Nation's Building News Online: October 9, 2006Print All Articles Text Version |
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Builders Win Big in First Code Hearing RoundNAHB scored significant wins for construction design, safety, security and affordability at the annual meeting of the International Code Council in Orlando, Fla., where more than 2,200 code change proposals were presented for consideration. After a grueling 11 days, each filled with 12 to 14 hours of code hearings, the arguments presented by NAHB staff and member volunteers resulted in favorable votes on a number of key proposals advocated by NAHB, manufacturers and other interest groups. Among the big victories:
For example, NAHB did not gain approval for a proposal added during the 2004 to 2005 cycle to eliminate very costly and onerous requirements for anchorage at the top of basement walls. The requirements were based solely on the calculated capacity of the anchor bolts and sill plate and did not consider the historical performance of the current standard practice for anchoring the top basement walls to the framing, where few failures have occurred, NAHB argued. A successful floor action for “approval as submitted” ensures that this item will be on the agenda for the Final Action Hearings in Rochester, N.Y. in May. NAHB also did not get approval for a proposal to allow the use of the wind exposure category that results when all homes in a housing development are completed, instead of the exposure that exists when each individual house is constructed. Some jurisdictions allow this now, but it is not specifically addressed by the IRC. NAHB plans to modify its proposal to address the reasons given for disapproval and will submit the modified proposal for reconsideration at the final hearings. Overall, with significant victories on these issues and others, NAHB and future home buyers were big winners at this first round of code hearings. For a story in this week's issue of NBN on the outcome of the code hearings for multifamily builders, click here. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Housing in Next 10 Years to Outshine Previous DecadeFrom now through 2015, housing starts are unlikely to exceed last year’s record 2.073 million single-family and multifamily units, according to the long-term forecast just published by economists at NAHB. However, starts won’t be too far from the record in at least a couple of those years, and on average will exceed those of the previous 10-year period. The real value of residential construction will exceed previous decades by an even wider margin, the forecast says, partly because the size of new homes is expected to continue drifting upward, but even more because of the addition of amenities and equipment demanded by baby boomers trading up. Production, including manufactured homes, will average about 2 million units per year over the decade, “but average production will be lower in the first half of that period as excess vacancies are absorbed and only a few of the people born in the 1980s establish households,” says NAHB. The upward trend in housing foreseen for the next 10 years will be largely driven by demographic trends, the forecast says, and not by interest rates. Mortgage rates appear to have already peaked in the current slowdown, and the Federal Reserve is unlikely to change today’s 5.25% federal funds rate for some time. The NAHB forecast assumes the Fed will begin easing eventually, but won’t return to the low rates that helped propel the housing boom, with the funds rate averaging in the 4% range for the final seven years of the forecast period. Fixed-rate mortgages, now around 6.5%, will gradually rise to about 7.0%, compared to the 5.8%-5.9% average of 2003-2005. No More Free Lunch “In recent years, financing costs fell to their lowest point in half a century,” the forecast says, “while returns from alternative investments fell and the actual and expected gains from home appreciation rose….To the extent that recent experience created expectations about future appreciation, the expected cost of owning a home was less than zero, since the rate of appreciation was greater than the rate of interest.” In the years that lie ahead, the NAHB analysis says, “mortgage rates will be higher, while the unsustainable rate of appreciation in home prices will move lower. Homeownership will still attract most households, but it will no longer appear to be a free lunch. With strong competition from the condo market, the single-family share of new units produced will slip from the record 77% of last year to about 70% during 2010 to 2015, according to the forecast, which will still be higher than the 67% average share of the 1990s and the 57% share of the 1980s. Driven by overall growth and aging of the adult population, the number of households is forecast to grow by about 1.5 million annually from 2006 to 2015, more than at any time since the early 1970s, when the initial household formations of the baby boom and an increase in the divorce rate, caused a surge in new households. The number of households grew by an average of 1.28 million from March 2002 to March 2006, according to the Current Population Survey (CPS). Based on population increases alone, that rate should have been closer to 1.4 million. However, there was an increase in the share of adult men living with their parents, and there were also more adults living with siblings or other relatives, the latter partly attributable to immigration. Immigrants Help Pick Up the Slack In the forecast, net immigration, responding to a more restrictive political climate, averages 1.18 million annually, less than the average net migration from April 2000 to July 2005 of 1.21 million in Census Bureau population estimates. Among immigrants, purchasers of new homes during the next several years will generally depend more on the foreign-born population that is already here than on future immigrants. “Most immigrants don’t buy homes immediately upon arrival, and homeownership rates are much lower for non-citizens than for naturalized citizens,” the forecast says. About one-third of the roughly 35 million foreign-born people in the U.S. are naturalized citizens. The retirement of a large number of baby boomers will reduce the rate of growth in the labor force from about 1.4% in 2005 to about 0.6% in 2015, according to NAHB economists, helping to push the sustainable rate of growth in the gross domestic product from between 3.0% and 3.5% now to between 2.4% and 2.9% by 2015. Most of the slowdown in labor force growth will occur after 2011, and it can be ameliorated by more immigration. To Occupy or Not to Occupy As of the second quarter of this year, there were an estimated 16.4 million housing units that were “vacant,” or not occupied as primary residences, representing 13% of the total housing stock, up from 12% from 1996 to 2005. “There was no single factor increasing vacancies,” according to NAHB, “but an increase in purchases of residential real estate for speculative investment purposes contributed,” especially in hot markets in Florida, Arizona, Nevada and parts of California. “Some of the homes purchased by speculators were rented or offered for rent, but many were kept vacant and reported as held off the market or put up for sale.” Data from reports submitted under the Home Mortgage Disclosure Act show the share of loans to purchase one- to four-unit properties that were not for owner occupancy increased from about 5% in the early 1990s to 8% in 2000 and 15% in 2004. “These shares include loans for second homes and loans for long-term rental investment, as well as loans for more speculative purchases.” According to LoanPerformance, a subsidiary of First American Real Estate Solutions, second homes accounted for nearly half of non-occupancy loans in the most recent years, with a further jump in the investor and second home shares in 2005 and a modest decrease in the first half of this year. “In the long term, investors cannot be expected to continue buying homes without rental income, based on hopes of quick gains,” says NAHB. “Indeed, a correction is already underway.” To see a free preview of the NAHB long-term forecast at HousingEconomics.com, click here.
Don't miss NAHB's fall Construction Forecast Conference for the latest economic news about the housing industry. Join NAHB on Oct. 25 for the Construction Forecast Conference — Fall 2006 in Washington, D.C. If you can't attend in person, sign-up for the Webcast. To register for either, visit www.nahb.org/cfc. Play Builders' Free Online Pro Football Game. Don't Miss Out.Don't miss another weekend of NFL games — and your chance to win prizes from HGTVPro. Sign up and play in the Builders Football League (BFL) on HTGVpro.com — the free, online pro football "pick 'em" contest with a special league for NAHB members. Playing is free, fun and easy ― and participants have a chance to win weekly prizes or the grand prize — a Panasonic 61-inch high definition TV — at the end of the season. How to Join and Play
For more information, go to www.nahb.org/bfl. 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. Housing Market Worst May Be Over: GreenspanSounding more optimistic than current Federal Reserve chairman Ben Bernanke, former Fed chairman Alan Greenspan told a meeting in Calgary, Canada sponsored by BMO Financial Group that the worst may be over for the U.S. housing market. “I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out,” Greenspan said. “There is a good chance of coming out of this in good shape, but average housing prices are likely to be down this year relative to 2005. I don’t know, but I think the worst of this may well be over.” Greenspan said that the fall of communism, not sharp interest rate cuts by the Fed, was behind the housing boom in the early part of the decade. Cheap labor flooding into the West after the fall of the Berlin Wall had a disinflationary effect, causing bond yields to fall and house values to rise, he said. Applications for home mortgages jumped in the latest week as both refinancing and new home purchases increased as long-term interest rates declined, according to data from the Mortgage Bond Association. (www.washingtonpost.com)
Housing Hurts, Bernanke SaysPublicly predicting for the first time the likely economic impact of recent drops in home sales, spending on home construction and the rate of home-price appreciation, Federal Reserve Chairman Ben Bernanke told the Economic Club of Washington that the housing market slump will likely slow U.S. economic growth by about a third in the second half of this year and dampen growth early next year. Adjusted for inflation, growth in the nation’s output of goods and services is likely to be shaved by a full percentage point, he said, pushing the annual rate of growth in the Gross Domestic Product down from 3% to 2%. “As you know, a substantial correction is going on in the housing market,” Bernanke said, and this is one of the “major drags causing the economy to slow.” Bernanke said that the Fed would watch closely to see how the housing downturn affects consumer and business behavior, but he indicated that inflationary pressures are a greater risk to the economy, dousing the hopes of some Wall Street traders that the Fed might cut interest rates in coming months to prevent the housing market from dragging down the rest of the economy. (www.washingtonpost.com)
Home Buyers Seen Slowly Gaining More CloutA recent NAHB survey of builders found that 75% of all new construction is currently being offered with an incentive or financial concession. “Buyers are seeing concessions where there has been a frenzied addition of new inventory,” said Gopal Ahluwalia, the association’s vice president for research, and that covers a fair number of markets, but not all of them. Mark Nash, a real estate broker in Chicago and the author of “1001 Tips for Buying and Selling a Home,” said that the proliferation of builder concessions is a sign of excess inventory and not necessarily a buyer’s market across all residential real estate segments. Bonuses for buyers are less obvious in the existing-home market, he added. In Manhattan, “if a property is priced right, there are people out there ready to buy,” says Roger Erickson, senior managing director with Sotheby’s International Realty in New York. Erickson says that he continues to see multiple offers on property that is priced right, not necessarily lower than last year, but just not outrageously higher. Daniel Crosby, a real estate agent affiliated with RE/MAX Vision in Crofton, Md., says that buyers now have more to choose from, with two and three homes for sale within the same community and sometimes on the same street. And while sellers need to work a little harder — offering open houses again, printing color brochures and being more realistic when pricing and marketing — he characterizes the current market as more “normal” than when sellers were simply pounding “For Sale” signs into their lawns and writing a contract two weeks later. (www.msnbc.msn.com)
Home Construction Slumps: Downturn in Industry Nationally Is Being Felt More Acutely in Central OhioA lagging local economy and competition from an unusually large number of existing homes on the market is making the current slump in the housing market more painful in central Ohio than it is nationally. The number of permits for single-family homes this year through July was down 36% in Franklin County and 17% in Delaware County from the same period of last year, and construction in those two counties is only about half of what it was, according to Jim Hilz, executive director of the Building Industry Association of Central Ohio. “The layoffs in the industry — among builders, suppliers and subcontractors — are numerous,” Hilz said. “Our market is down considerably — about 40% to 50%,” said Robert Yoakam Jr., president of Rockford Homes, which locally was building as many as 475 homes a year during the boom. “We’ve been trimming our staff for a year. We knew this was coming,” he said. “Well, here it is.” Hilz is hoping that construction in the area rebounds faster than in some other parts of the country. “We got an early start on the slowdown,” he said. “Hopefully, we’ll come out of it sooner.” However, he added that “it’s hard for us to look at next year and be optimistic. The job market has to improve for the housing market to get better.” (www.dispatch.com)
Designing AmericaOf the 1.716 million single-family homes built last year, 79% were production homes, up from about 60% in the early 1990s, according to NAHB, in large part because smaller, custom builders are being bought up by big builders. While architects continue to complain that the design of these homes is too “formulaic” or that too much attention is spent on such flashy features as granite countertops and not enough on critical elements like framing and mechanical systems, production design has come a long way from the suburbs of the 1950s and ’60s. “Over time, production architects began to promote the idea that people could live in exciting spaces even if they couldn’t afford their own architect,” says Berry Berkus, the Santa Barbara, Calif. designer. For example, in 1989, Washington, D.C.-born architect Chris Lessard created his breakthrough floor plan — the Grand Renoir, which dispensed with the convention that all rooms in a basic rectangular house must be boxy. Instead, he designed a Y-shaped foyer that sets the interior walls in most of the first-floor rooms at an angle and opened up two separate sight lines from the front of the house to the back. Memphis, Tenn. architect Carson Looney came to prominence in 1989 for his revival of the classic Charleston, S.C. shotgun house in his Harbor Town development. One of the earliest “new urbanist” communities, Harbor Town featured the sidewalks, front porches and shallow front yards commonplace in older neighborhoods but unusual for new developments at the time. All were designed to encourage conversation and connection among neighbors. Looney’s designs have appeared in such high-profile communities as Celebration near Orlando, Fla. “I’ve always been impressed with the attention to design detail, even when he’s doing affordable housing,” says Deb Bassert, who oversees the NAHB Design Committee. (www.wsj.com)
New Sizes, Fuels Make Fireplaces a Hot TrendFireplace sales are white-hot, according to the Hearth, Patio and Barbecue Association, soaring to more than 3.2 million units in 2005, up 50% since 1998. Fifty-five percent of U.S. homes have at least one fireplace, according to the association, which is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. So popular are fireplaces, that NAHB has found that they are the third most-wanted feature in new-home construction, behind outdoor porches and upscale kitchens. Today’s fireplace is rarely built onsite of brick and mortar. More than 75% of all fireplaces sold last year were factory-built, with many being direct-vented, so home owners have reduced expenses for chimneys and flues. Growing in popularity, models that fit in kitchen cabinets, bedrooms and bathrooms are enabling fireplaces to show up unexpected places. (www.bostonherald.com)
It’s Time for an Affordable Housing Attitude AdjustmentHave you noticed that affordable housing, aka workforce housing, is suddenly on everyone's radar screen? And for all the right reasons. As the Florida Home Builders Association has been warning for quite some time, an alarming number of Floridians cannot afford to live where they work. In addition, the dilemma extends far beyond service workers, teachers, firefighters and police to people in higher-paying professions who simply cannot afford the price of paradise. A Fort Lauderdale-area couple just fled South Florida for Lawrenceburg, Tenn., where they bought a four-bedroom home on 10 acres for $280,000. I've been to Lawrenceburg, Tenn. and South Beach it ain't. But the price was right. The good news is that people outside the building industry are finally getting it. A few weeks back, I read an article where some of the state's business leaders were complaining that our housing prices were hurting economic development. Ya think? How long have we been saying that companies will stop relocating to a state where their employees cannot find affordable housing? Now, school officials are concerned. According to a report in last week's Wall Street Journal, not only do schools have a difficult time recruiting teachers because of the housing prices (25% of Collier County's new teachers rescinded their contracts because they felt home prices in Naples were too high), student enrollment is flat because young families with school-age children can no longer afford to live here. The problem applies equally to existing and new homes. Pre-owned home prices have increased by 90% since 2001 to $248,000. New homes, which include the pass-along cost of excessive impact fees, are even pricier. According to Coldwell Banker Residential Real Estate, new 2,200-square-foot homes in Orlando sold for an average of $383,000 last summer. Homes that size in Miami averaged $690,855. In six Florida cities, that size home costs more than $500,000. The Florida League of Cities was the most recent to jump on the affordable housing bandwagon, creating an Institute for Community Housing and scheduling a series of workshops to tackle the problem. Make no mistake. Although they are just now waking up to a problem that's been brewing for years, we welcome business leaders, school officials and local governments into the fray. But winning the battle won’t be easy. And it won't be done without a serious attitude adjustment on the part of a lot of people.
Affordable housing is a community problem that must be addressed on a community basis. Now that the issue has everyone's attention, let's solve it. Paul M. Thompson is the senior vice president of the Florida Home Builders Association. Reprinted with permission of the Florida Home Builders Association Governors Urged to Take the Lead on Housing AffordabilityParticipating in a Sept. 21 housing panel discussion hosted by the Republican Governors Association in Las Vegas, NAHB President-elect Brian Catalde warned the governors to avoid following in the footsteps of California, whose excessive regulatory constraints have put a stranglehold on housing affordability in the state. He also advised the governors not to get too caught up in the media hype on the hosuing market slowdown. Governors Kenny Guinn from Nevada, Bill Owens from Colorado and Rick Perry from Texas, and gubernatorial candidates Rep. Bob Beauprez from Colorado and Rep. Jim Gibbons from Nevada listened to Catalde address the current state of the housing market, infrastructure financing alternatives, storm water regulations and regulatory barriers to affordable housing. Kathy Weiss, director of government affairs for Centex Homes, also addressed the governors. As a developer in California, Catalde said he knows all too well how regulations are adding to home building costs. “In my home state, it can take three to four years to get the entitlements you need to develop land for new homes,” he said. “Add the carrying costs of such parcels to the impact fees, concessions and severe restrictions on land use that we frequently encounter, and you easily understand why California has the costliest housing market of any state.” The availability of developable lots has shrunk considerably as a result of the restrictions, he said, and the cost of land alone now constitutes a huge portion — 35% or more — of any new home in the state, he said. Catalde said that it will take “real political will” to solve the problem, and he said that both Republican and Democratic governors can take the lead on the land-use issue, which is really a matter of providing workers with housing they can afford in neighborhoods that are close to their jobs. Catalde provided the governors with copies of “Building for Tomorrow,” an NAHB publication that describes infrastructure financing alternatives that will enable communities to accommodate their housing needs. On the nation’s cooling housing marketplace, Catalde noted that, “Some of the recent media reports are short on facts and long on wild-eyed speculation. To hear them tell it, the sky is falling and there’s nothing anyone can do about it. The fact is, the media always over-hypes the market on the way up and then exaggerates the doom and gloom on the way down.” Catalde said that the record pace of sales and construction activity over the past four years, and annual price appreciation of 20% or more in some markets, was “unsustainable” and “bound to decline.” “It is not, however, the end of the world,” Catalde said. Although it will be painful for builders and sellers in certain markets, he said, the extent of the decline in activity won’t be nearly as great as in the slowdowns of the early 1980s and 1990s, when starts and sales fell by more than 50%. For more information, e-mail Alex Strong at NAHB, or call him at 800-368-5242 x8279. Majority of Americans Have High Hopes for Home ValuesA second annual consumer survey by RBC Capital Markets conducted last month found that the majority of all home owners remain optimistic about the value of their home even in the face of the current market slowdown and have accumulated sizable amounts of equity. Nearly half of all home owners expect to see at least 5% annual increases in the value of their homes over the next few years, which is perhaps too optimistic, RBC said, but down from almost 60% last year. The survey results from more than 1,000 online respondents also showed that 25% of home owners have already paid off their mortgages, twice the 13% who reported they had variable-rate or interest-only mortgages. More than 80% of the home owners surveyed said they had built up at least $50,000 in equity in their homes, and almost 60% said they had at least $100,000 in equity. The RBC poll did detect concern among buyers who entered the market at the end of the housing cycle with riskier mortgages that will have to be renewed. Nearly 40% with variable-rate and interest-only loans reported that they are concerned about their ability to meet the higher payments looming in the future, although 13% said they hadn’t given the ramifications much thought. These two responses came from a fairly small 6% segment of all survey participants. “While real estate expectations are lower than they were last year, consumers seem optimistic despite what we are seeing in the marketplace,” said Scot Ciccarelli, managing director and equity research analyst for RBC. “Declining real estate values could eventually impact consumer spending as people don’t feel as wealthy as they used to and become less likely to borrow against the equity they have built up in their homes.” And while people have built up substantial equity in their homes over the years, Ciccarelli said he was very concerned about many people with risky mortgages who “seem ill-equipped to handle the higher payments they will eventually incur.” Beyond housing, the survey found:
Attend the NAHB Construction Forecast Conference Don't miss NAHB's fall Construction Forecast Conference for the latest economic news about the housing industry. Join NAHB on Oct. 25 for the Construction Forecast Conference — Fall 2006 in Washington, D.C. If you can't attend in person, sign-up for the Webcast. To register for either, visit www.nahb.org/cfc. Want to Know the Housing Starts Through 2014? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. Talks in Sweden Look to Broaden U.S. Lumber SupplyU.S. home builders completed two days of talks with Swedish trade and industry officials last week in an effort to increase exports of softwood lumber and other wood products to America. “The meetings with several large Swedish lumber-producing companies, trade organizations and government officials were extremely productive,” reported Jerry Howard, NAHB’s executive vice president and CEO. “All the parties expressed a strong interest in the U.S. market.” “Our talks were multi-faceted and covered several areas, including establishing contacts among Swedish producers and American buyers and identifying and dealing with any policy barriers to increasing the volume of imports from their current level,” Howard said. “Also, the Swedish Investment Agency expressed an interest in importing American building systems and log homes technology.” The U.S. today does not have the domestic capacity to meet its demand for lumber. While the Canadian market has been supplying the bulk of U.S. imports to fill the shortfall, a new trade pact set to take effect on Nov. 1 will institute a complicated system of border taxes and quotas, creating serious uncertainties for U.S. builders over the availability and price of Canadian lumber. The discussions with Swedish officials followed the recent adoption of policy by the NAHB Board of Directors to help builders once the new pact is implemented. At its meeting in Salt Lake City last month, the board approved a resolution (members-only link) that calls on NAHB to work with the governments of other countries and industry to open up new supplies of “high-quality, stable and affordable” lumber. “Lumber imports from Europe account for only a small share of the U.S. market,” said Howard. “However, those imports nearly doubled in 2005, reaching 2.1 million board feet. We want to build on that momentum, laying a foundation for increasing Swedish lumber exports to America.” Setra Group, Bergkvist-Insjon, Boo-Forssjo, SCA Timber, Sodra Timber, the Invest in Sweden Agency and the Swedish Trade Council were among the organizations that Howard visited. To further build on these initial discussions, Sweden intends to send a high level delegation to the U.S. in the near future to begin a dialogue between U.S. lumber consumers and Swedish producers. This week, Howard and NAHB Immediate Past President David Wilson will be meeting with Russian government and industry officials in Moscow and Saint-Petersburg to provide an overview of the U.S. housing industry and discuss opportunities to increase Russian lumber imports to the U.S. For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. Attend the NAHB Construction Forecast Conference Don't miss NAHB's fall Construction Forecast Conference for the latest economic news about the housing industry. Join NAHB on Oct. 25 for the Construction Forecast Conference — Fall 2006 in Washington, D.C. If you can't attend in person, sign-up for the Webcast. To register for either, visit www.nahb.org/cfc. Want to Know the Housing Starts Through 2014? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. Rural Housing Service Testing Automated UnderwritingIf a pilot program now underway is successful, lenders will soon be able to underwrite Section 502 Guaranteed Rural Housing single-family loans using a new automated underwriting tool. The new Guaranteed Underwriting System (GUS) was developed by U.S. Department of Agriculture Rural Development to automate a task that’s currently being handled manually. A unique feature of the system is that while performing the credit evaluation it determines if a borrower meets the program’s income restrictions and that a property is located in an eligible area. Section 502 Guaranteed Loans are made to qualifying low- and moderate-income families to purchase modest homes in rural areas. The loans are made by mortgage lenders — such as banks, credit unions and mortgage companies — and can be made for up to 100% of the appraised value of the property. “We have been looking forward to the implementation of this system for some time,” said Jess Hall, a home builder from Palmer, Alaska. “It gives lenders yet another tool to meet the borrowing needs of rural home buyers.” The underwriting system will enable participating lenders to receive faster loan decisions, streamlined documentation requirements, better quality loans and more consistency in program delivery. Access to reasonably-priced mortgage credit for low- to moderate-income home buyers who live in rural areas is essential for meeting their housing needs, and NAHB has long advocated increased funding for the single-family and multifamily loan programs provided through the USDA Rural Housing Service. A market test of GUS began on Aug. 1 with a limited number of lenders. Participating lenders in the pilot phase are: First National Bank of Columbus, Neb.; Allied Mortgage Capital Corporation of Rockwell, Texas; American Southwest Mortgage Corp. of Oklahoma City, Okla.; Central National Bank of Junction City, Kan.; Guaranty Trust of Murfreesboro, Tenn.; State Bank of Lincoln of Lincoln, Ill.; The Mortgage Company of Junction City, Kan.; and Virginia Housing Development Authority of Richmond, Va. Additional lenders will be added to the market test later this year in preparation for full GUS implementation in January. For information on Rural Development loan programs, click here. For more information, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8597. Attend the NAHB Construction Forecast Conference Don't miss NAHB's fall Construction Forecast Conference for the latest economic news about the housing industry. Join NAHB on Oct. 25 for the Construction Forecast Conference — Fall 2006 in Washington, D.C. If you can't attend in person, sign-up for the Webcast. To register for either, visit www.nahb.org/cfc. Eye on the Economy: Housing Demand May Be StabilizingGrowth of real Gross Domestic Product (GDP) slipped to an annual rate of 2.6% in the second quarter of 2006, according to the “final” estimate released by the Commerce Department on Sept. 28. This definitely was a below-trend pace with sobering implications for the labor market. The housing production component of the economy — Residential Fixed Investment (RFI) ― was the weakest element of the second-quarter GDP report. Indeed, RFI contracted at an annual rate of 11.1% and subtracted 0.72 of a percentage point from the overall GDP growth rate — a massive swing from the 1.11-point positive contribution delivered a year earlier. The downswing in housing production is also taking a toll on some forms of consumer spending, including the “furniture and household equipment” component of personal consumption expenditures. Third-quarter GDP growth will be even weaker than the second-quarter performance (we’re currently estimating 2.0%), largely reflecting a further downswing in RFI and associated impacts on consumer spending. However, we’re projecting somewhat better GDP growth in the final quarter of this year and in 2007 as the housing downswing becomes less severe and other sectors of the economy gain more strength. Core Inflation Still Looks Troublesome, Despite the Economic Slowdown The evolving slowdown in growth of economic output (real GDP) and payroll employment is bound to relieve upward pressures on unit labor costs and core inflation, and the recent retreat of energy costs inevitably will limit the “leakage” of these costs into the core inflation numbers. Having said that, there definitely are time lags in those relationships and key measures of core inflation still were elevated in August. The core Consumer Price Index (CPI) posted an annualized advance of 2.9% in August and a year-over-year gain of 2.8% — well above the upper end of the Federal Reserve’s implicit comfort zone for the core CPI (2.5%). Of even more importance, the core price index for Personal Consumption Expenditures (PCE) posted a 2.8% annualized gain in August and a year-over-year advance of 2.5% — well above the upper end of the acceptable range from the Fed’s point of view (about 2.0%). The imputed “owners’ equivalent rent of primary residence” once again put perverse upward pressures on both the core CPI and the core PCE price index in August, as home buying continued to weaken and market rents firmed up further. But the core inflation numbers still were somewhat elevated, even after adjustment for this perverse upward pressure. The Fed Is on Hold and Long-Term Interest Rates Are Receding, Despite Core Inflation Readings Both the Federal Reserve and financial market participants have been able to stomach the recently elevated core inflation rates, relying on the evolving economic slowdown and retreating energy prices to relieve upward pressures on core inflation down the line. Indeed, measures of longer-term inflation expectations have been well-anchored in recent months despite the elevated inflation readings. The statement released by the Fed at the conclusion of the Sept. 20 meeting of the Federal Open Market Committee (FOMC) noted the “elevated” readings on core inflation, but argued that “inflation pressures seem likely to moderate over time.” That judgment allowed the FOMC to hold monetary policy steady for the second consecutive meeting, and it’s highly likely that the Fed will maintain the current target for the federal funds rate (5.25%) for the balance of this year and into 2007. The economic slowdown, benign inflation expectations and the prospects for stable (or even easier) monetary policy have combined to produce an impressive bond market rally. Long-term bond and mortgage rates have come down substantially since mid-year, and those rates should remain close to current levels for some time. Housing Demand May Be Stabilizing Following an Abrupt Downshift The recent declines in interest rates and energy costs certainly are positives for housing demand, and home sellers now are offering a variety of price and non-price incentives to bolster sales and limit cancellations. On the other hand, the slowdown in job growth is a negative for demand, measures of housing affordability still are running low and the lure of price appreciation is no longer driving demand by investors/speculators in single-family and condo markets. Data on home sales for August contained some hopeful signals on the demand side of the markets, although it’s still too early to call an end to the downslide. The preliminary estimate of new-home sales for August (contract signings) was up by 4.1% from July. However, the data were revised downward for the May to July period, the trend in sales still appears to be downward and sales cancellations are not captured by this data system. Sales of existing homes (closings) were down only slightly in August, with condos off by 3.5% and sales of single-family homes dead flat. “Pending” sales (contract signings) of existing single-family homes bounced back by 4.3% in August following an abrupt decline in July. Price cutting by sellers of existing homes apparently is helping to stabilize sales activity following more than a year of decline, although one month of preliminary data hardly makes a trend. Sobering signs regarding the condition of housing demand in September are provided by surveys of single-family builders and home mortgage lenders. The NAHB/Wells Fargo Housing Market Index slipped to a level of 30 in early September, the lowest reading since February 1991 (within the 1990-1991 economic recession). The index of applications for mortgages to buy homes (Mortgage Bankers Association series) was up by 3.3% in September, but still was down by 20% on a year-over-year basis. Moreover, it’s entirely possible that the September bounce was a temporary event provoked by the unexpected decline in mortgage rates. Inventory Overhangs Point Toward Further Declines in Housing Production Although sales activity may have stabilized in August (at least temporarily), demand still is in a weakened condition and housing production is likely to decline further in the months ahead. Available data show that the inventory of new and existing homes is at a record level, and those data exclude the market for new condo units as well as single-family homes that are left with builders due to cancellations of sales contracts — exclusions that undoubtedly lead to understatement of the degree to which the true inventory overhang has increased during the past year. The single-family and condo markets also are vulnerable to an influx of “hidden supply” currently held off the market by investors/speculators that bought during the boom of 2004-2005 when ongoing price appreciation seemed like a sure thing. NAHB’s forecast shows further declines in housing starts over the balance of this year and during the first half of 2007, and that pattern keeps the housing production component of GDP (residential fixed investment) on the decline through mid-2007. We’re counting on strong performances by other sectors of the economy, including construction of nonresidential structures, to keep the economy moving ahead reasonably well while the housing adjustment plays out. Attend the NAHB Construction Forecast Conference on Oct, 25 Don't miss NAHB's fall Construction Forecast Conference for the latest economic news about the housing industry. Join NAHB on Wednesday, Oct. 25 for the Construction Forecast Conference — Fall 2006 in Washington, D.C. Attend in person, or sign-up for the Webcast. To register for either, visit www.nahb.org/cfc. Want to Know Your State's Starts Forecast for 2007? 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. D.C.-Area BIAs Promote ‘Buyers Market’ to Boost SalesTwo builders associations in the Washington, D.C. area have teamed up to create a buyer’s market campaign and Web site in order to help generate sales for their members and combat negative media reports about the housing market. The Maryland-National Capital Building Industry Association (MNCBIA) and the Northern Virginia Building Industry Association (NVBIA) launched the “Taking Advantage of a Buyer’s Market” campaign last month to reach out to both consumers and industry professionals and educate them on how to take advantage of the current state of the housing market. The centerpiece of the campaign is a consumer Web site — www.buyersmarket2006.com ― that explains why now is a great time to buy a home. The Web site features the consumer-oriented, downloadable report, “Taking Advantage of a Buyer’s Market.” “Taking Advantage of a Buyer’s Market” explains what a buyer’s market is and informs consumers that, not only do they have a wider selection of new homes to choose from right now, but sellers are more flexible and most new homes are available for early occupancy. The report also reminds prospective buyers that financing is still very affordable. In addition to its availability on the consumer Web site, the report is also being distributed as a four-page advertorial spread in New Homes Guides that target the region’s potential home buyers. The consumer Web site is also helping to promote a spring housing tour planned by both HBAs — the final element of the campaign — by inviting users to sign up online to receive updates about the market. “The tour will be the last push to convert traffic to sales,” said Laura Hampton, NVBIA’s communications director. “We want to convince people that it really is a good time to buy.” The idea for the campaign “grew out of sitting around a table at a lunch last December,” explains Susan Matlick, MNCBIA’s executive vice president. “Members were saying that we needed to do something to encourage people to buy homes.” The associations, along with New Homes Guide representatives, brought in marketing directors to help brainstorm. Matlick, the EO at MNCBIA since 1975, said that the campaign is very different from ones conducted during past market downswings. “In my tenure, we’ve done three ‘buy a home’ campaigns, and the message was always very specific: ‘Buy a home now!’” Matlick said. “This time, it’s more subtle. We’re using the ‘buyer’s market’ theme with the underlying message being that now is a good time to look at your opportunities.” “We need to create urgency in the mind of the buyer,” said Sue Martinez, chair of NVBIA’s Sales and Marketing Council and vice president of sales and marketing at Edgemoore Homes in Fairfax, Va. “Prospects aren’t convinced that the market has bottomed out. They’re worried that they’ll buy and then find a lower price.” Both associations’ members have contributed to the campaign. “Our members are a vital part of the program,” said NVBIA’s Hampton. “Ecendant Interactive, a member, did the Web site, and we’ve had nearly 50 builders commit $1,000 each to the campaign. In return, they get 1,000 reprints of the ‘Taking Advantage of a Buyer’s Market’ report, buttons for their salespeople to wear and signs to put outside their sales offices and along the routes to their communities.” Many of the builders behind the program also are featured on the site in a listing with links to their individual Web sites. The associations have high hopes for the campaign and are working on driving more consumers to the site. In the end, Martinez said, the key to encouraging prospects to take advantage of the market is to create the “emotion and joy” of buying a new home. “The reasons that people buy haven’t changed,” Martinez added. “They’re buying a new home to improve their lives. We need to show that it’s never too soon to improve the quality of their lives, and show how a new home will do that.” Builder's Tip: Emergency Flat-Roof RepairWhen a roof leaks, it’s not the kind of situation where you can schedule a roofer to fix it sometime next month. It needs to be fixed right now. Because most flat roofs turn into small swimming pools in a good rain, if there is a leak, hundreds of gallons of water may find their way inside and cause an amazing amount of damage. I’ve had a lot of years to experiment on patching flat roofs, and the patches that I applied 10 years ago are still good. Here’s why: The primary repair material that I use is called Henry’s Wet Patch. It’s a sticky, black, tar-like substance that can be applied to wet surfaces — even underwater. But my secret is that I use the Wet Patch with aluminum foil and that I have an assistant to help me apply it. Required ingredients also include several garbage bags, some duct tape and a disposable spatula. If you try this fix, you can get the Wet Patch on your hands and arms, so protect them with the garbage bags. Use the duct tape to hold the bags in place. The repair:
This kind of patch lasts a lot longer than a simple gob of Wet Patch spread over a hole in the roof. I believe this is because the Wet Patch seals the leak and that the foil prevents the Wet Patch from outgassing, drying out and ultimately cracking. It doesn’t make for a pretty patch, but it is quick and will last for many years — plenty of time to schedule a new roof. — Kee Nethery, Berkeley, Calif. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Christina Glennon at Fine Homebuilding. BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665. Log In and Explore www.nahb.org Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB. With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you. Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily. Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing. Log in today to start taking advantage of this free NAHB member benefit. Purchase Orders Can Help Lower Your CostsIf you are doing nothing more with variance purchase orders (VPOs) than adding dollars to your original purchase order, you are missing an important management link that could help you lower your costs and increase your profits. Your purchase order system has helped speed up payments to your vendors and trade partners, and you’ve even been able to smooth out schedules somewhat. But are you realizing the full potential of your PO system? According to Mike Benshoof, of SMA Consulting, which provides financial and operational management consulting services for building industry clients and is a member of NAHB's Single Family Production Builders Committee, POs are not merely a different way to pay bills, they are “the most important thing the business uses to communicate internally and externally.” POs, he said, are a way to monitor your quality- and cost-control systems. “Accounting for the biggest portion of your business are your direct costs, so you can leverage more dollars there,” Benshoof said. POs are an effective cost-control tool — when used effectively. “We’re sending the information out to vendors and trades and setting expectations for our costs,” he said. When a PO doesn’t account for every nickel spent at a job site, Benshoof added, home builders need to take a hard look at why. According to Benshoof, SMA analysis of a builder client’s PO system indicated that one of the client’s VPOs cost the builder almost 14 times the invoice on the VPO. The VPO included only a lump sum, with no quantity or pricing information. It took the company more than three months to track down the materials discrepancy and get it corrected. To read more about VPOs as an effective management tool and to learn five ways that a PO system can add long-term value to your business, click here. (This link in the BizTools section of the NAHB Web site is only available to NAHB members.)
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 250 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.
NAHB’s Technology Solutions Directory — an easy-to-use directory that enables builders, remodelers, contractors and other industry professionals to find information on software and IT solutions and services for their businesses — is now online. The directory is sponsored by the Business Management & Information Technology Committee. Software and technology solutions providers interested in being listed can sign up for:
The Technology Solutions Directory is solely for educational and informational purposes. Nothing in the directory should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the listed software, IT service or the software/IT vendor. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained in this directory. Register for Custom Builder Symposium by Oct. 11
Industry veterans who have been there will discuss how to thrive in a changing market at the 2006 Custom Builder Symposium Oct. 27-29 in the Lake Las Vegas Resort, Nev. Registration closes Wednesday, Oct. 11, so register today. Custom builders Tom Stephani, Mike Holmes and Paul Montelongo will lead the interactive discussion during a luncheon session on Saturday, Oct. 28 with the issue continuing to be discussed by participants during roundtables later that day. The symposium features 17 world-class education sessions; a practical take-home workbook packed with tips on marketing, management and customer service; and plenty of networking opportunities. NAHB Custom Builder of the Year to Be Named This year, NAHB's first Custom Home Builder of the Year will be named during a dinner and awards ceremony at the symposium. “This award is the first of its kind,” said Mary Schroeder, chair of the symposium subcommittee. “What makes the award so special is that it will be presented to an outstanding custom home builder by his or her peers.” The celebration will showcase the winner's achievements in constructing one-of-a-kind homes as well as recognize the recipient's leadership in the profession, industry and his community. To register for the dinner, e-mail Marcia Childs at NAHB, or call her at 800-368-5242 x8388. Top-Notch Presenters The symposium will include an impressive lineup of top-notch presenters on topics that matter now, including:
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. Bill Webb, MIRM, shows you how in “Sweet Success in New Home Sales,” available through BuilderBooks.com. This book provides powerful techniques for selling more homes and making more money in leaner times. This book lays out the proven approaches for crafting and delivering sales excellence. To view or purchase this publication online, click here, or call 800-223-2665. 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. Maximize Your Merchandising Investment in the 50+ MarketToday’s boomers know what they want and won’t settle for just a good value. Navigating the critical path of successfully marketing and selling to this consumer in today’s challenging and competitive marketplace demands not only high performance environments that elevate your client’s aspirations, they also demand other merchandising services and strategies that deliver quick results. We all know that marketing to the 50+ buyer can be very rewarding. However, compared to other market segments, you need to be prepared early to invest a substantial amount of time and money and plan for a conservative sales volume prior to the completion of your merchandised models. How can you develop a precise merchandising “plan of action” and utilize your team more effectively and cost efficiently? Identify Each Township’s Unique Building Parameters Each town’s pre-approval requirements vary. You must communicate these requirements to your development team now, not later, so that priorities can be set in place based on how soon you will need certain specifications reviewed and finalized in-house prior to township submission. Avoid potentially cost-prohibitive changes that could ultimately slow down the process. Some townships permit you to make field changes as you build and some don’t, so plan ahead. Exterior/Interior Analysis Recognizing the need for ergonomic analysis of your entire product line, including the clubhouse, will be the first step to making a profitable first impression. Hire a professional merchandiser experienced with the boomer buyer who can partner with your architect at the onset of your project. Today, it is common practice to have your merchandiser perform an initial analysis of the model you are showcasing. However, things often go awry during the building phase when modifications are made “in-house” without a fail-safe. Your plan should include timely field change notification to all involved after scheduled site visits with the designer and construction personnel.
Schedule frequent comprehensive “team” meetings with all involved — the builder, architect, sales management, designers, marketing/advertising, landscaping and construction team. Any small deviation to the original plan could alter the project’s budget and timeline. Keeping everyone in the “loop” maximizes each team member’s professional efficiency. Design Center/Option Analysis Can building a design center and offering the services of a professional design coordinator affect your bottom line? Yes! These buyers really mean it when they say, “I want what I want. Period!” Hiring a merchandiser to help determine pre-packaged “standard” features when you are developing your standard/option list will increase your option exposure and bottom line. No matter what part of the country or what price range you are building in, a “standard features list” is always viewed as a positive. However, if you are in an area that is experiencing a slowdown and high inventory of homes, such as the East Coast, making a decision to limit your “standard” features could ultimately affect sales. It’s important to research your competition and recognize what options are being offered as standard today compared to several months ago in order to strategize and differentiate yourself. Have a more flexible attitude about change in today’s market. Your initial plan to market your community may not be the best one now, when you have a substantial amount of homes to sell. Virtual Tours How can you capture more leads and increase the closing ratio? There isn’t one particular marketing tool responsible for delivering optimal results, but rather a collaboration of several methods that have the necessary reach and frequency. One method that has been proven to increase pre-construction exposure is to include the production of a virtual tour in your marketing budget. Research tells us that the majority of the 50+ market feels no urgency to buy and tends to wait for the models to be built prior to making a commitment. Once you’ve made the decision to move forward with a virtual tour, hiring a professional merchandiser to partner with your production company will exceed your expectations as well as those of your buyers. High-Performance Merchandising Building spacious, elaborate “lifestyle” homes with all the bells and whistles on smaller lots and tighter budgets while still generating sales results is a constant challenge for builders today. High-performance merchandising is the key to selling your community faster. Expect from your merchandiser a design “package” that is state-of-the-art, with special consideration to scale as well as detail. Unlike other target markets, 50+ is not just purchasing for future resale or to bring the kids home permanently. They’re buying “lifestyle” space. When budgets are a concern, choose to showcase fewer models with little compromise vs. several models that lack the proper budget to be effective. As you can see, there’s a lot to consider when creating homes for today’s discerning 50+ market. Now more than ever, great houses don’t just happen…they happen by design. Catherine Daly is president of Medford, N.J.-based Design East, Inc., an award winning design and merchandising consulting firm servicing the building industry for more than 18 years. Daly is the 2006 president of the New Jersey Builders Association’s 50+ Housing Council. For more information, e-mail Daly, or call her at 609-654-9675.
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. Consumer Services for Independent Living HighlightedThe National Aging In Place Council (NAIPC) has designated this week, Oct. 8-14, as National Aging In Place Week. The designation is part of a nationwide consumer awareness campaign to increase seniors' knowledge and access to home and community-based services that promote independent living. Communities in Vermont, California, South Carolina, Massachusetts, Florida, Arizona, Utah, Pennsylvania, Maryland, Colorado, New York and the Washington, D.C. area are conducting seminars and providing resources so seniors can learn more about home safety and fitness, financial planning and budgeting, in-home healthcare and chore services, home accessibility issues, reverse mortgages, transportation and meal services. In addition, NAIPC has organized luncheons for local businesses to meet, network and learn more from each other about the types of services that they provide to older home owners. "An overwhelming majority of older Americans want to remain in their homes for as long as possible, but aren't aware of services that make prolonged independent living possible," said Peter Bell, executive director of NAIPC. “We scheduled National Aging In Place Week in October to encourage thinking about this topic as families start preparing for the holidays. As families gather, it's a perfect time to discuss livability issues for parents and other older relatives." Since the inaugural National Aging In Place Week in 2003, NAIPC's outreach efforts have grown and expanded. During the initial year, educational events were held in six cities. Last year, aging in place events were held in 35 cities, and this year 50 cities are expected to participate. NAIPC serves as an ongoing forum for professionals from the private, public and non-profit sectors and businesses to work together to promote aging in place. Coalition members include remodelers, architects, interior designers, product designers, urban planners and professionals in financing, elder law, social services, healthcare and other disciplines. Home owners benefit when these professionals establish interdisciplinary networks and become better acquainted with the spectrum of resources available. NAIPC also encourages senior citizens, recent retirees and baby boomers to be proactive in planning for their future housing and care needs — and provides ideas and information to help them do so. For more information, visit www.naipc.org.
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.
Code Hearings Yield Victories for Multifamily BuildersAmong the more significant NAHB wins affecting multifamily development at the first round of public hearings to revise the 2006 editions of the International Building Codes (IBC) was approval of a new exemption for multifamily buildings from having to provide areas of refuge as part of the means of egress. The approval indicated that the building code community recognizes the role sprinklers play in providing adequate life safety protection in multifamily construction, according to NAHB staff members and volunteers attending the meeting. NAHB had representatives on eight of the 14 committees at the hearings, which concluded on Oct. 1 in Orlando, Fla. A number of other multifamily-related proposals were defeated, including some that would have significantly increased emergency egress requirements, such as provisions for special stair tread markings, lighted exit strips around doors and the doubling of fire-resistance ratings for corridors. Other proposals defeated during the hearings would have increased the IBC accessibility requirements far beyond what is required by either the Fair Housing Act or the Americans with Disabilities Act. One of those proposals would have increased exponentially the number of accessible parking spaces required. Two defeated proposals would have greatly increased construction costs. One would have mandated continuous air barrier requirements, and the other would have required air leakage testing for all buildings. Many of these first-round decisions will need to be further defended at the International Code Council Final Action Hearings in May, in Rochester, N.Y. NAHB’s Construction, Codes and Standards staff already have begun intensive preparation for those hearings. For a related story in this week’s issue of NBN on the outcome of the code hearings, click here. For more information, e-mail Jeff Inks at NAHB, or call him at 800-368-5242 x8547. Enter Pillars to Be 'Best of the Best' in Multifamily The application deadline for NAHB Multifamily’s 2007 Pillars of the Industry Awards program — which honors excellence in multifamily design, development, marketing and management — is Nov. 30. A showcase of innovation and future trends, Pillars is considered to be the most prestigious national awards competition in the multifamily housing industry. The winners will be honored at a gala ceremony held in conjunction with NAHB Multifamily’s Pillars of the Industry Conference at the Westin Diplomat Resort and Spa in Hollywood, Fla. on April 11-13. For more information and to apply, visit www.nahb.org/pillarsawards, or e-mail Laura Zaner at NAHB, or call her at 800-368-5242 x8563. Save the Date for the Multifamily Pillars of the Industry Conference Attend the Multifamily Pillars of the Industry Conference, the premier industry event for the multifamily industry, on April 11-13 at the Westin Diplomat Resort and Spa in Hollywood, Fla. Visit www.nahb.org/pillars for more information. OSHA Grant to Fund Fall Protection Training ClassesNAHB and the NAHB Research Center are developing a new training program to help home builders better understand fall protection requirements and make their job sites even safer. Money to create the new fall protection classes came from a grant of more than $295,000 awarded by the Occupational Safety and Health Administration (OSHA). The training is designed to help these businesses understand the OSHA fall protection requirements and help them develop effective fall protection plans for a variety of potential hazards. Using the grant money, NAHB and the Research Center will offer free classes to 1,500 small business owners, general contractors and trade contractors — including roofers, framing carpenters and masons. Employees in these trades are often at risk of being injured by fall hazards encountered during day-to-day construction activities. Forty classes, two each in 20 of the top home building markets, will be conducted in 2007. The four-hour classes will be offered in English or Spanish and open to local builders and supervisors and their employees. NAHB Construction Safety & Health Chairman Vern Pottenger of Pottenger Builders in Beaufort, S.C., said that the grant — and the classes — are excellent examples of the positive relationship NAHB is building with OSHA. “We have worked hard to create a partnership for this and for numerous other activities,” such as a seminar on residential home building designed to help OSHA inspectors understand how the industry and its safety issues differ from the needs of commercial construction, he said. “The more we can sit down at the table with OSHA and iron out questions and problems, the better.” The classes also address an important need for home builders and their employees. “Falls are the No. 1 safety problem that we have, nationally, in our industry. This grant enhances our ability to educate and train our workforce, whether it’s through classes, texts or one-on-one interaction. This is a real benefit to the NAHB member,” Pottenger said. OSHA also awarded a grant of almost $162,000 to the Home Builders Association of South Carolina for it to hold 30 four-hour Spanish-language “Big-Four” construction safety seminars focusing on the four most common safety hazards at the job site for residential builders and trade subcontractors. OSHA awarded a total of $10 million to 57 nonprofit organizations for safety and health training and education as part of the Susan Harwood Training Grants program, which supports the development of training materials to educate Hispanic and other limited-English-proficient employees, hard-to-reach employees, employers in small businesses and employees in high-hazard industries and industries with high fatality rates. The awards were named to honor a construction safety standard developer who died in 1996 after a 17-year career at OSHA. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Protect Your Workers and Your Profits The “Jobsite Safety Video,” available through BuilderBooks.com, provides an overview of the key safety issues residential builders and workers need to focus on to reduce accidents and injuries. Based on the “NAHB-OSHA Jobsite Safety Handbook,” this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos. To view or purchase this DVD online, click here, or call 800-223-2665. Got a Remodel to Show Off? Become an HGTV StarHGTV is seeking upscale remodels for it’s one-hour special, "20 Ways to Add Value to Your Home." The network is seeking indoor or outdoor remodels that are completed or in progress ― depending upon the type of remodel. The ideal project for HGTV would be one in which a dramatic change or "makeover" to a home occurs through one of the remodeling projects listed below. The project cannot be a “whole house” remodel, gut or “flip” of a home.
If the project is in progress, HGTV plans to film the process, interview the crew and home owner and record “beauty shots" of the finished product. For completed projects, HGTV will need “before” photos in order to show the home’s transformation. All projects in progress would need to be finished by Friday, Oct. 13 and the home owners would need to be willing to participate for at least one days’ filming and an interview that may take several hours. Attendance and participation by a company representative would be appreciated. The participating company will receive credit on the show and the HGTV Web site. For more information or to discuss a project, contact Jesse Achtenberg at 202-266-8142 or Skye Trimble at 202-747-4622, both of the NAHB Production Group. New Wetlands Rules Easier to Read, But Not Totally ClearThe U.S. Army Corps of Engineers has released proposed regulations for the 2007 Nationwide Permits program, and while it has kept its promise to make the document a little easier to read, it remains to be seen how the program will be carried out in the field, according to NAHB environmental and legal staff. Meanwhile, late last month the U.S. District Court, ruling in National Association of Home Builders v. U.S. Army Corps of Engineers, denied NAHB’s request for more clarity in the regulations and justification for the ever-shrinking threshold for requiring nationwide permits, which has gone from 10 acres to three acres to one-half acre. “The Army Corps of Engineers makes the threshold smaller without offering any reason, and the court says the threshold should stand because the Corps says so,” said Duane Desiderio, NAHB staff vice president for legal affairs. “Where is the logic in that?” The lawsuit was based on the 2002 version of the Nationwide Permit program. The Corps updates the regulations every five years, and home builders will notice four new features in the new permit, NWP 29, said Gary Suskauer, an environmental policy analyst at the association:
Unfortunately, said Suskauer, the GCs have also been entirely reordered, so they will have to be studied before builders and analysts can compare them further to the 2002 version. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Web Training Focuses on Storm Water ManagementThe International Erosion Control Association is offering Web-based training for builders, developers and engineers interested in learning more about storm water Best Management Practices (BMPs). “Stormwater BMP Maintenance” continues this week, while upcoming sessions will cover stream assessment and monitoring, storm water pollution prevention plans and enforcement information. The BMP maintenance classes include information on plant selection, weed control, cleaning, sediment and debris removal and more. The assessment classes include information on functions and processes that are critical to stream health and that enable building industry professionals to conduct assessment, monitoring, inventory and inspection duties and to make the permit process more clear. Class registration information is available at the IECA Web training site.
'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. 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
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. Development in Irvine a Neighborhood With ‘HEART’Recognizing ingenuity in the development, construction and marketing of affordable workforce housing, NAHB honored five communities with its Innovation in Workforce Housing Awards at the International Builders’ Show in Orlando, Fla. in January. In an effort to bring attention to outstanding examples of workforce housing, Nation’s Building News is showcasing the winners of the award in a series of articles. The second development in this series is Montecito Vista in Irvine, Calif. Applications for the 2006 awards are available and the deadline is Oct. 27. For the award guidelines and an entry form, click here.
Developed by Jamboree Housing Corporation, Montecito Vista is a multifamily rental development consisting of 84 two-bedroom, one-bath apartments starting at $510 per month and 78 three-bedroom, two-bath apartments starting at $589 per month. These units will be rented to households earning between 30% and 50% of area median income. Laura Archuleta, president of Jamboree Housing Corp., accepted the award. The development includes a community building, a small library, a computer learning center, as well as outdoor barbecues, on-grade parking and a swimming pool. Jamboree Housing Corp. also offers resident assistance programs, such as child safety courses, tutoring programs, computer learning classes and programs to help residents prepare for career opportunities in the job-rich Irvine area. “Basic shelter is only the beginning when it comes to improving the lives of lower-income residents of affordable housing communities,” Archuleta said. “JHC was one of the first nonprofit housing providers to recognize, and integrate into its program, the vital link between housing and on-site resident services. So strong is this belief that in 2004 Housing with HEART (Helping Educate Activate and Respond Together) became its own 501(c)(3) organization as an affiliate of JHC.”
“Housing with HEART fills a critical gap by providing essential services, tools and other resources to help our residents become more self-sufficient, and to help make JHC communities better places to live,” Archuleta added. “Our goal is to transform our developments into neighborhoods, by creating environments that foster communication, resident involvement and empowerment. Housing with HEART offers an innovative, comprehensive approach to developing a long-term resident services program tailored to each of its communities. The goal is to respond to the current and future needs of residents to improve their lives, break the poverty cycle and move them toward non-subsidized self-sufficiency.” Montecito Vista is adjacent to a new community park and a new technology center. It is close to hiking and bike trails and is just two blocks from The Market Place, a regional retail center with stores, restaurants and movie theaters that provide amenities and job opportunities. Montecito Vista is also adjacent the new Arnold O. Beckman High School, a $94 million state-of-the-art facility that is the first new high school built in the Irvine Unified School District in 40 years. From the initial phases of development through the implementation of property management, partnerships play a crucial role to the viability of a project, Archuleta said. “As a nonprofit housing developer, JHC is able to leverage a nexus of public and private funds through partnerships with local government, private developers, investors and the surrounding community. Public-private collaboration with partners like JHC is why Irvine boasts the greatest ratio of affordable housing units in Orange County,” she said.
“Irvine’s Housing Element indicates the city is a jobs-rich community with an estimated 3.4 jobs per housing unit,” Archuleta said. “The average price of a home is $693,500, but the fastest-growing California industries average annual salaries of only $17,000-$44,000. That means thousands of residents from other communities commute here for work, creating traffic congestion, air quality problems and other issues." “Incorporating rental workforce housing into its major employment centers makes sense for the city and families and is key to success for Irvine’s overall housing plan,” she added. “It provides workforce families with the opportunity to live where they work. This results in shorter commutes, access to better schools and more time with their families.” Archuleta offers this advice for those interested in providing workforce housing:
HBI and Pinellas County Sheriff Team Up to Train WomenHome Builders Institute (HBI), the workforce development arm of NAHB, has joined forces with the Pinellas County Sheriff’s Office to bring its Project TRADE (Training, Restitution, Apprenticeship, Development, Employment) program to female offenders incarcerated in the Pinellas County Jail in St. Petersburg, Fla. Over the coming year, 40 women will learn industry-sponsored skills from HBI and “Project Success,” a life skills program currently offered at the facility. This will be the first time that HBI has worked directly with a law enforcement agency and represents a first for both the institute and the sheriff’s office in providing trades training to women in jail. The program begins on Nov. 1. Following a 12- to16-week period for learning the skills, successful graduates will receive HBI’s Pre-Apprenticeship Certificate Training (PACT) certificate, indicating that they are proficient in entry-level building skills for employment in the industry. They will also receive job placement assistance. HBI Vice Chairman Bill Paul, president of Phoenix Construction and Development Company, has worked closely with Pinellas County Sheriff Jim Coats to ensure that the new program receives the funding and support it needs to operate effectively. “This is the first time we have gone behind the fence to help women acquire some real hands-on skills that can give them a viable option for a better life once they go back home,” said Paul. “There is an enormous need for trades skills in this area and this could be the unexpected opportunity to enter a career never even considered.” Project TRADE began in 1995 and places 80% of its graduates in industry jobs. Over the past 11 years, students who complete the program have a recidivism rate of 7.8%, nearly 8% below the national average. “We are looking forward to this effort,” said Sheriff Coats. “We have seen the results this HBI program has had working with male offenders over the years, and we are eager to see it succeed with the court-involved women here at the Pinellas County Jail.” In addition to St. Petersburg, HBI currently offers Project TRADE programs in Colorado Springs, Colo. in partnership with ComCor; at the Sheridan Correctional Center in Sheridan, Ill.; and in partnership with the Phoenix House in Ocala, Fla. For more information on Project TRADE, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908. Steel-Framed ‘Cajun Cottage’ Shown at New Orleans SummitA 400-square-foot, steel-framed “Cajun Cottage” constructed by the Steel Framing Alliance was exhibited in the New Orleans Housing Solutions Summit on Sept. 29-30. The Steel Framing Alliance is a national industry ass |