Nation's Building News Online: October 18, 2004

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Policy Advocates See Housing Emerging as a Major Bipartisan Issue in Upcoming Elections

Housing remains a top concern of the nation’s electorate and it deserves priority attention from the presidential candidates and everyone else who is running for office in next month’s elections, according to participants in an Oct. 14 news teleconference.

The conference announced the publication of “Housing Policy for the 21st Century,” a consensus report on the essential elements that are needed to shape the housing agenda of the federal government. The report — which was adopted by NAHB as well as the American Bankers Association, America’s Community Bankers, the Mortgage Bankers Association and the National Association of Realtors® — covers issues ranging from tax policy and regulatory reform to strengthening the nation’s housing finance system.

Citing the recent strength of the housing market and its leading role in restoring the U.S. economy to health, Jerry Howard, NAHB’s executive vice president and CEO, noted that “the job of housing America isn’t finished. Over the next 10 years, we need to supply 1.7 million to 2 million units a year, and we need to ensure that policymakers are aware of that fact.”

Despite a record homeownership rate of 69.2% in the second quarter, Howard said that “there is a real crisis” among firemen, teachers, emergency workers and others in the workforce who can’t afford to buy homes or rent apartments in the areas they serve.

A positive regulatory environment and a tax system that encourages homeownership are key to tackling this problem, he said. Both presidential candidates have clearly indicated their support for the mortgage interest deduction, Sen. John Kerry in an NAHB question-and-answer publication and President Bush in a speech before the association’s board of directors at its fall meeting in Columbus, OH.

Howard said that the President in his address to the NAHB directors also recognized the need to control regulation, which can add thousands of dollars to the cost of a new home. “This is a very important comment by the President,” he said, “and we hope that policy makers in both parties will adopt this kind of policy.”

David Lereah, chief economist for the National Association of Realtors®, said that housing affordability problems have increased dramatically in many parts of the country where prices now tower over what is typical for other areas. In Anaheim, CA, for example, he said that the median price of a home is now $600,000.

“Let’s not take the U.S. housing sector for granted,” Lereah said. “Let’s not put it on the back burner. Our sector needs strengthening.”

From results of a poll taken by his association earlier this year, he said it is evident that American voters are concerned about the cost of housing, they want the government to take a more active role and they will be carrying their housing concerns to the ballot box in November. Two out of three of those surveyed responded that housing will be a significant factor in their voting decisions, he said, and about three-quarters voiced support for affordable housing in their community.

Among other priorities for housing policy discussed by participants at the teleconference:

• Edward Yingling, executive vice president of the American Bankers Association, emphasized the need for outreach programs to minorities and immigrants. There are more than 31 million immigrants living in the country today, he said, and one million new immigrants are joining their ranks each year. “Education is critical, as the mortgage process can be intimidating,” he said, and extensive regulation of financial institutions is needed to root out predatory lending practices among unsuspecting housing consumers.
• Robert Davis, government relations director of America’s Community Bankers, noted that maintaining the health of the housing industry’s Government Sponsored Enterprises (GSEs) is essential because those institutions play an important role in maintaining the availability and affordability of mortgage credit, especially for lower-income households. Citing a disparity between potential risks to the GSEs and the regulations that are currently in place, he said that a new regulatory structure is “essential to ensure they continue to provide the benefits they are intended to provide.”
• Jonathan Kempner, president and CEO of the Mortgage Bankers Association, said that direct federal expenditures for housing should continue to fund efficient and effective low-income rental housing. “A new production program is needed,” he said, and it will be most effective if it helps households across a range of incomes — the lowest as well as those of more moderate means.

Kempner and other conference participants said that housing has emerged as a bipartisan issue and the policy recommendations in the group’s report “makes sense for both political parties.”

Davis observed that, “We haven’t seen any diminution in trying to increase homeownership from the Clinton to the Bush Administrations, and many of the same devices and policies remain in place.” Increasing homeownership rates among African-American and Hispanic households is a major focus of these efforts, and although significant progress is being made, only about 50% of these families own homes today, well behind the general population.

Howard said that both of the presidential candidates are “very pro-housing.”

Building News Coast To Coast

Holding Up a Tradition

Builders in the Carolinas and other Southern states say columns are in high demand as home buyers look to recreate the nostalgia of the Old South. Once crafted from wood, columns are now made out of fiberglass to make them rot-resistant. They range in price from $100-$10,000 or more each, depending upon the size and design. "Spend a couple hundred dollars on a set of columns and [home buyers] fall in love with them," remarks Vincent Del Donna of Architectural Products by Outwater. "They don't fall in love with sheetrock." One example of how the Old South is being recreated is I'On, an upscale subdivision under development near historic Charleston. The community is a product of the New Urbanism movement that aims to bring the small-town life to the suburbs. The 762 homes — priced at $400,000-$2 million and set for completion in 2006 — will feature columns, sleeping porches and tall windows, among other things.
Los Angeles Times (10/11/04) P. A1; Barry, Ellen: www.latimes.com

Super Energy-Efficient Homes Go Tankless

California-based energy consultant Rob Hammon says home owners who want to cut their energy costs need to look beyond added insulation. They can use 60% less energy, for example, with a system comprised of insulation, solar panels and tankless water heaters, among other things. Tankless water heaters heat water only when needed, rather than keeping it hot all the time. The devices have been installed in a 73-unit Zero Energy Home development in Fallbrook, CA, where home owners can expect to slash their gas and electric bills by 50% and 70%, respectively.
Associated Press (10/11/04) Bradley, Dave: www.ap.org

Cost of Building Materials on the Rise

Prices for building commodities have been unsteady in 2004, thanks to bad weather, global demand and the strengthening domestic economy, and contractors are trying to lock in prices as they struggle with suppliers and clients. Some construction materials cost 50% more than they did last year, and Cleveland-based Austin Co. reports that in the Upper Midwest, overall commercial construction costs rose 8% during 2004's first half. The cost of lumber has increased some 40% from last year, and plywood prices are over 90% higher than in 2002. Associated Builders & Contractors President Stephen Stone says that many project owners and contractors are becoming more aggressive in locking in material costs as they get closer to construction. Contractors have altered or delayed plans to ease the pain of higher costs. Metropolitan Builders Association Executive Director Matt Moroney says that contractors fear that some people will no longer be able to afford new homes, and adds that low interest rates are keeping the effect from deepening.
Milwaukee Journal Sentinel (10/09/04) Barrett, Rick: www.jsonline.com

Well-Insulated, Efficient Homes Becoming Trend

Home builder Jim Mackin of Monroe, MI, lives in a five-point Energy Star home, which is certified with the U.S. Environmental Protection Agency as an energy-efficient structure. Such homes' prices are typically boosted by 25% due to special energy-saving techniques, but the homes consume 30% less energy for heating, cooling and water heating compared to conventional homes. That translates into savings of about $200-$400 annually on utility bills, and involves such high-efficiency appliances as washers and dryers, air conditioning systems and furnaces. Other features include Peachtree windows that permit light to enter but not heat, one-inch thick Styrofoam insulation around the exterior foundation and an attic insulated with 12 inches of Nu-Wool cellulose.
Associated Press (10/11/04) Slat, Charles: www.ap.org

Relative Proximity; As Boomers' Parents Age, 'In-law' Living Options Grow

Separate but attached apartments added to a home to accommodate aging parents are still relatively rare but are becoming increasingly popular among home owners, according to builders of high-end residences, who say it is only a matter of time before the trend expands to the middle market. The units, called "in-law suites" or "accessory housing," can be added to an existing home by a modular-home builder, such as The Home Store, which reports tripled demand for such units over the last decade. The Home Store charges between $70,000 and $100,000 for attached cottages designed for elderly parents. Owners can also opt to have in-law suites included in their plans for newly built homes at an extra cost of about $12,000-$35,000, according to luxury home builder Toll Brothers. The company also is incorporating smaller homes designed for elderly people into its planned communities, according to spokeswoman Kira McCarron. Despite the growing demand, some barriers to widespread adoption of in-law suites remain, as tight zoning restrictions prohibit the addition of apartments to homes in many areas of the country. In addition, seniors are increasingly reluctant to move out of their longtime homes and depend on their grown children for assistance.
CBSMarketWatch.com (10/07/04) Coombes, Andrea: www.cbs.marketwatch.com

More New-Home Buyers Get Pinched by Impact Fees

As more and more of the nation's cash-strapped communities levy "impact fees" against home builders to help fund infrastructure to serve new residents, contractors are passing those costs on to buyers. Because just a few thousand dollars can make the difference between renting and owning in some markets, impact fees — which range from hundreds of dollars to tens of thousands, depending on the state — are a major consideration for some shoppers. Moreover, points out Ellen Roche of the National Association of Realtors®, "most people think of the fee as a one-time assessment, but people who move frequently and choose to live in newly built homes may find themselves paying the fees more than once." To prepare for the purchase of a new home, buyers are advised to ask about impact fees upfront and find out how they will be levied and what they will be used for; pay the costs in cash rather than rolling them into the home loan, to avoid paying finance charges in addition to the impact fee; consider buying in a nearby town if the first-choice community imposes impact fees; or, if the buyers are likely to move again within a few years, avoid new housing altogether and focus on existing homes.
Wall Street Journal (10/07/04) Cullen, Terry: www.wsj.com

AARP Touts Senior-Friendly Home With Universal Design

At its annual convention in Las Vegas last week, AARP displayed a model home promoting "universal design" features such as wide doorways; step-free entries and showers; and energy-efficient, flicker-free lighting. The concept behind universal design is to create a living environment that is "usable to the greatest extent possible by people of all sizes, ages, abilities and preferences," according to Larry Weinstein, national livable homes consultant for AARP in San Diego. The three-bedroom, 1,750-square-foot home on display in Las Vegas featured wide doors with lever-set handles and cabinets set low with easy-to-grasp knobs to increase access for children and older people who have difficulty reaching and grasping. Similarly, the model home's low-pile carpets and no-step showers are designed to accommodate people using wheelchairs or walkers. Weinstein says these simple but important design features should not add more than 5%-10% to the price of a home; a residence similar to the AARP model would be priced around $110,000-$130,000.
CBSMarketWatch.com (10/07/04) Gerencher, Kristen: www.cbs.marketwatch.com

Home or Work Problem Floor? Stick Cork on It

More and more home owners are installing cork floors as an alternative to hardwood. Cork floors are just as durable, but they make walking more comfortable. A staple in high-traffic commercial spaces for years, not only does cork absorb noise, it also makes floors more energy-efficient. Moreover, none of these benefits is lost when the cork is finished with wax, matte or gloss. Cork is available in a wide array of colors, ranging from natural browns to blues and greens; and home owners can choose between either tiles or panels that lock together like laminate.
Philadelphia Inquirer (10/03/04) P. J1; Dulley, James: www.philly.com

Fund Will Collect Donations to Help With Home Purchases

Financial Counselors of America has launched a fund that helps cover downpayments and closing costs for active members of the armed forces, Reserves and National Guard. The nonprofit organization based in the Memphis, TN, area has formed the Military Housing Assistance Fund (MHAF) as a national program and now is accepting individual and corporate donations. Military men and women must qualify for a mortgage that accepts gift funds in order to take advantage of MHAF assistance, and the home builder or seller must consent to pay a $600 administrative fee that covers the fund's overhead and enables 100% of the donations received to be transferred to beneficiaries. The MHAF hopes to provide assistance to 1,000 military families by January.
Memphis Commercial Appeal (TN) Online (09/28/04) Morton, Kate Miller: www.commercialappeal.com

Our Wireless World

Optimistic predictions of a wireless home with universally accessible digital media within five years are undercut by the reality of current wireless technologies, which are marked by implementation and maintenance difficulties, susceptibility to interference and quality of service issues. Still, developing wireless technologies such as Wi-Fi and Ultra-Wideband (UWB) could resolve these problems. Consumers of home wireless networking products usually employ them to share high-speed Internet connections, and some are also using them to transfer digital files from hard drives to other devices. However, errors and information resending can slow down wireless data transmissions to 50% or less of their rated speed, while neighboring wireless networks can interfere with transmissions. Quality of service remains the biggest headache, and new iterations of current Wi-Fi standards aim to fix these deficiencies by modifying network operations: existing 802.11 standards apportion bandwidth equally among all devices on the network, but developing standards promise to throttle down some kinds of data in favor of signals that should not be disrupted, or double current data rates to support wireless TV transmissions. Complicating the deployment of these standards are such factors as copyright issues and the incompatibility of many media appliances wireless networks are supposed to link together. UWB, which avoids signal interference by distributing high-speed data across a broad range of radio frequencies, has run into trouble because of fears it could interfere with other devices in those spectrum bands. Another home networking approach uses traditional wires and cables for data transmission, but its rollout could be constrained by speed limitations as well as concerns about cluttered power grids among foreign governments.
U.S. News & World Report (09/27/04) Vol. 137, No. 10, P. 48; LaGesse, David: www.usnews.com

PC Backup Is a Must Now

Computer experts continue to stress to users the importance of frequent data back-up, especially now that hackers and viruses are becoming more commonplace. Though many people complain that back-up procedures are lengthy, boring and sometimes costly, an add-on hard disk and automated back-up software can simplify the process. Copying files manually to blank disks is laborious, and Web-based services often charge a lot of money for a minimal amount of space. Extra hard disks, however, provide a sufficient amount of space; and back-ups can be scheduled for the middle of the night without the user present. Users can choose from the $35 SmartSync Pro and Maxtor's OneTouch II, which is priced at $329 for 250-gigabytes and $379 for 300-gigabytes. SmartSync Pro copies specific files and folders, rather than the entire hard disk, and makes it easy to retrieve deleted files. Users of OneTouch II also have access to retrieval tools, but the initial backup can take more than 12 hours to complete.
Wall Street Journal (10/07/04) P. B1; Mossberg, Walter S.: www.wsj.com

Wireless All the Way

A growing number of small businesses are going wireless, but only 3.7% have disconnected their traditional phone lines in favor of mobile phones. Though mobile devices boost productivity by allowing employees to communicate with clients and colleagues while away from their desks, most businesses prefer to maintain their land-line connections to keep their place in the phone book. Those who decide to go wireless, however, can do so and remain in the directory at the same time by having land-line calls transferred to employee cell phones. They can also pay more to have their cell phone numbers displayed in the phone book or rely on the Internet to attract customers.
Milwaukee Journal Sentinel (10/10/04) Romell, Rick: www.jsonline.com

Five Local Cases Receiving NAHB Legal Action Support

At the recommendation of the NAHB Legal Action Committee (this link is available to NAHB members only) earlier this month in Columbus, OH, the NAHB Executive Board voted to provide funding in support of litigation in five local cases involving impact fees, building permits, wetlands, condemnations and accessibility requirements.

The Legal Action Fund supports litigation by state and local home builders associations and builders in cases involving matters of common importance or national significance to the shelter industry. The committee reviews applications three times each year prior to the association’s board of directors meetings.

Grants were approved to aid the following home builders associations:

• The Nebraska State Home Builders Association has stepped in to assist the HBA of Lincoln in its continuing challenge to the City of Lincoln’s impact fee ordinance for water, wastewater, parks, trails and arterial streets. A local court ruled in May that the impact fees under the present ordinance were being used merely to generate revenue and were clearly not traditional regulatory fees. The court also rejected the city’s assertions that it could collect the fees under the authority of an occupation tax statute. However, the court did rule that the city had the authority under its home rule charter to impose “impact fees” as a form of excise tax. On appeal, the HBA is asking the court to determine whether or not the city has authority under that charter to impose an excise tax to collect impact fees, without having received specific authorization from the Nebraska legislature.
  
  
• In Kansas, the Lawrence Home Builders Association and its individual members have filed a class action lawsuit against the City of Lawrence, challenging a building permit fee schedule. The applicants assert violations of relevant state statutory law as well as federal constitutional violations. The applicants maintain that the city has illegally increased the fee schedule to the point that the fees collected exceed the costs of regulating the building inspection department. Moreover, to be lawful, the fee must bear a rational relationship to the rightful regulation of the activity for which it is being charged. The applicants state that the city has unlawfully used permit fee revenue to fund its general operations for social programs, in addition to funding activities of other initiatives having no relationship to the regulation of building activity.
  
  
• In Louisiana, a builder member of the Acadian Home Builders Association has filed an administrative appeal to an assertion of jurisdiction by the U.S. Army Corps of Engineers over a 73.4-acre tract of land in Lafayette containing isolated wetlands. One boundary of the property borders a drainage coulee and the property is about four miles to the nearest navigable river. The builder proposed to develop the property into residential lots. In July, the Corps issued a finding of “Section 404 other waters” jurisdiction over a portion of the property. The applicant does not believe that the property is a wetland subject to the Corps’ jurisdiction based upon existing case law in Louisiana.
  
  
• In York County, PA, a builder seeks to avoid a condemnation of approximately 80 acres of land in West Windsor Township. The developer acquired the property in 2002 and subsequently sought and received approvals for residential development from both the township and the county. Early this year, York County instituted proceedings to condemn the property as part of a larger plan for public parkland. In filing its objections to the condemnation, the property owner argues that the county does not: (1) have the power or right to condemn the property; (2) has not provided sufficient security and immediately available funds to pay just compensation; and (3) committed a procedural error in the condemnation proceedings. The litigation was presented by the Pennsylvania Builders Association and the York County BA.
  
  
• The Memphis Home Builders Association in Tennessee requested a friend-of-the-court brief from NAHB to support litigation on the Fair Housing Act’s (FHA) accessibility requirements as they apply to two multifamily communities. The developers were named as defendants in a suit filed by the Memphis Center for Independent Living (MCIL) in 2001, alleging that they failed to design and construct one of the multifamily developments in compliance with the FHA’s requirements. The United States intervened in the suit as an additional plaintiff and amended the complaint to include another multifamily development that was, at the time, under construction. A lower court decided, in part, for the interest group. However, it allowed an immediate appeal of three of the developers’ issues to the Sixth Circuit Court of Appeals: (1) whether the FHA requires accessible pedestrian routes throughout a covered multifamily property when the units and their amenities are accessible to pedestrians from vehicular arrival points; (2) whether the FHA requires accessible parking where no parking is planned; and (3) whether post-construction evidence can support the third prong of the site analysis test for exemption of otherwise covered dwelling units on the basis of site impracticality.

The deadline for Legal Action Fund applications that will be considered during the International Builders’ Show in Orlando, FL, is Dec. 1.

To download applications and guidelines, NAHB members can click here.

For more information on the grants described above, e-mail Mary Lynn Pickel, NAHB’s director of legal services, at 800-368-5242 x8485.

For information on filing an application to the fund, e-mail Jon Luther, NAHB staff counsel, or call him at x8329.

Housing Snapshot

Mortgage interest rates declined slightly last week, down in part because of news of lackluster job creation in September. Oil prices remained a source of concern as they rose above $55 a barrel, but Federal Reserve Chairman Alan Greenspan provided some reassurance that the world is not running out of oil. Although high oil prices have been whittling away at economic growth, prices will have to rise even higher before they start having the deleterious impact seen in the 1970s, Greenspan said. In today's inflation adjusted-dollars, at their peak in 1981 oil prices were $80 a barrel. Also, Greenspan pointed out, the U.S. today is far more energy-efficient than it was two decades ago. Good news continued on the lumber price front last week. Framing lumber prices dropped to $378 per 1,000 board feet, down from $392 during the prior week, but still above $323 a year earlier, according to Random Lengths. News on panel prices was considerably more favorable. The price of 15/32-inch 3-ply Southern (west-east) exterior sheathing fell from $350 to $315 per 1,000 square feet and oriented strand board was down to $240 from $285. Those prices were down significantly from levels one year earlier of $545 and $465, respectively.

Mortgage Interest Rates

30 Year Fixed Rate: 5.74\%
15 Year Fixed Rate: 5.14\%
1 Year ARM: 4.01\%

Housing Starts: Aug. 2004

Total: 2.0 million\%
Single Family: 1.667 million\%
Multi Family: 333,000\%

New Home Sales: Aug. 2004 *

1.184 million

Existing Home Sales: Aug. 2004 *

6.54 million

* Seasonally Adjusted Annual Rate

Make Housing a Winner on Election Day

The Nov. 2 elections (this link is for NAHB members only) are fast approaching, and it’s time for you to do your part to ensure that housing is a winner when the votes are tallied.

Where the candidates in local, state and national races stand on housing provides an important measure of their fitness for office. As a member of this industry, it is incumbent upon you to find out where the candidates stand on the housing issues and to share that information with your friends, neighbors, business associates and customers.

Housing issues are figuring prominently in this year’s presidential and congressional elections. That is no small tribute to the power that home building has demonstrated recently in leading the nation’s economy to higher ground and in increasing the financial health of the record number of American families who are home owners today. It is also an indication of the growing concern in this country over the need for affordably priced housing that will enable our workforce to live in or near the communities they serve. And it is a result of the ongoing efforts of NAHB to ensure that housing receives the prominence it deserves in the current election cycle.

To promote a national housing agenda this summer, NAHB supplied a housing policy agenda for the platform committees of both political parties, and we established a notable presence at the Democratic and Republican national conventions. That included a series of ads in special daily convention issues of the National Journal that made a highly favorable impression on the lawmakers and delegates attending those events. We also hosted receptions for congressional leaders and cosponsored media briefings. We supplied a housing policy agenda for the platform committees of both political parties.

To let our members know the positions of the two presidential candidates on issues that are important to us, we asked President George W. Bush and Sen. John Kerry several questions, and we have published their responses in a special report. At our board of directors meeting in Columbus, Ohio, on Nov. 2 we heard directly from the President about how he intends to increase housing opportunity in this country. For yet more information on the full range of housing policies that need to emerge from the elections, NAHB and four other national groups in Washington have put together a consensus report describing those issues in great detail. All of this is information that will help you make the right decisions for the housing industry and your business on election day.

As the elections enter their final days and weeks, this is also a time for participating in the grassroots campaign efforts that are occurring across the country. Here’s how you can help make a difference:

• Encourage your family, friends, employees, HBA members and their subcontractors to get out and vote.
• Sponsor a fundraiser for your candidate.
• Recruit HBA members and employees to volunteer their time for campaigns.
• Make, distribute and place campaign signs.
• Make phone calls for your candidate.
• Deliver campaign literature door-to-door.
• Assist with campaign events.

Don’t let this political season pass you by. Housing is a major concern of America’s electorate and it is an issue that commands the support of men and women on both sides of the political aisle. This is your opportunity to ensure that when the ballots are counted on Election Day, they will spell victory for the candidates who stand tallest for housing and the American dream.

Complex Rules Govern Nonprofit Election Activities

If you are a TV viewer in a state that's up for grabs during this presidential election, your commercial breaks have likely been a flood of political advertisements.

But who is paying for all of these ads? Is it legal for nonprofits like NAHB or the U.S. Chamber of Commerce to bankroll them? Didn't McCain-Feingold campaign finance reform in 2002 outlaw this type of advocacy? Which groups can participate in which activities?

A Sept. 27 Washington Post story cleared up some of those questions:

501c Groups: Tax Exempt Advocacy and Charitable Organizations
These groups are unaffected by the McCain-Feingold legislation and are governed by the Internal Revenue Service (IRS), not the Federal Election Commission (FEC). These groups are not required to disclose their donors. They are, however, not allowed to use corporate or union funds to pay for issue ads during the 60 days before the general election. A complicated list of rules breaks down 501c groups even further.

• 501c (3) groups can register voters and collect tax-deductible donations.
• 501c (3) groups cannot engage in partisan or electioneering work.
• 501c (4), (5) and (6) groups can be involved in elections, but the cost of their involvement must be less than half of the group's budget.
• 501c (4), (5) and (6) groups cannot tell people to vote for or against a specific candidate.

527 Groups: Tax-Exempt Organizations with a Political Mission

527 groups are also governed by the IRS. Unlike 501c's however, 527's must report their contributors and expenditures to the IRS. FEC reporting is also required, if the 527 is a political party or PAC expressly advocating the election or defeat of a federal candidate. You often see these groups behind political activities like voter mobilization efforts and issue ads.  

U.S. Appeal Expected to Prolong Resolution of Dispute Over Canadian Lumber Duties

The Bush Administration last week said that it would appeal a finding by a North American Free Trade Agreement (NAFTA) panel that imports of Canadian softwood lumber pose no threat to domestic producers.

As required under U.S. and international trade laws, the U.S. International Trade Commission (ITC) voted last month to comply with the NAFTA verdict, but indicated that it did not agree with the decision.

The ITC’s response in compliance with the NAFTA ruling paved the way for the removal of the 27.2% countervailing and anti-dumping duties on Canadian softwood lumber shipments that have been in place since May of 2002.

The U.S. appeal, which will take place before an extraordinary challenge committee composed of one American, one Canadian and one other judge from either country to be determined by a drawing, is not expected to be formally filed until next month.

“This is nothing more than a delaying tactic designed to keep the duties in effect as long as possible,” said NAHB President Bobby Rayburn. “U.S. lumber producers know their case is very weak. However, they understand that as long as the case drags on, the tariffs will remain in effect and continue to pad their bottom line at the expense of U.S. consumers.”

An extraordinary challenge is the last legal avenue available under a NAFTA panel ruling, which carries the weight of law in Canada, the U.S. and Mexico.

The U.S. has never won an extraordinary challenge under NAFTA. A decision on the case is expected in March of 2005. A loss would force the U.S. government to rescind the levies and return more than $2.6 billion in duties collected to date.

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

New ‘HousingEconomics Online’ Provides In-Depth Analysis of Housing Market

“HousingEconomics Online” is a new online publication from the NAHB Economics Group that provides the latest housing economic data, trends and key events that shape the economy. NAHB’s leading economists analyze and synthesize the housing and economic information to provide in-depth analyses of the niches and nuances of the home building market.

Launched on Oct. 1 and available only by subscription, “HousingEconomics Online” can be accessed directly at www.housingeconomics.com.

“HousingEconomics Online” replaces and consolidates NAHB’s three print monthly economic newsletters: “Home Builders Forecast,” “Housing Market Statistics” and “Housing Economics.” Subscribers now can receive the economic data and information they need from one reliable source.

Dynamic, Interactive and Updated Regularly

“HousingEconomics Online” is a dynamic, interactive Web-based forum that is updated regularly in order to provide rigorous economic, demographic and government policy analysis of market-driven macroeconomic factors including GDP, employment, interest rates and more. Subscribers have the opportunity to study the latest economic and housing data using the Desktop Analyst. Its easy-to-read tables and graphs provide monthly, quarterly and annual data for more than 250 variables.

“HousingEconomics Online” combines scientific research with practical applications in order to provide housing-oriented insights that are written in terms that builders, manufacturers and housing finance professionals can understand and apply to their own businesses.

Available at Two Subscription Levels

Available at two subscription levels — Pro and Executive — “HousingEconomics Online” includes the following features and functions:

• Seiders’ Report — A monthly economic and housing overview by NAHB Chief Economist David F. Seiders; the Seiders’ Report tracks the health of the housing industry (new construction) with analyses of major legislative, regulatory and executive actions as well as the impact of important technology. The report incorporates the results of the monthly NAHB-Wells Fargo Housing Market Index (HMI) survey, the High Production Builders’ survey, NAHB leadership meetings with the Federal Reserve and feedback from more than 800 local associations.

• NAHB Economic & Housing Forecast — An in-depth monthly forecast of economic activity, prices, interest rates and housing activity from the NAHB Economics Group.
  • The Pro-level forecast contains historical data with annual and quarterly forecasts for all indicators.
  • The Executive-level forecast contains an executive summary; in-depth details plus historical data with annual and quarterly forecasts for all indicators.

• Housing Activity — A monthly review of production, sales and prices for both the single-family and multifamily housing markets from Senior Economist Dean Crist.

• Housing Policy Focus — Monthly features from NAHB’s Federal Regulatory and Housing Policy Group.

• Multifamily Housing Quarterly — A quarterly review of news and trends affecting the multifamily housing market.

• State Metro Focus — Building permit and employment statistics broken-down by state and metro regions.

• Housing Market Statistics — All of the key data and primary indicators of the housing industry in one easy-to-navigate location, Housing Market Statistics compiles information from the Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, Federal Reserve Board, Office of Thrift Supervision, National Association of Realtors®, Mortgage Bankers Association, Department of Housing and Urban Development, Coldwell-Banker, Freddie Mac and other public and private agencies.

• Economics Calendar — A schedule of release dates for principal economic indicators and a calendar of upcoming events sponsored by, or including members of the NAHB Economics Group.

• The Archives — An extensive PDF archive of past issues of NAHB Economics Group’s newsletters: “Housing Economics,” “Home Builders Forecast” and “Housing Market Statistics.

In addition, subscribers at the Executive-level receive the following features:

• Home Builders Forecast — Home Builders Forecast, released 10 times a year, offers six unique forecast types of varied geographic/sector focus. Forecasts include a remodeling, long-term, state, metropolitan region, multifamily and non-residential sector forecasts. An economic forecast focused specifically on the housing industry, Home Builders Forecast incorporates NAHB’s survey results as well as the feedback of more than 800 local associations around the country.

• The Desktop Analyst — The source for sorting and viewing housing and economic statistics, NAHB’s Desktop Analyst allows you to view current and historical data, create custom charts and graphs and download the results for later use.

• NAHB Staff of Economists and Researchers — Access to personal insight from the NAHB economics team members who are on call to answer your forecasting questions, help you apply forecasts to your business situation and produce special tabulations of historical and forecast data.

Subscribers can choose the subscription level that best meets their business needs. To learn more about “HousingEconomics Online” or to subscribe, visit www.housingeconomics.com.

How to Manage Selections and Successfully Upsell

Good customer service helps buyers maintain a kid-in-a-candy-store enthusiasm during the selections process as well as throughout the entire home building experience.

However, you don’t want them to go into sugar shock, so to speak, stunned by so many product choices that they hold up your production schedule. And you don’t want them to go into sticker shock either, yearning for expensive items they can’t afford.

“The most important thing for a builder to do during the selections process is to be in control,” says Ed Nikles, Sr., president of Ed Nikles Custom Builder in Milford, PA. Maintaining control of the process makes it go more smoothly for everyone on the builder’s team, as well as for customers, trade contractors and suppliers. Plus, it gives builders the opportunity to boost their bottom lines with smart upselling.

Innovative trends in selections management reflect an emphasis on phasing out allowances and surprises, and on making selections earlier in the home building cycle.

Here are some techniques home builders and sales professionals use to manage the process and sell upgrades:

No Allowances — No Surprises

Home builders have traditionally given buyers stipends for certain things to build flexibility into their budgets. But some now feel that allowances are best reserved for kids — not customers.

“We stopped using allowances (for product categories) because some customers would pick out two or three pricey items and blow the budget for the rest of the house,” says Barry White, vice president of sales and marketing for St. Louis-based Taylor-Morley Homes. “Now we have a standard lighting package that allows customers to pick out lighting for the entire house and upgrade individual fixtures, if they like.”

Two years ago, On the Level, a Chaska, MN-based design/build custom home company, changed its selections process. The company tries to have all the selections (even wall colors) picked out before it sends plans for bid to trade contractors. Customers make selections during design — not afterwards. They stay involved in the process and there’s no lull in the excitement of having their home designed and then picking out their products and finishes.

“We’re trying to get away from the surprises and extras that people might not expect in the home building process,” says president Chris Thompson. “A couple of guys in my Builder 20 Club were talking about this new way to do selections. They said, ‘You should try it, because selections and change orders can be such a pain in the neck.’ ”

At first, Thompson thought the new process might scare customers away because it requires them to make a substantial deposit to have a house designed by On the Level. The company used to collect $5,000 from customers when it started design. Now, because it puts much more work into the process before construction starts, Thompson collects a deposit of $25,000. The money is credited towards the purchase price once construction is underway. Thompson keeps the deposit only if a prospect has his plan built by another builder; On the Level retains copyright and grants one-time rights to use the design.

“So far, the response has been great,” says Thompson. “People understand and like the idea of knowing what the final price will be upfront. There are no allowances at all, if possible. And no surprises, either.” No one’s ever balked at paying the deposit.

Some additional benefits of the upfront selections process; “It makes the pricing more accurate,” says the builder. “And I think we get better prices from trade contractors and suppliers.” It also cuts down on paperwork since it practically eliminates changes in the field.

Provide a Schedule and Stick to It

Often, the customers’ excitement drives them to pick out products when they’re supposed to. But sometimes they need a push.

“I tell them they can take as long as they want to make selections, but I won’t start construction until they do,” says Brad Camposo, who heads up sales and marketing for Payne & Payne Builders. Like On the Level, the Chardon, OH-based design/build custom home company does upfront selections. It gives customers a budget, designs the house (and copyrights the plan) and prices it out before contract signing.

Once they’re aboard, customers pick out products quickly. If they take a while, there is always another customer in line who has finished making selections and is ready to begin building. Payne & Payne doesn’t lose any sleep — or any time.

Taylor-Morley Homes built in time frames and deadlines to improve its selections process efficiency. Customers have 30 days from the date the contract is signed to complete all their selections in the company’s design center. They get 10 “free” hours to make selections with one of the company’s three designers and must make appointments with the designers. If they go over 10 hours, they pay $150 an hour. This puts value on the in-house designers’ time. Besides, “we don’t want customers to go over their appointment time and intrude on another customer’s time,” says White.

If it’s not possible to have products picked out before construction starts, peg selections to significant construction milestones. Nikles uses this approach and writes it into his contracts. Customers agree to:

• Select all exterior colors and products, fireplace and plumbing fixtures before construction starts.
• Select all interior products (except lighting fixtures and appliances) by the time the foundation is complete.
• Select lighting fixtures and appliances by the time the framing is finished.
• Pay a $50 late fee for every item picked out after the designated construction phase.

Alternately, you can build an incentive into the price of the home to encourage customers to stay on schedule. If they make all their selections by a certain date, they get a credit of, maybe, $5,000 towards options and upgrades. If they don’t, they loose the credit and must pay for the options and upgrades.

“It has to be all or nothing or it doesn’t work,” says Erika Geiser, vice president of sales and marketing for Las Vegas-based Christopher Homes. “Don’t give a customer part of an incentive if they pick out a couple of things on time but are late on other selections. Otherwise, they’ll say, ‘Well, I got that for free, so it doesn’t matter if I have to pay for that.’ ” And they’ll still hold up your schedule.

Show Business

Some enterprising builders allow customers to do selections online. But most believe in the sensory power of seeing and touching products to help customers decide what to put in their homes. “It’s a matter of showing them all the options,” says Thompson.

Whether you use a design center, a model home garage, a corner of your office or a sample book for selections, display items according to the market you want to sell to. Separating products by price point within their categories lets buyers make quick, budget-based decisions.

If you want to upsell, organize products by color, style or finish. For example, you can put all the browns together in the carpet display and all the antique bronze and brushed nickel together in the hardware display. “That way people are looking at appearance, not just price,” says Geiser.

Big-ticket items like flooring and countertops should be organized by price point. “We don’t want customers to go over budget and then we can’t reel them back in,” says Geiser. “If they’re off by a price point, it could be their whole budget.”

Some Successful Upselling Strategies

The way items are displayed has a big impact on perceived value. Upgraded plumbing isn’t very sexy sitting on a shelf, but show it in a cutaway under a sink in a bathroom vignette or model and it will garner a lot more interest.

Packaging and pre-pricing items speeds up the selections process and saves on paperwork. It also helps sell upgrades. Nikles sells six to eight sauna packages a year that consist of framing, seating, heater, thermometer and even a bucket and ladle. “One reason why we package it is to close on one price instead of several,” says the builder. “We can say, ‘Here’s the price and here’s what it includes.’ ”

Seventy-five percent of Taylor-Morley Homes’ buyers take its upgrade packages, which the company started offering last February. To help move them, “We price packages at a better value than if customers bought the items a la carte,” says White. Customers pay $5,000 for Taylor-Morley’s “Stars” package, which includes R-38 insulation, a bath rough-in in the basement, a smooth-top range, a super-quiet dishwasher and upgraded carpet padding. The products would cost $7,200 if purchased separately. The company also offers a “Stripes” package and some patriotic buyers take both.

To sell more upgrades, “get the selections process out of sales,” advises J. Gary Hill, vice president of sales and marketing for Greensboro, NC-based Westminster/Fortis Homes, which has 32 communities in the area. Customers used to spend a lot of time with salespeople in the company’s models picking out lots and deciding on bump-outs and other details. Then they did selections.

“Five years ago, we said, ‘Let’s not have them do selections during the sales process,’ ” says Hill. The company built a design center that’s centrally located between its communities and staffed it with designers who work on commission. These days, salespeople help customers make design center appointments after they’ve ironed out all the details with their home sale. “They’re still excited about the process, but they don’t have to do everything in one long meeting,” Hill points out.

As a result, customers buy $15,000-$60,000 of upgrades while making selections. Before Westminster/Fortis built the design center, they spent about $2,500 on upgrades.

Touchstone Homes in Lakewood, CO, upsells by capitalizing on historically low mortgage rates. “With rates the way they are, we tell customers how little it costs now to add things to their home,” says president Robert Short. “They can buy $10,000-$20,000 of upgrades for a fairly nominal increase in their mortgage payment.” Touchstone emphasizes that approach over adding items later, when prices — and rates — will likely rise.

If you’re thinking of changing your selections process to make it go more smoothly or to enhance product sales, bear in mind that it takes quite a bit of upfront legwork. You’ll need to poll your customers, staff, trade contractors and suppliers about what you can do better, evaluate your product offerings, rework or fine-tune your systems, implement the new ones — and then wait several months to gauge results.

But it’s more than worth it. Managing selections wisely yields a better process and profits for builders, fewer headaches for the people they work with and a better experience for customers. Everybody wins.

Customer Selections Guide and Selections Forms Available From BuilderBooks.com

A customer selections guide and selections forms are available from BuilderBooks.com in "Home Builder Contracts & Management Forms on Disk" from NAHB's Business Management Department. It includes 93 essential contracts and forms that will help you systematize your business, build more productively and manage more efficiently. The documents are in the following categories: sales and marketing, conctracts and agreements, trade contractors, construction management, and walk-through and warranty. To view or purchase this publication and accompanying CD online, click here, or call 800-223-2665 to order.

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.”

Other Business Management Publications Available at BuilderBooks.com

BuilderBooks.com offers a variety of other publications about business management. To view or purchase these publications online, click here.

New England to Host Fall 50+ Housing Symposium Nov. 3-4

Builders, developers, architects and other seniors housing professionals will examine New England’s burgeoning active adult and age-targeted housing market as well as national trends at the first-ever "Northeast Regional Fall Symposium: Keys to Success in the 50+ Market."

The symposium will be held on Nov. 3-4 at the Gillette Stadium Conference Center in Foxboro, MA.

Sponsored by the 50-Plus New England Housing Council, one of the NAHB Seniors Housing Council’s local councils, the symposium will feature regional speakers from the six-state area as well as nationally recognized industry professionals who will discuss how to attract today’s mature consumers to New England, one of the country’s fastest-growing active adult markets.

“This new symposium allows attendees to expand their industry knowledge, especially about consumers in the New England market,” said Bonnie Solomon, chair of the NAHB Seniors Housing Council. “The active adult industry is constantly evolving. It’s important for builders, developers and other housing professionals to stay on top of the market.”

“In the past, seniors would migrate to warm-weather states such as Arizona and Florida upon retirement, but more of them are staying closer to home,” said Jane O’Connor, co-chair of the 50-Plus New England Housing Council. She is also the managing editor for Mature Living Choices and CEO of 55 Plus, LLC, in Hawley, MA. “New England exemplifies this national trend, with dozens of active adults springing up from Connecticut to Maine. The market demand is there, and builders are starting to respond to it.”

The Northeast Regional Fall Symposium will show builders how to meet this demand with marketing, merchandising, community design and community amenities. The two-day conference will include eight sessions covering topics including planning issues, branding and marketing, marketing technology and effective merchandising techniques.

The cost of the symposium is $195 for members of the 50-Plus New England Housing Council and $295 for all other attendees.

Register online at www.bagb.org/50plushousing.htm or e-mail Catie Ruggiero, Builders Association of Greater Boston, or call her at 617-773-1300.

The Northeast Regional Fall Symposium is modeled after Building for Boomers & Beyond: Seniors Housing Symposium, NAHB’s popular education and networking conference held each spring.

Enter the 2005 Best of Seniors Housing Awards — Entries Due Nov. 5

Enter your community design, clubhouse, models or marketing and merchandising in the 2005 Best of Seniors Housing Awards competition. The deadline for entries is Nov. 5.

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.

HUD Reverses Decision on Fair Market Rents in Response to NAHB Concerns

The Department of Housing and Urban Development has reversed its earlier decision to adopt new metro definitions for its list of 2005 Fair Market Rents, after NAHB and others expressed serious concern that the new definitions would have had a drastic impact on markets across the country.

Under the proposed new definitions that were released in August, for example, in part of Bristol County, MA, the rent on a two-bedroom apartment would have dropped as much as $700.

In the “final” Fair Market Rents that were released on Oct. 1, significant differences in rents between this year and next remain, but they are far less drastic than on the list proposed this summer.

In a departure from previous years, HUD has announced that it may continue to revise the “final” 2005 Fair Market Rents and it is accepting comments on them through Nov. 5. As usual, NAHB will submit comments.

For full details, including the complete list of FMRs, click here.

NAHB’s Housing Credit Certified Professionals Expand on IRS Information

Following up on answers from the Internal Revenue Service to a tricky question on the management of low-income housing and whether managers can allow disabled persons who are not 55 or older to reside in a property designated for seniors (NBN, Sept. 20, 2004), members of NAHB’s HCCP (Housing Credit Certified Professional) Board of Governors and the Housing Credit Group have provided additional information to help clarify the issue.

There are only three exemptions to Fair Housing law that allow “housing for older persons” that discriminates against families with children, according to A.J. Johnson, a nationally-known development and compliance consultant.

Under the 1988 Fair Housing Act, senior housing must be:

• Housing that the secretary of the Department of Housing and Urban Development has determined is provided under a federal or state program or a program designed for occupancy by elderly persons. (HUD itself has not designated any programs under this exception, which is why Section 8 must accept children.)
• Housing in which all persons in all units are 62 or older.
• Housing in which at least 80% of the units are occupied by at least one person who is 55 or older. An owner may decide to further restrict the units — for example, by requiring all of the unites to be occupied by at least one person 55 or older.

The Age Discrimination Act of 1975 prohibits discrimination on the basis of age in programs or activities receiving federal financial assistance. It has been determined that bonds and tax credits are not considered federal financial assistance under this law. Only funds that come directly from a federal agency such as HUD or the Rural Development Administration are relevant.

HUD programs for seniors define elderly as "age 62 or older, handicapped or disabled." Section 8 properties may provide a preference for seniors, but a percentage of units must be held for the disabled, regardless of age.

The bottom line is that if a property wants to be considered a senior property and does not have HUD financing, at least 80% of its units must be occupied by at least one person who is 55 or older; disability is not an issue. If more than 20% of units are occupied by the non-elderly, the property will be considered a family property and must accept families with children.

The NAHB University of Housing Offers HCCP Designation

The NAHB University of Housing offers the Housing Credit Certified Professional (HCCP) designation, a specialized designation for developers, property managers, asset managers and others working in the affordable housing industry. Click here for more information.

‘Class of 2004’ CGR Graduates Honored During Remodeling Show

The 2004 Certified Graduate Remodelor™ (CGR) designees were honored during a graduate recognition ceremony hosted by the NAHB Remodelors™ Council during the Remodeling Show in Chicago earlier this month. CGR is an industry-recognized, professional designation designed to emphasize business management skills as the key to a professional remodeling operation.

This year, a record 149 remodelers graduated from the CGR program. The number of 2004 CGR graduates exceeds last year’s record of 131 designees and brings the total number of graduates since the program's inception in 1988 to 1,268. For a complete list of the 2004 graduates, click here.

CGR is a national designation program under the auspices of the NAHB Remodelors™ Council. The program recognizes active management and technical experience in all phases of a remodeling business and requires the completion and continuation of specified education coursework and a commitment to professionalism. 

CGR is the only remodeling industry designation program that emphasizes business management skills, with course content divided into five key areas to help remodelers build and grow competitive remodeling businesses:

• Sales and Marketing
• Business Administration
• Design, Estimating and Job Cost
• Contracts, Liability and Risk Management
• Project Management

A remodeler earns a CRG designation after first completing a three-hour evaluation of their remodeling and business knowledge to determine how many courses they are required to complete to take in each of the five key content areas of the program. Then, upon completion of the required coursework, the remodeler graduates from the program and receives CGR designation.

The NAHB University of Housing Offers Designation Programs and Other Courses

The NAHB University of Housing offers CAPS, CGR, CGB and a variety of other professional designation programs and business management courses that set builders and remodelers apart from the competition. To learn more about NAHB’s designation programs, visit www.nahb.org/designations. For a complete list of all current education offerings, click here.

Remodeling Publications and Resources Available Through BuilderBooks.com

BuilderBooks.com offers a variety of publications for remodelers to hone their business and technical skills. To view or purchase these publications online, click here, or call 800-223-2665 for more information.

Don't Worry, Be Active and 'Co-opetitive' in Your Council

My partner and I are very active members in our local Remodelors™ Council, the Winston-Salem Remodelors™ Council. When I first joined the council, I remember I did not want to really tell the council how our company operated. I felt I would give away some of the competitive advantage we had over other members in the organization.

Over the years, however, my thought process has changed. I think it is critical for all Remodelors Councils™ to share information. We need to educate everybody in the Remodelors™ Council. This will help the other members of the council as well as our industry.

This not only applies to members of the Remodelors™ Council, but to any other trade group out there. I am not saying KFC should give out their secret recipe, but I am saying we should share best practices that will benefit all parties and raise the bar of professionalism in the industry.

For example, I often discuss with my fellow council members how to handle customers saying they will be “getting three other bids.” I think that, as a group, we need to develop a response that will be in the best interest of the members as well as the customers.

I also discussed with my peers why we charge for estimates. Our rationale made other members think a little more about their business. Isn’t that why we are there, to help each other? Is industry-specific training something I should share with other members? Absolutely.

I want everybody to get as much training and education as possible. Maybe all of our members can get their Certified Graduate Remodelor™ (CGR) or Graduate Master Builder (GMB) designations. By sharing information with each other, we make our industry even more appealing to the public.

I certainly do not have all the answers for our industry and neither do you. But when we all work together, we can get a lot of those questions answered.

So take an active role in your local organization. Don’t be afraid to share information. You will be surprised about how much you learn.

Improper Scaffolding Foremost Violation Cited by OSHA

Poorly constructed scaffolding is the most frequently cited violation of construction and remodeling standards by the Occupational Safety & Health Administration (OSHA), according to David Coble, a former OSHA inspector and now safety consultant with North Carolina-based CTJ Safety Associates.

Coble, who has more than 31 years experience in safety and health, discussed “Avoiding the 25 Most Cited OSHA Violations in Remodeling” at the Remodeling Show in Chicago earlier this month. The citation information was obtained from the OSHA Web site and based on 2002-2003 data, the most recent data available, Coble said.

He said common scaffolding violations cited at job sites included:

• Not having the scaffold deck fully floored
• Not having the scaffold level or capable of supporting its designated load with the proper use of screw jacks, footings, etc.
• Not providing safe access for each scaffold
• Not providing proper fall, or falling object, protection — guardrails, midrails, toe boards, screens and debris netting
• Not having scaffold components approved by a competent person on the job site
• Not having the scaffold inspected daily

Coble also said access should be provided by fixed ladders.

The other 25 most often cited OSHA standards for construction and remodeling for 2002-2003, according to Coble, included:

#2 Fall Protection

While fall protection is required so that employees will not fall more than six feet, Coble suggested that fall protection be provided for a minimum of four feet.

#3 Ladders

Fall protection for fixed ladders is provided so that employees will not fall more than 24 feet and that portable ladders must extend at least three feet above the point of support.

Coble suggested that all ladder users be trained to maximize safety at the job site.

#4 Electrical Wiring Methods

Common violations cited, according to Coble, included:

• Not protecting all light bulbs from damage by using a cage, protection screen, etc.
• Not protecting flexible cords from damage
• Not covering all knockout holes
• Not covering all circuit breaker holes
• Running cords through walls, ceilings and floors

#5 Stairways

Coble indicated that temporary stairways that were not built to specification were often cited. These specs include:

• Stairs must be installed between 30- and 50-degrees.
• The rise and tread width must be uniform.
• Stairs with four or more risers or rising above 30 inches must have stair rails.

#6 General Safety and Health Provisions

To meet this standard, Coble said employees must be trained to work safely, use proper tools, store tools safely and have tools guards on power tools.

#7 Fall Protection Systems

Coble said comprehensive fall protection systems, where applicable, should be in place to avoid citations. He said proper systems, such as roof anchorages, only added about $200 to the cost of a house but saved much more than that in workers compensation.

Fall protection systems include:

• Guard rails with midrails and toeboards
• Safety net systems no more than 30 feet below the working level
• Safety net systems inspected weekly
• Fall arrest anchorages that support 5,000 pounds per employee
• Controlled access zones at least six feet from the edge

#8 Electrical Wiring Design and Protection

Coble stressed the need for all handheld tools to be grounded or double-insulated. He said ground fault circuit interrupters (GFI) or an assured equipment grounding conductor program should be in use to avoid citations and injury.

He also said inspectors looked for overhead open conductors that were not installed at the proper height —10 feet above grade for job sites in general, 12 feet above grade for vehicular traffic, 15 feet above grade for truck traffic and 18 feet above public streets.

#9 Head Protection

Coble said hardhats are required where there is a danger of falling objects, impact or electrical shock and that hardhats should meet manufacturers’ requirements or ANSI Z89 standards. He noted that decals placed improperly on hardhats have been known to transmit electricity and cause serious injury and even death.

#10 Hazard Communication

Coble said OSHA inspectors cited job sites where hazardous chemicals were present and a written hazard communication plan was not developed or the chemicals were not properly labeled or marked with a warning.

#11 Aerial Lifts

Among the more common violations for aerial lifts were:

• Lifts being used by unauthorized or not properly trained personnel
• A lack of body belts or lanyards to keep the employee on the basket floor so he would not be thrown
• Not using the lifts according to the manufacturers’ recommendations

#12 General Electrical Requirements

Among the general requirements often cited were:

• Electrical equipment not meeting the proper NEMA rating
• Electrical equipment not protected from damage
• Unapproved gang boxes
• Spliced flexible cords or cords that are not of continuous length
• Circuit breakers that are not properly labeled

#13 Fall Protection Training

Coble said fall protection systems should be reinforced with fall protection training if citations are to be avoided.

#14 Scaffolds

In addition to the proper placement and use of scaffolds, Coble said scaffold citations were given by OSHA inspectors if the scaffold was not built according to the manufacturers’ specifications and OSHA and Scaffold Industry Association (SIA) standards.

#15 Housekeeping

In general, Coble said job sites littered with garbage, debris and scraps were subject to citations. He said debris should be removed on a regular basis and that forms and scrap lumber should be free of protruding nails.

#16 Construction Training and Education

Not only should employees be trained to recognize and avoid hazards, Coble said they should be trained to work in confined or enclosed spaces, to work with caustics and other harmful substances and to avoid harmful plants and animals.

#17 Concrete and Masonry Construction

To avoid citations:

• Reinforcing steel and rebar should have proper impalement protection.
• Only qualified employees should perform post tensioning.
• Riding in concrete buckets is forbidden.

#18 Scaffold Training

Citations are often given when people who work on scaffolds are not trained in how to use scaffolds or recognize hazards. Retraining is conducted when deficiencies are found in the original training program.

#19 Eye and Face Protection

To avoid citations, eye and face protection must meet — and be properly marked that it meets — ANSI Z87.1 standards.

#20 Fire Protection

Among the requirements for fire protection required at the job site are:

• Fire fighting equipment must be conspicuously located.
• Fire fighting equipment must be periodically inspected.
• A fire alarm should be provided.

#21 Woodworking Tools

Two safety requirements Coble stressed regarding woodworking tools are that:

• Saws and sanders are properly guarded.
• Each saw and sander must have an anti-start device to protect workers from accidents when power is interrupted.

#22 Excavations

Coble stressed that excavations and trenches should be properly supported and inspected weekly and that an approved ramp or ladder should be located at least 25 feet from each employee in the trench or excavation.

#23 Lead

Coble said potential lead-containing materials needed to be inspected before exposure and that if exposure exceeded the OSHA permissible exposure limit (PEL), controls would have to be implemented.

#24 Gas Welding and Cutting

Coble said oxygen and fuel gas cylinders should be separated in storage by 20 feet or by a five-foot high wall that meets OSHA specifications and standards. He also said the equipment should be used by properly trained personnel.

#25 Fall Protection in Steel Erection

Specific fall protection requirements must be met regarding steel erection. These include:

• Each employee engaged in steel erection must be protected from falling more than 15 feet.
• Connectors must be provided from falling more than 30 feet or two stories, whichever is less.
• A controlled decking zone must be established.

Efforts to Solve Liability Insurance Problem Continue

Results from NAHB’s most recent “Critical Issues Survey” (this link is accessible to members only)identified fast-rising costs and diminishing availability of general liability insurance (GLI) as the top concern of the association’s membership. That concern, however, has led only a small number of builders to participate in the GLI data-gathering initiative, according to NAHB’s senior leadership.

In partnership with Marsh, the global risk management firm, NAHB attempted to gather insurance data from builders in order to provide a more accurate picture of the residential construction industry’s loss experience.

Five months into that project, however, NAHB and Marsh had collected only 10% of the 4,000 survey responses from builder members that were needed.

Despite the low survey response rate, NAHB is continuing its efforts to solve the GLI problem, according to Kent Conine, the association’s immediate past president and chair of the GLI Task Force.

“In late August we met with Marsh and told them we need to find an alternative way of bringing new products to market,” Conine told the NAHB Executive Board during the recent fall board of directors meeting in Columbus, OH. “And that’s where we are now. Marsh is looking at this, and we are waiting for them to get back to us with an alternative that does not require collecting all this data from our members.”

“We’re doing all we can to make this work,” Conine said. “And we’re doing it because our members have made it clear they want us to address this problem. We hope to have a response from Marsh some time this fall. We’ll continue to work with Marsh to develop new GLI products for our industry.”

For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.

Legislative Group Makes Workforce Housing a Priority, Cites Regulatory Excess

The American Legislative Exchange Council (ALEC) — an influential, bipartisan coalition of state legislators from across the country — has formally adopted a model resolution supporting NAHB’s workforce housing initiative. The resolution was introduced by NAHB at ALEC’s annual meeting in Seattle in mid-summer and adopted as policy a month later.

Reflecting NAHB President Bobby Rayburn’s view on housing America’s working families, the ALEC endorsement will give a significant boost to legislation and policies that promote the mission of providing moderate-income employees the opportunity to obtain affordably priced housing in, or near, the communities they serve.

Emphasizing the need to house people like teachers, firefighters and police officers, the resolution advocates these policies in support of workforce housing:

• Action by the states to eliminate cumbersome housing and development regulations and excessive fees and exactions
• Enactment of state “notice and opportunity to repair” legislation that provides builders with the opportunity to resolve differences with home buyers before a lawsuit is filed
• Partnerships involving home builders, community groups and local governments to enhance affordability and to increase the production of affordable housing

The resolution notes that families working in central cities have less than a one-in-three chance of finding a home that they can afford and the situation is slightly worse in the suburbs. And it identifies state and local regulatory barriers as part of the problem, pointing out that governmental delays and excesses can add as much as 20% to the cost of building a home in some areas of the country.

For more information on this model resolution, e-mail Carlos Gutierrez, NAHB’s director of industry relations, or call him at 800-368-5242 x8242.

Expert at SHOWCASE 2004 to Address Insurance Liability Woes

At the upcoming SHOWCASE 2004, an expert in the insurance industry will address the difficulties that builders are experiencing in finding and paying for general liability insurance in today’s tough marketplace.

At the invitation of the Building Systems Councils, Bob Robinson of Illinois-based Captive Resources will present "Introduction to Captive and Alternative Insurance Options" on Tuesday, Nov. 2, from 1:30-3:00 p.m. Robinson will provide an overview of captive insurance programs and offer some alternatives to traditional methods of insuring your company.

Several educational breakout sessions are scheduled during the conference, with topics including: earning profits through the sales of options and upgrades; the International Code Council's new Log Construction Standards; and motivating your workforce when money is scarce.

Although online registration for SHOWCASE 2004 has closed, on-site registration is available. This trade show, educational conference and networking event will be held Oct. 31-Nov. 3 at The Hilton Austin in Austin, TX.

For more information about SHOWCASE 2004 or the Building Systems Councils, call 800-368-5242 x8576.

Award-Winning Construction Training Program Expanding in Mississippi

Project CRAFT (Community, Restitution, Apprenticeship-Focused Training) is off to a successful start in Jackson, MS, following an agreement in May between Donald Taylor, executive director of the Mississippi Department of Human Services, and NAHB President Bobby Rayburn to start up the award-winning Home Builders Institute (HBI) program in that area.

Under a short-term agreement with MDHS, eight 16- to18-year-olds are currently receiving pre-apprenticeship, industry-validated training in Jackson in preparation for jobs in the local home building industry.

The program has already proved to be so successful that MDHS has signed an additional one-year agreement to train 20 more youths from the state’s Rankin, Madison, Hinds and Warren Counties.

“It would have been a tragedy to see a program that is an asset to the community, the youth it trains and the industry that employs them suddenly end,” said John Travis, of Travis Construction and president of the HBA of Jackson. “It isn’t often you can point to a training program for kids or adults, and honestly say — hey, this one does work.”

Another component of Project CRAFT is public service in which students take time out from their instruction at the center to help the community.

Project CRAFT is the first program of its kind in the area, providing at-risk youth with a second chance, and community leaders have welcomed the effort, including this recognition: “I, Johnny Price, county youth judge of Warren County, Mississippi, am pleased that Project CRAFT does offer great opportunities for the youth in my county.”

Recognized by Congress as a national model in training and job placement for at-risk youth, Project CRAFT currently operates in Florida, Texas and New Jersey with funding from state agencies, such as MDHS. In Tennessee, the program is funded by a Youth Reintegration Program grant from the U.S. Department of Labor.

For more information on Project CRAFT/Jackson, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908.

Survey by Insulation Manufacturer Finds Builders Need to Step Up Marketing of Green Materials

By taking a more aggressive marketing approach, home builders and contractors have a huge opportunity to tap a growing and potentially profitable market for green and energy-efficient materials and products, according to a survey released this past summer by Icynene Inc. and the NAHB Research Center.

Headquartered in the greater Toronto area, Icynene is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

Nearly half (46%) of those responding to the survey — which was conducted among consumers expecting to buy a new home or to spend more than $10,000 on renovations in the coming year — said that they were eager to incorporate green products into their homes, especially if they save money.

But the survey indicated that builders weren’t doing a very good job of selling green or energy-efficient products to their customers:

• Only 14% of those polled said that their builder or contractor had told them of green or energy-efficient options and provided information about their benefits and cost advantages.
• Of the respondents who said that they did not plan to invest in green products, 56% said it was because they were not aware of available options and 23% said it was because their builder or contractor did not tell them about these options.

The survey provided substantial evidence that builders can enhance their business by providing green products. In choosing a builder, 55% of survey respondents said that offering energy-efficient windows and doors would be a plus; 52% would be swayed by those offering energy-saving appliances and 51% would give a preference to those offering insulation that delivered significant energy cost savings over conventional insulation.

Among other survey results:

• In selecting building materials, 83% of the respondents said that the product’s ability to make the home more durable and last longer was their top priority, followed by its ability to reduce home operating and maintenance costs (76%).
• Nearly two thirds (64%) said they were willing to invest $1,000 or more on upgrades that deliver monthly energy savings of up to 50%; nearly 20% were willing to invest more than $5,000.
• More than half of the respondents expect a builder or contractor to provide them with a range of insulation options, including installation costs and potential savings over time.
• Nearly a third (28%) expect a builder or contractor to use the most energy-efficient insulation as standard practice regardless of the installed cost.
• An energy guarantee from a builder or contractor would encourage 55% of respondents to invest more in energy-efficient upgrades if a builder or contractor provides an energy guarantee. Icynene notes that builders can address this challenge by using products like the Icynene Insulation System®, an expanding soft foam insulation. Icynene is a participant in Environments For Living®, a program that offers home owners a range of energy use guarantees.
• While more than 80% of respondents say the desire to save money is the major factor in their decision to consider green building materials, builders can increase the marketability of green upgrades by showing how cost-savings, home durability and health benefits are often linked. For example, a product like The Icynene Insulation System® creates a continuous air barrier that helps deliver energy-cost savings of up to 50% over conventional insulation, while sealing out outdoor air pollutants and minimizing the conditions in which mold will grow, says the manufacturer.

Why Let Experience Win Out All of the Time?

I was looking to hire a contractor the other day. All my old faithfuls were busy, so I was left with finding a newbie. But who?

Who indeed? As I’ve stated before in this column, at the top of my list of criteria is trust. But you can’t trust someone you don’t know, so for this search, trust was out. Next was experience.

I wanted to find a builder with at least some gray hair — a person who’s been around the block. Which got me thinking, why not use a young person?

I thought back to my own experience as a young man struggling to carve out a niche in the engineering business. Green as a gourd, I really didn’t have much going for me, but I put on my best face and entered the marketplace anyway. I quickly discovered that the only people who would hire me were the very ones I did not want to be hired by. Deadbeats and wannabes, those were my main clients for the first few years. I swear I spent as much time collecting fees, often in vain, as I did actually working.

Back then, I thought I was pretty hot stuff, and that my profession was handing me a raw deal. Why couldn’t I get the big-time clients — the ones who just handed you work and paid on time, without haggling? But now that I’m the one with the gray hair, I have a different point of view.

My cull-clients got what they paid for — cull-work.

Okay, so it wasn’t that bad, but certainly my early work would not have won any awards. For example, if you read my recent column on over-engineering (NBN Online, Aug. 9, 2004), some of that was based on first-hand experience.

How could I have done better? How can any green entrepreneur in the construction industry do better? The blunt answer is that you can’t expect to achieve greatness until you’ve gotten a lot of experience under your belt. There is no substitute for experience — not school, not seminars, not fancy equipment, not anything. But how do you get that experience when no one wants to hire you? This is the classic Catch-22. Here are a few tips:

• Be trustworthy — always. Whatever you say, make sure it is the bold-faced truth, beyond reproach. Break someone’s trust and you’re doomed. Trust is the most important tool in your belt. Never forget that.
• Be friendly. People like working with friendly people. In general, the older they get, the more jaded and impersonal business men and women become. Young people need every edge; this one is a gimme. Be nice, be enthusiastic and smile. It pays.
• Go the extra mile. When you’re done with a job, you want your clients to be so thrilled that they sing your praises (loudly). This won’t happen unless you go above and beyond, and your costs stay in line.
• It’s who you know. I’ve hired contractors just based on who they knew. When you’re talking with prospective customers, don’t be afraid to drop a few well-respected names. Of course, if you drop a name, be prepared for the prospect to follow up on it.
• Flaunt what you’ve got. If you don’t have experience, perhaps you’ve got education. Or maybe you previously worked for a large, well-known company. Or maybe you’ve got a lot of impressive equipment or machinery. Though not as good as experience, whatever bragging rights you have, let your potential clients know about them.
• Lastly, be sure you’re really ready for the role of business owner before you jump. Some of us seem to be born with the entrepreneurial spirit, just itching to jump into the game. I was 32 when I made the leap. It certainly wouldn’t have hurt me to wait a few more years, especially if I would have been able to spend those years working under a seasoned pro, learning like a sponge.

To summarize, would I hire a young person? Not normally. However, for small jobs, if he or she met all the criteria listed above, I might. And if I do, that young person had better dazzle me. That’s the way to establish a position on my preferred list — a place highly coveted by his or her competition.

Tim K. Garrison P.E. of ConstructionCalc.com has authored books and short courses and lectures on topics relevant to builders. Got a technical or management issue? E-mail buildersengineer@constructioncalc.com. Tim reads every one.

This column cannot be reprinted without permission from the author.

The views expressed in this article represent the personal views, statements and opinions of the author and do not necessarily represent the views, statements, opinions or policies of the National Association of Home Builders. NAHB does not necessarily endorse any of the views expressed by the author and NAHB is not responsible for any direct or indirect consequences arising out of the views expressed in this article.

Earn National Recognition for Workforce Housing Projects

Builders, architects, designers, developers and land planners nationwide are invited to submit entries for the Innovation in Workforce Housing Awards. Entering is easy, but the deadline is fast approaching.

This new award recognizes outstanding communities across the nation that provide decent and affordable homes for nurses, police officers, schoolteachers and other service personnel close to the places where they work.

Communities on which there has been work between Jan. 1, 2002 and Oct. 29, 2004 are eligible.

Winning entries will be selected by a panel of builders and multifamily and land development experts based on criteria including: exterior and interior design, sales success, construction quality/cost efficiency, successful management of any impediments and the level of cooperation among various stakeholders.

Award winners will be announced at the 2005 International Builders’ Show in Orlando, FL, Jan. 13-16. 

For more information, including eligibility requirements and an application form, click here, or e-mail Kym Kilbourne at NAHB or call her at 800-368-5242 x8447.

Entries must be postmarked no later than Oct. 29.

Northern Kentucky Builders Prepare for Housing Disaster Response

Building contractors and suppliers in the Northern Kentucky area are being prepared to respond to housing-related disasters in their community such as tornadoes, floods or terrorist attacks.

A workshop on community emergency response is being held Nov. 18-20 in Fort Mitchell, KY, by the Home Builders Care Assistance Fund of Northern Kentucky, which is the charitable foundation of the Home Builders Association of Northern Kentucky.

The 20-hour program is being co-sponsored by the Kentucky Office of Homeland Security, the Kentucky Office of the Citizen Corps and the Emergency Management Institute.

The association is also in the process of developing a guide listing home building suppliers and contractors that will be available to provide emergency housing services. Information is being compiled until Dec. 1, and the guide will be distributed to community and social agencies.

The association’s charitable arm has also been involved recently in providing pre-apprenticeship training in carpentry for the region’s Hispanic students. Additional construction training for minority students is being planned for next year.

For disaster workshop registration information, click here, or e-mail Karen Lefebvre at the association, or call 859-331-9500.

Member Advantage: WorldPoints^sm Platinum Plus® MasterCard® Credit Card

NAHB members are invited to apply for the only credit card that supports NAHB each time a purchase is made and rewards cardholders with points for travel, cash, brand-name merchandise and  more.

Click here to learn more about the rates, fees, other costs and benefits associated with the use of the NAHB WorldPoints credit card from MBNA America Bank. Use the online application today.

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.

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.

Attend Upcoming Sunbelt Builders Show in Texas

Register and attend the fourth annual Sunbelt Builders Show/Building Solutions Conference to be held Oct. 20-23 in Grapevine, TX.

Presented by the Texas Association of Builders, the Energy & Environmental Building Association and NAHB, the show features seminars, panels, certification programs and more than 300 exhibitors for builders, custom builders, remodelers and contractors working in the Southwest building market.

The Sunbelt Builders Show will be held at Gaylord Texan Hotel & Conference Center in Grapevine. For more information or to register, go to www.sunbeltbuildersshow.com.

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.

Awards Programs Deadlines

Awards Program	Entries Due
Innovation in Workforce Housing Awards	Oct. 29
Best of Seniors Housing — Celebrating Excellence...Visions of the Future	Nov. 5

 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.