Thursday, March 5, 2009

Internal strife hitting NAHB

After losing some fairly large political battles on Capitol Hill, the nation's home builders are looking for someone to blame, and in those cross hairs is the National Association of Home Builders, or the NAHB.

There's a very interesting post over at HousingCrisis.com, run by Big Builder editor John McManus, discussing some internal strife between larger and smaller members of the NAHB. John also discloses parent company Hanley Wood's relationship with the NAHB (Hanley Wood got its first big break contracting with the NAHB to publish Builder magazine, which is sent to all members). I also used to work for Hanley Wood's Market Intelligence division and have spoken at the magazine's Big Builder conference, so I've known John for a few years.

In a nutshell, the difference focuses on larger builders pursuing their own agenda -- chiefly an extension of carrying back tax losses from 2 to 5 years -- separate from the NAHB. Since the largest builders account for well less than half of all new home sales, smaller builders are contending that if large builders are encouraged to dump their land holdings for a loss -- which was rampant in 2008 -- then that drives down the price for all land, including theirs. This issue could potentially split up NAHB members into two camps -- those with high volume, and those without.

Given that builder members are charged for membership based on the number of homes they build, the larger public companies can often provide a significant chunk of an chapter's revenues. Has the time come for these behemoths to simply take their marbles and go elsewhere?

From the post:

For the moment, the battle for more substantial stimulus measures has run its course.

Now, it seems, some of them are going after each other. For, in the wake of the charged, 24/7 lobbying blitz that concluded with Congressional reconciliation of a $790 billion stimulus bill on Friday, Feb. 13, second-guessing and defensiveness have flared up, opening up chronic wounds among long-polarized parts of the industry group.

This week, National Association of Home Builders leadership broadcast to its 200,000 members an aggressive defense of its strategies and its record of effectiveness among elected officials and new Adminstration policy-makers.

At the same time, the trade group distributed a series of documents and has them posted on the members-only pages of the nahb.org Web site that appear to try to rally member support amid a divisive exchange with a small but powerful part of the home building universe–high production builders.

The documents chronicle a controversy whose most recent focus is a scrap over whether net operating loss carry backs would be extended. It’s an issue that home builders have been fighting for among elected officials practically since many of them started reporting quarterly losses in the second half of 2006. But this latest go-round has had a particular sting to it...

Click here for the rest of a very intriguing post.

1 comment:

New Homed said...

Just found your blog, thank you for having a unique voice in the housing industry.

The NAHB needs new leadership!

"An ounce of prevention is worth a pound of cure."