Nation's Building News Online: June 16, 2003Print All Articles Text Version |
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Workforce Heroes Have a Tough Time Buying Homes in 25 Top Cities, NAHB Research FindsHousing prices are too high and incomes are too low for the nation’s workforce heroes — including fire fighters, nurses, police officers and teachers — to have an easy time of buying affordably priced housing in the nation’s 25 largest cities and their suburbs, concludes a new NAHB study. Released last week at a symposium by the Homeownership Alliance in Washington, D.C., the “Homeownership for Heroes” study found that, on average, workforce heroes’ homeownership opportunities in the central cities are seven to 10 percentage points lower than for the typical household and 20 to 23 percentage points lower in the suburbs. Roughly only a third of the homes for sale in the cities that were surveyed are affordable to teachers and police officers who are early in their careers, research showed. “The saintly California cities of San Francisco, San Jose and San Diego are particularly difficult areas for heroes to aspire to homeownership, as is Los Angeles and, to the north, Seattle,” the study said. In central San Francisco, only 1% of the homes for sale are affordable to police officers who are in the early years of their career and none are affordable to younger teachers. “The cities of Boston and Chicago also have poor opportunities for workforce hero homeownership,” according to the NAHB report. The suburbs of those cities, along with the suburbs of Memphis, New York, Dallas and Milwaukee are also tough going for public employees and others who would like to live in the communities they serve. David Crowe, NAHB’s senior staff vice president for federal regulatory and housing policy, indicated that it was difficult to draw generalities about where housing affordability woes are most acute for workforce heroes. “It’s all over the map. It’s East Coast, it’s West Coast,” he said, and the size of the metropolitan area, its growth rate and the age of the housing stock didn’t show much correlation with affordability measures. But the level of affordability for the workers did appear to be weakly related to the rate of overall homeownership in the areas studied, Crowe said. The NAHB study follows a National Housing Conference (NHC) investigation of housing affordability for particular occupations in the nation’s 60 largest metropolitan areas in 1999 and updated with data from 2001. A second edition of the report, “Paycheck to Paycheck: Wages and the Cost of Housing in America,” was released last month. Where NHC analysis looked only at the median prices of homes sold, the NAHB study was able to consider the entire price distribution of homes sold, Crowe said. Also, more complete information on incomes was included. NAHB’s research also compared the home buying ability of nurses, teachers, fire fighters and police with other households in the area. Police officers, for example, find homeownership particularly difficult relative to other households in San Antonio, Phoenix, Columbus and Jacksonville. In those cities, the percentage of homes that police officers can afford is more than 25 percentage points lower than the homes affordable to the median-income household. Summing up the various comparisons that were made, the report concluded that homeownership is least affordable for workforce heroes in the metropolitan areas of Dallas, Seattle and Washington, D.C. That was followed closely by Milwaukee, New York, San Francisco and San Jose. Relatively better homeownership opportunities can be found in the metro areas of San Antonio and Cleveland, followed closely by Detroit and New Orleans. Building News Coast To CoastAppealing to the CrowdsMany design firms concentrate on decorating model homes, using furniture and accessories that draw the line between traditional and contemporary to attract buyers from all walks of life. The designers work to impress certain features in the memories of the prospective buyers. A number of builders even consult designers before construction begins and are willing to reposition windows, doors, closets and walls to make the job easier. "We want prospective buyers to fall in love with the fantasy we've created, to feel they can get it if they live in the house," says Carlyn and Company Interior Architecture & Design President Holly Polgreen, who says the goal is to create "house lust." Builders often buy design services and furnishings as a package deal, either reusing the furnishings in future models or selling them to the model's buyers or other home owners in the development once the model closes in two or three years' time. Bill Aims to Avoid Consumer LawsuitsA bill ready for passage by South Carolina Gov. Mark Sanford requires home owners to inform builders of construction defects 90 days prior to filing a lawsuit and give them 30 days after notification to remedy the problem. Though home owners can submit complaints with the S.C. Residential Building Commission to avoid litigation altogether, lawmakers agreed that mandatory mediation was necessary to minimize the number of costly, time-consuming court cases. The measure also makes it more difficult for home owners associations to sue builders. The S.C. Association of Realtors® supported the legislation. Builders Dish on Construction FlawsDogged by a spate of litigation and a squeeze in insurance coverage, builders are pursuing improved quality in single-family and multifamily housing alike. To that end, renowned construction expert Stan Luhr will discuss how builders can actually increase their profits by adopting strategies that have been shown to produce higher quality while avoiding risk. Luhr's insights will be delivered during two separate programs at PCBC The Premier Building Show in San Francisco, which is being sponsored by the California Building Industry Association. One session will showcase the best and worst examples of production housing in this country, offering explanations for why some products fail miserably in certain climates and why energy-efficient residences can create extra construction problems. In a second seminar, Luhr and a co-presenter will speak on the challenges of high-density, multi-story buildings, which are becoming an increasingly popular resource for satisfying urban demand for homes. Builders: More Homes Per Acre Will Cut SprawlThe Building Industry Association of Southeastern Michigan hopes to pass legislation requiring local governments to permit eight homes per acre, rather than a single dwelling per acre. The goal of the measure — which would apply only to heavily populated counties where water and sewer infrastructure is accessible — is to minimize urban sprawl and facilitate the construction of the 400,000 housing units needed over the next three decades to meet demand. Association Executive Vice President Irvin Yackness blames one-home-per-acre laws for creating sprawl by forcing developers to look elsewhere. Milford Township Supervisor Don Green opposes such legislation because it would eliminate the large lots preferred by many buyers. Meanwhile, the new Michigan Land Use Leadership Council, established by Gov. Jennifer Granholm, is expected to formulate solutions to urban sprawl later this year. Building a Hurricane-Proof HomeCoastal building specialists agree that hurricane-proof dwellings are solidly constructed, but they emphasize that current standards are merely guidelines for the minimum amount of protection. Depending on their needs and preferences, the experts say, home owners may want to go beyond code. For example, deeper pilings than are required could lower federal flood insurance in some areas, according to Spencer Rogers of North Carolina Sea Grant. Other additional, but not required, safeguards against hurricane-strength winds include breakaway walls free from wiring and also properly installed hurricane shutters. Jacksonville, FL-based Blue Gem Construction owner Phillip O'Hara, meanwhile, says oceanfront homes also can be built using Lego-like insulated concrete forms, which can hold up against 200-mph winds. Rogers urges home buyers to consult a structural engineer beforehand and hire a builder experienced in coastal construction. Demand Remains for Old SkillsPlasterers have been pushed aside since the advent of drywall, which offers professionals and do-it-yourselfers a low-cost alternative. Though the presence of older homes, churches and buildings makes it unlikely that plaster will become obsolete, many professionals have been relegated to restoration projects. Many of today's jobs involve cracks caused by moisture or the deteriorated wood or brick under the plaster. Despite the shift, the skills of plaster craftsmen will remain valuable as long as homes that pre-date drywall continue to stand. Digital Design HelpInnovative software programs allow home owners to view changes in the color or floor plan of their new residence before committing to a project. Benjamin Moore and Glidden, for example, are among the paint companies offering inexpensive CD-ROMs that let home owners see their homes in various shades using a digital or scanned picture and their mouse. Although the colors show up brighter on the computer screen, home owners can envision the finished product. They also can create a virtual model home via 3D Home Architect, Total 3D Home or the Punch Home Design Architectural Series 18 by keying in measurements and placing doors, windows and stairways wherever they choose. These computer-aided drafting programs range in price from $40 to $130 and require computers with plenty of speed and memory. Fed Tackles Affordable Housing BarriersThe U.S. Department of Housing and Urban Development plans to review federal, state and local affordable-housing regulations in an effort to weed out procedures and policies that are redundant, contradictory or burdensome. The new initiative is part of HUD's new focus on making homes more affordable as demand continues to grow. "By breaking down regulatory barriers at all levels of government, we are creating an environment to increase minority homeownership," according to HUD Secretary Mel Martinez. To this same end, HUD a year ago announced the creation of a Web-based forum — the Regulatory Barriers Clearinghouse — that builders and developers could use to address their concerns about state and local development restrictions that impact the cost of housing. Government Campaigns for Stronger Home 'Safe' RoomsAfter the recent tornadoes, many home owners discovered that their basements were not strong enough to protect them from damaging winds. The Federal Emergency Management Agency (FEMA) has jumped at the opportunity to promote concrete 'safe rooms,' which can stand up against 250-mph winds. These basements or central rooms feature concrete walls and ceilings as well as steel reinforcement bars — unlike the collapsible wood ceilings that cover most basements. FEMA estimates the price of such safe rooms at $2,500 to $6,000, but Overland Park, KS-based builder Mike Brown figures they cost as much as $9,000 just 10 years ago. Meanwhile, U.S. Rep. Dennis Moore (D-KN) has introduced legislation that would set aside research funds to develop ways to make homes more wind-resistant. American Association for Wind Engineering Past President Michael Gaus believes that just $500 in improvements could sufficiently safeguard a home. FEMA urges builders to go beyond current building codes by securing walls to foundations and roofs with brackets and also by strengthening masonry walls. Housing: Still About DemandWith the help of attractive interest rates and strong home-price appreciation, the housing market has weathered a slump that is pounding most other industries and the economy as a whole. Freddie Mac Chief Economist Frank Nothaft also attributes the sector's success to robust demand — much of it coming from immigrants — as well as the ability of the housing finance system to lure capital from all over the globe. Nothaft anticipates a 1.3% annual gain in the number of new households over the next decade and a jump in the nationwide homeownership rate from 68% to 70% by 2010. This demand, as well as the steady flow of overseas capital that has held mortgage rates down and made homeownership more affordable, makes a housing bubble unlikely. How to Deflate Overblown Fears of DeflationThe perceived threat of deflation — a steady decline in price levels that subsequently curbs consumer and business spending — is riding largely on fears that the housing market currently is under 'bubble' conditions and is moving toward an inevitable burst. In a Wall Street Journal editorial, however, Columbia University economics and finance professor R. Glenn Hubbard insists this scenario is unlikely to unfold. While strong residential property values softened the blows coming from the stock market and kept consumption up, Hubbard says it was not a bubble — but rather movement by the Federal Reserve to lower the cost of housing to users, increased immigration in the 1990s, and a shortage of land for new housing in some markets — that boosted the fundamentals for the real estate sector. Moreover, he points out, a key indicator or bubble conditions — the ability to buy an asset and then quickly resell it for a higher price — is not present in the housing market, due to the high transaction costs associated with purchasing and selling property. Intuit Boosts Payroll and HR OfferingsMore efficient management of payroll and human resource tasks is now available to small- and medium-sized businesses from Intuit, maker of QuickBooks; the new products include Complete Payroll for QuickBooks Online Edition, E-File & Pay for QuickBooks Do-it-Yourself Payroll and Intuit Payroll Services Complete Payroll HR Assistant. Intuit meets the growing demand from small business owners for products that are user friendly and flexible. Complete Payroll for QuickBooks Online Edition updates both QuickBooks and QuickBooks Online Edition with information so it can be accessed from any location with an Internet connection. E-File & Pay for QuickBooks Do-it-Yourself Payroll helps manage payroll and ensures compliance with tax laws. Complete Payroll HR Assistant manages employee information to remain in compliance with state and federal employment laws. Is the Living Room Extinct?Instead of the traditional living room, a growing number of home owners are seeking great rooms off their kitchens to create large gathering spaces that meet the needs of a bustling lifestyles. NAHB finds that living rooms were absent in a third of the homes built in 2001, and 40% of buyers polled that year said they would purchase a home without one. Ellicott City, MD-based architect David Robbins notes that today's kitchens are bigger and feature center islands for food preparation and entertainment purposes as well as high-end molding and window treatments. Though more affluent buyers continue to prefer formal living spaces, Denver-based Architecture Matters President Karen Harris says the dining room fills that need. Meanwhile, home owners have moved their family rooms and great rooms to the back of the home, which is now frequently used as the entrance. Despite the added pressures of keeping the kitchen and family room clean for guests, Harris says centering their lives around the kitchen helps home owners create a comfortable, casual space in which to relax. She sees the trend as the next phase in the evolution of homes into larger and more casual dwellings that buffer families from the harsh realities of the outside world. New Home Owners' Big Beefs With BuildersAccording to a survey of almost 100,000 home buyers conducted by Eliant last year, most were content with their appliances and overwhelmingly found their builders to be courteous and knowledgeable. However, flooring, drywall and plumbing posted satisfaction ratings under 75%; while satisfaction with concrete driveways and walkways was rated at only 64%. Home owners ranked wall alignment and framing first in importance, but gave these elements a satisfaction rating of just 76%. Respondents also were dissatisfied with builder response times and the quality of the repairs themselves. Space — the Fashionable FrontierNAHB reports that upgraded kitchens and bathrooms, commercial-grade appliances, great rooms, master bedroom suites and high-speed Internet access were in high demand last year. Industry insiders in Dubuque, IA, say their market is no exception to those trends. “The big trend is open spaces and lighter, brighter spaces,” notes Dubuque Board of Realtors® President Brad Brissey. Mozena Construction's Joe Mozena agrees, noting that home owners want bigger kitchens and great rooms — which leave them little space for formal dining and living rooms. In the master suite, large bathrooms and walk-in closets are popular. Meanwhile, homes are increasing in size to accommodate three-car garages, offices and dens. Local architect Jean Evangelista says 2.5-car garages are standard in her firm's plans to give home owners enough space to store toys and other items as well as the family vehicles. Universal Housing Gains Momentum"Universal design," a nationwide movement calling for builders to construct accessible homes for disabled people, is a hot topic in Arizona. Supporters of the movement take it beyond handicapped access, claiming that families lugging baby strollers; recovering surgical patients; and movers all benefit from no-step entrances as well as wider hallways and doorways. Pima County was the first in the country to institute an "inclusive-design ordinance," which requires at least one stairless entryway, 32-inch doorways, door levers and light switches under 48 inches high. Meanwhile, the Phoenix Mayor's Commission on Disability Issues wants to impose a law mandating no-step entrances and wider hallways and bathroom doors. Both the Home Builders Association of Southern Arizona and the Home Builders Association of Central Arizona oppose these laws because they keep home buyers from designing dwellings to their specifications. According to Home Builders Association of Central Arizona Deputy Director Rus Brock, "We're out there to satisfy the market, and if the market wanted it, we'd already be doing it." Brock adds that such laws will boost home prices because hundreds of standard plans would need reapproval. Even so, Arizona Bridge to Independent Living's Paula Grodecki says low-cost accessible housing is in high demand in the East Valley. Appeals Court Rules That Wetlands Regulations Apply to Roadside DitchesNAHB last week blasted a decision by the U.S. Court of Appeals for the Fourth Circuit in which it decided that a 12-acre parcel of land draining into a roadside ditch is subject to regulation under the Clean Water Act. “With this decision, the court has transformed virtually every front and back yard in the mid-Atlantic region adjacent to a man-dug ditch into waterfront property,” said NAHB Executive Vice President and CEO Jerry Howard. The property in the dispute, which was purchased by James and Rebecca Deaton in 1989, is located near Parsonsburg, MD, roughly in the center of the Delmarva Peninsula, which separates the Chesapeake Bay from the Atlantic Ocean. The Deatons were advised that they would need to obtain a wetlands permit from the Army Corps of Engineers when they decided to dig a ditch across the low-lying middle of the property, where water would collect in the winter months and after heavy rainfalls. They were attempting to develop their land as a five-lot residential subdivision. The property owners dug the ditch without obtaining a permit, which the court last week ordered them to fill. The Deatons argued that the roadside ditch was not a navigable body of water and that there were no wetlands on their property. “Congress never intended for ordinary rural roadside drainage ditches, which are commonplace along interstate highways and county roads, to be considered as ‘tributaries’ under the Clean Water Act,” said Howard. “The environmental value of man-made ditches that are clogged with vegetation and floating leaves for just a few weeks and dry during the rest of the year should not be comparable to, and in some cases exceed, the environmental value of streams that run into the Chesapeake Bay,” he said. Howard added that the ruling dilutes the effectiveness of the Clean Water Act in protecting the nation’s navigable waters. (See also the related article in this issue of NBN Online, “Clean Water Act Regulation Stumbles Into a Ditch in Delaware.”) The nation’s builders have been frustrated in their efforts to obtain clear guidance on what properties are covered under Clean Water Act regulations, he said, and “this decision will only muddy the regulatory and legal waters further.” To read the decision in the case of United States of America v. James S. Deaton; Rebecca Deaton, click here. Housing SnapshotMortgage interest rates continued to set new record lows last week in a housing industry that has been basking in good news, while the outlook for the rest of the economy, according to Federal Reserve Chairman Alan Greenspan, is "still somewhat cloudy." Wholesale prices dropped 0.3% in May, the second consecutive monthly decline in the Producer Price Index, but far slower than April's decline of 1.9%. All eyes are now focused on what the Fed will do next week. It is expected to cut the federal funds rate from 1.25% to 1%. The manufacturing sector has been losing jobs for 34 consecutive months. Mortgage Interest Rates30 Year Fixed Rate: 5.21\% 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 Too Many Communities Make Building Housing a StruggleThere’s no doubt about it. These are good times for America’s home building industry. With mortgage interest rates at their lowest levels in modern history, housing production and sales have been healthy and home building for some time has been the bright star in an otherwise lackluster national economy. The news has been so good, in fact, that it may come as a surprise to many how much of a daily struggle it has become in too many parts of this country to build affordably priced housing for our growing population. When communities sit down to discuss such local concerns as the environment, economic growth and infrastructure needs, too many times housing is scorned. We’re forced to come in through the back door, which is a crying shame because housing deserves a central role in addressing all of those concerns. Instead of making an honest assessment of housing needs, too many localities these days are turning their backs and embracing no-growth policies that are a quick fix but ultimately a ticket to nowhere. Unreasonable restrictions are placed on the use of land for housing. Zoning and development codes that are out of date and out of step with the housing wants and needs of families are locked into place. And new home buyers are saddled with inequitable impact fees and other exactions to finance facilities and services that politicians are afraid to ask the general population to pay for. This is National Homeownership Month, and that makes it an especially appropriate time to take a closer look at housing needs of the men and women who live and work in our communities. When we’re doing a good job of meeting those needs, that’s good for our neighborhoods, our businesses, our institutions, our entire way of life. But when we’re struggling to provide affordably priced housing, there are enormous economic and social implications that sooner or later will start taking a heavy toll. Something is wrong when our school teachers, our police officers, our fire fighters and the many, many workers who provide us with goods and services every day can’t afford to live within a reasonable distance of their workplaces; when single-parent families — who constitute a growing portion of our households — can’t stretch one income far enough to pay for decent housing in a decent neighborhood; or when family breadwinners have to choose between paying the rent and meeting other necessities. These are among the telltale signs of housing in crisis. They are symptomatic of elected officials who are apathetic, at best, about adopting policies to alleviate constraints against providing for one of the most basic human needs. While the depth of today’s housing crisis varies in different parts of the country, it is of epidemic proportions and should be a serious concern for everyone. Over the coming decade, the U.S. population is projected to increase by 24 million people. During that period, an average of one million new households are expected to be formed each year. These are some of the solutions that will help ensure that there is a sufficient supply of new housing to meet demand:
Today’s enduring low mortgage rates provide a window of opportunity for increasing the ranks of the nation’s home owners, especially among minority families whose rate of homeownership is far below the national average. But even in the very best of times, housing affordability will remain an elusive goal as long as local jurisdictions fail to recognize that their policies are a major part of the problem. Lawsuits Are Taking Consumers for a RideIf you own a cell phone, have automobile insurance or use long-distance telephone service, you’re a plaintiff in a lawsuit — and you probably don’t even know it. Did anybody ask if you wanted to be a plaintiff? Probably not. Nevertheless, all across this country, lawyers (whom you’ve never met) are filing claims (which you may not agree with) on your behalf (without your permission) and recovering huge legal fees for themselves, and you likely will never see a dime. How can this happen? Because of a special type of lawsuit known as the class action. Lawyers Make Millions In the modern world of class actions, plaintiffs often gets little or no relief, while lawyers make millions. In a typical settlement, in an Illinois state court class action, cable television customers received no compensation whatsoever for allegedly excessive billing. The cable operator did agree to change some billing practices, but all of the cash settlement — $5.6 million — went to the plaintiffs’ lawyers. In another notorious settlement, the plaintiff class members had a debit posted to their accounts in a proceeding against mortgage lenders. They were actually worse off than if the case had not been filed, and their lawyers received $8.5 million. The most egregious cases have been steered to friendly state courts, where certain elected judges routinely certify as class actions almost all the cases that are filed. Sometimes the class certification order is entered before the defendant is served with notice of the suit and has an opportunity to defend himself. National Cases Get Heard in State Court These cases involve large national corporate defendants, and the plaintiffs live across the country. The cases are truly national in scope, but instead of being filed in federal court where they belong, the cases are frequently filed in a handful of state courts where favored treatment of the lawyers’ demands is virtually assured. Class action filings in these “magnet” state courts have increased by more than 1,000%. In rural Madison County, IL, the number of class actions grows dramatically every year, even though the parties don’t live there and the cases have no special relationship to that county or state. How can this abuse occur? Unfortunately, our justice system allows it. A Rule With Nonsensical Results Under current law, a federal court has so-called “diversity” jurisdiction over a case only if all of the plaintiffs live in different states from the defendants and each plaintiff’s claim is at least $75,000. If even one plaintiff is from the same state as a defendant, the case gets sent back to state court. This rule leads to a nonsensical result. Federal courts have jurisdiction over a slip-and-fall case by a Virginia plaintiff in a Maryland convenience store — as long as the plaintiff alleges damages amounting to $75,001. But at the same time, a $70 million case with 1,000 plaintiffs from all 50 states, involving laws from multiple jurisdictions, winds up in a state court in Madison County, IL. Surely, the framers did not have these tortured consequences in mind. In fact, if Congress were starting anew to define what kinds of cases should be included within the scope of Article III's federal court “diversity” jurisdiction, large-scale interstate class actions would certainly top the list. Those cases typically involve the largest amounts in contention, the most people and the most substantial effects on interstate commerce. Only Congress Can End This 'Extortion Racket' The Class Action Fairness Act (H.R. 1115), of which I am an original co-sponsor, would correct this anomaly by allowing class actions to be litigated in federal court as long as the class members collectively seek $2 million and as long as the case is truly national in nature. If the center of gravity of the case is local, it would remain in the state court. The measure is entirely consistent with traditional principles of federalism. It is also important to stress that this bill is not “tort reform,” but more accurately, “court reform.” Unlike tort reform efforts, the bill does not cap damages; it does not eliminate joint and several liability; and it does not limit attorney’s fees. It does nothing to change the substantive rights of injured parties or the substantive liability of corporate wrongdoers. And it doesn’t limit the availability of class actions, which do serve a valid purpose in vindicating rights. The bill simply reforms court procedures, to allow for truly national cases to be heard by federal judges, who are used to handling complex litigation, and who routinely apply the laws of different states (as is necessary in this sort of litigation). The Washington Post recently decried the current system, saying, “This is not justice. It is an extortion racket that only Congress can fix.” Congress can fix this problem with H.R. 1115. The bill is the best chance to enact meaningful “court reform” to ensure that consumers no longer get taken for a ride. EDITOR'S NOTE: The House on June 12 passed H.R. 1115 by a vote of 253-170. Before the House vote, NAHB sent a letter to the full House in support of the measure. A companion bill, S. 274, is pending in the Senate. To read this legislation, click here, and enter the bill number in the box at the upper left. Rick Boucher is the Democratic U.S. representative from the 9th District in Southwest Virginia. Teachers Can’t Afford to Live in Communities Where They TeachThe 875 public school teachers in Greenwich, CT, can’t afford to own a home in their students’ community, and it is putting a strain on the school system, Joanne Zammit, president of the Greenwich Education Association, said at the June 11 Workforce Housing Symposium in Washington, D.C. Greenwich now hires teachers starting at about $40,000, Zammit said, and that’s not nearly enough to qualify for even a median-priced condo in the town, which now sells for more than $640,000 — up 23.8% from more than $522,000 last year. A median-priced house now sells for more than $1 million, she said. “None of our salaries are going up at that pace,” said Zammit. “We’re getting a 3.8% salary increase this year and that’s the biggest in 10 years, but housing is up 31%. There’s no way our teachers can keep up with that kind of inflation.” Zammit rented an apartment in Stamford when she first became a school teacher in Greenwich in 1969. She bought her home at an insider’s price of $57,000 in 1985 when her building was converted, and then sold that apartment in 1995 for $74,000. Last month, that unit sold for $200,000. An inheritance enabled her to move with her husband into a $175,000 condominium in 1995. It is now appraised at $362,000, and it would be beyond her reach today if she had to rely solely upon her salary of $83,000, which is about the most a public school teacher can make in Greenwich. “It is almost impossible to keep” the 400 new teachers coming into the system, said Zammit. Their only alternative close to where they work is to share housing with roommates; otherwise they have to find housing up the coastline, which is the only recourse for those who are starting families. A commute that takes 20 minutes if you leave at 6 a.m. when there is no traffic can take two to two-and-a-half hours on a bad day, she said. Consequently, teachers don’t like to stick around to provide extra work for their students or to share their participation in concerts and baseball games. The three times a week they are required to stay after school for open house already cut substantially into the time they have to spend with their families at home. “Anything that can be done to bring affordable housing into places like Greenwich would do a lot to improve the school systems in this country,” she said. Zammit said that the board of education is aware of the problem and wants to correct it to stop teachers from coming and going, but it “can’t seem to make the town as aware of these issues as we would like.” She added that, “Teachers would very much like to live in the communities in which they teach.” The Workforce Housing Symposium was presented by the Homeownership Alliance as part of National Homeownership Month activities being held around the country. Virginia Developer Suggests Options for Affordable Workforce HousingIn devising ways to provide affordable housing for workers who are priced out of the communities they serve, counties and municipalities may want to consider creating incentives for landowners to sell their property at a discount, Gary Garczynski, NAHB’s immediate past president, suggested at a Homeownership Alliance symposium held last week in Washington, D.C. as part of National Homeownership Month. In reviewing their comprehensive plans and land-use categories, counties could designate areas for workforce housing, said Garczynski, whose business in Northern Virginia these days is focused on acquiring and developing land for larger home builders. “Right now, the burden seems to be placed squarely on the development community, but is that the right place?” he asked. “Should providing workforce housing be approached with a broader vision? Where does the responsibility rest? Is it important to the goals of the community? And if it is important, the whole community should be part of the answer.” To make land less of a cost burden, governments could explore providing landowners with credits against their taxes for reducing their price or give developers true density bonuses for their participation in the workforce housing zone, he said. As a solution to impact fees that go directly into the price of the house, Garczynski suggested the possibility of providing home buyers with tax credits against the long-term cost of financing such fees through their mortgage. Or governments could reduce fees on workforce housing. Building higher densities has been identified as an important factor in reducing housing costs, but Garczynski noted that “density is a dirty word, the word that has everybody cringing because it means schools, it means roads.” If areas are truly committed to having teachers, police and fire fighters living in the communities in which they work, then they should be willing to spend some of their tax dollars to achieve that objective, he said. 4.8 Million Working Families Have Critical Housing NeedsOne in seven American households — 14.4 million — paid more than half their income for housing or lived in substandard conditions in 2001 and about one-third of them were low- to moderate-income families, Conrad Egan, executive director of the National Housing Conference, told the Workforce Housing Symposium, last week in Washington, D.C. Egan appeared on the panel with David Crowe, NAHB's senior staff vice president for federal regulation and housing policy. Presented by the Homeownership Alliance, the symposium was held in observation of National Homeownership Month. Egan said that 4.8 million families working the equivalent of a full-time job and earning between the minimum wage of $10,172 and up to 120% of median income in their area had critical housing needs in 2001. That was a sharp 60% increase from 3 million families only four years earlier in 1997. Among the working families, housing costs were the primary reason they were experiencing housing problems; 83.4% paid more than 50% of their income for housing in 2001. Of those with critical housing needs, 53% were home owners and 47% were renters. And critical housing needs are not confined to the nation’s cities, Egan said. Of the working families with housing difficulties, 39.5% were in the central city, 42.5% in the suburbs and 18.0% in non-metropolitan areas. The findings are contained in a report, “America’s Working Families and the Housing Landscape 1997-2001,” from the Center for Housing Policy and the National Housing Conference. Legislation Needed to Spur Homeownership OpportunitiesIn testimony on June 12 before the Senate Banking, Housing and Urban Affairs Committee, NAHB First Vice President Bobby Rayburn called on Congress to take several steps to remove barriers to the production of affordable housing and to expand homeownership opportunities for America’s working families during National Homeownership Month. “Enactment of a number of legislative proposals pending in Congress would significantly address many obstacles to homeownership,” he said. The measures Congress should act on now, he said, are:
To spur construction of new affordable housing, Rayburn called on the Federal Housing Administration to insure single-family construction loans. This would establish a secondary market for these loans to attract new lenders and investors to the housing production credit market. “The development of such a market will lower the cost of construction credit, help attract more capital to underserved areas and help home builders avoid the type of severe credit crunch that occurred in the early 1990s,” said Rayburn. Noting NAHB’s full support for the Bush Administration’s “Blueprint for the American Dream” initiative to increase homeownership opportunities for minority families, Rayburn added that the association is committed “to promoting homeownership education, improving minority access to credit and working with lawmakers at all levels of government to identify and fix policies and bureaucratic hurdles that make it difficult to build affordable housing or that add to the cost of such housing.” To read legislation, click here and enter the bill number in the box at the top left. Photo by Herman Farrer ASHRAE Expected to Approve Badly Flawed Ventilation StandardNAHB and other industry groups continue to hold very significant concerns over the cost-effectiveness, technical merits and practicality of a proposed residential ventilation standard by the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE). ASHRAE is expected to approve a final draft of the standard, “Ventilation and Acceptable Indoor Air Quality in Low-Rise Residential Buildings,” this month, and it would like to see the standard implemented as mandatory requirements for new residential construction. Numerous attempts by NAHB and others to have their concerns addressed during the development of the standard have been unsuccessful because of what the association and others believe are blatant violations of ASHRAE rules and procedures that have allowed biased interests to prevail. If the standard is approved, NAHB is prepared to appeal the decision to ASHRAE and, if necessary, to the American National Standards Institute. Other industry organizations, such as the American Gas Association, are likely to appeal. “Residential ventilation is an important issue for NAHB and our position on this draft standard is not a case of sour grapes,” said Chip Dence, a builder from Texas and chairman of NAHB’s Construction, Codes and Standards Committee. “There are real concerns about technical flaws in the proposed requirements and we have made every effort to work with ASHRAE to work them out, but they are just not listening,” Dence said. The ventilation standard:
If approved, the standard would need to be referenced by building codes or otherwise adopted by state and local jurisdictions before the requirements could be mandated. NAHB believes that this will be difficult to do once the problems with the standard become apparent, when and if the standard is ever considered. For more detailed information about flaws in the standard, click here, or e-mail Dick Morris or call him at 800-368-5242 x8444. New York Decides to Adopt IBC Over NFPA 5000New York Mayor Michael Bloomberg announced last month that he has accepted the recommendations of a mayoral commission to adopt the International Code Council's International Building Code, or IBC. Noting that the city’s current building code is the most stringent in the nation, Commissioner Patricia Lancaster said that, “The IBC will allow us to streamline the construction process while not sacrificing the effectiveness of these regulations in keeping our city a safe place to live, work and build.” The complexity of the city’s building code was seen by many as “an impediment to progress,” she said, and the mayor appointed a commission at the end of last year to address the problem. The commission examined the benefits of both the IBC and the National Fire Protection Association's NFPA 5000. Among the criteria used in the selection process were comprehensiveness, ease of understanding, flexibility of upgrading, ease of adaptability to the unique requirements of New York City, as well as the training provided under each code. The IBC was preferred over the NFPA 5000 in every category by which the two codes were measured. To read the commission’s entire report, click here. For further information, e-mail Matt Dobson at NAHB, or call him at 800-368-5242 x8290. Clean Water Act Regulation Stumbles Into a Ditch in DelawareRecent developments in Delaware indicate that it continues to be difficult for home builders to figure out when their property is subject to permitting requirements under the Clean Water Act and when it is not. The Home Builders Association of Delaware reports that the Philadelphia Regional District office of the U.S. Army Corps of Engineers has decided to extend its wetlands protection efforts to man-made ditches. Regulated areas include man-made ditches, ditches without beds or banks and ditches that don’t contain flowing water. In a 2001 decision, Solid Waste Agency of Northern Cook County vs. U.S. Army Corps of Engineers, the Supreme Court ruled that only “navigable waters” are subject to permitting requirements under the Clean Water Act. 'It’s difficult to see how a ditch could be navigable, even if it had some water in it, but that hasn’t discouraged various Corps districts from expanding the definition and finding 'waters of the U.S.' in some unlikely places,' said NAHB Executive Vice President and CEO Jerry Howard. Passed by Congress in 1972, the Clean Water Act defines “navigable waters” as “the waters of the United States, including the territorial seas.” The law prohibits discharging pollutants into those waters without permits issued by the federal government or a qualifying state agency. An exception to the discharge prohibition is found in Sec. 404 of the law, which authorizes the U.S. Army Corps of Engineers to issue permits for the “discharge of dredged or fill material into the navigable waters at specified disposal sites.” “Unfortunately,” said Howard, “NAHB members are being required to apply for, and obtain, Sec. 404 permits to develop in or around navigable waters that simply don’t exist. And determining where those non-existent navigable waters might appear is difficult because the field offices of the Corps define them differently. Dry ditches that are navigable in Delaware may not be considered navigable in other parts of the country.” (See related story in this issue of NBN Online.) “The regulation of development activities in man-made drainage ditches may sound absurd, but it is no laughing matter,” he said. Under the current enforcement of the Clean Water Act, there is no clarity or consistency in determining the waters that are subject to federal wetlands regulation, yet property owners can face a $27,500 fine and up to one year in jail if they violate the law. “The current wetlands regulatory process is unfair, and NAHB members deserve far better,” said Howard. “That is why the association is exploring a variety of legal and regulatory solutions to this problem.” In the case of the HBA of Delaware, NAHB is advocating the common-sense position that dry ditches should fall outside the regulatory definition of areas the Corps has authority over. In written comments to the agency, and in testimony before Congress, NAHB’s message is that the Supreme Court has made it clear which areas can be regulated under the Clean Water Act and which cannot. Making matters worse, on June 12 the U.S. Fourth Circuit Court of Appeals ruled in U.S. v. Deaton that the Corps can regulate man-made roadside ditches in the mid-Atlantic region. This decision could complicate the regulatory situation in Delaware. “The regulation of man-made ditches is degrading to efforts to preserve the natural water resources of this nation,” said Howard. “It is an impediment to building the housing that our growing population needs. It doesn’t make sense, and it is another disturbing example of how federal wetlands regulation has grown out of control.” For more information on litigation relating to the Clean Water Act, e-mail Tom Ward at NAHB or call him at 800-368-5242 x8230. To learn more about Clean Water Act regulation, e-mail Chandler Morse or call him at x8327, or e-mail Susan Asmus or call her at x8538. Safety Programs Essential for Home BuildersJune is National Safety Month, and NAHB is advising its members to develop a written safety program that makes safety a priority for all company workers, subs, vendors, customers and invited guests. “Having a written safety and health program is the first step to defining how you expect your employees and the subs to behave on the job,” students who participate in a six-hour training seminar developed by NAHB and the NAHB Research Center in conjunction with the Occupational Safety and Health Administration are told. By preventing unnecessary accidents, injuries and deaths, having a safety management system in place can save time and money; keep construction projects on schedule; avoid higher workers’ compensation costs; improve worker productivity; reduce damage to materials and equipment; and address legal liability issues, NAHB says. Following are 10 steps companies should take to establish an effective safety and health program:
NAHB's “Construction Safety Program Manual: A Guide for Home Builders and Contractors” is a practical guide for developing a comprehensive safety program for your building company. Available from BuilderBooks.com, the publication includes a model safety program on disk that can be easily customized and adapted to meet the safety needs of your business. For more information, e-mail Robert Matuga at NAHB or call him at 800-368-5242 x8507.
NAHB and the NAHB Research Center, Inc. have developed a six-hour safety training seminar entitled, 'Recognizing the 'Big-Four' Safety Hazards for the Home Building Industry.' For information about when and where this course is being offered, click here. AARP Survey Identifies Changes Needed to Facilitate Aging-in-PlaceA majority of middle-aged Americans believe that they will be able to stay in their current home for the rest of their life, according to a recent AARP study, but a significant number of them haven’t considered the changes they will need to make to those homes to accommodate deteriorating health and physical abilities as they age. The authors of the report suggested that those who were surveyed for the study — “These Four Walls…Americans 45+ Talk About Home and Community,” — may be overly optimistic about their long-range physical and economic health and should begin focusing more on features in their homes that will enable them to age in place and live more independently. Three quarters of the age-45-and-older people who were surveyed expected to remain in good health during their later years and to have enough money to meet their basic living expenses; and two-thirds were optimistic that they would always be able to drive. About 88% said that a bedroom and bathroom on the main floor would be important to them; three-fourths already have that feature in their home. A garage or covered parking was valued by three-quarters of survey respondents; three-quarters now have that feature at their current address. However, current homes fall short in providing other features that are considered important for aging-in-place:
Other features that enhance living in place — such as handled doorknobs and easier-to-reach outlets and switches — can be added to the home fairly easily, the report suggested. Those surveyed said they want to live in a safe neighborhood, and most do now. But their current homes might not be as close to a hospital, doctors’ offices, grocery store or drug store as they would like. A majority said that would value door-to-door transportation, accessible public transportation, outdoor maintenance services and health monitoring services. Home delivered meals, a personal care service for bathing or dressing and a friendly visitor service were not as highly valued by the survey respondents.
The NAHB Remodelors™ Council, in collaboration with AARP, the NAHB Research Center and the NAHB Seniors Housing Council, has developed the CAPS (Certified Aging-in-Place) designation program for remodelers and other industry professionals to assist the aging-in-place market. For more information on the CAPS, click here, or call 800-368-5242 x8EDU. To view a calendar of the required education courses, click here and search for “CAPS.” Hot Counties for Active Adult Home Buyers IdentifiedSumter County, FL, is the hottest county in the country for recent active adult home buyers, according to NAHB housing policy analysts who sifted through data from the 2000 United States Census. Especially hot for this segment of the housing market were the 21 counties where at least 45% of the 55- to 75-year-old home owners bought their homes between 1995 and the time of the Census. One-third of these are in Florida, with the others spread among several southeastern and western states. While Sumter County, FL, ranks first with a recent-mover active adult share of more than 60%, Collier County, FL, is the largest market on the list. Of its more than 30,000 active adult home owners, 51.4% purchased their homes recently. The top 10 counties are:
The 2000 Census indicated that there were nearly 21 million active adult home owners ages 55-74 in the country. California alone had nearly two million, and four other states — Florida, Texas, New York and Pennsylvania — had at least one million each. Detailed tables — including information on income, with tabulations for renters and home owners and by different age brackets — and information on particular counties are available from the NAHB Seniors Housing Council by calling 800-368-5242 x8220. For additional information, e-mail Paul Emrath, an assistant staff vice president in NAHB’s Housing Policy Department, or call him at 800-368-5242 x8449. '20 Club' Members Advise Builder to Eliminate Surprises, Front Load Selections ProcessWhen Chris Thompson, president of On the Level Inc., a Carver, MN-based design/build custom home builder, wanted to change his selections process so it would run more smoothly, prompt his buyers to make their decisions sooner and be more cost efficient, he turned to his fellow 20 Club Program members for advice. They recommended that he front load as much of the process as possible by having customers complete all selections before trade contractors bid on building their home plans. NAHB’s 20 Clubs are a networking and educational opportunity for builders or remodelers from non-competing markets. Acting almost as each others’ “boards of directors,” the individual members of 20 Clubs meet several times a year to share their wisdom and learn from each other about ways to improve their operations and increase their bottom lines. They share and compare financial information, look for trouble spots and offer each other advice on how to increase their profit ratios and improve their performance. In Thompson’s case, his fellow club members helped him take many of the wrinkles out of his selection process. “We’re trying to get away from the surprises and extras that people might not expect in the home building process,” said Thompson. Before changing the process, On the Level collected a $5,000 deposit from customers. Now, because it puts much more work into the process before construction begins, the company collects a deposit of $25,000. The money is credited towards the purchase price once construction is underway. Thompson keeps the deposit only if a prospect has his plan built by another builder. On the Level retains the copyright and grants one-time rights to use the design. At first, Thompson thought the new process might scare customers away because of the substantial deposit required. “So far, the response has been great,” he said. “People understand and like the idea of knowing what the final price will be up front. There are no allowances at all, if possible. And no surprises, either.” To date, no one has ever balked at paying the deposit. Thompson is realizing other benefits from the selections changes as well. “It makes the pricing more accurate,” he said. “And I think we get better prices from trade contractors and suppliers.” It also cuts down on paperwork, since the new procedures practically eliminate changes in the field. With advice from his 20 Club members, Thompson installed a process in which everybody wins. To learn more about NAHB’s 20 Club Program, click here or contact Cheryl Fortin, director of networking programs, at 800-368-5242 x8110.
NOVA Provides Discounts for Credit Card Transactions NAHB members with credit card processing needs can take advantage of a special program from NOVA, a nationwide processing company that offers discounts on rates, services and fees associated with electronic payment processing. NOVA delivers with speed, reliability and flexibility — and with transaction discount rates as low as 1.64%. For details click here, or for more information, call 800-420-8147. 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. Small Builders and Remodelers Can Be a Part of Something BigBy Mike Weiss, CGR, GMB, CAPS I recently had the opportunity to attend a planning meeting for NAHB, where there were people from all parts of the industry representing companies both big and small. When it came my turn to report on remodeling, I pointed out that, while NAHB represents more than 14,000 remodeling contractors, the Remodelors™ Council doesn’t represent enough of the smaller and start-up remodeling companies even though they are the ones that need us the most. The council represents more remodelers than anyone else, but we aren’t doing what we should to attract more. Of the roughly 60,000 home building members of NAHB, almost one-third say they do a fair amount of remodeling, so we know that they are underrepresented on the council. I believe this is because they don’t really know what the council does, and that is something we are going to fix. NAHB is the place to find the best educational curriculums, professional designation programs, advocacy for housing and remodeling and research into building products and practices. That makes it the best place for the new remodeler, the smaller-market contractor and the small builder. Our message to them is this: If you are not a member of the NAHB Remodelors™ Council, you are leaving a lot on the table. Membership in NAHB and the Remodelors™ Council provides you with opportunities that will enable your business to survive and prosper:
Membership is an investment that continues giving back year after year. There’s a reason why people who are really doing well take time away from their families and their businesses to help their competitors, and that reason is the NAHB Remodelors™ Council. I want remodelers everywhere — including my competition — to understand the costs of doing business, the risks of a poorly visited contract agreement, the danger of ignoring lead and mold in their contract document and the value of endorsing programs such as the Quality Assurance Builders Standards from the Builders Association of Greater Indianapolis. Remodelers who do a top-quality job, who can sell the best and are the most knowledgeable about the business are destined for success. The people with these skills will come from a builders association every time. Your professional life doesn’t really start until you attend your first home builders association meeting. So call your local HBA, and keep in touch with all of the things that are good for your business. Mike Weiss, CGR, GMB, CAPS is chairman of the NAHB Remodelors™ Council.
Professional Designation Courses Offered The NAHB University of Housing offers several professional designation programs for remodelers and builders. For more information about these designations, click here, or call 800-368-5242 x8EDU. Remodelers Groom Design Students for Their Sales TeamRemodelers who have a tough time employing good salespersons and find it difficult to run their business while constantly having to sell new projects to clients, may be interested in the experiences of a design/build remodeling company in Burnsville, MN. Doug and Carol Nelson, owners of New Spaces, have built up their sales force by recruiting interior designers right out of school and training them to be remodeling designers who can sell. “A true designer has all the skills of space planning, lighting and ergonomics and, most importantly, they know how people live in their houses,” says Doug Nelson, CGR, CR. “They only lack the general knowledge of construction and project management, which they pick up during an extensive internship with the company,” he says. The training program started a few years ago while the Nelsons were speaking regularly at the local college, Dakota County Technical. The school suggested that they start an internship program for interior designers who faced middling job prospects after they graduated. The Nelsons found that their interns had such great design and people skills that they started using them as consultants when selling new projects. Three-month internships provided the Nelsons with a pretty good idea of how well a new designer could handle the job. When they showed promise, Doug hired them as assistants for another year, giving them time to enhance their skills and to become comfortable with interacting with everyone from the customer to the plumber. From there, they can go on to commissioned sales positions. Demand has been very high for their internship program, which has since branched out to the University of Minnesota. Remodeling is a male-dominated industry, and this is especially true in sales, but the Nelsons have found that they’ve brought more women into sales with this program than men. In order to streamline the process, Doug is planning to incorporate a profiling test that will help him determine if an applicant would make a good salesperson. “Designers are creative people who can be extremely organized, deal well with money and all that, but some people just aren’t natural salesmen,” he says. In order to be good at sales, says Doug, “the designer needs to have a genuine caring for the client. If the client can see this, the sale is made.” Ease Your Warranty/Home Maintenance Hand-OffSome customers get so used to handholding throughout the sales and construction process that they expect their home builders to take care of them and their houses even after the warranty period expires. “Many people who buy new homes have never owned a home before and don’t know how to take care of it,” says Lucy Katz, vice president of customer service and client relations at Katz Builders in Austin, TX. “You need to stress to them that they’re no longer renting, and that the home is theirs to maintain.” Katz Builders does this with procedures and documents that tell home owners what to expect from their homes and the materials they’re built with. Those upfront efforts make thewarranty/home maintenance transition absolutely painless. And, by promoting proper home maintenance, they protect the home owner’s investment and protect the home builder from lawsuits. Here’s how you can do it, too:
Managing the warranty/home maintenance hand-off with systems and procedures not only streamlines the process; it’s also good for your image. “Many home building companies are small, but you’ve got to recognize that you’re not a mom-and-pop organization,” says Katz. “You need to run your company like a big corporation even if you’re not a big corporation. People respect you when you run an organized business with standardized procedures.” 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.
NAHB’s Business Management Department offers a variety of online resources to help you run your business better and more profitably. Click Business Management Tools for articles about human resources, financial management, sales, production, technology, customer service and other business-related topics. We’re constantly adding more, so check back frequently. BuilderBooks.com offers a variety of publications and resources about business management. To view or purchase these publications and resources online, click here. Subscribe to NAHB’s Business of Building e/Source NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org. University of Housing Offers Courses on Customer Service and Business Management The NAHB University of Housing offers a course on customer service that includes how best to provide warranties for your customers. For a list of current offerings, click here. The University of Housing also offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Conference Call to Examine Outlook for Multifamily HousingA conference call next week will provide insights from a leading analyst of multifamily housing into where the industry is headed at a time of weakening demand. In examining prospects for the multifamily business over the next six months, Ron Witten, president of Witten Advisors, will discuss, among other things, whether the higher vacancy rates and slow absorption rates of this year’s first quarter will persist for the rest of the year. He will also offer his outlook for selected hot markets over the next six months. The conference call, which is scheduled for June 26 at 4:00 p.m. EST, will be the first in the Multifamily Leadership Board Conference Call series. Witten Advisors is a market advisory firm serving apartment developers, investors and lenders nationwide by identifying the location and time of future development and acquisitions opportunities for the nation’s 40 major apartment markets. For specifics on how to join the conference call, or for more information on joining the Multifamily Leadership Board, send an e-mail to NAHB Multifamily. Nexers Are Your Next Generation of Home BuyersBy William E. Becker, MIRM Builders should start learning about the Nexer generation’s preferences and motivations now so they can offer a desirable product, location and amenity package targeted to this market. A Younger, More Vital Self Image Nexers believe they’ll be different from today’s typical active adult lifestyle home buyers — and they’re right. Nexers may be only a few years younger than the 60- to 75-year-old residents of today's active adult communities, but mentally they feel 10 to 15 years younger than their physical age. With their youthful self-image, it is unlikely that the “typical” retirement community lifestyle will appeal to aging baby boomers. Nexers will want to explore resort-style communities where they can relax and do the things they want to do when they want to do them. They’ll be turned off by restrictions of any kind, and they won’t want to feel like they’re hanging out with old people as they age gracefully. They will want to buy where there are neighbors who are compatible with their lifestyles. Nexers don't want the rigid land planning patterns they grew up with during their formative years. They do want their living spaces to fit and reflect their lifestyle. They want to forget about the work they do when they arrive home. They want flexible, open floor plans that provide plenty of light and that relate to their dreams of how they want to live in the future. 'Restriction' Is a Dirty Word It’s relatively easy for builders to get zoning approval for age-restricted communities. Townships frequently want to limit the number of children in new communities to avoid the expense of building new schools. However, builders will find it increasingly difficult to sell age-restricted housing to baby boomers, and will have to figure things out before breaking any ground on housing for Nexers. One possible solution are homes with age-targeted designs that appeal to couples and single people but don't necessarily suit the needs of families with children living at home. These homes will likely feature upscale architectural details, low-maintenance materials and time-saving conveniences. They will come loaded with technology, and will provide enough room for visiting family members. Since Nexers will be working, homes should include high-tech wiring to accommodate office equipment and a passion for electronic gadgets. The general idea will be to offer smaller, state-of-the-art homes that eliminate the hassles of maintaining large homes and lots. Nexers must be reassured that they will be able to enjoy their new homes for the next 20 years. Nexer-targeted homes should be located where buyers can enjoy themselves — near universities, recreation areas and urban centers. Coupling the right product, location and amenities with a strong marketing strategy that appeals to Nexers will draw these buyers and will satisfy townships that prefer older residents for designated communities. Offering a Hook Many advertising and promotional firms will be making a mistake if they run ad campaigns for mature market segments written by young people who don't understand that Nexers don’t see themselves as retirement-aged or elderly. Advertising and sales literature written by Nexers for Nexers will be much more successful. When targeting Nexers, marketers should emphasize the following points:
A Word to the Wise Nexers don’t want to move far from their families. They also want to be able to buy their next home without breaking the bank. Beyond that, builders will have to constantly research their attitudes and preferences. Visiting active adult lifestyle projects in different parts of the country can provide helpful points of comparison for determining the products that meet those preferences. Furthermore, builders need to show buyers that from a resale standpoint, homes in age-restricted communities are every bit as good an investment as other homes on the open market.
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. University of Housing Offers Sales and Marketing Designations The NAHB University of Housing offers designation programs specifically for sales and marketing professionals. For more information on these programs, click here, or call 800-368-5242 x8EDU. HBI Students Help Cancer Victim Repair Home in FloridaStudents from the Home Builders Institute's (HBI) Project CRAFT training program at the Avon Park Youth Academy in Florida recently helped make repairs to the home of Geraldine “Lee” Clayton, who has been waging a personal battle against cancer. For four days, the students worked at the Clayton home replacing fascia and removing an old carport. An integral part of the CRAFT (Community Restitution and Apprenticeship-Focused Training) program, community service projects provide valuable hands-on training for students. Project CRAFT operates at the youth academy in partnership with Florida’s Department of Juvenile Justice to provide training in six trades — carpentry, electrical wiring, landscaping, facilities maintenance, plumbing and masonry. Students receive 840 hours of training in their chosen field, a pre-apprenticeship certificate upon completing the training and job placement assistance. Of those who graduate, 86% are placed in jobs, further education or training. Paul Devlin, president of the Highland County Housing Initiative, organized the makeover of Clayton’s home. Discounted materials were received from Home Depot. “The National Association of Home Builders provides us with connections or provides us with jobs,” Bob Bucy, Project CRAFT vocational skills training coordinator, told the local Highlands Today newspaper. “We use a lot of local builders associations to help place these kids,” said Bucy, who was recently asked to join the board of directors of the Highlands County Housing Initiative. As the workforce development arm of NAHB, HBI offers a variety of programs and resources to help address the labor needs of the association's members. For more information on Project CRAFT’s programs in Florida, e-mail John Hattery at HBI, or call him at 800-368-5242 x8916. Laundry Spaces Transformed Into Hubs of Family ActivityWhirlpool Corporation is transforming traditional home laundry spaces into Family Studios that combine innovative products with a multi-functional space where the family can get a variety of tasks done. The world’s leading manufacturer of home appliances, Whirlpool Corporation is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. Its headquarters is in Benton Harbor, MI. The new Family Studio concept, says Mara Villanueva, brand manager for Whirlpool Innovative Fabric Care, enables home builders, architects and kitchen and bath designers to “distinguish their new properties on the market by creating customized, fabric care rooms that have unlimited potential when it comes to family lifestyle benefits, such as efficiency, organization and convenience.” Available through Whirlpool Corporation’s contract channel, the Family Studio puts everything consumers need to care for their clothes within easy reach, she said, including a state-of-the-art collection of high-quality fabric care appliances that can extend the life and beauty of all types of fabrics. The Family Studio appliance collection includes: The Whirlpool® Duet™ Fabric Care System washer and dryer, Whirlpool® SkinSpa™ Jetted Sink, Whirlpool® Personal Valet™ Clothes Care System, Whirlpool® ImPress™ Ironing Station and Whirlpool® DryAire™ Drying Cabinet. Leaders in California Building Industry RecognizedSeven new honorees are being inducted this week, on June 17th, into the California Building Industry Hall of Fame in recognition of their contributions to the long-term advancement of home building, construction, development, marketing, finance or related services within the state’s building industry. The California Building Industry Foundation is presenting the awards at the start of PCBC The Premier Building Show in San Francisco. The foundation was established in 1978 as the educational and research arm of the California Building Industry Association. Its new mission is to become the leading source of policy research in furtherance of home building in the state. Members of the Hall of Fame Class of 2003 are:
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