Friday, April 28, 2017

Job Posting: Construction Manager

Hartness Development, Inc.

Hartness Development, Inc. (HDI) is seeking a self-motivated, high energy and team-oriented Construction Manager to assist in the creation of Hartness, a 440 acre master-planned Traditional Neighborhood Development located in Greenville, South Carolina. This walkable community will consist of more than 600 homes in a variety of architectural styles and types, a 180-acre nature preserve, and a quaint village center with restaurants, retail shops, offices, and civic spaces.

HDI has compiled an exclusive group of local custom home builders to build the majority of the single-family detached homes at Hartness.  However, HDI will build, or hire contractors to build, a variety of single-family homes, townhomes, condominiums, mixed-use commercial buildings, and community amenities.

Job responsibilities will include, but will not not be limited to:
  • Work with the HDI team to plan and manage light commercial and residential construction projects from start to finish
  • Collaborate with architects, designers, engineers, general contractors, and other construction industry professionals
  • Manage the Hartness builder group
  • Create and manage standard residential building specifications
  • Administer residential design and construction guidelines
  • Support the architectural review process
  • Prepare and negotiate cost estimates, budgets, and work timetables
  • Select appropriate construction methods and strategies
  • Interpret and explain contracts and technical information
  • Select, hire, and instruct material suppliers and contractors
  • Supervise construction personnel and activities onsite
  • Report on work progress and budget matters

Education Requirements: Associate or Bachelor’s degree in construction science, construction management, architecture, or engineering (or qualifying work experience in one or more of these fields).

Work Experience: 10 years minimum experience in light commercial and residential construction.

Professional Licensing: South Carolina Residential Builder (or have qualifications for licensing); South Carolina General Contractor (or have qualifications for licensing).

Interested applicants, contact Clay Driggers, Director of Development, Hartness Development, Inc., 3500 S. Highway 14,Greenville, SC 29615. 864-304-0472. clay@hartnessliving.com.

Wednesday, April 26, 2017

FHFA: House prices were up in February

U.S. house prices rose in February according to the FHFA seasonally adjusted monthly House Price Index (HPI). From February 2016 to February 2017, house prices were up 6.4 percent.

For the nine census divisions, seasonally adjusted monthly price changes from January 2017 to February 2017 ranged from -0.1 percent in the South Atlantic division to +1.8 percent in the East South Central division. South Carolina is in the South Atlantic Division.

The 12-month changes were all positive, ranging from +4.6 percent in the Middle Atlantic division to +9.5 percent in the Mountain division.

Governor Henry McMaster and the Associated Industries of South Carolina Foundation Announces “Be Pro Be Proud S.C.” Workforce Initiative

Campaign aimed at bringing pride and professionals back to South Carolina’s skilled workforce


The Associated Industries of S.C. Foundation in partnership with Governor Henry McMaster, state agencies including the S.C. Technical College System, S.C. Department of Employment and Workforce and the S.C. Department of Commerce today announced the launch of a new initiative, “Be Pro Be Proud S.C.,” to bring a new generation of pride, progress and professionals to South Carolina’s skilled workforce.

Today’s skilled professional workforce is aging out and the next generation of new talent is not sufficient to fill the demand. Nationwide, there are an estimated 4.6 million job openings, with approximately 60,000 of these openings here in South Carolina. The majority of these are in skilled technical fields. This gap in our state’s employment can be directly attributed to a lack of knowledge, interest and preparation.

“We must have the workers to do these skilled jobs, and we believe the impediment is that they don’t realize what all is available,” said the Hon. Henry McMaster, Governor of South Carolina.

The initiative targets many key audiences including high school and nontraditional students, current skilled professionals, legislators, parents, teachers, career coaches and employers to dispel the myths about skilled trade professions, showcase current skilled professionals’ true vocational pride, highlight the many career opportunities available within these trades and provide necessary resources and training to those interested.

“Since 2006, SC has lost 26.8% of all residential construction jobs, which totals almost 17,000 jobs which were predominantly self-employed. ,” said James Garman, Home Builders Association of South Carolina President. “The need is great and growing. The S.C. Department of Employment and Workforce estimates an additional 24,000 new construction workers are needed to meet the state’s current building needs.”

Research conducted prior to the development of this campaign indicates that 82 percent of companies regularly have positions they are unable to fill with qualified workers. Furthermore, experienced tradesmen for these open positions average $50,000.

The Homebuilders Association of SC; SC Trucking Association; Carolina’s Associated General  Contractors; Forestry Association of SC; SC Chamber of Commerce; SC Farm Bureau Federation, SC Petroleum Marketers Association; South Carolina Timber Producers Association; Palmetto Agribusiness Council; SC Motor Coach Association; Carolinas Ready-Mix Association; SC Propane Gas Association, SC Beverage Association, SC Retail Federation, SC Beer Wholesalers Association, SC Asphalt Pavement Association, have voiced their support for this initiative, including providing financial support of the campaign.

The “Be Pro Be Proud S.C.” initiative will use a mobile unit to travel the state and visit schools and events to showcase skilled trade professions and broaden awareness of their impact on our state’s workforce. The “Be South Carolina Pro” mobile unit is an engaging tool that will provide information about training resources, currently available positions and descriptions, skills needed, and how to start the process of starting a skilled professional career.

“I have been told that only one of three parents says they would encourage their children to pursue construction careers, despite the advanced skills and high pay characteristic of the existing opportunities in the construction industry,” said James Garman. “The Be Pro Be Proud SC will offer South Carolinians new insight into the skilled professional workforce requires a team approach that includes employers, schools, elected officials, students and parents who recognize skilled professions for the financial and rewarding career opportunities they are. The HBA of SC will also work to provide apprenticeships in the construction field to help attract and cultivate future talent.”

The initiative will include a website, which will serve as a content hub for young professionals to learn more and even find training and job opportunities. Employers can also use the site to actively engage students, current skilled trade professionals can become ambassadors and work with students to spur interest, and parents and educators can arm themselves with the necessary materials for encouraging students to learn about potential career opportunities. Social media channels designed to help keep top-of-mind awareness about the need for skilled professionals will also support the initiative and provide relevant updates during the campaign.

Friday, April 21, 2017

Take the Kohler Experience Tour


HBA Builder members, you have the opportunity to take the Kohler Experience Tour right here in Greenville. Kohler will be here Monday, April 24, from 11 a.m. until 2 p.m. Lunch will be served compliments of your HBA of Greenville and HBA member CBUSA.

Location is at the Downtown Airport, 100 Tower Drive, in the remote parking area.

Please RSVP by clicking here.

Your fellow HBA members serve and support their community

Joshua Alford and Eddie Howard work with other volunteers to build a wheel chair ramp for a veteran
With the leadership of your HBA's Community Service Committee, chaired by Richard Bernath of Southern Traditions Window Fashions, your fellow HBA members are at work around the community helping others in need of a hand up.

On April 8, a group of members led by Eddie Howard of Howard Custom Builders, Joshua Alford of Custom Remodel and Handyman Service, and Michael Dey of the HBA of Greenville, built a wheel chair ramp for a veteran living in Central, SC.  The project, which was facilitated by Rebuild Upstate, took just a morning, but the result will improve the life of a veteran for many years.

Members have another opportunity to give a family a hand up on April 22.  Your HBA is volunteering for a day with Habitat for Humanity to build a new home at 9 Hope Bridge Way in Greenville.  Shift times are 8 a.m. until 11:30 p.m. and 12 noon until 3:30 p.m.  Consider volunteering a little of your weekend to serve the community that gives so much to our industry.  Contact Michael Dey for details.

HBA Candidate Screening

HBA Government Affairs Committee met with Candidate Russell Stall this week.

This Spring, your HBA Government Affairs Committee has been screening candidates for Greenville City Council.  We started with John DeWorken, candidate for the at-large seat on City Council.  This week we met with Matt Cotner, candidate for Council District 2.  We also met with Russell Stall, another candidate for the at-large seat on City Council.  The Government Affairs Committee will meet again on May 3 and May 17 to complete its screening and recommendations for support, which will be considered by the HBA Board of Directors.  City election primaries are June 13.

Inclusionary Zoning: why it does not work



This week the South Carolina Senate held a public hearing before a Judiciary subcommittee to consider legislation to allow South Carolina cities and counties to impose Inclusionary Zoning on home builders and developers.  Inclusionary Zoning is a regulation where government mandates that private home builders and developers sell or rent some homes at below-market prices without any financial participation from government.

Your Home Builders Association opposes Inclusionary Zoning because it does not work.  In fact, it makes the affordable housing problem worse.  We described the problem in a letter to Greenville Mayor Knox White.  The Greenville City Council adopted a resolution in support of the Inclusionary Zoning legislation and actively lobbied for its passage.  We also shared the letter with the rest of City Council, Greenville County Council, and the legislative delegations from Greenville, Pickens, and Laurens counties.  You can read the letter below.  Click here to read our policy paper on Inclusionary Zoning.


April 17, 2017

The Honorable Knox White, Mayor
City of Greenville
206 South Main Street
Greenville, SC 29601

Via Email: kwhite@greenvillesc.gov

Dear Mayor White,

I would like to provide you with some additional research and information on inclusionary zoning and why, in almost all cases, this regulation worsens the affordable housing problem in the communities where it has been implemented.

Attached is our policy paper on the subject. In addition, I have outlined below why an inclusionary zoning regulation would contribute to the affordable housing problem in Greenville, rather than improve it.

Scenario 1
Assume that an inclusionary zoning ordinance in the City of Greenville will require 10 percent of all housing units constructed to be below market prices. Assume also that 400 housing units are constructed in a year in the city (consistent with current activity and about 8 percent of the total new homes constructed in Greenville County). The result would be 40 new below-market housing units constructed in the city as a result of an inclusionary zoning ordinance.

However, we must assume that the developer will pass the lost profit on in the form of an increase in the prices of the remaining 90 percent of their development that is being sold at market-rate prices.

The average price of a newly-constructed single-family home in the Greater Greenville area is approximately $270,000. The average home builders' net margin is about 5 percent. That is their profit. Some are more profitable. Others are not. That is an average.

Therefore, the home builder will need to increase the prices of the remaining 90 percent of market-rate housing units by $15,000 each.
  • $270,000 x 5% = $13,500 (average price times 5% net margin is the home builder's profit per housing unit priced at $270,000)
  • $13,500 x 400 / 360 = $15,000 (average profit times total housing units produced, divided by market-rate housing units produced is the price increase on each market-rate housing unit)
According to the National Association of Home Builders' Priced Out Effect study (nahb.org/pricedout), a $1,000 increase in the cost of a new home in Greenville, South Carolina, prices out 520 households from purchasing a new home. Therefore, that $15,000 increase in the price of a new home, the result of an Inclusionary Zoning Ordinance mandating that 10 percent of the project be sold at below-market prices, will price out 7,800 families from purchasing a new home as a result of the ordinance—PER YEAR.

The hypothetical ordinance would produce 40 below market housing units, but will cause an increase in the demand for below-market housing units by 7,800 households. And this only assumes that the net profit from the 10 percent of housing units that are below market is $0. If the city demands that the price be less than break even, which is likely, the priced-out effect is even worse.

Granted, I am applying the Priced Out data, which is a regional statistic, to the City of Greenville. However, I believe it fairly describes the cause and effect of an Inclusionary Zoning ordinance.

Scenario 2
The above example assumes that the ordinance regulates the end price of the house. However, some ordinances have regulated the end price of the lot. That method is even worse for affordability.

The lot cost is a combination of raw land cost plus development and infrastructure costs, as well as marketing, commissions, and carrying costs (debt), plus profit. Below is how the final lot price is often determined:
  • Land cost of $15,000 per lot ($60,000 per acre divided by 4 units per acre)
  • Infrastructure and development costs have risen dramatically and are now typically $25,000 per lot
  • The result is a $40,000 lot in hard acquisition and development costs
  • Therefore, a 30-lot subdivision would cost $1.2 million
  • Add risk, carrying cost, overhead, desire for a profit, and the $1.2 million in hard costs is typically grossed up using a 1.5 multiplier. Therefore, the retail price of the lot will be $60,000 lot.
    • The gross margin is $20,000 per lot from which comes business overhead (city license fees, office cost, employee salaries, insurance, utilities, transportation, etc.). That overhead number is about 10% of revenue, or $6,000.
    • Then there are the additional costs like sales commissions, marketing expenses, and interest expense.
    • The absolute best outcome for the developer is 10% net profit on the lot, but usually it is less.
If 3 of the lots in the 30-lot subdivision must be sold for $20,000 each in order to produce a house affordable to a buyer earning between 80 percent and 120 percent of median income, the lost $20,000 in cost (the lot cost is $40,000) and the lost mark up of 20,000 per lot, will be added back to the remaining 27 lots.
  • Therefore, the developer’s lot cost for the market-rate homes is $44,444 ($1,200,000 / 27 lots)
  • The retail price of the lot will be $66,666 ($44,444 x 1.5 = $66,666)
  • A difference in cost of $6,666 per lot that will be paid by the market-rate buyers in the subdivision
Therefore, the developer will sell the remaining lots to builders at $66,666 rather than $60,000.

In any final product, the lot is typically 17 percent to 20 percent of the cost of the home. To keep it simple, assume the builder uses a 20 percent value for the lot. Therefore, the builder will build a house that is five times the price of the lot.

When the lot cost increases by $6,666, that means the $6,666 increase in the lot will magnify into a $33,330 increase in the final price of the house. This is how it looks on paper:
  • $60,000 lot x 5 = $300,000 house price
  • $66,666 lot x 5 = $333,330 house price
With this lot-price control method, the city will have priced out of homeownership 19,314 families in the Greenville area.

You will understand from this analysis why the Home Builders Association has concluded that inclusionary zoning does not work. It, like many other government regulations on the housing industry, such as zoning and rent control, often make us feel like we are doing something constructive when we are, in fact, making the problem worse.

The study by the National Association of Home Builders that we reference in our policy paper has been applied to the Greenville area in the attached graphic. It demonstrates that housing in our community is nearly $70,000 more expensive as a result of regulation. As a result, less than 10 percent of all housing units built today are sold for less than $200,000. Just 17 years ago, 90 percent of all housing units were sold for less than $200,000. Inflation alone does not explain that increase in housing prices.

Our recommendation is that the City of Greenville and Greenville County work with the industry that produces housing to develop a meaningful housing policy for our community that will actually meet housing demand for all of our community’s citizens.

Home Builders Association of Greenville, SC, Inc.
Sincerely,
Michael E. Dey
Executive Vice President and Chief Executive Officer

Copy:
Greenville City Council
Greenville County Council
Legislative Delegations of Greenville, Pickens, and Laurens counties