February 13, 2006
By David Pressly
NAHB President and
Jerry Howard
NAHB Executive VP and CEO
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The top 10 most critical issues for builders,
as defined by NAHB's latest Critical Issues Survey, will continue to be primary areas of attention for our association going forward.

Conducted by our State & Local Government Affairs Department through surveys of affiliated HBAs, this important study helps ensure that NAHB and its agenda are "in sync" with member priorities. As of year-end 2005, the following issues were deemed most challenging for home builders:

          1.  Developmental approval/permitting process      
          2.  Liability insurance — cost
          3.  Building material prices/supplies — lumber
          4.  Materials pricing/supply — cement  
          5.  Development costs 
          6.  Labor availability 
          7.  Cost of lots
          8.  Impact fees/development exactions
          9.  Availability of lots
        10. Availability of affordable housing 

As you can see, the development approval and permitting process was the single biggest concern to our members during the latest survey period (though there were regional differences in terms of how the issues stacked up). This top issue had been a bit further down on the list in 2003 and 2004. Meanwhile, the cost of liability insurance was rated the second biggest challenge, reflecting a very slight movement of that issue from its No. 1 status since first being included in the survey in 2002. See the latest State & Local Reporter for more, or contact Sam Leyvas, x8584. 

Understanding what issues are most important to our members, and how the relevance of each issue changes through time, is essential in order to ensure that NAHB staff resources and attention are properly allocated to provide the biggest "bang" for your membership dollar.

Expanding housing opportunities for enlisted military
and their families is a top priority for the nation's home builders and their affiliates, which is why NAHB representative and third-generation home builder Bobby Bowling testified before Congress on Feb. 8. Bobby, who presides over El Paso, Texas-based Tropicana Homes, expressed NAHB's solid support for H.R. 3186, the "Build Houses for Our Military's Enlisted Servicemembers Act." This bill, he told the House Subcommittee on Housing and Community Opportunity, would increase access to affordable housing for enlisted military, specifically through the housing tax credit program. It would do this by correcting a technical anomaly in the method by which income eligibility is calculated for enlisted personnel who seek to qualify for residency in an LIHTC apartment. This is accomplished by excluding the military member's housing allowance from their annual household income when qualifying them for a tax credit property.

As Bobby told committee members, many of NAHB's multifamily members who develop and operate affordable housing under the LIHTC program in communities with substantial military populations are often frustrated by having to turn down some members of the military — particularly junior enlisted personnel — because their income is just over the maximum permitted under the program's rules. See our press release for more, or contact Greg Brown, x8421.

NAHB's substantial presence on Capitol Hill, and considerable expertise on this issue, led to our invitation to testify before Congress about the benefits of this bill. Passage of such legislation would help our multifamily members who build LIHTC housing to expand the number of  their eligible tenants while substantially improving the lot of military personnel across the country who currently have trouble finding appropriate housing for their families. [return to top]

NAHB's legal challenge of discharge regs under the Clean Water Act
just got a green light to go forward from the D.C. Circuit Court of Appeals. NAHB first challenged the U.S. Army Corps of Engineers' rule that regards all mechanized land clearing as creating a discharge under the Clean Water Act back in 2001. At that time, the district court dismissed NAHB's case as "unripe;" but our appeal of that decision has resulted in the case finally being declared "ripe for review" and remanded to the District Court. In its opinion, the Appeals Court relied on another NAHB victory from 2005, recognizing that our members are indeed faced with a hardship when forced to make "the choice of applying for a permit for activities that industry claims are outside the scope of the Corps' or EPA's authority ... or face civil or criminal enforcement penalties for failing to do so."  You can read the latest court opinion for yourself online, or contact Felicia Watson (x8229) for more.

NAHB's pursuit of the so-called "Tulloch II" case will hopefully lead to a clearer and more fair definition of what constitutes a "discharge" requiring a permit when conducting land clearing operations, thereby easing many of our members' compliance headaches. [return to top]

Enticing home buyers with freebies
and other incentives is a trend that's gaining momentum as mortgage rates rise and builders seek to maintain good sales volumes. A recent USA Today story focused on this trend while citing a a related NAHB survey. Our survey determined that, as of December, 40% of home builders were offering some type of non-price incentive to their buyers — whether it be a flat-screen TV, a $5,000 allowance for upgrades or special landscaping additions. That 40% was up from just 28% of builders who reported offering such incentives as of the year before. Our study indicates that the average market value of the latest buyer extras amounts to approximately 2.4% of the home's price. Contact Steve Melman (x8245) or Gopal Ahluwalia (x8480) for more information.

NAHB's housing economists are constantly keeping track of ongoing trends in the housing industry in order to keep you informed and better educate the media. Ongoing surveys of our membership help us keep on top of the very latest in housing and home buying trends. [return to top]

Explore your opportunities in Puerto Vallarta and Bandaras Bay
housing markets by joining NAHB's upcoming trade mission to Mexico on April 2-4. You'll participate in private briefings with the U.S. Commercial Service as well as Mexico's Trust for Tourism Development, and meet with other local government and tourism officials. You'll also visit a variety of development projects — including single-family housing developments, resorts, a retirement community that's under construction, and lots that are available for development. To get more information or to register for this exciting trade mission, contact Marco Amaro (x8419) in NAHB's International Department. (Note: A participation fee of $350 applies, and does not include travel and hotel expenses.)

NAHB constantly strives to expand our members' awareness of, and access to, new business opportunities. Trade missions like this one, sponsored by NAHB's International Department, can help to foster good relations between U.S. builders and their colleagues around the world while giving you special access to senior trade officials on both sides of the border. [return to top]

Rental apartments are on the move,
and gaining in terms of builder confidence in their future marketability, according to NAHB's latest Multifamily Market Index (MMI), released Feb. 9. For the first time since early 2005, builder expectations rose above 60 for every class of apartment, with the greatest improvement posted by top-tier, Class A apartments. On the whole, surveyed builders indicated they expect to see rising consumer demand in the rental sector as the year progresses. At the same time, consumer demand for for-sale condominiums is not expected to remain as intense as it has been in the recent past. The MMI's index that tracks the number of apartments available for rent provided additional evidence of the improving popularity of this market segment — it fell more than 10 points this time around.

A "special questions" section of the latest MMI also asked builders to comment on the hot topic of condo conversions. Compared to the previous two years, more than twice as many respondents — 15% — reported having converted rental units to condos in 2005. And 20% reported that they currently are building rental units with a view toward eventually converting them to for-sale units in the next 3 to 5 years (that's up from 13% who said so in each of the last two years). Check out our press release and the MMI tables online, or contact Gopal Ahluwalia (x8480) or Ann Marie Moriarty (x8350) for details. [return to top]

Are you a "green builder?"
NAHB's increasingly popular National Green Building Conference is right around the corner, and if you haven't signed up to attend, now's the time. The event takes place March 11-14 in Albuquerque, NM, starting with a Certified Graduate Builder Designation course on the first day and "home & technology tours" along with the Green Building Awards Reception and Dinner on the second day. The last two days are reserved for the keynote address, education sessions and new product exhibits. Conference speakers are to include Harry Green, president of the International Code Council, along with Albuquerque Mayor Martin J. Chavez. Also, over 30 experts in new technologies, energy efficiency, sustainable products and innovative design will be giving presentations. Get more information at http://www.nahb.org/greenbuilding. To register for the conference, please e-mail registrar@nahb.com. Other inquiries may be directed to Calli Barker Schmidt, x8132. 

Green building initiatives endorsed by NAHB, including voluntary building guidelines and the National Green Building Conference, allow our members to take advantage of a valuable market niche by providing the information and education you need to succeed. Meanwhile, we're expanding the media and public's awareness of what home builders are doing to improve the communities where Americans live, work and play. [return to top]

Showcasing the best and brightest in the multifamily industry,
NAHB's 2006 Pillars of the Industry Awards are among the most prestigious honors of their kind and highly coveted among professionals far and wide. Finalists of this year's awards have just been announced and are available for viewing on NAHB's Web site. The awards span a remarkable 29 catagories, including such honors as Freddie Mac's Multifamily Development Firm of the Year and Property Management Company of the Year. This year's competition saw a huge jump in the number of entries in the "Best Affordable Rental Apartment" catagory — which no doubt reflects the growing recognition of a need for greater workforce housing, particularly in high-cost neighborhoods. "This category really shows how tremendously innovative today's multifamily developers have to be to provide high-quality apartment living at affordable prices, in an era of rapidly escalating land and construction costs," says NAHB Multifamily Leadership Board Chairman Leonard Wood. Winners will be announced at a ceremony during NAHB Multifamily's Pillars of the Industry Conference on April 4 in Scottsdale, AZ. See our press release or contact Ann Marie Moriarty (x8350) for details. [return to top]

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