| November 23, 2009 |
By Joe Robson
NAHB Chairman and
Jerry Howard
NAHB Chief Executive Officer |
|
|
Your input is needed on reforms to the housing finance system
that Congress is gearing up to consider with regard to restructuring the housing-related government sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Please take a few moments to respond to the three questions below.
 With the nation's two largest providers of funds for home mortgages now in conservatorship and the housing finance market in turmoil, Congress is expected to soon begin deliberating the best course of action to take on Fannie Mae, Freddie Mac, and possibly the Federal Home Loan Banks. To get an accurate perspective on the possibilities for GSE reform that could be considered and to educate home builders and others about what could be in store for the housing finance market, NAHB held a groundbreaking Webcast event on Oct. 27 in which numerous proposals for revamping the GSEs' regulatory structure were discussed. The possibilities range from complete privatization of the entities, to complete government control, to a public-private combination that's somewhere in between. Familiarize yourself with what's at stake, the potential outcomes of this important effort, and existing NAHB policy on GSE reform by linking to a replay of NAHB's Webcast and related information here. You can also read about what transpired during the Webcast in Nation's Building News Online. Then, help make sure that NAHB can accurately present your views as part of our upcoming lobbying efforts in Congress by providing your responses to the following questions:
1. What is the appropriate role for the federal government in support of the primary and secondary mortgage market? Should the government implicitly or explicitly guaranty obligations of the GSEs? Should there be any guaranty at all?
2. What is the appropriate structure for the secondary mortgage market to ensure a reliable supply of affordable and available mortgage credit?
3. Should the role and function of the Federal Home Loan Banks be altered as Congress considers changes to the role and structure of Fannie Mae and Freddie Mac?
Please send your responses to the above questions to this mailbox, and thank you very much for your invaluable input!
WHAT THIS MEANS TO YOU: Upcoming changes to the regulatory structure of the housing-related GSEs could substantially impact the availability and financing costs of home mortgages, thereby affecting prospective home buyers' ability to go forward with a purchase. Because access to affordable credit is the lifeblood of the housing industry, the outcome of the regulatory shift that Congress will be contemplating could very well determine the resilience of the burgeoning housing recovery as well as the market's future stability.
|
 |
What subcontractors don't know about the new lead paint rule
 that is set to go into effect in April 2010 could hurt them, which is why NAHB held a meeting at the National Housing Center last week to discuss concerns about the rule with representatives of several remodeling-related trade associations. In fact, few subcontractors associated with home building and remodeling (including insulation and HVAC installers and others) are even aware of the Lead: Renovation Repair and Painting Rule that will govern remodeling activities in homes and child-occupied facilities built before 1978. Those who are aware of it may assume that it targets only professional remodelers, but this is not the case. In fact, it applies to any contractor who "disturbs" at least six square feet of painted surfaces on the inside of a home or 20 square feet on the outside. That means that contractors who install windows, insulation, home entertainment equipment or similar items in the target housing must become certified to do the work.
Another little-known fact: EPA estimates that 200,000 people will need to be certified by the April 22 deadline, yet the agency has so far approved only 97 firms to do the training. While the EPA has hired a public relations and marketing firm to create an awareness campaign for both industry professionals and the public, and the rule is set to take effect in five months, that campaign has not yet been initiated. Meanwhile, NAHB Remodelers have indicated that EPA's cost estimates for compliance, at $35 per job, don't come close to reality. One remodeler's budgeting worksheet estimates the training, materials, testing, cleanup and recordkeeping required under the rule adds up to $1,200 or more per job, not including costs for subcontractors to comply. And finally, one more unfortunate truth about the EPA's LRRP rule is that even as compliance training is underway, the EPA has released a proposed amendment to the rule that would add more requirements and costs to comply. Read more about the rule and these disturbing observations in last week's Nation's Building News Online, or send questions to MondayMorningQuestions@nahb.com.
[return to top]
|
|
NAHB's Legal Action Fund is helping members and HBAs
 pursue court cases involving nationally significant issues and legal matters that are commonly faced by builders and developers. The latest grants from our fund were approved by the NAHB Legal Action Committee and Executive Board during our Fall Board of Directors meeting week in Chicago this October. Recipients of the latest funding include:
The BIA of Central California, which is challenging a municipality's farmland mitigation program that requires developers to replace agricultural land on a one-to-one basis when it is rezoned for residential use;
The HBA of Greater Cleveland, which is supporting a member's challenge to an ongoing enforcement investigation into whether a man-made upland ditch may be used to link an isolated wetland area to traditional navigable waters; and
The HBA of Metropolitan Harrisburg in Pennsylvania, which is challenging a nutrient and sediment total maximum daily load (TMDL) requirement, claiming that the Pennsylvania Department of Environmental Protection violated a number of federal and state administrative procedures.
Read more about each of the above-mentioned cases in NBN Online.
The NAHB Legal Action Fund reviews applications for funding three times a year in conjunction with meetings of the NAHB Board of Directors. The deadline for submitting an application that will be considered at the next Board meeting in Las Vegas is Dec. 4. Download applications and guidelines from www.nahb.org/legalaffairs. Contact: Christopher Whitcomb, 800-368-5242, x8329.
WHAT THIS MEANS TO YOU: NAHB's Legal Action Fund was created to ease the burden on NAHB members and home builders associations who are pursuing expensive and time-consuming cases involving nationally significant issues or legal matters commonly faced by builders and developers. Through this program, we can help win precedent-setting court cases that will effect NAHB members and their businesses for years to come.
[return to top]
|
|
Builder confidence was unchanged in November
 according to results from the NAHB/Wells Fargo Housing Market Index (HMI) that were received primarily before Congress had acted to extend and enhance the home buyer tax credit. The HMI held even with October's downwardly revised 17 reading in November, though its component gauging sales expectations for the next six months did rise two points, to 28. The report "confirms that home builders and buyers were in something of a holding pattern as the anticipated expiration of the tax credit grew near and congressional action had not yet been taken to address this," noted NAHB Chief Economist David Crowe. But now that Congress has done its job by both extending the tax credit into next year and expanding its field of eligible buyers, "We are very hopeful that this will have the intended stimulative effect on sales activity going forward," noted NAHB Chairman Joe Robson. Meanwhile, a special questions section of the HMI survey revealed that fully one-third of respondents have recently lost sales due to low appraisal values – that's up from a quarter of all respondents who said so this July. Read our HMI press release for more, or view the HMI tables at www.nahb.org/hmi.
[return to top]
|
|
Housing production declined in October
 as builders awaited word on whether the home buyer tax credit would be extended beyond the end of November, according to data released by the U.S. Commerce Department on Nov. 18. Total housing production fell 10.6% to a seasonally adjusted annual rate of 529,000 units for the month, with single-family starts down 6.8% to 476,000 units and multifamily starts down a dramatic 34.6% to a record low of just 53,000 units. "Builders were clearly in a holding pattern in October as the future of the home buyer tax credit hung in the balance," noted NAHB Chief Economist David Crowe in NAHB's press release reacting to the numbers. "This is not surprising, given the fact that the tax credit had been the primary driver of construction and sales in the summer and early fall." However, the fact that permits for single-family construction remained relatively unchanged in the month is an indication that builders are preparing for the possibility of more favorable market conditions in the future. Overall permit activity in October fell 4% to 552,000 units, due primarily to a double-digit drop-off on the multifamily side. While single-family permits were essentially flat at 451,000 units, multifamily permits were down nearly 18% to 101,000 units. See NAHB's press release for more, or view the government's official report online.
[return to top]
|
|
Housing affordability remained near record highs in the 3rd quarter,
 according to the latest NAHB/Wells Fargo Housing Opportunity Index (HOI), released Nov. 19. The HOI indicated that just over 70% of all new and existing homes that were sold in this year's third quarter were affordable to families earning the national median income of $64,000. This was down slightly from the near-record 72.3% of homes sold that were affordable to median-income earners in the previous quarter, but still up substantially from the 56% of homes that were affordable to that group of potential buyers in the third quarter of 2008. It should come as no surprise that Indianapolis was again the most affordable major housing market in the country this time around; after all, this is the metro's 17th consecutive appearance at the top of the affordability chart. There, nearly 95% of homes sold in the third quarter were affordable to the area's median-income family. Also near the top of the list of the most affordable major metros were Youngstown-Warren-Boardman, Ohio-Pa. and three Michigan metros: Detroit-Livonia-Dearborn; Warren-Troy-Farmington Hills; and Grand Rapids-Wyoming. In addition, five small metro housing markets posted even greater affordability measures than Indianapolis. They were: Kokomo, Ind.; Springfield, Ohio; Bay City, Mich.; Mansfield, Ohio; and Elkhart-Goshen, Ind. The nation's least-affordable major housing market in the third quarter was New York-White Plains-Wayne, N.Y.-N.J., where just over 19% of homes sold were affordable to median income-earners. Read more in our press release, or check out the HOI tables online. Send questions regarding the affordability index to: MondayMorningQuestions@nahb.com.
[return to top]
|
|
Five HBAs have been honored for their community service projects
 with Association Excellence Awards from the National Housing Endowment. Projects included building a new home for a family whose home was destroyed by a flood; building an emergency shelter for victims of domestic violence; building wheelchair ramps for low-income home owners with disabilities; working with young adults in a program called Community Youth Build; and providing interactive learning to low-income third grade students. The service awards are a formal recognition of the community service performed by building industry professionals in their communities across the country, and are a part of the Home Builders Care initiative started by 2000 NAHB President Bob Mitchell. Winners of the 2008 Association Excellence Awards for Best Community Service Project include:
Southern Tier Home Builders and Remodelers Association, Endwell, N.Y.
Master Builders Association of Pierce County, Tacoma, Wash.
Greater Cedar Rapids Area Home Builders Association, Hiawatha, Iowa
North State Building Industry Association, Roseville, Calif.
Master Builders Association of King and Snohomish Counties, Bellevue, Wash.
You can read about each of these HBAs and the projects carried out by their civic-minded members in Nation's Building News Online. Congratulations, winners!
[return to top]
|
|
Check out these two upcoming Webinar events:
Dec. 10: Customer Service Skills – This is an all-day course starting at 10:00 a.m. for which you can receive credits toward a professional designation. Get all the details right here.
Dec. 14: Housing That Works: State and Local Solutions to Housing Affordability – This is a 90-minute event beginning at 2:00 p.m. Get all the details here.
[return to top]
|
|
Reminder: NAHB will be closed for business Nov. 23-27...
 This closure reflects the second portion of a cost-saving effort in which NAHB is closing for business during eight days in 2009. Five of those days occurred in the final week of August; the remaining three days of closure will be those prior to the Thanksgiving holiday (November 23, 24 and 25). In addition, all staff compensation has been cut by a commensurate amount. In May, NAHB CEO Jerry Howard reported to the NAHB Board of Directors that “this shut down plan, along with other cost-cutting measures already 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. Should you have a question or concern during this time, please leave a message with the NAHB Service Center via phone or e-mail at: 800-368-5242 ext 0 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.
[return to top]
|
|
The Monday Morning Briefing will not publish on Nov. 30,
 the Monday immediately following the Thanksgiving holiday and NAHB's one week closure (see story above). Our next edition will be dated Dec. 7, so please keep an eye out for us in your e-mail. Until then, we wish all of our readers a wonderful Thanksgiving with family and friends!
[return to top]
|
|
|
