Monday Morning Briefing Letter - 03/05/2007 (Plain Text Version)

By Brian Catalde, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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President Bush's FY 2008 budget request

contains proposed program funding levels and initiatives that are important to our industry.

Although the final outcome of the appropriations process is far from certain given the change of leadership that has taken place in Congress, the President's proposal serves as a starting point for congressional action on the budget. Its details are therefore of significant interest to NAHB as we prepare to wage the battles that will need to be fought to ensure the best possible outcome for housing.

Highlights of the FY 2008 Budget Request include:

1. A proposal for reform of the housing government sponsored enterprises (GSEs)
     and creation of a new independent regulatory agency to oversee the GSEs.

2. A proposal to revitalize FHA's single-family mortgage insurance program through
   legislation that would include an increase in the FHA single-family loan limit from
     87% to 100% of the conforming loan limit.

3. $16 billion in funding for the Section 8 program.

4. Elimination of the HOPE VI program from the budget.

5. $3 billion in funding for Community Development Block Grants (CDBG), which
   is down $735 million from FY 2007.

6. A proposal to transfer the Brownfields and Economic Development Initiative
     program, the Rural Housing and Economic Development program and the Section 108
   Loan Guarantee program to a newly consolidated grant program under the CDBG.

7. An assumption that there will be an increase in the up-front mortgage
     insurance premiums for the FHA single-family programs from 150 basis points
   (1.5%) to 166 basis points. The annual MIP is also assumed to increase from
   50 basis points to 55 basis points.

8. Elimination of the Partnership for Advancing Technologies in Housing
   (PATH) as a stand-alone program.

9. Elimination of the Section 515 Multifamily Rural Rental Housing Direct Loan program.

10. Another call for making permanent the tax cuts enacted in 2001 and 2003.

11. Increased funding for the Building Technologies Program to $86.4 million.

12. An increase in Alternative Minimum Tax exemptions levels for 2007 to
     $43,900 for single and head-of-household filers, and $65,350 for married
      taxpayers filing jointly.

13. An indication that the EPA will seek $912 million for activities related to
      clean air and global climate change in 2008.

14. $146.5 million in funding for Endangered Species Act implementation,
      up $1.2 million from the previous level.

15. $1.518 billion for the Job Corps program, down about $55 million from 2007.

16. $50 million for the Youthbuild program to be newly housed at the Department of Labor.

NAHB Member Benefit: The president's budget serves as a starting point for congressional action on the budget, and the ensuing approprations process is certain to be highly contentious as lawmakers who craft the actual spending bills address their own legislative, district- and state- based priorties. NAHB will exercise its significant lobbying clout throughout this process to ensure the best possible outcome for housing and our members' businesses. For more information, contact Jenna Hamilton at x8407.

NAHB's "Buy Now" Ad Assistance program,

which we told you about last week, is off to a great start. This groundbreaking grant program is NAHB's way of reaching out to help our HBAs and members who are struggling to reassure and encourage home buyers in markets where home sales and production have dropped significantly over the past year. A total of $3 million in assistance through matching funds and other grants is planned for this effort, which allows HBAs to conduct their own market-specific ad campaigns aimed at bolstering buyer confidence. At last count, NAHB had already received requests from 15 HBAs totalling nearly $475,000 worth of grants – enough to generate well over $1 million worth of advertising! Read more about this program online, or contact Niki Clark at x8061.

NAHB Member Benefit: The "Buy Now" assistance campaign for HBAs is a prime example of how your NAHB membership dues dollars are being put to work for you. NAHB routinely devotes resources and expertise to support our local HBAs and their members, and this most recent program is one of the largest such efforts yet. The idea is to help home buyers see the positives of today's housing market and drive more business to your door using tried and true advertising techniques and messages tailored to each specific market. Also, please see NAHB's Web site for a variety of "It's a Great Time to Buy" materials that you can use right now -- from press releases to sample op-eds, ads and public relations tips. All of these helpful resources are available free of charge to NAHB members. [return to top]

A 16.6% decline in new-home sales this January

largely reflected a return to more normal weather conditions following weather-related sales gains during November and December, according to NAHB Chief Economist David Seiders. The Commerce Department reported the January decline on Feb. 28, indicating that the seasonally adjusted annual pace of new-home sales in the first month of this year fell to 937,000 units – a 20% decline from year-ago figures. Yet, NAHB's monthly surveys have actually been showing modest improvements in builder confidence regarding home buyer demand since last September. And, while new-home sales statistics continue to show a lot of month-to-month volatility, the pattern has been fundamentally flat since the middle of last year, with the market being supported by solid gains in employment and personal income, as well as by a historically low interest rate structure. Another positive on which to focus: The inventory of new homes for sale edged down in January, to 536,000 units. That's the lowest it has been since February 2006 and equavalent to a 6.8 months' supply at the January sales pace. Read NAHB's press release for more, or for help dealing with media inquiries, contact Paul Lopez at x8409.

NAHB Member Benefit: NAHB conducts regular and extensive media outreach when government housing figures are released each month to educate reporters about the historical context in which numbers should be viewed, discourage sensationalized accounts and ensure that home builders' views are represented. NAHB also assists our members in dealing with media inquiries regarding the latest government and NAHB data. [return to top]

Ramping up NAHB's visibility in Washington

is one of the goals of a series of ads that are being run in National Journal – one of the most widely read weekly news magazines on Capitol Hill – as well as other Washington-based publications that are regular resources for members of Congress and their staff. The latest in this series, a full-page color ad (pictured at right), ran in the Feb. 24 and March 3 editions of National Journal. This ad campaign, which is spearheaded by Public Affairs Committee Chairman Andrew Chaban as well as the Public Affairs and Federal Government Affairs staff, is aimed at increasing recognition of NAHB as the Voice of Housing in America, reaffirming the importance of housing to all Americans, and promoting action on NAHB's top legislative and regulatory priorities in the new Congress. Contact: Jay Shackford, x8406.

NAHB Member Benefit: Increasing recognition of NAHB as a resource and authority on housing issues for members of Congress and their staffs can greatly benefit our members because it increases our access to federal lawmakers and helps ensure that your national association has a seat at the table when negotiations are underway regarding legislation and policies affecting your business. [return to top]

Honoring the top job-site safety programs

in the country and those individuals who have developed and implemented such measures, NAHB proudly bestowed our new Safety Awards For Excellence (SAFE) in a special ceremony during the International Builders' Show this February. Recipients were recognized for achieving excellent safety records, creating outstanding safety education programs and forming continuing partnerships with state and local OSHA officials – all with the aim of making work sites safer for home building industry employees. While there were simply too many honorees to name in this report, you can get a complete listing and description of what each winner did to deserve such recognition in NBN Online. Contact: Rob Matuga, x8507.

NAHB Member Benefit: NAHB works closely with OSHA to ensure the greatest level of worker safety possible while also ensuring that government rules are clearly defined, fairly enforced and mindful of the many differences between commercial and residential construction sites. The SAFE Awards help put a spotlight on the best practices in work site safety and those in our industry who are developing and employing them, so that the actions of those people and their companies may serve as a model for others. [return to top]

New Homes Month is right around the corner,

and NAHB has free resources to help you promote it. It'll be April before you know it, and New Homes Month will be in full swing. Why not check out NAHB's great online resources for targeting potential home buyers with messages focusing on quality construction, location, new-home amenities, and more? Whether your HBA needs a column for its monthly newsletter, you need a sample op-ed to turn in to your local newspaper, or you need a print advertisement, this is where you'll find it: www.nahb.org/newhomesmonth. For more information on New Homes Month and what NAHB can do to help its HBAs and members promote it, contact Niki Clark at x8061.

NAHB Member Benefit: New Homes Month is a great time to promote your product and get the word out about what a good time it is to buy a home. NAHB gives you all the resources you need to develop and transmit your message — from sample press releases and op-eds to ad copy, special reports and more. [return to top]

Two more local green building programs

based on NAHB's Model Green Home Building Guidelines are getting set to launch in New Orleans and Springfield, Mo. this month. The New Orleans program aims to boost durability and sustainability through green building practices in that flood-damaged city, and HBA members are working with local officials to explore incentives for builders who certify their homes as green using its precepts. Meanwhile, the Springfield program is being launched with the assistance of the HBA of St. Louis and Eastern Missouri, whose own voluntary green building program has been in motion going on three years now. And speaking of St. Louis — that city will be hosting the upcoming National Green Building Conference on March 25-27. Find out how to register for this great event on NAHB's Web site. Don't delay! Contact: Calli Schmidt, x8132.

NAHB Member Benefit: NAHB is helping our members understand the green building process and advocate for voluntary programs through a number of educational initiatives, including our annual National Green Building Conference and the NAHB Model Green Home Building Guidelines. Published in 2005, the voluntary Guidelines cover seven areas, including lot preparation and design; resource efficiency; energy efficiency; water efficiency and conservation; occupancy comfort and indoor environmental quality; and operation, maintenance and homeowner education. [return to top]