Rebecca Amdur       ramdur@hbag.org

 

Representative Mark Butler (R-Carrollton) held a meeting of the House of Representatives Accessibility Study Committee on December 19, 2008 to discuss the effect a mandate on accessibility standards in new housing would have on Georgia.   The proposed standards would apply to new homes built on a slab and include a zero step entrance, wider doors on the main floor, blocking in the bathroom and placement of electrical outlets.  Bettie Sleeth, VP of Regulatory Affairs, and Deron Hicks, General Counsel, represented the Home Builders Association of Georgia at the meeting.  Representatives from the Association of County Commissioners of Georgia, Georgia Association of Realtors, Independent Living Council and other accessibility advocates were also present to offer their perspectives on such a mandate.
 
Bettie Sleeth explained HBAG's past and present involvement with accessibility programs such as the Easy Living Home program.  HBAG is one of the founding partners of the Easy Living Home program.  The Easy Living Home program is a voluntary certification program that builders pay a fee to join and has its own set of accessibility standards.  Similar to other programs such as EnergyStar® and Green Building which took years to establish but are now flourishing, Sleeth noted that the Easy Living Home program is still evolving.  In fact, the Easy Living Home program was gaining great momentum until the slow down in the building industry.  Sleeth predicts that once the economy stabilizes, the Easy Living Home program will undergo the same process that made the EnergyStar® program so popular.
 
Deron Hicks addressed the burden of adding another regulatory cost to home building.  He described the effects of regulatory fees on the building industry as a "death by a 1000 cuts".  Each regulatory fee in and of itself may appear to be inexpensive but taken as a whole, Hicks argued, the fees can have a devastating effect on the cost of a home.  "Home builders and home buyers simply can not shoulder the burden of any additional regulatory costs," Hicks said.
 
Jim Grubiak, General Counsel for the Association of County Commissioners of Georgia told the study committee that local governments would also be financially burdened by the addition of any new regulations.  Enforcement requires time and staff and adding additional responsibility would add more costs to local governments by forcing them to hire more staff.  Grubiak echoed HBAG's concern that now is not the time to add additional costs as local governments are also feeling the effects of the slowdown in housing.
 
Although some of the accessibility advocates argued that the additional cost to building an accessible home is minimal, Bettie Sleeth and Deron Hicks pointed out that the financial impact can not be accurately determined.  Georgia's topography is diverse as it encompasses coastal regions, mountainous regions and everything in between. There is no "one size fits all" option for builders.  Furthermore, CAD costs incurred by the builder to adjust home plans to accommodate the modified standards are not taken into account.  Mandating a zero-step entrance also has undetermined costs involved.  Depending on the terrain of a particular lot, the cost could increase drastically.  Grading may also become an issue due to other building codes--especially in South Georgia where a house must be raised high enough to prevent flooding.  These are all factors that must be taken into account when broadly stating that the additional cost to building a home accessible is minimal. 
 
As Deron Hicks pointed out in his opening comments, HBAG is not arguing that accessibility is not a priority.  In fact, many HBAG builder members have built homes certified by the Easy Living Home program.  Rather, HBAG believes that participation in building accessible homes should be voluntary and market-driven not mandated.  Builders are faced with numerous regulatory requirements that ultimately increase the cost of a home.  A particular regulatory cost of $500 by itself may not be expensive; however, when a builder must incur that same cost or more numerous times for each regulatory mandate to build one home it becomes undeniably costly. HBAG asks the General Assembly to consider the cumulative effect of regulatory fees when deciding on such a mandate.  It is critical to understand the broad effect of adding another cost to building a home.  Now is not the time to add new regulations which will in effect add to the price of a home. 
 
In the upcoming legislative session, accessibility legislation will be an issue.  HBAG continues to support voluntary accessibility programs and is looking forward to providing input to the General Assembly on behalf of HBAG members.  However, it is also critical for members to talk with their elected officials and let them know your feelings on mandated accessibility requirements. To find your elected official visit the Georgia General Assembly legislator finder website.
 
The Committee meeting was recorded by the Georgia Legislative Network and is available to be viewed. Please note the Georgia Legislative Network started recording about 20 minutes late due to technical difficulties.

 An all-out "Builder Blitz" is planned on Capitol Hill in early January as NAHB brings a powerful team of grassroots members to Washington to lobby their key congressional representatives right after those lawmakers have been sworn into office.

Details of a major new economic stimulus plan are expected to be worked out prior to Inauguration Day so that the new President can sign the legislation into law soon after. That means that the first days of the 111th Congress will be a critical time to meet with lawmakers on the need to incorporate key housing recovery measures into the legislation. As a result, NAHB is planning a targeted congressional fly-in on Wed., Jan. 7, to include our members who have connections to the most integral Members of Congress who are involved in the stimulus debate. Specifically, congressional visits will target the House and Senate leadership, members of the House Ways and Means Committee and Senate Finance Committee, and also members of the Senate Banking and House Financial Services Committees. Details of this very important day will be provided in the next Nation's Building News Online. In the meantime, NAHB is asking all NAHB members to help with this campaign by arranging drop-by visits at the district offices of those members of Congress who are not on the targeted list. Those visits, which are being coordinated by your state EO, should take place when lawmakers are home for the holidays, between now and Jan. 2. Two important resources that you can provide your lawmaker include our Fix Housing First one-pager and NAHB's Housing Stimulus Proposal Economic Impact Analysis. We also have talking points you can use on the AD&C lending crisis. Contact Molly Murray (x8282) for details on the planned congressional fly-in.

Spreading the word about the need for a housing stimulus and the real-life effects of the current downswing on local businesses and communities, NAHB conducted a series of media teleconferences across the country this past week. The goal of this broadscale media push was to bring the NAHB leadership and members together to convey the urgency of putting housing at the center of the economic stimulus plan that Congress is now rushing to put together so that it will be ready for enactment almost as soon as President Obama is sworn into office on Jan. 20. From the National Housing Center in Washington, DC on Dec. 17, NAHB President & CEO Jerry Howard joined with Louisiana home builder Phil Hoffman of Hoffman Custom Built Homes and Patrick Abercrombie of Lowe's Cabinet and Lighting Gallery in Tennessee. Together, they stressed that the pain of the current downturn is not just being felt by big businesses, but is also constraining economic activity on Main Street and in small town America. Echoing this message near and far, regional teleconferences were also held in Ohio, Wisconsin and Pennsylvania on Dec. 17 and in Michigan, Nevada, Massachusetts and Chicago on Dec. 18. In each of these events, home builders and their suppliers hammered home the message that their businesses are a significant source of jobs and economic activity for their communities, and that serious government action in the form of a housing stimulus is desperately needed and would likely be successful in spurring new housing demand and stabilizing local economies. More complete coverage of the teleconferences will be featured in the Dec. 22 edition of NBN Online. Contact Paul Lopez (x8409) for additional info.

 

Sharing builders' AD&C concerns with FDIC Chairman Sheila Bair, NAHB's Senior Officers and staff had a productive meeting with this key banking regulator on Dec. 17. NAHB expressed strong support for the FDIC plan to use TARP funds in a new foreclosure mitigation program. At the same time, we expressed concerns that lenders are not making sufficient efforts to work with builders on modifying terms of troubled outstanding AD&C loans as a means of avoiding foreclosures or loan calls. Chairman Bair and her staff indicated that they would reiterate existing supervisory guidance that encourages lenders to work with borrowers to avoid foreclosure. NAHB also relayed our members' concerns that institutions receiving TARP money and other federal liquidity assistance are not making loans or using the enhanced capital to support workouts on existing loans. FDIC representatives responded that they are in the process of incorporating ways to monitor institutions' use of TARP funds as part of the agency's supervisory role. Finally, and perhaps most significantly, NAHB was met with a very positive response when we relayed our members' complaints of funding cutoffs and inability to get information on loans held by institutions that the FDIC has taken over. Here, Bair and her staff expressed a strong interest in working with us to improve their receivership processes and develop information for builders affected by FDIC takeovers. In all, the meeting was a solid step in the right direction toward finding ways to resolve the ongoing credit crunch for builder acquisition, development and construction financing. Stay tuned for further updates. Contact: Dave Ledford, x8265. 

Builder confidence remains at an all-time low as measured by the latest NAHB/Wells Fargo Housing Market Index (HMI), released Dec. 15. The HMI didn't budge this month from November's all-time low reading of 9, with two out of three component indexes actually losing some further ground. The results were understandable given the increasing degree of economic turmoil, worsening jobs picture and ongoing flow of foreclosed homes onto to market, said NAHB Chief Economist David Crowe. "We have seen no improvement over the past month in terms of sales conditions for new homes," he noted. "In fact, certain factors have gotten progressively worse, not the least of which is the job market, where massive layoffs are having a devastating effect on consumer confidence." David called for "definitive government action to stop the slide in home values and turn the tide of consumer sentiment," saying that expanding the first-time buyer tax credit and providing government action to reduce mortgage rates could go a long way toward arresting this downward spiral. All three of the HMI's component indexes were at record lows for December, with the index gauging current sales conditions down one point to 8, the index gauging sales expectations for the next six months down two points to 16 and the index gauging traffic of prospective buyers holding even at 7 for the month. Read our press release and view the HMI tables online for more information. Contacts: Gopal Ahluwalia, x8480; Ashok Chaluvadi, x8482. 

 

Further evidence that the Administration and Congress must act to help pull housing and the broader economy out of a worsening tailspin came with November housing start numbers that were released by the Commerce Department on Dec. 16. The numbers showed that both starts and permits for new housing construction fell by double digits to new record lows, with total starts declining about 19% for the month to a seasonally adjusted annual rate of 625,000 units and permit issuance down 15.6% to 616,000 units. These dramatic declines show that not only are conditions not improving in the housing market but that the situation is getting worse and downward momentum seems to be building amid a deteriorating economy and mounting job losses, said NAHB Chief Economist David Crowe. All the more reason, he said, that "Government interventions in the form of a significantly enhanced home buyer tax credit and reduced mortgage rates for home purchasers are absolutely necessary." Read our press release or the government's report online. Contact Paul Lopez (x8409) for help with media inquiries. 

Three significant court victories for NAHB members were recently announced, proving that the news isn't all bad this holiday season. The cases run the gamut of issues that directly affect home builders, including land use, eminent domain and the Interstate Full Disclosure Land Sales Act.

In Tony Ashburn & Son, Inc. v. Kent County Regional Planning Comm'n, a builder scored a decisive victory in the Supreme Court of Delaware against a municipality's arbitrary decision to deny his subdivision approval. Despite the fact that the builder's subdivision application was in compliance with both the applicable zoning ordinance and subdivision regulations, the county denied his application citing general growth control concerns. NAHB submitted an amicus brief on behalf of the builder, which was drafted in-house, arguing that the municipality's denial fostered an unpredictable and ad hoc development approval process. The court agreed with NAHB, quoting from our brief, holding that the planning commission did not have "unfettered discretion" to deny a subdivision application that otherwise conformed to existing laws and regulations. Contact: Chris Whitcomb, x8329

In Transwestern Pipeline LLC v. 17.9 Acres of Property, a pipeline company attempted to condemn and take immediate posession of property - including that of several home builders - for the construction of a new natural gas pipeline which is allowed under the Natural Gas Act. The Act, however, does not allow for immediate possession - or "quick take" - powers. NAHB challenged this position in an amicus brief which argued that equitable considerations counseled against granting utility companies quick take power. The Ninth Circuit Court of Appeals sided with NAHB, holding that courts could not give the company power that it has not been granted under the federal statute. The case represents an important limitation of quick take condemnation authority, which has the potential to be abused in the context of the expansion of new utilities by private parties under the color of federal law. Contact: Chris Whitcomb, x8329

 

In Pugliese v. Pukka Development, Inc., the Eleventh Circuit Court of Appeals issued the first opinion in the country from a circuit court of appeals addressing the split of authority among the federal district and state courts on whether builders whose sales are partially exempt under the Interstate Full Disclosure Land Sales Act must comply with all disclosure provisions. The Eleventh Circuit reversed the district court and held that partially exempt entities do not need to comply with certain disclosure provisions. The contracts at issue involved lots in a subdivision containing fewer than 100 lots. An alternative holding would have required the remedy of rescission of potentially thousands of sales contracts. Notably, the Eleventh Circuit specifically referenced NAHB's brief in its opinion. Contact: David Jaffe, x8317

 

Important news for purchasers of Oriented Strand Board (OSB): Builders, remodelers, contractors and others who purchased OSB between 2002 and 2008 may be eligible to recover funds as a result of the settlement of a class action lawsuit against OSB manufacturers. The court hearing the case certified a "Settlement Class," meaning that affected members of the class can submit claims to recover some funds. The lawsuit claimed that certain OSB manufacturers unlawfully raised prices on OSB sold to end user indirect purchasers. End user indirect purchasers are those who purchased OSB for their "own use, and not for resale, from a store or reseller and not directly from the manufacturer." To qualify as a member of the Settlement Class, you must meet certain requirements identified on the claim form and in the Detailed Legal Notice, including that you purchased OSB for your own use and not for resale between June 1, 2002 and Aug. 4, 2008.

In addition to meeting the requirements on the claim form, only people or entities residing in certain states are eligible to submit a claim for a share of the Settlement Fund. These states include: DC, AZ, CA, FL, IA, KS, ME, MA, MI, MN, MS, NV, NM, NY, NC, ND, SD, TN, VT, WV and WI. A complete description of the Settlement Class is included in the Detailed Legal Notice, available at www.OSBnotice.com  or by calling toll free 1-800-401-0819. You will also find the claim form at that address. Be sure to read all the information on the site before submitting a claim. The deadline for submitting a claim, along with acceptable documentation of your OSB purchases, is Jan. 9, 2009. Claims should be sent to the following address: OSB Claims Administrator, c/o The Notice Company; PO Box 778, Hingham, MA  02043.  Contact: Blake Smith, x8583. 

 

The U.S. Census Bureau has accepted NAHB's recommendation to collect data on age-restricted housing. In a move that will provide greater insight into the housing choices of older Americans, Census will expand its Survey of Construction (SOC) to include new questions related to both single-family and multifamily housing that is restricted to people aged 55 and older. The SOC is a national sample survey tracking building permits, housing starts, housing completions and more than 40 physical and financial characteristics of new houses, and its findings are widely used by housing industry stakeholders to evaluate market conditions and opportunities. With the baby boom generation already crossing the threshold to choose housing that can be legally restricted to people their age, it is important to have a reliable source of timely and statistically valid data on how many such units are being built in this country, said NAHB in a statement applauding the Bureau's latest decision. The move is especially welcomed by NAHB's 50+ Housing Council because it will help provide a valuable "big picture" look at this important market segment. Contact: Ann Marie Moriarty, x8350. 

 

President-Elect Obama's choice for HUD Secretary is New York City Housing Commissioner Shaun Donovan, a career professional who previously served at HUD during the Clinton Administration and has extensive experience with regard to the financing, production and preservation of multifamily housing. Following Donovan's nomination on Dec. 13, NAHB said in our industry newspaper that we are pleased that the nominee will bring strong housing experience to the job and that we look forward to working with him on a broad range of issues. Prior to his appointment by New York Mayor Michael Bloomberg to the post of commissioner of the city's Housing Preservation and Development Department, Donovan was a managing director at Prudential Mortgage Capital Co., where he oversaw FHA multifamily lending and affordable housing initiatives. In the Clinton Administration, Donovan worked at the FHA and became its deputy assistant secretary for multifamily housing. He also briefly served as acting FHA commissioner in the Administration's final days. Read more in NBN Online. 

NAHB bids farewell to Jack Hoffman, a founder and first president of the HBA of Greater Chicago (HBAGC) who passed away on Dec. 16. Jack was a true pioneer, building Chicago's first high-rise condominium, establishing his company as one of the city's first production builders to build year-round, initiating the use of pre-engineered trusses and panels before most others, and being one of the first area builders to design entire planned communities. He was also a prime proponent of FHA and VA mortgages, and in 1976, after renaming the company he founded with his father (previously F&S Construction Co.) to Hoffman Homes Corp., he formed his own mortgage company and began offering both Chicago's and the United States' first graduated mortgage plan for buyers. In all, Jack built some 30,000 single-family homes, townhomes and condos over his lifetime. One of his biggest accomplishments was organizing the scattered home building industry of the Chicago metropolitan area to form the HBAGC. He was also actively involved in NAHB, and served as chairman of the Mortgage Finance Committee. Our hearts go out to Jack's wife, Selma, and the rest of his family for their sad loss this holiday season.