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NAHB [National Association of Home Builders] 50th Anniversary 5/18/92 [OA 7574] [1]
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NAHB [National Association of Home Builders] 50th Anniversary 5/18/92 [OA 7574] [1]
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NAHB [National Association of Home Builders] 50th Anniversary 5/18/92 [OA 7574] [1]
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5
5
SENT BY:NAHB EXECUTIVE OFFICE 12-<1-80 ; 15:43 ;
2028220374->
12024561647;# 2
National Association of Home Builders
1201 15th Street, N.W., Washington, D.C. 20005-2800
(202) 822-0401
Fax No: (202) 822-0374
Kent W. Colton, Ph.D.
Executive Vice President &
Chief Executive Officer
May 12, 1992
Ms. Molly Osborne
Office of Public Liaison
The White House
Washington, D.C. 20500
Dear Ms. Osborne: molly
In the draft remarks for the President we submitted to you last week, we
inadvertently omitted one of the Senior Officers, Jim Irvine, Vice President/Secretary,
from the listing of the NAHB Leadership Team. On page 1, paragraph 2 under
Suggested Speaking Points, please list the leadership team as follows:
- Roger Glunt, Tommy Thompson, Jim Irvine, Mark Tipton and Kent Colton
I am sure you understand the importance of this correction and we would
appreciate it if you would get this to the speech writer as quickly as possible. Thanks
for all your help, Molly. We're looking forward to this event very much.
Best regards,
Kant Kent W. Colton
KWC/mls
SENT BY:NAHB EXECUTIVE OFFICE 12-<1-80 ; 15:43 ;
2028220374-
12024561647;# 3
Suggested Speaking Points
President George Bush
Before the NAHB Board of Directors
Signing of a Proclamation Honoring the 50th Anniversary Of the
National Association of Home Builders
"50 Years of Housing America"
South Lawn of the White House
May 18, 1992
Introduction
As discussed previously, we recommend that Jay Buchert introduce President
Bush. Naturally, we will work with you on the appropriate introductory comments.
Audience
The audience will be composed of approximately 2,000 people, including NAHB's
National Directors and their spouses. There likely will be people from every state in the
Union. Not only are they home builders, they are community leaders and people who
are well involved in the political process in their states and towns.
Suggested Speaking Points
Welcome to the White House. This is a truly momentous occasion for your
industry and I welcome the opportunity to join you in celebrating the National
Association of Home Builders' 50th Anniversary.
I also want to recognize your president - Jay Buchert (Bue - kirt) - and the other
officers of your leadership team -- Roger Glunt, Tommy Thompson, Mark Tipton and
Kent Colton - who have worked very closely with my Administration during the past
four years.
Jim Irvine
Anniversaries are a time to reflect on your past accomplishments. And the
achievements of your association and your industry are unprecedented.
When NAHB was founded 50 years ago, one third of the nation lived in
substandard housing. Only about 4 in 10 of the nation's families owned their own
homes. The nation's housing finance system was still in its infancy. And America faced
a housing shortage of untold dimensions.
1
Kids names
Murria
Charlease
Gerald
latoya
Housing Equals jobs.
Call Molly Osborne tell re: her Jen
covering
Mr. Sendler couldn't come
4 me.
emerg,
want to send some one in
his place- - substitution.
NAHB is gring them trouble.
797-4534
202-483-3000
NAHB hotel staff ofc
Jimmy Lee Mcleod
250-62-4991
4-27-41
(Smith/Aarhus)
Draft Three
7974534
May 13, 1992
HOME
PRESIDENTIAL REMARKS: NATIONAL ASSOCIATION OF HOME BUILDERS
50TH ANNIVERSARY
SOUTH LAWN
MONDAY, MAY 18, 1992
Acknowledgements; Members, National Directors, and friends
Molly
of the National Association of Home Builders. Secretary of
Housing and Urban Development Jack Kemp. ( (As someone who lives
in public housing, I'm glad to see the HUD Secretary here -- and
let me tell you: He's doing a terrific job.) ) // Ladies and
gentlemen, fellow business men and women. /
Welcome to the White House -- which I often call the
People's House. ( (For the record: With all these appliances out
here, I just want to head off any rumor that the White House is
having a yard sale. )) //
with whom
Instead, we are here to mark a special birthday: The 50th
Inst
anniversary of the NAHB. / And to salute a special team. First,
metide.
your President -- Jay Buchert [BUE-kirt]. / Next, the other
members of your leadership -- Roger Glent, Tommy Thompson, Jim
Irvine, Mark Tipton, and of course, Kent Colton. // -Bob Bannister
I want to thank you for your support. Even more, we Bushes
are grateful for your friendship. // ((It's true: Millie was
disappointed when I broke the news to her that the structure
behind me is not her new doghouse.) / But Barbara and our kids
believe in the same things as you do: Community and country --
respect and responsibility -- family, jobs, and peace. / We know
we put America first when we put America's families first. /
2
For fifty years, that's what you've done -- helped to
fulfill the American Dream -- and enlarge the American Pie. When
the National Association of Home Builders Lone was founded Vonly 4 in
third of the nation
Kentc.
10 Americans owned their own homes. Three in 10 lived in
NAHB
draft
substandard housing. and Today -- more than 70 million new homes
and apartment units later -- 2 in 3 households own their home.
You don't hear that old joke anymore: "Builders sleep like
babies -- they wake up every hour and cry." //
For that, I salute you. Once again you're helping our
economy work -- so that America can get back to work. / Yes,
David Crow
we've had tough times. But consider this: 264,000 housing
starts since January 1. A 2 percent GNP growth in the first
kentc.
quarter -- more than a quarter of that caused by residential
draft
construction. / The old adage is coming true: As housing goes,
so goes the economy. Your members employ more than 7 million
Kentc. draft
Americans. More and more they're helping other Americans turn
recession into recovery. //
I speak here as a participant -- not bystander. From my
Texas business days, I know what it means to meet a payroll,
balance a budget, and help people put food on the table. / Like
you, I know that strong housing can help a strong economy
help Americans worried about providing for their families --
meeting the challenges of paying the bills, buying that home, and
setting aside for retirement. //
That's why in my State of the Union Address I announced a
program for economic growth to say, like Jackie Gleason, 'U.S.
3
housing, and away we go."/ I called for penalty-free
withdrawals from IRAs for the purchase of a first home. Changes
in the passive loss tax rules to spur real estate and housing
development / an extension of mortgage revenue bonds and the low
income tax credit / and, yes, I called for a job-generating cut
in the tax on capital gains. //
Then, there's the proposal I'm especially proud of: A
$5,000 tax credit for first-time homebuyers.
According to your
these housing incentives
Kentc
own figures, this credit would mean 415,000 new construction
industry jobs -- and $20 billion in new economic activity. //
We
need this $5,000 tax credit proposal to keep the housing market
on the mend -- helping people like you sell and build homes --
and here's why: Five thousand dollars could pay seven months of
David
mortgage payments on the average American home. /
Crow
Sadly, some in Congress don't get the message. They seem
to care more about the spending they do in the Congressional
House -- than making it easier for average Americans to spend on
their house. / ((I only wish they were as enthusiastic about the
first-time homebuyer as they are about the first-time taxpayer.)
Valid
XX weeks ago, the NAHB ran an ad in the Washington Post. The
headline read: "Earth to Congress: Enough is Enough.' / I
couldn't have said it better myself. And believe me, the voters
will have the last word on this when they go the polls in
November.
You've heard the definition of a contractor: "A gambler who
never gets to shuffle, cut, or deal. / We have to make it
4
easier to deal, sell, hire, and invest. / So I will continue to
sound the message that sound banks should make sound loans. When
builders can't get construction loans on pre-sold homes, I say
the pendulum has swung too far in the wrong direction. //
HUDE
Next, I will push hard for our HOPE Initiative -- requesting
$1 billion in funding for FY '93 -- a key part of my plan for a
new America to bring opportunity to our inner cities. / Jack
Kemp knows how HOPE can give poor families a stake in their
communities. Bottom line: HOPE will turn housing into homes. /
And, yes, I will continue to push for regulatory reform --
because I want government to help -- not hurt -- the ability of
private enterprise to expand and create jobs. / So I have
extended for another 120 days the blanket moratorium on any new
Federal regulation. / Jay Buchert says: "Let builders build.
kante
I know he agrees: We need policies that also let buyers buy. //
I wish everyone understood this concept. / ((When I look at
these stoves out here, it reminds me how some liberal policies
could cook the housing industry's goose.)) / On the other hand,
you know that it takes more than bricks, lumber, and mortar to
build a home. It takes heart and skill -- it takes dreams. You
know that owning a home helps America -- makes it better, more
caring. You show this in your "Homes Across America" program --
where NAHB members build and renovate homes for the needy. //
Vente. draft
So far, this program has housed more than 600 families.
With us today is one of them -- Gerald and Angela Williams and
their four children -- Munnis, Charlease, Gerald, and Letoya, who
La
Chames
w/milly
5
moved into their new home in Jacksonville, Florida, on Mother's
Day. / The Williams' home was built by the builders of the
Kente.
Jacksonville Association of NAHB and Habitat for Humanity. I
salute them -- and also the Williams family. / Won't you please
stand up: You show how the dream of home ownership keeps the
American Dream alive. //
That dream seemed elusive half-a-century ago -- but you have
aided it / nurtured it / as a parent does a child. For that, I
thank you -- -- and salute you on behalf of each American. May God
bless you all and this great country -- the United States of
America.
# # # #
SENT BY:NAHB EXECUTIVE OFFICE 12-<1-80 ; 5:34
2028220374-
12024561647,# 2
To: Duppan Joe
National Association of Home Builders
1201 15th Street, N.W., Washington, D.C. 20005-2800
(202) 822-0401 Fax No: (202) 822-0374
Kent W. Colton, Ph.D.
Executive Vice President &
May 4, 1992
Chief Executive Officer
Ms. Molly Osborne
Office of Public Liaison
The White House
Washington, D.C. 20500
Dear Ms. Osborne:
As you requested when we met last week, we have identified a family who will be
a recipient of a home from the builders in their Jacksonville, Florida community, whom
the President could mention in his remarks and recognize in the audience on Monday,
May 18. Attached is a copy of the article from the Builder News dated April, 1992.
I think you will agree after reading this article that this is a wonderful family to
recognize! We would propose to fly them to Washington, D.C. on Sunday, May 17,
invite them to the event and provide them with special guest seating. Please let me
know as quickly as possible whether you want to proceed with this idea. We will not
confirm any details with the family until we have your approval. Obviously, we need to
know whether the President will mention them specifically in his remarks and then we
can explain the event in more detail to them.
Thanks for all your help. I will be in touch with you early this week.
Best regards,
Kent W. Colton
KWC/mls
Attachment
Page 10 Bildor News- April, 1992
12024561647;#
Just in time for Mother's Day
Their American Dream will come true
A very happy mother and
tive.
another home,
member of HabiJax. "By pro-
her family will soon realize
She has
orcombination
viding this family with a
the great American Dream -
been very in-
ofthetwo. Mrs.
home, they are going to move
their very own home. And, if
volved in plan-
Williams said
into anew environment where
2028220374-
all goes well, it will be ready
ning her new
she thinks the
they can raise their children
for occupancy by Mother's
home. She's a
requirement is
should be raised."
Day.
member of the
well worth the
Since the program began
Angela and Gerald Wil-
HabiJax
experience.
in 1988, 30 houses around
liams will realize their dream
homeowners
"Thavedone
the city have been built and
next month, thanks to the
committee and
everything
25 new homes are sched-
Northeast Florida Builders
has attended
from digging
uled for this year.
Association, builder Glen
workshops on
footers to ham-
Amazingly, 19 of those
Reynolds. and many other
how to care for
mering. Since
homes went up in what the
volunteers in the organiza-
a home.
dropping out of
organization calls a "brain-
tion.
"I've learn-
school, I have
storming week". Volunteers
The project is being coor-
ed how to
earned my
dinated by Habitat for Hu-
actually put up many of the
change air con-
GED and Ipfan
houses within 24 to 48 hours.
manity of Jacksonville, bet-
ditioning fil-
to return to
"More than 100 volun-
ter known as HabiJax.
ters, how to
FCCJ to study
teers will be involved in
The Association will
save energy in
nursing. Get-
building the Williams'
present the family with a four-
the winter and
SENT BY:NAHB EXECUTIVE OFFICE :12-<1-80
ting this home
home," Barker said. "It will
bedroom, two-bath home in
summer, and
is a blessing
be completed within
the McCoys Creek area.
how to form a
we're very
weeks."
"I am so thankful to get a
plan in case of
thankful for.
"We got involved in this
home," said Angela, a 21-
fire,' Mrs. Wil-
THEY'RE NOT DAYDREAMING ANYMORE- For helping to make
"This fam-
year-old mother of four. "We
liams said.
their dream come true, Glen Reynolds is very happy about the
project through the North-
home that he, the Association, and HabiJax will provide for
ily, like many,
east Florida Builders Asso-
were living in a project on
"We are grate-
Gerald And Angela Williams and their children, Murrie, Charlease,
many others, is
ciation because we wanted
Gregory Drive, and my kids
ful for all of
Gerald and Latoya.
in a situation
to assist in building low-
were scared because the drug
this. Itis a won-
where they
income housing," said Dan
problem was so bad in our
derful program, and I wish
the HabiJ ax program requires
would never be able to buy a
West, director of sales and
neighborhood. We tried to
more people would have the
the soon-to-be owners to con-
home if not for our program,"
marketing for Custom
get help in the project, but the
opportunity we have."
tribute 400 hours of "sweat
said Frank Barker, former
Homes by Glen T. Reynolds,
police weren't really effec-
Getting a home through
equity" to their own home,
president and now a beard
which is the general con-
tractor for the Association
-
home.
if IS very difficult for a
first-time homebuyer to ac-
quire a house anymore, es-
pecially low-income fami-
lies. This is simply a pro-
120245616471# 4
gram that allows folks like
Glen and other builders to
assist people who have not
been as fortunate as them.
"It is helping them spread
some of their good fortune
around, and that is always
nice to do in your own home-
town."
2028220374-
To qualify for a HabiJax
home, a family must be liv-
ing in substandard housing,
have lived in Duval County
for three years, have good
credit, have no criminal
record, and make a $500
down payment. The 15-and
20-year mortgages on the
homes are interest-free and
based on the family's in-
come. Payments from the
mortgages are used to cover
the costs of materials for
SENT BY:NAHB EXECUTIVE OFFICE 12-<1-80 5:36
other homes.
"By helping these fami-
lies, we are changing their
standard of living, and that
will not only help them to-
day, but it will help them as
long as they live." Barker
said.
Barker praised NEFBA
for their involvement and
commitment to community
service projects.
SENT BY:NAHB EXECUTIVE OFFICE 12-<1-80
5:36
2028220374-
12024561647;# 5
NATION'S
BUILDING
THE NATIONAL ASSOCIATION OF HOME BUILDERS
THE VOICE OF AMERICA'S HOUSING INDUSTRY
NEWS
MAY 4, 1992
VOLUME 8, NUMBER 6
Thanks
REALTORS and BUILDERS
For a "GRAND" ($1,000) EVENT
HabiJax
HABITAT HOUSING IN THE SUNSHINE STATE-Vice President Dan Quayle
and officers of the Northeast Florida Builders Association during a recent
fund-raising luncheon for the association's "Homes Across America" program.
The event raised $1,000 towards building a Habitat for Humanity house in
Jacksonville. The HBA's program is called HabiJax. From left: Rita William,
Quayle, Chris Gases and Frank Barker. More than 125 builders associations
have agreed to take part in the voluntary effort to help celebrate NAHB's 50th
anniversary by building affordable housing for people in need. National pro-
motional activities will be held in Washington on June 14-21.
2028220374-
12024561647:# 5
NATION'S
BUILDING
THE NATIONAL ASSOCIATION OF HOME BUILDERS
NEWS
MAY 4, 1992
THE VOICE OF AMERICA'S HOUSING INDUSTRY
VOLUME 8, NUMBER 6
Thanks
REALTORS and BUILDERS
For a "GRAND" ($1,000) EVENT
HabiJax
HABITAT HOUSING IN THE SUNSHINE STATE-Vice President Dan Quayle
and officers of the Northeast Florida Builders Association during a recent
fund-raising Inncheon for the association's "Homes Across America" program.
The event raised $1,000 towards building a Habitat for Humanity house in
Jacksonville. The HBA's program is called HabiJax. From left: Rita William,
Quayle, Chris Gases and Frank Barker. More than 125 builders associations
have agreed to take part in the voluntary effort to help celebrate NAHB's 50th
anniversary by building affordable housing for people in need. National pro-
motional activities will be held in Washington on June 14-21.
upto 600 homes built $ donated
-giving back to community
housing = jobs
SENT BY:NAHB EXECUTIVE OFFICE ;11->6-80 22:08
2028220374-
Tough
Joe
FYI Molky
National Association of Home Builders
1201 15th Street, N.W., Washington, D.C. 20005-2800
(202) 822-0401
Fax No: (202) 822-0374
Kent W. Colton. Ph.D.
15th & M St,
Executive Vice President &
Chief Executive Officer
StbFloor.
DATE 5-7-92
FAX TRANSMITTAL COVER SHEET
TO:
FAX #:
mally 456-16347 Oshorne
SENDER:
KENT W. COLTON, EXECUTIVE VICE PRESIDENT
SENDER'S PHONE NUMBER: (202) 822-0401
NUMBER OF PAGES TO FOLLOW COVER SHEET:
7
COMMENTS: Please deliver ASAP.
Thanks
THE FAX NUMBER FOR THE NAHB EXECUTIVE OFFICE IS (202) 822-0374.
red
love
Calls Dosnon happyes statems asm trip
un shyrird
Baltaghi-
/
SENT BY:NAHB EXECUTIVE OFFICE :11->6-80 22:09
2028220374-
National Association of Home Builders
1201 15th Street N.W., Washington D.C. 20005-2800
(202) 822-0401 Fax No: (202) 822-0374
Kent W. Colton, PhD.
Executive Vice President &
Chief Executive Officer
May 7, 1992
MEMORANDUM
TO:
Molly Osborne
Kat
FROM:
Kent W. Colton
SUBJECT: Suggested Talking Points for President Bush's Speech
Attached are the suggested talking points for President Bush's
speech. As you can see--and as I discussed with Jeff--we are
suggesting that NAHB's President, Jay Buchert, give a brief
introduction for President Bush. I realize the event is at the
President's "house," but I think a brief introduction by Jay would
help to set the stage and "warm-up" the crowd.
Reference is also made in the talking points to the signing
of a Presidential proclamation. I have enclosed another copy of
the draft proclamation for your information.
Also attached is a statement the President made on March 5.
We have used this in the talking points, and I thought you might
want a specific reference.
We look forward to seeing you next week.
KWC/di
Enclosure
cc: Jeff Vogt
SENT BY:NAHB EXECUTIVE OFFICE :11->6-80 22.09
Suggested Speaking Points
President George Bush
Before the NAHB Board of Directors
Signing of a Proclamation Honoring the 50th Anniversary Of the
National Association of Home Builders
"50 Years of Housing America"
South Lawn of the White House
May 18, 1992
Introduction
As discussed previously, we recommend that Jay Buchert introduce President
Bush. Naturally, we will work with you on the appropriate introductory comments.
Audience
The audience will be composed of approximately 2,000 people, including NAHB's
National Directors and their spouses. There likely will be people from every state in the
Union. Not only are they home builders, they are community leaders and people who
are well involved in the political process in their states and towns.
Suggested Speaking Points
Welcome to the White House. This is a truly momentous occasion for your
industry and I welcome the opportunity to join you in celebrating the National
Association of Home Builders' 50th Anniversary.
I also want to recognize your president - Jay Buchert (Bue - kirt) and the other
officers of your leadership team -- Roger Glunt, Tommy Thompson, Mark Tipton and
Kent Colton - who have worked very closely with my Administration during the past
four years.
Anniversaries are a time to reflect on your past accomplishments. And the
achievements of your association and your industry are unprecedented.
When NAHB was founded 50 years ago, one third of the nation lived in
substandard housing. Only about 4 in 10 of the nation's families owned their own
homes. The nation's housing finance system was still in its infancy. And America faced
a housing shortage of untold dimensions.
1
SENT
BY:NAHB
EXECUTIVE
OFFICE
When World War II ended, your association helped give rise to, train and support
a new merchant industry of entrepreneurs. This new generation of risk-taking builders
bought and subdivided land and built affordable housing in record numbers for the
nation's growing number of home owners.
During the next 50 years, the landscape of America's neighborhoods was
permanently changed. America's builders constructed and remodeled more than 70
million new homes and apartment units, virtually replacing the nation's aging and
substandard housing stock. And America was transformed into a nation of home
owners. Today nearly two of every three households owns their home.
And your industry has become a powerful force in the world's most powerful
economy. Your members employ more than 7 million Americans, and residential
construction accounts for about 5 percent of the nation's domestic economy. In other
words, as housing goes, so goes the economy. And that's particularly important today
as housing helps lift the U.S. economy to higher ground from the recession.
I am well aware of recent economic statistics - many of the numbers related to
housing have been positive over the last three months, but I realize that the future of
housing production is at an important juncture. I am also acutely aware that without
a strong rebound in housing production, there can be no overall economic recovery.
That is why I proposed, and continue to push for, the adoption of a tax credit for first-
time home buyers and other changes to stimulate housing and real estate.
Stimulating the housing market was a central theme of my State of the Union
Message and it was a key component of the economic recovery program that I sent to
the Congress. My plan was simple: Put people back to work building affordable
housing and stimulate housing demand by helping families buy their first homes. To do
this, among other things, I called for a $5,000 tax credit for first-time home buyers,
penalty free withdrawals from IRAs for the purchase of a first home, changes in the
passive loss tax rules to encourage development of real estate and affordable housing,
extension of mortgage revenue bonds and the low income tax credit, and a capital gains
tax cut.
But this common sense plan designed to create jobs and make housing more
affordable never even made it out of committee. Instead, the Congress dropped the
first-time buyer tax credit and sent me a package that would have raised taxes and done
more harm than good to the nation's economic recovery. I vetoed that bill as soon as it
was delivered to the White House.
2
SENT BY:NAHB EXECUTIVE OFFICE 11->6-80 22:10
2028220374-
On the day that the House fell short of getting even a simple majority in its futile
attempt to override my veto, your association ran an eye-catching ad in the Washington
Post which summed up our feelings about Congress pretty well. The headline read:
"Earth to Congress: Enough is Enough." I couldn't have said it better myself. And
believe me, the American people will have the last word on this when they go to the
polls in November.
Despite the failings of Congress, the economy is on the rebound. It grew by about
2 percent in the first quarter of this year, and about one quarter of that increase was
linked to the upturn in single-family housing construction. So home builders are playing
a vital role in our nation's economic recovery. And I pledge to do my part as well by
taking full advantage of any opportunity that will help speed and sustain the recovery
over the long-term.
For example, more than two months ago I said - and I will repeat now - if
Congress doesn't do anything else this year, I wish they would lay aside the politics of
"tax and spend" and give one break to the American economy - a tax break for first-time
home buyers - - and watch home building lead the economy out of these slow economic
times.
Paser upe- Pue-
sophy a
Successing
In addition, I will continue to push hard for the regulatory reform that was the PU
goal of the Commission on Regulatory Barriers to Affordable Housing which I created
and put under the direction of HUD Secretary Jack Kemp. Whether the regulations deal
with wetlands, OSHA, endangered species or any of a hundred other issues, the bottom
line is that overregulation chokes the life out of America's small business community,
reduces competition and, in the case of home building, increases housing costs for
American consumers.
Therefore, I have extended for another 120 days the blanket moratorium on the
issuance of any new federal regulation. We can live with this moratorium without
jeopardizing the health and safety of American workers and without harming the
environment. In this time of economic uncertainty, government should help not hurt
- the ability of private enterprise to expand and create new jobs. We should, in the
words of your president, Jay Buchert, (Bue-kirt), "Let Builders Build."
On the credit crunch front, my Administration has been working hard to get the
message out to lending institutions and the banking regulators that sound banks should
make sound loans. Credit is the lifeblood of your industry. When builders can't get
construction loans on pre-sold homes, then I say the pendulum has swung too far in the
wrong direction. And my Administration is committed to ending the credit crunch and
strengthening and stabilizing our nation's banking system.
3
SENT BY:NAHB EXECUTIVE OFFICE :11->6-80 ; 22:11 ;
2028220374-
12024561647:# 6
Today is a very special day for your industry and your association. When you
build a home, it takes much more than just bricks, lumber and mortar. Home building
is an honorable profession. It requires skill and takes nerve to succeed in today's highly
competitive business environment. And when you finish your job and go to the
settlement table with your customer, you have built much more than just another house
- you have built a very special place called home; you have built the American dream.
To marry and have children, to earn a good living, to live in a free and peaceful
society - and, of course, to own a home: those have long been the traditional aspirations
of all Americans.
Well, thanks in part to your efforts, the United States is today the best housed
nation on the face of the earth, and the opportunity to own a home has become a
cornerstone of the American dream and our democratic society.
As an outspoken proponent of self-help and volunteer work, and the many
thousand points of light that are found in this country, I want to commend NAHB for
its "Homes Across America" program in which your members across the country are
building and renovating more than 600 homes for America's needy. As one illustration,
with us today are Gerald and Angela Williams and their four children, who moved into
their new home in Jacksonville, Florida on Mother's Day. Their home was built by the
builders of the Jacksonville association of NAHB and Habitat for Humanity. Will the
Williams family please stand up. This is a wonderful demonstration of the generosity
of your industry and the charitable spirit of the American entrepreneur.
As America's builders - and you, the leaders of your great industry here today - -
- look ahead to the next 50 years, you should be proud of the accomplishments of the
past 50 years. Your association has grown tremendously- from a small band of several
hundred builders in 1942 to 155,000 member firms today. Your industry has become a
vital part of our country's economy, providing not only millions of good-paying jobs but
building and remodeling the highest quality homes and apartments in the world.
Looking ahead to the next 50 years, I challenge all of you to rededicate yourselves
to the task of housing America to open the door of homeownership and affordable
rental housing to millions of additional U.S. households and to keep the dream alive.
Proclamation Signing
Now in conclusion, I want to sign a special Presidential Proclamation on 50 years
of housing America.
4
SENT BY:NAHB EXECUTIVE OFFICE 11->6-80 22:12
2028220374-
Proclamation on NAHB's 50th Anniversary
WHEREAS, the National Association of Home Builders, founded in 1942, is committed to the idea that
the opportunity to own a home should be within the reach of all working Americans;
WHEREAS, since NAHB's inception in 1942, America's home builders have built nearly 70 million new
homes and apartments and have renovated and rehabilitated millions more, making the United States the best
housed nation in the world;
WHEREAS, housing construction is a powerful force in the world's most powerful economy, creating
millions of good paying jobs and generating billions of dollars worth of demand for goods and services
throughout the economy,
WHEREAS, rebounds in housing construction have led the country out of recession in the eight
previous business cycles;
WHEREAS, since 1942, America's home builders have helped to transform America into a nation of
home owners, steadily improving the nation's housing stock, bringing homeownership to nearly two-thirds of
all households, and providing Americans with more than $1.3 trillion in equity in the homes they own;
WHEREAS, homeownership reinforces traditional American values of family, hard work, good
citizenship and participation in a free and democratic society;
WHEREAS, every Administration and every Congress in the post-World War II period has recognized
the social, political and economic benefits of a well-housed nation and has embraced policies that would move
the nation closer to the goal first adopted by Congress in the Housing Act of 1949 to "provide a decent home
and a suitable living environment for every American family;"
WHEREAS, over the past 50 years the commitment of the federal government, combined with the
strength and ingenuity of a private building industry, has produced the greatest and most successful effort by
any country to house its people;
WHEREAS, NAHB is recognized as the "voice of America's housing industry" and has been at the
forefront of efforts to formulate national housing policies and to promote innovations in housing finance,
construction, land use, technology and home design;
WHEREAS, on the eve of NAHB's 50th anniversary, America's home builders once again stand ready
to lead the American economy out of troubled times;
NOW, THEREFORE, BE IT RESOLVED that the President of the United States recognize and salute
the National Association of Home Builders for 50 years of service and leadership that have helped make the
"American Dream" of homeownership a reality for millions of Americans and have helped make the United
States the best housed nation on earth:
BE IT FURTHER RESOLVED that the President of the United States join NAHB in reaffirming its
commitment to policies and efforts that would continue to provide housing opportunities for the American
people during the next 50 years.
SENT
BY:NAHB
EXECUTIVE
OFFICE
3-6-91
(DTR)
TAXATION, BUDGET AND ACCOUNTING
(No.
45)
G - 7
aimed at spurring economic growth will no longer be
writing practices and rules for defining group life
needed, Dole said. The Republican leader added that
insurance contracts, the distinction between group
he believes many members from both sides of the
term life insurance contracts without cash surrender
aisle Feel the economy would be better off without
values and other classes of group life insurance con-
enactment of a tax bill. "If you have a secret vote in
tracts as to what evidence of insurability is acceptable
here, I think that attitude would prevail," he said.
along with six other specific issues.
If the two sides would decide to compromise, Dole
Transferred Proceeds Allocations (FI-090-91):
said that he believes Democrats and Republicans can
Katten Muchin & Zavis, Chicago, III., sent six specific
find common ground on a number of initiatives to
technical comments on the proposed regulations.
promote economic growth.
Debt-Financed Real Estate Investments By Tax
Asked if it would be politically risky for the presi-
Exempt Organizations (PS-058-90): The New York
dent to veto the Democratic tax package, which will
State Bar Association Tax Section, New York, N.Y.,
include a tax break for middle-income families, Dole
suggested that a comprehensive review be undertaken
said that It would be risky for him not to veto it, since
of Section 514(c)(9) as the current statute is overly
it will also include higher rates.
formalistic and complex. Its comments also urged
Treasury to provide rules that operate fairly and
President Calls For Action
reasonably.
Copies of comment letters are available from BNA
President Bush called on Congress March 5 to pass
PLUS for a fee. Call toll-free (800) 452-7773 nation-
his proposal for a $5,000 tax credit for first-time home
wide; (202) 452-4323 in Washington, D.C.
buyers if it does nothing else this year. "If they don't
do anything else, I wish they would lay aside the
politics of tax and spend and give that one break to the
Pensions
American economy and watch homebuilding out of
this slow economic time," Bush told the Greater Co-
IRS SEEKS TO IMPROVE PENSION RULES,
lumbia (S.C.) Home Builders Association during a
SIMPLIFY DATA COLLECTION, PETSCHEK SAYS
campaign appearance.
The Treasury Department and the Internal Revenue
Bush continued to present the economic stimulus
Service are actively considering ways to improve
legislation approved by the House as a 25-cent per
compliance and simplify and reduce the burdens of
day, two-year tax break, billed to taxpayers on a
data collection in the pension plan non-discrimination
permanent basis and said the legislation being consid-
regulations, Evelyn Petschek, benefits tax counsel at
ered in the Senate is "not much better."
Treasury, said March 5.
Both bills would raise the top tax rate on the
Petschek discarded as a rumor any statement that
wealthiest taxpayers to finance tax breaks for the
Treasury is considering withdrawing the regulations.
middle class a five-year period.
she said at a Federal Bar Association tax law
The text of a revised version of revenues estimates
conference.
by Joint Committee on Taxation staff on the package
It has become apparent that practitioners are focus-
reported out of Finance (JCX-9-92) is in Section L.
ing on the final regulations in a different way than
they did on the proposed regulations, Petschek said.
Comment Letters
The focus of comments has been on areas that re-
ceived little or no attention during the comment peri-
IRS RELEASES SIX COMMENT LETTERS
od for the proposed regulations, she said.
ON A VARIETY OF PROPOSED REGULATIONS
Some areas have been the subject of significant and
The Internal Revenue Service March 5 released six
recurrent comments, Nancy Marks, acting assistant
comment letters on proposed regulations.
chief counsel in the Employee Benefits/Exempt Or-
ganization Division, IRS, told the conference.
Following are summaries of the letters:
Thus, the problems that Treasury and IRS will focus
Regulation About The UBI Taxation Of Invest.
ment Income (EE-070-91): Jones, Day, Reavis & Po-
on in improving the regulations include the uniformity
rules for qualifying for the regulations' safe harbors
gue, Washington, D.C., on behalf of Bear Stearns
recommended that income from short sales of securi-
and the data collection burdens inherent in the general
testing regime included in the final regulations that
ties be included in the final ruling.
were issued Sept. 12, Marks said (178 DTR G-7,
Allocation And Accounting Rules On Tax Exempt
SpSupp, 9/13/91; 179 DTR SpSupp, 9/16/91).
Bonds For Arbitrage Rebate Purposes (FI-066-89):
1 Franklin Group of Funds, San Mateo, Calif., suggested
that IRS revise the definition of commingled fund.
Uniformity Rules
1 The North Carolina State Treasurer, Raleigh, N.C.,
In order to qualify for the safe harbors that have
said it disagreed with the proposed ceilings on admin-
1 istrative costs and other expenses on commingled
been provided for in the final regulations, a plan needs
1 investment pools.
to demonstrate that it provides a uniform benefit
T
Amortization Of Policy Acquisition Expenses Of
formula and that certain other features of the plan are
Insurance Companies (FI-003-91): Balboa Life & Casu-
uniform. Marks said there have been a number of
11 0 alty, Irvine, Calif., was concerned about the proposed
comments pointing out problems with the uniformity
regulation's disregard for long-standing group under-
rules in the final regulations, especially when they
apply to transfers of employees between companies
Copyright © 1992 by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington, D.C. 20037
0092-6884/92/$00.50
P 01
DOUG GAMBLE
424 - 36th Place
Manhattan Beach, CA 90266
May 12/92
(310) 546-6409
TO: CHRISTINA MARTIN
NATIONAL ASSOC. OF HOME BUILDERS (Curt Smith)
AS SOMEONE WHO LIVES IN PUBLIC HOUSING, I'M GLAD TO SEE THE HUD
SECRETARY HERE.
MILLIE WAS PRETTY DISAPPOINTED WHEN I BROKE THE NEWS TO HER THAT
THE STRUCTURE BEHIND ME 18 NOT HER NEW DOGHOUSE.
WITH THESE APPLIANCES OUT HERE, I JUST WANT TO HEAD OFF ANY RUMOR
THAT THE WHITE HOUSE IS HAVING A LAWN SALE.
WHEN I LOOK AT THESE STOVES, IT REMINDS ME THAT DEMOCRATIC POLICIES
WOULD COOK THE HOUSING INDUSTRY'S GOOSE.
WHEN I HEARD THIS WAS A 50TH ANNIVERSARY, I WASN'T SURE IF IT WAS YOUR'S
OR THE 50TH ANNIVERSARY OF THE LAST TIME THE DEMOCRATS HAD AN IDEA
HOW TO HELP THE HOUSING INDUSTRY.
I WISH THE OTHER PARTY WAS AS ENTHUSIASTIC ABOUT THE FIRST-TIME
HOMEBUYER AS THEY ARE ABOUT THE FIRST-TIME TAXPAYER.
National Association of Home Builders
15th and M Streets, N.W., Washington, D.C. 20005
(202) 822-0401 Fax No: (202) 822-0374
Kent W. Colton, Ph.D.
Executive Vice President &
Chief Executive Officer
May 6, 1992
Ms. Cecile B. Kremer
Director
Office of Public Liaison
The White House
Washington, D.C. 20500
Dear CeCe,
As we discussed when we met at the White House recently, we
are pleased to provide you with some material that could be used
by President Bush in his speech on May 18. We have some "horror
stories" as well as some success stories that may be useful to you.
Many of these items are included in the attached statement
delivered last week by NAHB First Vice-President Roger Glunt
before the House Republican Research Committee Task Force on Small
Business. Please feel free to use the examples presented in this
statement as well as the additional examples set forth below.
We would like to begin by pointing out the positive effects
resulting from the President's Regulatory Review Initiative.
This process has been beneficial in that agencies are now closely
reviewing proposed regulations to determine what the true costs and
benefits of a particular rule will be. In some cases, agency's
have redrafted proposed rules in light of the considerations raised
in the President's January memo. This is a positive approach and
should be continued.
One illustration has been EPA's willingness to discuss with
NAHB the issue of radon guidelines for new residential
construction. Unlike the area of wetlands where we continue to
have major differences with EPA's positions, we have closely
collaborated with EPA since last Fall on developing reasonable
guidelines. Before the Fall we had major disagreements with EPA
over many radon issues; however that is no longer the case. The
spirit of their approach is consistent with the President's
Initiative, and their intention now to resubmit to OMB proposed
radon guidelines is a direct consequence of the President's
Initiative.
Ms. Cecile B. Kremer
Page Two
May 6, 1992
Despite the President's positive step, we are aware that
builders continue to face regulatory hurdles at every turn. For
example, in a matter relating to the OSHA, we have recently
learned of a builder who was fined $2,250 for failing to keep a
work area free of scrap lumber, and another $2,250 for not having
an "approved" first aid kit on the site. In another OSHA matter,
a builder has just been notified that the original bid submitted
by a drywall contractor had to be increased by 15% due to the cost
of complying with OSHA scaffolding regulations.
On a larger scale, the recent decision of Hoffman Homes V.
EPA, No. 90-3810 (7th cir., 4-20-92) illustrates the problem of
federal regulation of wetlands. In this case, a builder in
Illinois who intended to develop a subdivision in the Chicago
suburbs was fined $50,000 by EPA for filling and grading less than
one acre of a 48 acre site because EPA determined that this tiny
parcel was a "wetland" that could be regulated by the federal
government. It did not matter that the area had no surface or
ground-water connection to any other body of water.
EPA
maintained that it had jurisdiction simply because a bird flying
in from another state might land on the area in question.
However, there was absolutely no evidence that migratory birds or
any other wildlife actually used the area for any purpose. It took
six years and thousands of dollars in legal fees to resolve this
issue. The federal Court of Appeals for the Seventh Circuit has
just concluded that the area in question is not subject to EPA
regulation since it has no connection to any other body of water.
This case is significant because EPA has consistently maintained
that it has jurisdiction over areas such as this one, commonly
known as "isolated wetlands". The Hoffman case is a sound
decision that clarifies that Congress did not intend to protect
isolated wetlands when it adopted the Clean Water Act.
It is also worth noting that we have been encouraged by the
positive role played by the White House in several significant
areas. The following areas deserve to be highlighted:
1. Fair housing accessibility guidelines. OMB and the Council on
Competitiveness played a significant role in shaping the final Fair
Housing Accessibility Guidelines issued by the Department of
Housing and Urban Development in March, 1991. The proposed
guidelines issued by the Department presented serious technical and
cost issues. As a result of OMB and Council oversight, the final
guidelines present builders with design options, and are
significantly less expensive than the original guidelines proposed
by the Department.
2. Energy Provisions of Minimum Property Standards. In 1990, HUD
proposed incorporating the 1989 CABO Model Energy Code (MEC) into
the energy provisions of its Minimum Property Standards. However,
HUD has not demonstrated that the CABO MEC is both cost effective
and affordable. As a result of the Council's intervention, the
Department has delayed adoption of these expensive requirements
until an appropriate analysis of their cost-effectiveness is
performed.
Ms. Cecile B. Kremer
Page Three
May 6, 1992
3. Wetlands Delineation Manual. The Council negotiated favorable
revisions to the Wetlands Delineation Manual. Thousands of acres
of land that were incorrectly classified as "wetlands" under the
1989 Delineation Manual are once again available for development.
In addition, the Council played a vital role in forcing the
agencies to solicit and consider the public's input in the
regulatory process.
I hope these examples are helpful to you and to others in the
White House. Please let me know if you need additional background
information on these or any other issues.
Sincerely,
Sent Kent W. Colton
Executive Vice President
Attachment
CC: Jeffrey W. Vogt
STATEMENT OF
THE NATIONAL ASSOCIATION OF HOME BUILDERS
ON
THE IMPACT OF REGULATIONS ON SMALL BUSINESSES
BEFORE THE
TASK FORCE ON SMALL BUSINESS
HOUSE REPUBLICAN RESEARCH COMMITTEE
U.S. HOUSE OF REPRESENTATIVES
MAY 1, 1992
On behalf of the 151,000 member firms of the National Association of Home Builders
(NAHB), I am pleased to have the opportunity this morning to address the issue of government
regulation and its impact on our nation's small businesses. My name is Roger Glunt, and my
family and I own and operate Glunt Building Co., Inc. in Turtle Creek, Pennsylvania. I come
before you today in my capacity as First Vice-President of NAHB.
First, I would like to thank Congressman Ireland, in his dual capacity as Chairman of
the House Republican Research Committee's Task Force on Small Business and Ranking
Member of the House Small Business Committee, and Congresswoman Molinari, as Co-Chair
of the Task Force, for their dedication to the country's small business people and their
leadership in organizing this hearing on federal regulatory policy. Clearly, the scope and
measure of current government regulation too frequently impedes healthy economic
development, the delivery of affordable housing, and most importantly, the creation of
housing-related jobs throughout communities across America.
OVERVIEW
As Benjamin Franklin told us in 1789, nothing is certain in life, but death and taxes.
I would submit, however, that if you're a builder today, Franklin's phrase needs to be
amended to also include government regulation. Actually, with a good accountant, taxes can
be deferred and with modern medical science, even death can be held back for a time. Only
compliance with government regulations can't be postponed - that is, if you want to stay in
business for any length of time.
Too often, the common notion of a home builder tends to be that of a "high-volume"
constructor, someone with the perceived ability to spread production and regulatory costs
across many projects. In contrast, the majority of NAHB member firms are truly small
businesses, primarily engaged in home-remodeling and the construction of single family
homes. To a lesser extent, NAHB members are engaged in light commercial projects and the
erection of multi-family residential structures. Indeed, over half of our members build fewer
than 10 homes per year and close to 75 percent of our members build 25 or fewer homes.
2
Sadly, the cumulative effect of overly burdensome regulations is creating significant
problems for these small business people and adds considerably to the cost of goods and
services nationwide. As Congressman Ireland recently noted, talking about his colleagues,
"It's easy to say you're all for small business, but it's how you vote that really counts It's
also easy to forget the cumulative effect of mandatory health benefits, OSHA regulations,
payroll taxes -- and other demands that Congress continues to heap on small enterprises every
year -- are killing small business." I agree. Congress must be aware of the synergistic impact
of its actions. When Congress considers or passes such laws as Parental Leave, or Civil
Rights, or OSHA Reform, each law by itself, no matter how well-meaning, may not have a
significant impact on small business but, taken collectively, they can drive small
businessmen and women out of business.
As citizens, home builders all recognize the responsibility they bear to make sure that
taxpayer dollars aren't needlessly squandered to prop up unfit lenders, or that our nation's
legitimate wetlands aren't defiled, or that a building worksite is as safe and healthy as
possible, but where do you draw the line? And shouldn't the punishment for regulatory
violations more properly "fit the crime"? This morning, I'd like to outline the major areas of
regulatory influence currently affecting the housing industry and, along the way, detail just
experienced. a few of the many first-hand regulatory "horror stories" NAHB members have recently
HOUSING
In community after community across the country, local governments employ zoning
and subdivision ordinances, building codes, and permitting procedures to prevent the
development of affordable housing. For much of the past two years, I had the privilege of
serving as one of twenty-two members of a Presidential Advisory Commission whose task
was to examine regulatory barriers to affordable housing. The Commission's July 1991
report, entitled "Not In My Back Yard (NIMBY)", sought to identify the fundamental
institutional, political, and structural reasons why regulatory barriers are so pervasive and so
resistant to reform.
Based on this analysis, the Commission proposed 31 recommendations for Federal,
State, and local government and private action. Although some Federal responsibility and
actions are recommended, the thrust of the report, as evidenced in the very title, is resolving
the local pressures that restrict development and construction of affordable homes, i.e. homes
that low- and moderate-income families can afford to rent or buy.
The most important recommendations from the standpoint of providing incentives are
the recommendations to condition federal housing assistance to state and local governments
upon their barrier removal strategies. Since the ultimate responsibility for developing a more
hospitable environment rests with state and local government and the power of the Federal
the key recommendations are to condition programs of the NAHA and allocations for low-
government to influence the actions of fifty states and countless local governments is limited,
income housing tax credits and mortgage revenue bonds on barrier removal strategies.
so in order to accomplish this goal.
Conditioning federal housing assistance requires legislation and NAHB urges Congress to do
3
However, I must be clear that NAHB does not support the denial of federal funds to
communities that choose to take no action in this area. Rather, we do support efforts by
Congress and the Administration to set-aside a separate pool of funds to reward those
communities that do take action.
BANKING & MORTGAGE FINANCE
"CREDIT CRUNCH"
For over fifty years, the heart and soul of America's housing policy has been a
community-based credit policy. This, of course, started with the creation of a savings and
loan (S&L) system to supply credit for building and buying homes. In recent years, however,
many S&L's deserted these principles of community-based lending and bid-up the cost of
savings dollars using brokered deposits.
To cover the rising costs of savings dollars, S&L's put their money in increasingly risky
investments. By the end of the decade, the S&L industry was in serious trouble and only a
federal bailout saved it from ruin. Fearing a similar catastrophe, federal banking regulators
overreacted and commercial banks retreated from the real estate market, calling even
performing loans and denying credit to builders seeking loans to develop subdivisions and build
homes and apartments. As this devastating credit squeeze tightened, the recession deepened
and last year housing starts dropped to their lowest level since 1946 and multifamily starts
fell to the lowest level on record.
Last fall, the Administration announced a package of initiatives designed to ease this
"credit crunch." The steps were taken in response to the continuing concerns of the housing
industry that banks were complicating the credit process by calling performing loans and not
extending new credit to creditworthy borrowers. Such actions are not unknown. But they
were put into effect on a such a wide scale by so many banks under so many different
circumstances that they have permeated the entire housing production industry. Since early
1990, NAHB members have been experiencing major problems. For example, our members
have consistently reported that:
*
outstanding-loan terms have been changed to require more collateral or equity,
often forcing borrowers to default when they cannot meet the higher demands;
*
existing loans have been required to comply with the new underwriting
requirements that banks have established for prospective loans, resulting in
additional equity and accelerated principal payments;
*
workout options for borrowers are not even being discussed in many
appropriate situations, and foreclosures often appear to be indiscriminate and
premature;
*
automatic or standard renewals and extensions of loans are being called on
demand, even when the loans are performing and the projects are selling,
forcing borrowers to default; and,
4
*
performing loans being taken over by the FDIC and the RTC are not being
refinanced by other banks.
One bank was simple and direct in a letter to a customer of five years who never
missed a payment: "In preparation for a visit from the federal regulators, [we] request
security for your unsecured line with either cash collateral of equal amount or real-estate
properties showing equities of at least [133 percent of the loan amount]." Quite simply,
residential housing production lending has always been a sound and profitable business for
banks. That business is being harmed by regulatory measures taken primarily to deal with the
problems of commercial real-estate loans.
NAHB has worked closely with the Administration and the banking regulators to
address these types of problems. Many of them have been productively dealt with through
a series of policy clarifications issued jointly by the regulators. In addition to setting forth
specific procedures for banks and examiners in dealing with real estate loans, these policies
have attempted to encourage banks to take reasonable approaches toward dealing with
creditworthy borrowers whose loans are experiencing problems. Nevertheless, it would be
premature to end an emphasis in this area. There is still considerable question as to how
consistently these policy initiatives are being implemented at the field level. Frankly, a real
problem seems to be that bank examiners continue to be subjected to contradictory messages
from Congressional responses that are critical of the regulators' policy implementation.
FEDERAL HOUSING ADMINISTRATION (FHA)
One need not examine current housing policy for long to discover the direct regulatory
cost also being borne by American consumers, namely the American family. For instance, the
National Affordable Housing Act of 1990 (NAHA) and the ensuing HUD regulations increased
the required up-front cash for purchasing a home with an FHA mortgage and increased the
premiums for mortgage insurance from FHA. These changes were introduced because of the
deteriorating condition of the FHA fund as discovered in an actuarial analysis released by Price
Waterhouse in June 1990. The impact of these changes has meant fewer families are able
to afford to purchase a home, especially young, first time buyers.
NAHA placed the burden of correcting past problems in FHA solely and completely
upon home buyers who use FHA hence forth. According to the figures in the latest Price
Waterhouse report, each yearly group of FHA borrowers will be charged an extra $400 million
dollars in premiums over what Price Waterhouse now estimates as the necessary earnings to
maintain actuarial soundness. This means FHA business in 1992 is charging nearly $600
million in extra premiums.
5
Not only is this unfair to new borrowers, but it comes at a time when home ownership
is slipping away from many young couples. The rate of home ownership for married couples
under 35 has fallen five percentage points in 10 years, from 61 percent in 1981 to 56 percent
in 1990. Households that are not traditionally owners, like singles and single parents, have
done even worse. This philosophy -- that future business must pay for past errors -- means
that new buyers will be less likely to find FHA the best option, especially those buyers with
sufficient cash to use private mortgage insurance. Evidence of this trend has already surfaced
in at least two studies conducted by the Mortgage Bankers Association and the National
Association of Realtors. The fall in business will only mean that an even higher premium will
be needed to continue to feed the failing old business. And if the smaller volume of business
is also riskier, the failure will be even larger.
The diminishment of FHA availability to cash-short buyers affects first time home
buyers the most. Families with small savings are finding it increasingly difficult to accumulate
sufficient down payment for the first home. The Joint Center for Housing Studies at Harvard
reports that 77.7 percent of all renters did not have the wealth to meet the up-front cash
required to purchase a starter home. The Census Bureau reported in "Who Can Afford to But
A House?" that 91 percent of all renters cannot afford to buy for several reasons, but again
primarily because of insufficient up-front cash.
Interest rates and home prices have both moved in a direction that should have
improved the affordability for first time purchasers. However, down payment requirements
remain the barrier that prevents first time home buyers from taking advantage of the favorable
trends. NAHB offered a number of economic stimulus proposals that address first time home
buyers' barriers. Specifically, we have proposed a tax credit for first time home buyers that
would not only put more families in their first home, but would also provide an economic
stimulus to all regions of the country. We have also proposed allowing the down payment
on a first home to be an eligible investment for first time home buyers' and their parents' tax
deferred retirement programs.
ENVIRONMENT & ENERGY
WETLANDS
The rising price that working Americans pay for housing is directly related to the
increasing cost of government regulations for impact fees, zoning permits, hook-up charges,
and a host of federal, state, and local government permits, including federal wetlands permits.
Unquestionably, the burdensome federal regulation of wetlands has created significant
problems for home builders and property owners. Some builders have faced waits of two to
three years to obtain a federal wetlands permit to build on their land. Others end up spending
hundreds or even thousands of dollars in legal and engineering fees to clear the permit hurdles
to build on "dry wetlands."
6
The history of wetland protection has a rocky past. When the Clean Water Act was
first passed in 1972 and amended in 1977, the statute did not mention the word "wetlands."
Only later did the Federal agencies of jurisdiction interpret statutory references to the "waters
of the United States" to include wetlands. Second, the Act gave oversight of its Section 404
to two agencies, the Army Corps of Engineers (the Corps) and the Environmental Protection
Agency (EPA). Rather than taking advantage of the best the two agencies had to offer, the
bifurcated administrative structure of the Section 404 program has fostered 18 years of
wetlands. controversy, excessive permit processing times, and probably little actual protection of
Much of the controversy of recent years has resulted from the inability of the Corps
and EPA to develop mutually agreeable policies which protect the nation's waters and
wetlands. These policy disputes have left permit applicants, like homebuilders, without any
meaningful guidance on key program standards for years. Then, lacking any further direction
from Congress, the Corps and EPA have systematically engaged in a practice of making policy
decisions behind closed doors, without the benefit of public notice and comment. These
decisions have resulted in vast amounts of land being inappropriately classified as federal
jurisdictional wetlands, regardless of their value or importance as ecologically sensitive areas.
When builders are denied federal wetland permits or forced to wade through needless
wetland regulatory bureaucracy, a significant price is paid by the small businessperson and
consumer alike. Not only do home builders suffer, but the ripple effect of these actions
impact a wide array of subcontractors like electricians, plumbers, and painters. In addition,
the ripple is felt by realtors and retailers on Main Street who fail to capture revenue from the
sale of drapes, furniture, wallpaper, or other home essentials.
This investment in housing is important not only for the national economy, but it
provides increased property tax revenues for our local communities and school systems. The
impact of wetlands regulations was best stated by a New England councilman when he said
(in reference to the Corps' 1989 wetlands delineation manual), "Municipalities [in our area]
are going to be virtually shut down, if they are not already. It's going to put people out of
business." Another local official talked about his small community losing over $300 million
in assessed value because of the same manual. He further stated that "tax revenues lost just
for our small town would exceed $9 million a year. Major projects have stopped. It's
paralyzing the economy." Similar statements have been related in Virginia, Georgia, Maine,
Florida, the Carolinas and across the country. An overly expansive delineation of federal
jurisdictional wetlands does affect jobs, the national economy, small businesses, private
property rights, and the delivery of affordable housing.
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What is particularly troubling about the wetland regulations is that their scope exceeds
what is truly necessary to protect actual wetlands. Let me provide a real "for instance." In
1990, a developer of a low-income housing project in Dorchester County, Maryland (a rural
county along the Chesapeake Bay), was given a "cease and desist" order by the Corps for a
project that was already over 50 percent complete. The developer had obtained all necessary
local approvals and an environmental consultant had advised him that the site had no
wetlands. The property's soils did not appear on the county's Soil Conservation Service
(SCS) Hydric Soils list. In fact, the site was a soybean field that had no history of standing
water, streams, creeks or wet depressions, and had been used for soybean production for
many years. The Corps based its order on the fact that the SCS had recently reclassified the
soils on site as hydric, although the reclassification has never been made public. The Corps
investigator had, in fact, never set foot on the site prior to issuing the order.
As a result of the Corps order, the developer's bank immediately cut off his
construction loan. No longer able to pay his construction contractors, the developer was
immediately served notice of their intent to sue. Meanwhile, the previously-constructed
housing units were sitting on pads at the building site and could not be properly placed on the
completed foundation. Predictably, the developer was unable to meet his project delivery
dates and, as a consequence, many families that were counting on moving into these units
were denied that opportunity.
After a month of intense negotiations, intervention by the County Commissioners and
the threat of many lawsuits, the Corps finally rescinded their order and the developer's bank
again resumed payments on his loan. Nonetheless, the project was completed several months
behind schedule and at a significant loss to the developer and added cost to the consumer.
The Corps eventually dropped any demand for mitigation at the site, ruling that the property
was not a wetland, but actually "drained cropland."
Another case in point involves a concrete producer from Wareham, Massachusetts
(near Cape Cod). In 1986, the owner decided to expand his product line of his family
business. To do so, he would need to construct additional space to use as retail supply and
extra storage areas, which would require an access road between two adjacent lots. Four
years and $173,000 later, the company's owner had not yet begun construction on the
building annex. Instead, he had encountered problems with the Section 404 regulatory
program: in his case, coordination among local, state, and federal delineations of wetlands
and agreement on the extent and method of mitigating any loss of natural wetlands.
In 1985, the owner hired an engineering firm to review the planned project and assess
the extent of the wetlands on his property. That firm determined that the lot contained
wetlands, and that because the wetlands were in a "mitten-like" shape, any access road
constructed to reach the upland part of the property would involve disturbing wetlands. The
firm further concluded that the owner would have to undertake measures to insure the base
flow through an adjacent creek was unimpaired, and that mitigation (construction of
replacement wetlands) could be accomplished on site.
8
The owner's initial vision of the project required filling in approximately 28,000 square.
feet of wetlands. He offered to mitigate the damage with 32,000 square feet of wetlands in
an adjacent upland area hydraulically connected to the natural wetlands. In January of 1987,
he applied for an Order of Conditions under the Massachusetts Wetlands Protection Act and
the Wareham Protective By-Laws. His application was denied and he revised his site plan.
In April of 1987, the owner filed a Notice of Intent consistent with state requirements
and an Application for a Department of the Army (Corps) Permit. In that Notice, the owner
counterproposed the filling of 4,700 square feet of wetlands to build a connecting driveway
between his existing manufacturing area and the proposed storage yard. He proposed
creating 6,000 square feet of wetlands at another area on the site to be hydraulically
connected to the existing wetlands, using a detailed mitigation plan that would take place
before any filling occurred.
In May of 1987, the Wareham Conservation Commission (the Commission) granted an
Order of Conditions allowing the owner to fill the wetlands, provided that the wetlands be
replicated first (according to the owner's proposal). In July, the owner notified the
Commission of his intent to proceed. But four months later, a representative from the EPA
visited the site. By letter that was dated November 30, 1987, but postmarked December 10,
1987, the Corps notified the owner of the need for a Corps permit. This letter failed to reach
the Commission, though it was named as a recipient of a copy. The EPA representative
visited the site for a second time in December and notified the owner that he was in violation
of the Clean Water Act. The owner spent the next few months corresponding with town,
county, state, and federal officials.
Faced with conflicting requirements, and saddled with engineers, lawyers and
consultants with varying levels of expertise regarding the local, state and federal standards,
the owner spent the next two years attempting full compliance. He eventually spent a total
of $173,100 in this effort: $86,000 on environmental consultants, $42,000 in attorney's
fees, and $45,100 in nursery and planting expenses. And all the owner wanted to do was
create more storage area, in order to allow the company to expand its product line, create a
safer working environment for its employees, provide additional parking for customers and
employees and eventually hire six more workers.
This type of bureaucratic "red tape" and unnecessary, duplicative overregulation is
inappropriate and unacceptable. Accordingly, NAHB is urging Congress to to pass H.R. 1330
which would eliminate excessive delays and costs related to Section 404 and wetlands. The
enactment of H.R. 1330 would provide the needed balance between protection for true
regulatory jurisdictions.
wetlands without unnecessary regulatory costs, burdensome delays and overlapping
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ENDANGERED SPECIES ACT
In 1973, Congress passed the Endangered Species Act (ESA) making it a federal
offense to buy, sell, possess, export, or import any species listed as endangered or threatened
or any product made from such a species. The law also directed federal agencies to ensure
that their actions, including the granting of construction permits to private companies, did not
jeopardize listed species. Economic impact was prohibited from being considered when
making these determinations. In 1989, Congress reauthorized the Act for an additional five
years. The Secretaries of Interior and Commerce have principal responsibility for administering
the Act (Interior is responsible for freshwater and land species). Within Interior, responsibility
for implementing the Act and for making listing decisions has been delegated to the Director
of the Fish and Wildlife Service (FWS).
Preservation groups and "no-growth" advocates have discovered the Act as an
effective tool to halt development and home construction. Recently, a temporary restraining
order by a federal judge blocked government timber sales from lands involved in the much-
publicized spotted owl dispute. The result -- a corresponding spike in lumber prices. In fact,
the past few months timber prices have increased by about 30 percent, which in turn will
have the eventual effect of damaging housing affordability. But beyond being used as a
"surrogate" to achieve environmental objectives other than the protection of endangered
species, ESA listings have also had a major cost impact on municipalities and private builders.
For example, the city of Austin, Texas has recently been beset by the ESA listing of
the black-capped vireo and the golden cheeked warbler. The FWS has listed both birds as
endangered, with the Texas "Hill Country" surrounding Austin the primary center of their
habitat. Because there are less than 1,000 birds nationwide, the FWS has taken an especially
strong stand. So Austin city officials, in conjunction with the private sector, have devised a
conservation plan that sets aside large tracts of land as a protective preserve, with more than
200,000 total acres being required for their protection.
Although the costs of these requirements are difficult to assess, the city's chief
appraiser has stated that the value of the affected land would be reduced from approximately
$336 million to $15 million, with the annual tax levy reduced from $6.7 million to around
$300,000! Beyond the proposed set-aside, the appraised value of the average home in Austin
dropped from roughly $71,000 to $68,000, with the city forced to deal last year with a $1.6
million shortfall based on the current property tax rate. Officials in Riverside County,
California are mindful of similar dangers in the face of an ESA listing for the Stephens'
kangaroo rat (indigenous to that area). The designation slowed on-line development for more
than two years and has cost builders more than $20 million in special environmental fees to
help save the rodent and its habitat.
We believe there should be a more rational approach to the protection of endangered
species. Accordingly, NAHB's key ESA priorities are as follows: to seek a requirement for
an economic impact statement to accompany a proposed listing for a species; to seek a
determination that a species is recoverable before the final listing of a species; and, to seek
fees the primary source of revenue.
an equitable financial responsibility for habitat conservation plans rather than tapping building
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ENERGY
Despite the pleas from small businesses and the housing industry, Congress continues
to entertain proposals which are bound to have repercussions for all homebuyers. Currently
being considered by various committees in the House is H.R. 776, the Comprehensive
National Energy Policy Act. Among other things, this bill would impose mandatory energy
efficiency standards on all new home construction in every single state, with little regard for
life cycle costing and its impact on the housing consumer.
The mandatory standards referenced in the legislation is the 1989 edition of the
Council of American Building Officials (CABO) Model Energy Code (MEC). The national cost
of complying with this code is $2,340. But this amount does not represent the cost of the
entire energy efficiency package in the home. Instead, it is the amount over and above the
cost of meeting the 1986 edition of the CABO MEC, the edition immediately preceding the
1989 edition. This $2,340 in additional costs will inevitably hurt small home builders, and of
equal importance, the low- to moderate-income families looking for their first home.
Therefore, if enacted, this bill would represent yet another federally imposed barrier to
affordable housing.
LABOR
MANDATED BENEFITS
Lacking sufficient revenues to provide for the government delivery of new programs,
elected officials have been asking more frequently for small business people to bear the cost
burden. Faced with fiscal realities involving tight budgets or indeed, budget deficits, many
government authorities (at all levels) have attempted to pass along the cost of "socially-
conscious" legislation in the form of employer mandates.
Many states and localities have already enacted or actively considered laws mandating
paid family/medical leave or health benefits for all workers and, as you well know, support for
comparable federal mandates continues to run high within the current Congress. And this all
on top of the newly emerging compliance costs for small businesses associated with the
recently enacted Civil Rights Act of 1991 and Americans with Disabilities Act of 1990.
SAFETY & HEALTH
Much attention in recent years has also been focused on improving safety and health
conditions within the construction industry. Indeed, the 1991 federal Occupational Safety and
Health Administration (OSHA) "rule book" for construction weighs in at almost 700 pages,
with recent standards concerning the hazardous communication of toxic chemicals (HazCom),
proper trenching, and the use of stairways and ladders having all been promulgated in the past
three years. During the next year or so, OSHA is expected to publish new rules dealing with
roof fall protection, scaffolds, and the wearing of seat belts while driving motor vehicles.
11
NAHB members fully recognize the hazards associated with the building worksite.
That's why our association provides a full range of services designed to help builders comply
with existing safety and health guidelines. However, as the housing industry struggles toward
economic recovery, OSHA inspectors have recently begun to place a heavy new emphasis on
enforcement within the residential sector, with home builders now subjected to inspections
once reserved for large commercial construction firms.
Take, for example, the current situation in the state of lowa. Iowa is one of the more
than twenty states that, in accordance with current OSHA law, has opted to develop and
operate its own job safety and health plan. Once a state plan is approved, federal OSHA
funds up to fifty percent of the program's operating costs and continues to closely monitor
the plan's operation. Since last September's tragic fire in Hamlet, North Carolina (which had
an OSHA-approved state program) where 25 workers were killed at an Imperial Foods plant,
approved state plans have been under intense scrutiny from the U.S. Labor Department.
This intensified federal oversight, coupled with a seven-fold increase in the maximum
allowable fines for OSHA violations (as passed by Congress and the Administration as part
of the 1990 Omnibus Budget Reconciliation Act), has resulted in the thirteen full-time lowa
Occupational Safety and Health Bureau (IOSH) inspectors levying record-setting fines to
builders or their subcontractors for even the most minor safety violations. Roughly a month
ago, an IOSH inspector visited a Des Moines building site where plumbing and electrical work
was being performed by subcontractors. The inspector asked a laborer working on a ladder
if he knew how high he could legally climb while working and still comply with state
standards. "As high as I"d like to," replied the worker. The resulting fine assigned to the
subcontractor $3,000, for failure to provide proper training and violating the standard
requiring fall protection for employees working over 4 feet off the ground.
Other recent IOSH assessments include a $5,000 fine levied against a West Des
Moines remodeler for violating the equivalent IOSH hazard communication standard. His
offense -- an open tube of caulk lying on the ground at the worksite. The remodeler's
aggregate total for all violations, including failure to properly secure electrical extension cords
and improperly securing workers' ladders, was over $27,000! A plumbing subcontractor was
fined $1500 for his failure to inform workers that a first aid kit was available at the worksite,
and for failing to resupply his kit with "sanitary" gauze after his kit's gauze roll had been
opened. NAHB has also received recent correspondence from Iowa builders indicating that
heating and air conditioning subcontractors are informing them that their new pricing
schedules, altered to accommodate the all-to-real possibility of IOSH fines, will reflect an
additional $250 to $300 per house. And one particular drywall subcontractor in Des Moines
submitted a recent bid to a builder that included an actual line-item devoted to padding the
cost $3500! to accommodate possible IOSH scaffolding violations. The line-item cost -- an extra
Such examples are not confined to "state-plan" states such as lowa. Federal OSHA
inspectors are also assessing fines that seem far to excessive to fit the accompanying citation.
As a Massachusetts NAHB member recently noted in correspondence to our national office:
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"It has come to my attention that OSHA is blitzing our region with a 'fine first/ask
questions later' approach to the construction industry. One of our members has
recently shared with me a number of citations issued to his electrical contracting firm
and other trades on a local jobsite. The nature of the infractions charged seems
considerably less severe than the fines would indicate. In fact, the severity and
frequency of fines being issued threatens to expose the workers in this region with a
greater likelihood of job loss and starvation than to an injury on the job."
In Houston, Texas just last fall, OSHA inspectors visited a residential building site and began
writing citations for, among other things, the employer's failure to provide a written safety
plan and violation of the HazCom standard. Thirty minutes later, the fines totalled over
$31,000. Included among those fines were two $900 fines for failure to provide a fire
extinguisher on site and for failure to post emergency phone numbers.
To be sure, NAHB does not condone the legitimate violations which have just been
referenced. We recognize our responsibility to work with our members to help them comply
with existing state and federal safety and health standards. But, I again must ask, can these
kinds of excessive fines really "fit the crime" or accomplish their stated purpose - the
abatement of hazards? In order to have workers that require protection, there need to be
viable employers. For that reason, NAHB recommends that federal OSHA and the approved
state plans alter their enforcement schemes to reflect the differences between heavy
commercial construction and residential building "of four stories or less."
TAX
The Tax Reform Act of 1986 (TRA) also placed increased administrative burdens on
small businesses. Significant regulations (such as Treasury Regulation Section 1.263A(f)-
4(e)(2)) arising from the TRA pertain to the capitalization of construction costs. Generally,
all direct and indirect construction period costs must be capitalized into the basis of the
building and depreciated over the applicable recovery period. For buildings built under
contract, the owner of the building is required to capitalize costs, including interest, to the
extent paid to the contractor or otherwise incurred by the taxpayer.
The TRA authorized the Internal Revenue Service (IRS) to prescribe such regulations
as may be necessary or appropriate. The proposed regulations are imprecise and
overinclusive. NAHB has testified before the IRS on these highly technical regulations, citing
a number of the administratively created problems for builders. I would be happy to supply
the Task Force with a copy of our IRS testimony upon request.
Also on the tax front, NAHB would point to the lengthy and overinclusive regulations
put forth regarding the passive activity loss rules enacted through the TRA. While the
underlying problem with those rules is statutory, the sheer bulk of the regulations alone makes
them incomprehensible even to sophisticated accountants or tax attorneys.
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CONCLUSION
That concludes my prepared statement for the Task Force. Again, let me state my
thanks for the opportunity to appear before you here today. At this time, I will be happy to
provide any additional information you may request or answer any questions you might have
of me.