaid for their shitty boxes. I was so happy about it, I jumped into my Bimmer on Saturday morning, to see it myself. I had to go! But not only did I need to see it, I wanted to talk to these “SUCKERS”, and sympathize (tongue-in-cheek), as I honestly (fingers crossed) felt their pain!
I’m sure most people in this venue know this, but it isn’t healthy to enjoy the pain of others! Even when it is extremely gratifying to finally be right, and jump up and down, then say I told you assholes ... bubble, bubble, bubble. It’s not healthy.
I, like IR, am ready to move on to new things. Move on, and let this obsession go! I don’t need the self gratitude of being right. I don’t want other people to not like me because I was right. I am tired of thinking and obsessing over The Great Real Estate Bubble. You see, I realize these “SUCKERS” are really just an illusion in my mind. Sure, they’re real people, and these events really happened ... but I have taken it way too God damn far. For the most part, home-debtors are not bad people. A lot of them were simply pawns with no motivation outside of a strong desire to obtain The American Dream. The banks offered it to them via a short cut, with very few strings attached, and many people took advantage of it.
I recently had a friend who lost his home to foreclosure. He called me on the phone at the beginning of the year, saying “I’m losing everything”. Gone would be the weekend BBQs ... gone would be our kids playing in the shallow end of his pool ... gone would be the music blasting in his backyard. BUT ~ Before you make assumptions about my friend, understand this; his income has declined about $1,500 a month, his wife left him last fall, and later divorced him, and he never withdrew perceived equity from his house. Do any of you have friends like this?
p.s. ... I found the story written by irvinesinglemom mentioned above. I don’t know what happened to the photos. BTW, homes in this neighborhood typically sell for 30% to 50% less than the top bubble prices ... here’s a good example, and another, and one more.
Cool! It’s nice to be remembered. Been a while since I’ve hung around here. I have a puppy now and between my new baby Aussie, my job and my soon-to-be first grader, there’s not much time to live the hip, happening life we singles are supposed to all be enjoying. <<sarcasm off>>
Seriously, I was filled with schadenfraude and anger when I wrote that post a few years ago - I was, and still am, totally disgusted by the idiots who don’t know how to use a calculator and just assumed that their houses would always go up in value like their high-maintenance bimbo realtors promised them. I tried to keep my post unemotional, however, like the good journalists I worked with on my college newspaper, and the example zovall had already set and IR carried on once he took over writing for IHB.
So can we safely assume that when a profession contains “high-maintenance bimbos”, the market for that very profession is now bubbly
?
Might I suggest rerouting any unresolved anger to the banks and the federal government? They are the only ones keeping us from getting out of this mess.
Question for Dan: I drive by the shelved Laguna Crossing project and wonder when it will be ready to open? It looks like an ideal location and I wonder what the projected target price for the units will be?
Lee - my children missed all the weekend BBQs, having a backyard at all, never mind the pool, being stuck in a little attached condo rental because the housing prices were too high due to the demand from people who couldn’t afford them. Now they are going to have to pay higher taxes throughout their whole working lives to pay off the bad debts and financial system rescue for the people who did have those things.
They priced homes for perfection you had to earn 200k plus per family to pay huge mello roos and HOA fees. What Irvine did was dump the cost of the city onto the new homeowners.
When I added up the taxes it came to 24k on The Columbus homes before the HOA fees. With two kids in college I knew I would be really stretched to buy so I did not.
People just assumed the party would continue, buy a house in time your income would go up, your kids would grow—this was the target buyer.
And they had the loans ready for you to buy. It was all legal of course and I dont’ feel sorry for those folks who bought the story—-they were naive to think nothing could happen to them in the future with their job or income status.
They believed in the picture book story that is Irvine. In reality these events happen in your life time, these folks just learned a real leason in finance.
But the extra costs, the huge taxes, the huge HOA fees and the large profit on these homes were also so unrealistic given the DTI ratio. The young family took in the dream and lost.
Now for the companies to come and try and explain themselves means nothing to those that lost everything and for us now to pick up the pieces I will say this you must lower your costs, lower your profit realize your mistake and give us affordable houses, not boxes on a 3k lot—-but real homes. Otherwise there is no way we will buy.
That is the bottom line folks.
So sad for your children. Have you ever considered emigrating?
It works for many folks throughout the world
When I first knew we had to move down here from the Bay area I went to Quail Hill to look around at the new developments. The RE agent told us to fill out the forms and if we had the better or right numbers we could jump ahead of the list. I thought what?? I have bought from developments before and never heard this phrase. Now I know this was a selection process if I was better on paper than someone else I could get one of the new homes.
This is when I knew something was not right here in Irvine.
The Irvine company has control over their pricing and selection of who they approve for their homes. And they will not change and why should they so far their model of doing business has turned a huge profit for them.
I think it’s a great idea to talk with them but I highly doubt they will do anything to prevent their profit machine from continuing to do business as usual.
And it’s great they given land and we have so many parks but it is not a free market by any means.
I’m not anti-irvine company. I think Irvine is a great place to live. My big issue is the architecture/design. If you are going to plunk down $600K, it should be for more than a stucco box. The older neighborhoods especially need to be redone etc.
As far as the new homes being built. Yes, they are a little better, but still boring. I see other new home communities going up all over the US and they have MUCH more to offer at a fraction of the price. For the money, it should be better, much better.
Just to give you a little bit of information this is the man who has 12 billion in his pocket—-
http://www.donald-bren.com/biography.asp
now ask yourself why so much?? and then go back and read a post here on how much money from one house goes into this pocket—
when you do your homework you will understand why you have a box and why they have billions
Supply/demand. People are willing to pay more for less (square footage, lot size, etc.) in Irvine than elsewhere. As for architectual design and the like, there are a wide variety of choices in Irvine, provided you are willing to live on a very small lot. That is the only limiting factor-the fact that Irvine crams as many houses on to a parcel as possible, because that’s the best way to make the most money.
You really should learn something about economics. Your supply/demand argument that you throw around here (and on other blogs) is just…well…wrong.
The best way to make money is when you have all the cards: pricing, builders, city in your pocket. And you can pick who can buy your homes. I would say this is a bit more than just supply and demand aspects.
IR, I registered at your forum…says it needed time to activate…so I’ll post my questions here.
Hopefully I haven’t repeated someone else’s questions…
1) What’s the latest number of homes being built for the Norhern Sphere? Last I heard it was around 10-12k.
2) Any more development planned for Newport Coast in the near future?
Good luck!
IR, how are you going to control the questions to IHB community?
Just looking at that guys picture makes me ill.
I’m sure all the good sheeple will pant like dogs asking a bunch of silly questions such as “What are your plans for…”
Anything else I would say about the way business is run there would invoke Godwins Law.
I am reading the question over at the forum and this really sums up the problem on supply and demand—it’s called control——from IR—just thought it was hitting the nail right on the head for those of your who still think you matter—-and have a choice—-great question IR—-
“This thread is to brainstorm what questions you would like to ask. What is really important to this community?”
“Here is my question:
We all know that The Irvine Company is the sole provider of housing for Irvine. They have full control (within political constraints) of the type, quantity, location and price of new homes in Irvine. If they choose to, they can limit home production as long as they want and keep prices high through limiting supply. If they choose to build enough to accommodate the next generation of buyers, prices will fall. This is the key decision that impacts all of Irvine. Existing homeowners would probably prefer that supply remain limited, and first-time buyers and renters would prefer a greater supply. With that preamble:
Will the Irvine Company limit supply to control price? or will it build to meet demand?
If you see a post with a question you like, please register a “thanks.” The more “thanks” that are recorded, the more popular the question.”
[ Edited: 22 July 2009 04:08 PM by IrvineRenter ]
The corporation constructed Irvine has all of the soul of a soviet-era siberian work camp, with much better public relations. Good luck with Dan.
I just had to re-register.. Was there a computer problem… I’m certainly no troll… LOL…
With the benefit of 20/20 hindsight, does the Irvine Company believe the use of ‘innovative’ financial products commonly used to purchase homes in Irvine to have been positive, negative, or neutral to the interests of Irvine Company and the Irvine community. If negative, what steps would the company take in the future to avoid a recurrence of what we have seen the past decade?
It’s a positive.
They got PAID.
Look at the jowels on the dude to be interviewed.
Well fed I must say.
it is all about supply and demand, as long as there are suckers who are willing to pay ridiculus amounts for ‘glorified stucco boxes’ then prices will remain sticky. It is a herd mentality out here, people flock to open houses with video cameras in tow, step over one another to over bid each other. this will continue till people recgnize the sham or foreclosure $#$ hits the fan. Untill then very little will change.
TIC has a model that works, why would they be interested in destroying everything by reducing prices.
If we take a step back and look at this ‘slice of heaven’ from an unemotional prespective, we can easily conclude that Irvine is no different from pockets of Aliso Viejo or Misson Viejo. TIC and the Irvine officals have managed to maintain a marketing charade which is very good for them.
Clearly people are buying…TIC isn’t some charity, if you want cheaper housing, Santa Ana isn’t too far down the freeway. It’s not like have a total monopoly on housing in CA, there are substitutes available.
People take this “evil corporation” thing too far…if you don’t like it, leave.
Don’t live in Irvine. Don’t want to.
I just find it an interesting (yet disturbing) business model. To me it would be like living in some type of “Clockwork Orange” world.
Mao would have been very proud of TIC.
It’s like a communist utopia where everybody is equal, yet some are more equal than others.
Having lived in shit cities myself, I can see why Irvine would be attractive to certain segments of the population. Kind of like how Berkeley would appeal to a certain communists and tree huggers.
I hated Irvine when I first arrived as an undergraduate, grew to enjoy it after frequent visits to LA, and downright miss it after moving out of state.
Yes, housing is a competitive business. TIC must be supplying what their buyers find attractive or they would go elsewhere ... and the company would be less successful.
Innovative Financing, Innovative Accounting, Creative Financing and Creative Accounting are code words for watch your wallets you’re about to be had. One big scam and hope that your not holding the bag at the end of the music.
I don’t know what to call happiness when people get a house when they can afford it. Is it pre-schadenfraude?
Most of South Florida is nice developments with so many different styles of homes along with various price ranges.
The planning and zoning was very thought out have berms in between roads, housing developments with walls and beautiful landscaping keeping out the sound. Once you visit South Fla. you would wish we had that kind of diversification.
Here in CA I was surprised at how poor the planning is for example very few people in my development can use or park in their driveway. We just love to get the tickets from the police for poor planning when we park in our driveways.
Easements around the parks are very large and wide while the backyards are extremely small what purpose does this support someone walking twenty dogs at one time?
The misuse of free space is amazing to me—no rules what so ever.
In Fla. a pool has to have ten feet before the end of your property here they abut right up to the homeowners line. This is for the required area to walk around your pool safely.
Condo’s are near the beach not on top of the highways. Where most would want to live.
And now we have the Great Park which I call the Great waste of space. When we need diversification in housing and pricing. Not more parks, what we need is more yards so we all can barbecue!! And how about our own pool!!!
What Irvine is a city for only the very wealthy while they force all the average Joe’s crammed into apartments and small lots. Unless you can afford Shady Canyon, Northpark (some of it) you can’t even fit in a pool.
So sad given the weather here—-
Interesting article! Thanks for posting.