Friday, March 22, 2013

NAHB Chairman Rick Judson's Memorandum on Tax Reform


MEMORANDUM
Date:  March 18, 2013
To:     NAHB Members
From: Rick Judson, 2013 NAHB Chairman


Dear NAHB Member,

When I became your chairman I pledged to keep you informed on issues that are important to our association and that affect your businesses. As my fellow Senior Officers have previously reported, during the past two years NAHB has worked diligently to raise housing’s profile among many different stakeholders – the Administration, Congress, regulators, the media, allied groups and others – all with the aim to ensure that NAHB has a seat at the table as Washington policymakers decide issues that will affect our industry and our livelihoods.
Last Wednesday, the Senior Officers received a briefing (enclosed below) from our Government Affairs staff. I felt it was important that I share this with our entire membership. After reading this, I think you will agree with me that our efforts to make housing a national priority are paying off. This is an example that goes to the very heart of the value of NAHB membership and what your association does for you day in and day out.
-------------------------------

Dear Senior Officers [Re: Tax Reform]:

This is a bit long, but please bear with me. 
As you know, the Ways and Means Committee created 11 working groups to evaluate different aspects of the tax code in anticipation of possible tax reform.  Yesterday afternoon, Rick Judson, along with Jim Tobin, J.P. Delmore, and Rob Dietz, met with the two members of Congress leading the real estate working group -- Reps. Sam Johnson (R-Texas) and Bill Pascrell (D-N.J.).  Also attending the meeting were Reps. Tom Reed (R-N.Y.) and Lloyd Doggett (D-Texas), along with approximately 10 staff representing the Ways and Means Committee, the Joint Committee on Taxation (JCT), and several other member offices from the Ways and Means Committee.  It was a standing room-only crowd.
This meeting was likely our only opportunity to meet in person with the working group.  We were scheduled for a 30 minute session, which is an incredibly brief amount of time. Our presentation was so impactful that the meeting ultimately lasted for 1 hour and 20 minutes. By the end of the meeting, we were able to make every single point we hoped to cover, and we feel we made a real impact. 
No one can match the data and research NAHB has done, and we were able to make a strong case for preserving the existing tax incentives backed up by years of work. Of course, it helps when the facts are so clearly on our side.
We started our presentation by looking at some of the less visible items in the code: completed contract rules, home equity deduction and remodeling, and depreciation.  The Low Income Housing Tax Credit (LIHTC) generated significant discussion. Rep. Pascrell asked if the credit could be better targeted for seniors, and he asked us to dig deeper into that issue. We were asked by several members to follow up with more information related to demand for the credits.
The discussion then switched to the state and local property tax deduction. Next, we moved to the mortgage interest deduction, including the deduction for second homes.  We were able to present our data that shows that the MID makes the tax code more progressive and also targets the middle class. We also discussed how the MID is used by looking at the demographics, which everyone in the room found to be compelling, if we can judge by the notes taken. 
Both Reps. Johnson and Pascrell agreed with us that the deduction for second homes is often demonized in discussions on tax reform. We were able to provide impressive data on second homes, which seemed to resonate with both representatives.
Rep. Pascrell raised an interesting argument about the gains exclusion on the sale of a principal residence. He pointed out that the tax code was designed to tax wealth, so why should so much housing wealth be tax free? 
We made an argument that housing wealth often transfers to retirement wealth, so the gains exclusion can and should be viewed as equivalent to a Roth IRA.  Rep. Pascrell asked us to do more research into this area.
All in all, we fought the good fight and came out of the meeting in a good place. 
There are several other working groups that we are engaging with. Tonight, we spent more than an hour with Rep. Kenny Marchant (R-Texas), who is heading up a working group focused on “debt, equity, and capital.”  Obviously, debt and capital have a major impact on all level of construction. So next to the real estate group, we identified debt, equity, and capital as our No. 2 priority. 

Rep. Marchant was a home builder in the 1980s and his brother still builds, so his familiarity with our issues is second to none. We discussed everything ranging from AD&C loans, carried interest, debt forgiveness (aka phantom income), depreciation, home equity loans and the mortgage interest deduction.

We had particularly lengthy conversations regarding credit availability and phantom income.  In particular, we discussed possible modifications to the Real Estate Mortgage Investment Conduit (REMIC) rules to ease the creation of a secondary market for AD&C loans (we passed policy on this at IBS), and he offered some suggestions that we will research. He was also sympathetic to our problems with phantom income.
As an aside, Rep. Marchant mentioned the meeting today between President Obama and the House Republican Conference.  The President met for 90 minutes today with the Republicans, and one of the issues raised was tax reform. The President, as relayed to us, said he would support a corporate-only tax reform bill that was revenue neutral; but if the House wants to do comprehensive tax reform, the bill would need to raise revenue. 
This is, of course, the underlying divide between the two parties:  whether higher taxes are needed to deal with the deficit or if revenue should go to lower rates. Corporate-only reform has been dismissed by both parties in the House and Senate as unpractical because of pass-thrus.  So when it comes to comprehensive reform, it is clear that the two parties remain far apart on the issue of revenue. 
NAHB: 1201 15th Street, NW Washington, DC 20005-2800 USA

Friday, March 15, 2013

Kathy Craven Snodgrass, your 2013 NAHB NAC



Meet Kathy Craven Snodgrass, the 2013 NAHB National Associate Chairman (NAC). This will be the first in the posts of our 2013 leaders so that all of you can put a face to a name. 

Monday, February 18, 2013

Return on Investment For Your Membership in NAHB


February 18, 2013

"Membership ROI CAN Be Measured"

I recently read an article about returns on investment and it brought my memory to a place it hadn't been in 25 years of home builder association (HBA) membership; justifying the cost of my membership to my myself, as an employer, and then again, as an employee to my employer. Sales & marketing is the area within your business where HBA memberships and sponsorships come from, therefore approved. With any sales & marketing initiative, short or long term, dollars spent have to bring back dollars earned. 

The definition of return on investment (ROI) is simple;


"A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio."


ROIs are sometimes misunderstood or unclear because all factors are not fully considered or explored. 


The below "open letter" is for associates who need help in renewing their dues; it should help your company's decision maker become aware of the benefits of HBA membership. In order for you to know where the ROI comes from an awareness of variables come into play and collateral benefits, a constant variable, should be taken into consideration. These collateral benefits are derived from your financial investment in membership playing a role. The question is "what is that role and does it  translate into a ROI for you?

For non members of the home builders association; if you derive any or all of your sales volume from the building industry, the below information should give you enough financial motivation to join by clicking here. 
 
 "An Open Letter to The Associate Member and Your Employer"

Dear Employer,
One of the most direct reasons why home builder association memberships are dropped is the lack of immediate business. NAHB estimates that fifty-five percent of new members drop out after one year. One year may seem like a long time to invest without a return but I would offer to you my opinion; that year is needed to familiarize yourself with your investment. To expect any size-able financial return, that you can actually touch and say "this came directly from my company's investment" may not be realistic.  Unless you have a product or service that has no competitors and is an absolute "must have" for builders and the industry you need to have patience in the HBA investment. 
During your first year of membership, or subsequent years when you are measuring the HBA's value to your bottom line, there are 3 areas that I would like to highlight for you that will bring you an ROI

3 metrics specific to your HBA investment that you may not be considering:

1. Member Benefits: Do you fly? Rent cars? Need insurance? Buy computers? Send packages via FedEx? Member benefits that bring you cash back in savings bring you back a return on your investment. Just recently I had an insurance quote given to me from a participating NAHB Members Discount (click here for full list of savings) and the savings would pay for my membership dues 3 years in a row. These are above and beyond what your state or local HBAs may offer as member benefits.

2. Industry Specific Education: your HBA membership has access to some of the top educational programs in our industry that can help you train your sales representatives. Your reps could benefit from training in (to name just a few of many) GREEN/sustainability, aging in place or just to understand the builders' business and how your products or service interact. Whether it's one or two classes or a full compliment to achieve a building industry specific designation, NAHB Education (click here) is there for you as an "in house" trainer." This education is offered to non members, but at a much higher rate. 
Training one rep in industry specific education alone pays for your HBA membership and your developing a building industry professional (click here), a major plus for you.

3. Fight for housing >  associates who work directly with builders should incorporate into their ROI thought process "if it affects builders it will affect your company's bottom line." HBAs help builders with legislative and regulatory initiatives that help fight for housing. These efforts deliver more units per parcel or bring projects to fruition at a faster pace. That means more immediate sales volume opportunity  for you, possibly at a better GP with a pipeline of business opportunities for future company growth.  The key word; opportunity. 

The HBA investment should also be applied towards the recurring revenue stream from your current customer base and how advocacy helps with that constant stream. The primary focus should be on your customers' and potential customers' ability to buy your product or service because of the HBA's role in the fight for housing.

If you're a company that sells to both builders and associates, the same principle applies; "what affects them will affect your company's bottom line."

80% of associates and their employers don't understand how the association's fight for housing efforts have helped with their business opportunities. Your local HBA membership is also a national membership. The following article highlights the national fight for housing  >"Reflections on 2012: A Return On Your Membership Investment" (click here) 
Your local HBA can share with you their efforts to help grow the building industry specific to your region or within your state. Again, 

These above three metrics, that if applied correctly in your sales and marketing discussions, can demonstrate a clearer ROI, one that includes the tangible as well as the intangible. Once you've experienced the awareness of what the above three metrics bring in value, the intangible quickly becomes tangible. HBA dues are minor in the grand scheme of sales & marketing assigned dollars and could be a major ROI for you and your company.

I haven't discussed a fourth metric; an expansion of your sales efforts through social networking and HBA volunteerism, where a massive ROI can take place if your company's HBA representative is integrated properly. There is quite a bit of information to this and if you'd like to know more please click here for detailed explanation.

P.S. What you were originally looking for: Sales attributed directly to your HBA membership. There are so many factors involved ;

  1. Are you a name in a directory or do you attend general membership meetings?
  2. Do you just do more than attend the general membership meetings, meaning do you interact with others while there?
  3. Is your company representative (you?) accomplished in the art of developing relationships?
Only you can only answer those three questions. Gaining new customers directly from your membership depends not on the association but on you, your company's offering and your ability to influence. The above three metrics, however, give you, at the very least, a return on your membership investment.

Regards,
Mike


 Michael Kurpiel, CGA, CGP

Saturday, February 16, 2013

State Rep Tommy Thompson Addressed HBA Kentucky

 Here, State Representative and former NAHB Chairman of the Board (1994) Tommy Thompson from Owensboro speaks to the HBAK Winter Board attendees about the state of affairs in Frankfort.

Below, Lexington builder Bill Hodges talks to the group about Build Pac while President, Jim Cutter from Northern KY looks on.  


The room was full and there were many very important topics discussed and managed.  We hope you can attend the next Board Meeting in May in Covington.

Friday, February 15, 2013

HBAK Winter Board Mtg

JoEllen Thompson discusses topics at the HBA KY Winter Board meeting held in Lexington.  we sure wish tjst more of you could have attended.
Please mark your calendars and try to attend the Spring meeting on May 22 & 23 in Covington.

Thursday, February 14, 2013

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS MEMBERSHIP

Here is the list of the Committee on Banking, Housing, and Urban Affairs members.  No one from Kentucky that I could see.


Tim Johnson, SD, Chairman
Mike Crapo, ID, Ranking Republican Member

Jack Reed, RI                       Charles E. Schumer, NY                     Robert Menendez, NJ         Sherrod Brown, OH
Jon Tester, MT                     Mark Warner, VA                                Jeff Merkley, OR                 Kay Hagan, NC  
Joe Manchin III, WV          Elizabeth Warren, MA                        Heidi Heitkamp, ND
Richard C. Shelby, AL        Bob Corker, TN                                    David Vitter, LA                   Mike Johanns, NE
Patrick J. Toomey, PA        Mark Kirk, IL                                        Jerry Moran, KS                  Tom Coburn, OK
Dean Heller, NV

SUBCOMMITTEE MEMBERSHIP
Unless otherwise noted, Tim Johnson, Chairman, and Mike Crapo, Ranking Republican Member, serve on all subcommittees as ex-officio, non-voting members.

HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT
Robert Menendez, NJ, Chairman
Jerry Moran, KS, Ranking Republican Member
Jack Reed, RI                       Charles E. Schumer, NY                     Sherrod Brown, OH             Jeff Merkley, OR
Joe Manchin III, WV          Elizabeth Warren, MA                        Heidi Heitkamp, ND
Bob Corker, TN                    Patrick J. Toomey, PA                        Mark Kirk, IL                        Tom Coburn, OK
Dean Heller, NV                  Richard C. Shelby, AL

FINANCIAL INSTITUTIONS AND CONSUMER PROTECTION
Sherrod Brown, OH, Chairman
Patrick J. Toomey, PA, Ranking Republican Member
Jack Reed, RI                       Charles E. Schumer, NY                     Robert Menendez, NJ         Jon Tester, MT    
Jeff Merkley, OR                 Kay Hagan, NC                                   Elizabeth Warren, MA
Richard C. Shelby, AL        David Vitter, LA                                   Mike Johanns, NE               Jerry Moran, KS 
Dean Heller, NV                  Bob Corker, TN

SECURITIES, INSURANCE, AND INVESTMENT
Jon Tester, MT, Chairman
Mike Johanns, NE, Ranking Republican Member
Jack Reed, RI                       Charles E. Schumer, NY                     Robert Menendez, NJ         Mark Warner, VA
Kay Hagan, NC                   Elizabeth Warren, MA                        Heidi Heitkamp, ND
Bob Corker, TN                    Richard C. Shelby, AL                        David Vitter, LA                   Patrick J. Toomey, PA
Mark Kirk, IL                        Tom Coburn, OK

NATIONAL SECURITY AND INTERNATIONAL TRADE AND FINANCE
Mark Warner, VA, Chairman
Mark Kirk, IL, Ranking Republican Member
Sherrod Brown, OH             Joe Manchin III, WV                          Jerry Moran, KS

ECONOMIC POLICY
Jeff Merkley, OR, Chairman
Dean Heller, NV, Ranking Republican Member
Jon Tester, MT                     Mark Warner, VA                                Kay Hagan, NC                   Joe Manchin III, WV
Heidi Heitkamp, ND
Tom Coburn, OK                 David Vitter, LA                                   Mike Johanns, NE               Mike Crapo, ID

Tuesday, February 12, 2013

Webinars for Better Business


Schedule

Upcoming Webinars
February is all about building a better business! Whether it's using an NAHB designation to increase your profile, or learning the cost of running your business, you're guaranteed to learn something that you can apply immediately!
Webinar Rewinds
To view a list of past webinars, please visit the Webinar Rewind page.
The Source for Quick CEs
If you hold an NAHB professional designation, each webinar counts for one hour of continuing education credit.

February Webinars
Branding Yourself and Your Business Using Your NAHB DesignationFeb. 13, 2:00-3:00 p.m. ET
Business Improvement series
You’ve earned a NAHB professional designation … now what? The next step is getting the word out. Branding is the best way to separate yourself from your competition. Whether you are a CAPS, CGB, CGP, CGR or hold another designation, NAHB has created a wide range of resources to help you market and promote those letters. In this webinar, FREE to NAHB Designation holders, we’ll show you how to take advantage of affordable and easy-to-use tools and get noticed. You’ll also hear directly from experienced industry pros who have built their personal brand through their NAHB designation and are currently using it to expand their business.
Presented by NAHB Education

NAHB Remodelers Cost of Doing Business Study
Feb. 20, 2:00-3:00 p.m. ET
Economics & Research series
The NAHB Remodelers Cost of Doing Business Study is one of the most important business management tools remodelers can use. The study is based on a nationwide survey of remodelers. Using candid answers about annual revenue, cost of sales and operating expenses, as well as company assets, liabilities and equity positions, NAHB calculates average gross and net profit margins as well as critical financial ratios for remodeling professionals nationwide. Results will be analyzed by region of the country and business model (general remodeler versus design-build remodeler). Speakers will discuss the important metrics presented in the study, why remodelers need to understand them, and how they can use them to gauge the health of their operations.
Presented by NAHB Remodelers

March Webinar   
What Do Home Buyers Really Want?Mar. 6, 2:00-3:00 p.m. ET
Economics and Research series
Many in the industry are wondering about what home buyers really want and will not give up in today’s market, as well as which features they are ready to leave behind in light of current economic realities. Based on the 2012 NAHB study “What Home Buyers Really Want,” speakers will analyze the most current data on buyer preferences so that NAHB members can deliver the home (and community) that today’s buyers want and are willing to pay for. Real-world examples, imagery and drawings of the findings will also be presented.
Presented by NAHB BuilderBooks

Secrets of Selling to the Multicultural Home Buyer - Registration Opening Soon!
March 13, 2:00-3:00 p.m. ET
Sales and Marketing series
More than one-third of all Americans are minorities and those numbers are growing at an exponential rate. The good news is that buying a new home is one of their highest priorities; however, to get your share of this huge and expanding market, you must become aware of the unique needs of Hispanics, African Americans, Asians, Middle Easterners and others. Find out why they don't necessarily want to work with a salesperson from their own culture, how to overcome their objections and how to deal with culturally-based beliefs. Learn to build positive long-term relationships with multi-cultural customers and get referrals that will increase your profits and dramatically cut marketing costs.
Presented by Professional Women in Building

Builders Guide to Appraisals: Obtaining Accurate Valuations on New Homes - Registration Opening Soon!
Mar. 27, 2:00-3:00 p.m. ET
Policy and Finance series
Major changes have occurred in appraisal standards and practices in the wake of housing and financial market turmoil. These shifts present major challenges to home builders in financing and selling their homes.  This program will provide information on the new appraisal landscape, help builders obtain more accurate appraisals and discuss NAHB's blueprint for appraisal reform.
Presented by NAHB Housing Finance