Editor's note: Here is a recent note that president Kurt Dinnes sent to the members of the Central Oklahoma Home Builders Association. Quality information!
It has been an amazing week here in Washington DC. What an honor it was to represent you and our great association at The National Association of Home Builders (NAHB) Spring Board Meeting.
Each year during these meetings, a legislative day is planned. This allows NAHB board members, local HBA leaders and interested members an organized opportunity to meet with US Senators and Congressmen representing their respective states. According to the NAHB leadership, this year's Legislative Day made a very positive impact on lawmakers with respect to important NAHB initiatives on Capitol Hill.
This was my first time to walk the hallowed halls of the Senate and the House of Representatives, meeting with our Oklahoma elected leaders. From the Senate, we had the privilege to meet with Senators Jim Inhofe and Tom Coburn. On the Congressional side we met with Congressman Tom Cole, James Lankford, Dan Boren, John Sullivan and Frank Lucas' Legislative Assistant, Larry Calhoun.
Having this opportunity to deliver our message, with respect to a number of key issues that affect our industry, as well as letting them know first-hand how our industry is doing back home, was very gratifying. Furthermore, it was a great opportunity to show our appreciation for their support of laws that positively affected the home building industry.
The following is a very brief idea of some of the main issues that we addressed; knowing that the current credit and lending crisis still looms over our industry, we asked that our senate members co-sponsor S. 2078, the Home Building Lending Improvement Act of 2012, introduced by Senator Robert Menendez of NJ. We also asked our Members of the House of Representatives to co-sponsor H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011.
In short, these bills ask that banking regulators issue new guidelines and re-vamp existing guidelines regarding policy and lending, allowing the availability of much needed capital for production loans involving land acquisitions, land developments and new home construction.
In an effort to keep the money available for responsible mortgage lending, we asked for strong support for the passage of comprehensive GSE reform legislation that seeks to ensure that the Federal Government will continue to provide a backstop for a reliable and adequate flow of affordable housing credit in all economic and financial conditions. This includes the idea that Fannie Mae and Freddie Mac should be gradually phased into a private-sector-oriented system, where the Federal Government's backing is explicit but its exposure is limited.
With respect to tax reform, specifically the preservation of the mortgage interest deduction, we asked that our representatives oppose any changes to the tax code that would increase taxes on homeowners, renters, or homebuilders and to co-sponsor H. R. 25, introduced by Representative Gary Miller, expressing the sense of Congress that the mortgage interest deduction should not be further restricted.
We also felt it was important to encourage the amending of the EPA's Lead-Based Paint Rule by the reintroduction of the opt-out provision. In 2010, the EPA removed the opt-out provision which in effect added an estimate of more than 335 million dollars per year in compliance costs.
We further encouraged that S. 2148, the Lead Exposure Reduction Amendments Act of 2012, introduced by our own Jim Inhofe be co-sponsored. On that same note, on the House side, HR 5911 Lead Based Paint Opt-Out Bill was introduced while we where in Washington DC. As you can see, the Legislative Day was an enlightening experience that I was honored to been a part of.
The Area 11 Caucus meeting led by our fellow Oklahoman, Phil Reese, provided a good deal of insight as to how other states within our area are doing. The long and short of the reports by the State Representatives was that it seemed, for the most part, that there is increased building activity, slightly lower unemployment, and a sense that things are slowly getting better.
The NAHB Board meeting was, as NAHB Board meetings go, a rather short 4 and 1/2 hour meeting. The new NAHB Chairman, Barry Rutenberg's opening remarks showed signs of cautious optimism. Rutenberg stated that the efforts of the NAHB to keep housing in the forefront of the national economic recovery seem to be showing results. The NAHB recognizes that there are still many factors slowing the housing recovery and there is much work that needs to be done on the Hill. Appraisals and forclosures are still making the recovery difficult, as well as the fact that housing finance must be available, and overreaching regulation must continue to be addressed, according to Rutenberg. In addition to current initiatives, the NAHB has joined 32 other advocacy organizations to encourage a clear and concise set of lending requirements for mortgage loans. With these added alliances, the NAHB anticipates making significant progress on the Hill.
Rutenberg further reiterated the fact that residential construction is one of the most heavily regulated industries. Housing regulations now make as much as 25% of the cost of an average American home. The NAHB announced it is working with the International Code Council ( ICC ) as they are developing the newest IRC for 2015. As a part of the NAHB work, the NAHB is monitoring excessive and unnecessary codes. Rutenberg summarized by saying, home ownership is a core value in our electoral process and must remain a national priority.
David Crow, the NAHB economist's remarks were admittedly not much different from his January report at IBS. Here are some of his main observations;
- Housing does seem to be improving;
- Home sales slightly up;
- Still projecting a stronger increase in new home sales in 2013;
- Multi family showing 55% increase in new permits;
- Remodeling remains strong;
- Renters have seen major growth and the net growth in new home ownership remains at 0, (one reason is young adults choosing to remain or moved back home);
-�Jobs are growing at a much slower rate and the overall earning rate is�about 3% to 4% down;
- Credit standards for loans and overall credit availability remains tight;
- About 50% of loans are being denied with credit scores as high as, 730.
Crow, also cited policy uncertainties that loom over our national economic recover that certainly affect home buyers such as;
Dodd-Frank Law (going into effect at the end of this year)
-what are the requirements of a mortgage?
-what will the safe harbor be for mortgages?
-mortgage deductions under attack
-marginal tax rate changes
-less government spending
-reduced tax breaks
- uncertainty of our leadership
Now, with that being said, Crow has Oklahoma as one of the top ten states leading the country with respect to the housing recovery. Oklahoma shows being at 70% of what is considered normal housing production for our state and that housing prices are back to the 2006 or at our peak, and that is, GREAT NEWS!
I took away many valuable observations this week about how our government works, but if I had to pick the most important one it would be this: our association membership is absolutely the grass roots for governmental policies concerning the home building industry. The portion of our dues that goes to our local, state and national associations and the related advocacy efforts can simply not be overstated. Those dollars are very well spent! Although association membership dollars are a great start, more is needed to keep the home building advocacy efforts effective. Having said that, I have also seen first-hand how our Build-PAC contributions make a difference in Washington. Among other things, those dollars provide us the opportunity to get face-to-face with our leaders, making or changing policies and laws that affect our home building industry. I have heard it said many times during this trip that the Build-PAC dollars are the grease that turns the wheels here in Washington. After experiencing and seeing first hand what a difference those Build-PAC dollars make, I personally have decided to increase my annual contribution to Build-PAC and I would encurage you to do the same. Build-PAC works!
Once again, this was a truly amazing week. What an honor it was to have the opportunity to represent you and COHBA this week in Washington DC.
Central Oklahoma Home Builders Association