Print-All Page: July 3, 2006

In a state whose tough regulatory climate has made it difficult for home builders to keep up with the demand for housing, most major markets have now entered into a relatively mild slowdown that will stabilize conditions as levels of existing inventory are worked down, according to representatives from the industry appearing at PCBC in San Francisco toward the end of last month.

“The next two to four months will be a telling time for us,” said Layne Marceau, chairman of the California Building Industry Association (CBIA) and a division president of Shea Homes. Comparing today’s predicament to one faced by car dealers every year, the association leader said that builders will be busy “moving ’06s off the lot so we can get ’07s in.”

The departure of speculators from the housing market and high prices are forcing builders to market completed homes more aggressively, Marceau said, creating “a short-term buyers market, probably the best buyers will see,” before things return to normal.

The end of California’s housing boom “means supply and demand for $500,000 homes in Sacramento and the Inland Empire and $700,000 homes in the Bay Area and San Diego are pretty well balanced,” Marceau said. “However, the demand for entry-level homes and condos continues to be largely unmet.”

Marceau said that affordably priced homes “aren’t penciling out” in most parts of the state because of a scarcity of developable land and impact fees that now average in the $50,000-$60,000 range and can total $100,000 or more in several communities.

“The bottom line remains the same: if the dirt costs $150,000 and the fee load is in the vicinity of $100,000, you can’t build a $300,000 entry-level home,” he said.

Marceau noted that California’s current 58% homeownership rate puts it in 49th place among the 50 states and represents a 12 point gap with a national homeownership rate of 70%.

Alan Nevin, CBIA’s chief economist, said that he expects 170,000-180,000 total housing starts in the state this year, a 15%-20% decline from 2005.

In the meantime, “good things are happening” in California’s economy, he said, which will gain about 200,000 jobs this year. There will also be no decline in construction jobs in the state despite less home building activity because of a pickup in infrastructure and commercial building and residential alterations, all three of which “are going full-bore.”

Although single-family production has slowed in most parts of the state, with the most significant declines in Sacramento and the San Joaquin Valley, multifamily starts are holding up in Los Angeles, San Francisco and Orange counties, Nevin said, with San Diego a notable exception.

‘We haven’t seen any single-family inventory for years,” he said, but the inventory that has materialized in recent months “is still very low and will burn off as it always does.”

Houses that are “priced right” can still sell in 30-45 days, he said, and the 60-day resales now occurring are normal, he said. However, home sellers whose prices are unrealistically high can expect to see their homes languish for some time before they are sold — six months or more.

In a fast-growing economy with good interest rates, Nevin predicted that home price appreciation would average in the 0%-5% range following the rapid run-ups in prices in the past few years.

Also, slowing production is expected to bring some relief in land prices and construction costs, he said. The latter have been rising10%-15% annually over the past three years.

Bob Rivinius, CBIA president, said that “a keen interest in making the best of these times” pushed up attendance at this year’s PCBC to 35,000, up from 29,000 in 2005.

NAHB President David Pressly noted a similar interest among home builders nationwide and he said that the association’s members are relying more heavily on networking, educational and advocacy opportunities to address affordability issues and deal with a diminution in production and sales.

Elimination of housing tax incentives, including the mortgage interest tax deduction, that were contained in proposals sent by an Administration commission to the Treasury last year, would put some dark clouds over the industry if they were enacted, Pressly said, particularly in California, where housing is so high-priced.

“We remain vigilant on these pernicious proposals,” he said, “but they won’t come up this year because of elections for Congress.”

Floor Plans: Suburban Home, Huge Pantry, Bay Window...No Plumbing

By today’s standards, “Suburban Home No. 2,” featured in the February 1871 issue of Manufacturer and Builder magazine, was remarkably inexpensive. At an estimated construction cost of $2,840, it was described as “a neat cottage designed for the accommodation of a small family.”

And if it was lacking in some things today’s buyers take for granted — like indoor plumbing — it also had some features that contemporary buyers would find very appealing.

A 4-foot by 9-foot bay window embellished with decorative woodwork was the focal point of the front elevation, the slate roof could be expected to provide decades of service, and the 9-foot ceilings on the main level lent volume and a sense of spaciousness to the admittedly small house. Perhaps the most appealing feature by today’s standards (as least among buyers who enjoy cooking) was the large, 8-foot by 12-foot pantry fitted out with closets, shelves, drawers, etc. — just about everything a gourmet cook would need.

At about 1,400 square feet, the home was significantly smaller than today’s typical new home, which averages 2,434 square feet. On the main level, it had an entry hall, a 12-foot by 16-foot sitting room and a 12-foot by 16-foot combined kitchen/living room in addition to the pantry.

Two 12-foot by 16-foot bedrooms and an 8-foot by 9-1/2-foot bedroom comprised the second floor, but the house had no bathrooms. Underlying the whole was a full basement accessed by the main staircase and served by a dumbwaiter located in the kitchen.

According to the architect’s estimates, the carpentry could be expected to cost a total of $1,777, which would cover 5,500 board feet of lumber, windows, doors, 230 flooring boards, paint, a variety of other materials and labor.

The mason’s work, which would include finishing all walls with a triple coat of plaster, was expected to cost $988. And the roofing, primarily slate with tin over the bay window and the veranda, was expected to cost $125.

In an interesting historical footnote, an Internet search for the home’s architect, Oscar S. Teale, reveals that this house was most likely one of his earlier designs. Teale later became known for designing churches. An avid amateur magician, Teale served as a pallbearer for Harry Houdini. He also designed the famed magician’s memorial.

Specifications & Features

House Dimensions

Total house: 17 feet x 27.5 feet with a 12.6-foot x 17-foot wing
Sitting room: 12 feet x 16 feet
Bay window: 4 feet x 9 feet
Kitchen and/or living room: 12 feet x 16 feet
Pantry: 8 feet x 12 feet
Bedrooms (2): 12 feet x 16 feet
Bedroom (1): 8 feet x 9.5 feet

House Features

Veranda
Entry hallway with hat closet
Bedroom closets with shelves, sink in each bedroom
Second floor linen closet
Coal cellar
Storage cellar

Design: Suburban Home No. 2
Architect: Oscar S. Teale

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Report Finds Wide Use of Home Owner Tax Preferences

In 2003, the average home mortgage interest deduction averaged $9,650 among the 35 million households who claimed it on their tax returns, and an average of $3,000 was reported by the 39 million who deducted their real estate taxes, making these two of the most widely used and important preferences in the federal tax code, according to a new NAHB study.

Using the most recent IRS data available, the report provides an in-depth analysis of the use of the mortgage interest and real estate deductions in each of the 435 congressional districts across the country.

Every state had at least one congressional district where a minimum of $259 million in mortgage interest and $43 million in real estate taxes were deducted in 2003, the report found.

“Because the mortgage interest and real estate deductions significantly reduce federal tax liabilities for home owners, they are important tools for promoting homeownership,” said Jerry Howard, executive vice president and CEO of NAHB. “The report shows that millions of working families across the nation use and depend upon these important tax incentives to help them maintain their current standard of living.”

According to the findings, the average congressional district had roughly 80,000 taxpayers who used the mortgage interest deduction and 88,000 families who deducted real estate taxes, illustrating the widespread use of these important middle-class tax preferences.

Nationwide, a total of $338 billion in home mortgage interest and $119 billion in real estate taxes were deducted in 2003.

Mortgage interest deductions were highest in areas with rapidly growing populations and expensive housing, such as California, where the deduction averaged roughly $14,000 per taxpayer, the highest of any state in the country. The deduction averaged about $35,000 per household in California’s 14th district — which encompasses parts of San Mateo, Santa Clara and Santa Cruz counties — and that was the highest amount locally.

In the six congressional districts where the most deductions were taken, all of which are in California, more than $15.5 billion in home mortgage interest was claimed. At the other end of the spectrum, the five congressional districts accounting for the smallest amounts of the deduction were all located in the New York City area, where renters exceed home owners by a wide margin.

About $64.9 billion in mortgage interest was deducted in California, followed by:

Higher real estate tax deductions occurred in areas with high home prices and tax rates:

In-depth economic analysis, key data and housing forecasts are available to subscribers of www.housingeconomics.com. Annual subscriptions start at $195 for NAHB members and $295 for non-members.

For more information, e-mail Liz Warin at NAHB, or call her at 800-368-5242 x8495.

Global Housing Boom May Cool Slowly, Avoiding a Crippling Bust

The biggest housing boom in three decades among industrialized nations appears to be headed for an extended whimper, but the odds of a debilitating bust in housing prices will rise should Federal Reserve Chairman Ben Bernanke and other central bankers feel compelled to lift rates sharply to fight inflation. Paul van den Noord, senior economist for the Organization for Economic Cooperation and Development, concluded in a paper last month that a one to two percentage point increase in interest rates would boost the chance of a home-price collapse in the U.S., France, Denmark, Ireland, New Zealand and Spain to 50% or more. But an extended period of stagnation rather than a bust is a more likely ending for the housing boom in the U.S., according to Richard Brown, chief economist at the Federal Deposit Insurance Corp. Historically, just 17% of local housing booms in the U.S. go bust, according to data collected by his agency, and that typically occurs only when local regions are under severe economic stress, such as Texas in the mid-1980s after a plunge in oil prices. In Australia and Britain, after rising at annual rates of 20% early this decade, housing prices leveled off as interest rates climbed, the economies slowed without falling into recession and now the markets are picking up. “Housing prices have been moving up slightly, but not particularly dramatically,” Bank of England Governor Mervyn King said on June 29. “The housing market is back to normal.” (www.bloomberg.com)
Bloomberg.com (7/3/06); Rick Miller and Simon Kennedy

Price Increases Migrating to Poorer Neighborhoods

A quarterly report on the housing market in the District of Columbia by the Urban Institute finds that housing prices are leveling off in affluent neighborhoods but escalating significantly — at an annual rate of 18% or 19% — in poorer areas. Housing construction in the city rose to a 40-year high last year, with 2,860 permits, an increase of nearly 50%. And in the first three months of this year, 1,327 permits were issued, up 135% over the same period last year. However, all of the homes under construction have been condominiums or apartments, as opposed to single-family housing, raising concerns that a continuation of current trends could lead to an imbalance in the housing supply favoring singles and childless couples. “We’re heading in a direction that maybe we want to stop and think about,” said Peter Tatian, a senior research associate at the institute. “If we’re not attracting families as well as singles and couples without children, we’re creating a population base that is not going to be as stable in many neighborhoods. People will come here and spend a few years, and when they decide to get married or start a family, they leave.” (www.washingtonpost.com)
Washington Post (6/28/06); Lyndsey Layton

The Price Is Right — Maybe

Uncertain about what price tag to put on their property, home sellers are using such non-traditional approaches to setting prices as starting high and cutting the figure every few weeks, dropping the price to a different bracket or giving a range of numbers rather than one set number. An advocate of “value range pricing,” Carlsbad, Calif. broker Carlton Lund says that his listings for almost a decade have come with a price spread of between 10%-12% and the approach has worked well as a way of widening the pool of buyers and getting them to the table. However, in research on 6,000 homes in Texas, Marcus Allen, a professor at Florida Atlantic University, has found that using a price range increases the amount of time it takes to sell a home by 5% without having any positive impact on the final price. Resorting to price brackets is an approach supported by a National Association of Realtors® study last year finding that eight out of 10 buyers begin searching for a home online, where price parameters are entered into search engines. Houston real-estate broker Melinda Noel says that the span often depends on the price. Buyers tend to look in $20,000 to $25,000 increments for homes under $500,000, in $50,000 increments for homes between $500,000 and $1 million, and in $250,000 increments over $1 million. She counsels sellers to set a price at the top of a break point, and then jump down a whole notch if the market doesn’t respond, say, from $749,000 to $699,000. “The goal is to hit the top of the market, without going over the edge,” she says. (www.wsj.com)
Wall Street Journal (6/30/06); June Fletcher

Cities Are Hot Again

In a recent teleconference of Coldwell Banker real estate brokers around the country, it was reported that retirees, empty nesters and young professionals are repopulating center cities. Continuing a trend that began in the late 1990s and reversing the post-war urban flight to the suburbs, the return to downtown is now strengthening. “I think it’s likely to continue for the next 15 years,” says John McIlwain, senior fellow for housing at the Urban Land Institute. “Boomers are aging and people think of cities as a good place to retire to, as well as to continue to work.” Avoiding increasingly longer commutes is part of the attraction. “For years people traded a commute for affordable housing,” says Jim Gillespie, CEO of Caldwell Banker, but the road construction has not kept up and the only escape from the traffic is a home in town. A reduction in crime has also brought people back, according to McIlwain. New York, for example, saw its crime drop by 75% from 1990 to 2005. That’s why recent statistics showing an upswing in violent crime are worrisome. Although crime was up only 2.5% nationally, it marked the first increase since 2001. Murders jumped 23% from 272 to 334 in Houston; from 330 to 377 in Philadelphia, a 14% rise; and 10%, from 131 to 144, in Las Vegas. If felonies spike, those considering relocating could hit the brakes pretty quickly. (www.cnnmoney.com)
CNNMoney.com (6/15/06); Les Christie

Selling Your Home in a Down Market

Advising home buyers that few large-scale remodeling projects pay for themselves when the home is eventually sold, Consumer Reports magazine does recommend some remodeling strategies aimed at improving sales in today’s cooling housing market. Improvements that protect a home from deterioration and damage, like roof replacements and plumbing and electrical upgrades, are always worthwhile, the magazine advises, because they will help preserve the home’s value. At the very least, prospective buyers will expect a good exterior paint job, and that may mean sprucing up the trim. Adding a swimming pool can decrease the selling price because of insurance and maintenance costs, and when it comes to improvements overall, home owners should keep up with the Joneses but not go them one better if they are concerned about recovering remodeling costs. Projects that merely update styles can help the house sell more quickly, if the home is being sold while the style is still popular. Otherwise, stick with the basics and avoid being overly trendy, the magazine says. If interior painting looks dirty or worn, repaint with neutral colors that provide potential home owners with a clean slate. Keep tables and countertops clean and clear, and remove extra furniture, which can be sent to a rented storage space if you don’t want to get rid of it. (www.consumerreports.org)
Consumer Reports (6/06)

Modular Doesn’t Mean Moderation

Although modular still accounts for less than 3% of new, single-family home building, the benefits of assembly-line-style construction are winning converts amid labor shortages and rising land and material costs. “There’s not much question that modular is the wave of the future,” said Don Carlson, who for 40 years has published Automated Building magazine. “They’re all overbuilt,” he says. “If you want to be some place in a hurricane or an earthquake, you want to be in a modular home.” Modular builders, developers, investors and consumers often have a story of surprise about their first experience with the housing. Russell Smith, a native of Rock Hill, N.C., said he was “blown away” 13 years ago when he toured factories and high-end modular homes. In business since 2000, his company now builds about 80 houses a year, and they are nearly all modular. He figures he could only do about half that without modular because it’s faster. But he says what really sells it is the strength and quality of the product. Modular has to be extra sturdy to withstand being jostled hundreds of miles down the road and then outfitted with slings and hoisted into place by a crane. Still facing skepticism from buyers, many modular builders are putting factory-built cost savings — which can be as much as 15% — into extra amenities. “We’re going into the finest neighborhoods and building modular next to site built,” said Smith. “We can’t just be competitive. We have to be better.” (www.charlotteobserver.com)
Charlotte Observer (6/29/06); Stella M. Hopkins

House-Passed Bill Would Strengthen Flood Insurance

Acting to bolster the National Flood Insurance Program (NFIP), the U.S. House of Representatives on June 26 voted 416-4 to approve H.R. 4973, the “Flood Insurance Reform and Modernization Act of 2006.” The measure would boost the program’s borrowing authority from $20.8 billion to $25 billion and would make other changes to reduce the need for future borrowing.

The Federal Emergency Management Agency (FEMA), which runs the NFIP, estimates it will need nearly $24 billion to pay off claims resulting from the devastation of Hurricanes Katrina and Rita last year.

In a letter of support prior to the House vote, NAHB said that H.R. 4973 “strikes the proper balance in protecting the NFIP’s long-term financial stability while ensuring that federally-backed flood insurance remains available and affordable.”

Addressing NAHB concerns, the measure retains the current 100-year floodplain and rejects mandatory purchase requirements for properties within the natural 100-year floodplain.

Instead, the legislation would commission the U.S. Comptroller General to review mandatory purchase requirements for the natural 100-year floodplain and home owners with non-federal loans. Coverage is currently mandatory for all federally backed loans.

Seeking to capitalize on the momentum of the House-passed bill, Senate Banking Committee Chairman Richard Shelby (R-Ala.) attempted to move his committee-passed flood insurance bill (S. 3589) to the Senate floor by unanimous consent.

Upon receiving notice of this action, NAHB sent a letter to the full chamber expressing concern over a mandatory purchase requirement for properties sited behind flood protection structures within the natural 100-year floodplain.

NAHB noted that this would penalize communities that have opted to install flood control structures by requiring residents who have already paid taxes for these facilities to purchase flood insurance.

Rather than taking such a broad approach, NAHB urged the Senate to first investigate how this action would affect property owners and local communities, and then to demonstrate that the increased premiums are necessary.

Ultimately, Shelby was not able to pass his bill under unanimous consent, allowing NAHB to continue advocacy efforts opposing the mandatory purchase provision.

As the Senate bill advances in the coming months, NAHB will continue to support reforms to ensure that federally-backed flood insurance remains available and affordable and that the NFIP is financially stable. At the same time, the association will continue to oppose the mandatory purchase provision.

Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage.

More than 20,000 communities nationwide participate in the NFIP and the program currently covers approximately 4.8 million policyholders.

To read the legislation, click here and enter H.R. 4973 or S. 3589 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.

Register today for the State and Local Government Affairs Conference, which will be held Nov. 9-11 at the Sheraton New Orleans.

Geared to staff members of home builders associations, buiilders and others who follow the legislative and regulatory issues shaping the nation's housing industry today in thousands of communities across the country, the conference features expert presentations and discussions. Participants receive an inside look at the intricate factors driving today's hot topics on the state and local fronts,including insights into how to work in the political process to build a strong consensus for housing.

U.S., Canada Trade Reps Sign Thorny Lumber Pact

U.S. Trade Representative Susan Schwab and Canadian Minister of International Trade David Emerson on July 1 initialed a text in Geneva that would govern softwood lumber imports. The treaty would require both countries to end all litigation efforts and impose a complex system of border taxes and quotas that would artificially boost lumber prices during periods of normal and slow demand and thereby harm housing affordability. In return, current duties now totaling about 11% on softwood lumber shipments into the U.S. would be eliminated.

The agreement is slated to last for at least seven years and as many as nine. NAHB’s analysis indicates that the pact could increase prices and may create bottlenecks as Canadian producers fight for limited market share.

With the official legal draft still being developed, the possibility remains that the pact will not be signed and implemented. The Canadian Parliament, which is out of session until September, must still approve the agreement and Canadian producers must agree to drop their litigation.

Canada has already achieved several unanimous victories before North American Free Trade Agreement (NAFTA) panels that have ruled that U.S. lumber producers are not threatened with injury from Canadian softwood lumber shipments. The verdicts call on the U.S. to rescind costly tariffs that boost housing costs and to refund to Canada the more than $5 billion in duties that have been collected.

The accord calls for the U.S. to return $4 billion in duties to Canada and would allow it to keep about $1 billion, half of which would go to the domestic lumber firms that originally brought suit against their Canadian competitors.

In order for the agreement to be enacted, at least 95% of the Canadian companies who currently have duties on deposit with the U.S. Customs Service must agree to end their litigation claims, forfeit a portion of their duties to the U.S. and abide by the terms of the accord.

Last month, NAHB testified before the Canadian Parliament urging lawmakers to reject the deal because it would force Canadian lumber producers to fight for a smaller U.S. market share, distort the marketplace and force American consumers to look elsewhere.

Faced with the prospect of new barriers to imports from Canada and increased volatility in supply and prices, Florida home builder Barry Rutenberg told Canadian lawmakers that NAHB feels obligated to facilitate softwood lumber imports from Europe and the use of alternative materials to protect the interests of American home builders and consumers.

Imports from other countries, while still much smaller than those from Canada, have grown rapidly in recent years, and lumber production in Europe is expanding. Imports from Canada grew 5.9% during the first four months of this year, at a time when total lumber shipments from other nations grew by 15.4%.

Rutenberg said that the best strategy for Canada to achieve free lumber trade and to receive a refund of all the duties that have been collected is to continue to pursue its legal cases through the North American Free Trade Agreement process, the World Trade Organization and the U.S. Court of International Trade. Ottawa has already received several unanimous legal victories in its quest to achieve these goals.

“Finishing the litigation would establish important precedents and make it much more difficult for the U.S. lumber coalition to successfully petition for new duties,” said Rutenberg. “We are very disappointed by the willingness of the Canadian government to sacrifice those gains, jeopardize Canada’s share in the U.S. market and effectively provide a handful of U.S. companies with veto power over provincial forest policies.”

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

Eye on the Economy: Housing Slowdown Has Distance to Run

An extended period of above-trend economic growth, along with associated shrinkage of slack in U.S. labor markets, has generated growing concern on the inflation front.

The Fed is increasingly worried about upward pressures on “core” inflation (excluding prices of food and energy) from tightening labor markets as well as from soaring energy prices that inevitably have been making their way into the core through business cost structures.

Core inflation readings for the first quarter of 2006 were reasonably well contained, at least on a year-over-year basis, although various measures definitely firmed up on a quarter-to-quarter basis. Furthermore, available data for April and May show further acceleration.

The core Consumer Price Index (CPI) definitely is on an upward path, showing year-over-year increases of 2.3% and 2.4% in April and May, respectively ― not far below our estimate of the upper bound of the Fed’s tolerance zone for this inflation measure (2.5%).

The technically superior chain-core CPI (allowing for substitution among goods and services in the market basket) also has been accelerating in recent months, posting a year-over-year gain of 2.2% in May.

Sizeable portions of the recent increases in core consumer price inflation represent large increases in the housing components of these inflation measures. The housing components, in turn, have been driven primarily by government imputations for “owners’ equivalent rent of primary residences.” This component accounts for 30% of the core CPI — it registered a 3.3% year-over-year gain in May ― and the annualized monthly gain was nearly 8%.

The surge in owners’ equivalent rent reflects rising rental rates that are not actually borne by the nation’s home owners, and a good case can be made to exclude this imputed component from the analysis of inflation trends.

Indeed, the upshift in rental rates is associated with the systematic weakening of single-family and condo markets that is being provoked by Federal Reserve rate hikes. That makes tighter monetary policy inflationary, a perverse effect that should be discounted by the Fed.

The Federal Reserve fully expects the housing market to cool down this year, partly in response to the series of rate increases it has implemented. Public statements by Fed officials characterize the evolving housing slowdown as “moderate” and “orderly” — a pattern consistent with NAHB’s baseline (most probable) forecast.

NAHB has been warning the Fed about large downsize risks to our respective baseline forecasts for housing. These risks are associated largely with major uncertainties regarding the behavior of investors/speculators that were such a major factor on the demand sides of single-family and condo markets in 2004-2005.

NAHB’s surveys of builders show deepening problems in the single-family market through June, including cancellations and resales by investors/speculators.

Ongoing erosion in single-family and condo markets also is shown by sales/price data for the existing-home market (from the National Association of Realtors®), and the weekly series on applications for mortgages to buy homes (from the Mortgage Bankers Association) still is rattling downward. We’re also seeing a distinct downslide in issuance of single-family building permits (data through May).

Conflicting (positive) signals are coming from the May data reported by the Commerce Department for both single-family housing starts and sales of new homes. The starts numbers were up by 2.1% in May and new-home sales were up by 4.6% — in the face of reports from public builders and NAHB’s surveys showing ongoing erosion of housing demand.

The conflicts in housing data apparently reflect, to a large measure, deficiencies in the government’s data collection procedures (particularly for new-home sales). It’s also clear, however, that a fair number of single-family starts recently have reflected building against permits backlogged earlier, and we also know that builders have been strengthening both price and non-price incentives to bolster new sales and limit cancellations of sales contracts signed earlier.

Everything considered, it’s fair to say that single-family and condo markets still are cooling down in fundamental ways and that the housing slowdown still has some distance to run.

NAHB’s forecast continues to show an 8% decline in total housing starts for 2006 as a whole, with relatively large reversals in the single-family and condo markets along with further firming-up of rental markets.

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

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

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: How to Center Your Ladder Load

After getting my new 32-foot aluminum extension ladder home, I struggled to haul it around the yard to complete a painting project. Whether using it as two separate 16-foot sections or as an extension ladder, I found it mighty awkward to carry.

Eventually, after much trial-and-error repositioning of the lifting point, I was able to pick up the ladder without one end digging into the ground.

I first separated the two sections of ladder and placed each section on a sawhorse, perpendicular to the crossbar.

I quickly found the balance points and marked them with a spray-painted fluorescent orange line across the side rails of each section.

Now when I pick up either section, I know that I am grabbing it exactly in the middle.

Best of all, when the sections are back together, the lines still act to indicate the center. No matter how far the ladder is extended, the lines on the sections are only a few feet apart. It is easy to eyeball the midpoint between the two lines and to grab the ladder at the midpoint every time.

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.

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.

Are Boomers Eager to Relive Their College Days?

No doubt, many boomers would like to turn back the clock and relive their college years. But there also are boomers who would prefer to be the age they are now and live in a college-affiliated community so they can continue to learn.

In one of the first surveys of its kind, 233 respondents ages 55-75 said that they liked the idea of living on a college campus in their retirement years.

In addition, 58% said they would like to live on or near a small college town campus; 62% said they would be “very interested” in taking courses together with traditional college students; and 46% said they preferred to own their own home in a college-affiliated community.

“In 20 years, there will be 70 million people over age 65 living in the U.S., and retirement lifestyles will be radically different from today,” said Gerard Badler, general manager of Campus Continuum, of Newton, Mass., which conducted the survey. Campus Continuum develops, markets and operates university-branded active adult communities that are integrated with their academic hosts.

Badler said there currently are only about 20 closely integrated campus-based communities across the country. He has spent the past several years crisscrossing the country meeting with college administrators and boards and said that the idea of campus-based communities for active adults was gaining popularity.

You’ll learn the shopping practices, opinions and attitudes of these customers.

Based on a study conducted by the NAHB Economics Department with funding from the Seniors Housing Council, this book provides convincing evifdence that boomers are on the verge of drastically changing the home building industry.

Mark your calendar for the 2007 50+ Housing Symposium. The 2007 seminar will be held May 30-June 1 in Denver. For more information, visit www.nahb.org/build4boomers.

Time to Start Planning for the 2006 Remodeling Show

Exhibitors and attendees, it’s time to plan for the 2006 Remodeling Show in Chicago on Oct. 18-21.

Hotel accommodations can be made through the show’s Web site at www.theremodelingshow.com. There are six hotels to choose from in the show’s hotel block, with rates starting at $129/night. The Palmer House is the "official" Remodelors™ Council hotel.

The results of the study enable remodelers to compare these key business statistics to see how the business practices of the most successful remodelers — the top 25% in terms of profitability — differ from those in the bottom 25%.

The study will encourage you to set your own benchmarks and incorporate them into your ongoing business plan.

Entries Sought for Systems-Building, Marketing Awards

Manufacturers, producers and vendors in the systems-built housing industry have until Sept. 15 to enter the annual Building Systems Councils’ Excellence in Marketing and Home Design Awards.

Categories for manufacturers and vendors/suppliers are open to active members of the Building Systems Councils and any NAHB member who is involved in using systems-built housing.

The winners of the awards will be announced during the council’s SHOWCASE conference and trade show on Nov. 5-8 in Miami, Fla.

The award program is the only national competition honoring achievement in the concrete, log, modular and panelized home building industries.

The Excellence in Marketing Award recognizes outstanding advertising, presentation of home plans and interactive media.

The Home Design Awards are given to both builders and manufacturers in each system-type in three size categories.

NAHB’s Building Systems Councils represent the manufacturers, builders and suppliers of the concrete, log, modular and panelized home industry. For more information, click here.

Registration is open for the Building Systems Council Showcase, which will be held Nov. 5-8 at the Doral Golf Resort & Spa in Miami, Fla.

How to Make Your Design Studio Profitable

Operating a design studio can be an intimidating prospect. If it’s handled poorly, the design studio won’t be profitable.

But when it’s done well, your design studio will be one of the smartest investments you can make ― both financially and from a customer satisfaction standpoint.

My company is often hired to salvage poorly operated studios. We’ve seen just about everything that can be done wrong and we've offered builders dozens of ways to increase the effectiveness and profitability of their studios.

If you want to enhance customer satisfaction and improve the effectiveness and profitability of your design studio, you should focus on making improvements to one — or, if need be, all — of the following fundamental aspects:

Your options list should not reflect everything you’ve priced out in the last five years, nor should it include every product your vendors have ever dropped off in your showroom. Your list should include a reasonable array of strong choices that will yield good results for you and your customers. It should not be overwhelming.

Why do we confront them with overly complex procedures; options lists that need an abbreviation-conversion chart or are presented in purchasing terms; price lists that require a degree in algebra to figure out a counter or flooring price; and unlabeled products?

Think about what adds frustration to the buyer’s experience and then spend the time and money required to make it easy for them to decide ― and buy.

Bring your buyers into a breathtaking and visually-stimulating design center. This will motivate them to create beauty in their new home.

Don’t confuse visually stimulating with overwhelming, however. Buyers don’t want to be in a room where they can see hundreds of choices all at once.

Instead, create comfortable zones with site lines encouraging discovery. Create an easy, natural flow of discovery that supports your process, rather than sabotages it. Think about proximities. Allocate the appropriate amount of floor space to match the return on your investment.

Finally, be sure to treat your buyers with the respect and gratitude that they deserve. Make them feel special. When you put them in the mood to buy, they will.

Jane Meagher is president of Success Strategies, a Manalapan, N.J.-based marketing firm that specializes in a unique menu of marketing and sales consulting services for home builders. Meagher is a recognized speaker who has lectured on market research, marketing and merchandising. She holds CMP (Certified New Home Marketing Professional) and MIRM (Member of the Institute of Residential Marketing) designations and has taught courses for both. For more information, e-mail Meagher, or visit her Web site at www.opt4success.net.

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:

You also can ask designation holders questions about obtaining a designation, specific courses, case studies and more. "Ask An Expert" is available on the NAHB Web site by clicking here.

Bill Webb, MIRM, shows you how to strengthen your selling game in “Sweet Success in New Home Sales,” available through BuilderBooks.com. This book provides powerful techniques for selling more homes and making more money while enjoying your professional life.

Trade Mission to Explore Niche Opportunities in Mexico

Loreto Bay, Baja California, Mexico is a growing vacation and retirement home area in Mexico that attracts buyers from the U.S. and Europe.

The $5.3 billion niche market for retirement and vacation homes in Mexico is growing and attracting U.S. and European buyers — particularly in the areas of Puerto Vallarta, Nayarit, Puerto Penasco, Los Cabos and San Felipe along Mexico’s Pacific Coast. It is also offering growing opportunities for U.S.-based home building companies.

To learn more about this market, NAHB International is organizing a trade mission for U.S. builders and others in the industry to Puerto Vallarta/Nayarit and development sites in the Banderas Bay area on Aug. 13-15.

Developers, builders, suppliers and other industry professionals will be able to explore business opportunities and meet with private developers, public officials and other industry players. The trade mission will also include site visits.

The trade mission will include private briefings with government and industry experts from FONATUR (Mexico’s Trust for Tourism Development), FIBBA, (Fideicomiso Bahia de Banderas), the Export-Import Bank of the U.S., the Overseas Private Investment Corporation and Stewart Title Guaranty de Mexico.

Participants also can schedule "one-on-one" meetings with builder/developer members of Mexico’s Construction Industry Chamber (CMIC).

To register, download and complete the registration form and e-mail it to Michael Boyce at NAHB (mboyce@nahb.com), or fax it to his attention at 202-266-8120.

Mexican Builders Learn More About Concrete Construction


	Mike Weber

Mexican builders learned about the benefits and sustainability of concrete home construction at Mexico’s first International Seminar on Sustainable Housing last month in Mexico City.

As part of the seminar, Mike Weber, president of NAHB’s Concrete Home Building Council, gave a presentation to the builders on the superior versatility and reliability of concrete over the traditional, wood-frame building methods used in the United States. Weber is also the director of residential construction for the Portland Cement Association.

Weber said he was “impressed by the home building efficiencies in the Mexican housing sector,” adding that concrete home construction in Mexico has already made many advances.

“Mexico’s builders don’t need to replace the way they build,” he said. “They only have to fine tune what they do.”

He stressed the need for Mexican builders to insulate new homes and suggested that they incorporate such technologies as energy-efficient windows, insulated concrete forms (ICFs) and other methods of concrete wall insulation.

“In the U.S., we have building codes that require certain amounts of insulation,” Weber said. “Such codes seem to be lacking in Mexico.”

Weber told the builders that incorporating insulation into construction would be “a real quick conversion” since many builders are already pouring concrete for multi-level homes.

“The biggest stumbling block is cost,” he said. “It’s going to take one of the leading builders to start incorporating insulation” to push the method into mainstream construction.

“It’s also a quality of life issue,” Weber added. “If someone wants a sustainable home in Mexico, using insulation will lessen the impact of increased energy demands while providing greater indoor comfort. If you plan to live in a home for more than five to seven years, then it makes sense to build with an insulated concrete wall system.”

Weber told the audience that the technology developed in the U.S. to grow the concrete home market is the same technology that can quickly be incorporated into the Mexican home building market. Incorporating concrete and insulation would “make Mexico’s building sector more sustainable,” he said.

The seminar was organized by CONAFOVI (Mexico’s housing commission) in conjunction with the World of Concrete Mexico 2006 conference held in mid-June.

'Concrete Systems for Homes and Low-Rise Construction ' Available at BuilderBooks

This one-stop resource was written by experts from the Portland Cement Association and includes more than 325 photos and illustrations.

Want to Know More About Designations? Ask an Expert

"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.

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.

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.

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.

To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in.

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.

NAHB Headquarters Garners Energy Star Designation


The National Housing Center

The National Housing Center, the headquarters building of NAHB, has earned a 2006 ENERGY STAR® designation for its focus on conserving natural resources while providing a comfortable and healthy environment for employees and visitors.

Located five blocks from the White House, the Housing Center now ranks in the top 25% of commercial buildings for energy performance, as recognized by the U.S. Environmental Protection Agency. In 2006, the building has far exceeded the minimum 75 rating for recognition in the Energy Star program, achieving an 86 out of 100.

“So many of our members build homes with appliances and heating and cooling systems that meet the ENERGY STAR guidelines. I’m delighted that NAHB’s own headquarters has again achieved this important designation,” said NAHB Executive Vice President and CEO Jerry Howard. The association also successfully applied for the designation in 2004.

A plaque recognizing the ENERGY STAR achievement will be posted near the building’s entrance.

NAHB was able to integrate energy-efficient features when it embarked upon a major project several years ago to renovate the 1972 building and expand it from five to nine floors. Since the building’s completion in 2002, building engineers have continued to fine-tune the details.

Transwestern Commercial Services, the Housing Center’s property managers, installed timing devices on many of the building’s lighting, cooling and heating systems — a common energy-saver in homes, but more difficult to regulate in a large public building. There are now sensor lights in the underground parking garage, a new system to regulate the building’s fan coil units, and a means of monitoring adjustments to the constant volume air system to smooth out office temperatures.

The building also meets the ENERGY STAR requirements for all indoor environment criteria, including the control of indoor air pollutants, adequate ventilation and illumination, and appropriate thermal conditions.

“The ENERGY STAR designation is another example of our continued efforts in the green building movement,” Howard said. “We all need to look for ways to save energy, and even if the means to achieve it in residential and commercial construction may differ, our ENERGY STAR designation is still an important milestone and a model for all of us.”

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

Mark your calendar for the 2007 National Green Building Conference, which will be held March 25-27 in St. Louis, and find out why a growing number of home builders are "Greening for the American Dream" by makiing cost-effective business decisions that also help the environment.

The conference will include educational sessions on construction, natural resource conservation, recycling, financing, marketing and more. Highlighting the conference will be a tour of green building projects in the St. Louis area.

EPA Effort to Regulate Urban Construction Dust Draws Fire

A U.S. Environmental Protection Agency proposal to establish a 24-hour “coarse particulate standard” focusing on dust emitted from construction activities in urban areas has run into opposition from the nation’s home builders.

If approved, the rule would add complicated, contradictory mandates at the job site for builders working in areas with a population of 100,000 or more.

The issue of “crustal fugitive dust emissions” — or common dirt — is based on the theory that sand and dust stirred up from construction sites is inherently more dangerous than dust from other sources, such as farming or even windstorms. NAHB sent comments to the agency opposing the proposal in April.

“There is no indication that coarse particle emissions from construction sites are any different than those emitted from agricultural or mining sites,” wrote Susan Asmus, NAHB’s staff vice president for the environment in the Labor Safety and Health advocacy group. Nor, the letter states, does any study cited by the agency show that urban dust is more of a risk than rural dust. “Finally, as proposed, the rule will present a series of implementation problems that will make it virtually unenforceable,” Asmus said.

NAHB has compiled a list of metropolitan areas (click here) with “non-attainment” status under the current rule. These are places that do not meet current particulate standards and that are more likely to be affected by more stringent rules. Areas on the list were responsible for almost 240,000 housing starts in 2004. Additional housing starts are likely to be affected by the proposed rule, but it’s too soon to tell how many metropolitan areas might move into non-attainment status.

EPA has cited studies showing a correlation between dusty urban air and hospital admission rates, even though its own staff members have agreed that the studies don’t conclude that the dust particles likely to affect one’s health only come from construction sites.

EPA also has cited a study showing that short-term exposure to coarse particulates has no effect on health and has used that finding to exempt some dust particles from the standard. “NAHB contends these same findings could also be used to justify exempting all sources of fugitive dust,” said Asmus. “EPA is urged to consider treating fugitive dust emissions as it treats the very similar dust from agricultural and mining operations.”

EPA already has regulatory agreements with the states that unusual amounts of dust and dirt in the air from droughts, windstorms and other weather-related events will not affect air quality measurements related to environmental action plans. If that dust is the same kind of dust raised during home construction, it should have a similar effect on air quality, NAHB argued.

“The uncertainties regarding the actual health impacts” and other weak arguments “place the agency on tenuous ground,” Asmus wrote.

Tougher dust control measures are certain to affect housing affordability. Home builders in metropolitan Phoenix already spend between $2,500 and $5,000 per unit on dust control measures, depending on mitigation efforts and the cost of the water used to dampen the site, said Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona. If the proposed rule is approved, “the cost of controlling dust on our sites will certainly go up — there is no doubt about that,” he said.

Kamps said his members support NAHB efforts to keep the proposed regulation at bay. “Of course there is dust at a construction site, but home builders are a very small portion of the problem — yet, we are the only group that’s regulated. There’s no way we’re going to reach attainment [of Clean Air Act standards] under the proposed rule because it’s even more restrictive than the existing rule, and agricultural and mining work are still exempt.”

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

NAHB, EPA Differ on Best Storm Water Compliance Approach

Judging from a June meeting of representatives from NAHB and the U.S. Environmental Protection Agency, the two groups have a long way to go to reach a consensus on the best way to increase compliance with storm water permitting regulations and make the program an easier, more comprehensible process for the nation’s home builders.

So far, EPA has rejected ideas submitted by NAHB to streamline the permitting program and improve enforcement and compliance, according to association staff members who have been working on this issue. Fortunately, a storm water permit reform bill continues to gain traction on Capitol Hill.

And in the meantime, the federal agency has reported that it is not getting much cooperation from its regional offices on launching its own pilot programs.

Participating in last month’s NAHB-hosted meeting were representatives from home builders associations in Maryland, Delaware and Virginia; Region 3 EPA officials; state environmental agencies; and EPA headquarters staff.

EPA invited speakers to the meeting to present several pilot possibilities modeled on successful partnerships in other areas of the country. One, Wisconsin’s Green Tier project, provides incentives for builders — including reduced enforcement and additional promotional opportunities — who go beyond what storm water permitting regulations require.

NAHB also presented its new Model Environmental Management System, an Excel-based CD tool that allows builders to target voluntary training programs and compliance procedures for storm water management and other environmental issues.

The federal regulators had other ideas, including the introduction of a “sustainability” aspect into the compliance program, which rankled Maryland State Builders Association executive officer Kathleen Maloney.

EPA would look at sustainability to set limits on the amount of home building that should be allowed in a particular geographic area, she said. “EPA’s goal is to address how much development the environment can sustain, and we are not interested in having that sort of debate with them. It’s not appropriate. Local jurisdictions already have a mandate to talk about sustainability through zoning and building codes.”

And the idea of starting a compliance pilot program in a region that already has good compliance rates — and in a state where the Department of Natural Resources has a storm water program that is “the Cadillac program of the country” — doesn’t make a lot of sense, she said.

“We don’t have a big compliance problem, but one of the biggest problems we do have is inconsistent enforcement,” added Stephen Lefevbre, executive officer of the HBA of Delaware. “EPA is left to make its own interpretation of how to enforce the Clean Water Act, and one inspector may have a different idea than another one."

According to Greenwire, an environmental issues publication, when the charge of inconsistency arose at a June 28 Senate hearing, Granta Nakayama, the EPA's chief enforcement official, said that geography, climate, economic conditions and industries require flexibility on the part of the agency. "We cannot dictate from Washington how every situation should be handled,” he said. “Different circumstances and different compliance strategies do not necessarily add up to unfair treatment."

Because it contains a higher percentage of wetlands than most states, Delaware is probably not a good place for a pilot program anyway, Lefevbre said. “We’re sort of trying to seek our solutions here in Delaware, but they aren’t necessarily appropriate in other states; we have wetland and environmental concerns that some other states don’t have.”

More importantly, he said, any new program ideas must primarily be based on good science. “You can institute best management practices and best available technologies, but after a few years you are not going to achieve any significant further reduction” in discharges, Lefebvre said. “We are working side by side with state environmental officials to build a compliance model that can be used in other watersheds, and these federal mandates are just a distraction.”

Maryland builders, too, expressed the hope that federal officials will rethink the pilot program. “Our next step is to sit down with our state officials and see how we can stave this off,” Maloney said. And while EPA is looking for volunteers for the pilot program, it is likely not going to be truly voluntary, she said. “EPA believes there is a compliance issue and they are going to implement the pilot program with or without us.”

Meanwhile, the NAHB-backed Stormwater Enforcement and Permitting Act now has 30 co-sponsors among members of the U.S. House of Representatives, and if passed, it would streamline the permit process for home builders, improve compliance and enhance environmental protection, NAHB President David Pressly said last month.

To read the legislation, click here and enter H.R. 5558 in the box at the center of the page.

'Storm Water Permitting: A Guide for Builders and Developers' Available at BuilderBooks.com

The publication has been prepared to help builders comply with the U.S. Environmental Protection Agency's storm water requirements, and includes information on state permitting programs and more than 50 of the most commonly used Best Management Practices. Also included are tips on compliance, including how to handle visits from inspectors.

Court Says Housing Must Follow Erosion Guidelines

The U.S. District Court has ruled against the Environmental Protection Agency and NAHB in a suit over whether the residential construction industry should be required to follow effluent limitation guidelines (ELG).

Not subject to these guidelines, home builders instead have been following stringent erosion and sediment control rules set by state and local authorities.

“NAHB is disappointed in the court’s decision,” said David Pressly, the association’s president. “NAHB agreed with EPA’s 2002 decision not to issue the guidelines because the data did not support their adoption and the duplicative regulation ends up being reflected in the price of a new home without offering additional protection for our nation’s waterways.”

While the decision will have no immediate impact on homes under construction, the stage has been set for a time-consuming round of proposals and counterproposals to adopt and implement the ELGs. NAHB intervened in the lawsuit, supporting EPA when the National Resources Defense Council sued over the agency’s decision.

Effluent limitation guidelines limit the amount of pollutants in wastewater discharges from specified industries, usually involving numerical limits for specific pollutants.

Sediment is the pollutant of greatest concern for home builders, and the industry will be forced to meet ELGs through a combination of approaches, such as silt fences, rock filters or the preservation of existing trees and grass — measures that builders and developers already use to meet existing regulations.

“We want to protect our environment and we are happy to offer our expertise, but I can think of more efficient ways to meet that goal than another layer of rulemaking,” Pressly said.

Additionally, new storm water rules under the National Pollution Discharge Elimination System have resulted in significant improvements in water quality and in the control of discharges of construction site storm water runoff.

All parties are still reviewing the case, so a decision on whether to appeal the court’s decision has not yet been made, Pressly said.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

Senators Explore Supreme Court Wetlands Decision

As legal experts, regulators and home builders continue to debate the ripple effects of the U.S. Supreme Court's recent decision to send the Rapanos and Carabell wetlands permitting lawsuits back to the circuit court, Tom Ward, NAHB’s assistant staff vice president for litigation, on June 29 told the Senate Environment and Public Works Committee that forcing the U.S. Army Corps of Engineers to make their wetlands rules more consistent could result in more environmentally sound land use decisions.

Ward — part of the NAHB team of staff, volunteers and consultants who worked on a friend of the court brief submitted last December — participated on a panel convened last week by the Senate committee to discuss the implications of the Supreme Court’s wetlands decision for the development community.

The panelists agreed that the court’s decision has helped to point up the confusion that continues to swirl over the definition of “navigable waters.” While the majority of justices indicated that they want to rein in the Corps’ broad interpretation of its regulatory jurisdiction, a final definition will likely encompass more than just navigable lakes and bays, rivers and the wetlands next to them.

Panelists told Senate staffers that ditches are a case in point. NAHB hopes that the Corps will study the majority opinions and stop trying to assert jurisdiction over man-made ditches that contain water only some of the time. Justice Antonin Scalia said that a ditch must have relatively permanent water to be considered, while Justice Anthony M. Kennedy said the ditch must have a “significant nexus” to a traditionally defined navigable water. Either way, the justices agreed, a hydrologic connection is no longer an acceptable way to assert jurisdiction over a ditch.

Because builders don’t want to spend the time and money it can take to work with the Corps to obtain a permit to build where the agency has jurisdiction, some choose to design developments that leave potential jurisdictional areas untouched, even if it results in less efficient land use, Ward said.

Cited by Ward was a Wilmington News Journal article explaining how the time, expense and uncertainty of federal permitting under the Corps have led some landowners to work around the ditches. “Dealing with the Corps of Engineers is so onerous, it actually leads to really poor site design,” said a wetlands consultant quoted in story.

NAHB staff and volunteers will continue to work with Congress and federal regulators and agencies toward more definitive guidance for home builders, Ward said.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

As litigation against home builders continues to clog the courts and drive up the costs of homeownership, how construction lawyers can help solve this challenge will be discussed during a two-day Construction Law Seminar in San Francisco on Sept. 7-8.

David Jaffe, NAHB staff vice president for construction liability and legal research, will be a panelist for a “Legal Challenges in Representation of the Home Builder” discussion on Sept. 7. Other panelists include Peter Reinhart, senior vice president and general counsel for Hovnanian Enterprises, Inc., and Brian Woram, senior vice president and chief legal officer for Centex Corporation.

In addition to the home builder-specific panel, the two-day seminar will also include topics such as insurance coverage, “additional insured” obligations, litigation defense strategies, class action litigation, the development of a thriving construction law practice and more. The seminar also will feature a “hands on” session constructing scaled mock-ups of actual building components.

The seminar is open to coverage attorneys, in-house counsel for construction or engineering firms, class action coordinating counsel, construction litigators, claims professionals, home builders and product manufacturers.

The seminar is being conducted by DRI, the Chicago-based national organization of defense trial lawyers and corporate counsel.

For more information about the seminar, click here. To read the seminar brochure online, click here.

Apply for 2007 Workforce Housing Awards

NAHB is now accepting entries for the Innovations in Workforce Housing Awards (IWHA) recognizing outstanding examples of workforce housing communities across the nation that provide decent and affordable homes for nurses, police officers, schoolteachers, retail workers and the like near areas in which they work

The awards also serve to increase awareness of the workforce housing challenge and the ground-breaking solutions implemented by the housing industry, while encouraging builders, developers and related professionals to incorporate such innovative solutions into their own projects.

“These awards bring national attention to the workforce housing problem and to the creative ways in which builders and developers are increasing the supply of housing that is affordable to working families,” said NAHB President David Pressly.

IWHA is open to builders, architects, designers, developers and land planners nationwide. Communities that have been completed, or in which the first model has been opened or the first unit has been occupied between Jan. 1, 2003 and Oct. 27, 2006, are eligible to enter.

Winning entries will be selected by a panel of builders, multifamily and land development experts and other industry professionals. Winners will be announced at the 2007 International Builders’ Show in Orlando, Fla. in February.

For more information on the awards, click here; or e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.

NAHB Meets With OSHA Head to Advance Construction Safety

In an ongoing effort to advance safety and health on the nation’s residential construction sites, representatives from NAHB met last month with Edwin G. Foulke, Jr., assistant secretary of labor for occupational safety and health.

Foulke was sworn in on April 3 to his post as head of the Occupational Safety and Health Administration (OSHA), which has a staff of more than 2,200 professionals and support personnel.

”Our primary goal was to meet and greet and to find out what he thought OSHA’s priorities would be,” said Vern Pottenger of Pottenger Builders in Beaufort, S.C., chair of the NAHB Construction Safety & Health Committee.

The good news for NAHB members, Pottenger said, is that Foulke is keenly interested in continuing OSHA’s successful alliance with the association, which has produced a number of successful safety training materials for the home building industry and increased the agency’s understanding of the differences between residential and commercial construction and how the two should be regulated.

“He was extremely excited about our training program, not only the one we do for our members, but the training we’re doing for inspectors and administrators, taking them to our job sites. They’ve beginning to understand the residential side of the business because of our efforts, and he’d like us to continue these.” (For a related NBN story, click here.)

The NAHB-OSHA Jobsite Safety Handbook, available at BuilderBooks.com, has been practically flying off the shelves and is now in its second printing. The guide and a training DVD are available in English and Spanish versions.

NAHB currently is working on a second safety DVD and handbook that will focus on fall hazards encountered during home construction and best work practices — such as ways to work safely on ladders — that can reduce the risk of accidents and lower injury rates.

Also being prepared is a home builders’ safety program manual that will outline the steps for developing and launching a safety management program.

Foulke also has accepted an invitation from NAHB to bring an OSHA team to next year’s show to staff a booth where builders can discuss safety and training issues with the experts.

“I think Mr. Foulke has a tremendously positive attitude, and a good vision of what his goals are and how they’ll come about,” Pottenger said. “Safety and health, of course, are primary, and we need to continue our full-force effort to make sure our builders and subcontractors understand how to do their jobs safely and in a productive manner.

“However, it’s important for OSHA to understand the vast differences between residential construction and the other industries it regulates, and Mr. Foulke complimented us on the work we’re doing to make those differences clear,” Pottenger said.

For more information on NAHB’s resources on construction safety and health, e-mail Rob Matuga, or call him at 800-368-5242 x8507.

The “Jobsite Safety Video,” available through BuilderBooks.com, is the first-ever job site safety video for home builders. The video 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.

Local HBA Pledges Support to HBI’s Project CRAFT

In an example of how the Home Builders Institute (HBI) is collaborating with local and state home builders associations to help students through internships, jobs and networking with members of the residential construction industry, the HBA of Middle Tennessee’s Metro Davidson Council took its monthly meeting in June to Project CRAFT/Nashville for a first-hand look at the trades training and placement program.

Project CRAFT (Community, Restitution and Apprenticeship-Focused Training) is recognized as a model for rehabilitating and reducing the recidivism of adjudicated youth. The program provides students with the trade and life skills needed to succeed in the building industry, while at the same time bringing new, well-trained talent into the workforce.

At the meeting, Davidson council members received a rundown of Project CRAFT’s activites from HBI Trustee Jerry Strebel and Project Coordinator J. D. Johnson, who emphasized the program’s role in addressing labor shortages in the Nashville area.

John Whitaker, president of the council, was impressed by what he learned and on behalf of his group, pledged support of Project CRAFT through jobs and career opportunities, letters, material donations and in-kind contributions.

“Until this meeting I was not aware that HBI existed or hosted its Project CRAFT program in Nashville,” said Buck Dozier, the local council member-at-large and a mayoral candidate. “The work they are doing is extremely helpful to the industry as well as the individuals that they serve.”

Project CRAFT Nashville is being funded by the Department of Labor's Reintegration of Youth Offenders through this year.

HBI, the educational arm of NAHB, currently operates Project CRAFT in Nashville and Jackson, Miss., and at six sites in Florida.

For more information on Project CRAFT, e-mail Dennis Torbett, or call him at 800-795-7955 x8908.

EIFS Covered by General Liability Insurance Program

Leading manufacturers like Dryvit Systems, Inc. are helping to promote an innovative program that enables home builders to use EIFS as a cladding option for their homes without having to worry about general liability.

Under the general liability insurance program, the American Wholesale Insurance Group (AmWINS), a California-based wholesale insurer, is able to offer residential EIFS coverage directly to EIFs applicators, who can then indemnify the builder and the home owner through the policy. The program is backed by an A-XV rated principal carrier.

“We are extremely pleased to offer this program to EIFS contractors who are listed by an acceptable manufacturer,” said Jill Bay, vice president and program manager for AmWINS. “We recognize that there is a void in the EIFS residential insurance market, and we are pleased to be able to fill it.”

From the builder’s perspective, the AmWINS EIFS endorsement is extremely easy to access, according to Dryvit. The EIFS applicator obtains the policy, and then for as little as $350 per project, the applicator can add the builder to it. The original home owner can be similarly indemnified.

Because it is a per-project, pay-as-you-go plan, builders can participate without having to change existing insurance carrier relationships. The policy is a simple rider and acts in tandem with other coverage.

A critical component of the policy is a three-stage EIFS inspection process that is performed at appropriate stages during the EIFS application to the home.

The inspections ensure that the building envelope is properly prepared and that the EIFS is applied according to manufacturer’s specifications, which is a critical element to any cladding installation, according to Dryvit.

More information can be obtained from AmWINS and its nationwide network of 28,000 brokers, or from Dryvit Systems, the nation's leading manufacturer of EIFS.

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 Week

The NAHB Production Group produces four weekly television shows on HGTV and DIY for consumers. The following is this week's lineup:

HGTV is seeking developers, builders and architects to create the 2008 and 2009 dream homes for the network’s Dream Home Sweepstakes. To learn more, click here.

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.

Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB.

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.

Construction Scholar Sets Her Sights on Non-Profit Housing


	Ashley Bastian, endowment scholar at Utah Valley State College

Ashley Bastian, a sophomore majoring in construction management at Utah Valley State College, in Orem, Utah, hopes to one day start a non-profit housing organization that provides home buying assistance to the disadvantaged and builds safe houses for parents and children in abusive situations.

For the 2005-2006 academic year, Bastian was the recipient of three scholarships through the National Housing Endowment ― the Centex Build Your Future Scholarship, the Lee S. Evans Scholarship and the Herman J. Smith Scholarship.

Bastian maintains a 3.67 grade point average and is the president of her Associated General Contractors chapter and the secretary of the Utah Valley Home Builders Association Student Chapter.

Bastian also volunteers at a local elementary school and with Habitat for Humanity, and she and her husband, Scott, a civil engineer, have a young son Blake.

Through her college field work, Bastian has gained experience as an assistant project manager with duties that have included closing out projects, monitoring job sites, weekly project reporting, maintaining submittals and transmittals and rotating plans to subcontractors. She has also helped build a home, assisting with flat and foundation work and frame and finish carpentry.

“I am so grateful to the National Housing Endowment and the donors who have made these scholarships possible,” said Bastian. “These funds have provided much needed relief to me and my family and will help me complete my career goals.

“I have used the scholarships to help prepare myself through leadership opportunities and vocational training,” Bastian continued. “I look forward to implementing the excellent techniques and methods of construction management that I have learned in my education.”

The endowment, the philanthropic arm of NAHB, administers four scholarship programs and awards more than $300,000 each year to students pursuing careers in residential construction and related fields.

Fall Board Meets Sept. 13-17 in Salt Lake City

OFFICIAL MEETING NOTICE OF
THE NATIONAL ASSOCIATION OF HOME BUILDERS
BOARD OF DIRECTORS

The following schedule of events is a partial listing provided as a notice for the upcoming NAHB Fall Board of Directors Meeting, which will be held in Salt Lake City on Sept. 13-17, 2006. Meetings will be held at the Grand America and Little America hotels. The fall board program will identify the exact time and place of each scheduled meeting.

Subcommittees, Task Forces, Working Groups Meetings
National Vice Presidents
State Representatives
Executive Board Meeting

Thursday, Sept. 14

Committees, Subcommittees and Councils Meetings
Past Presidents’ Council
National Housing Center Board of Governors
2006 Leadership Meeting (TBC)

Friday, Sept. 15

Committees, Subcommittees and Councils Meetings
2006 Presidential Advisor Meeting
Budget & Finance Committee
Nominations Committee
National Housing Endowment
Resolutions Committee

Saturday, Sept. 16

Area Caucuses 1-15
Joint Executive Board, Budget & Resolutions Committee Meeting
Board of Directors

Sunday, Sept. 17

Board of Directors Meeting

For more information, e-mail Cynthia McKinley Brown at NAHB, or call her at 800-368-5242 x8346.

GM $500 Exclusive Offer for NAHB Members

During 2006, qualifying NAHB members are eligible for a $500 offer on most GM vehicles.

Throughout 2006, qualifying NAHB members are eligible for a $500 exclusive offer on most GM passenger cars, light-duty trucks, vans and SUVs.

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.

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.

Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB.

Find Key Employees Through the NAHB Online Career Center

NAHB is hosting an online building industry-oriented career center that provides members with a cost-effective recruiting solution that makes locating qualified candidates and advertising open positions faster and easier.

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 was created in collaboration with ConstructionJobs.com, a leading employment resource for the construction, design and building industries.

Nation’s Building News readers can visit the site by using the NAHB Career Center tab at the bottom of the issue’s headlines, or by going to the NAHB Web site or www.nahb.org/careers.

Calendar of Events

To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in.

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.

Nation's Building News Online: July 3, 2006

Buyers Market in California Likely to Be Short-Lived

Floor Plans: Suburban Home, Huge Pantry, Bay Window...No Plumbing

Share Nation's Building News With Your Staff — It's Free

Nation's Building News Will Not Be Published July 10

Report Finds Wide Use of Home Owner Tax Preferences

Global Housing Boom May Cool Slowly, Avoiding a Crippling Bust

Price Increases Migrating to Poorer Neighborhoods

The Price Is Right — Maybe

Cities Are Hot Again

Selling Your Home in a Down Market

Modular Doesn’t Mean Moderation

House-Passed Bill Would Strengthen Flood Insurance

U.S., Canada Trade Reps Sign Thorny Lumber Pact

Eye on the Economy: Housing Slowdown Has Distance to Run

Builder's Tip: How to Center Your Ladder Load

Are Boomers Eager to Relive Their College Days?

Time to Start Planning for the 2006 Remodeling Show

Entries Sought for Systems-Building, Marketing Awards

How to Make Your Design Studio Profitable

Trade Mission to Explore Niche Opportunities in Mexico

Mexican Builders Learn More About Concrete Construction

Want to Know More About Designations? Ask an Expert

Education Calendar

NAHB Headquarters Garners Energy Star Designation

EPA Effort to Regulate Urban Construction Dust Draws Fire

NAHB, EPA Differ on Best Storm Water Compliance Approach

Court Says Housing Must Follow Erosion Guidelines

Senators Explore Supreme Court Wetlands Decision

Register for Upcoming Construction Law Seminar

Apply for 2007 Workforce Housing Awards

NAHB Meets With OSHA Head to Advance Construction Safety

Local HBA Pledges Support to HBI’s Project CRAFT

EIFS Covered by General Liability Insurance Program

NAHB-Produced Programs on HGTV & DIY This Week

Construction Scholar Sets Her Sights on Non-Profit Housing

Fall Board Meets Sept. 13-17 in Salt Lake City

GM $500 Exclusive Offer for NAHB Members

Find Key Employees Through the NAHB Online Career Center

Calendar of Events