Nation's Building News Online: April 28, 2003Print All Articles Text Version |
|
Sponsored by Countrywide
Home Loans National Builder Division
|
|
Recovery Slowly Shapes Up in War’s AftermathLooking at how housing and the economy will perform now that the negative impact of the war in Iraq seems to be fading, analysts speaking at the NAHB Construction Forecast Conference in Washington, D.C. on April 24 predicted that economic growth and the job market will be improving substantially in this year’s second half and in 2004 following initially weak quarters in 2003. Most economists addressing the conference said that housing construction for this year would equal or slightly surpass last year’s 1.7 million housing starts, with single-family activity remaining especially strong and multifamily production receding slightly. They said that the Federal Reserve would probably not move to increase interest rates until later in the year, at the earliest. And they forecast that mortgage interest rates would climb slowly above their current level (in the 5.8% range) as the year progresses and the economy expands, but that mortgage rates for this year would average about half a percentage point lower than last year. David Seiders, NAHB’s chief economist, noted that “a huge decline” in non-residential construction has been beneficial to home builders, easing up demand for construction workers and for the most part stabilizing the prices of building materials. Calling it “the weakest part of the U.S. economy,” he said this sector “feels like it’s scratching around for a bottom now.” Builders may also have been helped some by “an unbelievable contraction” in the production of manufactured (HUD-code) homes, Seiders said. They have slumped from an annual rate of 375,000 in the late 1990s to about 125,000 in the current quarter, he said. “This is a real disaster story, but it opens up more room for conventionally built single-family homes.” While housing has contributed to growth in the nation’s economy through the past recession and into the current period, Seiders said that one question for the economy is what will happen when housing activity tapers off a little and is no longer a “growth engine” for the Gross Domestic Product. David Wyss, chief economist for Standard & Poor’s, said that he doesn’t expect business spending to “take the lead” in the economy anytime soon because only 73% of the nation’s industrial capacity is currently being used. Also, consumers, who demonstrated resilience in the aftermath of September 11 and in the midst of significant job losses, appear to be “spent out.” As a result, he expects the recovery to be “disappointing” and “sluggish,” for at least a few more quarters. Wyss forecasted that capital spending on equipment and high-tech would proceed at roughly half the 15% growth rate that typically occurs in a vigorous economic recovery. Most of the demand is coming from replacing short-lived, five-year old computers, “and that doesn’t get us back to boom times,” he said. Fiscal stimulus — including about $100 billion spent on the war and a tax cut of perhaps $450 billion — will help keep the economy growing, he said, and strong monetary stimulus already is in place. “Deficits are needed in the short run,” Wyss said, but the problem is that it will be difficult to get back to a balanced budget” when the economy is stronger, and that will lead to higher interest rates, to the detriment of consumer spending. He said he didn’t expect to see another balanced budget in his lifetime. Wyss looked for little economic stimulus coming out of the stock market, which he believes has entered into “a period of sub-normal gains.” He added that, “the market will level off and will look a lot less exciting than in the ’80s and ’90s.” As for where this will leave overall economic growth, “after the war, we will go to where we were before the war,” which would leave annual growth in the GDP at 2.9%, he said. Frank Nothaft, chief economist for Freddie Mac, said that fiscal and monetary stimulus would push economic growth toward an annual rate of 4% in the second half of 2003, up from about 2%-2.5% in the first half. Nothaft said that mortgage rates, which have been at their lowest levels in more than 40 years, would continue to be “a powerful stimulant to the housing sector.” He predicted that 30-year, fixed-rate mortgages would average between 5.75% and 6.25% this year. The current refinancing boom could last a couple more months, he said, but will drop off as mortgage rates push a little bit higher. Just refinancing an average $130,000-$140,000 home loan last year reduced monthly payments by $100, he said, “and that is just as good as a tax cut.” Also, in cash-outs from refinancing last year, home owners “took away an extra $90 billion from the settlement table,” he said. Photos by Morris Semiatin Building News Coast To CoastEfforts to Boost Green BuildingThe U.S. Green Building Council is hoping to help remove barriers in the construction industry that are impeding the progress of environmentally friendly and energy-efficient buildings. The non-profit plans to release a report the week of April 28 that will detail steps the federal government can take to "significantly accelerate the mainstreaming of high-performance building practices in the industry while saving taxpayer dollars." Green buildings use products and feature designs that are more energy- and water-efficient and provide a better atmosphere for tenants and their workers. Among the recommendations the council will push are establishing a national green building tax credit; allowing federal building projects to be evaluated based on the long-term costs of building green, instead of initial design and construction costs; and boosting government research funding on such topics as developing materials and technologies. The council's proposals are the direct result of an informal hearing last year in front of the U.S. Senate Committee on Environment and Public Works. Plots & Ploys: Charitable CondosIn hopes of drumming up sales in the Brazilian Court condo-hotel project while also donating to a charitable cause, the team behind the Palm Beach, FL, development is giving $2,500 to the Breast Cancer Research Foundation every time a buyer takes a unit off the market. "We don't expect people to buy the condos simply because of the donation, but we hope that they'll spread the word," explains Richard Schlesinger of Ceebraid Signal Corp., which is converting the condo-hotel from a 1920s luxury lodging property. The contribution includes $1,500 from Ceebraid and another $1,000 from the project's sales and marketing firms on the sale of each of the units, which owners can rent as hotel rooms when they are not using the property themselves. The units are selling for $450,000 to $2.5 million. Ceebraid is not the first residential builder to embrace this approach to sales; Dallas-based Centex Homes, for example, has given $35 to the Nature Conservancy for every home that it builds and sells. Since it started the drive in 1999, the company has contributed an estimated $3 million to the group. Whys and Why Nots of Wi-Fi: Great for Home, Iffy for OfficeWhile Synergy Research Group reports that 2002 spending on wireless fidelity, or Wi-Fi, devices retreated 8% among business users to $808 million, it surged 79% among home owners to $985 million. The technology's success with residential customers is grounded in the fact that some 57 million households in the world have fast Internet connections. Through Wi-Fi, they can use a single Internet connection for multiple computers and wirelessly link other devices. Home owners also are warming up to Wi-Fi because its prices keep coming down. With the growth in consumer interest, more and more manufacturers are looking to that market for profitability. Business users, meanwhile, are being deterred by decreased technology spending; security issues; the desire for products that use all three wireless standards — 802.11b, 802.11a and 802.11g; and the complexity of network configuration. Pretty Houses Sell FirstLawn & Garden magazine reports that home owners are spending a record $17.4 billion on landscaping, which enhances property value and gives prospective buyers a good first impression. Home owners should concentrate on the front of the dwelling for maximum curb appeal, saving backyard improvements for their own pleasure. According to a study in the International Society of Arboriculture's "Guide for Plant Appraisal," attractive landscaping can boost a home's sale price by as much as 5%; while poor landscaping can slash sales prices by 8%-10% in comparison to similar neighborhood properties. Though home owners can create a beautiful yard themselves, more and more are hiring landscape architects, horticulturalists, carpenters, masons and landscape technicians to save and accentuate the valuable trees and vegetation already on the property, as well as to create elaborate gardens. Tree experts, meanwhile, can determine the value of a home's landscaping by considering the size, species, condition and location of trees on the property. Says landscape architect Catherine Mahan, "When a potential customer sees the landscaped building, she thinks, 'Oh, someone loves this house — I'd be proud to live here.'” The Tear-Down Trend: A Developing SituationThe lack of prime lots in South Florida has forced luxury builders to purchase and raze existing homes, often replacing them with so-called McMansions. Critics blame tear-downs for rising property taxes and changes in a neighborhood's architectural character, which prompted officials in Miami Beach two years ago to outlaw the demolition of pre-1942 homes without special permits. Elsewhere, Lighthouse Point's property tax revenue surged nearly $30 million last year due to the sale of 28 new homes built in the stead of an equal number of more modest properties; their value soared 300% from $11.7 million to more than $48 million. Shear Construction & Development's Dana Shear drives through upscale neighborhoods looking for homes in poor condition, and she says builders benefit by negotiating with home owners before the home hits the market. Though builders usually see potential tear-downs as worthless structures taking up valuable space, many home owners disagree. According to Coldwell Banker agent Carlos Justo, "Some will sell their house for less value to someone who's going to keep it, rather than to someone who is going to tear it down." Tree Ordinance Proposal Toppled AgainIn Florida, the Citrus County Commission decided not to pass the Department of Development Services' proposed tree ordinance, which would have required builders to leave a certain number of trees untouched when clearing a parcel for development. The commission threw out the ordinance for the eighth time, mainly because it would have encroached on landowner rights. The proposed ordinance is confusing to many, especially because it would have prohibited builders' tree-cutting activity during development while letting home owners cut down as many of the trees on their property as they wished once they took title to the land. In response, Citrus County Builders Association attorney Clark Stilwell said the group believes a simple ordinance is necessary for area builders to effectively compete with those in nearby counties. Meanwhile, commission chairman Jim Fowler and commissioner Roger Batchelor showed disdain for scrub oaks and blackjack oaks, pressing for an exemption that would allow the native trees to be clear-cut. Victory on Home Front in Military HousingThe Defense Department reports that 100,000 military housing units will be privatized by the end of next year, and 6,000 of the 30,000 units that have already been turned over to the private sector have since been renovated or rebuilt. The $7 billion program is an attempt to improve military housing, over 60% of which is in poor condition and many of which additionally are too small to meet the needs of military families. By involving the private sector, military housing is replaced or repaired much more quickly. In fact, Actus Lend-Lease plans to build 974 new units and renovate 4,600 units at Fort Hood, TX, by 2009; the project would not have been completed until 2031 if the military were left in charge. Also in the works is Warwick, RI-based Picerne Real Estate Group's $460 million plan to rebuild 3,107 homes at the Fort Meade Army base near Baltimore, and GMAC commercial Holding Capital Corp.'s drive to complete over $800 million in redevelopment projects at Fort Meade, Fort Bragg, NC, and Fort Pendleton, CA. Research shows that better-quality housing can drive up military retention rates by as much as 15%. Builders Team With Ultimate Electronics to Offer Home Networking Solutions for New Homes in ColoradoUltimate Electronics Inc. will join forces with D.R. Horton, the Genesee Company, Lennar Homes, Oakwood Homes, Richmond American Homes, US Home, Sivage Thomas Homes, Peninsula Quality Builders, Taylor-Morley Homes and local custom builders to install structured wiring, security systems, home theater and multi-room audio packages in about 7,500 new homes in Colorado, Arizona, Iowa, Missouri and New Mexico. These residential networking solutions will give home owners a cost-effective way to equip their properties with the newest technologies. Forrester Research estimates that 58% of all new homes in the United States will be networked by next year. Devotional SanctuariesIn Corpus Christi, TX, and other parts of the Coastal Bend, prayer rooms are becoming popular among home owners. These spaces, which can be incorporated into the design of a new home or carved out during a remodel, are used for Bible-reading and meditation. They may feature bookshelves, wooden altars, statues and crosses. One home owner designed the prayer room to resemble a small county church with a single pew, handrails and a stained glass window. Home owner Sherre Ernster says of the prayer room in her Rockport-based home, "I wanted to create a simple, solitary place to go apart from life and be alone with God." Immigrants Playing Role in Energizing Home SalesAs part of the growing evidence that U.S. immigrants are an increasingly dynamic part of the homeownership market, a recent National Association of Realtor® study found that immigrants have contributed to roughly 33% of the household growth in the United States over the last seven-plus years. A similar study conducted by Harvard University's Joint Center for Housing Studies determined that foreign-born home owners currently have over $1.2 trillion in residential property wealth, which accounts for 10% of the nationwide total. Harvard researchers further learned that the average price of houses purchased by foreign-born buyers is $150,000, which is 50% higher than that of native-born, first-time home buyers. Finally, the study determined that of the various ethnic groups, Asian home buyers have the tendency to make the highest downpayments; however, all immigrant buyers tend to plunk down a bigger share of the home-purchase price than native-born, first-time buyers. The Winsulator: Window Insulation System Has an Added Selling Point in a Post-9/11 WorldFlorida-based South Sun Energy Conservations Inc. created the Winsulator — an acrylic sheet used to insulate single-pane glass windows — to offer energy savings to residential customers by keeping their homes cool in the summer. By fortifying the Winsulator's acrylic panels with a steel frame, Ed VerVane has re-engineered his product into one that traps broken glass during explosions. However, unlike other anti-terrorism window systems, the Winsulator offers both blast mitigation and energy savings. With a low-hazard Level 4 rating, the improved Winsulator may soon be installed at Jacksonville's Naval Air Station and other government and private sector buildings. According to VerVane, "If a car bomb went off, say 50 feet away, instead of blasting glass all over the room, now the glass will not be blasted across the room and shred you to pieces." VerVane anticipates sales to grow from $4 million this year to upwards of $10 million over the next two or so years. What Baby-Boomer Buyers WantAccording to NAHB Seniors Housing Council consultant Margaret Wylde, baby boomers — born from 1946 to 1964 — base their real estate decisions on their lifestyle rather than on their age. NAHB's survey, "Boomers on the Horizon: Housing Preferences of the 55+ Market," found that most individuals in this age category want one-story, single-family homes in the suburbs, with younger boomers more likely to have their dwellings custom built and older boomers more likely to purchase an existing property. A majority prefer homes ranging from 1,500 to 1,900 square feet, smaller than the average size of 2,300 sq. ft. The survey additionally found that nearly 50% prefer two-car garages, but that those in the South Atlantic and South Central region want carports. Spacious kitchens and three bedrooms are also in demand; and respondents said the extra bedrooms would be made into guest rooms, home offices, sewing rooms, hobby rooms, exercise rooms, media rooms, sitting rooms or storage spaces. Most boomers want two bathrooms with white fixtures; laundry rooms near the kitchen; low maintenance, durable and appealing brick exteriors; bays, skylights, greenhouse and other specialty windows; and exterior lighting. Younger boomers also prefer French doors, crown molding, fireplaces, light wood cabinets, solid-surface countertops and decks, while more affluent boomers desire lawn sprinkler systems and brick pavers. The survey also revealed that boomers consider amenities when choosing a home, such as walking and jogging trails and proximity to public transportation, among others. Zoning Out: Exclusionary Rules Exacerbate Affordable-Housing WoesThe affordable housing shortage can be attributed to the lack of funds to build new projects and replace enough low-cost units to keep pace with demand, as well as to an exclusionary situation created by zoning laws, land-use rules and restrictions on lot size and multifamily construction. A major challenge to affordable housing, according to Brookings Institution senior fellow Anthony Downs, is the tendency for middle- and upper-income households to move from low-income areas and block poorer residents from moving into their neighborhoods. In response, PolicyLink's "equitable development toolkit” is designed to allow low-income residents to reap the benefits of growth and development and features strategies such as "inclusionary zoning," which lets developers increase density and forego land donations if they set aside a certain number of units for low-income households. Meanwhile, Downs believes the federal government should require cities to provide a "fair share" of affordable housing, reserve land for multifamily construction and let home owners rent out part of their homes as granny flats. Other strategies include limited-equity housing cooperatives; first-time buyer programs, such as downpayment assistance and low-interest mortgages; and location-efficient mortgages, which provide more favorable terms to borrowers living near public transit. However, University of Southern California urban planning and demography professor Dowell Myers says more affordable multifamily rentals — not owned townhouses — are needed to meet demand. Some Like It HOTA study by Alain Pinel Realtors Vice President and Director of Relocation Margaret Morgan finds that 46% of home sellers in the San Francisco Bay area are moving out of California rather than staying in the state. Of the more than 200 sellers polled in seven counties, only 37% remained in California; and only about one-fourth of those opted to stay in the Bay Area. At the same time, 46% of those surveyed defected out of state — with Arizona, Colorado, Texas and Nevada as the most popular destinations. While many are doing so due to job relocations, others have based their decision on the lower cost of living, better schools, lower taxes and the lack of natural disasters. Moreover, many Bay Area sellers are motivated by sky-high housing values that allow them to obtain a steep price for their property and purchase a larger and nicer home in another state for significantly less. Scottsdale Convention and Visitors Bureau Public Relations Manager Michelle Streeter, for example, says that home owners can move to the Arizona city and “get three times the size house here for the price of the one you sold in California.” New 'Fixed Wireless' Is Perched to ExpandMore and more people may choose to use fixed wireless to get broadband Internet service as technology improves and federal regulators make efforts to free up additional spectrum. Today, about 1,800 Internet providers use fixed wireless systems to deliver broadband access to homes and businesses, according to In-Stat/MDR. The technology is most popular in rural areas that lack DSL or cable. But unlike widely scattered cell phone signals, fixed wireless consists of a targeted beam pointed to a specific location from installations on towers or rooftops, says Owen Griffin of Continental VisiNet Broadband in Hampton Roads, VA. This can be convenient for businesses or homes that want instant broadband connections without relying on phone lines or cable. But a clear line of sight is necessary for the broad service to be properly delivered, says Chuck Blount, vice president of Atlantic Communications in Newport News, VA. However, he says equipment for receiving fixed wireless is now available at hundreds of dollars less than conventional gear. But Michael S. Ryan, president of Pinnacle, warns that small companies may be unable to afford the cost of getting roof rights or tower locations from property owners, which can run in the thousands of dollars. In Battle to Block Spam, Two Products Stand OutWithout a federal bill prohibiting spam, computer users must simply choose the spam-fighting software that best meets their needs. Cloudmark's Spamnet, for instance, lets users decide whether a message is spam by sending particular messages to a separate spam folder. However, important messages could be considered spam, which makes it important for users to scan the folder. Each time the user tells the system which messages are spam and which are not, Cloudmark uses the information to improve its filtering techniques. The product weeds out 95% of unsolicited e-mails. Mailblocks, meanwhile, uses the more dependable “challenge response” method to combat spam. For $9.95 per year, users create a white list of acceptable senders, and senders not on the white list receive an automatic reply. Spammers cannot reply to the message, but legitimate human senders can be easily added to the white list. Though the automated challenge messages can frustrate friends and business contacts, Mailblocks is the only anti-spam filter with near perfect results. Index Finds Remodeling Lull EndingThe lull in residential remodeling activity that settled over the industry at the end of last year is apparently coming to an end, according to NAHB’s Remodeling Market Index (RMI) for the first quarter of 2003. The more than 600 professional remodelers who were surveyed for the index reported that business was starting to pick up early this year and they expect significant improvements for the balance of 2003. “Driven by low interest rates, home equity conversions and the strong appeal of investing in the homestead, residential property owners stepped up the pace of contracting for improvements, repairs, additions and general maintenance on their homes and apartments in the first quarter of 2003,” said NAHB Remodelors™ Council Chairman Mike Weiss. “This bodes well heading into the spring home improvement season.” The latest index showed that current market conditions rose to 46.4 during the first quarter, up 3.2 points from the final quarter of 2002, but still below a 52.7 reading for the same period a year earlier. Future expectations rose to 50.3, up a remarkable 11.2 points from the final quarter of 2002, but they were still not as strong as last year’s peak reading of 54.6 in the first quarter. RMI readings for the first quarter were strongest in the Northeast, although the index was up in every region of the country. The RMI also found that kitchen and bathroom remodels were the leading jobs for professional remodelers during the first quarter, followed by room additions and whole house remodeling. Remodelers said that granite countertops were the most popular single feature requested by clients, by a large margin. Commercial-grade appliances and upgraded wiring for high-speed Internet access were the second- and third-most requested jobs. Housing SnapshotThe best news for the economy last week came from new and existing housing sales for March, which remained strong. In fact, housing continues to remain the bright spot in a lackluster national economy. Government reports showed that the economy grew at an anemic 1.6% yearly rate in the first quarter and that there were encouraging gains in consumer spending and incomes in March. Mortgage interest rates showed little change from the previous week and remained at very affordable levels. Mortgage Interest Rates30 Year Fixed Rate: 5.79\% Housing Starts: Mar. 2003Total: 1.78 million\% New Home Sales: Mar. 2003 *1.01 million Existing Home Sales: Mar. 2003 *5.53 million * Seasonally Adjusted Annual Rate Green Building Is on the RiseIt’s still a long way from being a common household name, but “green building” is a trend that is on the march. Taking their cue from the marketplace and the rising number of home buyers who want their homes to conserve resources and to be kind to the environment, the NAHB Research Center and builders in the vanguard are doing some exciting new things. What they are doing bears watching by every member of this industry, because these are the things that we will all be doing in the not too distant future. Green building involves a number of practices:
While nobody can argue that these aren’t the right things to do, local building officials will still need to be convinced about the soundness of pursuing unfamiliar development proposals or building techniques. That educational process is happening now. Our federal legislators are also starting to get behind the green building movement. A bill that passed the House of Representatives recently would provide a tax credit to build new energy-efficient housing. It would also give households a tax credit for remodeling projects that boost the energy efficiency of their existing homes. You will be hearing more about this important piece of legislation as it continues to make its way through the Congress. Here are the keys to more widespread acceptance of green building practices:
In the meantime, green building is on the rise, taking hold in increments. We are staying far ahead of the regulators and actually finding the path to enable housing to help answer our nation’s environmental concerns. We are harnessing the latest technology. We are sharing new ideas. We are demonstrating that ours is an industry as dynamic as the families who rely upon us to respond to their changing wants and needs in the homes in which they live. New-Home Sales Rebound Strongly in MarchSales of new single-family homes rose 7.3% in March, surpassing the million-unit mark for the sixth time on record and almost completely offsetting declines in the first two months of the year, according to Commerce Department figures released last week.NAHB President Kent Conine said that the rebound provided “welcome reassurance of housing’s continued vitality and its role as a crucial stabilizing force in the nation’s economy.” The housing component of the Gross Domestic Product grew 12% in this year’s first quarter, noted David Seiders, NAHB’s chief economist, and that was faster than any other part of the economy. “Residential fixed investment accounted for fully one-third of total GDP growth in the first quarter, even more than the substantial support it provided in 2002,” he said. New-home sales reached an exceptionally strong seasonally adjusted annual pace of 1.01 million units in March. Regionally, shrugging off the chilling effects of harsh winter weather, the Northeast led the rebound with a nearly unheard-of 82.5% surge to a seasonally adjusted annual sales pace of 104,000 units. Starts rose nearly 16% in the South, where bad weather had also contributed to previous declines. The West remained virtually unchanged, with a 0.4% gain, while the Midwest slumped 26.4% following a big gain in February. The inventory of unsold new homes declined 1.5% in March to 339,000 units, a 4.1-month supply at that month’s sales pace. New-home sales for 2003 “will likely be right on par with last year’s record-breaking 974,000 units,” Seiders predicted. Existing-Home Sales Ease in March From unprecedented levels earlier this year, existing single-family home sales in March slipped 5.6% to a seasonally adjusted annual rate of 5.53 million units, according to the National Association of Realtors®. Last month's sales activity was 2% above the pace of a year earlier and it was the 11th best monthly showing for existing-home sales on record. “There's a huge momentum of sales activity continuing, and we're now at a much more sustainable level for home sales going forward,” said David Lereah, the association's chief economist. “We believe this will be the second-best year on record for housing.” Home Prices Expected to Climb at a Slower PaceThe annual rate of house price increases is tapering off in most parts of the country, according to panelists at last week’s NAHB Construction Forecast Conference in Washington. From a peak of about 9% nationally at the beginning of the 2001 recession, annualized increases have receded to some degree and should decelerate further, “settling in” at the 4%-5% range in most parts of the country, said David Seiders, NAHB’s chief economist. Speculation during the past year in the news media over “bubbles bursting all over the place also will be receding as the economic recovery progresses,” Seiders said. Frank Nothaft, Freddie Mac’s chief economist, said that housing has none of the characteristics typical of assets that can experience sharp price declines. Assets that are susceptible to a burst in value, he said, are purely for investment and offer highly speculative returns, can be bought or traded at low transaction costs and are held for a relatively short period of time. In single-family housing in the U.S., “the consumption component is much more important than the investment component,” he said, and 90% is occupied by the owner. Transaction costs are very high, and the average family lives in their home for 14 years. “I haven’t heard of anyone who’s a day trader in housing,” Nothaft said. For a price bubble to occur, “you would also need oversupply,” he said. “But the inventory of houses for sale is at its lowest level in 30 years.” “Some places, yes, may see declines,” said Eric Belsky, executive director of the Joint Center for Housing Studies of Harvard University. “But there needs to be concentrated job losses, the likes of which we haven’t seen” recently. “When there’s a glut of houses on the market is when prices would fall,” he said. Recovery Road Longer for Some Cities Than OthersFrom a recession that most believe ended well over a year ago, almost every U.S. business sector except housing continues to struggle for a full-fledged rebound, Mark Zandi, chief economist and co-founder of Economy.com, told the NAHB Construction Forecast Conference last week. And the road back to recovery, he said, should be fairly predictable. An upturn will be imminent once businesses stop cutting jobs. Following that, they’ll begin rebuilding depleted inventories, then expanding advertising and travel in order to boost sales, next resuming investments in computer hardware and then investing in software. The job market will go from longer workweeks, to increased hiring of temporary workers, to, finally, more full-time employees. The recovery will start with “chips and distribution” centers, Zandi predicted, which means among the first to receive encouraging news about their local economies will be: Tampa, Orlando, Baltimore, Memphis, Philadelphia, Central New Jersey, San Antonio, Austin, Phoenix, San Diego, Los Angeles, Las Vegas, Oakland, Sacramento and Portland, OR. Next on board for recovery will be areas where software and travel are heavily represented: Atlanta, Charlotte, Indianapolis, Chicago, Minneapolis, Salt Lake City, San Jose and Houston, he said. Behind these will be metro areas where telecom and money management outfits have the most pull, including Boston, Pittsburgh, Kansas City, Oakland and San Francisco. By next year’s first quarter, Zandi added, traditional manufacturing hubs like Detroit, Milwaukee and cities in Ohio will see improvement, followed by places where investment banking and commercial aircraft building are tops — including Seattle and New York City. Ahead of the pack today, according to Stan Duobinis, NAHB’s director of forecasting, are places where home building, defense, health care and tourism are top industries. This includes cities in central and south Florida, Southern California, Las Vegas, San Antonio, Philadelphia, Washington, D.C. and Baltimore. But Duobinis warned that the road to recovery wouldn’t exactly be short. Employment grew at an annual rate of more than 1% in only five states between last February and this February: Hawaii, Nevada, New Mexico, Florida and Alaska. These are all included in Duobinis’ list of the top 10 states with the most robust economies. The others on the list are: Arizona, Vermont, South Carolina, Wyoming and the District of Columbia. His picks for the 10 weakest states are: North Carolina, New York, Michigan, Oklahoma, Connecticut, Delaware, Utah, Ohio, Massachusetts and Missouri. Single-family home sales and production are likely to gain in more than half of all states this year, Duobinis forecasted, primarily in the South and Southwest. Spotlight on: BostonLocal HBA: By Howard Chandler, EO of the Builders Association of Greater Boston Vital Stats:
Outlook for 2003: Because of severe winter weather, we’ve seen a big slowdown of building in recent months. There’s just been too much snow and too much cold to start projects. That’s caused a bit of a backlog, so now that we’re into the spring building season, builders are getting very busy again. Our building material suppliers are anticipating robust business into the summer. Remodeling activity is still particularly robust, due in part to the lingering effects of 9/11 when people started staying at home more and investing in their homes. Low interest rates are also helping, plus they’re creating a real sellers’ market, with so many qualified buyers out there. Even with the latest concerns stemming from the war and economic jitters, there’s a guarded optimism among builders. Biggest source of concern for builders: The biggest concern is, “Are we going to be able to continue to build?” and that’s due to regulatory constraints. We’re a “home rule” state — in Massachusetts, every community has its own zoning board and permitting authority. And there’s a real shortage of work force housing in the state. So builders are trying to effectively work with the legislature and local communities to get new homes built. A lot of communities have imposed two- and three-acre zoning requirements, and sprawl is a big concern. Governor Romney’s battle cry when he was elected was that we needed to build more homes near transportation centers, and do more infill. But that’s proving very difficult to get done. Conservation groups, moratoriums, zoning issues and community opposition are all factors to deal with. Market trends: Home values are so strong that many baby boomers are thinking the time may be right to sell and move to an active-adult community or condo. A real estate professional I know recently predicted that active-adult projects “will be the trend of the decade,” and I agree. We’ve just re-started a New England Seniors Housing Council, and I think it’s going to be very popular. What’s interesting is that the active-adult communities being built are a whole different ballgame from your stereotypical seniors’ development. One developer told me, “We used to put in walking paths and Bocci-ball courts, but that’s not what people are looking for anymore. Now our buyers are riding Harley Davidsons!” Especially popular are the higher-end adult communities, where the only age requirement is that one person in the household is 55 or better. These communities are laden with amenities, and often are condos. Eye on the EconomyDavid F. Seiders, NAHB Chief Economist The economy struggles into the second quarter …It’s fair to say that the U.S. economy “hit a wall” in February and weakened further in March. Substantial two-month contractions were registered for key economic indicators that included consumer confidence, payroll employment, industrial production and the index of leading economic indicators. But January was more respectable, and with ongoing cost cutting by corporate CEOs virtually assuring decent expansion of labor productivity (output per hour), growth of real GDP remained in the positive zone for the first quarter as a whole. It’s also clear that, outside of housing, the U.S. economy lacked forward momentum at the end of the first quarter, prompting widespread speculation about fallback into recession in the second quarter of the year. Our forecasts for this quarter show modest erosion of economic growth from the weak first quarter pace, and a modest rise in the unemployment rate, but not descent into bona fide recessionary conditions. There are some encouraging signals out there, including recent declines in energy costs, some strengthening of stock prices and some recovery in consumer sentiment (University of Michigan series) in early April. Our assumptions on the war have been on target, but geopolitical complications remain ... The heavy damage to the economy in February and March was caused largely by deep concerns among consumers and businesses about the war with Iraq and related matters that fall into the category of “geopolitical uncertainties.” NAHB’s forecast had assumed that war would break out in March and that coalition forces would achieve a decisive victory in about a month. These assumptions have essentially been borne out, although “relief rallies” in financial markets have been limited by uncertainties over the whereabouts of Saddam Hussein and his immediate circle, as well as by the failure to find convincing evidence of those “weapons of mass destruction” on Iraqi soil. Furthermore, other trouble spots have popped up in the Middle East, and the task of establishing a stable and friendly Iraq after the hostilities obviously is daunting. These issues are preventing a quick and strong snap-back of confidence and spending behavior, particularly among American businesses. But it’s still likely that things will improve on this front by mid-year — barring another major shock from the Middle East or elsewhere. The SARS outbreak, emanating from Hong Kong and southern China, could have frightening impacts on the global economy, but it’s much too early to assess the implications for the U.S. Fiscal stimulus is on the way, but the Bush tax plan has met stiff opposition ... We’ve been assuming a large amount of additional fiscal stimulus to the U.S. economy — composed of a surge of federal spending on defense and homeland security as well as a large package of tax cuts patterned after the President's “Jobs and Growth” package proposed in January — in the second half of this year and 2004. The federal spending component is on track, including an $80 billion supplemental appropriation that recently was approved by Congress. The Bush tax-cut plan, on the other hand, has met stiff opposition on Capitol Hill, leaving the size and composition of any tax bill, and the schedule for enactment, up in the air. In a series of mind-boggling machinations, the President’s original $724 billion proposal has been bounded by a $550 billion limit in the House of Representatives (after the House had approved the entire package) and a $350 billion limit in the Senate — and neither side of the aisle has yet specified details. Even the White House has deftly changed gears, now focusing on $550 billion rather than the original $724 billion package and backing off on the size of the centerpiece of the plan — the elimination of double taxation of corporate income. The “best bet” now seems to be a bill out of House-Senate conference that’s close to the Senate limit ($350 billion), and with passage around mid-year. This outcome would be close to the fiscal assumption already built into NAHB’s forecast, and such a bill would provide solid support to the economy in the second half — particularly if the tax cuts are made retroactive to the beginning of the year. Stable monetary policy is still the best bet, but the Fed is prepared to move ... The Federal Reserve opened the door to a near-term rate cut when the central bank essentially pleaded ignorance about the condition of the economy, and the balance of risks, at the conclusion of the FOMC meeting on March 18. The Fed has not moved since then, of course, and it’s highly unlikely that monetary policy will be changed before the next FOMC meeting in May. There’s some pressure on the Fed to cut rates at the May 6 meeting, if only to provide some “insurance” in an economic environment that certainly qualifies as shaky, and the Fed could go ahead with a small cut. But Chairman Greenspan has argued that, once the “geopolitical uncertainties” dissipate, underlying growth momentum should move the economy into a stronger range and obviate the need for more monetary stimulus. NAHB has been assuming that the Fed will hold steady until October, before starting to raise the federal funds rate, and we’re sticking with that assumption for now. Incidentally, President Bush has just announced his intention to reappoint Alan Greenspan to another four-year term as Fed Chairman when Greenspan’s current term expires in June 2004. This announcement gave an immediate boost to the stock market and certainly does not signal a “deal” between Bush and Greenspan, contrary to speculation by some pundits in the media. The housing sector is poised for an excellent 2003 after an exciting first quarter ...The first quarter was rather rocky for the housing market, reflecting major swings in weather conditions as well as inevitable impacts of the Iraq situation on the attitudes of both households and builders. But, thanks largely to yet another downshift in mortgage interest rates, the housing sector came through it all in good shape and made yet another solid contribution to GDP growth. Housing starts for the first quarter actually edged up from the very strong close to 2002, totaling 1.75 million units (seasonally adjusted annual rate). This quarterly performance, topped off by a robust 1.78 million in March, prompted a slight upward revision to NAHB’s housing forecasts for 2003. We’ve now got 2003 level with an excellent 2002, despite some anticipated upward pressure on the interest rate structure later this year. 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.
Want more economic information? Find it in our publications ...Find more in-depth information in our three economics publications, Home Builders Forecast, Housing Market Statistics and Housing Economics. All are availaible by subscription.
To learn more or to order any of these three NAHB economic publications, visit the Economics Publications Information section of the NAHB Web site or call 800-223-2665. State Construction Defect Legislation Progresses SteadilyOn an issue of top importance to the nation’s housing industry, bills requiring home owners to give builders an opportunity to repair or pay for alleged construction defects before filing a lawsuit continue to make steady progress in state legislatures around the country. The “notice and opportunity to repair” movement has scored several victories just within the last month; construction defect legislation has been either signed into law or passed by the state legislature in Idaho, Kansas, Indiana, Montana and Colorado. The bills contain similar provisions that require claimants to notify builders of their intent to file a suit and then give builders the option of responding. From there, however, they differ in scope. For example:
Similar legislation is still being considered in eight states: Alaska, Florida, Illinois, Missouri, Nevada, Oregon, South Carolina and Texas. For more information, e-mail Marie Zenner or call her at 800-368-5242 x8279. New Storm Water Practices Gain Popularity in WisconsinHome builders attending the recent National Green Building Conference in Baltimore reported good results from their pursuit of a new approach to storm water management that protects the natural environment and reduces development costs. Bob Brownell, the CEO of Bielinski Brothers Builders in Waukesha, WI, described what his company has been doing since the mid-1990s to implement low impact development in more than a dozen of its new residential communities. Bielinski’s goal is to reduce the amount of storm water runoff and to produce water quality benefits that exceed typical standards. It achieves this by focusing on Best Management Practices rather than conventional engineering strategies. These practices can include:
To minimize soil disturbance during construction, grading requirements are reduced where it is appropriate. Initially, “it’s not easy to get everyone to warm to the concept,” said Brownell, and this can apply especially to municipalities where conservation “ordinances don’t exist.” A model ordinance developed by the University of Wisconsin was used for the company’s Auburn Hills Neighborhood in Caledonia. That community’s land plan preserved and restored the natural values of 50% of the land. Development costs there were about $440,000 lower than if conventional practices had been followed. Brownell said that home buyers are enthusiastic about the company’s approach. A 7,000-8,000 square-foot lot in Highland Creek, a conventional development in the Village of Jackson, is selling in the low- to mid-$40,000 range, he said. By comparison the same sized lots are going for at least $10,000 more in the low-impact development of Prairie Meadows in West Bend. Brownell said his company is happy to share its experiences and expertise with other builders around the country who are considering low impact development. Bielinski's development team includes Applied Ecological Services, Welch Hanson & Associates and Vandewalle & Associates.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. Studies Show Advantages of Low Impact DevelopmentCase studies presented at the recent National Green Building Conference in Baltimore demonstrated many of the advantages of low impact development as an alternative to conventional site planning and land development. Built roughly a decade ago, Somerset Development used traditional storm water practices for one side of the community and low impact development for the other half. The alternative side saved $300,000 in storm production costs, gained six additional lots and reduced finished lot costs by about $4,000, Doug Nataluk, an environmental analyst and land use planner for the NAHB Research Center, reported to the conference. In another study, Kensington Estates — a conventional development with 103 single-family homes on 24 acres in Pierce County, WA — was redesigned using a new state storm water model to illustrate the full range of low impact development practices and technologies available to developers. The alternative redesign, Natuluk said, would have reduced construction costs by more than 20%, would have preserved 62% of the site as open space; would have maintained the same density of 103 lots; would have reduced the size of storm pond structures and eliminated catchments and piped storm conveyances; and would have achieved “zero” effective impervious surfaces. With an eye on reducing impervious surfaces and encouraging the natural filtration of water into the ground, Natuluk said that there are a number of concepts behind low impact development, including:
More information can be obtained from:
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. ‘Green’ Products Increasingly Common in U.S. HomesEfforts by the nation’s housing industry to reduce the environmental impacts and energy consumption of new homes continue to gain ground, according to information released by NAHB last week in celebration of Earth Day. Increasingly common in today’s homes are:
Materials going into today’s homes are also changing considerably, according to NAHB. The use of plywood, for example, is on a major downward trend. In 1978, plywood made up 89% of roofing products for sheathing, according to data compiled by NAHB and the NAHB Research Center. That dropped to 27% by 1999 as plywood was increasingly replaced by Oriented Strand Board, which uses crushed wood debris compacted and glued together to create a stronger, more durable building material. Among building practices undergoing change, one of the most promising is the “frost-protected shallow foundation.” This construction technique enables builders in cold climates to start foundations 12 inches below grade instead of at the frost line, which typically can be several feet deep. The foundations save energy, excavation and construction time, labor, materials and money, and they disturb less soil than conventional foundations. Frank Lloyd Wright used frost-protected insulated footings as early as the 1930s in the Chicago area. In recent years, several thousand homes have been built using this practice.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. New Homes Save on EnergyThere are a number of features that prospective home buyers or remodelers can look for if they are interested in saving energy, according to information released by NAHB last week in celebration of Earth Day. While today’s new homes are generally much more efficient than homes built even a generation ago, following are some of the things that consumers may want to consider if energy conservation is a special priority:
An extensive amount of information about energy efficiency in housing is available from the NAHB Research Center.
BuilderBooks.com offers a variety of green building publications online. To view or purchase these publications, click here. Awards Recognize Quality in Home BuildingAs part of its efforts to advocate quality in residential construction, The NAHB Research Center has announced its call for entries to the 2004 National Housing Quality (NHQ) Award, which is the housing industry’s highest recognition for quality achievement. The Research Center and the Reed Residential Group, publisher of Professional Remodeler and Professional Builder magazines, are sponsoring the awards program, which began in 1993. The National Housing Quality Program disseminates information on quality management principles and practices in the home building and remodeling industries and encourages their adoption. Modeled after the Malcolm Baldrige National Quality Award, the NHQ recognizes customer-focused quality in construction, business management, sales, design and warranty service. Judging criteria focus on a company’s dedication to leadership, strategic planning, customer satisfaction, performance management, human resources, construction quality, supplier partnerships and business results. Over the past decade, the NHQ Criteria for Performance Excellence have been used by hundreds of home builders across the country to assess and improve their performance on critical factors affecting the success of their business. Participants gain insights from the preparation of their applications and receive feedback from a panel of judges who are experts in the industry. Entries must be received by the Research Center by Aug. 1. Winners of the award are featured in Reed Residential Group magazine articles. For more information, or to request an application package, e-mail Rita Knab or call her at 800-638-8556 x6225. In Alabama, May is Remodeling Consumer Protection MonthMay is National Remodeling Month, and as it has for the past four years, the Home Builders Association of Alabama plans to celebrate by telling remodeling customers what to look for in a professional contractor. Enlisting the aid of the state’s Attorney General, the Alabama Home Builders Licensure Board and the Better Business Bureau, the association will be celebrating Remodeling Consumer Protection Month. “Our Remodelors™ Council was tired of the bad rap that remodelers get,” said Kory Boling, the association’s member services director. “So many times the only news we would hear about remodeling were those stories of some old lady who just got ripped off.” Every year, the consumer affairs section of the Attorney General’s office received hundreds of home repair fraud complaints, with consumers claiming losses that can exceed several thousands of dollars. Each May, he now visits local builders associations and holds press conferences to discuss what his office is doing to answer those complaints and protect the state’s consumers. Alabama requires all of its contractors to be licensed. Last year, remodeling without a license was upgraded to a class A misdemeanor punishable by up to one year in jail and a fine of as much as $2,000. For local councils in other parts of the country that are interested in starting up their own consumer protection programs, Boling says that it is best to start in the consumer affairs department of the Attorney General’s office. That’s where calls from irate fraud victims are fielded.
BuilderBooks.com offers a variety of publications to help small builders and remodelers online. To view or purchase these publications, click here. Apartment Demand SlackensSlack demand will keep multifamily vacancy rates high and the absorption rates of new units slow at least until next year, according to industry economists appearing at NAHB’s Construction Forecast Conference last week. Both Jack Goodman, president of Hartrey Advisors, and Ron Witten, president of Witten Advisors, agreed that current softness in the marketplace is due not so much to overbuilding as to disappointing job growth and historically low mortgage interest rates that are luring higher-income renters into homeownership. Even some of the strongest sub-markets for apartments in recent years have been suffering, they said. Goodman also pointed out that many renters who formerly lived in professionally managed buildings with five units or more have been moving into smaller buildings or renting single-family homes. However, the industry has probably seen the worst of the exodus to the for-sale market, he added, especially if interest rates start to rise as the economy picks up speed. Retiring World War II baby boomers and echo baby boomers establishing new households bode well for the industry, especially condominiums, Goodman said, starting in 2005 and lasting through 2010. Condominium prices have been appreciating as rapidly as single-family houses, he said, and condo development will surge to meet rising demand. Los Angeles, Norfolk, Philadelphia, Riverside, CA, and San Diego all offer “A-market development opportunities — with occupancy predicted to be 1% above equilibrium nine months from now,” said Witten. Goodman forecasted that multifamily starts will decline to about 260,000 annually between this year and next, but eventually return to a very sustainable level of 300,000 to 350,000 later in the decade. New Study Provides Insights on Senior Home BuyersHome builders who are targeting their business to older Americans will gain some valuable insights into this segment of the housing market from the findings of a new national study conducted by NAHB and Countrywide Home Loans. Looking at initial results of the study, Jack L. Haynes, executive vice president of the National Builder Division at Countrywide Home Loans, based in Plano, TX, said that it is “striking that many home buyers aged 50 or older are not simply cashing out the equity they built up in the home they raised their children in and downsizing into a less expensive house or apartment.” Older home buyers are willing to pay extra for high-tech options and upgrades in their homes, according to the “2003 NAHB Builders Survey: An Industry Update of Building Trends of Age-Restricted, Age-Targeted and Independent Living Communities.” About 25% are paying as much for their new homes as their previous homes; and another 25% are spending more. More than half of these buyers are financing their golden-year housing purchases with cash or with high downpayments of 30% or more, the study finds. “Baby boomers continue to rewrite the rules of consumer behavior at every stage of life, and home builders and mortgage lenders need to be prepared to meet their changing demands,” Haynes said. The study examines the amenities, features and services builders are planning and incorporating into communities for the elderly; where seniors are relocating; how much they are spending; how they are financing their purchases; their motivation for moving and regional trends. Complete study results are being released during the 2003 Seniors Housing Symposium: Building for Boomers and Beyond this week at the Renaissance Esmeralda Resort & Spa in Indian Wells, CA. AARP is releasing a related study on elderly consumers during the symposium. For more information, e-mail Jeff Jenkins at NAHB or call him at 800-368-5242 x8292.
BuilderBooks.com offers a variety of seniors housing publications online. To view or purchase these publications, click here. Rein in Your Cycle Time and Boost Profits, Control CostsLong cycle times are liabilities. They delay closings and stymie cash flow. They extend payments for labor, lot mortgages and other costs. And, as delivery dates stretch like rubber bands, customers wonder if they’ll ever move in. Even if your projects come in on schedule, your cycle time probably could use a tune up. “Healthy” cycle times range from 90 to 115 days, according to the NAHB Research Center. Systemization is the key to getting yours within that range — and even lower. Here are some pointers from builders and industry consultants on reining in cycle time:
How do you know when you’ve achieved the “right” cycle time? There’s no magic number, because so much depends on your product and resources. However, when you complete homes sooner, your customers are happier, profits go up and costs stay at reasonable levels, you’ll know you’ve got a good grip on cycle time. After you've trimmed your cycle time, don't rest on your laurels. Keep at it constantly. “There is never a finish line for cycle time,” says Shinn. “You can always find ways of doing it better and faster.”
BuilderBooks.com offers several books to help you systematize your business and reduce cycle time. All are available online:
NAHB's Business Management Department offers a variety of resources to help you run your business better and more profitably. For articles and information about human resources, financial management, sales, production, technology, customer service and other business-related topics that are available on the NAHB members-only Web site, click here. Sales and Marketing Respond to Hard TimesJan Mitchell As defined by Swallow, in addition to recessions, hard times can include energy shortages or crises in the financial markets. The bottom line, he says, is that the typical builder should be prepared for a 15%-30% drop in volume over five to nine quarters, which “can eliminate all of the net margin in a project.” Take a Look at Staffing Swallow recommends making adjustments to staffing: Convert a two-salesperson office into an office with one salesperson and a hostess. Eliminate salaries and draws and shift the pay schedule to one-third on earnest deposit, one-third on cabinet installation or hard loan approval and one-third on closing. Get sales managers out of their offices and into the field at least 60% of the time. Taking a somewhat different view, Larry Kush, president of Montevina Homes in Scottsdale, AZ, believes that a two-person sales office creates healthy competition and that hostesses don’t pay off in any environment. But he does agree that builders need to take a hard look at staffing. “Don’t do it in marketing or sales,” he advises. Target office staff or assistant superintendents instead. Cultivate the Realtor® Community This is also the time when salespeople more than ever need to be obtaining cards from their prospects and following up on their visits, and model homes need to look their best. Rather than jumping to lower prices as a way to increase traffic, Costanzo recommends meeting margins by adding value. Another strategy is to redesign an existing model by cutting costs and renaming it. If you reduce prices on an identical model, you’ll be in trouble with all of your contracted buyers, not to mention scooping your appraisals. Above all, review your product and your market and make sure your offerings are competitively priced. The Customer Is King Swallow says that difficult periods require switching from a volume-based strategy to one oriented to the customer. No one agrees more than Joe Turner, a customer service expert and consultant out of Northern California. One approach is adopting a dual walkthrough system. When deficiencies are corrected before the buyer moves in, the builder will have fewer callbacks in the first year and realize substantial cost savings. Another cost-saving strategy is to tighten the terms of the warranty policy so that cosmetic items, when corrected before the buyer moves in, are not subject to warranty service requests after the close of escrow. This alone can reduce first-year requests by as much as 80%. Costanzo suggests going straight to the buyers for their help. “This is a time to do the market research you didn’t have time to do before. Find out what your customers are looking for. Within a reasonable price range, those extra touches can make the difference.”
Jan Mitchell is senior editor of Sales & Marketing Ideas magazine and a writer for the housing industry. She is the author of “Sales & Marketing Checklists for Profit-Driven Builders,” published by BuilderBooks.com, and a member of the National Association of Real Estate Editors. For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales and Marketing Ideas magazine. Call 800-368-5242 x8192 or click here to subscribe or order a copy. Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing. BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here.
Million Dollar Circle Awards Deadline NearsThe June 1 deadline for ordering Million Dollar Circle Awards is coming up fast. Sponsored by NAHB’s National Sales and Marketing Council, the awards provide recognition and encouragement for hard-working professionals who are on the front lines turning prospects into home buyers and satisfied customers. For nearly 40 years, the awards have been recognizing leading sales professionals and sales managers for producing millions of dollars of home sales annually. Information is available on the link above, or by e-mail, or call 800-368-5242 x8192.
BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here. OSHA on the Lookout for Scaffolding ViolationsIn 2002, OSHA cited 7,953 builders for scaffolding violations, the leading reason for citations that year. The citations represented about a 10% increase over the year before. OSHA estimates that 9,750 injuries and at least 79 deaths a year are caused by unsafe scaffolds. The most common scaffold violations in residential construction are associated with the following scaffold types:
Contractors and their subs should be aware of the requirements for the types of scaffolds they use on their job site. The top five scaffold violations cited by OSHA in 2002 were:
For a better understanding of how to work safely and avoid getting one of these costly citations, read the “Toolbox Talk: Don’t Overlook Scaffold Safety” in the April 14 issue of Nation's Building News Online by clicking here. For more information, e-mail George Middleton, program manager, NAHB Labor, Safety & Health Services, or call him at 800-368-5242 x8590.
The 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. Think Tank Advocates Education on Growth IssuesSmart growth isn’t going to happen until people understand how and why it is in their best interest, according to an urban development think tank based in San Francisco. “In most cities, virtually every significant proposal for infill development meets with opposition,” writes Gabriel Metcalf, deputy director of the San Francisco Planning and Urban Research Association (SPUR), in an article for the Urban Land Institute (ULI). “Things that do make new development smarter from an environmental standpoint — like reducing parking or increasing density — often bring community opposition at such a fevered pitch that even the most supportive elected officials run for cover.” SPUR seeks to bridge the communications gap between the development community and no-growth activists. In a book explaining how to educate the public about the benefits of smart growth, the group boils the process down to four essential steps:
BuilderBooks.com offers a variety of land development publications online, including enviromental and green building publications. To view or purchase these publications, click here. Opportunity for Developers at California Air Force BaseLocated 45 miles northeast of Sacramento, Beale Air Force Base is holding an Abbreviated Industry Forum on April 30 beginning at 7:30 a.m. to follow up on plans for its housing privatization project. The scope of the project has been revised since it was presented last June. A private developer is being sought for the project, which involves 1,344 family housing units on base. The federal government will convey the housing units and other associated improvements, including infrastructure and utilities, and will lease the underlying land for 50 years to the developer. The successful developer will own and operate the rental housing development for 50 years, as well as finance, plan, design and construct improvements to the development. The developer will contribute cash equity, maintain private sector debt and be responsible for managing and operating the project. If financial assistance is needed, the government may provide a direct loan and/or a limited loan guarantee of a permanent loan from an approved commercial lender. The half-day forum will include presentations on the final technical elements of the housing project. Those attending will have the option of taking a guided tour to inspect the housing on base. The forum is being conducted by PSC Military Housing Corporation. An NAHB Military Housing Privatization Task Force is working to overcome barriers that have prevented NAHB members from successfully bidding on military housing projects. NAHB members can obtain further information about the task force. Indiana Students Introduced to Construction CareersMaterials from the Home Builders Institute designed to stimulate interest in residential construction industry careers have been integrated into an innovative program in the public schools in Terre Haute, IN. More than 2,000 sixth to tenth grade students from 12 schools are participating in the two-week curriculum. Developed by Douglas Dillion, a teacher in the Terre Haute school district, the “Tech Town U.S.A.” curriculum combines career exploration, hand-on activities, integrated instruction of core subjects and problem solving. Students design a house, build a scale model, develop a marketing spec sheet and calculate its price and taxes. Working with the Home Builders Association of Greater Terre Haute, HBI was able to include educational materials from its “Build a Home, Build a Career” kit into the program. “We are working with our teachers and HBI to expose students to the world of careers in our industry, but even more important, we are working to enhance their overall academic experience,” said Teresa Buell, the association's executive officer. “We also want to let our members know about programs such as Tech Town U.S.A.” The best house designs from each of the 12 schools were on display last month at the association’s home show. A contest testing students’ knowledge of the construction industry was also held during the show. In February, the Tech Town booth appeared at Indiana's Midwest Builders Convention, which is hosted by the Indiana Builders Association. NAHB Members Prepared to Meet the PressIn the mid-1980s, when housing economists despaired of ever again seeing mortgage rates below 10% and rates on 30-year loans were averaging more than 12%, leaders at NAHB and throughout the housing industry embarked upon a national campaign to convince the federal government to adopt policies that would lead to lower interest rates. As an NAHB Senior Officer, David C. Smith, who is today a home builder from McDowell, VA, was recruited to participate in an ambitious news media campaign to reduce interest rates. His itinerary included a press conference in Houston, a live radio interview in New Orleans and media stops in several other American cities. Smith was prepared to deliver his message effectively because he had completed NAHB’s Spokesperson Training. The Spokesperson Training program has benefited more than 15,000 NAHB leaders and is available to any member of the association who wants to learn the ins and outs of using the news media to carry a message to the public. The program provides professional training that helps NAHB members effectively develop positive industry messages and employ strategies to conveny those messages in media interviews, testimony and other public speaking engagements. Communication professionals who have more than 30 years of experience successfully training corporate executives teach Spokesperson Training. For more information, e-mail Rhonda Brown or Kimberly Wilbur or call them at 800-368-5242 x8061 or x8132.
Save $500 on Williams Scotsman Mobile Offices With 90 locations in North America and more than 50 years experience, Williams Scotsman has a money-saving plan specifically designed for NAHB members — with up to one month's free rent. When you sign up, your seventh month is FREE — with a maximum value of $500. Williams Scotsman offers a full line of temporary-space products and accessories, including sales offices and centers, construction trailers, mobile offices, storage products and floor plans and specifications. For more information, call 800-782-1500 and identify yourself as an NAHB member or go to the Williams Scotsman Web site for NAHB members. 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. Vent-Free Gas Products Provide Home Heating Advantages
In the vast majority of homes in the U.S., vent-free gas heating products don’t generate enough water vapor to raise indoor humidity levels and foster mold growth, according to a recent study commissioned by the Vent-Free Gas Products Alliance of the Gas Appliance Manufacturers Association. Located in Arlington, VA, the Vent-Free Gas Products Alliance is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. Since 1980, vent-free gas space heaters, fireplaces, logs, inserts and stoves have been used for supplemental heating in more than 10 million American homes, the alliance says. The appliances are 99% energy efficient, enabling home owners to reduce heating costs by turning down the thermostat. Most vent-free gas products do not use electricity, so they are a reliable source of heat even during severe electric power outages. Vent-free products are as much as 60% less expensive to install than traditional masonry fireplaces, the alliance adds. The following information is available online from the alliance:
Further information is also available by e-mailing Mary Carson. Workshop Set for Housing and Business Opportunities in MexicoThe organizers of Partnership Opportunities in Mexico, a joint U.S.-Mexico initiative to stimulate business opportunities in North America, announced that they will be conducting an entrepreneurial workshop to discuss expanding business opportunities, including housing, in Mexico. The workshop will emphasize growth opportunities, economic development and competitiveness. Participants will receive hands-on information about doing business in Mexico, enterprise financing and investing, including government activities to support private sector investment. The workshop is open to housing and housing finance-related businesses, as well as businesses involved in agribusiness, infrastructure development, information technology, telecommunications, environmental technology, food processing and automobile manufacturing. Participants will receive:
U.S. Secretary of Commerce Donald Evans and Mexican Secretary of the Economy Fernando Canales will address the conference. The Partnership for Prosperity Entrepreneurial Workshop will be held June 9-10 at the St. Francis Hotel in San Francisco. The cost is $150 per person, and includes two days of breakfast and luncheon programs and an evening reception at San Francisco’s City Hall. The hotel room rate is $179, plus tax. Registration is available through May 15. Go to www.partnershipworks2003.com to register online. For more information, call 703-684-0025 or e-mail peede@eventstrategiesinc.com. Presidents Fox and Bush convened the Partnership for Prosperity initiative to stimulate economic growth in North America. Calendar of Events
|