March 19, 2007
By Brian Catalde
NAHB President and
Jerry Howard
NAHB Executive VP and CEO
 
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Testifying before Congress on GSE oversight reform,
NAHB Executive Vice President & CEO Jerry Howard recommended several ways to enhance newly introduced legislation aimed at ensuring the continued vitality of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

H.R. 1427, the Federal Housing Finance Reform Act of 2007, appears to be a continuation of the ongoing bipartisan movement towards comprehensive regulatory reform for the housing-related Government Sponsored Enterprises (GSEs) – something NAHB is pleased to see, said Jerry. However, NAHB would like to see revisions to the bill's language to ensure that the new law could not be broadly interpreted by a new regulator as requiring massive portfolio cuts that could severely disrupt the mortgage markets. And, while NAHB supports the proposals outlined in H.R. 1427 that would toughen the affordable housing requirements for Fannie Mae and Freddie Mac, including the establishment of an Affordable Housing Fund, home builders are concerned that the product approval provisions in the bill could open the door to unneeded interference in the development of new products and activities that are within the GSEs' charters. Also, NAHB supports the high-cost area provisions in the bill that would allow the conforming loan limit in the most expensive housing markets to be equal to the median home price, up to 150% of the national loan limit.

Speaking on behalf of the nation's home builders and their affiliated housing professionals, Jerry said, "We believe that Congress can establish a strong, effective and credible regulatory structure for the GSEs without undercutting their housing mission if several core principles are followed. One, balance housing with safety and soundness concerns; two, employ capital as a precise instrument of risk management; three, preserve GSE portfolios as tools for achieving liquidity and the affordable housing mission; four, maintain the GSEs' flexibility to respond promptly, within their charters, to market needs; five, raise the conforming loan limit in high cost areas; and six, focus and enhance GSE benefits to expand affordable housing opportunities." Read more in our press release, or contact Scott Meyer, x8144.

NAHB Member Benefit: The housing GSEs (Fannie Mae, Freddie Mac and the Federal Home Loan Banks) play a crucial role in providing accessible and affordable credit that is the lifeblood of the housing industry. NAHB's continued member-driven involvement in the debate regarding oversight of the GSEs is aimed at safeguarding the nation's sophisticated housing finance system and ensuring that proposed reforms do not impede the GSEs' ability to efficiently operate and create new mortgage products.

Help NAHB oppose fire sprinkler mandates!
As most of our readers are well aware, the strongest attempt ever made to mandate fire sprinklers as part of the IRC for all new one- and two-family dwellings is now well underway. 

Thanks to strong member support, NAHB was successful in defeating proposed fire sprinkler mandates at last fall's IRC Code Development Hearings. Now, fire sprinkler advocates are conducting a newly aggressive campaign to reverse that outcome at the ICC Final Action Hearings in Rochester this May. 

Let's make one thing perfectly clear: Home builders are dedicated to the safety of those who live in the communities we build. New homes are in fact safer than ever thanks to new building technologies and especially the widespread use of smoke alarms. And, while families should have the OPTION of having fire sprinklers installed in their new homes if that is what they desire, the fact remains that those sprinklers are expensive to install and can be difficult to maintain. Also, fire sprinkler mandates have never been proven to do a better job of saving lives than smoke alarms and education programs. If fire sprinklers are mandated, consumers will be forced to pay installation and maintenance costs for a product that will most likely never be used and associated costs that greatly outweigh the potential reduction in property loss. Keeping in mind that every $1,000 added to the cost of a home prices thousands of buyers out of the market – and that a credible NAHB consumer survey finds that most buyers do NOT want to pay for fire sprinklers – it's obvious that mandates are not the way to go.

That's why we must continue to fight this issue with as much strength as we can muster. How do we do that? We need to make sure there are enough ICC voting officials in attendance at the Final Action hearings in May who will vote against the mandates. With this in mind, NAHB kicked off a major grassroots campaign at the IBS that's aimed at getting as many HBAs and members to contact their local building officials as possible. Your mission is to communicate builders' concerns and encourage those who agree with us to make the trip to Rochester and VOTE. Please, find out how you can help NAHB in this endeavor – take a look at our resources at www.nahb.org/sprinklers or contact Brian Sause (x8444). [return to top]
Giving the green light to de-listing the pygmy owl
as an endangered species, the U.S. District Court for the District of Arizona has handed down a decision that marks an important victory for the nation's home builders and affordable housing. On March 9, the court upheld the U.S. Fish and Wildlife Service's decision to remove the Arizona owl population from the endangered list, agreeing that the birds living in that state are not a separate species from a larger population in Mexico and rejecting a petition from the Defenders of Wildlife to keep them on the protected list. Through this ruling, the court essentially agreed with NAHB that building new homes will not hurt the pygmy owl population. While everyone agrees that endangered species should be protected, the effort to set aside an unprecedented amount of habitat for a few members of a species that thrives in an area just south of the border in Mexico was a costly mistake from the outset. Indeed, the latest decision follows a landmark ruling from the 9th U.S. Circuit Court of Appeals – the most environmentally conscious court in the nation – which determined in 2003 that the initial decision to list the Arizona population of pygmy owls as an endangered species was "arbitrary and capricious."  Contact: Duane Desiderio (x8146).

NAHB Member Benefit: Through years of legal wrangling, NAHB has achieved yet another decision that favors housing affordability and rejects interference from interest groups that would make wide swaths of land unavailable for development, cost millions of dollars and offer no environmental benefit. This court case is an outstanding example of the work NAHB does on a daily basis to protect the interests of our members and potential home buyers in court, in the halls of Congress and in the regulatory arenas of America. While litigating cases like this one costs thousands of dollars, allowing such unjustified designations to stand would be far more costly, causing home prices and taxes to rise and jobs statewide to disappear. [return to top]
The life expectancy of home components
is the subject of a newly released study that was conducted by NAHB and sponsored by Bank of America Home Equity. Published on March 12, the report is called "Study of the Life Expectancies of Home Components" and was created by polling experts in a wide range of fields to determine how many years of service a home owner can reasonably expect from various items within a home. Of course, in perusing the results of this study, the reader must bear in mind that numerous factors – including use, maintenance, climate, advances in technology and simple consumer preferences – can have a dramatic effect on the longevity of a product.

The study concludes that many home components should be expected to last for the life of the house. Among those items are toilets, wood floors, all types of insulation, and fiberglass, steel and wood exterior doors. On the other hand, some components have a significantly shorter expected lifespan. For example, wood decks should last about 20 years, depending on the climate, while kitchen faucets are thought to last about 15 years before a home owner might look to replace them. Linoleum floors have a life expectancy of about 25 years, and furnaces can be expected to last an average of 15-20 years. Read more in NBN Online or see the complete study on our Web site. Contact: Steve Melman, x8245.

NAHB Member Benefit: NAHB regularly conducts extensive market research to unearth data on emerging market trends and other important information in order to keep our members up to date and fully informed, and also to draw positive media attention to the housing market. In this case, NAHB partnered with Bank of America Home Equity to produce a widely anticipated study that product manufacturers, home buyers/owners and the housing press will be able to reference on a regular basis. Being the source of this information helps reinforce NAHB's position as the nation's authority on housing and housing issues, thereby expanding our recognition and influence within the nation's capital and beyond. [return to top]
Use these links to monitor economic and housing trends
as they develop by accessing the latest government and NAHB data:

NAHB Member Benefit: NAHB strives to keep you apprised of the latest data on housing market conditions as reported by the federal government, NAHB and other entities. We also provide expert analysis of the data that is reported, and conduct extensive media outreach when figures are released, to ensure that the builder's perspective is heard and lessen the likelihood of erroneous interpretation by reporters. [return to top]

NAHB's Multifamily Rental Market Index,
released on March 8, shows evidence that the market is beginning to rebound following the condo construction and conversion craze of recent years. The return of developers to the market-rate apartment sector (the low-rent government subsidized apartment market never did falter) is being fueled by increased household demand for rental units and depleted supplies tied to the condo conversion trend. Now, says NAHB Chief Economist David Seiders, "We are foreasting that the rental and for-sale sectors of the multifamily market will rebalance during the next two years, with about one-third of multifamily starts representing condos and nearly two-thirds representing rentals by the end of 2007." The Multifamily Rental Market Index (MRMI), a quarterly measure of builder perceptions regarding market conditions, shows that builder expectations for market-rate rental starts were nearly 18 points higher in the final quarter of 2006 than they were in the year-earlier period. Builders also expect a slightly higher level of low-rent starts, perhaps reflecting the improved congressional climate for funding of affordable housing programs. Read more in NAHB's press release, or view the MRMI tables online. Contact: Ann Marie Moriarty, x8350. [return to top]
Say hello to the NAHB Remodelers,
which is the new name of the NAHB Remodelors Council. The name change took effect at the NAHB Board of Directors Meeting during the International Builders' Show in Orlando this February. It's designed to broaden industry and consumer recognition of the services of our remodeler members, and will hopefully help in our ongoing recruitment efforts. The name change does not automatically affect state and local Remodelors™ councils across the country. Those councils have the option on an individual basis to keep their current name or more closely align that name with the new NAHB Remodelers name. Contact: Jim Lapides, x8451.

NAHB Member Benefit: No one adocates more effectively, offers the top-notch educational opportunities or provides any other service to the remodeling industry better than NAHB. [return to top]

Farewell to 1973 NAHB President George Clarke Martin,
who we were saddened to hear passed away at the age of 85 on March 12.  George was also a past president of his local builders associations, the HBA of Louisville and the HBA of Lexington, and was a past president of his state builders association, the HBA of Kentucky. He was also inducted into the National Housing Hall of Fame in 1980. A memorial service was to be held on March 17; his family also plans to host a celebration of his life, to be held later this year. In lieu of flowers, the family requests that donations be made to the Barbaro Fund or the Weimaraner Rescue League. George is survived by his wife, Georgann, and three daughters. Contact Connie Douglas, x8408, if you would like the address to which notes of condolence may be sent. [return to top]

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