Nation's Building News Online: September 5, 2005Print All Articles Text Version |
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Economists Begin to Assess Katrina’s Toll on Housing
While the full extent of the impact of Hurricane Katrina on the overall economy and on the housing market is still unclear, and the immediate concern has focused on human life and health, economists at NAHB are beginning to assess the impact that the catastrophe will have on the housing industry. The number of homes destroyed last week is almost certain to dwarf the losses from any previous U.S. natural disaster. Past experience, together with the visible devastation, has provided some basis for housing analysts at NAHB to project the effects on construction activity, the supply and cost of building materials and construction labor, and other implications for the housing market. The number of housing units destroyed (made uninhabitable and beyond economically justified repair) by Hurricane Andrew in 1992 was estimated at more than 28,000. The combined effect of Hurricanes Jeanne, Ivan, Frances and Charly in 2004 was almost as large, with nearly 27,500 housing units destroyed, according to estimates compiled by the American Red Cross. In those cases, most of the destruction was caused by winds or the immediate force of the storm surge. The number of homes with major, but reparable damage was more than twice the number destroyed. The 1906 San Francisco earthquake/fire reportedly destroyed 28,000 “buildings.” Katrina also caused widespread immediate damage in Louisiana, Mississippi and Alabama, but the flooding in New Orleans, Mobile and elsewhere is likely to translate into much larger numbers of homes destroyed. Although the floods generally did not tear off roofs or walls or cause structures to collapse, they have made many homes permanently uninhabitable. The flood waters have carried contaminants that cannot easily be removed, but even in clean water, prolonged submersion destroys structures beyond repair. This is likely to be the fate of a large share of the more than 200,000 homes in the city of New Orleans. Roofing and Wood Panels Most Affected Of necessity, rebuilding will have to wait. The immediate need will be to clean up and repair damage to structures that are still viable. The repair process will absorb much of the construction labor near the affected area and several key materials that would otherwise have been used to build new homes. The materials that will be most affected, NAHB economists say, include roofing and wood panels (plywood and OSB). Demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period. The storm will have impacts on the supply of materials as well as demand. The areas affected by the storm have a significant number of wood product facilities that may have been damaged or destroyed. On the other hand, trees that have been blown down will need to be harvested on an accelerated basis, perhaps helping to lower wood product prices in the medium term. Disruption to Materials Imports Additionally, imports of building materials will be disrupted by the damage to port facilities. New Orleans was the top destination for imports of cement and a number of other building materials into the U.S. in 2004. Cement imports, in particular, involve the use of specialized terminal facilities. The New Orleans and Mobile customs districts reported about 12% of national cement imports in 2004. Congestion caused by diversion of shipping to other ports will also probably disrupt some supplies of materials, as will land transportation problems caused by damaged roads, rail and reload centers. From July 1992 to September 1992, largely as a consequence of Hurricane Andrew, the average price for plywood increased from about $222 per 1,000 square feet to $321, and the price of Southern pine framing lumber rose from $264 per 1,000 board feet to $308, the economists say. The hurricanes in 2004 did not trigger a similar increase, and prices actually fell during the relevant period, after soaring during the preceding year. The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices last week, and with production already running at full capacity for wood panels, NAHB economists are saying that further increases for those products, as well as for roofing, are likely. A Slow Rebuilding Process Although the loss of tens of thousands of homes implies increased demand for, and construction of, new homes, past experience has shown that there is no massive surge in home building in affected areas. Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years. In Dade County (now called Miami-Dade), there were 9,026 residential permits or 7.8% of the state total in 1993, the year following Hurricane Andrew, slightly lower than the county’s 7.9% share in 1991. By 1995, there was an increase to 14,718 or 12.0% of the state, but that number still wasn’t much greater than what might have been expected if there hadn’t been a hurricane. The experiences of other areas, such as Alameda County, Calif. following the 1991 fires and Charleston, S.C. after Hurricane Hugo in 1989, have been similar. Homes were rebuilt or replaced very slowly.
Floor Plans: A Taste of Elegance, A Touch of TuscanyThe rhythmic rooflines, natural looking materials, iron details, soft colors and graceful arches of the LaVerna model, by Maracay Homes, would be right at home in the Tuscan countryside. But this 3,943-square-foot home designed by Bloodgood Sharp Buster Architects and Planners is nestled in the Villa de Sorano neighborhood of Phoenix, and looks just as appropriate there.
A gated arch leads into a sheltered entry courtyard that, upon entering the home, opens up to an unobstructed view from the front door through the great room to the lushly-landscaped patio and pool area. Off to the left, the dining room extends the livability by opening onto a welcoming courtyard with fireplace.
Rustic Touches, Thoroughly Modern Living Rustic beams, brick and stone accents and high windows in the great room add to the Tuscan farmhouse feel. A wall of atrium doors visually and physically connects the large, light-filled space to the outdoor living area. The kitchen area ― with its large single-level island with seating for three ― truly functions as the heart of the home. It’s fully open to the great room and easy entertaining and adjacent to a cozy, light-filled morning room and quiet sips of coffee.
A Flair for Entertaining By opting for a lower level, the home gains plenty of space for entertaining and family fun. A home theater features a large screen and plenty of seating for movie aficionados. There’s also a hobby room/game room and another hidden jewel just right for small gatherings — a rustic wine cellar complete with a tasting room.
An Entire Wing of Private Spaces A “library” softens the transition from public to private spaces. The master bedroom suite includes a spa tub and separate shower, his and her vanities and a walk-around closet. The master bedroom at the rear of the home opens directly to the patio and pool area. A den separates the master suite from the other two bedrooms, which also can be directly accessed from the entry courtyard.
A Welcoming Blend of Form, Details and Functionality The LaVerna truly welcomes its owners and visiting friends and family with intricate details, functionality and flair — a complete Tuscan dream.
The Ultimate Book of Home Plans “The Ultimate Book of Home Plans,” available through BuilderBooks.com, offers readers 600 of the best-selling designs from leading architects and designers. More than 300 gorgeous, full-color photographs allow readers to experience homes actually built from the designs. To view or purchase this publication online, click here, or call 800-223-2665. NAHB Establishes Relief Fund for Katrina Victims“Our hearts go out to those affected by Hurricane Katrina, and NAHB is again poised to respond as an industry to contribute to the massive relief effort,” said NAHB President David Wilson. “We’ve all seen the reports of devastation and are both saddened and humbled by the enormity of this natural disaster and its toll on life, property and way of life for the residents of the hardest hit areas.” At a meeting later this week in conjunction with the association’s fall board meeting in Reno, Nev., the NAHB Senior Officers will be making decisions about details of the relief fund, including how the funds can best be distributed. In the meantime, Wilson noted, “Our disaster response team, comprising NAHB staff members from the Codes and Standards and Public Affairs departments, has attempted to reach out to associations in the Gulf Coast states. As you might imagine, the state of communications, electricity and ongoing rescue operations has hampered our ability to reach anyone local to the hurricane disaster.”
For answers to questions, e-mail Kathy O’Kane, NAHB assistant staff vice president of leadership support and operations, or call her at 800-368-5242 x8295. Low-Income Housing Can Be Used for Hurricane VictimsThe IRS and Treasury Department have announced they are waiving rules that prohibit owners of low-income housing from providing that housing to victims of Hurricane Katrina who do not qualify as low-income. The action is aimed at expanding the availability of housing for disaster victims and their families. The temporary suspension includes income limitation requirements and non-transient requirements for qualified low-income housing projects located anywhere in the United States. "The widespread damage caused by the hurricane left many thousands of Americans homeless," said Treasury Secretary John W. Snow. "We hope that providing this disaster relief will allow states to temporarily house many of the needy whose homes were destroyed." A special toll free telephone number — 866-562-5227 — has been established to answer disaster-related tax questions from 7 a.m. to 10 p.m. For other information from the IRS related to helping victims of Hurricane Katrina, click here. Nation's Building News Will Not Be Published Sept. 12Nation's Building News will not be published on Sept. 12, following the fall NAHB Board of Directors meeting in Reno, Nev. It will return to its regular weekly schedule with the Sept. 19 issue. Missouri Condemnation No Longer So Imminent
Condo Conversions Leave Hole in Rental Market
The New College MixerConcerned about students disappearing into their rooms to spend time on the Internet or watch television, college officials are attempting to induce a more convivial mood on campus by designing their new dormitories to encourage students to socialize with one another. The design features include: placing the elevator far from the main entrance to persuade students to take the stairs, where they are more likely to talk to one another; placing the laundry room in the public heart of the building, overlooking the lounge; nook seats and halls with a lot of natural light throughout the building; flaring the widths at the end of corridors to encourage mingling; study lounges inside bay windows looking out onto an intimate courtyard; limiting shared bathroom access to hallways; and providing exercise rooms, game areas and Starbucks cafes. According to
A Solar-Hydrogen Home
Raising the Quality of Orange’s Housing
Bottom Line: Asset Management
Is the Condo Market in Las Vegas a Safe Bet?
Unsustainable House Price Gains to Wind Down“The most rapid increases in home prices have been occurring in markets where demand is particularly strong and supply constraints are especially difficult because of a shortage of land and excessive growth controls or moratoria,” said NAHB Chief Economist David Seiders. “While the fundamentals for housing will remain relatively strong over the coming period, we believe that these numbers are unsustainable and that rates of house price appreciation will gradually head back into their historic range,” Seiders added. Citing findings from the most recent NAHB/Wells Fargo Housing Opportunity Index for the second quarter of 2005, Seiders said that there is already good evidence that the eroding affordability of housing in hot markets in California and other parts of the country will be taking some of the steam out of sales activity before long. As the growing U.S. economy continues to generate new jobs and healthy gains in household income, Seiders predicted that the housing price boom will start “quietly winding down, and this should help restore a healthier balance between supply and demand in local markets.” “A recent Federal Deposit Insurance Corporation study shows that house price booms lead to price busts only when local economies stumble for other reasons, such as a national recession,” he said. “With the U.S. economy in the midst of a strong expansion, those risks are quite low for the foreseeable future.” In the meantime, he noted, the rapid run-up in housing values has increased the wealth of the 70% of American households who own their own homes, helping to buffer them from the impact of the rising energy prices that have become especially acute this week following the disruptive impact of Hurricane Katrina. The 10 states experiencing the sharpest average house price increases on the OFHEO index from the second quarter of 2004 to the second quarter of this year were: Nevada (up 28.13%), Arizona (27.82%), Hawaii (25.92%), California (25.16%), Florida (24.45%), the District of Columbia (23.53%), Maryland (22.98%), Virginia (20.93%), New Jersey (17.76%) and Rhode Island (16.72%). The 10 fastest appreciating metropolitan areas for the year were: Naples-Marco Island, Fla. (35.60%); Bakersfield, Calif. (33.88%); Merced, Calif. (32.67%); Reno-Sparks, Nev. (32.27%); Palm Bay-Melbourne-Titusville, Fla. (31.45%); Stockton, Calif. (31.14%); Phoenix-Mesa-Scottsdale, Ariz. (30.48%); Visalia-Porterville, Calif. (30.42%); Cape Coral-Fort Myers, Fla. (29.84%); and Modesto, Calif. (29.56%).
Want to Know Your State’s 2006 Forecasts? HousingEconomics Online, the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis and detailed Excel tables and overviews are available for all the state forecasts. To learn more or subscribe to HousingEconomics Online, visit www.housingeconomics.com. U.S. Cement Consumption to Remain at Record LevelsThe association revised its projections upward as it became apparent that housing activity this year would exceed expectations, with starts totaling 1.64-1.65 million compared to its earlier forecast of 1.54 million, a 2%-2.5% gain. “At 19 metric tons per new single-family home,” the report says, “this upward adjustment in starts translates into a potential addition of 2 million metric tons to 2005 cement demand over previously projected residential cement consumption.” Adding to demand pressures in 2005 is nonresidential construction activity, which is expected to increase in the range of 7% following three years of large declines. Although slower growth rates are anticipated for housing production in the 2007-2009 period, the report says, Portland cement consumption is expected to reach 134 million metric tons by 2009, up from almost 126 million tons this year. “If such strong demand conditions persist,” the report says, “the challenges of supplying the market will remain in place. According to the PCA baseline outlook, domestic capacity will run full out throughout the forecast horizon. “Little opportunity will materialize to build inventory levels, estimated at six days supply at the end of 2004. The burden of supplying expected market growth will be placed on achieving significant increases in imports.” Annual import levels are expected to top out at a record 35 million metric tons during 2005-2007, but shipping and the availability of the material from foreign sources will remain hurdles to reaching that amount, according to the PCA.
See what's on the horizon for the housing industry at the semi-annual gathering of the country's premier economists and finance experts. Get the latest forecasts on housing starts, projected budgets and other economic bellwethers at the Fall Construction Forecast Conference on Oct. 19 at the National Housing Center in Washington, D.C. Visit www.nahb.org/conference for more information.
Want to Know Your State’s 2006 Forecasts? HousingEconomics Online, the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis and detailed Excel tables and overviews are available for all the state forecasts. To learn more or subscribe to HousingEconomics Online, visit www.housingeconomics.com. Builders' Tip: Fitting Pulldown Attic StairsFiguring out the angle of cut and the length of the lower stair section is the hard part and the installation guides aren’t much help. I came up with a simple trick that’s accurate and quick — and a tape measure isn’t even necessary. Here’s what I do:
The angled cut should fit tightly to the floor and the sections should butt tightly together when the stair is folded down. — Mike Guertin, East Greenwich, R.I. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Mary Lou von der Lancken at Fine Homebuilding.
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. To view these publications online, click here, or call 800-223-2665.
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. Improve Your Business, Follow These Basic Principles (Part 1)The first of two parts. I travel extensively throughout the nation to work with clients. Each trip, I need to have confidence that all airline employees have a clear understanding of their responsibilities each and every time they service an airplane. There is no margin for error. In our industry, even large margins of error seem to be commonplace. This comparison may seem extreme; however, practicing basic principles every day as a normal and expected part of doing business is fundamental to the success of any venture, and therefore, to the life or death of any business. Obviously, this extends to a logical impact on our staff and subcontractors who depend on our business for their livelihoods. We encounter numerous situations daily where things don’t go quite right. An option doesn’t get installed, a tradesman shows up with the wrong materials, a start or closing doesn’t occur on time, a staff member performs a task incorrectly and, hopefully, catches it before it impacts others. The list goes on and on. All of these delays and errors cost us time, energy and money. We need to create the kind of team and partnerships in our businesses that will prevent these setbacks. There are 10 basic principles that should be the basis for how a company operates. These principles just make good business sense, regardless of the business you’re in. As you read a principle, pause and ask yourself, “What would be different or better about our work environment, product, service and/or relationships, if this principle was followed in our workplace everyday?” 1. Define Processes Once a company’s vision and mission are clear, the team should begin defining each task and process as clearly and accurately as possible. When we work with a client to review what went wrong in a situation, we usually find that many of the steps necessary for success were never defined. Everyone involved had a slightly different concept of what needed to be done. For instance, we recently had a client ask us to develop an outline of how their option selection process should work. We interviewed everyone involved — the option selection contact, the sales team and the construction team ― and discovered that each person had a slightly different idea of what was to be done during the option selection process. There was confusion about when the selections needed to occur, what documentation the sales team needed for the lender, when the construction team needed to receive the selections and more. There was no written, clearly-defined process that anyone could look at to find where they were getting off track. Everyone believed they understood the right way of doing the job. But in reality, no one completely understood what the job entailed or how to do it correctly. 2. Define and Adhere to Requirements This principle is an extension of the first. Requirements are a set of carefully-written guidelines, specifications and/or standards that define exactly how a process is done, when it is done and how well it can be done. Think again of your own situation. When a task was done that did not meet your expectations, would the results have been different if the requirements were modified? What requirements can you change in any of your processes that would allow you to be more successful the next time? By training yourself to work to this new standard you should open the door for improved results. Companies typically spend a quarter of their time and money re-doing things — reworking, redesigning, reselling, repairing, reordering, returning, re-inspecting — which adds nothing to their value. They do create significant costs and significant stress in the workplace, however. We believe that by having high standards that are clearly defined you can eliminate waste. You should not “re-”anything. One consideration regarding accepting lower standards is that these new lower standards easily become your new standards. Think about it. Anything less than 100% should not be acceptable. 3. Prevention When something goes wrong, you need to fix it right away. After the dust settles, you need to look at what you can do to prevent it from occurring again. You may find that there was no defined process or clear understanding of what needed to be done. You may also find that the requirements were not defined sufficiently. Prevention is not just solving problems, it is solving systems. You must have the written systems in place before you can attempt to solve the problem. 4. Do It Right the First Time This principle is an obvious extension of our first three principles. I am sure we all have had the experience, either at work or at home, in which someone presented us with a completed task that was not done well. When we ask why, the response is usually that there wasn’t enough time — enough time to do it right. Using home building as an example, we have the cost of installing the item to begin with, then the cost of taking it out and the cost of re-installing it. Doing it right the first time will ultimately improve the bottom line. Next issue: How the remaning basic business principles can help your business will be discussed. Manny Schatz, MIRM, is founder and principal of Professional Builder Services, Inc. (PBS) in Danville, Calif, which trains and guides home builders in marketing, sales, sales management and construction management activities. Schatz has been involved in nearly every aspect of home building for more than 30 years. He holds a general contractor license, a brokers license and is a member of the Institute of Residential Marketing (MIRM) and has been a featured speaker at the Urban Land Institute, PCBC, the International Builders’ Show, the Sales and Marketing Council (SMC) and other industry events. Schatz is a life director of the California Building Industry Association (CBIA), past chairman of the National Sales and Marketing Council (NSMC) and a trustee of the IRM and the NSMC. He has served as president of his local HBA and SMC as well as PCBC. For more information, call Schatz at 925-837-1937. This article has been condensed from its previously published version in BUILDER DIGEST of California magazine, for which Manny Schatz writes an ongoing column.
Save Up to 80% off BuilderBooks Titles Prices have been cut drastically on several BuilderBooks titles. Stock up on the books that will help you build your business. While supplies last. To view or purchase clearance items online click here. Employee Benefits Can Be Costly for Small BusinessesThe report, "Cost of Employee Benefits in Small and Large Businesses," also finds that the costs of providing benefits can vary dramatically with the size of the company. For example, the per-participant costs of defined-contribution pension plans such as 401(k)s are as much as 14 times more for the smallest firms than for their largest counterparts. Among the highlights of the study:
Learn More About Compensation Plans in Managing Your Employees “Managing Your Employees,” available through BuilderBooks.com, is designed to help builders manage the people and paperwork of their businesses easily and productively. It will help you establish, clearly communicate, consistently implement and document effective human resources policies and procedures. To view or purchase this publication online, click here, or call 800-223-2665. Ten Design Trends to WatchMembers of the NAHB Design Committee recently looked into their crystal ball to see what industry trends were in the early phases of development. During a roundtable discussion, the members — architects, builders, land planners and interior designers — shared their ideas on home and community design. Their discussion included color, texture, affordability, size, context and the popularity of outdoor rooms and courtyards — even in the Snow Belt states. Here are their most significant findings. Rising land prices and increases in construction costs, while a part of the building industry for some time now, have become major factors influencing several current building design trends. For instance, the higher cost of doing business has brought a new group of builders into the multifamily housing arena. It has also reduced the number of architects available for certain project types. Higher costs also are contributing to a recent dearth of community planning on the part of local officials. And growth controls are increasing building and development costs which, in turn, are affecting affordability. The first four trends listed are directly related to rising costs.
This is the number one trend identified not only by the design committee, but by the judges in the Best in American Livings Award (BALA) competition (www.housingzone.com/bala). Rising costs have put the price of the most basic single-family home out of reach for median-income families. Consequently, because building townhouses, duplexes and other smaller-scale attached products is not so different from building detached houses ― and because increased density can reduce land cost — custom builders are beginning to enter this market. This transition has its difficulties, but the market is there. 2. Fewer Architects Will Be Available for Multifamily Design Just when builders need architects for multifamily design, fewer will be available. There are two limiting factors. Most states require a licensed architect for any building with three or more units. In addition, insurance carriers currently are restricting availability by limiting architects to devoting no more than 10%-20% of their work to multifamily projects. While it is happening nationwide, this trend currently is most significant on the West Coast.
3. Community Planning Is Not Keeping Up With Current Housing and Growth Needs Maybe more accurately labeled a “non-trend,” an apparent lack of community planning using up-to-date planning tools is resulting in greater project costs. Many communities continue to review development plans that fall under 50-year-old comprehensive plans and regulations. This leaves individual developers and builders repeatedly waging the same battles ― fighting low-density mandates, a bias against mixed-use projects, wider than reasonable streets, etc. — project after project. It’s a never-ending cycle that adds even more cost to housing. 4. Growth Controls ― By Any Name ― Are Reducing Affordability When builders attempt to address increased housing demand in their area and challenge outdated community ordinances, their communities generally respond with growth controls. These "growth controls" may come in the form of techniques such as historical districts, design guidelines and more, and they are all part of the arsenal of the no growth advocates. Whatever they are called, all of these restrictions take more time, work and concessions to deal with in order to satisfy neighbors and community activists. They exact concessions from development proposals and require more costly materials and methods in construction, again resulting in additional costs for housing. Affordability is lost in this struggle.
The Tuscan style, from central Italy, is enjoying great popularity in Orange County, Calif. homes. Other regional styles have had similar success in markets beyond where you’d expect to find them. The counterpoint to this idea is that many local communities are demanding regional styles that grow from their local traditions, culture, climate and available construction materials.
Belle Creek, Colo. Courtesy of Braun+Yoshida Architects.
When it comes to home sizes — whether homes are getting bigger or smaller — opinions varied, even among the custom builders on the committee. Some saw homes getting progressively larger while another group saw just the opposite. In particular, they saw that, as families downsize, they are splitting their resources in order to purchase second homes. It is difficult to believe that the recent move to larger homes can continue, since the cost of a median-priced home is already beyond the reach of the median-income family and the “affordability gap” continues to grow.
Energy-efficient equipment in homes.
With its recently announced guidelines for green building, NAHB is taking a leadership role in promoting energy conservation and healthy environments. Coupled with that is the early success of Stapleton, the nation’s largest urban redevelopment now underway at Denver’s Stapleton airport and a model for green building. Each of the 12,000 Stapleton homes is being built in accordance with the Built-Green Program (www.builtgreen.org). And there are three buyers waiting to purchase each completed Stapleton home. This sales success is a clear sign of the public acceptance of green building, and more importantly, the willingness to pay more for the energy savings and the other benefits green building offers.
Classic colors never fade. Doris Perlman, Possibilities for Design. Photo courtesy of Possibilities for Design. Color is being used in a much bolder fashion today. As one committee member pointed out, bright colors have historically emerged during periods of economic well-being and tend to become more safely muted during down times. The architects on the panel suggested that strong colors should be used with care. They can make a dense development feel even denser if overused. They can also detract from a building’s appearance if applied without sensitivity to its underlying architecture. 9. Context Is Fundamental Designing to show respect for neighboring architecture and social traditions has long been a fundamental principal of architectural design. A hilltop Tuscan village is a perfect example. Every building in the village looks the same, save the churches and monuments. They used the same stone, the same roof tiles and the same details ― and yet everyone marvels at the character and style of the village as a whole. In contrast, our American independent attitude has created neighborhoods of individually designed homes — each home attempting to make its own personal statement. 10. Home Builders Help Shape the Market With the Products Offered One builder in the group brought the discussion into focus by reminding us of this fact ― we do, indeed, design, build and sell homes for the market. The trend here may be that we are beginning to realize that we also shape the market with the products we offer. The market didn’t demand television or cell phones, it consumed them en masse when they were introduced.
General Motors and Ford have recently been reminded that sometimes the market wants things now that will be bad for business later. Huge SUVs, popular in recent years, are falling out of favor with escalating gasoline prices — leaving Ford and GM holding the bag facing a shrinking market and falling stock prices. NAHB’s leadership role in green building signals a sea change from the past. Leading these trends versus opposing them may move builders and developers up a notch in the public’s eye, leading to more respect for their efforts and trust that their leadership can be relied upon. That may be a stretch, but it is a positive step in the right direction. Mike Kephart is the founder of Denver-based KEPHART community planning architecture. He has spent 30 years focusing on architecture and planning for people, their needs, hopes, dreams and aspirations. KEPHART partners with builders/developers to serve these human needs. For more information, visit www.kephart.com, or call 303-832-4474. If You Build It Overseas ― Expect ChallengesFairly typical of what Americans can expect when building overseas, here is a short list of the problems that confronted the developers of Sensara Benalmádena, an active adult community in Spain’s Costa del Sol, one of the country’s more popular tourist areas:
Challenges like these are not for the faint of heart or thin of purse. Luckily, the American partners and local developer involved in this project, Grupo Suite of Malaga, had plenty of determination and capital, and a combined half-century worth of experience to overcome those obstacles and open an award-winning community targeted primarily to British buyers vacationing in an area also known as Costa del Golf for its more than 100 golf courses. The Lure of the Sun
British Airways says it sells five pairs of round trip tickets to prospective home buyers before they sign contracts for retirement homes. According to generally accepted projections, more than 10% of the population of the U.K. will have relocated to sunnier destinations. Real estate investment strategists are intent on studying similar trends here at home. With America’s 50+ population expected to number 100 million within seven years, the Caribbean, Costa Rica and Mexico will become increasingly important destinations. Ever on the lookout to help their customers find new markets for building and development, CEMEX, the world’s third largest cement company, asked Active Living International, LLC, to analyze the potential for North Americans to retire in places like Cabo San Lucas, Puerto Vallarta and Cancun. The results were highly positive, especially considering the huge multi-generational Latino population living in the U.S. (Los Angeles is the second largest Mexican city in the world), and the legions of conventioneers, repeat vacationers and time share owners who have cultivated a fondness for Mexico. More than $2.5 billion has already been committed to projects in Loreto Bay (Trust for Sustainable Development) and Puerto Vallarta (Sensara Partners). International Opportunities for American Partners CEMEX is on target in encouraging innovation and active adult living communities dedicated to demanding and savvy buyers. These communities represent new opportunities for the manufacturer’s customers, some of whom are looking to American companies for their talent and experience. Prudential Real Estate salespeople are “on site” for several Mexican resort properties, and buyers can find title insurance from well-known American companies such as Stewart Title and First American Title. Fideicomiso bank trusts are widely accepted and U.S.-style mortgages will soon be available, according to Prudential. Buyers also will want access to health care provided by U.S.-owned companies like Amerimed, frequent and inexpensive flights, local charm, dependable quality, security and a hospitable environment. Toss in a decidedly lower cost of living, and the challenges of developing in Mexico fall well within the realm of timely opportunity. David Collins, a pioneer in active and assisted living for more than 30 years, is the managing partner and director of Active Living International, LLC, an international consulting firm that provides American experience and expertise in the development, marketing, operations and sales of active living lifestyle communities and assisted living development and operations internationally. Founded in 2000 and headquartered in Corona del Mar, Calif., the company serves clients in Spain, Mexico, Portugal, Italy, the United Kingdom and Germany. The firm is headquartered in Corona del Mar, California. For more information, visit the Active Living International Web site at www.activelivinginternational.com. Hurricanes Call For a Job Site PlanThe following article is reprinted from the Florida Home Builders Association. Just as you prepare your home and family for hurricanes, it’s important to prepare construction job sites. Planning ahead makes a big difference in how well construction sites fare during storms. Local emergency operations officials and the National Weather Service will provide hurricane landfall probabilities. Approximately 60 to 48 hours before the hurricane is expected to make landfall, consider canceling the delivery of building materials to all job sites except any materials needed to secure the building site from storm damage. While contractors generally don’t want to stop or delay construction activities, the 48 to 24 hour window before landfall is the suggested time to stop all construction activity. It’s important to note that most local building departments generally stop field inspections, except for those related to pouring columns, tie beams, wet decks, floors and similar structural items, during this time as well. Contractors are encouraged to activate their hurricane job site plan during this window of time. Notify subcontractors to help secure the building site. Helpful hints for site protection include:
After the site is secure, advise subcontractors to leave and not return until the hurricane threat has passed. Make sure to have contact numbers for all subcontractors stored in a secure and dry place, and that they know who will contact them after the hurricane passes. During the last 24 hours before the hurricane makes landfall, go home and take care of your family and personal property. Other sensible precautions include ensuring that batteries are reliable in all important tools — including cell phones. The construction industry depends on cell phones and other wireless communication devices to coordinate hurricane preparations and clean up after the hurricane passes. Reliable batteries are vital for getting back to normal on the job. Make sure to fill up gas tanks in all vehicles and equipment that might be needed to secure or escape job sites. If there are valuable items that must remain at the site, take photographs for insurance purposes before leaving. Prepare Your Business to Weather the StormBy Jennifer H. Elder, CPA Careful planning will make a big difference in how quickly you get back to business. If you have a disaster preparedness plan, then it will be much easier to cope under difficult conditions. How far in advance you begin planning depends on how much work you have to do, but following are issues to consider:
Once you have survived a natural or other disaster, you need to get your business back up and running as quickly as possible. Get in touch with as many of your employees as you can to let them know what is expected — do they come to work or not? Is there an alternate location? What if an employee has damage to personal property that needs to be addressed? If you have damage, you need to follow five steps:
Jennifer H. Elder is a CPA and certified management accountant (CMA). She is CFO of Tiffany Construction in Melbourne, Fla.
NAHB Has More Than 170 Resources to Help You Run Your Business More Profitably Go to NAHB's Business Management Tools Web pages (available to members only) 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. Heating Solutions That Don’t Require Enlarging BathroomsMike Barnes, of Jud Construction in Muncie, Ind., knows that heating is one of the most important issues when remodeling bathrooms for the elderly or disabled. They can be especially sensitive to cold temperatures, particularly in their lower extremities. In caretaker situations, they also typically require pre-heated bathrooms. According to Barnes, many consumers are taking advantage of the Americans With Disabilities Act under the Medicaid waiver that enables home owners to receive up to $15,000 to remodel their homes. While a substantial amount of money, it basically is enough to cover essential changes and makes more comprehensive remodeling, such as relocating walls, cost prohibitive. Because of the limited funding available, to develop cost-effective solutions that address a client’s heating needs usually requires working with the HVAC system. Move Registers, Ducting and Vents. One of the most common changes remodelers can do is move registers, ducting and vents to create more room for wheelchairs. Sometimes temperature issues also can be solved by relocating forced heat vents, but additional heating options are often necessary. Install Radiant Floor Heating or Wall-Mounted Heaters. Space — in particular floor space — is of the utmost premium because enlarging a bathroom is usually not an option. To gain floor space, existing bathroom heaters and electric baseboard heaters may have to be removed, especially when the bathroom entry has to be widened. Barnes suggests two solutions:
Most bathrooms were not designed to provide the proper access and comfort to disabled persons. But creative ideas and careful planning can lead to solutions that will make both the client and remodeler more than satisfied.
'How to Find a Professional Remodeler' Available at BuilderBooks.com "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.
BuilderBooks.com Offers a Variety of Publications for Remodelers BuilderBooks.com offers a variety of other publications about remodeling. To view or puchase these publications 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.
Who Will Be the Next Remodelor™ of the Month?
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.
Education Calendar
Whether you’re new to the industry, hope to make your next career move or want to improve your company’s bottom line, The NAHB University of Housing can assist you in your education pursuits. Visit www.nahb.org/education for a comprehensive listing of courses throughout the country. Be sure to visit often in order to view the most up-to-date information in your area.
Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera 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.
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. Awards Focus on Green Building AchievementsIn recognition of those who have made a significant contribution to the principles of residential green building, the awards will be presented at the 2006 National Green Building Conference, March 12-14, in Albuquerque, N.M. The awards enable green building practitioners “to showcase their expertise and highlight the positive impact they have made on the environment,” said Matt Belcher, chairman of the upcoming conference. “Winning this prestigious award in the fastest growing segment of the industry will set you apart from your competition.” Awards are being presented in the following categories:
For information about the awards and applications, click here. Entries must be received by Dec. 23. A $300 fee is required for entries in all categories except Green Advocate of the Year and Green Program of the Year (New Program). All winners will be featured in NAHB publications and will receive complimentary admission to the 2007 National Green Building Conference. Ask the Lawyer — About Volunteer WorkQ. My heart goes out to the residents of Louisiana and Mississippi who have suffered so much from Hurricane Katrina. The destruction is just unbelievable. I want to help any way that I can. One thing I can do is to donate my services as a contractor and my equipment to aid in community reconstruction. I do want to protect my business from potential liability issues, however. Are there steps that I should be taking? A. Builders and remodelers frequently volunteer their time, money and tools for a wide variety of worthwhile projects. Whether it involves wholesale reconstruction in the wake of a natural disaster; participation in a home build project, such as Habitat for Humanity; or a charitable project organized by their local home builders association, such as wheelchair ramp construction, builders and remodelers have repeatedly demonstrated great compassion and generosity that truly makes them pillars of our communities. Volunteer work does present some potential pitfalls. The contractor has no control over the condition of the property or structure, which could be poor, and the contractor may be faced with an adverse working environment. Poor conditions could pose construction problems and result in latent defects that could potentially lead to a future claim and lawsuit against the contractor. Given the circumstances, and because the work is being performed for no compensation, it is not unreasonable to ask the property owner for a waiver of liability and disclaimer of warranty. A sample disclaimer of warranty and waiver of claims document is set out below: Disclaimer of Warranties – Waiver of Claims
This agreement is made and dated this ____ day of _____, 20__, by and between ____________, hereafter referred to as the Contractor, and ______________, hereafter referred to as the Property Owner. In consideration for the following described work to be performed on a volunteer basis without charge by the Contractor at the following described premises owned by the Property Owner, the parties agree as follows:
Premises: _______________________(address)_____________________________________ ____________________________________________________________________________
Work performed: _________________(description)___________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ The contractor shall perform the work as described. The Property Owner accepts this performance “as is” without warranty. Any express, statutory or implied warranties, including an implied warranty of workmanlike construction, an implied warranty of habitability, or an implied warranty of fitness for a particular use, are hereby waived and disclaimed. Waiver of claims — The Property Owner further agrees, in consideration for the performance of the above-described work, to assert no “claims” against the Contractor arising out of the condition of the premises, including but not limited to claims resulting from the work performed by the Contractor, and any resultant or consequential damages therefrom. The Property Owner further agrees to indemnify and hold the Contractor harmless from any and all liability from third party claims and expenses that may arise out of the Contractor's work on the premises or from the condition of the property, to include all reasonable attorneys' fees and other legal expenses that the Contractor may incur. I acknowledge receipt of this disclaimer of warranties and waiver of claims document. I have carefully read and reviewed its terms, and I agree to its provisions. ____________________ __________ _________________ ___________ PROPERTY OWNER DATE CONTRACTOR DATE (CAUTION) The sample language in this disclaimer is provided for educational purposes, and may not necessarily be compatible with the laws of each state. Some states may require disclaimers to contain specific language, specific format, and/or may require a specific type size. Some states may not consider disclaimers for residential construction to be valid under any circumstances. Builders and remodelers should consult with their local attorney concerning the validity of disclaimers in their jurisdiction, and concerning the appropriate language and form of disclaimer instruments. If you have questions for Ask the Lawyer, click here. There is no guarantee that your question will be answered in this format, so if you have a particular legal concern that requires immediate attention, contact the NAHB Legal Research Service at 800-368-5242 x8491. "Ask the Lawyer" is a service of the NAHB Legal Action Committee and NAHB Building Products Issues Committee. The information provided is intended to familiarize you with the law in this area. It is not intended to be an exhaustive presentation of legal information on this particular subject, and in no way constitutes an opinion of law. Your own attorney must review this information to determine how it may apply to your particular situation. Record Attendance at Superintendent CoursesSEBC, held by the Florida Home Builders Association, set an attendance record of its own, with more than 15,000 people visiting nearly 900 exhibits at the Orange County Convention Center. This is the third consecutive year that HBI has offered the RCS designation program in its entirety at SEBC. The program has remained among the more popular events at the conference, with instructors speaking before packed rooms. The RCS designation is a continuing education program for future field superintendents and current construction site personnel who are sharpening their skills. The designation consists of eight, four-hour courses covering material identified by NAHB members as essential to a field supervisory job. “The RCS designation program has always set the highest standards of training for project managers, whether it’s customer service, hiring and training or trade contractor relations” says Beverly Koehn, president and owner of Beverly Koehn & Associates in San Antonio. “Each course prepares students to assume a leadership role on and off the construction site.” Koehn has conducted several RCS classes at SEBC and elsewhere, all with positive results. “The RCS designation program has always upheld the highest standards of training for project managers, whether it’s customer service, hiring and training or trade contractor relations” says Koehn. “Each course prepares students to assume a leadership role on and off the construction site.” To date, 3,500 students have received RCS training through 26 home builders associations in 16 states. For more information on the RCS designation, click here, or e-mail Joe Krinock at HBI, or call him at 800-795-7955 x8928.
Become a More Effective Superintendent “Basic Construction Management: The Superintendent’s Job,” available through BuilderBooks.com, provides information that will sharpen a superintendent’s skills in maintaining budgets, preparing and meeting schedules and ensuring quality control. Special focus is placed on developing and managing systems to address key information and skills that superintendents need to master in order to succeed. To view or purchase this publication online, click here, or call 800-223-2665. Insulation Keeps Out Crawl Space HumidityDow Building and Construction is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB. Dow’s Thermax™ foam sheathing can be installed on the interior of crawl space walls to help keep the non-vented or closed crawl space warm, dry and comfortable. Unlike other foam insulations, the manufacturer says that Thermax can be left exposed on the interior, per International Code Council National Evaluation Service Report NER-681. Diagonal Metal Bracing For builders who are seeking ways to use less OSB and plywood while maintaining the structural performance of the home, Dow suggests using diagonal metal bracing in combination with insulating foam sheathing, such as its complete line of Styrofoam™ and Dow polyisocyanurate insulated sheathing solutions. When walls are braced with diagonal metal braces, per Section 602.10 of the International Residential Code (IRC), Dow says that the entire wall surface can be covered with energy- and cost-saving rigid insulated foam sheathing. For more information on Dow’s full line of insulation, click here, or call 866-583-BLUE (2583). 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. Harrisburg Builders ‘Housing a Nation’ Oceans Away“We’re in the business of housing a nation,” said Wendy David, executive vice president of the Home Builders Association of Metropolitan Harrisburg in Pennsylvania. “Just because it’s not our nation, doesn’t mean we wouldn’t help.” That was the philosophy that motivated the recent $1,000 donation by the Harrisburg association to the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund. The Tsunami Shelter Fund was formed last December to help rebuild homes destroyed by a deadly South Asian tsunami that left more than 280,000 dead and 1.2 million people homeless. The donation was an example, David said, of her board “rising to the occasion, without reservation or hesitation.” The money donated by the HBA of Metro Harrisburg contributes to the nearly $360,000 raised nationwide. NAHB has designated Habitat for Humanity® International (HBHI) and Shelter For Life International (SFL) to be the recipients of money raised for the Tsunami Shelter Fund and has now distributed the funds to these two organizations, with $75,000 going to HFHI and $283,000 going to SFL. Funds will by used by Habitat to build an NAHB Home Builders Care Disaster Response Technical Center in India. Shelter For Life will use donated funds for an NAHB Home Builders Care Village of permanent homes in Indonesia. Now Focusing on Katrina The National Housing Endowment, the philanthropic arm of NAHB, has closed this fundraising effort and is now focusing on collecting donations for the victims of Hurricane Katrina. To read more in this issue about the NAHB relief fund establibhed for victims of Hurricane Katrina, click here. NAHB-Produced Shows on HGTV & DIY — This Week"I Want That!" on HGTV
"Dream Builders" on HGTV
"Rock Solid" on DIY
"Assembly Required" on DIY
The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use. The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.
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. Builders Help Install Basement Windows in Foster HomesWhere basements spaces are used for sleeping, foster homes are now required to have windows that can provide a way to escape in the case of emergency, something that most homes in the area, especially those that are older, don’t have. The egress window issue has compounded a shortage of licensed foster parents in Kent County, Mich. Association member Bob Deppe, of RDI Development Co., has appealed to excavators, contractors and lumber yards to donate time and materials for three projects that are providing basement egress. “There’s a huge need for foster families,” Deppe said. “To have someone lose their licensing over something like this would be a real shame.” Deppe is a foster parent himself, and a board member of Home Repair Services, which in partnership with the builders association supports a Community Repair Day. 2005 marks the 14th year of this initiative. Builders Support Hurricane Ivan Recovery EffortsAt a recent home and product expo, Doug Sprague, president of the Home Builders Association of West Florida, presented a $100,000 check to Rebuild Northwest Florida, a public/private partnership that is coordinating need-based recovery initiatives for citizens of Santa Rosa and Escambia counties. Some 75,000 homes in those counties were damaged by last year’s storm and 50,000 people were displaced. More than 37,000 of those homes belonged to families with annual household incomes of less than $30,000, and more than 10,000 families did not have the financial means, government assistance or insurance coverage to make adequate repairs. A collaborative effort involving citizens, non-profit organizations, churches, government and businesses, Rebuild Northwest Florida is providing assistance for local residents to rebuild and fortify their homes. “We made a commitment to do this for our community and our members stepped up the plate and made it happen,” Sprague said at the check presentation. Also attending were Lieutenant Governor Toni Jennings and David Peaden, executive director of the builders association. Sprague noted that members of the association contributed another $125,000 to the rebuilding effort before its pledge drive. September Is Associate Appreciation MonthSeptember is Associate Member Appreciation Month and local and state association staffs are encouraged to recognize the myriad contributions that associate members make. NAHB’s Membership Team is providing local and state associations with a special section of the “3-in-1 Membership Kit” specifically for Associate Member Appreciation Month. These resources include:
For more information, e-mail Agustín Cruz at NAHB. Subscribe Your Employees — You Could Win a Digital CameraSign up three or more of your employees for Nation's Building News and you automatically will be entered in a contest to win a Sony digital camera. There have been five winners already — the most recent winner is Robert Poole, of Poole's Plumbing, Inc. in Raleigh, N.C. — and you could be next. To subscribe your employees to Nation’s Building News and be entered in the "Make Your Business Click" contest, visit our contest subscription page by clicking here. {{MORE}} Subscribe your employees and they will begin receiving timely, valuable industry and business news at their desktops beginning with the very next issue. News that can help increase your company's profitability and efficiency. And all it takes is a few mintues of your time. Nation's Building News is NAHB's free, online newspaper. Inside, you'll find the latest lumber prices, industry news, builders' tips, lumber prices, problem-solving floor plans and more. For more information or to sign up your employees, click here.
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. Save on Dell™ Computer ProductsDell, the world's leading computer systems company, offers discounts to NAHB members on an array of products designed to meet the technology needs of your company. Discounts are available on:
Contact the Dell Association Sales Representative at 888-577-3355, Monday-Friday, 7 a.m.-8 p.m. (CT) and Saturday, 8 a.m.-5 p.m. (CT). Other Member Advantage Discounts For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/ma.
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.
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. Save More With BuilderBooks.com RewardsBuilderBooks.com is offering it's first-ever Rewards program to provide privileges, savings and rewards to its loyal customers. Launched at the 2005 International Builders’ Show, the program is available for a $9.95 annual fee.
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