Hoboken / Manhattan Real Estate Blog

Montgomery Gardens residents’ fear: There goes the neighborhood
Wednesday, March 28, 2007

Residents’ concerns that Montgomery Gardens will not survive the massive conversion of the old Jersey City Medical Center into a high-end residential development seem to have some merit - though perhaps not for the reasons they suspect.

City sources tell me that talks on demolishing Montgomery Gardens have nothing to do with the millions of dollars being pumped into the neighboring Beacon. True or not, very few in the city will buy it, including this columnist.

Instead, city officials say that public housing budgets across the county are under siege, making it financially impossible to operate the 1960s version of public housing under anybody’s definition of acceptable living standards.

At some point, federal support may reach such low levels - given the needs of an aging building - that the quality of life in Montgomery Gardens may reach a breaking point, opening the door for the eventual demolition.

Meanwhile, watch as city officials embrace more inclusionary affordable housing developments, a political philosophy that has long been lacking in the city’s swanky Downtown developments.

City officials will start tinkering with the definition of affordable housing, challenging the conventional theory that only the city’s middle-to low-income residents should qualify, focusing on city police and firefighters.

So, perhaps the residents of Montgomery Gardens will finally get their wish - more police officers. They just didn’t think it meant them living in their apartments.

The Jersey City Medical Center will conduct health screenings next week to help determine whether or not the controversial Reliable Wood Products facility is causing any respiratory damage to neighborhood residents.

The long-delayed tests come on the heels of a column here that highlighted the lack of city oversight of the mulch-making facility, which has neighboring Bergen-Lafayette residents suffering from poor air quality and screaming for help.

I called on city officials to investigate possible zoning violations, since the company expanded its facility to include mulch-making, despite the fact that the Morris Canal Redevelopment Plan bars outdoor recycling.

Previously, city officials repeatedly told me I was wrong, and that they have no jurisdiction over recycling centers. But yesterday, they must have changed their minds - or perhaps finally did some work - and issued long-standing zoning violations.

I am proud to announce that Hoboken resident Traci Kuther is finally getting some much needed attention from city officials. It’s just sad that it took a newspaper column to shame well-paid public officials to spring into action.

My column last week chronicling Kuther’s troubles with neighboring Garden Street landlord and property owner Esmat Zaklama - and the city’s apparent lack of support - sparked a nearly hourlong debate at last week’s City Council meeting.

The day after the City Council meeting, fire inspectors visited her neighbor’s home and prepared a report. Today, a city health inspector is expected to visit the home.

Meanwhile, Mayor David Roberts held a meeting Monday with all department heads to “get to the bottom of the story.” This wasn’t the first meeting where Roberts demanded action, but perhaps this time he means business.

City attorney Joe Sherman, who was one of the players in this saga, was asked to resign at the meeting. Sherman refused, but he was a no-show at work yesterday.

By Brian Louis

March 15 (Bloomberg) — Pulte Homes Inc., the fourth- largest U.S. homebuilder, said the housing market is unlikely to have a quick recovery as buyers wait out the drop in prices.

“We’re not projecting anything to bounce off the bottom at this point,” Chief Financial Officer Roger Cregg said at a UBS conference in London. “There’s been a lot of buyers that have moved to the sidelines.”

Profit at homebuilders has plunged since the five-year housing boom ended a year ago. Rising inventories of unsold homes and hesitation by potential buyers on concern that the price of their house will drop has sent the housing market tumbling.

“We don’t think it’s repeatable,” Cregg said of the high profit and sales of 2004 and 2005 for builders.

Homebuilding executives have turned bearish on the prospects for a recovery this year after earlier forecasting that buyers would return in 2007.

Donald Tomnitz, the chief executive officer of D.R. Horton Inc., said at a Citigroup Inc. conference on March 7 that his company would miss its projections for closings this year, and that “2007 is going to suck, all 12 months of the calendar year.” The company is the second-largest home builder by revenue.

`A Bust’

Robert Toll, CEO of Toll Brothers Inc., said today at a Citigroup Inc. conference in Las Vegas that the spring selling season has been “pretty much a bust” and he can’t predict when the housing recovery will begin.

The forecasts, along with a crisis in the subprime lending market, have sparked a decline in homebuilder shares this year. The stocks had gained from July to February on expectations of a housing recovery this year and comments from some industry executives that the market was stabilizing.

Part of the fuel for the housing boom was the availability of mortgage loans to buyers with poor credit histories. Investors are now concerned that tightening lending standards will reduce the number of buyers for houses and keep the housing market weak.

A Standard & Poor’s measure of home construction companies tumbled 15 percent from Jan. 1 through today, erasing much of the gains achieved after rebounding from a July low.

Homebuilder Shares Sink

Eight of the 16 stocks in the index have lost at least 15 percent of their value this year. The worst performer is Scottsdale, Arizona-based Meritage Homes Corp., which has fallen 31 percent this year.

Shares of Pulte rose 11 cents to $26.63 in New York Stock Exchange composite trading. The stock is down 20 percent this year.

Pulte, like other builders, has tried to prevent investors from buying houses by making prospective buyers attest they are not speculators and that is helping the market, Cregg said.

“We think we have taken a majority of them out,” Cregg said of the investors.

Increasing numbers of speculators expecting to make a quick profit by “flipping” houses helped fuel the housing boom. When demand started to ebb and house price appreciation slowed, many investors put their houses on the market, increasing inventory.