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Home Builders Association 1/19/90 [OA 8309] [2]
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323152778
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Home Builders Association 1/19/90 [OA 8309] [2]
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Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Speech Backup Chronological Files
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Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Chron Files, 1989-1993
OA/ID Number:
13701
Folder ID Number:
13701-002
Folder Title:
Home Builders Association 1/19/90 [OA 8309] [2]
Stack:
Row:
Section:
Shelf:
Position:
G
26
19
5
7
Bridging Industry and
Academics
University Services
As the educational arm of the National Associa-
tion of Home Builders, the Home Builders Insti-
tute represents the industry at many levels in
America's educational system. From participating
on college accreditation boards to providing spe-
cial NAHB membership to students and faculty,
HBI serves as liaison for today's building industry
and tomorrow's builders.
"A student chapter offers young people
Student Chapters-Investing
the opportunity to get together with a
in the Future
common purpose. Through scholarships,
competitions, speaker meetings, commu-
nity projects and working closely with
The NAHB Student Chapter program was estab-
the local association, these students are
lished in 1971. It first offered students enrolled in
encouraged to become professionals
construction and related courses the opportunity
through access to knowledge
Then
to receive special membership benefits. Since
they start asking 'How can we change or
that time, the Association has developed a na-
improve this It's that kind of question-
tional student chapter network with thousands of
ing that propels the industry.
university, vocational and high school student
members.
Dr. Jack Willenbrock
Professor of Civil Engineering and
NAHB Student Chapters interact closely with
Faculty Advisor
local builder associations and get a first-hand
Penn State University
look at the industry. Student members have the
opportunity to meet their future employers at
association meetings. They work side by side with
professionals on community projects, and receive
financial support through fundraisers and
scholarships.
On the national level, students have access to a
complete range of industry materials and receive
Newsline, the quarterly NAHB student chapter
newsletter.
Starting a Student Chapter-
Participating in the
First Steps to Professionalism
Accreditation Process
To apply for affiliation as an NAHB Student
HBI also represents the education and training
Chapter is simple. The school, through a faculty
interests of the building industry at the policy
advisor, requests an application packet from the
level. Members from HBI's Board of Trustees and
HBI University Services Coordinator. After the
HBI staff sit on the Board of the American
application is completed and returned to HBI, it
Council for Construction Education (ACCE). The
is processed and presented to the NAHB Board of
primary goal of this private, non-profit corpora-
Directors for review. Once the Board approves
tion is to promote and continue the improvement
the application, a membership plaque, member-
of postsecondary construction education. Recog-
ship certificates and cards are sent to the sponsor-
nized by the Council on Postsecondary Accredita-
ing builder association to be presented to the new
tion (COPA), ACCE accredits 4-year baccalaureate
student chapter.
degree programs in construction, construction
science, construction management and con-
struction technology. By working with other
Academic Subscriber's
representatives in the construction community
and the general public, HBI assists construction
Program-Keeping Current
educators establish and maintain criteria and
standards for accreditation. Through this active
NAHB's Academic Subscribers Program was
participation, HBI serves the interests of poten-
formed in 1982 to offer full-time professors, in-
tial students by helping them identify institutions
structors and administrators in high schools,
and programs that offer quality education in the
field.
voc-tech institutions, colleges or universities,
access to current information about the building
For more information about HBI University Services,
industry. There are two levels of membership:
contact:
Academic Associates-receive Builder magazine,
Student Chapters and Academic
1-800-368-5242
NAHB's award-winning monthly publication; Na-
Subscriber Program,
ext. 494
tion's Building News, NAHB's semimonthly news-
University Services Coordinator
paper covering the latest industry developments;
student discount rates for NAHB's national con-
Accreditation Information
(202) 822-0494
vention and national seminars; a 25 percent
Vice President, Training
discount on all NAHB bookstore publications
and, unlimited access to the National Housing
Center Library.
Home Builders Institute
Academic Members-receive all the benefits of
The Educational Arm of the
Academic Associates, plus exclusive NAHB eco-
National Association of Home Builders
nomic forecasts and position papers.
15th and M Streets, NW
Washington, D.C. 20005
(202) 822-0494
800-368-5242 ext. 494
1087-006
Rebuilding Lives and the
Nation's Housing Stock
In 1981, the Home Builders Institute entered into
a unique partnership with the city of Baltimore.
Unskilled young people rehabilitated three for-
Community Revitalization Projects
merly abandoned city-owned buildings while learn-
ing hands-on construction skills. When the project
was completed, Baltimore had newly refurbished
units for low- to moderate-income families. In
addition, the newly trained men and women were
placed in construction jobs.
The success of this single pilot project has
"In Boston, one of our most critical
evolved into HBI's Community Revitalization
priorities is making sure that Boston
Projects. Today, this nationwide initiative trains
residents get a full and fair opportunity
local area unemployed and underemployed resi-
- through access and training- - to par-
dents for rewarding careers in the construction
ticipate in Boston's surging downtown
industry. At the same time, cities across the
economy. We have found that "Boston
country receive safe and affordable housing.
Rebuilds" is an important program for
helping us reach those people who might
otherwise not be served."
A Win/Win Situation
The Honorable Raymond L. Flynn
Mayor of Boston
Community Revitalization Projects unite various
government departments, community organiza-
tions and private businesses. In addition, residents
discover a new-found sense of neighborhood
pride. Many groups benefit from the projects:
The city restores abandoned buildings at a reason-
able cost. Trainees receive excellent work experi-
ence, learn positive work attitudes, and obtain
jobs in the building industry. Local builders gain a
new cadre of entry level workers. And, families in
need of housing have greater options in living
accommodations.
HBI
A Successful Community
Local Builders-
Partnership
Making It Work
HBI's Community Revitalization Projects address
A vital element to the success of a Community
two important needs: employment and housing.
Revitalization Project is the support of the local
home builder association. Members are instru-
Employment/Training-Community Revitalization
Projects consist of classroom instruction and
mental in providing a solid employer base for
those who complete training. Local builders also
hands-on training. The open-entry/open-exit,
competency-based program includes an employer-
play a pivotal role in providing technical assis-
validated curriculum.
tance on the projects. This support enhances the
overall quality of work and allows trainees the
Trainees learn from experienced tradesmen hired
opportunity to get first-hand experience with
by HBI. Proper handling of tools, basic skills and
future employers.
good work habits are stressed and training is
adapted to the student's special needs. Some
sites offer remedial math and English as a second
The Time to Rehabilitate
language as well.
Most rehabilitation projects enable trainees to
Is Now
learn carpentry, electrical wiring, plumbing, ma-
sonry, painting and other marketable trade skills.
Through its Community Revitalization Projects,
On the average, each person receives approxi-
HBI helps neighborhoods restore their sense of
mately 700 hours of training. When placed in
pride, provides unemployed people with valuable
local jobs, the trainees keep and use their profes-
experience and jobs, and offers low- to moderate-
sional tools.
income families the opportunity to live in safe
and affordable housing.
Training funds for Community Revitalization
Projects come primarily from the Job Training
For more information contact:
Partnership Act (JTPA), including local Private
Director of Special Projects
1-800-368-5242
Industry Councils (PICs), and state training co-
ext. 550
ordinating committees.
Housing-The municipality provides HBI with
access to abandoned, city-controlled buildings
which serve as training sites. HBI has rehabili-
Home Builders Institute
tated single-family homes, apartment buildings
The Educational Arm of the
and light commercial space. HBI has also been
National Association of Home Builders
successful in adaptive reuse. Construction funds,
usually provided by the city's Housing Depart-
15th and M Streets, NW
ment, State Housing Trust Funds, or Community
DES
Washington, D.C. 20005
Development Block Grants, aid in the purchase of
(202) 822-0494
STATES
building supplies and materials.
800-368-5242 ext. 494
Once work is completed, the building is sold or
rented to low- to moderate-income residents.
1087-008
The Building Industry
Job Corps
and Job Corps
The Home Builders Institute, the educational
arm of the National Association of Home Build-
ers, became involved with Job Corps in 1974. At
that time HBI offered seven construction trades
training programs to 150 full-time trainees at the
Woodstock, Maryland, Job Corps Center. Today,
HBI provides training in 11 trades to more than
6,000 young men and women at Job Corps Cen-
ters nationwide. HBI's role in Job Corps is two-
fold: to develop and deliver industry-validated
construction training programs and to find gain-
"It's plain and simple, without Job Corps,
ful employment in the building industry for HBI
I'd be dead or in jail. Now I see my life
Job Corps graduates. As a result. HBI has trained
going somewhere, because from here I
more than 50,000 youths for rewarding careers in
will have something of my own that no
the building industry through Job Corps.
one can take away from me."
Keith Lomax
HBI Plumbing Trainee
Job Corps-A Commitment to
Potomac Job Corps Center
Washington, D.C.
Youth for More than 20 Years
Established in 1964, Job Corps is the world's
oldest and largest residential education and voca-
tional training program for disadvantaged youths.
Funded by the U.S. Congress and administered by
the U.S. Department of Labor, Job Corps provides
remedial education, vocational training, counsel-
ing, and health care to men and women between
the ages of 16 and 22.
Job Corps' goal is to turn America's hardest-to-
employ youths into productive, independent citi-
zens. A study conducted by an independent re-
search group showed that over a three-year period,
Job Corps returned $1.46 to the government for
every $1.00 invested-primarily through increased
tax revenues and lower income maintenance pay-
HBI
ments. This pay-back strongly supports Job Corps'
reputation for fiscal integrity.
HBI Training Programs-
Partners in Job Corps
Building Better Futures
Without the strong support of business, labor and
national volunteer organizations, Job Corps could
HBI provides Job Corps training in painting,
not succeed. The building industry supports Job
plumbing, carpentry, building and apartment main-
Corps in many ways. The NAHB Auxiliary donates
tenance, brick masonry, landscaping, electrical
educational materials, books, recreational equip-
wiring, floorcovering, cement masonry, solar in-
ment and scholarships through its national Job
stallation and plastering.
Corps Center Assistance Program. NAHB mem-
Corpsmembers are trained for a minimum of 800
bers actively participate on Job Corps Community
hours by a journeyman instructor hired by HBI.
Relations Councils to match HBI training with
They may remain in the program for a maximum
worthwhile community projects and they consult
of two years. Trainees graduate only after they
with Job Corps instructors to ensure HBI train-
have acquired proficiency in basic skills and ex-
ing will continue to meet the building industry's
hibit the proper attitudes needed to succeed in
employment demands.
their trade.
The backbone of HBI training programs is "hands-
on" experience. Corpsmembers work on commu-
For more information about HBI activities in Job
nity projects, actual work sites or Vocational
Corps, contact:
Skills Training (VST) projects, which involve
the rehabilitation of Job Corps Center buildings
Job Corps Training
(202) 822-0550
and facilities. This practical experience has been
Vice President, Program Development
repeatedly proven to be the best preparation for
Instructional Personnel &
the world of work.
Curricula
(202) 822-0550
Job Corps Program Managers
Job Corps Placement
(202) 822-0551
HBI Placement-The First Step
National Coordinators
to Rewarding Careers
Job Corps Center Assistance
Campaign
(202) 822-0410
One of the most beneficial aspects of HBI Job
NAHB Auxiliary
Corps training is its job placement. HBI's unique
relationship with NAHB and its members provides
a large potential employer base for the placement
Home Builders Institute
of Job Corps graduates. As a result, HBI has one of
The Educational Arm of the
the highest placement rates in Job Corps. Corps-
National Association of Home Builders
members who are hired are allowed to keep the
professional tools supplied to them by HBI during
15th and M Streets, NW
training. After trainees are on the job, HBI reg-
Washington, D.C. 20005
ularly confers with employers to monitor their
(202) 822-0494
performance and progress.
800-368-5242 ext. 494
1087-001
A Legendary Success Story
Craft Skills
The Craft Skills Training Program is the corner-
stone of the Home Builders Institute's success
in "hands-on" trades training. This pre-
apprenticeship and apprenticeship program was
established in 1967 to alleviate the industry's
shortage of skilled construction workers. Since
then, it has become HBI's longest running job
training program.
More than 100 state and local builder associations
are served by Craft Skills programs throughout
the country. More than 50,000 men and women
have entered the home building industry as a
"I got a lot out of the Craft Skills ap-
result of this grass roots network of training.
prenticeship program when I was in it.
Now that I have my own business, I have
six apprentices working for me. The first
apprentice I hired six years ago is still
Training a New Generation of
with me today. He's a great guy and is
Builders
as enthusiastic about the trade as I am.
These guys are the sharpest people we
Under the program, previously unskilled, unem-
can find. They just have that extra drive.
ployed and underemployed people are recruited
And that's the name of the game - better
and trained in carpentry, electrical wiring, plumb-
response time and getting the job done.
ing, heating and air conditioning, building and
Kerry E. Hunter
apartment maintenance, rehabilitation and re-
President
modeling.
Hunter's Air Conditioning and
Craft Skills programs are funded through a long-
Heating, Inc. and
standing grant from the U.S. Department of Labor,
1978 Most Outstanding HVAC
and are administered by the Home Builders Insti-
Apprentice
tute. Over the years, millions of dollars in seed
Presented by the Northeast Florida
money have been used by state and local home
Builders Association
builder associations to start Craft Skills training
programs.
Craft Skills at the Local Level
HBI's national staff works closely with each
association to assess area training and employ-
ment needs and to obtain additional funding for
construction training programs. To many associa-
tions, HBI's support is a vital link in offering
members a strong, reliable pool of skilled tradesmen.
A full-time apprenticeship coordinator is hired by
Collaboration is the Key
the builder association to recruit people for the
program, tailor the curricula to local construc-
By working with NAHB builder associations to ad-
tion needs and standards, place apprentices with
minister Craft Skills training programs, HBI helps
employers, monitor training classes and adminis-
assure the building industry of a continuous and
ter the program. After careful screening by the
adequate supply of entry-level workers. Local
coordinator and by the apprenticeship commit-
contractors not only provide jobs for trainees and
tee, comprised of local employers, a class is
apprentices, but in many cases, are also active
assembled. An instructor, usually a journeyman
members on Private Industry Councils (PICs),
in the craft, will teach the trainees eight hours a
the administrative body for numerous commu-
day using a combination of classroom instruction
nity training programs.
and on-the-job training.
Pre-Apprenticeship training is conducted in two
For more information on starting a Craft Skills
phases. During the first five weeks, trainees learn
program, funding sources, or apprentice sponsorship,
the care and use of basic tools, safety, first aid,
contact:
building materials, construction math and, if
Apprenticeship Program
needed, receive literacy training. A positive atti-
Administration
(202) 822-0550
tude, pride in workmanship and self-motivation
Vice President, Operations
are also stressed. Toward the end of the first
phase, trainees work on an actual job site. The
Apprenticeship Programming
(202) 822-0494
newly trained craftsmen build, rehabilitate or
National Coordinator
remodel day care centers, senior citizen homes,
shelters for the homeless and other community
projects.
Home Builders Institute
During the second pre-apprenticeship phase, train-
The Educational Arm of the
ees receive 16 weeks of on-the-job training as
National Association of Home Builders
full-time employees of builders or sub-contractors.
The local coordinator monitors each trainee's job
15th and M Streets, NW
performance, overall attitude, attendance record
Washington, D.C. 20005
and skills proficiency.
(202) 822-0494
STATES
800-368-5242 ext. 494
Upon completion of pre-apprenticeship training,
trainees can continue refining their trade through
Apprenticeship programs sponsored by the local
home builder association. All HBI sponsored
apprenticeship programs are registered with the
Federal Bureau of Apprenticeship and Training or
the appropriate state agency.
1087-002
REAL ESTATE
Vol. 2, No. 12
December 1989
OUTLOOK
A Monthly Forecast for the Economy and Real Estate
FORECAST SUMMARY
The Department of Commerce released its first revision to third quarter real GNP growth,
declaring that the economy advanced at an annual rate of 2.7 percent, a shade faster than its
initial estimate of 2.5 percent. The upshot is that demand appears to have been stronger, while
worrisome levels of inventory building were less alarming than originally thought.
The Commerce Department reported that the index of leading economic indicators, slipped
0.4% in October, following two months of increases. To date in 1989, the index has fallen five
times, increased four, and remained unchanged once.
Housing starts activity rebounded in October to an annual rate of 1.42 million units, 12.0
percent faster than the September pace of 1.268 million units, but 7.3 percent below the October
1988 annual rate of 1.532 million units. Single-family housing starts moved up 6.9 percent to an
annual rate of 1.027 million units, but were 9.6 percent below their October 1988 pace of 1.136
million units. Starts of multi-family units were also up strongly in October.
October sales of existing single-family homes reacted positively to lower interest rates, remain-
ing unchanged from their healthy September annual rate of 3.52 million homes. The pace of
existing home sales was 4.3 percent below the October 1988 annual rate of 3.68 million units.
Despite the healthy pace of existing single-family home sales, the median price of an existing
single-family home slipped $2,200 to $92,100 in October, a decline of 2.3%. The median price
for new single-family homes was up 5.3 percent in October to $127,900, and had risen 13.3
percent from its October 1988 median price of $112,900.
IN THIS ISSUE
Economic Commentary: VALEDICTORY FOR THE DECADE, by John A. Tuccillo
Outlook for the Economy and Real Estate, by Sean A. Burns
Household Housing Expenditures: Effects of a Changing Population, by John Simonson
and Mary Schwartz
R
NATIONAL ASSOCIATION
Forecasting & Policy Analysis Division
OF REALTORS®
NATIONAL ASSOCIATION OF REALTORS R
REALTOR®
The Voice for Real Estate TM
777 14th Street, NW Washington, D.C. 20005
Copyright 1989 NATIONAL ASSOCIATION OF REALTORS®
VALEDICTORY FOR THE DECADE
Economic Commentary
If you believe in forever,
Then life is just a one night stand.
If there's a rock n'roll heaven,
They're sure to have a hell of a band.
by
John A. Tuccillo
Chief Economist and
Senior Vice President
Real Estate Finance
Yes, but decades pass and it's only human to mark
difficult to stomach), drug trafficking would not be nearly
their passage with some retrospection, a process in which
as successful and as hard to eliminate as it is were it not
economists achieve 50 percent accuracy. In a few weeks,
organized as a capitalist enterprise. In 1981,
we move into a new decade (OK, don't quibble--I know
Reaganomics brought us back to the principles on which
that the Nineties don't really start until January 1, 1991,
this economy was founded, and unprecedented growth
but see how many people invite you to their turn of the
resulted. That example has been taken to heart by many
century party on December 31, 2000!). What did the
others in many ways.
Eighties represent? What did we accomplish? What les-
Short-run wisdom and long-run wisdom don't always
sons do we take with us toward the third millennium?
coincide. The free love of the Seventies turned out not to
It was a decade that came in with the bang of Mt. St.
be free after all, as compelling as was its case. Also in the
Helens and went out with the twin scourges of Hugo and
Seventies, what looked like a good idea--using the flood
the quake. We learned that our friends at the beginning
of young baby-boom workers to produce goods, rather
of the Eighties, the Japanese, may not be our friends by
than renewing obsolete capital--placed us in a dramati-
the end, but that old enemies are no longer as adversarial,
cally inferior economic position to Japan and Germany.
as the Wall came tumbling down. Chernobyl and the
On the brighter side, the recession of 1981-82 engineered
Exxon Valdez showed the real costs of progress; our
by the Volcker Fed seemed awful at the time, yet success-
discards came back to haunt us, both as physical trash
fully squeezed inflation out of the economy and set the
choking the environment and the human beings trapped
stage for the strong growth during the rest of the decade.
by drug dependency and illiteracy.
What goes up must come down. Not too long ago, we
We also learned that while democracy is, in the words
viewed the Communist Bloc as a monolithic superpower.
of Winston Churchill, "the worst form of government,
And in 1980, Dallas and Houston were the places to be,
except for all the rest", it is the most difficult to sustain.
and interest rates and oil prices were skyrocketing.
Our elections became financial and media extravaganzas,
Forecasts made at that time by extrapolating trends were
and produced Congresses that have become increasingly
dead wrong. And while it's true that economists have
paralyzed simply trying to produce an annual budget.
predicted eight of the last two recessions, it's human
That the Eighties were dominated by Ronald Reagan is
nature to assume that what happened yesterday will hap-
as much a reflection of the changing ground rules of our
pen forever. Ain't so, and during the Eighties we learned
political system, as it is a barometer of the needs of the
that good markets turn sour, and bad markets improve.
country.
Think about that the next time you're tempted to worry
In economic terms, the decade was a resounding
about the Japanese.
success. The nation is moving into the eighth consecutive
Markets work. The most striking thing about the
year of growth, and even our two largest failures, the
thrift debacle has not been its size or its cost or the
collapse of the thrifts and the stock market crash, appear
numbers of institutions affected. Rather, it's that there
to have had little lasting impact on either the housing
has been no noticeable disruption of the housing finance
finance system or the economy at large. Americans simply
system. The reason here is that the financial market found
brushed aside the bad news in their rush to follow the
ways around the regulations that bound mortgage trans-
advice of Barrett Stong, "The best things in life are free,
actions. The upshot was the creation of an alternative
but you can give them to the birds and bees. I need money,
system that took up the slack generated by the loss of the
that's what I want."
thrifts.
Let's look at some of the major economic lessons of
So those were the Eighties. The Nineties will bring
the Eighties:
their own triumphs and disasters, and we'll learn more
Capitalism is a powerful force. Is there any doubt that
lessons in the inexhaustible complexity of human exist-
the wave of freedom sweeping over the Communist world
ence. But can the end of the century really be so near?
from China to East Germany stems from the powerful
Has Saturday Night Live really been on for fifteen years?
example of the prosperity achieved in the U.S., Western
Is Mick really forty-six?
Europe and Japan? More to the point (and perhaps
Outlook for the Economy and Real Estate
THE ECONOMIC OUTLOOK
The Department of Commerce released its first
revision to third quarter real GNP growth, declaring that
GRAPH 1: THE ECONOMIC OUTLOOK
the economy advanced at an annual rate of 2.7 percent, a
shade faster than its initial estimate of 2.5 percent. How-
Percent
12
ever, the composition of the new growth estimate changed
substantially with the revision. Essentially, final sales in
Prime Rate
10
the economy (broadly defined as total demand less
FHA Secondary
change in inventories) moved up by a full percentage
Mortgage Rate
8
point, and inventory change moved down by almost as
much. The upshot is that demand appears to have been
GNP Inflation
6
stronger, while worrisome levels of inventory building
Real GNP
were less alarming than originally thought. However, the
4
after effects of Hugo are still swirling amidst these
revisions. By one measure, the net increase in the real
2
GNP estimate can be explained by insurance payments
made by foreign companies in the wake of Hugo. The
0
statistical minutiae aside, the economy still seems on
2
3
4
1
2
3
4
1
2
3
4
88
89
90
course for the vaunted "soft landing," although recent
indicators suggest the approach might get a bit bumpy.
Source: Bureau of Economic Analysis; E NAR estimates.
Outlook Mixed, Leading Indicators Say
The Commerce Department reported that its chief
GRAPH 2: LEADING INDICATORS WEAKEN
forecasting tool, the index of leading economic indicators,
slipped 0.4% in October, following two months of in-
Percent change
creases. The index is popular because it is a composite of
1
11 indicators of economic activity which were selected to
predict activity six to nine months in the future. It is
0.5
believed that three consecutive monthly declines indicate
a recession is probable. To date in 1989, the index has
fallen five times, increased four, and remained unchanged
o
once. In October, the index was buoyed by fewer un-
employment claims, increases in plant and equipment
-0.5
orders, and a rise in building permits. The six components
contributing to the October decline were all related to
-1
manufacturing: a shorter average workweek, slower or-
ders for consumer goods, faster delivery times, less of a
backlog for durable goods, higher material prices, and
-1.5
10
11
12
1
2
3
4
5
6
7
8
9
10
sagging consumer expectations. Any one month's report
88
89
on the leading indicators should always be evaluated
Source: Dept. of Commerce
carefully, but other data confirms that the manufacturing
sector has weakened significantly in recent months.
Sluggish Manufacturing Sector
GRAPH 3:FACTORIES SLOW, PURCHASERS SAY
More concrete evidence of a slowdown in manufac-
turing has appeared with striking regularity in the month-
ly survey of purchasing agents by the National Association
Purchasing Managers Index
60
of Purchasing Managers. The November report marked
the seventh consecutive month for which the index fell
below a reading of 50. Generally, readings below 50 indi-
55
cate that the manufacturing sector is extremely soft. Im-
portant trends in a few components of this composite
index included the fifth consecutive monthly decline in
50
factory production, the tenth consecutive monthly drop
in manufacturing employment, and a decline in new or-
ders for manufactured goods. The industrial sector has
45
been going through a period of adjustment brought on by
both weaker domestic demand and recently sluggish ex-
port growth. On a positive note, this slack demand has
40
10
11
12
1
2
3
4
5
6
7
8
9
10
11
eased pressures for higher prices in some industries, and
88
89
Note: Index values under 50 indicate a
this may ultimately lead the Federal Reserve to lower
weakening economy.
interest rates.
Source: Natl. Assn. Purchasing Managers
2
REAL ESTATE OUTLOOK
Will the Consumer Be Back in Time for Xmas?
GRAPH 4: RETAILERS WAIT FOR XMAS
With manufacturing enduring a slowdown, the in-
domitable spirit of the American consumer has again
been looked to for help in propping up economic growth.
Percent Change in Retail Sales
In fact, much of the 2.7% advance in third quarter real
2
GNP growth was due to consumer spending. On the
surface, it seems that consumers are still up to the task:
1.5
personal income growth surged 0.9% in October, the
1
fastest pace since March, and just in time for the
Christmas buying season. But a host of special factors
0.5
were behind the income spurt: bonus checks for auto
0
execs, and the earthquake, to name two. But while it's still
too early to tell, there are signs consumers are winded
-0.5
from their stint at the forefront of economic growth.
October retail sales were down 1.0 percent from Septem-
-1
ber, but up 4.6 percent from October 1988. The October
-1.5
decline was the largest since January 1987, but both then
10
11
12
1
2
3
4
5
6
7
8
9
10
and now the retreat was due to sharp drops in auto sales.
88
89
Excluding auto sales, October retail sales were up 0.2
Source: Dept. of Commerce
percent. So, a late Christmas season comeback should not
be ruled out. Retailers did report that sales picked up
after Thanksgiving, so Christmas might just come a little
GRAPH 5: AUTO SALES PLUNGE
late this year: particularly with five shopping weekends
between the holidays this year.
Slower Auto Sales Are Just a Symptom
Millions of Units
10
Flat auto sales are muffling consumer spending as
well. October was the first month in which Americans
curbed their personal spending in more than a year, and
8
sagging car sales were almost entirely to blame for the
0.2% drop. There was a time not too long ago that an
6
extended stay in the Detroit doldrums meant a recession
was likely for the entire economy. But in 1989, auto
4
production at partially or wholly-owned Japanese plants
in the U.S. will surpass one million units. These plants
operate at lower costs than older ones run by the Big
2
Three U.S. car companies. With these margins in their
favor, Japanese auto makers have enjoyed an 8.2% rise in
o
sales from January to October 1989, and in the process,
10
11
12
1
2
3
4
5
6
7
8
9
10
88
89
have grabbed a 25.4% share of the market, up almost
Source: Dept. of Commerce
three percentage points. Sales at the Big Three have
plunged 6.2%, trimming their combined share by 1.6%.
Slow Growth, Modest Inflation Lower Rates?
GRAPH 6: INTEREST RATE OUTLOOK
As evidence of the economy's slower growth trend
mounts, expectations grow that the Federal Reserve will
Percent
soon ease its monetary policy and thereby allow interest
rates to drift down again. The Fed is widely believed to be
a bit more concerned with keeping the economy out of a
11
30-yr. FRM (FHA Secondary Mkt. Yield)
recession, than it is worried about an acceleration in the
rate of inflation. In fact, the Fed's next move to ease credit
10
is so widely anticipated that many financial market
wizards claimed to see ghosts of looser credit during the
short Thanksgiving week. The markets reacted so strong-
9
ly to these sightings that the Fed had to enter the markets
Federal Funds Rate
on the following Monday to realign the federal funds rate
8
to confirm that it had only been providing more credit to
Long-term Treasury Bond Rate
meet the needs of the busy shopping weekend. Still, the
7
Fed is expected to loosen credit before the year is out.
1
2
3
4
1
2
3
4
89
90
This easing of credit might be precipitated by a weak
November employment report, which is due to be
Source: Federal Reserve, NAR Estimates
released on Friday, December 8.
DECEMBER 1989
3
GRAPH 7: HOUSING STARTS
Thousands of units
2250
Total Units
HOUSING STARTS
2000
Single-Family
(Seasonally Adjusted Annual Rates, in Thousands)
1750
Multi-Family
NATIONAL DATA
1500
Total
S-F
2-4
5 and up
1250
Oct 1989
1420
1027
73
320
1000
Sep 1989
1268
961
59
248
750
Aug 1989
1329
990
56
283
Jul
1989
1420
1026
57
337
500
Jun
1989
1406
972
55
379
250
Oct
1988
1532
1136
63
333
o
1
23412341234123412341234123412341234
82
83
84
85
86
87
88
89
90
Oct
1989
Changes From (%):
Sep 1989
12.0
6.9
23.7
29.0
Source: Bureau of Census; Real Estate Outlook forecast
Oct 1988
-7.3
-9.6
15.9
-3.9
REGIONAL DATA
Northeast
Midwest
South
West
GRAPH 8: HOUSING STARTS BY REGION
Oct 1989
176
289
562
393
Sep 1989
166
248
480
374
Aug 1989
140
236
563
390
Jul 1989
189
274
531
426
Thousands
Jun 1989
168
242
552
444
Oct 1988
198
273
582
479
650
550
Oct 1989
Changes From (%):
450
Sep 1989
6.0
16.5
17.1
5.1
Oct
1988
-11.1
5.9
350
-3.4
-18.0
250
Source: Bureau of the Census; Construction Reports,
Series C20
150
South
West
Midwest
50
Nor theast
2345678910111212345678910
88
89
Source: Bureau of Census
Privately owned housing starts activity rebounded in
July before plunging 6.4% in August and 4.6% in Septem-
October to an annual rate of 1.42 million units, 12.0
ber.
percent faster than the September pace of 1.268 million
All four regions experienced an increase in the rate
units, but 7.3 percent below the October 1988 annual rate
of housing starts activity during October, but only the
of 1.532 million units. Single-family housing starts moved
Midwest saw starts surpass their October 1988 pace. In
up 6.9 percent to an annual rate of 1.027 million units, but
the Midwest, housing starts rose 16.5 % in October to an
were 9.6 percent below their October 1988 pace of 1.136
annual rate of 289 thousand homes, and were 5.9% higher
million units. Starts of multi-family units were also up
than their October 1988 pace of 273 thousand units. In the
strongly in October. The rebound in activity was directly
Northeast, October housing starts were up 6.0% from
related to the recent drop in interest rates, and does not
September, but down 11.1% from a year ago. In the South,
indicate a reversal of the slowdown in the general
starts surged 17.1% in October, but were off 3.4% from
economy. Rather, the latest starts figures simply moved
their October 1988 pace. In the West, housing starts rose
starts activity back up to the pace that had prevailed in
5.1% in October, but were down 18.0% from their Oc-
tober 1988 annual rate.
4
REAL ESTATE OUTLOOK
GRAPH 9: NEW HOME SALES
Thousands of units
800
NEW HOME SALES
700
(Seasonally Adjusted Annual Rates, in Thousands)
600
NATIONAL DATA
Oct 1989
649
Mar 1989
555
Sep 1989
652
Feb 1989
621
500
Aug 1989
726
Jan 1989
700
Jul 1989
738
Dec 1988
669
400
Jun 1989
647
Nov 1988
650
May 1989
653
Oct 1988
718
Apr 1989
607
300
2
3
4
1
2
3
4
1
23
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
Oct 1989
Annual
82
83
84
85
86
87
88
89
90
Changes From:
Totals:
Sep 1989
-0.5
1987
671
Oct 1988
-9.6
1988
676
Source: Bureau of Census; Real Estate Outlook forecast
REGIONAL DATA
Northeast
Midwest
South
West
GRAPH 10: NEW HOME SALES BY REGION
Oct 1989
99
113
276
161
Sep 1989
67
109
261
214
Aug 1989
88
104
293
241
Jul 1989
99
127
282
229
Jun 1989
73
99
259
215
Thousands
350
May 1989
89
99
271
195
300
Oct 1988
96
111
274
238
South
1988
102
97
276
202
1987
117
97
271
186
250
Oct 1989
200
West
Changes From:
Sep 1989
47.8
3.7
5.7
-24.8
150
Northeast
Oct 1988
3.1
1.8
0.7
-32.4
100
Source: Bureau of the Census; Construction Reports,
Midwest
Series C25
50
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
88
89
Source: Bureau of Census
Sales of new single-family homes were virtually un-
By region, there were some very wide swings in new
changed in October at an annual rate of 649 thousand
home sales activity. In the Northeast, new home sales shot
units, or 0.5% below the September annual rate of 652
up 47.8% to an annual rate of 99 thousand homes, but
thousand units. New home sales figures can and do fluc-
were only 3.1% faster than the October 1988 rate. In the
tuate wildly from month to month. In fact, September new
Midwest, new home sales moved up 3.7% in October to
home sales were initially reported last month to have
an annual rate of 113 thousand homes, and were 1.8%
fallen 14% from their August pace, but the Bureau of
above the October 1988 annual rate. In the South, new
Census revised this figure to a smaller 10.2% decline. The
homes sold at an annual rate of 276 thousand units, or
November and December reports on new home sales may
5.7% faster than the September rate, and were virtually
show a slight uptick in activity due to lower interest rates
unchanged from the October 1988 pace. In the West, the
during the fall, which has helped boost housing starts
annual rate of new home sales plunged 24.8% in October
activity. However, the large sampling errors encountered
to 161 thousand units, from 214 thousand units in Septem-
by the Bureau of Census make drawing any inferences
ber. The October 1989 sales pace was 32.4 percent slower
from the monthly data a treacherous undertaking.
than the October 1988 annual rate of 238 thousand units.
DECEMBER 1989
5
GRAPH 11: EXISTING HOME SALES
Millions
4
EXISTING SINGLE-FAMILY HOME SALES
(Seasonally Adjusted Annual Rates, in Thousands)
3.5
NATIONAL DATA
Oct 1989
3520
3
Mar 1989
3400
Sep 1989
3520
Feb 1989
3480
Aug 1989
3480
Jan 1989
3550
2.5
Jul
1989
3330
Dec 1988
3920
Jun 1989
3360
Nov 1988
3710
May 1989
3210
Oct 1988
3680
2
Apr 1989
3400
1.5
Oct 1989
Annual
2
3
41234123412341234123412341234123
4
Changes From (%):
Totals:
82 83 84 85 86 87 88 I 89 90
Sep 1989
0.0
1988
3594
Oct 1988
-4.3
1987
3526
Source: NAR Economics & Research; Real Estate Outlook forecast
REGIONAL DATA
Northeast
Midwest
South
West
Oct 1989
580
980
1340
610
GRAPH 12: EXISTING HOME SALES BY REGION
Sep 1989
590
990
1340
590
Aug 1989
590
980
1350
550
Jul 1989
550
910
1300
570
Jun 1989
510
960
1280
600
Millions
May 1989
610
810
1230
580
1.6
Oct 1988
640
940
1410
690
1.4
1988
673
929
1350
642
South
1987
685
959
1282
600
1.2
Oct 1989
Midwest
Changes From (%):
1
Sep 1989
-1.7
-1.0
0.0
3.4
Oct 1988
-9.4
0.8
4.3
-5.0
-11.6
Northeast
0.6
Source: NATIONAL ASSOCIATION OF REALTORS®
West
Economics and Research Division
0.4
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
88
89
Source: NAR Economics & Research
October sales of existing single-family homes reacted
In the Northeast, the annual rate of existing home
positively to lower interest rates, remaining unchanged
sales fell 1.7% in October to 580 thousand homes, and was
from their healthy September annual rate of 3.52 million
9.4% below the October 1988 annual sales pace. In the
homes. The pace of existing home sales was 4.3 percent
Midwest, sales slipped by only 1.0% to an annual rate of
below the October 1988 annual rate of 3.68 million units.
980 thousand homes during October, and were 4.3%
However, put in the context of sales activity during 1989,
ahead of the October 1988 sales pace. In the South, sales
the October annual rate was the highest since January's
of existing homes were unchanged in October at an an-
pace of 3.55 million units. With fixed rate mortgages
nual rate of 1.34 million homes, but fell 5.0 percent below
available at rates below 10 percent, buyers previously
the October 1988 annual rate of 1.41 million units. In the
priced out of the market apparently have reconsidered
West, October sales activity was up 3.4 percent to an
their situation and jumped back into the market. How-
annual rate of 610 thousand existing homes, but remained
ever, buyers in high cost areas are still finding it difficult
11.6 percent below its October 1988 sales pace of 690
to purchase homes, despite the lower rates.
thousand homes.
6
REAL ESTATE OUTLOOK
GRAPH 13: HOME PRICES
Inflation Rate
14
SINGLE-FAMILY HOME PRICES
CPI
12
(In Dollars)
Existing Homes
New Homes
NATIONAL DATA
10
Median
Average
Existing
New
Existing
New
8
Oct
1989
92,100
127,900
116,500
151,900
6
Sep
1989
94,300
121,500
118,400
151,900
Aug
1989
94,800
122,700
120,800
159,000
4
Jul
1989
96,700
116,000
122,100
140,300
Jun
1989
93,400
122,800
118,800
153,600
2
Oct
1988
88,900
112,900
112,300
137,300
0
1988
89,300
112,500
112,800
138,300
1986
1987
1988
1989E
1990E
1991E
1987
85,600
104,500
106,300
127,200
Oct
1989
Changes From (%):
Sep
1989
-2.3
5.3
-1.6
Source: Bureau of Census; E Real Estate Outlook forecast
0.0
Oct
1988
3.6
13.3
3.7
10.6
REGIONAL DATA
Northeast
Midwest
South
West
GRAPH 14: HOME PRICES BY REGION
Oct
1989
143,300
70,900
83,400
142,200
Sep
1989
145,700
72,200
84,400
147,600
Aug
1989
149,000
71,900
86,100
147,500
Percent Change:
Jul
1989
147,100
73,400
87,200
146,500
From previous month
From one year ago
Jun
1989
149,900
72,000
85,000
134,500
Percent
10
Oct
1988
144,400
68,000
80,500
130,000
1988
143,000
68,400
82,200
124,900
8
1987
133,300
66,000
80,400
113,200
6
Oct
1989
4
Changes From (%):
Sep
1989
-1.6
-1.8
-1.2
-3.7
2
Oct
1988
-0.8
4.3
3.6
9.4
o
Source: NATIONAL ASSOCIATION OF REALTORS®
-2
Economics and Research Division
-4
Northeast
Midwest
South
West
United States
Source: NAR Economics & Research; Real Estate Outlook forecast
Despite the healthy pace of existing single-family
tober 1988, the South median price was up 3.6 percent,
home sales, the median price of an existing single-family
and the West median price was up 9.4 percent.
home slipped $2,200 to $92,100, in October, a decline of
The median price for new single-family homes was
2.3%. The drop in interest rates that encouraged the
up 5.3 percent in October to $127,900, and had risen 13.3
healthy sales activity allowed buyers who had previously
percent from its October 1988 median price of $112,900.
been priced out of the housing market to make purchases.
But as mentioned earlier, sampling errors affect the new
This, in turn, contributed to a larger volume of home sales
home sales data, and these wide swings in new home sales
in the moderate price range, as those previously priced
prices are more than likely linked to them.
out of the market are not likely to purchase homes in the
upper brackets. The median price declined in all four
regions during October, but remained above October
Sean A. Burns
1988 levels in every region except the Northeast, where it
Director of Forecasting
was 0.8 percent below its October 1988 reading. The
Forecasting & Policy Analysis Division
Midwest median price increased 4.3 percent since Oc-
DECEMBER 1989
7
HOUSEHOLD HOUSING EXPENDITURES
Effects of A Changing Population
Given the cyclical nature of housing, it is
sales of higher priced homes, housing deprivation has
understandable why the demand for housing is often
increased appreciably as well. Deprivation occurs not
represented primarily as a function of current and
only for those households which are homeless but also
anticipated inflation, interest rates, the supply of
for those poverty households which are deprived of
mortgage credit, etc. However the longer run demand
other essentials because they must spend enormous
for housing, often obscured by "shocks" to the economy,
income shares for housing. The housing cost burden to
responds to the population's demographics, including its
poverty households varies across household types.
changing age structure and household composition. In
Housing costs constitute an excessive burden for more
"Increasing Singles and Aging 'Boomers': Impacts on
poverty renters than owners, and for more poverty
Household Finances and Implications for Housing"
households under age 65 than for the elderly. It is
(Real Estate Outlook, August 1989), we looked at the
estimated, for example, that the typical renter household
financial resources of households of various types.
having an income below the poverty level spent 65
Moreover, we humbly speculated about the implications
percent of its income on housing in 1985. This
for household formation and housing demand if current
compares with 35 percent for elderly renters, 31 percent
trends in finances, savings and income continue into
for black renters, and 27 percent for all renter
the future.
households. On the other hand, the typical poverty
This article will look at another aspect of housing
household which owned its home in 1985 spent 47
demand. How much of their financial resources are
percent of its income on housing. This compares with
households of various ages and types spending for
19 percent spent by elderly owners, 21 percent by black
housing services? How will this impact future demand?
owners, and 18 percent by all owner household.
Both this article and "Increasing Singles and Aging
Whereas nearly 4 out of 5 (78.6 percent) of poor
"Boomers", are excerpted from an upcoming
renters under age 65 and living alone pay more than 50
NATIONAL ASSOCIATION OF REALTORS staff
percent of their incomes for housing, only about one-
study, Demographics in the U.S. -- The Segmenting of
half (50.8 percent) of their elderly cohorts do so. For
Housing Demand.
married couples without children the situation is
somewhat reversed; a substantially larger proportion of
poor elderly renter couples pay more than 50 percent
THE HOUSING "HAVES" AND "HAVE NOTS"
of their incomes for housing than is true for married
A well-documented growing inequality in the income
renter households under age 65 (83.6 percent versus
distribution is being reflected in a growing gulf between
73.6 percent). Available evidence from the 1985
the "haves" and "have nots" in the housing market.
American Housing Survey indicates that, while spending
While growth in housing affluence among households
substantial portions of their incomes for housing, low-
toward the upper end of the distribution has been
income households which rent consume relatively low
characterized as "quite remarkable", the declining share
levels of housing. For example, the typical renter units
of income going to poor households has contributed to
occupied by a poverty household in 1985 provided 379
equally apparent housing problems, if not deprivation,
square feet of floor space per person, about 83 percent
for many. Between 1981 and 1987, there was
of the 10 median (458 square feet) for all occupied rental
substantial growth in the number and percent of higher
units.
priced homes sold. Some 356,000 existing homes were
sold for $120,000 or more in 1981 (14.7 percent of the
EVIDENCE FROM CONSUMER EXPENDITURES
total); an estimated 726,000 were sold for $150,000 or
SURVEYS
more in 1987 (20.6 percent of the total). 2 The number
The most reliable data currently available regarding
of new homes sold at these prices increased by 155
household expenditures are collected by the Bureau of
percent between 1981 and 1987; as a share of total
Labor Statistics in its periodic Consumer Expenditures
new home sales the increase was from 15 percent to 26
Surveys (CES) and by the U.S. Department of Housing
percent.³ Much of this reflects increased demand by
and Urban Developoment in its biennial American
affluent households for more amenities and more
Housing Surveys (AHS). However, the Consumer
spacious, well-appointed homes.⁴
Expenditure Survey is the only national survey that
A few select characteristics of new homes indicate
provides data both on household expenditures and on
how striking the supply response has been. From 1984
demographic characteristics of households. CES data
to 1988, median new home size increased over 13
gathered in 1973, 1981, 1985, 1986, and 1987 provide a
percent (from 1,605 sq. ft. to 1,815 sq. ft.); the
useful perspective for assessing changes in household
proportion with more than two baths increased from 28
expenditure and consumption patterns during the 1970s
percent to 42 percent; new houses with four bedrooms
and 1980s.
or more increased from 18 percent to 26 percent; and
Table 1 shows real income and expenditures both
the proportion with two- or more car garages rose from
per household and per capita for selected CES periods.
55 percent to 66 percent. 5
Differences in levels of and changes in household and
In sharp contrast to the affluence evidenced by
per capita income/expenditures illustrates the influence
increased
of reduced average household size over the period.
8
REAL ESTATE OUTLOOK
Table 1
REAL HOUSEHOLD EXPENDITURES FOR SELECTED YEARS, 1973 - 1987
(1987 dollars)
% Change
Income/Expenditure
1973
1981
1985
1986
1987
1973-1987
Household Income
$27,244
$24,952
$26,528
$26,411
$27,326
0.3%
Household Expenditures
21,861
21,580
23,458
23,538
24,414
11.7
Shelter Expenditures
(% of Income)
11.9%
14.1%
15.3%
15.6%
15.2%
3.3
Fuel & Utilities
(% of Income)
3.6
6.3
6.6
6.5
6.1
2.5
Per Capita Income
$9,394
$9,241
$10,202
$10,017
$10,510
11.9
Per Capita Expenditures
7,425
7,891
8,936
8,773
9,390
26.5
Shelter Expenditures
(per capita)
1,056
1,399
1,559
1,535
1,598
51.3
Fuel & Utilities Expen-
ditures (per capita)
461
609
669
690
643
39.5
SOURCE: Marc E. Smyrl, Income and Expenditures of Selected Consumer Groups 1973-1985, CRS Report
No. 88-318S (Washington, D.C.: Congressional Research Service, The Library of Congress,
1988), Tables I & II, pp. CRS-7 & CRS-9 based on Consumer Expenditure Surveys 1972-73,
1980-81, 1985; "Consumer Expenditure Survey Results from 1986," NEWS, U.S. Department of
Labor, Bureau of Labor Statistics, Washington, D.C. (April 14, 1988), Table B, p. 3; and
"Comprehensive Picture of Consumer Spending Released by Bureau of Labor Statistics," News,
U.S. Department of Labor, Bureau of Labor Statistics, Washington, D.C. (July 6, 1989), Table
B, p. 3.
DECEMBER 1989
9
Decline in household expenditures during the 1970s
increased their housing expenditures far more than their
was not as great as the decline in income and, during
incomes increased. Consistent with conventional
the 1980s, expenditures increased more than did
wisdom, the elderly appear to have had much lower
income. Hence, real expenditures per household were
incomes in 1985 than did the population as a whole
nearly 12 percent higher in 1987 than they were 14
($15,836 versus $25,127 household incomes, and $8,798
years earlier, despite real incomes being virtually
versus $9,664 per capita incomes).
unchanged. Real expenditures for shelter by
The elderly also spent a much larger proportion of
householdsincreased by 3.3 percent relative to income
their 1985 incomes than did the general population (95
and for fuel and utilities by 2.5 percent. This does not
percent versus 88 percent), but this represented about
necessarily mean, however, that households increased
an 8 percent increase from 1973 for both groups.
their consumption of housing goods and services; that
Moreover, the elderly spent a substantially larger
is, an increased share of income could have been
percent of their per capita incomes for shelter and for
necessary to purchase the same amount of housing in
fuel and utilities in 1985 than in 1973 (24.8 percent
the face of declining real incomes. However, as shown
versus 20.0 percent). Again, this mirrors the housing
in Table 1, declining incomes account for only part of
expenditure pattern for the general population in 1985
the increased share of income spent for housing,
and 1973 (21.8 percent versus 16.1 percent).
housing share rising when real income increased during
Whereas single-parent households had incomes
the 1980s as well as when it declined during the 1970s.
roughly comparable with those of elderly households in
1985, their income per capita was only about 60 percent
The growth in per capita expenditures for shelter
as high and the rate of growth only about one-third as
and fuel and utilities over the period is much more
great as for the elderly. Single-parent households
pronounced. Expenditures in both categories increased
reported spending more than they earned, per
some 3 to 4 times as much over the 1973-1987 period
household as well as per capita.
as did total household expenditures.
Despite spending less for housing per capita than did
What does this imply? First, the approximately 10
the general population, young households, or the
percent smaller typical household in 1987 consumed a
elderly, single-parent households spent a far larger
substantially larger volume of housing goods and
percent of their incomes. Indeed, single-parent
services (some 40 percent to 50 percent larger in per
households spent an average of one-third of their per
capita terms) than in 1973. Second, this apparently
capita incomes for shelter, fuel, and utilities in 1985.
reflected increased preference for housing relative to
This compares with 27 percent in 1973 and with about
other goods, services, or savings.
22 percent for the general population in 1985.
Table 2 shows financial characteristics of three
selected groups of households in 1973 and 1985: young
households, elderly households, and single-parent
CONCLUSION
households. Because baby-boomers ranged in age from
Several conclusions seem worth noting from the
9 to 27 in 1973 and from 21 to 39 in 1985, comparing
income, expenditure, and housing consumption patterns
characteristics of the typical young household aged 25
observed from the Consumer Expenditures Surveys.
to 34 in those years should reflect changes attributable
First, from 1973 to the mid-1980s, all household groups
to coming of age of the baby-boom generation.
substantially increased their inflation-adjusted
As with households age 25 to 34, the elderly
expenditures for goods and services generally and for
comprised over one in five U.S. households in 1985,
housing services in particular. Second, because of
and their proportion is increasing; changes in their
substantial decreases in household size (except for the
expenditure patterns between 1973 and 1985 may be
elderly) during that period, per capita expenditures
instructive as to future patterns as well. Although
increased much more than did average household
single-parent families totaled only slightly over one in
expenditures (again, except for the elderly).
twenty U.S. households in 1985, they make up a rapidly
Third, because growth in real incomes was so
growing proportion of the population thought to face
uneven, in fact decreasing for young households,
special housing finance problems.
increased real expenditures posed quite different relative
Consistent with alternative data sources, young
burdens for disparate groups of households. Whereas
households appear to have suffered a decline in real
the typical U.S. household increased its total
incomes (nearly 4 percent) between 1973 and 1985,
expenditures as a percent of income from 80 percent to
although their per capita incomes increased nearly 14
88 percent between 1973 and 1985, the corresponding
percent. This apparent anomaly undoubtedly owes in
increase was from 79 to 86 percent for young
large measure to a nearly 16 percent decrease in the
households, from 87 percent to 96 percent for the
average size of households with heads aged 25 to 34
elderly, and from 103 percent to 108 percent for single-
during this period. At the same time, however, real
parent families. Corresponding increases in household
expenditures for shelter and for fuel and utilities
income spent for shelter, fuel, and utilities were from
increased by some 44 percent in per capita terms, about
15 percent to 22 percent for all households, but from
the same as for all households. Indeed, average
18 percent to 23 percent for young households and
incomes and expenditures for young households differ
from 26 percent to 33 percent for single-parent
little from the general population, either in terms of
households.
their 1985 levels or in changes occurring during the
Fourth, young households' income and expenditure
preceding 12-year period.
patterns seem to correspond closely with patterns for
Elderly households experienced a larger increase in
households generally. Whether this indicates that baby-
household income (11.4 percent) than did either of the
boomers are emulating other households or vice versa
other two groups discussed here. 8 But they, too,
is difficult to say. However, if the pattern continues as
10
REAL ESTATE OUTLOOK
Table 2
REAL INCOME AND EXPENDITURES BY HOUSEHOLD TYPE, 1973 and 1985
(in 1985 dollars)
$ Change
% Change
Income/Expenditures
1985
1973-85
1973-85
YOUNG HOUSEHOLDS®
Household Income
$25,535
-$1,050
- 3.9%
Household Expenditures
21,979
+ 994
+ 4.7
Per Capita Income
9,457
+1,149
+13.8
Per Capita Expenditures
8,140
+1,460
+21.9
For Shelter
1,654
+ 507
+44.2
For Fuel & Utilities
527
+ 162
+44.4
ELDERLY HOUSEHOLDSᵇ
Household Income
15,836
+1,617
+11.4
Household Expenditures
15,132
+2,725
+22.0
Per Capita Income
8,798
+ 434
+ 5.2
Per Capita Expenditures
8,407
+1,109
+15.2
For Shelter
1,338
+ 281
+26.6
For Fuel & Utilities
842
+ 218
+34.9
SINGLE-PARENT HOUSEHOLDSᶜ
Household Income
15,385
+ 575
+ 3.9
Household Expenditures
16,648
+ 1,400
+ 9.2
Per Capita Income
5,305
+ 677
+14.6
Per Capita Expenditures
5,741
+ 976
+20.5
For Shelter
1,239
+ 303
+32.4
For Fuel & Utilities
523
+ 208
+66.0
a Household head or individual aged 25-34.
b Household head over age 65.
c Household having one parent and children under age 18.
SOURCE: Marc E. Smyrl, Income and Expenditures of Selected Consumer Groups 1973-1985, CRS Report
No. 88-318S (Washington, D.C.: Congressional Research Service, The Library of Congress, 1988),
Tables VI, VII, X - XIII, pp. CRS-17, CRS-18, CRS-23, CRS-24, CRS-26, & CRS-27 based on
Consumer Expenditure Surveys 1972-73, and 1985.
DECEMBER 1989
11
baby-boomers move into middle age, projecting
housing demand will be difficult indeed.
Finally, that demographic factors are interrelated is
obvious, precisely how they are related less so.
Reduced average household size for most segments of
the population seems to account for per capita income
increases outstripping increases in average household
income, despite greatly increased numbers of two-earner
households. The usual explanation is that preferences
for living alone, for single-parenting, and the like
necessarily mean lower average household incomes
because of fewer earnings sources. An alternative
explanation seems equally plausible, namely, that
increased per capita incomes may have enabled many
individuals to form smaller households, thereby
occasioning increased housing consumption per person.
Both relationships undoubtedly exist, but we currently
have no way of knowing which predominates.
Nevertheless, increasing numbers of small and single-
person households which are relatively affluent could
increase the demand for smaller, well-appointed homes
but it is difficult to say with much certainty.
by
John Simonsin
Professor of Economics
University of Wisconsin-Platteville
Mary Schwartz
Housing Economist
Forecasting and Policy Division
1. See, for example, Michael Carliner, "Income distribution and the Housing Industry," Housing Economics, Vol. 37 (December 1988),
pp. 4-7.
2. A. home sold for $120,000 in 1981 was about equvalent to one selling for $150,000 in 1987. Existing home sales statlistics are from
Existing Home Sales 1985 (Washington, D.C.: NATIONAL ASSOCIATION OF REALTORS, 1986), Table 1, p.3 and Table 18,
p. 16; and Existing Home Sales, 1988 (Wasington, D.C.: NATIONAL ASSOCIATION OF REALTORS, forthcoming), Table 5.
3. See Michael Carliner, "Income Distribution and the Housing Industry," Housing Economics, Vol. 37 (December 1988), p. 6.
4. See Mary-Lynne Francois, "Recent Trends in the Size and Amenities of Newly Constructed Housing Units," Real Estate Quarterly,
Vol. 5 (Fall 1986).
5. "Characteristics of Housing Completed in 1988," U.S. Department of Commerce and U.S. Department of Housing and Urban
Development, Joint Release (March 2, 1989), Table 1.
6. U.S. Department of commerce and U.S. Department of Housing and Urban Development, Current Housing Reports, H-150-85,
American Housing Survey for the United States in 1985, (Washington, D.C.: U.S. Government Printing Office, 1988) I, Table 4-
13, p. 148 and Table 3-13, p.88.
7. Analysis in this section draws heavily upon Marc E. Smyrl, Income and Expenditures of Selected consumer Groups 1973-1985, CRS
Report 88-318 S, Washington, D.C.: Congressional Research Service, The Library of Congress, 1988.
8. This probably owes in part to average size of elderly households increasing from 1.7 persons in 1973 to 1.8 persons in 1985. See
Smyrl, Table XII, p. CRS-26.
9. Part of the explanation may be high underreporting of income for this group, e.g., undeclared child-support payments. See, for
example, Smyrl, p. CRS-22. However, that underreporting of income by single-parent households is any greater than for say, the
elderly, is largely conjectural.
10. U.S. Department of Commerce and U.S. Department of Housing and Urban Development, Current Housing Reports, H-150-85,
American Housing Survey for the United States in 1985, (Washington, D.C.: U.S. Government Printing Office, 1988), Table 403,
p. 24.
12
REAL ESTATE OUTLOOK
U.S. ECONOMIC OUTLOOK
DECEMBER 1989
QUARTERS
YEARS
ACTUAL
FORECAST
ACTUAL
FORECAST
1989.2 1989.3
89.4
90.1
90.2
90.3
90.4
91.1
1987
1988
1989
1990
1991
AGGREGATE ECONOMY
Gross National Product
(billions of dollars)
5202
5279
5350
5431
5502
5572
5642
5728
4524
4881
5233
5537
5860
% Change
7.1
6.1
5.5
6.2
5.3
5.2
5.1
6.3
6.9
7.9
7.2
5.8
5.8
% Change (w/out inflation)
2.5
2.7
1.7
1.7
1.4
1.5
1.6
2.3
3.7
4.4
3.0
1.8
2.1
Consumer Price Inflation (CPI)
6.4
2.4
4.0
4.2
3.9
4.2
4.1
4.1
3.7
4.1
4.8
4.0
4.1
GNP Inflation (GNP Deflator)
4.6
3.2
4.0
4.5
3.8
3.7
3.6
4.0
3.1
3.3
4.2
3.9
3.7
Unemployment Rate - Civilian
5.3
5.2
5.4
5.5
5.6
5.6
5.7
5.7
6.2
5.5
5.3
5.5
5.6
Civilian Employment-Household Basis (millions)
117.3
117.5
117.7
117.9
118.2
118.4
118.6
118.9
112.4
115.0
117.3
118.3
119.4
Percent change
1.3
0.7
0.5
1.0
0.8
0.8
0.7
0.9
2.6
2.3
2.1
0.8
1.0
Index of Industrial Production
141.8
142.2
141.8
142.1
142.0
142.9
143.6
145.4
129.8
137.2
141.8
143.9
146.8
Manufacturing Capacity Utilization
84.4
83.9
82.8
82.7
82.4
82.6
82.9
83.5
81.0
83.6
84.1
83.6
83.6
Domestic Auto Sales
7.3
7.9
6.2
6.6
6.9
7.0
6.8
7.0
7.1
7.5
7.2
6.8
7.0
Federal Tax Receipts (NIPA) as % of GNP
20.2
19.7
19.7
20.4
20.5
20.5
20.5
20.5
20.1
19.9
20.0
20.5
20.5
Federal Expenditures (NIPA) as % of GNP
23.0
22.6
22.7
22.7
22.6
22.6
22.5
22.7
23.7
22.9
22.9
22.6
22.5
Deficit(NIPA)
-145.4
-149.4
-147.8
-125.3
-118.2
-118.7
-117.3
-125.6
-161.3
-145.9
150.7
-119.9
-121.8
as % of GNP
-2.8
-2.8
-2.8
-2.3
-2.1
-2.1
-2.1
-2.2
-3.6
-3.0
-2.9
-2.2
-2.1
REAL ESTATE MARKETS
HOME SALES
Total Single-family Home Sales
(thousands, single-family resales plus
97 percent of single-family starts)
4286
4405
4376
4278
4383
4433
4402
4410
4633
4650
4395
4374
4443
Percent change -- year ago
-8.2
-6.1
-10.2
-5.2
2.3
-0.3
1.0
3.1
-1.6
0.3
-5.5
-0.5
1.6
Existing Single-family Home Sales (thousands)
3323
3443
3385
3245
3339
3404
3389
3408
3512
3594
3407
3345
3450
Percent change -- year ago
-8.8
-6.0
-10.2
-6.7
0.5
-1.1
0.1
5.0
-1.4
2.3
-5.2
-1.8
3.2
Housing Starts (thousands)
1352
1339
1402
1452
1466
1460
1448
1444
1634
1495
1428
1457
1435
Percent change -- year ago
-8.4
-8.8
-9.8
-4.3
8.4
9.1
3.3
-0.5
-9.8
-8.5
-4.5
2.0
-1.5
Single-Family Units
993
992
1022
1065
1076
1061
1044
1034
1156
1088
1019
1061
1024
Percent change -- year ago
-6.2
-6.1
-8.9
-0.4
8.4
6.9
2.1
-3.0
-2.2
-5.9
-6.4
4.2
-3.5
Multi-Family Units
360
346
380
387
390
400
405
411
477
407
384
395
411
2-4 Family Units
53
57
60
61
61
63
64
65
65
59
57
62
65
Percent change -- year ago
-8.1
-5.8
-11.2
2.3
15.4
10.0
5.8
6.2
-23.0
-9.5
-3.4
8.8
4.0
5+ Family Units
307
289
320
326
329
337
341
346
412
348
326
333
347
Percent change -- year ago
-15.0
-17.4
-12.2
-16.1
7.1
16.6
6.7
6.2
-24.4
-15.6
-6.2
2.2
4.0
New Single-family Home Sales (thousands)
636
705
635
546
577
610
588
616
673
677
650
580
649
HOME PRICES
Existing Home Prices Median $(1000)
93.0
95.3
94.5
96.2
97.9
100.2
99.7
101.4
84.9
88.9
93.5
98.5
103.4
Percent change -- year ago
4.6
5.7
6.6
5.4
5.3
5.2
5.5
5.4
5.8
4.7
5.2
5.3
5.0
New Home Prices - Median $(1000)
119.5
120.1
125.0
123.4
126.3
127.3
128.4
129.7
104.7
113.9
120.7
126.3
133.1
Percent change -- year ago
5.8
4.5
8.9
4.6
5.7
6.0
2.7
5.1
13.5
8.8
6.0
4.7
5.4
FINANCIAL MARKETS
Long-Term Interest Rates
30-year Fixed Rate Mortgage (FHA Secondary)
10.5
9.8
9.8
9.6
9.4
9.4
9.5
9.7
10.2
10.5
10.3
9.5
9.8
1-year ARM (effective rate)
9.7
9.7
9.5
9.2
9.0
9.0
9.1
9.2
8.5
8.5
9.7
9.1
9.3
Corporate AAA Bond Rate
9.5
9.0
8.8
8.6
8.4
8.4
8.5
8.5
9.4
9.7
9.2
8.5
8.8
Government Bond Rate
8.7
8.1
7.9
7.7
7.5
7.5
7.6
7.8
8.6
9.0
8.4
7.6
8.0
Short-Term Interest Rates
Federal Funds Rate
9.7
9.1
8.6
8.3
8.0
8.1
8.2
8.4
6.7
7.6
9.2
8.2
8.4
3-month T-Bill Rate
8.4
7.8
7.6
7.3
7.0
7.2
7.2
7.4
5.8
6.7
8.1
7.2
7.4
Prime Rate
11.4
10.7
10.3
10.0
9.8
9.8
9.7
9.7
8.2
9.3
10.8
9.8
9.8
Discount Rate
7.0
7.0
7.0
7.0
6.7
6.5
6.5
6.5
5.7
6.2
6.9
6.7
6.5
Value of the U.S. Dollar (Trade-Weighted Avg.)
100.4
100.5
97.9
96.2
93.9
91.8
90.4
89.7
96.9
92.8
98.7
93.1
89.9
Percent change
19.7
0.4
-9.8
-6.9
-9.3
-8.5
-5.8
-3.0
-13.6
-4.3
6.4
-5.7
-3.5
Source: Forecast produced using Laurence H. Meyer and Associates' model of the U.S. economy.
Assumptions and simulations by Dr. John Tuccillo, Dr Frederick Flick, and Sean Burns.
STATE
.
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REALTOR
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STABLE MORTGAGE RATES BOOST HOME RESALES IN NOVEMBER, NAR SAYS
WASHINGTON (Dec. 27, 1989) Continued declines in mortgage interest
rates boosted sales of previously-owned homes in November to the highest level
of the year, according to the National Association of Realtors.
The association recorded a seasonally adjusted annual sales rate* of
3.59 million existing single-family homes last month, which rose 3.2 percent
from October's rate of 3.48 million units. The resale pace was the highest
since December 1988, when NAR recorded a rate of 3.92 million units.
However, resales overall were slower than that of one year earlier. The
national resale rate was 3.2 percent below that of November 1988, and year-
to-year declines were posted for the Northeast and West.
Sharp differences between sales activity in high-cost areas and more
moderately-priced markets likely will continue next year, said NAR President
Norman D. Flynn. But, the combination of interest rate stability and level
home prices likely will keep home sales strong overall, he noted.
He discounted recent reports of a pending national housing recession,
noting that such predictions are based primarily on a slowdown in expensive
markets, particularly in the Northeast, where prices reached an unsustainable
level.
In addition, Flynn pointed out that an examination of the performance of
home prices over the past several years shows that housing has been a positive
investment for the typical American family. "People who are predicting hard
times for housing are not considering how much prices rose in high-cost areas
over the past few years," Flynn said.
For instance, in the Northeast, the median existing-home price for
November was $145,800, which was 3.6 percent higher than that for November
1988. However, over the past five years, the Northeast median price has surged
more than 85.0 percent.
-more-
W-123/N-95
REALTORS® is a registered collective membership mark which may be used only by
real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS®
and subscribe to its strict Code of Ethics.
EQUAL HOUSING
OPPORTUNITY
NOVEMBER EHS one
In November, the resale pace in the Northeast was 590,000 units, 1.7
percent above the October pace, but 13.2 percent below the pace of a year ago.
"Some large, high-cost markets have experienced some softening this
year," said NAR Chief Economist John A. Tuccillo. "However, many smaller,
secondary cities are quite strong. When combined, this may average out as an
overall slowdown in sales and prices at the national level. But, it doesn't
mean the sky is falling."
On a national basis, falling mortgage rates likely will keep home sales
steady, as home buyers continue to take advantage of favorable financing,
Tuccillo said.
According to the Federal Home Loan Mortgage Corp., the national average
commitment rate for 30-year, conventional, fixed-rate mortgages declined from
9.82 percent to 9.74 percent during November.
The national median price for existing single-family homes in November
was $93,000, up 5.1 percent from November 1988. Half the homes sold for more
than the median, half for less. So far this year, the national median home
price has remained in the low- to mid-$90,000 range.
The South recorded a resale pace of 1.42 million units, rising 9.2
percent from October, and 0.7 percent from one year earlier. There, the median
existing-home price was $82,400, rising 2.5 percent from November 1988.
In the Midwest, the resale pace was 950,000 units, 4.0 percent below
that for October, but 1.1 percent above the November 1988 rate. The median
price in the Midwest, $70,900, was 5.2 percent higher than the price one year
ago.
"Lower mortgage rates and affordable home prices are bringing moderate-
income buyers into markets in the South and Midwest," Tuccillo said. "The
median prices for those regions reflect the large volume of sales of lower-
priced housing."
In contrast, the West, with concentrations of high-cost housing, posted
a November median existing-home price exceeding that for the Northeast. There,
the median price was $150,200, jumping 14.7 percent from November 1988. The
resale pace in the West, 640,000 units, rose 3.2 percent from October, but
fell 5.9 percent from one year ago.
In November, there were 2.42 million existing single-family homes
available for sale, representing an 8.1-month supply at the November resale
rate. In October, an inventory of 2.17 million units was recorded, which was a
7.5-month supply at the October resale rate.
-more-
NOVEMBER EHS - - add two
The National Association of Realtors, the nation's largest trade
association, is the voice for real estate, representing more than 800,000
members involved in all aspects of the real estate industry.
###
*The annual rate for a particular month represents what the total number
of actual sales for a year would be if the relative resale pace for that month
2
were maintained for 12 consecutive months.
Seasonally adjusted annual rates are used in reporting monthly data to
factor out seasonal variations in resale activity. For example, home sales
volume normally is higher in the summer and relatively light in the winter
months, primarily because of differences in the weather.
EXISTING SINGLE-FAMILY HOME SALES VOLUME (Units)
United
North-
States
east
Midwest
South
West
Annual Total
1981
2,419,000
353,000
632,000
917,000
516,000
1982
1,990,000
354,000
490,000
780,000
366,000
1983
2,719,000
493,000
709,000
1,035,000
481,000
1984
2,868,000
511,000
755,000
1,073,000
529,000
1985
3,214,000
622,000
866,000
1,172,000
554,000
1986
3,565,000
703,000
991,000
1,261,000
610,000
1987
3,526,000
685,000
959,000
1,282,000
600,000
1988
3,594,000
673,000
929,000
1,350,000
642,000
Seasonally Adjusted Annual Rate
1988:
Nov.
3,710,000
680,000
940,000
1,410,000
680,000
Dec.
3,920,000
700,000
1,010,000
1,500,000
700,000
1989:
Jan.
3,550,000
710,000
930,000
1,310,000
630,000
Feb.
3,480,000
600,000
920,000
1,310,000
640,000
Mar.
3,400,000
570,000
870,000
1,270,000
670,000
Apr.
3,400,000
610,000
890,000
1,280,000
620,000
May
3,210,000
610,000
810,000
1,230,000
580,000
Jun.
3,360,000
510,000
960,000
1,280,000
600,000
Jul.
3,330,000
550,000
910,000
1,300,000
570,000
Aug.
3,480,000
590,000
980,000
1,350,000
550,000
Sep.
3,520,000
590,000
990,000
1,340,000
590,000
Oct. [r]
3,480,000
580,000
990,000
1,300,000
620,000
Nov. [p]
3,590,000
590,000
950,000
1,420,000
640,000
Source: NATIONAL ASSOCIATION OF REALTORS
[r] = Revised
[p] = Preliminary
REGIONS OF THE UNITED STATES
NORTHEAST:
Connecticut; Maine, Massachusetts; New Hampshire; New Jersey;
New York; Pennsylvania; Rhode Island; Vermont
MIDWEST:
Illinois; Indiana; Iowa; Kansas; Michigan; Minnesota; Missouri;
Nebraska; North Dakota; Ohio; South Dakota; Wisconsin
SOUTH:
Alabama; Arkansas; Delaware; District of Columbia; Florida;
Georgia; Kentucky; Louisiana; Maryland; Mississippi;
North Carolina; Oklahoma; South Carolina; Tennessee; Texas;
Virginia; West Virginia
WEST:
Alaska, Arizona; California; Colorado; Hawaii; Idaho; Montana;
Nevada; New Mexico; Oregon; Utah; Washington; Wyoming
MEDIAN SALES PRICE OF EXISTING SINGLE-FAMILY HOMES
United
North-
States
east
Midwest
South
West
1981
$66,400
$63,700
$54,300
$64,400
$96,200
?
1982
67,800
63,500
55,100
67,100
98,900
1983
70,300
72,200
56,600
69,200
94,900
1984
72,400
78,700
57,100
71,300
95,800
-
1985
75,500
88,900
58,900
75,200
95,400
1986
80,300
104,800
63,500
78,200
100,900
1987
85,600
133,300
66,000
80,400
113,200
1988
89,300
143,000
68,400
82,200
124,900
1988: Nov.
88,500
140,700
67,400
80,400
130,900
Dec.
88,700
143,000
67,700
78,200
128,700
1989: Jan.
$89,700
143,800
67,800
82,400
130,700
Feb.
91,900
142,600
69,900
86,700
127,800
Mar.
92,000
143,600
69,900
84,000
138,000
Apr.
92,900
144,000
70,400
85,200
142,700
May
92,600
143,800
70,300
84,100
142,300
Jun
93,400
149,900
72,000
85,000
134,500
Jul.
96,700
147,100
73,400
87,200
146,500
Aug.
94,800
149,000
71,900
86,100
147,500
Sep.
94,300
145,700
72,200
84,400
147,600
Oct. [r] 92,600
143,200
71,600
83,600
142,300
Nov. [p] 93,000
145,800
70,900
82,400
150,200
SOURCE: NATIONAL ASSOCIATION OF REALTORS
[r] = Revised
[p] = Preliminary
National Association of Home Builders
GRAND OPENING CEREMONIES
11:00 a.m.
Friday, January 19, 1990
PRODUCTION SCHEDULE
11:00 a.m.
Overture - Atlanta Pops Orchestra
11:06
Offstage intro of MC Johnny Mann
11:07
Johnny Mann intro Joint Service Color Guard
11:10
Johnny Mann intro Pledge of Allegiance (person to be determined)
11:12
Color Guard off
11:14
Johnny Mann intro Patsy Garner, NAHB Convention Chairman (will
give remarks on scope of convention)
11:18
Patsy Garner intro Shirley Wiseman
ribbor
11:19
Shirley Wiseman speaks of accomplishments of NAHB in 1989
citting
1ST
11:23
Shirley Wiseman intro President Bush
11:24
President Bush speaks
11:40
President Bush, NAHB Senior Officers and Patsy Garner cut ribbon
11:42
(At this point, the President may leave the stage and building or
remain for the Lee Greenwood performance)
11:42
Shirley Wiseman intro Lee Greenwood
11:43
(Lee Greenwood will sing both or only one song. depending on
President Bush's schedule)
11:43
Lee Greenwood sings "I OWE YOU" to track
11:46
Lee Greenwood intro chorus, children and sings live with Atlanta
Pops, "GOD BLESS THE USA"
Page 2 (Opening Ceremony)
11:50
(If President Bush remained for "GOD BLESS THE USA", he would
leave the Omni Coliseum at this time)
11:51
Johnny Mann requests the crowd to remain seated for finale
11:53
Johnny Mann intro Atlanta Pops orchestra and chorus medley
11:56
Johnny Mann intro production number of National Anthem, chorus
and soloist.
11:57
Special Production of "NATIONAL ANTHEM"
12:02
Reprise and special effects on finale
12:04
Johnny Mann thanks everyone and gives exit instructions
NO!
here has
for housing, the
been a
T and the me-
REAL ESTATE PRICES
National Association
great deal
WILL
of Home Builders
of specu-
(NAHB) and BUILDER
lation re-
cently in
NOT
sought second opin-
ions. For this spe-
academia
cial report, we asked
COLLAPSE IN THE 1990s.
NAHB President
dia about the future
Martin Perlman and
appreciation rate of
five prominent
residential property. Some have even
housing market analysts to present their
gone so far as to suggest that real house
views on the outlook for home prices
values could decline by as much as 47
and to respond to the theory that a col-
percent during the next 20 years. Con-
lapse of real estate values is just around
fronted with this near fatal prognosis
the corner. Here are their responses.
HeRe's
THE
BIG
CRASH
THEORY
OF REAL
ESTATE
By Martin Periman
President
National Association of
Home Builders
ou've read about it before in your morning
costs in this process bureaucratic delays in pro-
Y
newspaper. "Good Morning America. The real
subdivision plans that can drag on for months
or
estate market is about to collapse." It goes like
years: escalating taxes, fees and builder-provided
this: the market sottens. then turns sour. De-
ments to the public infrastructure: and the act
mand evaporates. Real estate values plunge.
increases in labor and materials to clear. grade
Homes once priced at $200.000 are now worth
land into developed lots.
$100,000.
What about raw land prices? Isn't undevelope
Crazy as it might seem. the media is enchanted
market- or demand-driven? That's true. but that
with a doomsday scenario, And the media ted just enough
mean land values will drop 50 percent as soon
tidbits of information to keep the presses rolling on the
diminishes. Sure. highly leveraged land speculators who
digs up
"big crash" theory of real estate.
bought at the peak of the market may get burned.
So let's set the record straight.
in some fire sales. Bur most land is owned outright by
New home prices and real estate values don't follow a
individuals or corporations, both of which have the staying
straight line. They rise, level off and. in some cases, even
power to ride out a downturn. Land owners will take their
dip, according to economic and market conditions. For
land off the market. and wait for the next expansion rather
example, real estate values rose rapidly during the late
than dump the property at rock-bottom prices.
1970s when inflation was at or near the double digits and
Moreover, the great land crash theory ignores one of
the economy was red hot. When the economy fell into its
the basic laws of economics in a capitalist society: 15 a
deepest recession in modern history in the early 1980s,
resource becomes scarce, its value increases. That's true
appreciation rates and prices flattened out. As the recovery
for land. particularly in highly populated urban areas where
gathered momentum, values shot up between 1985 and
land suitable or zoned for residential development is in
1988. Now they appear to be leveling off again as the
short supply.
market and economy slow.
Then add in the costs of labor (most subcontractor costs)
People tend to forget or never consider the fact that the
and materials, which account for close to half of the sales
costs of constructing housing are "built in." A builder
price. Sure, you might be able to negotiate a better deal
doesn't arbitrarily set his prices. He looks at his costs, his
with your subs during a bad market when they are eager
competition. and his market.
for work.; What we really gain during downturns is better
First. consider the hard costs of building a home. Start
quality work. fewer scheduling bottlenecks and quick de-
by adding up the costs of buying and financing raw land.
livery of building materials to the site. But those savings.
and then turning that land into developed lots. That's a
in dollars and cents. are not great. By and large. labor and
pretty good start, accounting for berween 25 to 35 percent
material COSTS don't tumble during recessions: they just
of the sales price of a home. And there are plenty of hidden
level off.
Marcin Periman. who how built more than 5.000
single-family houses in the Houston market sance
1961. in the 1990 president of the 157.000-member
Homes Less Prone To Sharp Swings
National Association or Home Builders. He
new d B.A. in political science from the
Stock prices have risen and fallen sharply on numerous
University of Texas.
occasions during the past 20 years. In sharp contrast,
the annual increase in home pr: has been much more
predictable. averaging about 7 percent per year since
1970.
In terms of soft costs. a builder's financing and mar-
keting costs are more likely to go up than down during
recessions. We carry finished homes. developed lots and
land for longer periods and usually at higher interest rates.
And ive make more concessions to close sales - free options
and upgrades as well as interest rate buy downs. We pur-
chase more ads to attract buyers and spruce up our model
homes to compete for a declining number of customers.
But the doomsayers never even consider the actual costs
of land and construction as a key factor in setting home
values. Instead. they cite demographic trends. The baby
boom following World War II is now giving way to the
baby bust generation born in the late 1960s and 1970s.
Therefore, they contend. demand for housing will weaken
and values will drop. But that simplistic scenario defies
some basic logic.
First. it incorrectly assumes that housing demand is
created almost entirely by a single generation. That's sim-
ply not so. But even if it were true only about half of the
77 million baby boomers now own homes. Many will marry
later in life and purchase their first homes in their late
thirties or early forties. Others will divorce and remarry,
creating new householde.
Moreover, people rarely stay in the same home forever.
They buy second. third and even fourth homes as they
move through different stages of their lives. And people
live longer, creating a growing demand for all types of
housing designed for the elderly. So while the numerical
House Prices Outpace Stocks
size of any age group will indeed fluctuate according to
Between 1970 and the end of 1989, the median price of
birth rates years ago. it is important to remember that the
an existing home rose 300 percent compared to a 250
overall population of America is still increasing and that
percent increase recorded by stocks listed on the Dow
its population is becoming increasingly diverse.
Jones Industrial Index.
Making the Most Out of a $10,000
Investment
in savings as a downpayment on a home: the other buys
Often overlooked when comparing investment options
a $10.000 Treasury bond and continues to rent. Look-
are the leveraging and tax advantages of purchasing a
ing at the bottom line 10 years later. the home owner
home. This hypothetical example analyzes those benefits
outearns the renter by more than $49,000 on the initial
over a 10-year period. One household uses its $10.000
$10.000 investment.
Secondly. the U.S. is a huge country with thousands of
nationwide. the entire country would have faced nothing
individual housing markers. And its people are on the
short or a financial collapse.
move, changing residences. on average. every seven years.
But real estate is a seasoned veteran of the business
The population may rise in one market and fall in another.
cycle. Home values have weathered the ups and downs or
which makes comparing the national demographic statis-
seven cycles since the end of World War II. During mose
tics against housing production numbers a rather useless
50 or so years. housing has appreciated at a rate ghrly
exercise until somebody creates an inexpensive method for
above the nation's inflation rate.
transporting existing housing from one area of the country
And U.S. housing costs although high by our
-tan-
to another.
dards - are well below those of other industrialized nations
Finally, the building business is fiercely competitive -
in Europe or the Far East. In terms ot per-foot-costs.
a fact largely ignored by academics trying to make a name
amenities and quality, U.S. housing is still the best buy in
for themselves, stock analysts with their own ax to grind
the world. Recently I asked a Japanese business acquaint-
and others trying to sell the doomsday theme. Competition
ance why his fellow countrymen were paying what I con-
is the great equalizer. It keeps prices down and quality
sidered outrageous prices for commercial real estate in
up. If a builder's prices are too high. it won't take long
Southern California. He smiled. responding, "We see L.A.
for competitors down the street to put him out of business.
as the Tokyo of the 1950s."
History. perhaps, is the best predictor of what the future
America's 60 million home owners have very little to
may bring. Sure, extreme circumstances can topple any
worry about. The total value of owner occupied housing
market. We saw real estate values skid during the Great
is more than $4 trillion. accounting for about one fourth
Depression and, more recently, in Houston, Denver and
of our nation's total wealth. But more importantly. housing
other oil patch markets when their super-heated. energy
is "home" to us, insulating the value of:our homes from
production driven economies of the early 1980s collapsed
the violent gyrations that can send stocks up one day and
almost overnight. But those were the exceptions rather
down the next. We are tied to our housing, emotionally
than the rule. In fact. had the extreme conditions that
as well as economically. And we will always need a place
brought down the Houston and Denver economies spread
to sleep.
Barbara Allen
Barbara Allen is " vice president and housing
analysi for Kidder. Peabody ¿' Co.. Inc. She
previously worked for Prudential-Bache Securities.
She has an MBA from the University or Alabama.
ouse price collapses are a favorite forecast of
they point out that "there continue to be substantial
H
"media" economists and their comrades in crisis-
vantages to homeownership. Could these have in impact
mongering. the media. Instead of providing ra-
on pricing? The authors don't say. And they add there
tional discourse and dispassionate perspective
is substantial uncertainty about future housing prices.
1.
on economic trends. the forecasts that [ have
:ing.
examined closely have several common
:
ew can anyone take this seriously in must
characteristics:
enough to predict housing prices. but a recent 1.1 RV the
Abject ignorance about the quality or lack thereof-
Housing Information Council or New Jersey caprures THE
of various housing data. Relevant analysis or any topic
view quite aptly. Next to a picture or an actual house. the
begins with an assessment of the usefulness and reliability
copy states (and [ paraphrase) that the house -old or
of available data.
$5,800 in 1924 and since then. the U.S. has entrired over
An inability to incorporate (or even perceive) the mul-
50 years of calamities: a stock market crash. the Great
tiplicity of factors that comprise housing trends. A me-
Depression. a world war, two undeclared wars. biones
chanistic extension of current and implied demographic
yippies. yuppies, 17½ percent mortgage
trends is a tried-and-true recipe for forecasting failure.
other stock market crash. Despite all this. the same nouse
Just ask Malthus.
recently sold for $550.000.
An underlying tone of condescension. creating suspicion
I calculate the annual price change on that is
a
about motivation. In two instances, this turns to contempt
positive 8 percent. significantly better than the long-term
for the readers intelligence when one considers the writers'
inflation rate of 5-4 percent. Another calculation ! did
conclusions.
recently. using the Commerce Department's constant-quality
Barow
For example:
index over the past 25 years. genèrates a 6 percent annual
10
The Comstock Partners' Homesick predicted a national
price gain for housing.
article
collapse in real estate prices (and Lquote: "[Houston.
Compared to stocks which have traditionally (over 50
Dallas, and Denver] will probably prove to be mere warm-
years) generated 9 percent annual growth housing is far
ups for the main event on a national basis", and recom-
less volatile. In financial terms. on a risk-adjusted basis.
mended purchase of the equities of thrifts, regional banks,
housing has been a clearly superior investment for the
and money center banks.
typical American. And I have not included tax benefits or
The Mankiw-Weil piece predicting a 47 percent decline
the emotional positives of owning one's home.
in real housing values ended with the following: "Does
I suspect that the next 50 years are likely to contain
our finding imply that readers of this paper should sell
many calamities similar to those that dotted the preceding
their homes and become renters? There are at least three
half-century. I also suspect that house prices are likely to
reasons that such an action may not be called for." Then
rise over time at a rate exceeding inflation by 1 to 3 percent
annually.
6
lose 1 in
by contusing the asser price ot the existing housing stock
with the supply price of new housing construction. the
Mankiw and Weil paper is fundamentally flawed. While
useful in stimulating discussion as to how best to model
housing asset prices. the paper provides little empirical
understanding of either the cause of past housing price
increases or likely future trends in housing prices.
Simple logic suggests the need to understand the rela-
tionship between construction costs and the price of ex-
isting housing. A slowdown in household growth may in-
deed reduce housing prices in some market areas. but these
declines are limited over time by housing construction
costs. Any substantial decline in house prices would result
in cutbacks in new construction and investment. This slow-
down in the expansion of housing supply will continue
until household and income growth expands demand and
exerts sufficient pressure on housing prices to trigger in-
creased new construction activity.
Housing construction involves payments for land. labor.
William C. Apgar, Jr.
building materials. and construction period financing, as
well as builder profits. A slowdown in residential con-
struction may reduce interest rates or building material
William C. Apgar, Jr. is an associate professor at
Harvard's John F. Kennedy School of Government
prices. but in an emerging global economy, interest rates
and acting director of the Joint Center for Housing
and the costs of building materials are increasingly insen-
Studies of Harvard University. Apgar received "
sitive to fluctuations in the domestic economy. Similarly,
Pb.D. in economics from Harvard University
a slowdown in housing construction may limit employment
and specializes in housing and community
opportunities in residential construction. but this alone is
development research.
unlikely to reduce construction sector wages. Indeed by
slowing the rate of growth of the labor force, the aging of
the population could very well exert upward pressure on
wages in all sectors of the economy.
he recent Joint Center for Housing Studies Re-
These comments suggest that any major decline in hous-
T
port. The State of the Nation Housing. focuses on
ing construction costs must come out of land or builder
the problems caused by the continuing high cost
protits. A slowdown in housing construction mav indeed
of housing. As the report observes. there is much
limit builder protits. But the housing sector of the economy
disagreement about the causes and the extent of
is highly comperitive. which keeps profit margins from
these housing problems. No place is this more ap-
getting out of line. To the extent that builders are unable
parent than in the current disagreement among forecasters
to diversify into residential rehabilitation or other con-
over house price trends and the implications ot these trends
struction. they will leave the industry, preserving the proit
for housing affordability in the decade ahead.
margins of those who remain.
Though down from its early 1980s peak. the cost of
Now accounting for some 50 to -10 percent of the cost
homeownership remains high relative to the income of
of a new unit. land price trends are key to forecasting
potential first-time home buyers. Following sharp rent in-
future construction costs. The growth of households and
creases in the mid 1980s. rent burdens also stand at record
housing demand will slow. not stop. in the years ahead.
high levels. Admittedly, the affordability picture may
The new housing construction that must take place to
brighten in the future. as income growth slowly overtakes
accommodate this growth will continue to exert pressure
past price increases. but this process is slow and of little
on available land resources. Without a major change in
importance to those caught in the housing cost
public attitudes concerning growth and development. con-
squeeze.
tinued growth pressures will keep land prices from falling
In sharp contrast to this cautious view is the widely
sharply in the years ahead.
discussed forecast of Gregory Mankiw and David Weil.
In short. it is unlikely that the asset price of the existing
In a paper, first released by the prestigious National Bu-
housing stock will fall substantially in the years ahead since
reau of Economic Research, Mankiw and Weil write that
it is unlikely that housing construction costs will decline
the aging of the baby boom and the resulting doctinezio
significantly. Rather than focus on the single equation of
household growth imply that, "the real housing prices will
Mankiw and Weil, those concerned with future house price
fall by a total of 47 percent by the year 2007.
trends would do better to examine factors that influence
Admittedly forecasts of house prices test the limits of
S long term trends in construction cost. It is these trends
economic analysis. Housing economists have fundamental
^
that guide long term price dynamics and limit any per-
disagreements as to why house prices soar in one region
sistent decline in asset prices.
and fall in another. so it is little wonder that there is no
The need for this continuing study is significant. For
consensus on future trends. What is hard to understand
many Americans. their homes are their largest single asset
is the widespread attention given the Mankiw and Weil
and homeownership provides a large portion of their ac-
paper. With a single equation, Mankiw and Weil attempt
cumulated wealth. Arguably there is no price more im-
to model complex housing market dynamics. Moreover,
portant in the American economy than the price of housing.
cut / line
slowing of
lose
inem
Kent W. Colton
Kent IV. Colton is executive vice president and chief
executive officer of the National Association of Home
Builders. Formerly the staff Director of President
Ronald Reagan Commission on Housing, Colton
received is Pb.D. in urban studies from the
Massachusetts Institute of Technology.
eriodically. stories or "studies" appear suggest-
for housing will slow.
P
ing a crash in house prices. Mthough most fam-
However. it is important to remember
ilies buy a home so they will have d piace to live
housing will continue to grow in the decades anead.
in comfort and security. the investment aspects or
though the rate of growth in demand will drop. reflecting
homeownership are obviously important to home
demographic factors. This slowdown in demand
buyers. and "crash" stories raise concerns. There-
will not be sudden. severe or unexpected. In fact
fore. a key question is: Where are house prices headed in
slowdown in demographic demand began in the
the future?
and the slowdown in the rate of househoid formations
First. it's important to realize that over the last decade
the 1990 will only be about half as severe as the
there have been significant differences between the various
in household formations in the 1980s compared
regions of the country. A severe recession in the oil patch
1970s.
states led to house price drops in certain areas of the
Moreover, because the population age structure
country, while prices in other regions increased substantially.
ing to a greater concentration of middle-aged people and
Now. parts of Texas and other states are beginning to
households. most of the cutback in housing demand
revive. even as other markers slow down. Regional vari-
be absorbed by a drop in apartment construction
ations will undoubtedly continue from year to year, so
duction of mobile homes. The market for single-rance
home buyers and home owners need to watch longer term
homes should remain fairly strong - as long as the
national trends with local variations in order to project
holds steady. Also. housing demand will continue
?
house price trends in their particular market.
trade-up housing because people who already on
Over time. housing has been a safe. steady. and prof-
first home will want to "move-up" to a bigger
itable investment. Over the last 20 years. the median price
desirable home.
of new homes has increased at an overall rate that is greater
In addition, as current and potential home owners look
than the Dow Jones stock market average. Perhaps even
ac the value of housing compared to other investments.
more important. the rise has been steady - especially com-
the tax benefits and the "leverage" advantages ot buying
pared to stock prices. The relative lack of volatility in home
a house are significant. (By "leveraging mean investing
values. and the effectiveness of homeownership as a hedge
a comparably small amount of money to make a down-
against inflation, reflect the fact that acquiring shelter is
payment, while realizing an increase in appreciation based
the primary motivation for most home purchases. People
on the full value of the house). These benefits provide
generally don't dump their homes, as they might dump
further stability to house prices over time.
stocks bonds, commodities in response to a shift in
New, house prices in the future. then. will depend on
the market.
the cost of producing additional homes. Over the long
In looking at where house prices are headed in the
term, if house prices are too low to cover the cost or raw
future, we must look at overall demand. There has been-
land. land development. construction, overhead. financing.
a-let of talk about the "baby boom" giving way to the
and normal profits, builders will stop building and there
"baby bust," and indeed. the overall growth in the demand
won't be enough new homes to meet the demand from
additional households and to replace units lost from dis-
Cut
line
Family Housing Starts by Decade
1970-79
11,430.000
1980-89
9.870.000
1990-99
9,000.000
9 Million Single-Family Starts
11.4
Projected for the 1990s
NAHB projects 9 million single family starts for the 1990s.
down from the record: 11 million started in the 1970s.
aster. demolition. or obsolescence. On the other hand. if
home prices rise beyond the point necessary to provide
normal protits after paying normal costs. then more build-
ers will enter the market and the competition will bring
prices back into line.
This doesn't mean that demand doesn't affect prices.
since the prices of many of the materials and services
contriburing to a new home's price are sensitive to demand.
Over the longer term. though. weaker demand in home
building will cause labor and capital to move into other
areas of the economy.
As [ noted. regional variations can be significant. and
several areas ot the country have experienced reductions
in demand growth far more severe than those projected
for the country as a whole in the 1990s. Except where
house prices had been intlated by speculative investment
and imprudent lending, those regional slowdowns did not
translate into price declines.
In summary. then. house prices in the years ahead are
likely to move roughly in line with overall inflation. Whether
they increase more or less than inflation will depend on
the strength of regional markets along with a number of
other contributing factors. Shortages of land available for
development in urban areas and local jurisdictions' in-
creasing use of impact fees and growth controls will tend
to raise house prices. while improvements in productivity
Nearly 106 Million U.S. Households
will tend to lower prices. House prices are also very sen-
sitive to interest rates and energy prices, because financing
Projected by Turn of Century
The total number of U.S. households will continue to
costs and the costs of energy-intensive materials. such as
rise in the 1990s. although at a slower pace than,the
cement, are major factors in the cost of producing housing.
1970s when the baby boom generation first hit the
Even though the price of a constant-quality house will
housing market. The U.S. Bureau of the Census pro-
move roughly in line with inflation, the median new home
jects the formation of 11 million additional households
price will increase faster than inflation. because new houses
between now and the turn of the century. The biggest
will continue to be bigger with the new features and high-
increases in the number of households will be among
quality components demanded by the "trade-up" market.
households in the 35-54 age range and those over 75.
0
P/70to
Bruce
wells
1989
Robert Van Order
Chief Economist, Freddie Mac
15
Robert Van Order chief economist at the Federal
Home Loan Mortgage Curporation, responsible for
primary and secondary mortgage market analysis
and research. inderseconomic analysis and
foreeaving. He holds is Ph.D. in economics from
Johns Hupkins University.
ill house prices continue is grow is the have
it leaves out other factors. such as the effects of growth
W
in the past? In the short run. house price
controls and the role of taxes and inflation. that might
changes are dominated by the overail state of
explain some of what happened. In any event. gradual
the economy. When inflation rates go up. as in
(remember we have 20 years) adjustment of housing sup-
the 1970s. house prices follow. though not per-
ply should minimize most of any disruptions that demo-
fectly. Business cycles are notoriously hard to
graphic changes will cause.
forecast. which limits a lot or what we can say about the
Nonetheless. the statistical results in the study are 100
next few years. However. if we take a longer look. say
strong to dismiss entirely, and they- are not
over a 10- or 20-year period when cycles are "averaged
1970s. There was a decline in "real" prices in the late 1950s
out, we can say more.
and early 1960s when a similar demographic change the
A recent study by Gregory Mankiw and David Weil
relatively sparse group born in the 1930s and early 1940s
("The Baby Boom. The Baby Bust. And The Housing
was coming of age) took place. Furthermore. house prices
Market") takes a long-term look and estimates the effects
probably have not kept up with inflation tor much or the
of long-run demographic changes on house prices for the
1980s. so there is some recent precedent for real price
next 20 years. Their study comes up with the often-quoted
declines. Hence, I think that we will see house prices grow
prediction that inflation-adjusted house prices will fall by
by less than the intlation rate in the 1990s. Mankin
47 percent over the next 20 years. This sounds rather
Weil could be half-right: we could see prices mse by
shocking, and indeed. it is almost certainly an overestimate.
percent less than inflation. However. absent cyclical changes
However, even on its own terms it is not as bad as it looks.
(e.g., a real credit crunch), that is an upper limit and I
The 47 percent is spread over 20 years (about, percent
am skeptical about a real decline persisting for as long as
,compounded
per year) and it is for inflation-adjusted prices. That is, they
20 years. Over the last 25 years. house prices have grown
do not predict that house prices will fall, only that they
on the average by about 0.5 percent more than general
grow by 2 percent per year less than prices generally.
inflation. That could be reversed. but history does not
3.
I think (and I think most analysts agree) that this is
suggest divergences between house prices and other prices
overstating what is likely to happen. The study's basic
by anything like 2 percent a year for as long a period as
point is that the strong housing demand and rapid real
20 years.
3
house price growth of late (especially in the 1970s) were
While this may seem like a big deal to home owners
mainly due to the big stimulus that came as the baby
accustomed to large capital gains on their houses, it is not
boomers came of age, and this will be reversed as the baby
catastrophic. and it promises some benefits. It means. for
busters (from the low birth years of the late 1960s and
instance, that first-time buyers will find ownership a little
early 1970s) come of age. There is certainly some merit
easier, and homeownership rates among young households
in the argument: but the study overstates the impact be-
should go up. It should mean that housing decisions will
cause its statistical analysis doesn't incorporate the ability
be based more on houses themselves, rather than on their
of supply adjustments to limit price declines and because
expected appreciation or their use as a tax shelter. and it
may mean some easing of rents (relative to inflation).
cut
12
Focused a great clear of
been John Savacool
have
John Savacool is a senior economist and director of
Real Estate and Construction Services for Wharton
Econometric Forecasting Associates (WEFA).
Savacool how a B.d. in economics and political
science from Temple University.
very wen Hhy,
Our budgets
when
ON
ver the past year or so the media have said
at the national level was during the Depression in the
greater attention to the level of home prices and
1930s. Even following the stock market crash in October
is has resulted in a tew irresponsible stories about
1987 25,000 people lost their jobs in the New York area
home
the "imminent" collapse of home prices. Ob-
and market prices simply went flat for a year. They did
viously there is a tight link between income levels
not decline on an annual basis. Stories about home owners
and home prices. Because of our cultural upbring-
slashing their asking prices can be dramatic. but they are
ing) most of us want our own single family home and.
often at odds with the overail trend in market prices. This
except for the few that have more money than we know
occurs-when the media pick up on a handful of buyers
what to do with, most of us stretch, to the limit when we
trying to sell properties and treat the cut in asking price
buy a home.
as an indicator of a decline in the price level for the market
It is true that there are a large number of metropolitan
as a whole.
areas in the country where home prices are very high. but
At the present time. the level of existing home prices
most of these areas also have very high levels of income
relative to household income for the nation as a whole is
per household. It is also true that home prices have taken
well below the peak reached during the late 1970s and
a dramatic plunge in some areas over the last decade. but
early 1980s. New home prices relative to household income
most of these areas had poorly diversified economies. When
have increased sharply over the last few years, but this
the major industry in the area collapsed, so did the area's
simply reflects the fact that the composition of new con-
heavily dependent economy, went into a depression, that
struction has shifted towards the upper end of the market.
which. in turn. pulled down home prices.
In spite of the fact that new Home prices relative to house-
In well diversified local economies. the rate of increase
hold income have for the last eight years. we
in home prices follows the rate of increase in household
still have not set any new records.
income. As far as I can tell, the last time home prices fell
0
Fell
Numberop MORE expensive homes aime lat
builders are constructive a greater
housing Looking at metropolitan markets individually, prices of both new and existing
household are generally in sync with other market trends, including growth in
incomes and the actual costs of construction. Therefore,
speculation about a collapse is real estate values is pure nonsense.
HOUSE CONSTRUCTION COSTS
LAND AND LOT DEVELOPMENT
$38,657
$96,8-13
Raw land
$17.000
I Excavation
$2.475
2 Foundation
3.605
Impact fees. school and
other contributions
5,195
3 Steel
460
4 Carpentry, lumber and trusses
24,965
Engineering and soil testing
995
Mass earthwork
1,588
5 Windows and doors
2.573
Sanitary and storm sewers.
5.257
6. Stairs
685
water mains
4200
7 Rooting and siding
6,880
S Gutters and downspouts
Streets. curbs and gutters
430
7,520
Overhead
750
9 Plumbing
6,075
Interest
4.500
10 Electrical
4,418
Miscellaneous
752
11 HVAC
2.900
12 Insulation
1,255
Subtotal
$38,657
13 Drywall and painting
8,000
14 Garage doors
415
SOFT COSTS
$24,440
$ 24,400
15 Cabiners. counter tops and appliances
3.127
Sales commissions
$3.500
16 Tile and carpet
4,338
Closing costs
450
17 Trim material and hardware
2.618
Advertising and marketing
4.200
18 Landscaping
2,440
General and administrative
19 Driveway
940
costs and profit
13,406
Warranty expense
1.000
Village permit fees
6.884
Contingency
2.044
Construction overhead
5.160
Interest
1.200
Subtotal
$24,400
Subtotal
$96.843
TOTAL PRICE
$159,900
11
reset X 19 ices wide
2
MISCA B.M0892$$14
12-28-89 22-06-31
MISC4--BM0892
Galley 14
Family 83
3
Bono Mitchell--cj# 89115--Rea Estate
+
LASER 30 LASER 30
VIP SYSTEMS, INC.
7
314 SWANN AVE., ALEXANDRIA. A 22301
TELEPHONE: 548-2164 FAX: 548-9851
9
10
11
12
13
14
HOUSE CONSTRUCTION COSTS
$96,843
15
1 Excavation
$2,475
16
2 Foundation
8,605
17
3 Steel
460
18
4 Carpentry. lumber and trusses
24,965
19
5 Windows and doors
2,573
20
6 Stairs
685
21
7 Roofing and siding
6,880
22
8 Gutters and downspouts
-130
23
9 Plumbing
6,075
24
10 Electrical
4,418
25
11 HVAC
2,900
26
12 Insulation
1,255
27
13 Drywall and painting
8,000
28
14 Garage doors
415
29
15 Cabinets, counter tops and appliances
3.127
30
16 Tile and carpet
4,338
31
17 Trim material and hardware
2.618
32
18 Landscaping
2,440
33
19 Driveway
940
34
Village permit fees
6.884
35
Construction overhead
5,160
36
Interest
1,200
37
38
Subtotal
$96,843
39
-10
LAND AND LOT DEVELOPMENT
$38,657
41
Raw land
$17,000
42
Impact fees. school and
43
other contributions
5,195
+1
Engineering and soil testing
995
45
Mass earthwork
1,588
46
Sanitary and storm sewers,
3.257
AT
water mains
1,620
48
Streets. curbs and gutters
1,620
49
Overhead
750
50
Interest
4,500
51
Miscellaneous
752
52
53
Subtotal
$38,657
54
55
SOFT COSTS
$24,440
$24,400
56
Sales commissions
$3,300
57
Closing costs
450
58
Advertising and marketing
4,200
59
General and administrative
60
costs and profit
13,406
61
Warranty expense
1,000
62
63
Contingency
2,044
64
Subtotal
$24.400
65
66
TOTAL PRICE
$159,900
67
68
55
56
T
57
he latest round of controversy on the future of home prices was
58
triggered by N. Gregory Mankiw and David N. Weil, professor
59
and graduate student, respectively, at Harvard University. In a
60
working paper made available to the media, Mankiw and Weil
61
constructed a model to project future prices for housing based
62
primarily on demographic trends.
63
64
Mankiw and Weil based their model on estimates that demand for
65
housing begins at age 20 and peaks at age 40. Using data from the
66
1970 Census, demographic demand for housing was estimated by
67
multiplying the number of people in each age group by the
68
estimated demand per person of each particular age group. From
69
that, they then calculated the relationship between construction
70
costs (used to represent home prices) and their measure of
Z1
demographic demand.
72
73
In the 1970s, construction costs and demographic demand for
74
housing rose rapidly. In contrast. Mankiw and Weil noted that
75
inflation adjusted construction costs rose little in the 1960s and
76
77
1980s when demographic demand for housing was less.
78
Based on this assumed historical relationship between changes in
79
construction costs and demographic demand, Mankiw and Weil
80
projected that as growth in demographic demand slows,
81
real construction costs will fall about 3 percent annually over a
82
20-year period.
83
8-1
As a result, forecasting a collapse in real estate values has become
85
the media hype of the year. Recently, the following headlines have
86
appeared in some of the nation's leading publications.
87
88
Crumbling Castles. The recession in real estate has
89
ominous implications.
90
Barron's. Dec. 18. 1989.
91
92
The Great Housing Bust. Americans like to view their homes as
93
perpetual piggy banks. But changing demographics are bringing
94
an end to the 46-year housing boom.
95
Newoweek, Dec. 25, 1989.
96
97
Home-Price Slump Spreads to Both Coasts, Causing Market
98
Jitters. Slide after extended boom isn't viewed as harbinger of a
99
general recession. Was it overrated investment?
100
The Wall Street Journal. Dec. 21, 1989.
101
102
When A House Is Just A Home.
103
Money Angles, Andrew Tobias. Time, Dec. 18, 1989.
104
105
Services of Mead Data Central
PAGE
28
20TH STORY of Level 1 printed in FULL format.
The Business Journal-Jacksonville;
Copyright Jacksonville Business Journal 1988;
Business Dateline; Copyright (c) 1988 UMI/Data Courier
December 5, 1988
SECTION: Vol 4; No 9; Sec 1; pg 9
Good Anecdote Story
LENGTH: 1128 words
HEADLINE: Richard Dostie: Builder Adopts Plight of Homeless Children
BYLINE: Carole Perkins
DATELINE: Jacksonville; FL; US
BODY:
It was in Miami at 8 a.m. on a Saturday last summer that the severity of the
homeless problem hit Richard Dostie. People --many of them -- were sleeping in
the streets and under interstate overpasses, some sheltered only by pieces of
cardboard.
"There must have been 100 homeless in a two-block area. It was 50 early that
I knew they had to have been there all night. It bugged me," said the
34-year-old Dostie, who is president of a home construction company in
Jacksonville that builds about 115 houses a year. The company, founded as J.
Rene Dostie & Son Inc., is in the process of changing its name to Richard R.
Dostie New Home Collection.
The plight of the homeless once again hit Dostie when he attended a September
conference of the National Home Builders Association in Reno, Nev., and viewed
slides showing homeless men, women and children throughout the country.
"It struck a chord that builders should be involved," said Dostie, who then
signed up to attend a November symposium on the homeless in Washington, D.C.
Dostie said he wanted to do something about the homeless, but he wasn't sure
just where to begin or what to do. What he did know was he had to act soon with
the holidays not far away.
After interviewing several local missions, Dostie learned that the City
Rescue Mission was the only shelter in Jacksonville funded solely by private
donations. He then sponsored a benefit party at one of his developments, the
Woods, where guests donated $ 5 or more, and raised $ 5,700 for the City Rescue
Mission. Dostie earmarked the funds to help homeless children.
The father of three said he is especially bothered by the numbers of children
without homes. "I can't imagine a child not having an apartment or a home and
having to sleep outside. It blows my mind," Dostie said.
Born in Niagara Falls, Dostie grew up in a close-knit family. The oldest of
three sons, Dostie is following in the footsteps of his father, Rene, who
started the company in 1958. He believes in spending whatever free time he has
with his wife, Ginny, and their three sons: Rick, 10, Christopher, 7 1/2, and
Michael, almost 3.
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The Business Journal-Jacksonville (c) 1988 UMI/Data Courier
When Dostie is not at his Hartley Road office, he coaches Little League and
is active in the family's parish, the Mandarin Church of Christ. "A group of us
came from another church. We were 19 and now we're up to 275," said Dostie, who
helped build the new church. Dostie also squeezes in flag football on Sunday
mornings and basketball on Tuesday nights, as well as a quick daily workout at
the local health club.
A brass sign on Dostie's desk says "The Boss," but Dostie doesn't believe in
being dictatorial: "It's not my nature." He is also quick to give credit to his
10-member staff. "Most have been here quite a while; we try to prevent
turnover," said Dostie, who praised his operations manager, Norris Lackey. "He's
my right-hand man. He's done an excellent job and we have a mutual respect. I
believe in treating everybody the way you'd want to be treated. Everybody's
important. I guess that's my Christian background."
Richard Dostie was only 19 when he entered the family business. His father
had moved his family from Quebec to Jacksonville after tiring of Canadian
winters. That was in 1958. "My dad started the business from scratch," said
Dostie. His brothers, Rene and David, were to follow him into the business.
Dostie worked construction every summer for his father, but he really had
planned on becoming a lawyer and was attending the University of Michigan when
his father called to say he was ready to sell the business and semi-retire at
age 44. Dostie took a semester off to try his hand at the business, and he "fell
in love with it and never went back."
And his love for the business still continues. "I like to provide homes.
People become very excited when they get a new home," said Dostie, who finds it
a challenge to produce an affordable home and still earn a good living. "I like
to know I'll be providing homes for the next 50 to 100 years. It gets in your
blood."
Dostie builds only single-family detached homes, starting at about $ 64,000.
"That's as low as we can get," said Dostie, who has built homes in the
developments of Brandychase in Mandarin, Crystal Springs and Colony Glen, homes
in Westside in the mid-range ($ 70,000 to $ 100,000), and the Woods near
Atlantic Beach, which sell for $ 130,000 to 200,000.
Also
"I like that first-time home buyer. It's a real challenge to operate a
company and build an affordable home for the first-time buyer," said Dostie. The
more expensive homes $ 150,000 and up - are the easiest to build because
money doesn't limit the builder, he said.
Each of the three Dostie brothers owns his own company. "My dad's theory was
that with his three sons in separate companies, they should never fight. And
we've adhered to it and it's worked like a charm. The three of us are best of
friends," he said. "We try not to build homes and compete against one another."
The three brothers and their father, however, do work together in land
development, at Cobblestone in Arlington and Rive St. John, lots along the St.
John River, selling for $ 50,000 to $ 200,000. "We split the responsibility. I
do the governmental work; David does the utility; Dad does the planning; and
Rene gets the catch-all. He gets the bad end of the stick," Dostie said. "It
works well. We don't ever argue, although we don't always agree."
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Dostie also worked on the Planning Commission for five years, two as
chairman. Ray Newton, city planning director, said Dostie was "always one to be
counted on." During his tenure as chairman the commission processed 856 zoning
exceptions, 521 variances, approved two district plans and approved capital
improvement programs, enumerated Newton. "He was the most conscientious and
dedicated chairman we've ever had and he understood the concept of growth and
supported it. He was an advocate."
Dostie is also the outgoing president of the Northeast Florida Builders
Association, of which he was a director for five years before working his way
through the official offices. "I believe you have to give back to the industry
that helps you," Dostie said.
And, as far as help is concerned, he believes in passing it on. While in
Washington, Dostie said he saw dozens of homeless rummaging through trash cans
for food. "It shouldn't happen, not in America,' he said. "The homeless are not
just bums. Sure there's a percentage of drug users and maybe we can't solve
their problems, but when a husband and wife don't make enough to live
it's
sickening.
"If we help people get back on their feet, it's better for the country, and
we won't be raising a generation who know homelessness. That's why I'm an
advocate of affordable housing."
GRAPHIC: Photo
SUBJECT: Construction companies; Corporate presidents; Social responsibility;
Fund raising; Family owned businesses; Personal profiles; South Atlantic
NAME: Richard Dostie
GEOGRAPHIC: South Atlantic Region; Jacksonville; FL; US
COMPANY: Richard R Dostie New Home Collection; SIC: 1521
LOAD-DATE-MDC: December 12, 1989
LEXIS® NEXIS® LEXIS® NEXIS
THE WHITE HOUSE
Office of the Press Secretary
EMBARGOED FOR RELEASE
UNTIL 11:30 A.M. EST
FRIDAY, JANUARY 19, 1990
TEXT OF REMARKS BY THE PRESIDENT
TO THE NATIONAL ASSOCIATION OF HOME BUILDERS CONVENTION
Omni Coliseum
Atlanta, Georgia
January 19, 1990
It's great to be back among the Home Builders of America.
Before we moved to the White House, Barbara and I were a home
builder's and a realtor's dream. We lived in 28 places in 45
years. And yet, in a real sense, wherever we lived -- whether it
was in Houston, Washington, New York or Beijing -- our family had
one true home that we took with us wherever we went.
I remember the first place Barbara and I lived in, when George
Junior was just a baby -- a tiny ramshackle shotgun house in the
oil town of Odessa, Texas. It had a makeshift partition down the
middle that cut the house into two apartments, leaving us with a
small kitchen and a shared bathroom. An old water-drip window
unit that cranked up like a West Texas dust storm still couldn't
drown out the noise of the all-night parties next door.
of course, that first house Barbara and I lived in couldn't
compare to the new "smart houses" that you, in the NAHB, are
building. We were fortunate that the wiring even worked, while
today you are putting telephone, television and power together on
one master cable, linked to a computer. It's remarkable what
free enterprise and American ingenuity can do.
Yet, despite it all, Lord Byron was right -- a home is a place in
the heart. I can't speak for our neighbors, but for us, that
little shack was home. And I have to wonder, and worry, how many
families break apart because they can't afford to buy or rent a
home even half as decent as our first place.
We cannot allow the high costs of housing to suffocate the
financial life of America's young people. When it comes to
housing, this must not become a society of "haves" and "have
nots."
The fact is that for the last decade and a half, the cost of new
homes -- the cost of the American dream -- has been escalating.
Young couples just starting out, low and moderate-income
Americans, unmarried people trying to invest in the future --
many are finding themselves priced out of the home market,
especially new homes.
To create decent housing that people can afford, the government
and private sector must cut some red tape. So I have asked Jack
Kemp to convene a blue ribbon commission to identify these
barriers to affordable housing construction and to make
recommendations on how to eliminate them.
- more -
- 2 -
But the truth is, there's one housing policy, and one sales
strategy, that's better than all others combined -- a healthy,
growing economy with low, long-term interest rates. This first
month of the 1990s marks the 86th month of economic growth in
America. As Shirley says, it was housing that paved the way to
the longest peacetime recovery in modern history. You built
nearly ten million single-family homes in the '80s, and nearly
five million multi-family units. And by working together, the
housing industry will help keep this country going strong in the
'90s.
The engine of homeownership in America is the private enterprise
system. And by helping those entrepreneurs and risktakers, more
Americans will have access to the dream of homeownership and
decent housing.
But to keep America moving, we will need the cooperation of
Congress. I can think of one simple action Congress can take to
give the economic expansion a boost. It has already been
debated. It has already won the support of the majority of
Members. What we need now is a simple up-or-down vote to cut the
tax on capital gains.
Some call a capital gains tax cut a favor for the rich. They
should know better. They should know what you know -- that a
capital gains tax cut favors economic growth, jobs and
opportunity for working America. It favors every American who
makes a living, day after day, brick by brick, hammer on nail.
A capital gains tax cut will help every American who holds a job
or owns a home. So I call on the Democrat leaders of Congress to
give the American people a break, and to let the House and Senate
work their will by having an up and down vote on the capital
gains tax cut.
Also vital to home buyer and home builder alike are low and
stable rates of interest. A one-percent increase in the interest
rate knocks millions of families out of the market. In the last
few years, millions of families could afford a new home because
mortgage interest rates have dropped from 18 percent in the early
1980s to less than 10 percent today. And I want to see them come
down even more.
The 1990s must be another decade of lower taxes and lower
interest rates. But to have a stable economy, it must also be a
decade in which Washington, at long last, adopts fiscal policies
as sound as those of the average American household.
None of us is allowed to spend our bonus before we earn it. Nor
should Congress start planning where to spend a possible "peace
dividend." To the extent that world events allow us to cut
defense spending, then we should recognize that cutting the
Federal budget deficit would be a true dividend for America's
taxpayers and our children's future. We must get the deficit
down.
And, too often, Congress forgets that every house is the
handiwork of an architect, a surveyor, a mason, a plumber, a
carpenter, a painter and dozens of other working men and women.
If Congress levies new burdens on our economy, it is these very
people who will be put out of work.
But, of course, even if we do cut the capital gains tax; even if
we do keep interest rates low; even if we do protect the economy
-- this is cold comfort for those Americans who languish in the
projects, or the thousands of others who know no shelter at all.
These Americans need help. And they need hope -- so that's just
what I call our program -- HOPE, which stands for Home Ownership
and Opportunity for People Everywhere.
- more -
- 3 -
Our program addresses the full range of housing concerns --from
shelter for the homeless, to affordable housing for low-income
families, to greater access to jobs.
Let's start with what HOPE can do for first-time home buyers.
It's time Congress let Americans use their IRA savings to get
into that first house.
Then there are those who must live in the poverty and fear of
public housing. They are disproportionately minority Americans.
They suffer abuse from drug-dealing predators within -- and the
last thing they need is abuse from without. And concerning the
latter, let me say just one thing: Atlanta is a great, cheerful
city that has proudly risen from the ashes of a distant past.
And so for those who plan to revel in a rally of hate here
tomorrow, let them know this: Atlantans, like all Americans,
turn their backs on bigots.
To escape violence and crime, to live in decent housing -- our
public-housing tenants must first be empowered. Empowered to
choose where they want to live. Empowered by housing vouchers.
Low-income families don't need us to build new public-housing
horrors. They need decent low-income housing. And that's why I
call on Congress to extend the low-income housing tax credit.
Earlier, I discussed capital gains. But even this cut would not
be enough for America's impoverished inner-cities -- often as
desolate and shattered as a war zone. No, for these communities,
we've got to go one step further and eliminate the capital gains
tax altogether within enterprise zones.
There is something perverse about discriminatory lending
practices that have kept the FHA out of the very places that need
the most help. So my Administration will ensure that FHA is true
to its first mission -- to make housing affordable for low- and
moderate-income families. It's wrong to draw a red line around
the inner city. It's not right or fair. And we're going to
replace the redline with a greenline for opportunity and jobs for
the future.
The centerpiece of HOPE is to let all Americans live in dignity
and control their destiny -- and dignity is exactly what resident
management projects allow. Tenant management and tenant
ownership is not just an experiment -- it's the future.
But even more is needed. We are all going to have to work in a
partnership to solve the problems of the helpless and the
homeless. My Administration is going to do its part by expanding
homeless assistance. Late last year, I signed a bill that boosts
funding under the McKinney Act to reduce homelessness. Our HOPE
proposal will tie shelter with basic services for those in need.
And Secretary Kemp, I know, will tell you of other steps we are
taking.
You're certainly doing your part -- building and renovating
shelters for the homeless; for battered women; for troubled
children and retarded adults. And you're working with the Job
Corps, taking the unskilled, the out-of-work, and training them
for lifetime careers in construction and maintenance, and I
congratulate you on your commitment.
But our partnership needs a third element -- that constellation
of volunteers I call the Thousand Points of Light. I couldn't
come to Atlanta, without taking note of one such point of light,
a part-time carpenter and his wife who have provided shelter for
so many in this very city -- former President Jimmy and Rosalyn
Carter. They deserve our thanks, as do all the people behind
Habitat for Humanity.
- more -
- 4 -
And so does a woman named Ella McCall. Ella was once a homeless
mother. Now she has her masters degree, and serves the homeless
as a social worker at a shelter in Washington, D.C. When a
family strives to move out of a shelter into a home, they need
Ella. When a homeless mother wanders lost, with her children in
tow, she needs Ella. And when I look out the south window of the
White House at dusk, and see the distant figures of ragged men
bedding down for the night -- I pray to God that this country
finds more people like Ella McCall.
Your work in job training, Jack Kemp's work in tenant management
and ownership, Ella McCall's work with the homeless --all of this
ultimately saves the taxpayers money. But this isn't about
money. It's about caring.
And if it takes love to make a house a home, then perhaps the
same could be said of a country. For the poorest among us,
America must not just be a place to live in, but a home for all.
# # #
An Essay on the State of the Nation's Housing
Where
Will Our
Children
Live?
An Essay on the State of
the Nation's Housing
By Shirley McVay Wiseman
President
National Association of
I
have been a home builder for 25 years, and I've seen some big
changes in the housing industry, especially during the 1980s.
This decade has done some great things for housing in the
Home Builders
areas of home finance and building technology. But it has also
been a time when the cost of homeownership has grown more and
March, 1989
more out of reach for our young people. I want to do something to
address this problem, not just because I believe that homeownership
makes good citizens and gives working people the financial security
they need. I want to do something because Americans haven't
changed. Homeownership is still at the top of the list of the good
things they want for their families. And I know beyond the shadow
of a doubt that our great country is still able to deliver on that
promise. It just means trying a little harder.
In this special report I will describe the scope of our housing
problems. I will suggest some of the things we should be doing to
open up housing opportunities for home owners and renters alike.
And so that we don't lose sight of where this country should be
headed, I want to briefly retrace the history of the industry's progress
over the past 40 years. Signs are growing that if we don't take a hard
look at our housing policies now, then we are headed for a housing
crisis in the 1990s and beyond. And that is something that we can-
not allow to happen because it will undermine those personal and
national achievements that are the bedrock of our democracy and our
economic system.
I have posed one basic question: "Where will our children live?" It
is my personal conviction that we must be relentless in finding an
answer to this question. And in the process of finding that answer it
is my hope that we will begin rediscovering the sense of purpose and
the values that have been the source of our nation's unique genius
and pride.
Where Will
Our Children Live?
Photography: © Jerry Mesmer
hen President Bush
W
pitch in and help the family
a contribution to society. We
says he wants to
down the road. From Mom and
need to offer hope and encour-
make America a
Dad I learned about the need for
agement to all our children. And
kinder, gentler na-
striving, for achieving, for taking
decent housing is an obvious
tion, I know what he's talking
responsibility for myself and
place to start.
about. That's because I still re-
others.
Too often today there is an
member my childhood in rural
I was fortunate to grow up in
absence of purpose in the lives of
Arkansas. Money wasn't every-
a nurturing environment, and I
our young people. Too often
thing, even though in those days
doubt that I would have been
that vacuum is being filled by
it was often in short supply.
able to achieve success as a
drugs, violence, frustration and
Looking back over your shoulder
builder without the love and
despair. For the American soci-
you could still see the devastat-
support I received as a child.
ety at large there is the underly-
ing impact of the Great Depres-
That's why it's so disturbing to
ing feeling that maybe we have
sion. And the breadwinner in the
see increasing numbers of our
left too much to chance, that we
family was grateful for a job, a
young people growing up today
have taken for granted too many
decent home, food on the table.
without that kind of advantage.
of the good things, that we have
There was more than enough
I'm not a sociologist, though
allowed our social priorities to
poverty to go around when I
dealing with the public as long
drift, that we are living off the
was young-although we never
as I have you can't help but be-
achievements of the past rather
considered ourselves any worse
come a pretty good judge of
than planning for the future. I
or better off than our neighbors.
character. I don't have the total
am convinced that the American
Poverty was not what made the
answer to the vicious cycle of
people are ready for some na-
greatest impression on me. What
poverty that seems so totally un-
tional leadership on housing.
I prize most from my childhood
necessary and more and more is
Just as it has in the past, our in-
was the feeling of family and
taking a toll on the lives of our
dustry is ready to start moving
community. That was a time
children. But I do know that de-
this country forward toward
when neighbors were neighbors
cent housing, good neighbor-
achieving even greater things for
and people weren't afraid to
hoods, caring families and top-
future generations.
notch schools are indispensable
to molding adults who can make
1
Since 1950 America's home builders
have constructed nearly 62 million new
housing units or more than 60 percent
A Mighty
of the nation's total housing stock.
Economic Engine
Housing Starts by Decade
20 million
f you think that housing
17,676,000
I
can't do the job, then you
don't know your 20th cen-
14,666,000
14,927,000*
tury American history.
14,065,000
15 million
Consider the latest chapter. We
Subject
experienced an extremely difficult
recession during the opening
to
years of this decade. That down-
10 million
turn was one that builders are
unlikely ever to forget because
for more than two years sky-high
interest rates put the survival of
5 million
our firms on the line. That was
the recession that changed the
way builders do business. We di-
1950s
1960s
1970s
1980s
versified out of single-family
*Includes NAHB's housing starts forecast for 1989.
home building into such activi-
Source: U.S. Bureau of the Census; compiled by the NAHB Economics, Mortgage Finance and
ties as rentals or remodeling, or
Housing Policy Division.
chances were we didn't make it.
Bush BARLO / shotsm/whows
And the lessons of that recession
policy. At the war's end, 10 mil-
lion dollars. With the invention
were so harsh that to this day
lion soldiers returned from over-
of the long-term amortized
builders are building closer to
seas to reunite with their families
mortgage and low downpay-
the market and are much less
and begin civilian careers. At the
ment, virtually any working fam-
likely to venture into the specu-
same time, there was a crying
ily could aspire to homeowner-
lative construction that was stand-
need for new housing because
ship. And in a low interest rate
ard up through the 1970s.
relatively little had been built
environment, millions of Ameri-
In the minds of most Ameri-
during the 1930s and during the
cans didn't have to dream about
cans the good economic times
first half of the 1940s our pro-
a home of their own for too
that followed obscured the mem-
ductive might was concentrated
long before that dream became
ory of that recession. And it was
on the war effort.
an exciting reality.
housing that paved the way to
In 1945 it was estimated that
the longest peacetime recovery in
the U.S. had reached a chronic
modern history. Housing is a
housing shortage of 3.6 million
Housing-
mighty economic engine and the
units. The country was faced
A Stabilizing Force
record will show that the current
with a massive rebuilding effort.
As a builder, I have seen that ex-
housing expansion, already one
We didn't flinch at the challenge.
citement first-hand. It happens
of the longest ever, has led to
Instead we embarked on a course
every time a family walks
the production of 10 million
that ushered in a miraculous era
through the front door of their
new homes since 1983, roughly
of steadily rising productivity
new home. And I have experi-
10 percent of our entire housing
and growth, an era that put
enced that excitement as the
stock. It's a proven fact that
housing on center stage. In
mother of two children who
when the housing assembly line
1948, we dedicated a record 38
bought her first home in Lexing-
starts moving, that soon boosts
percent of the nation's total
ton, Kentucky, with financing
demand for a widening range of
credit to housing. That was one
from the Veterans Administra-
consumer goods and services.
of the best investments we ever
tion. Like so many others, I
And that translates into bounti-
made.
know that homeownership is a
ful new jobs and new tax
For the first time, the innova-
stabilizing force for the family. I
revenues.
tions of the 1930s in the Federal
know that it made our lives bet-
Housing Administration and in
ter. It is an opportunity that
the banking system were
America simply cannot afford to
Rebuilding the Nation
brought into play on a wide
abandon because there is noth-
Just after World War II, housing
scale. You didn't need to be a
ing that can replace it.
was an even more deliberate tool
millionaire to move into your
From the mid-1940s and on-
of national social and economic
own home even though when
you did it felt as good as a mil-
2
Following is the preamble of NAHB's 1989 Statement of Policy, which
was adopted by the association's 1,700-member Board of Directors on
Jan. 23, 1989.
ward into the 1970s, housing
"Where Will Our Children Live?"
enjoyed boom years. Production
in each succeeding decade rose
e, the nation's home builders, raise this fundamental
to new heights. At the outset,
W
question because of the problems now permeating
we started off with Levitt-towns
America's housing market. During the past six years, we
and new tract towns. Almost
have built 10 million new housing units, which repre-
overnight, thousands upon thou-
sent a remarkable 10 percent of the nation's total housing stock.
sands of new homes-built for
Even so, millions of young Americans are priced out of the housing
quality but inexpensively-
market; millions more are living in substandard housing or paying
sprang up across the suburban
too large a portion of their incomes for rent; and hundreds of thou-
landscape. About 14.7 million
sands of men, women and children are sleeping in the streets.
new homes were built in the
A nation that is indifferent to the plight of its youth is a nation
1950s, a record 1.95 million in
that is stealing from its very future. Yet even today, one out of five
1950 alone. There followed mas-
Americans under 18 lives below the poverty line. Many live in sub-
sive public works projects, such
standard housing, go to schools where they don't learn, and play in
as those pioneered by New York
drug- and crime-infested neighborhoods.
State Park Commissioner Robert
Moderate- and middle-income families, the best housed people on
Moses, leading a massive push
earth, are discovering that, for their children, the dream of owning a
from the cities. The Highway
home is now turning into a nightmare. Of the nearly 59 million
Act of 1956 launched a multi-
Americans who are in, or who will be entering, their prime home
billion dollar road building pro-
buying ages during the next four years, fewer than half can expect to
gram to further speed the devel-
become home owners.
opment of the countryside. Ex-
America is rapidly being polarized into a nation of "housing
pansion of the housing stock
haves" and "housing have-nots." But this deepening division is not
grew at an impressive pace: more
inevitable. It can be reversed. The choice is now before America.
than 14 million new homes in
The major task before our nation today is to recognize and con-
the 1960s and an unprecedented
front that choice, to develop a national consensus for housing and to
17.7 million in the 1970s.
press for a renewed commitment to the national goal of providing
We were optimistic about the
decent, affordable housing for all Americans.
future and proud of what we
Our task is not an easy one. Meeting the diverse housing needs of
had accomplished in only a few
the American people means re-establishing housing as a top national
short years. Our new homes rep-
priority. That, indeed, will test the leadership abilities of our nation's
resented that optimism. We were
elected officials. That also will require the genius, competitive spirit
happy, and our families were
and full productive capacity of the nation's home builders. But the
growing. Our population began
inauguration of a new President of the United States and the con-
to swell so quickly it was called
vening of a new Congress make 1989 an opportune time for the na-
the baby boom. We worked hard
tion to reassess its priorities and to move forward with a bold, new
in our jobs. Our salaries in-
housing agenda.
creased. We eventually were able
To start the process, the National Association of Home Builders
to buy bigger homes with bigger
calls on President George Bush and the Congress to adopt a "Na-
yards to raise bigger families.
tional Housing Agenda for the 1990s." By mobilizing our nation's
And in the process we discov-
unsurpassed resources behind such an agenda, we can and we will
ered that housing was a ladder,
extend the current economic expansion, increase homeownership op-
and that each time we climbed a
portunities among young households, strengthen the nation's hous-
new rung there were improve-
ing finance system, revitalize and expand the nation's aging infra-
ments in our lives. We never
structure and increase the supply of affordable housing for low- and
stopped to wonder where our
moderate-income households, the handicapped, the elderly and the
children would live. We just as-
homeless.
sumed that they would pick up
where we left off. After all, they
were better educated. They grew
up with the material things we
had never had. Their future was
a boundless horizon of
opportunity.
3
Homeownership-
A Dream Deferred
Homeownership Rates By
et history has a strange
Where land was expensive, we
Age of Household
Y
way of confounding
were often able to reduce costs
our expectations. In
by building more housing on
70%
30 to 34
those lofty housing op-
smaller lots. We rethought how
portunities we had envisioned
we built houses every step of the
60%
for our children we were wrong.
way and modern technology was
A lot of them have made it
there to hasten our cost-cutting
50%
25 to 29
across the threshold of home-
efforts.
ownership, but just as many
When the clouds over the
40%
have not. Despite one of the best
economy started breaking up in
30%
housing expansions our industry
1983, we were ready to build
has ever known and the con-
homes that our children could
20%
struction of millions of afforda-
afford to buy. Mortgage interest
ble homes scaled to the financial
rates receded sharply, and for a
10%
needs of families just starting
time actually dipped below the
74 75 76 77 78 79 80 81 82 83 84 85 86 87 88
out, a declining percentage of
10 percent mark, where many
our children in the lower age
had never expected to see them
Homeownership Opportunities Drop
brackets from the mid-20s to the
again. Even so, they remained at
Sharply for Nation's Young Adults
mid-30s, traditionally the prime
a high level by historic stan-
Homeownership rates among 25 to 34
first-time home buying years,
dards. Luckily we were able to
year olds dropped sharply between 1980
have been able to establish a
soften the impact of higher fi-
and 1988. Had the nation's overall
foothold in the for-sale housing
nancing costs by resorting to in-
homeownership rate held constant at its
market.
novations in the mortgage mar-
peak 1980 level, an additional 2 mil-
lion households would own homes today.
We in the housing industry
ket. Chief among them were
knew that the marketplace was
Adjustable Rate Mortgages
Source: U.S. Bureau of the Census.
going to be flooded by young,
(ARMs). Lenders offered ARMs
first-time buyers during the late
at initial interest rates that were
1970s and the early years of the
well below rates on fixed-rate
Universe of Potential First-
Time Home Buyers
1980s. Just as we had to build
mortgages, usually by two to
1989-1992
new schools in the 1950s and
three percentage points. The fa-
1960s to accommodate the edu-
vorable interest rates on ARMs
58.7 million Americans in 25 to 34 age range
cational needs of the baby
have kept production of single-
boomers, now we would have to
family homes above the one mil-
build new homes. And we knew
lion level to the present time.
8.5 million expected
that we were going to have to
to buy between now
take a fresh approach in our use
A Hurdle for Young
and end of 1992
of land and construction tech-
Families
niques because the costs of
We gave housing affordability
18 million already
own a home
building a home had risen at an
our best shot on both the regula-
alarming rate. We recognized
tory and financial sides, but we
32.2 million young
that we had to design our prod-
fell short. This is how the record
adults will be priced
uct so that it was affordable to
reads: the homeownership rate
out of the housing
market
the young. During the recession
for 25 to 29 year olds dropped
we had a lot of spare time for
from a peak of 44 percent in
planning affordable housing.
1979 to 35.9 percent in 1988. A
Half of America's Young Adults Are
Priced Out of the Housing Market
Local regulation of the indus-
similar decline happened among
try has remained a problem, but
households in the 30 to 34 age
By the end of President Bush's first
we made progress. Working with
bracket. Homeownership fell
term in office, 58.7 million Americans
the Department of Housing and
from a peak of 62.6 percent in
will have entered, be in or will have
Urban Development we were
1978 to 53.2 percent in 1988.
passed through the prime home-buying
able to demonstrate in locations
ages of 25 to 34. Of that number, less
Contrary to our high expecta-
than half can realistically expect to own
across the country how revisions
tions for our children, they are
a home.
in the regulatory approach ena-
losing ground in one of the most
bled us to build better homes at
crucial aspects of their lives:
Source: NAHB Economics, Mortgage Finance
and Housing Policy Division.
a significantly lower price.
housing.
4
Breaking Down the 'Sticker' Price of a New Single-Family Home
As a share of the overall price of a house, the cost of land and land improvements
has risen sharply during the past 40 years. Advances in construction technology
and improved building materials in the meantime have lowered the proportionate
costs of construction labor and materials.
1949 — Sales Price $9,500
1969 - Sales Price $26,000
1988 - Sales Price $112,500
Overhead
Overhead
15%
Overhead
& profit
17%
& profit
& profit
5%
20%
Financing
Labor
7%
Financing
Labor
11%
Labor
& materials
6%
Financing
& materials
Finished lot
& materials
47%
69%
55%
21%
Finished lot
27%
Finished lot
Source: NAHB Economics, Mortgage Finance and Housing Policy Division.
This year the number of
Americans in the prime first-time
Changing Times
and subdividing the land myself
and building 20 to 30 units at a
home buying age group between
time.
25 and 34 will reach a peak of
know from my experiences
I
Back then the home building
43.6 million. From the begin-
as a builder how difficult it
business was 99 percent hard
ning of 1989 and to the end of
is to build a truly afforda-
work. The selling price of my
1992, 58.7 million Americans,
ble home today. Times
$12,750 home broke down like
nearly a quarter of the entire
have changed dramatically. In
this: $3,000 for the developed
U.S. population, will pass
the mid-1960s when I first got
lot (the raw land and its im-
through or enter into these piv-
started in the home building
provements, including the costs
otal home buying years. Of
business, I was building a three
of hooking into the city's water
these, about 18 million are al-
bedroom, one story single-family
and sewer systems); about
ready home owners. Another 8.5
home with 1,042 square feet of
$7,000 in labor and material
million are expected to buy
living space. It sold in the Lex-
costs to actually build the unit,
homes by 1992, assuming that
ington market for $12,750.
with most of the work being
the current rate of homeowner-
Like most builders I knew, I
performed by subcontractors;
ship in this age group holds
started my business on a small
and the remaining $2,750 to
steady. This is undeniably good
scale, buying individual lots, us-
cover my financing costs, over-
news, but it still leaves more
ing the land as collateral to ob-
head and profit. If I walked
than half of the young adult
tain a construction loan, com-
away with a net profit of
population outside of the ranks
pleting construction of the unit
$1,000, I was happy with the
of the nation's home owners.
in three months and closing the
deal. Most of the income was
Millions of these individuals
deal with the buyer. As I earned
rolled over to capitalize my oper-
stand on the margin of home-
the confidence of my banker and
ation and purchase more land.
ownership. And it is on this
as the demand for housing in-
front that a major battle for rein-
creased, I expanded my opera-
vigorating our national commit-
tion. Before long I was buying
ment to housing and homeown-
larger tracts of land, developing
ership will be won or lost.
5
Income Required to Qualify for a $90,000
Mortgage at Different Interest Rates
Based on a 30-year, fixed rate mortgage of $90,000
($100,000 purchase price; 10% downpayment)
19% Interest Rate
Low Interest Rates Are the Key
$61,000
to More Affordable Housing
17%
$55,000
As interest rates rise, lenders require
15%
higher incomes to qualify for higher
$49,000
monthly mortgage payments.
13%
Source: NAHB Economics, Mortgage Finance
$43,000
and Housing Policy Division.
11%
$37,000
9%
7%
5%
3%
1%
Annual Income
From All Walks of Life
and a mortgage amount of
most 8 percent in a year. Last
$85,000, the monthly payments
year's home price was up 130
My customers came from all
are about $950. An income of
percent from the median cost of
walks of life. I built homes for
$40,000 is needed to qualify.
$48,800 in 1977, a time when
policemen, teachers, shop own-
mortgage rates were far lower
ers, factory workers, city employ-
than they are today.
ees, printers and the man who
A Widening
The average cost of new and
delivered my milk every morn-
ing. Most were traditional
Affordability
existing homes in the 32 major
metropolitan areas surveyed by
households consisting of a hus-
band and wife and children. Un-
Problem
the Federal Home Loan Bank
Board was $129,400 during the
like today's home buyers, most
third quarter of 1988. In Bos-
qualified for a mortgage with
et when it comes to
only one income, which was
Y
ton, the most expensive market
housing prices, Lexing-
during that period, the average
generally less than $8,000 a year.
ton home buyers can
cost of a single-family home was
My home buyers typically
consider themselves for-
$203,300. But even in Louis-
took out FHA-insured loans.
tunate. In some of our higher-
ville, Kentucky, the least expen-
Some used VA financing. Rarely
cost cities, $150,000 will buy
sive housing market in the sur-
did out-of-pocket expenses to
only a modest condominium. To
vey, the average house wasn't all
cover the downpayment and
afford that, even before monthly
that affordable: it cost $86,700.
closing costs exceed $1,000.
maintenance fees and taxes are
Monthly housing payments were
added into the equation, a buyer
also affordable. A typical
must be able to make a substan-
A Common Concern
$12,000 loan at 6 percent amor-
tial downpayment and have a rel-
Housing affordability is a prob-
tized over 20 years, along with
atively high income. Assuming
lem that confronts all but the
real estate taxes and insurance,
the buyer of a $150,000 apart-
very wealthiest of young Ameri-
required a monthly payment of
ment makes a 20 percent down-
cans. It is a common concern
about $100, which was less than
payment of $30,000, monthly
from Wall Street to Main Street,
one-fourth of my average buyer's
payments for principal and inter-
from our cities to the country-
monthly income.
est on an 11 percent, $120,000
side. That concern can be heard
A typical starter home in Lex-
loan amount to $1,142. This re-
repeatedly in conversations with
ington today is 1,400 square
quires an income of $49,000.
U.S. congressmen, leaders in
feet, with two baths and three
Affordability is a problem vir-
business and industry and vir-
bedrooms. It costs $90,000, in-
tually anywhere in the country.
tually any middle-class parent of
cluding $20,000 for the finished
The median price of a new home
a young adult. After complaining
lot. Assuming 5 percent down
in 1988 was $112,500, up al-
about the high cost of college
6
tuition, the next topic is where is
my son or daughter going to live
and how are they ever going to
be able to afford to own a home?
The desire to own a home re-
mains stronger than ever among
Housing Costs Keep Moving Higher
young adults. Housing has be-
come a topic of growing frustra-
1968
tion. The harder a family saves
Mortgage rate
7%
for a downpayment, it seems the
Median price of a new home
$24,700
faster home prices climb. The
10% downpayment
$2,470
American dream of owning a
Monthly payment*
$148
home is on a treadmill. It is al-
Required income
$8,500
ways just out of reach, even as
incomes rise. Without the accu-
1978
mulation of equity in a previous
Mortgage rate
9%
home, it can be almost impossi-
Median price of a new home
ble for young workers to put to-
$55,700
gether the cash that buys the
10% downpayment
$5,570
ticket to homeownership, the
Monthly payment*
$404
mainstay of the nation's middle
Required income
$21,600
class.
1988
A Greater Share of
Mortgage rate
103/4%
Income
Median price of a new home
$112,500
Starting out today, there is no
10% downpayment
$11,250
question that families must
Monthly payment*
$946
spend far more income on hous-
Required income
$46,300
ing expenses. According to re-
search by the Joint Center for
*Monthly payment for principal and interest.
Source: NAHB Economics, Mortgage Finance and Housing Policy Division.
Housing Studies of Harvard
University, homeownership costs
consumed 17 percent of house-
hold income in 1970, 11.4 per-
cent in 1975, 16.8 percent in
The Housing Affordability Crunch
1980 and 33.7 percent in 1985.
The cost of building and financing a home has gone up more rapidly than house-
They declined to 26.2 percent in
hold income during the past 20 years, creating an affordability crunch for first-
1987, largely reflecting falling
time buyers. The median price of all new single-family homes sold in 1988 was
mortgage rates, which are head-
$112,500, up 355 percent from 1968. Interest rates rose from an average of 7
ing up again.
percent in 1968 to 10³/4 percent in 1988.
To make matters worse, rents
are rising, reducing income that
otherwise could be saved toward
a downpayment. The rental bur-
den among married couples aged
25 to 34 with children, accord-
ing to the Joint Center, jumped
from 17.1 percent of income in
1984 to 21.9 percent in 1987.
This trend will intensify. Al-
though vacancy rates are at re-
cord levels in many parts of the
Sunbelt, they will decline. And
the new tax laws have reduced
severely incentives for investment
in multifamily development. To
be feasible, new projects need
higher rents.
7
A Challenge for
Our Government
ithout prompt ac-
housing policy makers this time
Congress continues its efforts to
W
tion we risk lock-
out did not have at their disposal
shape landmark housing legisla-
ing out growing
a fat bankroll of taxpayer dollars
tion, there is growing enthusi-
numbers of young
to fix things. And maybe this is
asm over a number of ap-
Americans from the economic
a blessing in disguise, because it
proaches that will help bridge
and social advantages that were
has forced us to go back to the
the housing affordability gap.
enjoyed by their parents through
old housing framework and see
These include:
homeownership. The evidence is
what's there and worth saving.
Pegging the FHA mortgage
mounting, and we all know it.
As a person who put in 16
ceiling to 95 percent of the me-
That's why for the first time in
hour days for more than two
dian price of a home in a given
ages housing was a major issue
years learning the HUD housing
area. The ceiling would be com-
in the election campaigns of
programs, it came as no surprise
puted separately for new and ex-
1988. Of the new president and
to me when it was reported to
isting homes. This is badly
Congress that were sent to
the Congress that the idea of
needed because the most recent
Washington, the people back
federal insurance in the Federal
$101,250 mortgage limit is
home are looking for fresh lead-
Housing Administration (FHA)
grossly insufficient in high-cost
ership. Housing is one of those
and Veterans Administration
areas. It was below the cost of
issues on which that leadership
(VA) was one of the most effec-
last year's median-priced home in
will be judged.
tive, cost-efficient ways of pro-
20 percent of all metropolitan
For the past two years, some
viding homeownership oppor-
areas, including five of our top
of our most accomplished home
tunities. Along with tax
10 cities.
builders as well as members of
incentives to encourage and ena-
Allowing first-time home
NAHB's staff have sat down
ble prospective home owners to
buyers to use tax-free funds from
with housing activists in the
save toward downpayments,
Individual Housing Accounts or
Congress and some of the fore-
bringing the FHA and VA pro-
IRA, Keogh and 40l(K) retire-
most intellects in our universities
grams up to date offers a prom-
ment plans for downpayments.
to work out some innovative so-
ising approach without putting
Planning for a family's financial
lutions to our housing problems.
additional strains on an already
future ought to start with the
Because of mushrooming federal
overcommitted federal budget.
purchase of a home. The finan-
borrowing in recent years, our
Several recommendations to
cial return on an investment in a
bolster homeownership oppor-
tunities are on the table. As the
8
© Steve Gottlieb/1988
new home is unparalleled. And
Yet this is often easier said than
nia builders reported that devel-
in the meantime, money invested
done. Too many communities
opment fees and requirements
in homeownership plays a far
have yet to recognize that their
for utilities, amenities and land
worthier social purpose than
zoning ordinances and their
dedications added $19,000 on
money sitting in a bank.
other building regulations are
average to the cost of building a
Reducing FHA downpay-
unfair and out of date.
typical single-family home.
ment requirements and expand-
I can remember when the
When we have to include a gov-
ing the availability of FHA Ad-
mayor of any town thought it
ernment cost of this size in the
justable Rate Mortgages. In the
was one of his chief duties to en-
sales price of the new homes we
conventional mortgage market,
courage development and
build, it is almost impossible to
ARMs have been a major factor
growth so that the community
provide an affordable home for
in offsetting the negative impact
would be a better place to live.
the carpenters, bricklayers,
of rising interest rates. They have
Today, where regulation has got-
school teachers, nurses, police
enabled home buyers to start off
ten out of hand, housing prices
and firemen, office support staff
with more affordable financing.
have become so high that the
and others workers who we want
On a trial basis, zero downpay-
workers who serve the commu-
to be an integral part of our
ment FHA loans merit consider-
nity often can't afford to live
communities.
ation for first-time home buyers.
there.
Economists as well as builders
California provides a dramatic
and other community leaders
The Regulatory Challenge
example of where we have gone
know that a healthy supply of af-
wrong in our regulatory over-
fordable housing is indispensable
Of course, the full measure of
sight of housing. That state has
for local economic growth.
housing affordability cannot be
suffered from a growing trend
Through education of the voting
provided by the federal govern-
among localities to assess charges
public significant progress has
ment. Of the many cost compo-
against new home buyers in or-
been made toward advancing
nents of building a new home,
der to pay for improvements in
this message. We look forward to
none over the past decade has
facilities and services that every-
making even greater strides in
increased as rapidly as the cost of
one uses. We in the home build-
regulatory reform in the future,
land. Building more housing on
ing industry know better. It's
because this is crucial for a final
less land is the obvious solution.
only fair that these ought to be
resolution of the housing afford-
financed out of general tax reve-
ability issue.
nues. In a 1987 survey, Califor-
9
Who Pays What Share Of
Federal Taxes?
By Income Group
$30,000
and Under
12.9%
$75,000
and Over
44.9%
$30,000 to
$75,000
42.2%
Preserving the
Mortgage Interest
Deduction
ot everything that the
has opened up homeownership
Who Gets What Share of the
N
Congress is consider-
opportunities for millions of
Mortgage Interest Deduction?
ing is necessarily
American families. It is the cor-
By Income Group
geared to improving
nerstone of our housing policies.
housing problems, either. Con-
With housing costs more formi-
gressmen have been reluctant to
dable than ever, it is hard to
$30,000
and Under
talk about it, but there has been
imagine a worse moment for
10.1%
a movement on Capitol Hill to
tampering with this deduction.
$75,000
scale back and perhaps eventually
Worse still, efforts to cap the de-
and Over
eliminate the single most popular
duction have been based on the
35.2%
item in the nation's tax code: the
false premise that this will pro-
mortgage interest deduction.
vide a meaningful source of new
$30,000 to
Proposals to cap the deductible
tax revenue. The truth of the
$75,000
amount of interest from home
matter is that relatively few addi-
54.7%
mortgages would do more harm
tional tax dollars would be
than all the good many in Con-
gained unless the deduction were
gress hope to achieve in the next
reduced to the point that it im-
housing bill.
pinged upon most existing home
By reducing actual monthly
owners. In that case it would be
mortgage costs significantly, the
a prescription for chaos at a time
Mortgage Interest Deduction
mortgage interest tax deduction
when we ought to be seeking
Promotes Homeownership
greater stability in our nation's
Opportunities
housing policies.
The mortgage interest deduction is the
cornerstone of the nation's housing pol-
icies and one of the few remaining tax
breaks for middle-income Americans
The bulk of tax savings from the mort-
gage interest deduction go to households
making between $30,000 and $75,000
a year. They pay 42.2 percent of all
taxes collected and receive 55 percent of
the benefits from the mortgage interest
deduction.
Source: Joint Committee on Taxation and
Internal Revenue Services; compiled by the
NAHB Economics, Mortgage Finance and
Housing Policy Division.
10
Housing for the
Poor
infortunately, the na-
U
tion's housing prob-
lems do not end with
the middle-class
young who are attempting to get
on the first rung of the housing
ladder. This is only where they
begin. It stands to reason that if
the more affluent segments of
the population are experiencing
difficulties, then those with the
lowest incomes are even worse
off.
The sad story is that for a
broad segment of families with
lower incomes, there is no such
thing as affordable housing to-
day. According to the Joint Cen-
ter, from 1981 to 1986 the
number of vacant rental units
the big cities of the Northeast.
and one of the places in which it
rose from 1.54 million to 2.66
But in other parts of the coun-
has become most evident is
million. But 90 percent of these
try, where vacancies continue at
housing. The fastest growing
vacancies occurred in units rent-
near-record levels, it will be a
segment of the nation's homeless
ing for more than $300 a
few years before the impact of a
population is made up of fami-
month, well beyond the means
severe slowdown in the produc-
lies, usually single mothers, with
of most low-income households.
tion of rental housing will be-
children. Their need for support
The total number of units rent-
come apparent.
is urgent, starting with basic
ing for less than $300 declined
Aside from restoring some tax
shelter and continuing with a
by nearly one million units be-
incentives for the production of
range of services that will help
tween 1974 and 1983.
apartments, Congress will again
them to return to jobs and finan-
From 1975 to 1983, the num-
have to address this housing
cial self-sufficiency.
ber of poor people paying more
problem by maximizing the use
The causes of homelessness in
than 50 percent of their income
of federal dollars. This could be
this country are many. The needs
for rent increased from 3.7 mil-
accomplished by targeted pro-
of the homeless are varied. And
lion to 6 million, almost half of
duction programs that might re-
a lasting solution to the problem
all low-income renters. Among
quire matching contributions
will not come easily. Full fund-
young single-parent families with
from states and localities to stim-
ing of the Stewart B. McKinney
children, rents have grown espe-
ulate the construction of afforda-
Homeless Assistance Act, which
cially burdensome. Their rents
ble rental housing. The availabil-
President Bush has promised to
increased from 34.9 percent of
ity of tax-exempt revenue bonds
support, is the first step we need
income in 1974 to 58.4 percent
should also be expanded to meet
to take. The homeless people on
in 1987.
this purpose. Housing vouchers
our streets are a reminder that
Part of the rental affordability
are also part of the solution in
even in the best-housed nation
problem stems from the Tax Re-
areas where there are vacant
on earth, shelter is a basic hu-
form Act of 1986, which sharply
apartments.
man need that we should never
reduced incentives for invest-
take for granted. The problem of
ments in multifamily projects.
Unless some of these incentives
On the Margin of
homelessness in America has
are restored, the problem will
Homelessness
gone on for too long. Now is
the time to show that we care
get worse. The adverse impact of
If millions of Americans are on
too much about our fellow hu-
the new tax rules on the multi-
the margin of homeownership,
man beings to allow this prob-
family sector is already being felt
millions more are just one finan-
lem to continue.
by renters in some of the na-
cial setback from joining the
tion's tighter apartment markets,
homeless population. Clearly,
which tend to be concentrated in
poverty is on the nation's plate
11
© Kris Ruckdeschel/1988
Housing-
There is something special about
building a house and then
A People Agenda
watching a family making that
house a home. I can drive down
ousing is a people
streets in Lexington today and
H
industry. I suppose
look at the homes I built 20
that is what attracted
years ago and take away the feel-
me to the home
ing of satisfaction that I have
building profession in the first
helped build a better life for the
place. And that is why I have re-
people who live there. As home
mained a builder even though I
builders we don't just trade on a
know that housing is one of the
dream. We turn that dream into
most cyclical industries there is. I
a reality. We share in the pride
have faced some tough times in
and joy of millions of hard
my business when interest rates
working Americans in their
were up and chances are I'll see
homes. For decades our country
some tough times again, even
has used homeownership and its
though recent changes in the
housing to define what the
way our industry is capitalized
American way of life is all about.
provide some reassurances. And
In our housing we have discov-
the building process itself can be
ered opportunities our ancestors
full of complications and uncer-
never dreamed possible. I am
tainty every step of the way-
committed to keeping those op-
from getting the go-ahead at the
portunities alive, so that years
planning office to negotiating a
from now when we are asked,
good price on your building ma-
"Where will our children live?,"
terials to working with subcon-
we can answer with a smile:
tractors and rounding up a crew
"Our children will live in decent,
when construction laborers are
affordable housing which will
in short supply.
provide a safe haven for raising
Despite all those aggravations,
their families and a solid founda-
I would say every minute I have
tion for pursuing their life's
spent as a builder was worth it.
goals."
12
Shirley McVay Wiseman
President
National Association of Home Builders
1989 NAHB Senior Officers
President
Shirley McVay Wiseman
Lexington, Ky.
First Vice President
Martin Perlman
Houston, Texas
Vice President/Treasurer
Mark Ellis Tipton
Raleigh, N.C.
S
hirley McVay Wiseman, a home builder from Lexington,
Kentucky, and Lake Wales, Florida, is the National Associa-
Vice President/Secretary
tion of Home Builders' 1989 president.
Robert "Jay" Buchert
The first woman ever to serve as president of the 157,000-
Cincinnati, Ohio
member association, she is also the president of Wiseman Construc-
tion & Development Company, Inc., of Lexington, and of Wiseman
Immediate Past President
Homes of Florida, Inc.
Dale Stuard
During her 20-year career in building she has constructed more
Newport Beach, Calif.
than 1,500 single-family homes and apartment units and developed
commercial property and a shopping center.
Executive Vice President
She served as the HUD deputy assistant secretary for single-family
Kent W. Colton
housing in 1983 and 1984. In 1984 and early 1985 she was HUD's
Washington, D.C.
general deputy assistant secretary for housing/federal housing
commissioner.
Wiseman has been active in the National Association of Home
Builders for almost 20 years and has served as a national vice presi-
dent, a member of the Executive Committee and chairman of the
Committee on Membership. She became an NAHB life director in
This report was published and edited by
1979. Also active in state and local builder associations, Wiseman has
the Public Affairs Division of the
served on the board of directors of the Home Builders Association
National Association of Home Builders.
of Kentucky and chaired and/or served on a number of that associa-
Design by Bono Mitchell Graphics.
tion's committees. She was named Builder of the Year by the Ken-
tucky association in 1980.
In 1975, Wiseman was president of the Home Builders Associa-
tion of Lexington. She served on its board of directors from 1972 to
1978 and chaired and/or served on a number of its committees.
The association named her its Builder of the Year in 1978. Wise-
man also founded the Home Owners Warranty Corporation of Lex-
ington and served as its first president in 1976.
A founder and officer of Lexington Housing for the Handicapped,
Wiseman also served as an adviser to the Urban League.
Wiseman served on the Small Business Administration's National
Advisory Board in 1982 and 1983 and on its Social Security Task
Force in 1982.
She was recently appointed to the Florida Developmental Disabili-
ties Council by Florida Governor Bob Martinez.
National Association of Home Builders
15th and M Streets, N.W.
Washington, D.C. 20005
(202) 822-0406
National Association of Home Builders
National Housing Center
15th and M Streets, N.W., Washington, D.C. 20005
Telex 89-2600 (202) 822-0470
Robert D Bannister
Senior Staff Vice President
February 1, 1990
Christina Martin, Research Assistant
111 Old Executive Office Building
The White House
Washington, D.C.
20500
Dear Christina:
I wanted to drop you a note to tell you how enthusiastic the
13,000 flag waving homebuilders were in response to President Bush's
speech in Atlanta, Georgia. It was one of the best speeches that any
group has ever heard on housing.
I heard many comments about the President's remarks which
included a Member of Congress saying "I believe I just heard the best
speech George Bush ever gave." Also, numerous builders said that
George Bush said more about housing in 20 minutes than Ronald Reagan
did in eight years.
I really appreciate all of your efforts in the development of
that speech. Again, it was a tremendous hit and we will be sending
video tapes to the 800 local home builders associations throughout the
country.
If I can be of any assistance in the future, please do not
hesitate to contact me.
Sincerely,
Robert D Bannister
Senior Staff Vice President
RDB:kok
P.S. I attended the State of the Union message last night and was
delighted to hear the Presidents remarks on housing and the HOPE
announcement.
National Association of Home Builders
15th and M Streets, N.W.
WASHING
U.S.POSTAGE
Washington, D.C. 20005
FEB 2'90
025
D.C
P.B METER
6027291
Christina Martin, Research Assistant
Office of Communications
111 Old Executive Office Building
Washington, D.C.
20500
PREPARED BY
The National Association of Home Builders
Public Affairs Division
November, 1988
HELPING
PEOPLE
A Guide to
Community Service Activities
by State and Local
Home Builders Associations
This publication was made possible by a grant from the
U.S. Department of Labor,
Employment and Training Administration
to the
Home Builders Institute,
the Educational Arm of the
National Association of Home Builders
Table of Contents
Introduction
Helping People: An Industry Commitment
Dale Stuard
6
Foreword
The Ten Things You Should Know Before Undertaking A
Community Service Project
Marlene McMahon, CAE
7
Shelters/Homes for Special Needs Populations
Adopt-A-Shelter
Metropolitan Omaha Builders Association
10
Women's Haven
Builders Association of Fort Worth & Tarrant County
11
Friends of the Homeless Shelter
Peninsula Housing and Builders Association
12
Wesley House
Home Builders Association of Chester and Delaware Counties
13
LIEU-CAP Shelter
Greater Los Angeles Area Chapter
Building Industry Association of Southern California
14
Lancaster Community Shelter
Antelope Valley Chapter
Building Industry Association of Southern California
15
Providence Home
Remodelors Council of Greater Columbia
Home Builders Association of Greater Columbia
16
Villa Santa Maria Boys Home
Remodelors Council of Central New Mexico
Home Builders Association of Central New Mexico
17
Alabama Sheriff's Boys Ranch
Huntsville/Madison County Builders Association
18
Western Carolina Rescue Mission
Home Builders Association of Greater Asheville
18
Group Home for Retarded Adults
Home Builders Association of Metropolitan Atlanta
19
St. Mary's Child Center
Indiana Builders Association
Builders Association of Greater Indianapolis
20
HELPING PEOPLE 3
Saint Vincent Guest House
Builders Association of Northwestern Pennsylvania
21
Renovated House
Remodelors Council-Home Builders Association of Lincoln
22
Project New Hope
Remodelors Council of Western Maryland
Frederick County Builders Association
23
Fundraising
Operation Tom Sawyer
Suburban Maryland Building Industry Association
26
Raffle of Renovated Home
Apartment Builders and Owners Council
Home Builders Association of Maryland
27
Enterprise Loan Fund
Home Builders Association of Maryland
28
Building a Better Los Angeles
Shapell Industries
Building Industry Association of Southern California
29
Affordable Alternative Housing for the Homeless
Associated Builders and Owners of Greater New York
30
American Dream Run
New Jersey Shore Builders Association
31
Habitat for Humanity
Habitat for Humanity Carter Work Project
NAHB Vice President/Secretary Mark Tipton
34
Habitat for Humanity Homes
Nashville-Middle Tennessee Home Builders Association
35
Habitat for Humanity House
Home Builders Association of Greater Chicago
36
Community Revitalization
Boston Rebuilds
Builders Association of Greater Boston
38
Abbey Manor
Home Builders Association of Louisville
39
Erie County Rebuilds
Niagara Frontier Builders Association
00
Community Revitalization Projects
Pennsylvania Builders Association
41
4 HELPING PEOPLE
I
Job Corps/Apprenticeship/Pre-Apprenticeship
Sojourners Shelter
Charleston Job Corps Center
44
Christmas in April
Potomac Job Corps Center
45
Worker Retraining Program
Home Builders Association of Greater New Orleans
45
Constructive Protest
Miami Job Corps Center
46
Rehabilitation of Homes for Veterans
Oregon State Home Builders Association
46
Park Place Friends Home
Tidewater Builders Association
47
Craft Skills Projects
Home Builders Association of Greater Knoxville
48
Other Community Service Projects
Ronald McDonald House
Brigham Young University Student Chapter
50
Adopt-A-School Program
Texas Capitol Area Builders Association
50
Accessible Housing Council
Builders Association of South Florida
51
Accessible Bathroom for Needy Family
Texas Panhandle Builders Association
52
Easter Seals Perch
Building Industry Association of Lorain County
52
Urban Homesteaders Training Program
Home Builders Association of Utah
53
Caulk of the Town
Builders Association of Greater Indianapolis
54
Saturday Work-Day
Home Builders Association of Panama City-Bay County
55
Caring for Kids
Northeast Florida Builders Association
56
Postscript
Helping People: A Postscript
Kent W. Colton
59
HELPING PEOPLE 5
INTRODUCTION
Helping People: An Industry Commitment
by Dale Stuard
PRESIDENT, NATIONAL ASSOCIATION OF HOME BUILDERS
he American home building indus-
T
try has made the United States the
best housed nation in the world.
Visitors from other countries are often
amazed at the quality, size and comfort
of American homes. Producing the best
products possible has long been a hall-
mark of our economic system and the
American way of life.
But not everyone in our society reaps
Ict me SAY A KinD WORD About
the rewards that our nation offers. For-
tunately, another hallmark of the Ameri-
can way of life is to help people who
are in need. State and local home build-
ers associations, as well as individual
Fundraising
members, have been in the forefront of
Atlanta,
Job training for unemployed youths
many efforts to assist such people.
and adults
Helping People: A Guide to Commu-
Neighborhood revitalization (provid-
nity Service Activities by State and Lo-
ing both housing and job training)
cal Home Builders Associations presents
in
Helping urban homesteaders
a sample of the types of community ser-
Weatherization of homes for the
vice activities that our industry has un-
needy
dertaken throughout the country. This
publication is not intended to describe
While I'm
Building or renovating hospital guest
houses/Ronald McDonald Houses
every activity by every association. Its
Habitat for Humanity projects
purpose is to provide a cross section of
Programs for people with disabilities
activities so that association members
Bringing daycare facilities up to code
and other interested parties may be in-
A common thread runs through many
spired to initiate similar activities in
of these projects. Home building has
their communities. For each entry, an
provided a good life for American
address and telephone number has been
builders, and many of these builders
provided to obtain further information.
want to show their gratitude by giving
The variety of community service ac-
something back to their communities.
tivities by associations is quite impres-
Community service projects allow build-
sive. They include:
ers to feel good about helping people
Building or renovating shelters for the
who are in need. These projects also al-
homeless
low builders to develop closer ties with
Building or renovating homes for bat-
various segments of the community,
tered women
which can help a great deal when they
Building or renovating homes for
need to work together in the future.
troubled children
The National Association of Home
Building or renovating homes for re-
Builders encourages all of its state and
tarded adults
local associations to be involved in their
Building or renovating homes for
communities. We want all citizens to re-
needy individuals
alize housing as "The American Promise."
6 HELPING PEOPLE
FOREWORD
The Ten Things You Should Know Before
Undertaking A Community Service Project
by Marlene McMahon, CAE
PRESIDENT, EXECUTIVE OFFICERS COUNCIL
NATIONAL ASSOCIATION OF HOME BUILDERS
articipating in a community service
ing as well as construction on some
P
project is one of the most rewarding
projects. If necessary, look for
activities a state or local home
sources of grant money.
builders association can undertake. As
6. Skilled labor is preferable if you
with any construction project, you
have difficulty finding someone
should approach community service ac-
who can make a sizable commit-
tivities with a specific plan of action.
ment of time to supervise the proj-
Here are ten helpful things you should
ect. Trainees can be an excellent
know before you get started.
source of free or inexpensive labor
1. It is almost always better for an as-
if they are properly supervised.
sociation to concentrate its re-
7. Try to involve community groups in
sources on one project rather than
the projects, such as on an advisory
spreading itself thin with many proj-
committee.
ects.
8. Try to get the help and support of
2. An association should appoint an
local government entities for the
organizing committee to coordinate
project. This is especially important
all involvement in the project.
for matters involving zoning, in-
Often, the energy and initiative of
spections, and possible funding.
one dedicated member of the com-
9. Involve the local chapter of the
mittee can be the impetus for un-
NAHB Auxiliary and other groups
dertaking a project and seeing it
within your association in the ef-
through to completion.
fort. Community service projects
3. Treat all projects as serious jobs,
are an excellent way to create
and do not do anything on a hand-
greater cohesiveness among your
shake basis, no matter how well-
members.
meaning the participants.
10. Stick to construction-don't try to
4. Two of Murphy's Laws are,
manage social service facilities.
"Everything takes longer than it
Builders associations can give com-
should" and "Nothing is as simple
munity projects credibility during
as it looks." Expect everything in a
fundraising, because donors will
community service project to take
know that the construction will be
longer and be more difficult to co-
in competent hands. Likewise,
ordinate than a typical job because
builders associations should defer to
of the use of volunteers. Also be-
community groups on matters in-
ware that major remodeling can be
volving social issues.
more difficult than building from
The community service activities de-
scratch, because you may encounter
scribed in this publication can be a great
unforeseen complications in a dilap-
source of pride for the home building
idated existing structure.
industry. But for every call that a build-
5. Figure out how much land, labor
ers association has answered, many
and materials will be needed, and
more needs are crying for help. By
how much association members and
planning future involvement in your
other sources in the community can
community wisely, you can bring a
reasonably be expected to donate.
great sense of fulfillment to people in
Be prepared to engage in fundrais-
need and members of your association.
HELPING PEOPLE 7
Shelters/Homes for
Special Needs Populations
Illustrations by Kenneth Krawczyk
NEBRASKA
Adopt-A-Shelter
Metropolitan Omaha Builders Association
The Metropolitan Omaha Builders Asso-
MOBA member firms, and in some
ciation (MOBA) has initiated a program
cases, non-members. All subcontractors,
to "Adopt-A-Shelter" each year to help
builders, and suppliers who were asked
the homeless. In November, 1987,
to help with the project gave beyond
MOBA wanted to undertake a commu-
MOBA's expectations, ultimately donat-
nity service project. According to
ing close to $50,000 in labor and mate-
MOBA board member Robert Pette-
rials.
grew, "The public has been good to us
More than 150 people contributed to
over the years by supporting the associ-
the renovation. By February, 1988, the
ation's annual Home Show and Street of
Day House opened its doors, only 90
Dreams, so we decided to have an an-
days after MOBA's board of directors
nual program that would put something
approved the project. The shelter pro-
back into the community." The associa-
vides meals, showers, medical care,
tion decided upon a project to help the
laundry facilities, job referral, counsel-
homeless, both because homelessness
ing, and access to other social agencies.
was one of the most pressing needs fac-
After completion, MOBA set up a hot-
ing the Omaha community and because
line so that if the shelter developed a
the builder members felt that such an
construction problem, an MOBA mem-
activity would be fitting for those who
ber would respond.
make their living by housing people.
The MOBA Auxiliary played a major
MOBA first sought input and guide-
role in making the project a success.
lines from advocates involved with the
Around the time of the opening, the
homeless community. Through discus-
Auxiliary held an "Adopt-A-Shelter
sions with the president of the Coalition
Shower," at which the women contrib-
for the Homeless in Omaha, the associa-
uted clothing, food, medical supplies,
tion found that the Dorothy Day House
and money to the Day House. In
was in the most critical need of help.
March, members sold "Adopt-A-Shel-
The "Day House" was the only shelter
ter" T-shirts at $10 apiece, with the en-
in Omaha where the homeless could get
tire proceeds being donated to the shel-
out of the elements and have a hot meal
ter. And in April, the Auxiliary's board
during daytime hours. The Day House
of directors voted to use $200 from their
had lost the lease on its last facility.
philanthropic fund to purchase picnic ta-
The Coalition for the Homeless had
bles for the shelter.
been working on a new facility for six
MOBA has developed the "Adopt-A-
months, but the shelter was not yet
Shelter" treehouse as its official logo.
open.
The association plans to undertake a
MOBA's Board of Directors decided
new project each year to demonstrate its
to adopt the Day House as its 1988
ongoing commitment to the homeless in
project. Within a week, the association
Omaha.
formed a 10-person shelter committee
which contacted two of the Day House
Metropolitan Omaha Builders
community members to obtain a wish
Association
list. Once the wish list was complete,
295 N. 115th Street
the committee began soliciting contribu-
Omaha, NE 68154
tions of labor and materials from
402-333-2000
10 HELPING PEOPLE
TEXAS
Women's Haven
Builders Association of Fort Worth & Tarrant County
The Builders Association of Fort Worth
raised on their own. BAFWTC solicited
and Tarrant County (BAFWTC) built a
donations through its association publi-
17,000 square foot structure in 1987 for
cations and other sources for the pro-
Women's Haven of Tarrant County, a
jected $1.5 million that was needed for
home for battered women and children.
the construction of the home. Associa-
Women's Haven had been housed in an
tion members were directly responsible
old 6,000 square foot, one-story county
for donations of $400,000 in labor, ma-
building with a 32-person capacity, but
terials, and money. Another $900,000
on occasion, had squeezed in as many
was received through grants which di-
as 48 women and children. The old
rectly resulted from association involve-
building provided little opportunity to
ment.
help the women and children regroup in
The new facility was dedicated in
a positive environment. In 1986, the or-
May, 1987. Its 13 bedrooms can tempo-
ganization was forced to search for a
rarily house 54 women and children
new home when the county announced
who need to get out of abusive home
that it was reclaiming the building to
situations. BAFWTC's Remodelors
use as a minimum security prison.
Council has agreed to do touch-ups and
Former BAFWTC president Herman
minor repairs as an ongoing project.
Smith, who is also a past president of
The partnership and cooperation be-
the National Association of Home
tween the builders association and
Builders, became aware of the plight of
Women's Haven was the key ingredient
Women's Haven and decided to help.
to success. Women's Haven understood
He convinced the BAFWTC board of
the issues involved in helping battered
directors to support the construction of a
women and children, but lacked exper-
new shelter. BAFWTC drew prelimi-
tise in construction. Various foundations
nary plans, and an announcement was
agreed to support the project when they
made at city hall that the association
heard that the builders association was
would join hands with Women's Haven
becoming involved and the construction
to build the home. BAFWTC also
would be in competent hands. Accord-
formed a steering committee to promote
ing to Women's Haven executive direc-
the concept, and local publicity gener-
tor Sharon Marshall, "We would never
ated strong support even outside the as-
have been able to build our building
sociation's membership. A builder
without the builders association."
member was hired to serve as project
superintendent, which was a key to suc-
Builders Association of Fort Worth
cess. Ground was broken in October,
and Tarrant County
1986.
PO Box 8644
Women's Haven officials bought a
Fort Worth, TX 76124
$110,000 parcel of land with money
817-457-2864
HELPING PEOPLE 11
VIRGINIA
Friends of The Homeless Shelter
Peninsula Housing & Builders Association
The Peninsula Housing and Builders As-
advisory committee comprised of nu-
sociation (PHBA) is renovating a build-
merous community and civic groups.
ing in Newport News, Virginia, to be
Some of these groups enthusiastically
used as a temporary shelter for the
embraced the project, helping with pub-
homeless. In 1987, PHBA wanted to
licity and donations. For example, both
become involved in a community ser-
a local church and the local chapter of
vice project. At the same time, the local
the Knights of Columbus agreed to
board of Realtors was seeking involve-
make bunk beds if given the lumber.
ment in community service work, so the
Also, the Knights of Columbus and the
two groups combined their efforts. They
local Jaycees agreed to gather volunteers
were especially interested in finding a
to paint the shelter.
project that was housing related.
Neither the builders nor the Realtors
The City of Newport News purchased
felt they had the ability to manage the
an old AFL-CIO union hall for $95,000
shelter when completed. Sizable sums
with the intent of PHBA converting it
of money were needed for operating
into a shelter for the homeless. The one-
costs. Friends of the Homeless raised
story brick building was to house 25 to
more than $70,000 through government
30 people, mostly single men and
grants, and the Realtors were able to
women but with a few rooms for small
raise $16,000 through a raffle. The City
families.
is working with Friends of the Homeless
PHBA agreed to undertake the entire
to arrange for the ultimate management
renovation of the facility, while the
of the shelter.
Realtors agreed to raise funds for the
PHBA member Hal Morris, one of
project. In order to obtain grants from
the directors of the project, said, "Since
the federal, state, and local levels,
there is a builders association and board
PHBA and the Realtors had to form a
of Realtors in most areas, and because
separate corporation, which was called
most cities are facing the problem of
"Friends of the Homeless, Inc.'
homelessness, I would think that our
Tony Collins, president of PHBA's
project might be one approach for con-
Remodelors Council, agreed to super-
cerned businesspeople and local govern-
vise the project on a volunteer basis.
ments to form a coalition to seek solu-
Members of PHBA donated labor, mate-
tions."
rials and cash. If the project had been
undertaken by a private contractor, the
Peninsula Housing and Builders
estimated cost would have been
Association
$80,000. But because of the donations,
760 McGuire Place
it will end up costing only a small frac-
Newport News, VA 23601
tion of this.
804-595-1600
Friends of the Homeless formed an
12 HELPING PEOPLE
PENNSYLVANIA
Wesley House
Home Builders Association of Chester and Delaware
Counties
The Home Builders Association of
dropped the cost to a small fraction of
Chester and Delaware Counties
this. Members made contributions rang-
(HBACDC) in 1988 completed a thor-
ing from the architectural plans to the
ough renovation of the Wesley House,
finish and trimwork. HBACDC's execu-
the only emergency shelter for the
tive association council also donated
homeless in the City of Chester. The
$1,000 to buy Christmas gifts for the
shelter, formerly a vacant church, is op-
children who reside in the shelter.
erated by the United Methodist Church's
Vince Finisdore, who chaired the
Eastern Pennsylvania Conference, and
HBACDC's Wesley House committee,
has served homeless people for more
said: "People recognize homelessness as
than four years. Wesley House can ac-
a problem, and it's something we
commodate up to 100 men, women and
thought we could throw our weight be-
children. It is located in an economi-
hind. We want to have an impact in
cally distressed neighborhood with large
helping real community needs that exist
open areas where substandard housing
in both counties where we make our liv-
units have been demolished.
ings." The association is currently seek-
HBACDC's remodeling project in-
ing to become involved in additional
cluded improvements in the kitchen and
community service projects.
laundry areas, upgrading equipment,
and enlarging the dining facilities. The
Home Builders Association of Chester
changes also improved the aesthetics of
and Delaware Counties
the facility and made it more homelike.
1502 McDaniel Drive
The renovations would have cost
West Chester, PA 19382
$70,000 if the project had gone out on
215-692-7733
bids, but the donations by HBACDC
HELPING PEOPLE
13
CALIFORNIA
LIEU-CAP Shelter
Greater Los Angeles Area Chapter
Building Industry Association of Southern California
The Greater Los Angeles Area Chapter
ing an apartment and paying rent. The
of the Building Industry Association of
shelter also offers mental health coun-
Southern California put an addition on a
seling and assistance on how to find
Los Angeles County shelter for home-
childcare.
less women with children. The addition
The builders association's community
to the LIEU-CAP (Low Income and El-
relations committee made a major com-
derly United-Community Assistance
mitment to building the addition. Mem-
Project) Shelter in Venice increased the
bers donated expertise, labor and mate-
capacity of the facility from 18 beds to
rials to make the project a success.
30.
Without the addition, an average of 52
When the project was undertaken in
homeless women and children were
1987, Los Angeles County had an esti-
being turned away by the shelter each
mated 35,000 homeless people, but had
day. With the addition, the shelter did
only 3,500 beds to accommodate them.
not have to turn away as many of these
The LIEU-CAP Shelter tries to offer im-
homeless people.
mediate housing for families in crisis. It
assists mothers in providing for the
Greater Los Angeles Area Chapter
health and welfare of their children, and
Building Industry Association of
helps them to move into the mainstream
Southern California
of society. For example, it offers money
1571 Beverly Boulevard
management classes to teach mothers to
Los Angeles, CA 90026
save money and "sacrifice effectively"
213-250-8870
for their long-term goals, such as find-
14 HELPING PEOPLE
CALIFORNIA
Lancaster Community Shelter
Antelope Valley Chapter
Building Industry Association of Southern California
The Antelope Valley Chapter (AVC) of
the Building Industry Association of
Southern California is building a 9,000
square foot shelter for the homeless.
The Lancaster Community Shelter will
accommodate 50 people. The single
story facility will include men's and
women's dormitories, two units for fam-
ilies, a kitchen, a dining area and living
quarters for a manager. The shelter is
being built in cooperation with the City
of Lancaster and the Lancaster Redevel-
opment Agency.
"The objective was to build the shel-
ter through donations of labor and mate-
rials," said AVC representative Herb
Hirsh. Ground was broken on March
11, 1988 during a ceremony in which
U.S. Senator Pete Wilson, and represen-
tatives of the city council, community
groups and AVC participated. On April
23, after lumber, concrete and labor had
The shelter will be owned by the city
been donated, an old fashioned "barn
but will be operated by a private, non-
raising" took place. The entire framing
profit organization selected by the city.
for the structure was completed that day
by more than 100 volunteers. Over 50
Antelope Valley Chapter
companies in the Antelope Valley have
Building Industry Association of
contributed to the project. Hirsh said,
Southern California
"The business community has been
1805 West Avenue K
very generous, contributing labor and
Lancaster, CA 93534
materials in all phases of construction."
805-948-5518
HELPING PEOPLE 15
SOUTH CAROLINA
Providence Home
Remodelors Council of Greater Columbia
Home Builders Association of Greater Columbia
The Remodelors Council of Greater Co-
neously rather than one at a time.
lumbia (RCGC), which is part of the
RCGC members worked on the proj-
Home Builders Association of Greater
ect during the month of July. Nick-
Columbia, organized a major renovation
named the "Miracle Marathon at Provi-
of Providence Home, a local homeless
dence Home," the work was performed
shelter. In the spring of 1988, RCGC
mainly on weekends because summer is
chairman Jim Richardson contacted the
a busy time for remodeling contractors.
City of Columbia to offer assistance on
The major source of free labor was in-
projects involving the homeless. By co-
mates from the Watkins Pre-Release
incidence, the city had just begun
Center, a state corrections facility. Su-
searching for a contractor to perform
pervised by council contractors, the in-
renovations on Providence Home.
mates were able to work during the
Providence Home consists of three
week.
buildings which provide emergency
The members of RCGC are very
shelter for homeless men, women, and
proud of their work at Providence
families. The State of South Carolina
Home. The project received a substan-
had granted $63,000 for the renovation
tial amount of local news coverage.
to be administered through the city's
RCGC hopes to have some grant money
Department of Community Develop-
remaining after all the bills are paid to
ment. However, the proposed renova-
make a cash donation to the shelter. Jim
tions on two of the buildings were esti-
Richardson said, "We hope that our
mated to cost over $150,000.
successful effort will inspire other coun-
RCGC formed a committee to deter-
cils and associations to acknowledge the
mine the plausibility of completing the
homeless problem and to do whatever
project within the amount of the grant.
they can to help."
By revising the specifications of the re-
modeling job and getting pledges from
Home Builders Association of
council and association members for do-
Greater Columbia
nations of materials, the committee was
P.O. Box 725
able to recommend that RCGC take on
Columbia, SC 29202-0725
the project. RCGC decided to renovate
803-256-6238
the men's and women's shelters simulta-
16 HELPING PEOPLE
NEW MEXICO
Villa Santa Maria Boys Home
Remodelors Council of Central New Mexico
Home Builders Association of Central New Mexico
The Remodelors Council of Central
done, RCCNM had only nine builder
New Mexico (RCCNM) redesigned and
members. The members of the council
remodeled a bathroom in a shelter for
donated an average of 16 hours each,
abused boys. The Villa Santa Maria
and additional time was donated by em-
Boys Home, which houses 15 boys aged
ployees of members. Members worked
7 to 14, approached RCCNM for help.
evenings and weekends, and made many
The project consisted of gutting the ex-
out-of-pocket contributions of small
isting facilities, enlarging the area by 40
items.
percent, repairing plumbing lines, and
The project helped the members of
installing three showers, three urinals,
the council develop a sense of pride in
two toilets, three sinks, a window, and
their ability. It also displayed their com-
floor and wall tiles. Another require-
mitment to the community. The council
ment was that all areas had to be rein-
now has decided to undertake a yearly
forced to withstand possible physical
community service project.
abuse. The total cost of the job would
have been about $22,000 if let out to
Home Builders Association of Central
bid.
New Mexico
The project was completed while the
5931 Office Boulevard, N.E.
boys were on a camping trip for two
Albuquerque, NM 87109
weeks. In mid-1987 when the work was
505-344-3294
HELPING PEOPLE 17
ALABAMA
NORTH CAROLINA
Alabama Sheriff's
Western Carolina
Boys Ranch
Rescue Mission
Huntsville/Madison County
Home Builders Association
Builders Association
of Greater Asheville
The Huntsville/Madison County Build-
The Home Builders Association of
ers Association (HMCBA) built a new
Greater Asheville (HBAGA) framed the
home for the Alabama Sheriff's Boys
upstairs portion of the Western Carolina
and Girls Ranches, Inc., a non-profit
Rescue Mission for alcoholic men. The
charitable organization for dependent or
association had previously approached
neglected children. The children at the
the mission about performing repairs on
ranches come from broken homes; some
the mission building. At the time, the
come from county departments of hu-
building was being leased, and the mis-
man resources throughout the state, and
sion board felt that putting money and
others from private referrals. Each child
materials into a leased building would
accepted into the program must partici-
be imprudent. A capital fund drive was
pate willingly.
launched in March, 1986, and by the
The children at the ranches are taught
beginning of 1987, the mission had paid
values, responsibilities, and to respect
two-thirds of the cost of the building.
others as well as themselves. They at-
The mission then recontacted HBAGA
tend community schools and are in-
for assistance.
volved in school activities and sports.
The matter was brought before the
The children and staff also attend com-
HBAGA board of directors. The associ-
munity churches and are involved in
ation agreed to undertake the project,
church activities.
provide carpenters and donate materials.
In January, 1986, HMCBA undertook
All the work was done by volunteers on
the project of building a new boys ranch
one Saturday. As a result of HBAGA's
in Madison County. The new home is
help, the mission was able to proceed
5,040 square feet and provides shelter
with the next phase of its renovation
for 12 boys and houseparents. The asso-
work.
ciation formed a committee to solicit
materials, labor and supervisory help.
Home Builders Association of Greater
The new facility was dedicated in De-
Asheville
cember, 1986. HMCBA benefitted by
34 North Ann Street
creating public awareness of the associa-
Asheville, NC 28801
tion as a vital and caring part of the
704-254-8677
community.
Huntsville/Madison County Builders
Association
2809 Triana Boulevard
Huntsville, AL 35805
205-536-2602
18 HELPING PEOPLE
GEORGIA
Group Home for Retarded Adults
Home Builders Association of Metropolitan Atlanta
The DeKalb Chapter of the Home
The home, valued at $150,000, is sit-
Builders Association of Metropolitan
uated on a parcel of land donated by the
Atlanta (HBAMA) designed and con-
parents of one of the residents. Con-
structed a 2,300 square foot residence
struction began in mid-1985 and was
for mentally retarded adult women.
completed in the spring of 1986.
Changes in educational laws have con-
HBAMA's original goal was to build
tributed to an increase in mentally re-
the home with as few dollars as possi-
tarded individuals remaining in their
ble. The project committee anticipated
home communities longer to attend edu-
having to amortize only $10,000 to
cational programs especially designed
$20,000 in construction costs. They
for them. As these individuals mature,
were then going to lease the home to
their aging parents become unable to
the county to cover taxes and any costs
provide the needed level of care. Most
for labor and materials not donated.
families prefer to place them in commu-
In late 1986, HBAMA attempted to
nity residential homes instead of admit-
reduce or eliminate the debt. A success-
ting them to large institutions.
ful campaign, which included a raffle,
In July of 1984, the DeKalb Chapter
netted enough funds to retire the debt,
of HBAMA was seeking to become in-
thus enabling the association to maintain
volved in a community service activity.
the property without a mortgage. A
They contacted the DeKalb County
comparable facility would cost the
Health Department, which presented the
county an estimated $1,000 per month.
idea of the home for retarded adults.
HBAMA was able to lease the property
The association formed a project com-
back to the county health department for
mittee which began by working with
only $300 per month, saving the taxpay-
county and state officials to design the
ers $700 per month and $8,400 per
home and help secure donations of re-
year. Taxpayers also save an estimated
sources and funding. The committee
$4,000 per resident per year, because
called upon association members to do-
the cost of care in a home like this is
nate all of the materials, labor, legal
lower than the cost of care in a large in-
services, financing services, and cash
stitution.
necessary to complete the house. The
members responded by donating the
Home Builders Association of
concrete, steel, roofing, windows, insu-
Metropolitan Atlanta
lation, a heat pump, appliances, carpet
P.O. Box 450749
and other materials and services before
Atlanta, GA 30345
ground was broken.
404-938-9900
HELPING PEOPLE 19
INDIANA
St. Mary's Child Center
Indiana Builders Association
Builders Association of Greater Indianapolis
The Indiana Builders Association (IBA),
administrators in Indianapolis allowed
with the assistance of the Builders Asso-
tax credits for the land that saved thou-
ciation of Greater Indianapolis (BAGI),
sands of dollars. The state government
built and donated a new 10,000 square
helped with speedy processing and ap-
foot home in Indianapolis for the St.
proval for construction.
Mary's Child Center in 1986. The cen-
The new one-story center, valued at
ter houses children with mental, emo-
$500,000, was completed in 14 months,
tional, and physical disabilities.
and was dedicated-debt free-in No-
The center had been housed in a
vember, 1986. The facility, dubbed by
physically deteriorating abandoned grade
one newspaper as the "miracle on West
school. IBA member Bob Thompson,
Street," now serves as the day home of
who had been asked to inspect the
100 pre-school age children, offering
building in 1985, said that it was be-
hot meals, professional supervision and
yond repair, but much to the surprise of
training, new furniture, new toys, and a
the center, offered to build a new one.
fenced-in playground.
IBA made a commitment to become in-
When the new building was com-
volved in the project. A group of 45
pleted, the center suddenly found itself
community leaders, tagged as "godfath-
with increased space and double the
ers," oversaw all phases of the effort.
number of children to serve, so more
Hundreds of individuals made contri-
staff and equipment were needed. IBA
butions. Suppliers donated concrete,
has made a commitment to hold annual
lumber, windows, trusses, roofing, gut-
charity golf tournaments and roasts to
tering, flooring, plumbing, heating and
raise money to help the center.
cooling, electrical equipment, and var-
ious other materials. Craftspeople, deco-
Indiana Builders Association
rators, painters, and others donated their
1011 N. West Street
skills either free of charge or at very
Indianapolis, IN 46202
low cost.
317-236-6334
Government entities also helped. City
Future Home of
ST. MARY'S
CHILD CENTER
CONTRACTOR: R.N. THOMPSON
CONSTRUCTION CO.
20 HELPING PEOPLE
PENNSYLVANIA
Saint Vincent Guest House
Builders Association of Northwestern Pennsylvania
The Builders Association of Northwest-
ern Pennsylvania (BANP) completely
gutted and remodeled a facility to house
the families of patients undergoing treat-
ment at the Saint Vincent Health Center
in Erie. The guest house has nine dou-
ble rooms, each with a private bath,
plus a kitchen, dining area and lounge
area for general use.
When BANP decided to become in-
volved, the original intent was to create
one central facility that would meet the
needs of all area hospitals. Further in-
vestigation and development of the con-
cept with hospital representatives re-
sulted in a commitment to produce a
facility for the Saint Vincent Health
Construction took 16 months, with
Center.
completion occurring in the spring of
BANP&had previously been involved
1987. The project included rearranging
in a similar renovation of a hospital
the entire interior layout, including the
guest house. The project caused strains
replacement of a staircase. The building
on volunteer manpower and finances.
also required a new heating system, new
An important lesson learned from the
electrical service, new water service,
experience was that remodeling jobs
complete insulation, installation of an
should never be done on a handshake
alarm system and the replacement of all
basis, no matter how worthy the cause
windows. Day-to-day operation of the
or how good the intentions of the parties
facility is handled by the hospital, with
involved. Hence, for the St. Vincent
BANP and community representatives
project, the hospital and BANP devel-
serving on an advisory committee.
oped a written agreement which clearly
BANP executive officer Robert Price
spelled out the roles, rights and respon-
commented that small, independent busi-
sibilities of each party.
nesspeople have difficulty making an
The space and most materials were
impact in the area of community service
provided by the hospital. BANP pro-
by acting individually. But by partici-
vided the manpower and the expertise.
pating in a project through a builders as-
Some 30 member firms and over 100
sociation, Price said that members can
volunteers contributed to the project.
make an impact far greater than the sum
BANP worked closely with an architect
of what each could do alone.
to develop a set of plans. One represent-
ative of the hospital was given the au-
Builders Association of Northwestern
thority to make decisions, and was des-
Pennsylvania
ignated as the sole contact with BANP.
2415 West Grandview Boulevard
He coordinated everything on Saint Vin-
Erie, PA 16506
cent's part and kept all departments of
814-833-3999
the hospital informed.
HELPING PEOPLE 21
NEBRASKA
Renovated House
Remodelors Council-Home Builders Association of Lincoln
The Remodelors Council of the Home
vices. The home was soon purchased by
Builders Association of Lincoln (HBAL)
a couple with four children for $41,000.
completely renovated a deteriorating
The money was used to pay off a city
home in 1987 in order to help revitalize
lien on the property and to recoup
one of Lincoln's older neighborhoods.
NHS's investment for materials. The
The house, which was under threat of
couple had heard about the availability
being condemned, had been donated to
of the home through their church.
the Neighborhood Housing Service
For the Remodelors Council, the proj-
(NHS) of Lincoln, a local non-profit
ect represented a successful cooperative
agency.
effort with neighborhood residents, the
The Remodelors Council decided to
city government, and the business com-
take on the job, with 44 contractors do-
munity. Also, because Lincoln's Remod-
nating labor. These and other HBAL
elors Council was relatively new, the
members contributed materials. NHS
project brought together members who
provided an additional $20,000 for ma-
previously had been only casually ac-
terials. Before construction began, Re-
quainted and bonded them together as a
modelors Council members and volun-
more cohesive organization.
teers spent about six weeks tearing
down walls, sweeping out hundreds of
Home Builders Association of Lincoln
dead cockroaches and cleaning about
941 o Street
two inches of dirt and garbage from the
Penthouse Suite 1010
basement.
Lincoln, NE 68508
The Council replaced the original dirt
402-476-3385
floor with a concrete floor. New sub-
flooring, insulation, custom kitchen cab-
inetry, carpeting, and vinyl were added.
A completely new plumbing system was
installed throughout the house along
with new electrical wiring. New stair-
cases were built to the second floor and
basement to meet current codes. Walls
and floors were reframed, and new sid-
ing and a new roof improved the outside
appearance. The Remodelors Council
provided about 1,600 hours of labor.
NHS put the finished 1,600 square
foot, four-bedroom home up for sale for
a low-income family (80 percent of area
median income). Preference was given
to applicants who had the necessary
downpayment, who had a family, who
were residing in the same section of
town, and who were willing to improve
the neighborhood through volunteer ser-
22 HELPING PEOPLE
MARYLAND
Project New Hope
Remodelors Council of Western Maryland
Frederick County Builders Association
The Remodelors Council of Western
quired drywall, exterior and interior
Maryland (RCWM), which is part of the
doors, flooring, bathroom fixtures, car-
Frederick County Builders Association
pet, and ceiling light fixtures. It also re-
(FCBA), renovated a home for a mother
quired demolition of walls, floors, and
and six children who had been living
the chimney, complete insulation, win-
separately in the homes of friends. In
dow and door construction, interior fin-
November, 1987, Mark Lancaster, a
ishing, plumbing and installation of the
member of RCWM's board of directors,
bathrooms, and extensive electrical
read about the family's plight in the
work. The final cost for labor and mate-
newspaper, and by the following eve-
rials was an estimated $50,000.
ning, presented blueprints, a three-page
RCWM members gave freely of their
materials list, and a $30,000 estimate to
time at one of the busiest times of the
the rest of the board. The next day,
year. Subcontractors worked on the
RCWM called the Solid Rock Assembly
project on evenings and weekends.
of God Church and offered to renovate
RCWM was able to compress a six-to-
the church's former parsonage into a
eight week job into three weeks. U.S.
five-bedroom, three-bathroom apartment
Representative Beverly Byron presented
for the family. The goal was to com-
the family with the keys to the structure
plete the project and reunite the family
at a ceremony on December 22.
by Christmas.
The Remodelors Council enlisted the
Frederick County Builders
assistance of FCBA. Contributions of
Association
time and resources were made by 75
15 South Carroll Street
businesses, both large and small. Work
Frederick, MD 21701
began on November 24. The project re-
301-663-3599
HELPING PEOPLE 23
Fundraising
MARYLAND
Operation Tom Sawyer
Suburban Maryland Building Industry Association
The Suburban Maryland Building Indus-
oversee a formal work plan and fund-
try Association (SMBIA) operates a
raising program, and to provide a means
charitable foundation called Operation
for receiving tax-deductible donations
Tom Sawyer (OTS). According to OTS
which could not be received by SMBIA.
President Neil Moreland, "One of the
The board of directors of the OTS
most important aspects of OTS is that it
Foundation is composed of SMBIA
is the only vehicle available to the
builder members.
members of our association to collec-
The Foundation has proven to be a
tively participate in making major con-
valuable means for SMBIA members to
tributions to the community."
contribute time, labor, materials and ex-
In 1980, SMBIA formed a committee
pertise to help those in the community
to identify worthy organizations in need
who are in need. In 1987, OTS helped
of assistance so that association mem-
convert a bus garage into a 30-bed year-
bers could return something to the com-
round homeless men's shelter. It was
munity. After several months of re-
built under a public-private partnership
search, the committee identified two
in which Montgomery County paid
groups which would benefit from the
$50,000 of the $90,000 renovation
active support and technical expertise of
costs. Federal community block grants
the building industry: the Boys' and
provided another $15,000. Youths in the
Girls' Homes of Montgomery County,
County Conservation Corps job training
and the Family Crisis Center of Prince
program donated labor.
Georges County.
OTS has also helped youth through
The Boys' and Girls' Homes help
the donation and construction of the Tri-
runaways and other troubled adolescents
County Youth Services Bureau facility
between the ages of 11 and 18. Their
in Waldorf. And it has helped needy
seven facilities all needed work, ranging
families through programs such as Ma-
from routine maintenance to extensive
gruder House in Rockville. The largest
repairs. One home needed complete re-
fund-raising event held for OTS is the
painting, carpentry, electrical and
annual "Day at the Races;" in January,
plumbing work, installation of new ap-
1988, nearly $10,000 was raised in this
pliances and cabinets, and extensive
one-day event that attracted more than
landscaping. OTS addressed the chal-
200 SMBIA members.
lenge by sponsoring a special Saturday
In 1987, OTS was awarded a Presi-
event for SMBIA members at the home,
dential "C-Flag" by Ronald Reagan in
featuring both work and a cookout and
recognition for its outstanding commu-
softball game.
nity service. The award is part of the
Within a few years, the activities of
President's Citation Program for Private
OTS grew too large to simply be dis-
Sector Initiatives.
cussed at periodic committee meetings.
The association decided to make it into
Suburban Maryland Building
a separate corporation with charitable
Industry Association
foundation status. The OTS Foundation,
11710 Beltsville Drive, Suite 120
Inc., was intended to undertake an on-
Beltsville, MD 20705
going community outreach effort, to
301-572-5900
26 HELPING PEOPLE
MARYLAND
Raffle of Renovated House
Apartment Builders and Owners Council
Home Builders Association of Maryland
The Apartment Builders and Owners
in the private sector.
Council (ABOC) of the Home Builders
Almost 9,000 raffle tickets were sold
Association of Maryland (HBAM) gut-
at $10 apiece. The Greater Baltimore
ted and renovated a townhouse in Balti-
Board of Realtors helped to sell the
more and then raffled it off to raise al-
tickets, and a local television station
most $90,000 for the homeless. The
helped greatly with the promotion. All
effort began in 1985 when the ABOC
of the proceeds were donated to Action
board of directors appointed a commu-
for the Homeless, an advocacy and
nity relations committee to undertake a
fundraising organization committed to
project to help a local charity. After se-
the elimination of the causes of home-
lecting this project to help the homeless,
lessness and to providing adequate ser-
committee chairman Michael Keelty
vices to the currently homeless. In addi-
said, "It seemed a natural marriage-
tion, Action for the Homeless provides
people who provide shelter aiding peo-
public education and allocates funds to
ple who don't have shelter.'
agencies serving the homeless in Central
A formerly vacant house was donated
Maryland.
to ABOC by the city. After the renova-
Baltimore Mayor Kurt L. Schmoke
tion, the only parts left from the original
drew the winning raffle ticket on May
structure were the front wall and two
24, 1988. The two-bedroom, two-bath
side walls. More than 60 companies do-
house, complete with a Jacuzzi, black
nated all materials and services.
marble fireplace, and cathedral ceilings,
The house was renovated in eight
was valued at $105,000.
months by construction trainees from
HBAM would like to undertake future
HBAM's Training Division, a craft
projects for the city. One option which
skills program established by NAHB's
has been discussed is to renovate a
Home Builders Institute. A grant from
home each year and sell it for $40,000
Baltimore's Office of Manpower Re-
or $50,000 to a low-income family. The
sources provided money for the labor as
proceeds from the sale could then be
well as a superintendent. The grant was
used to defray the costs of materials to
extremely important, because when the
build the next house.
project was being planned, ABOC had
expected to have difficulty finding the
Home Builders Association of
labor and a superintendent to do the job.
Maryland
The 40 trainees who participated learned
1502 Woodlawn Drive
entry-level construction skills while
Baltimore, MD 21207
working on the project, with the inten-
301-265-7400
tion of ultimately being placed in jobs
HELPING PEOPLE 27
MARYLAND
Enterprise Loan Fund
Home Builders Association of Maryland
total of 350 HBAM members made
either personal or corporate contribu-
tions to the fund. HBAM president John
Colvin said, "We at HBAM have a
strong commitment to investing in the
communities in which we live and
023305
work, ultimately to help people become
more self-sufficient and build their fi-
PAY
nancial independence permanently."
The fund pays a return of 3 percent
on certificates of deposit ranging from
$500 to $100,000 at participating banks.
The Home Builders Association of
According to James Rouse, what is
Maryland (HBAM) raised $1.2 million
unique about the program is that people
for the Enterprise Loan Fund (ELF) to
can contribute to a charitable service
finance low-income housing. The
and get all of their money back with a
money is earmarked for construction
return of 3 percent annual interest.
loans to non-profit developers, or if left
Because investors are being paid in-
untouched, would generate $30,000 in
terest below the market rate, the differ-
interest annually. The fund is adminis-
ence is used to allow developers of low-
tered by the Enterprise Foundation,
income housing to borrow money from
which was founded in 1982 by James
the fund at below the market rate. The
and Patty Rouse. Mr. Rouse had retired
Foundation's guidelines require that de-
as chief executive officer of the Rouse
velopers build projects for prospective
Company, a firm with a long standing
homeowners with incomes below
commitment to revitalizing American
$15,000 a year or renters with incomes
cities.
below $10,000. The Maryland Depart-
HBAM had previously been involved
ment of Housing and Community De-
in a variety of community service activi-
velopment has agreed to match money
ties, including contributions to such proj-
raised by the fund to provide eligible
ects as the House of Ruth and the Har-
buyers with 15-year, 8 percent mort-
riett Tubman Center (both are temporary
gages.
shelters for abused women and chil-
dren), and Project Shelter (a coalition of
Home Builders Association of
homeless advocacy groups). In May,
Maryland
1987, the association members pledged
1502 Woodlawn Drive
to raise $1 million for ELF.
Baltimore, MD 21207
Within a year, contributions exceeded
301-265-7400
the goal that HBAM had established. A
28 HELPING PEOPLE
CALIFORNIA
Building a Better Los Angeles
Shapell Industries
Building Industry Association of Southern Caliornia
Builder Nathan Shapell, a member of
much energy and funding being devoted
the Building Industry Association of
to meeting the immediate needs of the
Southern California, formed a non-profit
homeless, these agencies have had great
corporation in May, 1987, with Los An-
difficulty in effecting long-term solu-
geles Mayor Tom Bradley and County
tions to the problems causing homeless-
Supervisor Mike Antonovich to help the
ness. There is an urgent need for child-
homeless. Building a Better Los Ange-
care and education for young children;
les (BBLA) raised and distributed close
foster care, family reunification and
to a million dollars to help more than 40
emancipation support for homeless/runa-
organizations serving homeless individu-
way/throwaway youth; job training, in-
als, families and children in Los Ange-
terview skills, job development pro-
les County. Thousands of homeless peo-
grams, and transitional housing for
ple have been helped by the project.
working and non-working adults; and
Shapell called BBLA "a unique part-
food, shelter, medical care, and therapy
nership made up of both city and county
for all.
governments and the building and finan-
BBLA formed a 29-member advisory
cial industries.' He said that there were
committee, consisting of major devel-
two basic reasons the building and fi-
opers, contractors, architects, and repre-
nancial industries initiated the cam-
sentatives of government, agencies for
paign. First, Shapell said, "We wanted
the homeless, and savings and loans in-
to inspire other industries: banking,
volved in real estate development. In
aerospace, retail, high tech, textile, in-
January, 1988, the committee submitted
deed everyone, to come together and
a series of recommendations to Supervi-
make a serious effort to help solve,
sor Antonovich, including: modifying
once and for all, the many problems our
density bonuses that developers may re-
homeless are experiencing.' Second,
ceive for building affordable units in the
according to a report issued by a coun-
city and county; a review of city and
tywide task force, 64 percent of Los
county land holdings to find land which
Angeles' homeless population have been
could be sold to raise money for the
homeless for less than a year, and 20
construction of affordable units; and in-
percent for less than 30 days. Shapell
stituting a program to encourage private
said that if these people are not helped
sector development and/or renovation of
within the first six months of their
single room occupancy buildings as per-
homelessness, they can become chronic
manent housing for the homeless.
street-people who may have trouble ever
Although BBLA has completed its
rising out of their homeless situation.
work, Shappell Industries continues to
BBLA wanted to reach the people who
give homeless organizations priority in
had recently become homeless as soon
its charitable contributions.
as possible to help them back on their
feet.
Shapell Industries, Inc.
BBLA recognized that there are many
Wilshire-San Vicente Plaza
excellent programs in Los Angeles dedi-
Suite 700
cated to helping the homeless, but most
8383 Wilshire Boulevard
of them lack sufficient facilities, re-
Beverly Hills, CA 90211
sources, manpower and funds. With so
213-655-7330
HELPING PEOPLE 29
NEW YORK
Affordable Atlernative Housing for the
Homeless
Associated Builders and Owners of Greater New York
The Associated Builders and Owners of
cost of $85,000 each, with about
Greater New York (ABO), a local affili-
$20,000 going toward the purchase
ate of the National Association of Home
price and the remainder for renovation.
Builders, has proposed a five-year pro-
The bulk of the funding is expected to
gram to renovate 5,000 vacant apart-
come from the city and the state.
ments and house 22,000 homeless peo-
AAHH plans to buy entire buildings,
ple in New York City. The plan is
renovate them, and then turn the man-
currently under review by government
agement over to organizations for the
officials.
homeless. The city has provided AAHH
The problem of accommodating the
with a list of vacant, city-owned proper-
homeless in New York is at epidemic
ties that could be used. AAHH would
proportions. In early 1988, the City was
work closely with social service pro-
spending $1,800 a month to house each
grams to benefit the residents of the
of 5,400 homeless families, for an an-
newly created housing. In some in-
nual expenditure of $200 million. An
stances, units in occupied buildings
additional 20,000 indviduals were being
would be designated for the homeless.
accommodated at an annual cost of
The landlords of vacant properties
$250 million. Most of this $450 million
would offer the buildings for sale to
has been spent on temporary accommo-
AAHH. All rents for the refurbished
dations, which do not solve the long
apartments would come from welfare
term needs of the homeless.
now used to pay for the housing in wel-
In March, 1988, the ABO, under the
fare hotels and shelters. These funds
initiative of president Jerome Belson,
would then be turned back to AAHH for
agreed to join with the Real Estate
the upkeep of the units. The intention is
Board of New York and the Rent Stabi-
that at some point when the formerly
lization Association to propose a not-
homeless residents become self-suffi-
for-profit corporation called Affordable
cient, the units would be turned into
Alternative Housing for the Homeless
low-income cooperatives.
(AAHH). The proposed corporation
would be run by a five-member board
Associated Builders and Owners of
comprised of the presidents of the three
Greater New York
organizations, an ABO director, and the
122 East 42nd Street
ABO executive director.
New York, NY 10168
The apartments would be bought at a
212-986-2626
30 HELPING PEOPLE
NEW JERSEY
American Dream Run
New Jersey Shore Builders Association
The New Jersey Shore Builders Associ-
ation (NJSBA) hopes to raise $50,000
to feed and house the homeless by spon-
SHORE BUILDERS
ASSOCIATION
soring an "American Dream Run" in
Long Branch, New Jersey. The associa-
tion is calling on its more than 750
members to sponsor their employees in
a 5-kilometer race in October, 1988.
Corporate sponsorship fees are $100 per
racer, and NJSBA hopes to attract at
least 500 sponsors.
The proceeds will be donated to so-
cial service agencies which provide as-
sistance to the homeless. There are ap-
AMERICAN DREAM RUN 1988
proximately 500 homeless families in
Ocean and Monmouth Counties, the two
counties covered by NJSBA's member-
club in the state. Cash awards for the
ship. Many of these homeless people
overall male and female winners will be
live in shelters and motels. Commenting
$500 for first place, $300 for second,
on the situation, NJSBA president Jo-
$200 for third, $100 for fourth, and $50
seph Louro said: "While it is a nation-
for fifth.
wide problem, it is starting to affect
NJSBA plans to make the run an an-
New Jersey. It is not enough to express
nual event, and would like to see other
concern and sympathy. The American
builders associations sponsor similar
Dream is not being met in New Jer-
events.
sey."
A $6 entry fee will defray the cost of
New Jersey Shore Builders
T-shirts for the participants and the ad-
Association
ministration of the event. The race itself
190 Oberlin Avenue, North
will be coordinated by the Monmouth
Lakewood, NJ 08701
Athletic Track Club, the largest running
201-364-2828
HELPING PEOPLE 31
Habitat for Humanity
GEORGIA
Habitat for Humanity Carter Work Project
NAHB Vice President/Secretary Mark Tipton
President Carter and his wife Rosalynn,
Habitat has constructed more than 3,000
houses for low-income families world-
wide.
Homeowners are required to help
build their homes with "sweat equity."
Each family must spend 300 to 500
hours working on their own or someone
else's home. Some families work in a
Habitat office to pay back hours. Ac-
cording to President Carter: "Habitat's
solution to the housing problem is a
hand up, not a handout. It seeks to
break the cycle of poverty by working
in partnership with needy families to
construct new homes. In the process,
we build dignity, self-confidence and
self-reliance."
Families are carefully chosen to meet
Habitat guidelines. They must need new
housing, have income sufficient to meet
the monthly payments, and have a satis-
factory credit rating. And for the At-
NAHB Vice President and Secretary
lanta homes, the families must include
Mark Tipton joined with 1,000 other
children.
volunteers to help former President
Because the majority of materials and
Jimmy Carter build twenty homes in the
labor are donated, Habitat can afford to
Atlanta area. Tipton, a land developer
build sturdy, affordable homes for less
and general contractor from Raleigh,
than $30,000. Habitat makes no profit
North Carolina, gave a week of his time
from the homes and charges no interest
to help make shelter and decent housing
for its loans, which are repaid over a 15
a matter of conscience to the people of
to 25 year period. The houses are typi-
the United States.
ally 1,000 square feet with three bed-
Habitat for Humanity, headquartered
rooms and one bath. Mortgage pay-
in Americus, Georgia, was founded in
ments for the Atlanta homes are $175 a
1976 by Millard Fuller to construct
month, including taxes and insurance.
homes for the working poor. It is an
Habitat's long range plan in Atlanta is
ecumenical, Christian, non-profit organ-
to build 75 homes by 1990. A campaign
ization whose goal is to eliminate pov-
is underway to raise $1.5 million to
erty housing from the world. "We have
construct the first 50.
made a commitment in this country that
no human shall go hungry, yet we let
Habitat for Humanity
people freeze to death on the streets or
Habitat and Church Streets
in shacks," explains Fuller. With the
Americus, GA 31709
support of volunteers such as former
912-924-6935
34 HELPING PEOPLE
TENNESSEE
Habitat for Humanity Homes
Nashville-Middle Tennessee Home Builders Association
The pre-apprenticeship program of the
Nashville-Middle Tennessee Home
Builders Association (NMTHBA) is
working with Habitat for Humanity to
build 10 affordable single family homes
for needy families. The project is oper-
ated by volunteers and funded through
donations of building materials and
money from church groups and civic
and business organizations.
The trainees from the pre-apprentice-
ship program are recruited from the
long-term unemployed and the economi-
cally disadvantaged. They are not paid
for the work they perform during their
six-week training session. The trainees
who participated in the Habitat project,
Nashville Board of Realtors has donated
two of whom were women, ranged in
$14,000 to Habitat's efforts. The money
age from 19 to 40. According to pro-
was raised through a golf tournament.
gram coordinator Donny Sloan: "This
has been a real good project from a
Nashville-Middle Tennessee Home
learning standpoint and from the stand-
Builders Association
point of helping to provide housing. We
620 North First Street, #210
do some in the classroom, but they
Nashville, TN 37207
really learn by doing. It is sponsored by
615-244-7814
the Home Builders Institute, the educa-
tional arm of the National Association
of Home Builders, as a first step in ap-
prenticeship."
Homeowners must provide 500 hours
of labor to the homes they buy from
Habitat. NMTHBA president Harry
Johnson said: "You are looking at a big
commitment on the homeowners' part.
That commitment creates pride. That is
why we think it is a good long- and
short-term project."
NMTHBA donated more than
$10,000 of the proceeds from its 1988
Parade of Homes (an event to showcase
innovative new homes and to raise
money for the association) to buy mate-
rials for a home that will be erected in
one day to promote Habitat. The home
will be built in October, 1988. Also, the
HELPING PEOPLE 35
ILLINOIS
Habitat For Humanity House
Home Builders Association of Greater Chicago
Materials + Money + Love + You = The Gibbs House
The Home Builders Association of
and provided a no interest loan on a no-
Greater Chicago (HBAGC) and Habitat
profit basis. Private fundraising will pay
for Humanity built a specially designed
off most of the cost of the loan, and the
house for a quadriplegic child. Four-
guardian will take responsibility for the
year-old Natasha Gibbs had already
remainder of the cost of the home. All
spent more than half of her life in the
of the guardian's payments will build up
intensive care ward of a hospital as the
equity immediately, which will be held
result of severe abuse inflicted by her
in a trust for the Gibbs children. The
natural mother's boyfriend. Natasha
children will eventually own the house.
would have had to spend the rest of her
The project was organized by
life in an institution unless suitable
HBAGC's Community Outreach Com-
housing could have been found. Her
mittee. It also involved the association's
guardian could not afford suitable hous-
Young Builders Council, Apartment &
ing to care for Natasha and Natasha's
Condominium Council, and Sales and
brother and sister.
Marketing Council.
HBAGC was able to raise $15,000
for the Gibbs home with raffles, private
Home Builders Association of Greater
donations, and two fundraisers-a golf
Chicago
outing/picnic, and a dinner. In addition,
1010 Jorie Boulevard
many HBAGC members donated mate-
Oak Brook, IL 60521
rials and labor to the project. Habitat for
312-990-7575
Humanity secured the building permit
36 HELPING PEOPLE
Community Revitalization
MASSACHUSETTS
Boston Rebuilds
Builders Association of Greater Boston
The Builders Association of Greater
licensed professional tradespeople pro-
Boston (BAGB) sponsors a program
vide all instruction and supervision.
called Boston Rebuilds, which gives
Classroom instruction and tutoring helps
people an opportunity to gain experi-
the trainees develop basic trades vocab-
ence, basic literacy and vocational
ulary and math skills. Trainees receive
skills, and the tools needed to enter the
free safety gear and a free set of basic
building trades. The program is funded
hand tools, which they can keep when
by the Boston Mayor's Office of Jobs
placed on a job. Hands-on training em-
and Community Services, with grants
phasizes the safe and proper use of tools
provided by the Boston Private Industry
and the safe and accurate performance
Council. Additional private sector sup-
of basic trades procedures. The program
port comes from the Home Builders In-
has an excellent safety record, operating
stitute (the educational arm of the Na-
over 65,000 trainee hours without a
tional Association of Home Builders),
loss-time accident.
the Home Builders Association of Mas-
Since 1984, more than 200 Boston
sachusetts, and the Contractors Associa-
residents have graduated and entered
tion of Boston.
employment, which represents nearly 90
Boston Rebuilds serves a diverse pop-
percent of all of the trainees. The aver-
ulation from neighborhoods throughout
age starting wage is over $7.50 per
the city. Trainees range in age from 17
hour; many graduates make $8 to $10
to 55, and include high school drop-
per hour within one year, in some cases
outs, dislocated workers, public assis-
tripling the income they earned before
tance recipients, veterans, refugees, im-
entering the program. Some have en-
migrants, ex-offenders and people with
tered local union apprenticeships. Others
disabilities. Three-quarters are members
have opened their own companies and
of minority groups, 20 percent are
have hired new graduates.
women, and 20 percent have limited
During the past five years, NAHB's
command of the English language.
Home Builders Institute has served as
Training takes place at actual housing
the general contractor for 32 low in-
renovation and construction sites, help-
come housing units produced or in pro-
ing trainees to become accustomed to
duction by Boston Rebuilds. These in-
typical working conditions they will
clude an 11-unit structure done in
face on the job. The program helps
conjunction with Habitat for Humanity;
trainees develop the reliability, self-con-
the renovation of an abandoned "crack
fidence and ability to work in teams that
house;" and the renovation of two
are essential for a successful career in
structures which had suffered extensive
the trades.
fire and water damage.
Instruction takes place from 7:30 a.m.
to 2:00 p.m., Monday through Friday,
Boston Rebuilds
for an average of 15 weeks. Training is
31 Norfolk Street
offered in residential carpentry and other
Dorchester, MA 02124
related building trades. Experienced and
617-265-9625
38 HELPING PEOPLE
KENTUCKY
Abbey Manor
Home Builders Association of Louisville
The Louisville Rebuilds program com-
pletely renovated a church destroyed by
arson, converting it into a five-unit
apartment complex called Abbey
Manor. The new apartment complex, lo-
cated in a historic section of Louisville,
retains many of the classic elements of
the original church which had been built
in 1894-brick facade, steeply pitched
roof, wood trim, and leaded glass.
The Louisville Department of Hous-
ing and Urban Development contributed
$250,000 for the Abbey Manor con-
struction budget. Work on the project,
have a chance for better lives in new ca-
which took 18 months and was com-
reers in the building industry. The cer-
pleted in September, 1987, was per-
emony, attended by Louisville Mayor
formed by 120 trainees from Louisville
Jerry Abramson, featured the HBAL
Rebuilds. Abbey Manor was the second
Auxiliary presenting two outstanding
Louisville Rebuilds project. The first in-
trainees with $500 scholarships in sup-
volved the renovation of a single family
port of their achievements. To date, 87
house in 1985.
percent of the program graduates are
Louisville Rebuilds was started by the
employed by local businesses. The
Home Builders Institute, the educational
trainees who are hired are given a com-
arm of the National Association of
plete set of tools. The typical wage for
Home Builders, in 1984. The program
these entry-level tradespeople ranges
trains area unemployed youths and
from $5 to $7 per hour.
adults in construction skills, giving them
Among other projects undertaken by
hands-on experience while renovating
Louisville Rebuilds since the completion
community-owned housing units. The
of Abbey Manor are:
completed properties are then made
Served as contractor for a weatheriza-
available to low- and moderate-income
tion program for the homes of low-in-
families. The program is funded by the
come families in Louisville-weath-
Louisville and Jefferson County Private
erstripping, insulation, windows and
Industry Council. Members of the Home
doors. The project was funded by a
Builders Association of Louisville
state grant.
(HBAL) provide technical assistance
Built a playhouse for a children's
and help to place the trainees in jobs.
hospital, with materials donated by
At the dedication ceremony for Ab-
HBAL members.
bey Manor, incoming NAHB president
Built a swingset/play structure for a
Shirley McVay Wiseman said: "We are
transitional house for homeless fami-
proud of the Louisville Rebuilds pro-
lies. The materials were paid for in
gram, and especially Abbey Manor, be-
part by the City of Louisville.
cause it is a symbol of hope. It brings
Louisville Rebuilds
new life to this community. And the
1025 South 8th Street
many individuals who gained new skills
Louisville, KY 40203
during this 18-month renovation now
502-584-1178
HELPING PEOPLE 39
NEW YORK
Erie County Rebuilds
Niagara Frontier Builders Association
The Erie County Rebuilds program was
ate-income families. Funds for the train-
designed to rehabilitate abandoned prop-
ing were provided by the local Private
erties in the Buffalo, New York area
Industry Council, while the construction
while offering training opportunities to
was financed through block grants and
unemployed community residents. The
by the New York State Low-Income
program is concentrating on a deterio-
Housing Trust Fund. Materials were
rated area adjacent to a closed-down
also donated by the Niagara Frontier
Bethlehem Steel plant. The state has
Builders Association and the Lacka-
designated the area as an economic op-
wanna Community Development De-
portunity zone, granting tax credits to
partment.
businesses which move in.
Students are taught carpentry, plumb-
The Rebuilds program gives people
ing, electricity, sheet metal, heating and
jobs while creating low-cost housing for
air conditioning, painting, drywall, and
people who would not normally be able
finish work. Counselors teach trainees
to own property. NAHB's Home Build-
to estimate the cost of materials and
ers Institute (HBI) instructs the trainees
overhead expenses, how to understand
in all phases of construction and rehabil-
contracts, and ultimately how to find
itation. When the program was started
jobs.
in March, 1987, the first two buildings
on which the trainees worked were do-
Erie County Rebuilds
nated by the City of Lackawanna. Upon
102 Steelwanna Avenue
completion of the renovation, they were
Lackawanna, NY 14218
sold by Lackawanna to low- and moder-
716-823-0613
ERIE
COUNTY
REBUILOS
40 HELPING PEOPLE
PENNSYLVANIA
Community Revitalization Projects
Pennsylvania Builders Association
The Pennsylvania Builders Association
(PBA), through its Division of Training
and Education, has initiated two pilot
community revitalization projects in
1988. The projects are modeled after the
community revitalization efforts of the
Home Builders Institute, the educational
COMMUNITY REVITALIZ
arm of the National Association of
REBUILDING WEIGNBORHOODS
Home Builders. PBA's first pilot project
PROJECT
SPONSORS
in Harrisburg was started in July, while
another in Johnstown began in August.
Both are expected to be completed in
RS
early 1989.
The concept behind the program is
for PBA to completely renovate/rehabili-
lies who have never owned a home and
tate abandoned structures (1-3 family
who live in the municipality where the
living units) that are owned by local
homes were renovated.
municipalities. The funding for each job
The trainees are given the first oppor-
will come from sources available to the
tunity to buy the homes. The homes
municipality, either federal, state, or
will be sold at below-market prices,
local.
with mortgages provided at below-mar-
The labor will be provided primarily
ket interest rates by the Pennsylvania
by trainees who are eligible under the
Housing Finance Agency. If all parties
Job Training Partnership Act. Trainees
are satisfied with the job, additional
will receive hands-on instruction in a va-
housing units could be placed under
riety of building trades (carpentry, ma-
contract. The money generated from the
sonry, drywall, electrical, plumbing,
sale of the homes will be used to reha-
painting, etc.) over a three-to-five
bilitate future properties.
month period, including organized class-
The project in Harrisburg has been
room time. The trainees will then be
supported by the mayor and the City's
placed in jobs, with tools and wage
Department of Community and Eco-
reimbursements provided to help stimu-
nomic Development. The City also
late their hiring. All construction and
agreed to provide funding of up to
training on the projects will be coordi-
$35,000 to PBA for the cost of mate-
nated by a full-time site superintendent
rials. The project in Johnstown involves
on the payroll of PBA, funded out of
the renovation of a duplex.
training and construction contracts.
PBA will reserve the right to com-
Pennsylvania Builders Association
plete portions of any project by using
412 N. Second Street
paid subcontractors, based on the indi-
Harrisburg, PA 17101
vidual needs and special features of the
717-234-6209
job-the trainees might not be able to
perform some specialized tasks. When a
project is completed, the housing unit or
units will be sold to low-income fami-
HELPING PEOPLE 41
Job Corps/Apprenticeship/
Pre-Apprenticeship
WEST VIRGINIA
Sojourners Shelter
Charleston Job Corps Center
Students from the Charleston Job Corps
Center helped to construct the Sojour-
ners Shelter for homeless women, chil-
dren and families. The shelter, which
can house 50 individuals, was formerly
a vacant house on a lot in downtown
Charleston which the city had purchased
413 Shrewsbury Street
for $30,000. The renovation began in
recreational deck with a wheelchair
late 1985 and was completed in the
ramp and totally rebuilt the front porch,
summer of 1986.
including the floor. One of the only
The project was a cooperative venture
items that was contracted out was the
by the city, the Coalition for the Home-
roof, because fixing it was considered
less, the Charleston Housing Develop-
too dangerous for the students.
ment Corporation, and YWCA/Sojour-
The interior of the shelter looks like a
ners. The city was instrumental in
home rather than a sanitized institution.
obtaining a $70,000 community block
The floors are wood parquet, and the
grant. Local businesses donated mate-
white walls are offset by wood trim and
rials or sold them at or below market
wood bannisters. The shelter now has
cost. About $7,000 was contributed by
eight bedrooms and a large modern
private citizens, and Hands Across
kitchen. There is a staff room on the
America gave $5,500.
first floor.
The 40 students involved in the proj-
Upon completion of the project, a re-
ect were enrolled in NAHB's Home
ception was held for the Job Corps stu-
Builders Institute's building and apart-
dents who participated. The students
ment maintenance and carpentry pro-
were also presented with certificates of
gram at the Charleston Job Corps Cen-
appreciation by the mayor. In the words
ter. According to the Sojourners
of Charleston Job Corps Center director
Shelter's director Debbie Weinstein,
Karl Husmann: "The students got a
"We couldn't even begin to put a dollar
chance to apply the technical aspects of
figure on what the labor would have
what they've been taught and at the
cost without them."
same time learned the spirit of volun-
Before the renovation, the three-story
teerism. Our students come here in a
house was barely more than a burned-
situation of need. Their efforts have im-
out shell. The walls and floors were
proved the quality of life for others less
buckled and water damaged, the win-
fortunate than themselves."
dow casings were charred and warped,
and the house was full of garbage. The
Charleston Job Corps Center
students tore out the old wiring and
Virginia and Summer Streets
completely rewired the house. They re-
Charleston, WV 25301
placed the plumbing and installed new
304-344-4041
drain lines to the basement and four
or
bathrooms. They framed and paneled
Home Builders Institute
the walls and floors, installed lights,
15th & M Streets, NW
fixtures, appliance hook-ups, and smoke
Washington, DC 20005
detectors. They also built a three-level
202-822-0550
44 HELPING PEOPLE
DISTRICT OF COLUMBIA
LOUISIANA
Christmas In April
Worker Retraining
Potomac Job Corps Center
Program
Home Builders Association
of Greater New Orleans
A crew of 20 trainees and eight staff in-
The shotgun house of an 81-year-old
structors from the Potomac Job Corps
woman was renovated by 15 unem-
Center were among more than 2,000
ployed people learning new job skills
volunteers from various organizations
under the instruction of the Home
who rehabilitated 80 homes in the
Builders Association of Greater New
Washington, D.C. area as part of the
Orleans (HBAGNO) and NAHB's
"Christmas in April" program. The
Home Builders Institute. The refurbish-
one-day annual event is designed to help
ing of the home of Lydia Kuss in 1985
elderly, low-income and disabled people
was part of a federally financed pilot
in the community maintain and repair
project to retrain chronically unem-
their homes. The average cost of repair
ployed workers while renovating old
is $1,250 per home. Christmas in April
houses in Jefferson Parish.
receives corporate donations of materials
The electrical and plumbing fixtures
and supplies.
in the Kuss house were replaced, the
The Job Corps youth were enrolled in
kitchen was remodeled, interior walls
a training program sponsored by
were replastered and repainted, and the
NAHB's Home Builders Institute. They
exterior was repainted. A $5,000 grant
replaced doors, installed drywall, and
from the Jefferson Parish Community
repaired plaster and paint. All received
Development Program paid for the ma-
hands-on training in the process. The
terials. Federal and local agencies had
one-day event was special for many of
been providing money for home rehabil-
the trainees, who had a chance to re-
itation since 1977, but the Kuss house
store the neighborhoods where they
was the first to take advantage of the
grew up. In the words of 19-year-old
free labor provided by HBAGNO.
painting trainee William Hill: "I re-
Construction foremen and technical
member when I used to hang out in this
experts were provided by the associa-
area before I entered Job Corps. I some-
tion. The trainees continue to receive
times ended up in trouble. Now I'm
unemployment checks while learning
back to do something constructive. And
trades such as carpentry, plumbing and
it feels real good."
painting. Several trainees were placed in
jobs shortly after the renovation was
Home Builders Institute
complete.
National Association of Home
Since the completion of the Kuss
Builders
house, trainees in the program have
15th & M Streets, NW
worked on numerous other homes for
Washington, DC 20005
low-income people.
202-822-0494
Home Builders Association of Greater
New Orleans
2424 North Arnoult Road
Metairie, LA 70001
504-837-2700
HELPING PEOPLE 45
FLORIDA
OREGON
Constructive Protest
Rehabilitation of
Miami Job Corps Center
Homes For Veterans
Oregon State Home
Builders Association
Trainees from the Miami Job Corps par-
Two home renovations for veterans
ticipated in a "constructive protest" to
were completed as community service
call attention to the nationwide need for
projects in the pre-apprenticeship pro-
the greater availability of affordable
gram administered by the Oregon State
housing. The Miami Coalition for Care
Home Builders Association. The proj-
to the Homeless organized the protest to
ects were undertaken in cooperation
do something positive and different
with the Oregon Department of Veterans
which would have a lasting effect and
Affairs. Stipends were provided to the
actually help a family. About 25 volun-
trainees by the Home Builders Institute,
teers, convicts, politicians and con-
the educational arm of the National As-
tracted laborers renovated the crumbling
sociation of Home Builders.
home of Gregoria Perez (age 77) and
The pre-apprenticeship program chose
her husband Francisco (age 75).
the trainees, selected the building sites,
Before the renovation, the plumbing
identified specific renovations, and im-
in the home had not worked properly
plemented the projects. All materials
for years, and there was no electricity in
were provided by the Department of
the back of the home. The house was
Veterans Affairs. The first project was
infested with rats, roaches, termites and
started in late March, 1988, in Portland.
flies. Also, the ceilings had large holes.
A single family for-sale house was re-
Demolition of the home's interior and
stored for complete occupancy by the
the two-story shell in the backyard were
middle of April.
accomplished with labor and materials
The second project involved the reha-
donated by local contractors, hardware
bilitation of a rental home in Eugene-
stores, and students from the Dade
Springfield, where the rental vacancy
County school system. The Job Corps
rate is only one percent. The work was
trainees, who were enrolled in a pro-
begun in May, 1988 and ended in June.
gram operated by NAHB's Home Build-
The instructor and three students do-
ers Institute, gave the home new walls,
nated two weeks of additional time so
ceilings, floors, carpeting, windows,
that the job could be completed. In all,
plumbing and wiring. The Perez's furni-
240 student hours and 80 instructor
ture was replaced by new furniture do-
hours were donated. The Lane County
nated by the Salvation Army and Camil-
Builders Association assisted with local
lus House (which is a shelter for
public relations.
homeless men). The Perezes were also
offered free medical care, social ser-
Oregon State Home Builders
vices and free clothing.
Association
565 Union Street, N.E.
Miami Job Corps Center
Salem, OR 97301
660 S.W. Third Street
503-378-9066
Miami, FL 33130
305-325-1287
or
Home Builders Institute
15th & M Streets, NW
Washington, DC 20005
202-822-0550
46 HELPING PEOPLE
VIRGINIA
Park Place Friends Home
Tidewater Builders Association
Four pre-apprenticeship classes of the
Tidewater Builders Association (TBA)
assisted in the complete renovation of a
75-year-old vacant home which now
provides foster care for neglected and
abused children and teaches effective
parenting skills so that children and par-
ents can be reunited. The 1987 project
was funded through private donations,
including one major anonymous donor.
The Park Place Friends Home in Nor-
folk is unique in the Tidewater area be-
cause it is designed specifically to meet
the needs of the troubled mothers and
PARK
fathers of the resident children. Group
PLACE
workshops, individual counseling ses-
FRIENDS
HOME
sions (led by trained professionals), and
close ties with a variety of supportive
community organizations help parents
obtain the skills they will need when
their children return home.
When the TBA job trainees started
young adults, and they leave the pro-
the job, the house had been vacant for
gram with a guaranteed apprentice job.
more than four years. Most of its win-
Earlier in the year, trainees from the
dows and old asbestos shingles were
program had also donated labor to Rain-
broken, and most of the interior walls
bow Housing, Inc., a private non-profit
had deteriorated so badly that they had
organization utilizing private donations
to be stripped down to the framing
of funds, materials and labor to provide
boards before they could be rebuilt.
essential home improvements for low-
All of the students in TBA's pre-ap-
income, elderly and disabled homeown-
prenticeship program entered with no
ers.
previous construction skill training. The
Home Builders Institute, NAHB's edu-
Tidewater Builders Association
cational arm, has operated the program
2117 Smith Avenue
for more than 10 years, training low-in-
Chesapeake, VA 23320
come men and women ranging in age
804-420-2566
from 18 to 60. Most of the trainees are
HELPING PEOPLE 47
TENNESSEE
Craft Skills Projects
Home Builders Association of Greater Knoxville
The Craft Skills Training Program of
the Wesley Foundation, with financial
the Home Builders Association of
aid from the U.S. Department of Hous-
Greater Knoxville (HBAGK) has partici-
ing and Urban Development, to reno-
pated in a variety of community service
vate run-down structures to be used to
projects to help the citizens of Greater
house the needy and the elderly.
Knoxville. HBAGK is one of more than
HBAGK has recently initiated a train-
100 state and local builders associations
ing and construction program with the
around the U.S. to be served by Craft
Tennessee Valley Authority (TVA), Ap-
Skills programs.
palachian Regional Commission (ARC),
Under the program, previously un-
United South and Eastern Tribes
skilled, unemployed and underemployed
(USET), and the Woodland Land Trust.
people are recruited and trained in car-
The pilot project would combine funds
pentry, electrical wiring, plumbing,
from the federal Job Training Partner-
heating and air conditioning, building
ship Act with contributions from USET,
and apartment maintenance, rehabilita-
TVA and ARC to build new low-cost
tion and remodeling. Craft Skills pro-
homes ($14,000) on land donated by the
grams are funded through a long-stand-
Woodland Land Trust. Thirty Native
ing grant from the U.S. Department of
Americans will be trained in multiple
Labor and are administered by NAHB's
trades over 16 months to construct
Home Builders Institute.
seven homes. The homes would be lo-
The HBAGK pre-apprenticeship
cated in an Appalachian coal mining
classes have worked closely with Habi-
area on the Tennessee/Kentucky border
tat for Humanity. HBAGK completely
with very high unemployment and very
built one home to give to Habitat with
poor housing conditions.
labor provided by the craft skills stu-
dents and used the trainees to upgrade
Home Builders Association of Greater
the carpentry and electrical work on two
Knoxville
others. Work on several more Habitat
221 Clark Street, N.W.
homes is scheduled with HBAGK's
Knoxville, TN 37921-6396
help. The trainees are also working with
615-546-4665
48 HELPING PEOPLE
Other Community Service Projects
UTAH
TEXAS
Ronald McDonald
Adopt-A-School
House
Program
Brigham Young University
Texas Capitol Area Builders
Student Chapter
Association
The NAHB student chapter at Brigham
The Texas Capitol Area Builders Asso-
Young University donated more than
ciation has created an "Adopt-A-
150 hours to construct a Ronald Mc-
School" program to help students learn
Donald House in Salt Lake City. More
building trade skills while helping disad-
than 20 students worked on the project.
vantaged homeowners in Austin who
The facility provides temporary housing
need help on their houses. The Austin
for parents and family members of chil-
Independent School District, the Austin
dren who are hospitalized away from
Tenants Council, and the Austin Hous-
their hometown.
ing Authority are also involved.
Some sick children must stay in the
The program was started in 1987,
hospital longer than a day or two, or
when some builders had free time due
must return to the hospital at regular in-
to the Texas housing slump. Initially,
tervals for treatment. For family mem-
about 15 builders volunteered to be con-
bers who want to be near these children,
struction trades supervisors. Students
the combined costs of hotels and medi-
who were enrolled in a special four-se-
cal expenses can be devastating. The
mester building trades course at one of
Ronald McDonald Houses across the
the local high schools worked under the
country help families meet the high cost
supervision of one of the volunteers.
of severe illness and keep families to-
The tenants council supplied the names
gether.
of low-income homeowners who needed
The facility in Salt Lake City is 6,000
repairs to their properties. Building sup-
square feet, and is located only a block
plies for the repairs were provided
away from a major hospital. The four-
through the Austin Housing Authority.
story home accommodates 10 to 15
School officials have been enthusias-
families-about 30 people. The final
tic and willing to help students by ad-
cost of the project was about $700,000,
justing class schedules and providing
and about half of this amount was do-
transportation to the building sites. The
nated in labor and materials.
young apprentices receive hands-on
According to 1987-88 BYU Student
training to learn a trade and participate
Chapter President Cecil Davis: "It's
in public service projects that provide
been an outstanding opportunity for
valuable lessons in helping others. Some
everyone. Students get an opportunity to
students who participated in the program
practice what they were learning in the
began to show improvement in the
construction management classes, they
grades they received in other classes.
work hand-in-hand with contractors, and
Ronald McDonald gets his house built."
Texas Capitol Area Builders
Association
Construction Management
1824 East Oltorf
Department
Austin, TX 78741
Brigham Young University
512-447-4184
230 Snell Building
Provo, UT 84602
801-378-2021
50 HELPING PEOPLE
FLORIDA
Accessible Housing Council
Builders Association of South Florida
The Builders Association of South Flor-
ida (BASF) operates a program called
the Accessible Housing Council to help
CCESSIBLE
people with disabilities find suitable
housing. Another major goal of the
OUSING
council is to create greater awareness
and sensitivity to disability issues by de-
OUNCIL
MEMBER
velopers, builders, design specialists,
and sales representatives. The program,
which was started in 1984, is available
as for a normal change order.
to consumers in Dade and Broward
The council tries to answer the hous-
Counties.
ing needs of the blind, deaf, wheelchair-
Builders belonging to the program ad-
bound, or people with mobility prob-
vertise the fact by using the council's
lems due to arthritis, accidents or other
logo in advertisements. Also, disability
causes. For people with disabilities who
groups are given lists of participating
want to purchase an existing home,
builders. A consumer with a special
AmeriFirst Federal Savings and Loan, a
physical need can contact a council
major financial institution in the area,
builder at the preconstruction stage. The
has agreed to make below-market inter-
special housing needs are divided into
est rate loans to perform renovations for
three categories:
total accessibility.
1. Items which the builder will provide
The Accessible Housing Council has
at no charge, including wheelchair
been endorsed by the Florida Home
ramps, additional electrical outlets, spe-
Builders Association, which is encour-
cial wiring, and wider hallways and
aging all local home builders in the state
doors.
to adopt similar programs. BASF has
2. Items which the builder will install at
offered to share background about the
cost, such as handrails and other special
program with other associations around
hardware. There is no charge if the
the United States.
hardware is provided by the consumer.
3. Special customized items, such as
Builders Association of South Florida
low cabinets and moveable shelving for
15225 Northwest 77 Avenue
wheelchair-bound people. The builder
Miami Lakes, FL 33014
charges for these items the same amount
305-556-6300
HELPING PEOPLE 51
TEXAS
OHIO
Accessible Bathroom
Easter Seals Perch
For Needy Family
Building Industry
Texas Panhandle Builders
Association of Lorain
Association
County
The Remodelors Council of the Texas
The Building Industry Association of
Panhandle Builders Association (TPBA)
Lorain County helped a local disc
in 1986 added a bathroom onto a house
jockey raise money for charity by con-
of a family with a physically and men-
structing a tiny house on a catwalk in
tally handicapped son. The Woods Fam-
front of an Easter Seals billboard in Ely-
ily was having a particular problem with
ria, Ohio. Dave Lenahan of WOBL-AM
the simple tasks of their son's personal
perched in the little house for five days
hygiene, especially giving him baths.
in September, 1987, in an effort to col-
The son weighed 250 pounds and had to
lect a million pennies ($10,000) for
be lifted from his wheelchair into the tub.
Easter Seals.
The Woods could not afford to add
The white wooden house, which had
an accessible bathroom, but could not
windows, black shutters, and a shingled
qualify for any assistance from city,
roof, measured four feet by eight feet,
state, or national government programs,
and was 25 feet above a motel parking
including the Texas Department of
lot. It was equipped with carpeting, a
Health-Mental Retardation Center. The
portable toilet, cot, space heater, tele-
Mental Retardation Center referred the
phone and sleeping bag. Food and water
case to the Christmas in April Founda-
were hoisted to Lenahan each day on a
tion, which did not have the money or
rope connected to the house. A jug for
expertise for the job. The Christmas In
contributions was put at the base of the
April Foundation then approached
billboard, and a local doughnut shop of-
TPBA's Remodelors Council for help.
fered free coffee and doughnuts to any-
Council president Tommy Ford im-
one who stopped by to contribute.
mediately took on the project, which
ended up as a major remodel addition of
Building Industry Association of
a 10 by 13 foot bathroom with a roll-in
Lorain County
shower for the son's wheelchair. The
43191 North Ridge Road
Remodelors Council had much coopera-
Elyria, OH 44035
tion from the City of Amarillo, which
216-233-5172
even provided staff on weekends (when
most of the work was done) to perform
inspections and keep the project mov-
ing. All labor (by 24 builders and remod-
elors) and many materials were donated
by TPBA members. The project would
have cost an estimated $10,500.
The project was completed in four
weeks. Mrs. Woods commented that the
new bathroom enabled her to keep her
son at home instead of having to place
him in a public institution.
Texas Panhandle Builders Association
6015 S.W. 45th
Amarillo, TX 79109
806-353-3565
52 HELPING PEOPLE
UTAH
Urban Homesteader Training Program
Home Builders Association of Utah
The Home Builders Association of Utah
the opportunity to buy the home for a
(HBAU), which has a long standing ap-
small amount.
prenticeship training program with
The HBAU training program is a pi-
NAHB's Home Builders Institute, will
lot project designed to help homeowners
administer a basic home repairs training
learn the necessary skills to maintain
program in conjunction with the Salt
their homes in reasonable condition as
Lake County Housing Authority's Urban
required by the Urban Homesteading
Homesteading Program. Local market
Program. Homeowners would learn
conditions demonstrate a need for low-
when they should attempt repairs them-
income housing in the Salt Lake area
selves and when they should call a
because of plant and company closings
professional. They would learn how to
and low-paying jobs. The Salt Lake
perform simple repairs and yard mainte-
County Housing Authority has a list of
nance. HBAU would also instruct peo-
2,500 people who have been waiting
ple on how to understand the financial
from six months to four years for hous-
management requirements of homeown-
ing. Many of these people are homeless.
ership, such as taxes, utilities, insur-
The Urban Homesteading Program is
ance, budgeting and credit.
designed to provide housing for low-in-
The homesteading program can re-
come individuals, utilizing homes repos-
store decaying neighborhoods and help
sessed by the U.S. Department of Hous-
families to regain their dignity. Commu-
ing and Urban Development and the
nities can benefit by conserving existing
Veterans Administration. Families have
FHA and VA housing stock, and pro-
to restore the houses, many of which
viding opportunities for low-income
are in terrible condition, with do-it-
families to become tax-paying home-
yourself efforts and low-interest (3 per-
owners. By utilizing the HBAU train-
cent) federal loans. The homesteaders
ing, homesteaders will be able to keep
may receive help from churches, family,
their homes in good condition and en-
or volunteer organizations. The home
hance their neighborhoods.
repairs must be completed within three
years, and the homesteader must live in
Home Builders Association of Utah
the home for an additional two years. If
296 East 3900 South, Suite 200
all obligations are met during this five
Salt Lake City, UT 84107
year period, the homesteader will have
801-268-8750
HELPING PEOPLE 53
INDIANA
Caulk of the Town
Builders Association of Greater Indianapolis
The Builders Association of Greater In-
and attended a one-hour instruction ses-
dianapolis (BAGI) participated in a pro-
sion a week before the event. The work
gram called "Caulk of the Town" in
for each house took about four hours.
1986. The program was designed to use
The event was capped off with a picnic
1,000 volunteers to lower the heating
celebration with food and entertainment.
bills of 100 needy families, and to help
ECI was able to use the value of the
raise $100,000 for a local community
volunteer labor ($3.50/hour per volun-
investment corporation.
teer, and $20/hour per supervisor) to lev-
Eastside Community Investments
erage state funds for further weatheriza-
(ECI) is a non-profit, neighborhood-
tion of the same houses, which-would
based community development corpora-
be subcontracted to professionals. ECI
tion which works with the public and
also sought to raise $100,000 from the
private sectors to increase the economic
event. A portion of this was raised
stability in the Eastside section of Indi-
through corporate donations, and the re-
anapolis. About a third of the 11,600
mainder from individual contributions.
households in the area earn less than
The 1,000 volunteer workers were asked
$7,500 per year. Many of the homes
to solicit pledges for each tube of caulk
were built before 1950 and were very
used in the homes which they weather-
energy inefficient, and so energy costs
ized.
are a substantial burden.
The event allowed BAGI to partici-
ECI decided to commemorate its 10th
pate in a creative partnership with civic
anniversary by winterizing 100 homes.
groups, corporations, government,
ECI asked neighborhood churches to re-
churches, and the community.
fer the names to owners of older homes
who would like to receive information
Builders Association of Greater
about the project. A team of 10 volun-
Indianapolis
teers was assigned to each house. All
1011 Dr. Martin Luther King Jr.
work was aimed at reducing air infiltra-
Street
tion-caulking, weatherstripping, and
Suite 200
window insulation. A hundred BAGI
Indianapolis, IN 46202
members volunteered to be supervisors
317-236-6330
54 HELPING PEOPLE
FLORIDA
Saturday Work-Day
Home Builders Association of Panama City-Bay County
The Home Builders Association of Pan-
members asking them to participate. All
ama City-Bay County (HBAPCBC) or-
local media were contacted and asked to
ganized a Saturday work-day in March
cover the work-day. Also, Ron Johnson,
of 1988 to repair the homes of needy
the area's representative in the state leg-
people in the community. HBAPCBC's
islature, was invited to lend his support.
1988 president Thomas Lumley had
Approximately 15-20 association
suggested to the board of directors in
members turned out, along with Repre-
January that the association undertake
sentative Johnson and numerous report-
one community service project each
ers. The association was able to show
quarter. A committee was appointed to
its commitment to helping needy fami-
evaluate hardship cases brought to the
lies. The event also generated a very
association's attention by the State De-
positive response from numerous seg-
partment of Health and Rehabilitative
ments of the community who had seen
Services.
news coverage of the event.
After examining numerous cases, the
committee made their recommendations
Home Builders Association of
to the board, which approved the
Panama City-Bay County
choices. A date was set for the event,
P.O. Box 979
and solicitations for labor and materials
Panama City, FL 32402
began. A notice went to all association
904-784-0232
HELPING PEOPLE 55
FLORIDA
Caring for Kids
Northeast Florida Builders Association
The Northeast Florida Builders Associa-
be brought up to code. Barnett Bank, a
tion (NEFBA) has "adopted" 16 homes
financial institution which has strongly
in Jacksonville to be used in a pilot day-
supported the program, attended an
care program called "Caring For Kids."
NEFBA board of directors meeting to
The program is based on a study com-
ask for assistance in making the repairs.
pleted in 1988 by the Jacksonville Com-
The response was enthusiastic and in-
munity Council, a non-partisan, non-
stantaneous. The board members each
profit, community-based organization
volunteered to "adopt" a home and
linking private and public resoures to
make the necessary repairs; in fact,
study and analyze community problems
there were more volunteers than houses.
and issues. The study recommended an
Chris Kirby, president of the associa-
expansion of daycare services for
tion's student chapter at the University
women who are unable to work due to a
of North Florida, volunteered the chap-
lack of affordable childcare.
ter to renovate one of the houses.
Caring For Kids has been designed to
NEFBA president Richard Dostie said
provide daycare services in those sec-
that the project was ideal for the associ-
tions of Jacksonville where it is most
ation. "Had they requested funding for
needed and to train operators to manage
the program, I'm sure we would have
daycare centers in their own homes. By
been happy to help," he said. "But
training childcare workers, who are
anyone can write a check. This project
themselves mothers unable to work due
calls for the special talents and re-
to a lack of childcare, the program cre-
sources of our members. This is what
ates direct job opportunities and allows
we do best, and to do it for such a
many women not currently in the work-
worthwhile program makes it even more
force to seek employment, assured that
meaningful."
their children will be cared for.
In order to meet the requirements of
Northeast Florida Builders
daycare facilities established by the
Association
Florida Department of Health and Reha-
P.O. Box 17339
bilitative Services, the homes of 16 pro-
Jacksonville, FL 32245-7339
spective home daycare operators had to
904-725-4355
56 HELPING PEOPLE
Helping People: A Postscript
Helping People: A Postscript
Kent W. Colton
EXECUTIVE VICE PRESIDENT,
NATIONAL ASSOCIATION OF HOME BUILDERS
he motto on the wall by the front
T
door to the National Association of
Home Builders headquarters says
"Better Housing for All.' This phrase
is not an empty promise. The home
builders of America must continue to be
committed to raising the quality of
housing for everyone, particularly those
who currently lack adequate homes.
Some housing problems are too large
for builders associations to tackle on
their own. For instance, many homeless
people need employment counseling,
medical and psychiatric care, and other
services in addition to shelter. In these
cases, builders should seek to work co-
operatively with both community groups
Department has expanded the home
and the public sector. Associations gen-
building industry's employment and job
erally should stick to what they do best,
training programs.
such as building structures and training
Every activity undertaken by a build-
people to build structures.
ers association to help people is impor-
This book clearly shows that builders
tant. Sometimes, the problems that must
can point to numerous success stories in
be addressed seem far too big for an as-
the area of community service. Some of
sociation to make a major dent. But
them are one-time efforts. Some involve
every bed in a homeless shelter, every
ongoing programs. Still others involve
home weatherized, and every dollar
comprehensive efforts to address a vari-
raised for a worthy cause is appreciated
ety of problems all at once.
by the beneficiaries and the general
NAHB's Home Builder's Institute has
public.
been a leader in this latter area, with its
At the National Association of Home
Craft Skills, Job Corps, and Community
Builders, we believe in homeownership.
Revitalization programs. Low-income,
We believe in affordable housing. We
unskilled people are taught trades so
believe in the American Dream. But we
that they can get jobs, and they often
don't just' believe: we are the ones who
learn their skills by working on con-
make it happen. However big the chal-
struction projects to help the needy or
lenges, we must never give up on trying
revitalize depressed areas. Most of this
to meet them. In this way, we can keep
work would be impossible without the
the motto of "Better Housing for All" a
support of the U.S. Department of La-
reality.
bor. For more than 20 years, the Labor
HELPING PEOPLE 59
HELPING
PEOPLE
A Guide to
Community Service Activities
by State and Local
Home Builders Associations