MarBorg Industries, Santa Barbara Art Frame Co. Employ Sustained Improvements, Benefits

By Megan Birney and Crissy Haley, Green Business Program of Santa Barbara County | Published on 01.26.2011 | Santa Barbara Noozhawk, Green Hawk

MarBorg Industries receives its Green Business certificate from the Green Business Program of Santa Barbara County. Representing MarBorg are Kathy Koeper, left, David Borgatello, Derek Carlson, Brian Borgatello, Mali McGilvery, Perrin Pellegrin and Mario Borgatello. (Green Business Program of Santa Barbara County photo)

The local businesses are leaders in incorporating green initiatives into the workplace

MarBorg Industries receives its Green Business certificate from the Green Business Program of Santa Barbara County. Representing MarBorg are Kathy Koeper, left, David Borgatello, Derek Carlson, Brian Borgatello, Mali McGilvery, Perrin Pellegrin and Mario Borgatello. (Green Business Program of Santa Barbara County photo)

Increasingly, local businesses are recognizing the value of incorporating sustainability initiatives into the workplace, not only for the environmental benefits but for the improved working conditions as well. The Green Business Program of Santa Barbara County has played a large role in encouraging local businesses to employ green best practices and maximize the impacts of their environmental initiatives. This article highlights the achievements of two local certified green businesses: MarBorg Industries and the Santa Barbara Art Frame Co.

MarBorg Industries, a local waste hauler serving various areas of Santa Barbara County, is not only a leader in waste management but sustainability as well. Through its partnership with the Green Business Program of Santa Barbara County, MarBorg’s dedication to improving the environment has extended beyond the services it provides and is now a part of its corporate policies, operations and values.

MarBorg’s corporate offices employ a comprehensive purchasing policy that requires the purchase of products containing recycled materials. It also has a landscape and hardscape management plan, a green cleaning plan and an integrated pest management policy to help reduce its overall environmental footprint.

In an effort to further reduce its carbon footprint, MarBorg Industries invested in an impressive solar photovoltaic (PV) installation atop a number of its buildings. In early 2006, MarBorg installed more than $500,000 of solar panels at its corporate facilities, creating one of the largest solar installations on the South Coast. Through this installation, MarBorg generates enough energy to power 40 homes on a sunny day!

MarBorg Industries also has taken strides to reduce the carbon emissions of its vehicles by updating its fleet with compressed natural gas (CNG) trash trucks. MarBorg was the first hauler on the South Coast to use CNG collection vehicles, and has continued to steadily add them to the fleet. In September 2010, MarBorg opened its new CNG fueling station for its collection vehicle fleet. Additionally, in October 2007, to ensure a comprehensive fleet of sustainable vehicles, MarBorg began using B5 bio-diesel fuel in all of its diesel vehicles.

Since earning certification though the Green Business Program, MarBorg Industries has begun working toward Leadership in Energy and Environmental Design (LEED) certification for existing buildings. The process has resulted in the analysis of current energy use and the development of a low- to no-cost list of energy-efficiency projects.

Similar to MarBorg Industries, the Santa Barbara Art Frame Co., a small framing business in downtown Santa Barbara, is committed to optimizing its operations with green business practices. By utilizing passive solar strategies, skylights provide ample natural lighting for its design and fabrication. It has always recycled office paper, cardboard and all materials possible, and now participate in the City of Santa Barbara’s Food Scrap program.

To conserve water and energy, the Santa Barbara Art Frame Co. installed water-efficient fixtures and energy-efficient appliances. To promote alternative transportation and reduce the impact of employee transportation on the environment, it has instituted a ridesharing policy. Additionally, its location in the heart of downtown Santa Barbara makes it easy to walk to nearby businesses for needed supplies and errands.

The owners are particularly proud of the sustainable frame moldings they offer to customers and are eager to educate suppliers and others in the industry about sustainable framing materials.

Through responsible purchasing and recycling programs, the use of alternative energy and the modernization of older equipment, MarBorg Industries and the Santa Barbara Art Frame Co. are continuously striving to improve overall operations within their organizations and serve as environmental leaders in Santa Barbara County.

— Megan Birney serves on the Steering Committee of the Green Business Program of Santa Barbara County on behalf of the Community Environmental Council. Crissy Haley is an intern with the Green Business Program and a master’s degree candidate at the UCSB Bren School of Environmental Science & Management

Garcia Architects: Prefabricated Homes — Custom and Cost-Effective

Factory-built buildings are generally less expensive and offer environmental benefits

By Elisa Garcia | Published on 01.18.2011 on Noozhawk.com

There’s been a lot of buzz lately about prefabricated homes, yet there’s also a great deal of mystery about them.

As a young, aspiring architect, I wondered why buildings weren’t built like automobiles were, especially once I started seeing firsthand how time-consuming and expensive it was to create construction drawings.

“Why do we build the same way we did 100 years ago and reinvent the wheel with every project?” I’d ask my bosses. They said I should be thankful that was the case since we would be out of a job if it wasn’t. But being a pragmatist and an efficiency-seeker, I never gave up on the question.

Tract homes are the most common answer to this question. They allow a much reduced price over a custom home. Although providing affordable housing is imperative, cookie-cutter communities are not always very appealing.

Most people have an appreciation for unique houses. Even more efficiently constructed than tract homes, manufactured or mobile homes are built in a factory utilizing an assembly-line approach with many automated processes. But again, this solution is not typically the American dream.

Prefabricated homes are different. It’s true that many prefab homes are pre-designed and can be selected from a catalog, with several plan or façade alternatives from which to choose. But many are custom homes designed by an architect hired by a client. These structures are built within a factory very similar to how they would be built on-site. The trades are bid out, and the subcontractors are hired by the factory.

However, the buildings must be designed and constructed in modules that are small enough to transport on truck beds to the job site. Typically 10 to 15 feet wide, these modules join together via a double wall or, where expansive spaces are needed, a beam. These modular buildings can be any style, modern or traditional, but tend to lend themselves to a contemporary design.

Factory-built buildings, even custom-designed ones, are usually less expensive than those that are site-built, because factories are located where labor is cheap. The transportation cost to the site, however, can offset the savings if the site is too far away. The buildings are typically delivered to the site with the interiors already completely built-out, including kitchens and bathrooms, so once at the site, they can be completed within about a week. There is less waste produced when a home is factory-produced vs. site-built.

In towns where the cost of construction is expensive, taking the prefab route may be the only way to afford a new custom home. In Santa Barbara, a site-constructed, average middle-class house runs about $300 per square foot. The same home built in a factory might cost about 25 percent less with the added environmental benefits of being more eco-friendly even with the transport factored in. Passing over the local contractors may be frowned upon, however. Of course, remodels, additions and other specific types of projects are still better suited for on-site construction.

Multifamily residential buildings and commercial buildings can be prefabricated as well. I worked on several Bank of America branches that were prefabricated. This approach cut the construction schedule in half. These buildings were built in the factory in about six weeks while the site work, such as the foundation, paving and utility hook-ups, were completed, They were then transported, erected and finished within two additional weeks.

Most prefab companies are really architectural firms, development companies or dealers that have created a new brand to outsource the fabrication to one of a few large factories. Some well-known architects tried to push prefab 40 years ago, and are now doing so again with the recent resurgence of the environmental movement. It may seem surprising that architects like the idea of a type of construction that requires less of our time, but we are, first and foremost, advocates for our clients — with a goal of achieving the best building possible for their dollar.

— Elisa Garcia is the owner of Garcia Architects, 122 E. Arrellaga St. Click here to read her blog, in which she writes about architecture, design, interiors and management. Garcia can be reached at 805.856.9118 or elisa@garciaarchitects.com.

House of the Rising Sun: A Check-Up on Housing

Market Report by Liz Ann Sonders, Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.
January 18, 2011

Key points

• Housing is becoming less national and more regional in terms of strength/weakness.
• Affordability is up but so are foreclosures.
• Employment remains key to housing, but be aware of housing's diminished impact on the economy.

It's been a while since I wrote specifically on the state of housing and the questions are cropping up again. In particular, I've been asked a lot about the relationship between housing and employment, and housing and the economy, both of which I'll address in this report.

Let me start by summarizing where I think we are in the cycle. Although I believe the overall residential real-estate market is generally finding its bottom, I think we have to take a step back and begin again to look at real estate regionally, not just nationally.

Housing is not a monolith. Yes, when the bubble was inflating the rising tide did lift all (house) boats, and when the tide went out with the bursting of the bubble, it took all (house) boats with it. But I think that's coming to an end, and going forward we'll see both pockets of improvement and continued malaise.

Not all housing markets are created equal
Geographic pockets of strength or weakness are typically a function of local economics, inventories and demographics. We're starting to see more differentiation when diving into the numbers across the country. The S&P/Case-Shiller Home Price Indices were recently released, with data through October 2010. They include a 20-city composite of metropolitan areas, and in terms of the one-year percentage change, here are the top and bottom five regions:

Another way to slice the data is to show the actual index level. For instance, an October index level of 186.7 in Washington DC indicates that average home prices are more than 86% above their January 2000 values. An index level of 68.9 in Detroit indicates that average home prices are still more than 30% below their January 2000 values. That's the worst showing by far. Below are the rest of the top and bottom five regions based on index level:

Ugly year for foreclosures
The biggest black eye that remains on the face of housing is the foreclosure problem. In 2011 lenders are likely to foreclose on more homes than any other year since the housing crisis began in 2006. The only saving grace is that RealtyTrac believes 2011 will be the peak in foreclosures, predicting 1.2 million homes will be repossessed this year, up from one million in 2010.

The pain will likely be the most acute in states that have already suffered the worst, including Nevada, Arizona, Florida and California, or in states with bleak economic outlooks, including Michigan and Illinois. More than half the country's foreclosure activity occurred in five states in 2010: California, Florida, Arizona, Illinois and Michigan; meanwhile, Nevada posted the highest foreclosure rate in 2010 for the fourth consecutive year.

Affordability has spiked
But all is not bleak. Most measures of housing affordability have improved markedly. As regular readers know, I keep a close eye on "real mortgage rates."

Like real gross domestic product (GDP), which is nominal GDP less the inflation rate, the real mortgage rate is the nominal mortgage rate (30-year fixed) minus the rate of inflation (or deflation) in home prices. Remember, it's not just the mortgage rate that matters to demand, but also the rate at which houses are appreciating or depreciating.

As you can see in the chart below, real mortgage rates have come down substantially from their peak (which corresponded to the trough in the housing market), but remain well above their trough (which corresponded to the peak in the housing market).

Real Mortgage Rates Coming Down

Click to enlarge
Source: FactSet, Federal Reserve, National Association of Realtors, as of November 30, 2010.

The traditional measures of housing affordability have improved meaningfully, too. The first chart below shows the Housing Affordability Index, which is composed of mortgage rates, home prices and personal income data. As you can see, affordability is at an all-time peak. The second chart below shows the ratio of home prices to disposable personal income, and the news is good here, too, as prices have come down to at least a 30-year low.

Housing Affordability Hitting Records

Click to enlarge
Source: FactSet, National Association of Realtors, as of November 30, 2010.


Click to enlarge
Source: FactSet, Federal Finance Housing Board, High Frequency Economics, as of September 30, 2010.

Housing and employment … the connection
The key to improving demand may lie in something else besides affordability, and that's job growth. The prospects for employment and housing are likely more linked today than any time in history, given the severity of the crisis in both.

As detailed in a study by Ned Davis Research (NDR), real (inflation-adjusted) house prices have historically stopped falling when the unemployment rate has peaked. This potentially bodes well for the housing-is-bottoming story given the drop in the unemployment rate from its October 2010 peak of 10.1% to its present 9.4%. However, real house prices have historically not started to rise until the unemployment rate approaches the "full employment rate (NAIRU)."

Declining Unemployment Rate Should Help House Prices

Click to enlarge
Source: FactSet, Ned Davis Research, Inc. (Further distribution prohibited without prior permission. Copyright 2011 (c) Ned Davis Research, Inc. All rights reserved.), as of September 30, 2010. Yellow shaded areas represent periods of rising unemployment. Gray shaded areas represent periods from unemployment peaks until 1.2% points above Non-Accelerating Inflation Rate of Unemployment (NAIRU), a level of unemployment below which inflation rises.

The gray shaded areas represent the time from the unemployment rate peak until it falls to within 1.2 percentage points of the full employment rate. (Although it appears as if the unemployment rate peaked last October, until that's confirmed, the most recent span will remain shaded yellow.)

Assuming the full employment rate is around 7% (NDR's estimate), real house prices likely won't start rising until the unemployment rate falls below 8%. If the full employment rate is closer to 6%, as is assumed by many economists, then the recovery could take even longer.

Burst bubbles take longer to heal
As you can see in the chart below, we're already more than five years into the home-sales downturn, by far the longest stretch (gray bars) in history. The decline in price is rivaled only by the downturn from 1978-1982 when mortgage rates were in double digits and the United States was heading into back-to-back recessions.

Sales Finally Picking Up?

Click to enlarge
Source: FactSet, National Association of Realtors, Ned Davis Research, Inc. (Further distribution prohibited without prior permission. Copyright 2011 (c) Ned Davis Research, Inc. All rights reserved.), as of November 30, 2010. Gray shaded areas represent downturns.

This downturn is the result of a bubble that burst, but was certainly exacerbated by the related financial crisis and severe recession. NDR compared this bubble to a composite of the four historic mega-bubbles: the Dow Jones Industrial Average in 1929, crude oil in 1980, the Nikkei in 1990 and the NASDAQ in 2000, seen below.

Housing Following the Bubble Path

Click to enlarge
Source: FactSet, Ned Davis Research, Inc. (Further distribution prohibited without prior permission. Copyright 2011 (c) Ned Davis Research, Inc. All rights reserved.), Standard and Poor's. Historical Bubble Composite as of January 1, 2002, thru May 31, 2016. Case-Shiller Composite as of October 31, 2010.

The picture of the prior bubbles is consistent with our view that housing has probably broadly bottomed, but the path up is likely to be relatively flat, elongated and volatile among geographic regions.

Housing and GDP … the connection
Finally, the real key question is the impact of housing on the overall economy. One of the most common questions I get is whether we can get decent GDP growth without housing doing the heavy lifting, as it did in the last up cycle. Here's where I think many people have it wrong, much as they did after the bursting of the tech bubble in 2000.

As the economy exited recession in 2001, the thinking was that the economy couldn't recover without leadership by technology, given its prior power as an economic driver. However, from the peak in 2000 when equipment and software represented more than 9% of GDP, it was subsequently on its way to near 6% by 2008 … only since then has it begun to rise again. The economy recovered, as did the stock market, without leadership from technology.

As you can see in the final chart below, housing has been on a similar path. At the peak, residential real estate represented more than 6% of GDP, whereas now it's a record low of little more than 2%.

Housing Is Less Important to GDP

Click to enlarge
Source: Bureau of Economic Analysis, FactSet, as of September 30, 2010.

That of course doesn't mean housing can't be a negative contributor—it just means there are other forces that have gained power as this cycle has unfolded. As an example, auto production now accounts for a larger share of GDP than housing, and its prospects are looking much better.

Upside potential?
The potential good news is that housing starts have been running at a pace of only 40% of their 30-year average, well below the household formation rate. In addition, we're seeing improved price and volume performance for non-distressed sales. Supply is heading back up thanks to increasing foreclosures, but we could be getting close to the last ugly Case-Shiller report and the market-clearing process should pick up in the spring selling season.

Necessary ingredients for a healthy recovery in housing would be the aforementioned down slope in the unemployment rate, a further loosening of the credit environment, no significant (further) spike in mortgage rates, and general improvement to consumer confidence. Again, we believe the prospects for housing are improving, though certainly not stellar, but our optimism about the economic recovery could feed into better-than-expected housing news as well.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative (or "informational") purposes only and not intended to be reflective of results you can expect to achieve.

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Unsurpassed Serenity : Spectacular Sand Point Retreat

607 Sand Point Rd - Carpinteria

Indulge your love of the sea and the many moods that complement living in a sanctuary of vast natural beauty. This 5 Bedroom, 3.5 Bath home sits on 1.14 acres of Pacific Ocean beach, bordered by the Carpenteria Salt Marsh Nature Preserve, presenting a wonder of panoramic views and seasonal marine life, sure to elate the senses. This superbly built home rests harmoniously in the private Sand Point enclave. A rare retreat that invites hours of tranquil relaxation with ocean, estuary or mountain views from every room.

Listed at $8,750,000. See more at www.SandPointEstate.com

Local Real Estate Market Reports

Local Real Estate Market Reports - Courtesy of Fidelity National Title

Click on any link below to view the .pdf:

CORT Sales by Area Dec 2010

Market Trends Flyer Dec 2010

Median Price Trends Goleta

Median Price Trends Montecito

Median Price Trends Santa Barbara

Median Price Trends South County

Price Report Dec 2010

The Best ‘Green’ Option May Be to Remodel

By Elisa Garcia of Garcia Architects| Published on 01.04.2011 | Santa Barbara Noozhawk, GreenHawk

Consider this updating to-do list to make your home more energy efficient.

Let’s be honest: Building a new house is not very green. A great deal of energy goes into the construction process, but at least many new homes these days use less energy once they’re built.

“Net-Zero Energy” homes recently built are capable of producing an output of renewable energy that is at least equal to the amount of its consumed/purchased energy from energy utilities. I find the technology in new green homes, especially prefab homes, very exciting. But, as a rule, the greenest house is an existing house that is upgraded to be energy efficient.

In recent years, homes haven’t been easy to sell, yet space needs change over time. Moreover, cutting utility bills is also desired in these economic times. In cold climates, a $400 winter gas bill might be slashed in half by making a home energy efficient.

Remodeling green also means using products that are healthy for occupants, last a long time, and don’t require a lot of energy and waste to produce.

Below are some green remodel to-dos. This list is not comprehensive and doesn’t represent the only way to build green. It will undoubtedly change as technology rapidly (hopefully) improves.

1. When possible, use local products that don’t need to be transported.

2. Reinsulate the entire house, including the attic and floor system, with a spray-on foam or recycled product insulation.

3. Thoroughly seal the house to minimize air infiltration and leakage.

4. Replace old windows with energy-efficient windows.

5. Replace the HVAC system with one that’s more efficient.

6. Replace uninsulated or wood exterior doors with insulated doors.

7. Use low- or no-VOC paint if repainting is required.

8. Use recycled material and green products, such as 100 percent recycled glass tile for countertops and backsplashes.

9. Use passive solar and cooling techniques where possible (light shelves, light monitors — high and low operable windows, thermal masses, proper window placement, etc.

10. Replace faucets, showerheads and toilets with low-flow fixtures.

11. If cabinets must be replaced, use non-formaldehyde cabinets. If that is not possible, coat surfaces with Safecoat to prevent off-gassing.

12. Reuse as many of the existing building materials as possible; refurbish them if necessary.

13. Use a long-lasting flooring material that will last longer than carpet.

14. Replace the water heater with a tankless or electric tank water heater.

15. Replace appliances and lighting with energy-efficient products.

16. Add solar tubes for day lighting.

17. Replace roofing material with reflective roofing if appropriate.

Many contractors are not experienced in remodeling in an environmentally friendly way. If a house is in bleak condition, they’ll probably even recommend demolishing the house and starting with a blank slate — even insisting that it will cost less to do so because of the tediousness involved in trying to work with existing conditions, reuse and refurbish. But contractors have recently started to rise to this worthwhile challenge.

— Elisa Garcia is the owner of Garcia Architects, 122 E. Arrellaga St. Click here to read her blog, in which she writes about architecture, design, interiors and management. Garcia can be reached at 805.856.9118 or elisa@garciaarchitects.com.

Classic California Ambiance

545 Toro Canyon Rd | Montecito

9.6 Acres Ocean Views, 3 Parcels

Taste of old California - First time on market since the 1950’s

A little taste of old California from this spectacular 9.6 acres with ocean, island views & exceptional privacy. Rare opportunity for family compound. Comprised of 3 existing parcels, 3 residences, & plenty of space to roam! Charming entry thru Sycamore & Oak forest. Land is level to terraced and borders along creek. Existing utilities and well.

Potential to adjust parcels for creating ocean view estate sites. Possible income from rent back after sale by present business. Excellent site for family compound or potential for new estate sites. Currently 3 apn’s.

Tentative Parcel Map (to reconfigure parcels) “pre-application” request with SB Co Planning Dept. Some investigations and reports completed. Existing nursery NOT part of sale offering, though owner desires to rent back; can provide income while buyer develops. CLA for details and/or reports. Title work with 1st Am.

South of East Valley Road, Montecito side of Toro Canyon Road. Please do not go on property without listing agent. By Appointment Only.

Currently listed at $4,100,000. To see more visit: www.545ToroCyn.com