To prepare for the forums I’m presenting at this year’s AOPA Aviation Summit in Tampa, Florida, (Nov. 5-7), I’ve done a lot of talking with people about the status of residential airparks.
It probably isn’t much of a surprise to anyone that the sale of lots and homes on residential airparks, regardless of their size, location and the number or quality of amenities, has slowed down, just like the rest of the economy.
Although I haven’t done a recent survey, the people with whom I have been in contact seem to feel there are a lot of people in the aviation world who are among the 90% of the employed, rather than the 10% of the unemployed. Additionally, many interested in living with their airplanes are retired — and have been for a few years — and, fortunately, are finding that their finances aren’t completely in the tank.
The net result seems to be that there’s a significant segment of people involved in the general aviation world who are finding themselves in the enviable positions of being able to take advantage of the plight of those who may not have fared as well during the current recessionary period.
Don’t misunderstand what I’m saying: Buyers aren’t lined up at the end of the taxiway competing for lots or homes on residential airparks, but neither are they in a holding pattern that has no end.
There are buyers out there who see residential airpark properties as real values and are actively searching them out. Just check the real estate section of our classifieds and you’ll see that the number of properties on the market hasn’t increased or decreased dramatically — some houses or lots go on the market and sell and new ones take their place.
Just like any other segment of the real estate market, the situations for residential airparks are similar. There are those who overleveraged themselves and have found they need to reduce their expenses, so they put their places up for sale. Some airpark developers with a hefty inventory of unsold lots are being pressured by their banks to cut prices in order to reduce their existing loans.
These situations have resulted in some bargain hunting. Folks with the financial strength to withstand the economy’s pinch have been acquiring vacant lots and holding them for when prices rebound and they can sell them at a profit.
This is no different than what is happening in all kinds of real estate ventures, from commercial property to golf course projects to community subdivisions. And, there’s nothing new in all that — it’s been going on for years and years and will probably always go on that way.
So if you’ve got some available cash and decent credit, there are some buys out there. Start your property search now and you probably will have a good financial reward over the next five to 10 years.
When you are searching for the right residential airpark, there’s one caution I want to mention. Hopefully, this problem will be resolved in the not-to-distant future but, in the meantime, you need to be aware of it.
The FAA in some regions — particularly in the Northwest Mountain Region — has been putting a lot of pressure on so-called Thru The Fence (TTF) projects on public-owned airports that have received or are trying to obtain FAA funding. Although TTF deals have been in effect successfully for many, many years, the FAA now is saying TTFs are mostly an incompatible land use and is trying to shut them down, while keeping new ones from being formed.
FAA officials are notifying airports that already have TTF agreements for residential or commercial developments that the airport is in violation of their FAA agreements. They are being threatened with the inability to obtain FAA funding and, in some cases, may be required to pay back money they have already received.
The FAA can’t seem to understand that there is a big difference between people wanting to live in a house adjacent to an airport used primarily for general and business aviation and a large airport with airline operations. Those living on a residential airpark, whether part of a TTF or onsite, don’t consider the sound of airplanes noise. These folks won’t be after the FAA to fund sound-deadening like folks living off the ends of Chicago O’Hare or LAX. The people who live on an airport provide additional security for the facility because they are there 24/7. The homes or buildings located on a TTF project at a public airport are taxed. Besides real estate taxes, owners often pay a TTF fee.
There is no logic to the FAA’s point of view that TTF residential projects are incompatible land use. All the agency’s officials have to do is stop thinking like bureaucrats and look at the situation like normal people and the issue would evaporate.
AOPA says it has been working with FAA officials to resolve this issue and there are a number of individuals from one end of the country to the other who are actively pressuring everyone they can to get it resolved. Hopefully there will be a meeting during AOPA Summit that will help clarify the issues and result in a positive solution. I’ll keep you posted in General Aviation News and the Living With Your Plane website.
Dave Sclair, a renowned airpark expert, is co-founder of Living With Your Plane