Monday Morning Briefing Letter - 02/16/2009 (Plain Text Version)

By Joe Robson, NAHB Chairman and
Jerry Howard, NAHB President and CEO

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A compromise economic stimulus plan

hammered out by the House and Senate contains several elements relating to the housing industry, including a bigger and better home buyer tax credit.

While we would have preferred a more enhanced tax credit similar to the version that was previously approved in the Senate (which provided for a $15,000 tax credit to all principal home buyers), cost limitations prevented this larger stimulus from making it into the final bill. However, the completed stimulus package does contain some key elements from the Senate's version as well as certain other modifications that are beneficial to home buyers and home builders.

Specifically, the legislation improves upon the existing first-time buyer tax credit by:

- Raising it to $8,000 and removing its payback provisions;
- Extending its sunset date to Dec. 1, 2009;
- Keeping it refundable (or claimable regardless of tax liability);
- Allowing tax credit home buyers to participate in the mortgage revenue
   bond program; and
- Permitting state housing finance agencies to help buyers at closing by
   advancing the credit amount as a loan using tax-exempt bond proceeds.

These important changes enhance the credit's ability to entice potential home buyers and should help stimulate demand for housing.

The final stimulus bill also includes several other provisions that will help small businesses and otherwise bolster the housing market. For example, it will:

   -Reinstate FHA, Fannie Mae and Freddie Mac loan limits of $729,750
    in high-cost areas through the end of this year;
   -Temporarily allow exchange of LIHTC allocating authority for tax-exempt
grants and appropriate $2 billion in HOME funding for affordable housing projects;
   -Provide up to a 10-year deferral of tax due to business debt restructuring;
   -Expand the net operating loss carryback period for small businesses from
    2 years to 5 for losses arising in the 2008 tax year;
   -Extend the 25C existing home remodeler credit through the end of 2010,
    increase the credit rate from 10% to 30%, increase its lifetime cap from
    $500 to $1500, and expand the set of qualifying property;
   -Provide an Alternative Minimum Tax (AMT) patch for 2009;
   -Increase bonus depreciation and Sec. 179 small business expensing
    for business investment in 2009;
   -Increase the New Markets Tax Credit allocating authority for 2008 and 2009; and
   -Delay for one year the start of the 3% government contractor withholding
    requirement (from 2011 to 2012).

After completing the final language in the massive bill, the House voted on and approved the package on Friday, Feb. 12, and the Senate was expected to follow course as this report went to press. President Obama is then expected to sign the legislation into law by his stated deadline of President's Day, Feb. 16. Once this has been done, NAHB will be reaching out to our members and local HBAs with information and marketing tools aimed at making home buyers aware of the tax credit and helping builders utilize other aspects of the legislation to benefit their businesses. Look for the Feb. 17 edition of NBN Online for more. For details on tax provisions of interest to NAHB members, contact Rob Dietz, x8285.

Legal Action grants to support builders' court cases

were approved during the International Builders' Show in Las Vegas. Some of the most interesting cases approved by NAHB to receive backing from our Legal Action Fund are highlighted below. This fund was created to ease the burden on NAHB members and HBAs pursuing expensive and time-consuming litigation involving nationally significant issues or legal matters commonly faced by builders and developers. Cases to receive funding include:

1) A member of the Buffalo Niagara BA in New York is arguing that a federal district court incorrectly held that under the Administrative Procedures Act he could not challenge a determination by the U.S. Army Corps of Engineers that wetlands on his property were subject to federal government jurisdiction. NAHB has agreed to submit an amicus brief as well as funding in support of the case.

2) A legal challenge by the HBA of Lane County in Oregon against a municipality's attempt to reduce allowable density in order to prevent multifamily development. NAHB also may support the challenge with an amicus brief.

3) A challenge by a member of the Rhode Island BA against a municipality that denied his development application under the assertion that a comprehensive plan trumped existing zoning ordinances. Here, the state HBA will submit an amicus brief to the Rhode Island Supreme Court, with NAHB providing financial support for that effort.

4) A member of the HBA of Greater Kansas City, who is asserting that a municipality violated his due process rights when it refused to approve final plans for his project.

The NAHB Legal Action Committee reviews Legal Action Fund applications three times a year in conjunction with scheduled meetings of the NAHB Board of Directors. The deadline for applications for consideration at the next board meeting is April 14. Read more in the latest NBN Online, or download applications and guidelines from NAHB's members-only Web pages. Contact: Mary Lynn Huett, x8485. [return to top]

A proposed OSHA rule applying to cranes and derricks

used in construction would have a considerably adverse impact on the home building industry and push construction costs higher, NAHB told the Occupational Safety and Health Administration in written comments on Jan. 22. In fact, NAHB warned, with housing activity now at record lows, the additional costs of complying with the proposal could be enough to put some builders out of business. Published in the Federal Register on Oct. 9, 2008, the draft rule treats all construction the same way and doesn't take into account the nature of the home building business, especially when it comes to the small or custom builder. NAHB's comments on the proposal suggest regulatory alternatives that would be less complex and burdensome for home builders, while still protecting the safety and health of construction workers.

The three main requirements of the rule opposed by NAHB are: 1) overly restrictive crane operator qualification and certification; 2) assigning responsibility for ensuring that ground conditions are sufficient to support a crane to "controlling entities" – including general contractors – who are not likely to have expertise in this area; and 3) forced compliance with manufacturers' recommendations and manuals, which NAHB believes is unlawful. NAHB's position is that smaller cranes used in home building should be treated like forklifts and other similar equipment for which OSHA allows the employer to ensure and certify the competence of the operator. In expressing concerns on the proposed rule, NAHB is joined by the Associated Builders and Contractors, the Associated General Contractors and others. NAHB members will testify on the proposal at OSHA's informal public hearings to be held March 17 in Washington, DC. Read NBN Online for more, or contact Rob Matuga, x8507. [return to top]

NFIP flood damage-resistance requirements have been revised

by the Federal Emergency Management Agency (FEMA) with input from NAHB and other organizations. Aimed at local officials, designers and builders, the NFIP Technical Bulletin series includes 11 separate bulletins that provide guidance on a number of issues facing builders who must comply with the flood provisions and communities that adminster the requirements. Four of FEMA's technical bulletins have now been revised, including:

- TB-1: “Openings in Foundation Walls and Walls of Enclosures”
- TB-2: “Flood Damage-Resistant Material Requirements”
- TB-5: “Free-of-Obstruction Requirements”
- TB-9: “Design and Construction Guidance for Breakaway Walls”

Each of these bulletins are available from the FEMA warehouse at 1-800-480-2520. You can also download them from here. Read more in NBN Online, or contact Ken Ford, x8228. [return to top]

Multifamily households have considerably fewer children

than households residing in single-family detached homes, according to a new report from NAHB that helps evaluate the impact of new housing on local governments' education budgets. The report finds that there are 32.6 school-age children per 100 households in multifamily structures, compared to 58.8 in single-family detached homes, 42.9 in single-family attached homes and 50.2 in manufactured housing units. The latest data was derived using information from the Census Bureau's American Community Survey, which is released annually. Other interesting findings include the fact that larger apartment buildings tend to have fewer school-age children on average than smaller, garden-style apartments; that renters have more children than owners (but the magnitude of the difference varies by structure type); and that multifamily households that stay put tend to have more school-age children than those that have recently moved in (the opposite is true for single-family detached homes). These findings are particularly relevant for when local governments make plans for new residential development and need to estimate the impact on their education budgets. See NBN Online for more, or contact Paul Emrath, x8449. [return to top]

New consumer brochures from NAHB

tout the benefits of hiring a Certified Aging-in-Place Specialist (CAPS), Certified Graduate Builder, Graduate Master Builder, Certified Graduate Remodeler and Graduate Master Remodeler. These brochures are intended to help NAHB professional designation holders increase public recognition of their expertise and set themselves apart from the competition. Specifically, the brochures highlight the rigorous training and knowledge required to earn an NAHB designation. Copies of the brochures are available for purchase; contact Starsha Valentine at x8155. [return to top]

Register NOW for NAHB's all-important Legislative Conference

that's coming up on March 24 in Washington, DC. This year's event, which for the first time in many years is NOT in the same week as our Spring Board of Directors Meeting, could hardly be planned for a better time. Considering the growing downward momentum in housing and job markets and the fact that our country is facing the most difficult financial crisis since the 1930s, attending NAHB's 2009 Legislative Conference could be one of the most important decisions that any builder can make. As part of this event, you will personally visit the offices of your federal representatives and senators to urge their support of policies that will stabilize home values, mitigate foreclosures, bolster consumer confidence and get the economy moving in the right direction. As various interest groups compete to push their individual agendas in Washigton during these very challenging times, NAHB's advocacy effort needs as much support as possible. A strong builder turnout on March 24 will send a powerful message to members of Congress that housing must remain a top national priority going forward. To register and get more information on this critical event for home builders, click here or contact Molly Murray at x8282. [return to top]

Want to be a speaker at the 2010 IBS?

If so, you better move fast because the deadline to submit your proposal is swiftly approaching – it's Feb. 20. Don’t miss this chance to make a splash at the building industry’s premier event. Only online proposals are being accepted. For the 2010 IBS Education Session Proposal General Guidelines, visit this Web page. For a list of the 2009 IBS educational seminars, visit www.BuildersShow.com/Education. If you have any questions or would like to recommend a topic or speaker, please contact The NAHB University of Housing at ibsedu@nahb.com. Contact: Robert Ebbin, x8058 [return to top]

NAHB offices will be closed on Presidents Day, Feb. 16,

in observance of the federal holiday. We'll be right back on Tuesday the 17th. In the meantime, please stay tuned to this report and NBN Online for all the latest! [return to top]