Print-All Page: April 11, 2005

Grappling with shortages of developable land, soaring construction costs, rising interest rates and real estate speculators, five top developers who addressed NAHB’s Pillars of the Industry Conference in Miami last week voiced confidence in the outlook for their businesses and discussed some of the things they are doing to ensure that their companies continue to prosper even in the face of adversity.

Land prices and the ever lengthening process for obtaining development entitlements were at the top of the complaint list.

“Land prices are really up,” said Ron Terwilliger, chairman and CEO of Trammell Crow Residential and chairman of NAHB’s Multifamily Leadership Board. In some markets, such as Washington, D.C. and hot cities in California, it has become “virtually impossible to price for rental” development, he said. “All the land seems to be condo land.” And those condos are becoming even more high-priced because construction costs have been up as well. For example, high-rise costs are up about 40% in Washington, D.C. in the last 18 months, he reported.

With the population growing over the next 10 years at least as briskly as it grew over the preceding decade, Stuart Miller, president and CEO of Lennar Corp., said that the demand side for housing is healthy. “But the supply of new product is more and more constrained” because of no-growth regulation of land.

Driving escalating land prices is “a real scarcity in finding immediately developable home sites for the demand that is out there,” he said.

And with “the ability to move to the outskirts of communities becoming more limited,” Miller said his company is looking for, and finding, new opportunities for growth at infill locations. Lennar last month announced that it was acquiring from Roseland Property Company home sites for 2,500 condominiums in New Jersey and Boston. About 15%-20% of the company’s business today — which is expected to total $1.2 billion on 42,000 homes this year — is in multifamily, he said.

Miller said that he is continuing to see a strong desire among households to own a home as “a good place to accumulate capital and a great forced savings plan,” and that urban condos are providing that opportunity, along with the ability to escape worsening traffic and enjoy the amenities of living close in. New singles, empty-nesters and second home buyers are all driving forces in the condo market, he said.

Rising interest rates and home prices could create some limitations for the condo market, Miller said, “but we haven’t seen them yet.”

Preparing for the dampening effects of rising mortgage interest rates, Ara Hovnanian, president, CEO and director of Hovnanian Enterprises, said he welcomes “going back to a more normalized pace” of price appreciation and away from the “frothiness” that has characterized both the single-family and condo markets in recent years. In his view, “A solid, slowly appreciating marketplace is better.”

Hovnanian also said that he is relatively comfortable with the outlook for slowly rising mortgage rates that are accompanied by a strong economy.

Projecting $5.5 billion in sales this year, up from $4 billion in 2004, Hovnanian is opening many new locations in highly regulated markets in California, the East Coast and Florida, and is offering a wide variety of products at many price points to address affordability concerns.

With the land market getting “bigger and bigger and scarier” and $100 million transactions now commonplace, Hovnanian said that the trend to “verticality” is accelerating. Developers are going to 10 stories or higher, he said, where it used to be one to three stories.

“You can’t get entitlements for the countryside home with the picket fence,” he said, and buyers are making changes on the demand side to accommodate that reality.

In the Northeast, he said that it is taking four years to get through all of the entitlements if the land is already zoned for what you want to build.

Building mostly mid-rise rentals at a density of 40-80 units to the acre in such areas as Washington, D.C., Atlanta and Florida, Chris Wheeler, CEO of Gables Residential, said his company remains focused on high job growth markets and areas of those markets where you can still find land.

Apartments are typically being built on sites of former office buildings and movie theatres. “There are no more garden apartments,” he said, “when you’re paying $40,000-$80,000 per unit for land.” More and more of his product is being built out of steel and concrete than stick, he added.

Gables has been repositioning itself by selling off anything that could be considered less than an A+ apartment building in its porfolio as well as focusing all its acquisitions on “the good stuff.” He also said the company is sitting on cash because it wants to be in the position to buy properties for conversion back to rental apartments when the condominium market starts to turn down.

“The wheels are going to come off fairly quickly” on the condo market, he predicted, in super-charged markets such as South Florida “where you can convert a garden shed today.” That region was responsible for the conversion of 12,000 units last year, he said, a number that represents 20% of the condo conversions in the entire country.

Located smack dab in the middle of Miami’s condo market, one of the hottest anywhere, Jorge Perez, chairman of the Related Group of Florida, said that his company has followed the huge demand for homeownership in South Florida by transforming itself from a company building 90% rentals 10 years ago to one that is delivering 90% condominiums today.

Perez said that his company found comparable costs for the construction of rentals and condominiums, but condo profits are three to four times higher.

While bullish about the long-term outlook for the Miami market because of its appeal to buyers from South America, Europe and even the Orient, Perez said that he does have some concerns about the “feeding frenzy that continues today.” Five years ago, he said, “we had real buyers,” but today the condo market is being driven by investors and speculators. Before even breaking ground, 60%-70% of his units are sold in buildings that won’t be completed for three years, he said.

Price differences between prime building sites and secondary sites are increasingly being squeezed by the market, he said. “We’re very afraid of the market,” he said, especially of the very high prices that are being paid for less than optimal sites.

“We think there will be a correction,” Perez said, “but we have stopped trying to guess when and how deep.”

In the meantime, South Florida’s conversion craze is rapidly depleting the area’s rental housing supply, and rents are getting pushed up. Perez said his company has only 10,000 units in its rental portfolio; 99% of them are occupied and the rents are moving up substantially.

However, there still remains a huge gap between prices in the rental and condo markets, he said, and there will have to be a correction before the rental housing market completely recovers.

“We are staying very liquid,” said Perez. “There a lot of players who shouldn’t be in the market and there will be opportunities to purchase in coming years.”

Condos Hot While Rental Market Warming Up

Today’s red hot condominium market may be all the talk among the nation’s multifamily home builders, but rental properties are poised for a gradual comeback, according to economists speaking at NAHB’s Pillars of the Industry Conference in Miami on April 3-6.

Market-rate rental apartments are beginning to fill up faster and command higher rents, the housing analysts said, as the high cost of for-sale housing and rising mortgage interest rates take some of the urgency out of the home buying stampede that has lured away many prospective renters over the past few years. Employment growth is also continuing, another plus on the demand side for rentals.

The strong condo market is also helping to close up supply imbalances on the rental side. With land and construction prices soaring in the frothiest markets, condominium building and conversions are far more financially feasible than rentals, the conference speakers said. They did, however, caution developers about watching the condo market closely, because it may be only a matter of time before it starts to cool.

“Single-family housing has been a huge competitor with rental, but that is changing,” said Ron Witten, president of Witten Advisors, which tracks development and acquisition opportunities in the nation’s 42 top apartment markets.

Single-family home prices have been rising rapidly, averaging 11% from the fourth quarter of 2003 to the fourth quarter of 2004, but have been galloping along at an even faster annual pace — in the 20%-30% range — in some markets, especially in California and on the East Coast. Rents, on the other hand, have been flat until fairly recently. As a result, home buyers are now paying a significant premium to own over renting, Witten said, a decisive factor for households who are finding themselves priced out of for-sale opportunities.

The affordability index of the National Association of Realtors® has been “riding high” despite dramatic price increases because of low interest rates, said NAHB Chief Economist David Seiders, but that index should now start losing ground, especially for first-time buyers.

Mortgage rates, currently in the 6.0% range, should climb to 6.5%-6.6% by the end of this year, Seiders predicted, and 7% in the latter part of 2006.

On the condo side of the multifamily housing industry, there is a scarcity of useful data on inventories, Witten said, but “for the moment, the news is all good.” The condo share of the market has been moving up, with 125,000 condo starts accounting for 36% of production last year. By comparison, market-rate rentals were down 25% to 140,000 units, he said. In addition, according to Real Capital Analytics, 60,000 rental units were purchased last year for conversion to condominiums.

Seiders calculated that there are now 375,000 units in buildings with five units or more in the pipeline, with all of the upward movement attributable to condos. Completions, which have been running at about 350,000 units annually, may be up some this year, again because of the surge in condos. “Supply and demand issues with condos are possible,” he advised.

On the rental side, Seiders forecast “a movement from weak markets with high vacancy rates to strong markets with low vacancies.”

The absorption rate of new apartments within three months, which had been on the decline since 2000, has now stabilized at about 60%, he said, but they are still not being “gobbled up the way they were in the mid-90s,” when the rate was 75%.

Witten predicted that this year should see the growth of 300,000 renter households, up from 275,000 last year, and that the market for Class A and B rentals should continue to move towards equilibrium, which occurs at about a 95% occupancy level.

Witten said that Las Vegas, Los Angeles and Riverside-San Bernardino, Calif., would be the best lease-up markets for multifamily developers this year. Austin, Texas; Orlando, Fla.; and Seattle are expected to be the three strongest markets for acquisitions, with at least a 4% return during the first year of ownership.

Nation's Building News Will Not Be Published Next Week

The Nation's Building News staff will be attending the NAHB Spring Board of Directors meeting this week. We will resume publication on April 25.

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NAHB Is Your Business Partner

If you were one of the record 105,000 housing professionals who attended this year’s International Builders’ Show in Orlando, then you saw for yourself that nobody puts on a show like NAHB. From the largest assembly anywhere of cutting-edge building products and services to presentations by expert speakers on the issues that are shaping our industry, in four super-charged days NAHB’s annual exposition provides the resources and the ideas that can keep your business ahead of the competition.

NAHB is the best business partner you could have, not just at the start of the year but all year long. I am committed to providing our members with the tools they need to score success in an industry that is always fraught with challenges. We are fired up about prospects for housing in 2005 and we are ready to deliver. In the coming year, we’re going to continue to focus on what NAHB does best, and we’re going to do it better than ever.

One of our top priorities is improving the business environment in which we all operate. This means eliminating the regulatory barriers that frustrate our efforts to supply the housing that is sorely needed in our growing communities. And it means empowering our members with educational opportunities so that they will have the wide range of abilities needed to prosper in the home building business — to assess your marketplace, provide your prospective customers with what they want, run an effective operation, navigate the approval process, turn neighbors into supporters of your housing plans and much, much more.

We’re going to be more proactive in moving forward our legislative agenda in the 109th Congress. We’re going to tackle issues head-on. One of the top issues emerging in the Senate will be reforms for the housing industry’s government sponsored enterprises (GSEs) — Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Following the recommendations of a specially appointed NAHB task force on this issue, our board of directors has just approved major policy on oversight reform, and we’re ready to lead the debate.

Another goal we will continue to pursue with full determination is increasing the supply of affordable workforce housing for teachers, police officers, fire fighters and other essential employees who have been priced out of living in the communities they serve. We brought this issue to national attention last year and identified resources and approaches that will begin to address the problem. We will pursue those initiatives this year, and we will also continue our support for proposals by the Bush Administration to create a homeownership tax credit and a zero-downpayment FHA mortgage to boost homeownership opportunities in this country.

In our commitment to make NAHB your true business partner, we will also be increasing our efforts this year on retaining current members and acquiring new ones. Membership is the lifeblood of this association. Our grassroots membership is the source of our strength, and in 2005 we plan to make the members of our federation even stronger through the expansion of NAHB’s educational programs and networking opportunities, including the 20 Clubs.

Finally, I want to let you know about the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund. With an initial donation of $250,000 designated by the NAHB Board of Directors in Orlando, the fund will be directed to rebuilding efforts that provide temporary and permanent shelter for survivors. I have asked Bob Mitchell, a past president of NAHB, to lead this effort. We will be working with U.S. charitable organizations to demonstrate our concern, and I urge you to join in this effort through a tax-deductible donation. For more information in this issue of Nation's Building News on how you can do your part to address the shelter needs of nations devastated by the tsunami, click here.

You can ask the President of the United States, leaders in the Congress, the chairman of the Federal Reserve or the top economists in the country, and they will all tell you that housing has been the driving force supporting our economy for the past several years. And you can ask the parents of your childrens’ friends at school, members of your church congregation, people standing in the checkout line at the grocery store, and they will tell you that there are few things more important for their families than housing. That is an awesome responsibility for a single industry, but one in which we can all take great professional pride.

I promise you that NAHB will continue to be your voice — the voice of housing in America. I look forward to serving you and our entire membership.

Home Builders Association Launches Liability Insurance Company

With liability insurance for builders becoming increasingly expensive and hard to find, the Home Builders Association of Mississippi has started its own company, Mississippi Builders and Contractors Insurance Company, which is a risk retention group. “We’ve only been in business a month,” said the association’s executive vice president, Marty Milstead, “and the response has been very good. We’re getting a lot of applications and writing business. It looks like it is going to be a very successful program.” The product is marketed through independent insurance agents in Mississippi, but is owned by the stockholders, who are its policyholders. “It is important for builders to have liability insurance for the same reason you need to have insurance for anything,” Milstead said. “It protects you when you have major exposures. Home builders build very, very expensive products, and with that comes a lot of potential liability. This insurance is designed to cover those exposures of business people who build houses,” he said. Milstead also noted that some builders who have less than five employees and hire subcontractors don’t carry workers’ comp insurance because the state law doesn’t require them to. “I don’t think they understand the full exposure they have,” Milstead said. “If they don’t carry workers’ comp, they are personally responsible for those claims. And we see these construction-related injuries that get into the millions of dollars. If a roofer falls off a roof and ends up in a wheelchair, the contractor is personally responsible for that individual for the rest of his life. That is not covered under general liability. That is a workers’ compensation claim.” (www.msbusiness.com)
Mississippi Business Journal (3/7/05)

Industry Seeks to Limit Multi-Employer Citations in Construction

A case pending before the Occupational Safety and Review Commission could determine if the Occupational Safety and Health Administration has the authority to issue multi-employer citations against general contractors for violations by a subcontractor. In a joint brief, NAHB, the Contractors Association of New York, the Greater Houston Home Builders Association and the Texas Association of Builders argue that regulatory language stating that each employer shall protect the employment and places of each of “his employees” engaged in construction work implies that employers in the construction industry are only responsible for their own employees. The suit challenges a specific $4,000 penalty imposed by OSHA against Summit Contractors, which was the general contractor of a student dormitory at Philander Smith College in Little Rock, Ark. The citation was based on scaffold violations by the masonry subcontractor, All Phase Construction, Inc. Summit employees performed no work on the scaffold. OSHA rarely issues multi-employer citations outside of the construction industry. (www.insidehealthpolicy.com)
InsideHealthPolicy.com (4/4/05)

The Well-Feathered Empty Nest: Aging Boomers Seek Homes With Fewer Chores, Not Fewer Luxuries

Empty-nesters in their 50s and 60s are fueling demand for low-maintenance single-family homes with service fees to cover upkeep of the lawn and landscaping. Going by several names, including landominiums, club houses, villa homes and patio homes, the product is geared to households that aren’t willing to share walls with townhome neighbors or scale down into a condominium. Jack Myers, patio sales manager for Fischer Homes in the Cincinnati area’s Crestview Hills, said customers look for walkout basements and open floor plans. The patio homes range from $170,000-$300,000 and 1,150-3,500 square feet. Tony Hering, of Delhi Township-based custom builder Hering Homes, says 40% of his business today is in $220,000-$550,000 ranch-style landominiums with three-car garages, finished basements and very open first-floor levels; and he expects them to account for 60%-70% of his business in three years. Also popular among Hering Home’s empty-nester buyers are mother-in-law suites, which can feature a separate entrance and outside patio, as well as a bedroom, bathroom and sometimes a kitchenette. The company avoids steep driveways, exterior steps and sloping yards. (www.bizjournals.com)
Cincinnati Business Courier (3/28/05); Karen Bells

Mammoth Remains Unearthed at California Construction Site

Crews clearing away a hillside to prepare for building in Moorpark, Calif., which is about 30 miles west-northeast of downtown Los Angeles, uncovered a remarkably well-preserved half-million-year old mammoth, including both its six- to seven-foot-long tusks. The mammoth was an estimated 12-feet tall. “It’s considered a very significant find, and it’s a very complete fossil,” said paleontologist Mark Roeder. "It’s unusual because it was found all the way down near the bedrock.” Other Ice Age creatures found in Southern California in recent years include a mastodon in Simi Valley, a mammoth in Oceanside and a pygmy mammoth on the Channel Islands. (www.cnn.com)
CNN.com (4/8/05); Associated Press

After the Housing Boom

Home owners who have made a habit of tapping into their equity will find that their home is no longer an ATM as housing price gains slow from their 10% annual clip. “Home prices will rust, not bust,” for the next few years, says Richard Berner, chief U.S. economist for Morgan Stanley. As a result of rising mortgage rates, economists surveyed by Blue Chip Economic Indicators expect housing starts and sales to slip about 5% this year and next. The slowdown in home-price appreciation could have an impact on consumer spending. A 2002 study by the Federal Reserve found that the average household extracted $26,700 in equity with each financing. One-third of that was used to pay off old debts or add to savings, but the other two-thirds was spent, adding one-quarter to one-half percent to consumer spending. Freddie Mac is forecasting that refinancings will fall from $139.2 billion last year to $95.9 billion this year and $61.2 billion in 2006. Despite the mortgage frenzy of the past few years, banks have kept about one-third of their assets in housing-related assets, such as mortgages and home-equity loans, the same ratio as in 1995, before the boom. A slowdown in house appreciation could actually have some beneficial effects for young families who have been encountering housing affordability problems, according to David Lereah, chief economist for the National Association of Realtors. (www.businessweek.com)
Business Week (4/11/05); Kathleen Madigan, Christopher Palmieri, Ann Therese Palmer and Dean Foust

Apartment Rents Are Heading Up in Southern California, Says USC Study

With Southern California’s steadily growing and diversified economy setting the stage for increased job formations and more demand for apartments in the coming year, average asking rents and occupancy rates will continue to improve in the region’s multifamily markets, according to a forecast released on April 5 from the University of Southern California’s Lusk Center. Average rent increases this year are expected to range from 3.5%-6%. “The new supply of apartments has not kept up with demand from newcomers attracted to jobs in our diverse economy and the Southern California lifestyle,” said Delores Conway, director of the Casden Real Estate Economics Forecast. “Apartment occupancies are at all-time highs in Los Angeles, Orange, Riverside and San Bernardino Counties because of a steady stream of young professionals and Latin and Asian immigrants who cannot afford the average home, along with relocated executives who choose not to get locked into a mortgage.” This year, the average rent for a two-bedroom apartment is projected to rise to $1,500 in Los Angeles County, $1,520 in Orange County and $1,080 in the Inland Empire, according to the forecast. (www.rismedia.com)
RisMedia.com (4/5/05); Beth Bresnahan

Home Repair Legislation Passes Oklahoma House Committee

Legislation in Oklahoma that would require home builders to respond within 30 days of being notified by the home owner of a defect is receiving the strong support of industry representatives. Republican state Sen. Todd Lamb says his bill would require the builder to provide a good faith estimate to repair, replace or compensate the purchaser for a defect in a new home. “As a new home owner, I understand that problems may arise after a family moves into the home,” said Lamb. “I am positive this measure will prove to be a positive impact upon Oklahoma consumers, and will also provide a clearly defined process to ensure that their homes are safe and free of builder-related problems. It is cost-prohibitive to litigate these matters, and this legislation will ensure consumers get their homes fixed.” Mike Means, executive vice president of the Oklahoma State Home Builders Association, says that Lamb’s bill benefits owners by getting problems fixed faster and benefits builders by giving them a chance to fix problems before they become legal matters. “From our standpoint, we want to get that notification, so we know when there is a problem, prior to any kind of court action,” said Means. “The basic gist of this bill is to get the buyer and the builder together to get a problem fixed before ever having to get anybody else involved. The whole idea is to keep the communication lines open. Anytime we’re all communicating, something good is going to happen, the way I look at it.” (www.journalrecord.com)
Oklahoma City Journal Record (4/1/05); Janice Francis-Smith

Tame Closet Monsters End Your Wardrobe Nightmares With These Dreamy Solutions

A consumer preference study conducted by NAHB last year indicated that 64% of the home owners surveyed didn’t think that their new homes had adequate general storage and 30% said that their master bedrooms did not have adequate closet storage. Amy Purcell, marketing communications manager for Shulte Distinctive Storage of Cincinnati, says that ample storage space is a key selling feature for homes. “What is interesting is that as the value of the home goes up, the percent of closet space increases, even if the square footage of the home does not,” she says. Double-hang sections comprised of two shelves with rods that hang one above the other are most desired by consumers, according to Purcell. “Double-hang can almost double your storage space,” she says, since such items as shirts, folded pants and jackets can be hung from both levels. Double- and even triple-hang rods also work well for children’s rooms since their small clothing takes up less vertical space. “Typically, 50% of your closet should be double-hang,” she says, “25% should be single-hang for long garments like dresses and coats and 25% should be shelving.” (www.orlandosentinel.com)
Orlando Sentinel (4/3/05); Denise Bates Enos

Changes Considered in Environmental Protection

Six bills in the California legislature would change the state’s environmental protection law to relax rules for housing projects in urban areas. Under California’s 35-year-old Environmental Quality Act, any development project must be examined for its impact on the environment and quality of life issues, such as noise and traffic. For most projects, developers have to prepare extensive environmental impact reports and they often have to contend with neighborhood opposition, particularly in large urban areas, where traffic and parking are concerns. This is one of the causes of urban sprawl, said Jerry Bunin, governmental affairs director for the Home Builders Association of the Central Coast in San Luis Obispo. “If you aren’t allowing infill, you are pushing development outward,” he said. Among the legislative provisions that have been proposed to speed up housing are: the creation of a shorter environmental impact report for residential projects within cities or unincorporated areas zoned for housing; an exemption for infill projects in cities with populations of 200,000 or more; and the removal of traffic study requirements on urban projects as long as they comply with local transportation plans. (www.sanluisobispo.com)
San Luis Obispo Tribune (4/5/05); David Sneed

Twin Falls City Council Eases Animal Permits, Discusses Parks

Builders in Twin Falls, Idaho, are up in arms over a proposed local ordinance that would require developers to provide park space and storm water retention areas in new development or pay money in lieu of a park. Jeff Gooding, legislative liaison for the Magic Valley Builders Association, told a city council meeting that Idaho gives cities the power to fund parks through taxes, not through requirements on developers. He also said the ordinance was “excessive,” because it would create about one acre of park for every 269 people, compared to the 667 people recommended by NAHB. Another hearing will be held on the ordinance before it is put to a vote. (www.magicvalley.com)
Twin Falls, Idaho, Times-News (4/5/05); Karin Kowalski

Fair Housing Report Shows Housing Providers More Likely to Face Scrutiny

Landlords and rental agents who violate the Fair Housing Act are more likely than ever to come under federal scrutiny by the U.S. Department of Housing and Urban Development, according to a new 2004 State of Fair Housing Report. HUD and its state and local Fair Housing Assistance Program partners received 9,187 housing discrimination complaints last year, a 13% increase. They settled 3,183 cases and provided more than $11 million in monetary relief. “In four decades, we have made great progress in educating people about the Fair Housing Act, but as the cases highlighted in this report illustrate, not everyone has gotten the message,” said Carolyn Peoples, HUD assistant secretary for housing and equal opportunity. “In an era where finding safe, decent, affordable housing can sometimes be difficult, equal access is more important than ever.” The report is at www.hud.gov/offices/fheo/enforcement/hudcharges.cfm. (www.rismedia.com)
RisMedia.com (4/1/05); Beth Bresnahan

Most Home Buyers Are Using Internet Searches

A study by the California Association of Realtors® found that 62% of home buyers used the Internet as an integral part of their home search this year, up from 52% last year. Buyers who used the Internet took two weeks to find the houses they bought, compared to seven weeks for those who did not. The Internet buyers spent almost three times longer considering buying a home — almost six weeks — before they started shopping seriously Buyers who used the Internet were younger, wealthier and better educated than other buyers, the Realtors® said. (www.venturacountystar.com)
Ventura County Star (3/31/05); Gretchen Macchiarella

Two New Loans for Buyers

In an effort to ease the sting of rising home prices that are squeezing many first-time buyers out of the housing market, the California Housing Finance Agency has begun offering free mortgage payment insurance and a 35-year, fixed-rate interest-only loan. HomeOpeners automatically covers monthly mortgage payments of up to $2,500 for up to six months if a home owner loses their job. The free insurance is in effect for the first five years of the loan. The agency’s interest-only PLUS loan is designed to reduce payments by hundreds of dollars per month. The home owners start paying off the principal after the first five years. The finance agency’s specialized loans, including below-market interest rates, are available to single or couple, first-time buyers with incomes of no more than $78,600, and the cap is $91,700 for a family of three or four. Loans are usually in the $250,000-$325,000 range. (www.dailynews.com)
Los Angeles Daily News (4/1/05); Gregory J. Wilcox

GSE Debate Continues on Capitol Hill

Several new developments emerged last week in the ongoing debate on how best to revamp the regulatory structure of the government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

NAHB is monitoring the situation closely and remains in contact with leaders on the House Financial Services Committee and Senate Banking Committee, the panels with principal congressional oversight of the GSEs.

As the legislative process moves forward, the nation’s home builders continue to work with lawmakers to craft legislation that will ensure the safety and soundness of the GSEs and protect their ability to continue to successfully fulfill their congressional mandate to provide low-cost and readily available housing credit to consumers.

In addition, the more than 800 builders from across the country in Washington, D.C. on April 13 to attend NAHB’s Legislative Conference will be discussing this issue with their lawmakers on Capitol Hill. (Talking points on GSEs and further information on NAHB’s legislative priorities are available to members at www.nahb.org/legcon. To register for the conference, e-mail Jessica Boyce at NAHB.)

Rep. Baker’s legislation, which is cosponsored by House Financial Services Committee Chairman Michael Oxley (R-Ohio), would create an independent Federal Housing Finance Agency to replace OFHEO, an agency within HUD, as the regulatory overseer of the GSEs.

Under the Baker proposal, the regulator would be granted broad authority to determine the size of Fannie Mae’s and Freddie Mac’s mortgage portfolios, raise their minimum and risk-based capital standards, approve new programs or pilot projects and place them into receivership in times of crisis.

Greenspan told lawmakers that the “GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership where the conditions under which debt holders take losses are made clear.”

The Fed chairman also reiterated his call for decreasing Fannie Mae’s and Freddie Mac’s portfolios, though he did not suggest a specific limit on their holdings. Previously, he has advocated that each of the secondary mortgage financial institutions hold no more than about $200 billion in their mortgage investment portfolios. Currently, their combined portfolios total roughly $1.5 trillion.

Testifying the following day on behalf of the Administration, Snow and Jackson said that they favored the creation of a new independent regulator, perhaps within the Treasury Department. The Cabinet secretaries also backed calls to grant the regulator sufficient powers to curb the growth of Fannie Mae and Freddie Mac, adjust their minimum capital requirements and place them into receivership, if necessary.

Meanwhile, Senate Banking Committee member Charles Schumer (D-N.Y.) urged his colleagues to proceed carefully before deciding on any changes to the GSEs that could have unintended consequences for the housing market.

“We ought to proceed with a great deal of caution and maybe some humility,” he said. “Things are good in the housing market. Why are people entertaining radical change?”

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

Arizona Voters to Decide on Mandatory Sprinklers

A group, “Citizens Against Government Mandates — Home Builders" has been working alongside the association to void ordinances that make sprinklers mandatory for all new homes in the cities of Goodyear and Avondale. They have been collecting signatures to subject the ordinances to a vote later this year.

Jason Franz, a spokesman for the Central Arizona builders, said the mandates eliminate consumer choice. "This should not be a government or town mandate," Franz said. "We want to support a citizen's ability to choose."

Residents of Goodyear will be voting on the measure in September, according to a March 5 Arizona Republic article, while Avondale was still awaiting the verification of some 321 of 641 signatures.

In 2002, at its annual spring board of directors meeting, NAHB adopted policy (a members-only link) opposing mandatory new-home sprinkler systems, citing the exemplary safety record of newer housing. The policy favors the pursuit of alliances with organizations that support fire safety, consumer safety education and housing affordability.

For more information, e-mail Jason Franz at the HBACA, or call him at 602-274-6545; or contact Alex Strong at NAHB State & Local Government Affairs, 800-368-5242 x8279.

City Prices Out Minority Home Buyers in Texas

The stricter development regulations being adopted by communities in Texas are pushing the cost of housing further beyond the financial means of the state’s minority households, according to a report by the Home Builders Association (HBA) of Greater Austin.

The study focused on the city of Kyle, Texas, which passed two local ordinances in 2003 that increased the cost of a new $100,000 entry-level home by $20,000 and priced a significant share of Hispanic and African American home buyers out of the area’s new home market.

Prior to enactment of the new zoning restrictions, an annual income of $31,729 was needed to qualify for a $100,000 home in Kyle. After the restrictions took effect, the cost of the same house rose to $120,000 and qualifying income increased by $6,536 to $38,268.

“Owning a home is particularly important in the Hispanic community,” LULAC representative Tony Diaz said. “It’s disheartening to see evidence that shows a city is making it more difficult for minorities to purchase a home.”

“When a new home price increases by $20,000, a family must find an extra $163 a month to pay for a house payment,” said Nelson Linder, president of the NAACP’s Austin Chapter. “That dollar amount may prevent as many as 58,000 minority families in Texas from being able to move into Kyle — and that’s discriminatory.”

The study shows how many potential minority home buyers have been priced out of Kyle’s affordable housing market:

For more information, e-mail Melissa Loe at the HBA of Greater Austin, or call her at 512-454-5588 x105.

For more information on fair-housing issues, contact Duane Desiderio in NAHB's Legal Affairs Area, or call him at 800-368-5242 x8146.

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
Data revisions brighten the near-term outlook for economic growth …

The Commerce Department’s “final” estimate of growth in real gross domestic product (GDP) for the fourth quarter of 2004 stands at 3.8%, the same as the preliminary estimate. Thus, growth for all of 2004 stands at 4.4% on a year-over-year basis and 3.9% on a fourth-quarter to fourth-quarter basis. That makes 2004 the strongest year of the current expansion and easily an above-trend performance with positive implications for the labor market.

Although the recent revision did not affect the overall GDP growth rate, there were some compositional shifts that bode well for early 2004 and the near-term outlook. All the components of business fixed investment were revised upward — including residential fixed investment and spending on nonresidential structures as well as equipment and software ― and exports also were boosted a bit. Offsetting downward revisions were made to government spending (federal, state and local) and to business inventory investment. The latter revision definitely brightens the GDP outlook for early 2005 by bolstering the prospects for more inventory accumulation in the early months of this year.

Incoming data signal a strong rate of GDP growth in the first quarter. As expected, business inventory investment surged in January and other monthly indicators show strength through February. Home sales, housing starts and residential construction put-in-place were quite good, and retail sales, personal consumption expenditures and durable goods orders show solid spending by consumers and businesses. Data on shipments and orders for durable goods in early 2005 are particularly encouraging, since the expiration of tax incentives for capital investment at the end of 2004 had raised the prospect of a temporary shortfall in business outlays.

The forward momentum of key monthly indicators has prompted upward revisions to NAHB’s forecast for GDP growth in both the first and second quarters of this year — from 4.0% and 3.9% to 4.5% and 4.2%, respectively. These forecast revisions raise year-over-year GDP growth to 4.0% in 2005, and we’re still looking for 3.6% growth in 2006 as the economy converges toward sustainable long-term trend growth.

The job market continues to expand despite mixed signals and the productivity factor …

The employment report for March was released on April 1, provoking cries of “April fool” in financial markets. Contrary to market expectations, payroll job growth was revised downward for both January and February and the preliminary estimate for March (110,000) was surprisingly weak. On the other hand, the unemployment rate fell by a larger-than-expected amount (from 5.4% to 5.2% ) as total employment from the household survey surged by 357,000 and unemployment fell by nearly that amount (the labor force was virtually unchanged).

So is the labor market improving or deteriorating? The weight of evidence points toward ongoing improvement, and it’s worth remembering that the payroll employment numbers show a lot of month-to-month volatility and are subject to sizeable revision.

Having said that, productivity growth is a somewhat mysterious “wedge” between growth of economic output (GDP) and growth of employment, and it’s entirely possible that productivity growth rebounded in the first quarter following a slowdown in the second half of last year.

We’re sticking with our previous estimate of payroll job growth in 2005, despite the surprisingly low numbers for the first quarter (a monthly average of 160,000). We’re showing an average of nearly 200,000 for the year as a whole, recognizing that productivity growth could make that difficult to achieve.

The sudden drop of the unemployment rate in March, along with stubborn stability of the labor force participation rate at a surprisingly low level, suggest serious reduction in the degree of slack in the U.S. labor market. That issue, in turn, raises serious questions about the amount of above-trend GDP growth that the economy can continue to generate with only modest upward pressures on unit labor costs and core inflation. The data on average hourly earnings in the March employment report were reassuring in this regard, but even a gradually tightening labor market will keep this issue in focus as we move ahead.

Core inflation is gathering momentum as the economic expansion rolls along …

The core producer price index (PPI) for finished goods posted a year-over-year advance of 2.8% in February, the biggest 12-month increase in more than a decade and definitely an unsettling inflation signal. The core consumer price index (CPI) showed a 2.4% year-over-year advance in February, and the technically superior chain-core CPI posted a 2.0% gain. These readings also were on the high side of recent experience and contributed to the thickening inflation plot.

The core price index for personal consumption expenditures (PCE), the Fed’s favorite inflation gauge, registered a 1.7% year-over-year gain in February, and the market-based version (excluding various implicit prices) was up by 1.6%. These rates certainly don’t look alarming, but it’s worth remembering that the upper bounds of core PCE inflation projections by members of the Federal Open Market Committee (FOMC) presented to Congress in mid-February stood at 1.75% for both 2005 and 2006 (fourth-quarter to fourth-quarter basis).

Year-over-year core PCE inflation (1.7%) already is near the upper bound of the FOMC’s projected ranges, which presumably represent FOMC targets, and upward inflation pressures now are gathering rather than dissipating. Indeed, the annualized six-month, three-month and one-month changes in the core PCE price index now stand at 2.0%, 2.0% and 2.3%, respectively, definitely a pattern of gathering momentum.

As expected, the Fed enacted another quarter-point increase in its federal funds rate target at the March 22 meeting of the FOMC. This adjustment took the funds rate to 2.75%, up from 1.0% at mid-2004 when the Fed started to remove monetary policy “accommodation” from the economy.

The FOMC statement of March 22 once again specified that remaining policy accommodation can be removed “at a pace that is likely to be measured.” However, the statement noted that “pressures on inflation have picked up in recent months and pricing power is more evident.” The statement also revealed some concern about potential upward pressures on core consumer price inflation from the rise in energy prices.

The FOMC’s assessments of the current economic situation as well as the risks to the economic expansion also were altered on March 22. The statement upgraded the assessment of recent economic growth from “moderate” to “solid” while continuing to say that “labor market conditions continue to improve gradually” ― an assessment consistent with the labor market report for March. With respect to the risk profile, the FOMC now says that “appropriate monetary policy action” will be needed to maintain an even balance of risks to sustainable economic growth and price stability, and the committee’s confidence in the balanced risk profile evidently is eroding as core inflation firms up.

More rate increases are in store as the Fed seeks out monetary ‘neutrality’ …

Another quarter-point increase in the funds rate target is highly likely at the next FOMC meeting on May 3 (the March employment report reduced the risks of a half-point increase at that time). We now expect the funds rate target to be 4.0% at year end, and that monetary policy process will raise the bank prime to 7.0%.

It’s difficult to pinpoint the federal funds rate that the Fed considers “neutral,” partly because the neutral rate is data-dependent. The Fed thinks in terms of the “real” (inflation-adjusted) funds rate, and we’re assuming that a real rate of 2.25%-2.50% will be required to achieve neutrality. Until fairly recently, the real federal funds rate actually was negative.

Fed Chairman Alan Greenspan presumably will want to shepherd monetary policy into a neutral zone as his term as Fed governor draws to a close early next year, and our forecast shows a nominal funds rate of 4.25% by early 2006. It remains to be seen whether or not the Fed will go on hold at that point. Everything depends on the evolving balance of economic growth and inflation and the priorities of the incoming chairman.

The Fed has direct control over only very short-term interest rates and relies heavily on communications to influence longer-term rates. The Fed definitely has “talked up” long-term rates since mid-February. At that time, Greenspan told the Congress that declining long-term rates and a distinct flattening of the yield structure posed a “conundrum” in U.S. and global financial markets. Not only was Greenspan hard-pressed to explain the behavior of long-term rates since mid-2004 when the Fed started to hike short-term rates (quite an admission by the Fed chairman) but he also appeared dissatisfied with the refusal of long rates to move up. The markets read this message as a heads-up concerning future monetary policy moves, and long-term rates shifted upward immediately.

Greenspan’s mid-February comments clearly had an effect on bond market psychology, and the March 22 FOMC statement strengthened the message. Yields on both 10-year Treasury bonds and fixed-rate home mortgages moved up by roughly 50 basis points through the end of March, and these long-term rates still are within NAHB’s forecasts range despite a bond market rally provoked by the unexpectedly weak payroll employment report for March. We’re expecting additional half-point increases in both Treasury bond and mortgage rates over the balance of the year, moves that would take these measures to 5.0% and 6.5%, respectively, in the fourth quarter of the year. We’re currently showing additional half-point increases over the course of 2006.

Housing starts for January have been revised upward and the preliminary estimate for February showed another increase — to a 21-year high for total starts and an all-time high for the single-family component. The multifamily sector also posted robust numbers for the January-February period, apparently driven by a strong condo component as well as an improving rental market.

Issuance of building permits was robust in the first two months of the year (both single-family and multifamily), and a sizeable backlog of unused permits at the end of February bodes well for housing starts in March. Sales of both new and existing homes also were quite solid for the January-February period, showing only modest declines from the record numbers posted in the final quarter of 2004, and single-family construction put-in-place showed solid gains in the first two months of the year.

Surveys of both home builders and mortgage lenders confirm ongoing strength of demand in the single-family sector through March. NAHB’s Housing Market Index held at the elevated level of February (69) and weekly data on applications for mortgages to buy homes (Mortgage Bankers Association series) conform to the pattern of high and reasonably stable market activity.

The strength of housing data for the early part of the year has prompted upward revisions to NAHB’s estimates of housing starts and home sales for the first quarter. We’re now showing total housing starts at an annual rate of 2.14 million units, the peak quarter for the expansion, and the single-family component stands at 1.77 million ― easily a record pace. The projected upswing in starts drives our estimate of annualized first-quarter growth in residential fixed investment to 14.2%, compared with 9.7% for 2004 as a whole.

Much of the first-quarter strength in housing market activity occurred before the recent upshift in long-term interest rates, and further increases in the entire interest rate structure are in the cards as we move ahead. The inevitable interest-rate drag on housing demand will be largely offset by ongoing growth in employment and household income, particularly in 2005, although the net effect of all these factors most likely will be more negative by 2006.

A second complication in the housing outlook relates to an apparent surge in home buying by investors/speculators, financed to some degree by highly aggressive mortgage instruments — such as low-documentation, interest-only, adjustable-rate mortgages with deeply discounted initial rates. It’s not clear how much of the recent record levels of home sales and single-family housing starts reflects investor/speculator efforts to garner quick capital gains, and to what degree the homes they bought are poised to come back onto the market at the first hint of price weakness. The same questions apply to the surging condo market.

NAHB is canvassing builders and local home builders associations about the investor/speculator phenomenon, and we’ll be reassessing the implications of the investor/speculator phenomenon for the housing markets down the line. For now, we’ve retained forecasts for home sales and housing starts that show only slight erosion in 2005, followed by more significant slippage in 2006 as the interest rate upswing exerts more influence and job growth loses some momentum. In this forecast, growth of residential fixed investment finally slips into the red zone by the second quarter of this year.

The recent acceleration of house price growth, particularly in hot metro markets along the coastlines, may very well reflect aggressive buying by investors/speculators seeking quick capital gains. If so, price levels in those areas are vulnerable to a bailout by investors, and subsequent price declines conceivably could erode home owner equity, weaken the quality of home mortgages and threaten the health of mortgage investors as well as mortgage insurers. Bank regulators and the private mortgage insurance industry are fully attuned to the dangers.

Greenspan discussed this potential problem on Capitol Hill in mid-February. While conceding that house prices exhibit “bubble” characteristics in some local areas, Greenspan argued against a national house price bubble and downplayed the consequences of potential price declines in vulnerable local markets.

Greenspan pointed out that past price increases in high-froth markets had created large home equity “buffers” that would protect most home owners (and mortgage investors/insurers) in the event of price reversals. Indeed, the Fed’s national balance sheets show a record $9.6 trillion in housing equity at the end of 2004, despite rapid growth of home mortgage debt in recent years, and the overall debt-to-value ratio is only 44% ― the same as a year earlier. This doesn’t mean that all home owners are protected, but the huge equity buffer certainly would limit the damage wrought by potential price reversals in local markets.

Global oil prices hit a record high last October ($56.37 for WTI) and then receded quite a bit in the following months (to $40.71 in early December). But oil prices surged again in February and March and recently rose above the records of last fall.

This unanticipated resurgence, if not reversed in short order, could weaken economic growth and infect core consumer inflation rates over time, threatening a demoralizing “stagflation” process that the Fed would be hard-pressed to counter. Such an outcome definitely would be negative for the housing sector.

We currently believe that the fundamentals of global supply and demand will shepherd oil prices downward from recent record levels. Global oil prices are subject to a host of uncertainties, of course, and it’s fair to say that oil will remain a wild card for some time to come.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his April 6 edition. To subcribe to “Eye on the Economy,” click here.

See what's on the horizon for the housing industry at NAHB's Spring Construction Forecast Conference on May 5 in Washington, D.C. Get the latest forecasts on housing starts, projected budgets and other economic bellwethers and developments in the housing industry from some of the country's premier economists and finance experts. To register or for more information, click here.

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

Available at BuilderBooks.com, "HousingEconomics Online" combines unique scientific research with practical applications providing insights that are original, useful and written in terms that builders, manufacturers and housing finance professionals can understand and apply to their own businesses.

This interactive Web site at the executive level provides critical data and information quickly, easily and frequently and includes the following features:

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

Change Order Strategies That Can Make You Money

Managed properly, change orders can keep you from losing money and time when clients decide to split a master bathroom in half after it’s been rough-plumbed, or when they make other midstream changes to what you’ve contractually agreed to build or remodel.

Try the following tips on pricing change orders and communicating the costs to customers. They were contributed by 2004 Custom Builder Symposium attendees who traded strategies in a roundtable discussion.

Mark your calendar for the 2005 Custom Builder Symposium, which takes place Nov. 11-13 in New Orleans. The symposium offers world-class education, exceptional networking opportunities and fun-filled activities for custom home builders, remodelers, architects and other residential construction professionals.

For more details, contact NAHB’s Business Management Department at 800-368-5242 x8388, or e-mail business_management@nahb.com.

"Home Builder Contracts and Management Forms on Disk," available at BuilderBooks.com, provides help for developing change order documents. The publication comes with a CD of 93 essential electronic forms and contracts you can easily adapt for your business. To view or purchase this publication, click here, or call 800-223-2665.

Go to NAHB's Business Management Tools Web pages for instant access to more than 170 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.

Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.

Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.

NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org.

BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business

BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish.

Universal Design ― Satisfying a Growing Market

There is a growing market of buyers ready to cash in their savings and invest in new homes who are asking their builders for home designs that will suit their needs, last them a lifetime and allow family members of every age and ability to live with them.

Many builders are routinely integrating universal design principles in their new home construction and remodeling projects to meet this demand.

Universal design principles have been around since the 1970s, with roots at the Center for Accessible Housing at North Carolina State University. Broadly defined, universal design means that products are universally accommodating and convenient for all users — regardless of age, height or physical limitation.

This inclusionary design considers a wide range of human needs and abilities throughout a lifespan. It has helped family members with limited mobility, hearing or vision, but it serves the entire population, not just those with physical disabilities. Features that have been included in the design are invisible, but they enhance the functionality and usability in the long term.

Incorporating universal design features does not necessarily substantially increase building costs. Simple modifications include using wider doors, lever type door handles and faucets, casement windows, wider hallways and multiple height kitchen counters and installing grab bars in bathrooms.

Universal designed homes are not only barrier free and accessible for people who use wheelchairs or walkers, they eliminate the stigma and special appearance of being built for people with disabilities. From the outside, these designed homes look no different from others on the block. Yet spaces and features are more useable by more people and can be adjusted to meet individual needs.

Products to make a home more livable through a lifetime are generally available in the marketplace. Often designated as “accessible” or compliant with the Americans with Disabilities Act (ADA), many manufacturers have showcased these products at builders’ shows, in their catalogues and on their Web sites.

Americans are living longer. Census projections estimate that in 30 years, more than 20% of the population will be over 65. More and more people among this aging population prefer to grow older — and maintain their active lifestyles ― in their own homes rather than a skilled nursing facility. They prefer their comfortable surroundings, and the cost of home health care is significantly lower than the average cost of living in a nursing home.

So it makes sense for home buyers and home owners to live in homes that provide livability for the long term ― to have a home that provides more independence. And it makes sense for builders and remodelers to meet that need.

There are an estimated 54 million Americans with a disability and 1.8 million use wheelchairs. The biggest cause of disability is age. More than one-third of people over 60 have at least one disability.

Oftentimes, mobility and dexterity is impaired and people use wheelchairs, walkers, crutches and canes for mobility and obstacles in their own homes impede their ability to maneuver.

I had a great two-story home, promising career, wonderful husband and supportive family. But all that changed while riding my bicycle on a trail in Granville, Ohio, in June 1998. I was crushed by a 3-1/2 ton tree and paralyzed from the waist down.

I came home from the hospital six weeks after my injury and found that my family and neighbors had built a ramp into my home so my husband, Mark Leder, could wheel me inside.

I knew that life in a wheelchair was going to be hard to get used to, but as professional speaker, trainer, consultant, writer and publisher, I wanted to get my life back — fast.

When a person with a disability has a barrier in their home, it creates a handicap. I struggled to push myself in my wheelchair in carpeted rooms. My arms and shoulders were weak. Doors had to be removed so I could enter the laundry room, bathroom and shower. Over half of our house was off limits to me, including Mark’s second floor home office, the guest bedroom and bathroom and the basement.

Frustration mounted quickly, but over time, I learned to be more patient, to redefine normal and to live in my home as best as I could.

Disabilities can be invisible when barriers are eliminated by architectural design and Mark and I began dreaming of building a new home, one that would be totally wheelchair accessible. Last June we began the process of designing and building a modest-sized home with two home offices, a master bedroom suite, guest bedroom and bath, kitchen, great room, screened-in porch and four-car garage. We didn’t want a dining or living room, but we did want our laundry facility in the master bath.

Breaking ground at the new Rossetti home site: (from the left) Rich Parsons, Rosemarie Rossetti, Vickie Parsons and Mark Leder

Our design process involved identifying the barriers in our existing home and eliminating them in our new home. We wanted our home to look “homey,” not hospital-like. The following are some of the features we plan to incorporate in our home:

Mark and I attended the Builders’ Show in order to learn more about the products and get additional input on the floor plan design. When we came home, we continued meeting with the architect to finalize the floor plan. We plan to start construction this summer and hope to have it completed by next spring.

The home is being built, in part, to serve as a learning laboratory and national model to showcase universal design products, design features and technology. Since my injury, there have been many turning points and milestones in my recovery. I am hopeful that my new home will serve as a milestone for many.

Rosemarie Rossetti, Ph.D. is a professional speaker and Ms. Wheelchair Ohio 2004. For more information or to contact her, visit her Web site at www.RosemarieSpeaks.com.

“Building Type Basics for Senior Living,” available through BuilderBooks.com, covers the essentials for the planning and design of housing and care environments for the elderly. This nuts-and-bolts guide provides need-to-know information on a range of building subtypes. To view or purchase this publication online, click here, or call 800-223-2665.

Pillars Awards Honor Excellence in Multifamily Housing

The “best of the best” in the multifamily housing industry received Pillars of the Industry Awards in Miami last week, which were presented in conjunction with NAHB’s annual conference for apartment and condo developers, owners and managers.

Considered the most prestigious national awards in the industry, the Pillars Awards honor excellence in apartment and condo design, development, marketing and management, and provide a showcase of future trends and innovation in multifamily housing.

“This year’s winners reflect the larger trend in development in general, and that’s the resurgence of urbanism and the rebirth of the American city,” said Ron Terwilliger, chief executive officer of Trammell Crow Residential and chairman of NAHB’s Multifamily Leadership Board. “These award-winning apartment and condo communities are terrific examples of how higher-density housing can revitalize neighborhoods, protect open space and offer rental and for-sale housing choices at a variety of price points for today’s families.”

Terwilliger said he also was struck by how many of this year’s submissions to the Pillars Awards competition were either affordable or had an affordable component to them. “I am deeply impressed at how hard developers are working to provide quality apartment homes as well as amenities that focus on the real needs of residents — from after-school activities to computer rooms and business centers — and are affordable to low- and moderate-income families,” he said.

“We are pleased to be a partner with NAHB in celebrating the great work being done nationwide by apartment and condominium developers,” said Adrian Corbiere, senior vice president of multifamily sourcing at Freddie Mac, which sponsored the awards. "Freddie Mac's mission is to ensure a steady supply of funds for builders who want to expand the nation's supply of affordable housing, and multifamily is the most affordable housing option available to consumers today."

For a complete list of winners, click here. They will also be featured in the April/May 2005 issue of Multifamily Pro magazine.

‘Multifamily Housing Development Handbook’ Available at BuilderBooks.com

“Multifamily Housing Development Handbook,” available through BuilderBooks.com, provides the latest in best practices, techniques and trends in multifamily housing development. It covers niche markets and trends. To view or purchase this publication online, click here, or call 800-223-2665.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

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 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

What’s Your Specialty? — Really

I’m sure you’ve seen those ads that say so much but tell so little. You know, the ads that read something like, “John’s Construction, We Specialize in Additions, Remodeling, Baths, Kitchens, New Construction, Commercial and Insurance Work.”

Well, where’s the specialty? The proprietor probably could have added auto tune-ups, too.

As the demand for remodeling grows, should you find a niche? And how would you identify it?

Maybe the real questions that need to be answered are, “What don't you do very well?” And why not?

Like the start of any problem solving session, you have to start with a history. That is, can you track what jobs have been best for you? Which prospect type has the highest closing ratio? Which job type has the highest gross profit? Which referral type has the highest gross profit? Which demographic? Which geographic area? What color house? (Okay, you can probably skip the last one.)

The point is, you need to be able to look back and see where you’ve done best and, quite frankly, where you really stank and didn’t do very well. If the poor performance was an anomaly, fine. But if it's part of a trend or pattern, you certainly don’t need to continue to force that square peg into a round hole, do you?

You can begin reversing that trend by carefully tracking your closing rates by job, lead source, customer type and more. Then reference that by gross profit. Now you have a starting point.

Add into that mix how much it costs you to develop each type of lead/customer on that list. In other words, if a client of type A is your most profitable, but you spend a huge amount on marketing to land an A client ― well, then, maybe that client is not as good or as profitable as you may initially think. Perhaps two B customers gained at a fraction of your marketing expenses are just as good and easier to get.

Now that I’ve talked to you about defining your best “type,” let me share with you our philosophy. You’re going to think I’m being totally contradictory, but I contend that I’m not. It's just that I define my “best” customer not by a category or categories, but more by a sum total of attributes.

It goes something like this: our niche really is not having a niche. Sounds like I’m taking the easy way out, doesn’t it? Let me explain.

I believe that if we identify a need, can meet that need without going outside our normal procedures and business practices, offer the service for a fair profit and produce a great product and satisfy the customer, it’s a “go” for us.

Looking at the last somewhat verbose statement, I think what you’ll see is that you judge all those things I first mentioned — customer type, expectations, job type including your familiarity, resource availability, geographic area and resource availability, etc. — and then see if there’s a good fit.

Oh, there’s one other thing that should probably be taken just as seriously, maybe even more so. I call it the “gut” factor.

How did you feel with that prospect? Did you walk away thinking it was the start of a friendship? Or did you think, "It’s going to be tough, but we can do it?” There are no medals or rewards for proving that you can work with anyone.

Remember, this business has enough challenges without taking on those we don’t need. Just identify, historically, where and with whom you’ve done well and go for it.

Greg Miedema, CGR, CAPS, is president of Dakota Builders in Tucson, Ariz. He is chair and founder of his local Remodelors™ Council, a member of the NAHB Remodelors™ Council Board of Trustees and currently serves as the chairman of the Remodelors™ Council Public Affairs Committee. The Southern Arizona Home Builders Association (SAHBA) has named Dakota Builders, Inc. Remodelor™ of the Year in 1998, 1999, 2000 and 2003. For more information, send him an e-mail.

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering valuable advice to your customers on the process of selecting a remodeler. The brochure guides consumers from the dream to the reality of having their homes remodeled by skilled and trained professionals. Sections include what to look for in a professional remodeler, what questions to ask and signs of a professional remodeler. To view or puchase this publication online, click here, or call 800-223-2665 to order.

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.

The Remodelor™ of the Month (this link is accessible to Remodelors™ Council members only) award program is underway. Don't miss your opportunity to be named the Remodelor™ of the Month.

The program groups local councils from different states into designated months. There will be two “wild card” months that will allow the council’s members-at-large to participate in the program. A winner will be chosen each month and that winner will then be automatically included in the nominations for the Remodelor™ of the Year award.

This is a great opportunity for local councils and members to get involved and submit their “best of the best” members to compete with other councils. The national Remodelors™ Council will send out press releases and highlight each winner in ReNews, the Remodelors™ Council e-newsletter.

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May is National Home Remodeling Month

Spring is the most popular time to remodel. So, what better time of the year for National Home Remodeling Month?

Many home owners want to try their hand at remodeling their home themselves. This May, with the help of the NAHB Remodelors™ Council's consumer campaign on "How and When to Hire a Professional Remodeler," you can help educate consumers on the importance of hiring a professional remodeler to safely make their house a home for a lifetime.

Throughout the month, be sure to take advantage of the opportunities surrounding National Remodeling Month to help publicize the industry and emphasize to home owners the importance of hiring qualified, professional remodelers. Contact your local council to find out about plans for the month and join this important campaign.

The NAHB Remodelors™ Council will have downloadable material to help promote National Remodeling Month, including proclamations, public service announcements, press releases and articles. Visit the Remodelors™ Council section of the NAHB Web site for more information.

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Sherry Schwab — April Remodelor™ of the Month

She was selected from among candidates from 17 local Remodelors™ Councils in eight states.

As a leader at the MBA, Schwab serves on its board of directors and has served on the finance committee and chaired the membership committee.

She has served as a taskforce chairman to investigate retention strategies that led to the development of the association's retention committee.

Since 1993 Schwab has been an MBA Remodelors™ Council Executive member. She is also a member of the National Remodelors™ Council Board of Trustees.

Education is important to Schwab, who earned her CGR in 1997 and CAPS in 2003. She later became a CGR and CAPS instructor.

Schwarb also is involved in her community and is a 25-year member of the honorary educational society, Alpha Delta Kappa (ADK), where she has held many leadership positions, including scholarship chair. At ADK, she was instrumental in reorganizing the scholarship program and opening it to teachers seeking to earn state certification or graduate degrees.

During her 26 years in the remodeling industry, Schwab has received a number of honors, including the Master Builders Most Inspirational Award in 1998, MBA of King and Snohomish Membership Leadership Award in 2001, Building Industry of Washington Remodelor of the Year and the MBA of King and Snohomish Remodelor of the Year in 2002. HCS Construction Services was named to Remodeling magazine’s Big 50 in 2002.

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Booming Condo Market Commands Attention at Pillars

The booming condo market ― when it might peak and how multifamily builders, developers and others across the country are responding to it ― commanded the attention of many of the attendees at NAHB’s Pillars of the Industry Conference in Miami, Fla., on April 3-6.

Dominic Wilker, of Struever Brothers, Eccles & Rouse in Baltimore, found out how other multifamily developers were converting rental properties into for-sale condos in answer to the booming condo market. “Internally, our CEO is very receptive to new ideas,” Wilker said.

Jamie Gorski, the chief marketing officer of KSI Management Corporation, learned about the state of the multifamily market during the next several years. “It really helps you determine what the best plan for your company may be.”

KSI, with more than 8,000 units in the Washington, D.C. area, is one of that area’s largest diversified real estate companies.

Gorski also leaned about “interesting twists,” such as condo-hotels and other types of vacation homes in the multifamily market, during the Pillars session, "Who’s Renting, Who’s Buying: Meeting the Needs of Future Consumers."

Maurice Walters, of the architectural firm Torti Gallas and Partners in Silver Spring, Md., said it was important to see what others in the industry are creating. “Seeing other people’s work is truly inspirational and gives you something to be fired up about when you come home,” Walters said. Torti Gallas won four Pillars awards this year, including the best for-sale community of 15 units per acre or less.

Like many others at the conference, Walters was also interested in learning more about the growing urban market trend involving mixed-use properties. Speakers at the sesion, "Live, Work, Play: Developing Mixed-Use Communities," really thought outside the box, Walters said. “The complexity of mixed-use developments is amazing and they handled it really well.”

An estimated 550 builders, developers, architects, property managers and lenders involved in multifamily housing attended the four-day conference. Next year's Pillars conference will be in Scottsdale, Ariz. on April 1-4.

For more conference information, contact Courtenay Brown at 800-368-5242 x8168. For more information about the Pillars of the Industry awards, contact Laura Zaner at 800-368-5242 x8563.

Education Calendar

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OSHA to Inspect Construction Sites on Weekends

The Occupational Safety and Health Administration (OSHA) has announced that it will begin inspecting construction sites on weekends as part of its ongoing region-wide program to reduce employee injuries and deaths resulting from falls, contact with overhead power lines and the use of scaffolds.

The agency has also announced that it is focusing its regional inspections of construction sites in Missouri, Kansas and Nebraska.

In those states, “OSHA will be conducting extensive outreach to encourage voluntary compliance by employers and employees, and to increase community awareness of fall hazards and others related to scaffolds and overhead power lines,” Charles E. Adkins, OSHA regional administrator.

Over the last 10 years, 39% of the work-related fatal and catastrophic incidents in the three-state area have occurred in the construction industry, according to OSHA. Falls accounted for 38% of the incidents and 17% were electrocutions. More than half of the electrocution fatalities involved contact with overhead power lines.

Adkins said his agency is starting to take a look at work on weekends because an increasing number of contractors have been conducting construction activities then.

Within the past seven years, 15% of the fall, scaffold or overhead power line fatalities occurred on weekends and in 2004 half of the fatalities occurred on Saturdays.

“This year, our agency will randomly select three months in which to conduct inspections of active construction work sites operating on weekends that have fall hazards, employee exposure to overhead power lines, and/or scaffolding hazards observed,” he announced.

For more information, e-mail George Middleton at NAHB, or call him at 800-368-5242 x8590.

‘Jobsite Safety Handbook: English-Spanish’ Available at BuilderBooks.com

“Jobsite Safety Handbook: English-Spanish,” available through BuilderBooks.com, presents the basic guidelines for establishing a safety and health program and identifies safe work practices that counteract the most common hazards found on residential job sites. This easy-to-use handbook contains the complete English and Spanish text side by side to facilitate communication in a straightforward manner. To view or purchase this publication online, click here, or call 800-223-2665.

Builders’ Tip: Cutting Engineered Joists

Engineered joists and rafters — which have a cross section akin to an I-beam — present a wrinkle to the carpenter crosscutting them with a circular saw.

Because the plane of the web lies below that of the thicker chords, the saw cannot glide across an unbroken surface as it makes a cut. The solution is to make a template that will fit on the web and guide the saw.

The bottom piece is longer than the top, so the first cut that you make also trims part A. That will allow you to register the edge of the template against the cut mark for accurate positioning.

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How to Get ‘The Look’ in Your Model Home

When it comes to interior design, today's home buyers are far more sophisticated than their forerunners ― and with good reason. Their mail boxes are filled with countless home-furnishing catalogs. The Internet links them to Pottery Barn, Room & Board, Crate&Barrel and thousands of other home store editions. Even their local discount stores are styling. Target, for example, has tapped architect/designer Michael Graves to envision sleek, serviceable items from teapots to trash cans.

This marriage of image and information has led to "The Look" — the finely tuned home-fashion statement that merchandisers and home buyers seek to recreate.

The key to having "The Look" in your model or personal home? Understand the trends behind it.

We have seen an evolution from the "Very Green '90s" to the "Browning of the New Millennium." In fact, brown is the new black. When brown is combined with green, gold or blue, it yields the latest look. Trendy pinks, yellows and purples also are appearing, but should always, always be used with caution. Unsupervised pink can undo a career.

Blue is on the horizon (no pun intended) as a statement for the new decade. It represents a calming influence, something we certainly can use in these uncertain times.

Look for blue's most subtle shading — such as the pale blue-green called "oxygen" — on walls. It's very popular. But know that, in general, we are seeing walls bearing stronger colors — creating an inviting envelope for our lives.

Following a close second behind color are furnishing choices. In both traditional and contemporary design schemes, the choices here are news. Traditional schemes now include warm textures, such as chenille, natural linens and patterns rooted in history. When combined with leather upholstery punctuated with nail-head accents, you have "The Look."

Coffee tables that are stacked two at a time create another exciting option for gathering spaces. And while I personally can't believe it, designer recliners are reclaiming real estate in family rooms, game rooms and studies. Lazy Boy® has even created the "new recliner" with design in mind. Slipcovers are frequently part of "The Look." They're being called into action to alter, update and add interest to formally mundane furniture.

Another very important part of obtaining "The Look" is to remember universal design. In the United States, 10,000 people turn 50 every day. That's a very large market segment that should not be ignored.

What is universal design? Quite simply, it is a method of design that is meant to change with the buyer but should not be an obvious feature of the home. Examples include: wider hallways or doorways that allow easy access for a wheelchair; levered faucets that make it easier for arthritic hands to turn water on and off; flat bottom bathtubs which give unsteady feet a level surface on which to stand; and higher sinks, washers and dryers that eliminate the need to bend over to retrieve dishes, buckets or clothes.

Another essential of "The Look" is lighting. Whether it's direct, hidden, reflected, up, under, back, track or translucent, fresh lighting solutions are a trend to take seriously. And it's not surprising, since light symbolizes safety (a priority in our current culture) and remains a tool to achieve it. We're talking about energy being used to echo as well as emphasize architectural detail, art and special features.

An example? Chandeliers are everywhere. They can be hung from a volume ceiling in the family room over a cocktail table. In dining rooms, two chandeliers can be used over the "grand table" to create an even more elegant room. Table lamps have become jewelry for the home. Lamp bases that have crackle finishes, leather wraps or marble effects, just to name a few, are dominating the lighting world. Lamp shades made with beads, leathers, parchment and silks add sparkle and character that "The Look" requires.

Don't forget the accents. The repetition of art pieces is in keeping with "The Look." Identical mirrors hung side by side in a dining room are one example. Another is a fine antique — either the real thing or simply the character — as achieved when TV-concealing armoires come into play.

By considering all these areas, you can recreate "The Look" in your model homes — and your buyers definitely will notice.

‘Universal Interiors by Design: Gracious Spaces’ Available at BuilderBooks.com

“Universal Interiors by Design,” available through BuilderBooks.com, teaches you how to design homes that welcome all, serve all stages of life and trumpet beauty and style. To view or purchase this publication online, click here, or call 800-223-2665.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine. Call 800-368-5242 x8192 or visit www.smimagazine.com to subscribe or order a copy. Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

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Best in American Living Award Design Competition Now Open

Entries are now being accepted for the 2005 Best in American Living Awards (BALA), the most prestigious new home design competition in the home building industry.

Homes completed or for which the first model opened between May 1, 2004, and July 15, 2005, are eligible for this year’s competition.

Co-sponsored by Professional Builder magazine and NAHB, the BALA design competition is open to builders, architects, designers, developers, land planners and interior designers.

The competition includes 41 categories — from single-family detached, attached and custom homes to interior design, communities, affordable housing, smart growth communities, rental communities and the U.S. Department of Housing and Urban Development Secretary’s Award for Excellence.

The Secretary's Award for Excellence program recognizes design excellence produced through cooperative public/private efforts that expand homeownership opportunities for underserved American families. For more information about the award, click here.

Several categories in the competition are limited to homes built for sale. Check the BALA/Housing Zone Web pages for details.

Winners will be announced at the 2006 International Builders’ Show in Orlando, Fla., Jan. 11-14. Winning entries will also be posted on the Professional Builder Web site, HousingZone.com, for up to one year after the announcement.

For additional information and to download a BALA entry form, click here, or contact Judy Brociek, Professional Builder, at 630-288-8184 or Michelle Persinger Matuga, NAHB, at 800-368-5242 x8343.

IRAs Exempt From Bankruptcy Creditors, High Court Rules

The U.S. Supreme Court ruled last week that Individual Retirement Accounts (IRAs) cannot be reached by bankruptcy creditors.

Based on this ruling, creditors, such as multifamily housing managers, builders, remodelers or any housing industry entity that is owed money and has filed a claim in bankruptcy court, will not be able to receive the proceeds from the debtor’s IRA (unless the debtor is 59-1/2 or older) because these retirement accounts are now entitled to an exemption from the bankruptcy estate.

In the case of Rousey v. Jacoway, the Supreme Court held that IRA assets fall under an exemption for pensions and similar plans and contracts that confer a right to payment based on age. The April 4 ruling was unanimous.

The petitioners in this case, Richard and Betty Jo Rousey, took lump sum distributions from their employer-sponsored pension plans and deposited them into separate IRA accounts. The couple subsequently filed jointly for chapter 7 bankruptcy protection and claimed an exemption for their IRAs.

The bankruptcy trustee objected to their claimed exemption, and both the bankruptcy court and the Eighth Circuit Court of Appeals upheld the trustee’s objection. Both courts ruled that the IRA accounts were available to the Rouseys at any time (albeit with a 10% withdrawal penalty prior to age 59-1/2) and therefore did not fall under the exemption for plans conferring a right to receive “on account of age.”

The United States Supreme Court disagreed and reversed the lower court ruling, finding that the 10% penalty was a substantial impairment to the Rouseys’ right to payment.

Since this impairment would be removed when the account holders turned 59-1/2, the Supreme Court held that the IRA accounts did qualify for the exemption from the bankruptcy estate as a plan conferring a right to payment “on account of age.”

Mississippi Celebrates First Project CRAFT Graduates

The Project CRAFT recently graduated its first class in Jackson, Miss., and the initial pilot program there has proved so successful that the collaboration between Home Builders Institute (HBI), the workforce development arm of NAHB, and the Mississippi Department of Human Services (MDHS) has been extended for one full year to train 20 youths from Rankin, Madison, Hinds and Warren Counties.

The goal of Project CRAFT is to help at-risk youths make a successful transition from custody to gainful employment in residential construction while simultaneously strengthening the home building industry’s employment base.

Although he could not attend the graduation, MDHS Executive Director Donald Taylor cited the effectiveness of Project CRAFT and praised the graduates for taking advantage of an opportunity to improve their lives.

Richard Harris, deputy director of administration at MDHS, presented a keynote address to graduates Jeremy Farabee, Frankie Luckett, Jerome Parson and Joshua Smith.

Instrumental in bringing Project CRAFT to Mississippi, Bobby Rayburn, immediate past president of NAHB and an HBI trustee, was on hand to congratulate the graduates and welcome them into the home building industry. “Your training enables you to now become part of one of our nation’s economic powerhouses,” he said. “With your box of tools and the skills you have learned at HBI you not only can earn a good living, but more importantly, you can take today’s success and make a career out of it.”

HBI Project Coordinator Kevin Polk and instructor James Pates presented the diplomas. Pates, in particular, was involved with the students at every step leading up to their successful completion of the program — as counselor, case manager, confidant, trainer, bus driver, teacher, instructor and someone who truly cares.

The commencement ceremony was attended by several members of the local news media.

For more information on Project CRAFT/ Mississippi, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908; for information on other HBI programs, contact Maria McIntyre at x8912.

Job Training Initiative Beginning in Four States

In partnership with builders in Florida, Idaho, South Carolina and Virginia, the Home Builders Institute (HBI), the workforce development arm of NAHB, is initiating its “Building Today’s Workforce for Tomorrow” program in residential construction.

Under a $4.2 million grant from the U.S. Department of Labor and the President’s High Growth Job Training Initiative, the program will be implemented at 10 sites over the next three years.

The program’s goal is to recruit 250 participants at each site, who will earn an Associate’s Degree that combines crafts skills training with academic credit. Hands-on training will be provided in carpentry, electrical wiring, plumbing and HVAC; and the best practices and products coming out of the initiative will be replicated elsewhere around the country.

Facilitated by HBI, representatives from home builders associations, community colleges, local schools and workforce development boards will be collaborating at each site to ensure that students receive a well-rounded education and leave the program with good prospects for employment in the construction industry.

The remaining six sites for the program will be announced throughout this year as they are determined.

For more information on “Building Today’s Workforce Tomorrow,” e-mail John Shortt at HBI, or call him at 800-795-7955 x8924.

Special Theater Created for Sick Children in Florida

Partners of AVAD recently provided support to create a “Room of Magic” theater for sick children at the Broward Children’s Center in Pompano Beach, Fla.

As part of AVAD’s participation in the Elf Foundation project, InFocus provided a ScreenPlay 7205 projector; Harman Kardon supplied an A/V receiver and DVD player; and ProFlex donated the necessary cabling for the installation. To complete the theater, NHT supplied a powerful 5.1 speaker system and Niles donated an IntelliControl touchscreen remote for maximum system operation.

“Having the privilege to play a small part in bringing joy to the lives of these very special children is a truly remarkable experience, and an even greater reward for those who are involved,” said Joe Piccirilli, AVAD’s managing director.

The project was managed by Good Sounds of Margate, Fla., a home theater and whole-house solutions provider. “These severely challenged children have such a tremendous need for outside stimuli,” said JoAnn McGowan, of Good Sounds, who is a strong supporter of the center along with her husband, Jim. “We have it within our power to bring the magic of the movies to these kids, and Jim and I can’t thank the Elf Foundation, AVAD and partners enough for underwriting our project.”

AVAD is the most complete home integration supplier in the United States. It stocks products for home theater, lighting controls, distributed audio/video, central vacuum and more for delivery from 26 locations across the country.

AVAD’s Dealer to Builder (D2B) program links members of its more than 9,000-plus dealer corps with home builders to outfit new homes with in-demand, cutting-edge electronic systems.

To date, the Elf Foundation has opened 34 “Rooms of Magic” theaters in the U.S. and it is beginning work on its first projects in Canada.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

The Soy Sauce Incident

The guy in line ahead of me had the same idea as I did: lunch to go from Chin’s Teriyaki. He got to the counter, received his Styrofoam box, and reached over to grab two or three soy sauce packets.

“That will be 20 cent extra per pack,” the young Asian gal behind the counter said in broken English.

The guy, we’ll call him Vinny Veinbulge, looked to be a construction worker, probably not the most sophisticated fellow you ever met. At the thought of having to pay extra for a penny’s worth of soy sauce from a teriyaki joint, he looked up, astonished. A vein in his neck suddenly bulged noticeably. “Scuse me?” he said. “You mean I gotta pay extra fer soy sauce?”

Now another vein, this one in his forehead, was pulsing largely. He replied, “Well, is any included with my meal, inside the box?”

The gal picked up on his growing anger and struggled to keep her composure. She replied nervously, “No, but we do include one tub teddiyaki sauce.” She then pulled a small plastic tub of brown fluid from inside his Styrofoam box. “And this one free.”

Now Vinny’s face was flushed red. “Lemme get this straight. I’m spendin’ six bucks on Chinese food at a Chinese restaurant, and you’re gonna charge me sixty cents extra for a nickel’s worth of soy sauce?”

The gal fretted noticeably, avoiding eye contact. “Sorry mister, that manager’s order. I no can change.”

“Well then, you can tell your manager to take his lousy food and his soy sauce and [blankity-blank-blank-blank].”

He then spun and stalked out empty handed, no fewer than 15 purple veins pulsing wildly across his face and neck.

The poor Asian gal was shook up, nearly in tears. I approached the counter and with a gentle smile said, “Is the to-go order for Garrison ready? By the way, I won’t be needing any extra soy sauce.”

Tim Garrison of ConstructionCalc.com, is a professional engineer, author and software producer for the building industry. Send e-mail to buildersengineer@constructioncalc.com. Tim reads every one.

Builders Celebrating New Homes Month This April

This April is New Home Months and a time when NAHB is drawing attention to the economic, financial and personal benefits of owning a new home.

“Seeing an upward trend in mortgage interest rates, fence-sitters are moving into the housing market, creating a lot of excitement as more people take advantage of today’s outstanding opportunity to buy a new home,” said NAHB President Dave Wilson. “Consumers know that buying a new home remains an excellent investment.”

During New Homes Month and throughout the year, consumers can visit NAHB’s Web site at www.nahb.org to learn more about the benefits of purchasing a new home. The site also offers resources and advice to guide consumers through the home-buying process — from selecting a builder and financing a home to undertaking basic home maintenance and managing the move.

“New homes today offer buyers more features and amenities, like three-car garages, custom kitchen and bathroom fixtures and flexible floor plans, allowing home owners to tailor a new home to meet their unique family needs and tastes,” added Wilson.

A crucial factor behind the health of the nation’s economy and the financial security of individual families, new home construction and remodeling provide millions of jobs and generate billions of dollars in wages and tax revenues each year. Homeownership also is a key component of building personal wealth, accounting for the largest portion of total household wealth in the United States.

For more information, e-mail Kym Kilbourne at NAHB, or call her at 800-368-5242 x8447.

Jacksonville Builders Star in ‘Extreme Makeover’

The Emmy-nominated reality show hosted by Ty Pennington and watched by more than 20 million viewers rolled into Hastings and knocked on the front door of the six-member Harvey family’s home at 7 a.m. on March 2. The family was given time to pack for a vacation to Niagara Falls.

On the morning of Friday, March 4, an estimated 500 volunteers brought the house to its foundation by pulling on ropes attached to the home, and the 96-hour build began in earnest. Working around the clock, construction crews had to complete the 4,280-square-foot new home and release it to the decorators in time for it to be ready for the Harveys’ return on Wednesday, March 9.

NEFBA President Bryan Lendry coordinated the project, enlisting the aid of his own company, Brylen Homes, and hundreds of other volunteers.

“I am truly amazed — but not surprised — at the response from NEFBA members, Builders Care staff, volunteers and the community to help not just one family but a neighborhood,” Lendry said. “In addition to the Harvey home, Builders Care performed an Extreme Outreach project of its own, doing the kind of emergency repairs it typically handles for a number of other homes in the same neighborhood.”

Lendry said he sees the “Extreme Makeover” project as a way to bring attention to the problem of substandard housing and the work Builders Care routinely performs to bring homes into safe and habitable condition. Builders Care will complete its 500th home renovation this year.

“This is not just a Northeast Florida issue,” said Bill Wilson, Builders Care executive director. “Builders Care is a concept that can be carried to other communities across the country, and “Extreme Makeover” has given us a unique opportunity to show what can be accomplished when we all pull together to help our neighbors.”

The Hastings project is expected to air on ABC in its usual Sunday night time slot on April 24.

The “Extreme Makeover: Home Edition” in Hastings is the first time a home builders association has been selected as the construction partner, and it is the first time that an outreach program has been implemented in conjunction with the show.

Lendry and Kevin Gray of Residential Designs by Kevin Gray were honored as NEFBA's members of the month for their participation in the "Extreme Makeover" project.

The Northeast Florida Builders Association provides education, research, legislative representation, media relations, promotions and programs for its 1,700-plus builder and associate members. The association is celebrating 61 years of service to members and to the community through various charitable efforts.

Builder, Associate Named New Jersey Legends of Housing

The New Jersey Builders Association (NJBA) honored two members — a builder and an associate — with its 2005 Legends of Housing Award during ceremonies on April 8.

Miroslav “Mike” Kokes, of The Kokes Organization in Whiting, and Lenny Yanchar, Sr., of New Jersey Mirror and Bath Accessories in Hainesport, were honored for their commitment and dedication to housing, said John Barba, NJBA president.

Endowment Awards $100,000 Grant for Residential Construction Program

The National Housing Endowment, the philanthropic arm of NAHB, recently awarded East Carolina University’s Department of Construction Management a $100,000 grant as part of its efforts to strengthen its relationships with universities nationwide.

The four-year grant will be used to develop a residential construction management curriculum and provide real world training simulations for its students. The construction management department is part of the university's College of Technology and Computer Science.

“This grant from the National Housing Endowment will focus on curriculum development and help ECU create a ‘gold standard’ program that can become a national model for other schools looking to create residential construction management programs,” said Gary Garczynski, the National Housing Endowment chairman and 2002 NAHB president.

“This grant addresses two of the Endowment’s highest priorities — education and workforce training,” Garczynski continued. “Along with my fellow trustees, I am excited to play a part in training the next generation of housing professionals.”

The National Housing Endowment provides a permanent source of funds to address long-term industry concerns at the national level, including:

Get GM Discount on More Than 80 Vehicles

GM has begun offering preferred GM Supplier discount pricing to NAHB members on more than 80 General Motors vehicles — including Chevrolet, Pontiac, Buick, GMC, Oldsmobile, Cadillac, Saturn, HUMMER (except H1) and Saab passenger cars, light duty trucks, vans and SUVs — as part of NAHB’s Member Advantage discount program.

The GM Supplier pricing program is available to members who purchase or lease 2004, 2005 or 2006 model-year vehicles.

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.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

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.

Help Tsunami Survivors Rebuild Their Homes

Many NAHB members already have responded to the devastating earthquake and tsunami disaster in South Asia by generously giving to numerous relief agencies that are providing vital emergency assistance to the survivors. As the relief effort continues and moves from the acute, emergency phase into recovery, the home building industry is rallying to address the longer term need for temporary and permanent shelter in the tsunami-affected nations.

Over the years, NAHB and its members have united to help those in need, demonstrating time and again that Home Builders Care, a philosophy as well as a call to action that is emblematic of the industry's commitment to community service and charitable causes.

In response to what will be an overwhelming need for permanent shelter, NAHB and the National Housing Endowment have established the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund to raise desperately needed funds.

With an initial donation of $250,000, designated by the NAHB Board of Directors at the International Builders’ Show, the fund will be directed to rebuilding efforts that provide temporary and permanent shelter for survivors.

Please help by making a tax deductible donation to the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund. Money raised by the National Housing Endowment will be granted to one or more U.S. charitable relief organizations working to help tsunami survivors obtain temporary and permanent shelter.

Checks should be made payable to the National Housing Endowment and, in the memo section, please note the Tsunami Shelter Fund.

The NAHB Senior Officers have selected Past President Bob Mitchell to oversee and guide this fundraising effort.

For more information, contact Troy Patterson at the National Housing Endowment at 800-368-5242 x8483 or Kym Kilbourne in NAHB Public Affairs, x8447.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Calendar of Events

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

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.

Nation's Building News Online: April 11, 2005

Land Shortage Shapes Strategy of Multifamily Builders

Condos Hot While Rental Market Warming Up

Nation's Building News Will Not Be Published Next Week

Subscribe Your Employees to NBN for Chance to Be the Next Winner of a Digital Camera

NAHB Is Your Business Partner

Home Builders Association Launches Liability Insurance Company

Industry Seeks to Limit Multi-Employer Citations in Construction

The Well-Feathered Empty Nest: Aging Boomers Seek Homes With Fewer Chores, Not Fewer Luxuries

Mammoth Remains Unearthed at California Construction Site

After the Housing Boom

Apartment Rents Are Heading Up in Southern California, Says USC Study

Home Repair Legislation Passes Oklahoma House Committee

Tame Closet Monsters End Your Wardrobe Nightmares With These Dreamy Solutions

Changes Considered in Environmental Protection

Twin Falls City Council Eases Animal Permits, Discusses Parks

Fair Housing Report Shows Housing Providers More Likely to Face Scrutiny

Most Home Buyers Are Using Internet Searches

Two New Loans for Buyers

GSE Debate Continues on Capitol Hill

Arizona Voters to Decide on Mandatory Sprinklers

City Prices Out Minority Home Buyers in Texas

Eye on the Economy

Change Order Strategies That Can Make You Money

Universal Design ― Satisfying a Growing Market

Pillars Awards Honor Excellence in Multifamily Housing

What’s Your Specialty? — Really

May is National Home Remodeling Month

Sherry Schwab — April Remodelor™ of the Month

Booming Condo Market Commands Attention at Pillars

Education Calendar

OSHA to Inspect Construction Sites on Weekends

Builders’ Tip: Cutting Engineered Joists

How to Get ‘The Look’ in Your Model Home

Best in American Living Award Design Competition Now Open

IRAs Exempt From Bankruptcy Creditors, High Court Rules

Mississippi Celebrates First Project CRAFT Graduates

Job Training Initiative Beginning in Four States

Special Theater Created for Sick Children in Florida

The Soy Sauce Incident

Builders Celebrating New Homes Month This April

Jacksonville Builders Star in ‘Extreme Makeover’

Builder, Associate Named New Jersey Legends of Housing

Endowment Awards $100,000 Grant for Residential Construction Program

Get GM Discount on More Than 80 Vehicles

Help Tsunami Survivors Rebuild Their Homes

Calendar of Events