Print-All Page: March 13, 2006

Their detail and complexity are enough to make most builders’ eyes glaze over, yet the profound effects of codes on the building process and housing affordability make it a bad mistake for builders to ignore them.

Members of the NAHB Construction Codes and Standards Committee and staff experts will be working intently on behalf of housing concerns in the next 18-month cycle of drafts, revisions, comments and hearings in the International Code Council's (ICC) 2006-2007 Code Development Cycle.

Interest groups across the country have been drafting their amendments, and NAHB staff members will soon be looking for builder volunteers who can provide their insights on proposed code changes and their effect on safety, the building process and housing affordability.

The International Code Council develops model codes for residential building, commercial building, electrical, mechanical, energy efficiency and other categories that states and localities either adopt in their entirety or revise based on geography, local preferences or other factors.

The ICC publishes a new edition of the codes every three years, but they are amended every 18 months, ensuring that someone, somewhere is working on a code change at any given time.

Under the process, a national trade association, home builder association, code official, manufacturer or other interest group submits a proposal to change the code. The proposal can be as simple as an editorial clarification of a particular section that is difficult to interpret, or as far reaching as a change in how homes are framed, which can have a significant impact on design and materials.

NAHB is currently preparing draft proposals for the Construction, Codes and Standards Provision Oversight Groups, or POGs, to review. The POGs will return comments to NAHB, and then the package will be sent to the ICC by March 24. In a typical cycle, NAHB will submit between 40 and 60 proposals.

The ICC is likely to end up receiving about 2,000 proposed code changes. As soon as those proposed amendments are published in mid-July, NAHB will begin its evaluation so that it can recommend positions on them.

In August, the POGs will descend on the association’s office in Washington for several days of wrangling over the proposals.

“You’re shoulder to shoulder in all the conference rooms with papers and code books stacked high on the table,” said Jeff Inks, NAHB assistant staff vice president for codes and standards. Staff and volunteers work together to prepare testimony on as many as 700 specific changes.

In late September, ICC will convene in Florida for 10 days of hearings on each proposed amendment; 12-14 hours of testimony each day is typical.

Frank Thompson of Sweetwater Builders near Pittsburgh has been a member of NAHB’s codes committee since the association began work on the first draft of the International Residential Code in 1997. The code work requires long hours poring over complex statistics and arguments, but the end result is well worth the effort, he said.

“You can really make a difference. What occurs at the hearings has an impact on a vast number of our members.” Thompson said. “And it’s not just what makes sense for NAHB, but for the industry to continue to be able to offer affordable housing. If we’re not out there trying to keep housing affordable, there are many other interest groups that will run us right over, so it’s important that we have that presence. I often think we are the only ones out there considering affordability.”

In December, the ICC will send out another telephone-book-sized tome that includes stakeholder comments on the actions on proposed changes that were taken at the public hearings. NAHB members and staff will spend another few weeks preparing comments for submission in late January 2007. The ICC will publish the final comment book in April as the NAHB staff prepares to testify at a final round of code hearings in May.

The ultimate goal, Inks says, is to make sure that the most onerous and least cost-effective changes never see the light of day in a published code book.

Among those who don’t necessarily consider the impact of their proposals on home buyers are manufacturers who have products they would like to see required in the code, safety experts who are never short on ideas, and trade associations advocating changes primarily aimed at benefiting their members. “As builders, we have to concern ourselves with all of the factors that go into a home,” said Chip Dence, of East End Builders in Victoria, Texas and a longtime committee leader. “Consumers don’t historically participate in the code change process, so builders have to be their advocates. We have to be vigilant, and that’s what we do.”

Members who have additional proposals that they would like to see NAHB bring to the table or who would like to help in the review process, should e-mail Larry Brown at NAHB, or call him at 800-368-5242 x8565.

But they will need to be patient, Thompson said. “You need to realize that codes don’t happen overnight, that they are evolving documents. If you have problems, it’s worthwhile to participate, but what we may propose won’t get into the books until 2009.”

Housing Makes a Big Contribution to State Economies

New research from NAHB economists showing that housing is making a significant contribution to Gross State Product (GSP) is now available to help residential builders and developers challenge no-growth initiatives arising in their state legislatures.

Based on statistics from 2002, the most recent year for which estimates are available, the NAHB analysis shows that housing’s share of GSP — the state equivalent of the Gross Domestic Product (GDP) — reached 20% in Hawaii, California and Florida and 19.5% in Colorado. It was as high as 27% in Nevada. The average for all 50 states and the District of Columbia was 15.86%.

"Home builder associations are focused on advancing the building community's agenda with their state and local governments," said Irene Porter, executive director and chief executive officer of the Southern Nevada Home Builders Association. "This data from NAHB helps us demonstrate to legislators just how important the housing industry is to our economy. I think lawmakers will find it very interesting that this industry generates one-in-four dollars spent in the state."

The share of housing in the nation’s goods and services has been rising steadily for the last several years and now exceeds 16% of the U.S. GDP, according to NAHB economist Natalia Siniavskaia, who has been conducting the state-level research for the association.

“Most of this contribution, more than 10%, is housing services created by the existing stock of homes,” she said. “However, a major factor that contributed to the steadily rising share was booming residential construction as reflected in the consistently high number of housing starts, increasing remodeling expenditures and the rising value of new homes.”

In 2002, the total home building share of GSP exceeded 6% in seven states: Nevada (8.32%), Vermont (7.93%), Florida (7.13%), Colorado (6.77%), Idaho (6.49%), Arizona (6.45%) and South Carolina (6.19%).

On average, home building contributed to 4.87% of state output of goods and services in 2002. That amount includes employee compensation and indirect business taxes and profits from home builders and remodelers, producers of building materials and housing-related products, brokers and others.

“While construction companies can easily use local distributors and service providers, the production of major construction materials often takes place outside of the state where the homes are built,” according to Siniavskaia. “For this reason, home building not only contributes to local economies, it also stimulates economic activity across state borders. Booming residential construction in states like Nevada, Florida, Colorado and Arizona spills over to other states by creating demand for additional raw materials and services.”

In Vermont and Wisconsin, where there is significant manufacturing of wood, fabricated metal and nonmetallic mineral products, industries supplying residential construction accounted for 3.6% and 2.5% of GSP, respectively, in 2002.

Even in the states with the lowest share of housing — South and North Dakota — housing’s share of GSP was around 10%.

Housing’s Critical Role Is Focus of NAHB Ad Campaign

In an effort to bring attention to housing’s critical role in maintaining a healthy economy and to elevate the industry’s policy positions on the national legislative and regulatory agenda, NAHB has launched an inside-the-Beltway advertising campaign.

During the year, the association will be running 12 full-page, color ads in the National Journal, a weekly news magazine that is widely read by members of Congress and policymakers.

In a March 11 ad titled “16 cents goes a long way,” a stack of 16 pennies is used to illustrate housing’s share of every dollar in economic activity generated across the country. “It’s a powerful investment that has enabled the housing sector to lead the national economy forward for four consecutive years,” the ad copy reads.

NAHB President David Pressly said that the ad program is part of NAHB’s ongoing effort to remind policymakers of “housing’s critical contribution to economic growth and the American way of life when considering tax reform or other key industry issues.”

“Telling our housing story powerfully and persuasively to members of Congress and top Administration officials is perhaps the most important function of your national association,” he added.

For more information on the ad campaign, e-mail Jay Shackford at NAHB, or call him at 800-368-5242 x8406.

‘Slow Growth’ Has Come at a Cost in Santa Barbara

Three and a half decades after protecting the picturesque coast of Santa Barbara, Calif. became a rallying cry and the source of a steely determination to keep residential developers at bay, residents are learning that slow growth has come with some steep economic, social and even environmental costs. The median price of a single-family house shot up 35% in the last year, from $960,000 to $1.3 million. Sky-high housing costs have forced 30% of the area’s 100,000 workers to drive long commutes: an average 49 miles one way from northern Santa Barbara County or 41 from Ventura County, clogging U.S. Highway 101 and choking side streets during peak drive time and increasing energy consumption and air pollution. Half a dozen Fortune 500 companies have left for less costly locations, and employers who haven’t been uprooted by the housing crisis are finding employee recruitment difficult. Santa Barbara’s College Hospital is facing strong neighborhood opposition to its proposal to build 115 town house units on the site of another shuttered hospital to help recruit nurses, technicians and pharmacists who can’t afford local housing prices. From 2001 to 2005, Santa Barbara added just 400 people to its population compared to a population surge of 10,200 in Santa Maria, the closest place that workers in the city can find housing they can buy. (www.latimes.com)
Los Angeles Times (3/6/06); Jeffrey L. Rabin and Daryl Kelley

A Battle for the High Ground

In a period of housing shortages and shrinking open space, the hills north and east of downtown Los Angeles have become embroiled in a bitter, protracted dispute over development. The fight reached a flashpoint in the fall of 2004, when environmentalists in the area pressed the city council to adopt an interim control ordinance to sharply reduce the number of building permits. The proposal’s restrictions would have slowed development not just of the region’s major parcels but of all land in affected hillside areas, resulting in a backlash from home owners who objected to provisions that would have placed strict limits on floor space and grading and regulated retaining walls, setbacks and building height in ways that discourage some excesses but also limit creative design. The ordinance failed to muster the support needed for passage, but its supporters have instead turned to lobbying for its components on the regulation of grading and restrictions on hillside development. In an initial win, the council passed a tree ordinance adding Southern California black walnuts, California bays and Western sycamores to the oaks that the city protects. (www.latimes.com)
Los Angeles Times (3/7/06); Jim Newton

Town Sets Sights on Quaint Alternative to ‘FEMAvilles’

Ocean Springs, Miss. Mayor Connie Moran has been thwarted in her efforts to build a neighborhood of the 300-square-foot prototype cottages that were unveiled at the International Builders’ Show as a solution to the housing rebuilding needs of the hurricane-ravaged Gulf Coast. FEMA officials explained to her that under federal law the agency can only provide housing on a temporary basis after a disaster, such as the loan of a trailer or larger mobile home for up to 18 months. As a result, the spot where Moran had envisioned rows of starter homes will soon be another post-Katrina trailer park. Eventually, 135,000 trailers will be installed in the region and Moran fears that “FEMA is creating trailer trash.” Mississippi Governor Haley Barbour’s Office of Recovery and Renewal has sent the Bush Administration a proposal to replace thousands of trailers with cottages, and the government has been asked to look for funding from various sources, not just FEMA. The cottage’s architect, Marianne Cusato, said that although no manufacturer is currently making the house, she could have them rolling off assembly lines in six weeks once she receives a big order. The cottage can probably be had for about the same cost as a trailer. (www.latimes.com)
Los Angeles Times (3/6/06); Richard Fausset

Company Finds Green in Clay

Faux finisher Croft Elsaesser’s natural American Clay plaster, winner of NAHB’s Outstanding Green Product award in 2004, has struck a chord with builders and home owners looking for environmentally friendly building products. The clay plaster comes in 32 colors and is much easier to apply than regular plaster. It goes on in two coats with the thickness of a credit card and you don’t need to sand between coats, like gypsum plaster. The company has just come out with a new product, Dos Manos, that combines primer with the clay plaster, taking one step out of the process. Those who have the most trouble learning to use the clay, says Elsaesser, are traditional plasterers who have been trained to lay plaster on thick. American Clay can be re-wetted and molded easily to repair a patch, reconstituted when dry and re-used; when wet, it can be stored for four to six months. The product is about 30%-50% more expensive than paint, costing $1 to $1.20 per square foot, although some pigments cost 40 cents more. The company’s sales rose to $1.72 million in 2005 and are projected to double this year. (www.albuquerque.bizjournals.com)
New Mexico Business Weekly (3/3/06); Megan Kamerick

Nationwide Rents Rise, Vacancies Dwindle

Rents for new and existing apartments in buildings with five or more units were approaching record highs as the national vacancy rate declined to a four-year low at the end of last year, according to NAHB housing analyst Elliot Eisenberg. Based on a quarter to quarter moving average constructed by Eisenberg, rents have increased steadily from the fourth quarter of 2003, when they were climbing at a rate of 1.6%, to the fourth quarter of 2005, when they were rising at a 5% pace. The vacancy rate for buildings with five or more units was 9.5% in the fourth quarter of 2005, down from 10.8% in the third quarter and lower than at any time since early 2001. “Rents are clearly highest on both coasts, median asking rents in the Midwest are at their highest levels ever and the median asking rent in the South is within $38 of its highest monthly reading,” Eisenberg said. A generally robust growth in households helps explain the first sustained increase in renter households since a surge ending in the first quarter of 1995, he added. (www.realtytimes.com)
Realty Times (3/3/06); Broderick Perkins

Industry Watchdogs Warn of Credit-Booster Sites

Industry watchdogs are warning lenders and consumers alike to be cautious about Web sites offering consumers ways to artificially boost their credit scores. Seasoned Trade Lines of Largo, Fla., for instance, charges consumers $1,000 to $3,000 to artificially boost their credit ratings by adding them to established credit cardholders. The company’s Web site claims that it can add up to 200 points to a credit score in 90 days. Once a person’s score has been boosted this way, they may qualify for a loan that is higher than what they can afford, ending up in foreclosure and far worse off than they were before they got the loan, advises Constance Wilson, executive vice president of fraud protection technology provider Interthinx. (www.inman.com)
Inman News (3/10/06); Janis Mara

Poll Finds Majority of Americans Opposed to Development

Americans are twice as likely to oppose new real estate projects as support them, according to a recent survey by the Saint Consulting Group in Hingham, Mass.

Based on interviews with 1,000 people across the country, the survey found that opposition is likelier to be against quarries, casinos, land-fills and big-box retail than against single-family homes and groceries.

Those polled said they were most likely to be opposed because of concerns over traffic and quality of life issues. They also indicated that they would use the political process to protect their neighborhoods from unwanted development, and virtually all development fell into that category.

“Rather than seeing growth and development as the time-honored stimulus to local and regional economies, the 21st-century issue is about who controls growth and development,” said Patrick Fox, the company’s president.

“Our survey shows that the American public is more sophisticated about planning and zoning than we thought,” he said. “The most staggering number to me is that one in five families has actively opposed a project.”

“The question that developers will need to address in 2006 is: Where are businesses to locate and build the structures for future jobs, if 83% of citizens like their neighborhoods exactly as they are?” he said.

“By inference, competitive opposition to other developers’ projects will be contested in far more sophisticated ways in the future,” Fox said. “If all politics is local, The Saint Index confirms that all land use has become political. It has become an adversarial system being played out. What this means to developers is that traditionally business-oriented political leaders may no longer automatically favor all development projects.

Fox’s company, which specializes in the politics of contested neighborhood projects, started up the index to come up with insights that will benefit companies that want to understand the source of opposition against them and what they can do to get more projects approved.

The survey was conducted last October and November by the Center for Economic and Civic Opinion, University of Massachusetts/Lowell. Surveys for The Saint Index will be conducted annually in the U.S. and the United Kingdom.

Mortgage Rates Rise as Inflation Concerns Grow

With the financial markets somewhat jittery over inflation and a bit concerned about the course of Federal Reserve policy over the balance of the year, mortgage interest rates advanced last week in Freddie Mac's weekly Primary Mortgage Market Survey, leaving the rate on one-year adjustable-rate loans at their highest level since 2001.

“Stronger than expected gains in manufacturing and service industries — coupled with higher labor costs — ignited inflation concerns, which led to the rise in mortgage rates this week,” said Freddie Mac's chief economist, Frank Nothaft.

The rate on a 30-year fixed-rate mortgage averaged 6.37% last week, up from 6.24% the previous week and 5.85% for the same week in 2005. This was their highest level since Sept. 5, 2003, when they were 6.44%.

One-Year Treasury-indexed ARMs averaged 5.45% last week, up from 4.24% just one year earlier. This was their highest level since Sept. 21, 2001, when they averaged 5.58%.

The average for 15-year fixed-rate mortgages rose to 6.0% last week from 5.89% the week before, their highest level since July 5, 2002, when they averaged 6.03%.

And five-year Treasury-indexed hybrid ARMs averaged 6.03%, up from 5.97% during the previous week and 5.22% a year earlier.

“Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates,” said Nothaft.

“Although the signs are mixed, the housing industry is now beginning to shift into slower gear,” Nothaft said, “and higher mortgage rates will only strengthen that change. However, we see no signs of a bursting bubble, but rather a return to a more normal pace of activity.”

Where Are the Top 100 Metropolitan Areas for 2006?

“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis, detailed Excel tables and overviews are available for all metro forecasts.

Plan to attend NAHB's Construction Forecast Conference on April 27 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.

Give your economic perspective on NAHB's economics blog, “Seiders on Housing,” an informal Internet-based forum dealing with economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.

Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses. Then let Seiders know what you think.

Standard Pacific Reports New Home Orders Down 13%

Standard Pacific Corp. reported at the end of last month that its new home orders companywide were down 13% in January and February from the level of a year earlier. The company based in Irvine, Calif. noted that the decline resulted from “a slowing of demand in some of our markets from the unsustainable pace of the past few years.”

Standard Pacific noted that the downward trend started in the fourth quarter of last year and “is particularly evident in markets which have experienced significant price increases and investor-driven demand in recent years, such as California and Florida.

Standard Pacific reported that its cancellation rate for the year-to-date period ending on Feb. 26 was 26%, up from 18% for the year-earlier period.

Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.

Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses. Then let Seiders know what you think.

Eye on the Economy

As expected, growth of U.S. economic output (real GDP) has been revised up for the fourth quarter of 2005 (to 1.6%), and growth for the year as a whole now stands at a solid 3.5% pace. Furthermore, GDP growth for the first quarter of this year appears to be headed for about 5%, a truly robust pace by any standard.

We’re now into the fifth consecutive year of this economic expansion, and a long run of above-trend GDP growth has generated substantial increases in employment since mid-2003, despite unusually strong growth in labor productivity (output per hour) for most of the expansion period.

Thus, the degree of slack in U.S. labor markets has been systematically reduced and the unemployment rate has come down substantially (to 4.7% in January). Growth of hourly labor compensation has been picking up in the process, and labor cost per unit of output has been on the rise as productivity growth has slowed.

Rising unit labor costs create upward pressure on price inflation, and our central bank has made it perfectly clear that containment of “core” inflation (excluding prices of food and energy) is its paramount monetary policy objective.

Core inflation has been well contained so far, but the Fed definitely wants growth of real GDP to recede to trend (or slightly below) before long. We’re assuming that the Fed will pursue that objective by enacting another quarter-point increase in short-term rates at the next Federal Open Market Committee (FOMC) meeting on March 28, and yet another rate hike could occur at the May 10 meeting.

We’re projecting average GDP growth of 3.25% during the second half of this year and in 2007, a slightly below-trend performance that should provoke a slight uptick in the unemployment rate and keep core inflation within the Fed’s apparent comfort zone. A moderate downshift in home sales and housing production and a definite slowdown in house price appreciation are key components of the projected slowdown in economic growth.

Long-term interest rates have been stubbornly low in recent years despite the large increase in short-term interest rates (3.5 percentage points) implemented by the Federal Reserve since mid-2004. Indeed, long-term bond and mortgage rates actually held below their mid-2004 levels through February, and flat (or inverted) yield curves became commonplace around the globe.

The mood in domestic and global bond markets shifted abruptly in the early days of March, and the 10-year Treasury yield moved up by about 20 basis points in short order (to about 4.75%). The catalyst for change came primarily from abroad as various foreign central banks (including the European Central Bank) raised their interest rate targets and the Bank of Japan talked publicly about putting an end to its long-standing quantitative easing process.

These moves raised questions in the investment community about maintenance of huge flows of global capital into U.S. securities markets, and long-term rates in the U.S. shot up immediately.

The recent up shift in long-term rates has simply returned them to mid-2004 levels. The Treasury yield curve now is essentially flat from six months out, and another quarter-point hike by the Fed at the March 28 FOMC meeting should flatten the short end of the curve. We appear to be headed toward a more sustainable yield structure than we’ve seen for several years and further (modest) increases in long-term rates are likely over the balance of the year.

Evidence of a gradual slowdown in housing market activity from the frenetic pace of 2005 continues to accumulate. The January spurt in housing starts clearly was weather-related, and sales were down in January for both new and existing homes. Indeed, sales of new homes, sales of existing single-family homes (based on closings), and “pending” sales of existing homes (based on contracts signed) all were down by about 10% from their monthly highs in 2005.

NAHB’s single-family Housing Market Index held steady in January and February following significant erosion during the second half of 2005, and the index of applications for mortgages to buy homes (Mortgage Bankers Association series) has continued to trail down gradually from the recent high last September (four-week moving average basis).

These forward-looking survey measures suggest that the evolving housing slowdown still has some distance to run, but the pattern still is consistent with the orderly “simmering down” process NAHB has been forecasting for some time.

House price appreciation apparently topped out around mid-2005, but the slowdown has not yet stemmed the systematic erosion of housing affordability that has sapped the strength of housing demand in recent times.

The purchase-only component of the House Price Index produced by the Office of Federal Housing Enterprise Oversight (OFHEO) is the best available measure of house price appreciation. This measure increased at a year-over-year pace of 10.8% in the final quarter of 2005, down from a peak of 11.5% in the second quarter but still one of the highest rates on record.

The median price of existing single-family homes lost a bit of forward momentum as 2005 drew to a close, but this series still recorded a hefty 13.1% year-over-year advance in January.

The accumulation of rapid house price gains over a period of years, along with a gradual increase in mortgage interest rates since mid-2005, have continued to weigh on affordability in the existing-home market. Indeed, the composite Affordability Index by the National Association of Realtors® was down by 13.3% in January (year-over-year), and that decline followed substantial deterioration in 2004 and 2005.

According to the Census Bureau, the inventory of new homes for sale reached a record level in January, and the months’ supply (at the January sales pace) moved above five for the first time in almost a decade. Furthermore, the median length of time that completed new homes were sitting on the market moved up to 4.5 months.

The Census Bureau’s new-home inventory estimates include units that are for sale but not yet started, a feature that takes some sting out of the inventory “overhang.” However, the inventory of units completed or under construction also is at a record level. Furthermore, home sales that are subsequently canceled never get back into the government’s inventory estimates, and it’s clear that cancellations have been on the rise recently.

In February, NAHB surveyed nearly 500 single-family builders about unsold inventories (excluding units not-yet-started and including units handed back to builders through cancellations). More than one-third of the respondents said their inventories were higher than six months earlier, while less than one-fifth said their inventories had come down over that period. The net percentage reporting higher inventories was particularly high in the West and among builders starting more than 25 units per year.

In NAHB’s February survey, 20% of single-family builders said their cancellation rate was higher in January than six months earlier, while only 8% said their cancellation rate was down over that period.

A supplementary NAHB canvass of about 30 large single-family home builders showed that, in January, cancellation rates (cancellations as a percent of sales backlog) were up by about one-third, on average, from historically low levels a year earlier.

That trend, if it continues, accentuates the need for builders to control speculative building during the period ahead and to employ incentives to support sales and limit cancellations.

The housing slowdown obviously is underway, the interest rate structure is moving upward, affordability still is deteriorating and the supply-demand balance has changed quite a bit in the markets for both new and existing homes. Furthermore, evolving adjustments in condo markets appear to be rougher than in single-family markets.

NAHB’s forecast of a soft landing for the housing sector is grounded on a positive forecast for the national economy and the national job market. In this regard, we’re assuming that the Federal Reserve wants to keep the overall economy on a solid growth path while strength shifts from housing to other sectors that finally appear to be coming along nicely — particularly business investment in capital equipment and structures as well the export market.

The kind of sectoral rotation we’re forecasting is tricky business, of course, and housing definitely faces higher risks than earlier in this economic expansion. For one thing, an abnormally large share of national employment growth has been concentrated in housing and housing-related industries, and job losses in these areas may be hard to replace in the other sectors that are expected to take up the slack.

Another nagging concern relates to potential shifts in behavior by those investors/speculators that overheated the single-family and condo markets last year. We’re fully expecting reductions in investor purchases, and we view that as a healthy development.

But we’re definitely in uncharted waters when it comes to investor behavior, and large-scale cancellations along with dumping of units owned back onto the markets would be more trouble than we’re anticipating.

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 March 8 edition. To subcribe to “Eye on the Economy,” click here.

Want to Know Your State and Metro Forecasts for 2006?

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:

Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses. Then let Seiders know what you think.

Builder's Tip: A Jig for Router-Made Moldings

[Click for larger image]

I needed a special molding to complete a baseboard detail but my router table was several hundred miles away on another job. Fortunately, the situation forced me to come up with an alternative method for site-milling trim stock.

I think my new method is faster, more accurate and safer than using a router table — especially if the moldings are narrow and thin.

Cutting the moldings is a simple matter of turning on the router and feeding the stock into the groove. In a few minutes I had hundreds of feet of molding. And because the stock was captured in the groove of the jig under the base of the router, my fingers never got near the cutters.

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.

New Book About Warranties Helps Avoid Costly Mistakes

A new book from NAHB about warranties helps builders and remodelers avoid costly mistakes.

“Warranties for Builders and Remodelers” is a new publication from NAHB that gives home builders, remodelers, trade contractors, suppliers and other industry professionals vital knowledge concerning the basic elements of a warranty so they can avoid costly mistakes.

Written by NAHB’s legal experts and available from BuilderBooks.com, “Warranties for Builders and Remodelers” explains the rights, responsibilities and recommended practices and procedures for developing a warranty program.

The book also includes a state-by-state appendix of pertinent cases affecting liability law.

Warranties can promote brand recognition, serve as a marketing tool, be used as a dispute resolution device and give builders, remodelers and other industry professionals a competitive edge.

However, significant legal implications result from furnishing a warranty, implications that builders and remodelers may not fully understand.

“Warranties for Builders and Remodelers” will help inform and protect builders and remodelers. This book should not replace the expertise of legal counsel.

To order “Warranties for Builders and Remodelers” online, click here, or call BuilderBooks.com at 800-223-2665.

Increase Your Margins by Reducing Your Paper

By Steve Neigh, Hyland Software, Inc.
Document imaging and management — converting paper documents to scanned images and effectively managing them — can increase your margins by reducing the cost of doing business. Electronic document management improves communication and helps ensure that jobs are done right the first time. It’s the electronic solution that helps your business “measure twice and cut once.”

Document management is what sets the scanning of business documents apart from creating a collection of family photos on your home PC.

Instead of simply saving documents to your hard drive or computer network, document management allows you to store and find electronic documents quickly and efficiently. It allows you to assign keywords to documents and search for the information you need based on specific criteria.

For example, you may want to review all of your company’s documents related to a specific vendor or customer. Document management allows you to simply type in the name of that vendor or other search terms and gather a list of relevant documents.

These documents can be cross-referenced, allowing users to move from one related document to another, such as a purchase order and a variance purchase order, simply by double clicking.

Document management also encompasses more than what traditionally is considered a document. E-mail, faxes, Word documents, Excel spreadsheets and reports from transactional systems can all be stored and searched electronically in a single document management system.

By going paperless, these documents are instantly available to everyone who has access to the system, and you control the access. Also, unlike paper files, documents in a document management solution can be backed up to other media including CDs/DVDs or a tape drive.

These technologies can improve processes from accounting to managing change orders, and help track customer interactions from prospect through construction.

Questions about a job can be answered faster — whether they are raised by a supervisor during construction or years later by a home owner.

You also can create strategies to improve processes that have been prone to error, increased expense or potential liability, and then track the actions that were taken. Your electronic trail can be as extensive as you want — from maintaining an electronic audit trail of vendor contracts, insurance verifications and W-9s, to developing a method to avoid unnecessary variance in purchase orders, to ensuring that those who need to know are aware of change orders.

Given the increased warranty periods offered in the industry today, maintaining a virtual job packet is a must. Smart builders who include everything about a home can significantly improve their ability to provide excellent customer service. And they can do so easily through document imaging and management.

Creating virtual job packets will not only increase the probability that your customers will generate good “word-of-mouth” for your business, they could be invaluable in the event of arbitration.

Implementing a document management system need not be expensive or complicated. A well-thought-out solution can be integrated with other business applications with virtually no programming.

It can be deployed incrementally, allowing you to purchase basic functionality and easily add users, increase volume and implement more complex technology as needs and budget dictate.

However, while choosing a solution that can be deployed rapidly and is easy to use will deliver nearly immediate improvements and pay for itself quickly, you also need to calculate the total cost of ownership by investigating the cost of maintenance and enhancements as you add users, document types and functions and provide remote access.

To implement a document imaging and management solution, consult a technology solution provider offering software and hardware products and with the experience to address the business needs of the home building market.

Additional resources are available through the media and industry associations such as AIIM International (www.aiim.org).

Steve Neigh is the vertical lead for construction at Hyland Software, Inc., developer of OnBase® ECM software (www.onbase.com). A member and contributor to NAHB’s Business Management & Information Technology Committee, Neigh has 12 years of experience in imaging/home building. For more information, e-mail Neigh, or call him at 440-788-5898.

NAHB’s Technology Solutions Directory — an easy-to-use directory that enables builders, remodelers, contractors and other industry professionals to find information on software and IT solutions and services for their businesses — is now online. The directory is sponsored by the Business Management & Information Technology Committee.

Software and technology solutions providers interested in being listed can sign up for:

The Technology Solutions Directory is solely for educational and informational purposes. Nothing in the directory should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the listed software, IT service or the software/IT vendor. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained in this directory.

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 association's Web site the place to go for the information and guidance that members need to succeed.

NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format.

Business of Building e/Source is available free to NAHB members and their employees.

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

The NAHB University of Housing Offers Courses and Designation Programs

The NAHB University of Housing offers a variety of business management courses that set builders and remodelers apart from the competition.

For a complete list of current offerings, visit www.nahb.org/education.

Last Call: Presenters Wanted for Custom Builder Symposium

NAHB is seeking presenters for the Custom Builder Symposium, NAHB’s premier event for custom builders.

NAHB seeks presenters who have proven ideas for building more productive relationships with architects and trade partners, improving marketing, smoothing the selections process, taking control of customer service and warranty, new design ideas or any other area of the custom home building process,

Symposium presenters receive a stipend and, more importantly, complimentary registration that allows them to “experience the energy” custom home builders bring to this event.

To read more about presenting at the symposium, or to submit a proposal, click here.

Presenters are wanted for the Custom Builder Symposium at the Lake Las Vegas Resort in Nevada this October. Proposals are due March 17.

NAHB Can Help You Find Technology Solutions — Fast

Type “construction software” in popular online search engines like Google or Yahoo and nearly 213 million results will pop up that you will have to wade through.

Or you could go to NAHB’s new Technology Solutions Directory and get a list and contact information for companies and consultants ready, willing and able to help you now with estimating, scheduling, accounting and other aspects of automating your business.

Following is a partial list of the software and technology categories available in the directory:

The Technology Solutions Directory, which is continuously updated, should be a frequent stop for any home builder seeking to modernize the way they do business. To access the directory, go to www.nahb.org/TSD.

For background, read the Tech Talk series of concise articles at www.nahb.org/TechTalk. Tech Talk is written by builders and consultants, and includes such articles as:

EstimatorPRO™, available through BuilderBooks.com, helps you complete complex home building and remodeling estimates quickly and accurately. Its simple point-and-click design eliminates “guesstimates,” paperwork and common math errors.

Designed specifically for home builders and remodelers, EstimatorPRO™ enables you to create estimating operations that are powerful and reliable enough for your most important management decisions.

Universal Design Is Now Easier Than Ever


	Rosemarie Rossetti Universal Design Living Laboratory

Rosemarie Rossetti, Ph.D, of the Universal Design Living Laboratory in Columbus, Ohio, is a frequent speaker at the International Builders’ Show, the 50+ Housing Symposium and other NAHB events. Paralyzed from an accident in 1998, she offers a crucial perspective on the need for universal design.

Rossetti will be at a breakout session at the upcoming Building for Boomers & Beyond: 50+ Housing Symposium 2006 in Phoenix next month. Below, she answers several questions about universal design and gives a taste of what she will discuss at the symposium.

Earlier this year, I spent four days on the show floor at the International Builders’ Show (IBS) talking to different people about how I’m building the national model of the universal design home. Overwhelmingly, the salespeople, PR reps and marketing people I spoke to were not familiar with universal design. However, once I explained it, they understood — and immediately connected it with the baby boomer market.

Designers may be more aware of the term and intent of universal design, but the sales teams, etc. are not. So maybe it’s just a matter of filtering the ideas to all the folks involved in home building.

In January of 2005, I met with Iron-A-Way, a company that sells wall-mounted ironing systems. I asked if they had one that a seated person could use. They didn’t, but within a few months, they designed a new product and sent us a prototype. This year they had the UL-approved model in their catalog. And they had it on display at IBS, right in the front of their booth.

I’m hoping I can have a similar influence on other manufacturers. For instance, there aren’t many ovens with side-hinge doors or microwaves that can be installed under the counter.

Range hoods are also a problem — seated people can’t reach the controls. So there needs to be a way to operate them remotely.

At the IBS, I tried to use one company’s gas grill and couldn’t even budge the steel hood, it was so heavy. I was disappointed, because I loved the look of it. But I couldn’t use it.

However, I did manage to find some products that I could use and that were helpful. Kohler has done some neat things — like its pro cook sink, a little round sink that turns into a heating unit so you can cook and drain your pasta right in the sink. You never have to lift and drain. What a great safety feature.

Gaggenau has an in-counter steamer that you can add to its modular cook top. It’s self-draining so you never have to worry about hot water spilling on you.

More manufacturers seem to be putting universal design products at the forefront. They are better designed and a lot more attractive than they used to be. How much is this helping the cause?

Consumers don’t want their home to look like a nursing home or like it’s a home for an “old person” because they don’t see themselves as old. So when companies like Great Grabs or Moen take the institutional design out of the equation, consumers and designers warm to these products.

But many appliance manufacturers are still falling woefully short. I could only find two manufacturers that make ovens with side-hinged doors. Why do oven doors always have to open from top to bottom? What are the design standards?

A door opening from the side has a distinct advantage for people. From a seated position, it’s a critical safety element. What’s wrong with the rest of those companies?

I applaud companies that are putting appliances like washers and dryers on pedestals, but I need to caution them on how high the pedestals should be. For shorter or seated people, it makes a huge difference.

Let’s talk about lighting. Why is lighting such a crucial part of universal design?

Lighting is crucial for safety, comfort and space utilization. As we age, we lose a great deal of our sight, so we need lighting that will allow us to do things like cut our food, dial the phone or read the newspaper.

And safety lighting that leads to the bathroom helps orient guests and residents alike.

For my own home, our builder originally was going to give me a lighting package that would not have met my needs. So graduate students under the direction of researcher Patricia Rizzo at the Rensselaer Institute Lighting Research Center in Troy, N.Y. are redesigning my home’s lighting.

They are working to blend lighting technology with what they know about aging-in-place. I met with the students to talk with them about universal design, and during our discussions they asked me to roll into their kitchen, which is part of their break room.

They wanted to see how the lighting under the cabinets affected my eyes. They were worried about glare, since the lights were right at my eye level.

Glare can be a factor for shorter people or people in a wheelchair. Bulb intensity and the fixture types are very important considerations.

I also pointed out to them that surfaces reflect light, and that can hurt your eyes. Silestone has a matte finish countertop called “Leather.” It doesn’t create glare like high-gloss surfaces; it provides a solution.

What are some small things a builder can start doing now to incorporate universal design?

There are quite a few easy things that builders can do — like using lever handles instead of doorknobs, installing thermostats with larger displays and putting the thermostat lower so seated people can see it. There’s not much additional cost in those changes.

Also, positioning light switches lower and plugs higher doesn’t increase costs. Adding 36-inch doors doesn’t cost much more either.

Builders can look at designing kitchens with multiple countertop heights so more people can utilize the kitchen more comfortably.

In the bathroom, try roll-in showers. That little lip at the entrance to a traditional shower prevents people who use wheelchairs, walkers or crutches from getting in.

Builders should also be thinking about making bathrooms a little larger so that people can move around in them, and they should be locating a bathroom on the first floor.

Another feature builders should consider is building one entrance to the house where there is no step and having a gradual grade on the garage floor so people can get in without a step. This way, the house is not only designed for the occupants, but it can be visited by anyone.

Putting in grab bars, putting in another piece of plywood to secure them, how much more is that? If you look at some statistics, the additional cost of some universal design modifications is close to zero, and probably no more than 4% of the house cost, depending upon what has to be retrofitted.

Another misconception about universal design is that these houses have to have more square footage. Effective universal design can be achieved in a 900 square-foot house.

Universal design isn’t about increasing square footage, it’s about taking a different approach to the square footage. To make the kitchen and bath more functional, you can take just a little space out of the living and sleeping areas. Readjust some of the hallways and foyers to make more of an open floor plan.

Under your definition of universal design, there's no need for adaptation or specialized design. This seems to be the key thing builders and designers, and even consumers, need to know — that it doesn’t take a lot of extra work to incorporate universal design.

It’s all about awareness and education. What’s going to drive the building industry toward universal design is the clamor from consumers and the change in demographics.

Right now, there are 56 million people with disabilities. The boomer market is in need of universal design, and they’re just starting to become aware of it and beginning to ask builders and architects to help them age in place.

Another misconception about a universal design house is that is has to be ranch style, one level. That’s not true. Elevators, staircase lifts and floor lifts enable multi-level living. You can build a closet that is large enough to accommodate an elevator shaft so that it can be added later.

The consumer needs to start thinking about the utility and value of universal design, as well.

My current house places physical limitations upon me, and that's frustrating. My husband and I built it 10 years ago thinking that this would be the home we grew old in. After the accident, we thought about making the doors a little wider and using levers instead of doorknobs.

Then reality hit. The doors weren’t wide enough. The bathroom was not big enough. Using the bath and shower was difficult, and the toilet seat was too low.

We had to modify those things, and now everything looks retrofitted. It doesn’t look good.

That’s my house now. We didn’t know anything about universal design 10 years ago. Now I think it’s finally coming into view in magazines and television programming. Now we have to get the builders involved.

The seniors housing symposium is the premier educational and networking event for industry professionals who serve the burgeoning 50+ market.

Capitalize on the niches, needs and opportunities of this rapidly growing market by learning their preferences. To view or purchase this publication online, click here, or call 800-223-2665.

Demolitions Worsen Rental Affordability Squeeze

The demolition of about 200,000 rental housing units each year is contributing to increasing affordability problems in the middle and lower segments of the rental market, according to research from Harvard’s Joint Center for Housing Studies.

While the Low-Income Housing Tax Credit program and other initiatives are helping to finance more than 100,000 new units of affordable housing annually, significantly more low-rent units are disappearing, according to “America’s Rental Housing: Homes for a Diverse Nation,” which was released on March 8.

“We are taking one step forward and two steps back as gentrification in some neighborhoods and continued deterioration in others lead to the removal of vitally needed lower-cost rental housing,” said Nicolas Retsinas, director of the Joint Center.

Median asking rent rose from $734 in 1994 to $974 in 2004, according to the report. But during that same period, monthly renter income barely grew, rising from $2,272 to $2,348.

Of the nation’s 7 million lowest-income renters, 70% pay more than half of their income for housing, according to the Joint Center.

“Many of the nation’s working poor live in older small multifamily and single-family rentals,” Retsinas said. “But difficulty accessing the resources needed to maintain this much-needed housing too often sets off a cycle of disinvestment and demolition. Even after a period of strong new production of market rate rentals, the available supply of housing that is affordable to the majority of the nation’s low- and moderate-income families continues to shrink.”

Rising land prices and density restrictions in many jurisdictions have substantially raised the long-run supply cost of building new rental housing, the study found, and overall rents now stand at record levels despite recent weakness in market rents for better quality apartments.

The report cites findings from the National Low Income Housing Coalition showing that workers in the vast majority of metro and non-metro area counties must earn two or three times the minimum wage, or live in households with multiple wage earners, to afford to rent a modest two-bedroom apartment.

“Preserving affordable rental housing is sensible public policy,” said Jonathan Fanton, president of the John D. and Catherine T. MacArthur Foundation, the report’s sponsor. “On average across the country, it costs half as much to acquire and improve an existing rental apartment as it does to build a new one.”

The study also reports that despite a growing number of home owners, there are also many households who have the income to purchase a home but who choose to rent instead because it is a lower-cost way to maintain a flexible urban lifestyle. Twenty percent of renters have median annual incomes above $60,000.

“Favorable demographics, including the maturing echo baby boom, along with higher interest rates, should ensure that the market-rate rental market expands in the decade ahead,” said William Apgar, senior scholar at the Joint Center.

Attend the Multifamily Pillars of the Industry Conference, the premier industry event for the multifamily industry, on April 2-4 in Scottsdale, Ariz.

The conference focuses on best practices and real-life lessons presented in case studies on the finance, design and development of rental apartments and condominiums.

Consumers Can Use NAHB Web Site to Find Remodelers

Both directors can be found through the Resources section of the Web site, or through its search engine.

The directories are a benefit to remodelers who are members of the Remodelors™ Council or to members who have earned a designation. Each directory lists the remodeler’s company name and includes contact information.

Remodelers can update their contact information, if needed, in both directories.

To update the Directory of Professional Remodelers information, contact your local association. Contact information for this directory is provided by the local home builders associations.

To update the Builder and Remodeler Designation Directory information, e-mail Gevenia Blair at NAHB, or call her at at 800-368-5242 x8155.

Make Sure Your Ads Speak Clearly

Before you create and publish that next newspaper, radio, TV, Yellow Pages, magazine, homes guide, billboard or Internet ad, you need to ask yourself an important question.

Regardless of how big the ad is, what it depicts, what its general theme or message is, the emotions it’s designed to generate, who it will appeal to, what photography and agency help will be used to produce it, and what it will cost to create and run it — stop and ask yourself this key question: “Why am I running this ad?”

What do you want to accomplish? What is the central message and intent of your ad?

If you can’t look at your ad and immediately and succinctly express what the central message is — not just what you intended it to be — how do you expect your consumers to understand what you are saying?

Unless you are conveying a specific message in your ad — through headlines, slogans, photos or copy — and your reader can understand this message quickly and easily, your ad will not be effective.

Forget about designing for style and beauty. Go for impact. Don’t sacrifice effect for affect.

If your ad ultimately wins an award for design or attractiveness, great. But don’t let that overshadow your main reason for creating and running your ad. You are spending advertising dollars to attract customers who will buy what you offer and not just show up to look — although that is the first step.

If you have more than one message, you can run more than one ad. However, rather than running a series of ads with various themes or messages, it is better to have your consumer identify with a specific message — at least in the short term (a month for instance).

You might have a limited-time opportunity for your customers to save money or make certain selections. Perhaps you have the premier location in your area. Or you might have award-winning floor plans or offer the most living area for the lowest price of anyone you compete against.

Maybe you are offering the best security program or have a complete range of family activities, your amenities may be the envy of other communities, your company may be a household name or you might have the best financing plans.

You might be the best choice for first-time buyers or the choice of the mature buyer. You might offer features not normally available in your price range, or you might allow for considerable customization in home design.

Decide which one of the many important selling points you want to use in your ad to attract customers — and then say it very clearly and distinctly. If you want to change your emphasis in your next ad, fine.

And don’t be afraid of white space. You don’t have to fill every inch of your ad with copy, clip art, photos, logos or borders.

Go easy on the bold and other techniques to emphasize what you are saying. Too much bold or italics, mixed typefaces, ornate fonts, reverse print, banners and too many colors can clutter or obscure your message rather than clarify it. Such graphic techniques initially may get people to notice your ad, but unless there is a message there for them to grasp, you will have lost their attention.

When you’ve finished designing or composing your ad, try taking various parts of your ad away, one at a time, to see what impact the omission has on your overall message. If removing it affects your central message, then it needs to part of the ad. However, if the ad and your message read perfectly well without it, perhaps it is not necessary and can be eliminated.

Let your ad bring your customers to you. Save the story-telling and the presentation until they arrive.

Steve Hoffacker, MIRM, is principal of Hoffacker Associates, a West Palm Beach, Fla. real estate sales and marketing consultancy that has been focusing on strategies and solutions for builders and salespeople for more than 25 years. For more information, e-mail Hoffacker, visit the Hoffacker Associates Web site, or call him at 561-685-5555.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas Magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

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

“Building Better Ads,” available through BuilderBooks.com, explains the ins and outs of advertising, including how to write and design effective ads.

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 educational 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.

At the NAHB/BALA Design Institute for Builders, you'll learn the latest in residential housing design trends from the industry's top professionals, tour beautiful award-winning homes and communities that display the best in cutting-edge architectural design, and learn how to profitably apply these design ideas to the homes you build.

The Design Institute will be held June 5-7 at the Westin Charlotte, Charlotte, N.C.

To register and for detailed information, visit www.nahb.org/designinstitute.

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.

Federal Buildings Moving to Sustainability

In a memorandum of understanding promoting green principles for buildings owned or operated by the federal government, officials this winter avoided backing any one system, leaving the door open for the many green programs now available for both the commercial and residential sectors.

The memorandum was “a positive signal,” said Vicki Worden, who oversees commercial programs for the Green Building Initiative and has worked to introduce architects, builders and engineers to Green Globes, a system that has enjoyed success in Canada and is now gaining popularity in the United States.

The Green Building Initiative has also worked in partnership with NAHB to help state and local home builders associations start voluntary green building programs for their members. With GBI assistance, more than 30 local associations are expected to have incorporated NAHB’s Model Green Home Building Guidelines into their own programs by the end of this year.

In January, the White House Summit on Federal Sustainable Buildings committed 17 federal agencies and the Executive Office of the President to follow green guidelines in design, energy performance, water conservation, indoor air quality and sustainable materials to ensure that new federal buildings are among the most energy-efficient in the country.

The agreement adopted during the symposium also specified that building components should exceed the energy code, and that the effectiveness of a building’s actual energy performance should be verified during its first year of operation by the Environmental Protection Agency’s Energy Star performance rating system for buildings.

The memorandum “goes a step beyond LEED” rating systems introduced by the U.S. Green Building Council, Worden said. “More needs to be done. This [memorandum] signals that the federal government is looking for ways to meet criteria, and the fact that they did not cite a specific rating system for building demonstrates the important effect that their decisions have on a huge market. Leaving it open, not just citing LEED, means there is space for other ratings systems to come in,” she said.

The federal government owns approximately 445,000 buildings with a total floor space of more than 3 billion square feet, in addition to leasing 57,000 buildings comprising 374 million square feet of floor space.

Over 10 years, reducing energy consumption in federal buildings by 10% would cut their greenhouse gas emissions by the equivalent of the exhaust from more than 625,000 cars and save tax payers $420 million dollars, according to the Association for Facilities Engineering.

For more information on NAHB’s green building resources, e-mail Calli Schmidt, or call her at 800-268-5242 x8132.

Enter ‘Building With Trees’ Competition

Conservation-minded builders and developers from around the country are invited to enter the 2006 Building With Trees Awards of Excellence recognition program.

Sponsored by The National Arbor Day Foundation in cooperation with NAHB, the program recognizes builders and developers who save trees during construction and land development.

The deadline for entries is March 31. The awards competition was created in 1998.

Residential, commercial, retail, industrial, public and mixed-use projects of all sizes are eligible to compete.

A jury of development industry and urban forestry professionals will judge the entries. Judging criteria include:

A Positive Approach Keeps Skilled Workers on the Crew

In a market where keeping crews of skilled construction workers can be a challenge, the National Housing Quality (NHQ) Program, which was developed to provide builders and trade contractors with business solutions and systematic approaches to quality control, is recommending a few basic methods to meet the challenge.

Labor availability was ranked sixth in the latest survey of NAHB members on the critical issues faced by the industry.

Companies that are focused on quality and striving to establish consistency in the home building process are finding that retaining loyalty among work crews has become almost an art form, according to Quality Matters, the program’s e-newsletter.

Among Quality Matters’ recommendations for solving the labor retention problem:

“Builders must provide the proper incentives to secure the best efforts of their trade partners, and continue to meet customer demand,” Quality Matters says. “Regardless of the state of the labor market, home buyers will always demand quality workmanship in their home. It’s a tough job, but well-run companies across the country are applying these approaches and others, and continuing to satisfy their customers.

“Keeping good workers on board takes more than just money,” according to the publication. “Respect, opportunities for growth and a sense of community within the company are a good start.”

For more information on how applied quality assurance techniques can improve your business, click here.

Tracking Performance Helps Achieve Business Goals

Establishing performance measures can be a powerful catalyst for achieving business goals and help pinpoint areas of inefficiency, according to Quality Matters, the e-newsletter of the National Housing Quality Program, but well under 50% of trade contracting companies in business today have implemented them.

The newsletter says that companies should identify a manageable number of performance measures, usually at least two and no more than five, and set annual goals for each. When setting the goals, it is important to give some thought to identifying trade-specific performance measures that will be effective for your company.

Sources that can be used to provide raw data illustrating the progress that is being made on the chosen performance measures can include monthly inspection reports, satisfaction surveys and letters to builders, Quality Matters advises, and monthly or quarterly tracking can be used to devise a strategy to improve performance.

“It’s equally important to have the proper means in place to effectively track these statistics,” says Quality Matters. “Companies with sophisticated data bases can input data from inspection forms and track all data, while smaller companies without such data bases may need to sample data by reviewing 10%-20% of data manually. Sample data should be representative of all of the work that a company does to ensure statistics that are 90% accurate or better.”

“Overall, performance measurement helps to ensure that a company’s efforts are focused on improving in the most important areas and keeps the company on target to meet or exceed the expectations of builder customers and consumers. By establishing a standard that can be measured, it also leads to greater accountability at all levels as well as increased awareness of company successes and setbacks,” according to Quality Matters.

For more information on tracking performance statistics and improving quality management systems, click here; or e-mail Jeff Taggart, NHQ Certified Trade Contractor program manager.

“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.

First Supplier Receives NHQ Certification

Founded in 1954, American TV and Appliance has a reputation for exceptional customer service and has won numerous awards as an outstanding retailer of consumer electronics, furniture and appliances.

To earn certification under the recently established program for suppliers, the company was required to develop, document, implement and maintain a quality management system that enables it to consistently meet code and regulatory requirements, builder specifications and home owner expectations.

The goal of the new NHQ Certified Supplier program is to make a significant contribution to the improved efficiency and customer service of participating companies.

For more information on the National Housing Quality Certified Supplier program, click here, or send an e-mail.

‘Tech Set’ Helps Build Storm-Resistant Roofs

The latest Tech Set from the Partnership for Advancing Technology in Housing (PATH) shows builders in areas prone to hurricanes how to build storm-resistant roofs that protect against structural failure and water infiltration.

PATH notes that a strong, durable roof is a home’s first line of protection against a major storm, and that most storm-related damage is not caused by outright structural failure, but by water infiltration, which can lead to mold.

Most of the recommendations for building roofs that can stand up to high winds add minimal additional costs, and many can be beneficial in areas outside of the hurricane belt, according to PATH.

Consumers Play Most Critical Role in Housing Innovation

That consensus was reached during the symposium by an invitation-only group of leaders from industry, academia, government and private research organizations. Because of the range of innovative products moving into the marketplace, it was also suggested that critical end-users — including home owners, remodelers and builders — should be able to access a clearinghouse of information like McGraw-Hill Construction’s Sweets Network for products.

“If we’re going to move new products and innovation into practice, we need to understand better the characteristics and incentives that are important to the consumers,” said Harvey Bernstein, vice president of Industry Analytics and Alliances for McGraw-Hill Construction. “What makes them receptive to new products? And from there, how do they get information? If we can make consumers aware of options and get them to demand innovation, we can transform our industry.”

The symposium is part of a larger effort between PATH and McGraw-Hill Construction to explore further what users think about technology and who is most influential in bringing innovation to the nation’s housing.

Walnut Place an Answer to High Home Costs in California

Recognizing ingenuity in the development, construction and marketing of affordable workforce housing, NAHB honored five communities with its Innovation in Workforce Housing Awards at the International Builders’ Show in Orlando, Fla. in January. In an effort to bring attention to outstanding examples of workforce housing, Nation’s Building News is showcasing the winners of the award in a series of articles. The second development in the series is Walnut Place in Greenfield, Calif.

Developed by CHISPA, (Community Housing Systems and Planning Association), the first two-time winner of the award, affordably priced Walnut Place was built in Monterey County, Calif., where a median-priced home of $680,000 is well out of reach for a growing number of families.

“It’s getting more challenging every year to provide housing that is affordable to low- and moderate-income families,” said David Cooke, CHISPA’s director of real estate development. “This area has a huge pent-up demand and a real lack of [housing] inventory.”

“Recognition from organizations like NAHB helps us demonstrate to our own community the value of the work we do,” Cooke added.

Home buyers in Walnut Place have included teachers, police officers, city employees and households struggling to meet the needs of disabled adults. Because they were in such high demand, the homes were sold through a lottery.

“The city recognizes there is a housing shortage. The country recognizes it. But there is a big contingent of NIMBY resistance,” Cooke said. “We try to educate the public, so people understand that their kids and their kids’ kids will need a place to live.”

Walnut Place is a community of 37 homes on a 10-acre site. Twelve of the homes were constructed using CHISPA’s moderate-income housing program, which provides homeownership opportunities for first-time home buyers whose household earnings don’t exceed 120% of the county’s median family income. Sales prices of the homes ranged from $235,000 to $255,000.

The remaining 25 units were constructed using the U.S. Department of Agriculture’s Rural Development Mutual Self-Help Housing, a program in which families contribute a substantial amount of labor to build the homes in the new community so that they can purchase a home at a lower cost. To be eligible to participate, households were required to be first-time buyers earning no more than 80% of the median family income in the county.

Participants in the program have included employees of several of the area’s largest agricultural growers and packaging companies and high-profile companies such as BUD of California, Scheid Vineyards and the Pebble Beach Golf Club and Resorts.

One of the homes was constructed by local students participating in the City of Greenfield's YouthBuild Program, which helps students obtain much-needed job skills.

Various California housing and community development programs were also involved in making Walnut Place a reality.

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

Bobby Lunceford presents a 2005 Innovation in Workforce Housing Award to David Cooke of CHISPA.

Russian Delegation Visits NAHB to Talk Housing

Alexander Belyankov, head of the Russian delegation, and NAHB CEO Jerry Howard

Key officials representing Russia’s forestry and building industries met with NAHB staff recently to learn more about NAHB and explore how the association and its members might be able to assist Russia in its goal of building 50,000 new homes during the next five years. The delegation visited NAHB on March 2.

The delegation, which included high ranking public officials as well as private sector businessmen, learned about panelized construction, log homes and other aspects of building systems from Jeremy Bertrand, of NAHB’s Building Systems Councils.

Jenna Hamilton, of NAHB’s Legislative Affairs, led a discussion about the contributions NAHB and its members make to helping shape housing policy at all levels of government.

The Russian delegation was encouraged to maintain the newly-established links made with NAHB and America’s housing industry.

Jerry Howard, NAHB CEO and executive vice president, also encouraged them to join NAHB International, which links housing associations and related organizations around the world. NAHB International works to expand trade opportunities for both our U.S. and international members and to provide networking, educational and business opportunities.

The Russian officials visited NAHB as part of the association's Visiting Delegation Program.

Initiative Aimed at Attracting Young Hispanic Workers

Team Builders, the first project of its kind, will introduce 25 college students to careers in residential construction management this summer through internships at Beazer Homes offices across the country.

“Team Builders is a laudable initiative spearheaded by HBI to introduce a new generation of Hispanic college students to an industry they might not otherwise consider,” said Michael Sivage, HBI’s chairman of the board of trustees and a builder/developer in Albuquerque, N.M. “I hope Beazer Homes’ sponsorship is the first of many by NAHB members. I can’t think of a better industry for our nation’s top students to consider, and believe that many will agree with me by the end of the summer.”

Although Hispanic students have not historically been the focus of home builders’ recruitment efforts, the growing number of Latinos making up the industry’s workforce and its customer base spurred HBI to establish Team Builders.

The nation’s largest minority, Hispanics make up more than 14% of the U.S. population and 10% of the construction-related workforce. Moreover, with Latinos expected to be responsible for more than two-thirds of overall workforce growth in the next 15 years but less than 1% of the growth in management positions, Beazer Homes recognized the opportunity and was the first to answer HBI’s call to action.

“Recruiting talented employees is an important component of Beazer Homes’ growth strategy within an industry such as home building, which exhibits robust long-term fundamentals and future prospects,” said Ian McCarthy, the company’s president. “As such, the opportunity to partner with HBI on the Team Builders program was timely and we are very pleased to be first to pilot this endeavor among the top 10 national home builders. This program will help us connect with a previously untapped workforce and give young Hispanic people the opportunity to experience the home building industry at a critical decision-making time in their lives. We hope their internships will be personally rewarding and enlightening.”

The Team Builders program will feature an industry-tailored orientation to educate and galvanize the students, as well as a newsletter to keep them informed about the industry during and after their 10-week experience this summer, which will end with a mentoring component.

In addition, Team Builders will track students’ careers to ensure sustainability, as well as conduct informal surveys with the students and Beazer managers to help gauge the success of the program. HBI plans to expand the minority recruitment program with the participation of other NAHB members.

Nation's Building News Online: March 13, 2006

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Housing Makes a Big Contribution to State Economies

Housing’s Critical Role Is Focus of NAHB Ad Campaign

‘Slow Growth’ Has Come at a Cost in Santa Barbara

A Battle for the High Ground

Town Sets Sights on Quaint Alternative to ‘FEMAvilles’

Company Finds Green in Clay

Nationwide Rents Rise, Vacancies Dwindle

Industry Watchdogs Warn of Credit-Booster Sites

Poll Finds Majority of Americans Opposed to Development

Mortgage Rates Rise as Inflation Concerns Grow

Standard Pacific Reports New Home Orders Down 13%

Eye on the Economy

Builder's Tip: A Jig for Router-Made Moldings

New Book About Warranties Helps Avoid Costly Mistakes

Increase Your Margins by Reducing Your Paper

Last Call: Presenters Wanted for Custom Builder Symposium

NAHB Can Help You Find Technology Solutions — Fast

Universal Design Is Now Easier Than Ever

Demolitions Worsen Rental Affordability Squeeze

Consumers Can Use NAHB Web Site to Find Remodelers

Make Sure Your Ads Speak Clearly

Education Calendar

Federal Buildings Moving to Sustainability

Enter ‘Building With Trees’ Competition

A Positive Approach Keeps Skilled Workers on the Crew

Tracking Performance Helps Achieve Business Goals

First Supplier Receives NHQ Certification

‘Tech Set’ Helps Build Storm-Resistant Roofs

Consumers Play Most Critical Role in Housing Innovation

Walnut Place an Answer to High Home Costs in California

Russian Delegation Visits NAHB to Talk Housing

Initiative Aimed at Attracting Young Hispanic Workers

Women’s Shelter First Completed Rebuilding Project