As if continued quarterly losses didn’t make public builder shareholder meetings unpleasant enough these days, a national worker advocacy group has been staging protests at such events across the country.
In recent weeks, KB Home and Lennar have been targets of protests by the Alliance for Home Buyer Justice, a creation of the Washington, D.C.-based Laborers International Union of North America (LIUNA), which for several years has been raising pointed questions about job-site working conditions and safety. LIUNA has upped the ante lately by using the Alliance to call attention to home buyers (many of whom are contractors) who have lost their homes to foreclosure, and blaming builders whose mortgage companies originated those loans for not doing more to help their customers.
Next month, it plans to protest at Pulte Homes’ headquarters in Bloomfield Hills, Mich.
While the group’s recent protests against public builders have been relatively small in terms of people involved, they’ve garnered enough media attention to become a thorn in the housing industry’s side. Jacque Petroulakis, a Pulte spokesperson, depicts LIUNA’s actions as a “harassment campaign” aimed at unionizing construction labor. “The union doesn’t care about the quality of houses or the home buyer; its objective is very transparent,” she said in a recent interview with BUILDER.
That might be so, but LIUNA is getting harder for builders to drown out, and its message that conflates the recession with the housing industry’s “greed” has resonated with some lawmakers and investors.
Part of the reason might be because LIUNA typically frames its advocacy within the context of worker protection. A TV campaign called “Ready to Work,” which it launched last January in support of federal spending for construction and infrastructure projects, featured one union member saying that “America needs jobs and building America is the best way to create jobs.”
(LIUNA’s interests sometimes go beyond the plight of the American subcontractor. Last week, it praised Weyerhaeuser shareholders for approving a proposal filed by a LIUNA pension fund that would require the wood products giant to separate its chairman and CEO positions.)
The protests are certainly forcing builders to play defense. At Lennar’s annual meeting last week, CEO Stuart Miller spent more time than he probably planned on defending his company’s lending and construction practices. While he reportedly kept his cool, Miller found himself in the uncomfortable position of having to state that Lennar was against more foreclosures, as if that weren’t already a given.
The Miami Herald quoted union officers who said that LIUNA had filed a Fair Housing complaint with HUD accusing Lennar and its mortgage subsidiary of targeting Latino buyers with subprime mortgages. (A Lennar spokesman told the newspaper that the builder had not been notified of any complaint.)
The New York Times reported that, at LIUNA’s urging, an assemblyman in California has introduced a bill that would prohibit builders in that state from lending money to home buyers through affiliated mortgage entities. The Times’ article quoted Santiago Ramos, a home buyer protesting at KB’s recent shareholders meeting, who claims that Countrywide Financial—KB’s preferred mortgage lender—“pushed” him into signing an interest-only loan in 2005. Ramos also alleges, without elaboration, that Countrywide threatened to sue him if he didn’t sign the contract.
In an email to BUILDER, KB Home spokesperson Heather Reeves declined to comment beyond a company statement, which read: “While we respect the union's right to voice its opinion, we strongly disagree with their assertions.”
Pulte, though, has been far more aggressive in trying to counter LIUNA’s attacks, which include a survey conducted by the AFL-CIO of 872 Pulte and Del Webb home buyers in Arizona, Nevada, and California, more than three-fifths of whom claim their homes had construction defects.
Petroulakis calls the survey and its sampling methodology “unscientific” and “flawed.” “It doesn’t even define the term ‘defect,’” she points out. “It was created, compiled and edited by [LIUNA], and we don’t believe the results are even close to being accurate.”
As for LIUNA’s ongoing assertions about poor working conditions and shoddy construction at Pulte’s job sites, Petroulakis says her company has asked the union to offer specific proof. “We’re still awaiting their response.”
John Caulfield is a senior editor at BUILDER magazine.