Monday Morning Briefing Letter - 10/27/2008 (Plain Text Version)

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

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NAHB's 77th Construction Forecast Conference

on Oct. 22 brought the nation's leading economists together to discuss the prospects for a housing and economic recovery. While the consensus was that the next six months will be very tough, the longer-term prognosis was considerably more upbeat.

The steep decline in sales of new single-family homes should be coming to an end in early 2009, said NAHB Chief Economist David Seiders, which would set the stage for "tepid" improvement in new residential construction later that year. However, he warned, that outcome has grown increasingly uncertain in light of the turmoil that has gripped world financial markets. That is why Congress must act to provide further "sorely needed" economic stimulus that would encourage homeownership, limit foreclosures and pull the U.S. economy out of recession. On the brighter side, Seiders said that housing in the first half of 2009 should be helped by the $7,500 tax credit available to first-time buyers; legislative efforts to address foreclosures; the continuation of affordable mortgage rates; and the availability of fixed-rate mortgage financing through Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs. Citing an increase in pent-up demand for housing, he added that declines in home prices and increases in personal income have helped to restore housing affordability to the more normal levels that existed prior to the peak of the housing boom. That said, even as demand for housing begins to grow, housing production will be constrained by tighter credit for the loans that builders and developers need to break ground on new residential projects. NAHB is currently forecasting 936,000 total housing starts for 2008, a 30.2% decline from the 1.34 milllion homes produced last year. Starts in 2009 are projected to slide 16.2% further, to 784,000 units, and 2010 would bring production up to the 1.0 million level. Get comprehensive coverage of the forecast conference in the Oct. 27 Nation's Building News Online. Contact: Steve Melman, x8245.

Decisions from the IRC Final Action Hearings

in Minneapolis this September will result in a number of changes to the way that homes are built in communities where the model 2009 International Residential Code (IRC) is adopted. As we've reported to you before, the most controversial change is the new mandate for fire sprinkler systems in one- and two-family homes. The 2009 IRC indicates that after 2011, jurisdictions will have to choose not to adopt residential fire code provisions. However, they can expect to face a well-funded coalition of system manufacturers and installers who will work hard to keep the mandate. Beyond the sprinkler issue, however, there are several other changes that single- and multifamily builders can expect to see stemming from the latest IRC decisions. These include new requirements for carbon monoxide alarms, wall bracing, window fall prevention devices, wall and roof cladding inspections, domestic clothes dryer ducts, a shower liner test in building inspections, new International Fire Code construction and design provisions, and International Energy Conservation Code changes. The October 20 edition of NBN Online has a thorough roundup of these changes and details that builders will need to know, so if you haven't seen it yet, check it out right here. Contact: Calli Schmidt, x8132. [return to top]

NAHB will provide resources to fight six legal battles

that have significant implications for the nation's home building industry, per decisions made during our recent Fall Board of Directors Meeting in San Diego. Applicants who were approved by the NAHB Executive Board to receive assistance from the NAHB Legal Action Fund include:

1. The Wisconsin BA, which is challenging a state transportation rule
     that requires significant setbacks for new development along public highways.

2. The Michigan AHB, which has challenged the state's attempt to implement
     new energy efficiency code requirements on grounds that the proposal
     violates state law by not taking cost-effectiveness into account.

3. A Faulkner County (Arkansas) HBA member, who has been engaged
   in protracted litigation over the improper denial of his rezoning request for a
    sliver of agriculturally zoned land in a sea of residential neighborhoods.

4. An HBA of Connecticut member who is challenging the closure of municipal
    roadways that provide access to his proposed development.

5. The HBA of Greater Dallas, which is challenging a municipality for recently enacting
    a fire department impact fee without having been granted the authority it needed to do
   so under Texas law.

6. The HBA of Central Arizona, which is challenging a dust control ordinance in
    the Arizona Supreme Court.

Greater details on each of these cases are in NBN Online.

NOTE: The NAHB Legal Action Committee meets three times a year in conjunction with board meetings to consider applications for funding friend-of-the-court assistance from members and HBAs who are embroiled in litigation that can be expensive and time-consuming. The deadline for Legal Action fund applications for consideration at the International Builders' Show in Las Vegas is December 5. To download applications and guidelines, NAHB members can click here. For more information on the grants provided by NAHB's Legal Action fund, contact Mary Lynn Huett at x8485, and for help with filing an application for the fund, contact Christopher Whitcomb at x8329. [return to top]

Build your knowledge with two upcoming NAHB audio seminars:

1. Up Your Profits in a Down Market With Light Commercial
   2:00 PM EST on Wednesday, Nov. 5
    Find out how diversifying into light commercial construction might
   be easier than you think and how builders can identify opportunities in
   their markets. Featured speakers: Tom Swartz, CGR, CAPS, CGB of J.J. Swartz Co.
   in Decatur, IL and John Piazza, CAPS, CGP of Piazza Construction Inc.
    in Mount Vernon, WA. Register at: www.nahb.org/lightcommercialaudio.
    (Note: there is a $79 fee per phone site)

2. The EPA's New Lead Paint Rule: What it Means to You
    2:00 PM EST on Tuesday, Oct. 28
    Find out what the new rule covers and what you need to do to be in compliance.
    Featured speakers: Brindley Byrd, CGR, CAPS of QX2 Contracting in Lansing, MI;
    Bob Hanbury, CGR, of House of Hanbury Builders in Newington, CT; and Matt Watkins,
    NAHB environmental policy analyst. Register here.
    (Note: there is a $79 fee per phone site)

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NAHB Chief Economist David Seiders is retiring

following more than 20 very successful years in one of the most highly visible roles within our association. Having helped solidify NAHB's position as the "voice of the housing industry" through his expert market analyses and a nearly constant stream of media interviews, Dr. Seiders is stepping down as of November 17. He'll be passing the torch to another long-time NAHB staffer and uniquely qualified economist, Dr. David Crowe, who is currently Senior Staff Vice President for Regulatory and Housing Policy. Like his predecessor, Crowe is a highly regarded economist, and he has extensive experience in housing finance and housing policy. Given today's turbulent economy and rapidly evolving housing finance environment, such skills will be absolutely invaluable to NAHB as efforts to stabilize the housing and financial markets move forward. We know you join us in thanking Dave Seiders for his incredible dedication to NAHB and its members throughout the years, in wishing him the very best in retirement, and in welcoming David Crowe to what is certain to be a very busy and exciting new chapter of his career! [return to top]

Remodeling Hall of Fame and Remodeler of the Year honors

were announced at the NAHB Remodelers Annual Awards Gala in Baltimore this month. Congratulations are in order for Alan Hanbury, CGR, CAPS, CGP of House of Hanbury Builders in Newington, CT and Mark Richardson, CR, of Case Handyman & Remodeling in Bethesda, MD, who were both inducted into the Remodeling Hall of Fame. With over 30 years in the remodeling industry, Alan has devoted significant time to educating his fellow remodelers on fiscal management and has helped boost the professionalism of remodelers nationwide. Mark is a successful author who has gained a reputation as a national spokesperson for the remodeling industry. (NBN Online has additional details on both men's accomplishments.) Congratulations are also due for Jeff Hunt, CGR, CAPS, GMB, CGP of Heritage Construction Services and the Greater Houston Builders Association, who was named Remodeler of the Year for his many contributions to the leadership of the NAHB Remodelers at both the local and national levels.

Also honored at the event were NAHB Homes for Life Award winners Ben Morey, CGR, CAPS of Morey Construction in Signal Hill, CA and Leslie Shankman-Cohn, ASID, CAPS, of Jill Hertz Interior Design in Memphis, TN. The award recognizes excellence in remodeling for aging-in-place and universal design. Read more about award winners at the Remodelers Gala event in NBN Online, or contact Kelly Mack, x8451. [return to top]

Another great reason to plan on attending the 2009 IBS

in Las Vegas is that you don't want to miss getting an up-close and personal look at The New American Home 2009, which is currently in the finishing stages of a very ambitious production schedule. In fact, the home is set for its first big photo shoot on Oct. 27. One feature of the home that's expected to get a lot of attention is its extremely efficient heating and cooling system from Japanese manufacterer Aisin. The system includes 24 zones, eliminating most ductwork in the home, and runs on natural gas, which is more common in Japan than in the U.S. The home itself was designed by architecture firm Danielian Associates and its interior design and furnishings are from Robb & Stucky Interiors. It is equal parts laboratory, educational tool and product showcase, incorporating builders' best practices and the latest take on not just energy efficiency but also indoor-air quality, safety, convenience and aesthetics. For now, Blue Heron building company and some of Las Vegas's most experienced tradesmen are working overtime to get everything just right for the photo shoot and the IBS tours that will bring thousands of visitors through the home's doors in January. Says Blue Heron principal Tyler Jones, "I think the house is going to absolutely blow people away." For more information, read NBN Online, visit the home's dedicated Web site, or contact Tucker Bernard (x8519), executive director of the National Council of the Housing Industry (NCHI) - The Leading Suppliers of NAHB and project executor of The New American Home. [return to top]