| August 24, 2009 |
By Joe Robson
NAHB Chairman and
Jerry Howard
NAHB President and CEO |
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Focusing public attention on the need to bolster housing
at this critical time, NAHB held three more regional teleconferences this week in which home builders told their stories and asked for lawmakers' help.
 As part of our ongoing Revive Housing - Restore America campaign in which NAHB members from across the country are urging Congress to take important steps that would stabilize housing, generate jobs and keep the economy moving toward recovery, three additional media teleconferences were conducted over the past several days. The first, on Aug. 19, involved several home builders from Colorado, including Skip Howes from Woodland Park; Ralph Braden from Colorado Springs; and David Tschetter from Windsor. NAHB Senior Economist Bernard Markstein also participated, as did real estate appraiser Craig Morley from St. George, Utah.
On Aug. 20, back-to-back teleconferences were held to highlight housing conditions in two more regions. The first involved home builders from Georgia and the Carolinas, including Steve Brock in Atlanta, Steven Mungo in Irmo, S.C., and Frank Wiesner in Raleigh, N.C. The second involved builders from the Gulf states, including Randy Noel in La Place, La., Bob Harrison in Jonesboro, Ark., and Frank Pucylowski in Ridgeland, Miss. NAHB Chief Economist David Crowe also participated in both of these events.
Speakers in all of the teleconferences did a great job of addressing the critical need for congressional action to 1) extend and enhance the home buyer tax credit program; 2) correct faulty appraisal processes; 3) improve housing credit conditions; and 4) support Net Operating Loss relief legislation. Read more about our ongoing Revive Housing - Restore America campaign and our teleconferences held in support of this major grassroots effort in the Sept. 8 edition of Nation's Building News Online. Contact: Paul Lopez, x8409.
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Builder confidence, single-family starts & permits continued upward
in July and August, according to the latest data on these measures released by NAHB and the federal government.
 The NAHB/Wells Fargo Housing Market Index revealed on Aug. 17 that single-family builders are slightly more optimistic about the state of today's marketplace. The overall HMI gained one point in August, rising to 18. While still quite low by any standard, this is the highest the index has been since June of 2008, and reflects continued improvement throughout most of this year. Perhaps most important, the HMI component gauging future expectations registered its first significant upward movement in several months, rising 4 points to 30. This was partly attributed to increasing signs of economic recovery as well as anticipated sales activity leading up to the Nov. 30 expiration of the first-time home buyer tax credit. Read more in our press release or see the HMI tables online. Contact: Ashok Chaluvdi, x8482.
Government data on housing starts and building permits for July, released on Aug. 18, revealed a fifth consecutive monthly improvement in single-family housing starts and a fourth consecutive monthly improvement in single-family permits. On the other hand, substantial declines on the multifamily side – brought on by a critical lack of financing for new projects – weighed down the overall starts and permit numbers for the month. While the single-family gains provided some encouragement that a housing recovery may be underway, NAHB Chairman Joe Robson and Chief Economist David Crowe each voiced concerns about the continued challenges facing the housing industry and the crucial need for government action to maintain this upward momentum. Read our press release for details, or see the government's official report online.
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...But improvement on the multifamily side will take some time,
 as indicated by results of the latest NAHB Multifamily Market Index (MMI), released on Aug. 19. The MMI for the second quarter of 2009 continued on a downward path across all rental sectors, although the condo index showed some mild improvement from the same time last year. According to NAHB Chief Economist David Crowe, "The continued contraction in multifamily starts is exacerbated by the 'shadow market' of empty foreclosed single-family homes and condos that are being rented at below-market rates by investor-owners." The MMI survey's "special questions" section this time around asked condo developers about their firms' sales cancellation rates. While 41% reported no change in their cancellation rates compared to last year's second quarter, 38% reported higher or substantially higher cancellation rates, with only 21% reporting lower cancellation rates. Nearly three-quarters of cancelled sales were to individual buyers, and a smaller portion (19%) were to individual investors. Fewer than one in 10 cancelled sales were to a corporate or large investor/buyer. Meanwhile, just over half of builders reported that they've dropped their condo prices, with the average reduction pegged at 17%. Read more in our press release, or contact Ann Marie Moriarty, x8350.
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OSHA will withdraw an interim enforcement policy
 on fall protection for certain residential construction activities, a move that NAHB asked the agency to consider as of last year. The directive in question, "Plain Language Revision of OSHA Instruction STD 3.1, Interim Fall Protection Compliance Guidelines for Residential Construction," was first issued in 1994. In April of 2008, NAHB requested that OSHA rescind this policy because it had created confusion in the residential construction industry over what fall protection methods and systems needed to be used to comply with OSHA standards. Specifically, NAHB noted that it was extremely difficult for builders and trade contractors to locate, review and comprehend all of the information they needed to be in compliance. NAHB also urged the agency to follow the fall protection guidelines in §29CFR Subpart M, which still allows some flexibility to residential construction employers for providing fall protection systems. In a statement following OSHA's latest decision, NAHB commended the agency "for taking this step to protect workers and for recognizing NAHB's assertion that due to advances in fall protection equipment technology and construction methods, at this time the best action is to reevaluate this directive." While home builders should be aware that the compliance enforcement policy will be changing, they are of course still encouraged to implement fall protection methods and systems on a continuous basis. Read more in NBN Online, or contact Rob Matuga, x8507.
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Asking for clearer regulations under the Endangered Species Act
 and its Section 7 consultation process, NAHB sent an official letter on Aug. 3 to the Division of Policy and Directives Management of the U.S. Fish and Wildlife Service (USFWS). In this communication, we recommended a number of changes to that consultation process, which is currently difficult to implement. Specifically, to improve regulation under the Endangered Species Act, we suggested that the USFWS:
1) Take timely steps to simplify the Section 7 consultation process by improving its coordination among federal agencies;
2) Adopt clear and consistent guidelines for determining critical habitat;
3) Define the "adverse modification" standard for determining when impacts to species habitat occur; and
4) Take all reasonable steps to ensure that the law is not used inappropriately as a vehicle to regulate greenhouse gas emissions.
Read NAHB's letter to USFWS officials online, get more comprehensive coverage of our efforts in NBN Online, or contact Calli Schmidt, x8132, for more information.
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Home builders and developers will have to make drastic changes
 that are both expensive and difficult to implement in order to manage storm water discharge from construction sites under the EPA's recently proposed effluent limitation guidelines (ELGs) for the construction industry. In a newly published piece in NBN Online, longtime Environmental Issues Committee member Chuck Ellison explains the startling ramifications of this very troubling proposal. Chuck, who is a vice president for Miller & Smith home builders in the Washington, D.C. metro area, also recently brought his concerns directly to EPA officials in a meeting that included NAHB staff. For example, he explained that instead of building sediment ponds with passive storm water collection systems, the proposed guidelines could require active systems – including the manpower to run them – in areas of the country where clay makes up more than 10% of the soil and there is a lot of rain. So in such a place where his company operates, Chuck says, where they currently excavate, discharge and let the runoff water clean itself, "Now the EPA wants a big machine down there to clean it." For one of his company's sites where 11 different sediment basins are currently employed, he estimates they would need 11 machines and at least four people on site when they are pumping – including when it rains at night. To say that such an operation would be very costly is a dramatic understatement. In fact, NAHB estimates that the proposed requirements could cost developers up to $45,000 per acre to implement, with questionable environmental benefits.
Leading up to EPA's final decision on ELGs, our association continues to reach out to the agency with our grave concerns, as we did in a meeting this week with the new Assistant Administrator for Water. Read more about this very troubling issue in NBN Online, or contact Calli Schmidt, x8132.
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Nationwide housing affordability is hovering near an all-time high
 according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) for the second quarter of 2009, released Aug. 19. The HOI showed that 72.3% of all new and existing homes sold between April and June of this year were affordable to families earning the national median iincome of $64,000. This is barely changed from the 72.5% of homes that were affordable during the first quarter, and is much greater than the 55% of homes sold that were affordable to median-income earners in the second quarter of last year. Such affordability gains, along with the $8,000 home buyer tax credit, are stimulating demand, particularly among young, first-time purchasers. However, NAHB maintains that Congress will need to extend the tax credit for another year and make it available to all income-eligible buyers in order to continue encouraging activity in the trade-up market.
As usual, Indianapolis maintained the title of the most affordable major housing market in the country in the second quarter's HOI results, with nearly 95% of homes sold there affordable to those earning that metro area's median income of $68,100. Meanwhile, once again occupying the very bottom of the affordability scale for major metros was New York-White Plains-Wayne, N.Y.-N.J. There, just 21% of homes sold during the period were affordable to those earning the area's median income of $64,800. Read more in our press release or check out the HOI tables online. Contact Rose Quint, x8527.
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Helping two Katrina victims rebuild their lives
 by rebuilding their home with the latest systems-built technology, members of the NAHB Building Systems Councils (BSC) and Lousiana Home Builders Association (LHBA) are making a lasting and positive difference that will inspire goodwill throughout our industry for years to come. On August 29, the fourth anniversary of the terrible storm, cab driver Henry Adams and his wife, Gwendolyn (pictured with NAHB's Jeremy Bertrand), will have a fully completed new home on the lot where their storm-devastated residence once stood. This successful project came to fruition thanks to the generous donation of materials, funds and time of BSC and LHBA members as well as an $85,000 grant from NAHB's Home Building Industry Disaster Relief Fund. With panels donated by Gary Grossman's Forest Homes, trusses from Dwight Hikel's Shelter Systems, and day-to-day project coordination provided by Reve Inc.'s Randy Noel, this project, started in mid-July, has truly been a team effort among NAHB's most hardworking and generous members. In the midst of such tough economic times, it is truly refreshing to hear about such an outstanding philanthropic endeavor. Read all about this inspiring project and those who've been working on it at the BSC Project Rebuild Web page, www.nahb.org/bscprojectrebuild. You can also watch a great video on this project at www.nahb.org/nahbtv. Contact: Jeremy Bertrand (x8353)
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Time to get ready for the Fall Board of Directors Meeting,
 which is actually right around the corner. This event is scheduled to take place on Oct. 3 in Chicago, with associated NAHB meetings taking place from Sept. 30 - Oct. 3. The following schedule of events is a partial listing provided for your convenience; please check the official Fall Board program when you receive it for the exact time and location of each scheduled meeting. You can also check out our Fall Board page on NAHB.org for more information.
Wednesday, Sept. 30
State Representatives
National Area/Associate Chairmen
Joint National Area/Associate Chairmen and State Representatives
Executive Board
Thursday, Oct. 1
Committees, Subcommittees, Councils and Affiliates
National Housing Center Board of Governors
Nominations Committee
Friday, Oct. 2
Committees, Subcommittees, Councils and Affiliates
NAHB Past Chairmen's Council
Saturday, Oct. 3
Area Caucuses 1-15
Joint Executive, Budget & Resolutions
Board of Directors
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Reminder: NAHB to shut down operations August 23-28...
 As a cost savings effort, NAHB will be closed for business for eight days in 2009. Under the plan, NAHB will shut down its operations for the final week of August (August 24 through 28) and the three days prior to the Thanksgiving holiday (November 23, 24 and 25). In addition, all staff compensation will be cut by a commensurate amount. NAHB President Jerry Howard reported to the NAHB Board of Directors in May that, “This shutdown plan, along with other cost-cutting measures that have already been adopted, is being implemented to help the association save millions of dollars.”
During this shut down, your NAHB staff contacts will not be in the office or generally available via phone or e-mail. Staff will answer any messages received during the closure when they return to the office and normal business operations are resumed.
Please also note that as a result of the shutdown, there will not be a Monday Morning Briefing Letter for Aug. 31.
Should you have a question or concern during this time, please leave a message with the NAHB Service Center at 800-368-5242, x0 or info@nahb.org. Again, responses to any waiting e-mails will not be possible until NAHB returns to normal business operations. Your flexibility and patience is appreciated during this challenging time.
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