In January, Ed Brady, a second-generation home builder based in Illinois, started his one-year term as NAHB’s chairman.
Having grown up the son of a builder and now presiding as president over his father’s company, Brady Homes, Brady is a builder by blood and has a deep understanding of the problems builders are facing. Throughout his career, he has remained active with the NAHB at the local, state, and national levels to make sure builders’ voices are heard.
This year is no different. With legislators’ minds turned toward the elections in November, Brady will seek to maintain the NAHB’s pressure on Congress and educate candidates at all levels on builders’ issues. BUILDER editor Kayla Devon caught up with the new chairman to find out which issues are at the top of his agenda.
What is the NAHB doing to ensure builders can supply homes affordable for entry-level buyers?
Part of the problem with being able to build affordable homes for that first-time home buyer is the burden of regulation and cost. We’re always advocating for appropriate regulations, but not overly burdensome regulations that won’t allow us to build houses that young professionals or families can afford. As we’ve started to come out of the recession, there are still reasons first-time buyers aren’t coming into the market: job security, mobility, down payments, the mentality of whether homeownership is a good investment. We’re primarily looking at access to credit and lower down payments so first-time buyers have options to enter the market.
The Feds raised interest rates in December. How will that affect builders this year?
The Feds raising rates in December was a long time coming and was promised for a year, if not longer. The fact that they decided to raise them is probably a good sign that the economy is moving along. It will probably have a minimal impact [on mortgage rates]. More importantly, it does have somewhat of an effect on supply—what builders and developers are borrowing for. Those [loans] are more short term, but they’re still at historically low rates. Our issue more is the availability of credit at this point, not only from the acquisition, development, and construction loan positioning, but that credit is available for us to be able to supply. We’ve had positive movement on availability of credit for our members. We’ll keep an eye on the interest rate, but we don’t think it’s going to have a huge impact on the recovery at this point.
How could the presidential election affect home building?
The NAHB is working with every presidential candidate on both sides of the aisle to raise awareness—not just of building issues, but also of small business issues—to make sure they’re aware of the complexities and the hindrances of over-regulation. This president has taken it upon himself, because of dysfunction in Congress, to push regulation by executive order, causing problems in our industry. We’re going to make sure we know where each presidential candidate stands on these issues. We also spend a lot of time helping Congress understand our issues and we do that through grassroots lobbying at our local levels. This is the third year we will have Bringing Housing Home, which gives our local members the opportunity to meet with their Congressmen and Congresswomen in their districts so we can make them aware that decisions being made in Washington really hit Main Street, USA.
What is the biggest problem American home builders will face this year?
It’s regional. In some markets, where the economy is stronger and they’re creating jobs, there are problems with lot availability and labor shortages, which means production time is down. In areas that are still struggling to recover, pricing is an issue, with the added cost of regulations and materials. It’s hard for them to compete with five-year-old homes still in a depressed state. Over-regulation is inhibiting builders’ ability to build new construction at a competitive rate because the market hasn’t recovered. A lot of Rust Belt states are behind the curve on recovery, and a lot of that comes down to job creation and stability. I’m in Illinois, which is one of the worst states for pension liabilities and debt. They don’t’ have a state budget yet. They’re at an impasse. It’s hard for companies to come into a state like that. You will see an uptick in permits this year, even in Illinois, but an uptick in permits in a state like Illinois? Well, Chicago used to have 30,000 permits a year. They may hit 6,000 or 7,000 permits this year, up from 2,000, which is a huge increase, but compared to the norm it’s still way back.
What are your goals for 2016?
I want to make sure the NAHB keeps moving the needle on the advocacy issues. You can ask the question, what is Congress going to get done in a presidential election year? As we continue to put the heat on legislative activity, we’re also working toward the regulatory activity. We’re becoming more involved in state and local issues from a regulatory burden [standpoint] because that’s where some of these battles are being able to be fought and won. I want to make sure during 2016 that our members are educated on the issues. In order to be effective, we have to work together at the national, state, and local levels to protect our industry and livelihoods. We do have an opportunity in 2016 with the presidential candidates. They are more apt to listen to us as they’re trying to be elected, and we want to seize that opportunity and continue to raise our issues.