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September Calendar of Events
All Events held at HBA office unless otherwise noted
3-6) NAHB Fall Board Meetings in Phoenix, AZ
7) Remodelers Council Meeting @ 12pm
10) Education Committee Meeting @ 2:30pm
10) NOEL Board of Directors Meeting @ 3pm
10) Executive Committee Meeting @ 4pm
15) Home & Garden Show Board Meeting @ 4pm
16) HBA Board of Directors @ 4pm
18) Remodelers & Advanced Building Practices Combined Meeting @ 12pm
18) Parade of Homes Committee Meeting @ 1:30pm
19) Associates Council & Membership Task Force Meeting, 8:30am
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Combined Councils Meeting
Remodelers &
Advanced Building Practices
Thursday, September 18
12pm @ HBA Office
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Meeting Host
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Click for Registration
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Fall Golf Tournament
Friday, October 10
9am Tee Time
Belle Terre Country Club
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 All Bubbles are Not Created Equal Elliot Eisenberg, Ph.D.,
GraphsandLaughs, LLC
In early 2000, the S&P 500 hit 1,553 and the tech-heavy NASDAQ surpassed 5,000. Two years later the S&P was at 768 and the NASDAQ was at 800! In the process, $6 trillion in household wealth was wiped out. We now call that period the dot-com bubble. About half a decade later, we experienced the housing market bubble. Interestingly, the value of residential real estate destroyed during that crisis was also about $6 trillion. Yet the dot-com bubble resulted in a mild recession while the housing bust lead to the Great Recession. What was different? It turns a major culprit was which households suffered the destruction of wealth.
To set the table, ponder this: During the housing bust, retail spending fell 8% from 2007 to 2009, one the largest drops ever. By contrast, retail spending increased by 5% between 2000 and 2002. Clearly, the losses sustained during the dot-com bust had minimal impacts on household spending decisions and thus on the overall economy. Here is why.
The decline in home prices that began in 2007 was highly concentrated among households with very limited financial resources. As a result, these now much-poorer households dramatically pulled back on spending and in the process unwittingly helped usher in the Great Recession. Remember, retail spending is about a quarter of GDP, so a decline of 8% over two years reduces GDP by 2% -- a huge amount. It is as if these poorer households were the transmission mechanism through which the Great Recession got its energy.
Exacerbating and reinforcing this downward spiral was the role of debt or leverage. Remember, by 2004 or 2005 a large percentage of first-time home buyers had low FICO scores, sketchy employment histories and limited assets. To compensate, these Alt-A and subprime buyers borrowed heavily with their now highly levered house being their major financial asset. For example, among the poorest quintile of the population, 80% of their net worth is in their house. Even among the middle quintile, home equity is still 60% of their net worth. By borrowing so much, just a small decline in house prices could put these buyers upside down and wipe them out. Which is exactly what happened and is what turned a recession into the Great Recession. Between 2007 and 2010 the bottom 20% of the population saw their net worth fall from about $30,000 to zero.
By contrast, the financial losses sustained during the dot-com bubble were essentially walled off and had relatively little effect on the overall economy. This is because stock ownership is concentrated among the wealthy. As the wealthy have less debt and more assets, they could essentially shrug off the much larger financial losses they sustained yet not have them alter their day-to-day spending decisions. Among the wealthiest 20% of the population, home equity represents just 25% of their net worth. Moreover, depression-era federal laws make it hard to borrow more than 50% of the cost of stock purchases, thereby limiting the potentially negative role of leverage.
In short, the home buyers who bought in 2004 and 2005 had limited wealth and had more of it at risk than earlier home buyers. When the music stopped they were highly levered and wholly unable to protect themselves. That quickly resulted in (among other things) reduced spending, which shrank GDP and quickly cascaded into the Great Recession.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at [email protected]. His daily 70 word economics and policy blog can be seen at www.econ70.com. |
HBAGNO Governmental Affairs Representative
Home Builders Association of Greater New Orleans seeks qualified government relations representative to start immediately. Develop and maintain lines of communication with governmental decision-makers and staff on issues impacting the home building industry. Well-versed in local, state, and federal governmental issues and able to work with membership to achieve regulatory and political goals of the Association. Contribute articles to monthly and online newsletters on government affairs and other home building issues and obtain proposed legislation and regulations for analysis and review by relevant Association committees and staff. Candidate will also coordinate industry-related educational programs and other Association duties as assigned, including Political Action Committee (PAC) affairs. Experience with residential building issues, including multi-family, preferred. If you have the background to perform these duties for a fast-paced, multi-faceted organization and can step into the limelight with us in these critical times, please forward your resume to us by e-mail to [email protected] Compensation package commensurate with experience.
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 "Auctions in August" is a silent auction Gulf Coast Bank hosts & facilitates beginning August 1st and ending Friday, August 29th. Items are available for bidding at each of their 17 branches, as well as online. The auction is open to everyone, bank employees, customers and the general public.
You can bid on the mirror, energy audit, and design consultation online by visiting the Auctions in August website and putting "New Orleans Education League of the Construction Industry" in the non-profit search box. You can bid on the gift basket by visiting the Gulf Coast branch at 5001 Veterans Memorial Blvd.
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WHAT DOES IT MEAN FOR A PRODUCT TO BE FBC RATED?
The Florida Building Code evaluates products that affect the structural integrity of buildings during hurricanes. With all of the information out there, it is hard to decipher what is what. LAS has put together a short summary to answer the question, "what does it mean for a product to be FBC rated?"
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A Word from the Jefferson Parish Department of Inspection and Codes Enforcement
Your Jefferson Parish Department of Inspection and Code Enforcement continues its progress on the My Permit Now online application and inspections technology. Currently, our customers may file a residential building permit application and a trades filing that is not associated with a building permit. Beginning August 1st, our commercial customers may submit permit applications online and we anticipate that by August 15th, ALL trades filings can be processed via the My Permit Now portal. Further, trades license renewals can be processed online beginning October 1st.
It is you, the Home Builders of Greater New Orleans, who asked Jefferson Parish to acquire this technology. Full implementation of My Permit Now will allow Jefferson Parish to better serve our customers who can now save time and money by handling their business from the convenience of their home, office or Smart Phone. A step-by-step instruction sheet is provided on the Parish website at www.jeffparish.net, Department of Inspection and Code Enforcement. We appreciate your patience as we navigate through this exciting endeavor!
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Possible Increase in OSHA Enforcement
Source: National Association of Home Builders
There are strong signs that OSHA is increasing its enforcement actions on home building sites throughout the country-in both Federal and state plan jurisdictions. One of the main reasons is that new data shows the number of fatalities in residential construction increased by 37% compared to just a 3% increase in nonresidential construction in 2012, which is the most recent data available. OSHA has also instituted a number of local enforcement emphasis programs aimed at reducing numerous construction hazards, including those in residential. There are a few simple things that builders and trade contractors should do to improve safety on the jobsite and be prepared for OSHA inspections: * Conduct an assessment to identify and correct safety hazards on the jobsite; * Conduct appropriate safety training for employees; * Update records and make sure they are readily available; * Understand the OSHA inspection process (see link below to NAHB's OSHA Inspection Toolkit). Builders and trade contractors should pay particular attention to the following hazards, which are the top 10 most frequently cited Federal OSHA construction standards in 2013 (click on the link to access the OSHA standard): 1. 1926.501 - Duty to have fall protection 2. 19260.451 - General scaffold requirements 3. 1926.1053 - Ladders 4. 1926.503 - Fall protection training requirements 5. 1910.1200 - Hazard Communication 6. 1926.102 - Eye and face protection 7. 1926.100 - Head protection 8. 1926.453 - Aerial lifts 9. 1926.651 - Specific Excavation Requirements 10. 1926.20 - General safety and health provisionsIn regards to No. 9 above, there have been some recent questions by builders about OSHA's requirements for house foundations/basement excavations. For those parts of the country where basements are common, the area between the house foundation and basement excavations becomes a trench (by OSHA's definition) when constructing formwork, foundations, or walls. In 1995, OSHA issued a memo "Suspension of 29 CFR 1926.652 to House Foundation/Basement Excavations" whereby the agency altered the trenching/exaction requirements of the regulation as they apply to house construction, which is still in effect at the present time. This memo essentially requires house foundations to be benched 2 feet horizontal for every 5 feet vertical (for a diagram of what this looks like, see page 2 of NAHB's Trenching Safety Card) and the other conditions outlined in the memo exist. More information for OSHA's trenching and excavation requirements can also be found in NAHB's Trenching and Excavation Safety Handbook.Finally, there are additional resources to assist builders: * NAHB's Construction Safety & OSHA webpage, which contains compliance assistance information and safety toolkits here: www.nahb.org/safety; * NAHB's OSHA Inspection Toolkit that provides information on dealing with OSHA's stepped-up enforcement;
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Protect Yourself from OSHA Fines
LHBA has just added a new Builder Safety Resource to their website for easy training and safety documents. This is just another membership benefit, so be sure to check our all the resources this site has to offer!
When prompted to check out, enter safelhba
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Comprehensive Zoning Ordinance and Maps Draft Released
The City Planning Commission has released the July 2014 Public Hearing Draft of the Comprehensive Zoning Ordinance and Maps. These documents are posted on the CPC's website and should be delivered to the New Orleans Public Libraries by Monday, July 28. The City Planning Commission has tentatively scheduled public hearings for Tuesday, August 26th and Tuesday, September 9th, with a possible third hearing date to be determined. In addition to speaking at the public hearing, you may submit written comments. Further information on a deadline for written comments will be announced on the CPC website and via email once the public hearing schedule is finalized. Written comments may be sent to:
Email -
[email protected]
U.S. Mail -
Executive Director Robert D. Rivers
City Planning Commission
1300 Perdido Street Suite 7W03
New Orleans, LA 70112
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Thank You to our E-News Sponsors!
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HBAGNO offers our members the opportunity to list homes for sale for FREE on the Consumers Page of the HBA website.
Click Here to list your new homes.
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 Quick Links & Resources
* Under Compliance, click on Employers' Workers' Compensation Coverage Verification |
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2014 Senior Officers of the Board
President, Brian Mills
Vice President, Roy Olsen
Treasurer, Floyd Simeon
Secretary, Mike LeCorgne
Immediate Past President, Scott Morse
2014 Board of Directors
Steve Albert
John Arms
Fernando Arriola
Stacy Blair
Nick Castjohn
Ric Darling
Charlie Fontenelle
Phil Hoffman
Jo Ann Kostik
Michael Kraft
Pierre "Peter" Lanaux
Ben Laws
Bruce Layburn
Frank Morse
Helmut Mundt
Lynda Nugent Smith
Rolf Parelius
Kimberly Rooney
Zach Tyson
Kirk Williamson
Steve Wobbema
Wes Wyman
Peter Young
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HBA Staff Contacts
Jon Luther, Executive Vice President
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Please contact Lauren at the HBA office with any pertinent industry-related issues and/or professional achievements you'd like to share with your association members.
Feature Articles in upcoming issues of sticks & bricks or HBA's printed publication, the homebuilder quarterly(HQ), are FREE opportunities for HBA members to market themselves to 1,000+ industry professionals.
Click Here for Details and Submitter Deadlines
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