Raising the Ceiling, and the Floor

I recently was invited to speak to the monthly lunch meeting of the local chapter of the National Association of Professional Mortgage Women about the current and future state of the local housing economy. After my remarks, I was asked an excellent question. The question was prefaced this way:

Given the current slowdown, many of the pseudo-professionals (and non-professionals) are no longer in business. Those who are still builders today are the true professionals – like HBA members. The result is that the overall quality of professionalism in home building may never have been higher than it is right now. 

Knowing the professionalism of our members, and their resilience through this downturn, I couldn’t agree more.

The question: How can we ensure that our current high level of professionalism in home building is maintained once the housing economy is surging again, and the less professional practitioners want to return? 

I’ve spent enough time listening to the “setting the table” vision of HBA leaders like President Rusty MacLachlan and Government Affairs Chairman Matt Bailey to know how to answer that question. In fact, it is right in the HBA’s wheelhouse.

Every member of the HBA of Greater Springfield is required (among other things) to carry workers compensation and general liability insurance. We have observed that, in general, those who carry these forms of insurance tend to be the more professional members of the industry. Since workers compensation insurance is required by Missouri law and general liability insurance is basic good business (and protects consumers), you wouldn’t think these membership standards would be particularly controversial. Think again.

While I am told that most fulltime builders carry GL insurance, our fights generally come over our workers comp requirement. It can be very expensive, and many in the industry operate under the mistaken assumption that they are exempt from the requirement. They usually are familiar with the law’s requirement that any business in the construction industry must carry workers compensation insurance if that business has one or more employee. Since they utilize subcontractors rather than actual W-2 employees, they reason they are not required to carry the insurance. 

The problem with that reasoning is that Missouri’s workers compensation law goes on to define “employee” to include: W-2 employees, subcontractors, volunteers, or family members. So, unless you drive every nail and lay every brick personally, you are required to carry workers compensation insurance in Missouri.

Since builders who operate without workers compensation insurance are violating state law, why would any city or county building regulations department issue a building permit to them? They shouldn’t. Yet most of them do. Cities and counties should instead follow the example of the City of Branson and a handful of other jurisdictions that require current proof of workers compensation insurance to pull a building permit, and to complete inspections and receive a certificate of occupancy. 

The HBA of Greater Springfield is advocating for just such changes in city and county permitting departments throughout our ten-county service territory. Matt Bailey’s Government Affairs Committee has set the goal of establishing proof-of-insurance requirements in more than one of these jurisdictions by the end of 2009. To that end, we have had productive meetings with the Missouri Attorney General’s staff about co-hosting education programs about workers compensation law for local and county building officials and elected officials, and working together to encourage progress on this issue at the local level.

We strongly believe that now is the time to pursue more aggressive enforcement of state law in this regard. Because of the correlation between those who carry the proper insurance and industry professionalism, a requirement at permitting to show proof of insurance would help raise the “floor” in our industry.

But we shouldn’t be content just raising the “floor.” We also should raise the “ceiling” of professionalism by continuing to elevate our own HBA standards of professionalism. That’s why our president has appointed Brett Godfrey as the HBA’s Education Czar. Brett has been charged with offering unprecedented professional education opportunities and access to HBA members and, over time, creating a culture of education and professionalism among all HBA members. A comprehensive continuing education program for HBA members already is well underway. As you learn more about the opportunities available, I think you will agree that our “ceiling” for professionalism has never been higher.

This is what our president means when he talks about “setting the table” for future success. Based on the important steps we are taking now to create a level playing field, professional standards, and continuing education, I am excited about what the future holds for HBA members and our industry.

I'll be Twittering Today live from the Zanola presentation

Today is the HBA of Greater Springfield's big presentation of the latest area construction forecast and market analysis, courtesy of MarketGraphics and Zanola company. I am hopeful that lots of HBA members will be able to attend. If you'd like more information on the event, you can read all about it at this link, and I hope to see you at 10:30am at the Library Center in Springfield.

Meanwhile, if you are on Twitter, you can follow my updates live from the Zanola presentation later this morning (even if you can't make it in person). I'll be "Twittering" directly from the event. If you aren't yet on Twitter, it's a simple (and free) process to sign up. All you have to do is sign up to follow me on Twitter, and/or follow our HBA President Rusty MacLachlan on Twitter, and follow the directions as they are given. I'll share more about Twitter later on this blog (I think there is all kinds of potential in this for HBA members), but for now I just wanted to be sure you have this opportunity to follow the live updates from this morning's construction forecast event.

And, since by the afternoon you already will be following my "tweets," I'd also like to invite you to follow as I Twitter live from Senator Kit Bond's business roundtable discussion (starting at 3:30pm today at the Springfield Area Chamber of Commerce). Among those businesspersons participating in the roundtable will be HBA President and home builder Rusty MacLachlan and HBA board member Lee Beaman (Beaman Electric). I'll be sure and "tweet" all the highlights from there, too!

'Home-Grown' vs. Growing Homes (Click Here)

Back in the 1970s, my mother annually planted a large garden in our back yard. I was involuntarily drafted into service to help tend it. I didn’t much care for the restrictions it placed on my whiffle ball field. On the other hand, I developed an affinity for home-grown tomatoes that I retain to this day.

Times were tough. While I was not privy to the family finances in those days, I understand that garden saved us a few dollars in our monthly grocery budgets over the years. As an adult, I have never planted my own backyard garden. Given the economic challenges of this era, I admit I am considering it.

So, when an elected or other high-ranking official in our region suggests that the day is coming when people living here will have to “grow our own food,” I am taken back to those nostalgic days of my childhood. Then I listen further. The suggestion is not simply that more people will tend backyard gardens (which, incidentally, I would favor - anything that increases the supply of home-grown tomatoes is fine with me). No, these officials go much further. They posit that those of us who live in the most urbanized county in southwest Missouri must soon become self-sufficient when it comes to our food supply.

On its face, this seems to me like a quaint idea that is charming, but a little silly. Why would we choose the urban core of the region as the optimal location for such large amounts of agricultural activity (even if one day we find ourselves scrambling to “grow our own food”)? Would it really be that big of a deal if we had to “import” agricultural products from such far-off places as Aurora, Buffalo, Ava, or any number of active agricultural communities within a half-hour drive from Springfield?

Still, while the idea seems a little far-fetched to me, I am generally content to live and let live. In the end, what difference does it make if some folks are a little more “out there” than I am?

Then, over the course of the last couple of years, I began to see actual policy proposals come out of government offices that have used as their rationale this pretext of “growing our own food.” Such proposals have included:

• Prescriptive land use proposals;

• Mandated or non-market-based incentives for so-called “farmland preservation” (“so-called” because these preservation proposals generally are not for land that is actively farmed, but rather for land that simply is vacant);

• Density and mass transit proposals that seem out of step with our population requirements and culture.

If such unconventional notions are going to guide policy decisions – and those policy decisions directly impact the housing industry and future home buyers’ affordability – we are forced to take a closer look. At the very least such assertions should require some data or analysis before they are accepted as fact.

So, since it appears we must, let’s talk for a moment about meat. While there are exceptions, we are not – by and large – a culture of vegetarians and vegans. In the Ozarks, we like our meats. Even if we didn’t, the rock-filled clay deposits found throughout Greene County don’t exactly promote efficient row crop agriculture – not to mention banana or coconut trees. So, for the time being, let’s hypothetically put every resident of Greene County on the Atkins diet. Let us consider the amount of meat production alone it would take in Greene county just to feed the residents.

Based on conservative population and consumption estimates, Greene county would need to produce, butcher and process approximately 24,000 feeder calves, 80,000 pigs, 240,391 turkeys, and 6 million chickens per year, just to feed our current population. To give an idea of just how massive a shift that is, let’s look just at the smallest portion: feeder calves.

Given gestation periods and the fact that calves are born one at a time, producing 24,000 feeder calves means that each of those calves has its own distinct mommy. Assuming for a moment that no bulls are part of the equation, that means at least 48,000 head of cattle would be needed in Greene County per year. According to the most recent data I could find, the largest cattle producing county in Missouri is Texas County at 47,500 head. Texas county has nearly twice the land mass of Greene County. The largest city in Texas county has a population of 2,500. I don’t think we could fit 48,000 cattle in Greene county with a shoehorn. Even if we could, where would we put the six million chickens?

And what about processing? If we are really going to feed our own population, we can’t just raise the livestock, we have to butcher and process it here, too. If an ethanol plant in Webster county created a ruckus, how do you think a plant that annually processes six million chickens and 240,000 turkeys will go over? How about huge commercial hog farms?

This isn’t intended to qualify as a doctoral thesis--my data isn’t complete or perfect, but it all trends in the same direction. Frankly, it is more than I’ve ever heard from futurists who assert the imminent need to grow our own food, as if it is plausible.

So, what is the point of all this? If you want to start a backyard garden, go for it. If you want to encourage others to do the same, more power to you. If you really believe that Greene county ultimately must produce enough food to feed our local population, it is time to expand this conversation to include actual data, other regional governments and area food production, processing and distribution professionals. I would think that our restaurants and grocery chains among others would have some data and input on this issue but as yet I haven’t seen any of these folks invited to the discussions where these assertions have been made.

To suggest that privately owned prime development land should be taken off the table based on a totally unproven premise is irresponsible. Policy decisions should be guided by better sense. I fear the real goal of this assertion may be simply to block or significantly deter further housing development.

And here is the irony. While it is wholly unrealistic to think we could ever provide adequate food supply locally to feed our entire population, housing that same growing population is a very real and immediate local need. Importing housing is not an option. We must build it here, in the process creating jobs that can never be outsourced and generating much needed sales tax plus other revenue. Perhaps area futurists could focus on that for the time being.