Nation's Building News Online

2003 – A Year to Remember

When we work together, there’s no end to what we can achieve on behalf of NAHB’s grassroots members and the families across this country who regard the opportunity to rent or own a decent home as one of their top priorities.

As we approach the end of an amazingly successful year for America’s housing industry and this association, I want to briefly review our efforts and our accomplishments in 2003 so that we can celebrate our victories, mark our progress on ongoing housing priorities and redouble our efforts in the year ahead to meeting challenges that remain unresolved.

Once again NAHB responded and refuted naysayers in the media and academic circles who were predicting a collapse in real estate values and a subsequent decline in housing production. Not only did housing values hold their own but home builders for the third consecutive year led the economy forward to higher ground in 2003. Mortgage interest rates declined to their lowest level in almost half a century in early summer, and by year’s end annual new home sales are expected to top the one million threshold for the first time ever and single-family housing starts will exceed 1.45 million units — also an all-time record.

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Other major highlights included leading the debate against a misbegotten regulatory effort for Fannie Mae and Freddie Mac that would undermine the effectiveness of the best housing finance system in the world; passage of a landmark tax stimulus bill; passage of a major housing bill in the Senate that is expected to be approved by the House; smashing all records (for attendance and exhibit sales) at the 2003 International Builders’ Show in Las Vegas; setting an all-time membership record of 215,000; and adopting the association’s first program-based budgeting system.

Here is a recap highlighting NAHB’s activities over the past year:

• As it became increasingly clear that the nation’s lackluster economy needed a jumpstart, NAHB was the key housing organization in Washington to sign on to President Bush’s plan to create new jobs and boost economic activity by cutting taxes. NAHB lent the White House its support throughout a tough legislative process and led efforts to ensure that providing tax relief on dividends would not inadvertently undermine the effectiveness of the Low Income Housing Tax Credit. The final tax measure provided lower tax rates on capital gains that also applied to dividend income, and it actually created a new incentive for corporations to invest in the housing tax credit.

The Administration’s tax stimulus made effective this year across-the-board rate reductions that were scheduled to occur in 2004 and 2006. In addition to lower capital gain tax rates, which reach 0% in 2008, the package contained more good news for the businesses of NAHB members: an increase in bonus depreciation from 30% to 50% throughout 2004, an increase in small business expensing from $25,000 to $100,000 and an increase in the phase-out threshold from $100,000 to $400,000 through 2005.

• On an issue of enormous importance for the future of the nation’s housing finance system and meeting the national goal of expanding homeownership opportunities for underrepresented minority households, NAHB vigorously opposed Administration efforts to transfer oversight of the programs of Fannie Mae and Freddie Mac from the Department of Housing and Urban Development to the Treasury. While NAHB joined in a broad consensus that the Treasury is an appropriate agency for ensuring the soundness and safety of these two government sponsored enterprises, it remained adamant in its opposition to allowing the Treasury — an agency that does not view housing as a national priority — to assume authority for reviewing and approving new programs designed to enhance the affordability and accessibility of housing credit. We stood our ground on this issue during deliberations on Capitol Hill and continue to work to increase public awareness of our concerns and to find an acceptable legislative solution when the debate resumes in the Congress next year.
• Just before adjourning for Thanksgiving, the Senate passed a housing bill that increases FHA multifamily loan limits for high-cost areas and several other provisions supported by NAHB, including $200 million in the HOME program that would be set aside for downpayment and other home buying assistance. The FHA loan limit hikes will make the program more accessible to builders in high-cost markets. The House is expected to pass the bill as soon as it has the opportunity to consider it.
• On a long list of legislative priorities, NAHB solidified political support, moving closer to favorable decisions on: tax credits for building or rehabilitating homes for moderate- to low-income home buyers; reversing technical restrictions on the use of Low Income Housing Tax Credits; and providing tax credits for tax efficiency in new and existing homes and multifamily properties. On an issue with major repercussions for housing affordability, NAHB secured the introduction of House and Senate resolutions calling for fair and free trade in softwood lumber with Canada.
• On the land use and environmental front, NAHB supported enactment of a new law that will prevent devastating wildfires by enabling the national forests to be cleared of debris, underbrush and diseased trees. In transportation reauthorization legislation in the Senate, NAHB worked to ensure that transportation issues will not impede home building and there will be no federal control of land use issues. The association led successful compromise efforts on a House bill to preserve the highlands of New York, New Jersey, Connecticut and Pennsylvania without disrupting growth in the more populated parts of this area.
• On concerns directly related to the cost of doing business, the House passed legislation that would allow small companies to band together across state lines through their membership in an association to obtain the economies of scale needed to negotiate affordable health insurance coverage for their employees. NAHB also worked in support of legislation, which cleared the House, to give federal courts greater jurisdiction over class action cases in an effort to help reduce the soaring costs of litigation.
• On appropriations issues on Capitol Hill, NAHB worked to obtain funding for the Home Builders Institute’s Job Corps/Project CRAFT, Carl D. Perkins Vocational Education Grants, the HOPE VI program for severely distressed housing, Community Development Block Grants, HOME funds and the Zero Energy Buildings program.
• On the political action front, BUILD-PAC recruited a record number of Capitol Club members and raised a record $1.25 million in the first 10 months of this year. One of NAHB’s own — Randy Neugebauer — won a seat in the U.S. House of Representatives.
• On the state and local front, where the regulatory challenges for NAHB’s grassroots membership are concentrated, legislation establishing a process for resolving disagreements over construction defects in the home rather than in court made significant headway. During the year, 13 state legislatures adopted some form of “Notice and Opportunity to Repair” legislation, and a total of 18 states now have these laws on their books.
• Sparking discussion at public meetings and conferences around the country on alternatives to developer exactions, a new report from the NAHB Smart Growth Advisory Group, “Building for Tomorrow: Innovative Infrastructure Solutions,” presented alternatives to traditional infrastructure financing and service-delivery mechanisms.
• Continuing to pursue the legal rights of home builders and property owners, NAHB was on the winning side of several significant court cases, including decisions related to: the failure of the National Marine Fisheries Service to follow notice and comment requirements before establishing essential fish habitat for salmon in the Pacific Northwest; the arbitrary listing of the Arizona pygmy owl as an endangered species; the legal proposition that compensation is the proper award in takings cases; the ability of NAHB members to obtain Small Business Administration loans without having to complete unnecessary paperwork related to environmental analyses; and the right to have takings claims heard in federal court after they have been litigated in state court.
• The NAHB Legal Research program — which provides free information on industry-related issues to NAHB members and their affiliates — responded to more than 1,000 information requests over the year. NAHB attorneys reviewed more than 50 local ordinances related to building and development. Legal Affairs published a review of the scientific literature on the health effects of exposure to mold.
• In the area of Construction Codes and Standards, NAHB initiated efforts to establish the association as the national voice for green building; provided resources to help members and associations oppose the adoption of the NFPA 5000 Building Code in their states and localities; assisted members in combating mandatory fire sprinkler systems; and participated in code hearings to advocate against unnecessary increases in construction costs related to radon detectors, larger setbacks from lot lines for fire protection purposes, increased structural provisions to mitigate against earthquakes, 7-11 stair geometry, and more.
• On construction safety, NAHB formed an alliance with OSHA to address the industry’s workforce training needs, especially for Spanish-speaking workers; secured a seat on the OSHA committee that is responsible for providing advice on safety standards and policy; and, in conjunction with the NAHB Research Center, received funding for the fourth consecutive year to develop and deliver construction safety training at home builders associations. Through an alliance with OSHA, NAHB members now have improved access to information and education on jobsite safety and health.
• On the environment, NAHB obtained a seat on the Environmental Protection Agency's rulemaking team that allowed builders to help shape reasonable and workable standards for brownfield sites. The association directed the development of a Web site to help builders comply with environmental laws and regulations. NAHB worked with the EPA to remove problematic elements from proposed Effluent Limitation Guidelines that would have cost the building industry more than $3 billion annually and to remove requirements from the storm water general permit that would have cost builders $137 million a year in compliance costs. We provided the Fish and Wildlife Service and the National Marine Fisheries Service with model economic analysis for assessing the impact of critical habitat designations on land costs and housing affordability. We convinced the Forest Service to exempt the Tongass and Chugach National Forests from the Roadless Rule, in effect removing the prohibition on logging in these areas.
• 2003 was the year in which NAHB built a strong foundation for more effective and efficient membership services and communication through reorganization and centralization of the association’s resources and better utilization of the latest technology. Key to this effort is NAHB’s Marketing and Sales Group, which developed a comprehensive marketing package to represent all advertising and sponsorship opportunities offered by the association. With a goal of increasing non-dues revenue while meeting the needs of the association’s members, successful sales efforts included the NAHB Golf Tour, Nation’s Building News and Builder and Remodelor 20 Clubs. Marketing efforts included promoting education through NAHB designation programs (in which enrollment increased 69% over 2001); joint venture educational programs with local associations; specialized educational conferences; BuilderBooks.com publications; revenue sharing opportunities for HBAs; and the Member Advantage program, which provides members with hundreds of thousands of dollars in savings. NAHB’s biggest event of the year, the 2003 International Builders’ Show, set new records for exhibit space sales and revenue and attendance and is headed for new records in 2004.
• With the launching of NAHB’s completely redesigned and upgraded Web site — www.nahb.org — NAHB members and the public have access to a growing store of information about the association and the industry it serves. More than 1,400 pieces of public information were posted on the site by November. The site’s member-only features and functionality enable members to access exclusive industry information, HBA resources, policy information, council documentation and more. Visits to the site increased from 370,000 in the year’s second quarter to more than 424,000 in the third quarter.
• In addition to the publication of a print edition of Nation’s Building News eight times a year, the association also bolstered its internal communications by launching in March a new weekly online version of Nation’s Building News designed for the entire NAHB membership; by publishing 21 other online newsletters for targeted audiences; and by conducting an aggressive campaign to collect member e-mail addresses.
• In 2003, NAHB made tremendous strides in information technology, completing conversions and customizations to a new management system that will provide greater flexibility and more robust tools to automate the support of various member needs. A new online Web Membership System that was rolled out during the year will enable local associations to manage their NAHB membership information online.
• In 2003, NAHB achieved remarkable gains in bringing its advocacy concerns on key legislative and regulatory issues to the public. NAHB represented its views in more than 4,100 stories in major media outlets, placed more than 70 editorials and letters to the editor and conducted nearly 900 interviews with reporters at daily and weekly newspapers, wire services, business and trade magazines and Web-based media. NAHB representatives appeared on 250 television and radio programs and arranged five editorial board meetings.
• 2003 was a banner year for education, with the University of Housing offering more than 650 classes to more than 11,000 students, representing more than 40% growth since 2001. The association’s educational messages also extended into middle schools and high schools through “Building Homes of Our Own,” an innovative simulation home building game. Some 24,000 CD-ROMs were delivered to educators, with an outreach of 840,000 students, one million parents and 48,000 teachers. The nation’s home builders were able to provide young children with some important safety lessons through distribution of Bob the Builder™’s “Blueprints for Home Safety” activity books. Dallas-based HIT Entertainment, Bob the Builder’s owner, made more than 270,000 of these books available to members and associations.
• Rising to the critical challenge of finding young, skilled construction workers to build the housing the nation needs, the Home Builders Institute, the workforce arm of NAHB, scored several home runs over the course of the year: participation at the First International Youthbuilding Congress in London; expansion of Project CRAFT into Texas; the launch of the Building Careers Job Bank Web site; additions to RCA Series textbook and multi-media materials on construction skills; and the inauguration of an HBI educational designation program for field superintendents that was attended by nearly 1,000 participants.
• Also on the educational front, the National Housing Endowment awarded more than $500,000 to support more than 70 college and university students in construction-related fields and projects directly related to NAHB’s top priorities.
• Through its councils, NAHB stepped up efforts during the year to provide support for major segments of the housing industry that have their own special focus and their own special needs. The Multifamily Housing Credit Group worked with the NAHB leadership to insure that the Administration’s final tax bill contained no provisions inimical to the Low Income Housing Tax Credit. In addition, Multifamily worked with the NAHB Advocacy Group to secure improvements to the FHA mortgage insurance program and to dissuade the U.S. Postal Service from imposing onerous new regulations on mailboxes in apartments. The Remodelors^tm, National Sales and Marketing, Commercial Builders, Seniors Housing, Building Systems and Women’s Councils all focused their energies on improving their member communications and services and recruiting new members to expand their constituencies.
• The Remodelors^tm Council developed a pilot program that next year will enable remodelers and small contractors in selected home builders associations to join NAHB at a 50% discount for the first year of membership.
• Under the Building Systems Councils (BSC) umbrella, new Systems Builder and Concrete Home Building sub-councils were created and launched this year. These two new sub-councils — which allow systems builders and producers and builders of residential concrete construction to join the BSC and participate in ongoing council programs — have increased the association’s dues revenue and membership growth at the same time as they have increased attendance at BSC events.
• The National Council of the Housing Industry — the Supplier 100 of NAHB — created a speakers bureau for presentations by its manufacturer members at home builders associations and lent its financial support to the New American Home at the International Builders’ Show; NAHB research on tort reform, mold, growth and impact fees; the Home Builders Institute’s Student Chapter Awards; and the bi-annual NAHB Economic Forecast Conferences.
• In the international arena, NAHB moved aggressively in 2003 to develop resources that will help its members explore business opportunities outside of the country. The association’s International Department planned NAHB’s first International Housing Conference of the Americas in Mexico City and received a grant of almost $400,000 from the Department of Commerce to expand export markets in Mexico and increase trade information and educational resources for NAHB members.
• NAHB continued to build upon the knowledge and expertise of its staff, decreasing annual turnover to less than 15%. After almost a decade of steadily increasing turnover, since 2000 the number of staff leaving the organization has declined by half. At the same time, the association continued to find opportunities to streamline its operations and to identify new ways to deliver products and increase support to the membership without increasing staffing resources.

At the end of 2003, economists at NAHB are predicting that the nation’s home builders can look forward to another good year in 2004, with mortgage rates remaining on the low side and a resurgent economy creating new jobs and prosperity. I am confident that our association is stronger, more resourceful and more responsive to the needs of its members than ever before, and that we stand ready to build on the many outstanding achievements of the year gone by and tackle the challenges that lie ahead as “Together We Build the American Dream.”
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