CBF2011 - May Jun by Amie Mayhew

FORUM

May/June 2011

Journal of the Colorado Association of Home Builders www.hbacolorado.com

‘11 Legislative Wrapup builder-backed bills pass at capitol — a first in three years

HBA’s New Normal Many thrive with creative, out-of-the-box thinking

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features

ColoradoBuilder FORUM

contents »

10 4

May/June 2011

may/june 2011 vol. 15 no. 3

22 It’s a wrap! Builders gained ground with two bills’ passage during ‘11 legislative session

www.hbacolorado.com

HBA checkup Local HBAs create their own ‘new normal’ as they position for growth

departments contents »

08 34 42 46

President’s Letter

Thanks to all who helped preserve our rights at the Capitol

Giving Back

How HomeAid helps families get back on their feet — and buy the American Dream: A home

Member Spotlight

After 26 years at the helm of the HBA of Metro Denver, Roger Reinhardt bids a heart-felt adieu and begins a new chapter

CAHB Calendar

Marketing

Building by the Law

Builder Financing

E-mail essentials help make builder marketing work

Consequences of the residential real property transfer fee bill

As buyer financing picks up, you can help buyers — and sell more homes

Colorado Builder Forum is printed on elemental chlorine-free paper in conjunction with the International Joint Commission and is consistent with the U.S. Environmental Protection Agency’s standards.

Please recycle this magazine.

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May/June 2011

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President’s Letter

curb appeal

ColoradoBuilder

FORUM

Thanks to all for legislative session efforts The 2011 legislative session is over. As I reflect on it, a few things come to mine. I cannot believe how much work goes into each bill and how many bills — or potential bills — we monitor during the course of the session, along with all the planning CAHB and the local HBAs put into the effort. This issue of the Colorado Builder Forum summarizes the results for you. Once again, special thanks are in order for those of you who put forth the extra effort to preserve our rights at the capitol. I would like to thank Steve Durham, Joannie Green and Jeani Frikey, of Colorado Wyoming Edge. They, along with Amie Mayhew and Rob Nanfelt, Peter Tobin were in daily attendance at the capitol during the session. CAHB President Also, hats’ off to Chris Elliott for leading the Government Affairs Committee. Chris spearheaded the charge and coordinated our volunteer HBA members who attended many meetings and hearings that represented CAHB. The list could go on and on, but special thanks go out to Rebecca Dow, Pat Hamil, David McLain, Bruce Likoff, John Cassiani, Ralph Braden, David Tschetter and Kim Calomino, who were really key spokespeople for CAHB and truly define personal dedication to our industry. As we approach the second half of the year, I look forward to the process of setting our 2012 legislative agenda. Meanwhile, please contact your state senators and representatives. Let them know what you thought of the session, how your business is faring in this economy, the continued need for job creation and the importance of getting our industry back on solid ground. Much of the summer months will be dedicated to planning next year’s session and we look forward to your feedback in the next few months.

www.hbacolorado.com

(kurb uh-peel)

May/June 2011 vol. 15, no. 3 Official Publication of the Colorado Association of Home Builders

The initial attraction of a property to a prospective buyer.

CAHB executive committee President Peter Tobin President-Elect David Tschetter Treasurer Tom Brinkman Secretary Rob Griffin

Immediate Past President Emil Wanatka Government Affairs Chair Chris Elliott

Visit CAHB’s updated web site In addition to the session and conference, the CAHB has updated and improved our web site. Go to www.hbacolorado.com to see all the changes and upgrades that keep you informed on what we’re doing. Many thanks to Paula Huggett and the Bokka Group for their assistance on the web site. The site is easy to navigate and is the place to go for information on CAHB events, the RMBC, programs and updates.

A fond farewell to Roger and Rob Last — and certainly not least — I would like to say goodbye and best wishes to Roger Reinhardt and Rob Nanfelt. Roger has retired as the executive director of the HBA of Metro Denver. He’s provided great leadership to our industry for more than 26 years. Rob, CAHB’s EVP has left CAHB and relocated to North Carolina. Rob will be joining his lovely wife, who has accepted a surgery position at a North Carolina veterinary hospital. On behalf of CAHB, we wish them both the best and our gratitude.

CAHB Staff Executive Vice President Amie Mayhew

Bill Armstrong, Chair Tom Brinkman Randy Feuerstein

Tom Hayden Peter Tobin

600 Grant Street, Ste 550 Denver, Colorado 80203 P: 303.691.CAHB (2242) F: 303.639.4954 www.hbacolorado.com

“Craftsman”

“Euro-Cottage”

“Traditional”

“The Traditional Approach” Multiple elevation styles.

Dedicated to the advancement of the home building industry, Colorado Builder Forum is published six times a year for members of the Colorado Association of Home Builders. Copyright © 2011 by CAHB. No material may be reproduced without the express permission of CAHB. Acceptances of advertisement in Colorado Builder Forum do not imply endorsement or approval of the product or service advertised.

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“Scheme B”

“Scheme C”

“Scheme D”

“The Alternative Approach” A series of enhancements. • • •

vice president – group publisher

Maureen Regan-Cannon 303.662.5215 mregan@wiesnermedia.com project manager – account executive

Martha Dickenson 303.662.5280 mdickenson@wiesnermedia.com editor

Kim Jackson kim@writingwerks.com

“Before”

art director/advertising production

Lindsay Hayes

chief executive officer

Dan Wiesner

chief financial officer

Jon Rich

John Wiesner

vice president – IT

vice president – group publisher

Amy Korb

Bart Taylor

“After”

“The Makeover Approach” “You only get one chance to make a first impression . . . make your buyer stop and get out!”

E. Patrick Wiesner credit manager

Patty Barbosa

accounting specialist

Best to all, Peter Tobin, CAHB President

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Steve Oliveri

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May/June 2011

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Expanded front porches Accent roofing materials Cross gabled roofs Chimney elements Stone accent walls Upgraded porch railings Gable end bracket details Window boxes & shutters

• •

CAHB editorial board

vice president – production/operations

Best to all,

• • • • • • • •

• •

State Representative to NAHB Skip Howes

Make plans now for RMBC The Rocky Mountain Builder Conference will be here before you know it. Please mark your calendar for October 5-8 and make your reservations now. Paula Huggett and her Conference Committee has selected a dynamic set of educational speakers, and has sold numerous booths to our associate members. The conference is taking shape and all of this will take place in beautiful Beaver Creek, so please plan to attend and support the conference.

• •

Craftsman: Metal accent roof Trellis and bracket details Euro-Cottage: Sweeping roof line Arched openings Traditional: Well proportioned shutters Window boxes

Executive Officers Council Chair Sue Hibbs

• • •

Re-skin existing product Center massing Complimentary roof pitches Neighborhood sensitive vernacular Grounded covered porch Added chimney element Accent window

Builders gain ground during ‘11 legislative session Bills pass that can make it easier for builders to do business in Colorado By K i m Jac k s o n

pro-business governor and a split chamber helped builders get two bills passed during Colorado’s 2011 legislative session — a first in three years. Legislators agreed to a stand down on any construction defects legislation. While two builder-proposed bills were killed in committee, legislators agreed to stand down on any construction defects legislation, and builders are much closer to getting yet more legislation passed next year. Government Affairs Chair Chris Elliott observed that of the four items CAHB was proactive on, two were successful. “By getting the things done that we wanted, and keeping the bad things from happening, I would say that we did reasonably well this session,” he said. “We’re better than 50-50 and if we were using the grading scale, I’d say we’re a B+.”

Steve Durham, CAHB lobbyist, added, “Gov. Hickenlooper has demonstrated he does understand business issues and that’s a welcome change for the business community. The home building industry should work to develop its ties and relationships with the governor’s office on important issues going forward.”

The wins

HB 11-1113: Government transparency.

This bill addressed the disconnect between governments collecting impact fees and tracking how those revenues are spent. In some cases, builders found out after the fact that impact fee money was misused. Builders were then forced to file suit to find out how the monies were allocated.

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So CAHB crafted a bill that addressed transparency of impact fee collection on the front end, “to head off problems before they’re created,” said Jeani Frickey, CAHB lobbyist. Builders worked with the Colorado Municipal League and Colorado Counties, Inc. to construct a bill in a way that worked for cities, counties and builders. “We wanted to come up with a mechanism that make the impact fee transactions more transparent — so our builders don’t have to rebuild the whole financial situation of a city to find out where their money went.” The result? “It passed with flying colors really early on and was one of the first bills to pass into law,” Frickey said.

HB 11-1160: Green building. After meeting with objections last year from the Governor’s Energy Office (GEO), builders reintroduced its green building bill this year. The concept behind the bill is two pronged. First, it encourages builders to build energy efficient homes to green standards. Second, existing owners of older homes who want to buy a new, energy efficient home, are eligible for grants from the GEO to fix up their home — based on the home’s testing results. For example, if after a home has been tested, it’s determined the house has bad windows, the owner would get a grant from the GEO to replace the windows and bring them up to today’s standards. The owner has a specified amount of time to fix — in this example, the windows — to be eligible for the grant. If the buyers don’t buy the new home, they’re ineligible for the grant monies and are responsible for repaying the grant for what had been fixed. Here how the program works: A home buyer purchases new construction that’s at least 25 percent above the energy efficiency code, and has an existing home (likely older and not energy efficient) that he or she would like to sell to purchase the new one. Because the buyer is purchasing highly energy efficient new construction, under this program he or she would qualify for a grant from the GEO to retrofit the existing home, making it both more energy efficient and more marketable. The retrofits would be done based on testing to determine the most cost-efficient improvements, which could range from insulation upgrades to window replacement. David Tschetter sits on the Government Affairs Committee. The owner of Colorado Custom Homes explained that the biggest stumbling blocks to this bill’s passage were activists who felt this was a handout to the building industry. “They clearly didn’t understand this legislation,” he said. “Builders aren’t getting any money. The other issue they didn’t understand was that these dollars are already allocated by the GEO and are already going to be spent.

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There was no accountability on where these dollars would be spent. This program makes it very accountable on where these dollars are being spent; you can see the tangible results.” And while the bill had the support of Environment Colorado — and didn’t expect any opposition — builders “ran into the brick wall of the Tea Party on the House floor,” said Frickey. “We became their number one priority bill to oppose. It was a very strange place to be because home builders, as an organization, is a conservative one. The Tea Party flagged it because it had the term ‘green building’ on it. That was bizarre.” The Tea Party’s second reason for flagging the bill was because it used federal funds. “They were all over it for their anti-deficit measures,” Frickey added. “We weren’t talking about going after new federal funds. The funds were already designated and given to the state for this purpose. This wasn’t a pork barrel project, but a proactive way to use this money that was already identified for Colorado. There was just no reasoning with that contingency.” After fighting its way through the House, Frickey said that once the bill reached the Senate, “the Tea Party had other things to focus on; the Senate was not quite the circus it was in the House.” The bill passed and at the signing, Frickey added that “the governor was very complimentary about the concept and said some very positive things about supporting jobs for construction. It was nice that we didn’t have a big sales pitch to the administration.” SB 11-234: transfer fees. Cities use transfer fees to support the infrastructure and services to build a house or maintain a community. HOAs use them for community amenities and to keep monthly fees down. Builders use them as a finance tool. Transfer fees support affordable housing and open space initiatives. None of this information is new; it’s been that way for a very long time. Title companies expressed concern about tracking transfer fees. Investment company FreeHold wanted to use transfer fees to finance development projects. While some viewed FreeHold as a sketchy deal, from CAHB’s perspective, the jury was still out and there was nothing nefarious how the company wanted to use them. However, a group of lawyers and realtors wanted to put an end to the FreeHold model of transfer fees. “Initially, they wanted to wipe out the transfer fees that are currently in place, and that are very viable financing options,” Frickey said. “It’s a very complicated issue in our industry. The negotiations and some of the conversations related to this bill were some of the most acrimonious I’ve ever been in, in my 15 years of lobbying. I would put that up against our growth battles, water issues, oil and gas, construction defects. They were the most bizarre, hostile negotiations we’ve ever been in with stakeholders.” She added that while builders continued to oppose the bill, “we agreed to stand down in our lobbying efforts, if they

May/June 2011

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accepted our two issues. The difficulty was that the realtors at the table didn’t fully understand it and the legislators weren’t familiar with it. We made a strategic decision to make the bill as harmless as possible. Our big issue was that we were protecting transfer fees that already exist as of the time the bill became law and make sure we protected transfer fees between commercial entities. Even going forward, we wanted to make sure we were protecting commercial projects.” The legislature passed the bill and at press time, it had yet to be signed into law.

The losses

HB-1139: banking bill. For the second year in a row, this bill died in committee; this year though, it died in the Republican-led House. Builders introduced a bill that would require banks to pursue a property’s collateral first through a foreclosure process, then the guarantor of the collateral to make up the deficiency. Both last year and this, the banking industry’s position has been that contracts are between them and their clients; the legislature should not interject itself in contractual law. Builders agrees that they are indeed are contracts, but the industry has always had implied contracts — and they’re just as viable in a court of law as contracts. “I think we got a little more traction this year than last,” said Tschetter, “but unfortunately, the committee members were unwilling to take a tough vote on this issue. They’re looking at the banking industry as their friends and us as their friends, and no one wants to get into this mess. We haven’t had the traction we need to get it out of committee and on the house floor.” He’d like Colorado to become a non-recourse state, like Utah, Arizona and California. That means that if a bank forecloses on a piece of property, for whatever reason, there’s no recourse against the property owner. All banks can do in those states is reclaim the property. “What people don’t understand in Colorado is the bank has the option to foreclose the property. The bank has the option to sue as the guarantor of the property. Or the bank has the option to do both at the same time. Banks in Colorado are bypassing collateral and suing the individual directly, even though the property may have equity. The

reason they’re doing that is they understand, more than anybody else, that nobody’s making the loans when it comes to land. If they foreclosed me on property, they’ll have a difficult time finding a buyer.” It’s a tough situation that has pit frequent, conservative allies in the legislature — builders and bankers — against one another. And if the banking industry and legislators looked closely at the bill, they’d see that it doesn’t change the bank’s ability to collect the debt. It simply says that instead of the right to sue the property owner first, banks must pursue the collateral first.” “It’s a game changer,” Tschetter said. Here’s why. Let’s say you owe $1 million on a property that’s worth $1.3 million. If the bank forecloses you, it has to bid the value of the property. If it’s worth $800,000, you owe the bank $200,000 and it has every right to get that deficiency from you. However, if the bank sues you for $1 million, chances are that action will force closure of your business and go bankrupt. “In the first two options — one, I don’t owe them and the other, I owe them $200,000 — at least I still own property and am in the game,” Tschetter said. “The other option, all they’re doing is putting us out of business and bankrupting us in the process.” It’s an issue that in Tschetter’s opinion is responsible for the home building industry’s staggering 30 percent unemployment. With more than 100,000 unemployed within the industry, Tschetter said, “we’re seeing companies that have been in business for decades going out of business, because they can’t go forward. We’ve got people losing everything they’ve ever worked for over this issue.” What’s more, if the housing industry gets much worse, he warned that banks in Colorado can follow the same process with individual home owners. “The bank doesn’t have to foreclose you,” he said. “They can sue you for what’s owed. How many consumers who own homes know that? I’d be surprised if any. Hell, I’ve been a broker for 30 years and I didn’t know that until I delved into this bill — and I’m a damned good broker.” Looking ahead to the next session, Tschetter said, “We’ll huddle with our lobbyists and move forward with the game plan. Part of that is to do a lot of one-on-one lobbying, from

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the standpoint of sitting down with these legislators and really educating them with the issues. It’s going to take that personal interaction where we make it very real for legislators, so they get it, so they’re armed and dangerous — and so we have a viable discussion about this issue.” Elliott added, “We’re going to have to spend the summer strategizing about what would be best for us, and change our approach a little bit.” HB-1020: lien notice bill. This bill would have required any company or person on a job site providing goods or services to give notice within 20 days to the person/company distributing funds, which served to validate a mechanics’ lien. The rule applied to both principal/subcontractor, as well as subcontractor/subcontractor relationships. Lien waivers would be required by the principal contractor. Once received, joint checks would be issued to both the noticing party and the party that was contracted. The bill was killed in committee. Elliott said, “We’ve got a reasonably good shot over the summer to work on the lien notice bill and come back next year with a bill that should be a little easier to pass.”

Construction defects, growth issues take a break This session, the legislature steered clear of any construction defects legislation. Elliott said, “I give Steve Durham credit for that. He got commitment from the legislators themselves that they weren’t going to let something come

May/June 2011

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forward. So there was no further erosion in the construction defects ongoing battle.” He added that there were no negative things done to builders in terms of environmental or growth-related issues. “When we have issues like construction defects, growth and environmental issues,” Elliott said, “we have commonality with the Republicans in our positions. They’re opposed to trial lawyers making it easier to make themselves rich, and they’re opposed to environmental red tape and restrictions.”

Looking ahead By far, the banking issue is the top priority for builders. And while builders “are in sync with Republicans on major issues,” Elliott explained, “the problem comes up when we’re in opposition to a group that has a lot of strong relationships with the Republicans, as well. We were pitted against another group that generally thinks the same, and vice versa. We ended up in a situation where Republicans chose the other folks instead of us in how they approached some of those issues. It was disheartening that we didn’t get a greater opportunity to be heard and that when push comes to shove, we’re apparently lower on their totem pole than some other groups.” Durham added that legislators don’t often override existing contracts, “and they didn’t do it in this instance. We had a case where freedom of contract and the abuses the banks have in freedom of contract unfortunately trumped our in-

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terest. For the next session, we have to determine whether we want to revisit the banking issues. We do have a banking system that’s out of control and it’s not serving its customers well. I think the legislative session is going to have to decide if they want to deal with that. The banking system is still dysfunctional, for all intents and purposes.” Elliott observed that NAHB is working with Congress to fix the financing situation, where if you do have financing in place and it matures, banks are opting to discontinue the relationship with you. In Colorado, “we need to do whatever we can do here to better the environment for our members on that issue,” he said. “I have a number of big, national, public builders that are anxious to buy land and build houses, because they perceive the market can

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support that. But if I can’t put financing in place, I can’t satisfy that and it keeps the industry down. This summer, we need to spend some time talking about how we can make things better.”

Get face to face with your legislators; many still don’t get how bad industry is And while Tschetter said that while advocacy is the number one priority of the CAHB, he encourages you to constantly talk to your legislators. “If you’ve been negatively affected in any way in the last three years, express that to your local legislator,” he said. “We can talk at a higher level, but it’s really those personal stories that in the end make a difference. Any time we can personalize the experience we’re having with an issue with our legislators, I think it’s very, very positive.” He added, “We’re going to have to get one on one with them, and let them know what’s going on, particularly with the banking issue. They have to feel the pain. They have to understand the pain that this industry is going through; unless we can get our message over to the other side of the legislature, it’s not going to do any good. If it can’t get through the House, we can’t get to the people we know in the Senate.” Frickey agreed, and added, “There are legislators who don’t have a clear picture about how bad it is in the home building industry, still. We worked almost every day of the session to educate lawmakers that our industry has a 30 percent unemployment rate. The saying goes, ‘As goes home building, so does the economy.’ Normally, we’re the first in a recession and the first out. “That’s going to be an ongoing effort through the off session, too,” she added. We’re going to continuing to work with legislators and making sure they understand just how critical home building is to the economic recovery — and how important it is to Colorado’s economy.”

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C reati v ity, out- of - the - bo x thinking add value

Colorado’s local home builder associations are poised for g

row

Although the home building industry has been pounded and nearly eviscerated over the past three years, local home builder associations have stepped up to the challenge by creating more high-value opportunities for members, addressing code issues to keep home costs reasonable and innovating new revenue streams in the process. What may be most important to members, though, is that home builder associations have shown they’re there for their members. Those members who have stuck by their associations have found stronger and deeper relationships with one another and the associations themselves. These bonds form the strong foundation they’ll build on as HBAs turn the corner and grow once again. What follows is an ever-so-brief recap about how some HBAs are faring now, and positioning for the future.

Housing & Building Association of Colorado Springs’ May/June 2011 2010 Parade Homewww.hbacolorado.com – Oakwood Homes

by Kim Jackson

Home Builders Association of Northern Colorado

Housing & Building Association of Colorado Springs’ 2010 Parade Home - Murphy’s Custom Homes

Housing & Building Association of Northwestern Colorado

Housing & Building Association of Colorado Springs’ 2010 Parade Home – GJ Gardner Homes

With both builders who are building dream homes and those who are building first-time-buyer homes, Traci Weinbrecht, executive officer for the Housing & Building Association of Northwestern Colorado said, “we’re hanging in there. We went from having membership in the 300s several years ago to about 120 members now. We feel the members we have are able to stick with us through these times.” And while some of her members are just hanging on to their businesses and looking for new ways to market them, “a core group of builders are still out there building homes.” She observed that first-time home buyers are pretty lucky to buy from some of her builder members because they’re not the typical first-time homes. “Building has changed,” she said. “They’re more energy efficient, more structurally sound.” Covering Delta, Gunnison, Hinsdale, Mesa, Montrose, Ouray, Rio Blanco, Routt, San Juan and San Miguel counties, Weinbrecht noted that one of the biggest issues facing members is the fire mandate issue. “Our board is putting together our HBA’s position on that,” she said. “They’re not for it, mostly because it would raise the cost to build a home.” The board is also reaching out to their subcontractors, letting them know about the HBA’s voice and encouraging them to join. “We have a political voice. We have a networking voice, as well,” Weinbrecht said. “My biggest thing is how important it is to be part of your local association and how it’s not just for northwestern Colorado; it’ not just being a part of an organization in Grand Junction, Montrose and Delta counties. It gets you into the state and the national levels. A lot of businesses are doing great things for the industry. “There’s a heartbeat in the economy,” she added. “If you care about your industry, you have to get active in it and involved.

Dottie Weber and her members have certainly been active. Covering seven counties — Larimer, Logan, Morgan, Phillips, Sedgwick, Washington, Weld, and Yuma — the executive officer of the Home Builders Association of Northern Colorado has delved into areas outside the traditional realm of a home builder’s association to create more value for members. She feels that the recent membership slide has hit bottom and that current HBA members will stay for the long term. Weber has been with the HBA since 1980, when there were 189 members; now there are 203. “There’s a lot more optimism this year than there was last year,” she said. “Our permit starts are actually up this year, quite a bit from last year.” At the end of March, 444 permits were pulled, compared with 423 last year and 127 in 2009. The highest number of permits pulled was 475, when times were very good. “Part of that is Fort Collins is building student housing, so there’s a number of multifamily permits,” she added. Weber expects that trend to continue as the Niobrara oil play and the Leprino Foods plant expansion in Greeley “come down the pike.” The plant is expected to have 500 additional jobs when complete in 2013, and an estimated $1.3 billion impact on the regional economy. Meanwhile, small building members’ biggest stumbling block has been getting construction loans. “All we can really do at this point is encourage our people to contact their national reps to reduce those regulations,” Weber said. A local bank executive sits on the HBA’s board and has said that regardless of how personally he may feel about someone in the area, he doesn’t have the authority to make the loans. Until there’s a change, builders will continue to hobble along. The city of Greeley adopted the fire sprinkler ordinance, only to take it out of code shortly after, due to loud outcry from the public and builders. “They were the only municipality in the state to do that,” Weber said. “Other areas have opted out of it already. Larimer County is looking to redo its fire regulations, making it easier to build in the county.” The HBA has also formed a partnership with the city of Fort Collins, where the HBA has taken over the Northern Colorado Energy Star program to administer the program in the area. While not a big revenue generator for the HBA, it has other value to builders. When the Governor’s Energy Office grant expires in June, the HBA will form a non-profit organization under the HBA umbrella. With a monthly board of directors’ meeting and a large ad campaign to promote Energy Star, the program will help

Colorado Builder Forum

May/June 2011

The site selected was in a location in Colorado known for expansive soils. To the Contractor’s surprise, the soils engineer predicted only 1- to 2-inches of heave for the build site. The structural engineer designed a spread footing system with a concrete slab-on-grade, a design the Contractor thought was inappropriate for performance on the soils in the area. The civil engineer did not design with a 10 percent fall away from the home. The architect’s plans lacked detailing at critical junctures of building materials and façade types.

Creekside, by East West Partners. View is from Speer Blvd. Courtesy HBA of Metro Denver

the HBA to promote its Energy Star builders. “Our board members didn’t see any down side to it,” she said. Most Energy Star builders are also members. But if not, we can use it to approach them as a membership tool.” The HBA’s home show was a successful one this year, where Weber has been told vendors got some really good leads. “And that’s what I like to hear,” she said.

Eagle Valley and Mountain to Mesa Home Builders associations Sue Hibbs is executive officer of both Mountain to Mesa and Eagle Valley Home Builders associations. Because the Northwestern chapter covers such a big territory, the Mountain to Mesa Home Builders Association formed its own chapter two years ago. “It’s a crazy story,” Hibbs said, “to go ahead and come out on your own in this economy.” Yet the 50-member chapter, which covers Pitkin and Garfield counties, “came out and went head long into a bunch of really great programs,” she said. One of those programs, the Green Building Symposium in Aspen, has been very well received. Another pairs the HBAs and markets their builders to prospective buyers throughout the country. For two years, Hibbs has produced the annual Mountain Builder magazine, which had a distribution of 60,000 this year; 50,000

May/June 2011

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were inserted with the holiday edition of Mountain Living magazine, while the balance are distributed through City Markets, as well as the Eagle and Aspen airports. It’s also on the web as a flip book: m2mhba.org “This project has a lot of energy and excitement,” Hibbs said. “Our first year, we had a partnership with Homes & Land magazine. This last year, we partnered with Mountain Living, which has a country-wide distribution.” The magazine has been a hit — and a revenue generator for the HBA. After the first year’s issue, Hibbs was inundated with companies that wanted to advertise in the current issue. The magazine has editorial content, as well as a membership directory for both HBAs. Hibbs has heard from advertisers that they’re getting calls from the publication. She’s found that most of her members are interested in getting together with one another. They also like the mixers, “where they’re getting their names out there more than in the past,” she said. “They want to go where they can meet more people.” To give them what they want, she’s put together golf tournaments with the two chapters together. And she’s doing the first Parade of Homes, which will be in conjunction with the Home Show in Snowmass this year. “We’re having great response to people who want to attend the Parade,” Hibbs said.

Concerned about how the home would fare on expansive soils, and wanting more detailing on the façades, the Contractor decided to get a second opinion. A design review by a qualified engineering firm revealed several deficiencies in the design. The engineering firm offered recommendations before construction began, helping to avoid problems during construction and after the home was built.

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Solterra Community, Carma. Courtesy HBA of Metro Denver

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Solterra Community, Carma. Courtesy HBA of Metro Denver

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Highlights and Options: Solterra Community, Carma. Courtesy HBA of Metro Denver

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Even with the slow economy, her chapters are philanthropic. They’re hosting a June charity golf tournament in Eagle, where some of the funds raised go to a scholarship for high school students who are entering the trade. “We think it’s important to stay involved,” Hibbs said. “The more involved our members are, the better the organizations are. The HBA provides an important service and we hope that our members will stay involved. We hope those that have dropped off will get back involved when their situation turns around again.”

Summit County Builders Association Where other associations have seen dramatic drops in membership, the Summit County Builders Association has only seen a slight drop. With 200 members at its peak, Executive Officer Jane Dvorak said that the association has only seen a seven or eight percent drop: 187 members today. Her members’ key concern is getting financing for clients who want a new home in her territory: Park and Summit counties. “We do see some new construction, but not at the level we saw several years ago,” Dvorak said. “We’re seeing a great deal of remodel projects, yet the scale of tha tis significantly less than the homes that were being built. All of that trickles down to the other subs who don’t have work, because homes aren’t being built.” Another issue builder members face is the fire sprinkler system requirement— for a different reason than most builders’ concerns. Dvorak explained that many of the homes built are mostly on wells. “Maintaining the kind of pressure that’s required is a difficulty, so it’s an issue for the homes to have adequate water supply.”

May/June 2011

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Solterra Community, Carma. Courtesy HBA of Metro Denver

The HBA has been discussing the issue with local fire departments and officials about the requirement. To date, it has not passed. “So far, it doesn’t seem to be something that is going to be required across the board,” she said. “It’s a water supply issue. When you’re running off wells, trying to maintain a water pressure, it’s not quite the same as when you have big pumps that come from a municipal supply.” To help members out, the HBA has implemented a dues payment plan, spread out over several months. She’s forwarding job opportunities on as she receives them. The HBA is also promoting members through its web site and created its “Stick with a Pro” campaign, a magnet that’s distributed throughout the community, with the HBA’s web site as a source for builders and contractors. The recent Mountain Home & Outdoor Expo “was a huge success. We sold out the venue and a lot of people have signed up for next year’s event. The people who attended were actually out to get something accomplished. The way I look at it is if you don’t keep your name out there, people aren’t going to know you’re still in business.” If she had a crystal ball, Dvorak said that hers indicates the economy will turn around. “We are in a slower downturn than other parts of the state, because of the resort economy,” she said. “We tend to be quicker in the turnaround than other parts of the state. I foresee we will see a turnaround, not as quick as it’s been in the past. But I foresee that we will see an upturn in new construction, probably in late next year and into 2013.” Until then, she plans for the HBA to continue to be the resource for reputable and educated builders and contractors. She’ll also continue to work with local governments

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Gener al Contr acting to keep legislation in check. More importantly, “as HBAs, we need to be sympathetic and do what we can to help our builders, our members stay viable. Trying to keep everybody’s spirit up is probably the biggest challenge we have. Attitude is everything; choose a positive one.”

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Home Builders Association of Metro Denver Covering Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, and Jefferson counties, the HBA of Metro Denver has weathered its most terrible storm yet, and according to vice president of Governmental Affairs Kim Calomino, the worst is behind them. “In terms of membership, our numbers are significantly down, probably by the same ratio as any other HBA in the country,” she said. “But we’re stabilizing. We’re closer to being at the beginning-to-rebuild stage than we have been before.” From a services-to-members perspective, however, the HBA remains strong. “For the most part,” Calomino said, “we’ve continued to deliver advocacy with a very high success rate. With a very large territory and multiple jurisdictions, our ability to protect members’ interests, save builders money and further relationships with policy and decision makers is as strong as it’s ever been.” The HBA holds many networking events, too, as it’s important for members to be with one another. And the Parade of Homes this summer will again be scattered throughout the metro area, as a way for the HBA to spotlight the benefit of new homes. “What we do, with our activities and benefits,” she said, “I think we’ve remained strong.” After 26 years under Roger Reinhardt’s leadership, Calomino observed that the HBA itself is going through even more change. “We’re creating a vision of the future. We have a new Executive Vice President, Sam Albrecht, and one of his lead charges from the Executive Committee is to plan for a leadership retreat — to talk about and jointly develop that very thing: A new vision,” she said. “Our top priority is to rebuild membership; it’s sort of tying in with this change. Whenever you have someone new, he’ll bring a new perspective, new ideas on taking a fresh look at how things have always been done,” Calomino noted. “It’s part and parcel of having a new leader. It’ll help us identify pretty quickly where our comfort areas are that shouldn’t be comfort areas. Change is good. Scary, but good.” Members are most concerned about the impact of regulations and fees. For example, if a municipality is going to increase its impact fees, Calomino said that builders are pushing for a delay or a staggered phase-in process — relief — from particular regulations. The HBA wants to be part of the environmental policy discussion, along with local code adoptions. Like other HBAs around the state, Calomino said, “We want to make sure those fire

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sprinklers don’t make it in during any time in the future, because it’s a huge cost,” she said. “That’s not a cost that can be recouped in the sales price.” The HBA has revitalized a network of eight to ten coordinating committees to revitalize the community element of the advocacy agenda. “It went into hiatus, and this year, we’ve revitalized our coordinating committees,” she said. Through coordinating committees, builders have more organized face-to-face, two-way conversations with leaders in a particular community — whether it’s monthly, bimonthly or quarterly — to discuss the more mundane issues. Looking ahead, Calomino observed that the industry will need to focus on water much more than it has. “For the housing industry, we’ve fought our battles. You go through a drought, the neighbors come out with a pitchfork and say, ‘No more homes.’ I don’t think it’ll be the same flavor, though, as this decade continues to 2020: The call for more regional use for water, transfer of water, water use, water conservation. Every time the availability of water becomes an issue, the industry gets dragged into it. We’ll grapple with those issues and deal with the relationships we’ve developed and demonstrate that we’ve already dealt with it.” She added that members’ continued involvement in the HBA is what’s going to keep the industry strong. “It’s important that members stay as members,” she said. “If you sat back and saw a future without an HBA, I think it would be a pretty sobering thought. Your HBA is faring however its faring, in part, because of how you’re helping it to fare.”

Housing & Building Association of Colorado Springs While membership numbers have dropped from 850 to 500 members, financially, the HBA of Colorado Springs is doing very well. Covering El Paso County, Renee Zentz, executive officer of the HBA, said, “Our members really

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get that this is the most important time for an association. This is when associations make their market. We have great leadership in place and this is the time to make it better for the long term.” Members are loyal to the industry and to one another. “The HBA Colorado Springs is truly a community and come to one another’s aid,” she added. “We had a political election where our whole slate was elected that we endorsed. It was amazing how this group came together for that.” It hasn’t been without setbacks. For example, the HBA lost its Home and Garden show venue, which is one of the association’s biggest profit centers each year. Member Norwood Development GAVE the HBA prime space, and the show went on, so to speak. But a more permanent place needed to be arranged. The University of Colorado at Colorado Springs owns a big piece of property in an area that’s being redeveloped. Zentz inquired about using that building as an event center. The UCCC got a $3 million grant to renovate the building. In September, the HBA will be in the event business as the Colorado Springs Expo Management, LLC. “It’s in a really cool part of Colorado Springs,” Zentz said. “It’s not taking away any money from students; it’s

in a real estate fund.” With more than 50 events without a home when the previous event center was closed — and 50,000 sq ft as part of the first renovation — Zentz is already booking both local and national events. The HBA has worked with the regional building department, so builders receive a credit every time they pull a permit. “The department had revenue and decided this would be the best way to service our community,” Zentz said. “If it helped the builder to build a house, it would reverberate through the community.” With $350,000 available to credit builders, Zentz said, “one builder got a $43,000 credit.” When the regional building department revamped from 2003 to 2009 residential buidilng code, the HBA worked with it to remove the fire sprinkler system requirement. The HBA also was instrumental in amending dozens of codes that save buyers thousands of dollars. “In all, 50 people contributed to the effort,” Zentz said. “We started working on it two years ago, then worked with the regional building department and it sailed through with no opposition.” With 37 entries this year — a 54 percent increase over last year — the Parade of Homes is on track for another success. “The Parade of Homes is THE best thing to market

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in a community,” Zentz noted. “They realize that and that’s where they’re putting their dollars first this year.” Moving forward, Zentz has the HBA’s sights squarely focused on political or regulatory issues that affect the price of a house. “Until used inventory prices can compete with new inventory, that’s when this industry gets back in the game. Our job is to keep the price of building a house as affordable as possible, so we can compete with used inventory — and educating the public about how much better the new inventory is than used inventory.”

Pueblo Association of Home Builders As you can see, it’s banding together and getting back to basics that gets people through a rough patch. And while Cassie Gallina, executive officer for the Pueblo Association of Home Builders, said that membership and assessment numbers could be better, “the HBA is faring well.” A good attendance at the Home & Garden show, combined with an expected good Parade of Homes will mean the association will reach its goal by the end of the year. One of the bigger issues builders face there is getting an appraisal that closely matches what they’ve put into a home. “It’s something that has to change at the national

level,” Gallina said. “It’s really hard for us to change that at the local level. What the HBA has had influence on is addressing the fire sprinkler code change. “We worked months on that to get it resolved. City council voted to remove it from our code and the county commissioners are reviewing it right now,” she said. “It looks like we will be successful in that.” The main issue for her members, however, is staying in business. That means offering plenty of opportunities to network and reach out to the community. They hosted a nail-driving contest at the Home & Garden show. There are nine homes in this year’s Parade of Homes. And members have golf options, because “a lot of our members are still excited about golf.” In addition to a glow golf tournament, the HBA has formed a golf league, where members play 18 weeks of golf at the Pueblo Country Club. “There have really been some good relationships formed through participation of that,” she noted. Less formal than a traditional dinner, the HBA hosts a happy hour — whether at a member’s model home or showroom — “where people can come and go as they please, to network,” she said. “We always have something going on.”

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Colorado Springs mom of two finds herself living in her car Keri Ellen Gossage didn’t see it coming. The newly separated mother of two had moved with her children out of the home they shared with her soon-to-be ex-husband in October 2007 and into a farm house near Colorado Springs. A teacher’s aid before becoming a full-time mom for the previous six years, Gossage found a job and began putting the pieces of her life together. Her husband wasn’t paying child support; she had gotten used to that and was adjusting to it with her new life when the tornado hit: The farm house she rented went into foreclosure and the owners skipped town. With them went her month’s deposit and rent, leaving her with no place to go. “My kids and I stayed here and there with friends, but mostly we stayed in the Suburban,” she said. “We stayed with a girl I worked with until Thanksgiving. She had family coming in and said, ‘I’m sorry.’” So Gossage moved her family back into the Suburban.

HomeAid helps build ten homes for Partners in Housing

For Partners in Housing in Colorado Springs, Builder Captain Beazer Homes built this triplex in 2006.

HomeAid Colorado does more than build houses for the transitionally homeless It helps families own a piece of the American Dream: A home You’ve heard over the years about how HomeAid Colorado helps provide housing for the transitionally homeless. No doubt you’ve seen how many people HomeAid has been able to help, through its partnerships with a variety of non-profit organizations in the state. It’s still the charity of choice for the Colorado Association of Home Builders, and with good reason. As of January, HomeAid Colorado had built 40 housing units, with 264 beds, representing more than $2.8 million of in-kind contributions of labor

May/June 2011

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and materials from the building industry to serve Colorado’s homeless. Its first Volunteers of America home was finished in May and it has two more on the boards yet this year. Those are some impressive numbers. But have you ever wondered what happens to the people who have lived in the homes HomeAid has helped to build? Do people actually move on to buy homes, or do they fall back into homelessness? The answer to the second question is, “Yes” — and this story is about two families who pursued the American Dream: Home ownership.

years, our cumulative average is a 65 to 70 percent success rate,” he said. The nonprofit owns 70 transitional housing units that are specifically for homeless families with children to live in for up to two years. It also owns — either outright or in partnership with other organizations — 109 affordable rental units. To date, HomeAid Colorado has worked with PIH to build ten transitional housing units through two projects. In 2003, Colorado Springs builder captain Robert Scott Enterprises built two duplexes, where each of the four units had three bedrooms and two baths, on one lot. Beazer Homes built the second project in 2006, which consisted of six three bed, two bath town homes — each configured as a three-plex — on one large lot that was donated by the city. Stampf said that 41 families, including 117 children, have lived in the HomeAid-built homes.

Gossage gets a temporary with Partners in Housing Gossage discovered that PIH would be taking applications January 1. So she got everything ready and made sure her application was waiting by January 1. She had an interview on the tenth and by January 27, 2009, she had moved in to PIH. “That was quite a bit of time for the rug to get pulled out of us,” she observed. “I had been a stayat-home mom for six years. I was on unemployment that summer (2008); at $300 a month, it was barely enough to put gas in the car and food on the table. It was definitely a tough time.”

Another coworker also worked with Partners In Housing in Colorado Springs. For 20 years, Partners in Housing (PIH) has provided homeless families with children the opportunity for self-sufficiency through supportive services and transitional housing. To do that, homeless families can live there for up to two years, during which time they participate in intensive supportive services, including case management, budget counseling, life skills training, even professional therapy, when needed. PIH closely “partners” with the families there to help them improve their lives. The non-profit organization helps its partners find permanent housing and sustainable employment, further their education, improve family stability and gain self sufficiency. According to Frank Stampf, PIH’s executive director, roughly 750 homeless families — about 2,000 family members, of which two-thirds are children — have been For Colorado Homes & Families in Arvada, Builder Captain KB Standard Pacific built this housed through the PIH duplex, which was featured on the TV show, Extreme Makeover: Home Edition in 2004. program. “Going back 20

Colorado Builder Forum

May/June 2011

giving back

Help people get back on their feet

Two years later, Gossage is buying a home She also got a lot from the classes there, which, among other things, taught her how to budget, cook healthy meals, interview. And while Gossage said that people think, “Everybody knows how to budget, cook healthy meals for your family, the reality is you don’t.” For her, the best thing about the program’s classes is that she had to hand in a budget sheet and meet with a budget counselor. Gossage graduated from Partners in Housing in December, a few weeks shy of two years. She’s teaching now and is engaged to be married. The couple is in the process of buying a five-bedroom home in the Colorado Springs area.

She’s now on board and gives back She also sits on the PIH board of directors and plans to give back by volunteering this summer with PIH’s donation intake area. At PIH, “I learned to value and have respect for myself and not get myself into situations where I can’t stand on my own two feet,” she said. “Along with budgeting, the learning self respect and valuing myself were the most valuable things that I learned.” Most of all, the 37-year-old mother wants her children to understand the value of education and going after your dreams. Her daughter, now 12, wants to go to college and her now-nine-year-old son wants to join the military and go to college after that. “The way I see it,” she explained, “God puts you in a path for a reason — not to lay down and cry, but to finish school and be smart with your money. What PIH’s generosity provided is not

May/June 2011

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If you talk to Executive Director Laura Brayman, you’d think HomeAid Colorado is on a roll. It seems that while times have become tough for many, home builders and their trades are still as generous as they have ever been. At its second annual breakfast in April, HomeAid netted $40,000, which, Brayman said, “is quite a bit better than last year. That all goes into our housing development program: Operations for new projects, get current ones going and facilitate builder captains.” Two more fund-raising events are scheduled Blair Griffith, our state's current Miss this year. On August 18, Colorado, and her mother, recently became homeless, and shared her story HomeAid will have a wine at the 2nd Annual HomeAid Breakfast. tasting event at the Osmosis Art Gallery in Niwot. For the athletic-minded philanthropist, HomeAid will host the second “Let the Good Times Roll” bowling fundraiser on September 23, where Brayman said, “you can sponsor a team or buy tickets as an individual.” On May 24, HomeAid dedicated its first home women’s veteran house for the Volunteers of America, with builder captain Wonderland Homes. “McStain and KB Home donated all the furniture for this home,” Brayman said. The second home will start in late August/early September with New Town Builder as builder captain. The third will start in December or January with Berkeley Homes as builder captain. “For the next two,” Brayman said, “we’ll need donations of labor and material. We would love it if we could furnish these two, too, even towels and dishes. We’d love to hand them over with everything.” She’s optimistic about next year and beyond, too, and finds herself in a very unusual position. “Given the economy, we’re getting over a hump,” she said. We certainly have a backlog of projects,” which is part of her usual fare. What’s different though, is “we have a backlog of builder captains for a change,” she observed. “People like working with us and want to donate. That’s a nice change. It’s easy to find a project; to have a builder ready to go is a refreshing change.” If you can’t take part in the fund-raising events, check out the HomeAid website for options on how you can get involved or help: www.hacolo.org.

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When PIH accepted her, Gossage moved into a home that HomeAid had helped build. While there, Gossage pulled the pieces of her life together. She returned to school full time, finished her bachelor’s degree and got her elementary teaching certificate. “It’s that crutch you need when you have to put your nose to the grindstone and do it,” she said. “Rather than do all right for a while, stumble, break your nose and do it all over again, I needed to do something for my kids. Teaching isn’t the best paying profession, but it gets me out of the hole.”

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a hand out for people who are going to sit on their keisters, but help out of a nasty situation. I knew I had goals and dreams, and it gave me the opportunity to reach my goals.”

Young family gets a rough start Sometimes in life, there are do-overs. You do something once and for whatever reason, you have to do it all over again. It’s what happened with Dave and Stephanie Sanders. In early 2000, Dave — a Denver native — wanted to make a life in the mountains, so he moved his young family to Pagosa Springs. A construction laborer his whole life to that point, he found work wasn’t very steady. So they moved back to Denver, and lived in his parents’ basement, which didn’t work out. That’s when they found themselves living in their van for about a month. “Our babies were small then,” Sanders said, “and we slept on the floorboards.” While staying with church friends, the Sanders family discovered Colorado Homeless Families, which welcomed them to its program. In Arvada, Colorado Homeless Families serves families with children who are the “new poor” (homeless for the first time) or “working poor” (low wage earners who cannot keep up with the rising cost of living, including housing).

Colorado Homeless Families opens doors to Sanders family For 24 years, Colorado Homeless Families (CHF) has been helping families to get back on their feet through education and housing on the campus for up to two years. Families are required to attend educational seminars and support groups, as well as work or attend school. The 60 to 65 adults on campus volunteer at least five hours a month. Founder and Executive Director Connie Zimmerman said, “We won’t take their checks until we get their community service.” That service can include working in the office, mowing the lawn, picking up trash, painting, taking care of the food bank or working in the warehouse. If someone doesn’t have a car and a neighbor gives a lift, the neighbor gets credit. “Homeless families work together,” Zimmerman said. “We won’t take in victims, the ‘poor me’ types. We offer the initiative for people to help themselves. They know they can do something, their lives will count and make a difference in the world.” Since 1987, CHF has helped 480 families through education and shelter of its nearly 60 homes. Of those, 370 families are completely self sufficient and 127 have bought

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property. Of those, HomeAid Colorado has helped build 13 homes for CHF. In 2003, builder captains Village Homes and Beazer Homes each built a duplex for CHF. As part of an episode of ABC’s Extreme Makeover: Home Edition, builder captain Standard Pacific Homes built a third duplex. In December, builder captain KB Home finished seven of its model town homes for CHF. All land development was donated by Centre Communities and Steve Prokopiak.

A year after moving on, Sanders family returns for help After staying at CHF for two years, Sanders had a good construction job, with insurance, and the family left the CHF campus. A year later, it happened again. “We thought we were going to be good,” Sanders said, “but I lost work.” They had incurred a lot of medical debt, due to pregnancy complications, and while the union promised Sanders work, “I didn’t get it and six months later, I’m still looking for work.” The family of now five was once again homeless. Sanders went back to CHF, talked to Zimmerman, “and she was gracious enough to open her doors to us again,” he said. After the family moved into the Village Homes-built duplex, things started to really turn around for Sanders. Construction

work picked up, he had a good job with insurance and he began saving money for his American dream: home ownership.

Back on feet, the Sanders family buys their home A few months before they were to move out, they started looking at houses. “We didn’t want an apartment or a rental; we wanted to buy,” Sanders said. After saving money with a healthy down payment, the family has been living the American dream for six years. “I grew up in Old Town Arvada; I wanted to raise my family here and now I’m doing it,” he noted. He also owns his own local trucking company now. “CHF is one of the best places we ever really lived. It felt like a community family. That’s the kind of atmosphere she created. And now we’re at a place where we can support it, so we’re doing that.” He added, “A lot of times, things happen to good people and it’s a real blessing to have someone by your side to support you through tough times. CHF is certainly an advocate for families. I know their hearts are in the right place and they have a heart for those whose spirits are crushed. Going through it the first time, and then finding myself back in a place where we needed help again — and being able to rely on them again — meant everything to us.”

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Colorado Builder Forum

May/June 2011

member spotlight

by Kim Jackson

So long, farewell, it’s time to say goodbye

After 26 years at the helm of the HBA of Metro Denver, Roger Reinhardt steps down and turns his focus to what lies ahead in “retirement”

May/June 2011

www.hbacolorado.com

We all have our own “Book of Life.” Some changes in our lives are so subtle, we hardly notice the transformation enough to call it a chapter. Others, though, often marked by a significant event, write themselves. And after 34 years of serving and representing home builders — first in Tulsa and for the past 26 in Denver — Roger Reinhardt has finished an important chapter in his life: that as executive vice president of the Home Builders Association of Metro Denver. Before he turns the page and begins to write a new one — dare he title it “Retirement?” — I recently asked him to recap his career.

A career filled with achievement You may know Roger, even really well. And after 26 years, I thought he’d quickly recount all the accomplishments the Denver HBA has achieved during his watch. Human nature, right? But he didn’t. I tried another angle. While he was very conversational about it, Reinhardt didn’t budge; he didn’t want to leave something out and hurt someone’s feelings. That’s classic Roger Reinhardt. Personally, though, Reinhardt is proud of what he’s accomplished — and it shows. “After 34 years, unless you’re half dead, you can be recognized by almost anybody,” he joked. “I probably have 100 pounds of plaques and commendations.” Yet some of those outward symbols of achievement are close to his heart. Born and raised in Chicago, he left the Windy City for the Coast Guard in 1963. When he returned from the service, he spent a short time as broker/ owner of a residential real estate firm before going away to college. He was graduated in 1978 from Oklahoma State University with a degree in Urban and Regional Planning. That year, he went to work as the executive vice president of the Tulsa Home Builders’ Association. In 1985, Reinhardt was named Person of the Year by the Oklahoma Association of Home Builders. He moved to the Mile High City in 1986 to serve as executive vice president of the Denver HBA. Once there, he served as president of the National Association of Home Builder’s Executive Officer’s Council twice — the only person to have done so — in 1986 and again, in 1987. From 1987-2011, he was a trustee on the National Housing Endowment, and held the office of Treasurer for the NHE’s Board of Trustees. From 1992-2009, Reinhardt served on the 6th Congressional District’s U.S. Military Academy Advisory Board, and helped interview candidates for all the military academies. Reinhardt served as a delegate from the USAID for International Development to Poland in 1995-1997, to organize home building associations in holocaust Poland.

“That was right after solidarity was effective in freeing Poland from communist rule,” he noted. “The government and USAID asked me to join a group of people who were organizing the home building industry in Poland. I had a very strong relationship with NAHB and a very good reputation as an individual who would be effective in setting up organizations like this. I spent a lot of time over there.” In 1996, Reinhardt was presented the Seldon Hale Lifetime Achievement Award by NAHB. He served on the Board of Directors for the St. Joseph’s Hospital Foundation from 1996-1998, and served as Secretary in 1998. He received the CAHB President’s Award in 1999 and served on CAHB’s Board of Directors for the past two years, representing the executive officers. The Denver Metro HBA created the Roger Reinhardt Volunteer of the Year award in 2000, and bestowed its first to him. “They wanted to recognize people who contributed almost on an exemplary basis in the local association,” he explained. “They created this award and every year, they give it to an individual who the committee deems as being the consummate volunteer. After my departure, I hope they’ll keep it in place. It’s a bit of a legacy for me.” Reinhardt added, “From a community service and an industry activity of awards and honors perspective, those are the things that are probably more meaningful to me than anything. It was the meaning of life for me.”

HBA’s many firsts became industry standards And while he was unwilling to talk about the HBA’s accomplishments during his tenure, others were eager to discuss them. For the past 17 years, Vice President of Government Affairs Kim Calomino has been at the HBA and observed, “There have been a lot of wins and innovation” while Roger led the HBA. For example, “it was under his leadership we established Home Safe, the first voluntary partnership with OSHA in the nation. It was under his leadership we created and ran BuiltGreen” (the largest volunteer green building program in the country, according to Reinhardt). “We moved into the arena of dealing with the regulated utilities in very positive and productive ways that I think were completely not attended to before his tenure,” she added. “We fought the good fight with Xcel Energy and secured hundreds of thousands — if not millions — of dollars back to our members. We launched many voluntary programs that were the first of their kind in the nation and beyond. Roger’s leadership is what has made the organization as strong and respected as it is in the metro area and at the national level.”

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Calomino added, “His kind of leadership, his understanding of the industry, his approach to understanding the possible and making it happen is what has really made this a great association.”

Giving staff reins led to innovations When Vicki Pelletier joined the HBA 13 years ago, the vice president of Operations observed that the Parade of Homes was basically, “a piece of ground with a trailer in the field, surrounded by parking spaces. He’s allowed me to take that from an ugly cocoon to a beautiful butterfly. He’s allowed me — and all of us — to really blossom, as far as our capabilities are concerned, and what we can do with our jobs. He allows you to take your ideas and run with them.” For example, with the industry reeling from the past twoand-a-half years’ economic blow, attendance at the HBA’s councils has been hurt. Pelletier created the Council Board, which is designed for all councils to meet in one day. She also combined events, such as the Bar Award and the Care Award into an awards banquet. Roger “helped with bylaws, legalities, national networks,” Pelletier said. “I’ve worked for associations for 25 years — both huge associations and little teeny ones with three staff persons. Not at any one of them was I allowed to do what I’ve done here. He values our thoughts, our ideas and our

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energies. He does not take personal credit for anything, because he allows us to be who we are today. Management skills like that don’t come around every day.” HBA President Mick Richardson has known Roger since 1986, “but I didn’t really know Roger until about the mid-‘90s, when I got involved with the HBA,” he said. “With Roger at the helm, we’ve been fortunate to have one of the premier HBAs in the country. With Roger’s leadership and a great organization, all the members have benefited, either directly or indirectly, from his leadership. He’s a gifted person, especially in dealing with all the issues and people you have to deal with. He’s always done a good job of balancing it all, which has obviously helped maintain our association, even in the hard times — and we all know we’re in hard times.”

Tough times lead to new opportunities Over the past 26 years, Reinhardt has seen both sides of the coin in the industry more than once. “When the times were good, they were very good for all of us,” he said, “for the association, the industry the members.

The down turns, although they are very painful in many respects, are something that we’ve learned to live with and to expect.” And while he remembers the downturn in the late ‘80s to early ‘90s as bad times, “this most recent downturn is the one that has been more challenging for me than anything else. It’s been more prolonged and has taken a greater toll on our industry and the membership.” Yet, he added, “this downturn will literally redefine how home builders and those people associated with this industry do business going forward. There’s going to be a new reality, a new norm when we finally emerge from this downturn. The unknown associated with what that’s going to be like is very challenging, not only for the industry, but for the association, as well — because it’s going to have to adapt to the new reality and the new norms.”

HBA’s people are like family It’s why HBAs are so important. “The HBA literally is the face and voice of the organized housing industry,” Reinhardt said. “Our primary goal is to preserve,

CAHB Calendar 2011 June Conference Committee

Thurs

6/16

9 am

Government Affair Committee

Thurs

6/16

9 am

Conference Committee

Tues

7/12

2 pm

Editorial Board

Thurs

7/14

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4 pm

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protect and advance this industry. And the HBA has an enviable record of being very effective in terms of advocacy, education, information dissemination and networking. People who participate in this organization, to a large degree, will tell you the return far outweighs the investment. There’s strength in numbers. We ride this great wave of credibility in the political and regulatory environment and we do things that truly make a difference for our members. I always say, ‘Membership doesn’t cost; it pays.’ We could probably, through the course of time, calculate from a monetary perspective, our effectiveness. We’ve got a strong membership base and we’re darned good at what we do.” This passion, loyalty and commitment to the HBA will be tough to let go. “The HBA has represented far more than a job to me for 26 years,” Reinhardt said. “This has been something I have come to love and cherish. From the industry itself to the individual people, I probably could not have asked for a more rewarding experience. Many of these people have become lifelong friends and they will be something I will cherish as a result of my involvement here in Denver. “To me, the staff are more like family than people who have worked under me as an employee. The current staff

will always have a very special meaning to me. They have been tasked like no other staff and they’ve given sacrificially to the HBA and supported me in ways I could not have imagined or expected. And I will miss them greatly, because once again, these people are more like family.

He also looks forward to spending a lot of time with his nine grandchildren — and learning to play bridge. “I’d like to take full advantage of the social and cultural activities within the community.” And, he added, “That’s on my bucket list, too, trying to find a partner.”

Travel, golf, grandchildren — and the bucket list

All the best to you, Roger

Just as every chapter has an ending, there’s also a beginning. And he’s looking forward to starting this new chapter. “Immediately following my departure, I will take some well-deserved time off, specifically to rest and relax, but also to gain some perspective,” Reinhardt said. He’ll continue with some of his volunteer work and professional endeavors. He’s also going to travel and play some golf. “There are probably some other items yet to be defined on my bucket list, but after I’ve taken a little time off, there will be some clarity there.” He plans to stay in Denver and maintain ties with the industry and his long-standing friends. In fact, he said, “if somebody invites me back to play in the HBA golf tournament, I’m sure I’ll accept that invitation and play. I’m certainly not going to be lacking for things to do.”

As Reinhardt turns to face his future, Richardson said, “I wish Roger well. I hope he truly has the ability to enjoy life after the HBA. He well deserves retiring and I really can’t say how fortunate we have been to have someone like Roger for 25 years.” Calomino echoed his sentiments and added, “Roger is certainly dearly loved by all the membership, his volunteers and his staff.” “Words escape me when it comes to describing what a wonderful man he is,” said Pelletier. He’s been a good friend to me. With his leadership skills and the knowledge base he has grown over the last 26 years, he is definitely going to be missed.” You could say Reinhardt has left some pretty big shoes to fill. Yet Pelletier said it best: “You never fill shoes; you buy a new pair.”

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marketing

by Paula Huggett, MIRM, CMP

E-mail essentials: Builder marketing that works The relatively new world of Internet

How will your e-mail attract buyers?

marketing offers many paths; two are absolutely essential for today’s home builder to follow. Accordingly, our discussion of successful e-mail marketing builds on the foundation of your on-line presence: A professional-grade web site. Concentrating on e-mail marketing without first creating an engaging, well-crafted web site will cause virtual visitors no end of frustration, since their expectation is to find, search and experience your new home content easily on your company’s web site. Company commitment to e-mail marketing is also critical to success. Research by MarketingSherpa LLC1 shows that half of all organizations are in a transition phase relative to e-mail marketing.

Relevancy and visual appeal of content. Is the content interesting to the recipient? Does it give them more than just your web site? Are there easy-to-follow ways within the message to get more information? Would YOU open it?

Trial Phase

Transition Phase

Strategic Phase

Organization does not have a process or guidelines for performing email marketing.

Organization has an informal process with a few guidelines they sporadically perform.

Organization has a formal process with thorough guidelines they routinely perform.

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Transition phase

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inside.” Your subject line should engage your prospect’s imagination and create the desire to read more. Make your subject line compelling, without being cute or overly clever. Avoid all caps and excessive explanation points.

Get more clicks and customers

E -mail address. Be consistent with your sender e-mail address. There’s always the debate over whether it should it be a personal e-mail address or a generic “info@” or “sales@” address. Most important: The “From” address contains the name of your company or community and is used consistently throughout your marketing. Always, always, use a corporate e-mail address. Don’t use a generic e-mail address.

According to MailChimp3, a company that sends out 40 million e-mails a day, the average open rate in the real estate industry is 18.48 percent, and the average clickthrough rate is 3.44 percent. Improving your e-mail outreach and subsequent sales conversions involves diligently monitoring and strengthening these elements:

Frequency. Research by marketing publisher MarketingSherpa1 shows e-mail subscriber interest begins to disintegrate as soon as two weeks after the opt-in, as measured by the open rate. Within two months, the open rate typically falls by 20 to 25 percent.

How will you measure the success of your campaign? Test, track, analyze, optimize, resend. What do the key reports tell you about subject and topic interest and engagement from your recipients?

Since the goal of e-mail marketing is to nurture interested prospects, the frequency of communication should be often enough to maintain interest. On the other hand, too many e-mails can cause spam issues, as well as create a negative impression of your company to potential home buyers. Paula Huggett, MIRM, CMP is vice president of Client Services for The Bokka Group, an industry expert in on-line lead generation, prospect cultivation and sales conversion for builders and developers. For more info: www.bokkagroup.com, 303-573-0046 x 112 or paula@bokkagroup.com. © Copyright 2000–2010 MarketingSherpa LLC, a MECLABS Group Company.

Courtesy: SilverPop.

List management A typical list will lose one third of its members each year. Bounces + spam complaints + unsubscribes = minus 2-4 percent a month 25 to 80 percent of your list is inactive. Subscriber has not opened or clicked in specific time frame (i.e., 6, 12+ months) E-mail Marketer quote: “We got rid of the deadbeat e-mail addresses; everything improved, and the spam companies leave our e-mail alone.”1 Don’t keep sending to prospects who aren’t opening your e-mail.

P A T V L I N A G H P C e r v a n r e e S D a e s O h i n t c e 19 A erving 5 5

Time of sending Source: MarketingSherpa Email Marketing Benchmark Survey Mothodology: Fielded Sep 2010, N=1,115

Campaign strategy and creation Effective e-mail marketing is not occasional messaging about inventory homes to Realtors® and prospects. Best practices reveal that planning, execution, tracking, refinement and relationship management are the cornerstones of high-converting campaigns. Here are some key points:

Who do you want to reach? Lists should not be purchased or borrowed. Prospects are those who have signed up on your web site to receive updates relating to your company

May/June 2011

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Test different times for your list. Segment your message, send out at different times and see what your results tell you. Typically morning mid-week tend to result in more engaged recipients, but test, refine and repeat, so you continue to improve.

Content Logically lay out your message to provide ease of navigation between text and images. Make the message a quick read; you only have a few precious seconds to capture your prospects’ attention. Your calls-to-action should be prominent and attractive. ubject lines. MailChimp3 advocates, “When you write S your subject line, don’t sell what’s inside---tell what’s

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building by the law

by Rebecca W. Dow, Esq

Consequences for developers, builders and nonprofits

Residential real property transfer fee bill restraint on a home owner’s ability to sell the home. Certain types of transfer fees were exempted, as outlined below. At press time, the bill had not been — although it was expected to be — signed into law. As enacted, it will prohibit recording of all transfer fee covenants (unless exempted) Rebecca Dow on residential property in Colorado after July 1, 2011. For all residential transfer fee covenants already in place, the bill provides that payees (i.e., developers or a nonexempt entity or person) of any transfer fee must record a specific notice of the covenant before October 1, 2011. If an existing payee fails to properly record the notice before then, the covenant is rendered void and all future transfers are unencumbered by the covenant.

Bill provisions

A bill to prohibit transfer fees from being imposed on residential property (SB 11-234) was introduced in April to prevent developers and land owners from imposing transfer fees on residential purchasers. Transfer fees have been used by developers to pay for infrastructure, parks, transit improvements and to add value to a community, such as by funding home owners’ associations (HOAs) and non-profit organizations to promote open space, affordable housing, conservation easements and environmental covenants. Many communities have non-profit foundations funded with a transfer fee (typically half of 1 percent of the home’s price) that are used to fund community events, fireworks, schools, health programs and similar community-oriented programs. SB11-234 will prohibit residential transfer fee covenants on the basis that transfer fees are an unreasonable

P rincipal, interest or other amounts under a mortgage or deed of trust G overnmental imposed transfer fees Home owners’, condominium owners’ association transfer fees R ent or other amounts payable under a lease Non-profit organizations (IRC § 501(c)(3), (4) or (7)) provided the fee benefits only the community in which the fee is imposed or adjacent property E nvironmental remediation transfer fees “Home builder” exemption for payment of transfer fees (such as deferred lot purchase price, profit participations, lot premiums, etc.) provided no fee is payable by the purchaser of “residential improvements”

Consequences to developers, builders and non-profit organizations oss of transfer fees for developers with existing transfer fee L covenants that are not exempt and who do not comply with the onerous notice and recording requirements by October 1st. Inability to fund infrastructure or other improvements to a residential project by use of a transfer fee.

As enacted, the bill Prohibits future residential transfer fee covenants (unless exempted) after July 1, 2011. Any person or entity who records a new transfer fee covenant after October 1st, if it is not released after 30 days’ notice, will be subject to damages and other remedies. Requires that all existing payees of residential transfer fee covenants (unless exempted) record a specific form of notice with the county clerk in the county where the property is located prior to October 1, 2011, which notice must identify every property owner subject to such covenants based on a title search. Stipulates that any existing residential transfer fee covenant (unless exempted) for which a notice is not properly recorded by October 1, 2011, becomes void and unenforceable against any future property transfer. Allows for the owner of any property encumbered by a residential transfer fee covenant (unless exempted) to request a statement from the payee to specify the terms of the covenant. If such response is not received within 30 days of the request, the property owner may stipulate to that fact in a recorded affidavit. If that affidavit is properly recorded, the covenant will be void as to that property and all future transfers will proceed unencumbered by the transfer fee covenant.

Rebecca Wilcox Dow, Esq., is with Holland & Hart LLP and sits on the CAHB Government Affairs Committee. Reach her at rdow@hollandhart.com or 303-295-8413.

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Bill exemptions Non-residential property transfer fees Real estate brokerage commissions, title company fees

I nadvertent creation of an illegal transfer fee with business arrangements, such as deferred purchase prices, profit participations, marketing fees and lot premium arrangements currently used to defer a portion of the lot acquisition price, until the home is completed and sold to a home buyer. Non-profit organizations by law must provide a public function and it is not clear that any IRC § 501(c)(3) or (4) non-profit foundation in Colorado will be able to be funded with a transfer fee in the future, due to the bill’s strict limitation that its use must benefit the community and adjacent property. For example, conservation easement land trusts have used transfer fees to enforce conservation easements statewide. Affordable housing programs are often funded by transfer fees that may benefit more than the community (and adjacent property), subject to the covenants.

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May/June 2011

www.hbacolorado.com

Colorado Builder Forum

May/June 2011

finance

by Bryant Ottaviano

Buyer financing activity picks up How you can help your buyers — and make more home sales Well , the inevitable took place

Bryant Ottaviano 1st Mortgage Founder and CEO

April 6. The mortgage industry fought the good fight and received a stay by the appellate court, but only for a few days — and only until the judges read both parties’ briefs. In the end, the mortgage industry’s complaint did not carry enough factual information to have the temporary injunction overturned by the appellate court. It was an argument that had very little substantive value, and in my opinion, will not have any substantive value until the consumer starts to feel the impact.

More buyers look for financing options Over the last 45 days or so, there has been a tremendous pickup in activity by buyers exploring different options for monthly payments and financing scenarios. I thought we could use this issue’s article to help you acquire some additional sales by using some of the “work arounds” that have been successful on our end.

Contingencies We have had a multitude of buyers who are not able, or who do NOT want to sell their current home, due to current market conditions. Yet they still want to purchase a new home. We have started prepping buyers for the inevitability of renting their current home. The issue with the renting solution is simple: you have to qualify for both homes, right? Not always. When building a new home, the timeline of construction affords us the opportunity to get the current home rented and use the rental income to help offset the current home’s mortgage payment. One disadvantage with this solution is the reserve requirement. Six months of reserves are required for BOTH homes if the buyer is using mortgage insurance.

Two FHA loans to one buyer Not possible, right? Wrong. Buyers are allowed to have two FHA loans at the same time if they can prove that their family size has outgrown the current home or are being relocated for their jobs. One extremely large issue with this route of attack is that the current FHA loan be at 70 percent of the current value of the home. This loan to value must be calculated by using an appraisal.

365-day locks Depending on when you are reading this, mortgage interest rates have come down into a range between 4.5 and

May/June 2011

www.hbacolorado.com

4.875 percent. I recently locked a custom home build in for 365 days at 4.875 percent, with no points or origination fees. There was a .5 percent lock fee to lock the loan for a year, but both the buyer and I thought the fee was very reasonable as an insurance policy to protect his payment and rate until April 2012!

Second mortgages “Combo loans” are starting to make a comeback. We have had tremendous success with eliminating the conforming mortgage insurance by adding the “piggyback” mortgage to the transaction. It has the possibility of saving your buyer thousands of dollars a year in monthly payment saving. FHA is now charging 1.15 percent for its monthly mortgage insurance charge. On a $200,000 mortgage, that’s $191 a month!

Conforming mortgage insurance Conforming mortgage insurance is starting its comeback this year, as well. The monthly payment requirements for conforming versus FHA is unprecedented. The additional required 1.5 percent with a conforming loan is greatly outweighed by the monthly savings in the monthly mortgage insurance payment. A good credit buyer (740 and above) can get a premium as low as .54 percent or $90 a month! That’s more than $100 a month in savings, compared to an FHA loan. We have also started using the single pay premium rates. This is where the buyer pays for the mortgage insurance premium up front at closing — and it’s a tremendous benefit to the monthly payment. However, it’s not the most cost effective; if both you and your lender contribute to the cost, it can be almost erased from the equation. A good credit borrower — 740 and above — can acquire a single pay premium on a 95 percent loan to value for 1.85 percent. If you and your lender each pay .925 percent, or $1,850 on a $200,000 loan amount, the buyer will not have, EVER, a monthly mortgage insurance payment! The solutions I discussed here today won’t satisfy every buyer who walks into your sales office, but knowledge is power and being able to accurately head off potential issues in the beginning of the sales process — or by offering up multiple solutions to the buyer — provides additional confidence and gives them additional motivation to move forward with the transaction. Bryant Ottaviano is the Founder and CEO of 1st Mortgages located in Littleton. For more info: www.1stmtgs.com, bottaviano@1stmtgs.com or call 303-798-6100.

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