As published in the February 1, 2006 Toledo Business Journal
Tony Plath
Home Builders Association of Greater Toledo,
executive vice president
Bringing jobs to region key
for home building growth
Toledo Business Journal recently met with Tony Plath, executive vice president, Home Builders Association of Greater Toledo (HBA). He shared the following thoughts.
TBJ: Can you discuss the economic impact that the home building industry has on the area economy?
TP: A while back I gathered some information for an article in our monthly newsletter and was really surprised to find out single-family and multi-family construction plus remodeling account for 15 percent of our nation’s total economic activity. A study completed by the National Association of Home Builders (NAHB) shows that the construction of 1,000 single-family homes generates 2,448 jobs in construction and related industries and approximately $79.4 million in federal, state, and local tax revenues and fees. Keep in mind that these numbers are for 1,000 single-family homes and last year alone we had more than that in Lucas and Wood Counties combined. This is an industry that is pretty darn impressive when you think about it and I am proud of our builders and numerous suppliers who do this day in and day out in our region.
TBJ: What role do you see regionalism playing in future growth?
TP: It’s very important because not everybody lives in Toledo, but that doesn’t mean jobs can’t come to Toledo – they can live in Maumee or Sylvania. We need jobs because that’s what is going to free up our market. Our spec market is flat. The builders are telling me that contract business is pretty solid, but they’re nervous about building any spec homes. We know from talking to the Board of Realtors that we have a very high number of used houses on the market. I think we’ve got a logjam. Until people can buy those houses and they can step up, we’re stuck. The answer is promoting as best we can – cooperating with all of the different areas – on how we can bring jobs to the region, not to any particular city, so that everybody can benefit.
TBJ: The home building industry in the region has experienced solid performance during the past decade. What do you see as we look forward into 2006 in terms of new home construction and sales?
TP: You are right about our industry experiencing some solid performance in the past and our office recently compiled building permit information from 2000 through the end of 2005. It was interesting to see that from 2000 through 2003, both Lucas and Wood Counties increased in permits issued each and every year. In 2004 Lucas County dropped 8 percent from the previous year and another 13 percent in 2005. Wood County dropped 7 percent in 2004 and another 8 percent in 2005.
What does this mean for 2006? It will probably be similar to the last two years as we are still seeing an oversupply of spec homes and a large inventory of used homes. Many people appear to be interested in acquiring a new home, but need to sell their existing homes in order to move forward. An obvious fix for this situation would be an increase in people moving into our area.
TBJ: There is concern following the hurricanes last year that building materials will be in short supply and more expensive. Can you discuss this for our region?
TP: We are not really experiencing a shortage of supplies, but some prices have increased. Some of the petroleum based products like asphalt shingles and blackjack used for sealing basement walls have increased. Concrete and drywall have also been increasing, but lumber seems to be holding for now.
My take after talking to a number of our members is they’re not as concerned about it because they think from a competitive standpoint, with the spec housing market being down, that the suppliers are going to hold prices. They’re more concerned with the market than the prices at this point.
TBJ: Can you discuss any pending local, state, or federal legislative issues that will impact the home building industry if enacted or not enacted?
TP: There is H.B. 299 that was introduced by Representative Jon Peterson of the 2nd House District which will give authority to townships, school districts, and counties to implement impact fees to assist in the funding of capital improvements necessitated by growth and development. Our members understand that they need to pay their fair share for growth, but the key words here are “fair share.” Some areas are seeing this as a way to charge more than reasonable fees to make up for their bad planning of the past and it puts an unfair burden on new development. Our state association, Ohio Home Builders Association, The Ohio Board of Realtors, and the Associated General Contractors of Ohio want fair and reasonable fees and expect an intense battle with this in 2006.
TBJ: Can you share the HBA’s plans for events during the coming year?
TP: Our 2006 House & Home Show is this February 17th through 19th and looks to be a very exciting show. We have more builders than we have ever had as they are seeing this as a real marketing opportunity to present themselves and their companies to the anticipated 10,000 to 12,000 attendees. We also have many new vendors and we have partnered with WTOL 11 to assist them with a basement makeover – donated by Basement Living Systems by Champion, California Closets, Progressive Sound and Home Theater, Gross Electric, LP Electric, and Reemsnyder Decorating – that will be built and furnished at our show. We have had tremendous interest from the public and some lucky entrant’s name will be announced at our show on February 19th and we will be constructing this makeover in their basement during the last week of February.
TBJ: Are there any other issues you would like to address?
TP: Some issues that are affecting the construction industry are zoning restrictions, impact fees, open space dedications, and excessive infrastructure charges. In some jurisdictions, these fees can add $10,000 to $15,000 to the price of a home and these increases eliminate many consumers from obtaining their dream.
This industry is already heavily regulated and we have to be extremely careful not to allow higher fees just because development appears to be an easy target. Any impact fees, taxes, service charges, or whatever they may be called must be directly related to the service provided and not just a way of easily raising money for any community.