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NAHB Soliciting Information From Members to Solve Problems With General Liability InsuranceIn an unprecedented effort, NAHB is soliciting information from its members to help remedy problems with general liability insurance (GLI). This has become a critical issue for the home building industry, with a growing number of builders having trouble getting adequate coverage or paying too much in premiums. In many parts of the country, builders have seen GLI premiums increase 10-fold over the last three years, while numerous exclusions have severely diminished the protections afforded by these policies. In some places, even obtaining GLI coverage has become all but impossible. “Our members have made it clear that they want the NAHB federation to do something about this serious problem,” said NAHB President Bobby Rayburn. “In fact, builders responding to NAHB’s Critical Issues Survey consistently rank GLI as their greatest concern.” A task force formed in 2003 found that it might be possible to bring new GLI products to the market that would solve the members’ GLI problem. The task force interviewed three prominent insurance brokerage and consulting firms and determined that Marsh USA was best suited to meet the home building industry’s needs. Marsh, a global leader in risk and insurance services, has a consistent track record of creating innovative solutions for industries such as pharmaceuticals and the medical industry. NAHB’s GLI Task Force and Marsh have developed a plan to address the home building industry’s GLI crisis. The Marsh-NAHB plan seeks to achieve three primary objectives:
The first step of the plan is to gather data from NAHB builder, remodeler and subcontractor members. Marsh needs information about the frequency and severity of losses — how many losses builders have experienced and how much they have cost. Marsh will develop a database of about 4,000 builder, remodeler and subcontractor members, with information such as number of units produced, annual revenue and insurance coverage information for the past five years. The information gathered by Marsh will be held in strict confidence and will not be available to members or staff of NAHB. Participating members will fill out a survey about their business and its loss experience. They will also need to send a letter to their insurance carrier granting permission to share loss-run information with Marsh. NAHB and Marsh need to complete this data-gathering effort by July 15. “The success of this initiative hinges on the quality and quantity of data that builders, remodelers and subcontractors provide to Marsh,” Rayburn said. “The better the data and the more builders involved, the better the products we will see when this process is completed.” Marsh will use the data to conduct an extensive analysis of the risk management needs of the home building industry and then develop new insurance products. “There is a strong potential for NAHB and its affiliates to enjoy significant revenue from these products,” Rayburn said. “Any revenue that comes from this initiative will be shared by NAHB and its affiliate associations.” To obtain a copy of the GLI survey or consent letter, click here. Or contact the NAHB Member Service Center at 800-368-5242 x8583. If you have specific questions about the data collection initiative, e-mail Brett Diggs or call him at x8453 or e-mail Clayton Traylor or call him at x8490. Building News Coast To CoastNailing Down a Reason Home Prices Are RisingNAHB statistics indicate that the cost of construction materials — from lumber and nails to insulation and roofing cement and coatings — has spiked higher over the past 12 months. As a result, the price of a typical residence has been pushed up almost 3% — or by an extra $5,000-$7,000. This type of business climate is a capricious one for builders, one that industry sources say can land them in financial trouble if they are not careful. That's because residential contractors usually sign contracts with buyers six months before the residence is completed. Any increase in building costs that occur in the meantime generally are absorbed by the company. While contract language can be tweaked to help defray the cost of higher commodity prices, some builders are loathe to create uncertainty for their clients. "I think buyers like to know ahead of time what their house is going to cost," agrees Seth Shapiro, an executive with Fort Washington, PA-based Westrum Development Co. An Empty Nest — Now What?"The House to Ourselves: Reinventing Home Once the Kids Are Grown" co-author Todd Lawson says empty nesters have a number of housing and lifestyle options to choose from when their children leave home. They first must decide where they want to live, and Lawson notes that most opt to stay near family and friends. They also must choose between downsizing to a smaller house or condominium or remaining in the family home. Empty nesters need to think about maintenance responsibilities and the ways in which they want to use space to help them make this decision. Some choose to relocate to eliminate maintenance, discourage long-term visits from family or free up money to travel; while others undertake extensive renovation projects to create home offices, hobby rooms or space for family gatherings. Clear Skies Ahead for Home ValuesHousing experts do not see a bubble about to burst — mainly due to fewer speculative purchases and construction projects, continued demand from immigrants and the fact that prices have steadily climbed during the last five decades. Even Boston, San Francisco and other overheated markets are not expected to experience jarring declines because of demand for the lifestyles associated with these cities. Experts believe that residential prices will continue their uphill trek unless the supply of new homes significantly increases, unemployment posts double-digit gains or interest rates shoot up unexpectedly fast. The National Association of Realtors®, for instance, predicts that appreciation will cool from the 7.5% rate recorded last year but that the median resale and new-home prices still should jump 4.4% this year to $177,400 and $202,900, respectively. One Is Not EnoughThe National Association of Realtors® reports an estimated 445,000 second-home sales last year, attributing the success of the market to post-Sept. 11 nesting, fears of terrorism, the sluggish stock market and rapid price appreciation. In Southern California, prices in the vacation hot-spots of Crestline, Palm Springs and Laguna Beach surged 53.6%, 51.6% and 31.3%, respectively, during the year-over-year period ended in February. Though most second-home buyers are making their purchases for personal reasons, they still are reaping the benefits of their investments. In some areas, vacation-home owners earn $100,000 or more in annual rental income. However, double-digit appreciation rates have some owners choosing to sell rather than collect rent. From 'Project' to PalaceIn many cities, low-income housing units are being transformed from barracks-style structures into buildings that boast brick detailing, oak cabinets, private entrances and other features common in more upscale dwellings. Some of these newer complexes are being built near higher-value properties, and their modern façades and affluent-sounding names help them mesh with the existing community. Moreover, National Low Income Housing Coalition President Sheila Crowley believes the improved designs help residents feel better about themselves and their communities. However, the redevelopment process leaves some low-income residents without shelter because the focus on lower-density housing means that fewer affordable units are being built to replace the ones that are demolished, notes Harvard University's Joint Center for Housing Studies Director Nicholas Retsinas. Housing authorities also are facing challenges when it comes to obtaining funding, since HUD's HOPE VI grant program is being phased out and replaced with private-sector financing. The Feng Shui of Real EstateFeng shui, the ancient Eastern art of balance and harmony of design, is becoming increasingly popular with home buyers in Arizona's Paradise Valley. Though the trend still represents a niche market, property agents, builders and interior designers in the area are trying to keep abreast of the trend by educating themselves about the key principles of feng shui — which involves design techniques that convey a sense of visual and emotional calm. Real estate agent and educator Susan Sweetow noticed the budding trend several years ago and responded by offering a new continuing education class on the subject, called "From Frank Lloyd Wright to Feng Shui," at the real estate school she runs with her husband. Though not everyone takes it seriously, Sweetow says the principles of feng shui are becoming increasing popular, as more real estate and design professionals are expressing an interest in her class. "We felt that a lot of our clients are into this practice and that we should be aware of what it is," says Barbara Graham, a real estate agent for Scottsdale's Sandra Wilken Properties. Fastest Growing MarketHispanics will make up 17% of the nation's population by 2015 and ultimately account for three out of five first-time home buyers. Hispanic buyers differ from others in that they are younger, have larger families and pool their resources to buy multiple properties. A Fannie Mae survey reveals that nearly three-quarters of Mexican Americans and 70% of all other Latinos consider homeownership a top priority, compared to 61% of all immigrants. According to Geo Advertising & Marketing Vice President Theodore Serrano, real estate professionals need to understand the Hispanic culture, treat Latinos as individuals and avoid stereotyping. Raw Deal on SteelPurchasing magazine reports substantial increases in steel prices over the last six months. Prices rose by 44% for eight-pound steel beams, 28% for rebar, 33% for the wire used in concrete mesh and 41% for construction-grade steel plates. Higher prices and robust demand are cutting into contractors' profits and causing project delays, and many construction firms are stockpiling to avoid additional price hikes. The weak dollar and demand from China are credited for the recent price jumps, but many observers think prices will cool over the coming months due to China's monsoon season and a drop in steel surcharges imposed by manufacturers. Meanwhile, price gouging, rebuilding projects in Iraq and demand for steel alternatives have forced contractors to pay more for gypsum wallboard, cement and wood as well. "In our industry, we'll probably see a bunch of projects that will not be economically feasible because of increased steel prices," remarks Houma Chairman and Chief Executive Kerry Chauvin. In response, members of the Louisiana Associated General Contractors want state lawmakers to make government contracts more flexible. If prices continue to rise and companies cannot make adjustments in their bids, firms could be forced into bankruptcy, says the group's chief executive, Derrell Cohoon. Rising Steel Cost Hurting BuildersA boost in global manufacturing, the weak dollar and fewer steel imports have significantly driven up the cost of steel. Builders of office buildings, schools and bridges have been hit the hardest as hot-rolled sheet metal and structural steel prices surged 89% and almost 50%, respectively, between December and April. Many contractors in Delaware have been forced to lay off workers, purchase directly from steel mills and include escalation clauses in their contracts to adjust for price jumps. Residential builders are also affected, with the cost of appliances, plumbing materials, metal studs, nails and reinforcement bars on the rise. In fact, NAHB economist Michael Carliner says new-home prices are up $500-$1,000 due to higher steel prices. Though some contractors are worried about steel shortages, Economy.com's Mark Zandi expects both prices and supply to return to healthy levels in 2005. A Three-Car Party Room?"Many home owners are transforming their garages from messy storage areas to multi-functional spaces with room not only for cars but also for storage and even televisions and refrigerators. NAHB found that half of the respondents to a 2000 survey who planned to spend $250,000 or more for a dwelling preferred three-car garages, and even home owners with two-car garages are demanding more space. Whirlpool Corp., Sears, GarageTek and other retailers and manufacturers are catering to home owners undertaking garage improvements by rolling out products and services that enable them to organize their belongings and create areas for work or entertainment. Home owners could shell out more than $10,000 to have GarageTek assist in the remodel, but those without a significant amount of cash have access to various do-it-yourself products from different retailers at more modest prices. Home Owners Chase WaterfallsMany home owners are trading in their tabletop fountains for more elegant indoor waterfalls in their living rooms, foyers, bedrooms and bathrooms. Designs range from wall hangings and fountains to steel or copper pillars, with price tags anywhere from $300-$30,000 or more. Experts believe home owners were inspired by waterfalls in many hotel and hospital lobbies. Indoor waterfalls are gaining popularity as a means of calming and soothing stressed-out home owners. Home Owners Sluggish on RemodelingThe Joint Center for Housing Studies at Harvard University reports a modest 2.5% jump in spending on home repairs and remodeling to about $125 billion during the last year. Kermit Baker, director of the Joint Center's Remodeling Futures Program, attributes the sluggishness to "the transition from remodeling activity generated by falling mortgage rates to activity generated by rising employment levels and growing incomes." However, Joint Center Director Nicholas Retsinas expects spending on improvements to remain high as long as the resale market continues to reports gains. A Laptop Made for the DesktopFujitsu Computer Systems' LifeBook N5000 laptop is equipped with a 3.2GHz Pentium 4 by Intel, a gigabyte of memory and a DVD burner, as well as one of the largest and brightest screens in the industry. The LifeBook goes for $2,599, with a $100 mail-in rebate through the end of this month. The LifeBook, which weighs 9.9 pounds and is 11.9 by 14.0 by 1.8 inches, has a 1.44MB floppy drive and internal optical and hard drives. On the right edge of the keyboard is a Memory Stick/SD card slot and four USB 2.0 ports, as well as one IEEE 1394 port. While the 802.11a/b/g wireless can interface with any small business office setup, Fujitsu's software offerings are geared for Windows XP Home Edition, Microsoft Works 7.0, InterVideo's WinDVD 4 and WinDVD Creator, and Sonic's RecordNow. Automated Title Search Saves Time, MoneyZenodata Corp. has developed new title search technology that promises to accelerate land record searches and improve their accuracy as well as provide complete electronic results. The company combined its proprietary Land Record Database with the Spider-Search search engine and webJAZ user-interface application to create the Land Record System — which is able to deliver full title abstracts as well as extract and import information from the original source documents, all without the need for manual data entry. The Land Record System can produce abstract sheets in 10 minutes or less, producing cost savings on title work on average of 20%-30 percent. "The best part of a completely electronic database is that search results can auto-populate abstract sheets in PDF or HTML format, or interface to other software packages and databases using XML," says Zenodata CEO Mark Stevenson. Considering Document ManagementIn today's workplaces, documents can be in paper or electronic form. When paper was the norm, document management involved tracking documents as they moved through the office and into filing cabinets or trash receptacles. The term has evolved to encompass the entire life cycle of a document to include indexing, retrieval, editing, storage, distribution and disposal. Companies can use multifunctional printers (MFPs) with workgroup-specific software to improve document management, ultimately slashing storage and retrieval costs, making information more easily accessible and facilitating electronic document transmission and data backup and recovery. These devices also allow companies to cut down on paper usage. Before employing an MFP, companies need to figure out where the document will be stored and how it will be distributed. Given that most documents stored on hard drives are never retrieved, experts urge companies to minimize expenditures on document imaging, which ensures that documents are converted into a format suitable for reading or transmitting. NBN Online Will Not Be Published Next WeekThe NBN Online staff will be attending the NAHB Spring Board of Directors meeting this week. We will resume publication on May 10.
Baby Boomers Shaping Up as a Prickly Market for Seniors HousingHome builders and developers who hope to capitalize on the 30 million post-World War II baby boomers who are starting to enter their senior years should proceed with caution. Baby Boomers Shaping Up as a Prickly Market for Seniors HousingHome builders and developers who hope to capitalize on the 30 million post-World War II baby boomers who are starting to enter their senior years should proceed with caution. While it is true that members of this age group expect to be moving to another home at some time in the future, panelists at the NAHB Seniors Housing Symposium said, they won’t be looking for the same things as the generations that preceded them. These “nexers” are “very, very different from people in your active adult communities now,” Myrl Axelrod, president of New York City-based Marketing Directions Associates, said at the symposium, which was held in Chicago on April 14-16. She based her remarks on the results of ongoing research by Feinberg & Associates. In a “search for answers to what makes the nexers tick,” Bill Feinberg said that his company last year held a series of in-depth focus group discussions in the Philadelphia; Washington, D.C.; Raleigh, NC; and Chicago metropolitan markets. The study looked at boomers with high incomes of $150,000-$225,000+ and those with middle-incomes in the $60,000-$100,000 range. Axelrod said that the Feinberg research identified several characteristics of the nexer generation:
The study also identified several things that are appealing to nexers:
In the next stage of its research, Feinberg & Associates will be studying product preferences, including site designs and floor plans. More information from the Seniors Housing Symposium will appear in the May 10 issue of Nation’s Building News Online. Housing SnapshotFederal Reserve Chairman Alan Greenspan was in the limelight last week as he told Congress that interest rates will eventually have to be raised to stave off inflationary pressures from a vigorously growing national economy. And analysts, who had been anticipating an increase in the federal funds rate as late as early next year, now expect to see the Fed's first move to increase interest rates as soon as this summer. Mortgage interest rates continued the upward trend of the past several weeks, though fixed-rate loans remained under 6%, although barely. An increase in factory orders for durable goods in March and a decline in jobless claims for the week ending April 17 provided the latest indications of economic rejuvenation. On the lumber front, prices continued to push forward, but they appeared to be losing some upward momentum. Framing lumber climbed to $446 per 1,000 board feet from $439 the week before, according to Random Lengths. The mill price for 15/32-inch 3-ply CDX Southern Westside plywood was $532 per 1,000 square feet and OSB was $520. Mortgage Interest Rates30 Year Fixed Rate: 5.94\% Housing Starts: Mar. 2004Total: 2.007 million\% New Home Sales: Mar. 2004 *1.228 million Existing Home Sales: Feb. 2004 *6.12 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. New Single-Family Home Sales Set Record in MarchBuoyed by the second lowest interest rates since 1956 and a strengthening economy, new single-family home sales increased 8.9% in March to a record seasonally adjusted annual rate of 1.228 million, the Commerce Department reported today. This was 21.8% percent ahead of sales a year earlier. “Home sales were robust as builders entered their peak selling season,” said NAHB President Bobby Rayburn, and “builders are working hard to keep up with the demand.” Although mortgage rates have been rising since March, NAHB Chief Economist David Seiders said that he still expected the housing market to remain strong "because the fundamentals, household incomes, employment and household formations are strong.” New home sales in March increased 19.3% in the South, 5.1% in the West and 5% in the Midwest. They dropped 24.3% in the Northeast, where sales activity during the first quarter was nevertheless 28.7% higher than during the same quarter of 2003, the strongest showing of any region. The 372,000 inventory of new homes for sale in March represented a low 3.7-month supply at the current sales pace. “The supply-demand balance in the new-home market is very, very healthy,” Seiders said. “Builders are not overextending production. Houses that have been actually completed account for only about one-quarter of the inventory, with units under construction or that have not yet been started making up the balance.” A Healthier Economy Bodes Well for Nation’s Housing Industry, Analysts SayEven though they expect the Federal Reserve Board to begin raising interest rates in the foreseeable future, possibly as early as June, housing analysts at NAHB’s Construction Forecast Conference at the National Housing Center in Washington on April 21 said that the housing industry is moving into a healthier economic environment where job growth and income gains will keep residential construction and sales at healthy levels and buoy house values as well. Now that Fed Chairman Alan Greenspan has announced that deflation is no longer a concern, NAHB Chief Economist David Seiders said that he expects the Fed to start increasing its federal funds rate in August, but it will be “cautious moving ahead.” He predicted that the rate, which is currently 1%, will be increased gradually to about 3% by the end of 2005. That would boost the prime interest rate, which is a benchmark for loans to home builders, to about 6% from today’s 4%, he said, but in terms of the availability and cost of loans the industry is heading into “still a very favorable financing environment.” Mortgage interest rates, which in the past several weeks have been climbing rapidly from a recent low of 5.38% toward the 6% level, “probably won’t be much higher” in the period ahead — rising to 6.25% by the end of this year and 7% by the end of 2005, Seiders said. Single-family housing starts are expected to remain at high levels, according to NAHB’s forecast, declining slightly from 1.5 million units last year to 1.488 million in 2004 and 1.422 in 2005. Bolstered by growing strength in the condominium market, this year’s multifamily construction is forecast to remain at last year’s 348,000-unit level, with a drop to 320,000 units next year. Seiders said that the industry doesn’t need to worry about a housing price bubble precipitated by the upward direction of mortgage rates. “We’re already past a contraction in payroll employment and jobs and income are in a growth mode,” he said, “so prices won’t contract because the real economy is coming on strongly.” But the surging prices of framing lumber, wood panels and products made of iron and steel scrap are vexing for builders, he said, and there is no clear way of knowing when relief will be in sight. Wood prices have resulted largely from strong demand and inadequate production capacity, and steel prices have exploded because of massive shipments from the U.S. to China. Additional demand for building materials and labor could be coming from non-residential construction, which is stabilizing following a 25% decline that had been beneficial for home builders, he said. While not entirely sanguine about prospects for the economy and the housing industry in the next couple of years, David Wyss, chief economist, Standard + Poor’s, concurred with Seiders that growth in employment and income are heading for higher ground, which is a good thing for housing. Noting that half-a-million jobs were created in this year’s first quarter, Wyss said that “jobs are finally starting to show up, about a year and a half behind schedule” and that the economy should continue to improve “nicely,” unless it is derailed by events in the Middle East, a terrorist attack or an unlikely spike in oil prices. Wyss predicted that increases in the core Consumer Price Index are heading up to the 2% level, which will get the Fed moving shortly to start pushing interest rates toward a “neutral” 3.5%-4% level, “neither touching the brake nor the accelerator,” he said. “That lets the economy move at its own momentum.” “As mortgage rates rise,” Wyss said, “mortgages won’t be as affordable, but they will still be low by historic standards.” He added that the increase in rates shouldn’t have much impact on first-time buyers but it could have somewhat of a dampening effect on the trade-up market from home owners who are discouraged by the added financing cost. Measured in terms of the ratio of average home price to average household disposable income, he said that house prices were currently a bit higher than the historic average, which could lead to “a couple of years when home prices go sideways rather than down.” More bullish than Wyss about the prospects for housing in “a surging economy,” Jim Glassman, managing director and senior economist for JP Morgan Chase, said that the creation of new jobs, productivity-driven increases in income growth and low inflation will help the industry continue to prosper despite a change in Fed policy. As the result of Fed policies since the early 1980s, the economy has now moved into a low-inflation “zone,” Glassman said, where interest rates no longer need to be higher than normal to push prices down. “We are moving into an era where the real federal funds rate will be lower than we are used to, and that’s an environment that can’t hurt housing.” Glassman added that he would be surprised to see the Fed increase interest rates this summer “because employment is a long way from where it needs to be.” The rate of job creation needs to increase to a steady monthly rate of 200,000-300,000 he said, a process that has only recently begun as the gross domestic product has started growing faster than the economy’s underlying “trend” that’s based on labor force and productivity growth. Housing’s banner performance can’t be explained adequately by interest rates, he said. A better explanation is the tripling of nominal personal income that has occurred over the last decade, compared to a doubling of housing prices. Faster productivity growth, he said, enables companies to generate more profits, which in turn eventually enables them to pay their workers more generously. Once employment returns “to the right altitude,” Glassman predicted that there will be “a whole lot more income for the household sector,” roughly offsetting higher interest rates. “Coming into a new era where we don’t have to be obsessed about bringing down inflation,” the Fed should keep its federal funds rate “neutral,” meaning a “real” rate of about 2%, he said. Photos by Morris Semiatin Robust Household Growth Predicted for Next Ten YearsStrong demographic and minority household growth in the coming decade is “very positive news” that will fuel robust demand for housing, Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard University, told a packed audience at NAHB’s construction forecast conference on April 21. “We expect household growth of 13.4 million between 2005 and 2014 with the immigration skewed to younger households,” said Belsky. “This means that the starter home market will have a stronger base.” Based on the latest U.S. Census figures, Belsky predicted that new immigration will fall in the 1.2-1.3 million annual range, “creating about two million more households over the next decade than we previously thought.” The new household formations will be heavily tilted towards Hispanics and Asians. “Minorities accounted for 40% of the growth in home owners over the last 10 years and they will dominate household growth in the coming years,” said Belsky. Households headed by unmarried women also exhibited strong gains during the past decade, swelling their homeownership ranks by five million since 1993. “The growth in minorities and women-headed households is an important part of the entry-level market and should keep prices at reasonably affordable levels,” Belsky said. Yet, affordability remains a major concern, as Belsky noted that 30%-40% of minority households are spending more than half their income on housing. “People are willing to pay up because they get back more — a sense of belonging to their community. Affordability is a major public policy issue, but it won’t do in housing,” he said. Belsky also said that a diverse housing finance system offering a variety of adjustable rate mortgages and automated loan underwriting has helped to boost minority loan approvals by as much as 30% and will enable future home buyers to withstand changes in interest rates. Noting that scores of counties across the nation have added more than a quarter of their housing stock over the last 10-year period, Belsky added that NIMBYism will remain a problem for builders in the future. “The hottest topic in Cambridge, MA, is smart growth,” he said. “People don’t like housing built wherever they are. They don’t want added traffic and they want to keep the character of their community. This makes for an inelastic supply of housing.” Photo by Morris Semiatin Economists Differ About Regional Strength of Housing MarketsTwo economists speaking at the NAHB Construction Forecast Conference on April 21 presented opposing viewpoints about the strength of regional housing markets. Mark Zandi, cofounder and chief economist at Economy.com, cautioned that several major metropolitan areas are overbuilt and overpriced and said these markets will decline as interest rates rise. But Stan Duobinis, founder and president of Crystal Ball Economics, Inc., said regional markets will be able to weather expected interest rate increases because the nation's economy is getting stronger and job growth is increasing. Zandi, who has been predicting regional housing market setbacks for several years now, said single-family demand has been supported by extraordinarily low borrowing costs, falling transaction costs, more aggressive lending, portfolio shifting and nesting — a situation that is beginning to change. He also noted that speculation has been creeping into housing markets in California, the Northeast corridor and Florida, and he forecast that demand will weaken appreciably and house prices will decline with even a modest rise in mortgage rates. “All roads lead down,” Zandi said. “Some more steeply than others.” Countering Zandi’s analysis, Duobinis said that job growth, while not yet uniform across the country, will bring net population migration to areas with a strong employment base and will strengthen the housing market in those regions. “Job growth is connected to housing,” Duobinis said. “When growth gets stronger, you can throw your 33-year-old son out of the house because he can now get his own place. Businesses are hiring again, and it’s not just temporary employees. They are beginning to hire employees on a permanent basis.” He said 21 states experienced positive job growth from February 2002 to February 2003, and that trend has continued. Employment is still spotty in the industrial states and the South but strong in the Mountain States and Florida as well as on the rise in the Southeast, California and parts of the Northeast and upper Midwest, he added. Many of these regions have experienced net in-migration, Duobinis said, and many have also seen an increase in their single-family housing starts. David Seiders, NAHB’s chief economist and moderator of the conference, argued that house prices are not likely to fall at a stage of the economic cycle where job and income growth are accelerating in most parts of the country and in a housing market with slim inventories almost everywhere. “The house price bubble issue actually is receding, despite some firming up of the interest rate structure,” Seiders said. Photos by Morris Semiatin Eye on the EconomyBy David F. Seiders, NAHB Chief Economist On April 21, I hosted NAHB’s Semiannual Construction Forecast Conference at the National Housing Center in Washington, D.C. I presented NAHB’s short-term forecasts for the national economy and the housing markets (through 2005). Seven other prominent economists weighed in on both the short-term and long-term outlook, including regional patterns of activity and the outlook for house prices. The key questions received favorable answers … The main short-term issues dealt with at the conference were laid out as key questions:
The analysts reached solid consensus on the first question, concluding that a sustainable economic expansion, including decent job growth, finally is underway. On the second question, there was general agreement that an economic expansion featuring stronger growth in employment and personal income would ensure a healthy environment for housing in 2004-2005, despite a higher interest rate structure and some monetary tightening by the Federal Reserve. Analysts also painted a bright long-term outlook for housing production, house prices, homeownership rates and mortgage finance. Demographic trends and per-capita income growth were identified as key drivers of the long-term forecasts, along with projections of homeownership gains by minority households and lower-income groups as well as trends in debt leverage by America’s home owners. The Federal Reserve is key to the short-term outlook … The panelists agreed that Federal Reserve management of monetary policy is critical to the course of the U.S. and global economies and to the health of the housing sector. The Fed has been a very friendly force since mid-2003, holding the federal funds rate at 1% in order to help stimulate the economy, revive the labor market and prevent deflationary conditions from developing in the U.S. economy. Recent data on job growth and core inflation suggest substantial progress on both fronts, altering the conditions underlying the Fed’s extraordinarily stimulative monetary policy position. “Patience” may still be the watchword for the Fed, but sustained improvements in job growth and persistence of higher core inflation most likely will provoke some monetary tightening before the November elections. NAHB’s forecast now assumes that the Fed will pull the trigger on Aug. 10, rather than on Nov. 10, and that the federal funds rate will be 1.50% by year-end. The Fed could be even more aggressive than that, possibly moving at the June meeting or moving rates up more quickly, but higher-than-expected oil and gas prices, along with the resurgence of international terrorism and turmoil in Iraq, are new-found negatives for the economy. The Fed must consider those negatives in setting monetary policy. Higher mortgage rates will not crush housing demand … Long-term interest rates have moved up substantially in recent weeks, driven by indications of stronger job growth and higher core inflation as well as by market expectations of rate hikes by the Fed as early as this summer. Furthermore, most panelists expect the entire interest rate structure to move up to some degree during the balance of 2004 and in 2005. Will higher interest rates seriously weaken the housing sector? Most panelists (including yours truly) expect the negative impacts of higher rates on housing demand to be largely offset by the ongoing cyclical recovery in employment and personal income. Furthermore, increased use of adjustable-rate mortgages should help blunt the impact of increases in long-term rates that run ahead of the anticipated “normalization” of monetary policy. Housing demand also should be supported by two structural factors:
Nor will higher interest rates cause house values to fall … The recent and prospective run-up in interest rates has revived discussion (primarily in the media) of potential “bubbles” in house prices and the economic damage that could be inflicted by falling house values. One of our panelists expressed some concern about “bubble” conditions in a number of metro areas — primarily in the Northeast corridor, Florida and California — based largely on abnormally high ratios of house prices to market rents. Other panelists (including yours truly) pointed out that low interest rates had kept ratios of mortgage payments to rents at historically low levels and stressed that rising income would keep the relative cost of homeownership low even as interest rates rise moderately. The anti-bubble group also stressed that the economic and housing market conditions that provoked regional or local house price declines in the past simply are not part of today’s scene. Growth of employment and income is strengthening rather than weakening in most markets. Furthermore, unsold housing inventory is thin rather than excessive virtually everywhere — particularly in the Northeast corridor, Florida and California where land-use constraints are quite stringent. Long-term trends will be taking housing to new heights… Looking beyond the current cycle, a number of panelists unveiled long-term forecasts that bode quite well for the housing sector. During the next decade:
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 April 21 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 available 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. New Ozone Standard Raises Development Concerns in Nearly 500 CountiesA new, more stringent Environmental Protection Agency (EPA) standard for ozone emissions potentially could have an impact on residential development in many parts of the country. On April 15, the agency listed 476 counties as “non-attainment areas” in violation of the new standard, up from 221 under the previous standard. State and local governments now have three years to develop plans to bring these counties into compliance. “Home builders should have their interests represented when states are hashing out these new plans to correct air quality levels,” said NAHB President Bobby Rayburn. “These designations could have a dramatic effect on local economic development.” Nineteen of the nation’s top 25 housing markets — including Atlanta; Phoenix-Mesa; Riverside-San Bernardino, CA; Houston, Washington, D.C.; Las Vegas; Chicago; Dallas; Charlotte-Gastonia-Rock Hill, SC; Sacramento, CA; Detroit; Fort Worth-Arlington, TX; Raleigh-Durham-Chapel Hill, NC; Indianapolis; Denver, St. Louis; Philadelphia; Columbus, OH; and Nashville — have failed to meet the new ozone standard. States and localities that don't bring polluted areas into compliance face sanctions that include severe restrictions on economic development activities or the freezing of federal funding for roads. They are required to reduce ozone emissions from the three primary sources of the nitrogen oxide in smog: stationary sources, such as large industrial facilities and power plants; area sources such as dry cleaners; and transportation. “Building new homes cannot be accomplished without adequate access to new roads or highways,” said Rayburn, “and any restrictions placed on home construction could hogtie our industry and the entire economy. We will closely monitor this situation and ensure that the home building industry is not adversely affected by the implementation of the new standard.” A construction ban proposed three years ago by regional policy makers in the Dallas-Fort Worth and Houston areas highlights the potential impact of the EPA’s new standard. Under the plan, diesel-powered construction equipment with greater than 50-horsepower engines — such as cranes, backhoes and forklifts — would have been banned between 6:00 a.m. and 10:00 a.m. in 12 counties and until noon in eight others. State and local home builders associations fought the ban and won. “We must continue our vigilance over these regional planning and policy decisions being developed, and be prepared to take an active role in the ensuing discussions over air quality issues in the Dallas area,” said Robert Morris, executive director of the Home Builders Association of Greater Dallas. “When regional air quality solutions are discussed, we will be the voice for Dallas home builders and home buyers,” he said, “and work with all industries to share equally in the efforts to improve our region’s air quality.” Earth Day Celebrations Cite Advancements in Green BuildingThe nation’s home builders celebrated Earth Day last week by commemorating 30 years of advances in resource-efficient, environmentally sensitive residential construction. “Green building is arguably the most exciting and significant development in home building in the past three decades,” said NAHB President Bobby Rayburn. “Through the efforts of environmentally conscious builders, home buyers can enjoy the benefits of reduced home maintenance costs, improved environmental quality and increased home value.” More than 32,000 green homes have been built since 1990. And houses built today are twice as energy-efficient as they were 30 years ago and demonstrate progress in a number of areas:
“Specialized, niche home builders began constructing resource-efficient, environmentally sensitive homes in the early 1970s,” said Rayburn. “Today, green building is a quiet revolution that is vital to our nation’s environmental and economic interests.” For more facts and figures about green building, click here to visit NAHB’s Web site and download a copy of “Building Greener, Building Better.” Costly Residential Central Air Conditioner Standard Set for 2006The Department of Energy on April 2 announced that it would enforce a 13 SEER (seasonal energy efficiency rating) standard for residential central air conditioners that was issued by the Clinton Administration. The department made its decision after a federal appeals court ruled that the Bush Administration could not roll back the standard to a 10 SEER. The 13 SEER requirement was challenged by NAHB and the Air-Conditioning and Refrigeration Institute (ARI) because it will add significantly to the cost of new home construction and will only be cost-effective in the southern-most climates zones. For a majority of the country, especially the northern states, the energy savings from the higher standard will never pay for the higher cost of the product, creating an undue burden on working families striving to afford buying a home, the groups said. “It is time for the government and for private parties to stop litigating and start working toward complying with the 13 SEER standard,” said David Garman, the undersecretary of the Energy Department. ARI has indicated that it will not challenge the latest decision, and the standard is scheduled to go into effect in January 2006. For more information, e-mail John Ritterpusch in NAHB’s Construction Codes and Standards or call him at 800-368-5242 x8325.
'Pocket Codes' Field Guide Now Available in Spanish and English from BuilderBooks.com "Pocket Codes, English-Spanish," available from BuilderBooks.com, is a field guide to the 2000 International Residential Codes (IRC). Written as a quick reference for builders, superintendents, workers and inspectors, "Pocket Codes" presents the most important residential code information through informative diagrams, tables and succinct lists. This side-by-side English-Spanish edition includes the most popular Hispanic trades: concrete, framing, masonry and roofing. To view or purchase this publication, click here or call 800-223-2665 to order. Real Estate Investment Can Help Contactors Accumulate WealthBy Jonathan Wallick Investing in real estate is one way to accumulate wealth that can help fund retirement. Start by researching options to see which of them suit your investment personality and goals. You may consider purchasing residential, commercial, institutional or mixed-use properties or vacant land. Buying and selling with or without extensive renovation is one option. With no tenants in the picture, this can be a quick, in-and-out transaction, but make sure you don’t run afoul of flipping regulations. Rental property can be a good choice for longer-term investments and better tax advantages.Depreciation on these properties can offset regular income at tax time. If the property is mortgaged, use discipline to pay off the debt in the shortest time feasible. Proceed With Caution It’s best not to go it alone. Consult with professionals, including a CPA and attorney familiar with real estate, to learn about tax planning and asset protection. A realtor can also help with buying, selling, leasing and property valuation. As a property owner, you must be thoroughly familiar with real estate laws and regulations to avoid legal entanglements and fines. When you sell an investment property, you may be able to retain all profits and delay taxes by using an IRC Section 1031 exchange. If you go this route, you must follow strict regulations to acquire the replacement property. A Roth IRA may be used for real estate investing, and if done properly, the profits are never taxable. Consider protecting other assets by putting each property in an LLC, trust or other entity. Maintaining accurate, up-to-date records is as vital for real estate investment as it is for home building and remodeling. It is also important to have one or more exit strategies for each property. There are no real get-rich quick-schemes in real estate, but with a plan, hard work and follow-through, financial independence can be more than a dream. Jonathan Wallick, president of Wallick Construction & Restoration in New Orleans, is a remodelor and re-developer of distressed properties in New Orleans and New Mexico. He was NAHB Remodelor™ of the Year in 1998 and is an NAHB Remodelors™ Council trustee. For information, e-mail Wallick. The views expressed in this article are those of the author and do not necessarily reflect the views of NAHB. The information provided in this article does not constitute investment, legal, tax or other advice. The article is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. If legal advice or other expert assistance is required, you should seek the services of a competent professional person.
'Run Your Business So It Doesn’t Run You' Available At BuilderBooks.com Understand basic business concepts that are fundamental to the success of your small business. By using the techniques in "Run Your Business So It Doesn't Run You," available at BuilderBooks.com, you can create a business structure where employees are challenged and empowered to seek new levels of excellence and teamwork. Valuable tips on time management will help you organize your business and life outside of work. Tips on financing and business planning will help you boost your bottom line. To view or purchase this publication, click here or call 800-223-2665 to order. Consumers More Knowledgeable About RemodelingAll the home improvement shows on HGTV and cable and network television and the projects in the numerous remodeling/home improvement magazines are raising the bar for the remodeling industry as home owners “home school” themselves about remodeling and what they can do with their homes. According the latest the Remodelors™ Council’s Remodeling Market Index, 57% of respondents noted that customers are better informed on remodeling projects, up from 47% when remodelers were polled in 2000. And as home owners gain more knowledge, they are becoming more confident about deciding what is best for their homes and playing a larger role in their projects — and putting "fly-by-nighters" on notice. “As consumers become more sophisticated in their choices and more knowledgeable about remodeling, they can distinguish the ‘fly-by-nighters’ from legitimate contractors,” said NAHB Remodelors™ Council Chairman Douglas L. Sutton, of Sutton Siding and Remodeling in Springfield, IL. With their newfound understanding, home owners are also developing a newfound patience with contractors and the pace of a project. For years, consumers demanded a quicker turnaround on proposals and estimates for their projects, but that demand has fallen to 53% from a high of 60% in 1998. The Appliance Factor Because consumers are seeing the latest Whirlpool appliance or Simonton or Pella windows being installed on the various home improvement shows, they are learning more about manufacturers and their products. According to the RMI, more than 53% of remodelers reported that their customers have an improved awareness of brand names for products and appliances for remodeling projects. They also reported that home owners are doing their homework by comparing products by quality and not just by price. Raising the Bar Through Education As home owners become more knowledgeable about home improvement projects, they are expecting higher degrees of professionalism and craftsmanship from the remodelers they hire. Remodelers can hone their business and knowledge base with continuing professional education courses from NAHB’s University of Housing. Contactors can earn their Certified Graduate Remodelor™ (CGR), Certified Aging-in-Place Specialist (CAPS) and Graduate Master Builder (GMB), among other professional designations. By earning these continuing education designations, remodelers can instill a sense of confidence in their customers that they have picked the right company to make their house a home. For more information about NAHB designations, click here. Information to Help Builders Become More Profitable Is on the WebAs a builder, do you…
If you are seeking help in these or other areas to improve your business and become more profitable, search the online business management resources available at Business Management Tools, a special, members-only section of www.nahb.org. Provided by NAHB’s Business Management Department, Business Management Tools contains articles, Web pages, books and other resources developed by and for contractors. Their voices and best practices appear throughout these materials, providing hands-on, workable solutions to the business issues you encounter on a daily basis. If it's technology information you need, Business Management Tools also includes information from IT professionals and consultants who know the home building industry inside and out. NAHB' business assistance is organized into 10 categories for your convenience so you can get the answers you need fast:
Browse the categories or search for specific topics. Visit Business Management Tools by choosing the first tab under "Resources" on NAHB’s home page. These materials are available 24 hours a day to help you increase your profits and improve your productivity. You can also suggest additional topics by e-mailing mchilds@nahb.com or jtunick@nahb.com.
Business Management Publications Available at BuilderBooks.com BuilderBooks.com offers a variety of other publications about business management. To view or purchase these publications online, click here. 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.” 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. Start Preparing for the Best in American Living AwardsThe Best in American Living Awards (BALA) give professionals in the home building industry an opportunity to enhance their reputation as leaders in the residential architecture and interior design arenas. With the arrival of spring, now is an opportune time to begin preparing your awards application and planning your photography. Co-sponsored by Professional Builder magazine and NAHB, the annual Best in American Living Award is the foremost residential design competition in the country, recognizing individuals who produce homes that illustrate design quality and success in the marketplace and exemplify the best in American living. Now in its 21st year, BALA has grown to 41 categories, ranging from single-family attached and detached homes in a variety of sizes, to custom homes, rental developments, best community and one-of-a-kind spec homes. The competition also includes the Best Affordable Home category, the U.S. Department of Housing and Urban Development Secretary’s Award for Excellence and the Best Smart Growth Community award. Additional design categories include best kitchen, best bath, best specialty room and best detail. Entries are judged on: exterior design/curb appeal, interior architecture and interior design, sales success of the product, construction quality and cost efficiency, and the site plan. Entrants are advised to submit good photographs along with their entry notebook so that the judges can evaluate architectural elements of the project. Floor plans are evaluated for their livability; considered are such elements as accessibility of the kitchen from the garage, the flow of the traffic in the home, the relationship of formal to informal space and how adult areas relate to those for guests or children. Entrants are also asked to identify their market; judges consider the plan within the context of the identified market to ensure it makes sense for the region and has market acceptance. Builders, developers, architects, land planners, designers and those working through cooperative public/private efforts to expand homeownership opportunities are encouraged to enter. The registration deadline for the awards is July 1, and entries are due by July 15. For information, eligibility requirements and application forms, visit www.housingzone.com, or call NAHB at 800-368-5242 x 8309 or Professional Builder at 630-288-8184. Lowe’s and Home Builders Institute Help Job Corps Graduates Begin Industry CareersLowe’s Charitable and Educational Foundation and Home Builders Institute (HBI), the workforce development arm of NAHB, is announcing this week that the “HBI Lowe’s Building Careers Scholarship Fund” has been established to help Job Corps graduates in financial need make the transition from training to the work site. “We are delighted with Lowe’s generous contribution of $50,000 to initiate the scholarship fund,” said HBI Chairman James A. Sattler, a custom builder from Cedar Rapids, IA. “This financial commitment by a member of NAHB illustrates the significance of the Job Corps program to our industry and reinforces our dedication to help our nation’s most at-risk students become successful members of the construction workforce.” HBI is celebrating 30 years as a training contractor for the Department of Labor’s Job Corps program. Offering training in carpentry, electrical wiring, brick masonry, landscaping, facilities maintenance, painting and plumbing, HBI places more than 2,000 program graduates in industry jobs annually. The fund will be used to help HBI trainees get started in their careers in the industry by providing financial assistance for such job-related needs as clothing, equipment and transportation. “Lowe’s sense of corporate responsibility made the creation of the fund with HBI an obvious collaboration,” said Mike Horn, Lowe’s vice president for commercial sales. “Through this partnership, Lowe’s is making an investment in the building industry’s future while making a difference in a young person’s life.” Guides Available for Easy Installation of Steel Wall Studs and JoistsData collected by the Steel Framing Alliance shows that nearly 10% of all residential structures built in the last year used steel studs for framing interior walls. Builders who were moving to steel and away from traditional materials cited steel’s speed of installation and cost savings, according to the alliance. The Steel Framing Alliance is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. One of the largest areas of expansion is in steel floor joists, which the alliance says average 18 cents per square foot less to buy and install than wood joists. Steel wall studs are enjoying similar savings and growth, it reports. To help cost-conscious builders make an easy transition to steel wall studs and joists, the alliance has released two new reference publications — the “Steel Floor Guide” and “Steel Wall Guide.” Based on the alliance’s National Training Curriculum on light-gauge steel framing, the guides feature on-the-job installation instructions useful to both the novice and experienced steel framer. They include a technical introduction, an explanation of steel’s benefits, recommendations for tools, step-by-step instructions complete with detailed illustrations, and construction tips. To download the guides, click here, or call 202-785-2022. SFA members receive a significant discount. The Steel Framing Alliance is an association of more than 350 companies and organizations with the mission of enabling the widespread use of steel framing in residential and commercial construction. Headquartered in Washington, D.C., it provides education, publications, technical support, research and development, and market development programs to companies representing the full spectrum of manufacturing, construction, design, distribution and professional services. 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 Stirrups?Ralph Chippee, a well-seasoned builder, and I were discussing his Insulated Concrete Form (ICF) project recently. He asked a lot of questions about rebar: stirrups, lap splices, end distance and the like. Our conversation brought to mind the following multiple-choice quiz question from one of my seminars: Reinforcement in concrete: A. Exists only because the rebar industry got a foothold with the concrete people some years ago, and they just won’t let go. B. Is used to take the tension in concrete tension members. And in concrete bending members, rebar takes the tension part of bending stresses. C. Is used to assist concrete in resisting shear stresses. D. Is used to assist concrete in resisting compression stresses as in doubly reinforced beams. E. Is necessary in prescribed minimum amounts in all structural concrete. F. Can be difficult to work with, so is optional at the contractor’s discretion. The correct answers are B, C, D, and E. (We like to have fun in ConstructionCalc classes, thus the ridiculous answers A and F.) Like most builders, Ralph did not have a clear grasp of the above structural concepts. “Unfortunately,” I told him, “What you don’t know can cost you. For example, take stirrups (Stirrups are “U”- or “S”-shaped rebar placed vertically and closely spaced — usually four or six inches apart — in concrete beams/lintels.) You’ve got way more in this job than you need. They’re in the wrong places, and you’ve got a ton where none are required at all.” “Great,” he said, kicking some dirt. “They’re a pain to bend and worse to snake into the forms. And with the price of rebar going sky-high…” “Here’s the deal, Ralph,” I said. “Stirrups do one thing — they resist shear stress.” He wrinkled his forehead. To help him understand the concept, I said, “Imagine a stack of 10 1x4s, say 15-feet long. If you and a friend picked them up, a guy on each end, they would sag tremendously under their own weight. But, if you glued them all together, then picked them up, there would be no sag at all. Now they’re acting as a 4x10 beam. The glue is taking the shear stress. A beam like that, supported at each end, is called a simply supported beam.” A light flickered behind his eyes. I continued. “Where is the shear stress in a simply supported beam the greatest? Go back to the 1x4s before glue is applied. Pick them up and notice where the 1x4’s slide the greatest distance relative to each other. It is at the ends. In fact, if you look closely at the middle of the sagging stack, you’ll see that the 1x4s don’t slide at all there. The farther from the middle you get, the more the 1x4s slide relative to each other. Thus the shear stress in a simply supported beam is greatest at the ends, and goes to zero in the middle.” “What does this have to do with stirrups?” he said. “Stirrups resist shear,” I replied. “Are they needed in the middle of a simply supported beam? Almost never. I say almost, because if there is a heavy point load on your beam, there may be high shear stresses at or near that load. But for most beams and lintels, where no big girder truss or other beam brings a point load, you only have to worry about stirrups near the beam ends.” “But I’m putting stirrups all the way across most lintels, as well as in the walls beyond the ends of the lintels! Are you saying all those stirrups are worthless?” “Most of them, yes,” I replied. “Many are serving no purpose, other than costing the owner money –- and bringing you grief. Further, concrete itself is good at resisting shear. It is, after all, a ‘glue.’ Many lintels need no stirrups at all because the concrete resists the shear by itself.” Then we discussed why rebar goes in the bottom of all lintels and in the tops of some. I wrapped up our conversation with this advice: “Understand the theory of your construction — then be sure to question your engineer as to whether all those stirrups, bond beams, holdowns or whatever are really necessary. If you don’t get a straight, understandable answer, find an engineer who will give you one. Remember, it doesn’t cost the engineer a penny to over-design. But ultimately someone foots the bill.” 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. Customize How You View the NAHB Web SiteYou deliver exactly what your customers want in the homes you build. Now NAHB’s Web site delivers exactly what you need to run your business and keep abreast of important industry issues. NAHB has just added customization features to the www.nahb.org site that allow you to create your own My NAHB interface and make it yours. What does that mean to you? Awards to Recognize Innovation in Workforce HousingEntries are now being accepted for the Innovation in Workforce Housing Awards, which recognize outstanding efforts to provide decent and affordable homes for nurses, police officers, school teachers, retail workers and others in the communities in which they work. The competition is open to builders, designers, developers and land planners nationwide for communities that were completed or in which the first model opened or the first unit was occupied between Jan. 1, 2002 and Oct. 29, 2004. Among the criteria considered by the judges are:
In 500 words or less, applicants are required to submit a description of the project context, its relationship to the surrounding area, its stakeholders and the challenges it met, as well as supporting materials. Entries must be postmarked no later than Oct. 29, 2004. The awards will be announced at NAHB’s International Builders’ Show in Orlando in January. For the complete guidelines and an entry form, click here. Innovative Steel Home Builds Community Recognition in New OrleansOne lucky family became home owners recently thanks to the efforts of members of the Home Builders Association of Greater New Orleans. “Home in the Dome” — a 1,400-square-foot innovative home featuring all steel construction — was a centerpiece of this year’s New Orleans Home and Garden Show. The $110,000 home was fabricated on the floor of the Louisiana Superdome by MetalPro Industries, Inc., a member of the association, and given to the City of New Orleans, which donated the land for its final placement. The home was given away by New Orleans Mayor Ray Nagin in a drawing from more than 70 eligible candidates who had completed home owner training through the Neighborhood Development Foundation New Orleans. With a goal of helping at least 100 people a year become home owners, the foundation provides counseling, education, home buyer training, advocacy and pre- and post-homeownership acquisition services to low- and moderate-income households. The winner, Tasha Torrence, will move into the new home with her handicapped mother when it is completed later this spring. “Coordinating this new home giveaway certainly enhanced the stature of both the HBA and individual members within our community and our market,” said Peter Young, president of the New Orleans builders association. “We received recognition from community and civic leaders and, of course, favorable publicity.” Share Your Knowledge and ExpertiseThe NAHB Public Affairs office is looking for a few good builders…and remodelers, architects, associates and more…to share their knowledge and perspective. The editorial staff of the association would like to draw upon the members’ wide-ranging expertise to help explain the impact of building industry policies, news and trends on day to day business. These impacts will be reported in NAHB's more than 20 electronic newsletters and other publications. Members who wish to participate will be contacted by phone or e-mail when there is news in their areas of expertise. It's an opportunity for members to gain national exposure among their peers. Ideal participants are members who, while they may not hold elected office in their local or state associations, have a significant knowledge base in a specific area and are interested in sharing their experience and perspective with others. While NAHB will continue to expand to additional areas of interest to NAHB members, the initial request is for stakeholder members who are willing to comment on one or more of the following issues:
Executive officers in state and local accociations have already begun compiling contact information about members who they believe will be enthusiastic about acting as sources for stories about critical issues for NAHB print and electronic publications. If you are interested in participating or know of someone who would be a good resource, contact your executive officer or NAHB Public Affairs at 800-368-5242 x8061.
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
To view more meetings & events information on the NAHB Web site, click here.
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. 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. |