| February 8, 2010 |
Bob Jones
NAHB Chairman and
Jerry Howard
NAHB Chief Executive Officer |
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Attending the President's State of the Union Address
last week was a true honor for newly installed NAHB Chairman Bob Jones and his wife, Carole, and their presence in the historic chamber was an important reminder that housing must remain a top national priority.
 While President Obama focused on the need to create jobs and get the economy back on track, he also explicitly and implicitly emphasized the importance of housing to the economy. In highlighting the steps taken to put more Americans back to work and boost the economy, he mentioned the home buyer tax credit and noted that the stimulus plan passed last year helped to create 200,000 jobs in construction and clean energy. The President also talked about enacting serious financial reform that “makes it possible for businesses to access credit and create new jobs.” Rest assured, NAHB will be calling on the White House and Congress to make sure that home builder financing is a part of this mix. Among the President’s proposals to help small businesses is a tax credit for firms that hire new workers and elimination of all capital gains taxes on small business investment. Obama also renewed his push for tax incentives for those who retrofit their homes by calling for “rebates to Americans who make their homes more energy-efficient.” This would also provide a boost for remodeling jobs. To help stabilize home values and rein in foreclosures, Obama also said his Administration this year “will step up refinancing so that home owners can move into more affordable mortgages.”
As the Administration moves this year to make job creation and economic growth its top priorities, NAHB will continue to work with the White House and Congress to make sure that housing plays an important role. Read the full text of the State of the Union address here.
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States hoping to boost jobs and residential energy efficiency
can look to an innovative program called "Project ReEnergize" in Minnesota, which was the subject of a special press conference at the recent International Builders' Show and is a prime example of how efforts to retrofit existing housing stock can help local economies.
 Representatives of the Builders Association of Minnesota explained that the program got its start when some state agencies were unable to disburse Obama Administration stimulus funds for weatherizing homes quickly enough. At that time, the state reached out to the Builders' Association, which in short order was able to train and certify contractors and insulation installers to make improvements to 1,400 homes. Consumers were eligible for rebates when they hired certified contractors to replace windows, but they received even more money if they also elected to upgrade their home's insulation. Such an incentive was very important because it can be difficult to convince home owners to make improvements that they can't actually see, explained remodeler Shawn Nelson, who participated in Project ReEnergize. Meanwhile, Andersen Windows representative Maureen McDonough said that her company was able to call back 600 of its laid-off employees as a result of the new federal energy-efficiency tax credit and windows orders stemming from Project ReEnergize contractors. Read more about this unique and highly successful program in the latest edition of Nation's Building News. Contact MondayMorningQuestions@nahb.org for answers to your related questions.
WHAT THIS MEANS TO YOU: Project Re-Energize is a perfect example of how state and local HBAs can get their members involved in programs stemming from the Obama Administration's "Recovery Through Retrofit" initiative (a.k.a., "cash for caulkers") aimed at increasing energy efficiency and creating green jobs nationwide. NAHB is working with the Administration on ways to further this initiative through programs like Minnesota's, and at the recent International Builders' Show, we held several educational seminars aimed at helping our members take advantage of arising opportunities connected to these efforts. We'll keep you informed as things develop further on this front.
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Important IRS updates on claiming the home buyer tax credit
 have recently been announced, and you may want to alert your potential customers. The agency has published an updated version of Form 5405 as well as instructions for home buyers using it to claim the $8,000 first-time buyer credit as well as repeat buyers seeking to claim the $6,500 credit. Updates to the form include the extended purchase date window (tax credit-qualified homes must be under contract prior to May 1 and close before July 1). And yes, even though the revised Form 5405 still references the "First-Time Homebuyer Tax Credit," it is also intended to be used by repeat home buyers, who must have lived in a single principal residence for five of the last eight years prior to purchasing their new home for which they plan to claim the tax credit.
Beyond these updates, the IRS is also requiring additional documentation for home buyers who claim the credit for purchases after Nov. 6, 2009. Buyers must now provide a copy of the HUD-1 form or, in cases where that form is not used, a certificate of occupancy for a newly constructed home. For purchases taking place after April 30, a copy of the signed sales contract must also be supplied. Meanwhile, in order to claim the $6,500 repeat buyer tax credit, home buyers must attach one of the following for five consecutive years of the last eight to demonstrate that they meet the repeat buyer qualifications: a Form 1098 reporting mortgage interest; a property tax statement; or home insurance records.
Tax credit buyers should also know that, due to the new documentation requirements, those claiming either the $8,000 first-time home buyer credit or the $6,500 repeat-buyer credit cannot e-file. As a result, taxpayers should be prepared to wait at least 12 to 16 weeks to receive their refunds. On a final note, NAHB has recommended options to Treasury and IRS officials for homebuyers who do not use a HUD-1 form and whose local jurisdiction does not issue a certificate of occupancy. We are awaiting their response at this time. Get more information on NAHB's consumer tax credit Web site at: www.federalhousingtaxcredit.com.
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Professional remodelers should apply now for lead certification,
 as should other contractors who work in homes that were built before 1978. Time is running short to get the application for firm certification filled out and approved ahead of the effective date for EPA's Lead Paint Renovation, Repair and Painting Rule on April 22. The agency has up to 90 days to approve a company certification, and applying today makes it less likely that the form will be delayed by the bottleneck that is expected as many professionals scramble to meet the deadline. In fact, remodeling firms that have already submitted their applications are reporting that EPA is taking as long as two months to approve them. And because of this backlog, "Remodeling firms should start applying for firm certification ASAP, even if no one in the firm has completed the required training yet," says NAHB environmental policy analyst Matt Watkins. Meanwhile, NAHB continues to meet with EPA officials to resolve ongoing concerns about the new rule, including the potential for some contracted remodeling jobs to become do-it-yourself projects where home owners do not take the necessary precautions to avoid lead paint exposure in children. Other major concerns include the fact that, despite the looming deadline, the EPA has not started any outreach, promotion or advertising to let the public know about the new rule. The agency has, however, indicated that it will release a preliminary marketing campaign at the end of February. Read more here, or send questions to MondayMorningQuestions@nahb.org.
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Get the latest available state and local housing data
 with just a click of your mouse on NAHB's Web site. This link will take you directly to the page on NAHB.org on which we have compiled some of the most popular regional and local tables, including permit data, employment information, and housing affordability data. Newly updated tables are now available for state and metro area building permits as well as for state and metro area employment figures, so check out this new information when you can. Please note that this data is available via NAHB's Web site exclusively for our members, so you must be logged in to NAHB.org with your username and password to access it. You should also know that another great source of information on housing stats is available at the NAHB-developed Web site www.housingeconomics.com. Contact MondayMorningQuestions@nahb.org.
WHAT THIS MEANS TO YOU: NAHB gives you access to the updated industry stats and forecasts that can help you better understand your market and plan appropriately for the future.
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Residential remodeling is poised for a recovery
 starting after this year's first quarter, according to economists speaking at last month's International Builders' Show in Las Vegas. While remodelers will still encounter some reluctance from their prospective customers who have been rattled by financial losses in the stock market and home equity, the experts said, the industry will derive some strength from the slowly improving housing market –though the weak job market continues to be a challenge. Noting that many home builders have sought refuge from the steep downturn in the new-homes market by diversifying their operations into remodeling, the economists observed that this particular segment of the construction industry has held up better than others. And even though remodeling suffered its own hit in the latest recession, it has moved ahead of the new-home market in dollar volume, a trend that could continue for some time yet. Renowned expert Kermit Baker of Harvard University's Joint Center for Housing Studies said that spending on remodeling fell to an estimated $246 billion last year, down about 35% from its cyclical high of $326 billion – but still ahead of what was spent on new-home purchases in that period.
Harvard's quarterly Leading Indicator of Remodeling Activity, released on Jan. 21, provided an encouraging signal that home owners are in fact starting to plan more improvement projects as they look forward to a national economic recovery. In nominal dollars, the yearly rate of home owner improvements is projected by the indicator to total just under $104 billion during the current quarter, which is 12% lower than the same quarter last year. The indicator shows improvements rising to $110.9 billion by the third quarter, only 3.1% below the year-ago rate. Read more in Nation's Building News, or send questions to MondayMorningQuestions@nahb.org.
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The 2010 BuilderBooks Catalog has gone virtual...
 In an effort to put the resources you need right at your fingertips while continuing our association-wide focus on "green" business practices, the 2010 BuilderBooks Catalog is now available right on your desktop. In case you didn't know, BuilderBooks provides publications and products that are written or produced by leaders across our industry, specifically with you and your business in mind. Some of the newest and most popular offerings in this year's catalog include Social Media for Home Builders and National Green Building Standard Commentary. Contact: Patricia Potts, 800-368-5242, x8224.
WHAT THIS MEANS TO YOU: Use the products and publications listed in the catalog to streamline your daily operations, better serve your new and existing customers, develop strategies to safeguard your jobsite, and ultimately build and sell more homes. View the vitual catalog right here.
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Prospective speakers for the 2011 IBS have until Feb. 19
 to submit an online proposal for consideration, so don't delay. Take advantage of the opportunity to present at the building industry's premier event, which takes place next Jan. 12-15 in Orlando, Fla. You can download the 2011 IBS Education Session Proposal Guidelines here, and a list of the 2010 IBS educational seminars is available at www.BuildersShow.com/Education. Please note that only online applications are being accepted at this time. If you have any questions or would like to recommend a topic or speaker, please contact NAHB at ibsedu@nahb.org.
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