February 2015
Tom Woods Elected as Chairman of the National Association of Home Builders On-site Framing Class Page 6 IBS Photos Pages 8-9 Missouri Legislative Day Schedule Page 15
Las Vegas, Jan. 22 – Tom Woods, a Blue Springs, Missouri-based home builder with more than 40 years of experience in the home building industry, was elected as the 2015 chairman of the National Association of Home Builders (NAHB) during the association’s International Builders’ Show in Las Vegas. Woods is president of Woods Custom Homes, a company he founded in 1974. His firm has developed scores of communities and more than 1,000 homes in the Greater Kansas City area. In this new term NAHB will continue to keep the housing market moving forward and spur job growth. “NAHB will urge Congress to enact housing finance reform that includes a federal backstop so that the 30-year fixed-rate mortgage remains readily available and accessible,” according to Woods. “We will also work with lawmakers to protect the mortgage interest deduction,
the Low Income Housing Tax Credit and other tax code measures that benefit housing and continue to fight onerous regulations that hurt consumers, home builders and remodelers.” Woods has been active in the NAHB leadership structure at the local, state and national levels throughout his career. He has served on NAHB’s Board of Directors since 1983 and has been a member of the NAHB Executive Board since 1996. He has also chaired some of NAHB’s most important and influential committees, subcommittees and task forces, including Federal Government Affairs, State and Local Government Affairs, Education, the Home Builders Institute and BUILD-PAC, NAHB’s political action committee. Woods was elected president of the Kansas City HBA in 1991 and was selected by his peers as Kansas City’s
Connect with your customers at the HBA Home and Trade Shows Builders Row Trade Show
Labor Shortage Roundtable Report – see Page 12. March 20-22, Bartle Hall
March 20, Bartle Hall
Education Trade Show March 25-27 Overland Park Convention Center
Tom Woods
Builder of the Year in 1995. He received a national achievement award from Professional Builder Magazine in 1999 for his work in education in the home building field while chairing the Home Builders Institute, the workforce development affiliate of NAHB. In addition, Woods served his local community as the mayor of Blue Springs, Mo. from 1978-1981 and was a member of the Blue Springs City Council from 1975-1978. He received a presidential appointment to serve on the Des Moines Federal Home Loan Bank Board from 2002-2005. Joining Woods in NAHB leadership positions will be local builders George Schluter, GWS, Inc., chairing the Construction, Codes & Standards committee; Bob Frost, Frost Construction Company, chairman of Association Planning committe and of Region 11; and Mark Hoffman, Hoffman Construction who will chair the Construction Liability, Risk Management and Building Materials committee.
www.kchba.org | Volume 21, No. 2 | February 2015
Economic Forecast Optimistic for 2015
February Calendar Feb. 4 Parade of Homes Seminar Feb. 12 Associates Council Meeting Feb. 12 Sales & Marketing Council Meeting Feb. 12 Professional Remodeler Leadership Tour 2015 Feb. 18 Navigating New Home Sales with Success Feb. 25 Missouri Legislative Day Feb. 26 The Art of Framing to Code
From left to right: Jenni Mann, Hunt Midwest; Chris Kuehl, Armada Intelligence; Harold Phelps, Phelps Engineering; Mark Mather, Mather Development; Sara Corless, HBA Executive Vice President; and David Crowe, NAHB Chief Economist
For more information or to register for any event, go to www.kchba.org or call 816-942-8800
More than 150 people attended the HBA’s Economic Forecast Breakfast on January 14 at the Overland Park Convention Center to hear from David Crowe, Chief Economist and Senior Vice President, the National Association of Home Builders, and Chris Kuehl, Co-founder and President, Armada Intelligence. With a chart showing that housing demand depends on employment growth, Crowe predicted an increase in building activity during 2015 as employment continues the upward trend which began in 2014. Now that the Kansas City area has recovered the jobs lost in the recession, future job gains should support increased housing production. With the metro area at just under half of what is considered normal building activity as of 2013, there is ample room for growth in the industry. Kuehl and Crowe agreed that the moveup buyer is currently the most active 2
segment of the market. First-time homebuyers have declined in both the existing and new home markets, due to factors such as credit availability, greater unemployment among the younger, millennial generation and the trend of delayed household formation. In response to the question “is the American dream of home ownership still viable?” the economists pointed out that the millennial generation is a larger group than the Baby Boomers and demographics alone point to the need for more homes. Kuehl noted that there is nothing like having children to make a yard a crucial part of one’s living space.
February 2015 | Volume 21, No. 2 | www.kchba.org
Choose Your Space Now at the HBA Home and Trade Shows These are not just floor plans for the HBA’s spring home and trade shows — they can be a blueprint for increased business for your company. The Home Show and KC Lawn & Garden Show, open to the public, will fill Bartle Hall March 20th through March 22nd. Expected to draw upwards of 15,000 consumers this show offers the chance to connect with home owners eager to remodel, improve and refresh their homes. Open to HBA builder members only, the Builders Row Trade Show will be held in conjunction with the Home Show and KC Lawn & Garden Show. Trade Show booths will be located along the row on the left side of the floor plan below. The Johnson County Contractor Licensing Spring Education Seminar will be held March 25 through March 27 and be combined with a Trade Show at the Overland Park Convention Center. This Trade Show offers vendors the opportunity to reach a targeted group of decision makers. Call the HBA (816-942-8800) today to reserve your booth space for these opportunities to reach your new customers.
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www.kchba.org | Volume 21, No. 2 | February 2015
NAHB 2015 Priorities Taking the guess work out of building energy efficient homes.
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Home & Commercial Insulation Fireplace Sales & Service
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The National Association of Home Builders works year-round on policy issues that are important to HBA members nationwide and key to a strong housing industry. The following are the top 10 priorities in 2015. For more information on these items visit nahb.org and click Housing Topics. Act, to far-reaching Endangered Species Act requirements, and lead paint rules that cost remodelers jobs and money, NAHB is leading the fight to rein-in unnecessary and burdensome regulations that harm the industry and consumers.
1. Enact Comprehensive Housing Finance Reform A sound housing finance system that provides a stable and affordable supply of credit for home buyers and rental housing is essential to ensure a healthy housing market, spur job creation and maintain a strong and resilient economy. NAHB believes the best way to move forward is based on legislation approved by the Senate Banking Committee in the 113th Congress (S. 1217) that would gradually wind down Fannie Mae and Freddie Mac into a private sector oriented system, where the federal government’s role is clear, but its exposure is limited.
4. Protect the Mortgage Interest Deduction Americans overwhelmingly oppose any action by Congress to tamper with the mortgage interest deduction, but it could be eliminated or scaled back as federal lawmakers and the Administration are looking at tax increases in light of deficit concerns. The consequences would be devastating for home owners, the housing market and the nation’s economy. Any attempts to tamper with the mortgage interest deduction would raise taxes on millions of home buyers and home owners and further depress home values, leaving more home owners with mortgages larger than the value of their property (“underwater”) and fueling even more foreclosures. It only takes a 5 percent drop in home values to wipe out $1 trillion in household wealth.
2. Resolve Appraisal Problems Flawed appraisals are a major problem for home buyers, owners and builders. Too often, appraisers are using distressed properties – many of which have been neglected and are in poor physical condition – as comparables in assessing the value of well-kept existing or brand new homes without accounting for major differences in condition and quality.
5. Enact Comprehensive Immigration Reform
3. Fight Onerous Regulations that Hurt Home Builders, Remodelers and Consumers
The home building industry, with the contribution of a substantial immigrant workforce, plays a critical role in sustaining the national economy and meeting the nation’s housing needs. It is estimated that more than 20 percent of the building industry’s workforce is foreign-born, making the immigrant population key to meeting housing demand and sustaining growth in the industry.
NAHB is in the forefront in preventing expensive, pointless regulations from impeding home building and remodeling and adding unnecessary costs to consumers. From overly broad stormwater permit requirements that would literally regulate puddles under the Clean Water 4
6. Recognize Housing’s Important Role to the Economy As policymakers begin debate on housing finance and budget issues that will impact job creation and future growth, they must understand the important role that housing plays in the U.S. economy. Considering the enormity of the total number of jobs attached to housing, a sector that accounts for more than 15 percent of the nation’s Gross Domestic Product, now is hardly the time to step back from the nation’s long-standing commitment to homeownership. NAHB analysis of the broad impact of new construction shows that building 1,000 average single-family homes generates: 2,970 full-time jobs $162 million in wages $118 million in business income $111 million in taxes and revenue for state, local and federal governments
7. Defend the Low Income Housing Tax Credit As Congress looks at tax expenditures and all programs come under review, it is important to protect the Low Income Housing Tax Credit (LIHTC), the most successful affordable rental housing production program in U.S. history. Eliminating the LIHTC would bring production and rehabilitation of affordable rental housing to a standstill. Continued on next page
February 2015 | Volume 21, No. 2 | www.kchba.org
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Residential Construction Superintendent Classes Taught by Pittsburg State University professor Justin Honey (shown in center), eight building professionals have taken part in training for the Residential Construction Superintendent designation. Left to right are: David LaHue, Dusty Dahmer Construction; Aubrey Elliott, Pfeifer Homes; Steve Immer, Starr Homes; Joel McIntyre, Ashlar Homes; Max Robinson, JS Robinson Fine Homes; Jack Green, Dreams & Design Homes; Clay Stallings, Dreams & Design Homes; Ryan Drussel, ACS Concrete/ Construction.
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NAHB 2015 Priorities Continued from page 4
8. Pass Patent Reform Home builders have become the latest targets of “patent trolls.” Patent trolls send deceptive demand letters to extort licensing fees from businesses. NAHB believes business would benefit from greater transparency in patent demand letters. Requiring specific factual allegations of infringement would equip businesses with the necessary information while preserving the rights of patent holders.
9. Provide Small Business Health Care Relief NAHB has long supported health care reform that will create an environment which will encourage, support and provide incentives to our free enterprise system through a market-based approach. A sustainable health care system must build upon the successes in the private sector and reinforce the strengths of the
employer-sponsored health care system instead of imposing mandates, new taxes and penalties, and limiting flexibility.
10. Adopt Energy Policy that Encourages CostEffective Energy Efficiency NAHB urges Congress to enact legislation to improve the development of model building energy codes. NAHB supported legislation (H.R. 5027) in the 113th Congress that called on the Department of Energy to increase transparency in the development of energy codes, ensure that advancements in energy efficiency are cost-effective and support the training of building code officials. NAHB is calling on Congress to reintroduce and pass this important legislation in 2015.
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www.kchba.org | Volume 21, No. 2 | February 2015
NAHB Exists to Serve its Members
Earn 8 Code Credits at the KCHBA’s Framing Class on February 26 The KCHBA will offer a class entitled, “The Art of Framing to the Code,” on Thursday, February 26, 2015 from 9:00 a.m. to 4:00 p.m. (time subject to change). This class will provide a detailed overview of the framing sections in the 2012 International Residential Code with a special emphasis on the provisions in the code that are most often misunderstood. While the KCHBA has offered framing classes in the past, this class will include a hands-on/field component to enhance the learning experience and help participants develop a deeper understanding of framing tech-
niques and rules. Dave Utterback, City of Lenexa, will serve as the instructor.
Fighting for housing on major policy issues, providing excellent educational programming, and creating outstanding networking opportunities are just some of the ways that NAHB fulfills that mandate.
This class will be held in the Copper Leaf subdivision near 1-35 and highway 152 interchange. In the event of inclement weather, the KCHBA may change the location for this event but would notify all participants. The timing of this class is meant to help address a need for knowledgeable and skilled workers in the area of framing, as was heard at the KCHBA’s recent Labor Shortage Roundtable. To register for this class, please contact Andrew McKeegan at andrew@kchba.org or visit kchba.org.
In 2014, NAHB’s actions on legislative, codes, regulatory and legal fronts, as well as in other arenas, provided members an estimated savings of $6,882 per housing start as the association resolved numerous issues affecting home builders. The value came out of NAHB services and programs, as well as legislative, legal and regulatory wins. Your advocacy team leveraged the association’s power to get pro-housing bills introduced and passed in Congress, challenge regulations that do more harm than good, and level the playing field against powerful interests that could do lasting damage to the housing industry.
Thanks to These HBA 2015 Sponsors Platinum sponsors
Kansas city Star KENNY’S TILE Spaces Magazine GOLD sponsors
Bank of Blue Valley Bovard Insurance Group Capitol Federal Bank Fasone & Partners Factory Direct Appliance First Federal Bank K & E Flatwork McCray Lumber & Millwork Northcraft Flooring & Granite
Nebraska Furniture Mart Owen Lumber Co. Phelps Engineering ProBuild RockTops Granite & Stone Star Drywall & Insulation Sun Lumber Co. United Heating, Cooling & Plumbing Wells Fargo
These NAHB services, programs and advocacy victories included: EPA drops its post-construction stormwater rule.
Silver sponsors
Henges Insulation and Fireplace
Kansas Gas Service Stewart Title Bronze sponsors
84 Lumber Atronic Alarms Building Solutions Commerce Bank Complete Home Concepts CrossFirst Bank
First American Title Kansas City Title Laclede Gas Locks & Pulls North American Savings Bank
Pacific Mutual Door Pella Products of Kansas City ProSource Secured Title of Kansas City Shamrock Cabinet 6
U.S. Supreme Court ruling on Clean Air Act benefits multifamily builders. Value of NAHB designations earned during the year. Delay of implementation of some Affordable Care Act requirements. Extending the tax deduction for mortgage insurance preserves new home sales. Extension of energy tax credits stimulates new construction and remodeling. NAHB’s affinity programs with companies such as General Motors and Lowe’s leads to millions in savings for NAHB members. These are just a few examples of how NAHB is working to serve our members by helping to make your businesses run better and boosting your bottom line. Visit ValueofNahb.org to learn more about these services, programs and advocacy victories and about how you can take full advantage of your NAHB membership.
February 2015 | Volume 21, No. 2 | www.kchba.org
Efforts to Curb Patent Trolling Takes Center Stage The Kansas Building Industry Association, of which the KCHBA is a member, is supporting legislation that would help end the ongoing fraud seen by builders in other states through suspicious “demand letters” requiring payment for alleged violations of non-effective patents. Senate Bill 38 was introduced in the Kansas Legislature and has a real chance of passage. NAHB has joined with a broad coalition
hotelier, restaurant and retail businesses.
of diverse American businesses to pursue wide-ranging solutions to abusive patent litigation and achieve comprehensive patent reform.
In a joint letter to members of the House and Senate Judiciary Committees, United for Patent Reform noted that suits by patent trolls, companies that accuse other businesses of patent infringement in a bid to win settlement money, have risen by an average of 22% per year since 2005.
United for Patent Reform is comprised of more than 20 founding members including NAHB, Google, Verizon Communications, JC Penney, Facebook, Amazon, the American Hotel & Lodging Association, the National Restaurant Association and other realty, technology,
“The problem has grown out of control, and as every member of the coalition can
Say Hello to Our NAHB Field Rep With the new year comes a new member benefit: the Regional Field Representative Team, primed and ready to showcase NAHB resources and to help state and local HBAs become the best associations they can be.
and political advocacy awareness campaigns. He is a graduate of Salisbury University in Maryland with a degree in English Literature. Charles will be based out of Dallas. Several KCHBA staff members met Charles at IBS and we look forward to working with him.
Charles Liuzzo, Region D Field Rep with Dawn Allen, KCHBA
Starting in January, the five field reps – one for each of NAHB’s geographic regions – get to work. The field rep for Kansas City (Region D) is Charles Liuzzo. Charles is transitioning into the field representative position from his two-year role as Fundraising Manager with NAHB BUILD-PAC. For BUILDPAC, he served as the main point of contact for the local association in 25 states and helped develop fundraising
take on a Parade of Homes, a can’t-miss member social event or a successful government affairs program. “A key job of the field rep is to help each HBA connect the dots – not just to NAHB, but to each other,” Kelly said. One HBA struggling to get home owners to attend its events can learn a great deal from another HBA that does a particularly good job with consumer education programs at its annual home show. The field rep can get them talking.
First, field reps will need to learn everything that the national office has to offer, said NAHB Chairman Kevin Kelly. “They’ll have to be able to synthesize a large volume of information so they can connect members and HBAs to the right programs and services,” he said.
And by raising awareness of the services and products that NAHB provides, the field reps are another key to unlock the value of NAHB membership. Members and HBAs may not know that NAHB has staff that can get on the phone to walk a member through the complexities of getting a stormwater management permit. Or that NAHB Affiliate Services can help out with a local board’s strategic plan. Or that BUILD-PAC staffers have lots of ideas for a campaign fundraising event.
Then comes the challenging part: getting to know the state and local associations in their assigned geographic regions. “They’ll need to understand the diversity of NAHB,” from large HBAs with multiple staff all the way to the smaller associations with fewer members and part-time or even volunteer staff, said Kelly.
“At the end of the day, the field rep is essentially an ambassador – not just for NAHB, but for the depth and breadth of the federation,” Kelly said.
Each association, he said, has something important to offer: whether it’s a unique 7
attest, patent trolls target every corner of the American economy from Main Street businesses to technology companies,” the letter said. NAHB members have reported receiving demand letters from patent trolls that seek to force companies to enter into a licensing agreement or face litigation. United for Patent Reform supports several legislative remedies in its quest for patent reform, including reform regarding abusive demand letters. The coalition is calling on Congress to require that patent demand letters include truthful, basic information. Patent trolls send vague and deceptive letters alleging patent infringement to demand unjustified payments from innocent individuals and businesses. “Vague demand letters should not be used to bully innocent businesses into paying what amounts to protection money,” the coalition said.
What to Do if You Receive a Demand Letter Any member targeted by patent trolls should contact the NAHB legal team. While NAHB does not provide specific legal advice to members, the association can provide information on options if confronted with patent trolling. The U.S. Patent & Trademark Office has developed a Patent Litigation Online Toolkit that provides additional information and resources for people who may have received a demand letter or been sued for patent infringement, or who may generally seek more information about the patent process. Members can find additional information at nahb.org/patentreform.
www.kchba.org | Volume 21, No. 2 | February 2015
IBS 2015: Tom Woods Elected NAHB Chairman Local Kansas City building professionals returned from Las Vegas after days filled with education, information on new products and services, and celebrating our own Tom Woods’ election and swearing-in as 2015 chairman of the National Association of Home Builders.
Building industry took over Vegas for the annual convention
Bob Frost, Sara Corless and David Crowe
Mitch Benjamin and Dalton Hermes
Brenner Holland, Rosemary Vitale and Harold Phelps
The International Builders’ Show, January 20-22, was attended by over 55,000 home building professionals. The larger event, Design & Construction WeekTM, which included IBS, the Kitchen and Bath Industry Show, the International Window Coverings Expo, The International Surface Event and the Las Vegas Market drew over 125,000 attendees. More than 1,200 exhibitors filled 478,000 square feet of space with everything from the latest in kitchen and bath design to millwork and marketing services. Overall, Design & Construction Week boasted 3,750 exhibitors and 4.7 million net square feet of exhibit space. “This has been the best show we have experienced since the economic downturn,” said Jerry Konter, chair of the NAHB Convention and Meetings Committee. “You felt a great energy the moment you hit the show floor, as builders and exhibitors continue to benefit from the recovering economy.” Attendees crowded the aisles for a show that almost overwhelmed Las Vegas taxis, hotels and restaurants in what city officials said was the biggest week they’d ever had in January. “The exhibit halls were packed from end to end and the energy on the show floor was amazing,” said newly elected NAHB Chairman Tom Woods. “Design & Construction Week was truly a unique onestop shopping extravaganza for all those involved in the residential construction industry, and this mega-event will be a great springboard for housing in the year ahead.”
Tom Woods addresses NAHB members
Tom Woods sworn in as NAHB chairman 8
February 2015 | Volume 21, No. 2 | www.kchba.org
Tom Woods and his proud family
Misty Hanson and Bob Frost with NAHB representatives
Outgoing chairman Kevin Kelly, with his wife and sons
A small sample of the thousands of exhibitors
A large crowd enjoyed the KCHBA reception held in honor of Tom Woods
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Harold and Donna Phelps, Bruce and Toni Rieke
www.kchba.org | Volume 21, No. 2 | February 2015
NAHB Leadership Team for 2015 Members of NAHB elected four Senior Officers to top leadership positions within the federation during the association’s International Builders’ Show in Las Vegas.
experience in the home building industry, was elected as Second Vice Chairman of the Board. MacDonald is president of the MacDonald Companies, a diverse development, construction, and management enterprise with more than 35 neighborhoods completed throughout Texas.
With more than 800 affiliated state and local home builders associations and more than 140,000 members across the country, NAHB represents the interests of the nation’s housing professionals through advocacy, education and research.
Tom Woods. Chairman of the Board
Taking the helm as NAHB’s Chairman of the Board this year is Tom Woods, a Missouri builder with more than 40 years of experience in the housing industry. Woods is president of Woods Custom Homes. He has developed scores of communities and more than 1,000 homes in the Greater Kansas City area.
Randy Noel, Third Vice Chairman
Randy Noel joined the NAHB leadership ladder with his election as Third Vice Chairman of the Board. A Louisiana-based custom home builder with more than 30 years of experience in the home building industry, Noel is president of Reve Inc., a custom home building firm that has developed more than 1,000 custom homes in the greater New Orleans area.
2014 NAHB Chairman Kevin Kelly, from Wilmington, Del., remains on the leadership ladder as Immediate Past Chairman. Kelly is president of Leon N. Weiner & Associates, Inc. and is a successful builder and developer with several decades of experience in land development, multifamily and single-family home building, and property management.
“To keep housing and the economy on an upward trajectory, this year NAHB will urge the White House and the Republican-controlled Congress to work together in a bipartisan spirit to advance comprehensive housing finance reform and immigration reform, along with other policies that promote homeownership, rental housing opportunities and job growth,” said Woods.
Rounding out the association’s leadership is NAHB Chief Executive Officer Jerry Howard, from Washington, D.C. Howard heads up a professional staff of more than 230 working out of the National Housing Center in Washington. He has served as the association’s CEO/EVP since February of 2001. Previously, Howard was NAHB’s chief tax counsel.
Also moving up on the association’s leadership ladder during NAHB’s Las Vegas board meeting was Ed Brady, a Bloomington, Ill.-based Ed Brady, home builder. He First Vice Chairman was elected as the 2015 First Vice Chairman of the Board. Brady is president of Brady Homes, a company founded in 1962 by his father, William Brady Sr. One of the largest home building firms in central Illinois, Brady Homes has developed 20 residential communities throughout the state, building more than 1,800 single-family homes, 2,000 apartment units and more than 100,000 square feet of light commercial property. Granger MacDonald, Granger MacDonald, a Kerrville, TexasSecond Vice Chairman based builder and developer with 40 years of
Jerry Howard, Chief Executive Officer 10
Kevin Kelly, Immediate Past Chairman
February 2015 | Volume 21, No. 2 | www.kchba.org
The New American Home Featured at IBS 2015
Congressman Cleaver Appointed Banking Member of Key Housing Committee
Now in its 32nd year, The New American Home® (TNAH) is constructed annually in conjunction with IBS. For 2015, the home demonstrated how the most cutting-edge building technology, products and materials can be integrated into a production home community. Co-produced with Hanley Wood’s BUILDER Magazine, TNAH 2015 has a production floor plan that feels like a unique, custom-built home. The four-bedroom, 5,891-square-foot desert contemporary home, built and designed by Las Vegas Unique glowing counter in the kitchen builder Blue Heron, presents a collection of takeaway ideas for every price point that can be rolled into mass production quickly and efficiently.
Exterior of The New American Home
“Tyler Jones and the team at Blue Heron have done a great job creating a home that offers something for everybody – builders and remodelers, architects and designers, product manufacturers and consumers,” said Tucker Bernard, director of NAHB’s Leading Suppliers Council. “Housing industry professionals who tour this home are going to leave Las Vegas with a lot of great ideas that they can start using immediately.”
Light-colored kitchen with stream-lined range hood
TNAH 2015 exceeds Emerald status, the highest level of certification from the ICC 700 National Green Building Standard. Features include photovoltaic panels, open spray-foam insulation, a weather-sensitive irrigation system that automatically adjusts usage relative to the immediate climate, high-efficiency water heaters, hydronic air handlers, intelligent fireplaces, balanced daylighting and low-maintenance building materials. The surrounding photos are elements which were particularly eye-catching to those touring the home.
Beautiful light fixtures add a special touch
Gas fireplace adds warmth to the bedroom 11
Congressman Emanuel Cleaver, II was recently appointed to serve as the Ranking Member of the Subcommittee on Housing and Insurance, which is part of the full House Committee on Financial Services. In a press statement, Congressman Cleaver said, “I am grateful for the opportunity to serve in this new role, and eager to lead on an issue that has been important to me my entire life.” The Subcommittee on Housing and Insurance oversees the U.S. Department of Housing and Urban Development (which includes the Federal Housing Administration), the Government National Mortgage Association (Ginnie Mae), the Rural Housing Service (RHS) at the U.S. Department of Agriculture and the Federal Insurance Office (FIO) at the Department of Treasury. The subcommittee considers matters related to rental housing, community and economic development, homeownership, and rural housing issues. The subcommittee also handles matters related to government-sponsored insurance programs, including the National Flood Insurance Program (NFIP) and the Terrorism Risk Insurance Program and private mortgage insurance. Congressman Cleaver represents Missouri’s 5th Congressional District in the U.S. House of Representatives. The KCHBA and its members appreciate the Congressman’s interest in housing and his hard work on behalf of the industry and homeownership through the years.
www.kchba.org | Volume 21, No. 2 | February 2015
Governors Set the Tone for 2015 Legislative Sessions Kansas and Missouri Governors Sam Brownback and Jay Nixon set the tone for the 2015 legislative sessions with their State of the State addresses in January. Governor Brownback in his speech highlighted the government re-
Brownback and Nixon address legislators forms that his administration has made by consolidating state agencies, reducing the public sector workforce and restructuring welfare programs. The Governor also acknowledged recent revenue data and budget challenges ahead. The day following his speech, Governor Brownback unveiled a budget propos-
al, which addresses the $250 million shortfall in Fiscal Year (FY) 2015 and the projected $650 million shortfall in FY 2016. With regard to tax policy, the Governor’s proposal would delay any future income tax rate deductions by freezing the current income tax rates – 4.6% for the top rate and 2.66% for the bottom rate in 2016. The Governor’s proposal would also accelerate a haircut for itemized deductions, including the mortgage interest and property tax deductions which were supposed to take effect in 2017. The haircut would now take effect on January 1, 2015 to generate additional revenue fast.
question, these tax and budget issues will be the main focus of the legislative session in Kansas. Governor Nixon also highlighted his administration’s reforms to government by trimming 5,000 jobs from the state workforce, selling government property and shoring up the pension system. He also spoke about maintaining the state’s AAA credit rating. Echoing last year’s speech, Governor Nixon called on the General Assembly to expand Medicaid eligibility as provided through the Affordable Care Act. The expansion will likely meet even greater resistance than it did last year given that Republicans increased their majority in the last election.
A reduction in the value of itemized deductions was supposed to mirror the annual income tax cuts in the statute but will now be phased out without any of the corresponding tax cut benefit. In addition, the Governor is calling for higher taxes on cigarettes and liquor. Without
Legislative activity is starting to heat up in the General Assembly. Legislators are once again working on education issues, transportation and issues surrounding taxes and the budget. Legislators are also expected to take up ethics reform.
KCHBA Hosts Labor Shortage Roundtable The KCHBA hosted a Labor Shortage Roundtable on January 7 with experts in the field to discuss the challenges and opportunities for creating the next generation of workers in the residential construction industry and the resources available for businesses to meet their labor needs. As a follow up to the roundtable, the KCHBA will hold a class entitled, “The Art of Framing to the Code” on February 26, 2015 to help members build their skills and knowledge in this key area of construction. The National Association of Home Builder’s surveys and data show clear
opportunity to see the training facilities and meet the next generation of workers.
shortages in all aspects of the industry with shortages in carpentry, framing and bricklayers/masons particularly high on the list. Business looking to hire workers in all areas of the industry need to provide as much specificity about the job as possible to help with retention and communicate the long-term prospects in the field. Not surprisingly, competitive wages and hours will also attract workers. Roundtable experts encouraged HBA members to volunteer to be a guest speaker at the various trade programs across the Kansas City metro area, such as the Herndon Career Center. It is a key
The KCHBA would like to thank for the following experts for participating in the roundtable: Blake Flanders, Workforce Development Director, Kansas Board of Regents, Clyde McQueen, President and CEO, Full Employment Council, Clifford Smith, Dean of the Technical Education Center, Charles Knapp, Business and Industry Coordinator, Kansas City Kansas Community College, and Jim Oliver, Construction Trades Instructor, Herndon Career Center. 12
Lead Paint Rule Recertification Proposal Huge for Remodelers The Environmental Protection Agency (EPA) has opened a 30-day comment period for a proposed amendment to the Lead: Renovation, Repair and Painting rule that would make it easier for remodelers and other contractors to renew their certifications. The amendment would: Remove the hands-on training requirements from the refresher training course, which would allow renovators to complete this training entirely online. NAHB sent a letter to EPA in May 2014 supporting this proposal because it helps small remodeling businesses, subcontractors and maintenance personnel by allowing them to avoid the added burden of lost wages and additional costs of traveling to a training location. Provide a six-month extension for certifications that expire by July 1. NAHB called for this extension during its November meeting with OMB to ensure as many renovators as possible are able to take advantage of the savings resulting from the proposal. Without the extension, these remodelers will need to complete the classroom course by July 1 and be unable to access the online-only option. NAHB continues to highlight that time is of the essence in this matter. For the proposed rule to make a difference for remodelers who must recertify before July 1, the amendment must be in effect before the upcoming recertification deadlines –a point that will be clearly made in comments NAHB plans to submit on the rule. Continued on page 16
February 2015 | Volume 21, No. 2 | www.kchba.org
Digital Shopping – A Brave New World for Home Builders Research shows that more than 90% of all home buyers use the Internet to search for a home. That’s a staggering number, and one which provides evidence that the home buying process has changed over the years: from in-person walkthroughs to likes on Pinterest. In fact, buyers today are using the Internet more often than traditional real estate agents to begin their home search process.
According to Coremetrics, a provider of digital marketing optimization solutions, there is a 35% increase in the sales conversion rate among shoppers who viewed online video tours versus those who did not. Many builders are beginning to realize that their websites do not currently capitalize on what buyers want and how they want to shop for a new home. So they are adjusting their strategy and embracing change, and you can too. Remember to:
HBA Staff Sara Corless Executive Vice President scorless@kchba.org, 816-733-2216 Beatriz Ibarra Vice President of Government Affairs bibarra@kchba.org, 816-733-2237 Gina Battle Director of Parade of Homes gina@kchba.org, 816-733-2219 Marcia Jurgens Director of Administration marcia@kchba.org, 816-733-2215 Andrew McKeegan Association Services Manager Andrew@kchba.org, 816-733-2224 Phil Yancey Membership Manager Phil@kchba.org, 816-733-2245 Dawn Allen Executive Assistant/Communication and Events dawn@kchba.org, 816-942-8800 Stephanie Stollsteimer Director of Marketing and Special Projects stephanie@kchba.org, 816-733-2213 Kelcee Schlotzhauer Events and Administration Assistant kelcee@kchba.org, 816-942-8800 Megan Felling Communications Manager megan@kchba.org, 816-733-2217
Create virtual tour displays of your homes online. Armed with this new data, builders are slowly beginning to adapt to the new self-service way people want to shop for homes. A number of builders across the nation have started to present their models online in new and engaging ways. No longer is it acceptable to show only fish-eyed lens panographics that distort the rooms being featured. The bar has been raised to a whole new level. Leading builders are embracing tools that go beyond still images by integrating video, computer-generated imagery, customer reviews and even shopping carts for making options selections on their websites.
Zero Moment of Truth (ZMOT). ZMOT happens when companies present their products online with a variety of product options and real customer reviews. Here are some reasons why ZMOT in home sales works: According to the 2014 NAR Profile of Home Buyers and Sellers, 42% of home buyers indicated that the Internet was the first step taken to begin their home search. Only 2% of respondents in the same study indicated that they contacted a builder or visited a builder’s models as the first step in the home search process.
Many builders, however, continue to avoid presenting options to customers until after they have a deposit. And until recently, many other industries struggled with this same issue until some disruptive companies came along and changed the way products were sold. Companies like Amazon, Trip Advisor, Yelp and many others that we recognize as market leaders all achieved greatness by offering dynamic online buying experiences that customers embraced at a stunning rate. Google even coined a term to describe this phenomenon: the
Of those customers who began their search online, a whopping 63% of home buyers walked through a home they found online. When home buyers were asked their main reasons for buying a home, 25% indicated it was the ability to choose and customize design features. Often builders avoid sharing options until a purchase and sales agreement is received. This research indicates that many home buyers would be excited to see options sooner. 13
Make sure photographs and videos of your homes are easy to find on your website. Or even better, display them on the home page.
42% of home buyers indicated that the Internet was the first step taken to begin their home search. Present options early in the process. Buyers don’t want to be led; they want to self-serve and builders who allow it will win. Integrate customer reviews into your website and home tours. This article originally appeared in the September/October 2014 issue of Sales + Marketing Ideas magazine. It was modified and released as the NAHB Now blog for 1/9/15
www.kchba.org | Volume 21, No. 2 | February 2015
A More Robust Year for Housing in 2015
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With economic growth near 4% for the last half of 2014 and employment gains averaging more than 250,000 per month last year, NAHB Chief Economist David Crowe said these are the primary factors that have helped consumer confidence jump back to pre-recession levels.
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“The signs point to a more robust year for housing,” Crowe said. “Household balance sheets are returning to normal levels, home owners’ equity is increasing and significant pent-up demand is rising. More than 7 million existing home sales were postponed or lost during the downturn; and while some are lost forever, we should see some catch-up.”
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The Forecast NAHB is projecting 993,000 total housing starts in 2014, up 6.7% from last year’s total of 930,000 units.
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Single-family production is expected to rise 26% in 2015 to 804,000 units. 14
“While a good beginning, this is still well below a normal level of 1.3 to 1.4 million single-family starts,” Crowe said. On the multifamily front, NAHB is anticipating 358,000 starts in 2015, up 2% from 352,000 last year. The sale of new single-family homes is expected to hit 564,000 this year, a 29.3% increase above last year’s 436,000 in sales. Meanwhile, residential remodeling activity is expected to register a 3% gain this year over 2014. The ongoing housing recovery will see single-family starts steadily climb from 49% of normal production at the end of the third quarter of 2014 all the way up to 90% of normal by the end of 2016, Crowe said. Examining the recovery on a state level, by the end of 2016, the top 40% of states will be back to near normal production levels, compared to the bottom 20%, which will still be below 75%.
Where are All the New Households? David Berson, chief economist at Nationwide Insurance, said the number of new household formations was far fewer in the current economic expansion than in previous recoveries. Continued on next page
February 2015 | Volume 21, No. 2 | www.kchba.org
Missouri Legislative Day set for February 25, 2015
Gearing Up for Code Changes Proposals have been turned in for the first round of changes to the 2018 International Residential Code, including 11 submitted by NAHB. For the first time, all proposals from product manufacturers, advocacy groups and individual builders and code officials had to be submitted via cdpACCESS, the new online voting and discussion tool for model code creation. Also for the first time, each proposal must come with a price tag – a change NAHB has long sought to help weed out proposals that make little sense as far as building safety or energy efficiency go, but do help line the pockets of the group suggesting the change. Soon comes the fun part: Once the International Code Council has logged all the hundreds of proposals and posted them to its website (it anticipates having them ready March 13), NAHB members and staff will read them. All of them. Their job is to decide which of the code proposals are most important so they can either support the changes, encourage
voters to reject them, or come up with compromise language or a counter proposal that makes more sense.
Under the statewide organization, the Home Builders Association of Missouri (HBAM), KCHBA members will travel to Jefferson City on February 25, 2015 for face-to-face meetings with their elected representatives. This annual event provides KCHBA members with the opportunity to learn more about legislation impacting the home building industry, build relationships with their elected representatives and network with fellow HBA members from Kansas City and across the state. Missouri
Members and staff will consider more than costs – although as representatives of the home buying public, which has no say in the code hearings, affordability is a prime consideration. They’ll also look at how each proposal affects the construction process, from the availability of materials to its interaction with other building components. And they’ll try to figure out whether the proposal, as written, does the job it sets out to do: improve the health and safety of the home’s eventual occupant.
Legislative Day is a long-standing tradition that serves to remind lawmakers that we are paying attention to what is happening at the state level. There is much at stake for the home building industry as Missouri lawmakers continue to debate taxes, the budget and transportation issues. The housing industry should also stay alert about the possibility of revisiting a state-wide energy code in Missouri. To register for Missouri Legislative Day, visit www. kchba.org.
Missouri Legislative Day Schedule
The Home Builder’s Role
Wednesday, February 25, 2015 (Subject to Change)
While NAHB is profoundly grateful for the work of its code proposal reader-volunteers, all members of the NAHB federation have a part to play in this year’s code process. Working with their HBAs, home builders need to get to know the building officials in their jurisdictions who will be voting for the proposals later this year. Continued on page 16
8:00 a.m.
Bus Departs from the HBA
8:30 a.m.
2nd Pick up at Stewart Title in Blue Springs
11:00 a.m.
Arrive in Jefferson City
11:15 a.m. - 12:30 p.m. Legislative Briefing and Lunch with Legislators 12:30 - 3:30 p.m.
Scheduled Meetings with Legislators
3:45 p.m.
Bus departs for Kansas City
A More Robust Year for Housing in 2015 Continued from page 14 “Give the job growth we’ve seen in 2014, there should have been better household formations,” he said, adding that the slower pace may be because “the real acceleration in job growth has occurred just recently – in the last six months.” As the economy and job growth continue to strengthen in 2015, Berson said this will be a “significant factor to encourage people who have doubled up to move out on their own.” Moreover, he noted that the real slowdown in household formations has come from the Millennials, who have suffered
disproportionately from stagnant wage growth and student debt. However, he added that this key demographic is getting older and ready to set down roots. “The leading edge are now in their young 30s,” said Berson. “Homeownership desire is much higher for those who are in their 30s than those in their 20s.”
ond year in the last decade that we’ve seen growth at that level,” said Nothaft. “A stronger economy supports a rise in household formation and home buying.” Not quite as bullish as NAHB, Nothaft expects that housing starts will rise about 15% in 2015, and that home sales will be up 4%, which would be the best year for home sales since 2007. He added that nationwide home prices this year should increase about 3.5% to 4% above last year’s level.
A Rising Economy Lifts Housing Freddie Mac Chief Economist Frank Nothaft also foresees a good year for housing.
With 30-year mortgages currently running at about 3.75%, Nothaft called them “dirt cheap” and said he expects
“We’re projecting 3% economic growth in 2015, which would only be the sec15
rates to rise this year but remain at affordable levels. “If we see economic growth running at 3% at an annualized, rate, the Federal Reserve should begin to push up shortterm interest rates by the second half of 2015,” said Nothaft. “We see mortgage rates going up to 4.5% on the high side at the end of this year, going from dirt cheap to cheap. Overall, affordability for buyers in most markets will be well maintained in the context of strong job and income growth.”
www.kchba.org | Volume 21, No. 2 | February 2015
Member Anniversaries
This month’s tip is:
Best in American Living Understand what clients want in a home, gain best practices in residential development, read case studies of new communities and more in the Best of American Living e-magazine, the quarterly publication free to all NAHB members. Get an in-depth look at our BALA award winners, including site plans, floor plans, interior design features and more!
1948 McCray Lumber and Millwork
Single-Family Homes”, and “All Under One Roof—Multigenerational Households” among others.
1974 Graham Construction Company
Don’t miss this great benefit of NAHB membership – valuable information and it won’t even clutter up your desk!
1978 Barney Ashner Homes, Inc. 1983 Jim Haas Builders, LLC 1987 Top Master 1988 Bickford & Company, Inc. Dixon Construction Company, Inc.
To access this magazine, go to nahb.org, click on Publications and Subscriptions and scroll down to the Best in American Living link.
1989 Pfeifer King Building Corporation 1990 United Heating, Cooling & Plumbing 1997 Secured Title of Kansas City
Articles in the Winter 2015 issue include: “Smart Storage Solutions”, results of a survey revealing that “Americans Want
2000 J Davis Drywall LLC
Code Changes
Lead Paint Rule
Continued from page 15
Continued from page 12
The first hurdle: Making sure these code officials know they need to register to vote. To do so, they must fill out an application by March 19.
The proposal does not affect the initial certification process, which includes hands-on training on lead-safe work practices.
Once NAHB releases its recommendations this spring, these home builders will need to employ their networking skills and sales acumen to “sell” these recommendations to code officials. Both home builders and code officials have the same goal: safe, energy-efficient new construction. Working together, we can come up with the most cost-effective solution.
To find out when your EPA LeadSafe Certified Renovator certification expires, visit the EPA firm locator page. Learn more about the EPA lead paint rule recertification process, get additional details on the EPA lead paint rule at nahb.org/ leadpaint, or contact Tamra Spielvogel at 800-368-5242 x8327.
2013 Colt Industries, Inc. Thomson Homes LLC 2014 Aspen Contracting, Inc. Collins/TruWood Siding & Trim Cripple Creek Rock Company Dickinson Financial Corp AKA Academy Bank N.A. & Armed Forces Bank Higgins Building Company, Inc. JFE Construction Kelly Dunn Const. Inc. RE Frye Development Syler Construction, Inc. The Rob Ellerman Team
BuildingBusinessNews THE OFFICIAL PUBLICATION OF THE HOME BUILDERS ASSOCIATION OF GREATER KANSAS CITY
2001 Royal Metal Industries, Inc.
February 2015 • Volume 21 • Issue 2
2002 Gahagan & Eddy Building Company LLC
Published by the Home Builders Association of Greater Kansas City 600 E 103 Street, Kansas City, MO 64131 (816) 942-8800
2006 Kirkwood Realty Co., LLC Kreimendahl Painting Window World of KC 2009 Rosehill Gardens, Inc 2010 Associated Air Products Integrated Electronics, Inc. Legacy Custom Homes LLC 2011 Accent Doors of Kansas City
16
Kansas Gas Service Norton & Schmidt Consulting Engineers, LLC
2012 Alenco, Inc.
Copyright 2015
Executive Vice President Sara Corless Editor Marcia Jurgens Contributing Writers: Beatriz Ibarra and Megan Felling Graphics Karla Peterie, Creative Services 2015 Executive Committee Home Builders Association of Greater Kansas City President Mark Mather Vice President Brenner Holland Secretary/Treasurer Harold Phelps Associate Representative Kevin Kirtley Immediate Past President Chris Ragland To subscribe to Building Business News call (816) 733-2224 To advertise in Building Business News call (816) 942-8800 For change of address requests please fax changes to (816) 942-8367 or call (816) 942-8800 For more information, visit the HBA online at www.kchba.org
February 2015 | Volume 21, No. 2 | www.kchba.org
New Members Brookfield Residential Scott Davis 8515 Sycamore Kansas City, MO 64157 (816) 804-6570 www.brookfieldrp.com
Affiliate Memberships ACS: Concrete/Construction Ryan Drussel Bret Yates 18901 W 158th St Olathe, KS 66062 Evan-Talan Homes, Inc Jay Childs PO Box 480185 Kansas City, MO 64148 First American Title Tom Dulick 7200 College Blvd Overland Park, KS 66210 (816) 783-7386 www.firstamks.com
Morgan-Wightman Supply Company David Brady Stuart Wells Mark Young Roy Johnson 6010 Equitable Rd Kansas City, MO 64120-1308 (816) 483-2550 www.morganwightman.com
Keller Williams North Jenny Burkhead 310 NW Englewood Rd Kansas City, MO 64118 www.jennyburkhead.kwrealty
Performance Plus Homes Bruce Chyka 5165 W. 198th St. Stilwell, KS 66085 (913) 851-0732 www.performanceplushomes.net
MMI, Master Marble, Inc. Artie Lett PO Box 185 Holden, MO 64040 Morgan-Wightman Supply Company Craig Lindsay Bill Davies Jim Wells
Realty Executive Area Realtors Miles Rost 11401 Ash St Leawood, KS 66211 (913) 451-4888
Thermal King Windows Steve Sage 14368 W 96th Terr Lenexa, KS 66215 (913) 451-2300 www.thermalkingwindows.com
Rodrock Homes, LLC Jeff Reglin Steve Campbell 9550 Dice Lane Lenexa, KS 66213 (913) 851-0347 www.rodrockhomes.com
O’Connor Co. Amy McDaid 14851 W 99th Lenexa, KS 66215 Olsson Associates Brad Sonner 7301 W. 133rd Street, Ste 200 Overland Park, KS 66213 (913) 381-1170 www.oaconsulting.com
The National Home Building Co. Tony Borchers PO Box 14146 Parkville, MO 64152-0646 (816) 746-0200 www.thenationalgolfclub.com
Renner Supply Company Brad Williamson Ty Collins Paul Bradle 3530 NE Kimball Dr Kansas City, MO 64161 (816) 413-1650
North American Savings Bank Donna Williams Drake Vidrine Chris Vick Tom DeGregorio Pete Mendenhall 12520 S. 71 Hwy Grandview, MO 64030-1192 (816) 214-8106 www.nasb.com
Kansas City Title Patty Henning 11601 Grenada Ln Leawood, KS 66211 (913) 266-5614 www.kansascitytitle.com
Ray Cochran & Co. LLC Concrete Work Elenore Chipman 4412 NW Briarcliff Lane Gladstone, MO 64116 (816) 694-2100
RubinBrown LLP Chester Moyer 10975 Grandview Dr Overland Park, KS 66210 (314) 290-3300 www.RGB.com Summit Custom Homes, LLC Doug Jenson Kyle Jones Valerie Rolfes 120 SE 30th Street Lee’s Summit, MO 64082 (816) 246-6700 www.summitcustomhomeskc.com
Property Law Firm Michelle Burns 4630 W 137th, Suite 200 Leawood, KS 66224 (913) 663-1300 www.propertylawfirm.com 17
Tabernacle Homes, LLC Steve Stemer 11417 Strang Line Road Lenexa, KS 66215 (913) 839-2925 www.tabernaclehomesllc.com
United Heating, Cooling & Plumbing Jerry Lambert Mark McWilliams Brian York Jim Evans Gayla Andriano Chris Findley 301 Duck Rd Grandview, MO 64030 (816) 761-5262 www.unitedheatingandcooling.com Wilson Lighting George McMillen Robert Wilson Dave DeRosear Isaiah Eberhart Bob Rabinowitz Jason Tyler Brian Hodges 10530 Marty Overland Park, KS 66212-2551 (913) 642-1500 www.wilsonlighting.com Wood Haven, Inc. Rebecca Waugh 401 W Bridge St. Perry, KS 66073 (785) 597-5618 www.midwestcypress.com
www.kchba.org | Volume 21, No. 2 | February 2015
Millennials Seek Smaller Homes, Won’t Sacrifice Details
As Millennials begin to enter the home buying market in larger numbers, homes will get a little smaller, laundry rooms will be essential, and home technology increasingly prevalent, said panelists during an International Builders’ Show press conference on home trends and Millennials’ home preferences last week. NAHB Assistant VP of Research Rose Quint predicted that the growing numbers of first-time buyers will drive down home size in 2015. Three million new jobs were created in 2014, 700,000 more than the previous year “and the most since 1999,” Quint said. At the same time, regulators have reduced downpayment requirements for first-time buyers from 5% to 3% and home prices have seen only moderate growth. “All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable 18
homes,” Quint said. “Builders will build whatever demand calls out for.” Quint also unveiled the results of two surveys: one asking home builders what features they are most likely to include in a typical new home this year, and one asking Millennials what features are most likely to affect their home buying decisions. Of the Top 10 features mentioned by home builders, four have to do with energy efficiency: Low-E windows, Energy Star-rated appliances and windows and programmable thermostats. The top features: master bedroom walk-in closets and a separate laundry room. Least likely features include high-end outdoor kitchens with plumbing and appliances and two-story foyers and family rooms. “Consumers don’t like them anymore, so builders aren’t going to build them,” Quint said. Continued on next page
February 2015 | Volume 21, No. 2 | www.kchba.org
Looking Forward to the Spring Parade of Homes
Millennials Seek Smaller Homes Continued from page 4 When NAHB asked Millennials what features fill their “most-wanted” shopping list, a separate laundry room was clearly on top, with 55% responding that they just wouldn’t buy a new home that didn’t have one.
Must haves: Energy efficiency, walk-in closets and separate laundry rooms Storage is also important, with linen closets, a walk-in pantry and garage storage making the Top 10 – along with Energy Star certifications. In fact, this group is willing to pay 2-3% more for energy efficiency as long as they can see a return on their power bills. If they can’t quite afford that first home, respondents said they’d be happy to sacrifice extra finished space or drive a little farther to work, shops and schools, but are unwilling to compromise with less expensive materials. A whopping 75% of this generation wants to live in single-family homes, and 66% prefer to live in the suburbs. Only 10% say they want to stay in the central city. Compared to older generations, Millennials are more likely to want to live downtown, but it’s still a small minority share, Quint said. Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed Millennials’ empha-
sis on the importance of outdoor living and that generation’s seamless use of technology, and how those two trends play into their home buying and home renovation decisions.
Kansas City home builders are busy preparing their entries for the 53rd annual Spring Parade of Homes to be held April 25th through May 10th. While the final deadline to enter a home in the parade was February 6, there is still time for builders to increase their exposure by entering a home in the American Dream Award contest held in conjunction with the Parade. The early deadline for entry is March 6 at a cost of $250; the late deadline is March 20 for $400. Entries are judged by building professionals from outside the Kansas City area. Winners will be recognized at the Awards ceremony on April 29, listed in a
Because they generally don’t have as much ready cash or free time as older home owners, Millennials seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights and landscaping that needs less watering and mowing, like succulent plants and larger patios. They’re also very comfortable with their smartphones and tablets, and increasingly seek ways to control their heating and air-conditioning and security and lighting as well as electronics like televisions and sound systems from their phones. “They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” Waage said.
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full page ad in the Kansas City Star, other local newspapers, the KCHBA Parade website and in the Fall 2015 Parade Guide. Questions may be directed to Gina Battle at gina@kchba.org or phone 816-733-2219.
www.kchba.org | Volume 21, No. 2 | February 2015
The Latest Analysis of the Impact of Home Building in Kansas City
Webinar Wednesdays: Spend an Hour with the NAHB
The Kansas City Home Builders Association recently submitted data to the Housing Policy Department of the NAHB in order to obtain an analysis of the impact of home building on the local economy. The following are excerpts from the report.
The NAHB offers continuing education from the comfort of your own computer every Wednesday with their online seminars. Even if you can’t participate in the live event, you can participate through the on-demand version.
are also one-year impacts that include both the direct and indirect impact of the construction activity itself, and the impact of local residents who earn money from the construction activity spending part of it within the local area. Local jobs are measured in full time equivalents—i.e., one The Metro Area Impact of reported job represents Home Building in Kansas City enough work to keep one Income, Jobs, and Taxes Generated worker employed fulltime for a year, based on average hours worked per January 2015 week by full-time emHousing Policy Department ployees in the industry.
Home building generates substantial local economic activity, including new income and jobs for residents, and additional revenue for local governments. The National Association of Home Builders has developed a model to estimate these economic benefits. The model captures the effect of the construction activity itself, the ripple impact that occurs when income earned from construction activity is spent and recycles in the local economy, and the ongoing impact that results from new homes becoming occupied by residents who pay taxes and buy locally produced goods and services. In order to fully appreciate the positive impact residential construction has on a community, it is important to include the ripple effects and the ongoing benefits. The estimated one-year metro area impacts of building 4,500 single-family homes in Kansas City include: $1.1 billion in local income $108.8 million in taxes and other revenue for local governments 17,917 local jobs. These are local impacts, representing income and jobs for residents of the Kansas City Metropolitan Statistical Area, and taxes (and other sources of revenue, including permit fees) for all local jurisdictions within the metro area. They
Webinar Wednesdays starts off the first quarter of 2015 with a strong focus on technology. From the types of devices, to social media platforms all the way to analyzing your data, by the time March is over, you’ll be the most technologically advanced building professional in the industry! The spring schedule includes:
Significant Changes to the 2015 International Codes, Feb. 25 What’s ‘Appening: Tech Tips and Tricks for Building Professionals on the Go, March 4 The Social Society: The Nuts and Bolts of Getting Started in Social Media, March 25 New Employee Safety Orientation: What They Need to Know, April 15
The additional, annually recurring impacts of building 4,500 single-family homes in Kansas City include:
The Remodeler’s Guide to Happy Customers: Managing Emotional Home Owners, May 6 In addition to these live classes, the list of titles available on-demand continues to grow. The following is just a selection of archived webinars:
$154.0 million in local income $43.4 million in taxes and other revenue for local governments
Business Improvement Series Business Improvement Series
2,704 local jobs. These are ongoing, annual local impacts that result from the new homes being occupied, and the occupants paying taxes and otherwise participating in the local economy year after year. The ongoing impacts also include the effect of increased property taxes, based on the value of the improvements (including both lot development and home construction) assuming that unimproved land zoned residential would be taxed at the same rate as improved property with a completed housing unit.
Solving the Supplier/Trade Shortage: New Rules, New Thinking
The full reports produced by the NAHB include extensive detailed information and the technical explanation of the calculations used to provide the analysis. The KCHBA will share this information in meetings with government officials and other interested groups.
The 2012 National Green Building Standard: What Builders and Remodelers Need to Know
Using Design Trends to Create a Competitive Advantage The New Rules for New Home Sales: Revamping the Tactics Marketing Your Business in the ‘Participation Age’ Better Product Positioning through Competitor and Consumer Research Planning for Profits in Your Remodeling Business Using Your NAHB Designations to Mine Marketing and PR Gold 5 Modern SEO Errors That Could Be Opportunities: How to Thrive in the Search
Keep Bedbugs from Infesting Your Company’s Bottom Line Risk Management Fundamentals for Home Builders and Contractors Mark Up & Margin: Pricing Strategies That Will Maximize Profits 20
Continued on page 21
February 2015 | Volume 21, No. 2 | www.kchba.org
Design and Technology Series Design and Technology Series
Pride in everything we do – even in the work you don’t see.
Sherwin-Williams Colormix 2015 Best in American Kitchens Falling In Love with the Neighborhood Achieving Green Development Objectives through Site Planning Energy Efficiency: Boomers Want It, New Homes Deliver It Selling Universal Design So Buyers See It as a Plus Policy and Finance Series Policy and Finance Series Strategies for Serving America’s Veteran Population Top 10 OSHA Citations for Construction and How to Avoid Them Construction Financing for Small-Volume Home Builders Securing Capital for Your Company’s Growth Intro to OSHA for Small Builders
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Financing for Home Builders Builders Guide to Appraisals: Obtaining Accurate Valuations on New Homes Sales and Marketing Series Sales and Marketing Series Automated Reporting and Analysis with Google Analytics Build Client Confidence and Increase Green Home Sales Social Media for Remodelers: Does It Really Work? Wellness is the New Black: Features that Attract Customers to New Communities Big Picture Marketing for 2015: Building a Solid Foundation for Your Business A Playbook for Market Domination (P)incredible Pinterest: Using Pinterest to Market Homes Doing Well by Doing Good: Building Strategic Partnerships Through Community Action Boomers in Your Backyard To access Wednesday Webinars, click on the Education & Events button at nahb.org and scroll down to the Webinar Wednesdays icon. The cost per class is $24.59 for NAHB members and $44.95 for non-members.
ROCKTOPS 21
www.kchba.org | Volume 21, No. 2 | February 2015
55+ Housing Market Going Strong The 55+ housing market fared quite well in 2014, and 2015 should be no different, according to industry experts at a press conference held at the NAHB International Builders’ Show (IBS) in Las Vegas. “The 55+ housing market has been one of the healthiest segments of the overall housing market, and is likely to remain that way over the next several years,” said Paul Emrath, NAHB’s vice president of survey and housing policy research. “When you look at age-restricted single-family starts, there were as many in the first half of 2014 as in all of 2012. And going forward, the steady rise in the 55 and over population will signal an increased need for housing to accommodate that group.” Emrath also noted that builder confidence has steadily increased over the past several years. “NAHB’s 55+ Housing Market Index (HMI), a survey of members that measures builder and developer confidence for that market, has regularly posted year-over-year gains.” Builders and developers say they have seen an increase in not only in the number of people who are generally interested in 55+ housing, but also in the number of people who are actually making the move to purchase a new
HBA Members Recognized with National Awards Helen Bartlett of Refined Interior Staging Solutions won three national awards at the R.E.S.A.’s (Real Estate Staging Association) National Convention in Las Vegas, January 1416. Bartlett, a Sales and Marketing Council member, was voted one of the top ten Home Stagers for 2015 in Occupied, Unoccupied Homes and Top Ten Redesigners of the Year.
home. “We are seeing more consumers actually make the decision to buy a new home as they are able to sell their current home at an acceptable price,” said Steve Bomberger, chairman of NAHB’s 50+ Housing Council and president of
B.L. Rieke Custom Home Builders has been voted by the Houzz.com community as a winner of the Best of Houzz 2015 awards in the Design category. Houzz is a leading platform for home remodeling and design. Rieke’s online portfolio includes some of the most popular images on Houzz in 2014 among its more than 25 million monthly users. B.L. Rieke
Custom Homes has over 25 years of experience building quality homes with skill in every size, style, and price range. Starr Homes of Kansas City has been awarded Best of Houzz for both Design and Customer Satisfaction. Brothers Kit and Gerry Starr were chosen by users that comprise the Houzz community from among more than 500,000 active home building, remodeling and design industry professionals. The Kansas City metro custom design/build firm is celebrating their 10-year anniversary this year. Customer Satisfaction honors are determined by a variety of factors, including the number and quality of client reviews a professional received in 2014.
Benchmark Builders Inc. in Wilmington, Del. “We are busier now than ever before. And I don’t think it’s going to slow down anytime soon.” “Consumers in this market are looking for a home that accommodates their specific needs, and 55+ builders and developers are able to create homes and communities that address these needs,” said Timothy McCarthy, vice chairman of NAHB’s 50+ Housing Council and managing partner of Traditions of American in Radnor, Pa. “As the economy continues to improve, so does our overall business. Builders in this market have the opportunity to have tremendous success since the population we are serving is so vast.”
Professional Remodeler magazine, with the supporting sponsorship of NAHB, will hold a special event on February 12 at Arrowhead Stadium. A welcome and Kohler Experience will kick-off the program, beginning at 2:00 pm. The agenda includes presentations on “Using Houzz to Market Your Business”, “Creating a World Class Team” and “Social Media & Reputation Management Best Practices for Remodelers”. There will be networking and product display throughout the evening, along with food and drink. Best of all — HBA members who join the Remodelers Council will receive two free tickets to this event. Just call the HBA at 816-942-8800 to register for the Council and the Leadership Tour. THANK YOU TO OUR SUPPORTING SPONSOR
THANK YOU TO OUR CONTRIBUTING SPONSORS
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February 2015 | Volume 21, No. 2 | www.kchba.org
Single Family Housing Finishes 2014 with 3% Gain Over 2013 Single family housing experienced limited growth in 2014 over 2013 yet still reached the highest number since 2007 according to the Home Builders Association of Greater Kansas City’s (HBA) monthly Residential Building Permit Statistics report. The year ended with 4,220 single family permits compared to 4,090 in 2013. Including multi-family units, the total for 2014 was 8,130 compared to 6,969 in 2013 for an overall 17 percent increase. Looking at housing production over the past 35 years, single family permit activity stands at 66% of the average during that time period. The 3,910 multi-family units permitted during 2014 is 131% of the average over the past 35 years. “According to a recent study by the National Association of Home Builders, the construction of these 4,090 homes added over $1 billion in income to the Kansas City area economy, generated $108 million in taxes and other revenue for local governments and provided over 17,000 jobs,” said HBA Executive Vice President Sara Corless. “We expect that impact to be even larger as housing experiences the 15 to 25% increase during 2015 forecasted by economists.” Kansas City issued the most single family permits during 2014 with 841 in Jackson, Clay and Platte counties. Olathe at 505 single family units, Overland Park with 388, Lee’s Summit’s with 321 and Shawnee’s total of 203 rounded out the top five cities. While Johnson County led area counties with 1586 permits in 2014, its overall share slipped from 41% to 38% among the eight counties of the region. Clay and Jackson counties both increased in percentage of the overall total with the remaining counties remaining unchanged or recording a slight decrease.
Residential Building Permit Statistics
December 2014 Residential Building Permit Statistics CASS COUNTY Archie Belton Cass County Cleveland Drexel Garden City Harrisonville Lake Winnebago Lee's Summit Peculiar Pleasant Hill Raymore Village of Loch Lloyd
CLAY COUNTY Clay County Excelsior Springs Gladstone Kansas City Kearney Lawson Liberty North Kansas City Pleasant Valley Smithville JACKSON COUNTY Blue Springs Buckner Grain Valley Grandview Greenwood Independence Jackson County Kansas City Lake Lotawana Lee's Summit Oak Grove Raytown Sugar Creek PLATTE COUNTY Edgerton Kansas City Parkville Platte City Platte County Riverside Weatherby Lake Weston JOHNSON COUNTY De Soto Edgerton Fairway Gardner Johnson County Leawood Lenexa Merriam Mission Hills Olathe Overland Park Prairie Village Shawnee Spring Hill Westwood
Single Family Units^
M-F Units Sale%
M-F Units Rent
Total Units
S-F Units YTD
M-F Sale YTD
0 1 5 0 0 0 0 0 1 7 3 14 0 31
0 0 0 0 0 0 0 0 0 0 0 56 0 56
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 1 5 0 0 0 0 0 1 7 3 70 0 87
9 11 46 0 0 0 5 4 26 14 18 103 13 249
0 0 0 70 5 0 0 0 0 7 82
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 70 5 0 0 0 0 7 82
3 0 1 0 2 3 8 14 0 24 0 0 0 55
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 44 0 88 0 0 0 132
0 7 12 0 5 0 3 0 27
0 0 0 0 0 0 0 0 0
4 0 0 7 5 4 8 2 0 20 19 0 14 2 0 85
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
DECEMBER 2014 M-F Rent YTD
Total Units YTD
0 0 0 0 0 0 0 0 0 0 0 56 0 56
0 0 0 0 0 0 0 0 0 0 0 0 0 0
9 11 46 0 0 0 5 4 26 14 18 159 13 305
21 2 5 581 59 1 30 13 0 57 769
0 0 0 0 0 0 0 0 0 0 0
0 0 0 741 0 0 0 0 0 0 741
21 2 5 1322 59 1 30 13 0 57 1510
3 0 1 0 2 3 8 58 0 112 0 0 0 187
165 0 68 7 37 57 56 98 12 295 18 0 0 813
0 0 0 0 0 0 0 0 0 0 0 0 0 0
108 0 0 0 0 0 0 628 0 250 0 0 0 986
273 0 68 7 37 57 56 726 12 545 18 0 0 1799
0 0 0 0 0 0 0 0 0
0 7 12 0 5 0 3 0 27
0 162 66 1 104 0 13 0 346
0 0 0 0 0 0 0 0 0
0 355 0 0 0 0 0 0 355
0 517 66 1 104 0 13 0 701
0 0 0 0 0 0 0 0 0 95 0 0 0 0 0 95
4 0 0 7 5 4 8 2 0 115 19 0 14 2 0 180
17 0 1 78 51 86 188 6 4 505 388 16 203 43 0 1586
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 506 0 0 311 552 0 0 0 91 1460
17 0 1 78 51 86 694 6 4 816 940 16 203 43 91 3046
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LEAVENWORTH COUNTY Basehor Lansing Leav. County Leavenworth Tonganoxie WYANDOTTE COUNTY Bonner Springs Edwardsville KCK/Wyandotte Co MIAMI COUNTY Louisburg Miami County Osawatomie Paola Spring Hill
December 2014
Single Family Units^
M-F Units Sale%
M-F Units Rent
Total Units
S-F Units YTD
M-F Sale YTD
M-F Rent YTD
Total Units YTD
12 4 3 1 0 20
0 0 0 0 0 0
0 0 0 0 0 0
12 4 3 1 0 20
113 22 54 10 25 224
0 0 0 0 0 0
0 0 0 0 0 0
113 22 54 10 25 224
1 0 17 18
0 0 0 0
0 0 0 0
1 0 17 18
12 1 168 181
0 0 0 0
0 0 312 312
12 1 480 493
0 5 0 0 0 5
0 0 0 0 0 0
0 0 0 0 0 0
0 5 0 0 0 5
4 42 0 1 5 52
0 0 0 0 0 0
0 0 0 0 0 0
4 42 0 1 5 52
323
56
227
606
4220
56
3854
8130
Comparison of Single Family Building Units for Greater Kansas City
(Cass, Clay, Jackson, Platte, Johnson, Leavenworth, Miami, Wyandotte Counties)
Month/Year January February March April May June July August September October November December Annual Total
2007
353 475 824 687 677 616 546 515 397 597 385 313
6,385
2008
221 262 353 441 231 260 311 293 264 314 167 115
3,232
2009
96 129 131 184 189 204 196 207 219 226 192 182
2,155
2010
137 145 252 228 213 239 180 243 173 279 173 209
2011
90 121 180 210 230 262 204 205 202 205 185 207
2,471 2,301
2012
188 182 270 277 294 268 288 260 379 331 283 279
3,299
2013
273 224 335 444 337 333 409 354 384 369 340 288
4,090
2014
283 219 361 441 381 359 358 347 377 465 306
323 4,220
All numbers shown in the box above are ACTUAL numbers.
Comparison of Permits By Units Issued Year to Date* 2007-2014 2007 2008 2009 2010 2011 2012 2013 2014
S-F Units 6385 3232 2155 2471 2301 3299 4090 4220
M-F Units
1520 1830 1497 253 600 1775 2879 3910
Total Units
7905 5062 3652 2724 2901 5074 6969 8130
^The Single Family number is units and includes both attached and detached units. %Multi-Family units are in buildings with 5 or more units and are divided by sale/rent. # Not available at time of report Permit information reflects the most recent data at time of publication. In order to ensure accurate recording of residential building permit statistics, the HBA may revise monthly and year-to-date figures when updated data is made available.
www.kchba.org | Volume 21, No. 2 | February 2015
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