The White House on Monday released a Housing Development Toolkit that highlights regulatory barriers to housing development and outlines tools and strategies that local governments can use to diminish the impact these barriers have on housing production and affordability.
The President’s FY2017 HUD budget includes a $300 million proposal for Local Housing Policy Grants to help facilitate the modernization of its recipients’ housing regulatory approaches.
These tools and strategies include:
NAHB has long embraced a move toward fewer regulatory roadblocks and more efficient development processes. Inefficiency costs developers and builders time and money, hurts housing affordability and availability, increases government offices’ administrative costs, and stifles economic growth.
NAHB recently released a report—Development Process Efficiency: Cutting through the Red Tape—which offers examples of developers, builders, land use officials and other stakeholders working together to improve the local development review and approval process and create a win-win for all parties.
Case in Point
Within the last decade, development approvals in many parts of the country have shifted from taking only a few months to two years or longer. An economic impact analysis recently commissioned by the Montgomery County (Maryland) Department of Permitting Services shows just how much is at stake.
Adding a year to the review process can reduce the value of that property by an average of 20%. Or, from a more positive viewpoint, shortening the time from concept to occupancy by one year could save the business as much as 20% of the project cost, lowering the cost of housing for its residents.
The county executive implemented a streamlining initiative in 2012, and since then record plat processing declined from 20-30 weeks to 8-12 weeks. Site plan reviews that used to take more than a year are now required to be completed within 120 days. And the time frame for building permit approvals dropped from 12 weeks to 30 days.
While many of the recommendations in NAHB’s report mirror those found in the White House toolkit, such as streamlining the permitting process and updating zoning codes, there are also key differences.
Namely, NAHB believes that there is too much focus at all levels of government on inclusionary zoning. In fact, it’s one of the strategies referenced in the White House toolkit as a preferred method of achieving affordable housing goals. The problem is that inclusionary zoning is a complex market intervention and, like impact fees, is dependent on the varying pace of construction.
Inclusionary zoning is not flexible enough to respond to changing market conditions and many communities have found that it does not produce the amount of affordable housing as hoped. Inclusionary zoning policies as implemented in some communities act like a tax on housing construction, the expense of which is passed on to consumers, builders and landowners.
NAHB urges government to encourage local communities to adopt long-term comprehensive strategies that will meet the demand for new housing and economic development. The association will continue to follow implementation of the White House report. Visit nahb.org for more information or resources on affordable housing strategies and process efficiency.
All of the webinars are free, available on demand and presented by members of the PWB Council. Here’s the lineup:
The State of Social Media 2015
Carol Morgan (mRELEVANCE)
Content is King
Meredith Oliver (Creating WOW Communications)
Customer Care & Service is Not a Department… It is a Culture
Kerry Mulcrone (Kerry & Co.)
Get Into Green: Selling the Value of High Performing Homes
Marla Esser (HomeNav)
Sales Management by the Numbers
Kimberly Mackey (New Homes Solutions)
Best Practices for Attracting & Retaining a High-Performance Workforce
Juli Bacon (JB Consulting Systems)
Webinar attendees may receive one-hour of continuing education credit for all NAHB professional designations, except HCCP. For information about NAHB designations, visit nahb.org/education.
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During our September Board Meeting, the Board builder members nominated several Associate members as candidates for our Associate of the Year 2016. We would like to recognize the following nominees for the projects they have worked on to better our industry for all:
Mike Easton, Horty & Horty P. A., for being a Grill Master and cooking up hamburgers and hot dogs for the Softball Tournament.
Mike Janis, RCI Printing & Graphics, for his efforts in helping with the Softball Tournament set up, Sponsorship, and aiding in organizing the event.
Jim McCulley, Watershed Eco, LLC, for aiding in organizing the Softball Tournament, and Sponsorship.
Chris Reith, Geo-Technology and Associates, for aiding in organizing the Softball Tournament.
Jim Wright, Artisans’ Bank, for being a Grill Master and cooking up hamburgers and hot dogs for the Softball Tournament.
Debra Young, EmpowerAbility, LLC, for aiding in organizing the Softball Tournament.
Thank you all for your contributions to bettering our industry and supporting our Association. Congratulations on your nomination!
The Sixth Annual Perfect Pair: Cigars & Single Malt Scotch event was held Wednesday, September 14th, 2016 at the University & Whist Club in Wilmington, Delaware. Thank you to our title sponsor Harry Miller of Regal Contractors; and Doug Hershman, Cooch and Taylor, for being our club host. The event was hosted by Hammer and Nails Club of Home Builders Association of Delaware (HBA/DE) in conjunction with the National Association of Home Builders (NAHB) Build-PAC.
Each year HBA/DE holds this fundraiser to support its national Build-PAC efforts. With the upcoming 2016 Presidential Election, now is an important time to support their efforts to keep housing an important and integral piece of the national economy.
The evening began with hors d’oeuvres and samplings of fine wiskey. Everyone then moved outside to the patio to enjoy cigars sponsored by Roger Wollaston, Creative Floors Inc. Jim Tobin, NAHB Executive Vice President of Government Affairs, gave a few words about the national election and political issues, followed by Mark Grahne, BUILD-PAC Trustee, Delaware.
The night quickly changed from relaxed to lively when the live auction began with our one in only, Dave Curtis, who was our awesome auctioneer.
Thank you to our live auction item donors:
George Beer, Delaware Valley Development Compancy, Flyers vs. Calgary Tickets
Jeff Bierlein & Bruce Jones, PNC Bank, Winterthur Museum Framed Print
Steve Burnett, IFS Insurance, Eagles vs. Atlanta Tickets
Richard Campbell, Bath Kitchen & Tile, Cal Ripken Jr. Signed Jersey
Tom Curley, TC Electric, Capital Grille $150 Gift Card
Dave Curtis, Group Golf Round at Fieldstone Golf Club (This led to some lively bidding so Dave donated two extra golf rounds to appease everyone who was bidding.)
NAHB Build-PAC, A Cube of Washington’s Finest Private Label Cigars
Thank you also to:
Eugene Graf IV,2016 BUILD-PAC Chair, who said a few words and his wife Erin
Morgan Giovannucci, our NAHB Field Rep.
For the attendees who did not partake in wiskey and cigars, they still had fun and enjoyed the relaxed atmosphere to unwind and do some networking. Thank you to all who attended, participated in the auction and to those unable to attend, but made a donation. With everyone’s generosity, we were able to raise over $10,000.
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Size matters. And in this case, smaller is a good thing. The recent decline in the size of new single-family homes is actually a sign of economic progress.
The housing recovery cycle has now reached the point of younger consumers expanding the market, and builders offering a wider variety of home sizes to align with an evolving mix of buyer budgets.
Single-family detached homes have long been and continue to be the most desirable type of homefor the majority of buyers. But lately they’ve given up a larger share of the market to an increasingly popular alternative that’s often times smaller and less expensive: townhouses.
Jim Clarke, president of Robertson Brothers Homes in Detroit, said that just a few years ago his company wasn’t building any townhomes. But this year, they account for more than 30% of his business.
The reason why is very simple: “Because young people want them,” he said. “We’ll do as many of these projects as we can get our hands on because there’s definitely pent-up demand among millennials for a new home that’s more affordable.”
But according to Clarke, the challenge in addressing the price constraints of millennials is exacerbated by the stringent lending standards of many banks, making it more difficult to build and sell attached homes.
“Despite that disconnect, we’re getting it done,” he said. “Initially, it was mostly through credit unions, but lately, more banks have started to recognize this expanding market by offering the type of loans needed to qualify for these homes.”
Clarke also notes townhouse developments offer some big advantages to the builder, including reduced construction costs compared to detached homes, and additional infill opportunities.
“You can build between 12 and 17 units on a single acre. That means you can buy infill sites that you couldn’t otherwise develop unless you have really expensive housing,” Clarke said.
Even in some of the most expensive housing markets in the country, townhouse communities are as popular as ever. Bob Youngentob, president of EYA, a luxury townhome builder based in suburban Washington, D.C., said the resurgence of first-time buyers isn’t the only thing driving demand.
“There’s also a large portion of older professionals and empty nesters, and they all want many of the same amenities that come with being in an urban location that’s convenient to retail, transit and job centers,” Youngentob said. “But for the builder, the higher costs of land and construction are clearly among the biggest challenges.”
To help counter those costs, Youngetob said EYA focuses on incorporating contemporary designs that make the most efficient use of available space. It also seeks to develop locations that are still “emerging” and therefore more cost effective.
Go to Eye on Housing for more details about the declining size of new single-family homes. NAHB members also have access to a wide variety of resources and reports regarding land development strategy on nahb.org.