May 28, 2015

55+ Housing: Some Thoughts from the New Guy


My series of Generational Shifts articles concluded last week and I was amazed at how many positive responses and requests to utilize the series  for HBA publications were sent to me. What pleased me was the comments by the very next generation I was writing about. The comments were mainly about how well I understood the next generation, at least as it pertains to the home building industry. It was only through asking questions and then listening that I was able to connect so many dots about the future of our association. One of the next generation builders, a young man with a wise mind and desire o continue his family's three generation building company, thought it would be a good idea to talk about his future in home building. Michael J. Kokes, an officer of the Shore Builders Association of Central New Jersey, is that third generation home builder. I knew his grandfather, Mike Kokes, a New Jersey Builders Association's Legend of Housing, and his father, Jan Kokes. I also know his uncle, Jerry Kokes. I'm amazed at how long I've been a member of our association to officially know three generations of builders. The Kokes Organization has been building since the early 1960's and has been a member of NAHB during that time as well. 

Thank you, Michael, for your article and continuation of the home building profession and your desire to be an association leader and future president.



 55+ Housing: Some Thoughts from the New Guy
by Michael J. Kokes

Michael J. Kokes
My family has made a name for itself by building age restricted housing for the past 51 years. My grandfather started building senior housing around 1964, with the start of Crestwood Village, and through the decades my family has built nearly 20,000 units (not all age restricted). Oddly, though, as I begin my journey as the next generation in the active adult market I realize that the rules of the game have change. Some of the steadfast norms that my family has adhered to for decades have change. Complicating things further has been the prolonged recession. The areas I see the most change in are our customers’ employment status, urbanization, non-qualification due to dependents, and lack of product. 


One of the largest marketing challenges we have had to overcome, and still work on every day, has been the employment status of our customers. What we have found is that people either don’t visit our communities because they feel they won’t fit in as they are still working, or that they can’t move in because they are still working. Neither, of which is accurate! Actually, quite contrary, as many of the people moving into our communities today are still working. To further back this up, the Bureau of Labor Statistics states that for 2014 61% of all people between the age of 55 and 64 are employed. 65 and older, and the number is 18%. If you take the two numbers together, 38% of all people over the age of 55 are still working. Our way of overcoming this has been multi-pronged, as we have changed the message and the medium for the message to reach our buyer. Respectively, we have implemented campaigns of “living the retirement lifestyle while you still work,” and utilizing more web based marketing. According to some sources, 90% of the entire US population is on the internet in some fashion. I believe it, as having a larger web presence, has been the largest contributor to increasing our traffic. 


In the 60’s, the communities my grandfather started flourished due to the race riots. As chaos and uncertainty ensued in the cities, people flocked to the “country sides” of New Jersey. As the decades passed, more and more 55+ buyers continued to move out to suburbia in search of a slower pace and more relaxed environment. Content with the local doctor, mom and pop restaurants, and social functions of the communities, our developments thrived. Today, more and more 55+ buyers are choosing to live in the urban environment, moving just outside of New York City, in places like Hoboken and Jersey City. The cause, they want to be closer to their kids and grandkids who still work in the urban areas, and within walking distance of the finest arts, restaurants, shopping, and doctors in the world. Finally, the modern day apartments offer virtually maintenance free living. Who can blame them? Except, as someone who moved out of a condo last year, let me tell you, the close proximity to others gets tiring real quick. Our way of dealing with this change has been to explain the proximity to mass transit, shopping, and major transportation arteries. Will this change though, who knows, but if we continue to see the difficulties facing our cities recently, you never know.


Although this problem hasn't come to light as frequently as the others, I do believe that it will become an ever increasing issue in the future. This issue is the disqualification of living in our communities based upon dependents. This can show itself in two ways. One, that many families are living with each other intergenerationaly, as they still haven't fully recovered from the financial crisis and two, that people are waiting till later in their lives to have children. As a basis, the bylaws of any typical age restricted community, is such that children under the age of 19 cannot live there. Additionally, children under the age of 19 can only stay for approximately 1 month in duration. The first situation is fairly self-explanatory, but let’s reviews the second. According to the Census Bureau, the number of women delaying child birth has risen exponentially. Surprisingly, women aged 35 and older has been the largest contributor. Additionally, men have delayed child birth even later then women, now choosing to have children into their 40s. Simple math shows that this will hinder someone’s qualification for living in our communities. Furthermore, history has shown that many people wait till their children are “established” before making the decision to move into a 55+ community. Many wouldn’t consider their children in their late teens or early twenties “established.” As such, I feel that the 55+ model will become harder and harder to sell to future customers. 


Finally, this complication may be more unique to New Jersey and the Northeast in general, but it still needs to be discussed. Based upon various constraints like environmental, municipal, and other complications, it is becoming harder and harder to source larger plots of land to build 55+ communities. In my grandfather and fathers era, it wasn’t unlikely to find 1,000+ unit jobs, today, we are lucky to find something 200+. What we have found, is that it is much harder to make the affordability and cost effectiveness of the various amenities available to our customers. For example, the cost of an indoor and outdoor pool is much easier to spread across 1,000 families, where this would be cost prohibitive in a smaller development. Additionally, this isn’t just the upfront development cost, but also the recurring Home Owners Association (HOA) fee. My thought is that we are going to see less amenity rich communities in the future. 


So are you depressed with this information? Don’t be! The future remains bright for homebuilding and 55+ communities as intelligent, young, aspirational people continue to enter the industry. As with anything, I am optimistic that we can overcome these and other future challenges that are presented to us. I know personally that we, and other builders, remain dedicated to providing quality and affordable housing in the New Jersey area.



About the author: Michael J Kokes is the Vice President of Project Planning for The Kokes Organization, a 51 year old real estate company located in Manchester New Jersey, specializing in 55+ housing. Mr. Kokes is also a Director at Harmony Bank, a community bank located in Jackson New Jersey, serving the Monmouth and Ocean County communities. Additionally, Mr. Kokes serves as a Director and Treasurer of his local home builders association, Shore Builders Association of Central New Jersey as well as Pinelands Environmental Subcommittee chairman at the New Jersey Builders Association. Mr. Kokes resides in Wall Township New Jersey with his wife and son.             








May 21, 2015

Extended Weekend? Just Remember Why

Tomorrow marks the unofficial start to what some may have as a four day weekend. For others, Saturday will begin their three day weekend. Regardless of the count, most will celebrate with barbecues, visits to the beach, parades or just spending time with friends at a local establishment to celebrate your multiple hours of fun before work invades your agenda on Tuesday. 
I applaud your freedom to exercise your right to enjoyment.

All I ask, not as a favor to me but to yourself, is to take time this Monday to close your eyes, place your hand over your heart and say "thank you." Not for your time off but the reason for your time off.

"It is foolish and wrong to mourn the men and women who have died. Rather, we should all thank God that such men and women lived."- General George S. Patton



May 14, 2015

Generational Shifts: Workforce Development

I was a guest speaker recently at a local home builders association's (HBA) board meeting in Pennsylvania discussing membership and of course, the next generation of member. After the discussion took place the first vice president came up to me, thanked me for my "enlightening words," and then reminded me that the next generation of member, builder and associate, can't be successful because we are not making an effort to establish a healthy workforce development program. She asked me if I knew if the National Association of Home Builders (NAHB) was involved with any programs. I researched the newly renovated nahb.org, because this is not a subject matter with which I am familiar. This is what I found and promptly sent her the following links; 

  • Home Builders Institute (click here)
    HBI, a member of the NAHB Federation, is a nationally prominent nonprofit that assesses, trains, certifies and provides industry job placements for the home building industry.  The HBI is the largest National Training Contractor for the Department of Labor in the Job Corps program and also trains through their Pre-Apprenticeship Certificate Training (PACT) program.  Populations served by the HBI include underserved and at-risk youth, adult offenders and ex-offenders, existing veterans and active military personnel soon to separate from the service and displaced and unemployed workers. HBI’s programs are in  over 275 locations in 42 states.
  • Members Only: NAHB's Workforce Development Policy (click here)
  • NAHB Student Chapter Web Page (click here) 

For my last article on generational shifts, I would like to look at and explore the last piece to the next generation puzzle; workforce development. As mentioned, I wasn't familiar with the workforce development issue but I am much closer now. It seems to me that NAHB has been extremely proactive when it comes to making sure we have workers, let alone members, in the upcoming years, and I'm wondering how many local HBAs know that there is quite a bit of information from NAHB to be utilized. What actions, if any, are we taking to work with the students? Years ago the thought was if your child was not academically prepared for college  people used the phrase "that's 'OK,'the world needs ditch diggers, too." According to ridiculous folklore, vocational schools were for the "book challenged." Today, we are faced with a skilled labor shortage and, while immigration will certainly help, I would like to see a healthy influx of American made talent in our ranks. In this global economy in which we now all reside, the college educated youth of America are seeing their potential jobs moving towards the outsource lane, with no speed limit. So learning a trade, which is an admirable and respectable way to earn income, is a realistic choice. In fact, these vocational schools would be prudent to have college courses on business management so that the student not only learns a trade but can create their own business for their trade.

Why should educators, builders and HBAs work together to address the building industry workforce issues in their communities?
·         The shortage of skilled workers across the entire spectrum of the home building industry is a major problem, and there are also concerns about the quality of the current workforce.

·         Without action and NAHB member involvement, labor shortages are likely to continue.

·         A concerted collaborative effort that reaches the nation’s educators and high school students can be an effective way to address some of the issues that have contributed to chronic labor shortages and misperceptions of the industry.

·         Builders can help their communities grow and prosper; educators want to be able to direct their students toward meaningful employment and career choices.



By 2018, fields like construction and manufacturing will provide nearly 8 million job openings, 2.7 million of which will require a post-secondary credential.

                *Harvard Graduate School of Education



The construction industry will need more than 2 million new trade professionals by the year 2017.

                *Harvard Graduate School of Education



70% of employers state that they would pay significantly more to get qualified employees.

                *McKinsey Global Institute





Establishing an NAHB High School Student Chapter

Developing an NAHB Student Chapter in the school will, of course provide greater access to industry leaders and resources for those students who are showing particular interest in industry-related career paths.



As part of their membership, students can participate in national competitions, and attend industry conferences. They have direct access to a network of builders and associates members, who can help them enhance their career exploration efforts and, eventually, their careers.



Student Chapters also provide a mechanism for educators to become directly involved with the local HBA and NAHB.





Connect to Local Home Builders Associations

Student Chapters provide students the skills they need for direct access to the industry, internships and jobs through more than 700 local home builder associations across the country. Establishing a Student Chapter at your school is easy and certainly should be on your list for the upcoming academic year. It’s a great way to give students an out of classroom experience.



HBA Role as Resource

One of the greatest values of NAHB High School Student Chapters is that it connects a school and its students with professionals from the residential building industry who have a genuine interest in making students aware of careers, and offering them a chance to explore and experience those careers.



NAHB members can play a key role in career exploration activities in the school and out in the community.

·         Serve on the career advisory committee at your local technical high school

·         Host meetings at their workplace

·         Get involved in the school’s career fair or career day events

·         Host an industry—focused career fair open to the community

·         Participate in National Groundhog Job Shadow Day on February 2, inviting members to provide job shadowing experiences for groups of students

·         Conduct informational interviews and hold job tryouts at member business locations

·         Offer students internships

·         Invite students to HBA events



Raise Awareness of Construction Careers

Increase public awareness of the hard work and economic contributions of the building industry in your community and increase students’ interest in pursuing construction as a career.



Ideas for activities:

·         Ask a local construction site to host a field trip. Arrange for students to tour the site and gather first-hand information on what it takes to have a successful career in construction.

·         Help students prepare for a career in construction by coordinating a resume building session. Provide interview and resume tips. Students can search for careers and post resumes when they are finished.

·         Place an article or ad in your local newspaper on careers in construction and the value of construction professionals.

·         Sponsor a contest having students describe their favorite family member involved in construction. All contest participants’ projects could then be displayed in a local school or business.

·         Assemble a panel consisting of at least one construction student, one experienced construction trades professional and one construction business owner. Panel members can host a question and answer session to discuss local career opportunities for students.

·         Request a proclamation from your mayor/governor declaring a certain month Careers in Construction Trades Month.

·         Host a press conference. Discuss an important building issue in your community; release findings of a local survey; honor a local construction organization or employee; or bestow an honorary skilled trade title to a deserving politician.


Regards,
Mike


May 7, 2015

Generational Shifts: the Last Kodak Moment



In 2014, then National Association of Home Builders (NAHB) Chairman of the Board, Kevin Kelly, referred to our possible future as an association, as having a Kodak moment. Chairman Kelly was sending a warning signal to the NAHB leadership utilizing the Kodak Moment as the message. For those who remember, a Kodak Moment was a slogan utilized by Kodak to tug at our hearts. It was the moment in time captured on film to cherish forever. Capturing images was not invented by Kodak. Cavemen began the practice with burnt sticks and rocks delivering crude images to a cave's wall. We witnessed many of the masters, and amateurs, of canvas painting delivering images. As lifelike as these paintings were, they were not truly the real image. Until...


The first photograph was created in 1816 in an attempt to capture real images. Between 1816 and 1878, subtle changes improved the way we preserved images but it wasn't until 1878 that George Eastman took his vision, his changes, and created Eastman Kodak, later to be known as simply Kodak. I won't bore you with details, you can Google it if you'd like, but throughout the next 130 or so years, Kodak was king of film, and the Kodak moment was our way of remembering people, places and events. You could bring an ocean into your home or a lion through film imagery. The last Kodak moment came for the company when their stubbornness allowed their competitors, like FUJI, to pass them in the advances of preserving a moment or vision. The sad part of all this was the core mission NEVER changed, never wavered; images preserved! It was the delivery system that changed. Advances, which Kodak did seem to keep up with, that changed the quality of the photo, the speed of which you can take the photo and the quickness of how the photo was developed. What Kodak failed at understanding, and I'm simplifying here, was the speed of technology moving film to digital images. FUJI and others rode the technology shifting wave into the 21st century. Kodak was swamped on the beach. Kodak eventually went bankrupt and while you'll probably be able to buy digital cameras with the Kodak name, it is no longer Kodak owned.

Other industries' giants fell to cockiness or head strong beliefs. Vinyl record companies, like Columbia, that were but now aren't because the vinyl record  moved to 8 tracks which succumbed to cassettes. Cassettes were king until compact disks became the rage. Yes, I am of an age where I experienced the birth, and demise, of all music delivery systems. Today? MP3s which are a part of our new listening experience which allow you to download music to a hand held device like an iPod.  I'm, sorry, iTouch. Wait, correction, iPhone (or is it iPad). Which version?? I'm on 6 Plus! Which leads me to recognize that I'm not even uploading music to my iPhone Plus. I'm streaming music instantly from an app called Spotify!

There are literally hundreds if not thousands, more examples. The above two examples illustrate one key and common element; they were both delivery systems. One delivered image and the other delivered music. That was the mission because there was a consumer and that consumer is very much in play today and for the foreseeable future.

NAHB leadership is concerned that our Federation may be having its own Kodak moment. Like Kodak, NAHB is a delivery system. NAHB delivers industry protection as well as ways to promote industry growth and profitability for it's consumers AKA members. Changing the delivery system is a work in progress but understanding that the most dangerous phrase in any industry is "we've always done it this way" needs to be the first thing changed. Knowing that NAHB understands the Kodak moment and relates it to our association. This is a necessary and significant step towards change. Change is not a scary thought because change should not be thought of as complete transformation or a throwing out and replacing situation. Change can be as subtle as understanding the new world order created from our housing depression. Change can be as easy as learning new techniques and apply them to our lives. No one is saying that NAHB is broken, I'm certainly not. But if I'm hearing our national leaders express their concern and invoke "the Kodak moment" as we prepare for the next chapter for our building industry's sword and shield, I would like our members to listen with open ears, understand with clear minds and stoke the passion fire that is in their hearts. History is a gift; it tells us where we were and where we could be if it's repeated. Understanding the history of the all powerful Kodak is warranted because it could be NAHB.


“Unlike people, companies can in theory live forever. But most die young, because the corporate world, unlike society at large, is a fight to the death. Fujifilm has mastered new tactics and survived. Film went from 60% of its profits in 2000 to basically nothing, yet it found new sources of revenue. Kodak, along with many a great company before it, appears simply to have run its course. After 132 years it is poised, like an old photo, to fade away.” – The Economist
 
Regardless of generation classification,  I want today's member, volunteer and leader to work towards what will be coming in our association's future, near and far, and never have our own Last Kodak Moment.

 Regards,
Mike