Mid Atlantic Builder July August 2013 by Maryland Building Industry Association

2013 General Assembly Session Report

Mid-Atlantic

Vol. 55 Issue 3 July/August 2013 www.homebuilders.org

Lobbying for your

Future Maryland State Builders Association 2013 Legislative Session Report

PLUS Storm Water Update Why Marketing Goes Wrong So Often Home for Our Troops Dedication

Scan to read this issue online.

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July/August 2013 Vol. 55 Issue 3

Mid-Atlantic

Editor Kristin Josephson Hogle, Communications Director communications@homebuilders.org

Advertising Chris Baughan, Advertising Sales Manager 410-265-7400, ext. 121 chris@homebuilders.org

Design Heather Winkel, Art Director Kelsy Stone, Graphic Designer Jeremy Haag, Graphic Designer Network Design Group ndg@networkmediapartners.com

HBAM Legal counsel Linowes and Blocher

Mid-Atlantic Builder

Lobbying for Your Future 2013 Legislative Session Report

12 Storm Water Update

Review the current status of local legislation implementing stormwater fees in ten jurisdictions across Maryland.

16 IDOTs Are Still Alive

Use them for deposit mortgages.

18 Why Marketing Goes Wrong So Often Does your message match your brand?

22 Home Four Our Troops Dedication Bob Ward finishes beautiful home for a hero.

24 Getting Financing for Your Project

Builders and developers can maximize their lender relationships.

34 NAHB’s Value for State and Local HBAs

Also

33 Orioles Game 45 Eastern Shore Luncheon 46 Maryland Center for Housing WorkDay

Departments 4 6 50 52 56 58

President’s Message Events Stats and Facts New Members Government Affairs HBAM Weekly News

Pages 29-32

Postmaster: Send address changes to Home Builders Association of Maryland, Inc., 6030 Daybreak Circle #A150 PMB 362 Clarksville, MD 21029

ECO BOX Mid-Atlantic Builder text and cover pages are printed on SFI certified Anthem Matte using soy ink.

Pull-Out Section MID-ATLANTIC

is a publication of HBAM Member Services, Inc., a subsidiary of the Home Builders Association of Maryland, Inc., 6030 Daybreak Circle #A150 PMB 362 Clarksville, MD 21029 410-265-7400, www.homebuilders.org.

Remodeler A supplement to Mid-Atlantic Builder

• The Sustainable Forestry Initiative® program promotes sustainable forest management.

The National Association of Home Builders umbrella enhances local services.

38 Will Inaccurate Appraisals Slow Down the Recovery? Accurate valuation is key to stability.

42 Alphabet Soup: Letters After Names

HBAM Remodelers Council Award of Excellence Whole House $600,000 & Under Doug Pruett Construction, Arnold Waterfront

Post-nominal letters in the building trade– some mean a lot more than others.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

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Contact Eddy Esplund, Tremco Barrier Solutions, to schedule a no-obligation “Energy Trade-Off Analysis” on your most popular home models. Learn how the Enviro-Dri WRB can reduce air changes, reduce your construction costs, and help you meet the 2012 IECC code. EDDY ESPLUND, CSI-CDT AT 609.206.7624 EESPLUND@TREMCOINC.COM

2013 HBAM Leadership Executive Committee Scott Armiger President

Russell Dickens President Elect

president’smessage

Tom Baum First Vice President

Lisa Junker Associate Vice President

Jonas Jacobson Secretary

A Day on the Hill

Kimberly Palmisano Treasurer

Rod Hart

Roughly 25 industry members and I attended a luncheon on Capital Hill on June 5. This con-

tingency included a terrific showing by members of the Home Builders Association of Maryland and members from the Maryland National Capital Building Industries Association and Frederick County Building Industries Association. Lori Graf, our COO and Katie Maloney from the Maryland State Builders’ Association were also in attendance. In fact, this was the best showing of support from our industry in years! Although the room was not ideal (tiny and hot)…I think the visit was extremely necessary and effective. We had five congressional members and assistants stop by to listen to our message…”that a strong housing market is critical to create jobs and boost economic growth.” Specifically, we spoke in detail regarding Tax Reform, Housing Finance Reform, Immigration Reform and the Housing Production Credit Crisis. We also discussed the hottest topic for our industry in Maryland, the Accounting for Growth proposal. This new policy, that is currently in discussion, would require any new development to go far beyond offsetting new sources of pollution. The estimated cost of the fee would be almost $50,000 per unit for some types of housing. Some of the congressional members knew nothing about this new policy being initiated by MDE. They certainly agreed that this kind of punitive fee is not fair or equitable to say the least. The one thing that our members of congress do understand is jobs. In fact, House Minority Whip, Steny Hoyer, stated matter-of-factly that “Housing is the #2 generator of jobs”! However, we are losing thousands of jobs per year to our bordering states. This has 4

got to be reversed…our state economy depends on it. Let’s hope that our annual visits to Capital Hill continue to make a difference. We need to show up every year in numbers to support the efforts of NAHB and MSBA. Lori Graf, Michael Harrison and I travelled to Salisbury on May 8th to welcome our newest members from the Eastern Shore. It was a great turnout at Brew River for lunch and everyone was thrilled to be a part of HBAM and all that we have to offer. We now have 50 new members and a new Eastern Shore Chapter. Stay tuned for events across the bridge in the fall. The Maryland Center for Housing is well underway and looks spectacular. All members should have received an email update from Bob Ward, Chair of the Building Industries Foundation. We need your help to complete this monumental project. Please contact Lori Graf if you would like to be a part of the new headquarters for HBAM. Thanks for everything you do for this industry…you do make a difference.

L. Scott Armiger 2013 HBAM President

Immediate Past President

Chapter Presidents

David Murphy Baltimore County Evan Gilligan Anne Arundel County Paul Mueller Carroll County Russ Robertson Baltimore City Jeremy Rutter Howard County Dan Whitehurst Upper Chesapeake

Council Presidents Timothy Bishop

Land Development Council

Katrina Bartos Sales and Marketing Council

Joseph Smith, CGR, CAPS, CGP HBAM Remodelers

William Zahler Maryland Residential Green Building Council

Board of Directors Tim Nichols Robb Aumiller Mark Bennett Steve Breeden Mike Breen Ron Carstens Patrick Costello Sean Davis Brenda Desjardins Tim Ellis, LEED, AP, CPE, CGR, CGP Joe Gregory

Frank Hertsch Cindy Huntzberry Jonas Jacobson Steve James Donald Lynch Jr., CGR, CAPS Sandy Marenberg James Mathias Michael McCann Tim Morris Dan Murtaugh Jeff Ott

Alternate Directors Jeff Aleshire Lou Baker Mark Giganti Marka Guindon Jay Hergenroeder

Joe Hikel Tim Naughton Dennis O’Neil Cindy Plackmeyer Leslie Rosenthal

Ex Officio Members Jack Orrick Howard Perlow Chris Rachuba

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

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Events Eastern Shore Chapter Reception at MACo August 15, 2013 6:30 pm – 8:30 pm Clarion Resort Fontainebleu Hotel The newly formed Eastern Shore Chapter of HBAM will be holding a reception dur ing the Maryland Association of Counties Conference in Ocean City, Maryland. The conference will focus on economic develop ment and tourism in Maryland. Please contact Carey Swift at 410-2657400, ext. 118 or carey@homebuilders.org to make your reservation.

Land Development Council Awards of Excellence in Community Development September 19, 2013 6 pm – 9 pm The L’Hirondelle Club The Land Development Council Award of Excellence program offers recognition to development professionals who provide superior and creative development projects that are sensitive to the community and make appropriate use of the existing natural elements. Projects are available to all HBAM member firms in the State of Maryland and Adams and York Counties, Pennsylvania.

HBAM Membership Drive September 24, 2013 Rally September 26, 2013 Telethon HBAM will be holding a membership drive in September and we NEED YOU! Sign up now to be part of a team or donate a prod uct or service to be used as an incentive and grow your business. 6

CALL 410-265-7400 for information on registration for our events or visit www.homebuilders.org.

The Department of Housing and Community Development Annual Governor’s Housing Conference September 27, 2013 8:30 am – 5 pm Hilton Baltimore This conference provides an educational opportunity for leaders in the housing and community development fields to come together and discuss solutions and oppor tunities for affordable homeownership and rental housing in Maryland. The annual Governor’s Housing Confer ence is the largest and most comprehen sive affordable housing forum in the state, convening housing advocates, community development leaders, housing authorities, homebuilders, developers, lenders and legislators who come together to discuss solutions and opportunities for affordable homeownership and rental housing in Maryland. The Department of Housing and Community Development has been hosting the conference for over twelve years, with the Home Builders Association of Maryland.

HBAM Remodelers Awards of Excellence November 7, 2013 6 pm – 9 pm Towson Golf and Country Club All Award of Excellence winners will be an nounced. Mark your calendars! The HBAM Remodelers Award of Excellence Program recognizes remodeling professionals who provide customers with superior and creative remodeling projects which are sensitive to the existing structure and make appropriate use of the existing building elements. If you haven’t entered your project, do it today, deadline is July 31, 2013.

ICON Awards November 14, 2013 5:30 pm – 8 pm The Fretz Corporation Submit your nominations for Associate of the Year, Builder of the Year and Life time Achievement Associate and Lifetime Achievement Builder. Get the forms on line today and submit by August 1st to HBAM. www.homebuilders.org/page/icon/

Celebrity Chef Night October 16, 2013 5:30 pm – 9 pm Martin’s West Donate-Cook-Attend-Bid-Sponsor Over 400 HBAM members attend this excit ing and relaxing event which includes lively entertainment, fabulous culinary delights created by our builder and remodeler mem bers and a live and silent auction. A portion of the proceeds benefit Building Industries Foundation.

2014 International Builders Show February 4 – 6, 2014 Interested in staying at The Wynn Las Vegas Resort and Spa? HBAM is reserving rooms TODAY! Email wynnrooms@home builders.org for availability.

Save the Date for Builder Mart 2014! March 19, 2014 www.buildermart.org

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

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Maryland State Builders Association 2013 Legislative Session Report

2013 Legislative Session Report

Lobbying for Your Future By Kathleen Maloney

Executive Summary

he 2013 General Assembly Session was significant because of two high profile pieces of legislation introduced by the Governor and approved by the Legislature: Gun Control and a Repeal of Marylandâ&#x20AC;&#x2122;s Death Penalty. The priority issues monitored and lobbied by the Maryland State Builders Association were second or third tier issues compared to the social issued debated during the 90-day Session. For the development industry, the 2013 Session was quieter without a significant land use or environmental bill but the lobbying team stayed busy reviewing 160 pieces of legislation and commencing a facilitated negotiation process on the MDE offset regulation.

The priority bills by issue area include: Environment HB 508—As amended by the House, this bill would eliminate the exemption for state properties to pay local stormwater utility fees that were established by MS-4 Phase I counties. State properties would have the option of either paying the local fee or doing mitigation on the property through their discharge permit. The bill was gutted in the Senate Committee to study the feasibility of removing the state and local exemption and delay implementation of the local fees for two years. The bill died in the Senate. HB 706—As amended, this bill establishes that the definition of No Net Loss is 40 percent tree canopy statewide. Department of Natural Resources will convene a group of stakeholders following the results of the next Resource Inventory in 2018 to review and analyze results. The state currently has 40 percent tree canopy cover and DNR will employ voluntary tree planting programs to sustain the current threshold. In addition, the bill clarifies that future offset credits and stream restoration projects would be exempt from filing a forest conservation plan. This bill passed and is expected to be signed into law. Land Use SB 965/HB 1170—Establishes a task force that will convene this summer to study the feasibility of creating a Smart Growth Investment Fund to provide incentives for smart growth development projects. These bills passed and are expected to be signed into law. HB 256—As amended, this bill eliminates the local appeal process for an aggrieved party related to a Developer Rights and Responsibilities Agreement. It clarifies that an aggrieved party can appeal to the local circuit court. This bill passed and is expected to be signed into law. SB 671/HB 409—This bill extends that submittal cycle for local comprehensive plans from six years to ten years. These bills passed and are expected to be signed into law.

Professional SB 78—This departmental bill would allow the Maryland Home Improvement Commission to require a licensee to pay a claim of up to $15,000 without having a hearing. MSBA vigorously opposed the bill and it died in the House Committee after passing the Senate. HB 159—This bill would have reduced the amount of experience required to obtain an MHIC license. The bill was withdrawn at MSBA’s request. Common Ownership SB 161/HB 286—As amended, this bill prohibits a common ownership community from foreclosing on a lien that includes costs other than the actual periodic assessments and attorney fees associated with the filing of the lien. These bills passed and are expected to be signed into law. SB 167 and HB 1141—These bills were not cross-filed but are almost identical. The bills would prohibit a developer from enforcing a provision of a contract or declaration that limits a warranty claim period. The bills both died in the House Committee. HB 315—This bill would limit a landlord’s ability to increase the rental fee, constituting rent control. In addition, the bill would prohibit a landlord from evicting a tenant in order to raise the rent. The bill died in the House Committee. Taxes SB 202/HB 372—These bills exempted transfers of real property between a parent company and subsidiary or subsidiaries owned by the same principals when there was either no or nominal consideration from paying the recordation tax. SB 436/HB 1209—As amended, this bill exempts IDOTs recorded prior to July 2012 from paying recordation fee on the original loan amount. Also, it exempts refinancing of IDOTs from paying recordation unless there is new money in the loan and raises the threshold that triggers the tax from $1 Million to $3 Million. These bills passed and are expected to be signed into law.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Other SB 261/HB 16—These bills would limit the implementation of new regulations by most regulatory agency to a quarterly schedule. Both bills died in the Senate Committee. SB 750/HB 769—These bills prohibit local jurisdictions from amending their building code that would weaken the wind design and wind-borne debris provisions. SB 902/HB 1279—As amended, these bills create a new cause of action for a tenant, dependent of a tenant of an application for tenancy to obtain relief for a violation of the Maryland Accessibility Code. The Senate bill died in the House but the House bill passed and is expected to be signed into law. SB 1039/HB 1499—These bills make various changes to the campaign finance law. Among the changes is a restriction for LLC’s owned by the same principal from making contributions individually. A principal of multiple LLC’s will be considering a single donor and all contributions cannot exceed the contribution limit. The Senate bill was not voted on but the House bill passed and is expected to be signed into law. n

Kathleen Maloney is the owner/principal of Maloney and Associates, a government relations-lobbying firm that provides legislative and regulatory representation and association management in Annapolis Maryland. She has handled policy priorities of the residential development and building industry in both the legislature and state regulatory agencies in Maryland for the past eleven years. In addition, Katie serves as the Co-Chair of the Maryland State Chamber of Commerce Environment Committee and is a member of the Maryland Government Relations Association. She also served as an adjunct professor in the Political Science Department at the United States Naval Academy.

The state currently has 40% tree canopy cover and Department of Natural Resources will employ voluntary tree planting programs to sustain the current threshold.

For more information about the above mentioned bills or other issues of interest, please contact Katie Maloney at 410-263-0070 or katmaloney@verizon.net.

www.homebuilders.org

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Now what? Reducing the cost and impact of local stormwater fees. Review the current status of local legislation implementing stormwater fees in ten jurisdictions across Maryland.

By M. Trent Zivkovich

s you’ve probably heard by now, many Maryland jurisdictions have a new local stormwater fee that started on July 1, 2013. Derided by some as a far-reaching “rain tax” and hailed by others as a key step in protecting the Chesapeake Bay, the local stormwater fees were mandated in 2012 by the Maryland General Assembly for the state’s 10 most densely developed jurisdictions- Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery and Prince George’s counties and Baltimore City.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

This article is the second by Mr. Zivkovich reporting on the current status of local legislation implementing stormwater fees in ten jurisdictions across Maryland. Please see the May/June 2013 issue of Mid-Atlantic Builder magazine for additional background information. Note that related laws, regulations and practices are frequently changing; information in this article is current as of July 9, 2013.

Current Status Each jurisdiction has responded in one way or another to the State’s mandate. Some jurisdictions have programs in place and property owners saw the charges appear on the July 2013 County real estate tax bills. Other jurisdictions have delayed billing property owners in order to finalize their programs and administrative processes.

Rights of Appeal Credits & Rebates: In general, property owners have a legal right to challenge the specific fees imposed for a few limited reasons: •e rrors made in calculating the amount of impervious surface on a property; •e rrors in assigning improper use or zoning classifications to certain properties; •e rrors in identifying property owners; and mathematical errors made in calculating the fees to a particular property. What does vary is the timeframe in which a property owner has to appeal the fees when they believe an error exists. With regards to credits, each jurisdiction has a different process and opportunity to reduce the fees charged. As required by state law, each has provisions intended to offer reduced charges for those that can demonstrate that their properties reduce the quantity of stormwater or improve the quality of stormwater discharged from a property. Other jurisdictions provide rebates for expenses previously incurred to manage stormwater. The processes required to obtain these credits vary, as do the requirements for documenting their existence. Details on the status of each jurisdiction’s program and fees, rights of appeal and available credits are all provided below and summarized in a separate spreadsheet here. Please note this is an ever-evolving matter in each county and Baltimore City, so please contact your attorney or the author for the most current information available and to determine how you can best take advantage of these opportunities to minimize the fees you are charged.

www.homebuilders.org

Anne Arundel County Fees: Anne Arundel County will include its charge to property owners on their July 2013 real property tax bills. The bill establishes an annual flat fee for residential properties of $34, $85 or $170 per dwelling unit based on the property’s zoning classification. A fee of $85 per 2,940 square feet of impervious area will be charged annually for any multifamily residential and non-residential (i.e., commercial, industrial, agricultural, etc.) properties, with several exemptions and modifications, among others: • For single family residential properties and those multi-family and non-residential properties with a base fee exceeding $500, the charges will be phased-in at 60 percent for the 1st year, 80 percent for the 2nd year and 100 percent thereafter. • Non-residential fees are capped at 25 percent of the base property tax. • P roperty owned by a religious group or organization is charged a flat $1 fee. • P roperty owned by other non-profit groups or organizations will be charged $340 per half-acre of impervious area or fraction thereof. Appeals: Appeals must be filed on or before August 15th to receive a correction for the succeeding taxable year. Credits: Procedures for obtaining credits and rebates have yet to be finalized by the County, but are expected soon. Commercial property owners can receive reductions of up to 50 percent against the base stormwater fee they are charged. Residential property owners may obtain rebates for existing stormwater management expenses incurred on a first-come, first-serve basis.

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Baltimore City Fees: Baltimore City currently plans to begin charging its fees in October 2013. The annual fee will generally be invoiced to property owners in equal quarterly increments on the property’s City water bill- not the real estate tax bill. The City will charge an annualized flat fee of $40, $60 or $120 for single-family residential properties based on the amount of impervious surfaces they contain. An annualized fee of $60 per 1,050 square feet of impervious area would be charged for other properties in the City. Religious groups and organizations will be generally charged a rate of $12 per 1,050 square feet of impervious surface on an annualized basis. Appeals: Appeals must be filed within 30 days of the date of the bill the owner wishes to contest. Credits: Draft regulations, to be finalized shortly, provide that credits may be applied in amounts not to exceed 45 percent of the initial calculated fee. Credits will be available for those practices that improve the quality or reduce the quantity of stormwater discharged, for properties subject to a NPDES industrial stormwater permit, and for property that discharges stormwater directly to Baltimore Harbor. Exemptions are available for privately maintained streets open to the public, areas subject to impervious caps required by federal or state environmental authorities, areas where stormwater is discharged to the City’s wastewater system, and certain other properties. Baltimore County Fees: Baltimore County will include its charge to property owners on their July 2013 real property tax bills. The charges for residential property owners are $21, $32 or $39 per year. Institutional, non-residential property (i.e., private schools, churches, etc.) will be charged $20 annually per every 2,000 square feet of impervious surfaces. Other commercial and industrial property, including apartment complexes, will be charged $69 per every 2,000 square feet of impervious surface. Appeals: Appeals must be filed within 30 days of the date the owner receives the bill they wish to contest. Credits: Baltimore County is unique in that it is the only jurisdiction that automatically applies credits to the charges invoiced for nonresidential properties. However, it will only apply credits for those existing stormwater management features on which the County has information. Non-single-family residential property owners should be certain to research just what credits, if any, have been assigned to their properties since the County does not automatically include that information on its tax bills. Credits generated by recognized best management practices (“BMPs”) may not reduce the fee charged by more than 26 percent of the initial calculated rate. Carroll County Property owners in Carroll County will not be charged any new fees or charges for stormwater management. Carroll County is unique in that it has elected to fund its stormwater management program through the County’s existing real property taxes and appropriations process. Because this approach is arguably in contravention to the state law’s purpose to establish a separate, dedicated funding source it is uncertain how and when the State of Maryland might respond. 14

Charles County Fees: Charles County will include its charge to property owners on their July 2013 real property tax bills. The County has established a flat $43 fee per parcel of real property. This fee does not vary based on the amount of impervious surface the parcel contains or the property’s use. Charles County does provide exemptions from the fee that do not exist in the state law, including for properties subject to a NPDES industrial stormwater permit that includes certain treatment provisions, property owned by volunteer emergency medical services, property owned by the federal government and property owned by disabled veterans. Appeals: Appeals must be filed within 30 days of the date of the bill the owner wishes to contest. Credits: Credits are only available for non-residential properties that meet or exceed standards in the Maryland 2000 Stormwater Design Manual, up to 50 percent of the base fee. The County has not yet announced procedures regarding how these credits may be sought. Frederick County Fees: Frederick County has implemented a Program that charges a flat rate of one (1) cent ($0.01) per parcel. This charge will appear on the County’s July 2013 real property tax bills. It is unclear how the County anticipates fully funding work that may be required for its stormwater management program and whether or not a different fee structure may eventually be approved by the County Commissioners. Note that the City of Frederick has a pre-existing fee program dedicated to stormwater management so properties within the City limits will not be subject to the County Program once implemented. Appeals: An appeal must be filed on or before September 30th in order to contest the fee charged. Credits: While not practical given the current fee structure, procedures for obtaining credits have yet to be released by the County. Harford County Fees: Harford County will impose fees on its July 2013 real property tax bills. However, the County will only invoice property owners for 10 percent of the base stormwater fee otherwise due in 2013-14. The County charges an annual flat fee of $125 for any property with a residential use (except for apartment buildings) or agricultural use. A fee of $7 per 500 square feet of impervious area will be charged annually for any property with a business, commercial or industrial use, including apartment buildings, mobile home parks and separate common area parcels owned by condominium associations or HOAs. However, nonprofit owners of these properties will be charged a flat fee of $125. The fee will not apply to properties in Aberdeen, Bel Air, Havre de Grace or any other incorporated town or city as they are not subject to the County’s MS4 permit. Appeals: An appeal must be submitted on or before October 1st in order to receive a correction for the taxable year. Credits: Credits of up to 100% of the initial stormwater fee calculated for a property may be applied based on the use of BMPs. Regulations and procedures will be developed by the County to implement the credit program but have yet to be finalized and announced.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Howard County Fees: Howard County will not charge property owners any fee until it issues its January 2014 real property tax bills. A bill and resolution passed in March established an annual fee of $15 per 500 square feet of impervious area to be charged to every improved residential, commercial and industrial property in the County. However, a new bill was introduced on June 20th at the request of the County Executive that would reduce the fees charged to residential property owners to either $15, $45 or $90 per year depending on the property’s size. The County will only issue its charges to all property owners once its program has been finalized. Appeals: It is anticipated that appeals will need to be filed within 30 days of the date of the bill the owner wishes to contest. Credits: Under the current program, the County will allow a 50 percent reduction to the impervious area assessed for a property subject to a Site Development Plan that was filed with the County on or after January 1, 2003. A credit for the use of various specific stormwater treatment practices on properties will be available for properties not eligible for this automatic reduction, up to a maximum of 50 percent of the fee otherwise applicable. In addition, one-time reimbursements are available for investments in certain stormwater management practices implemented on properties where stormwater is not treated to the current State standards. These credits and rebates may be adjusted as the program is debated and finalized. Montgomery County Fees: Montgomery County will include an amount equal to 1/3 of the base stormwater fees otherwise due on its July 2013 real property tax bills. For 2013-2014, annual single-family residential rates will range from approximately $29 to $264. Multifamily, commercial and industrial properties will be charged annually based upon a rate of approximately $88 per 2,406 square feet of impervious area on the property. The bill provides that one-third of the fees otherwise calculated will be charged in the first year, two-thirds charged in the second year and the full amount charged in the third year. The Executive Regulation will also include a “tiered” cap for property owned by non-profit organizations. These three tiers, based on the actual amount of impervious surface on a property, will cap the amount the property owner may be charged. Montgomery County’s fees will not apply in the Cities of Rockville or Takoma Park as they have their own existing stormwater programs. The City of Gaithersburg has elected to have the County’s existing program apply within its boundaries. Appeals: An appeal must be filed no later than September 30th of the year that payment is due. Credits: Credits of up to 60 percent of the otherwise calculated fee are available for properties subject to the most-current environmental site design stormwater standards and 50 percent for those that utilize less-advanced stormwater BMPs. Montgomery County has released processes and forms associated with obtaining credits for both residential and non-residential properties. Note that credits must be applied for before September 30th of each tax year.

www.homebuilders.org

Prince George’s County Fees: Prince George’s County will include the stormwater fees on its July 2013 real property tax bills. However, the issuance of these bills will be delayed while the county’s program is finalized. Fees charged include a flat fee charged to each property, regardless of property use, plus a fee based on the County’s ERU. Prince George’s County charges residential property owners $33, $41 or $62 per year. Singlefamily residential properties are charged using a three-tier structure, all other properties are charged based on the amount of impervious surfaces on the property at a rate of $21 per every 2,465 square feet of impervious surfaces (plus a one-time base fee of $21). Appeals: An appeal must be filed no later than October 1st of the year the fee is assessed. Credits: Credits, often in the form of rebates, are available for improvements in quality and reduction in quantity of stormwater discharged from a property. Regulations and forms have been developed by the County to implement the credit program. ■

Trent Zivkovich helps lead Whiteford Taylor & Preston’s Environmental Law practice and is co-chair of its Clean Energy Technology Group. He is also a licensed professional geologist, a former Project Manager for a general contractor and land development firm, a former environmental consultant, and past chair of the Environmental Law Section of the Maryland State Bar Association. In his practice, he assists international, national and local businesses with evaluating real estate holdings, permits and authorizations, due diligence reviews, regulatory compliance and environmental management systems and advises clients in response to government investigation and enforcement efforts under federal Superfund, RCRA, Clean Water Act, Clean Air Act and various state voluntary cleanup and underground storage tank programs throughout the U.S. He can be reached at TZivkovich@wtplaw.com.

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

IDOTs Are Still Alive

Use Them For Deposit Mortgages By Edward J. Levin

uch has been written about the recent legislation which has seriously impaired the use of indemnity mortgages or indemnity deeds of trust (either of which is called an â&#x20AC;&#x153;IDOTâ&#x20AC;?) as financing devices. In fact, Senate Bill 1302 of the First Special Session of the 2012 Maryland General Assembly as modified by Senate Bill 436 and House Bill 1209 have put a major crimp in the use of IDOTs to secure guarantees in loan transactions. However, in at least some areas, the reports of the demise of the IDOT are greatly exaggerated.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

It is important to understand the focus of Senate Bill 1302. It provided that for a loan in the amount of $1 million or more (which amount has been increased to $3 million or more by the 2013 legislation), when an IDOT is used, the secured debt is deemed to be incurred if and to the same extent as debt is incurred on a guaranteed loan. Also, in these situations the recordation tax applies in the same manner as if the guarantor were primarily liable.

The Theory of IDOTs A law that, with its predecessor statutes, has been in the Maryland Code since 1939 provides that recordation tax is not due on an instrument of writing except to the extent that debt has been incurred under it. See §12105(f) of the Tax-Property Article of the Maryland Code (“TP”). The theory behind IDOTs is that the liability of the grantor of the IDOT is based on a guaranty of a loan made to a different entity (the borrower), but that at the time of recordation of the IDOT no indebtedness has been incurred by the grantor of the IDOT. This is because the guaranty provides that the guarantor is not liable unless and until the borrower defaults under the loan. Three published opinions of the Maryland Attorney General support this interpretation of TP §12105(f). TP §12105(f) applies in several different instances, including the following: 1. A “true indemnity” situation in which one party agrees to be liable to another party upon the occurrence or non-occurrence of a particular event and the first party secures its obligation by giving a mortgage or deed of trust (the IDOT) on its property to secure the agreement. An example of this type of IDOT is when a bank issues a letter of credit for a customer and the customer secures its reimbursement obligation with an IDOT. This type of IDOT may also exist in other contexts, as discussed below. 2. In a construction loan in which a lender agrees to make, for example, a $50 million loan to a borrower to construct a building, but the borrower only draws down $5 million at the time of the loan closing. Under TP §12-105(f) the borrower may pay recordation tax on the $5 million when the loan closes and then pay recordation taxes on the additional loan advances as they are made over time. 3. To a loan that is made to a person who does not own the real property that is security for the loan, if the loan is guaranteed by the landowner who encumbers its property with an IDOT to secure the guaranty. The requirement for this is that the guaranty may not be primary. Until the guarantor becomes primarily liable, the debt has not been incurred for purposes of TP §12-105(f). It is only the third type of IDOT that was affected by Senate Bill 1302 and the 2013 legislation in the manner stated above. In so limiting the reach of TP §12-105(f) to certain IDOTs, Senate Bill 1302 and the 2013 legislation had the effect of validating other types of IDOTs.

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An obvious example of the kind of IDOTs that have been endorsed by the General Assembly are those IDOTs that are issued in loans for less that $3 million, which should not be taxable when they are recorded.

Deposit Mortgages Another type of situation where IDOTs will not be affected by Senate Bill 1302 or the 2013 legislation involves deposits for the purchase of real property. Often, a developer or builder will contract to purchase real property and agree to make a cash deposit. The seller is interested in using that cash deposit immediately. That would be fine if the transaction closes as provided for in the purchase and sale agreement because then the seller would be entitled to the unrestricted use of the deposit. However, there is always the possibility that the conditions for closing may not occur or that the seller may default so that the buyer cannot or chooses not to close. Then the seller will be obligated to return the deposit. In order to account, for some issues that may arise, the parties may agree that the seller may take the deposit when it is tendered under two conditions. First, the seller must agree that if the transaction does not close because of a failure of a condition precedent or if the seller defaults, the seller is obligated to repay the deposit to the buyer. Also, the seller may agree to secure its repayment obligation with a mortgage or deed of trust. This security instrument will be an IDOT of the type described in the first example above. It does not involve a loan. Instead, it secures the repayment of a deposit under circumstances that may or may not occur. Therefore, the instrument should be recordable without the payment of recordation tax. Neither Senate Bill 1302 nor the 2013 legislation reaches this type of IDOT. The discussion above relates to the possibility that the seller defaults under the purchase and sale agreement. Consideration should be given to the possibility that the buyer defaults by not closing on the transaction even though all closing conditions have occurred. In that circumstance, the seller will find that there is an IDOT of record that should no longer encumber its property. If the buyer refuses to release the IDOT after request, it would be helpful to the seller if in the IDOT the seller was granted a power of attorney from the buyer to release the IDOT if the buyer refuses to do so under the facts described above. Then the seller, acting on behalf of the buyer, may file a release of record so that the IDOT will not show up as a lien when a title search is performed. n

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Why Marketing Goes Wrong So Often (and what to do about it) Does your message match your brand? By John Graham

arketing is a mystery — at least that’s the way it seems when compared with just about every other company function. There’s plenty of talk about “marketing,” but efforts to nail it down, specifically, usually end in an uncomfortable silence. It makes the point that it’s difficult to get your arms around marketing.

There are more “marketing geniuses” floating around than anyone can count. Everyone has an opinion as to what’s needed, what works and what doesn’t. Whatever marketing activities a company implements, there will always be those who rush forward with criticisms and complaints. Such turmoil may help explain why so many companies harbor serious doubts about marketing, others keep it on a short leash and some solve the problem by turning it into a glorified “gofer” function. As it turns out, demystifying marketing is rather easy. After peeling away the nutty (and usually meaningless) jargon, marketing is simply aligning an organization’s products and services so customers come to identify with a brand. Unfortunately, much of what passes as “marketing” fails to pass the test.

To better understand why marketing goes wrong and what can be done about it, here are seven common pitfalls, obstacles and stumbling blocks:

1. Management believes it knows marketing It’s not uncommon for the person in charge of marketing to report to someone who “loves marketing” and has strong opinions, but little or no marketing knowledge. This is often the same person who says, “I seem to have a flair for marketing.” In such a situation, the person charged with the marketing responsibilities has two options: either bang heads or cave-in to the pressure. An annual marketing plan that’s approved by management can help avoid such difficult and, frankly, depressing situations. Without that, there’s only chaos and unacceptable results.

2. Marketers make a splash rather than a difference While management may be a marketing culprit, marketers can be to blame, as well. Making a quick “impression” is often the goal. As one marketing manager said the first week on the job, “We’ll be rolling out a new logo in a couple of months.” The logo remained, while the marketing manager didn’t. Soon after arriving at Radio Shack as EVP and CMO, Lee Applbaum kicked off a campaign to rebrand the lack luster performance of this venerable company. It would now be known simply as “The Shack.” That didn’t last long and neither did Applbaum. Unfazed by reality, his final Tweet, as reported by the Dallas Business Journal, said it all, “Been a great 3.5 years @RadioShack. Hopeful I had a positive impact on the brand. On to the next one.” Rather than listening to what a marketer says, it’s better to ask questions. For example, “What would be your plan for the first 90 days on the job?”

3. Lack of discipline It’s easy for marketing to get out of hand, particularly when there are so many “great ideas” flying around everyday. It takes a very strong person to listen and then say “no” to anything that’s off plan. Making exceptions and giving in can spell trouble. The best way to stand firm is to have carefully developed, absolutely clear and well-documented objectives.

4. Failure to engage customers and prospects Although it’s difficult to believe, the tendency to equate “selling” with “telling” persists. It’s hard to root it out of our thinking, particularly when anything less direct seems wimpish. Yet, Lincoln Motor Company’s recent 60-second TV spot got it right by abandoning “telling,” starting with its “Steer the Script” title. They invited people to Tweet about their favorite road trip, and the spot featured excerpts from fun episodes, not the car. It ended this way: “The story starts with you because luxury always should.” And it isn’t just “luxury” that should start there. That’s where all marketing should begin.

5. Unrealistic budget While there are always ways to improve marketing efficiency without damaging effectiveness, all-too-often companies expect those in marketing to produce extraordinary results with an underfunded budget. There’s nothing wrong with a lean budget, but one that’s non existent simply won’t work. Today, marketing tools cost money and not to take advantage of the latest technology is a prescription for failure if a company wants results to match its expectations. And, while junior marketers can add value, it takes a senior, experienced professional to steer the ship in the right direction.

6. Failure to think through the implications Ron Johnson created Apple’s hugely successful Apple’s retail stores and then moved on to tackle JCPenney’s faltering brand. Soon after arriving, he rolled out a massive TV marketing campaign that succeeded in thoroughly confusing consumers who had been accustomed to 400 “sales” a year. When Women’s Wear Daily asked him how he was going to correct the problem, he told the interviewer that the marketing “overreached,” adding, “It didn’t do the hard work. People found it entertaining but it wasn’t doing what we needed to do to build our business.” Then he noted, “There was too much TV and not enough print.”If you wonder what those words mean, here’s the translation of the jargon: he roared in as CEO, shot from the hip with “a great idea” and when it failed, he came up with an excuse and flipped back to JCP’s traditional print promotion strategy, which isn’t doing the job, either. Failure to think through marketing initiatives follows one path: justification for failure and repeating the cycle.

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7. Keeping marketing too narrowly focused Although bouncing too many marketing activities at one time is possible, there’s a seductive tendency to do just the opposite, to lighten the load by peeling away activities or stripping them down so they’re only marginally effective. Marketing success today moves in many directions. It depends on connecting with customers and prospects in all the ways that work for them. Inevitably, this means marketing programs must be multi-faceted. While marketers often speak rather glibly about “integrated marketing communications,” walking the walk isn’t so easy. It’s a daunting task to integrate social media, media advertising, public and media relations, eMarketing and sales promotion so they connect with customers and prospects, and even more demanding to do it consistently so the effort enhances the brand.

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If there’s a clear thread running through these seven ways marketing goes wrong, it’s that marketing is more than great ideas, innovative events or cutting edge techniques. At its core, marketing success depends on an understanding of prospects and customers, and making something happen to turn one into the other. To accomplish this objective takes vision, innovative thought and persistence. n

John R. Graham of GrahamComm is a marketing and sales consultant and business writer. He publishes a free monthly eNewsletter, “No Nonsense Marketing & Sales.” Contact him at johnrg31@me.com, 617-774-9759 or johnrgraham.com.

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Home Four Our Troops Dedication Bob Ward Finishes a Beautiful Home for a Hero

n March 23, 2013, with an American Flag waving in the breeze, Bob Ward Companies turned the keys for a new home over to SSG Kelly Keck. While serving his country in Afghanistan, Keck lost his leg to a land mine. Sometime during the two years he was in and out of Walter Reed Army Hospital, Keck met another soldier that told him about the Homes for Our Troops Program. He applied and was accepted. Shortly there after, Bob Ward Companies was selected as the builder to construct the new custom designed home. During the entire process, the list of volunteers and donations continued to grow. “It’s been a great experience for everyone involved” said Joe Gregory, Bob Ward VP of Construction. “It’s great to see our subcontractors and suppliers get involved to help us build a home for a true American HERO,” Added Gregory. The home is a ranch style floor plan complete with wheel chair access doorways and a wide open floor plan. The kitchen is built to

ADHD standards, with roll under area so a wheel chair can get closer to the cabinets. The shower is huge and built to accommodate a wheel chair if necessary. All of the rooms are large enough and can easier be accessed by a wheel chair plus there is plenty of room to turn around. Bob Ward Companies is proud to announce that they received HFOT’s Builder of the Year award for this house for having the most donations and best volunteer support. n

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

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JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Getting Financing for Your Project Maximize Your Lender Relationship

oday’s changing economic environment makes it more important than ever that builders and developers make their project funding proposals as attractive to lenders as possible. To do so, builders must pay close attention to preparation and documentation, presentation and maximizing the lender relationship.

Preparation and Documentation Ask your lender what he or she wants to see in your loan proposal. Too often, builders prepare a loan proposal after consulting only briefly with their lender. It is usually better to start by asking exactly what your lender wants. Simply asking can give you an insight into what your proposal should look like before you spend time and money preparing one. In order to better prepare your loan package, be sure to listen carefully for areas that the lender emphasizes. Carefully produce the required documents. In addition to financial information and the loan applicant’s track record, most loan requests must include detailed market studies, pro formas and documentation that all regulatory approvals have been obtained, environmental concerns have been addressed and impact fees have been paid. The standard documents usually required for housing production loans are listed below.

Project Documents: • Location and description • Survey • Appraisal • Title report • Market study • Project feasibility study • Pro forma analysis • Site plan • House plans • Estimate of project costs • Development and construction schedules • Documentation of zoning approval • Proof of payment of impact fees • Documentation on infrastructure agreements

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Personal and Company Documents: • Current financial statements • Company income tax statements • Personal income tax statements • Documentation of personal collateral • Partnership or joint venture contracts • Personal guarantee • Company track record • Company structure • Personal and business references Be sure to document costs. Most lenders want to see a detailed cost breakdown. In particular, lenders want to see that your cost estimates are in line with their other projects to calm fears that your project will come in over budget and they will have to come up with more money at the last minute to complete it. Also, lenders want to see whether they stand a reasonable chance of breaking even if they are forced to foreclose on a loan and turn the project over to another builder. Provide additional favorable information. Lenders will tell you what they want to see if you ask them, but providing additional information can really make a positive impression. This is particularly important if there is an area where you excel. For instance, if you have strong finances, you should provide audited financial statements for your company and your corporate and personal tax returns. If you have access to market research, you should provide additional information on the market and the basis for your sales price and absorption rate assumptions.

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Present a simple, concise and professional proposal. There is no substitute for a polishedlooking, focused and clear proposal. Presentation Present a simple, concise and professional proposal. There is no substitute for a polished-looking, focused and clear proposal. That may mean investing in desktop publishing software or learning how to use your word-processing software more effectively. It also helps to create a cover page and an executive summary. In your presentation to the lender, include information that supports important points or assumptions in your proposal. Be sure to provide summary spreadsheets of profit and loss statements, cost breakdowns and anticipated cash flows, but also be sure to append full annotations for each line item. Let your lender know about your experience in the building industry. Lenders want to know your track record. A primary reason that a lender may be unwilling to make a housing production loan is that he or she is not sure if the builder or developer has the experience or financial capacity necessary to complete the project and repay the loan. Provide documentation on the history of your company, highlighting its successes and financial condition. Many lenders require end-of-year company balance sheets and personal tax returns for at least the past two years. Going beyond just the numbers by providing a prospectus that includes photographs of completed projects and a statement of your companyâ&#x20AC;&#x2122;s goals and philosophy shows that you are a builder with a vision and an ability to plan and market yourself. Even if you have been doing business with your lender for a long time, he or she may have to present your case to new management, a new bank holding company, or bank examiners who are unfamiliar with you and your company. Convince your lender that you can complete the project. Many

builders can convince their lender that it is possible to start a project, but it still takes skill to convince lenders that the project will be completed as intended. Make sure that your proposal and presentation document the construction schedule for the project, the anticipated schedule of draws and the anticipated repayment schedule based on reasonable and well-documented sales price and absorption-rate assumptions. Be flexible and resourceful in making your loan request more attractive. If the lender is reluctant to fund your project based on the original package, offer changes designed to address his or her concerns and make the deal more attractive. If possible, provide more up-front cash. Try shortening the term of the loan that you request. If you are developing land, you may need to secure lot purchase contracts to generate lender interest. Offer a strong guarantor or a second source of repayment. Another approach is to seek sources of community or economic development funds to bolster the projectâ&#x20AC;&#x2122;s financial stability. Consider loan participation arrangements. A lending institution may be unable to provide full funding because of restrictions on capital. Moreover, insured institutions that are working out their own financial difficulties often are limited by operating restrictions and small community lenders have legal lending limits. Sometimes the loan is too large or the borrower or the borrowerâ&#x20AC;&#x2122;s partner or affiliate already has a loan outstanding with the lender. If the loan amount or project is too large and there is a loans-to-one borrower problem, the lender may be able to work with other financial institutions on a participation arrangement. Be prepared to pursue alternatives if it becomes clear that the lender is not interested in your project. Do not be discouraged by lenders who ask for a good deal of documentation and paperwork on your loan request. In fact, you should expect it. So, if a lender shows a real interest in doing business with you, but asks for a great deal of documentation, try to provide all of it and more. See the process through to its conclusion. However, there is no point in pleading with a lender that is not interested in lending either to you or to home builders in general. Warning signs include unreturned telephone calls and a request for you to submit a worst-case scenario appraisal. If a lender asks you to justify a project based on its value if the market collapses, the lender probably is not interested in financing your project.

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Relationships with Lenders Try to cultivate lasting relationships with your lenders. It never hurts to treat each lender as if he or she is someone with whom you hope to develop a long-term relationship. Treat your lenders with respect and try to bring as much business their way as possible. For instance, if you get a land acquisition or development loan, it will help to get your construction loan and the mortgage financing for your customers all from the same lender. Do not keep secrets; get your lender involved in problems at the early stages. Hiding problems from your lender is not a good strategy for getting loans. Be absolutely truthful about your past successes and failures, your personal finances and your company’s current financial condition. Also, alert your lender to any potential problem at the first sign of trouble. Problems in keeping to a proposed schedule or meeting the terms of your contract are sometimes unavoidable and the earlier that your lender knows of a problem, the easier it is for you to work together toward a solution. Also, remember you are in the home building industry for the long haul and your reputation for trustworthiness is important and will follow you in future efforts to secure housing production loans.

Consider working with more than one financial institution, but keep your lender informed. Although you may have developed very strong ties with one lender, it may be best not to depend exclusively on one lending institution. The bank or thrift where you do business may be under different ownership or management or even out of business next year. Cultivating lasting relationships with lenders takes time, so it’s best to begin to develop new relationships before it is a financial necessity. If you decide to pursue relationships with other lenders, explain to your lender why you are developing ties to others and confirm that you still plan to conduct most of your business at his or her institution. n

2013 HBAM Membership Drive You are the Link to help us Build our Future Call Felicia at 410-265-7400, ext. 115

TEAMS NEEDED! Form a team to work together to call on prospective new members and talk about the benefits of membership in HBAM! The teams and members will compete for prizes and the honor of knowing that they have shared their association with others in the industry and helped make HBAM better. September 24, 2013 – Rally September 26, 2013 – Telethon www.homebuilders.org/page/memberdrive/ Send the Message of Membership • Increase our strength in Annapolis • Grow our Networking • Cultivate Relationships • Raise Professional Awareness

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JULY/AUGUST 2013 MID-ATLANTIC BUILDER

The Maryland Residential Green Building Council is the state’s first residential green building program to certify local builders, remodelers and developers using the ANSI certified National Green Building Standard. As the premier provider of information and resources related to green buildings, the MRGBC serves as a central hub for consumers going “green”. The MRGBC educates decision makers on the latest green building principals, trends and technologies, advocates before local elected officials for increased incentives for green buildings, and promotes “green” products through extensive marketing, sales training and special events for consumers. Join the council today by visiting www.GreenHomeBuilder.org

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Mid-Atlantic

Remodeler A supplement to Mid-Atlantic Builder

HBAM Remodelers Council Award of Excellence Whole House $600,000 & Under Doug Pruett Construction, Arnold Waterfront

Mid-Atlantic

Remodeler

A supplement to Mid-Atlantic Builder

2013 HBAM Remodelers Tim Ellis, LEED AP, CPE, CGR, CGP President

Board of Directors Guy Caiazzo Taylor Classen Cheryl Crowther Arif Durani Steve Gilman Bill James Danny Kalmus Doug Kelly Jim Long Donald Lynch, Jr. Ryan McGinn

Chris Moline Bob Myers Michael Owings Jennifer Purdy Bill Rauser Joe Smith Gregory Wall Bob Weickgenannt Howard Warfield

PAST Presidents Bill Rauser John Martindale Dave Chmura Michael Owings

Donald F. Lynch, Jr. Guy Caiazzo Taylor Classen Joe Smith

2013 SPONSORs Members do business with members Presenting Members

before&after This property was purchased with the intent of using it as a temporary home for about 5 years, then tearing it down and rebuilding a permanent home. Through collaboration between the contractor and the owners, however, it was decided to restore it to its original 1920’s architectural features, but bring the interior up to modern standards. This meant maximizing space, amenities and features while maintaining charm, all within the original footprint of this waterfront home. A major defined goal for this project was to preserve the 1920’s beachfront cottage while achieving modern living standards, enhance functionality and boost efficiency. The goal was met. n

ChesapeakeHome Magazine

KC Company/Pella Windows

Why join HBAM Remodelers? Member Benefits

John H. Myers & Son

Susquehanna Bank

HBAM Remodelers offers many benefits to its members. Remodelers benefit from a variety of educational, mentoring and networking opportunities. In addition, the HBAM Remodeler’s serves to improve the quality of the industry and its members through these programs. By promoting certification programs to consumers, members of the council are sought after for their strong professional and ethical principles.

News & Information Saratoga Insurance

T.W. Perry

Contact Felicia Fleming at 410-265-7400, ext. 115 about 2013 Sponsorship Opportunities

Ready to Join? www.mdremodelers.org The fee is $65.00 per year. For additional information on the HBAM Remodelers Council, contact Felicia Fleming at felicia@homebuilders.org or 410-265-7400, ext. 115.

National: Members of the Council receive a free subscription to Professional Remodeler magazine. Each issue focuses on practical business insights from the country’s leading remodelers. Members also receive NAHB Renews, a monthly e-newsletter about national news that affects our industry. Regional: Members of the Council receive a free subscription to ChesapeakeHome Magazine and are offered special advertising opportunities designed to help them reach upscale homeowners. Local: The council is featured in each issue of HomeFront, HBAM’s monthly enewsletter to promote its members, programs and events. Mid-Atlantic Remodeler is included in each issue of Mid-Atlantic Builder magazine.

MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder July/AUgust 2013 www.homebuilders.org

president’smessage

events

Focus on Family

The HBAM Remodelers would like to invite you to share your Remodeling projects with us and to participate in this year’s Remodeling Award of Excellence program.

The construction/remodeling industry is founded on hard work and dedication.

As an industry we need to work hard at our business to diagnose the unique remodeling project needs of home structures and commercial facilities alike. In the remodeling industry, professional conduct, continuing education and training must be maintained. Good workmanship, reputation, integrity and durability of materials and equipment define remodeling contractor industry leaders. Our duty as construction business owners is to ensure clients never experience a poorly done job while having remodeling projects completed on time. The contracting/remodeling business is fluid. There are consequences that come with bad service. We work erratic schedules. Remodeling projects can be very complex and extensive based on weather and other complications. We must cooperate with diverse contractors and sub-contractors. We must maintain a good reputation. Although the construction/remodeling industry can be tremendously challenging at times, we must not neglect or forget why we work so hard – for our families. Taken time out from running a business to enjoy family and provide them a solid family foundation is part of being a responsible family head and true leader. Connecting and reconnecting with family can relieve everyday frustration while embracing companionship to discover better ways of living. Spending time with family will improve and strengthen morale throughout social interactions. You and your family will become confident in decision-making processes because you are functioning as a team. When you have a family, you need to make time for them and be supportive to sustain a healthy family interaction.

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Use these family values to carry out your business honestly and work hard to meet objectives. Sound functioning of family will help us all strengthen the fabric of our communities. The more quality time we spend with our families, the better our society operates. Take vacations with your family. Schedule weekly family dinnertimes. Let your family know how much you appreciate them. Give back to the community together. Build on the rock, the solid foundation of family, to make life better for your family , for the community. Family time is time well spent.

Tim Ellis HBAM Remodelers President

All Award of Excellence winners will be announced at the HBAM Remodeling Awards Ceremony on November 7, 2013. Mark your calendars!

Important Dates January 1, 2012–June 30, 2013 All remodeling projects entered in the Award of Excellence Program must have been completed during this period July 31, 2013 Project registration forms due and nomination deadline for all contests (No cancellations or refunds after this date) August 30, 2013 Project entry submission binder deadline for: Award of Excellence packet submittals due. Week of September 23rd Onsite project judging November 7, 2013 HBAM Remodelers Award of Excellence Ceremony and Dinner We encourage you to submit a project for this program regardless of size. Sometimes a small addition or remodeling project can take more energy than a large one. We look forward to receiving your entries. Should you have any questions or would like a packet mailed to you please contact Felicia Fleming 410-265-7400 ext: 115.

July/AUgust 2013 MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder

Builder Mart 2014 Together Weâ&#x20AC;&#x2122;ll Build the Future Wednesday, March 19, 2014

Donâ&#x20AC;&#x2122;t miss your chance to reserve the best booth space. Visit the Builder Mart 2014 Booth in the Bull Roast area or contact Chris Baughan at 410-265-7400, ext. 121 or chris@homebuilders.org. 32

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MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder July/AUgust 2013 www.homebuilders.org

Evening at the Yard HBAM members enjoy a bullroast before the Orioleâ&#x20AC;&#x2122;s game.

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JULY/AUGUST 2013 MID-ATLANTIC BUILDER

NAHBâ&#x20AC;&#x2122;s Value for State and Local HBAs The National Association of Home Builders Umbrella Enhances vocal services. By Jerry Howard CEO, National Association of Home Builders

he National Association of Home Builders Senior Officers and I are often asked to define the value that our national association brings to the table for our state and local home builders associations. I’m grateful for the opportunity to address that subject, because the support that NAHB provides to its local affiliates is really a key piece of the equation in terms of quantifying the total value proposition of every HBA membership. But where should I begin? • I could focus on the hundreds of top-notch educational programs and professional designation opportunities that NAHB provides to our locals so that they can make world-class instructors and courses both geographically and financially accessible to members. • I could talk about NAHB’s local economic forecasting, which we offer to HBAs at a steep discount along with the analysis of top PhD economists. • Or, I could discuss the significant support that NAHB provides for local membership recruiting efforts to ensure that every HBA represents the widest possible network of housing professionals. • Then again, I could focus on the regular assistance that our media relations team provides to local associations and their public spokespersons. I’m going to zero-in on two crucial areas of NAHB support in the advocacy arena that probably deserve greater recognition at the local level.

Local Code Adoption Process First is the local building code adoption process, which dictates the rules by which every builder must construct homes, every day of the week. Keeping building codes flexible, cost-effective and product-neutral is a top NAHB priority, which is why every year, NAHB analyzes thousands of proposed codes and prevents requirements that could add tens of thousands of dollars to the cost of building a new home without any appreciable benefit to buyers. Undoubtedly, the complex and time-consuming work that our volunteer members and staff put into reviewing the multitude of proposed code changes and attending ICC hearings as part of each development cycle is something that tremendously benefits all of our members. But where the rubber really meets the road for our local HBAs is when their individual jurisdiction sets out to update its building codes through adoption of all or part of the latest national building codes. That’s where NAHB’s assistance makes all the difference at the grassroots level. (And no, you don’t have to be a builder for this to matter to you. Because local building code decisions affect the kind, quality and affordability of homes that are built in a given market, they impact everyone who provides services and products to builders.) NAHB’s code experts provide our HBAs with detailed toolkits full of resources for amending I-Codes as they are adopted at the state or local level. To see what I’m talking about, take a look at the 2012 I-Codes Adoption Kit on NAHB.org. Mandated Fire Sprinklers One of the best examples of how NAHB supports local HBA efforts to adopt workable building codes pertains to mandated fire sprinklers. Since a requirement for residential fire sprinklers was adopted in the 2009 and 2012 International Residential Code, NAHB’s Construction, Codes and Standards staff has worked with state and local associations to ensure that fire sprinklers remain voluntary elements in new homes (at the discretion of the home buyer) in states across the country. In those states where sprinkler mandates have been defeated, the savings amounts to an average of $6,316 per home. Information and supporting documentation to amend residential sprinklers requirements in the latest code can be found at: www.nahb.org/sprinklers.

2012 IECC Another current example of NAHB’s support on local building codes pertains to the 2012 International Energy Conservation Code (IECC). Bringing the code up the 2012 version would be tremendously difficult and expensive in states that have not updated their codes in recent years. While states often amend codes to fit their specific needs, the 2012 version adds considerably to cost, is less flexible, favors certain products and produces questionable energy savings in several areas. NAHB’s successful effort to amend or prevent adoption of this code in several states has been a victory for sensible, flexible, cost-effective regulation, as recent research has shown that it costs $7,034 more to build a home to the 2012 IECC than to the 2006 IECC. For states that may be contemplating a switch to the 2012 IECC, NAHB has proposed several amendments that HBAs can push in order to make the code more cost effective – all of which are available via our 2012 Energy Code Adoption Action Kit.

Legal Support/Local Ordinance Reviews A second area in which NAHB provides direct assistance to local and state HBAs is via our legal support programs, which include our Legal Action Fund,Amicus Brief Program and Legal Ordinance Review Program, the latter of which I’d like to tell you about here. Our affiliated HBAs frequently find themselves battling unwelcome local land use ordinances that cost our members time, money and the ability to build new projects. NAHB helps in these situations by offering free reviews of local ordinances and state legislation pertaining to planning, zoning, growth controls, development exactions, property rights and more. Specifically, our legal experts examine these ordinances’ legal sufficiency, including constitutional and statutory requirements, in order to help HBAs frame an appropriate response to their state and local governments. Square Footage Caps One example of the kind of ordinance that we’ve helped our locals combat is maximum square footage caps. While ordinances restricting large homes (in the 6,000-squarefoot range) are not unusual, NAHB has received several inquiries from members who are facing much smaller caps, such as 3,000 square feet. NAHB data shows that this is not much larger than the average square footage of a typical new single-family home. While such caps on home sizes can be difficult to challenge, NAHB legal staff provides background information to help determine the source of a locality’s authority to enact the ordinance, due process and other concerns.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Historic Overlay Districts Historic overlay districts are another example of zoning regulations that our locals may ask us to help combat. These are often used by a city council or county commission to incorporate restrictions on new development, with the stated goal of preserving the historic character of a neighborhood. In such cases, NAHB legal staff can examine the ordinance for valid enabling and inherent authority, due process and spot zoning issues.

NAHB’s code experts provide our HBAs with detailed toolkits full of resources for amending I-Codes as they are adopted at the state or local level.

NAHB Advocacy: Leveling the Playing Field for Builders and Their Associates I want to emphasize that the above examples are only the tip of the iceberg when it comes to advocacy resources and assistance that NAHB routinely provides to our state and local associations. Our integrated advocacy team including lobbyists, economists, communications professionals, and legal, regulatory and housing policy experts is constantly working to level the playing field and improve the business environment on behalf of all our members. In the current Congress, there is no shortage of landmark, housing-related legislation being debated that could essentially change the DNA of home building for generations to come -- and I can’t overstate the difference that our national association’s engagement in these matters makes to home builders and their associates nationwide. For example, in the ongoing debate over immigration reform, we are leading the charge to ensure workable and fair employer verification requirements and the creation of an appropriate guest worker program that meets the needs of our industry. In negotiations regarding the future of our nation’s housing finance system, we are standing tall on the need to maintain an adequate and affordable flow of credit for home mortgages and the absolute necessity of ensuring a strong federal backstop for housing finance. And, as lawmakers float various proposals on tax reform, ours is one of the strongest voices defending the mortgage interest deduction and other housing-related incentives in the U.S. tax code. The list goes on, but the bottom line is that NAHB’s advocacy efforts – whether on the local or national front -- greatly enhance the value of your association membership, and have a very positive impact on our members’ businesses. n

Visit www.nahb.org for more details on the services they provide.

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JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Will Inaccurate Appraisals Slow Down the Recovery? Accurate valuation is key to stability Appraisal Issues

he ongoing turmoil affecting the housing and credit markets has brought greater focus to the importance of fair and accurate appraisals. In response to criticism that lax appraisals contributed to the financial crisis, tighter appraisal policies have been implemented by lenders, the Federal Housing Administration, Fannie Mae and Freddie Mac (the Enterprises). However, the pendulum has now swung too far and reports of homes failing to appraise at the sale price, or even construction cost, have become prevalent. Inaccurate appraisals remain a major impediment to the housing recovery, and therefore, finding solutions to these problems continues to be a major priority for the National Association of Home Builders. Our goal is to establish an appraisal system that produces accurate values through all phases of the housing cycle.

Background The U.S. housing finance system is operating under unprecedented uncertainty. A multitude of legislative and regulatory measures has been launched in response to the severe dislocations in financial markets here and abroad that were the result of extreme excesses in the mortgage credit process. However, there has been little progress in pursuing comprehensive housing finance reform, and the profusion of uncoordinated and sometimes conflicting piecemeal remedies has only intensified the housing market malaise. At the center of this ongoing crisis in confidence is an appraisal system that remains dysfunctional and which is a major impediment to reestablishing a vibrant and stable housing finance framework. NAHB believes that fundamental appraisal system reform must be a principal element of efforts to rebuild the nation’s housing finance system. The current residential appraisal system is impaired due to inconsistent and conflicting standards and guidance; inadequate and uneven oversight and enforcement; a shortage of qualified and experienced residential appraisers; and the absence of a robust and standardized data system. NAHB believes these problems must be addressed in order to restore confidence in the residential real estate market and to establish a foundation for sustainable growth of the U.S. economy. This can only be accomplished through sound valuation practices, policy, and procedures that produce more credible valuations under all economic circumstances.

NAHB Actions NAHB has taken a number of actions to raise awareness and address the problems of restrictive appraisals on the housing industry. Some of these efforts are highlighted below.

Appraisal Working Group In 2012, NAHB formed an Appraisal Working Group, consisting of home builders and representatives from the financial and appraisal sectors. The collaboration produced A Comprehensive Blueprint for Residential Appraisal Reform, a white paper with specific recommendations. In this process, there was extensive dialogue with all stakeholders in the residential appraisal process. The AWG through the white paper addressed the need for reform in four areas: • Regulatory Framework and Oversight • Data & Technology • Professional Standards • Practice, Process and Procedures

A Comprehensive Blueprint For Residential Appraisal Reform Appraisal The appraisal white paper was reviewed at the 2013 IBS and is being used to pursue appraisal changes in Congress and the regulatory arenas. NAHB’s A Comprehensive Blueprint for Residential Appraisal Reform contains the following recommendations: • S treamline and coordinate the current regulatory framework and devote adequate resources to ensure effective oversight and enforcement. • Create a real estate data superhighway with a national real property registry and supporting networks. • R eaffirm and streamline the key residential appraisal principles contained in the Uniform Standards of Professional Appraisal Practice. •E stablish uniform credentialing standards that are specific to each area of residential appraisal practice and create clear education and career paths for residential appraisers. • Establish a single, consistent set of rules and guidelines for residential appraisals. • Urge residential appraisers to consider all three valuation approaches—cost, income and sales comparison-- in estimating values, and ask them to report a range rather than a single point of value. • S et standards and processes to ensure the engagement of the best residential appraiser for the assignment. •E stablish workable procedures for expedited appeals of inaccurate or faulty residential appraisals.

NAHB’s 2013 Appraisal Action Plan The AWG identified key areas of the white paper as priorities during 2013, which are listed below: • I ndustry & Stakeholder Engagement – Continue to nurture NAHB’s inroads within the appraisal industry and increase NAHB member appraisal education. •A ppraisal Standards Impeding Appraisers – Identify areas where appraisal standards and requirements impede appraisers. •N ew Construction Data – Continue to explore opportunities to move forward efforts to improve the quantity and quality of data for new construction. •O versight Improvement and Standardization – Leverage the Dodd-Frank Act’s requirements to improve state level oversight and standardization. •D ispute Resolution Process – Support the development of a prompt and effective dispute resolution process. •R equirements for Appraisers of New Home Construction Advocate implementation of higher training and experience requirements for appraisers of new home construction. •V aluation Methodologies – Continue promotion of utilization of all methodologies as appropriate. • Member Education and Awareness – Work with HBAs to organize meetings involving builders and other industry stakeholders.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Ongoing Interaction with Appraisal Organizations NAHB is a member of The Appraisal Foundation Advisory Council and actively participates in meetings of The Appraisal Foundation and its boards. TAFAC met in Washington, D.C. in February of this year where NAHB staff delivered a presentation on the recently released white paper. The Appraisal Foundation’s Appraisal Practices Board announced on April 26 that the board decided to address the valuation of new construction and will soon issue a scope of work document and call for subject matter experts. NAHB staff also attended the Collateral Risk Network’s most recent quarterly meeting which is attended by chief appraisers, collateral risk managers, regulators, and valuation experts who are focused on resolving appraisal challenges. The CRN is represented by lending institutions, Wall Street, Fannie Mae, Freddie Mac, Veteran’s Administration, FHA and appraisers. During the April CRN meeting, NAHB Housing Finance Committee Chairman Randy Noel and staff participated in the CRN’s beginning efforts to update current appraisal forms so they more accurately compile the information that industry stakeholders require to make sound collateral risk decisions. Additionally NAHB staff participated in the Association of Appraisal Regulatory Officials spring conference. This conference is the best opportunity for NAHB to engage with state regulators to understand the challenges they face at the state level and to identify best practices as NAHB works to improve state oversight and standardization.

Our goal is to establish an appraisal system that produces accurate values through all phases of the housing cycle. Appraisal Survey NAHB’s recent appraisal survey indicates that over 50 percent of members are still experiencing residential appraisals below their cost of production during the last 12 months. This is an improvement over previous surveys but still highlights that inaccurate appraisals remain a major impediment to the flow of mortgage credit and the housing recovery. NAHB remains committed to residential appraisal reform, and NAHB’s appraisal white paper A Comprehensive Blueprint For Residential Appraisal Reform provides the framework as we continue to work with industry stakeholders and regulators to adopt prudent and necessary reform to ensure accurate appraisals.

Working with HBAs NAHB continues to work with HBAs to better understand local appraisal issues and provide their members tips on improving their appraisal experience. On April 15, NAHB staff and NAHB’s appraisal consultant met with a group of local industry stakeholders, including home builders, appraisers, Realtors, bankers and regulators to discuss local appraisal issues and a recent state level legislative effort regarding appraisal management companies enforcement that could become a best practice for other state regulators. n

NAHB has developed several appraisal resources to assist members. These can be accessed at www.nahb.org/appraisals.

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JULY/AUGUST 2013 MID-ATLANTIC BUILDER

MID-ATLANTIC BUILDER JULY/AUGUST 2013

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BY CHRISTIAN D. MALESIC, MBA, IOM, CGR, CAPS

hen you are handed a business card of a professional with letters after their name, what thought comes to mind? That of the infamous billionaire Thurston Howell III, the famous character from TV sitcom Gilligan’s Island, who was tactless, blameful, pretentious and lazy? Or, the customer-serving, career-mind, educated professional who wants to do the job right the first time to earn your praise and your smile? Letters after names mean things. They should be a prerequisite when choosing your next professional.

The Difference is in the Details Letters after names are officially called “post-nominal letters.” They can be earned for a number of accomplishments. This article focuses primarily on those in and around construction and the business of construction. Letters can be earned for academic education, accreditation, certification, designation and / or recognition. Though the result is the same – the professional can place some letters after their name – the prestigiousness of the accomplishments are not the same. There are clear levels of accomplishments which are greater than others. Said plainly, some letters mean a lot more than others. Academic Education – Though a student should be very proud when they earn their Certificate degree, Associate degree, or Bachelor degree, these degrees do not earn the student post-nominal letters. Earning a graduate degree, either a Master or Doctorate, is considered the highest and most prestigious level of professional accomplishment; so, not only does it come with letters, they are the most prestigious of all letters. As a rule, if someone has a Master and Doctorate in the same discipline, they only display the highest level achieved. Thus, when Mr. Makyo Feelgood earns his Bachelor degree in finance, he remains “Mr. Makyo Feelgood”. When he goes on to earn his Master of Business Administration (MBA), he becomes “Mr. Makyo Feelgood, MBA”. And, when he reaches the pinnacle of academia by earning his Doctorate of Business Administration (DBA), he not only replaces his post-nominal letters (replaces MBA with DBA); but, we refer to him as “Doctor”. Thus, “Dr. Makyo Feelgood, DBA”. Interestingly enough, when the academic disciplines are different, both are listed. Therefore, if instead of earning a DBA he earned a PhD in economics, he would have become “Dr. Makyo Feelgood, PhD, MBA”. Accreditation and Certiﬁcation – Generally speaking, these mean the same thing. Usually, a training or education program is ‘accredited’ by an outside government or accrediting agency and then those who complete the program are ‘certified’. Though not as prestigious as academic education, certified programs require the professional to have a number of years of experience in the profession, pass a comprehensive test and complete continuous education to maintain their certification.

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Designation – Though training is part of earning a designation and sometimes, so is even passing a comprehensive test, a test is not required of designation programs nor is continuous education or experience. Therefore, it is an accomplishment worthy of letters; but, at a lower level than accreditation or certification. Recognition – Still worthy of post-nominal letters, recognition is the least prestigious of the four categories. It may be earned through training or simply through reaching a professional career milestone that is often not reach by others in the same profession. Testing, experience and continuous education, then, are not involved.

Order Means Everything When a professional has earned more than one set of post-nominal letters, it is appropriate to display each set of letters after their name. This is done in descending order with the most prestigious letters being first (closest to the name) followed by a comma then the next set of letters and so on. Thus, when Snoopy earns his Doctorate degree in engineering, he becomes “Joe Cool, PhD”. When he passes his first set of exams on the way to becoming a Professional Engineer (PE), he is known as an Engineer in Training (EIT) and becomes “Joe Cool, PhD, EIT”. Finally, when Snoopy goes back to school to sharpen his design prowess and eventually earns his Master of Architecture (M Arch), he becomes “Joe Cool, PhD, M Arch, EIT”. It is important to note that post nominal letters DO NOT appear in the order in which they were chronologically earned; but, in the order of the importance of the accomplishment. Once earned, a professional has every right to use all of the letters for each accomplishment earned as long as they maintain their license, continuous education, or other requirements of the accomplishment. That said, in common practice, it is rare to display more than three sets of letters at once. Usually, the professional drops the least prestigious accomplishment(s) to display three or less. In certain instances, it is appropriate to show all of the accomplishments (more than three) of the professional in the form of post-nominal letters; such as: when receiving an award, when instructing or teaching on relevant subject matter, or other special circumstances (such as shown herein by the author: when writing an article on letters after names). However, even if not used after the professional’s name, the accomplishments should always be shown on a résumé.

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Tying this Back to Construction Like every profession, there are some Chuck-in-a-Truck, Fly-by-Night contractors that give our industry a bad name. Nothing causes the blood to boil more than when a professional builder, remodeler, or trade contractor hears a story of a home or business owner being burned by a con-artists or unskilled worker. The scammers and wanna-be’s bring down the reputation of the industry and of the true professional who believes their career honorable, takes pride in their knowledge of the latest codes & products and maintains a high-level of continuous education as represented by post-nominal letters. Don’t become a victim. Choose a designer, contractor, real estate agent, banker, accountant and lawyer who take their careers seriously by staying at the top of their professional field. A professional may cost a little more to hire up front or may ask you to wait a little longer before they can start on your project; but, in the end, will serve you better. Letters after names mean things. Look for them. Learn about them. Only hire those who have earned them. n

Christian D. Malesic, MBA, IOM, CGR, CAPS is the Executive Officer of the Home Builders Association of Berks County. He provides insight on construction issues, business operations, marketing, personal finance and occasionally, on political philosophy/history. Contact Christian at the HBA of Berks County office: Christian@HBAberks.org or, follow him on Twitter @CDMalesic.

Common Degrees, Certifications, Designations and Recognitions: Academia DBA – Doctor of Business Administration M Arch – Master of Architecture MBA – Master of Business Administration PhD – Doctor of Philosophy

Association Staff CAE – Certified Association Executive IOM – Graduate of the Institute for Organization Management

Construction CAPS – Certified Aging -in-Place Specialist CGB – Certified Graduate Builder CGP – Certified Green Professional CGR – Certified Graduate Remodeler GMB – Graduate Master Builder GMR – Graduate Master Remodeler HCCP – Housing Credit Certified Professional PMP – Project Management Professional

Design AIA – American Institute of Architects AICP – American Institute of Certified Planners CID – Certified Interior Designer CKD – Certified Kitchen Designer EIT – Engineer in Training LA – Landscape Architect LC – Lighting Certified LEED AP – Leadership in Energy & Environmental Design Accredited Professional LS – Land Surveyor PE – Professional Engineer RA – Registered Architect SIT – Surveyor in Training

Lending & Accounting CMC – Certified Mortgage Consultant CPA – Certified Public Accountant CRMS – Certified Residential Mortgage Specialist G MA – General Mortgage Associate

Real Estate Sales ABR – Accredited Buyer’s Representative CMP – Certified New Home Marketing Professional CSP – Certified New Home Sales Professional GAA – General Accredited Appraiser MIRM – Master in Residential Marketing RAA – Residential Accredited Appraiser

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Eastern Shore Chapter

Members from newly formed Eastern Shore Chapter of the Home Builders Association of Maryland gathered with current members at a welcome luncheon in June. Brew River was the perfect Eastern Shore backdrop as members discussed issues and planned for the future.

New Eastern Shore Members ABC Supply All States Construction Bayview Builders LLC Beach Construction Beachwood Inc Becker Morgan Group Belfast Valley Contractors, INC Bozek Fine Homes, Inc. Chance and Associates Chesapeake Paving & Sealing Delaware Lumber & Millwork of Salisbury, Inc.

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First Shore Federal Floor Systems Inc. Frank E. Daffin Inc. GW Homes Inc. Hague Quality Water Handy Hays Hayes Construction Interlock Paving, Inc. J H Miller Inc Lifestyle Builders Inc Lundberg Builders Inc Mallard Construction

Martin Groff Construction Newport Properties North Atlantic Construction Paquin Design/Build Inc. Poole Contracting & Consulting Prettyman Construction, Inc. Quality Home Maintenance & More RE/MAX Crossroads Resort Homes, INC Richard Hammond Builders LLC River Run Development Robert L Messick Inc

Salisbury Go Glass Seaside Plumbing Inc. St. Michaels Ventures, LLC Stoltzfus Brothers Shore Construction LLC The Adkins Co Thomas P. Monahan., LLC Tri County Aire Value Carpet One Waterman Inc Wye Gardens, LLC

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Progress is rapid on the new HBAM headquarters in Maple Lawn.

Maryland Center for Housing Work Day

Thom Marston gathers supplies. 46

Barry Eilis reviews plans.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Interior framing is complete.

Bob Hartwick cleans up.

Andrew Finkelstein inspects supplies.

Marka Guindon and Judy Borns clean up the site. www.homebuilders.org

Last stages of framing. JULY/AUGUST 2013 MID-ATLANTIC BUILDER

The Maryland Center for Housing The Maryland Center for Housing campaign started at Builder Mart in 2011 and now, we’re coming down the home stretch. The longtime vision of a new headquarters for the Home Builders Association of Maryland will soon be a reality. As you have probably heard, the building will house the Building Industries Foundation and will serve as HBAM’s headquarters. The BIF is the non-profit, charitable arm of HBAM and was created in 1999 to respond to requests for assistance in benevolent housing/ shelter related projects. The Foundation will own the building debtfree and lease it back to the Association, thereby providing a stable, long-term funding source to endow the Foundation and support its charitable, education and research activities. As for the Association, the building will be physical presence in Central Maryland that stands as a testament to the strength, vitality and endurance of the industry and HBAM. The first step of the process was made possible through a generous donation from Stewart Greenebaum of a fully permitted parcel in the commercial district of Maple Lawn, his award winning mixed use, smart growth development. Located in southwestern Howard County, the site is convenient to Interstate 95, US Route 1 and Maryland Routes 29 and 32. Over the summer, the title for the land was transferred to the Foundation. The land, including improvements, appraised for $700,000.

That one donation quickly turned into several and the excitement began to grow as word of a new headquarters spread throughout the Association. Shannon Comer of Shannon Comer Architects stepped up and very generously donated her company’s time and expertise to design the sophisticated 10,000 square foot building that will stand on the parcel. The design includes a usable show kitchen, first floor work rooms, a large board room and office space for the Foundation. Many other companies have been quick to donate their product, time and expertise to the new building. Due to the access to the building industry resources, HBAM members have a unique ability to provide labor and materials that would otherwise cost significantly more. A complete list of donors can be found on page 28 or online at www.marylandcenterforhousing.org. It is not too late to make your commitment and become part of this ambitious project which will forever change the future of the Association for the better. Contributions are tax deductible as the Foundation is a fully approved 501-C(3) non-profit organization. Benefits to donors include recognition in print publications, electronic publications and online. Significant recognition throughout the build and at the new building is also included. Another way to participate is by purchasing a brick paver to be installed at the entrance of the building. The pavers are custom engraved and come in two sizes. n

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Maryland Center for Housing Donors Thank you to the following companies for their generous financial support. NAMING DONORS

GOLD DONORS

SILVER DONORS

BRONZE DONORS

FRIENDS OF MCH

The Rachuba Family Lowell Glazer Bob Ward Companies Cornerstone Homes Dan Ryan Builders Elm Street Development Forty West Goodier Baker Builders NVR Powers Homes Residential Title & Escrow Co. Security Development

Caves Valley Development Design Consultants Koch Homes Orchard Development Shelter Builder Communities

Baldwin Homes Beazer Homes Chateau Builders Charm City Builders Columbia Builders Gemcraft Homes Lennar MD Landmark Morris & Ritchie Assoc. Mueller Homes Selfridge Family Foundation Steuart-Kret Williamsburg Homes

Dorsey Family Homes Efficient Homes IWIF Richard Rubin Whitehall Development FRIENDS OF MCH Axiom Engineering ECS Mid-Atlantic, LLC Linowes and Blocher T+A Contractors Zahler Construction and Development

Axiom Engineering ECS Mid-Atlantic, LLC Linowes and Blocher T+A Contractors Zahler Construction and Development

Thank you to the following companies for their contributions of labor, materials and professional services. Lead Donor: STEWART GREENEBAUM 84 Lumber ABC Supply Allied Building Products Apex Grounds Management Ashton Manor Environmental AZEK Building Products, Inc. Bartley Corporation Belair Road Supply The Bilco Company Brace & Bit Woodworks Broan-Nutone Bruce L. Jones Contractors California Closet Carlisle Syntec Systems Charles A. Klein Choice Stairways CMW Co. Constantine Contracting Creative Touch Interiors Dans Company David S. Brown Enterprises Delbert Adams Design House Kitchens Dow Building Solutions Envirosolutions Fick Bros. Roofing & Exterior Remodeling

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Fireside Hearth & Home Gaines and Company Gene’s Johns Glen-Gery Brick Gray and Son Greenebaum & Rose Greenleaf Remodeling Gutschick, Little and Weber Hatfields Septic & Equipment Services Harkins Builders Harris Teeter Hillis-Carnes Engineering Hohmann & Barnard Humpty Dumpsters Interior Concepts John H. Myers & Sons L&L Supply Leisure Specialties Metropolitan Fire Protection Mid-Atlantic Masonry, Inc. Modern Foundations Moen Morris Ginsberg Naka Huttar Oldhouser Northeastern Supply Old Town Construction

O’Neil Interactive Out of Sight Home Theater Owings Brothers Parksite Patterson Enterprises Ply Gem Windows Probuild Prosoco Rapid Signs Reico RFC, Inc. Residential Title & Escrow Co. Richmond American Riparius Construction, Inc. RLO Contractors Roof Center Rosenberg, Greenberg & Martin S.E.H Excavating Shannon Comer Architects Shelter Systems Sherwin Williams Siegel, Rutherford, Bradstock & Ridgeway Smartbox Portable Storage St. John Properties Tamko TW Ellis

TW Perry Tyco Fire Protection Products Vintage Security Wall to Wall Construction Weyerhauser

NAMING RIGHTS Rachuba Family Foundation Foundation Office Security Development Howard County Government Affairs Office Elm Street Development Finance Office NVR-Sales and Marketing Office Walter and Betty Ward Government Affairs Office

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

stats&facts By the Numbers

Onwards and Upwards By Brooke Burns-Ackley

Affordability rate percentage.

320 New contracts for the month of May.

8.5 The conversation ratio percentage.

15 The cancellation rate percentage.

20 The percentage at which the cancellation rate spiked over the weeks following the increase.

The economic conditions in Maryland seem to keep improving! We are seeing job loss diminish and job growth improve. Other positive conditions include the affordability ratio, which is holding steady at 72 percent. However, forecasts show that this will slowly decline in the next few years and even go down a bit in 2013. In June, we saw interest rates rise, which always affects the consumer. So letâ&#x20AC;&#x2122;s take a look at contracts and traffic to see what impact these rates really had in the Maryland market. New contracts for the month of May totaled over 320. The conversation ratio was 8.5 percent and the cancelation rate was 15 percent. When interest rates increased in June we saw only a slight decrease in sales contract activity and will probably close the month only a bit lower in total gross sales than in May, however the cancelation rate spiked to over 20 percent the weeks following the increase. This leads me to believe that there were some buyers who were turned off by this increase. n

For additional market info including detailed subdivision analysis, custom consulting and 24/ 7 accesses to the content please contact Wayne Norris at wnorris@metrostudy.com. Brooke Burns can be reached at Hanley Wood Market intellegence at bburns@hanleywood.com or 202-729-3678.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

Building Industries Foundation Join us as we come together to change lives. We need your help.

The Building Industries Foundation, the charitable arm of the Home Builders Association of Maryland, was formed to promote shelter related activities for those less fortunate throughout the Baltimore region. The Foundation focuses on ‘sticks and bricks’ projects that provide shelter or shelter improvements for needy families. Our strategy is to provide shelterrelated charitable services in the region by calling upon HBAM members for donations of labor, materials and funds. Won’t you help us help our communities? Visit our website today. It’s easy to get involved: • Donate Time and/or Materials • Request Assistance • Share Your Projects with Us and get PR • View our Latest Projects

Don’t stand on the sidelines—Get involved today www.buildingindustriesfoundation.org www.homebuilders.org

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Not a Member of HBAM? Now is the time to join! Visit us at Builder Mart at the HBAM booth where we will be offering membership incentives or visit www.homebuilders.org/page/joinnow/

2013 HBAM Membership Drive You are the Link to help us Build our Future

Call Felicia at 410-265-7400, ext. 115 TEAMS NEEDED!

WHY BECOME A MEMBER? Respect, Recognition and Representation A good reputation is worth its weight in business. HBAM membership is an opportunity to gain recognition and respect in the community and within the industry. As and HBAM member, the Association represents you by promoting the industry and continually striving to enhance the quality of life by providing quality housing. The Association represents the local housing industry on Capital Hill, the State House and local government entities to attain favorable and progressive legislation for the industry. Networking Opportunities HBAM membership is an opportunity to build a network of professionals in the industry by sharing ideas with other builders, subcontractors, suppliers and service firms. These opportunities are in the form of all the events that HBAM has to offer. Advertising Opportunities To help you sell your product and/or service, HBAM sponsors such promotional events such as Builder Mart. Also advertising opportunities are available to you through the monthly Homefront online, Mid-Atlantic Builder Magazine and the HBAM Buyers guide. Educational Opportunities HBAM offers various educational opportunities. Learn about current trends and what the future holds for the industry through meetings, seminars presented by HBAM and the National Association’s Annual Convention and the International Builders Show. Local, State and National Membership As part of your membership, you automatically become a member of HBAM, the Maryland State Builders Association and the National Association of Home Builders. Membership Directory The HBAM Buyers guide puts members’ names, addresses, phone numbers and other valuable information at your fingertips. Valuable Money Savings Programs Members of the Association can advantage of the many discount programs from various local, state, and national businesses including a workers compensation discount program, discounts on office supplies, phone service, discounts on PC, rental cars, delivery service, GM vehicle discounts, advertising discounts, and many others.

Form a team to work together to call on prospective new members and talk about the benefits of membership in HBAM! The teams and members will compete for prizes and the honor of knowing that they have shared their association with others in the industry and helped make HBAM better.

September 24, 2013 – Rally September 26, 2013 – Telethon • Send the Message of Membership • Increase our strength in Annapolis • Grow our Networking • Cultivate Relationships • Raise Professional Awareness

www.homebuilders.org/page/ memberdrive/

ANNUAL

EVENTS

& CONFERENCES HBAM OFFERS A VARIETY OF EVENTS AND PROGRAMS EACH YEAR THAT PROVIDE BOTH BUSINESS AND SOCIAL FORUMS TO INCREASE YOUR INDUSTRY CONTACTS. • Builder Mart • Key Connections • MAX Maryland Awards of Excellence • International Builders’ Show • Celebrity Chef Night and Auction • HBAM Remodelers Awards of Excellence • The Maryland Real Estate and Construction Forecast Conference • Icon Awards • A Night at the Yard • Land Development Council Community Development Awards

Contact Felicia Fleming 410-265-7400, ext. 115 or felicia@homebuilders.org for more information. 52 MID-ATLANTIC BUILDER at JULY/AUGUST 2013 www.homebuilders.org

HBAM Welcomes New Members Builders

Airex Manufacturing Gabriel Lechuga 72170 Dunham Way Suite D Thousand Palms, MD 92276 Phone: 760-343-2277

Sponsor: Russell Dickens, Elm Street Development, Inc. Dreamland Builders LLC

David Arthur 5922 shady spring ave rosedale, MD 21237 Phone: 410-866-4758 www.dreamlandbuildersllc.com Remodeler

Habitat for Humanity Susquehanna, Inc. Dave Guttman 205 S. Hays Street Bel Air, MD 21014 Phone: 410-638-4434 www.habitatsusq.org Builder

Harbor Development Ezra Hercenberg 338 E. 25th Street Suite 100 Baltimore, MD 21218 Phone: 443-708-4002 Developer

Sponsor: Sandy J. Marenberg, Marenberg Enterprises Mark Building Co., Inc., The Lawrence I. Rosenberg 10 Crossroads Suite 206 Owings Mills, MD 21117 Phone: 410-654-5650 www.markbuilding.com Builder

Reliable Real Estate Services, LLC John Dixon 1 Churchview Road Millersville, MD 21108 Phone: 410-923-9193 Developer

Sponsor: Sean Davis, Morris & Ritchie Woodbridge Homes, LLC Sue Matthias 11400 Woodridge Ct. Hagerstown, MD 21741 Phone: 301-745-4082 Builder - Small Volume Remodelers

ACH Group LLC Pavel Abaev 436 Doe Meadow dr Owings Mills, MD 21117 Phone: 443-221-2323 www.achgroupllc.com Remodeler - Exteriors

www.homebuilders.org

Brightview Builders

Alside/Revere Building Products

Daniel Ball and Associates, Inc.

Mark VanReuth P.O. Box 688 Arnold, MD 21012 Phone: 410-647-3100 www.brightviewbuilders.com Remodeler

William Martin 3721 Commerce Drive Halethorpe, MD 21227 Phone: 443-695-0516 www.associatedmaterials.com Supplier - Siding

C Brown Properties

Daniel Ball 7226 Lee DeForest Drive Suite 205 Columbia, MD 21046 Phone: 410-715-0408 www.dba-arch.com Professional Services - Architecture & Drafting

Apex Technology

Corey Brown 859 1/2 N. Howard Street Baltimore, MD 21201 Phone: 410-521-7050 Remodeler

MD Mobile Home, Inc. Amanda Sanner 10051 N. 2nd Street Laurel,, MD 20723 Phone: 410-880-6046 Remodeler - Specialty

Renewal by Andersen Arif Durrani 2707 Rolling Road, #101 Baltimore, MD 21244 Phone: 410-265-9510 www.renewalbyandersen.com

Sponsor: Joe Smith, Owings Home Services Schmidt Contracting Services, LLC Ryan Schmidt 1174 Bayview Vista Annapolis, MD 21409 Phone: 443-235-0546 Remodeler

Associates

Access Lifts & Service, Inc. Richard C. Nordin, Jr 218 Old Padonia Road Cockeysville, MD 21030 Phone: 410-683-2393 www.liftuup.com Subcontractor - Elevator & Lift Systems

Advanced Granite Solutions Todd Turner 2111 Emmorton Park Road Suite 2 Edgewood, MD 21040 Phone: 717-405-9595

Allegiance Surety Associates, Inc. Art Jones 7901 Sandy Spring Road Suite 515 Laurel, MD 20707 Phone: 301-369-9155 www.allegiancesurety.com Professional Services - Financial Services

Allied Well Drilling Andy Capelle P.O. Box 129 8213 Brock Bridge Rd Annapolis Junction, MD 20701 Phone: 301-776-8370 http://www.alliedwells.com/ Subcontractor - Water Cond., Mgmt., Proof & Wells

Sponsor: Joe Smith, Owings Home Services

Jesse Dayhoff 1025 Meadow Branch Rd. Westminster, MD 21158 Phone: 410-702-5746

Designer Doors Inc. Angie Young 702 Troy Street River Falls, WI 54022 Phone: 715-426-1100 www.designerdoors.com

Astrum Solar Mark Manthy 8955 Henkels Lane #508 Annapolis Junction, MD 20701 Phone: 202-443-0344 www.astrumsolar.com

Dow Solar

Mark Leishear 9590 Nanticoke Business Park Dr. Greenwood, DE 19950 Phone: 302-349-4561

Bryan J. Hacker 554 N Frederick Ave Suite 185 Gaithersburg, MD 20877 Phone: 240-586-2261 www.dowsolar.com Supplier - Green Building Products

Brace & Bit Woodworks

Ecotone, Inc.

Beracah Homes

Lynn Davis 2120 High Point Road Forest Hill, MD 21050 Phone: 410-420-2600 www.ecotoneinc.com Professional Services - Environmental Services

Paul Waddell P.O. Box 223 Hanover, PA 17331 Phone: 717-465-9097

Central Vacs Unlimited Scott Parker 1659-A Robin Circle Fores Hill, MD 21050 Phone: 410-638-9396 Supplier - Central Vacuum

EverBank Dan Long 12150 Monument Drive Suite 300 Fairfax, VA 22033 Phone: 703-261-8843 Professional Services - Financial Services

Charles Luck Stone Center Joe Bartos 12202 Clarksville Pike Clarksville, MD 21029 Phone: 443-535-0543 Supplier - Stone, Marble & Granite

Sponsor: William S. Zahler, Zahler Construction & Development LLC Evergreen Technologies Carl Byrne 6254 Frankford Avenue Baltimore, MD 21206 Phone: 410-870-1909

Collins Landscaping Henry Collins 15811 Darnstown Road Germantown, MD 20874

George Mason Mortgage

Cornerstone Masonry Katie Holt 148 Church Lane Cockeysville, MD 21030 Phone: 410-666-2448 www.cornerstonemasonry.net Supplier - Stone, Marble & Granite Sponsor: Joe Smith, Owings Home Services

Criterium Engineers H. Alan Mooney, P. E. 22 Monument Square Portland, ME 04101 Phone: 207-828-1969 www.criterium-engineers.com Professional Services - Engineering & Technical

Steve Williams 6021 University Blvd. #290 Ellicott City, MD 21043 Phone: 301-938-3696 www.LOSteve.com Professional Services - Financial Services

Group Benefit Services David Cardwell, Sr. 6 North Park Drive Hunt Valley, MD 21030 Phone: 410-832-1300 Professional Services - Insurance

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

HBAM Welcomes New Members Highland Turf, Inc dba HTI Contractors

Kimberly F. Palmisano, CPA, P.A.

Maryland Energy Advisors

Roxul

William H. McGew, Jr. 4539 Sykesville Road Finksburg, MD 21048 Phone: 410-781-0155 Subcontractor - Excavating, Grading & Utilities

Kimberly F. Palmisano 17 Starlight Farm Drive Phoenix, MD 21131 Phone: 410-336-6383 Professional Services - Accounting

Phil Croskey P.O. Box 1051 Cockeysville, MD 21030 Phone: 410-961-4299

Jason Howell 25 Rock Glenn Road Havre de Grace, MD 21098 Phone: 410-804-0185 Supplier - Insulation & Drywall

Sponsor: Mike McCann, Goodier Baker Homes Iacoboni Site Specialists, Inc.

Tom Iacoboni 9301 Philadelphia Road Baltimiore, MD 21237 Phone: 410-686-2100 Subcontractor - Excavating, Grading & Utilities

Kleer Lumber/The Tapco Group Flora Masciadrelli 44 Greif Way Westfield, MA 01085

Koma Building Products

Sponsor: Mike McCann, Goodier Baker Homes

Joe Biss 3402 Stanwood Boulevard Huntsville, AL 35811 Phone: 256-851-4099

Jarvis Green Design & Marketing

Kramer & Connolly

Amy Brenneman Green 350 Winterstown Road Red Lion, PA 17356 Phone: 717-578-3578 Professional Services - Advertising & Marketing

John J. Gessner, P.A. John J. Gessner 26 South Main Street Bel Air, MD 21014 Phone: 410-638-5100 Professional Services - Legal

Sponsor: Scott Armiger, Orchard Development Northwestern Mutual Robert Scharff, III 8840 Stanford Blvd Suitem 4400 Columbia, MD 21045 Phone: 410-480-7065 Professional Services - Financial Services

Perfect Glass Work LLC

Irwin Kramer 465 Main Street Reisterstown, MD 21136 Phone: 410-581-0070 Professional Services - Legal

Mikhail An 826 Gallop Hill Rd Ste. A Gaithersburg, MD 20879 Phone: 301-267-3404 www.perfectglasswork.com Supplier - Other

Lasso Data Systems, Inc.

Ply Gem Windows

Marc Regardie 2819 N. Glade Street, NW Washington, DC 20016 Phone: 202-333-0958 Professional Services - Advertising & Marketing

James Ross 602 Brenda Way Westminster, MD 21157 Phone: 443-340-2721 www.plygemwindows.com Supplier - Doors, Windows & Glass Block

Polaris Land Consultants

Use our

logo

and gain credibility As HBAM members in good standing, we encourage you to use our logo on your advertising materials, website, business cards and promotional brochures. Your company will gain credibility in the building industry as well as with the general public. By using the Home Builders Association of Marylandâ&#x20AC;&#x2122;s logo, you can show the industry and consumers who you are, what you stand for and with whom you stand.

Geoffrey Schultz 10 Gerard Ave Suite 101 Timonium, MD 21093 Phone: 410-252-4444 Professional Services - Engineering & Technical

Schlage Lock Company John Williams 22625 Buena Vista Road Rockbridge, OH 43149 Phone: 740-385-6751 Supplier - Hardware

Simonton Windows Bob Wolff 437 Watson Road Centreville, MD 21617 Phone: 410-490-2535

Southern Trust Mortgage Dennis Sullivan 3290 North Ridge Road Suite 220 Ellicott City, MD 21043 Phone: 410-750-2167 www.southerntrust.com Professional Services - Banking & Mortgage

St. Paul Corrugating Hugh Burhans 700 39th Ave. NE Minneapolis, MN 55421 Phone: 763-788-9271 www.stpaulcorrugating.com

Urban Green Environmental, LLC

Sponsor: Michael Greenspun, Basic Development Co., Inc.

Denise Sullivan P.O. Box 4869 Baltimore, MD 21211 Phone: 410-244-7215 Professional Services - Environmental Services

Robert A Tull, Inc

Utilities Unlimited

Robert Tull 7820 Airpark Road Gaithersburg, MD 20879 Phone: 301-948-2490 tullplumbing@tullplumbing.com Subcontractor - Plumbing

Roberts Company, Inc. Wayne Tusing 1040 Cromwell Br. Road Towson, MD 21286 Phone: 410-824-7750 www.robertscoinc.biz Supplier - Cabinets & Countertops

Andrew Farina 1771 Underwood Road Sykesville, MD 21784 Phone: 410-442-1755 Subcontractor - Excavating, Grading & Utilities

Sponsor: Jeremy Rutter, Rutter Project Management Wesalo Associates/USP Roger Wesalo 12114 Heneson Garth Owings Mills, MD 21117 Phone: 410-356-2605 Supplier - Hardware

Visit our website at www.homebuilders.org to download the logo today.

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

WE TAKE THE LOAD , OFF. IT S THAT SIMPLE.

For thousands of years, simple machines like the pulley have helped civilizations build structures that would have otherwise been impossible. And since 1984, Builders Mutual has been dedicated to helping builders ease the burden of choosing and managing insurance. We offer straightforward tools like risk management and Builders University to help protect your bottom line. If youâ&#x20AC;&#x2122;re in construction, the insurance choice is simple.

Ask your agent about us. Or read more at buildersmutual.com. www.homebuilders.org

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

governmentaffairs Baltimore County approves lower Open Space Waiver Fees On May 23 with a 6-1 vote, the Baltimore County Council approved lower Open Space Waiver fees, the first re-calculation of the fees since 2006. These new fees represent a significant cost saving for developers recording plats. Fees decreased on average 60 percent from 2006 levels, but still represent a 4 percent increase over 2003 levels on average. For comparison, the fees increased 211 percent on average in 2006, coinciding with the increased land values during the housing bubble. The fees remained unchanged since 2006, despite a significant decrease in land values in the recent years, prompting calls from the HBAM Baltimore County Chapter to readjust the fee. Along with the lower fee, the Council also passed several other changes to the Open Space waiver process including:

• Removing the 200 percent fee requirement for redevelopment projects of 5 acres or less inside the URDL in DR 10.5 and DR 16 IF a structure is being torn down and replaced with a new building. In this case, you would pay the new fee. If the land is bare and the project is less than 5 acres, you will pay 200 percent of the new fee in these 2 zones. • Neighborspace will get an automatic 20 percent of the open space revenue. • The county will review the fee every 2 years. • The fees and methodology used to calculate the fees to be posted on the county website. • The last change makes the legislation effective June 3, not the usual 45 days from enactment. Below is a chart showing the new fee compared to previous fees.

Howard County proposes expanding Moderate Income Housing Requirements to all residential zones The Ulman Administration is proposing a new fee on new homes to further fund and expand the County’s Moderate Income Housing Unit (MIHU) program. Legislation was introduced in the County Council this month that would result in an additional $6,000 - $10,000 fee per house, with no additional density or cut to other county fees to offset the new fee for builders. HBAM Chapter members are strongly opposed to this proposal and are working with the Administration and Council to defeat it or make significant changes. The County provided this summary of the proposal:

Open Space Waiver Fees

Zoning Classicfication

Open Space Waiver Fee 2003

Open Space Waiver Fee 2006

Open Space Waiver Fee 2013

Proposed per acre Basis

DR 1

$1.85

$4.68

$1.38

$60,000

DR 2

$2.40

$5.49

$2.30

$100,000

DR 3.5

$2.15

$5.22

$3.44

$150,000

DR 5.5

$1.90

$6.07

$3.79

$165,000

DR 10.5

$2.80

$6.87

$4.36

$190,000

DR 16

$3.50

$9.76

$5.74

$250,000

RC 2

$0.50

$1.81

$0.22

$9,500

RC 3

$0.85

$3.47

$0.69

$30,000

RC 4

$0.60

$2.90

$0.53

$23,000

RC 5

$1.65

$3.43

$1.10

$48,000

RC 6

$0.75

$1.45

$0.55

$24,000

RC 7

$1.75

$2.17

$0.22

$9,500

RC 8

N/A

$0.51

$0.23

$10,000

RC 20

$0.20

$1.81

$0.28

$12,000

RC 50

$0.15

$6,500

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org

governmentaffairs Purpose Expand the MIHU program to provide more inclusive affordable housing at moderate income levels by requiring MIHUs in all single-family residential zones, with an option to provide alternative compliance including paying a fee-in-lieu of building the MIHU units. Background The primary goals of the MIHU program are to (a) increase the supply of housing that is affordable to households of moderate income in the County and to (b) integrate that housing into all new communities. As currently written, however, the MIHU law only applies in certain high density zones: R-SA-8, R-A-15, CCT, POR, R-SI, TOD, CAC, MXD, age-restricted adult housing, planned senior communities, and residential mobile home developments. This leaves many new communities without housing that is affordable to moderate income families. Moreover, it places the full economic burden of providing the affordable units on the developments in the higher density zones. Proposal In order to more fairly distribute moderate income housing throughout the County, and to provide greater affordable housing opportunities for moderate income households, at least 10 percent of all units built in a development in any of the following zones should be subject to the MIHU requirements: RC, RR, R-ED, R-20, R-12, R-SC, R-VH, HO and HC. Recognizing that development of MIHUs in some single-family detached subdivisions may be economically infeasible, developers would be allowed to pay to the County a fee in lieu of actually building the MIHUs, or provide other means of alternative compliance. The fee-in-lieu would be equivalent to the County’s cost of providing an MIHU of similar size. The fee would be calculated as the difference between the prevailing market price and the MIHU price of a three-bedroom, single-family attached unit. For example:

www.homebuilders.org

• Subdivision: 120 SFD units. • MIHU Requirement: 10 percent (12 units) • Average sales price of 3-bedroom SFA units in the County: $280,000 • MIHU sales price for 3-bedroom SFA unit: $220,000 • Difference: $60,000 • Total Fee: $60,000 x 12 = $720,000 • Fee per unit = $720,000/120 = $6,000 Fees collected by the County would be placed in the County’s Housing Initiative Fund and used for one of the County’s affordable housing programs, such as the Settlement Down payment Loan Program, Rehabilitation Loan Program, or Rental Housing Development Program.

www.rwcwarranty.com

Eastern Shore HBAM has now officially merged with the Eastern Shore Builders Association, expanding our reach to all Counties on the Eastern Shore. A Chapter is being organized and a meeting will be scheduled for later this summer. HBAM will cultivate and maintain an active government affairs presence in these new counties to assist and inform our new members of legislative and regulatory changes on the local level. For more information about the Eastern Shore Chapter, please contact HBAM at 410 265-7400. n

Michael Harrison VP Government Affairs 410-265-7400, ext.109 michael@homebuilders.org

RESIDENTIAL WARRANTY COMPANY, LLC

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Walbrook Mill & Lumber Co Relocated to

HBAM Weekly News

SACO SUPPLY in Cockeysville Just minutes off I-83 or York Rd

NOT A BIG BOX STORE! Personalized Service, Knowledgeable Staff

Building Materials

Extensive Molding Inventory Framing/Treated Lumber Engineered Lumber PVC/Composites CEDAR Kitchen Cabinets Hardware

Architectural Millwork Custom Windows and Doors Custom Molding Kitchen Cabinets Circle Work

410-462-2200 • 410-771-1515 ily Fam ned Ow RS Y 95

HBAM Debuts New Member Service In early July, the Home Builders Association of Maryland introduced a new service to the membership. The new HBAM Weekly News Link is an electronic newsletter which is emailed to members every Tuesday. The purpose of this new communication is to keep the association apprised of upcoming events and items of interest without deluging their in-boxes with email. The format of the email is clear and concise with a primary topic leading off the section, followed by a chronological calendar listing of upcoming happenings and then specialty sections like Government Affairs, Conferences or Entries and Nominations are listed. There is a handy sidebar with quick links to commonly visited sections of www.homebuilders.org like our online directory, HBAM councils and the Maryland Center for Housing. There are also icons for quick access to our social media sites like Facebook, LinkedIn and Twitter. HBAM anticipates that the Weekly News Link will keep members better informed while cutting down on the number of emails and communications they receive. We are continually trying to improve our services and welcome your feedback. Please email Kristin Hogle at communications@homebuilders.org with your comments and suggestions.

Eastern Shore Chapter to Host Reception at MACo

109 W Cockeysville Rd The Professional’s Source

walbrooklumber.com 58

MID-ATLANTIC BUILDER JULY/AUGUST 2013

August 15, 2013 6:30 pm – 8:30 pm Clarion Resort Fontainebleu Hotel The newly formed Eastern Shore Chapter of HBAM will be holding a reception during the Maryland Association of Counties Conference in Ocean City, Maryland. The reception will be held from 6:30 to 8:30 pm at the at the Clarion Resort Fontainebleu Hotel. The MACo Summer Conference, entitled, “Bringing it All Back Home” will take place from August 14-17, 2013 at the Roland Powell Convention Center in Ocean City. The conference will focus on economic development and tourism in Maryland. All members are encouraged to attend. Please contact Carey Swift at 410-265-7400, ext. 118 or carey@homebuilders.org to make your reservation.

www.homebuilders.org

ad list Appliance Distributers Unlimited Page 5 BGE Outdoor Lighting Page 1 Builders Mutual Insurance Page 55 California Closets Page 60 GE Contract Sales Back Cover Premier Lifts Inside Back Cover Residential Warranty Page 57 Saratoga Page 59 Southern Pacific Page 7 Tremco Barrier Solutions Page 3 Vintage Security Inside Front Cover Walbrook Mill & Lumber Co Page 58 For advertising opportunities please contact Chris Baughan chris@homebuilders.org or 410-265-7400, ext. 121 Did you Know? “Magazine readers pay attention to magazine ads. They don’t avoid the advertising as they do with other media.” Source: BIGResearch Simultaneous Media Usage Study

Visit www.homebuilders.org for an on-line listing of Mid-Atlantic Builder advertisers with hotlinks. There, you can also view MAB archives and find information on upcoming events and current industry issues.

MID-ATLANTIC BUILDER JULY/AUGUST 2013

www.homebuilders.org

JULY/AUGUST 2013 MID-ATLANTIC BUILDER

Everyone loves a café. Now, everyone can have one. GE Café™ is GE’s first new line of appliances in 15 years, and it’s an exciting new sales opportunity. With stainless steel exterior and robust styling, builders and new home buyers will want to make it the centerpiece of their new home. For remodelers and their customers, the GE Café will easily transform any kitchen with restaurant-inspired design. At long last, everyone can afford to have an inviting café – right at home. www.geappliances.com/café For additional information on GE Appliances call GE Area Sales Manager Lora Williams at 410.679.0486.

GE Café ™

MID-ATLANTIC BUILDER JULY/AUGUST 2013 www.homebuilders.org