property development dynamics, urban development, property development defects, growth of cities, dormancy of cities

Is Concord the Centre of Gravity of Sydney?

Is Concord the Centre of Gravity of Sydney?

Date: First published 5 June 2015

By Dr Jonathan Drane

PWC Geospatial Model 2015- http://www.pwc.com.au/analytics/gem.html

Think tanks and seminars continue to be held to try and understand the changing face of the city and its many forms in the  Sydney Basin. This is especially topical in light of the voting power of the west and its dynamic future population projections relative to the east. One graphical model of Sydney based on a geospatial economic lens shows Concord as the ‘centre of gravity of Sydney’

The emergent ‘geo-spatial’ view of the city and other techniques, is grounded in the grinding national statistics of economy and demography.These after all are the foundation statistics of our nation at a macro level, the ABS, census, economic and industry data along with other industry data sets. The resultant analysis and charting of such data can however only ever be as good as the data itself. Whilst we still use the economic or demographic lens as our key visor for the viewing of the city, we will only see it in such terms.

The economic and demographic lens has allowed us to view the city from the stratosphere, through national statistics that were not originally designed to describe the phenomenological changes in the face of the city and its forces and drivers.

Dr Jonathan Drane

Read this article as a pdf:

cg1-is-concord-the-centre-of-gravity

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The Claw Back Clause

This  an archival post. The article was posted at the time the issue arose in October 2015. New legislation has been effected since as a result of the outcry due to this developer practice.

Dr Jonathan Drane

Claw Back Clauses: Are pre-sale apartments a new stock market: East Central Project?

Date: 9 October 2015

By Dr Jonathan Drane

Are our habitable multi-dwelling apartments becoming the instruments of a quasi- stock market? The recent example of the East Central project in Surry Hills is compelling evidence to this effect:

http://www.domain.com.au/news/multiple-class-actions-brewing-against-sunset-clawback-developers-20151009-gk3ewp/
To quote:

“After an investigation by Domain into boutique Surry Hills block East Central where seven contracts were rescinded by the developer Ash Samadi and most of the units were then resold for up to 50 per cent more, it’s been revealed that at least three other new buildings in Sydney are also embroiled in similar controversy”. Domain.

Many apartment projects are created through pre-sale agreements which have what are called sunset clauses. One intention is to ensure that the developer actually hands over the keys to the new ‘real’ apartment within a reasonable period. In this case the clause which is referred to as a ‘claw back’ clause allows the developer to rescind the contract and re-sell it to the open market after a certain period.

This means that the intention may never have been to honour the actual hand over of the apartments to the ‘originating pre-sale buyer’ but to use them as a stepping stone into a new market window. This in turn resembles the mechanism of a stock market in slow motion.

Some will also remember World Square where the pre-sale contract buyers were re-selling their pre-sale contracts on the open market. In that case, this was to the buyer’s benefit however in both these cases we  are not dealing with commoditised, securitised stock market shares but with habitable apartments.

The lawyers will say to unwitting pre-sale buyers ‘read your contract and get a decent lawyer’ but there is something fundamentally wrong with this concept and the actual original intentions appear to be that the developer never really intended to honour the original undertakings, and in fact intended to on-sell on a clawback ( or least keep his/her options open)..

What  a world! For those who are this evening waking at 4am to line up with the other hundreds of unsuspecting buyers on the streets of the pre-sale offices of our city, beware the claw-back clause. You might just sleep better through the whole, long, contract period leading up to settlement on your beautiful new dream apartment. The one that gives you an almost impossible leg onto the property ladder of the Sydney apartment market.

Dr Jonathan Drane

Read this article as a pdf:

id1-clawback-clauses

The Literature Map: Organising your literature search

Dr Jonathan Drane

Whether you are writing a university assignment, undertaking a masters thesis or doctorate , you will be familiar with the overwhelming feeling of data overload from all the sources you will gather in the initial literature review phase. How do you make sense of these articles and papers which all have some common thread to your topic. They must have a common thread right? Because you collected the article and put it in a folder or some place. So one way of sorting all this out is to create a literature map. It works a little like your desktop on your PC.

Look at your desktop now and see how you have spread the icons over the desktop . Each icon has a meaning ( an app, a file, a note, an image etc) and you probably place similar things together. This is how a literature map works. To get started why dont you clear your desktop for now with a clear space and then start creating small one line files and saving them to the desktop. e.g. write the title of one of your books you collected e.g. ‘The Communist Manifesto’ and then on the next line type the author ‘Karl Marx and Friedrich Engels’. Now save the note to desktop. It will come up with the title and an icon on your desktop. Now do this for more of your articles/books, it will not take long.

Then start moving them around so similar  are in one place. With either windows or mac you can give these icons a different appearance or colour depending on a theme within the article or book. A theme from the Communist Manifesto is ‘oppression of the capitalist system’ . Now step back and have a look at all these and see if you have learned something.

Below is an example of a literature map used in a doctoral situation (Dr Jonathan Drane 2015)

Lit Map 2 edn1

Want to learn more about literature mapping

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Need a doctoral mentor-coach. Attend a coaching workshop run by Dr Jonathan Drane . Or arrange a group- minimum 10 students.

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Read this article as pdf:

lm1-literature-mapping

The Developer Bond and the Invisible Developer

cropped-Skyscrapers_EXHIBITION_DSC5772-Edit.jpg

The Developer Bond and The Invisible Developer
Dr Jonathan Drane

The current attempts to legislate for a ‘developer bond’ to provide security to multi-apartment strata schemes is in the process of being finalised. Forums run by the Office of Fair Trading to canvass such an initiative have been met with strong resistance by the builder and developer arena. The former because they are already seeing the developer bond being passed on into their building contracts on top of the existing defects liability provision which provides some protection to the developer/client from defects arising during construction. The latter because the developers see it as a double impost which they have to fund. The end result is that it will in many cases be passed on to the increased price of the apartment.

As I observe these ruminations, I cant help but remember why this all came about. One of the emotional triggers or markers was the terrible case of the young girls who were forced to jump off their apartment balcony to escape a fire in their apartment. One girl died in this process, a great tragedy. Her story should not be in vain.

The developer bond will not necessarily solve this nor solve the problems in buildings that are built by builder/developers who operate in the apartment developments schemes that are above 3 levels and below 25meters ( need sprinklers if greater). Whilst house building is licensed, these apartments are not. This leaves the delivery in some cases to people who call themselves developers but who are not licensed nor qualified to build such developments.

To add to this, property developers who know what they are doing will always create a special purpose legal entity to run the project through. Such a vehicle may have no funds nor balance sheet and be sacrificial in nature. The originating human developer who operates through these entities is virtually invisible to the whole process. Hidden behind the legal entity they will avoid any personal link to the liability of the project providing no personal guarantees to banks by using what is called non-recourse finance.

This, in effect is the modus and era of the Invisible Developer.

How did we get to this. An invisible developer type and people having to jump to their death in a fire?

There are many aspects to this and a deep history that has led to this endemic problem. See my article The Defects Dilemma which provides an historical view of the leading events; from the rise of private property developers, to non-recourse funding, the pre-sale agreement, design and construct delivery systems and private certification.

To solve the problem relies on a deeper understanding of this sector of the industry, its history and the increased scrutiny of developer vehicles that render the developer invisible. This however this is still just a start.

Dr Jonathan Drane

Read this article in pdf:

id2-the-developer-bond

 

The Defects Dilemma: Developers and Defects, by Dr Jonathan Drane

Jon Drane-5999

A little history of private property  development and its effect on defect levels in Australia.

Defects have plagued buildings for decades if not centuries, and no more so than in the post war era of the private developer and with the emergence of the ‘design and construct’ project- the sister act of development as a private system of creation of our titled buildings.

Although many D&C projects are created with minimal defects, the practice of D&C and its evolution out of the previous Architect and Master Builder era, has a large part to play.

This paper takes us through a brief history lesson including the emergence of private property development and D&C in the post-WWII era, and the associated vulnerability of standards of construction across professions and regulatory systems. The erosion of the regulatory process, both professional and authority-based, is also revealed in the emergence of private certification and the dilemma of the slippery deal. The end product of such a system is illustrated with a ‘horror’ case example of one of its offspring.

Finally a ‘Defects Scenario Matrix’ is put forward for ways to keep a handle on defects on the D&C project based on a review of the horror case example and then a case example with a low defects regime.

Read Jonathan’s paper:

Drane 2015- Defects A Builders View

Read this blog article as pdf:

dd1-the-defects-dilemma

 

Hello world!!

Jon Drane-5999

Welcome to my new blog and web site. It has been refined to focus on my independent research and advisory profile.

This site is designed to allow prospective clients to understand how I combine my research profile with the analysis of complex construction problems in different situations including legal cases and project situations.

My previous blog which included articles on the city dormancy and property development has been archived and key articles will be revisited here. Please contact us on info@jondrane.net if you need a particular article.

This site also caters and focuses on my research into city dormancy and urban renewal so that students are able to tap into my works. I encourage students of the built environment to continue my work in this area of city dormancy and development.

My non-fiction book collection including my books on the Camino de Santiago are briefly referred to on this web site and will be expanded in another independent web site.

Thank you for your interest in my work.

Dr Jonathan Drane

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Key Papers and Events

Book Now For Dr Drane’s Master Classes on Property Development 

The New Breed of Property Developer

‘Defects A Builders View’ Read More on How the Property Development Industry Got Here

Read More on the State of Contemporary Property Development

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