May 2015
Supported By
Orleans Parish to Enforce Dumpster Ordinance
Zachary Smith, AIA, Chief Building Official for Orleans Parish addressed the HBAGNO Board of Directors on Tuesday, April 21st. He updated the board on the status on online permit filing with One Stop, common issues with electric meters, and updated code enforcement. One major point he wanted all builders and vendors to be aware of is that the standards for construction dumpsters, which has been on the books for quite some time without much implementation, will now be enforced parish-wide. See the PDF below for details on this standard

Reinventing Downtown NOLA: A Better Version of Ourselves
Kurt Weigle, President & CEO of New Orleans Downtown Development District, spoke at the March 2015 HBAGNO General Membership Meeting. Kurt spoke about the comprehensive 5-year strategic plan to support economic development and industry in downtown New Orleans. 

After the meeting, we had many requests for Kurt's speech. The link to the PDF is below. 

2% is the new 3%
Elliot Eisenberg
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. 


 

Last year 3.2 million net new jobs were created, the best performance since 2000, and total employment is now several million higher than it was before the recession began.  In addition, the unemployment rate which is 5.7% continues to fall and should be at or near 5% by year end, a level economists consider full employment.  All of this good news, yet serious problems remain.  The labor force participation rate (LFRP) is at levels last seen in 1978, which makes the unemployment rate look better than it really is and after adjusting for inflation, wages have been declining for years.  What is going on?    


 

The LFPR peaked at 67.3% in January 2000 and had had already fallen to 66% by the start of the Great Recession in January 2008, suggesting that other forces beyond the weak economy were already at work pushing it down.  That said, by the end of the Great Recession in June 2009, the LFPR was down just half-of-one-percentage-point to 65.5%.  Normally, it then would have started rising as the improving economy pulled unemployed workers back into the labor force from the ranks of the unemployed.  Instead, the LFPR went into free fall, hitting a low of 62.8% in October 2013 where it has remained since. 


 

The decline in the LFPR from 66% to 62.8% not only represents a loss of four and a half million workers, but also has no historic precedent.  That said, much of the decline was inevitable.  About half the decline is due to demographics.  That is the number of Baby Boomers who are retiring is currently vastly outpacing the number of new entrants into the labor market.  Exacerbating this trend is that today's youngsters are better educated and thus spend longer in school than earlier generations, further delaying their entrance into the world of work.


 

Another quarter of the decline is due to the severity of the recent recession, and the remaining 25% decline is simply unexplained.  These might be people who are obtaining additional education, receiving disability insurance and may or may not work again, those who have become unemployable and those who simply gave up.  Whatever the cause, knowing how many people in this category return to work is critical to understanding what lies ahead.  


 

Some have returned, some will return and some will never return.  However, no matter what happens to those persons, close to 10,000 Baby Boomers retire every day.  As a result, the fact that the LFRP has not fallen since October 2013 suggests these discouraged workers are returning.  Were that not the case, the LFRP would have continued falling.  So flat really is the new up!


 

Looking to the future, the greater the number of these discouraged workers who return to the labor force, the slower the decline in the unemployment rate will be, the higher the LFRP will be but perhaps most importantly, the slower wage growth will be.  And that's the kicker.  By contrast, if discouraged workers stop returning to the labor force, the unemployment rate will fall faster and wages will start rising more quickly but it would also mean that millions of previously employed persons have given up on work and that is very bad. 


 

Ideally, discouraged workers will continue returning and wages will remain flat for a while longer but will eventually start rising.  Unfortunately, my guess is that relatively few discouraged workers who have not yet returned will.  As a result, expect wage growth to start rising sooner, probably by year end.
Last year, GDP growth was a mediocre 2.4%. While it was the best growth since 2010 when GDP growth was a "sparkling" 2.5%, it means yet another year, the ninth in a row, of sub 3% GDP growth. There has never been a run of such weak GDP growth since record keeping began in 1930. Yes, there were terrible periods but they were all blessedly brief, never lasting more than two or three years and they always occurred during recessions. In our case, the recession ended in June 2009. What is going on? The fact is that our weak GDP growth is not surprising at all, let me explain.

GDP growth is composed of two things, growth in the labor force and growth in labor productivity. GDP rises when more people work, and better yet, when they work more productively. Productivity growth is particularly important because it boosts living standards.

GDP growth was very good following WWII because annual labor force growth grew dramatically from 0.5% in 1950 to almost 2.5% in 1975. As a result, the prime-aged working population, those between the ages of 25 and 54, grew from 60 million to almost 80 million in 25 short years. While population growth then began to decline, it remained above 1% through 2003. As a result, the prime-aged population continued growing, hitting 122 million in 2003. As a matter of fact, the labor force grew much faster than the population during the 1970s and 1980s due to the huge influx of women into the labor force. As a result, the prime-aged working population grew by over 3% per year during the 1980s.

Since 2003, population growth has slowed further and is now barely 0.7%. Moreover, the Boomers have begun retiring in large numbers and the number of working men and women has, for a number of reasons, continued to slowly decline. As a result, the size of the prime-aged working population has essentially flat-lined since 2003. As a matter of fact, it peaked in 2007. If the size of the prime-aged working population is flat, it's hard to experience rapid GDP growth even if labor productivity growth is good.

Regrettably, labor productivity growth has not been particularly good of late. But first some history: from 1948 through 1973 labor productivity grew at an amazing average annual rate of 2.8%. Add to that rapid labor force growth, and it's no wonder GDP growth averaged 4.1% per year. Between 1974 and 1990, labor productivity grew by an anemic 1.4% percent but given good population growth, GDP growth was a solid 3.0% per year. From 1991 through 2007, productivity perked up to a very respectable 2.4%, and despite weak population growth, GDP still averaged 3% per year.

Since the start of the Great Recession, however, we have experienced anemic labor productivity growth of, again, 1.4% per year and a trivial increase in the working population. As a result, GDP growth has averaged a dismal 1.2% per year. Luckily the prime-aged working population is again starting to rise, which is good. The million dollar question is "How will labor productivity growth perform?" Will it be a replay of the boom years of 1974 through 1990, the crummy years since 2007, or more likely something in between? While nobody knows for sure, GDP growth should drift upwards as demographics become more favorable and labor productivity hopefully rises.
From last month... 
Builders Voice Concerns over Expanded Floodplain Definition
Randy Noel describes the extent of the 100- and 
500-year floodplain in Laplace, LA
(NAHB, Washington DC) - Home builders, HBA staff, and NAHB staff and leadership voiced the concerns of our industry loud and clear during the first two listening sessions on newly unveiled Federal Flood Risk Management Standard Implementation Guidelines.

The issue: President Obama's recent Floodplain Management Executive Order revisions place significant restrictions on federally approved or funded projects and greatly expand the areas to be protected as flood hazard areas.

But how that plays out is still unclear.

On March 3, Iowa home builders andHBA of Iowa staff convened in Ames to raise concerns regarding the regulatory scope of the executive order, the lack of scientific data and economic analysis supporting the new flood risk standard, and the potential for increased regulatory confusion stemming from the new floodplain definitions...

CONTINUE ARTICLE...
Associate Spotlight: Max Ward, USI Insurance Services, LLC
Max Ward
USI Insurance Services, LLC
3850 N. Causeway Blvd
Metairie, LA 70002
o: 504.355.5036
c: 504.723.6845
We are the fastest growing insurance broker and consulting firm to middle market companies in the United States. We have more than 4,200 dedicated, experienced and innovative professionals within 140 offices located throughout the United States. We offer a unique consultant base Risk Management strategy, utilizing our ONE Advantage Process. The One Advantage uses our proprietary analytical database to assist our local and national experts that meet on a weekly basis to address our clients insurable risk and provided our clients with customized coverage options to protect their assets. Our ONE Advantage Process adds value to our clients which is why we are the fasting growing Insurance Brokerage in the United States. We show our clients the What "Companies Risk", the Why "financial impact of risk" and offer the How "innovative solutions that protect our clients company best". 

I love working for USI because we deliver on our promise to Understand our clients issues, provided Service that add value and offer solutions that Innovate.

USI is the 3rd largest commercial P&C privately owned broker in the U.S. We are the #1 employee benefit broker and enrollment services provider in the U.S. We are top 10 in retirement consulting services.

USI Understand Service Innovate
Legislative Recap
The past month was a busy one for the HBA legislative/regulatory staff and board members. From attending a FEMA listening session in Biloxi and providing public comment on a floodplain management Executive Order, to the City of Gretna's vinyl siding ban, to arranging a Legislative Meet and Greet for our members and state legislators, we've been on high alert for policy pronouncements that impact home building. 


 

Executive Order 13960

On January 30, 2015, President Obama issued Executive Order 13690, "Floodplain Management," to amend Executive Order 11988, signed in 1977 in an effort to improve the Nation's resilience to current and future flood risk. Since 1977, "floodplain" has been defined as "the lowland and relatively flat areas adjoining inland and coastal waters including flood prone areas of offshore islands including flood prone areas of offshore islands, including, at a minimum, that area subject to a one percent or greater chance of flooding in any given year. " The new Executive Order now requires federal agencies to expand their flood plain oversight from the current base flood elevation (BFE) associated with the 100-year floodplain to a higher elevation and a more expansive area. There are now three approaches for establishing Federal Floodplains: utilizing the best-available, actionable hydrologic and hydraulic data and methods that integrate current and future changes in flooding based on climate science; freeboard, an additional two feet shall be added to the BFE, or three feet for critical actions defined as any activity for which even a slight chance of flooding is great; and a 500-year flood elevation.

 

The NAHB published this in-depth analysis of the Executive Order and describes all three approaches to Federal Floodplain management here: NAHB: Floodplain Executive Order

 

NAHB, HBAGNO, and other organizations remain actively engaged in the public comments FEMA hosted around the nation to give guidance on the Executive Order. Unfortunately, FEMA did not have much information to give to the public and, in turn, created great concern about the potential ill-effects of the Executive Order. Industry leaders requested an extension to the window allotted for public comment for an additional 60 days, which was granted.
We encourage our members to learn more about the Executive Order and submit public comment directly to FEMA's website, via this link. regulations.gov

Local Issues: Vinyl Siding Ban, City of Gretna
The past Legislative recap addressed the City of Gretna and the potential vinyl siding ban that was brought forth by Councilmember Marino. Unfortunately, the ordinance was passed in a 3-2 vote, whereby use of vinyl siding is banned in the Gretna Historic district on new residential construction. It remains our position that outright blanket bans on perfectly acceptable, code-compliant building materials is bad public policy, both for our industry and the home buying consumers that we service. We will continue to monitor the effects of this and other restrictive policies that impede our ability to do our work. For more on this issue, please click on the attached articles: 

Gretna bans vinyl siding on new homes in historic districts

and 

Gretna vinyl siding ban: Is the issue about preservation or property rights?

Legislative Meet and Greet
The HBA's Legislative and PAC committees will be hosting a Legislative Meet and Greet at Sake Café, 2830 Magazine St, New Orleans, LA 70115, on April 9, 2015 from 6:00pm -9:00pm. We encourage our members of the HBA to attend this event and engage your state legislators before they go head to Baton Rouge April 13th to convene the 2015 Louisiana Legislative session. For more information on the event or to purchase tickets, please email or call Rita Bautista, [email protected] or 504.837.2700.
 

Higher Wages: When & Why?
Elliot Eisenberg
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. 


 

Last year 3.2 million net new jobs were created, the best performance since 2000, and total employment is now several million higher than it was before the recession began.  In addition, the unemployment rate which is 5.7% continues to fall and should be at or near 5% by year end, a level economists consider full employment.  All of this good news, yet serious problems remain.  The labor force participation rate (LFRP) is at levels last seen in 1978, which makes the unemployment rate look better than it really is and after adjusting for inflation, wages have been declining for years.  What is going on?    


 

The LFPR peaked at 67.3% in January 2000 and had had already fallen to 66% by the start of the Great Recession in January 2008, suggesting that other forces beyond the weak economy were already at work pushing it down.  That said, by the end of the Great Recession in June 2009, the LFPR was down just half-of-one-percentage-point to 65.5%.  Normally, it then would have started rising as the improving economy pulled unemployed workers back into the labor force from the ranks of the unemployed.  Instead, the LFPR went into free fall, hitting a low of 62.8% in October 2013 where it has remained since. 


 

The decline in the LFPR from 66% to 62.8% not only represents a loss of four and a half million workers, but also has no historic precedent.  That said, much of the decline was inevitable.  About half the decline is due to demographics.  That is the number of Baby Boomers who are retiring is currently vastly outpacing the number of new entrants into the labor market.  Exacerbating this trend is that today's youngsters are better educated and thus spend longer in school than earlier generations, further delaying their entrance into the world of work.


 

Another quarter of the decline is due to the severity of the recent recession, and the remaining 25% decline is simply unexplained.  These might be people who are obtaining additional education, receiving disability insurance and may or may not work again, those who have become unemployable and those who simply gave up.  Whatever the cause, knowing how many people in this category return to work is critical to understanding what lies ahead.  


 

Some have returned, some will return and some will never return.  However, no matter what happens to those persons, close to 10,000 Baby Boomers retire every day.  As a result, the fact that the LFRP has not fallen since October 2013 suggests these discouraged workers are returning.  Were that not the case, the LFRP would have continued falling.  So flat really is the new up!


 

Looking to the future, the greater the number of these discouraged workers who return to the labor force, the slower the decline in the unemployment rate will be, the higher the LFRP will be but perhaps most importantly, the slower wage growth will be.  And that's the kicker.  By contrast, if discouraged workers stop returning to the labor force, the unemployment rate will fall faster and wages will start rising more quickly but it would also mean that millions of previously employed persons have given up on work and that is very bad. 


 

Ideally, discouraged workers will continue returning and wages will remain flat for a while longer but will eventually start rising.  Unfortunately, my guess is that relatively few discouraged workers who have not yet returned will.  As a result, expect wage growth to start rising sooner, probably by year end.
Time Time - Time to Save
Tax time is here and it is important to remember to contribute to your retirement accounts.   A key ingredient to being financially sound is to prepare for your retirement years.  They will be here faster than we anticipate.  So sacrifice today by contributing as much as you can for your future.  Remember, IRA contributions must be made by April 15th but SEP IRA contributions can be made as late as your tax filing deadline including extensions.  So if you file for an extension, you have more time to contribute to your SEP IRA.  Also, don't forget about your Health Savings Account; 2014 contributions must be made by April 15th.      


 

Jennifer Gerarve, CFP®, CRPC®, CRPS®
Wealth Solutions LLC
610 Belle Terre Blvd
LaPlace, LA 70068
985-658-7702
[email protected] 

NAHB Online Courses Logo
2015 Senior Officers of the Board

President, Roy Olsen
Vice President, Floyd Simeon
Treasurer, Mike LeCorgne
Secretary, Frank Morse
Immediate Past President, Brian Mills

2015 Board of Directors

Steve Albert
John Arms
Fernando Arriola
Lori Barker
Nick Castjohn
Ric Darling
Nicole Dupre
Charlie Fontenelle
Eddie Gandolfi
Phil Hoffman
Kevin Katner
Jo Ann Kostik
Michael Kraft
Peter Lanaux
Ben Laws
Bruce Layburn
Harold LeBlanc
Scott Morse
Helmut Mundt
Randy Noel
Lynda Nugent Smith
Rolf Parelius
Zach Tyson
Kirk Williamson
Steve Wobbema
Wes Wyman
Peter Young

Also Supported By: 

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May Calendar of Events
All Events held at HBA office unless otherwise noted 

6) Kick-A$$ Cook Off Committee Meeting @ 4pm
Deutsches-Haus, 1023 Ridgewood Street, Metairie

8) Fishing Rodeo Committee/Associates Council Meeting @ 9am


13) Education Committee Meeting @ 2:30pm

13) NOEL Board Meeting @ 3pm

13) Executive Committee Meeting @ 4pm

19) HBA Board of Directors @ 4pm 

21) Parade of Homes Committee Meeting @ 1:30pm

21) Advanced Building Practices Council Meeting, Time & Location TBD

25) Memorial Day, Office Closed

26) General Membership Meeting @ 11:30am
(New Member Orientation @ 11am)
Cheesecake Bistro by Copeland's, 2001 St. Charles Ave

30-31) Parade of Homes
+ June 6-7) Parade of Homes
Featured Events

May General Membership Meeting
Tuesday, May 26th 
Cheesecake Bistro by Copeland's, 
2001 St. Charles Ave
(Complimentary Valet Available)

Guest Speaker: 
Ben Johnson,
President & CEO, New Orleans Chamber of Commerce 

Meeting Topic: 
Prosperity NOLA - The First Economic Development Plan for New Orleans

11am - New Member Orientation 
11:30 - Networking
12-1pm - Lunch & Program

Menu
Starter Caesar Salad
Choice of:
Tomato Fresco Angel Hair
Chicken, Shrimp & Sausage Penne
American Classic Cheeseburger
Grilled Chicken Cobb Salad
Dessert:
White Chocolate Bread Pudding or
Copeland's Signature Original Cheesecake

Members: $30 in advance
$35 @ door

Guests: $35
Coming Up!
fish

June 13
Wess Wyman Memorial Fishing Rodeo
Gulf Outlet Marina, Chalmette

JOB POSTINGS

Members: List your job opening here at no charge!
QuickLinksQuick Links & Resources



* Under Compliance, click on Employers' Workers' Compensation Coverage Verification
HBA Staff Contacts

Jon Luther, Executive Vice President
Lauren Galliano, Director of Membership & Industry Relations   [email protected]g
Rita Bautista, Governmental Affairs Representative    [email protected]
Shane Gray, Accountant  [email protected]
Philip Thomas, Education Director & NOEL Program Director  [email protected]


Did We Miss Something?
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.

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