August 4, 2014
You Do Whatcha’ Gotta’ Do
The National Association of Home Builders (NAHB) serves members in a wide variety residential building disciplines; i.e., single family, multi-family for sale, multi-family for rental, mixed-use and remodeling. Collectively these groups support our national economy and support the concept that home-ownership is a key component of the American Dream.
As of May 2014, there are 40,933 builder members within NAHB. Of those, 80%, or 32,746, are classified as single family home builders. During what our industry now refers to as the “Great Recession,” the period from 2007 through 2010, most of the above noted 80% turned to remodeling to survive. I recall hearing then that many NAHB remodeler members were quite “concerned” (polite choice of word) because those “single family” builders, in the minds of the remodelers, were destroying the profit margins of “genuine remodelers.” You have to forgive me; as a building material supplier I may not understand the subtleties of who decides who can build and what type of building they can or should, particularly when it simply makes good business sense to build what the market dictates and to provide product it demands.
Why am I writing about the above? Lately, I have been listening to quite a few members talk about multi-family home builders and how “they don’t understand” single family home building and the issues/concerns that come with that product. Hmm, sounds much the same as the remodelers when single family builders turned to remodeling. The fact of the matter is simple; builders will build what their own markets will bear and, again, what their respective market dictates. Here in my home state of New Jersey, once a Shangri-la of center hall colonials, we have faced tough regulations and legislation forced upon us by overzealous environmentalist influenced agencies and legislators. Those center halls turned into McMansions because of up-zoning and ¼ acre lots became 5 and 10 acres lots; all in the name of stopping development. Soon after, the McMansions dwindled because, once again, legislation and regulations choked the single family home builder because those builders adapted to the current market conditions.
Today, after the Great Recession, single family home building in New Jersey is still struggling to get back on its feet with multi-family, much like remodeling was several years back, being the only game in town. Or should I write “urban center?” That is, after all, where the state of NJ encourages building. Our builders (the shrewd ones anyway) have only one thought; “you do whatcha’ gotta’ do” and they set about meeting consumer demand. Back when single family home builders turned to remodeling, did that mean that they forgot about single family homes as a product? Of course not. Those builders knew then, as anybody would, that “you do whatcha gotta do” to protect your livelihood, your family and, yes, any employees that work for you. And guess what? When the single family builders, those who did survive, left remodeling and came back to building new homes, they enjoyed the benefits of having learned another building discipline, gained a better understanding of customer needs and trends and they survived another year in a tough business! In fact, give me a builder who understands the intricacies and differences of single family, multi-family for sale, multi-family for rental, mixed-use and remodeling products, each with its own inherent issues and concerns, and that will be about as well rounded as any builder can be.
The past six months have shown me that single family home builders may have to reach back in their memories and realize that we, as NAHB members, have to embrace all disciplines in building. We also have to understand, and this is needs to be repeated and understood, you can only build what the market dictates and the product it demands. Just because you build one product doesn’t mean you don’t care about about another, or won’t defend and support the right to build other products in Washington or your own state capitals.
We are all in this industry together, and if we are all to survive and then thrive, let’s remember that, “You do whatcha’ gotta’ do.”
submitted by Michael Kurpiel, CGA, CGP