Build Maryland November/December 2017

November/December 2017 The exclusive magazine of MBIA

2017 REMODELING & CUSTOM BUILDING AWARDS BEDROOMS, BATHROOMS AND BEYOND

8

PROS AWARDS

12

IT’S TIME TO FOCUS ON DIGITAL ASSETS

28

FUNDAMENTALS OF LAND DEVELOPMENT PART 7

New fangled stuff.

Old-fashioned service.

Vintage provides innovative technologies to make homes safe and enhance lifestyles. Call us for security systems, home theatre, whole house music systems, home automation, and structured wiring.

Contact Kevin Price 1-877-767-1800 OďŹƒces in Jessup, MD, Prince Frederick, MD and Chantilly, VA

IN THIS ISSUE

16

FEATURES COVER FEATURE

16

REMODELING & CUSTOM BUILDING AWARDS 2017 Bedrooms, Bathrooms and Beyond

8

REAL ESTATE MUST FOCUS ON DIGITAL ASSETS The Risks and the Rewards

IN EVERY ISSUE 2

EVENTS CALENDAR

36 NEW PRODUCT SPOTLIGHT

4

PRESIDENT’S MESSAGE

38 NEW MEMBERS

5

CEO’S MESSAGE

40 STARS CLUB

6

LEGAL BRIEF

40 THE BUILDER’S BOOKSHELF

12

THE PROS AWARDS It Takes PROS to Build a House

32 ENGINEER’S TOOLBOX

40 ADVERTISER INDEX

28

FUNDAMENTALS OF LAND DEVELOPMENT PART 7 How Water Resources Management has come to Dominate Land Planning

34 STATS & FACTS

marylandbuilders.org

BUILD MARYLAND

1

EVENTS CALENDAR

NOVEMBER Remodeling & Custom EDITOR Building Awards

Kristin Josephson Hogle, Communications Director communications@homebuilders.org

Historic Savage Mill Savage, MD November 2

ADVERTISING

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

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

Multifamily Trends HBAM LEGAL COUNSEL Linowes and Blocher Conference MID-ATLANTIC BUILDER Greenbelt Marriott

is a publication of HBAM Member Services, Inc., a subsidiary Greenbelt, MD of the Home Builders Association of Maryland, Inc., November 9 6030 Daybreak Circle #A150 PMB 362 Clarksville, MD 21029 410-265-7400, www.homebuilders.org.

last

Meet the Mentor Breakfast

er

featured on

MBIA Awards of Excellence

PWB’s Holiday Luncheon Facci Laurel, MD December 5

Helps You Reach The The Hotel At 2012Preserve IECC Energy Anne Code Arundel Arundel Chapter Hanover, MD Requirements At Lower Holiday Party November 15 Construction Costs!Whitehall Development Annapolis, MD December 6

Mortgage The Enviro-Dri Weather-Resistant Barrier reduces the n Burning & Donor per hour (ACH), giving you the greatest flexibility in re Land Appreciation energy code targets, at a construction cost that’s equa Development current costs.

Event MBIA Council Fulton, MD By reducing air changes, y Holiday November 30 construction options and st Breakfast ®

• Retain your current 2x4 Eggspectation Ellicott City, MD • R-38 blown ceiling insul December 7 path code requirements;

Fulton, MD 13 ECO November BOX

• You can meet the 2012 c sheathing or 2x6 walls.

Mid-Atlantic Builder text and cover pages are printed on SFI certified Anthem Plus Gloss using soy ink.

age

er

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

DECEMBER How will you m 2012 Energy Code req

BUILD Maryland text and cover pages are printed on SFI certified Anthem Plus Gloss using soy ink.

The Sustainable Forestry Initiative® program promotes sustainable forest management.

• The Sustainable Forestry Initiative® program promotes sustainable forest management. *Changes in dates and locations of events

listed on our calendar do occur. Please visit www.marylandbuilders.org for the latest information.

2

e a positive through

BUILD MARYLAND

Contact Eddy Esplund, Tremco Barrier Solutions, to sched “Energy Trade-Off Analysis” on your most popula Enviro-Dri WRB can reduce air changes, reduce your co you meet the 2012 IECC code.

BUILD Maryland is published bimonthly by MBIA—the Maryland Building Industry Association, 11825 West Market Place, Fulton, MD 20759. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of MBIA. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to MBIA, 11825 West Market Place, Fulton, MD 20759, USA. © 2017 MBIA. All rights reserved.

November/December 17

EDDY ESPLUND, CSI-CDT AT 609.

EESPLUND@TREMCOINC.C

Giving my crew the tools to work smarter.

Putting people’s safety ahead of profit.

Choosing Builders Mutual insurance.

That’s how I get the job done right.

BuildersMutual.com

marylandbuilders.org

BUILD MARYLAND

3

PRESIDENT’S MESSAGE

The exclusive magazine of MBIA

ENDURANCE

I

want to thank all of our members for making this a good year for our industry and for me personally. Without your support we could not have accomplished nearly what we have. Like many other things we do, it seems we take three steps forward and two steps back, but we still are able to make progress over time. Credit also should go to our wonderful staff. I have tried to attend as many events as possible this year. Every one of these events was well staffed, whether held in Ocean City, Harford, Prince George’s or Montgomery County. So I thank them, and hope you will take whatever opportunity you might have to thank them as well!

I have been trying to figure out why our members continue to endure the various pitfalls endemic within our industry year after year. I understand the potential profit motivations, but also the potential losses. If you can get through the unending hurdles, you are entitled to make a profit. Our industry is looking more like one a venture capitalist would fund; trying to make enough profit on the deals that work, to cover the losses on the ones that don’t. Hopefully we aren’t that far gone yet, but this seems to be where things are headed. Sorry for seeming pessimistic. A couple months ago I read where one of our larger members was turned around by a local county and a judge and will suffer a huge loss ($50mm). How many of us can afford to lose that kind of money? This truly is becoming a game for large players. I have always said that when you start a project you can’t see where it will end, as it is impossible to guess what might happen prior to completion.

So, why do we keep on doing it? The only reason I can come up with is, that despite all of the rhetoric, in our heart of hearts we know that BUILDING HOMES IS DOING THE RIGHT THING! Despite the parents who blame us for redistricting their children from overcrowded schools when their boards of education fails to properly redistrict, or those with five cars in the driveway who say we have caused all their traffic woes, or those who think we have taken down all of their trees, failing to realize that we plant many times as many as we take down, building shelter for people and their families is something for which we should all be PROUD! Many of these same people who try to stop our projects actually live in our product (okay, probably all). Why do they think their home should have been the last one built? As I look back on the recent damage in Texas and Florida and the thousands of people who had damage from the hurricanes, I wonder how many of them think we should be out of business?

We should always strive to do a better job, but can we please acknowledge that our communities, the same ones we live in, are much BETTER places due to our efforts and endurance.

2017 MBIA LEADERSHIP EXECUTIVE COMMITTEE President, Steve Breeden 1st Vice President, Jeff Caruso Vice President Advocacy/ State, Mike McCann Vice President Advocacy/ Washington Market, Jude Burke Vice President Advocacy/ Baltimore Market, Tim Morris Vice President, Associates, Peggy White Treasurer, Kimberley Palmisano Secretary, Mike Schueler Life Director, Mark Bennett Immediate Past President, Dave Lunden Legal Counsel, Jack Orrick

CHAPTER PRESIDENTS Advocacy/Anne Arundel County, Marilee Tortorelli Advocacy/Baltimore City, Jon Laria Advocacy/Baltimore County, Jennifer R. Busse, Esq. Advocacy/Carroll County, James Mathias Advocacy/Charles County, Doug Meeker Advocacy/Eastern Shore, Paula Bahler Advocacy/Howard County, James Fraser Advocacy/Montgomery County, Vacant Advocacy/Prince George’s County, Ken Dunn Advocacy/Southern Maryland, Tom Thomas Advocacy/Upper Chesapeake, Michael Charlton Advocacy/Washington DC, Andrew Bolton

COUNCIL CHAIRS Builder Mart, Joe Fleury Custom Builders Council, Larry Cafritz Future Industry Leaders Council, Alex Villegas Green Building Council, Thom Marston Land Development Council, Robb Aumiller Multifamily Housing Council, Jeff Kayce Professional Women in Building Council, Maggie Witherup Remodelers Council, Rich Lang Sales & Marketing Council, Pete Baxter

MEMBERS AT LARGE Phil Hughes Cindy Plackmeyer Barbara Richman Dusty Rood Steve Rubin

Jeremy Rutter Michael Schonfeld Robert Spalding David Winstead

SUBSIDIARIES Builders Development Guaranty Group/President, Scott Nicholson Home Builders Care Foundation/President, Chris Rachuba PUBLISHER Lori Graf, CEO lgraf@marylandbuilders.org EDITOR Kelly H. Grudziecki Director, Internal Communications kgrudziecki@ marylandbuilders.org

ADVERTISING Chris Baughan Sales Manager cbaughan@marylandbuilders.org DESIGN The YGS Group Creative Director, Serena L. Spiezio Graphic Designer, Zon Buckley Account Manager, Tamara Smith

STEVE BREEDEN President, MBIA

4

Maryland Building Industry Association 11825 W. Market Place Fulton, MD 20759 Ph: 301-776-MBIA www.marylandbuilders.org Info@marylandbuilders.org

BUILD MARYLAND

November/December 17

CEO MESSAGE

ADVOCACY WORKS

W

hat do we mean by advocacy works and what does it mean to you? Advocacy is the active promotion of a cause or principle to influence decisions within political, economic, and social systems and institutions. MBIA’s causes are the home building, development, multi-family and remodeling industries and our influence is broad. It matters to you because the issues for which we advocate affect your bottom line and your ability to do business.

Our government affairs team works at the county, state and federal level to put our members and our association at the forefront of the political discussion. In order to lobby effectively, we must build our network of motivated members. That means you.

Every time we engage in a discussion and debate surrounding pending legislation and regulations with great numbers, we become more recognized and respected.

Some of the big issues coming up during the legislative session this year include, mandates against wood frame construction, Best Available Technique requirements on septic systems and restrictive forest conservation directives. It is so important we work together to relay our message to our legislators in a loud and strong voice.

We reviewed 199 bills in 2017 and took at position on 97 of them. By engaging our elected officials and providing them with the information to help them clearly understand our issues, we can effectively influence policy and potentially shape the direction of our entire industry.

For example, National Association of Home Builders’ 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 and $111 million in taxes and revenue for state, local and federal governments.

Do you think our elected officials realize how great an impact our industry has on the economy? Do they understand their decisions to raise fees and make building more burdensome can ultimately increase the cost of home ownership for their constituents?

HOW CAN YOU HELP? Use our Quick Sign Up link to become part of MBIA’s strong advocacy program and help us stop burdensome regulations against our industry. Just visit marylandbuilders. org/voter-voice to sign up and enter your information. You can also help us make a connection. Do you know a Federal or Maryland State legislator? Are you a neighbor, friend or business associate? We want to know. In the future, we may call on you for an introduction to that legislator. This can make a big difference when important legislation affecting the building industry comes our way.

We have accomplished so much for the industry and we want to continue our successes with your support. You can visit marylandbuilders.org/govt-affairs to read our 2017 Session Report to see the issues we faced and their legislative outcome.

We appreciate your engagement and will continue to monitor state and local legislative, governmental and regulatory activities, which impact the housing industry and coordinate MBIA’s actions and responses on your behalf.

LORI GRAF CEO, MBIA

marylandbuilders.org

BUILD MARYLAND

5

LEGAL BRIEF

THE MARYLAND CUSTOM HOME PROTECTION ACT

by SEAN P. SHERMAN, SHULMAN ROGERS

All custom home builders in Maryland are subject to the Maryland Custom Home Protection Act (Maryland Code (Real Property) § 10-501, et seq., the “Act”). Unfortunately, not all such builders are aware they are subject to the Act, or what the Act demands of them, including what they are required to include in their contracts with buyers.

The items that a custom home builder must include in his contracts are set forth in §10-505 of the Act. That section states: Every custom home contract between a custom home builder and a buyer must be in writing, and shall: (1) Include a draw schedule that shall be set forth on a separate sheet of paper and that shall be separately signed by the buyer and the custom home builder; (2) Identify, to the extent known, the names of the primary subcontractors who will be working on the custom home;

than $500 of goods or services to date and indicate which of them has been paid by the vendor or builder; and (6) Require that the custom home builder provide waivers of liens from all applicable subcontractors, suppliers, or materialmen within a reasonable time after the final payment for the goods or services they provide.

Failure to comply with the foregoing requirements not only violates the Act, but could also violate the Consumer Protection Act and invalidate the

(3) Expressly state that any and all changes that are to be made to the contract shall be recorded as “change orders” that specify the change in the work ordered and the effect of the change on the price of the house; (4) Set forth in bold type whether or not the vendor or builder is covered by a warranty program guaranteed by a third party; (5) Require the vendor or builder to deliver to the purchaser within 30 days after each progress payment a list of the subcontractors, suppliers, or materialmen who have provided more

6

BUILD MARYLAND

November/December 17

contract with the owner. The problems occur after the builder has completed some or all of the work, has not been paid in full and the owner becomes dissatisfied. Whatever the reason, the contract may be invalid, the builder may not be entitled to get paid for completed work, and the builder could owe the owner damages (if a court determines that the builder violated the Consumer Protection Act).

Some custom home builders are not even aware of these requirements, and have not yet had a problem. They need to be aware, however, so they can avoid being tripped up by the requirements, especially § 10-505(3) concerning “change orders.” By its seemingly plain language, §10-505(3) only requires that the contract “expressly state” the infor-

mation about change orders, nothing more; and if the language is expressly stated in the contract but the builder fails to follow it, that failure should constitute a breach of the contract, but not an invalidation of the contract itself.

Courts have interpreted the language, however, to mean that even if the language is in the contract, the failure to follow the language in the contract is a violation of the Act and, most likely, of the Consumer Protection Act. We faced that same situation in a recent case. Our custom home builder client’s contract clearly “expressly stated” the statutorily required language. A dispute occurred, however, after the house and site work were complete and the builder submitted a change order for more than $500,000 for extra site work the owner had clearly ordered.

The owner refused to pay for the extra site work because the change order was not provided to him before the extra required/agreed site work commenced.

A lawsuit ensued whereby the builder sought a mechanic’s lien and the owner argued that the contract was not valid and payment was not due because the Act allegedly required change orders in advance of the work, and did not just obligate the builder to include the operative language in the contract.

Clearly, the language of the Act does not specifically require advance change orders. Indeed, such a requirement would effectively prohibit a builder from performing work on a cost-plus basis.

In our case, the owner wanted a large, flat back yard with enough space for a future pool. The approved site plan, however, required the house to be located further up on the lot, such that the only way to build that yard would be for extra site work involving importing tons of dirt and construction of lengthy 20-foot tall retaining walls. The contract contained a provision that effectively amounted to a cost-plus arrangement for the site work—which makes sense

Failure to comply with the foregoing requirements not only violates the Act, but could also violate the Consumer Protection Act and invalidate the contract with the owner.

since such work is often subject to governmental changes after the building permit has been obtained. The jury found for our client and awarded more than $500,000 in damages related to the change order. Maryland’s Court of Special Appeals, however, decided that just including the language in the contract was not enough, but the failure to provide the change order before the extra site work commenced violated the Act. Nonetheless, that Court confirmed the award of damages to the builder, despite the Court’s conclusion that the builder violated the Act, because the owner had received the benefit of the work. The Court found no violation of the Consumer Protection Act because the owner failed to prove that it suffered “actual damages”— a necessary element for a Consumer Protection Act claim.

Section 10-505(3) is just one potential pitfall. Failure to include any of the other requirements of section 10-505 in the contract could garner the same result. These are not the only required disclosures, however, in a custom home contract. Section 10-506 of the Act requires such contracts to contain three other disclosures—on separate sheets of paper and signed by the buyer— namely, “Buyer’s risk under mechanic’s lien laws,” “Builder’s Certification” and

“Escrow account requirements.” The Act requires the statutory disclosure language to be included in the custom home contract. For the Escrow account disclosure, however, not following the escrow requirements can also get a custom home builder in hot water, similar to the §10-505 requirements.

Specifically, the Act requires that unless the owner’s lender is federally chartered or falls under Maryland’s Financial Institutions Article, the builder must place in an escrow account all deposits and other payments made in advance of the subject work that exceed 5% of the contract price. Separate escrow accounts are not required for each owner, but the account must be separate from the builder’s other accounts.

In sum, custom home builders need to know the Act’s requirements; whether in the context of change orders, draw schedules, escrow requirements, lien waivers, identifying the builder’s subcontractors, timely providing subcontractor progress payments, or submitting applicable lien waivers. As the old proverb states: “an ounce of prevention is worth a pound of cure.” When was the last time you had your contract reviewed by legal counsel?

Sean P. Sherman is a shareholder at Shulman Rogers, primarily representing national and regional new home builders and land developers, with a particular emphasis in real estate and construction litigation. Sean is well-known among new home builders for resolving complex disputes in Maryland, Virginia and elsewhere with creative, cost-effective and rapid solutions, both as outside general counsel and litigation and dispute resolution/avoidance counsel. He maintains an active trial and litigation practice, and advises his home builder clients on real estate transactions and documentation.

marylandbuilders.org

BUILD MARYLAND

7

Real Estate Needs to Focus on

Digital Assets

as Well as 8

BUILD MARYLAND

November/December 17

T

by KIM PHAN, BALLARD SPAHR

he physical properties that remain the primary assets for the real estate industry can no longer be the industry’s sole focus. As companies increasingly utilize digital assets, such as websites and mobile apps, they must realize that while technology presents new opportunities to bring value to their operations, at the same time, those same digital assets introduce risks that companies must be prepared to manage. This digital trend reaches throughout the real estate industry, including property managers, brokers/agents, title agents, developers, appraisers, multi-service real estate firms and the many other industry participants that invite the public to view company information and have access to confidential third-party information whether tenants’ personal information or proprietary corporate information.

WEBSITE ACCESSIBILITY AND FUNCTIONALITY Most companies these days have an internet presence that starts with a website. Websites are generally places to research a company and see what services or products they provide and in essence are an open door to the public or a public accommodation. As such, the Department of Justice has made clear that whatever content is made available online, should be made accessible in compliance with the Americans with Disabilities Act (ADA). Although ADA regulations have not yet been issued, companies should be sensitive to common website navigation barriers such as posting videos with no closed captioning. In addition, customer service employees must be trained to be aware of customers protected under the ADA and be willing to provide assistance to such customers. Companies should develop a roadmap to build out ADA functionality on all websites, including mechanisms to accept complaints and escalate issues as appropriate.

Physical

The more functionality built into a website, the more potential for liability if the website terms of service and/or privacy policy are not accurate.

For many, an Internet search and the resulting information about a company will often determine whether a customer wants to take the next step in a real estate transaction. Thus, many first impressions will be formed based on a company’s website. Companies must decide whether their websites should present information in a static form or incorporate dynamic elements, such as adjustable mortgage calculators or blogs about neighborhood topics. The more functionality built into

marylandbuilders.org

BUILD MARYLAND

9

a website, the more potential for liability if the website terms of service and/or privacy policy are not accurate. To the extent that companies would like to enter into any types of agreements with customers via their websites, companies must also be sure to do so in compliance with the federal Electronic Signatures in Global and National Commerce Act (ESIGN) and the various related state Uniform Electronic Transactions Acts (UETA). ESIGN allows electronic documents and signatures to have the same validity as paper documents and handwritten signatures, so long as the appropriate legal disclosures are provided and affirmative consent obtained in a compliant manner.

CYBERSECURITY As the news becomes increasingly dominated by data breaches, the importance of implementing appropriate measures to protect the privacy and security of confidential data must be a priority for any company. For those in real estate, this information can include personal information from tenants and occupants, credit reports, financial information, lease terms, and even property management and design information, that could put a property at risk. The real estate industry must be sensitive to data generated by digital assets that incorporate the latest

connected technologies, such as smart alarms, environmental controls and biometric locks. Although this technology may lead to more efficient operations on a daily basis, it may also make a building more vulnerable to a cyberattack. Recently, a shopping center’s implementation of an all-electronic building management system exposed the center to a cyberattack, which allowed the hackers to manipulate the environmental controls to disrupt business operations.

Companies face cybersecurity threats from a wide variety of potential bad actors, including malicious employees, cybercriminals, hacktivists, competitors and even foreign nation states. A cyberattack may be motivated by a variety of reasons, such as financial theft/fraud, identity theft, business disruption, destruction of critical infrastructure, reputational damage, physical threats such as property damage and/or threats to the safety of tenants. In another incident, online scammers exploited listings posted online by a rental property by copying the information to create mirror listings on a separate site in order to fraudulently collect the initial deposit and rent for each property. Companies should be monitoring and preparing for the types of security incidents being experienced by others in the industry.

SOCIAL MEDIA Company websites may also provide links to other digital assets, such as public pages on social media sites. Effective corporate engagement through various social media platforms can drive targeted traffic to a company’s website. Any company engaged in social media activities should develop a robust program to control which employees have authority to post on behalf of the company and on what topics. To the extent that a customer may choose to post positive reviews and/or testimonials on social media, companies must be diligent to ensure that disclosures about any material relationship or compensation given to the customer for such comments is clearly and conspicuously disclosed.

A company’s public page on Facebook, official account on Twitter, or other corporate-controlled digital assets, however, may not be the only information about a company available on social media. Companies should be wary of and monitor for unauthorized comments by employees as well as negative comments by customers. Companies should be prepared to address such comments efficiently in order to prevent the negative attention that may come from an isolated issue “going viral” on the Internet.

Companies must also decide whether they should engage on third-party “review” websites, such as Yelp. Last year, Congress enacted the Consumer Review Fairness Act, which makes it illegal for a company to use a contract provision to bar or restrict the ability of a person to review a company’s products, services, or conduct; such as by imposing a pen-

10

BUILD MARYLAND

November/December 17

Companies should be wary of and monitor for unauthorized comments by employees as well as negative comments by customers. alty or fee against someone who posts such a review. Companies are permitted, however, to monitor for and request the removal of online content that contains confidential or private information; is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or is inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristic; is unrelated to the company’s products or services; or is clearly false or misleading.

ONLINE BEHAVIORAL ADVERTISING Companies may also choose to display online behavioral advertising on third-party websites using cookies, pixels, tags and a variety of tracking technologies. Compliance with regulatory expectations as well as industry self-regulatory guidance will be critical, especially ensuring that any website privacy policies contain accurate representations about such activity, as well as providing customers with effective methods to opt-out of such activity. Furthermore, the same legal requirements that would apply to print media will be equally applied to online advertising, including the requirement that companies have evidence-based substantiation for any claims made on the Internet.

Digital developments are occurring at a rapid pace, and as the case law on these issues continues to escalate, the real estate development industry should expect no exemptions from any of these legal requirements. In order to take advantage of the benefits of digital assets, the real estate industry must be prepared to dedicate the time and resources to ensure that new technologies are deployed in a manner that does not present unnecessary risks to the company or its customers.

Kim Phan is a privacy and data security attorney at Ballard Spahr with more than 11 years of experience. She counsels companies on strategic planning to incorporate privacy and data security considerations throughout product development, marketing, and implementation. She also assists companies entering the e-commerce and mobile markets, including conducting website assessments and providing employee training on social media interactions with consumers. Ms. Phan can be reached at 202-661-2286 or at phank@ballardspahr.com.

marylandbuilders.org

BUILD MARYLAND

11

The 2017 PROS Awards 12

It Takes

PROS Build a House

BUILD MARYLAND

November/December 17

to

L

abor Day traditionally signals the end of summer, but thanks to the PROS Awards being moved to September this year, members got to celebrate summer a bit longer with a BBQ bash at Smokey Glen Farm in Gaithersburg.

For nearly two decades the PROS Awards have recognized and honored the best “workers in the field” who develop the land, construct the houses and work with the customer to produce award-winning homes. And the best-ofthe-best were present! More than 250 men and women, many sporting their company shirts and proudly representing firms from Maryland, Virginia and Washington, DC, turned out to cheer on their co-workers and friends.

Besides catching up with old friends, party-goers took advantage of all that Smokey Glen has to offer, including mini golf, basketball courts and horseshoe pits, not to mention their famous BBQ ribs. In addition, MBIA held a cornhole tournament. Thanks to our Presenting Sponsors, The Roof Center and CetainTeed for making that happen and congratulations to cornhole champions, Alex Rappa and Shannon Nixon with K. Hovnanian Homes.

Emceeing the awards ceremony again this year were PROS Chair Howard Katz, NVR and Vice Chair, Keith Scott, T.A.C. Ceramic Tile, who handed out close to 60 awards to very excited winners.

The PROS couldn’t happen without the hard work of the PROS committee. Assisting Howard and Keith this year were Dave Edwards, Dan Ryan Builders, Michael Kaperst, Sterling Mirror & Glass, and John King also with Sterling Mirror.

And of course the PROS relies very much on the generous support of our sponsors and donors.

Many thanks to…

PRESENTING

SUPPORTING

Interior Specialists, Inc. Whirlpool Corp.

Buhl Electric Builders Firstsource The Roof Center / Certainteed

Caliber Home Loans Charles P. Johnson & Associates Exceptional Choices Gutschick, Little & Weber, P.A. Hercules Fence Lennox Industries McCormick Paints Security Development Sherwin-Williams Southland Insulators Vintage Security Williamsburg Homes

GOLD Annandale Millwork & Allied Systems Noels Fire Protection Sterling Mirror & Glass SILVER Bozzuto Homes Dan Ryan Builders GE Appliances T.A.C. Ceramic Tile Washington Gas

FRIENDS ABW Appliances Century Tile Kwikset

marylandbuilders.org

BUILD MARYLAND

13

Congratulations to the following individuals ­ who achieved the PROs Award for 2017.

PRODUCTION MANAGER Production Manager 6-20 Units SFH/TH Tucker Tobin, Dan Ryan Builders Best Production Manager 21-40 Units SFH/TH Koby Cavanagh, Dan Ryan Builders Best Production Manager 6-20 TH Alex Gisselbeck, Mid-Atlantic Builders, Inc.

Best Project Manager/Superintendent 61-120 TH Robert Weis, Pulte Group Best Project Manager/Superintendent 1-5 SFH Jeff Ferris, Mid-Atlantic Builders, Inc.

Best Production Manager 1-5 SFH Bob Beegle, Mid-Atlantic Builders, Inc.

Silver Merit Project Manager/Superintendent 6-20 SFH Bob Wilhide, Michael Harris Homes

Best Production Manager 6-20 SFH Tim Ganske, Mid-Atlantic Builders, Inc.

Best Project Manager/Superintendent 6-20 SFH John Brittle, K. Hovnanian Homes

PROJECT MANAGER Best Project Manager/Superintendent 21-40 TH/ Historic Preservation Joseph Enochs, Edgemont Builders Best Project Manager/Superintendent 21-40 SFH/TH James Boylan, Dan Ryan Builders Silver Merit Project Manager/Superintendent 6-20 TH Brooks Abby , MI Homes Best Project Manager/Superintendent 6-20 TH Dion Anthony, Bozzuto Homes, Inc. Silver Merit Project Manager/Superintendent 21-40 TH Tom Fant, MI Homes Best Project Manager/Superintendent 21-40 TH William Chandler, MI Homes

14

Best Project Manager/Superintendent 41-60 TH Dan Creegan, Bozzuto Homes, Inc.

BUILD MARYLAND

November/December 17

Silver Merit Project Manager/Superintendent 21-40 SFH Brian Rasnick, Pulte Group Best Project Manager/Superintendent 21-40 SFH Matt Robertson, K. Hovnanian Homes Silver Merit Project Manager/Superintendent 41-60 SFH Jason Schulter, K. Hovnanian Homes Best Project Manager/Superintendent 41-60 SFH Grant Sacquety, Pulte Group Best Project Manager/Superintendent 61-120 SFH John Dodson, Pulte Group Best Project Manager/Superintendent 21-40 MF Brian MacMillan, Edgemont Builders Best Project Manager/Superintendent 41-60 MF Jeff Turner, Pulte Group

Best Project Manager/Superintendent 61-120 MF Scott Fraser, Pulte Group Best Project Manager/Superintendent 21-40 TH/MF Steve Thomas, Pulte Group Best Project Manager/Superintendent 61-120 TH/Villa Marvin Rice, Pulte Group Best Remodeling Project Manager Craig Breining, Owings Brothers Contracting Silver Merit Assistant Project Manager/Superintendent 21-40 SFH Shannon Nixon, K. Hovnanian Homes

CUSTOMER SERVICE Best Customer Service Manager/Field 41-60 SFH Charles Harvey, Pulte Group Best Customer Service Manager/Field 121+ SFH/TH Ron Snyder, Dan Ryan Builders Best Customer Service Manager/Field 21-40 MF Robert Gonzalez, Pulte Group Best Customer Service Manager/Field 61-120 MF Shirley Anderson, Pulte Group Best Customer Service Manager/Field 121+ MF Joseph Cunningham, Pulte Group

Best Assistant Project Manager/Superintendent 21-40 SFH Nathan Donner, K. Hovnanian Homes

Best Customer Service Manager/Field 41-60 TH Jay Brooks, Pulte Group

PURCHASING AGENT Best Purchasing Agent 1-20 Units Tim Shaver, EYA

Best Customer Service Manager/Field 61-120 TH Orlando Luna, Bozzuto Homes, Inc.

Best Purchasing Agent 21-100 Units Zach Rosier, Bozzuto Homes, Inc.

Silver Merit Customer Service Manager/Field 121+ TH Andy Zimmerman, Bozzuto Homes, Inc.

Best Purchasing Agent 101-300 Units Susan Crumpler, Pulte Group

Best Customer Service Manager/Field 121+ TH Ed Hancock, Pulte Group

OFFICE PROFESSIONAL Best Office Professional Overall Vickie Inthinsone, Dan Ryan Builders Best Office Professional, Permits & Construction Coordinator Christi Eide, Bozzuto Homes, Inc. Best Office Professional, Accounts Payable Jacklyn Wolfe, Bozzuto Homes, Inc. Best Office Professional, Permits Coordinator Dawn Lawson, Dan Ryan Builders

Best Customer Service Manager/Office 250+ TH Ellareese Burke, Bozzuto Homes, Inc. Best Customer Service Manager/Office 121+TH Linda Turnbow, EYA FIELD TECHNICIAN Best Field Technician /Customer Service/ Construction, 6-20 TH Victor Fuentes Blanco, Bozzuto Homes, Inc. Best Field Technician /Customer Service/ Construction 121+ TH Jose Perez, Bozzuto Homes, Inc.

marylandbuilders.org

BUILD MARYLAND

15

2017

&

16

BUILD MARYLAND

Custom Building

November/December 17

AWARDS

Remodeling

R

emodelers were awarded top honors for their design and craftsmanship at MBIA’s 2017 Remodeling & Custom Building Awards on November 2 at Historic Savage Mill in Savage, MD. A diverse judging team made up of remodeling contractors and interior designers rated each project based on quality of construction, degree of difficulty, value and cost effectiveness, unique and creative design approach and sensitivity to the existing structure.

In this competitive market, these winners are shining examples of the talent our area has to offer.

Award of Excellence Custom Home over $2 million

Mueller Homes Inc.

Project: Greenspring Valley Luxury Estate Stevenson, MD

Award of Excellence

Custom Home $1.5 million-$2 million

Zander Homes

Project: Old Bosley Road Lutherville, MD

marylandbuilders.org

BUILD MARYLAND

17

Award of Excellence

Custom Home $1 million-$1.5 million

Zander Homes

Project: Ridgewood Lutherville, MD

Award of Excellence

Custom Home $750,000-$1 million

Stone House Builders

Project: The Stoney Brook Model Phoenix, MD

Award of Excellence

Custom Home to $500,000

Owings Brothers Contracting

Project: Carroll County Custom Home Woodbine, MD

18

BUILD MARYLAND

November/December 17

BEFORE AFTER

Award of Excellence

Whole House Renovation over $600,000

Lang and Company

Project: Dividing Creek Residence Arnold, MD

BEFORE

Award of Excellence

Whole House Renovation $500,000-$600,000

Mangan Group Architects

AFTER

Project: Potomac Residence Potomac, MD

BEFORE

Award of Excellence AFTER

Whole House Renovation $450,000-$500,000

Lang and Company

Project: Glen Oban Waterfront Residence Arnold, MD

marylandbuilders.org

BUILD MARYLAND

19

Award of Excellence

Whole House Renovation $400,000-$450,000

Plumb Construction Company Project: Bay House Renovation Essex, MD

AFTER

BEFORE

Award of Merit Whole House Renovation $350,000-$400,000

Bluehouse Architecture, LLC

AFTER

Project: Roland Park Residence Baltimore, MD

Award of Excellence

Whole House Renovation Under $350,000

Bluehouse Architecture, LLC

Project: Clarksville Whole House Clarksville, MD

BEFORE

BEFORE

Award of Excellence Historic Restoration

Mangan Group Architects Project: DC Historic Townhouse Restoration Washington, DC

20

BUILD MARYLAND

AFTER

November/December 17

AFTER

BEFORE

Award of Excellence Green Home $400,000-$450,000

Mangan Group Architects Project: Winbrook Silver Spring, MD

Award of Merit

Green Home $400,000-$450,000

Owings Brothers Contracting

Project: Off the Grid Owings Mills, MD

Award of Excellence Outdoor Living over $500,000

Mangan Group Architects Project: DC Townhouse/Backyard Pool/Gazebo Washington, DC

marylandbuilders.org

BUILD MARYLAND

21

Award of Excellence

Outdoor Living under $500,000

Fine Earth Landscape

Project: Bethesda Family Resort Bethesda, MD

Award of Merit

Outdoor Living under $500,000 AFTER

ADR Builders, Ltd.

Project: Monkton Screen Porch Monkton, MD BEFORE

BEFORE

Award of Excellence

Kitchen Remodel/Addition over $200,000

Sunnyfields Cabinetry

AFTER

Project: The Essence of White Sparks, MD

22

BUILD MARYLAND

November/December 17

Award of Excellence AFTER

Kitchen Remodel/Addition $175,000 -$200,000

Bluehouse Architecture, LLC Project: Westminster Kitchen/Powder Room/Laundry Westminster, MD BEFORE

BEFORE

Award of Merit

Kitchen Remodel/Addition $150,000-$175,000

Owings Brothers Contracting

AFTER

Project: Hampstead Kitchen Addition Hampstead, MD

BEFORE

Award of Excellence AFTER

Kitchen Remodel/Addition $100,000-$150,000

ADR Builders, LTD

Project: Guilford Kitchen Baltimore, MD marylandbuilders.org

BUILD MARYLAND

23

BEFORE

Award of Excellence AFTER

Kitchen Remodel/Addition under $100,000

Owings Home Services

Project: Elkridge Kitchen Remodel Elkridge, MD

Award of Excellence

Kitchen Remodel/Addition under $50,000

O’Hanlon Kitchens, Inc. Project: Keswick Road Baltimore, MD

AFTER

BEFORE

BEFORE

Award of Merit AFTER

Kitchen Remodel/Addition under $50,000

Mangan Group Architects Project: V-W Kitchen Silver Spring, MD

24

BUILD MARYLAND

November/December 17

AFTER

Award of Excellence Interior Remodel over $400,000

Delbert Adams

Project: Barn Conversion Owings Mills, MD BEFORE

Award of Excellence

Interior Remodel $300,000-$400,000

Owings Home Services

Project: Crystal Clean Contemporary Arnold, MD

AFTER

BEFORE

Award of Merit

Interior Remodel $300,000-$400,000 AFTER

Mangan Group Architects

DC Townhouse Interior Renovation Washington, DC BEFORE

marylandbuilders.org

BUILD MARYLAND

25

Award of Excellence

Interior Remodel $200,000-$300,000

Lang and Company

Project: Daisey Court Residence Millersville, MD

AFTER

BEFORE

Award of Excellence Interior Remodel under $200,000 AFTER

Bluehouse Architects LLC Project: Highland Basement Highland, MD BEFORE

Award of Excellence Commercial

Mueller Homes/Bluehouse Architects Project: Historic Carriage House II Sykesville, MD

AFTER

BEFORE

26

BUILD MARYLAND

November/December 17

AFTER

Award of Excellence Bathroom/Remodel under $75,000

Owings Home Services

Project: Master Bath Renovation Baltimore, MD BEFORE

AFTER

Award of Excellence Bathroom/Remodel over $75,000

Delbert Adams

Project: Stunning Master Bath Baltimore, MD BEFORE BEFORE

Award of Excellence

Specialty and/or Details

Lang and Company

AFTER

Project: Mountain Laurel Lane Residence Annapolis, MD marylandbuilders.org

BUILD MARYLAND

27

7 T R A P

L A T N OF E M S A E D L P N I U C F IN PR

D N E N M A P O L L E V E D

V E R E T A W , R E T A W

28

BUILD MARYLAND

November/December 17

W Y ER

by DAVID S. THALER, PE, LS, F., ASCE, F., NSPE, D.S. THALER & ASSOCIATES, LLC

T N RE

CES E R OU OM S ING E C N R N S T ER T H A D PL A A N W W G EME E L A N O H N A I N AT A M OM D TO

E H W

Recognizing the effects of climate change and global warming, there have been several recent regulatory changes related to water resources, which may have a significant effect on the development and real estate industries.

M

y late father, Lt. Col. Herbert A. Thaler,1 mustered out of the Corps of Engineers in 1946 and became a very successful builder and developer in the Baltimore area. I must have been in graduate school in the

1970s when he called me: “Hi Dad, what’s up?”

“Son, something terrible has happened; we’re out of business.”

“Out of business? What do you mean?”

“Yes, we have to do something called sediment control. It’s awful−and now we are surely out of business.”

Well, somehow he managed to survive sediment control as have we all, but I think he would be quite surprised to see how the management of surface water has come to dominate so much of the land planning and development process.

In the great post-war boom years for housing of the 1950s and 1960s, there were hardly any environmental regulations and even floodplains, when they were first implemented, were only sized for 25-year storms. I can still recall when Baltimore County would require streams to be channelized with concrete to improve their drainage characteristics; the goal was to remove water from a site as quickly as possible, notwithstanding the fact that acceleration of flow created flooding downstream and that paving destroyed the ecology of the stream.

Those days are long gone.

In 1982, the first Stormwater Management Act was passed by the Maryland General Assembly and local ordinances were implemented two years later. While the requirements varied widely across jurisdictions, in general, the stormwater requirement at that time was to manage the two-year and ten-year post-development flows so that they did not exceed those that existed before development.

When it rains on an undeveloped area, a certain amount of the rainwater infiltrates and evaporates and the balance runs off as stormwater. When a property is developed, new roofs,

marylandbuilders.org

BUILD MARYLAND

29

roads and parking lots make the property more impervious, and not only does the amount of water increase but the rate of discharge (volume per unit of time; i.e. cubic feet per second, for example) increases as well, and this often contributes to downstream flooding. So early stormwater ponds were typically detention ponds, sized to detain the increased volume of water and release it slowly at the pre-development rate.

In 1984, water quality aspects of stormwater management were generally applied across the State in addition to quantity management. Water quality measures had to be provided for the first half-inch of runoff, the so-called “first flush.” The thinking was that the “first flush” of rainfall would wash off pollutants from impervious surfaces and they could then be captured and treated.

Generally, the treatment was done by infiltration but where infiltration was impracticable, (as it often is in the Piedmont areas due to poorly drained soils), then extended detention was often utilized, releasing the captured flows over a 12-hour or a 24-hour period.

ing, and to provide water quality equal to one inch of rain on the impervious areas. The regulation allowed for “credits” for using natural and non-structural practices to provide stormwater management, which included: disconnection of rooftop runoff, disconnection of pavement runoff, sheet flow to buffers, and use of grass channels, among others.

THE LAW OF DRAINAGE

THE 2000 MANUAL In October 2000, a new Maryland Stormwater Manual was adopted and it provided for four separate goals: maintaining groundwater recharge, reducing stream channel erosion, preventing overbank flooding and providing for water quality measures. This was an attempt to mimic existing groundwater recharge rates to help maintain the hydrology of streams and wetlands and the subsurface water table during dryer weather, to protect stream channels from excessive erosion and flood-

30

BUILD MARYLAND

November/December 17

Although it is seldom specifically mentioned in stormwater management ordinances, engineers and developers need to also be very aware of the law of drainage in Maryland. Maryland follows the ancient dictum: “Acqua currit at debet currere, ut currere solebat.” 2 There are two schools of thought on drainage law among the states: the common law rule and the civil law rule. It is well settled that Maryland follows the civil law rule, sometimes called the natural flow rule.

The rule states that the owner of the higher land, known as the dominant estate, is entitled to have surface water flow naturally onto the lower land of an adjoining land owner, the servient estate.3 And the lower land owner cannot obstruct the running of natural surface waters onto his land from that of the higher owner. The rule is subject to the important limitation, however, that the higher landowner cannot artificially collect surface water and concentrate or increase it from the

“natural” amount or accelerate it to the substantial injury of the lower property owner.

Simply put, an upstream property owner has the right to discharge his surface waters onto a downstream property, but he cannot concentrate, accelerate or increase the runoff beyond its natural flow nor divert additional water that would not have flowed there if the natural drainage patterns had not been altered. While the law seems clear enough, the problem lies with its application. At what point in time is the flow “natural”?

Does the analysis go back to primordial forest? Our office generally takes the position that the “natural flow” is the flow that exists at the time before one begins to design something new.

SUITABLE OUTFALL Another element that is important to consider in stormwater management is the suitability of outfall. In Baltimore County, every Development Plan must have an affirmative “suitable outfall” statement associated with it, but that is generally not specifically required in most other jurisdictions. When a development with drainage structures is constructed, often flows are released in a concentrated way. If these flows damage the downstream property owner, it’s a trespass and the upstream owner may be liable for damages. But the question, of course, is what exactly is a suitable outfall?

As Justice Potter Stewart stated in a very different context, it’s very hard to define, but “(you) know it when (you) see it.”4 It’s almost impossible to define specifically and for every case, but a suitable outfall is one that is stable and non-erosive such as a road, pipe, or defined stream channel. Discharging water in a concentrated fashion across a field of plowed rows would generally not be a suitable outfall and would likely lead to erosion and possibly litigation.

FLOODPLAINS A floodplain is the area of land surrounding a stream or river that floods during heavy rain. Excluding plagues, some of the worst natural disasters in history have been floods and most jurisdictions have typically restricted construction, especially residential construction, within the floodplain. Typically, a regulatory floodplain was defined as the area inundated by a 100-year rainfall event, plus a vertical factor of safety. The factor of safety, known as freeboard, is usually one foot above the 100-year high water level.

There is some popular misunderstanding about the term 100-year rainfall event. If an event is only expected to occur once every 100 years, how is it possible to get two such events only a few years apart? “100 year” is simply another way of expressing probability. A 100-year event is an event that has a one percent chance of occurring in any given year and, thus, it is quite possible to have two such events occurring in close proximity to each other.

NEW REGULATORY CHANGES Recognizing the effects of climate change and global warming, there have been several recent regulatory changes related to water resources, which may have a significant effect on the development and real estate industries.

The regulatory floodplain is determined mathematically, usually using a computer program to establish the limits of the area that would be inundated in a design storm, generally the 100-year storm. The computer program that is typically used for this modeling is HEC-RAS (HEC−Hydraulic Engineering Center−RAS River Analysis System), which models the hydraulics of water flow through rivers, channels and structures.

For as long as I can remember, the 100-year rainfall event was approximately 7.1 inches in a 24-hour period in central Maryland. On July 11, 2016, however, the Natural Resource Conservation Service issued a change to the National Engineering Field Handbook, which increased the 100-year storm.

In Baltimore County it is now 8.65 inches in 24 hours and in Anne Arundel County, 8.54 inches. This makes a big difference! Regulatory floodplains will get larger and additional property may be restricted from development.

I think Lt. Col. Thaler, who started his career bulldozing runways through the jungles of the South Pacific, would be very surprised at how environmentally conscious and sensitive the development of land has become.

In the next issue of Build Maryland we will further discuss issues related to water, including wetlands, waters of the United States and Environmental Site Design.

ENDNOTES 1. Herbert A. Thaler was President of HMH Construction Co., Inc. and a member of the HBAM Board of Directors

2. Very loosely translated – Water runs and should run as it always naturally has.

3. Sainato et ux. v. Potter et ux. Md. 263 (1960), 159 A.2d 632 4. Jacobellis v. Ohio, 38 U.S. 184 (1964) David S. Thaler, PE, LS, F., ASCE, F., NSPE is the Managing Member of D.S. Thaler & Assoc., LLC a civil and environmental engineering and surveying firm in Baltimore, Maryland, which has designed hundreds of communities.

Repeatedly honored, he is a Fellow of both the American Society of Civil Engineers and the National Society of Professional Engineers, and was Guest Scholar at the University of Baltimore School of Law, where he lectured on land use. He has published more than 250 articles and five books, and has won numerous life time achievement awards including MBIA’s Icon of the Industry. He also holds both the highest professional engineering award in Maryland, now known as the Thaler Prize, and the Maryland Distinguished Service Cross, Maryland’s highest military honor.

marylandbuilders.org

BUILD MARYLAND

31

ENGINEER’S TOOLBOX

THE COMING REVOLUTION

by STEPHEN CRUM, P.E., MACRIS, HENDRICKS & GLASCOCK, P.A.

William Hanna and Joseph Barbera got it wrong: in the opening sequence of the animated sitcom The Jetsons, George Jetson is at the controls of the family “space car.” If produced today, George’s commute to Spacely Sprockets would likely involve being “driven” to the office in an autonomous vehicle. Autonomous vehicles (AV) are likely in our future, but how they change the homebuilding landscape remains to be seen.

Professionals in various disciplines have begun to think about how autonomous vehicles will impact our cities, towns and highways. From architects to urban planners, from transportation engineers to public works officials; these forward thinking individuals have begun to plan for a coming revolution.

“You say you want a revolution”, —John Lennon There are obvious changes that the widespread adoption of AV would bring; the elimination of the individual garage in residential construction. Elimination of the residential driveway and maneuvering space will allow houses to move closer to the street creating larger back yards. On the commercial side, there are estimates that there are 263 million automobiles in the United States and 2 billion parking spaces or just over 7.6 parking spaces for every automobile; by some estimates this represents 5.7 billion square feet of real estate taken up by parking lots that could be redeveloped.

Of course, this would require changing zoning laws, which to some extent are responsible for this ratio of vehicles to parking spaces. Gasoline stations, which occupy some of the most coveted real

32

BUILD MARYLAND

estate in America, can be redeveloped for other purposes as most experts agree that AV will not be powered by internal combustion engines.

From the transportation perspective, a recent study conducted by researchers under a grant from the National Science Foundation found that the introduction of as few as 5 percent AV under typical congested driving conditions could reduce braking events by 74.4 percent and reduce fuel consumption by 28.1 percent. With even greater numbers of AV in our transportation system there could be improvements to the capacity of our highway system without building a single additional square foot of new pavement. Autonomous vehicles will maximize the efficient use of the current highway network, with “cloud”

based navigation and route planning algorithms, AV can adjust to changing congestion and roadway conditions multiple times during a trip to reach your destination in the minimum amount of time. Autonomous vehicles may finally solve the “final mile” dilemma that has plagued our mass transit systems. With the ability to reliably complete the trip from home to the transit station and from the transit station to work without the need of a personal automobile or having the ability to complete this “last mile” on their own schedule might coax Americans out of their personal vehicles and onto mass transit.

Autonomous vehicles, however, may not create a transportation utopia. Some urban planners’ fear that fleets of AV “cruising” city streets “looking” for this next rider will cause even greater congestion. When looking at the revenue side of their budgets, some Public Works officials worry about the loss of parking revenue from meters and public garages.

At the state and federal level a completely new source of funding will need

Autonomous Concept car Interior at the North American International Auto Show (NAIAS)

November/December 17

Autonomous vehicles will be every bit as revolutionary and disruptive in the twenty-first century as the automobile was in twentieth. To minimize the disruption; we need to begin to plan, design and build today to easily adapt our infrastructure to a changed transportation environment. Elected officials need to develop a new model for funding our highways that doesn’t depend on the gasoline tax. Engineers need to design roadways, parking garages, and parking lots to be adaptable to a new vehicle paradigm. Land Planners and local officials

need to put into place land use plans that acknowledge this coming transportation revolution, that seeks to minimize the undesirable aspects, and that embraces the advantages that AV bring to table. As an industry, we need to stop planning, designing and building based on an outmoded transportation model that is the personal automobile.

Stephen Crum is a Principal with MHG. He can be reached at 301-670-0840 or scrum@ mhgpa.com.

©2017 California Closet Company, Inc. All rights reserved. Franchises independently owned and operated. MHIC 28991

to be found to maintain our highways, most experts agree that AV will be fully electric vehicles, the gasoline tax, which has been the basis of our surface transportation systems funding, will all but disappear. In theory even the revenue from traffic citations and parking violations will also vanish, AV are programed to obey all traffic laws and will never park illegally. Perhaps the greatest fear of urban planners is that AV will spawn yet another suburban expansion similar to those triggered by the trolley lines in the 1860’s and the automobile in the 1950’s.

Experience a California Closets system custom designed specifically for you and the way you live.

Visit us online today to arrange for a complimentary in-home design consultation.

410.247.8088 BALTI M O R E

Sulphur Spring Rd.

AN NAP O LI S

californiaclosets.com Bestgate Rd.

E LLI C OTT C ITY

Bethany Square - New Showroom

MD086_BuildMD_Laund_7.4x6_0917.indd 1

9/20/17 1:25 PM

marylandbuilders.org

BUILD MARYLAND

33

STATS & FACTS

STATS & FACTS OPPORTUNITY

by BEN SAGE, METROSTUDY’S MID-ATLANTIC REGION

I

t is Thanksgiving season, and land prices make it difficult to target ranges accounting for 53 percent of scores of parade lovers will first-time buyers in these counties, as the all single-family detached sales during be tuning into (or attending) industry well knows. For this analysis, the year ending June. The red portion the Macy’s Thanksgiving Day therefore, we looked at the remaining of the columns highlights the number Parade. Perhaps best known non-core counties. of new-home sales in each price range. for their cartoon character The amount of single-family activThe table below illustrates new-home balloons, each one requires 50 to 100 ity below $200,000 is notable, but sales as a percent of total homes sales in volunteers to pilot the likes of Snoopy this price range is off the table for each price range. Overall, builders are and Kermit through the streets of New any new development. In fact, sales capturing a mere 8 percent of all single York. Want to be a balloon handler? of older housing stock dominate this family transactions. This is down from It’s not easy as the spots are reserved segment. Focusing on $200,000-plus an average of 17 percent from 2006 to for Macy’s employees and select family housing, demand is clearly strongest 2012. Over the past seven years, the and friends. Once someone gets that in the $200,000 to $400,000 price number of resale transactions has grown opportunity, they generally hold on to it year after year. From 1928 to 1932, the balloons were released at the conclusion New/Resale SF Closings

by Price 2Q17–Ann New/Resale SF Closings by–Price 2Q17 Ann of the parade. Anyone finding a balloon 3,500 was offered a reward for returning it to 3,500 Macy’s, but the balloons burst the first Existing (Annual) Existing (Annual) year due to the air pressure changes 3,000 at 3,000 New (Annual) New (Annual) higher altitudes. Whether then or now, handling a Macy’s balloon is a rare 2,500 2,500 opportunity.

Source: Metrostudy (Analytics) Source: Metrostudy (Analytics) I am often asked about the next 2,000 2,000 opportunity for homebuilders. A few months ago, I touched on this when1,500 1,500 noting that some of the national builders are creating distinct brands to 1,000 1,000 capture first-time buyers. To address this more specifically in Maryland, the 500 500 chart below shows total single-family detached sales by price range in “non0 0 core” Maryland counties. The four counties of Anne Arundel, Howard, Montgomery and Prince George’s comprise about half of all new-home activity Home Price Home Price in Maryland. These core areas will con© 2016 Metrostudy, A Hanley Wood Company © 2016 Metrostudy, A Hanley Wood Company * Excludes Montgomery, Prince George’s, Howard, & Anne Arundel Counties tinue to be in high demand, but rising * Excludes Montgomery, Prince George’s, Howard, & Anne Arundel Counties

Maryland Non Core Counties* Maryland Non Core Counties*

34

BUILD MARYLAND

November/December 17

Maryland Non Core Counties* Maryland Non Core Counties*

resale market at these lower price ranges is spent, and there is growing demographic pressure towards home-ownership. It may not come to fruition in the next year or two, but volume builders should begin strategizing, if they are not already, how they will capture their portion of this next wave of demand.

It is a better strategy than waiting for a balloon to fall out of the sky.

New SF Sales Percent of All Sales – 2Q17 Ann New SF Sales Percent of All Sales – 2Q17 Ann 30%

30% Source: Metrostudy (Analytics) Source: Metrostudy (Analytics)

20%

15%

10%

5%

0%

25%

New % of Resale

New % of Resale

25%

20% 15% Opportunity

Opportunity

10%

5%

0%

Ben Sage, Director of Metrostudy’s Mid-Atlantic Region, has been researching and analyzing housing markets since 1994. He regularly meets and consults with many of the top homebuilders in the country as well as with lenders, developers, investors, and utilities concerning trends in the local economy and their effect on the real estate market. Ben Home Price can be reached at bsage@metrostudy.com.

Home Price For more information, visit © 2016 Metrostudy, A Hanley Wood Company * Excludes Montgomery, Prince George’s, Howard, & Anne Arundel Counties © 2016 Metrostudy, A Hanley Wood Company www.metrostudy.com. * Excludes Montgomery, Prince George’s, Howard, & Anne Arundel Counties

steadily while the new-home market has remained flat, hence the falling share of all sales for builders.

Builders are getting a healthy share of total sales at the higher detached price points, namely the $450,000 to $700,000 ranges. In these segments, builders are capturing 25 percent of all sales. It appears that the greatest opportunity is in the next lower price segments, $300,000 to $450,000 (new = 10 percent of all sales), or even $300,000 to $400,000 (new = 6 percent of all sales).

No doubt it is challenging to deliver detached product that is so affordable, but some builders are doing it. The areas with the most new-home sales between $300-$400 are Waldorf in Charles County, Harford County along I-95, and western Frederick County. If pricing up to $450,000 is included, that brings in all of Frederick County and the eastern side of Baltimore County.

The builders most active in the sub$450,000 range include Ryan Homes, Dan Ryan Builders, and Lennar.

Metrostudy also analyzed the townhome market in non-core counties.

Because there is less existing townhome stock in these areas, builders dominate sales activity in the $300,000 to $400,000 price range, but closings activity levels drop precipitously above $400,000. That leaves a narrower band of opportunity for builders in the $250,000 to $300,000 townhome segment, where builders already capture 24 percent of all sales. It is possible, however, that builders could use townhome product in the detached “opportunity range” of the low to mid-$300s to fulfill demand. The two largest potential buyer groups are millennials and baby boomers, and townhome product has appeal to both demographic segments.

Metrostudy understands that targeting first-time buyers is not for every builder. Those builders, however, who are experienced with higher volumes at lower margins will likely find opportunity a little further out (geographically) in the next building cycle. Supply in the

LOOKING FOR YOUR DREAM JOB? LOOK NO FURTHER. MBIA has a Job Bank on our website just waiting for you.

Whether you’re a job seeker or you have a position to fill, this is the place with the best jobs in the industry. Visit us at marylandbuilders.org/jobbank and start searching today.

marylandbuilders.org

BUILD MARYLAND

35

NEW PRODUCT SPOTLIGHT

CONSTRUCTION SITE SECURITY WITH REMOTE GUARD VIDEO SURVEILLANCE Every year, construction sites and storage yards face the costly problems of vandalism and theft. Recent studies suggest that this kind of criminal activity can cost businesses more than $1 billion dollars annually, affecting productivity and adding to an already busy and complex workload for site owners and employees. Every year, millions of dollars’ worth of equipment either goes missing or is damaged; ongoing construction work is damaged and delayed; and vandals take many valuable from sites. While multiple onsite guards at a site can be beneficial, this can also be cost-prohibitive, without providing the thoroughness and consistency of surveillance that a truly secure construction site or storage yard needs. Remote Guard Video Surveillance offers an effective, technology-based solution that can supplement or replace onsite security guards, providing a cost saving and highly efficient form of security that allows larger areas to be “patrolled” using cameras and other surveillance equipment.

ENHANCING ONSITE SECURITY GUARD MONITORING The size and scope of many construction sites and storage yards presents a variety of challenges when it comes to security,

as well as a number of opportunities any thief or vandal can exploit. A typical construction site or storage yard is often difficult to patrol with only uniformed

❚ Land Use/Zoning ❚ Condominium Development and Community Associations ❚ Real Estate Transactions ❚ Commercial Settlements

Reliable Warranty Coverage

officers. All the storage facilities, walls, fences and containers, as well as parked machinery, hinder visibility, and the use of guards on patrol loses much of its effectiveness.

The wide range and amount of equipment on a site or storage yard is difficult to consistently monitor and secure, particularly larger items, or items that are easily moved. Remote Guard Video Surveillance can meet these challenges by providing camera analytics guided by a remote monitoring team. Specific areas or pieces of equipment can be focused on with mobile or portable technology. Buildings, sheds, containers and other items that create hiding places for

A Solid Foundation for Your Business

❚ Environmental ❚ Business Transactions ❚ Tax ❚ Litigation ❚ Bankruptcy

LINOWES AND

We Have New Home Warranties NAILED! BLOCHER LLP ATTORNEYS AT LAW

7200 WISCONSIN AVENUE ❚ BETHESDA, MD ❚ 20814 ❚ 301.654.0504 31 WEST PATRICK STREET ❚ FREDERICK, MD ❚ 21701 ❚ 301.620.1175 ONE PARK PLACE ❚ ANNAPOLIS, MD ❚ 21401 ❚ 410.268.0881

WWW.LINOWES-LAW.COM

36

BUILD MARYLAND

November/December 17

RICH McPHEE

800-247-1812 ext. 2149

sales@rwcwarranty.com www.rwcwarranty.com/BuildMD

criminals can now be watched not only by onsite guarding, but technology that will provide unobtrusive views of suspicious activity, as well identifying evidence of wrongdoing for site managers and law enforcement officers.

THERMAL IMAGING AND NIGHT VISION TECHNOLOGIES Thermal imaging and night vision technologies in the hands of professional security companies can provide around the clock, enhanced security for construction sites and storage yards.

Thermal imagery has become a weapon against theft and vandalism. It has become highly sophisticated, while still being relatively easy to utilize. One such powerful and relatively easy to use thermal imaging solution is Thermal Radar.

Thermal Radar provides 360-degree surveillance; it’s like operating up to 20 thermal cameras dotted around any

area being secured. This low power, low bandwidth surveillance system can help construction sites or storage yards overcome power and limited internet connectivity issues by utilizing solar power and cell phone technology to transmit the recorded “images” in real time to the surveillance center. Portable power units can also provide enough power to even the most remote of sites for remote surveillance to be implemented.

A good remote surveillance solution should include conventional security cameras as well as thermal imaging surveillance equipment. Some security companies will even utilize drones to fly

over the area being secured. These “eyes in the sky” can be fitted with conventional cameras and recording equipment as well as thermal cameras, adding extra security for your construction site or storage yard. This remote surveillance can extend the security of the site after business hours, during holidays, or at any other time when onsite guarding becomes difficult, providing peace of mind via the remote monitoring team.

For information on how you could benefit from Construction Site Security, please contact our new MBIA member, SMART Security Pros at www.smartsecuritypros.com.

EXCLUSIVE OFFER FOR NAHB MEMBERS BUILD YOUR SAVINGS WHILE YOU BUILD YOUR BUSINESS

+

PLUS:

4 No minimum purchases or thresholds 4 No annual fee 4 Free delivery to the jobsite on orders over $500+

2

%

BACK

EVERY DAY

STATEMENT CREDIT

When You Buy

When You Pay

Apply today at LowesForPros.com/NAHB *5% Discount: Subject to credit approval. Get 5% off your qualifying purchase or order charged to your Lowe’s Business Rewards Card from American Express, Lowe’s® Business Account or Lowe’s® Accounts Receivable. Valid for purchases in US stores, on Lowes.com and LowesForPros.com. Customer must pay applicable sales tax. 5% discount will be applied after any other applicable discounts. Offer can’t be combined with other credit-related promotional offers. Can’t be used in conjunction with: any coupon; Lowe’s military discount; Lowe’s employee discount; Lowe’s low price guarantee; Lowe’s volume or special discount programs such as, but not limited to “QSP;” manager discretion price adjustments; contractor packs; or any other offer which expressly states it can’t be combined with any other discount credit offer. Can’t be used in conjunction with the following products and/or services: extended protection/replacement plans; shipping, delivery or assembly charges; fees or taxes; gift cards; Dacor®, ICON®, Fisher & Paykel®, Monogram, Smeg or Liebherr appliances (some brands not available in all markets/stores); Weber or Kichler products. Excludes all Lowe’s® Canada Credit products. We reserve the right to discontinue or alter these terms at any time. **2% Discount: Cannot be combined with any other statement discount. To be eligible for the 2% discount, you must register your National Association of Home Builders affiliation and Lowe’s® Accounts Receivable (LAR) or Lowe’s® Business Account (LBA) account per the instructions provided, make a purchase with your LAR or LBA account by 12/31/17 and comply with all terms and conditions of your LAR or LBA account.

Allow one to two complete billing cycles for your registration to be processed and for your discount to appear on your billing statement. 2% discount will be automatically deducted from your statement at billing (discount will not take effect until Synchrony Bank fully processes your account registration). Excludes Lowe’s® Consumer Credit Card, Lowe’s® Visa® Accounts, Lowe’s Business Rewards Card from American Express and all Lowe’s® Canada Credit products. Account must remain open, be in good standing and not become delinquent at the time the statement credit is applied. *,**Offers valid in US stores, on Lowes.com and LowesForPros.com. Discounts applicable to commercial purchases only. Offers/discounts provided by Lowe’s and not Synchrony Bank. Subject to credit approval.

Lowe’s reserves the right to discontinue or alter these terms at any time. + Standard delivery rules apply. ©2017 Lowe’s. LOWE’S and the Gable Mansard Design are registered trademarks of LF, LLC. ©2017 NAHB. All rights reserved.

marylandbuilders.org

BUILD MARYLAND

37

NEW MEMBERS & REINSTATEMENTS

AUGUST/SEPTEMBER 2017 BUILDERS

REMODELERS

ASSOCIATES

AB Urban Development LLC Alex Boyar 3000 Porter St., NW Washington, DC 20008 202-438-9566 alex@ab-urban.com www.ab-urban.com

Best Buy Waterproofing, LLC Andrew Altman, Sr. 8950 Route 108, Suite 221 Columbia, MD 21045 844-980-3707 info@bestbuywaterproofing.com www.bestbuywaterproofing.com

Atlantic Mechanical LLC Hindy Abramson 6615 Reisterstown Rd., Suite L Baltimore, MD 21215 410-484-4595 hindy@atlantic-mechanical.com www.atlantic-mechanical.com

Atlantic Home Group LLC Kevin Barker 9841 Washington Blvd., Suite 200 Gaithersburg, MD 20878 301-820-5299 kevin@atlantichomegroup.net

Galaxy Construction Services Brian Rekley Fairfield, PA 17320 301-606-4688 brian@galaxyconstructionsvc.com

Cannonball Moments LLC Chad Sanschagrin 112 W. Pennsylvania Ave., Suite 103 Bel Air, MD 21014 410-836-7007 Chad@Cannonballmoments www.cannonballmoments.com

Bethel Regency Homes, LLC Femi Odubanjo 4815 Prince George’s Ave., #204A Beltsville, MD 20705 301-937-7500 femi.odubanjo@bethelgroup.com

Tower Creek Construction LLC Dan Jones Fallston, MD 21047 443-299-9594 dan@towercreekconstruction.com www.TowerCreekConstruction.com

Design Tops, LLC Lisa Wendling 435 E. Stiemly Ave. Glen Burnie, MD 21060 410-761-6336 designtops@aol.com www.designtopsllc.com

Expertise + Solutions = Happy Customers At Severn, we close mortgages quickly because we originate, underwrite and service our loans under one roof. Our knowledgeable lending team works with you to develop a draw schedule that meets the timely financial needs of all parties.

A true community bank with a full line of products and programs.

That’s why Severn is the best resource for builders.

• Construction/Rehab Loans • Portfolio/Bridge Loans • Doctor/Professional Program • Fast, In-House Process through Funding

• Super Jumbo Loans - Over $1 Million • Low/No Down Payment Options • First Time Homebuyer Programs • Common Sense Community Bank

Call or visit us today severnbank.com • 410.260.2000 Severn Bank is a trade name used by Severn Savings Bank FSB.

38

BUILD MARYLAND

November/December 17

Exemplary, Inc. J. Travis Forsyth 3003 Lyndebrooke Ct. Fallston, MD 21047 410-588-6766 travis@exemplaryinc.com exemplaryinc.com Flagstar Bank Melinda Topjian 1910 Towne Centre Dr. Annapolis, MD 21401 443-722-0965 melinda.topjian@flagstar.com www.flagstar.com GNP, Inc. Margie Naegeli 207 Ackerman Rd. Stevensville, MD 21666 410-562-4762 margie.n@verizon.net www.gnpbuild.com Isom Global Strategies Towan Isom 300 New Jersey Ave., NW, Suite 900 Washington, DC 20001-2271 202-800-0128 towan@isomglobal.com isomglobal.com RLO Contractors, Inc. Stanley Merson P.O. Box 57, 4790 Linthicum Rd. Dayton, MD 21036 410-531-2288 smerson@rlocontractors.com www.rlocontractors.com Sandbek LLC Curtis Sandbek 5200 Glen Arm Rd., Suite M Glen Arm, MD 21057 410-977-8180 curtis@sandbekoutdoors.com SMART Security Pros Shawn Scarlata 7100 Chesapeake Rd., Suite 203 Hyattsville, MD 20784 301-955-9782 shawn@smartsecuritypros.com www.smartsecuritypros.com Towne Bank Mortgage Sue Haviland 600 22nd St., Suite 300 Virginia Beach, VA 23451 888-637-1321 sue.haviland@townebankmortgage.com www.townebankmortgage.com/suehaviland

Our long standing land planning expertise enables us to infuse past experience and lessons learning into every project A national firm with a local presence Baltimore • Frederick • Lanham • Rockville www.dewberry.com

marylandbuilders.org

BUILD MARYLAND

39

STARS CLUB

DGG-MC Dewberry Residential Title & Escrow SunTrust Mortgage Wells Fargo Home Mortgage

Chesapeake Employers Insurance K. Hovnanian Morris & Ritchie Associates Pleasants Development Pulte Homes Saratoga Insurance Shelter Systems

84 Lumber Andersen Windows

Elm Street Development Linowes & Blocher McMillan Metro Miles & Stockbridge Rodgers Consulting

Builders Mutual Insurance Caruso Homes Charles P. Johnson & Associates The Creig Northrop Team of Long and Foster Real Estate Geo-Technology Associates, Inc. Gutschick, Little & Weber Insurance Associates Lerch, Early & Brewer Robert A. Tull Plumbing Rutter Project Management Shulman Rogers Sterling Mirror & Glass Walton Development & Management, Inc. Winchester Homes

Sandy Spring Bank Soltesz T.W. Perry Versatex Trimboards

Admiral Spacemaker, Inc Ballard Spahr Bozzuto Homes Day Development Co., LLC/ Greentree Homes Dico EYA Miller and Smith Macris Hendricks & Glascock, PA Mid-Atlantic Builders, Inc. Mitchell Best Homes Stantec Consulting Services Wetland Studies & Solutions

BUILDER’S BOOKSHELF

NAHB’S WEBINAR WEDNESDAYS Take advantage of NAHB’s Webinar Wednesday series and get up-to-the-minute education on industry issues, trends and best practices.

No matter where you find yourself on Wednesdays, participation is easy. Register for any webinar and enjoy unlimited access to the replay. Best of all, each webinar counts for one hour of continuing education credit toward NAHB professional designations. When you register for a live webinar, you have access to the webinar replay for 12 months from the date of purchase. All replays are available about 7-10 business days after the live event. Topics range from Economics & Research to Design & Technology, plus much more.

Builders, remodelers, sales and marketing professionals, real estate agents, brokers, multifamily professionals, architects, designers—Webinar Wednesday seminars offer something for everyone in the construction industry! Member cost is $44.95.

40

BUILD MARYLAND

November/December 17

ADINDEX Builders Mutual Insurance.............. 3 California Closets......................... 33 Dewberry..................................... 39 First National Bank...................... IBC Linowes & Blocher........................ 36 Mid Atlantic Propane Gas Association..................... BC NAHB........................................... 37 Residential Warranty.................... 36 Severn Bank................................. 38 Shulman Rogers............................10 Vintage Security.......................... IFC Wetland Studies............................11