Nation's Building News Online: November 10, 2003

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Voters Reject Excessive Regulation in Last Week's Elections

On issues of interest to the nation's housing industry — ranging from ergonomics to smart growth — voters in last week's elections chose sensible policies  over excessive government regulation.

“The Nov. 4 election results demonstrate that voters will respond with common sense judgments when government regulations go too far,” said NAHB President Kent Conine. “Voters understand that excessive regulations do more harm than good, and they delivered that message in important votes all over the country.”

Perhaps the most important decision came in Washington state's I-841 initiative, where voters said “yes” to jobs and “no” to the state’s stringent ergonomics standard, which they repealed.

“Voters obviously are concerned with our state’s economy and the 96,000 jobs that have already been lost,” said Randy Gold, who served as chairman of “Yes on I-841.” “By voting yes on I-841, voters knew they were doing something to help businesses and the economy.”

The ergonomic standard, which would have gone into effect in 2005, was significantly more demanding than its federal OSHA counterpart. It would have required employers to identify jobs likely to cause musculoskeletal disorders and to do whatever is “technologically or economically feasible” to eliminate ergonomic hazards.

Members of the home building industry worked closely with the state’s other pro-business groups to support the initiative.

Smart growth was another issue that emerged from Tuesday's elections with a winning margin.

One critical election took place in Loudoun County, VA, where voters repudiated the actions of a slate of anti-growth county supervisors — elected in 1999 — who passed strict development regulations and downzoned roughly half the county to one home on 10, 20 or 50 acres, depending on where the houses were located.

Six of the nine supervisors who were chosen by Loudoun County voters last week are considered to be pro-housing.

“Growth and transportation issues were foremost in voters' minds, said Louis V. Genuario, Jr., president of the Northern Virginia Building Industry Association. “We look forward to working with our newly elected leaders, who campaigned to provide appropriate solutions, while ensuring that we keep up with Northern Virginia's growing housing needs.”

In Brookhaven, NY, on Long Island, a builder-led effort helped get an initiative on real estate transfer taxes removed from the ballot. Builders also organized a public education campaign that informed voters of the consequences of a transfer tax.

In Novi, MI, voters chose pro-housing candidate Lou Csordas as the city's new mayor.

Building News Coast To Coast

Wealthy Home Owners Not Content With One Home

The Institute for Luxury Home Marketing and Unique Homes magazine have released the results of their joint study on the demographics and real estate-purchasing trends of very well-off Americans. The research showed that the overwhelming majority — 70% — of U.S. households with at least one residence worth $2.5 million or more also owned at least one other personal dwelling. The findings from the online survey of 4,000 such households also revealed, among other things, that most multimillion-dollar home owners live in single-family properties with more than four bedrooms, more than four bathrooms, a home office, a home gym and residential Web hookups.
Inman News Features Online (11/06/03): www.inman.com

Number of Superfund Projects Cleaned Up Drops Third Year in Row

The number of Superfund projects completed per year was as high as 88 during the Clinton era but has been in a slide for the past three years. Only 40 contaminated sites were remediated in 2003 — down from 42 in 2002 and 47 in 2001. Overall, 886 Superfund properties — a little more than half of those targeted for cleanup — have been completed. Marian L. Horinko, acting administrator of the Environmental Protection Agency, reasons that the pace of Superfund cleanups has slowed because the remaining projects are both more complicated and more expensive, allowing fewer to be completed during any single year. Critics, however, blame the Bush Administration for failing to seek reauthorization of a corporate tax to fund a trust fund.
Washington Post (11/05/03) P. A4: www.washingtonpost.com

Construction Spending Hit All-Time Monthly High in September

The Commerce Department reports that construction spending turned in its best September performance on record, with the total value of building projects under development hitting a seasonally adjusted annual rate of $910.6 billion. The tally reflects a gain of 1.3% from the month before, surpassing analysts' consensus estimates of just a 0.4% jump. Spending by private developers on residential projects increased 1.4% during the month to a rate of $471.4 billion — also the highest monthly level since the federal agency started keeping such records. Looking at commercial projects, spending on office buildings, factories and power plants and lodgings were all categories that posted gains in September.
Allentown Morning Call Online (11/04/03) Aversa, Jeannine: www.mcall.com/business/local/all-economynov04.story

Real Estate Remains Foundation of American Dream

The Mortgage Bankers Association's Research Institute for Housing notes that both residential property prices and homeownership rates continue to rise. The economy has helped a greater number of families become owner-occupants in recent years by creating jobs that allow them to save money for the downpayment and monthly mortgage payments, according to MBA Chief Economist Doug Duncan. Low interest rates, innovative loan products and the secondary mortgage market — which fosters competition among lenders and allows them to objectively review borrowers' credit reports — also have driven up homeownership rates. However, the research additionally reveals that poor credit prevents many families from purchasing homes. The study notes that the gap between white and minority homeownership rates remains wide, although the percentage of minority renters setting money aside for home purchases now equals or surpasses the 15%-20% of whites doing the same.

Copley News Service (11/03/03) Woodard, James M.: www.copleynews.com

U.S. Wants Slice of Housing Pie

U.S. and Russian interests expect by the end of the year to assemble a working group on construction, mortgages and housing. While Russia's residential property market is booming, HUD Secretary Mel Martinez says outside cooperation is needed in order to develop home financing and introduce new, inexpensive construction techniques to the country; at the same time, the United States stands to benefit from Russia's success in state-owned housing, which Andrew Somers of the American Chamber of Commerce in Russia identifies as the "least effective" segment of the U.S. property market. The working group will collaborate on such joint projects as high-rise buildings in Moscow and an "American Village" in central Russia as well as a seminar on mortgages planned for February. While Washington is encouraging U.S. firms to get involved in Russia's developing residential property industry and may even earmark $20 million to promote mortgage programs there, George Gaige of Ernst & Young in Moscow speculates that inefficient legislation combined with the lack of credit history and verifiable income sources for most Russians will discourage major American mortgage financiers from jumping into the market in the near future.
Moscow Times (11/04/03) Maternovsky, Denis: www.moscowtimes.ru

For Stand-Up Guys, No Home Is Complete Without One of These

Once almost exclusively an installation in the bathrooms of commercial buildings, the urinal finally is beginning to trickle its way down to the residential sector. While no official data is available, representatives at American Standard Cos. and Kohler Co. — two of the biggest toilet manufacturers — confirm that a trend is in the works. The fixtures are especially popular, according to designers, in homes where young boys live. Additionally, celebrities like rocker Ozzy Osborne and footballer Curtis Martin are showing off their models on television shows. The growing appreciation of private, in-home urinals is being aided in part by the expansion in U.S. homes, which feature ever-bigger bathroom space. While American Standard's Gary Uhl speculates that women balk at the fixtures because they are so "overtly male," the emergence of more and more separate male and female wings within the master bath can temper that debate. In addition to larger house size, urinals also are getting a boost from the refinancing boom — which gave households extra cash to undertake improvement projects, including adding urinals. Proponents say that installing urinals allows home owners to save water and also to introduce plush carpeting to bathrooms; and while water pressure can complicate matters in existing homes, putting in a urinal generally is a fairly inexpensive and simple job for a do-it-yourselfer.
Wall Street Journal (11/03/03) P. A1; Morse, Dan: www.wsj.com

High-Density Development Good for Cities

Panelists at the Urban Land Institute's recent meeting in San Francisco agreed that high-density development is necessary to curb sprawl, improve the quality of life in the urban core and strengthen the economy. Brookings Institution Center on Urban and Metropolitan Urban Policy Deputy Director Amy Liu says companies want skilled workers; and these workers desire the lifestyles offered by San Francisco, Seattle and other dense cities. Nevertheless, Liu notes that suburban growth continues to outpace that of downtown areas; and jobs continue to move away from the city center. According to Governors Island Preservation and Education Corp. President James Lima, "Central cities are key to the future of the nation. To be competitive in our central cities, we have to create quality-of-life environments."
Inman News Features Online (11/04/03) Barrios, Jennifer: www.inman.com

Smart Growth Beyond the 'Burbs

With demand for homes increasing with each consecutive year, developers are realizing the need to shift some of the current focus on infill projects toward greenfields. While it will be instrumental in future growth, land development consultant Donald Priest notes that infill is limited in its reach and that the pace of development in this niche will fall short of market demand in some cities. Speaking at the Urban Land Institute's fall meeting in San Francisco recently, Priest asserted that "equal or greater attention must be given to accommodating the majority of growth in greenfield locations." ULI itself has dubbed greenfield development as the "third leg" of smart growth, with renewal of core-city housing markets as the first line of defense and restructured close-in suburbs as the second.
Inman News Features Online (11/03/03) Swesey, Jessica: www.inman.com

Wood, Tile Top the List for Floors

Wood — which conveys a warm, natural look — and ceramic tile — which can lay an attractive path from foyer to kitchen — are favorite flooring options for buyers of new homes. When deciding which is best for them, customers should keep in mind that wood not only provides a rich and seamless look, but it also is easier to stand on than other flooring choices. Additionally, it can be stained to match any color, allowing home owners to coordinate with cabinetry or furnishings. The biggest drawback, however, is the required maintenance for wood — which is more easily scratched and affected by spills and also can be damaged by water. To the contrary, ceramic tiles are hard, durable and extremely low-maintenance. The only requirements are washing regularly and regrouting about every 10 years. Ceramic tile is priced similarly to wood flooring and also allows home owners to match up furniture and design elements through a wide range of patterns, colors and sizes. However, unlike wood — which can be refinished to remedy years of wear — chips or cracks in tiles require the entire damaged piece to be replaced.
Chicago Tribune (11/01/03) Beatty, Allison E.: www.chicagotribune.com

Paying the Way With Property

With sales and sin taxes already high in many locales, Patuxent Consulting Group Vice President Ellen Marshall believes cash-strapped state and local governments increasingly will hike property taxes, impact fees on new homes and taxes on real estate and mortgage brokerage services. Officials in California, New Jersey, Virginia, South Florida and Raleigh, NC, have already done so. According to Trammel Crow National Managing Partner J. Ronald Terwilliger and other experts, higher taxes and fees will boost residential property prices and make it difficult for developers to take on affordable multifamily projects. However, Terwilliger also believes that strong economic growth and the creation of new jobs could drive up revenues and take the pressure off the property sector.
CBSMarketWatch.com Online (10/31/03) Kerch, Steve: cbs.marketwatch.com

Personal Space: More Builders Allow Customers to Modify Floor Plans

Builders typically do not allow home buyers to design their residence from the ground up because of the time and costs involved and the need to comply with construction codes; however, many do allow them to alter standard floor plans so that a dwelling meets their individual needs. As a result, many buyers turn dens into bedrooms, add extra rooms, convert bedrooms into studies or get rid of a room to make another space bigger. The desire for larger garages, meanwhile, has forced builders to creatively maximize space. According to Florida-based builder Lee Wetherington, all buyers modify the conventional home plans "because they want to make it their own home with their own individual style." However, Wetherington urges them to keep the home's resale value in mind when making changes.
Bradenton Herald (11/02/03) P. 1; Westbrook, Jesse: www.bradenton.com

There's No Need for Cold Feet Over Energy Efficiency

With the electric radiant heating system recently rolled out by the Canadian firm Nuheat, home owners can wake up to warm floors during the winter months. The system is installed underneath the ceramic tile or natural stone floor; but unlike the typical hydronic radiant heating systems that use hot water to heat both the air and the floors, Nuheat uses electricity to warm only the floor. This facilitates installation and reduces the cost of the system itself to just $500 to $750 for the average-sized bathroom. The wires are embedded in a thin nylon and polyester mat and coated with waterproof Teflon. For added protection, the mat, programmable thermostat and wall-mounted controls are designed to shut off if the system comes into contact with water.
Chicago Tribune (11/01/03) P. 13; Hunt, Don; Edwards, Brian: www.chicagotribune.com

Old-School Agents Fuel Demand for MLS Books

Despite Web technology that gives real estate agents instant access to property listings, often through visual and interactive presentations, some practitioners remain loyal to the paper-based compilations. For instance, Mark Brown of Fidelity National Information Systems — one of the industry's top producers of listing and management tools — says that nearly 90 agents still request the paperback Multiple Listing Service (MLS) book that it prints each week for the Olathe, KS, market. Older agents often prefer the book over online Internet listings, according to Norwalk, CT-based Consolidated Multiple Listing Service President and CEO Don Hull, because of their hesitance to embrace new technology. Younger agents, however, have much computer experience and more easily adapt to such changes. Boise, ID-based Rocky Mountain MLS Executive Director Amy Geddes, meanwhile, believes smart phones complete with telephones, lockbox keys, Web browsers, e-mail capabilities and listings could help veteran agents better cope and improve productivity.
Inman News Features Online-- (11/05/03) Kelly, Tom: www.inman.com

More Mobile Staff, Greater Productivity

Mobile technologies are increasing workplace productivity. The IT consultancies Gartner and Meta Group each estimate that within five years, three-fourths of sales and service professionals in developed countries will employ such technologies. Other forecasters say a large hike in spending on mobile infrastructures, including wireless technologies, will occur. Fujitsu Consulting Director Matt Roderick thinks that mobile working is becoming unavoidable, especially in the United Kingdom, where employees work the most hours in Europe and spend the most time commuting to a workplace. Right now, however, mobile working's fast growth also poses challenges, including choosing the best suited mobile product from the quickly broadening selection and best program from a multitude of wireless technologies and networks. While certain industry experts believe that mobile workers will eventually move towards one multi-function device, others think that users will keep sporting several devices that are each optimized for a single mobile-working aspect. "In the short term at least, the likelihood is that users will select the appropriate access device and network for the task at hand," theorizes Benjamin Ellis of the California-based networking technology firm Juniper Networks.
Financial Times (10/29/03) P. 4; Taylor, Paul: www.ft.com

First National Aging in Place Week Focusing on Home Modifications

In an effort to encourage seniors, recent retirees and baby boomers to consider modifying their homes to make them safe and comfortable, the National Reverse Mortgage Lenders Association (NRMLA) and the National Advisory Council on Aging in Place have designated Nov. 9-15 as the first National Aging in Place Week.

"Most seniors express a strong desire to remain in their homes but believe they cannot for a variety of reasons," said Peter Bell, president of NRMLA.

Bell added that he hopes National Aging in Place Week will provide older households with “ideas and information to help them make informed, confident decisions about where they should spend their retirement."

As part of the week’s activities, members of the Advisory Council — which includes the NAHB Remodelors™ Council, the NAHB Research Center and NAHB Seniors Housing Council — are hosting events across the country to showcase homes that have successfully been modified; to publicize the benefits of remodeling; and to conduct professional workshops. (For a story in this week’s issue on what the NAHB Research Center is doing, click here.)

Many of these events — which are taking place in Washington, D.C.; Seattle; Los Angeles; Minneapolis; Boston; Buffalo, NY ; and Charleston, SC., and elsewhere — are free and open to the public.

"We timed Aging In Place Week to encourage families to start thinking about this topic just before they get together for holiday visits,” Bell said. “As families gather to celebrate the holidays, it's a perfect time for everyone to discuss livability issues.”

The National Reverse Mortgage Lenders Association and the Advisory Council have also developed a free consumer booklet and two new Web sites — www.seniorsafehome.com and www.ageinplace.org — which provide information on design ideas, useful products and professionals who can help home owners plan and implement home modifications. (Click here for a related story in this issue.)

Acting as an advisor to NRMLA, the Advisory Council's primary objective is to increase awareness of how existing homes can be adapted by households who have made aging in place a long-term, personal objective. This includes changes that can make it easier to perform such routine activities as bathing, cooking and climbing stairs, as well as alterations to the physical structure of a home to improve its overall safety and condition.

A second, and equally important, objective is to build a lasting coalition and referral network of business professionals in communities who will be able to help families meet their home modification needs. These professionals include architects, remodelers, builders, reverse mortgage lenders, occupational therapists, care managers and others.

Housing Snapshot

The news last week on the employment front was what economists have been waiting a long time to hear: 126,000 jobs were added in October, bringing the unemployment rate down to 6%, and 160,000 jobs were created in the three-month period beginning in August. Fixed-rate home mortgages edged up just a tad, but remained below 6%. Framing lumber rose to $327 per 1,000 board feet, up from $321 during the prior week, according to Random Lengths. OSB mill prices remained stuck at $465 per 1,000 square feet, compared to $160 a year earlier; and 15/32-inch 3-ply CDX Southern Westside plywood fell from $520 the previous week to $505. NAHB economists expect prices for both Oriented Strand Board and plywood to continue to decline from the peaks they reached earlier this fall, but the descent so far has been slow, especially for the former.

Mortgage Interest Rates

30 Year Fixed Rate: 5.98\%
15 Year Fixed Rate: 5.31\%
1 Year ARM: 3.73\%

Housing Starts: Sep. 2003

Total: 1.89 million\%
Single Family: 1.52 million\%
Multi Family: 368,000\%

New Home Sales: Sep. 2003 *

1.145 million

Existing Home Sales: Sep. 2003 *

6.69 million

* Seasonally Adjusted Annual Rate

Ongoing Immigration Influx Adding to Housing Demand

The substantial influx of immigrants into this country over the next 10 years will help support demand for both rental and for-sale housing, NAHB economist Michael Carliner told the association’s Construction Forecast Conference last month in Washington, D.C.

The number of immigrants coming into the U.S. during the 1990s surpassed the expectations of the Census Bureau. Questions were raised about the sustainability of the strong influx of foreigners coming to the U.S. in the aftermath of the Sept. 11 terrorist attacks and the possibility of more restrictive immigration policies, but the trend appears to be continuing unabated.

Economists at NAHB watch immigration carefully because it is a significant factor in determining the increases in households that in turn affect housing demand.

“Immigrants typically provide an initial stimulus to rental markets for their first few years in the U.S.,” said Carliner. “After becoming established in the U.S., they become a major factor in the for-sale marketplace."

Since the 2000 Census, he said, “it appears that immigration has accelerated, with a net of about 1.5 million new immigrants coming to this country annually since the beginning of this decade.”

Looking forward, NAHB forecasts a net annual average flow of up to 1.7 million foreign-born people between 2002 and 2012. The rising pace of baby boomer retirements in the period ahead is likely to increase the demand for workers, which will add to the economic and political forces supporting immigration.

Because of the demographic changes projected for the next decade, construction for single-family homes is expected to be even stronger than it was in the 1990s.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts.

Eye on the Economy

David F. Seiders, NAHB Chief Economist
Economic growth accelerates in the third quarter amidst another surge in productivity growth …

Growth of real Gross Domestic Product (GDP) accelerated to a 7.2% pace (annual rate) in the third quarter, the fastest expansion in nearly 20 years. Incredibly, this rapid growth in output reflected acceleration of productivity growth (output per hour) to about 8%, as payroll employment eroded further. Thus, the specter of a job-losing economic recovery that began around the end of 2001 continues to haunt the economic and political scene.

How long can this go on? It’s perfectly clear that the tremendous monetary stimulus delivered by the Federal Reserve, along with the tremendous fiscal stimulus delivered by the recently enacted tax-cut legislation and the acceleration of federal spending on defense and security, have successfully propelled spending by households and businesses as well as by the government. But, so far, the pickup in business spending has been concentrated in investment in capital equipment and software (productivity enhancing outlays) rather than in hiring.

Happily, there have been recent signs of stabilization, and tentative signs of revival, in the U.S. labor markets. The employment report for October showed an encouraging increase in payroll employment, and weekly data on claims for unemployment compensation have been looking somewhat better for some time. NAHB’s forecasts show healthy and sustained job growth starting late this year, even as GDP growth recedes to a more-sustainable pace. It must be admitted, of course, that the dimensions of the productivity phenomenon are extremely hard to peg.

Consumer confidence moves up in October as the job market shows signs of life …

Consumer confidence (Conference Board series) picked up in October, and the University of Michigan’s measure of consumer sentiment showed a similar pattern. Even so, these indicators hardly reflected the exuberance of consumer spending in the third-quarter GDP accounts. Instead, the improvements in confidence/sentiment reflected the beginnings of improvement in the job market.

Federal Reserve Chairman Alan Greenspan frequently stresses that what consumers do is much more important than what they say. Consumers are now spending aggressively, and history suggests that the confidence/sentiment measures will rise much more decisively as the economic expansion pulls the job market forward.

The Fed holds short-term rates steady and reassures the bond markets …

The Federal Reserve held its target for the federal funds rate steady (at 1%) at the Oct. 28 meeting of the Federal Open Market Committee (FOMC), a decision that was expected by virtually all observers of the monetary policy scene. Furthermore, the decision was unanimous, showing a refreshing lack of defectors on Greenspan’s FOMC despite the presence of a few traditional anti-inflation "hawks" on the committee.

Prior to the October FOMC meeting, some concerns had been building in securities markets about the durability of the Fed’s previously announced commitment to an extended period of monetary stability, in view of the obvious third-quarter surge in economic growth and the glimmers of improvement in the job market since the previous meeting. But the Fed put out a market-friendly public statement on Oct. 28 that differed from the previous statement in only one respect — an assessment that the job market is "stabilizing" rather than "weakening." Most important, the Fed maintained a risk statement slanted toward weakness (because of ongoing concern about potential price deflation) and stood by its belief that "policy accommodation can be maintained for a considerable period."

The Fed’s words and actions on Oct. 28 provoked an immediate "relief rally" in the bond and mortgage securities markets and reinforced expectations for an extended period of monetary stability. NAHB’s forecasts still show a 1% federal funds rate until late next year, with only a modest rise in long-term rates before then.

Home sales surge to new records in the third quarter as 2003 heads toward uncharted territory …

Sales of both new and existing homes were robust in September, hitting a combined annual rate of 7.835 million units — easily a record pace. Indeed, the third quarter as a whole also was an all-time high for both segments of the market, easily surpassing the previous record that was set in the second quarter of this year. It’s no wonder that the housing production component of GDP, which includes commissions on home sales, surged to a 20% growth rate in the third quarter.

The third-quarter surge in home sales may have included a temporary boost, as some "fence sitters" may have jumped into the market after mortgage interest rates bounced off their cyclical lows in June. But surveys of single-family builders and mortgage lenders (conducted by NAHB and the Mortgage Bankers Association, respectively) show ongoing strength in home buyer demand through October. While some near-term fade in sales seems likely from the astounding third-quarter pace, there’s little doubt that 2003 will turn out to be a record year for home sales in the U.S.

The homeownership rate hits a new record while rental vacancy rates continue to climb …

The U.S. homeownership rate hit a record 68.4% in the third quarter, as the number of owner-occupied housing units surged to 72.2 million. As usual, the homeownership rate was highest for non-Hispanic white households (75.7%) and lowest for Hispanic/Latino households (46.1%). Various racial and ethnic homeownership "gaps" actually have widened as the rate for whites has increased aggressively.

Surging home sales and rising homeownership continue to weaken conditions in the rental housing market. The overall rental vacancy rate climbed to a record 9.9% in the third quarter, and the rate for buildings with five or more units rose to a near-record 11.5%. Indeed, the drain of households from renting to ownership has been reducing the absolute number of renters despite healthy levels of household formation. No wonder landlords across the country are offering rent concessions and other incentives to retain and attract renters.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Nov. 5 edition. To subcribe to “Eye on the Economy,” click here.

Want more economic information? Find it in our publications.

Find more in-depth information in our three economics publications, Home Builders Forecast, Housing Market Statistics and Housing Economics. All are availaible by subscription. 

• Home Builders Forecast includes analysis of single-family and multifamily residential activities, residential remodeling and the full range of nonresidential construction as well as the macroeconomic factors such as GDP, employment and interest rates that drive construction. If your business depends on reliable estimates of housing starts, construction spending and remodeling activity, Home Builders Forecast is designed to meet your needs.
• Housing Market Statistics contains an overview of important developments and trends that serves as an executive summary of the current industry situation. It also contains annotated charts depicting movements in key indicators and tables providing monthly, quarterly and annual data for more than 250 variables.
• Housing Economics provides a rigorous monthly overview of the economy, along with monthly data for more than 100 local markets and in-depth analyses of the niches and nuances of home building markets. Available online or in print, it is written in terms that builders, manufacturers and housing finance professionals can understand and apply to their own businesses.

To learn more or to order any of these three NAHB economic publications, visit the Economics Publications Information section of the NAHB Web site or call 800-223-2665.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts.

Immigration Favorable for Demand for Rental Apartments

Low interest rates have hurt the multifamily housing industry by drawing away renters who are finding that with lower-cost financing they can now afford to become home owners, but those lower rates are providing some benefits for the industry as well, according to NAHB President Kent Conine.

In remarks earlier this month to the M/PF Research Texas Apartment Markets Conference in Dallas, Conine added that demand for apartments will start picking up as the economy begins generating more jobs and that immigration will be a significant plus in certain multifamily markets.

Currently low interest rates “are fueling the for-sale condo market,” he said, “and they’re making it more affordable for us to finance construction of new apartments.”

Observing that apartment production has remained “very solid” this year despite weakening demand, Conine said that, “We apartment builders are basically looking across the divide to the time when mortgage rates float back up and the job market starts showing more strength.”

The long-term outlook for apartments is also being bolstered by immigration, and Conine made several observations about this factor:

• Most immigrants who arrive in the U.S. are between the ages of 15 and 34, which are prime years for renter households.
• In some metro areas, households who have moved to the U.S. within the past eight years account for one-fifth of the multifamily rental market.
• In San Jose, more than 26% of the rental market is comprised of recent immigrants; that share in Dallas and Houston is about 14%.

NAHB is forecasting about 341,000 multifamily starts this year, down slightly from 2002. Declines on the market-rate rental side of the industry should produce some softening in production next year, he said, when starts are projected to total 320,000 units.

Market-rate units make up about half of the industry’s output; the remaining half of production is split fairly evenly between condos and subsidized units.

2004 NAHB Multifamily Pillars of the Industry Conference & Awards Gala

Plan to attend the Multifamily Pillars of the Industry Conference and Awards Gala, the premier educational and networking event of the year for the multifamily industry, in Palm Springs, CA, March 28-30. Explore both the current and future state of the multifamily industry. Click here for more information.

NAHB Multifamily Offers Three Multifamily Designations

NAHB Multifamily offers two designations for property management professionals. The Registered in Apartment Management (RAM) designation and the Advanced RAM designation provide superior training in the field. NAHB Multifamily also offers the Certified Leasing Professional (CLP) designation for those interested in sharpening their multifamily leasing and sales skills. Click here for more information.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts.

Improved Business Systems Yield Increased Productivity, Profitability

When Gary, Dave and Dan Stebnitz bought Stebnitz Builders from their father in 1986, the Delavan, WI-based custom home building and remodeling company did about $250,000 in annual volume. Seventeen years and two divisions later, the company's annual gross is $4.5 million.

What enabled the Stebnitz brothers to achieve that growth? Top-notch systems and procedures. After buying the business, the brothers parceled out ownership responsibilities among themselves so each could concentrate on a different area of operations. Gary heads up sales, and Dan and Dave handle production and administration, respectively.

Each then developed painstaking procedures for his part of the business, yet saw to it that none of their systems — or employees — would be working in a vacuum. The systems are integrated and many of the operations are predictable and repeatable. Not surprisingly, the company is profitable, productive and well known in its market.

“Operationally, a well-systematized business has repeatable and predictable processes," says Ed Caldeira, president of Caldeira Quality, a Crofton, MD-based consulting company to the construction industry. “These businesses pay less to produce the same output, so they make more money.”

Additional benefits of running a well-ordered business, include:

• Higher profit margins
• Constant awareness of financial status
• Regular work hours
• Strong framework for growth and expansion
• Easy transitions for personnel changes
• Consistent, high-quality products and services
• Projects delivered on budget and on schedule
• Happy customers

How to Fine Tune Your Business Systems

Whether you’re developing new processes or improving existing ones, contractors and industry consultants agree that you should do it systematically. Follow these how-to’s for effective systems building:

Systems Development

• Develop systems in one area of your business at a time. “You can’t tackle everything all at once, or you’ll get discouraged,” says Victoria Downing, vice president of Remodelers Advantage in Fulton, MD.
• Get employees involved in developing systems. “When our employees help create systems, they’re much more into following them,” says David Bryan, president of Blackdog Builders in Salem, NH.
• Have employees write down all the steps they use to accomplish a task. Then look for ways to streamline those steps.
• Look for inconsistencies or irregularities from one employee’s process to another’s. If they’re both doing similar tasks but one does the work more efficiently, see what you can learn from that employee’s process and work habits.
• Standardize the process. “Write down steps for completing a process in an ideal situation,” says Bob Kovacs, a former home builder who runs Constructive Solutions, an Iselin, NJ-based consulting company. “Then implement those written steps as a new ‘system’ for performing that task.”
• Test the new system. See how it works for the next couple of days, weeks or months.
• Use consultants. If you don’t have the time to develop systems with your staff, hire industry consultants or experts to do it for you. If you go this route, it’s best to use a consultant familiar with the home building industry.

Systems Improvement

• Monitor your systems regularly. If you devise an estimating system, for example, how accurate are your estimates? “I always keep my original budget that produced the price I quoted on a project, and then compare it to the final job costs to see how the estimated costs stack up against the actual ones,” says Allan Edwards, president of Allan Edwards Builder, in Houston.
• Analyze discrepancies. If a system isn’t producing desired results, evaluate each step and adjust accordingly. You may need to start over and develop a completely new system.
• Solicit input. Ask employees, trade contractors and customers what they would do to improve one of your systems or processes. At Blackdog Builders, Bryan discourages his employees from complaining about something unless they also bring him a solution. “More often than not it results in a new or improved system,” he says.

This information is excerpted from "All Systems Go: Putting Order in Your Business." The 32-page booklet points out how home builders and remodelers can benefit from good business systems and covers the basics of systems development. It also provides tips for bringing a systems approach to business planning, hiring, scheduling, managing selections, shortening punch lists and handling warranty work.

"All Systems Go" is available free of charge from NAHB’s Business Management Department. Call 800-368-5242 x8388 or e-mail the Business Managment Department to order your copy.

KB Home First Big Builder to Adopt Housing Quality Program Nationally

KB Home is adopting innovative quality assurance practices that were developed by the NAHB Research Center's  National Housing Quality (NHQ) Program, it was announced earlier this month, making the company the country’s first big builder to do so.

Based on the principles of the ISO 9000 quality management system but tailored to the specific needs of the home building industry, the NAHB Research Center’s NHQ Certified Trade Contractor Program is designed to train and certify all trades involved in the home building process — from the foundation to the roof.

The rigorous certification process emphasizes efficiency, accountability and communication on the job site.

“Quality has always been a top priority at KB Home, and we are constantly looking for new ways to deliver the best possible product to our customer,” said Bruce Karatz, chairman and chief executive officer of KB Home.

“All of our operating divisions have quality assurance programs in place, but this comprehensive new program will ensure that every trade contractor in every market meets the same tough requirements set by the NAHB Research Center at a national level. This consistency in quality and process will be a tremendous advantage as we continue to aggressively expand our operations across the country.”

To become certified, contractors must complete 15 hours of classroom training; create a customized quality assurance program and manual; undergo random site evaluations; and participate in an annual audit in which they must demonstrate ongoing improvement in the quality of their work. Contractors are re-certified every year.

Companies are eligible for a certification audit once they have developed their own quality assurance plan, with guidance from the NAHB Research Center, and have implemented it for a minimum of three months.

In adopting the program throughout its operations nationwide, KB Home will eventually require all of its trades to become certified through the NAHB Research Center in order to continue doing work for the company.

KB Homes began its participation in the program with a successful pilot in its Las Vegas division.

The company is expanding the program this month throughout its Southern California operations, which will be followed by Texas next month; New Mexico, Colorado, Arizona and Northern California in January and February; and its Southeast operations after that.

For more information on the NHQ Program, e-mail Dean Potter, director of quality programs at the NAHB Research Center, or call him at 800-638-8556 x6267.

The University of Housing Offers Course in Quality Construction

The NAHB University of Housing offers a course on Quality Construction. Click here for to search for current offerings. Keyword search: “energy.”

For designation programs that will help you improve your business, click here.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

New Technologies Can Reduce Residential Energy Consumption

New Technologies Can Reduce Residential Energy Consumption

Taking mainstream homes off the utility grid may not be entirely feasible with current technology, but consumers can start taking steps toward energy independence by lowering their demand for energy and pursuing renewable resources, Joe Wiehagen, senior energy engineer at the NAHB Research Center, said in a recent interview appearing in the fall issue of ToolBase News.

This summer’s blackout in the Northeast has renewed public concerns over the reliability of the energy supply, and off-grid homes have been built for years, but “the key to success in the energy independent home has always been in reducing demand for energy,” said Wiehagen.

“To have an off-grid home,” said Wiehagen, “consumers need a large battery bank that requires recharging or a generator that can run continuously — both unattractive options with current technologies.”

Most new homes must be connected to the grid, he said, “because they use 10 to 20 kilowatt hours per day just for running lights, appliances and anything else that is plugged into an outlet. Add heating, cooling and hot water, and the energy requirements are very high.”

Areas where gains in residential energy conservation are possible, Wiehagen indicated, include:

• Solar hot water systems that can meet water heating energy needs for most of the year. Field evaluations by the Partnership for Advancing Technology in Housing (PATH) in San Diego and Tucson demonstrate how these systems can be used successfully.

The Tucson Zero Energy Home also used solar hot water for space heating. Solar electric (photovoltaic) or wind systems are cited as other sources for meeting residential electrical requirements. These systems, says Wiehagen, can meet 20%-50% of a home’s electrical needs, but the home would still need to be connected to the grid.

• In new construction and remodeling, “by using energy-efficient windows, modestly increasing wall insulation levels, focusing on air sealing, addressing HVAC issues and using fluorescent lighting, many homes will use one-half to two-thirds of the energy of typical homes.”
  
  
• Low-e, gas-filled windows are the most energy-efficient and are suitable for any climate, according to Wiehagen. Generally, windows should have a U-value of 0.35 or less, but in climates requiring more cooling the solar heat gain coefficient should be 0.40, he said.
  
  
• Sealing the building shell can minimize heat and cooling losses, and it does not need to be expensive, but it does require attention to detail. “Builders and contractors should seal gaps between the top and bottom plates and around windows and doors and utility penetrations through floors, ceilings and walls,” he said.
  
  
• Compact fluorescent lighting is the “clear winner on energy savings,”
  Wiehagen said, because it uses about one-quarter as much energy as incandescent bulbs.
  
  
• Newer energy-efficient foundation technologies worth investigating include panelized systems, insulated concrete forms and frost-protected shallow foundations, he said.
  
  
• Insulation methods and materials for walls include many types of blown and foamed insulating products, high-density batts, rigid insulating boards and lightweight concrete. “Some insulating systems seem complicated until the learning curve is surmounted,” he added.

For more information on foundation types, insulation materials and practices and hot water heaters, visit the ToolBase Services technical Web site by clicking here.

For further information on energy efficiency, e-mail experts at the ToolBase Hotline or call 800-898-2842.

There Are Five Easy Ways to Integrate Aging-in-Place Into New Home Construction

Incorporating design features into a new home that allows for aging-in-place is not complex, difficult or expensive.

These features do not require special trades or unusual techniques. And while a few products must be specially ordered, the majority are everyday items that simply need to be installed differently.

The following are five basic concepts for installing aging-in-place features that are easy to understand and generally require little or no additional costs to implement:

1.	No-step entries

These can be accomplished economically and efficiently when setting grade.

• Use slab on grade construction. Recess the doorsill to avoid a bump. Install a drain or cover that’s positioned to keep rain or snow from entering the home.
• Include an outer block course to isolate wood framing from earth.
• Have the garage slabs sloping away from the doorway so spills run out of the garage.

2.	Better located and easy-to-use controls and handles

• Raise electrical outlet locations so residents don’t have to pull electrical cords if they have difficultly bending their knees, waist or elbows.
• Install Dacora-type switches, which are easier to use for arthritic (and full) hands. The switches should be located less than 40 inches above the floor so residents with sore shoulders and elbows can easily use them.
• Make sure HVAC controls have large numerals so they are easy to read. The controls also should be intuitive to operate and installed in a low, easily accessible location, like switches.
• Install lever door handles and D-shaped cabinet handles. These are easier to use for people with stiff fingers.

3.	Bathrooms that support independent use and easy caregiving

• Allow for extra maneuvering space so devices like walkers, crutches and wheelchairs can be used. This also makes it more convenient for the caregiver when assisting the resident.
• Include a seated option for using the sink.
• Install grab bar blocking. Even better, install ¾-inch plywood wall liners too, for additional bars and locations. Don’t install towel bars in bathrooms, however. Grab bars can be used as towel bars, but the opposite is not true.
• Tubs are not necessarily taboo. They can be used safely with grab bars, seats, a handheld shower and ergonomic training.
• Consider installing a curbless shower with flexible water dam. If there’s a tub in your plans, another possibility is to install a floor drain outside the tub. With a handheld shower, residents then have the option of a tub or a curbless shower.

4.	More maneuvering space throughout the home

• Expand the hallway width and turning spaces. Doorways need to have a minimum clearance of two feet, eight inches. As a point of reference, think about how difficult it is to maneuver a car from a narrow alley into a narrow garage. That will give you a sense of some of the maneuvering challenges people with mobility aids face.
• Include more space in the kitchen.
• Put a full bath and bedroom on the main floor (second floors and basements may not always be used by every resident).

5.	More lighting throughout the home

• Include task lighting for reading, cooking, makeup, shaving, etc.
• Include more general lighting sources. Also, multiple controls reduce the need to cross the room to turn lights on or off. Dimmers help avoid glare and ensure proper lighting for each situation.
• Offer soft lighting for night trips to the bathroom.

A key to successfully installing aging-in-place features is to maintain proper communication among everyone involved to ensure appropriate follow-through from concept to concrete, tile and wood.

Another is proper advanced planning so you are fully prepared. Implementing aging-in-place features can be problematic if you are not. Field personnel sometimes revert to standard procedures when they do not fully understand the changes being implemented or the reasons behind them. Keep them informed and trained so you can avoid expensive problems. You’ll also avoid bizarre or unattractive solutions that can result when field personnel encounter difficulties installing aging-in-place features and try to jury-rig their own solutions.

Installing aging-in-place features is not rocket science. With proper planning and forethought, it can be accomplished efficiently and effectively. Aging-in-place features also gives builders who want to differentiate their product and serve their client’s true interests with these modest changes a chance to move ahead of the competition.

Louis Tenenbaum is a Potomac, MD-based Independent Living Strategist, consultant, trainer and speaker who specializes in aging-in-place and universal design. He also is a member of the NAHB Seniors Housing Council. Tenenbaum can be reached at 301-983-0131 or via e-mail. Information also is available on his Web site at www.louistenenbaum.com.

Learn More About Seniors Housing Through the Seniors Housing Council

To learn more about seniors housing or boomers, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292.

BuilderBooks.com Has Publications About Seniors Housing

BuilderBooks.com offers a variety of publications about the seniors housing market. To view or purchase these publications, click here and type “seniors” in the search engine.

2004 Seniors Housing Symposium

To learn more about the seniors housing market, plan to attend the 2004 Seniors Housing Symposium, Building for Boomers & Beyond in Chicago from April 14-16. The symposium will focus on the lifestyle component of 50+ seniors housing.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

Reducing Overhead Can See Businesses Through Lean Times

In a presentation on survival techniques for lean times at last month’s Remodelers’ Show in Baltimore, Alan Hanbury Jr., CGR, CAPS pointed small businesses to areas where they can find opportunities to reduce their overhead and realize savings worth pursuing in good times and bad.

“There are lots of areas that we have in ‘fixed’ overhead that are anything but,” said Hanbury. “Some portion is fixed and some is variable, some is required, some is merely helpful, some is cutting edge, some we overpay for.”

Areas where economizing measures may be possible, according to Hanbury, include the following:

• Insurance. Agents may be able to suggest ways to cut premiums. On health insurance, consider reducing co-insurance percentages from 80% to 70% or go to an HMO where there is no co-insurance. To combat rising costs — 18% for his entire group in one year — Hanbury now pays for the least expensive plan and allows his employees to choose more comprehensive coverage if they are willing to pay the difference. If you don’t have enough employees to get a group rate, he recommends joining up with a larger association that has more bargaining power.

When it comes to workers' comp, “there are very few ways to win the game,” says Hanbury. However, he says that, “The best way to reduce premiums is to allocate the hours and dollars that your workers put on time cards into the insurance company’s rate categories. Some rates can go as high as $48 per $100 in wages for roofing and as little as $6.90 per $100 for a supervisor. If you can justify the breakdown, you will be audited on actual use and not an estimate or a lumping,” he said.

“You will need to get the classification codes from your insurance salesman or agent so that individuals can log the hours to the different types of work to take advantage of the lower rates,” he said. “Otherwise, the company will dump all of your wages or salaries into the largest category and it’s usually the most expensive per hundred.”

Hanbury estimates that savings can be as high as $10-$15 per $100 of wages, which would normally be $1,000-$3,000 per employee.

When the auditor comes, Hanbury has a spreadsheet showing exactly what work people did, and investing in a computer program to provide those records pays for itself, he advised.

There are a few states that do not allow this approach, he added.

Other approaches to reducing disability insurance costs: pay for smaller claims, such as a tetanus shot, out of pocket; have a good job site safety policy in place, which can reduce premiums by about 5%; and obtain certificates of insurance from all subcontractors showing coverage for worker’s comp and liability.

For subs who claim to have no employees, but seem to have workers on your jobs, Hanbury recommends making them retain minimum coverage workers' comp policies, which are usually as inexpensive as $700 and act as a firewall in case one of the “subs of a sub” is later considered an employee.

• Disability. “Use dividends to reduce premiums,” he says. “Extend the initial waiting period on existing policies to 60, 90 or even 180 days if you have decent personal savings. And lose weight, quit smoking and reduce new premiums that way.”
  
  
• Truck and Auto. Increase deductibles and drop collision insurance on vehicles that are more than six years old or worth less than $2,000. And “don’t allow employees with bad driving records to drive your vehicles.”
  
  
• Phone/Communication. Shop around for the best phone service. Your current provider may become more flexible when you tell them that you are going to switch to another company. Drop your answering service and switch over to an answering machine or voice mail.
  
  
• Utilities. “Treat your office building just like a customer’s house,” says Hanbury: “wrap the water heater, turn off the extra fridge, weather-strip and add sweeps to the doors, insulate access doors, add storms, etc.” Install a set-back thermostat for the office/warehouse, install lower wattage light bulbs or fluorescents and use timers or motion detectors to turn lights on and off.
  
  
• Advertising. “Discourage people who are looking for the cheapest guy in town,” Hanbury says. In a down market, advertising is one of the first things that gets cut, but it shouldn’t be because this is a time when the business should be seeking more opportunities to sell. Advertising expenditures should be 2%-5% of sales. Targeted marketing is better than a shotgun approach and personal calls or direct mail to past clients can produce good results. Hanbury estimates that 80% of his calls are from people who have seen the name of his company somewhere and the remaining 20% comes from the Yellow Pages. Web sites are inexpensive to set up and can be operated at a minimal cost, but they need to be updated.
  
  
• Dues and Subscriptions. A subscription to the Journal of Light Construction is worth the expense.
  
  
• Bad Debts. “You should plan for bad debts,” he says. “Nine out of 10 times, they don’t pay not because they don’t have the money, but because it’s a power play.” Hanbury says his business loses about $10,000 a year in bad debts.

To reduce bad debts: choose your customers carefully; dictate the payment schedule to eliminate more than a 10% holdback at the end of the job; use written change orders, including language allowing for the collection of attorney’s fees; write concise contracts; and don’t be afraid to stop work when payment schedules aren’t being followed.

• Sales and Administration. If you get 30 calls a year, you probably don’t need a full-time receptionist. You may not even need an accountant or bookkeeper. “Don’t build up this huge organization, when you don’t need it,” he advises.

Some Prefer Field Employees, Others Like Trade Contractors

Some remodelers are able to run their business by using subcontractors in the field and others rely upon employees, but both approaches provide benefits and present challenges, according to two remodelers who faced off to debate the issue at last month’s Remodelers' Show in Baltimore.

Using trade contractors exclusively enables Brothers Strong, Inc. in Houston to reduce job costs and guarantee a completion date, according to company vice president Michael Strong.

When he and his brother first got into the business, they learned what to do and what not to do from the people they worked for, said Strong. “We thought we could build the company entirely with trade contractors,” he said.

Not having to worry about field employees has enabled the brothers to focus on profitability and an aggressive growth plan under which the 13-year-old company has been able to expand at about a 10% clip for the past six or seven years. Approaching a sales volume of $1.4 million this year, the business undertakes six to a dozen projects at a time in the $60,000-$80,000 range.

Using contractors to do the job minimizes the paperwork required for managing employees, and firm bids enable costs to be determined in advance, Strong said. There is no overhead for carrying field labor, “and when times are slow, you do not have to create work for your field employees.”

It is easier to keep job schedules on track because when you are using your own employees, “if you have a problem on a job, you take somebody off another job to do that” and things start slipping, he said. “You have to have systems and structures in place to ensure this doesn’t happen” when working with contractors.

The contractors, for the most part, supply the materials they put in, and that helps reduce warranty and call-back costs. Tool and equipment budgets are also dramatically lowered, he noted.

“Every contractor gets a blueprint and the scope of work,” Strong said, and on the first day of the job the contractor is accompanied by the company’s project manager when they arrive at a client’s home.

Job Site Etiquette Strictly Enforced

The Strong Brothers carefully screen contractors and rules for job site etiquette are strictly enforced. “They can look like hell, drink like mad, talk like fools, if you let them,” Strong said, “but then again, so can employees.”

As for having enough good trade contractors from which to choose, “we’re blessed in Houston because we’re close to Mexico.” The company doesn’t have to resort to special incentives to attract the subcontractors it needs, and “we’ve had a low turnover” in those with which it does business.

Approaching his operations differently, Paul Winans, president of Winans Construction Co. in Oakland, CA, finds that using his own employees provides him with greater control over jobs and reinforces the craft background of his company and its philosophy that “the tool’s are where it’s at.”

“Trade contractors can be called to a different job, they don’t come to yours when they say they will,” and they can slip up on the schedule for any number of reasons — from the truck breaking down, to employees quitting, said Winans. “This is less likely to happen with a small, in-house workforce.”

Over his 25 years in business, Winans says he has gravitated toward using more subs for flooring, drywall and similar jobs, but he has 11 employees on his staff to carry out his design/build approach, including job management and skills such as carpentry.

Selling an Experience, Not a Product

“The remodeling contractor isn’t selling a product, they’re selling an experience, and we want to sell a consistent experience,” said Winans. “When we’re done with a project, our clients are apostles and they want to only call us for a project. They will say how well they were treated when the work was done, and they will never forget it.”

Jobs are typically in the $450,000-$900,000 range, so it doesn’t take too many of them for the company to reach its annual volume in excess of $2 million.

Job management is the primary function of the person on the site, he said, and they spend 2-1/2 to 3-1/2 hours a day focusing on that, depending on the size of the job. That person also schedules a weekly meeting with the client. Notes are taken, and processed, “because everyone remembers what they want to,” he said, and you need to write everything down.

“We train a ton,” Winans added, and Monday morning meetings are a must for every employee.

Winans makes sure that his employees understand his company’s culture thoroughly, that they buy into it and that they are mentors for each other in putting it into practice.

Winans’ employees act as entrepreneurs and they have the authority to handle any breakdown and work around them. When problems do arise, “there’s no such thing as an excuse,” he said. “There’s something that has occurred and it’s not going to happen again.”

Winans said he aims for a gross profit of 40%; Strong aims slightly lower, for 35%.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

Remodelers Earn Top Industry Designation From NAHB

For their achievements in the pursuit of professional growth and ongoing education in their field, 127 new Certified Graduate Remodelors™ were honored by NAHB at a recognition ceremony preceding the 2003 Remodelers’ Show in Baltimore last month.

NAHB’s CGR designation identifies individuals who exemplify professionalism in the remodeling industry. Classes leading up to the designation are held across the country on an ongoing basis.

Completing the certification requirements is “a demonstration of your commitment to your profession, and it will be recognized by your clients,” said Vince Butler, CGR, GMB, CAPS, president of Butler Brothers Corporation in Clifton, VA, and chair of the CGR Board of Governors.“It absolutely revolutionizes your whole attitude toward your business.”

To become a CGR, remodelers must meet a number of qualifications, including completion of a comprehensive educational curriculum. Developed by the NAHB University of Housing, courses focus on five core areas designed to emphasize business management skills as the key to a professional remodeling operation.

“As a remodeler, I knew that I needed to do everything I could to have as much education as possible and earn an important designation like CGR, so that my clients would have a high level of confidence in the work I do,” said 2003 honoree Abbie Sladick, owner of Abbie Joan Enterprises in Naples, FL,

There are currently 1,150 CGRs in 45 states.

For more information on CGR and other professional designations awarded by NAHB, click here. For a list of CGRs in your area, click here. 

HBI Job Corps Students Participate in ‘Make a Difference Day’

Home Builders Institute (HBI) students enrolled at the Cassadaga Job Corps Center (CJCC) outside Buffalo, NY, are partnering with the Buffalo Niagara Builders Association (BNBA) and Habitat for Humanity to rehabilitate homes for area families.

Participating in “Make a Difference Day” last week under the supervision of HBI instructor Mike Giardina and Habitat for Humanity site supervisor George Copeland, 10 HBI students helped rebuild and revamp a home’s entire plumbing system.

HBI’s Job Corps students enrolled in carpentry, electrical and painting programs at the Cassadaga campus practice their hands-on training on behalf of local families through the Buffalo Niagara BA’s “Hammering for Habitat” project.

“Make a Difference Day” — created by USA Weekend Magazine — encourages people of all ages to participate on the fourth Saturday of every October in volunteer activities that support their communities.

HBI Job Corps students were involved in “Make a Difference Day” at locations around the country:

• In Alaska, students helped build a half-mile hiking trail using only hand tools and wheelbarrows.
• Hawaii JCC students painted over graffiti at Waimanalo Beach Park.

• Roswell, NM, JCC's painting crew helped to repaint more than 3,000 fire hydrants.
• Hubert Humphrey JCC students from St. Paul built shelves and picnic tables, repaired benches and re-lamped common areas for Rueben Lindh Family Services in Minneapolis.
• At the San Diego JCC, students built a 30-foot lumber retaining wall and a headwaters dam and pool out of stone and mortar for Chollas Lake Park.
• Sacramento JCC students built and put up shadow boxes for the Agency for Hearing’s display of old hearing aid instruments.
• Grafton, MA, JCC students refinished the gymnasium floor at the Sacred Heart Parish in Worcester.
• Students from the North Texas JCC in McKinney painted cabins, repaired plumbing and refinished doors and tables at the Texoma Christian Camp.
• In Bangor, ME, Penobscot JCC students removed a local youth camp’s floating dock system; its 16 pieces weighed approximately 600 pounds each.
• In Maryland, Woodstock JCC students cleaned up the grounds of the African Union Methodist Protestant Church in Granite.
• And in Tucson, students at the Fred G. Acosta Job Corps Center helped rebuild an abandoned Boys and Girls Club building for Youth Works, including running potable water lines, hanging sheetrock and replacing the sub-floor.

For more information on HBI’s Job Corps programs, e-mail Maria McIntyre or call her at 800-368-5242 x8912.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

Educational Programs Can Spice Up Your Meetings

Local women’s councils and other home builders association groups can reenergize their members, increase meeting attendance and attract new members by developing educational programs that provide professional or personal solutions for their busy constituents.

A current or former teacher in your membership, members who have been involved in planning meetings or who have good organizational skills or someone on the association’s staff who is responsible for putting on programs are good resources for getting started and identifying the steps that will need to be covered.

The first step in the planning process is to find out what your members and potential members want. Start by asking them what kind of information they are looking for. Ask new members when you have an orientation or make that first phone call. Get a show of hands on three different topics at your next meeting. Ask the home builders association what programs members have requested. Ask the local Realtors® board. Ask, ask and keep asking.

Expect varied responses that will generally fall into three categories: industry-related information, professional and career development, and personal issues. Vary your programming to represent all of these groups over the course of a year. And don’t assume that the appeal of these topics will be limited to the members of your group. Ask the association to publicize the program in its newsletter, and see if you can insert a flyer in the next mailing. Speakers who are well known in the area or certain topics can also be of interest to non-members, so let other community and industry groups know what you’re offering.

To get started, here are three easy ideas:

• Industry Related — "Lighting Trends: What’s In, What’s Out.” Builders, designers, decorators and sales and marketing members will all attend this one. Ask a local lighting company representative to discuss — and illustrate with slides and products — the newest trends and tips on what works best for each type of home. A panel with designers and an architect may also work well.
• Professional Development — "Flexibility: Options for Change in Today’s Workforce.” Do many of your members have multiple demands on their professional time and find themselves juggling the responsibilities of a full-time job and family? Ask a personnel counselor from a local corporation or a job counselor at the community college to address job sharing, flex- time and opportunities for work at home.
• Personal Issues — "Fitness for Women: Desk Aerobics and Other Short Programs.” Who doesn’t wish they had more time to exercise or that they could combine exercise with other activities? Ask a local fitness instructor to illustrate ways to work out at your desk, in the car or while doing chores. Getting the participants up and moving will make for an especially fun event, and we all know the enthusiasm fitness trainers bring to their work.

Educational programs, of all types, give members a reason to attend meetings. You can hold short board meetings prior to the general session or at a different time, but do keep in mind that less involved members and potential members will not be very interested in discussions about the budget.

Make it a fun evening, with something for everyone, and you’ll see an increase in interest and in membership over the year.

Revision of MasterFormat for Non-Residential Specifications Entering Final Phase

After two years, four drafts and requests for comments from nearly 500 A/E/C firms, the Construction Specifications Institute is closing in on the end of a process that will lead to publication of the first revolutionary set of changes to CSI’s 16-division MasterFormat™ — the nation's predominant standard for organizing written specifications for constructing nonresidential buildings.

Created some 40 years ago, MasterFormat™ has been in need of a major overhaul for some time now to keep up with changes in construction technology and processes.

The latest — and final draft, says CSI — is likely to be acceptable to more users because it has fewer divisions than some of the earlier versions and includes the current version of MasterFormat™'s familiar basic structure for the traditional architectural divisions.

Also, to avoid having to go back to the drawing board any time soon, this version contains plenty of room for future growth through a new six-digit numbering system (versus five digits in the original version) for the sections within divisions.

This latest draft “reflects the prevailing sentiment that Draft 3 was outside most people’s comfort zones as to the number of divisions,” said Dennis Hall, chairman of the MasterFormat™ Expansion Task Team. “We now have in Draft 4 what we believe is a good compromise. It will look familiar to current MasterFormat users as far as the traditional building disciplines are concerned, but will still be able to adapt to new subjects, methods and materials for many years to come.”

To view the proposed divisions and for more information, click here. To download Draft 4 — the current working draft, and to read comments, click here.

The new MasterFormat™ is scheduled to be published late in the fall of next year. 

Building Science Firm Offers Services to Production Builders

IBACOS (Integrated Building and Construction Solutions), a building science research and development firm, recently began offering its services to production home builders who are concerned about increasing customer satisfaction and reducing design and construction defects.

Based in Pittsburgh, the 12-year-old company is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. The company has 28 full-time employees with expertise in building science, architecture, engineering and quality process management.

Among the services offered by IBACOS are:

• On Call Troubleshooting Services. Complaints about noises and odors, are common, the company says, and it cites the case of one builder who might have been able to solve a home owner’s reports of noise more quickly with some outside help.

“Over several months,” says IBACOS, “the builder’s team explored every room, inspected the exterior, crawled over the roof and rooted around in the basement, but they couldn’t figure out what was causing the noise. Later, after they’d spend considerable time and expense, they discovered that these mysterious noises weren’t the result of a construction defect; rather, they were in the home owner’s head.”

• Design and Construction Assessments. Design and construction practices are thoroughly evaluated to solve problems before they begin.
  
  
• System and Material Evaluations. The company helps builders determine the impact of introducing new designs, construction practices and materials on the performance and cost of their homes.
  
  
• Training. Training seminars are offered on critical topics related to building performance to ensure that homes are safe, healthy, durable, comfortable and efficient. The training is customized to meet the builder’s needs.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

Fire Relief Fund Announced by Southern California Builders

A special fund to raise money for the victims of the Southern California wildfires has been established by the Building Industry Association of Southern California (BIAS/SC).

The BIA/SC Relief Fund will help establish an education and assistance program for those who were hardest hit by the fires. The association will direct the majority of the funds toward supporting entities that have provided temporary shelter for fire victims and other housing programs related to the tragedy.

“Our thoughts and prayers remain with those still in danger of losing their communities, as well as with those brave firefighters who have battled so honorably to save our lives and homes,” BIA/SC President Ray Becker of Lennar Communities said on Oct. 30 in his announcement of the fund.

Donations may be sent to: BIA/SC Disaster Relief Fund, c/o Building Industry Association of Southern California, 1330 South Valley Vista Drive, Diamond Bar, CA 91765.

Boost Your Marketing Through These Awards Programs

Proud of your work? Show it off and give your marketing efforts a boost by entering one of these awards programs:

• 2004 Best of Seniors Housing Design Awards. Sponsored by NAHB’s Seniors Housing Council, the annual Best of Seniors Housing Design Awards program honors architectural and interior designs that bring quality, innovation and spirit to the 55+ seniors housing industry. Owners, builders, developers, remodelers, operators, architects, land planners, interior designers and marketing/advertising firms are eligible to enter the competition.

The deadline has been extended to Nov. 13.

Click here for details about the awards and to review the call for entries. To download a brochure with entries specifications and an application, click here. For more information, e-mail Jeff Jenkins or call him at 800-368-5242 x8292.

• 2003 State & Local Government Affairs Recognition Awards. This annual program provides an opportunity for members and the industry to honor governors, state legislators, mayors, county commissioners and other public officials who create more housing opportunities and a stronger building industry. Sponsored by the State & Local Government Affairs Committee, the program also honors state and local associations' government affairs initiatives and their efforts to promote NAHB's smart growth principles. The nomination deadline is Nov. 14. 

  Honorees will be recognized at an awards breakfast held during the International Builders' Show in Las Vegas. For entry materials and guidelines, click here. For more information, contact Laura Dooley at 800-368-5242 x8361.
  
  
• 2004 Pillars of the Industry Awards. NAHB’s Multifamily Council invites applications and nominations for its 2004 Pillars of the Industry Awards. Considered the most prestigious awards in the industry, the Pillars awards recognize excellence in multifamily design, development, finance, management and marketing, and showcase future trends and innovation. Paid applications to enter will be accepted through Nov 14. The deadline to submit entry portfolios is Dec. 5.

For an official call for entries application form, click here, or call the Multifamily Council at 800-368-5242 x8215.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started.

Calendar of Events

DATE	EVENT	LOCATION
Nov. 14-16, 2003	Custom Builder Symposium	Orlando, FL
Jan. 19-22, 2004	The International Builders' Show	Las Vegas, NV
March 14-16, 2004	National Green Building Conference	Austin, TX
March 28, 2004	2004 NAHB Multifamily Pillars of the Industry Conference & Awards	Palm Springs, CA
April 14, 2004	Building for Boomers & Beyond: 2004 Seniors Housing Symposium	Chicago, IL

To view more meetings & events information on the NAHB Web site, click here.