Nation's Building News Online: March 15, 2004Print All Articles Text Version |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sponsored by Countrywide Home Loans National Builder Division |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major Initiative to Provide ‘Workforce Housing’ in One Thousand Communities Across the CountryAt the site of a renovation project that will provide 228 affordably priced rental and condominium units in a revitalized neighborhood of Washington, D.C., NAHB President Bobby Rayburn last week was on hand to announce that the nation’s home builders are joining with Fannie Mae in a major “workforce housing” initiative to expand the stock of affordable housing for working families in 1,000 communities across America. A key goal of the effort is to ensure that teachers, police officers, firefighters and other public servants can afford to own or rent in the communities that depend on them. Rayburn offered his congratulations to Michaels Development, which along with the Community Preservation and Development Corporation, a local non-profit organization, and financial support from the Department of Housing and Urban Development, is finishing up work on Wardman Court, three historic mid-rise structures that were seriously deteriorated. “Wardman Court shows us what can be done with a strong partnership, a dedicated builder, commitment from the neighborhood and strong financial backing from Fannie Mae and other partners,” Rayburn said. “These are the key ingredients in bringing quality, affordable housing to any community. And most important, these homes are making a difference in the lives of the families who live here.” Under the new partnership announced in Washington, NAHB and Fannie Mae have agreed to work together to identify a metropolitan area that will serve as a laboratory on how to provide workforce housing, Rayburn said. “Within that metro area we will work to increase the availability of workforce housing in specific neighborhoods, and we will seek to establish a coordinated effort among the local home builders association, individual home builders, financial institutions, local governments and other partners in the real estate arena,” he said. The successes in this effort will then be replicated in communities across the country, Rayburn said, and the initial location for the initiative should be selected by June 30. The workforce housing initiative is part of Fannie Mae’s expanded American Dream Commitment®, which is designed to help tackle the toughest housing problems facing the country. Previously announced phases of this commitment include plans to expand access to homeownership for millions of first-time home buyers and help to raise the minority homeownership rate to 55%. As part of the latest phase of its commitment, Fannie Mae is also significantly increasing its investments in Native American lands and rural areas; increasing investments in residential acquisition, development and construction financing to $10 billion for both homeownership and rental housing; and increasing its existing pledge to finance multifamily housing from $175 billion to $200 billion by the end of the decade. Franklin D. Raines, chairman and chief executive officer of Fannie Mae, noted that for the first time his company is also focusing on its role to increase the availability of permanent supportive housing for people who are chronically homeless. “While America is among the world’s best-housed nations, homelessness is still a chronic problem,” Raines said. “Fannie Mae is going to invest our creativity and our capital to help key housing organizations expand the stock of permanent supportive housing for families that are homeless.” Photos by Paul Lopez Building News Coast To CoastRobots That Build (But Still Won't Do Windows)The brainchild of University of Southern California engineering professor Dr. Behrokh Khoshnevis is a computer-controlled robotic gantry that can build concrete walls layer by inch-thick layer, and Khoshnevis believes such technology could pave the way for completely automated construction. "Our goal is to completely construct a one-story, 2,000-square-foot home on site in one day, without using human hands," the professor explains. It is expected that later versions of the robot gantry will be capable of building compound curves as well as right angles, while Los Angeles architect Greg Lynn believes such machines could change the face of architecture. "I'm convinced this will allow you to make beautiful, innovative and as yet unimagined kinds of houses," he extols. The robot came out of Khoshnevis' desire to apply the principles of rapid prototyping to architecture, and the professor envisions a larger version of the device that "prints out" houses in concrete. Khoshnevis also holds patents in sintering, a chemical process in which powders are turned into solid shapes by computer control. After the machine is perfected, the drying process for concrete will need to be accelerated in order for the technology to become commercially viable. Khoshnevis notes that architects could sell fundamental designs that customers could then adapt and tailor to the concrete printer using special software Khoshnevis' project is a joint effort between USC's engineering school and its Information Sciences Institute; funding has come from the National Science Foundation and the Office of Naval Research Khoshnevis is seeking $5 million to continue developing the robot technology, known as contour crafting. Bill Would Make It Easier to Convert Apartments Into CondosA controversial proposal would change California law to make it easier for property owners and developers to convert apartments into condominiums, a trend that has been growing nationwide in recent years. Democratic assemblyman Joe Canciamilla is sponsoring the bill — which removes some local restrictions on the sale of converted condos, or "rondos," in an effort to promote homeownership in the state. Rondos first gained popularity in California in the 1970s and early 1980s but fell out of favor in the wake of construction defect lawsuits and stringent building standards that made conversions cost-prohibitive. However, the properties are regaining popularity in California as well as in Miami, the District of Columbia and elsewhere in the nation. Indeed, New York-based Real Capital Analytics counts 15,488 apartment-to-condominium conversions in 2003, compared to just 5,865 units that were converted the year before. Under California's AB 2175, meanwhile, rental units could be sold as condos if: the conversion is approved by a majority of tenants, renters are given the opportunity to buy their units first, and those who opt not to buy are allowed to continue renting. Despite these assurances, tenant advocates are likely to oppose the measure. Housing advocate Christine Minnehan of the Sacramento-based Western Center on Law and Poverty worries that the legislation could force poor people who cannot afford to buy out of their rental units. What Slowdown? Home Sales Heat Back UpA number of housing economists are revising their home-sale outlooks for 2004 as interest rates remain under 6%. Freddie Mac Chief Economist Frank Nothaft, for instance, now predicts that sales could jump from 7.2 million in 2003 to a new record of 7.3 million this year. Though low interest rates generally make homeownership more affordable, buyers in California, Nevada, Virginia, Florida and other hot markets will watch prices soar due to high demand and a lean supply of properties for sale. Mortgage rates will eventually rise when the job market improves; but in the meantime, real estate agents are urging buyers to pen personal letters to sellers, eliminate appraisal or inspection contingencies and agree to escalation clauses if they hope to emerge victorious from bidding wars. Housing Boom Attributed to BoomersCiting Census Bureau statistics, Cheryl Russell of newstrategist.com reports that the baby boomer generation has emerged as a driving force behind the blockbuster housing market. The sector cranked out an unprecedented 6.1 million resales and roughly 1.85 million housing starts last year, pumping the national homeownership rate up to 68.3%. Homeownership was highest among those between the ages of 55 and 64, at 81.4%, followed by those aged 65 and up, at 80.5%. Russell notes that baby boomers will swell the ranks of those two age categories over the next 20 years. Great Room Moves OutsideThe great room has gained popularity among home owners as a means of merging the kitchen, dining room and family room; and, now, the concept has moved outdoors. A growing number of home owners are creating outside spaces to cook, eat and entertain. Though exterior great rooms lack actual walls, many are housed under gazebos or pavilions for shelter or use posts or columns as boundaries. Upscale gas grills, islands with sinks and appliances, outdoor fireplaces or fire rings, water gardens or fountains and high-end outdoor furniture are just some of the many accessories used to outfit these spaces. Lighting is also important for cooking and accentuating the landscape, and waterproof table and floor lamps make it possible for outdoor great rooms to be used after dark. Homeownership Rates Rise in U.S.Freddie Mac reports a boost in the nation's homeownership rate from 68.4% in the third quarter of 2003 to an all-time high of 68.6% in the fourth quarter. In other news, the national home-price appreciation rate hit 8.4% last year, after reaching a 27-year high of 17.8% during the fourth quarter. Home values on the West Coast jumped 13.1%, exceeding the appreciation rate of all other regions. The New Trends in Home DesignBuilders are catering to demand for large vacation homes that accommodate several families with mini-master suites, dormitory-style rooms and plenty of privacy. Teardowns also are gaining popularity, especially in neighborhoods with top-notch schools, soaring land prices and small homes. The trend is evident, among other locales, in northern Lake Michigan — where production builders are razing older houses and replacing them with $1 million-plus dwellings. However, many communities, worried that teardowns will radically change the landscape, have imposed height restrictions and other requirements. In response, builders in Lake Michigan are digging elaborate basements with lofty ceilings and upscale amenities. Meanwhile, multifamily developments are popping up across the country, even in Southern and Western locales that have long favored single-story structures. Multifamily construction generally involves infill projects on vacant lots, mixed-use developments with ground-floor retail, or high-rise and mid-rise condominium towers. Roaming Around the HouseJupiter Research projects that the number of homes equipped with Wi-Fi will jump from 4% in 2003 to 8% this year. Wireless technology is going mainstream now that devices are cheaper and easier to install, but scores of home owners still complain of dead spots. More and more residents want wireless Internet access; and companies are now offering antennas, range extenders and signal repeaters to fill service gaps. Still, some home owners are forced to install additional base stations to reach all corners of their dwellings. However, these gadgets may not solve all of their problems. The limited range of antennas and the need to purchase devices from the same company to ensure compatibility are just some of the drawbacks. Some of the most problematic properties are ranch homes, where the signal fades from one end of the house to the other; and two-level homes, where the signal may not be able to reach all the way up. The homes most suited for Wi-Fi, meanwhile, are newly constructed abodes built with drywall, thinner wood and less brick. If You Haven't Looked at Steel Roofs Lately, It's Time You DidMore and more home owners are opting for steel roofs over those made of wood shingles, clay tiles, slate and fibrous cement. Steel roofs can withstand earthquakes, fires and strong winds, and they are rust-resistant and strong enough to walk on. They also keep residences cooler during the summer. Home owners will spend more for steel roofs, but they are lightweight and more durable. Moreover, they can be purchased in a multitude of colors to match a dwelling's architectural style and can even be coated to resemble shingles, slate and tiles. Not Your Father's FlooringToday's home owners are throwing out carpets in favor of hardwood floors, which are perceived to be as elegant as crown molding, chair rails and wainscoting. According to the Pittsburgh-based Hardwood Information Center, wood floors can boost a home's resale value by upwards of $10,000. Home owners like hardwood floors because they are easy to clean and durable. Hardwood also is gaining popularity because it offers a number of options in terms of the type of wood, finish and price. Home owners can opt for reclaimed wood from old factories or barns; exotic woods like cherry or red mahogany; engineered wood, which is moisture-resistant, for use in basements; or laminates. They also must choose between prefinished or unfinished wood — the latter of which requires sanding, staining and varnishing after installation. Home owners are even using tiles alongside hardwood and having inlays and designs put on their floors. Bathroom BeautiesRepresentatives from Harvard University's Joint Center for Housing Studies estimate that home owners boosted their spending on remodeling from $153 billion to $214 billion between 1995 and 2001, during which time bathroom expenditures surged from $9.9 billion to $10.5 billion. Bathrooms once were used solely for showers and other basic activities, but today's home owners consider them as places to relax and retreat from the world. Steam showers, body jets, flat-screen televisions, small refrigerators, waterproof stereos and radiant-heat floors are just some of the accessories found in new bathrooms. Some home owners are even shelling out more than $1,000 for toilets with heated, massaging seats and air-drying functions. Less affluent home owners, meanwhile, can choose from a multitude of tiles and wallpaper patterns to jazz up their bathrooms. According to NAHB economist Michael Carliner, many new homes have a bathroom for each resident. For New Buildings, Digital Models Offer an Advance Walk-ThroughPhiladelphia-based AEI Digital, a branch of architecture firm EwingCole, allows buildings to be displayed in a highly detailed, three dimensional digital format. This allows people to experience what a structure will be like before it is constructed. John Weber, director of sales for the Philadelphia Phillies, says a cyber replica of the franchise's new ballpark helped familiarize the city with the new stadium and also helped boost advertising, sponsorships and the number of seats sold. The technology used by AEI is based on tools previously used by the video game and motion picture industries, says AEI Digital's president Michael Schuldt. Berkeley, CA- based architect Jonathan Cohen adds that such computerization can help people assess how buildings will function under multiple conditions. Schuldt notes that architects and engineers have traditionally used separate systems for design and construction. "It's just not practical right now to walk around with a laptop or large PDA on a construction site to get this information," he says, but by using digital models, details can be added to make buildings "as close to photo-realistic as we can get it." A digital model from AEI costs approximately $35,000-$60,000 to make, based on degree of difficulty, says Allison Holt Smith, director of business development. Handhelds Could Run Desktop SoftwareRadixs Private Ltd. of Singapore plans to roll out an operating system for PDAs, cell phones, tablet PCs and other handheld devices. The company's Motion eXperience Interface (MXI) will bring Windows, Linux and Java-based software to mobile gadgets. "You can have your full desktop experience, with the applications deployed without any form of code rewrite," remarks Radixs Chief Executive Chandrasekar Rathakrishnan. Forward Concepts analyst Will Strauss says it is too soon to tell whether MXI will help handhelds replace laptops, considering that handhelds have smaller displays and keyboards. In the CardsWith PCMCIA cards from Verizon Wireless, Mobile Networks and other cellular providers, users can access data on their handhelds, laptops and desktop PCs at broadband-like speeds. These cards cost $30-$150, and users must shell out another $40-$80 per month to use the cellular network. High-speed wireless data services are currently available in only a few metropolitan areas; users in other locales will be able to access data at speeds similar to dial-up modems. In Living ColorBefore investing in a color laser printer, companies ought to take their budgets and production needs into consideration. The Dell A960 is a wise choice for small business at just $179. The A960 performs standard faxing, scanning and copying functions, but users must have Windows 2000 or XP in order for it to work. Businesses that need documents printed quickly should consider the $1,000 Xerox Phaser 8400, which prints a single page in just six seconds. Both the $699 Samsung CLP-500 and the $1,999 Brother HL-4200CN have automatic duplex functions, but the Samsung prints only five color pages per minute. NAHB President Meets With EPA Administrator to Seek Balance on Regulatory IssuesIn a meeting last week with Environmental Protection Agency Administrator Michael Leavitt, NAHB President Bobby Rayburn discussed collaborative efforts that the agency and the nation’s home builders could jointly pursue to advance housing opportunities and economic growth while protecting the environment. At the top of the agenda were effluent limitation guidelines to limit the amount of pollutants in storm water discharges from construction sites. The EPA is under court order to announce its final decisions on this issue by the end of this month, and NAHB has been working with the agency to ensure that the regulations are not unnecessarily burdensome to residential development. Rayburn urged the Administration to make no changes to its existing storm water regulations. Citing the uncertainty that landowners face in trying to determine what lands may or may not be subject to wetlands regulations, Rayburn expressed extreme disappointment over the EPA's decision in December not to revise regulations to clarify this issue. On the issue of brownfields, Rayburn received assurances from the administrator that he will look into the the agency’s land revitalization programs and how they can provide adequate liability protection for developers who put brownfield properties back into productive use. Leavitt indicated to Rayburn that he is concerned about the issue of gathering good data and information as the basis for all of his agency’s rulemaking, and Rayburn agreed that good science must be the cornerstone for all regulatory actions and suggested that the EPA seek to identify areas where collaborative efforts might be productive. NAHB will also be meeting with the EPA’s Office of Water staff to explore solutions to the storm water general permit issue after Rayburn expressed concern over a Ninth Circuit Court decision and how it might affect the availability of this streamlined permit process. Likewise, NAHB will continue to pursue reforms of EPA storm water enforcement initiatives. Photo by Herman Farrer Housing SnapshotMortgage interest rates dropped sharply last week, leading Freddie Mac Chief Economist Frank Nothaft to speculate that mortgage interest rates this year could average lower than they were last year. Nothaft expects adjustable rate financing in 2004 to account for the highest share of the mortgage market since 1995. On the broader economic front, uninspired by the gains they have been seeing in the job market, consumers were losing confidence early this month, according to the University of Michigan. But if Federal Reserve Chairman Alan Greenspan turns out to be correct in what he told Congress last Thursday, consumers may soon have more to cheer about. Greenspan voiced confidence that the job situation will be turning around shortly. The Commerce Department reported a record $541.8 billion U.S. trade deficit in 2003, and terrorist railroad bombings in Spain had a major downward impact on the stock market in their immediate aftermath. Framing lumber was down for a change last week, according to Random Lengths, falling by $6 to $392 per 1,000 board feet. A persisting concern for home builders, the prices of oriented strand board and plywood remained high: the mill price for 15/32-inch 3-ply CDX Southern Westside plywood was $490 per 1,000 square feet; and OSB was $498. Mortgage Interest Rates30 Year Fixed Rate: 5.41\% Housing Starts: Jan. 2004Total: 1.903 million\% New Home Sales: Jan. 2004 *1.106 million Existing Home Sales: Jan. 2004 *6.04 million * Seasonally Adjusted Annual Rate For Working Families, Affordable Housing Is in Short SupplyIt has been the best of times and the worst of times for housing in America. It’s been the best of times for the 68% of families — an all-time high — that have achieved the dream of homeownership and the economic benefits that come with it. And it’s been the worst of times for millions of families that struggle to find housing that meets their needs. While we can take pride in our outstanding homeownership rates, we must remain committed to meeting the housing needs of all Americans. The statistics are staggering. Millions of the nation’s working families spend more than half of their income on housing or live in seriously substandard conditions. These aren’t just statistics. This means that millions of Americans struggle to find an adequate living environment. It means that millions of mothers and fathers must worry about providing adequate shelter for their children. A recent study by the National Housing Conference (NHC) found that the median income of the nation’s elementary school teachers, police officers, licensed practical nurses, retail salespersons and janitors is well below the amount needed to qualify for a median-priced home in the United States. Even more telling, families dependent solely on the income of a janitor or retail salesperson pay more than 30% of their income — the upper limit of affordability — for a two-bedroom apartment in the nation’s 60 largest metropolitan areas. And in markets as diverse as Boston, Dallas and West Palm Beach, FL, apartment rents often require more than 30% of household income for two-income families. The statistics point to a chronic affordability problem. It is absolutely essential that our communities take the steps necessary to ensure an adequate supply of housing that is affordable to working families. Our cities and towns need housing that is affordable for teachers, police officers, firefighters and other public servants, as well people working in the service and retail industries. These are the people who teach our children, keep our streets safe and provide the services we depend on. A growing number of working Americans are forced to commute long distances, or they live in housing that simply does not meet their needs. These working people are an important part of the social fabric. A community suffers when the people who provide its essential services go home to another city or town at the end of the workday. We need four things if we are to solve this problem:
The solutions to our nation’s housing affordability crisis will not come easily. This problem demands the attention of the private sector — builders, developers, lenders, architects, citizen groups — as well as that of government at all levels. This is a problem we cannot ignore. Our nation’s families deserve real and lasting solutions. NAHB President Rayburn Discusses Housing Priorities With Leaders in WashingtonNAHB President Bobby Rayburn embarked on a four-day visit to Washington last week to impress upon Bush Administration officials and leading members of the Senate and House the need for action on a wide range of legislative and regulatory issues affecting the nation’s housing industry. “My message to Congress and the Administration is that NAHB members are going to stand united, we are going to be heard and we are going to fight to maintain a healthy secondary mortgage market; to seek fair and balanced solutions on lumber and other environmental issues; and to pursue a strong national policy agenda for housing to open new opportunities for millions of working American families who are unable to purchase or rent a decent home,” said Rayburn. Toward this end, Rayburn met with Environmental Protection Agency Administrator Michael Leavitt and many of the nation’s most influential lawmakers, including Senate Majority Leader Bill Frist (R-TN), Senate Minority Leader Tom Daschle (D-SD), Senators George Allen (R-VA), Thad Cochran (R-MS) and Trent Lott (R-MS), House Majority Whip Roy Blunt (R-MO), House Financial Services Committee Chairman Michael Oxley (R-OH) and Reps. Randy Neugebauer (R-TX) and Bennie Thompson (D-MS). Rayburn made it clear that NAHB wants to work with Congress and the Administration to:
Photos by Herman Farrer Rising OSB and Steel Prices Raise Concerns as Peak Building Season NearsAs the peak season for home building rapidly approaches, analysts at NAHB are monitoring the building materials situation on several fronts and in a few areas they don’t like what they see. The source of the greatest concern has been the most recent run-up in the price of oriented strand board, but the rising cost of steel around the globe is also being watched closely because it could trigger delays in delivery of construction materials. NAHB economist Michael Carliner said that he is particularly worried that OSB prices could get even worse than they are now as residential construction hits its full stride this spring. The price of OSB was running at almost $16 for a four-by-eight-foot sheet earlier this month, according to Random Lengths, an indication that demand was exceeding capacity even during a slow season for construction activity. “The basic problem is a shortage of capacity and inability to meet home building demand,” Carliner said. “There were only slight increases in OSB capacity in 2002-2003, and only one new plant is scheduled for 2004. Capacity in North America will increase about 4% by year-end.” Carliner said that it takes a fairly long time to build an OSB plant and get it up and running at full capacity, so it could be a year before there is any slack in the market. Weakness in non-residential construction has freed up supplies for many building materials, he noted, but that hasn’t been the case with OSB, because 65% of the supply is used to build homes and another 25% to renovate them. About a third of the OSB and plywood going into new homes is used for wall sheathing; a quarter is used for floors; and about 45% is for roofs. Non-structural sheathing can be substituted for walls, with appropriate strengthening of the framing, Carliner said, and many builders have already switched. But there is no easy alternative for floors and roofs. NAHB has been discussing the problem with OSB producers, and it has been advising its members about this and other emerging problems while at the same discouraging panic buying, which could make the situation worse. The NAHB Research Center has also prepared information on alternative materials. In the meantime, rising steel prices are triggering concerns about truss plates and the many other components steel goes into. There are similar, though less severe problems with copper and other metals. Because steel accounts for a relatively small share of the cost of a new home, except where steel studs or roofing are used, “the biggest concern is probably not the prices,” said Carliner, “but the possibility that supplies will be rationed and builders will have their construction schedules disrupted by delays in receiving materials.”
Don’t Miss NAHB’s Spring Construction Forecast Conference See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site for more information. Atlanta Leads Nation in Single-Family Housing Activity for 13th Consecutive YearThe greater Atlanta area, which recorded 53,750 single-family housing permits last year, led the nation in housing activity for the 13th consecutive year beginning in 1991. Rounding out the top five housing markets for single-family permits were the metropolitan areas of Phoenix-Mesa with 46,590, Riverside-San Bernardino with 35,730, Houston with 33,970 and Washington, D.C. with 30,760. The total number of single-family permits issued across the country in 2003 was 1.444 million, according to the Commerce Department. "We are excited to be the most active housing market in the country once again. It has been a long run," said David M. Smith, president of the Greater Atlanta Home Builders Association and a builder/developer in the Atlanta metropolitan area. "Overall, housing demand has remained strong and the market has been vibrant, but we are seeing changes in buying activity. "The market for higher end homes has fluctuated during the last two years, though it has been gaining strength in recent months. The first-time buyer and first-time move-up markets have not slowed since 1991," said Smith, who is also president of Hedgewood Development Corporation. "Low interest rates continue to fuel the market and are a major factor behind the strength of our entry-level market. Coupled with the recent increase in job growth occurring throughout the Atlanta area, we are optimistic about 2004." During Atlanta’s more than decade-long reign as the most active housing market in the country, total annual building permits in Greater Atlanta have ranged from a low of 24,684 in 1991 to a high of 66,550 in 2002. The Houston metropolitan area, which 15 years ago ranked 32th in the country with 6,788 single-family permits, moved up to fourth in the nation last year. "Houston is hot, and that is not just the weather," said Mike Karm, president of the Greater Houston Builders Association and of Larus Builders, Inc., a builder in the greater Houston metropolitan area. "New home starts have broken records and pumped billions of dollars into the local economy over the past few years." "Due to the strong and diverse economy here, low interest rates and the fact that the Houston housing market is truly synonymous with value, we are experiencing a truly preeminent building market. When high-end housing slowed, the affordable market took up the slack. We are excited here in Houston about the future," said Karm. Across the country, the top 20 most active metropolitan areas accounted for 33%, or 480,330, of the single-family permits issued nationwide during 2003. Following are the rankings and single-family permit totals for the top 20 markets:
For a current listing and ranking of the major metropolitan areas for single-family permits, click here. For a current listing by region and state of major metropolitan areas for single-family, multifamily and total permits, including the percent change from the year before, click here.
Don’t Miss NAHB’s Spring Construction Forecast Conference See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site for more information. New Study Weighs in on California’s Housing WoesA controversial new study by the Public Policy Institute of California (PPIC) is the latest to document that the Golden State is having trouble keeping up its housing supply, with especially sharp shortages in the state’s top three employment centers. The report, "How Critical Is California's Housing Shortage?," estimates between 1993 — the low point for the state’s housing downturn of the early 1990s — through 1999 housing was under-produced by 30% in Los Angeles County, 21% in the San Francisco Bay area and 20% in the San Diego region. Timothy Coyle, senior vice president for governmental affairs of the California Building Industry Association, criticized the methodology that was used to estimate the extent of the housing shortfall in the latest research, but agreed with the report’s finding that growth controls and governmental constraints are significant factors in limiting the supply of the new housing that is needed. Previous research has placed the California housing shortfall at about 1 million units, considerably higher than the estimate released by the institute last week. “The report looks back at the past decade, perhaps as a way to justify its low estimate of unmet housing needs, but in so doing it overlooks what every reputable scholarly institution is telling us — housing shortages are crippling affordability,” said Coyle. “As all economists will tell you, high prices signal market shortages, and no state has higher housing prices than California.” He cited a report from the California Association of Realtors® that the median price for an existing home in January was $405,720, 21% higher than a year earlier and 68% above the price in 2000. The Realtors®, Coyle said, also reported that “constraints on supply continue to impact both the availability and affordability of housing options for California families,” with only a two-month supply of homes on the market compared to the seven- to 10-month supply that is considered normal. Coyle also voiced concern with the report’s implication that there might be some benefit from retreating from residential development in areas with the greatest housing demand and pushing home building to inland areas. Noting that the three areas in which housing shortages are the greatest cause for concern “are the least receptive to new construction, and other research has indicated that restrictive land-use policies in these regions exacerbated the shortages,” the report's authors suggest that “policies could be enacted to encourage job growth in areas with relatively abundant housing, perhaps by providing infrastructure in less developed areas adjacent to existing job centers.” “Housing needs all over the state demand public policies that support new development,” Coyle responded. “Despite the warnings from PPIC, California policymakers should not yield to NIMBYs and other no-growth advocates and abandon the so-called coastal areas when that’s where the people and the jobs are. To do so would be bad public policy — driving development further and further away from job centers and placing greater stress on the environment as well as on California’s working families.”
Don’t Miss NAHB’s Spring Construction Forecast Conference See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site for more information. Report Cites Economic Benefits of California Home BuildingNew housing construction is making a major contribution to the health of California’s economy, a recent study finds, and those economic benefits would be even greater if the state could find ways to bring annual production up to the levels that are actually needed. New housing production each year brings about $40 billion to the California economy and creates an estimated 359,000 jobs, according to “The Economic Benefits of Housing in California,” which was prepared by the Sacramento Regional Research Institute. Half of the economic boost comes as a direct result of new home construction, the study finds, while the balance is from industries that supply goods and services to the construction industry and from retail and consumption sectors that service the employees of the construction industry and its supplier industries. Every dollar spent on new housing construction in California generates approximately $1.95 in total economic activity, the study says. Looking at the larger picture, housing’s economic impact extends beyond the construction of new units to ongoing sales, financing, brokerage, repairs, management and operation of existing housing units, according to the institute’s research. “When all facets of the housing sector are considered — including new home construction, residential real estate transactions, expenditures of home owners, employment, maintenance and operation of housing and the expenditures of employees of the housing sector and its supplier industry,” Sacramento researchers estimated that housing annually:
The report based its findings on data from 1997-2001, when annual housing production averaged 132,000 units. According to the state’s department of finance, the amount of housing actually needed to meet demand over the past 12 years averaged closer to 230,000 units a year, suggesting the significant potential for additional economic growth.
Don’t Miss NAHB’s Spring Construction Forecast Conference See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site for more information. Eye on the EconomyBy David F. Seiders, NAHB Chief Economist Available indicators suggest that first-quarter growth of real gross domestic product (GDP) is heading toward an annual rate of about 4.5%, even better than the final quarter of 2003 (4.1% according to the preliminary estimate released by the Commerce Department on March 1). Despite more than two years of positive economic growth, and several consecutive quarters of downright robust growth in real GDP, the U.S. labor market refuses to improve appreciably. The eagerly awaited employment report for February (released March 5) not only showed unexpectedly meager payroll job gains for that month, the report also revised away some of the meager growth that had been reported for the two previous months. Furthermore, the report continued to show stagnant average weekly hours and average hourly earnings. In addition, the malaise in the labor market was accentuated by further erosion in the labor-force participation rate — reflecting a distinct lack of enthusiasm by the unemployed about job prospects. Corporate America and Bush economic policies are in the Democrat’s gun sights … Ongoing efforts by corporate America to boost productivity (output per hour) and to protect profit margins from rising benefit costs apparently are the key factors behind stagnant job growth. And the much-publicized outsourcing of U.S. jobs to low-wage places like China and India also is taking a toll. One of the few components of the U.S. labor market that is showing persistent growth is temporary help services, a type of hiring that can easily be reversed and does not expose companies to benefit costs. The presumptive Democratic nominee for president, John Kerry, immediately made hay out of the February employment report, decrying Bush economic policies and ridiculing recent White House forecasts for robust job growth in 2004. President Bush and his advisors could only say that things are bound to get better. Most private forecasters, including NAHB, have been scratching their heads and trimming their job growth forecasts (but not their GDP forecasts) for the rest of the year. And it’s now only eight months until the elections! Chairman Greenspan goes off the reservation to attack the housing GSEs … Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, the housing-related government-sponsored enterprises (GSEs) have been under fire for about a year, following revelations of accounting and management irregularities that cropped up primarily at the secondary market GSEs (Freddie and Fannie). As a result, fundamental questions have been raised about the adequacy of GSE regulation and capital standards as well as about potential risks posed by GSEs to U.S. and global financial systems and to U.S. taxpayers. On Feb. 24, Federal Reserve Chairman Alan Greenspan testified before the Senate Banking Committee on the topic of GSEs. The hearing was supposed to focus on the regulatory structure for the GSEs, but the Greenspan’s remarks were much broader than that and contained the following hard-hitting recommendations:
Chairman Greenspan obviously has raised enormous issues and has made highly controversial recommendations. Indeed, the issues and recommendations are so extensive that Congress and the Administration inevitably will find the task of re-regulating and possibly restructuring the GSEs even more daunting than before! It’s always tough to craft and enact major pieces of legislation in an election year, and it now seems even less likely that a major GSE bill will succeed in 2004 — barring more revelations of accounting/management problems at the GSEs. Federal regulators give conflicting views on fixed-rate vs. adjustable-rate home mortgages … The home mortgage market is rich in options that range from the traditional 30-year fixed-rate mortgage to adjustable-rate loans that are tied to short-term market indexes (like the London Interbank Offered Rate — LIBOR). The various mortgage options are used by home buyers with widely different planning horizons, different tolerances for interest-rate risk and different needs in terms of affordability. This flexible system obviously has been working quite well. Indeed, great financing conditions shepherded the nation’s homeownership rate to an all-time high at the end of 2003, and the quality of mortgage credit has been very well maintained throughout the current cycle. Fed Chairman Greenspan dropped bombshells on the mortgage finance system on March 1 when he questioned the economics of the fixed-rate mortgage and argued that many home buyers had somehow been missing the boat by not opting for adjustable-rate loans — even though the ARMs would saddle them with interest-rate risk! This bizarre salvo from our central bank could have been aimed at the secondary market GSEs (Fannie Mae and Freddie Mac) that Greenspan was about to attack the following day on Capitol Hill. After all, the GSEs have been stressing the central role they play in making the fixed-rate mortgage available to home buyers at attractive rates, at all times, in all areas of the country. In a strange turn of events, the Federal Deposit Insurance Corporation (FDIC) issued a report on March 2 that took a whack at ARMs! The FDIC warned depository institutions that ARMs not only pose risks to home owners when interest rates rise but also pose credit risks to banks that hold these loans. The FDIC is concerned about rising interest rates that could cause house values to fall and provoke mortgage defaults — resulting in net losses to banks when house values fall below mortgage balances. Both Chairman Greenspan and the FDIC are off base on mortgage products … By March 2, Chairman Greenspan publicly conceded that he “probably spoke imprecisely” the day before and “did not mean to disparage” fixed-rate mortgages. In fact, the chairman noted that the 30-year fixed-rate home mortgage was a “great invention” in the market. As for the FDIC, the concerns about adjustable-rate loans made by depository institutions in areas where high home prices make fixed-rate loans unaffordable to many prospective home buyers not only represents a backward step on housing affordability but also seems misplaced with respect to credit quality. Properly underwritten ARMs with periodic rate-adjustment caps should not be a credit quality problem in the context of reasonable forecasts for the economy and interest rates. Furthermore, house values in the places the FDIC is worried about are very well founded on high land values, and theories of house price “bubbles” are retreating into the woodwork as the national economic expansion proceeds. It’s one thing for the FDIC to worry about “sub-prime” lending practices by federally insured depository institutions. But the FDIC should not sully the mainstream ARM market that supports home sales in many high-priced markets. It’s time to review the key assumptions underpinning NAHB’s forecasts … NAHB’s short-term forecasts for housing and the economy are grounded on a number of assumptions regarding public policy and developments on the international scene. These are the key assumptions for 2004-2005:
If our assumptions are on target, the outlook for housing and the economy is bright … NAHB’s forecasts for 2004-2005 currently contain the following key features:
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 March 10 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.
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.
Don’t Miss NAHB’s Spring Construction Forecast Conference See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, project budgets and other economic bellwethers at the Spring Construction Forecast Conference on April 21 at the National Housing Center in Washington, D.C. Visit the Web site 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. Briefing Paper Examines ‘No Surprises’ Rule on Habitat ConservationThe latest briefing paper in NAHB’s One Minute Report series brings association members up to date on the U.S. Fish and Wildlife Service's “No Surprises” rule, which has enabled private landowners to use their property and at the same time contribute to efforts to conserve the habitat of threatened and endangered species. Under the Endangered Species Act, landowners are required to create a Habitat Conservation Plan before they can obtain an incidental take permit. Preparing these plans can represent a significant undertaking in terms of time and expense. The No Surprises rule, which became a regulation of the Wildlife Service and the National Marine Fisheries Service in 1998, protects property owners who agree to a plan to conserve habitat from having to commit additional land or financial resources if unforeseen circumstances arise. The NAHB briefing paper discusses litigation over the rule from environmental groups and what might happen next after a court decision last fall that sent the rule back to the Services for further consideration. “Landowners will continue to argue that the full burden of species recovery should not be thrust upon them simply because a listed species resides on their particular parcel, and that all efforts should be made to ease their contribution to what is effectively a public good through regulatory incentives like the No Surprises rule,” the NAHB report says. NAHB members who want to receive the One Minute Report, a series of papers covering new and emerging building industry issues, can subscribe online by clicking here, or send an e-mail to Marie Zenner or call her at 800-368-5242 x8279. To read the entire report, which also provides references on the No Surprises issue, NAHB members can click here. After the Tradeshows: Five Easy Steps to Maintain Marketing MomentumAfter months of planning, designing your tradeshow materials and making personal contact with thousands of prospects, the end of tradeshow season may be a welcome sight. But while the globetrotting and handshaking has ended, the "season" and the work have not. What’s important now? Ensuring a return on your tradeshow investment. In two words, “follow up.” Embrace the contacts you’ve made and welcome them into the fold. Great service and unique follow-up methods can set you apart from your competition when location, price point or amenities may not. Here are five easy steps to follow to improve your tradeshow follow-up: • Call all attendees
So plan to get the most return from your tradeshows this year by cultivating every lead and nurturing those that show promise. A marketing program combining many of the above elements in frequent doses can dramatically increase response rate, tours and, ultimately, sales. Amy Tharrington is president of Maximum Design & Advertising, Inc., an award-winning, advertising and design agency that specializes in real estate marketing. Headquartered in Wilmington, NC, Maximum provides successful sales and marketing solutions for projects nationally. Tharrington can be reached at 800-609-0930.
Subscribe to NAHB's Sales & Marketing Ideas Magazine For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales & Marketing Ideas magazine. Call 800-368-5242 x8192 to subscribe or order a copy. Visit www.nahb.org, keyword: NSMC, to learn about membership benefits of the Nationals Sales and Marketing Council and the Institute of Residential Marketing. BuilderBooks.com Has Sales and Marketing Publications BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here. University of Housing Offers Sales and Marketing Designations The NAHB University of Housing offers designation programs specifically for sales and marketing professionals. For more information on these programs, click here, or call 800-368-5242 x8EDU. Shifting to the 50+Market? Don’t Overlook Sales Staff TrainingWhen a builder or developer shifts from the open market to the active adult niche market, the company should shift its sales strategies accordingly and retrain its sales staff. This is often overlooked or regarded as an afterthought, but it is very important to your bottom line. Selling to 55+ buyers presents unique challenges because sales in this market typically are not needs-driven. Training is proven to deliver better performance, which equals more revenue. In addition, happier, confident employees stay longer and enjoy greater success. Who Should Sell Your Active Adult Community? Coinciding with the importance of special market training is the question of who you should choose to actually sell your community. I believe builders and developers have three choices:
In-house representation — The advantages of in-house representation are numerous. Not only do you have greater control over the project’s destiny, you can hold in-house professionals to performance standards developed over time and enjoy the advantage of grooming an in-house staff for future projects. With this model, this means you can roll your qualified database of prospects from project to project. Real estate agents — Real estate agencies have typically been the choice for developers when selling open market communities. But in the specialized active adult market, when choosing an agency, that agency’s willingness to learn new ways to reach these special buyers and understand their unique buying trends is paramount. Seniors Real Estate Specialist is a certification program for real estate agents that teaches them greater awareness of the active adult buyer and the subtle differences unique to this niche market. If you choose an agency to represent your community, at the very least make sure that the brokers working for you have earned the SRES designation. Both of the above — The hybrid model is a combination of in-house representation supported by the real estate agency option. Brokers always should be welcomed, but in this model, the job of the outside brokers is to simply lead prospects to the door and co-broke their commissions. Your in-house sales staff is responsible for closing the sale. In this hybrid model, outside brokers should not serve as independent representatives of your project community. They don’t have the detailed training about your community or your market. Once you’ve chosen how to sell your community, training your team is the next step. Training Your Staff You can conduct seminars at your sales office, model or even your corporate offices. Use professional trainers who understand the 55+ market and who can customize their presentation for your needs and your community. Training should cover many, if not all, of the following topics:
In our training programs, we assist our builder/developer clients in customizing specific sessions for their individual needs. Training sessions are presented in PowerPoint with class study packets and reference materials. Our sessions are fast-paced and interactive. In addition, the training doesn’t stop after the session is over. We provide ongoing follow-up training to monitor and gauge the progress of the sales process during the ramp-up and sell-out of the project. It is not enough to deliver training once. An ongoing connection with the process guarantees consistently positive results and increased revenue. Jane O’Connor is the president of 55+ Marketing and publisher of Mature Living Choices in New England, a full-color, digest-sized quarterly resource guide for active adults. Based in Hawley, MA, O'Connor provides coaching and training services about the 55+ market for developers, builders and real estate agencies. O’Connor also is an active member of the 50+ New England Housing Council and the NAHB Seniors Housing Council. She can be reached at 800-782-1722, via e-mail or jane@55PlusMarketing.com, or visit her Web site, 55+ Marketing, for more details.
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. 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. NCHI Membership Helped Culligan Business FlowIn the early 1990s, Culligan had developed a drinking water system specifically for the builder market but made little headway introducing it to builders until being a member of the National Council of the Housing Industry — the Supplier 100 of NAHB opened the tap. At first, the company met with buyer resistance because the product was new. They needed some ammunition and found it in an NAHB survey that indicated that 45% of new home buyers wanted a drinking water system in their new homes. Culligan was able to see the report and use the data in its sales presentations because of its NCHI membership. That was half the battle. The other half involved gaining access to builders who might be looking for an edge in the competition. That came during a production builders meeting during a NAHB Spring Board of Directors meeting. A Culligan representative, David Swift, had been an active member of the committee for years and had developed a business relationship with the then-chair of the committee, a prominent California builder in a key market Culligan was targeting. During the committee meeting, the builder discussed his market, the limited land available, its intense competitiveness and his need to include many more features in his home as a way to differentiate his homes and gain a competitive advantage. Following the meeting, the Swift approached the builder, got two minutes of his time in which he briefly told the builder about the new water system and the home buyers’ survey results. That was followed several weeks later full presentation. Soon after, the builder brought the system into his homes. The builder was a bell cow to that segment of the California market and other builders followed his lead during the ensuing months. Culligan was able to sell its water system to builders — and builders were able to provide a feature that potential home buyers wanted — because Culligan was able to leverage its NCHI membership to attain the resources and develop the networking opportunities to introduce its product to the membership.
Member Advantage: Save up to 30% at U.S. HotelsWhether you’re traveling for business or pleasure, as an NAHB member you can find the right hotel at the right price through the Member Advantage program. Refer to identification No. 20090 when calling: To order online and for details on more than a dozen other money-saving Member Advantage discount programs click here, or send a blank e-mail to membersavings@nahb.com. Builders Need to Know the Basics to Obtain FinancingWith the housing market as healthy as it has been the past few years, home builders who are just getting started in the business might assume that obtaining financing for their projects is going to be a slam dunk. But that expectation could turn out to be dead wrong, lenders said at January’s International Builders’ Show in Las Vegas, if they fail to understand some of the basics of how the system works. Following are some of the pointers that were offered on how to avoid the pitfalls and establish a good working relationship with a lender:
How to Get That Final PaymentYou just finished the job. It looks great. The client says, “The check is in the mail.” Is it really? A week goes by, then two weeks, then Christmas passes, and still no check. The client won’t return your calls. Notices of payment have been returned to sender. Sound far-fetched? According to the latest Remodeling Market Index (RMI), 56% of professional remodelers say they sometimes have a problem collecting the final payment after completing the job. While not surefire, there are several ways you can avoid this problem. Communication Is Key Tony Thompson, president of Remodeling Services Unlimited, Columbia, SC, believes communication can help avoid not receiving payment. “Communication is the key. Put payment terms in writing on the contract and change orders,” says Thompson. “Most of our problems in the past came with not staying on top of changes and communicating them with the customer. When they got the final bill they were surprised because we failed to keep them informed along the way of changes and costs. I can't stress how important clear, constant communication is to a project.” Rick Montelongo, president of Montelongo Homes & Remodeling, San Antonio, TX, says to avoid any misunderstandings by either party, his company meets with the client after completing a substantial part of the project to discuss a final completion list that both parties sign. “This states that both parties acknowledge that once this list is complete and the job is finished, the final payment will be paid,” says Montelongo. “By documenting and signing a completion list this gives the home owner the opportunity to express any final concerns.” Create a Credit System Kathleen Ostrom, president, C.N. Ostrom & Son, Inc., in Excelsior, MN, says on top of communicating with her clients on a regular basis, her company also “works” with the client. “I always try to give the client a ‘credit’ for something,” says Ostrom. “It may be as little as $6.30 from an allowance. If there is a larger amount still owing, I will make up a credit, even up to $150 against something that I thought would cost more but we were able to do the job for less. It helps your client think that you are really on their side and looking out for their money.” Closing Pomp and Circumstance Don Strong, president of Brothers Strong, Inc. in Houston, says he makes a big deal about turning over the project to the client. “When I call to make the appointment I explain that I will be collecting the final payment and is there anything I need to bring?” says Strong. “I make a big deal about turning over the project, including all paper work. I make it clear that anything else will be a warranty item and they can relax in terms of future issues as we give a two-year warranty.” Collect It Upfront Donna Shirey of Shirey Contracting in Issiquah, WA, said her company had a problem collecting the final payment and decided to do something about it. “We now take a percentage of the total estimate as a deposit,” says Shirey. Shirey says, depending on the size of the job, she will hold a 20% deposit as a part of the final payment. “Our goal is to have a very small final payment amount so the client does not have us over a barrel. There is nothing worse than being held hostage because a client owes us a substantial amount of money when the project is complete.” Avoid the ‘Toxic’ Client Finally, learn how to fine-tune your ability to detect and avoid the “toxic” client. Thompson says to watch out for the picky customer. “I usually see this in the very beginning and walk away. Sometimes choosing your customer is important and something you learn to identify. A lot of times it's the picky customer that will stiff you, so if you suspect a picky customer watch out.” Thompson advises remodelers to make sure the client has achievable expectations. “Make it clear what will be performed and the payment terms,” says Thompson. “If they start off with bad paying habits, beware. This is another sign of a customer that may want to stiff you. Again, if you get in this situation you need to communicate what the payment terms are and what is expected from them.”
‘Contracts and Liability, 5th edition’ available at BuilderBooks.com Reduce or eliminate litigation costs by learning how to write better contracts from the start with "Contracts and Liability, 5th edition," available at BuilderBooks.com. "Contracts and Liability" provides builders and remodelers with concise, informative insights into creating effective contracts. Topics include warranties, environmental issues, inspections and contracts of all types. This latest edition also includes sections on mold, arsenic (in drinking water and pressure-treated lumber), notices and disclaimers. To view or order "Contracts and Liability, 5th edition," online, click here, or call 800-223-2665 to order. Remodeling Publications and Resources Available Through BuilderBooks.com BuilderBooks.com offers a variety of remodeling publications online. To view or purchase these publications, click here.University of Housing Offers Courses and Designation Programs The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, click here. Marketing Yourself for Success: The ResuméWhether motivated by a layoff, a desire for career change or upward movement, there are some important elements to remember as you begin your job search. Think of the job search as show time — you are the center of attraction and everything from your resumé to your personal appearance and behavior during an interview will influence a prospective employer. “You never get a second chance to make a first impression” is a very true statement. This is why every element of the package must be as professional and polished as possible. Let’s begin first by looking at your resumé. In future columns, we’ll discuss some of the other aspects of marketing yourself for success. Your First Impression The first impression a prospective employer forms of you is through your resumé and perhaps an accompanying cover letter. Your resumé should paint a picture of your accomplishments and highlight your achievements. Employers get a lot of resumés. You have 30 seconds to capture their attention. It is important to read and proof your resumé. Mistakes create a bad first impression. Don’t rely on spell check; many mistakes can be missed because the word is not in the proper context although it is correctly spelled. Remember that most resumés are now transmitted via e-mail and some are scanned by automatic systems, so be sure that the key words describing your skills are included. If you are posting your resumé online, pay particular attention to the format. A resumé should only be two pages, and hard copy should be laser printed on good quality paper, either white or ivory. There are many online resources to provide help in preparation, but if you are in doubt, invest in a good service to prepare your resumé. A resumé should contain a brief summary of your qualifications, and your employment history should detail how you carried out your responsibilities and what contributions you made to the company. Avoid repetition, trite phrases and the use of the “I” word. Include a brief educational summary and forget personal information and hobbies. Age, marital status and personal interests have no bearing on your ability to perform and are unnecessary and illegal information for an employer to have during the initial interview stages. Cover letters should always be addressed to a person by name and title except in the case of a blind ad. Research the company and include relevant comments in your letter. Beware of the generic “one size fits all” cover letter and again, check your spelling! Now for a chance to use your resumé skills: Opportunities in Purchasing One of the most important functions in the building process is purchasing. Once a design is chosen all the components of a house must be selected and bought. Then subcontractors are chosen to install the items. In smaller companies the owner or a project manager may do this task. Larger companies often have several levels of staff in a purchasing department. At the top is a purchasing manager or director who oversees the entire purchasing function. There may be several purchasing agents or estimators and a contract administrator. The duties of a purchasing manager or agent are varied, ranging from budget preparation to bidding out jobs, preparing and negotiating contracts and selecting subcontractors. This position requires knowledge of the construction process, the ability to read blueprints and excellent math, computer abilities and people skills. Here are some of the activities that might appear on a job description for a professional with purchasing responsibilities:
Lee Terry is president of the San Mateo, CA-based Lee Terry & Associates, Inc., an executive recruiting firm specializing in the building industry. Terry is also the immediate past chair of the NAHB Women’s Council. Terry can be reched at 650-570-7913 or via e-mail.
‘Selling Is a Woman’s Game: 15 Power Reasons Why Women Can Outsell Men’ available at BuilderBooks.com In "Selling Is a Woman's Game: 15 Powerful Reasons Why Women Can Outsell Men," available at BuilderBooks.com, top sales trainers and motivational speaker Nicki Joy, shows women how to turn their natural abilities into super sales performances with top results. Packed with specific sales tips, "Selling Is a Woman's Game" examines 15 crucial areas where women have a natural edge in the selling arena, helping them to assist, motivate, persuade and convince. To view or purchase "Selling Is a Woman's Game" online, click here, or call 800-223-2665 to order. Improve Your Resumé with a Designation from the NAHB University of Housing The NAHB University of Housing offers 13 designation programs that will help you differentiate yourself from the competition. Professional designations offer excellent opportunities to improve your skills, advance your career and be recognized for your commitment to professional growth. For more information, click here. Air Force Announces Forum for Large Military Housing Privatization ProjectAs part of its ongoing Military Housing Privatization program, the U.S. Air Force is seeking a developer for a project involving installations at Altus Air Force Base in Oklahoma, Luke AFB in Arizona and Sheppard AFB in Texas. This single initiative involves privatization of military family housing at the three bases. An industry forum for all three bases will begin at Luke AFB, which is near Glendale, AZ, on Tuesday, April 6, and will be followed by briefings and tours at Sheppard AFB, Wichita Falls, TX, on April 7 and at Altus AFB, Altus, OK, on April 8. The government will lease more than 842 acres at the three bases and convey more than 2,900 existing housing units and other improvements to one developer who will own and operate 2,062 rental homes for military families for 50 years, as well as finance, plan, design and construct improvements in the development. The solicitation for this project is scheduled to be released early next month. For additional information and to register for the forum, visit the Web site for PSC Military Housing Corporation, the Air Force support contractor for this project. For further information about the Military Housing Privatization process, e-mail Bill Renner, NAHB’s director of single-family finance, or call him at 800-368-5242, x8597, or 202-266-8597. HBI Trustees Visit Job Corps CampusThis year, Home Builders Institute (HBI), the workforce development arm of NAHB, is celebrating the 30th year of its partnership with the Department of Labor’s Job Corps. HBI trustees and NAHB President Bobby Rayburn visited the Long Beach Job Corps Center earlier this month to see for themselves what has made this collaboration such a success. “The Department of Labor has identified construction as an industry that offers excellent employment opportunities, and we are working to strengthen our partnership even more,” said Rayburn, who is the NAHB Senior Officer responsible for HBI oversight. Trades training, job placement and employability skills are only part of what the nation’s largest residential program offers its students, who are at-risk, economically disadvantaged youths between the ages of 16 and 24. HBI programs provide hands-on training in seven trades — carpentry, facilities maintenance, electrical wiring, painting, plumbing, brick masonry and landscaping — on 66 Job Corps campuses in 39 states and the District of Columbia. Through its Job Corps efforts, HBI is able to provide NAHB members and the housing industry with qualified, entry-level workers. Every year, this affiliation trains and places more than 2,000 youths, utilizing HBI’s national job placement network. Touring the Long Beach Job Corps Center during their annual planning retreat, HBI trustees were able to meet with students to discuss their aspirations and participation in the program. The campus, which was built in 1998, offers HBI training in facilities maintenance and landscaping. “Job Corps students, for the most part, have not found the answer through the traditional educational system,” said Jim Sattler, HBI board chair. “Listening to these young people can be an inspiration,” he added. “They are looking to HBI for training and support in helping them overcome countless obstacles so that one day they can join us in the home building industry.” In addition to training on community service projects such as Habitat for Humanity, HBI Job Corps programs work closely with home builders associations. Most recently, the first NAHB Student Chapter for Job Corps students was established. NAHB members also serve on Job Corps centers’ Industry Advisory Councils and provide mentoring/internship and employment opportunities to students. For information on HBI’s Job Corps programs, e-mail Maria McIntyre or call her at 800-795-7955 x8912. Photos by Alden Kamikawa
'Managing Your Employees' Available from BuilderBooks.com The new publication, "Managing Your Employees," from NAHB's Business Managment Department and available at BuilderBooks.com, will help builders manage the "people paperwork" of their businesses easily and productively. The book and accompanying CD-ROM covers the key areas for creating a successful HR program and includes model personnel policies and customizable employee handbook, legal and regulatory information and suggested personnel systems and processes. To view or purchase "Managing Your Employees" online, click here, or call 800-223-2665 to order. Business Management Publications and Resources Available Through BuilderBooks.com BuilderBooks.com offers a variety of business management publications online. To view or purchase these publications, click here. Want More Information About Effectively Managing Your Business? NAHB’s Business Management Department offers a variety of online resources to help you run your business better and more profitably. Click Business Management Tools for articles about human resources, financial management, sales, production, technology, customer service and other business-related topics. In addition, visit the NAHB Software Users Network Discussion Forum (SUN) to ask technology consultants and other builders what they think of various software packages and applications. Subscribe to NAHB’s Business of Building e/Source NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org. University of Housing Offers Courses on Customer Service and Business Management The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Search keywords: “Introduction to Business Management.” The NAHB University of Housing offers designation programs for builders and remodelers interested in improving their productivity and profitability. Click here for a list of NAHB designation programs.
Composite Fire Door Meets Local StandardsAs local authorities across the country are adopting the 2000 International Building Code and requiring a 20-minute positive pressure rated door, Therma-Tru says it is providing home builders and remodelers with an affordable and attractive solution to meeting the new standard. Therma-Tru Doors says it is manufacturing the industry's only fiberglass entry door that meets the standard without intumescent jambs or weather stripping applied to the jambs. The door achieves its fire resistance though a patented core material, according to Therma-Tru. Therma-Tru is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. The door is available in a complete product line:
Therma-Tru began distributing the doors during the final quarter of last year. Headquartered in Maumee, OH, and founded in 1962, Therma-Tru was a pioneer in the fiberglass entry door industry and today offers a complete portfolio of entry and patio door system solutions, including decorative glass doorlites, sidelites and transoms, and door components. 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. Why 'Oscar Plumbing' Will Never Make Much Money"Sam Oscar" owns a small plumbing and heating contracting company. He just installed plumbing for a good friend of mine. Although Sam did some things very well, unfortunately, he will never make much money. Here’s why: Prior to submitting his bid, Sam walked the job with the owner. He had several excellent money-saving recommendations his competition did not think to suggest. When he left, the owner felt good about the prospect of working with him. Sam submitted a very competitive bid. Like all low bids, however, to make any profit, Sam’s margin for error was zero. Black Mark 1. Sam was to start a week later, but when the day came, none of his crew showed. And, no one called. His piece of work was squarely in the project’s critical path, so every delay of his also bumped subsequent subs back. The owner called and politely let him know this. He apologized, giving the typical excuses. His new start date would be four days later. Black Mark 2. His crew showed, two guys, only one of whom could speak English. This fellow had about as much enthusiasm as a loaf of bread. He wore his job-dissatisfaction like a bad suit. The crew promptly made the following mistakes:
I realize everyone makes the occasional mistake and is sometimes late. I would bet however, in Oscar’s case, these are chronic problems. Mistakes suck profit like a shop-vac. By the time a mistake is corrected, it costs three times the bid amount. Plus, relationships take a beating. If Sam Oscar really wants to make money, here is what he needs to do:
Sam himself needs to check in — visit every job daily, walk it with his foreman and discuss the details. Although this takes Sam from other things, in the end, mistakes will be significantly fewer, profit will increase and his reputation will soar. Tim K. Garrison, P.E., M.S.C.E., of ConstructionCalc.com has authored a book and several short courses, and lectures on topics relevant to builders. Reach Tim at timg@constructioncalc.com. The views expressed in this article represent the personal views, statements and opinions of the author and do not necessarily represent the views, statements, opinions or policies of the National Association of Home Builders. NAHB does not necessarily endorse any of the views expressed by the author and NAHB is not responsible for any direct or indirect consequences arising out of the views expressed in this article. Home Builders Renovate Homeless Shelter in Washington, D.C.In dire need of repairs and upgrades, one of the largest men's homeless shelters in Washington, D.C. was renovated last year by the Home Builders Care Foundation of the Maryland-National Capital Building Industry Association. The shelter is operated by Gospel Rescue Ministries. Completed in December, improvements to the Samaritan Ministry Dormitory included the replacement and upgrading of lavatories on two levels of the 65-year-old building, including walls, toilets, showers and all fixtures and finishes. Renovations to some of the living quarters, which provide shelter for more than 100 homeless men nightly, included new flooring, tiles and lighting and repairs to the HVAC system. The renovation was made possible through in-kind and financial contributions from more than 15 builders and subcontractors and proceeds from a "Help the Homeless Walkathon" held by the Home Builders Care Foundation in 2002. In addition to the extensive interior work, renovations were also completed on the building's exterior, with in-kind donations from Paradigm Construction, which is erecting a high-rise across the street, and its chapel, as part of a local Boy Scout project. The project received additonal assistance from Ricky Diggs, a resident student in GRM's Transforming Lives Ministry, who was responsible for day-to-day oversight of the project. In its next project in the District of Columbia, the Home Builders Care Foundation will be instituting a collaborative job training program through the Home Builders Institute program at Potomac Job Corps. Students will receive hands-on training in construction skills working on-site with local home builders in the development of affordable housing units in the Southeast quadrant of the city. Sign Up for the Legislative Conference and Make Housing a Priority in CongressMembers can mark their calendars and sign up for the most important grassroots lobbying event of the year — NAHB’s 2004 Legislative Conference on Wednesday, April 28 in Washington, D.C. The conference kicks off the NAHB Spring Board of Directors meeting and is your opportunity, along with fellow NAHB members, to:
The daylong event will start with a morning briefing, followed by visits to congressional offices and ending with a reception and feedback session. For information or assistance in scheduling meetings with your representative or senators, contact an NAHB Congressional Representative at 800-368-5242 x8470. For information or to register online, visit the Legislative Conference page on the NAHB Web site.
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. Help Build This Year’s Family Build Home for a Mother of ThreeVolunteers are needed to help build this year’s Family Build home for a mother of three who works as a school security officer in Washington, D.C. Family Build, in conjunction with DC Habitat for Humanity, will be conducted from April 24-29 during the NAHB Spring Board of Directors meeting, and members and theirs spouses are encouraged to help for as many days as they can. This is the second year that NAHB has conducted Family Build. Last year, the Seniors Officers’ wives, several area members and their spouses, a past NAHB CEO and Home Builders Institute Job Corps students helped build four homes in the Washington D.C. suburb of Forest Glen, including a home for the Ovalles family, who helped build their own home. Transportation will be provided to and from the job site. Lunch and t-shirts will also be provided. No building experience is required. There will be tasks for all job levels, building skills and abilities. For more information or to volunteer, click here or contact Shari Smith at 800-368-5242 x8308.
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. Calendar of Events
|