Print-All Page: September 19, 2005

NAHB last week offered Congress several recommendations on how to address the immediate critical housing needs of Hurricane Katrina evacuees and the long-term reconstruction of housing infrastructure and supply in the aftermath of the storm’s extraordinary devastation.

NAHB President David Wilson urged the federal government to partner with the building industry to tackle the monumental rebuilding efforts.

“The task of rebuilding is unprecedented, with more than a million people homeless or displaced,” Wilson told members of the House Financial Services Subcommittee on Housing and Community Opportunity. “While NAHB understands the immediate need to build temporary housing quickly, ultimately, it is important that quality housing is rebuilt and that community character is restored to affected neighborhoods.”

Roughly 9,000 NAHB builder members have found themselves displaced, or their homes or businesses lost, in the aftermath of the storm, and Wilson noted that, “NAHB and its state and local associations are working as quickly as possible to get these builders back on their feet so they can begin rebuilding in their communities.”

To help hasten and facilitate relief efforts in the near-term, Wilson urged lawmakers to ensure that the Section 8 Housing Voucher program can be used to address the emergency needs of existing voucher holders who were left homeless by the disaster, as well as the needs of newly displaced persons.

“This will require waiving statutory and regulatory provisions related to income certifications, minimum rent contributions, waiting list rules, initial inspection requirements and voucher payment standards, among others,” he said.

Wilson also urged Congress to allow those uprooted by Katrina to rapidly move into units financed with Low Income Housing Tax Credits without placing an undue burden on apartment owners. This can be accomplished, he suggested, by implementing consistent program waivers for all Department of Housing and Urban Development programs.

To expedite new construction and rehab activities over the long-term, Wilson called on lawmakers to provide waivers to statutory and regulatory provisions in the FHA mortgage insurance, HOME, Community Development Block Grant, Section 108 Loan Guarantee and USDA Rural Housing Service programs.

The availability of large amounts of building materials will be critical to the massive repair and replacement effort, Wilson said, and the federal government has the opportunity to ease the impact of the price spikes and shortages that can be anticipated by rescinding tariffs on key building components.

“Exorbitant duties imposed on Canadian lumber and Mexican cement, as well as new duties on Brazilian plywood, have increased the cost of housing and contributed to shortages of materials,” Wilson said, adding that the recovery from the four major hurricanes that struck the Gulf Coast region in 2004 is still incomplete, hampered by a lack of roofing, concrete and other vital materials.

“Requirements for wood products and cement cannot be met from domestic sources even during normal times, and materials costs and shortages will only be exacerbated by Katrina rebuilding efforts,” he said. “Therefore, NAHB urges Congress to ask the U.S. Department of Commerce to lift the tariffs currently in place on lumber, cement and plywood.”

Finally, NAHB urged lawmakers to take additional steps to address labor needs in the region, streamline the construction permitting process and create additional tax incentives for redevelopment and construction.

NAHB Provides Relief, Resources for Hurricane Victims and Displaced Builders

NAHB launched a multi-pronged relief and rebuilding effort to assist Hurricane Katrina victims — both the general public and building industry members — just days after the hurricane came ashore and devastated the Gulf Coast, killing hundreds, destroying or damaging hundreds of thousands of homes and leaving 1 million people homeless.

To address immediate and critical housing and humanitarian needs, NAHB last week donated $1 million to the American Red Cross and Salvation Army. Contributions of $500,000 were made to each relief organization.

To help get important information out to displaced builders and the general public, NAHB has begun posting disaster relief resources, including contact information, on the NAHB Web site.

NAHB has also launched public service announcement campaigns in Alabama, Louisiana, Mississippi and Texas aimed at locating displaced builders and educating the public on how to find and work with reputable builders and remodelers.

NAHB President Dave Wilson went before Congress on Sept. 15 to offer several recommendations on how to address the immediate critical housing needs of Hurricane Katrina evacuees and the long-term rebuilding effort. (See related story elsewhere in this issue for details.)

NAHB members around the country began donating funds and resources to the relief and rebuilding effort almost immediately. At the fall NAHB Board of Directors meeting earlier this month, NAHB members donated more than $120,000 and pledged another $300,000 to the newly-formed building industry relief fund. Members are being encouraged to continue to donate to the fund.

To raise much needed funds for the massive rebuilding effort that lies ahead, NAHB established the Home Building Industry Disaster Relief Fund with an initial contribution of $1 million.

The fund will assist builder members and their associations in Louisiana, Mississippi and Alabama whose operations have been disrupted by the hurricane so they can get back on their feet and help rebuild their communities.

NAHB Immediate Past President and Mississippi home builder Bobby Rayburn is leading NAHB's efforts in the Home Building Industry Disaster Relief Fund. NAHB members are encouraged to donate to the fund now.

Checks should be made payable to the National Housing Endowment. Please note “Home Building Industry Disaster Relief Fund” in the memo section of the check.

Details about the disaster relief fund can be found on the NAHB Web site. For more information, or to donate, visit www.nahb.org/disasterrelief. The fund was established as a charitable 501(c)(3) entity.

NAHB also has created a new NAHB Disaster Resources section on the NAHB Web site in order to assist the general public and members of the building industry. The section includes general information, links and contact information for everything from donating building materials and labor to finding housing assistance.

Both resource sections also offer more detailed and contact information on related topics.

NAHB has launched several public service campaigns for radio, television and newspapers in the stricken areas along the Gulf Coast and in Texas in an effort to find displaced NAHB members and others in the building industry, as well as to educate the public on how to find reputable builders and remodelers when they begin rebuilding.

In Louisiana, Mississippi and Texas, NAHB currently is focusing the campaign on finding displaced and economically injured building industry members and getting that contact information to the state and local home builders associations.

In Alabama, NAHB has launched a similar public service campaign, but with the focus on helping consumers find reputable builders and remodelers and warning them of fly-by-night contractors.

On Wednesday, Sept. 21, state and local association members and staff in the affected states, along with staff from the Florida Home Builders Association and NAHB, will meet in Jackson, Miss. to discuss the needs of the members and associations in the affected areas.

Rayburn and Home Builders Association of Mississippi Executive Vice President and EOC President Marty Milstead will conduct the meeting. Federal government representatives, including those from FEMA, are expected to attend.

NAHB is continually updating information on disaster relief and rebuilding on the NAHB Web site.

Paying for Flood Damage Looms as Big Challenge

For home owners whose property was destroyed or damaged from Hurricane Katrina, the widespread flooding and wind damage “creates an enormous gray area, which provides the insurance companies with an opportunity to delay or deny coverage, and it’s going to be a battleground for lawyers for years to come,” according to Finley Harckham, a partner at law firm Anderson, Kill & Olick PC, which primarily represents policyholders. Most home owners in the path of Katrina lack any flood insurance, which is excluded from standard policies and generally must be purchased from the federal government with a $250,000 cap. Class-action attorney Richard Scruggs said that he plans to ask Mississippi’s attorney general to try to override flood-exclusion clauses in home owners’ policies in the state in the interest of public policy, which could force insurers to pay many billions of dollars more toward rebuilding costs. Estimates for Katrina’s damage so far exceed $100 billion, and private-sector property-casualty insurers are expected to pay $14-$35 billion of that amount. The top of that range would be 50% more than the inflation-adjusted cost of paying for Hurricane Andrew. The insurance industry currently has more than $400 billion in assets to cover claims nationwide. (www.realestatejournal.com)
RealEstateJournal (9/9/05); Theo Francis, John D. McKinnon and Peter Sanders, Wall Street Journal

Baton Rouge Real Estate Becomes Hot Property

The mass migration from Hurricane Katrina promises to reshape life in cities such as Houston; Jackson, Miss.; Mobile, Ala.; and Memphis, Tenn, and has increased the population of Baton Rouge, La. from 400,000 to 500,000, increasing demand for housing and office space and raising concerns over the ability of the city’s infrastructure to support the new arrivals. Class A office space in Baton Rouge has increased from $18-$19 a square foot before Katrina, to $24 now. On the residential market, where “a fast sale here was a home that sold in a week in a hot neighborhood, today, homes last for minutes,” according to Judy Burkett, a local Realtor®. “You put them into the [Multiple Listing Service] system, and they’re gone almost immediately.” Real estate agents reported to Rep. Charles Boustany (R-La.) that 250 homes were sold in one day in Lafayette, about 60 miles west of Baton Rouge, and just about every available property has been sold. If the dislocation is a permanent change, governments will be pressed to come up with the money necessary to expand services and infrastructure, and to create new jobs, schools and subdivisions to accommodate the new residents. (www.realestatejournal.com)
RealEstateJournal (9/7/05); Jeff D. Opdyke, Wall Street Journal

New Building Materials Better Withstand Storms

Manufacturers have been re-engineering wall studs, sheet rock, insulation, paints and other building materials to ward off wind loads or minimize damage from flooding. Andersen has beefed up its line of StormWatch vinyl-clad windows with impact-resistant glass reinforced with clear plastic laminate sandwiched between two panes to resist impact. Extra silicone glazing keeps the panels stable. Jeld-Wen AuraLast wood preservative is being used to make a window that won’t rot, swell or deteriorate in post-hurricane climates. Owen Corning’s insulated Polar Wall Plus vinyl siding panels include a rolled-over double nail hem that it says can withstand winds to 200 mph. “Weep holes” at the bottom of each panel allow water and moisture to escape. Honeywell is promoting cell foam sprays as a superior insulating product that also contributes to wall sturdiness; the spray foam hardens quickly when applied between studs. NAHB says that the spray foam panels withstood wind loads that were two to three times higher than those supported by fiberglass-built panels. (www.chicagotribune.com)
Chicago Tribune (9/9/05); David Bradley, AP Weekly Features

Louisiana Superdome’s Future Uncertain

Among discussions about rebuilding New Orleans are growing calls to demolish the 30-year-old Superdome. Large sections of the roof were shredded by Hurricane Katrina’s 233-kilometer-per-hour winds, and Warren Louis Reuther Jr., a member of the commission that oversees the Superdome says, “There is no way to repair it now. We are going to have to take it down. The roof has been peeled back. It is still underwater as of right now.” A new stadium will have to be built to higher standards, he adds, even though the Superdome did not blow down. Even before Katrina struck, the New Orleans Saints had started exploring the possibility of building a new retractable roof stadium by 2009 to replace the 27-story-tall Superdome, which is their home field. (www.voanews.com)
VOA News (9/7/05); Jim Stevenson

Analysis: Thousands of Homes Doomed as Waters Recede

If you were to swim around inside some of the flooded homes in New Orleans, you would know right away that many of them are not likely to survive, according to Ken Ford from NAHB. “You’ll see wood flooring buckled,” he said. “You’ll see if you have vinyl sheeting it’ll be turned up at the edges. Plaster walls will have started to disintegrate. If it’s drywall, it will crumble.” Older wooden beams begin to warp and rot after sitting underwater for just 12 hours, Ford says. Newer pressure-treated beams may last a few days longer. Most bricks will survive a flood, but the mortar holding them together might not, Ford says. For all of these reasons, he expects many of the houses now flooded to start to collapse under their own weight as the floodwaters recede. (www.npr.org)
NPR: All Things Considered (9/8/05); Melissa Block, host

Showdown Looms Over Eminent Domain Power

The San Diego Redevelopment Agency is gearing up for a battle next year over legislative proposals in California to limit or end the power of government agencies to take property and sell it to a private developer as allowed under June’s Supreme Court decision in the New London, Conn. case. The agency says that it rarely undertakes eminent domain proceedings, but that it uses the power to negotiate deals. Among the properties that the agency is attempting to buy now are 14 acres south of Diridon Station to be used for affordable housing, or a baseball stadium. John Shirey, executive director of the California Redevelopment Association, says that the Supreme Court case had no impact on California, where, as in most states, a condemnation cannot take place unless the government agency can show that the area to be taken is blighted. “We have strong laws in California that strike a balance between redevelopment and property rights,” he said. (www.bizjournals.com)Silicon Valley/San Jose BusinessJournal (9/9/05); Timothy Roberts

Builders Urge Reform of Immigration Laws

With President Bush expected to push his “guest worker” immigration initiative in the coming months and legislative proposals by Sens. John Cornyn (R-Texas) and Jon Kyl (R-Ariz.), S. 1438, and Sens. John McCain (R-Ariz.) and Edward Kennedy (D-Mass.), S. 1033, pending, the NAHB Board of Directors enacted policy during its recent meeting in Reno, Nev., calling on the Congress to reform the nation’s immigration laws.

The resolution notes that while it is of paramount importance to all U.S. citizens and NAHB members to protect and secure the nation’s borders, the contribution of a substantial immigrant workforce plays a critical role in sustaining the national economy and meeting the nation’s housing needs.

To help facilitate the employment of foreign nationals in the U.S., NAHB is calling on Congress to “create a new visa system whereby more immigrants can legally enter the residential construction workforce each year and be put on the path to temporary or permanent legal residency or citizenship.”

Citing estimates that more than 400,000 people illegally enter the U.S. each year, NAHB endorsed congressional efforts to address this problem by creating a system that would provide temporary or permanent legal residency or citizenship for the nation’s growing population of undocumented immigrants.

NAHB policy also calls on the Administration and Congress to promptly “pursue changes in the criteria for a flexible visa classification that will address the needs of the construction industry for a labor supply sufficient to meet the nation’s housing needs.”

To read the legislation, click here and enter the bill number in the box at the upper left.

Record Damage to Homes to Tighten Material Supplies

The long road to recovery from Hurricane Katrina is likely to exacerbate shortages of skilled construction labor and key building materials over the next several months, according to an ongoing disaster analysis by NAHB.

Latest estimates from the American Red Cross show that the magnitude of the storm’s destruction dwarfs the losses from any other U.S. natural disaster. Approximately 275,000 homes have been completely destroyed, according to the organization’s damage assessment, nearly 10 times the 28,000 housing units leveled by Hurricane Andrew in 1992 and the 27,500 homes lost in the four hurricanes that struck Florida last year.

Although most attention has focused on New Orleans, the number of homes beyond repair in Mississippi, roughly 69,000, is more than twice the number destroyed in Florida in 1992. Across Louisiana, Mississippi and Alabama, the Red Cross estimates than an additional 77,000 homes are currently uninhabitable, and will require major repairs.

Before Hurricane Katrina hit, cement was in short supply in parts of 30 states, according to the latest industry reports, and prices were up about 15% from a year ago to about $90 per ton.

Further compounding the situation, about 12% of the nation’s cement imports last year arrived through New Orleans and Mobile, Ala., areas that suffered major destruction.

And structural repairs from the hurricanes that battered the region in 2004 have still not been completed, hampered by tight supplies of roofing, concrete and other vital materials.

“There are going to be a lot of bottlenecks in a situation that was strung pretty tight,” said NAHB economist Michael Carliner. “Builders are having trouble keeping on their construction schedules as they have to wait for new deliveries. The cost of those delays may be a greater expense than the higher prices of the materials.”

Due to insufficient domestic production capacity, the U.S. has had to rely on imports, especially of wood products and cement, in order to meet the demand for new homes.

The impact of price spikes and shortages could be eased if the federal government rescinds tariffs on key building materials in support of reconstruction efforts.

NAHB has a long-standing policy calling on the federal government to rescind tariffs on Canadian softwood lumber imports and cement from Mexico, and the association’s board of directors reiterated that position during its meeting earlier this month in Reno, Nev.

To help facilitate and hasten post-Katrina rebuilding efforts, the board on Sept. 11 called on the Bush Administration to “immediately suspend tariffs and other trade barriers on lumber, cement and other construction materials imported from other countries.”

On the following day, a Treasury Department official indicated that the Administration was considering reducing or eliminating the costly duties, observing that the “government has the authority to adjust the tariffs in an emergency situation, but no determination has been made yet.”

While NAHB will continue to urge the Administration to follow through on this initiative, removing the duties on lumber, cement and Brazilian plywood would only provide a partial solution to the supply problem.

Timber harvests from private forests are already at or beyond maximum sustainable yields, and sales of timber from public lands have been reduced by 87% since 1990, increasing housing costs and reliance on imports even before Katrina pounded the Gulf Coast.

In the coming weeks and months, recovery efforts are expected to focus on cleaning up and minor repairs, with the rebuilding phase probably not beginning until early next year. In addition to those destroyed or suffering major damage, almost 115,000 homes have incurred minor damage from the storm, according to the Red Cross, and another 30,000 were “affected.”

Meanwhile, fears of shortages have led to a short-term run on plywood, roofing, OSB and other materials, as contractors and builders seek to stockpile supplies.

The trade publication Random Lengths reported that its OSB composite price jumped from $301 per 1,000 square feet on Aug. 26 prior to Katrina to $365 on Sept. 2 in her immediate aftermath. The price was running at $444 on Sept. 16.

The price on Random Lengths’ Southern pine composite has surged from $476 just before the hurricane to $606 last Friday.

The price spikes are not unprecedented. Plywood costs jumped nearly 45% in the weeks following Hurricane Andrew in 1992.

Roofing materials, which had already been in high demand following last year’s hurricanes in Florida, are also expected to remain in tight supply.

Although the cost of framing lumber has climbed from $355 to $403 per 1,000 board over the past three weeks, prices are expected to moderate over the near-term, in part because trees blown down from Katrina will be harvested, helping to offset lost inventories.

With the supply of skilled workers already tight around the country, there are also fears that labor shortages could develop in some places as crews head to the Gulf Coast. There are still shortages of construction workers in Florida as a result of the unfinished efforts to repair damage from last year's hurricanes.

For more information, e-mail Michael Carliner at NAHB, or call him at 800-368-5242 x8376.

Fed Chairman's Housing Comments Refuted on New NAHB Blog

NAHB recently launched new housing economics blog, "Seiders on Housing."

NAHB Chief Economist David Seiders refuted recent claims by Federal Reserve Chairman Alan Greenspan that the current housing boom was one of America’s major “economic imbalances.”

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
Housing drives economic growth into the third quarter

The U.S. economy maintained strong forward momentum through mid-2005, extending the cyclical expansion that began around the end of 2001. Real gross domestic product (GDP) grew at a 3.3% annual rate in the second quarter, slower than the first quarter pace but still quite solid.

Indeed, GDP growth came to 3.6% on a year-over-year basis, the same as the first quarter, and final sales of domestic product (excluding a temporary shortfall in business inventory investment) expanded at a robust 5.4% annual rate.

Housing has been a major part of the economic growth picture during the entire economic expansion to date. The housing production component of GDP (residential fixed investment) grew at a 9.8% annual rate in the second quarter and contributed 0.56 of a percentage point to the GDP growth rate — in line with the historically high contributions recorded for 2004 and the first quarter of this year. Housing also has been providing strong support to the economy through stimulus to closely related industries as well as through large wealth effects (generated by rapid home price increases) that have supported consumer spending.

Available monthly indicators for July and August point toward maintenance of strong GDP growth in the third quarter. However, Hurricane Katrina hit the Gulf Coast region at the end of the August and seriously complicated the economic picture for both the third and fourth quarters. The depth and duration of her impacts will depend largely on the degree of damage to energy extraction, refining and transmission infrastructure in the Gulf region, and to the extensive port facilities in that region as well as on reactions in financial markets (including interest rate declines) to the effects in the energy markets and the economy.

At this point, the economic damage from Katrina looks quite serious but largely temporary. We’ve made significant cuts to our GDP growth forecast for the balance of this year and installed an incomplete recapture in 2006 — on the assumption that energy prices will remain above the pattern assumed in our previous forecast and that interest rate adjustments will not fully neutralize the negative energy effects. Personal consumption expenditure bears the brunt of our downward revision to GDP growth, but we’ve held the housing component at pre-Katrina levels, largely because of the supportive interest rate effect.

GDP growth has qualified as “above-trend” for more than two years, and we still expect modestly above-trend growth for the rest of this year and early 2006. This kind of growth generates systematic improvements in the national labor market. Payroll employment gains averaged 194,000 for the first eight months of this year (that’s quite good) and the unemployment rate was down to a cyclical low of 4.9% in August (note that Katrina occurred after the survey period for the August employment report).

The falling unemployment rate indicates that “slack” in labor markets has been reduced substantially during the past two years. That’s definitely good for workers, but shrinking slack in resource markets certainly creates challenges for our inflation-sensitive central bank as the economic expansion proceeds. The issue is labor cost per unit of output, and that’s been on the rise. Katrina will provide, at best, temporary respite from progressively tightening labor market conditions.

Systematic growth in economic output (real GDP) and gradual tightening of labor market conditions have put upward pressures on labor costs as well as “core” inflation in the U.S. economy (excluding prices of food and energy). Key measures of core consumer price inflation were well behaved in June and July, including the core components of the Consumer Price Index and the key price index for Personal Consumption Expenditures.

Despite the recent readings, core inflation still is well up from cyclical lows in late 2003 and is running close to the upper end of the Federal Reserve’s apparent comfort zone. Furthermore, the Fed has been expressing concern about inevitable “leakage” of high energy costs into the core, and Hurricane Katrina certainly has intensified those concerns.

The Fed has been systematically withdrawing monetary policy “accommodation” from the economy since mid-2004, raising its federal funds rate target from 1% to 3.5% in the process. Minutes from the most recent meeting of the Federal Open Market Committee (FOMC) on Aug. 9 highlight the Fed’s growing concerns about core inflation and point toward another quarter-point increase in the funds rate at the next FOMC meeting on Septe. 20.

The Fed has stressed that its policy adjustments are “data dependent,” however, and Chairman Alan Greenspan recently highlighted Fed adoption of a “risk-management approach” to policymaking that provides leeway to move against a low-probability event with a potentially severe negative outcome.

The Fed has continued to say that remaining monetary policy accommodation can be removed “at a measured pace,” and NAHB’s baseline (most probable) forecast has been assuming quarter-point rate hikes at each of the next four FOMC meetings. But it’s likely that the economic disruptions from Hurricane Katrina will encourage a change in Fed policy, and futures markets now show much lower probabilities of near-term Fed rate hikes than before Katrina landed.

Long-term interest rates still are below their levels of mid-2004, despite the systematic increases in short-term rates by the Fed and the upward percolation of core inflation pressures. Furthermore, Hurricane Katrina prompted another downshift at the end of August, dropping the 10-year Treasury yield by about 20 basis points.

A number of fundamental factors have held down long rates, including a surplus of saving on a global basis, and bond market participants obviously are requiring little compensation for committing funds on a long-term basis. NAHB’s forecast assumes that further monetary tightening, revival of various risk premiums and dissipation of Katrina’s negative effects on economic growth will move long-term rates upward, but the increases should not be dramatic. The upward path in our forecast is somewhat shallower than before, for several quarters, although our projected rate structure for the end of 2006 is the same as in our pre-Katrina forecast.

Greenspan recently argued that lowered risk premiums “have propelled asset prices higher,” and he pinned that charge on stock, bonds and homes. With respect to housing, Greenspan referenced undue optimism about the potential for additional increases in home prices as well as “exotic” forms of adjustable-rate mortgages (ARMs) that have fueled home purchases for owner-occupancy as well as for investment/speculation.

The Fed chairman actually characterized the current “housing boom” as one of “America’s economic imbalances” — along with the huge current account deficit and the seemingly intractable federal budget deficit. Greenspan predicted that “the housing boom will inevitably simmer down,” holding open the possibility that the slowdown process can involve adjustments in interest rates and prices rather than more-wrenching changes in output.

The single-family and multifamily condo markets certainly have been quite strong, and sales records recently were set in both markets. Furthermore, national house price appreciation has been accelerating (up to13.4% in the second quarter on a year-over-year basis) and an increasing number of local markets qualify as “boom” areas marked by unsustainable price behavior.

Greenspan’s “simmer down” vision is the most likely prospect. The boom markets inevitably will cool down as the house price increases erode affordability conditions, interest rates rise, lending standards strengthen in ARM markets, speculators move to the sidelines and expectations for further house price increases are scaled back. These adjustments will reflect a combination of natural market forces and efforts by policymakers and financial rating agencies to restore better balance to mortgage and housing markets.

Growing housing equity provides valuable buffer against Katrina’s attack on the economy

The ongoing increases in house values have generated a huge amount of wealth for America’s home owners — about 70% of all households. This phenomenon has allowed households, in the aggregate, to run the national personal saving rate (income less consumption) to historic lows (now around zero) without eroding household sector net worth positions.

Household sector housing equity (housing value less mortgage debt) now is more than $10 trillion, providing a major buffer to household spending against drains in purchasing power created by surging energy costs. Households can borrow against this equity or rely on consumer credit, if necessary, to help weather the storm.

Our baseline (most probable) forecast still portrays a “soft landing” for the national single-family housing market, as the downward interest rate adjustments in the wake of Katrina roughly offset inevitable shortfalls in home sales and single-family starts in the affected areas (these areas normally account for less than 2% of national totals) as well as longer-term negative impacts from the higher energy costs. We’re projecting modest erosion of home sales, house price appreciation and housing production beginning before the end of the year.

Our current forecast shows declines of roughly 6% in home sales and single-family starts in 2006, and we expect the national rate of home price appreciation to recede from the double-digit rates of recent times to roughly half that pace next year. Price declines could be recorded in some local markets, but serious setbacks should be avoided as long as economic conditions continue to move forward.

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 Sept. 7 edition. To subcribe to “Eye on the Economy,” click here.

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.

Anticipate the trends, make better decisions and improve your bottom line. "HousingEconomics.com", the online publication from 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 and metro forecasts.

“HousingEconomics.com” combines unique scientific research with practical applications providing insights that are original and useful. This interactive Web site at the executive level provides critical data and information quickly, easily and frequently and includes the following features:

Energy Code Rollback Campaign Down to the Wire

Only about two weeks remain before code officials at the International Energy Conservation Code (IECC) final hearings in Detroit vote on a proposal by NAHB to roll back increased wall insulation requirements for wood-framed construction.

In the final stages of its nationwide campaign for the rollback, NAHB is urging all of its members to contact the code officials who attended recent ICC code hearings or conferences and are likely to vote on the rollback proposal, EC16-04/05, next month.

Around the country, representatives of local and state home builders associations who have been meeting with code officials to educate them and answer questions about this issue are finding an extremely receptive response.

NAHB members can click here for resources that will enable them to participate in the current rollback campaign. Materials include detailed background information, a sample letter to send to code officials and state-by-state lists of more than 1,100 of the officials who are likely to be voting on this issue in September.

While significant progress has been reported in NAHB’s grassroots effort to educate code officials about the unnecessary toll the expensive insulation requirements would impose on the affordability of housing, mustering the two-thirds majority of code officials needed to topple the so-called reform remains an uphill battle, according to association leaders.

The Department of Energy agrees with NAHB that the increased wall insulation requirements are not cost-effective and would fail to provide significant energy savings for home owners. The department found that going from R-13 to high-density fiberglass R-15 insulation to meet the increased requirements could add $600-$1,000 to the price of a typical 2,000-square-foot home, but would yield only $15 a year in energy savings. The vast majority of home owners would never be able to recoup the cost of the higher insulation.

Further, if builders move from 2x4 to 2x6 studs to meet the higher wall insulation required by the code, the added cost would jump to $2,000-$4,000 for a typically sized home.

“This is a bad change for consumers because it will drive up the cost of housing,” said NAHB President David Wilson. “For every $1,000 increase in the cost of a new home, more than 240,000 potential home owners are priced out of the marketplace.”

Wilson added that the nation’s home builders support building codes that promote energy efficiency, “but home buyers should not bear the burden of expensive new requirements that provide negligible benefits.”

In its rollback drive, NAHB has been joined by the sprayed-foam and cellulose insulation manufacturers, APA (The Engineered Wood Association) and the glass-block industry. Many types of insulation would effectively be excluded from the marketplace because builders using them would not be able to meet the new ratings with standard 2x4 wall construction.

For more information, e-mail John Loyer at NAHB, or call him at 800-368-5242 x8303.

Builders' Tip: Fitting Pulldown Attic Stairs

Figuring 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.

The angled cut should fit tightly to the floor and the sections should butt tightly together when the stair is folded down.

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. To view these publications online, click here, or call 800-223-2665.

Subscribe Your Employees to Nation’s Building News — and 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.

Improve Your Business, Follow These Basic Principles (Part 2)

Following basic principles as a normal and expected part of operating a company is fundamental to any serious effort to produce exceptional results. To live them day-to-day is to create the kind of team and partnerships necessary to achieve success.

There are 10 basic business principles that should be the basis of how a company operates successfully. In the last issue of Nation’s Building News, we covered four of them ― defining processes; defining and adhering to requirements; prevention; and doing it right the first time.

In this article, we will cover the remaining six principles that, regardless of what business you are in, make good business sense.

Measurement is a concept that has always been difficult for many to embrace. Many employees fear measurements because they believe their employers are using them to catch them doing their jobs poorly or incorrectly. If measurements are being used this way, they are being grossly misused.

Before any change to current processes or procedures is made, look at performance results at a specific point in time to establish a benchmark. Then, once adjustments are made, measure the results on an ongoing basis to be certain that the right changes were made.

If it is later discovered that the changes are not producing anticipated results, further adjustments may be required to get on the right track.

This principle involves understanding that you are both a customer and a supplier within your own organization.

You supply a product or service that is essential to someone else on the team — something that enables them to do what they do. In turn, someone supplies you with the essentials you need to do your work, at which point you are their customer. When we see ourselves in this light, teamwork takes on an entirely new and creative dimension.

By respecting and valuing the needs of our “customers” as well as understanding the abilities and constraints of our “suppliers,” we truly come to value those around us. We define more workable relationships and enhance everyone’s ability to be their best.

Over time, these relationships grow. At first, they are characterized by simply keeping agreements but, eventually, real teamwork will develop with genuine respect, credibility, openness and trust. Customer satisfaction is as important for internal customers as it is in the marketplace.

With the Customer/Supplier Relationships principle, we now have the foundation of a workplace environment where our other principles can realistically be applied.

At the risk of sounding very basic, let’s state the obvious ― people are by far the most important asset of any organization.

Everyone has experience, ideas, values, energy and concern for others, so every successful team effort must allow everyone to contribute their very best. No employee should be wasted or undervalued. Everyone needs to be involved and supported.

We understand that neither markets nor consumers are static in our industry. Managing change is a real and unavoidable component of any successful business or marketing plan.

When continual improvement is a fact of business, it can be a genuine and substantial competitive edge.

A customer expects that everything will work and be perfect from the start. We need to instill realistic expectations with those in whom we are in contact.

Be honest with your customer. While everyone would like a perfect product, achieving that is virtually impossible.

That doesn’t mean you have to lower your standards because you give in to the expectations that there will be defects. Rather, you need to alert your customers to the fact that you may have to make corrections and that you will respond within an agreed upon, realistic time frame.

Keep in mind that what we do every day is commonplace to us, but not necessarily so with our customers. So, it’s important to see the situation from the consumer’s perspective and level of experience.

Establishing realistic expectations will take a great deal of time and patience. Perhaps the first commitment that needs to be made is to this principle: Acknowledge the level of challenge that has been set and the level of patience that it is going to take to get there. Then hold each other accountable for being impatient with the process and infinitely patient with each other.

Change has to be proactively managed. It cannot be allowed just to happen in reactive and uncontrolled ways.

If these basic business principles have been followed, a system to effect change and improvement will exist.

The system must be adhered to. Individuals cannot take it upon themselves to administer change outside the system. In a situation where there is no team player…try and be the team player.

In part one of this discussion, I suggested that when you read each principle, pause and ask yourself, “What would be different ― and better — about our work environment, product, service and/or relationships, if this principle was lived out in our workplace everyday?”

We are all in this together ― home builders, trades, suppliers and all of their employees, as well as our home buying customers. Our chances of success are enhanced when we follow these principles and team together to accomplish our goals.

To read part one of this discussion, visit “Improve Your Business, Follow These Basic Principles (Part 1)” in the Sept. 5 edition of Nation’s Building News.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.

This article has been condensed from its previously published version in BUILDER DIGEST of California magazine, for which Manny Schatz writes an ongoing column.

“Benchmark Your Business,” available through BuilderBooks.com, helps home builders, developers and trade contractors evaluate and assess business management and operational systems. This resource guide directs the reader to a wealth of resources to improve benchmarks for each system. To view or purchase this publication online, click here, or call 800-223-2665.

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.

Custom Builder Symposium Now in Atlanta

The 2005 Custom Builder Symposium, originally scheduled to be held in New Orleans in November, has been moved to Atlanta.

The symposium will take place on the same dates — Nov. 11-13 — at the Sheraton Atlanta.

Featuring industry-specific education and networking opportunities, the symposium gives custom home builders, remodelers, architects, developers and other industry professionals an opportunity to quickly ramp up the essentials of managing and growing their building businesses.

The symposium will also include 17 educational sessions with the following topics:

Attendees also can attend several advanced, two-day educational sessions and a roundtable discussion with industry veterans to swap business tips and best practices.

Rodney Miller, of Walt Disney World, will discuss, "What your passion can do for you." Prior to joining Walt Disney World, Miller was an executive facilitator for companies including Westinghouse, AT&T, Sears, PepsiCo. and NASA.

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.

'Residential Performance Guidelines' Available From BuilderBooks.com

The contractor's and consumer's references of the "Residential Performance Guidelines, Third Edition" are now available through BuilderBooks.com. With almost 300 guidelines in 12 major construction categories, including 50 new guidelines on cabinets, cement board siding, concrete, countertops, drainage, driveways, drywall, landscaping water infiltration and more, these references were created to help builders and remodelers create and manage customer expectations while delivering high performance homes and protecting their bottom lines. Click here to order both the contractor and consumer references online. For the contractor's performance guidelines reference only, click here.

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, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.

Stop by the BuilderBooks Bookstore at the Custom Builders Symposium for books you need to build your business, great savings and giveaways. BuilderBooks.com Reward participants, show your Rewards card to receive an additional 5% off your purchase.

Safety Resources Provided for Katrina Recovery Workers

In its response to Hurricane Katrina, the Occupational Safety and Health Administration has deployed safety and health professionals to Louisiana, Mississippi and Alabama to provide technical assistance to recovery workers in their ongoing cleanup efforts along the Gulf Coast.

OSHA is distributing safety and health fact sheets and materials at supply and construction stores in the affected areas, and has released public service announcements in English and Spanish to inform workers about hazards in the restoration and cleanup effort.

The Web sites are also providing information on working with chainsaws, heat and sun protection, the physical and mental stresses involved in working under arduous conditions and more. Links to other government resources are also provided.

“The Department of Labor has already dispatched teams of OSHA professionals to the devastated regions to help ensure that the restoration of power and telecommunications facilities and infrastructures are done in a safe way,” said Labor Secretary Elaine L. Chao. “And they will continue to be in the region for as long as it takes to ensure the health and safety of workers involved in the rescue, recovery and rebuilding efforts.”

OSHA teams on the ground are focusing on safety and health issues for workers involved in debris removal and a variety of construction projects, according to Jonathan Snare, deputy assistant secretary of labor for OSHA.

“We are augmenting our regional headquarters in Dallas and Atlanta with more safety and health experts who will provide technical assistance to assure the safety of the thousands of workers who will be on site throughout the Gulf Coast over the coming months,” he said.

At its fall board meeting in Reno, Nev. earlier this month, the NAHB Board of Directors urged OSHA “to protect relief and construction workers by emphasizing technical assistance and working with NAHB on all health and safety-related issues encountered during the cleanup and reconstruction of the affected areas.”

For more information on OSHA and NAHB efforts to protect workers during Hurricane Katrina recovery operations, e-mail Rob Matuga at NAHB, or call him at 800-368-5242 x8507.

The first ever English-Spanish “Jobsite Safety Video,” available through BuilderBooks.com, provides an overview of the key safety issues residential builders and workers need to focus on to reduce accidents and injuries. Based on the “NAHB-OSHA Jobsite Safety Handbook” this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos. To view or purchase this DVD online, click here, or call 800-223-2665.

“The Jobsite Safety Handbook: English-Spanish Edition,” 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. To view or purchase this publication online, click here, or call 800-223-2665.

2006 Seniors Housing Awards Entries Due Sept. 30

Entries for the 2006 Best of Seniors Housing Awards are due Sept. 30. Late entries will be accepted until Oct. 7 with a $50 late fee.

The entry deadline for the 2006 Best of Seniors Housing Awards — the premier design and marketing competition for the 50-plus housing industry — is Friday, Sept. 30.

Sponsored by the NAHB 50+ Housing Council, formerly known as the Seniors Housing Council, the awards program honors the best in more than 50 categories covering all aspects of the seniors housing industry.

Active adult categories include overall community, clubhouse design, condominium unit design and model home merchandising.

Other design categories include aging in place, assisted living residences, congregate living community, continuing care retirement communities, mixed-use, multifamily housing, renovated seniors housing and special needs housing.

The marketing categories include logo, community brochure, direct mail piece/campaign, Web site, black-and-white and color print advertisement, radio and television commercial, sales center and special promotion.

Entry forms and contest rules are available online at the NAHB 50+ Housing Council Web site at www.nahb.org/SeniorsHousingAwards. Or call 800-368-5242 x8220 for more information.

Winners will be announced at the Best of Seniors Housing awards ceremony during the 2006 International Builders’ Show in January in Orlando, Fla.

Save 15% when you purchase “The Seniors Housing Publication Set” through BuilderBooks.com. Receive one copy of “Boomers on the Horizon: Housing Preferences of the 55+ Market,” “Marketing Seniors Housing” and the “Best of Seniors’ Housing News.” This publication set is a must-have for anyone serving the active adult market. To view or purchase this publication set online, click here, or call 800-223-2665.

Puzzle Winners to Receive Free PREP Assessment

The NAHB Remodelors™ Council, along with six generous sponsors, is taking an extra step to promote education at this year’s Remodeling Show, which is being held on Oct. 12-15 in Baltimore.

The first 50 attendees who complete an interactive puzzle at the show will have the opportunity to take the Professional Remodelers Experience Profile (PREP) assessment for free on Oct. 15; this is a $195 value and is the first step to becoming a Certified Graduate Remodelor™ (CGR) candidate.

The three-hour 130 multiple-choice question assessment measures a candidate’s knowledge in five core areas of remodeling business management: marketing and sales; business administration; design, estimating and job costing; contracts, liability and risk management; and project management.

The CGR designation enables remodelers to become members of an exclusive national program, gain recognition as industry leaders and stand out in a crowded marketplace.

To get started on the puzzle, the first stop for Remodeling Show attendees should be the NAHB Remodelers™ Council booth (#721), where they can obtain a puzzle frame that will enable them to start collecting their pieces.

The 50 winners are being asked to bring their own supplies — a pencil, scrap paper, calculator and ruler — to the PREP administration on Saturday, Oct. 15.

How to Create Effective Home Pages

A home page serves as a communication device that establishes the proper mood or “feel” to generate interest, excitement and, ultimately, a call to action. It is the start to a relationship between you and a potential client.

There is evidence that, when Web sites are designed with a specific user in mind, users are more apt to take action and the user retention rate is higher.

So, before you start the design process or evaluate your Web site home page, determine your Internet objectives and identify your audience.

To create an effective home page and communicate your message successfully, it is essential to consider the following elements:

For credibility and contact information purposes, a home page should clearly identify the source of the information being communicated. Include a name and relate what level of authority that source is.

It’s also critical to know whether the source is a hobbyist, a professional in the subject area, a Ph.D., etc. If the Web page represents an organization rather than an individual, then that also must be clearly indicated. Include your company name, address, contact information and credited affiliations clearly on the home page to accomplish this.

Obviously, this refers to content. First, you want real, readable information here — not just links.

Second, you want validated information. “What do you do that will help me?” is a solid approach for this. A well-defined tag line that explains what your company does and what makes it unique can convey this message effectively and efficiently.

“There is perception that print and Web are very similar; that good design for print is good design for Web. We found that was not true," said Jared Spool, co-authoror of "Web Site Usability: A Designer's Guide."

What's important here is that Web authors need to remember that Web pages should be written to operate, as much as possible, across multiple user system settings, operating systems (Microsoft, Mac, UNIX, etc.), and various monitor sizes and resolution settings.

Web browsers (AOL, Internet Explorer, Netscape, etc.) also display pages differently, and configurations for sound, pictures and motion are not necessarily universal. Choose a reputable Web development company to ensure that you have a proper design and application compatibility.

Many ― maybe most ― Web authors don’t explicitly identify their target audience. Not targeting Web pages to a specific group of users is arguably the number one reason these Web sites fall short of their potential.

Your objective is to effectively communicate with the demographic that best corresponds to your product. Make it clear to your users that they belong at your site. For instance, if you are building luxury estate homes of more than $1 million, you shouldn’t include listings of communities selling in much lower price ranges.

They can be technical. Can the sound be downloaded? How long does it take a picture, graphic or movie clip to be downloaded?

They can be pragmatic. What use is the material and information you are providing?

All three factors have to be considered when effectively developing and presenting Web pages.

A significant portion of your users probably do not have broadband Internet connections, so keep in mind the time it takes to download your home page when designing it. A good rule is to limit your home page to no more than 80 KB in total size. Or, be sure it takes less than 10 seconds to download using a dial-up modem connected at 56 K.

The following principles take into account specific factors — quality of content, navigability, logical organization and functionality ― that focus on the needs of the site visitor rather than on the perceptions and preferences of the designer.

Just as you do your best to make your model home inviting and comfortable for a potential customer, you need to do the same with your online presence. Both are important elements of a cohesive and targeted marketing effort.

When a potential customer enters your Web site, you want to provide them with the information they want as efficiently as possible. If done correctly, more of your targeted online users today will become home buyers tomorrow.

Dottie Fawcett, CRB, CMP, MIRM., has served as the Northeast regional sales manager for HomeBuilder.com™ since 1996, providing Internet marketing solutions for area builders. She has helped builders create award-winning Web sites. For more information, e-mail Fawcett or call here at 800-220-2201.

“Internet Connections for Marketing Success,” available through BuilderBooks.com, explains the technical aspects of setting up, running and maintaining a Web site and choosing the software applications and tools that can help. This book shows you how to establish a brand, do market research, develop e-newsletters and more. 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.

IRM Offers Courses and Designation Programs for Sales & Marketing Professionals

The Institute of Residential Marketing (IRM) offers four designation programs for sales and marketing professionals:

Deadline Nears for The Nationals Awards

Time is running out to enter your best in new home sales and marketing and design for the 2006 The Nationals – the National Sales and Marketing awards, the largest and most prestigious competition for new-home sales and marketing professionals and communities.

Sponsored by NAHB’s National Sales and Marketing Council, The Nationals honor the best in architectural achievement, product and community design, advertising and promotion, interior merchandising, Web site design and more. The awards are open to individual sales and marketing professionals, home builders, associates and sales and marketing councils.

Late enties will be accepted through Wednesday, Sept. 28, with a $50 late entry fee.

The Nationals recognizes innovation and excellence in 53 categories, including two new categories for small-volume builders.

Category winners will be honored during a gala event at the International Builders' Show in Orlando, Fla. on Jan. 11.

For more information, visit www.TheNationals.com, or Lisa Parrish at 800-658-2751 or 909-987-2758.

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

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.

NAHB Co-Sponsors Collegiate Solar Home Competition

NAHB is co-sponsoring the U.S. Department of Energy’s Solar Decathlon, in which 19 teams of college students from across the country and Canada and Puerto Rico compete against each other to design, build and operate the most attractive, livable and energy-efficient solar-powered house.

The students are judged on architecture, livability and comfort, and such tasks as heating water and powering appliances. Each team must also provide enough solar electricity through their homes to power an electric vehicle.

The 800-square-foot homes were designed and built at the students' respective colleges and will be transported to arrive at the "Solar Village" on the National Mall in Washington, D.C. on Sept. 29, and then will be open to the public on Building Industry Day on Friday, Oct. 7, and disassembled on Oct. 19.

Building Industry Day will feature special competitions and six educational workshops about emerging power technologies, green design practices and more, including a presentation on "NAHB's Model Green Home Building Guidelines — an Overview" by the NAHB Green Building Subcommittee.

“We are excited to have the opportunity to present information on our green building guidelines for mainstream residential companies to such a wide audience,” said Eric Borsting, a builder member from California and chairman of NAHB’s Energy Subcommittee. “We’re also pleased and honored to be a sponsor of the Solar Decathlon, and assist the Department of Energy and the participating universities in bringing solar technology to the forefront.”

In addition to the workshop, NAHB will co-host a student reception on Oct. 6 and sponsor an energy-efficiency award that will be presented to one of the student teams.

For more information or a full schedule of the Solar Decathlon and Building Industry Day, visit the NAHB Web site.

Building Industry Protected From Endless Liability Periods

In an Aug. 18 ruling in the case of Winnisquam Regional School District v. Daniel J. Levin, the New Hampshire Supreme Court concluded that members of the building industry are entitled to protection from suits brought more than eight years after substantial completion of a construction project. With this decision, New Hampshire joins a number of states across the country that have recognized the need to protect the building industry from a potentially endless period of liability for defects.

The particular case in New Hampshire points up the pitfalls of working on projects in states that don’t have a statute of repose, a legislative remedy that limits lawsuits to six to 12 years from the completion date, depending on the state. Without a statute of repose, plaintiffs can potentially come back with a claim decades later, contending that they were unable to “discover” the alleged defect within the normal three-year period that applies to most actions brought in civil court.

In the New Hampshire case, the general contractor, Dutton & Garfield, Inc., installed a new roof over a middle school in 1991, substantially completing it by the spring of 1992. The school district’s project engineer, in response to questions from the general contractor, indicated that the structure — a pre-engineered metal building manufactured in 1973 — would require no additional bracing for the roof.

In March 2001, a civil engineer attending her daughter’s concert noticed what she believed to be “buckled bridging” in the building frame purlins (the beams) across the top of the school gymnasium. An inspection reached conflicting conclusions that the buckling was caused by that winter’s extraordinarily heavy load of wet snow or by some failure in the roof design or installation.

More than nine years after “substantial completion” of the project, the school district sued engineers who had made an assessment of the roof in 1991, the general contractor, the installation subcontractor, the school’s own project engineer and the roof manufacturer.

The school project engineer had passed away by this time, and none of his office records could be located; and the general contractor had a policy of destroying old records after seven years. As a result, the defense was left with a gaping hole in the information it needed to refute the claim.

The initial round of litigation ended with a $136,500 jury verdict against Dutton & Garfield, Inc., out of a damage claim exceeding $700,000.

When the case reached the New Hampshire Supreme Court the issue that needed to be addressed was whether the state’s statute of repose was constitutional, specifically whether it was in the public interest to limit the period in which action could be brought against real estate projects, and whether the law was balanced in how it treated prospective litigants. The court concluded unanimously that the statute met constitutional muster.

Though not referenced directly in the court’s decision, the New Hampshire Special Claim Study, undertaken years earlier by Schinnerer & Company, Inc. and submitted to the State Senate Judiciary Committee, showed that 96% of the claims filed against New Hampshire’s design professionals were brought within seven years of substantial completion of the construction project. This led the legislature to conclude that its statute was unlikely to eliminate very many truly legitimate claims.

The study also showed that injury and damages suffered long after the completion of construction were usually caused by improper maintenance, inspection, repair and other similar factors over which those involved in the construction had no control, and that requiring design professionals, material men, laborers and others to defend themselves against stale claims forced them to contend with faded memories, lost evidence and witnesses who could no longer be found.

The court specifically rejected a comparison of those in the building trade with doctors or manufacturers. Buildings are subject to inspection during construction and are certified for occupancy only after they comply with the applicable standards. And once industry members leave a project, an owner or occupant has the ability to inspect, repair and insure the structure, and certainly is responsible for maintaining it. Finally, builders can’t go back into a building without the authority of its owner or occupant.

As such, the New Hampshire Supreme Court agreed that the state legislature had sound reasons for enacting a statute of repose limiting lawsuits against construction projects to eight years following their completion.

If your state doesn’t have a statute of repose, you should bring the New Hampshire case to the attention of your state legislators so that they can take the steps that are needed to protect your entire industry from a potentially endless period of liability. As of Aug. 18, New Hampshire now enjoys the protection of an eight-year period after a project is substantially completed. This provides a reasonable and fair balance between the interests of the building industry and the consuming public.

R. James Steiner, Esq. represents clients involved in a variety of civil matters, personal injury issues and family law. Located in Concord, N.H., his firm, D’Amante Couser Steiner Pellerin, P.A., provides general legal services in New Hampshire and New England. He served as lead trial counsel and lead appellate counsel in the Winnisquam Regional School District case, defending Dutton & Garfield. Steiner is a graduate, cum laude, of Suffolk University Law School. Prior to practicing law, he served with distinction as an Army Green Beret with the 10th Special Forces Group (Airborne).

Advanced Registration Deadline for Sunbelt Nears

The deadline for advanced registration — and corresponding lower registration fees — for the annual Sunbelt Builders Show (SBS) is Friday, Sept. 30.

After that date, registration fees for the builders' show will be higher and attendees will be charged $50 for now free "expo-only" tickets.

The 2005 Sunbelt Builders Show, which features what's new in this region's booming housing market, will be held Oct. 12-15 at the Gaylord Texan Resort and Convention Center in Grapevine, Texas.

More than 300 exhibitors and nearly 5,000 builders, custom builders, remodelers and contractors are expected to attend. The exhibit floor is completely sold out.

In addition, special events planned at SBS include an EPA/OSHA conclave in which attendees can talk with OSHA and EPA representatives from Region 6, the Excellence in Leadership Dinner, a Star Awards recognition ceremony and a two-hour Delaney Vineyard wine tour.

The Sunbelt Builders Show is produced and managed by NAHB, which owns and manages the largest annual home building event, the International Builders’ Show.

Be sure to stop by the BuilderBooks Bookstore at the Sunbelt Builders’ Show for great books, great savings and great giveaways. Stock on the books you need to build your business. Merchandise with the Sunbelt Builders’ Show logo will also be available. BuilderBooks.com Reward participants, don’t forget to show your Rewards card to receive an additional 5% off your purchase.

Systems-Built SHOWCASE Relocates to Louisville

The Building Systems Councils’ SHOWCASE — the annual networking, education, and trade show event for all facets of the systems-built housing industry — has been relocated from New Orleans to Louisville, Ky. The show’s dates remain Nov. 6-9 and its overall format remains intact.

The SHOWCASE host hotel will be the Louisville Marriott Downtown. SHOWCASE attendees can take advantage of a special $139 per night room rate as soon as the room block becomes available.

All registrations for SHOWCASE 2005 have automatically been transferred to the Louisville event, including the golf tournament and spouse/guest programs.

SHOWCASE features the finest in concrete, log, modular and panelized home construction. Show highlights include a two-day trade show, several general and breakout education sessions and ample networking opportunities.

The SHOWCASE Web site is continually being updated with the latest information on the Louisville relocation.

For more specific information about SHOWCASE or systems-built housing, contact the Building Systems Councils at 800-368-5242 x8576.

Atlanta Condo Using Tunnelform Construction System

The system provides a fast-track, cost-effective method of construction to produce energy-efficient homes that are sound-, fire- and weather-resistant.

During the tunnelform construction process, concrete is poured into a structural tunnel that provides the framework for floors and walls. The walls and slabs are poured simultaneously, resulting in a high-strength monolithic concrete structure.

To accelerate the curing process, the interior of the forms can be heated overnight, using built-in gas heaters. The following morning, the forms are stripped and repositioned for the next concrete pour, resulting in a daily construction cycle for the builder.

Outinord's tunnelform method can reduce a typical project schedule by several months. The pace of construction on The Manhattan is projected to approach seven floors a month.

Amenities for the luxury property will include a 24-hour concierge service, world-class fitness center with a private personal training room, resort-style pool and fountains, professional indoor golf training center, rooftop lounge and deck, regulation tennis court and views of Atlanta’s downtown, midtown and Buckhead skylines.

Homes in The Manhattan are priced from the mid $200s to more than $1.2 million for a penthouse.

Water Loss a Warm-Weather Concern for Mortar

Unlike concrete, adding water to mortar is not only allowed, it’s encouraged, especially during warmer weather when evaporation can leave the material with a consistency that’s difficult to work with and inadequate for proper bond development.

The water that’s lost should be replaced by mixing additional water into the mortar; the process is called retempering.

There are also seven steps that can be taken to reduce water loss from the mortar:

As always, mortar should be mixed for three to five minutes in a mechanical mixer using the maximum amount of water consistent with good workability. It should be retempered as needed and thoroughly remixed.

Retempering can affect the appearance of mortar joints, particularly where colored mortars are used. The use of retarding admixtures in conventional mortar systems is not recommended. Retarders delay the amount of time it takes the mortar to set, but they do not reduce evaporation rates.

Affordable Homes Aimed at Workers in Trenton

The Leewood at North Willow Green development in Trenton, N.J., is providing homeownership opportunities for working families and serving as a model of public-private partnership for the city.

The 35-home development is made up of three- and four-bedroom townhomes alongside a new community park in New Jersey 's state capital.

The homes have been sold to qualified buyers with annual incomes ranging from $26,000 to $80,000. Purchasers received 100% financing at market interest rates and a generous real estate tax abatement from the city for the next five years. In Mercer County, with median income for a four person household at $74,717, the homes were affordable to workforce families with combined earnings between 35% of median income and 107% of median income.

R. Randy Lee, CEO of Leewood, and Michael Fink, president of the company’s New Jersey Division, accepted the Innovation in Workforce Housing Award, which recognizes outstanding communities across the nation that provide decent and affordable homes for workforce heroes, including nurses, police officers, schoolteachers and other service personnel, near areas in which they work.

"The National Association of Home Builders has long recognized the importance of providing quality, affordable housing to those who vitally need it," Lee said. "This award elevates Leewood Real Estate Group's prestige in the arena of urban and affordable/workforce housing, and we pledge to continue developing communities that will fulfill the dream of homeownership for those in the workforce."

The townhomes include eat-in kitchens; two full baths; generous closets and storage; central air conditioning; distinctive brick facades; private, grass rear yards; and private parking. Some models have full basements, others have garages and recreation rooms.

"Many families and individuals who presently live or work in the Trenton area have wanted to become home owners, but could not afford expensive downpayments and closing costs, and there simply weren't many high quality new homes available at reasonable prices," said Fink. "This new community, with homes affordable to those who teach, police and otherwise make up the City of Trenton 's workforce, allows our home buyers to experience the pride of homeownership and to have investment benefits while enjoying their spacious, state-of-the-art new homes."

Leewood at North Willow Green was part of a statewide effort to develop modern new homes that are affordable for New Jersey families. A public/private partnership of the Leewood Real Estate Group (NJ Division), the City of Trenton, New Jersey Housing and Mortgage Finance Agency (HMFA) and the Concerned Pastors of Trenton and Vicinity all played key roles in the development of the community. More information about the development can be found at www.northwillowgreen.com.

“It is my pleasure to bring attention to projects that are designed to meet the needs of America’s working families,” said Bobby Rayburn, immediate past president of NAHB and a home and apartment builder from Jackson, Miss. “The Innovation in Workforce Housing Awards emphasize creativity in community design, financing and in partnering with other community groups. I can’t think of a better way to single out builders and developers who are ahead of the curve on addressing this critical need.”

Entries for the 2005 Innovations in Workforce Housing Awards Now Being Accepted

The 2005 Innovations in Workforce Housing Awards are open to builders, architects, designers, developers and land planners for communities completed (or for which the first model opened or the first unit was occupied) between Jan. 1, 2003 and Oct. 28, 2005. All entries, including supporting materials, should be postmarked by Oct. 28 to be eligible for inclusion in the competition. Winning entries will be announced at the 2006 International Builders’ Show in Orlando, Fla.

For more information about entry guidelines, or to get a copy of the entry form, go to www.nahb.org/workforcehousing or e-mail Blake Smith, or call him at 800-358-5242 x8583.

Kansas City Builders Assess Students’ Carpentry Skills

Home Builders Institute (HBI) sponsorship of the 2005 SkillsUSA carpentry competition held during the early summer in Kansas City, Mo. provided an opportunity for construction students to interact with five established builders from the area who helped judge the contest.

The competition measures students on their accuracy, ability to read and interpret blueprints, workmanship and use of tools and equipment as they work to complete their required tasks in just six-and-a-half hours.

How the students go about their work, their regard for safety measures and practices, and the finished product itself all factor into the final scoring of the judges, who have a first-hand opportunity to assess how the students would handle themselves on a job site.

Provided with the exact amount of nails, screws and other materials needed to complete the task, students in the carpentry competition are required to build a structure containing wood and steel partitions, rafters, stairs, an interior finish and a concrete column form.

Each builder was assigned to judge 26 students in no more than four of the overall categories.

“There are some really bright kids here and we like to see what they are capable of, and our tough grading allows us that luxury” said George Schluter of GWS Homes. “But when it’s all said and done, we give them some pointers and advice that will help them move forward in the industry.”

“The level of expertise seems to advance each year, and this year we had more participants complete the project than I ever remember,” he added.

HBI, the workforce development arm of NAHB, promotes the home building industry as a career and helps address its workforce needs through trades training and job placement programs.

For more information on the SkillsUSA competition, e-mail Keith Albright at HBI, or call him at 800-795-7955 x8911.

New Way of Cooking on National Tour

Now through November in a tour stopping at select locations around the country, Whirlpool Corporation is inviting building and design professional to experience a new way of cooking with the manufacturer’s Velos™ Gold SpeedCook Oven, which leverages speedcook and convection technology to substantially reduce cooking times.

On the tour, trained brand managers of the Velos™ oven will be providing product and cooking demonstrations, along with helpful advice and timesaving tips for housing industry professionals to share with housing consumers.

The new oven’s combination of quartz and halogen light, g2 SpeedCook technology r

Nation's Building News Online: September 19, 2005

Extraordinary Measures Needed to Spur Rebuilding