Nation's Building News Online: July 17, 2006Print All Articles Text Version |
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Too Much Fed Tightening Could Jar Soft Housing LandingWith boom times starting to fade, the nation’s housing industry appears headed for a soft landing, but the Federal Reserve could inject some unexpected turbulence into the unwinding process now underway if it becomes overly aggressive in its inflation fighting efforts, according to panelists participating in a July 11 NAHB teleconference on the mid-year economic outlook. NAHB Chief Economist David Seiders said that he has alerted the Fed to the downside risks for housing if interest rates are pushed up too far. The Fed’s mission of clamping down on inflation before it gets out of control is already having results, he said, with growth of the Gross Domestic Product slowing in the second quarter and the unemployment rate stabilizing and poised to inch upward in the period ahead. Ironically, by helping to slow home buying demand the Fed’s policies have created upward pressure on market rents and that is driving up the “owners’ equivalent rent" components of the core inflation measures the central bank has been watching hawkishly. With the federal funds rate now at a “slightly restrictive” 5.25%, Seiders said, “our hope and expectation is that the Fed has gone far enough and will stop here and eventually feel the need to ease back a bit to 5% by the end of next year,” when core inflation most likely will be receding “a bit.” For the time being, at least, Seiders said that interest rates for both fixed- and adjustable-rate home mortgages “look remarkably peaceful” and won’t move up much further. David Berson, chief economist for Fannie Mae, said that he expected one more round of Fed tightening this year, bringing the federal funds rate to 5.5%. Then, if economic growth remains subpar, there could be some easing in 2007, he said. However, he also noted that there is a near-term risk of more Fed tightening. If the Fed is at or near the end of its interest rate hikes, then interest rates on fixed-rate mortgages should remain below 7% by the end of this year, and average 6.8% this year and next, he said. Berson also noted that mortgage rates remain at relatively low levels and even if they do rise to 7%, as some are predicting, “the difference between 6.8% and 7% will only affect affordability modestly.” Berson said that he expects economic growth to fall a bit below the 3.5% trend line for the balance of this year and 2007. New home sales should decline 9% to 10% this year, he said, primarily because investors are abandoning the hot markets on the East and West coasts. Home price appreciation is headed down this year, Berson said, and he expects to see it slow to an annual rate of 3% from the fourth quarter of 2005 to the fourth quarter of last year, which would move it down to an inflation-adjusted rate of increase of about 1%. Seiders said he is expecting to see real increases in home prices slow to a 2% annual pace by late next year, down from about 10% at their peak in last year’s third quarter, but he foresees no “national house price decline despite complications in certain markets.” “There is a risk over the next year or two that we could see real home price declines,” said Berson, “but it would be a stretch to get there.” Families Face Higher Loan Payments While rising mortgage interest rates are less of a problem for home buyers than high prices, Frank Nothaft, chief economist for Freddie Mac, said that higher financing costs will have repercussions for home owners with adjustable-rate mortgages that are being reset. “There will be a significant number of families making higher loan payments,” Nothaft said. About $500 billion in first lien ARMs will reset this year, he said, which is roughly 6% of all outstanding mortgage debt on single-family homes, and the amount will approach $690 billion in 2007. Factoring in home equity lines of credit and second liens, there will be repricing on $1.2 trillion of single-family mortgage debt this year, or 15% of the total $9 trillion outstanding. Whether higher loan payments for existing home owners turn problematic depends greatly on individual family circumstances, Nothaft said. Two-thirds of delinquencies stem from “something unforeseen and unfortunate,” he said, such as unemployment or a death or illness in the family. Markets in localities that are experiencing recessions have the highest default rates, and areas of the country fitting that description are currently limited to parts of Michigan, Iowa, Ohio and Pennsylvania, he said. The volume of single-family mortgage originations will decline 12% this year, Nothaft said, almost entirely because of a decline in refinancing. From a 50% share of originations in previous years, when the amount of lending set records, refinancings slipped to a share in the mid-40% range during the first quarter of this year; have dipped to about a 40% share now; and are headed down to about 30% by the end of this year, he said. During this year’s first half, 90% of home owners refinancing their mortgages took cash out, he said, compared to only 20% in 2003. And although levels of cash-out home equity extraction will be “solid” this year, it will be less than in 2005, “reducing the impetus to consumer spending.” Single-family mortgage debt is well protected in relation to the total value of the housing stock, he pointed out, with home owners having $11.4 trillion in equity on housing worth a total of $20.4 trillion. New Program Teaches English to Hispanic Construction WorkersA new educational resource from Home Builders Institute (HBI), the workforce development arm of NAHB, will help home builders improve their communications with Spanish-speaking workers. Sed de Saber™ (“Thirst for Knowledge”) — Home Builders Edition is being developed in partnership with Retention Education, LLC, as an English as a Second Language (ESL) learning tool for the residential construction industry. It includes seven self-paced, interactive books that use Leap Frog Enterprise, Inc.™ technology to teach workers 500 vocabulary words and more than 340 phrases commonly used in home building. “With an estimated 2.4 million Hispanic workers fueling the nation’s home building industry, the Home Builders Edition of Sed de Saber™ represents an enormous opportunity for home builders to recruit and retain skilled workers, fortify business relationships, increase efficiency and employee loyalty and promote job site safety,” said Michael Sivage, a builder/developer from Albuquerque, N.M. and HBI chairman. "Those employees who don't speak English need something to help them understand basic construction terms," said Tommie Harendt, president of Tommie Harendt Construction Inc. in Abilene, Texas. "Anything that we do that helps break the language barrier is going to benefit our companies, the employees and the home building industry," said Harendt, who is president of the Big County Home Builders Association. The program takes about 16 weeks to complete and includes an assessment tool to gauge progress at set intervals. Each kit is reusable and can be shared among workers and their families and friends. “This is a breakthrough ESL tool that offers our industry a tailor-made solution to language barriers typically found on residential construction job sites nationwide,” added Sivage. A team of experts from the home building industry is being consulted to ensure that the material is accurate and relevant to daily activities and interactions on the job site. Based on proven learning methods developed and supported by the U.S. Department of Labor and the U.S. Department of Education, the program also teaches language skills to facilitate such everyday activities as parent-teacher conferences, visiting the doctor and finding addresses. “Retention Education has partnered with HBI to produce the most relevant, effective and specific language learning program available to the home building community,” said Bill Groux, the company’s founder and chief executive officer. “Sed de Saber™ — Home Builders Edition is being created by home builders, for home builders, to foster better communication on the job site and empower users to advance their fluency in English and improve their lives.” The kit also includes a Quantum Pad™, microphone learning system, data cartridges, headset, power adapter and carrying case. HBI is now accepting pre-orders for the kits, at $395 each, for delivery in February 2007. For more information, e-mail Ashley Mills at HBI, or call her at 800-795-7955 x8926. 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. In Land of Giants, Smallest Houses Larger Than EverIn the Washington, D.C. market, the 1,400-square-foot, three-bedroom townhouse once thought of as the “starter home” has all but vanished, or at least expanded beyond recognition. In Fairfax County, Va., the median size of new townhouses is nearly 1,900 square feet, larger than the median size of a single-family house built in the county in 1970, and the median size of a new single-family home in the county has more than doubled to more than 3,700 square feet. At a time when the average household size is declining, the virtual disappearance of smaller new homes goes to the heart of the region’s housing affordability crisis. “The only way to make housing more affordable is to make housing units smaller,” said Stephen S. Fuller, director of George Mason University’s Center for Regional Analysis. Some builders say they would like to build smaller houses, but that sky-high land prices, restrictive zoning and neighbors opposed to higher-density housing make this difficult. “We’re only designing for 20% of the population right now,” said architect Christian Lessard. “That can’t last. As a society, we’ll have a problem because eventually no one’s going to be able to afford this other stuff.” But many in the industry believe that Americans don’t want less space and that first-time buyers would rather stretch their price limit or delay buying. “The answer is simple: the consumer doesn’t want it,” said Gopal Ahluwalia, vice president of research at NAHB. “The consumer is convinced that bigger is better.” (www.washingtonpost.com)
Piggybacking Onto TroubleA policy change at Standard & Poor’s effectively requires lenders selling piggyback loans into secondary mortgage market bond pools to purchase substantial additional credit enhancements — which is likely to raise interest rates and fees for some home buyers this summer, according to mortgage experts, and could reduce the volume and availability of piggyback programs overall. Under a piggyback arrangement, the borrower takes out one traditional mortgage for 80% of the property value and simultaneously obtains a second lien for a portion or all of the balance, and avoids private mortgage insurance premiums. With their low cash requirements and often generous credit standards, piggybacks have become highly popular among home buyers, especially in high-cost areas, during the past several years, quadrupling their market share from 2001 to 2004, according to SMR Research Corp. In a sample of loans in California markets, according to SMR, the percentage of piggybacks exceeded 60% in some cases. Kyle Beauchamp, a credit analyst for Standard & Poor’s, says that an exhaustive study of the performance of piggyback loans found them 43% to 50% more likely to go into default than comparable stand-alone first-lien purchase transactions. One reason is that many of the second liens have been floating-rate home equity credit lines tied to short-term interest rate movements. (www.washingtonpost.com)
Plants, Grass on the Rooftop? No Longer an Oddity.Chicago’s City Council has announced a pilot program that will provide up to $100,000 in matching funds for developers who retrofit existing downtown buildings with green roofs, out of a $500,000 pool of financing. Last year, the city began awarding $5,000 grants to small projects, many residential, and the city has started requiring green roofs on new buildings that receive city financing. More than 200 green roofs have been constructed in Chicago or are under way, covering 2-1/2 million square feet of tar with plants, by far the most of any American city. In a recent survey by Green Roofs for Healthy Cities, Chicago was followed by Washington, D.C. and Suitland, Md. (home of a huge green-topped National Oceanic and Atmospheric Administration building) in green-roof square footage. But the amount of space is increasing rapidly — up 80% in the U.S. between 2004 and 2005. It is often twice as expensive to install a green roof, though experts say that’s usually recouped through the roof’s 40- or 50-year life span (compared to a typical 20 or 25 years) and energy savings for the building. And some buildings aren’t designed for the additional load, even a few inches of lightweight soil. In Chicago, there are green roofs on the Apple store, a Target and a McDonald’s, and a soon-to-open Wal-Mart will have one, the first for the company. Nationally, green roofs grace the Gap headquarters in San Bruno, Calif.; a Ford Motor plant in Dearborn, Mich.; and the American Society of Landscape Architects building in Washington. (www.csmonitor.com)
Medical Legend to Build Master-Planned Community Focused on Living Healthy LifestyleConstruction is expected to begin in September on a 512-acre, master-planned community just outside of Dallas valued at upwards of $1 billion. The nation’s first luxury residential community to totally focus on health and wellness, Cooper Life at Craig Ranch will be anchored by the existing 75,000-square-foot Cooper Aerobics Center, a cardio and strength-training center and spa. Homes in the community will include single-family cottages, town homes, brownstones, row houses and mid-rise condominiums. The plans were announced by Dr. Kenneth H. Cooper, who coined the term “aerobics” in his first best seller in 1968. Cooper Life will integrate the doctor’s principles of wellness into every aspect of its residents’ daily lives and will likely cater to residents between the ages of 40 and 65 who are “very active,” according to Rusty Criminger, sales and marketing director of development partner Wellstone Communities. “They’re drawn to fitness,” he said. “A dietician or personal trainer may come knocking on their door.” Residents will have easy access to outdoor exercise and stretching areas, nature trails, gardens, parks and winding streams. (www.multi-housingnews.com)
Weight Loss Plan: I’ll Mow Your Lawn for FreeRealizing that he needed to lose weight and having trouble keeping to an exercise program, Darrell Nelson, a resident of the Minneapolis-St. Paul area, posted a listing on the Craig’s List Web site advertising free lawn mowing services. Weighting 258 pounds, the 5-foot, 9-inch former power lifter was aiming to lose 30 pounds by eating healthier and mowing five or so lawns a week, an hour per lawn. He said his ideal weight-loss goal was 50 pounds. Nelson has received plenty of responses, including many from news producers asking for interviews, and the offer of a new lawn mower for an appearance in an ad for some hardware stores. “This is just insane, this has turned upside down,” he said on the day before he was scheduled to appear on “The Early Show” on CBS. “I’m in an onslaught of phone calls….I never anticipated what this has turned into. I have to lose weight now. I cannot fail, now that this has gotten this big. I’m getting my 15 minutes of fame and didn’t expect it. I just wanted to lose weight.” (www.startribune.com)
Garages Motor to New Heights“The garage is the new frontier,” says Barry Izsak, author of “Organize Your Garage in No Time. “Everyone is getting in on the action,” he says, and it was only a matter of time. “The average American two-car garage had become the no-car garage. Ironically, the room in the house that has its door open to the world every day is the most unsightly. It’s the family dumping ground, the place to put something we don’t know what to do with.” According to NAHB, there are 65 million garages in the U.S., and demand for bigger ones is growing by the day. There are now more than 500 businesses that specialize in organizing garages, twice as many as in 2000, according to the National Association of Professional Organizers, which represents an industry that generates sales of more than $800 million a year in general organizational products. Although it is possible to spend tens of thousands of dollars redoing the garage, Home Depot reports that the average garage makeover purchase runs about $500. Julie Morgenstern, author of “Organizing From the Inside Out,” attributes the newfound love of garages to “lightening up” by organizing and to investing in real estate. Money spent on kitchens, bathrooms and garages, says Carl Zinn, a real estate developer from Sherwood, Minn., you’ll get back. (www.usatoday.com)
Property Rights Bill Moves Forward in the HousePrivate property owners on July 12 moved one step closer to being able to have their claims heard in federal court in a timely manner as H.R. 4772, the "Private Property Rights Implementation Act of 2005," cleared the House Judiciary Committee by voice vote. "Moving this legislation forward represents an important victory for property owners, who will, under this bill, be able to hold government accountable when their actions violate our constitutionally-guaranteed property rights," said NAHB President David Pressly. Under current law, property owners are required to litigate their case in state court before a federal court will rule on a Fifth Amendment takings claim. However, bringing the case to state court and having a takings claim heard (even under state law) precludes a review by the federal courts. As a result, property owners can never have their Fifth Amendment takings cases heard in federal court. By contrast, all other civil rights cases can be brought directly to federal court. For example, an adult book store owner who challenges a municipal land-use regulation based on the First Amendment's free speech protection has direct access to federal court, while a property owner challenging the same regulation but raising a Fifth Amendment takings claim does not. Introduced by Reps. Steve Chabot (R-Ohio) and Bart Gordon (D-Tenn.), the bipartisan legislation would restore the protections offered under the Fifth Amendment to property owners. "I am familiar with the often long and costly process involved in resolving land use claims," said Frank Kottschade, a builder/developer from Rochester, Minn. who testified before Congress last month in support of H.R. 4772. "We shouldn't have to pay bundles of money to attorneys and spend years languishing in limbo hoping that some day we will have the right to have the merits of a takings claim heard in federal court," Kottschade said. "NAHB should be commended in taking the lead to help advance H.R. 4772, which would help many private property owners in this country gain the access to the justice to which they are entitled under the Bill of Rights." Pressly noted that the legislation is sorely needed following a spate of cases where municipalities have taken advantage of the current legal system and sought to dissuade property owners from filing takings claims, even in state court. Municipalities that are sued in state court are moving takings cases to federal court, which they can do under a 1997 Supreme Court ruling in the case of City of Chicago v. International College of Surgeons. However, once in federal court, the municipality has the case dismissed because the property owner did not first litigate the case in state court — even though it was the municipality that transferred the case to federal court in the first place. "The Fifth Amendment of the U.S. Constitution clearly guarantees the citizens of America the right to own property and the right to receive just compensation when that property is taken by their government," said Pressly. "Americans should not be put through the judicial wringer only to learn that the federal courts have abdicated their traditional role as guardians of the Constitution." Following last summer's Supreme Court decision in Kelo v. City of New London, in which the court ruled that government entities can condemn any property in the name of "economic development," the House Judiciary Committee took decisive action by approving H.R. 4128, the "Private Property Rights Protection Act of 2005." The bill would allow the victims of eminent domain abuse to bring a private right of action in federal or state court. "Unfortunately, in the property rights arena, misuse of eminent domain powers is not the only abuse of our Fifth Amendment protections. Property owners who are victims of an unconstitutional regulatory taking also deserve access to federal court," said Pressly. "H.R. 4772 does not provide special access to the courts for those with Fifth Amendment claims; it simply puts them on a level playing field with others who are asserting their constitutional rights," Pressly added. "We urge the full House to act promptly to pass this judicial reform bill and call on the Senate to introduce companion legislation." To read legislation, click here and enter the bill number in the box at the center of the page. For more information, e-mail J.P. Delmore at NAHB, or call him at 800-368-5242 x8412. Eye on the Economy: Fed May Put Future Rate Hikes on HoldGDP growth definitely slowed down in the second quarter, and we’re now estimating a below-trend 2.7% pace. Furthermore, we expect growth to hang around 3% during the second half of this year and in 2007, a modestly below-trend pace that will restore a bit of slack to resource markets, particularly the labor market. We’re viewing the 2006-2007 slowdown as a healthy mid-cycle correction that should lead to more years of sustainable growth without recession. Housing is serving as a major swing factor in the evolving economic growth saga. Residential fixed investment (RFI) was a major engine of economic growth during the 2002-2005 period. However, RFI made relatively small contributions to GDP growth in both the final quarter of 2005 and the first quarter of 2006, and RFI growth definitely swung into the negative zone in the second quarter of this year. We expect RFI to continue to erode through early 2007, but much of the negative impact on GDP should be offset by strong growth in investment outlays by businesses as well as by improving net exports. Employment Growth Is Slowing Toward Trend
Three years of average above-trend GDP growth generated solid growth in employment and systematically reduced the degree of slack in U.S. labor markets — demonstrated by a falling unemployment rate from the cyclical high in mid-2003 to an expansion low of 4.6% in both May and June. The evolving (and projected) slowdown in GDP growth should prevent the unemployment rate from falling further, and NAHB’s forecast shows an upward drift during the second half of this year and in 2007. The payroll employment survey for June showed a net gain of only 121,000 jobs — there was a modest decline in construction employment — and the average monthly gain for the second quarter came to only 108,000. That’s an annualized gain of roughly 1%, a bit below sustainable trend growth, and our forecast shows payroll employment growth in that range for the next six quarters. Growth of average hourly earnings accelerated in June, despite the slowdown in payroll employment growth, adding to concerns about gathering upward pressures on prices of goods and services produced in the U.S. economy. Indeed, average hourly earnings for June were up by 3.9% on a year-over-year basis, and the three-month annualized increase came to 4.7% — one of the largest increases in the past decade. Inflation Continues to Firm Up, Aggravating Our Central Bank The 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 has been 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 showed further acceleration. The core Consumer Price Index 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 Fed’s favorite inflation gauge, the core price index for personal consumption expenditures (PCE), has also been elevated in recent months. The year-over-year rise in May was 2.1%, the same as in April, but the annualized gains over the past one, three and six months were well above our estimate of the upper bound of the Fed’s tolerance range for this measure (2.0%). For a central bank preoccupied with containment of inflation pressures, the acceleration demonstrated by the core PCE price index has been quite troublesome. The Fed Hikes Rates Again, But May Now Go on Hold The Federal Reserve implemented another quarter-point hike in short-term interest rates at the conclusion of the June 29 meeting of the Federal Open Market Committee (FOMC), raising the federal funds rate target to 5.25% and taking the bank prime rate to 8.25% — the highest levels since early 2001. The quarter-point rate hike actually sparked a sigh of relief in financial markets since the recent increases in core consumer price inflation and a series of “hawkish” statements from Fed spokespersons had raised fears of a half-point increase from the Fed on June 29. The FOMC statement, as expected, stressed that future policy decisions will be heavily data-dependent, and the core inflation readings promise to remain troublesome in coming months — if only because of inevitable upward pressures on market rents that drive the “owners’ equivalent rent” components of the core inflation measures. However, the FOMC statement appeared to signal an even-handed assessment of the risks to both sustainable economic growth and price stability, and it’s possible that the Fed is willing to discount the perverse inflationary pressures stemming from the imputed owners’ equivalent rent component. NAHB’s forecast assumes that the Fed will not raise short-term rates again this year and that the Fed will be compelled to drop rates a bit by mid-2007 as the unemployment rate gravitates upward and core inflation stabilizes. Long-term interest rates should firm up a bit further in this environment, taking the fixed-rate home mortgage to 6.8% by late this year (quarterly average basis), but long rates should recede later next year if the Fed eases off a bit. Housing Data Are Mixed, But Generally Point Downward NAHB’s surveys of builders showed deepening problems in the single-family market through June, as our Housing Market Index fell to the lowest level since April 1995. Builders also reported rising cancellations and inventories as well as resales by investors/speculators of homes closed on earlier. Furthermore, ongoing erosion in single-family and condo markets is shown by sales/price data for the existing-home market through May (based on closings). We’re also seeing a distinct downslide in issuance of single-family building permits (data through May), and recent reports from public home builders have shown substantial declines in new orders, rising cancellations and rising inventories of units for sale. Conflicting (positive) signals are coming from a number of government and private sources. Data reported by the Commerce Department for May showed increases for both single-family housing starts and sales of new homes, and the National Association of Realtors® series on “pending” sales of existing homes (based on contracts signed) perked up a bit in May. Furthermore, a weekly series on applications for mortgages to buy homes (from the Mortgage Bankers Association) moved up a bit at the end of June (four-week moving average basis). Despite the conflicting signals, it seems 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. The Housing Sector Will Exert a Drag on Economic Growth in 2006 and 2007 NAHB’s forecast currently shows a 7.4% decline in total housing starts for 2006 as a whole, followed by some further erosion in 2007. We anticipate relatively large slippage in the single-family market while the multifamily market experiences slippage in condos, but a firming in rental market conditions. The manufactured-home market is already back to earth following a temporary surge in shipments late last year (largely to FEMA for hurricane relief efforts), and we expect shipments to edge down further over the forecast horizon. The residential remodeling market still is performing well, and we’re projecting modest real growth over the balance of 2006 and in 2007. Everything included, the housing production component of GDP (residential fixed investment) swung from a positive growth engine to a drag on growth in the second quarter of this year, and we expect that pattern to persist through much of 2007. The projected decline, on a percentage basis, is somewhat larger than in 1994-1995 or 2000-2001, but not nearly as deep as the reversals connected to the recessions of the early 1980s or early 1990s. 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 July 12 edition. To subcribe to “Eye on the Economy,” click here.
Find out in HousingEconomics.com’s State Starts Forecast (sample). The starts forecast includes downloadable Excel tables of total, single-family and multifamily starts by region and state. To learn more, visit www.housingeconomics.com. Builder's Tip: A Tool to Make Seamless Stucco Patches
It’s important to tie the new stucco wire to the wire that reinforces the old work, and it’s always a challenge to expose the old stucco wire without ruining the felt-paper membrane or damaging the sheathing beneath the stucco. As shown in the accompanying drawing, I came up with a simple tool to help me deal with the situation. Here's what I did:
— Keith Wilson, Mountain View, Calif. 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.
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. Stay on Top of Your Finances With Free Tool From NAHB
The tool will help you automatically complete your company’s income statement and balance sheet. All you have to do is plug in your numbers. Available to members and their staff through the NAHB Web site, the tool is a downloadable Excel model that includes three easy-to-use worksheet components that will help you calculate key financial data about your company. Each page of the tool’s workbook deals with a different financial statement or issue that you need to take into consideration when evaluating your company. These include your:
Go to www.nahb.org/biztools and log in as an NAHB member to download your copy of the Builder’s Financial Document Tool. Then fill out the worksheets using NAHB’s Chart of Accounts (also available free to members online) and your company’s financial numbers. Once you’ve determined your company’s income statement and balance sheet, see how your company measures up against similar-sized companies in the industry by comparing your numbers to those in the "Cost of Doing Business Study." NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 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. Subscribe to NAHB’s Business of Building e/Source 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 Technology Solutions Directory Now Online
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. Register for Custom Builder Symposium in Las Vegas
Register now for the 2006 Custom Builder Symposium so you don't miss the Aug. 18 early bird registration deadline. The symposium will be held Oct. 27-29 in the Lake Las Vegas Resort, Nev. Featuring world-class education, plenty of networking opportunities and a practical take-home workbook packed with tips on marketing, management and customer service, the Custom Builder Symposium is a can't-miss opportunity for custom builders to learn from peers who build high-end homes for demanding customers. In addition, the symposium's Andersen Home Tour will feature homes in all phases of construction created by leading Las Vegas custom home builders. Learn From Peers and Other Industry Experts in Concurrent Sessions The Custom Builder Symposium will feature education programs tailored to the needs of builders whose specialty is the discerning, high-end home client. The following are just a few of the sessions offered:
NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 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. Subscribe to NAHB’s Business of Building e/Source 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 Technology Solutions Directory Now Online 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. 50+ Market Growing, Changing in Southeastern Pennsylvania
Southeastern Pennsylvania has long been a hotbed for the “traditional” retirement market. But that is beginning to change, according to area experts. The 50+ market, they say, has become younger, more active and more lifestyle-oriented. “Philadelphia has always been associated with assisted living, continuing care retirement communities (CCRCs) and other forms of service-enriched seniors housing,” said Barbara Kleger, of KD Partners, LLC and the chair of the newly-formed PennDel 50+ Housing Council. “But the market has progressively gotten a lot younger. The active adult industry is alive and well across the region.” Susan Brecht, of Brecht Associates, Inc., a nationally recognized market research firm based in Philadelphia, said that empty nesters deserve much of the credit. Unlike previous generations, they are more likely to move to urban areas in search of cultural activities, entertainment and all that cities have to offer. “Philadelphia isn’t considered a retirement destination, but it has a lot to offer,” Brecht said. “The cultural attractions, restaurants and shopping are a big lure, and many buyers want to live in a mixed-age environment. You are more likely to find that in an urban setting.” Brecht, Kleger and other members of the council, which spans seven home builders associations across eastern Pennsylvania and Delaware, discussed how the boomer generation is transforming their region’s 50+ housing industry during a kickoff meeting of the council at Valley Forge, Pa. last month. Since many boomers continue to work, access to employment opportunities and shorter commutes to the job remain high on their priority lists. But the boomers and others in the 50+ market are also seeking lifestyle. They want concierge and business services as well as pet walking and laundry/dry cleaning services. The region has already experienced an influx of dozens of active adult communities, all built during the last 10 years and all built near the region’s urban core. Another 19 active adult communities are under construction or in the planning stages in Montgomery, Chester and the Delaware counties surrounding Philadelphia. Brecht said these communities could add more than 3,000 single-family homes, condominiums and townhouses to the housing supply when they are completed. And she expects this growth in active adult communities to continue. Robert Fuller, vice president of real estate development for Toll Brothers in Horsham, Pa., is planning several active adult communities in the region. “Pennsylvania has one of the largest senior populations in the country,” Fuller said. “Builders like Toll Brothers will continue to build active adult communities to meet market demand.” With all this demand and construction in the region, Brecht said that housing there still remains affordable for many buyers. The cost for a single-family home of 1,300 to 2,300 square feet within an active adult community, for example, ranges from the upper $300,000s to the mid-$400,000s. Brecht also pointed out that the 50+ buyer was looking for more varied housing choices, such as multi-story condominiums and active adult communities that offer a mix of single-family and attached units. The condominium communities, which can resemble contemporary service-enriched seniors housing from the outside, often have a clubhouse as part of the main building. Prices for this type of housing vary. Condominiums in a community in nearby central New Jersey were priced from the low $200,000s to more than $1 million. “The market is becoming a lot more competitive, but there are plenty of opportunities for builders who do their homework and know their marketplace and who listen to their buyers,” said Kleger. “Builders also have to be patient and persistent, and also have to keep up with what’s hot,” she added while noting that consumers are wielding more bargaining power than ever. “The best thing you can do is to find your niche,” Kleger continued. “Builders need to show buyers what makes them better and different.” For more information about the PennDel 50+ Housing Council and the region it serves, e-mail the council’s Howard Cooper, or call him at 215-657-1300. "Boomers on the Horizon: Housing Preferences of the 55+ Market,” available through BuilderBooks.com, outlines characteristics of 55+ households and will show you the statistically significant differences in their preferences. 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 50+ Housing Council, this book provides convincing evifdence that boomers are on the verge of drastically changing the home building industry. The book is currently on sale, at 50% off. To view or purchase this publication online, click here, or call 800-223-2665.
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. Builders Urged to Oppose FHA Insurance Premium HikesNAHB is urging its members to contact HUD immediately to voice their opposition to the agency’s proposal to significantly increase the mortgage insurance premiums (MIP) that multifamily developers would be required to pay for several key FHA programs, including the Section 221(d)(4) program, which would jump from 45 basis points to 77 basis points. HUD plans to implement these increases on Oct. 1. A comment letter from NAHB expresses strong opposition to the proposed increases. Before the 30-day comment period ends on July 26, it is also important for HUD to receive letters from individual developers and lenders who oppose the proposed increases. In their comment letters, NAHB members should state their opposition to the increases and explain how the higher premiums will adversely affect their business and housing affordability for renters. NAHB members can access a sample comment letter that can be personalized. Non-members also are encouraged to comment, and click here to view the Federal Register Notice announcing the increases. All comment letters should reference Docket No. FR-4679-N-11, Changes in Certain Multifamily Mortgage Insurance Programs Notice, and be sent to: Regulations Division
Comments also can be submitted electronically to www.regulations.gov. A similar increase in MIP is included in the Bush Administration’s proposed budget for 2007, and NAHB is opposing that proposal as well. For additional information or more details, e-mail Claudia Kedda at NAHB, or call her at 800-368-5242 x8352. Apartment Builders Battle High Construction CostsLeaders in the multifamily housing industry attending last month’s Multifamily Trends conference in San Francisco voiced confidence that the demand for apartments is strong today and will remain so for the foreseeable future, but they also said that construction costs have become problematic and that the condominium boom is clearly winding down, with negative implications for some companies. The conference was presented in partnership with the Urban Land Institute and PCBC. Greg Vilkin, president of Forest City Development, said that he has seen construction costs rise 30% to 40% in the last 12 to 18 months, which is pricing out both rental and for-sale business. “We are only initiating deals already in the pipeline and where we have land,” he said. High overhead is increasing the number of projects that don’t pencil out financially, Vilkin said, and that is helping to keep the marketplace from being overbuilt, so there is hope for moderation in costs. With more high-rise work than they can handle, contractors are looking at 35% to 40% profit margins, he said, but when the work goes away there is a chance for those margins to come down. “Logically, people can’t live in a $900-a-square-foot apartment even if they would love to,” he said. “And people can’t afford to pay 60% to 80% of their income on housing.” As a result, condominiums have now lost favor with investors, Vilkin said, and the market is returning to more normal levels of activity. For 30 years, a sales pace of four to five units a week was considered good, he said. In more recent times, there have been projects where 100 units were sold in a day. “It has never been seen before,” he said, “and it will never be seen again.” Disasters in the Condo Market Condo sales are slowing measurably, in some areas more than others, said Leonard Wood, director of Wood Partners, LLC and chairman of the NAHB Multifamily Leadership Board, because “the buyer feels the pressure is off. They don’t have to buy it today because it will cost 20% more next year.” Although they have moderated, the condo markets are still healthy in both Atlanta and Orlando, Fla., Wood said, but it’s a different story in South Florida, one of the places where investors were most active. And banks in general are taking a harder look at condominiums, he said, and are getting much tougher on luxury buildings. “There will be disasters” in the condo market, said Bobby Turner, managing director of the Canyon-Johnson Urban Fund. On his watch list are projects that have pre-sold 75% to 80% of their inventory but then haven’t been able to keep their construction costs under control. Some of these “will fail,” he predicted. A more viable option for multifamily developers is to “focus on communities that don’t have product,” Turner said. “Go into Little Havana and fulfill the existing need that hasn’t been met. Provide affordable workforce housing and joint venture with Cuban developers from the community. The community knows what it wants.” Solving Workforce Housing Needs Turner said that public-private partnerships are essential to solving workforce housing needs in such expensive housing markets as Los Angeles, where less than 10% of the police force can afford to live in the county. Land is the most expensive barrier to affordably priced housing, he said, so bonus densities from the cities are a starting point. Rezoning industrial land for multifamily development is another approach that is working, panelists noted. Localities also need to be reminded of what can result from short-sighted housing policies. “Jobs will leave if there is no place for workers to live,” said Vilkin. For example, Albuquerque is starting to look like a good location for making movies; its median home price is only $114,000, compared to $580,000 in Southern California and it’s only an hour-and-a-half flying time from Los Angeles. Vilkin said that over the next 30 years, he expects the population of Albuquerque to grow from 700,000 to 3 million and for the West to grow by 40 million. In general, multifamily renters and owners will see some measure of affordability restored through higher density development and smaller units, and that’s something that growing numbers of households want as they look for alternatives to single-family housing, according to Connie Moore, president and CEO of BRE Properties. The struggle with land costs and density will only have escalated by the start of the next decade, Moore predicted, raising interesting possibilities for replacement of some of the older existing housing stock.
Find out where the mulifamily market is headed in HousingEconomics.com’s “Multifamily Forecast Report.” (Sample report). The forcecast, available by subscription only, provides the latest information on the condo boom, tax credit/subsidized units, market rentals and more. Data and figures are provided in downloadable Excel tables. Reports are in a PDF format. To learn more, or to subscribe, visit www.housingeconomics.com. Who Will Be the Next Remodelor™ of the Year?Are you the next Remodelor™ of the Year? Remodelor™ of the Year, one of the remodeling industry’s most prestigious awards, recognizes exemplary NAHB involvement at any level, superior business management and an outstanding contribution to the remodeling industry.
The Remodelor™ of the Year application is available online on the members’ side of the NAHB Web site. The winner will be announced at the Remodelors™ Council Gala during the 2006 Remodeling Show in Chicago on Oct. 18-21. For more information, e-mail Melissa Benik at NAHB, or call her at 800-368-5242 x8323. Deadline Nears for 2006 Brick in Home Building CompetitionThe deadline to enter the Brick in Home Building Awards, which showcase the finest work in clay face and paving brick from residential builders and architects around the country, is only weeks away. Conducted by the Brick Industry Association, entries are due by Monday, July 31. Entries can be submitted in one or more of the following categories:
For more information about the award, including eligibility, submission requirements and judging, visit www.gobrick.com/AwardsInfo.html. To enter, click here.
Boost Your Career by Getting Involved With Your CouncilAs someone who is relatively young and new to sales and marketing in the housing industry, I have discovered — with plenty of help — that being active in my sales and marketing council has boosted my career and enabled me to become a more effective professional. I believe the best way to thank the many people who have helped me learn so much in such a short time is to pass on my experiences to those of you entering our profession, and to encourage you to become active and contributing members of your local council. The first step to becoming active, of course, is to join a committee. Your First Meetings Can Be Intimidating You will be in a room filled with industry veterans telling plenty of inside jokes. You will be confronted by an agenda with tasks and responsibilities you can’t begin to grasp. Expect to leave your first meeting frustrated, but fight the urge to give up. Everyone has been in your shoes. This is actually a great start. It will take a few meetings before you get your bearings. In the meantime, don’t be afraid to speak up, offer your opinion or ask a question. People who are truly successful are more than willing to help others, and the people on your committee are successful — and willing to help. Use NSMC and NAHB Resources to Get Acquainted and Comfortable The National Sales and Marketing Council and NAHB have many programs — networking, seminars, on-line resources and designations — to help you become successful. If you don’t know where to start, the people on your marketing subcommittee will help you. In addition, here are some new resources that should prove helpful:
Feeling comfortable yet? Here are a few more tips and pointers worth pursuing:
As You Move Forward, Don’t Forget the Little People “The growth and development of people is the highest calling of leadership,” according to national leadership expert John Maxwell. If you are committed to your profession and those who helped you get ahead, don’t be too surprised to find yourself leading some of the same committees you were apprehensive to join sometime soon and impacting the events that shape our industry. But as you move through the ranks, don’t forget how you started. Train yourself to seek out new members who join your committees and encourage their participation. Zach Schabot, MIRM, of The Wood Team at RE/MAX Partners, is a general brokerage agent specializing in residential real estate and sales and marketing services for custom home builders in the Triangle area of North Carolina. Schabot is on the executive board of the Triangle SMC of the Home Builders Association of Raleigh-Wake County. He holds a MIRM designation and is earning his certification to teach IRM 2 and IRM 3. E-mail Schabot for more information. Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information
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. Earn Valuable Sales and Marketing Designations Through IRM Programs
The Institute of Residential Marketing (IRM) offers four designation programs for sales and marketing professionals:
For more information on these designation programs, click here. Ask an Expert 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 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. To view or purchase this publication online, click here, or call 800-223-2665. 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. Award-Winning Homes Harness Passive Solar Energy
A combination of state-of-the-art energy efficiency, passive solar design and striking architecture landed one EVHA-winning home an 11-page feature article in the May 2005 Celebrate Northwest Arkansas magazine. Stitt Energy Systems' 5,400-square-foot custom home features large south-facing windows to collect wintertime sunshine and overhangs sized for shading the windows from the high summer sun. The south-facing windows, fortunately, also permit stunning views of nearby Beaver Lake. Precast concrete walls are the keystone of Tierra Concrete Homes’ passive solar homes. Acting like a battery, the concrete walls store the sun’s thermal energy during the day and release it during cool nights, helping to dampen the large daily temperature fluctuations common in the Colorado climate.
On the south side of the house, windows have a high Solar Heat Gain Coefficient (SHGC) for maximum solar energy absorption. Twenty-two-inch overhangs block direct sunlight from late May through late July. Tierra Concrete Homes uses Energy-10, a well-respected passive solar design software program, to optimize window area, placement and shading. SunTerra Homes of Bend, Ore. also specifies window SHGC based on orientation. South-facing windows permit 62% of incident solar radiation through while west-, east- and north-facing windows permit only 33% through, helping to reduce the likelihood of overheating from the rising and setting sun. By combining passive solar design with a solar electric grid, Big Horn Builders of Boulder, Colo. built a completely off-grid, super-insulated passive solar home that needs no central heating system. Back-up heat is provided only by a gas fireplace. Because air conditioning is unnecessary in the cool mountain location, power needs are substantially reduced. Due to the home’s distance from the power grid, the off-grid power system was actually more economical than tying into the electric utility grid. For more information about passive solar design, click here for a fact sheet from the U.S. Department of Energy. For more information about the EnergyValue Housing Award, visit the program’s Web site. Florida Solar Grants Boost Residential Energy EfficiencyQualified home owners will be able to recover half the cost of their solar electric and water heating systems, up to a maximum of $20,000, under Florida's Renewable Energies Technologies Grants Program. For consumers interested in photovoltaic cell systems but who have been discouraged by the high price of many energy producing technologies, the grants are “a no-brainer,” said NAHB Green Building Subcommittee Chair Ray Tonjes. Unfortunately, there is only $2.5 million available for the program, Tonjes said, and that is sure to go fast. Rebates, tax credits and other financial incentives are key to increased consumer acceptance of “zero-energy” homes, according to a study released earlier this year by the NAHB Research Center, but the technology is already there. Zero-energy homes (ZEHs) combine energy-efficient design with devices like photovoltaic panels or wind turbines connected to the community’s power grid. With the ability to produce energy and use energy more efficiently overall, zero energy homes aim at producing as much energy as they consume; some communities allow home owners to receive rebates on their electrical bill for the excess energy that is generated. Based on consumer focus groups and Internet surveys, the NAHB study concluded that research and development, “in conjunction with state and federal tax incentives can accelerate and significantly improve the energy performance of the residential sector of the United States.” With incentives in place, the study forecasts that by 2050 zero-energy homes “can reduce the energy consumption of all single-family homes by 19% while, over the same time, the stock of single-family homes increases by 39%.” The study assumed a 30% tax credit in its forecast, a significantly greater incentive than the 10% credit the federal government now offers for certain energy-efficient products for qualified buyers. “Although the relatively slow replacement of housing stock and historically slow diffusion of new technology in the building industry means decades before [zero-energy homes reach] full market potential, aggressive near-term action leads to much earlier market acceleration and energy impact as ZEH builds to its full market potential,” the study said. The implications are clear, said Tonjes. “If we are serious about reducing our reliance on oil, we need to think creatively and we need to come up with incentives that make this technology more cost-effective,” he said. “I know home builders want to do their part, but they need to be able to sell the houses they produce. These rebates are one way to get shorter payback times for technological innovation, and we need to encourage programs like these.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Judges Selected for EnergyValue Housing AwardsSix judges for the 12th annual EnergyValue Housing Award (EVHA) program were announced by the NAHB Research Center on July 6. The awards honor home builders who voluntarily incorporate energy efficiency into the design, construction and marketing of new homes. One of the finalists is then selected as Builder of the Year. The EVHA will be presented during the 2007 International Builders’ Show (IBS) in Orlando, Fla. in the affordable, custom, factory-built, production and multifamily categories for hot, moderate and cold climate regions. The application process for the awards requires a great amount of detail, and the feedback that applicants receive from the judging panel is one of the most beneficial parts of the review process, providing companies with unique access to the panel’s expertise. Representing the fields of engineering, residential energy, construction, design and marketing, this years judges are:
The announcement of the winning entries will remain embargoed until the presentation of awards at the IBS in February. The EVHA program is coordinated by the NAHB Research Center in partnership with the U.S. Department of Energy, through the National Renewable Energy Laboratory, and NAHB. For more information on EVHA and previous winners, click here, or e-mail Dr. Kevin Mo, EVHA program manager, at 301-430-6210. HBAs Finding Green Building Programs Recruit Members
Efforts to initiate the program began this spring on May 20 and 21 with a parade of green homes featuring tours of 12 projects by custom and production builders in the association ranging in price from $179,000 to $2.2 million. That was followed by a June 27 association seminar introducing green building concepts. It was heavily attended by 85 builders and half a dozen of them used the opportunity to join the association, a sign of growing interest in the community in the growing national movement to sustainability in residential construction practices, according to Executive Vice President Nick Tennyson. The spring green building tour garnered feature stories and previews in the local press, and another has been scheduled in the autumn. The North Carolina members are using the NAHB Model Green Home Building Guidelines, a tool for local HBAs interested in establishing voluntary green building programs. The guidelines can be customized for regional differences, such as giving more weight to water conservation measures in the arid Albuquerque, N.M. area. The Durham-Orange-Chatham Green Building Council has developed a score sheet to rate the homes of program participants and is working now to decide what materials builders will need to submit to receive green certification for their homes. The association has received technical and marketing assistance from the Green Building Initiative and is reaching out to the local association of real estate agents for the preparation of educational materials for brokers. “We want to explain to them how to separate the wheat from the chaff,” Tennyson said. The HBA must also decide whether to consider third-party certification of green homes and determine administrative and certification costs. HBA green building programs based on the NAHB guidelines are up and running in St. Louis, Albuquerque, Kansas City and Houston, and 10 other associations are in the process of developing them. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. ‘Residential Green Building SmartMarket Report’ Analyzes Green Building Trends “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green home building. The report provides the results of market research conducted by McGraw-Hill Construction and NAHB about green building in home construction. To view or purchase this publication online, click here, or call 800-223-2665. ‘Building Greener Neighborhoods’ Available at BuilderBooks.com “Building Greener Neighborhoods,” available through Digital Delivery at BuilderBooks.com, shows those involved in building new communities the advantages and rewards of saving, planting and transplanting more trees in their developments. The examples are drawn from decades of experience of land developers, home builders and urban foresters. To download this publication, click here, or call 800-223-2665. New Green Building Report Analyzes Market TrendsThe future of building is looking greener as more home builders and home owners focus on energy-efficient and resource-efficient homes, according to a recently released report by NAHB and McGraw-Hill Construction. “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, is a 28-page document that addresses the trends and opportunities in green home building. Topics include:
Web Search Tool Helps Locate Endangered Species
An Internet search tool — NatureServe Explorer — can help builders and developers get a jump start on planning and complying with Endangered Species Act requirements by giving them access to information on protected animals and plants in local areas. Addressing habitat protection and conservation measures early on is crucial to minimizing regulatory delays or costs, and the online explorer is an easy way to see whether a new project has the potential to affect an endangered or threatened species. A non-profit conservation organization with a network of natural heritage programs, NatureServe provides scientific information and tools that can help guide effective conservation action and it is the nation’s leading source of expertise on rare and endangered species and threatened ecosystems. The NatureServe Explorer Web site provides the general public with in-depth information on more than 65,000 plants, animals and ecosystems in the U.S. and Canada. Explorer details the life histories and habitat requirements of thousands of species, the threats they face and management strategies for their protection. Information searches on Explorer at the county, state or watershed level can be particularly helpful in providing area-specific information on federally protected species. “This is an easy-to-use resource that will be helpful to builders and developers, especially given the increase we’ve seen in member demand for green building and development resources,” said Christopher Galik, an NAHB environmental policy analyst who tracks endangered species issues for association members. Recent discussions between NatureServe and NAHB have highlighted how association members can benefit by using the extensive biological database offered through Explorer. “The data provided on NatureServe Explorer reflects our best scientific knowledge as well as detailed habitat inventories carried out by the scientists in state natural heritage programs,” said Bruce Stein, Ph.D., NatureServe’s vice president for programs. “We work hard to keep it as up-to-date and accurate as possible.” While NAHB members can gain valuable information from NatureServe Explorer, there is no substitute for good communication between regulators and the regulated, and builders are still advised to discuss their projects with appropriate agency staff, consultants and legal experts. For detailed information on how to use NatureServe Explorer, click here. For more information, e-mail Christopher Galik at NAHB, or call him at 800-368-5242 x8663. EPA to Study Effectiveness of Its Storm Water ManagementNAHB plans to help the U.S. Environmental Protection Agency as it embarks on a three-year study on the effectiveness of the nation’s storm water management program. EPA wants to see how discharges from commercial and industrial sites affect water quality and whether its storm water permitting policies are making a difference. Data from the agency suggest that many industrial facilities are reporting that they routinely exceed benchmark values established in the multi-sector general permit (MSGP), which is used by industries other than home building. However, EPA has not yet been able to determine whether this excessive discharging is an indication of potential water quality problems or inadequacies in its storm water pollution prevention plan. The study is part of EPA’s preparation for the 2011 MSGP. NAHB members will not be directly affected by the results of the study because residential construction requires its own storm water discharge permit, but the participation of the association in the study has many benefits, according to Kim Wagoner, an environmental policy analyst at NAHB. “First of all, EPA is willing to look at the effectiveness of its storm water programs and whether its enforcement mechanisms, including the permit itself, have a positive impact on water quality,” Wagoner said. “The results of this study will have an influence on EPA’s residential construction permitting policies as well, particularly if EPA decides to broaden the study to assess establishing national benchmarks for the construction industry. It is very important for NAHB to play a role.” Slated to begin this fall, the study will examine a number of key points, including how pollutants in storm water affect water quality, how useful it is to monitor storm water discharges and the effectiveness of the technical and administrative design of the current storm water permitting program under the Clean Water Act. The results will include recommendations for EPA and for agencies in the 45 states that have their own programs. For additional information, e-mail Kim Wagoner at NAHB, or call her at 800-368-5242 x8662. 'Storm Water Permitting: A Guide for Builders and Developers' Available at BuilderBooks.com “Storm Water Permitting: A Guide for Builders and Developers,” available through BuilderBooks.com, provides a starting point for builders and developers to use in locating and understanding storm water permitting requirements. 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. To view or purchase this guide online, click here, or call 800-223-2665. Seminar Focuses on Building With Trees
The seminar, offered by noted arborist Charles Stewart, teaches participants how to determine which trees to protect — and then how to make sure they remain healthy during each phase of the development and construction process. Right now, the Building With Trees seminar is slated for Columbus, Ohio, on Oct. 3 and St. Louis on Oct. 10. “We’re always looking for ways to get the word out” and let builders know the classes are available, said Dan Lambe, vice president for programs at the foundation. The Building With Trees partnership between the foundation and NAHB also provides recognition. Since 1998, builders and developers have been honored for exemplary projects during the annual Award of Excellence at the Lied Lodge & Conference Center in Nebraska City, near the foundation’s headquarters in Lincoln, Neb. Last year, the Langston Development Company in Westfield, Ind. was honored for incorporating 900 mature trees into the design of its Brookside community. The Grande Dunes Development Company, LLC of Myrtle Beach, S.C. won for a transplantation and maintenance program developed for its new coastal community. And Woodlands Edge, developed by Rocket Properties, LLC of Little Rock, Ark., was honored for being able to keep 95% of its 460 acres forested. The Building With Trees seminar can be offered by home building associations for their members or by individual companies for their employees and subcontractors — a one-stop shopping educational opportunity for environmentally sensitive development. The Arbor Day Foundation provides the instructor, a workbook and snacks — for a set per-person fee. The HBA provides the students, and can charge participants or get a sponsor to pay for the seminar. The seminars and the awards program provide an excellent public relations tool for builders and HBAs because they demonstrate the industry’s commitment to the community and environmental stewardship, says Debra Bassert, NAHB’s assistant staff vice president for land use policy. “Builders want to protect existing trees during the construction process because they add value to the finished development. The Building With Trees program provides both education and recognition when they accomplish that goal,” she said. The seminar also is a good forum to bring HBA members together with local building officials and elected leaders, Bassert said. “Good development takes good planning, and good planning takes a positive relationship between the public and private sectors. Building With Trees helps promote that relationship.” For more information, e-mail Calli Schmidt, or call her at 800-368-5242 x8132. Money-Saving Tool From NAHB Navigates EPA Regs
The NAHB Environmental Management System (EMS), the first tool of its kind for the home building industry, helps members better comply with U.S. Army Corps of Engineers and Environmental Protection Agency regulations, especially those on storm water permits, as well as target issues of importance. Designed for medium and large firms, the $25 EMS tool provides a CD and a detailed book of instructions ― including templates that companies can customize to create their own forms, policies, procedures and more. At the core of the EMS tool is the “Significant Aspect/Impact Register,” a Microsoft Excel spreadsheet that allows home builders to prioritize potential environmental issues they may have to address — ranked by impact or importance as they relate to the environment, regulatory compliance and costs. How to Use EMS With the EMS tool, companies choose:
To use the EMS program, members can copy the CD into their own computers. They can also take advantage of two enclosed slide show presentations for training their office and construction personnel. After testing the new EMS tool, Bobby Bowling, of Tropicana Homes in El Paso, Texas, said it was valuable to his business and easy to use. Bowling compared the EMS tool and the reports it generates to the program that his company has used successfully to comply with Occupational Safety and Heath Administration (OSHA) regulations. By demonstrating that it has in place regular training seminars and that it monitors its job sites for potential safety violations, Tropicana Homes is less likely to find OSHA knocking at its door with inspection papers. “It’s a much more reasonable way of doing things,” Bowling said. Dave Yorgason, of Capital Development in Boise, Idaho, said the new EMS “can be a nice tool. It’s flexible, so you can tailor it to the needs of specific projects.” However, he added that small builders may find the tool a little overwhelming. “It takes some work to understand it because of all the environmental lingo. You have to understand the terminology.” NAHB Environmental Issues committee members previewed the EMS at the Spring Board meeting in Washington. EMS Availability NAHB is planning for a seminar this fall to introduce the new tool and will follow up with a class at the International Builders’ Show. Interest in the EMS has been strong, and more than 230 copies have already been distributed. Additional information will be available soon. EPA is looking for companies to use a standardized management system to adopt policies and programs that integrate environmental responsibilities into their business practices. The new EMS tool fits the bill, said Kimberly Wagoner, an environmental policy analyst specializing in storm water issues for NAHB. The ability to calculate potential environmental impacts and to immediately determine what to do about them should save NAHB members time and money. For more information, e-mail Calil Schmidt at NAHB, or call her at 800-368-5242 x8132. NAHB Tells EPA Leaders to Reject Proposed Dust StandardNAHB staff met with Environmental Protection Agency Administrator Stephen Johnson last week to relay the concerns of association members with the agency’s proposed standard for coarse particulate matter. 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 proposal to regulate “crustal fugitive dust emissions” — or common dirt — assumes that sand and dust stirred up from construction sites are more dangerous than dust from other sources, such as farming or even windstorms. NAHB sent comments to the agency opposing the proposal in April. (For a related NBN story, see click here.) The EPA, meanwhile, is under court order to complete the standard by Sept. 27. In its meeting with Johnson, NAHB representatives focused on four reasons the proposal should be rejected:
The distinction between agricultural and construction dust makes no sense, according to Gary Suskauer, an NAHB environmental policy analyst who attended the meeting. “There is no difference between the dust generated by a farmer’s tractor one day and by a bulldozer on the same site the next day when it is being converted into a housing development. It is the same dust.” NAHB will continue to work with the state and local home builders associations that would be most affected by the proposed rule to encourage EPA to change its position, he said. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Missouri Builders Help Katrina Refugees Start a New Life
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