The inventory of condos units that havn’t been sold — some of which are winding up in the rental pool — is also complicating the picture. Witten sees demand for rental apartments continuing to outpace net supply only until mid-2007. That will lead to a drop in the rate of rent growth, so rents will still rise, but not as fast.

Witten had some good news about condos: The sales rate for existing condominiums has stabilized. It’s down from last June’s high of 943,000 units (reflecting an annual rate), but seemed to settle at about the 750,000 annual rate in November, up from 741,000 in October. While enthusiastic building has resulted in an 8% inventory of empty multifamily for-sale units — a 15-year high — it’s not a replay of the 1980s.

Witten sounded a positive note when he pointed out that for-sale starts seem to have peaked during the 2nd quarter. “The sector has made the first steps toward recovery with a drop in for-sale starts to a 155,000 annual rate for the 3rd quarter,” he said.

An additional bit of good news for all multifamily builders, said Witten, is that the cost of building, while still rising, is not rising nearly as fast as it had been.

For an in-depth forecast from NAHB forecaster Bernie Markstein and three of the industry's leading developers, Ron Lockwood (Lockwood Companies), Bill Donges (Lane Co.) and Steve Patterson (ZOM), attend the Multifamily Economic Forecast & State of the Industry session at the International Builders’ Show, Thursday, Feb. 8, from 1:30 to 3:00 p.m.

• Changes to the 2530 Process Could Make things More Complicated

HUD is proposing changes to the rule that determines what information needs to be provided to the agency by people and organizations (“participants”) that want to use certain HUD programs, including FHA mortgage insurance. Some of the currently required information is difficult to obtain from investors. For many FHA-insured projects that also include Low Income Housing Tax Credits, the requirements are burdensome.

NAHB and other industry groups have met with HUD numerous times to recommend ways to relieve the more onerous provisions without affecting HUD’s need to ensure satisfactory performance.

But HUD’s draft proposed rule (view this page) — not yet officially published for comment but circulated among industry groups — has serious problems. The definition of  “participants” would be expanded to three classes of participants: operational, supportive and investment. But operational participants (owners, operators, CEOs, CFOs, board presidents and chairs) would be responsible for certifying that investors meet HUD’s requirements. Another troubling provision is the establishment of a new indicator of risk, which is not as yet well-defined. HUD also would establish new standards for disapproval.

Four members of Congress have sent a letter to HUD asking the agency to withhold the proposed rule from publication, citing industry concerns.  HUD is complying with this request, at least for now.  NAHB staff is working with members and other industry groups on this issue and, should the proposed rule go forward, will prepare a comment letter for submission to HUD. For an excellent summary of the draft proposed rule prepared by Ballard Spahr Andrews & Ingersoll, please view this page. Contact Claudia Kedda with any comments and questions.

• Section 8 Has New Rent Test, Other Changes

Changes to HUD’s Section 8 Renewal Policy Guide Book, issued last month, include a requirement that an expiring Section 8 contract at a so-called “exception project” use the “lesser of” test to determine future rents each time the contract is renewed, instead of only when the original contract is renewed. This change, and four others — which also have a greater impact on exception projects — can be viewed on HUD’s Web site. The complete guide also is available on that site.

For more information, e-mail Claudia Kedda, or call her at 800-368-5242 x8352.

• Unions Sue to Force OSHA to Issue Protective Equipment Payment Rule

The AFL-CIO and the United Food and Commercial Workers Union are suing the U.S. Department of Labor to force them to issue a final rule on employer payment for protective equipment. The rule is not about what equipment is required; it’s about whether the employer has to pay for it. The proposed rule, published in 1999, would force employers to pay for protective equipment for employees if the equipment were required to do the job safely under OSHA regulations. At the time NAHB sought exemptions for “tools of the trade,” especially hard hats and gloves — basically, things that are personal in nature and that the worker takes home at the end of the day. OSHA had exempted prescription safety glasses, safety shoes, and logging boots. The unions say the final rule was promised in 2000, but has not yet been issued — thus, the lawsuit. The suit asks the court to order the Labor department to issue a rule within 60 days after the court hears the case. For more information, e-mail Rob Matuga.

• Supreme Court Agrees to Hear NAHB Case on Clean Water Act

In a milestone achievement that marks the first time our federation has been named as a petitioner in a lawsuit before the U.S. Supreme Court, NAHB will taking a case to the highest court in the land this spring. The high court has granted our request (and that of the EPA) to review a lower court ruling in NAHB  v. Defenders of Wildlife that would add new requirements for states that want to administer Clean Water Act permitting programs. These additional requirements would result in higher costs for builders that would ultimately be passed on to consumers.

At issue is the transfer of authority for Clean Water Act permitting from federal regulators to the state of Arizona. Defenders of Wildlife successfully sued the EPA for not considering the needs of endangered species before allowing this transfer. The case opens the door to adding Endangered Species Act considerations any time the federal government transfers administrative authority to a state — not just for Clean Water Act permits, but for other programs and permits as well.

While NAHB has played an important role in other regulatory cases that have gone to the Supreme Court, the association has never before appeared as a primary petitioner. NAHB will be joined by the HBA of Central Arizona and the Southern Arizona HBA in this effort The court will hear oral arguments in April. Read more in NBN Online, or contact Duane Desiderio at 800-368-5242 x8146.

In Boston, the LEED requirement applies to all 50,000-plus square-foot buildings, and the specifics have been incorporated into the local building code.

In Washington, D.C, the mandate applies to new and substantively improved 50,000-plus square-foot non-residential buildings. But by 2008, any D.C.-owned 10,000-plus square-foot. residential building will need to exceed the Green Communities 2006 standards. The D.C. law also makes reference to incorporating the LEED for Homes criteria when they are made public.

For more information, e-mail Emily English, or call 800-368-5242 x8366. [return to top]

St. Louis — home of the famous Gateway arch, baseball’s Cardinals and a world-class zoo, also has many local green builders in its Home Builders Association. They’ve scheduled their annual Tour of Green Homes for Sunday, March 25.

Show organizers are especially excited about Monday morning’s keynote speaker. William McDonough, the Charlottesville architect and originator of the “Cradle to Cradle” philosophy of sustainable design, has been named a Hero of the Planet by Time magazine for his vision of socially and economically intelligent architecture.

The largest exhibit hall yet, with more than 70 vendors and service providers, will be open Monday and Tuesday, March 26-27, with breakfast and lunch provided near the booths. And of course, it wouldn’t be a trip to St. Louis without a tour of the Anheuser-Busch Brewery. The Saturday afternoon event will offer great networking opportunities for attendees to get to know each other before the serious work of the conference begins.

View these links to download the conference brochure and register online. [return to top]

• International Builder’s Show —  Feb. 3-10

The International Builder’s Show (IBS) in Orlando includes committee meetings and pre-show events, Feb. 3-6, as well as the Board of Directors meetings, trade show, and educational seminars,  Feb. 7-10.

The schedule of Multifamily-related events and educational programs is available at this link. The full schedule of events is available at www.buildersshow.com.

• Best of 50+ Housing Awards Deadline — Feb. 23

Housing professionals working in the 50+ housing market are encouraged to enter the 2007 Best of 50+ Housing Awards, sponsored by NAHB’s 50+ Housing Council. The awards showcase the industry’s best community designs, model merchandising, and advertising and marketing efforts in that market. Award entrants have until February 23 to submit their entries.

The 2007 program includes more than 50 categories covering all aspects of the 50+ housing market. Active adult categories include overall community, clubhouse design, condominium unit design, and model home merchandising. Other design categories include aging-in-place, assisted living, congregate-living community, continuing care retirement communities, mixed-use, multifamily housing, renovated housing and special-needs housing.

For more information, view this page on NAHB’s Web site.

• 2007 Pillars of the Industry Conference and Gala — April 11-14

The upcoming Pillars of the Industry Conference and Awards Gala will be held at the Westin Diplomat Resort and Spa, in Hollywood, Fla., April 11-13. The venue has a lovely beachfront location, featuring a variety of water sports and sport fishing opportunities, as well as a full spa facility for off-hours relaxation. Of course, as always, the educational programs will feature a top-flight roster of speakers drawn from upper-tier industry leaders. For more information or to register online, view this page.

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• Free UPS Shipping from the BuilderBooks Store in Orlando

Problem: You want to buy lots of heavy books at the International Builders’ Show—but you don’t want to lug them home. Solution? Members who have a UPS account and are registered in the NAHB/UPS shipping discount program will receive one free shipment at the 2007 IBS BuilderBooks book store.

Please be sure to enroll in the NAHB-sponsored UPS discount program prior to the show.  If you already have a UPS shipper number, simply include it on the enrollment form.  If you don’t have one, UPS will assign one to you when you enroll in this program. Visit  www.savewithups.com/nahb to sign up today!

• Eye on the Economy Newsletter

In this month’s issue, NAHB Chief Economist David Seiders describes current economic growth as being in a “temporary slowdown phase,” but advises that there is little to worry about on the inflation front. Read more on this Web page, or register for a free subscription at this link.

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