Last week’s Board of Directors vote in favor of NAHB’s new membership fee structure exposed a disconnect of perception about the value of services that the national organization provides.
An estimated 95% of the association’s 1,200 board members voted on Thursday to approve the new fee schedule, which will increase each member’s fee by $16 in 2014, $16 in 2015, and $16 in 2017 if certain revenue thresholds aren’t met. Hitting those thresholds, explained Rick Judson, NAHB’s chairman, is contingent upon a number of factors, including increasing the association’s membership to 155,000, from its current 142,000; and taking at least 525,000 square feet of exhibition space at the International Builders' Show, excluding next year’s addition of the Kitchen and Bath Industry Show. (Last week’s IBS event took up 360,000 square feet of the Las Vegas Convention Center.)
“There’s a correlation between our membership and permits and starts,” said Judson, who spoke with Builder on Wednesday morning. “So as starts move upward, our membership should grow.”
This vote comes at a financial crossroads for NAHB, which during the housing recession was forced to make deep personnel cuts, and last year reported a $1.6 million deficit. Judson insisted, though, that the association remains “quite solvent,” and that its retained earnings are more than adequate to support its operations.
Before the vote, there was some grassroots grumbling about raising fees. “Our local chapters are already having a hard time selling membership, and were opposed to any fee increases,” said the executive director of one state HBA, who requested anonymity but personally didn’t object to new fees.
The HBAs of Michigan and Minnesota, which opposed the new fee schedule, did a line-item analysis of NAHB’s balance sheet, and reportedly came up with $5 million in cost savings. However, NAHB countered that analysis with data of its own showing that making those recommended cuts could reduce the association’s annual revenue by $5.6 million. (Builder was unable to reach the Michigan or Minnesota groups by press time.)
Judson said this vote showed that while board members are “engaged and relatively informed” about NAHB’s activities, local builders generally are not. “They don’t want a nickel’s more of expense but also don’t want any of their programs cut, their favorite ox gored.”
NAHB estimates that last year it saved each member $7,000 per permit by advocating on their behalf in such areas as building and energy codes, workplace safety, and regulations. Judson noted that builder polls consistently show that members rank advocacy highest among things they want the association to provide, followed by education and platforms for networking with other builders.
“But when you talk about paying for all these things, you get a cold ear,” Judson lamented.
He said the national, state, and local associations all need to do a better job of communicating their value to their members. However, Judson also acknowledged that the quality of the association’s 600-plus HBAs varies widely, which is why under his chairmanship he intends to conduct a “jurisdictional analysis” of HBAs across the country, “to see which ones need help, do they actually want help, and what we can do.”
John Caulfield is senior editor for Builder magazine.
Editor's Note: Subsequent to the publication of this article, the Builders Association of Minnesota responded, claiming that the state association did not take an official stand on the NAHB's fee-hike proposal. The state association also stated that it was not involved in a line-by-line analysis of NAHB's balance sheet. "In fact, BAM purposely withheld comment as the dues are paid by local associations, and not the state." BUILDER was unable to determine which local HBA in Minnesota worked with an HBA in Michigan to recommend cuts in NAHB's budget instead of enforcing new fees.
Learn more about markets featured in this article: Washington, DC.