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Volume 41 Issue 1

January 2011

· 2010 Annual Activity Report · Meet the 2011 Local HBA Presidents · Lobbying Tax Deduction for 2011 NAHB and NMHBA Dues

Official Publication of the New Mexico Home Builders Association

NMHBA Office Staff

New Mexico Home Builders Association 505-344-7072, Toll Free 1-800-523-8421 FAX: 505-344-3103 E-mail: [email protected] or Website: Executive VP & CEO, Jack C. Milarch, Jr. Governmental Affairs Director, Melanie Teeter Office Manager, Nancy Barron Bookkeeper/Bonding/Meeting Admin, Melinda Bolivar Receptionist, Kami Showalter

Special Features

6 7 9 2010 Annual Activity Report Meet the 2011 Local HBA Presidents Lobbying Tax Deduction for 2011 NAHB and NMHBA Dues

NMHBA 2011 Senior Officers

President, Mike Buechter Past President, Derrick Childers 1st VP/President Elect, Mike Richards Associate Vice President, Diana Lucero Secretary Treasurer, Pat Casey

Regular Features

2 3 Membership Statistics Message from the President No Easy Answer to Appraisal Dilemma Message from the Executive Vice President and CEO - Delay the New Energy Code? Calendar

2011 Local HBA Presidents

HBA of Central New Mexico, Garret Price South Eastern New Mexico HBA, Buddy Harbuck HBA of Eastern New Mexico, Mark Carpenter Building Industry Association of Southern New Mexico, Affil. w/NAHB, Farrell Thurston Lincoln County HBA, Juan Olvera San Juan County HBA, Dennis Ivie Santa Fe Area HBA, Linda Gammon BCA of Otero County, Jessica Beach Southwest NM HBA, Pat Casey


NAHB Representatives

National Associate Director, Betty Shaum State Representative, Peter Merrill National Director, Mike Richards NAHB BUILD-PAC Trustee, Skip Mead


About The Cover

Affiliated Organizations

Association Services Corporation dba New Mexico License Bonding Phone: 505-344-7277 Fax: 505-344-3103 Builders Trust of New Mexico Workers' Compensation Insurance Phone: 505-345-3477 Fax: 505-344-7245 Executive VP & CEO, Jack C. Milarch, Jr. COO, Randy Akin Chairman, Bob Dolgener New Mexico Home Builders Political Action Fund NMHB PAF Chair, Randy Crowder Graphic Design - The Graphics Station 505-480-8687 Printing - LithExcel Printing 505-243-8560

This new home in Rio Rancho was built by Sivage Homes and the goal was to offer a customizable, quality home at a production price. The resulting design was a BuildGreen New Mexico/ Energy Star qualified product at an affordable price point.

Membership Statistics


Central New Mexico Eastern NM South Eastern NMHBA Lincoln County Southern Southwestern NMHBA San Juan County Santa Fe Area Otero County 634 110 116 115 325 45 184 549 126

N ov

627 108 115 113 331 50 179 542 122





NMHBA Housing Journal/January 2011

There have been some improvements. Last July, Fannie Mae issued some new guidelines that provide more specifics in the valuation process, allow new sources of market data and comparable sales, allow more communication between the parties (lenders, builders & appraisers), put some restrictions on the use of distressed sales as comparables, and defined some appraiser selection criteria. These could help. The best thing a builder can do is stay involved in the process, provide both the lender and the appraiser with any information on the project and the market, make sure the appraiser knows new construction and green building, and provide suitable comparables if available. In other words, stay in there and demand a good job. Don't be afraid to complain to the lender if repo's are used when other comps are available, or if bad conditions on the repo comps are not adjusted for in the valuation. Don't allow sales under duress to become a benchmark for subsequent sales. This probably gets easier on the local level. With smaller local banks, the relationship between builder and lender is tighter and more personal, and often cemented by years of doing business together. Also, in checking around the state, most local and regional banks claim to use local appraisers, ensuring a better knowledge of local real estate values and trends. The ski area and resort locales in New Mexico have real estate values that are positively sky high compared to the surrounding lowland cities, so that local knowledge is crucial in areas like Taos, Ruidoso, or Red River. The big factor across the state seems to be comparables. In the urban areas where the repo rate is higher, repo comps are always a problem. A lot of the market is still being dragged down by this inventory of repo's, and it's going to take time to work through this backlog of foreclosed homes. The bargain hunters out there love them! The bargain hunters don't have such an easy time in the rural areas, where a smaller inventory of homes and a lower foreclosure rate keeps the number of distressed properties to a minimum. In fact, the appraiser's main problem out in the country can be finding any suitable comparables, as sales can be few and far between and most of the homes are custom built, so finding anything similar can be tough. A lot of these custom homes never show up on the real estate statistics, so some custom builders are now compiling cost figures and filing them with the local multilist organizations, in order to give appraisers some basis for comparables. Continued on page 5

Mike Buechter

No Easy Answer to Appraisal Dilemma!

Being a homebuilder has been tough for the last few years - low demand, glutted markets and the collapse of the financial system has brought many of us low and even lower. We are all competing for a much smaller group of potential buyers, not only because many potential buyers now do not have the same solid finances they did a few years ago, but also because these same buyers now face tougher loan qualifications. It's harder to get a loan. Higher down payments, tougher income requirements, tighter debt-to-income ratios, and higher credit score requirements all weed out some of our potential customers. Even the ones that manage to clear all the above hurdles face one more tough one - the appraisal process. It's tough getting a good appraisal, not just in New Mexico, but also the rest of the country. This is a national, state and local problem. Appraisals got a lot of attention last fall at the NAHB Fall Board Meeting. From across the country, builders told stories of appraisals that came in lower than the cost of the home, of appraisals based solely on repossessed comparables, or appraisals based on sales that were a year old or more. Another complaint was that many large national banks use Appraisal Management Companies or AMC's - large organizations that offer a low priced appraisal, but often use less experienced, less knowledgeable people. Also, builders complained that many out-of-area appraisers were not familiar with the particular markets they were working in. All these things add to the already tough financing equation.

NMHBA Housing Journal/January 2011


Jack C. Milarch, Jr.

Delay The New Energy Code?

A quick background review will help put this article in context. Over the past 12 months staff and members of NMHBA were very involved in Construction Industries Division's processes to "New Mexico-ize" the 2009 model building codes. As readers will remember, in addition to the usual chores such as adding an adobe code and dealing with our construction peculiarities, we were working under orders from Governor Richardson to make the New Mexico energy code for residential and commercial buildings 20% more stringent than the 2006 (our currently adopted version) model energy codes. Climate change advocacy groups were active in the process and allowed full voting rights, a departure from usual norms. It was said this needed to be done to align New Mexico with Governor Richardson's commitment to U.S. Department of Energy Secretary Chu in return for accepting federal A.R.R.A. (stimulus) funds, although our research on that subject showed NM, like other states, has until 2017 to achieve that goal. As voted on at the September 24, 2010 Construction Industries Commission, the NM code now has a two-part effective date with January 1 starting a six-month "either/ or" period where buildings may be submitted for permit on either the old or new code, and July 1 beginning the mandatory compliance with the new code. At adoption hearings NMHBA asked that the new code effective date be delayed until at least 2012, hopefully giving time for the recession to cure and also time for the federal government to show a clearer picture of their future role in building energy efficiency codes. Our requests were denied.

Commercial Real Estate Push Back While residential building codes have continuously required ever more energy efficient construction, starting in the mid 1970s, commercial construction has largely been spared from such mandates. As details of the new energy code, and in particular new requirements for commercial buildings, were studied in the late summer and fall, a "push-back" effort developed. This became an issue in the governor's election campaign. During late summer then-Candidate Susana Martinez, during a discussion of economic development issues, told a large group of commercial real estate owners and developers in Albuquerque that, if elected, she would "roll back" any building codes which make construction in New Mexico more expensive than in surrounding states. Since then, as more and more fiscal pressure is applied to our local governments, they too are becoming interested in the idea of a roll-back, citing the cost of new code documents and the cost and effort of training their plan check and field staff. According to the International Code Council's website only a very few of New Mexico's neighboring jurisdictions have gone to the 2009 code, and many are in fact using much less stringent energy efficiency mandates than even the 2006 model codes. Defer or Modify? Governor-Elect Martinez's transition team has indicated they are interested in details of how the energy codes could be rolled back or delayed. NMHBA leadership has studied the issue and has offered two possible solutions: 1) Option one would simply repeal or further delay the newly adopted 2009-based codes, including the energy codes. NM would stay on the current 2006 NM version of the codes until CID/CIC creates a new code. New codes are produced by the model code development organizations on about a three-year cycle. In practice this would cause New Mexico to "skip" the 2009 step in the cycle. 2) Option two would be to stay on the current 2006-based codes but pull a few selected items from the 2009 draft into the existing code, including some energy efficiency measures such as those changes which were created to fine tune the energy codes for counties with elevation extremes (i.e. Otero


NMHBA Housing Journal/January 2011

and Sandoval Counties). Other items, besides energy issues, could be easily pulled back through amendments to today's code. The impact of this option would be a partial update, potentially less costly for compliance. Recently we sent an email to our local association Presidents and Executive Officers informing them of this development, and we had an unusually large number of responses. A majority of those who responded said they preferred "Option 1". Call or email Melanie at NMHBA if you have any questions about specific details.

In short, there is no easy answer to the appraisal problem, no quick solution to the dilemma. Most of the regulations and laws affecting this are federal, not state or local, and NAHB doesn't expect any changes in federal banking regulations for the next few years. The feds are still reacting to the crisis of last year. The best we can hope for is gradual mitigation of the problem, as repo inventories are depleted and demand for new housing claws its way back to normal levels. We need patience as well as action.

Continued from page 3

NMHBA Housing Journal/January 2011


NMHBA 2010 Annual Activity Report

The main priorities of New Mexico Home Builders Association (NMHBA) are legislative and regulatory in nature. NMHBA staff and lobbyists work to improve the home building industry statewide by working with legislators to influence laws pertaining to housing and by participating with state officials in monitoring and creating regulations that impact New Mexico builders. Building Code Adoption Process ­ The process for modification and adoption of the 2009 Building Codes for New Mexico was an arduous process. Governor Richardson instructed his agency heads to be sure the new codes mandated highly energy efficient construction which the governor felt are needed to meet his commitment to the "2030 Challenge". NMHBA volunteers and staff worked many hours evaluating and drafting code changes to be sure the final residential construction code was achievable and cost effective. The target date for full adoption of the new code is July 1, 2011, although push-back from industry and the new administration may delay that.

Mandates for Residential Sprinklers ­ During the process of review for adoption of the building codes NMHBA volunteers and staff were successful in getting any discussion of requirements for residential fire sprinklers pushed off until July 2013. NMHBA waged a publicity campaign during the summer to pressure the Public Regulatory Commission (PRC), fire services, and Construction Industry Commission (CIC) into understanding the public does not want residential sprinklers. The PRC had stated they believed they had authority over the issue because it was related to the insurance rating of local fire departments. In the end, the PRC backed away from taking any action, and the CIC did not change the July 2013 review date in the residential code. Several bills are being promoted by NMHBA for the 2011 Legislative Session to permanently prohibit any mandate for residential sprinklers. CID Inspection Efficiency - NMHBA Executive Vice President Jack Milarch and lobbyist Randy Traynor continue to work with the Construction Industries Division (CID) to promote improvements in CID's processes to increase efficiency of code compliance processes statewide. Additional progress has come through work on the state's adoption of the 2009 International building codes. It has become obvious to all Continued on page 10

Feature Your Work on a Housing Journal Cover

NMHBA is looking for high-quality photos of your work to feature on upcoming Housing Journal covers. If you have a home or remodeled project that's worthy of notice, we want to help you show it off! Along with exterior and interior room shots, we'll also accept photos of special features such as tile work, swimming pools, fireplaces, porches, etc. Specifications: - Vertical shot 8x10 or proportional - Actual photo or on a CD (300 dpi, jpg or tif at final size) - If the photo was professionally done, please obtain permission from the photographer. You may deliver your photo(s) to our office anytime during business hours. NMHBA will determine whether or not the photo will be used. All photos will be returned to you. Please contact Nancy Barron at 505-344-7072 with any questions.


NMHBA Housing Journal/January 2011

Meet the 2011 Local HBA Presidents

Garret Price - Central New Mexico

Garret Price is Vice President Land Acquisition & Development for PulteGroup, Inc. He has several goals for his Local in 2011 including improving communication with members, providing a tangible return on investment to the membership, and continuing to focus on government affairs. He also wants to achieve a zero based operating budget with a focus only on activities that benefit the industry and the members. Garret believes in looking to the past to learn from recent challenges that have impacted the industry/association, but more importantly in looking ahead to see how to begin to move the industry/association forward. Garret and his wife Gretchen have been married for 3-1/2 years and are the proud parents of 14-month-old twin boys, Rylan and Keegan. He enjoys hiking, biking, and fly fishing. A native of Albuquerque, Garret loves being in an industry that can help influence the quality of life of the community in which he lives and works.

Dennis Ivie - San Juan County

President of EZ Shade Steel Buildings Inc, Dennis Ivie is a general contractor and a retail supplier of steel buildings and vinyl products. He has served four years on his Local's executive board. His goals for 2011 are to increase membership and revenue, provide better service to the builders and bring understanding of the HBA's value, improve community relations, and survive the industry downturn. Active in his community, Dennis is the current Chairman of Farmington Planning and Zoning Commission and the current Representative of SHELTER BOX Disaster Relief. He is also Immediate Past President of the Tres Rios Rotary of Farmington. Married for 41 years, Dennis and his wife have eight children and 16 grandchildren with two "in the oven."

Linda Gammon - Santa Fe Area

Mark Carpenter - Eastern New Mexico

A plumbing contractor, Mark Carpenter is Owner/ President of Mark Carpenter Plumbing Inc. He has been an HBA member since 1978 and this will be his third time as President of his Local Association. His 2011 goals for his Local include conducting an area membership drive and providing training for members on new energy codes/ practices. Mark and his wife Diane have been married for 39 years and they have two children ­ Julie and Brian.

A builder and a realtor, Linda Gammon is co-owner of WoodStone Custom Homes Inc and a broker with Prudential Santa Fe Real Estate. A member of her Local since 1993, she has participated in their Parade of Homes a number of times and has served on the Executive Committee for many years as Board Secretary. She has also co-edited the Parade of Homes magazine. Linda's goals for SFAHBA include maintaining the positive direction of the association and growing membership, continuing to foster the growing relationships between builders and realtors in Santa Fe, and recognizing the diversity of SFAHBA membership and ensuring that all feel welcomed and well-represented by Local leadership. Linda is married to Joe Gammon, also co-owner of WoodStone. She is active in the Susan G. Komen organization to raise awareness of breast cancer issues. She is an avid golfer and a member of "Ladies of the Links" at the Marty Sanchez golf course in Santa Fe.

Juan Olvera ­ Lincoln County

Juan Olvera is a general and insulation contractor and manager of VICI Builders LLC. His goals for the coming year are to increase membership, educate contractors on changes in the energy code, and more communication with members.

Buddy Harbuck ­ South Eastern New Mexico

Jessica Beach ­ Otero County

Buddy Harbuck is President of Harbuck Construction, Inc., specializing in new home construction. In 2011, he would like to find ways to get members more involved in his HBA. Married for 46 years, Buddy enjoys hunting and fishing.

Jessica Beach, Owner of Jessica Beach Construction, is a builder who also draws floor plans for local contractors. Her goals for her Local in 2011 include increasing its membership and its revenue. She enjoys skiing, spending time outdoors with family and friends, and traveling.

Farrell Thurston ­ Southern New Mexico

Farrell Thurston is a home builder and a realtor through his companies, Farrell Thurston Construction LLC and Thurston Realty. His involvement in his Local includes serving as Chair and as Co-Chair of their Showcase of Homes. He has also been honored with an Associate

NMHBA Housing Journal/January 2011


Member of the Year award. In 2011, Farrell will strive to increase membership, decrease expenses, and bring more value to members. He is a single father of four daughters, aged 19, 17, 15, and 7. His interests include spending time with his children, water and snow skiing, travel, philosophy, and asserting fathers' rights with their children.

Spanish-to-English Language Binders Available

NMHBA has a limited supply of English In-APinch binders to help builders and their employees conquer the language barrier at the job site. The 3-ring binder contains hundreds of constructionrelated terms, commands, and phrases in both English and Spanish. The Spanish-to-English binders (for those who

Pat Casey - Southwest New Mexico

Pat Casey has owned C5 Construction for three years and has been involved in the construction industry since 1984. Pat has been active in his Local for the past six years and has served on their Board for five years. He is currently serving as NMHBA Secretary Treasurer and as Chair of their Building Issues Committee. Pat's goals in his second year as Local President include increasing membership, working towards a full service building department in Grant County, and increasing the Local Association's involvement with NMHBA. To encourage local high school students, his Local is sponsoring a project to build and donate dog houses in the community. He and his wife Brenda have three children ­ Carley, age 15, and twins Patrick and Carson, age 12. Pat volunteers with the Silver High School Band and the Girl Scouts, and helps coach Little League and USSSA Baseball.

speak Spanish) are for sale at $60 each. Please contact Melinda at 505-344-7072 if you would like to purchase one.

Advertise in the Journal!

The official publication of the New Mexico Home Builders Association, the Housing Journal has been published for over 30 years and is sent to more than 2,300 members across the state. Advertising in the Housing Journal is an incredible value for reaching such a select market. Black & White Quarter Page Half Page Full Page Color Quarter Page Half Page Full Page $85 $125 $215 $200 $350 $600

Stuffer $250 (copies provided by you) If you have any questions, please contact Nancy Barron at 505-344-7072 or toll-free in New Mexico at 800-523-8421.


NMHBA Housing Journal/January 2011

Lobbying Tax Deduction for 2011 NAHB and NMHBA Dues

In 1993, the U.S. Congress enacted the Omnibus Budget Reconciliation Act that contained provisions affecting trade associations. The Act provided that taxpayers will no longer be able to deduct from their federal income taxes any portion of the association dues attributable to that association's "lobbying activities" as an ordinary and necessary cost of doing business. For 2011, NAHB estimates that the non-deductible portion of national dues--the portion that is applicable to lobbying is 18%. Thus, for a member who pays their NAHB dues of $150.00 in 2011, 18% or $27.00 will not be eligible for deduction as a business expense. Similarly, for an affiliate member who pays their NAHB dues of $5.00 in 2011, 18% or $.90 will not be eligible for deduction as a business expense. For 2011, NMHBA estimates that the non-deductible portion of state dues--the portion that is applicable to lobbying is 9%. Thus, for a member who pays their NMHBA dues of $110.00 in 2011, 9% or $9.90 will not be eligible for deduction as a business expense. Similarly, for an affiliate member who pays their NMHBA dues of $40.00 in 2011, 9% or $3.60 will not be eligible for deduction as a business expense. For additional information on NAHB lobbying tax deductions, contact Tracy Spatz at: 1-800-368-5242, ext. 8152.

NMHBA Housing Journal/January 2011


Continued from page 6 involved in the code adoption process that CID is unable to perform the extra code inspections required by the new codes due to taking repeated budget "hits". Municipal Inspections - Inspector shortages have ceased to plague municipalities around the state, largely because of the building slowdown. Now the focus has shifted to efficiency of the processes and facilitating better coordination and communication. NMHBA has come to the conclusion the greatest efficiencies in the delivery of inspection services can best be achieved at the local level. A package of bills are drafted for the 2011 Legislative Session to increase the number of "tools in the toolbox" for municipalities that choose to establish their own building department. Hopefully these "tools" ­ having a local Chief Building Official, utilizing combination inspectors, establishing Joint Powers Agreements with other political subdivisions, having the ability to engage third-party inspection services when necessary, and the power to collect fees and inspect public buildings ­ will enable local programs to be cost effective and sustainable. Building Relationships with Municipal Inspectors Through the past years' efforts of dealing with the problems of the dysfunctional relationship between CID and municipal inspectors, NMHBA staff has built a relationship with many chief building officials and inspectors across the state. Over the years several of these inspectors have become leaders in the newlyformed ICC Building Officials Chapters. These officials believe in the efficiency initiatives being promoted with NMHBA. Because the inspectors and building officials are now organized, they are helping NMHBA with proposed legislation. Industry Specific News ­ Our publication, the Housing Journal, keeps members up-to-date on CIC meetings by printing all CIC meeting agendas, plus NMHBA notes on items of interest. Through the President's and the EVP/ CEO's columns, members were informed of issues such as building code changes, owner-builder permits, fire sprinkler issues, and CID issues. Political Action Fund Activity During Election Cycle Creates Opportunities ­ During the 2010 election cycle contributions to the NMHB Political Action Fund (PAF) from NMHBA members were distributed to 33 candidates for the state House of Representatives. A total of $42,000 was distributed between the primary and general elections. An amazing 82% of those candidates won their elections, as did both PRC candidates and the gubernatorial candidate supported by PAF. Support of these candidates has already resulted in greater opportunities for NMHBA members to work with the incoming administration to help the regulatory environment for our membership. Builders Trust/NMHBA Contest - Once again several NMHBA members were awarded a trip to the International Builders' Show (IBS) in Las Vegas, courtesy of a funding program by Builder's Trust of New Mexico® for participant/members who've never attended the event. The Builders' Show is arguably the National Association of Home Builders' premiere activity. The recipients' impressions were published in the Housing Journal, helping to promote IBS as a significant benefit of association membership. Congressional Delegation Relationship-Building ­ This year NMHBA leadership again made a concerted effort to build and/or strengthen relationships with our state's U.S. congressional delegation. Rather than just meet with them in Washington, DC during NAHB's Spring Board meeting, we set up multiple in-state appointments to discuss pertinent issues. Though we weren't able to meet with all of the delegation, we feel it was worth the effort and have formed a better relationship with several.

Take Advantage of Your NAHB Member Discounts

Did you know that your NAHB membership can help you save money the next time you purchase an auto or a computer? Are you aware of the other companies that offer discounts to NAHB members? The following companies have special offers just for you: Hewlett Packard General Motors Hertz Office Depot Wyndham Hotel Groups & Endless Vacation Rentals Paychex FedEx Omaha Steaks FTD Solveras Payment Solutions NAHB Career Center Be sure to log on to to review all the details on member benefits available to you.


NMHBA Housing Journal/January 2011

NM Residential Building Permits ­ Now and Then

(YTD through November 2010, November 2009, November 2008, November 2007, & November 2006)

County New Mexico Balance of State* Chaves County Bernalillo County 2010 802 869 2009 802 838 2008 850 1195 2007 1401 2361 2006 1662 3611

Valencia County Total

Taos County

Socorro County

Sierra County

Santa Fe County

San Juan County

Sandoval County

Roosevelt County

Rio Arriba County

Otero County

McKinley County

Luna County

Los Alamos County

Lincoln County

Lea County

Eddy County

Dona Ana County

Curry County

Colfax County










































































































* Includes the following counties: Catron, Cibola, De Baca, Grant, Guadalupe, Harding, Hidalgo, Mora, Quay, San Miguel, Torrance, and Union Source: U.S. Census Bureau

NMHBA Housing Journal/January 2011


2011 NMHBA Meeting Calendar

January 2011 12-15 NAHB International Builders' Show Orlando 18 60-day Legislative Session begins February 21 President's Day ­ NMHBA/BT offices closed 23 Senior Officers and Board of Directors meetings/Legislative Dinner 24 Legislative Bus Trip to Santa Fe March 19 Legislative Session ends 24 Gov't Affairs and BIC meetings 25 Senior Officers and Executive Committee meetings


NMHBA Housing Journal/January 2011

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