Nation's Building News Online: June 19, 2006Print All Articles Text Version |
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Supreme Court Rules Against Excessive RegulationIn a step forward for affordable housing and the battle against excessive regulation, the U.S. Supreme Court on Monday remanded to the lower courts a decision on whether wetlands connected to actual navigable waters by ditches or drains can be regulated under the Clean Water Act. In a plurality decision, the court reversed and remanded Rapanos v. United States, No. 04-1034, and Carabell v. U.S. Army Corps of Engineers, No. 04-1384, back to the 6th U.S. Circuit Court of Appeals, holding that the U.S. Army Corps of Engineers' broad interpretation of "waters of the United States" was not based on a permissible construction of the statute. "To ensure that the quality of our nation's waters is protected, the federal government must oversee the activities that take place in navigable rivers and streams," said NAHB President David Pressly. "But Congress did not authorize the agencies to control activities in every remote creek, brook or drainage ditch, especially if those features do not support commerce. The court today correctly recognized that there must be limits to how far the federal government can reach upstream." NAHB filed a brief of amicus curiae on behalf of the petitioners in the two wetlands cases in December of 2005, prompted by member pleas to help fight the expensive, time consuming and often duplicative regulatory morass they must slog through to get the appropriate permits to build homes. The regulatory morass resulted in higher prices for home buyers and have never been the laudable goal of the Clean Water Act, Pressly noted. “When Congress first passed the Clean Water Act in 1972, the Cuyahoga River was on fire. Our nation’s waterways were coated with oil and became flammable, and Congress passed the act with those dire circumstances in mind,” Pressly said. "The cases addressed today go far beyond the intent. “Wetlands are an important part of our natural heritage," added Pressly. "The Florida Everglades and Chesapeake Bay marshlands are just a few of the aquatic resources that must be preserved for future generations. But not every swamp, puddle or roadside ditch rises to that level. We should focus our resources and budget to conserve those wetlands that truly warrant protection.” Floor Plans: Luxury Townhomes, Affordable Rentals Rub ElbowsDeveloper:
Chatham Square in affluent Old Town Alexandria, Va., a close-in suburb of Washington, D.C., is an innovative mixed-income community that architecturally integrates high-end, market rate townhouses with low-income rental units within one, cohesive neighborhood. Developed under the Hope VI program, Chatham Square is an urban infill redevelopment that replaced 100 distressed 1940s-era public housing units on two city blocks with a higher density community that includes 100 high-quality townhouses priced from $850,000 to $1.8 million side-by-side with 52 low-income rental units. The community also retains 25% of the site as open space. Integrating Fee Simple Townhouses With Apartments
All are built over a shared underground parking garage which spanned multiple lot lines. The luxury three-bedroom townhouses have four finished levels, many with lofts, and a two-car garage. Many will also include a roof terrace.
The rental units were designed as a “two-over-one” product ― providing ground floor, handicap-accessible flats with private entries, and two-story, townhouse-style apartments above. All the homes were situated close to the street with garages accessed via rear alleys, creating a pedestrian-friendly environment. Chatham Square is also within walking distance to public transportation, shopping, restaurants and public parks along the Potomac River.
More Than Housing In addition to providing housing, Chatham Square also offers job training to the low-income housing residents living in the community. Jobs were also made available to residents during construction. The community’s homeowners association is responsible for the maintenance and upkeep of all common areas as well as enforcing the rules and regulations governing the use and occupancy of all homes in the community. Chatham Square was created though a public/private partnership that, in addition to EYA, the master developer, also included the City of Alexandria, the Alexandria Redevelopment and Housing Authority and Fannie Mae. Chatham Square won two prestigious Pillars of the Industry awards from NAHB's Multifamily Council — the Best Urban Site Plan award; and the Best For Sale Community, 15-40 units per acre.
‘Building Community’ Available at BuilderBooks.com “Building Community: Live, Gather, Play,” available through BuilderBooks.com, shows you how to design a community that is sensitive to the environment, respects the neighbors, is financially successful and has the elements necessary to last generations. “Building Community” is an indispensable core text for the study of community planning, residential and commercial architecture and landscape architecture. To view or purchase this publication online, click here, or call 800-223-2665. Harvard Predicts Continuing House Price AppreciationRising interest rates and cooling demand from speculators are bringing the nation’s housing boom to an end, but there are scant signs of any bust on the horizon, according to this year’s “State of the Nation’s Housing” report from the Joint Center for Housing Studies of Harvard University. And on the heels of a five-year stretch of unprecedented home price appreciation, the report finds, prices are likely to continue going up, just not at a torrid pace, which will continue to draw healthy numbers of new home buyers to the marketplace. Looking at another potential trouble spot — the growing popularity of exotic new mortgage instruments designed to enable buyers to squeeze into increasingly expensive housing with lower monthly payments — the report finds that when the payments on these loans do rise, the majority of borrowers won’t find themselves in dire financial straits. While all bets are off if the economy should suddenly stall out and start losing jobs or if heavy overbuilding occurred, neither of these preconditions for a housing bust is in evidence, according to the Joint Center, and the industry slowdown now in play appears headed for a soft landing. Cooling Investor Demand “The greatest threat to housing markets is a precipitous drop in house prices,” the report says. “Fortunately, sharp declines of 5% or more seldom occur in the absence of severe overbuilding, dramatic employment losses or a combination of the two.” Rising mortgage interest rates are responsible for much of the blame for the current slowdown in sales. From January of 2005 to January of this year, there was a 1.56 percentage-point increase in adjustable mortgage rates and a 0.44% increase in fixed mortgage rates, which has helped push up inventories of both new and existing homes for sale. Even so, as of this March, the supply had yet to reach the six-month level that defines a buyer’s market, although there was a 6.9-month supply of condominiums. A rise in the number of homes for sale and the amount of time it takes to sell them should cool investor demand, the study says, with repercussions for the disposition of the homes they recently bought. The investment share of home loans climbed into the 9%-10% range in 2004 and 2005, compared to 6%-7% for the 1999-2003 period. In most of the top 50 metro markets for investors and second home buyers, the investor share more than doubled between 2000 and 2005, according to the report. Among the markets with the highest share of investors are several metros in Florida and California, as well as Boise, Idaho; Phoenix; and Las Vegas. If the departure of investors from the housing market does materialize — a process that already appears to be starting — “it will be at least a year before it is clear how quickly these investment properties can be sold to owners who intend to use them as primary or second homes,” the Joint Center says. “In the hottest markets, the overhang of investor properties may be absorbed rapidly if housing production continues to fall. The recent sharp increase in vacant single-family homes for rent suggests, however, that this process will not be smooth.” Milder Price Corrections Than in the Past There is also likely to be a bit of a wait for nominal price declines to materialize: “When and if house prices do fall, the so-called bubble is more likely to deflate slowly rather than burst suddenly. History suggests that appreciation eases for a year or two before prices come down in nominal terms. While dips of a few percentage points are common, nominal house prices rarely drop by 10% or more.” Declines of 5% or more in nominal house prices have occurred at least once over the past 30 years in roughly half of the nation’s largest 75 metro areas, almost always because of significant job losses or overbuilding. “In terms of magnitude, price declines associated with episodes of major job losses alone average 4.5%, while those occurring in and around periods of overbuilding alone average 8.3%.” The Harvard study points out that the amount and duration of joblessness were less in the 2001 downturn than in previous recessions, and that building activity since has been much less intense than in periods prior to drops in housing prices. “In metros experiencing major house price declines in the past, three-year average development levels exceed the 20-year median by about 74%,” the study says. “In 2001-2004, development in these same metros was only 10% above normal. These signs of moderation provide good reason to believe that the next house price correction will be milder than in the past.” Mortgage Innovations The study notes that even with the national homeownership rate nudging down a tenth of a percent last year, it increased in the West and Northeast, where home price appreciation has been the strongest. About 1 million home owners were added in 2005, and for many of them, mortgage innovations such as low-downpayment, hybrid-adjustable and interest-only loans helped blunt the impact of higher home prices and interest rates. Interest-only loans went from obscurity two years ago to an estimated 20% of the dollar volume of all loans and 37% of all adjustable-rate loans originated in 2005, according to Harvard. Payment option loans — which let borrowers make minimum payments that are lower than the interest due on the loan and roll the balance into the amount owned — accounted for nearly 10% of last year’s loan originations. About 3 million borrowers have interest-only adjustables and 1 million have payment-option first mortgages. While monthly payments can be driven up sharply at the end of the agreed-upon period, “most interest-only loans extend for at least five years, leaving ample time to move, refinance or incomes to grow before principal payments start coming due,” said Nicolas P. Retsinas, director of the Joint Center. Home owners who find themselves unable to make their mortgage payments also have more than a small measure of protection in the equity they have accumulated. In 2004, before the latest price surge last year, only 3% of home owners had equity of less than 5% and 87% had a cushion of at least 20%, the study said. Stretching to Buy Homes Deteriorating affordability represents the downside to the housing boom that is now fading. Between 2000 and 2005, home price increases were six times greater than increases in household incomes. “As a result, the median house price exceeded the median household income by at least four times in a record 49 of 145 metro areas, and by more than six times in 14 metros. The markets in the country where the median price of an existing single-family home last year was the highest compared to local median income were:
Share Nation's Building News With Your Staff — It's FreeMake your business click. Subscribe your employees and trade partners to Nation's Building News — the free, online e-newspaper of NAHB. Each issue is filled with valuable news and information on every aspect of the home building industry — business and builders tips; the latest materials prices and mortgage and interest rates; new technologies; cutting edge design; state and federal regulations and how they affect the industy; and more. Information your entire company needs to stay ahead of your competitors. Forward this issue to your employees and trade partners and ask them to subscribe. Nation's Building News, it's free to them — invaluable to you. Don't delay, have your employees subscribe today. To subscribe, go to www.nahb.org/nbn. Home Builders Blitz Builds 400 Habitat Homes in One WeekEarlier this month, Habitat for Humanity affiliates and more than 1,000 building industry professionals joined forces to build more than 400 houses in 130 communities across the country during Home Builders Blitz 2006. “Never before have so many Habitat homes been built so quickly,” said Kevin Campbell, director of the national Home Builders Blitz program for Habitat for Humanity. “Partnering with professional home builders allowed Habitat affiliates to increase the number of homes they build, while builders helped their communities by doing what they do best.” “NAHB is proud to participate in such a meaningful event by supplying the professional builders and tradesmen needed to construct the Habitat homes throughout the country,” said NAHB President David Pressly. The Home Builders Blitz — from June 5-9 — was the largest Habitat for Humanity project of its kind in the country and gave many low-income families the opportunity to own their own homes. NAHB member Tom Gipson, of Thomas Gipson Homes, helped spearhead NAHB and local builders association participation in the national event. He has been involved in local Home Builder Blitzes for several years. Habitat affiliates provided the land and worked alongside professional builders, their subcontractors and other volunteers representing home builders associations from across the country to complete the Habitat homes in just one week. “The week flew by in the blink of an eye, and it is hard to believe all that was accomplished in such little time,” said Dawn Wilson, of Brookstone Homes in Milwaukee. “Waking up this morning, my sore muscles reminded me of the heavy lifting that was done by so many in order to make the dream of homeownership a reality for 10 Milwaukee families.” In Charlotte, N.C., where Habitat for Humanity, NAHB and HUD kicked off the build, 16 professional home builders helped build 16 Habitat homes. The blitz helped the Charlotte Habitat affiliate increase the number of homes it will build from 39 last year to 70 homes this year. “Lives have been changed, both for builders and the new home owners,” said Campbell. “Builders and sponsors have really helped to make a difference in communities, and we are grateful for their efforts.” Ryan Lee Wood, of Wood and Hastings Construction, who worked on a Habitat home in Birmingham, Ala., agreed that lives have been changed. “The wonderful thing about this entire project was that each day we anxiously faced a new challenge,” said Wood. “Also, everyone was happy and enjoyed being a part of a work in progress. Working with wonderful people, meeting new people in the industry, eating good food and staying on schedule was why this was such a successful week. In other words, people can make a difference in our world.” For more information about Habitat for Humanity's Home Builders Blitz 2006, go to www.habitat.org/builderblitz.
Less Housing for Residents of Average Pay, Report SaysA study by researchers at the Furman Center for Real Estate and Urban Policy and based in part on the New York CIty Housing and Vacancy Survey finds that the combination of stagnant incomes and rising rents between 2002 and 2005 has landed especially hard on households with incomes of $24,000-$32,000. The number of apartments affordable to households earning $32,000 a year has dropped by 205,000 out of 1.2 million units in just three years, the study found, with the median rent for an unsubsidized apartment jumping 20% from $750 to $900 and the median income in the city dropping from $42,700 to $40,000. Two out of five of the city’s households earn $32,000 or less. Police officers start at roughly $25,000 but jump to about $32,000 in their first year, firefighters start at $32,700, and experienced home health aides, nursing aides, child care workers, bartenders, coffee shop hostesses and tour guides make similar amounts. Over the same period, the number of more expensive unsubsidized units, including rent-regulated apartments, rose significantly. Apartments renting for $1,000-$1,200 a month rose by 58,000, or nearly 34%; the number renting for $1,200-$1,400 rose by 57,500, or 52%; and apartments for $1,400 or above rose by 74,432, or 31%. Last year, the city issued permits for the construction of nearly 32,000 new housing units, a 34-year high. The number of permits issued in the first quarter of 2006 was up 27% over the same period last year. (www.nytimes.com)
Donations Take the Hit as Housing Prices RiseWith housing prices doubling in the Washington, D.C. metropolitan area over the last five years and neighborhoods that had long been ignored becoming fashionable, local nonprofit housing organizations for the poor are finding it difficult to line up donations. Over the years, the Prince George’s County, Md. chapter of Habitat for Humanity has built on donated lots. Last month, for the first time, it had to purchase a land parcel. “They offer it to us and a month later we find out they sold it,” says the chapter’s board president. “It happens all the time, and you can’t blame them for that — they’re making money.” George Rothman, the president and chief executive of Manna, Inc., a 24-year-old organization that builds and develops affordable housing in the city, says that, “We would buy properties nobody wanted. But now it doesn’t matter what part of the city you’re looking at. There are investors, speculators, corporations.” Groups say they have also seen declines in donated construction materials as their costs have risen, and with so much building going on, finding plumbers and electricians to work alongside volunteers isn’t easy. (www.washingtonpost.com)
Next Stop: 7% Mortgage RatesWith the Fed likely to increase the federal funds rate from 5% to 5.25% at its meeting on June 29 and the financial markets starting to factor in the likelihood of a 5.5% rate in August, long-term mortgage interest rates now look more likely to top out in the low 7% range than at a high 6% rate, according to mortgage broker and syndicated columnist Lou Barnes. While the markets know that the economy will slow down, they are volatile because they also see that it hasn’t slowed enough to bring inflation safely within the range that is acceptable to the Federal Reserve. “Widespread assertions that the economy is slowing are contradicted by tax revenue,” writes Barnes. “Federal tax payments in May were 26% ahead of last year, and corporate payments are up 30% year-to-date. Individual receipts are up 14%, the biggest gain in ‘non-withholding’ revenue — bonuses, capital gains and such." (www.inman.com)
Many Lack Insurance Necessary to RebuildAs many as 70% of home owners don’t have enough insurance to rebuild their homes following a major loss from a catastrophe, according to Austin, Texas-based Southwest Insurance Information Service, a trade group that represents insurers in Oklahoma and Texas. The leading provider of building cost data, Marshall & Swift in Los Angeles, estimates that for insurance purposes 61% of U.S. homes are undervalued by an average 25%. Too many people insure their homes for what they would sell for instead of for what it would cost to rebuild them, says Dan Ramsey, president and chief executive officer of Independent Insurance Agents of Oklahoma. The market value of a home “has nothing to do with what the insurance should be,” he said. The cost to rebuild a home in Oklahoma City would be at least $110 per square foot, Ramsey said, and new building code standards, granite cabinets and other customizations, and demolition and removal costs can drive up the expense. In the case of the Harvey family, whose house was burned down from a spark from a backyard barbecue smoker, the cost of rebuilding was $61,000 greater than initial building costs just two years earlier. (www.newsok.com)
The McMansion GlutWith rising energy and mortgage costs, shrinking families and a growing number of retirement-age baby boomers ready to downsize, the golden age of McMansions — oversized homes characterized by sprawling layouts on small lots and built in cookie-cutter style by big developers — could be drawing to an end. The oversupply of McMansions is already acute in places like Loudon County, Va., a fast-growing suburb of Washington, D.C. In May, 4,719 houses were for sale in the county, more than three times the year-earlier level. The number of sales dropped 39% to 484 in the month, and the number of days a home remained on the market increased from 14 to 70. In one county subdivision, a 47-year-old airline pilot put his five-bedroom house on the market six months ago for $1 million, with the goal of downsizing to a $592,000 townhouse nearby. He didn’t get a nibble for months, but finally got an offer from a relocating California family. He sold the 5,600-square-foot home, which he purchased for $515,000 in 2000, for $820,000 and also agreed to throw in his high-definition television and a life-size Spiderman statue. (www.wsj.com)
Does Money Grow on Trees? It Could, By Investing in a YardA study by Arbor National Mortgage found that 84% of its agents believed a house on a lot with trees could add 20% to the value of the property. Another survey showed that houses with great landscaping could expect to sell for 4%-5% more than homes with just good landscaping and that houses with only fair landscaping would sell for 8%-10% less than good houses. “The business of landscaping has really exploded,” says Gopal Ahluwalia, director of research at NAHB. While landscaping still remains an afterthought for many builders, St. Lawrence Homes in Raleigh, N.C. offers three landscaping packages as standard at Trenton, a high-end subdivision in Chapel Hill. But most buyers go beyond that, according to vice president Rich Ohmann, opting for $3,000-$5,000 in extras, such as lighting, irrigation, pavers and vegetation. The American Society of Landscape Architects suggests that buyers invest 5%-10% of their home’s value in landscaping. (www.orlandosentinel.com)
Pressure Grows to Rein in Fannie Mae, Freddie MacThrough two Cabinet-level announcements and a Senate Banking Committee hearing on the accounting deficiencies at Fannie Mae, the Bush Administration and Congress last week put pressure on Fannie Mae and Freddie Mac to limit their business. On June 13, the Treasury Department and Department of Housing and Urban Development announced they would each undertake studies on the feasibility of acting administratively to rein in the debt issuance and holdings of the two housing government-sponsored enterprises through existing laws and regulatory enforcement procedures. In a June 13 address in Washington to a Women in Housing and Finance breakfast, Treasury Undersecretary Randy Quarles said his agency would “review its debt approval process to ensure that we continue to act as appropriate custodians of the power that Congress gave us when the charters of Fannie Mae and Freddie Mac were created.” He added that the “process review does not of itself presuppose any conclusion about outcomes. Treasury will carefully consider the market impact of any future action.” Separately, and nearly simultaneously, HUD Secretary Alphonso Jackson announced at a congressional caucus breakfast that his department would review the holdings and investments of the two major mortgage finance entities. “I look forward to working with Congress on establishing a strong new regulator, but until this legislation is passed, I intend to use authority granted me by the Federal Housing Enterprises Financial Safety and Soundness Act to increase the transparency of the GSEs,” said Jackson. Jackson said the review will focus on transactions classified as “other assets/other liabilities” to ensure that Fannie and Freddie are in compliance with their government charter. Senate Banking Committee Chairman Richard Shelby (R-Ala.) held a panel hearing on June 15 that included testimony from Fannie Mae Chairman Stephen Ashley and President and CEO Daniel Mudd. Also appearing in a separate panel were Securities and Exchange Commission Chairman Christopher Cox and James Lockhart, director of the Office of Federal Housing Enterprise Oversight. Shelby used the hearing to generate momentum for Senate bill S. 190, which narrowly passed his committee last summer along partisan lines. The measure would severely curtail the investment portfolios of Fannie and Freddie. The legislation has the strong backing of the Administration. NAHB opposes the bill because it would remove an effective GSE tool to funnel capital into the housing market and could disrupt the mortgage markets and harm the housing finance system. Because Senate Democrats and Republicans remain deadlocked on the portfolio issue, it is uncertain whether the legislation will ultimately go to the Senate floor. NAHB supports H.R. 1461, the “Federal Housing Finance Reform Act of 2005,” which was adopted by the House last year by a wide margin. “H.R. 1461 provides the appropriate regulatory structure that allows the GSEs to fulfill their housing mission and to deliver the necessary credit to the housing market while, at the same time, guaranteeing that the GSEs operate on a safe and sound basis,” said NAHB Executive Vice President and CEO Jerry Howard. As the GSE debate unfolds, NAHB will continue to monitor the situation closely. To read legislation, click here and enter the bill number in the box at the center of the page. For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144. U.S.-Canada Accord Would Put Lumber on Shaky Ground
“Canada is recklessly pushing to have a deal inked in time for Prime Minister Stephen Harper's visit to the White House on July 6, a move that could have huge long-term ramifications for the lumber market,” said Jerry Howard, executive vice president and CEO of NAHB. Observing that the proposed framework would last for at least seven years and as many as nine, Howard said that NAHB’s analysis indicates the pact could increase and destabilize prices and lead to bottlenecks as Canadian producers fight for limited market share and to supply shortages as firms delay shipments in anticipation of a change in duties. Howard said it is imperative for the two governments to shun political expediency and move to reach an accord that addresses housing affordability concerns. Reps. Jim Kolbe (R-Ariz.), Steny Hoyer (D-Md.) and other members of Congress on June 12 sent a letter to President Bush noting that the current framework would destabilize the marketplace by allowing Canadian provinces to choose between a tax and a quota. “While we would prefer neither a tax nor a quota, choosing between the two will create further uncertainty in the marketplace,” the letter states. “The agreement also puts in place a ‘surge’ mechanism that stops lumber imports from Canada when they reach a certain level. Both provisions will contribute to volatility in the marketplace, which is an enormous problem for home builders and lumber dealers and will add burdensome costs to affordable housing for those who are least able to pay.” In addition, as currently drafted, the proposed framework document provides no incentive or means for Canadian softwood lumber companies to exit from the terms of the agreement. “This will keep prices high and, thus, increase housing costs,” lawmakers told the White House. Such an outcome would only exacerbate the growing affordability problem that has been recently identified in studies by the Joint Center for Housing Studies of Harvard University and others. “Affordability pressures are now spreading, with median house prices in a growing number of large metros exceeding median household incomes by a factor of four or more,” the Harvard study says. “The best solution to resolving this dispute and to achieve free trade is for Canada to press forward with its legal cases before NAFTA and the U.S. Court of International Trade,” said Howard. Since the Canadians have apparently abandoned this course, Howard said that NAHB is taking several actions to safeguard the interests of its members and their customers. “First, we continue to urge the U.S. and Canada to address issues that affect lumber consumers as the two governments move to finalize an agreement. Second, if a deal results in new trade barriers that limit Canadian lumber shipments into the U.S., NAHB will help builders obtain a reliable supply of lumber at a reasonable cost by facilitating increased imports from Europe. And finally, NAHB is promoting the use of steel and other alternative building materials wherever practical,” Howard said. For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. House Bill Appropriates $35.3 Billion for HUDBy an overwhelming 406-22 margin, the House on June 14 approved H.R. 5576, the fiscal 2007 Transportation, Treasury and HUD Appropriations bill. The bill would appropriate $35.3 billion for the Department of Housing and Urban Development and fund the following housing programs as follows:
Projects funded through Rural Housing and Economic Development and Section 108 would be eligible to receive funding under a new, consolidated grant program set-aside within CDBG. The Senate Appropriations Committee is expected to release a draft version of its fiscal 2007 appropriations legislation later this month or in early July. To view the House bill, click here and type H.R. 5576 in the box in the center screen. For more information, e-mail Jenna Morgan Hamilton at NAHB, or call her at 800-368-5242 x8407. $19.8 Billion Added for Hurricane RecoveryPresident Bush on June 15 signed into law H.R. 4939, a $94.5 billion emergency supplemental spending bill to fund continuing operations in Iraq and recovery efforts on the Gulf Coast. Funding for hurricanes Katrina, Rita and Wilma recovery efforts includes $19.8 billion for the following:
For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421. Housing Priorities Discussed With Howard Dean
Addressing a wide range of legislative and regulatory issues affecting the nation’s housing industry, NAHB President David Pressly earlier this month met with Democratic National Committee Chairman Howard Dean to discuss the need to pursue a strong national housing agenda. Discussions focused on the need to enact policies that would make homeownership more affordable for America’s working families. Pressly made it clear that NAHB wants to seek bipartisan consensus and work with Congress to:
For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421. Slowing Market Sends Builder Expectations LowerRising mortgage rates, deepening affordability issues and the retreat of investors/speculators from the marketplace have prompted single-family home builders to further adjust their perspectives on the new-home market, sending the Home Builders/Wells Fargo Housing Market Index (HMI) down four points to a reading of 42, its lowest level since April 1995. “We now expect new-home sales to be off by 13% from the record posted in 2005,” said NAHB Chief Economist David Seiders. “Single-family starts, supported by large builder backlogs of unfilled orders and some continuing reconstruction in the wake of last year’s hurricanes, should be down by about 9% from the 2005 record. “These forecasts naturally are subject to a considerable degree of risk,” Seiders added. “The downside risks include the potential for large numbers of sales cancellations and re-sales by the investor/speculator group as well as more aggressive tightening of monetary policy than we’re assuming in our baseline forecast.” “Looking at today’s numbers, it’s important to keep one thing in perspective,” noted NAHB President David Pressly. “The HMI is a measure of builder sentiment — and attitudes may vary by a greater degree than actual market activity.” Derived from a monthly survey that NAHB has been conducting for nearly 20 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months and traffic of prospective buyers on a seasonally adjusted basis. Any number over 50 indicates that more builders view sales conditions as good than poor. All three component indexes declined in June: current sales fell three points to 47, sales expectations fell five points to 50 and builders’ assessment of prospective buyers dropped four points to 29. Builder confidence slipped seven points to 40 in the Northeast, four points to 25 in the Midwest, two points to 49 in the South and one point to 61 in the West. Want to Know the Housing Starts Through 2014? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com.
Seiders Says, 'Builders Have Not Lost Touch With Demand' on the NAHB Economics Blog NAHB Chief Economist David Seiders says that "builders have not lost touch with demand" 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 Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective. Eye on the Economy: Housing Wealth Effect Will WeakenEconomic growth is coming off the first-quarter surge, and a period of below-trend GDP growth lies ahead. This adjustment process should help extend the life of the current economic expansion for at least several more years. Employment growth is slowing down with the growth in economic output (real GDP). This process should restore more slack to labor markets before long, an essential element of an extended economic expansion with low inflation. Core Inflation Is Bubbling Up Core inflation has been firming up as the expansion has matured and labor markets have tightened, and high energy costs have been leaking into the core thorough business cost structures. Core inflation now is colliding with the upper bounds of various Federal Reserve “tolerance ranges.” Recent statements by Fed Chairman Ben Bernanke and other Federal Reserve officials show much greater concern about upward pressures on core inflation than about the evolving economic slowdown, even though much of the core inflation issue can be traced to a highly controversial housing component. It’s now virtually inevitable that the Fed will enact yet another quarter-point rate hike at the conclusion of the next Federal Open Market Committee (FOMC) meeting on June 29, and further increases can’t be ruled out. Stock and Bond Markets Are Reeling The Fed’s display of anti-inflation resolve, combined with similar positions taken by various foreign central banks, have put heavy hits on U.S. and global stock markets while lowering longer-term inflation expectations among financial market participants. These developments have fostered a modest decline in long-term interest rates during the past month, but long rates will firm up before long. The Housing Slowdown Is on Track The “moderate” and “orderly” housing slowdown appears to be on track, marked by systematic declines in mortgage applications, home sales and housing starts as well as by a slowdown in house price appreciation. This process should extend well into next year as long as our broad economic and financial market forecasts stay on track. The projected “soft landing” for housing in 2006 and 2007 certainly will have some geographic rough spots, including previously “high-flying” markets as well as “earthbound” markets where economies have yet to stage meaningful lift-off following the 2001 recession. Housing Production Swings From Growth Engine to Drag On a national basis, housing production now is transitioning from a strong engine of economic growth to a drag on GDP growth. The projected contraction in residential fixed investment is the key component of the evolving and projected slowdown in growth of real GDP. The Housing Wealth Effect Will Weaken Only Gradually Support to the economy provided by large capital gains on housing and associated stimulus to personal consumption expenditures undoubtedly will wane as time passes, but this shift will not be abrupt. Equity in owner-occupied housing displayed solid growth in the first quarter, reaching a record $11.4 trillion despite the slowdown in price appreciation and ongoing borrowing against housing equity. 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 June 14 edition. To subcribe to “Eye on the Economy,” click here. Want to Know the Housing Starts Through 2014? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. Latest on the NAHB Economics Blog: 'Builders Have Not Lost Touch With Demand' NAHB Chief Economist David Seiders says that "builders have not lost touch with demand" 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 Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective. Builder’s Tip: A Free Caulk-Finishing Tool That Works
What is it? As shown in the accompanying drawing, I reworked a spent plastic caulk tube and turned it into a custom-made finishing tool that does the job. Here’s how I did it:
— Vincent C. Pirrone, Sparks, Nev. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Mary Lou von der Lancken at Fine Homebuilding.
BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665.
Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you. Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily. Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing. Log in today to start taking advantage of this free NAHB member benefit. Business Plans, Exit Strategies Explored at Builder Symposium
Business pros, including in-demand CPA Jim Weber, founding partner of Weber-O’Brien Ltd., will be providing strategic business advice at the 2006 Custom Builder Symposium in Las Vegas. Weber, who has worked with hundreds of builders over several years on strategic business issues and challenges entrepreneurs to expect more from themselves, their advisers and employees, will discuss how “It Takes a Plan” to build a successful business and exit strategy. His presentation will touch on successful business basics — from foundation systems, policies and procedures to future strategies, including succession planning. The Custom Builder Symposium will be held Oct. 27-29 at the Hyatt Regency Lake Las Vegas Resort. Other educational sessions at the symposium will address such hot home builder topics such as:
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 250 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.
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. For a Better Bottom Line: Read ‘BoB’
Read and subscribe to NAHB’s Business of Building e/Source, the free, monthly e-newsletter from NAHB’s Business Management Department that offers essential knowledge from housing industry pros and keeps you current on news and trends affecting your operations and bottom line. If you are not a subscriber to Business of Building, the following are some of the stories you have missed in 2006:
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 250 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
NAHB’s 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. To Merge or Not to Merge: The Parable of the CarpenterBy Karen Zieba, Zieba Builders Recently, I was approached by a respected peer from the Remodelors™ Council with an unusual offer ― join forces, combine companies, become one. (Translation: close my company and go to work for them.) My first reaction was a flat, but gracious, refusal. After all, my husband had built a fine reputation for our company over the course of the past 17 years, and it seemed ridiculous to suddenly vanish from the marketplace. But after I hung up, I began to doubt my decision, haunted, somewhat, by what I call “The Parable of the Carpenter.” It goes something like this:
What “end” did we seek? We had never considered the option of working for another general contractor. Was refusing this offer it the right thing to do? Stepping into a specialized role for another company that is well-managed and well-respected can restore the promise of more income, more self-respect and more time with loved ones almost immediately by reducing the stress of overwhelming responsibility that comes with owning and managing your own business. As a remodeling general contractor, there’s always estimating, selling, producing, billing, collecting and paying. Let’s not forget recruiting, hiring, training, retaining, firing, worker’s compensation and other insurance liabilities that have to be managed. Or, of course, punch lists, employee reviews, change orders, liability audits, indecisive clients and art juries to aggravate each day. Specializing as a competitively-paid, respected employee — with a limited role ― certainly has its merits. Plus, there are more opportunities in the remodeling industry for skilled specialists than many of you realize. In a competitive market, a strong production manager, designer, estimator or sales person can almost name his or her price. That makes now an excellent time for those considering specialization to network with their respected peers about working together. Not Merging Was the Right Thing for Us to Do But after much soul-searching, we concluded that declining the merger opportunity was the right thing to do for our company. We enjoy business management, and we take as much pride in providing a fun, supportive and stable work environment for our employees and trade partners as we do in the quality of our projects. For us, having a strong company, surrounded by highly-qualified, energetic people is just like having a strong and happy family. That is the end we seek. So, if you enjoy the multi-faceted work of the general contractor but need help to reach your goals, surround yourselves with the best people you can find who share your vision. Allow them to grow and contribute, and compensate them competitively. If you enjoy and excel at certain facets of this business but would prefer to work with less risk, then specializing for another general contractor who will allow your skills to shine, reward your leadership contributions and respect your personal pursuits is an attractive business alternative. Karen Zieba and her husband continue to operate Zieba Builders in the Long Beach, Calif. area. They do not have plans to merge with another company anytime soon. For more information, call Zieba at 562-439-5294. Enter the BALA Competition, Registration Deadline Is July 15
Builders, interior designers, architects, developers, marketing and real estate professionals, the registration deadline for entries for the 2006 Best in American Living Awards (BALA) is July 15. Entry notebooks are due by July 31. BALA is the foremost residential design competition in the country. The awards program includes 41 categories — from single-family attached and detached in a variety of sizes to rental developments and custom homes plus categories for interior design, communities and neighborhoods, affordable housing, smart growth, the U.S. Department of Housing and Urban Development (HUD) Secretary's Award for Excellence and others. Special HUD Award for Excellence The HUD Secretary's Award for Excellence recognizes design excellence produced through cooperative public/private efforts that expand homeownership opportunities for underserved families. For details on the HUD category and to download the HUD award’s application, visit www.huduser.org/research/secaward.html. Homes completed or for which the first model opened between May 1, 2005 and July 15, 2006 are eligible for this year’s competition. Entry Dates Near:
Co-sponsored by Professional Builder magazine and NAHB, winners will be announced at the 2007 International Builders’ Show to be held Feb. 7-10 in Orlando, Fla. Winning entries will also be posted on the Professional Builder Web site, HousingZone.com, for up to one year after the announcement. For additional information and to download a BALA entry form, click here, or contact Judy Brociek, Professional Builder, at 630-288-8184, or Michelle Persinger Matuga, NAHB, at 800-368-5242 x8343. Past Winners A total of 92 award winners in 41 categories were chosen from more than 390 entries in last year's competition. Winners were featured in the January 2006 issue of Professional Builder. To view the winners as posted in an e-book on the Professional Builder Web site, click here. One 2005 winner is pictured below.
Want to Know More About Designations? Ask an ExpertThe NAHB University of Housing recently implemented “Ask an Expert,” a new service on the NAHB Web site for members seeking or earning designations. "Ask an Expert" allows members to e-mail designation program graduates with questions that will help then earn their CSP, Master CSP, CMP or MIRM designations. The graduates will field questions and concerns ranging from course content, to the designation process, to how the designation has benefited them. So, if you're thinking about enrolling in the CSP, Master CSP, CMP or MIRM designation programs or have already started the necessary course work and have questions or concerns, visit “Ask an Expert” on the NAHB Web site. A variety of designation holders will provide you with guidance and help you navigate the ins and outs of the program.
Learn More About The NAHB University of Housing 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.
Log In and Discover www.nahb.org The NAHB Web site, www.nahb.org, gives you access to nearly 5,000 pages of housing industry information and exclusive members-only resources 24 hours a day, seven days a week. Access is fast, easy and free to NAHB members. To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in. To create your login:
By logging onto the NAHB Web site, you will have access to twice as much information as non-members — information that will help you stay ahead of your competition. You will be able to view and read entire sections of content developed just for members, and you will be able to personalize the site to your specific interests. To learn more, log in and visit the "How to Use" www.nahb.org section in My NAHB. For questions or help logging in, call 800-368-5242 x0; or e-mail your name, company name, state and phone number to login@nahb.org. 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.
Log In and Discover www.nahb.org The NAHB Web site, www.nahb.org, gives you access to nearly 5,000 pages of housing industry information and exclusive members-only resources 24 hours a day, seven days a week. Access is fast, easy and free to NAHB members. To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in. To create your login:
By logging onto the NAHB Web site, you will have access to twice as much information as non-members — information that will help you stay ahead of your competition. You will be able to view and read entire sections of content developed just for members, and you will be able to personalize the site to your specific interests. To learn more, log in and visit the "How to Use" www.nahb.org section in My NAHB. For questions or help logging in, call 800-368-5242 x0; or e-mail your name, company name, state and phone number to login@nahb.org. Building Museum Exhibits Sustainable Modular House
On display through June 2007, “The Green House” show recently served as a backdrop for green building stories on CNBC featuring interviews with NAHB Green Building Subcommittee Chair Ray Tonjes, a custom builder in Austin, Texas. “It’s important to tell this story because our country has evolved — America wants to build sustainably,” said Chase Rynd, the museum’s executive director. “Consumers want well-designed products for their homes to be ecologically responsible — and the industry is responding. This exhibition is the tip of a very large iceberg that includes all design, from architecture and building materials, to furniture and appliances — even dinnerware can be ‘green.’” The exhibit includes a heliodon, which visitors can use to figure out when and at what angle sunlight will pass over a building, as well as a detailed look at the materials and furnishings used in the Glidehouse. Educational programs for children and adults have been created to accompany the new exhibit, including tours of nearby green buildings, seminars and discussions. In addition to exploring green building, the exhibit spotlights the changing nature of modular housing, a low-cost alternative to traditional stick-built homes that has been able to increasingly focus on quality control and sustainability since fewer materials are wasted on the site. The price of a Glidehouse — including the design, trucking materials to the site and the actual construction (excluding the solar panels featured in the house at the museum) — is estimated at about $132 per square foot if erected on a level lot. The house also has a long, narrow footprint to facilitate cross ventilation and windows placed to maximize solar benefits. The walls and roof are constructed of structurally insulated panels (SIPs) filled with soft foam insulation. The concrete countertops contain recycled newspapers and fly ash, the floors are bamboo, the water heater is tankless and low VOC paints are used throughout. All the appliances are ENERGY STAR® rated. The National Building Museum was created in 1980 and is housed in the old Pension Bureau building, an Italian Renaissance-style gem that was built in 1887 and had fallen into disrepair before the museum was founded. For more information on green building resources available from NAHB, e-mail Calli Schmidt, or call her at 800-368-5242 x8132.
“The Modular Home,” available through BuilderBooks.com, shows you how going modular can expand choices, save time, save money and prove to be more durable than a conventionally built house. “The Modular Home” is fully illustrated with a 16-page full-color insert, plus renderings and floor plans. To view or purchase this publication online, click here, or call 800-223-2665. Voluntary Guidelines Promote Water ConservationA new voluntary water efficiency program that will build a national brand for technologies and practices that conserve this vital resource is great news for home builders and new home buyers, according to NAHB. Patterned after the popular ENERGY STAR® program, which recognizes consumer products with superior energy efficiency, WaterSense will identify products and services that use less water. ENERGY STAR® is administered by the Department of Energy and the Environmental Protection Agency. EPA administrator Stephen Johnson officially launched the voluntary guidelines at the annual conference of the American Water Works Association in San Antonio on June 12. The new water guidelines are expected to give “green” home building suppliers an additional benefit in the marketplace — and that should encourage more consumer acceptance, said NAHB President David Pressly. “We know many home builders are looking for ways to build green, and that means much more than just energy efficiency,” Pressly said. “Green building includes paying close attention to resource conservation, and water certainly is an important resource.” First-time costs and payback times for green products influence consumer decisions as well, he noted; to see comparisons, click here for the PATH Technology Inventory, which is maintained by the NAHB Research Center. “Home buyers can now choose from a number of innovative products — from low-flow showerheads to drip sprinkler systems and dual-flush toilets — that help them save water. A nationally branded program will entice more suppliers to offer resource-efficient solutions and allow home builders to stay ahead of consumer demand,” Pressly said. “I never thought I’d be promoting ‘designer water,’ but I’ll make an exception in this case,” he added. “Our builders want to go green because it’s the right thing to do, and a voluntary program gives more choices to the consumer. I hope that WaterSense will make it easier for our members to accomplish this goal.” For more information on NAHB’s green building resources, e-mail Calli Schmidt, or call her at 800-368-5242 x8132. Get Green Building Intelligence at BuilderBooks.com The “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green building. To view or purchase this publication online, click here, or call 800-223-2665. California Green Builder Program Meets State GoalsThe California Energy Commission last month gave the California Green Builder program its green seal of approval, noting that the program is cost-effective and consistent with the state’s energy policy, waste policy and environmental goals. The program was developed by the California Building Industry Association and its affiliate, the Building Industry Institute, to encourage builders to build homes that use less water and energy than standard homes, reduce the need for lumber and help communities meet their state recycling goals. So far, more than 1,300 homes have been built in compliance with the program’s standards, and some 5,000 more are on the drawing boards. “Many home builders have wanted to build green, but in a way that made bottom-line sense and could be shown to benefit the environment,” said Robert Rivinius, CBIA’s president and chief executive officer. “The California Green Builder program is workable and measurable, and we’re excited that the Energy Commission has recognized the program’s benefits. We think the California Green Builder program will be the standard for green home building for years to come.” Participants in the program agree to build homes that:
Rivinius noted that the voluntary program features standards that are reasonable, cost-effective and easy to understand and that allow environmental benefits to be calculated and verified. Third-party testing is used to ensure that each new home complies with the program’s requirements. Each home built under the program saves an average of $15-$30 on monthly energy bills, saves enough water each year to fill a backyard swimming pool and saves at least two trees, Rivnius said. Current program participants are Castle and Cooke, Centex Homes/Central Coast Division, Pardee Homes, Treasure Homes and Victory Homes. Get Green Building Intelligence at BuilderBooks.com The “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green building. To view or purchase this publication online, click here, or call 800-223-2665. Job Readiness and Cycle Time Key to ProfitsAs builders look for ways to decrease their cycle time and increase the efficiency of their business to improve their bottom line, the National Housing Quality program of the NAHB Research Center is including in its best practices a time-saving, documented quality assurance plan that reinforces job-ready conditions. Job readiness starts with open, two-way communication, according to the center’s Quality Matters E-Newsletter. “The key to reducing cycle time and getting the job done right the first time includes breaking down the barriers to communication and reinforcing the terms up front,” according to the publication. “How can a trade contractor know what is expected if it hasn’t been addressed? Since most trades do work for more than one builder, there are varying practices that can become habit. What works for one builder might not apply to others, and vice versa. Beyond a builder communicating his expectations, the trade contractor should also indicate his terms and what is needed from the builder to do the job well.” Builders and their trade partners should discuss the terms at the start of the job and then document the requirements for job readiness before work can begin at each major stage, the newsletter advises. The scope of work should also include procedures for dealing with partially ready jobs, including appropriate communications with home owners as needed. “When these conditions are not met, communication breaks down and progress comes to a halt. Field managers should reinforce these requirements to prevent trade contractor overlap and improve safety as much as possible. If several work crews are hovering over the same site waiting for their turn, it’s safe to assume that everyone involved is losing money. Hiring trades with a formal quality assurance process in place helps to ensure that job-ready conditions are met consistently,” the newsletter says. By addressing job readiness as a process rather than a problem, builders and trades can identify and resolve issues that keep cropping up. The following model is suggested as a guide for remedying recurring problems at their source:
Application Deadline Nears for EnergyValue Housing AwardsOnly a few weeks remain for submitting applications for the 2007 EnergyValue Housing Awards (EVHA), which honor builders who voluntarily integrate energy efficiency into the design, construction and marketing of new homes. The awards will be presented at the 2007 International Builders’ Show in Orlando, Fla. Categories include: affordable, custom, factory-built, production and multifamily housing in hot-, moderate- and cold-climate regions. At a time when the building industry is stepping up efforts to address rising fuel costs by improving the energy performance of new homes, the awards present an opportunity for quality-focused, environmentally responsible builders to share their best practices and be recognized for their efforts. A panel of energy-efficiency experts will evaluate applicants based on their homes’ energy value; design; construction methods and processes; marketing and customer relations efforts; and participation in voluntary energy programs. All applicants receive a detailed evaluation of their entries; complimentary passes to the awards dinner ceremony; and a free, one-year, single-user subscription to BuildingGreen Suite. Winning builders will be featured on the NAHB Research Center Web site and in trade and mainstream publications; and they will also have the opportunity to share their success stories at workshops, educational programs and conferences. All professional U.S. home builders whose primary occupation is constructing homes, developing real estate or both are eligible to participate. Homes must have been completed after January 2004 and before the awards application is submitted. The application process asks for a great deal of detail, so start now — all entries must be postmarked by July 17. The EVHA is coordinated by the NAHB Research Center in partnership with the NAHB Energy Subcommittee and the U.S. Department of Energy's National Renewable Energy Laboratory. For an application or additional information, click here. Cluster Boxes Replacing Door-to-Door Mail Delivery
An effort by the U.S. Postal Service to save money in some states by curtailing mail delivery to people’s homes and expanding the use of cluster box units has run into staunch opposition from the nation’s home builders. The USPS has long insisted on curbside delivery in newer neighborhoods, while maintaining door-to-door delivery only in cities and older suburbs, but some districts recently — including Alabama and Georgia — have been stepping up the pressure to install cluster boxes for single-family housing developments, with one cluster serving owners in up to a one-half mile radius. The Postal Service has been encouraging developers to install the clusters by providing delivery service to those who do. Ordinarily, postal rules allow mail delivery to be deferred until half of a new development is occupied, forcing early buyers to go to the post office to pick up their mail. Once a developer agrees to the clusters, it cannot switch to curbside delivery when the neighborhood is built out, and builders perceive the early-delivery incentive as a threat. “Postal rules say that a mode of delivery can never be changed unless it saves the USPS money. Once you have a CBU, you’re stuck with them,” said NAHB Regulatory Counsel A.J. Holliday, who is investigating the new policy for NAHB members. At NAHB’s spring board meeting in Washington, D.C. last month, the association’s directors unanimously approved a resolution urging USPS to maintain curbside delivery in new residential developments and to immediately abandon efforts to eliminate it. The resolution also calls on Congress to help ensure that the Postal Service refrains from discriminating against the occupants of new homes and degrading their delivery service regardless of its cost compared to service to similar existing homes. USPS has left unresolved the question of who is responsible for finding a safe, well-lighted and accessible location for the clusters — the developer, a home owners association or the postal service itself. And unless a home’s occupants demonstrate that they are physically unable to walk to the neighborhood cluster to collect their mail, home delivery is not offered. “While customer service is our primary goal, our growth management plan is to provide the most efficient, secure and cost-effective methods of delivery as well,” said a letter from a USPS district manager to Alabama home builders. The letter also noted that “the single most important fact to know about central delivery is that it is not a reduction in service.” And while the Postal Service has promised to work with developers and local land use planners to choose the best locations for the cluster box units (CBUs), even here questions remain. “It is unclear who will buy the CBUs and who will provide the land,” Holliday said. “USPS used to provide CBUs, but now the expectation seems to be that the developer will provide the land and buy the CBUs, and they will be placed wherever USPS decides, after whatever consultation it declares to be adequate. Parking and lighting may be assigned in a similar way. Since lighting is a continuing cost, like mowing and other maintenance, developer-provided CBUs may require formation of a home owners association that can assess the households to pay for these costs.” The USPS has claimed that the clusters are safer because they are harder to steal from than unlocked curbside mailboxes. While CBUs have long been the rule for townhouse communities and in parts of the country with more temperate climates, snow and ice can limit access to the units if the locality hasn’t plowed and shoveled. “It remains to be seen whether rain, snow or dark of night will deter the postal patrons from retrieving their mail,” Holliday said. Meanwhile, the Postal Service is also working hard to change existing door-to-door delivery to curbside service. In the ruined old neighborhoods of New Orleans now being rebuilt, USPS is refusing to deliver to homes that do not have curbside mailboxes, even if they had door-to-door delivery before Hurricane Katrina. In many of these neighborhoods, the service is refusing to deliver to houses at all and erecting “temporary” CBUs instead. “Apparently, USPS has decided that New Orleanians with the courage to return do not have enough inconveniences to deal with. Postal regulations require that all the households agree to any change in method of delivery, and USPS has said that the CBUs will come down only if all the residents served by them want them to come down. CBUs could be coming to your city neighborhood, too,” Holliday warned. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Workers Can Avoid Back Injuries by Lifting Safely
Following a few practical tips can help workers lift safely and avoid injury, according to the National Safety Council, which is promoting safety information this June in celebration of National Safety Month. The following pointers are taken from two council publications — “The Lifting Challenge” and “Lifting and Carrying”:
Protect Your Workers and Your Profits The “Jobsite Safety Video,” available through BuilderBooks.com, provides an overview of the key safety issues residential builders and workers need to focus on to reduce accidents and injuries. Based on the “NAHB-OSHA Jobsite Safety Handbook,” this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos. To view or purchase this DVD online, click here, or call 800-223-2665. Public Housing Rebuilding Accelerated in New OrleansUnder plans to accelerate the return of public housing families to New Orleans unveiled by Housing and Urban Development Secretary Alphonso Jackson last week, about 1,000 units will be rehabilitated and reopened within the next 60 days. The plan also calls for raising the value of HUD Disaster Vouchers and redeveloping moderately to severely damaged public housing units to make way for a mix of public housing and affordable rental and single-family homes. “President Bush said soon after Hurricane Katrina ravaged the city that he is committed to rebuilding the great city of New Orleans,” Jackson said. “We are making the President’s vision a reality with an innovative plan that will not only reopen nearly half of the city’s public housing, but also provide an economic and social renaissance to several New Orleans neighborhoods.” About 1,000 public housing residents have already returned to the city, and by accelerating the cleanup and repair of additional units at the developments where they are now living, the Housing Authority of New Orleans will be reopening an additional 1,000 units by August. Roughly 5,000 families occupying public housing were displaced by the hurricane last August. Jackson has also directed the housing authority to increase the Fair Market Rate — which is used to determine the value of vouchers in local communities — by 35%. This will increase the value of the Disaster Vouchers that HUD is providing to displaced families. The Fair Market Rate for a two-bedroom apartment in New Orleans was $696. The new payment standard will boost the voucher to $940, which should open up more rental housing opportunities for displaced households. Until HUD finishes work on rebuilding and revitalizing its housing developments in the city — an effort that Jackson said “isn’t something that will be done overnight” — families will be assisted with Disaster Vouchers, Section 8 Vouchers and Tenant Protection Vouchers to cover rent wherever they have relocated. Almost 1.2 Million Homes Damaged in 2005 Hurricanes
In cooperation with the Federal Emergency Management Agency (FEMA), the Small Business Administration and the Department of Housing and Urban Development, the government report summarizes damage to residences in 136 counties across five states. The estimates were largely derived from FEMA inspections of housing units to determine their eligibility for insurance from the agency. For homes that are less than 50% damaged, FEMA will provide up to $5,200 to pay for repairs not covered by insurance. That amount rises to $10,500 for damage exceeding 50%. Of the total 836,647 owner-occupied housing units sustaining damage from the 2005 hurricanes, roughly 186,000 had both hazard and flood insurance, 399,000 had hazard insurance only and 252,000 were uninsured. About 7,000 of the owner occupied homes were severely damaged or destroyed, with $30,000 or more in damages; and more than 53,000 suffered major damage in the range of $5,200 up to $30,000. More than 360,000 units of renter-occupied housing were damaged, about 241,800 of them single-family structures. Roughly 2,300 of the single-family rental homes were severely damaged or destroyed. The summary of damage by state included the following information:
Counties with the highest percentage of occupied units suffering major or severe damage included: Hancock, Miss., 69.8%; Sabine Parish, La., 78.4%; Cameron Parish, La., 71.8%; Plaquemines Parish, La., 57.5%; and Orleans Parish, La., 55.9%. For information on NAHB’s disaster relief resources, e-mail Ken Ford at NAHB, or call him at 800-368-5242 x8228. HBI Leads Efforts to Promote Careers in Home BuildingParticipants at the National Career Clusters Institute’s Fourth Annual Conference in Phoenix on June 12-14 discussed strategies to convey to state and local educators the importance of including architecture and construction programs in their schools’ core curriculums. The presentation, which was hosted by the Home Builders Institute, the workforce development arm of NAHB, also emphasized the need for educators to develop partnerships with the residential construction industry to encourage students to consider careers in the industry. HBI is the leader of the Architecture and Construction (A&C) Career Cluster and has been widening its efforts to promote home building careers through its new “Make It Happen” campaign and www.buildingcareers.org Web site. The A&C Career Cluster is responsible for bringing together secondary and post-secondary educators with industry representatives from commercial, industrial and residential construction, as well as architecture. Joining HBI on the A&C Career Cluster National Advisory Committee are the American Institute of Architects (AIA), Associated Builders and Contractors (ABC), U.S. Department of Education Office of Vocational and Adult Education and the Nebraska Department of Education, among several others. “Our goal is to let young people know that home building has a place for them no matter what their talents or skills, whether they want to be an architect or interior designer, or are interested in construction management or land acquisition,” said HBI Chairman Mike Sivage. “A great method of achieving this promotion is to combine the efforts of the educational and industrial sectors. That is what the Architecture and Construction Career Cluster does.” The A&C Career Cluster will meet again next month to weigh the results of a recently conducted Web-based survey on knowledge and skills, as well as review Pathway Plans of Study, which serve as study guidelines to take students from 9th grade through post secondary education. For more information on the Architecture and Construction Career Cluster, e-mail Deanna Lewis at HBI, or call her at 800-795-7955 x8927. Software Services Include Coordinating Supplier Rebates
While home building may be slowing, HomeSphere — a company that provides software-based solutions and services for the industry — reports that its business is growing. This year it has added more than 100 builders to its rebate program, bringing the total number of builder participants to 800, and it is also adding to its base of 60 top manufacturers and suppliers. Founded in 1999 by former Pulte Homes executive Jim Waldrop and based in Denver, HomeSphere is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. The company’s BRI Cash Incentive Program enables builders to collect their rebates easily, without a lot of paperwork and headaches. When they use products made by BRI supply chain partners, they earn rebate points that are converted to dollars when the house closes. HomeSphere has recently added top manufacturers to its rebate program, including HB&G, a supplier of building products for porches, decks and patios; Rinnai, the largest manufacturer of energy-efficient tankless water heaters, ductless heaters and direct vent fireplaces; and Marentech. Former MDC Holdings executive Tom Harper was hired this year as the company’s vice president of supply chain services, and has been charged with using HomeSphere’s rebate management services to further develop productive relationships between suppliers and builders. Harper has implemented the company’s AllTrack Program at Standard Pacific Homes and John Laing Homes. The program tracks the use of manufacturers’ products for builders who construct more than 500 homes a year. Of interest to smaller builders who generally have fewer than 50 starts a year and who want to gain better control of their business from the estimating stage all the way through closing, HomeSphere’s BuildSoft is a Windows-based software system that enables builders to coordinate purchase and work orders, manage scheduling changes and handle all of their accounting functions with the click of a mouse. Currently, more than 3,000 production and custom builders are using HomeSphere to close more than 250,000 homes annually. HomeSphere says its technology is saving builders an average $100,000 a year. This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page. NAHB-Produced Programs on HGTV & DIY This WeekThe NAHB Production Group produces four weekly television shows on HGTV and DIY for consumers. The following is this week's lineup: "I Want That" on HGTV
"Dream Builders" on HGTV
"Rock Solid" on DIY
"Assembly Required" on DIY
Episode: "LV Home"
The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use. The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.
Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you. Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily. Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing. Log in today to start taking advantage of this free NAHB member benefit. HELP to Target College Grads for Residential ConstructionThe National Housing Endowment, the philanthropic arm of NAHB, is launching HELP ― the Homebuilding Education Leadership Program ― to bolster college and university residential construction management programs around the country. The goal is to triple the number of college graduates entering the home building industry over the next decade. “The National Housing Endowment is initiating our new ‘cornerstone’ program, HELP, in response to the documented, ongoing management needs within our industry,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “If we do not invest in our future, who else will?” Many of today’s colleges that offer construction programs only emphasize commercial construction management. HELP will provide grants to two- and four-year colleges and universities to move them toward creating or enhancing residential construction management programs. HELP grants will be used to:
The endowment will establish an advisory panel including academia, NAHB and its affiliates, industry recruiters and industry leaders to identify the initial recipients of the grant awards. “We will approach these universities judicially and very deliberately,” Garczynski said. “We are excited by the direction that the endowment is taking and believe that this program will have a profound impact on the industry for generations to come.” For more information on HELP, visit www.nationalhousingendowment.org. Avoid Credit Card Processing Rate Increases With SolverasSolveras Payment Systems, the newest Member Advantage company, offers members and home builders associations the chance to avoid the Visa® and MasterCard® processing rate increase that the credit card company recently announced. Solveras Payment Systems has negotiated a special deal for NAHB members that will allow you to avoid upcoming increases by Visa® and MasterCard® if you contact Solveras no later than Friday, June 30 and lock in pre-increase processing. Solveras, which originally offered this deal during the month of May, has extended it through June. If you accept credit cards and don’t contact Solveras, these increases could significantly impact your bottom line. Add that to the Solveras’ regular discounts on credit card processing, simplified monthly billing and an easy-to-read account statement, and you’ll find an excellent opportunity to keep more profit on every credit card sale. Visit www.nahb.org/ma to learn more about your free customized savings analysis and more information on new processing technology available to members For more information, e-mail Tiffany Smith at NAHB, or call her at 800-368-5242 x8273. Other Member Advantage Discounts For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA. Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you. Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily. Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing. Log in today to start taking advantage of this free NAHB member benefit. GM $500 Exclusive Offer for NAHB Members
For complete details, visit www.gmfleet.com/nahb. The program runs through Jan. 3. 2007. GM NAHB Affinity Cards and details on this offer were mailed directly to NAHB members from GM, and members should use the affinity card when purchasing a qualifying vehicle. Members who have misplaced or otherwise do not have a GM NAHB Affinity Card may print out their own replacement cards in order to show member verification to a GM dealer. Note: Members must be logged in to www.nahb.org in order to print their replacement card. Members with a www.nahb.org login should go to www.nahb.org/MA and click on the “GM Exclusive Offer.” This will take members to a Web page with program details and instructions for printing a replacement card. There are also instructions for members who do not have a login (they will be sent to www.nahb.com/loginGM and returned to the page to get a replacement card). For more information, e-mail Tiffany Smith at NAHB, or call her at 800-368-5242 x8273. Other Member Advantage Discounts For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA. Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you. Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily. Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing. Log in today to start taking advantage of this free NAHB member benefit. BuilderBooks.com Offers Free Shipping on Books This MonthBuilderBooks.com, the publishing arm and official bookstore for NAHB, is offering free ground shipping on orders of $25 or more throughout the month of June when you order online. The free offer is a great opportunity to buy in bulk and receive special bulk pricing and save even more. Stock up on these titles to give to your customers:
This offer is not good on prior purchases and does not apply to express shipping. International orders are excluded. Find Key Employees Through NAHB Online Career Center
NAHB members using the NAHB Career Center will receive a 20% discount off of standard rates for job postings. For a complete listing of all rates, click here. The career center can be found on:
Career center features that give members a competitive edge include :
Calendar of Events
To view more meetings and events information on the NAHB Web site, click here.
The NAHB Web site, www.nahb.org, gives you access to nearly 5,000 pages of housing industry information and exclusive members-only resources 24 hours a day, seven days a week. Access is fast, easy and free to NAHB members. To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in. To create your login:
By logging onto the NAHB Web site, you will have access to twice as much information as non-members — information that will help you stay ahead of your competition. You will be able to view and read entire sections of content developed just for members, and you will be able to personalize the site to your specific interests. To learn more, log in and visit the "How to Use" www.nahb.org section in My NAHB. For questions or help logging in, call 800-368-5242 x0; or e-mail your name, company name, state and phone number to login@nahb.org. |