Nation's Building News Online: October 23, 2006Print All Articles Text Version |
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Builders Advised to Pare Costs as Sales SlowBuilders who are finding the current downturn in the housing market tougher than they had anticipated are being advised to take steps to reduce their costs and minimize the damage of slower sales to their business. “As the home building industry settles into a year of more typical gains, historically speaking, managing and cutting costs are likely to be high on home builders’ minds,” says Steve Hays, a partner-in-charge of the Home Builders Services Group of RubinBrown LLP CPAs, in St. Louis. Advice from Hays and other experts in managing home building businesses is included in NAHB’s Back to Basics Toolkit. Introduced last month, the online kit is geared to providing members of NAHB with materials that will help them respond to the challenges of the current slowdown in housing activity that is affecting the majority of the markets in the country. Hays urges builders who are seeing slower sales to take steps to:
Cross-Training Employees For example, builders who have seen their sales volume decline by half might want to consider eliminating one of their two construction superintendent positions. “You should be cross-training your employees routinely to better absorb personnel losses,” says Hays, “and, as always, think twice before you hire anyone new.” Also, many business functions, such as payroll, can be outsourced. “The number of employees by job function should be monitored based on your projected sales volume,” says Hays. “The volume must be able to support the number of superintendents, estimators, general laborers, and general and administrative staff that you employ. While your company may have been able to support two superintendents when you were closing on 80 homes, when your volume decreases to 40 to 50 units, you must take a hard look at those two positions.” Reducing Construction Waste Another cost-cutting measure to consider, according to Charles Shinn, Jr., a veteran home building industry consultant, is paying attention to where your materials are actually going. Unbelievable amounts can end up in the dumpster if you don’t handle estimating, purchasing and delivery efficiently, he says. Builders should ask their employees and contractors where materials are going so they can help reduce the waste, and they should return unused materials to their vendors for credit and use just-in-time delivery to discourage materials theft. Also, builders should take a look at overhead, asking such basic questions as how many telephone lines they really need or investigating the possibility of closing the office and operating out of one of their model homes. To keep a lid on homes, Bosgraaf Homes of Michigan pays on purchase orders, automatically re-bids when notified of a price increase (usually the proposed increase is retracted) and belongs to a builders buying group. Builders can also protect themselves from unexpected increases in materials costs by including NAHB’s escalation clause (a members-only link) in their sales contracts. Also, builders can look to manufacturer rebates and Uncle Sam as potential sources of cash and credits. Thanks to NAHB’s advocacy efforts at the federal level, home builders can benefit from a new Section 199 tax deduction for domestic production that is part of the American Jobs Creation Act of 2004. In addition, new homes may qualify for energy efficiency tax credits. Focus on Customer Service Now is also a good time for builders to scrutinize what they are building, where and for whom. “In a down market, there is nothing more important than customer service or customer focus,” says Bosgraaf. “If you run things well, there’s just as much opportunity in a slow market as there is in a stable or growing market,” he says. Bosgraaf found out that he could boost profits with new designs. He vastly improved the elevations of one of his 2,200 square-foot homes for about $3 a square foot just by pulling back garages, adding roof lines and making other aesthetic changes. These alterations allowed him to raise the home’s base price without sacrificing market share. It cost $25,000 to develop the new plans, but he says “what’s even more expensive is a plan that doesn’t sell.” Also, the company decided to go against a trend of cutting back or abandoning amenities as the market slowed. Adding streetscapes, clubhouses, pools, even a “cruise director” to orchestrate neighborhood activities helped build a sense of community and allowed Bosgraaf to compete successfully in a market dominated by resales in established neighborhoods. Upselling options can also increase revenue. “Believe it or not, we’ve heard from home buyers who were not offered upgrades,” he says. “Of those who were, one said, ‘I never would have thought to go with cherry cabinets until the builder showed me the difference between cherry-stained and actual cherry. Once I saw the actual cherry, I was sold.” As the market slows, it is also important to adequately plan and manage the number of spec houses and models included in the construction inventory, says Hays. “In other words, the anticipated closing volume should have a strong relationship to the specs and models needed to sustain such activity,” he says. “Too much sitting inventory will have a substantial negative effect on a home builder’s financing and model home costs.” Hays says that now is also a good time to review direct construction costs. “The impact of even a small reduction in each home’s cost can add significantly to your bottom line,” he says. “In particular, value engineering can help determine what features in the base model can be replaced by less costly items that will not detract from the consumer appeal of the product.” Subcontractors and suppliers are the best sources of ideas for reducing costs and identifying possible design alternatives, says Hays. “Ideas that can be duplicated across your homes will multiply your savings and, again, add profits to your bottom line.” Families Finding Homes They Can Afford in the ExurbsAlthough significant numbers of families are moving to the fringe communities of large metropolises because this is where they can find the housing they want at a price they can afford, they might otherwise prefer to live elsewhere in the area, closer to stores and in safe communities with good schools and nearby amenities, according to a new study by The Brookings Institution. Prepared by researchers at Brookings’ Metropolitan Policy Program, “Finding Exurbia: America’s Fast-Growing Communities at the Metropolitan Fringe” describes the exurbs and who is living in them, and establishes a baseline for future consideration of their role. “Not yet fully fledged suburbs, but no longer wholly rural in nature, these exurban areas are reportedly undergoing rapid change in population, land use and economic function,” the report says. “Notwithstanding what they will become in future generations,” the study says, “exurbs are important places to understand in their contemporary form. They lie at the forefront of important local debates around growth and development issues. As such, they help ‘set the table’ for future metropolitan growth, and their prevalence may serve as an important indicator of emerging social trends of the effectiveness of various policies to shape metropolitan development." Home-Owner Communities The researchers at Brookings found that the exurbs are, by and large, home-owner communities. “More than three-fourths of exurban-county residents in 2000 owned their home,” the study says, “a significantly higher proportion than in any other metropolitan county type.” The paper also notes that the exurbs provide affordable homeownership in many metropolitan areas, where that opportunity may be limited in closer-in locations. “In these regions, middle-income families may be ‘driving to quality’ for a home in their price range, one that does not exist in closer-in suburbs.” Using Census 2000 data for the incomes of owners of new homes built between 1995 and 2000, the study finds that the home owners in the exurbs had significantly lower average incomes ($68,790) than owners of new urban ($93,627), inner suburban ($100,010) and other suburban ($88,618) homes. “While outer suburbs seem slightly more affordable overall than urban or inner suburban counties, new homes in the exurbs were occupied by families with incomes on average $20,000 lower than in outer suburbs.” In fast-growing areas like Denver and Washington, D.C., incomes for owners of new homes were found to be the highest in the urban core, and to decrease with the distance of the county from the core. In slower growing areas, especially those with a struggling urban core, the incomes of new home owners tended to be highest in inner and outer suburbs, while the exurbs appealed to a middle- and upper-middle-income market. In the Richmond, Va. metro area, “new exurban home owners have incomes nearly equal to those in the outer suburbs,” according to Brookings. “In the Philadelphia area, the exurban market is somewhat more middle-income.” Exurbanites Less Likely to Say ‘Super-Size It’ The report also concludes that the exurbs generally offer more intermediate, affordable new home types than do metropolitan suburbs. “Super-sized” homes containing nine or more rooms, compared to a median of six rooms for homes built between 1995 and 2000, accounted for one in six homes overall during that period, but only one in seven in the exurbs. “In exurbs, these super-sized homes made up one in seven recently-constructed houses in 2000. The proportion of home owners in the inner (21%) and outer suburbs (23%) that occupied super-sized new homes in 2000 was roughly 50% higher than in exurbs.” In terms of housing affordability, in 2000 just under one-quarter of all exurban home owners with mortgages spent more than 30% of their income on housing — less than owners in urban, inner suburban and outer suburban counties — and about 45% spent less than 20% of income on housing costs. Not Every Preference Satisfied But beyond affordable housing, the exurbs may not be providing everything that their residents would prefer: “Preference surveys reflect continued demand among home buyers for large lots (57% preferring more than one acre), but also the ability to walk to stores and restaurants (51%) and have reasonable daily commutes (79% desiring 45 minutes or less),” according to a survey by the National Association of Realtors® in 2004. “Much exurban development seems to be satisfying the first preference in lieu of the other two.” The researchers also cite growing evidence that increased transportation costs may be significantly reducing the benefits of more affordably priced housing. (For a recent NBN story on the findings of the National Housing Conference's Center for Housing Policy on transportation costs for working families, click here.) Where growth is proceeding at a decent clip, government policies or planning may be limiting the supply of housing generally, and affordable housing specifically, in closer-in jurisdictions, helping to push affordable development to the urban fringe, the study finds. “Some local governments, including many in the greater Boston, Denver and San Francisco Bay areas, use exclusionary tools like low-density-only zoning and permit caps that severly limit the supply of apartment buildings and affordable housing,” the report says. The Brookings researchers define exurbs as communities located on the urban fringe where at least 20% of their workers commute to jobs in a more urbanized area and where there is low housing density and relatively high population growth. Based on demographic and economic data from 1990 to 2005, the study found:
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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. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Baby Boomers, Still BuyingAt a time when housing has slowed in many markets, one out of four baby boomers between the ages of 50 and 60 consider it very likely or somewhat likely that they will purchase some form of additional real estate within the next 12 months, according to a new study conducted by market researchers at Harris Interactive for the National Association of Realtors®. Among boomer households with incomes of $100,000 or more, the percentage jumps to 37%. Two out of three who said that they are likely to buy will be looking for a new primary residence, another 26% expect to buy land and 19% plan to acquire a rental property. Baby boomer households in the 42 to 60 age range reported having accumulated a median $100,000 in equity in their homes. Among 50- to 60-year-olds, 36% said that their home equity accounted for anywhere from 51% to 100% of their household net worth. Even so, three-quarters of the boomers who were surveyed said that they did not feel financially prepared to retire, and many expect to keep working, health permitting, after they hit the traditional retirement age of 60. Growing numbers of the boomers also said that housing is getting too expensive, and 67% of those who are 50 to 60 worry that housing costs could spiral out of hand in the future, making housing affordability in an extended retirement an increasingly tough problem. (www.washingtonpost.com)
High Prices Still Mark Concrete Industry, Despite Cement SurplusEven though there are now surpluses of concrete in New Mexico instead of a shortage, the average price of concrete is about $130 per cubic yard, about the same as the price of cement in August 2005 after the shortage first hit. Before the crisis, cement was selling for roughly $45 per cubic yard. Builders say the price for cement is more a reflection of what the market will sustain, ensuring that shortages don’t re-occur in the near future. The costs of all raw materials have been increasing because of high gas prices and an overall increase in services across all industries, according to Dennis Roberts, director of industry relations for the Associated General Contractors of New Mexico. Between June 2005 and June 2006, he says, the prices of asphalt increased by 71.4%, copper and brass by 81.5%, iron ore by 73.7%, plastic by 19.2% and gypsum by 23.3%. Greater economic growth in foreign countries, including China and Japan, have led to competition to secure raw materials and that has kept prices high despite the lack of shortages. And while the pace of residential construction has slowed, there has been a spurt in commercial development. At the height of New Mexico’s cement shortage, there was a five- to six-week wait for concrete, at best. Last September, Jim Folkman, executive vice president of the Home Builders Association of Central New Mexico, predicted that private real estate developments would be harmed the most by the shortage. “Future home buyers can be sure the price of houses will go up because of the shortage of cement,” Folkman said. “One hundred percent of the price increase is falling on New Mexico contractors and buyers. The only ones profiting are the cement producers.” The median price of a new home in Albuquerque is $225,750, up from $176,999 in October of 2005, says David Murphy, publisher of SalesTraq of New Mexico. (www.albuquerque.bizjournals.com)
U.S. Copper Premiums Soften as Demand Drops OffResponding to a slowdown in the nation’s housing industry and the substitution of alternative products for copper, U.S. copper premiums have edged down and have now fallen to a range of 6 to 6.45 cents a pound, delivered to most U.S. destinations, from a previous range of 6.15 to 7 cents a pound. “Everything has been progressively slowing since August,” said one trader. “The housing bubble has burst. There are some serious issues surrounding substitution and scrap is cheaper. There are no serious buyers out there right now and things are unlikely to improve through the fourth quarter as everyone tries to keep stocks at a minimum.” Copper is based in many building supplies, such as plumbing products and electrical wiring. With copper prices more than doubling this year, more end-users such as home builders and air conditioning manufacturers have been turning to less expensive alternatives such as aluminum and plastic. (www.metalbulletin.com)
Finally, the Contractor Will Take Your CallsIn a departure from the booming real-estate market of the past several years when people often found themselves waiting for months for contractors to take on their remodeling jobs, home owners are now more likely to find a quick response and sometimes even a lower price. “Rather than saying ‘call me next spring,’ they’ll be more likely to say 'I’ll be over this week to talk about the project,’” says Kermit Baker, a senior research fellow at the Harvard Joint Center for Housing Studies. Custom and speculative builders are also starting to take on renovation jobs, picking up work they may have passed over a year ago. Tucson, Ariz. builder Richard Fink, who used to do a few remodeling jobs as favors to former clients, has now seen remodeling grow to half his business. High-end custom builder Samm Jernigan in Wilmington, N.C. said earlier this year that he started “aggressively pursuing” remodeling projects for the first time, and Philadelphia-area builder John Diament says that two months ago he started asking architects to send big remodeling jobs his way. “It’s good news for the consumer if you’ve got a lot more people seeking projects,” says Gopal Ahluwalia, NAHB’s staff vice president of research. Recently taking on more remodeling projects, Scott Sevon, a custom builder and remodeler in Chicago, says he has instructed his staff that remodeling “is a lot more time and hand-holding and a lot of good communication skills.” So that they can demonstrate their responsiveness, he gave all of his staff Blackberry e-mail devices that enable clients to get in touch with them at any time. (www.wsj.com)
All Business Is Local at IncubatorWashington, D.C. laws requiring that 35% of the work on city-funded or subsidized projects be performed by local, small and minority businesses and that all city-funded projects have a 20% minority equity investment have yielded mixed results and have brought complaints from builders and developers that the pool of qualified and capable contractors is too shallow to do all the work. But developer Jim Abdo, borrowing an incubator idea from the technology industry, has quietly turned an old warehouse in the city into a contractor’s campus that’s home to a drywall expert, electrician, roofer and iron worker. For the perfect craftsmanship he needs to convert a 130-year-old Children’s Museum into $700-a-square-foot condominiums, he has turned to Jose Flores, a drywall contractor he knows and whose work he considers “flawless.” Flores moved his 45-person operation, J’s Drywall, from Virginia to the warehouse Aldo owns. He pays $1,000 a month for the space, a third of market rate, and in turn has agreed to register with the city’s Local, Small, Disadvantaged Business Enterprise program, which certifies D.C.-based businesses for preferences on city contracts. (www.washington.bizjournals.com)
Vandals Hit Logging SiteThe letters E-L-F, an acronym for the Earth Liberation Front environmental terrorist group, were written in dust on heavy equipment vandalized recently near a rural logging site in Siskiyou County, Calif., but investigators aren’t ready to blame the radical group and say that disgruntled employees, deer hunters or teenagers could be responsible. At least nine bulldozers, grazers, front-end loaders and other machines belonging to Hilltop Logging Inc. were devastated in the attack, which may close the 20-employee company until at least next year. Dirt and other debris were put into fuel and oil lines, belts and fuel lines were cut, computer systems were destroyed and gear linkages were sawed in half, according to the sheriff’s department. In 2002, the FBI estimated that ELF and its sister group, the Animal Liberation Front, committed more than 600 criminal acts in the U.S. since 1996, causing more than $34 million in damage. But those numbers would be higher now, and the organization is believed to be responsible for several crimes in Northern California in recent years, including arson at a barn on Bureau of Land Management land near Susanville in 2001 and firebombs placed at construction sites in Placer County in 2005, according to a spokesperson for the FBI. (www.redding.com)
Builders Step Up Involvement as Races Enter Final StretchWith the Nov. 7 elections fast approaching, building industry professionals who want to become involved in the political process and help to elect pro-housing candidates in federal and state races are encouraged to log on to www.BuildilngTheVote.com, (click here) NAHB's political and grassroots action center. Through a partnership with the U.S. Chamber of Commerce, NAHB’s BuildingTheVote campaign is giving hundreds of thousands of pro-business Americans who contribute to the ongoing success of the home building industry the opportunity to become active participants in this year’s elections. “The past few elections have taught us an important lesson: elections can be won or lost by just a few votes,” said NAHB President David Pressly. “BuildingTheVote.com is an interactive Web site that will allow you to register to vote, apply for absentee or early voting, find out key election dates and deadlines, locate your polling place and learn more about the candidates running and the issues at stake.” Fully 80% of the states today allow voters to go to the polls before Election Day. BuildingTheVote.com provides information and assistance for voting early by mail or in-person. The Web site also contains important information on federal and state elections across the country. Registering with BuildingTheVote provides access to information on candidates running anywhere in the U.S. BuildingTheVote also enables voters to contact their elected officials about “hot-topic” issues that most affect their businesses — including immigration, property rights, storm water permitting and tax reform. The site also contains information on BUILD-PAC, NAHB’s political action committee, which is dedicated to helping elect pro-housing candidates to Congress. “Political participation is one of the most precious liberties we enjoy as citizens, and it begins with you and me,” said Pressly. “I urge all housing professionals to take a few minutes and visit BuildingTheVote.com. Together, we can make a contribution to our communities, our industry and our families, one vote at a time.” For more information, e-mail Molly Murray at NAHB, or call her at 800-368-5242 x8282. Starts Up, But Permits Still Down in SeptemberHousing starts in September regained the ground they lost in a steep decline during the previous month, but the issuance of building permits — a key indicator of future building activity — continued trending downward, according to statistics released by the U.S. Census Bureau on Oct. 18. September housing starts rose 5.9% to a seasonally adjusted annual rate of 1.77 million units, in close alignment with July's 1.76 million-unit rate and the third quarter's average of 1.74 million units. Single-family starts climbed 4.3% to a rate of 1.43 million units, while multifamily starts were up 12.7% to a rate of 346,000 units. "While today's report showed that some real strength remains in the national housing market, all of the increase in housing starts was registered in the South and Midwest, where relatively good weather conditions apparently encouraged builders to draw down their backlogs of unused permits,” said David Seiders, NAHB’s chief economist. “But we believe the trend for housing starts is still downward at this stage of the game, as evidenced by the ongoing slide in issuance of new building permits and the significant decline in the inventory of previously issued permits." Regionally, starts rose 14% and 3.4% in the South and Midwest, respectively, but fell 14.1% and 2.2% in the Northeast and West. Issuance of total building permits, which can be a good indicator of future building activity, declined 6.3% in September to a seasonally adjusted annual rate of 1.62 million units. Single-family permits were down 6% to a 1.21 million-unit rate while multifamily permits fell 7% to a rate of 412,000. Permits were down 3% in the Northeast, 6.9% in the Midwest and 9.5% in the South; there was no change from the previous month in the West. "Builders are reacting to current market conditions by pulling fewer new permits and instead focusing on their backlogs of existing orders," noted NAHB President David Pressly. "They're also stepping up incentives to help sweeten the deal for potential buyers. These incentives, together with today's historically favorable interest rates and the broad selection of new homes on the market, all translate into a very good environment for today's housing consumer." Attend the NAHB Construction Forecast Conference in Person or on the Web 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 2015? 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. Aggressive Selling Helps Stabilize Builder ConfidenceBreaking a string of eight consecutive monthly declines, the NAHB/Wells Fargo Housing Market Index (HMI), which gauges builder sentiment in the single-family housing market, posted a modest one-point gain to a level of 31 in October. “While the index remains at a low level, the increase suggests that builder attitudes for new-home sales may be stabilizing,” said NAHB Chief Economist David Seiders. “This is attributable to several key economic factors: mortgage interest rates have fallen substantially from their summer highs, energy prices have dropped dramatically from their recent peaks, consumer sentiment has posted a strong rebound and the job market is doing reasonably well.” “More than three out of four builders are offering substantial sales incentives to move their product and limit cancellations, and this aggressive strategy is working — making this an opportune time for home buyers to enter the market,” said NAHB President David Pressly. “The market correction appears to be approaching the bottom in terms of sales volume, and we expect the supply-demand balance to improve considerably before long.” Derived from a monthly survey that NAHB has been conducting for 21 years, the index gauges builders’ perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers. The scores for each component are then used to calculate a seasonally adjusted index; any number over 50 indicates that more builders view sales conditions as good than poor. Current single-family home sales registered a 32 on this month’s index, the same as the September reading; expected sales climbed four points, to 41; and traffic was up one point to 23. Regionally, the HMI rose five points to 33 in the Northeast and four points to 20 in the Midwest. Builder confidence dropped five points, to 32, in the West, which has been dogged by high prices and a major decline in investor buying activity; and one point, to 37, in the South. Attend the NAHB Construction Forecast Conference in Person or on the Web 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 2015? 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. Eye on the Economy: Housing Trends Down, Slowing GrowthThe employment report for September was quite a mixed bag. Payroll employment rose by only 51,000, but August was revised up substantially and average monthly job growth for the second quarter was a respectable 121,000. Furthermore, the unemployment rate slipped back to 4.6% in September, equivalent to the previous cyclical low registered in both May and June. Everything considered, labor market indicators are consistent with the evolving slowdown in economic growth (real GDP), but the evidence does not argue for a cut in short-term interest rates by the Fed in the near term — particularly in view of ongoing upward movements in average hourly earnings along with evidence of limited labor market “slack.” The housing production boom that ran from mid-2003 through early 2006 generated strong growth in employment in this sector (residential builders and specialty trade contractors), and the recent downswing in housing starts and residential construction put-in-place has been taking a toll on this part of the job market since March. But a recent resurgence of private nonresidential construction has generated rapid job growth in that sector, essentially offsetting the falloff in the residential component. This general pattern is likely to persist as the housing downswing runs its course. The Federal Reserve Is Focusing Hard on the Housing Sector On Oct. 4, Fed Chairman Ben Bernanke told the Washington Economic Club that the housing market is in the midst of a “substantial correction,” a characterization that certainly sounds more serious than the “cooling” referred to in the September 20 FOMC statement! The chairman went on to say that the falloff in housing construction will subtract about a percentage point from GDP growth in the second half of this year and that the drag on growth is likely to extend into 2007. These comments were refreshingly straightforward and quite explicit, and Bernanke’s estimate of the drag on GDP from the ongoing contraction in housing production is in line with NAHB’s estimates. Later on Oct. 4, Fed Vice Chairman Donald Kohn delivered an address that devoted a lot of attention to housing. Governor Kohn noted that the adjustment in housing markets has proven to be “more rapid and deeper” than many economists had predicted, and he expressed a good deal of uncertainty about how the adjustment process will “work itself out.” In this regard, he suggested that housing starts may now be “closer to their trough than to their peak,” a proposition that squares with NAHB’s outlook. He also noted that the speed of the necessary rebalancing of supply and demand in housing markets will depend largely on the speed of adjustment to house prices. The former Fed chairman, Alan Greenspan, also weighed in on the housing downswing during the early part of October. Greenspan suggested that “…we are coming to the end of this downtrend…the worst of this may well be over.” Home Builder Sentiment Stabilizes in October The NAHB/Wells Fargo Housing Market Index (HMI), based on large monthly surveys of single-family builders, hit a cyclical high of 72 at mid-2005 and retreated rapidly to a low of 30 in September — the lowest level since early 1991. During that period, the overall HMI was dragged down by systematic declines in its three major components: current home sales, expected home sales and buyer traffic. The downswing also showed up in all major regions of the country. The HMI for October edged up from 30 to 31, halting the dramatic downslide but leaving this measure of builder sentiment in a historically low range. The stabilization apparently reflected recent declines in mortgage rates and energy prices, along with a strengthening stock market and a good job market. These factors also led to a nice rebound in consumer sentiment during the early part of October (University of Michigan series). It’s also apparent that price cuts and non-price sales incentives provided by builders have helped buoy buyer demand — an essential precondition to a fundamental rebound in housing market activity. Mortgage Applications Also Firm Up as Home Buying Conditions Improve Applications for mortgages to buy homes (Mortgage Bankers Association series) peaked out around the middle of last year and then contracted substantially through August of this year — consistent with movements in NAHB’s HMI as well as in measures of new and existing home sales. However, this series perked up a bit in September and held reasonably steady during the first half of October (on a four-week moving average basis). The recent stabilization of the NAHB and MBA survey measures during the early part of October hopefully signals a near-term bottom for home sales, a process undoubtedly fostered by welcome declines in interest rates and energy prices, along with deepening sales concessions in the markets for both new and existing homes. Indeed, the University of Michigan’s home buying conditions index actually moved up nicely in early October, reflecting a surge in the number of respondents who think that now is a good time to buy because prices are relatively low and good deals are available. Housing Production Still Is Trending Down, Despite a Recent Bounce in Starts Housing starts unexpectedly bounced upward in September, rising by nearly 6% from the revised August level. But issuance of new building permits continued to decline in September, falling by 6.3% to a level that stood 28% below the reading a year earlier. The September bounce in housing starts, in the face of the continuing downslide in permit issuance, reflected a large draw-down of the backlog of unused permits obtained earlier by builders; the draw-down was one of the largest on record. This development possibly was provoked by relatively good weather conditions in some parts of the country, and the starts presumably were based on order backlogs accumulated earlier by builders. We’re viewing the September bounce in housing starts as a temporary phenomenon that probably will be reversed (wholly or partly) in October. The ongoing slide in permit issuance and the reduced backlog of unused permits are likely to keep seasonally-adjusted housing starts on a declining trend through the balance of the year. Household Balance Sheets Remain in Good Shape The Federal Reserve recently released its estimate of the household sector balance sheet as of the middle of this year. In a nutshell, the estimate showed ongoing growth in household assets as well as net worth (assets less liabilities), although at a slower pace than earlier in the economic expansion. The ratio of household sector net worth to disposable personal income fell a bit in the second quarter but remained close to the record level of the first quarter of the year — showing that household finances (in the aggregate) still are in great shape. With respect to housing, the Fed’s balance sheets show a year-over-year gain of 10.5% in the market value of homes owned by households, a 12.6% rise in home mortgage debt and an 8.7% gain in owner’s equity — to a record $10.982 trillion. The ratio of mortgage debt to the market value of homes moved up to 45.9%, compared with 45.1% at the middle of last year, although neither the change nor the level is of concern at this point. The “holding gains” on household real estate from mid-2005 to mid-2006 came to nearly $1.7 trillion, although the quarter-to-quarter changes decelerated during this period. A further slowdown is inevitable in coming quarters as house prices continue to slow and possibly even decline to some degree, and lower housing production levels will also take some growth out of household real estate holdings. As a result, the powerful housing wealth effect that’s been propelling consumer spending for several years will be losing strength over time, although the weakening process should be gradual and spread over an extended period. NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Oct. 18 edition. To subcribe to “Eye on the Economy,” click here. Attend the NAHB Construction Forecast Conference in Person or on the Web 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 2015? 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. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Attend the NAHB Construction Forecast Conference in Person or on the Web 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. Builder’s Tip: Using a Tape Measure as Fish TapeI needed to pull wire in a wall to hook up some speakers on my porch. I thought about buying a fish tape, but the cheapest one I could find was $17 — too much for a one-time-use tool. Thinking about the problem on the ride home from the store, I hit on the idea of using my 25-foot tape measure instead. Pulling the tape all the way out, I found that its inner end has a slot that hooks to the rewind spring. Here is what I did:
— Jeff Van Dine, Gold Bar, Wash. 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. Free NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Warranty, Service, Home Readiness Keys to SatisfactionA home builder’s warranty program, customer service and home readiness are the key factors driving customer satisfaction, according to J.D. Power and Associates, the California-based marketing information services firm that releases an annual new-home builder customer satisfaction survey. “Homes that are delivered on time and that are complete typically result in fewer problems and warranty visits, ultimately boosting customer satisfaction levels,” said Paula Sonkin, executive director of the real estate industries practice at J.D. Power. J.D. Power annually asks buyers about their level of satisfaction based on 10 characteristics, including the builder's warranty and customer service, home readiness, sales staff, workmanship and price. As the market changes, the J.D. Power rankings are becoming more important to prospects, said customer relationship management pro Steve Lewkowitz of Pivotal Corp., a member of NAHB’s Business Management and Information Technology Committee. “One of the things people are usually going to remember is their last experience” with a builder, which is the move-in experience, said Lewkowitz. That helps explain the top drivers of customer satisfaction in the J.D. Power survey results, he added. The characteristics, and their percentage contribution to customer satisfaction, are:
“People want to be communicated with. They want to be kept current on the status of their home,” Lewkowitz said. If communication is good, then home buyers with a problem are “going to be more willing to wait for a situation to be resolved. Home owners are much more prone to recommend the home builder or purchase from them again if they have had a good relationship with the builder during the warranty period. In addition, it is a critical factor that prospects are strongly considering when purchasing their homes,” he added.
In the latest survey, home owners reported an average of 14 problems with their new home, a 7% increase over 2005. More than 90% of new-home buyers reported experiencing at least one construction problem with their new home. The most frequent problems reported, according to the survey, included landscaping, kitchen cabinet quality and finish, and heating and air conditioning; however these factors varied somewhat by market. The study, now in its 10th year, includes satisfaction ratings of builders in 34 of the largest home building markets. Nationwide, customer satisfaction has remained at its current levels since 2004. Markets experiencing the largest customer satisfaction improvements are Albuquerque, N.M.; Ft. Myers/Naples, Fla.; Minneapolis; and the San Francisco Bay area, according to J.D. Power. J.D. Power's 2006 New Home Builder Customer Satisfaction study is based on responses from 60,927 buyers of newly built single-family homes, who provided feedback after living in those homes for four to 18 months. For more information, visit www.jdpower.com/homes/ratings/home_builders/index.asp. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. ‘Customer Service for Home Builders’ Available at BuilderBooks.com “Customer Service for Home Builders,” available through BuilderBooks.com, provides what you need to give your customer service program new life. The publication includes forms, checklists, documents and a resource guide. To view or purchase this publication online, click here, or call 800-223-2665. ‘Warranty Service for Home Builders’ Available at BuilderBooks.com “Warranty Service for Home Builders,” available through BuilderBooks.com, shows you how to clearly communicate warranty procedures and expectations to home buyers, and how to effectively follow up on work requests. This book and CD include everything you need to get your warranty system up and running. To view or purchase this publication online, click here, or call 800-223-2665. 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. 'How to Thrive in Changing Market' at Custom Builder Symposium
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 Hyatt Regency Lake Las Vegas Resort, Nev. Onsite Registration Is Available Beginning Oct. 26 Advanced registration is closed. Onsite registration is available beginning 3:00 p.m. Thursday, Oct. 26, in the North Lobby of Hyatt Regency Lake Las Vegas Resort. Custom builders Tom Stephani, Mike Holmes and Paul Montelongo will lead the interactive discussion during a luncheon session on Saturday, Oct. 28, continuing it 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:
Symposium accomodations at the Hyatt Regency Lake Las Vegas Resort are sold out. Additional hotel accomodations are available at the MonteLago Village Resort, which is less than three minutes away from the Hyatt Regency, and also along the shores of Lake Las Vegas. A free shuttle bus will be available between the MonteLago and symposium activities. To reserve a room at the $189 a night conference rate, call the hotel at 866-787-1945 and reference NAHB or Code 1034WA. To learn more about the Custom Builder Symposium, go to www.nahb.org/custom. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. 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. Survive Changing Markets 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. Workforce Housing, Creative Land Planning Work TogetherBy Donald F. Evans, AIA and Byron “Kerry” Godwin, III, RLA, AICP, The Evans Group With the decrease in availability of attainable housing, many elected officials are requiring workforce housing to be incorporated into every new development. Successful developers know that creative land planning is the key to incorporating workforce housing into their communities. Developers of both large- and small-scale communities are answering this growing need for attainable housing through creative planning solutions that incorporate varied housing types. Examples of two solutions follow: Community One: A Less Expensive Starting Point
The coveted (and more expensive) property in Delaware is along the coast and is famous for the sunshine, water and slower lifestyle. This particular site is landward and provides housing for buyers who don’t want to spend the extra money associated with the shore. The community primarily features single-family detached homes on 50-foot and 65-foot home sites, along with duplexes and 28-foot- and 20-foot-wide town homes. A portion of these multifamily homes will be allocated as workforce housing. Community amenities will include a town center, recreational lifestyle center and numerous parks and trails ― all within a five-minute walk of most of the homes. When completed, the 426-acre community will have 1,603 homes at 3.76 units per acre. Community Two: A Joint Venture With a Church and Habitat for Humanity
The plan creates a TND walking village of market-rate homes, with the homes surrounding either a large man-made lake in the center of the community, or smaller intimate park areas that are overlooked by 10 residences each. Market-rate housing in the community will be on 37-foot by 110-foot home sites. Workforce housing will be in town homes or single-family homes on 42-foot by 90-foot home sites. Habitat for Humanity housing will be on 42-foot by 72-foot home sites. All the residences in the community are lane-loaded for garage or surface parking, with designated on-street parking for guests. A large buffer surrounds the perimeter of the community, with all units facing inward. Just as attainable housing does not have to be unattractive, neither do the land plans. There is plenty of opportunity for attractive and creative architecture and land plans in the attainable housing market. Don Evans, AIA is founder and president and Kerry Godwin, III, RLA, AICP is vice president /director of planning of The Evans Group architecture and planning firm, which is headquartered in Orlando, Fla. Evans is a nationally recognized design and planning consultant, specializing in architectural design, land planning, landscape architecture and architectural interiors. For more information, e-mail Evans at devans@theevansgroup.com or visit The Evans Group Web site at www.theevansgroup.com. Free NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. IBS to Feature Two Showcase Homes, Koppel as KeynoteThe 2007 International Builders’ Show (IBS) in Orlando, Fla. will feature two showcase homes for the first time ― one “new” and one “remodeled” — that reflect the challenges and advantages of the “re-gentrification” movement with in-city housing. In addition, Ted Koppel, former anchor of ABC’s “Nightline” and a 42-year veteran of ABC News, will be the keynote speaker. IBS, from Feb. 7-10, also will feature more than 1,600 exhibitors, 450 of them on exhibit for the first time, and more than 200 education sessions covering every facet of the home building industry.
Both showcase homes are located in the Lake Eola Heights Historic District in downtown Orlando, approximately 15 minutes from the Orlando Convention Center. Koppel now serves as managing editor for The Discovery Channel where he continues to provide in-depth reporting on global issues. He also serves as a contributing editor for the New York Times and gives regular comentary on National Public Radio. Register Now and Save Register for IBS by Friday, Nov. 17 and save money on show registration. Early registration will also enable NAHB members to request a room in their state hotel room block. Last year, more than 105,000 housing professionals attended the builders’ show. For more information, or to register early, visit www.buildersshow.com. Get the Facts to Speed Up Your 50+ Approval Process"Approving Seniors Housing: Facts that Matter" is a publication created by NAHB to help builders and developers obtain approval for 55+ housing in their local jurisdictions. The booklet dispels many of the myths about active adult housing that prompt well-meaning officials and conscientious citizens to interfere with the approval process. The publication presents the facts for builders and developers to share with their local planning boards, city or county councils, civic and home owner associations and other interested groups. Chapters include: Education Issues, Planning for Road Improvements, Parking Standards, Public Safety Services, Water and Sewer Services, Public Parks and Libraries and Local Economic Impact (Jobs, Income and Taxes). This booklet is sold online in a PDF format, which enables purchasers to acquire it immediately and print and distribute as many copies as they need, when they need it. "Approving Seniors Housing: Facts that Matter" is available for $12.95 for NAHB members and $16.95 for non-NAHB members. To order it online, click here. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. 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. 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 Pillars awards represent a perfect opportunity to promote the benefits of apartmetn and condo living, and for multifamily professionals to be recognized for their commitment to proving superior housing choices, both rental and for sale, for today's consumer," said Leonard Wood, director of Wood Partners, LLC and chairman of NAHB's Multifamily Leadership Board. The winners will be honored at a gala ceremony held in conjunction with NAHB Multifamily’s Pillars of the Industry Conference on April 11-13 at the Westin Diplomat Resort and Spa in Hollywood, Fla. For more information about the awards 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 Policy on Subcontractor Workers ChallengedBuilders challenging an Occupational Safety and Health Administration (OSHA) policy that holds them responsible for ensuring the job-site safety of workers employed by subcontractors presented their case on Oct. 13 before the OSHA Commission, which rules on the validity of the agency’s citations. Because of the importance of this issue to the home building industry, an amicus brief in Secretary of Labor v. Summit Contractors, Inc. was filed in March by NAHB, the Texas Association of Builders, the Contractors’ Association of Greater New York and the Greater Houston Builders Association. In this case, the company was cited for failing to ensure that employees of a masonry subcontractor used adequate fall protection while working on scaffolds during the construction of an Arkansas college dormitory. This was the first time in nine years that the commission agreed to hear an oral argument in a case, said Arthur G. Sapper of McDermott Will & Emery LLP, the Washington law firm that submitted the friend-of-the-court brief on behalf of the builder associations. The builders contended that the commission should dismiss OSHA’s citation because a contractor’s responsibility extends only to its own employees, and the multi-employer liability that OSHA said should govern the facts in this case is limited. The contractor should only be liable if its own actions create unsafe conditions, not when its subcontractors create them. “Each employer is responsible for the working conditions of his own employees,” the brief said. NAHB’s argument, based on its reading of the law, is that OSHA generally has no statutory or regulatory authority to issue citations and levy fines against one employer for violations committed by another. Otherwise, Sapper said, the builder would have to constantly, and personally, police the actions of subcontractors whenever they do work. “You’d have to have someone on site at all times, and as a practical matter, builders don’t have the workforce for that,” he said. Sapper told the commission that extending the contractor’s responsibility would require a new rulemaking by the agency, subject to public hearing and comment, and that a reading of the original statute indicates that such responsibility was never the intent when it was promulgated more than 30 years ago. Commissioners are expected to release their decision by April 27, 2007. 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. Brochure Touts Speed, Quality of Panelized Home BuildingA new free publication from the NAHB Building Systems Councils — “Panelized Homes: Custom Designs, Your Building Solution” — provides prospective home buyers with information on the advantages of panelized homes. The illustrations in the 12-page, full-color brochure are a great resource for home builders trying to explain the panelized construction process, said Jeremy Bertrand, director of NAHB’s Building Systems Councils. “It’s much easier to talk about structural insulated panels — SIPs — when you can show your customer what they look like,” he said. The brochure includes articles that offer tips for choosing the right type of panelized home and describes several benefits for home buyers:
The two “rewards” most often mentioned by the panelized builders interviewed for the PATH study were faster construction and better construction quality. For a copy of “Panelized Homes: Custom Designs, Your Building Solution,” click here to visit the Panelized Building Systems page on the NAHB Web site; or e-mail Cortney Klein at NAHB, or call her at 800-368-5242 x8357. Design, Trends, Codes Are Hot Topics at BSC SHOWCASEBalancing modern, popular home designs with the structural properties necessary to meet state and local codes is a challenge for even the most experienced engineers and architects.
Breakout sessions at the Building Systems Councils' SHOWCASE conference and trade show in Miami, Fla. on Nov. 5-8 will highlight the dual sides of design — designing for codes and designing for consumers ― to help builders better achieve that balance. Onsite Registration Is Available Online registration is closed, but onsite registration is available at the show. Two SHOWCASE breakout sessions will give attendees a crash course on building code evolution and how products are tested to meet and exceed those codes, even in the most stringent jurisdictions:
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. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. 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. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Las Vegas Models Its Green Program on NAHB GuidelinesCementing a groundbreaking partnership with the Southern Nevada Home Builders Association, the City of Las Vegas last week announced a green building program to encourage home builders and residential developers to use environmentally sensitive and sustainable building practices. Home builders who join the HBA’s newly launched green building certification program, the Southern Nevada Green Building Partnership, will be certified as participants in the city’s green building program. They will be able to use the city designation in their marketing materials and will also be listed on the city’s Web site. This is the first time that a municipality has recognized a program based on NAHB’s Model Green Home Building Guidelines, which HBAs are using to create regionally appropriate, residential green building programs for their members. “We are very proud of the program,”” said Connie Suckling, senior government relations specialist for SNHBA. “The city is recognizing and taking into account what the home building industry is able to accomplish with usable guidelines. We hope this is a win-win, for the city and for the industry.” The HBA is now working out the details of the certification process and plans to pursue incentives for builders who participate in the green building program. When 60 stakeholders — including builders, environmentalists, government agencies and product manufacturers from across the U.S. — gathered three years ago to begin work on the NAHB Model Green Home Building Guidelines, the intent was to create a blueprint for voluntary green building programs around the country. The guidelines reflect regional geographic differences and building practices, which is key to their easy acceptance by home builders, said Larry Simon of Pardee Homes, chair of the committee that developed the local program. The checklist that the Las Vegas area builders are using is appropriate for the area’s desert climate, where water conservation is more important than in many other parts of the country. “Many of the builders who sat on the board with me were already involved in voluntary programs promoting energy efficiency or water conservation,” Simon said. “We wanted to put it all together with recycling and resource-efficient construction techniques to create a green building program that would actually work.” The city had been considering its own residential green building program, but then determined that working with the builders would be more productive. “We worked with the utilities, with the city and with code officials,” he said. “Once we all understood what was actually possible, we created this partnership based on the guidelines, which are more realistic.” The Southern Nevada home builders have a reputation for being forward thinking on environmental issues, Simon said, and depend on association staff to keep them up-to-date on topics to watch. SNHBA worked on a successful Habitat Conservation Plan for endangered species that is a national model for public-private partnerships and worked closely with NAHB on research and presentations on a proposed standard for 2.5 particulate matter, or construction dust. “We are pretty proactive when we hear that something’s going to change,” Simon said. “We figured that eventually our state government might decide that homes needed to be green, so we wanted to come together as an industry and find a program that would meet national standards yet adapt to our region.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Attend the Green Building Conference in St. Louis Mark your calendar for March 25-27 for NAHB's National Green Building Conference in St. Louis. In addition to education sessions, the conference will feature a property tour of green built homes in the area, the green building awards dinner and a new designation course on green building for builders and remodelers. For more information, visit, www.nahb.org/greenbuilding. Entry Period Underway for Green Building Awards Entries 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. 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. For more information, e-mail Emily English at NAHB, or call her at 800-368-5242 x8366. Brochure Provides Update on NAHB Regulatory EffortsA new brochure prepared by the NAHB Legal Affairs department details the advocacy efforts made over the last two years by association staff, volunteers and consultants on behalf of the home building industry. Cases in which NAHB has been involved run the gamut from property rights to construction liability and environmental regulation — all with an eye on reducing the burden of excessive and duplicative regulations that cost builders money and push up the cost of new housing. “Targeted, strategic litigation and strong ‘friend of the court’ or amicus briefs in selected cases have helped NAHB’s members overcome an increase in onerous governmental regulations,” says the introduction to the NAHB Litigation Update. When invited, NAHB assists state and local home builders associations in their litigation efforts as well, especially when the issues presented are likely to set a national precedent. “Because of the Legal Affairs department’s efforts, many governmental bodies and agencies at the state and federal levels have shifted or eliminated the scope of their efforts to limit or stop development on innumerable projects nationwide,” the brochure says. The brochure includes detailed explanations on Clean Water Act decisions, including the recent Rapanos and Carabell cases, for which NAHB members continue to await formal U.S. Army Corps of Engineers guidance. NAHB also weighed in on efforts to curtail the availability of flood insurance, define standards for Endangered Species Act enforcement and clarify requirements for eminent domain, among other cases. A limited number of printed brochures will be available at the Advocacy Booth during the International Builders’ Show in Orlando, Fla. in February. In the meantime, members can download it from the NAHB Web site: click here. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Attractive Atlanta Area Homes Offered at an Affordable PriceRecognizing 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 fourth development in the series is Peachtree Homes in Jonesboro, Ga. Applications for the 2006 awards are available and the deadline is Friday, Oct. 27. For the award guidelines and an entry form, click here.
Developed by Peachtree Homes, Peachtree Villages offers two-story town homes with two-, three- and four-bedroom options in prices ranging from $110,900 to $121,900, making them very affordable to the local workforce. “We’re very pleased we did this project,” said Whitney Aguilera, who accepted the award on behalf of Peachtree Villages. “We’ve been able to offer homeownership opportunities in this community that might not otherwise be available to these families in Jonesboro and the greater Atlanta area.” The homes have rear entry alleyways with optional garages, creating a “Main Street” look for the development, with 50-foot sodded front yards complete with sidewalks, decorative trees and white picket fences.
“We’ve learned a lot about design elements that can add a lot in terms of aesthetics and value without adding a lot to the cost of the homes,” Aguilera said. “Little things can make a big difference. For example, we’re now running the sidewalks inside the fences so that children can play and use the sidewalks and still have that barrier between themselves and the street.” Peachtree Villages offers 107 attached town homes on 17.4 acres. Built on the site of a failed commercial venue, the development has been a significant workforce housing success, with 68 of the homes already sold. The homes have been purchased by teachers, day care workers, truck drivers, medical technicians and people who work in the retail industry. “We want to recognize those individuals and organizations that saw the need for workforce housing and who took the tough steps to provide it,” said Bobby Lunceford, a previous winner of the award who announced the award winners. “And we want to hold up these projects as models of successful workforce housing that other builders and developers can emulate.” That recognition makes a difference for builders and developers who choose to get involved in workforce housing developments, Aguilera said. “It’s amazing how many phone calls we have gotten as a result of this recognition.” For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583. Hartford Program to Document Project CRAFT EffectivenessHome Builders Institute (HBI) — the workforce development arm of NAHB — is opening a new Project CRAFT program in Hartford, Conn. to expand its trades training for court-involved men and women. Project CRAFT takes a comprehensive approach, setting multiple goals, to equip troubled young people with the skills they need to find jobs in the residential construction industry and replenish the industry’s workforce. Congress has repeatedly recognized Project CRAFT as a “model intervention in the rehabilitation and reduced recidivism of adjudicated youth.” Additionally, a Senate committee has encouraged the Department of Labor “to replicate Project CRAFT to bring its outcomes-oriented approach to adjudicated juveniles throughout the country in order to help them become members of this industry's workforce and spur the nation's economy.” In response to this congressional support, the Hartford program will closely examine how CRAFT students fare after completing their 30 months of training and determine the effectiveness of vocational instruction used in conjunction with “Multisystemic Therapy" (MST) in reducing recidivism and juvenile crime. Project CRAFT/Hartford was established through a partnership with the Medical University of South Carolina (MUSC), which currently operates its own MST program with Connecticut’s Department of Children and Families, Bureau of Juvenile Services. HBI and MUSC received a grant from the National Institutes of Health's (NIH) National Institute on Drug Abuse (NIDA) to begin training its first group of students in January. HBI’s role will be to prepare students for life outside the court system, and the University of Connecticut and NIH will conduct the research aspect of the project, monitoring student progress and comparing CRAFT students with those not in the program. “The research and results component of this initiative is vital to continued growth and replication of Project CRAFT”, said HBI Vice Chair Bill Paul, a frequent speaker at Project CRAFT sites. “This grant will help confirm that the program works and will provide more supporting data for the many personal success stories of Project CRAFT students.” Favorable recidivism results, which have consistently been recorded among Project CRAFT students, will lead to the expansion of the program to as many as five new locations, for at least three years. Other organizations participating in the program are the Home Builders Association of Connecticut and the City of Hartford. Currently, HBI operates Project CRAFT programs in Nashville, Tenn.; at Operation Reconstruct, a Hurricane Katrina rebuilding effort in New Orleans; and at five sites in Florida. For more information on Project CRAFT, e-mail John Hattery at HBI, or call him at 800-795-7955 x8916. Tankless Water Heaters Designed to Be SeenThe latest series of tankless water heaters from Rinnai Corporation features sleek, modern designs that give consumers the opportunity to take their heaters out of the closet and install them along with existing household appliances anywhere in the home. Based in Japan and with its American headquarters in Peachtree City, Ga., Rinnai is the world’s leading gas appliance manufacturer and a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. The compact design of Rinnai’s Designer PLUS tankless water heater saves home owners up to 16 square feet of floor space compared to standard tank water heaters. For optimum performance and easy installation, the unit can be mounted either internally or externally, and is equipped with factory-matched accessories, including Rinnai’s standard venting kit, plumbing |