BASF Trustees meet with two Members of Congress on possible High-Rise Building Height Limits


At their March 12 Quarterly Luncheon, the BASF Trustees will hear from two Members of Congress from the South Florida delegation regarding the possible FAA height limitations on downtown high-rise buildings. Congresswoman Frederica Wilson (D-24) and Congressman Carlos Curbelo (R-26) will be two of the four panelists to discuss this important development issue before the Trustees, a select group of builders and developers from Miami to Fort Lauderdale. For reservations, contact or call BASF offices.BASF (Trustee Event eblast)

House Approves tax extenders bill – Senate takes bill up next….

Here’s latest housing news from Capitol Hill…..FYI, TB

House Approves Tax Extenders Bill

Filed in Capitol Hill by on December 4, 2014 0 Comments

99743632By a wide bipartisan 378-46 margin, the House last night approved H.R. 5771, the Tax Increase Prevention Act, which will renew scores of temporary tax provisions known as “tax extenders” that expired this year, including several of interest to the housing community. The one-year retroactive renewal is through 2014 and dates back to Jan. 1.

NAHB is disappointed that a longer term deal was not reached, but the political situation and the calendar have forced Congress into a one-year deal everyone hoped to avoid.

Just one week ago, Congress was headed to a bipartisan, bicameral deal which would have extended all of the expired provisions for two years through 2015. The agreement also would have also made a handful of extenders, such as the research and development tax credit, permanent.

Just hours after word of the agreement leaked out, the White House scuttled the deal by announcing the President would veto any bill that contained these permanent provisions.

In a letter to the House prior to the bill’s passage, NAHB urged lawmakers to support the legislation. We also expressed concern that these short-term tax bills create difficulties for our members by denying builders the certainty needed to finance complex projects and called on Congress to act quickly on a longer-term deal in early 2015

Key provisions in the tax extenders package for 2014 (retroactive to Jan. 1) include:

  • Section 45L Tax Credit for Energy Efficient New Homes. Provides builders a $2,000 tax credit for exceeding energy standards by 50%. The base energy code is the 2006 International Energy Conservation Code plus supplements. Section 45L is expected to save home builders $267 million in taxes for 2014 construction activity.
  • Fixed Credit Rate for 9% Low Income Housing Tax Credit projects. The bill will renew the 9% fixed rate, but only for 2014 allocations.
  • Section 25C Tax Credit for Qualified Energy Efficiency Improvements. This is a credit worth up to $500 (subject to a $500 lifetime cap), with lower caps for certain products like windows, for consumers to install qualified energy efficient upgrades. Remodelers often leverage 25C tax credits when working with clients. Section 25C is expected to save home owners who remodel $832 million in taxes for 2014 improvements.
  • Section 179D Energy Efficient Commercial Buildings Deduction. Provides a deduction up to $1.80 per square foot for commercial buildings, including multifamily buildings built under the commercial code, that exceed specific energy efficiency minimums.
  • Section 163 Deduction for Private Mortgage Insurance. Allows taxpayers, subject to an income cap, to deduct premiums paid for private mortgage insurance. The deduction for PMI is expected to save home owners $919 million for tax year 2014.
  • Bonus Depreciation. Extends the 50% bonus depreciation.
  • Section 179 Expensing. Increases the maximum expensing amount to $500,000 for qualified property on up to $2 million in property placed in service.
  • Short-sale mortgage debt forgiveness. The provision would extend through 2014 the exclusion from gross income of a discharge of qualified principal residence indebtedness due to a short sale.

The Senate is expected to take up and pass H.R. 5771 next week.

Latest on October Housing Prices – from Florida Trend

Tuesday’s Afternoon Update

What you need to know about Florida today

| 12/2/2014

Home prices accelerated in October

U.S. home prices rose at a faster year-over-year pace in October than in September, snapping a seven-month slowdown. Still, home values are rising more slowly than they were earlier this year, when 12-month gains were averaging nearly double their current pace. More at the AP.

NAHB’s Snapshot of Economy: October Home Sales and Consumer Confidence Stats…..

Included in your BASF  “Three In One”  Membership:
Snapshot of the Economy from the National Association of Home Builders in Washington, DC
Contact any NAHB staffer in their Economics Dept for more detailled information…TB

National Association of Home Builders
December 1, 2014
David Crowe
NAHB Chief Economist
Eye on the Economy


Sales Flat But Confidence Rising

Sales of new single-family homes were up 0.7% over a downwardly revised pace for September, according to the Census and HUD October report. The seasonally adjusted annual sales rate came in at 458,000 for the month, only 1.8% higher than the October 2013 sales rate. Inventory of new single-family homes for sale rose to 212,000, but this remains only a 5.6 months’ supply at the current sales rate.
Inventories have been rising along with builder confidence. The November NAHB/Wells Fargo Housing Market Index of single-family builder sentiment rose four points to 58 due to promising long-run trends. The November reading marks the fifth consecutive month for the HMI to come in above the tipping point of 50. All three components of the index (current sales, expected sales and buyer traffic) posted gains in November.
Future sales should be supported by improving hiring in the economy and continued low mortgage interest rates. For instance, according to FHFA data, the average effective contract interest rate for mortgages associated with newly built homes was 4.23% in October. While the NAHB/Wells Fargo Housing Opportunity Index slipped to a level of 61.8, from 62.6 in the second quarter (meaning 61.8% of new and existing homes sold during the quarter were affordable to a family earning the U.S. median income), monetary policy will support favorable interest rates in the months ahead, as recently published minutes from the Federal Reserve’s Open Market Committee detail.
Construction of single-family homes also picked up speed in October, according to Census/HUD estimates. Starts for single-family homes were up 4.2%, which at a 696,000 seasonally adjusted annual rate marks the fastest pace since early 2008. Permits also increased for the month.
However, total housing starts were down 2.8% in October due to a 15.4% drop in the volatile multifamily apartment construction sector. Despite these monthly ups and downs, average multifamily starts remain in the healthy range of over 350,000 per year. And multifamily developer confidence remains strong. The NAHB Multifamily Production Index registered a level of 54 for the third quarter. This was an increase of 4 and was the 11th consecutive quarter of a reading at 50 or above. And rents continue to rise, with NAHB calculations of CPI data indicating an increase for inflation-adjusted residential rents of 1.5% from October 2013.
Third-quarter data of housing construction reveals a number of notable trends. For example, for two consecutive quarters the average size of newly built single-family homes has declined. Average home size has risen in the post-recession period due to an atypical market mix that is relatively stronger for wealthier home buyers. Median home size should fall as first-time buyers return to historical levels in the new home market.
Typical new multifamily unit size remains low due to historically high levels of for-rent development and persistent relative weakness for condo development. In contrast, the market for single-family built-for-rent units appears to be cooling off, after reaching historically elevated levels from 2008 through 2013.
Townhouse construction is regaining steam again, with the current market share (as measured on a one-year moving average) standing at 11% of single-family starts. The same trend appears to be in place for custom home building (owner/contractor built), with this sector’s market share reaching approximately 24% of single-family starts (on a one-year moving average basis) during the third quarter.
Turning to the resale market, the National Association of Realtors reported that pending existing home sales decreased 1.1% in October, although the Pending Home Sales Index was 2.2% higher than a year ago. Completed existing home sales were up slightly for the month, rising 1.5% over the September pace and 2.5% higher than October 2013. Inventories are low, decreasing 2.6% in October and representing only a 5.1 months’ supply at the current sales pace.
Recent FHFA and Case-Shiller housing data indicate that home price appreciation has cooled but continues to grow. The FHFA data shows 4.3% annual growth for September, while Case-Shiller reveals 4.8% appreciation. Improved housing prices and labor market performance continue to reduce mortgage delinquencies. According to data from the Mortgage Bankers Association, the share of mortgages more than 90 days past due fell to 2.3% for the third quarter, down from the market peak of 5.1% at the end of 2009.
Some easing of residential construction headwinds was recorded during the fall. Softwood lumber prices fell 3.1% and OSB prices were off 2.9%. However, gypsum prices rose 1.1% after declines in the prior two months and prices are expected to rise into 2015. And the count of unfilled construction sector jobs fell from 121,000 in August to 98,000 in September. Access to labor has been a key builder challenge in recent years.
Underlying macroeconomic trends should help support growth for housing going into 2015. Third-quarter GDP growth was revised up to 3.9% from an initial read of 3.5% due to improved reading for investment and personal consumption expenditures. And consumer sentiment indicators are at or near post-recession highs.
In analysis news, NAHB economists recently detailed industry survey data concerning the cost implications and concerns regarding building code changes. The data indicate that 35% of single-family builders are extremely concerned about code impacts.

Latest Posts


A Degree of Separation

Spurred by improved personal finances and a favorable outlook for employment, the Thomson Reuters/University of Michigan Consumer Sentiment Index increased for the fourth consecutive month in November and reached its highest level since July 2007. Posted Nov. 26.


October New Home Sales

New home sales posted a slight gain in October after downward revisions for prior months, according to data released by the Census Bureau and HUD. Posted Nov. 26.


Pending Sales Trend Down

Although pending home sales decreased 1.1% in October, the index was up from the previous year. Posted Nov. 26.


Annual House Price Growth Continues, But at a Slower Pace

Recently released data by the Federal Housing Finance Agency shows that its measure of house prices, House Price Index – Purchase Only, rose by 4.3% on a 12-month seasonally adjusted basis in September. Posted Nov. 25.


GDP Growth in the 3rd Quarter – Momentum? Revised Up To Probably

Growth in economic output was revised upward to a seasonally adjusted annual rate of 3.9% from 3.5% in the advance estimate. Posted Nov. 25.


Interest Rates Remain Stable on New Home Loans

The Federal Housing Finance Agency reported a 5-basis-point increase in mortgage interest rates for October newly built home sales. Posted Nov. 25.


Custom Home Building Market Expanding

The custom home building market has recorded two consecutive quarters of strong production. Posted Nov. 25.


Townhouse Market Growing

Total townhouse construction was up on a year-over-year basis during the third quarter. Posted Nov. 24.


Single-Family Built-for-Rent Market Share Closer to Historical Levels

Single-family starts built-for-rent held steady at 6,000 starts for the third quarter. While the market share of built-for-rent single-family homes remains somewhat elevated, the share and count of starts are off post-recession highs. Posted Nov. 21.


Multifamily Market Sentiment Off Recent Peak

NAHB’s Multifamily Production Index reached 54 in the third quarter, four points below the previous quarter’s reading. Posted Nov. 20.


Existing Momentum

Existing home sales increased in October for the second consecutive month, and exceeded year-over-year levels for the first time in a year, despite no improvement among first-time buyers. Posted Nov. 20.


Energy Prices Continue to Fall

Over the past 12 months, prices on expenditures made by urban consumers increased 1.7% before seasonal adjustments. Posted Nov. 20.


Multifamily Built-for-Rent Share Remains High

An elevated market share for rental multifamily homes is holding typical new apartment size below levels seen during the housing boom. Posted Nov. 20.


FOMC Minutes – A ‘Considerable Time’

FOMC minutes make clear the widespread agreement among participants that the asset purchase program has achieved its stated goal of substantial improvement in the outlook for the labor market and should be concluded. Posted Nov. 19.


Single-Family Home Size Leveling Off as Market Recovers

The average size of newly built single-family homes has declined for two consecutive quarters as the overall housing market recovers. Posted Nov. 19.


Housing Construction Continues Upward Trend

Single-family home construction increased 4.2% in October to top off at 696,000 on an annualized basis. This rate is the second highest since early 2008. Posted Nov. 19.


Inflation at the Producer Level in October: Wood Products Soften, Gypsum Rises

Inflation in prices received by producers (prior to sales to consumers) increased 0.2% in October after a 0.1% decline in September and no change in August. Posted Nov. 18.


Builders Continue Optimism

The November NAHB/Wells Fargo Housing Market Index rose four points to a level of 58 as builders continue to see promise in home selling. Posted Nov. 18.


Mortgage Delinquency Rates Fall

Recently released data from the Mortgage Bankers Association shows that the share of mortgages that are considered delinquent has fallen. Posted Nov. 17.


Evolving Building Codes: Many Builders Worry about Costs without Benefits

Many single-family builders are worried about the cost implications of the way building codes are evolving, especially codes associated with fire sprinklers and energy efficiency. Posted Nov. 14.


Job Openings Decline with a Rise in Hiring

The number of open, unfilled construction sector positions declined in September, after increases in hiring during the end of the summer. Posted Nov. 13.


Housing Affordability Slightly Lower in 3rd Quarter

Firming home prices in markets across the country contributed to a slight dip in nationwide housing affordability in the third quarter of 2014. Posted Nov. 13.

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Latest National Housing News……

Favorable Decision in Liability Insurance Court Case
With insurers increasingly citing the “contractual liability exclusion” as a reason to avoid paying for damages covered by home builder liability insurance policies, a recent decision by the Fifth Circuit Court of Appeals is good news for the housing industry.

Code Change Proposals Will Now Come with Price Tags
In a big win for NAHB and the home building industry, the International Code Council (ICC) has taken a significant step forward in ensuring that code change proposals come with price tags.

NAHB Analysis of Election Results
NAHB’s Government Affairs staff has prepared an election summary that explains how the Nov. 4 results will affect the political landscape and our policy agenda for the next two years.

Early Pricing for IBS Registration Ends December 5
What are you waiting for? Time is running out to save with early pricing on IBS registration options, so register by December 5.

Electricity Use Traceable to Household Behavior
The behaviors and habits of people moving into a new home can easily have a larger influence on energy consumption than items a builder may be able to control, according to research recently published by NAHB.

Codes Victories Mean Real Savings
NAHB’s victories on proposed building code changes saved the typical builder roughly $1,477 per new home started by keeping costly provisions out of building codes. Look over this value-of-membership infographic to learn more.

Unintended Consequences and Slower GDP Growth

Elliot Eisenberg, Ph.D.,
GraphsandLaughs, LLC
October 2014

Over the past 60 years GDP growth has been spectacular, averaging close to 4%/year with GDP doubling every 20 years. More recently, GDP growth has been lackluster, averaging about 2%/year since 2000. As a result, GDP now doubles every 35 years. In part this slowdown is due to the recession, slowing population growth and a lack of corporate investment in plant and equipment. These are temporary problems that should not be overblown.

By contrast, those who believe in “Secular Stagnation” ascribe the recent GDP slowdown to the fact that our economy is mature, that our best days are behind us and that technology can no longer deliver like it has. While I think the notion of Secular Stagnation is bunk, our GDP growth of the last century or century and a half has been, without a doubt, artificially inflated.

This is because we have ignored the “law of unintended consequences.”
Every time we invent something new, more often than not, something unexpected goes wrong. Burning coal, which brought about the industrial revolution, badly fouled the air leading to the premature deaths of millions. The automobile helped usher in acid rain, gaining access to cheap sugar created tooth decay, working at computers all day is making us fat, asbestos causes lung cancer, antibiotics create super bugs, aerosol almost destroyed the ozone layer, leaded gasoline lead to lead-poisoning, chemical dumping and the burning of fossil fuels releases mercury into the air and from there, rainfall washes it into the ocean and into fish. And now we face the enormously expensive issue of global warming. (And don’t even ask about Dodd-Frank).

My point is not that technological progress is bad. Quite the contrary, it’s great, but it’s not quite as great as we think because the negative consequences arising from it are never accounted for. The premature death of a coral reef, the rise in skin cancer rates and the eutrophication of coastal waters – to give just a few examples- are ignored when calculating GDP. And these costs, along with the costs of remedying these damages are both large and unknown. Moreover, monies spent cleaning up the messes caused by technological progress actually make GDP bigger. Now that we are more aware of “unintended consequences” we may be less optimistic about the future. And GDP growth going forward may be slower than in the past, but this is not due to Secular Stagnation. It’s simply a sign of economic maturation along with a better awareness of our impact on the planet.

Moreover, this realization should not cause us to give up on technological innovation. As a matter of fact, the only way to fix the problems mentioned above is with more technology. Genetically modified food is the only way we are going to feed the fast growing population of the planet and the impact of global warming and rising sea levels will only be mitigated with new building technologies and improved energy sources, even though they will undoubtedly cause unintended consequences.

Compared to 10, 20 or 30 years ago, GDP growth appears to be slowing. Some of the reason is cyclical, but some is because our estimates of earlier GDP growth were excessive because we did not take into account the unintended consequences of new technologies. What is for sure is that if we stop designing and applying new technologies to solve problems, GDP growth will slow further.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at His daily 70 word economics and policy blog can be seen at

BASF-PAC Endorsed Candidates – Tuesday, August 26 2014 Primary Election

Miami-Dade and Broward County Endorsed Candidates List

from the political action committee of the  Builders Association of South Florida Chapter, BASF

Primary Election Day: Tuesday, August 26, 2014

Miami-Dade County Commission
 County Commission District 2: Commissioner Jean Monestime
 County Commission District 8 : Commissioner Lynda Bell
 County Commission District 10: Senator Javier Souto
 County Commission District 12: Commissioner Jose “Pepe” Diaz

Florida House of Representatives
District 100 – Mr. Joseph Geller (D) (Miami Beach, Aventura, Hollywood)
District 111 – Mr. Bryan Avila (R) (Hialeah, Miami Springs)

pd.po. adv.

Reservations About The Dollar

Elliot Eisenberg, Ph.D.,
GraphsandLaughs, LLC

Since the start of the Great Recession of 2008 and the Fed’s decision to inject trillions of dollars into the banking system, there has been constant talk of the US dollar losing its position as the world’s reserve currency, the position it has held since the end of WWII.  After all, our debt is huge and growing, DC is thoroughly dysfunctional, our share of the world economy is shrinking and China is increasingly pushing for a post dollarcentric financial system.  Despite all the concerns above, the dollar’s position as the reserve currency of the world is safe for a long while.

First, which currency can realistically unseat it?  The British pound is simply too small to do the job as the British economy is about 1/7th the size of the US economy.  As for the euro, while it is large enough, there are too many structural problems including weak growth, over taxation, an inflexible central bank and the outside possibility of the collapse of the monetary union to entice many central banks to significantly increase their euro holdings.

As for the Yen, Swiss Franc or Chinese renminbi, you have got to be kidding!  With a debt to GDP ratio greater than that of Greece, Japan makes the US look downright fiscally responsible. Moreover, Japan and Switzerland are both pushing down the value of their respective currencies making them that much less appealing to hold.  Lastly, the renminbi does not freely float and there are significant foreign exchange controls in place.  As a result, it will take at least a decade before China has the necessary legal framework and deep and open financial markets that are a necessary prerequisite before the renminbi can become a credible reserve currency competitor.

Second, because of increased capital flows between nations due to increases in trade and investment, central banks have been repeatedly told by their respective governments to hold larger quantities of safe and easy-to-sell assets which can be easily liquidated in time of crisis.  As a result, total foreign reserves have nearly quadrupled in the past decade and this has dramatically increased the demand for dollars.  For example, when foreign capital suddenly flees a developing nation, it puts downward pressure on the local currency.  By selling some of its dollar holdings to purchase its own currency, a country can stabilize its currency and avoid large currency swings.  Moreover, simply holding a large supply of highly liquid foreign assets, like dollars, discourages speculation and demonstrates that a nation has the necessary reserves to pay foreign creditors for things like oil and wheat.

Lastly, with large holdings of dollars the last thing foreign nations want to do is harm the dollar as that would reduce the value of their holdings and that, in and of itself, reinforces the dominance of the dollar and thus improves its stability.  That is at least partly why for the past 15 years 60% of world foreign exchange reserves have consistently been in dollars.  Were that percentage to slowly fall to 50% over the next few decades, it would matter relatively little.

To sum up, despite lots of talk, there exists no strong competitor to the US dollar and one is unlikely to appear anytime soon.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at  His daily 70 word economics and policy blog can be seen at