Weekly Update: June 20, 2013

Letter Sent to Speaker Boehner This Week From Jim Tobin at NAHB

Dear Speaker Boehner:

On behalf of over 140,000 members of the National Association of Home Builders, I want to share with you some encouraging news on the health of the home building industry. Three recent metrics of the housing industry all point to an increase in builder confidence and home construction activity. However, while many headlines and television pundits claim that “housing is back,” it is important to reiterate that home builders still face challenges that could derail the fledgling recovery in housing.

Earlier this month, the National Association of Home Builders/First American Improving Markets Index (IMI) rose to a total of 263 markets. In order to be listed, a metropolitan area must see an improvement for a minimum of six months in three critical areas: housing permits, home prices and employment. The most recent IMI, which began in 2011 with only 12 markets, represents over 70 percent of U.S. metropolitan statistical areas and includes metros in 49 states and the District of Columbia. This week, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), a measure of builder confidence in the market for newly-built, single-family homes, moved past 50 for the first time since April 2006. At its lowest point in January 2009, the HMI registered a meager 8 points. And just yesterday, data from the Department of Housing and Urban Development and the U.S. Census Bureau showed housing starts rose 6.8 percent, as well as an increase in the issuance of single-family building permits.

Despite the spate of good news, the majority of the nation’s home builders are merely maneuvering through the headwinds that are stifling a more robust recovery. I regularly hear from builders about the continuing lack of construction credit and consumers’ access to mortgage credit; how appraisals fail to keep pace with the cost of construction; the rapidly rising price and limited availability of building materials; the construction delays caused by labor shortages; and the crushing weight of regulatory hurdles.

The annual, demographic demand for housing production is 1.7 million units. This year, the industry may build one million units. When home building is firing on all cylinders, the

industry, as a whole, represents 17 percent of the U.S Gross Domestic Product. Although the industry is beginning to show signs of recovery, as evidenced by the recent data above, there is still a lot of work to be done if the home building industry is to achieve that level of

economic strength once again.

As Congress seeks to jumpstart the economy I urge you to adopt policies that clear a path for real gains in home construction that can create millions of meaningful jobs across America. NAHB has common-sense proposals to overcome these obstacles and realize the economy’s true potential. I look forward to discussing our proposals with you.

iowa-city-golf

Left to Right – Kirk Geist, Jay Iverson, and Keith Butz were guests of Glenn Siders and the Southgate Companies at the Greater Iowa City HBA golf outing Tuesday at Finkbine.

NAHB Designations Mean More Income

Information from the most recent NAHB Builder Member Census reveals that members who earned the Certified Graduate Builder (CGB), Graduate Master Builder (GMB) and Certified Green Professional™ (CGP) designations make more money than their non-designation-earning counterparts in the business.

According to the survey:

  • NAHB members who hold the CGB designation made an average of $990,189 more last  year than those without a builder designation.
  • NAHB members who hold the GMB designation made an average of $1,610,529 more last year than those without a builder designation.
  • NAHB members who hold the CGP designation made an average of $824,124 more last year than those without a builder designation.

Survey findings demonstrate that designation holders, known for their commitment to education and for staying on top of industry trends, tend to find more financial success.

 

Race for Relevance

There have been many radical changes in association management since a book called “Race for Relevance” by Harrison Coerver and Mary Byers came out a few years ago.  There is a second edition out now with case examples.  There are many solid ideas provided and we will begin a multi-week process of chapter synopsis outlines that will make sense.  Here is the fourth installment:
Chapter 4:  Empower the CEO and Enhance Staff

Trends driving the transition to empowered staff:

  • Time pressures of volunteers
  • Associations are complex organizations
  • Volunteers have a wide range of skills, abilities, and experiences, but they are not professional association executives
  • Both volunteer board members and hired staff need to remember the goal to optimize the association’s resources

Benefit of the new governance model;

  • Encourages honest communication and straightforwardness between staff and volunteers.
  • The smaller circle of leadership requires a new level of teamwork; there’s no room for lack of commitment or avoidance of accountability.
  • Encourages candor between staff and volunteers have a clearer picture of what each should be doing.

Roles and Responsibilities of the Board

  • Governing by setting broad policies and procedures
  • Retaining the CEO
  • Ensuring that the association has adequate resources
  • Guiding the association in the best interests of its members

CEO/Staff Responsibilities

  • Running the association in a way that meets the objectives established by the board.
  • Decisions about what is to be done, how it is to be done, and who is to do it
  • Volunteer leaders continue to interject themselves inappropriately into management decisions and operations in all but the most disciplined organizations because it is easier to manage than it is to govern
  • Smaller boards may not eliminate this board “micro-management” but it is a step toward maximizing the time and resources of all
  • The mindset of board/staff relationships is a function of three things: association culture, personalities of staff and volunteers, and history. “The association is ours and we must run it”, but are volunteers really qualified to run a complex tax-exempt membership organization
  • Avoid a culture of staff servitude with volunteer leaders as masters and staff as vassals
  • The executive from inductor or profession will have to quickly acquire association management competencies, and the association professional will have to quickly gain industry or professional knowledge
  • A competency-based board will attract better CEO candidates who desire to work in an empowered organization

 

Next week:  Chapter 5:  Rationalize the Member Market