January 29, 2012

"At the Goal Line"

Super Bowl Sunday is a week away and with it comes the thoughts that after a long season a team will achieve its quest and the other will have to "wait until next year" for another opportunity. But in order to get this far takes complete team work with an aligned desire that is fueled by passion. 
Teamwork, players working together. 

NAHB is similar in that when there is a desired outcome to a direction, members and staff will work together. There has been considerable, and very passionate, conversations regarding a proposed bylaw amendment, from NAHB's National Area\Associate Chairmen (NACs), that creates an associate senior officer NON-voting, NON-ladder position. Conversations have taken place on social media sites, within NAHB's area caucuses that bring members from different regions to discuss NAHB initiatives before voting at the national board meeting, during state and local HBAs board meetings and other platforms where members discuss association business.
We need to thank all the NAHB members, builders and associates and staff, local and state, who have helped to bring about the groundwork for a desired outcome. Thirty-six HBAs from individual states, as well as Puerto Rico, are supporting the NACs' proposed by law amendment; this is truly an amazing number. When you look at the membership total that each HBA's board is representing, you will see that 113,444, or 78% of the Federation, members would like to see this proposed bylaw amendment passed at the 2012 International Builders Show. 

  1. HBA of Alabama representing 8,069 members
  2. HBA of Delaware representing 360 members
  3. Florida HBA representing 6,633 members
  4. Louisiana HBA representing 4,922 members
  5. HBRA of New Hampshire representing 614 members
  6. New Jersey Builders Association representing 900 members
  7. New Mexico HBA representing 1, 936 members
  8. Michigan AHB representing 4,600 members
  9. Pennsylvania Builders Association representing 6,647 members
  10. HBA of Virginia representing 3,648 members
  11. Wisconsin BA representing 5,274 members
  12. HBA of West Virginia representing 762 members
  13.  The HBA of Connecticut representing 913 members
  14.  HBA of Illinois representing 1,630 members
  15.  Arkansas HBA representing 1.354 members
  16.  New York State BA representing 2,285 members
  17. BA of Minnesota representing 2,886 members
  18.  Oklahoma State Home Builders Association  representing 2,316 members
  19.  Idaho Building Contractors Association representing 946 members
  20.  Colorado Association of Home Builders representing 1,693 members
  21. HBA of Georgia representing 3,596 members
  22. Indiana Builders Association representing 3,104members
  23. Puerto Rico representing 70 members
  24. Montana Building Industry Association representing 1,450 members
  25. Home Builders Association of Kentucky representing 6,191 members
  26. Texas Association of Builders representing 9,107 members
  27.  Oregon Home Builders Association representing 3,264 members
  28. Home Builders Association of Alaska representing 709 members
  29. Home Builders Association of South Carolina representing 3,381members
  30. North Carolina Home Builders Association representing 12, 394 members
  31. Massachusetts Home Builders Association representing 1,242 members
  32. Utah Home Builders Association representing 1,505 members
  33. Nebraska State Home Builders Association 1,128 representing members
  34. South Dakota HBA representing 1,656 members
  35. Tennessee HBA representing  3,082 members
  36.  HBA of Mississippi representing  2,203 members
  37. Southern Nevada Home Builders Association representing 974 members
I would very much like to personally thank each and every one of you for your dedication and hard work; your desire for success will carry the day. 

Submitted by:
Michael Kurpiel, CGA, CGP
2011 NAHB Associate Members Committee Chairman
2009-2010 NAHB National Associate Chairman

January 22, 2012

"I Have a Question...."

"Being ignorant is not so much a shame, as being unwilling to learn." ~ Benjamin Franklin

Another saying goes, and I paraphrase, "If ignorance is bliss that explains a lot of happy people."

Now you're thinking, "uh oh," and before you think that I'm going off on an irrational rant read below a definition of ignorance from Merriam-Webster's Online Dictionary:
ig·no·rance [ig-ner-uhns] 
lack ofknowledge, learning, information, etc.

Ignorance, at its highest level, is rejecting or condemning something you know little or nothing about. Why is this my discussion topic in this week's blog? I am a member of multiple groups on such social media vehicles as LinkedIn and Facebook. I deeply enjoy the discussions but some are based on pure ignorance of a subject matter, specifically, The National Association of Home Builders (NAHB). While I'm not an expert on NAHB, I have been involved with leadership decisions that help form strategy and then direction, for our members, on behalf of the industry. True, I have the one opinion, the one voice, in each decision, among the many. The fact that I am at the table and understanding our issues is what's at play.
I read posts about NAHB that demonstrate what national is working on, towards helping our industry recover from the worst housing depression in our lifetime. I then read posts from people who are not members or were members and speak, out of ignorance, about the lack of effort given by NAHB. One person, a non member, stated "what NAHB needs to realize is that they just don't represent their members they represent the entire industry." Policies they promote effect everyone, not just members." Now I have heard this about my home state HBA as well and I'm quite sure other state HBAs have had their share of naysayers. 

It is so easy to criticize from the comfort of a computer, being a Monday Morning Quarterback, questioning every decision without being in the game. Quite frankly, I will listen to someone's opinion, share my thoughts, and hopefully we can at least agree to disagree. When it comes to the home building industry, with the business pain we have all experienced, it's easy to let emotion jump over intelligence (I'm as guilty as anyone), in the pecking order of reasonable conversation. But when someone is not involved, at their local or state let alone NAHB, and they opine about the lack of new construction and place the blame on NAHB, I become amazed. How do you have a reasonable conversation when one side of the argument has little to zero knowledge of the subject? Keep in my the subject I am referring to is NOT the industry but NAHB.

Before we go any further, let me state, for the record, when you try and enlighten those in the dark about NAHB, most NAHB critics will dig their heels in deeper and ignore what others, who are engaged members and in the know, are trying to teach. 

They have little knowledge of our national committees where members from across the country offer opinions that will hopefully develop strategy(ies). They have little knowledge of BUILD-PAC and the power of one voice in Washington. They have zero knowledge that these members are their building industry peers with one exception; the members invest time and dollars in NAHB, the non members are what we refer to here in New Jersey as "free riders."

I may not always agree with NAHB, and those that know me will say that I will speak my piece. However, once a direction is taken, and a majority vote takes place, I know the worst thing to do is to "go public" and show any divide in our initiative. Remember, politics drives our industry, and our legislators, who are being bombarded by all industries, will only become confused if there are multiple solutions form multiple builders. 

I recommend, that before you speak out and demonstrate your ignorance, with regards to NAHB, that you become a member, then become involved within leadership. If you are unhappy with decisions, make your voice heard, not in social media groups, but where the decisions are actually taking place.

Association Maximization has many posts dedicated to understanding the value of being a member, the path to leadership, as well as the need for advocacy. Please read them at your leisure. Hopefully you will become involved. Once you understand the mechanics of corralling an entire industry, with hundreds of thousands of voices, and funneling it through to one voice, you will no longer be ignorant of NAHB. You still may disagree but you'll disagree with knowledge.

Submitted by:
Michael Kurpiel, CGA, CGP
2009-2010 National Associate Chairman
2011 NAHB Associate Members Committee Chairman 

January 15, 2012

"How to Tell Story of Homeownership"

This year, Association Maximization, along with posts to help the NAHB member understand their return on an HBA investment and posts to help educate and add to professional development, will feature guest bloggers from different areas of NAHB, staff and members. 
Enjoy and please share with your members across the Federation.

Message Research Shows How to Tell Story of Homeownership
by  Robert Pflieger, NAHB Senior Vice President for Communications

Robert Pflieger

Homeownership is under attack. Some policy makers in our nation’s capital are even questioning its value. At a time when lawmakers are debating the merits of key housing policies, it is more important than ever to remind the American people of the value of homeownership.

The housing industry must tell a compelling story to remind the American public that homeownership is a key source of pride, peace of mind, accomplishment and security – and to inspire them to take action to protect it.

NAHB has invested significant time and resources to conduct research on the level of knowledge and attitudes of the American public on homeownership. The research showed that Americans see homeownership as a core value. But the research also showed that few Americans are aware of proposals that would make it harder for middle class families to own their own home. It also found that while Americans love homeownership, they are predisposed to change – just a one-third minority solidly supports policies that continue to encourage homeownership.

Using that research, NAHB has begun a broad-based messaging initiative. It is based on a cohesive narrative that engages people’s emotional connection to homeownership, explains the importance of residential construction as an engine of job growth and spurs positive action on behalf of housing.

The vast majority of Americans still desires to own their own home. And homeownership is critical to new jobs and economic growth. It is important that men and women who work in the residential construction industry stand up and explain the importance of homeownership.

NAHB has created an online messaging toolkit to help members tell a compelling story about the value of homeownership. It contains talking points, speeches, op-eds, print ads, letters to the editor and other resources to use with various audiences such as lawmakers, home buyers and the media.

Access the toolkit (limited to NAHB members) at www.nahb.org/messaging.

NAHB is asking all members to be ambassadors for homeownership. Please contact communications@nahb.org if you have any questions about the messaging initiative or toolkit resources. 

January 8, 2012

2012: NAHB Priorities

When we arrive at December 31st, 2012 the many individuals and companies that are a part of the building industry will look back and say "this was the year we began our recovery from the Great Housing Depression." This year, when you ask what your NAHB membership does for you I would like you to give some thought on how you can help maximize your membership by being involved and helping NAHB help you.

As we move into this new year of hope and optimism let's fully understand what the National Association of Home Builders (NAHB) is currently focused. Below is the 2012 NAHB Priorities, on behalf of its membership, reprinted from nahb.org. Please share them with all of your members as a retention tool but also as talking points in HBA membership recruitment

1. End the Housing Production Credit Crisis

It is absolutely vital to get credit flowing to the housing sector again. In the current regulatory climate, lenders have basically stopped making acquisition, development and construction (AD&C) loans that are necessary to allow builders to construct new homes. Credit is the lifeblood of housing. Home builders cannot keep their doors open and create jobs in their communities if they cannot get credit to build even pre-sold homes. And when lenders call in performing loans, everyone suffers. Workers get laid off, sound projects go uncompleted and banks take possession of unfinished property.

Federal bank regulators maintain that they are not encouraging institutions to stop making loans or to indiscriminately liquidate outstanding loans. However, NAHB members who are dealing with banks all across the country suggest that bank examiners in the field are adopting a significantly more aggressive stance on AD&C loans out of fear of the regulators coming into the banks and targeting them.

With inventories of new homes nearly depleted in many markets, builders should be gearing up to meet demand, create new jobs and keep the economic expansion moving forward. The only thing holding builders back in these locations are traditional lenders, who still aren’t providing the credit needed to renew the production process.

NAHB is urging Congress to support legislation introduced on May 5 by Reps. Gary Miller (R-Calif.) and Brad Miller (D-Calif.) that would help restore the flow of credit to the housing sector. H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011, offers 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.

For more information, see the text of the legislation or read NAHB’s press release.

2. Resolve the Faulty Appraisal Process

Appraisals remain a major problem for the housing industry. The process has gone seriously wrong because some appraisers are using distressed properties – many of which have been neglected and are in poor physical condition – as comparables in assessing the value of brand new homes without accounting for major differences in condition and quality. Without such adjustments, the two are not comparable. Appraisers don’t typically enter these fixer-up homes; if they did, they would likely recognize the substantial differences between a foreclosure that lacks working appliances and a new home fitted with state-of-the-art appliances.

Too often, due to faulty appraisal practices, the builder’s house winds up getting appraised at less than the cost of construction. This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, negatively affects housing demand and acts as an obstacle to the recovery of the housing market. Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility.

For more information on the appraisal issue, see the Nov. 7 special edition of Nation's Building News.

3. Protect the Mortgage Interest Deduction

Americans overwhelmingly oppose any action by Congress to tamper with the mortgage interest deduction, but it could be eliminated or scaled back as federal lawmakers and the Administration are looking at tax increases in light of deficit concerns.

The consequences would be devastating for home owners, the housing market and the nation’s economy. Any attempts to tamper with the mortgage interest deduction would raise taxes on millions of home buyers and home owners and further depress home values, leaving more home owners with mortgages larger than the value of their property (“underwater”) and fueling even more foreclosures.

This cornerstone of American housing policy has been in place since the inception of the tax code nearly 100 years ago and supports the aspirations of families at all income levels to become home buyers. Nearly 37 million home owners directly benefit from the mortgage interest deduction and 70 percent of the benefit goes to middle-class home owners who make less than $200,000.

Many in Congress agree that tampering with the mortgage interest deduction would harm consumers and the economy. House resolution H. Res. 25 expresses a "sense of Congress that the current federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted.” The resolution, which has more than 180 cosponsors, shows that lawmakers are aware of the critical role that the MID plays in supporting homeownership in this country. NAHB is encouraging supporters to call the Capitol Switchboard at 202-224-3121 and urge their representatives to co-sponsor H. Res. 25.

To educate the public on the importance of preserving the mortgage interest deduction as a cornerstone of American housing policy, NAHB has created a consumer-oriented website, SaveMyMortgageInterestDeduction.com. The website contains fact sheets, frequently asked questions, statistics, and other important information to allow consumers to stay informed as debate on the mortgage interest deduction moves forward.

Most importantly, SaveMyMortgageInterestDeduction.com tells visitors how to remain engaged and make sure their opinions are heard on this important issue by connecting through NAHB’s Facebook and Twitter mortgage interest deduction communities and Eye on Housing blog.

4. Maintain Federal Support for Housing Finance System

Some members of Congress are actively pushing to abolish Fannie Mae and Freddie Mac and end the federal backstop for housing. Absent a federal role to help reassure mortgage market investors, the 30-year, fixed rate mortgage, the major housing finance tool for most Americans, would become increasingly scarce and much more costly, pricing many creditworthy borrowers out of the marketplace. Similarly, the availability of financing for multifamily housing would fall woefully short of the growing need.

In the wake of the financial crisis, the Federal Housing Administration, Fannie Mae and Freddie Mac have become the primary sources of financing for residential housing.

Even with the current high level of federal support, fewer mortgage products are available now than in the past, and these loans are being underwritten on much more stringent terms. As the private market assumes a greater role in the mortgage marketplace, maintaining an appropriate level of government support is essential to preserve financial stability, promote investor confidence and ensure liquidity and stability for homeownership and rental housing.

Complicating the situation, the federal government is looking to trim back the Federal Housing Administration’s participation in the market, which would further limit the availability of low downpayment mortgages.
Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) on July 7 introduced H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011. The bill would stabilize housing and ensure liquidity in the mortgage market by maintaining a federal role in the U.S. housing finance system.
Similar bipartisan legislation (H.R. 1859) introduced this spring by Reps. John Campbell (R-Calif.) and Gary Peters (D-Mich.) would replace Fannie Mae and Freddie Mac with five private companies that would issue mortgage-backed securities and have government backing.
NAHB has presented lawmakers with a detailed proposal on restructuring the housing finance system to provide a consistent supply of mortgage liquidity and retain a federal backstop while limiting taxpayer exposure. Actively involved in this issue, the association continues to encourage all congressional efforts that seek an appropriate federal role to ensure a reliable and adequate flow of affordable housing credit.
Meanwhile, in an important victory for consumers, President Obama on Nov. 18 signed into law legislation passed by Congress to restore higher loan limits through 2013 for mortgages backed by the Federal Housing Administration. Restoring the higher FHA loan limits will help to stabilize home values, provide constancy while private investors re-enter the market and enable millions of creditworthy consumers to get home loans with the best mortgage rates and lowest fees and downpayment requirements.

For more information, click on the links below:

5. Preserve Affordable Downpayments and Mortgages

Six federal agencies are proposing a national Qualified Residential Mortgage (QRM) standard that would require a minimum 20 percent downpayment, which would keep homeownership out of reach of most first-time home buyers and middle-class households.

In addition, the QRM plan includes several other bad ideas that would seriously impact the average family’s ability to affordably obtain a home of their own. It would mandate restrictive debt-to-income ratios to qualify for a home loan and prevent 25 million current home owners from refinancing to lower mortgage rates because they lack the required 25 percent equity in their homes.

High downpayment and equity rules along with excessive underwriting requirements will not have a meaningful impact on default rates but it will tighten lending rules to the point where millions of creditworthy home buyers won’t be able to qualify for a mortgage. Responsible consumers who maintain good credit and seek safe loan products will be forced into more expensive mortgages under the terms of the proposed rule simply because they do not have 20 percent or more in downpayment or equity. In other words, the proposal unfortunately penalizes qualified, low-risk borrowers.

About 62 percent of first mortgages taken out to purchase a home last year would not have qualified under the proposed QRM standard because they had downpayments of less than 20 percent, according to LPS Applied Analytics, a mortgage data firm.

NAHB estimates that it would take 12 years for a typical family to save enough money for a 20 percent downpayment on a median-priced single-family home and other research has found it would take even longer. Borrowers unable to make a 20 percentdownpayment or to obtain FHA financing would be expected to pay a premium of up to two percentage points for a loan in the private market to offset the increased risk to lenders, according to NAHB economists. This would annually disqualify about 5 million potential home buyers, resulting in 250,000 fewer home purchases each year.

If buyers are denied access to affordable housing credit, the shadow inventory of foreclosed homes will not be drawn down, a housing recovery will not take hold and economic growth will stall.

Low-downpayment home loans have been originated safely for decades and did not cause the housing lending crisis. Subprime, no-documentation loans and other alternative mortgage products crashed the economy. The Administration and regulators must acknowledge this fact and offer a new plan that ensures a safe and healthy mortgage market and keeps homeownership affordable for working American families.

For more information on this topic, click on the links below:

6. Recognize Housing’s Important Role to the Economy

As policymakers begin debate on housing finance and budget issues that will impact job creation and future growth, they must understand the important role that housing plays in the U.S. economy. Considering the enormity of the total number of jobs attached to housing, a sector that accounts for 15 percent of the nation’s Gross Domestic Product, now is hardly the time to step back from the nation’s long-standing commitment to homeownership.

Building 100 average single-family homes generates more than 300 jobs and nearly $9 million in taxes and revenue for state, local and federal governments. Perhaps more than any other consumer product, housing is “Made in America.” New homes and apartments don’t arrive in this country on container ships from Europe or Asia, and most of the products used in home construction and remodeling are manufactured here in the United States.

More than 1.4 million residential construction jobs have been lost since April 2006. The pace of recovery is debatable, but based purely on population growth and demographics, the U.S. will need to build 17 million additional homes over the next decade.

The gap between current production and potential housing production is more than 1 million homes. That represents more than 3 million untapped American jobs. This gap is a result of multiple factors, including deferred household formations, a lack of construction financing and flawed appraisal practices under which new homes get compared to distressed and foreclosed properties, thereby distorting true market values.

There can be no economic recovery without a housing recovery. The path forward is perfectly clear: Congress needs to take actions to restore the health of the housing industry to put America back to work.

This is a sentiment shared by American voters as well. A recent NAHB survey of likely 2012 voters conducted by Public Opinion Strategies and Lake Research Partners found that despite the ups and downs of the housing market, home owners and non-owners alike consider owning a home essential to the American Dream and support politicians who embrace pro-housing policies and the mortgage interest deduction.
An overwhelming 75 percent of the respondents said that owning a home is worth the risk of the fluctuations in the market and 73 percent of those who do not own a home say it is a goal of theirs to eventually buy one. Equally telling, more than 70 percent of voters believe the federal government should provide tax incentives to promote homeownership and oppose proposals to eliminate the mortgage interest deduction -- a sentiment that cuts across party lines.
For more information on this topic, click on the following links:

7. Defend the Low Income Housing Tax Credit
As Congress looks at tax expenditures and all programs come under review, it is important to protect the Low Income Housing Tax Credit (LIHTC), the most successful affordable rental housing production program in U.S. history. Eliminating the LIHTC would bring production and rehabilitation of affordable rental housing to a standstill.
Since its inception, the program has made possible the production of more than 2 million affordable apartments. It creates approximately 95,000 new full-time jobs, adds $7.1 billion in income to the economy and generates approximately $2.8 billion in federal, state and local taxes each year. In recent years, the LIHTC has produced about 75,000 new apartment homes annually.
The demand for affordable housing is acute and far exceeds the ability of LIHTC projects to keep pace. The program is essential to address the shortage of affordable housing options in our cities and towns.

Submitted by:
Michael Kurpiel, CGA, CGP
NAHB Associate Member Committee Chairman
Past National Associate Chairman  2009-2010