Forest Service Exempts Tongass National Forest From Roadless Rule

The U.S. Forest Service on Dec. 23 announced its decision to exempt the Tongass National Forest from the embattled Roadless Area Conservation Rule. The regulation is also known as the “Roadless Rule.”

NAHB had strongly advocated the exemption because further restrictions on timber harvesting in the forest would have taken a tremendous economic toll on local communities in that area.

Despite its exemption from the Roadless Rule, some 95% of the Tongass will remain off-limits to logging under existing forest management plans, preserving tremendous stretches of one of the world’s last temperate rain forests.

The exemption will, however, allow local communities such as Ketchikan, AK, to continue to survive and grow. Timber from the Tongass accounts for a significant percentage of the volume processed by local mills in Southeast Alaska. Curtailing that supply would precipitate unacceptable job losses and economic disruption in local communities and businesses.

NAHB has long held that the questionable environmental benefits provided by the Roadless Rule do not justify such costs, and the Administration has at long last agreed with that position.

Buffeted by litigation, the future status of the Roadless Rule remains in question. In addition to citing the rule’s deleterious impact on local economies, NAHB contends that application of the rule violates a number of federal laws and undermines state and local planning authorities. At the same time, the rule provides little, if any, benefit to the forests above and beyond protections already afforded under forest management plans.

For further information, e-mail Christopher Galik or call him at 800-368-5242 x8663.

Housing Snapshot

Mortgage interest rates remained low last week and are expected to climb only modestly over current levels in the year ahead, setting the stage for expectations of robust levels of housing activity in 2004. While the pace of home starts and sales slowed a bit toward the close of 2003, the year is expected to set a record for single-family construction and single-family sales. Job growth, which stalled in December, raised new uncertainties for the economy last week. The unemployment rate declined to 5.7% during the final month of 2003, down from a peak in June of 6.3%, but that was largely because 309,000 workers dropped out of the job force. There were 2.4 million fewer jobs in the economy at the end of 2003 than in February 2001, one month before the official start of the recession. Following the disappoining news from the jobs front, the Federal Reserve was not expected to change its policies on interest rates in its upcoming Jan.27-28 meeting and rates are generally expected to remain unchanged for some time. According to Random Lengths, framing lumber rose last week to $334 per 1,000 board feet from $323 the prior week. But increases in 15/32-inch 3-ply CDX Southern Westside plywood and OSB raised concerns over the recurrence of price spikes for those materials. The former rose to $295 per 1,000 square-feet last week, up from $250 the prior week; the latter rose from $240 to $295.

Mortgage Interest Rates

30 Year Fixed Rate: 5.87\%
15 Year Fixed Rate: 5.17\%
1 Year ARM: 3.76\%

Housing Starts: Nov. 2003

Total: 2.070 million\%
Single Family: 1.695 million\%
Multi Family: 375,000\%

New Home Sales: Nov. 2003 *

1.082 million

Existing Home Sales: Nov. 2003 *

6.06 million

* Seasonally Adjusted Annual Rate

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.

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.”

Saving Open Land Is All About Density

By Richard A. Forsten
Late last year, our local Gannett newspaper ran an article headlined "Our Vanishing Farmland," detailing Delaware’s loss of farms as more and more land is developed for housing and commercial and industrial uses.

What that article didn't discuss, and what is generally missing from most discussions concerning farmland and open space preservation, is perhaps the easiest and most important thing that local and county governments can do. The three most important words are: density, density, density.

Like it or not, the population of Delaware has grown tremendously over the past 20 years and will continue to grow. According to the Census Bureau, the state's population is expected to grow by 50,000 between 2000 and 2010, and by another 30,000 or more by 2020. Needless to say, these people are going to need places to live and land for those houses.

The question is not how do we stop this growth? We can't; and even if we could it would be disastrous for the economy.

The real question is how do we maintain farmland and open space while accommodating this growth?

In the world of real estate development, we know that the higher the density that is allowed, the less farmland is needed to build the same number of houses. Over a 10- or 20-year period, we can save thousands of acres from development.

If Delaware's population increase over 10 years is expected to be 50,000, and the average household size is 2.5 according to the Census Bureau, that means Delaware will add 20,000 new households over those years. If we have zoning codes that permit an average density of one unit an acre, then we will need 20,000 acres for those 20,000 new homes to be constructed.

However, if we increase permitted densities, the amount of land needed falls dramatically. By increasing average density to two units an acre, we've just saved 10,000 acres from development over a 10-year period. If we increase the density to four units an acre, we would only need approximately 5,000 acres for the same increase in population, and we could save approximately 15,000 acres from development.

At two-acre minimum lot sizes (the size prevalent in many developments not served by sewers), the average density would be only one-half a unit an acre or less depending on the average lot size, meaning that at least 40,000 acres would be required for the same 20,000 new homes.

The point should be obvious: Higher densities result in less land being developed. The best way we can save farmland in the long run is to allow greater density of development on the farms being developed now.

On a project-by-project basis, it's easy for residents to argue for smaller developments and less dense projects. But in the aggregate, we are cutting off our nose to spite our face. Less density on individual projects simply means more developments, more sprawl and more loss of open land.

Higher-density has other advantages as well. Among other things, it makes public transit more practical, allows better economies of scale for traffic and other infrastructure improvements and keeps housing more affordable.

This same logic applies to commercial, office and industrial development. With more restrictive zoning codes now in vogue, non-residential uses are more limited in their density as well. For example, beyond traditional setback requirements, non-residential projects must provide open space as part of every project. Typically this space consists of patches and strips of grass and shrubs surrounding the buildings or parking lots. Certainly, minimal landscaping is needed, but why require relatively large strips of open space surrounding businesses? These areas can't be used by the public and merely cause businesses to need more land for the same number of stores and offices.

The more businesses spread out, the more customers and employees have to drive. Higher-density commercial development results not only in less land being used for more stores and businesses, but people don’t need to drive as much.

Some people express concern that higher densities result in more crowded development but no savings in land; that we'll still run out of open space. This fear is no reason to prohibit higher-density development now. It just means that density is only one component in good land planning and preservation.

Delaware's farmland preservation program is also important and has been fairly successful. We also need to purchase land for parks and open space. Transfer of development rights is another tool.

But any serious effort to save land must begin with density, density, density.

Richard Forsten is a land use and commercial real estate attorney with the Wilmington office of Klett Rooney Lieber & Schorling, and he is on the Board of Directors of the Home Builders Association of Delaware.

Home Sales Slip in November, But Record Expected for 2003

The seasonally adjusted annual rate of new single-family home sales decreased slightly in November, while attractive mortgage rates and strong appreciation in housing prices were expected to push sales for the year beyond the one million unit mark, which would be a record.

The Commerce Department reported last month that new homes were sold in November at an annual rate of 1.082 million units, a dip of 2.4% from October.

“Builders have seen an extraordinary year and builder confidence across the country continues to be upbeat,” said NAHB President Kent Conine, adding that “the environment for housing appears strong heading into 2004.”

“Some slowdown in sales was expected toward the end of the year,” said NAHB Chief Economist David Seiders, because the bottoming-out of mortgage rates around mid-year motivated some “fence sitters” to jump into the market, precipitating home buying in the third quarter that otherwise would have been delayed until the final quarter of the year.

Seiders said that NAHB is projecting 1.084 million home sales for the year as a whole, an increase of 11% over the record sales level of 2002. This would be the first time that sales have exceeded one million units.

November sales declined 10.1% in the Midwest, 6.5% in the Northeast and 1.3% in the West; they increased by a modest 0.4% in the South.

The inventory of new homes for sale in November increased slightly to 363,000 units, a 4.1-month supply at the current sales pace but low by historical standards.

Existing Home Sales Slip in November, But Remain Strong

Existing home sales slipped 4.6% in November to a seasonally adjusted annual rate of 6.06 million units, the National Association of Realtors® reported on Dec. 30, but remained 6.9% higher than they were during the same month a year earlier.

David Lereah, the association’s chief economist, predicted that 2003 would set a record for home resales and that 2004 is “likely to be the second-best year on record” for sales.

Existing home sales declined 2.4% in the West, 4.1% in the Northeast, 5.1% in the South and 6.6% in the Midwest

EPA Revises Water Submetering Policy

Responding to a recommendation from NAHB, the U.S. Environmental Protection Agency (EPA) has exempted multifamily property owners from Safe Drinking Water Act (SDWA) regulations for submetered water.

Under the new policy, multifamily owners will not be subject to SDWA regulations simply because they install submeters to track how much water is being used by their tenants so that they can bill them for it.

This final agency action will help to ensure that multifamily owners who submeter their water will no longer be considered “water suppliers.” Owners will not be required to obtain SDWA permits, conduct periodic water quality monitoring and reporting, or provide annual Consumer Confidence Reports to their tenants, saving considerable time, expense and effort.

Although the revisions do not apply to large distributive networks or those that serve both residential and commercial tenants, the EPA hopes that eliminating SDWA requirements from the submetering process will help to encourage full-cost pricing and water conservation in apartments, condominiums and co-ops.

The revised policy took effect on Dec. 17.

For further information, e-mail Christopher Galik or call him at 800-368-5242 x8663.

Multifamily Stock Index Poised for Record High

The stocks of publicly traded companies whose primary business is multifamily housing continue to outpace the market as a whole and are poised to end the year at record high levels, according to NAHB’s Multifamily Stock Index, which was released at the end of last year.

“Multifamily stocks have outperformed the S&P 500 over the past 12 months as well as over the last four years,” noted Elliot Eisenberg, a housing policy economist at NAHB and creator of the index.

“Investors are looking at multifamily companies as good long-term investments,” he said, “and despite some weakness in the rental market over the past two years, these stocks continue to perform very well.”

Over the past 12 months the index, which tracks the total returns (including capital gains and dividends) of 28 publicly traded firms principally involved in the ownership and management of apartments, has climbed steadily, reaching a record high of 1730 on the index in December. This translates into a 20% gain in returns for multifamily stocks this year, compared to the 15% gain for the market as a whole as reflected by the S&P 500 with dividends reinvested.

For more information on the Multifamily Stock Index, e-mail Ann Marie Moriarty or call her at 800-368-5242 x8350.

Eight Ways to Drive Internet Leads and Sales

The 11th in a series of tech talks for builders.

Try these eight simple ways to make your Web site a more effective sales tool.

• Put a person and a process in place to follow up on all leads in a timely manner.
  
  Let's start at the end of your sales funnel. You have a smart marketing strategy. You have lots of Web site visitor traffic. You receive a great number of leads. Yet, if no sales come out of the other end, what's the point? Put someone in charge of follow-up.
  
  
• Leverage builder portals (Web sites like www.newhomes.com, for example, or www.homebuilder.com that aim to attract as many visitors as possible in a niche market) to drive leads.
  
  The number and quality of distribution options continue to grow. You need a marketing presence where home shoppers look for homes. For example, you may prefer the Dallas Morning News to the Fort Worth Star Telegram. However, if 40% of home shoppers are looking at your non-preferred weekend paper, you may still want to advertise there. It works the same way online.

• Make your Web site faster and easier to navigate.
  
  An amazing thing happens when your Web site becomes faster and users find it easier to use: You immediately see a substantial increase in both visitors and leads. Try this test:
  
  Simplify and reduce the size (in kilobytes) of your homepage and then measure your visitors and leads over one week. Did your ratio of leads to visitors improve? Did you notice an unusual pick-up in visitor and repeat visitor traffic?
  
  
• Make it easy and compelling for Web site visitors to start a dialogue with you.
  
  Make sure your contact links are where visitors can find them and be careful to name them in a way that makes people want to click. For example, "Request Brochure" will probably get more clicks than "Have a salesman call me." In addition, put an 800 number on your Web site and offer to answer your visitors’ questions.
  
  Don't ask Web site visitors for too much information on online forms. While you might want to know their phone number and quite a few other things, requiring this information may discourage them from completing your form.
  
  
• Review your driving directions and update them as if your Web site visitor is relocating from out of town.
  
  This is one of the easiest ways to build traffic and probably the single most overlooked piece of content on home builder Web sites. Is it possible that your advertising dollars were effective enough to motivate a shopper, but your driving directions were so poor that the shopper found another builder's community to visit?
  
  
• Create a good auto-response for every community you build.
  
  Every time you get a lead, that’s a chance to start a dialogue. Most builders use auto-responders that spit out automatic text replies to online queries, and in most cases the copy is lame. This is your opportunity to set an expectation and sell the community a second time. You can't stop there. You still have to follow-up.
  
  
• Call every contact who gives you a phone number.
  
  On most builder Web sites and builder portals, Web site visitors are not required to give their phone numbers. If they give you a phone number, it is an invitation to call. Accept it and call.
  
  
• Highlight your "coming soon" communities and create interest groups for e-mail campaigns.
  
  Turn your "coming soon" communities into backlog builders. It is a place where you have the potential to create excitement. Let your Web site visitors join your VIP list or preferred buyer program.

Blair Kuhnen is the owner of Lux Solutions, a Fort Worth, TX-based consulting firm serving the home building industry by providing Internet related sales and marketing solutions.He can be reached at 817-923-4026 or via e-mail.

To Read Part 1 of This Series ...

To read, "Who Are Today’s Over-55 Buyers?" the initial article in this series published on Dec. 22, click here.

John Burns is the president and founder of Irvine, CA-based John Burns Real Estate Consulting, Inc., which analyzes, summarizes and monitors local market conditions; helps companies refine their strategies in an ever-changing environment; and completes customized consulting assignments to help them with land acquisition, market expansion or strategic planning decisions. His company produces the Retirement Housing Boom report that can be customized for each market in the country. Burns is an active member of the NAHB Seniors Housing Council. He can be reached at 949-262-3228 or jburns@realestateconsulting.com.

Learn More About Seniors Housing Through the Seniors Housing Council

To learn more about seniors housing, 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.

Eight Honored for Advancing Housing-Friendly Initiatives

This year's State & Local Government Affairs Recognition Awards program will pay tribute to eight state and local building associations for their work to advance housing-friendly initiatives.

Congratulations to the 2003 honorees: 

• Texas Association of Builders, for its campaign to pass landmark legislation that created the Texas Residential Construction Commission and refined the state's construction defect laws.
• Building Industry Association of Washington, whose grassroots campaign helped repeal restrictive state ergonomics regulations.
• Home Builders Association of Alabama, which created a Qualified Credentialed Inspector certification program to train builders to comply with NPDES regulations.
• Gold Coast Builders Association (FL), which used a variety of mediums to advance a campaign to overcome strong political opposition to affordable housing in Palm Beach County.
• Building Industry Association of Clark County (WA), which developed an innovative fire sprinkler education program to offer a local city council a politically attractive alternative to mandatory fire sprinklers.
• Master Builders Association of King and Snohomish Counties (WA), which proposed amendments to Snohomish County's lot size averaging code to encourage small lot development and create more flexibility for developing constrained sites.
• Building Industry Association of Lancaster County (PA), for collaborating with diverse interest groups to develop a community consensus on a definition of smart growth and a roadmap for achieving it.
• Home Builders Association of Raleigh-Wake Counties (NC), which developed a polished response to the Wake County's Growth Management Task Force Report that educated local leaders and advanced housing-friendly policy.

Show Registration Available On Site Only

Registration for the International Builders’ Show is available now only on site beginning Saturday, Jan. 17. Online registration is now closed.

To register at the show, visit the On Site Registration Booth in Hall C of the Las Vegas Convention Center during the following hours:

Pre-Show:

• Saturday, Jan. 17 — 7:00 a.m.–5:00 p.m.
• Sunday, Jan. 18 — 7:00 a.m.–5:00 p.m.

During Show Days:

• Monday, Jan. 19 — 7:00 a.m.–6:00 p.m.
• Tuesday, Jan. 20 — 7:00 a.m.–5:00 p.m.
• Wednesday, Jan 21 — 7:30 a.m.–5:00 p.m.
• Thursday, Jan. 22 — 7:30 a.m.–1:00 p.m.

Visit www.BuildersShow.com for up-to-the-minute updates on special events, seminars and more.

HUD to Announce Top 10 Home Building Technologies

The top 10 cutting-edge technologies that promise to raise the standard for residential building practices will be announced by General Deputy Assistant Secretary Darlene F. Williams of HUD’s Office of Policy Development and Research at the Partnership for Advancing Technology in Housing’s "Breakfast of Innovators" on Wednesday, Jan. 21, from 8:30 to 10:00 a.m.

The PATH breakfast is being held in conjunction with the International Builders’ Show at the NextGen Demonstration Home in the parking lot of the Las Vegas Convention Center.

"These innovations are both practical and easy-to-use building technologies," said Williams. "Many builders are experiencing the benefits of integrating them into their projects for the first time."

The PATH breakfast, which is open to housing industry professionals as well as media representatives, also will provide information on some two dozen PATH-profiled technologies integrated into the NextGen Home and evolving ideas about affordability, energy efficiency and housing quality in American housing.

For information on attending the breakfast, send an e-mail. For a complete list of PATH-profiled technologies at NextGen, click here.

The NextGen Demonstration Home is open to both housing industry professionals and the general public throughout the International Builders’ Show from Jan. 19-22.

At the conclusion of the show, the home will be donated to Opportunity Village, Nevada's leading not-for-profit organization serving people with mental disabilities. The donation ceremony will be held on Jan. 22 at noon.

Opportunity Village will sell the home and use the proceeds to fund its programs.

PATH is a public-private initiative dedicated to accelerating the development and use of technologies that radically improve the quality, durability, energy efficiency, environmental performance and affordability of America's housing. Administered by HUD, it offers a wealth of information and other tools for builders, developers, housing providers and home owners.

Fed Report Underestimates Fannie Mae, Freddie Mac Contribution, Builders Charge

NAHB last month criticized a negative report on the housing-related government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac by Wayne Passmore, a staff member of the Board of Governors of the Federal Reserve System.

“Like many theoretical models, we believe that Mr. Passmore’s study does not reflect real life experience,” said NAHB Executive Vice President and CEO Jerry Howard.

“Fannie Mae and Freddie Mac play an integral part in the growth of our industry by providing capital in the marketplace to families who purchase our homes," said Howard. "Thanks to Fannie and Freddie, the customers of our 215,000 members have access to a world-class housing finance system that has contributed to the availability and affordability of housing credit.”

“I’ll let others debate the accuracy of Mr. Passmore’s report, although I find his conclusion that the GSEs only lower mortgage rates by around seven basis points to be highly questionable and contrary to a number of previous studies,” said NAHB Chief Economist David Seiders.

“Ironically, while this study was put forth to allegedly show the pitfalls of Fannie’s and Freddie’s ‘ambiguous relationship with the federal government,’ it does not take into account the major role that the GSEs played in helping to maintain the nation’s finance system during times of economic crisis.

“Specifically,” Seiders continued, “major events come to mind in which the secondary market helped the nation’s home buyers avoid the negative repercussions of major global and national economic emergencies. In 1998, the economies in Southeast Asia were reeling, the Russian market collapsed and the Moscow stock exchange shut down. This precipitated a nearly 1,000 point dive in the Dow Jones average. Financial markets across the world froze up and credit became scarcer.

“But the secondary mortgage market maintained its poise, and the GSEs remained funded and in fact raised record amounts of capital by issuing debt and even equity in the depressed market. As a result, the 1998 credit crunch did not affect the average home buyer seeking a typical home.

“More recently, the Sept. 11, 2001 attack that shook nearly every aspect of American life did not damage the mortgage market or the ability of average Americans to buy homes. During the week of Sept. 11, the GSEs offered stability and confidence to a shaken financial system by continuing to buy mortgage loans, purchase mortgage-backed securities and issue short-term and overnight funding.

“To this day, Fannie Mae and Freddie Mac continue to play a critical role in the nation’s housing finance system. The two mortgage financiers have reduced mortgage interest rates, linked mortgage finance to the national and international capital markets, eliminated regional disparities in interest rates, cushioned local economic downturns and brought standardization and innovation to the mortgage markets. And they have been at the forefront of technical innovations to streamline the mortgage process to reduce the time and cost involved in obtaining a mortgage.

"Furthermore, Fannie Mae and Freddie Mac have led efforts to create programs to expand homeownership and increase the supply of affordable rental housing by providing support to primary market lenders for the development of hybrid mortgages that combine the benefits of adjustable and fixed-rate loans; lower downpayment requirements; and new mortgage products for borrowers with tarnished credit histories.

“It’s a shame that the Federal Reserve study did not delve more closely into these matters,” Seiders concluded.

A Good Home Show Booth Can Drum Up Business

With the beginning of the home show season just around the corner, now is the time to re-evaluate your company’s current booth or consider finally exhibiting at your local home show.

Why attend home shows? Home shows give contractors the chance to market their company and products to thousands of potential customers who are planning remodeling projects and they also are the place to keep current with the latest marketplace trends.

A recent discussion by members of the Rhinos Remodelors™ 20 Club about home show booths provides some insights on how to successfully use this marketing venue.

Your first consideration is deciding whether to buy a booth from a manufacturer or to design and create a booth yourself. And that is a matter of deciding what works for you in providing the look and feel that best represents your company and its culture.

Erik Anderson, CGB, GMB, CAPS, of Anderson-Moore Builders in Winston-Salem, NC, says that when he looked at buying or renting a home show booth from a display company, he found that the designs were limited and expensive. “We built our own,” says Andersen. “Basically, our booth is made up of six 30-inch square columns on which we hang pictures on all sides. The back is a large panel with crown molding and nice trim. That is where we have our sign. We used carpet tiles for the floor.”

Robert DeHaan of DeHaan Remodeling Specialists, Inc. in Kalamazoo, MI, says that a home show booth should be simple and neat and look good. “Most people attending a show will not hire you because of your display,” he adds. “You just need an opportunity to tell your story.”

The booth should also be lightweight, DeHaan advises. It does not have to be built like a fortress. “Remember, you will have to carry and transport it to the show site and store it after the show,” he says.

Another consideration is the size of your booth. The biggest booth is not necessarily the best. Your aim should be to create a comfortable space in which you and your potential customers can move around and talk.

Anderson says his booth has an open center and enough space for visitors to walk around each of its six columns to look at pictures.

The majority of participants agreed that a 10-foot by 20-foot booth is usually big enough to avoid the overcrowding that will keep potential visitors, and customers, from stopping by.

Typically, your biggest concern at a home show will be drawing people to your booth.

Anderson says that his company sometimes raffles off a free design worth up to $1,500, which provides names and addresses for future mailings.

Make sure your booth is stocked with business cards, professional-looking tri-folds or other picture displays of previous work, company brochures, articles about your company and the awards it has won, and some designs.

DeHaan adds that companies should include plaques from their local home builders association and Remodelors™ Council for committees they chaired and other activities.

On the issue of whether companies should take names and telephone numbers at the show and contact the prospects the following week, DeHaan says that, “We decided not to take names, but told the visitors to call us the following week if they would like us to come out and talk to them about a remodeling project. Remember: if you get names you need to follow up right away.”

Finally, when preparing for a home show, don’t forget to bring a tall stool to lean on. It is unprofessional to sit in a chair.

If you would like to network with non-competing peers across the country to improve your bottom line, consider joining one of NAHB’s Builder or Remodelor™ 20 clubs. For information on joining, e-mail Cheryl Fortin, director of networking programs or call her at 800-368-5242 x8110, or complete the Builder or Remodelor™ application and fax it to 202-266-8199.

Online Reports Provide Information on Concrete Homes

Officially launched less than two weeks ago at the start of the new year, The Building Systems Councils’ Concrete Home Building Council (CHBC) is already offering a dozen research papers and reports to members of NAHB; to read them, click here.

The reports were prepared by the Portland Cement Association to educate builders on the merits of above-grade residential concrete construction. Included is information on the energy efficiency, fire resistance and noise properties of concrete homes.

Builders in California may take particular note of "Concrete Homes Stand Up to Earthquakes." The study finds that reinforced concrete walls offer impressive results in three important earthquake resistance properties: stiffness, strength and ductility.

CHBC membership is open to concrete and cement manufacturers who are members of NAHB; builders of concrete homes can join the Systems Builders Council.

For more information, contact the Building Systems Councils at 800-368-5242 x8676.

Florida Builders Showcase HBI’s Project CRAFT Program

A tour of the Home Builders Institute's (HBI) Project CRAFT training site at the Avon Park Youth Academy last month provided visitors with a glimpse of how the program is providing students with valuable hands-on experience at the same time as it is building facilities for the community at a significant savings in construction costs.

The visitors, who were invited by Tampa Bay Builders Association President Bill Paul, included Florida State Representative Gus Bilirakis (R-Palm Harbor); Tom McFayden, regional director of the Florida Department of Juvenile Justice; Mike Hickman, president of the Florida Home Builders Association; and Al Moretz, executive officer of the Highlands County Builders Association.

Featured on the tour were the newest additions to the campus, including two vocational training buildings constructed by Project CRAFT students that saved Florida taxpayers more than $200,000.

The group also visited a new pavilion built by Project CRAFT trainees that will be used by Air Force retirees vacationing at the neighboring Avon Park Air Force Base.

Bilirakis’ interest in Project CRAFT was sparked months ago in discussions with Paul and Hickman. A member of the Appropriations Committee, he is aware of the program’s valuable contributions to the state of Florida.

“We are proud of the partnership our industry has established with the Department of Juvenile Justice.” Paul said. “Project CRAFT is helping young people rebuild their lives while contributing to the state’s skilled workforce, and we are offering taxpayers a return on their investment. We want to share this with our policymakers in Tallahassee and are very pleased Rep. Bilirakis was able to visit the program.”

Project CRAFT (Community Restitution Apprenticeship-Focused Training) currently operates on seven sites. Four are located in Florida, funded by the state's Department of Juvenile Justice; the others are in Monroe Township, NJ; Dallas and Nashville.

The success of Project CRAFT was most recently cited in the U.S. House and Senate Conference Report to the FY 2004 Omnibus Bill, which provides funding to several government agencies, including the Departments of Commerce, Justice and State.

Project CRAFT was recognized in the report “as a model intervention technique in the rehabilitation and reduced recidivism of adjudicated youth.” The conferees who drafted the report encouraged the Office of Juvenile Programs to open Project CRAFT sites at new locations.

For more information on Project CRAFT programs, e-mail John Hattery at HBI or call him at 800-368-5242 x8916.

Pella Displays Latest Innovations at Builders’ Show

Pella will be exhibiting high quality windows and doors at next week’s International Builders' Show in Las Vegas.

Founded in 1925 and headquartered in Pella, IA, the company is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

Pella’s innovative products include the Rolscreen® retractable insect screen; window fashions under panes of glass; three-point locking mechanisms for increased security and energy efficiency; prefinished interiors; and many others.

Products and techniques will be demonstrated at the Pella booth — #C4689 — throughout the show every hour on the half hour. Company representatives will show how using Pella SmartFlash™ window and door installation tape and GREAT STUFF™ Pro Window & Door Insulating Foam Sealant, manufactured by Dow®, can significantly reduce callbacks. Builders can watch the demonstrations every hour on the half hour.

Pella will be highlighting enhancements to cladding color and hardware options, new shade and blind colors for Designer Series® windows and doors; entry systems glass and finish options; and new screens for windows and storm doors. Available for the first time on ProLine® double-hung windows, Simulated Divided Light grille options also will be shown.

Taking a cue from emerging color and finish trends in home furnishings, Pella will debut new color options for Designer Series window fashions under glass and Designer Series and Architect Series® exterior cladding colors. Also, Pella will unveil two new hardware finish options that will complement many of the hardware finishes being introduced in home furnishings and accessories.

Convention-goers will be able to see Pella products in action in the “Ultimate Family Home.” Built by Pardee Homes to display the latest in energy efficiency trends, the home actually will generate more energy than it uses. The home was designed by Bassenian/Lagoni Architects of Newport Beach, CA.

A Message From a Candidate for NAHB Vice President/Secretary

WOW. Twelve months ago, who envisioned that 2003 would be the year with more single-family housing starts than any year in our nation’s history? As we celebrate our astonishing success, we must maintain the vigil of collective preparedness, staying ahead of changing fiscal policy and economic conditions that adversely impact our industry. Just as our federal government has given us the benefit of low interest rates, so can this same great body take away other critical components to our success.

My message to you today is a call to action. I need your support in the upcoming election, so that I can do my part to keep our industry strong and vibrant. We are threatened with major changes to our mortgage delivery system, as well as to the primary advocacy for affordable housing within our federal government’s structure. These ill-advised changes to a mortgage finance system that is the envy of the world could create a lending crisis we haven’t experienced since the credit crunch of the late 1980s.

In recent months, the White House has promoted a plan to move oversight of Fannie Mae and Freddie Mac from HUD to the U.S. Department of Treasury. Of even greater concern, this plan has expanded to include recommendations that Congress strip HUD of its crucial, fiscally based housing overview responsibilities.

As GSE’s (Government Service Enterprise), Fannie and Freddie enjoy a favored status within the government and financial markets. This status provides the structural agility to succeed in all kinds of financial climates, utilizing a wide variety of lending institutions and delivery systems. This agility benefits our industry because these GSE’s respond quickly to the constantly changing needs of our buyers. Tampering with Fannie and Freddie could unravel many of the significant gains our industry has made over the last decade, particularly those that have helped us reach historic levels of homeownership.

These moves are not in the best interests of current and future home owners; and therefore, not in our best interests as home builders. Without HUD as our advocacy partner at the Cabinet level, how will we maintain the consistent focus of our federal government on affordable housing and its contribution to our economy?

We have not been offered a seat at this table, to participate in decisions affecting the future of our nation’s home builders. Incredibly, many sectors of our industry are complacent in this White House driven agenda. This is just not right. We can take comfort that the potent industry voice of the National Association of Home Builders will be heard, both in Washington and at home. We must and will withstand pressure from the Administration, making certain our demands are heard and acted upon.

Those who urged my candidacy for NAHB Vice President and Secretary know of my history of speaking up for what’s right, whether or not it’s politically correct. I pledge to you that if I am elected, I will work with the other Senior Officers and staff to stay focused on the critical housing issues of the time — those that affect your future and mine. Let me know your thoughts at bcnahb.com.

Thank you,

Brian Catalde,

Candidate for Vice President/Secretary

Stanton to Lead NAHB Legislative and Political Operations

Joseph Stanton is NAHB’s new senior staff vice president for legislative and political relations. In that role, Stanton will serve as the lead Capitol Hill lobbyist and manager of the association’s legislative and political operations.

Stanton, a former NAHB employee with more than 15 years of government relations experience at the local, state and federal levels, returns to the home builders after serving as the vice president for government relations at the Beer Institute in Washington, where he lobbied on behalf of the American brewing industry on a wide range of regulatory and legislative issues. Prior to joining the Beer Institute, he was a principal partner in the consulting firm Legislative Strategies Group from 1998 to 2000.

Stanton has several years of legislative experience working on Capitol Hill, including his tenure as a legislative manager in the office of the Doorkeeper of the U.S. House of Representatives.

Stanton worked for the home builders from 1986 to 1990, serving as a senior congressional representative in the former Government Affairs Division of NAHB. He left the association to become director of congressional relations for the Public Securities Association (now the Bond Market Association), where he helped to coordinate issues for member groups that trade, underwrite or sell municipal, mortgage and U.S. government securities.

Indiana Builder Named an Entrepreneur of the Year

In National Entrepreneur of the Year Awards® presented in Palm Springs, CA, in late November, Paul Shoopman, a member of the Builder Association of Greater Indianapolis, was named one of 2003's top 10 entrepreneurs in the nation and the leader in real estate and construction by the accounting firm of Ernst and Young.

Shoopman was cited for demonstrating that high quality homes can be affordable. His firm, Dura Builders, builds between 600 and 700 homes a year in the $90,000-$250,000 range.

The Indianapolis-based company has its own manufacturing plant, engineering and surveying service, development firm and mortgage lending service. "This vertically integrated approach provides a great convenience for customers by allowing them to apply for a mortgage, view a model home and select their own color palette all in one place," it was noted during the awards.

Shoopman used the industrial arts skills he learned in high school to follow his two brothers into construction. He started out building custom homes one home at a time and also did concrete work for a large production builder. Refused financing by every bank in town, he was able to build his first home at 18 after his father signed for the bank notes for the lot and building materials.

In 1979, the beginning of a five-year period of a severe economic downturn with peak interest rates of 21%, “I just shifted gears,” Shoopman recalls. “I went into housing production because nobody was buying custom homes, and my decision turned out to be perfect timing.”

Bill Carson, chief executive officer of the Indianapolis builders, says that Shoopman “has a tenacious approach to everything he considers worthwhile.”

He became interested in the NAHB Spike Club in the late 1980s and in his first-year recruitment efforts brought in 84 members, making him the nation’s top producing Spike. In 13 years he has recruited 500 Spikes, a record that is surpassed by only one individual in the history of Indiana.

Dura only considers bids on work that come from members of NAHB. He is a Gold Key member of BUILD-PAC, NAHB’s political action committee.

One Home at a Time, Mississippi Builder Putting Working Families on the Road to the American Dream

A thousand-square-foot, two- or three-bedroom, slab-on-grade ranch house may sound like pretty basic accommodations these days, but for typical working families in small town and rural America, that home can be a virtual palace.

In his 33 years in the home building business, incoming NAHB President Bobby Rayburn has applied his talents to providing households with a footing on the lowest rungs of the proverbial housing ladder. So it comes as no surprise that the Jackson, MS, builder has decided to make “Housing America’s Working Families” the association’s top priority in 2004.

Rayburn’s focus on helpi