Builder Confidence in the 55+ Housing Market Shows Significant Improvement in the First Quarter

Stephanie Pagan

Builder confidence in the 55+ housing market for single-family homes had a significant increase in the first quarter of 2012 compared to the same period a year ago, according to the latest National Association of Home Builders' 55+ Housing Market Index released today. The index increased 10 points to 27, and although 27 is relatively low for an index that lies on a scale of 0 to 100, it is nevertheless the highest reading since the inception of the index in 2008.

"We continue to see increased optimism from builders and developers in the 55+ housing segment," said NAHB 50+ Housing Council Chairman W. Don Whyte. "We are servicing the largest growing group of buyers that we have ever seen in this age category, and it is a population that is dramatically different from what it was only a few years ago. This creates an opportunity for builders and developers in this market to create communities that address the specific needs of the 55+ consumer."

The 55+ single-family HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good. All index components remain well below 50, but increased considerably from a year ago, each reaching an all-time high: Present sales rose 12 points to 27, expected sales for the next six months increased eight points to 32 and traffic of prospective buyers rose nine points to 26.

The 55+ multifamily condo HMI remains the weakest of the 55+ housing market indices, but also recorded an all-time high at 15, up seven points from a year ago. All index components showed an increase compared to a year ago: Present sales rose five points to 14, expected sales for the next six months increased seven points to 20 and traffic of prospective buyers jumped nine points to 15.

The 55+ multifamily rentals continue to lead the way in the overall 55+ housing market. Present production climbed 11 points to 31, expected future production increased eight points to 35, current demand for existing units rose three points to 42 and expected future demand increased one point to 45.

"Like the overall single-family housing market, the 55+ housing segment is facing a slow but steady recovery," said NAHB Chief Economist David Crowe. "Consumers are starting to see the resale market show some improvement, which allows them to start thinking about moving into 55+ housing."


The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in remodeling, home building, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

City of Sparks Council Takes Giant Step to Promote Economic Recovery

At a recent City of Sparks Council retreat, the City Council requested staff to look at amendments to the development codes to remove barriers to development and job creation.  In response, the city staff prepared a resolution to amend fees for development services such as Special Use Permits, Site Plan Reviews, Code Amendments, and Tentative Maps. 

On October 10^th the Council approval the resolution with an added specific review period of six months and fee caps which limit collects not to exceed current amounts.

Currently, there are three types of Special Use Permits:

• Major
• Routine
• Minor.

These three delineations are based on the amount of staff time typically devoted to the type of special use permit. For example, a major Special Use Permit for a new casino in the TC (Tourist Commercial) zoning district. A minor Special Use Permit might be an amendment to a previously approved Special Use Permit. A major requires a $10,000 deposit, a routine is $13,385 and a minor is $7,495. 

Sparks will eliminate the different types of Special Use Permits and simply charge applicants a fee of $120 per hour of staff time. They will require a deposit of $1250  for a Special Use Permit. Staff will be required to track time associated with the entitlement and charge toward the deposit. If the project requires more time than the deposit provided staff will bill the applicant for the remaining fees. 

This is the process used when reviewing Planned Development Handbooks. If less time and materials are required the remainder of the deposit will be refunded (as is with a handbook review process.)  Under no circumstance will the fees exceed the current fee schedule.

The Site Plan Review fee is very similar to that of the Special Use Permit. Currently there are two types of Site Plan Reviews: routine and minor. The fee associated with a routine Site Plan Review is $6,975 and a minor is $4,250. The purpose of a Site Plan Review is to determine whether a proposed use, building, structure addition or change to any building, structure or use will conform to the zoning ordinance, building and fire codes. 

The Site Plan Review insures development provides an acceptable project serving the interests of public health, safety and general welfare. The Site Plan Review process is an administrative process and does not include public hearings. The Council approved removal of the two types of Site Plan Reviews and will require a deposit of $1,250 to move through the process. Again, this $1,250 deposit would be time and material based and requires staff to track time to charge against the deposit. If City costs exceed the deposit amount the applicant would be billed for the remaining charges.

Lastly, the Council approved revising the fee for review of an expired Tentative Subdivision Map. The fee is currently $16,050. As described above with Special Use Permit and Site Plan Review, staff is proposing a fee for review of an expired Tentative Subdivision Map based on time and materials with a deposit of $1,250.

The Builders Association of Northern Nevada applaud the City of Sparks for the insight and leadership in promotion of the economic stability and job creation.

Tired of Training? There's More Coming!

OK...most of us working in construction in Nevada have obtained our OSHA 30 or OSHA 10 certifications. We're ready to hit the jobsite. Right? Wrong! Many builders and contractors who are doing small remodeling jobs while they wait for our market to stabilize are now faced with a new, pretty unpleasant mandate: Lead Certification!

The short "heads up" is that this is the brand new Lead Renovator, Repair and Painting program (LRRP) that we’re talking about, NOT the prior lead abatement program. It’s a new regulation adopted by EPA, effective in April 2010, which requires that all contractors who perform renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 where children may be present must be certified by the EPA and must follow specific work practices to prevent lead contamination. Failure to follow the rule can result in severe civil penalties and other unpleasantness. And by severe civil penalties, I mean fines of up to $37,500 per day per violation, not to mention exposure to civil liability actions with treble damages. Like I said, unpleasant.

Taken to a penultimate scenario, suppose you're all set to remodel the kitchen of an empty-nester, retired couple who plan to invite their grandchildren over for Christmas next year. They don't have children living in the home, so you're not required to comply with LRRP, right? Wrong again! Notice the "where children may be present" requirement? To remodel this kitchen, you must comply with LRRP.

The best thing a building company can do is to have a LRRP-certified person present within your company. Better yet, have two--you'll need one available in case the other is on vacation or is sick....or leaves to move somewhere where the snow doesn't fall and the cost of living is low.

Visit our website for a training schedule. We'll be adding more lead training classes in April, and will continue to offer them regularly. An OSHA training schedule is also posted. I guess the old saying is true...."if you can't beat 'em, join 'em!"

We Must Reset Property Tax at point of Sale

by Greg Peek

As our elected officials choose from a series of lesser evils to solve significant budget gaps, we have a perfect illustration of the fundamental unfairness of Nevada’s tax policy: we are too heavily reliant on business related taxes. A simple and fair way to raise millions in local revenue is to reset the assessed value of real property at the point of sale.

While sales tax, business tax, gaming tax, mineral tax, payroll tax, etc., are appropriate at some level, our reliance on business taxes has some nasty unintended consequences. Relying on single-industry taxes is akin to putting all your “eggs in one basket.” As we see today, if the industry slows, so does the tax revenue. Local governments are experiencing the whip-saw effect of our economic downturn. Continuing to raise business taxes and fees makes our state less attractive to out-of-state businesses considering relocation. We must make it easier to do business here, not more difficult. Lastly, the piling on of business tax and fees to pay for local governmental operations is fundamentally unfair.

Thirty years ago, the decision was made to depreciate homes 1.5% per year for 50 years (a maximum depreciation of 75 percent), reducing the property tax burden on the home owner and protecting long-time residents from being taxed out of their property. However, not resetting the depreciation schedule at the time the home is sold results in the new homeowner not paying his fair share by unfairly reaping the benefit given to the longtime homeowner. In essence, an individual purchasing a 50 year old home valued at $1 million is paying less property tax than a family living in a new $275,000 home.

Some have argued that resetting depreciation at point of sale violates the “uniform and equal rate of assessment and taxation” clause of the Nevada Constitution. The exact opposite is true: the current tax scheme violates the uniform and equal clause by treating homeowners differently. If the above owners are traveling the same roads, going to the same schools, being protected by the same police and fire departments, how is it fair that the owner of the $1 million mansion is paying less property tax than the family living the in the modest, starter home? Putting everyone on the same depreciation schedule from the time of purchase makes sense, is fair, and treats everyone equally.

Even California’s Proposition 13, on which Nevada’s tax cap was fashioned, includes a reset at point of sale. Resetting depreciation at point of sale would raise millions of dollars for local government. California got this one right. Why can’t we?

We urge our elected officials to seize the opportunity to institute fairness in real property taxation. Resetting real property deprecation at point of sale will protect existing homeowners from being taxed out of their home, raising much needed revenue in a fair and equitable manner. It is an easy solution to help bridge the gap in our governments’ budgets – a win-win action.

- Greg Peek is the Vice President of ERGS Properties and immediate past president of the Builders Association of Northern Nevada

2009 Housing Hall of Fame and Induction Ceremony

Members and guests of the Builders Association of Northern Nevada packed the ArrowCreek Golf Club last night to honor officers and directors and to induct three revered colleagues into the Housing Hall of Fame. Long time member and past president Ray Pezzonella conducted the ceremonies with special guest, Senator Mark Amodei.

The honors began by naming Jesse Haw as Builder of the Year. Jesse and his family are well known for their community development and generous support to local charities. Garret Gordon was named Associate of the year. Garret led the G&O task force, which revised our bylaws and association policies. He is also a new board member. Rachelle Goodness was named Spike of the year for her unwavering efforts in member recruitment and retention.

After dinner, Hall of Fame inductee Norm Diana, was welcomed with a standing ovation. Norm is known not only as an accomplished builder/developer but also as a strong supporter of the community.

About 18 of E.W. Hardesty’s family joined us to see their late family member be honored by the builders association he helped create. Hardesty volunteered to be the first president of the association that he formed with a few other builders in the 1950’s to help builders ban together as the voice of the industry.

Ray Pezonella was clearly emotional about introducing his dear friend, Bob Jones, as a Hall of Fame inductee. Bob was the Executive Director of The Builders for more than 20 years. He pioneered many of the non-dues revenue generating programs that are helping to keep us operating today. Bob also led the association from about 150 members to over 750 members when he retired in 2006.

After the Hall of Fame inductions, Senator Amodei swore in the 2009 officers and directors. As we all hope 2009 will be year of change, it brings a first to The Builders - our first female president! Pam Parenti was proudly sworn in as 2009 president with Joe Lopez taking the vice president seat, Curtis Rowe as secretary/treasurer and Pat Riley as associate vice president.

It was an elegant event where the respect and admiration for those who volunteer their time to fight for our industry, to help us create homes for people, was unmistakable.