Mid-Atlantic Builder

COMMUNITY DEVELOPMENT AWARDS

MID-ATLANTIC

Vol. 53 Issue 4 September/October 2011 www.homebuilders.org

Developing Excellence Excellence in Community Development Awards Announced

September/October 2011 Vol. 53 Issue 4

MID-ATLANTIC ON THE COVER AND BELOW Maple Lawn developed by Greenebaum and Rose Associates

PUBLISHER John Kortecamp

EDITOR Kristin Josephson Hogle, Editor communications@homebuilders.org

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

DESIGN Heather Winkel, Art Director Kristina Hopkins, Graphic Designer Network Design Group ndg@networkmediapartners.com

HBAM LEGAL COUNSEL Linowes and Blocher

MID-ATLANTIC BUILDER

LDC Awards

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How to Overcome NIMBY Opposition to Your Project

The Land Development Awards feature the best in land development for 2011.

When facing community resistance, you must plan an appropriate course of action.

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An Introduction to Mixed Use and Compact Development

Provide larger amounts of common open space and achieve more cost-effective development.

29

Negotiating the Best Financing Package

32

Smart Codes Smart Process Checklist

Publisher’s Message President’s Message Events Associate Members Government Affairs Stats and Facts

Pages 23-26 Pull-Out Section

Postmaster: Send address changes to Home Builders Association of Maryland, Inc., 7127 Ambassador Road, Suite 150 Baltimore, MD 21244.

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

Remodeler A supplement to Mid-Atlantic Builder

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

Tickets

2011 HBAM Remodelers Awards of Excellence www.homebuilders.org/page/RCawards/ November 10th

Smart Codes demand Smart Processes. Check it off the list.

HBAM Remodelers Council Gold Award

How Government Regulation Affects the Price of a New Home

Builders are contending in markets in which homes cost more to build and sell due to government regulations.

Also

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Builders who are armed with the right information may be able to negotiate lower loan rates and get better deals.

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Departments

MID-ATLANTIC

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is a publication of HBAM Member Services, Inc., a subsidiary of the Home Builders Association of Maryland, Inc., 7127 Ambassador Road, Suite 150, Baltimore, MD 21244 410-265-7400, www.homebuilders.org.

Green Building Building Homes— Building Success

Delbert Adams Construction Group, LLC, Private Country Club $400 - $500K Commercial

Departments

Before & After President’s Message New Members Remodeler News

48 Corner BRAC

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

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SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

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2011 HBAM LEADERSHIP Photo Credit Stuart Zolotorow

EXECUTIVE COMMITTEE Bob Goodier President Rod Hart President Elect

publisher’smessage

companies who have signed on to donate to the new Maryland Center for Housing at Maple Lawn and will have their products and services featured in the building.

We appreciate their support of the Home Builders Association of Maryland and the

Theresa Leatherbury Treasurer

building industry. Visit www.marylandcenterforhousing.org where you can find details on our groundbreaking in November, get up-to-date on our progress and download a paver order form.

There are new donors signing on every day. Are you in?

LEAD DONOR: STEWART GREENEBAUM Residential Title

Gray & Sons

O’Neil Interactive

Shelter Systems

Leisure Specialties

Gutschick, Little & Weber Fretz Companies

Scott Barhight Associate Vice President Cynthia McAuliffe Secretary

Who’s In So Far? A big thank you goes out to the following

Scott Armiger First Vice President- 2011

T.W. Ellis Interior Concepts

Moen

Eliot Powell Immediate Past President

CHAPTER PRESIDENTS Evan Gilligan Anne Arundel Councy Jeremy Rutter Howard County Robb Aumiller Baltimore County Sean Davis Baltimore City Dan Whitehurst Upper Chesapeake Paul Mueller Carroll County

COUNCIL PRESIDENTS Taylor Classen HBAM Remodelers Dennis O’Neil Sales and Marketing Council Michael Greenspun Land Development Council Bill Zahler Maryland Residential Green Building Council

HBAM BOARD OF DIRECTORS Tom Baum Steve Breeden Mike Breen Ron Carstens Pat Costello Steven Gilman Chickie Grayson Joe Gregory Joe Hikel Steve James

Sandy Marenberg James Mathias Tim Morris Dan Murtaugh Rich Pezzullo Steve Rubin Jake Ruppert Kevin Sapp Susan SongyOwens

ALTERNATE DIRECTORS

Charles A. Klein

Design House Kitchens Out of Sight Home Theater

Fireside Hearth & Home Fastsigns of Dundalk

Shannon Comer Architects

Richmond American

Reico Kitchen and Bath

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Paul Krakovsky Paul Mueller Tim Naughton Yana Peifer

Dow Building Supply

Patterson Enterprises

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Jay Hergenroeder Jeff Ott Leslie Rosenthal Matt Helminiak Matt Wineman

EX OFFICIO MEMBERS Chris Rachuba Building Industries Foundation Frank Hertsch PAC Jack Orrick www.homebuilders.org

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SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

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Visit www.homebuilders.org for an Photo Credit Stuart Zolotorow

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.

president’smessage

DIRECTORY OF ADVERTISERS Appliance Dist. Unlimited

Happy Associate Member Appreciation Month!

The next time you come to a Home Builders Association of Maryland event, look around at your fellow members. I guarantee that more than half of

the people you see will be associate members. Associates are essential to our industry and enable us to provide an unrivaled selection of quality homes.

Included in the ranks of associate members are subcontractors, sales and marketing specialists, architects, interior designers, title and settlement experts, lawyers, people in the financial services industry, product suppliers and manufacturers and many more who are essential to the challenging task of providing housing for a growing population.

Associate members are also essential to HBAM by offering sponsorships, devoting countless hours at committee meetings and volunteering at special events. They strengthen our industry in the process.

In recognition of the hundreds of associates who volunteer their time and services to HBAM, September has been designated as Associate Member Appreciation Month.

We have always appreciated the dedication and enthusiasm of associate members, but in today’s unsettled – and unsettling – housing market environment, we appreciate that dedication and commitment more than ever.

During September – and every other month, for that matter – I urge all HBAM members to get to know one another better, learn about each others’ businesses and whenever possible, to do business with other members. Check out the list of current HBAM associates on page 42 of this

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Associate members are invaluable to our businesses and an essential part of our proud history, tradition and spirit. issue of Mid-Atlantic Builder or, as always, you can find them on our website at www.homebuilders.org.

In addition, I ask that you make sure that the subs and suppliers with whom you currently do business are members of HBAM. If they aren’t, ask them to join and put them in touch with Felicia Fleming at felicia@homebuilders.org.

Our HBA is strong when individual members are strong and doing business with other members is a great way to strengthen the association while ensuring that the people you work with understand the issues and concerns that affect your day-to-day operations.

Associate members are invaluable to our businesses and an essential part of our proud history, tradition and spirit. Let’s all thank them this month by doing business with a member.

5 BGE Outdoor Lighting 3 California Closets 26 GE Contract Sales Inside Front Cover John H Myers & Son, Inc Back Cover Mid Atlantic Propane and Gas 1 Saratoga Insurance Inside Back Cover SMC Sales Camp 19 Southern Pacific Supply 7 Walbrook Mill & Lumber 43 For advertising opportunities please contact Chris Baughan at 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

Bob Goodier 2011 HBAM President

www.homebuilders.org

www.homebuilders.org

SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

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Events

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

2012 Real Estate and Construction Forecast Conference December 8, 2011 at Martin’s West 8:00 a.m. - 12 noon

Chef Night and Auction

HBAM Remodelers Awards of Excellence

October 13, 2011 at Martin’s West 5:30 p.m. - 9:00 p.m.

November 10, 2011 at Westin BWI 6:00 p.m. - 10:00 p.m.

Join us for our 16th Annual Celebrity Chef Night and network with over 500 members during this exciting and relaxing event which includes lively entertainment, fabulous culinary delights created by our Builder and Remodeler members, and a live and silent auction.

During the live auction, a super sized paver to be placed at the entrance of the Maryland Center for Housing will be available.

The remodelers annual awards program which recognizes outstanding achievements by members who provide customers with superior and creative remodeling projects

Take a look

ICON Awards November 30, 2011 Fretz Kitchen

Join us as we honor the 2011 ICONS of HBAM during this lively networking cocktail party.

The outlook for 2012 presented by Anirban Basu, David Crowe, Andy Bauer, Steve Fuller and Kenneth Wenhold. 3 Real Estate Continuing Eduction credits pending.

Builder Mart 2012 March 21, 2012 at the Maryland State Fairgrounds Together We Prosper

To get the best location at Builder Mart, reserve your booth now. For over 3 decades, building industry professionals have taken advantage of the annual Builder Mart 1-day marketplace. More than 300 booths fill the exhibit floor, displaying the latest products and services available to the building industry.

www.homebuilders.org

More Info Look for more information on the Maryland Center for Housing Groundbreaking in November at marylandcenterforhousing.org Designed to meet the needs of builders, remodelers, subcontractors, suppliers and home owners.

Easy to navigate, both consumers and industry professionals can instantly gain access to membership lists, statistical information, government affairs updates, event calendars and more.

•

You’ll be able to register for events online, update your membership information, pay dues and more.

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

www.homebuilders.org

2012

BUILDER

BUILDERMART.ORG

WEDNESDAY, MARCH 21, 2012 • 11 am-6 pm • MARYLAND STATE FAIRGROUNDS • TIMONIUM, MD

Together We Prosper Now, more than ever, it is critical to maintain the strength of our Association. With the home building industry continuing to change and evolve, business between members will allow us to stay strong and prosper! Join us at Builder Mart 2012, the Mid Atlantic’s oldest and largest building industry tradeshow. Builder Mart is the only one day event featuring the latest building trends, products, services, educational seminars, and our Renew relationships, and start new ones with the 5,000 prospects who will attend Builder Mart 2012, all in one place, all in one day! Don’t miss this opportunity to build your business! You will speak directly to the decision makers who are looking to do business with you.

Reserve your booth space now by contacting: Chris Baughan, Sales Manager 410-265-7400, ext. 121 www.homebuilders.org 2011 MID-ATLANTIC BUILDER 9 Maryland State Fairgrounds • Timonium, MDSEPTEMBER/OCTOBER • BUILDERMART.ORG

Developing Excellence

Excellence in Community Development Awards Announced 10

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

www.homebuilders.org

<<< Project of the Year, Maple Lawn Greenebaum and Rose Associates, Inc.

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his 605 acre mixed use Maple Lawn development in Southern Howard County is the culmination of fifteen years of hurdles including a full year of County Council hearings (29 hearings when all was said and done, about 3-5 per month). The development team had to convince local elected officials to reduce the allowable density from 3.0 units per acre down to 2.2 â&#x20AC;&#x201C; although the lower density yield prevented inclusion of multi-family, the result was 1,340 homes and 1.6 million square feet of commercial / retail space, and 212 acres of open space.

The compromise with elected officials and community leaders was for this project to be spread out over 12 yearly phases, and they are currently in phase 8.

As part of the planning process, the environmentally sensitive areas were inventoried and mapped and virtually all of it has been preserved in permanently protected open space. Eventually, over 56 acres of trees will be planted. Wetlands and streams were protected with less than 5,000 square feet of total disturbance for road crossings.

This traditional neighborhood design project has turned past opponents into owners. It has a strong and financially stable commercial owners association and home owners association. Having somehow thrived during the continuing real estate slump, this project has turned a wonderful vision into reality.

Land Development Council Individual Awards of Excellence Consultant of the Year Sean Davis, Morris & Ritchie Associates, Inc. Rising Star Dan Whitehurst, Clark Turner Signature Homes, LLC Developer of the Year: Bob Goodier, Goodier Builders, Inc. Lifetime Achievement Eliot Powell, Whitehall Development, LLC

Tanyard Springs >>> Tanyard Springs exemplifies a strong workforce housing community. Located on a 258 acre parcel within the Patapsco Watershed in Anne Arundel County, a Chesapeake Bay Critical Area 100 year floodplain, this project has averaged an astonishing 20-30 sales per month. The amenities offered by this community design make this project especially unique. Tanyard Springs overcame significant environmental hurdles as well. The cite features several stormwater Best Management Practices that provide water quality treatments prior to discharging into the natural ravines.

A primary goal of the site design was to retain as much of the existing forest cover as possible. They met that goal, which led to cliustering of the residential areas which both retained forested land and contributed to floodplain preservation.

<<< Walnut Grove Walnut Grove started out as a 202-acre parcel of farmland and because of perpetual preservation easements, it ended up with 88 one-acre home sites coupled with some amazing views of rolling hills, wooded areas, a stream and an historic stone house that a Revolutionary war hero once called home. As it turned out, 75 percent of Walnut Grove is preserved land.

This site also serves as home to a very unique shared septic system using state of the art nitrogen reducing technology. The approved shared septic treatment facility is designed to reduce nitrogen to 10 mg / L before dosing the treated water back on site to filter through onsite disposal trenches. To get this facility up and running, the development team had to oversee over three months of rock blasting. In addition, the system required local government approval and MDE approval.

Developer: Lennar

Developer: Goodier, LLC

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

www.homebuilders.org

Developer: Gaylord Brooks Realty Company, Inc.

Developer: BB&T

Briar Knoll >>> Located on 187 acres in Northern Baltimore County, a cluster development design philosophy allowed the lots to be concentrated on about 90 acres. In doing this, they were able to retain and dedicate over 40 acres to community open space and preserve all on-site woodlands with zero impact on existing wetlands and streams. The site includes five stormwater management facilities and each lot is served by individual wells and septic systems and exemplifies environmentally sensitive site design.

<<< Clipper Mill This urban redevelopment project is built on a former industrial site and incorporates LEED for Homes design, construction and performance guidelines. In addition, the site is within a ½ mile of existing water and sewer and it is within ¼ mile of public transportation facilities (Light Rail and Bus).

During construction, erosion controls were put in place to protect the site. In addition, the homes (all of which are LEED certified) have sustainable landscaping, including no invasive plant species, drought tolerant turf, limited turf usage, shaded pavement and drought tolerant plantings. With an average housing density that is less than 1/10th of an acre per house and with the installation of a permanent stormwater management facility, this Green urban redevelopment project defines efficiency.

Of course it’s not enough to just build green. The key is occupant education. To that end, each homeowner will receive a homeowner’s manual and training session detailing the aspects of green home operation and maintenance. www.homebuilders.org

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Marea St. Michael’s >>> The concept of Marea St. Michael’s started out with very strong opposition from every angle – the town, the community and the county. Prior to the current developer’s involvement, the plan for this 86-acre waterfront parcel called for over 300 units, a marina and a hotel. That was rejected by the town, with hefty community opposition.

The current developer stepped in and, after five years of negotiations, all stakeholders collaboratively settled on a 16 waterfront lot plan, restoration of $1 million in wetlands, significant Critical Area restrictions and improvements to state rights-of-way.

This development also includes a 40-acre environmental park that serves as the centerpiece of this luxurious, environmentally sensitive waterfront community.

Developer: Elm Street Development

Developer: Bozzuto Homes, Inc.

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<<< Shipley’s Grant Shipley’s Grant preserved seven acres of farmland, which had been placed on the National Historic Registry during the development process. With rigorously restrictive covenants on architecture, the Shipley’s Grant development team sacrificed a great deal of allowable density (of 700 lots allowed, just under 400 were approved) to accommodate the land owners and had to make changes in product design mid-development to accommodate the slumping housing market. Amenities include an opulent club house with an outdoor pool, a community walking trail, a playground for children and will eventually include 28,000 square feet of commercial/retail space within walking distance. In addition, the development team reassured the landowner and county authorities of the project’s environmental sensitivity with stream preservation and off-site sewer disposal access.

Maryland Community Builders’ Foundation The Maryland Community Builders’ 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

How to Overcome NIMBY Opposition to Your Project

BY DEBRA STEIN

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he public record is crammed with postcards, petitions and letters in opposition to your project. The room is packed with shouting, placard-waving opponents. Public officials seem reluctant to establish eye contact with you and agency staff continues to insist that you “do something” about community opposition. What do you do?

Opposition or Support?

When facing community resistance, you must first determine how public opinion - public support and opposition - affects the political decisions about your project, and then plan an appropriate course of action.

Do you need to reduce neighborhood opposition? Would it be more effective to simply mobilize supporters to attend a hearing?

Or should you do both?

The distinction between community opposition and community support is critical.

Your potential supporters are a totally different audience than your opponents, and supporters won’t be moved by the same messages that influence detractors. Rather than wasting your resources with an overly-expansive community outreach program, you need to diagnose your primary community relations needs at the outset of the development process.

Four Causes of Opposition Let’s assume that you need to reduce the number of opponents to your project or, at a minimum, reduce the intensity of their hostility so that they stay home rather than show up at your planning or zoning board hearing.

Given that many outreach tactics can actually generate more community opposition than might already exist, you should focus your community relations program as sharply as possible so you don’t create even more hostility.

Citizens generally oppose land use projects for one of four reasons, and each requires a different community outreach response.

Misinformation A tremendous amount of opposition is based on misperceptions or exaggerated fears of a project’s impact.

This type of opposition is the easiest to overcome. Developers should generally rely on unilateral communications - newsletters, fact sheets, etc. - or bilateral communications - one-on-one briefings - to educate people about their projects.

The large community meetings, public workshops and the other open-door forums that public agencies often insist upon are rarely effective informational events and should not be your sole outreach event. These meetings often do little more than provide venues that foster even more opposition. They enable potential opponents to meet each other, hear and adopt each other’s agendas and encourage activists to stake out extreme public positions to impress their constituents.

Questions and issues raised in these meetings usually cannot be adequately discussed because of time constraints, so what is discussed tends to be one-sided. In addition, attendees can www.homebuilders.org

be too embarrassed to admit that they don’t understand your proposal, or too shy or otherwise reluctant to speak in front of a large crowd - so the questions that need to be answered might never be asked.

Using these meetings as your initial and primary community contact has other drawbacks as well. Providing too much information about your proposal can alert audience members to issues they had not considered.

Moreover, these types of meetings are inherently condescending. offering to “tell neighbors about the project” starts from the presumption that you alone are entitled to make decisions that affect the community. Having these meetings as your initial contact also suggests that you are willing to provide neighbors with information about a project that will be in their backyards only after you’ve made all the decisions about it.

Unmet Emotional Needs Opposition to your project may have nothing to do with the project itself.

Some citizens get involved in land use debates in order to feel important or to justify their leadership roles in their community associations.

In addition, when neighbors feel that they aren’t going to “win” many substantive points about your proposal, they may try to make the facts irrelevant by shifting the debate away from a rational consideration of your plan to an emotional confrontation. Emotional attacks are often an effective way for citizens to even the playing field and feel like a pivotal part of the decisionmaking process.

Meeting your opponents’ emotional needs is usually the least expensive way to reduce opposition to your project. You may have to allow neighbors to vent their anger toward you, and you may have to apologize to them. You may even have to overcome your own anger and resentment and show neighbors the consideration they deserve. But generally, you don’t have to make costly concessions to overcome opposition based on unmet emotional needs.

Conflicts of Values Some people perceive land use debates as basic moral conflicts between good and evil. Until relatively recently, progress and growth generally were considered morally good, with any environmental impacts in the name of achievement seen as purely incidental.

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Over the past few decades, however, America has seen a major shift in its moral ideology as related to land use and economic development. A significant segment of society now believes that land has intrinsic value beyond its usefulness to humans and that preservation of the environment is itself an independent moral principle. For environmental moralists, ecological preservation is a higher moral goal than economic growth or property rights. Therefore, it is critical that you recognize if and when you are dealing with ethical extremists.

If you share your opponentsâ&#x20AC;&#x2122; moral principles, then say so. If your opponents have a different priority on a particular value, then explore with them those priorities in relationship to their other values. They may hold strong beliefs about environmental protection, but how do those beliefs compare to other moral priorities such as affirmative action, property rights or concepts of fairness and equity?

Even though you and your opponents hold truly conflicting values, the clash does not have to result in deadlock. When land use conflicts appear to be caused by ethical disagreements, focusing on mutual interests and problems, rather than on conflicting values, can lead to resolution.

Positive vs. Negative Interests Land use projects tend to pit positive interests against negative interests. Most supporters will endorse your proposal when they believe it creates benefits that will improve their lives - new jobs, new services from the tax revenues your project will generate, even new housing opportunities.

But neighbors also have a fear of losing what they have now.

Most people live where they do because they like it just the way it is. They donâ&#x20AC;&#x2122;t want more traffic, less wildlife or open fields, more crowded schools or other changes to the status quo.

For most people, a bird in the hand is worth two in the bush, and the neighborhood they currently know and enjoy is worth a lot more to them than the speculative benefits you claim your project will bring. That is why it is so much easier for opponents to turn out troops to stop your project than it is for you to encourage residents to show up to support your plan.

You do have several tools you can use to help change peopleâ&#x20AC;&#x2122;s minds and build support for your project:

Persuasion Developers often use rational persuasion - a logical presentation of the facts and issues - to convince citizens of the worth of the project.

Until rel a progres tively recently, s general and growth ly morally were consider e g environ ood, with any d m the nam ental impacts in e seen as of achieveme n purely i ncident t al.

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Opponents rely heavily on emotional persuasion - personal attacks, peer pressure, guilt, appeals to fear and the like - to turn residents against you and your project.

Many people, however, respond to peripheral persuasion and use decision-making shortcuts to decide whether they believe and agree with you. “Everybody hates this so it must be a bad project.” “She presented a lot of statistics, so she must be telling the truth.” “All lawyers lie.”

Negotiations Developers often engage in negotiations with neighbors to resolve conflict. It is critical to note here, however, that making concessions is usually the most costly - and least effective way to resolve conflict. Concessions can cost you millions.

There are four major types of bargaining: Compromise: If you are fighting about a single issue that can be easily divided - such as the height of a building or the number of units in a project - then you easily can reach a middle ground by compromising on that one issue.

Exchanging Concessions: If many issues are in dispute, then you will probably want to exchange or trade concessions by giving up something of lesser importance to you in order to gain a concession of more importance.

www.homebuilders.org

Expanding the Pie:If the total pool of potential resources seems too small to satisfy everyone, then you can expand the pie by going to stakeholders outside the debate for assistance in making the neighbors happy. The outside stakeholders typically can be city or county municipalities.

Joint Decision-Making: Opponents often believe that they should have decision-making powers equal to the developer and that joint problem-solving is appropriate. With joint problem solving, however, no development occurs at all unless both the owner and the neighbors are equally satisfied.

All community opposition is not alike and the wrong type of outreach response can create more problems than it solves. But by carefully diagnosing the cause of opposition and planning and putting into action an outreach program specifically tailored to respond to that cause, you can reduce citizen opposition to your project. ■ Debra Stein was the president of the San Francisco-based public affairs firm, GCA Strategies. She was also the author of several books on NIMBYism and the firm she helped establish specializes in controversial land use projects across the nation. For more information, call 415-391-4100 or visit the GCA Strategies Web site at www.gcastrategies.com.

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An Introduction to Mixed Use and Compact Development

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mart Growth advocates promote compact development so that less land will be consumed by development. Compact development is also advanced to provide more transportation options, by providing opportunities for pedestrian access and to provide densities that can be efficiently served by transit. Compact development can also make more efficient use of infrastructure.

The current prevalent pattern of lower density development is the result of local zoning codes that require low densities and separation of uses, combined with consumer preferences for singlefamily homes and larger lots, and low land prices that permit this larger consumption of land. Any movement toward more compact development will have to address barriers in zoning codes while conceding that most new development will continue to be singlefamily detached homes. Even when land is zoned for higher densities and there is market demand for it, citizen and neighborhood opposition often defeat proposed high density developments.

Several forms of compact development are described in the pages that follow. The actual planning tools and strategies selected will vary according to local politics and market conditions. In addition, interpretation of what compact development means in terms of lot sizes and allowable densities varies across the country.

www.homebuilders.org

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Clustering can also achieve cost savings to the developer and home buyer because the more efficient site layout reduces costs associated with streets, utilities and other site improvements.

Forms of Compact Development — And Codes that Permit it Compact development can take several forms. In a rural or suburban area, it might take the form of cluster development. In urban and suburban areas, it might mean higher densities around transit stops, or more construction of multifamily development. In redeveloping suburbs or new suburbs, compact development may take the form of traditional neighborhoods with a mix of housing types and land uses. Following are some types of compact development.

Cluster or Open Space Development Cluster development is a land planning and development technique that groups structures or lots to provide larger amounts of common open space and achieve more cost-effective development. By permitting variations in lot size, shape and orientation, it allows developers to concentrate allowable units on the most buildable areas of the site, leaving the rest open and undeveloped.

For example, if zoning allows one unit per acre, a 50-acre parcel typically would be permitted 50 homes. Without cluster, the site would have to be divided into 50 one-acre lots. With clustering, homes might be built on half-acre lots, in which case 25 acres of the land could be left in permanent protection as open space. (This open land can be transferred to and maintained by a home owners association, the local government or a private non-profit land trust.)

Cluster development can be used to preserve open space or to protect fragile or otherwise valuable natural resources, such as tree stands, natural drainageways and outstanding scenery.

Clustering can also achieve cost savings to the developer and homebuyer because the more efficient site layout reduces costs associated with streets, utilities and other site improvements.

Cost savings to the local government also are achieved because the more efficient infrastructure pattern reduces maintenance costs and the larger and more useable open space areas created by cluster reduces the number of public parks that are needed.

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

In recent years, the cluster concept has embraced the preservation of larger, more valuable open spaces rather than just “leftover” open space and cluster techniques have been used to preserve large forests, wetland areas and even working farms.

For this reason, many people now refer to cluster development as open space development or conservation development.

Despite its many advantages, cluster development has not replaced conventional large-lot subdivision layout as the dominant form of residential development. This is partly because many local governments either have not allowed cluster development or have effectively discouraged its use through unnecessarily complex and lengthy review and approval procedures. In addition, local officials and the public have not readily understood the cluster concept and have all too often associated it with higher densities and greater concessions to developers.

For their part, developers may not be familiar with this development alternative, or they may not be convinced that there is a market for this type of development. However, there is evidence that buyers appreciate the value of a smaller lot near to permanently protected open space. One study, conducted by the Center for Rural Massachusetts, compared the resale values of homes on lots in cluster developments in two Massachusetts towns with those of comparable homes in conventionally planned subdivisions in the same communities. In both towns, the value of homes in cluster developments appreciated at a faster rate than did the value of homes in conventional developments, in spite of the facts that the lots in the cluster developments were significantly smaller. A 1995 study by the market research firm American Lives found that home buyers place a premium on having lots of natural open space and walking and biking paths; these amenities can best be achieved through the use of cluster development.

As an incentive to developers, the number of units permitted under a cluster plan should be based on the entire (gross) land area, before non-usable areas such as wetlands are calculated and subtracted. Communities should also consider offering density bonuses as an additional incentive to developers to do cluster development. Using the example of the 50-acre site and one-acre zoning used above, with a density bonus a developer would be permitted to build slightly more homes, say, a ten percent bonus of 5 homes, resulting in a total of 55 homes.

These 55 homes could be built on half-acre or smaller lots, still resulting in half the site remaining as open space. ■ For more information about this article, please contact Edward Tombari at 800-368-5242, ext. 8309 or via email at etombari@nahb.org.

www.homebuilders.org

MID-ATLANTIC

Remodeler A supplement to Mid-Atlantic Builder

Tickets

2011 HBAM Remodelers Awards of Excellence www.homebuilders.org/page/RCawards/ November 10th

HBAM Remodelers Council Gold Award Delbert Adams Construction Group, LLC, Private Country Club $400 - $500K Commercial

MID-ATLANTIC

Remodeler

A supplement to Mid-Atlantic Builder

2011 HBAM REMODELERS Taylor Classen President

BOARD OF DIRECTORS Nicole Bliss Guy Caiazzo Taylor Classen Cheryl Crowther Arif Durrani Tim Ellis Steve Gilman Danny Kalmus Doug Kelly Yvonne Lienhard

Ryan McGinn Bob Myers Jennifer Purdy Joe Smith Gregory Wall Bob Weickgenannt Howard Warfield

PAST PRESIDENTS Bill Rauser John Martindale Dave Chmura

Michael Owings Donald F. Lynch, Jr. Guy Caiazzo

2011 SPONSORS Members do business with members Presenting Members

ChesapeakeHome Magazine

KC Company/Pella Windows

Lynch Construction

Susquehanna Bank

Saratoga Insurance

T.W. Perry

Contact Felicia Fleming at 410-265-7400, ext. 115 about 2011 Sponsorship Opportunities

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before&after Delbert Adams Construction Group, LLC Private Country Club On February 12, 2009, this majestic old building suffered a fire much like the one it endured in 1993. The water, fire and smoke damage required the removal of all the previous finishes. The interiors firm brought the interior spaces into the 21st century while keeping tradition and old world style a part of each space. The reopening occurred in November 2009 and the accolades were many. ■

events HBAM Remodelers Awards of Excellence Ceremony & Dinner November 10 6:00 p.m. – 9:00 p.m. at the Westin BWI $85

Join us as we celebrate the outstanding achievements of our council and announce the Awards of Excellence. This year, many projects were submitted in various categories and price ranges beginning at $28,000 up to over $1.5 million.

The 2011 HBAM Remodelers Council Associate of the Year and Remodeler of the Year will be announced at this event.

MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder SEPTEMBER/OCTOBER 2011

Additionally, Taylor Classen, HBAM Remodelers 2011 president will pass the gavel onto Joe Smith, the 2012 incoming president.

Our MC for the night will be Doug Riley with Thos.Somerville Co. The evening promises to be full of networking opportunities with award winning companies—don’t be absent from this premier event.

Visit www.mdremodelers.org to register.

www.homebuilders.org

president’smessage

Why join HBAM Remodelers?

As the Remodeling Industry Turns As I look back on the past year, I realize that that our industry continues to evolve and change. The effects of

the strained US economy have made lasting impressions on home owners. The mindset has caused home owners to have greater price sensitivity when considering improvements to their home. While it would seem there is nothing but negative news in the remodeling world, there are positive signs from new segments of the industry. Our country’s aging population and home owners looking to make their homes more energy efficient are two sectors that are experiencing growth. In the coming years, these two areas are expected to grow.

As our country continues to age, there will be an increased need to modify homes to accommodate the older population. Many of these individuals want to remain self sufficient and in their own homes. To do so their homes will need to be modified. The National Association of Home Builders has created an education certification called Certified Aging-in-Place Specialist (“CAPS”) to help remodelers understand and meet the needs of these consumers.

It is evident that our country is becoming more energy conscience and looking for ways to be more sustainable. The US government has created tax incentives to help homeowners use alternative forms of energy for heating and cooling. In the coming years, this market will only increase. The NAHB’s Certified Green Professional (“CGP”) designation is designed to help remodelers understand this market segment.

www.homebuilders.org

Member Benefits

It is critical that as the industry continues to change, that you and your firm remain nimble and agile and change with it. The NAHB and the Home Builders Association of Maryland have many great resources to help your firm survive in these challenging times. Be certain to use them.

I have thoroughly enjoyed my time as president of the HBAM Remodelers. It has been a pleasure to serve the HBAM and work with many fine individuals. I would like to thank all of the members of the Council, the members of the Board, John Kortecamp, Felicia Fleming and the rest of the team at HBAM for all of their support. Lastly, I would like to thank the 2011 Remodeler Council sponsors for their support: Chesapeake Home Magazine, KC Company – Pella Windows and Doors, TW Perry, Saratoga Insurance and Susquehanna Bank.

Best of luck to you in 2012.

Thanks,

Taylor Classen HBAM Remodelers President

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 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.

For additional information on the HBAM Remodelers Council, contact Felicia Fleming at felicia@homebuilders.org or 410-265-7400, ext. 115.

SEPTEMBER/OCTOBER 2011 MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder

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remodelernews

Associate Appreciation Month In recognition of Associate Appreciation month, the HBAM Remodelers Council would like to thank their associate members and remind you that when members do business with members, we all win.

Allied Building Products Corp.

Architecture Collaborative, Inc. Artelye Marble & Granite Assembly Line Inc. Bluehouse Architecture, LLC D W Taylor Associates Inc. Design House Kitchens & Appliances, LLC East Coast Window Installers Inc. Energy Services Group GBL Custom Home Design, Inc. John H. Myers & Son, Inc .

K.C. Company/Pella Windows & Doors Marvin Window & Door Planning Centre McCloskey Group LLC My Sweet Home Premier Window & Building, Inc. Purple Cherry Architects Reico Kitchen and Bath Residential Title & Escrow Co. Roof Center, Inc., The Sandy Spring Bank Saratoga Insurance Brokers, Inc. SmartBox Portable Storage Southern Trust Mortgage Sterling Mirror Company Susquehanna Bank T.W. Perry Thos. Somerville Co. Vertical Connection Carpet One, The W. F. Gebhardt & Company, Inc. Wells Fargo Home Mortgage

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MID-ATLANTIC REMODELER A Supplement to Mid-Atlantic Builder SEPTEMBER/OCTOBER 2011

www.homebuilders.org

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GROUNDBREAKING IN NOVEMBER

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           

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          

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  

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 

 

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

  

   

Negotiating the Best Financing Package

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mall builders often ask: “Am I paying too much for my construction loans?” This section provides information small- and medium-volume builders should know about the cost of construction loans and suggestions on how these builders can get better terms on construction financing. Builders who are armed with the right information may be able to negotiate lower loan rates or shift to lenders who will give better deals.

According to NAHB surveys, about 90 percent of all loans for residential land acquisition, development and construction (AD&C) come from commercial banks or thrifts.

Prime-Based Loans The vast majority of construction loans are tied to the prime rate.

Lenders typically add a margin of one to two percentage points per annum above the prime rate on construction loans. The percentage (or margin) over prime decreases as the size of the builder increases. In addition to builder size, the amount of the margin will vary depending on the builder’s relationship with the lender, the riskiness of the project and the size of the loan.

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Lenders also charge up-front fees or points, on the loan.

A point is one percent of the loan commitment amount. These points are paid when the commitment is funded. Points typically represent a significant portion of the cost of borrowing on a residential construction loan because the contract interest rate is applied to funds actually drawn, while the points are applied to the full commitment amount. Since construction loans are drawn in stages as construction progresses, the lender receives interest on the full commitment amount only briefly, if at all.

The combination of interest and upfront fees pushes financing costs on the typical residential AD&C loan significantly above the lender’s cost of funds. For example, commercial banks have maintained a three percentage point spread between the

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Builders should be aware that lenders have funding constraints of their own. published prime rate and the federal funds rate (a proxy for a bankâ&#x20AC;&#x2122;s cost of funds). Adding on a one percent margin and an additional one percent for fees, pushes the rate on a prime-based construction loan five percentage points over the bankâ&#x20AC;&#x2122;s cost of funds. This spread is very large relative to the risk incurred, particularly for construction loans on pre-sold homes, which have risk characteristics almost as favorable as home mortgages.

Despite the small difference in charge-off rates between residential mortgages and AD&C loans, borrowing costs on AD&C loans, including interest and upfront fees, are 50 to 75 percent higher than for home mortgages.

Alternatives To Prime-Based Loans There are some alternatives to construction loans tied to the prime rate. Some lenders offer loans tied to short-term market rates, and larger builders often turn to the commercial paper market. However, there are drawbacks associated with these alternatives, and some of them may not be available to smallervolume builders.

LIBOR-Indexed Loans The London Interbank Offering Rate (LIBOR) is the most common alternative to the prime rate for construction loans. LIBOR is the rate on dollar-denominated deposits at commercial banks outside of the U.S. This rate is posted each day in The Wall Street Journal, and generally tracks the same trend as rates on Treasury securities.

Ultimately, the rate charged on LIBOR-indexed loans actually will be based on the difference between the prime rate and prevailing LIBOR. Lenders will adjust the rate on a LIBORindexed loan to be about the same as that on a prime-indexed loan through adjustments to the margin. For example, if LIBOR is 5.25 percent and the prime rate is 8.25 percent, the margin on the LIBOR-indexed loan could be set at 300 to 400 basis points above LIBOR to bring the rate up to the prime rate or prime plus one percent. Again, the size of the margin would vary in the same manner as a loan tied to prime (i.e., the relationship with the lender, the riskiness of the project, the size of the loan, etc.).

In addition to the rate, there are a number of fees and other factors to consider with a LIBOR-indexed loan that do not apply to prime-indexed loans. Unlike a prime-indexed loan where the rate

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floats with the prime rate, a LIBOR-indexed loan has a fixed rate for the term of the loan. Thus, in a LIBOR-based loan, the builder is required to buy a contract for a specified amount (referred to as a tranche), such as $1 million, at a specific LIBOR rate (plus margin) for a certain maturity (i.e., 30, 60, 90 days). Lenders also have limits on the minimum contract amount and the maximum number of contracts that can be outstanding at one time.

Administrative costs are higher for non-prime loans (for both the builder and the lender) since these loans must be monitored continuously. Lenders will charge higher administrative fees for non-prime-indexed loans since the lender has to write a specific contract for the loan. As noted, for a loan tied to LIBOR, a builder would buy a contract for a specific amount outstanding at a specific LIBOR (plus margin) for a specified period of time. The builder guarantees to keep the amount outstanding for the specified period of time at the agreed upon rate (LIBOR plus margin).

When the loan matures, the lender will notify the builder and will write a new contract for the loan at the new LIBOR if that is what the builder wants to do. The higher administrative costs associated with the non-prime loans will be included in the points on the loan.

The most important difference between prime-indexed and non-prime loans, is that prepayment penalties apply to nonprime loans, while prime-indexed loans can be paid off early without a penalty. For example, in the case of a LIBOR-indexed loan, as noted above, the builder guarantees to keep the loan amount outstanding for the specified period of time at the agreed upon rate. If the loan is repaid prior to maturity, the lender will charge a prepayment fee based on the difference between the LIBOR rate on the contract and the prevailing LIBOR at the time of prepayment.

Due to the additional fees and other factors associated with LIBOR-indexed construction loans, these loans are generally only offered to large builders (those producing 400-500 units per year). Lenders will require these builders to have some portion of their construction financing tied to the prime rate in addition to the LIBOR-based loans. For large builders with a large volume of prime-based construction loans, the lender may waive the prepayment penalty on LIBOR-based loans.

Builders should be aware of the additional fees associated with non-prime loans that could make these loans more expensive and less flexible than loans tied to the prime rate, especially for smaller-volume builders. While there may be some initial rate advantages to non-prime loans, the additional administrative fees and penalties associated with non-prime-indexed loans could easily negate that advantage.

Commercial Paper Market Large volume builders often can negotiate below-prime construction financing or raise funds in the commercial paper market. Unfortunately, these alternatives are not available to smaller builders who do not have the volume to leverage with their lender or to tap the commercial paper market.

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By definition, commercial paper consists of short-term unsecured promissory notes issued by well-known companies that are financially strong and carry high credit ratings. Maturities range from 2 to 270 days. Commercial paper is generally issued by large corporations, bank holding companies and finance companies to investors with idle cash, either directly from the issuing company or through a broker. Commercial paper sold through a broker is called “dealer paper,” and paper sold directly through the issuer is called “direct paper.” Although commercial paper is unsecured, in almost every case the issuer is required to back up the obligation with a line of credit from a commercial bank. The minimum denomination for commercial paper is $25,000, and new issues average around $2 million. Commercial paper must be issued in large volumes to cover the costs of marketing and distributing funds. Issuers of commercial paper generally have $600 - $700 million outstanding at any given time and as much as $1 billion in a month.

Using commercial paper to raise funds has several advantages for both the issuer and investor. A company issuing commercial paper gets the benefit of flexible maturities and marginally lower rates than they would have to pay on a comparable loan or line of credit from a bank. A disadvantage is that commercial paper cannot be paid off early or refinanced like a bank loan, but must be held to maturity. Market volatility has been a deterrent to many would-be issuers of commercial paper as commercial paper rates can swing from very high to fairly low during periods of tight and loose credit.

Tips for Reducing Your Construction Financing Costs There are several strategies small builders can use to negotiate better loan terms to reduce their construction financing costs.

If you have a construction loan with the rate marked up over prime, and prime is running abnormally high relative to other rates in the market, try to renegotiate your rate.

Bargain hard on loans to construct pre-sold homes. Point out to your lender that construction loans on pre-sold homes have a much lower risk-based capital requirement to the bank than loans for speculative construction.

While builders certainly should try to negotiate lower rates and points on construction financing, they should expect only moderate results. Builders should be aware that lenders have funding constraints of their own, as well as regulatory requirements and management objectives, that limit their ability to negotiate lower rates. Also, the lender’s willingness to offer lower loan rates, especially below prime, will depend on the lender’s relationship with the builder and the lender’s perceived risk of the project. Some builders have reported success in getting the mark-up over prime on their construction loans reduced or eliminated. However, builders should be aware that the cost savings from reducing just the interest rate can be modest.

Negotiate Lower Ancillary Fees and Charges A more productive area for negotiating construction financing cost savings can be in the ancillary fees and charges that accompany a loan. Many fees and charges may be pass-through expenses, so negotiation must be done before the expense is incurred. Fees necessary to document the loan, such as appraisal fees, lender’s attorney fees, and inspection fees may be negotiated in advance of the loan. Similarly, closing statements will typically include charges for courier fees, wire transfer fees, loan processing fees and document preparation fees. Often these charges are estimates of what may be incurred during the term of the loan. If the relationship with the lender is strong, the builder might be able to obtain substantial cost savings by negotiating to pay the lender the actual cost of such items as they are incurred.

Builders should scrutinize loan costs with the lender and the lender’s and builder’s counsel. For example, if building is to take place in a newly platted subdivision, it might be possible to negotiate a waiver of the requirement for a boundary survey at closing. Since a newly platted subdivision is unlikely to have significant boundary line disputes or encroachments, the lender’s concerns might be addressed by the foundation survey after construction has started. Similarly, an analysis of title insurance coverage requirements and endorsements may yield savings.

However, like other forms of insurance, title insurance regulations and practices vary widely by jurisdiction, so local counsel should assist in the analysis. Some fees and charges will not be negotiable. For example, recording fees, documentary excise taxes, intangible taxes and other taxes and impositions on the loan documents must be paid according to local laws.

Carefully Manage Draw Schedules and Job Completion Often builders focus on haggling over the loan rate and fees when the builder could more than make up for the cost savings from a lower interest rate through scheduling and job completion. For example, builders can save on interest costs by selling homes promptly after taking their final draw. Builders can also save more in interest costs by drawing more heavily later in the loan term since interest expenses would be accrued over a shorter period of time. ■ For more information about finance negotiation, please contact Michelle Hamecs at 800-368-5242, ext. 8425 or via email at mhamecs@nahb.org.

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SMART CODES Checklist Prepare a good comprehensive plan: Include a housing and economic development element, in addition to land use and transportation Integrate elements of plan Ensure affordability and availability of housing Link implementing regulations to plan Update/evaluate plans and regulations regularly Limit scope and duration of moratoria Implement a land market monitoring/buildable lot inventory system to ensure land availability and densities achieved and examine effects on affordability Allow a mix of land uses, including open space Allow as of right a variety and mix of housing types, including Attached/multifamily Small lot Manufactured homes/modular Accessory units Live-work units Accessible units Allow innovation and flexibility in site planning and design including PUD (planned unit development) Cluster Small lots Higher density TND (traditional neighborhood development/design) option Zero lot line Reasonable street widths Street connectivity Alternative street surfaces Alleys Shared parking, access Setback requirements Alternative storm water and septic system approaches Altered utility installation Allow multiple transportation options Allow/encourage infill and redevelopment Offer incentives for providing amenities Density bonuses Density transfers Tax credits � Reduced fees/rebates � Expedited permitting Plan for and fund infrastructure/capital improvements program (CIP) Coordinate CIP with comprehensive plan Use fair and broad-based funding mechanisms If fees and exactions are imposed, ensure they are properly set (proportionality, nexus, dedication)

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SMART PROCESS Checklist Regularly evaluate process (especially length and complexity), content, consistency of regulation Certainty, stability, predictability and presumption of approval should be guiding principles Uses allowed by right should be allowed to proceed Define key terms and use simple, clear, direct, objective language Simplify and reduce number of zoning districts Minimize reliance on rezonings and special approvals; allow and encourage innovation Conduct pre-application conferences Have a one-stop permitting/central permit information desk Cross-train staff Incorporate Permit tracking system accessible to applicant Use permit ranking/expediting, especially for infill, redevelopment, affordable housing, PUDs, cluster Designate an interdepartmental review coordinator Conduct concurrent, not sequential, reviews where possible Have clear submittal requirements Include ordinance approval process checklists and flow charts Require appropriate level of detail in submittals Allow more objective decisions to be handled administratively Specify timeframes/limits for review and approvals (including public hearings) to ensure clear process and timely decisions Include a “deemed approved” provision Eliminate multiple hearings Minimize administrative remedies that must be exhausted Allow broad and inclusive public participation in formulation of plans and ordinances, but more limited participation at site-specific permit stage Allow sufficient time between approvals with possibility of extensions Allow and use vesting and development agreements Use remediation/mediation as alternatives to appeals Prohibit reopening of settled issues Limit standing to aggrieved parties Allow self-certification of plans and/or inspections by engineers Combine inspections Specify timeframe for inspection of constructed improvements and release of performance bonds or guarantees ■

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How Government Regulation Affects the Price of a New Home PAUL EMRATH, PH.D.

O

ver the past several years, the market for new housing has suffered through a severe slump, with housing starts running at one-third of what had been the normal rate going back to the 1950s. Stumbling blocks on the path to recovery include competition from sales of distressed existing properties, uncertainty about the health of the overall economy and labor markets and difficulty in qualifying prospective buyers for mortgages. Once these particular obstacles are overcome and normality returns, however, home builders and developers will still be contending with markets in which homes cost more to build and sell than would otherwise be the case due to government regulations.

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Table 1. Categories of Regulatory Costs Captured in the Survey Share with zero cost

Share with Normal add-ons (such as carrying costs and return on positive cost equity) where regulatory costs are positive

A. During Development Cost of applying for zoning / subdivision approval

10%

90% points on acquisition loan + interest from application to time lot is sold to builder + developer profit

5%

95% points on development loan + interest from 1/2 time between approval and time lot is sold to builder + profit

Costs incurred after approval / before construction (impact fees, environmental mitigation, etc) Value of land dedicated / left unbuilt

19%

81% same as above

Costs of complying with changes in development standards (setbacks, road widths, etc)

13%

87% same as above

B. During Construction Added cost due to changes in construction codes / standards over the past 10 years

6%

94% points on construction loan + interest from 1/2 time between start and sale + brokers fees + builder profit

Permit, hook-up, impact or other fees paid by builder

8%

92% same as above

Regulations come in many forms and can be imposed by governments at different levels. At the local level, jurisdictions may charge permit, hook-up, and impact fees and establish development and construction standards that either directly increase costs to builders and developers, or cause delays that translate to higher costs. State governments may be involved in this process directly or indirectly. Several states, for example, have adopted state-wide building codes. And although impact fees are imposed by local governments, such fees typically cannot be imposed without enabling legislation at the state level. The federal government can also impact the price of a home—for example, by requiring permits for stormwater discharge on construction sites, which may lead to delays in addition to the hard cost of filing for a permit. These are only a few examples of regulations that builders and developers encounter in practice.

This article introduces new NAHB estimates of the impact that such regulations have on the price of a home. The estimates show that, on average, regulations imposed by government at all levels account for 25.0 percent of the final price of a new single-family home built for sale. Nearly two-thirds of this—16.4 percent of the final house price—is due to a higher price for a finished lot resulting from regulations imposed during the lot’s development. A little over onethird— 8.6 percent of the house price—is the result of costs incurred by the builder after purchasing the finished lot.

The relatively high share of regulatory cost affecting a home during development is particularly significant in the current environment, when there is a low level of developed land in the pipeline, as many builders have stopped acquiring single-family lots and developers have stopped developing them. Thus, in most cases the full range of regulatory costs—those that fall on development as well as construction—will need to be overcome if production and employment in the housing industry are to get back on track.

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The discussion in this article is confined to regulatory costs.

No attempt is made to estimate possible benefits resulting from a particular regulation, or category of regulations, or to argue that costs associated with particular regulations are (or are not) justified. Governments usually have justifications for the regulations they impose, and the justifications are sometimes contentious, but these contentions are better left for elsewhere. The issue of regulatory costs embodied in the price of a house is by itself complex and substantial enough for a separate article devoted to the topic.

Survey Background In addition to a broad range of regulations that needs to be captured, estimating the impact of regulations on house price can be challenging in other ways as well. The impact of regulation on the price of a finished lot is often invisible to the builder who buys the lot, for instance, and developers may not keep records in a way that allows them easily to track delays and translate them into dollar values.

NAHB’s Economics and Housing Policy Group tackled these problems recently, through a series of special questions on the monthly survey that serves as the basis for the NAHB/Wells Fargo Housing Market Index (HMI). In addition to the standard questions used to compute the HMI, the survey often also includes a set of “special” questions on a topic of current interest to the housing industry. The special questions on the costs of regulation were included in the April 2011 survey.

Although the survey is sent to a panel of single-family builders, prior experience has shown that a significant proportion of the panel also has experience in land development. Of 352 builders who responded to a screening question on this topic, 140 (40 percent) indicated that they did indeed have substantial experience in acquiring land and developing lots.

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Table 2. Estimated Impact of Regulation During Development A. Regulatory costs in the price of the finished lot sold to a builder “Low”*

Average

“High”*

“Pure” cost of delay

0.8%

5.9%

11.0%

Cost of applying for zoning / subdivision approval

0.0%

11.6%

23.4%

Costs incurred after approval / before construction

0.7%

13.2%

25.6%

Value of land dedicated / left unbuilt

0.0%

10.3%

20.6%

Impact of changes in development standards

3.2%

16.4%

29.6%

23.0%

57.3%

91.7%

“Low”*

Average

“High”*

Total B. Regulatory costs in the price of the home sold to the ultimate buyer “Pure” cost of delay

0.2%

1.7%

3.1%

Cost of applying for zoning / subdivision approval

0.0%

3.3%

6.7%

Costs incurred after approval / before construction

0.2%

3.8%

7.3%

Value of land dedicated / left unbuilt

0.0%

2.9%

5.9%

Impact of changes in development standards

0.9%

4.7%

8.5%

Total

6.6%

16.4%

26.2%

*Numbers in the “low” and “high” columns are one standard deviation away from the average, bounded at zero on the low end.

Due to the offsetting tendency for certain types of costs to be low in areas where others are high, rows in the “low” and “high” columns will not sum to the total.

Pure cost of delay assumes that governments impose to regulatory costs at all other than the delay, and that raw land is 10.6% (and the finished lot 23.7%) of the final house price.

Increase in final home price assumes the finished lot accounts for 23.7% of the final house price, and increases the dollar cost of the lot by 20.5% to account for points and interest on a loan, brokers fees, and builder’s return on equity.

The April 2011 special questions were structured around the leading case of a developer who acquires land, obtains approval for a subdivision and develops a finished lot for sale to a builder; and a builder who then purchases the lot, constructs a singlefamily home built for-sale on it and sells the home to an ultimate buyer.

A summary of the regulatory costs captured by the questionnaire is shown in Table 1. In addition to listing each cost category, the table shows the share of respondents who said costs in a particular category were typically negligible or zero and the complementary share reporting some positive cost. Each question contained specific instructions to indicate when a particular type of cost was negligible and these were counted as 0 for purposes of computing averages and other statistics, to avoid overstating costs.

Table 1 also describes the additional costs, such as interest on construction loans and return on equity, that builders and developers and homebuyers typically incur when each type of hard regulatory cost is imposed. When estimating these additional costs, long-term assumptions (on items such as loan terms and profit margins) are used to produce estimates that reflect normal economic times, rather than current credit/housing market conditions which are historically anomalous and unsustainable.

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Regulation During Development Question 5 on the NAHB survey asked respondents with land development experience about six different types of delays and hard costs associated with the development process. Item response rates were relatively high, with at least 131 of the 140 eligible respondents providing a usable answer to each of the first five parts of the question. Only 120 responded to the sixth part, which asked about changes in development requirements over the past 10 years. Most of the non-responders to part six indicated that they couldn’t answer because they were not developing lots 10 years ago.

In order to analyze variation in regulatory costs, a consistent sample across all parts of the question is desirable, to allow for the possibility that some costs may be high in areas where others are low. For example, higher costs of applying for subdivision approval could, in theory, be offset by more expeditious processing and reduced time to obtain the approval. The analysis of regulatory costs during development is based on 135 respondents who answered at least three of the first four parts of question 5. In the relatively few cases where a particular response was missing for one of these, it was imputed at the average for those who responded. The imputation has no effect on average cost estimates and, due to the relatively small number of imputations, only a minor effect on the high-low cost spreads reported in Table 2.

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Table 3. Estimated Impact of Regulation During Construction A. Regulatory costs as a share of construction costs “Low”*

Average

“High”*

Permit, hook-up, impact, other fees paid by builder

0.0%

5.8%

12.3%

Changes in codes / standards over past 10 years

1.1%

8.3%

15.5%

Total

3.3%

14.1%

24.9%

B. Regulatory costs in the final price of the home sold to the ultimate buyer “Low”*

Average

“High”*

Permit, hook-up, impact, other fees paid by builder

0.0%

3.6%

7.5%

Changes in codes / standards over past 10 years

0.6%

5.1%

9.5%

Total

2.0%

8.6%

15.3%

*Numbers in the “low” and “high” columns are one standard deviation away from the average, bounded at zero on the low end.

Due to the offsetting tendency for certain types of costs to be low in areas where others are high, rows in the “low” and “high” columns will not sum to the total.

Increase in final home price assumes construction costs account for 52.9% of the house price and are increased by 16.0% to account for points and interest on a loan, brokers fees, and return on equity.

The estimates in Table 2 show that, on average, regulation accounts for a little over 57 percent of the price of a developed lot.

The average impacts of the individual components range from just under 6 percent for a “pure” cost of delay to over 16 percent for changes in development standards, such as setbacks and road widths.

The pure cost of delay is the estimated cost that the delays of waiting for approval and complying with development regulations would impose in the absence of any other type of regulatory cost. Delay also factors into the other regulatory costs listed in Table 2 through higher interest payments on land acquisition and development loans.

Follow-up conversations with survey respondents revealed that some of them were able to estimate the cost of current development standards more easily than the incremental cost due to changes over the past 10 years. The survey thus provides data on costs associated with development requirements, but these should probably not be rigidly interpreted as costs that materialized over precisely the last 10-year period.

Several land developers expressed an interest in seeing a range of regulatory costs, rather than just averages. For that reason, Table 2 shows “high” and “low” costs, calculated at one standard deviation from the average. Other ways to generate a high-low spread are difficult to implement here due to the nature of the survey data, especially the large share of respondents providing information about costs during construction but not development. In practice, most of the highs shown in this article occur at roughly the 90th percentile of a cost distribution (i.e., roughly 10 percent of respondents report costs at least this high).

The averages in Table 2 are additive, but the “highs” and “lows” generally are not. At the low end of the scale, it is relatively common for developers to report zero cost for one category of regulation, but not for all five. Thus, the “low” cost of regulation imposed during development is 23 percent of the finished lot price, much higher than the sum of the “lows” for individual cost categories. www.homebuilders.org

The survey sample was neither large enough nor stratified in a way to permit detailed geographic analysis, but it was possible to see that regulatory delays tended to be somewhat longer, and hard costs of applying for subdivision approval somewhat higher, in the Northeast Census region.

Table 2 also shows regulatory development costs as a percentage of the final price of the house. The calculations assume that a finished lot accounts for 23.7 percent of the house price and that the builder also incurs associated costs that increase this by 20.5 percent based on the considerations described in Table 1. The bottom line is that regulation during development on average accounts for 16.4 percent of the final price of a single-family home.

Regulation During Construction The survey concluded with a two-part question on regulation during construction. Estimates of regulatory costs during this phase of the project are based on 302 respondents who provided usable answers to either part of the question. A total of 294 answered the first part, and 283 answered the second, which dealt with changes in building codes over the past 10 years. Most who answered part one but not part two indicated that they were not building homes 10 years ago. Two responses indicating that code changes had caused construction costs to increase by more than 35 percent were deleted as unreasonably high outliers. In cases where usable answers were provided for one part of the question but not the other, the missing value was imputed at the average for those who provided responses. The resulting impacts of regulation on construction costs are shown in Table 3.

The estimates in Table 3 show that, on average, regulation accounts for a little over 14 percent of construction costs. Of this, a little under 6 percent is the cost of actual fees, and the rest is the cost of changes to construction codes and standards over the past 10 years.

SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

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In contrast to development requirements, respondents seemed to have little trouble assessing the impacts of construction code changes over the past 10 years (provided they were building homes 10 years ago). Although it doesn’t necessarily imply that recent code changes have been in some sense excessive, it is still useful to remember that, as of 10 years ago, building codes had already been well established in most parts of the country for decades and typically revised many times during that span.

Regionally, the impact of code changes on construction costs was higher in the Northeast and West than in the Midwest and South. Actual construction fees paid by builders were higher in the West than in the other 3 regions. The West region, of course, includes California where particular types of fees are known to be especially high. In the 2010 survey of impact fees conducted

by Duncan Associates, for example, the state average impact fee for a standard single-family home in California was nearly $32,000—over twice the average fee for the next highest state (Oregon, which is also in the West).

Table 3 also shows regulatory costs imposed during the construction phase as a percentage of the final house price. These calculations assume that construction costs account 52.9 percent of the house price and that the costs are increased by 16.025 percent before being passed on to the buyer. The bottom line is that regulation imposed during actual construction of a single-family home accounts for, on average, 8.6 percent of the home’s final sale price.

Summary and Conclusion This article describes that way NAHB has recently addressed the issue of regulatory costs embodied in the price of a home through special questions on the monthly survey that underpins the NAHB/Wells Fargo HMI. Responses to these questions were averaged and associated costs were included using average longrun assumptions about loan terms, profit margins and time lags between different phases of the construction project to show that, on average 1) regulation imposed during development accounts for 16.4 of the price of a home built for sale, 2) regulation imposed during construction accounts for 8.6 percent of the price.

Thus, in total, 25.0 percent of the price of an average singlefamily home built for sale is attributable to regulation imposed by all units of government at various points along the development/construction process (Table 4).

The table also shows the spread between “high” and “low” costs of regulation, using a conventional statistical technique is used to control for lack of perfect correlation between regulatory costs incurred during development and construction.

Other tables in the article break down these cost impacts according to different categories of regulation—delays in the development process, changes in building codes, etc. The breakdown may be useful for local jurisdictions trying to assess how much the affordability of new homes could be improved by reducing particular regulatory burdens, or how affordability may be adversely impacted by new regulations.

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MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Table 4. Total Regulatory Costs in the Final Price of a Home “Low”*

Average

“High”*

Regulatory costs incurred during development

6.6%

16.4%

26.2%

Regulatory costs incurred during construction

2.0%

8.6%

15.3%

14.1%

25.0%

35.9%

Total

*Numbers in the “low” and “high” columns are one standard deviation away from the average.

Because costs incurred during development and construction are not perfectly correlated with each other, rows in the “low” and “high” columns will not sum to the total.

Estimates of regulation in the price of a new home may also be useful in national discussions. Over the past few years, for example, it has become relatively common for proposed federal legislation to contain provisions encouraging local jurisdictions to adopt particular types of building codes or land development patterns. An informed discussion of these proposals should recognize that regulation already on average accounts for onefourth of a new home’s purchase price.

Several other, related items policymakers way wish to keep in mind: employment in residential construction is down almost 1.5 million from its peak; a similar number of jobs have been lost in related industries (such as manufacturing, trade, and professional services) because homes are not being built; builders are already reporting new homes appraising at less than the cost required to produce them.

Thus, in order to restore the millions of jobs lost in home building and related industries—even if the macro economy improves so Americans return to normal rates of household formation and home buying, and even if credit markets improve so loans can be obtained to build and buy new homes—it would be necessary to overcome regulations that already account for 25 percent of the price of a new home in markets where new homes sometimes appraise for less than it costs to build them.

The regulatory cost estimates in this article could only be produced thanks to the efforts of individual builders who provided high-quality answers to a fairly onerous set of survey questions. The NAHB Economics and Housing Policy Group would therefore like to express gratitude to the panel of builders who responded to the April 2011 HMI survey and took the time to answer the questions on regulatory costs. ■ Paul Emrath is with the Economics and Housing Policy Group of the National Association of Home Builders. For more information on this study including the full survey questionnaire and the article appendix please visit www.housingeconomics.com or contact Paul Emrath at 800-368-5242, 8449 or via email at pemrath@nahb.org.

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green building BUILDING HOMES – BUILDING SUCCESS

Turning saw dust into “magic dust” This may be the single most important thing you can do to define your signature as a builder. This is about providing genuine evidence that you care about your buyer’s satisfaction.

T

o continue with my series of exploring your signature as a builder; it’s your brand, it’s what you stand for, and it’s how people remember YOU. It’s not just a house, it’s a house by…

This may be the single most important thing you can do to define your signature as a builder. This is about providing genuine evidence that you care about your buyer’s satisfaction.

First, two points to consider –

John Smith – A Builder you can Trust

1 - There are some buyers who are very difficult to work with and almost impossible to please.

For this series, I outlined the key elements that I believe should be part of your signature as a builder. They are: 1. Responsive service – you should genuinely care about your customers. They are making one of the biggest decisions of their life to buy a home from you. They need to know that you care about them. And they will typically pay more for that comfort.

2. Fundamental Construction Quality – not claims that “I build a great house” but proof! Show them the construction details that are your standard.

3. Follow through and follow up – you will have problems; not everything is perfect. Your customers are people too; they know that mistakes get made. What is important is to have an aggressive policy in place to follow up on issues and correct them quickly and carefully.

4. Manage expectations – timber frame residential construction is not a perfect process. A buyer orientation program to help the average homebuyer understand what to expect from their new home will reduce complaints and increase your credibility.

5. Responsive Service – I know, that’s the same as #1, but it can’t be overemphasized. And if the message comes from the President/Owner of the company, that’s even better.

In the last issue, we looked at Fundamental Construction Quality.

In this issue, let’s look at FOLLOW UP AND FOLLOW THROUGH in more detail.

Those buyers are, however, the exception, not the rule. Your policies about customer service should be driven by the majority, not the minority.

2 - Good customer service is also about managing customer expectations. As an example of great

customer service, LL Bean has a “no questions asked” return policy. You can return an item years after it was purchased if you don’t think it performed as expected. The policy has added greatly to LL Bean’s reputation and the cost is minimal since most customers will not abuse such a policy. LL Bean tolerates the minority to gain the benefit of service to the majority.

So what should your customer service program look like? Here are some ideas I have gathered from working with a variety of small (less then 50 houses per year) and medium (50 to 500 hours per year) builders.

1. Be proactive about a successful transaction with our customer. Let them know that their

satisfaction is important to you.

2. At the time of closing, explain your follow up policy to your customer, and give them a copy of

the key points including numbers to call if they have concerns.

3. Follow up after they have moved into the house and ask if they are satisfied. Ask if there is

anything you can do for them. Sometimes, just stopping by to explain the operation of some component, appliance or control can make a huge difference with you customer. This type of follow up should occur at: a.) 30 days b.) 90 days c.) 6 months d.) 1 year 4. Have a defined, written policy for dealing with complaints and concerns from buyers. And share

that with your entire staff and subcontractors

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SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

39

green building 5. Define complaints and concerns. a. A concern is anything more than a simple

question about the operation of some fixture or appliance. It’s better to overreact to a concern with a quick phone call to be sure the customer’s question has been answered than to ignore it and have it turn into a complaint. b. A complaint is where it is obvious that the customer has an expectation for correction or other action to resolve the complaint.

6. Have a highly visible form (yellow for concern, orange for complaint) available to everyone working on your projects that can be filled out when a complaint or concern is expressed by a customer.

7. Have a clear destination for that form. I recommend that the President/owner of the company sees all of them.

8. Have space on the form for comments, customer information, follow up action and resolution.

9. Have a policy about returning phone calls of any kind. As an expert witness in construction

litigation I have seen many disputes explode into major legal battles that started from a lack of response to a phone call. The best programs I have seen used by builders like you include the following: a. Respond to all phone calls within 4 hours b. For any concerns or complaints that require a visit to the house, schedule that visit within 24 hours of the call c. For problems that can be handled with your own crew, correct the problem within 24 hours of your visit to the house d. For problems that require a subcontractor’s involvement, complete that work within 48 hours of your visit, subject only to availability of materials. e. Communicate regularly with your customer so they know what to expect 10. Follow up with a phone call about a week after you have handled the problem to confirm that your customer is satisfied.

11. Document everything that you have done.

If a dispute does develop, good documentation will help put you in a more defendable position.

There is a form you can use for complaints and concerns, and we also have a draft customer care form you may want to use. If you are interested in seeing these forms, please send me an email at the address below.

Defining your signature so buyers speak well of you is about being proactive to confirm each customer is satisfied. It takes some time but it

40

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

will pay off well. Word of mouth is the most powerful advertising you can have.

And, just as I said about fundamental construction quality, there are two more points to keep in mind for follow through and follow up that should be a major part of your signature.

1. Details and installation matter – most of the performance issues we investigate in homes turn out to be related to the installation of the materials, not the materials themselves. Train, manage and monitor your people well. And tell you buyers about your training program.

2. Your buyers are a good source for defining your quality – talk to those who bought house from

your FIVE YEARS AGO. See what they think.

Two things will result; some great testimonials and some solid information on how you can continue to improve your home and your signature.

Developing your signature isn’t simple, but it works! There are builders I know who spend virtually nothing on advertising. Their customers hear of them through reputation and word of mouth. And those same builders are usually able to charge a bit more for their homes. They realize they are a builder selling a service not just a home.

For them saw dust has become “magic dust.”

John Smith – A Builder you can Trust As you read my columns, if you have questions, please feel free to send me an e-mail (hamoooney@criterium-engineers.com), I will try to respond in a future issue or respond to you directly. Working together, my goal is to help explore new and better ways for you to build homes that you can be proud of and that will turn your customers into some of your best sales people!

Criterium Engineers has specialized in residential construction for more than 50 years, with more than 60 offices in more than 30 states. We have evaluated more than 750,000 buildings. H. Alan Mooney, P.E, President of Criterium Engineers, is a licensed, Professional Engineer in 8 states, with more than 35 years experience and has been the author and presenter for various NAHB programs, mostly on construction quality. For more information, please visit www.criterium-engineers.com and www.criterium-quality.com.

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Contact Felicia Fleming at 410-265-7400, ext. 115 for more information.

Do Business With Your Fellow HBAM Members.

“Building Your Business Through Association” is our philosophy. HBAM members believe that they should support those who support the building industry.

NETWORK with other companies in the building industry to gain new contacts as well as strengthen your current ones at the Celebrity Chef Night and Auction, sporting events, chapter and council meetings and more.

KEEP UP-TO-DATE about pertinent legislative and regulatory issues on a local, state and national level.

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ADD CREDIBILITY for your company in the building industry as well as with the general public by being associated with one of the largest building associations in the country.

WWW.HOMEBUILDERS.ORG is designed to serve both consumers and those in the building industry. You can access the latest legislative news, find out about member benefits, profile your company in the online directory or register for an event. Consumers can visit the HBAM home page to find you and other builders or suppliers in their area.

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Thank You HBAM Associate Members September is Associate Appreciation Month and we would like to thank you for being an active member of the Home Builders Association of Maryland. You are helping us make the industry stronger and building our influence. As always, we encourage our Members to Do Business with Members.

1st Enrgy 1st Mariner Bank 2-10 Home Buyers Warranty 84 Lumber A & A Trophy House, Inc. A Class Hardware & Garage Doors A Glass Block Vision, Inc. A Touch of Brass A.C. & R. Foam Insulators LLC. A.L.L. Construction, Inc. AB Consultants, Inc. ABC Equipment Rental Abramoff, Neuberger & Linder, LLP Academy Mortgage Corp. and The Rosenblatt Group Acton Mobile Industries Adelberg, Rudow, Dorf & Hendler The Adler Corporation Advance - The Document Specialists Advantage Group, Inc. Aero Energy Aerosol Monitoring & Analysis Aireco Supply, Inc. Alfred L. Singer All Pro Installed Building Products Alliance Material Handling, Inc. Allied Building Products Corp.

Allied Trailer Sales & Rental Amanda Austin Interiors American Community Management Inc. American Infrastructure American Paving Fabrics AmeriGas Propane Anarex Inc. Anchor Title Company, LLC Andersen Windows, Inc. Annandale Millwork & Allied Systems The Annapolis Lighting Co. Appliance Distributors Unlimited Architecture Collaborative, Inc. Armstrong Cabinets Products ARS-American Residential Services LLC Artelye Marble & Granite Assembly Line Inc. Associated Insurance Management, Inc.

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AT & T Advertising Solutions Atlantic Aluminum Products Atlantic Forest Products Atlas Stone Fabricators, Inc. AVG, LLC Axiom Engineering Design, LLC AZEK Building Products B & K Distributor, Inc. Baltimore Floor Works, Inc. Baltimore Gas & Electric Company The Baltimore Sun Baltimore/Central MD New Home Directory Bank of America Home Loans BankAnnapolis The Bartley Corporation Bay Bank, FSB Bay Engineering Inc. BB&T Beard’s Landscape Company Benchmark Engineering Inc. Benfield Electric Company, Inc. Benjer, Inc. Bernie Schultz Realty Betco Supreme, an Oldcastle Company BGE Home Products & Services, Inc. Birckhead Electric Inc. Bison Drywall, Inc. Blue Stream Services, Inc. Bluehouse Architecture, LLC BlueLinx Corporation Blumenthal, Delavan & Williams, P.A. Bob Lucido Team LLC Remax Advantage Realty Bohler Engineering Boise Cascade Bonded Builders Warranty Group Bowen & Kron Enterprises Inc Bowman Consulting Group Bradco Supply Corporation Bridgewater Wholesalers, Inc. Broadview Apartments Company Broan-NuTone LLC Bruce L Jones Contractor, Inc. Bryant Group Inc. Builder’s Advantage, LLC Builders’ Design & Leasing

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Builders FirstSource Burgemeister-Bell, Inc. C & R Insulation, LLC. California Closets Capital Carpets, Inc. Capital Mortgage Finance Corp.

Capitol Strategies, LLC Carlyn and Company Interiors + Design Carney, Kelehan, Bresler, Bennett & Scherr LLP Caron Industries Carpentry & Hardware Services, Inc. Carroll Insulation Co., Inc. Carroll Land Services, Inc./TA CLSI Carrollton Mortgage Services CB Flooring, LLC CDS Logistics CECO, Inc. Century Engineering, Inc. Century Stair Company Chaney Enterprises Chang’s General Construction, Inc. Charles A. Klein & Sons, Inc. Charles L. Stromberg, CPA, LLC Charlie Mann Electric, Inc. Chesapeake Building Components, Inc. Chesapeake Drywall & Paint Inc. Chesapeake Systems Service, Inc ChesapeakeHome Magazine Choice Stairways, Inc. Christopher Consultants, Ltd. Cinder & Concrete Block Corp.

Cindy Plackmeyer Marketing Circa, LTD CJ Miller LLC Classic Building Specialties, Inc. Classic Group, LLC Classy Cozy Creations CMW Co. Inc. CNA, Inc. Cohee Insurance Agency Colbert Matz Rosenfelt, Inc. The Columbia Bank Columbia Kitchens of MD, Inc. Columbia Roofing, Inc. Commonwealth Construction Co. Inc. Community First Bank

Construction Applicators Chesapeake LLC Construction Solutions Unlimited, LLC Core Sales Group LLC Cornerstone Closets, LLC Creative Laundry Systems Creative Vinyl Products Cummins Power Systems LLC Curtis Martin Photo, Inc. D & S Drywall Inc. D W Taylor Associates Inc. D. J. Adams Enterprises D.S. Thaler & Associates, Inc. Dabbco Daft-McCune-Walker Inc. Dans Company Inc. Deelite Design LLC Dek Drain Delmarva Trailer Sales & Rentals DeMario Design Consultants, Inc. Design Collective, Inc. Design House Kitchens & Appliances, LLC Designability, LLC Designer Surfaces Unltd.

Development Facilitators, Inc DeVere Insulation Company Dewberry DH Marketing Dico Inc. Diversified Investment Associates Dominion Electric Supply Company Dorman’s Lighthouse & Design Dow Building Solutions Drum Loyka & Associates, LLC Duane Morris, LLP Duradek Mid Atlantic East Coast Building Supply Co. Inc. Eastern Alliance Insurance Group Eastern Stair Builders, LLC ECS Mid-Atlantic, LLC Efficient Home, LLC Electrolux Enterprise Elevator Products EnviroProjects EnviroSolutions, Inc. EP Henry Ernest Maier, Inc.

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Thank You HBAM Associate Members Essex Bank Executive Floors, Inc. Farm and Home Excavating Fastsigns #544 Ferguson Bath & Kitchen Gallery Fireplace Solutions Fireside Hearth & Home First Home Mortgage Corp Fisher, Collins & Carter, Inc. Fletcher Wood Solutions Floors Etc. Form Services, Inc. Frederick Ward Associates, Inc. The Fretz Corporation G1440 Gaines & Company, Inc. Gamma Engineering GBL Custom Home Design, Inc. GE Appliances Genuine Title, LLC George W. Stephens, Jr. & Assoc., Inc. Geo-Technology Associates, Inc. Gessner, Snee, Mahoney & Lutche, P.A. Global Hybrid Roofing Solutions/ Innovative Building Solutions Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC Gorfine, Schiller and Gardyn, P.A. gotugo Gray & Son, Inc. Gray Insurance Group, Inc. Green Building Institute Greenhorne & O’Mara, Inc. Greenskeeper Environmental Greenspring Energy GRK Fasteners Ground Loop Heating & Air Cond., Inc. Group Benefit Services Guardian Home Technologies Gutschick, Little & Weber, P. A. Gutter Helmet Systems H & H Woodworking, Inc. Habitat for Humanity of the Chesapeake Hall Mechanical & Associates Inc. Hanley Wood Market Intelligence Harborside Village Harbour Sign & Graphics, Ltd. Hargrove, Inc. Harkins Builders, Inc. Heil Builders/MODU-TECH

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Henry J. Knott Masonry Inc. Herbert, Rowland & Grubic, Inc. Heritage/K Benefit Solutions Hertzbach & Company, P.A. Hodes, Pessin & Katz P.A. Hogan Companies Hohne Pools Hold Time Advantage Home Construction Services, Inc. Homebuilders Realty Services, LLC Homestead Building Systems, Inc. HomeTeam Pest Defense HomeTech Publishing Hopkins Federal Savings Bank Hord Coplan Macht, Inc. HPL Miller Group HS Technology Group Huber Engineered Woods, LLC Hyatt & Weber, LLP iLevel by Weyerhaeuser IMRE Injured Workers’ Insurance Fund inSight Marketing Services Interior Concepts, Inc. J. W. & Sons, Inc. J.F. Sobieski Mechanical Contractors, Inc. James Hardie Jerry’s Siding & Roofing, Inc .

John H. Myers & Son, Inc .

Johnson Hydro Seeding Corp.

JSM Installation, LLC K.C. Company/Pella Windows & Doors Kandel, Klitenic, Kotz & Betten, LLP Karen Renee Interior Design Inc. Katz Abosch KCI Technologies, Inc. KCW Engineering Technologies, Inc. KE Gilligan & Associates Keener Kitchen Mfg. Co. Keller Stonebraker Kim Engineering, Inc. King Architectural Metals Kingspan Solar Kitchen and Bath Creations Kleer Lumber LLC KLNB-LAND Kramon & Graham, P.A. KTGY Group, Inc. The L & L Company L & L Supply Corporation L. H. Cranston & Sons, Inc. Lakeside Title Company

Lansing Building Products Leafguard & Beldon Home Solutions Leisure Specialties Lightning Golf & Promotions, Inc. Linowes and Blocher LLP Lite Steel Technologies America LLC The Loewen Window Centers Loiederman Soltesz Associates, Inc. Long Fence Company, Inc. LP Corp.

Lyons & Sucher Advertising M & R Drywall & Metal Stud, Inc. M & R Floors, Inc. M & T Bank M. T. Laney Co. Inc. M.J. Wells & Associates, Inc. M.R. Stone, LLC Madison Square Federal Savings Bank MAF & Associates, LLC Mailbox Man of MD, Inc. Martin & Phillips Design Associates, Inc. Martin Architectural Group

MartinoBlum Martin’s Caterers, Inc. Marvin Window & Door Planning Centre Maryland Home Improvement Guide Maryland Life Magazine Maryland Management Company Maryland Newsletters Maryland Pools Matis Warfield, Inc. Maxalea, Inc. Mayer Brothers, Inc. Mays & Associates McCormick Paint McCrone Inc McMillan Metro, P.C. Meetlocalbiz.com Mercer Carpet One Inc. Merillat Industries LLC Messick Group, Inc. MetLife Home Loans Metro Engineering Services Metro Study Corporation

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Thank You HBAM Associate Members Metropolitan Fire Protection Michael Barlow Well Drilling Service, Inc. Mid-Atlantic Deck & Fence Co., Inc. Milton W. Bosley & Co., Inc. Miss Utility Mister, Burton, Palmisano & French LLC MNET Mortgage Model Home Interiors Modern Foundations, Inc. Moen Incorporated The Moran Group, LLC Morgan E. Russell Inc. MRF Associates N. M. Phillips Company, Inc. Naka, Huttar & Oldhouser, LLP NDG Communications, Inc. Network Media Partners Neuberger, Quinn, Gielen, Rubin & Gibber, PA Neu-Valley Nurseries, Inc. New Home Development Strategies The New Home Sales Connection, LLC, Next Day Blinds Niles, Barton & Wilmer, LLP Norandex Building Materials Distribution Norbord Industries North American Title Company North American Trade Schools North Star Foundations Inc. Northfield Sales Company, Inc. The Northrop Team of Long & Foster Realtors Northwest Savings Bank One Source Associates Inc. ONeil Interactive, Inc. Out of Sight Home Theater Overhead Door Co. of Baltimore, Inc. P Four Parksite Pat Scherer & Associates The Patapsco Bank Patriot Electric Paulis Company The Pennoyer Group Phantom Screens Pitheon Marketing Productions, LLC PNC Bank

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Potomac Valley Brick & Supply Co. Precision Drywall Services LLC. Premier Lifts Inc. PremierGarage Presidential Bank PrimeLending ProBuild ProCoat Applications, Inc. Professional Warranty Service Corporation ProSource Wholesale Floor Covering Purple Cherry Architects Quality Kitchens & More Quality Stone Veneer, Inc. Quality Window & Door, Inc. R & R Components, Inc. Rapid Sign Center Raymond C. Maule & Son, Inc. REDC Builder Division Redwood Mortgage Services Reeb Millwork Corp.

Regional Siding Systems LLC Reico Kitchen and Bath Reliable Contracting Company, Inc. Reliable Roll-Off, LLC Rentals Unlimited, Inc. Residential Elevators Inc. Residential Realty Group, Inc. Residential Title & Escrow Co. Residential Warranty Company LLC Resource House Revere Building Products Richard F. Kline, Inc. Rita St. Clair Associates Inc. RLO Contractors, Inc. RMS Retirement Marketing Solutions Robert B Rehman & Sons Rodgers Consulting, Inc. Rojahn Company Roll-Off Express, Inc. Ronald W. Johnson Assoc., Inc. TheRoof Center, Inc. Rosenberg, Martin, Greenberg, LLP Roy Kirby & Sons, Inc. Royal Gutter Service Ruff Roofers, Inc. Rutter Project Management S & L Plumbing, Inc. Sales Mark, LLC SAL’S LLC Sandy Spring Bank Saratoga Insurance Brokers, Inc.

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Schaefer Siding Company, Inc. Schagrin Gas Co. Schluter Systems L.P. Sears Contract Sales SEH Excavating Inc. Shannon Comer Architects, Inc. Shelter Systems Limited Shepherd & Sons, Inc. Sherwin-Williams and Duron Paints & Wallcoverings Shone Lumber Co. Signature Companies Silver Screen & Sound, Inc. Silver-top Manufacturing Co., Inc. The Simmons Management Group Inc. Simpson Strong-Tie, Company Site Resources, Inc Slavie Federal Savings Bank Smart Vent, Inc. SmartBox Portable Storage Smith, Gildea & Schmidt, LLC Snavely Forest Products Corp.

Southern Maryland Oil, Inc. Southern Pacific Supply Co., Inc. Southern Trust Mortgage Sport Systems, LLC Starr Systems Design Sterling Mirror Company Stone Marketing Resources Stonemark Tile The Strata Group Striker Construction Co., Inc. Structural, LLC Studio Z Ltd. Style Crest, Inc. Suburban Propane Summit Insulation SunTrust Mortgage, Inc. Superior Walls by Weaver Precast Supreme Windows and Doors Susquehanna Bank Swift Flooring Swirnow Building Systems T. J. Angelozzi, Inc. T.W. Perry Talkin & Oh, LLP Taylor Wiseman & Taylor Tempest Realty Inc. Thomas, Bennett & Hunter, Inc. Thos. Somerville Co. Timberlake Cabinetry TimberTech Topper Construction Company

Total Energy Concepts, Inc. The Traffic Group, Inc. Tri County Hearth & Patio Tricon Construction Inc. Tyco Fire Protection Products Tydings & Rosenberg LLP U.S. Utility Corp United Marble & Granite Company LLC United National Construction Co, Inc. United Products Distributors, Inc. Universal Forest Products, Inc. Van Sant Plumbing & Heating, Inc. Velux America Inc. Verizon Wireless Versatex Trimboards The Vertical Connection Carpet One Vintage Security LLC W.M. Davis, Inc. Wally’s Iron Works, Inc. The Washington Savings Bank Waterside-Swimming pool Design and Build, LLC Weichert Realtors Property Concepts Weichert Realtor’s New Colony Weiskopf Building Contractors, Inc Wells Fargo Home Mortgage White Hall Plumbing + Hydronics Whiteford, Taylor & Preston LLP Whitney, Bailey, Cox & Magnani, LLC William H. Metcalfe & Sons, Inc. Williams Scotsman, Inc. Willis Concrete Construction Inc. Winegrad, Hess, Friedman & Levitt, LLC Wire Tech Woodway & Arboria Brands WPM Real Estate Group The YGS Group York P-B Truss, Inc.

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governmentaffairs Anne Arundel County HBAM Supports Workforce Housing Legislation

Councilman Daryl Jones introduced legislation that, if passed, will encourage workforce housing. Bill 56-11, which had a hearing on Monday, August 15, 2011, would grant relief from the capital facilities charges if a development meets a number of restrictions, including all households must not exceed 120 percent of the median income for the Baltimore Primary Metropolitan Statistical Area; at least 10 percent of home ownership units and at least 40 percent of rental units must be occupied by a household with an income that does not exceed 60 percent of the median income for the Baltimore Primary Metropolitan Statistical Area. In addition: the project must be located on a parcel that abuts at least a minor arterial road; the project must be served by public water and sewer; and the Anne Arundel County Council must approve the development by resolution. Lastly, there are restrictions on density and impervious surfaces. In order to make this work, the bill includes relief from the Anne Arundel County Capital Facilities Connection Charges. HBAM issued a letter of support and HBAM Chapter leadership testified in favor of the bill at the public hearing.

Baltimore County Baltimore County set to begin 2012 Comprehensive Zoning Map Process (CZMP)

September 1, 2011 marked the beginning of the Open Filing Period for the Countyâ&#x20AC;&#x2122;s Comprehensive Zoning Map Process (CZMP), which takes place every four years on an exact schedule specified in the County Code. Between September 1 and October 14, any person, association, corporation, county agency or other entity may, upon payment of the specified fee, file a petition for a zoning reclassification on any property in the county. Ultimately, the County Council decides on each issue whether to retain the existing zoning or to enact a different zone(s) or district(s).

Generally, each issue is a single property, but an issue may cover many adjoining

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properties and might even cover many hundreds of acres. The zoning on all properties which were not issues is re-enacted without change.

The County Council vote on each issue must occur before September 16, 2012. To learn more about CZMP 2012, go to www. baltimorecountymd.gov/czmp

Cecil County

on the HBAM website under the Howard County Chapter page. Please be advised that DPZ is the process of updating the Forest Conservation Manual and when ready sometime this fall, DPZ will invite a HBAM committee to review the changes before the Manual is adopted. For more information, please contact Michael Harrison at 410-265-7400.

HBAM Fights Against Fee Increases

Maryland

The Cecil County Dept. of Public Works has recommended that the Cecil County Board of Commissioners enact a 50 percent increase in the Wastewater Connection Charges. The fee would go up to $9,000 per unit (it is currently $6,000 per unit). There are no grandfathering provisions and the increase would be effective 30 days after approval. This proposal was introduced in June 2011. The HBAM Upper Chesapeake Chapter has worked with the Commissioners to successfully delay the vote and secure a more favorable outcome.

Changes to the Water Well Drilling Forms, as issued by the Maryland Department of the Environment, Water Management Administration.

Howard County Howard County eliminates forest retention surety and enforcement procedures effective June 15, 2011

Effective June 15, 2011, the Howard County Forest Conservation Program no longer required financial security in the form of a bond, an irrevocable letter of credit, or other security approved by the County for establishment of forest retention easements on subdivision and site development plans approved by the Department of Planning and Zoning as required under Section 16.1209 of the Howard County Code.

These changes will be formally incorporated into the Forest Conservation Regulations and Manual in a future edition. In the interim, the Forest Conservation Program change to eliminate the posting of financial security for forest retention easements for all subdivisions and site development plans will be enforced through the memorandum released by Kent Sheubrooks and available

Effective July 1, 2011, the WMA began utilizing new well forms to transition from the current NAD 27 coordinate system to the use of WGS 84. The new forms can be obtained through local Approving Authorities and MDE on an incremental basis only. MDE advises that until the current stock of forms are depleted, you can use the existing forms provided that you supply the same information that is required on the new forms.

The new form incorporates changes to the State of Maryland Application for Permit to Drill Well (Green Form), the State of Maryland Well Completion Report (Yellow Form) and the Well Abandonment-Sealing Report Form (White Form).

For a summary of form changes, please visit the HBAM website or contact Michael Harrison at 410-265-7400. â&#x2013; HBAM Government Affairs Michael Harrison Director of Government Affairs Howard, Baltimore and Carroll Counties michael@homebuilders.org 410-265-7400, ext. 109 Jeff Tosi Director of Government Affairs Anne Arundel, Harford and Cecil Counties and Baltimore City jeff@homebuilders.rog 410-265-7400, ext. 101

SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

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stats&facts Who are the top builders?

The top 20 builders for the Baltimore area and their year to date closings as of June 2011

Sales are picking up for 2011

BY BROOKE BURNS

435

NVR

103

Lennar

96

Ryland Homes

60

Beazer Homes

Richmond American 50 Homes - MDC 44 Sturbridge Homes 34 33 30 25

Williamsburg Homes, LLC Toll Brothers Bozzuto & Associates Pulte-Del Webb-Centex

Turner Development Group

22

Mitchell & Best Homes

19

DR Horton

16

Ameristar Homes

16

Trinity Homes

15

Midtown Baltimore LLC

15

K Hovnanian

14

Humphrey Development

14

Dorsey Family Homes

13

Koch Homes

12

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Most economists have said that 2011 will mark the last year of the housing recession before we see an increase in sales. Statistics for 2011 show that as we move further into 2011 sales are in fact picking up. Looking at 2Q2011 compared to 1Q2011 sales have increased anywhere from 10 to 50 percent by county quarter over quarter in the Baltimore MSA. We have also seen prices increase in most counties. We do recognize that spring tends to bring out higher sales numbers in the housing market; however, it shows that activity has picked up and we will never undermine that in a tough economy! The Washington DC MSA shows a similar trend.

To point out another bright spot among housing sales, both Foreclosure and Reo transactions are significantly down in the first two quarters of 2011 compared to that of the first two quarters of 2010. In Baltimore foreclosures are down about 70 percent year over year in the second quarter of 2011 compared to that of 2010. REOâ&#x20AC;&#x2122;s are both down; 26 percent in Baltimore and 43 percent in Washington.

While the National Builders seem to be dominating in many high activity areas we see some local regional builders hanging in there! Here is a look some of the top builders for the Baltimore area and their year to date closings as of June 2011. â&#x2013; Brooke Burns is the Regional Sales Director for Hanley Wood Market Intelligence and can be reached at bburns@hanleywood.com or 202-729-3678.

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

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Baltimore Region - Average Sales Amounts By County Carroll County

Baltimore City

Existing

New Sale

Q1 2011

$254,875

$344,401

Q2 2011

$283,803

$338,815

Baltimore County

Existing

New Sale

Q1 2011

$134,925

$305,456

Q2 2011

$168,736

$287,672

Existing

New Sale

Q1 2011

$237,131

$362,497

Q2 2011

$244,621

$329,619

Harford County

Howard County

Existing

New Sale

Q1 2011

$249,472

$323,145

Q2 2011

$257,947

$351,551

Queen Anne’s County

Existing

New Sale

Q1 2011

$376,369

$477,497

Q2 2011

$403,588

$502,523

Existing

New Sale

Q1 2011

$357,164

$296,885

Q2 2011

$340,660

$351,258

Anne Arundel County Existing

New Sale

Q1 2011

$357,549

$329,316

Q2 2011

$331,084

$358,272

Washington, DC Region - Average Sales Amounts By County Q1 2011 Existing

Q1 2011 New Sale

Q2 2011 Existing

Q2 2011 New Sale

Alexandria (Virginia)

$433,567

$622,971

$504,542

$569,020

Arlington (Virginia)

$517,670

$785,621

$562,787

$940,188

Calvert County (Maryland)

$297,837

$464,073

$269,644

$374,778

Charles County (Maryland)

$230,188

$348,515

$222,058

$326,002

Clarke County (Virginia)

$268,817

$328,500

$345,643

$175,000

District of Columbia

$475,876

$416,360

$506,499

$418,226

Fairfax County (Virginia)

$429,207

$675,410

$480,863

$657,912

Fauquier County (Virginia)

$282,833

$385,841

$289,701

$416,938

Frederick County (Maryland)

$241,077

$391,476

$245,874

$376,884

Fredericksburg City (Virginia)

$192,403

$295,949

$216,437

$318,799

Loudoun County (Virginia)

$385,051

$454,581

$404,085

$472,729

Montgomery County (Maryland)

$421,109

$487,622

$476,289

$435,267

Prince George’s County (Maryland)

$178,322

$398,392

$193,011

$412,386

Prince William County (Virginia)

$253,377

$387,370

$282,987

$387,920

Spotsylvania County (Virginia)

$186,577

$393,201

$197,723

$387,619

Stafford County (Virginia)

$232,267

$430,717

$272,024

$400,889

Warren County (Virginia)

$137,188

$162,500

$135,087

$219,269

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SEPTEMBER/OCTOBER 2011 MID-ATLANTIC BUILDER

47

BRAC The Good & the Bad of BRAC Being successful in our market requires a “new normal” and unfortunately that new normal is changing weekly and sometimes daily, thus the need to be informed as quickly as possible. By the time many of you read this article the official BRAC relocation will be over. All jobs are required to be in place by September 15, 2011. But as I have discussed in this column before, the short and long term impacts from BRAC are far from over. I will continue to recommend web sites, blogs, RRS’s and other resources that can provide timely information that may help your business chase BRAC business on a day to day basis. The thousands of new jobs and residents to our area continue to provide opportunities to Home Builders Association of Maryland members and I encourage you to look at ways to adapt your business plan to take advantage of these opportunities.

First, the good news; last week I was lucky enough to be part of a Happy Hour with a group of “BRACERS” (pronounced brackers). Yes, that is what this group calls themselves although I don’t know if the term was influenced by the Happy Hour. While most of this group had spent their entire working lives in Monmouth, New Jersey, and continue to have families and connections there, most were happy in Maryland. They are building new lives and friendships, are happy to have good jobs in this economy, love the property tax rates in Maryland (who knew?) and were pleased with the relocation benefits many had received. Yes, they still complain about the pizza and the lack of bakeries (does anyone see an opportunity here?) but the BRACERS are settling in and are now calling many locations in Maryland home. But home builders keep in mind many of these people are renting, up to an estimated 45 percent. Is there an opportunity to convert these rent-

48

MID-ATLANTIC BUILDER SEPTEMBER/OCTOBER 2011

Noteworthy Events & Links Check out noteworthy events and links listed below. If you have missed these events please check out the websites for any future events that might help you with future business opportunities.

• www.harfordchamber.org • www.apg-cssc.com Chesapeake Science & Security Corridor (CSSC) • “Beyond BRAC: Shining the Light on Innovation and Opportunity in the CSSC Region” When: Wednesday, September 28, 2011

ers to buyers? And while many of these BRACERS are buying existing homes this allows the existing homeowner to move on to other locations hopefully in our market, again an opportunity? Many resale agents are continuing to work these relocation prospects hard as well as asking for referrals. Are you doing the same …OPPORTUNITY! And now for the bad news; recent articles in the Washington Post and Baltimore Business Journal continue to discuss the lack of completed infrastructure, particularly roads to meet the needs of the jobs recently relocated as well as the thousands of jobs expected. According to the Washington Post many of the $1.1 billion in planned road improvements have been put off until 2020. On August 13th in the Washington Post “I laugh about it because otherwise I would cry, “said Bob Leib, Anne Arundel County’s BRAC coordinator and co-chairman of a regional committee for planning for the impact of Fort Meade’s expansion. There are absolutely no resources at the federal or state level of any magnitude that could approach solving this issue.” The Baltimore Business Journal on August 16th also

noted that “Just one of five major, multimillion dollar road upgrade projects is underway. Senate Minority Leader Nancy C. Jacobs, a Republican who represents Cecil and Harford counties, said state officials have failed to meet their promises from when BRAC was announced more than 5 years ago that those improvements would have been made by now.”

But more importantly pay attention to the comments published in the Baltimore Business Journal in the same article.

Doug Simmons, deputy administrator with the Maryland State Highway Administration stated that the state was working on a “range of short-, mid- and long term options to alleviate road congestion issues …including working out agreements with private developers to pay for some road upgrades as part of their new construction projects”. n Brenda L. Desjardins, MIRM is a seasoned veteran in the residential building industry with more than three decades of experience in new homes. She leads New Home Marketing Service and New Home Development Strategies based in Annapolis, Md. with a satellite office in Sussex County, DE. Ms. Desjardins is a leader in providing market research, strategic planning and opportunity assessments for single family and multi-family home builders and developers. She is active in regional building associations and is a graduate of the Johns Hopkins University Real Estate Institute in Baltimore, Maryland with a Master of Science Degree specializing in real estate development. More recently she has become obsessed with understanding how to reach that BRAC new home buyer. She can be reached at 410-990 1050 or bldesjardins@comcast.net

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Providing Insulation Solutions SPRAY-ON • BLOW-IN • BATTS • ROLLS • MINI ROLLS • LOOSE FILL

Installing insulation is a pretty important job for builders large and small. There is usually a small window of time in the builder's schedule to insulate. And the builder needs to trust that the insulation products are high performing and installed right the first time.

Myers products and installation crews are key to its growth in this business. The team collectively has over 100 years of insulation installation experience. “Myers crews are Myers employees, who were hired based on their experience in the insulation field", states department manager Neil Lamparter.

"We include one additional step in our installed insulation process. The team always follows up with our customers when the job is complete. We know that our customers don’t want call-backs and this step allows us to address any questions immediately” adds Lamparter.

In addition to second to none customer service, you can count on Neil and his team for: • Competitive pricing • Reliable & proven products • Accommodating scheduling • On-site meetings

• All necessary measurement • Guaranteed quotes • Project guarantees

Want to find out more or get an insulation estimate?

Contact Department Manager, Neil Lamparter at 717.814.4454 or neil.lamparter@jhmson.com.

Aberdeen, MD 20 S. Philadelphia Blvd.

443-327-7933

Camp Hill 3442 Simpson Ferry Rd. 717-737-0471

Chambersburg 1090 S. Main St. 717-263-9151

Dallastown 217 E. Maple St. 717-244-4077

Hanover 108 Ram Dr. 717-632-0217

York 2200 Monroe St. 717-792-2500