Buildersoutlook2015issue4

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2015: issue 4

Parade of Homes 2015 Kick-off Event Sells Out The spring 2015 Parade of Homes opened on April 17 with the preview party event signaling the start of the two week Parade. Over 800 tickets were purchase to the sold out event. The evening, while a little cooler than normal for this time of year saw guests enjoy the newly completed Parade Homes that are fully furnished and decorated. The private party also included a catered meal and full complement of adult and non-adult beverages.

The show entrance was also glammed with the new red carpet backdrop, a colorful wall with the builders association and neeuhome.com logo’s prominently displayed. Guests were encouraged to take a picture in front of the curtain and utilize social media to send the word out that they were at the party.

See and Read More> Page 7

2015: Housing Recovery Slow and Steady Forecasters looking for pace to pick up next year Solid employment gains, attractive mortgage rates, a growing economy and pent-up demand will help keep the housing market moving forward throughout 2015 and into next year, according to economists who participated in yesterday’s National Association of Home Builders (NAHB) 2015 Spring Construction Forecast Webinar.

“This should be a good year for housing, buoyed by sustained job growth, rising consumer confidence that is back to pre-recession levels and a gradual uptick in household formations,” said NAHB Chief Economist David Crowe. “We expect 2016 to be even better, due to a significant amount of pent-up demand and an economy that will be entering a period of reasonable strength and consistency.”

Over the past seven years, Crowe estimates the slow recovery and uncertainty in the job and housing markets resulted in 7.4 million lost home sales. “While some of these sales will never take place, this does indicate how many sales were lost as fewer households decided to move. We expect at least some of these to return in the form of new home sales as job and economic growth continue to firm.”

A key demographic to help jump-start this process should come from the millennials. The share of firsttime home buyers has traditionally averaged around 40 percent, but in the aftermath of the housing downturn it now stands at just under 30 percent.

First-time buyers are expected to provide a boost to the housing market, as the unemployment differential between young people and others is shrinking, Crowe noted.

Single-Family on the Rise Turning to the forecast, the NAHB Remodeling Market Index, which averages ratings of current remodeling activity with indicators of future activity, stands at 57 in the first quarter of 2015 and has been at or above 50 most of the past two years. A reading above 50 indicates that more remodelers report market activity is higher (compared to the previous quarter) than report it is lower.

NAHB is projecting that residential remodeling activity will increase 2.3 percent in 2015 over last year and rise an additional 2.4 percent in 2016.

“Housing demand is now being driven by population growth and employment and income growth,” said Denk. “We are reconnecting to underlying fundamentals. We really have turned the corner.”

Single-family housing production is expected to post a 9 percent gain in 2015 to 704,000 units and jump an additional 39 percent to 977,000 units in 2016.

On the multifamily side, production ran at 355,000 units last year, what could be considered a normal level of production, and is expected to continue in that range or modestly higher through 2015 and 2016.

New Home Price Growth Fastest in Coastal Areas Focusing on new home sales, Sam Khater, deputy chief economist at CoreLogic, said that sales volume is weak, but pockets of strength exist.

“New home price growth is fastest in the coastal states and eight of the top 10 healthiest new sale markets are in the Carolinas and Texas,” said Khater.

Of the top 100 new-home sale markets, Houston leads the pack at 2,000 sales per month, followed

by Dallas and Atlanta which are running at about half that pace. In terms of volume, the bulk of the concentration is in southern markets.

“Nashville and San Jose stand out as the fastest growing markets, and Atlanta and San Antonio are the best large markets,” said Khater.

Only three new-sale markets are larger today than in 2000—Nashville, Oklahoma City and San Antonio.

“We Really Have Turned the Corner” Also delving beneath the national numbers, NAHB Senior Economist Robert Denk said that the housing recovery continues to vary by state and region.

“Housing demand is now being driven by population growth and employment and income growth,” said Denk. “We are reconnecting to underlying fundamentals. We really have turned the corner.”

The strongest housing markets are centered in several energy-producing states, including North Dakota, Texas, Oklahoma, Louisiana, Wyoming and Idaho.

“The recent decline in oil prices is not hurting housing,” said Denk. “We haven’t seen it yet. We still expect energy output to be higher at the end of this year than last year.”

Other states exhibiting strong employment and housing growth include North Carolina, South Carolina, Tennessee, Washington and Colorado.

Using the 2000-2003 period as a healthy benchmark when single-family starts averaged 1.34 million units on annual basis, NAHB is projecting that single-family production, which bottomed out at an average 27 percent of normal production in early 2009, will rise to 61 percent of normal by the fourth quarter of this year and climb to 81 percent of normal by the end of 2016.

In another way of looking at the long road back to normal, by the end of 2016, the top 40 percent of states will be back to near normal production levels, compared to the bottom 20 percent, which will still be below 75 percent.

“What we are seeing, no matter what bucket you are in, the numbers are getting better,” said Denk.

“There’s a broader recovery all around.”

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Builders Outlook

STAY SAFE. CALL 811 BEFORE YOU DIG. If you have digging or excavation work to do, remember to call 811 at least two business days in advance.

Natural gas and other utility lines may be buried beneath the surface. By calling 811, utility crews can mark locations of underground lines at no charge. The markings are done in paint and will eventually wash away. Marking line locations can help prevent you from accidentally damaging a natural gas line or another utility line.

Always call 811 before you dig. It can help keep you and your construction crew safe, and failing to do so can result in a fine.* * Texas Utilities Code 251.201 Civil Penalties

2015 issue 4

2015 issue 4

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Builders Outlook

President’s Message Edgar Montiel President, El Paso Association of Builders

Another month is in the books and it was just as busy as the last one.

These ‘President Messages’ keep sneaking up on me. It seems that just as soon as I hit the send button Ray is asking me for the next one.

Since my last message, the big ticket items that have occurred are the Spring Pachanga Golf Tournament, our General meeting, and the launch of the 2015 Spring Parade of Homes. Our General Meeting was once again sold out and a huge success. Our guest speakers were from the El Paso Inc. and they offered amazing insight in to their publication. Needless to say, I am now a subscriber. The Spring Pachanga on April 10th was a blast.

The weather held up nicely and people seemed to have a lot of fun.

Our Spring Parade of Homes is

Business Opportunities Abound at EPAB currently underway at The Village of Rio Valley in the Upper Valley at the corner of Westside and Borderland.

It will run through May 3rd. So far, it has been an overwhelming success. We had close to 600 people at the opening night party then 1,100 on Saturday and Sunday with the majority of those that Sunday. That is incredible for the builder participants as well as our sponsors. The Parade features six very distinctive homes that offer a little bit of everything. Architectural styles range from Traditional to Transitional Prairie School to Craftsman. The Village of Rio Valley is unique in itself offering a combination of commercial, multifamily, and single family build sites. The community park is amazing with its basketball court,

play equipment, skate park, large grassy area, and many trees.

Eventually, the community will feature an orchard. The idea is to work, live, and play in the same community.

I would like to personally thank our Immediate Past President, Frank Torres of GMF Homes, for coordinating this amazing event. I ask you to buy him, and his lovely wife, a tall cold one if you run in to them anywhere. I would also like to recognize Ray and Margaret Adauto for managing the ticket booth, opening/closing the event, marketing, paying the bills, and keeping us builders in line and on time. This event would not be possible without our wonderful sponsors (Foxworth Galbraith, Morrison, Sierra Title, Interceramic,

Lawyers Title, Whirlpool, First Light Federal Credit Union, InterNational Bank, and Dominguez Insurance Agency) and amazing builders (BIC, New Traditions, Palo Verde, Pointe, Rio Valley, and Winton).

As far as our industry is concerned, single family closings were up in March, interest rates remain low, and the reduced MIP and loosened requirements have all gone in to affect. All of these continue to be catalysts for buyers to go out and buy. Remember to ‘LIKE’ the El Paso Builders Association Facebook page and visit our new website when you are perusing the internet. Thank you for supporting your association and best of luck to each of your businesses.

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Builders Outlook

2015 issue 4

Perspective Ray Adauto, Executive Vice President EPAB

The ability to plan and produce a Parade of homes requires many different elements. First and foremost you must have an available subdivision, a willing developer and interest from builders. Once that’s established then everything is just a matter of planning, reviewing the plan, changing the plan, accepting that the original plan isn’t going to work and then executing the unplanned plan.

What I mean here is that you have to have a vision, and then plan to that vision while allowing for changes to the plan and maybe even the vision.

Case in point is the latest edition of a Parade. We originally had buy in from the developer (Jack Winton and the Winton Group) to get 8 to 12 homes in a newly established subdivision called Rio Valley. Next was a meeting with potential builders who once they heard the plan either voted to commit or left the room never to be heard from again. Of the original 9 builders we were able to

Successful Parade of Homes begins with a plan

give the vision to six. A winter holiday themed Parade of Homes, with festive holiday cheer and presents, and Santa, and …well you see that plan went out with the Christmas tree. Couldn’t quite get everyone on board. So we moved it to March, scrapped that, and ended up with a do or die date of April 18- to May 3.

Do or die, not the best words for a planner, but we had to put up or shut up. We put up as did these magnificent six builders and the developer.

Our meeting in January laid it out, get the homes ready or we can’t do it. Time is not a friend to a show like this as the planning included logistics most people would shy away from.

The good news was that Frank Torres, aka Mr. Parade, was willing to handle the deep duty of the preview party, set up the location and move the ticket booth in place. The development was gearing up and the homes were being finished. And like magic, on April 17 the street came

alive with the preview party and was jammed from the gate opening to the closing. Frank, his wife Isela, Margaret and me worked all day to put the event on, then until nearly 1am Saturday cleaning and adjusting for the public opening at 11 that morning. The weather cooperated in spite of the cool it wasn’t windy.

Food was good, as was the music.

But the stars were and are the Homes, those beautiful man-made structures many want but few will ever have. A Parade Home, shining with new stuff, mixed with old stuff, and a show stopping mix of both.

Our first weekend was HUGE and even through the first full week the visitors came. Weather forced us to tighten down the hatch a few days, but going into the last week of the show we’re happy to report good traffic, a contract on a home, and lots of happy visitors. Like I said a show like this requires a lot of different things to go right, and thank God, most have this time around. We owe

our volunteer ticket takes lots of Kudo’s; the builder’s agents have been truly professional and supportive; and of course we wouldn’t have a Parade without Edgar, Edmundo, Carlos, Sergio, Antonio, Mark, Herschel, Scott and Jack Winton. Nope wouldn’t have a Parade without the continuous help from Margaret, who makes sure the gate and ticket booth is ready and manned even if she has to do it herself. Thanks to our Partners, Sierra Title; Foxworth Galbraith; Morrison Supply; Interceramic and Builders Source. Our special sponsors First Light FCU, Inter National Bank, and Dominguez Insurance Agency who stepped up to the plate. Our agency EP Mass Media for the advertising work. Like I said, the plan eventually comes together. Without folks like these I’ve mentioned however, nothing would be done or could be done. That’s the plan and I’m sticking to it.

2015 issue 4

Remodelers Confident The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the first quarter of 2015, off slightly from the historically high level of 60 in the last quarter of 2014, but above the key break-even point of 50.

An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.

The RMI was 59 in the Northeast, 54 in the Midwest, 56 in the South and 62 in the West.

“Remodelers remain positive about the gradual pace of market improvement, but that confidence was tempered by a severe winter and continued labor shortages,” said NAHB Remodelers Chair Robert Criner, GMR, GMB, CAPS, a remodeler from Newport News, Va.

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Builders Outlook “Clients continued to call for consultations for home remodeling jobs at the beginning of 2015.”

Small renovation jobs continued to show strength. The home maintenance and repair component of the RMI increased four points to 64 in the first quarter, the highest reading on record. Overall, the current market conditions of the RMI declined two points to 58 this quarter.

The RMI’s future market conditions index fell to 55 from 60 in the previous quarter. All four of its subcomponents—calls for bids, amount of work committed for the next three months, backlog of jobs and appointments for proposals— decreased slightly from the previous quarter’s reading.

“Like the rest of the home building industry, remodelers are facing the pressure of increasing costs for labor and materials, but an RMI above 50 indicates that they still feel positive about the market on balance,” said NAHB Chief Economist David Crowe.

“The strength of the RMI’s maintenance and repair component

was likely due in part to the harsh weather conditions that struck many parts of the country during the first quarter and necessitated repairs.”

For more information about remodeling, visit nahb.org/remodel.

Housing Production Up 2 Percent Nationwide housing starts rose 2 percent to a seasonally adjusted annual rate of 926,000 units in March from an upwardly revised February reading, according to newly released data from the U.S. Commerce Department.

Single-family housing production rose 4.4 percent to a seasonally adjusted annual rate of 618,000 in March while multifamily starts dropped 2.5 percent to 308,000 units.

“Today’s reading demonstrates that the housing industry continues to make gains at a gradual pace,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “There are still some price sensitive buyers

who remain on the fence.”

“Builders are being careful not to add inventory beyond expected demand, especially as they struggle with increasing costs for lots, labor and materials,” said NAHB Chief Economist David Crowe. “However, pent-up demand, low mortgage interest rates and a growing economy should keep the housing industry moving forward throughout the rest of the year.”

Regionally, combined single- and multifamily starts increased the Northeast and Midwest, with respective gains of 114.9 percent and 31.3 percent. Housing production dropped 3.5 percent in the South and 19.3 percent in the West.

Led by a drop in the volatile multifamily sector, overall permit issuance declined 5.7 percent in March to a rate of 1.039 million.

Multifamily permits fell 15.9 percent to a rate of 403,000 while single-family permits rose 2.1 percent to 636,000.

Regionally, the Northeast registered a permit gain of 39.8 percent, while the Midwest, South and West posted respective losses of 4.4 percent, 14.2 percent and 4.3 percent.

Builder Confidence Rises Four Points

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We build so you can GROW

Builder confidence in the market for newly built, single-family homes in April rose four points to a level of 56 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

“As the spring buying season gets underway, home builders are confident that current low interest rates and continued job growth will draw consumers to the market,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “The HMI component index measuring future sales expectations rose five points in April to its highest level of the year,” said NAHB Chief Economist David Crowe. “This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components registered gains in April. The component charting sales expectations in the next six months jumped five points to 64, the index measuring buyer traffic increased four points to 41, and the component gauging current sales conditions rose three points to 61.

Looking at the three-month moving averages for regional HMI scores, the South rose one point to 56 and the Northwest held steady at 42. The Midwest fell by two points to 54 and the West dropped three points to 58.

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Builders Outlook

2015 issue 4

The Economy

2% is the new 3% Last year, GDP growth was a mediocre 2.4%. While it was the best growth since 2010 when GDP growth was a “sparkling” 2.5%, it means yet another year, the ninth in a row, of sub 3% GDP growth. There Elliot Eisenberg has never been a run of such weak GDP growth since record keeping began in 1930. Yes, there were terrible periods but they were all blessedly brief, never lasting more than two or three years and they always occurred during recessions. In our case, the recession ended in June 2009. What is going on? The fact is that our weak GDP growth is not surprising at all, let me explain.

GDP growth is composed of two things, growth in the labor force and growth in labor productivity.

GDP rises when more people work, and better yet, when they work more productively. Productivity growth is particularly important because it boosts living standards.

GDP growth was very good following WWII because annual labor force growth grew dramatically from 0.5% in 1950 to almost 2.5% in 1975. As a result, the prime-aged working population, those between the ages of 25 and 54, grew from 60 million to almost 80 million in 25 short years. While population growth then began to decline, it remained above 1% through 2003. As a result, the prime-aged population continued growing, hitting 122 million in 2003.

As a matter of fact, the labor force grew much faster than the population during the 1970s and 1980s due to the huge influx of women into the labor force. As a result, the prime-aged working population grew by over 3% per year during the 1980s.

Since 2003, population growth has slowed further and is now barely 0.7%. Moreover, the

Boomers have begun retiring in large numbers and the number of working men and women has, for a number of reasons, continued to slowly decline. As a result, the size of the prime-aged working population has essentially flat-lined since 2003. As a matter of fact, it peaked in 2007. If the size of the prime-aged working population is flat, it’s hard to experience rapid GDP growth even if labor productivity growth is good.

Regrettably, labor productivity growth has not been particularly good of late. But first some history: from 1948 through 1973 labor productivity grew at an amazing average annual rate of 2.8%. Add to that rapid labor force growth, and it’s no wonder GDP growth averaged 4.1% per year. Between 1974 and 1990, labor productivity grew by an anemic 1.4% percent but given good population growth, GDP growth was a solid 3.0% per year. From 1991 through 2007, productivity perked up to a very respectable 2.4%, and despite weak population growth, GDP still averaged 3% per year.

Since the start of the Great Recession, however, we have experienced anemic labor productivity growth of, again, 1.4% per year and a trivial increase in the working population. As a result, GDP growth has averaged a dismal 1.2% per year. Luckily the primeaged working population is again starting to rise, which is good. The million dollar question is “How will labor productivity growth perform?”

Will it be a replay of the boom years of 1974 through 1990, the crummy years since 2007, or more likely something in between?

While nobody knows for sure, GDP growth should drift upwards as demographics become more favorable and labor productivity hopefully rises.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net.

His daily 70 word economics and policy blog can be seen at www.econ70.com

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2015 ISSUE 4

Builders

7

Builders Outlook

utlook on the scene | Parade Continued from page 1

By Ray Adauto, EPAB

“It’s a wonderful night with so much to see,” said Belinda Velasquez, one of the guests enjoying the preview. “I think there are some favorites, but my big surprise is how different each home is to the others making the site really unique,” she continued. Her husband, Roger was also really happy with the show. “I agree, the different styles and colors are really great to look at, fun too,” he said. The theme, if there is one, is that this subdivision will not look like a cookie cut plan, but rather offer unique architectural styles in each block.

“What this new urbanism really showcases is that you can have homes look different yet function well in a new design like what we have here,” said Scott Winton, developer of Rio Valley. “The night is full of party, but the true stars of the show are the homes,” he continued.

The Winton Group is responsible for the subdivision where there will be single homes, duplexes, quadraplexes, multifamily and light retail all within walking distance of each other. This neighborhood where the Parade Homes are has small front and back yards, and rear entry through and alley. “What we enjoy about this is that cars are parked in the back of the home and don’t clutter the streets,” said Edmundo Dena, President of Accent Homes. “We built our Rio Valley parade home to best utilize the tighter lots, yet give the customers a sense of expanse,” he continued. The Rio Valley home is a Craftsman style home, reminiscent of homes found in Kern or Manhattan Heights in Central. “We want this to be the new version of something comforting, something most have either lived in or visited sometime in the past,” Dena said.

The Parade of Homes is sponsored by Sierra Title, Foxworth Galbraith, Interceramic Tile and Stone, Morrison Supply and Builders Source. “I think that these homes are what people are looking for, especially those young professionals looking for a little something different, “said Angelique Roman of Sierra Title. The evidence in her statement was the traffic count for the first weekend of the Parade, as over 1700 people trekked through the gates to see the homes.

The homes continue their run open weekdays 4-7 pm and on Saturday and Sunday 11 am to 7 pm. It’s easy to find as you travel on I-10 to Artcraft, turn west onto Artcraft and head to Westside Drive. Make a right turn and stay on Westside until you see the Parade site on your left. Tickets are only $5 adults, kids 12 and under free.

Active and retired military are free compliments of First Light FCU. School employees, teachers, administrators, custodial and office staff also free compliments of Inter National Bank. Police, fire, EMT’s and other Law enforcement are sponsored by Dominguez Insurance Agency. All must show I.D. for the free admission.

Additional information can be found by logging on to www.elpasoparadeofhomes.com or www.elpasobuilders.com

el paso development news north Hills Crossing to Open in June

Rendering

Northeast El Paso's largest retail development in years is scheduled to open in June. North Hills Crossing, at the corner of Gateway South and Martin Luther King Jr Boulevard, has been under construction since August and will add over 200,000 square feet of retail space.

The power center will include retailers including Walmart Market, Ross, Marshall's, and Big Lots.

River Oaks Properties, the developer for the project, made the announcement in a press release highlighting an overall $200 million, five-year retail expansion plan within the Sun City.

Phase I of the plan is expected to be completed by the end of 2015 and includes 500,000 square feet of space, which includes North Hills Crossing but most of which is spread across four new shopping centers opening in East El Paso.

They include: Las Tiendas located at Zaragoza and Edgemere; Shops at Tierra Este, located at Tierra Este and Montana; Tierra Del Norte located at Tierra Este and Zaragoza; and a Home Depot anchored Shopping Center located at Zaragoza and Montwood, according to the press release.

No specific opening date in June was disclosed for North Hills Crossing and most likely depends on grand opening for individual retailers.

Dig In! 'Fountains' Announces Chuy's Mexican Restaurant Location A Tex-Mex restaurant popular in central and east Texas's metros will open its first El Paso location in June. Chuy's Mexican Restaurant will have a location at the Fountains at Farah on the East Side.

According to a press release, the restaurant will include an Elvis Shrine, the La Chihuahua Bar with framed photos of dogs, a "school" of hand-carved wooden fish, metal palms trees, and a hubcap-covered ceiling.

“We are thrilled to open our doors in El Paso,” states Fabian Alba,

Area Supervisor for Chuy’s El Paso, in the press release. “We’re looking forward to sharing the Chuy’s experience with El Pasoans and I’m positive this community will appreciate our passion for food and our fun and quirky style.”

Its Fountains location will be along the lifestyle Promenade section in the lower part of the center. Chuy's was founded in Austin in 1982 and has more than 60 locations in 14 states. The El Paso restaurant will be the furthest west for the company.

Sample Location

LAnD StuDy: nE El Paso neighborhoods in Franklin Mountain Foothills possible The foothills of the Franklin Mountains in Northeast El Paso could see more residential development in the coming years after the City Plan Commission approved a land study for the area.

"Sierra del Puerte" includes about 175 acres of land just west of Magnetic Street.

According to the land study, the developer plans to construct 319 residential units on 70 acres. The

site plan shows residential streets winding through the development, with arroyos interspersed throughout.

Another 87.7 acres will be dedicated to open space, which includes the arroyos.

Access to the neighborhoods may come from an extended Hondo Pass Drive which currently ends just west of Magnetic. The extension will turn south and

eventually connect to Edgar Park Drive. Zircon Drive, which currently contains a sizable gap, will connect its two halves and continue westward to the inner neighborhoods.

The development will be built in phases, with possible completion in 2019.

Builders Outlook Issue 4 • 2015

Content provided by El Paso Development News visit: elpasodevnews.com

Developing Story: Will City of El Paso Buy Controversial Kern View Estates?

The City of El Paso will consider a proposal this week to purchase a 15.57 acre property on a hill overlooking the Kern and Mission Hills neighborhoods. A developer had previously put forward controversial plans to construct housing on the plot of land.

Kern View Estates includes 60 attached single family homes on the side of Crazy Cat Mountain, just east of Piedmont Drive.

The City Plan Commission approved the site development plan in July 2014, but it was never considered by City Council despite multiple appearances on the agenda in the last few months, including a separate item this week. The City received letters and a petition opposed to the project.

According to the agenda item, the City is poised to pay the owner $405,000 for the property, which is lower than the appraised value of $450,000. The City considers the difference of $45,000 a "donation" by the owner for tax purposes.

Funds for the purchase come from the 2012 Quality of Life bonds approved by voters, ensuring the land will be used as open space. It also provides connectivity to the adjacent Palisades open space area previously acquired by the City.

More about Kern Place Estates Previously posted uly 21, 2014

Will City Green-Light Latest Proposed ‘Kern View Estates’ Design?

A date has been set for a City Council decision regarding a hillside development in West El Paso. The developer is seeking approval for changes to the detailed site development plan for the property, a project which is slated for the slopes of Crazy Cat mountain overlooking the historic Kern Place district.

Kern View Estates Unit Two will now contain 60 attached singlefamily residences, under the new plan, which will line a small loop, according to a site plan included in the latest application. There will also be a clubhouse located at the site.

The change comes years after City Council approved a previous development plan, which contained a proposal for 17 single-family residential lots, with the smallest lot occupying 16,357 square feet. The smallest lot in the new plan will be 986 square feet in size.

Setbacks in the new plan will be reduced to zero, while the maximum

allowable structure height will increase to 37 feet. Parking will be available via ground level garages at the base of the residential buildings.

Another change is the access point to the neighborhood. The newest plan indicates that Metetuye Lane will be the street used to access the development, off of Okeefe Drive.

Previously, plans were to extend Piedmont Drive northward into the development.

The City has received two letters of opposition and a petition with 107 signatures against the latest proposal by the developer, which

received similar opposition for the previous development plan four years ago. City Plan Commission members were split when they voted on the new plan in May, approving the plan on a 4-3 vote.

City Council will consider the item at its August 19, 2014 meeting. The property is owned by Piedmont Group of El Paso. There is no mention of a timeline within the application.

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Builders Outlook

2015 issue 4

Expert Advice

Affordable Care Act Update Joe Bernal Employees Benefits of El Paso

As this issue went to press, the Supreme Court was hearing arguments in King v.

Burwell, which could decide the fate of the Affordable Care Act (ACA). Meanwhile, other changes have affected administration of the ACA. No More Skinny Plans: In past issues, we’ve discussed so-called skinny plans, or medical plans that large employers have argued would fulfill their requirement to provide affordable medical coverage to employees. The ACA requires individual and small group health plans to cover certain preventive services and to cover a list of “essential health benefits.” Large employer plans don’t have this requirement.

Instead, they must provide coverage that is affordable and meets minimum value standards, which means covering at least 60 percent of the total cost of medical services for a standard population.

Skinny plans cover the required preventive services, but do not provide hospitalization benefits, which is one of the most costly “essential benefits.” These plans save money…and some meet the minimum value standard.

In late February, the Department of Health and Human Services (HHS) finalized a proposed rule that requires employer-sponsored health plans to cover hospitalization benefits. It said a plan that does not offer hospital benefits “is not a health plan in any meaningful sense.” This means large employers offering only a skinny plan would be subject to the ACA’s penalties of up to $3,000 per employee.

Employees covered by these plans now officially lack qualifying coverage, which would make them subject to penalties.

Many of these workers are in low-wage industries, such as restaurants and retail.

HHS is granting them relief, allowing them to receive subsidies to buy comprehensive individual coverage.

HHS is allowing employers that signed contracts before November 4, 2014 to retain these plans for this year.

Health Reimbursement Arrangements Okay…for a Few More Months: Small employers with health reimbursement arrangements (HRAs) have gotten a temporary reprieve from the Obama administration. In late February, the Internal Revenue Service and Treasury Department announced that they will not levy penalties against small businesses that use standalone HRAs until July. This will give small employers more time to change their plans.

HRAs allow employers to reimburse employees for qualified healthcare costs with before-tax dollars, benefitting both employer and employee. Since the implementation of the Affordable Care Act (ACA), though, employers using standalone HRAs are subject to fines. HRAs have annual limits, which violates the ACA’s prohibition on health plans with annual limits.

The federal agencies overseeing the ACA—the Departments of Health and Human Services, Treasury and the IRS— determined that employers can offer an HRA to active employees if they are also covered by a group health plan that complies with ACA rules. Under the new rules, an HRA can reimburse non-essential health benefits, such as premium

expenses. Employers can offer standalone HRAs to retirees.

IRS Begins Working on Details of “Cadillac Plan” Tax: To fund coverage subsidies, the ACA includes a tax on so-called “Cadillac” health plans. These high-cost health plans insulate individuals from the cost of their health care.

The ACA specifies the 40 percent excise tax will apply to plans that cost more than $10,200 for self-only coverage and $27,500 for family coverage. In insured plans, the health insurer will pay the tax; in self-insured plans, the plan sponsor, usually the employer, will pay. The IRS must create rules implementing the tax, which goes into effect in 2018, so many details remain unknown at this point.

In a notice issued on February 23, the IRS defined “applicable coverage” for purposes of the tax. The notice clarified

that it does not matter whether the employer pays all, or any premiums, for the plan. Even if the employee pays for coverage with after-tax dollars, if the employer sponsors the plan, the tax will apply. Types of plans the Cadillac tax will apply to include: • Health FSAs (flexible spending arrangements) • Archer Medical Savings Accounts • Health Savings Accounts (not including certain contributions by individuals) • Government group health plans covering civilian employees. (This excludes military coverage.)

• Coverage for on-site medical clinics, except for clinics that provide only de minimis medical care • Retiree coverage • Multiemployer plans • Indemnity plans, when payment for coverage is excluded from gross

income or a deduction is allowed.

This would include most critical illness coverage, dread disease insurance (such as cancer insurance), and hospital indemnity plans or other health plans that pay a specified amount per occurrence or claim.

The IRS also states that it expects that executive physical programs and health reimbursement arrangements (HRAs) will likely be included in the definition of applicable coverage.

The Department of the Treasury and IRS are inviting comments on this initial notice and will issue further notice on the calculation and assessment of the tax.

For more information on the Affordable Care Act and how it affects your organization’s benefits programs, please contact us.

2015 issue 4

Builders

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Builders Outlook

utlook on the scene | Spring Golf tournament played in beautiful weather

By Ray Adauto, EPAB

The 2015 Spring golf tournament presented by Haskins Electric was a resounding success according to golf chairman Sam Shallenberger. “We were able to enjoy a beautiful day that just got better with all the friends who joined us at Horizon Golf Club,” Shallenberger told the Outlook. Over 20 four man teams competed in a par-is-your-friend round of 18. “I had a wonderful time out here today with all the great members and new folks I got to meet,” said Chuck Haskins, owner of Haskins Electric. “I can’t believe how nice the day turned out,” he continued.

While golf was the excuse for getting together a lot of on the course antics provided for some entertainment. “This format is for fun, not the real serious PGA-type guy who thinks nothing of coming in with a new course record even though they have a 30 handicap,” one anonymous golfer said. The course is in really good shape where just a year ago the course was challenged due to a long time abuse. “I think the course will be to your liking,” quipped Julio Hernandez, golf pro who took over the course recently. Employee Benefits of El Paso sponsored the $10,000 hole in one contest, which unfortunately no one hit this year. “I hope that one day we’ll be able to award the money because this is a fun time with friends, not just a golf tournament,” Joe Bernal said.

There were a lot of first time participants, especially some of the newest members including Henry Bankey, President of Summerlin Energy out of Las Vegas and now El Paso. “What a wonderful experience today with getting to know some of our fellow members and finding out that the truth is we are amongst good people,” Bankey told the Outlook. Summerlin provided some dazzling optic yellow t-shirts to everyone who signed in. Also new to the event was Montez Love from Love Engineering.

He said he was amazed at the turnout and the comradery everyone showed.

“This is a fun event and I for one am happy to be out here with everyone.

Great time and awesome weather,” Love told the Outlook.

This was a fun time as so many have found out through the years. “I enjoy being able to visit with my builder friends and customers who are out here. I had a great time and was able to enjoy the time with them,” Henry Tinajero from WestStar Bank said.

In the end the scores were turned in, the tally made then the prizes were awarded. Long drives sponsored by Pioneer Bank; Target on the fairway sponsored by HUB International; and of course the hole in one which once again was sponsored by Employee Benefits of El Paso, which again went unclaimed.

Plans are already in motion for next spring. If you missed this one make sure to make plans to join us then.

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Builders Outlook

General meeting features talk on newspapers presented by El Paso Inc. The April general meeting featured the owner and editors of the El Paso Inc., the only independent business newspaper in the El Paso area. Representing the paper Wherrett was Publisher Tom Fenton, Editor Wendy White Polk, and the Associate Publisher Secret Wherrett. All three gave a rousing description of the demise of newspapers Polk except in very special circumstances like those presented by specialty newspapers like the El Paso Inc... Mr. Fenton showed the audience how the circulation for the only daily English language newspaper, the El Paso Times, has steadily declined while costs have increased and revenue decreased. Subscriptions, he said, lead to advertising which is the lifeblood of any newspaper. Ms. Polk talked about her years in broadcasting including stints with NBC on the east coast where she worked and managed personalities that you would recognize even today. Her trip to being El Paso Inc.’s editor has been interesting she said, something of learning curve to make sure the stories are accurate and timely.

She pointed out how the El Paso Inc.’s reporters often break news that is repeated and sometimes “borrowed” by other media outlets without crediting the Inc... Overall the presentation was well received as Secret told some facts about how the Inc. is evolving and growing, making sure not to lose its audience.

Transitions in names, copy and style is about surviving in the print news business she told the group. Over 65 members and guests were in attendance at the El Paso Club for the meeting.

2015 issue 4

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2015 Issue 4

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Builders Outlook

www.elpasobuilders.com www.epbuilders.org

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Builders Outlook

2015 issue 4

Associates Council

Sam Shallenberger Morrison Supply

The golf tournament at Horizon Golf course went off like we’d hope for. It was a beautiful day with just enough breezes to make the heat go away, the greens a little friendlier and the food taste that much better at the end. I want to say thanks to the Professional Women’s Council and Margaret for signing us in. Gina Avila and Kathy Rose and Terry Martin were so ably assisted by Patrick Tuttle, who by the way, came out and helped in spite of his banged up right hand. Our friends at Summerlin and so many others gave us

a really cool little goody bag. And the course was in real good shape. The beer flowed, and I hear so did the jungle juice, that by the midafternoon we were all happy happy and ready for prizes. We changed things up a little and did drawings for the prizes, that way everyone had a good time and everyone had a chance to win something nice.

To the tee box sponsors thank you. Thanks to Joe Bernal for the hole in one; to Luis Rosas for the Target fairway; and to Kathy Carrillo for the long drives. My

Atrium Homes wins International Metalcraft Competition FAYETTEVILLE, GA — Atrium Homes of El Paso, and member of the El Paso Association of Builders has won an award for outstanding craftsmanship in an international competition sponsored by the National Ornamental & Miscellaneous Metals Association (NOMMA). The event was open to over 500 member firms throughout the U.S. and in 7 foreign countries.

Atrium Homes received the GOLD for forged gates and doors.

The presentation was made at a special banquet in Valley Forge, PA, March 14, during NOMMA's 57th annual conference. The Ernest

Wiemann Top Job Awards Competition is an annual contest that recognizes outstanding work in the ornamental and miscellaneous metals industry.

To win an award, entrants must submit photos and a description of their work. This material is then publicly displayed in a gallery where NOMMA member firms then vote.

Winning a Top Job award has special meaning, since it represents a "voice of approval" from industry peers.

Atrium Homes can be reached at 915-490-0839. Congratulations to Atrium Homes.

buddies at WestStar Bank did the driving and putting range. To our Big Sponsor Chuck Haskins, Haskins Electric, man you out did yourselves.

Thanks for the support. To everyone who played thank you. Get ready for the fall tournament; we’ve got something special for that one. By the way, if you don’t know already, Ray had a spill and is still working his way through a broken knee cap. Good thing he couldn’t play. Come to think of it that was good for us. Just kidding.

Advertise your business to the home building industry The Builders Outlook is the official publication of the El Paso Association of Builders. Our award winning monthly newspaper is the only publication to target El Paso home builders and related businesses.

Widely distributed throughout the city and available to readers online, the Builders Outlook is an important advertising medium for any business that want to reach this valuable market.

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2015 Issue 4

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Builders Outlook

Builders

utlook www.elpasobuilders.com www.epbuilders.org

6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038 ■ execuTive oFFicerS edgar montiel, President Palo Verde Homes carlos villalobos, vice President Pointe Homes Don rassette, Secretary/Treasurer Rassette Homes Sam Shallenberger, Associates chair Morrison Supply

■ TAB STATe DirecTorS Randy Bowling Greg Bowling Sam Shallenberger ■ NATioNAL DirecTorS Demetrio Jimenez NATioNAL ASSociATioN oF Home BuiLDerS (800) 368-5242

TexAS ASSociATioN oF

Jay Kerr -Attorney of record Firth, Johnston, Bunn & Kerr ■ couNciL/commiTTee cHAirS Associates council Sam Shallenberger Build Pac Randy Bowling Land use council Linda Troncoso Young Designer Award John Chaney remodelers council Rudy Guel membership retentiion Patrick Tuttle Finance committee Kathy Carrillo Henry Tinajero

■ ADviSorY To THe BoArD Jay Kerr, Firth, Johnston, Bunn & Kerr James Martinez, Law Office of James Martinez

BuiLDerS (800)252-3625

2014 Builder member of The Year Frank Torres GMf Homes 2014 Pat cox Award Bret Thompson foxworth Galbraith Lumber 2014 Associated of The Year Joe Bernal Employee Benefits Of El Paso 2014 John Shatzman Award Cindy Bilbe, Stewart Title Honorary Life members Mark Dyer Wayne Grinnell Don Henderson Chester Lovelady Cliff C. Anthes Anna Gill Brad Roe Rudy Guel E H Baeza Past Presidents committed to Serve Greg Bowling Bobby Bowling, IV Kelly Sorenson Rudy Guel Mark Dyer Anna Gil Mike Santamaria Bradley Roe John Cullers Bob Bowling, III Randy Bowling Edmundo Dena Doug Schwartz Hershel Stringfield Robert Baeza Pat Woods

■ BoArD oF DirecTorS

Antonio Cervantes, BIC Homes Beverly Clevenger, Automated Div. 6 Builders Bret Thompson, foxworth Galbraith Lumber Bud foster, Southwest Land Development Servises Dan Ruth, Millienium Homes Henry Tinajero, West Star Bank Joe Bernal, Employee Benefits Of El Paso John Chaney, Passage Supply

ePAB mission Statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value.

The El Paso Association of Builders is a 501C(6) trade organization.

John Dorney, Dorney Security Kathy Carrillo, Pioneer Bank Kathy Parry, Hunt Companies Leti Navarette, Custom Dream Homes Linda Troncoso, TRE & Associates Robert Najera, Joseph Homes Ruben Orquiz, MTI Ready Mix Walter Lujan, Dawco Builders

Residential Specialists Tract Homes • Custom Homes

Bobby Bowling IV.

Frank Torres, immediate Past President GMf Homes ray Adauto, executive vice President Executive Vice President

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