Nation's Building News Online: July 9, 2007Print All Articles Text Version |
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States Taking Immigration Reform Into Their Own HandsFailure of the U.S. Congress to overhaul the nation's immigration laws is expected to accelerate efforts by state and local governments to take matters into their own hands by considering a record number of proposals targeting illegal immigrants. U.S. Senators voted 46 to 53 against a procedural motion on June 28 to move toward a final vote on the bill (S. 1639), effectively killing federal action on immigration until after the 2008 elections. As of May, at least 1,100 immigration bills had been submitted by lawmakers around the country, more than double last year's record total, according to the National Conference of State Legislatures (NCSL). Many have fallen by the wayside but others have made their way into law, underscoring the public's growing frustration over federal inaction. NAHB has partnered with the National Chamber Litigation Center to address the constitutionality of these state laws. Now taking effect, Georgia’s new immigration law (SB 529) is considered the most stringent statute of its kind anywhere in the country. Under its provisions, state and local government agencies are required to verify the legal residency of benefit recipients, and many employers will have to do the same whenever they make a hiring decision. And the state’s law enforcement officers have been given the authority to crack down on human trafficking and fake documents. In short, Georgia’s law touches every facet of state policy relating to illegal immigrants. Oklahoma and Colorado have both enacted laws with some similar provisions, and the question now is how many states will follow. In the meantime, the U.S. Chamber of Commerce is litigating Georgia's law as well as laws in Colorado and Louisiana, claiming that they are unconstitutional, and all of the laws passed in the states will have to endure tests within the courts. Examples of other state efforts:
Farmers Branch, a Dallas suburb, drew national attention by enacting an ordinance that bans landlords from renting to illegal immigrants; the ban is being challenged in court. The town council of another Texas community — Oak Point, northwest of Dallas — narrowly approved a resolution declaring English the official language. The most famous example is Hazelton, Pa., which passed a law last year penalizing businesses for hiring illegal immigrants and landlords that rent to them. The Pennsylvania town is now facing a court battle with the American Civil Liberties Union. Farmers Branch, a Dallas suburb, also drew national attention by enacting similar legislation, which is currently being challenged in court. This week, the elected supervisors for Virginia's Prince William County are expected to approve a law requiring police to check the residency status of people they stop at schools and county agencies, even libraries. Other states and municipalities have displayed a more welcoming attitude. In the Cuban-American stronghold of South Florida, two cities and Miami-Dade County have embraced resolutions calling on the federal government to stop deporting undocumented immigrants. Thirty-two cities and counties in 16 states — including San Francisco; Austin, Texas; Houston and Seattle — have adopted "sanctuary policies" protecting undocumented immigrants, according to the Congressional Research Service, a division of the Library of Congress. Until recently, many state and local policy makers took the position that the immigration dilemma could be resolved only at the federal level. Few are making that argument anymore. For more information, e-mail Carlos Gutierrez at NAHB, or call him at 800-368-5242 x9094. Tucson Builders Seek Relief From Sweltering Impact FeesWith impact fees and other government-imposed fees pushing the cost of housing in the Tucson-Pima County area beyond the means of many families, the Southern Arizona Home Builders Association (SAHBA) is looking to work with local governments to find alternative ways to finance much-needed infrastructure. The association has approached NAHB to bring its “Infrastructure Solutions Program” to the region in 2008. This alternative financing program helps governments partner with builders to create innovative growth strategies that identify other funding sources. The unwillingness of regional governments to raise taxes has resulted in aging infrastructure, traffic congestion, overcrowded schools, inadequate water and sewer capacity, and other urban problems. The NAHB program introduces best practices from progressive governments demonstrating how municipalities can leverage their limited resources more effectively. “The quality of roads, schools and other public infrastructure has a big impact on a community’s quality of life,” said Debra Bassert, NAHB’s assistant staff vice president for land development. “When local governments don’t plan for and invest in infrastructure, the citizens end up having to endure the resulting headaches.” NAHB has developed a series of three publications that explain a variety of successful infrastructure financing and management options that have been used by state and local governments around the country. “We’ve spent the last five years identifying alternative infrastructure finance mechanisms that enable communities to develop the public facilities they need to meet the needs of their citizens,” Bassert said. “The needs and expectations are different from one city to the next, and the laws are different in every state. We will be working with SAHBA to identify the financing options available in Arizona that are most likely to be effective in the greater Tucson area.” In Pima County, government-imposed residential building fees, taxes and surcharges now average $26,521 for a typical $258,407 median-priced, 1,941 square-foot, newly built home, based on a SAHBA study recently updated with January 2007 data. The average governmental surcharge per new home was $16,166 in 2005 and $25,758 in 2006. Impact Fees an Unreliable Source of Income “We’re now in an adjustment period where the construction of new homes has slowed dramatically. As building-related revenues have fallen, government officials finally realize that impact fees are an unreliable, undependable source of income,” said SAHBA President Ed Taczanowsky. “Over the past 10 years, municipalities have become addicted to impact fees on new homes. That is a funding source that governments need to re-evaluate.” Rising regulatory fees and building restrictions are pushing more home builders out of metro Tucson-Pima County into outlying areas, accelerating sprawl at the same time as they squeeze housing affordability in the urban core. In Oro Valley, for example, recent actions by the town council have dampened the interest of most builders in doing further business there. In September, Alternative Water Resource fees are set to increase from $300 to $1,300 for the typical residential water meter. In five years, the fee rockets to $5,182 per new home. Also in September, the Potable Water impact fee jumps $700 from $1,867 to $2,567 per new home. “Because of the onset of these new water fees, their existing high impact fees and the overall difficulty of doing business in Oro Valley, I won’t even look for land there for future developments,” said John Shorbe, president of Canoa Homes. “For the benefit of my home-buying customers, it is more economical for them to buy a home in the outlying areas instead of in Oro Valley,” he said. New home construction in Oro Valley has dropped 28% in the last few years — from 482 units in 2004 to 349 units in 2006. Tucson Turning Its Back on Infill Likewise within the City of Tucson, the prevalence of neighborhood-driven ordinances and other land use restrictions, coupled with high impact fees, also is pushing builders outside the urban core. “I used to do a lot of infill work within the city limits, buying smaller parcels and doing projects as small as 25 lots in a subdivision,” said Shorbe. “But now, many of the city’s new land use ordinances and building restrictions are being pushed by neighborhood groups that don’t want to see any vacant lots developed.” “Infill produces millions of dollars in new revenue from existing infrastructure for the city, and that is something city leaders are turning their backs on,” he said. “There are still some parcels available that would be great infill sites, but builders like myself won’t do infill with the city because their policies and ordinances have become too restrictive.” Based on the SAHBA study’s updated statistics, when buyers roll the government fees into a 6.5%, 30-year fixed-rate mortgage, the total cost of the exactions exceeds the Census Bureau’s 2005 annual median household income for Pima County-area residents of $41,521. “This creates an unacceptable, significant obstacle to providing affordable housing,” said Taczanowsky. “In unincorporated Pima County, for example, new home buyers could spend an entire year’s wages on government fees and taxes and still be $6,000 short.” To pay the government fees in their mortgages, residents pay an additional:
Almost $1 Million Available in ‘Buy Now’ Grant Funds, Apply Now
NAHB is encouraging HBAs that have not yet received or been approved to receive grant money to apply today. To date, 117 HBAs in 36 states have received or been approved to receive more than $2 million in NAHB advertising assistance. Including the matching funds that the HBAs contributed, the total value of their advertising campaigns is more than $6.1 million. The NAHB “Buy Now” Advertising Assistance Program provides grants to qualifying HBAs in three categories:
To Apply To learn more about the program, eligibility considerations and requirements, click here, or call Niki Clark at NAHB at 800-368-5242 x806l. To view a list of the HBAs that have received or been approved for grants, and their grant level categories, click here. Nation's Building News Will Not Be Published July 16Nation's Building News will not be published July 16. Regular weekly publication will resume July 23. U.S. Rebound May Be Bumpier Than Fed Expects as Credit TightensWith what started out as a financing squeeze in the subprime-mortgage market now threatening other parts of the economy, it may be a struggle to achieve the 2.5% to 3% growth rate that most forecasters inside and outside of the Federal Reserve have penciled in for the second half of the year. Borrowing costs for companies are climbing as banks and investors demand more for their money and consumers are feeling the pinch from rising interest rates and sagging house prices. “We’re just starting round two,” says Andy Laperriere, managing director at International Strategy and Investment Group in Washington, which, along with others, sees growth for the period at below 2%. Laperriere, who was among the first to highlight the economic impact of tougher home-loan terms, says that, “Tighter credit appears to be spreading beyond the mortgage market.” “The market is overlooking the slowing effect” of higher borrowing costs, says Alan Blinder, a former Fed vice chairman who is now a professor at Princeton University. He says policy makers may have to cut rates this year to keep the expansion on track. Most economists expect no change in rates this year. (www.bloomberg.com)
Florida Foreclosure Future ShockA tidal wave of foreclosures may be heading toward Florida, according to Duane LeGate, president of House Buyer Network, who arranges quick sales for home owners in distress and claims he can predict where markets will go bad by looking at the traffic on his Web site. “We can tell you what’s going to happen nine months from now,” he said. His most endangered market right now is Orange County, Fla., home of Disney World. “Orlando has blown up,” he said. “There’s been a 700% increase in traffic of people filling out forms. I could put a bull’s eye on Orlando and write the headline for what will be going on in January and February." According to the National Association of Realtors®, Orlando prices for the first quarter rose 2.5% compared with a year ago, which would point to a weak, but more stable market. Nevertheless, LeGate trusts his indicators. Other locales LeGate identified as trouble spots include Clark County, Nev.; Riverside County, Calif.; and Prince Georges County, Md. However, some markets are turning positive, according to LeGate. The number of his client contacts from Maricopa County, Ariz. — the Phoenix area — dropped this year by about 38%. And looking good are Prince William County, Va. in the Washington, D.C. metro area, where client contacts fell 37%, and nearby Fairfax County, where they’re down 40%. (cnnmoney.com)
Increasing Rate of Foreclosures Upsets AtlantaDespite a vibrant local economy, Atlanta home owners are falling behind on mortgage payments and losing their homes at one of the highest rates in the nation. A big reason that the problem of borrowers not being able to make their mortgage payments when their adjustable rate loans reset at a higher interest rate is occurring faster here is a Georgia law that permits lenders to foreclose on properties more quickly than in other states, declaring a borrower in default and reclaiming a house in as little as 60 days. The problems include not just people losing their homes, but also sharp declines in property values, particularly in lower-income and working-class neighborhoods. So far, the pain has been limited to those on the financial margins. An estimated 2.7% of all housing units in the region were in foreclosure at the end of last year, up from 1.1% in 2000, according to an analysis by the Atlanta Regional Commission. Nationally, less than 1% of all housing units were in foreclosure, according to data from the Mortgage Bankers Association and the Census Bureau. While wages have languished, average Atlanta families are shouldering more debt. As of March, residents had bigger credit card balances, mortgages and car loans relative to their income than average Americans, according to data compiled by Moody’s Economy.com. And the equity that Atlanta residents have in their homes has dropped 14% since peaking in late 2005. (www.nytimes.com)
A Tough Time, But Big Builders Build ShareDespite a decline of 231,000 sales in the new-home sector, the top 100 residential building companies in the country increased their market share in 2006 to 43.6% from 36.6%, according to Builder magazine. Just 10 years ago, their market share was 28%. The top 10 builders registered the largest gains last year, boosting their share of the new-home market to 25.7% from 21%, Builder reported. (www.chicagotribune.com)
Subprime Lenders on NoticeNew guidance from federal financial regulators will almost certainly cut sharply the availability of high-risk mortgages for subprime buyers. In a June 29 policy statement on loans to borrowers with imperfect credit histories, federal financial regulators urged banks, credit unions and their mortgage subsidiaries to verify the income, assets and employment of all borrowers, except when substantial financial reserves can be shown. The guidelines also say that lenders should underwrite adjustable-rate subprime mortgage applicants at the “fully indexed” interest rate, not at a deeply discounted teaser rate. The federal regulators also stressed that lenders should approve subprime adjustable loans based only on “the borrower’s ability to repay the loan according to its terms.” (www.washingtonpost.com)
Modulars Build a Reputation: Communities Welcome Them; Buyers, Builders Praise Looks, DurabilityModular or prefabricated homes have gained a whole new level of respect, and although the sector makes up a small portion of the residential construction business and has been hit by the slowing new-homes market, it is one of the fastest growing segments of the industry, according to NAHB. “The disadvantages to modular are mostly preconceptions,” said builder John Garrett, who owns Virginia Building Solutions in Tappahannock. “People misunderstand the product. They think the houses are boxy or they can’t get the finishes they want.” That may have been true 10 years ago when the choices were limited, but today modulars come with cathedral ceilings, high-pitched roofs, granite countertops and any number of floor plans, “and you can customize,” Garrett said. A client brought Garrett a set of floor plans, which he took to the engineers at Ritz-Craft Homes. They turned the design into a computer-generated modular plan that meets national, state and local building standards. The 3,400-square-foot home was built in a factory in Hamlet, N.C. in four months, where a similar home would have taken a year. Five modules — some as big as 60 feet by 14 feet — were transported to the site and installed by crane. “Modulars are very well built. They go up much faster with quality construction at a more reasonable price,” said Brian Bower, the home’s owner. (www.timesdispatch.com)
Federal Regulators Address Subprime Lending RisksAddressing emerging risks associated with certain mortgage products and lending practices for subprime borrowers, the federal financial institution regulators on June 29 issued its "Statement on Subprime Mortgage Lending" that, among other things, will require lenders to use the fully indexed, fully amortized rate, instead of a “teaser” rate, when underwriting a subprime mortgage loan. The agencies said that they were particularly concerned about the growing use of adjustable-rate mortgages (ARMs) “that provide low initial payments based on a fixed introductory rate that expires after a short period, and then adjusts to a variable rate plus a margin for the remaining term of the loan. These products could result in payment shock to the borrower." In a footnote, the federal regulators cite the use of ARM products known as “2/28” loans, which feature a fixed-rate for two years and then adjust to a variable rate for the remaining 28 years. The fully indexed interest rate can typically range from a full three to six percentage points higher than the initial fixed interest rate. These ARM products can have additional characteristics that heighten risks for lenders and borrowers, they said. These include qualifying borrowers based on limited or no documentation of income or imposing substantial prepayment penalties or prepayment penalty periods that extend beyond the initial fixed interest rate period. “In addition,” they said, "borrowers may not be adequately informed of product features and risks, including their responsibility to pay taxes and insurance, which might be separate from their mortgage payments.” In response to those concerns, the final statement from the agencies includes these provisions:
In written comments on May 7, NAHB said that it supported the supervisory approach taken in the proposed statement directing financial institutions “to have appropriate and prudent underwriting standards, risk management practices and consumer disclosures.” NAHB also cautioned that an effort should be made “to avoid unnecessarily reducing the flow of mortgage credit, limiting consumer mortgage options or raising housing credit costs for qualified home borrowers." “It is important,” NAHB’s comments added, “that efforts to ensure prudent mortgage lending and risk management practices as well as adequate consumer disclosures are comprehensive and uniform for all institutions and organizations that are involved in providing mortgage credit.” For more information, e-mail Donna Ely at NAHB, or call her at 800-368-5242 x8529. 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. Mortgage Rates Drift Lower for Third Straight WeekWith some encouraging signs that inflation is continuing to head in a direction that will eventually make it less a concern for the Federal Reserve, long-term mortgage interest rates have drifted lower for the third consecutive week. The 30-year fixed-rate mortgage averaged 6.63% for the week ending on July 3, down from an average 6.67% the previous week, according to Freddie Mac's Primary Mortgage Market Survey. The 30-year rate averaged 6.79% a year earlier. The 15-year fixed-rate mortgage averaged 6.30% last week, down from 6.34% the previous week and 6.44% for the same period of 2006. One-year Treasury-indexed adjustable-rate mortgages averaged 5.71%, down from 5.65% for the prior week and 5.83% one year earlier. Frank Nothaft, chief economist for Freddie Mac, attributed the downward drift in mortgage rates in part to moderation in core inflation. “In the statement accompanying their decision to leave the target federal funds rate unchanged, the Fed noted that core inflation had declined recently, though a ‘sustained’ moderation is still to be seen, and signaled that inflation risk continues to figure in their policy decisions,” he said. “Helping to ease some inflation concerns, May’s personal consumption expenditures report found that the core price measure had increased 1.9% for the year ending in May, within the 1% to 2% range with which the Fed is comfortable, and the lowest year-over-year rise in more than three years,” Nothaft said. While most analysts have concluded that the Fed is unlikely to reduce the federal funds rate anytime soon, an ongoing decline in inflation would in effect increase the real cost of borrowing, putting pressure on the Fed to reduce interest rates to keep their monetary policies from becoming more restrictive.
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.
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: Calculating the Radius of an Arch
I have found that the following formula provides precise dimensions and takes advantage of the simple calculators on the market today. Even calculators without a square-root function can handle this one:
For instance, let’s assume that an arched opening leading from a dining room to the great room has 84-inch tall sides, the span is 96 inches and the center of the arch is to be 96 inches above the floor. The rise is then 12 inches, as shown in the drawing. When you substitute the numbers and calculate the formula you get:
The radius is 102 inches — with no errors resulting from inadvertent stretching of chalklines or other mechanical limitations, such as trying to lay out a curve with a 102-inch radius on a piece of plywood that’s only 96 inches long. — Charles W. Davis, Watsonville, Calif. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Christina Glennon at Fine Homebuilding.
BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665.
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. Energy- and Resource-Efficient Homes Provide Top ValueThree EnergyValue Housing Award (EVHA)-winning builders are providing exceptional value to their customers through energy- and resource-efficiency, according to the NAHB Research Center. 2007 EVHA winner Grupe Company incorporates state-of-the-art technologies, such as soy-based spray foam wall insulation, tankless gas water heaters, PV roofing tiles and a cooling system that brings in outdoor air during cool nights, for $70 a square foot. California’s combination of high electricity rates, financial incentives for renewable energy systems, and strict energy codes have contributed to increased market acceptance of energy efficiency. Yet Grupe has gone above and beyond local norms as stewards of the environment. For example, in 30 years of business, the company has planted more than half a million trees, built more than 400 acres of lakes and opened more than 200 public parks. Those, in turn, have added tremendously to the value of its communities. Bob Ward Companies, one of the first gold winners of the EVHA in 1996, built a demonstration home for its 2007 winning entry. Like Grupe Homes’s entry, the home features state-of-the-art technologies such as PEX plumbing systems, solar hot water and a PV solar power system at an affordable cost. The builder is trying new technologies and techniques in order to continue to provide customers the value they’ve come to expect. “Our home buyers, who are very cost-conscious, are pleasantly surprised to know that there can be a complete package of energy-efficient features in a home in their price range. For them, this is real added value,” says Linda Veach, president of the Baltimore-based company. A recent local electricity price hike of more than 70% has helped spur interest in efficient homes in the builder’s market. Building in a region with some of the lowest electric utility rates in the nation, Idaho's Holton Homes, now in its fifth year as a 100% Energy Star builder, has demonstrated that interest in energy efficiency doesn’t have to be driven by price or local market conditions. The builder stands out from the crowd with advanced energy features that include 2x6 walls framed with advanced-framing techniques, R-21 spray foam insulation, 16 SEER air conditioners, gas tankless water heating and whole-house ventilation. “We are committed to finding new ways to bring cutting-edge energy saving technology to the average home buyer,” the company says. For more information about the EnergyValue Housing Award or to obtain a 2008 application, click here (www.nahbrc.org/evha). Judges Selected for 2008 EnergyValue Housing AwardsThe NAHB Research Center has announced the selection of judges for its 2008 EnergyValue Housing Awards (EVHA). Each year, home builders across the nation compete for the prestigious award, which honors companies that voluntarily incorporate energy efficiency into the design, construction and marketing of new homes. The six-member panel for 2008 includes a mix of new and returning judges specializing in the fields of engineering, residential energy, construction, architecture and design. Now in its 13th year, the EVHA program not only recognizes energy-efficient practices, but also educates the home building industry and the public about advanced technologies and successful approaches to energy-efficient construction that can be implemented by mainstream builders. The awards will be presented during the 2008 International Builders’ Show (IBS) in Orlando, Fla. in the affordable, custom, factory-built, production, and multifamily categories for hot, moderate and cold climate regions. This year's judging panel includes:
Members of the judging panel will meet as a group in October to discuss their findings and select the winners, who will be announced at the 2008 IBS in Orlando. EVHA is coordinated by the NAHB Research Center in partnership with NAHB and the U.S. Department of Energy through its National Renewable Energy Laboratory. For more information on EVHA, click here (nahbrc.org/evha); or e-mail Kevin Mo, EVHA program manager, or call him at 301-430-6210. Worker Performance Appraisals Root Out ProblemsThe following has been reprinted from Quality Matters, the official e-newsletter of the NAHB Research Center's National Housing Quality (NHQ) program, and is courtesy of Business of Building e/Source. While most employees can be fired “at will,” terminating someone is still a painful process — for management as well as the worker involved. Three keys to avoiding this outcome are:
“I get a lot of questions from builders about performance problems that are really hiring problems or training problems,” says Janna Mansker of Organizational Development Associates, Atlanta. “Start with the right person in the job and in the first 90 to 120 days, set them up for success with training,” she advises. For Michael Bosgraaf of Bosgraaf Homes, a small production builder in Holland, Mich., training has involved forging common ground with trade contractors on acceptable performance, then holding them accountable as a matter of practice — and — when it comes time for them to request a price increase. Bosgraaf has only 22 employees, but thousands of trade contractors who are the face of Bosgraaf Homes to customers. He recognizes that the word-of-mouth advertising created by the way both employees and contractors behave and complete their work is even more important to the company’s marketing success than mass media. Scopes of Work Matter Therefore, once Bosgraaf and its trade contractors settle on price, by mutual agreement, their performance is judged by the service they deliver. Besides excellence in woodworking, for example, carpenters and other trade contractors are measured on:
“We brought them into a room all at once, bought them lunch and asked them how they felt they should be judged by us,” Bosgraaf says. “Consistently, they voted that they should be judged on service.” Three Components to Excellent Performance Brenda VanderMeulen of River Hills Consulting in Holland, Mich., says employee and trade performance comprises three things:
“People don’t fail in their jobs because they’re technically incompetent,” she says. Instead, it’s often their soft skills and behavioral issues that get in the way. Too often, behavior is not addressed in the job description or scopes of work, but workers and subcontractors need clear definitions of acceptable and unacceptable behavior. “Be very specific,” VanderMeulen says. “People need to know what you consider to be good work.” If you don’t define it, it will be difficult to measure it. Employees Need Regular Feedback, Not Crisis Communication Admittedly, Mansker says, performance measurement by a manager is based on a combination of both objective and subjective data. It is about “shaping” rather than “grading” behavior, she says, so managers should talk to their employees about what they are doing — both positive and negative — on a regular basis. “You have to let people know what you expect of them,” says Jack VanderMeulen, president of VenderMeulen Builders. “Most people want to perform,” he says, and not just for money. When reviews are handled on an annual basis, they tend to focus on the previous three months, simply because it’s difficult for a manager to recall anything about performance prior to that. As an alternative to ensure that you are capturing all of the data on employees that both of you need, Mansker suggests:
“I have seen the turnaround in employees once they know what the expectation is,” Mr. VanderMeulen says. In addition, documentation has helped him save money in unemployment claims. First, Hire the Right Person One caveat, though. None of the above will work to improve employee performance if you hire someone whose hard wiring runs contrary to the expectations of the job. A good job description will tell you, for example, whether the type of person who would be a good fit is naturally detail-oriented, outgoing, an office person or a field person. Also, are you seeking an experienced person or an apprentice; a crew leader or a carpenter? In the interview, ask specific questions about how a candidate performed in the past, rather than about hypothetical situations, in order to judge whether they would be a good fit for the opening you have. In addition, set up good working relationships from the start by having the person you hire spend 20 to 30 minutes during their first week on the job with each of the people mentioned in their job description under “working relationships.” For more information about scopes of work and performance management, e-mail Frank Alexander, NHQ programs director. 'Managing Your Employees' Available at BuilderBooks.com "Managing Your Employees," available through BuilderBooks.com, is designed to help you manage the "people paperwork" of you business easily and productively. The book and accompanying CD-ROM cover the key areas for creating a successful HR program and include model personnel policies, a customizable employee handbook, legal and regulatory information and suggested personnel systems and processes. To view or purchase this publication online, click here, or call 800-223-2665 to order. Ex-Target VP Says Consumer Paradoxes Change Sales RulesConsumers these days are sending out contradictory signals and for every trend that can be spotted there is an equally important countertrend, according to Robyn Waters, the former vice president of trend, design and product development for Target Corporation. But by making the most of these paradoxes, home builders can come up with some fresh ideas to galvanize their business. “There is no next big thing anymore,” Waters told a PCBC audience in San Francisco at the end of May. In tracking trends, she said, “most look out at what’s happening,” but the real advantage comes from “learning to go inside to the hearts and minds of consumers to find out what’s important to them. Figure out what’s important, not what’s next.” Drawing on her most recent book, “The Hummer and the Mini: Navigating the Contradictions of the New Trend Landscape,” Waters calls these the days of “the contradictory consumer” and she provided several examples of changes that are bending the old marketing rules and that need to be considered by home builders:
Builders from the outset need to tune in to a basic psychological paradox that is part of human nature: people desire to fit in and belong, and at the same time they want to be perceived as unique individuals, she said. And builders are in a position where they can help guide their customers on the way to establishing their individuality through a complicated maze in which there are more products for them to choose from than ever before. Today, supermarkets stock their shelves with 30,000 items, up from 15,000 not too long ago. There are 12 versions of Oreo cookies to decide upon, and at Starbucks there are 19,000 different ways a customer can order a cup of coffee. Among the macrotrends with implications for home builders:
OSHA Making Surprise 'Swept Up in Safety' Visits in South
The OSHA initiative aims to identify and fix safety hazards and reduce exposure to the four leading causes of employee fatalities in the Southeast: falling, being “struck-by” objects and vehicles, getting crushed and being electrocuted. OSHA compliance officers conduct immediate inspections of sites where they observe safety hazards such as unsafe scaffolds, fall risks, improper trenches and other construction hazards. "OSHA's goal is to raise awareness about the safety hazards that lead to employee deaths," said Cindy Coe, OSHA's regional administrator in Atlanta. The program also promotes safety through positive reinforcement. When officers see conditions that are "in compliance," they commend the employers to encourage continued safe practices. Previous "Swept Up in Safety Weeks” were held in December 2006 and March 2007. In December, 523 inspections yielded 1,163 violations, with 1,008 of them being designated as “serious.” More infractions were found in March, with 651 inspections resulting in 1,506 “serious” violations. Data from a “Swept Up” week last month is not yet available. Initial statistics indicate that the regional effort is having a positive effect. There were 87 construction-related fatalities in the region during the first half of this year, down from 103 during the same six-month period of 2006. NAHB has been working closely with OSHA to provide the residential construction industry with information, guidance and access to training resources to help protect employee health and safety. The NAHB-OSHA Alliance was renewed at a ceremony during NAHB’s spring board of directors meeting in early June. A variety of resources are available from NAHB to help employers implement safety programs, comply with OSHA standards and provide safety training for their employees. These include the best-selling “NAHB-OSHA Jobsite Safety Handbook, English-Spanish” and the newly-released “Home Builders’ Safety Program.” To see the full selection of safety resources, go to www.BuilderBooks.com/Safety. OSHA has several special-emphasis programs to address safety and health hazards, including separate outreach, education and training components that encourage employers and employees to visit the agency's Web site or contact an OSHA office. For more information, e-mail Rob Matuga at NAHB, or call him at 800-368-5242 x8507.
Prevent Construction-Related Falls The “Fall Protection Video,” available through BuilderBooks.com, can be used to train workers — in both English and Spanish — how to safely perform some of the most hazardous jobs in home building. The video demonstrates safe work practices and equipment use that meet OSHA’s requirements. To view or purchase this DVD online, click here, or call 800-223-2665. NAHB Book About Warranties Helps Avoid Costly Mistakes
“Warranties for Builders and Remodelers, Second Edition” gives home builders, remodelers, trade contractors, suppliers and other industry professionals vital knowledge concerning the basic elements of a warranty so they can avoid costly mistakes and protect themselves and their businesses while simultaneously maintaining customer satisfaction. Written by NAHB’s legal experts and available from BuilderBooks.com, “Warranties for Builders and Remodelers, Second Edition” explains the rights, responsibilities and recommended practices and procedures for developing a warranty program. The newly revised edition of this popular publication addresses recent changes to state statutes of limitations that apply to construction claims, and provides updated information on mandatory notice and opportunity to repair provisions in states that have these laws. The publication features:
With the guidance of your attorney and the easy-to-follow guidelines presented in this book, “Warranties for Builders and Remodelers, Second Edition” helps inform and protect industry professionals. This book should not replace the expertise of legal counsel. How to Order To order the publication online, click here, or call BuilderBooks.com at 800-223-2665. Remodeling Lead Rule Would Leave Children UnprotectedNAHB is calling for the Environmental Protection Agency to clean up ambiguities in its recently published supplement to the proposed rules for remodeling and renovation activities in homes where there may be lead-based paint. The agency now wants to include “child-occupied facilities” in the proposed rule, an addition NAHB wholeheartedly supports “because their inclusion will capture additional sources of lead contamination,” NAHB Staff Vice President for Environmental and Labor Policy Susan Asmus said in a 19-page comment letter to EPA. But lack of clarity regarding what constitutes a child-occupied facility, the possibility of additional liability for the remodeler and the fact that the rule exempts home owners is likely to blunt the impact of the proposal — and leave more children unprotected, the letter said. In the meantime, under onerous requirements remaining in the rule proposal, professional remodelers would have to keep extensive records and conduct and document testing, adding to the cost of their work and providing an incentive for home owners to do the work themselves — perhaps not in a lead-safe manner, the letter pointed out. “NAHB is concerned that nowhere in [the proposal] is the agency held accountable for ensuring the effectiveness of this rule in eliminating or even reducing childhood lead poisoning,” the letter said. The NAHB letter addresses several specific concerns in the supplemental proposal:
EPA is likely to release the final rule by the end of the year. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Apply for This Year's NAHB Remodelers' AwardsThe following awards are available to NAHB Remodelers throughout the year.
For More Information For more information about the NAHB Remodelers awards, visit the NAHB Remodelers awards section on the NAHB Web site, call the NAHB Remodelers at 800-368-5242 x8216, or e-mail remodel@nahb.com. Register for Custom Builder Show in Naples, Fla., Oct. 26-28
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:
To Register Online registration is now open. For more information and to register, go to www.nahb.org/custom. 'Cookin' for a Cure' Proceeds Donated to Two FamiliesNearly 900 "Cookin' for a Cure" cookbooks, produced by the Log Homes Council, have been sold so far, and more orders are coming in. More than 60 council members and most of their product suppliers have provided tasty recipes — ranging from Texas Caviar to Cherry Pretzel Torte — and have donated funds to produce the 200-page cookbook. All proceeds from the cookbook will go to the National Cancer Awareness Foundation, a nonprofit, totally volunteer organization that gives 100% of all the money it raises to families in need. The council has already donated proceeds from cookbook sales to two families in need. "Cookin' for a Cure" sells for $14.50, plus $4.05 shipping. To Order 'Cookin' for a Cure' To order "Cookin' for a Cure," click here for the order form and fax or mail your order to:
Or, call the Log Homes Council at 800-368-5242 x8576, or visit the council Web pages on the NAHB Web site, www.nahb.org. Enter the 2007 Brick in Home Building Competition by July 31Enter the Brick in Home Building Awards, which showcase the finest work in clay face and paving brick from residential builders and architects around the country. Conducted by the Brick Industry Association, entries are due by Tuesday, July 31. Entries can be submitted in one or more of the following categories:
For more information about the award, including eligibility, submission requirements and judging, visit www.gobrick.com/HomeBuildingAwards. To enter, click here.
Take PCA Builders Survey, Be in Drawing for Free iPodThe Concrete Home Builders Council (CBHC) and the Portland Cement Association (PCA) are conducting a home builder survey to determine what types of products and systems are being used in homes currently being built so that they can develop targeted, focused programs that better serve the residential building community. The online survey will track changing attitudes, perceptions and trends in the industry and takes about 10 minutes to complete. To Take the Survey To take the survey, click here. Free Survey Results and iPod Drawing Respondents will be entered into a drawing for one of three 4GB iPod nanos, valued at more than $189 each. Respondents will also be given a free copy of the results once they are compiled. Respondents will be asked to fill out contact information at the end of the survey to be entered into the drawing for the iPod nano and to receive the survey results. The contact information will be used for drawing and copy-of-the-results purposes only. The deadline for survey submissions is July 25. For more inforation about the Portland Cement Association, visit www.cement.org. Apply for 2008 Commerical Building Awards by Aug. 1
The National Commercial Builders Council (NCBC) is accepting applications for its 2008 Awards of Excellence program, which recognizes achievements in the national commercial building industry for design (remodeling and new construction), market appeal, energy efficiency, challenges faced during building and overall success of projects that are either built or renovated. The deadline for entries is August 1. The National Commercial Builders Council sponsors the Awards of Excellence program to bring recognition to commercial building projects that range from less than 5,000 to more than 100,000 square feet. Projects must have been completed after Dec. 31, 2004 and may be entered in commercial, industrial, institutional, medical, mixed-use commercial/retail, recreational, retail and new for 2008 — green building. One or several projects can be entered in this competition. Projects may be submitted by the builder, developer, architect or contractor of the project. The six divisions in which a project can be entered include:
Winners will be notified by mail no later than Nov. 1. A public announcement will follow at NAHB’s International Builders’ Show, Feb. 13-16, 2008, in Orlando, Fla. Recognition includes a desk obelisk; a photo of your project on display with the other winners at the International Builders’ Show; acknowledgment in Commercial Builder magazine; and the opportunity to participate in educational sessions at the Builders Show. In addition, some winners may be featured in future issues of Commercial Builder magazine. For more details on eligibility and entrance requirements, click here, e-mail Nick Lashinsky at NAHB, or call him at 800-368-5242 x8455.
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. Interior Bill Promotes ‘Cooperative Conservation’Proposed legislation from the U.S. Department of the Interior is a positive first step but stops short of needed changes in how regulators address the Endangered Species Act, according to NAHB environmental regulatory analysts. The proposed Cooperative Conservation Enhancement Act “removes barriers to fostering additional cooperation among federal agencies, local and state governments, and the private sector,” according to an Interior press release, “and gives the department greater opportunities to enter into partnerships with private individuals, companies, organizations and government entities in order to achieve conservation goals on a landscape scale.” Unveiled in June, the proposed act is the result of a series of “listening sessions” on conservation programs held in two dozen locations last year across the country and attended by top Administration officials. At the urging of NAHB leaders, association members signed up to testify at all 24 sessions, offering comments with two themes in common: existing regulations must be clarified and they must be based on science, not sentiment. Among the changes advocated by NAHB representatives:
The proposal calls for clarifying which department has jurisdiction, providing additional Interior Department authority for funding conservation grants programs and modifying the tax code “so department grants for conservation are not treated as income” and the conservation agencies can work more closely together, the agency said in its press release. One benefit of the new bill is language codifying conservation banks, for which the agency released guidance four years ago. These banks allow landowners who restore and protect habitat for endangered species to sell conservation credits to developers or others who seek to build on or otherwise modify occupied habitat for that species. “This program shows a great deal of promise,” said NAHB Environmental Policy Analyst Diane Keefe. However, regulatory clarity remains a problem, Keefe said. “For example, there is no clear guidance on the design and approval of Habitat Conservation Plans, critical habitat designation and the definition of adverse modification. The department needs to address the underlying regulatory issues before cooperative conservation can work.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. NAHB Urges Proven Standards for Plumbing ProductsThe NABH Board of Directors have approved a resolution supporting and encouraging objective and scientifically tested performance-based standards for the manufacture of plumbing products. The resolution opposes any attempt by local, state or federal government to impose prescriptive content-based standards on the manufacture of plumbing products. The resolution was approved at the Spring Board of Directors meeting last month in Washington, D.C. Such standards could have unknown consequences for the safety and reliability of plumbing products and would unnecessarily disrupt the product procurement process, limit consumer choices, increase costs and reduce the availability of plumbing products. The resolution was sponsored by the Plumbing Manufacturing Institute — a member of the National Council of the Housing Industry, The supplier 100 of NAHB — and by the California Building Industry Association. To read the resolution, click here. (This link available to NAHB members only.) NAHB Staff Helping HBAs With Storm Water ProposalsAs the deadline looms for state and local governments to implement their storm water programs, home builders associations continue to seek help from NAHB environmental regulatory staff members to make sure that the proposals make sense and are affordable. The U.S. Environmental Protection Agency has set March 2008 as the deadline for the programs to be fully up and running under Section 402 of the Clean Water Act. The rules are slowly being unveiled jurisdiction by jurisdiction. So far, fewer than half of those expected have been released. State and local regulators invite comments when they propose their new rules, but the complexity of the issues involved can make reviewing a proposal a daunting task. In 2006, NAHB responded to requests from HBAs in 17 states. This year, a steady stream of new proposals is expected as March approaches. Meanwhile, states are also renewing their construction general permits, with 10 due to expire by the end of the year. When they receive a request from the HBA, NAHB staff members review and analyze the ordinance in question to determine its effect on the home building industry and how it conforms to national standards and trends, and they then develop arguments, supporting data and recommended changes. Recently, staff members:
For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. 'Casa y Comunidad' Earns National Publishing Award"Casa y Comunidad: Latino Home and Neighborhood Design,” which takes the first-ever look at the growing and increasingly prosperous U.S. Latino community and its housing needs and helps all segments of the housing industry to understand and prepare for this emerging market, was named a silver medallion winner in the 2007 Benjamin Franklin Awards for book publishing. The award was presented in New York City last month on the eve of the BookExpo America held during the 2007 Publishing University. “Casa y Comunidad” was edited by Henry G. Cisneros, former secretary of the U.S. Department of Housing and Urban Development and founder and chairman of CityView, which partners with home builders to provide workforce housing. Cisneros was named to the Housing Hall of Fame earlier this year. “Casa y Comunidad” provides readers with a series of essays on topics such as the demographics of Latino homeownership, community, home design and affordable housing. Packed with photos, graphics and success stories, the book provides strategies for doing business with Latino home buyers — a population that is estimated to grow by at least 60% by 2020. As HUD secretary during the Clinton Administration, Cisneros is credited with initiating the revitalization of many of the nation’s public housing developments by formulating policies that have contributed to today’s record homeownership rate. The Benjamin Franklin Awards, sponsored by Publishers Marketing Association (PMA), the trade association representing the Independent Book Publishers Association, recognize excellence in editorial and design. “Casa y Communidad” is available at BuilderBooks.com. To view or purchase this publication online, click here, or call 800-223-2665. Training Official Meets With HBI Board of TrusteesAt the June 8 spring meeting of the board of trustees of the Home Builders Institute, the workforce development arm of NAHB, Emily Stover DeRocco, assistant secretary for the Employment and Training Administration (ETA), discussed several topics of interest to the home building industry, including the successful launch of Sed de Saber™-Construction Edition. Introduced to the Sed de Saber™ system last year in English as a Second Language (ESL) training for workers in the hospitality business, DeRocco saw that it would also be a valuable tool for the construction industry and helped connect HBI to its developers, California-based Retention Education, LLC. In her remarks to the HBI trustees, DeRocco also voiced enthusiasm for the transfer of the YouthBuild program from the Department of Housing and Urban Development the Department of Labor under the ETA umbrella. HBI currently provides the YouthBuild program with technical assistance in construction skills training through its Pre-Apprenticeship Certificate Training (PACT) and will seek to continue serving the program’s young clients at its new home. HBI trustees and representatives from five of the 10 states funded by HBI’s grant under the President’s High Growth Job Training Initiative spoke about their efforts and inquired about new funds to replicate these programs. DeRocco also addressed the congressional transfer last year of Job Corps from ETA to the Department of Labor’s Office of the Secretary, voicing disappointment over the move, citing the program’s 40 years of success under her agency. “It was an honor to have Assistant Secretary DeRocco attend our board meeting,” said HBI Chairman William Paul, a builder and developer from Tampa, Fla. “Her visit was timely and warmly received by the board. Our partnership with the Department of Labor is a critical component of what we do at HBI, generating programs that serve as a beacon of hope for thousands every year.” For more information on HBI’s programs, e-mail Maria McIntyre, or call her at 800-795-7955 x8912.
The product, now available at www.seddesaberconstruction.com, uses proven LeapFrog technology to allow workers to listen, record and play back their pronunciation of more than 500 vocabulary words and 340 phrases. Participants who practice 30 minutes each day will complete the program in just four months. Learning at home, on their own time, also eliminates scheduling conflicts. Sed de Saber™-Construction Edition was developed by a team of subject matter experts assembled through HBI — including superintendents, craft skills experts, remodelers and builders — to ensure that the information is relevant to today’s home building workforce. To address worker safety issues related to the language barrier, HBI created a seventh book based entirely on the NAHB-OSHA Job Site Safety Handbook. NAHB members can purchase the learning system, all seven books and a skills assessment to chart employee progress for $395 per kit. The non-member price is $495. Order today and empower your workers to learn English at www.seddesaberconstruction.com.
"Assembly Required" on DIY
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