Nation's Building News Online: January 24, 2005Print All Articles Text Version |
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NAHB Directors Adopt Policy on Regulating Housing Government Sponsored EnterprisesWith Congress preparing to take up unfinished business from last year on regulating the housing-related government sponsored enterprises (GSEs), the NAHB Board of Directors at its Jan. 12 meeting in Orlando, Fla., unanimously adopted comprehensive policy to ensure the safety and soundness of Fannie Mae, Freddie Mac and the Federal Home Loan Banks while at the same time preserving the strong housing finance system they have fostered. Action on the NAHB board floor was the culmination of a three-month effort by a specially appointed Housing Finance Reform Task Force to investigate how to ensure a reliable and less costly supply of credit for home builders and home buyers and respond to criticism of accounting and financial reporting errors at Freddie Mac and Fannie Mae in 2003 and 2004. Working with the leaders, membership and staff of NAHB and consulting outside experts from the mortgage and lending industries, Wall Street and government and non-government policy analysts, the task force looked at changes to existing NAHB policy that would enable home builders to respond to proposals for new regulations and operations that would undermine the effectiveness of the GSEs. “We found that some proposals claiming to seek ‘world class’ regulation of the GSEs actually are attempts to restrict or even do away with the benefits of the GSE system,” said Gary Garczynski, chairman of the task force and 2002 president of NAHB.” The final report of the task force noted that “the unique connection between the federal government and the private market through the GSEs” has helped shape a housing finance system that is “extremely efficient and liquid.” The report cites studies estimating that the GSEs lower mortgage rates by as much as 50 basis points, creating homeownership opportunities for about 2.2 million households, according to NAHB estimates. Among the new policies that were recommended by the task force and adopted by the NAHB board:
In addition to Garczynski, members of the NAHB task force were Bobby Rayburn, NAHB’s immediate past president; and builders Dave Curtis, Joe Landers and Randy Noel. The task force prepared a lengthy final report, which provides more detail and background to the recommendations. To read the report, which includes an executive summary, NAHB members can click here. To read the GSE resolution and summary of the other resolutions passed by the NAHB Board of Directors at its meeting in Orlando, visit NAHB Resolutions in the policy section of the NAHB Web site. (This link is accessible for members only.) Building News Coast To CoastBlack & Decker Rolls Out 'SiteLock’ System to Foil Job Site Tool TheftsBlack & Decker is venturing outside its traditional power tools and accessories business with a new portable “SiteLock” security system that employs licensed wireless and cellular data-transmission technologies packaged under the company’s professional-grade DeWalt brand. The system can monitor different areas of the job site, safeguarding items as big as backhoes and bulldozers, and as small as individual power tools, according to Bill Pugh, group marketing manager for the DeWalt Security Business Group. The basic unit and one keychain remote will list for $1,000, and individual sensors will be priced from $99-$199. In residential construction alone, theft of materials and appliances and damages caused by those crimes range from $1 billion to $2 billion annually, according to NAHB, enough to push up the price of new homes by 1%-2%. Thefts of heavy equipment cost the construction industry $300 million to $1 billion a year, only 10% of which is ever recovered, according to the National Equipment Register. Tackling the ‘Housing Crisis’In his recent State of the State address, California Governor Arnold Schwarzenegger has pledged to “seek to reform onerous regulatory and planning laws to promote home building” in his proposed budget. Interviews with insiders in Sacramento, the state capital, suggest the administration intends to propose changes to the 1970 California Environmental Quality Act, with the goal of reducing the costs, time and opposition builders face when trying to get housing projects approved, especially within urban areas. Another concept under consideration would be a state mandate for local governments to plan for housing 20 years in advance, compared with the current five- to seven-year planning horizon. At about 60%, California’s homeownership rate is lower than all but two states — New York and Hawaii. California’s median home price has more than doubled over the past five years — rising from $191,500 to $398,000. “From an economic standpoint, something’s gotten out of whack over time,” says Tim Coyle, a lobbyist for the California Building Industry Association. “To begin to close the gap (between supply and demand) will also take time, but the price of not doing that is to continue to price working folks out of the market.” Cost of Land Continues to Skyrocket in Greater St. Paul, Minn., AreaBuilders and developers in the Minneapolis-St. Paul area are complaining that their Metropolitan Council is limiting the land supply, which is pushing up land prices and consequently housing prices. Defending its controversial controlled growth policies, the council says that they are needed to keep public services from being overwhelmed. While no agency tracks land deals, developer Rick Packer says he was involved in the purchase of land at $70,000 an acre three years ago. The same land today would go for $140,000 an acre, said Packer, who is chairman of the Twin Cities Builders Association Public Policy Committee. Builders typically put two, sometimes three homes on an acre. Land costs double by the time the lots are developed, and they typically account for one quarter of the final home price. NAHB economist Gopal Ahluwalia says that he is not surprised by anecdotes about rising land prices, which are almost inevitable for growing urban areas. Ahluwalia thinks that lack of land in urban areas is shaping up as the biggest problem facing home builders. “Unfortunately, land is one thing that can’t be manufactured,” he said. “Whatever you have, you have.” In the meantime, by designating the land that is available for residential development, the Metro Council is making the situation far worse, builders report. Forty-Year Mortgages PannedFannie Mae’s pilot program for 40-year mortgages took a drubbing from CBS Market Watch, which called it the “Stupid Investment of the Week.” Designed to reduce monthly payments and help income-poor buyers get into a home by expanding the amortization period, the loan’s critics say it costs .25 to .35 percentage points more than a 30-year loan and over the life of the loan the greater amount of interest that is paid virtually erases the benefit of the monthly savings. Payments on a 40-year mortgage for a conforming loan limit of $359,650 are roughly $100 less than for a comparable 30-year loan. A hybrid or two-step ARM with a fixed rate for five years and an adjustment once a year for the next 25 years, starting at Freddie Mac’s reported rate of 5.05%, reduces monthly payments more than the 40-year loan and costs $339,357 in interest over the life of the loan, compared to a whopping $604.677 for the pilot product. Scientists Test Building Materials With Simulated EarthquakesWorking to help engineers devise stronger power lines, telecommunications cables and water and fuel pipes, researchers at four locations around the country — Cornell University, in Ithaca, N.Y.; the University of Illinois at Urbana-Champaign; Oregon State University and the University of California at San Diego — are using powerful hydraulic presses and tall walls of concrete to produce shearing forces exceeding the strongest recorded earthquake. Cornell is among 15 universities participating in the National Science Foundation’s Network for Earthquake Engineering Simulation. The laboratories are linked through the Internet, allowing researchers to share data as they conduct their experiments. Petrie Urges Attention to Economic Urban RevitalizationThe development of brownfields, the availability of terrorism insurance and continued funding of major HUD programs are key to the revitalization of urban areas, Michael Petrie, chairman of the Mortgage Bankers Association, told the U.S. Conference of Mayors at its recent winter meeting in Washington, D.C. To help ensure that the real estate finance industry continues to play a “vibrant role” in the nation’s future economic security, he said that converting old and vacant properties into productive job-producing properties should be a priority for the 109th Congress. On the issue of terrorism insurance, he said that potential acts of terrorism make it imperative for Congress to support extension of the “Terrorism Risk Insurance Act of 2002," which creates a federal backstop for terrorism insurance coverage but is set to expire in December. Over-55 Housing a Growing TrendCommunities in Western Massachusetts for World War II baby boomers reaching their mid-50s are gaining in popularity. The housing tends to be ranch-style, with all of the accommodations on one floor, according to Laura Stevens, owner of the Longmeadow office of Keller Williams Realty, which covers all of the western part of the state. Even in cases where there are townhouse styles, she said, the master bedroom is usually on the first floor. A one-car garage is common, as older singles and couples tend to use one vehicle. She noted that the pluses in these developments include peace and quiet and a sense of community. But those may be minuses for some people who are opting out of homogenous housing that offers little social variety and an absence of youths. Residences at Mall Yield Urban Flavor, Convenience SuburbsMore and more condominiums and townhouses are sprouting next to shopping malls that were once reachable only by motor vehicle, enabling suburban home owners to enjoy the convenience of shops, restaurants and nightlife normally associated with an urban setting. “It’s great because I can walk to the movie really quick,” says Tia Arnold, whose front door is just across the parking lot to The Mall in Columbia, Md. The most ambitious mall housing planned for the area is the $400 million transformation of Parole Plaza outside Annapolis into a “lifestyle center,” with high-rise condos built atop shops, offices and restaurants in a compact town. Critics of sprawling suburban development see hope in the mall-housing trend, though they say it is no substitute for city living. Density Trend at Critical MassA scarcity of land and high demand for housing are producing a high- and medium-density housing trend in the San Francisco Bay area. In Berkeley, over the past five years 1,000 higher-density units have been constructed, are under construction or have been approved, said Dan Marks, the city’s director of planning and development. Similar projects are underway in El Cerrito and Albany. Since January, Richard Sintchak and his family have been living happily in a $700,000, three-level, three-bedroom, 2,800-square-foot condominium. “What we could get with the same money is a 50-year-old house with less square footage,” said Sintchak, a 41-year-old branch manager with Chase Manhattan Mortgage. “I think the smart-growth, higher-density housing, mixed-use type projects occurring in the Bay Area are at the forefront of what we can expect to see in the next 20 years,” said Alex Amoroso, principal planner for the Association of Bay Area Governments, a cooperative planning agency. “There’s a million-and-a-half people coming to the region; another million-and-a-half jobs are being created. Without sufficient housing, we can’t accommodate all the people being born here.” West Coast Dominates U.S. Apartment MarketsFour of the nation’s top-five apartment markets this year will be in Southern California, according to Marcus & Millichap Real Estate Investment Brokerage Company’s 2005 National Apartment Index of 42 markets across the country. Riverside-San Bernardino, Calif., topped the list, followed by San Diego; Orange County; Calif.; Las Vegas and Los Angeles. Washington, D.C.; Boston; Fort Lauderdale, Fla.; New York City and Oakland took the sixth through tenth spots respectively. Renting activity is particularly strong in California, the report’s researchers said, because many people in the state’s markets find that buying a home is beyond their financial reach. Voluntary Green Building Guidelines Aimed at Mainstream HousingVoluntary Model Green Home Building Guidelines designed to move environmentally friendly home building concepts further into the mainstream of the housing marketplace were introduced on Jan. 13 during the International Builders’ Show in Orlando, Fla. “The guidelines are revolutionary because they will help all builders, not just niche builders, construct more energy-efficient, environmentally sensitive new homes in different price ranges and climate conditions,” said Ray Tonjes, chairman of the NAHB Green Building Subcommittee. There are currently about 30 communities across the country where green building programs are in place or under development. NAHB members and their local and state home builders associations have been the driving force behind these programs, Tonjes said. The technical guidelines were created by the NAHB Research Center, which worked with members from more than 60 groups. The guidelines explain how a builder can incorporate green building concepts into a project in six primary areas:
The guidelines can also be used to develop a point system to score green building projects, and can be adapted by home builders associations to local needs. The creation of a new national organization to promote green building practices in residential construction — the Green Building Initiative — was also announced during the International Builders’ Show. “Our goal is to bring green building to the majority — to give mainstream builders and architects the information and tools to create better living environments,” said Ward Hubbell, executive director of the non-profit initiative. He said that the organization will be working closely with NAHB and home builders associations.
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Learn how green substitutes can improve your bottom line and offer your home buyers greater quality and value. To view or order this publication online, click here, or call 800-223-2665. Housing SnapshotMortgage interest rates on 30- and 15-year fixed loans declined slightly last week, while the cost of adjustable financing remained virtually unchanged. "Financial markets see inflation as being well managed by the Fed, and that allows long-term interest rates to remain low, with mortgage rates even falling a little more this week," said Freddie Mac Chief Economist Frank Nothaft. "With housing starts in December near record levels and November's starts revised upward, the housing industry looks like it will remain vibrant in 2005." Signals on the health of the nation's general economy remained healthy last week. The Conference Board's Index of Leading Economic Indicators was up in December, and revised upward in November, ending a five-month downward streak that started last May. The Labor Department reported that the Producer Price Index was down 0.7% in December, with gasoline and other energy prices dropping by 4%. The inflation index registered 4.1% for all of 2004. And the Federal Reserve reported that manufacturing production was up 0.7% in December, bringing the increase for the year to 4.1%, the best showing since 2000. Prices on the lumber front were a mixed bag. The cost of framing lumber climbed from $377 per 1,000 board feet on Jan. 14 to $382 at the end of last week, compared to $344 a year earlier, according to Random Lengths. The momentum behind plywood and oriented strand board prices appeared to be moving in the opposite direction, with the panel composite price moving down from $408 to $396 per 1,000 square feet. It was $439 a year earlier. Mortgage Interest Rates30 Year Fixed Rate: 5.67\% Housing Starts: Dec. 2004Total: 2.004 million\% New Home Sales: Nov. 2004 *1.125 million Existing Home Sales: Nov. 2004 *6.94 million * Seasonally Adjusted Annual Rate Demand for Building Materials to Remain High in 2005, But Some Relief Possible on Lumber PricesAlthough a new NAHB survey indicates that building materials shortages have eased somewhat in recent months, economists at a press briefing at the International Builders’ Show in Orlando, Fla., cautioned that builders should brace themselves for another tight market in 2005. “We expect some recovery in non-residential construction this year, and the residential market is anticipated to post another solid showing. So demand for supplies is expected to remain firm in 2005,” said NAHB economist Michael Carliner. In a nationwide survey conducted by NAHB earlier this month, respondents continued to cite shortages of cement, gypsum wall board, oriented strand board, plywood, roofing materials, lumber and steel framing, but indicated that the situation was improving across-the-board. At the top of the list of concerns, 27% of those surveyed cited a shortage of cement, down from 38% in a similar survey in October. Cement supplies remain tight in portions of 35 states, according to Ed Sullivan, chief economist of the Portland Cement Association, because of strong demand for the building material from residential construction activity and an insufficient number of ships to bring in imports. Despite the shortage conditions, Sullivan said that concrete price hikes last year averaged a “modest” 8.4% through October. He estimated that concrete costs associated with building a single-family home rose from $6,449 to $6,732, a $283 increase, during the first 10 months of 2004. With home building expected to remain robust this year as construction in the non-residential and public sectors continues to grow, Sullivan forecast that demand for cement will remain strong for the foreseeable future. To help meet the growing demand, which is driving up prices and affecting construction projects around the nation, NAHB is continuing to urge the Commerce Department to overturn punitive tariffs on Mexican cement. “It takes about 40 days to import cement from Asia and only four days from Mexico. Mexico has excess capacity that would help to satisfy U.S. demand,” said Carliner. Twenty-one percent of those surveyed reported a scarcity of oriented strand board, compared to 34% who cited a shortage in October. Only 16% of builders reported plywood shortages, the lowest reading since October of 2002 and down from 29% last October. Framing lumber shortages were cited by just 11% of respondents, compared to 24% last October. “We expect wood product prices in 2005 to remain below their peaks of last year,” said Carliner. “OSB prices are now at $11 per sheet. That's lower than last spring, but relatively high, because there is not enough capacity. Some additional capacity is scheduled to come on line this year, which will help ease price pressures.” Carliner also expressed cautious optimism regarding framing lumber, saying that Canada should win its case before a North American Free Trade Agreement panel this spring, which would eliminate duties totaling well above 20% on Canadian lumber imports. “The markets already appear to be factoring in this anticipated legal victory,” he said. “The spread between Canadian lumber sold in the U.S. and in Canada has dropped from more than $60 per 1,000 board feet to between $20 and $40 per 1,000 board feet.” Builders polled said that the scarcity of gypsum wall board fell to 17% in January from 26% in October. A similar trend was noted with rebar (steel reinforcing bars), with 14% of respondents reporting shortages, compared to 25% in October. As clean-up efforts continue from last year’s hurricane season, the shortage of roofing materials remained somewhat steady, with 19% experiencing problems vs. 22% last fall. Home Starts Rebound in December, Single-Family Production Sets a Record in 2004Following a decline associated with unusually wet weather in November, housing starts bounced back in December, bringing single-family production to a record annual level in 2004. Furthermore, the backlog of unused permits rose in December, providing forward momentum for housing production starting off the new year. Housing starts in December climbed 10.9% to a seasonally adjusted annual rate of 2.004 million, according to the Commerce Department’s monthly report last week on residential construction. A total of 1.953 million housing units were started last year, up 5.7% from 1.848 million starts in 2003. “The nation’s home builders continue to move forward to meet the strong housing demand that has characterized the marketplace for some time, and we are confident that 2005 will be another excellent year for housing,” said NAHB President David Wilson, a custom home builder from Ketchum, Idaho. Wilson noted that the industry was helped last year by persistently low mortgage interest rates, and he said that ongoing gains this year in jobs and household income should help offset the slow but steady rise in mortgage interest rates that is anticipated as a result of Federal Reserve policy. “We are geared up for another big housing year,” Wilson said, “although we don’t expect to be building at quite the break-neck pace of 2004.” Single-family production was up 13.1% in December to an annual rate of 1.678 million units, the second strongest monthly pace for all of 2004. The 1.608 million single-family homes started in 2004, an all-time high, was 7.3% above the 1.499 million single-family units started in 2003. Multifamily housing starts were up 0.6% in December, at a seasonally adjusted annual rate of 326,000; they were down a scant 1% for the year, slipping to 345,000 units from 349,000 units in 2003. “Home building in December was absolutely solid, finishing up the year nicely after some softening in November that was related to bad weather,” said David Seiders, chief economist of NAHB. “The level of unused building permits moved up last month, and that is a favorable sign for starts activity as we move forward this year.” He added that builders polled in this month’s NAHB/Wells Fargo Housing Market Index (HMI) expressed a high degree of optimism about housing market conditions currently and over the next six months. Seiders said he expected to see a modest decline, of roughly 3%-4%, in housing starts this year as the result of higher mortgage rates, which are projected to average about 6.3% on fixed-rate loans, up from 5.8% last year. Regionally, December starts were up 18.8% in the Midwest, to a pace of 379,000 units; 10.6% in the South, to 941,000 units; 7.9% in the West, to 516,000 units; and 5.7% in the Northeast, to 168,000 units. For the year, starts were up 9.2% in the West, 8.3% in the South and 6.6% in the Northeast; they declined 4.8% in the Midwest, primarily reflecting a falloff in multifamily production. Builders Voice Confidence at the Start of a New YearAt the start of a new year, the nation’s home builders expect the housing market to remain strong as a growing economy helps offset the impact of slowly rising mortgage interest rates, according to the NAHB/Wells Fargo Housing Market Index (HMI), which was released on Jan. 18. The January HMI was 70, down one point from December but the same as the average monthly level for the final quarter of 2004, which was the strongest period for the index last year. January’s index is based on responses from builders who were surveyed during the past two weeks. “Builders are geared up for another solid year and expect the demand from home buyers to remain resilient,” said newly elected 2005 NAHB President David Wilson, a custom home builder from Ketchum, Idaho. “We expect somewhat higher mortgage rates, but they will still be at reasonably affordable levels to accommodate families who are shopping for a new home.” Positive trends in employment and household income will buoy housing demand this year, according to NAHB Chief Economist David Seiders, although builders will have to contend with rising interest rates and, in some markets, high housing prices that impact housing affordability. “Following a record year for home sales and single-family starts, the balance of forces is likely to take a modest toll of three percent to four percent this year,” he said. The NAHB/Wells Fargo Housing Market Index is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Builders report current sales of single-family homes, prospects for sales in the next six months and traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that a majority of builders view sales conditions as favorable. All three components of the index were off slightly in January, but remained close to the peak levels of last year: current single-family sales declined to 77, down from 78 in December; sales prospects for the next six months dropped from 80 to 78; and buyer traffic went from 52 to 50. Regionally, home builders were most confident in the West, with an overall seasonally adjusted reading of 81. That was followed by the South, at 75; the Northeast, at 65; and the Midwest, at 55. The Midwest has been relatively weaker than other regions of the country because of sluggish job creation in many of its major employment centers. Senate Majority Leader Frist Voices Commitment on Housing ConcernsDuring a Jan. 15 address to members of the NAHB board in Orlando, Senate Majority Leader Bill Frist (R-Tenn.) vowed to “stand with” builders on a wide range of housing industry concerns, including tax issues, regulatory reform, tort relief and health care. “I pledge as a United States senator that I will work tirelessly on the Senate floor to remove those obstacles that stand in the way of emboldening the American dream” of homeownership, said Frist. The Tennessee senator identified excessive regulation, litigation and taxation as the “three biggest drags on the economy,” and he promised that those items would be high on the agenda as the Congress begins its new session. Frist vowed to take action on the regulatory front, noting that regulations can account for about one-third of what it costs to build an inexpensive home today. “Washington overflows with good intentions but bad results,” he said. “We don’t need a bigger government; we need a smarter, more effective government. Now, more than ever, it’s the Washington regulators who need to be regulated.” With the Congress gearing up to debate how to make the tax code fairer and simpler, Frist said that “everything is on the table,” but that “there is only one thing that is non-negotiable — any tax reform must promote homeownership.” In other tax areas, Frist said that he would fight to make President Bush’s tax cuts permanent and to “make sure the death tax stays dead.” Frist also voiced his commitment to preserving the low-income housing tax credit in the tax code, although he doesn’t know exactly what form it will take. Declaring that we have a “broken legal system” that costs the economy as much as $250 billion, Frist said that litigation would be the first issue to be addressed in the Senate, and that class action reform is sorely needed to “get rid of frivolous lawsuits that drive up the cost of every consumer good.” With a new regulatory structure for the housing government-sponsored enterprises soon to be considered on Capitol Hill, Frist said that, “Congress needs to ensure that Fannie Mae and Freddie Mac are given the opportunity to do what they do best — stimulate the secondary mortgage market and expand the supply of mortgage credit while at the same time adhering to the strictest of accounting standards. We will assure they do just that.” On another issue of importance to home builders, Frist said that he would fight to enact association health plan legislation to allow small businesses to offer “more convenience, reliability, affordability and responsiveness. Now, more than ever, small businesses and employees need to have access to the health plans and services that best suit their individual needs.” Proclaiming his commitment to the revival and resurgence of small businesses across America, Frist said, “You want to succeed or fail without government intervention. Small businesses like yours are what keeps the American dream alive. “You make up the industry which is the foundation upon which American communities stand. I stand with you today and I will stand with you tomorrow. Together, we can secure a safer, stronger, healthier and more prosperous America.” Photograph by Oscar Einzig Photographers Administration Renewing Push for Homeownership Tax Credit and Zero-Down Mortgage, HUD Secretary SaysAppearing on Jan. 14 before the NAHB Board of Directors in Orlando, U.S. Secretary of Housing and Urban Development Alphonso Jackson pledged to work with the nation’s home builders to expand homeownership opportunities for more American families, particularly minorities. “President Bush says that when a person owns a home, they have a vital stake in the future of our country. Homeownership, to me, is the American dream. It has the power to transform lives and communities,” said Jackson. To boost affordable housing production and to help hundreds of thousands of working families to overcome a major financing barrier to owning their own home, Jackson said the Administration will be urging the Congress to enact two NAHB-supported legislative initiatives — a homeownership tax credit and an FHA single-family zero downpayment mortgage insurance program. “If we listen to you, we can help you develop housing much better. Unless we give you incentives to build in urban areas, you don’t have to build in urban areas. That’s why this Administration is proposing a homeownership tax credit,” said Jackson, who noted that it could create as many as 50,000 more home owners annually. The proposal received strong support in both chambers of Congress last year, and the HUD secretary said he would work with NAHB to move the legislation forward in the 109th Congress. Dismissing critics who contend that the zero downpayment program would lead to higher default rates, Jackson said that the proposal enjoyed solid support in the last Congress and that it remains a priority for the Administration. “Firefighters, police officers, teachers and nurses don’t default on their home. We need to give them an opportunity” to become new home owners, he said. With President Bush setting a goal of increasing the supply of affordable housing by seven million units over the next decade, Jackson said that expanding homeownership represents “just one piece of a very large pie” for his housing agenda in the coming year. “I’ve made reform of the Section 8 rental assistance program another of my priorities for 2005,” he said. “Section 8 costs are growing out of control and cannibalizing every HUD program. If we don’t solve this program, all our programs — including our homeownership efforts — will be in jeopardy.” Jackson also said that he will seek to propose new Real Estate Settlement Procedures Act (RESPA) regulations that simplify the home buying process and make it less costly for consumers. In marking the 40-year anniversary of the creation of HUD, Jackson noted that NAHB "has worked more closely with us to make housing more affordable to more Americans." Photograph by Oscar Einzig Photographers GSE Reforms Must Strengthen National Commitment to Housing, CEOs Tell BuildersWith the White House and the Congress expected to seek changes in how Fannie Mae and Freddie Mac are operated and regulated, the chief executive officers of the two secondary market financial institutions assured NAHB leaders during a Jan. 14 joint meeting of the Executive Board, Budget and Resolutions Committees in Orlando that they intend to work closely with the nation’s home builders as this process moves forward. “We have a common interest in creating more first-time home buyers,” said Fannie Mae Interim Chief Executive Officer Daniel Mudd. “We also have a common interest in expanding mortgage liquidity, so there is never a shortage of low-cost financing in America, no matter what the financial markets are doing. “We have a common interest in providing the consumer an ever-growing range of products and possibilities, with each of us in the role we play best,” he added. “And we have a common interest in public policies that expand access to affordable housing and homeownership. And we at Fannie Mae know that when we listen to the home builders and your leaders, we learn a lot more about how to serve the needs of housing.” As federal lawmakers pursue regulatory reform of the housing government-sponsored enterprises (GSEs), Freddie Mac Chairman and CEO Richard Syron cautioned that they must “be careful about the law of unintended consequences.” “Like doctors caring for a patient, we should obey the Hippocratic oath: first, do no harm,” he said. “Am I suggesting that reform is not really needed? To the contrary, Freddie Mac looks forward to working with the Administration and the Congress to make sure that our regulator has all that it takes and all that it needs to do the job right. And we are committed to working closely with the home builders throughout this process.” As Mudd and Syron each outlined their vision of a broad framework to enact housing finance reform, they reiterated that it is imperative for policy makers to ensure that housing remains a national priority. “As interim CEO, I have made a pledge,” said Mudd. “We need to create a safer, sounder Fannie Mae by carrying out the remedies set forth by our financial regulator. We need to restate our earnings; restore our capital; reinforce our internal controls and our corporate values; reexamine our corporate culture; redouble our commitment to our mission; and return to the road of constant improvement. And that means to listen; to learn; and to let our actions speak louder than our words.” “We would respectfully suggest that any resulting new (regulatory) regime should maintain the GSEs’ ability to innovate and tap emerging markets. It should maintain the confidence of domestic and global markets. It ought to strengthen our regulator instead of weakening our charter. Bottom line, it should reinforce rather than weaken our nation’s commitment to housing,” said Syron. Moving beyond those general principles, Syron added three key elements that he said would advance the cause of GSE reform: “a strong regulator that values housing, capital requirements tied to risk and receivership provisions that maintain our GSE status.” Syron rejected the naysayers who claim that the GSEs’ housing mission can be absorbed by private entities and should no longer be a government concern. Over the years, he said, the secondary market institutions have attracted global capital, created new mortgage tools and served as a shock absorber when the broader financial markets locked up following such episodes as the Russian financial crisis of 1998, when the spread between conventional and jumbo mortgages roughly tripled, and after Sept. 11, 2001, when the bond markets closed and the GSEs kept money flowing uninterrupted into the housing sector. “The GSEs perform an invaluable role in dispersing risk from the household sector to the global financial markets. And that is good for home owners, for housing and the economy as a whole,” said Syron. On the issue of receivership, Syron said that the situation must be resolved to reflect the unique role and status of the GSEs. “This nation will need roughly $1 trillion per year in mortgage funding over the coming decade to house our next generation of home owners. If reform is handled badly, there’s a real Catch-22 here. The GSEs can’t be expected to meet ambitious mission goals if we have stripped away what makes us unique and are treated as if we were simply two more private-sector financial institutions. That’s one of the unintended consequences I worry about.” Sounding a similar theme, Mudd said that the core purpose of Fannie Mae is to “provide a reliable supply of mortgage funds to all communities, at all times, at low rates and fixed rates to make owning a home more affordable and less risky for the average American.” GSEs Gearing Up to Meet Housing Needs of Minority and Immigrant FamiliesParticipating in a symposium at the International Builders’ Show in Orlando earlier this month, leaders of the three housing government-sponsored enterprises (GSEs) — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — vowed to redouble their efforts to serve the housing needs of minorities and immigrants in the coming decades. “In the years ahead, minorities will be driving two-thirds of all household growth and the demand for mortgage money will be going through the roof,” said Dwight Robinson, Freddie Mac’s senior vice president of corporate relations. “One hundred and twenty five million home loans will be needed over the next decade and $127 trillion in mortgage money will be needed from the housing GSEs.” To help meet this huge demand for housing from underserved families, Robinson said that Freddie Mac is designing new products and innovative financing programs geared to reaching more borrowers. He said a major new initiative from Freddie Mac — Project Greenlight — is aimed at increasing loan approvals, along with a redesigned A-minus program to lift families out of the sub-prime market. Another new mortgage suite called Home Possible is designed to reach more eligible families by providing financing flexibility. Freddie Mac’s automated underwriting service, Loan Prospector, now extends the approval process to six months rather than four, so that home builders can put the finishing touches on a new construction home without risking the loss of a qualified buyer. Robinson said that Freddie Mac’s Workforce Home Benefit Program stands to aid up to 175,000 families by providing greater access to expert home counseling and flexible mortgage products with low downpayment requirements. Ken Bacon, senior vice president of multifamily lending and investment at Fannie Mae, says that in certain cases, borrowers can now receive a decision on a home loan within minutes through the organization’s Home Counselor Online, an application that assists counselors in aiding potential home buyers. On the supply side, he said that Fannie Mae’s partnership with NAHB has led to the creation of an acquisition, development and construction finance product for builders that resulted in more than $200 million in loans in 2003. He added that the tally for last year was much higher, but that the final figure was not yet available. Fannie Mae has also committed more than $80 million to date for local anti-predatory lending initiatives in cities across the country. While the primary role of the Federal Home Loan Banks (FHLBs) is to provide loans to their member institutions primarily for housing finance purposes, Ray Christman, president and CEO of the Federal Home Loan Bank of Atlanta, said that in recent years the FHLBs have been supplementing their core business by buying mortgages rather than providing funding. “We have had to innovate. We are a source of housing finance for retail depository institutions in this country. We provide a menu of options to our customers to allow them to adjust to the interest rate environment,” he said. “People in the home building industry can play a more pro-active role to design the type of funding they need through the Federal Home Loan Banks,” added Christman. The 12 Federal Home Loan Banks across the nation have a combined $900 billion in assets and more than $550 billion in loans to member institutions, he said. Under U.S. law, 10% of the income of each of the Federal Home Loan Banks must be set aside annually for affordable housing. “That grant money amounts to $250 million annually, making this the largest private source of affordable grant money in the U.S.,” said Christman. The Economic Development and Growth Enhancement Program (EDGE), a selective, below-market advance program available only to financial institutions that are members of the Federal Home Loan Bank of Atlanta, will provide loans as low as zero percent to fund community and housing economic development projects, he added. “Growth for all of the GSEs will occur based on demographic factors in the next 25 to 30 years. Housing and homeownership are a great tool to assimilate immigrants,” he said. How to Manage Risk to Protect Your BusinessAs almost everyone is painfully aware, there is an insurance crisis in the residential construction industry. Construction defect claims and related litigation are on the rise. Insurance carriers — finding that residential construction is too risky and not profitable enough to insure — are withdrawing from the housing industry due to poor underwriting results. “If you do find general liability insurance, you find huge voids in coverage,” said Jim McErlean, risk management and marketing director for HBW Insurance Services. However, there is plenty builders can do to manage their risk and avoid tapping elusive, pricey general liability insurance (GLI) policies if something goes wrong during construction or after a house is sold. The trick is to prevent things from going wrong in the first place. Risk Management Techniques McErlean and John Hubbard, vice president of 2-10 Home Buyers Warranty’s Western region, gave custom builders, remodelers and other attendees of the recent Custom Builder Symposium in Indian Wells, Calif. strategies for safeguarding their assets in a presentation entitled “Protect Your Business Through Risk Management.” Here are four risk management techniques you can use to help offset the current insurance crisis:
Key Aspects of an Asset-Protection Program To further protect your business, use the following steps to incorporate the strategies mentioned above into your operations:
It may seem costly and time-consuming to put an asset-protection program in place. However, “an asset-protection program costs far less than the cost of being taken to court for a construction claim,” said McErlean.
Mark Your Calendar for the 2005 Custom Builder Symposium The 2005 Custom Builder Symposium 2005 is scheduled for Nov. 11-13 in New Orleans. Mark your calendars. For more information, e-mail the NAHB Business Management Department, or call 800-368-5242 x8388. NAHB Has More Than 170 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages for instant access to more than 170 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state associations, link directly to www.nahb.org/biztools from your Web site and give your members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance they need to succeed. The NAHB University of Housing Offers ‘Risk Management and Insurance for Building Professionals’ Course The NAHB University of Housing offers a course on risk management designed to give building professionals an overview of strategies they can implement to avoid risks, minimize risks, transfer risks and, where possible, buy insurance and make insurance claims. For a list of current offerings, click here. Subscribe to NAHB’s Business of Building e/Source NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org. Builders Attended IBS in Orlando in Record NumbersA record number of housing industry professionals — 104,922 — came to the 2005 International Builders’ Show (IBS) in Orlando, Fla., earlier this month. Attendance topped last year’s record set at the show in Las Vegas. This is the first year that IBS was held in Orlando. The show will be held in Orlando’s Orange County Convention Center again next year from Jan. 11-14. Show attendees saw demonstrations and product displays and services from more than 1,400 exhibitors. The exhibitors represented more than 300 building industry categories. IBS also featured more than 200 educational seminars, including such courses as “Kitchen & Bath Design Trends 2005,” “50 Must Have Features for Today's Homebuyers” and “Building Better Not Bigger —The Not So Big House.” Handouts from many of the seminars are available through the Builders’ Show Web site and can be downloaded at http://www.BuildersShow.com/seminars. To learn more about the 2006 International Builders’ Show and to see photos of the 2005 show, visit the International Builders’ Show Web site. Builders Required to Post 2004 Job-Related Injuries and IllnessesHome builders and other employers with more than 10 employees are being reminded by the Occupational Safety and Health Administration (OSHA) that they must post a summary of the total number of job-related injuries and illnesses that occurred last year. Employers are required to post OSHA Form 300A — not the OSHA 300 Log — from Feb. 1 to April 30 in a common area where notices to employees are usually posted. Employers must make a copy of the summary available to employees who move from work site to work site, such as construction workers, or who do not report to any fixed place on a regular basis. The summary must list the total number of job-related injuries and illnesses that occurred in 2004 and that were logged on the OSHA 300 form. Employment information about the annual average number of employees and total hours worked during the calendar year is also required for the calculation of incidence rates. Companies that recorded no injuries or illnesses last year must still post the form, with zeroes on the total line. The summaries must be certified by a company executive. A list of industries in the retail, services, finance and real estate sectors that are exempt from this posting requirement are available on OSHA’s Web site. All employers who are covered by OSHA are required to report verbally within eight hours to the nearest OSHA office all accidents that result in a fatality or in the hospitalization of three or more employees. For copies of OSHA Forms 300, 300A and 301, which are available on the OSHA Recordkeeping Web page, click here. Several states that operate their own state OSHA programs may have adopted recordkeeping requirements that are different from those presented here. If you live in a state with its own State Occupational Safety and Health Plan, you should contact your local program administrator for further information on the recordkeeping regulations applicable in your state. For more information, e-mail George Middleton at NAHB, or call him at 800-368-5242 x8590.
The NAHB University of Housing Offers ‘Big Four Safety Hazards for the Home Building Industry’ Course
The NAHB University of Housing offers a course based on what the Occupational Safety and Health Administration (OSHA) recognizes as the four most common types of hazards that cause 90% of the injuries and fatalities on construction job sites. People who complete this course will recognize the four most common hazards on residential job sites, use safe work practices to reduce the risk of injuries and comply with OSHA regulations that apply to the home building industry. Click here to find course offerings in your area. Growing Popularity of Condos Rejuvenating Urban AreasThe growing popularity of condominiums and apartments among younger households and empty nesters is driving a renaissance in urban areas across the country, according to multifamily housing experts attending the Jan. 13-16 International Builders’ Show in Orlando, Fla. The condo market, in particular, has been thriving, the experts said, as more and more people look for homeownership opportunities close to jobs, restaurants, entertainment and public transportation. “Condos made up 30% of new multifamily starts in 2004, which is a record-high percentage,” according to Gary Benson, president of Garrison Partners, a Chicago-based firm that specializes in condo conversions. Benson said that buying a condo is an appealing option for a number of niche markets: empty-nester baby boomers; young, well-paid professionals from the echo boom; and a growing number of new residents arriving from other countries, who are often more accustomed to living in high-density areas than their American counterparts. “The urban experience has drawn aging boomers and echo boomers back downtown, while many young singles and couples have turned to condominium ownership to take advantage of low interest rates and as a first step toward accumulating net worth,” said Benson. “In a time of double-digit home price appreciation in many urban markets, condos have appreciated at higher rates than single-family homes. Even so, condos are often the most affordable option for first-time home buyers in desirable urban locations.” Design trends in new rental apartments as well as condos have been kicked up a notch in recent years to appeal to today’s sophisticated renters and condo buyers, according to Paul Campbell, a principal with Kephart, a Denver-based architectural firm. “High-tech features like wi-fi and broadband access are now standard in most apartments,” said Campbell. “We’re also seeing more open, flexible floor plans with more creativity in kitchen design.” With many developers starting new apartment communities with an eye toward converting them to condos, appliances and finishes are also being upgraded. “There is a real emphasis on quality as well as style in the luxury apartment market,” noted Campbell.
Register Now for the 2005 NAHB Multifamily Pillars of the Industry Conference The NAHB Multifamily Pillars of the Industry Conference & Awards Gala is the premier industry event for the multifamily industry. Join NAHB Multifamily and Pillars Conference Chairman Ron Terwilliger for the best networking and educational opportunity the industry has to offer. Click here for more information on this event. To register now for this event, click here. Finalists Announced for 2005 Pillars of the Industry AwardsNAHB on Jan. 15 announced the finalists for its 2005 Pillars of the Industry Awards. Created in 1990, the awards honor superior achievement and leadership in the multifamily industry and promote the benefits of apartment living. “Incredibly inventive designs, creative uses of color, a broad mix of building materials and great form as well as functional space distinguish this year’s Pillars Awards finalists,” said Jerry Howard, executive vice president and chief executive officer of NAHB. “Today’s apartments and condos are better than ever and offer residents a wide array of amenities and services.” Finalists were named in 32 categories, including Freddie Mac’s Multifamily Development Firm of the Year and Property Management Company of the Year. Howard noted there was a huge jump this year in the number of entries in the “Best Multifamily For-Sale” category, reflecting the growing popularity of condos, especially in urban neighborhoods. Winners will be announced on April 4 at a gala ceremony held in conjunction with NAHB’s Multifamily’s Pillars of the Industry Conference at the Doral Resort and Spa in Miami. Freddie Mac, one of the nation’s largest investors in multifamily housing, is sponsoring the awards ceremony. Committed to developing new ways to keep down the cost of rental housing while providing superior service and innovation, Freddie Mac has helped make affordable rental housing possible for more than two million families. The awards finalists are: Category 1 — Best Garden Rental Apartment Community (four stories and under) Primary Market
Category 2 — Best Garden Rental Apartment Community (four stories and under) Secondary Market
Category 3 — Best Luxury Rental Apartment Primary Market
Category 4 — Best Luxury Rental Apartment Secondary Market
Category 5 — Best Mid-Rise Rental Apartment (five-eight stories)
Category 6 — Best High-Rise Rental Apartment (nine stories and above)
Category 7 — Best Loft Community
Category 8 — Best Mixed-Use Community
Category 9 — Best For-Sale Multifamily Community: 15 units per acre or less
Category 10 — Best For-Sale Multifamily Community: 15-40 units per acre
Category 11 — Best For-Sale Multifamily Community: more than 40 units per acre
Category 12 — Best Student Housing Apartment Community
Category 13 — Best Affordable Apartment Community
Category 14 — Best Site Plan-Urban
Category 15 — Best Site Plan-Suburban
Category 16 — Best Repositioning or Rehabilitation of an Apartment Asset
Category 17 — Most Creative Financing of an Apartment Community
Category 18 — Best Clubhouse/Leasing Center
Category 19 — Best Interior Merchandizing at a Multifamily Community For Sale
For Rent
Category 20 — Best Signage Program at a Multifamily Community
Category 21 — Best Brochure for a Rental Apartment Community
Category 22 — Best Brochure for a For-Sale Multifamily Community
Category 23 — Best Overall Sales or Leasing Campaign for a Multifamily Community
Category 24 — Best Corporate Web Site Gables Residential Category 25 — Best Property Web Site
Category 26 — Freddie Mac Multifamily Development Firm of the Year
Category 27 — Property Management Company of the Year
Category 28 — Regional/Multi-Site Manager of the Year
Category 29 — Property Manager of the Year
Category 30 — RAM of the Year
Category 31 — HCCP of the Year
Experts See Major Changes Afoot in Today’s Seniors Housing MarketToday’s diverse consumers who have reached the age of 50 are transforming the housing industry and changing the concept of active adult and traditional seniors housing communities. The newest architectural, design and marketing trends in the seniors housing market were highlighted at the NAHB 2005 Best of Seniors Housing Awards ceremony, which was held on Jan. 13 in conjunction with the International Builders’ Show in Orlando, Fla. According to experts from the NAHB Seniors Housing Council, active adult communities have evolved greatly over the past decade. While site-built, single-family attached and detached homes are still the preferred housing type, for-sale, age-qualified multifamily condominiums have emerged as a favorite among active adults. “Builders also seem to be building small or mid-size communities and more of them in close-to-home locations,” said Bill Parks, a Scottsdale, Ariz.-based market researcher and a juror for the Best of Seniors Housing Awards Committee. “Almost three-quarters of the active adult communities built in 2004 were in states outside the Sun Belt. This is a trend that will continue to gain momentum.” A growing number of consumers also want to live in communities closer to urban centers or that are connected to the surrounding community. “Many active adults want to be near a town center in a community with a diverse product mix of condominiums, villas and single-family detached homes,” said Mark Stemen, president of K. Hovnanian Homes’ Washington, D.C. active adult division in Chantilly, Va. “The idea of leaving the active adult community to walk to shops and be involved in the greater community appeals to many of them.” The service-enriched side of the industry, which includes independent living and assisted living, has experienced major changes. Among the hottest trends for the service-enriched industry has been the demand for communities in mid- to high-rise buildings in dense urban settings. “In the past, builders created communities that were far from the urban core,” said Richard Rosen, a Silver Spring, Md.-based architect and chairman of the 2005 Best of Seniors Housing Awards Committee. “Placing seniors in greenfield sites away from the city or even their former suburban neighborhoods doesn’t meet the needs of today’s buyers. They want to take advantage of the city’s offerings as well as maintain contact with family and friends, attend their places of worship and continue to work.” Other trends include communities that embrace regional and ethnic traditions, capitalize on natural surroundings and incorporate sustainable design. “Perhaps the most encouraging trend is the prevalence of universal design,” Rosen said. “Builders are including features like stepless entries, wider doorways and other features, not to mention providing more space in the kitchen and bath along with universal-design cabinets and fixtures. It appears that universal design is becoming part of the mainstream.” For more information about the Best of Seniors Housing Awards, contact the NAHB Seniors Housing Council at 800-368-5242 x8220.
Attend the 2005 Seniors Housing Symposium in Metro Washington, D.C. Area Learn more about the fastest-growing segment of the housing market. Plan to attend Building for Boomers & Beyond: Seniors Housing Symposium 2005, the premier educational and networking event for industry professionals serving the burgeoning 50+ market. For more information on this event, click here. To register for this event, click here. Find Your Place in the Affluent Boomer MarketBuilders who are in the lucrative boomer market, or are considering entering it, will better maximize their potential if they understand boomers’ needs and values. And just how much potential does the market have? Just consider this — at 77.5 million people, the boomers are the largest generation in this county’s history. They control 75% of the nation’s wealth, their average net worth is more than $700,000 — and they are spending. Boomers watched their assets soar during the 1990s and now are building very luxurious homes. So how do you become their favorite builder? Start by offering them what they are looking for. Create floor plans tailored to their lifestyles, offer them luxurious design features and products, and provide them with amenities they’ll use and enjoy. Also, pay attention to what they expect from you. Deliver superb customer service and earn their respect and trust. Some Snore-fire Advice Active adult are more likely than not to snore. Usually, one partner is annoyed with the other’s snoring because the non-snoring partner cannot sleep. Active adults will appreciate “his and hers” bedrooms with easy access to the other bedroom and the master bathroom. They don’t both have to be formal bedrooms, either. One can be a flex area — a sitting or exercise area that also includes a day bed. Most of us know that boomers prefer the convenience of single-level living and want to avoid the inconvenience of stairs. The smart builder also will realize, but probably will not verbalize, that boomers not only intend to live well in their homes, they wish to die gracefully at home, too. To accommodate these spoken and unspoken needs, think in terms of universal design features and a future caregiver’s suite — and, possibly, an additional suite for a weekend or “days off” caregiver. Help Them to Spend Wisely — and Well Do you have a selections process to educate your boomers about what quality construction is and why it is essential to their comfort? Does it include a well-designed HVAC system and high-quality tinted windows for where the intense southwestern sun would otherwise force the home owner to draw the shades? Thoughtful selections go a long way. Boomers are ready and able to spend handsomely for quality, if the right builder will just clue them in. Active adults love to walk and swim. When planning an active adult community, look for land that can connect with existing trails and build trails or sidewalks in your community. Have one or more swimming pools, too. Seniors use them regularly. They swim for recreation and exercise and they hang out poolside socially. (You might want to consider bringing in a juice bar or other concession to add to the ambience.) Speak Their Language, Pave Their Way Many boomers perceive the modern world as a confusing blur of high-speed technology and high-speed explanations. Speak to active adults in their language — slowly and patiently. Show them floor plans that clearly display the advantages they’ll appreciate. Help them, if necessary, to create a working budget by providing a model on paper and then letting them fill in the blanks. Many active adults are confused by computer spreadsheets. And help them shop for options. Provide them with calendars with all decision deadlines clearly marked. Not only will it help then see when their decisions need to be made, it will help them plan their shopping time. If they have to go to several locations, give them all the necessary contact and location information, as well as clear directions to each location. Have your staff call ahead to alert each store’s staff of your buyers’ arrival, special interests and requirements. That way, your buyers will be greeted and treated royally when they arrive. Listen to Your Buyers Many older people will give up and keep quiet if they have to work too hard to be heard. Schedule regular meetings with your buyers. They’ll be much more reassured knowing that their questions and concerns will be heard without having to track you down. Understanding what is important to this aging but active population is the key to your success in this lucrative and rewarding market. Boomer buyers are fiercely loyal, and if you earn their respect and trust, you will be able to retire on the referrals they bring you. Even if you snore. Sara Lamia is president of Home Building Coach, Inc. in Fort Collins, Colo. She is author of "How to Enjoy Building Your Dream Home," a workbook for buyers and builders, and hosts a local radio show about home building issues. Lamia is a member of the NAHB Seniors Housing Council. For more information, contact her by e-mail, at 970-402-2600, or visit Home Building Coach, Inc. Web site.
Attend the 2005 Seniors Housing Symposium in Metro Washington, D.C. Area Learn more about the fastest-growing segment of the housing market. Plan to attend Building for Boomers & Beyond: Seniors Housing Symposium 2005, the premier educational and networking event for industry professionals serving the burgeoning 50+ market. For more information on this event, click here. To register for this event, click here. Learn More About Seniors Housing Through the Seniors Housing Council To learn more about seniors housing, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292. 'Analyzing Seniors' Housing Markets' Available at BuilderBooks.com "Analyzing Seniors' Housing Markets," available at BuilderBooks.com, examines the complexities of seniors' housing markets and explains what developers, investors and other professionals need to know to understand and operate in these specialized niches. The publication familiarizes readers with the various product types and how they relate to the needs of seniors. It also explains market analysis, consumer research, market segmentation, financial analysis, market maturation versus market saturation and gauging performance of seniors' housing. Three case studies of regional markets comparing the development trends of both independent and assisted living within each market are also included. To view or purchase this publication online, click here, or call 800-223-2665. Iowa Remodeler, Don Novak, to Lead National Remodelors™ CouncilDon Novak, CGR, CKD, CMC, CPC, CGB, CAPS, president of Novak Construction Co. in Cedar Rapids, Iowa, was appointed 2005 chairman of the National Association of Home Builders (NAHB) Remodelors™ Council during the International Builders’ Show in Orlando, Fla. As chairman of the council, Novak said he will strive to keep members at the forefront of industry developments and increase consumer awareness of the remodeling industry. “The remodeling industry continues evolving and expanding, and NAHB Remodelors™ Council members lead the industry in education and upholding the highest business standards,” Novak said. “My focus will be to educate consumers about the value of hiring professional remodelers who can turn their houses into homes for a lifetime.” Novak, who has earned more professional designations than most NAHB members, has been in the construction industry more than 45 years and has been an active advocate of the industry at the local, state and national levels. He has been a member of the Greater Cedar Rapids Area Homebuilders Association since 1965 and has served as its president an unprecedented three times. He also was the founding chairman of the Cedar Rapids Remodelors™ Council in 1996 and two years later served as the council’s chairman a second time. In addition, Novak has served as the Iowa City Remodelors™ Council chairman and was a member of the board of directors of the Home Builders Association of Iowa. He also sat on the Cedar Rapids Building Code Board of Appeal and served as the board’s chairman for a year. Nationally, Novak has been a Remodelors™ Council trustee, is one of the founding members of the Certified Aging-in-Place Specialist designation and currently sits on several Remodelors™ Council committees — Education & Business Development, Public Affairs and Membership & Council Development In 2002, Novak was named the Remodelors™ Council Remodelor™ of the Year.
The NAHB University of Housing Offers Designation Programs and Other Courses The NAHB University of Housing offers CAPS, CGR, CGB and a variety of other professional designation programs and business management courses that set builders and remodelers apart from the competition. To learn more about NAHB’s designation programs, visit www.nahb.org/designations. For a complete list of all current education offerings, click here. Who Will Be the Next Remodelor™ of the Month? The Remodelor™ of the Month (this link is accessible to Remodelors™ Council members only) award program is underway. Don't miss your opportunity to be named the Remodelor™ of the Month. February Is National Designation Month — Look for Discounted Class FeesFebruary is National Designation Month, and to celebrate the month and promote ongoing education in the housing industry, the NAHB University of Housing is offering licensed associations a special 50% discount on student fees for all classes held during February. The NAHB University of Housing offers more than a dozen professional designations covering industry basics such as business management and marketing techniques, along with specialized courses including aging-in-place programs, property management and more. Earning a designation allows NAHB members to hone their business skills and convey to their clients that they have superior training, practical experience and in-depth knowledge. Additionally, designation holders can take advantage of valuable networking opportunities throughout their enrollment by working closely with expert instructors and other professionals both within their field and outside their specific areas of expertise. For more information, visit www.nahb.org/designations. Concrete Too Wet Equals Weak ConcreteI recently had some concrete flatwork done. The job was straightforward and the contractor well-experienced. How is it possible, then, that he screwed it up? Though I wasn’t on site, I think this is probably what happened: CONTRACTOR CALVIN: “The chute won’t quite reach the far end of the pour, and I hate raking and shoveling mud. Say, Readymix Driver Dan, what slump you got in that load?” READYMIX DRIVER DAN: “All our concrete comes to the site with just enough water to test out at 3-1/2 to four-inch slump.” CONTRACTOR CALVIN: “Three and a half inch slump?! What are you trying to do, kill me? I’ve got a bad back, and my foreman has a blister on his thumb; we can’t work with mud that stiff. You’ve got to add water!” READYMIX DRIVER DAN: “I can add water, but if I do, the strength will go down. Will you take the liability if the Owner complains?” CONTRACTOR CALVIN: “The Owner won’t find out. He’s a birdbrain — doesn’t know the first thing about construction. Plus, this flatwork should never see any heavy loads. Add the water.” READYMIX DRIVER DAN: “Okay, I’ll wet it up, but if the *&%# hits the fan, the monkey’ll be on your back.” CONTRACTOR CALVIN: “Fine, I’ll take the rap. Wet it up good. I want ‘er to flow like water down a crick.” Clearly Contractor Calvin has never read my “Structural Concepts” book or been to one of my seminars. Otherwise he’d have come across the following multiple-choice question: Slump: A. Is a measure of the amount of cement used per cubic yard of concrete. B. Is an indirect measure of the amount of water in concrete. A normal slump for regular concrete is three to four inches, which translates to a water-cement ratio of approximately 0.4. C. The more slump, the more water has been added, which translates to weaker concrete. Just a small increase in water-cement ratio, say from 0.35 to 0.53, will cut the compressive strength approximately in half. Not only that, the finished surface wearability will be compromised and it will be prone to excessive shrinkage and cracking. D. Slump is measured with a device called an “Ice Cream Cone.” Answer A is false. The best answers are both B and C. Strong concrete has just enough water added to provide a workable mix — exactly what Readymix Driver Dan brought to the site. Regarding answer D, slump is measured with a standardized “Slump Cone.” Ice cream cones are what you eat on a hot day. Answers B and C assume that no admixtures are used, i.e. just plain old cement, aggregate and water. If, however, you want a more flowable, more workable mix without adding more water, you could use a class of admixtures called water reducers, also known as plasticizers. Talk to your readymix provider about this, though, because water reducers can have side effects such as slowing cure time. Back to my project, the bottom line is I’m stuck with weak concrete, prone to surface wear and excessive shrinkage. Fortunately, none of it will experience wheel loads, so probably it will be okay from a strength standpoint. My readymix provider stepped up with some sealer to help keep surface wear under control (though he had no obligation to do so). The contractor skated. Oh sure, I could have sued him, but it wouldn’t have been worth the cost and effort. However, I will be sure never to use him again, and also I’ll let others know of his poor performance. Contractor Calvin needs to learn: A.) Customers know more than you think, and B.) You never know just how far-reaching one dissatisfied customer can be. Tim Garrison of ConstructionCalc.com, is a professional engineer, author and software producer for the building industry. Send e-mail to buildersengineer@constructioncalc.com. Tim reads every one. This column cannot be reprinted without permission from the author. The views expressed in this article represent the personal views, statements and opinions of the author and do not necessarily represent the views, statements, opinions or policies of the National Association of Home Builders. NAHB does not necessarily endorse any of the views expressed by the author and NAHB is not responsible for any direct or indirect consequences arising out of the views expressed in this article. Idaho Custom Builder David Wilson Elected NAHB PresidentVowing to continue NAHB's focus on the challenges of providing affordable and market-rate homes for the nation’s working families, Idaho custom builder David F. Wilson was elected as 2005 president of the 220,000-member association during the International Builders’ Show in Orlando. “After two record-breaking years for housing, we’re anticipating another solid showing in 2005,” Wilson said. “Even with interest rates on a gradual upward trend, as the economy improves we can expect resilient buyer demand heading forward. But we can’t forget that millions of families still cannot afford to live in the communities where they work. We will therefore continue working to overcome the regulatory barriers that drive up the cost of housing development and homeownership.” Also elected during the International Builders’ Show are First Vice President David Pressly from Statesville, N.C., Vice President/Treasurer Brian Catalde from Playa del Rey, Calif., and Vice President/Secretary Sandy Dunn, a second-generation West Virginia home builder with more than three decades of experience. 2004 NAHB President Bobby Rayburn, from Jackson, Miss., remains on the leadership ladder this year as Immediate Past President. Rounding out the association’s leadership is NAHB Executive Vice President and CEO Jerry Howard, from Washington, D.C. Wilson pledged also to step-up NAHB’s inward focus on its membership, including efforts to expand and improve member resources. “In the coming year, we’re going to focus on what NAHB does best, and we’re going to do it even better,” Wilson said. “We’re looking forward to working with Congress and the Bush Administration to ensure that efforts to re-regulate the housing government-sponsored enterprises do not impede the housing finance system that has helped generate the strongest U.S. homeownership on record. “In the meantime, we’re going to expand NAHB’s professional education and networking opportunities for our members. And we’re going to take full advantage of cutting-edge communications to better reach and serve our grassroots,” he added. Wilson is particularly interested in expanding the association’s successful 20 Club program, where company executives from non-competing markets learn from one another by comparing business strategies, financial results and personal experiences. Wilson is a custom home builder from Ketchum, Idaho, whose company, Wilson Construction LLC, specializes in building primary and vacation homes in the 3,000- to 22,000-square foot range. The company also does major remodeling and light commercial construction projects, and derives much of its business from repeat customers. Known as a “hands-on” builder who personally oversees all aspects of a project down to the finest details, Wilson’s primary guiding principle is his commitment to excellence and getting the job done right. He started in the home building business 25 years ago in Seattle before relocating to the resort community of Sun Valley, Idaho in 1982, where he became a Registered Master Builder and began taking a leadership role in the local building industry as well as local politics. He served as president of the Wood River Building Contractors Association and was eventually elected president of the Idaho Building Contractors Association. There, he worked closely with then-U.S. Senator Dirk Kempthorne on Endangered Species Act reform and was instrumental in getting state legislation passed to rein-in excessive impact fees. For his dedicated service to the building industry, Wilson was named Idaho’s Home Builder of the Year in 1993 and was twice honored with the Outstanding Achievement Award for Profound Influence on the Economic, Social and Political Atmosphere of the Building Industry, in 1997 and 1999. During this time, Wilson’s involvement in the local political scene escalated from serving as a planning and zoning commissioner to being elected multiple times to the city council and eventually becoming mayor of Sun Valley from 1999–2003. He was also recently appointed by Gov. Kempthorne to serve on the board of the Idaho Housing Finance Agency. In these roles, he has become uniquely familiar with the challenges of providing affordable housing for a resort area’s workforce — particularly public servants as well as hotel, retail and restaurant employees. First Vice President David Pressly David Pressly is president of Pressly Development Inc. and has more than 25 years of experience in the home building business constructing single-family homes and apartments and light commercial projects in the Statesville area. He has held a wide range of leadership positions in home builders associations at the local, state and national level. At NAHB he has chaired the Resolutions Committee, the State and Local Government Affairs Committee, the Smart Growth Working Group, the Multifamily Council and NAHB’s political action committee, known as BUILD-PAC. Pressly was president of the North Carolina Home Builders Association in 1996 and twice served as president of the Iredell County Home Builders Association, which named him its Builder of the Year in 1991. Vice President/Treasurer Brian Catalde A driving force in the Southern California home building industry for more than 30 years, Brian Catalde is president and chief operating officer of Paragon Communities, which develops and builds single-family and multifamily communities as well as commercial properties. Long active in home builders associations at the local, state and national levels, Catalde served as an NAHB National Vice President from 2000 to 2004 and a National Representative from 1979 to 1999. He has served on the association’s board of directors for almost a decade and is a trustee of NAHB’s political action committee, known as BUILD-PAC. Catalde was president of the California Building Industry Association in 1999. He served as president of the Building Industry Association of Southern California in 1995, and in 1996 he was named that association’s Builder of the Year. Vice President/Secretary Sandy Dunn Sandy Dunn is president of Point Pleasant-based B.J. Builders, Inc., a company founded by her father in 1953 that specializes in single-family, entry-level homes. She joined the firm in 1970 and opened Homestead Realty in 1974, which has since expanded into the largest real estate firm in Mason County, W. Va. She has held a wide range of leadership positions in home builders associations at the local, state and national level, and has chaired numerous NAHB committees, including the Consumer Affairs Committee, Public Affairs Committee and Resolutions Committee. She also served as an NAHB National Vice President in 1988-89 and 2000-01. Dunn was president of the Home Builders Association of West Virginia in 1991 and 1992 and served as president of the Home Builders Association of Greater Charleston in 1987. She was named Builder of the Year by her local HBA in 1976. George Goudreau, Sr., NAHB Charter Member, Co-founder of Cleveland HBA, Dies at 101George J. Goudreau, Sr., a charter member of NAHB, co-founder of the Home Builders Association of Greater Cleveland and the founder of his own home building company, The Goudreau Companies, died on Wednesday, Jan. 5. He was 101. Goudreau was one of the 250 founders and a charter member of NAHB. He served the NAHB Executive Committee and was a senior life director. In 1943, Goudreau founded and became the first president of the Home Builders Association of Greater Cleveland and simultaneously founded the Ohio Home Builders Association, serving as its first president in 1944. NAHB inducted Goudreau into the National Housing Hall of Fame in 1985. During World War II, Goudreau also banded together with about a dozen other builders to fight building restrictions on materials and locations during wartime. They realized that broader support was needed in order to be recognized in Washington, D.C., and Goudreau eventually helped found NAHB. One of four children of French Canadian immigrants, Goudreau’s family arrived in Cleveland in 1914. Goudreau graduated from the Case Institute of Technology (now Case Western Reserve) with a Bachelor of Science degree in electrical engineering, business law, architecture and construction estimating in 1925. A year later, he founded The Goudreau Companies. Goudreau was married to Lenore A. Winters for 68 years. Their son, George J. Goudreau, Jr., was the 1996 president of the HBA of Greater Cleveland. Log In to NAHB Web Site for Chance to Win Digital CameraNAHB is starting the new year with a "Log In to Win" contest and a chance for NAHB members to win a Sony Cyber-shot® 7.2 Megapixel Digital Camera. To enter, simply go to www.nahb.org/logintowin on the NAHB web site during the month of January for your chance to win. If you don’t have a user name and password, click the "Create Your Login" link and set up your account today. You can also log in to win at the 2005 International Builders' Show in Orlando, Fla. Go to the www.nahb.org booth, where NAHB staff will be on hand to help you create your login and show you all the new tools available at www.nahb.org. The contest ends Jan. 31. Don't miss out on your change to win — and to access the exclusive industry resources found on www.nahb.org. All active NAHB members, HBA staff and executive officers are eligible. Prize details, terms and conditions can be found at www.nahb.org/contestrules.
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB.Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts. Get Double the Discount from Dell Through January
NAHB members, this month, receive double* Dell's special NAHB discount on Dell’s reliable, award-winning technology. This offer is available through January. For a limited time save 10% on Dell Precision™ Workstations, Latitude™ Notebooks, OptiPlex™ Desktops, PowerEdge™ Servers and PowerVault™ Storage. Save 6% on Dimension™ Desktops and Inspiron™ Notebooks. Or call your NAHB sales representative at 888-577-3355. To view products recommended for small business, custom configure and order your systems, access your NAHB Premier Dell.com web site at http://premier.dell.com. Access code: NAHB; access key: NAHBDELL (case sensitive) For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to http://memberadvantage.nahb.org. Or visit www.nahb.org to explore the full range of benefits associated with membership in your local, state and national home builders associations. * Offer cannot be combined with other Dell discounts, offers or coupons. Discount valid only for new purchases from Dell Small Business for delivery in the 50 United States.
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts. Calendar of Events
To view more meetings & events information on the NAHB Web site, click here.
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts. |