Nation's Building News Online: August 30, 2004

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Presidential Candidates Square Off on Housing Issues

As the campaign for the White House was entering its final phase, NAHB asked the two presidential candidates — President George W. Bush and Massachusetts Senator John Kerry — about their stands on important housing issues that will figure prominently in the decisions of American voters as they go to the ballot box in November.

Housing has been a major contributor to the nation’s economic growth in recent years. Looking ahead, how critical is housing’s performance to the nation’s economic recovery? What specifically would you do to ensure that housing production and home sales continue to lead the economy forward?

PRESIDENT BUSH: America’s economy is strong and getting stronger. In three short years, we have turned recession into recovery and moved into robust economic growth. Since August 2003, the economy has added nearly 1.5 million new jobs. And with interest and inflation rates low and consumer confidence high, our economy is the fastest growing of any major industrial country in the world.

Homeownership rates have soared to record levels in recent months, further evidence of a growing economy. By lowering taxes and laying the foundation for companies to create new jobs, we are contributing to the strength of the housing market and the economy as a whole. Tax relief has left Americans with more money to put toward buying a home or paying the monthly mortgage. In addition, I have pursued an aggressive homeownership agenda that includes the goal of creating 5.5 million new minority home owners by the end of the decade through a variety of proposals to assist low- and moderate-income families.

To meet this goal, I signed into law the American Dream Downpayment initiative, which authorizes $200 million a year to assist an estimated 40,000 low-income families with downpayment funds. In this year’s budget, I proposed the Zero Downpayment Initiative, which would eliminate the statutory requirement of a minimum 3% downpayment for Federal Housing Administration (FHA)-insured single-family mortgages for first-time home buyers. Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 home buyers in the first year alone. I also proposed to triple funding for self-help programs that offer homeownership opportunities to families willing to contribute their own "sweat equity," and I have increased funding for housing counseling programs.

To increase the supply of affordable housing, I proposed a $2.54 billion, five-year Single-Family Affordable Housing Tax Credit for up to 50% of the project costs of rehabilitation and construction of affordable homes, provided they are offered to home buyers with incomes of not more than 80% of area median income. The tax credit would eventually result in an additional 200,000 affordable single-family homes becoming available through construction or rehabilitation.

When I launched my Homeownership Initiative, I challenged the entire real estate and mortgage finance industry to do their part to help close the gap that exists between the homeownership rates of minorities and non-minorities. In response, more than two dozen industry leaders made commitments to help achieve this goal.

My initiative is producing results. The latest Census estimate of the number of minority home owners is 1.6 million higher than it was when the initiative was launched. And homeownership rates are at record levels. Overall homeownership reached a record 69.2% in the second quarter of 2004, while minority homeownership is at a record high of 51%.

With more Americans employed and able to take advantage of home-buying opportunities, the housing market should remain a key contributor to America’s strength and prosperity.

SENATOR KERRY: Housing has been a pillar of strength for our economy, even while many other industries have been experiencing difficulties. We must ensure that our housing sector remains strong while we work to create new jobs and growth in our economy.

As Ranking Member of the Senate Banking Committee’s Housing Subcommittee for a number of years, and as a current member of the Senate Finance Committee, I understand the important role housing plays in developing our economy. That is why I have worked to promote the whole spectrum of housing opportunities, including: the preservation of existing affordable housing; the construction of new affordable housing; protecting and expanding the Low Income Housing Tax Credit; introducing legislation to increase homeownership through the rehabilitation of existing homes and the construction of new homes; protecting and expanding the multifamily and single-family FHA programs; and producing elderly and assisted housing.

John Edwards and I will strengthen the economy while keeping interest rates lower by restoring fiscal discipline and putting sound economic policies in place.  Our plan will help encourage homeownership and result in a sustainable boost to the housing market. 

Creating and maintaining a finance system that provides an ample supply of mortgage credit at affordable prices has always been one of the cornerstones of this nation’s housing policy. How would you describe Fannie Mae’s and Freddie Mac’s role in the development of a strong secondary mortgage market, and what value have Fannie and Freddie added to today’s housing finance system?

SENATOR KERRY: Fannie Mae and Freddie Mac have played a critical role in the development of both the rental and homeownership markets in the United States. These institutions have helped millions of Americans achieve the dream of homeownership, raise their standard of living, increase their savings and build wealth. Moreover, the United States has the deepest, most liquid mortgage markets in the world. Despite a number of crises in international capital markets over the past several years, there has never been a lack of mortgage credit, thanks in large part because of the role played by the Government Sponsored Enterprises (GSEs). The predominance of the 30-year, fixed-rate, pre-payable mortgage is a tribute to the importance of the housing GSEs in our marketplace. Very few consumers outside the United States have access to such mortgage products.

PRESIDENT BUSH: Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac, and the Federal Home Loan Banks, make important contributions to the strength and resilience of the U.S. housing markets. The GSEs’ leading role in the development of the secondary mortgage markets has helped make homeownership a reality for more Americans.

Following up on that question, where do you stand on the debate over how best to regulate Fannie Mae and Freddie Mac?

PRESIDENT BUSH: Government Sponsored Enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — are important players in the U.S. economy. They are in need, however, of a regulatory structure that is worthy of their considerable size, complexity and importance. And they must remain focused on their special public mission. My Administration is committed to GSE reform consistent with these twin goals: increasing homeownership opportunities for low- and middle-income Americans and ensuring the long-term strength and resiliency of the housing finance system.

I have called on Congress to create a new regulatory regime that establishes a single financial regulator with the full range of supervisory and enforcement powers that are comparable to other world-class financial regulators. For example, a strong and effective regulator must have the authority to review new and ongoing activities being undertaken by the GSEs. In addition, the regulator should have authority to establish appropriate capital requirements to ensure long-term safety and soundness, and must have the necessary tools to deal with a GSE that encounters significant financial or management difficulties.

My Administration is committed to ensuring that the GSEs are strong and serve their public mission of promoting homeownership. The American people deserve no less.

SENATOR KERRY: I support maintaining the GSEs’ government-sponsored status because housing holds a special place in both our economic and social policy in this country. I am, however, concerned about recent governance and accounting problems at Freddie Mac. I would work with Congress and the top experts to carefully examine these issues and develop legislation that provides for strong, effective supervision and regulation of Government Sponsored Enterprises within a framework that assures their safety and soundness. We must also increase the focus of GSEs on affordable housing.  This will help expand homeownership in the future and ensure the continued strength of the home mortgage market in the United States.

Another cornerstone of federal housing policy is the nation’s very favorable tax system. From time to time, however, some in Congress and elsewhere have suggested restructuring the tax code and eliminating the deductibility of mortgage interest and property taxes. Where do you stand on this issue?

SENATOR KERRY: I strongly support the deductibility of mortgage interest and property taxes. Many middle-income families have been able to afford their first home in part because they are able to deduct mortgage interest and property taxes. Owning a home can lead to a better quality of life and provide families with greater financial security.

PRESIDENT BUSH: Homeownership has always been at the heart of the American Dream and central to the health of the U.S. economy and the wealth of families. It also yields a variety of strong social benefits. I support tax incentives that enable more Americans to achieve the goal of homeownership.

While the housing market has performed very well in recent years, it is becoming increasingly difficult for many first-time buyers and working families to buy or rent homes in the communities where they work. How do you view today’s housing affordability problem, and what specifically would your Administration pursue to help close the gap between those who can afford a home and those who can’t?

PRESIDENT BUSH: My Administration has made increasing homeownership a priority and is working to give more Americans the opportunity to achieve the dream of owning a home. With the national rate of homeownership reaching record levels, we have already made this dream a reality for millions of Americans. And the Department of Housing and Urban Development will continue to reduce barriers to homeownership in the years ahead.

The availability of affordable housing is an enormous barrier for low- and moderate-income home buyers. To address this need, I have proposed a five-year Single-Family Affordable Housing Tax Credit. The tax credit is for up to 50% of the costs of constructing or rehabilitating affordable homes, provided they are sold to home buyers with incomes of not more than 80% of area median income. Tax credits awarded in the first five years will result in an additional 200,000 affordable single-family homes becoming available through construction or rehabilitation.

I signed into law the American Dream Downpayment initiative, which authorizes $200 million a year to assist an estimated 40,000 low-income families with downpayment funds. In this year’s budget, I proposed the Zero Downpayment Initiative which would eliminate the statutory requirement of a minimum 3% downpayment for Federal Housing Administration (FHA)-insured single-family mortgages for first-time home buyers. Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 home buyers in the first year alone. In March of this year, HUD launched the America’s Affordable Communities Initiative to remove regulatory barriers to affordable housing.

SENATOR KERRY: Today, too many low- and moderate-income families living in urban and rural areas across our nation have not been able to share in the dream and benefits of homeownership due to the lack of available housing or the high cost of the housing that is available. I have made a number of proposals in the past to increase homeownership. For example, I have previously introduced legislation, the First Time Homebuyer Affordability Act, which would allow families to borrow up to $10,000 from their IRAs (or from their parents’ IRAs) for a downpayment on their first home without paying any taxes. I have also introduced legislation to encourage the construction and rehabilitation of for-sale homes that will both create new opportunities for low-income home buyers and help revitalize distressed communities. Finally, I have strongly supported efforts to increase FHA loan limits to help more families become first-time home buyers.

In many cases, federal environmental laws and mandates are developed with little regard to potential economic consequences. How do you feel about this, and do you believe consideration should be given to the potential costs and economic risks of environmental protection?

SENATOR KERRY: I believe that formulation of environmental policy must consider a range of interests, including both environmental protection and economic impacts. A Kerry-Edwards Administration will work with all interested stakeholders in developing environmental policy.

PRESIDENT BUSH: HUD has launched the Americans’ Affordable Communities Initiative to reduce the burden of federal, state and local regulation on the home builders industry. And my Administration will continue to develop innovative, market-based solutions that strengthen and improve environmental protections. Federal environmental policies must be integrated with efforts to grow our economy and create jobs, because the greatest environmental progress will come about through new technologies that are created and nurtured by a robust private market. The government and the private sector have already combined efforts to protect the environment and promote growth, and we will continue to do so.

My Administration has also worked to reduce the regulatory burden on businesses to reduce excessive costs that can hinder the ability to do business. Regulatory reform is part of my six-point plan to strengthen the economy.

In some highly regulated markets, it can take three years or longer for a builder to obtain all the approvals and entitlements required before he or she can move ahead with construction on a new housing development. Such delays add tens of thousands of dollars to the cost of homes. What would your Administration do to encourage local and state governments to eliminate excessive fees and regulations?

PRESIDENT BUSH: Decreasing the regulatory burden on our nation’s businesses — including construction and building associations — is a critical part of my plan to stimulate the economy, create jobs and promote prosperity for all Americans. Excessive paperwork and bureaucratic regulations can hinder a company’s ability to do business by diverting funds that could otherwise be used to invest in new equipment, expand operations, hire new workers or increase wages. I am committed to pursuing a “smart” regulation agenda, which involves modernizing existing rules and adopting rules only when justified by sound science, economics and law. By providing a national policy for reducing excessive regulations and fees, we are setting a good example for states and localities. I will continue to pursue the policies at the federal level that will further serve to encourage state and local government to follow suit and reduce unnecessary regulations and fees.

We are seeing results in the way of reduced regulatory costs and increased savings for business owners. The average annual economic cost of new regulations under my Administration is $1.6 billion. Under the Clinton Administration, the annual cost of new regulations was about four times higher, averaging $6.1 billion each year.

SENATOR KERRY: I am interested in hearing from all interested parties about whether states and municipalities are inappropriately using their regulatory structure to delay housing development and increase tax revenues. Obviously, this is primarily a state and local issue, but I believe we should reduce unnecessary red tape. Our state and local governments are currently facing billions in budget deficits, forcing layoffs, education cuts and tax increases. At the same time, they are facing dramatic increases in costs required to secure our homeland. John Edwards and I will create a new State Tax Relief and Education Fund that will provide $25 billion to help states balance their budgets, meet their homeland security needs and help limit excessive fees on builders.

Is there anything else that you want to say to the 215,000 members of the National Association of Home Builders, who collectively employ 8 million workers?

SENATOR KERRY: John Edwards and I will implement sound economic policies that create a favorable climate for the housing market. We will cut the deficit in half in our first term by rolling back the Bush tax cuts for families making over $200,000 and restraining the growth of spending. In contrast, the Administration’s economic plan would continue to explode the deficit, keeping interest rates higher, raising mortgage payments and reducing homeownership.

In addition, John Edwards and I will jumpstart job growth with a New Jobs Tax Credit, enforce our trade agreements, bring down the spiraling cost of healthcare and education and invest in the industries of the future. This economic program will increase jobs, incomes and economic growth — contributing to strong demand in the housing market.

PRESIDENT BUSH: Over the last three years, my Administration has created an environment that encourages economic expansion and job growth. With almost 1.5 million new jobs created since last August, GDP on the rise, and inflation, interest rates and mortgage rates at near historic lows, there is significant evidence that my economic policies have been a success. American families are now able to use their savings to meet their own priorities — like putting a downpayment on a new home or building an addition on an existing home.

Now, we must build on this progress and extend prosperity to every community in America. My six-point plan to strengthen the economy focuses on: reforming the legal system to prevent frivolous lawsuits that increase the cost of doing business; promoting domestic energy development and energy security; streamlining government regulations, especially for small businesses; pursuing free and fair trade agreements that open new markets for American workers; making tax relief for families and small businesses permanent; and expanding access to affordable health care. Taken together, these policies will lower the costs of doing business, which will lead to rising salaries for workers, thereby allowing Americans to keep more of their hard-earned money.

Building News Coast To Coast

State Examines Contractor Crunch

Some trade organizations in Florida are asking officials to ease licensing requirements for contractors in order to allow property owners to hire out-of-state contractors to help with rebuilding efforts in the wake of Hurricane Charley. However, both the Department of Business and Professional Regulation and the office of Gov. Jeb Bush say they do not necessarily have the authority to change current regulations barring contractors with out-of-state licenses. Florida's contractor licensing system can be confusing for consumers; there are two general types of licenses — occupational and contracting — and many more types of specific contracting licenses. President and CEO of the Central Florida Chapter of the Associated Builders and Contractors Mark Wylie explains that "an occupational license only means a fee has been paid to a government for the right to do business," while a contracting license shows that one has passed tests in order to gain approval. Licenses are currently distributed both by the state and individual counties, further confusing the process, but county licensing will be eliminated as of Nov. 1. Wylie suggests that in order to avoid confusion and fraud, consumers should ask to see a contractor's current license and verify it either by calling a number or checking online listings. Wylie also urges consumers to get a written estimate before work commences, check the contractor's proof of workers' compensation and make sure all suppliers and subcontractors are compensated before making the final payment.
Orlando Sentinel (08/25/04) Snyder, Jack: www.orlandosentinel.com

Americans Hang on to Bigger, Better Lifestyles

The Census Bureau has released a new survey documenting that Americans continue to buy ever-larger homes, even though incomes remain stagnant and housing prices are escalating. According to the American Community Survey — an annual poll of 800,000 households — 46% of all dwellings have six or more rooms and more than 15% have eight or more rooms. The Census Bureau found that more than 22% of home owners contributed at least 35% of their income to housing last year, compared with 19% in 2000. What is more, the percentage of home owners who live in houses valued at more than $500,000 has doubled since 2000 to more than 6%; while one in eight homeowners owns a residence valued between $300,000 and $499,999. The percentage of Americans who live in homes that cost less than $150,000, by contrast, has fallen from nearly 64% in 2000 to about 50%.
USA Today (08/27/04) P. 4A; El Nasser, Haya; Overberg, Paul: www.usatoday.com

Environmentally Conscious Developers Try to Turn Green Into Platinum

Advocates of green-building design were pleased when the Bank of America and the Durst Organization broke ground earlier in the month on One Bryant Park in Manhattan. The 52-story skyscraper's goal is to be the first high-rise office structure to achieve the United States Green Building Council's "platinum" rating — the best score a building can receive under a four-tier rating system developed by the nonprofit industry group. The project is focusing increased attention on the rapidly growing influence of the Leadership in Energy and Environmental Design (LEED) green building standards. Haworth Inc. President and CEO Robert B. Krasa states, "You can't overestimate the impact of the LEED standard in taking a lot of the emotive opposition to green building away. Now, we have a credible way of saying what green means." Of course, platinum-rated LEED structures are significantly more costly to erect than a typical commercial or institutional building of the same size. In addition to being constructed largely with recycled or recyclable materials, One Bryant Park is designed to capture and reuse all rainwater and wastewater. In addition, it will make extensive use of lighting and dimming systems and features an air system that ventilates the building by delivering air from an under-floor system rather than overhead ducts.
New York Times (08/25/04) P. C5; Feder, Barnaby J.: www.nytimes.com

La Raza: Hispanics Fare Badly in Housing

A new report by the National Council of La Raza concedes that more Hispanic families became home owners during the 1990s but stresses that housing affordability and overcrowded conditions in poor-quality dwellings remain problems for Latinos. When shopping for homes, Latinos also continue to face "rising levels of discrimination" and suffer from a lack of relationships with financial institutions. The Hispanic civil rights organization is calling on public agencies as well as private industry to focus more attention on what it says is an "affordable housing crisis." Phoenix Mayor Phil Gordon and the non-profit Stardust Foundation have agreed to study the issue of low-income housing, expand the pool of first-time home buyers and develop strategies to make housing more affordable.
Azcentral.com (08/25/04) Wingett, Yvonne: www.azcentral.com

Mold Liability Nags Restorers of Wet Houses

Increasing insurance claims and litigation related to water and mold damage in homes have made water-damage restorers more aware of the risks involved in their business and have prompted many to seek professional training in order to improve their restoration methods. The Insurance Information Institute reports that mold-related claims generated a record $3 billion in payouts for insurance companies in 2002, compared with $1.3 billion the year before. With both insurance premiums and mold-related liability on the rise, many restoration experts and insurers are signing their employees up for training programs that teach scientific techniques to accelerate the drying process and reduce the risk of mold damage. "If you can dry something reasonably rapidly you won't have any mold problems," says Martin L. King of the Association of Specialists in Cleaning and Restoration. Drying techniques vary, but many training programs are adopting the scientific approach pioneered by Chuck Dewald and his Tennessee-based Vortex Drying School, which was one of the first in the nation to use a mock home for hands-on training.
Wall Street Journal (08/24/04) P. B1; Maher, Kris: www.wsj.com

Futuristic Concept Home Stresses Flexibility

HUD's Partnership for Advancing Technology in Housing (PATH) has designed a so-called concept house that focuses on flexibility. By separating the electrical, plumbing, communication, and heating and air-conditioning systems, home owners will be able to move walls and install new technologies as needed. The use of standard-size, factory-built parts will enable builders to erect these futuristic homes in as little as 20 days. Meanwhile, replacing traditional electrical wires with wireless systems or electro-textile fabric wall coverings will enhance flexibility. The PATH design will allow home owners to save money on additions and upgrades and rearrange the residence to help them age in place. Moreover, owners should reap substantial resale profits, considering that buyers will be able to adapt the home to fit their needs. Though a builder is still needed to make the design become a reality, PATH expects the structure to be built by 2010.
Chicago Tribune (08/22/04) P. 3N; Sichelman, Lew: www.chicagotribune.com

New Florida Codes Bring Mixed Success

Hurricane Charley, a Category 4 storm with winds of around 145 mph, destroyed utilities, homes and buildings — even some that were built under codes implemented after 1992's Hurricane Andrew. Twenty-five of Florida's counties were declared disaster zones, and damages to insured structures may hit $14 billion. After Andrew, Florida reevaluated its building code and required stronger mobile homes, for instance, but requiring them to withstand 110 mph winds did little good with Charley. Simpson StrongTie engineers say that materials, construction quality and construction techniques are being investigated throughout the damage zone to be sure that the code is being met, and research engineer Randy Shackelford says he is especially looking for evidence of damage from lateral loads on walls and for window protection. Institute for Building and Home Safety Vice President Tim Reinhold says that the code being considered has nationwide standards in mind, yet Florida experiences stronger, more sustained winds than most other areas.
ENR (08/23/04) Chastain, Bill; Sawyer, Tom; Rubin, Debra; et al: www.enr.com

Co-Ops Catch on With Minnesota Seniors

Co-op apartments are in high demand among Minnesota's senior population; and Senior Cooperative Foundation CEO Terry McKinley says they are going up so fast, it is impossible to keep count. Co-ops account for just 5% of the nation's community associations, according to Greg Petterson, president of the Community Associations Institute's Minnesota chapter; and over 50% are located in Minnesota. Many seniors prefer co-ops because they pay only a monthly fee that goes toward the building's operating costs, taxes and debt service, rather than having to borrow money to purchase a particular unit. Residents enjoy social activities and shared dinners, and the units usually are  indistinguishable from condominiums.
Associated Press (08/20/04): www.ap.org

Prefab Becomes Ab Fab

More and more architects are answering the call for attractive homes at reasonable prices by designing prefabricated dwellings, or houses that are assembled from factory-built pieces. The market finally has broken free from its double-wide, boxy image and now is generating much favorable attention. San Francisco-based architect Michelle Kaufmann, for instance, has produced the environmentally friendly Glidehouse. The structure's panels come with built-in plumbing, wiring, and storage as well as concrete counters, bamboo floors, non-toxic paint and tankless water heaters, among other features. Meanwhile, Target now offers $10,000-$26,000 prefab kits from designer Michael Graves that can be turned into offices, guest rooms and other living spaces. Additionally, Valencia-based designer Michael Jantzen has developed M-vironments, insulated panels hung from steel cubes that can be assembled and reassembled into a variety of structures. Though prefab is in high demand among California buyers, experts says soaring land prices limit their cost savings.
Los Angeles Times (08/19/04) P. F1; Biederman, Patricia Ward: www.latimes.com

ZigBee Takes It Easy

ZigBee networking technology is soon to be included in professional installation kits for light switches, thermostats, security controls and other simple electronic controls in the home. The ZigBee Alliance plans to build off a modest base on the home-automation market before it launches into grander pervasive technology schemes, such as city-wide biohazard monitoring. ZigBee is well-suited for home controls because it quickly sends small packets of information, such as keyboard inputs or on/off switching, over distances of up to 20 feet between nodes. Moreover, ZigBee data piggybacks on intermediary nodes and is only acted upon by the specified recipient device, allowing data to travel the entire network as long as there are available pathways. ZigBee batteries can last for years because the devices only turn on for the moment or so when they are needed, and the non-proprietary technology makes use of the same unlicensed 900 MHz and 2.4 GHz frequencies already in use for cordless phones, for example. ZigBee promises new home automation capabilities for home owners, possibly as early as 2006, while home builders like the technology because it offers a wireless alternative to costly cable installation. ZigBee-enabled light switches, for example, can be moved without leaving a hole in the wall. Further out, ZigBee, which can be used in mesh networks of up to 65,000 nodes, promises new capabilities for building managers to monitor and even control systems.
Technology Review (08/19/04) Brown, Eric S.: www.technologyreview.com

Living Well

Computer makers and research groups are working to create tomorrow's digital home environments, tying together many of the technologies and components that are already available today. The Swiss government's FutureLife project is working out possible kinks and using a real-life Swiss family home as a test environment, which has meant at least one evening spent in below-freezing temperatures for the residents who could not get the door's biometric sensor to read their fingerprints. The technology was taken from the banking industry where it is usually deployed in temperature-stable environments, explains FutureLife's Beat Schertenleib. But the FutureLife test family has spoken well of other benefits, including automatic lawn watering and text-message alerts when a digital drop box receives post-delivered packages. Other European research groups are working on similar projects, including the inHaus and HomeLab projects in Germany. Fraunhofen Institute's inHaus project makes use of components and devices already available commercially, ranging from energy conservation technology to Internet-controlled devices. One of the main focuses for the inHaus effort involves integrating these technologies and creating simple, easy-to-use interfaces. Sony and Philips are both working on wirelessly networked home entertainment schemes that could form the foundation for more pervasive home networks. These systems rely heavily on computer technology, including the WLAN standard and network servers that archive, serve up and route digital content to different devices. Both companies are sticking to non-proprietary standards in order to appeal to the widest number of users.
Taipei Times (08/18/04) P. 15: www.taipeitimes.com

Tools to Help You Stay in Touch, Build Relationships

Productivity consultant Terry Brock underscores the importance of cultivating new business relationships and keeping in contact with existing clients. EGrabber's AddressGrabber and ListGrabber tools make it easy to copy contact information into Outlook, ACT!, Goldmine, Maximizer and other databases. AddressGrabber Business — priced at $129.95 — lets users highlight contact information within e-mail messages and Web sites and transfer it to a database via Optical Character Recognition technology. Once the information is stored in the database, users can easily create letters and e-mails and send them to the appropriate contacts. With ListGrabber, users can capture lists of names and other information located in Microsoft Word or another such program and enter them into a database. The software retails for $249.95.
Washington Business Journal (08/23/04) Brock, Terry: www.washington.bizjournals.com

New Apartments and Condos an Unlikely Source of Classroom Crowding, Study Finds

No-growthers who oppose new multifamily housing in their neighborhoods because it will cause overcrowding in their school systems can put those fears to rest following a new study from NAHB.

According to an analysis of recent American Housing Survey data from the U.S. Census Bureau, the number of school-age children who live in multifamily housing is almost half that of single-family households.

There are an average of 62 school-age children for every 100 households living in single-family homes, according to the Census data, but only about 37 for the same number of multifamily households.

“The idea that multifamily housing puts an undue burden on local schools is basically a myth,” said NAHB President Bobby Rayburn. “It is not borne out by the facts, but, unfortunately, it is a myth that has led to a lot of opposition to apartment and condo development in communities across the country.”

“Education is the biggest item in most local government budgets, so it’s reasonable that an influx of students would be a concern,” said NAHB Chief Economist David Seiders. “But the data show that the impact of multifamily construction on enrollment is quite limited.”

NAHB’s analysis also found that the number of school-age children is even lower for larger, higher-density apartment buildings. In buildings with more than 20 apartments or condos, there are only about 26 school-age children per 100 households.

That number is even lower for people who recently bought or rented. And in buildings with only one- and two-bedroom apartments or condos, the number drops even further, with condo residents reporting fewer children than renters.

The fewest school-age children, the study found, are in recently purchased condominium homes in buildings with more than 20 units — about 10 children for every 100 of those households.

“This data makes a lot of sense when you also look at the demographic trends of renters and condo buyers,” said Seiders. “Multifamily households are much more likely to serve either younger households or singles or couples, or ‘empty-nesters’ whose children are already grown.”

Seiders added that this data should make it easier for local governments and planning boards to consider a diverse and affordable housing stock — one that includes apartments and condos — without worrying about overstressing their local schools.

For more information about this new research, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.

Housing Snapshot

Mortgage interest rates edged up just a tad last week as the markets continued trying to make sense of a mixed batch of economic signals. Oil prices shifted downward, and that was a good thing, although they could be up again this week. Also encouraging was a rise in consumer spending in July. Growth for the second quarter was revised downward to 2.8%, down from 4.5% in the first quarter, with a widening trade deficit largely to blame. Predictions for growth in the current quarter are generally in the 3%-4% range. Federal Reserve Board Chairman Alan Greenspan was off in Jackson, WY, at the end of last week to consider how to keep the Social Security system afloat as the baby boom generation moves into its retirement years. The nation's population over 65 will double by 2035, and Greenspan recommends raising the qualifying age for full Social Security benefits. Lumber prices were up only marginally last week, but remained high. The cost of framing lumber was unchanged at $473 per 1,000 board feet, up from $368 a year earlier, according to Random Lengths. The price of 15/32-inch 3-ply southern (west-east) exterior sheathing climbed $5 to $440 per 1,000 square feet, and oriented strand board advanced $10 to $405.

Mortgage Interest Rates

30 Year Fixed Rate: 5.82\%
15 Year Fixed Rate: 5.21\%
1 Year ARM: 4.05\%

Housing Starts: Jul. 2004

Total: 1.978 million\%
Single Family: 1.651 million\%
Multi Family: 327,000\%

New Home Sales: Jul. 2004 *

1.134 million

Existing Home Sales: Jul. 2004 *

6.72 million

* Seasonally Adjusted Annual Rate

Please Take the Time to Help Us Solve the GLI Crisis

Fellow builders, it’s time for action.

It’s time for us to fill out our general liability insurance (GLI) surveys and send in our consent letters. It’s time for each of us to do our part to help solve the home building industry’s GLI crisis.

Recent surveys show that GLI is our members’ number one concern. It’s easy to see why. GLI premiums have risen 10-fold in some areas. Many policies have so many exclusions that the coverage is ineffective. And in some states, it’s almost impossible to get any GLI coverage at all.

NAHB members have made it clear that they want the federation to do something to solve this GLI problem. In response, NAHB has entered into a strategic partnership with Marsh, the insurance and consulting firm, to gather loss information about the residential construction industry, to analyze that data to better understand the industry’s risk management needs and to use that analysis to develop new, cost-effective GLI products.

Last month NAHB and Marsh sent an eight-page mail piece to 55,000 builder, remodeler and trade contractor members. The mailer included a survey, a model consent letter giving insurance carriers permission to share a builder’s loss information with Marsh, and information about NAHB’s GLI initiative. If you didn’t receive the mailing, you can find the survey, model consent letter and other information at www.nahb.org/gli.

It seems to me that anyone who recognizes that our industry is experiencing a GLI crisis ought to take half an hour to fill out the survey and send in the consent letter.

If you need help with the survey, ask your insurance agent for assistance. You can find additional information about this initiative at www.nahb.org/gli. If you want to speak to someone at NAHB, please contact Clayton Traylor at 800-368-5242 x8490 or Brett Diggs at x8453. If you need a copy of the survey and the model consent letter, you can find them on NAHB’s web site or you can call Blake Smith at x8583.

If GLI costs are eating into your profits, then please participate in this effort. If you’re “flying solo” — doing business without any GLI coverage — then please participate in this effort. If you’re worried about how much your premiums will rise the next time you have to renew your coverage, then please participate in this effort.

Please don’t put this off. For many builders, we’re talking about thousands of dollars per year. We’re talking about the stability of your business. We’re talking about the long-term strength of our industry.

Take an hour and make a difference for your business and the home building industry.

It’s time for action.

Association Health Plan Legislation Needed to Stem Rising Number of Uninsured

Following release of a new government report showing that the number of Americans without health insurance continues to climb, NAHB last week called on the Congress to move rapidly to enact association health plan legislation to help relieve the nation’s health care crisis.

“Clearly, association health plans represent a sound strategy to help alleviate the rising number of uninsured and soaring healthcare costs over the past decade that have driven many small businesses out of the health insurance market entirely,” said NAHB President Bobby Rayburn.

According to the U.S. Census Bureau, the number of Americans who currently have no health coverage has risen from 43.6 million last year to 45 million, representing 15.6% of the population. Approximately 60% of the uninsured are in families headed by an employee of a small business.

To correct this situation, Senate bill S. 545 — sponsored by Senators Olympia Snowe (R-ME), Robert Byrd (D-WV), Christopher Bond (R-MO), Norm Coleman (R-MN), Elizabeth Dole (R-NC), Kay Bailey Hutchison (R-TX), John McCain (R-AZ), Jim Talent (R-MO) and Arlen Specter (R-PA) — would allow small business owners to band together across state lines through membership in a bona fide local, state or national trade association to leverage their size, just as large businesses and unions do, to negotiate lower insurance costs and more options.

Similar legislation was approved earlier this year by the House, and association health plans have the strong backing of the Bush Administration and more than 160 trade associations.

“Hopefully, the new Census study will provide the impetus for the Senate to act on S. 545 this fall in order to strengthen America’s health care system and enable more small businesses to provide their employees access to quality, cost-effective health care coverage,” said Rayburn.

To read the Senate bill, click here and enter S. 545 in the box at the upper left.

For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.

New Home Sales Cool in July, But Remain Above Last Year’s Record Pace

Coming off a surge in home buying during this year’s second quarter, sales of new single-family houses declined 6.4% in July to a seasonally adjusted annual pace of 1.134 million units, the Commerce Department reported last week, but remained 15% above the sales level of a year earlier and 4.4% higher than the average for record-setting 2003.

“Builders across the country are still very upbeat about the single-family housing market,” said NAHB President Bobby Rayburn. He noted that last month’s NAHB-Wells Fargo Housing Market Index, which is based on the association’s monthly surveys of single-family home builders, was the highest it has been this year and “indicated that all the fundamentals are in place for strong months ahead.”

“Sales activity raced ahead after mortgage rates hit bottom in March and large numbers of fence sitters jumped into the market to beat widely anticipated mortgage rate increases,” said NAHB Chief Economist David Seiders. “We knew some payback for that additional demand was in the cards.”

“Market fundamentals still are in place for single-family housing,” Seiders said. “The demographic foundations are solid, overall economic conditions have improved, house values continue to rise and mortgage rates have receded following the second-quarter bounce. We are certainly on track for another home sales record in 2004.”

The inventory of unsold new homes rose by 4.2% to 393,000 units in July, a 4.3-month supply, but the median amount of time that a completed unit was on the market fell to a record low of 3.7 months.

Existing Home Sales Slip in July, But Pace Was Third Highest Ever

The sales of existing single-family homes slipped 2.9% in July to a seasonally adjusted annual rate of 6.72 million, the National Association of Realtors® (NAR) reported last week.

Despite the decline, existing home sales were at their third best level ever last month and 8.6% ahead of their performance a year earlier.

“Prior to this year, the July sales pace would have been a real eye-popper,” said David Lereah, the association’s chief economist. “The fact is — it remains so. The present level of home sales activity is considerably above last year’s record, and the new benchmark we’ll see in 2004 is a significant contributor to overall U.S. economic growth.”

Modest declines in mortgage interest rates in July and August “will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead,” Lereah said.

Voicing optimism for continued strength in the housing market, NAR President Walt McDonald added that favorable financing is only part of the picture. “The fundamental demand from entry level buyers, dominated by the second largest generation in U.S. history — the children of the baby boom — will drive home sales over the next 10 years because this generation is entering the prime years in which people typically but their first home.”

Inventory levels of existing homes on the market in July remained unchanged from the prior month. The 2.4 million homes listed for sale represented a 4.3-month supply.

Sales were up 0.4% in the South and down 1.4% in the Northeast, 4.8% in the Midwest and 6.6% in the West.

Register Today 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 and to register.

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
Economic growth apparently is firming up following the mid-year ‘soft patch’…

GDP growth slowed substantially in the second quarter and faltered badly in June as consumer spending and a few other sectors slipped into the red zone. Indeed, the composite index of Leading Economic Indicators (LEI) turned down in June after a long run on the upside, prompting serious questions about the sustainability of the economic expansion.

The LEI registered another decline in July. However, the Coincident Index firmed up a bit and a number of key economic indicators turned in decidedly positive performances for the month — including unemployment insurance claims, housing starts, industrial production, retail sales, light vehicle sales and durable goods orders.

Everything considered, Gross Domestic Product (GDP) growth appears to be heading toward 4% in the third quarter, and NAHB’s forecast portrays growth close to that pace over the balance of this year and in 2005. That pattern, if realized, should generate decent growth in payroll employment following the deeply disappointing numbers for both June and July.

Core inflation is receding despite surging energy costs, and that’s good news for housing …

Measures of core inflation (excluding prices of food and energy) moved up markedly during the early months of this year, on the heels of the deflation threat of late 2003. This quick transition changed the economic landscape quite a bit, prompting an upswing in long-term interest rates as well as renewed deterioration in the stock market. The inflation issue also kicked the Fed off the dime by June 30, and we’ve already seen a half-point increase in the federal funds rate target.

While announcing the recent increases in short-term rates, the Fed suggested that some of the first-half upswing in inflation involved "transitory factors." Fortunately, recent price data support that view, with positive implications for long-term interest rates and possibly for Fed behavior down the line. Indeed, 10-year Treasury yields and long-term mortgage rates have declined by about 25 basis points since early August.

On the data front, the core Consumer Price Index (CPI) advanced at an annual rate of only 1.2% in both June and July, following much larger increases during the January-May period. The July reading was up 1.8% on a year-over-year basis, still within the Fed’s 1-2% "tolerance zone" but definitely on the high side. However, an alternative "chain-core" CPI, allowing for floating rather than fixed weights (a better practice), showed only a 1.3% year-over-year increase in July. That presumably will broaden the Fed’s comfort zone to some degree.

The Fed will continue the march back to monetary neutrality despite softer core inflation …

The increase in short-term rates at the Aug. 10 Federal Open Market Committee (FOMC) meeting simply brought the real (inflation adjusted) federal funds rate up to zero, and that’s much too "accommodative" for the Fed’s taste. The central bank clearly wants to work monetary policy back toward a neutral position as the economic expansion soaks up remaining slack in resource markets and ultimately threatens to generate a serious inflation problem.

"Neutrality" probably involves a real federal funds rate around 2.25%, and that translates into a nominal rate of about 4.25% under most inflation projections. The Fed probably will strive to achieve monetary neutrality by 2006, at the latest, and the flow of economic information will affect the actual path of adjustment.

Our current forecast pegs the federal funds rate at 2% by the end of 2004, 4% at the end of 2005, and 4.25% by mid-2006. But the timing of the adjustment could be affected by events outside the control of our policymakers, including shocks to world oil markets.

Energy prices remain a wild card in the economic outlook …

Oil prices recently touched $50 per barrel, incorporating an estimated $15 premium for uncertainties related to the Middle East, Russia and Venezuela. Oil prices subsequently receded to some degree, but the fate of energy supply and price remains a major question mark in the economic outlook.

The U.S. economy is much less vulnerable to oil price shocks than in the 1970s and early 1980s, but high energy costs still act like a tax on consumers and most businesses. We currently assume that the price for crude oil (West Texas Intermediate) will recede to about $35 per barrel by the end of this year and to around $30 by the end of 2005. But nobody really knows!

Fortunately, the Fed can (and will) act to offset negative economic effects of higher energy costs with easier monetary policy. Thus, the path to monetary neutrality could turn out to be a rather tortuous trek.

The housing market still is performing well despite some mixed signals in July …

The single-family housing market has been the brightest star in the economic skies for several years. Both home sales and single-family housing starts soared to new records in the second quarter, house prices continued to move up aggressively and the nation’s homeownership rate soared to a new record (69.2%) in the process.

Single-family housing starts and permits were quite strong in July, as both exceeded their record second-quarter averages. But July sales of existing homes (based on closings) were a bit off their second-quarter pace, and new-home sales (based on contract signings) receded by more than 7%. This setback in sales, combined with the robust starts/permits numbers for July, resulted in a significant increase in the number of new homes for sale as well as in the month’s supply (inventory/sales ratio).

The unsold inventory issue actually doesn’t amount to much at this time since most of the increase in unsold units reflected units that were permitted but not yet started. The real issue relates to the strength of final demand for homes now and in the future.

Some cooling of home sales from the robust second-quarter pace was virtually inevitable. That surge clearly was fueled by a lot of "fence sitters" who jumped into the market after mortgage rates hit bottom in March and speculation about rising rates was rampant in the financial markets as well as in the real estate community. This process pulled demand ahead and requires some payback in subsequent months.

Surveys of both single-family builders (NAHB) and home mortgage lenders (Mortgage Bankers Association) suggest that home sales were well maintained in August, supported by the retreat of mortgage rates from the second-quarter bounce. Thus, it’s reasonable to expect housing starts to be well maintained in coming months, and housing should continue to provide firm support to the economy as the November elections come into focus.

The economy promises to be a positive for President Bush, and housing is playing a key role …

Prominent models that attempt to estimate the impact of economic performance on the outcome of presidential elections in the U.S. show strong positives for President Bush this November (economic projections in the models are similar to NAHB’s). Indeed, a model developed by Macroeconomic Advisers, LLC (MA) predicts that Bush will capture 60% of the popular vote. The MA model has correctly predicted the outcome of every presidential election since 1952.

The MA model gives some edge to President Bush simply because he is an incumbent (1.9% of the popular vote). With respect to economic variables, Bush gets strong support from low inflation but he is docked for slow growth in real disposable personal income. Bush gets very strong support (1.8 percentage points) from a strong pace of housing starts projected for the election quarter.

In the MA model, housing starts turn out to be a good summary measure of how voters view the economy — much better than measures of consumer confidence. According to MA analysts: "In contrast to confidence measures which are based on surveys, housing starts are hard economic data that reflect significant economic decisions of home builders and home buyers based on their sense of well being and confidence in the future."

It’s important to note, of course, that models grounded on economic factors know nothing about things like the U.S. involvement in Iraq or domestic terrorism. But history shows that the overall economy and the housing market are powerful determinants in U.S. presidential elections.

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 Aug. 25 edition. To subcribe to “Eye on the Economy,” click here.

Missouri County Aims at Increasing Supply of Housing for Workers

Business and community leaders in St. Charles County, MO — a rapidly growing suburb of St. Louis — are leading efforts to alleviate a well-documented shortage of workforce and affordable housing in their area, according to Paul Dribin, executive director of the Gateway Affordable Housing Management Association.

Dribin’s company, Dribin Consulting, was commissioned in 2001 by the county executive to determine whether a local housing authority was needed. In his research he found that housing was virtually unavailable in St. Charles for families with incomes in the $30,000 range and that rental units were in extremely short supply at all price levels.

At the top of the list of what was causing the county’s high housing prices were overly restrictive land use requirements and building codes and other regulatory barriers.

“Ironically, the reason most people moved to St. Charles County was becoming its problem,” said Dribin. “Originally, people moved there to purchase housing that was more affordable than comparable housing closer to the city. But as land diminished and demand grew, housing became scarcer and less affordable.”

A second study concentrating on how the county could address its housing problem without having to use large amounts of new local funding or create new governmental organizations recommended taking the following steps:

• Create a new mixed-use zoning category
• Allow for smaller minimum lot sizes of 5,000 square feet
• Allow clustered development to save land
• Allow “properly constructed and aesthetically compatible” manufactured housing
• Implement quality-based development standards
• Allow homes with narrow lot lines
• Encourage mixed-use development that includes single-family detached homes, condominiums, apartments and commercial development
• Build or rehabilitate apartments utilizing Low Income Housing Tax Credits in mixed-income development
• Encourage employer assisted housing
• Preserve the existing housing stock, including providing incentives for its rehabilitation
• Reform the permitting and approval process
• Create a workforce housing parade of homes and design competition

A new non-profit, Home St. Charles, is being organized under the local Economic Development Council to achieve several objectives based on the recommendations to the county.

Priorities currently include passage of legislation allowing a minimum lot size of 7,500 square feet; receipt of $350,000 of annual HOME funds from the St. Louis County Consortium for downpayment assistance; working with major developers and the local home builders association to hold a workforce parade of homes; and working with several employers to implement employer assisted housing programs that will match HOME funds for their employees.

Dribin said that a number of lessons have been learned as the county has attempted to undertake a workforce housing program:

• Understand your community. Do not initially attempt programs that are significantly beyond the comfort level of the community.
• Build alliances. Don’t look only to the “usual suspects,” but expand your alliances to other interested groups. In the case of St. Charles County, the business community has been the driving force.
• Challenge standard assumptions about what can be done.
• Start small to maximize the initial chances for success. Build upon those successes.
• Have easily measurable tasks.
• Be inclusive.
• Listen.
• Be prepared to change your plans.
• Maximize market-based solutions. Communities are far more comfortable with this than with government-imposed solutions.
• Give credit to others.

NAHB and Fannie Mae will be holding “Close to Home: A Symposium on Workforce Housing” in the National Housing Center in Washington, D.C. on Dec. 8. The symposium will feature new research on the housing needs of America’s working families and will include panels that will address defining the problem, overcoming barriers, workforce housing success stories and partnerships for solutions.

For more information on the symposium, e-mail Blake Smith or call him at 800-368-5242 x8583 or contact Kym Kilbourne, x8447.

Tech Talk: The Time Is Right for Buying a Computer

The next in a series of Tech Talks for builders.

With the new school year upon us, it’s a good time to consider buying a new computer if you’re in the market — even if you are not a student. Retailers often run sales and specials in response to the greater demand. But where should you start and what should you look for?

How Fast?

The first thing to consider is the difference in processors. (A processor is the part of a computer that processes data; some processors are faster than others.) If you are looking for a good machine for word processing, e-mailing and surfing the Internet, an Intel® Celeron® or AMD Athlon™ 4 is a good choice. If you need more horsepower for video or heavy photo editing, think about getting an Intel® Pentium® 4 or AMD Athlon™ 64.

How Much Memory?

Next comes memory and hard drive space. In most cases, 512 megabytes (MB) of memory should be enough. A lot of numbers are used to indicate memory specifications: PC-2100, PC-2700 and PC-3200. The numbers correspond to the speed of the Front Side Bus (which connects the processor to the main memory). Do not worry too much about that. PC-2700 is pretty much the norm and is good for most applications.

When it comes to hard drive space, remember that the operating system takes room, as does a productivity suite (Microsoft® Office, etc.). Other programs or files (MP3s, photos, videos, etc.) also take up space. Most entry-level computers come with 40 gigabytes (GB) of hard drive space, and that is probably not enough. Look for at least 80GB for normal usage and 120-160GB if you plan to do a lot of photo or video work.

What About Sound Cards?

Most entry-level computers come with sound, video and network integrated into the motherboard. That means that the computer is sharing the main memory to run all of these. So if it comes with 512 MB of random-access memory (RAM) and the video card takes 128 MB, there is only 384 MB left for everything else. It may not seem like much, but when you start opening a few programs together, you will notice a significant slowdown. Look for a computer that at least has a separate video card. The sound and network connection should not affect performance too greatly.

And Programs?

The last thing to consider is the programs that come with new computers. Most do not come with Microsoft® Office. You will need to purchase it separately. Microsoft® does offer a Student/Teacher package for a reduced price. It contains all of the fully functional Office programs. The only catch is that you must be a student or teacher to purchase it. Check out the specials that stores are running. Sometimes, you can get the Student/Teacher version of Office for free with the purchase of a new computer.

Prices Are Good

You can buy a good, well-rounded computer plus a monitor and printer for about $1,000 (after mail-in rebates). If you do a little bit of research and shop the ads before you go out, you should be able to find exactly what you are looking for and not have to go to a dozen different places.

Brett Jamen is Director of Information Technology for the Home Builders Association of Greater Dallas.

This article originally appeared in the July 12, 2004 edition of The Home Builder, published by the Home Builders Association of Greater Dallas.

Note: This article is solely for informational purposes. Reference herein to any specific commercial products, process, or service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, warranty or guaranty by the National Association of Home Builders. The views and opinions of the author expressed herein do not necessarily state or reflect those of NAHB. NAHB and the author expressly disclaim any responsibility for any damages arising from the use, application or reliance on any information contained in this article. We recommend that users exercise their own skill and care with respect to its use.

Earlier Articles in This Series

• To read, “Know Your Technology Needs Before You Invest,” Part 1 of this series, published April 14, click here.
• To read, “Strategic Planning Software Can Help Focus Your Business Model,” Part 2 of this series, published April 21, click here. 
• To read, “Does Your Planning Software Match Your Project's Sophistication?” Part 3 of this series, published May 5, click here.
• To read, “Don't Put the CAD Before Your Product,” Part 4 of this series, published May 26, click here.
• To read, “Manage Prospects and Buyers More Efficiently With Technology,” Part 5 of this series, published June 9, click here.
• To read, "Automate Your Selection and Change Order Processes,” Part 6 of this series, published on June 23, click here.
• To read, “Scheduling Software Can Improve Your Cycle Time,” Part 7 of this series, published on July 7, click here.
• To read, "An Effective Purchase Order System Enhances Efficiency," Part 8 of this series, published on July 21, click here.
• To read, "Don’t Fix New Software If It Isn’t Broken," Part 9 of this series, published on November 24, click here.
• To read, "Beware Software Consultants Who Are Salespeople in Disguise," Part 10 of this series, published on December 8, click here.
• To read, "Eight Ways to Drive Internet Leads and Sales," Part 11 of this series, published on January 12, click here.
• To read, "Excessive Web Site Graphics Can Stunt Sales," Part 12 of this series, published on February 2, click here.
• To read, "Don’t Let Your Comfort Level Dictate Future Tech Changes ," Part 13 of this series, published on May 17, click here.
• To read, "Tech Talk: Process Integration Levels Your Playing Field," Part 14 of this series, published on Aug. 9, 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 on Business Management

The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Search keywords: “Introduction to Business Management.”

Builders in Deer Creek Converting From Modular Building to Modular Production

The owners of Homeway Homes — Brian, Rich and Ted Schieler — have announced that they are converting their father’s nearly 40-year-old business from a modular home builder to a modular production company.

The brothers, who are members of the Building Systems Councils, converted their business seven years ago from stick-building to modular in an effort to gain a competitive edge. Since that time, they have been able to increase their residential construction by a whopping 1,000%.

Becoming a modular producer, “allows us to control our own destiny,” said general manager Brian Schieler. “We will be able to ensure our homes’ quality and cost from start to finish. We think this is a natural evolution of our business and it reflects the popularity of the modular housing industry.”

Homeway Homes began building modular homes as a way to reduce turnaround time and building costs. The company completed 10 modular homes in 1997, its first year in the new business. A year later, it finished 20 homes and last year it built 100 within a 70 mile radius of its headquarters in Deer Creek, IL.

Last month, with a grant from the Illinois Department of Commerce and Economic Opportunity, Homeway Homes broke ground on a 60,000-square-foot modular production facility. When complete next April, the plant will employ 50 people and construct ranch homes, Cape Cods and several types of two-story homes with numerous customization options.

By the plant’s fifth year, Schieler estimates it will employ 150 people and produce 400 homes annually. Using the company’s own construction force and a network of builders, Homeway Homes will service Illinois and the surrounding states.

While there is no set roadmap for converting from builder to producer, Schieler and Homeway Homes took advantage of council membership by attending the Building Systems Councils’ annual plant tour in May. This networking and education event tours modular and panelized production facilities in different parts of the country.

During the plant tour and on several private tours, Schieler said that he was able to observe and learn the intricacies of modular production and apply that knowledge toward his own company’s business plan.

For more information about building systems, e-mail Eric Fulton at NAHB, or call him at 800-368-5242 x8577.

Concrete Council Member Helps Rebuild San Diego Home Destroyed by Fire

The Insulating Concrete Form Association (ICFA), a member of the Concrete Home Building Council (CHBC), will begin rebuilding the home of 80-year-old Rosemarie Michelson, of San Diego. Her home was destroyed in the California wildfires of last November.

Michelson's home is being rebuilt with assistance from the San Diego Chapter of Habitat for Humanity and ICFA. Because of the fire, Michelson requested that her new home be built of fire-resistant materials, including concrete. ICFA member companies assisting in the project will provide materials, labor and expertise to construct the walls of the Michelson’s home.

The Michelson home will be built during the ICFA Fall Meeting and Expo, Sept. 13-15, also in San Diego. IFCA members plan to use Insulating Concrete Forms (ICF), one of the fastest growing methods of construction in the United States, to build the home's walls. ICFs are polystyrene foam forms shaped or molded into blocks and panels. Builders use ICFs to create walls, inserting reinforcing steel and ready mixed concrete to fill the interior space between the two layers of foam.

Construction of the ICF walls will begin on Tuesday, Sept. 7. A concrete pumping demonstration will be open to the public beginning at 1:00 p.m. Friday, Sept. 10. The home is located at 775 Dehesa Mountain Lane in Crest, CA.

For more information, e-mail Dawn Faull, program manager, NAHB Concrete Home Building Council, or call her at 800-368-5242 x8362.

Awards to Recognize Best Sustainable Practice

Professionals who are making exceptional contributions to sustainability will be recognized this fall by the Sustainable Building Industry Council, a non-profit trade association based in Washington, D.C. that is committed to advancing the design, affordability, energy performance and environmental soundness of the nation’s buildings.

The council’s “Best Sustainable Practice Award” goes to council members who demonstrate excellence in a wide variety of areas, including sustainable policy initiatives, innovations in the design and construction process, development of sustainable design curriculum, and innovations in products and technology.

The awards will be presented on Oct. 13 in conjunction with the organization’s annual forum, which this year will focus on “Cents and Sustainability: The Ripple Effects of Integrated Design.” The conference will examine what constitutes affordable design from several perspectives, including residential.

The jurors for the award are:

• Alex Wilson, BuildingGreen, Inc., which publishes resources about environmentally responsible design and construction, including the monthly Environmental Building News.
• Greg Crawford, executive director of Cool Metal Roofing Coalition, whose mission is to educate architects, building owners, specifiers, codes and standards officials and others about the sustainable and energy-related benefits of cool metal roofing.
• Mart Koeteman, of Fishbeck, Thompson, Carr & Huber, Inc., which provides a full range of civil engineering, environmental, architectural/engineering and related services to public and private clients.
• Cathy Barranger, a senior associate at EDAW, Inc., an international planning, design and environmental firm that takes a multidisciplinary approach to green community development.

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Mark Your Calendar for the 2005 National Green Building Conference

The 2005 National Green Building Conference is scheduled for March 13-15, in Atlanta. Click here for more information or to register.

Enter the 2005 Best of Seniors Housing Awards

Enter your community design, clubhouse, models or marketing and merchandising in the 2005 Best of Seniors Housing Awards competition.

The competition has more than 100 categories to choose from, including active adult, assisted living, continuing care retirement community, congregate care community, renovated seniors housing, special needs housing, seniors multifamily and more.

For details, visit Call for Entries, or call 800-368-5242 x8220.

'The Best of Seniors Housing News' Available at BuilderBooks.com

"The Best of Seniors Housing News," available at BuilderBooks.com, is a compilation of up-to-date, informative articles gleaned from Seniors Housing News. From design ideas to customer service, you’ll learn the unique vantage points that will keep you ahead and give you an edge in the seniors housing market. To view or purchase this publication online, click here, or call 800-223-2665 to order.

Attend the 2005 Seniors Housing Symposium in Metro Washington, D.C. Area

Do you want to learn more about the fastest-growing segment of the housing market? Make your plans to attend Building for Boomers & Beyond: Seniors Housing Symposium 2005, the premier educational and networking event for industry professionals who serve the burgeoning 50+ market. For more information, click here.

Learn More About Seniors Housing Through the Seniors Housing Council

To learn more about seniors housing, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292.

NAHB Helped Me Make the Move from Carpenter to Successful Businessman

By Mike DuKate, CGR, CGB, CAPS
About three years ago, I hung up my tool belt and began my transition from being a carpenter to becoming a businessman with my own remodeling firm.

Thanks to my participation in the NAHB designations programs, my transition has been successful. During the past three years, my company has more than doubled in size — and the growth has more than doubled our need to systematize and increase our professional approach. I was able to to put put more professionalism in our business processes because of what I learned from taking the designation courses.

I took 14 classes and earned my designations as a Certified Graduate Remodelor™ (CGR), Certified Graduate Builder (CGB) and Certified Aging-in-Place Specialist (CAPS). I not only received valuable, pragmatic help through these courses, the information I brought back helped stir my employees to raise the bar and think outside the box.

The classes also provided a great opportunity for me to network with other remodelers and learn even more. Fellow remodelers who had already tackled the same sets of challenges I was facing encouraged me and offered solutions. In addition, with the knowledge I gained, I was able to expand the scope of our approaches to business.

With the knowledge I took back, we have instituted changes in accounting, estimating, production, scheduling and overall administration — all of which  improved our cash flow. We restructured our contracts, schedules and note draws on customer schedules. We also improved our purchase order process to better prevent funds from slipping through the cracks, which helped our  bottom line.

We improved our job logs and other documentation in order to create a stronger financial safety net. This also helped us increase efficiency, eliminate errors and better assist our customers with clarification of their insurance claims. We've even used job logs and schedules as a marketing tool to give prospective clients the knowledge and security that we are professional and fulfill our commitments.

Material selection sheets cut losses that were caused by poor communication. Getting a better handle on our financial management also has given us direction, and that reflects well on our financial health and enables us to communicate more effectively with our accountant, lawyer and banker.

Personally, learning has energized and challenged me. Work is more enjoyable. I shifted some of my responsibilities to my employees and now wear wear fewer hats as a business owner. This enables me to focus more of my time — with less frustration — on priority issues. And, giving my employees more control and ownership of projects has been a boost to them, as well.

In summary, obtaining my CGR, CGB and CAPS designations has made deep in-roads into the culture and performance of our company. I think it is important to earn the right to be heard.

Mike DuKate, CGR, CGB, CAPS, is president of DuKate Fine Remodeling, Inc. of Franklin, IN.

The NAHB University of Housing Offers Designation Programs and Other Courses

The NAHB University of Housing offers CGR, CGB, CAPS and a variety of other professional designation programs and business management courses that set builders and remodelers apart from the competition.

For a complete list of all current education offerings, click here.

Residential Construction Superintendent Courses Pack the House at SEBC

By Michael Bonts, Special to Nation’s Building News
More than 1,000 of the record 13,620 who turned out for the 26th Annual Southeast Building Conference in Orlando earlier this month at the Orange County Convention Center attended courses for professional development, including the increasingly popular Residential Construction Superintendent (RCS) designation program offered by Home Builders Institute (HBI), the workforce development arm of the NAHB.

The Residential Construction Superintendent designation is geared toward future field superintendents and current construction site personnel who want to sharpen their skills. The designation’s eight four-hour courses cover issues and subjects identified by NAHB members as critical to a field supervisory job.

This is the second consecutive year SEBC has offered all eight courses leading to the RCS designation.

RCS instructor Beverly A. Koehn, of Beverly Koehn & Associates in San Antonio, taught “Customer Service and Home Owner Relations,” which focuses on “understanding the human and business needs of the customer so that you can meet and exceed their expectations,” she said. “We teach about avoiding the seven deadly sins of customer service and learn how to deal with the difficult customer.”

In “Hiring, Training and Supervision,” Koehn also taught attendees about the common mistakes that are made in the interview process and the steps to follow to ensure that each subcontractor understands EEOC and advertising guidelines or that an employee is the right fit for the company.

Jud Motsenbocker, of Jud Construction in Muncie, IN, who is an HBI trustee and a former HBI chairman, reported that his courses, “General Project Management” and “Planning and Scheduling” were “well received with packed houses for both sessions. Not only did attendees receive continuing education credits, they learned the importance of a team effort at every level.”

The management course provides an overview of the many facets of being a superintendent and is a good introductory class for the rest of the superintendent series.

“Students learned the multiple and varied roles of the superintendent; how to manage production operations by using the planning, action and review method; and understanding estimates,” he said.

His second course, Motsenbocker said, emphasizes improving the planning and scheduling process to increases profits and taking steps to help ensure on-time deliveries. Attendees also learn the five fundamental scheduling methods and how to utilize each one to successfully manage a project.

“Codes and Quality Control,” which has recently been revised, was taught by veteran builder Paul E. Mashburn, Jr., of Viking Builders in Winter Park, FL. The former HBI chairman and past president of the Florida Home Builders Association taught students the five essential components for ensuring quality in the jobs their companies do.

“The super eight courses leading to the RCS designation have been approved by the state Construction Industry Licensing Board and that’s a real plus,” said Mashburn. “Also, local executive officers are bringing the course to the local association level. In Orlando, attendees learned to set performance expectations based on a quality foundation. The course also discussed the superintendent's responsibilities regarding codes and tips on how to enforce code compliance on the job site.”

Mashburn also taught “Budget Management and Cost Control,” which reviews the role of the superintendent in making jobs profitable by understanding the critical elements in job costs and how to control them.

Two other courses required for the RCS designation — “Safety and Security” and “Superintendents Office and Subcontractor Relations” — were taught by Ed Snider, vice president of construction quality and workplace safety for Beazer Homes USA in Addison, TX.

In the safety course, “we essentially show how to protect your job site by learning the essential ingredients of a safety program, what the most common OSHA citations are and how to prepare for an OSHA inspection,” said Snider.

His second course covers what a superintendent should be looking for in a subcontractor and what to do to recruit the most successful subcontractors for a project.

“The course really offers tips for creating a winning partnership with your internal customers and provides a proven strategy for dealing with conflict,” Snider said.

Since it was introduced in the fall of 2002, the RCS program has increased its course offerings significantly as more and more employers have recognized the value of continuing education for their employees.

Summing things up, Orange Park, FL-based builder Roger Day, president of Rosewood Homes, noted that, “The designation program increases the profitability of your company by teaching your employees how they can be more effective on the job site.”

Latest in Steel Framing ‘How To’ Series Focuses on Interior Walls

Interior walls are the focus in the latest installment of the Steel Framing Alliance's “How To” series of informative on-the-job guides for building with steel.

Headquartered at the National Housing Center in Washington, D.C., the Steel Framing Alliance is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

“How to Build with Steel: Interior Walls” is an illustrated, four-page brochure that covers basic steel-framing stud and track details, reviews tools and fasteners, and outlines the nine steps for stick-built steel-framed construction. Its publication follows “How to Get Started with Steel: Tools,” an easy-to-follow guide that explains the five critical steps to working with steel and provides illustrations and descriptions of the tools that are needed.

The "How To" series is based on the National Training Curriculum, which is the authoritative educational guide for framing with steel.

Upcoming guides in the series that are expected to be available in the near future include “How to Work with Steel Framing for Plumbers” and “How to Work with Steel Framing for Electricians.”

The “How To” series can be downloaded from the alliance’s Web site, and it is free to members of that organization.

The Steel Framing Alliance is an association of more than 400 companies and organizations with the mission of making it possible for steel framing to be used widely in residential and commercial construction. It provides education, publications, technical support, research and development, and market development programs to companies representing the full spectrum of manufacturing, construction, design, distribution and professional services.

NAHB Board Meets in Columbus, Ohio, Sept. 29-Oct. 3

OFFICIAL MEETING NOTICE OF THE NATIONAL ASSOCIATION OF HOME BUILDERS BOARD OF DIRECTORS

The following schedule of events is a partial listing provided as a notice for the upcoming NAHB Fall Board of Directors Meeting to be held in Columbus, OH, Sept. 29-Oct. 3, 2004. Meetings will be held at the Hyatt Regency Columbus and the Columbus Convention Center. The fall board program will identify the exact time and place of each scheduled meeting.

Wednesday, Sept. 29

• Subcommittees and Task Forces Committees
• National Vice Presidents
• Executive Board Meeting

Thursday, Sept. 30

• State Representatives Networking Session
• Committees Meetings
• Past Presidents’ Council
• National Housing Corporation Board of Governors
• 2005 Leadership Meeting

Friday, Oct. 1

• Committees Meetings
• National Housing Endowment
• Resolutions Committee

Saturday, Oct. 2

• Area Caucuses 1-15
• Joint Executive Board, Budget and Resolutions Committee Meeting
• NAHB Board of Directors Meeting

Sunday, Oct. 3

• NAHB Board of Directors Meeting

Orange County, Calif., Builders Encourage Students to Pursue Home Building Careers

Under a gift to the National Housing Endowment (NHE) from Dale and Bea Stuard, a total of $5,000 will be awarded to three students in Orange County who are enrolling this fall in construction training courses at local colleges in Orange County, CA.

Dale Stuard is the current chairman of the endowment and a past president of NAHB and the Building Industry Association, Orange County Chapter (BIA/OC).

The students — who are the first to receive scholarships from BIA/OC and who will be recognized during the association’s 13th Annual Tribute to Excellence on Sept. 13 — are: Michael Ryan Charters, who will be attending Cal Poly, San Luis Obispo; John Frances Harley, attending Orange Coast College; and Leng Heng, attending Fullerton College.

“Architecture fascinates me, I love designing things on paper and seeing them come to life in three-dimensional form,” said Charters. “I want to design homes, buildings and structures that capture the attention and interest of people who see them. I want to design timeless structures that are enjoyed by generations to come.”

Money for the scholarships comes from the interest earned on a much larger contribution of the Stuard’s to the NHE. Stuard requested that the Orange County association administer the funds as scholarships to support workforce training in the industry.

“With college education costs on a steady increase, it’s refreshing to see the generosity of the Stuards providing students the opportunity to continue their studies,” said Jon Robertson, of California Pacific Homes, and immediate past president of the BIA/OC.

The association also created the Building Industry Technology Academy at Katella High School in Anaheim three years ago to help educate students in the home building industry. For information on the academy and the Southern BIA Education Foundation, click here.

'Build a Home, Build a Career' Available at BuilderBooks.com

"Build a Home, Build a Career," available at BuilderBooks.com, is a nine-item kit from the Home Builders Institute, the workforce development arm of NAHB, that includes everything HBAs and members will need to successfully connect with local school systems to gives high school students first-hand exposure to careers in residential construction. "Build a Home, Build a Career" contains core subject lesson plans, how-to guides and ideas for hands-on projects. To view or purchase this publication online, click here, or call 800-223-2665 to order.

Membership Planners to Gather at National Conference, Oct. 23-24

Members of today's home builders associations want more benefits, top-notch service and customization. The 2004 National Conference on Membership will explore solutions to meeting these expectations and other member-related issues in Memphis on Oct. 23–24.

HBA representatives from local associations of every size will attend, seeking new membership development techniques and ideas to create more “relationships that work.” Participants will share ideas and information, and swap practical and innovative approaches to create more successful membership programs.

“Whether you are currently enjoying success in your membership programs or you’re struggling in that area, it’s important for you to attend," said NAHB President Bobby Rayburn. "I encourage every membership planner and leader to take this opportunity for learning from your peers."

Pre-Conference Schedule
All pre-conference sessions take place on Friday, Oct. 22.

• Pricing for Profits, $319
• Web Membership System (WMS) Intermediate Training, no fee
• Membership Surveys: Keeping Your Finger on the Pulse of Members and Their Changing Needs, $75

Conference Schedule
Sessions will be on Saturday and Sunday, Oct. 23-24.

• Two keynote addresses from Laurie Richards, an international speaker specializing in communications and management.
• Member Orientations: Not Just for New Members Anymore
• Council Membership: An Enhanced Association Offering
• Membership Legal Issues for Associations
• General Session: What Works to Grow Your Association? Retention.
• How to Increase Builder Involvement
• Successful Member-Get-a-Member Programs
• From the Grassroots Up: Educational Programs as Member Benefits
• Saturday night networking reception
• Breakfast and General Session: Member to Member, Panel Discussion
• Beyond Networking: Enhanced Associate Member Benefits
• First Impressions: First-Year Members
• NAHB’s Web Membership System (WMS) 101

Registration is $175. Advance registration deadline is Oct. 8. To register online, go to www.nahb.org/conference.

For more registration information, contact the NAHB University of Housing at 800-368-5242 x8EDU.

For additional conference information, e-mail Emily Fitzsimmons, NAHB executive director of membership, or call her at 800-368-5242 x8354.

Reduce Business Costs With NAHB Members-Only Discounts

 NAHB members can reduce business costs by taking advantage of the discounts in car rentals, office products, PCs, payroll services, overnight delivery and more.

DIscounts are being offered to members by companies such as these: 

• Dell™Computer Corporation — the world’s leading computer systems company
• Paychex® Payroll Processing — for any size organization
• NEBS® business products and services
• DHL Express — domestic and international shipping
• Viking® Office Products — start saving up to 69%
• Williams Scotsman® for Mobile Offices, Site Storage Trailers and more
• AT&T Wireless Services
• MBNA Financial Services
• Pitney Bowes Personal Post™ postage meter and scale, designed specifically for small businesses
• Hertz® Rental Cars — including fee-waived Hertz #1 Club Gold®

For the most up-to-date information on new and current offers, go online and bookmark http://memberadvantage.nahb.org.

Member business discounts are part of a full range of benefits members receive when they join their local home builders association. New members automatically become members of their state association and NAHB where they have access to a full spectrum of benefits, resources, services and opportunities. Membership also puts them in a unique position to learn, network and improve their bottom line.

To find a nearby NAHB-affiliated home builders association, visit the NAHB Web site.

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.