Nation's Building News Online: June 2, 2003Print All Articles Text Version |
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Third Biggest Tax Cut in History Paves the Way for Economic GrowthAt a special ceremony in the East Room of the White House attended by NAHB President Kent Conine and other business leaders, President Bush on May 28 signed into law a 10-year, $350 billion tax cut package. The third-largest tax cut in the nation’s history is designed to spur economic growth and is good for all segments of the housing industry. The legislation lowers marginal tax rates, allows bigger write-offs for small businesses and reduces the dividends and capital gains tax rates. A provision that reduces tax rates on dividend income calculated at the shareholder level provides a new incentive for corporations to purchase Low Income Housing Tax Credits. From the outset, the nation’s home builders worked closely with the Administration and congressional leaders on both sides of the aisle to develop an economic stimulus plan that is good for all segments of the housing industry and the entire economy. During deliberations over the past few months, NAHB was the only housing organization that had a seat at the table with these key policymakers. Following are highlights of the tax bill: Income Taxes
Depreciation and Expensing
Dividends and Capital Gains
State Aid
For more information, e-mail Marty Morris or call him at 800-368-5242 x8470. Building News Coast To CoastAs Housing Buoys Economy, It's No Surprise to Fed's ChairmanFederal Reserve Chairman Alan Greenspan has been studying housing and residential finance since the 1960s, even creating related databases to make market predictions; and he discovered long ago the effects cash-out refinancings could have on consumer spending and the economy as a whole. Record-low mortgage rates have sparked a refinancing frenzy; and if home owners had not put their interest savings or their equity back into the economy, the most recent downturn likely would have been much worse. In addition to low rates, the ability of lenders to sell mortgages on the secondary market as well as the emergence of underwriting and credit-scoring software helped to make mortgages less costly and easier to obtain. Despite the risks of a bursting housing bubble, surging debt loads and eventual declines in the housing sector, Greenspan believes a growing pool of prospective home owners makes a market collapse unlikely. Growth Plans Often IgnoredAccording to a recent study by the Solimar Research Group and the Reason Foundation, a critical housing shortage will plague Ventura County, CA, by 2020, mainly because cities are approving fewer homes than allowed by their long-range development plans. “We are learning that you can't freeze-dry a city and think that a general plan written in the 1990s provides an accurate picture of what the city will look like in 2020," remarks Solimar President Bill Fulton. A similar study from December 2001 revealed that housing projects in the county usually have just 55%-80% of the homes allowed, indicating a preference for fewer dwellings per acre over higher-densities. Researchers think local governments should formulate master plans with all the details — including homes, schools and commercial space — figured out well before the growth occurs. Fulton and Local Agency Formation Commission executive officer Everett Millais have seen more projects with a mix of housing types; a growing number of industrial and retail areas converted for residential purposes; and the use of agricultural land for new homes. City to Promote NeighborhoodsA new marketing campaign from the Central Philadelphia Development Corp. aims to attract home buyers to half a dozen middle-income neighborhoods in the city. The communities — Cedar Park, Fox Chase, Mount Airy, Overbrook Farms, Roxborough and Southwest Center — were targeted for the project due to their stable property values, diverse housing and close proximity to public transit and other amenities. More areas could be added to the campaign in the future, according to Central Philadelphia Development Corp. Executive Director Paul Levy, as 'spillover' from the initial locales creates additional healthy and appreciating neighborhoods. To pump up the six markets that are the initial focus, ads will be posted in newspapers and on public transportation; and corporate relocation specialists will be provided with brochures to pass out to prospective Philadelphia home buyers. 'Look at what the suburbs have been doing for years,' says Levy. 'Advertising is a part of persuading people to make their most significant purchase.' Fulton Eases Home BuyingIn what has emerged as a nationwide trend, counties across the United States are promoting homeownership — instead of rental units — as the key to the affordable housing crisis. In Georgia's Fulton County, for example, local officials have abandoned a developer subsidy program for low-income apartment construction in favor of a program that helps working-class and first-time buyers afford to purchase a home. Under its new policy, the county acquires land for a possible residential project. After recruiting a developer to build on the parcel, the country lends $5,000 toward eligible buyers' downpayments and provides $2,500 grants to cover the settlement costs. In turn, a fifth of the homes can cost no more than $130,000 and another 20% must be priced at $170,000 or lower. The initiative also aids qualified recipients — who must meet income requirements, cannot already be receiving public assistance and have steady incomes — with repair work. Energy Efficiency Could Lead to Lower RatesHouston-based Advantage Capital Funding has become the first lender to enroll in the new Freedom Seal program, which rewards buyers of energy-efficient homes by lowering their interest rate. The certification program — which requires a property to be at least 30% more efficient than a comparable dwelling built to1993 energy codes — aims to shift the focus of home owners and lenders away from the cost of a residence per square foot and more toward the cost of ownership. Not only will Freedom Seal certification slash utility costs for owners, insurance coverage on such properties may be less expensive as a result of the specific safety and environmental standards they must meet. Participating lenders are encouraged — but not required — to slash interest rates by 0.5%; and program administrators say that builders' in-house mortgage companies could be the most likely to extend rate discounts, most likely as part of an incentive package. The Lure of a LoftWhile the trend first took off in New York, developers in virtually every major U.S. city — including Atlanta, Chicago, the District of Columbia and Seattle — are now cashing in on the loft craze. The real estate is recognized for its high ceilings, exposed pipes and ductwork, spacious windows, open and/or multi-level floor plans, steel columns and concrete floors. Lofts are deemed authentic only if they were used as a factory, warehouse or other industrial purpose prior to their conversion for residential use; but even the copycats — condominium developments built brand new but including many of the architectural touches common in lofts — are wildly popular with today's buyers. "Lofts offer the buyer something different than the conventional garden-apartment-style unit or the single-family home," explains Ken Bleakley, president of an Atlanta-based real estate consulting firm. There are no less than 8,000 loft or condo units scheduled to hit the Atlanta market alone by the close of this year. State Paves Way for Beverly Hills ProjectTo finance roads, sidewalks and utilities for new construction, developers often seek to have their projects designated as "community development districts." Under this structure, a developer usually will hire an underwriter to issue tax-exempt bonds to bankroll the new infrastructure; the bond debt, in turn, is paid off through a property assessment that is levied against new residents only instead of against all home owners. More than 200 projects in Florida have been named community development districts, the latest of which is the large-scale Tuscany subdivision in Beverly Hills. Gov. Jeb Bush and his Cabinet recently granted their approval for the Citrus County development, which ultimately will encompass as many as 4,000 new homes. As with other community development districts, Tuscany initially will be overseen by a governing board, with resident representatives gradually assuming control as more lots are sold. Cambridge, Massachusetts, Tops Million-Dollar MarketThe nation's hottest market in 2000 for luxury single-family housing was Cambridge, MA, according to a new Census Bureau report. The “Home Values: 2000” analysis found that roughly one in eight Cambridge residences was worth at least $1 million dollars — the highest proportion of any of the country's large cities with 100,000 or more people. The New England city was trailed by three California destinations — San Francisco, Pasadena and Los Angeles — where luxury homes accounted for 7%, 4.7% and 3.8% of the housing stock, respectively. The report additionally revealed that the median value of an American home rocketed 18% from the 1990 level of $101,100 to $119,600 a decade later. The highest median value for a single-family home in 2000 was found in Sunnyvale, CA, at $459,200, with Flint, MI, at the other end of the spectrum with a median of $49,700. Among states, Hawaii's median home price of $272,700 was the highest, while Oklahoma's median of $70,700 was the lowest. How to Wi-Fi Your HomeHome owners could spend as much as $250 plus equipment costs to have a professional install a wireless fidelity (Wi-Fi) network in their homes, or they can do it themselves. First, they will need to purchase Windows XP, Apple's OS X or another new operating system and a wireless transmitter. Home owners with wired homes will require only a wireless access point, while those building the network from the ground up will need a router. They should choose the most up-to-date and speedy wireless standard, 802.11g, because it can network more computers, printers and digital equipment than the others. Meanwhile, those with older laptops and desktop computers will need to get Wi-Fi PC cards and adapters for each unit. To set up the network, they should choose a central location six feet off the ground — keeping in mind that the signal is good within 150 feet or so of the hub — and use an Ethernet cable to link to their high-speed modem if it is positioned elsewhere. Lastly, home owners will need to disengage all firewalls to connect the devices to the network simultaneously; create log-on names and passwords; name each device; and activate the necessary security software. Quantifying Value of TechnologyThere is still room to improve on productivity through technology. Available information resources have already made improvements in productivity, offering people the ability to make important decisions or make insights into their businesses. Smart clients like personal digital assistants can increase the productivity of the front-line workers if they connect to the back office. Digital meetings are about to become possible through the convergence of networks and audio and video conferencing, and these will have digital meeting records for those who are not able to attend. Technologies, used properly, can double information work productivity this decade, according to this article. Where Wireless WorksWireless technology appears to have a greater impact on the bottom line when companies supply workers outside the executive level with mobile tools. For example, Seattle-based Starbucks has provided mobile tools to some 600 district managers (each one oversees eight to 10 stores) so that they can have greater access to data such as sales figures or labor reports. By enabling Starbucks district managers to stay connected with T-Mobile's wireless Wi-Fi network capability and virtual private networking for their laptop computers, they are able to spend less time at the regional office and more time in stores. Starbucks district managers are now hailing mobile tools as a tremendous benefit for their jobs, and Ken Hyers, senior analyst in the wireless group for In-Stat/MDR, says wireless technology works well in business environments that demand quick reactions and high transaction rates. Although more companies are embracing mobile tools in a manner similar to Starbucks, until recently networks were not fast enough and they did not offer the necessary coverage capacity. A 2002 report from The Yankee Groups reveals that 28% of all mobile workers at large corporations are now field service technicians and engineers. As a result of the state of the U.S. economy, companies are creating small pilot programs before committing to full-scale mobile service project. Some observers say management is more like likely to invest in mobile solutions if they are already using mobile tools. Ruling Finds Canadian Lumber Duties UnwarrantedIn an interim ruling on May 27, the World Trade Organization (WTO) concluded that countervailing duties imposed by the U.S. Commerce Department on imports of Canadian softwood lumber were based on an invalid calculation that Canadian producers were subsidized. Under international agreements ratified by the U.S. Congress in 1994, the Commerce Department cannot impose a countervailing duty unless it finds that foreign producers are receiving government subsidies, and it defines the methods that may be used to determine those subsidies. The WTO found that the Commerce Department didn't follow the rules. “This ruling affirms what we have been saying all along,” said Bobby Rayburn, first vice president of NAHB. “The Commerce Department’s finding that Canadian softwood lumber is subsidized has no merit.” “Lumber trade barriers are bad economic policy and they needlessly penalize home builders, home buyers and other U.S. consumers of softwood lumber,” he added. “It’s time to overturn the tariffs and let free trade prevail.” There are currently duties of more than 27% on Canadian lumber shipments into the U.S. This includes roughly 19% countervailing and 8% anti-dumping duties. Anti-dumping actions arise from allegations that foreign producers sell their products in the U.S. at a loss. The WTO is expected to issue a final ruling on the subsidy dispute next month, around the same time as a North American Free Trade Agreement (NAFTA) panel is expected to weigh in on the issue. Bipartisan resolutions now pending in the House and Senate call for “open trade between the United States and Canada on softwood lumber free of trade restraints that harm consumers.” Home building and remodeling consume about two-thirds of domestic lumber; lumber is the primary building material used in home building. Lumber imports from Canada are essential because there is not enough U.S. lumber to meet the needs of the home building industry. The current duties could potentially add more than $1,000 to the cost of building a home. Partly because of the widespread expectation that the duties will be overturned as a result of the WTO and NAFTA appeals, and that the duties collected so far will be refunded, the price of lumber has not increased to fully reflect the duties. Housing SnapshotInterest rates on fixed-rate mortgages hit another record low last week, and there were indications that consumers are increasing their spending. The Commerce Department announced that GDP growth in the first quarter was 1.9%, up from its original 1.6% estimate, and economists continue to hope for more rigorous growth in the second half of this year, with some signs that the manufacturing sector may be coming out of its hibernation. Announcements of healthy gains in new and existing home sales in April got the stock market off to an encouraging start on the Tuesday following the Memorial Day holiday, and stocks gained ground throughout the week. Mortgage Interest Rates30 Year Fixed Rate: 5.31\% Housing Starts: Apr. 2003Total: 1.63 million\% New Home Sales: Apr. 2003 *1.028 million Existing Home Sales: Apr. 2003 *5.84 million * Seasonally Adjusted Annual Rate June Is National Homeownership MonthAlmost two decades ago, human rights activist Yelena Bonner, wife of renowned Soviet dissident Andrei Sakharov, wrote an essay about housing’s place in American life that resounds to this day. After observing our way of life for only a short time, she wrote, “What Americans want is a house. No matter their place on the social ladder, they want a house of their own.” “A house is a symbol of independence, both spiritual and physical,” she continued. “The American feeling about his house expresses the main traits of Americans — the desire for independence and privacy. But that attitude gives rise to a third trait: ‘My house is my pride and joy.’ And from that comes: ‘My city, my state and my country is my pride and joy’.” As Bonner so eloquently noted, housing is one of the distinguishing characteristics of American life. Whether it’s a downtown apartment or a detached home in the suburbs, the home is an important aspect of cultural, social and economic well-being for most families. In particular, homeownership offers significant benefits to families and communities. It is associated with higher incomes and greater social cohesion, and home equity is a principal source of both wealth and economic growth. It accounts for approximately 28% of household net worth in the United States, and an even higher percentage of the net worth of lower income households. Home equity also provides an important source of capital for other activities, such as home improvements and financing higher education and new business startups. Unfortunately, homeownership and its advantages are not enjoyed equally by all Americans. The nation’s overall homeownership rate stands at 68%, but homeownership rates for African-American and Hispanic households remain below 50% even though minority homeownership is on the rise. This disparity is significant because it further widens the wealth gap between these groups and whites. With the price of housing serving as a major barrier to homeownership, many minority families are unable to accrue the home equity that provides financial security for millions of American families. In addition to benefits to individuals, new residential construction also brings strong economic benefits to the nation’s communities. On average, construction of 100 single-family homes generates $11.6 million in new income to local businesses and workers in the first year of construction, and $2.8 million every year thereafter. It also creates 250 jobs in the local community during the first year of construction, and 65 jobs every year thereafter. In terms of their contribution to public revenue, these 100 new homes bring $1.4 million in additional local taxes and fees in the first year of construction, and $498,000 every year thereafter, for a total of $5.9 million over 10 years. As for individuals, the rewards to communities are significant and ongoing. June is National Homeownership Month, a time to celebrate the many benefits of homeownership and redouble our efforts to ensure that homeownership is an attainable goal for all Americans. Yelena Bonner closed her essay with simple, poignant words that transcend political boundaries and are echoed today by millions of American families. “I want a house,” she said. As home builders, it is up to us to help ensure that every American who wants to own a home has that opportunity. All Systems Are ‘Go’ for New Home SalesA report last week by the U.S. Commerce Department showing a 1.7% rise in new single-family home sales in April is the latest indication that the housing industry continues to fire on all cylinders while other major sectors of the economy remain weak. Sales for the month proceeded at a seasonally adjusted annual rate of 1.03 million. This was the third month this year in which sales exceeded the one million-unit mark. NAHB President Kent Conine said that the April sales increase was another sign that “housing continues to be a pillar of strength for the nation’s economy.” It also provides “solid evidence of the confidence that buyers continue to have in homes as investments,” he said. With mortgage interest rates declining even further and consumer confidence improving since April, Conine said that conditions looked favorable for strong sales activity through the balance of the spring home buying season. New-home sales rose 13.4% in the Midwest, 0.6% in the South and 4.3% in the West. Sales fell nearly 18% in the weather-battered Northeast, where housing activity has been fluctuating wildly for several months. The median sales price of new houses sold in April was $185,100, which was down slightly from the previous month, the Commerce Department reported. “Sales of both new and existing homes were slightly above their first-quarter averages in April, and the fundamentals of this housing market continue to exhibit remarkable strength looking forward,” noted NAHB Chief Economist David Seiders. “With inventories of unsold new homes remaining at quite a healthy level, with impressive house-price performance on a year-over-year basis and with our latest surveys indicating significant optimism among home buyers, we’re clearly headed for a great second quarter,” Seiders said. “When you add in the terrific interest rate picture, all systems are ‘go’ for home sales — we are definitely on track to equal or surpass the record homes sales of 2002,” he said. Home Resales on a Roll in AprilAlong with indications of rising consumer confidence, rosy reports of housing sales activity in April helped push up the Dow by 2.1% and Nasdaq by 3.1% last Tuesday. Sales of existing single-family homes rose 5.6% in April to a seasonally adjusted annual rate of 5.84 million units, according to the National Association of Realtors®. This was 3.2% above the 5.66-million unit pace a year earlier. The April level of existing house sales was the fourth highest ever. David Lereah, the association’s chief economist, said that pace would be “difficult to sustain but demonstrates that the housing sector will be close to a record this year.” The national median existing-home price was $163,400 in April, up 6.8% from a year earlier. Sales were up 9.6% in the West, 4.8% in the Northeast, 4.1% in the South and 4.1% in the Midwest. Spotlight on: TampaLocal HBA: By Eric Isenbergh, president of the Tampa Bay Builders Association Vital Stats:
Outlook for 2003: The outlook for this year is good — we expect the currently strong trend in housing activity to continue. There may be some slight adjustments to the market later in the year, but ultimately the numbers will be very strong continuing into 2004. The latest declines in mortgage interest rates have reinforced our expectations. Biggest source of concern for builders: The availability of lots is a big issue. That’s due to a strong market as well as to the processing time it takes to bring lots on line, and also to the availability of land per se. It’s not so much that there isn’t enough land as that it takes a while for buildable lots to go on the market. Much of Pinellas County is built-out, except for some infill locations. We’ve also had an urban service boundary (urban growth boundary) for the last eight or nine years in Hillsborough County. That’s a magic line that limits the supply of land. The tri-county area offers something for everyone in terms of waterfront and canal-front homes, high-end and affordable, and a real market is developing for infill homes. However, it can be very difficult to win zoning approvals for these due to local resistance to change inside existing neighborhoods Market trends: Traditional suburban development is running very strong, but we’re also seeing an emerging market for neo-traditional development — a number of these communities have been built in recent years. Traditional builders are venturing into this market; it’s not limited to just the “cutting edge” builders. Builders are offering their own versions of the New Urbanist development by building a suburban community with the ambience of neo-traditional design. We’re also seeing a strong movement toward downtown housing, and our builders association is launching a downtown housing program to work with communities toward surmounting the typical barriers to that kind of development. All this is part of the Smart Growth movement, and it’s also about tapping into a shift we’ve seen in buyer preferences in a certain part of the market. We’re finding that some municipalities with predominantly office space in their downtowns are expanding their vision to include housing, as well — and not just high-end product, but the full range of housing meant to accommodate people who need to live near their downtown workplaces. Remodeling is very strong, especially in areas like Pinellas County where there’s little room for new subdivisions. There, a large portion of the future residential activity will be in the form of infill and remodeling. Also, in Hillsborough County, entire neighborhoods in the downtown section have been totally remodeled into very high-end units. Communities that were built 20 years ago are being remodeled to accommodate the latest technologies and conveniences. In these places, long-time residents prefer to update and upgrade their current homes rather than move out of the neighborhood. Resolutions in Congress Call for Free Trade on Canadian LumberA bipartisan resolution introduced in the U.S. House of Representatives on May 22 calls for “open trade between the United States and Canada on softwood lumber free of trade restraints that harm consumers.” Companion resolution, S. Con. Res. 22, which was introduced in the Senate in March, and the new H. Con Res. 197 “send a message loud and clear that trade barriers are bad economic policy and that the needs of consumers must be taken into account in trade disputes,” said NAHB First Vice President Bobby Rayburn. (To read the resolutions, click here, and type in S. Con. Res. 22 and H. Con. Res. 197 in the box at the upper left.) The House resolution states that the “imposition of special duties on U.S. consumers of softwood lumber…jeopardizes housing affordability,” and it calls on the Bush Administration to allow pending legal cases before the World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) to proceed to a conclusion, without any delays, in order to resolve the trade dispute. Reps. Jim Kolbe (R-AZ), Richard Neal (D-MA), David Dreier (R-CA), Steny Hoyer (D-MD) and 18 other U.S. representatives sponsored the House resolution. The 27% tariffs on softwood lumber imports from Canada, noted Rep. Kolbe, “are penalizing home buyers and other U.S. lumber consumers.” “It is wrong to penalize consumers when there is no significant proof that there has been any damage to the U.S. industry by Canadian imports,” Kolbe added. “This dispute has been going on for more than 20 years. The U.S. consumer suffers, while the U.S. government and industry have never been able to prove that the imports actually harm our domestic industry.” Sen. Don Nickles (R-OK), the lead sponsor of the resolution in the Senate said, “It’s time for our trade policy to reflect fairness to all of the stakeholders, including consumers, in discussions about trade in lumber.” Get the Most Business Out of Your Parade of HomesParades of homes can produce the biggest bang for contractors’ marketing bucks. The events guarantee lots of traffic and leads, a foot in the door in new neighborhoods and the opportunity to showcase top-notch work. All this, and your local home builders association does the advertising. What’s not to like? “It gives smaller contractors exposure they can’t buy on their own,” says remodeler Mike Harris, president of Harris Group Construction in Dearborn Heights, MI. Some larger events draw thousands of visitors to hundreds of homes over a few weekends. Home tour participation sometimes yields immediate sales, but the big payoff comes from cultivating a future client base. People tour your houses, seek out your entries in the next parade and remember you when they’re finally ready to build or remodel. Even smaller events are good venues for “institutional marketing,” says Barry Rutenberg, president of Rutenberg Homes in Gainesville, FL. Get the Best Results by Planning Ahead You’ll get the best results by planning ahead. Here are some pointers on parades and tours from seasoned pros:
Read “Making the Sale: Getting Great Clients to Choose You,” available through BuilderBooks.com for more tips on wowing prospects. To order it, call 800-223-2665 or go online.
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To subscribe, click here on the members only side of www.nahb.org. Home Inspectors and Builders Working to Improve RelationsAt a time when a growing number of consumers are requesting inspections of newly constructed homes before they occupy them, NAHB is working with the American Society of Home Inspectors (ASHI) to improve relations between the society’s members and home builders. Nine out of 10 home inspectors who responded to an online survey conducted by ASHI last year said they inspect new homes and that this accounted for about 40% of their annual business; two-thirds of the respondents said they performed progress or pre-drywall inspections. A 2001 study by ASHI and the National Association of Realtors® found that new single-family houses accounted for only 377,000 of the nearly 4.9 million home inspections completed in the U.S. during the prior year. While 90% of the inspectors responding to the ASHI survey rated their relationships with builders as at least “average” and as good as “great,” the poll also found room for improvement. ASHI Executive Director Rob Paterkiewicz said builders should know that the members of his organization are required to have comprehensive technical knowledge and field experience and to continue their education. “Because home inspectors have the unique advantage of being able to observe building products and techniques as they age and endure the local elements, inspectors can bring a reliable second set of eyes and special insight to the situation,” Paterkiewicz said. He said that more than half of the survey participants reported observing construction products or practices that seemed to have a high incidence of failing or being defective during the previous year. About 10% of those surveyed said that they had worked for builders as consultants to help find ways to improve their product. “We should respect each other’s profession and understand we are all working towards the final goal of a reliable product for the consumer, with minimal call-backs,” said Mike Casey, ASHI’s immediate past president. “Houses are built by hand out of sticks and other materials,” he said, “not stamped out of a machine. Professional judgment has to be used when inspecting. The primary goal is to deliver a safe home that will perform as expected for a reasonably useful life.” ASHI is sharing its survey findings with NAHB so that “there can be a mutually beneficial relationship when both builder and home inspector put the best interests of home buyers first,” Casey said. ASHI has more than 6,000 individual inspector members and can be reached at 800-743-ASHI. Homeownership Bus Touring the CountryIn celebration of National Homeownership Month and the Bush Administration’s “Blueprint for the American Dream” initiative to increase homeownership among minorities, the “Homeownership Express” bus may soon be arriving at a town near you. A national bus tour promoting housing issues and delivering information to consumers about counseling services, downpayment assistance, flexible mortgage financing and other resources for prospective home buyers is being started this Tuesday by the Department of Housing and Urban Development and its Blueprint partners and will continue throughout the month Potential home buyers — especially low- to moderate-income minority families whose homeownership rates lag far behind the national average — will meet the bus at each stop along the way. Recent Census findings indicate that while nearly 70% of all Americans own their own homes, less than half of African-American and Hispanic families are home owners. Last June, President Bush challenged the housing industry to help create homeownership opportunities for 5.5 million minority families by the end of the decade. In October, the White House unveiled the “Blueprint for the American Dream,” which calls on the real estate, mortgage finance and other home building industries to take specific steps to help reach the President’s goal. NAHB and its 211,000 members are committed to removing barriers to homeownership for minority families. The Homeownership Express will visit one city each day, beginning in Washington, D.C. and concluding on the West Coast. For its itinerary or more information, click here, or e-mail Blake Smith at NAHB or call him at 800-368-5242 x8583. NAHB Supports Builder in Fair Housing Accessibility CaseNAHB has filed a friend of the court brief in a fair housing accessibility case brought by the U.S. Department of Justice against Edward Rose and Sons, an NAHB member and multifamily developer from Michigan. The case is examining whether the Department of Housing and Urban Development’s accessibility guidelines for multifamily buildings under the Fair Housing Act require the primary entrance of a unit to be accessible or whether other alternative designs — such as a side or patio entrance — can be used. The Federal District Court for the Eastern District of Michigan agreed with the Justice Department that the primary entrance to a unit is a “public or common use” area that must be accessible. NAHB is arguing that HUD’s guidelines are not regulations and only the statute — which never mentions “primary”entrances — establishes legally binding requirements for accessibility. NAHB is also arguing that since the design in question complies with several of HUD’s safe harbor documents, and was built to a state building code specifically designed to meet the requirements of the Fair Housing Act, that the Department of Justice’s position on enforcement is contrary to HUD’s policy of encouraging flexibility and alternative designs. The Fair Housing Act’s accessibility provisions require all multifamily dwellings constructed for first occupancy after March 13, 1991, to be built with seven design features to make them accessible to persons with disabilities. The case is on appeal to the U.S. Circuit Court of Appeals for the Sixth Circuit. For further information, e-mail Bruce Lundegren, NAHB's regulatory counsel, or call him at 800-368-5242 x8305. NAHB Provides Legal Action Funds for Builders in Six StatesDuring last month’s spring board of directors meeting in Washington, the NAHB Legal Action Committee recommended that the NAHB Executive Board provide financial support in six states through its Legal Action Fund. The NAHB Legal Action Fund helps home builders associations involved in litigation that is of importance to the home building industry. The cases must address issues that are of common concern to builders or of national significance. Applications for NAHB Legal Action Funds are reviewed three times a year during the association’s board meetings. A variety of issues were reviewed at this meeting, and NAHB chose to provide Legal Action Fund assistance involving:
For more information on these cases or on how to make an application to the Legal Action Fund, e-mail Mary Lynn Pickel or call her at 800-368-5242 x8485. Contractor's Corner — Learn About the Aging-in-Place MarketAccording to AARP, more and more senior home owners are deciding to remain in their homes and “age-in-place” rather than seek assisted living. This decision often requires that their homes be modified for both easier access and increased maneuverability so they can continue to maintain their independence. The needed modifications can range from the installation of bath and shower grab bars and adjusting countertop heights to the creation of multifunctional first floor master suites and the addition of private elevators. All are elements that can enhance independent living for the seniors housing market. The principles behind these changes and the strength of the market are why we as builders and remodelers need to re-think the way we build and remodel homes in this country. In general, there are two segments to aging in place to consider:
Typical modifications to existing homes include lever handles on faucets and doors, grab bars in all bathrooms, curbless showers, lowering light switches and raising outlets, widening bathroom doorways, using higher contrast color schemes and better lighting in kitchen and baths, multiple height surfaces like countertops, pull-down and pull-out cabinet shelves, and stair lifts, to name a few. With new construction, aging-in-place principles include all of the above plus grading/landscaping entry points for zero-step entrances, stacking closets to enable future elevators, lowering window heights, visitable/accessible floor plans, universal design kitchens and bathrooms and better lighting, especially exterior lighting along paths and at entrances. Remember, older clients who are building their final “dream home” will be much happier with their home (and with you as their builder) if it is built with the aging-in-place design principles that allow independence. These aging-in-place principles and modifications were brought home to me literally when my 80-year-old mother-in-law came to live with my family while we modified her own home to fit her abilities and lifestyle. She suffers from acute arthritis and she is very afraid of falling down. In the kitchen we installed lots of pullout drawers instead of cabinet doors and added a raised dishwasher so she would no longer have to lean over so far. We added bright lights under the top cabinets, recessed can lights and skylights capable of bringing in a tremendous amount of light without making the rooms hot — because lighting is also important to help her maintain her independence. In the bathroom we added a nice looking clamp-on rail bar to the bathtub and another wall-mount grab bar carefully anchored to the tile walls. The important thing about these modifications was that none of them looked like they belonged in a hospital. No institutional-looking products were used. You can learn these construction principles in the new Certified Aging-in-Place Specialist designation program that was developed through a partnership between NAHB and AARP. The three-day CAPS program teaches the strategies and techniques for designing and building aesthetically enriching, barrier-free living environments. It goes beyond design to address the codes and standards, common remodeling expenditures and projects, product ideas and resources needed to provide comprehensive and practical aging-in-place solutions. Since the program started a year ago, more than 300 contractors, builders, physical therapists and designers have taken the CAPS courses, and many more are lined up to take upcoming courses. CAPS courses will be available at the Remodelers Show in Baltimore in October, and at the International Builders’ Show in Las Vegas next January, as well as at many local builders associations during the year. Several CAPS courses are offered, including Working with Older Adults & Marketing to Older Adults and Home Modifications. You may have already noticed the increasing demand for changes to homes by clients who want to be able to remain in their homes as they age. If you haven’t witnessed this first hand, it may be on the horizon for your parents or another family member. Either way, it’s coming and coming fast. You should be on the cutting edge of this trend, or you’ll be left in the dust. You can get information about upcoming CAPS training or sign up by going to the Education Section of www.nahb.org, typing “CAPS” in the search engine of the NAHB Web site or by calling 800-368-5242 x8153. For more information, the NAHB Remodelors Council™ is also a good place to begin. Call us at 800-368-5242 x8216. Dan Bawden, CAPS, CGR, GMB is the chairman of the CAPS Board of Governors. He is also the owner of Legal Eagle Contractors in Houston and can be reached via e-mail or through his company’s Web site.
BuilderBooks.com offers a variety of publications online about remodeling and for contractors. To view or purchase these publications, click here.
Older Americans Are an Ever Growing NicheThe country celebrated Older Americans Month in May, but there’s plenty of reason for home builders to focus on this segment of the population throughout the year. Research shows that those aged 55 and older will provide NAHB members with the next great building opportunity niche. Population projections over the next 20 years indicate:
Clearly the population segment that demonstrates the largest growth and offers the most opportunity for housing options is Americans aged 55 and older. Not only will seniors constitute the largest population segment over the next 20 years, they control 70% of the nation’s wealth. Here are some additional facts about the 55+ population from the U.S. Census Bureau:
Take heed: If you are not providing housing for older Americans, you will be. The NAHB Seniors Housing Council provides members with ongoing information and trends on this niche market segment and the most popular amenities for 55 and older buyers. For additional information, contact the council at 800-368-5242 x8220 or e-mail Eucklan Matthews-Jones. Background on Wetlands Regulation Available to NAHB MembersWhen Arnold Tritt, executive officer of the Northeast Florida Builders Association, was asked some tough questions on environmental issues by his local newspaper, he got his answers by consulting with the experts at NAHB. The reporter asked several questions, including the following:
Tritt received a quick response from NAHB, which provided the in-depth information on wetlands regulations and the Clean Water Act he needed to answer those questions. For a start, he was able to cite a 2001 decision by the U.S. Supreme Court — in Solid Waste Agency of Northern Cook County (SWANCC) vs. U.S. Army Corps of Engineers — that federal Clean Water Act regulation does not extend to isolated wetlands. This decision has raised some difficult issues for federal regulatory agencies. Distinguishing under federal law between the areas that deserve stringent environmental protection and those that don’t is no easy matter, but one that has significant repercussions for the nation’s home builders. Home builders associations or NAHB members who are interested in receiving background information on wetlands regulation, isolated wetlands and other issues related to the federal definition of “waters of the United States” can e-mail Neil Gaffney in NAHB’s Public Affairs Department or call him at 800-368-5242 x8495.
Save 45% with Emery Worldwide NAHB members save 45% when shipping air freight with Emery Worldwide. These discounts apply to Emery's Gold Priority Service, including next morning, deferred and time-specific delivery. NAHB members also receive a 20% discount on International Express Service. There are no enrollment fees. Just call 800-MEMBERS (800-636-2377) or request your free member rate quote. For more information, contact Rand Cheadle at 800-368-5242 x8430. 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. There Is No Substitute for a Well-Trained Sales ForceThe home selling profession is a people profession. People — buyers — buy homes from people — your sales staff. So, it is imperative to have the best possible sales people representing your company. You should do everything possible to prepare your product for consumer acquisition. That includes preparing the most important sales ingredient of all — the most professional salespeople possible. Einstein once said, “The only uncontrollable dimension in the universe is people.” Therefore, you have to have well-trained, highly sensitive and emotional salespeople to help your prospects become participating buyers. Excellent Sales People Are Worth the Investment In order to get and retain outstanding sales personnel, you have to compensate your sales staff as well as, or better than, the competition. Not only that, you should offer them sales incentives. A solid compensation program with incentives for increased production will be money “well-spent,” even when compared with spending additional dollars on advertising. That’s because excellent sales people always find ways to attract business to their doorstep through their own efforts. They do not wait for the market to occur — they make the market. Excellent Sales People Need Motivation, Too While compensation is very important, it is not the only factor that motivates your sales staff. Remember, “Outstanding salespeople work for pride and commissions.” Your motivation program has to be equally as good as your compensation plan in order to help your sales team maintain its competitive spirit to outsell the competition. As for your role as manager to the sales staff, keep in mind the following action items and adapt them to your personal development or management style:
Some Common Mistakes ... and Corrective Actions Here are 10 simple ways to avoid or correct the 10 biggest mistakes a sales manager or sales person can make: Common Mistake: Corrective Action:
In order to constantly create more sales, be sure that you and your associates regularly review the lists above and critique one another. You might also consider having your staff prepare written essays on one topic at each weekly sales meeting and follow it with a discussion. The exercises will create a better understanding of the sales profession among all involved. They will also help you reinforce the skills that your sales personnel need to make that next sale. In addition, the educational experience will provide each sales person with a personal sense of accomplishment and satisfaction. S. Robert August is president and founder of S. Robert August & Company, Inc., a national marketing and public relations firm based in Denver that specializes in providing home builders, developers, manufacturers and lenders marketing/management consultation and sales training. Robert is also past chairman of NAHB’s National Sales and Marketing Council. Robert can be reached by phone: 303-220-8480, fax: 303-220-0107, email: Robert@srobertaugust.com, or by visiting the S.Robert August & Company Web site.
BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here.
Report for NAHB Members Examines Visitability IssueThe May issue of NAHB’s “One Minute Report” provides association members with information about visitability, a concept that is gaining greater attention in the United States from advocates for the disabled and from the country’s aging population. NAHB adopted policy at last month’s board meeting to encourage builders to incorporate accessible design features in single-family homes on a voluntary basis. While design elements that make homes “visitable” can make them easier to enter and maneuver, the costs of making these modifications can make the houses less affordable, the report says. The cost of no-step entries is a particular concern. “While no visitability standard for single-family housing has been established, several benchmark minimum requirements generally are accepted,” the report says. They include:
The report notes that seven states and a number of local jurisdictions have now passed ordinances that require homes built with government financing assistance to be visitable. Others are considering similar proposals. Ordinances in at least two jurisdictions extend visitability requirements to all new single-family construction. Federal legislation introduced in Congress last year proposed that all housing constructed with any federal government assistance or under federal programs be required to incorporate the visitability features listed above. NAHB policy opposes mandatory requirements for accessible design features in new, single-family construction and remodeling. New CEO Named to International Code CouncilJames Lee Witt is the new chief executive officer of the International Code Council (ICC), a 50,000-member association dedicated to building safety that develops the codes used to construct residential and commercial buildings, including homes and schools. Witt has more than 25 years of leadership and experience in the field of disaster management, including eight years as the director of the U.S. Federal Emergency Management Agency (FEMA). As the director and a member of President Clinton’s Cabinet, he was widely recognized for his expertise in change management and the transformation of his agency. Witt has been the architect of national government programs related to emergency preparedness, mitigation, response and private sector recovery. During his time at FEMA, he elevated mitigation and the role of building codes in building safer and smarter communities. In making the announcement of Witt’s appointment, the ICC Board of Directors thanked Bob Heinrich, the organization’s former CEO, for his contributions during the transition from the three model code groups — Building Officials and Code Administrators International, International Conference of Building Officials and Southern Building Code Congress International — into the International Code Council. “With the inclusion of Mr. Witt as the CEO, we are confident the ICC will continue its growth as a world class organization that is setting the standard for building safety,” said ICC President Paul Myers. Consumer Trends in Building Material Purchases SurveyedInformation designed to assist the construction industry in understanding trends in consumer purchases of building materials is available from the NAHB Research Center. The center began publishing data reports from its 2002 Annual Consumer Practices Survey last month. Using a new Internet-based survey process, the reports are based on more than 40,000 respondents, a nearly five-fold increase from the previous year. The survey covers a wide variety of topics, including the types and amounts of materials purchased, who purchased and installed the materials and where the materials were purchased. Ed Hudson, market research division director for the NAHB Research Center, said that the methodology of the survey, which was started in the early 1970s, has continuously been refined in order to provide the most accurate estimates of demand for building materials. Users of the consumer survey and its counterpart, the Annual Builder Practices Survey, include NAHB, major building product manufacturers, other industry associations and government agencies. The center has the ability to tailor a comprehensive research package — from new concept development through market introduction. Research initiatives often combine analysis of survey data with qualitative research, product design, laboratory testing, market assessment, development of market and distribution strategies, field evaluations and other related actions. Pricing for reports from the survey is based on the volume of data purchased and the geographic detail requested. For more information on the NAHB Research Center’s market research-related products, e-mail Ed Hudson or call him at 301-430-6305. Council Acknowledged for BUILD-PAC Fundraising EffortsEarlier this month during NAHB’s spring board meeting in Washington, D.C., the Building Systems Councils (BSC) was recognized for its fundraising efforts for BUILD-PAC, the association’s political action committee. Calling the BSC “the council to emulate,” Bob Nielsen, BUILD-PAC’s chairman, thanked the council’s trustees for “doing a fabulous job” of fundraising. Roger Lyons, of Penn Lyon Homes, was thanked for his hard work and congratulated for becoming the first NAHB council member to be a voting member of BUILD-PAC. At the 2002 SHOWCASE, the annual trade show and educational conference for systems-built housing, BSC members raised more than $65,000 for the PAC, which was the most any NAHB council raised at a single event last year. The council hopes to raise at least $70,000 during the 2003 SHOWCASE. At the board meeting, BUILD-PAC announced that its goal is to raise $1.4 million this year. In the 2001-2002 election cycle, BUILD-PAC was the 13th largest PAC donor and the fifth largest business donor to Democratic candidates and the sixth largest to Republicans. For more information, call 800-368-5242 x8470. Job Corps a Resource for NAHB MembersTo help make NAHB members more aware of the construction craft training programs that the Home Builders Institute, the workforce development arm of NAHB, has been operating for the Department of Labor for nearly 30 years, HBI trustees are arranging visits with students at their local Job Corps centers. “These students represent an enormous resource to our members and the future of our industry,” said HBI Trustee and NAHB Past President Shirley Wiseman Lach. “We have to let the membership know.” Wiseman last week led a delegation of leaders from home builders associations to visit the Whitney Young Job Corps Center in Simpsonville, KY. Wiseman was accompanied by Bob Weiss, president of the Home Builders Association of Kentucky and chairman of the NAHB Executive Officers Council, and Todd Johnson, executive officer of the Home Builders Association of Lexington. “It was a great visit, and what a program,” said Weiss. “I will certainly encourage other executive officers to reach out to their local HBI Job Corps program. This is a member resource that has been kept secret long enough.” Following his visit, Johnson is already preparing a story for his association’s newsletter and is in the process of encouraging his members to participate in Job Corps by making classroom presentations and working with students as mentors. The possibility of establishing a network of home builders associations in the Southeast that will link up to Job Corps students who are seeking employment is currently being considered. Meanwhile, HBI trustee Steve Nellis, of Centex Homes, took several of his company’s Dallas-area subcontractors to the North Texas Job Corps Center in nearby McKinney. “It was very productive,” said Nellis. “Several subcontractors are interested in becoming members of the center’s Industry Advisory Council and Dennis Bond, of North Texas Airco, even offered to donate training equipment for the students.” Under the Workforce Investment Act, the Industry Advisory Councils help decide what training in the trades is provided at the Job Corps centers. For more information on HBI’s Job Corps programs, e-mail Maria McIntyre or call her at 800-368-5242 x8912. Pull-Down Kitchen Faucet Provides Unique FeaturesThe new Aberdeen kitchen faucet from Moen specializes in enabling users to fill vessels outside the sink. Based in North Olmsted, OH, a suburb of Cleveland, Moen is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. To perform such tasks as watering a plant on the windowsill or filling a vase on the countertop, the user pulls down the ergonomically designed spout, pushes the pause button and interrupts the flow of water as the wand passes out of the sink. The pullout spout includes a 59-inch hose. In the company’s extensive research, this was a feature identified as something that consumers wanted. Consumers were also found to prefer kitchen faucets with traditional styling and with a higher and slightly longer spout to provide more clearance when washing dishes or filling large pots. Designed with these consumer preferences in mind, the Aberdeen line is available in a two-handle or single-handle style and with optional coordinating soap and lotion dispensers. Faucet finishes include: chrome, glacier, ivory, sand, chrome with LifeShine® polished brass accents, LifeShine stainless and LifeShine copper. Patented by ITT Industries, Aberdeen’s new Hydrolock installation system snaps together with clicks that let the installer knows the connection is secure. Hydrolock makes it faster and easier to install and remove faucets, reduces labor, eliminates the possibility of cross-threading during installation and eliminates the need to use tools to attach the water line to the faucet. NAHB Membership Day a Banner SuccessParticipating in NAHB’s National Membership Day on May 5, 367 local and state home builders associations called in more than 5,500 new members. With membership continuing to rise even after the one-day annual event, NAHB has subsequently increased its official membership total from 205,000 to 211,000. During the “2003 Masters of Membership” drive, the National Sales and Marketing Council brought in 457 new members; the Collier Building Industry Association in Naples, FL, recruited 237. The state of Florida increased its membership rolls by 900. “This outstanding and record-breaking effort is a tribute to the dedication of our entire membership,” said Lynne Pratt, chairperson of the NAHB Membership Committee. “Let’s continue to build our future by strengthening the foundation of our industry one member at a time!” Pratt and the NAHB Senior Officers gave special thanks to Sears Contract Sales, exclusive National Membership Day partner and sponsor, for their continued support with NAHB’s membership initiatives at the local, state and national levels. |