Nation's Building News Online: April 14, 2003Print All Articles Text Version |
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Builders Denounce New Jersey Anti-Growth PlanAn anti-growth plan being pushed by New Jersey Gov. James McGreevey has alarmed home builders across the state and has provoked sharp criticism from NAHB. In his state of the state address, Gov. McGreevey proposed giving local jurisdictions broad authority to impose one-year building moratoriums. In a letter to the governor, NAHB President Kent Conine called that program “the worst sort of no-growth rhetoric masquerading as smart growth.” In his letter, Conine complained that the governor has failed to consider the current and future housing needs of the citizens of his state. From 1990 to 2002, New Jersey’s population grew by more than 840,000, an 11% increase, and only four new homes were built for every five new households that were started in the state during that period. A growing imbalance between the need for housing and the actual supply has been reflected in home prices. They have jumped 11.79% over the past year, the third highest increase among the 50 states, according to the Office of Federal Housing Enterprise Oversight. In addition to providing no-growth advocates with a powerful tool for stopping residential construction in its tracks for a full year, the governor has also put forth a highly restrictive zoning map that fails to provide enough land to accommodate the state’s growing population, Conine said. The governor’s proposals “give priority to the environment over many social needs, and they fail to recognize the importance of housing to the quality of life of New Jersey’s residents,” Conine wrote. In his letter, Conine said that home builders fully support the infill and brownfields development and urban reinvestment that the governor’s blueprint envisions for city centers and older suburbs. “However, your moratoria proposal and the unprecedented power you propose to grant local municipalities to act on NIMBY (not-in-my-backyard) impulses guarantees that your infill strategy will fail.” For more information, e-mail Blake Smith or call him at 800-368-5242 x8583. Building News Coast To CoastHome Builders Boost Biz With Customized OptionsMore and more new-home buyers in all price ranges are spending thousands on upgrades, and builders are responding by offering a broader selection and opening design centers. For example, Beazer Homes' upcoming design center will showcase numerous fixtures, lighting, carpet, paint, tile and cabinet options; John Wieland Homes & Neighborhoods has added a new lighting studio to its design center; and KB Home Studio's model kitchens and bathrooms will let buyers envision the finished product. These design studios are set up like retail stores; but unlike the major home-improvement chains, KB Studios Senior Vice President Lisa Kalmbach says buyers can include the cost of the upgrades in their low-interest mortgages. Wieland sales executive Walter Nichols attributes the popularity of upgrades to low interest rates, the weak stock market and the assistance of professional designers. Meanwhile, some builders have cut the number of standard features to keep prices competitive, and they agree that buyers should only pay for what they want. Says Kalmbach, 'We build as standard what we know the market wants. Then we say, 'Come on in, personalize your home.'” IBM Builds Networked Homes With DeveloperCommonwealth Builders and IBM have joined forces to equip the 170 homes in the Roanoke, VA-based Village at Tinker Creek with a number of smart home technologies. IBM's infrastructure will allow home owners to remotely operate door locks, appliances, security systems, garage doors and heating and air conditioning systems. In addition, residents can access neighborhood bulletin boards, local news and calendars as well as manage their utilities. According to IBM, the $3,500-per-home package will result in better energy efficiency and security, lower insurance costs and improve resale potential. Moreover, these smart homes are for the less affluent, priced in the $200,000s — unlike other versions of the connected home. Each residence will feature 802.11b wireless connectivity, C.P. Technology's NetAppliance Residential Services Gateway and Information iHome Application from SVA. All Clear: Add Space, Light and Brightness to Your Home With a Touch of GlassAccording to Winter Park, FL-based interior designer Francie Prince, “The translucence of glass doesn't block the eye, so it opens up any area of the home — the shower, the living room, the bedroom — every part of the house can benefit from the use of glass.” Home owners can install a door with a glass insert for a more sophisticated entryway, using frosted, etched or sandblasted glass for privacy. Kitchens, meanwhile, can appear larger with the use of glass doors that draw the eye to the back of cabinets; and glass shelving allows light to illuminate crockery, cookware or other items on display. As for the bathroom, the newest trends are colored glass tiles on the floor, ceiling, countertops, shower stalls and walls, as well as glass basins in place of porcelain sinks. In addition, home owners can replace street-facing windows with glass block, which allows light in while preserving privacy. Stained glass windows in bedrooms and glass tiles around the fireplace can also jazz up a home. Is That a Daisy Growing on Your Roof?Ecoroofs — lightweight systems of soil, compost and perlite coupled with various types of vegetation — absorb a significant amount of water, minimizing storm runoff and related flooding and sewage problems. These environmentally friendly roofs also create better-quality air and reduce city temperatures during the summer. The trend has hit a few major U.S. cities, such as New York — where ecoroofs are being built atop affordable housing in the East Village; projects also are in the works in Portland, OR; Chicago; and Dearborn, MI. The ecoroof being built on top of Chicago's City Hall, for instance, will feature wild onion, butterfly weed, aster and buffalo grass as well as weather stations to track temperature, wind speed, rainfall and wildlife. There are some challenges to building an ecoroof, including the need for more roof trusses, joists and columns to support an additional 10 to 25 pounds per square foot; extra maintenance to make sure drains are not blocked; and water to keep the plants alive and reduce fire hazards in areas with little rain. Green roofs are more costly, averaging $10 to $15 per sq. ft. versus $3 to $9 for a traditional roof, which has hindered widespread adoption; however, some cities are offering grants and tax breaks to developers that build them. Moreover, a 2002 survey by Cahners Residential Group reported that new homes do not meet the demands of most builders and consumers as far as sustaining the environment. It also found that an increasing number of consumers are willing to spend more to improve the environment. Second Homes: A Sooner, Not Later, PurchaseAn increasing number of baby boomers and retirees are purchasing second homes earlier in life — mainly because of rapid appreciation, plans to work past the traditional retirement age and the ease of tapping into their equity. Housing experts say most second-home buyers are motivated by recreational, not investment, purposes. A recent study by the National Association of Realtors found that 51% of second-home owners made the purchase as a vacation retreat, 18% for retirement, 16% to diversify their investment portfolios and 15% for rental income. Fidelity National Information Solutions CEO Patrick Stone also agrees, suggesting that those persons interested in property solely as an investment would consider real estate investment trusts, rather than purchasing and repairing single-family homes. Low-Income Housing Gains FavorThe findings of a new survey done for Housing Illinois indicate that the majority of Chicago-area residents polled back the introduction of more low- and moderate-income residences in their areas. Of those polled, 31% said they would strongly support such projects, 35% would offer some support and only 17% said they would vehemently oppose low- or moderate-income housing. “The results are surprising and fly in the face of stereotypes,” commented Hoy McConnell, co-chair of Housing Illinois, a coalition dedicated to raising public awareness of affordable housing. “It suggests there are a lot of YIMBYs out there — yes, in my back yard.” While the research suggests that Chicago-area residents increasingly favor diverse communities, it also uncovered nagging fears about low-income housing. Two-thirds of survey respondents believe such property suffers from poor maintenance, for instance, and more than half believe it triggers more criminal activity. “These are two of the concerns that advocates really have to address in order to make their efforts successful,” stated Nancy Belden, a partner at Belden Russonello & Stewart, the Washington, D.C., public opinion research firm that conducted the poll on behalf of Housing Illinois. Putting Green Just Out the Back DoorWith more than 60 million golfers and 30,000 golf courses worldwide, it is not surprising that residential putting greens are becoming more popular. Consumers are spending between $1,100 to $4,500 or more on home putting greens to spruce up the backyard landscape and enjoy the game at home. Some industry sources claim that putting greens give homes a resort-like atmosphere and add value, while others insist that home owners will recoup no more than 40% of the project's cost when the property is sold because of its specialized appeal. The popularity of the sport has prompted a number of senior adult communities to install greens, and Ryland Homes and other builders may soon offer them as options. In fact, NAHB Vice President of Research Gopal Ahluwalia predicts the number of home putting greens will continue to rise due to demand among new-home buyers for expanded landscaping options. “It's a big thing with the consumer,” he says. “People are spending a lot on landscaping and it has become a big business for builders.” Going for the GreenDespite the weak economy, U.S. consumers are spending a record amount of money on their lawns and gardens as concerns about the war and terrorism keep them at home. National Gardening Association Research Director Bruce Butterfield says that spending on lawn and landscaping services has soared 40% from $7.6 billion in 1997 to about $10.7 billion currently; and American Nursery & Landscaping Association Executive Vice President Robert Dolibois reports that spending on professional garden construction and planting surged from $3.6 billion in 1997 to $11.2 billion in 2002. The booming housing market, the preference for outdoor spaces, the popularity of second mortgages and low interest rates have ramped up interest in gardening. Butterfield notes that nearly 25% of households hire lawn and garden services to handle lawn cutting, leaf blowing and other arduous tasks, which gives home owners more time to spend on so-called pleasure gardening. Home owners spend about $1.4 billion per year on water gardens, pond liners, plants and fish and $500 million on herb gardens. In the three major categories of spending, home owners fork out $12 billion on do-it-yourself lawn care, about $9 billion on trees and shrubs and $3 billion on flowering annuals and perennials. Spending on professional services, meanwhile, skyrocketed from $14.6 billion in 1997 to $29 billion last year — a trend that Dolibois attributes to affluent baby boomers and home owners who have someone else care for their lawns out of preference or need. No Major Risks Come With a 'Spec' HouseUninformed house-hunters may be suspicious of purchasing a home that is being constructed “on speculation,” meaning that the builder does not have a contract out for it. Such fears are generally unfounded, however, as builders have several reasons for building on spec. In some cases, for example, productivity is maximized by keeping a steady flow of homes under construction. Meanwhile, other builders prefer to do their work without the demands and pressures that buyers can exert. Some home builders simply want to be able to present homes in move-in condition to buyers who need a property in a very short period of time. Whatever the reason, buyers of spec homes are not at any greater risk than other buyers. The only drawback they may experience is that they will be limited in terms of options and upgrades and the changes that can made. For this reason, it is important that the spec home already have the preferred amenities and that its value is in line with other properties in the neighborhood. Safe at HomeThough once designed for corporate executives, celebrities, diplomats and even eccentrics worried about their safety, safe rooms today are drawing mainstream interest as a result of high crime rates, war and the threat of biological and chemical terrorist attacks. In fact, NAHB believes these fortresses could someday become an option for luxury home buyers. Home owners can spend $6,000 for a model the size of a telephone booth or well over $80,000 for a larger one, as well as thousands more to add on trap doors, secure telephone and power lines, air filtration systems, closed-circuit television and other security features. Safe rooms typically are fortified with steel and concrete and usually are located in the basement or hidden behind a bookcase or in another part of the house. Most manufacturers insist that the rooms are to be used, temporarily, as refuges from intruders or natural disasters until help arrives — although some can upgrade the unit to include protection from nuclear and chemical attacks. You Can Go Home AgainSome home buyers choose to purchase their childhood homes from their parents, although exact numbers are not known since most of these sales do not involve real estate agents. Such transactions have both advantages and drawbacks. Buyers, for instance, are likely to receive a bargain price, are not likely to be deceived when it comes to disclosure and already are familiar with the neighborhood and its surroundings. Once the nostalgia wears off, on the other hand, these buyers may begin to notice the age of the plumbing and electrical systems and the smaller size of bedrooms and closets. Says Seymour Turner of the Chicago-area architecture and building firm AIROOM, “When people think of moving back to their homes, they think of that tree in the backyard they used to climb. They tend to forget about the other things.” Scott Sevon, president of Palatine, IL-based Sevvonco Builders — who also has been contracted to remodel homes purchased by owners from their parents — adds that couples usually decide to expand kitchens, bathrooms and master bedrooms and install more energy-efficient windows and doors. However, some of the problems they encounter are not connected to the home itself. They often lack the excitement of new-home buyers; find themselves plagued by memories of dead relatives; begin to resemble their parents; or become annoyed by the constant presence of neighbors who remember them as children. Camera Phones Offer Good Picture QualityWhile not intended to replace conventional camera equipment, the Nokia 3650 and the Sanyo SCP-5300 camera phones are designed to capture those “Kodak Moments” or send instant images to another phone or an e-mail address. Recognizing that many consumers may feel owning a camera phone is economically impractical, wireless phone marketers are targeting insurance adjusters and real estate agents. Both phones, priced under $400, are among the first integrated phones to hit the U.S. market. The Sanyo 5300 is like most flip-style phones and features separate buttons to activate the picture function and snap the shutter. The device is also light sensitive, and users can either send images via e-mail or upload them to a Sprint Web site for cropping and lighting or tone adjustments. The larger Nokia 3650 has a unique circular keypad, but is quick at e-mailing pictures or uploading them to ofoto.com to easily purchase prints. Marketers Can Spread the Word With WeblogsMore and more small businesses are using Weblogs, or daily Internet diaries, to enhance communication with customers and boost marketing. For example, bed and breakfasts, local shopkeepers or restaurants can use Weblogs (also called blogs) to post local news, show photos and highlight new features or products, according to research from Dan Bricklin, co-founder of VisiCalc. Firms can also use blogs to relay urgent messages such as product recalls. Blog enthusiasts suggest that Weblogs be used in a firm's intranet to deliver information previously sent via e-mails encumbered with large attachments. Another advantage of blogs is that their format makes them suitable for use in search engines, which use automated “spiders” to look for multiple postings, highly specific information on a particular topic and links to other sites, says consultant John Lawlor of Boca Raton, FL, who specializes in building corporate blogs. This can be important since many people use Internet search engines when looking for products, he says. To set up a Weblog on the Internet, firms can purchase inexpensive and effective blogging software to manage and archive postings, says Lawlor. He says firms should link blogs to their conventional Web sites to act as the site's “What's New Button.” Getting to the HotspotCompanies such as T-Mobile and Boingo are setting up more and more wireless Internet “hotspots” at public places such as airports, hotel lobbies and coffee shops, making it possible for anyone with a laptop to get online and do productive work for their businesses. To be able to use the hotspots, the laptop needs to be equipped with wireless local area network (WLAN) hardware and software, which are easiest to set up under Windows XP or Mac OS X and might take a little more work with older operating systems. Some operating systems may also make it necessary for the user to find out the unique Service Set Identifier, or SSID, for the hotspot — this is posted in some places, whereas in other places it might be necessary to ask employees for it. From a log-on screen in the Web browser, users can then log on if they already have an account with the hotspot vendor, or otherwise provide payment information; hotspot tends to cost $6 to $8 per single usage or $30 to $40 per month for a subscription that allows the user to use any of the vendor's hotspots. Security should be an important concern when using a wireless hotspot, so the user should avoid sending sensitive information over the wireless connection and should also have firewall software on the laptop to keep snoopers out of the computer's files. Users whose companies have virtual private networking (VPN) software on their servers can add VPN software to their laptops in order to access the company's internal network. Test Housing SnapshotMortgage interest rates nudged up slightly last week, as the strength of the economy remained in doubt despite encouraging developments from the war in Iraq. Retail sales increased 2.1% in March, more than expected, and the University of Michigan anticipated stronger consumer confidence for April. This good news suggested the economy is not sliding into a double-dip recession, as some had begun to fear, but how long growth will continue to mope along remains an unsettled question. Mortgage Interest Rates30 Year Fixed Rate: 5.85\% Housing Starts: Feb. 2003Total: 1.62 million\% New Home Sales: Feb. 2003 *854,000 Existing Home Sales: Feb. 2003 *5.84 million * Seasonally Adjusted Annual Rate Housing Have-Nots Deserve a Boost From CongressFor the record 68.2% of the nation’s families who own a home, housing is an American success story. It has added life to the economy, creating jobs and consumer confidence even during the midst of recession. It has laid the foundation for healthy communities and strong neighborhoods. It has provided all the comforts of home, while providing typical working families with their one sure guarantee of accumulating family wealth. Unfortunately, there is another housing story that needs to be told. Amid good times for housing, America is facing a silent housing affordability crisis of epidemic proportions. Millions of families are being deprived of the opportunity to partake of the American dream. These are the facts:
To address this housing crisis, one of the most important jobs facing this Congress is enactment of homeownership tax credit legislation. H.R. 839 in the House and S. 198 in the Senate would help achieve two key national objectives. These bills would aid economically distressed areas by creating new jobs. And they would close the homeownership gap for minorities by increasing the supply of affordable homes for sale. The homeownership tax credit is included in the Bush Administration’s FY 2004 budget, and Congress needs to include it in pending economic stimulus legislation. The tax credit is good public policy and it is good for the economy. Each year it would produce some 50,000 new and rehabilitated homes, 120,000 jobs, $4 billion in wages and $2 billion in taxes and fees. This would more than offset the $2.4 billion that the Treasury Department estimates it would cost over five years. Last June, President Bush said that a home is “a foundation for families and a source of stability for communities. Part of economic security is owning your own home. Part of being a secure America is to encourage homeownership.” Enactment of the homeownership tax credit will close the gap between America’s housing haves and housing have-nots. It is the medicine our lagging economy needs, and it is of the greatest importance for Congress to act on it now. Letters to the Editor
Comments on IMB Study Shortsighted
Reading Dr. Seiders' comments on the alleged irrelevance of the International Monetary Fund study to Americans (“IMF Housing Price Study of Little Relevance to U.S. Market,” April 7) suggests a rather shortsighted view.
While foreign housing markets are seldom based on mortgage and other systems as consistently strong as ours, those foreign markets are outlets for American industry. There is a reason why NAHB has an international program and why we have spent considerable time and money promoting our efforts abroad. One of those reasons is to open up new opportunities for business.
In the end, however limited the IMF study may be in terms of its applicability to our own market, the total impact of housing trends in other countries does have relevance for us.
Joe Honick
GMA International, Ltd. Pygmy Owl Data Sets Precedent for LandownersFor landowners across the country who need to determine if, and to what extent, their properties are inhabited by an endangered species that may lead to land use restrictions, there has just been a valuable precedent in the resolution of an Endangered Species Act case in Arizona. Earlier this month, the Service provided NAHB and the Arizona builders with all of the data they have on the location of the owls. Home builders received detailed geographical data on 161 sightings of the bird that have occurred across portions of southern Arizona. This brings to a successful close a long-drawn out battle. Citing the Freedom of Information Act, NAHB argued that the government was required to provide data on pygmy owl locations so that the public could appropriately evaluate proposed plans for protecting their habitat. A federal court agreed, and NAHB's legal strategy played a large role in forcing the Service to release valuable data on the owl. For more information, e-mail Christopher Galik at NAHB, or call him at 800-368-5242 x 8663. House Passes Major Home Energy BillLegislation that would encourage home builders to increase energy efficiency and conservation in new and existing homes and help reduce the nation’s dependence on oil imports was passed by the House of Representatives last week. The bill, H.R. 6, the “Energy Act of 2003,” has received solid backing from the nation’s home builders because, according to NAHB Executive Vice President Jerry Howard, “it would spur builders to invest in market- and technology-driven initiatives that would promote higher levels of energy efficiency at more reasonable costs.” Among provisions in the bill, which was introduced by Rep. Jerry Weller (R-IL):
When House and Senate bills are considered in a conference committee, NAHB will be lobbying on behalf of restoring a tax credit of $2.25 per square foot for multifamily buildings that are 50% more efficient than properties built to standards of the American Society of Heating, Refrigerating and Air-Conditioning Engineers. The credit was dropped before final House passage of the bill. The Senate energy tax package — which includes home energy efficiency tax credits at levels slightly lower than those in the House bill — is making its way through committee and is not expected to be ready for a vote on the full Senate floor until later this spring. To read the full House bill, click here, and enter H.R. 6 in the box in the upper left hand corner. Health Plan Bill Advances in CongressA bill that would enable small businesses to band together to reduce their employee health insurance costs continues to move forward in the Congress. A House subcommittee on employer-employee relations approved “The Small Business Health Fairness Act,” H.R. 660, on April 8. It will now be considered by the full House Education and the Workforce Committee, probably during the week of April 28. The bill would enable home builders who are faced with soaring health care costs for their employees to join associations to obtain the same economies of scale, purchasing power and administrative efficiencies that large employers have. This could reduce their health insurance costs by an estimated 15%-30%. More than 120 House members now stand by the bill, including Speaker of the House Dennis Hastert (R-IL). NAHB President Kent Conine said the legislation “is key to bringing Fortune 500 health benefits to Main Street small businesses, their employees and their families.” To read the full bill, click here, and enter H.R. 660 in the box in the upper left hand corner. Bill Would Speed Up Apprenticeship Program ReviewsLegislation introduced in the U.S. House of Representatives on April 8 would help speed up federal approvals for apprenticeship programs that are getting bogged down in the bureaucracy. “The Apprenticeship Enhancement Act of 2003,” H.R. 1660, would require local offices of the U.S. Department of Labor’s Office of Apprenticeship, Training, Employer and Labor Services and state apprenticeship councils to approve or disapprove apprenticeship programs within 90 days after they apply for a decision. Written justification for the decision would also be required. In some cases, apprenticeship programs meeting federal standards have had to wait several years for authorization. Apprenticeship programs provide job training on work sites and in the classroom for more than 400,000 registered apprentices. “By expediting the process through which apprenticeship programs become federally approved, this bill would increase job training opportunities for thousands of Americans and help to ease the nationwide shortage of skilled workers,” said Jerry Howard, executive vice president and CEO of NAHB. “Apprenticeship programs are a vital tool to help participants make a successful transition into the work force,” he added. To read the full bill, click here, and enter H.R. 1660 in the box in the upper left hand corner. Spotlight on: ChicagoLocal HBA: By Peter Schwartz, CEO of the HBA of Greater Chicago Vital Stats:
Outlook for 2003: Last year was a record year for Chicago home builders — the second in a row — and buyers just keep coming. However, we have two distinct markets here. There’s the city, and then there’s the suburbs. The suburbs were up 17% last year. Building in the city was down 20%-22%, mostly due to an over-abundance of new inventory and also a backlash from 9/11 in the high-rise market. That’s now starting to come back. The suburbs have continued strong without a hiccup. Collectively for the city and suburbs, we’re projecting a marginal decline of about 1%-5% this year — not bad after two record-setting years. Biggest source of concern for builders: Slow job growth is the main concern, and could have a big impact. Second on the list is the availability of land for development, and third would be government regulations. We have a unique market because there are more taxing bodies and separate municipalities here than in any other U.S. metro area. And on top of that are the state and federal regulatory levels. Market trends: The strongest segment of the marketplace is for first-time home buyers. A big sub-section of that is immigrants. We attribute this to the revolution that’s taken place in mortgage financing. Low rates have created a whole new group of qualified home buyers. Aging baby boomers are also either doing trade-ups or moving to smaller homes now that the kids are gone, and that is fueling the marketplace. Another trend is the rapid increase in active-adult communities — both age-restricted and non- for both single-family detached and multifamily. Remodeling has been exceptionally strong over the last 24 months, and will continue to be, thanks again to the revolution in mortgage refinancing and home equity conversions. We have members involved in remodeling whose business has never been better. Eye on the EconomyDavid F. Seiders, NAHB Chief Economist Today, April 9, sure looked like a momentous day in world history as coalition forces took control of Baghdad and statues of Saddam Hussein were toppled throughout the city by triumphant forces and jubilant Iraqi citizens. But these stunning developments had little net effect on financial markets in the U.S. and abroad, despite widespread expectations of large 'relief rallies' in the event of dramatic military success and a decisive tear-down of the Hussein regime. Perhaps the markets are just waiting for more evidence of a complete military victory in Iraq and some clarity regarding political transitions and humanitarian relief efforts, including the respective roles of the U.S., the U.K. and the U.N. Financial market pundits are openly wondering about the real economic benefits of the war, other than the easing of uncertainties that built up prior to the war and an inevitable spurt of defense spending to replace massive amounts of weaponry used in the war effort. Is the liberation of Iraq really enough to spark market rallies and rebounds in the U.S. and global economies? The test has now begun. Rebounds in consumer and business confidence are essential ... Most forecasters, including NAHB, are counting on rebounds in consumer and business confidence from recently depressed levels when success in the war is assured and the world oil market is declared safe. Oil prices surely have retreated from pre-war highs, and the risks to Middle East oil fields certainly have receded. The stock market definitely is above pre-war lows, but forecasters expect a truly vigorous stock market rebound to precede, as well as to stimulate, improvements in both consumer and business confidence. For now, market analysts have simply shifted their focus back to those dratted corporate profits, and late-breaking reports from many major companies have been disappointing. There's no question about the weakened condition of consumer and business confidence prior to the recent military successes. Measures of both consumer confidence (Conference Board) and consumer sentiment (University of Michigan) hit 10-year lows in March, although a late-March reading on sentiment perked up a bit. In the business sector, surveys of both corporate CEOs and owners of small businesses have shown eroding confidence and reluctance to invest or hire. Indeed, the buildup to war and concerns about terrorist backlash in the U.S. caused about two-fifths of surveyed companies to reduce hiring and spending plans for the year. The economy is not reassuring reluctant consumers and businesses ... It's fair to say that, following a promising January, the economy “hit a wall” in February and weakened further in March. The weather was a factor, but it's perfectly clear that those “geopolitical uncertainties,” including related damage to world oil markets, delivered a serious shock to the economy. Economic weakness tends to feed on itself, of course, so it's going to take major changes in psychology and significant support from economic policy to turn things around. Looking back, it's fair to say that the buildup of tensions prior to the Bush ultimatum and the outbreak of war weighed even more heavily than we had expected on consumers, businesses and financial markets, and that weight apparently has not yet been lifted. Recent economic evidence includes: high and rising claims for unemployment insurance through February and March and substantial declines in payroll employment in both months; slippage of growth into the negative zone in March in both the manufacturing and services sectors (ISM surveys); lackluster sales of autos and light trucks in February and March; and loss of ground by the single-family housing market in February and early March. These setbacks point toward weak GDP growth in the first and second quarters of this year, but there's also the potential for a substantial bounce-back effect in the wake of the war. We're still forecasting GDP growth around 2% for the first half of 2003, followed by growth in the 4% area for the next four quarters. That still seems like a reasonable estimate within the broad assumptions we've made about the war and economic policy. On the policy front, we're still assuming timely enactment of at least half of the President's “Jobs and Growth” economic stimulus proposal and another $80 billion in federal spending for defense and homeland security. Furthermore, additional easing of monetary policy is not out of the question before mid-year. Housing stumbles but should regain balance soon ... The housing sector, a pillar of strength throughout the recession of 2001 and the uneven recovery of 2002, started 2003 on a very high note. However, most measures of single-family housing activity weakened markedly in February, despite extraordinarily low mortgage rates, and NAHB's Housing Market Index (based on surveys of single-family builders) registered a record decline in early March. A good bit of the deterioration definitely was related to atmospheric conditions (i.e., abnormally bad weather). However, comments from builders and surveys of consumers suggest that home buying has not been immune to the sinking confidence and rising uncertainties characteristic of the February-March period. The good news is that weather effects are quickly reversed and that shortfalls in home buying related to temporary uncertainties will be regained quickly. While the government's estimates for home sales, starts and permits may not rebound in March, improvements most certainly will show up during the second quarter. The two major supports to the single-family housing market during the past two years — historically low mortgage rates and solid rates of house price appreciation — are still in place and promise to be positives over the balance of this year and in 2004, even though their strength may wane as the economy and job market improve. On the house price front, the benchmark government series (OFHEO's repeat-sales index) showed ongoing strength in virtually all places through the final quarter of 2002, and prices of existing homes sold — on both the national and regional levels — threw off positive signals through February. In a remarkable change of focus, Chairman Greenspan suggested possible house price declines during a speech given early in March, but it's unlikely that the Fed's fundamental belief in the strength of house prices, and in the absence of price “bubbles,” has been altered. NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his April 9 e-newsletter. To subcribe to “Eye on the Economy,” click here.
Don't Miss NAHB's Spring Construction Forecast Conference The housing sector has been a pillar of strength, while the rest of the economy continues to sputter. And the geopolitical storm clouds have darkened while economic policy has proliferated. What does all this mean for our economy? Our industry? Find out at the NAHB Spring Construction Forecast Conference at the National Housing Center in Washington, D.C. on Thursday, April 24. Among the topics discussed will be:
To learn more, or to register for the NAHB Spring Construction Forecast Conference, click here or call 800-368-5242 x8338. Economists to Examine How Housing Is Holding UpProminent financial and housing analysts attending The NAHB Forecast Conference next Thursday, April 24, will provide an up-to-the-minute assessment of the nation’s economy. Speakers will assess how the housing sector will hold up in the face of deteriorating consumer confidence, the war in Iraq and the specter of terrorism at home, a lifeless job market and a fight in Congress over fiscal stimulus. Panels will include:
The conference will be held at the National Housing Center in Washington, D.C. For more information, contact the NAHB University of Housing at 800-368-5242 x8338. Or, click here. High Ceilings a Trend in Reshaping American HomesAt a time when many builders and buyers are focusing on modestly sized homes in response to high land costs and a shortage of available lots in most established growth areas, nine-foot ceilings and higher are gaining popularity among consumers as a way of coping with those smaller spaces. “High ceilings accentuate the feeling of openness and spaciousness in a home, and that is what consumers want,” said Gopal Ahluwalia, NAHB’s vice president of research. “They give homes with even modest footprints more volume.” Because ceiling height is not a characteristic tracked by the Census Bureau’s Annual Housing Survey, reliable statistics on it have only recently become available through data on single- and multifamily homes collected by the NAHB Research Center's Builder Practices Survey. What the Research Center found is that more than 50% of all homes built in 2001 have nine-foot or higher ceilings on the first floor. Focusing on single-family detached homes, the portion built with nine-foot or higher ceilings on the first floor rose 15% between 1997 and 2001. During the same period, high ceilings on the second floor went from 13% to 22% of new homes. Entry foyers and family rooms are where high ceilings are most commonly found. Half of all single-family homes built in 2001 had two-story entry foyers, compared to just over a third in 1997. The larger the home, the more likely it is to have tall ceilings in at least one room. Of new homes with 3,000 or more square feet built in 2001, 70% had high entry foyers, compared to 20% of the 2,000-square-foot or smaller homes built that year. Two-story family rooms were found in about 45% of all homes built in 2001, up from 37% in 1997. This includes 23% of homes with 2,000 square feet or less and 59% of homes with 3,000 square feet or more. Buyers of homes in the 1,600-1,900 square-foot range, well below today’s average of 2,300 square feet, are looking just as intently as buyers of large homes for high-quality finishes and amenities previously found only in the largest homes, Ahluwalia noted. Homes in that size range have maintained a steady 21% of the new homes market for the past 15 years.
BuilderBooks.com offers a variety of economic and consumer preference publications online. To view or purchase these publications, click here. NAHB Team Helps Builders Win Political ChallengesWhen home builders in Rapid City, SD, were faced with ballot initiatives to create a $1,000 impact fee for a water hook-up and $1,000 for a sewer connection for each new home they built, they went to NAHB and found the political expertise they needed to alert their community to the problem. “We had a tremendous amount of help from NAHB’s State and Local Political Operations,” said Janette McIntyre, who is the executive officer of the Black Hills Home Builders Association. “They came in like an army and bulldozed the place.” The NAHB State and Local Political Operations team produced direct mail explaining why the proposed measures were bad for new prospective home buyers in Rapid City, bad for existing residents and bad for the city’s economic vitality. They helped form a coalition of like-minded groups, wrote press releases, coordinated a telephone campaign and television advertising to get out the vote and used polling to measure how effective a job they were doing. When the voters spoke, they defeated the sewer proposal decisively, by 900 votes, but approved the water fee by a scant 90 votes. Since then, the city has implemented the $1,000 fee for water, and builders have been fighting it. The mayor has been waiving the fee for big developers and out-of-towners, says McIntyre, but suing small local builders to pay it. The fee is the only issue in today’s mayoral campaign in Rapid City, according to McIntyre. And with nine out of 10 city council members opposing him, she is confident his time is just about up and home builders are looking forward to working with a new mayor to help reverse the water tax. NAHB’s State and Local Political Operations Department provides a broad range of services, including campaign schools, candidate training, list development, targeting, direct mail and radio and television production. It can help builders faced with political challenges at the ballot box manage a successful campaign and mobilize grassroots support. By mobilizing voters, it also helps maximize the impact of the housing vote in key congressional elections. For more information, at NAHB e-mail Alastair Macaulay or Ashley Geyer, or call them at 800-368-5242 x8584 and x8126. NAHB members only can click here.
Save on Dell® Computers Take advantage of the Dell discount by calling 888-577-3355. Be sure to identify yourself as an NAHB member when you order. The discount will be automatically applied and will be reflected on your invoice. The NAHB discount cannot be combined with other Dell discounts or promotions. To order online and for details on more than a dozen other money-saving Member Advantage discount programs click here, or send a blank e-mail to membersavings@nahb.com. Go to www.nahb.org to explore the numerous advantages associated with membership in your local, state and national home builders association. New Mexico Builder Slashes Construction Waste CostsThe largest local home builder in New Mexico, who builds some 800 homes a year at the affordable end of the market, told an audience at the Green Building Conference in Baltimore earlier this month that he is saving almost $285,000 a year on dumpsters by recycling his construction waste. Before taking stock of how his company was handling waste, Max Wade, vice president of Artistic Homes in Albuquerque, said that the contents of the 22 dumpsters a week he was sending off to the landfill was adding $900-$1,100 to the cost of his typical 1,300 square foot home. Those expenses were subsequently slashed by 95%. Wade told builders to expect “an amazing amount of trash when you go out and look for it.” The NAHB Research Center estimates that construction of a 2,000 square-foot house generates 8,000 pounds of trash, he added. Wade found that cardboard and wood accounted for the majority of the rubbish coming off his sites; drywall was 11% of what went into the dumpster. He started his mission of eliminating dumpsters altogether by reassessing how his homes were designed and switching over to Optimum Value Engineering wood framing. Framing his exterior walls with 2x6-inch studs, 24-inches on center and using a stacked-framing approach to eliminate an excessive number of headers reduced his wood waste by 40%. Information on Optimum Value Engineering is available from the NAHB Research Center and Building Science Corp. Wade’s next step was to purchase two Packer 750 grinders. Priced at $85,000, he said the grinders are able to handle a large volume of material, they are safe for workers, fairly easy to maintain and are capable of extracting about 95% of the nails that go into them. Nails are culled by a magnetic pulley and then spit into a bucket. The grindings are mixed with cow manure and stockpiled for about two years until they become compost for topsoil, potting soil, football and baseball fields and other uses. The product sells for about $16 a yard. Wade gives away his grindings in exchange for having them hauled off.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. Construction Debris Diverted From Landfills in MilwaukeeWorking with a private, non-profit organization on a mission to reduce and recycle construction and demolition debris, 10 home sites in the Metropolitan Builders Association of Greater Milwaukee’s Parade of Homes saved enough wood to build four average-sized houses and recycled 376 trees, or two acres, worth of wood and cardboard. WasteCap Wisconsin, based in Milwaukee, identified wood and cardboard as the two materials that would be targeted in the demonstration project because they would be generated in large quantities, were easy to separate and had existing recycling markets, Drew Stuyvenberg told the Green Building Conference in Baltimore on April 1. Wood recycling containers were placed on the building sites during rough framing, which occurred during roughly the first six weeks of construction, and cardboard recycling took over during the final six weeks when the finishing stage generated boxes from cabinets and fixtures. Builders participating in the project reported a fairly easy job of educating subcontractors about separating the two recycled materials from other construction trash, but cardboard was somewhat of a challenge because more subcontractors and materials were involved. Stuyvenberg tallied these results from the conservation effort:
About 30% of Wisconsin’s non-municipal waste stream comes from construction and demolition debris, said Stuyvenberg. He said that the Environmental Protection Agency estimates that 136 million tons of this debris are generated across the country each year.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. Soy-Bean Based Insulation Wins Green Product AwardA soy-bean based polyurethane insulation system that provides an alternative to products using cellulose or fiberglass was named the Outstanding Green Product of the Year by those attending the fifth annual National Green Building Conference in Baltimore on March 30-April 1. Manufactured by BioBased Systems of Spring Valley, IL, BioBase foam adheres to any clean and dry surface, completely fills any cavities and forms a continuous barrier against any potential air infiltration, which is the leading source of indoor energy loss. It can also be used in interior walls for sound proofing. Its manufacturer says that BioBase “provides a healthier indoor environment, with no harmful emissions that can cause allergic reactions. It can eliminate building warp, caulking and taping, and the labor-intensive work associated with air-tightness detailing, required when insulating with conventional products.” The company says that BioBase is not affected by moisture, won’t settle, is completely resistant to mold and mildew and can’t be used by rodents and insects as food or a nesting material. Its R-values do not deteriorate over time. BioBase offers better overall thermal performance at nearly the same net cost as other products, BioBased Systems says. The award was presented by the National Research Center. For contact information on exhibitors at the Green Building Conference, click here.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. Multifamily Sector Looking at a Mixed PictureSome sellers in today's multifamily housing market are reaping great rewards but owners are having a difficult time maintaining their profit margins, according to speakers at the Pillars of the Industry Conference last month. “It's a very mixed picture,” J. Ronald Terwilliger, chairman of Trammel Crow Residential, Atlanta, told the meeting in Boca Raton. “Capital rates are terrific and owners are making some great sales. But on the other hand, I have never seen so many concessions for so long. Landlords are offering four months free rent in some markets.” The Pillars conference is sponsored by the NAHB Multifamily Council, the Mortgage Bankers Association and the Urban Land Institute. Terwilliger, a former ULI chairman, is chairman of NAHB's Multifamily Leadership Board. Leonard Wood of Wood Partners, a Marietta, Ga.-based developer that has started some 12,000 units in the Washington area, the Southeast and Texas over the last five years, said the market is as tough as he's ever seen it. Doug Crocker, vice chairman of Equity Residential Properties, a Chicago-based real estate investment trust and, with more than 225,000 units, one of the nation's largest landlords, said the business is being hammered by the same low mortgage rates that has propelled the for-sale housing market. “Interest rates are killing us and saving us at the same time,” he told the audience. And Chris Wheeler, chairman of the Gables Residential Trust here, said it's time for investors to come to the realization that the properties they are backing are no longer worth what they think. Capital Is Still Chasing Projects By all rights, Wheeler said, the capital spigot should have been turned off by now. But he wasn't surprised that it hasn't been. “Capital is always late,” he said. “But eventually lenders are going to figure out that most apartments are worth 10%-12% less. It has always happened before, and it will happen again.” No one seemed to lament the fact that capital is still chasing projects, however, least of all Wheeler. “There is a time in the realty business to sell and put the money in your pocket, and this is it,” he said. “Capital is still cyclical, and cap rates are going to rise to a more normal level.” Even in Atlanta, where many complexes have been beset with unusually high vacancies, capital is readily available, he said. “But the question is, do you really want to build?” Wood Partners builds with the intention of selling as soon as a property leases up. And it is on the operations side where the company is being hurt. “Our economic yields are not very good,” he said, noting that the company is being forced to offer an average of two months free rent to attract tenants. “And that means some properties are not very saleable.” Lots Are Hard to Find Wood also said he's having trouble buying the small parcels he likes. “Home builders are outbidding us; we can't compete.” To get what the tracts he wants, the apartment builder is being forced to purchase a larger parcel, develop it, sell off some lots to home builders and keep a small piece for himself. “Land is as difficult as it has ever been,” he told the conference. “The apartment market is pretty soft but land prices are not going down.” Crocker of Equity Residential said the apartment sector is paying the price for riding the coattails of higher house prices. “In the '90s, we drafted in the price rises in the single-family sector,” he told the meeting. “And we seduced ourselves into thinking it was a new paradigm. But we forgot one thing: We are absolutely tied to what it can cost tenants to buy a house. And nowadays, with 100% financing, it doesn't cost them a dime.” Job Growth Key to Apartment MarketAlthough “serious imbalances” are developing in the multifamily sector, the market may not be as bad as it looks, at least on the surface, experts in regional and local housing markets say. The key is job growth, which is even more important to the apartment market than it is to single-family housing, an NAHB analyst said at the Pillars of the Industry Conference in Boca Raton last month. While job growth is “still sluggish,” Stan Duobinis, assistant vice president and director of forecasting at NAHB, pointed out that 21 states are experiencing year-over-year gains. Unfortunately, total employment is still down in 30 states. Even in the states that have been growing, it hasn't been very strong strong. Only five states — Nevada, Montana, Hawaii, Alaska and Kentucky — saw their employment numbers increase by more than 1% from December 2001 to December 2002. The meeting of multifamily lenders, developers and owners is sponsored by NAHB as well as the Mortgage Bankers Association and the Urban Land Institute. Multifamily housing is dependent on strong job markets because apartments are often the choice of young, single people with one income, the NAHB economist explained. When jobs are plentiful, these people tend to strike out on their own. But when the market is tight, they move back home or double or even triple-up with roommates. “Local housing demand depends on local household formation, which depends on job creation,” Duobinis said. “So strong job markets lead to strong housing markets.” Currently, states with strong construction markets, defense spending and health care and travel industries are likely to have strong housing markets. But those dependent on the airline industry, the stock market, their state governments and manufacturing, particularly technology, are not. Despite the lack of strong employment growth, or even any growth at all, multifamily starts were up at least 5% last year in 29 states. In 10 of those jurisdictions, moreover, production was up by a third or more. This year, NAHB expects the apartment sector to expand in 26 states. But with the notable exception of California, Duobinis said, the largest percentage changes will be in small market states. Starts Have 'Freight-Train' Momentum Despite High Vacancies In another convention address, meanwhile, David Seiders, NAHB's chief economist, said he was “shocked and awed” by the strength of the multifamily market in the face of flagging fundamentals. Vacancy rates “are pretty darn high,” Seiders told the meeting. “They're not as high as in the late '80s, but then, that was one heck of a period.” He also said that the three-month absorption rate for new rental apartments, a measure of how quickly properties with five or more units are renting up, is at an historic low, “another signal that something is amiss.” Despite all this, the economist said, multifamily developers continue to produce 340,000 units a year. “It looks like everything is under control,” he said. “This measure has been pretty much flat since 1997. You'd never know from looking at the freight-train momentum of multifamily housing starts that the market balance has deteriorated so badly.” Slowdown Expected in Multifamily LendingThe multifamily market holds plenty of promise, but it won't reach that potential for several more years, according to one of Fannie Mae's top apartment executives. “We really don't see great origination years again until 2007,” Richard Lawch said at NAHB's annual Pillars of the Industry Conference in Boca Raton last month. Until then, he told the apartment industry conference, lending in the multifamily sector will be unspectacular at best. Lawch, who is senior vice president of multifamily production and capital markets for Fannie Mae, said “now that everybody who could possibly refinance has,” apartment lending will top out at a mere $55 billion this year. (Fannie Mae gobbled up nearly half that amount all by itself last year, when it all but equaled its 2001 volume even though the overall multifamily market slipped by some 30%. And Freddie Mac invested $14.3 billion in 2002.) But volumes in subsequent years will be even worse, he predicted: Just $45 billion in 2004 and $48 billion in 2005. “Things are going to be pretty slow for a while,” Lawch ventured. Noting that the apartment sector tends to lag the general economy, the Fannie Mae executive said multifamily lending won't return to last year's levels until the economy improves and the market catches up. The market's fundamentals are “profoundly terrible” right now, he told the conference. “Only after the economy gets going will apartment lending pick up.” Lawch said the only reason lenders have remained in the market this long is that apartments are the only investments that offer any kind of decent return. “Multifamily is one of the prettiest pigs in the barn,” he said. “Capital is looking for a home and multifamily is just swell. In fact, it looks pretty good when compared to other investments. But capital is fickle, and the only question is how long it will stay in multifamily housing.” He added, however, that over the longer haul, the demographic trends suggest “nothing but positive markets are ahead for those who can wait out the current doldrums. With 78 million echo boomers age 18-35 on the horizon and 700,000 immigrants coming to U.S. shores every year,” he said, “a great decade lies ahead of us.” Tax Credit Legwork a Must for SuccessThe third in a three-part series. A strong sense of commitment will get a developer through the complex process of learning how to structure and manage a Low Income Housing Tax Credit deal. You need to begin by understanding the rules of the Housing Finance Agency (HFA) in the state in which you plan to build. Get HFA Training Most states’ HFAs provide training programs before each round of tax credit awards. Make an appointment to talk with a member of the HFA staff to discuss its programs and requirements, and how things work. Then decide whether or not your firm can meet those requirements. Know Your HFA’s Priorities For each annual distribution of credits, your HFA will provide its Qualified Allocation Plan (QAP). The QAP indicates the HFA's priorities and reflects those priorities in a detailed points rating system. Everything involved in your proposed project is rated, and only those projects with at least the specified threshold minimum number of points can be considered. For example, the QAP might specify that your HFA gives a proposal additional points if:
Of course, the more points you can include beyond the minimum, the more attractive your proposal will be. Sometimes HFAs give points for proposals that promise to continue to manage the project as an affordable property far beyond the 15-year IRS minimum. After 15 years, the IRS allows developers to refinance and convert the property to market-rate. In addition to special features, services and conditions, developers get points for experience. Developers with a successful track record are more likely to receive credits to help finance a new project. A lack of tax-credit experience may be a slight disadvantage, but it certainly doesn’t eliminate a company from consideration. New developers enter this system every year. Many non-profit groups with absolutely no experience apply because the program often provides that 10% of the credits are set aside for non-profits. Some non-profits that have no experience will partner with a company that does in order to learn how it’s done so they can go it alone in the future. Political and Community Savvy Helps, Too Beyond the willingness to deal with regulations, the awards system and the complex funding required, a successful tax credit developer will have a certain amount of political savvy and a willingness to build a relationship with the community and its residents. These programs don’t work in isolation. Your best chance for a successful award of credits comes if your project is one that the community knows about and wants. Do the legwork to educate community stakeholders to the benefits of your proposal. If local politicians sense grassroots support for your project, they understand that it’s in their best interest to lend support to the project as well. It’s also important to stay on top of legislative and regulatory changes that affect tax-credit development. Groups such as the Multifamily Council’s Housing Credit Group keep developers informed and lobby for improvements to the program. In market-rate development, there’s always the possibility that you can build a project that may become more financially successful than originally anticipated. That doesn’t happen in tax-credit development. Success in tax-credit development is based upon fixed underwriting limitations and is a result of careful and thorough preparation, making a workable plan, and ensuring that everyone involved follows the plan for the long term. The end result? Steady, if modest, profits for a successful company, and the knowledge that hundreds of your fellow citizens are significantly better off because of your efforts. It’s worth it. Earlier Articles in This Series
Robert Greer is president of Michaels Development Company, Inc. in Marlton, NJ, and has 25 years of experience in tax-credit development, both as a director of the Pennsylvania Housing Finance Agency and as a developer. He is the chair of the NAHB Multifamily Housing Credit Group. Greer can be reached at 856-596-3008 or via e-mail. To visit the Michaels Development Company Web site, click here. Know Your Technology Needs Before You InvestThe first in a series of tech talks for builders. Many home builders and remodelers research new technology options by “seeing what’s out there,” and then determining if it makes sense for their companies. Others hear about the software package that XYZ building company uses and figure it will work for them, too. Do either of these approaches sound familiar to you? Neither strategy works because they both take a “back end first” approach to technology. Such strategies look at ultimate results and assume all the contingent steps to make those results work will ultimately fall into place. That’s about as logical as Boeing making a new airplane and, without testing it, holding a raffle for the first load of passengers to try it out. Software operations are nothing more than manual procedures made more efficient and put into repeated, seamless practice. If those procedures are inefficient, the software will be, too — no matter what package you run. For example, if a sales office processes contracts inconsistently, it’s pretty difficult to implement an automated sales office system. What the Series Will Explore I’ve developed this Tech Talk series of articles to give you a road map for plotting your short- and long-term information system needs. I’ll discuss eight functions of a home building business where technology can play an important role. You’ll need to consider the lost opportunities from not applying technology to each of these areas. You’ll also need to consider whether or not to use in-house or contracted systems and expertise to implement a given solution. Expect and Plan for Change It doesn’t stop there. Before you can apply a technological solution, you need to map out the process controls achieved with the solution. From there, you need to figure out how to train your staff to work with the new technology, and to determine the culture change involved. Change, however gradual in nature, will cause a reaction. Anticipating that reaction and dealing with it openly and positively is the starting point of implementing technology change. This type of breakdown may seem exhaustive for a small-volume builder. After all, what culture change is involved if you employ only three or four people? Whether or not you use a computerized solution to better control one of the processes we’ll examine in this series, what will you do to better control that aspect of the business? Focus and change can be organizational — even if the “organization” is one person. Regardless of your company’s size or volume, technology represents the biggest revolution in the last 50 years and it shows no signs of letting up. It puts a lot of power in a builder’s hands; without it, you can’t effectively compete. Incorporating technology into your business is not a matter of “if,” but “when.” Next week: strategic planning
Bill Allen is president of W.A. Allen Consulting and a member of NAHB’s Business Management & Information Technology Committee. His company, headquartered in Redmond, WA, provides information technology consulting services and process management assistance to the home building industry. Allen can be reached at 425-885-4489 or via e-mail. Visit the W.A. Allen Consulting Web site at http://waallenconsulting.com.
Want more information about using technology in your business? Check out the online resources available from NAHB’s Business Management Department: Tools for Running Your Business. There are also articles about human resources, financial management, sales, production, customer service, and other business-related topics. In addition, visit the NAHB Software Users Network Discussion Forum (SUN) to ask technology consultants and other builders what they think of various software packages and applications. BuilderBooks.com also offers a variety of publications about computer technology. To view or purchase these publications online, click here. Toolbox Talk: Don’t Overlook Scaffold SafetyThe next in a series of monthly, employee-oriented toolbox safety training articles. We use scaffolds so much on the job, it’s often easy to forget that they can be dangerous. You can be injured in a fall from them, or by tools and equipment that drop off them. So it's important to work safely on and around scaffolds. Here are some basic safety tips: Put Your Scaffold on Solid Footing Scaffolds have to be erected on good, solid footing on ground that won't sink or move. Scaffolds have to be able to support four times more weight than you're going to put on them. If the ground isn't solid — if it's muddy or sandy — you have to use something like mudsills to make the footing stable. If possible, use the bases that came with the scaffold. If you can't, you can use plywood to prevent sinking. Remember though, the wood only should be used to stop sinking and not as cribbing when the ground is uneven. Additionally, masonry blocks and bricks cannot be uses for support, according to the OSHA standard. Guardrails and Toeboards Keep People and Items Up High Guardrails and toeboards will help keep people, tools and equipment from falling off a scaffold. Guardrails have to be on all scaffolds more than 10 feet above the ground and can be made from 2x4s or metal. Guardrails need to be about 42 inches high with a midrail at about 21 inches, just like the guardrails inside the house. The guardrail has to go around all open sides and ends. You also need a guardrail in front of the scaffold unless you're close enough to work without falling through. Toeboards on the perimeter of the scaffolding have to be at least four inches tall. If people will be working or walking under the scaffold, you have to put a screen in the entire opening between the toeboard and guardrail to keep items from falling through and hitting someone. Pay Attention to the Planking, Too Use scaffold grade planking, planking that is very strong and free from cracks and knots. When installing the planking, make sure it extends between six and 12 inches beyond the end of the scaffold. Also, make sure the planks overlap themselves at least 12 inches or are somehow kept in place. If you are using pre-made platforms as your planking, make sure they are secured and stay put. Your Scaffold Is Not a Ladder Now that the scaffold is in place, how do you get up there to work? Climbing the supports may seem like the easiest and most convenient way, but that’s not what most scaffold frames were made for. Remember, they are engineered to support four times their weight so you can work safely on them. To get there, use a good ladder. It’s the safest way. Keep on the Lookout for Damage Anytime you see a part of the scaffold that is damaged, including braces, brackets, screw legs, ladders or planking, let your boss know and make sure it gets replaced or repaired. And be sure to keep an eye out for sinking footings. For more information, contact Robert Matuga, director, Labor, Safety & Health Services at 800-368-5242 x8507.
NAHB Toolbox Safety Talks, available through BuilderBooks.com, are designed to supplement your employee safety training program and help you identify those areas where you may need to develop additional safety training for your employees. Each individual talk is intended to be used as a brief, job site training session of approximately 15 minutes. Each talk includes questions that encourage employees to share their experiences about working safely or accidents that they may have been involved in. Hearing others talk about what has happened to them will make the reality of injuries more apparent, and the safety message much clearer. The complete Toolbox Safety Talks series and other safety training and OSHA information are available through BuilderBooks.com or by calling 800-223-2665. NAHB Toolbox Safety Talks are available in English and English-Spanish editions. Discussions on Rural Housing Needs ContinueRepresentatives from NAHB met recently with Thomas Dorr, under secretary for rural development at the U.S. Department of Agriculture, to promote housing opportunities for rural American families. At that meeting, NAHB First Vice President Bobby Rayburn and Jess Hall, a rural builder and NAHB national vice president from Palmer, AK, said that adequate federal budget funding for the Rural Housing Service's (RHS) single- and multifamily programs is needed to provide new and preserve existing affordable housing in rural communities. They also spoke in support of an RHS study to assess the extent of the financial and physical needs of the existing Sec. 515 rental housing portfolio and to determine how to improve current management practices. Sec. 515 provides loans to eligible applicants — such as corporations, partnerships and associations — to construct housing in rural areas for low-income families and senior citizens, including the disabled and the handicapped. The dialogue on rural housing will continue in June, National Homeownership Month, with NAHB’s participation in a Rural Housing Service Summit in Washington, D.C. For more information from NAHB, e-mail Bill Renner or call him at 800-368-5242 x8597. HBI Helping Builders Find Skilled WorkersThe Home Builders Institute, the work force development arm of NAHB, is traveling the home show circuit to inform association members of how they can use its resources to find qualified craft workers. At exhibitions held at the Worcester, MA, Home Show in February, the Rhode Island Home Show in Providence in March and last week’s MidAtlantic Builders Conference in Atlantic City, about 1,000 NAHB members have met with HBI representatives to discuss how they can find industry-trained workers through the institute’s Job Corps training programs. Eighteen students who are enrolled in HBI programs at the Edison Job Corps Center in Northern New Jersey visited the Atlantic City show. The visit was made possible by Howard Wolfe, executive vice president and CEO of the Community Builders Association of New Jersey, and Frank Gambony, a former HBI trustee. This was the fifth year HBI has participated in the annual MidAtlantic builders show. Home builders associations that are interested in featuring HBI programs at their upcoming shows, should e-mail Maria McIntyre at HBI, or call her at 800-795-7955 x8912. Performance of CPVC Piping System UnmatchedIn independent testing, new CPVC (chlorinated polyvinyl chloride) piping from Noveon, Inc., has been found to have the highest impact resistance and heat deflection temperature of any other CPVC compound. Headquartered in Cleveland, with regional centers in Brussels and Hong Kong, Noveon produces special polymers, polymer-based formulations and chemical additives for consumer and industrial products. It is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. The manufacturer’s FlowGuard Gold® CPVC can withstand three times the impact of standard CPVC. This strength makes it easier to cut the pipe on the construction site, resulting in fewer fractures and breaks and less scrap. FlowGuard Gold water distribution systems can be installed in single-family homes, high-rise buildings and a variety of commercial facilities. The product has a heat distortion temperature of 230° F, compared to 212° for standard CPVC, which enables it to stay straight where other systems may sag and bend. Stub-outs won’t distort, and rigidity between hangers will remain straight and strong. FlowGuard Gold pipe and fittings are manufactured to specific performance requirements in accordance with a stringent quality assurance program that exceeds industry standards. NAHB Board to Meet in Early MayOFFICIAL MEETING NOTICE OF The following schedule of events is a partial listing provided as a notice for the upcoming NAHB Board of Directors Meeting and Legislative Conference at the spring board meeting in Washington, D.C., May 6-11, 2003. Meetings will be held at the Marriott Wardman Park Hotel. The spring board program will identify the exact time and place of each scheduled meeting. Tuesday, May 6 Wednesday, May 7 Thursday, May 8 Friday, May 9 Saturday, May 10 Sunday, May 11 May 5 Is National Membership DayNational Membership Day — the annual culmination of NAHB’s ongoing efforts to recruit and retain members — is coming up fast, on May 5, and association members are being urged to participate in the drive. In competition with home builders associations across the country, throughout National Membership Day, associations will be calling in their projected new members and council member totals for the month of May. Current association members are ideal recruiters, and they are being asked to help build NAHB “one member at a time.” To find out how you can get involved, contact your membership chairperson or staff member at your home builders association. For more information, contact your local HBA, or call 800-368-5242 x8440. Sears Contract Sales is the exclusive sponsor of National Membership Day. |