HBA SPARTANBURG SEPTEMBER NEWS

Manning’s Statement for Housing Attainability Conference on Augt 25, 2020

The Home Builders Association is constantly engaged in all kinds of issues on the local, state, and national levels.  At the heart of everything , the HBA stands for ONE credo.  That is that home ownership should be affordable and attainable for as many folks as possible. 

If you cut way down into any position that the HBA is advocating for,     whether it is a soft wood lumber treaty with Canada;     a density requirement in a zoning ordinance,     or a tax issue at the state level;     what you will find at the core is quality affordable, attainable housing.

My day job as a home builder uniquely qualifies me for my political position as Chairman of the Spartanburg County Council, where I am not bashful about using my bully pulpit to advocate for attainable housing. There are many reasons that support my positions and bring weight to my arguments.   Let’s start with families.

Home ownership strengthens families by providing stability, and importantly ownership is the first step toward intergenerational wealth transfer.  Home ownership builds stable and sustainable families.

How about jobs?  We know that houses are where jobs go to sleep at night.  Job creation is crucial to job recruitment .  Lack of affordability can affect a community in negative ways including causing the folks who live and work in a community to have to make long commutes in search of affordable shelter. (con

 The result is more traffic and burden to our roads infrastructure. So you see , housing and specifically attainable housing should be very important to all public policy makers. 

I mentioned my day job earlier.  I make my living building market rate affordable housing, where often sales price is more important than the kitchen, main bathroom, or floor plan.  To make a living building at the bottom of the price spectrum, I have to be fanatical about controlling all of my costs.  Every subcontractor, every 2 x 4, every yard of concrete, must be carefully measured and waste cannot be permitted.  I am often carrying ½ a bundle of shingle from one house to another to be sure it is used.  These are the kinds of costs that I can control.  The hitch is that many of my costs are out of my control.  As we heard earlier, regulations, fees,  and taxes, add as much as $3,100 to the cost of a house.

Decisions over land use—what types of housing can be built in which locations—are largely made by state and local governments. One of the most common zoning laws that drives up housing costs is restricting the Multi-family housing. Because multi-family use less land per housing unit than single-family homes, they are the most affordable form of housing. Yet communities across the United States have effectively Banned them from being built in most neighborhoods—even large cities like Los Angeles and Seattle prohibit apartments on 75 percent of land. Other zoning tools, like caps on building height, minimum lot sizes, and parking requirements,also increase the cost of housing. The development process itself has become increasingly long, complicated, and risky over the past 20 years—all factors that drive up the cost of newly built housing and limit the market’s ability to respond to demand.

But federal policies also influence the cost of construction through several channels. Construction materials such as lumber and steel are subject to U.S. tariffs and trade policy. Immigration policy affects the availability of workers; about one-quarter of construction workers are foreign born. The cost and availability of mortgage loans depends on monetary policy set by the Federal Reserve, as well as lending guidelines set by public and quasi-public agencies (Fannie Mae, Freddie Mac, the Federal Housing Administration). 

A properly functioning housing market responds to changes in housing demand, in terms of the number, location and types of units needed. But in many communities, that isn’t happening. Our collective inability — and sometimes unwillingness — to remove these local impediments to housing has the obvious effect of squeezing out working- and middle-class families, driving up transportation costs as homes get pushed farther from core job centers, straining local government infrastructure, exacerbating income inequality and limiting our ability to create sustainable communities with long-term economic upward mobility for all residents.

So a final thought that I want to leave everyone with….The HBA has a neat little tool called the priced out matric.  It is a study done of the market annually.  What it tells us is how many households will no longer be able to attain housing for $1,000 rise in the sales price.  Foe the state of S.C. that number is 2,390, for my county of Spartanburg, the number is 246.  So let that sink in a bit.  Real families are impacted. 

Thanks , Manning, for many years of industry advocacy!

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MEMO

Date: June 2, 2020

To: NAHB Members

From: NAHB Chairman Dean Mon

Re: Recent Social Unrest

First, and foremost, I hope you and your families are staying safe and secure. 

We have all watched in horror over the past week as what began as peaceful demonstrations across the nation have been tainted by rioting and looting in cities from coast-to-coast. One of the violent events occurred in Washington, D.C. where the National Housing Center is located, resulting in minor damage to the building. Thankfully, there were no injuries and all NAHB employees remained safe in their homes when the damage occurred.

This is a very challenging and difficult time for our nation as communities across the land deal with the effects of the coronavirus and events that are tearing at the social fabric of our great Republic. Americans have always been defined by what brings us together, not what drives us apart. We must continue to do all we can to ensure equal economic opportunities, justice and safety for all our citizens.

I can assure that you that NAHB will continue to do all we can to meet the needs of our members, to help keep your businesses running during the weeks and months ahead, and to ensure you get the tools needed to grow and thrive once we get through these disruptive times. NAHB remains open for business and we continue to fight the good fight on behalf of all those engaged in the residential construction industry.

May God bless you and all our fellow citizens.

2020 May HBA Spartanburg News

COVID-19 and South Carolina’s Economy:

Where We Are and Where We’re Headed

By: Joseph Von Nessen, Ph.D. April 13, 2020

For many South Carolinians, the last few weeks have brought with them a level of uncertainty not seen in a long time. As the COVID-19 pandemic has spread across the United States and social distancing has become the new normal, many sectors of our economy have either been severely disrupted or completely stopped. Many workers have been laid off from their jobs and many more face the possibility of being laid off in the weeks ahead. And the stock market, which was at an all-time high just a few weeks ago, has seen a substantial contraction and is now highly volatile. Given this whirlwind of change, how can we begin to evaluate the state of our economy and the prospects for South Carolina’s recovery in the months ahead? It is important to first recognize that this current economic shock is very different from those we have typically seen before. Most economic contractions are caused by fundamental problems in specific areas of the economy that lead to steady declines in economic activity that can last for many months or even years. By contrast, right now we are experiencing an intentional pause on an otherwise strong economy as part of a proactive effort to mitigate the spread of COVID-19. In this way, our current situation is more akin to a temporary statewide shutdown in response to a major winter storm than it is to a typical economic contraction. This is one reason why unemployment has been spiking so quickly. This also implies that if the pandemic abates in a relatively short period of time, we could see our economy recover faster than we might otherwise expect. At this point, of course, we do not know how long the pandemic will last nor how long the guidelines on social distancing will remain in effect. We do know, however, that there are at least two likely paths to economic recovery for South Carolina in the months ahead after the pandemic is mitigated. If the COVID-19 pandemic abates before the summer begins, South Carolina’s economy would likely follow what economists call a V-shaped recovery pattern – that is – a steep drop followed by a steep rise. In many sectors, a pent-up demand is already being created for the goods and services not currently being purchased. Once we begin to move back towards normal social interactions, there is likely to be a surge in consumer demand that will offset some of the losses we are currently experiencing. This could set the stage for a relatively fast recovery during the second half of the year. The federal stimulus, which includes direct payments to South Carolina households and cash-flow assistance to businesses, will also help to preserve consumer spending and minimize business losses in the meantime. If, however, the pandemic extends into the summer months, many of South Carolina’s businesses that are temporarily closed right now would be increasingly likely to go bankrupt. This could lead to a second wave of layoffs as well as to disruptions in financial markets that would set the stage for further economic decline in the second half of 2020 and a much slower recovery period that could extend into 2021. Economists call this second path a U-shaped recovery pattern – that is – a steep drop followed by a slower rise. In the weeks ahead, it will be important to be on the lookout for any significant increase in the rate of bankruptcies among businesses, as this could indicate that a U-shaped recovery path is becoming more likely. One other critical factor for South Carolina’s economic recovery will be the revival of consumer confidence. Even after social distancing guidelines are relaxed and businesses are reopened, consumer spending will not likely return to pre-pandemic levels if individuals are still uncomfortable going out in public. Health officials will be able to help to minimize this “hangover effect” as widespread screenings and effective treatments are put in place. All industries are being affected by the COVID-19 pandemic and the housing industry is no exception. The single biggest predictor of housing demand is job growth, and the recent layoffs suggest that South Carolina has lost about six months of job growth in just the last three weeks alone. That’s the bad news. The good news is that a majority of these layoffs have been reported as temporary, suggesting that these workers will be hired back once the pandemic is over. Further, the long-run outlook for South Carolina’s economy remains strong. Over the past decade, South Carolina has consistently experienced both job growth rates and population growth rates that have been higher than the national average. In addition, the competitive advantages that South Carolina maintains – including strong natural amenities, a low cost of living, and a business-friendly environment – continue to make South Carolina an attractive choice for both companies and individuals. While we do not know how long this pandemic will last, we do know that South Carolina is well positioned for the years ahead.