Housing developers confused by the new emphasis on green building may soon find relief thanks to building code language in the final stage of development by the National Association of Home Builders (NAHB), the International Code Council (ICC), and the NAHB Research Center.
With important help from the National Multi Housing Council (NMHC), the organizations are about to unveil their National Green Building Standard. At press time, a final draft was being prepared for submission to the American National Standards Institute (ANSI) for its approval this spring.
The standard is written in the same language as most local building codes and will be presented for incorporation into local building codes after ANSI approves it.
It is intended for residential structures, including singlefamily homes, apartments, and hotels. While it will apply to all structure types, it does not deal with high-rise structures or multifamily renovations in a comprehensive way. Both applications will get more attention in future versions of the standard.
The standard is intended to provide a logical option for local governments that want to require residential structures to be green. Right now, the only widely available measure of a building’s green features is the Leadership in Energy and Environmental Design (LEED) Green Building Rating System, developed by the U.S. Green Building Council.
The LEED system leaves much to be desired as a standard for local building officials to use, according to the NMHC, which played a key role in making sure the pending ICC code was suitable for multifamily structures. First, it is a flexible rating system that awards points for a variety of green features and is not written as a building code, which creates many questions of interpretation. Second, it requires building owners to present lots of documentation to the U.S. Green Building Council in order to get LEED certification. The new ICC standard would be implemented by the same local officials who implement construction, electrical, and other basic building codes, reducing delays, paperwork, and costs for compliance.
The new standard awards points in five areas: site selection and development; water efficiency; energy efficiency; indoor air quality; and materials and resources. The code allows for flexibility in how a project wins points in each category but requires a minimum level of performance in each of them.
For more information, visit www.nahbrc.org/technical/ standards/greenbuilding.aspx.
CEOs to Testify at Housing Crisis Hearing
The CEOs of three companies heavily involved in the subprime mortgage market spoke to the House Committee on Oversight and Government Reform about the state of the housing market March 10. Countrywide Financial CEO Angelo Mozilo, former Merrill Lynch CEO E. Stanley O’Neal, and former Chairman and CEO of Citigroup Charles Prince did not claim any responsibility for the housing slump.
Mozilo came to the defense of adjustable-rate mortgages.
“Before the onset of the current housing crisis, these products were widely offered by industry because they made homes more affordable for more people and helped homeowners consolidate other, more expensive debt,” Mozilo said.
In five years, the trio raked in more than $460 million in combined compensation. Two — Prince and O’Neal — have stepped down due to the subprime fallout. The fact that CEO compensation has risen from 40 times what the average worker made to 600 times in recent years also was a part of the discussion at the congressional hearing, according to ABC News.
Compensation, Benefits Survey Launched
The National Multi Housing Council’s (NMHC) annual apartment compensation and benefits survey will be under way April 4. Firms that complete the survey questionnaire by the May 9 deadline will save substantially on the price of the final report.The fees charged for the report cover the costs to produce it. The survey will be published in partnership with market data provider Watson Wyatt Data Services.
The 2008 survey results, which will cover 65 corporate- and property-level positions from top executives to leasing consultants, will be published by August.
Survey participants can purchase the final two-volume report for $600, compared to $1,800 for non-participating NMHC and National Apartment Association members and $2,700 for non-participating nonmembers. The survey, which is open to all apartment firms, can be completed online at www.nmhc.org/goto/08CompSurvey.
Mixed Report for Condo Prices
A fourth quarter 2007 report from the National Association of Realtors (NAR) is a mixed bag for condo developers.
The NAR report examined 59 metros. The bright spot is that 33 metros showed annual increases in prices. Not so good: 26 metros recorded price declines, including four areas that witnessed double-digit price drops.
The national median existing condominium price was $221,000 in the fourth quarter of 2007, barely changed from $221,200 at the end of 2006. Bismarck, N.D., saw the biggest fourthquarter increase, with the median price rising 20.8 percent to $125,000 at the end of 2007. The New Orleans area, which also includes Metairie and Kenner, La., also recorded price increases. The NAR reports that the median price of a condo in the New Orleans metro area rose 17.8 percent to $173,300 at the end of 2007. Knoxville, Tenn., also witnessed double-digit growth. The report noted that median condo prices in Knoxville were up 10.6 percent to $160,800 in the fourth quarter of 2007, compared to the same period a year earlier.
“The healthiest housing markets today generally are moderately priced and are experiencing job growth and often population growth, which in turn is supporting strong price growth,” said Lawrence Yun, chief economist for the NAR, in a news release. “Most of the weakest markets have either experienced both job and population losses, or they are experiencing corrections following a prolonged period of rapid price growth.”
Three metros that experienced double- digit drops were Tucson, Ariz.; Cape Coral/Fort Myers, Fla.; and Las Vegas/Paradise, Nev.
Homebuyer Tax Credit Legislation Sparks Controversy
Sens. Lamar Alexander (R-Tenn.) and Johnny Isakson (R-Ga.) are sponsors of new legislation that would allow a $15,000 tax credit to be taken over three years by buyers of new and foreclosed homes.
Alexander said the tax credit would “give a much needed shot in the arm to housing by helping to attract buyers back into the housing marketplace. It helped ease the housing slowdown in the 1970s, and it would work again today.” In 1975, lawmakers approved a $6,000 credit over a three-year period after the market recorded a three-year supply of vacant homes.
A tax credit could put a $6 billion to $12 billion strain on the federal budget, according to a report in Dow Jones’ MarketWatch.
The credit would be available for new or foreclosed homes (or those under foreclosure proceedings) purchased between March 1, 2008, and Feb. 28, 2009. A new home is defined as one that was permitted or under construction before Sept. 1, 2007.
A second stimulus package is likely to contain provisions opposed by the Mortgage Bankers Association (MBA), one of which could allow the courts to write down the value of troubled borrowers’ mortgages. The MBA has said that allowing judges to modify mortgage contracts would increase the cost of credit to all borrowers.
“As long as this consumer-unfriendly provision is included, we cannot support the package as a whole,” said MBA Chairman Kieran Quinn.
Proponents argue that the tax credit is needed to stimulate house sales. But opponents say a taxpayer-financed solution to oversupply problems is neither necessary nor fiscally responsible. “The marketplace can, and should, correct it just as it has corrected past oversupply problems in housing and other sectors,” Jim Arbury, senior vice president of government affairs for the National Multi Housing Council, said in a statement. “The unintended consequences of a homebuyer tax credit should cause any lawmaker to pause and reconsider. Such a credit could actually increase foreclosures and accelerate house price declines.”