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Bid to Require Fire Sprinklers Defeated at Code HearingsDuring final hearings in Rochester, N.Y. last week for proposed changes to the International Residential Code, affordable housing advocates pushed back an effort to include requirements for fire sprinklers. Proponents of mandating fire sprinklers for one- and two-family homes were unable to muster the two-thirds majority vote they needed. The May 22 vote was 476 to 375. Contained in the code’s appendix, fire sprinkler requirements will remain a local jurisdictional choice, which is exactly as it should be according to representatives from NAHB state and local home builders associations who spoke at the code hearings. Building officials, nevertheless, are finding the arguments of fire-sprinkler advocates increasingly persuasive, putting the onus on home builders to continue to emphasize the effectiveness of the safety measures being incorporated into today’s homes and the importance of working smoke alarms and fire safety education to prevent fires. In California, “more than 95% of fire fatalities were in homes built 20 years ago. That’s a tragedy,” said Bob Raymer, technical director for the California Building Industry Association, before a packed hearing room. “But the fact is, the code changes we have made over the past 20 years are working,” making homes safer than ever, he said. “The cost of sprinklers is $10,000 to $15,000 in my community,” said a representative from Utah. “How many of you could afford to buy your house again where you live, and then add on the price of a sprinkler system? We need to have a balance.” Lee Schwartz, executive vice president for government relations for the Michigan Association of Home Builders, testified that Habitat for Humanity officials in his state voted unanimously to oppose moving fire sprinkler requirements from the appendix to the main body of the code because of affordability and maintenance issues. “Many of our affiliates find they need to conduct several sessions of maintenance classes for some of our home owners to understand even basic home upkeep, such as changing filters on furnaces and cleaning out gutters, to say nothing of the original cost [of fire sprinklers] to the family,” Habitat for Humanity of Michigan President and CEO Kenneth W. Bensen said in a letter to code officials. “By raising the cost of the home and setting forth another barrier in the way of those in the greatest need to afford a home, this requirement would harm our mission of increasing the capacity to building simple, decent homes in Michigan,” Bensen said. Once it was demonstrated that smoke alarm system technology worked reliably, home builder association members in his state threw their support behind measures to require the alarms in all existing homes, Schwartz added. Home builders and code officials opposed to mandating residential fire sprinklers have too many unanswered questions about their reliability, installation requirements, maintenance, inspection procedures and long-term functionality to be able to support them, speakers said at the hearing. Having installed fire sprinklers in a 17-home development, Don Pratt, a Michigan builder and code official, said that “fire suppression systems are not ready to be installed in single-family dwellings” because of the lack of appropriate technology. “I plead with you; we need more time to figure out the best system.” Other speakers said that emphasizing safety in existing homes is what’s needed to combat fire fatalities. “Making the house safer for middle- and upper-income people [who can afford new homes] is not going to help low-income people” in substandard housing or who don’t understand the importance of working smoke alarms, said a Shreveport, La. building official. “We need to solve the problem where the fire is. We haven’t had a fire death in a year and a half because we have a fire chief who supports public education” on fire safety, he said. NAHB members also emphasized that the association does not oppose fire sprinklers and that it has asked the International Code Council to convene an ad hoc committee to develop lower-cost alternatives to the systems that are currently available. NAHB also supports efforts to increase the effectiveness of smoke alarms. “We request that ICC join NAHB in a joint working group to propose solutions that both our organizations could embrace and pursue to end this needless loss of life, perhaps as part of the ICC Foundation efforts to promote building safety,” said Eric S. Borsting, NAHB Construction, Codes & Standards Committee chair, in an April 6 letter to ICC President Wally Bailey. Association leaders who worked to get the home builders’ pro-smoke alarm message heard said they were pleased with the results of the vote. “Reasonable minds have spoken,” said Borsting, who attended the hearings in Rochester. “When our members talk to their local building officials, it becomes very clear that there are still too many unanswered questions on metering, plumbing, backflow — many, many issues. “The recurring theme I heard was that building officials want a choice, and keeping residential fire sprinklers optional maintains that choice,” Borsting said. “The hearing showed that home builders and code officials, working together, are a powerful voice on behalf of new home buyers, who overwhelmingly choose not to install fire sprinklers. We will continue to emphasize our message of safety and affordability and the importance of maintaining that balance." For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Floor Plans: Personal Outdoor Living Space As You Like It
Inside Bennett Homes at Dahlia Park, in Issaquah, Wash., the builder offers an array of features that give home owners the flexibility to meet the needs of the way they live today — and in the future. There are master suites on the first floor, dual masters, hobby rooms where home owners can pursue their special interests, extensive built-in storage and more. But it is outside in the garden room where personal living space is made truly personal. Bennett Homes offers a variety of garden room choices — each themed and including features for different outdoor lifestyles. The homes and their gardens will be on tour during the NAHB/BALA Design Institute for Builders from June 25 to 27 in Bellevue, Wash. How Does Your Garden Room Grow?
The Entertainer with its manicured lawn and ample room for patio furniture was designed for outdoor garden parties, dinners and soirees. The Retreat, on the other hand, with its lush plantings, flagstone surfaces and water feature sets the stage for relaxation.
Bennett Homes also offers The Outdoor Chef with a cozy fireplace, an outdoor cooking center with a sink and a massive gas barbecue, and The Gardener, which is accented with a trellised path of pavers leading to a spacious patio, a bird bath, potting table, raiser planter with a sea wall and more.
Nooks, Crannies and Grandma’s Attic An example of Bennett Homes' attention to detail can be found in the many nooks and crannies dedicated to storage and other uses. Grandma’s Attic is attic space lit by a gable window and reminiscent of an old fashioned attic, but it’s not just for grandma. The space is ideal for a sewing room, home office, playroom, study, hideaway or for storing family treasures.
Built Green™ for Healthier Living in the Northwest The homes are among the first in the Northwest to achieve a four-star level of Built Green™ — an environmentally-friendly, non-profit, residential building program of the Master Builders Association of King and Snohomish Counties. Built Green™ homes are designed to provide homeowners with comfortable, durable, environmentally friendly homes that are cost-effective to own and operate. These resource-efficient homes are crafted to exceed building codes and provide home owners with years of healthy, quality living, while protecting the precious Northwest environment.
ICC Hearings Decide on CO Alarms, Foundation Wall Anchors and MoreThe culmination of the code amendment cycle for 2006 and 2007, the May 21-26 final action hearings of the International Code Council (ICC) ended in Rochester, N.Y. last week with a wide range of decisions of importance to the nation’s home building industry. In each amendment cycle, through written and oral testimony NAHB actively advocates practical, cost-effective building codes for the International Residential Code (IRC) and the ICC’s other model codes. In Rochester, building code and fire officials reconsidered more than 650 proposed amendments out of the more than 2,200 decided upon at initial public hearings held by ICC last fall. State and local jurisdictions designated these representatives to consider all the proposals and vote on them after hearing extensive testimony on each one. NAHB prepared testimony on some 250 proposals of particular concern to the home building industry, especially those amending the IRC. As a result, voting officials agreed with home builders that a number of proposals should be rejected. Among the most significant proposals:
“What NAHB did was stand up and lay out the facts,” said NAHB Construction Codes & Standards Committee Chair Eric Borsting, who attended the hearing along with a dozen other members and staff. With some proposals, such as the one that would have mandated carbon monoxide detectors, proponents tended to use emotion, rather than reason, in presenting their arguments, he said. “Our testimony and the testimony of building officials who understand that there is not enough technical data to support mandates convinced the assembly that it was true,” he said. NAHB will provide members with a comprehensive report of the final hearings in mid-June. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. 2007 National Membership Day Sets New Record, 11,845More than 400 local associations phoned in 11,845 new member pledges during NAHB’s 2007 National Membership Day on May 22, setting a new record for the event, according to preliminary results from the annual membership drive. This year’s total was 24% higher than last year, the previous Membership Day record. “I know some people are surprised by the big jump in our numbers this year, but I’m not,” said Keith Butz, a builder member from Des Moines, Iowa who attended the telethon and Webcast at NAHB. “The networking and benefits membership offers are especially valuable when buyers are being more scrupulous and builders are being more cost-conscious. It’s times like this when we need membership the most and these numbers prove it.” New Member Breakdown The breakdown of new members recruited included:
The top performing local associations were, according to preliminary pledge results:
Top Performing State Associations The top performing state associations were, according to preliminary pledge results:
Whirlpool, NAHB’s exclusive membership sponsor, awarded the top prizes to the day’s most successful recruiters. In addition, several NAHB Member Advantage companies gave prizes to winners of the Biker Alley Trivia contest broadcast throughout the National Membership Day Webcast. The 2007 National Membership Day Webcast archive are available at www.nahb.org/MembershipDay beginning Wednesday, May 30.
$1.2 Million Still Available in ‘Buy Now’ Grant Funds, Apply TodayNAHB has $1.2 million in “Buy Now” advertising assistance grants available to local associations to bolster home sales in markets hit hard by the current housing downturn. NAHB is encouraging HBAs that have not yet received or been approved to receive grant money to apply for NAHB “Buy Now” Advertising Assistance Program grants. To date, 95 local associations in 30 states have received or been approved to receive nearly $1.8 million in NAHB advertising assistance. Including the matching funds that the HBAs contributed, the total value of their advertising campaigns is more than $5.5 million. To view a list of these HBAs and their grant level categories, click here. The NAHB “Buy Now” Advertising Assistance Program provides grants to qualifying HBAs in three categories:
NAHB is encouraging associations that have received grants to promote their grant to their membership through HBA publications and newsletters and on their Web sites. To learn more about the program, eligibility considerations and requirements, click here, or call Niki Clark at NAHB at 800-368-5242 x806l. Nation's Building News Will Not Be Published June 4 or June 11Nation's Building News will not be published June 4 or June 11 while NBN staff is attending industry meetings and the NAHB Spring Board of Directors Meeting. Regular weekly publication will resume June 18. America’s Most Overpriced Home MarketsA slumping housing market, where only 5% of residents could afford to buy the median-priced home according to the NAHB/Wells Fargo Housing Opportunity Index, and a high housing price-to-earnings ratio have made San Diego the nation’s most overpriced real-estate market, according to Forbes magazine. “Had weather been included as a statistical measurement, there’s no doubt that San Diego would have avoided our list of top 10 most overpriced cities, but we didn’t factor in sunshine,” Forbes said. Forbes derived its list from data for the 40 largest metro areas and took each market’s median home price and divided it by annual rents minus taxes and insurance for those properties to obtain a price-earnings ratio. The average P/E ratio was 28. Detroit was the only city out of the largest 40 to have lost jobs since 2005, and while it was not one of the 10 most overpriced home markets, it was also not considered a good place to invest in housing. Almost 88% of the homes in Detroit were affordable to those there with a median income and its 17.5 P/E ratio was relatively low, but already stagnant home prices there have decreased at a rate of 1% over the past year. Miami was second on the list, followed by Sacramento, Calif.; San Francisco; Washington, D.C.; Honolulu; New York; Los Angeles; Boston; and San Jose., Calif. (www.forbes.com)
Mortgage Demand Up, But It’s ‘Nothing to Get Excited About’For the week ending on May 18, mortgage applications rose for the fourth time in five weeks, according to the Mortgage Bankers Association. But many lenders have tightened their standards as defaults and foreclosures mount on subprime loans. While applications were up for both home purchases and refinancing, “borrowers are having a tougher time getting mortgages and lenders have tightened up underwriting criteria, particularly on credit scores and downpayments,” said Bob Moulton, president of Americana Mortgage Group. “The small upward blip in mortgage applications quite honestly is nothing to get excited about,” he said. “The whole overall trend is down. The number of sales is going to be down this year, the median home price is going to be down this year.” UBS said that mortgage applications were probably being boosted by the tighter lending standards, with applicants reapplying after they were rejected for loans. “One possibility, we think, is that marginal home buyers, that is, people who think they may not get a mortgage at all or at least a mortgage on acceptable terms, are making multiple applications in order to boost their chances,” added Ian Shepherdson, chief U.S. economist at High Frequency Economics. (www.usatoday)
Utah Leads Nation in Supersized HomesIn Utah, nearly 40% of homes in the U.S. Census Bureau’s American Community Survey in 2005 had at least four bedrooms, making it the top state in the country for big homes. According to the survey, 20% of occupied homes in the U.S. had four or more bedrooms, up from 17.7% in 2000. “Utah as a whole has always had a high number of people per household,” said Barry Burton, Davis County, Utah’s assistant director of community and economic development. According to the Census Bureau survey, Utah has an average of 3.07 people per household, the only state above the three-person mark. California trails Utah with an average of 2.92 people per household. “In this country, bigger is better,” said Gopal Ahluwalia, vice president of economic research at NAHB. “This is true for houses, and this is true for automobiles.” Among states with the biggest percentage of large homes, Utah was followed by Maryland, Virginia, Colorado and Minnesota. Arkansas had the smallest share, with 12.6% of its homes with four or more bedrooms. In much of the country, the growth in big houses is fueled by suburban home buyers seeking luxury, rather than big families needing space, Ahluwalia said. (www.desertnews.com)
For Sale: Condo With Chicken CoopCatering to Americans’ desire to live “green,” developers around the country are creating communities on or adjoining farms, pitching views of sorghum fields, grazing livestock and local food, such as eggs residents collect from the property’s henhouse, and some are in suburbs or in near cities. Bondoran Farm, a community under development in Albermarle County, Va., is offering 100 home sites on a working cattle farm and apple orchard at the foot of the Blue Ridge Mountains. South Village, a project in suburban South Burlington, Vt., was recently approved for 334 homes surrounding a 40-acre farm that will grow corn and other organic produce. Babcock Ranch, in southwestern Florida, is building nearly 20,000 homes surrounded by 73,000 acres that include a cattle ranch and a vegetable farm. The projects make financial sense for developers. Buying farmland and having farmers work it — a common set-up of such developers — is an inexpensive way to manage open space. Ed McMahon, senior resident fellow for sustainable development at the Urban Land Institute, points out that many residents of golf communities don’t even play the sport but will pay a premium for the protected views. Home and house-site prices in different communities vary greatly, from around $200,000 to more than $1 million. The projects are also appealing to farmers, ensuring protection of their operation and creating a ready-made market for their goods among local home owners. (www.realestatejournal.com)
Mesa Targets Multifamily Pools to Cut Child DrowningsTerri Gazda is one of about 13 code inspectors in Mesa, Ariz. who check pools, among other tasks, at apartments, condominiums and houses to make sure gates and latches meet city requirements and will keep children out. While the number of Valley children who fall into apartment or condominium complex swimming pools makes up only about 16% of the total incidents, the numbers still concern officials — especially since multifamily pools are easier to enforce than enclosed backyard pools. From 2001 to 2006, four out of eight apartment or condominium complex drownings of children up to four years old were caused by an inadequate pool fence or a failed gate or latch, according to Arizona Department of Health Services data. Although there were only eight drownings in Valley apartment and condo complex pools from 2000 to 2006, Tiffaney Issacson, water safety coordinator at Phoenix Children’s Hospital, wants residents to remember that an additional 48 children fell into pools and some of those likely suffered brain damage. About 82% of Valley pool incidents are linked to supervision-related problems. Code violations that inspectors look for include: pool fencing and gates that are not at least 54 inches tall, spaces below pool fences that are more than 2 inches high, bars on fences that are too far apart or broken off, garbage cans and furniture close to the fence that children can use to climb over and gates that do not self-close or self-latch. (www.eastvalleytribune.com)
Maryland Panel Blocks Project Near BayThe Maryland Board of Public Works rejected a wetlands permit for Four Seasons at Kent Island, a development of 1,350 homes just east of the Chesapeake Bay Bridge in Maryland and a project that Gov. Martin O’Malley said would be so damaging to the bay it would not be in the state’s best interest. The governor, who serves on the public works board, noted that developer K. Hovnanian had followed the rules and acquired every other necessary permit from local and state government. “They have jumped through every hoop,” he said. “But this is not a canine hurdle exercise. Given the lack of assurance that this will not do further damage to wetlands in critical areas…I’m voting no.” It was unclear whether Hovnanian would abandon the project, scale it back without building on the wetlands portion of the 562-acre property or seek to overturn the board’s decision with a legal challenge. Hovnanian had sought permission to build a pile-supported bridge, a small marina, a clubhouse and utility lines on less than an acre of wetlands. The permit was the final hurdle before construction and critical to the project. Officials at Hovnanian said that their community of condominium towers and single-family homes would generate tax revenue and jobs for Queen Anne’s County. And they said runoff from the project would add less pollution to the bay than runoff from the farm now on the property. (www.washingtonpost.com)
Letter to the Editor: Snow Shovels in MiamiDear Editor: Your article concerning voluntary green building programs vs. mandated ones (“Mandates Would Disrupt Green Market, NAHB Tells Congress”; May 21, 2007) was right on target. I am a green builder in Tampa, Fla. I am probably the premier green builder in our marketplace, and a mandatory LEEDS type program or requirement would likely end my 20-plus years as a builder. My homes are already 65% more efficient than the conventional home built in our marketplace, and I am competing with volume builders on a head-to-head basis. Requiring LEEDS-based performance that does not fit the Florida market is like requiring us to provide snow shovels to the folks in Miami Beach. At best estimate, it would raise the entry price of homes by more than $4,000 merely for the certification in a slow market already being hammered by high property taxes and impact fees. The homes I build are probably as efficient as LEEDS homes, but are being built to Florida Green Build voluntary standards at a fraction of the certification cost. Custom builders such as myself are having a hard time competing for the buyers who want green homes but feel they cannot afford them. That is a common misconception, but forces are at work to make home buying difficult and less affordable. Mandatory programs are merely pressuring home buyers to remain in their older homes longer and put off buying new homes. Enterprises like the Florida Green Building Coalition should be praised for their voluntary programs and the desire to make green building a mainstream venture. We still have a long way to go in educating both builders and the public, but our baby steps are paying off. Thanks again for NAHB's support for voluntary programs to make us all more environmentally aware and better home builders. Brian McElroy, MIRM
Letter to the Editor: Don't Reward Illegal ImmigrantsDear Editor: As a member of the Home Builders Association of Greater Savannah, Ga., I would like to express my opposition to the pending legislation discussed in “Builders Call for Major Overhaul of Immigration Bill,” May 21, 2007. However, my reasons for opposing the legislation differ from those mentioned by NAHB in the article. I oppose any and all attempts to reward people who have illegally entered this country by giving them citizenship, irrespective of whether they must jump through some government-imposed hoops to qualify. I strongly support measures to substantially secure the borders before there is any type of new program for guest workers. I do not support a major effort on the part of our government to round up and deport thousands of illegal aliens currently working in the U.S. (although our government is not efficient enough to do this even if it wanted to). I do support legal sanctions against employers who do not properly verify the legal status of their workers, but I do agree with you that contractors should not be responsible for verifying the legal status of their subcontractors’ employees. The proposed legislation is fatally flawed and needs to be re-written with substantial input from the American people, which this closed-door legislation certainly did not have. This country’s culture in 25 years is resting on the outcome of this battle to gain control of illegal immigration. For the past 30 years, the waves of illegal immigrants have been massive, preventing their assimilation and resulting in the partial "Balkanization" of this country. The future political, financial, and social framework of this country are also now at grave risk while we await a solution to this illegal immigration problem. Eric E. Hogan
House Approves Sound GSE Regulatory Reform BillThe U.S. House of Representatives on May 22 passed NAHB-supported legislation that would establish a strong regulatory framework for the housing government-sponsored enterprises (GSEs) — Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Because of the importance of this issue to the housing community, NAHB designated passage of H.R. 1427, the Federal Housing Finance Reform Act, as a “key vote” and sent a letter to every representative urging them to support the bill. The measure was approved by a solid bipartisan margin of 313 to 104. “The comprehensive GSE reform bill offers a sound regulatory solution for our secondary market institutions that would safeguard and strengthen their financial health while simultaneously supporting their ability to fulfill their housing-mission activities,” said Jerry Howard, executive vice president and CEO of NAHB. In another key vote for NAHB, lawmakers by a margin of 383 to 36 overwhelmingly approved a pro-housing amendment offered by Reps. Randy Neugebauer (R-Texas), Melissa Bean (D-Ill.), Dennis Moore (D-Kan.) and Gary Miller (R-Calif.) clarifying that the new regulatory entity created by the legislation must base its evaluation of the risk of Fannie Mae’s and Freddie Mac’s portfolio holdings solely on the mission of those institutions and safety and soundness considerations, and not on broader concerns, such as systemic risk. This amendment would prevent the new regulator from making an overly broad interpretation of risk that might unnecessarily constrain portfolio activities of Fannie Mae and Freddie Mac, disrupting the mortgage markets and impeding the enterprises in their pursuit of their housing mission. In other votes designated by NAHB as “key,” three anti-housing amendments that would have restricted GSE portfolios, eliminated the affordable housing fund and prevented conforming loan limits from being raised in high-cost areas were defeated handily or withdrawn. In the Senate, any GSE reform bill must first advance through the Senate Banking Committee, chaired by Sen. Chris Dodd (D-Conn.). While Dodd has yet to hold hearings on the topic or release draft legislation, he issued the following statement after last week’s House vote: “I commend Barney Frank and the House for their efforts. Homeownership is the cornerstone of the American dream and we need to do everything possible to make that dream a reality. Clearly, GSEs can play an important role in advancing that goal. I believe our nation needs a stronger regulatory structure and a deeper commitment to meeting the housing needs of the American people. I am committed to continuing to find common ground to address this important issue in a bipartisan, timely and thoughtful way.” To read the legislation, click here and enter H.R. 1427 in the box at the center of the page. For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
Plan to Attend the 2007 NAHB Legislative Conference on June 6 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 day-long conference is on Wednesday, June 6 and coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
Immigration Bill Provokes Flurry of AmendmentsThe Senate last week debated a flurry of amendments to an immigration bill that NAHB believes is deeply flawed and in need of major changes. Of note to home builders were two amendments dealing with the number of eligible workers allowed under the future immigration program proposed by the bill and the length of time they would be allowed to remain in the country. NAHB opposed an amendment offered by Sen. Jeff Bingaman (D-N.M.) that would slash the number of workers eligible to participate in the program from 400,000 to 200,000 annually. The proposal passed by a vote of 74-24. Because of its importance to the housing community, NAHB designated a second amendment by Sen. Byron Dorgan (D-N.D.) as a “key vote.” The Dorgan amendment would eliminate the future flow immigrant program in its entirety at the end of five years, leaving no legal program in place for needed workers to the enter the United States. In response, NAHB said that “a workable future flow immigrant program is essential to comprehensive immigration reform because without it, it is likely to lead to a situation that will encourage more illegal immigration in the future.” The Dorgan amendment was narrowly defeated by a 48 to 49 vote. While NAHB supports legislation that would achieve comprehensive immigration reform, the association remains opposed to the Senate bill in its current form because it would hurt America’s small businesses. The housing community’s objections to the legislation were laid out in a letter to the editor sent by Jerry Howard, NAHB executive vice president and CEO, to the Wall Street Journal. “Specifically, the nation’s home builders view the bill as counterproductive because it contains onerous provisions regarding employer liability and responsibility for subcontractors; the law could be used to unfairly prosecute an employer who unknowingly hires an illegal alien; general contractors could be held responsible for the legal status of employees hired by subcontractors; the program to provide a future flow of immigrant workers for the construction industry is unworkable; the new, mandated electronic verification system is untested; and the new record-keeping requirements are unduly burdensome, especially for small businesses,” Howard’s letter said. “These are just a few of the reasons why we believe this bill can’t be fixed without making major revisions,” he said. The Senate is in recess this week for the Memorial Day holiday and is scheduled to continue debate on the legislation during the week of June 4, when lawmakers are expected to focus on areas of key concern to NAHB, including issues dealing with employment verification provisions, whether contractors will be responsible for the legal status of their subcontractors’ employees and inadequate safe harbor protections. To read the legislation, click here and enter S. 1348 in the box at the center of the page. For more information, e-mail Jenna Hamilton at NAHB or call her at 800-368-5242 x8470.
BuilderLink Connects Builders With Members of Congress BuilderLink, an updated national grassroots program that will provide opportunities for NAHB members to connect more frequently with their members of Congress, is set to be launched on Wednesday, June 6 at the 2007 Legislative Conference in Washington, D.C. By developing local grassroots activities that bring NAHB members and their members of Congress together throughout the year, BuilderLink will build on the momentum generated by the annual NAHB conference, which is expected to draw more than 1,000 builders to Capitol Hill to share their concerns on housing-related issues with their representatives and senators. BuilderLink will pinpoint members of Congress who have the most influence over priority housing issues and link them to the NAHB members living in the areas they represent. As constituents, NAHB members are in a unique position to directly communicate with their federal lawmakers on the impact of their decisions on housing. Whether conducting a local visit, writing a letter or making a phone call to a member of Congress, BuilderLink will provide the resources NAHB members need to advocate a pro-housing message. For more information on BuilderLink, click here, or e-mail Molly Murray at NAHB, or call her at 800-368-5242 x8470. Tax Credit Reforms Needed to Spur Affordable Rental HousingNAHB last week called on Congress to enact several reforms to the Low Income Housing Tax Credit (LIHTC) program to enable more builders to invest in affordable rental housing. Testifying on May 24 on behalf of NAHB before the House Ways and Means Subcommittee on Select Revenue Measures, Steve Lawson, a home builder from Virginia Beach, Va., said that the LIHTC has facilitated the construction or preservation of nearly 1.4 million homes in the past 20 years, making it the foremost tool for the production and rehabilitation of affordable housing. “However, the need for affordable housing greatly outpaces even this significant level of production and the existing supply of units,” Lawson told lawmakers. The tax credit provides a critical incentive for the production of affordable rental apartments by supplying a dollar-for-dollar reduction in tax liability to investors in exchange for equity financing. In the last few years, more state housing finance agencies have been setting aside a portion of their LIHTC allocation for preserving existing affordable housing. The current restrictions on acquisition of the tax credits prevent LIHTC owners from rehabilitating dilapidated housing units. They also reduce the tax credit developers’ ability to receive an allocation of LIHTCs in areas of the country where the cost of land is prohibitive for providing affordable housing. Two key priorities to improve the efficiency and effectiveness of the LIHTC revolve around the issues of determining annual rents and utility allowances for rental properties. The financial viability of existing and new LIHTC properties are in jeopardy, Lawson said, because of recent changes in the data used to establish their rents. In order to create more consistency for owners and tenants, he called on lawmakers to index LIHTC rents to a reasonable inflation factor, such as the Consumer Price Index. “In some areas, tax credit properties have seen little or no rent increase for the past five years while carrying costs continue to escalate,” said Lawson. “Left unchecked, this could ultimately lead to a loan default, at which point foreclosure occurs and the tenants lose their housing. Ultimately, a reasonable annual increase in rent for residents has to be considered against the outright loss of affordable housing units in the immediate term and decreased production of new affordable housing in the long-term.” Noting that utility costs have increased significantly in the past few years, Lawson urged lawmakers to allow state Housing Finance Agencies to convert utility allowances into a percentage of maximum gross rent at the time of underwriting. “This solution would allow an owner to better gauge their cash flow over the life of their project, which would improve their ability to cover unanticipated spikes in operating costs and attract private equity into the project,” he said. To further stimulate private investment in the LIHTC program and spur increased construction of housing targeted to low- and moderate-income families, Lawson urged Congress to adopt legislation that would:
Plan to Attend the 2007 NAHB Legislative Conference on June 6 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 day-long conference is on Wednesday, June 6 and coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
New Law Suspends HUD Investor Approval ProcessThe Senate last week approved H.R. 1675, the Preservation Approval Process Improvement Act of 2007. The measure, which passed the House last month and is expected to be signed into law shortly by the President, is designed to make it easier to invest in affordable housing by easing overly burdensome filing requirements to participate in U.S. Department of Housing and Urban Development programs. To ensure that they are reputable and will honor their legal, financial and contractual obligations, participants in HUD programs, including FHA mortgage insurance, are required to submit information through an electronic reporting system on their previous business with the department. H.R. 1675 will suspend this mandatory process until HUD makes changes to a draft of the regulations it has proposed for the filing requirements. HUD’s proposal contains onerous filing requirements for passive investor participants and establishes additional conditions under which participants can be prevented from taking part in its programs. To read the bill, click here and enter H.R. 1675 in the box at the center of the page. For more information, e-mail Claudia Kedda or Scott Meyer at NAHB, or call them at 800-368-5242 x8352 and x8144.
BuilderLink Connects Builders With Members of Congress BuilderLink, an updated national grassroots program that will provide opportunities for NAHB members to connect more frequently with their members of Congress, is set to be launched on Wednesday, June 6 at the 2007 Legislative Conference in Washington, D.C. By developing local grassroots activities that bring NAHB members and their members of Congress together throughout the year, BuilderLink will build on the momentum generated by the annual NAHB conference, which is expected to draw more than 1,000 builders to Capitol Hill to share their concerns on housing-related issues with their representatives and senators. BuilderLink will pinpoint members of Congress who have the most influence over priority housing issues and link them to the NAHB members living in the areas they represent. As constituents, NAHB members are in a unique position to directly communicate with their federal lawmakers on the impact of their decisions on housing. Whether conducting a local visit, writing a letter or making a phone call to a member of Congress, BuilderLink will provide the resources NAHB members need to advocate a pro-housing message. For more information on BuilderLink, click here, or e-mail Molly Murray at NAHB, or call her at 800-368-5242 x8470. Tax Breaks, New Minimum Wage, Katrina Relief in War BillAn increase in the minimum wage and business tax provisions are included in a bill passed by Congress last week to fund the military and the war in Iraq. A previous version of the legislation was vetoed by the President because of language setting deadlines for the U.S. withdrawal from Iraq. That language was taken out of this version and is now on its way to the President for his expected signature. The bill will increase the minimum wage from $5.15 to $7.25 an hour over the next two years and contains $4.8 billion in corresponding business tax breaks. Of special importance to home builders, the measure will increase the amount of investment that small businesses may be immediately and fully deducted under Section 179 expensing from $100,000 to $125,000 and lift the investment-based phase-out threshold from $400,000 to $500,000. The legislation also includes key provisions for the repair and reconstruction of affordable housing in the GO Zone, Gulf Coast areas that were hit particularly hard by Hurricanes Katrina, Rita and Wilma. Specifically, the legislation:
Plan to Attend the 2007 NAHB Legislative Conference on June 6 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 day-long conference is on Wednesday, June 6 and coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
New Home Sales Up an Unexpected 16.2% in AprilSales of new single-family homes increased a surprising 16.2% in April to a seasonally adjusted annual rate of 981,000 units, according to figures released by the U.S. Commerce Department on May 24, leaving the month’s sales pace 10.6% below the rate of a year earlier. The increase followed a downward revision to the previous month’s sales rate, and April was the fourth consecutive month in which sales were below an annual pace of 1 million units. "Builders are pulling out all the stops to work down heavy inventories in the face of weak demand that's been exacerbated by the subprime-related tightening of mortgage credit conditions," said NAHB President Brian Catalde. "Our surveys show that the majority of builders are cutting prices and offering substantial non-price sales incentives, and their efforts are bearing fruit." "We are also seeing buyers gravitate toward lower-priced homes to counter their affordability problems," Catalde said. "We're viewing the large jump in new-home sales for April with a lot of caution, in view of the large month-to-month volatility historically displayed by these statistics," said NAHB Chief Economist David Seiders. "In addition, the April bulge may very well have reflected favorable weather swings, particularly in the South." "The first quarter may well have marked the low point for sales volume in the dramatic housing correction that began in the latter part of 2005. We are currently looking for a gradual recovery process going forward, at least on a quarterly basis," Seiders said. The inventory of new homes for sale edged down in April to 538,000 units, equivalent to a 6.5 months' supply at the April sales pace and down from 8.1 months in March. Completed homes for sale comprised 33% of the inventory, units still under construction represented 51% of the inventory and units for-sale that were permitted but not yet started were almost 16%. Completed homes were on the market for a median of six months in April. Regionally, April’s new-home sales were up 27.8% in the South, 3.8% in the Northeast and 8.5% in the West. Sales were down by 4% in the Midwest.
Discussions From Construction Forecast Conference Now Available on the Internet The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months. Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the Webcast, visit www.nahb.org/cfcwebcast.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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. New Jersey Tops in Property Taxes, Louisiana Among LowestProperty taxes accounted for about 22% of state and local government revenue in 2005, according to a special study by NAHB economists of residential real estate tax rates in the U.S. “The analysis of real estate taxes across states is an important source of information for estimating the economic impact of housing, comparing the affordability of housing and cost of living in general, and making decisions about relocating or retiring in a different state,” says Natalia Siniavskaia, the author of the NAHB HousingEconomics.com report. Siniavskaia notes that it is often difficult to compare effective tax rates on residential real estate based on state and local government data because local jurisdictions follow different assessment, administration and reporting procedures and 37 states also collect property taxes on the state level. However, expansion of information collected by the U.S. Census Bureau at the request of NAHB has provided more data for counties and metropolitan areas. State and local governments in New Jersey and New Hampshire rely on property taxes for their revenue more than governments in any other state, the study finds. New Hampshire, a state that does not tax wages and salaries, derives almost 43% of statewide government revenue from property taxes. New Jersey derives 35%. All six New England states are among the 10 states most dependent on property taxes as a source of government revenue, according to the report. On the other hand, Delaware, New Mexico and southern states such as Alabama, Arkansas and Louisiana derive no more than 9% to 11% of statewide revenue from property taxes. The study finds a strong correlation between the extent to which state and local governments rely on property taxes to fund local services and the amount of real estate taxes they collect per home. While state median property taxes per home reflect home values to a certain extent, the correlation is not as strong. Among other findings of the study:
Discussions From Construction Forecast Conference Now Available on the Internet The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months. Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the Webcast, visit www.nahb.org/cfcwebcast. Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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.
Eye on the Economy: 2007 Housing Outlook WeakensThe Federal Reserve released its quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices, covering the February-to-April time frame, on May 14. For the first time, the Fed asked banks about changing credit standards for three types of first-lien home mortgages — prime, subprime and “nontraditional” (IO&PO ARMs and Alt-A products). The survey results showed substantial net tightening of credit standards on all three types over the prior three months — 56% of respondents in the subprime area; 45% for nontraditional mortgages; and 15% in the prime mortgage market Although the Fed’s commentary downplayed the importance of the relatively modest tightening in the prime area, 15% is hardly a minor shift and it follows a sizeable tightening of overall mortgage lending standards in the previous survey. NAHB surveyed builders of all sizes in early May, following up on our surveys of mortgage lending impacts in March and April, and we now have a solid response rate to the May survey. We find that 44% of all builders reported adverse effects on their home sales during the previous month, and nearly 78% of large companies (starting more than 100 units per year) said their sales had been reduced because of tighter mortgage lending standards. Among companies reporting adverse impacts, the median reduction was 15%. We also found adverse impacts on sales cancellations, heavily concentrated among big builders:
Fed Chairman Ben Bernanke Addresses the Subprime Mortgage Problem On May 17, Fed Chairman Ben Bernanke delivered an address on “The Subprime Mortgage Market” at the Federal Reserve Bank of Chicago. Bernanke reviewed factors behind the development of the subprime market, recent problems in this market, possible regulatory responses and the macroeconomic implications for the housing sector and the overall economy. Bernanke’s assessments of the macroeconomic implications appears to be quite similar to NAHB’s assessments — i.e., while the tightening of mortgage lending standards in the wake of the subprime debacle has created another down leg for effective housing demand, extending the drag on GDP from the contraction in Residential Fixed Investment for a few more quarters, housing will not fall out of bed and the economy will not experience a housing-induced recession. With respect to subprime loans already out there, Bernanke stressed that the evolving upswing in mortgage delinquencies, defaults and foreclosures is occurring primarily in the adjustable-rate component of the subprime market (less than 10% of all first mortgages outstanding). He also discussed efforts of private sector participants and regulatory agencies to help work out or modify distressed subprime ARMs. The workouts/modifications will limit the number of loans that go all the way through the foreclosure process and the number of homes that actually are repossessed and resold on the markets. NAHB’s forecast assumes significant additions to the inventory overhang from a rising tide of subprime loan problems, but we don’t view these additions as an overwhelming negative factor in the housing outlook. The Supply-Demand Balance Still Is Deteriorating The supply-demand balance in the housing sector has been deteriorating badly. With respect to supply, the housing markets already are heavily burdened with record numbers of vacant units for sale and for rent, the flow of completions of new units onto the markets still is quite sizeable, the pipeline of units still under construction still is elevated, and a rising tide of mortgage foreclosures is sure to add some additional supply over the course of this year and in 2008. With respect to demand, the subprime-related tightening of mortgage lending standards clearly is cutting into effective home buyer demand. Our proprietary survey of 30 large builders shows serious erosion of net sales in both March and April, and our broad-based Housing Market Index shows further erosion of builder confidence in May following slippage in March and April. It’s also inevitable that the confidence of prospective home buyers has been shaken by the avalanche of media attention to the subprime debacle as well as by accumulating evidence of downward pressures on home prices in many parts of the country. The 2007 Housing Outlook Is a Bit Weaker Recent revelations on the evolving supply-demand situation have prompted another downward revision to NAHB’s housing outlook for the balance of this year. Our current forecast for this year has the following major features:
The current and projected housing downswing now looks a lot like earlier setbacks that were part-and-parcel of official economic recessions. In those earlier periods, housing downswings generally were provoked by upswings in interest rates and were then countered by aggressive easing of monetary policy and major declines in the interest rate structure. But this housing cycle is fundamentally different, and we can’t count on interest rate declines to turn things around this time. The good news is that we’re not in an economic recession this time, and outright recession is not likely during the balance of this year or in 2008. Thus, we can look to some basic economic fundamentals to put a floor under housing demand by later this year — paving the way for our projected upswing in housing production in 2008 and beyond. These fundamentals include solid growth in employment and household income, combined with a low and reasonably stable interest rate structure. Indeed, Bernanke recently cited the “fundamental factors in place that should support the demand for housing” while arguing that the subprime mortgage problem will not take down housing and the economy. 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 May 23 edition. To subscribe to “Eye on the Economy,” click here. Discussions From Construction Forecast Conference Now Available on the Internet The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months. Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the Webcast, visit www.nahb.org/cfcwebcast. Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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.
Discussions From Construction Forecast Conference Now Available on the Internet The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months. Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the Webcast, visit www.nahb.org/cfcwebcast. Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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: A Temporary Extension for Table-Saw Tops
The trouble is, the saw’s top isn’t wide enough to accommodate the sheet goods. As shown in the accompanying drawing, I made a temporary saw table that extends the work surface substantially on the right side of the blade.
— Robert Conrad, Pellston, Mich. 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. A Coastal-Inspired Upscale Getaway Near Washington, D.C.
The latest in a series on the secrets of The Nationals model home merchandising winners. By Jan Mitchell The Gold model home winners in the 2006 Nationals Awards have secrets to share about the different aspects of model home merchandising. Whether it’s the use of materials or colors, the scale of the project or just breaking the rules, all of them reveal hot trends that are emerging today.
Vacation-home seekers from the Washington, D.C. metropolitan area in search of an easy-to-reach seaside escape are finding their way to The Peninsula on the Indian River Bay, a waterfront resort community two hours away in Millsboro, Del. The Peninsula features coastal-style homes, a beach, fishing pier, nature center, outdoor pool, walking trails, shopping area and a Jack Nicklaus Signature Golf course. However, if the community amenities weren’t enough to entice prospects, however, a tour through the model complex — including the Gold-award winning South Beach model by Miller and Smith — just might cinch it. Based in McLean, Va., Miller and Smith offers villas and townhouses that feature Craftsman-style architecture with a coastal flair. Holly Polgreen, president of Carlyn & Co., Interiors + Design, said the merchandising objective was to show potential escapees how they would live in their second home. “Our mission was to create a coastal-inspired interior that gave prospective buyers the distinct impression that living here was dramatically different than living in their primary residence,” Polgreen said. For the South Beach model, she contrasted cool walls with dark merlot floors combined with stainless steel accents and spicy tropical colors for “a sophisticated, yet playful effect.” In the master retreat, the merchandisers showed a white-on-white palette to suggest a cool oasis from the outside world. Polgreen continued that theme to the outdoor patio and dining area, where citrus-colored Philippe Starck chairs added novelty — and a touch of the unexpected.
Jan Mitchell is the senior editor of NAHB’s Sales + Marketing Ideas magazine. She also writes about model merchandising, interior design, architecture and consumer trends for other industry and consumer publications, including Professional Builder magazine and its online counterpart, Housingzone.com. Her bestselling book, “Sales and Marketing Checklists for Profit-Driven Builders,” is available through BuilderBooks.com. She has served as a judge for regional and national builder marketing competitions and is a member of the National Association of Real Estate Editors. For more information, e-mail Mitchell at mitchell.jan@comcast.net. Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com). Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing. Retiring Boomers to Hasten Search for New Tax RevenueThe retirement of members of the baby boom generation starting in the next five years will exert significant pressures on all levels of government and the services they provide, their spending priorities and their tax systems, according to a new study by Deloitte Research released on May 14. According to the “Serving the Aging Citizen” study, before 1995, elderly residents exceeded 15% of the population in only five states. But by 2025, the elderly share will exceed 15% in every state but Alaska and California, and “as the number of elderly increases, and the percentage of individuals assuming the tax burden decreases, policymakers will need to determine how to allocate scarce resources across competing demands from various age groups,” the report says. “As the population and work force ages, state and local governments will have to examine how the growing number of elderly will impact the design and mix of services they offer, the funding sources they rely upon and the delivery channels they use to make the services available to their citizens,” said Jessica Blume, national managing director, public sector and a principal of Deloitte Consulting LLP. The increase in the number of elderly citizens will drive changes in the composition of government services. Demand for many services that cater to the elderly will rise, while with fewer school-age children, demand for education and youth and child welfare services in some states will fall. The study finds that the shifting demographics will also force governments to rethink how they finance their services. “The issue is that as the number of elderly increases, there will be a smaller percentage of workers to cover the bulk of the tax burden,” Deloitte says. “Given that income and payroll taxes can only be raised so much, state and local governments will have to find other ways of generating the revenue they need to fund public services.” Researchers at Deloitte expect the search for revenue to increase the prominence of four trends:
“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. Register Onsite for the 50+ Housing Symposium in DenverOnsite registration is available for Building for Boomers & Beyond: 50+ Housing Symposium, the premier education and networking event for housing professionals who serve the 50+ market, held at the Hyatt Regency Denver at the Colorado Convention Center from Wednesday, May 30, to Friday, June 1. The symposium, hosted by the NAHB 50+ Housing Council, features: Education The symposium offers more than 35 breakout sessions on a variety of topics. In addition, housing professionals can take post-conference courses to get credit toward the new Certified Active Adult Specialist in Housing (CAASH) designation.
New to the symposium this year is the Best of 50+ Housing Awards gala, held on Thursday, May 31, honoring the winners of the prestigious design and marketing awards program that showcases the latest trends and most innovative design. Purchase tickets at the symposium. Speaker Highlights:
To Register Onsite registration will be available in the Centennial Foyer of the Hyatt Regency during the following times:
“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. June 1 Deadline for NAHB/AARP Livable Communities AwardsThe June 1 deadline is fast approaching for NAHB and AARP’s new Livable Communities Awards recognizing builders, remodelers and developers for creative and unique homes and community projects that improve the daily comfort, ease and safety of their residents and highlight the critical elements needed for a livable community. AARP CEO Bill Novelli announced the award during an address to the NAHB Board of Directors during February’s International Builders’ Show in Orlando, Fla. “Whether you’re a toddler, a teen with a backpack, a dad cooking dinner or a great grandparent using a walker, insightful home and community design can greatly improve your day,” said Novelli. “We hope this award will give building professionals an incentive to explore and employ new design approaches.” The award will be presented annually to the three professional groups for projects that incorporate such aspects as:
NAHB and AARP seek applicants that reflect the full diversity of the home building industry: single-family and multifamily builders and remodelers, developers of large and small communities, for-profit and nonprofit, family-run and corporate entities. Winning projects must have been completed and opened or eligible for occupancy between Jan. 1, 2005 and June 1, 2007. A panel of expert judges appointed by NAHB and AARP will review the applications and select the finalists. Judging criteria vary from category to category, but points will be awarded based on: universal design features; ease of maintenance and energy efficiency; exterior design and landscaping/site design; incorporation of livable community design features; and stakeholder involvement. Winners will be reviewed to determine that they are good corporate citizens and in full compliance with all applicable laws and regulations at the federal, state and local level. Winners will be announced in the 2008 January-February issue of AARP The Magazine, the largest circulation magazine in America. For More Information For more information, click here; or e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583. AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole.
“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. Builders Upbeat as Rental Demand Outpaces SupplyStrengthening demand and steady increases in occupancy levels in rental apartments with five or more units buoyed the confidence of multifamily builders during this year’s first quarter, and they are expecting the next six months to be even better, according to the latest Multifamily Rental Market Index (MRMI), released by NAHB on May 21. "We've seen the national vacancy rate for rental apartment communities drop more than two percentage points between the first quarter of 2006 and the first quarter of 2007," said NAHB Chief Economist David Seiders. "Despite some competition from unsold condo units that have come onto the market as rentals in recent months, demand is still outpacing supply for rental apartments." The component of the MRMI that tracks demand held just about steady during the first quarter for all classes of apartments from the same period a year earlier. The index for Class A luxury apartments stood at 60.7 in the first quarter, down slightly from 61.6 a year earlier. Moderate apartments (Class B) dropped from 71.4 to 67.3 over the same period, and lower-priced apartments (Class C) gained a point, with the index inching up from 67.0 to 68.0. The index scale runs from 0 to 100, with any number over 50 indicating that more multifamily builders view conditions as good than poor. The quarterly survey also asks multifamily builders to rate the volume of traffic and calls from prospective renters to assess their expectations for the market over the next six months. In the first quarter of 2007, builders' expectations jumped for all classes of apartments, with the index for luxury apartments rising the most significantly — by 12 points to 73.2. Expectations for Class B and Class C apartments rose to 71.2 and 68.0, respectively, in the first quarter, up from 70.0 and 63.0 during the first quarter of 2006. Meanwhile, the indexes tracking supply declined slightly in this year’s first quarter from a year earlier, with market-rate rentals dropping from 54.6 to 53.5 and affordable (federally subsidized) apartments down from 53.5 to 54.6. The upward bump in demand at a time of relatively constrained supply is also driving up rents. Asking rents registered 78.0 on the first-quarter index. For information on resources from NAHB Multifamily, e-mail Ann Marie Moriarty, or call her at 800-368-5242 x8350. Financial Viability of Affordable Housing ThreatenedSignificantly rising operating costs are jeopardizing the financial viability of hundreds of affordable apartment communities across the country that were built using Low Income Housing Tax Credits (LIHTC), according to a new NAHB study. Adding to the threat is a recent change in the data used by the Department of Housing and Urban Development to calculate income limits. This change has artificially frozen both the maximum income limit requirements of eligible residents and the rents that can be charged in a large number of areas across the county. In these areas, it's impossible to offset rising costs though increases in rents that would normally occur as the result of ordinary inflation. "It is definitely a Catch-22," said Steve Lawson, an affordable housing developer from Newport News, Va., and chairman of NAHB Multifamily's Housing Credit Group, which represents private owners and developers of tax credit properties. "The very income restrictions meant to ensure that these properties are available to serve people in need of affordable housing are actually threatening the long-term sustainability of many of these projects." Changes in the data used by HUD to calculate income limits, which in turn determine rent ceilings, have frozen LIHTC rents in some areas of the country for the past five years, according to Paul Emrath, the leader of the study and NAHB’s assistant staff vice president for housing policy research. NAHB found nearly 200 counties across the country where flat income limits had completely frozen rents at tax credit properties since 2001. Over that time period, utility costs nationwide have risen by an average of almost 27%. Moreover, problems created by the large data-related changes in 2007 will keep LIHTC rents frozen in many areas for years to come. To measure the severity of the problem, NAHB calculated a "critical gap" to see how far HUD's median family income estimate in an area must increase before the income-rent limits also start to increase. NAHB found that 1,748 counties had a critical gap of at least $1,000. Under HUD's current system of calculating income limits, the majority of those counties will see little or no increases in allowable gross rents for LIHTC properties in 2008. In more than 700 other counties, the situation is even worse — the critical gap is at least $2,000; in 175 other counties, it is at least $4,000, and in 48 counties, the critical gap is $6,000. In the most extreme cases, some counties are looking at flat income limits — and therefore flat tax credit rents — for the next decade, Emrath said. "Because some LIHTC projects lack the resources to deal with the problem of flat rents for an extended period, these projects could be lost from the stock of low-income housing," Emrath said. "Additionally, the prospect of flat rents in the future will hinder the program going forward, preventing some of the most-needed projects from being built." "The situation is so dire that seeking a legislative or regulatory solution to the income limits problem has become a top priority for NAHB's Housing Credit Group," said Lawson. "We must find a way to keep these projects viable so that they can continue to provide much-needed affordable housing to America's lower-income families." The Low Income Housing Tax Credit program is the primary vehicle for financing construction of affordable rental apartments and is credited with creating more than 1 million affordable housing units since it was enacted by Congress in 1986. For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350. Register for Custom Builder Symposium in Naples, Fla.
Register for the 2007 Custom Builder Symposium, NAHB's premier educational and networking event for custom builders. The symposium will be held Oct. 26 to 28 at the Naples Grande Resort & Club in Naples, Fla. Discover Hidden Treasures This year's program, "Discover Hidden Treasures," is filled with hidden treasures and opportunities that will enable participants to improve their businesses. Tours, Golf, Education and More The symposium will include:
Online registration is now open. For more information and to register, go to www.nahb.org/custom. Education Calendar
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