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Some Big Builders Unloading Property, Options
Current housing market could present opportunities for land-hungry small and regional players
 Local business publications in the past month have noted some large national and regional builders selling off land, canceling or renegotiating options, and putting the brakes on land purchases.
The Triangle Business Journal, Jacksonville Business Journal, and Columbus Business First, are among the publications that have seen the shift in their local markets.
"It's a changing world," an official for KB Home in Raleigh told the Triangle Business Journal, according to an article in the Nov. 17 edition. A Nov. 20 article in Columbus Business First noted that excess land inventory was being sold off as individual lots as well as larger parcels. "Now is the time for the small builder to buy lots," Ray Rodriguez, president of Real Estate Strategy Center of North Florida Inc., told the Jacksonville Business Journal, according to an article published on Dec. 1. In some cases, smaller builders are joining forces to acquire now-available parcels that otherwise would be tough to afford.
One large regional player looking to sell nearly 10% of its land assets estimated that with slowing sales, the company had nine years worth of land.
“There are probably going to be some good opportunities for regional builders in 2007 and 2008,” says Greg Schwinn, chairman of NAHB's Single Family Production Builders Committee, as the large national builders change their land positions.
“If they’re repositioning themselves on land, that probably gives a good opportunity for the regional builders” to acquire more subdivided and finished lots in desirable locations.
An educational session at the 2007 International Builders' Show will discuss strategies for finding land as well as determining project feasibility, forecasting sales rates, and ensuring a proposed project fits the land.
Go online to www.buildersshow.com to learn more.
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New Biztool on Depreciating Assets
 Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.
Most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable. However, understanding and applying these deductions can be challenging.
Go online to NAHB's Biztools for a brief overview and links to resources for you and your tax accountant, and know the rules before applying this deduction.
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Tax Time Is Coming: Keep Up With www.nahb.org/taxes
 With 2006 nearing an end and the tax season approaching, maybe it’s time to brush up your small business/construction business tax knowledge.
NAHB’s Business Management Resource Web site has made it easier for you to do that with a new page, www.nahb.org/taxes, with key information about deductions and credits that may apply to you, as well as other tax resources and links.
Deductions for the construction industry as domestic manufacturers and credits for energy efficient cars and homes are a few recent additions to the tax code. Builders and remodelers can read about these and tax-related issues such as records retention, estate planning, capital gains, and more by going online to www.nahb.org/taxes.
For all of your building business management needs, including resources on financial and construction management, strategic planning, information technology, and more, go online to www.nahb.org/biztools.
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Change Your Ways With Trade Contractors: Go to www.nahb.org/trades
Whether your skilled labor market is still tight, or less-than-brisk sales have drawn a stream of contractors knocking at the door of your building business, now is always a good time to improve your trade contractor processes and practices.
A new NAHB Business Management Web page, www.nahb.org/trades, can help you better manage your subcontracting, with information on improving scheduling, shortening cycle time, eliminating punch lists — in general, ensuring you get the best quality for your money.
For all of your building business management needs, including resources on financial and construction management, strategic planning, information technology, and more, go online to www.nahb.org/biztools.
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Swift Raids Highlight Difficulty in Verifying Worker Status
Recent Immigration and Customs Enforcement raids on Swift meat processing operations in six states demonstrate flaws in the current enforcement system, according to a recent article in USA Today that quoted NAHB CEO Jerry Howard.
Swift was among a handful of companies using a federal database to try to verify worker documents at the time federal agents descended on its operations, temporarily closing six plants. The Basic Pilot Program was implemented by federal legislation in 1996 as an experimental electronic employment verification process. Initially to be evaluated over four years, Congress has extended its implementation through 2008, and the availability of the program has been expanded to all 50 states.
While the program remains voluntary at the federal level, recently passed and proposed state and local legislation would require its use, even though the program has been criticized for an unacceptable degree of error in its database, and its inability to detect identity thefts, which is what the Swift & Co. raids demonstrate.
"Swift was in a position to be cutting edge ... Small businesses can't afford to do this kind of thing," Howard told USA Today, according to the Dec. 14 article.
Greenberg Traurig Attorneys at Law, which advises corporations on employment issues including I-9 verification, said in a recent alert that with regard to immigration enforcement, "In general, the burden on employers will continue to grow." The alert, published in October, notes, "the construction industry is of particular interest to ICE [Immigration and Customs Enforcement]." Local ICE field offices are investigating "cash" payrolls for short-term laborers and encouraging subcontractors to testify against contractors in alleged violations.
NAHB's online resources for builders on immigration include an I-9 Q&A. The federation continues to advocate for comprehensive immigration reform legislation that would address the needs of the home building industry and expects a bill to be introduced in the Senate early in 2007.
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HEPA Filters Urged for Sanding, Grinding in Pre-1978 Homes
Common professional remodeling activities do not create a new lead hazard and, in fact, improve the conditions in a home where lead paint is present. However, according to a comprehensive NAHB study, the less common practice of uncontrolled power sanding can increase the amount of lead dust in a home.
Therefore, NAHB recommends that when power sanding or grinding tools must be used in a pre-1978 home, a HEPA filter be attached to the exhaust if lead is present in the work area.
NAHB also agrees with Environmental Protection Agency (EPA)-recommended practices including:
- Controlling dust by misting surfaces with water prior to sanding or scraping
- Covering the area under construction with durable protective sheeting
- Using barriers to contain dust to the immediate work area
- Providing exhaust ventilation
- Disposing of lead paint waste properly
Under federal law, remodeling contractors must provide the EPA pamphlet titled "Protect Your Family from Lead in Your Home" before beginning work in a pre-1978 home and must document that homeowners received the brochure. It is available online, or by calling 800-424-LEAD.
More information for professional remodelers is available from NAHB's Remodelors™ Council.
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Manager Sought for Home Technology Program
NAHB is seeking a manager to launch and grow an exciting new program related to home technology. We are seeking a dynamic and highly skilled manager to serve as primary contact working with members, sponsors, and industry experts.
This manager will write and edit articles, develop related resources and publications for print and online, and manage educational sessions.
Five years of experience is desired in program development/management, plus excellent writing and editing skills, the ability to distill complex technologies into easy-to-read content, and to handle multiple projects and meet tight deadlines.
The home technology manager will facilitate member groups to come to consensus and generate new ideas. Experience with associations, non-profit boards, or committees is preferred, as is knowledge of home technology and electronic systems integration in the residential construction industry preferred. We offer excellent benefits.
Submit salary requirements with resume to JobOpportunities@nahb.com. EOE
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Inventory Expected To Delay Housing Production Turnaround
 NAHB’s housing forecast shows a trough in home sales in the first quarter of 2007, a trough in housing starts in the second quarter and a bottoming out of home price appreciation in the second half of 2007. The projected recovery process lifts home sales and housing production back up toward trend by the end of 2008, and national house price appreciation will be comfortably in the positive zone by then.
The inventories of unsold single-family homes and condo units have edged down a bit from recent records, but inventory levels and inventory-to-sales ratios still are quite high. Furthermore, inventory overhangs undoubtedly are larger than shown by published data, and vacant units now account for an unusually large share of homes for sale. Therefore, there is likely to be downward pressure on new housing production and home price appreciation for at least a few more quarters.
For more in-depth information on the housing economy, including data by metropolitan area, state, and building industry segment (such as non-residential and remodeling), subscribe to HousingEconomics.com.
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Senate Bill Strikes Balance on Storm Water Rules
NAHB-supported storm water legislation was introduced on Dec. 8, in the waning days of the 109th Congress. S.4101, introduced by Sens. James Inhofe (R-Okla.) and Thomas Carper (D-Del.). The legislation takes into account the differences between residential and other construction activity.
The bill would update and improve the EPA's storm water permit and enforcement policies that currently add anywhere from $1,400 to $4,500 to the cost of every lot while doing little to improve water quality.
A more balanced approach in S.4101 would not only simplify compliance but also offer a more consistent and sensible regulatory stance that provides better protection for America's rivers and streams.
Along with House companion bill H.R. 5558, the legislation will serve as an excellent starting point for the 110th Congress to address this important issue when it convenes next month. To view the legislation, click here and type S.4101 or H.R.5558 in the box in the center screen. For more information, e-mail Jim Tobin, or call him at 800-368-5242 x8258.
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LeapFrog Technology to Help Workers Learn English
Sed de Saber™—Construction Edition, a tool employing LeapFrog Enterprises technology to teach English as a second language, is in the final stages of development and will be released at the 2007 International Builders' Show in Orlando, according to the Home Builders Institute, NAHB's workforce development organization.
The tool is being developed by HBI in partnership with Retention Education, LLC, and will teach more than 500 vocabulary words and 340 phrases specific to home building. The kit includes a Quantum Pad™, microphone learning system, seven books with data cartridges, headset, power adapter and carrying case.
"For the first time, we will now have a tool that will give us the opportunity to open those lines of communication with our growing Hispanic workforce," said Michael Sivage, an Albuquerque builder/developer and chairman of HBI. "This will improve our worker recruitment efforts, profitability, customer satisfaction and safety on the job site, as well as elevate the quality of life for this important segment of our population," he said.
For more information, contact Ashley Mills at 800-368-5242 x8926.
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United Way, NAHB's Disaster Relief Fund Accepting Donations
While the devastation wrought on the Gulf Coast by hurricane Katrina may seem like a distant nightmare, New Orleans is still very much in need of building materials — including drywall, plywood, and shingles.
Donations are to be processed through Gifts in Kind International, a conduit between for-profit and nonprofit organizations, and shipped directly to New Orleans. To donate, complete a Product Donation Agreement form and fax it to the attention of Doyle Delph, of Gifts In Kind, at (fax) 877-798-3192. You can also contact Doyle by phone at 703-836-2121 x532, or visit the Gifts In Kind International Web site.
Also, please keep in mind that the Home Building Industry Disaster Relief Fund (HBIDRF) is accepting end-of-the-year monetary donations as well. NAHB created this fund to help rebuild communities affected by natural disasters. For more information on programs funded through the HBIDRF, please visit www.NAHB.org/disasterrelief.
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