Monday Morning Briefing Letter - 02/25/2008 (Plain Text Version)

By Sandy Dunn, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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NAHB's new Senior Officer team,

duly elected and inducted during the International Builders' Show in Orlando, is ready to serve you and the housing industry in 2008.

Rising to the top of the ladder to become the primary advocate of the nation's home builders this year, West Virginia home builder Sandy Dunn was elected 2008 NAHB President on Feb. 15. As president of Point Pleasant-based B.J. Builders, Inc., Sandy specializes in single-family, entry-level homes and has proudly provided affordable housing to Mountain State residents for more than three decades.

Next in the line of leadership is Tulsa, Okla.-based home builder Joe Robson, who was elected by unanimous consent to the position of NAHB First Vice President. A leader in the Tulsa area home building and development industries for more than 25 years, he is the founder and president of The Robson Companies, Inc., developers of residential communities and commercial properties. Following Joe on the leadership ladder is Bob Jones, who was elected to the post of Vice President/Treasurer. Bob is a home builder from Bloomfield Hills, Mich., who specializes in land development and the design and construction of luxury single-family homes throughout metropolitan Detroit. Joining the leadership ladder in 2008 is Bob Nielsen, who successfully ran for and achieved the office of NAHB Vice President/Secretary. Based in Reno, Nev., Bob has over 25 years of experience in the industry and has overseen the development of more than 45 new home communities housing 4,500-plus families. He is president of Shelter Properties Inc., a building and development company headquartered in northern Nevada that has constructed communities across the state as well as in California.

Meanwhile, 2007 NAHB President Brian Catalde, a home builder from El Segundo, Calif., moves to the post of Immediate Past President this year and will continue to serve a leadership role throughout his tenure. And finally, NAHB's Executive Vice President/CEO, Jerry Howard, remains in his post as the top NAHB staff member. All of your Senior Officers stand ready and eager to serve you and safeguard your best interests heading forward. Read our press release for more information, or contact Cyndi McKinley Brown (x8346) regarding the senior officer election process.

NAHB Member Benefit: NAHB is a 100% member-run organization, whose senior officers are duly elected by the membership each year. Candidates' eligibility for office is determined by NAHB's Nominations Committee, with oversight by the Immediate Past President. The democratic process through which your NAHB leadership is selected ensures that every NAHB member has a voice in the way that NAHB is run and the policies upon which it lobbies and litigates.

Another amazing International Builders' Show

drew more than 92,000 housing professionals to Orlando for our industry's biggest event of the year last week. Highlights of this year's show included husband-and-wife keynote speakers James Carville and Mary Matalin at Grand Opening Ceremonies; the rollout of NAHB's new National Green Building Program and Certified Green Professional designation on Green Day; the election of our 2008 Senior Officers; tours of The New American Home 2008; several new resolutions passed by the Board as official NAHB policy; a panel of experienced builders sharing strategies for surviving an industry downturn; and of course the nearly 300 educational sessions and one million net square feet of exhibits on display over a huge expanse of space at the Orange County Convention Center. Several of these items are detailed below, and you can read more in the next NBN Online, to be published on Feb. 25, or in our wrap-up press release.

NAHB Member Benefit: The International Builders' Show is easily one of the biggest and most comprehensive benefits for NAHB members, drawing thousands of exhibitors with the latest products and services geared specifically to housing and light commercial construction and putting them under the same roof with top educational programs designed to help you grow your business. For many attendees, the value of what you learn and save at the IBS is far greater than your annual membership dues. Please join us when the International Builders' Show heads to Las Vegas in 2009 for an event that continues to grab more headlines and impress more builders with its spectacular offerings every year. [return to top]

NAHB's efforts in the first round of ICC code development hearings

regarding proposed changes to the International Residential Code have already achieved many favorable results on behalf of the home building industry. At the time that this report was published, NAHB members and staff were actively participating in the hearings that are taking place in Palm Springs, Calif. from Feb. 18 - March 1.

So far, we've achieved some crucial momentum in our ongoing efforts regarding fire sprinkler systems by successfully advocating to retain requirements for the systems in an appendix to the IRC where it would be available as an option, instead of a mandate, to all jurisdictions adopting the next edition of the code. NAHB proponents voiced concerns about the impact on housing affordability that would result from such a costly mandate, and they also identified concerns with a number of design and maintenance issues. NAHB also cited many of the existing code provisions that have dramatically improved the fire safety provided by new housing, including hard-wired smoke alarm systems.

However, the decision on a proposal to require fire sprinklers in all townhouses was close, and the measure only failed by a committee vote of 6-4. This, along with the other fire sprinkler proposals, will likely be subjected to a strong challenge at the final code hearings in September. Given the very close voting margins, we still face an uphill battle in which NAHB member participation and support are absolutely crucial. For details, please contact Steve Orlowski (x8303) or check out NAHB's Fire Sprinkler Action Kit at www.nahb.org/sprinklers.

NAHB Member Benefit: The above are just a few of the areas where NAHB will be serving as the voice of housing on future regulations that will govern the industry as code hearings progress. A full update on housing-related results from the first round of code hearings will be provided in an upcoming edition of NBN Online. [return to top]

A $168 billion economic stimulus package

signed into law last week contains some provisions that will help our industry. The measure will allow the FHA to insure loans of up to $729,750 for one year and will also raise the cap on loans that Fannie Mae and Freddie Mac can purchase to that same level, again for one year. The package also contains a 50% bonus depreciation in 2008 and more generous expensing rules for businesses. While these are all favorable elements, it's important to note that NAHB lobbied extensively for a broader plan in the Senate that would have expanded mortgage revenue bonds and allowed businesses to write off more losses. Unfortunately, this broader bill failed by a single vote and Congress moved quickly to enact a narrower version of the legislation that was previously approved by the House. As 2007 NAHB President Brian Catalde reported to the NAHB Board of Directors at the IBS, while this means that we didn't get everything we'd hoped for in an economic stimulus package, it doesn't mean we're giving up. Instead, NAHB will continue to vigorously lobby for individual pieces of legislation, including GSE oversight reform. NAHB Board members were encouraged to contribute to this effort by sending their own letters and opinions to their federal representatives through a letter-writing campaign conducted at the show. Read NBN Online for details, or stay tuned to this report for the latest updates. Contact: Greg Brown (x8421) or Scott Meyer (x8144).

NAHB Member Benefit: NAHB's extensive lobbying efforts on the economic stimulus package have been aimed at helping our industry get back on track as a primary engine of economic growth. [return to top]

Builders remained cautious as buyer traffic improved this month,

according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released Feb. 19. While the overall confidence gauge rose just one point to 20 in February, still close to its recent historic low reading of 18, a positive signal was derived from the index component for buyer traffic, which rose five points to its highest level since July 2007. "Some potential buyers who have been sitting on the sidelines are starting to at least research a new home purchase given improving affordability factors and the large selection of units on the market," noted NAHB Chief Economist David Seiders. That said, the current outlook remains quite subdued, and additional stimulative measures are definitely needed to bolster consumer confidence and help bring about a housing and economic recovery, he noted. Read our press release or see the HMI tables online. For help deciphering the HMI tables, please contact Gopal Ahluwalia (x8480) or Rose Quint (x8527); for help with media inquiries, contact Paul Lopez (x8409).

NAHB Member Benefit: NAHB's economic surveys and analysis help our members achieve a better understanding of current market trends and where they are headed, while our media outreach in this regard helps to firmly establish NAHB as the credible source of information on the housing industry nationwide. This credibility with the media ensures that accurate data on the housing market is transmitted to potential home buyers and the public at large, thereby discounting sensationalized accounts of market conditions that may affect your client's decision to purchase a new home. [return to top]

Builders continued pulling in the reins

on new-home construction in January as single-family housing starts declined 5.2% and single-family permit issuance fell 4.1% to their lowest rates since January of 1991. The U.S. Commerce Department reported on Feb. 20 that overall (single- and multifamily) starts were virtually unchanged in the first month of this year, hitting a seasonally adjusted annual rate of about 1.01 million units. With single-family starts at a seasonally adjusted annual rate of 743,000 units (multifamily starts partially rebounded from a big drop in the previous month to 269,000 units), NAHB noted that home builders are doing the responsible thing to bring supply and demand back into alignment by keeping the brakes on new construction. Read our press release or see the government's own report online. Contact Paul Lopez (x8409) for help with media inquiries. [return to top]

An important decision regarding BUILD-PAC disbursements

was announced in an official statement quoting 2007 NAHB President Brian Catalde on Feb. 12. The statement read:

"Today, the National Association of Home Builders' Political Action Committee, BUILD-PAC, and its 150-member Board of Trustees representing all 50 states, agreed to cease all approvals and disbursements of BUILD-PAC contributions to federal congressional candidates and their PACs until further notice.

"This extraordinary action was taken because the NAHB BUILD-PAC Board of Trustees felt that over the past six months Congress and the Administration have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward. Housing and related industries account for more than 16% of the Gross Domestic Product. More needs to be done to jump-start housing and ensure the economy does not fall into recession. This action will remain in effect until further notice."

The above announcement generated considerable media coverage, and several HBAs have been asked for comment by their local media outlets. It is important that local association staff do not make any comment on the matter beyond NAHB's statement, which is available here in its complete form. Please refer any inquiries from members of the media to NAHB Director of Media and Public Relations Donna Reichle, x8473. [return to top]

A special builder panel convened at the IBS

to help NAHB members find ways to navigate the many challenges of today's marketplace drew an impressive crowd of approximately 200 audience members. The Weathering an Economic Downturn session, modeled after a previous such session offered during NAHB's Fall Board of Directors meeting week in Seattle, featured seven veteran builders who have been through a business downturn and lived to tell about it. Moderator and 2007 Federal Government Affairs Committee Chairman Mike Sivage was joined by Bob Camp from Lakewood, WA; Steve Lawson from Virginia Beach, VA; Kevin Estes from Sequim, WA; Bob Hanbury from Newington, CT; Tom Woods from Independence, MO; and John Young from Rancho Cucamonga, CA. Each panelist was given five minutes to briefly describe his business, current conditions in his market, and how his business performed in 2007 compared to 2006 and 2005. Each was also asked to describe the most serious challenge he expected to face in 2008 and how he planned to address it. The remainder of the discussion was a wide-open forum in which audience members were encouraged to comment and ask questions. This extremely successful event will be covered in significant detail in NBN Online's March 3 edtion, and we plan to offer video highlights of the proceedings online within about a week – so keep an eye out for this great content! Please direct any questions about the builder panel at IBS to Jay Shackford, x8406.

NAHB Member Benefit: With the understanding that many of our members have never been through a market downturn, NAHB convened this expert panel to provide solid advice and insights that audience members can hopefully take home and apply to their businesses. One of NAHB's greatest member benefits is the access and networking opportunities that our organization provides for learning from your fellow members and colleagues from across the country. [return to top]

A big victory for Florida builders

arrived just in time to be appropriately recognized during NAHB's Board of Directors meeting at the International Builders' Show in Orlando this month. As reported by then president-elect Sandy Dunn at the meeting, on Feb. 1 the Florida Division of Elections announced that a potentially devastating amendment to the state constitution – called the Florida Hometown Democracy (FHD) proposal – had failed to qualify for the November 2008 ballot. This result was the culmination of a multi-year effort by NAHB, our High Production Home Builders Council, the Florida HBA and other coalition partners. The FHD proposal would have taken the responsibility of planning away from planners and local elected officials and required the voters to decide on every comprehensive plan amendment. In effect, the nation's most comprehensive growth management law was at risk of being replaced by ballot-box planning. Needless to say, the defeat of this amendment was absolutely essential for the future of the business community in Florida. Sandy congratulated not only the entire Florida delegation but also the current and past chairmen of NAHB's State and Local Government Affairs Committee and NAHB staff who have been involved in fighting this proposal over the last half-decade. See NBN Online or more information, or contact Steve Gallagher (x8319).

NAHB Member Benefit: NAHB has been helping our Florida builder members to fight off this proposed amendment every step of the way, for approximately the past five years. [return to top]

Resolutions approved by the Board of Directors at the IBS

as official NAHB policy are now available for members-only viewing on our Web site:

1. Addressing the Housing Downturn and Mortgage Credit Crunch

2. Cost-Effective and Affordable Energy Codes and Standards

3. Appraisals of Green Homes

4. Telecommunications Access, Marketing and Billing

NAHB Member Benefit: Through the NAHB Resolutions process, any member or HBA may submit new policy proposals for the Board's consideration. This process ensures that NAHB's goals, strategies and official policies are the direct product of its members' concerns and views, and allows individual NAHB members to have their voices heard on the national stage. Please direct any questions regarding the Resolutions process to Jay Shackford at x8406. [return to top]

New TV ads to promote home buying

have been produced by NAHB for the use of our members and HBAs on their local TV stations. The ads, which you can view here, promote the many benefits of buying a home today, pointing out that today's low interest rates, combined with the ready supply of homes on the market and available mortgage funds for borrowers with good credit, mean that there has rarely been as good a time to become a new home owner. Each ad is 30 seconds long, with time and space left at the end for HBAs to have their local station customize them with the HBA logo, Web site address or other information (many local stations will do small edits at either no charge or for a limited cost.) To request the ads in Beta SP or DVD formats, contact David Falcone in NAHB's production group at this address: productiongroup@nahb.com . For more information, contact Gwyn Donohue at x8447.

NAHB Member Benefit: NAHB members and HBAs that would like to advertise on local television but can't afford the production costs can place their own message on these ready-to-use spots, which can be modified to include their own name and contact information. [return to top]

NAHB's Quick Issues Index

documenting the latest advances on our top Advocacy issues was updated for the IBS Board of Directors meeting and is now available to you online. In Orlando, then-NAHB President Elect Sandy Dunn referred to the Quick Issues document as part of her report, and a copy was provided to every board member. This document is updated prior to every meeting of the NAHB Executive Board and is available for viewing by members only at www.nahb.org/issuesindex. Contact Samantha Ehrhart (x8450) for more info. [return to top]

The 25th edition of The New American Home

was unveiled at last week's International Builders' Show to appropriate acclaim by the public and media. As the official showcase home of the IBS, the residence is meant to serve as a real-world laboratory to introduce the latest theories and concepts in architectural design, product development, construction techniques and lifestyle trends. The National Council of the Housing Industry (NCHI)/Leading Suppliers of NAHB cosponsors the construction of the home along with BUILDER Magazine each year.

The 2008 edition was a collaborative effort between designer The Sater Group, builder Robertson Homes, interior designer Robb & Stuckey and landscaper Outside Productions. Located in an exclusive subdivision called Water's Edge , the 6,725-square-foot masterpiece overlooks Lake Nona in Orlando and features a family suite on the main level complete with special touches meant to accommodate an elderly parent or long-term guest. The expansive floor plan also includes a first floor full master suite, an open kitchen, leisure room, private balcony, sunroom and an upstairs club room equipped with theater-quality equipment. Just as important, The New American Home this year had the distinction of being the first official show home built and certified according to NAHB's new National Green Building Program and its special scoring tool. Among its many green features were an irrigation system using a rain sensor, manufactured floor trusses, water-conserving and energy-efficient appliances, a salt-water (versus chlorine) swimming pool, and low-VOC paints. Read more in our press release or in NBN Online. Contact: Tucker Bernard, x8519. [return to top]

NAHB's National Green Building Program is open for business

after being launched on "Green Day," Feb. 14, at the International Builders' Show in Orlando. The program combines educational, verification and certification elements to allow builders in any market to build environmentally sensitive homes. A centerpiece of the initiative is a dynamic online scoring tool at www.nahbgreen.org that shows the builder how to accrue points in seven categories, including: water, energy and resource efficiency; lot and site development; indoor environmental quality; global impact; and home owner education. Using this tool, homes are inspected and verified by local green experts and the documentation is sent to the NAHB Research Center for review. If the project qualifies, it can receive national certification. As our National Green Building Program gets underway, local HBAs will continue to provide education, advocacy and promotional assistance to their green builders using new, expanded resources from NAHB.

NAHB Member Benefit: NAHB builders have so far built 100,000 green homes certified by local programs across the country. The NAHB National Green Building Program builds on this energy and innovation and takes green building mainstream to allow all of our members to take advantage of this rapidly growing segment of the market. For more information, contact Calli Schmidt, x8132. [return to top]

10-time winner Indianapolis remains the most affordable

major housing market in the country, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) for the fourth quarter of 2007, released on Feb. 19. In that city, nearly 90% of homes sold in the final three months of the year were affordable to families earning the area's median household income of $63,800. One smaller metro market (fewer than 500,000 people) outranked even Indianapolis, however, with approximately 93% of all homes sold in the quarter being affordable to median income-earners. That metro was Kokomo, Indiana.

Meanwhile, nationwide, housing affordability increased in both the fourth quarter of 2007 and on a year-over-year basis, rising to the highest level since the first quarter of 2005. The overall HOI reading indicated that 46.6% of all new and existing homes sold in the country during 2007's final months were affordable to families earning the national median income of $59,000. A major factor in the improvement was mortgage rates, which, as they returned to near the record lows of a few years ago, helped more potential buyers to become eligible to purchase the home of their dreams. Read more in NAHB's HOI press release, or see the HOI tables online. Gopal Ahluwalia (x8480) or Ashok Chaluvadi (x8482) can help explain the tables, while Paul Lopez (x8409) is your contact for help with media inquiries. [return to top]