Nation's Building News Online: June 7, 2004Print All Articles Text Version |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Sponsored by Countrywide Home Loans National Builder Division |
|||||||||||||||||||||||||||||||||||||||||||||||||||
New Web-Based Resource Documents Important Role of Builders in Species Conservation EffortsBuilders and developers are playing an important role in species conservation under the federal Habitat Conservation Plan (HCP) program, and their efforts to set aside private land for preserving the essential habitat of endangered and threatened species are documented in a new NAHB Web-based resource at www.nahb.org/HCP. The analysis from NAHB includes case studies and weighs some of the pros and cons of the HCP program. Established under the Endangered Species Act (ESA), the HCP program allows property owners to work with conservation experts to identify and preserve essential habitat as part of the land development process. Property owners work with biologists at the U.S. Fish and Wildlife Service to develop plans to conserve habitat so that they can meet the housing needs of their communities while ensuring that wildlife is adequately protected. “As one of the few options available for proactive species conservation efforts, Habitat Conservation Plans are a win-win situation for our members and the environment,” said NAHB President Bobby Rayburn. “The HCP program is smart policy that treats property owners as cooperative partners, not enemies.” However, NAHB’s case studies on actual HCPs reveal that developing a plan can be time-consuming, taking nearly two years on average from the consultation phase to approval. This can have a significant impact on construction costs and housing prices, and it is a disincentive to establishing the plans. Greg Miller, who owns Fort Morgan Realty in Baldwin County, AL, developed an HCP for a half acre of oceanfront property to protect the endangered Alabama beach mouse and three species of sea turtles. His HCP has yet to be approved more than three years after his permits were submitted. “For the past three years, we have been totally shut down when it comes to construction,” said Miller. “At this point, we are sitting on three lots and have several clients for single-family home projects that have been caught in the permitting process for years.” Miller’s situation is just one example of the many problems that have led NAHB to support a number of changes to the HCP program, including:
“Congress should confirm its original intent and codify the existing No Surprises policy as part of the ESA to give private property owners, state and local governments and community organizations the necessary certainty to continue their species conservation efforts,” said Rayburn. Click here to read more of NAHB’s analysis and to learn more about the role builders and developers play in species conservation using Habitat Conservation Plans. For additional information about HCPs and NAHB’s new Web-based resource, e-mail Christopher Galik or call him at 800-368-5242 x8663. Building News Coast To CoastThe Perfect Summer House — Mom'sMany younger home buyers are finding it impossible to purchase vacation properties in many locales, considering that a supply-and-demand imbalance, low interest rates and zoning rules that aim to control growth have sparked double-digit price gains in this segment of the market. The National Association of Realtors® reports a 6.5% jump in overall vacation-home prices during the last year, with prices in the Hamptons, NY; Newport, RI; and the Outer Banks, NC, soaring 24%, 35% and 38%, respectively, since 2002. Rents in many of these hot spots have surged as well. As a result, cash-strapped buyers are invading their parents' vacation getaways. While some parents welcome the presence of their children and are willing to pass the properties over to them, others are forced to battle for money to cover maintenance and repairs or work around the kids' schedules in order to enjoy their own vacation retreats. Traditional Living, With a Slightly Modern TwistTraditional neighborhood developments (TNDs) are mixed-use communities with numerous housing types, stores within walking distance and a multitude of activities. Seniors are especially drawn to TNDs because they offer the opportunity to interact with residents of all ages; and their designs allow older residents to remain active, independent and social. With people roaming about at all hours, seniors also feel safer than they would elsewhere. Some TNDs even feature continuing-care components so that seniors can transition into assisted-living or skilled-nursing units if necessary. In fact, the availability of homes in different price ranges makes it easy for residents to move within the neighborhood to meet their needs. Meanwhile, an Oshkosh, WI-based planning team is currently devising a so-called "Living, Learning and Serving Community" that expands the TND to include on-site university services and other educational programs. Experts believe TNDs integrate home and community better than the typical seniors-only retirement havens, but they advise seniors with limited funds or a love of privacy to seek housing elsewhere. TNDs also are not recommended for those who shun community regulations or neighborhoods that will not be completed for a number of years. Curbside Appeal Yields Green When Home Is SoldCurb appeal is essential, considering that many real estate agents refuse to show a home to their clients if the landscaping and exterior are in poor condition. "With curb appeal, if the outside of the house has been taken care of, then the impression is, the inside of the house has also been taken care of," notes Maryland-based agronomist Ashton Ritchie. Home owners need not spend too much on improvements, especially since research by HomeGain links higher returns to projects priced between $86 and $2,765. In fact, the study says home owners can reap a 266% return by spending just $432-$506 on landscaping and a 34% return by shelling out about $2,100 on exterior paint jobs. Some appraisers agree that curb appeal itself does not boost property value, but it helps preserve value and lure buyers. Inexpensive improvements that can be completed in just a weekend include trimming plants and bushes; planting colorful flowers; mowing the lawn; installing a new front door and mailbox; cleaning the deck and porch; repairing siding and roof shingles; and resealing the driveway. New Federal Aid for Home BuyersState and local governments will soon receive their share of the $161.5 million set aside for the American Dream Downpayment Initiative, which aims to help first-time buyers achieve homeownership. HUD Secretary Alphonso Jackson believes the initiative will narrow the gap between minority and white homeownership rates and buoy the overall homeownership rate above its current record level of 68.6%. However, Judy Kennedy of the National Association of Affordable Housing Lenders calculates that the $161 million will assist only 16,000 families eligible for the maximum award of $10,000. She is especially concerned about the state of affordable housing now that both the federal HOPE VI grant program and the Section 8 voucher program have been cut. Dogs Are a New Tool in Battle Against MoldMany home owners are using trained dogs to locate mold as an alternative to more expensive detection techniques. Pennsylvania Mold Dog, for instance, provides mold-sniffing canines to pinpoint infestations, with home owners spending only about $245 for the inspection and laboratory analysis. Such companies do not offer remediation services, however, due to potential conflicts of interest. Home owners also can identify mold with the help of professionals equipped with hand-held devices or through air samples. Home for Sale: Luxe Kitchen, Whirlpool, Hospital AccessMany affluent seniors are trading in their traditional dwellings for equity ownership in one of about 60 continuing-care communities nationwide. Equity-ownership arrangements allow healthy retirees to own an apartment or cottage, with access to assisted-living or skilled-nursing care at a discount if and when the need arises. Such communities generally offer a multitude of activities, top-notch amenities and quality care; but buyers cannot make the purchase without a clean bill of health. The costs range from about $100,000 for a studio apartment to more than a million for a villa or cottage, depending on location; and owners also are required to pay sizable monthly fees for maintenance, meals and services. When home owners need assisted-living or skilled-nursing care on a permanent basis, they sell their units, split the profits with the nonprofit association in charge of the community and pay monthly fees for their health care. House ArrestThe National Association of Realtors® reports that 40% of the 7 million homes that traded hands in 2003 went to first-time buyers as record-low interest rates made homeownership more affordable. The average first-time buyer last year was a married woman in her mid-30s with an annual income of $54,000, while the average veteran buyer was a married man around age 46 who earned nearly $75,000. The U.S. homeownership rate hit 68% in 2002, with the highest rates among baby boomers in the 40- to 49-year-old demographic, more than 70% of whom owned their homes. Those between ages 25 and 29 accounted for 39% of home owners two years ago, and the homeownership rates of the 30- to 34-year-old and 35- to 39-year-old demographics lagged behind as well at 55% and 65%, respectively. Moreover, according to NAR, the number of home buyers between the ages of 25 and 39 slipped 7% per during the last nine years. NAHB economist Michael Carliner notes that higher property prices make wealthier home owners and simultaneously block certain buyers from homeownership, a scenario that is expected to continue as more and more minorities enter the pool of first-time buyers. Meanwhile, NAHB is formulating ways to slash housing costs for low- to moderate-income workers. Sniffing Out TermitesTermites cost the nation's home owners more than $2.5 billion in damage every year, but substantial losses can be avoided with annual inspections by licensed pest-control specialists. These professionals use acoustic emission detectors, gas detectors, moisture meters, ice picks, infrared imaging, microwaves, borescopes and trained dogs to identify the sounds, odors, movements and damage associated with termite infestations. Visual signs of termites include thin mud tubes; discarded wings from swarmers; damp or blistered wood; pinholes containing grain-sized droppings; and swollen floors, ceilings or walls that house their nests. There are a number of chemical treatments that can be used to eliminate the problem, ranging in price from $250 to nearly $3,000. Depending on the type of termite, home owners can choose baits, non-toxic boron-laced foam, wood injections, poison gas or soil drenches. Soil drenches offer five years of protection against termites, but the pesticides can seep into wells or waterways in close proximity to the home. Those interested in poison-free treatments can spend between $500 and $6,000 to pump hot air into the home or use high-voltage discharges to electrocute the insects. Preventative measures include keeping foundations dry, quickly repairing leaks, storing firewood away from the residence and above the ground, and frequently cutting shrubs. Web Site Teaches Building-Science PrinciplesThe original Houses That Work online site, created by Boston's Building Science Corp. and the Department of Energy's Building America program in 2001, gave visitors access to information on energy-efficient building practices according to geographic region. Houses That Work II is an expanded version of the Web site that offers information on basic building-science principles; R-values, water-absorption rates and other properties of building materials; and climate-specific building designs. The updated site divides North America into eight temperature zones and recommends three building systems for each. A free resource, the site will prove helpful to anyone planning to build a new home or simply hoping to enhance the energy efficiency of an existing property. Energy Star, LEED and Commercial BuildingsA pair of strategies designed to make office buildings more energy-efficient is helping transform how people view energy use and environmental issues. The U.S. Environmental Protection Agency's (EPA's) Energy Star program for labeling energy-saving computers has been expanded to include homes, buildings, household heating and cooling systems, appliances, lighting and office equipment. To earn an Energy Star label for buildings, structures' energy use has to be adjusted and compared to similar buildings across the country; buildings in the highest 25% — satisfying industry specifications for temperature and humidity, illumination, outside air ventilation and indoor pollution control — can earn the label. The EPA estimates that Energy Star has helped Americans save more than 100 billion kilowatt-hours of electricity through 2002, and has also averted more than 20 million metric tons of carbon equivalents of greenhouse-gas emissions. The LEED (Leadership in Energy and Environmental Design) approach, on the other hand, is a point-based, nationwide standard for erecting smarter and more integrated buildings, based on five areas — sustainable sites, water efficiency, energy and atmosphere, material and resources, and indoor environmental quality. LEED-NC is a rating method for new construction and major reconstruction projects, while the LEED-EB system, expected to be finalized in 2005, is meant for existing structures and system enhancements, and is performance rather than point-based. One of LEED's prerequisites includes meeting minimum energy performance guidelines, which can be based on local energy codes or the ASHRAE/IESNA Standard 90.1-1999, whichever is more stringent. Data from California's Sustainable Building Task Force reveals that the average premium for green buildings is a little less than 2%, largely due to greater architectural and engineering design time, modeling and time needed to implement sustainable building practices. New Technology Allows PC, E-Mail SearchesRather than employing various search engines, file management systems and other tools, users may soon be able to use a single system to weed through e-mails, computer files and data bases. Yusuf Mehdi of Microsoft's MSN division calls it "an end-to-end system for searching across any data type." Microsoft, aiming to get an edge over Google and other competitors, plans to roll out the first version of the system before the newest version of Windows is released in 2006. Unlike other Internet search systems, Microsoft's offering will focus on personalization. The system is expected to recognize users who have not signed on, as well as monitor their online movements to create Web pages that best meet their needs. Like Google's G-mail, Mehdi says it could include e-mail advertisements based on message content. However, he notes that "privacy and consumer trust is really a key thing in getting your arms around personalization." Tips on Selecting Your First Color CopierTo make sure they make a proper investment, businesses must educate themselves before purchasing their first color copier. Color copiers are much less expensive today than they were even a few years ago — ranging from low-end color ink jet copiers for about $199 retail to high-end machines with listed prices between $50,000 and $60,000. Businesses considering making their first investment in a color copier must determine what kind of copier they need by assessing their current applications and copying needs. In addition to the cost of the copier, businesses must consider the cost of maintenance, ink cartridges and other consumables. Copy volume and output quality are other important factors to consider before making a purchase. Businesses are advised to educate themselves about their copying needs and the features available to them, to discuss their purchase with a copier technician and to request performance demonstrations before investing in a new color copier. Bug BytesA recent Princeton, NJ-based research firm Kelsey Group survey found that about 25% of shopping-related Web searches are for local products and services, while nearly 64% of Internet users prefer search engines to the yellow pages. Such statistics have precipitated a shift to the Web among small businesses seeking an advantage over competitors. Yet despite plummeting costs for Web design and maintenance — in 1995 it cost an average of $10,000 to have a Web site developed; now it costs $1,200 — research firm IDC of Framingham, MA, estimates that by the end of the year, only about 50% of small businesses in the United States will have their own sites. Fred Folsom, founder of Georgia firm Barnes Exterminating, decided to set up a Web site when a customer informed him that he had nearly taken his business to a competitor listed on the Web. After months of searching, Atlanta-based Interland was chosen to accomplish the task, providing site building, hosting and registering services for $95 a month and maintenance for an additional $35 a month. Such costs are easily recouped by just a single customer driven to the company by a Web search engine. NAHB Members Urged to Watch the Mail for Liability Insurance SurveyMore than 50,000 NAHB members will get a "call to action" on general liability insurance (GLI) this week via a special mailing. The mailing is part of the ongoing effort to ensure effective and affordable GLI coverage options for NAHB members in the years to come. “NAHB members should be watching their mailboxes this week, and if they receive the mailing, they should sit down and complete the survey and provide the materials needed to make this project a success,” said NAHB President Bobby Rayburn. “With insurance costs rising and exemptions making coverage less effective, it’s in everyone’s interest to participate in this effort.” NAHB is partnering with Marsh, a global insurance and consulting firm, to develop new GLI products that will meet members’ needs. NAHB’s relationship with Marsh is intended to:
The objective of the GLI initiative is to gain an accurate national picture of the loss experiences of the residential construction industry so that new GLI products can be developed exclusively for the NAHB membership. The contents of the mailing, which are also available online at www.nahb.org/gli, include insurance surveys — one version for builders and remodelers and another for trade contractors — plus a model consent letter authorizing insurance providers to supply crucial background information for this effort. The mailing is also going to NAHB-member insurance agents, who will play an important role in the GLI initiative, Rayburn said. “We're encouraging builders to use their insurance agents as resources for their data submissions,” he said. Marsh and NAHB are working on a timetable that would bring new GLI products to the market by January 2005. For more information about the GLI initiative, NAHB members can go to www.nahb.org/gli; or e-mail Clayton Traylor at NAHB or call him at 800-368-5242 x8490 or contact Blake Smith x8583. Housing SnapshotMore favorable economic news arrived last week with the announcement from the Commerce Department that the nation picked up 248,000 new jobs in May. Added to big gains in March and April, almost 950,000 jobs were created in the past three months. "What a difference a year makes," said Commerce Secretary Donald Evans. "A wakeup call has been sent that the United States economy is back." Mortgage interst rates dropped slightly last week, Freddie Mac announced on Thursday. Economists at the secondary market institution noted that Adjustable Rate Mortgages are accounting for about one-third of the current home purchase market. Lumber prices remained high last week, with little clear evidence that they are headed decisively in a downward direction. The price of framing lumber rose to $436 per 1,000 board feet, according to Random Lengths, a $3 increase. Framing lumber was at $288 for the same week a year earlier. After a couple of weeks of softening, the price of panels was up again: 15/32-inch 3-ply CDX southern west-east plywood rose to $410 per 1,000 square feet, up $10 from the previous week; and oriented strand board rose to $400, from $360 the week before. Mortgage Interest Rates30 Year Fixed Rate: 6.28\% Housing Starts: Apr. 2004Total: 1.969 million\% New Home Sales: Apr. 2004 *1.093 million Existing Home Sales: Apr. 2004 *6.64 million * Seasonally Adjusted Annual Rate You Can Help Solve the General Liability Insurance ProblemCosts for insurance are skyrocketing, and in some markets, builders can’t get coverage at any cost. In response, NAHB has formed a partnership with Marsh, the global risk management consulting firm. In a plan endorsed by the NAHB Board of Directors, our association and Marsh are gathering data from builder, remodeler and trade contractor members to create a comprehensive profile of the home building industry’s risk management needs. Marsh will then use that profile to develop effective new general liability insurance (GLI) products for NAHB members. The first and most important step is to understand the actual loss experiences of the residential construction industry. Marsh is surveying thousands of NAHB members to learn more about their businesses and their insurance needs. Members will also need to provide Marsh with a letter addressed to their insurance carrier giving the carrier consent to share loss information with Marsh. Over the next 60 days, NAHB and Marsh will be contacting builder, remodeler and trade contractor members and asking them to complete the survey, put the consent letter on their letterhead and send those materials to: Marsh, c/o Jessica Hatch, 1166 Avenue of the Americas, New York, NY 10036. Marsh will use the information gathered from builders, remodelers and trade contractors to develop a sophisticated profile of the residential construction GLI market. This broad understanding of the market will enable Marsh to develop risk-management strategies that improve the coverage, cost and availability of GLI for the home building industry. We need your help. If you are a builder, remodeler or trade contractor, then we need you to fill out the survey, put the consent letter on your letterhead and send these materials to Marsh. If you are one of the 44,000 members who receives the GLI mailing, then please complete the survey and consent letter and send these materials to Marsh as soon as possible. If you do not receive these materials in the mail, then I strongly encourage you to go to www.nahb.org/gli. There you will find all the materials from the mail piece. We need as many builders, remodelers and trade contractors as possible to participate in this effort. Please note that your insurance agent can be an important resource in finding this insurance information. I want to stress two points: 1) All information in the database will be kept in strict confidence; and 2) Your current insurance agent will have the opportunity to sell new products developed through this initiative. This is about your business profits. This is about the long-term health of our industry. Taking a few minutes to gather your insurance information and send it to Marsh could be the first step in solving one of our industry’s toughest challenges — and in saving you thousands of dollars in insurance premiums. Please do your part. Find Out How Your Members of Congress Voted on Key Housing IssuesMembers of NAHB can now track how their U.S. representative and senators voted on legislation of particular importance to the nation’s housing industry. During every two-year congressional cycle, lawmakers on Capitol Hill typically consider a host of issues that affect the building industry. The NAHB Federal Government Affairs Committee and BUILD-PAC, the association’s political action committee, designate decisions on legislation that is especially important as “key votes.” During the current 108th Congress, key votes have occurred on a number of bills:
To find out where their federal lawmakers voted on these and other key measures dating back to the 106th Congress, NAHB members can go to www.nahb.org/keyvotes. To see the legislation listed above, click here, and enter the bill number in the box at the upper left. For more information, e-mail Michael Strauss at NAHB or call him at 800-368-5242 x8252. Homeownership Alliance Presents 'Homeownership Hero' AwardsSeven individuals received "Homeownership Hero" awards from the Homeownership Alliance on June 2 for their contributions to the expansion of homeownership opportunities in America. The awards were presented during a reception in the Russell Senate Office Building in Washington kicking off National Homeownership Month activities. The month-long celebration promotes homeownership and its many social and economic benefits and serves to build support for the policies that have made homeownership a way of life in the United States. “The individuals we are honoring are sincerely heroes. Each one has made a major contribution toward putting more American families in their own home,” said Richard H. Davis, president of the Homeownership Alliance. The following individuals were named “Homeownership Heroes”:
Commerce Proposes to Cut Canadian Lumber Duties in Half, But Builders Want Them EliminatedA preliminary decision by the Commerce Department last week to reduce duties on imported Canadian softwood lumber by 50% by the end of this year is a step in the right direction, but more decisive action is needed to totally eliminate the tariffs before they take a further toll on the affordability of new housing, according to the nation’s home builders. “The Commerce ruling to reduce punitive duties on Canadian lumber shipments from 27.2% to 13.2% shows that even the U.S. government is finding it increasingly difficult to justify complaints from domestic producers that Canadian lumber is subsidized,” said NAHB President Bobby Rayburn. A North American Free Trade Agreement (NAFTA) panel recently determined for a second time that the U.S. lumber industry’s allegations that it is threatened by Canadian trade practices are baseless and contrary to law, Rayburn noted. Under U.S. law, if that decision is upheld, the Administration will have no alternative but to eliminate the duties altogether. “It’s high time to end the duties on Canadian lumber and end the hidden tax imposed on American home buyers and renters,” said Rayburn. “We call on the Administration not to engage in any legal delays and to allow the implementation of the NAFTA decision.” The U.S. International Trade Commission has until June 10 to respond to the NAFTA panel. After accepting complaints from U.S. lumber producers that they could be harmed by Canadian lumber imports, the Commerce Department in May of 2002 imposed countervailing and anti-dumping duties averaging 27% on Canadian softwood lumber shipments into the U.S. The June 3 proposal by the Commerce Department to cut the levies came after U.S. trade officials changed how they calculate prices and duties. The final rate, which can be appealed, will be determined after Commerce completes its final administrative review in December. Due to tariffs and strong demand for wood in the U.S. and overseas, the cost of framing lumber averaged more than $450 per 1,000 board feet last month, up 40% from the beginning of the year and its highest level since July of 1999, according to the authoritative trade publication, Random Lengths, which is based in Eugene, OR. Homeownership Declining Among Families With Children, Study FindsDespite a record-high rate of homeownership for the nation on the whole, the percentage of families with children who own their homes is lower than it was during the 1970s, according to a study released last month by the Center for Housing Policy, the research affiliate of the National Housing Conference. The homeownership rate for all families with children decreased from 70.5% in 1978 to 68.4% by 2001, the study found. Among low- to moderate-income working families with children, the homeownership rate dropped from 62.5% to 56.6% during that same period. By comparison, 65.2% of all households owned their homes in 1978 and that increased to 68.3% by last year. The study defined working families as households earning less than 120% of the local median income, but more than the full-time equivalent of the minimum wage. “For the sake of this nation’s families with children, and the communities in which they live, we must do more to ensure a range of decent, affordable housing opportunities for those within low- to moderate-income levels,” said Bob Reid, president and CEO of the Center for Housing Policy. “It is important to remember that many of these same families also provide vital services on which communities depend, such as police officers, fire fighters and elementary school teachers.” During the 1978-2001 time frame of the study, the number of working families with children rose from 11.9 million to 17.5 million and their share of all U.S. households climbed from 15.4% to 16.4%. Homeownership rates for working families with children decreased among both couples and single-parent households, “so the decline cannot be attributed solely to changes in household type,” the study concluded. “It is likely that stagnant incomes and the rising costs of homeownership played important roles.” According to Census data, the median sales price of a new home in 1978 was $55,700, or four times the $14,258 median income of a working family with children, the study said. In 2001, that home cost $175,000, or five times the median income of $35,000. For more of the study, "Working Families With Children: A Closer Look at Homeownership Trends," click here. No Unsustainable Speculative Bubble in U.S. Housing Market, According to UCLA PhysicistsPhysicists at the University of California, Los Angeles last summer released findings that the Federal Reserve’s “aggressively reduced short-term rates yields” and the lowest mortgage interest rates in decades had not created a bubble in home prices in the U.S. “Testifying before the Senate Committee on Banking, Housing and Urban Affairs in July 2002, Federal Reserve Board Chairman Alan Greenspan told lawmakers that rising home prices in the USA are a by-product of ‘low mortgage rates, immigration and shortages of buildable land in some areas,’” according to the authors of the report — Wei-Xing Zhou and Didier Sornette. “As a result, home owners have more equity they can use to pay off high-cost consumer debt and for other purposes. This leads to a beneficial effect on the U.S. economy rather than suggesting the possibility of a real estate crash,” they wrote. “Based on the science of complexity, our analysis provides a confirmation of this conclusion derived from more standard economic analysis.” The analysis from the UCLA scientists reaches more troubling conclusions about the situation in Great Britain, where they believe housing prices could be poised for a crash. The authors also site the segmentation of the U.S. housing market, which housing economists continue to argue is a factor that makes a national decline in the nation’s housing prices highly improbable. The physicists based their analysis on the science of complexity, which, they say, “explains the spontaneous occurrence of coherent large-scale collective behavior, such as well-functioning capitalistic markets but also financial crashes and depressions, from the repeated nonlinear interactions between the constituents of economies.” The analysis at UCLA represents a relatively new approach to studying the economy called “econonophysics.” “Over the past decade, statistical physicists have begun to suggest that economists might want to rethink some of the basic assumptions upon which they construct their models,” writes Philip Ball in “Critical Mass — How One Thing Leads to Another.” “By importing ideas from physics, say the physicists, economists can start to make sense of the erratic and so far unpredictable behavior of the world’s markets,” Ball writes. Eye on the EconomyEconomic growth is ploughing along, strengthening the labor market and raising inflation issues … Real gross domestic product (GDP) grew at an annual rate of 4.4% in the first quarter, according to the preliminary report released by the Commerce Department on May 27. This estimate was a bit higher than the earlier “advance” report (4.2%) and indicates the third consecutive quarter of above-trend growth that, by its nature, generates systematic improvement in the labor market. There’s still a sizeable gap between the levels of actual and potential GDP, and economic policymakers should continue to foster above-trend economic growth that will help close that gap and soak up remaining slack in the labor market — assuming that inflation remains in an acceptable range. Real GDP should expand at about a 4.5% pace in the second quarter, and we’re forecasting growth averaging about 4% over the balance of 2004 and in 2005. On the inflation front, incoming data confirm that the deflation threat has passed and highlight emerging upward pressures on core inflation (excluding food and energy). The core Producer Price Index (PPI) posted a year-over-year advance of 1.5% in April, continuing the pattern of upward gravitation that began last fall. The core Consumer Price Index (CPI) posted a 1.8% year-over-year advance in April, continuing the rather rapid acceleration that began early this year. And the core price index for Personal Consumption Expenditures (PCE), a favorite of the Fed, posted a year-over-year increase of 1.4% in April, continuing the pattern of acceleration that began in January. The economy and financial markets are pushing the Fed down the path to monetary ‘neutrality’… The impressive employment reports for March, April and May — coupled with the systematic pickup in core inflation signaled by the PPI, the CPI and the PCE price indices — have increased the chances for a near-term rate increase by the Fed. Furthermore, recent public statements by various Fed spokespersons show that the central bank definitely is leaning in that direction. There’s still a high probability of a quarter-point increase in the federal funds rate target at the next Federal Open Market Committee (FOMC) meeting on June 30, and that presumption is now incorporated in NAHB’s forecast. We’re also assuming quarter-point increases at the Aug. 10 and Nov. 10 meetings, bringing the funds rate up to 1.75% for the balance of the year. The Fed presumably is planning to move the federal funds rate to a “neutral” position that neither stimulates nor impedes growth of the economy. Neutrality should be around 4% on a nominal basis and 2% in real (inflation-adjusted) terms. We currently assume that the Fed’s march to neutrality will take nearly two years, but the speed of adjustment will be heavily influenced by the actual path of core inflation. Core inflation is not likely to break out of the Fed’s range of acceptability … Looking ahead, the big question is: will core inflation break out of the Fed’s range of acceptability and force the entire yield structure higher and higher? One school of thought says that a near-term breakout is inevitable as the economic expansion proceeds and the job market tightens. Another insists that the recent pickup in core inflation (particularly the core CPI) contains some temporary factors and that ongoing strength in growth of labor productivity will continue to hold down unit labor costs and allow the expansion to proceed with minimal inflationary pressure. A firming dollar on the foreign exchange markets also supports the low-inflation case. NAHB’s forecast leans toward the second school of thought. We believe that current long-term rates reflect realistic inflation expectations as well as realistic assessments of future Fed policy. That said, history shows rather clearly that Fed tightening, once it begins, causes long-term rates to move up by at least a fraction of the increase in short-term rates as liquidity is withdrawn from the financial system. Our forecast shows a percentage-point increase in long-term rates in the context of a 2.5 percentage point increase in the federal funds rate between mid-2004 and late-2005. This round of Fed tightening is not intended to squash housing and the economy … A tightening process by the Fed ordinarily begins when the economy is overheating after a long economic expansion and when upward pressures on inflation definitely are serious. This time, the economy still has a lot of slack in the labor and capital markets, we’re coming off a period of dangerously low inflation and the Fed is moving off an extraordinarily stimulative monetary policy stance that was designed as defense against potentially destructive deflation in the U.S. economy. This emergency stance has involved a federal funds rate of only 1%, a rate that actually became negative in real terms when inflation began to edge up early this year. Federal Reserve tightening in the late '70s, late '80s and 2000 amounted to hitting the policy brakes, as did a rather frightening episode in 1994 when the Fed believed the economic recovery was gaining too much forward momentum. In the present case, the Fed will be gradually lifting the accelerator off the floor rather than hitting the brakes, seeking to shepherd the evolving economic expansion into a self-sustaining trend characterized by a low and stable unemployment rate as well as low and stable inflation. Low inflation is as good as gold for home builders … Maintenance of low inflation is critical to the housing industry since long-term interest rates are highly sensitive to inflation. Thus, builders actually should appreciate the Fed’s march back toward a neutral monetary policy position, even though higher short-term rates raise the cost of credit for construction and land development, since the effort should pay dividends in terms of long-term mortgage rates. If the Fed is successful, builders can look forward to strong housing demand for many years. Recent NAHB analysis of long-term trends shows that demographics, replacement requirements and other fundamentals should support production of nearly 1.5 million single-family homes per year, on average, during the 2004-2013 period. That, by the way, is up to 2003 standards when single-family starts hit a record high. House values continue to post solid gains in both nominal and real (inflation-adjusted) terms … Home sales and housing production have remained quite strong so far this year, and house prices have continued to far outpace broad measures of inflation in prices of goods and services. The repeat-sales House Price Index (HPI) produced by the Office of Federal Housing Enterprise Oversight (OFHEO) posted a 7.7% year-over-year advance in the first quarter, in the range of increases seen during the past three years, and all the states and major metro areas posted positive changes. Furthermore, the median price of existing homes sold rose at a 7.3% pace in April. Now that the job market is truly in gear in most places and the threat of overall price deflation is behind us, bursting house price “bubbles” is becoming quite a distant prospect. A major study first completed by NAHB and other members of the Homeownership Alliance projects national home price increases in the range of 5%-6% in coming years. 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 June 2 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. Home Builders Responsible for the Safety of SubcontractorsHome builders are increasingly being held responsible for safety violations by subcontractor employees, according to American Family Insurance, making it more important than ever to select subcontractors who are safe and providing them with safe working conditions. “Contractors can no longer hide behind the old ‘hands off’ approach or ‘hold harmless’ contract clauses,” the organization says. “Courts are increasingly eroding those protections. Job site owners and project contractors are now held wholly or partially liable for the actions of subcontractors, and for providing them safe working conditions.” There are a number of ways to determine that a subcontractor is safe, American Family advises:
Once a safe subcontractor has been selected, these should be included on a checklist to communicate minimum safety requirements:
For more information, e-mail George Middleton at NAHB’s Labor, Safety and Health Department, or call him at 800-368-5242 x8590.
Safety Publications and Resources Available Through BuilderBooks.com BuilderBooks.com offers a variety of safety publications online. To view or purchase these publications, click here. Free Construction Safety Seminar at Various Locations This SummerA seminar for home builders and trade contractors focusing on the development and effective implementation of a company safety and health program is being held at a dozen home builders associations around the country from July through September. The seminar is free, but some associations may charge a nominal fee for any food or beverages that are provided. The four-hour seminar, “Develop and Implement a Home Builder Safety and Health Management Program,” has been developed by the NAHB Research Center and NAHB through a training grant funded by the Occupational Safety and Health Administration (OSHA). Training materials focus on the importance of a safety and health program and are designed to help participants write a clear and easy-to-understand program and successfully put it into operation. Each participant will receive a student manual and CD-ROM that includes a how-to guide that is easy to customize and adapt to meet the safety needs of individual businesses. Participants also receive a training completion card and valuable materials on worker safety and health. The seminar will be held at the following associations, which can be contacted for registration information:
For further information on the seminar, click here, or e-mail George Middleton or call him at 800-368-5242 x8590.
Safety Publications and Resources Available Through BuilderBooks.com BuilderBooks.com offers a variety of safety publications online. To view or purchase these publications, click here. Report Finds Insufficient Link Between Mold and Serious IllnessesA long awaited report from the National Academy of Sciences’ Institute of Medicine finds insufficient evidence to link serious health problems — such as cancer, fatigue and neuropsychiatric symptoms — with damp indoor spaces and mold. The report does conclude, however, that indoor mold can be associated with upper respiratory symptoms, including coughing and wheezing. The findings of the new report are “absolutely consistent with the findings of NAHB’s 2003 medical literature review on the same topic,” said NAHB President Bobby Rayburn. “Although this study does not completely rule out a link between mold and serious human illnesses, its review of the entire body of medical research is the most comprehensive to date.” The institute’s report, “Damp Indoor Spaces and Health,” recommends that modification of regulations, building codes and building-related issues should be included in any future discussions on public health policies to promote healthy indoor environments. The report was requested by the Centers for Disease Control and Prevention. To read the National Academy of Sciences’ report, click here. To order NAHB’s 160-page report, “Scientific Literature Review of Mold — A Report on the Health Effects of Indoor Mold,” from BuilderBooks.com, click here; to download it for free, association members can click here. NAHB’s Web site, MoldTips.com, provides home owners and tenants with easy-to-understand information on mold prevention and cleanup. NAHB also provides technical information on moisture control and building systems to home builders through the NAHB Research Center. For questions about issues related to mold, e-mail David Jaffe at NAHB or call him at 800-368-5242 x8137. Competition Opens for EnergyValue Housing AwardsThe NAHB Research Center is now accepting applications for the 2005 EnergyValue Housing Awards (EVHA), which recognize builders who voluntarily integrate energy efficiency into the design, construction and marketing of their new homes. More than 35,000 homes have been sold by winners of the award over the program’s nine-year history. Carrie Gehlbach, former vice president of sales and marketing for Medallion Homes, of San Antonio, said that winning the award was not only good for marketing but it pushed her company to raise its standards. “We have been able to network with a community of building scientists and industry leaders who have helped us learn new and better ways to deliver the best possible home,” she said. The awards, which will be presented during the 2005 International Builders’ Show in Orlando, FL, will be presented in affordable, custom/demonstration, factory-built, production and multifamily categories for hot, moderate and cold climates. Applicants will be evaluated on their homes’ energy value, design, construction methods and processes; marketing and customer relations efforts; and participation in voluntary energy programs. The panel of judges will be comprised of experts on energy efficiency representing the engineering, construction, design and marketing fields. AN EVHA Builder of the Year will be selected from the gold award winning companies. All award applicants will receive a detailed evaluation of their entries, complimentary tickets to the awards dinner ceremony and a free copy of the “EVHA Guide: How to Build and Profit With Energy Efficiency in New Home Construction.” EVHA winners are featured on the NAHB Research Center’s Web site; can market themselves as EVHA winners in advertisements and press releases; can be featured in publications; and can share their success stories at workshops, educational programs or conferences. All professionals in the U.S. whose primary occupation is constructing or developing real estate are eligible. The homes must have been completed after January 2002 and before the application is submitted. Entries must be postmarked by Aug. 9; there is a discounted application fee for those submitted by July 12. The awards are coordinated by the NAHB Research Center in partnership with the U.S. Department of Energy’s National Renewable Energy Laboratory and NAHB. For an application, the rules for the competition and other information, click here, or send an e-mail. Do Your Financial Statements Add Up? If Not, Be Alert to FraudThe seventh in a series about preventing fraud from affecting your business. Don’t make the mistake of having someone review your financial statements and management documents for you because you don’t understand them or don’t have the time to review them yourself. Thieves could be filching your assets and hiding the evidence in doctored documents. Instead, insist on regularly receiving financial statements and management documents at a specific time each month. Then, take the time to become very, very familiar with them. This is the best way to spot something out of the ordinary and uncover fraud. (If necessary, ask your accounting advisors for some in-depth training in how to read and interpret them.) Here’s what to look for as you review the following documents: Balance Sheet — Check It Very Thoroughly The balance sheet basically states what you own (assets), what you owe (liabilities) and what is left over (equity) on a given date. Because business owners tend to focus on income statements, embezzlers often find it easier to conceal fraudulent activity in balance sheet accounts. This is one document you should check very thoroughly. Pay close attention to what changes from period to period (i.e., accounts receivable, accounts payable, work in process, various loan balance accounts, fixed asset accounts, etc.). Determine which accounts should be increasing or decreasing and ask for supporting schedules. (Read the earlier article in this series, "Review Your Accounting Reports to Protect Yourself From Fraud," for some more details about balance sheet supporting schedules and change reports.) Income Statement — Stay on Top of Cost Accumulations and Gross Profits Fraudulent activity also can be hidden in an income statement, particularly in accounts with large cost accumulations (e.g., building materials, trade contractors, payroll, etc.). Job Cost Reports — Beware ‘Buried’ Fraudulent Materials Costs You may ask, “How could fraudulent activity be concealed in a detailed estimate vs. actuals by job-stage report if I’ve followed all of the previous balancing processes?” You will have to be creative to uncover the answer. After all, embezzlers are. For example, what if your estimate included costs for something the client decided not to include, or if the cost of drywall decreased but your estimate didn’t reflect the change? If an embezzler wrote a check to a phony supplier for the amount of the difference, would you spot it? Probably not; we’re usually “wired” to look for variances. If the entries look normal, fraudulent costs easily can be overlooked. What You Can Do Immediately
Other Red Flags in Your Financial Reports That Can Alert You to Possible Fraud
Thoroughly investigate anything fishy and ask for supporting evidence. Ask about anything you don’t understand. Don’t just write off an unexplained loss as a one-time thing. Like fire, fraud only gets worse if it’s allowed to spread. Diane C.O. Gilson, CPA, CIA, is a Certified QuickBooks ProAdvisor and MasterBuilder ProAdvisor, author, trainer and construction accounting coach, as well as a frequent speaker at The International Builders’ Show and The Remodelers’ Show. Her firm, Info Plus Accounting PC/CPA, offers bookkeeping and support services to help construction companies do more accurate and timely job costing and run better management reports. Contact Gilson via e-mail, or call her at 734-544-7620. Earlier Articles in this Series
'Accounting with QuickBooks Pro®' Available at BuilderBooks.com "Accounting with QuickBooks Pro® for Home Builders and Remodelers," including a CD-ROM with a trial version of QuickBooks Pro®, is available through BuilderBooks.com. From writing payroll checks to generating up-to-date income statements, this book will help you get the maximum benefit from your accounting system. To view or purchase it online, click here or call 800-223-2665 to order. Other Business Management Publications Available at BuilderBooks.com BuilderBooks.com also offers a variety of other publications about business management. To view or purchase these publications online, click here. Run Your Business Better and More Profitably Click www.nahb.org/biztools to access hundreds of timesaving, moneymaking and cost-cutting resources. You’ll find guidance in a concise, easy-to-read format on topics like financial management, production, sales and marketing, customer service and human resources … to name just a few. Plus, get answers to your tough questions about how to use software to improve your bottom line in the Talk About Business & IT section. The NAHB 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. There’s Nothing Sub About Your SubsIf I could accomplish one thing in this business, it would be to eliminate the word “sub” (except when I'm in a sandwich shop). Have you thought about what it means, what it says about you and the people you work with, the relationships you form and the people you depend on for your success? First of all, in its most intrinsic form, “sub” is simply a base word. When you think of sub, what do you think of? Subhuman, subtropical climate, subterranean, etc., and what does "sub" connote? It connotes “under” or “less than.” I don’t really think that’s the way we want to speak of, to and about the very people that, for many of us, represent the best of what we do. Without your — now, pay attention to the words — trade contractors (or better yet, trade partners) you’d get very little done and all too often be left holding the bag and stuttering excuses. So, let’s remember to show our trade contractors appreciation and respect and treat them for what they are — eminently important team members and keys to our own success as contractors. Stop me if you don’t believe it’s true, but can you remember the last time you produced a successful project with trade partners? When was the last time you admitted that to them? Gone are the days when we seek enjoyment from seeing how many “subs” in any and every category we can get to grovel for our business. With manpower in such high demand, it may be us doing the groveling. If you really respect and appreciate your trade contractors (I'm officially banning the s-word from now on), you'll pay them in a timely manner; discuss payment terms before the work begins; discuss problems before they become a payment issue, etc. You'll ask for their input when formatting a schedule and not force the schedule on them. You'll thank them for their help in making you successful, not wait for them to bring you a gift for your business. And you'll break the habit of throwing dirt on them when confronted with a problem by your customer. What we need is the realization that we’re all equally vested and interested in the same successful outcome. What we need is mutual consideration and respect. Greg Miedema, CGR, CAPS, is president of Dakota Builders in Tucson, AZ. He is chair and founder of his local Remodelors™ Council, a member of the NAHB Remodelors™ Council Board of Trustees and currently serves as the chairman of the Remodelors™ Council Public Affairs Committee. The Southern Arizona Home Builders Association (SAHBA) has named Dakota Builders, Inc. Remodelor™ of the Year in 1998, 1999 and 2000. For more information, send him an e-mail.
Nominate the Best of the Best for Remodelor™ of the Year Applications for the Remodelors™ Council’s most prestigious awards program, the Remodelor™ of the Year Award, are now available online at www.nahb.org/remodelors under the Awards section. The Remodelor™ of the Year Award recognizes exemplary NAHB involvement at any level, superior business management and an outstanding contribution to the remodeling industry. Councils should nominate individual remodelers, but the nominee must write his or her own entry essay. The winner will be announced at the Remodelors™ Council Gala during the 2004 Remodeling Show in Chicago (Oct. 8). Local Councils Honored With CADRE Awards The Council Awards for Demonstrating Remodeling Excellence (CADRE) is awarded to local Remodelors™ Councils for superior member service in the categories of:
For information, e-mail the Remodelors™ Council or call 800-368-5242 x8216. Who Will Be Inducted to National Remodeling Hall of Fame? The Remodelors™ Council is searching for the best of the best for induction into the America’s Best National Remodeling Hall of Fame. This award honors those individuals who have made a significant and lasting impact on the remodeling industry on a state or national basis. Induction into America’s Best National Remodeling Hall of Fame is open to individuals in any public or private sector entity or institution. Areas of contribution may include industry image, governmental affairs, education, business management or any other contribution that has helped advance the remodeling profession. Please nominate individuals who have made a positive impact on the remodeling industry. Self nominations are not permitted. Completed applications must be received by Monday, July 12. The induction ceremony will take place at the Remodelors™ Council Gala during the 2004 Remodeling Show in Chicago (Oct. 8). Click here to download an application or contact Barbara Drobins at 800-368-5242 x8217 for more information. Go to BuilderBooks.com for 'Ten Steps to Increase Jobsite Productivity'
Productivity equals profitability. Managing and working with subcontractors is one of the 10 important steps covered in “Ten Steps to Increase Jobsite Productivity,” available at BuilderBooks.com. Make everyone on your job site more productive. To view or purchase this publication 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. Best in American Living Awards Entry Deadlines NearEntry applications and fees for the 2004 Best in American Living Awards (BALA), the most prestigious new home design competition in the home building industry, are due in July.
Co-sponsored by Professional Builder magazine and NAHB, BALA is open to builders, architects, designers, developers, land planners and interior designers. 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. Winners will be announced at the International Builders' Show in Orlando. Winning entries will also be displayed on the Professional Builder Web site, HousingZone.com, for up to one year. For information, eligibility requirements and application forms, click here, or contact Professional Builders' Judy Brociek (630-288-8184) or Colleen Paez (630-288-8168) or Michelle Persinger of NAHB at 800-368-5242 x 8343. Rentals for Active Adults: An ACE Opportunity for BuildersA private market study recently conducted in the Washington, D.C.-Baltimore area indicated that there is a significant untapped opportunity for builders of luxury apartments in the active adult rental market. The needs of active adults are different from their 62+ cohorts, whose medical and income-related issues are being addressed by health suites and smaller rental units. In contrast, the luxury-seeking 55+ crowd is “getting better, not older” and wants to live in communities that offer what we call ACE: Activity, Convenience and Entertainment. Activity: Generally speaking, boomers are health-conscious and make exercise a priority. They yearn for jogging paths, well-equipped exercise rooms, lap pools and putting greens. Proximity to public recreation facilities, such as golf courses, tennis courts and swimming pools, also is very desirable. Convenience: Because boomers view their time as a precious commodity, communities geared for this market should offer features that save as well as enhance the quality of their residents’ time. Valued conveniences include valet parking with covered drop-off areas, secure underground parking that allows easy access to apartments and an on-site concierge service that can handle everything from dry cleaning to restaurant reservations. Other amenities to consider include maid services, high-speed Internet connectivity and gourmet meal delivery. Proximity to shopping, restaurants, services and public transportation also is a big plus. Entertainment: Bingo once a week probably won’t cut it with this crowd. The active adult projects we’re designing provide spas, large-screen theaters, card and billiard rooms, greenhouses and cafés. Consider building on sites close to movie theaters, live entertainment venues, bars and restaurants since it will be nearly impossible to satisfy your residents’ hearty appetite for entertainment on-site. Two factors that can substantially impact your ACE quotient are floor plans and location. Floor plans: Scrap the notion that all seniors are looking to downsize. Boomers have money and are willing to spend it on space. Whereas the typical 62+ unit averages around 600 square feet, the luxury units we’ve been designing for active adults range from 750-1,400 square feet. Other developments we’re aware of have units as large as 2,400 square feet. Boomer rental units should include a deluxe master bedroom and bathroom as well as a second bedroom and bathroom. While active seniors may not need a huge kitchen for those precooked gourmet meals, this market is keen on entertaining at home. Spacious living rooms are a must, and if they are combined with dining areas and adjacent to open kitchens, that’s all the better. Location: Active adults — and I would argue, even some less mobile ones — don’t want to be isolated. They seek homes that are convenient to upscale retail, public transportation, fine dining, coffee shops, biking paths, hiking trails, art galleries, concerts and other cultural activities. Think beyond suburbia; vibrant urban areas offer some terrific prospective sites. The fact that more communities for seniors are springing up near colleges and retail areas is no accident. One of our projects is located in a commercial district within an easy walk of great shopping, restaurants and movies. Although the community is being framed up at this time, more than 300 prospects have expressed interest in the community. Another project is located adjacent to the University of Maryland, which has an abundance of recreation, entertainment and educational offerings. The aging boomer population presents an enormous opportunity to develop rental properties for affluent consumers. Best positioned for success will be those developments that address residents’ desire for activity, convenience and entertainment. Consider this your official challenge to tap into the active adult rental market and find ways to creatively and profitably boost the ACE factor in new luxury rental communities. Ed Hord is a Fellow in the American Institute of Architects and a principle in Hord Coplan Macht, a Baltimore-based architectural and landscape firm that has designed more than 9,000 multifamily housing units since1977. Hord is a member of the NAHB Seniors Housing Council and has designed communities for the full range of seniors needs — active adult, independent living, assisted living and nursing care. For more information, e-mail Hord or call him at 410-837-7311.
Mark Your Calendar for NAHB's Seniors Housing Symposium 2005 "Building for Boomers & Beyond": NAHB Seniors Housing Symposium 2005 is scheduled for May 16-18, 2005, in Chantilly, VA. Mark your calendars. 'Analyzing Seniors' Housing Markets' Available at BuilderBooks.com "Analyzing Seniors' Housing Markets," available at BuilderBooks.com, examines the complexities of seniors' housing markets and explains what developers, investors and other professionals need to know to understand and operate in these specialized niches. The publication familiarizes readers with the various product types and how they relate to the needs of seniors. It also explains market analysis, consumer research, market segmentation, financial analysis, market maturation versus market saturation and gauging performance of seniors' housing. Three case studies of regional markets comparing the development trends of both independent and assisted living within each market are also included. To view or purchase this publication online, click here, or call 800-223-2665 to order. BuilderBooks.com has 'Approving Seniors Housing — Facts That Matter' To view or purchase this publication online, click here. Luxury Apartments Rekindle Hollywood’s Golden EraBelying the traditional image of Hollywood as a place where bigger means better, the developers of 7 Fountains, a West Hollywood luxury apartment complex, realized that even though the site was zoned for 38 units, smaller would be better for everyone, and a less-is-more approach would return more to the bottom line. The judges of NAHB’s Pillars of the Industry awards found the 20-unit development to be not just better, but best — they awarded it the top prize in the Luxury Rental category. The property was developed by the Lefevre Corporation, and it had significance to the developer because his grandfather had once lived in an apartment building at that site. The apartments that Lefevre decided to build would have fit right into that earlier era, when grandfather was a young man, Hollywood was Hollywood, and up-and-coming stars lived in apartments with courtyards, balconies and a view of the hills. The plan created “wildly varied units” with an average size of 1,500 square feet, each with a different floor plan. The structure itself is asymmetrical, with level changes, balconies, exterior stairs, towers and shade from overhangs and awnings. Access to each unit is through a courtyard and there are no interior shared corridors. The style is Mediterranean, with a nod to Southern California’s Spanish missions, with thick white stucco exterior walls, red barrel tile roofing, cast iron railings, paver tile flooring in the courtyard and fountains. With its village feel, the upscale community fits right into its historic neighborhood, looking as if it had been there all through Hollywood’s golden age. It was leased up in four months, even though the rents are well above the area median. And, the developer says, it recently was appraised at “the highest dollars per unit of any apartment building in Los Angeles County." NAHB Multifamily Is Looking for Speakers for Pillars ConferenceNAHB Multifamily is currently looking for presenters for next spring’s Pillars of the Industry Conference at the Doral Resort in Miami on April 3-6. Presentations on a range of issues of interest to professionals in the nation’s multifamily home building industry will be a highlight of the conference. The conference is looking for expert presentations on innovations in development, marketing, finance, management and technology. Applications are currently being accepted from those who would like to address the conference or who would like to suggest a speaker. To download a submission form, click here. Proposals will be accepted through June 30. For more information, e-mail Courtenay Brown, director of professional development, or call her at 800-368-5242 x8168. Air Force and Navy Housing Opportunities AnnouncedTwo upcoming Military Housing Privatization projects present opportunities for NAHB members to develop and maintain on-base housing for military families or to provide products and services to the successful development teams. The U.S. Air Force announced its intention to privatize almost 1,600 housing units at Scott Air Force Base, which is east of St. Louis. The bidder who is chosen for this project will own, renovate, operate and maintain the homes and surrounding community facilities for a 50-year period. These two projects are part of a series of housing privatization efforts being undertaken by the Armed Forces. A forum to discuss details of the project is tentatively scheduled for July 13-14 at the Four Points by Sheraton in Fairview Heights, IL. Interested parties must subscribe to the mailing list to receive future notices regarding this project. To view the solicitation and register for more information about the forum, click here. The U.S. Navy has announced it intends to form a public-private venture to privatize family housing on four military installations. This project will include 3,426 homes at Marine Corps Base Camp Lejeune and Marine Corps Air Stations New River and Cherry Point, all in North Carolina, and at Stewart Army Subpost, a relatively small installation near West Point, NY. Like the Air Force program, the Navy project will involve a 50-year management commitment. In the Navy project, however, the development team will form a joint venture with the Navy for the project’s duration. A Statement of Qualifications must be filed electronically with the Navy by July 6, and interested parties must register for the solicitation. Updates and future correspondence on this solicitation will only be made via e-mail. To view the Navy solicitation and register for updates, click here. For more information about military housing privatization, e-mail William Renner, NAHB’s director of single-family finance, or call him at 800-368-5242 x8597. New Training Program Enables Association Members to Improve Skills of Their SuperintendentsThe Home Builders Association of Metro Orlando has joined the ranks of a growing number of associations across the nation that are providing the opportunity for employees of their members to earn the Residential Construction Superintendent (RCS) designation. Twenty-one superintendents now hold the title through classes held by the Orlando association. The designation program was developed by the Home Builders Institute — the workforce development arm of NAHB. Designed for current site personnel as well as aspiring superintendents, “The RCS courses enable the employees of our members or other industry professionals to become more valuable to their employers,” says Beth McGee, executive director of the Orlando HBA. The HBA’s president, Stephen Gidus, CGR, sent three of his company’s employees through the training. “This program increases the profitability of our company by teaching our employees how they can be more effective on the job site,” says Gidus. “This designation also lets our customers know that we are dedicated to providing our employees with the resources they need to build a quality product.” “These courses are truly effective,” notes Paul E. Mashburn, an RCS instructor. “You can tell from class interaction that students are truly engaged in this material and they understand how important it is to their job performance.” The eight courses in the RCS designation curriculum cover topics identified by NAHB members as critical to a field supervisory job: general project management; planning and scheduling; budget management and cost control; customer service and home owner relations; safety and security; codes and quality control; hiring, training and supervision; and office and subcontractor relations. Last December, the National Housing Endowment awarded the Home Builders Institute $20,000 to develop the next tract of advanced-level superintendent training. Work on these courses is underway, with an anticipated rollout in early 2005. For more information on the RCS Designation courses, e-mail Steve Kramer or call him at 800-795-7955 x8925. HVAC Contractors Using Fiber Glass Duct Board After Rise in Price of Scrap MetalA sharp rise earlier this spring in the cost of steel led many HVAC contractors to choose fiber glass duct board over sheet metal for construction projects, according to Renee Chesler, director of Mechanical Insulation Business for CertainTeed Insulation Group. Headquartered in Valley Forge, PA, CertainTeed Corporation is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. The cost of scrap steel increased some 30% by April, said Chesler, as overseas business entities bought up supplies of the material and the cost of natural gas used to process it was on the rise. Fiber glass duct board has three main advantages over unlined sheet metal ducts, Chesler said: its ability to help reduce sound transmission in the air handling system; its thermally efficient delivery of heated or cooled air; and a reduction in condensation from temperature differences between conditioned air within the system and the air outside. From the contractor’s point of view, fiber glass duct board can be easily custom-fabricated at the job site, which eliminates the need to both store prefabricated ductwork at the shop and ship it in its completed form to the site, he said. Also, CertainTeed offers basic training to contractors on how to cut, groove and fabricate duct board. The light weight of duct board also enables installers to handle, lift and install sections with less difficulty than heavier sheet metal duct, he said. There are no sharp edges to be concerned about and minor adjustments are easily made on site. To learn more about this issue and the solutions available to HVAC contractors, call CertainTeed Sales Support at 800-223-8990 or contact your local CertainTeed representative. 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.Builders Mark National Homeownership Month With Efforts to Meet Workforce Housing NeedsJune is National Homeownership Month and NAHB is marking the occasion by stepping up its efforts to educate the public about the challenge of providing affordably priced housing for America's working families. “The economic, financial and personal benefits of owning a home should be available to everyone,” said NAHB President Bobby Rayburn. “Working families are the backbone of our country, and during National Homeownership Month, the members of NAHB are renewing the commitment to meeting their housing needs.” Although the nation’s homeownership rate now stands at a record 68%, 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 below the $50,000 needed to qualify for a median-priced $156,000 home. In cities and the surrounding suburbs, these workers only have about a 30% chance of owning a home in the community they serve. Working to address this problem, NAHB recently joined with Fannie Mae and other organizations to launch a major workforce housing initiative that would help revitalize 1,000 communities across America by expanding the stock of affordable housing for working families. NAHB also launched the new Innovation in Workforce Housing Awards to recognize outstanding examples of workforce housing and showcase creative techniques to provide decent and affordable homes for workers in the areas in which they are employed. For more information on the unique contribution of homeownership to individual families and the nation, click here. Sign Up for 2005 Committees and Councils by July 9NAHB is looking for members who would like to serve on any of the association’s various committees and councils for the 2005 term. Members will be able to provide leadership, expertise and experience on the issues and challenges facing the industry. The term begins immediately following the 2005 International Builders’ Show (IBS) in Orlando and continues through the completion of the 2006 IBS. The deadline for applying for an appointment is July 9. Members are limited to serving on no more than two standing committees or councils. Members can apply online by filling out the 2005 appointment sign-up form, indicating their interests. The form can be accessed on the NAHB Web site by clicking www.nahb.org/2005appointmentform, then return the completed form by e-mail, fax or mail to NAHB as indicated. Forms also can be found within the individual sections for the various committees and councils on the “members only" side of the NAHB Web site. Final appointments will be made following the fall NAHB board of directors meeting and members will be notified by mail. For more information, e-mail Cynthia McKinley or call her at 800-368-5242 x8346. Builder Ralph Manley, 80, Re-enacts D-Day Jump Over NormandyOn Sunday, June 6, Ralph Manley, a former World War II paratrooper and now retired hometown builder from Springfield, MO, jumped out of a vintage C-47 transport plane over the skies of Normandy — much like he did 60 years ago at the start of D-Day. Manley wore his old 101st Airborne Division uniform, which still fit, but there were several major differences between last weekend’s jump and his jump in 1944. One difference, of course, was age. Manley is 80, a very fit 80, but 80 nonetheless. He was 20 when he made his D-Day jump. Another was that Sunday’s jump was a reenactment, part of the 60th anniversary celebration of the historic D-Day invasion of World War II. Manley parachuted as the “senior” member — about 45 years senior to the oldest of the other members — of the Continental Airborne reenactment team based in Oklahoma. He also jumped in broad daylight. And nobody was shooting at him. Sixty years ago, Manley parachuted under fire into occupied France in the middle of the night — 12:23 a.m. His plane had been hit and was burning and he was able to parachute out at 300 feet, just before the transport crashed, killing 13 of his comrades. Manley leaped out of the plane loaded down with more than 230 pounds of gear and munitions — gear that weighed more than he did — 50 pounds of explosives, several anti-tank mines, grenades, a flamethrower, K rations, chocolate bars, a medical kit and more. “We had to take all the things we might need with us,” Manley says. Manley was a demolitions expert, and he and his fellow soldiers parachuted behind enemy lines to delay any German reinforcements that might try to reach the Normandy beachhead once the invasion began. They mined key roadway intersections, disrupted enemy communications, disabled German pillboxes and prepared bridges for demolition. Manley was given a Purple Heart and awarded a Bronze Star for his service and valor that day. During the course of the war, he was wounded six times, fought and got frostbite in the Battle of the Buldge, and was awarded four additional Purple Hearts and another Bronze Star before returning to the States in November 1945 aboard a hospital ship. A Budding Building Career After the war, Manley didn’t venture too far from home. He attended Drury College in Springfield on the G.I. Bill, married his wife, Jayne, and became a builder — slowly, the way it was done in the late '40s and early '50s. “I wanted to build my own home, and after it was finished, someone wanted to buy it,” Manley said. So he sold it for $1,500 and built another. The money was good, so he kept building homes. He built two-bedroom homes back then, no garages and maybe two or three outlets in a room. “I kept building homes, and if someone wanted to buy the home I lived in, I would sell it and build another. That’s what we did then,” he said. From this one-man shop, the business grew, his homes got more luxurious and he became a fairly substantial builder/developer in the Springfield area. By the time he retired five years ago, Ralph K. Manley & Company had developed 18 subdivisions and built 2,000 homes, mostly single-family, but also duplexes and apartments. “In my biggest year, we built 100 homes,” he said. Along the way, two of his three daughters followed him into the business. They both now have their own building companies. Manley was a charter member of the Home Builders Association of Greater Springfield, the local association he helped found in 1954. In the ensuring years, he was the association’s president three different times and remains an active member today. “Ralph never misses our monthly membership meetings,” said Matt Morrow, the association’s executive officer. “He always introduces our guests because he does it so well. Ralph’s a completely unique individual.” Though Manley is retired from the industry, he is in no way “retired.” He has been a member of Springfield's city council for five years and currently serves as the mayor pro tem. In fact, he’s been active in city politics for quite some time. “I’ve been on the zoning and planning commission and I’ve helped with the building codes,” Manley said. “You want to be able to contribute.” Calendar Guy Manley didn’t bat an eye when Charlyce Ruth, the association’s office manager, asked him to participate in a project to raise money for community charities in 2003. Her idea was to create a “Home Builders Hunks” calendar with each month dedicated to a different charity and featuring a builder pictured in a pose that reflects his off-the-job interests. Manley was Mr. February and posed jumping out of a small airplane for the American Diabetes Association. Ten of the 12 builders posed shirtless. Manley wasn’t one of them. That might have been because that year, he also had the multipurpose room in the elementary school he attended as a youngster named after him. Going shirtless probably wasn’t appropriate for the councilman. “Ralph is a great example to the rest of us,” said Morrow. “He was a war hero who came back to build a very successful business, literally from the ground up. And on top of that, he gives so much back to the community. He’s the personification of the American dream.” Said Manley, “If I were a young man today just out of college, I’d do the same thing all over again.” To read the recent story about Ralph Manley, "A heavy place in a light heart," that appeared in the Sunday edition of the Springfield News-Leader, click here. Online Registration for 2005 Builders’ Show Now OpenOnline registration and early reservations for hotel rooms for The 2005 International Builders’ Show (IBS) are now open. IBS will be held Jan. 13-16 in Orlando. Take advantage of NAHB’s Early Bird Registration fees by clicking www.buildersshow.com. 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. |