NAHB Ramps Up Opposition to HUD Mortgage Interest Premium Increase
NAHB staff continues to work with the Mortgage Bankers Association (MBA) and others in lobbying Congress regarding our strong and collective opposition to HUD’s budget proposal to nearly double the mortgage insurance premium (MIP) on most FHA multifamily mortgage insurance programs.

A joint letter, signed by 11 industry groups, was sent to the Chairman and Ranking member of the House Appropriations Committee, as well as to the Senate Appropriations Committee, urging Congress to reject HUD’s proposal to raise revenue by increasing the MIP beyond what is needed to ensure the financial soundness of the FHA fund.  (View NAHB analysis here.)  

Although the House appropriations committee directed HUD to conduct a full notice and comment rulemaking before making this change, HUD simply announced the proposed increase through a Notice. (View the Notice here.) NAHB plans to submit comments concerning this proposal, and plans to organize a sign-on letter, to be submitted by a group of housing industry organizations. For more information, e-mail Claudia Kedda, or call her at 800-368-5242 x8352.

Legislative: Section 8 Reform; Mark-to-Market Program
 

• Section 8 Reform Bill Would Open Affordable Doors to Military Personnel

NAHB took a significant step forward this month in expanding affordable housing opportunities for enlisted military personnel. During consideration of Section 8 reform legislation (H.R. 5443), Representative Al Green (R-TX) offered an amendment for himself and Representative Jim Ryun (R-KS) that would require that the treatment of service members’ Basic Allowance for Housing (BAH) be the same as that of Section 8 when determining income for affordable housing, such as the Low Income Housing Tax Credit (LIHTC) program. This would essentially exclude the BAH from being counted as income in the process of qualifying enlisted military personnel for housing credit apartments. It’s unclear at this point when the full House might take up H.R. 5443.

Earlier this year, Representatives Ryun and Green introduced stand-alone legislation — the Build HOMES Act — addressing this issue. NAHB testified in favor of the legislation during a hearing at that time. Companion legislation has not yet been introduced in the Senate for either the current bill or for the Build HOMES Act. NAHB continues to work with key Senators on both of those efforts. For more information, e-mail Greg Brown, or call him at 800-368-5242 x8421.
 

• Member Input Needed on Reauthorization of the Mark-to-Market Program

NAHB is looking for input on the bills that have been introduced – one in the House, one in the Senate – aimed at reauthoizing the mark-to-market program. This is HUD’s primary program to preserve affordable housing, and is scheduled to sunset on September 30.

The House bill (H.R. 5527) reauthorizes the program for five years to October 1, 2011. It was approved by the House Financial Services Committee last week. Hearings on the Senate bill (S. 3511) by the Banking, Housing and Urban Affairs Committee also were held last week. The Senate bill would reauthorize the program for five years, but it includes a provision that would allow HUD to expand the program to include FHA-insured properties with Section 8 project-based rents that are at or below market rate. This is a major departure from current law.

Some industry groups are concerned that HUD could use the new authority to require property owners who have low REAC scores to restructure or be forced out of the program if they did not comply, because HUD would then refuse to renew the section 8 project-based contract.  There is discussion of a possible compromise in which the provision would remain in the bill, but property owners’ participation in a restructuring would be voluntary. (For more history and details, view this link.)

NAHB staff seeks input from members as to whether projects with below-market rents should be included on a voluntary basis. Please e-mail Claudia Kedda or call her at 800-368-5242 x8352 to provide your feedback.

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Regulatory: Eminent Domain; New HUD Official

• Presidential Executive Order Speaks to Eminent Domain

President Bush has issued an executive order that says, in essence, that federal government agencies and departments will not take private property for the purposes of economic development. Authority to take property for other purposes remains unchanged.

• New Face at HUD

On July 3, Ed Szymanoski will take over as Director of the Economic Market Analysis Division in the Office of Policy Development and Research at HUD. This is the office that generates Fair Market Rents, income limits, and annual inflation adjustment factors used in HUD's rental housing programs.

Legal: NAHB Awarded Standing in Connelly Fair Housing Case
In the Fair Housing discrimination case which NAHB member Kevin Connelly brought against the city of West Columbia, SC, where his proposed low-income housing tax credit project was blocked by the local jurisdiction, NAHB and the builder have gained standing. That means that the court recognizes that builders and developers, who are in the business of providing affordable housing, can be proper entities to bring a Fair Housing lawsuit when the effect of government land use decisions is racial discrimination. Hotline will keep you posted as the case goes forward. [return to top]

Finance/Taxes: Builders Benefit in Final Section 199 Regulations
The Department of the Treasury’s  recently published final regulations for the section 199 domestic production activities deduction (part of the American Jobs Creation Act of 2004)  clarify IRS rules for the deduction that reduces tax liability for businesses that manufacture goods or construct property in the United States. The final regulations include a number of changes that are favorable to the construction industry, including residential builders.

For tax year 2006, the deduction is equal to 3% of a business’ qualified production activities income (QPAI). The percentage will rise from 3% to 6% for tax years 2007, 2008, and 2009, and then increase to 9% for tax years after 2009.

QPAI is equal to the excess of qualified domestic production gross receipts (DPGR) over the sum of business expenses associated with such receipts. Thus, the greater the receipts that are included in DPGR, the greater the tax benefit to the builder.

DPGR is the taxpayer’s gross receipts derived from any lease, rental, license, sale, exchange, or other disposition of qualifying production property that was manufactured, produced, grown, or extracted within the United States. Of particular interest to builders, DPGR also includes construction, engineering and architectural services performed for domestic construction projects. Subsequent legislation limited the deduction to 50% of wages paid by the taxpayer that are allocable section 199 qualified activities. 

The first set of IRS guidance presented potential obstacles to builders for implementing section 199 (IRS Notice 2005-13 and draft regulations REG-105-847-05). However, comments submitted to the Department of the Treasury by several coalitions of home builders and NAHB resulted in final regulations with significant improvements, with additional guidance coming at the end of 2006, and in 2007. (See this link for details.)

Builders should be sure to check with their tax professionals to determine how section 199 will benefit their businesses. See the full final section 199 regulations at this link.

NAHB will continue to monitor the operation of section 199 for builders and examine new rules and regulations as they are published. For more information on this or other tax issues, please contact NAHB’s tax advocacy staff - Robert Dietz (800-368-5242 x8285) and Greg Brown (x8421). [return to top]

Environment: EPA Proposes Regulating Construction Dust
A proposal from the Environmental Protection Agency would, if adopted, establish a 24-hour “coarse particulate standard” for job sites in urban areas — those with populations of 100,000 or more. This is based on the premise that dust from a construction site is somehow more dangerous than other dust.

NAHB disagrees, and has submitted comments to the Agency to that effect. NAHB has identified 19 metro areas that do not meet current standards and would likely be forced to comply with the more stringent proposed standards. For more information, e-mail Calli Schmidt, or call her at 800-368-5242 x8132. [return to top]

Construction/Codes: A Little Light Reading?
NAHB’s Construction, Codes and Standards (CCS) staff is are preparing for the upcoming hearings on proposed changes to the International Building Code. There are nearly 2,400 proposed changes to consider (65 proposed by NAHB), and nearly 40 builder members of the CCS’s Proposal Oversight Group will meet Aug. 14-16 to review them. The public hearings on the proposed changes will take place Sept. 20 through Oct. 1 in Orlando.  For more information, e-mail Jeff Inks or call him at 800-368-5242 x8547. [return to top]

Association News: Success on Membership Day; CEUs for Multifamily Designation Holders

• Local HBAs Shine During National Membership Day!

Congratulations to the local Home Builder Associations that came together to help make this year’s National Membership Day campaign the most successful Membership Day ever for NAHB Multifamily.

The AHB of Greater Birmingham, HBA of Greater New Orleans and the Peninsula Housing & BA all worked together to help surpass prior Multifamily Membership Day totals by more than 300%. In doing so, they all won great prizes ranging from American Express and Office Depot gift cards, to free registration at next year’s Pillars of the Industry Conference and Awards Gala. This is a sign of the importance and long-lasting effect that the multifamily sector of the housing industry has had – and will continue to have – on our country. While this is very impressive growth in membership, the increased importance of the condo and rental markets will likely make next year’s Membership Day even better!  For more information on Multifamily membership, e-mail Lawrence McFadden, or call him at 800-368-5242 x8550.

• Multifamily Designation Holders Can Earn CEUs at Multi-Housing World

Multifamily housing professionals who currently hold a Registered in Apartment Management (RAM) or Housing Credit Certified Professional (HCCP) designation can earn the continuing education credits (CEUs) needed to keep their designations current at the upcoming Multi-Housing World conference, held at McCormick Place in Chicago, Sept. 19-21.

Calendar: Mexico Trade Mission; Tax Credit Forum; Fall Leadership Board in Dallas

• NAHB’s Next Trade Mission to Mexico, on the Beach — Aug. 13-15

Want to spend a few days at a top-rated luxury beach resort on Mexico’s lovely Banderas Bay, and learn about multifamily opportunities while you’re there? Apply now to be one of the NAHB members on a trade mission to Mexico. The base of operations will be, the CasaMagna Mariott Puerto Vallarta, from which trade mission participants will examine sites in Banderas Bay area.

The mission will give U.S.builders, suppliers, and other housing industry professionals a chance to explore opportunities in this growing residential, resort and retirement market. Participants will attend private briefings by government economic and tourism officials and private sector housing experts, and meet with builder members of Mexico’s Construction Industry Chamber (CMIC). Site visits to high-end residential, resort and retirement developments will round out the experience and provide an up-close look at this booming housing market.
 
To participate in the Trade Mission, please fill out the registration form and return by fax (202-266-8120) or e-mail to Michael Boyce. If you have any questions or need more information call 800-368-5242 x8419 or x8417.

• Surviving the High Cost Squeeze: Strategies for Tax Credit Developers — Sept. 13

NAHB’s Housing Credit Group will present a one-day Issues Forum in Salt Lake City, in conjunction with the Fall Board of Directors Meeting. View the details and register online at this link to the NAHB Web site.

• NAHB Fall Board of Directors Meeting —Sept. 13-17

View this page for online registration, and the schedule of committee meetings and events, including the Multifamily Board of Directors meeting and the Whirlpool reception. 

• Housing, Communication and Crisis: Framing
                        Messages to Build Public Support — Sept. 27-28

This conference, offered by the Campaign for Affordable Housing, will take place in Houston and will focus on framing messages that capture media attention and build public support for affordable housing issues, as well as applying the housing lessons learned in the wake of last year's gulf coast hurricanes to other "crisis" situations. For more information, visit the Campaign’s Web site.

Resources: Safety First, and Second

• Safety First – Builder Books Can Help

OSHA requires employers to train their employees to recognize and avoid safety hazards on the job and to understand the applicable safety regulations. To help meet this need, BuilderBooks.com offers numerous safety publications in both English and Spanish. 

The “NAHB-OSHA Jobsite Safety Handbook: English-Spanish Edition” is a pocket-size manual that covers the key safety issues on which residential builders need to focus to reduce injuries and fatalities. Topics include:
• Employee and employer duties
• Orientation and training
• Personal protective equipment
• Housekeeping
• Stairs and ladders

To view or order “NAHB-OSHA Jobsite Safety Handbook: English-Spanish Edition” online, click here, or call 800-223-2665.

• Jobsite Safety Available as a Video, Too

A companion "English-Spanish Jobsite Safety Video," based on the handbook and also available through BuilderBooks.com, provides an overview of the key safety issues on which residential builders and workers need to focus in order to reduce accidents and injuries and to comply with OSHA regulations. Two 20-minute videos — one in English, the other in Spanish — are included on one DVD.

To purchase the video online, click here, or call 800-223-2665. To view or purchase other safety publications available at BuilderBooks.com, visit www.builderbooks.com/Safety.