Nation's Building News Online: November 15, 2010

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Big Deficit of New Single-Family Homes Will Need to Be Addressed as Economy Improves

Annual single-family housing production in 2008 and 2009 fell about one million units short of the housing that would be needed in a normally functioning economy, suggesting that builders will have a lot of catching up to do as the economy improves and household formations return to trend levels, according to a special study by NAHB’s Housing Economics.

With builders remaining cut off from the financing they need from banks to renew production and the marketplace not performing as well as originally expected, 2010 is likely to add another one million units to the growing deficit of single-family housing, according to the report, “Extent of Underbuilding in the Single-Family Housing Market,” which was prepared by NAHB economists Robert Denk and Paul Emrath.

The report finds that there was an excessive amount of single-family building from 2003 through 2005, but overbuilding largely ended by 2006 and the subsequent downturn was severe enough to more than offset those annual surpluses.

“As a result, the single-family housing market in the U.S. currently finds itself in a significantly underbuilt state — in the sense that excess or pent-up demand for new construction exists, compared to the long-term trend we would see if housing, labor and credit markets were functioning normally and generating a normal rate of household formations,” the report says.

The analysis used building permits for single-family homes rather than housing starts because they are based on a much larger sample and provide more geographic detail, which enabled the analysis to be extended to the state level. Both single-family permits and starts have tracked each other closely in current years.

The study found that underbuilding is occurring in most of the states, including those that saw the most overheated housing markets at the height of the boom.

A Record Trough in 2009

Single-family permits plunged to a trough of 441,000 in 2009, even lower than in the previously worst housing recession since World War II, which occurred in 1981, when 550,000 single-family permits were recorded.

“Even this understates the magnitude of the recent downturn in the housing industry to some extent,” the report says, because multifamily starts and permits last year declined to an historic lows of fewer than 150,000 units, compared to about 400,000 units annually during the early 1980s.

“Moreover, the population and stock of housing in the U.S. has continued to expand,” the report says. “In 1980, there were roughly 226 million people and 88 million housing units in the country. By 2009, these numbers had increased to 307 million people and 130 million housing units, so in that year the U.S. added a record low number of new housing units to a population and housing base that was larger than it had ever been before.”

From 1988 through 2003, the U.S. population was growing at a fairly steady rate that averaged 1.15% annually and varied only between 0.90% and 1.35%. Over this period — which goes right up to the housing boom years of 2004 and 2005 and can be considered a fairly normal one for housing — the number of single-family permits issued was increasing at an average of about 36,000 per year, consistent with a growing population that needs housing and an expanding inventory of older homes that need to be replaced.

A 3.28 Million Unit Deficit

Projecting that trend past 2003, single-family permits should have hit 1.4 million by 2005, 1.5 million by 2008 and been around 1.56 million in 2009, the report finds. Instead, permits were well over 1.4 million in 2003 and pushed past 1.6 million in both 2004 and 2005, “a period of serious overbuilding.”

Subsequently, however, permits dropped to under 1.4 million by 2006 — already slightly below trend — and continued to fall, reaching the historic low point of roughly 440,000 units in 2009.

Single-family surpluses occurred in the period from 2002 to 2006 and they were well over 200,000 annually in 2004 and 2005, the study calculates.

However, after 2005 “annual permit deficits began to materialize. These deficits were about a half million units in 2007, and in the neighborhood of a million units since then, as the rate of single-family permit issuance dropped to under 500,000 — more than a million units per year below trend.”

The NAHB economists conclude that accumulating annual surpluses peaked at 493,000 single-family units in 2005, and that was worked off entirely by the end of 2007, as annual production dropped below one million units.

The continuing depressed levels of single-family housing production since then resulted in cumulative underbuilding of 2.17 million units by 2009, and will likely grow to 3.28 million by the end of this year. “This represents cumulative underbuilding after earlier overbuilding surpluses have been entirely worked off,” according to the report.

State Deficits

Cumulative underbuilding, to various extents, exists in 45 of the 50 states and the District of Columbia, according to calculations by the NAHB economists.

The exceptions are Alabama, Washington, D.C., Hawaii, Montana, North Dakota and Wyoming. Washington, D.C. constitutes a relatively small part of a larger local housing market and its single-family housing accounts for less than 40% of its total housing stock. The other states continued to accumulate housing surpluses until 2008, when their cumulative overbuilding began to be worked off.

States that saw the hottest markets during the boom all now have single-family housing deficits, according to the report: Arizona, a deficit of 144,500; California, 49,500; Florida, 112,600; and Nevada, 75,600.

“It is probably not surprising that household formations have stalled and remain depressed while the national unemployment rate is above 9%,” the study concludes. “But it would be difficult to explain why households would choose to remain bundled together after house prices stabilize and labor markets improve.”

The cumulative housing deficit, the report says, represents “a significant pent-up demand that will at some point need to be worked off and begin to impact single-family housing production in a positive direction.”

To read the entire report, click here.

For more information, e-mail Paul Emrath at NAHB, or call him at 800-368-5242 x8449.

Politics Could Limit How Much Lame Duck Congress Accomplishes

As the 111th Congress reconvened on Nov. 15 in a post-election lame-duck session to complete unfinished business on an omnibus appropriations package funding the government in fiscal year 2011 and to work on extending the expiring Bush tax cuts, lawmakers were already looking ahead to a vastly changed political landscape.

Just four years after the Democrats swept into power in both chambers of Congress, Republicans handily recaptured control of the House and made major gains in the Senate on election night.

With Democrats still in control of the White House and no party anywhere near a 60-vote filibuster-proof majority in the Senate, it remains to be seen if the 112th Congress will be marked by total gridlock or whether the two sides can find room to compromise on the issues of the day.

In any case, NAHB will be reaching out to every member of Congress to educate them about the association’s legislative priorities and build bipartisan support wherever possible.

Needing to capture a minimum of 218 House seats to gain control of the chamber, Republicans on Nov. 2 won at least 240 seats, a net gain of 61, with five races remaining undecided as this issue of Nation’s Building News went to press. Democrats dropped from 255 House seats prior to the election down to 190 seats.

By a narrow margin of 53 to 47, Senate Democrats remain in power despite losing six seats to Republicans — Rep. John Boozman (Ark.) and Ron Johnson (Wis.) ousted incumbents, while Dan Coats (Ind.), North Dakota Governor John Hoeven, Rep. Mark Kirk (Ill.) and Pat Toomey (Pa.) won open seats.

The GOP’s bid to wrest control of the chamber fell short when Senate Majority Leader Harry Reid (D-Nev.) held off a stiff challenge from Republican Sharron Angle and Democrats Chris Coons and Joe Manchin won open seats in Delaware and West Virginia, respectively.

The official tally is 51 Democrats and 47 Republicans, with Independents Joe Lieberman (Conn.) and Bernie Sanders (Vt.) aligning themselves with the Democratic caucus.

One Senate race is still too close to call. In Alaska, Republican incumbent Lisa Murkowski lost her primary bid to challenger Joe Miller and ran for office in a write-in campaign. Murkowski is currently leading Miller and Democrat Scott McAdams is running a distant third, guaranteeing that whoever prevails will caucus with the Republicans.

Republicans also posted huge gains in the 37 gubernatorial elections, picking up six statehouse seats for a 29-to-19 majority, with one Independent. The outcome in Minnesota has still not been decided. This year’s governor’s races played an especially important role given the executive control of the states in the 2010 federal redistricting process. 

BUILD-PAC, NAHB’s political action committee, contributed to 27 Senate races, winning 23 of them for an 85% success rate. In the House of Representatives, BUILD-PAC-supported candidates won 286 of 328 races for a winning percentage of 87%. BUILD-PAC is also involved in a few races that are still too close to call. Overall, BUILD-PAC won 309 of 355 decisive races, for an 87% success rate.

The post-election session of Congress is tentatively scheduled to run this week and during the week of Nov. 29.

An Uncertain Lame Duck Agenda

While funding the federal government and expiring tax cuts are the top priorities, scores of other items may potentially be on the agenda. However, it is often turns out that little gets accomplished in lame duck sessions, particularly when one party wins control of one or both chambers of Congress, as occurred during this election. With political tempers frayed and many Democrats having just lost their jobs, it is uncertain how productive this post-election session will be.

Nevertheless, lawmakers face a mountain of unfinished business. They must choose whether to tackle several contentious issues such as whether to provide a temporary “patch” for the Alternative Minimum Tax, extend a host of popular tax breaks that expired last December but are usually renewed annually, give seniors a special $250 Social Security payment, extend unemployment benefits and reimburse physician Medicare payments. Action on these and many other outstanding issues may be deferred to the incoming Congress.

Meanwhile, NAHB’s top priority is restoring credit for housing production and that will be the association’s main focus as the lame duck session of Congress resumes. Shortly before adjourning to campaign for the midterm elections, lawmakers passed legislation that will provide $30 billion in capital to community banks to expand small business lending. Unfortunately, the fund established under the law does not allow for construction loans to be made to small builders.

Through intensive lobbying and grassroots efforts among the NAHB federation, the House moved rapidly to rectify the situation. It approved H.R. 6191, legislation that allows small home building firms equal access to the new lending fund. H.R. 6191 was also introduced in the Senate, but the chamber adjourned on Sept. 29 before the bill could come to a vote.

During the lame duck session, NAHB will do all in its power to urge the Senate to approve H.R. 6191 to help the industry rebound, create jobs and move the economy forward.

Looking ahead to the 112th Congress, NAHB will be reaching out to both sides of the political aisle to seek additional solutions to the current lending crisis and urge Congress to call on federal banking regulators to reduce regulatory restrictions on acquisition, development and construction credit and rein in overzealous bank examiners.

To read H.R. 6191, click here and enter the bill number 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.

Biden Announces Initiatives to Bring New Life to Home Weatherization and Energy Retrofits

NAHB is preparing to comment on a series of programs outlined in a Nov. 9 announcement by Vice President Joe Biden designed to bring new life to the home weatherization and retrofit initiatives now stalled in Congress. 

If successful, the programs would result in more jobs for the construction industry and a more energy-efficient housing stock. Among the components:

  • The Home Energy Score program would allow pre-selected, certified energy raters to score existing homes and help home owners decide what energy improvements to make.

  • PowerSaver, a financing program backed by the Federal Housing Administration, would be piloted in select markets to offer low-cost loans to help home owners pay for energy-efficient improvements such as insulation, new windows and high-efficiency heating equipment.

  • New guidelines have been proposed for training and certifying the construction industry members making the energy-efficient upgrades and protocols to safeguard the indoor environmental quality of a home when the upgrades are being made.

The initiatives are based on recommendations from “Recovery Through Retrofit,” Biden’s October 2009 report on how to combat rising unemployment while reducing dependence on fossil fuels.

Some of the Administration’s new proposals reflect the findings of an NAHB task force that after studying the Biden recommendations issued a report last winter on financing options, training and education needs and potential problems such as the new lead paint requirements that have since been put into effect by the U.S. Environmental Protection Agency.

The initiatives give “American families the tools they need to invest in home energy upgrades,” said Biden. “Together, these programs will grow the home retrofit industry and help middle-class families save money and energy.”

Home Energy Score

Energy raters certified by either the Building Performance Institute (BPI) or the Residential Energy Services Network (RESNET) will be eligible to perform Home Energy Score testing in a limited number of markets.

After testing the home, the raters will assign a Home Energy Score between one and 10 to help home owners understand their home’s current efficiency level and how it compares to other homes in the area.

The raters will also give the home owner a list of recommended improvements, with estimated annual savings and an estimated payback period for each upgrade.

Home energy ratings were proposed but then striken from a bill that Congress passed in June 2009 after intensive lobbying by real estate brokers, who feared that existing homes would not fare well in the market when compared to new, energy-efficient homes. The 1-10 rating scale only compares existing homes with other existing homes, avoiding that comparison.

Charlottesville, Va.; Allegheny County, Pa.; Cape Cod and Martha's Vineyard, Mass.; Minnesota; Omaha and Lincoln, Neb.; Indiana; Portland, Ore.; South Carolina; Texas; and Eagle County, Colo., have been chosen for the pilot sites. After this initial phase ends in the late spring of next year, DOE expects to look at the results and launch the program nationally.

Power Saver

Administration officials are seeking lenders to participate in a new financing program backed with $25 million in FHA guarantees. If successful, the program is expected to produce about 24,000 loans.

Home owners will be able to borrow money for terms as long as 20 years to make energy improvements of their choice, based on a list of proven, cost-effective measures developed by FHA and the Department of Energy.

The loans will be available in Austin, Texas; 16 towns in Maryland; the greater Chicago area; and the communities participating in the Home Energy Score pilot.

PowerSaver financing will be similar to a home equity loan that must be paid off at the time of sale, or in some cases, when refinancing occurs. It will use the existing FHA Title 1 program, with additional incentives and requirements.

The combined loan-to-value ratio of the mortgage and energy refit loan cannot exceed 100% and will require a valuation method that has not yet been determined. Participating home owners must have a minimum 660 credit score and the total debt-to-income ratio cannot exceed 45%.

NAHB is seeking input from members as it prepares comments on the proposal, which is due Dec. 27. For information, e-mail Steve Linville at NAHB, or call him at 800-266-8366 x8597.

Workforce Guidelines for Energy Efficiency

The guidelines, which now apply only to single-family homes, address a perceived shortage of skilled workers by developing standards for four specific occupations: energy auditor, retrofit installer/technician, crew chief and inspector/quality assurance professional.

Standard work specifications define the performance requirements for high-quality work and the minimum conditions necessary to achieve the desired outcome. Technical standards encompass current industry standards, regulations and codes developed by government, industry or third-party standards development organizations.

Job task analyses identify and catalog all of the activities a worker performs in a given job, along with the minimum amount of knowledge, skills and abilities a worker needs to perform high-quality energy efficiency retrofit work.

Proposals are expected soon for manufactured housing and multifamily buildings.

While the workforce guidelines are designed to prompt training organizations to meet the minimum standards put forth in the document, training experts said they may not be necessary.

“In the current residential construction slowdown, we don’t believe there is a worker shortage,” said John Shortt, director of  education, training and apprenticeship at the Home Builders Institute (HBI), the workforce development arm of NAHB.

“One aspect missing from the current draft is a job performance gap analysis, which would highlight which skilled trades, with additional training, could become weatherization installer/technicians and crew chiefs. This analysis would prove helpful to residential contractors and skilled workers thinking of changing fields within the industry,” he said.

“HBI has already developed weatherization standards for entry-level and skilled-level installation technicians and uses these standards in our training programs,” Shortt said. HBI will incorporate the remaining components of the Administration’s guidelines once they are final.

Healthy Indoor Environment Protocols  

Established by the EPA, the draft protocols address worker safety concerns as well as the health and safety issues involved in retrofit work with such substances as lead paint, asbestos and radon. 

The protocols are intended to inform private contractors and state and federal energy assistance programs and their clients about the potential environmental and public health risks of retrofit projects in older housing stock. 

NAHB remodelers have advised Congress, the White House and the EPA that such protocols can backfire. For example, many home owners are balking at the costs of renovation under the Renovation, Repair, and Painting (RRP) Rule, the EPA’s lead-based paint regulation that applies to all pre-1978 homes.

The protocols do not establish any new federal regulatory standards, obligations or guidance, nor do they replace any existing federal training and certification requirements.

Additional information on the Administration’s initiatives is available at the White House website. NAHB plans to submit detailed comments on all the components of the program.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

Read Our 2011 NAHB International Builders' Show Preview on Dec. 6

Nation's Building News will publish a special issue on Dec. 6 previewing the upcoming 2011 NAHB International Builders' Show in Orlando, the largest residential and light commercial trade show in the world.

The issue will feature images, features and floor plans of The New American Home; new products on display on the show floor; IBS events, courses and schedules; and more.

IBS will be at the Orange County Convention Center on Jan. 12-15.

For more information — and to register for the show — visit the NAHB International Builders' Show website at www.BuildersShow.com.

NAHB Offices Closed Nov. 22-26 for Thanksgiving; Staff Available Via E-Mail, Phone

The National Association of Home Builders will be closed for Thanksgiving from Nov. 22 through Nov. 26. In order to ensure uninterrupted service to members, the staff will be checking voice and e-mail messages during this time and will respond to your message as soon as possible.

If you are uncertain as to where questions or comments should be directed, you can review the NAHB Subject and Staff Directories at www.nahb.org/contact.  If you prefer, you can forward an e-mail to NAHB at:  boardtopics@nahb.org and someone will get back to you shortly.

 

Nation's Building News Will Not Be Published on Nov. 29

Nation's Building News will not be published on Nov. 29. Publication will resume with the Dec. 6 issue previewing the 2011 NAHB International Builders' Show.

What Fed’s Bond Buy Means for Mortgage Rates

Could mortgage rates go even lower now that the Federal Reserve has announced it will start buying $600 billion in government bonds to stimulate the economy over the coming months? Some think the effects of the Fed’s action were already priced into rates, at least somewhat. “In advance of the announcement, we had a big rate drop, but since the announcement, the market has given back a bit,” said John Walsh, president of Total Mortgage Services, a Milford, Conn.-based mortgage lender. “I don’t see rates really going much lower.” Others think rates have more room to drop, at least a bit, including John Tuccillo, of John Tuccillo and Associates. Exactly how much they’ll drop is less certain. “It depends on how well this experiment works,” he said. “It’s uncharted territory.” Keith Springer, president of Springer Financial Advisors in Sacramento, Calif., expects to see more small-but-steady drops in rates in the next three to six months. The Fed’s bond buying program lasts until the end of June. “There’s a depression in housing,” Springer said. “[Low] demand is keeping rates low and the Fed is going to force rates down even more.” If rates do drop in the near future, it won’t be by much, said A.W. Pickel, president and chief executive of LeaderOne Financial Corp. And an eighth of a point drop, when rates are already in the 4% range, probably won’t make a lot of difference to many borrowers, he said. (www.marketwatch.com)
MarketWatch (11/11/10); Amy Hoak

The Jumbo-Mortgage Comeback

In the second quarter of 2010, jumbo-mortgage lenders originated $18 billion in loans — a 20% increase from the first quarter, but lending still remains far below 2007 levels, according to Inside Mortgage Finance Publications. J.P. Morgan Chase’s home lending unit increased its jumbo-mortgage volume by 146.2% in the first six months of this year over the same period a year earlier, and Wells Fargo by 47.5%, according to Inside Mortgage Finance. “Overall lending for mortgages is up, and jumbos are up more,” says Thomas A. Kelly, a Chase spokesman. “Part of it is that we have the capacity and we are making it available to our customers.” But, he adds, “We are using very disciplined underwriting and we want to make sure that you have an ability to repay the loan.” Many jumbo borrowers are still finding it frustrating to get a loan. Some of them, encountering backlogs and processing delays at larger banks, are turning to smaller ones, such as Investors Bancorp in Short Hills, N.J. Peter Elsby, a senior loan officer at Investors Bancorp’s mortgage unit, which operates in 16 states, says many national banks are taking two to four months to process a mortgage, while his bank can turn one around in 30 to 60 days. “The turnaround time is just way too slow,” he says of the big banks. The total volume of jumbo loans is way down from a few years ago. Jumbo mortgages constituted 5% of total mortgage originations in 2009 and 2010, versus 20% from about 2004 to 2007. Historically, they comprise about 18% of mortgages issued, says Guy Cecala, CEO of Inside Mortgage Finance. Underwriting continues to be strict. Borrowers still need excellent credit profiles and must provide complete documentation and verification of income, unlike several years ago. Downpayments of 20% to 40% typically are required. Tim McLaughlin, senior vice president of capital markets for Weichert Financial Services in Morris Plains, N.J., says he doesn’t expect the traditional jumbo-mortgage market to return to normal until institutions can get back to developing and selling bonds based on the mortgages in the financial markets, instead of simply holding the mortgages in their portfolios. That could take another year or more, McLaughlin says. “We need investors to be confident in the assets they are purchasing,” he says. (www.marketwatch.com)
MarketWatch (11/8/10); M.P. McQueen, The Wall Street Journal

Recipe for a Mortgage Because of a House’s Shape

A history professor and Washington attorney voice their disappointment over their attempts to purchase a “stunning three-bedroom, two-bath contemporary on six acres of wooded land with a stream running through it, a huge deck and a swimming pool. A wall of windows brings the surrounding woods into the house. Strongly built and energy-efficient, it sailed through inspection.” The buyers were pre-qualified for a loan, with two professional incomes, good credit and enough cash for a 20% downpayment. Yet two mortgage companies rejected their application because the home — “a customized modular house of internationally acclaimed design, built in 1989” — is round. “Being ‘unusual’ or ‘unique,’ it was deemed ‘not marketable.’ Despite its evident worth and multiple independent appraisals, the lenders said they could not assign a value to the house because there were no comparable properties. And, with no ‘value,’ there was insufficient collateral for a loan.” In their Washington Post op-ed piece, Ngai and New write: “This is how far the pendulum has swung. Two years ago, banks were approving balloon mortgages for people who made little or no downpayment and whose ability to pay was questionable. Now they have gone beyond being cautious about borrowers’ income and assets to being skittish about even the shape of a house….Lenders are making overly conservative decisions based on fuzzy logic and blinkered, formulaic reasoning. In so doing, they discourage the market from recovery. And the house sits unsold, our dreams denied.” (www.washingtonpost.com)
Washington Post (11/6/10); Mae M. Ngai and John G. New

The Price 20-Somethings Pay to Live in the City

New York City was home to nearly 1.28 million people in their 20s last year, up from 1.21 million in 1980. Earlier generations had their share of hard-luck housing stories, but statistical evidence suggests that today’s new arrivals have a tougher struggle to live well, or even adequately, compared with their counterparts of just a decade ago. Battered by the one-two punch of persistent unemployment and the city’s housing costs, they are squeezing into even smaller spaces and living in neighborhoods once considered dicey and remote. They are doubling, tripling, quadrupling and even quintupling up. According to the New York City Planning Department, 46% of New Yorkers in their 20s who moved to the city from out of state between 2006 and 2008 lived with people to whom they were not related, up from 36% in 2000. Moving back in with parents is fast becoming the new normal. Those who do fly the family nest are paying an ever larger percentage of their often meager income for rent. Between 2006 and 2008, according to the Planning Department, the portion of New Yorkers in their 20s who moved to the city from other states and who paid at least 35% of their income for rent was 42%, up from 39% in 2000. Even young people in high-paying fields like finance have to make sacrifices. There’s the investment banker who can afford only a 450-square-foot studio, and the financial analyst who lives in a third-floor walk-up illegally divided into two rooms. (www.nytimes.com)
New York Times (11/12/10); Constance Rosenblum

Going Gaga and Greyful Dead Represent Latest Paint Trends

Every year at about this time the manufacturers announce the newest paint trends for the year. Benjamin Moore recently announced that from deep smoky wine to wildly pumped-up fuchsia, purple promised to be a prominent color in home décor in 2011. Paint company CIL declared that 2010’s Color of the Year is blue, an airy and opportunistic blue that symbolizes igniting horizons, creating new beginnings, renewed energy and a positive dynamic. It evokes an image of vast skies, breezy ozone freshness and the energy and essentiality of water. A receding color, it will always create a sense of space. Home improvement retailer Rona said this year, given the economic instability spreading across the world, a greater need for calm, comfort and well-being has emerged, which is reflected in our choice of décor and, more particularly, colors. Nevertheless, in trying to remain positive about the future, we continue to pair stylish, vibrant and decisively modern colors with neutral tones. Budget-conscious decorating will combine with individual style to drive 2011 paint color trends, says the Paint Quality Institute, which is owned by The Dow Chemical Company. Its color expert, Debbie Zimmer, says, “There’s no escaping the state of the economy, even for home owners who want to beautify their homes. Rather than diving into large-scale renovation projects, in the coming year consumers will search for inexpensive ways to freshen and update their homes. Many will conclude that painting is the perfect solution.” She says that neutral paint colors “provide versatility and allow home owners to quickly change the look of a room just by adding a few new accessories, without spending time and money to remodel or repaint again. This is the ultimate in practical remodeling, and the time is ripe for it.” The institute suggests that higher paint sheens and metallic finishes are on the radar of consumers to bring a little sparkle to some rooms. “Gloss can subtly create a brighter, more upbeat mood in a home, but at the same time, it adds style and pizzazz,” says Zimmer. (www.realtytimes.com)
Realty Times (11/26/10); Jim Adair

Home Owners Join Forces to Save on Solar Panels

To help average people ease into a greener future, San Francisco’s One Block Off the Grid (1BOG) brings together groups of home owners interested in solar panels. Once it hits a critical mass within a certain city, it negotiates a discounted bulk rate with contractors. “We want people to know that there are pockets of the United States where solar isn’t just for rich environmentalists,” says Dave Llorens, chief executive officer and founder of 1BOG. “We want to create a rocket booster for communities” that can help people pool together and satisfy their conscience while also saving money. So far, 1BOG has overseen 1,000 installations in eight states, and 40,000 people have signed up for information on the group’s website, 1bog.org. The arrangement allows everyone within a community to get a better deal on the systems — usually 15% to 20% off — and the peace of mind that comes with a team of solar experts scrutinizing local options. “There are giant trust issues with home contracting,” says Llorens. Because it’s still an emerging technology, “solar can be much more complex and confusing than other home improvements.” For one thing, it’s hard to pin down what’s an appropriate price. Costs vary dramatically from area to area, driven by utility rates, regional penetration and state rebates. This makes some cities, such as Seattle, a tough sell, he says. The problem is not that Seattle endures gray skies for more than half of the year. Solar panels can soak up sunlight even when the sky is overcast. Germany produces about seven times more megawatts of solar electricity than the U.S., despite being notoriously cloudy and considerably smaller. Instead, energy economics gets in the way. Seattle enjoys cheap power, in part because of hydroelectricity, another clean option. Expensive solar panels don’t make much sense for the average home owner when utility bills remain low. On the other hand, Llorens says, solar installations are good investments in New Jersey, California and other states with relatively expensive energy costs — especially factoring in government incentives. (www.csmonitor.com)
Christian Science Monitor (11/1/10); Chris Gaylord

Draft Proposal to Scale Back Mortgage Interest Deduction Under Heavy Fire

Proposals to scale back on the mortgage interest deduction and other housing tax provisions included in a discussion draft from President Obama's bipartisan Commission on Fiscal Responsibility and Reform released on Nov. 10 have raised serious concerns for the nation’s home builders.

Specifically, the draft report by co-chairs Erskine Bowles and former Senator Alan Simpson lists options to completely eliminate the mortgage interest deduction or limit it to primary residences and mortgages under $500,000.

Other proposals would be adverse for the Low Income Housing Tax Credit (LIHTC), the deduction for real estate taxes for home owners, accelerated depreciation for rental housing, energy tax incentives and tax-exempt housing bonds. In addition, the proposals would result in significantly higher tax rates for capital gains and dividends. 

However, none of these proposals has been formalized, and they are only listed as potential "options." Moreover, the overall plan, which includes many controversial proposals on Social Security, health care, defense spending and other issues, must win support of 14 of the 18 commissioners in order for Congress to consider the package. This is a high hurdle and requires the support of both Republican and Democratic members of the commission.

The commission itself has no actual power to implement its official recommendations and many of the proposals put forth by the chairmen are unlikely to garner bipartisan support.

Reactions to the plan from both sides of the political aisle have varied, ranging from outright opposition to cautious interest.

Nevertheless, this is the first concrete evidence put forth that the commission is taking a close look at the mortgage interest deduction and other housing incentives with an eye to scaling them back. 

On the day that the draft report was released, NAHB immediately posted a reaction statement by Chairman Bob Jones, expressing the association’s deep concerns about the mortgage interest deduction proposals. NAHB also took advantage of social media channels to get the word out to consumers via a new mortgage interest deduction Facebook page at facebook.com/SaveMyMID and a new Twitter feed located at Twitter.com/SaveMyMID.

All NAHB members who are concerned about this critical issue are encouraged to visit these pages and alert their family members and friends to visit them as well. 

Going forward, NAHB stands poised to vigorously defend the mortgage interest deduction and other critical housing and business provisions in the tax code as events unfold.

The NAHB Board of Directors has allocated resources to fight the anticipated assault on the mortgage interest deduction, and an integrated advocacy campaign is being developed in preparation for the fiscal commission's final report to be released in December.  

Along these lines, in the near future NAHB will introduce a new website that will provide essential data on the mortgage interest deduction and its importance to American consumers, and will facilitate member and consumer outreach to legislators.

Following is a summary of the co-chair’s draft proposal:

Tax Reform

  • Proposes to simplify the tax code, broaden the base, lower rates, bring down the deficit and cap revenue at 21% of the gross domestic product (GDP).

  • Abolishes the alternative minimum tax.

  • Would create three individual rates and one corporate rate.

  • Calls upon Congress to enact reform by the end of 2012 or, if there is no reform, to put in place an across-the-board “haircut” for itemized deductions, employer health exclusion and general business credits that would take effect in 2013. The haircut would limit the proportion of deductions and exclusions to around 85% of the current amount, lowering it annually until reform takes place.

Option 1: The Zero Plan

  • Eliminates all tax expenditures (which includes the mortgage interest deduction, property taxes, low-income housing tax credit, etc.), sets aside $80 billion for deficit reduction and treats capital gains and dividends as ordinary income. The plan then lays out multiple options for how much the tax rates would need to increase to pay for numerous popular tax expenditures, including the mortgage interest deduction.

  • Base rates — with all deductions and credits eliminated — are 8%, 14% and 23% for individuals, and 26% for corporations.

  • The proposal then maps out a series of alternatives with certain tax expenditures brought back into the mix.

  • Alternative Option, 80%: If you keep the child tax credit and the earned income tax credit; “reform” the mortgage interest deduction and health and retirement benefits at 80% of their current level (although it is unclear what 80% means); and switch to a territorial system (impacting multi-national corporations), rates would need to increase to: 12%, 20% and 27% for individuals, and 27% for corporations.

  • Alternative Option, 100%: If those same expenditures are kept at current levels (100%), rates would need to be 13%, 21% and 28% for individuals, and 28% for corporations.

Note: under the scenarios in which all tax expenditures are cut or subject to a haircut, this would include other items, such as: the 27.5-year depreciation period for rental housing (which would jump to 39 years), tax-exempt multifamily bonds, mortgage revenue bonds and energy tax incentives, among others.

Option 2: Wyden-Gregg Style Reform

  • Repeal alternative minimum tax.

  • Establish three rates: 15%, 25% and 35%.

  • Triple the standard deduction to $30,000 ($15,000 for individuals).

  • Repeal state and local tax deductions, cafeteria plans and miscellaneous itemized deductions.

  • Limit the mortgage interest deduction to primary residences only, mortgages under $500,000 (eliminating second homes and home equity).

  • Reduce the corporate rate to 26%.

  • Repeal “other” non-specified tax expenditures (could include the LIHTC).

Spending Cuts

  • Spending cuts would start in 2012, including defense and entitlement spending.

  • Reduces spending to 22%, then 21% of GDP (historically we’ve been at 18%, so if you keep spending that high, that impacts the tax debate).

  • $4 trillion in deficit reduction through 2020.

  • Reduces the deficit to 2.2% of GDP by 2015.

  • Reduces debt to 60% of GDP by 2024 and 40% by 2037.

  • Ensures lasting solvency of Social Security.

  • Would reduce discretionary spending in FY2012 to FY2010 levels (some Republicans have already targeted FY2008 levels) and requires a 1% cut in discretionary budget authority every year from FY2013-2015. From FY2015-2020, discretionary budget authority spending would be indexed to inflation.

  • Notable Recommendations:

    • Recommends malpractice reform as part of a permanent “doc fix” (will be a problem for many Democrats).

    • Moves the Transportation Trust Fund to a mandatory program but limits transportation spending to revenue collection — with a prohibition on using general fund money for the trust fund.

    • Increases gas tax by 15 cents beginning in 2013.

    • Calls for comprehensive Social Security reform, including a special minimum benefit for low-income workers and a benefit boost to older retirees at risk of outliving their other retirement resources. The retirement age would be indexed to increases in longevity, benefits for higher income retirees would be reduced, all new state and local employees would be included in the system and the amount of income subjected to Social Security taxes would be increased.

For more information on the President’s deficit commission, e-mail J.P. Delmore at NAHB, or call him at 800-368-5242 x8412.

Amendment Requiring Land Use Plans to Be Approved by Voters Defeated in Florida

Florida’s home builders and business community posted a resounding victory on Election Day when voters overwhelmingly rejected Amendment 4 to the state’s constitution, which would have required a taxpayer-funded referendum for all changes to local government comprehensive land-use plans.

Known as the Florida Hometown Democracy Amendment, the initiative failed by a 67% to 33% margin. It needed approval by 60% of the voters to pass.

Essentially, the amendment would have forced voters to make hundreds of decisions about growth and development plan changes each year, which would have had severe economic consequences for the Sunshine State, according to Doug Buck, director of government affairs for the Florida Home Builders Association.

“The day after this passed, businesses would have stopped expanding or moving to Florida,” he said. “That was the hugely scary part. That’s where the jobs and growth impact would have been immediately felt.”

Cities and counties across the state would have been compelled to spend taxpayer dollars on additional elections, or be forced to wait until the next election to list all of the changes proposed to a comprehensive plan. Elected officials and local planners who have the training and knowledge needed to make decisions regarding complex land-use planning issues would have been stripped of their authority.

For the past four years, members of the Florida HBA and scores of other organizations have been sending the message that this amendment would effectively halt development across the state and force property owners and developers to wait for the voters to decide on land-use plans.

In 2006, the amendment was removed from the ballot through a legal challenge and supporters were unable to muster enough signatures to put it on the ballot in 2008. This year, proponents were successful in bringing the initiative before the state’s voters.

Dogged persistence and a strong grassroots network were the key to defeating Amendment 4, said Buck.

“In November of 2008, when it did not reach the ballot, we didn’t decide, ‘let’s take a break for a year and come back in a year and go at it again.’ We kept raising money, doing outreach, building our grassroots coalitions and educating the public. That’s the key to success.”

The extensive grassroots network consisted of hundreds of organizations ranging from builders, Realtors® and local chambers of commerce, to state and local government entities, unions and local school boards.

“We built one of the best and most extensive grassroots organizations in my experience working on constitutional amendments in Florida elections,” said Buck.

NAHB contributed funds to the cause to help educate the public about the potentially devastating impact that Amendment 4 would have on the state’s economy.

Buck said that informing the public about the disastrous consequences of Amendment 4 was critical because the amendment’s language had a powerful appeal, asking voters if they wanted to directly decide land-use plans in their local communities.

“When you spent time educating people on what that really meant — up to a two-year delay for companies that might want to move to Florida after going through regulatory requirements and then having to wait for the next election, essentially discouraging economic development in the state — they said ‘no.’ Florida is already arguably at a disadvantage because we have so much regulation and voters understood this would result in fewer jobs and higher costs for all of Florida’s working families.”

Other wins for housing on Election Day were scored in Arizona, South Carolina, South Dakota and Utah, where anti-"card check" ballot measures related to unionization efforts were passed, and in Colorado, where builder-opposed measures including Amendment 60, Amendment 61 and Proposition 101 all went down in defeat.

For more information on the state ballot initiatives, e-mail Stephen Gallagher at NAHB, or call him at 800-368-5242 x8319.

SAFE Act Licensing Requirements an Issue for Builders Who Offer Buyers Financing

NAHB is continuing to investigate what if anything can be done to enable builders to self-finance the sale of homes they construct without being subject to onerous loan originator licensing requirements under the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act).

Enacted in July of 2008, the SAFE Act requires builders to obtain a mortgage originator license to provide seller financing.

Contract to deed arrangements — sometimes referred to as “rent to own” — do not fall within the parameters of the SAFE Act requirements. Under these arrangements, the title is not transferred until the entire purchase price has been paid over the course of the contract term, and there is no mortgage involved.

Under the Safe Act, a loan originator is someone who offers to take a mortgage application and receives compensation for that service or gains from it. Even if a seller-financing builder doesn’t charge a fee for the mortgage application, the profit realized from the sale of the home would be considered a business gain and they would therefore be required to adhere to the loan originator licensing requirements.

States have been enacting legislation that includes the SAFE Act licensing requirements, which include criminal background checks, pre-licensure education and testing, continuing education and minimum net worth, security bond or recovery fund provisions.

In states that do not establish licensing systems, mortgage originators will be subject to registration and licensing rules imposed by the Department of Housing and Urban Development.

In the Dec. 15, 2009 Federal Register, HUD published a proposed rule for the registration of mortgage loan originators under the Safe Act, but with more than 5,000 comment letters to review, it has yet to finalize a final rule.

HUD has interpreted the SAFE Act to include licensing exemptions that were not specified in the legislation.

NAHB has been in contact with HUD to explore possible builder exemptions in the final HUD rules.

Signed into law this summer, the Dodd-Frank Wall Street Reform and Consumer Protection Act includes a revised definition of a “mortgage originator.” Under the new law, most individuals and entities are entitled to seller-financing exemptions for the sales of up to three properties a year. However, builders and contractors are specifically excluded from using this exemption.

If it is unsuccessful in its efforts with HUD to resolve the issue of the licensing requirements, NAHB will look at legislative options to address the problem.

For more information, e-mail Kim Moore at NAHB, or call her at 800-368-5242 x8529.


Visit NAHB’s ‘Eye on Housing’ Blog for the Latest Economics and Housing Policy News and Analysis

Housing and economics followers can get the latest economics and housing policy news, analysis, studies, charts and graphs from NAHB’s free new blog, “Eye on Housing,” at http://eyeonhousing.wordpress.com.

Featuring NAHB Chief Economist David Crowe, as well as observations and comments from NAHB economists Bernie Markstein, Paul Emrath, Robert Dietz, Peter Grist and Robert Denk, the blog also includes links to relevant housing stories and information from other news sources.

Blog entries will be updated on a regular basis as the news related to housing occurs. The blog also will replace the content in NAHB’s Eye on the Economy. While subscribers will still receive their regular issues of Eye on the Economy, the e-newsletter will serve primarily as a digest of the content featured on the "Eye on Housing" blog.

Readers can either visit the free blog directly at http://eyeonhousing.wordpress.com, or subscribe to the RSS feed on the blog to have the latest entries sent to them as they are posted.


Want to Know Your State’s Starts Forecast for 2010-2011?

Find out in HousingEconomic.com’s State Starts Forecast (sample).

The forecasts include downloadable Excel tables of total, single-family and multifamily starts by region and state.

To learn more, visit www.housingeconomics.com.

Bank Survey Reports Expectations of Tightened Lending Through 2012

The Federal Reserve’s October 2010 Senior Loan Officer Opinion Survey on Bank Lending Practices reports continued tight lending conditions by banks to businesses and households. The survey is based on responses from 57 domestic banks and 22 U.S. branches of foreign banks.

Despite reporting that some large banks have eased lending terms over the past three months, a special question in the October survey found that lending conditions would remain tight for the foreseeable future. In particular, the majority of respondents involved with residential and commercial real estate lending indicated they would not return to long-term norms of lending practices until after 2012.

On the other hand, 40% of respondents indicated that lending for mortgages and credit cards would return to long-term norms by the end of 2012.

With respect to residential real estate lending, the Fed reported that small fractions of banks reported tightened standards on prime and nontraditional mortgage loans. 

Interestingly, the tightening was mostly reported by smaller banks, with larger banks leaving standards about unchanged. However, both small and large banks reported tightening standards for non-traditional mortgage loans.  All banks reported small declines in demand for loans, likely related to the end of the home buyer tax credit.

The headline result of some easing of lending standards by big banks stands in contrast to recent NAHB survey data, which indicates continued tightening of lending to home builders.


Visit NAHB’s ‘Eye on Housing’ Blog for the Latest Economics and Housing Policy News and Analysis

Housing and economics followers can get the latest economics and housing policy news, analysis, studies, charts and graphs from NAHB’s free new blog, “Eye on Housing,” at http://eyeonhousing.wordpress.com.

Featuring NAHB Chief Economist David Crowe, as well as observations and comments from NAHB economists Bernie Markstein, Paul Emrath, Robert Dietz, Peter Grist and Robert Denk, the blog also includes links to relevant housing stories and information from other news sources.

Blog entries will be updated on a regular basis as the news related to housing occurs. The blog also will replace the content in NAHB’s Eye on the Economy. While subscribers will still receive their regular issues of Eye on the Economy, the e-newsletter will serve primarily as a digest of the content featured on the "Eye on Housing" blog.

Readers can either visit the free blog directly at http://eyeonhousing.wordpress.com, or subscribe to the RSS feed on the blog to have the latest entries sent to them as they are posted.


Want to Know Your State’s Starts Forecast for 2010-2011?

Find out in HousingEconomic.com’s State Starts Forecast (sample).

The forecasts include downloadable Excel tables of total, single-family and multifamily starts by region and state.

To learn more, visit www.housingeconomics.com.

Anti-Mortgage Interest Deduction Remarks Spark Angry Response in Las Vegas Press

Home owners around the country continue to respond negatively to news media reports containing attacks on the mortgage interest tax deduction.

In a Nov. 1 letter to the editor, Vivian Scott, a home owner in Henderson, Nev., takes exception to an Oct. 27 story in the Las Vegas Review-Journal reporting on a lecturer at the University of Nevada who said that lower house prices may be here to stay and it’s time for the nation to reinvest in its existing housing stock.

“Alan Mallach, senior fellow for the Brookings Metropolitan Policy Program, tells us that the interest deduction is a ‘bad thing’ and does not encourage homeownership,” writes Scott. “Huh? What planet does Mr. Mallach live on?”

“I know I speak for many other home owners when I say that part of my budget calculation when buying my home was the mortgage interest deduction,” she says. “If the government takes that deduction away, it will blow a big hole in my household budgets. Not only that, but it will cause even more devaluation in the already cratered housing market.

“Unfortunately, most of us home owners are too busy working and paying taxes to find time to counteract the ‘spin’ that is being fed to us, and we are not in a position to do much about it anyway. I can hope only that some smart economist will do the math and present a cogent argument to scrap this bad idea.

“We need somebody in power to champion the case for home owners,” she concludes. “We need to kill this idea now, before it takes on a life of its own. Otherwise, the government will proceed to put the final nail in the housing market coffin — and in home owners.”

In the Review-Journal story, reported by Hubble Smith, Mallach is quoted as saying that the mortgage interest tax deduction pushes up the price of housing. “For the lower-income owners who typically don’t get the deduction, they’re paying for those who do.”

In the story Mallach adds that using the $5 billion a year in mortgage tax deductions to repair and rehabilitate existing homes would make a far bigger difference for people who need housing.


Visit NAHB’s ‘Eye on Housing’ Blog for the Latest Economics and Housing Policy News and Analysis

Housing and economics followers can get the latest economics and housing policy news, analysis, studies, charts and graphs from NAHB’s free new blog, “Eye on Housing,” at http://eyeonhousing.wordpress.com.

Featuring NAHB Chief Economist David Crowe, as well as observations and comments from NAHB economists Bernie Markstein, Paul Emrath, Robert Dietz, Peter Grist and Robert Denk, the blog also includes links to relevant housing stories and information from other news sources.

Blog entries will be updated on a regular basis as the news related to housing occurs. The blog also will replace the content in NAHB’s Eye on the Economy. While subscribers will still receive their regular issues of Eye on the Economy, the e-newsletter will serve primarily as a digest of the content featured on the "Eye on Housing" blog.

Readers can either visit the free blog directly at http://eyeonhousing.wordpress.com, or subscribe to the RSS feed on the blog to have the latest entries sent to them as they are posted.


Want to Know Your State’s Starts Forecast for 2010-2011?

Find out in HousingEconomic.com’s State Starts Forecast (sample).

The forecasts include downloadable Excel tables of total, single-family and multifamily starts by region and state.

To learn more, visit www.housingeconomics.com.

Useful Links to Monitor Economic and Housing Trends

The 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.


Visit NAHB’s ‘Eye on Housing’ Blog for the Latest Economics and Housing Policy News and Analysis

Housing and economics followers can get the latest economics and housing policy news, analysis, studies, charts and graphs from NAHB’s free new blog, “Eye on Housing,” at http://eyeonhousing.wordpress.com.

Featuring NAHB Chief Economist David Crowe, as well as observations and comments from NAHB economists Bernie Markstein, Paul Emrath, Robert Dietz, Peter Grist and Robert Denk, the blog also includes links to relevant housing stories and information from other news sources.

Blog entries will be updated on a regular basis as the news related to housing occurs. The blog also will replace the content in NAHB’s Eye on the Economy. While subscribers will still receive their regular issues of Eye on the Economy, the e-newsletter will serve primarily as a digest of the content featured on the "Eye on Housing" blog.

Readers can either visit the free blog directly at http://eyeonhousing.wordpress.com, or subscribe to the RSS feed on the blog to have the latest entries sent to them as they are posted.


Want to Know Your State’s Starts Forecast for 2010-2011?

Find out in HousingEconomic.com’s State Starts Forecast (sample).

The forecasts include downloadable Excel tables of total, single-family and multifamily starts by region and state.

To learn more, visit www.housingeconomics.com.

Private Builders Told They Should Be Looking Beyond Banks for the Financing They Need

With commercial banks unlikely to start making new acquisition, development and construction (AD&C) loans anytime soon, builders should be focusing on working out what remains on their books and looking for investors to help them finance new and existing housing projects, according to panelists participating in a Nov. 9 NAHB webinar.

Marty Mitchell, vice CEO and vice president of land and business development for Mitchell & Best Homes, which is based in the Washington, D.C. and Baltimore metropolitan area, said he has spent most of his time over the past three years on workouts and negotiations with lenders.

Since late 2006, credit has been tightened across the entire spectrum of AD&C lending, Mitchell said, and its availability “for private builders is at the lowest level ever seen.” Recently, the trend toward higher credit standards has started to slow, he added, but that only means that fewer banks are tightening, not that banks are actually starting to make AD&C loans.

Federal loan officers have been reporting significantly more loosening than builders have been reporting in NAHB surveys, and that may indicate a disconnect between banking regulators in Washington and examiners in the field, he said.

Commercial banks have been the most significant source of financing for home builders and developers, but today “most private builders are being shut out from bank credit,” Mitchell said, with the exception of the few remaining builders who have very strong balance sheets.

Builders who have existing loans are unlikely to be able to obtain new ones, he said, largely because federal bank regulatory guidelines on how much banks should be lending for real estate suggest they should only have active construction loans in an amount equal to their ca[pital and three times their capital in all kinds of real estate loans. The going can get tough for banks that exceed these limits, especially for the smaller community banks on which builders rely the most.

The bank regulators also aren’t looking at the housing market on a local and regional basis, Mitchell complained. What they aren’t seeing is that “there are many markets around the country where the inventories are coming down” and there are only small supplies of new homes. In his own market, he said, “when a spec is available, it is very competitive against the existing market.”

In addition, credit is exceedingly scarce because banks are failing to sell loans at appropriate discounts to free up capital for new loans. Making the problem even worse, inadequate appraisals that are coming up with ultra-conservative valuations because of a difficulty in getting appropriate comparables and the use of distressed sales as comps, is further undermining the willingness of banks to extend credit to builders.

(For NAHB resources on what builders should be doing to improve their appraisals, go to www.nahb.org/appraisalsprogram.)

Difficult Lending Conditions to Linger

Many in the industry who have survived past downturns believe the AD&C market will have to come back soon to appease their shareholders, he said. “Unfortunately, for the foreseeable future, banks don’t have to lend to make money.” Instead, they can borrow for almost nothing from depositors and the government and reinvest those funds to get a 3% to 4% return.

Mitchell predicted that conditions for AD&C borrowers will remain difficult for at least the next two years, may not ease for at least five years and may “not return to what was considered normal over the past 20 years.”

Consequently, “almost all builders will have no choice but to turn to investors of some kind to work through existing loans and get new ones,” he said. “The deal may need to be almost all equity to get things done.”

For the near term at least, reaching new sources of capital will entail “more sophisticated pro forma’s and analysis for the project” to show to investors projections on the internal rate of return, loan-to-value ratios throughout the project and the maximum loan amount that will be needed, and when, he said.

Any multi-lot projects will require a market study from a reliable outside source, he said, “and you will need to complete your own competitive market analysis to know what features you need to include in your house.”

Builders need to provide lenders with loan packages on the proposed project that are “as easy as possible to understand,” he said, and that can be separated into parts for easy distribution. “With a limited amount of financing, make it as easy as possible to move the request forward,” Mitchell advised.

Community Banks in Uncharted Waters

While times are tough for the nation’s community banks, Timothy K. Zimmerman, president and CEO for Standard Bank, said that they will be returning to a significant role in providing financing for home builders, who are “key” customers for them in the local community.

“Community banks are in uncharted waters,” he said, “with almost every AD&C loan in our portfolios under severe stress and intense regulatory scrutiny.”

Zimmerman was less than enthusiastic about current conditions in the housing market, noting that builders have been able to attract relatively few buyers even after slashing prices and that many markets are saturated with developed but unsold lots.

As AD&C borrowers who are having “long holding periods with essentially no cash flow,” he said, “builders are being pushed out of relationships with bigger banks.” Lines of credit are not being renewed, loans are being called and additional collateral is being requested.

“Community banks want to have a customer for life because they know the builder’s reputation and history,” he said. “But taking on a new project will generate almost immediate criticism from the regulators, so why take on that level of risk at this time?”

Zimmerman said that banks have been seeing some slowing in such negative trends as high inventories and declining prices, “but not a total reversal” on existing lots and models, which is what must occur before they will begin financing anything new.

“We are aware that we are in this together with our builder customers,” he said. “While waiting for conditions to improve, all parties must be open and honest with each other so that we can work with the facts no matter how bad they are.”

Zimmerman added that community banks do now want to foreclose because once they do, “the value falls to new lows and there is blood in the water.” Instead, banks want to keep the builders engaged, so they can rely upon their expertise to work through problems “and keep things going until the market starts to absorb the inventory.”

With regulators listing high AD&C lending as a top reason for bank failure, looking first to appraisals using foreclosures and fire sales for primary comparison and pushing values far below loan balances due, banks are looking for new marketing plans, more equity in the deal and alternative payment sources.

Live to Build Another Day

“Bank examinations will become more stringent over the next two years and it will be tougher to get credit,” predicted D. Rand Roan, principal and founding member of Apogee Partners, LLC.

With prospects not generally favorable for a return to normal anytime soon, builders should be concentrating on restructuring, he said, and focus on reducing their debt and removing personal guaranties as they move forward on workouts with their lenders.

Roan said that his company has been able to successfully work with home builder clients to structure a transaction so that they “live to build another day.”

“Many home builders face projects overburdened with debt” and on which they have made personal guaranties, he said. “Most don’t have the balance sheet or financial legs to pay the note deficiency nor the additional assets to satisfy the new loan-to-value requirements from the bank on existing credit.”

For these builders to stay in the business, third-party capital for restructuring may be required, he said. In return, the investors may want the entire project or a substantial equity position.

“Don’t get too enamored with your projects,” he advised, “and be open to investor and bank ideas.”

The loan workout environment varies by bank, he said, but “banks are starting to realize that they have to do something with nonperforming assets.” Every restructuring or loan workout needs to be looked at based on its own merits, he added.

Roan said that his company has used a number of investor groups to assist in debt restructures, and they have then migrated into other projects through joint ventures, land acquisition entities and private equity groups.

“Private equity may be the only alternative,” he said, and equity partners will want to be paid in the range of 20% to 35%.

Reporting requirements for these investors are stringent. “Projects are going to be scrutinized and only the best will survive,” he said.

Rand said that private investors who have not previously had experience in real estate are beginning to appear in the marketplace. “There is more and more interest on the investor side,” he said. “It’s just a matter of putting the reports and analysis together and getting them to the right people.”

Introduced at last year’s NAHB International Builder’s Show, returning to this year’s show in January and supported by resources on NAHB’s website, the Partnership Pavilion can help facilitate the process of lining up builders with equity partners.

Presented by NAHB’s Business Management and Information Technology Committee and Builder magazine for free to association members, the webinar was the second in a four-part series, “New Horizons Webinars: Setting a Course for Success in the New Market.”

NAHB members can find AD&C resources at www.nahb.org/adcresources.

Sign Up for Spokesperson Training Sessions at the Builders’ Show, Slots Filling Fast

Space is limited and filling up fast for the NAHB Spokesperson Training sessions at the upcoming 2011 International Builders’ Show in Orlando in January, so attendees are urged to register online now.

Members can register securely on the NAHB website with a credit card for one or both of the Spokesperson Training sessions — Interview Skills and Presentation Skills.  

Interview Skills teaches NAHB members how to give clear, concise answers while in a high-pressure, spur-of-the moment interview. The training also helps participants master strategies for broadcast and print interviews, including message development.

Members attending the Presentation Skills session will learn how to confidently prepare and deliver dynamic presentations to any audience. The session focuses on how to organize and deliver a speech or presentation, with accompanying question and answer sessions.

International Builders’ Show Session Schedules:

  • Interview Skills — Monday, Jan. 11
  • Interview Skills — Tuesday, Jan. 12
  • Presentation Skills — Wednesday, Jan. 13

Each one-day session is from 9:00 a.m.-4:00 p.m. Registration is limited to 12 participants.

The fee for each session is $495 per person.

For more information and to register, click here; or e-mail Brooke Fishel at NAHB, or call her at 800-368-5242 x8061.

IBS Pre-Show Courses Offer Skills and Continuing Education Credit

More than 20 pre-show courses will be offered at the upcoming NAHB International Builders’ Show (IBS) in Orlando to provide attendees with business management tools, green building and aging-in-place remodeling techniques, sales and marketing methods and other skills to help boost their business.

Primarily offered on Jan. 8-11 with some selections available on Jan. 12 and 14, the intensive one- or two-day programs are designed to help industry professionals increase their business skills, technical knowledge and marketability.

The courses also will enable NAHB members to work on their NAHB designations, earn continuing education credit and acquire focused, in-depth knowledge in their specific areas of interest.

Some frequently asked questions about IBS pre-show courses:

How are pre-show courses different from IBS education sessions?
NAHB Education's pre-show courses are one- or two-day intensive sessions that provide specific, in-depth training in a number of business and technical topics. Attendees can learn about running their offices more efficiently, negotiating effectively, merchandising, removing lead paint and more.

What will attendees gain?
Attendees can gain confidence, skills, new contacts, up-to-the-minute knowledge about the latest housing industry topic, answers to questions about their specific needs and scenarios, enhanced marketability and credit towards NAHB professional designations.

Who teaches the courses?
NAHB Education courses are taught by successful and highly-qualified industry veterans. Instructors undergo careful evaluation and training before they can teach NAHB courses.

Who attends?
Building industry professionals from across the country take IBS pre-show courses. Attendees swap war stories along with tales of success, hear about what’s going on in other regions and learn from each other’s mistakes and triumphs.

Are classroom and hands-on training required in order to receive an EPA Lead Renovation, Repair and Painting Certificate?
Both classroom and hands-on training are required to receive the U.S. Environmental Protection Agency certificate and both will be offered prior to IBS. In lieu of the classroom training, show attendees can take an online version of the course. For a list of available online training, visit www.nahb.org/onlineleadtraining.

How do I know which courses to take?
Visit www.nahb.org/designations to determine if any of NAHB’s 15 professional designations are right for you. The individual designation webpages will list which courses you need to complete to earn each designation.

If you’re not interested in a designation, go to www.buildersshow.com/preshow to see descriptions of all the courses offered at IBS.

If you’ve taken courses in the past but aren’t sure which ones to take next, e-mail designations@nahb.org, or call The Professional Designation Help Line at 800-368-5242 x8154 for assistance.

Are the courses included in the IBS registration fees?
Pre-show course fees are in addition to IBS registration. Visit www.buildersshow.com/searcheducation for a list of courses and their fees.

Course attendance is limited to 50 students per course and some courses sell out prior to the show, so register in advance.

IBS 2011 Pre-show courses

Assessment Reviews

Training

EPA Lead Renovation, Repair and Painting Training
Classroom and hands-on training for lead renovation, repair and painting will be offered prior to IBS. Classroom coursework, or its online equivalent, and hands-on training are required to receive a certificate needed to work in homes built before 1978 where there is lead-based paint.

  • Classroom training — Jan. 10
    For online training available prior to the show, visit www.nahb.org/onlineleadtraining for a list of available online training; hands-on training is still required.

  • Hands-on training — Jan. 11, offered at four times

    For more information and a full schedule of EPA lead paint training at IBS, visit www.buildersshow.com/leadpaint.

For more information about IBS pre-show courses, visit www.buildersshow.com/preshow.

Builders’ Tip: How to Straighten the Edges of Crooked Boards With a Level and Table Saw


Click for larger image.

Recently, I found myself on a job site with several crooked boards for a job that required boards with ruler-straight edges.

Unfortunately, I didn't have a  jointer, so I had to devise another way to straighten the stock.

As shown in the accompanying drawing, I created a jig and used my table saw and 6-foot level to get the job done.

Here’s how I did it:

  • I fashioned a couple of wooden blocks to fit into the level’s finger holes.

  • As shown in the illustration, I  shaped the tops of the blocks to fit snugly into the finger holes — locking the blocks in place.

  • I then put a brad through each block to pin the level to the stock.

To use this setup, I placed the level atop the crooked piece of stock so that the level overhangs the concave edge.

With the level bearing against the saw’s fence, I trimmed the exposed, crooked edge of the wood.

Once that edge was trimmed and straight, I easily trimmed the opposite edge, as needed.

— John H. Card Liberty Center, Ohio

Tips & Techniques provided by Fine Homebuilding.
©2010 The Taunton Press

To contact Fine Homebuilding, e-mail Christina Glennon.


Get NAHB BuilderBooks 2010 Virtual Publications Catalog Online

The NAHB 2010 Publications Catalog from NAHB BuilderBooks is available online.

Presented in a virtual format as part of the NAHB BuilderBooks effort to go green and streamline delivery, the catalog includes publications and products to help building industry professionals ramp up for a successful year as the industry and the economy begin to recover.

The materials in the catalog, written by industry leaders in various fields of residential construction, feature publications and products about accounting, estimating, business management, green building, sales and marketing, safety, construction codes, 50+ housing, multifamily housing, construction management remodeling and more.

Some of the newest publications in the catalog include “Social Media for Home Builders,” the “National Green Building Standard Commentary” and “Paper Trail: Systems and Forms for a Well-Run Remodeling Company, Second Edition.”

To view the virtual catalog, click here.

Active Adult Builders Indicate Business Still Hasn’t Turned the Corner

Third-quarter results from the NAHB 55+ Housing Market Index found low levels of builder confidence in the mature-market sector, with almost all of its component indexes down from a year earlier.

"While we have anecdotal information that some local 55+ markets are beginning to rebound, the third-quarter data show that national conditions for this sector have not yet turned the corner," said David Crowe, NAHB’s chief economist.

"Real improvement won't happen until we have better employment numbers, and consumers who are more confident of keeping their jobs,” Crowe said. “Those consumers will buy the homes of the 55+ age cohort, so that the mature buyers will be able to move to more appropriate housing."    

The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market on a scale of one to 100. A number greater than 50 indicates that more builders view conditions as good than poor.

The index was at 15 in this year’s second quarter, five points below its level for the same quarter of 2009. Present sales were down four points from a year earlier, at 15; expected sales (six months into the future) fell six points, to 24; and traffic of prospective buyers skidded seven points, to 11.

The 55+ multifamily condo HMI also showed continued weakness, with an index level of 10, down from the previous year's 13. All three index components — current sales, expected sales and buyer traffic — declined during this period.

Multifamily rentals remain the only relatively bright spot for active adult housing. While present production was quite low and not expected to grow significantly in the next six months — with index levels for both in the low teens — present demand registered 28 and expected demand was 32.

Demand levels have been consistently in the high 20s and low 30s for the most recent four quarters, suggesting an imbalance between demand and the actual amount of rental apartments that are being produced.

For the full 55+ HMI tables, go to www.nahb.org/55HMI.

Pillars Winner Allegro Apartments Creates Mass Appeal Through Urban-Chic Marketing

A multilayered marketing approach focusing on urban chic that combined conventional print and online advertising with grassroots marketing, public relations outreach, live entertainment, local business partnerships and an interactive website earned Allegro Apartments the 2010 Pillars of the Industry Award for its outstanding overall leasing campaign.

“The campaign was effective because the elements all worked together to create the fantasy world of Allegro,” said Chris Churmusi, marketing research specialist for Kettler Management, which developed Allegro in the up-and-coming Washington, D.C., neighborhood of Columbia Heights.

“From the cabaret event to the mixed drink contest at local bars and the distinctive advertising campaign — all worked together to create the Allegro brand,” Churmusi said.

Kettler initially developed Allegro as a condominium in 2009 before converting into luxury-apartment rentals. Located in the heart of Columbia Heights, with its abundance of restaurants, bars and retail shopping, the marketing team created a campaign targeting young professionals who work hard during the day and enjoy the D.C. nightlife in the evenings.

The award-winning campaign helped Allegro earn an 86% lease-up and 75% occupancy rate in its first year.

Each element of the campaign added to its synergy. The campaign was launched at a local club with an event that featured a well-known Broadway star and attracted hundreds of area prospects.

That was followed by the community’s grand opening “Allegrotini” cocktail competition — an atypical event involving neighborhood bars and restaurants. Dubbed “Desire” and held at the Allegro, the competition drew more than 600 attendees and earned media coverage on area blogs and city publications.

The campaign’s print materials — with their sleek dark finish — were created to appeal to a stylish and contemporary audience.

The community brochure promoted the Allegro interactive website — where prospective renters could view detailed floor plans, arrange furniture, view the location of available apartments on each floor, and start the leasing process right from their laptops.

Allegro’s marketing campaign showcased the residents’ instant access to the panache of city life, while offering a place to relax in luxury, as well as the flexibility that renting provides.

The Pillars of the Industry Awards — which showcase future trends and innovation in the industry — honor superior achievement in apartment and condominium development, design, marketing and management. Presented in 27 categories, Pillars, by NAHB Multifamily, is recognized as the industry’s most prestigious awards program.

Winners in the marketing categories were announced last month during a ceremony on the Pillars Awards interactive website — www.nahb.org/pillarsawards.

Winners in the Builder and Firm categories will be announced on the site on Dec. 7 at 2:00 p.m. EST. Visitors to the site will be given login instructions to the virtual awards ceremony.

For more information, contact Erin Grant at NAHB, or call her at 800-368-5242 x8557.

 

EPA Certifies 511,000 Lead-Safe Renovators, Launches Consumer Awareness Magazine Ads

After a somewhat slow start because of a lack of certified trainers and training facilities, the U.S. Environmental Protection Agency has now certified more than 511,000 trained lead-safe renovators and 64,000 remodeling firms to date, putting them in compliance with the Lead: Renovation, Repair, and Painting rule enacted earlier this year, agency officials told NAHB during a meeting at the National Housing Center on Nov.  4.

The agency also reported that it has stepped up its campaign to inform consumers of the need to use certified remodelers when remodeling homes built before 1978.

Until initiating a two-month advertising campaign in October involving more than 200 magazines including Parents, Parenting, Forbes and Money, the EPA primarily relied upon radio-based public service announcements and consumer-oriented fact sheets to inform consumers about the need to use certified professionals.

Under the lead paint rule, remodelers, window installers and other contractors who work in pre-1978 housing and child-occupied facilities must be certified and use lead-safe work practices unless those homes are tested and found to be free of any lead paint. They also must conduct consumer education and verify the clean-up on projects that disturb lead paint in these buildings.

To date, 410 EPA-approved training providers have taught about 23,000 lead training courses. About half the trainers can travel to home builders associations, conferences or other opportunities to teach remodelers the necessary coursework.

Another 27 trainers have been approved to provide the required six hours of classroom training online. Two hours of hands-on training are also required for certification.

EPA officials also noted that Alabama, Georgia, Washington and the District of Columbia are in the process of adopting their own lead paint rule and becoming authorized by the EPA. They will join  Wisconsin, Iowa, North Carolina, Mississippi, Kansas, Rhode Island, Utah, Oregon and Massachusetts, which have had their programs authorized by the EPA.

Test Kits Continue to Fall Short

EPA officials reiterated that the agency had no plans to discontinue using its inaccurate lead paint test kits. The two EPA-recognized test kits — D-Lead and LeadCheck — are too sensitive and test positive for lead below the federal lead hazard level of .05 mcg.

Since the test kits were first approved, NAHB has expressed concern that they can raise the cost of renovation and repair for home owners because remodelers will employ lead-safe work practices unnecessarily when the kit has found lead at levels less than those deemed actionable under federal health standards.

Home Owners Ignore Lead Paint Rule

During the meeting, NAHB raised remodelers’ concerns that many consumers — especially those home owners without children living in their household — were ignoring the lead paint rule and hiring uncertified contractors for their remodeling and renovation needs.

EPA officials acknowledged the problem and indicated that the agency will  explore new consumer messaging to emphasize the need and legal requirement to follow the rule.

For samples of the EPA’s lead rule print ads, public service announcements and fact sheets, visit the EPA Lead-Safe Certification Program Outreach to Consumers webpage. For general EPA information on the lead paint rule, visit www.epa.gov/getleadsafe.

For more information about the lead rule, visit www.nahb.org/leadpaint; or e-mail Matt Watkins at NAHB, or call him at 800-368-5242 x8327.

 

Nov. 17: Webinar on How Technologies Can Help 50+ Buyers Live Safer, Independent Lives

A webinar on Wednesday, Nov. 17, will examine how Internet-based home technologies can help fill a growing need among 50+ consumers — who are using the Internet more now than ever — to lead safer and more independent lifestyles.

Presented by the 50+ Housing Council, attendees of “Digitizing Homes for the 50+ Consumer: Improving Lifestyles Through Technology” will learn about the products and technologies that 50+ home buyers are willing to purchase to improve their lifestyles in today’s era of tightening budgets.

Attendees also will learn how to incorporate these technology-based features to meet their buyers' current and future needs as well as how to position their company to be a leader in improving 50+ consumers’ lives through technology.

The webinar will begin at 2:00 p.m. EST.

Panelists include Steve Koenig, of the Consumer Electronics Association; Laura Mitchell, of Grand Care Systems; and Harry Wang, of Park Associates. Ric Johnson, of Right@HomeTechnologies, Ltd., will moderate the webinar.

Sponsored by Whirlpool, the webinar is free to NAHB 50+ Housing Council members, $69 for NAHB members and $100 for non-members.

Webinar participants can receive one hour of continuing education credit for CAASH and other NAHB professional designations.

To Register

Click here to register.

For more information, visit NAHB 50+ E-learning; or e-mail Jeff Jenkins at NAHB, or call him at 800-368-5242 x8292.

 

Dec. 8: Free Webinar to Provide the Facts on Density, Development and Climate Change

During the past few years, global climate change has emerged as a hot-button issue as Congress, federal, state and local governments, and private interest groups explore ways to combat the presumed effects of various activities on greenhouse gas emissions.

For the building industry, this is translating into increased requirements for energy efficiency, reductions in vehicle miles traveled and other measures that may affect where and how development may occur.

The latest webinar in NAHB’s Land Development Committee e-learning series, “Nothing But the Facts About Climate Change, Density and Development,” will highlight how California’s landmark statewide legislation is playing out so far and detail the compelling results of NAHB’s extensive research program on climate change, which is aimed at bringing better science and data to the table in policy discussions on these issues.

The webinar is free and will begin at 2:00 p.m. EST on Tuesday, Dec. 8.

To Register

To register, click here.

For more information, visit www.nahb.org/climatechangewebinar; or e-mail Jaclyn Toole at NAHB, or call her at 800-368-5242 x8469.


‘Land Development’ Available at NAHB BuilderBooks

“Land Development,” available from NAHB BuilderBooks, is an indispensable resource for understanding the essentials of residential land development.

Land Development provides a comprehensive understanding of the interrelated factors that contribute to a successful land development project — including market study and analysis, financing, site selection analysis, environmental regulations, developing a master plan concept, storm water management, site engineering, residential streets and selecting housing types.

To view or purchase this publication online, click here, or call 800-223-2665.

Dec. 16: Free Webinar to Explore Marketing Tools, Trends in Today’s Business Environment

With more buyers turning to the Internet when searching for a new or existing home, and more younger buyers using social media resources to communicate their preferences and find out what’s hot when staying abreast of new developments, NAHB’s Business Management & Information Technology Committee and Builder magazine are presenting a free webinar that will explore the latest marketing channels and opportunities in today’s market.

During the upcoming webinar, “New Horizons: Marketing in a New Business Environment,” attendees will also learn how to effectively utilize social media with existing marketing tools to reach the younger demographic that is becoming an increasingly important sector of the market.

The webinar will be held 2:00-3:00 p.m. EST on Thursday, Dec. 16.

Panelists include Carol Flammer, MIRM, CAPS, president, Flammer Relations, Inc.; David Owen, president, Boone Homes, Inc.; and Marie Still, marketing and communications director, MRIS.

The webinar is part of the four-part series, “New Horizons Webinars: Setting a Course for Success in the New Market,” that began in September.

To Register

For more information and to register, visit www.nahb.org/newhorizons; e-mail newhorizons@nahb.org, or call Agustín Cruz at NAHB at 800-368-5242 x8472.

The New Horizons webinar series is sponsored by Simonton Windows and Therma-Tru Doors.

Costly Energy Efficiency Upgrades Added to ICC’s 2012 Energy Code

Greatly increased energy efficiency requirements for the 2012 Edition of the International Energy Conservation Code (IECC) were approved at the International Code Council’s Final Action Hearings, held in Charlotte, N.C., on Oct 25-31. 

This new code edition will require home builders to more tightly seal new homes and their heating and cooling ducts, install highly energy-efficient windows, greatly increase the insulation installed in the building envelope and perform expensive tests to verify compliance.

NAHB had advocated for high-efficiency equipment trade-offs to allow home builders and consumers more flexibility in meeting the more stringent energy requirements. The trade-off provision was eliminated in the 2009 IECC and is not in the new code.

“These changes will result in significant added cost for a new home buyer, who will have little hope of a reasonable and timely payback in energy savings,” said NAHB Construction, Codes and Standards Chair Don Pratt, a home builder in Auburn Hills, Mich.

The outcome was the direct result of a well-funded push for state energy officials to attend the hearings at a time when many other code officials were unable to attend because of state and local budget cuts.

In a new policy established after its 2009 code development cycle, ICC was seeking to prevent third parties — such as manufacturers or advocacy groups — from paying travel expenses for the governmental member voting representatives to attend code hearings.

But at the Final Action Hearings, the National Association of State Energy Officials (NASEO) and several groups that receive federal funding to promote energy efficiency codes took advantage of a loophole in that policy to fill the hearing room with officials from state energy offices.  

With this one-sided representation, the hearing results were preordained in favor of increases in required energy efficiency no matter how high the cost or low the benefit to future home buyers.

While the Department of Energy submitted proposals seeking to increase the energy efficiency in new housing by a minimum of 30% above the 2006 IECC, the approved changes will significantly exceed that goal. 

Additionally, the energy efficiency provisions in Chapter 11 of the International Residential Code will be replaced by those approved for the 2012 IECC.

The significant changes include:

  • Visual inspection to verify the tightness of the building envelope will no longer be permitted. Blower door testing will be required for all homes, including multifamily.

  • The acceptance criteria for blower door tests will be reduced from seven air changes per hour (ACH) to five ACH in Climate Zones 1 and 2 and to three ACH in Climate Zones 3 through 8. These reductions will mean significantly more stringent requirements for air-sealing homes — from San Antonio to Seattle, Savannah to Concord and all points in between.

  • For duct tightness testing, the permissible leakage will be reduced from 12 to 4 cfm per 100 sq. ft. of conditioned floor area for duct systems not located entirely in conditioned space.

  • Plenums will no longer be permitted to be used for air supply or return. All HVAC conveyance systems must be fully ducted.

  • Insulation requirements for walls will be increased from R-13 to R-20 in Climate Zones 3 and 4 and to R-20 cavity insulation plus R-5 foam exterior insulation in Climate Zones 6 through 8. Previously, only R-20 cavity insulation was required in Zone 6 and only R-21 cavity insulation in Zones 7 and 8.

  • Insulation in attics will increase from R-30 to R-38 for Climate Zones 2 and 3 and from R-38 to R-49 in Climate Zones 4 and 5.

  • Insulation requirements in basements and crawl spaces for Climate Zone 5 will increase from R-10 to R-15.

  • The required Solar Heat Gain Coefficient for windows in Climate Zones 1 through 4 will be more stringent, which will also reduce the amount of daylight that can pass through the window. The U-factor for windows in Climate Zones 2 through 8 will also be more stringent.

  • Depending on their diameter, hot water pipes exceeding a prescribed length will require a minimum of R-3 insulation.

  • Compact fluorescent lights will be required in 75% or more of all permanent fixtures, up from 50% previously.

For more information, e-mail Larry Brown at NAHB, or call him at 800-368-5242 x8565.

Work Begins on Updating National Green Building Standard for 2012 Edition

The NAHB Research Center is preparing to start work on the 2012 edition of the National Green Building Standard (NGBS).

Originally developed in 2007-2008 by NAHB and the International Code Council, the 2008 National Green Building Standard was approved by the American National Standards Institute in January 2009, making it the first point-based rating system for green residential construction, remodeling and land development to be approved by ANSI.

As an ANSI-approved standard, the document is subject to periodic updates so that advances in building codes, technology and other developments can be incorporated into it.

“Green building has matured significantly in the three years since the standard was first developed,” said NAHB Green Building Subcommittee Chair Eric Borsting. “It’s time for the next iteration of the National Green Building Standard.”

The NAHB Research Center, an accredited ANSI standards developer, will again act as the secretariat, or administrator, of the standard development process.

Once completed, the updated standard will again be submitted to ANSI for approval. The development of the standard must follow an ANSI-approved process.

First, the NAHB Research Center issued its call for committee members on Nov. 15. The consensus committee that develops the standard will include government officials, advocacy groups, home builders, product manufacturers and other affected industry stakeholders in residential construction.

Those who would like to serve on the consensus committee must submit their applications online by Jan. 4, 2011.

The committee members and other interested parties will be assigned to task groups, each specializing in a different area of the standard — such as energy efficiency, indoor environmental quality or lot and site development.

At the same time, the NAHB Research Center will announce its call for proposed changes to the 2008 edition of the standard. Individuals and groups can submit their proposals online by Jan. 31, 2011.

Task groups will review the proposed changes and develop possible committee proposals early in 2011.

In addition, the entire consensus committee will hold two public hearings at the National Housing Center in 2011.

At the first hearing, members will review all proposed changes to the standard and decide the formal committee action on each of them. After the balloting on the committee actions has been completed, a draft of the 2012 standard will be released for public comment.

At the second hearing, consensus committee members will consider, discuss and then take formal action on the public comments submitted on the draft standard.

Once the committee has completed its work, the newly updated National Green Building Standard will be submitted to ANSI for approval in 2012.

“I look forward to seeing the proposed changes and comments for this next edition of the standard,” Borsting said. “I fully expect them to reflect the dynamic nature of green building. The job of the committee will be to ensure that the changes provide an above-code program that’s challenging and that encourages the growth of sustainability, yet is achievable by the mainstream residential construction industry.”

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

For additional information and for all future updates on the 2012 NGBS development process, visit www.nahbrc.com/ngbs.


More Than 5,000 People Have Earned Their Certified Green Professional (CGP) Designation

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

For more information, visit www.nahb.org/CGPinfo.


'Build Green and Save’ Available at BuilderBooks.com

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

To view or purchase this publication online, click here, or call 800-223-2665.

For answers to questions about National Green Building Certification by the NAHB Research Center, certification to the standard or the guideline sunset, complete and submit the Contact Us form on the NAHBGreen website.

Austin Energy, National Green Building Standard Offer Dual Certification

Austin Energy and the NAHB Research Center will now offer dual certification for single-family homes, combining the nation’s oldest local green building program with the ICC 700-2008 National Green Building Standard.

“Providing a dual certification with the standard advances our program goal of providing the highest standard for green-built homes in the Central Texas region,” said Austin Energy Director Richard Morgan.

“We are truly excited about this partnership,” said Michael Luzier, president of the NAHB Research Center. “It will allow Austin builders to leverage the tremendous brand recognition of the local green program — the first of its kind in the nation — with the national prominence of certification to the National Green Building Standard, which is the first consensus-based national standard of its kind approved by the American National Standards Institute (ANSI). This is a landmark partnership that will benefit both builders and home buyers in the region.”

The Austin program focuses on climate-specific, regional growth and quality of life metrics and has been certifying single-family homes since the early 1980s. It certified 700 new homes in 2009, or about 25% of all new homes built in the area last year.

Austin Energy’s rating and inspection protocol was a model for the Energy Star new home certification program, which has now qualified more than one million homes.

“Certifying to the standard provides a broader focus with which the project can gauge its achievements against a national perspective, which many builders and home buyers desire,” Morgan said.   

“In addition, the resulting expected savings from energy conservation means that fewer new generation sources will be required to keep up with the area’s growth, a key strategy in maintaining Austin’s livability standards,” he said.

Home Builders Association of Greater Austin leaders applauded the new partnership. “Many HBA members already participate in Austin Energy, and this dual certification offers participants the additional national recognition that so many projects throughout the area deserve,” said green building pioneer Ray Tonjes.

Tonjes is the former president of the HBA as well as the Texas Association of Builders, and past chair of NAHB’s Green Building Subcommittee.

The dual certification will be available to projects in 27 counties throughout central Texas. For information on participation, e-mail Austin Energy’s Miki Cook, or call her at 512-482-5358.

Luzier also announced that the North Carolina Green Home Builders of the Triangle is now certifying homes with the Research Center.

“By transitioning from its locally-based certification program to the National Green Building Certification Program, these North Carolina builders will be bolstering the value of their offerings to members and the credibility of its green home certifications to home buyers,” Luzier said.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.


'National Green Building Standard’ Available at BuilderBooks.com

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

To view or purchase this publication online, click here.


'National Green Building Standard Commentary' Available at BuilderBooks.com

The "National Green Building Standard Commentary," available through BuilderBooks.com and a companion to the ANSI approved "National Green Building Standard," that provides valuable insight to the intention and implementations of the practices and provisions found in the green building standard.

The "Commentary" is a useful resource for any designer or builder using the ICC 700-2008 as a rating system for developing or renovating residential properties of all types to reduce their relative impact.

To view or purchase this publication online, click here, or call 800-223-2665.


More Than 5,000 People Have Earned Their Certified Green Professional (CGP) Designation

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

For more information, visit www.nahb.org/CGPinfo.


'Build Green and Save’ Available at BuilderBooks.com

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

To view or purchase this publication online, click here, or call 800-223-2665.

For answers to questions about National Green Building Certification by the NAHB Research Center, certification to the standard or the guideline sunset, complete and submit the Contact Us form on the NAHBGreen website.

Green Building Awards Entries Now Being Accepted

Entries are now being accepted for the 2011 National Green Building Awards.

Each year, NAHB recognizes individuals, companies and organizations for excellence in residential green design and construction practices and for green building program and advocacy efforts.

The prestigious awards will be presented at a gala dinner during the 13th annual National Green Building Conferenc & Expo in Salt Lake City on May 1-3.

All homes and developments must be scored to the National Green Building Standard to ensure fair comparisons for judging purposes.

Award categories include:

  • Green Advocate of the Year: Builder, Remodeler, Individual, Group, State/local Government and HBA 
  • Green Project of the Year — Single-Family
  • Green Project of the Year — Multifamily
  • Green Project of the Year — Site Development
  • Green Project of the Year — Remodeling

The awards are open to both NAHB members and non-NAHB members.To apply for the awards, visit www.nahb.org/greenbuildingawards.

The NAHB National Green Building Conference attracts home builders, remodelers, architects, suppliers and environmental officials for three days of educational events, the popular Tour of Green Homes and product booths and demonstrations.

Exhibit booth information is available by e-mailing Christopher Hood or calling him at 800-368-5242 x8684.

For sponsorship information, contact Harris Floyd, x8208, or Grante Wright, x8051.

For additional information on the awards program, contact Chad Riedy, x8225.


'National Green Building Standard’ Available at BuilderBooks.com

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

To view or purchase this publication online, click here.


'National Green Building Standard Commentary' Available at BuilderBooks.com

The "National Green Building Standard Commentary," available through BuilderBooks.com and a companion to the ANSI approved "National Green Building Standard," that provides valuable insight to the intention and implementations of the practices and provisions found in the green building standard.

The "Commentary" is a useful resource for any designer or builder using the ICC 700-2008 as a rating system for developing or renovating residential properties of all types to reduce their relative impact.

To view or purchase this publication online, click here, or call 800-223-2665.


More Than 5,000 People Have Earned Their Certified Green Professional (CGP) Designation

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

For more information, visit www.nahb.org/CGPinfo.


'Build Green and Save’ Available at BuilderBooks.com

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

To view or purchase this publication online, click here, or call 800-223-2665.

For answers to questions about National Green Building Certification by the NAHB Research Center, certification to the standard or the guideline sunset, complete and submit the Contact Us form on the NAHBGreen website.

Green Remodel Workshops Scheduled for Four Western Cities

2010 NAHB Green Remodeling Advocate of the Year Philip Beere is applying lessons he learned on the road to help remodelers around the country looking to create more efficient, sustainable renovation projects.

Beere, a Phoenix developer and remodeler, has completed two remodeling projects that were certified to the Emerald, or highest, level of the National Green Building Standard.

The Green Remodel Workshop will be held in four Western cities in the next two months. The two-hour class includes information on government incentives, cost analysis of green versus traditional materials, common mistakes to avoid and a discussion of green rating systems focusing on the National Green Building Standard and LEED for Homes.

Classes will be held in Salt Lake City on Nov. 30, Denver on Dec. 2, Las Vegas on Dec. 16 and Phoenix on Jan. 20. Information about locations is available at the workshop website.

The workshop qualifies for continuing education credit for the Certified Green Professional designation and other programs.

For more information and to register, visit The Green Remodel Workshop.


'National Green Building Standard’ Available at BuilderBooks.com

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

To view or purchase this publication online, click here.


'National Green Building Standard Commentary' Available at BuilderBooks.com

The "National Green Building Standard Commentary," available through BuilderBooks.com and a companion to the ANSI approved "National Green Building Standard," that provides valuable insight to the intention and implementations of the practices and provisions found in the green building standard.

The "Commentary" is a useful resource for any designer or builder using the ICC 700-2008 as a rating system for developing or renovating residential properties of all types to reduce their relative impact.

To view or purchase this publication online, click here, or call 800-223-2665.


More Than 5,000 People Have Earned Their Certified Green Professional (CGP) Designation

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 5,400 people have earned the CGP designation to date.

For more information, visit www.nahb.org/CGPinfo.


'Build Green and Save’ Available at BuilderBooks.com

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

To view or purchase this publication online, click here, or call 800-223-2665.

For answers to questions about National Green Building Certification by the NAHB Research Center, certification to the standard or the guideline sunset, complete and submit the Contact Us form on the NAHBGreen website.

EPA Moving Too Fast on Costly Chesapeake Bay Cleanup Plan, NAHB Says

NAHB has submitted formal comments laying out in detail its criticism of the U.S. Environmental Protection Agency’s sweeping and staggeringly expensive Total Maximum Daily Load (TMDL) proposal to clean up the Chesapeake Bay — a 15-year plan designed as a model for managing runoff and discharges in watersheds throughout the rest of the nation.

While the EPA has no official estimates of the cost of the plan and was not required to consider costs when writing the TMDL for the watershed — which covers parts of six states and Washington, D.C. — a number of state and local government entities have begun to crunch the numbers with results that are nothing short of “astonishing,” said NAHB Environmental Issues Committee Chair Chuck Collett.

“We’re talking tens of billions of dollars for each state to replace and retrofit sewer systems, tear up impervious surfaces and install new storm water management systems,” Collett said. “And that doesn’t include the costs that must be borne by the farming industry, which is the single biggest source of pollution in the bay.”

Environmentalists say the costs must be borne by the businesses, governments and private citizens in the Chesapeake Bay watershed who have not done enough in previous voluntary programs.

“Had the development community and others done what was appropriate and necessary in 2000, perhaps now we would not be having this debate,” said Chesapeake Bay Foundation President William C. Baker in a letter to NAHB CEO Jerry Howard.

Howard had written to Baker after the foundation issued a press statement critical of NAHB’s efforts to delay the TMDL proposal for additional needed study, calling NAHB’s actions “an attempt to delay and derail the clean-up process for short-term profit and narrow interests.”

But NAHB and other interest groups, including governments, say the issue is not short-term profit, but economic survival.

“If concerns relating to costs are not analyzed and addressed at the early stages of this initiative, the entire program will fall under the weight of the economic burdens it will impose upon many local governments and businesses,” said Penny Gross, a member of the Fairfax County, Va., Board of Supervisors in comments submitted in October to the EPA docket for the proposal.

“Furthermore, if we don’t have a firm understanding of costs and how the burdens of meeting these costs will be distributed, we don’t have a true ‘partnership.’"

“How can EPA claim to have developed a legitimate program if the proposal lacks documentation explaining what method it used for measuring expected pollutant load reductions associated with the TMDL or reliable data on the number of active construction sites, the regulated universe or the performance effectiveness of ‘acceptable’ BMPs?” NAHB asked in its comments.

“EPA’s cavalier attitude about the costs and impacts of a rule known to be defective from the beginning does not do credit to the agency,” the comments said.

Too Much, Too Fast

NAHB’s comments center on deficiencies in the TMDL’s development, including the science behind the calculations:

  • The agency allowed only a 45-day comment period, not nearly enough time for home builders and others to review and respond to thousands of pages of information.

  • With a stressed economy already causing state and local governments to lay off workers, there’s not enough money to pay for the expensive retrofits required for municipal sewer systems, leaving open the question of how much of the TMDL taxpayers will have to fund.

  • Developers already holding federal storm water discharge permits will likely have to rejigger their plans to accommodate the additional costs from the TMDLs — costs they did not budget for when they finalized plans for their projects.

  • Broad new requirements for the use of infiltration devices — such as rainwater retention areas and other low-impact development techniques — will likely conflict with “smart growth” initiatives because the additional expense will drive projects away from urban areas.

  • The EPA itself has admitted that the computer modeling used to propose pollutant loadings was defective and it has no plans to correct the figures until after the TMDL rule is finalized.

  • Beginning next year, the rule will require every new construction project to offset its potential impact on the bay by purchasing credits from a trading program. While this has great potential for making significant cost reductions, such a program has yet to be developed.      

“The Chesapeake Bay TMDL is about much more than just water quality,” Collett said. “It is about where people will live in the watershed and about how much new economic growth — to say nothing of new homes, schools or business — will be allowed. It’s imperative that the EPA do this right, but what the agency has accomplished so far is not right — not by a long shot.”

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

EPA Strikes Onerous Requirement From New Storm Water Regulations

As a result of petitions from NAHB and the Small Business Administration, the U.S. Environmental Protection Agency has finally acted to strike an onerous requirement from new national storm water management regulations.

On Nov. 3, the EPA issued a direct final rule to remove the numeric limitation of 280 NTUs (numeric turbidity units) from its new Construction and Development Effluent Limitation Guidelines (ELGs).

In setting the limit for the NTUs — which are a measure of water cloudiness — the agency failed to take into account the natural turbidity of streams and lakes throughout the country. In some cases, these have higher levels of NTUs then water discharged from construction sites.

The EPA concluded that “it improperly interpreted the data and, as a result the calculations in the existing administrative record are no longer adequate to support the 280-NTU numeric limit.”

In its petition, NAHB pointed out that there were technical errors in the data used to develop the ELG, including a misinterpretation of vendor-supplied figures on storm water control devices.

In addition, the EPA set the limit using data from advanced instead of passive treatment systems. Excluding the advanced systems from consideration would have put the standard in the neighborhood of 800 NTUs.

States in the process of adding the 280-NTU limit to their permits will have to issue their permits without the numeric limit.

Next month, the EPA plans to submit for public comment a proposed rulemaking to correct the numeric effluent limitation of 280 NTUs.

It also is planning to issue a final rule with a new numeric effluent limit by May 30, 2011. A fact sheet and the federal register notice are available on the EPA website.

Meanwhile, the other provisions of the ELG rule remain valid and will require builders and developers to follow best management practices relating to erosion and sediment control, soil stabilization, dewatering, pollution prevention and prohibited discharges. 

These requirements are in many cases more stringent than builders and developers have been used to, and NAHB is seeking guidance from the EPA on how states and industry should implement these provisions.

Affecting Idaho, Massachusetts, New Hampshire, New Mexico and the District of Columbia — which have not yet been authorized to administer the National Pollutant Discharge Elimination System (NPDES) permit program — the EPA will include the ELG requirements in its Construction General Permit when it is reauthorized in July 2011.

The remaining states must each incorporate the non-numeric sections of the ELG the next time they issue a new construction general permit.

For more information, e-mail Ty Asfaw at NAHB, or call her at 800-368-5242 x8124.


Are You Ready for a Visit From the EPA? 

“Storm Water Permitting: A Guide for Builders and Developers,” available through BuilderBooks.com, provides a starting point for builders and developers to use in locating and understanding storm water permitting requirements.

The publication has been prepared to help builders comply with the U.S. Environmental Protection Agency's stormwater requirements, and includes information on state permitting programs and more than 50 of the most commonly used Best Management Practices.

Also included are tips on compliance, including how to handle visits from inspectors.

To view or purchase this guide online, click here, or call 800-223-2665.

Small Businesses Voice Concerns Over EPA Post Construction Storm Water Rule

A Nov. 3 meeting convened by the U.S. Environmental Protection Agency found a number of concerns and some confusion among small businesses over the new Storm Water Post Construction Rule the agency hopes to finalize by November 2012.

Members of NAHB and the other Small Entity Representatives (SERs) invited to participate in the session — which opened a panel review process designed to elicit their input on the regulation — brought more questions to the discussion than the EPA was able to answer.

The EPA has not identified specific regulatory alternatives for this rulemaking, making it difficult for the SERs to assess the impact of the rule on their businesses. The agency has provided a list of theoretical regulatory options the rulemaking could take that are similar to the proposal in December 2009 federal register notice, but there have been few specifics. 

Comprised of more than 20 representatives from Municipal Separate Storm Sewer Systems (MS4s), residential and commercial building and development and other real estate interests, the SERs found it difficult to have their concerns on any one issue addressed as the discussion moved quickly from one topic to the next over the course of the three-hour meeting.

In addition to citing a lack of specifics in the proposal, the industry SERs said that the EPA needs to ensure that it doesn’t develop a one-size-fits-all rulemaking and they questioned the agency’s legal authority to develop the rule.

NAHB members asked for more time at the next meeting on Dec. 7 to fully address the concerns of the industry. The EPA said that it is willing to accept written comments during the process.

NAHB members on the panel of small businesses include Dave Carter of David C. Carter Consulting in Winter Haven, Fla.; Rob Weintraub of Ammons Development Group in Wake Forest, N.C.; Tom Farasy of Terra Verde Communities in Burtonsville, Md.; Bobby Bowling of Tropicana Homes in El Paso, Texas; Matt Belcher of Belcher Homes in St. Louis; and Carl Harris of Carl Harris Company in Wichita, Kan.

The panel is staffed by inter-governmental agency representatives from the EPA, Office of Management and Budget and Small Business Administration.

The information gathered from the SERs will be included in a final report that will be submitted to the administrator after it is completed in February.

To see the presentation or other related documents shared by the EPA, e-mail Ty Asfaw at NAHB, or call her at 800-368-5242 x8124.


Are You Ready for a Visit From the EPA? 

“Storm Water Permitting: A Guide for Builders and Developers,” available through BuilderBooks.com, provides a starting point for builders and developers to use in locating and understanding storm water permitting requirements.

The publication has been prepared to help builders comply with the U.S. Environmental Protection Agency's stormwater requirements, and includes information on state permitting programs and more than 50 of the most commonly used Best Management Practices.

Also included are tips on compliance, including how to handle visits from inspectors.

To view or purchase this guide online, click here, or call 800-223-2665.

NAHB Sues Corps of Engineers for Attempting to Treat Certain Farm Fields as Wetlands

NAHB has joined in a lawsuit with the American Farm Bureau Federation and the United States Sugar Corporation that challenges a U.S. Army Corps of Engineers decision to begin treating certain farm fields as wetlands, affecting both the value of the property and the process for developing or building on it.

American Farm Bureau Federation et al. v. U.S. Army Corps of Engineers resembles a suit brought simultaneously by New Hope Power Company and Okeelanta Corporation. 

Both suits have been before Judge K. Michael Moore of the U.S. District Court of the Southern District of Florida and challenge the Corps’ recent attempts to improperly change a 17-year-old regulation that provides that land used for agriculture since at least 1985 can no longer be treated as wetlands.

In 1993, the Corps adopted a rule establishing that agricultural lands converted from wetlands prior to 1985 — or “prior converted croplands” — would be excluded from regulation under the Clean Water Act.

If a farmer decides to put land that has been excluded from regulation to some other use or to sell it to a residential or commercial builder, there is no need to get a new jurisdictional determination or go through the Clean Water Act permitting process.

However, Corps Director of Civil Works Steven L. Stockton in a 2009 memorandum approved a new standard to regulate these agricultural lands when there is a change in their use. 

The new regulatory uncertainty prompted the lawsuits from NAHB and other industry groups.

In October, Judge Moore ruled in New Hope Power that the Corps could not change its policy without going through the usual federal process of giving public notice and offering a set time for comments from stakeholders or other interested parties.  There is no indication at this time whether the government will bring an appeal to the U.S. Court of Appeals for the 11th Circuit.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

Rising Sea Levels Could Have an Impact on How Homes in Coastal Areas Are Built

Members of the residential construction industry are beginning to see regulatory changes related to global warming and rising seas, according to experts on water-related issues at NAHB. They say that this could have a potential impact on how homes are built in these areas and that builders in these locations should be prepared to advocate for a site-by-site approach to mitigation strategies.

The rising sea level is one of many critical climate change issues raising concerns among coastal states across the country, many of which are assuming that the ocean will rise one to five feet over the next 100 years.

Sea level rise is associated with increased coastal flooding, more frequent and severe storms, saltwater intrusion and coastal erosion. While the 1972 Federal Coastal Zone Management Act (CZMA) strives to preserve and protect coastal resources, many coastal states and localities have begun to go above and beyond the federal baseline to ensure their shorelines are protected. 

As a result, there are increasing calls from environmental groups, government agencies and property owners for policies to address coastal protection through the location and elevation of coastal homes, buildings and infrastructure. Many believe that the rise in sea level should also be reflected in flood insurance rates.

Only a handful of coastal states have policies or regulations that directly address this problem. However, they are more commonly responding to changes in the shoreline, including setbacks based on local erosion rates.

While affected states such as California, Maine, Massachusetts, New York, Rhode Island, Texas and Wisconsin have begun to respond to the impacts of sea level rise — such as erosion and flooding — most have not addressed acceleration.   

Maine, Rhode Island, North and South Carolina and Texas, in an effort to balance public versus private property rights, have implemented versions of rolling easements that take the natural shoreline processes into account and allow property owners to build near or on the beach, but only on the condition that the structure will be removed if and when it becomes vulnerable to an advancing shoreline. 

Other regulatory approaches now being implemented include adaptive management strategies — such as erosion rate setbacks, hard and soft coastal armoring and state building codes improvements.

As the coastal states continue to develop precautionary policies to address the uncertainty surrounding climate change and its impacts, this is having an impact on home building and other industries.

Maryland has already increased its setback to 300 feet. Other approaches include: increasingly restrictive sand dune and beach protections, building code modifications, use of natural vegetation, revised flood insurance rate mapping and increased permitting in established “critical areas.”

For more information, e-mail Larissa Mark at NAHB, or call her at 800-368-5242 x8157.

FEMA Enacts Rules for Building in Floodplains to Comply With Endangered Species Act

The Federal Emergency Management Agency (FEMA) on Oct. 1 enacted new rules that will apply to developers in many flood-prone areas that provide habitat for threatened and endangered species.

The new rules — Procedure Memorandum 64 — were issued in response to several successful lawsuits by environmental groups against FEMA for not appropriately considering its responsibilities under the Endangered Species Act (ESA) when allowing development to take place.

Now, FEMA wants to shift those responsibilities to the landowners themselves.

The lawsuits targeted FEMA for failing to comply with the Endangered Species Act when acting on flood map change requests. Section 7 of the ESA requires federal agencies to consult with the Department of the Interior before embarking on any projects that may harm endangered or threatened species on the property.

When a project is proposed for a parcel of land within a floodplain, FEMA can issue a CLOMR — or Conditional Letter of Map Revision — to state that the project, if it is built as proposed, would sufficiently modify the floodway, base-flow elevation and/or 100-year floodplain (Special Flood Hazard Area) as shown on FEMA’s Flood Insurance Rate Maps. 

A CLOMR-F — a Conditional Letter of Map Revision based on Fill — is used by FEMA when the parcel or proposed structure will be elevated by fill material to be above the base, 100-year floodplain. 

Property owners usually seek a CLOMR on large projects such as levees and dams and residential or commercial developments, while CLOMR-F might be used for projects on smaller parcels or small parts of a subdivision.

Right now, any five-acre or 50-lot subdivision adjacent to or in the 100-year floodplain designated “Zone A” must conduct a study to determine the “base flood elevation” and submit a Letter of Map Change (LOMC) revising the flood map. With this new guidance, a LOMC could trigger ESA consultations.

FEMA charges a fee to review the application and these letters are typically sought and issued prior to work. The “condition” of both these letters is that the tasks are completed as proposed. 

Procedure Memorandum 64 appears to shift a portion of its ESA consultation obligation to private landowners by requiring them to provide proof that they are complying with the provisions of the Endangered Species Act before making any requests of FEMA.

This change will likely add time and expense to any project in which the property owners need flood map revisions to move forward, because they may first need to complete the Section 7 or Section 10 permit process. 

For Section 7, that process can take 90 to 135 days on average, and the Section 10 permit takes about two years to complete.

As currently written, the Procedural Memorandum 64 is likely to impose a burden upon developers, builders and private landowners seeking an LOMC.

NAHB is adding clarifying information on the ESA section of its web site while simultaneously discussing with both FEMA and the Fish and Wildlife Service the future implications of the memorandum.

For more information, e-mail Matt Watkins at NAHB, or call him at 800-368-5242 x8327; or contact Larissa Mark, x8157.

Alternative Endangered Species Mitigation Strategies Under Attack

As alternative compliance strategies used by local governments, builders and others to comply with the Endangered Species Act (ESA) are increasingly being called into question in proposed species listings and critical habitat designations, NAHB is working to ensure they remain a viable alternative.

The U.S. Fish and Wildlife Service (FWS) and some environmental groups have begun to question the validity of programs such as Habitat Conservation Plans (HCPs) and Conservation Banking (CB) because they don’t believe they sufficiently protect and assist in the recovery of the listed species.

HCPs allow property owners to engage in activities that might result in an "incidental take" of an endangered or threatened species, as long as certain conditions are met and they agree to a plan to minimize the effects of the permitted action on the species.

Once the HCP is in place and the permit is issued, property owners can go ahead with development or other activity on their land without worrying that they will be found in violation of the ESA. 

First introduced in 1994 as an addition to the Habitat Conservation Plan (HCP) program, the “No Surprises” policy establishes that the FWS will not seek additional land, water or financial mitigation measures or additional lands for conservation beyond what was established under the conditions of the Incidental Take Permits (ITP) that are issued. 

This effectively protects the ITP permit holder against any unforeseen circumstances over the life of permit. 

Off-site mitigation strategies — including species banks and Conservation Banks — offset adverse impacts on species that occur elsewhere. In exchange for permanently protecting the land and managing it for these species, the Service approves a specified number of habitat or species credits that bank owners may sell.

Developers who need to compensate for these adverse impacts purchase the credits from conservation bank owners. 

There are several popular banking programs that centralize information resources for buyers, sellers and other market participants — including information on  the number of banks, species covered, location, availability of credits and contact details. 

For information about the banking programs, e-mail Nathaniel Carroll at the Ecosystem Marketplace.

For more information, e-mail Larissa Mark at NAHB, or call her at 800-368-5242 x8157.

Sell More by Creating a Memorable 'Welcome Home' Atmosphere for Your Prospects

  By Roland Nairnsey, CSP
Bob Schultz & The New Home Sales Specialists

To be successful, especially in today’s market, new-home salespeople need to create a memorable, positive experience for their customers.

To do that, they have to be prepared. Let’s look at what this entails:

Appearance — Keep Everything in Tip-Top Shape

To be successful, you need to check the appearance of your community, models, available homes and home sites — every day — to make sure they are in tip-top shape.

Then, add to that list the need to maintain your own appearance, be professional at all times and avoid any conflicts with your message. If in doubt about what this takes, check some of the many excellent books on creating and maintaining a professional appearance.

Signage — Let Prospects Know Where You Are and That You Are Open

Can people find you and, just as importantly, is it obvious that you are open when you say you are?

Are your website, phone number and hours of operation clearly visible to prospects driving by you model?

Also does your signage create a compelling reason to buy now — does it promote a “Grand Opening,” “Grand Close-Out” or “Holiday Savings” to create some subtle urgency?

I managed the closing of a community in South Florida that featured a sign displaying a countdown that reported the current number of opportunities remaining in the community. The countdown not only sparked conversation, it accelerated the close-out pace.

Collateral Material — Keep Control of What You Hand Out

We don’t believe in handing out a full brochure at the beginning of the sales process because we don’t want to overwhelm our prospects with too many choices before we get to know them better.

Rather, we spend time with them and help then narrow down their needs, wants and choices. Then, we give them information that is more pertinent to their choice of home.

This approach enables you to keep control of the sales process and be the gatekeeper of the important information.

Also, don’t leave stacks of fliers in the sales office that prospects can just pick up. That just gives them an opportunity to grab information without having to talk to you.

Marketing Props — Support Your Marketing Message

We believe that the best way to increase sales is to follow a proven, formal sales process and to feature appropriate props to support your message. These include:

  • Area Map or Aerial Photo — Clearly label and illustrate the benefits of your community on an area map, aerial photo or both. The map or photo also will help you learn more about your customer’s hot buttons — such as their desire to have schools, work, recreation or shopping nearby.

  • Community Map — Point out the features and benefits of your community.

  • Builder’s Story — Use photos and bullets points to explain how much better and how different you are from your competition.

Silent Sales Tools — Let Strong Visuals Set the Stage for You

Place red dots or little houses on your community map to illustrate the number of homes you have sold. Also, bolster this display of success with written statements, such as “Grand Opening,” “Grand Close-out,” “87% Sold Out” or “X Number of Exciting Opportunities Left” — and place these statements near your community map.

Don’t just put your success on display in the sales office, either. Plant “Sold” signs in front of the homes sold throughout your community.

I almost always conducted a little ceremony with my home buyers after the sale was finalized. We either placed a “Sold” sign in the ground together or put a “Sold” sticker across their home’s “For Sale” sign when the winter ground was too hard. Finally, I photographed them standing beside it and then either sent them a framed copy of the photo or e-mailed it to them.

Many of my sales students who have used the “Celebrating the Sale” photos in their communities have told me that the ceremony created great memory points for their home buyers. In many cases, the photos have also helped prevent some potential buyer’s remorse.

Sales Process and Product Knowledge — Be Fully Prepared

Don’t ad lib your sales presentation. Instead, be fully prepared by writing your presentation down and then practicing it for at least an hour a day.

Also, prepare a handy binder you can reference quickly that lists every feature of your homes, along with their corresponding benefits and any customer choices available. The benefits you discuss with prospects will keep them coming back for more visits — and help sway the sale.

Likewise, create similar information about particular home sites or units — focusing on features and benefits for each home — and use this information to attract a prospect to a particular home that meets their needs and desires. Once you are able to make this connection with prospects, the fear of losing the home will be strong — and dramatically increase your sales conversion ratio.

Financing — Focus on Monthly Payments

While the overall price of the home is important, what most prospects care about more is their monthly payment or investment.

Make sure that you have a basic knowledge of financing or a simple system to figure out what their monthly payment will be. This approach enables you to show your customers how affordable their particular home on their particular site — with all the features they want — will be each month. Present your customers’ investment this way and watch your sales increase.

Know Your Competition — In Person and Online

Visit your competitors in person and online at least once a month and create a binder with the updated information so you can positively compare your builder against the competition and prevent your buyers from using the competition as an excuse for delaying action or compromising your prices.

With up-to-date competitor information at your fingertips, you can make the sale now.

Objections — Be Prepared Ahead of Time

Prepare yourself ahead of time with all of the objections you may hear. Focus on your prospects’  10 top objections and use our Bob Schultz and the New Home Sales Specialists six-step formula for managing objections — Listen; Reflect and minimize; Question the objection; Answer; Confirm; and Move on.

Again, keep this information in a binder in your sales office. That way, you’ll be prepared to answer any objection or reason for delay. Plus, you’ll now be proactive as opposed to reactive — and make more sales.

Follow Through — On a Daily Basis

Dedicate at least an hour a day to follow up with your customers. Rank your customers as Bob Schultz says, “By what you know about them, not just what you feel.”

Use a customer relationship management (CRM) system to create a daily follow-through regimen — and use it every day.

Prospect — At Least an Hour a Day

If you follow the rule of thumb for successful salespeople, at least two-thirds of your qualified traffic should be self-generated.

To achieve this goal, first identify your prospective targets, then create a daily prospecting regimen — and follow it.

Experience — Make It Memorable for Your Prospects

Companies like Starbucks realize that people will pay more — way more — for their product if they create an inviting environment in which to enjoy it. For Starbucks, this includes comfy sofas, cool music, trendy lighting and plenty of beverage choices.

When prospects enter your model, have you created a similarly inviting atmosphere for them complete with lights, cheerful, breezy background music — without radio ads ruining the moment — a pleasant aroma and, yes, refreshments.

We humans love free food. When I get my car serviced, for example, I almost always help myself to the free coffee and pastry that the shop offers. If you adopt this kind of service mentality and spoil your customers, they’ll continue to keep you on their inclusion list.

Apply this same mentality to your local Realtors®, too. Make sure that they understand that you are Realtor®-friendly, and that you’ll have bottled water, cookies and working space for them and their clients to make their future appointments — as well as great service from you, their new-home sales professional.

There is much involved in creating a “Welcome Home” atmosphere for your prospects. Now is the perfect time to dedicate yourself to start turning your actions into skills — and habits — that will translate into a memorable experience for your prospects, and stronger sales for you.

Roland Nairnsey, CSP, is the senior vice president of training and development for Bob Schultz & The New Home Sales Specialists. Nairnsey and the Bob Schultz team of facilitators and coaches conduct more than 400 custom sales and management training seminars and workshops annually for thousands of salespeople, builders, developers, Realtors® and housing manufacturers through in-company programs, live video conferencing and online training. For more information, e-mail Nairnsey.

A version of this article originally appeared on the NAHB Sales and Marketing Channel.


In Today’s Market, 'Think Sold!' With Help From NAHB BuilderBooks

“Think Sold! Creating Home Sales in Any Market,” available at NAHB BuilderBooks, is a practical, how-to guide for developing the self-awareness, knowledge and skills needed to succeed in the competitive field of new home sales.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

To view or purchase this publication online, click here, or call 800-223-2665.


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.

Adapt to the Market to Boost Your Business Now, Be Stronger When the Market Returns

     By S. Robert August,
IRM Fellow, MIRM, CMP, CSP,
MCSP, CAASH,
S. Robert August & Company

I have weathered seven economic downturns since I first entered the workforce in 1970 and each has been challenging in its own right.

But, while the first six I experienced varied in their degree of severity and each one only affected particular portions of the real estate industry, the downturn we are beginning to climb out of now has severely affected all segments of the industry — residential, commercial, industrial, institutional, recreational, resort and retail.

With about 10% of the nation’s workforce unemployed and a large percentage underemployed or simply too discouraged to even look for work, employment is the key to the recovery for both housing and the nation.

And, although many in the industry have done a good job of trimming their costs and downsizing their workforce to weather the downturn, with economic indicators starting to point toward modest growth in 2011, we can expect to begin to see many new opportunities throughout the country for building and developing apartments. In addition, the demand for single-family homes and condominiums in several markets has been on the rise.

While the Mortgage Bankers Association recently predicted that a 30-year fixed mortgage rate will climb to 5.1% by the end of 2011, the rate will still be historically low.

Still, the increase may stoke some fears and cause some prospective home owners to resist getting into the market. As the market recovers, however, our job will be to quell those fears and educate prospects on why they should get off the fence now and buy a new home.

Targeting the New Buyer

A study released last month by Builder magazine and the market research firm American LIVES outlined five home buyer traits that you should consider when designing and selling new product in the recovering market. According to the study, home buyers today are:

  • Younger
  • More frugal
  • Concerned about their financial future
  • Concerned about energy efficiency, but not necessarily “green”
  • Likely to consider their prospective neighborhood to be almost as important as their home when making a buying decision.

In addition to addressing these traits, you will need to assess your local market to determine home buying and leasing trends to help determine the viability of your market. You also should determine how foreclosures and re-sales are faring in your market; the value-differential between new and existing homes; and the condition of your local commercial, industrial, institutional and retail markets.

Like we do on a regular basis, you should meet with your local Realtors®, remodelers, retailers and wholesalers to determine what products and services consumers in your market area are purchasing. This will enable you to fine tune your buyer’s profile, which you can further refine through surveys and focus groups.

How Will You React to a Changed Market?

The market is changing and, in order to succeed in the new market, you should consider and prepare for how you will react to the changes.

According to author and speaker Wayne Dyer, "When you change the way you look at things, the things you look at change." When applying that attitude to home building — instead of complaining about how bad business is — you should develop fresh ways to re-create your business.

Begin by assessing your position in the marketplace, your strengths and weaknesses, and pursue business measures that can improve your strengths and reduce or marginalize your weaknesses.

Also, determine whether you are quick and nimble enough to seize opportunities, and if not, how you can reshape your company so that you can grasp opportunities when they appear. This not only applies to your company, but to your contractors and trade partners as well.

Consider, also, what processes you need to change in order to develop and deliver better and more competitive products and services, and to generate more leads, sales and closings.

When the time comes to implement your changes effectively and efficiently, be sure you also have a system in place to monitor and evaluate your changes so you can ultimately determine their effectiveness and quickly change course, if need be.

Embrace Creativity and Innovation

An effective way to position yourself in the changing marketplace is to embrace passion, creativity and innovation and project a positive, can-do attitude.

One company that did exactly that was Meritage Homes, which builds in Arizona, California, Colorado, Florida, Nevada and Texas.

“At Meritage Homes, we are trying to be proactive and innovative,” said C.R. Herro, vice president of environmental affairs. “We are eliminating waste and products that do not offer value to the homes we build."

The company offers 100% Energy Star-qualified homes — at no extra cost to consumers — and other eco-friendly features that differentiate it from the competition and from existing homes.

In addition, Meritage Homes promotes an entrepreneurial work environment that encourages employees to be creative and innovative and to pursue opportunities to further their careers. The builder fosters a team atmosphere where every employee counts.

Like Meritage Homes, small-volume Pennsylvania builder Outlook Construction also embraces energy efficiency and green building.

The company launched a special promotional campaign featuring The Energy Star Idea Home, which incorporates state-of-the-art products and services. Outlook Construction promoted the home in one of its communities, and the promotion garnered the builder its highest traffic and sales in its 25-year history.

Revive Personalized Communication

Person-to-person, or at least personalized, communication has become something of a lost art today as more people and businesses have come to rely upon electronic communication — a more efficient, but somewhat impersonal form of communication.

Your goal is to let your customers and business associates know you care and that you will address their concerns as soon as possible. To accomplish this, you should strive to make your communications more consumer- and business-friendly by changing some of your business processes and projecting a more personal connection and attitude.

You can begin by simply personalizing your communication program; smiling before you answer every phone call or make one; being pleasant and genuine; and not interrupting when being addressed. Let the other party finish what they are saying before you respond.

In addition, when you have to leave a message, let the party know you will call again at a specific time and with the information that they requested or that you promised. Then, be sure to call at the appointed time, even if you don’t have the information. By making the call when promised, you build and maintain their trust.

Be punctual and return phone calls the same day. If possible, have an employee — rather than voice mail — answer the phone.

Send letters as well as e-mails. Because fewer people today send letters, “snail mail” will have a greater marketing impact on your customers and business associates.

Finally, follow up — and always ask for referrals.

It’s a Tall Order, But You Need to Do It All

In today's tough marketplace, we all need to learn from one another. We need to adapt and make the appropriate changes to improve our business.

We need to be flexible, creative and innovative and market our company story through electronic and print media, our websites and social media and person-to-person. We also need to evaluate our products, services and market strategies often.

In short, we need to stay on our toes.

Businesses that stop or reduce their marketing will lose market share. Conversely, businesses that continue to market in these difficult times will out-perform their competition now. Plus, when the market improves, they will have better brand recognition, increased customer satisfaction and more referrals, sales and closings — securing their position for enduring success.

S. Robert August, IRM Fellow, MIRM, CMP, CSP, MCSP, CAASH, is president and founder of S. Robert August & Company, Inc., a national marketing and public relations firm based in Denver that specializes in providing home builders, developers, Realtors®, manufacturers and lenders marketing/management consultation, executive business training and sales training. August is a Master Train the Trainer, past chairman of NAHB’s National Sales and Marketing Council and past president of the Institute for Residential Marketing. For more information, e-mail August, or call him at 303-220-8480.


In Today’s Market, 'Think Sold!' With Help From NAHB BuilderBooks

“Think Sold! Creating Home Sales in Any Market,” available at NAHB BuilderBooks, is a practical, how-to guide for developing the self-awareness, knowledge and skills needed to succeed in the competitive field of new home sales.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

To view or purchase this publication online, click here, or call 800-223-2665.


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.

 

 

Trenching and Excavation Hazards Cause Fatalities on Construction Sites

Trenches and excavations can present hazards that are sometimes overlooked on residential construction sites. Being caught in a trench or excavation cave-in is one of the leading causes of fatal injuries in the construction industry. 

Some of the most common hazards that result in workers being injured during trenching and excavation work:

  • Cave-ins of the soil on a side wall of an excavation occur quickly — in one to three seconds — and there is generally no time for a worker to respond and escape safely.

  • The atmosphere in excavations can turn deadly when oxygen is displaced by other hazardous gasses.

  • Materials falling into excavations can strike workers and cause serious injuries.

  • Water accumulation in excavations can weaken walls and lead to cave-ins.

  • Damaged underground utilities can expose workers to hazardous or explosive atmospheres, electrocution or drowning.

It is important to never enter an unprotected trench. Each employee in a trench over 5 feet in depth must be protected from a cave-in by an adequate protective system. Some protective systems include:

  • Sloping for stability, at a minimum slope of 34 degrees in Type C soil

  • Benching to create steps (allowed in Type A and Type B soil only)

  • Shielding with a trench box or shoring to protect workers in a trench

When working in trenches or excavations, a competent person must determine the soil type and identify and correct any hazards before workers may enter a trench. The competent person must also continue to conduct regular inspections to ensure the safety of the workers inside the trench or excavation.

For more information on trenching and excavation safety, check out NAHB’s Trenching and Excavation Safety Card on "Trenching Hazards in the Home Building Industry." The popular "NAHB-OSHA Trenching and Excavation Safety Handbook” is also available for purchase at NAHB BuilderBooks.

For more information, e-mail Marcus Odorizzi at NAHB, or call him at 800-368-5242 x8590.

NAHB, Arkansas HBA Conduct ‘Building a House Seminar’ for OSHA Staff

In an ongoing effort to give Occupational Safety and Health Administration (OSHA) employees a basic understanding of new-home construction and key safety hazards typically present in residential construction, members of the Arkansas Home Builders Association and NAHB Labor, Safety & Health staff on Nov. 3 conducted a day-long “Building a House” seminar for OSHA staff members from Little Rock, Ark., and Oklahoma City.

NAHB developed the seminar through the NAHB-OSHA Alliance, which focuses on providing NAHB members and others in the residential construction industry — including non-English and limited English speaking workers and trade contractors — with information, guidance and access to training resources that will help them protect the health and safety of workers.

The “Building a House” seminar trained the OSHA personnel on the language and sequence of new-home construction; typical materials and methods used; the personnel, processes, techniques and trade contractors involved; and the safety hazards encountered and applicable safe work practices employed.

“We are extremely excited that NAHB has created this program because it has opened the doors even wider in strengthening our mutually beneficial working relationship with local OSHA offices,” said Julie Mills, executive vice president of the Arkansas HBA. “The ‘Building a House Seminar’ has helped tremendously to educate OSHA staff members on the unique processes involved in building a house and we will continue to work through our NAHB-OSHA Arkansas Alliance to advance the safety and health of the home building industry.”

The seminar enabled Arkansas member builders, the NAHB staff and OSHA enforcement and compliance assistance staff to discuss the difficulty of complying with many of the OSHA standards involved in the residential construction industry.

NAHB continues to advocate that compliance assistance activities improve relationships between OSHA and employers, and improve  safety and health more enforcement programs.

Through the alliance, which was formed in 2003, NAHB and OSHA continue to address fall, electrical, struck-by and caught in/between safety hazards. The alliance also enables NAHB to help improve relationships between its members and the OSHA staff and to advocate measurable improvements in construction safety and health through education and cooperation, rather than solely through strict enforcement programs.

For more information about the NAHB-OSHA Alliance, visit the OSHA webpage at www.osha.gov/dcsp/alliances/nahb/nahb.html.


Help Make Job Site Safety a Priority With Video From NAHB BuilderBooks

The “Jobsite Safety Video,” available through NAHB BuilderBooks, is the first-ever job site safety video for home builders.

The video provides an overview of the key safety issues that residential builders and workers need to focus on to reduce accidents and injuries.

Based on the NAHB-OSHA Jobsite Safety Handbook, this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos on one DVD.

To view or purchase this DVD online, click here, or call 800-223-2665.

New OSHA Crane Rule Sets 20-Foot Buffer for Cranes Operating Near Overhead Power Lines

The Occupational Safety and Health Administration’s (OSHA) long-awaited and complex final rule on crane and derricks in construction, which went into effect on Nov. 8, established a 20-foot buffer — up from 10 feet under the long-running previous rule — for cranes and derricks operating near overhead power lines.

The expanded 20-foot requirement, which primarily affects multifamily developers and construction, also sets additional requirements for builders, developers and crane contractors who encroach on the newly-established operating distance.

The comprehensive new crane rule applies to power-operated equipment used in construction (e.g. cranes) to hoist, lower and horizontally move a suspended load with a load rating capacity over 2,000 pounds.

Under the new standard, a hazard assessment inside the work zone where overhead power lines are present must be conducted before crane operations can begin.

The assessment includes identifying the work zone by demarcating the buffer boundaries with flags, a range limit device, a range control warning device or similar devices and prohibiting the operator from operating the crane beyond those boundaries.

Or, as an alternative, builders, developers or crane contractors can define the work zone as the 360-degree area surrounding the crane up to its maximum working radius in order to assure that no part of the crane, load line or load can encroach on the 20-foot power line buffer.

If any part of the crane, load line or load has the ability to operate within 20 feet of a power line, operators, builders or developers are required to meet one of three additional requirements to protect workers and minimize the hazard present.

These include:

  • De-energizing and grounding the power line. Confirmation that the power line has been de-energized and is visibly grounded at the worksite must be obtained from the utility company/operator.

  • Ensuring that the crane cannot get closer than 20 feet by conducting planning meetings with the crane operator and other workers in the area; erecting an elevated warning line, barricade or line of signs; and implementing additional protective measures contained in the final rule.

  • Determining the power line’s voltage and minimum approach distance permitted using OSHA’s Table A clearance. Builders, developers or crane operators must  determine if any part of the equipment or load line operating at the crane’s maximum working radius in the work zone could get closer than the minimum approach distance of the power line as permitted under Table A.  

In order to help simplify this complex crane rule, NAHB has developed the “Overview of the Crane and Derricks in Construction Final Rule." The overview includes the minimum approach distances under OSHA’s Table A.

For more information, visit OSHA’s crane and derrick website at www.osha.gov/cranes-derricks/index.html; or e-mail Marcus Odorizzi at NAHB, or call him at 800-368-5242 x8590.

Apply for NAHB/Builders Mutual SAFE Award by Monday, Nov. 29

Apply for the 2010 NAHB/Builders Mutual Insurance Company Safety Award For Excellence (SAFE) — which recognizes home builders and contractors who have developed and implemented high quality, work-site safety programs — by Monday, Nov. 29.

The award also honors government officials and NAHB-affiliated associations who work to advance safety in the home building industry.

NAHB member companies in good standing that build residential homes or town homes using light construction methods can apply for an award. Specialty trade contractors, remodelers and light commercial and multifamily builders, as well as NAHB-affiliated associations and federal or state occupational safety and health officials who have been nominated by an NAHB member or association, are also welcome to apply.

Award categories include Safety Program of the Year for single-family builders, remodelers, specialty trade contractors, multifamily builders and more.

For a detailed list of categories, requirements and an online nomination form, visit www.nahb.org/SAFE.

Award winners will be recognized at a ceremony during the 2011 NAHB International Builders’ Show in Orlando on Jan. 13 at the Peabody Orlando Hotel.

In 2009, 13 companies and individuals were honored for their safety achievements. Read about them by clicking here.

To Apply

For more information on the NAHB/Builders Mutual Insurance Company SAFE Awards program, or to apply, click here; or e-mail Tonia Green at NAHB, or call her at 800-368-5242 x8163.

Sponsorships Available

NAHB is also seeking companies to become sponsors for this safety awards program. For sponsorship information, click here; or e-mail Andrew Flank at NAHB, or call him at 800-368-5242 x8059.


Boost Job Site Safety With Fall Protection Training Products

In an effort to increase job site safety and reduce the chance of job related accidents, NAHB has produced the “Fall Protection Video, English-Spanish” and “NAHB-OSHA Fall Protection Handbook, English-Spanish.”

Both are available through BuilderBooks.com.

The 30-minute “Fall Protection Video, English-Spanish” can be used by builders to train workers to use safe work practices that eliminate fall hazards and comply with OSHA fall-protection standards.

The “NAHB-OSHA Fall Protection Handbook, English-Spanish” provides guidelines for creating a written fall-protection plan and identifying safe work practices that can prevent costly accidents and injuries. Written with clear text, photographs and illustrations, the book serves as a user-friendly resource for promoting safety on any job site.

To purchase the handbook and video online, click here, or call 800-223-2665.

Submit Nominations for 2010 Designee of the Year Awards by Wednesday, Dec. 1

NAHB is now accepting nominations for the 2010 Designee of the Year Awards in the following categories:

The deadline for entries is Wednesday, Dec. 1.

To be eligible to receive a Designee of the Year Award, candidates must be active designation holders and in good standing.

Members of the designations’ governing bodies and home builders association staff members are not eligible.

“We feel honored to be able to recognize outstanding designees,” said Robert Bell,CAPS, CGR, of Bell’s Remodeling in Duluth, Minn., and chairman of the NAHB Education Committee. “In the midst of one of the most challenging housing markets of our time, they go far beyond their job descriptions to reach out to their communities, mentor their colleagues and make their careers and companies shining examples of what our industry can achieve.”

The Designee of the Year Award winners will be selected by the respective governing bodies based on criteria set for receiving each award, including a review of the answers to the questions and support documentation submitted.

To Apply

Nominations for the awards may be made by any person or organization actively participating in the respective designation program. Self-nominations are also accepted.

To apply by Dec. 1, visit www.nahb.org/designeeoftheyear.

Winners will receive their awards at the Designation Achievement Reception held during the 2011 International Builders' Show in Orlando on Jan. 11.

For more information, e-mail Maria Nande at NAHB, or call her at 800-368-5242 x8435.


Learn More About NAHB Professional Development Offerings

View the variety of professional development offerings available through NAHB and its local associations at www.nahb.org/education.

Search for Upcoming Courses in Your Area

Or, search for specific course offerings in your area and check out upcoming conferences.

Education Calendar

Nov. 18

"New Horizons: Design Trends & Market Trends" 

Webinar

Dec. 8

"Nothing But the Facts About Climate Change, Density and Development”

Webinar

Dec. 16

"New Horizons: Marketing in a New Business Environment"

Webinar 

2011

 

 

Jan. 8-9

"Advanced Green Building: Building Science"

Orlando, Fla.

Jan. 8-9

"Understanding Housing Markets and Consumers (IRM I)"

Orlando, Fla.

Jan. 9

"Business Management for Building Professionals"

Orlando, Fla.

Jan. 10

"Business Accounting and Job Cost"

Orlando, Fla.

Jan. 10

"Customer Service"

Orlando, Fla.

Jan. 10

"Designing for the Active Adult"

Orlando, Fla.

Jan. 10

"Marketing & Communications Strategies for Aging & Accessibility (CAPS I)"

Orlando, Fla.

Jan. 10

"Negotiating Skills"

Orlando, Fla.

Jan. 10

"Train the Trainer"

Orlando, Fla.

Jan. 10-11

"Advanced Green Building: Project Management"

Orlando, Fla.

Jan. 10-11

"Green Building for Building Professionals"

Orlando, Fla.

Jan. 10-11

"Marketing Strategies, Plans and Budgets (IRM II)"

Orlando, Fla.

Jan. 11

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 11

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 11

"Construction Contracts and Law"

Orlando, Fla.

Jan. 11

"Design/Build Solutions for Aging and Accessibility (CAPS II)"

Orlando, Fla.

Jan. 11

"Estimating for Builders and Remodelers"

Orlando, Fla.

Jan. 11

"Marketing to the Active Adult"

Orlando, Fla.

Jan. 11

"Professional Remodeler Experience Profile (PREP)"

Orlando, Fla.

Jan. 11

"Project Management"

Orlando, Fla.

Jan. 11

"Train the Trainer"

Orlando, Fla.

Jan. 12-15

2011 NAHB International Builders' Show

Orlando, Fla.

Jan. 14

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 14

"Professional Remodeler Experience Profile (PREP)"

Orlado, Fla.

May 1-3

National Green Building Conference

Salt Lake City, Utah

Aug. 17-20

Executive Officers Council Seminar

Naples, Fla.

Learn More About NAHB Professional Development Offerings

View the variety of professional development offerings available through NAHB and its local associations at www.nahb.org/education.

Search for Upcoming Courses in Your Area

Or, search for specific course offerings in your area and check out upcoming conferences.

Remodeling Trends: Focus on Energy Efficiency, Baby Boomers, Home Entertainment

  By Peggy Ward
CEDIA

Addressing the needs of baby boomers and America’s aging population, the desire among home owners of all ages for more energy-efficient homes and for home entertainment are sound growth opportunities for remodelers, according to “The Remodeling Market in Transition,” a recent report by the Joint Center for Housing Studies of Harvard University.

Existing U.S. homes consume a considerable amount of energy. While estimates vary, studies have found that total energy consumption ranges anywhere from 22% to 40%, depending on the energy source.

To make an existing home more energy-efficient, remodelers can offer home owners a variety of options — from installing new, energy-efficient windows and doors and upgrading appliances to adding insulation, improving the efficiency of the building envelope and installing solar panels.

In addition, remodelers also can offer home owners several less costly technology options that can help decrease a home's carbon footprint — while also increasing their bottom line.

These include installing energy-efficient lighting and lighting controls, integrated house systems, controllable window treatments, energy consumption monitors and integrated sensors that monitor home use and adjust a home’s systems accordingly.

For example, if bedroom sensors don’t detect movement in a room for a specified period of time — essentially meaning the home owner is in another room or not at home — then the integrated system can dim or turn off lights and adjust the temperature, reducing energy usage and saving the home owner money.

When discussing energy efficiency options with clients, remodelers should ask the following types of questions:

  • Would you like to monitor energy usage and possibly decrease the cost associated with utilities?
  • Would you like to reduce your home's energy usage?
  • Do you anticipate upgrading your appliances or electronics in the home in the future?
  • Do you have concerns about the long-term impact energy use has on the environment and sustainability?

Baby Boomers — A Large Population Segment With Plenty of Disposable Income

According to ImmersionActive.com, an Internet marketing group that focuses on baby boomers, 78 million people aged 50 and over control 67% of the country's wealth (as of 2001) and have $2.3 trillion in disposable income.

When working with these clients, especially baby boomers, remodelers should ask then:

  • How important is it to you and your family to be connected?
  • Do you want to store electronic data such as movies and photos of your grandchildren?
  • Do you have elderly loved ones living independently who are in ill health or who require routine monitoring?
  • Is an elderly parent living with you, or do you anticipate one moving into your home in the future?
  • Do you anticipate children or grandchildren living in your home in the future?

Looking for Extra Opportunities? That’s Home Entertainment

The sale of movie tickets is dropping while video rentals and online streaming movies are on the rise. And that’s just the tip of the iceberg.

Entertainment — which includes movies, music and gaming — is big business.

According to the box office data service, The Numbers, 310 movies with a combined gross of $5.7 billion were released in 1996. Ten years later, 809 movies were released with a combined gross of $9.2 billion. In 2008, 1,065 were released, but gross sales fell to $8.0 billion.

What caused the decrease? Increased DVD rentals and a surge in on-line rentals.

Companies such as Netflix and Blockbuster Online revolutionized the movie rental business. Also, while it used to take several months for a movie to be released on video, it now takes about 90 days.

The gaming industry is also having a tremendous impact on the economy, technology and the consumer market. According to Gamespot.com, the video game business grossed $11 billion annually in 2004, which was more than movie box-office sales that year. Three years later, annual sales topped $18 billion.

Like increasing energy efficiency and addressing the needs of baby boomers, accommodating clients’ movie and gaming entertainment needs — through dedicated space or reconfigured common space — represents a huge opportunity for remodelers that should not be overlooked.

Peggy Ward is an industry outreach education manager for CEDIA, the custom electronics design and installation association. For more information, e-mail Ward, or call her at 800-669-5329 x164.


CEDIA: A Source for Experienced ESCs

CEDIA, the Custom Electronic Design Installation Association, is a founding sponsor in the Home Technology Alliance and an international trade association of companies that specialize in designing and installing electronic systems for the home.

CEDIA members are established and insured businesses with bona fide qualifications and experience in this field. CEDIA serves as a source for electronic systems contractors (ESCs).

For more information on CEDIA, visit the association’s Web site at www.cedia.org. To find an ESC, click here.

 

Pella Reminds Consumers Clock Is Ticking on Energy Tax Credits

Pella is reminding consumers that the clock is ticking for home owners who want to take advantage of the U.S. energy tax credit for making energy-saving home improvements like window and door replacements.

To receive the credit, qualifying energy-efficient windows and doors must be installed by Dec. 31.

“Now is the time to replace drafty or worn-out windows or doors with more energy-efficient ones from Pella,” said Kathy Krafka Harkema.

“Not only can home owners improve their home’s energy efficiency before colder winter weather sets in, but they can update their home before holiday celebrations and take advantage of a U.S. energy credit that could help lower their taxes.”

Budget-conscious consumers are placing a priority on energy-saving products this season, Krafka Harkema said. Consumers who replace items with more energy-efficient options can realize long-term energy savings and earn a short-term defense against rapidly rising energy prices.

For a previous story in Nation’s Building News on the energy tax credit, click here.

Headquartered in Pella, Iowa, Pella Corporation is a member of the National Council of the Housing Industry — The Leading Suppliers of NAHB.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

Endowment Awards $70,000 in Scholarships to More Than 440 Students Attending IBS

The National Housing Endowment has awarded approximately $70,000 in travel scholarships to more than 440 students from 45 colleges, high schools and technical schools across the country that have students attending the 2011 NAHB International Builders’ Show in Orlando in January.

In addition, 13 home builders associations have committed more than $23,900 in matching funds to help support students that they sponsored to attend.

Most of the students attending IBS are between two and four years away from beginning careers in the home building industry.

The scholarships ― in conjunction with the Home Builders Institute ― enable NAHB Student Chapter members to offset some or all of their travel and attendance expenses at IBS. Providing funding to students has proven to be instrumental in helping them learn outside the classroom and prepare for careers in the home building industry.

The IBS scholarship program also helps give young NAHB members the tools to enter into the association as graduates and to become future leaders.

“The board of trustees of the National Housing Endowment felt this program was too valuable and that is why they made the decision to continue funding this program,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “Even in these tough economic times, we still must invest in the future of our industry.”

Ever since Student Chapter activities and competitions have been held at IBS, students and faculty have been challenged to raise enough funds to attend the show. The endowment scholarship program helps them defray some of their expenses.

Andrew Sams, a construction management and building science major at Appalachian State University in Boone, N.C., as well as the school’s Student Chapter president, said he appreciated the opportunity to attend IBS.

“IBS has really put the residential construction industry in perspective and allowed me to understand the magnitude of the industry,” Sams said. “I strongly feel that there is no better educational experience out there. Hands down.”

“The endowment is working to increase the number of professionals entering residential construction and this scholarship, along with other programs we sponsor, is leading the effort to encourage the best and brightest to choose this rewarding career,” said Garczynski. “We are so appreciative of our partnership with the Home Builders Institute and the NAHB Student Chapters, without whose support this program would not be such a success.”

For more information, visit the endowment website at www.nationalhousingendowment.org.

 

NAHB Members Can Get Mouth Watering Discounts From Omaha Steaks

Omaha Steaks offers something for every NAHB member with its Superb Party Pack.

Starting with world-famous Omaha Steaks filet mignons — buttery, tender, mild and delicious — the party pack also includes bold and beefy top sirloins and Omaha Steaks burgers, boneless chicken breasts and stuffed baked potatoes.

The Superb Party Pack — Item# 40782WRB

  • 2 (6-ounce) filet mignons
  • 2 (6-oounce) top sirloins
  • 4 (4-ounce) Omaha Steaks burgers
  • 4 (4-ounce, approximately) boneless chicken breasts
  • 6 (5.75 oz.) stuffed baked potatoes
  • Plus, free Carnegie Deli cheesecake

Regular Price: $132.00/Special Price: $52.99

To Order

To order online, click here. To order by phone, call 800-291-5700. Mention or indicate NAHB membership when ordering.

This offer can only be redeemed online and by phone, mention NAHB membership. Standard shipping and handling will be applied per address. Add any applicable sales tax. Offer expires on Dec. 31, 2010.

Other Member Advantage Discounts

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

Free Webinar on HBA Membership Retention ‘Touch System’ Program Held on Nov. 16

NAHB will be conducting a free webinar on its new Touch System — a subscription- and local-based, highly customizable member retention communications program — to ensure that as many HBA executive officers and staff as possible can learn how to use this valuable member retention tool.

The webinar will be held at 1:00 p.m. EST on Tuesday, Nov. 16.

The Touch System was specifically designed to provide small and mid-sized associations with the same sophistication and capabilities to “touch” their members that, until recently, could only be accomplished by the largest and most sophisticated associations.  

Presenting the next generation in membership marketing, the Touch System webinar will show attendees how to target HBA members in each of three retention risk groups — determined by a member's length of membership. The risk groups include:

  • High risk — Members who are in their first two years of membership. They represent about 35% of an HBA’s overall members and have a retention rate of about 40% to 45%.

  • Medium risk — Members who have been with their HBA from three to five years. While their retention rate is higher, it is below 70%.
     
  • Low risk — Members who have been with their HBA for more than five years. They generally are solid, reliable members who are committed to their association, but they should not be overlooked when implementing a retention program.

During the webinar, EOs and HBA staff also can learn how to use the system to customize retention materials — from an eight-page brochure to e-mails and letters — to include HBA-specific content, such as unique benefits and opportunities available to their members.

To Register

To register, visit www.nahb.org/touchsystem.

For more information, e-mail William Deiss at NAHB, or call him 800-368 5242 x8231.

FTD Offers Members 20% Discount Till the End of the Year and Just in Time for Thanksgiving

FTD is offering a special 20% discount on all flowers and gifts for NAHB members till the end of the year.

Just in time for Thanksgiving, hosts can use the discount for their table’s centerpiece or guests can use it when they don’t want to arrive empty-handed.

To give the holidays an extra splash of color and to take advantage of the discount, visit www.ftd.com/nahb20.

Other Member Advantage Discounts

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

 

FedEx Offers NAHB Members Big Savings on Express, Freight and Ground Shipping

NAHB members can save up to 29% on select FedEx Express shipping services and up to 70% on FedEx Freight.

There are no costs and no minimum shipping requirements to take advantage of this member benefit.

  • FedEx Express: Save Up to 29%*
    Fast, reliable delivery of time-critical shipments

  • FedEx Ground: Save up to 20%*
    Cost-effective delivery of shipments that don't need the speed of express shipping

  • FedEx Freight: Save up to 70%*
    Day-definite delivery of LTL (less-than-truckload) freight, palletized or non-palletized
    Specializing in reliable, responsive next-day and second-day regional service in the continental U.S.

Drop off shipments at thousands of convenient locations. Ship and manage packages and take advantage of shipping tools and resources at fedex.com.

For more information, or to enroll in this program, click here, and enter passcode HVCSP8.

For more information, call 1-800-MEMBERS (800-636-2377) between 8:00 a.m. and 6:00 p.m. EDT Mondays through Fridays to speak to a dedicated member service representative.

* For terms and conditions, click here.

Other Member Advantage Discounts

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

NAHB Members Can Register With Office Depot to Always Save 10%

NAHB members who register with Office Depot can save 10% on delivery orders (excluding technology).

To set up an account and receive discounts, members can call 800-274-2753 to register and tell the Office Depot representative that they are members of the Office Depot NAHB Program. 

NAHB members also can save 10% on ink, toner, paper and Office Depot’s Copy, Print & Ship Services by enrolling in the Worklife Rewards program.

For more information and to enroll, call 800-274-2753, or visit www.officedepot.com/nahb.

Other Member Advantage Discounts

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

NAHB Calendar of Events

Nov. 17-19

2010 Winter Executive Board Meeting

Washington, D.C.

Nov. 18

"New Horizons: Design Trends & Market Trends" 

Webinar

Dec. 8

"Nothing But the Facts About Climate Change, Density and Development”

Webinar

Dec. 16

"New Horizons: Marketing in a New Business Environment"

Webinar

2011

 

 

Jan. 8-9

"Advanced Green Building: Building Science"

Orlando, Fla.

Jan. 8-9

"Understanding Housing Markets and Consumers (IRM I)"

Orlando, Fla.

Jan. 9

"Business Management for Building Professionals"

Orlando, Fla.

Jan. 10

"Business Accounting and Job Cost"

Orlando, Fla.

Jan. 10

"Customer Service"

Orlando, Fla.

Jan. 10

"Designing for the Active Adult"

Orlando, Fla.

Jan. 10

"Marketing & Communications Strategies for Aging & Accessibility (CAPS I)"

Orlando, Fla.

Jan. 10

"Negotiating Skills"

Orlando, Fla.

Jan. 10

"Train the Trainer"

Orlando, Fla.

Jan. 10-11

"Advanced Green Building: Project Management"

Orlando, Fla.

Jan. 10-11

"Green Building for Building Professionals"

Orlando, Fla.

Jan. 10-11

"Marketing Strategies, Plans and Budgets (IRM II)"

Orlando, Fla.

Jan. 11

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 11

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 11

"Construction Contracts and Law"

Orlando, Fla.

Jan. 11

"Design/Build Solutions for Aging and Accessibility (CAPS II)"

Orlando, Fla.

Jan. 11

"Estimating for Builders and Remodelers"

Orlando, Fla.

Jan. 11

"Marketing to the Active Adult"

Orlando, Fla.

Jan. 11

"Professional Remodeler Experience Profile (PREP)"

Orlando, Fla.

Jan. 11

"Project Management"

Orlando, Fla.

Jan. 11

"Train the Trainer"

Orlando, Fla.

Jan. 12

The Nationals — National Sales and Marketing Awards Ceremony

Orlando, Fla.

Jan. 12-15

2011 NAHB International Builders' Show

Orlando, Fla.

Jan. 13

Safety Award for Excellence (SAFE) Ceremony

Orlando, Fla.

Jan. 14

"Builder Assessment Review (BAR)"

Orlando, Fla.

Jan. 14

"Professional Remodeler Experience Profile (PREP)"

Orlado, Fla.

May 1-3

National Green Building Conference

Salt Lake City, Utah

May 18-21

Spring NAHB Board of Directors Meeting

Washington, D.C.

Aug. 17-20

Executive Officers Council Seminar

Naples, Fla.

Learn More About 2009 NAHB Professional Development Offerings

See the variety of professional development offerings available through NAHB and its local associations in this brochure. 

Or, search for specific course offerings and check out upcoming conferences.