Monday Morning Briefing Letter - 12/18/2006 (Plain Text Version)

By David Pressly, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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Regulators won't paint all real estate with the same brush

when assessing the risk of bank lending portfolios, according to newly released guidance that includes NAHB-advocated revisions to reflect the historically superior performance of housing production loans and multifamily mortgages.

The revised guidance for bank regulators makes clear that examiners will vary their standards for risk-management and capital according to the degree of risk posed by different types of loans. It specifically mentions pre-sold residential construction loans and multifamily mortgages as having good track records, and states that pre-sold buildings should be viewed as a form of risk mitigation. Prior to the latest revisions, NAHB was critical of the proposal because it failed to distinguish among the different types of real estate loans, which have significant variations in risk characteristics. NAHB specifically urged that regulators modify the guidance to reflect the positive historical credit performance of housing production (acquisition, development and construction) loans and multifamily mortgages. Our comment letters to the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) included data demonstrating the lower credit risk posed by residential real estate loans. Also, NAHB President-Elect Brian Catalde followed up by meeting with the heads of the OCC and OTS as well as with the Treasury Assistant Secretary for Financial Institutions. Contact: Dave Ledford, x8265 for details.

NAHB Member Benefit: In the final guidance, issued Dec. 6, all of the bank regulators noted the comments of NAHB and urged distinction among the different commercial real estate lending risk classes just as we had argued. As a result, the modifications in the final rule go a long way toward reducing the possibility that this new guidance could inhibit residential real estate lending and should thereby help maintain a steady flow of capital for our members' projects.

Important real estate provisions in a last-minute tax bill

that was approved as one of the final acts of the 109th Congress include the following items of interest to home builders:

Extension of the placed-in-service date requirement for the
GO Zone bonus depreciation on nonresidential real and residential rental property.
Extension of the New Markets Tax Credit program and expansion to
better serve the needs of rural communities.
One-year extensions of the credit for new energy-efficient homes,
the credit for residential energy-efficient property and the deduction for
energy-efficient commercial buildings.
Extension of expensing of brownfield remediation costs and expansion
of the definition of a brownfield to include sites contaminated by
petroleum products.
Permanence for a change to the veterans' mortgage revenue bond
program that eliminates that program's sunset in certain states.
Waiver of the first-time home buyer requirement for veterans in the
mortgage revenue bond program.
Establishment of a one-year deduction for private mortgage insurance.

Also of note for home builders was an item that was omitted from the bill. NAHB successfully lobbied against an inclusionary zoning mandate that would have applied to one aspect of the legislation that promotes land conservation efforts in White Pine County, NV. NAHB noted that inclusionary zoning policies are not an effective means of addressing a community's housing affordability problem and that any such solution must be derived locally, not from a federal mandate. Read more in NBN Online, or contact Greg Brown, x8421.

NAHB Member Benefit: As your voice on Capitol Hill, NAHB constantly reaches out to members of the relevant tax writing committees to ensure that housing-related preferences and provisions remain a cornerstone of the nation's tax code and to encourage appropriate funding of measures designed to improve housing opportunities across the country.
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Builder Magazine's 50 Most Influential People in Home Building,

named in the publication's December 2006 issue, include one particularly familiar face at the very top. NAHB CEO and Executive Vice President Jerry Howard is listed at No. 3 this time around, just behind Federal Reserve Chairman Ben Bernanke and Department of Homeland Security Secretary Michael Chertoff. Bernanke took top honors due to his position in control of the nation's monetary policy and the interest rates that are so crucial to home purchasers. Meanwhile, Chertoff came in second for his efforts to curtail illegal immigration through worksite crackdowns this year. At No. 3, Jerry was lauded for his "well deserved reputation for being a responsible voice for the home building industry," with particular praise for NAHB efforts in the past year to revitalize the FHA, support a guest-worker program for immigrants and establish a landmark partnership with the NAACP to address barriers to minority homeownership. President George W. Bush came in two spots lower, at No. 5, for his support of a guest-worker provision as part of immigration reform efforts. Speaking to the building industry executives that are its primary readership, Builder said, "If your name is here, it's a testament to your vision and success during difficult times." See Builder Magazine for details.

NAHB Member Benefit: The high visibility and clear recognition of NAHB's leadership is a testament to the strength of our 235,000 members nationwide and the sure-footed direction of our dedicated Board of Directors. This recognition ensures that NAHB is at the table whenever crucial policies regarding home building are being debated in the corridors of Congress, the federal regulatory arena and elsewhere. [return to top]

Awards News: Green Building, Public Relations & Construction Safety

National Green Building Awards: Deadline Approaching
Enter your green building program, project or marketing plan to win by Dec. 29.
Winners will be awarded during the 2007 National Green Building Conference in St. Louis, MO on March 25. Contact Calli Schmidt (x8132) for more information.

NAHB Wins 2 National Awards for Public Relations
NAHB's own Building Homes of Our Own program and Nation's Building News Online publication have each been honored with a PR News Nonprofit Award. Our interactive teaching tool for students, teachers and parents won in the "Interactive PR and Marketing" category while NBN Online won in the "Membership Communications" category. Both awards were bestowed to NAHB Public Affairs staff during a special ceremony held at the National Press Club on Dec. 11. Read more here.

Tickets Available for Safety Awards Luncheon at IBS
In conjunction with the upcoming International Builders' Show in Orlando, NAHB will be presenting the First Annual Safety Awards For Excellence (SAFE) luncheon in recognition of builders who have developed excellent work site safety programs and made outstanding contributions to advancing construction safety. The event is planned for 12:30-2:30 p.m. on Friday, Feb. 9 at the Peabody Orlando Hotel just across the street from the Orange County Convention Center. Tickets are $50 per person or $450 for a table of 10. Award finalists will be posted on www.nahb.org/SAFE on Monday, Dec. 18. Advance registration is required, so click here to purchase tickets prior to Feb. 1. Contact: Delicia Jenkins, x8163. [return to top]

Check out the latest edition of NAHB's Housekeys,

our recently launched, consumer-focused e-newsletter. In the latest report, nationally syndicated real estate columnist Ken Harney explains how consumers can buy and sell in a soft market, and still come out ahead. Also included in this issue are stories dealing with New Year's resolutions for the home, ways to celebrate a hassle-free holiday and what it means to "age in place," among other interesting material. Access NAHB's HouseKeys online, and subscribe to receive every issue free of charge at www.nahb.org/housekeys. Contact: Niki Clark, x8061.

NAHB Member Benefit: HBAs and NAHB members across the country have strongly embraced this new online publication by using its content in their own newsletters and brochures, distributing print-outs of it at home shows and linking to the subscription page from their own Web sites. This great resource can help you connect with potential home buyers and provide them with "news you can use" on today's housing market. [return to top]

The Monday Morning Briefing returns next year

after a two-week break during the holidays. No edition will be published on either Monday, Dec. 25 (Christmas Day) or Monday, Jan. 1 (New Year's Day), when NAHB offices will be closed for the federal holidays. In addition, NAHB offices will close at noon on Friday, Dec. 22 and Friday, Dec. 29 immediately preceding the holiday weekends. Look for our next edition dated Monday, Jan. 8. Until then, we wish you a very happy holiday season! [return to top]