Category Archives: Real Estate Strategies

Nanaimo’s Secret

Nanaimo is a paradox.  For those arriving by ferry or float-plane from Vancouver, its beautiful, sheltered harbour is the gateway to a dispiriting four-lane crawl of strip malls, used car showrooms, superstores and drive-throughs. The town prospers and grows despite its unpromising reputation as a resource-based town reliant initially on coal, then forestry and pulp.  Its downtown has been refurbished and re-organised to highlight a sparkling new conference centre but, in the evenings, Nanimo’s residents steadfastly stay put in their suburban enclaves at the foot of Mount Benson.

Nanaimo and its harbour

Lively, unlovely, underwhelming Nanaimo’s biggest paradox is also it’s best-kept secret. Just over the hill from the newest sub-division of competitively priced homes, along a rural, paved road, is one of Vancouver Island’s hidden gems.  To get get to Nanaimo Lakes, you leave the main Island Highway just south of town and follow the Nanaimo River Road inland for 20 kilometers to a robust yellow gate.  Sometimes the gate’s open and sometimes its manned.  Beyond the gate a private road connects four lakes in a beautiful river valley that stretches 27 kilometers to the Island’s mountainous spine.

Nanaimo is the nearest Island 'gateway' to Vancouver

This whole valley is in the hands of a single owner, TimberWest, and is devoted to growing trees.  When you stand on the shore of the first lake (imaginatively named First Lake) you are struck by the solitary peace.

As you turn slowly through 360 degrees, taking in the scenery, the close proximity of the surrounding steep hills describe a giant, natural

‘room’.  Between First Lake and the head of the valley lie two more substantial lakes, a series of side valleys punctuated by smaller lakes and a long-abandoned ski hill called Green Mountain. This quiet, private landscape with its fast-flowing river and numerous tributaries comprises at least 20,000 acres; or enough space to accommodate the city of Nanaimo and all its 80,000 inhabitants.

The solitary beauty of Lake Two on a February morning

It’s no coincidence that TimberWest consistently features stunning photography of Nanaimo Lakes in its Annual Report and any other publication it can think of.  The company recognizes that the growing city of Nanaimo creeps inexorably closer to the Valley every year, reinforcing the belief that Nanaimo Lakes could have other uses than simply a tree farm.

So the future looks bright; a fast-growing community in a beautiful and accessible part of the world, a magnificent piece of land and an owner with aspirations.  It would seem that the ingredients are in place to create a special place of international standing and repute.

If only that were the case.

Instead, it is more likely that before long, the table will be set for a lengthy, expensive battle for the hearts and minds of the community and its elected local government.  On the one side will be TimberWest, its consultants and any development partners it might have recruited facing, on the other, an array of conservation groups, concerned citizens and individuals with specific reasons to

maintain the land in its current form.  In the case of large and significant land use changes, this combative process can be best described as a grueling and wasteful war of attrition.

The Nanaimo River, connecting First Lake and Second Lake

But does it have to be this way?  When the future use of a privately-held piece of land, so extensive and environmentally challenging as Nanaimo Lakes comes into question surely all those involved deserve to be engaged in a consistent, clear, open, timely and fair process.  And why shouldn’t there be a role for the Provincial Government in the consideration of land that is of national significance?  The answer to these questions is to be found in the way that the rural fastness of Vancouver Island is governed and planned.

Nanaimo Lakes is outside the city boundaries and falls under the planning jurisdiction of the local Regional District, an agglomeration of seven sparsely populated ‘electoral areas’ and four municipalities where the  majority of the region’s 150,000 residents reside.  Nanaimo Regional District is about to publish the first draft of its most important land use tool; the Regional Growth Strategy.  With its stated ambition to depart from previous efforts, it’s too early to tell whether or not this Strategy will be yet another one-size-fits-all blueprint for the region’s land use. It’s unlikely, however, that it will acknowledge the fundamental issue that has led to the re-evaluation of Nanaimo Lakes; that the forestry industry on Vancouver Island is undergoing a seismic change that has a direct bearing on the future use of its land base.

Looking west across Second Lake and the results of second-growth logging

Instead of preserving Nanaimo Lakes as a gated tree farm, accessible only to unwitting trespassers and those able to book a spot on its single primitive camp site, it should be possible to bring all the stake holders and governments (including First Nations) together to engage in and create a visionary plan for this land.

Imagine a valley, this close to the region’s largest and fastest growing population centre, planned so that it exceeded all of the sustainability targets set by the Regional Growth Strategy; whose forest was subject to the highest standards of stewardship while providing wood for local value-added manufacturing; whose lakefronts became public trails and open spaces, reserved for all; whose rivers and mountain tops generated energy for the entire region; that included a significant conservation component and whose settlement pattern provided a new model for sustainable rural living.

A blanket prohibition on development, based on the increasingly tenuous argument that growth in rural areas is unsustainable, helps no-one in the case of Nanaimo Lakes.  Large-scale conservation opportunities disappear, the lakes remain private, the opportunity for all to enjoy a rural lifestyle continues to diminish and the land-owner retreats behind its yellow gate to grow, harvest and export another crop of second-growth timber.

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2010: The Year of the Prefab…again

It doesn’t make sense. That’s the rational reaction when you watch the construction of a stick-built house. Yet another dumpster full of waste material on its way to the local land-fill; the structure’s exposure to the elements; the endless coming and goings of the army of sub-contractors; the inevitable delays that come with too many cooks in the kitchen (and the bathroom, and the den, and the attic….).

Will today's stick-built home be tomorrow's museum piece?

What does make sense is prefabrication. Few argue with the apparent benefits of prefabricating houses; manufacturing and assembling components in a controlled environment, exploiting economies of scale and minimizing construction time. Better quality, shorter lead times, lower costs. And yet prefabs (as the homes themselves are often called) continue to be viewed by most people as the quirky exception to the rules of home construction.

However, times are changing and we must all be prepared to reinvent ourselves; including the construction industry. Is the age of the prefab about to dawn?

A typical prefabricated Sears & Roebuck home

Maybe that’s what Sears, Roebuck & Company thought in 1908 when it began shipping pre-cut ‘kit’ houses, sold by catalogue throughout the United States. When the last kit was despatched a third of a decade later, the company had sold homes to almost 100,000 customers; the equivalent of 3,125 a year. The age of prefabs had yet to dawn.

Perhaps the Second World War would change things. ‘No homes for heroes’ was the reality in every blitzed city in post-War Britain. Prefabs were one solution to the appalling housing shortage that awaited returning soldiers. Bomb sites became building sites. In-fill, the dream of today’s urbanists, became a reality.

'Homes for Heroes'. Prefabs in Catford, south east London.

Little clusters of wood-framed, flat-roofed, single-story, two bedroom ‘cottages’ replaced the traditional brick buildings that had been flattened by Hitler’s bombs.

Poorly insulated with only 600 square feet of space, these homes were expected to last 10 years. Sixty-two years later, the UK government designated 21 prefabs on the Excalibur Estate as being of historic significance. One or two are still occupied by their original owners; most have been renovated several times, a remnant of the 150,000 prefabs that were built. Hardly a vision for the future.

Sixty-one years later. The Excalibur Estate, Catford, London

The Excalibur Estate, 62 years old and still going strong.

America’s post-War housing crisis was handled differently. In 1945, the Levitt family used mass-production techniques to construct new homes. Every element of the building process was systematized and honed to lever the maximum economies of scale. The numbers speak for themselves. Four thousand acres of land acquired 25 miles from Manhattan; 17,400 homes built; 82,000 families housed; 150 identical two-bedroom homes completed every week.

Levittown, NY.

Long Island’s Levittown, the first sprawling suburb in America, was the antithesis of ‘in-fill’. Two more Levittowns followed, both in Pennsylvania.  Like the British ‘prefabs’, Levittown offered many of those returning from the War their first experience of home ownership. The cheaply built, mass-produced ‘boxes’ were recognized for what they were; starter homes.

Levittown, NY.

It was the emergence of trailer park living during the 1950s that, on the one hand, created a new, highly profitable market for prefabricated construction and, on the other, stigmatized the concept for decades to come. For many, this was truly affordable housing. The ‘pad’, complete with utility ‘hookups’, was rented and on it was placed a factory-built ‘trailer’ between 12 and 16 feet wide and up to 60 feet long. Between 1959 and 2007, over 12 million ‘manufactured homes’ were built in the United States. That’s an average of almost a quarter million units every year for 49 years.

The mother of all trailer parks...

In 1973, the peak year of production, 580,000 units were trucked along the nation’s highways, from factory to home site. But by 2007 that number had fallen to 95,000, or a sixth of the peak year. Was the dream of the prefab fading?

Not if you read Dwell Magazine or were frustrated by shortages in skilled construction labor or appalled by the apparent waste and rising material costs inherent in stick-built housing throughout the first decade of the new century.

A prefab in the woods. The Dwell competition winner.

In January 2003, Dwell Magazine challenged 16 architects to design and construct a prefabricated home for $200,000 or less. In editor Allison Arieff’s words; “I learned that countless modern architects and designers had tried their hand at prefab—from Le Corbusier to Frank Lloyd Wright to Philippe Starck—yet their efforts had resulted in a series of noble failures”. Here was a chance for a group of less well-known designers to succeed where others had failed. The winning home, designed by Resolution:4 Architecture, opened (after much blood, sweat and tears) on July 10th, 2004. It’s a modern, airy, well-lit home, seductive and uncompromising on its large wooded lot. But forget Henry Ford. As Ms. Arieff is first to admit, this was the equivalent of a BMW. She recommends a construction budget of between $125 and $200 per square foot (depending on location) – excluding, of course, the cost of the land on which to build it.

Mass production on a scale that would enable prefabs to out-compete stick-built construction in terms of cost, while at the same time avoiding the accusation of dreary ‘ticky-tacky’ homogeneity, remains elusive. Perhaps the age of the prefab will never dawn; at least not in the way that the builders of Levittown (or any of its smaller versions) might have dreamed. Construction technology will no doubt continue to develop and become more modular and pre-assembled in nature thereby reducing cost, improving quality and eliminating waste. But will the majority of us be living in truly prefabricated homes in the immediate future?

Maybe we should think of prefabs as special buildings that fit certain circumstances better than conventional forms of construction. For instance, where repetition and simplicity prove to be virtues rather than failings. Fifteen years ago I had the pleasure of staying in a simple cabin on Lake Martin, Alabama. The cabin was one of many that had been built by the Russell Corporation on its considerable land holding around the wooded edge of one the largest man-made lakes in the USA. Families would rent the cabins on leases long enough to encourage a sense of ownership and establish the Lake as a weekend and Summer getaway. Each cabin was, in today’s parlance, ‘light on the land’, sited in a clearing rather than on a lot and was comfortable rather than conspicuous. Lake Martin, in those days, was a spectacular playground that ensured that the cabins were appropriately inconsequential and simply a means by which generations could come together to play.

In these more straightened times, one can easily imagine a return to this type of lakeside getaway, where the natural environment dwarfs the built environment and the lake side is shared by all. Architectural repetition and simplicity become virtues, along with living off the grid and minimizing one’s carbon footprint.

And that may be the future for prefabs; minimizing the impact of humans as they enjoy spectacular recreational settings. Using more and more efficient manufacturing techniques to reduce waste. Creating shelter quickly and efficiently in order to control costs and enable recreational developers to construct a critical mass of buildings in the minimum time possible. Maybe not attainable in 2010 but something to dream about over the coming years.

Got Land? Give it away!

Lets say that you have a million acres of land at your disposal.  That your plan is to raise its value from hundreds of dollars an acre to thousands. Your land is in a beautiful but remote area.  And it’s devoid of roads, waterlines and sewer.  What do you do next?

A Panhandle sugar sand Beach

A Panhandle sugar sand Beach

In 1997, Florida’s St Joe Company addressed this question head-on.  It had sold its solitary paper mill but still owned 1 million acres of land. Its Board was now intent to harvest  value from real estate instead of pinewoods; especially the miles and miles of Florida beachfront St Joe owned.  One problem: the land was located in the eastern Panhandle, the Sunshine State’s slowest growing, least known corner.  Building lots and finished homes were cheaper there than anywhere else in Florida for good reason; it was beautiful but inaccessible, rural and light-years behind the rest of the State in terms of it’s amenities and infrastructure. It was the ‘Forgotten Coast’; the ‘Redneck Riviera’.

St Joseph Bay, Florida

St Joseph Bay, Florida

So what did St Joe do?  It began giving away its land.  Not to people like you and me but to organizations capable of changing the face of the region.  First, to Florida Department of Transport who needed land to widen the single highway that connected the Panhandle communities.  Then to Ascension Health to build a new hospital next to the beach.  And then, in hundreds of acres, to the local Airport Authority to replace its small, environmentally challenged facility in Panama City.

The company was not content to be simply a catalyst for change, standing by as the regional economy reacted to St. Joe’s investment in real estate development. No, it was going to lead growth by inducing infrastructure investment in the only ways it knew how; with lots of low value land, some money and strong community leadership. And one other essential thing – patience.

Next year, the new Panama City Airport will open, providing new routes into the region. And not content to rest there, the St Joe Company has entered into a financial arrangement with Southwest Airlines to provide low-cost flights.  Improved four-lane highways will speed arriving visitors to some of America’s finest beaches. Ascension Health will complete another hospital on land donated by St Joe, this time in Gulf County.  Patience has been stretched to the limit by a deep and painful recession. The St Joe Company is a very different, much smaller and less ambitious organization than it was five years ago but the region in which its remaining land is located has changed markedly and within a few months will be accessible to the world in a way that no one would have dreamed about in 1997.

Sunset on the Panhandle of Florida

Sunset on the Panhandle of Florida

And what of the land owner? How has it benefited from its largesse?  By one measure, its land value has risen from just over $2,000 per acre in 1999 to a current $5,000 per acre.  Most of its remaining 580,000 acres are within 15 miles of the beaches.  For the last 10 years, it has worked diligently winning the right to build about 40,000 home sites on a small proportion of its land, served by the first new airport to be built in the United States since 9/11, new roads and first-class healthcare.  Patience may be a virtue but, in this case it seems, it is about to offer its own rewards.