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HBA HOME BUILDING NEWS
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PROTeCTiNg YOUR iNdUSTRY
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MAY, 2013
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HBApdx.org
number of available lots began
to decrease and since not much
development occurred we are
beginning to feel the lot shortage
that many predicted as well as an
increase in pricing. The cost of a
building lot in Portland has in-
creased 20 percent this year over
last year according to Jeff Fish of
Fish Construction Northwest and
I’ve been told by other builders
that the overall price of lots in
the Tri-County area has increased
as well. We are now seeing our
builder clients purchase smaller
and smaller parcels of land to di-
vide, and with increased regula-
tions and requirements the time
it takes to divide property into
available building lots is about
one to one and a half years with a
smaller yield than in earlier years.
All of these factors have contrib-
uted to the lot shortage we are
now experiencing.
The Government Relations
Committee of the HBA along
with staff are working hard to
make sure any proposed regula-
tions are reasonable and don’t
increase the cost or time it takes
to develop or build homes. Many
of the members and staff stay
involved in and track certain is-
sues such as the Urban Growth
Boundary expansions, density
and affordable housing issues.
It’s extremely important that our
elected officials are aware of our
issues, concerns and the positive
economic impact this industry
has on our region.
The PAC Committee is in
charge of raising funds for the
PAC and Government Relations
Committee to use for those can-
didates that we feel are housing
friendly and those issues that we
feel are important. This is an ef-
fort that we hope all of our mem-
bers take part in as it does affect
us all. Fish Construction NW Inc.
is building another Pac House
where the proceeds will go to
the PAC for those efforts. At this
time the property has been pur-
chased and the building permits
have been submitted to the City
of Portland. For every Pac House
that’s built we try to get as many
donations of labor and material
from our members as possible.
Even a donation at your cost will
help defray the cost and increase
the proceeds for the PAC. Thank
you to Parr Lumber and a few oth-
ers who have donated so far, but
we still need excavation labor,
framing labor, roofing labor and
materials, doors and millwork,
insulation and drywall labor and
materials. If you can donate time
or materials please contact Justin
Wood at (503) 684-1880.
One of our own, Justin Wood
with Fish Construction, was re-
cently brought to DC to testify in
Congress on federal timber poli-
cy. Since his testimony talks about
a lot of issues near and dear to us,
I thought it was worthwhile dis-
tributing it through our newslet-
ter network. For legislative news
and comment, please check out
our blog at
www.oregonhba.com.
The following is most of
Justin’s testimony:
On behalf of the more than
140,000 members of the National
Association of Home Builders
(NAHB), I appreciate the oppor-
tunity to testify today. My name
is Justin Wood, and I am the Vice
President of Fish Construction NW,
Inc. in Portland, Oregon.
NAHB represents builders and
developers who construct housing
ranging from single-family for-sale
homes to affordable rental apart-
ments and remodelers. Lumber is
a critical component to the resi-
dential construction industry, and
today, I will direct my testimony
to the correlation between federal
forest management policies and
affordable housing.
Few industries have struggled
more during the Great Recession
than the home building industry.
The decline in home construction
has been historic and unprecedent-
ed. Single-family housing produc-
tion peaked in early 2006 at an an-
nual rate of 1.8 million homes, but
construction fell to 353,000 per year
in early 2009, an 80 percent decline
in activity. If home building were
operating at a normal level, there
would be millions of more jobs in
home building and related trades.
The improvement in housing
markets over the last year has been
a welcome change for the econo-
my. Improvements in home prices
and building are widespread, with
the NAHB/First American Improv-
ing Markets Index now standing at
a count of 273 of 361 metropolitan
statistical areas. NAHB expects new
home sales to average 452,000 for
2013 as more consumers regain the
confidence to purchase a home.
Construction activities have posi-
tive impacts by creating ongoing
beneficial impacts in communities
as new home purchasers pay taxes
and buy goods and services in the
community. For example, NAHB es-
timates the first-year economic im-
pacts of building 100 typical single
family homes include $23.1 million
in wage and net business income,
$8.9 million in federal, state and lo-
cal taxes, and 305 jobs.
Residential construction has fi-
nally turned the corner and is con-
tributing to, rather than subtract-
ing from, Gross Domestic Product
growth and an improving labor
market. Any efforts to ease escalat-
ing price pressures, help rebuild the
supply chain, and support a con-
tinuing housing recovery is smart
economic policy. For these reasons,
NAHB fully supports multi-use for-
est management practices for na-
tional forests and an increase in
the supply of federal timber prod-
ucts. Specifically, NAHB strongly
supports Chairman Hastings’ Re-
storing Healthy Forests for Healthy
Communities Act, which requires
the U.S. Forest Service to actively
manage its commercial timber
lands and increase production of
timber products into the market.
At Fish Construction NW, Inc., my
father-in-law and I build approxi-
mately 15 to 25 homes per year. In
my career, lumber has always been
one of our most volatile-priced
products. We can see wide price
swings over a short period of time,
which has a direct effect on the af-
fordability of our houses.
NAHB research shows lumber
and wood products account for 15
percent of the cost of construction
for a single family house. The prices
of these materials have soared as
the housing recovery has gained
momentum in 2012. For example,
prices of oriented strand board, an
engineered wood product, are up
92 percent. Framing lumber is also
seeing price increases upwards of
28 percent.
The rising cost of inputs drives
up the cost of construction, which
in turn, drives up the price of a new
home. The impact is of particular
concern in the affordable housing
sector where relatively small price
increases can have an immediate
impact on low tomoderate income
home buyers who are more sus-
ceptible to being priced out of the
market.
Home builders are generally
small business entrepreneurs.
Eighty-two percent of home build-
ers build fewer than 25 homes a
year, and 60 percent of NAHB’s
members build fewer than ten
homes a year. Many of these small-
volume builders and subcontrac-
tors do not have the capital to
withstand price volatility in the
market, and consequently, increas-
es in buildingmaterial costs lead to
fewer homes constructed.
Global demand for lumber has
also grown, especially in China, and
U.S. exports have doubled in the
last five years. Consequently, there
will be additional upward pressure
on prices as the housing industry
recovers unless additional supply
can be brought into the market.
Privately owned forests supply
91 percent of the wood harvested
in the United States, and U.S. State
and tribal forests supply another
six percent. Federal forests supply a
mere two percent of the wood used
by the forest products industry.
It is important for Congress to
take a deep look at these issues
and determine what actions can
be taken in an environmentally-
friendly way.
Chairman Hastings’ “Act,” en-
courages increased production on
the federal timber lands, and at
the same time, remains mindful of
important environmental consid-
erations. This legislation will go a
long way toward helping rebuild
the supply chain and reviving local
mills and timber companies, while
also ensuring the continued recov-
ery of the housing industry.
Jon Chandler’s
News from the Oregon Home
Builders Association
Oregon
Update
Inside Line:
Many factors contributed to current lot shortage
Continued from page 11
HBA supports keeping forests healthy and boosting timber production
Watch Justin’s testimony online atnaturalresources.house.gov/calendar for Thursday, April 11.
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