HBA Rockford

To the Code Pioneers in the Housing Industry Who Take the Slings and Arrows, Thank You.

Dennis Sweeney, Executive Vice President HBA of Rockford

It’s usually good to be first, except when it comes to local governments adopting the next edition of the building codes and land use/ zoning regulations. Let someone else experience what works and doesn’t work in the real world.

It’s one thing to see a new code requirement in writing and make a policy decision based upon the “expert’s” testimony, it’s another for the builder to implement it smoothly and seamlessly if/when the required design doesn’t work.

The latest example is the requirement for GFCIs on A/C condenser units.

GFIs have been around for a long time and the original problems, and there were problems with the first generation products, have been resolved, EXCEPT for a new application on A/C condensers. Who knew (should have known) that existing GFCIs wouldn’t work on A/C condensers? There are home owners, builders, HVAC contractors and their electricians in Texas and Georgia where they are building many houses and where it gets very hot and muggy, who found out from personal experience:

NAHB Supports Electrical Code Win Over A/C Tripping
September 9, 2022

The appeal was led by Air Conditioning Contractors of America, Leading Builders of America and the Air-Conditioning, Heating, and Refrigeration Institute, and was supported by NAHB.

At issue was section 210.8(F) of the 2020 NEC that requires a ground-fault circuit interrupter (GFCI) breaker to be installed on connections between a new home's electrical system and the air conditioning condenser unit that sits outside. Before the 2020 NEC, GFCIs were not required for condenser connections, and as such, HVAC manufacturers had not engineered their products for such a connection.

Texas adopted the 2020 NEC in full and home owners and builders in the state immediately began reporting issues with the GFCI breakers tripping when the air conditioner ran, sometimes multiple times each day, as the GFCI breakers are incompatible with HVAC units. Late last month, the National Fire Protection Association (NFPA) publishers of the NEC agreed that the GFCI requirements were not compatible with current HVAC equipment and halted the GFCI mandate until Sept. 1, 2026, to give manufacturers time to engineer a solution.

NAHB urges members to check with their local code bodies to ensure that any adoption of the 2020 or future 2023 NEC contains the amended language exempting all outdoor HVAC equipment from GFCI requirements.

Nobody Asked Me But… Smaller Lots To Offset Rising New Home Costs Has Its Limits

By Dennis Sweeney, Executive Vice President
HBA of the Greater Rockford Area

Every developer/builder understands that the cost of the land/lot determines the cost of the house. Therefore, if you can reduce the cost of the lots then you can reduce the cost of the house. Smaller lots mean more lots and thus more affordable lots as a starting point for building a new house.

However, there is a limit to how small you can go in every market.

Local zoning laws will have density limitations and set back requirements plus the utility easements that limit the buildable area of a lot. Consumer market forces require that new homes in each market have certain design features like number of bedrooms and bathrooms, laundry room, garage parking, ranch style design, etc. to make them sellable. There are interior amenities that are required as well, like solid surface countertops, hardwood/plank/tile flooring, A/C, dishwasher, upgraded lighting fixtures, upgraded plumbing fixtures, outdoor living area, etc.

A few years ago, some local builders looked at the possibility of building new homes on infill city lots. It was difficult to put a ranch style three bedroom house with an attached two car garage, the most popular local housing design, on an older infill city lot. When that lot size is reached then that is when the lot downsizing for new homes will end.

By Dennis Sweeney, Executive Vice President of HBA Rockford

Nobody asked me but… Every elected official supports affordable housing, it’s how to be affordable that they don’t agree on.

The comments section following NAHB online articles often provide some excellent insights from builders and suppliers about government policies and how they impact the industry. Following an online article about a proposed government program to create more affordable housing, a builder from, I believe Georgia,
commented:

In my career I have built hundreds
of these affordable units. They cost the same to
build as any other housing unit. [He is referring
to the cost of labor.] The only thing that makes
them affordable is the program subsidy to build
them, and, often live in them.

Years ago when there were debates about building a more affordable house, HBAR builders came up with a sample list of the lowest cost options in a new house that would still meet code if that is what a buyer wanted the most affordable square foot new home possible using the least expensive materials available without even getting into bedrooms, bathrooms, garages, basements, etc., but then new home
buyers would get more for their housing dollar in an existing home.

A few years ago, a real estate agent told me that if you had an existing or new home listing without solid surface counter tops and tile floors in the kitchen and baths, people turned around and walked out of the open house.

Other cost cutting items in new construction that are unthinkable in this market include no basement, no garage, no air conditioning, no dishwasher, good luck selling an affordable house without these features and then reselling it someday.

At the margin, there will be people who cannot afford to buy a house. The objective should be policies to shrink that number, not subsidize it. The alternative for creating affordable housing that will stand the test of time is to reduce regulations and taxes; grow the economy and leave the government bureaucracy out of the affordability formula.

By Dennis Sweeney, Executive Vice President
HBA of the Greater Rockford Area

It takes months to build a new house but just minutes for it to be wrecked by a fire, tornado, or flash flood. And then it takes months to rebuild it.

It takes years to rebuild a healthy national economy and just months to tip it back into stagflation and recession. And then it takes years to rebuild it. When economists say the jury is still out on whether or not there will be a recession, it sounds to me like wishful thinking and whistling past the cemetery.

With inflation on the rise, transportation fuel costs at all time highs, and, increased costs for natural gas and electricity to cool and heat your homes and businesses – compare those unit costs to a year ago -people are running out of money, or, worrying about running out of money.

When that happens, consumers cut back on discretionary future “wants” spending to save money for their existing “needs” like rents, mortgages, gas, cars, food, utilities, school, etc. And because consumer spending makes up about 66% of GDP in a healthy economy, the economy is going to shrink and that is a recession.

Today inflation is over 8.0% ; the average 30 year fixed rate mortgage is 7.168% , car loan bank rates are around 5.0% and the arrow is pointed up for all three. The Federal Reserve has increased the Federal Funds Rate by 75 basis points and promised there will be future increases to curb inflation. The Federal Reserve is getting no help curbing inflation from the Legislative and Executive branches of government through spending and tax cuts, and deregulation. The Federal Reserve goal is to have inflation back in the 2.0% range in 2024.

It’s going to be a long two years.

Three is not a crowd when the leading housing industry trade shows take place at the same time in 2023, furthering the offering of what attendees can see next year. The National Hardware Show® (NHS), NAHB International Builders’ Show® (IBS) and NKBA’s Kitchen & Bath Industry Show® (KBIS) will take place during Design & Construction Week.

One registration provides access to all three shows. Early bird discount registrations open September 1st. Plan now to be in Fabulous Las Vegas, Nevada, January 31 – February 2, 2023. Learn more about each of the shows:

• IBS
• KBIS
• NHS