Nation's Building News Online: August 21, 2006Print All Articles Text Version |
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Katrina Rebuilding Proceeds By Fits and StartsNAHB representatives attending the Mississippi Recovery Expo in Biloxi earlier this month were reminded afresh of the seemingly insurmountable challenges confronting home builders and home owners working to rebuild after last year’s hurricanes. At the start of the 2006 storm season, Hurricane Katrina was back in the news last week when Mississippi home owners lost a lawsuit against their insurance company seeking coverage from storm surge damage and the Federal Emergency Management Administration (FEMA) ordered air testing for formaldehyde in the trailers it has provided for displaced residents in the devastated area. Gulf Coast rebuilding efforts have proceeded by fits and starts, amid the best intentions of home builders. “It’s a fragmented situation, and it’s a series of delays and problems,” said NAHB National Vice President Fred Griffin of Griffin & Associates. “It’s little things, things you used to take for granted. Everybody has got some kind of problem getting it back together,” he said. As an example, Griffin said that when his company began to plan construction on two new homes in Bay St. Louis, it had difficulties getting the property surveyed. The houses on the property had been demolished by the storm — along with the nearby landmarks that the surveyors would need to make accurate measurements. “It took them more time, and cost a little more money,” Griffin said. Bridges have not been repaired and entire roadways are gone, transforming once routine trips into two- to three-hour ordeals, he said. “You can’t just say you’ll run over here or run over there anymore.” Without enough employees or customers, restaurants have cut back on their hours. Little inconveniences have combined to become big problems. “It’s not one big thing, it’s dominoes. You line them up and push them over,” Griffin said. The Gulf Coast casinos, major employers in the region, have begun to reopen, and in some cases are providing living accommodations for their workers, who can’t find other housing available yet, he said. Insurance Premiums Cost-Prohibitive Where to put workforce housing remains a significant problem for the region. Many people who want to rebuild on the sites of their old homes can’t afford to do so even with money from government subsidies or insurance claims, because they don’t have the income to qualify for home owners’ insurance premiums that in some cases top $12,000 per year in flood-prone areas. But to rebuild farther from the shoreline means that infrastructure must be created where none now exists. Builders then have to find workers to build the homes, officials to issue permits and inspectors to approve the finished product, and all are in short supply. Furthermore, moving inland is not an option for a casino worker, who, with an average annual salary rarely higher than $15,000 to $20,000, cannot afford a long commute at today’s gas prices, Griffin said. ‘Katrina Cottages’ Ready to Roll NAHB Building Systems Council Executive Director Jeremy Bertrand and Codes & Standards Specialist Ken Ford attended the Mississippi Recovery Expo in Biloxi, where NAHB teamed up with the Modular Building Systems Association to promote the role of modular housing as a safe, well-made choice for both temporary and permanent affordable homes. One topic of discussion at a builder forum during the expo was the need to get residents out of the temporary FEMA trailers, which are not designed for long-term residence. Before mid-October, the state plans to submit a proposal to the agency that would channel FEMA money from the state to multiple vendors who are ready to produce “Katrina Cottages,” one version of which was displayed last January at the 2006 International Builders' Show in Orlando, Fla. The original 300-square foot modular cottage has been joined by larger models and also now comes in panelized and stick-built versions, Bertrand said. “In time, the consumer could purchase the home from the state. This could be quite an opportunity for modular and panel manufacturers if they are willing to work with the design specifications that have been developed.” Meanwhile, Mississippi builders are working slowly to help their fellow residents — many on their own time. Griffin’s church has been sponsoring “mud-outs” in which members of the congregation spend a couple days of each month on clean-up efforts. “They go into houses and drag the furniture out, scrape the mud out and strip the drywall off the wall and get it down to the studs,” Griffin said. Even this can be dangerous work, as several volunteers have developed staph infections from the mold running rampant in the water-damaged houses. It doesn’t stop Mississippians from moving ahead, he said. “There’s a collective effort, there is still a real strong will among the people to persevere and get through this thing. This is home, and they intend to stay here.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Share Nation's Building News With Your Staff. It's Free.Make 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 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. Regulators Hear Builder Concerns in Roanoke, Va.A series of “listening sessions” with federal government officials this month and next is providing the home building industry with an opportunity to suggest improvements to environmental regulatory and enforcement programs. The federal Cooperative Conservation program encourages the Interior, Agriculture, Commerce and Defense departments and the Environmental Protection Agency (EPA) to work more collaboratively with state and local agencies, nonprofit groups and those who are regulated, including home builders. The Bush Administration announced plans for as many as 24 listening sessions nationwide over the next two months to solicit ideas and public support. Reforming both the Endangered Species Act and EPA’s storm water enforcement program are at the top of NAHB’s agenda. So far, the sessions have featured senior-level Administration officials, including Secretary of the Interior Dirk Kempthorne and EPA Administrator Stephen Johnson. At an Aug. 14 listening session in Roanoke, Va., five members of the Roanoke Regional Home Builders Association were among the attendees given three minutes apiece to speak. Additionally, eight NAHB members from Washington and Idaho attended the first listening session Aug. 11 in Spokane, Wash., where 300 people turned out to voice their concerns to both Kempthorne and Johnson. Roanoke Executive Vice President Melody Williams said she was pleased with the HBA member turnout on such short notice; federal officials announced the dates less than a week before the sessions were launched. Jurisdictional questions on wetlands and storm water management are on the increase in the Roanoke area, where builders are developing neighborhoods in valleys rimmed by the Appalachian Mountains. “How the Army Corps of Engineers and the state Department of Environmental Quality are defining navigable waters are big issues for us,” Williams said. “We are in a mountainous terrain, so erosion and sediment control can be a real issue too, and of course there is a battle over who has jurisdiction over what.” Williams said she was left with the impression that federal officials are looking for solutions, even if it means “getting out of the way” of local land-use decisions, as one EPA official told attendees at the Roanoke meeting. “I would encourage other associations to send members to attend if they have more time to rally their troops,” she said. At the recent NAHB Executive Officer Council meeting in Connecticut, Executive Vice President Jerry Howard asked state and local leaders to make a point of attending a nearby session. “NAHB wants to tell top officials what is working and what is not — and how to fix it,” Howard said. “We must be active participants in these hearings. Your leadership and the involvement of our state and local associations in this effort are crucial." NAHB action has worked well in the past, Howard said. The House of Representatives has passed comprehensive ESA reform legislation during this session and NAHB has secured support from key House members to introduce the Storm Water Enforcement Bill. “We heard about these hearings on very short notice. But we know that they present the last good opportunity to influence this Administration to address the long-standing reform priorities of the home building industry,” Howard said. Among the changes NAHB is advocating:
For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Could Rising Gas Prices Kill the Suburbs?Once Americans start to realize that high-cost gas is here to stay, more home owners, including young families, will want to live in central cities and there will be a push for more public transportation, predicts Stuart Gabriel, director of the Lusk Center, a real estate think tank at the University of Southern California. In the Los Angeles area, Gabriel says that KB is leading the way to a new type of neighborhood that will give the city European-type higher density. The first of KB Urban’s high-density, mixed-use projects will be a 2-million-square-foot complex of luxury hotels and private residences built in partnership with hotelier Marriott International and AEG, a sports-and-entertainment company that owns L.A.’s Staples Center. “If you and I come back to Los Angeles 15 years from now, we are not going to see (the current) persistent pattern of building single-family detached homes farther and farther into the desert,” Gabriel says. Instead, he expects “a denser city center, denser inner-ring suburbs…a city that is more vertical.” Assuming a full-time job, $3 gas, 26 miles per gallon and 50 cents a mile for maintenance and no parking fees, a 50-mile roundtrip commute costs more than $646 a month, or more than $7,750 annually, according to the City of Bellevue, Wash.’s Commute Cost Calculator. A 10-mile roundtrip commute reduces that to about $1,550 annually, or by $517 monthly. That savings can pay for an additional $80,000 on a mortgage loan, according to David Kasprisin, district sales manager for National City Mortgage Co. in Chicago, whose rule of thumb is that each $250 you can free up equals roughly $40,000 more you can borrow at the current 6.5%. (www.realestate.msn.com)
Insurers Urge Action on Risky MortgagesMortgage insurance companies have begun pleading with federal banking agencies to act quickly to restrict interest-only mortgages and “option” mortgages that allow borrowers to decide how much to repay each month. Over the past five years, millions of Americans have bought or refinanced homes using these loans because the monthly payments are lower than with traditional fixed-rate loans. They currently account for about one-third of all new home loans, according to data from First American LoanPerformance, and in high-cost Washington, D.C. they account for half. The insurers say they are worried about widespread foreclosures if some of these new borrowers default on their loans when they are reset and the payment is adjusted upward to repay the full interest and principal owed. The Mortgage Bankers Association has warned that setting new rules on these nontraditional loans might stifle product innovation. Guaranty Bank said new rules might have “an adverse effect on the availability of credit to home owners.” About 70% of the buyers who take out an option adjustable-rate mortgage, which allows the buyer to avoid paying even the full interest on the loan, end up paying the lowest permissible amount each month, according to the Federal Deposit Insurance Corp. (www.washingtonpost.com)
Top Cities Where Mortgage Rates Will Hit Consumers the HardestBased on a study of subprime adjustable rate mortgages in 130 American cities, the watchdog group ACORN said that rising interest rates will have their biggest impact on markets in the South and Midwest. According to a report from ACORN, ARMs made up three-fourths of all subprime home loans in 2005, up from half in 1999, and 60% of subprime loans are set to have their interest rates changed by the end of the year. Buyers with subprime loans are already paying higher interest rates, are more likely to have lower incomes and don’t have as many resources to cope with an adjustment to a higher mortgage interest rate. The top 10 areas most at risk for “rate adjustment shock” are: Detroit and Flint, Mich.; Memphis, Tenn.; Jackson, Miss.; McAllen, El Paso, Laredo and Brownsville, Texas; Springfield, Ill.; and Birmingham, Ala. (www.realestatejournal.com)
After Five Years of Growth, Home Prices DropAs part of a national trend in which regional markets that led the country during the housing boom are seeing prices flatten or decline as the number of unsold homes on the market climbs, median prices of homes in several parts of the Washington, D.C. area have declined when compared with the same time last year. In Loudon County, Va., for example, the median prices of homes sold in June dropped 1.2% last month compared with a year earlier, according to Metropolitan Regional Information Systems Inc., the area’s multiple listing service. Although the declines are small and not universal, they are significant because they mark the first time in half a decade that home prices have fallen in a 12-month span. Economists are split over whether the declines foreshadow bigger price reductions in the months ahead. “Could it be a 5% drop in prices? Could it be 10%? Whatever it is, it will be short-lived, because demand is right there on the sidelines,” said David Lereah, chief economist of the National Association of Realtors®. Peter Morici, an economist at the University of Maryland, said prices could drop 10% by the end of the year, and perhaps 20% “by the time it’s all over.” (www.washingtonpost.com)
Residential Affluenza: How Remodeling Has Become the Obsessive Labor of the Ultra-RichHome improvement dollars are disproportionately pouring into housing for the very rich partly because of the fact that bigger houses require bigger remodels, but probably also because of obsessive remodelers without financial constraints who have become strangely preoccupied by the process of designing or remodeling their homes. According to the U.S. Census, the amount of money spent in home owner construction projects of the wealthiest individuals has always outstripped those with less money. In 1993, the highest income group spent about 55% more than the second-highest income group. But in the past few years, that gap has widened, with the highest income category spending more than 325% more than the second-highest income group. According to Jim Lapides, a spokesman for the NAHB Remodelors™ Council, the remodeling boom is at an all-time high, with $215 billion spent nationally in 2005 and $238 projected for 2006. Recently, the remodeling cycle has also accelerated, with kitchens and bathrooms undergoing renovations 30% faster than a decade ago. Now, affluent home owners often design their homes with the idea of planned obsolescence — choosing neutral colors and finishes on more permanent materials like walls and floors, but using bright, unusual materials for things like countertops that they plan to change every couple of years. (www.sfgate.com)
Buyers Yearn for the Big Picture on TVChanges are occurring within the walls of big new homes that will affect how people watch television. Some trends will make it easier to fit in a screen as big as 103 inches, while others will make it trickier to find the right spot for even the sought-after 50-inch screen. Although in many cases it is just another name for the basement, about 10% of homes are being built with media rooms, according to NAHB, and these might easily have space for a big screen in a home theater. Sprawling master bedrooms are also increasingly conducive for big-screen TV, according to Gopal Ahluwalia, NAHB’s staff vice president for research, who says the average dimension of the room has now grown to 15 feet by 20. However, with the kitchen opening up into the family room, whole rooms are disappearing and in 10 years, Ahluwalia predicts, the living room will be gone, including interior walls where a TV might have been hung. A room needs to have an expanse of wall almost four and a half feet wide to accommodate a 60-inch diagonal screen. And a viewer should sit no closer than 1.5 times the diagonal of a 1080p high-definition TV, the highest resolution available. (The rule of thumb is 2.5 times for TVs with lower resolution.) In the case of a 60-inch TV, that is about 8 feet from the screen. (www.nytimes.com)
Letters to the Editor: Invitation to a LawsuitDear Editor: Regarding your Aug. 14 story on “NAHB Members Reviewing ICC Code Change Proposals,” the concept of minimum regulation set forth in the code is one of its shortcomings because it establishes a beachhead for "construction defect" litigation on many levels. At one level, it takes away the ability of the building authorities to use local knowledge to determine if the requirements are reasonable, excessive or inadequate for that area. This is a boon to litigators. Second, it reduces or eliminates the ability of professionals to develop design standards for specific buildings or projects. This becomes even more of a problem if the building official cannot or will not allow exceptions, which are limited by the code. Reasonable interpretation is limited at best and strict compliance is essentially mandated. Look at construction defects in California, for example. Code officials like tighter control, but this drives up the cost of housing, insurance and compliance with questionable results in many cases. However, it does promote conflict between builders, developers and their customers. Who promotes this conflict? It’s the litigators. There are probably some construction professionals who should be sued, but most are threatened and intimidated as a result of poorly drafted codes. Spike Rumley, Denver Florida Gears Up for November Initiative BattlesFlorida voters in November will be going to the polls to choose a new governor and consider six ballot initiatives that seek to amend the state’s constitution. One of those initiatives, Amendment 3, would require most state amendment proposals to be approved by at least 60% of the voters, rather than a simple majority, but would not affect the current requirement for a proposed amendment imposing a new state tax or fee to be approved by at least two-thirds of the voters. Supporters of the proposed amendment argue that Florida’s constitution is too easy to amend and that this has allowed out-of-state groups and special interests to bypass the legislature and abuse the initiative process. A case in point was a 2002 initiative in which animal rights activists convinced voters to adopt an amendment prohibiting the confinement of pregnant pigs in cages, crates or other enclosures, making Florida the first state to afford constitutional protections to pigs. Amendment 3 supporters say there is ample evidence that the Florida ballot process is being abused:
Proponents of the initiative had sought to place it on the ballot in 2004, but the court turned back their efforts, ruling that the measure contained misleading language. In its most recent opinion, the court held that the amendment met state requirements after the questionable language was removed. For more information on Amendment 3, click here. Most Cities Say They Felt the Impact of 2005 HurricanesAlthough only a relatively few cities were directly hit by hurricanes last year, a large majority have felt repercussions from the storms, according to a survey earlier this year by the National League of Cities Center for Research and Municipal Programs. With the population increasingly aware of security issues and natural disasters, concerns over survival services such as food, shelter, heating, clothing and health care also were on an upswing among the 1,566 local officials who were polled for “The State of America’s Cities, 2006.” Among the findings:
Housing Starts Cool at an Orderly Pace in JulyThe nation’s cool-down in housing production continued at an orderly pace in July, with a 2.5% decline to a seasonally adjusted annual rate of 1.795 million units, the Commerce Department reported last week, leaving the pace of residential construction last month down 13.3% from a year earlier. Single-family housing starts in July dropped 2.3% to an annual rate of 1.452 million units, which was 16.6% below last July, and multifamily construction fell 3.4% to 343,000 units. “The moderate decline in starts was anticipated and shows that builders are adjusting to changing market conditions,” said NAHB President David Pressly. “A drop in permits shows that builders are not planning to start as many homes in the near future, and many are offering incentives to prospective buyers in order to control their current inventory positions.” “Housing demand has been weakening as affordability has deteriorated and investors/speculators have pulled out of the market, and builders are adjusting their production levels accordingly,” said NAHB Chief Economist David Seiders. “Builders also are offering a variety of incentives to bolster sales and limit sales cancellations as inventories have climbed.” The total number of building permits issued in July decreased 6.5% to a seasonably adjusted annual rate of 1.747 million units, 20.8% below the year-earlier pace. Single-family permits declined 6.1% to a 1.318 million unit yearly pace, reflecting a downturn in permits in all regions of the country. Multifamily permits were down 7.7% to 429,000 units, which was 11.4% lower than a year earlier. July’s housing starts were down 2.5% in the South, 2.9% in the West and 7.0% in the Northeast. Starts rebounded a slight 0.7% in the Midwest, to a production level 16.6% below July of 2005. “We expect the downswing in starts and permits to continue for several months, although solid economic fundamentals, a favorable financing environment, and widespread use of sales incentives will limit the degree of decline,” said Seiders. “We are currently projecting a 9.4% decline in total housing starts for 2006, with single-family starts expected to be off by 10.8% from the record level of 2005.”
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 Confidence Subsides to 15-Year LowReacting to their perception of increasing consumer uncertainty over the new single-family home market, builders polled for the Wells Fargo/NAHB Housing Market Index (HMI) this month tempered their views on current and expected sales activity, pushing the August index down seven points to 32, its lowest level since February 1991. This was the seventh consecutive monthly decline. “Two big factors are coloring builders’ confidence in the market right now — rising sales cancellations and substantial growth in inventories of both new and existing homes,” said NAHB Chief Economist David Seiders. “These factors are largely the result of an increasing number of potential buyers adopting a ‘wait-and-see’ attitude because of uncertainty about where the housing market is headed, and record-high energy costs also appear to be weighing on housing demand. We’re also seeing an anticipated withdrawal of investors/speculators from the market, following a major influx in 2004-2005.” Derived from a monthly survey that NAHB has been conducting for 21 years, the HMI gauges builder perceptions of current single-family home sales, sales expectations for the next six months and traffic of prospective buyers. Any number over 50 indicates that more builders view sales conditions as good than poor. All three component indexes declined in August: current single-family home sales fell seven points to 36, while sales expectations and prospective buyer traffic both fell six points, to 40 and 21, respectively. Regionally, the HMI dropped three points to 34 in the Northeast, five points to 15 in the Midwest, nine points to 41 in the South and 10 points to 42 in the West. “It’s important to recognize that home sales and housing production are subsiding from record levels a year ago, and those levels clearly were unsustainable,” said Seiders. “We expect the erosion in market activity to continue through most of this year before stabilizing in 2007.” Seiders also noted that, historically, builder sentiment on the HMI has tended to contract by a greater margin than actual sales and production activity. “On the bright side for consumers, the economy continues to be in fundamentally good shape, mortgage rates remain near historic lows, house price gains are decelerating and builders are offering substantial buyer incentives to keep their inventories down,” Seiders said. “Such favorable market conditions certainly are grounds for optimism among those in the market to buy new homes.”
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: Using Wall-Sheathing as Insulation Stops
I switched to blown-in cellulose insulation in the attics of new homes a few years ago. But while watching the installers prepping one job, I saw all the trouble that they had to go to — stapling cardboard insulation stops between the rafters or trusses above the exterior-wall plates ― just to keep the insulation from falling down into the soffit. So I came up with the idea to make the job easier and just as effective. As you can see in the accompanying drawing, I let the exterior-wall sheathing extend above the top plate and become an integral insulation stop. Here’s what I do:
I use expanding spray foam to seal any gaps between the truss and the wall sheathing so that no insulation can slip by. All in all, the extra work saves me more than it costs me in time because the insulators don’t have to charge for crawling on their bellies to staple up cardboard stops. Plus, I think it’s a better detail. — Mike Guertin, East Greenwich, R.I. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Mary Lou von der Lancken at Fine Homebuilding.
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Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. Explore the latest housing industry news and information on — 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. Investors Coming Back to Haunt Florida BuildersBuilders in Florida who grew accustomed during the industry’s recent boom times to selling out their developments even before a shovel went into the ground are noticing a stark shift in the marketplace and could find themselves in trouble if they don’t take steps to manage investors who are nearing closing day with neither the intention nor the means to close on those sales. “Get control over those investors before they close,” Robert J. Kanjian, president of Building Solutions LLC in West Palm Beach, warned builders attending the Southeast Building Conference earlier this month in Orlando, Fla. “Get your sales team’s head out of the sand. What are investors going to do? Can they close? Today, you want the closing,” he said, and builders facing a problem with investors can “get ahead of them on that deal” by using assignment options. Kanjian noted that the “good days” where deals were sold on lotteries and one development could rack up $37 million in presales and sell out in four hours are over. With many sales off 50% or more from their peak, the big investor market that held steady in the state up to about last May “stopped sooner and deeper than expected,” he said. “Those people we sold to, we’re dealing with that today, because most of them were investors,” Kanjian said, and not the traditional garden variety of investor who purchases property to rent it for awhile and then eventually sell it. The typical investor who populated Florida’s go-go residential real estate market is “the same guy who thought investment in the Internet was a good deal a couple of years ago,” Kanjian said. People started trading on their 401(k)’s and taking out equity lines to make relatively small deposits on properties they expected to be able to flip for a big profit. A Problem With Pre-Sales But two things happened on the way to the payoff: last year’s hurricane season brought an end to the bullish psychology driving up prices and buyers no longer feel impelled to rush to a sales office on the day that the for-sale signs go up. And, compounding that piece of bad news, builders’ costs went up 25%-30% after Katrina, Rita and Wilma blew through, to levels exceeding pre-sales prices. For instance, he said, in West Palm Beach, where 300 to 500 condominium units are coming off the boards every day, the pre-sales price was averaging $175 to $200 a square foot. Today, the cost of completing those units is coming in at least at $200 a square foot and many developers are realizing they may have paid too much for land. Under that set of circumstances, “you need to be mining the backlog now,” Kanjian said, and “you need to be finding out what investors are doing. They didn’t put options in, so their homes aren’t going to be the easiest to sell, although they may be the least expensive. Even if the investor wants to flip it, there aren’t a lot of buyers,” because people are waiting for prices to drop, Kanjian said, even if it isn’t possible to build for the prices they want to pay. Taking Back Contracts Kanjian suggested that builders should use assignment agreements to take back contracts from investors who are not ready to close and initiate a resale program. Even though current prices are stagnating, they still typically exceed pre-sales levels, so that investors can undercut the builders on prices they are asking for their unsold inventory. However, this can work to the builder’s advantage, if a deal is structured in which the original buyer is able to recover the deposit plus some cash out of the higher resale price. If you don’t let investors assign their contracts, they will try to flip them anyway, and start controlling the builder’s sales price, he said. “I want to get them off the market. They’re killing me when there are all of those for-sale signs in the community.” If prices do go down, investors could be hurt and forced to give up their deposits, but “we’re not seeing it yet,” Kanjian said. To get this program off the ground, Kanjian suggested setting up someone in the office to act as a liaison who is responsible for assignments, “a person who understands the game.” He added that it is possible to double the profit on a sale made last year. Plus, “you don’t want to know you don’t have a closing at the last minute. You want to know a few months in advance to plan for it.” Kanjian also emphasized that builders are relying on “salespeople who haven’t been in a tough market before,” and they need to “get those people prepared for the tough market we’re in.” Kanjian also said that builders experiencing inventory problems should monitor Realtor® listings to ensure that their homes aren’t competing with investor homes. “You want to know if you’re selling a home for $400,000 and it’s listed for $335,000 and ‘bring all offers.’” The buyer will typically need to obtain permission from the builder to legally list the property. If there is a silver lining to the predicament that Florida builders are now finding themselves in, Kanjian said, it is that more than a year into the slowdown “we haven’t seen prices go down.” This provides an opportunity to convey to the home-buying public the message that costs have gone up too much for builders to be able to sell their homes for less. In the current down market, housing affordability constraints continue to grow, he said, and not just because of rising mortgage interest rates: property taxes and insurance now account for 40% of an average housing payment in Florida. Florida’s Insurance Crisis There was a clear consensus among SEBC delegates that the crisis in property and builders’ risk insurance is the most pressing problem facing the state’s home building today. Outrageous quotes from insurance companies and severe lack of availability were the most common sources of growing frustration. “With respect to insurance, we must think first in terms of availability, then affordability, then sustainability,” said John Wiseman of CORE Construction, the president-elect of the Florida Home Builders Association and chairman of Florida Home Builders Insurance, Inc. “There are no easy answers to this dilemma,” he said, “but I can tell our members that we will be taking part in an upcoming insurance summit with state leaders to explore solutions, and we are pursuing the creation of catastrophic funds at the federal and regional levels.” Register by Aug. 25 for Custom Builder Symposium and Save
Register now for the 2006 Custom Builder Symposium so you don't miss the Aug. 25 early bird registration deadline. Members will save $170 by registering by Aug. 25, non-members will save $70. 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:
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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. Custom Home Builder of Year Nominations Due Aug. 25Are you a master at transforming client wish lists into one-of-a-kind homes that complement both lifestyle and surroundings? Do you have a gift for acquiring that sought-after material or craftsman that will transform a room into a special experience? Have you experienced the thrill of a “first” in home building? If your answers are, “yes,” “yes” and, “I absolutely want to,” then you should apply for NAHB’s newest award, the NAHB Custom Home Builder of the Year. But you have to hurry. The application deadline for nominations is Friday, Aug. 25 (extended from Aug. 15). To submit your nomination form online, click here. Sponsored by Dryvit Systems, Inc., the award recognizes the best of the best in a unique segment of the home building industry — those who craft exceptional custom homes for discerning clients and are leaders in the industry and their community. Award winners will be honored during the 2006 Custom Builder Symposium at the Hyatt Regency Lake Las Vegas Resort on Oct. 27-29. To learn more about the award and to apply, click here. To register for the symposium, click here.
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+ Housing Awards Change Stripes, But Not Focus
But the awards program honoring the best of the best in 50+ housing is undergoing more than just a name change. Along with the new name, The Best of 50+ Housing Awards will also have a: New Venue Beginning in 2007, The Best of 50+ Housing Awards will be presented during the Building for Boomers & Beyond: 50+ Housing Symposium. For 2007, the symposium is being held May 30-June 1 in Denver. The award presentation will be on May 31. New Timeline Because of the changes in the venue and date of the awards presentation, the entry deadline for the awards will be March 1. New Web Page Call-for-entries materials will be available at the award program's new Web page: www.nahb.org/50plusawards beginning in December. Save the Date for 2007 50+ Housing Symposium Mark May 30-June 1, 2007 on your calendars to attend the 50+ Housing Symposium. The seniors housing symposium is the premier educational and networking event for industry professionals who serve the burgeoning 50+ market. Visit www.nahb.org/build4boomers for more information.
“Boomers on the Horizon: Housing Preferences of the 55+ Market,” available through BuilderBooks.com, can help you better build and market homes to this age group. Capitalize on the niches, needs and opportunities of this rapidly growing market by learning their preferences. To view or purchase this publication online, click here, or call 800-223-2665. Remodelers Report Weakening Market ConditionsMoving in tandem with a general slowdown in the home building industry, the nation’s remodelers reported some deterioration in market conditions during this year’s second quarter and were less optimistic about the near-term outlook for their businesses, according to the latest NAHB Remodeling Market Index (RMI), which was compiled earlier this month. The RMI measures remodelers’ perceptions of both current market conditions and future expectations. The former moved down from 48.1 to 45.6 and the latter dropped from 48.9 to 43.5. Any number over 50 indicates that the majority of those surveyed see the market growing. The RMI for owner-occupied units moved from 53.8 to 49.0 in the second quarter, while renter-occupied units increased from 36.7 to 39.0. Expectations for owner-occupied units and rentals declined from 53.2 to 47.2 and 30.4 to 28.8, respectively. Remodeling of rental properties accounts for a full third of total remodeling expenditures. “We expected lower sentiment as the overall housing market slows, and the second quarter numbers certainly reflect that,” said NAHB Remodelors™ Council Chairman Vince Butler, CGR, CAPS, GMB. “However, the remodeling market should perform relatively well as the overall housing market slows.” “Remodeling is less volatile than new home construction partly because nearly half of all expenditures represent non-discretionary maintenance and repair projects,” said NAHB Chief Economist Dave Seiders. “The average age of the housing stock is 32 years and rising — well past the time when major home systems need replacement. Supported by more than $11 trillion in home-owner equity, the fundamentals of the remodeling market will remain strong for the foreseeable future.” A special question attached to the latest survey asked about trends in home modifications related to aging-in-place. Of the remodeling companies that were surveyed, 60% reported that they are performing these jobs, and of those, 76% said they had clients who were 55 to 64 years old, 67% had clients 65 and older and 43% had 45- to 54-year-old clients. Additionally, 75% said that requests for aging-in-place features were on the upswing. Among the reasons why customers are requesting aging-in-place modifications:
For more information, e-mail Jim Lapides at NAHB, or call him at 800-368-5242 x8451.
How Does Your Remodeling Business Measure Up?
Conducted by the NAHB Economics Group and the Remodelors™ Council, the study provides a statistically accurate analysis of the remodeling industry in terms of size, profitability, time in the business, business organization and staffing. The study allows remodelers to compare key business statistics, such as gross and net profit margins, against results from the most successful remodelers. To order the “Remodelers’ Cost of Doing Business Study” online, click here, or call 800-223-2665. IRM Research to Focus on the Wired HomeNAHB’s Institute of Residential Marketing (IRM) has initiated research on how builders and other building professionals can more effectively and profitably collaborate with residential electronic systems contractors (RESC) to create wired homes that meet consumer needs. The research will be conducted as a joint venture with the Custom Electronics Design & Installation Association (CEDIA), an international trade association of companies that specialize in designing and installing electronic systems for the home. The research is being conducted as part of this year’s IRM Research Initiative. The research results will be presented at the 2007 International Builders’ Show in Orlando, Fla. in February. More new home builders are providing home technology integration (HTI) packages to their customers that include Category 5-enhanced data cables, distributed audio and video networks and fiber-optic cables. Builders are beginning to understand how to best meet the connectivity needs of their customers in the short-term and to anticipate and fulfill their future needs. The research will focus on understanding RESC's role and the training needed to:
Research results will be presented at the builders' show by August, the NAHB Research Center and representatives from CEDIA, who will be on hand to answer questions about the research findings. After the builders' show, results will be made available to the public and NAHB members on NAHB’s Web site, www.nahb.org. To learn more about the IRM Research Initiative and how to submit proposals, visit www.nahb.org/MIRM. For information about CEDIA, visit www.cedia.net.
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.
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.
“Sales and Marketing Checklists for Profit-Driven Home Builders,” available through BuilderBooks.com, covers the major steps involved in successful new home sales. Learn the ins and outs of the comprehensive contract, the move-in, warranty service, asking for referrals and a great close. This expanded second edition includes a new chapter on utilizing technology in your marketing and a more extensive chapter on mulitcultural sales. To view or purchase this publication online, click here, or call 800-223-2665. 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. Learn More Before NAHB's Fall Board MeetingAre you currently working on a designation or needing to take some continuing education courses to retain your designation? Now, you have the opportunity to take a course — or two — before this year’s NAHB Fall Board of Directors Meeting in Salt Lake City. The courses being offered include:
Register today and see how you can learn more and earn more with The NAHB University of Housing. For more information about designations or courses, call the NAHB Professional Designation Help Line at 800-368-5242 x8154. 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. Three New Green Building Programs Follow NAHB ModelThe first statewide green building certification program based on NAHB’s Model Green Home Building Guidelines is being launched by the Michigan Association of Home Builders (MAHB). In a unanimous vote at its summer convention, the state board of directors approved the formation of Green Built Michigan, Inc. The nonprofit foundation will oversee the green building programs for all 35 local home building associations in the Great Lake State. Meanwhile, two Ohio associations have joined forces to create the Northeast Ohio Green Building Initiative and the Home Builders Association of Greater Dallas is launching the Green Building Program, both based on the NAHB model guidelines. All three new programs benefited from the promotional and administrative support of the Green Building Initiative, which is working with NAHB to launch programs in select markets around the country. Having a statewide program is a great advantage for Michigan builders, especially those who belong to smaller local home builders associations, said Joanne Theunissen of Howling Hammer Builders, Inc., in Mount Pleasant and the chair of MAHB’s Green Build Task Force. “If the local association chooses not to create a chapter or is too small to manage one, builders can still join Green Built Michigan as members at large and avail themselves of the educational and marketing opportunities that the new foundation will offer,” she said. “That’s a very exciting thing in a state that is undergoing some significant economic issues,” due to shrinking employment in the automobile and associated industries. Green Built Michigan started as an initiative of the Home and Building Association of Greater Grand Rapids, which has certified green-built projects for several years. The new nonprofit will continue to be housed at the Grand Rapids HBA, but will have its own budget and employees. The green building programs in Grand Rapids and in the Home Builders Association of the Grand Traverse Area will become chapters of the new statewide program. Green Built Michigan hopes to take advantage of its nonprofit status to attract sponsors to help defray the new program’s administrative and promotional costs. It will also present educational seminars for builders to promote green building practices and raise money for the program. “Green Building for Building Professionals,” an NAHB University of Housing course, will be offered at Grand Rapids and the BIA of Southeastern Michigan in September. The GBI is also helping to create a training program for professionals interested in the certification process, Theunissen said, but its invitation to the local utility company to partner on certifying green homes was turned down, the one negative note in a good-news story for a state facing significant challenges for home builders. “In the midst of tremendous economic difficulties across our industry- and manufacturing-dependent state, we need all the help we can get to keep residential building strong,” Theunissen said in an e-mail to NAHB green building program leaders and subcommittee members. “It’s our hope now that a number of our builder and associate members statewide will see the benefits of going green to help meet the needs for energy conservation, setting themselves apart from the competition and keeping their own businesses viable.” The certification program is affordable as well, with projects costing builders between $200 and $400 per home. Theunissen said that the voluntary nature of the program is key to ensuring that green building enters the mainstream, especially for entry-level houses, whose owners are least likely to be able to afford high energy bills. Theunissen’s company builds homes at all price points, but one recent project illustrates why oppressive mandates and expensive certification programs have relegated green building too long to niche status. “This was a family who had raised five kids in a trailer and could finally move up to a single-family home,” she said. “If I had to deal with expensive mandates, I could never have accommodated these people and chosen features that would work for them.” In Ohio, the new green building program is the result of hard work and long hours by builder volunteers like David Payne of Payne & Payne Builders, said Nate Coffman, executive director of the Home Builders Association of Greater Cleveland. “Cleveland is kind of conservative, and our association is doing the forward thinking here,” Payne said. “When we tell people about the benefits and the opportunities, once they understand it, they really want it. There’s definitely momentum. People are looking for a residential solution for green building. There are other programs out there but not as user-friendly as the guidelines.” Cleveland is partnering with the North Coast Building Industry Association in the Northeast Ohio Green Building Initiative and is planning a fall launch during CiTiRAMA, a single-site parade of homes that will take place Oct. 7 to 15, Coffman said. This year’s CiTiRAMA will include 10 homes, three of which will be green, and all of which will be built on the site of the city’s old St. Luke’s Hospital. Called St. Luke’s Pointe, the infill development will bring new life to what was a blighted neighborhood, he said. Forty Cleveland builder and associate members are cooperating on a 2,000-square-foot green house that features recycled cellulose insulation, decorative awnings fashioned from recycled steel made years ago in Cleveland factories, no-VOC paint and wallpaper made from recycled wood. James Hardie, Carrier, Nu-Wool insulation and Sherwin-Williams are among the vendors donating products for the green showhouse. The biggest driver for the program is growing consumer interest in energy-efficient products, said North Coast BIA executive officer Rocco Fana Jr. “It’s what we are all hearing about these days, and we wanted to put green building out there as more than just tree-hugging. It’s about using different materials, paying attention to how the house is laid out. It’s the simple things. I like to refer to it as high-performance housing,” he said. It will take a while to ramp up and get the majority of builder members on board, “but we want to be ready,” Fana said. “We want to have the resources to help our members differentiate themselves from other builders in the area and set themselves apart.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Get Green Building Intelligence Today at BuilderBooks.com
“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. Save the Date for 2007 National Green Building Conference Mark your calendar for March 25-27 for the National Green Building Conference. Visit www.nahb.org/greenbuilding for more information. Austin Eyes Making New Homes Zero-Energy ReadyThe Austin, Texas City Council has created a zero-energy task force to look at adopting a building code change that would require all new single-family homes to be “zero-energy capable” by 2015. Ray Tonjes, chair of NAHB’s Green Building Subcommittee, is serving as a task force member. Zero-energy homes are able to generate their own power, usually through the use of solar panels or wind turbines. They are connected to the existing utility grids so that they can use regular electric power on cloudy days, for example, and “sell” the power back on especially sunny days. While Austin is the first city to consider such an initiative, it makes sense in a community that is considered a pioneer in the green building movement, say NAHB’s green building leaders. “It really tracks with what the Department of Energy is advocating,” said Tonjes. “The value of having a midsized city starting this initiative is you have a very receptive building industry and community that can realistically make it happen. With that being said, it’s going to take a whole lot of dedicated involvement and a very strong position of public-private partnership to be able to do it.” The initiative is tied to a program called Vision Texas, which works to provide affordable workforce housing. High-efficiency “starter” homes would be of great interest to builders elsewhere in the country and a great step forward for mainstream green building, Tonjes said. “I expect to see a lot of energy efficiency jumps to be taken at the municipal level through new or existing green building programs,” agreed John Ritterpusch, green building and energy codes director for NAHB. “The key phrase is ‘zero energy capable,’ which means the house will be made zero-energy by plugging in a future photovoltaic or wind generator or combination of renewable energy units down the road.” In the meantime, the houses can run on conventional power. Consumer behavior is key to true zero-energy capability, he noted. Dishwashers run half-full and other examples of inefficient appliance use will quickly erase any benefits that are gained. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Apply for Green Building AwardsEntries are now being sought for NAHB’s National Green Building Awards, which recognize individuals, companies and organizations for helping to move green into the mainstream of the housing industry through their designs and construction practices. New this year is a green land development award, which honors resource-efficient site design and development practices, including onsite recycling, preservation of trees and innovative storm water retentiion features. The annual awards will be presented during ceremonies at the association’s National Green Building Conference, which will be held in St. Louis on March 25 to 27. The awards honor achievements in seven categories:
For project awards, construction must have been started by June 2005 and substantially completed by December 2006. To enter by mail, send a hard copy and a disk of the completed application. For an application form and instructions on how to send logos, project photos and other artwork, click here. Winners will be notified by Feb. 15, 2007. For additional information, e-mail Emily English at NAHB, or call her at 800-368-5242 x8366. Get Green Building Intelligence Today at BuilderBooks.com “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.
Save the Date for 2007 National Green Building Conference Mark your calendar for March 25-27 for the National Green Building Conference. Visit www.nahb.org/greenbuilding for more information. Mark your calendar for March 25-27 for the National Green Building Conference. Visit for more information. Quality Helps Builders Excel in Tough MarketsIn today’s more challenging marketplace, where builders are increasingly highlighting construction features and offering financial incentives, promoting the ability to delivery quality results is also helping companies distinguish themselves from the competition, according to Quality Matters, the e-newsletter of the National Housing Quality Program. “Presenting your quality story is an effective way to move beyond the standard sales and marketing pitch and give substance to your achievements,” according to the publication. Some of the following methods can be used to publicize a company’s commitment to quality among potential home buyers:
For more information, click here for the NHQ Web page, or e-mail Don Carr, NHQ Certified Builder program manager. Implement Procedures and Standards to Increase Quality Standardize each step of the construction process by implementing the tools and procedures in “The Scopes of Work Program: Procedures and Standards to Increase Quality,” available through BuilderBooks.com. Field tested by builders concerned with quality issues, this program has proven to significantly reduce warranty work. "The Scopes of Work Program" will help you:
To view or purchase this publication online, click here, or call 800- 223-2665 to order. NAHB Fighting Disputes Over Liability Insurance ClaimsNAHB is stepping up its legal response to some insurers who are attempting to avoid insurance coverage in all construction defect claims by arguing that the property damage involved in these cases — typically caused by a defective building product or the faulty work of a subcontractor — does not meet one of the three main requirements for coverage under comprehensive general liability (CGL) insurance. Under dispute is the insurers’ interpretation of a policy’s “occurrence” requirement, which in effect requires the property damage to be unexpected and not intended by the insured party in order for it to be covered. Insurance companies are denying coverage by arguing that property damage resulting from a construction defect can never meet this requirement because, as a matter of law, any property damage to a house resulting from a construction defect is expected or intended by the builder. Therefore, this type of damage can never be covered by insurance. NAHB has filed friend-of-the-court briefs in several cases, challenging the insurers’ rigid interpretation of the “occurrence” requirement on the grounds that it is overly broad and is not supported by any language in the insurance policy. The attempt by insurers to avoid coverage in all construction defect cases by expanding the policy’s “occurrence” requirement would deprive builders of valuable insurance for which they have paid substantial premiums. NAHB is interested in hearing from association members who know of any cases involving this issue currently in the courts. E-mail David Jaffe at NAHB, or call him at 800-368-5242 x8317.
“Contracts and Liability, 5th Edition,” available through BuilderBooks.com, shows builders how to reduce or eliminate litigation costs by learning how to write better contracts. NAHB staff attorneys provide you with vital knowledge concerning the basic elements of a warranty; drafting tips and formats; potential pitfalls; implied and statutory requirements; claim procedures; and limitations of liability. To view or purchase this publication online, click here, or call 800-223-2665. Free NAHB Moisture Protection Pamphlet for Siding InstallersNAHB’s popular how-to pamphlet for siding installers, “Moisture Protection of Exterior Walls — An Installer’s Guide,” has been updated and is available free to NAHB members. It is available in English and Spanish. The pamphlet was updated by NAHB’s Building Product Issues Committee and the NAHB Research Center and provides tips for several types of siding and veneer applications ― including brick, manufactured stone, stucco, thin brick and EIF systems over wood sheathing or paper-backed products. “Moisture Protection of Exterior Walls — An Installer’s Guide” provides guidance on:
To obtain bulk copies, call Cynthia Day at NAHB at 800-368-5242 x8291.
“Contracts and Liability, 5th Edition,” available through BuilderBooks.com, shows builders how to reduce or eliminate litigation costs by learning how to write better contracts. NAHB staff attorneys provide you with vital knowledge concerning the basic elements of a warranty; drafting tips and formats; potential pitfalls; implied and statutory requirements; claim procedures; and limitations of liability. To view or purchase this publication online, click here, or call 800-223-2665. Register for Sept. 7-8 Construction Law Seminar in San Francisco
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.
“Contracts and Liability, 5th Edition,” available through BuilderBooks.com, shows builders how to reduce or eliminate litigation costs by learning how to write better contracts. NAHB staff attorneys provide you with vital knowledge concerning the basic elements of a warranty; drafting tips and formats; potential pitfalls; implied and statutory requirements; claim procedures; and limitations of liability. To view or purchase this publication online, click here, or call 800-223-2665. Apply for 2006 Workforce Housing AwardsNAHB 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, 2004 and Oct. 27, 2006, are eligible to enter. Entries must be postmarked by Oct. 27. 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 specific entry guidelines and an entry form, click here. For more information on the awards, click here; or e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583. HBI and Junior Achievement Promote Careers in HousingHome Builders Institute (HBI) and Junior Achievement (JA) Worldwide™ have formed a unique partnership to inform high school students about the many career paths available to them in residential construction. While HBI hosts several programs to promote home building as a career, there is a vast need for more information to reach high school students and those influencing their career decisions. Currently, through its volunteer network, JA has access to more than 7 million K-12 students across the country. The new program combines HBI’s Business Ventures in the Residential Construction Industry and JA’s work-readiness Success Skills™ curriculum. For this initiative, HBI is relying upon local home builders associations to provide students with an insider’s view of opportunities in the home building industry. HBI is providing $1,000 in seed funding to each of the 14 JA sites where the program is being introduced, and there is already a waiting list of additional sites. The new HBI initiative originated in Kentucky and is based on a program of the HBA of Kentucky and JA of the Bluegrass. Bob Weiss, an HBI trustee and the association’s executive officer, helped get that program off the ground. “I have been working in this industry for more than 30 years,” said Weiss, “and I know the possibilities it offers young people for a successful future. JA is an ideal partner to reach the next generation of workers while they are still in the classroom.” “JA Worldwide is pleased to join with Home Builders Institute to help deliver JA Success Skills to high school students,” said Thomas Dewar, senior vice president of development for JA Worldwide. “The program prepares students to enter the workforce by providing them with valuable team building, communication and work readiness skills. We’re grateful for HBI’s support, which will help us reach more students with this important program.” For more information on the partnership, e-mail Deanna Lewis at HBI, or call her at 800-795-7955 x8927. Schneider Electric Technology Boosts Builder Profitability
Initi@tive 2006 will showcase such products as Schneider Electric’s Square D Multi-Link System structured wiring — a comprehensive home network solution that maximizes the use of home technology with an infrastructure to support home offices, local area networks, high-speed Internet access and more. The Square D Multi-Link System enables home owners to control video from any room of the house and add system functionality at any time. Headquartered in Palatine, Ill., Schneider Electric North America is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. “Initi@tive 2006 is a landmark event that will demonstrate Schneider Electric’s technology and provide companies with the insight and knowledge necessary to operate more efficiently, more productively and more profitably,” said Dave Petratis, president and CEO of Schneider Electric’s North American operating division. “Schneider Electric has successfully hosted Initi@tives all over the world, but this is the first of its kind in the United States.” Initi@tive 2006 will introduce Schneider Electric’s leading-edge technology through a series of information-packed seminars and exhibitions for several specific industries, including residential construction, automation systems, HVAC and others. In addition, Initi@tive 2006 will highlight solutions for improving energy efficiency, as well as its PowerBuilders™ partnership program to help builders sell more electrical and home networking options and upgrades. For more information about Initi@tive 2006, contact Jen Dirks at 262-938-5565. For more information about Schneider Electric's PowerBuilders™ program, call Rich Korthauer at 859-245-7922. This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page. NAHB-Produced Programs on HGTV & DIY This WeekThe NAHB Production Group produces four weekly television shows on HGTV and DIY for consumers. The following is this week's lineup: "I Want That" on HGTV
"Dream Builders" on HGTV
"Rock Solid" on DIY |