Nation's Building News Online: June 14, 2004

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Harvard Report Predicts Higher Housing Production Ahead as More Households Are Formed

Longer and more broadly based than previous expansions, today’s housing boom may have passed its peak, but the industry is unlikely to see any sharp decline in house prices, sales or new construction as mortgage rates start inching up, according to the “2004 State of the Nation’s Housing Report” released last week by Harvard University’s Joint Center for Housing Studies.

In fact, the report finds that the housing industry is well positioned for another strong decade.

“As strong as housing construction has been in the recent past, demographic factors will propel housing production even higher over the next 10 years,” said Eric Belsky, executive director of the Joint Center. “Given higher household formations, demand for second homes and replacement of units lost from the stock, production should reach at least 18.5 million and could top 19.5 million if immigration remains at current levels.”

The report finds that women and minorities will be playing a larger role in housing in the decade ahead.

“Largely as a result of immigration, minorities accounted for 27% of households in 2003 and will contribute at least two-thirds of net household growth in the coming decades,” according to Nicolas Retsinas, director of the center.

Minorities are projected to account for 34% of all U.S. households by 2020, the Harvard study finds, and will help to offset losses of white household heads aged 35 to 54 as those born during the baby boom move into the 55-74 age group. Minority household growth will contribute significantly to growth in household heads aged 55 to 74 as well.

The report adds that the minority share of renter households surged from 31% to 39% over the 1990s, preventing the number of renter households from falling.

And minorities accounted for fully two out of every five net new home owners from 1994-2003, the report says. “Despite these strong gains, though, minority homeownership rates still lag those of whites by nearly 25 percentage points. Narrowing this persistent gap remains a challenge for both the government and the mortgage finance industry.”

Women have also become “a more powerful presence in the housing markets,” according to Harvard researchers. The number of households headed by unmarried women increased by almost 10 million between 1980 and 2000, and at the same time the median contribution of wives’ earnings to dual-earner households rose from 30% to 37%.

“As a result, unmarried women now head a larger share of households and married women make larger contributions to household income than ever before,” the report says.

However, “while women and minorities make up increasing shares of middle-income households, they are still over-represented in the lowest-income category. The incidence of housing problems is therefore higher among minorities than whites and among unmarried women than unmarried men of comparable age.”

The Harvard report is bullish on prospects for housing as the economy enters a period of more robust growth because “housing construction appears to be in line with long-run demand, and a strengthening economy should support house prices. In addition, changes in the housing finance system have made markets more resilient and better able to adjust quickly to interest-rate movements.”

As interest rates rise gradually, “construction should hold near its current pace and house price inflation moderate rather than turn negative,” the Joint Center predicts. “If job growth falters or interest rates spike, however, housing could be in for a rougher ride.”

Building News Coast To Coast

Designer Digs From a Factory

"Prefab Modern" author Jill Herber says homes built in factories and assembled onsite account for one of every six new dwellings. These dwellings generally are cheaper than conventional houses due to speedy assembly, lower labor costs and factory discounts; but owners could end up shelling out more than they anticipated on the land purchase, installation and customized features. While stick-built housing take months to erect, prefabricated houses are completed in a matter of weeks — a fact that pleases neighbors who do not want to deal with the traffic and noise associated with construction projects. Still, the word prefab continues to conjure up images of low-income trailers, unattractive tract homes and poor construction quality. In an attempt to gain support from local authorities and nearby residents, Live Modern CEO Marshall May urges buyers to "approach housing associations by saying it's a traditionally built home with all of its materials and methods, it just happens to be built in a factory." In fact, more than 50% of conventional dwellings include factory-built panels or modules.
CBSMarketWatch.com (06/09/04) Cohen, Jackie: www.cbs.marketwatch.com

Condominiums and Apartments Are Heating Up for Builders

Research by NAHB reveals that building activity in the condominium and apartment sectors —particularly at the high end — remains robust due to low interest rates, the strengthening job market, steady appreciation and the need for cheaper alternatives to single-family dwellings. According to NAHB Chief Economist David Seiders, "Since job creation often leads to new household formations — and new households often tend to be renters or first-time condo buyers — it looks like there are better days ahead for the multifamily segment of the housing market." The apartment market should hold up at least during the next six months, most industry insiders concur. However, many markets continue to experience supply-and-demand imbalances.
Copley News Service (06/07/04) Woodard, James M.: www.copleynews.com

Builders Divided on Tariff Reduction

An international trade panel has ordered the Commerce Department to recalculate U.S. tariffs on imported Canadian lumber. Commerce officials are suggesting lowering the duties from 27% to 13% by the end of the year in an attempt to reduce prices and stop steep hikes in material costs. Some builders believe that eliminating the tariffs will boost supply and encourage competitive pricing, while others simply accept that lumber prices fluctuate because they are based on supply and demand. Random Lengths reports that framing lumber soared from about $279 per 1,000 board feet to $455 during the year-over-year period ended in May. NAHB expects single-family home prices to jump $5,000-$7,000 due to higher wood and metal prices. The trade group believes the government must scrap tariffs altogether to avoid pricing buyers out of the new-home market.
Bradenton Herald (06/08/04) P. 1; Joseph, R.P.: www.bradenton.com

Senior-Friendly Builders Now Earn Designation

The latest remodeling trend involves modifying homes so that seniors can stay put as they age. In response, NAHB now offers the "Certified Aging-in-Place Specialist" (CAPS) designation to remodelers, general contractors, designers, architects and health-care consultants to equip them with the knowledge they need to help seniors make these changes. They must complete a three-day program that enables them to effectively communicate with seniors and informs them of codes, standards, challenges and solutions they will encounter. Once they have earned the designation, they can suggest shower grab bars, ramps and other modifications that will keep older home owners both safe and independent in their existing residence.
Fort Lauderdale Sun-Sentinel (06/07/04) P. 14; Friedman, Robyn A.: www.sun-sentinel.com

Phones Ring Off Hook at Remodeling Firms

Residential remodeling firms continue to report high demand for their services from home owners nationwide, but a Harvard University study notes that the record-setting growth rate of the remodeling industry in recent years is showing signs of braking as mortgage rates start to rise above 6%. According to Kermit Baker, director of the Remodeling Futures Program at Harvard's Joint Center for Housing Studies, "home owners remodeled less at the end of 2003 than they had in recent years" and "that trend seems to be continuing" this year. Spending on remodeling increased by a rate of 10.4% during the last quarter of 2002 but has decelerated to a rate of 2.5% in the first three months of 2004. Still, NAHB says the outlook for this year looks good, based on phone interviews it has conducted with about 550 contractors nationwide. Contractors say they are having trouble matching high demand from home owners looking to make improvements and repairs to older properties and those damaged by bad weather.
Baltimore Sun (06/06/04) P. L1; Henslee, Anne Lauren: www.baltimoresun.com

Home Under Construction May Be Vulnerable to Thefts

Thieves have gone beyond lifting tools and materials from construction sites to stealing appliances, electronics, light fixtures and even entire plumbing systems. Production home builders generally carry insurance that protects the structure until it changes hands, but custom buyers need to ensure that their builder has liability and theft coverage as well as obtain a policy on their own to cover any extras and anything that has been moved in already. To deter thieves, builders should erect a temporary fence; lock all windows and doors; install motion-activated lights; and put in a permanent security system as soon as the windows and doors are in place. Home owners would also be wise to change the locks soon after closing. Fire prevention is also important; and builders should clean the site daily, properly store combustible materials and install a telephone as soon as possible to make it easy for firefighters to locate the site. Home owners might even want to include a contract clause that keeps builders from smoking on the job.
Chicago Tribune (06/05/04) P. 2; Mann, Leslie: www.chicagotribune.com

Boomers Sure to Keep Housing Booming

A number of home builders are focusing on so-called "active adult" communities as the baby boomer population ages. Experts believe the high incomes and desire for activity among members of this population segment will help fuel the housing market, along with low interest rates and demand from immigrants. Though research reveals that more and more boomers are retiring near their families and friends; builders continue to cater to those who prefer the warm climates of Florida, Arizona, Nevada and other traditional retirement havens while also building in destinations such as Philadelphia and throughout New Jersey and Maryland. Builders expect much of the demand from baby boomers to be for second homes, sales of which have soared from 300,000 annually in the 1990s to 400,000 per year today. A survey by the National Association of Realtors® found that more than three-quarters of second-home buyers will use their dwellings as vacation retreats, while 18% plan to retire there. Many are taking advantage of the Tax Relief Act of 1997 to downsize and use the sale profits, a portion of which are exempt from capital-gains taxes, to purchase a secondary home. However, Standard & Poor's Rating Services Chief Economist David Wyss believes that as baby boomers opt for two smaller houses over a single sprawling one, the number of suburban buyers left to purchase the homes they vacate could fall.
Minneapolis Star Tribune (06/05/04) Crane, Agnes T.: www.startribune.com

Building Your Dream Home

Low interest rates have prompted many new-home buyers to spend thousands on upgrades. According to a recent poll by NAHB, granite countertops, stainless-steel appliances, Jacuzzis, ceramic tile, glass-enclosed showers, kitchen islands, lofty ceilings and linen closets are the most popular add-ons. Rather than splurge on wine cellars and other personalized features, experts urge buyers to focus on finished basements, additional bedrooms and bathrooms, media rooms and home offices and other projects that add more square footage. Though buyers often forego top-quality roofing, windows and siding in exchange for better countertops, experts insist that structural integrity should be a priority. Moreover, buyers should zero in on projects that boost resale value — such as decks, attic bedrooms, modern kitchens and bathrooms, master suites and replacement siding and windows. Experts caution against spending more than 10%-15% of the home value on upgrades, however, considering that a future job loss could push mortgage payments out of reach. Buyers also should avoid overbuilding — going above and beyond the features in neighboring homes — which lessens their return on investment.
Smart Money (05/04) Vol. 13, No. 5, P. 59; Taylor, Chris: www.smartmoney.com

Text Messaging Could Explode as Voice Systems Grow

Though Verizon Wireless customers send over 23 million text messages through their cell phones every day, that figure still lags considerably behind the 2 billion text messages sent monthly in Europe and East Asia. Many users find text messaging to be a time-consuming task, considering that a single word could involve hitting a dozen or so keys on the standard 12-character keyboard. However, the technology could gain popularity now that Voice Signal Technologies Inc. plans to roll out speech-recognition software that would allow users to express as many as 160 characters verbally and transmit the message by simply speaking the word "send." The technology could even eliminate phone keypads and screens altogether, ultimately slashing cell phone prices and allowing the devices to be built into jewelry, pens and other such items. The first of these speech-recognition-equipped cell phones will be unveiled by Samsung, Motorola, Panasonic and other manufacturers in late 2004. Though the technology will simplify text messaging, International Data Corp. analyst David Linsalata says some users may not approve because they prefer to quietly send text messages during meetings or while on public transit.
Boston Globe (06/07/04) Howe, Peter J.: www.boston.com/globe

Power to Go

Good Technology's GoodLink 3.0 mobile business messaging and e-mail software targets Palm OS and PocketPC smartphone users who wish their devices had the power of laptop computers. The software, compatible with Microsoft Exchange Server, comes with an annual price tag of $330 per user. Among other features, GoodLink 3.0 supports Adobe Acrobat, PowerPoint and Word files; comes with Web-based monitoring tools; and allows users to easily move among applications.
Entrepreneur (06/04) P. 48; Kooser, Amanda C.: www.entrepreneur.com

Federal Judge Yanks 'No Surprises' Certainty From Habitat Conservation Plans

Judge Emmet Sullivan, U.S. District Court for the District of Columbia, last week dealt a blow to efforts by the home building industry to conserve endangered or threatened species under the Habitat Conservation Plan (HCP) program.

On June 10, Judge Sullivan ordered the U.S. Fish and Wildlife Service (FWS) to stop issuing Section 10 Incidental Take Permits (ITPs) with No Surprises assurances — the primary incentive for builders and developers under the HCP program — until the agency completes its work on the Permit Revocation Rule (PRR).

The PRR specifies that the Service would only be able to revoke the take permits if it finds that the permitted development activies would reduce the likelikhood of survival and recovery of a species in the wild.

"Builders and developers should be cautious when applying for Section 10 ITPs or finalizing an HCP over the next six months," said NAHB President Bobby Rayburn. "Without 'No Surprises' assurances, ITPs and HCPs are more susceptible to litigation by reactionary groups opposed to the rule."

Judge Sullivan moderated the effect of his order by setting a deadline of Dec. 11 for the FWS to finalize the PRR. The judge could possibly lift the order sooner if the agency completes its work on the rule prior to the deadline.

FWS reproposed the PRR on May 25, opening public comment on the rule, its relationship to the "No Surprises" rule and the revocation standard that should apply to Incidental Take Permits. NAHB plans to submit comments on the proposed rule.

Fortunately, the agency is not seeking comments on the “No Surprises” rule itself, reducing the chance that it could be weakened or overturned in this latest rulemaking process. A vital component of Habitat Conservation Plans, “No Surprises” provides builders and developers with certainty that the government will not renege on the plan that has been agreed upon.

“The No Surprises and Permit Revocation Rules are explicitly linked and integral to the business of builders who develop Habitat Conservation Plans,” said NAHB President Bobby Rayburn. “The HCP program must be preserved, and incentives for builders and developers to support and participate in species conservation efforts must continue if we are to make real progress.”

Last December, Federal Judge Emmet Sullivan vacated and remanded the Permit Revocation Rule back to the agency for reconsideration.

“We must ensure that the new Permit Revocation Rule limits the circumstances under which the FWS can reopen already-issued permits in order to preserve the flexibility and certainty builders need to plan and develop long-term housing projects,” said Rayburn. “And through this certainty, builders can continue to keep costs down and housing affordable for all consumers.”

For additional information, e-mail Duane Desiderio or call him at 800-368-5242 x8146, or contact Christopher Galik,  x8663.

Housing Snapshot

Mortgage interest rates continued to rise slowly last week, as housing analysts awaited a decision by the Federal Reserve Board at the end of this month that is virtually certain to increase the federal funds rate by one-quarter or one-half of a percentage point. Freddie Mac Chief Economist Frank Nothaft said that the Fed's move to higher interest rates could be good news for long-term, fixed-rate mortgages to the extent that the return to sterner monetary policy reduces expectations for inflation. The Commerce Department announced a $48.3 billion U.S. trade deficit in April, which was disconcerting news, but an encouraging 1.2% pickup in retail sales in May. Lumber prices remained high, but seemed to have lost some of their upward momentum last week. The price of framing lumber declined by $10, reaching $426 per 1,000 board feet, according to Random Lengths. That price was a considerably lower $298 one year earlier. The price of 15/32-inch 3-ply CDX southern west-east plywood declined $12 to $398 per 1,000 square-feet, and oriented strand board remained unchanged at $400.

Mortgage Interest Rates

30 Year Fixed Rate: 6.30\%
15 Year Fixed Rate: 5.67\%
1 Year ARM: 4.14\%

Housing Starts: Apr. 2004

Total: 1.969 million\%
Single Family: 1.610 million\%
Multi Family: 359,000\%

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 Problem

Costs for insurance are skyrocketing, and in some markets, builders can’t get coverage at any cost.

This is one of the biggest challenges facing home builders and contractors today, and it is a top issue for our federation.

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.

Existing-Home Sales Headed for Yet Another Record, Economist Predicts

With the nation’s economy starting to reach full blossom and mortgage interest rates remaining historically low despite an upturn, David Lereah, chief economist for the National Association of Realtors® (NAR), is betting that existing-home sales will set a new record this year.

“NAR projects existing-home sales to hit a record 6.17 million in 2004,” Lereah said, “which would be 1.2% higher than last year’s 6.10 million record."

He also offered a prediction for the new home market, which he expects to register 1.08 million sales, just shy of last year’s record 1.09 million. NAHB’s assessment is that this year’s new-home sales performance will be running neck and neck with last year’s.

Lereah said that this year’s vigorous job growth is likely to blunt the impact of climbing interest rates.

The cost of financing with a 30-year, fixed-rate mortgage is expected to reach 6.9% by this year’s fourth quarter, Lereah said, but “at the same time, unemployment should drop to 5.3%, so we continue to have a very favorable backdrop for housing.”

Job growth could reach 3 million this year, Lereah said.

“The economy is moving quickly now and the Fed is likely to raise short-term interest rates on June 30,” he said. “The market appears to have anticipated the move and has priced it into 30-year mortgage rates, but the cost of financing remains historically low and strong demand will push home sales to a record this year.”

Mark Your Calendar for NAHB's Fall Construction Forecast Conference

Get the latest forecasts on housing starts, project budgets and other economic bellwethers of the housing industry at NAHB's Fall Construction Forecast Conference at the National Housing Center in Washington, D.C. on Oct. 27. Click here for more information.

Take a Page From Big Builders: Use Customer Feedback to Build Your Business

Don’t assume big builders are out of touch with their customers just because some of them build 15,000 homes a year. After all, they don’t do a billion dollars in sales year after year by accident.

The vast majority of big builders (which I define as those that build 200 or more homes a year) routinely survey their home buyers. Most small-volume builders don’t.

In home building, your most valuable asset is your unique customer data. Without a doubt, those who don’t survey their customers are ignoring the people most essential for their success. If you owned an NFL team, it would be like giving your first-round draft choice to your biggest rival. If you were Coca-Cola, it would be like selling your brand name and formula to Pepsi.

While lunching recently with a builder friend of mine who builds 100 homes annually, I asked him what he was doing to stay in touch with his home buyers. “Nothing formal,” he replied, “but I don’t have to. If home buyers want to talk to me, they can catch me while I’m driving through their community.” No wonder his production is 40% of what it was a few years ago.

My friend was committing one of the biggest mistakes builders make: running the company according to the business won without considering the business that’s being lost. He didn’t have a clue about how many potential customers weren’t knocking on his door or why. And you won’t have any idea about your lost opportunity either unless you ask your customers and prospects for feedback. Only buyers and would-be buyers can tell you what it’s like to deal with your company.

Customer feedback yields other benefits, too. Unique customer data can help guide builders’ designs, community locations and price points. Builders also use this insight to understand their buyers and refine their sales process. The best ones consistently survey their customers to shape their business plans and market more effectively.

Don’t Just Gather Feedback, Act On It

Builders who survey their customers realize they must act on the survey results — and let their customers know they’re not just sitting on the information. Home owners view the survey as a mechanism through which they can affect change and, as a result, are more inclined to participate.

The process is a symbiotic one. Builders receive information to continually fine-tune their operations, sales process and homes, and customers get a better company with better processes — and a better product.

So what can we learn from big builders?

First, let’s start with the assumption that all big builders started as small builders. They got big by building on successes.

• Experience has taught them that to compete in the big leagues of home building they have to listen to their customers. When a home buyer tells them they think locating a computer area in the kitchen is a good idea or making the powder room near the main entrance 6x6 feet instead of 5x3 feet, they listen instead of blowing it off. They see feedback as an opportunity instead of a problem.
  
  
• Big builders have learned they can’t run their business on market data that’s dated — or worse yet — on no customer feedback at all. As one high-production builder says, “We do everything we can to understand what makes our customers tick — their needs, their hopes, their dreams. We live to wow them.”
  
  
• Big builders look at the big picture. They understand business is not about what they like, it’s about what their customers like and want. Big builders realize that if they figure out what matters most to the customer, they aren’t conceding to a whining customer; they are winning in the long run.

All the previous points lead to this one: Successful, profitable, high-volume production builders understand that they don’t have to offer the cheapest house on the block to be successful.

Big builders don’t view customer feedback as optional. They know that customer feedback is fundamental to the home building process. They understand that home buyers are their most important source of information and they must listen to them.

Paul Clem is national sales director for MyBuilderInfo, an Overland, KS-based full-service market research company specializing in Web-based customer satisfaction surveys. For more information, e-mail Clem or call him at 913-469-0070 x14.

NAHB Members Urged to Watch the Mail for Liability Insurance Survey

A "call to action" on general liability insurance (GLI) went out last week to more than 50,000 NAHB members via a special mailing, as part of the association's ongoing effort to ensure effective and affordable GLI coverage options for its 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:

• Provide an accurate national picture of the loss experiences of the residential construction industry through comprehensive data collection
• Use actual loss experience and exposure data to develop new GLI products for association members
• Structure any new GLI products so that they can be purchased from state-licensed local insurance agents with whom NAHB’s members already do business

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.

Seven Rules for Powerful Pre-Marketing to Active Adults

A carefully planned and well-executed pre-marketing program can produce tremendous results. But a lackadaisical program can be disastrous. This is particularly true if your company is trying to reach the 55+ market.

One of the challenges of marketing to active adults is that they have little urgency. Unlike other markets, this demographic does not purchase homes because of job transfers, changes in family size or any of the other more time-sensitive motivators.

What active adults have, however, is time and money. You need to create the motivation. That is why a strong pre-marketing program is so critical.

The following are seven rules for pre-marketing to active adults that will save you money and produce results:

1. Allot Six Months for Success

Some builders are so anxious to collect leads that they place a sign on site as soon as they have purchased the ground. But after spending a year getting permits, they end up with a long list of frustrated prospects.

Instead, don’t start collecting leads until six months prior to construction. That way, you maintain your prospects’ enthusiasm and eliminate their frustration.

2. Use Your Pre-Marketing Program as a Research Tool

At this year’s International Builders’ Show, Barbara Kleger, president of Philadelphia, PA-based Senior Living Consultants, spoke about how builders benefit from including early prospects in the design of their homes and their marketing program. Not only will this approach provide insight that will improve the appeal of your products, these motivated prospects and leads are predisposed to purchase because they have been involved in the process.

3. Keep Communicating

The single largest frustration among people who register during a pre-marketing program is that they feel ignored. They want to find out more. They want to hear about progress. But every day that goes by without a response drains their enthusiasm.

Keep them informed through a friendly, knowledgeable person who will be available to answer their questions and help them to feel valued and important.

4. Create Excitement and Confidence

People who sign onto you lead list are interested in your community, but they also are afraid of making a bad decision.

Your more mature prospects probably have either experienced or heard about people who regretted purchasing in a community that never delivered on its promise. A strong pre-marketing program will help prospects overcome this fear by building excitement and creating confidence.

A great way to accomplish both is to take your top prospects on a tour of one of your existing communities that offers similar homes and amenities. To increase your credibility, have some of you previous purchasers serve as the tour guides. Once your prospects see your prior success, they will be motivated to sign up for your next community.

5. Separate the Browsers From the Buyers With a Refundable Deposit

Many people will join your list out of curiosity. So how do you know who is ready and willing to buy and who is not? Ask them. The best way is to share all the information that a prospect would need to make a commitment and then ask for a refundable deposit.

The deposit ensures the prospect that they will have an individual appointment and the best selection. Those people who are interested but do not want to place a deposit should be welcome to schedule an appointment at a later date.

Ideally, your first release is small enough so that it will be completely purchased by those who placed deposits. And as the price goes up, the fence sitters will learn the real cost of waiting.

6. Celebrate Success

The first purchasers are brave pioneers. If you treat them right, they will be your most loyal supporters. Send them letters, write articles about them in your community newsletter, send out press releases, hold special parties, give them gifts — do whatever you can to make them feel special.

In one community, we sent our first 50 purchasers on a five-day Caribbean cruise. The esprit de corps this created was remarkable — and led to many referrals.

7. Maintain Momentum

The worst thing that can happen to a community is to open it with lots of energy, enthusiasm and initial success — and then stall. The people on the lead list who did not purchase are watching carefully to see what happens.

If prices rise and sales continue, they will want to jump on board before they miss any more opportunities. So constantly create urgency, maintain enthusiasm and show progress. It doesn’t matter how small the progress may be. What does matter is how excited you and your sales staff are about it.

A successful pre-marketing program requires much more than just collecting names. You must get prospects so excited that they want to move today.

So, are you ready to roll up your sleeves and make your prospects feel important? If not, save your money until your model is open. If you are willing to take the risk, you will see a terrific return on your investment.

Todd Harff is president of Creating Results, LLC, an Occoquan, VA-based company strategic marketing company that develops and implements comprehensive marketing programs. For more information, e-mail Harff or call him at 703-494-7888 x13.

New Marketing Categories Added to Seniors Housing Council Awards

The NAHB Seniors Housing Council has revamped its seniors housing awards program — the 2005 Best of Seniors Housing design and marketing awards program, “Celebrating Excellence…Visions of the Future,” — by putting an increased emphasis on marketing and adding 31 new marketing categories.

The awards program now recognizes innovative design and marketing approaches to seniors housing in 108 categories.

Entries are now being accepted. The entry deadline is: Oct. 22.

New marketing categories include logo design, community brochure, direct mail piece/campaign, Web site, black-and-white and color print advertisements, radio commercial, television commercial and special promotion for active adult, service-enriched and multifamily seniors communities.

The Best of Seniors Housing awards program also features a total of 77 design categories that recognize companies for meeting the ever-changing needs and desires of the 50+ market.

Platinum, gold and silver winners will be chosen for current and “on the boards” projects including, but not limited to:

• Active adult community — small, midsize and large
• Multifamily housing  — for-sale condominiums, rental apartments and affordable apartments
• Community center and community center interior design
• Model home design and merchandising
• Aging-in-place design — new home and remodeled home
• Assisted living housing
• Congregate care community
• Continuing care retirement community
• Mixed use
• Renovated housing
• Special needs housing

Contest rules and the complete Call for Entries are available online at the NAHB Seniors Housing Council Web site, www.nahb.org/seniorsdesignawards.

Or e-mail Eucklan Matthews or call 800-368-5242 x8220 for more information.

The Best of Seniors Housing awards ceremony will take place during the 2005 International Builders’ Show in Orlando.

Upscale Lofts Put Problematic Site on the Right Side of the Tracks

The need for new housing in California is so acute that sites that would be passed up elsewhere are being turned into high-end residential developments, including Markethouse Lofts in San Jose, winner of NAHB’s 2004 Pillars of the Industry award for Best Loft Community.

The developer, the Sares Regis Group, was not deterred by the site, a long narrow triangle of land in an industrial area bounded on one side by railroad tracks. The architect, Rob Steinberg, of the Steinberg Group, San Jose, took the area’s industrial vocabulary and bumped it up a few notches into the arena of high style.

Metal is the material of choice — grid-like black metal bars for balcony railings and interior stairway railings, vertical banks of windows in metal frames that evoke train tracks, even vertical metal siding on some areas. And the buildings are all angles on the outside — just like the site.

What could have been a stark exterior is softened by strategically placed stucco, in warm earth tones: cream, terra cotta and sage. And while space for landscaping is at a premium, low shrubs and small trees in bright blue planters add color and life.

A few curves — high bow windows and an undulating pedestrian path — mark the transition from the outside to the more inviting interior courtyards. Inside, the loft units revert to the exterior’s sharp angles, but the model is warmed with earthy colors and green plants.

The 53 condominium loft units — with an average size of 1,164 square feet — sold out in 13 months for an average price of about $430,000. That may sound like a high price, but not in San Jose.

Save the Date for Next Year's Pillars Conference, April 4-6, 2005

Mark your calendars now for the 2005 Multifamily Pillars of the Industry Conference & Awards Gala, scheduled for April 4-6, at the Doral Golf Resort & Spa in Miami.

Remodelers Are Setting Up Shop in Cyberspace to Reach New Customers

The Internet, no matter who actually created it, has become indispensable. And those remodelers with vision and business savvy are jumping on the Internet Express to create Web sites that tout their companies to a host of different markets, including a generation of consumers who never think about using the Yellow Pages.

That’s right. A growing consumer base, Gen Xers, are finally making money and beginning to use remodeling services. But how to reach them? They rarely read printed newspapers. They almost never turn to the Yellow Pages.

Why, ask Jeeves (www.askjeeves.com), of course — or Google, Yahoo or any of the other search engines. Gen Xers sought the true meaning of quantum physics and other answers to pressing questions on the Internet while breezing through college. Now they are turning to the Internet to research available home remodeling projects, financing options and, most importantly, who can do the job for them.

Says Scott Gregor, of Master Plan Remodeling in Portland, OR, “Having a Web site seems to qualify me. People expect it. And when you can say, ‘Check out my Web site,’ it seems to assure them that I am the kind of cutting-edge remodeler they want to consider working on their project.”

If you are not on the Web yet, you’re not alone. According to the latest Remodeling Market Index (RMI), while 96% of survey respondents indicated they own a personal computer at work, only 48% currently have a company Web site. If you are part of the 52% without Web sites, don’t worry, you still have time to remedy the situation and grow your business.

Create a ‘Living,’ Evolving Online Company Brochure

By creating a Web site, remodelers can produce a “living” company brochure, one that can easily be updated economically (sometimes for no charge) and at less cost than creating and re-creating most print advertising.

John Keohane, of Keohane Construction in Dedham, MA, views his company’s Web site as advertising. “Everyone has an ad in the Yellow Pages to give themselves credibility. My Web site is another advertising avenue to show people who we are and what we do, and it enables them to get more information about our company,” Keohane says. “We actually have the Web site because in today’s market you need credibility, and to some people not having a Web site leads to thoughts that you are not a good company.”

Mark Anderson, of Persona Kitchen and Bath Solutions in Wichita, KS, agrees. “We know people use our site to check us out and make sure we are legitimate,” he says.

“We view our Web site as a low-pressure qualifier. People also like to see what projects we have done and what we can do before they call,” Anderson adds. “We also use our Web site to promote our beautiful showroom. We include a map to our offices and showroom.”

The Sky’s the Limit

Actually, the Internet is virtually limitless. So, when establishing your Web site, let your imagination run free. Depending on future company plans and your Webmaster’s savvy, you can include almost anything on your Web site — links to manufacturers, customer communication tools, audio or video testimonials, virtual project updates, etc.

“I learned some time ago that linking to major manufacturers is the key to increase your traffic,” says Mike Carden, of MUI Corporation in Vestavia Hills, AL. His potential customers know about Hardi-Plank, Therma-Tru and other top name products, so he reasons that the best way to increase leads is to link to the major manufacturers that are a part of his business. 

Anderson also links to manufacturers so his customers can see more style and product options than they would see just viewing his existing projects. “We also link to our local HBA’s Web site to show customers we belong to a professional organization. It helps add legitimacy.”

Arthur Kriens, of Kriens Construction in Sioux Falls, SD, sees his site as an evolving portfolio. “We use our Web site as a presentation book that includes pictures of our projects, and our future plans include expanding the presentation book so potential customers will have a good idea of who we are and what we do before they call,” he says. “We believe this will set us apart from our competition and the ‘one-guy-in-a-truck’ operators.”

So, You Want a Web Site, Too?

Where to start?

James E. Hatfield, of Hatfield Construction, Inc., in Colorado Springs, says to keep your Web site simple and easy-to-navigate site and to provide basic, yet pertinent, information and pictures of your work.

Other pointers to consider include:

• Create a professional look.
• Use your site to reflect who you are and what you do. This is an ideal place to pump up your company.
• Include company information and project pictures.
• Spend the money for that high quality, professional site.

“Remember, we as remodeling contractors strive to be professional and our sites should reflect that commitment,” points out Chuck Russell, of Westhill, Inc., in Woodinville, WA.

Lora Deller, of Red Oak Remodeling in York, PA, adds, “Look at other sites in your industry to get ideas to help you start. Pull out ideas that you like and dislike. Look at your competitors’ sites to see how you can make your site different.”

Finally, almost all company owners with Web sites agree — hire a professional Web designer. You are good at what you do; let a professional Web designer do what he or she does best. When deciding whom to use, choose a Web designer you can relate to easily, because you will be working together closely. Just like you would advise your customers to shop around for the “right” contractor, shop around for the right Web designer by looking at sites they have designed.

“Companies without Web sites need to realize that Web sites are not just a fad,” Anderson points out. “This is where consumers get information and do research."

“Today, consumers are more educated and know what they are looking for, and having a Web site is the most cost-effective way to get your company out in front of these potential clients,” he adds. “If you don’t have a Web site the consumer notices, you end up missing an opportunity.”

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.

Design Trends to Watch: 'Friends' Entries, More Courtyards

The first of three parts.

NAHB’s Design Committee members and other NAHB design professionals gather annually for a roundtable discussion about upcoming trends in architectural design, community design, interior design and general housing. The following are some of their observations:

Infill in the City

• Infill projects are popular among active seniors who are moving back to the city as well as with young professionals and single buyers.
  
  
• Mixed-use projects also are on the rise in downtown areas. While there is an oversupply of multifamily in the rental market, the condominium market has come back strong and many apartment communities are converting to condos.
  
  
• Builders are facing a wide variety and increase in the number of code and zoning issues for downtown projects.

Cities Are Dictating Design

• More and more cities are dictating what can and cannot be built by establishing their own design guidelines and requiring more approvals to meet these guidelines. This is forcing the industry to seek authentic design styles. The situation is also challenging to builders — particularly small builders — who create one prototype to be used in several cities. Because guidelines are becoming city-specific, builders are being forced to create different plans for different markets and can no longer mass-produce the same home in different markets.

What’s Up in the Midwest?

• The residential market in the Midwest is sophisticated. While buyers there appear to be comfortable purchasing homes in suburban communities, they are being offered more types of community choices. One choice gaining in popularity as an alternative to larger, more traditional communities are small enclave communities — with between 25 and 55 houses.

Getting Aggressive With Revitalization

• More than 40 states have cut development funding, which is having an impact on business in the cities and the suburbs. This appears to be spurring development and revitalization in areas just outside of cities —  “second ring” areas such as close-in urban/suburban communities like Arlington, VA, across the Potomac River from Washington, D.C.
  
  
• Cities with strong mayors seem to be leading the way in making urban revitalization possible.
  
  
• Smaller towns are becoming more aggressive with their own revitalization efforts, which is great news and good business for local builders, architects and contractors.

Less Grandeur at the Front Door

• Buyers still desire a nice entry, but not necessarily a ceremonial one.
  
  
• There is an evident trend to eliminate the large entry/foyer/staircase area, partly because of where the garage is now being placed.
  
  
• Buyers are also seeking a second entry — a “friends” entry — in the area between the garage and the living room.

Other Buyer Preferences

• The 8,000-square-foot-and-above house is no more. Buyers prefer more detail on a smaller home rather than a larger home with many large rooms.

• Courtyards are popular because they introduce light into the center of the home and break up the floor plan.

• Age-targeted communities — usually single-level homes on small lots that require little maintenance — are coming on strong in California.

• Alley-loaded homes are becoming more widely accepted, though this is still not a majority preference.

• There is more prevalence for live-work units mixed into single-family communities and retail town centers or marketplace areas.

For more information about the NAHB Design Committee, click here, or e-mail Michelle Persinger Matuga.

Best in American Living Awards Entry Deadlines Near

Entry 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.

• Entry forms and fees due: Thursday, July 1
• Entry notebooks due: Thursday, July 15

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.

Call for Entries for The Nationals to Open Soon

The call for entries is nearing for The Nationals — The National Sales and Marketing Awards — the largest and most prestigious competition for new-home sales and marketing professionals and communities. The Nationals are presented by NAHB’s National Sales and Marketing Council.

Held each year at the International Builders’ Show, The Nationals honors the best in architectural achievement, design, advertising and promotion, interior merchandising, Web site design and more, and is open to individual sales and marketing professionals, home builders, associates and sales and marketing councils.

The call for entries opens July 1.

The entry deadline is Sept. 24.

The Nationals features gold, silver, individual, council and regional awards in 45 categories.  

Celebrating its 23rd year, The Nationals winners will be showcased in national, regional and local publications. In addition, selected winners will be spotlighted in BUILDER magazine and by more than 26 publishers of New Homes Guide.

For more information and a listing of last year’s award winners, visit www.TheNationals.com.

Showcase Your Bright Sales or Marketing Idea

If you have produced an innovative and cost-effective marketing campaign or strategy, enter Sales & Marketing Ideas magazine’s Idea of the Year contest. Ideas generated between July 1, 2003 and July 1, 2004 are eligible. The entry deadline is Aug. 6. 

To download an entry form, visit www.SMImagazine.com.

CGA Will Turn Your Associate Into a Beneficial Partner

Building is a complicated business. When you choose subcontractors, suppliers, architects, attorneys and other associates to work with, don’t you want them to understand what you do, how they fit into the project and the day-to-day issues you face?

Participants in the Certified Graduate Associate (CGA) program have taken the time to learn about your business so they can serve you better. They have learned about the issues and obstacles you face and have demonstrated a commitment to learning how to help you succeed. Through CGA classes, they have become “beneficial partners.”

CGA classes help broaden your associates’ knowledge and understanding of your business. These professional education classes give associates a view of the big picture. What’s more, individual courses like Scheduling and Introduction to Business Management help tie in how particular elements of the business affect others and how everything is interrelated.

As a CGA, I also can say that spending hours sitting with builders and discussing the situations they have used both successfully and unsuccessfully was among the best educational experiences I have ever had. Now that I’ve earned my CGA, when I meet with builders, I now know I can getinvolved in the discussions and contribute. I’m living proof that CGA makes you a better partner through continued education.

I wear my CGA designation badge at meetings with builders and other industry professionals and can’t tell you how many people have stopped and noticed. It’s a great conversation starter.

But it all starts with you, the builder. If you encourage your vendors and suppliers to get involved in CGA the program, they will. Have you ever asked your vendors or contractors if they are a CGA? If you ask, your best partners will take the time to learn how they can participate, and once they have, you both will benefit.

By the way, my husband, Nelson, is a custom builder. I believe that now that I’ve earned my CGA, I will be able to understand his business a little better, too.

Robin S. Newhouse, CGA, is vice chair of NAHB’s Associate Members Committee and has been an employee of Dominion Virginia Power for more than 19 years. She is an active member of the Fredericksburg Area Builders Association, the Home Builders Association of Virginia and NAHB.

Liberty Mutual Saves NAHB Members Up to $327.96 a Year

NAHB members can save up to $327.96 or more a year on auto and home insurance with Group Savings Plus®* from Liberty Mutual. With Group Savings Plus®, members can receive an exclusive group discount.* Additional savings are based on the insured’s age, driving experience and auto equipment (such as anti-lock brakes and airbags).

Liberty Mutual, offering convenient payment plans, including electronic funds transfer (EFT) with no downpayment, is known for its round-the-clock claims service and 24-Hour Emergency Roadside Assistance.**

For a free coverage evaluation and no-obligation rate quote, call 800-341-5247, or receive a quote on-line at www.libertymutual.com/lm/nahb.

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to http://memberadvantage.nahb.org.

Or visit www.nahb.org to explore the full range of benefits associated with membership in your local, state and national home builders associations.

*Average savings based on data compiled as of 3/1/00. Discounts vary by state.
**Service applies to auto policyholders and is provided by Cross Country Motor Club of Boston, Inc., Boston, or through Cross Country Motor Club of California, Inc., Boston.
Coverage provided by and underwritten by Liberty Mutual Insurance Company and its affiliates, 175 Berkeley Street, Boston.

NAHB Research Center Certifies Two Builders for Commitment to Quality

Grayson Homes, a privately held builder headquartered in Ellicott City, MD, and KB Home Las Vegas Division, a publicly held national home builder, are the first home builders in the nation to earn certification under the National Housing Quality (NHQ) Program’s pilot Certified Builder initiative, the NAHB Research Center announced last week.

Participation in the NHQ Certified Builder program is designed to increase efficiency and consistency in building practices. The Certified Builder program provides a rigorous and complete review of business practices, and ensures that all elements of the company’s quality assurance system are incorporated to provide greater customer satisfaction. Certification candidates participate in field and office training to implement their quality program, work more efficiently with their trade contractors and begin the continuous improvement efforts required by all NHQ programs.

Grayson Homes — A Solid Quality Foundation

In 2002, Grayson’s trade contractors began training with the NHQ Certified Trade Contractor program. Last year, the company won the NHQ Silver Award, which is patterned after the Malcolm Baldrige National Quality Award and represents the highest recognition by the housing industry for quality achievement.

“Achieving and maintaining our status as an NHQ Certified Builder will engrain consistency and predictability into all facets of our home building business,” said Cindy McAuliffe, president of Grayson Homes. “It will be an easily observable demonstration of our quality commitment to our buyers, trades and employees that aligns our performance with our mission and provides a valuable third-party testimonial of our quality.”

Grayson customer satisfaction surveys find that 96% of the company’s home buyers would either refer the company to a friend or would choose Grayson again when buying another home.

KB Home Las Vegas — Leading the Quality Charge

Last November, after its Las Vegas division successfully implemented the NHQ Certified Trade Contractor program, Bruce Karatz, the company’s chairman and chief executive officer, announced that KB Home would become the first large builder in the country to implement the NHQ Certified Trade Contractor program nationwide.

“Building on our stringent internal quality processes, KB Home’s participation in the NHQ Certified Builder Program sends a powerful quality message to our customers,” said Leah Bryant, regional general manager of KB Home and former president of KB Home Las Vegas.“ So far, as a result of program implementation, our Las Vegas division has seen a four-day improvement on its build time, with the confidence that we and our trade partners are building with a consistent commitment to quality.”

KB Home delivered more than 3,300 homes in Las Vegas in 2003 and ranked in the top three in the J.D. Power and Associates 2003 New Home Builder Customer Satisfaction Study in Las Vegas.

“By focusing builders and trade contractors on getting the job done right the first time, NHQ certification differentiates those who talk about quality from those who can demonstrate it,” said Dean Potter, director of quality programs at the NAHB Research Center.

The NAHB Research Center will officially launch the national roll-out of the NHQ Certified Builder Program during the 2005 International Builders’ Show in Orlando.

In the interim, builders interested in starting on the path to quality certification can click here or send an e-mail. Or call Rita Knab, NHQ program coordinator, at 800-638-8556 x6225.

Competition Opens for EnergyValue Housing Awards

The 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.

Home Buyers in Charlotte Can Boost Qualifying Income by Riding the Bus

Home buyers in Charlotte, NC, who use public transportation can apply the money they save on commuting costs to qualify to buy a home under the Charlotte Smart Commute Initiative announced last month.

To be eligible, buyers must choose a home within a quarter-mile of a Charlotte Area Transit System bus stop, and as a further incentive to participate in the program they will receive a free two-month bus pass from the transit authority.

Lenders who are participating in the program include Countrywide Home Loans, RBC Centura, State Employees’ Credit Union and Sun Trust Mortgage. Fannie Mae will purchase the eligible loans from the lenders.

Among the advantages of participating in the program:

• Borrowers’ qualifying incomes can be increased by $200 per month for single wage-earner households and $250 for those with two incomes, which could increase the home-buying power of a typical purchaser of a median-priced home by about $10,000.
• The downpayment requirement can be as low as $500.
• The home buyer can reduce or eliminate the expense and upkeep of a car.

“From the top of our national association to local chapters across the country, home builders are focused on improving housing for working families by enhancing the affordability of homes convenient to local jobs,” said Rick Judson, president of the Home Builders Association of North Carolina.

“Smart Commute increases affordability and encourages quality growth of housing developments close to public transportation,” he said.

Job Corps Graduate Starts His Career With Help From Lowe’s and HBI

Anthony Mitchell, a young man from North Philadelphia, is benefitting from the “Building Careers Scholarship Fund,” which was created in April by Lowe’s Charitable and Educational Foundation and the Home Builders Institute (HBI), the workforce development arm of NAHB.

The fund, which was established with a $50,000 contribution from the foundation, is aimed at helping Job Corps graduates get started in their careers in the industry by providing financial assistance for such job-related needs as clothing, equipment and transportation.

Mitchell was having trouble at home and with the law and had lost interest in school until a good friend suggested he look into Job Corps. At the Keystone Job Corps Center in Drums, PA, under the tutelage of instructor Joe Gorolis, Mitchell learned carpentry.

Through hard work and determination, Mitchell earned his GED last September and in March completed his trade instruction, which included building houses with local builder Ray Hrobak Construction as part of his Work-based Learning experience.

With the money he saved from his construction work, transitional funds from Job Corps and help from the Lowe’s Building Careers Scholarship Fund, Mitchell was able to purchase a car and insurance last month to get him to his new job and an apprenticeship with Klover Contracting Inc., in Quakertown, PA.

“Lowe’s financial commitment 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 Chairman James Sattler said of the new scholarship initiative.

“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,” added Mike Horn, Lowe’s vice president for commercial sales.

HBI is celebrating 30 years as a training contractor for the Department of Labor’s Job Corps program, which places more than 2,000 graduates in industry jobs annually. Job Corps is the nation’s oldest and largest residential education and job training program for at-risk youth, providing young people with hands-on training, basic academics and employability skills.

For more information on Job Corps and HBI’s other training programs, e-mail Maria McIntyre or call her at 202-371-0600 x8912.

Merchandising Program Provides Upgrading Opportunities for Surface Materials

A new national merchandising program for home builders, “At Home With Formica,” makes the home buyer’s design selection process for surfacing materials easier than ever at the same time as it showcases opportunities for upgrading, according to the Formica Corporation.

With more than 100 years of experience designing and manufacturing surfacing materials, the globally based Formica Corporation is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

Formica’s new merchandising program pairs a complete selection of surfacing materials with upgrades that home buyers can compare and coordinate for multiple locations in the home, including bathrooms, wet bars and kitchens. The program includes design coordinated, high-performance surface solutions in eye-catching sample displays; a model home/design center merchandising system; and easy-to-use feature sheets for one-stop selection of Formica® brand products.

Surfacing product designs are subdivided into good, better and best upgrade offerings. The selections include:

Formica Brand Laminate

• GOOD: The Essential Elements Collection features 58 matte finish designs from the Color Portfolio, Patterns and Formations Collections. This entry-level price point is an appropriate choice for a wide range of interior applications, including kitchen countertops and bathroom vanities where surfaces must address practical concerns.
• BETTER: The Natural Elements Collection features 31 matte finish designs at a level that brings richness to modern interiors and classic elegance in contemporary residential installations.
• BEST: The Etchings, Honed and Sparkle Finish Collections include 33 items that offer the latest and most innovative textures in laminates. The collections add light and texture reminiscent of granite and stone and bring a distinctive look to kitchen countertops and bathroom vanities, creating interiors that excel in both performance and style.

Formica Solid Surfacing

• GOOD: The Formica® Basic Elements Collection features eight designs that comprise the entry level price point in Formica Solid Surfacing. The range of colors and patterns provide the ultimate design flexibility.
• BETTER: The Formica® Classics Collection features eight best-selling designs, each highlighting a separate color range, as a first upgrade opportunity. Patterns and colors run through the entire material, making it ideal for custom designs and edging, accents or inlays.
• BEST: The Formica® Signatures Collection features eight best-selling designs that bring elegance and sophistication to any room and shape themselves to any design concept.

For further information on “At Home With Formica,” click here or call 800-FORMICA (367-6422).

1976 NAHB President John Hart Dies in Indiana

John C. Hart, a prominent Indianapolis home builder and 1976 president of NAHB, died on June 6 at his home in Noblesville, IN. He was 83.

“John Hart will be remembered for his keen political wit and interests, his engaging personality and his commitment to building a strong housing finance system that would maintain the flow of credit throughout the housing’s industry’s business cycle,” said NAHB President Bobby Rayburn. “John was dearly loved and respected by our 2,000-member board of directors, and he will be greatly missed.”

Hart was born and raised in Indianapolis, where he attended Butler University. He started his professional career as an accountant for Bartlett Construction. He later established Gateway Corporation and Hart Development Construction, where he became a prominent builder/developer in the Indianapolis area and built more than 11,000 single-family homes and apartments. He also developed, owned and operated shopping centers, hotels, restaurants and bowling centers.

Hart was elected to the Indiana State House of Representatives in 1968 and later served as chairman of its Ways and Means Committee. In that position, he led a major property tax reform effort in 1972 that has provided the foundation for property tax controls in the state to the present time.

In addition to his political interests, Hart contributed considerable amounts of his time and energy to the housing industry, serving in leadership roles at the local, state and national levels. He was elected president of the Builders Association of Greater Indianapolis in 1966 and president of the Indiana Builders Association in 1969. He received numerous awards from these associations, including “Builder of the Year,” in recognition of his enormous contribution to housing in the Hoosier State. Each year the state association presents the John C. Hart Presidential Award in his honor.

Hart was elected secretary/treasurer of NAHB in 1973 and climbed the leadership ladder to become the association’s president in 1976. That same year, he was inducted into the National Housing Hall of Fame.

Capping a long career in the housing industry and pursuing his keen interest in housing finance, in the early 1980s Hart was appointed chairman of the board and executive director of the Indiana Housing Finance Authority, an agency he was instrumental in creating to help provide mortgages for low- and moderate-income families.

Hart was preceded in death by his wife, Mary Haselmire Hart, and is survived by his brother, William Hart, of Austin, TX, and nine children, 21 grandchildren and 12 great grandchildren.

Memorial services were held on June 10.

Memorial contributions can be made to the John C. Hart Scholarship Fund in care of: Butler University, 4600 Sunset Avenue, Indianapolis, IN 46208.

National Housing Endowment Awards Grants for Housing-Related Initiatives

The National Housing Endowment, the philanthropic arm of NAHB, recently awarded more than $110,000 to projects and programs that epitomize the endowment’s commitment to advancing education, research and job training efforts related to the housing industry.

“We’re pleased to be able to support such a large array of worthwhile initiatives,” said Dale Stuard, chairman of the National Housing Endowment and 1988 NAHB president. “Each of these projects has the potential to positively impact the housing industry while making an enormous difference in the lives of others.”

The following have been awarded funding:

• The Joint Center for Housing Studies, Harvard University ($7,000). The award will support publication and distribution of “A Call to Action: Strengthening Workforce, Communities, and Regions through Housing Solutions.” The report draws attention to the implications of housing costs, housing quality and residential development patterns for business decisions, economic competitiveness and human and community development.
• 2004 Zarrow Mental Health Symposium ($15,000). This national conference,
  “A Place to Call Home: Exploring Innovative Approaches to Housing for People With Mental Illness,” will convene community leaders, including members of the home building industry, to focus on eliminating homelessness and substandard housing for people with mental illness.
• International Housing Conference of the Americas ($10,000). Grant funds will provide scholarships for top Mexican university students to attend the November 2004 conference, a joint partnership between NAHB and Mexico’s National Industry Chamber for the Development of Promotion of Housing (CANADEVI).
• National Housing Endowment/Home Builders Care Project of the Year Award, 2004-2008 ($33,875). The annual award program recognizes an outstanding community service project developed and implemented by an NAHB member or a local or state home builders association. Winners receive a $5,000 contribution to the charity of their choice and are recognized at the annual NAHB International Builders’ Show.
• Challenge/Build/Grow Grant Initiative ($20,000). Open to organizations within the NAHB federation, the Challenge/Build/Grow program offers matching funds for projects targeting issues of importance to the housing industry. Nine state and local home builders associations received grants, including the BA of Eastern Connecticut; the HBA of Ft. Wayne, IN.; the HBA of Northern Kentucky; the HBA of Lincoln, NE; the HBA of Fargo-Moorhead, ND; the HBA of Metropolitan Portland, OR; the Home Builders/Remodelors Association of Mahoning Valley, OH; the Greater San Antonio BA; and the Master Builders Association of King and Snohomish Counties, WA.

For more information about the National Housing Endowment, e-mail Julie Wheeler or call her at 800-368-5242 x8483.

Home for Large Family Demolished and Rebuilt in the Most Extreme of ABC-TV’s ‘Extreme Makeovers’

With a crew of 300 people working around the clock, ABC-TV’s “Extreme Makeover: Home Edition” razed a house and built a new one from the foundation up in only a week, relying on help from HomeAid America and Shea Homes.

Selected to receive the new house was the Garay family of Los Angeles. After Johnny Garay’s mother was killed at home two years ago by a stray bullet from a drive-by shooting, all of the five half-siblings left behind moved in with his family so that they would not be separated by Child Protective Services. With nine children, the new household was forced to move to a larger house, but could only afford a fixer-upper.

“They need a house that’s not on the verge of being red-tagged,” said Bert Selva, president and CEO of Shea Homes. “We want to give them more than a house with heat and without broken windows. We want this to be the first step in building a better community for both the Garays and their neighbors.”

Shea Homes and its trade partners donated hundreds of thousands of dollars in resources and labor to build the 4,700-square-foot dream home, which is more than twice the size of the Garay’s previous residence.

The home was designed by Orange County-based Bassenian/Lagoni Architects, which also donated its work on the project.

HomeAid America lined up the builder and architect for the television producers when it became apparent that renovation of the Garay’s existing home was not a viable option. The effort was a first for the show’s designers, who normally move walls, replace floors and radically change house facades.

Established in 1989 by the Orange County chapter of the Building Industry Association of Southern California, HomeAid America is a national non-profit organization that builds shelters for the temporary homeless.

Taping of the show began on June 2 and ended on June 9. Scheduled to air in the 2004-2005 season, the specific date for the program has yet to be announced.

Six Leaders Named to California Building Industry Hall of Fame

Six building industry leaders will be inducted into the California Building Industry Hall of Fame at ceremonies on June 15 in San Francisco in conjunction with PCBC® The Premier Building Show.

“All six of this year’s inductees are truly giants in the industry — people who have helped thousands of California families attain the American dream of homeownership while giving selflessly to make their communities a better place to live,” said Leo Andrade, chairman of the California Building Industry Foundation, a non-profit educational and research organization that administers the program.

This year’s honorees are:

• Michael Keston; Larwin Company, Encinco. As president of Larwin since the mid-1970s, Keston has led the evolution of the Larwin Company from a mass-production builder to one that builds smaller projects for diverse customers. With his wife, Linda, he he provided a major endowment to the University of Southern California to establish the California Infrastructure Institute, which is conducting research to help decision makers find policies to accommodate California’s continued growth.
• Randall Lewis; Lewis Operating Corporation, Upland. A 30-year veteran of the real estate industry, Lewis is executive vice president and a principal of Lewis Operating Corp., a member of the Lewis Group of Companies, which is one of the nation’s largest privately held real estate organizations. During the past five years, the company sold its home building operations and now focuses on developing planned communities and building apartments, shopping centers and office and industrial parks. Lewis oversees the marketing activities for all regions of the organization, and his areas of expertise include community development, strategic planning, market research, product design, advertising and sales. He has served as president of the Baldy View Chapter of the Building Industry Association of Southern California and is a life director of NAHB.
• Ian McCarthy; Beazer Homes, Atlanta. Since McCarthy became president of Beazer’s American operations in 1991, Beazer USA has grown from a small Southeastern company to become the sixth largest builder in the nation, with more than $3 billion in revenues and operations in 20 states. McCarthy served as chairman of the National Advisory Board for HomeAid America, the building industry’s charitable arm that provides shelters and transitional housing for the temporarily homeless, and he was instrumental in the national expansion of HomeAid, establishing chapters in many of the states where Beazer builds. He is the first person based outside of California to be inducted into the Hall of Fame.
• Robert Rivinius; California Building Industry Association (CBIA), Sacramento. Rivinius is the chief executive officer of the 6,000-member California Building Industry Association. During his 25-year tenure with the association, it has grown from five to 40 employees and is recognized as one of the leading trade associations in California. CBIA’s governmental affairs efforts promote building enough new homes and apartments to house the state’s growing population and oppose “dream-killer” bills that limit residential production and drive up housing costs. CBIA’s home building trade show, PCBC, has become one of the 160 largest trade shows in the nation.
• Stan Ross, USC Lusk Center for Real Estate, Los Angeles. Ross is chairman of the board and a senior fellow at the Lusk Center and is a pre-eminent expert in strategic planning for real estate companies, with expertise in mergers, acquisitions and reorganizations. He has restructured dozens of companies; was involved in the initial organization of the Resolution Trust Corporation, which solved the nation’s savings and loan crisis in the 1980s and '90s; and was a member of the Auditing Standards Board of the American Institute of Certified Public Accountants, which sets the auditing rules for the profession. Along with his wife, Marilyn, he endowed the nation’s only comprehensive minority real estate development training program — The Ross Minority Program in Real Estate — which is aimed at educating students to revitalize inner-city neighborhoods.
• Stephen Schott; Citation Homes Central, Santa Clara; and Oakland Athletics Baseball Company, Oakland. During his 40-year career in the industry, Schott has been involved in building more than 30,000 homes, working for a number of major home builders until he and three partners formed their own land development and home building company, Citation Builders, in 1977. Ten years later, Schott bought out his partners and renamed the firm Citation Homes Central, where he is president, chief executive officer and owner. Citation is now one of the largest home builders in California, with operations in the Bay Area and San Joaquin Valley. In 1995 Schott and a partner purchased the Oakland A’s Baseball Company. As the managing partner, Schott has helped transform the A’s from mediocrity in the early 1990s to American League Western Division championships in 2000, 2002 and 2003. A strong supporter of education, Schott and his wife, Pat, founded the Home Run Readers program, which is designed to stimulate reading and promote the importance of literacy in Bay Area elementary, middle and high schools.

Full coverage of PCBC, which is being held at the Moscone Center in San Francisco June 15-18, will start in the June 28 issue of NBN online.

Sign Up for 2005 Committees and Councils by July 9

NAHB 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.

Awards Programs Deadlines

Awards Program	Applications/ Entry Fees	Entries Due
Best in American Living Awards (BALA)	July 1	July 15
The Nationals — The National Sales and Marketing Awards		Sept. 24
EnergyValue Housing Awards		Aug. 9
Best of Seniors Housing — Celebrating Excellence...Visions of the Future		Oct. 22
Innovation in Workforce Housing Awards		Oct. 29

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.

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.