By: Karen Linner, BAM Director of Codes & Research

The NAHB Construction Codes and Standards Committee meeting held on Tuesday February 7th was available for viewing as a webinar. I monitored the event and the time was well spent. The software was easy to download and worked without a hitch. But what was really impressive was the prep work that NAHB codes staff put into the interactive agenda. Every agenda item had a link that immediately brought you to the topic being discussed. Slick! If I was interested in any of the materials on click and it was downloaded and saved. At the bottom of the agenda was a list of acronyms. Brilliant! Such a simple things but it really helps non-code geeks enter and better understand the world of codes and standards. The technical competence of this webinar set the bar high… I’ve got some revamping to do to make our statewide Task Force Skype calls more user friendly.

I heard some really important issue updates that will help us in Minnesota with our code adoption process.

First and foremost I am not crazy… NAHB provide it. The assumptions used to justify the R-value increases int he 2009 and 2012 International Energy Code just don’t exist. NAHB sued the Department of Energy (DOE) to release the modeling. Their answer was “it is proprietary.” What a pathetic was to craft public policy as important as a model energy code. Thank you NAHB legal staff for exposing that process and making sure future code proposals are based on transparent assumptions. I haven’t read the multi-page NAHB legal team memo to DOE but by just skimming it I know it will help me with the “need and reasonableness” statements required by Minnesota’s code adoption process.

Second, I am not alone and I have friends in high places. Minnesota is the first state in climate zone seven to consider adopting the 2012 IECC. That means we have to get the ugly out to make sure the R-value increases don’t lead to durability issues in foundations. Been there, rotted that, not going backwards. It is good to know state staff are not alone… even us code geeks.

Third, the NAHB Research Center needs home builders in zones six and seven (Minnesota) who install rigid insulation on exterior above grade walls to participate in a moisture study. The research involves placing moisture sensors in walls to gather post-construction data. The morning after the code meeting I used the link from the NAHB Research Center and sent it to one of our associate members that distributes rigid insulation. Done and done.

Fourth, it was great to visually see the standing ovation that Ed Sutton, NAHB Construction Codes and Standards Director, received from everyone in the room when he announced his retirement effective in mid-March. I have had the privilege of working with many of Ed’s staff over the past decade I’ve been in the code trenches: John, Larry, Steve, Don, Jeff, and too many others to list. These people have some of the most difficult jobs at NAHB. The fact that he kept such competent people fighting the codes fight for so long says a lot about Ed’s legacy. Ed, you couldn’t hear my, but I was clapping in Minnesota. Happy retirement, you earned it and then some.

What would I have changed? Granted the agenda was packed. But I would have loved to hear more discussion and debate about the issues. Hopefully that happened at the subcommittee level. I will definitely listen remotely to the next CCSC webinar.

Today on the National Association of Home Builders Executive Board floor, the agenda included 90 minutes of discussion on the Futures Task Force report. Yet before they could begin, a motion with the greatest amount of sarcasm was brought forward to postpone the discussion on the report until oh let’s, see, Spring Board 2012.  Laughter ensued.  “Yeah,” someone said, “How about Spring of 2014?”  More laughter.  In a point of order the Chair ruled they could only postpone to the next Executive Committee. And the fumbling and stumbling began.

But there it was.  The old guard at its finest. Not gracious, not political and not even well informed.

There were a few voices trying to explain the work of the task force but to no avail.  Some suggested the task force report recommendations be taken as a whole but the intention was still transparent.  Anyone worth their salt knows that a package of controversial changes without the opportunity to mold and shape them is a losing proposition.

Then again, as I was told before the Task Force even began its work; any attempt to make structural changes at NAHB would be met with the fiercest of opposition.

Naïve me. I thought facts, the economy, and time would motivate members to act.

Facts like:

44% of local associations in 2010 did not send any members to represent them at NAHB on the Board of Directors. That is up from 32% from the previous year.

I don’t know about my state colleagues but if 44% of local associations decided to ignore their seats on the State Board I would be in a political panic.  I need 100% participation at the State level from the local associations to be successful.  They are the industry’s political base.  Is that not true at national as well?

I can understand a small percentage of locals not participating in NAHB.  But 44%?  Is that not a warning bell?

What number will get the national leadership’s attention?

NAHB’s membership has declined by over 36% in just four years.

And instead of dealing with the fact that the industry is shrinking, the board complains of locals withholding dues.  Hey guys, I got news for you. Withholding dues might be a problem but it isn’t the BIG UGLY problem. The BIG UGLY problem is that the organization has had its arms cut off by the housing depression and the heads can’t quite figure out it doesn’t have arms anymore.

Oddly enough the big statistic thrown around here today is that less than 1% of the members opened and acted on an email alert to move the membership to connect with Congress about the Mortgage Interest Deduction.

Leadership scolded everyone in the room. Less than 1%!  And by the way, we know which members are and are NOT responding to these alerts. Congratulations State Reps, 33% of you responded.  I couldn’t tell if there was there a thinly veiled threat that you better respond if you expect to get appointed to some committee chairmanship. If there wasn’t maybe there should have been. It makes sense to me. Even so 1% of the membership isn’t enough and what does that tell you?

And because of that lack of interest from the membership, the NAHB CEO announced that they may have to embark on a very expensive grassroots effort rather than spending money on PR and messaging since relying on the membership is not an option.

And oh, by the way, the IBS Show may be coming in at only 75% of projected revenues so be prepared everyone for more deficit spending.

And the reason the leadership of the organization doesn’t want to spend time on solidifying their infrastructure is because they are all consumed with the fight on Capitol Hill?

Sounds like a few alarm bells are going off but hey, if it ain’t broke don’t fix it.

Is the irony of this getting lost?  OK.  Let me be clear and not ironic.

Strengthen your infrastructure and you will strengthen you grassroots base.

Consolidate and you will expand.

Focus your efforts and you will thrive.

An EO colleague of mine told me at the onset of the Task Force discussion that no changes will come about in NAHB unless the Senior Officers actually put their own proposal for change on the table.

While I agreed with his premise, I also believed vetting concepts with the membership would get the dialogue rolling, especially in this economic environment. The Task Fore recommendations should not be the ending point, they should be the starting point. And debate should be vigorous and difficult.

The moral of the story is don’t waste NAHB resources on any more Task Forces.  Just keep doing the same thing over and over with the same people switching committee titles.

And good luck with that 1% who open their emails when NAHB is in a political crisis.  Without thoughtful changes NAHB will not get that 1% much higher but I will predict  the 44% non participation rate will be up over 50% by 2012.

How coincidental, it will be the same time they will just be getting around to discussing the task force report. And maybe a dues increase to boot.

Bold leadership must come from the top, and, in my opinion, current leadership does not have the stomach for it.

By Pam Perri:

The residential construction industry is over-regulated. There is no doubt about it. But this week the industry had a victory.

And we need to celebrate the small regulatory victories. Let’s be honest, in the regulatory arena, our playbook is almost always running defense. The wins are about the REALLY BAD things we’re able to PREVENT from happening. There are very few times we play offense. Think about it, we don’t want to increase regulation on ourselves.

Unfortunately for us, most of the latest regulation has come from the federal government and not necessarily the state government. The new OSHA rules came from the Federal Department of Labor and the Environmental Protection Agency gave us both the stormwater regulations and those nasty lead rules.

So the WIN this week came regarding the lead rule and the EPA.

At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review concerning the impact of federal rules on small businesses and job creation.

The REALLY BAD thing NAHB prevented was a requirement that would have forced contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing.

Wow, can we get more inefficient?

Because of the cost of this, as well as the waiting period for test results, and the limited number of accredited labs nationwide, professional remodelers were very concerned about homeowners’ willingness to undergo the process. The Federal EPA rejected the proposal as a result of NAHB’s request for review.

Hooray for NAHB!!!

Several problems with the rule still remain:

The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation.

And last year the agency removed a key consumer choice measure – the opt-out provision – which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement.

In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.

The article below in Nation’s Building News, one of NAHB’s email newsletters.

In a major step forward in making the nation’s lawmakers aware of the dire financial situation faced by most home builders, Reps. Gary Miller (R-Calif.), Brad Miller (D-N.C.) and 29 other original cosponsors on May 5 introduced NAHB-supported legislation designed to address the severe credit crunch for acquisition, development and construction (AD&C) financing.

Following the bill’s unveiling, a BuilderLink Alert was posted on www.nahb.org informing NAHB members of the latest development and explaining how to help build support for the legislation among members of Congress.

The credit crunch has taken an enormous toll on the nation’s economy, especially in the housing sector, where more than 1.4 million construction workers have been idled since 2006.

Factoring in industries that provide materials and services to home builders, the housing slump has been responsible for a total loss of more than 3 million jobs and $145 billion in wages in all housing-related industries.

H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011, represents a substantial step forward in the effort to restore the flow of credit to the housing industry.

“We commend Reps. Gary Miller and Brad Miller for championing a legislative solution aimed at ending the freeze in housing production credit that has forced countless home building firms across the nation to shutter their doors, resulting in grave repercussions for job growth and the overall economy,” said NAHB Chairman Bob Nielsen.

Over the past several months, NAHB worked closely with concerned lawmakers in creating this important bill to open up the lines of credit for new housing production to help spur job growth, support a recovery in the housing market and keep the economy moving forward.

H.R. 1755 would address specific regulatory obstacles to the credit needs of the nation’s home builders and is a significant advancement in NAHB’s overall strategy to help members find the credit they need to move forward with new or existing projects.

In a letter to fellow lawmakers seeking support for their bill, Reps. Gary Miller and Brad Miller noted that “one of the major reasons for this lack of credit is the overly restrictive actions by banking regulators which have hindered federal and state chartered banks and thrifts’ ability to make and maintain loans to qualified small home builders that have viable projects.”

To rectify this situation, the bipartisan legislation would grant authority and guidance to federal and state banking regulators to ensure that financial institutions that provide financing to America’s home builders are permitted to make loans, restore liquidity and provide stable financing to the residential housing sector.

In addressing three key regulatory areas that have unnecessarily hampered the flow of credit for new housing production, the bill would remove barriers to lending while preserving the regulators’ ability to assure the safety and soundness of the financial institutions they oversee.

Specifically, the measure would:

• Require bank regulators to follow their own guidelines and issue regulations to stop limiting banks from arbitrarily lending more than 100% of their total capital on AD&C loans.

  Based on the experience of NAHB members and bankers, it appears that the 100% AD&C capital lending “guideline” has become a hard-and-fast cap beyond which banks are not permitted to expand their AD&C lending, Nielsen said.

  H.R. 1755 would direct bank regulators to issue regulations to cease implementing the 100% capital lending threshold as a hard limit. This provision would also direct banking regulators not to impede a financial institution from deciding to lend to home builders with viable projects that are likely to be completed.

• Require appraisers, lenders and examiners to use the “as-completed” value when assessing loan collateral on projects that have reasonable prospects of reaching completion.

  The bill would also ban the use of foreclosure and other distressed sales as comparables in setting collateral values in determining loan amounts for new projects.

• Direct regulators to abstain from forcing lenders to curtail or call AD&C loans in cases where the borrower is making payments in accordance with the original loan documents.

  Builders have been coming under increased pressure from lenders — including calls for additional equity, denials on loan extensions and demands for immediate repayment — even when their loans are current.

  The bill would also permit financial institutions to work with struggling borrowers for a period of 24 months to realize the maximum current market value for such loans.

In order to advance the legislation, NAHB continues to urge lawmakers to cosponsor the House bill and is conducting outreach to members of Congress who sit on key committees. NAHB is also urging senators to introduce a companion bill in the Senate.

To view the legislation, click here, type the bill number “H.R. 1755” in the box in the center screen, check the circle that says “Bill Number” and click “Search.”

NAHB members who want to learn more about the bill and how they can help encourage Congress to act on this important legislation can click here.

For additional information on H.R. 1755, email Scott Meyer at NAHB or call him at 800-368-5242 x8144.

April 28, 2011 – According to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI), the remodeling market is heading into recovery with an increase to 46.5 in the first quarter of 2011 from 41.5 in the fourth quarter of 2010. This marks the highest level for the RMI since the fourth quarter of 2006.

The overall RMI combines ratings of current remodeling activity with indicators of future activity like calls for bids. Current market conditions of the first quarter of 2011 rose to 46.1 from 43.3 in the previous quarter. Future market indicators climbed to 46.8 from 39.7 in the previous quarter.

“Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Fort Collins, Colorado. “However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans.”

Regional break downs for current remodeling market conditions showed growth in all but one area: Northeast 46.1 (from 38.8 in the fourth quarter), South 46.1 (from 45.8), and West 46.1 (from 39.7) Only the Midwest experienced a decline to 47.1 (from 54.3).

All current remodeling market indicators increased: major additions to 50.3 (from 48.6 in the fourth quarter), minor additions to 48.0 (from 43.9), and maintenance and repair to 39.5 (from 37.0). Future market indicators also improved across the board: calls for bids rose 53.1 (from 47.2), appointments for proposals to 52.4 (from 43.1), backlog of remodeling jobs to 49.7 (from 42.6), and amount of work committed for the next three months to 32.1 (from 25.9).

In an additional special question remodelers reported the top reasons prospective customers are holding back from remodeling their homes. Ninety percent of remodeler respondents said customers think it is hard to get financing, 81% said customers have lost equity in their homes, 74% said customers are uncertain about their future economic situation, 67% said there is a reluctance to invest in a home when the homeowner is not sure the home will hold its value, 62% said negative media stories are making customers more cautious, and 54% said inaccurate appraisals are making financing more difficult.

“Home remodeling continues to slowly increase and continued growth through the year is expected,” said NAHB Chief Economist David Crowe. “The fact that some indicators are breaking 50 means remodelers are seeing improving activity in their markets. While credit scarcity and economic uncertainty continue to weigh down remodeling, signs of increasing consumer interest are promising.”

As a member you have free access to three top NAHB newsletters that provide current information and news on topics like legislation, government regulations, educational seminars and how to market and sell your company.

Nation’s Building News offers a mix of news about legislation, regulations, and educational seminars.

Monday Morning Briefing is the weekly leadership update of key issues and news affecting NAHB and its membership such as housing finance, the environment, land development, federal tax and trade policy, and legal and labor topics.

Eye on the Economy offers the latest economic and housing policy news, analysis and studies.

This up-to-date information delivered directly to your inbox is just one of the many benefits of membership in a local, state and national association.

In addition to the three newsletters highlighted above, NAHB also publishes more than 30 specialty publications for niche home builders, remodelers, developers and educational designation holders.

See a list here, and sign up!