BIA Advocate

The U.S. Census Bureau data on characteristics of new homes completed in 2009 provides an interesting snapshot of emerging housing preferences and trends.

• The recently released data shows that, after increasing almost continuously for three decades, the average size of single-family homes completed in this country last year was 2,438 square feet – down from 2,519 square feet in 2008 and from a peak of  2,521 square feet in 2007. 
• In keeping with their slightly smaller size, new single-family homes completed in 2009 had fewer bedrooms than previously. In fact, after increasing for almost 20 years, the proportion of single-family homes with four bedrooms or more topped out at 39% in 2005, but has since declined to 34% as of 2009. 
• The proportion of single-family homes with three bedrooms increased from 49% to 53% between 2005 and 2009. Not surprisingly, new single-family homes completed last year also had fewer bathrooms than previously. The proportion of homes with three or more bathrooms fell to 24% last year from a peak of 28% in 2007 and 2008.

Here are a few other interesting data points about new homes completed or sold in 2009:

• 17% of new single-family homes sold in the U.S. had a 3-or-more-car garage.
• 53% of single-family homes completed in the U.S. had 2 or more stories.
• 49% of new single-family homes sold had 1 fireplace and 5% had 2 or more fireplaces.
• The average new single-family home sold was built on a lot of 17,462 square feet. 
• 62% of all new single-family homes sold used gas as the primary source of heating fuel. 37% used electricity. In the South, 43% of the new homes sold used gas.
• 50,000 new single-family homes sold were designed as attached units, accounting for 13% of total new single-family home sales.
• 24% of all new single-family homes sold were financed by an FHA-insured loan. This compares to 16% in 2008 and 4% in 2007.
• The average sales price of new single-family homes sold was $270,900. This compares to $292,600 in 2008 and $313,600 in 2007.
• The average price per square foot for new single-family homes sold was $83.89.
• 274,000 units were completed in multifamily buildings. Of these, 24% were built for sale. 
•  The average square footage of multifamily units completed and built for sale was 1,592.

It’s time for a Public Policy update on the top issues we are following at the BIA on behalf of our members.  Please let me know if you have any questions or concerns about anything on this summary.

Political Action Committee. The Political Action Committee of the BIA has continued its fundraising work on behalf of our industry and we will have 100 people attending a Clippers’ at the new Huntington Ball Park on this Thursday, August 6. This is a make-up date from the rain-out in July. If you would like to attend at this late date, please contact Jana at 891-0575. Tickets must be paid for with personal checks and are $60 and include food and drink.

AEP Line Extension Charges. We had a recent conference call with the staff of the PUCO, utilities companies from around Ohio (including AEP), and builders from around the state. Several BIA members participated in this call. The PUCO is trying to have a standard rule/policy regarding costs for line extension services. We are concerned with both cost and service standards in central Ohio. We are waiting follow up from the PUCO and OHBA.

The important message from our conference call is that most utilities consider underground service to be standard service, not premium, particularly when there is underground service around a site.

Columbia Gas Service Installation. OHBA is helping to organize a meeting with Columbia officials in late August to continue our efforts to improve service predictability and reasonable cost certainty when dealing with Columbia. The Developer’s Council of the BIA met with Columbus officials a few months ago; however, significant challenges remain.

Prevailing Wage. We celebrate the Ohio Supreme Court’s recent ruling which upheld our position on prevailing wage applicability in public/private partnership developments. This issue impacted our overall economic climate and also potentially had direct impact on residential and commercial redevelopment projects.

Local Community Fees. We are continuing to meet in selected communities to discuss excessive charges (Pickerington – Impact Fee’s and Delaware City – multi-family capacity charges are two examples).  If you have particular communities and circumstances that you think the BIA should know about, don’t hesitate to give me a call.

Columbus Fire Hydrant Policy. Columbus has implemented a new policy to restrict the use of hydrants by developers/builders for purposes of watering new sod installations. This policy is a part of the City’s efforts to better comply with OEPA regulations. We are exploring alternatives that might allow some flexibility for continuation of this service.

Franklin County Conservation Zoning. A committee of BIA members has been meeting with the County and townships regarding their desire for a new zoning classification. If you have any interest in this issue, let me know so you can be connected to this group.

Developer’s Council meeting is today at 3:30 p.m. to discuss these issues and more.

Columbus Single Family Building Permits – The City of Columbus 2009 building permit numbers are providing some reasons for optimism.  Through July we are at 579, compared to 602 for all of 2008.

Tracie Davis from the City of Columbus who tracks building permit numbers (among other things) shared this with me last week.  It was worth repeating and I’ll let it speak for itself.  Thanks for the good news, Tracie!

“Through April of 2009 we have had 271 new applications for single family home permits.  In the first eight days of May we have already received 40 applications.  In comparison, January  through April 2008 application submittals were 182.   The numbers are definitely up for this year thus far. “

About a week ago, NAHB Chief Economist David Crowe voiced optimism that the single-family market is nearing a bottom, largely as the result of the massive economic stimulus package enacted last month. Home sales, he said, are expected to bottom out in the current quarter and starts should show “some recovery” in the second half of the year. However, he noted, the improvement won’t be “robust” because of the large overhang of vacant homes on the market.

We wanted some local perspective on this comment, so we turned to Ken Danter.   As you may or may not know, he spends his life providing feasibility studies and other research used by planners, builders, developers, government officials and more.   He has helped us, among other things, with our BIA economic forecast the last few years.

He replied to Crowe’s comment:

“Locally, the turnaround was expected to begin by mid 2009 without the stimulus package. Assuming improved buyer confidence, which should also be generated by the stimulus package; we would expect a fairly active housing market by the third quarter.”

For those of you that know me, I would have naturally thought his outlook would have a bit more gloom.  But he’s close to making me an optimist yet.

In one of my first posts, I discussed how the Delaware County Commissioners were looking for an extremely needed Economic Development Director. Today, I want to applaud the Commissioners for persevering at landing Gus Comstock, former Economic Development Director for the City of Delaware, for the position.

This position is valuable to all in Central Ohio and the fact that it had been vacant for 18 months was unacceptable. Good for the new commissioners to remain focused on solving this immediate challenge.  Here’s a recap of the story from This Week news.

Development post County ups ante to secure Comstock
Saturday,  April 4, 2009 7:03 PM
By CANDACE PRESTON-COY
ThisWeek Staff Writer
Delaware city development director Gus Comstock — who last week turned down the job of Delaware County development director at $87,000 a year — will take it at $91,000.
County commissioners Tommy Thompson and Todd Hanks on March 30 voted to increase Comstock’s pay offer to $91,000.
Comstock is too valuable to the future of Delaware County to let a few thousand dollars keep him from accepting the county’s economic development coordinator position, Thompson said.
On his application for the county position, Comstock asked for a salary of $92,000. His base salary as Delaware development director is $84,000 a year.
Comstock said the county job is a “tremendous opportunity” and he looks forward to playing a broader role in county development.
Commission vice president Ken O’Brien voted against the new offer, saying it was not fair to offer Comstock more money, when the commissioners are asking others to cut their budgets.
“I want to know where the money will come from to pay him,” O’Brien said. “We have a (budget) shortfall and I hate to take it from other people who have been effective for the city.”
Thompson said he understands O’Brien’s concerns but the county stands to lose more money than the extra $4,000 in salary through lost economic development opportunities.
Comstock can hit the ground running, he said, because he already knows who is interested in locating to the county and who could be persuaded to locate here.
Hanks said the immediate answer about where the money will come from is out of the $313,000 in carryover funds the county expects to have at the end of 2009.
That amount represents less than 1 percent of the county’s annual budget, O’Brien said, when county policy states they should have a 20 percent carryover to protect the county’s bond rating. “I think Mr. Comstock is a highly qualified individual but we’re robbing Peter to pay Paul.”
“I am real concerned that for 18 months we have not had an economic coordinator. … We have also not spent money for a 911 director,” Thompson said.
“If we continue to do this with these critical positions, we will find ourselves behind the 8 ball and we’ll pay for it for the next 10 years,” he said.
“We are at the cusp when this thing (economic development in the county) breaks open. … We need to have someone in place who understands the county,” Thompson said.
After the vote O’Brien said he will “do all I can to welcome Mr. Comstock. … There are a great many things that can be accomplished in this county. I look forward to working with Mr. Comstock.”

The possibility of mandatory sprinker systems for single family homes in Ohio is now in the hands of the Ohio Board of Building Standards (OBBS).

On March 17, the Ohio Home Builders Association held a roundtable meeting with OBBS members and staff, as well as building officials from around Ohio to discuss the OBBS process for new code adoption and the best methods to provide input on potential new codes.  This meeting and discussion was based on the process used for the previously adopted energy and electric codes, and the new energy and sprinkler codes that will be considered by OBBS.

In 2008, the International Code Council held a very controversial vote to include mandatory sprinklers in its code book. The NAHB cried foul over the voting process - after defeating this issues several times in the past.  Approximately 700 individuals attended a Sunday morning session to vote only on agenda items related to sprinklers – a near doubling of votes counted when compared to every other issue considered at the conference. NAHB’s appeals were denied and the recommendation stood.  On a web site of advocates for mandatory sprinklers, a recent headline on a story was telling to help demonstrate that this issue will not go away soon:

Residential Fire Sprinkler Market Potential Exceeds $3 Billion Annually –
Over 10,000 Additional Skilled Workers Needed
(Residential Fire Sprinklers .com)

Today we had a terrific turnout at the Economic Forecast where Ken Danter from the Danter Company and Bill Lafayette from the Columbus Chamber presented some thought-provoking analysis to our members and about 50 public officials.

In this video, we asked Ken to summarize his findings and afterwards, we gathered feedback from attendees.

BIA Economic Forecast from Bia Advocate on Vimeo.