If there was any one topic that dominated the discussions of the 65,000 people who attended the annual convention of the National Assn. of Home Builders here last week, it was the slow-growth movement that's sweeping across the nation.
Builders from California to Florida, Texas to Connecticut voiced their concerns about recently passed measures that will curb development in their areas, or growth-control plans that have been proposed by local government agencies or voters.
But most of these builders were long on complaints and short on solutions, a problem that one of the nation's top real estate consultants said "is the biggest mistake builders can make.
"Builders have to quit groaning about slow-growth measures and start offering some viable alternatives," Los Angeles consultant Kenneth Leventhal said in an interview. "They've got to work together and get responsible counter-initiatives on the ballot.
"So far, most of them haven't done it."
Leventhal also said builders should do a better job of communicating their concerns to the public and media by pointing out the down side of growth-control initiatives:
"They eliminate affordable housing, drive up the cost of land and houses, and cut way back on the tax revenue needed to solve the traffic and other infrastructure problems that already exist."
Leventhal's statement came on the heels of comments made by Dick Wirth, director of the governmental affairs council of the Southern California Building Industry Assn.
Wirth, a top official of the California builders group, is quoted in a monthly magazine as saying that state governments should punish cities that implement growth-control measures.
"If the people in a certain place want to close off growth," Wirth is quoted as saying in the January issue of Golden State Report, "then they should be shut off from state tax dollars because they're just being greedy little clowns."
Wirth's remarks upset some California builders attending the convention. Although some believe withholding state funds from cities that approve building limits could stop the controlled-growth movement in its tracks, the idea is seen as politically impossible--and its enactment might be illegal.
Some California builders also complained that Wirth's comments will make it even harder to gather widespread public backing in their efforts to fight growth-control measures.
"Clearly, those kinds of comments aren't going to win us any public support," said one builder. "Maybe we ought to all chip in and buy Dick one of those Dale Carnegie courses on 'How to win friends and influence people.' "
Biweekly mortgages, which can save consumers thousands of dollars in interest payments, will be easier to get starting next month.
David O. Maxwell, chairman of the Federal National Mortgage Assn., told reporters that his agency will begin buying biweekly loans fom lenders Feb. 1.
The move will encourage more financial institutions to make the loans because they'll be able to sell the mortgages to Fannie Mae instead of keeping them until they're paid off.
Consumers who choose a biweekly repayment schedule make their payments once every two weeks instead of once a month. Each payment is about half the size of a monthly payment.
Paid Off Earlier
Since biweekly borrowers make 26 payments each year, they make the equivalent of 13 monthly payments instead of 12. That reduces their overall interest costs by tens of thousands of dollars, and lets them own their house free and clear in about 20 years instead of the typical 30.
Although biweeklies provide some obvious benefits to consumers, most lenders have refused to offer the mortgages because they don't want to keep the loans on their books until they're paid off.
Fannie Mae's decision to begin buying the mortgages eliminates that obstacle, and may prompt similar agencies--including Fannie Mae's biggest competitor, the Federal Home Loan Mortgage Corp.--to do the same.
Fannie Mae and the FHLMC (Freddie Mac) play a key role in keeping the nation's housing market thriving by assuring that an adequate supply of loan money is available to home buyers.
Maxwell said his agency is gaining support from lawmakers and the general public, even though some critics say the growth of Fannie Mae and the rest of the so-called "secondary mortgage market" has its downsides, as well.
Maxwell said a sign of Fannie Mae's growing support is Congress' recent approval of legislation that raises the limit on the size of loans the agency can buy to $168,700 from $153,100.
The higher limit will allow about 40,000 California home buyers to purchase a house at a lower interest rate this year, said Joel Singer, chief economist of the California Assn. of Realtors.
Critics of Fannie Mae agree that the agency helps assure that an adequate amount of mortgage money remains available and thus keeps rates down--for now.
But over the long run, they argue, lenders who don't work with Fannie Mae may be forced out of the mortgage market, and the resulting decrease in competition would push rates higher.
Builders often tout that the homes they build are "more than meets the eye" because of their quality construction. But Palm Beach, Fla.-based builder Robert Gottfried says his "homes" aren't nearly as nice as they look--and he's proud of it.
For $50,000 to $100,000, Gottfried builds Hollywood-type facades for well-to-do clients who want to see what their planned house will look like once it's completed.
They're full-scale replicas of the front of the home--with real bricks, windows, doors and even molding--propped up by old telephone poles. The facades usually take about six weeks to erect.
Folks who can afford such an expensive "trial run" can also afford to be choosy: Some want to make design changes, so they order Gottfried to tear the facade down and pay him more money to build a new one according to their revised plans. The builder says he has erected as many as three facades for fussy owners who couldn't get it right the first and second times.
How should Congress reduce the nation's huge budget deficit, which--among other problems--keeps mortgage rates high by forcing the government to borrow billions of dollars that might otherwise be funneled into housing and other industries?
Five congressmen talked about the problem, but couldn't agree how it should be resolved. Three representatives said Congress should pass a balanced-budget amendment and give the President power to delete expenditures he doesn't like with a "line-item veto." The other two called for spending cuts and tax hikes.
Rep. Barney Frank (D-Mass.) said there's a willingness among lawmakers and the public to cut the deficits, but not if the reductions require "real sacrifice."
"The American people are politically much more in favor of expenditures than taxes," he said. "Everybody wants to go to heaven, but nobody wants to die."
With housing starts anticipated to drop about 9% this year, builders are dusting off some tried-and-true methods of boosting sales. Low-interest loan programs and free upgrades are already being reinstituted in some parts of the country.
But Bernard S. Schreft, an executive with the Hollywood, Fla.-based consulting agency the Greenman Group Inc., predicts that builders will adopt some newer marketing tactics, as well.
Schreft said more builders will offer "bridge financing" that allows buyers to move into a new house before selling their old one, and will offer better incentives to outside brokers to encourage them to bring potential buyers to new homes instead of older housing tracts.
Not all of the new marketing strategies will benefit consumers. Some builders may actually skimp on "extras" to lower base prices, Schreft said.
Others will eliminate patios, pools and second-story rooms to keep their homes more affordable, although "smart builders will make available do-it-yourself plans for these areas" in case their buyers eventually want to add on.
The closing of last week's convention also brought to a close the home builder show's three-year run in Dallas. The annual convention will move to Atlanta in 1989 for a three-year stay, and then to Las Vegas for three more.
The 65,000 people who attended this year's show pumped a sorely needed $13 million into Dallas' oil-battered local economy, according to NAHB estimates. Builders and other professionals booked more than 17,000 rooms in 63 hotels, and they rented more than 4,000 cars.
About 500 evening social functions were held, and more than 1,500 carpenters, clerks, electricians, guards and other personnel staffed the convention.
Dallas' business community had hoped to convince the builders to return in 1995, but those hopes were dashed last week when the association announced that Houston would get the convention seven years from now.