AN INHOSPITABLE MID-JANUARY MORNING rain in Orlando wasn't so much falling out of the sky as it was knifing in at you, horizontally. There was no escaping it. Outside a hotel lobby, waiting for a car, his face practically tearing with raindrops, California Building Industry Association CEO Bob Rivinius shrugged off the inclement weather with the smile of one who's seen and done it all. California homes mud-sliding into ravines and untold armies of builders parachuting into the Magic Kingdom for a long weekend off site but on the job, to Bob, are but a couple of the most recent phenomenal phenomena to speak of.
“Nice hotel,” we nodded by way of greetings as we headed in for breakfast during last month's International Builders' Show. “Yeah,” he said with a sodden grin, “and only four hours from here to the convention hall.” MapQuest promises three turns, 3.86 miles, and—normally—six minutes door to door from the hotel to the convention hall entrance. With 104,000 extra people from all over the world in town for the annual builder show, normal washed away down some International Drive storm drain, as miles-long streams of cars throttled the roads into and out of Orange County Convention Center.
In the land of Disney Florida, goofy would figure to be the new normal. So, if you happened to get stuck in convention center traffic for hours, you just turned on the phone and the blackberry and simply kept on working.
Subcurrents of the show, for big builders anyway, were less about new product intros and more about strengthening top-to-top relationships with mega suppliers and improving information infrastructure to manage those millions of moving parts across their morphing, ravenous enterprises. In the high-volume group, it's getting to be less about the hardware it takes to make a house, and more about the metrics management can control to make the business grow, and about influencing the environment—even if they can't change the weather.
When an industry sector's enterprises get this big, they're actually interacting with and influencing factors that create and satisfy demand in that marketplace. Fannie Mae and Freddie Mac, for example, the guardian angels of America's trove of easily gotten home loan money, suddenly seem to be triggering all the red flags they'd slickly eluded for years as—at tremendous profit to their shareholders—they helped make homeownership a reality for many who'd otherwise still be dreaming of it. In his role as a representative of the Public Home Builders Council of America, Zvi Barzilay, Toll Brothers' president and COO, cautions that it's not necessarily in everybody's interest that a bit of increased scrutiny will lead ultimately to continued Fannie and Freddie health and well-being. Federal Reserve Bank maestro Alan Greenspan, Barzilay suggests, might be happier if the GSEs went away, as they often appear to act in blatant disregard for his economic policy orchestrations, not to mention competing lenders who don't have access to the world's money as cheaply as Fannie and Freddie do. “Public builders believe that a healthy Fannie and Freddie are an important part of America's housing future,” says Barzilay. A good share of the brain trust among production builders is going toward figuring out how to identify and get behind a “let's just get back to work” resolution to all the notoriety around the GSEs.
“The debate will wind up focusing on oversight,” says Centex Homes' president and CEO Tim Eller. “It'll be an issue of who's going to have the ability to oversee them, and secondly, how to reinvest some percentage of their profitability” into public programs.
Big builders may not be able to control the weather, but they're bound to go to all extremes to influence the environment—political and economic—they're working in to keep their organizations' fortunes growing. And Orlando has a year to figure out traffic routing plans before it all comes around again.
John McManus, Editor
Learn more about markets featured in this article: Orlando, FL.