| November 24, 2008 |
By Sandy Dunn
NAHB Chairman and
Jerry Howard
NAHB President and CEO |
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Drawing lawmakers' attention to the need for immediate action
to resolve the deepening crises in housing and credit markets, NAHB put builder concerns on buyer demand and AD&C financing issues in the national spotlight this week.
1. Ad Campaign:
 Building political support for a second economic stimulus package that includes substantial home buyer incentives, NAHB joined forces with the National Association of Realtors to sponsor a series of ads in several influential news publications. The ads call on Congress to adopt "a common sense, straightforward plan to deal with our housing and lending crisis" that will "grow our economy, encourage lending, and make mortgages affordable." They cite several very credible experts and their assessments that urgent action is needed. The ads appeared in The Washington Post and other highly read publications on Capitol Hill, including Politico, Roll Call and The Hill.
2. Working with Congress: NAHB urged lawmakers to address the dramatic deterioration in credit availability for acquisition, development and construction (AD&C) financing through numerous efforts this week. First, on the eve of a hearing on the Troubled Asset Relief Program and related initiatives, we called on House Financial Services Committee members to "examine the need for regulators and lenders to give leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals and forbearance on loans to give builders time to complete their projects." We pointed out that in almost every case, the financial institution would be better off working with the borrower to extend the loan rather than shutting off credit and forcing the builder into insolvency.
Next, working with NAHB, Sen. Ron Wyden (D-OR) sent a "Dear Colleague" letter to his fellow senators this week under the headline "Help Homebuilders Survive the Current Mortgage Crisis: Urge Treasury to Extend Leeway." Going forward, NAHB will work to get as many senators as possible to sign on to the letter before it is delivered to Treasury Secretary Henry Paulson.
3. Working with regulators: NAHB also sent a letter to FDIC Chairman Sheila Bair this week requesting a meeting to discuss the serious problems builders are having in obtaining credit for viable projects. The letter states that builders with outstanding construction and development loans are experiencing intense pressure as a result of requirements for significant additional equity, denials on loan extensions and demands for immediate repayment. It also informs her that builders are losing sales as a result of failed banks and thrifts being taken over by the FDIC. NAHB further publicized these concerns with a press release that went out to the national media.
Last but not least, read about important discussions NAHB held with the Office of Thrift Supervision on AD&C issues this week in the next story in this report.
For more information on our new ads, please contact Jay Shackford, x8406. For more information on NAHB's communications on AD&C and other financing issues, contact Dave Ledford, x8265.
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AD&C financing issues were also front-and-center
 when NAHB participated in a joint forum with the Office of Thrift Supervision, American Bankers Association and Independent Community Bankers of America on Nov. 19. NAHB Chairman Sandy Dunn, Chairman-Elect Joe Robson and several other NAHB members represented the builder’s viewpoint as the group jointly sought solutions on how to balance prudent lending practices with the need to maintain an adequate flow of credit to fund viable residential acquisition, development and construction projects. Discussion topics included appraisal problems and difficulties that builders are experiencing with lender and regulator actions on outstanding loans. Joe will brief NAHB Executive Board members on the discussion during the upcoming Winter Exec meeting right after Thanksgiving. NAHB also plans to hold similar discussions on AD&C lending concerns with the FDIC and Office of the Comptroller of the Currency in the near future. Contact: Dave Ledford, x8265.
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EPA released its long-awaited ELG guidelines
for the construction industry on Nov. 19. The proposal would require all job sites to use erosion and sediment control best management practices to reduce pollutants in storm water discharges. Some larger sites in areas of the country with lots of rain or where soils have high clay content would be required to meet a numeric limit for turbidity, a measure of sediment in water – meaning that many builders and developers would have to treat and filter their storm water discharges should the proposal become law. NAHB has advocated for better training and education programs for construction site managers so they can comply with EPA's existing rules and regulations rather than go to numeric limits for effluent limitation guidelines (ELGs), which generate additional compliance issues and costs. In fact, the additional tools builders would need to comply could cost between $5,000 and $35,000 per home site. The good news is that EPA recognizes that numeric limits are not appropriate everywhere; also, NAHB has the opportunity to prepare additional comments on the 201-page proposal, which we will certainly do. Contact: Calli Schmidt, x8132.
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With builder confidence at an all-time low,
NAHB again called on the Administration and Congress this week to offer strong new home buyer incentives to help get the housing market and national economy back on track. The NAHB/Wells Fargo Housing Market Index (HMI), released Nov. 18, showed that builder confidence in the market for new single-family homes plunged five points in November to an all-time low of 9 on the index. Given the tremendous economic uncertainties that have driven consumers from the marketplace, Congress will need to act swiftly and decisively to revive consumer demand and turn this economy around, NAHB said in its press release. Specifically, NAHB is calling on Congress to significantly expand the first-time buyer tax credit and provide a government buy-down of mortgage interest rates on newly purchased homes.
Two out of three of the HMI's component indexes declined in November. The index gauging current sales expectations fell six points to 8, a record low, while the index gauging traffic of prospective buyers fell four points to 7 – also a record low. The index gauging sales expectations in the next six months held firm from the previous month at its record low of 19. Read NAHB's press release or view the HMI tables online at www.nahb.org/hmi. Contact Paul Lopez (x8409) for help with media inquiries; contact Gopal Ahluwalia (x8480) or Ashok Chaluvadi (x8482) for help interpreting the HMI results.
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Housing starts and permits hit record lows in October,
according to the latest figures from the U.S. Commerce Department. With volatility and uncertainty running rampant on both Wall Street and Main Street last month, builders responded to deteriorating conditions in the housing market by pulling back on production and pulling fewer permits than ever recorded. Starts declined 4.5% to a seasonally adjusted annual rate of 791,000 units, which was the slowest pace for any single month since the government started keeping track in 1959. Single-family starts fell 3.3% to 531,000 units while multifamily starts fell 6.8% to 260,000 units. Issuance of building permits registered a sharp decline of 12% to 708,000 units (again, the lowest on record), with single-family permits down 14.5% to 460,000 units and multifamily permits down 12.3% to 241,000 units. Read our press release for more, or see the government's official report online. Contact Paul Lopez (x8409) for help with media inquiries.
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Apply this week to serve on 2009-2010 ICC Code Committees
 and beat the deadline of Friday, Nov. 28. Nominations for NAHB representatives to sit on the International Code Council's (ICC's) 2009-10 Code Committees are now being accepted. There are more than three dozen such committees that consider changes to the International Residential Code and the International Building Code, and NAHB representation on them is integral to our association's involvement in the code development process. NAHB representatives attend NAHB Provisions Oversight Group meetings, which are held at the National Housing Center in Washington, DC prior to each round of code hearings. At these meetings, attendees review all proposed code changes and develop an NAHB position on them. Travel expenses for the POG meetings are covered by NAHB. For the hearings themselves, Code Committee members are required to participate in pre-hearing conference calls, review the proposals assigned to them and attend the Code Development Hearings, which next year will be held in Baltimore, MD. Depending on the specific code committee, traveling to and attending the hearings takes two to six days, and Code Committee members travel at ICC's expense. Interested members must complete a detailed Background Information Form – and again, the deadline to apply is Nov. 28. Contact Larry Brown (x8565) for more information.
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Housing affordability rose to its highest level in four years
 during the third quarter of 2008, according to the latest NAHB/Wells Fargo Housing Opportunity Index (HOI), released on Nov. 17. The HOI indicates that 56.1% of all new and existing homes sold during the third quarter were affordable to families earning the national median income of $61,500. That's far more than the 40.4% of homes sold that were affordable to median-income earners at the peak of the housing boom. The two most affordable major housing markets in the country during the the third quarter were Indianapolis, IN and Youngstown, OH. In both places, 91% of homes sold between the beginning of July and end of September were affordable to median-income earners (at $65,100 and $52,000, respectively). One smaller metro market outranked all others in terms of housing affordability, however – Springfield, OH, where nearly 93% of homes sold were affordable to median income earners. The nation's least affordable metropolitan housing market? That would be New York-White Plains-Wayne, NY-NJ, where just 10.6% of all new and existing homes sold in the third quarter were affordable to those earning the area's median family income of $63,000. Read more in our press release. Contact Gopal Ahluwalia (x8480) for details on how the HOI is calculated; contact Paul Lopez (x8409) for help with media inquiries.
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Resources to help NAHB members affected by the California wildfires
 are available in several forms via NAHB.org. With hundreds of homes destroyed by the fires that have been raging in Southern California over the past week, NAHB is offering its support to help communities deal with the inevitable aftermath of these devastating events. Multiple resources designed to help HBAs assist their local consumers and building industry members are available online at www.nahb.org/disasterresources . NAHB has prepared radio Public Service Announcement scripts to warn consumers about unscrupulous contractors following a disaster, and we also have links to government assistance and information on disaster recovery from FEMA, the Red Cross and the Small Business Administration. There are also column service articles on natural disasters that you can use, including one that may provide some useful guidance for communities as they begin to rebuild because of its helpful advice on fire-resistant construction techniques. For help witih disaster response advice and resources from NAHB, contact Ken Ford at x8228; for help with local public relations concerns, contact Gwyn Donohue, x8447.
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Important news on the NAHB Las Vegas hotel block for IBS:
 We certainly hope you are planning to attend the upcoming International Builders' Show on Jan. 20-23 in Las Vegas, because it is beyond a doubt the best place to find the resources you need to survive and thrive in today's very challenging business environment. What's more, if you decide to book your Las Vegas hotel reservation through the NAHB hotel block, we have some very good news for you. The NAHB staff continues to negotiate lower hotel rates at this time, and any savings will be passed along to you – regardless of when you book your room. For example, if the hotel block room rate is $180 a night when you make your reservation today, but a lower NAHB room block rate becomes available in the future, you will receive the lower rate upon check-out. Again, you do not need to do anything to get the lower NAHB room block rate; NAHB will handle that for you! It's just one of the great benefits of booking in the NAHB block. Reminder, the NAHB hotel block closes on Friday, Dec. 12. Register for IBS and reserve your room today! Contact: Denise Miller, x8190.
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Farewell to George "Bud" Arquilla Jr.,
an NAHB Life Director and brother of former NAHB President Robert Arquilla. Bud died peacefully at Hinsdale Hospital on Nov. 13 at the age of 86. He was the former CEO of Burnside Construction Co., a prominent building firm founded in 1911 by his father, George Arquilla Sr., that has built over 28,000 homes and commercial buildings throughout the Chicagoland area. Along with his brother, Bud owned and managed many other successful construction-related companies as well. He served as president of the HBA of Greater Chicago in 1966 and 1967. Bud was a respected and much-loved member of the home building community, and our hearts go out to his family on his passing. Read his full obituary in the Chicago Sun-Times.
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The Monday Morning Briefing returns on Dec. 8
 following the Thanksgiving Day federal holiday. NAHB offices will be closed on Thanksgiving and the day after, Nov. 27-28, and the Monday Morning report will not appear on Dec. 1. We wish all of our readers a very joyous holiday with family and friends.
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