Dining Dialogue: Home Builders face tough issues

A growing number of regulations, a decreasing number of skilled workers and slow regional economic growth are just some of the issues challenging area homebuilders, according to Dave Hughes, executive director of the Greater Fort Smith Association of Home Builders.

That said, the association that was formed in 1955 has been a leading organization nationwide in the promotion of quality housing. The association is one of very few that still conducts two parade of homes events each year. Just a few years ago, the association was recognized nationally for 25 consecutive years of constructing and selling a showcase home.

“No other organization like ours, anywhere in the country, has done that for that long,” Hughes said.

The association today has 154 member companies who employ at least 8,500 people in the region, with most of those in Crawford and Sebastian counties.

According to Hughes, a majority of housing related businesses in the region have remained in business despite an almost 40% drop in home sales between 2006 through May 2013.

“The good news is, most builders and suppliers did not go out of business. … It’s not been easy, but they’ve found ways to stay in business,” Hughes explained. “Most of our members are locally owned, and so they are invested in the community and they want to see it grow. … At the end of the day, all a builder really has is his reputation, so they work hard to protect that.”

Hughes said the effort to stay in business becomes more difficult every year as the industry faces more federal and state rules. Most of the rules that Hughes says are “overreaching” deal with energy efficiency and building codes that go beyond “common sense.”

“To an extent and for public safety, you have to have good codes for safety standards and fire standards. But we’re approaching what I think is a tipping point with overreaching federal regs that are pushed down through state and local governments,” Hughes said.

With new energy efficiency rules mandating the types of windows, insulation, plumbing and other housing materials, the cost/benefit ratio soon gets out of whack, according to Hughes.

“The bottom line is that it will cost more to build a home … and so you price families out of new homes and they stay in older homes or stay in apartments that” are much less energy efficient than homes built under older energy efficiency rules, Hughes said.

“So if your goal is to improve efficiency, but you price everyone out of the market, then what have you gained? Nothing,” Hughes said.

The local association is also working with the National Association of Home Builders to oppose efforts to reduce or eliminate the mortgage interest deduction.
www.nahb.org/

“They’ve (Congress) been trying to cut that for years, but it does help stimulate the market. I would think that, with the economy finally showing some life because of a better housing market, I would think they wouldn’t want to mess with that right now,” Hughes said.

Something else that would stimulate the industry would be a return of skilled trades training. Hughes said over the years there has been less instruction available for skills required by the housing industry because of the greater focus on college degrees. He argues with those who say a college degree is the best path to a good job.

“That’s not true. Call a psychiatrist the next time your toilet stops up. … Look, we have a real dearth in incoming skilled trades people. It’s not just here in our area, it’s everywhere,” Hughes said.

He recently spoke to a group of high school students and encouraged them to consider the benefits of a skilled trade.

“I essentially told them, ‘Not all of you may finish college, but that doesn’t mean you won’t be successful,’” Hughes said of his remarks to the students.

In addition to a skilled workforce, Hughes said the Fort Smith regional housing market also needs more higher-paying jobs in the area. He realizes the manufacturing sector is not likely to return to its glory days, but an economy of service sector jobs is not good for the industry.

“Well, for starters, more jobs created than we’re losing,” Hughes said when asked what would provide more stability to the local housing sector. “Specifically, what we need are those $20-an-hour jobs that we had when manufacturing was so stable for so long.”