NAHB Services Come First for President-Elect Pressly
Incoming 2006 NAHB President David Pressly admits to having made more than his fair share of mistakes in the home building business over the past 30 years, but he blames himself. “I know I’ve made more mistakes than anybody else you’ll ever meet or talk to,” he said. “A shortcoming of doing everything yourself instead of working with someone bigger who has done these things is that it takes a little more time going through the learning curve. Congruent with the mind set of a good home builder, we all learn from those errors and build a better process or stronger company from having made them.”
But when it comes to accounting for the successes, it’s a different story. Pressly acknowledges that he couldn’t have done it without mentors or without participating in his local home builders association, and he advises grassroots members of NAHB not to underestimate the value of federation resources in helping to keep their businesses thriving in the competitive home building industry.
Pressly is a third-generation resident of Statesville, N.C., which is located near the foothills at the intersections of interstates 40 and 77 about a 45-minute drive due north of Charlotte. His grandfather was a Presbyterian minister in the historic city, and his father was a general practitioner in an era when doctors still made house calls and knew the members of their community well.
With a population of about 25,000, Pressly’s hometown, like small cities across the South, has built its economy on textile, apparel and furniture manufacturing. A draw for employers to the area has been the availability of a less expensive labor supply, but Statesville is also at the hub of Nascar racing, which has created some jobs with great wages and raised demand for middle-class homeownership. The city continues to diversify, expanding its tax base, a process that Pressly helped foster as a former mayor and city council member.
Pursuing a New Path
Pressly says he was the first in his family to pursue a career in business and it is too early to tell whether his two college-age sons, Lowry and James, will decide to follow in their father’s footsteps. Both, however, “have worked long in the trenches” for their dad “since they were old enough to hold a shovel,” he said. Typical of small building companies across the country, Pressly’s wife, Tammy, who is a licensed general contractor, also is closely involved in running the business part-time.
Pressly became acquainted with the housing industry when he started working as a real estate appraiser following the completion of his service in the U.S. Army. He was a combat engineer from 1969-72, stationed in Fort Campbell, Ky. with the 101st Airborne Division and then in Germany.
Tammy, herself a a licensed general contractor, and David Pressly.
While still working as an appraiser by day, Pressly began his development company in 1976 by remodeling homes and apartments at night. He purchased the properties in run-down condition, spruced them up and then rented or sold them. Stepping up his real estate activities, he then began buying and developing land. “The focus was to create income streams,” he said. “Everything I’ve built has some kind of income stream.”
Using remodeling as a springboard, Pressly bought his first piece of land in the early 1980s and built a 45-unit apartment building on the site. It took several years to acquire the surrounding land, which was used to develop more phases of apartments. The company has held onto the buildings, which are generally two- and three-story walk-ups, and owns and manages 1,000 units today.
Looking back, it is clear to Pressly that the direction of his career in home building has been shaped by educational opportunities that came his way through membership in home builders associations.
Education a Source of Confidence
His introduction to his local, the Iredell County HBA, resulted from the persistence of Charles Feimster, his lumber dealer, who urged him to join. “I finally came around and wrote the check,” Pressly said, and rapidly progressed from attending meetings, to participating on committees and then serving as a local officer.
The educational sessions at NAHB’s show for multifamily builders and at his first convention in Atlanta were eye-openers, Pressly recalls. “They swept me off my feet, it helped me so much to go to those lectures and hear those top experts in the country talking about leasing, managing, building techniques, dealing with the regulatory environment, literally giving me confidence and putting wind in my sails.”
Pressly has scored particular success as a builder of tax-credit housing, something he never would have attempted had he not attended an educational session on the topic by the head of North Carolina’s housing finance agency. Since the mid-1990s, he has built three tax credit properties and two are on the drawing board.
Another revelation occurred at his first Spike party after receiving free tickets through his local president. “My observation was that if this is what Spikes do, I want to be one,” Pressly said. Spike parties are the place to meet committed members you won’t encounter at any other NAHB activity, in his view, and they have inspired him to climb aboard the member recruitment bandwagon; he has brought 200 members into the association so far.
Pressly enjoys meeting with other builders who are committed to improving the industry.
Dialing NAHB’s Toll-Free Number
However, the true defining event for Pressly in his appreciation of the value of association membership came less than a year after signing up, when his plans for exchanging commercial property for prime undeveloped land for home building ran into a regulatory impasse that local officials indicated would be insurmountable. The city planner explained that Statesville was required to comply with 12 new directives from the Federal Emergency Management Agency in order to remain in the federal flood insurance program, and under the new policy a nearby creek would preclude development in a neighborhood that was already populated by motels and restaurants.
After calling NAHB’s toll-free number, which he found in the pages of Nation’s Building News, Pressly was put through to Mike Luzier, who worked at the time in the state and local government affairs department and today heads the NAHB Research Center. After listening to Pressly’s predicament, Luzier responded that the city planner was mistaken: he was only required to adopt three of the dozen directives to remain in the insurance program. Pressly received the name and phone number of a regional FEMA administrator in Atlanta, whom he could ask to straighten the situation out. “My city planner was simply dead wrong in his interpretation of that directive, he was simply uninformed,” Pressly said. “Had it not been for NAHB being able to tell me what to do to remedy the situation, I would have lost that deal. My association membership at local, state and national is an invaluable asset to my building business. I could not have done what I’ve done, achieved the success I’ve had, without membership at every level.”
Regulatory and No-Growth Challenges
As a resident of North Carolina, Pressly says he is lucky because there are relatively few regulatory impediments to home building, and the business environment for builders is exceptionally friendly, thanks to the rapport with the general assembly that has been established by the state association. There are no transfer taxes, few impact fees and a relatively streamlined development process. It takes only six months from the start of applying for permits to breaking ground on a project in Pressly’s neck of the woods, and he attributes that to the influence of the association.
Also on the side of good fortune, North Carolina has not delegated taxing or regulatory authority to its local governments. “Authoritative local government would be discouraging,” he observed, and as it has in far too many parts of the country, would probably result in a more difficult and time-consuming regulatory process and needless expense for consumers.
Pressly provides only encouragement to younger builders who are establishing themselves in building and development. “It’s a marvelous career,” he said. However, to ensure success it is more important than ever for those starting out to join their local home builders association, which provides a vital link to the technological, regulatory and other information they need to prosper.
The no-growth movement is one of the greatest challenges for housing today, Pressly said, and an issue that requires a concerted ongoing effort by the industry. “We all get tired of being in lines of traffic and have children going to school, so are worried about overcrowded classrooms. But the precursor of those homes is not builders, but demographics,” he said. As the population continues to grow, “government should do everything in its power to encourage people to live as close to the center of the community as they can.” No-growth attitudes have pushed up the cost of housing, he noted, leaving the only affordable housing options “miles away from where a person works, attends school or wants to go to church.”
Unfortunately, he predicts, the battle for comprehensive land development plans that accommodate housing and economic growth will continue to intensify until governments become enlightened on this critical issue for the future of the nation.
The Battle for Capital
Other issues that will be at the top of the agenda when Pressly assumes leadership of the 220,000-member NAHB in January include legislative efforts to reform the Government Sponsored Enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — and the recent anti-housing proposals of the President’s Advisory Panel on Federal Tax Reform. Pressly sees the draconian approach to GSE regulation and the unraveling of the mortgage interest deduction as the latest in a disturbing trend, starting with the tax reform law of 1986, to shift capital away from housing.
“It’s a fundamental battle for values that most American families hold dear and important: the current capacity to own a home or the future hope or prospects for a young person to own a home,” he said.
“NAHB will be relentless until these issues are resolved,” vowed Pressly. “My directors have given me the opportunity to observe these national antagonists to the housing industry — those who may have a Wall Street bias and believe too much American capital is in housing and who would reduce the nation’s emphasis on housing.”
“Most American families enter the middle class through homeownership,” he said. “If opportunities for homeownership experience some type of diminution, clearly there will be fewer families who will own homes and have the opportunity to create their own personal wealth. It’s easy for the Wall Street segment to say there’s too much capital in American housing, but they would just deprive families at the lower end of the spectrum the opportunity to build assets — equity that can be used to educate children or pay for healthcare, retirement or a second home. It’s NIMBYism at a national level.”
“The battle for capital may go underground for a while,” he added, “but it will never go away. We need to kill it, we need to be as aggressive and vitriolic in our criticism of these efforts as we can be.”
Pressly will also be devoting a good deal of his efforts while president to educating the membership about what NAHB is doing on complex issues like the GSEs, which can be difficult to follow from the sidelines but hold enormous consequences for the ability of the industry to deliver the housing that the nation needs.
“Our grassroots members need a firmer understanding of what NAHB does to help fight regulatory obstacles and maintain access to capital and customers,” he said.
Pressly aspires to leave NAHB a bit stronger than he found it, and that is a mission he is confident of accomplishing by bolstering support for the membership and defining the association by the services it provides.