Conference Call Thread

This is the open thread for the conference call.

Conference Call Reminder

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.

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46 thoughts on “Conference Call Thread”

      1. NOT

        1/2 a mill!? WTF? How is that affordable? That is more than double what a box costs almost everywhere else. How does that make sense?

        1. NOT

          I thought about this some more… (sorry, yes it did hurt if you must know)… $0.5mill/160 GRM = $3125/mo == affordable? Really? Avg. Irvine “household”, making <$100k/yr, is thinking that <15% of the houses are built for them? Is that right? Something is very very very wrong with either your answer or reality or both.... (I am fairly sure that it is both at this time but I am just saying.)

      2. .

        From the transcript provided by Socal on the forum:

        “There were plenty of model home programs… model homes at varying prices, ranging from Bougainvillea on the lower end of the price range, up to Serra in the higher end of the price range that have been available through this down-turn, and we literally went weeks without a single home selling… weeks! So, my argument… or my point to you would be, Larry,… that the fact of the matter is that these weren’t held off the market. These have been available throughout the down-turn.”

        https://www.irvinehousingblog.com/forums/viewthread/42/

        When they were first built they started at nearly $900,000 but were reduced to $650,000

        That’s affordable, entry-level housing.

      3. .

        25:25 Sylvia: You talked before about wanting to build out existing neighborhoods. Some of those are higher in cost. So, will that mean that any designs or plans for lower-cost homes will be shoved back, or will this push them up to the front, or how would that work?

        DY: Let me tell you this – the new product that’s in planning is very much in the full range of housing that you currently see in Irvine today. If there’s more of one type or another… it’s actually meant to be a balance. We always try to build a balance within the community. We view housing in Irvine like a housing ladder, in that, you always have to have a good supply of affordable housing so that people can get on the ladder. Otherwise, they can’t get to the top of the ladder. I don’t know if you know this or not, but just about 50%, in fact I think it’s about 55% now, of buyers of new homes in Irvine are already Irvine residents. Which is to say that somebody got on the housing ladder at three, four hundred, five hundred thousand dollars, planted roots in the town, decided to stay, and decided to go buy a $600,000 home or a $700,000 home. From their equity, they’ve been able to move up as their family needs… more kids come along, more space is needed, maybe there’s a better job and you can afford more(?). We have always followed a policy of trying to meet a market in the full price range. So, directly to your question – will we see more housing affordable like what you see at Ivy? Yes. Exclusively? No. It will be part of a full range of offerings from top to bottom.

  4. Lee in Irvine

    Mr. Young is a very nice man, but come on.

    “Irvine has one of the most affordable programs designed for any city in California” Did he say that? WTF?

    “The housing market here in Irvine is stabilizing” WTF?

    WTF DID HE JUST SAY?

    A good opportunity missed. Too bad! :grrr:

      1. bigmoneysalsa

        There is stable and there is stable. One could use the word to refer to a real-time snapshot of the market as you are are. In this sense, yes, the Irvine market has stabilized. Or one could use the word in the sense that the multi-year cyclical decline in prices for Irvine is ending, and we can expect prices to be roughly the same or higher in the next few years. The latter is probably the sense that he meant, and in this he is almost certainly dead wrong.

  6. .

    he sure stumbled when asked who bought the 13 houses. i wonder if they were relatives of TIC & builder

  7. tlc8386

    They are not going to do anything other than what they have been doing. More apartments to fill a quote of so called affordable housing. They control all the land will hold off and build at will and expect people who want affordable living to get one of the apartments.
    They are not meeting the market, and they have no intention to do so.
    Basically if you don’t pay the price with the mello roos, taxes ect. there is no way you can get a real home here. Like I have said before the Fix is in and there is no way they will change but sit on their property.

    So it’s basically their way or no way–no green housing, no new style of homes. Very sad–but at least they took our call and that is decent –at least.

    1. NOT

      Answer: I heard “We don’t”, alternate answer that I heard “We keep prices really really really high”

      1. NOT

        Oh yeah, the other answer that I heard “You are talking about Asians, they pay top dollar for our land, so there is no problem”. (Note, for those who didn’t listen, Asians were specifically talked about so I am not totally making this up)

  10. Luisifer

    My Paraphrased Summary of Takeaways

    Build Order
    Woodbury East (Now)
    Portola Springs (Now)
    Stonegate (2011)
    Portola Hills (2012)

    Affordable Housing
    Apartments (10%)
    Stuff other people build on land we give em. (5%)

    Why Build Now?
    We have to ’cause we’re invested in the whole ranch for the long term. Gotta keep the image up. Gotta fill the schools we built and keep current residents from uprising ’cause their development isn’t done.

    John Laing Homes
    We’ll get the land back and have one of our other builders finish the projects.

    Market Economics
    Irvine is stable, but we will keep it slow.

    … I know I must have missed some stuff…

    1. The_Maestro

      I thought Dan was great. I have a lot of respect for him and TIC. Not sure those who can’t afford Irvine will like what he said but to those who can, what’s there to argue.

      1. NOT

        See above for “afford”, what do you call “afford”? How does the avg family get the 3 min commute he talked about at the Spectrum when
        Quail Hill apartments (NOT houses) cost $500k?

  11. NOT

    I don’t know how many folks were in the queue but I was “in queue” for 30 mins. So either I was asking something that shouldn’t be asked (the $/SQFT) and after a while, a clarification on “affordability” or there really were that many folks in queue and we really need to have a longer call or another few calls.

    1. tlc8386

      I was in it as well–Dan told us what we wanted to know they have no intention until they are forced to lower prices and will sell when and where and what they want after all they own it all. I have to say this confirmed everything I ever thought and I am even more disturbed after this call.

  12. South County

    Thank you Dan for your time and effort. If you rework the CFD’s and AD’s to lower the costs and sell for $250sq foot for SFD you can sell two per week per tract. I remember Chevron Land paying down the CFD in Coto in 1995 and it jump started sales. Lets build some homes! I love the smell of fresh cut lumber in the morning!!

  13. momopi

    If the resale value on Quail Hill homes is $500k, then that’s what the market price is. Nobody pointed a gun to your head and forced you to buy there.

    Hint: if it’s cheaper to rent, rent here and buy (invest) elsewhere for positive cash flow.

    2. CK

      Amen, brother momopi. I find some of the commentary and sense of entitlement to a house at *their* price point in *their* ideal neighborhood absolutely bizarre. Please name me ONE city in the US where you have a premium area within a 10 minute commute of a major job center that does NOT also carry a steep price premium over surrounding communities? And as much as the Irvine-haters will throw stones at me for saying this — Irvine IS a premium area AND it is a major job center.

      Hell, I *wish* Quail Hill was $250/sq ft as much as the next guy — that would be great for my commute to Pacifica. But that is not going to be the case anytime soon, if ever. But I ain’t mad at them Quail Hill residents, and I’m not bitter. I could afford that 3 minute commute from Quail to my office — but I would need to sacrafice to a detached condo. Instead, I’ll continue to head south on the 5 from West Irvine each morning….because I can get more for my money here. But that’s ok, because I don’t feel entitled to live exactly where I want for exactly the price I want to pay. It’s all about compromises, folks. That $250/sq ft house you want is over in RSM. Heck, it even looks the same as Irvine over there. And if Irvine starts to cost the same as RSM, then it ceases to be Irvine.

      My thanks to Dan.

  16. mike in irvine

    good stuff, he answered the questions very well. TIC is a private company so he was under no obligation present any numbers. I also liked the fact that he did not dance around the questions. The callers were very civil, i was expecting one or two crazy questions. Thanks for arranging the call, its always good to know the people behind TIC.
    I need to find another city to stay as half a million is ‘affordable’ in Irvine. 🙂

  17. Barren_Irvine

    Here is what I figured. No point paying 4000/mon + tax + mello roos + association for rest of life. Work in Irvine, rent in Irvine, invest wisely and then when time comes, retire in Florida in a small condo.

  18. Free Article For You

    Monopoly. Since this is a private company, he doesnt have share holders to answer to, hence making it easy for him

  20. thrifty

    One of last night’s callers asked whether TIC expected Mello Roos to change. Dan Young explained that they increased mainly due to costs and, if costs diminish as expected, MR will also. I couldn’t find figures for mello roos on quick look at a couple of recently profiled homes. Dan discussed 2 “mello roos” categories (infrastructure and schools) but referred to them as “districts” which I think are tax deductible. MR are not tax deductible – so I’m confused. Do all homes in Irvine have MR? If so, how do they compare as a percentage with property taxes on those homes?
    Thanks to Larry Roberts and Dan Young.
    (the individual placing callers in the que stated that there would probably be another conference call – didn’t say when).

    1. tonyE

      The new developments ALL have Mello Roos, the old ones either never did or are done paying them off.

      I believe most Mello Roos assessments only last about 20 years. That right?

    2. furious sugar

      I found his answer interesting — that MR are based on construction costs, etc. So I guess that since some of Orchard Hills infrastructure is already built out– the residents will pay their MR based on 2007-2008 construction costs vs. projected (2012?) costs when the village starts selling homes?

    3. MRexpert

      There are some technical thresholds and protocols in the amount of taxes generated from Mello Roos (CFD-Community Facilities District special taxes) and Assessments (AD-Assessment District tax levy), but in general, the primary key to CFD/AD amount is NOT based upon construction costs, it’s based upon the difference between the issuing public agency’s policy (like overall tax rate not exceed 2% of home price) less TRA Tax (a rate code is assigned according to where you live and identifies which combination of taxes that are applicable to your tax bill). You can find your area’s TRA Tax from the county’s website at http://www.ac.ocgov.com/txfdr/tr/index.htm

      For example, TIC wants to build a new home Northwood located in TRA 26-177 that has a TRA Tax of 1.04410% (for FY 2008/09) and TIC chose to utilize CFD and/or AD bond to get their public infrastructure/school fees costs reimbursed. Assuming a sale price of $350,000 with a TRA Tax of $3,654.35, that leaves $3,345.65 (0.9559%) for CFD/AD tax levy, for a total tax bill of $7,000. Therefore, the higher the price of home, the more capacity for the CFD/AD tax. (the ceiling cap is determined by the amount of approved facilities improvements/fees reimbursed to the developer as well as the maximum overall tax rate that an issuer agency sets).

      Unlike the basic levy (set at 1% of AV), once the CFD/AD tax is set, it is a FIXED dollar amount. So the Northwood example above, the CFD and/or AD tax will remain at $3,345.65 regardless of the change in AV or subsequent home sale price. You can find details/line items of your taxes at http://tax.ocgov.com/tcweb/search_page.asp and the fixed taxes are listed under “special assessment user fees” section of your tax bill. All else is based upon a percentage of your AV/home sales price.

      I believe this is why folks are discouraged from buying in Woodbury. Even though the prices of homes have declined, the tax bill is still too much for most to bear. You can correlate the high amount of CFD/AD taxes to the timing of peak housing prices.

  21. tlc8386

    If you really want to learn about Universal Health care watch this excellent show on what other countries do.

    http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/

    For us in the medical field we make more money over seas because their bills get paid. We are not against Universal Health care. WE see patients being treated over and over again with the newest products superior compared to our country. While we wait for our products and die.

    So not many comments on last night? one poster got it right–MONOPOLY—-

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