DATE: February 12, 2014
TO: NAHB Members
FROM: Kevin Kelly, 2014 NAHB Chairman
When I took the oath as your 2014 chairman at last week’s International Builders’ Show, I also pledged to highlight the value proposition of NAHB and what your national association is doing to create a better business environment for all those involved in the residential construction sector.
Along these lines, I am pleased to report two early legislative victories on the Farm Bill and flood insurance that will benefit home buyers, home builders and remodelers.
The Farm Bill
Congress passed a Farm Bill that includes an important provision championed by NAHB that will help members living and working in rural areas across the nation. President Obama signed the bill into law on Feb. 7.
The legislation allows more than 900 communities nationwide to retain their status as “rural” areas where residents have access to important rural housing programs that help low- and very-low income households obtain homeownership or suitable rental housing. This will enable millions of Americans to maintain access to critical rural housing programs.
NAHB estimates that in 2014 alone, this will generate $1.2 billion more investment in housing in these areas, including construction of new single-family and multifamily homes and remodeling. Breaking this down even further, it means that each of these 900-plus communities will receive on average an additional $1.3 million in economic activity this year in the form of loans and grants for new construction and remodeling.
The U.S. Department of Agriculture (USDA) redraws its maps defining rural areas following every census, and the maps drawn after the 2010 census would have removed these communities from the program due to their population.
NAHB’s action to insert the rural housing provision into the Farm Bill provides a long-term solution because the legislation keeps the current maps and extends the population definition for these rural areas to 35,000 until after the 2020 census.
One NAHB member summed up the legislation this way: “The Farm Bill alone will keep many small builders in business.”
A Flood Insurance Fix
The Senate on Jan. 30 approved the Homeowner Flood Insurance Affordability Act (S. 1926), legislation championed by NAHB that would provide relief from soaring flood insurance premium rates for countless home owners across the nation. The measure also contains an amendment by Sen. Roy Blunt (R-Mo.) that is critical to the health of the remodeling industry.
The Homeowner Flood Insurance Affordability Act would:
* Delay insurance rate increase for all primary residences until an affordability study is completed.
* Require that the Federal Emergency Management Agency (FEMA) take into account all local flood control structures while mapping.
* Allow consumers to appeal FEMA’s mapping decisions and to be reimbursed for their appeal expenses.
* Reinstates an exemption in 53 communities nationwide for basements that are built a certain way.
Sen. Blunt’s amendment would return the “substantial improvement threshold” that triggers a higher flood insurance rate to the historic 50 percent level of a structure’s fair market value, which is important for many remodelers across the nation.
When the threshold was lowered to 30 percent under the Biggert-Waters Flood Insurance Reform Act, it acted as a potential disincentive for home owners to hire remodelers, as even the simplest of remodeling jobs, like installing new appliances or updating bathrooms or kitchens, could have resulted in many homes reaching the 30 percent threshold and triggering higher premium rates. NAHB estimates that returning the threshold to the 50 percent level could preserve as much as $8.5 billion in annual remodeling economic activity.
NAHB is now working hard to get flood insurance legislation passed in the House.
A Three-Year Battle
These legislative victories do not appear out of thin air. They are the result of long, hard work by NAHB and its grassroots.
NAHB has been working on the Farm Bill issue for three years — ever since it was brought to the association’s attention in early 2011 by members from Kentucky and several other states.
On the regulatory side, NAHB was able to delay the release of revised USDA maps.
In the legislative arena, NAHB worked with several members of Congress to move various pieces of legislation forward, including appropriations, a stand-alone 10-year bill, and ultimately, this Farm Bill fix.
Further, NAHB put the power of its grassroots to work, contacting members of Congress and telling them how important it is for these 900 communities to retain their rural status.
The Farm Bill is a great victory for NAHB, and a great example of how the federation works together to address important issues.
Taking the Lead on Flood Insurance
The same type of persistence that NAHB exhibited with the Farm Bill helped us to achieve victory in the Senate on flood insurance.
Implementation last year of the Biggert-Waters Flood Insurance Reform Act created serious affordability concerns due to significant increases in flood insurance premiums.
There are also concerns related to remapping of the Flood Insurance Rate Maps. If not corrected, these issues will severely impact the sale and construction of new homes and remodeling in many communities across the nation.
NAHB has been a leader in moving this issue forward, and worked with lawmakers last fall to introduce bipartisan legislation – the Homeowner Flood Insurance Affordability Act – in the House by Reps. Michael Grimm (R-N.Y.) and Maxine Waters (D-Calif.) and in the Senate by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.)
2012 NAHB Chairman Barry Rutenberg later testified about the association’s concerns over the Biggert-Waters Flood Insurance Reform Act before the House Financial Services Subcommittee on Housing and Insurance, and NAHB issued an alert to members to go to BuilderLink and urge their members of Congress to support this legislation.
NAHB’s pro-active leadership was a critical factor in getting this legislation through the Senate, and we will be redoubling our efforts in the House.
While we are off to a great start, there is still much work ahead of us in the year ahead. It is my solemn pledge that the Senior Officer team and the entire staff at NAHB remain 100 percent committed to do our best to serve the needs of our members by providing top-notch educational and networking opportunities and fighting for you day in and day out on the issues that impact your day-to-day business operations.