Call for Exhibitors! BIA-Hawaii Remodel it Right, Remodel it Green Expo 2013

The Building Industry Association of Hawaii (BIA-Hawaii) will present the 9th Annual Remodel It Right/ Remodel It Green Expo on Friday, August 9 through Sunday, August 11 at the Neal Blaisdell Exhibition Hall. Over 200 exhibitor booths will showcase Hawaii’s top contractors, suppliers, building industry experts and associates. Interested companies are welcome to contact BIA-Hawaii to participate in this convenient central location showcase of remodeling industry expertise. The event theme, “Remodel It Right, Remodel It Green”, will enlighten and educate homeowners on the latest products, services and trends in energy savings and sustainable living.

Unique features of this award winning Expo include the “Meet the Experts” presentations that provide on-going round table interactive discussions from the entire spectrum of the remodeling industry and the “Remodel It Right” Panel of Experts. These in-depth round table discussions will cover key topics that will provide a strong foundation for your remodeling project. Architecture, General Contracting, Contractor Licensing, Permitting Guidelines and Kitchen and Bathroom Remodeling Basics are all offered in the “Meet the Experts” area. A Free Remodeling Planning Kit will be offered to every family attending the sessions, while supplies last.

Companies interested in becoming exhibitors in the August 9-11, 2013 BIA Remodel It Right/ Remodel It Green Expo at the Blaisdell may contact Clarice Watanabe at (808) 629-7503 or email ckw@biahawaii.org for additional information.

Housing Tax Incentives Critical to Maintain Thriving Middle Class, NAHB Tells Congress

NAHB Press Release

WASHINGTON, April 25 - To meet the nation's growing need for affordable rental housing and homeownership opportunities, the National Association of Home Builders (NAHB) today called on Congress to maintain its support for vital housing tax incentives, including the Low Income Housing Tax Credit, the mortgage interest deduction and real estate tax deductions.

"Home building is an industry dominated by small businesses, so the idea of simplifying the complicated tax rules related to business has great appeal. At the same time, our industry remembers painful lessons from the 1986 Tax Reform Act, when the commercial and multifamily sectors experienced a downturn due to unintended consequences," said Robert Dietz, an economist and assistant vice president for NAHB, in testimony during a House Ways and Means Committee hearing on tax reform and residential real estate.

Moreover, when housing fares well, it spurs job and economic growth, Dietz added. "For these reasons, we urge Congress to be cautious and thoughtful when it comes to housing and tax reform."

U.S. Census data shows that more than 40 percent of renters are "rent burdened," or pay more than 30 percent of their household income on rent. The need for affordable rental options remains acute. The Low Income Housing Tax Credit (LIHTC) is the most effective tool for the creation of affordable rental housing. Utilizing a public-private partnership to attract investment, the program has produced and financed more than 2 million affordable rental units since its inception in 1986.

"As LIHTC properties must generally remain affordable for 30 years, they provide long-term rent stability for low-income households around the country," Dietz said. "But the demand for affordable housing far exceeds the availability of financing through the LIHTC program. The solution is not to eliminate the most successful affordable housing program in the country, but to provide it with the resources necessary to address the shortage of affordable housing options in our cities and towns."

When it comes to housing and tax reform, the spotlight typically falls on the mortgage interest deduction, and Dietz set the record straight on a number of false assumptions regarding this important homeownership benefit.

"First, we frequently hear that few home owners benefit from the mortgage interest deduction because itemization is required," he said. "In fact, most home owners will claim it. In 2009, 35 million taxpayers, or 70 percent of home owners with a mortgage, claimed the mortgage deduction in that year. Among all home owners who have ever held a mortgage, the vast majority have claimed the home mortgage deduction for years at a time."

Critics charge that the mortgage interest deduction encourages the purchase of a larger home, but these claims ignore the role of family size. Home owners with larger families need bigger homes and will therefore have a higher mortgage interest deduction.

"The need for a larger home created the higher home loan deduction, not the other way around," said Dietz.

He also noted that the cost of housing varies greatly across the nation, so what appears to be a large deduction for a given home in one area may reflect a modest home in a high-cost area.

Moreover, the mortgage interest and real estate tax deductions are two of the few elements in the tax code that that account for differences in cost-of-living.

"The real estate tax deduction is an important reminder that home owners pay more than $300 billion in property taxes each year. This fact is often ignored in the federal tax debates because these taxes are collected by state and local governments," said Dietz.

There is also a direct correlation between the age of a home owner and their resulting benefit from the mortgage interest deduction. As a share of household income, the largest deductions are for those 35 and younger. The benefit of a deduction that reduces the net cost of monthly house payments is particularly important to these home buyers, who typically have less equity, tighter household budgets, and must meet the needs of a growing family.

"Given this demographic connection, NAHB believes that any policy change that makes it harder to buy a home, or forces young families to defer home purchases, will have a significant impact on wealth accumulation and the makeup of the middle class," said Dietz.

Regarding the mortgage interest deduction rule for second homes, Dietz said that many mistakenly think this refers to expensive beach property, when in reality, such homes are often owned free and clear or rented, which excludes the owner from taking the mortgage interest deduction.

In practice, the second home deduction is important for many who don't think of themselves as owning two homes. Repealing the deduction for second homes would penalize millions of home owners who move from an existing home and buy a second home in a given tax year. There would be further negative economic consequences in terms of lost home sales, home construction and local tax revenues.

Noting that building 100 single-family homes creates more than 300 full-time jobs and $8.9 million in federal, state and local tax revenues that helps boost local communities and schools, Dietz said that how housing is treated in an future tax reform will shape the economy going forward.

"Housing provides the momentum behind an economic recovery because home building and associated businesses employ such a wide range of workers. With the right policies in place, housing can be a key engine of job growth that this country needs."

Remodeler Confidence Dips in First Quarter 2013

NAHB Press Release

WASHINGTON, April 25 - Remodelers' confidence in the market dipped in the first quarter of 2013 when the Remodeling Market Index (RMI) fell six points to 49, according to the National Association of Home Builders (NAHB). Concern about the rising costs of construction materials and labor contributed to the pause in the general upward trend of remodelers' confidence.

An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.

"Remodelers remain optimistic about the outlook for growth in the remodeling market this year, but the rising cost of doing business makes it difficult to deliver the prices that many of our customers expect," said 2013 NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. "Repairs and minor additions are currently the strongest categories of business for remodelers as home owners continue to invest in deferred maintenance and room-by-room remodeling."

The future market indicators component of the RMI decreased from 56 in the previous quarter to 48. Current market conditions also fell from 54 in the previous quarter to 50. Remodelers indicated that activity was particularly strong in owner-occupied properties, rating all categories of remodeling in owner-occupied homes 51 or better.

"Although this quarter's RMI indicates a pause in the improvement that the remodeling market had been showing, it is nevertheless the third highest reading for the RMI since the first quarter of 2006," said NAHB Chief Economist David Crowe. "Like the rest of the home building industry, remodelers are starting to feel squeezed by higher costs and limited availability of labor and materials, which is unusual at such an early stage of a housing recovery. However, the downturn was so deep and extended that this time it may take a while to re-establish the supply chains."

The RMI was 47 in the Northeast, 47 in the Midwest, 51 in the South and 52 in the West.

For more information about remodeling, visit www.nahb.org/remodel.

Short-Term Ups and Downs for Housing

NAHB Report

Recent housing market data have illustrated that while the long-run trend for housing remains one of improvement, there will be bumps along the road. In particular, availability of building lots and skilled labor, rising building material prices, and big-picture economic and policy developments will present month-to-month challenges for home builders and other housing businesses.

For instance, the share of first-time home buyers remains lower than the historic average. For the housing market to return to normal, these buyers need access to credit and stable labor market conditions to afford a home.

As a result of these challenges, builder confidence has declined slightly in 2013. The NAHB/Wells Fargo Housing Market Index (HMI) dropped two points to 42 in April. This is the third monthly decline from a peak of 47 in December and January. Two of the three components pulled the composite index down: The current sales component fell two points to 45 and the normally lower traffic component fell four points to 30.

However, consistent with long-run improving trends, the component measuring expectations for future sales increased three points to 53, tied for the highest level since February 2007.

One factor holding builder confidence back is a rise in the cost of some building materials. Since last March, Production Price Indices have significantly increased for gypsum (18%), softwood lumber (30%) and OSB (68%).

Consistent with the decline the HMI, single-family housing starts were down 4.8% in March. Single-family construction fell to a 619,000 annual pace from an upwardly revised February rate, which in turn was the highest since May 2008. The first-quarter single-family starts average was 628,000, up 6% from the fourth quarter of 2012.

Overall housing starts actually rose 7% for March, but this surge was due to an unsustainable jump in multifamily apartment construction, which was up 31% month over month.

At a 392,000 annualized pace, the starts rate for units in properties with more than five units is the highest it has been since January 2006. This pace is above the total number of five-plus starts in any year since the 1980s, suggesting that the rate of multifamily construction is not sustainable going forward. Consistent with this conclusion, multifamily permits for March were down 8%, while the number of five-plus permits waiting in the pipeline (previously issued but not yet converted to starts) declined 19%.

Nonetheless, total housing starts in March rose above the 1 million pace (1.036 million), a psychological, if not economically meaningful, threshold.

New home sales continued slow improvement. HUD and Census reported new home sales up 1.5% in March at an annual rate of 417,000 per year. Except for the January outlier rate of 445,000, this is the highest rate of sales since the end of the home buyer tax credit in early 2010. The first-quarter average came in at a 424,000 annualized sales rate, which is the highest since third-quarter 2008.

Inventories of newly built homes continue to stand near historic lows at 153,000, with a mere 41,000 homes completed and ready to occupy. In a normal market, there are about 100,000 ready-to-occupy new homes for sale. At the current sales pace, the inventory represents only a 4.4-month supply.

On the other hand, existing home sales were down in March. Per the National Association of Realtors (NAR), existing home sales decreased 0.6% in March from a downwardly revised level in February. However, the sales rate is up 10.3% from the same period a year ago.

NAR reported that March total existing home sales were at a seasonally adjusted rate of 4.92 million units combined for single-family homes, townhomes, condominiums and co-ops. That compares to 4.95 million units in February, and 4.46 million units during the same period a year ago.

Total housing inventory at the end of March increased 1.6% from the previous month to 1.93 million existing homes for sale. At the current sales rate, the March 2013 inventory represents a 4.7-month supply, compared to a 4.6-month supply in February, and a 6.2-month supply of homes a year ago.

The increase in March inventory suggests that rising prices are inducing more households to place their homes on the market, after previously holding back because of low prices. Those same rising prices may be dampening the enthusiasm of investors and cash buyers whose participation declined in March.

Indeed, all cash sales were 30% of transactions compared to 32% in February, and 32% in March 2012. Investors accounted for 19% of March 2013 home sales, compared to 22% in February and 21% a year ago. First-time buyers accounted for 30% of March 2013 sales, the same as the previous three months, although down from 33% during the same period a year ago. Historic norms would place the first-time home buyer share closer to 40%.

Rising rents could further increase demand for new and existing home sales in the months ahead. Per data from the Consumer Price Index, real rental prices rose by 0.1% in March. They have increased steadily since June 2012 and have now surpassed the cycle high established in May 2009.

Lastly, with the release of the 2010 Census, the Office of Management and Budget (OMB) has published new definitions for metropolitan statistical areas (MSAs). Major changes to MSA definitions take place every 10 years when population counts and commuting patterns are revised following the decennial census. In 2013, 23 brand-new areas were designated as MSAs: 10 in the South region, five in the Northeast, five in the West, and three in the Midwest. Pennsylvania added four news MSAs, the most of any state.

Besides creating brand-new metro areas, the OMB guidelines also changed the name of many MSAs (and a few Divisions). One such name change, for example, took place in Baltimore, where the MSA name changed from Baltimore-Towson, Md., to Baltimore-Columbia-Towson, Md. This indicates that Columbia now has the necessary population and employment totals to be named a principal city of this metropolitan area.

The new OMB guidelines also resulted in a few areas losing their MSA status. In some cases, the counties affected were absorbed by another MSA. In other cases, the counties are simply not metropolitan counties any longer. Poughkeepsie-Newburgh-Middletown, N.Y. is an example of the former. Its two counties were absorbed into the divisions that make up the New York City MSA.

Housing Recovery Continues but Headwinds Remain

NAHB Press Release

WASHINGTON, April 24 - Buoyed by rising home prices throughout much of the nation, both single-family and multifamily housing starts are expected to post double-digit gains over last year in 2013. However, headwinds continue to hold back even stronger growth as the housing recovery evolves, according to economists at NAHB's Spring 2013 Construction Forecast Conference Webinar.

"The broadening housing expansion is evidenced by the NAHB/First American Improving Markets Index, which now lists 273 metros areas out of a universe of 361, or three-quarters of the metropolitan areas in the U.S.," said NAHB Chief Economist David Crowe.

The recent surge is almost all due to improvements in house prices across a broader number of markets, he added. Home price increases became more solid and consistent in 2012, and the latest data shows a nearly 6 percent annual rate of home price appreciation on a national basis.

Growth in the housing sector is rising at a much faster pace than the overall economy during this phase of the recovery, Crowe added. The residential fixed investment component of GDP was up 17.5 percent in the fourth quarter of 2012 whereas total economic output only registered a 0.4 percent gain.

As demand for housing gradually picks up steam, supply chains for building materials, developed lots and skilled workers will take some time to re-establish themselves in the aftermath of the Great Recession.

Meanwhile, builders are feeling pinched by rising costs of key building components (prices of gypsum, softwood lumber and concrete are all above 90 percent of their housing boom peak), which is causing home construction costs to rise at a faster pace than appraised values, Crowe said.

Moreover, ongoing difficulties in obtaining construction credit, overly restrictive mortgage lending rules and uncertainty in Washington regarding the future of housing financial regulations and housing tax incentives, including the mortgage interest deduction and Low Income Housing Tax Credit, threaten to dampen consumer confidence and future housing demand.

Setting the 2000 to 2003 period before the housing boom as a time of normal residential building production, Crowe said that residential remodeling has returned to previously normal levels of the early 2000s and that remodeling activity is expected to register a 2.2 percent gain this year over 2012.

Meanwhile, NAHB's Multifamily Production Index, a leading indicator for the multifamily market, has jumped 38 points in the past four years and now stands at 54. For the past three quarters, the index has been above the critical tipping point of 50, where a reading of 50 means that an equal number of builders view conditions in the multifamily market as good and bad.

Multifamily starts are expected to rise to 334,000 units in 2013, up 35 percent from last year's 247,000 level, bringing production back to the baseline level that is needed to keep the supply in balance with demand. Multifamily starts are anticipated to rise an additional 5 percent next year to 349,000 units.

The single-family market, which must make up the most ground to return to its 2000-2003 level of normal production (1.3 million units), continues to make steady gains. NAHB is forecasting 672,000 single-family housing starts in 2013, up 23 percent from the 534,000 units recorded last year. Single-family production is expected to rise an additional 28 percent in 2014, to 858,000 units.

Fed to the Rescue

Taking a more bullish approach to the housing and economic recovery, Maury Harris, managing director and chief economist for the Americas for UBS, expects housing starts to total 1.1 million units this year (700,000 single-family and 400,000 multifamily) and 1.35 million units (900,000 single-family and 450,000 multifamily) in 2014.

"My view is that monetary policy is more important than fiscal policy," Harris said, noting that the sequester will cut about $85 billion in spending out of the economy this year while the Federal Reserve's monetary expansion policy is pumping $85 billion into the economy every month.

"As the Fed buys securities and pumps reserves into the banking system, this is easing lending standards and that will help job growth," he added.

Harris expects unemployment to fall to 7.5 percent at the end of this year and 6.7 percent at the end of 2014.

With job formation a critical variable affecting household formation, Harris expects 1.1 million new households to form this year and an average of 1.3 million new household formations annually over the next three years.

During the housing downturn, new household formations plummeted to 500,000 annually. As housing and the economy recover, there is a large pent-up demand for housing. Harris said that the household gap, which is the difference between potential and actual household formation, is about 2 percent of potential households or about 2 million.

"The bottom line: we're reasonably optimistic about the economy," Harris said. "The public doesn't sufficiently appreciate all the good that the Fed is doing."

Conditions Vary by State

Now that the boom and bust carnage is over, a major development on the housing front is that housing markets are reconnecting to their underlying economies, according to Robert Denk, NAHB's assistant vice president for forecasting and analysis.

"The housing market is now being driven by local economic fundamentals," said Denk. "Energy states and those driven by agricultural commodities are seeing their housing markets turn around the fastest."

California, Florida, Nevada and Arizona, which fell the farthest during the housing downturn, bottoming out at 10 to 20 percent of normal production, are showing progress in making a comeback. Home prices in many of these markets are returning to normal and near-normal levels, thanks in part to foreclosure rates that have eased significantly since hitting their peak in 2009.

"While these former bubble states still have a long way to go to get back to normal, they have been replaced by the industrial Midwest, which is facing weakness in manufacturing, as the laggard in the recovery," said Denk.

Led by North Dakota, Texas, Oklahoma, Wyoming, Montana and Louisiana, the energy producing states are the first states projected to return to normal production levels by the end of next year, Denk said. Iowa, a farm belt state supported by agricultural commodities, is also approaching a faster return to normal conditions.

In another way of looking at the long road back to normal, by the end of 2014, the top 20 percent of states will be at or above 87 percent of normal production, compared to the bottom 20 percent, which will still be below 60 percent.

New-Home Sales Rise 1.5 Percent in March

NAHB Press Release

WASHINGTON, April 23 - Sales of newly built, single-family homes rose 1.5 percent to a seasonally adjusted annual rate of 417,000 units in March, according to newly released figures from HUD and the U.S. Census Bureau.

"This is the second-best sales number we've seen since early 2010, and a good sign of the continued, gradual headway that our industry is making toward recovery as more buyers jump off the fence in time to take advantage of today's low interest rates and prices," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C.

"The latest sales report is right in line with our forecast for continued, modest increases in home prices and sales through 2013," said NAHB Chief Economist David Crowe. "At this point, we are about half-way back to what would be considered a 'normal' level of sales activity as challenges related to supplies of credit, building materials, lots and labor are slowing the pace at which builders can build and sell new homes."

Regionally, new-home sales activity was mixed in March, with the Northeast and South posting double-digit increases and the Midwest and West posting corresponding declines. Sales gained 20.6 percent in the Northeast and 19.4 percent in the South, while falling 12.1 percent in the Midwest and 20.9 percent in the West.

The inventory of new homes for sale held virtually unchanged at just 151,000 units in March, which amounts to a 4.4-month supply at the current sales pace.

Home Builders Call on Congress to Improve Immigration Bill's Guest Worker Provisions

NAHB Press Release

WASHINGTON, April 22 - The National Association of Home Builders (NAHB) commends the bipartisan Senate sponsors of legislation to advance comprehensive immigration reform and today called on lawmakers to improve the guest worker provisions in the bill to address the significant role that foreign workers play in the housing industry and to help alleviate current labor challenges that are hampering the housing and economic recovery.

Testifying before the Senate Judiciary Committee on the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744), NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C., urged Congress to implement a new market-based visa system that would allow more immigrants to legally enter the construction workforce each year.

"Despite our efforts to recruit and train American workers through the HBI Job Corps program and other programs, our industry faces a very real impediment to full recovery if work is delayed or even cancelled due to worker shortages," said Judson. "A new, workable visa program would complement our skills training efforts within the nation's borders, and fill the labor gaps needed to meet the nation's housing needs."

In a recent survey of NAHB's membership, 46 percent of the builders surveyed experienced delays in completing projects on time, 15 percent had to turn down some projects and 9 percent lost or cancelled sales as a result of recent labor shortages.

Foreign-born workers have traditionally played a vibrant and important role in home building. Today, they account for 22 percent of the construction labor force, according to the Census Bureau. Moreover, trades with a high concentration of immigrant workers also tend to have more vacancies and labor shortages. There are currently 116,000 unfilled positions open in the construction sector - a post-recession high.

While the W Visa program that addresses a guest worker program for the low-skill sector within Senate bill S. 744 reflects a good-faith attempt on the part of lawmakers to address a serious concern, NAHB believes the program is unworkable for the residential construction industry.

"First and foremost, the program wrongly singles out the construction industry with a discriminating set of rules, including an arbitrary and meager cap that not only ignores but rejects the value of the housing industry to the nation's GDP," said Judson. "Our industry, which in normal times accounts for more than 17 percent of the nation's total economic output, should be afforded the same opportunities as any other sector of the economy. Congress must reassess this critical flaw in the legislation."

Judson also outlined other components of the W Visa program as areas of concern:

The 8.5 percent unemployment trigger. Putting an unemployment trigger in the program ignores the simple fact that immigrant workers and native-born workers sometimes perform jobs that are independent. Moreover, with the current unemployment rate well below 8 percent, labor shortages in all facets of the industry - including framers, carpenters, bricklayers and weatherization workers - continue to undermine the housing recovery.

• Prevailing wages. Employers will already have to pay fees for self-registration and any positions needed. Further adding a complex prevailing wage scale to the program will deter private small business firms from taking advantage of it. Employees should be paid market rate, or actual wages.
• The inclusion of a commission in the W Visa program. The marketplace is best-suited to make wage and worker shortage determinations, not a new bureaucratic entity, said Judson. The most accurate way to measure whether immigrant workers are needed is for employers to try, and either succeed or fail, to hire U.S. workers.
• Complete portability. Under this provision, a registered employer faces the stark reality that a W Visa holder has the option to quit and work somewhere else beginning on the very first day of work. NAHB believes that it is only fair that employers have some assurances that after navigating a confusing and expensive process, the visa holder will actually have to show up and work for the employer who sponsored the worker. This concern is even more pronounced for the construction industry, considering the meager 15,000 visa cap. Employers should receive a credit for losses incurred.

Remodel Smart: Know the Language

By: Karen T. Nakamura , CEO
Building Industry Association of Hawaii

An educated shopper is a smart shopper. This especially hold true in the world of hiring and working with contractors to make improvements to your home.

As you interview potential contractors, being able to understand the terminology they use can help you avoid miscommunication and ensure a smoother remodeling experience so you and your family can enjoy your new or updated kitchen, bathroom or room addition even sooner.

Here’s a glossary of some of the common terms used by builders and remodelers to help you understand the language of your remodeling project:

Allowance: A specific dollar amount allocated by a contractor for specified items in a contract for which the brand, model number, color, size or other details are not yet known.

Bid: A proposal to work for a certain amount of money, based on plans and specifications for the project.

Building Permit: A document issued by a governing authority, such as a city or county building department, granting permission to undertake a construction project.

Call-back: An informal term for a return visit by the contractor to repair or replace items the home owner has found to be unsatisfactory or that require service under the warranty.

Certified Graduate Remodeler (CGR): A professional designation program offered through the National Association of Home Builders (NAHB) Remodelers Council™. To attain the CGR designation, a remodeler must take a specified number of continuing education courses and must comply with a strict code of ethics.

Certified Aging-in-Place Specialist (CAPS): The CAPS designation was developed by the National Association of Home Builders and AARP. CAPS professionals have been taught the strategies and techniques to meet the home modification needs of home owners who want to continue living in their homes safely, independently and comfortably, regardless of age or ability level. CAPS graduates pledge to uphold a code of ethics and are required to maintain their designation by attending education programs and participating in community service.

Change Order: Written authorization to the contractor to make a change or addition to the work described in the original contract. The change order should reflect any changes in cost.

Cost-plus Contract: A contract between a contractor and home owner based on the accrued cost of labor and materials plus a percentage for profit and overhead — also known as a time-and-materials contract.

Draw: A designated payment that is "drawn" from the total project budget to pay for services completed to date. A draw schedule typically is established in the contract.

Lien Release: A document that voids the legal right of a contractor, subcontractor or supplier to place a lien against your property. A lien release assures you that the remodeler has paid subcontractors and suppliers in full for labor and materials.

Mechanic’s Lien: A lien obtained by an unpaid subcontractor or supplier through the courts. When enforced, real property — such as your home — can be sold to pay the subcontractor or supplier. If a subcontractor or supplier signed a lien release, then this lien cannot be enforced.

Plans and Specifications: Drawings for the project, and a detailed list or description of the known products, materials, quantities and finishes to be used.

Punch List: A list of work items to be completed or corrected by the contractor, typically near or at the end of a project.

Subcontractor: A person or company hired directly by the contractor to perform specialized work at the job site — sometimes referred to as a trade contractor.

To learn more about remodeling your home, visit www.biahawaii.org and plan on attending our next consumer show, the BIA Remodel It Right, Remodel It Green Expo August 9-11, 2013 at the Neal Blaisdell Exhibition Hall.

Statement from NAHB Chairman Rick Judson on Senate Immigration Bill

NAHB Press Release

WASHINGTON, April 16 - Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C., issued the following statement regarding comprehensive immigration reform unveiled today by a group of eight bipartisan senators:

"NAHB congratulates Sens. Michael Bennet (D-Colo.), Richard Durbin (D-Ill.), Jeff Flake (R-Ariz.), Lindsey Graham (R-S.C.), John McCain (R-Ariz.), Robert Menendez (D-N.J.), Marco Rubio (R-Fla.) and Charles Schumer (D-N.Y.) for their efforts to advance comprehensive immigration reform.

"We are pleased that the bill would create a fair, efficient and workable employee verification system that preserves the direct employer-employee relationship and the current knowing liability standard so that employers may easily understand their role and obligations. We also appreciate that the measure contains strong protections for employers against prosecution and penalties when acting in good faith and also includes provisions to make the system workable for our nation's small businesses.

"This bipartisan Senate bill represents a responsible solution to bringing the current undocumented population out of the shadows, and NAHB also welcomes the work that has been done to create a new visa program for the low-skill sector. However, we need to improve the size and scope of this program, and NAHB looks forward to working with the U.S. Senate to improve the bill as the legislative process advances."

Housing Starts Rise on Strength in Multifamily in March

NAHB Press Release

WASHINGTON, April 16 - Soaring production of multifamily apartments pushed nationwide housing starts beyond the million-unit mark for the first time since 2008 in March, according to newly released figures from HUD and the U.S. Census Bureau. The data show that total starts activity rose 7.0 percent for the month due entirely to a 31.1 percent increase on the multifamily side, while single-family production slipped 4.8 percent from a number that was revised strongly upward for the previous month.

"Today's report is a reflection of the solid demand that many areas are seeing for rental apartments as young people take that first step into the housing market, which is a very positive development," noted Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "The numbers are also in keeping with our latest surveys that show single-family builders are experiencing some difficulties in keeping up with rising demand for new homes due to increasing construction costs and other factors."

Calling the latest data a "mixed bag" due to the opposite direction of single- and multifamily starts and a somewhat weaker amount of permit issuance, NAHB Chief Economist David Crowe said that nevertheless, the numbers indicate "a continuation of the slow, methodical march forward" that characterizes the housing recovery. He also noted that "The three-month moving average for single-family starts remained unchanged at 628,000 units in March - which is right on pace with NAHB's forecast for a 25 percent gain in new-home production in 2013."

While single-family starts declined 4.8 percent to a seasonally adjusted annual rate of 619,000 units in March, this was entirely due to a substantial upward revision to the previous month's data, without which virtually no change would have been recorded. At the same time, multifamily housing starts surged 31.1 percent to a seasonally adjusted annual rate of 417,000 units - their fastest pace since January 2006.

Three out of four regions posted gains in combined single- and multifamily housing production in March, with the Midwest registering a 9.6 percent increase, the South posting a 10.9 percent gain and the West noting a 2.7 percent rise. The Northeast was the lone exception to the rule, with a 5.8 percent decline.

Following a large gain in the previous month, total permit issuance fell 3.9 percent to a 902,000-unit rate in March. That decline reflected a 0.5 percent reduction to 595,000 units on the single-family side and a 10 percent reduction to 307,000 units on the multifamily side.

In contrast to the regional starts report, the Northeast was the only part of the country to post a gain in permitting activity in March, with a 24.7 percent increase to 101,000 units. Meanwhile, the Midwest, South and West posted declines of 2.1 percent, 6.2 percent and 10.4 percent, respectively.

Rising Costs Put Squeeze on Builder Confidence in April

NAHB Press Release

WASHINGTON, April 15 - Facing increasing costs for building materials and rising concerns about the supply of developed lots and labor, builders registered less confidence in the market for newly built, single-family homes in April, with a two-point drop to 42 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

"Many builders are expressing frustration over being unable to respond to the rising demand for new homes due to difficulties in obtaining construction credit, overly restrictive mortgage lending rules and construction costs that are increasing at a faster pace than appraised values," said Rick Judson, National Association of Home Builders (NAHB) Chairman and a home builder from Charlotte, N.C. "While sales conditions are generally improving, these challenges are holding back new building and job creation."

"Supply chains for building materials, developed lots and skilled workers will take some time to re-establish themselves following the recession, and in the meantime builders are feeling squeezed by higher costs and limited availability issues," explained NAHB Chief Economist David Crowe. "That said, builders' outlook for the next six months has improved due to the low inventory of for-sale homes, rock bottom mortgage rates and rising consumer confidence."

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

While the HMI component gauging current sales conditions declined two points to 45 and the component gauging buyer traffic declined four points to 30 in April, the component gauging sales expectations in the next six months posted a three-point gain to 53 - its highest level since February of 2007.

Looking at three-month moving averages for regional HMI scores, the Northeast was unchanged at 38 in April while the Midwest registered a two-point decline to 45, the South registered a four-point decline to 42 and the West posted a three-point decline to 55.

Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

Springtime Home Organization Tips

By: Karen T. Nakamura, CEO
Building Industry Association of Hawaii

Spring has finally arrived, and it’s time to start spring cleaning and evaluate and organize your storage needs. The first thing you should do is make a list of everything you want to store. This list will both help you determine how much storage space you need and ensure that nothing gets lost once you start putting things away.

Shelving is one of the easiest ways to create more storage. It can be portable in the form of free-standing units, or permanent that is attached to your walls. Easy-to-install, heavy-duty shelving can be purchased at just about any major home supply store. Many of these units are designed so that you can leave as much room between the shelves as you like, making it easy to get larger and smaller items onto the same unit and saving you space.

Heavy winter clothing can take up lots of closet space, leaving you with little room for your entire wardrobe. One solution for storing out-of-season clothing is under the bed. Under-the-bed storage containers come in a variety of sizes and styles, including ones with wheels for easy access and to protect hardwood floors from scratches when you pull them out. You can also buy simple risers that elevate your bed off the floor additional inches to create even more space.

Garage storage has also gotten much more efficient. You can get built- in storage cabinets with doors so the space looks clean and orderly. There are also modular systems that enable you to choose what features are best for your needs; including hanging racks for sports equipment, hooks for tools, and more. Most garages have pitched roofs to keep rainwater from collecting on top, and this space is ideal for items you don’t use on a daily or weekly basis. Store them on platforms or racks that lower and raise either electronically at the touch of a button, or with an easy-to-use pulley system.

In newer or renovated homes, a mudroom or drop zone is a very popular feature. This area often has built- in benches, hooks and bins to neatly tuck away boots, jackets, gardening equipment and other items your family uses frequently. Another common feature is storage and charging stations for the modern family’s cell phones, tablets and other electronic equipment.

For more information about home maintenance or design trends, visit nahb.org/forconsumers or contact biahawaii.org

April 10 GMM: DPP Projects and New Planning & Permitting Initiatives

BIA General Membership Meeting - April 10, 2013

Guest Speaker - George Atta, Director Designate, Dept. of Planning & Permitting

On Wednesday, April 10, 2013, George Atta, Director Designate of the Dept. of Planning & Permitting, gave an informative presentation on"Highlights of pending projects and descriptions of new planning and permitting initiatives under the Caldwell Administration".

View the powerpoint presentation here (member login required)

(L to R): Greg Thielen, 2013 BIA President; Mike Brant; Brian Adachi; George Atta, Director Designate, DPP; Dean Uchida, David Brotchie, Gary Yee

 

Mahalo to our Table Top Sponsors

D.R. Horton Schuler Homes - Cis George, Mary Flood & Lorna Lowe

Hawaii Steel Alliance - Alex & Bobbie Kane

Insolid - Gary Sufrin

Island Cooling, LLC - Al & Ivan Whitworth

Risource Energy Renewable Systems - Charles Lum, Darren Furumoto & Jennifer Kimura

simplicity HR by Altres - Jennifer Snowden & Stephen Hanson

Wealth Strategy Partners - Marko Mijuskovic & Samantha Haas

Rep. Hastings' Bill Would Keep Forests Healthy, Boost Timber Production

WASHINGTON, April 11 - The National Association of Home Builders (NAHB) today urged Congress to support draft legislation unveiled by House Resources Committee Chairman Doc Hastings (R-Wash.) that  would require the U.S. Forest Service to actively manage its commercial forest lands and increase timber production on federal lands, thereby helping to ease lumber price volatility and keep the nation's forests healthy.

"The Restoring Healthy Forests for Healthy Communities Act would encourage increased production on federal timber lands, while at the same time remain mindful of important environmental considerations," said Justin Wood, vice president of construction for Fish Construction NW Inc., based in Portland, Ore. "This legislation will go a long way toward helping rebuild the supply chain and reviving local mills and timber companies, while ensuring the continued recovery of the housing industry."

Testifying on behalf of NAHB before the House Natural Resources Subcommittee on Public Lands and Environmental Regulation, Wood said that the legislation would benefit rural communities and boost harvesting on federal lands by requiring the federal government to implement active forest management plans.

"I live in Vancouver, Washington, which is approximately 10 miles from the Gifford Pinchot National Forest," he said. "In our wooded rural neighborhood, the county encourages land owners to remove dead and diseased trees, including dead undergrowth, to reduce the risk of forest fires. It is confusing to the residents of the area that we follow these recommendations, while the policies are not implemented in the federal forest just a few miles away."

With lumber one of the most volatile-priced building materials and a major component in home construction, Wood also pointed out that proper federal forest management policies are tied to affordable housing.

NAHB research shows lumber and wood products account for 15 percent of the cost of construction for a single-family house. Lumber prices soared as the housing recovery gained momentum in 2012. For example, prices of oriented strand board, an engineered wood product, are up 92 percent since last April. Framing lumber is also seeing price increases upward of 28 percent.

These higher costs drive up the cost of construction, which in turn, drives up the price of a new home. This is of particular concern in the affordable housing sector, where relatively small price increases can have an immediate impact on low- to moderate-income home buyers.

"NAHB research shows that for every $1,000 price increase for a median priced new home, over 232,000 households can no longer afford that home," said Wood.

Another factor fueling rising lumber prices is that global demand is also up, especially in China, and U.S. exports have doubled in the last five years. There will be additional upward pressure on lumber prices as the housing industry recovers unless additional supply can be brought into the market.

"Federal forests supply a mere 2 percent of the wood used by the forest products industry, and it is important for Congress to take a deep look into what barriers the Administration is facing in pursuit of increased harvesting on federal lands," said Wood. "Chairman Hastings' bill would ease escalating price pressures, allow responsible timber production to occur on federal lands, protect the environment and help keep housing affordable for hard-working families."

FHA Reform Efforts Must Ensure Borrowers Have Access to Affordable Home Loans

WASHINGTON, April 10 - With tight mortgage lending standards preventing well-qualified home buyers from obtaining home loans and impeding the housing and economic recovery, the National Association of Home Builders (NAHB) today expressed support for congressional efforts to reform the Federal Housing Administration (FHA) but urged lawmakers to proceed in a cautious manner to avoid any disruptions to the nation's housing finance system.

Testifying before the House Financial Services Subcommittee on Housing and Insurance, NAHB First Vice Chairman Kevin Kelly, a builder and developer from Wilmington, Del., pointed out the vital role that FHA played to help the housing sector emerge from its worst downturn since the Great Depression.

"While there is no doubt that the housing finance system needs to be reformed, the contributions that the FHA made during the economic downturn underscore the need for a government backstop for both the primary and secondary mortgage markets," said Kelly. "In times of crisis, private sources of mortgage credit have been unable or unwilling to meet housing capital needs."

Without government support for home purchasing and refinancing, Kelly warned lawmakers that the nation's mortgage markets "will grind to a halt in times of economic stress and uncertainty."

In 2006 before the housing downturn hit, FHA's share of the market was a meager 3 percent as private financial institutions boasted a healthy presence. When the housing downturn hit, there was a role reversal, as private players fled the market and FHA-insured mortgages became the only credit option for first-time home buyers, minorities and those with limited downpayment capabilities.

"This dramatic shift is evidence that FHA is performing its mission of providing the federal backstop to ensure that every creditworthy American has access to a stable mortgage product," said Kelly. "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."

Noting that the Federal Reserve and leading economists have warned that overly restrictive underwriting requirements are preventing creditworthy borrowers from accessing mortgage credit, Kelly called on lawmakers to take a long-term, holistic approach to housing finance reform.

"Changes to FHA's programs cannot be separated from the larger discussion of reforming the complex housing finance system, including future reforms to Fannie Mae and Freddie Mac," he said. "NAHB urges Congress to proceed cautiously and not to significantly alter the role of FHA programs."

"Housing has led America out of every economic downturn and can do so again if the future policies regarding housing finance reforms are addressed in a manner that provides liquidity for the entire housing sector," he added.

ACTION Requested on HB 634 HD1 SD2 - Employment

The above bill is VERY BAD for business, as it would provide "job security" for employees who work for a company that has been bought by a new owner. Hawaii does not have a reputation of being business friendly; this bill would make the business climate significantly worse and deter investment.

This bill requires that purchasers of a business in Hawaii will have to keep all existing non-management employees. While a few exceptions are included, this bill goes too far in private business matters. It will hurt any businesses who want to sell their business at market value and help their employees.Many potential buyers will be weary of buying a business in Hawaii or investing as a majority owner and providing much needed capital to that business. The opposite will result--if businesses are unable to sell their business, then they will close shop and their employees will not have jobs.

Please help and act now. Hawaii will be the only state in the nation with this law, which will again label us as a bad place to do business and invest. Whether you plan to sell or not, have 5 employees or 100 employees, the business community must stand together on this issue. Even if this bill does not affect you, it may affect one of your clients and is just bad for our business.

The full Senate will be voting on this measure on the floor tomorrow (April 9, 2013). Please email your request to VOTE NO on this bill to: sens@capitol.hawaii.gov.

Thank you for your help.

2013 BIA-Hawaii Remodel It Right, Remodel It Green Expo - Call for Exhibitors

The Building Industry Association of Hawaii (BIA-Hawaii) will present the 9th Annual Remodel It Right/ Remodel It Green Expo on Friday, August 9 through Sunday, August 11 at the Neal Blaisdell Exhibition Hall. Over 200 exhibitor booths will showcase Hawaii’s top contractors, suppliers, building industry experts and associates. Interested companies are welcome to contact BIA-Hawaii to participate in this convenient central location showcase of remodeling industry expertise. The event theme, “Remodel It Right, Remodel It Green”, will enlighten and educate homeowners on the latest products, services and trends in energy savings and sustainable living.

 

"Meet the Experts"

Unique features of this award winning Expo include the “Meet the Experts” presentations that provide on-going round table interactive discussions from the entire spectrum of the remodeling industry and the “Remodel It Right” Panel of Experts. These in-depth round table discussions will cover key topics that will provide a strong foundation for your remodeling project. Architecture, General Contracting, Contractor Licensing, Permitting Guidelines and Kitchen and Bathroom Remodeling Basics are all offered in the “Meet the Experts” area. A Free Remodeling Planning Kit will be offered to every family attending the sessions, while supplies last.

Companies interested in becoming exhibitors in the August 9-11, 2013 BIA Remodel It Right/ Remodel It Green Expo at the Blaisdell may contact Clarice Watanabe at (808) 629-7503 or email ckw@biahawaii.org for additional information.

Anthony "Tony" Borge approved to be a member of the Small Business Regulatory Review Board

BIA member, Anthony "Tony" Borge, of RMA Sales, Inc., was nominated by Governor Abercrombie and approved to be a member of the Small Business Regulatory Review Board ("SBRRB") by the Senate Committee on Economic Development, Government Operation, and Housing on March 13, 2013.

The SBRRB was established in 1998 and is responsible for reviewing impacts on administrative rules and regulations on small businesses. The SBRRB is comprised of nine members, most of whom are former or current owners or officers of small businesses Statewide. Members serve on a volunteer basis, and are charged with considering any request from small business owners for review of any state or county administrative rule. The full Senate will be confirming Tony within a few weeks.

Congratulations, Tony!

Number of Improving Housing Markets Holding Steady in April

NAHB Press Release

WASHINGTON, April 4 – Following seven consecutive months of gains, the list of improving U.S. housing markets remained virtually unchanged in April, with 273 metros on the National Association of Home Builders/First American Improving Markets Index (IMI), released today. This total reflects a net reduction of one market since March and again includes entrants from all 50 states and the District of Columbia.

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Five new markets were added to the list and six markets were dropped from it this month. Newcomers included the geographically diverse locations of Macon, Ga.; Portland, Maine; Rocky Mount, N.C.; Eugene, Ore.; and Jackson, Tenn.

“The stability in the improving markets list this month is encouraging, with three quarters of all metros tracked by our index considered on the upswing as the housing recovery spreads to parts of every state,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “In some markets, the main thing that’s holding back a recovery is a relatively thin inventory of homes for sale, which could be resolved if builders had easier access to credit for building homes and putting people back to work.”

“After a strong run-up through late 2012 and early 2013, the number of improving markets is holding steady at a high level,” said NAHB Chief Economist David Crowe. “We can expect to see more gradual gains going forward as challenges related to increased demand kick in – including everything from tightened supplies of developable lots and labor to the rising cost of building materials.”

“With 75 percent of the country seeing measurable improvement in housing market conditions, the outlook is definitely brightening for local economies this spring,” noted Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

A complete list of all 273 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in April, is available at www.nahb.org/imi.