Nation's Building News Online: April 23, 2007Print All Articles Text Version |
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Rental Apartments a Bright Spot in a Dim Housing MarketAgainst ongoing uncertainty about deepening problems with subprime mortgages and what speculators who jumped into the housing market too late for a quick profit will decide to do, multifamily developers and analysts at the NAHB Pillars of the Industry multifamily conference in Hollywood, Fla. earlier this month agreed that condominiums in some of the formerly most overheated markets will be “in the doldrums” well into 2008. “We’re in for a fairly ugly correction,” said Ron Terwilliger, president of Atlanta-based multifamily developer Trammel Crow Residential. “It’s not that condominiums are just bad,” he said, “for-sale housing is bad.” “Am I allowed to use negative numbers?” quipped Ara Hovnanian, president and CEO of New Jersey-based Hovnanian Enterprises, when asked to rate the housing market on a scale of one to 10. As subprime and high-risk mortgage market lenders tighten their requirements, the condominium market will contract because fewer people will qualify and the specter of foreclosures, at least in the near term, will loom, said Ronald Ratner, president of the multifamily development, management and investment firm, Forest City Residential Group, based in Cleveland. In most markets, foreclosures will register only as “a blip,” said Ratner. But he added that the psychological effects from the subprime fallout could run much deeper, giving many prospective home buyers second thoughts. Compounding the pessimistic short-term outlook is the record number of vacant year-round single-family and multifamily housing units on the market. According to Dave Seiders, NAHB’s chief economist, 5.5 million homes, or 4.5% of the supply, were vacant at the start of this year, largely because of speculators. The burning question for the industry, he said, is what those who have deposits on those vacant units or who already own them do next. Among the options are deciding not to close on the purchase, selling the property at a loss or renting it until the market turns around. And what effect will the disposition of those units have on the market and the industry? Seiders predicted a decline in overall housing market starts of 20% in 2007 from 2006. Single-family housing will drop 22%, condominiums will be down 22% and overall multifamily will be down 14%, he said. Glimmer in the Rental Market and Housing Fundamentals While near-term prospects for multifamily condos are sobering, multifamily rentals are expected to be relatively bright, with housing market fundamentals remaining strong and providing glimmer for the long-term outlook. Mortgage rates remain affordable and underlying housing demand, which will reassert itself after the current correction ends, is running at an annual average of 1.8 million new units a year, Seiders said. He added that more excess inventory needs to be burnt off and that the national economy, while avoiding recession, will remain on the “soft side” most of the year and the job market slowdown now underway will continue into 2008. Ron Witten, president of Witten Advisors, a Dallas-based advisory firm specializing in the apartment market, said that rentals will face some short-term challenges as the speculative aspects of the marketplace sort themselves out. “One in 10 single-family rental houses are empty,” Witten said. “One of nine condos are empty today, 11%. We won’t see much burn-off in excess condominiums in 2007 or 2008, though particular markets differ.” Witten blamed part of the excess in condos — with about 100,000 remaining to be sold — on the wave of condo conversions during the boom years. On the supply side, Witten said multifamily starts and permits will edge lower during the year and “deliveries will ease in 2007.” But he predicted that rental occupancy rates will strengthen and hover in the 2.5% range, compared to 4% at the peak of the home buying boom. Of the major metro markets, he said that eight will experience high rent growth in the coming year, 28 will show “normal” growth and six will be sub-par. “I’m a bull long-term on multifamily housing demographics,” said Leonard Wood, managing director of Charlotte, N.C.-based Wood Partners. He noted that the market is seeing a growing number of smaller families suited to apartment living, which bodes well for the industry, and on the financial side, the cost of the land available for housing is on the downswing. Tom Senkbeil, executive vice president and CIO of Post Properties, an upscale multifamily developer based in Atlanta, said his company focuses on urban infill communities and targets young professionals who want to live and work in cities. His mix, he said, is currently more toward apartments than condominiums. “We do a substantial number of renovation projects,” Senkbeil added. “They have much higher returns.” Supreme Court Hears NAHB Clean Water Permit ArgumentsAfter a protracted battle through the lower courts, NAHB v. The Defenders of Wildlife reached the U.S. Supreme Court last week and oral arguments were heard on Tuesday, April 17. At issue is whether the federal government needs to consider the Endangered Species Act before transferring permitting authority to the states under the Clean Water Act. Both NAHB and the U.S. Environmental Protection Agency say it doesn’t. The Clean Water Act sets out nine requirements that states must meet for the EPA to transfer permit authority. Adding ESA requirements would be the same as adding a 10th criteria, and that’s not part of the Clean Water Act, NAHB and EPA argue. Additionally, endangered species are protected because the U.S. Fish and Wildlife Service can review draft permits before states issue them to developers. It’s not appropriate to deny states the authority to oversee the permitting process as long as individual permits are subject to review, they argue. During oral arguments, the NAHB case was presented by EPA Deputy Solicitor General Edwin S. Kneedler, whose lawsuit against the Defenders of Wildlife was considered at the same time as NAHB’s. The environmental group had sued the EPA in 2002 when the federal agency transferred Clean Water Act permitting authority to the state of Arizona. “EPA's regulations require that a state furnish its draft permits to the public, but also specifically to the federal wildlife agencies,” Kneedler told the court. “That gives the Fish and Wildlife Service an opportunity to comment about endangered species concerns that may be raised by the draft permit,” he said. The federal agency also has authority to approve state water quality standards, and consults with the agencies charged with protecting species before approval is granted, Kneedler said. Justices also questioned whether the federal government is required to transfer permitting authority when states meet the criteria. Because the Clean Water Act says EPA “shall” and not “may” transfer, NAHB and EPA argue that the agency has no choice in the matter. Chief Justice John Roberts pointed out that species would remain protected because of the permit review process. “The point is that it's the issuance of a permit under the program . . . It is not the administration of the program. And EPA has in place the procedures to allow them to review the particular permits, which is what might jeopardize an endangered species. And they don't need to leverage their … non-discretionary authority to approve a transfer, to have that authority to review the actual act that might jeopardize an endangered species,” he said. The Defenders of Wildlife argued that ESA consultation does not add criteria, but should be considered part of the original nine criteria. “It’s an effort . . . to reconcile two obligations, both of which Congress felt were important” when they created the Endangered Species and Clean Water acts, said attorney Eric R. Glitzenstein. “I think the government's position is, oh, we're trying to elevate the Endangered Species Act to some exalted status, and in fact all we're saying on this administrative record is that's the same status that they accorded to other cross-cutting legal obligations,” he said. But Justice Stephen Breyer raised the issue of how a ruling might affect other federal laws and regulations, and he brought up the hypothetical case of a $500 tax refund from the Internal Revenue Service. “If . . . the person who gets it is going to use the $500 to destroy the last salamander in the world, …. does the act apply to the IRS? I would have thought the answer's no,” he said. He also questioned whether the Defenders of Wildlife needed to establish that the state of Arizona does not adequately protect endangered species. “I read through this record . . . and I couldn't find a single thing that would suggest that Arizona presents any risk to you. And so, what is the risk to an endangered species that you're actually worried about there? . . .You have to show some reason why we don't trust Arizona to do what the federal government's doing,” he said. Justice Anton Scalia agreed. “You have to establish jeopardy. And the mere fact that you're giving it to a state which Congress has been willing to trust with implementing this law is not enough to show that there's jeopardy. Prima facie, we would expect Arizona to do the right thing.” The court is expected to hand down a decision by June. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Builders Need to Keep Teens Safe in Summer JobsMinors working in construction run twice the risk of fatal injuries as employees aged 25 to 44, according to a National Institute for Occupational Safety and Health Report. OSHA, with the support of NAHB, is working to reduce this statistic with its 2007 Teen Summer Job Safety Campaign, an educational program created to help keep teenagers safe and healthy on the job. “Through this campaign, we hope to instill a culture of safety and health at a young age in America's next generation of employees,” said Edwin G. Foulke, Jr., OSHA assistant secretary of labor for occupational safety and health. The campaign’s Web page, “Construction: Build a Safe Work Foundation," was unveiled on April 17 at the Thomas Edison High School of Technology in Silver Spring, Md. Home builders who are thinking about hiring youth for summer work need to be aware of the laws regarding employment of minors. Civil penalties of up to $11,000 can be levied for each violation. For example, 14- and 15-year-olds may be employed by construction companies doing office work in an office setting, but not in a construction trailer on the job site. They also may not operate any power-driven machinery or motor vehicles or serve as helpers on those vehicles. Additionally, minors under age 18 are prohibited from the following construction activities, which have been declared “hazardous” by the secretary of labor:
A PowerPoint presentation from the Department of Labor provides a comprehensive overview of regulations on youth working in construction. Other resources on child labor are available from the Department of Labor at www.dol.gov/esa/whd and www.youthrules.dol.gov/. The sites contain regulations, fact sheets, a field operations handbook, eLaws, frequently asked questions and links to other youth safety and employment resources. Potential employers can also call toll-free: 1-866-4US-WAGE to ask specific questions or register comments. Through its alliance with OSHA, NAHB provides members and others in the residential construction industry, including non-English and limited English-speaking employees and trade contractors, with information, guidance and access to training resources to help them protect employees' health and safety. A variety of safety resources and guidebooks are available through www.builderbooks.com. For more information on construction safety resources available from NAHB, e-mail Rob Matuga, or call him at 800-368-5242 x8507. Reader Survey: Tell Us What Housing News Is Important to YouBecause you regularly read Nation's Building News, we value your ideas and would like your help. Please tell us what information in Nation's Building News is important to you — what you read and what you might like us to add — by answering our short online reader survey. To take the survey, click here. (Please note: If you have already answered the survey questions, thank you.) ‘Buy Now’ Advertising Assistance Nears $1 Million. Apply Now.If your local association is currently engaged in an ongoing advertising campaign in print, radio or television outlets, or if you are planning such a campaign, have your association apply for a “Buy Now” matching advertising assistance grant from NAHB. HBAs from around the country have already applied and have begun to receive their assistance funds. To date, 51 local associations have applied for advertising assistance grants from the $1 million to be awarded during the first phase of the program, and $997,443 has been approved. The total cost of their campaigns is $3.5 million. Another $2 million will be made available if the advertising assistance program is successful, and HBAs are encouraged to apply now. NAHB launched the multi-million dollar grant program last month to assist local home builders associations in an effort to bolster home sales in markets hit hard by the current housing downturn and help offset the cost of local ad campaigns. The NAHB “buy now” ad assistance program will provide grants to qualifying HBAs in three different categories:
To learn more about the program, eligibility considerations and requirements, click here (www.nahb.org/buynowapplication), or call Niki Clark at 800-368-5242 x806l. Impossible Loan Turns Dream Home Into NightmareTo escape their subsidized apartments and get a real house, Alberto and Rosa Ramirez, who earn $300 a week picking strawberries and don’t speak English, decided to pool their resources with the Martinez family, who had $500 in weekly income from mushroom farming, and they estimated they could afford monthly housing payments of $3,000. One of the first homes they were shown was a $720,000 four-bedroom, two-bath house in Hollister, Calif. in San Benito County. When they heard the price, the Ramirezes worried that they couldn’t afford it, but they were assured it was possible. “The monthly payment was supposed to be $4,800, but then, after we bought it, it went up to $5,378,” says Rosa, speaking of their zero-down mortgage with a one-month “teaser rate.” “Our agent told us that once we refinanced, we could get the payments down to $3,000 or less.” For a number of months, the real estate agent paid the difference between the $3,000 the buyers had said they could afford and the loan payment. The arrangement was supposed to carry them over until the group refinanced, they say, but the money-saving refinance failed to materialize. After the Ramirezes stopped paying their mortgage and sought the advice of an attorney specializing in predatory lending cases, they discovered that the home had only been purchased in their name and not with the Martinezes and that it was actually worth between $560,000 and $580,000. According to the National Council of La Raza, 40% of Latino families and more than half of African Americans who receive home loans get higher-cost mortgages, predominately subprime loans. In a study released last month, an analysis of 2005 federal mortgage lending data of large subprime originators in six metro areas, African American borrowers were 3.8 times and Latino borrowers were 3.6 times more likely to receive a high-cost home purchase loan than white borrowers. (www.sfgate.com)
Appraisal Inflation: Some Lenders in Denial About Bogus AppraisalsLed by the 22,000-member Appraisal Institute, the four largest trade groups representing appraisers are asking federal financial regulators to crack down on lenders and loan officers who put pressure on appraisers to raise valuations to allow overpriced deals to go through. Lender complacency about appraisals has enabled con artists to bilk banks and investors of billions of dollars in home mortgage fraud schemes. The FBI estimates that mortgage fraud losses are now approaching $3 billion a year, according to the appraiser groups, and many of those schemes start with intentional inflated property valuations that lenders fail to spot. The basic scenario for a “cash out at closing” scam that is popping up around the country involves real estate agents with listed houses that aren’t selling. To move the properties, they entice buyers or friends to submit an offer for the home that is above the current list price. Working with a cooperative appraiser and an unscrupulous mortgage broker who simply wants the commission, they change the loan documentation to reflect the artificially inflated sales price. The loans are typically for 100% of the price of the home. The seller gets the price at which the home was originally listed, and the buyer gets some or all of the inflated differential as cash at closing. The real estate agents and loan brokers pocket their commissions; the buyer pockets the cash from the closing proceeds and makes loan payments for a while, and then stops. Within months, the property is headed to foreclosure. (www.washingtonpost.com)
Sherwin-Williams CEO: Home Building Dip Will Slow 2007 SalesAlthough most Americans continue to spend freely to redecorate their homes and contractors involved in painting and redecorating commercial and industrial buildings are busy, Christopher Connor, chairman and chief executive of Sherwin-Williams Co., expects his company’s sales and earnings growth to be slower in 2007 than the strong performance of the past three years, largely because of the drop in new-home construction and slower existing-home sales. Management for the major producer and retailer of paints and other coatings estimated that sales for the year will rise “in the low to mid-single digits” from the $7.81 billion of 2006. Despite the housing slowdown and the widely publicized financial problems of some home buyers, “the country is doing well economically,” said Connor. Rising employment and incomes are reflected in a willingness to spend on home decorating and redecorating, he said. In addition, household formations continue at a brisk rate. Initially, that mainly drives the rental market, a company spokesman said, but over time it will help produce a recovery in home construction and sales. “In the last several years we had significant price increases to pass through rising materials costs,” Connor said. “However, this year we expect paint industry materials costs to be about flat to up 2%, and at that level there would be very little price impact on our sales.” Sherwin-Williams estimates that new construction of all types accounts for 15% to 25% of the industry’s architectural paint sales, and new residential construction only 8% to 14%. (www.djnewswires.com)
More Home Owners Extending Their Living Space to the BackyardDominick Tringali, president and CEO of Dominick Tringali Architects, which is based in Bloomfield Hills, Mich. and does two-thirds of its work in the Midwest, told an audience at the International Builders’ Show that almost eight or nine out of 10 houses have some kind of outdoor feature. “The trend that began in high-end homes is now becoming popular even in starter homes,” he said, and he doesn’t believe that it has nearly hit its peak. Part of the reason home owners are paying more attention to their outdoor rooms, he said, is that they are downsizing. Also, Americans are spending more time at home. A recent survey on outdoor living spaces conducted by the Propane Education and Research Council, a member of the National Council of the Housing Industry, found that 50% of those polled said that they were spending more time at home than they were five years ago. Relaxation and the desire to spend more time outside were the top reasons to create an outdoor room, according to the survey. Earlier research by the group in 2005 found that 35% of home owners had a finished outdoor room, and 34% planned to design and purchase one by the following spring. The most recent survey found that nearly two-thirds of the households surveyed owned a gas grill; free-standing gas grills often were their first outdoor appliance purchase. And last year was a good year for the grilling industry. According to the Hearth, Patio & Barbecue Association, more than 17 million grills were shipped in 2006, a 15% increase over 2005. There were more grills shipped in 2006 than any year since 1985. (www.djnewswires.com)
Making a Mint Out of the MoonExploiting a loophole in the 1967 U.N. Outer Space Treaty and claiming ownership of the Earth’s moon for more than 20 years, entrepreneur Dennis Hope has spawned a multi-million-dollar property business selling plots of lunar real estate at $20 an acre. Hope says he has so far sold more than 400 acres, leaving a further eight billion acres up for grabs. Buyers include Hollywood stars, large corporations — including the Hilton and Marriott hotel chains — and even former U.S. presidents Ronald Reagan and Jimmy Carter. George W. Bush is also said to be a stake holder. Hope claims to be selling 1,500 lunar properties a day. He allocates land by simply closing his eyes and pointing to a map of the moon. There is a growing belief that within a matter of decades, the moon will be much more than a scientific outpost and could become a vital commercial frontier. Data collected from the Apollo moon landings have indicated that large deposits of an extremely rare gas called helium 3 are trapped in the lunar soil. Scientists believe that this gas could be used to create a new source of almost inexhaustible, clean, pollution-free energy on Earth. (www.news.bbc.co.uk)
Housing Slump Takes a Toll on Illegal ImmigrantsOffering more than $10 an hour as well as new skills and a shot at upward mobility, construction provided many illegal immigrants with the best job they ever had, a step up from pruning and picking in fruit and vegetable fields in California’s Central Valley. The growing presence of illegal immigrants in home building, mostly working for small labor contractors, might help explain why government statistics have recorded only a small decline in construction employment despite the downturn in residential investment. As building jobs have grown scarce, many of the workers have returned to farm labor. According to the Pew Hispanic Center, a research organization in Washington, D.C., immigrants from Mexico and other Latin American countries account for about one in five construction workers. Those who arrived since 2000 — who are likely to be unlawfully in the U.S. because they had virtually no way of immigrating legally — account for an estimated 7% of the construction work force. They were pulled into the building frenzy of the first half of the decade. According to the analysis by the Pew Hispanic Center, based on Census data, Hispanic immigrants took 60% of the million new construction jobs created from 2004 to 2006. Those recently arrived took nearly half. According to the Labor Department, employment in residential construction has declined by only 28,000 jobs — or some 3% — since its peak last fall. NAHB Chief Economist David Seiders isn’t sure about the quality of the data. He also suggested that reported employment might not be falling as starkly as other statistics because builders do not employ construction workers directly. Instead, they use subcontractors to build different parts of a development. These often use labor contractors, who may also turn to subcontractors to fill their crews. (www.nytimes.com)
Builders Cite Need for FHA Single-Family Reform
NAHB on April 19 called on Congress to enact legislation that would reform and revitalize the Federal Housing Administration's single-family mortgage insurance programs. Testifying before a subcommittee of the House Financial Services Committee, Bill Killmer, NAHB's group vice president for advocacy, said that statutory and regulatory constraints have limited the FHA's ability to respond to the needs of borrowers, resulting in many home buyers ending up with inappropriate mortgages. "Had the FHA been in a better position to respond to changing market forces in the past few years, the subprime situation might not be as severe as it is today," said Killmer. If granted the proper authority by Congress, Killmer said that the FHA's single-family mortgage insurance programs could insure fixed-rate, adjustable-rate and hybrid adjustable-rate mortgage loans to borrowers with limited cash reserves or slightly tarnished credit. "And this could be done on far better terms than the subprime loans that are making adverse headlines daily," he added. As FHA's share of the market fell from 7% in 1995 to less than 2% in 2005, the subprime loan share surged to 20%. "All too often, significant differences between FHA requirements and those for conventional mortgages have been viewed by lenders, appraisers and others as a disincentive to use FHA programs," said Killmer. "And the FHA's unique and often burdensome requirements have caused many home builders to avoid using its programs to build homes — including condominiums — that otherwise would have been well-suited to borrowers who planned to use FHA-insured mortgage loans." With two FHA revitalization proposals before the subcommittee, H.R. 1852 and H.R. 1752, Killmer told lawmakers that NAHB does not favor one bill over the other, but instead seeks "comprehensive FHA reform — period!" He called on Congress to act quickly to empower FHA with the right tools to respond to the needs of borrowers and enable more working families to become home owners. Specifically, NAHB is urging Congress to take the following actions:
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. Mark Your Calendar for the 2007 NAHB Legislative Conference The 2007 NAHB Legislative Conference provides a unique opportunity for builders to speak directly with their members of Congress and to take a stand on the issues that affect their businesses and bottom line. The conference is on Wednesday, June 6 and is a day-long event that coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
States Find Financing Alternatives to Impact Fees
Iowa and Maine are among a number of states that provide good examples of how statutory language can be used by local governments to pursue innovative infrastructure financing alternatives in support of affordably priced housing, according to a new NAHB report. Based on research from the National Conference of State Legislatures (NCSL), the report notes that using impact fees to address such problems as aging infrastructure, traffic congestion, overcrowded schools and inadequate water and sewer capacity drives up the cost of housing and has other serious implications. The publication, “Infrastructure Solutions — Best Practices From Results-Oriented States,” looks at NCSL research on the best state enabling legislation for 11 infrastructure finance alternatives. The NAHB report is the third in a series designed to help state and local governments find infrastructure finance and management strategies that optimize their finite capital resources. “Fortunately, there are effective financing alternatives,” the report says. “Forward-thinking state and local governments have been making the most of some of these alternatives, including special districts, municipal lease finance, tax increment financing and state infrastructure banks. These and other mechanisms enable a community to leverage its limited resources most effectively — to get more bang for the buck.” However, the report further notes that “few states have taken advantage of most of these innovative infrastructure alternatives, and many of the most promising options are overlooked by all but a handful of states.” For example, tax-exempt municipal lease finance that is being used as an infrastructure-financing tool in Maine is authorized in only four other states. Similarly, statutory language authorizing special infrastructure finance and development districts has only been adopted by five states, including Iowa. Tax-exempt municipal lease finance is basically a “rent to own” program in which a municipality pays one-year renewable obligations to a third party lessor as rent payments on a given project. These leases are not considered outstanding debt for bond ratings. The financed infrastructure often becomes the property of the lessee once the debt is retired. In Maine, the program was authorized under the state’s municipal bond bank. A single state agency is charged with administering the law and there is a single point of contact to determine implementation. Maine’s statute calls for a wide range of direct and indirect financing options and sets strong accountability standards for receiving financial assistance. The program makes available a variety of direct or indirect financing, insurance, borrowing, credit enhancement and other financial tools for the lease, lease-purchase, rental or right of use of public safety and works vehicles, portable classrooms, computer equipment, school buses, telecommunications equipment, energy conservation equipment and renovation projects, and other eligible projects. The bond bank does not lend money directly to the program. Instead, it conducts the competitive bid process on behalf of the governmental entities. Although Maine’s program was authorized in 1991, it took several years for it to become operational. Since the first lease was approved in 1998, 63 equipment lease purchases have been approved totaling $14.2 million for such things as modular classrooms and office facilities, school buses, fire trucks and ambulances. Also since 1998, 18 mortgage lease purchases totaling $9.5 million have been approved, primarily for building additions, bus garages and maintenance garages. Iowa’s Special Districts statute provides for a variety of special districts, including water, street lighting, law enforcement, recreational, emergency medical, library and sanitary improvement facilities. In addition, the legislature included a real estate improvement district to provide for infrastructure development to lower the costs of developing housing. The real estate district provides for development of water, sewer, roads and other infrastructure. Click here for online resources designed to help home builders associations educate their local and state governments on alternative infrastructure financing alternatives that make sense for the state and the community. For more information, e-mail Debra Bassert at NAHB, or call her at 800-368-5242 x8443. Two Other Alternative Infrastructure Financing Reports Available Free From NAHB Better alternatives on infrastructure finance and management strategies that enable state and local governments optimize their finite capital resources are available free in two other reports from NAHB:
Mark Your Calendar for the 2007 NAHB Legislative ConferenceThe 2007 NAHB Legislative Conference provides a unique opportunity for builders to speak directly with their members of Congress and to take a stand on the issues that affect their businesses and bottom line. The conference is on Wednesday, June 6 and is a day-long event that coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
March Home Starts Up By a Hair, as Midwest SurgesLed by a 44.5% rebound in the beleaguered Midwest from a sharp decline in February, national housing starts edged up a scant 0.8% in March to a seasonally adjusted annual rate of 1.518 million, the Commerce Department reported on April 17. Construction of new single-family homes, boosted by a 35.9% surge in the Midwest, rose 2.0% in March to a seasonally adjusted annual rate of 1.218 million units. This was 24.6% below the pace of a year earlier. Multifamily housing construction fell 3.8% for the month to a seasonally adjusted annual rate of 300,000 units, down 16.0% from a year earlier. "Builders, overall, have been systematically cutting back on new building activity for more than a year now," said NAHB President Brian Catalde. "This slowdown is enabling them to reduce their inventory and better position themselves for the balance of the year, especially when faced with uncertainties over the impacts of the subprime-related tightening of mortgage lending standards on home sales." "This was the second warmest March on record, and the numbers for starts and permits undoubtedly were supported by this factor," said NAHB Chief Economist David Seiders. "Furthermore, extreme gyrations in the numbers for the Midwest region have obscured underlying trends for several months." "Nationally, housing starts for the first quarter of this year were down by 5.5% from the final quarter of 2006 and nearly 30% below the first quarter of last year," Seiders said. "NAHB's forecast shows another modest decline in the second quarter, followed by a gradual recovery beginning around mid-year. We now expect total housing starts for 2007 to be down by 20% from last year." Regionally, production of new homes and apartments was down in the Northeast, South and West by 6.1%, 2.7% and 7.7%, respectively. The 44.5% increase in the Midwest was the region’s first upturn in six months. The pace of construction in March was well below a year earlier in all four regions. Permit issuance increased 0.8% for the month to a seasonally adjusted annual pace of 1.544 million units, 25.9% below the level of a year earlier. Single-family permits rose 1.4% to 1.114 million units, off 28.4% from their year-earlier rate, and multifamily permits increased 1.6% to 440,000 units, 17.0% below the March 2006 annual rate.
How Deep Is the Correction? Attend Construction Forecast Conference on April 26 Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed? Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C. Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference. For more information and to register, click here. Can't Attend in Person? Webcast of Conference Also Available The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008? Find out in HousingEconomic.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.
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 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. Fannie Mae Moving to Limit Turmoil in Subprime MarketFannie Mae last week indicated that it is moving to help limit turmoil in the subprime mortgage market and provide more stable financing alternatives for subprime borrowers in the future. In testimony on April 17 before the U.S. House Committee on Financial Services, Daniel Mudd, Fannie Mae’s president and CEO, noted that the company’s “disciplined approach” to the subprime market had protected its lenders and borrowers and also “given us some room to support the market, as Congress intended.” He noted that Fannie Mae’s exposure is relatively minimal, with less than 2.5% of its business in what can be defined as subprime lending. However, Fannie Mae is not going to walk away from the problem, Mudd said. “We are concerned about a liquidity crunch in the subprime market — the risk that as the turmoil shakes out, the flow of capital to finance subprime lending could slow to a trickle.” Mudd said that his company currently is focusing its efforts on helping borrowers who are facing imminent “payment shock” from adjustable-rate loans that are scheduled to reset at higher rates. “We believe the best way to influence the subprime market, and be part of the solution, is to stay engaged and provide funding for conventional loans to these borrowers that are affordable over the long term.” A new company initiative called HomeStay has three components to help subprime borrowers, he said:
How Deep Is the Correction? Attend Construction Forecast Conference on April 26 Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed? Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C. Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference. For more information and to register, click here. Can't Attend in Person? Webcast of Conference Also Available The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008? Find out in HousingEconomic.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.
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 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. Freddie Mac $20 Billion Pledge to Help Subprime BorrowersFreddie Mac announced last week that it will purchase $20 billion in fixed-rate and hybrid adjustable-rate mortgage (ARM) products that will provide lenders with more choices to offer subprime borrowers. The products are still being developed by the company and are slated to be introduced by mid-summer. They are designed to limit payment shock by offering reduced adjustable rate margins, longer fixed-rate terms and longer reset periods. “Today, we’re again ramping up our commitment through this $20 billion pledge to assist families caught up in the subprime crisis and to make the market more stable and transparent for all borrowers,” Richard Syron, Freddie Mac chairman and CEO, told an April 18 Homeownership Preservation Summit convented by Sen. Christopher Dodd (D-Conn.) and attended by Sen. Richard Shelby (R-Ala.). Freddie Mac previouisly announced that it would not buy subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. Among other things, Freddie will require that subprime ARMs — and mortgage-related securities backed by them — qualify borrowers at the fully indexed and fully amortizinig rate. The company also will limit the use of low-documentation products in combination with these loans; require that loans be underwritten to include taxes and insurance; and strongly recommend that the subprime industry collect escrow for taxes and insurance, as is the norm for prime mortgages. For more information on mortgage lending resources available from NAHB, e-mail Bill Renner, or call him at 800-368-5242 x8597.
How Deep Is the Correction? Attend Construction Forecast Conference on April 26 Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed? Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C. Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference. For more information and to register, click here. Can't Attend in Person? Webcast of Conference Also Available The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008? Find out in HousingEconomic.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.
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 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. Webcast or Live: Attend April 26 Construction Forecast ConferenceWill housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed? Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C. Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference. For more information and to register, click here. Can't Attend in Person? Webcast of Conference Also Available The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008? Find out in HousingEconomic.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.
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 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. 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.
How Deep Is the Housing Correction? Attend Construction Forecast Conference on April 26 Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed? Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C. Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference. For more information and to register, click here. Can't Attend in Person? Webcast of Conference Also Available The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008? Find out in HousingEconomic.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.
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 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. Builders' Tip: Building a Blueprint Table on the Job Site
Like most builders, I’ve had to spread out the working drawings for a project on the ground, over a sawdust-covered subfloor or across the hood of the truck. I finally got fed up with having to look at drawings this way a few years ago. Now I build a simple job-site blueprint table that saves time, frustration and a lot of wind-torn pages.
— Will Ruttencutter, Coshocton, Ohio 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 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 on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Help NAHB Create Effective Business Management ToolsHelp the Business Management & Information Technology Committee develop publications and education courses designed to help members operate their businesses more profitably by participating in work groups at the Spring NAHB Board of Directors Meeting in Washington, D.C. in June. The committee’s meetings are open to all NAHB members. All work group meetings are Thursday, June 7:
The meetings are open to all who register for the spring board meeting. Click here for more information on NAHB’s Business Management & Information Technology Committee. NAHB Has More Than 300 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 300 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. ‘Cost of Doing Business’ Survey Submission Deadline Is May 1The deadline for submitting your “Cost of Doing Business” survey, which when published enables home builders to compare profitability, cost of sales and expenses with like-sized builders from across the county, is Tuesday, May 1. Respondents must complete and submit the survey by May 1 to receive a complimentary copy of the published study (a $99 value to members; $299 for non-members). The “Cost of Doing Business Study” analyzes several categories, including volume, operation type and land vs. no land costs to help builders fine-tune comparisons between study results and their companies. Go to www.nahb.org/cost to participate in “Cost of Doing Business Study,” sponsored by Grant Thornton. NAHB Has More Than 300 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 300 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. Learn How Others Builders Use Software and TechnologyIn an effort to continually improve NAHB’s software and technology resources for members, The Business Management & Information Technology Committee is conducting a software and technology survey. Members who participate in the survey will receive a copy of the results, which will enable them to see how other builders are using software and technology. “We need to hear from builders about their software and technology needs,” said Steve Lewkowitz, chair of NAHB’s Business Management & Information Technology Committee IT work group. “Once we know their needs, we can create education and resources to help builders use technology to make their businesses more efficient and profitable.” The survey runs through Tuesday, May 1. Participants will receive a copy of the results via e-mail. Click here to take the survey. Builders Search NAHB’s Technology Directory for Solutions Builders seeking software and technology solutions are turning to NAHB’s Technology Solutions Directory, an easy-to-use directory that enables builders, remodelers, contractors and other industry professionals to find valuable information on software and IT solutions and services for their businesses. Created by NAHB’s Business Management & Information Technology Committee, the technology help line has become an on-demand and manageable resource for building industry professionals overwhelmed by the profuse amount of technology solutions choices available and who want to focus on industry-oriented solutions that meet their needs. The Technology Solutions Directory — available to members online at www.nahb.org/tsd ― lists technology solutions by vendor and by type, including estimating software and systems, accounting/financial control, scheduling, sales and marketing, and Web site design. To Be Listed Software and technology solutions providers interested in being listed can sign up at www.nahb.org/tsd3. To learn more, e-mail Wil Heslop at NAHB, or call him at 800-368-5242 x8472. 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. Estimating Software Made Simple EstimatorPRO™, available through BuilderBooks.com, helps you complete complex home building and remodeling estimates quickly and accurately. Its simple point-and-click design eliminates “guesstimates,” paperwork and common math errors. Designed specifically for home builders and remodelers, EstimatorPRO™ enables you to create estimating operations that are powerful and reliable enough for your most important management decisions. To view or purchase this software online, click here, or call 800-223-2665. Elvis' Childhood Apartment Rehab Among Pillars WinnersTrendy loft apartments in the RCA building, an artist colony for seniors and a rehabilitated public housing development including Elvis Presley’s childhood apartment were among this year’s innovative winners of the NAHB Pillars of the Industry Awards. Considered the most prestigious in the multifamily housing industry, the awards honor excellence in apartment and condo design, development, marketing and management. Winners were recognized for excellence and superior leadership in more than 30 categories as part of the annual Pillars conference for apartment and condo developers held April 11-13 in Hollywood, Fla. "These award-winning projects are proof-positive that multifamily housing in this country just keeps getting better and better," said Leonard Wood, managing partner of the Atlanta-based Wood Partners, LLC, and chairman of NAHB's Multifamily Leadership Board. "We saw tremendous innovation across so many categories — from luxury condos to student housing — but what is most impressive is what multifamily builders are doing to serve the needs of families with low and moderate incomes, including military personnel." Wood noted that this year's awards competition had the highest number of entries ever in the affordable housing categories, including four large-scale redevelopments of whole neighborhoods into mixed-income and mixed-use communities. Clark Realty Capital took top honors in the Best Neighborhood Revitalization category for its Monterey Bay Military Housing development in California. The Multifamily Community of the Year Award, which is sponsored by Freddie Mac, went to the architectural firm Pappageorge/Haymes for its University Commons condominium community developed by The Enterprise Companies in downtown Chicago. The site of a former fruit and vegetable warehouse, the condo project also won the top award in the Best Adaptive Reuse (from a non-residential product to a condominium community) category. NAHB named Forest City Residential the Freddie Mac Multifamily Development Firm of the Year. The Cleveland-based development firm with apartment and condominium projects nationwide was lauded particularly for its ability to seek out and successfully complete highly complex developments on a massive scale, such as redeveloping the former Denver airport into a residential community. AvalonBay Communities of Alexandria, Va., was honored as the Property Management Company of the Year. Following is the complete list of winners: Builder Awards Category
BUILD-PAC Showcases Multifamily-Specific Legislation at PillarsBUILD-PAC, represented by Cara Mason, showcased multifamily-specific legislative information and contribution information at a booth at the Multifamily Pillars of the Industry Conference and Awards Gala in Hollywood, Fla. earlier this month During the conference from April 11-13, Mason met with the Multifamily Leadership Board and Leonard Wood, chairman of NAHB Multifamily, discussed increasing BUILD-PAC participation with the board members and their desire to get more involved with BUILD-PAC and the legislative issues before Congress that impact the housing industry. For more information about the Multifamily Housing Council’s involvement in BUILD-PAC, e-mail Cara Mason at NAHB, or call her at 800-368-5242 x8486. EPA Rule Could Increase Exposure to LeadA proposed Lead, Renovation, Repair and Painting Program rule that would govern remodelers working in homes in which lead paint is present should be reassessed to make sure that it does not discourage home owners from hiring trained, professional contractors in order to avoid the high costs of mandated clearance, NAHB said in an April 17 letter to the U.S. Environmental Protection Agency. In its comments, the association added that it remains committed to the safety of its members and their employees and clients and “applauds the EPA’s efforts to end lead poisoning.” An NAHB study on lead-safe work practices completed last year shows that a home is better off after a remodel than before, as long as it’s done by trained remodelers who clean the work area with HEPA-equipped vacuums, wet washing and disposable drop cloths. “NAHB remains convinced of the merits of these techniques and supports training renovators in these techniques and certifying their firms as ‘lead-safe,’’’ the letter said. The additional training, however, is likely to drive up the cost of remodeling, which may encourage home owners to do the work themselves without following these lead-safe practices. To prevent this from happening, NAHB is urging the EPA to provide incentives for home owners to hire professionally trained contractors when they remodel houses built before 1978, the year in which lead-based paint stopped being sold for homes. “We urge the EPA to educate the public on the risks of lead-based paint and other lead sources, tell the public what it can do to reduce its risks of exposure to lead and endorse the hiring of competent, trained remodelers when renovating pre-1978 dwellings,” the letter said. NAHB is especially concerned about the clearance testing required after the project has been completed. A survey of home owners found that an overwhelming 81% of those planning to hire a professional remodeler within the next two years said they would not pay the estimated $200 per room to ensure a safe lead dust level. Similar results were found for those involved in “do-it-yourself” projects. “Any clearance testing requirements create an incentive to avoid hiring professionally trained remodelers, raising the chance of exposure to lead-based paint dust rather than reducing it,” the letter said. NAHB is also concerned about liability. “A clearance testing standard for NAHB remodelers would make them responsible for all preexisting lead paint hazards and impose the positive duty to permanently remove them, which matches the definition of abatement,” the letter said, even though remodelers are not specialists in lead abatement. Without these necessary changes, the EPA’s goal of reducing lead poisoning in children is not likely to be met, NAHB cautioned, because the proposal as it now stands will discourage home owners from remodeling old homes or hiring professionals to do the work. “The rule will likely increase — not decrease — the risk of children’s exposure to lead,” NAHB said. NAHB Remodelers leaders are now considering whether to launch training programs in lead-safe work practices for their members, according to Remodelers Chair Mike Nagel, CGR, CAPS, an Illinois remodeler. “There are two important messages here,” Nagel said. “First of all, it’s very important that home owners hire professional remodelers, especially if they live in pre-1978 housing. “Secondly, we need to encourage more remodelers to join NAHB so they can take advantage of all the professional training now available, and to learn about lead-safe work practices. It’s the professional thing to do.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Concrete Tour Mixes Plant Visits, Latest TrendsThe latest advances in concrete construction, production, materials and design will be showcased at the 2007 Concrete Home Building Council Concrete Technologies Tour in Minneapolis. The tour will be held on Sunday through Tuesday, May 6-8. The tour will feature educational programs, networking and behind-the-scenes tours of six cement-based building materials and manufacturing facilities. Plants on Tour The plants on the tour include:
Online Registration Available Until Friday, April 27 Online registration is available until Friday, April 27. For more information, or to register, visit www.nahb.org/concretetour.
‘Concrete Ideas for Living’ Available at BuilderBooks.com “Concrete Ideas for Living,” with more than 200 photographs of unique residences — including close-ups of some of the most innovative and contemporary designed concrete kitchens, floors, bathrooms, facades and patios — and available through BuilderBooks.com, demonstrates the limitless potential and flexibility of concrete as an artistic medium. To view or purchase this publication online, click here, or call 800-223-2665. Attend the Modular and Panel Plant Tour May 20-22The 2007 Modular and Panel Plant Tour, a behind-the-scenes look at modular and panelized home building industries, will be held May 20-22 in Roanoke, Va. The tour, by NAHB's Bulding Systems Council, will feature educational programs, networking and tours of eight plants. Plants on Tour The plants on the tour include:
To Register For more information, or to register, visit www.nahb.org/PlantTour. 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 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 on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Fierce Fire Sprinkler Debate Expected at ICC HearingsNAHB leaders are preparing for intense debate over mandatory fire sprinklers during the International Code Council Final Action Hearings May 21-26 in Rochester, N.Y. At issue is whether to move sprinkler requirements from the appendix into the main body of the 2006 International Residential Code, which governs about 95% of new home construction. That move would make fire sprinkler systems required in one- and two-family homes and townhouses. NAHB is opposed to the amendment that would move the requirements, and is supported by many building officials who agree that code provisions adequately provide for fire safety without needing mandatory sprinklers. IRC amendments will be discussed May 22-23. The sprinkler amendment at issue is IRC proposal RB-114. Proponents of fire sprinkler systems are encouraging their supporters to go to the hearings and sway the vote. They say sprinkler systems add an average of only $1.00 to $1.50 per square foot to the cost of a home. However, an NAHB survey of installation costs in jurisdictions where sprinklers are required demonstrates that the cost to builders can be as high as $6.88 per square foot. Prices like that have a significant impact on housing affordability — preventing families who rent substandard housing from purchasing a newer, safer home, NAHB has found. A Smoke Alarms Work Web site was created by NAHB as a public safety tool and to remind home owners to maintain their smoke alarm systems. The site includes helpful information about fire safety, as well:
If the sprinkler language remains in the appendix, the choice to mandate sprinklers will be left to state and local jurisdictions — a choice ICC officials said they preferred during the last code cycle. “Unfortunately, some of the very same sprinkler interests who advocated this position in the last cycle are now leading the charge to mandate sprinklers in the IRC,” Dunn said. “It is also unfortunate that they choose to expend so many resources to push for sprinkler mandates in homes that are already adequately protected by IRC requirements, especially when the overwhelming number of fire fatalities are occurring in homes without working smoke alarms,” Dunn added. NAHB is encouraging builders to communicate these concerns to local building officials and to encourage their attendance at the Rochester hearings to vote against sprinkler mandates in the IRC. Members can also contact their local home builders association to find out how to help. For more information, e-mail Steve Orlowski at NAHB, or call him at 800-368-5242 x8303. Work Begins on National Green Building StandardMore than 70 builders, designers, local government officials and manufacturers representatives gathered at the National Housing Center April 19-20 to begin work on a new national green building standard. Based on the NAHB Model Green Home Building Guidelines, the new standard will be written for accreditation by the American National Standards Institute, the recognized leader in the standardization process. NAHB is working in collaboration with the International Code Council to develop the standard. Encompassing single-family construction, remodeling and multifamily construction, the national green building standard is expected to be completed in early 2008. ANSI requires consensus-based decision-making, opportunity for public comment and other processes to help guarantee a standard more likely to be accepted by all members of the home building industry — as well as those who regulate them. The standard is on an aggressive timeline for development, noted a number of committee members. It needs to be, said representatives of NAHB’s Research Center, which is coordinating the standard process, because market demand for green-built homes is accelerating rapidly. To prepare for last week’s meeting, the Research Center posted a draft of the guidelines on its Web site, which builders are encouraged to check for updates on the standard’s progress. A number of industry members already have: the Research Center had catalogued 259 individual comments on the proposed standard’s various components by mid-April. It’s too soon to see how many comments will be incorporated into the new standard, but builders can expect some specific changes, said Vladimir Kochin, director of applied engineering for the NAHB Research Center.
“Inherent in a national standard is the embodied notion that we have to have flexibility. It’s one of the cornerstones” of the guidelines, he said. It’s also a great leap of faith for NAHB, he pointed out. “We aren’t in a position to craft NAHB’s goal” if that goal is a standard that reflects only the preferences of builders, Jones said. “NAHB took an existing document and actually relinquished that” when the association turned the guidelines over to the ANSI process. Bill Killmer, NAHB’s group vice president for advocacy, welcomed ANSI standard committee members and observers to the National Housing Center, noting that the meeting location is just one indication of how important the creation of a green building standard is to NAHB and its 235,000 members. NAHB’s board of directors voted in February to establish policy on climate change and its possible ramifications for home builders and home buyers. The board also recommended that NAHB establish a national green building program as the industry’s solution. “Turning the guidelines into a standard is part and parcel of this effort,” Killmer said. “We take great pride in welcoming you here,” he told committee members. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.
Get Green Building Intelligence Today at BuilderBooks.com “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green home building. The report provides the results of market research conducted by McGraw-Hill Construction and NAHB about green building in home construction. To view or purchase this publication online, click here, or call 800-223-2665. Improved Rules Sought for Energy Efficiency Tax CreditNAHB has submitted regulatory comments to the Department of the Treasury and the Internal Revenue Service to improve operation of the tax credit program (this link is for NAHB members only) for builders who construct energy-efficient homes. To qualify for the credit, which was passed by Congress in 2005, a qualified tax-credit rater must certify that the home achieves a 50% reduction in energy use over the 2004 supplement to the 2003 International Energy Conservation Code. The current rules for the credit effectively establish the Residential Energy Services Network (RESNET) as the only rating network able to certify tax-credit raters. Because this limitation restricts options for builders and increases costs for both builders and raters, NAHB has asked the Treasury to expand the definition of certifiers. The lack of competition for certifiers has also created some confusion. For example, information on RESNET’s Web site indicated that the IRS required raters to have $500,000 in liability insurance to inspect tax-credit homes. After NAHB confirmed with the IRS that this was not a requirement, association staff met with RESNET representatives to inform them of the problem. RESNET has corrected the information. Also, while the administrative rules for the tax credit outlined in Notice 2006-27 specify an “equivalent rating network” for certifying the tax credit, the term is not defined. NAHB has recommended that the IRS identify a process through which any qualified organization could be defined as an equivalent rating network, and it is also pursuing this modification with the Department of Energy and the tax-writing committees of Congress. NAHB has also asked the Treasury to clarify qualifying definitions of the credit to make certain that it applies to homes sold for rental purposes and homes where there is no transfer of ownership after the construction is complete. For more information on this or other tax issues, click here to access the taxation section on NAHB's Web site; or e-mail Robert Dietz at NAHB, or call him at 800-368-5242 x8285.
Get Green Building Intelligence Today at BuilderBooks.com “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green home building. The report provides the results of market research conducted by McGraw-Hill Construction and NAHB about green building in home construction. To view or purchase this publication online, click here, or call 800-223-2665. KB Home Offering Buyers Eco-Friendly ProductsKB Home has introduced myEarth, a program educating home buyers on the eco-friendly products available at the 31 KB Home Studios in major metropolitan markets across the country. The studios offer thousands of design choices for home buyers — including flooring, cabinets, appliances, lighting, countertops and more. “Consumers are increasingly interested in ways they can help preserve the environment,” said Lisa Kalmbach, senior vice president of KB Home Studio. “myEarth highlights products, many that have we have offered for several years, that offer benefits to both the home buyer and the environment,” she said. “We have already seen an increase in sales for products such as radiant barriers that demonstrate eco-friendliness and cost-savings benefits.” Products throughout the studio are tagged with the myEarth logo and are accompanied by information explaining their benefits. They can be found in these categories:
For information about green home building resources available from NAHB, e-mail Cali Schmidt, or call her at 800-368-5242 x8132.
Get Green Building Intelligence Today at BuilderBooks.com “Residential Green Building SmartMarket Report,” available through BuilderBooks.com, addresses the growing trends and opportunities in green home building. The report provides the results of market research conducted by McGraw-Hill Construction and NAHB about green building in home construction. To view or purchase this publication online, click here, or call 800-223-2665. Permeable Paving Helps Solve Runoff From April ShowersPermeable paving can help solve storm water runoff and erosion problems and is a valuable upgrade, according to the Partnership for Advancing Housing Technology's (PATH) Tip of the Month for April. Permeable pavement mixtures and grid systems minimize water runoff problems, recharge the groundwater, help filter out pollutants and improve the aesthetics of the home, PATH says. Installing porous pavers is easier in some ways than installing impermeable pavers, PATH says, with the biggest difference the substrate materials below the paving, which must be designed to handle the water. Several options are available:
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