This “Top 10” list highlights the most important NAHB actions benefiting our members from the past month.
August, 2011
1. In a victory for NAHB Remodelers, the EPA has rejected a proposal to add third-party clearance testing to the Lead: Renovation, Repair and Painting Rule.
Currently, the lead rule applies to homes built prior to 1978 and requires renovators and their firms to be certified in EPA's lead-safe practices, perform so-called "visual clearance" following renovation work, and comply with EPA record-keeping requirements. The proposal that EPA rejected this July would have required contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited
lab for lead testing -- at a cost of more than $260 per room. By EPA's own estimates, the annual cost of this rule to the remodeling industry would have been more than $400 million.
The cost considerations, as well as the waiting period for test results and the limited number of accredited labs nationwide, made professional remodelers very concerned about home owners' willingness to undergo the process. NAHB Remodelers Council members and staff met repeatedly with both EPA officials and representatives from the Office of Management and Budget to express these concerns and urge the agency to reconsider the proposed regulation.
Strong Congressional support for this has come from Sen. James Inhofe (R-Okla.) and Reps. Denny Rehberg (R-Mont.) and Bob Latta (R-Ohio). And with NAHB's urging, the regulation was accepted for review per a Presidential Executive Order aimed at reducing the impacts of federal rules on small business and job creation. Thankfully, this review has resulted in the right outcome for remodelers and their customers.
Contact: Matt Watkins (800-368-5242, x8327)
2. With strong NAHB support, the House Appropriations Committee has approved a key amendment offered by Rep. Denny Rehberg (R-Mont.) that would cut funding for EPA enforcement of the lead paint rule until that agency approves an appropriate “test kit” for ascertaining the presence of lead paint.
Responding to concerns from NAHB Remodelers, affiliated trade groups and other contractors in his home state and the rest of the country, Rep. Rehberg is putting additional pressure on the Environmental Protection Agency to make much-needed improvements to the Lead: Repair, Renovation and Painting rule. On July 12, he offered an amendment to the Interior Department's appropriations bill that would restrict funding for EPA enforcement activities related to the rule until the agency approves a test kit that meets the “false positive” and “false negative” criteria stated in the regulation.
The night before this amendment was introduced, NAHB sent out a special alert to our members whose congressional representatives sit on the Appropriations Committee, asking them to immediately contact their lawmakers and urge their support for it. NAHB also organized a joint letter of support to the Appropriations Committee from a coalition of 24 stakeholders including the Associated General Contractors of America, Hearth, Patio & Barbecue Association, National Association of Realtors® and the National Association of the
Remodeling Industry. Our members responded immediately by calling and emailing their representatives' offices, and as a result, the amendment was passed by voice vote on July 13, 2011.
Although the measure must be approved by the full House and Senate before it goes to the president’s desk, this latest advancement marks a great step forward for NAHB's efforts to seek common-sense answers about the rule, which applies to homes built before 1978.
It's also a testament to the effectiveness of our remodeler members, who’s swift response to NAHB's alert certainly contributed to its passage by the committee.
Contact: Elizabeth Odina (800-368-5242, x8570)
3. NAHB has challenged the EPA’s Chesapeake Bay Total Maximum Daily Load (TMDL) rule for violating fundamental procedural requirements and lacking a sound scientific basis, and has asked the U.S. District Court for the Middle District of Pennsylvania to block its implementation.
The TMDL could lead to onerous restrictions on new development in the bay’s watershed, comprised of 64,000 square miles in Maryland, Virginia, West Virginia, Pennsylvania, Delaware, New York and the District of Columbia.
NAHB joined in litigation that was previously initiated by the American Farm Bureau Federation. NAHB’s complaint notes that the 45-day comment period on the proposed rule was not sufficient, given the size and complexity of the rule. According to Tom Ward, NAHB Vice President for litigation and legal services, "Home builders have been working with the EPA for several years to identify and implement best management practices (BMPs) that are cost-effective and reduce sediment runoff into the bay. These practices are helping to reduce impacts on bay resources. The EPA should give these practices time to work before it pushes through costly new regulations."
For more, contact Tom Ward at 800-368-5242, x8230.
4. NAHB Senior Officers Bob Nielsen, Barry Rutenberg, Rick Judson and Kevin Kelly met with HUD Secretary Shaun Donovan on July 6 to discuss a broad range of topics of importance to our members.
The agenda included administration initiatives to tie housing development to transportation and energy considerations, the future of the housing finance system, Qualified Residential
Mortgages (QRMs), FHA loan limit and underwriting changes, and the HOME Investment Partnerships program.
The dialogue was constructive and NAHB had the opportunity to provide information on our positions and concerns. We also provided detailed information on the National Green Building Standard. The Senior Officers further reported on this discussion during NAHB's Executive Board meeting the following week.
Contact: David Ledford (800-368-5242, x8265).
5. As the negotiating deadline for increasing the nation’s debt ceiling loomed over the past several weeks, NAHB economists outlined some of the key issues pertaining to the housing industry as part of this debate in our Eye on Housing Blog.
Our experts advised members that it is important to keep in mind the housing market impacts that could occur due to some of the possible outcomes that were being discussed in Washington – and what might happen if the debt ceiling were not raised in time to prevent a U.S. government default.
They noted that the U.S. government is currently one of 18 countries that have a top-tier, AAA debt rating. Loss of the rating would have multiple negative economic consequences. It would reduce demand for U.S. Treasuries, which would lower bond prices and increase interest rates. Higher risk, non-government debt could also be sold off as investors seek to maintain a certain average credit rating of owned assets.
Pension and money market funds in particular may need to reduce their holdings due to a loss of the AAA rating. In turn, higher interest rates for U.S. government debt could increase long-run government expenditures by increasing interest expense, making the long-run fiscal challenges worse. Given that many interest rates are pegged to Treasury rates as a matter of market practice, these impacts could certainly increase interest rates for home mortgages, auto loans and other consumer durables and business loans.
Along with weaker macroeconomic variables, an increase in mortgage rates would further weaken housing demand and place downward pressure on prices. Of course, the primary effect of a default or downgrade would be increased uncertainty. Our economists pointed out that home buyers are purchasing a capital asset that they will own, on average, for ten years. Given other sources of uncertainty, particularly from the labor market, the largest impact from a failure to reach a deal that increases the debt ceiling would be to further increase concern and anxiety of families attempting to make long-term economic decisions.
And as we have seen, weakness in housing markets can easily produce a vicious cycle whereby housing price declines reduce household wealth, which reduces consumption, business growth, and job creation, further weakening housing demand and placing more downward pressure on housing prices. Read more on this subject and other breaking economic news at
http://eyeonhousing.wordpress.com
contact Rob Dietz at (800-368-5242, x8285)
6. A newly published NAHB study confirms that home building continues to be one of the most regulated industries on earth, and should be a valuable tool in upcoming policy discussions.
NAHB's study, “How Government Regulation Affects the Price of a New Home,” indicates that, on average, regulations imposed by government at all levels account for 25% of the final price of a new single-family home built for sale. Nearly two-thirds of this -- about 16.4% of the final house price -- is tied to higher costs associated with the finished lot due to regulations imposed during the lot’s development. A little over one-third -- 8.6% of the house price – is the result of costs incurred by the builder after purchasing the finished lot. The study points out that the relatively high share of regulatory costs affecting a home during its development are particularly significant in the current environment, when there is a low level of developed land in the pipeline. Thus, in most cases the full range of regulatory costs—those that fall on development as well as construction—will need to be overcome if production and employment in the housing industry are to get back on track.
For more, contact study author Paul Emrath at 800-368-5242, x8449.
7. NAHB Third Vice Chairman Kevin Kelly pitched in at a recent press conference held by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) in which the lawmakers introduced key legislation for reforming the nation’s housing finance system.
Speaking for the nation's home builders, Kevin said that NAHB is pleased that the legislation, H.R. 2413, would provide an appropriate federal role to help maintain a healthy mortgage market.
Absent this important role, private lenders would increase interest rates and fees on all types of available financing, including financing for affordable rental housing, Kevin said. And the 30-year, fixed-rate mortgage would become increasingly scarce and much more costly. "We view this bill as a great start as Congress debates the future role of Fannie Mae and Freddie Mac and how to bolster the U.S. housing finance system," Kevin said. "We look forward to working with Reps. Miller and McCarthy and lawmakers on both sides of the political aisle to advance the legislative process and produce a final bill that will ensure liquidity and stability for homeownership and rental housing."
Contact: Scott Meyer (800-368-5242, x8144)
8. NAHB filed official comments on July 22 on proposed regulations concerning so called
“Qualified Mortgages.”
Our latest round of comments pertained to the Federal Reserve Board’s proposed regulations implementing statutory changes made by the Dodd-Frank Act that expand the scope of the borrower ability-to-repay requirement to cover any consumer credit transaction secured by a dwelling. NAHB urged the regulators to establish a bright-line safe harbor to define the QM to best ensure safer, well documented and underwritten loans without limiting the availability or increasing the costs of credit to borrowers. NAHB supports a QM safe harbor definition that promotes liquidity by providing consumers stronger protections than currently proposed by the board and that provides lenders definitive lending criteria that reduce excessive litigation exposure. The responsibility of issuing a final rule has been transferred to the new Consumer Financial Protection Bureau, which officially opened for business on July 21.
Contact: Steve Linville (800-368-5242, x8597).
9. On July 20, NAHB’s Housing Finance Committee provided a free webinar to our
members that was focused on AD&C financing issues and ways to obtain construction
credit.
To help our members deal with the evolving environment for construction and project financing, NAHB offered yet another free webinar this month in which housing finance experts dealt with topics touching on alternative sources of funding; how new rules and regulations will affect traditional lender-builder relationships; and how builders can help potential customers take advantage of new incentives.
To obtain a full replay of this webinar, contact NAHB’s Office of the Registrar at 800-368-5242, x8338. For more information on AD&C resources, contact: Kimberly Moore, 800-368-5242, x8529.
10. In the interest of avoiding unnecessary injuries on the worksite, NAHB and OSHA have created a special “safety card” that explains the proper use of power nailers and nail guns.
According to OSHA, about 20,000 workers are injured each year while using these tools. Available in both English and Spanish, the “Power Nailer Safety Card” is available as a free download from NAHB's website.
It is the product of the NAHB-OSHA Alliance, which provides NAHB members and other residential construction professionals with information, training opportunities and guidance that can help them protect their employees' health and safety. NAHB worked closely with the International Staple, Nail and Tool Association and OSHA to create the new safety card and ensure that it provides the best possible information. Additional safety cards are available on the subjects of trenching and silica safety awareness. Going forward, the NAHB-OSHA Alliance plans to continue producing safety cards on a variety of construction safety topics — including ladder and scaffold safety and task-specific hazards such as roofing and framing operations. For more information, contact Marcus Odorizzi at (800)368-5242, x8590.
