GSA Business: S.C. Ranks 16th in Friendliness Toward Small Businesses

South Carolina ranked No. 16 nationally for friendliness toward small business, according to a recent survey by Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation.

The Palmetto State received an overall grade of B+, garnering mostly high marks in the two-month survey that involved 6,000 small-business owners nationwide.

Other key findings for South Carolina included:

• It costs relatively little to hire a new employee in South Carolina — the state was the second-least costly place in the nation to hire a new employee. 
• Women-owned small businesses in South Carolina were significantly more optimistic about their financial future than their male counterparts. Female entrepreneurs were 15% more likely than male entrepreneurs to rate their company's financial situation as likely to improve over the coming year. 

The state received a grade of A+ for the ease of starting a small business, cost of hiring a new employee and friendliness of environmental regulations. It received an A for overall regulatory friendliness, and friendliness of employment, labor and hiring regulations.

Read the entire report at GSA Business by clicking here.

National Flood Insurance Program Could Expire (Again)

With the National Flood Insurance Program (NFIP) set to expire May 31, NAHB continues to work doggedly to seek a five-year reauthorization of the federally-backed flood insurance program to ensure it remains efficient and effective in protecting flood-prone properties and creates more stability in the housing market.

The House on May 16 approved a one-month extension of the program in order to buy time to negotiate a longer-term reauthorization with the Senate. At this time, it is unclear whether the Senate will agree to the 30-day extension.

Call to Action:

• Call your Senators at (866) 924-NAHB (6242); 
• Write your Senators at www.capitolconnect.com/builderlink. 

Urge Your Senators to:

• Support S. 1940, the reauthorization of the National Flood Insurance Program;
• Support any amendments that removes Section 107 or any “residual risk” language;

If you have any questions or feedback, please email builderlink@nahb.org.

About NFIP Legislation:

The National Flood Insurance Program is extremely important to home builders and homeowners across the country. Over the past few years this program has had a series of extensions and four lapses that have caused construction delays, cancelled closings and in several cases, job losses; which is why a long term reform bill needs to be signed into law. S. 1940, reauthorizes the NFIP for five years which will give this issue a longer term solution.

The passage of S. 1940 is imperative for the home building industry, however it is not perfect. Section 107 of the bill would require any properties in areas behind dams or levees (known as “residual risk” areas) to purchase flood insurance. For many communities, a great deal of time and taxpayer money was spent to provide additional flood protection for these areas, and in many cases a levee fee is also included in the property tax assessment. To now mandate the purchase of additional flood insurance policies at a cost to the homeowner is simply unfair.

In the past few years, the NFIP has experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain NFIP insurance for a mortgage. In other instances, builders were forced to stop or delay construction on a new home due to the lack of flood insurance approval, resulting in unnecessary delays and job losses.

NAHB supports a long-term extension of the NFIP.

The House has already passed a bipartisan five-year flood insurance reauthorization bill. A Senate version to extend the program for five years has not yet come to the Senate floor for a vote.

While both the House and Senate measures would keep the program running through 2016, significant differences remain between the two bills. Though NAHB strongly supports the House bill, the association has significant concerns with the Senate legislation and continues to work with senators to address these issues.

Established in 1968, the NFIP offers affordable flood insurance to more than 20,000 communities nationwide, and currently covers about 5.6 million policyholders.

Federal Judge Strikes Down “Ambush” Union Election Rule

When Woody Allen once said that “80% of life is just showing up,” he never dreamed his statement would be the basis for a federal judge to strike down a National Labor Relations Board (NLRB) ruling on union elections.

But that’s exactly what happened last week.

In a victory for NAHB and small businesses across the nation, U.S. District Judge James Boasberg on May 14 declared a new rule put forth by the NLRB to accelerate the union representation process is “invalid.”

At issue is the “ambush” election rule that would dramatically shorten the amount of time for an employer to organize a response to attempts to employees to unionize. Whereas previously an employer would have up to six weeks to prepare for a union election, the NLRB’s new procedure would compress the current average time from moving from petition to organize a union down to as little as 10 days.

The U.S. Chamber of Commerce filed a legal challenge seeking to overturn the NLRB rule, which went into effect on April 30.

Boasberg struck down the rule because only two members of the NLRB participated in the rulemaking vote, which was short of the three-person quorum needed to issue the new regulation.

In his ruling, Boasberg said: “According to Woody Allen, 80% of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that. Indeed, it is the only thing that matters – even when the quorum is constituted electronically. In this case, because no quorum ever existed for the pivotal vote in question, the Court must hold that the challenged rule is invalid.”

Two Democratic NLRB members participated in the decision to adopt the rule but the board’s third member, Republican Brian Hayes, who was adamantly opposed to the rule, did not cast a vote. Since Hayes had previously voted against initiating the rulemaking and against proceeding with the drafting and publication of the final rule, the NLRB nevertheless determined that he had “effectively indicated his opposition.”

Since the court invalidated the rule for a lack of a quorum, it did not reach a decision based on the legality of the rule. So, the NLRB could again consider adopting this rule at a future date.

NAHB, the U.S. Chamber of Commerce and other organizations had previously urged Congress to overturn the rule, arguing that it would deprive employers of proper due process and deny them sufficient time to educate workers about the effects of unionization in the workplace.

Last month, NAHB sent a letter to senators in support of S. J. Res. 36, a resolution introduced by Sen. Mike Enzi (R-Wyo.) that would have prevented the rule from going into effect under the Congressional Review Act. The resolution failed on a near-party line vote.

NAHB will continue to work with Congress and business groups to keep the NLRB rule from going into effect.

To view the resolution, click here and type S. J. Res. 36 in the box in the upper center screen.

For more information on the legal ruling, email David Crump at NAHB or call him at 800-368-5242 x8491.

For more details regarding the congressional outlook on this issue, contact Suzanne Beall at x8407.

NAHB Redefines the Quality of Existing Housing Stock

Although most Americans are likely to view housing quality as important, few would describe it as a serious problem, especially compared to other troubles housing markets are currently confronting. This view of housing conditions in the U.S. is shaped largely by the Department of Housing and Urban Development’s (HUD’s) method for measuring the quality of homes, which classifies only about 1.5 percent as severely inadequate.

At a conference hosted by HUD in 2011, NAHB introduced an alternative way to identify inadequate units. Using the same data source as HUD, NAHB defined inadequate housing in a way that not only helps explain why prices and rents are sometimes lower than expected, but also classifies a much larger share of existing homes as physically inadequate. This suggests that some Americans—particularly renters—are trading adequacy for affordability, and implies that the need for programs to support the construction of new housing, or renovate older units, is greater than many policymakers realize.

NAHB’s work on “Housing Value, Costs, and Measures of Physical Adequacy” was published in March of 2012, in HUD’s research journal Cityscape. The findings reported by NAHB in Cityscape include the following:

• Over 10 million homes in the U.S. are physically inadequate, about double the number usually reported as having even moderate problems. 
• Much of the inadequate housing stock consists of single-family and older structures. 
• Few owners and renters of inadequate units also have problems with housing affordability as conventionally defined, and therefore are a net addition to the count of Americans with housing problems. 
• A large share—over 19 percent—of vacant single-family homes are physically inadequate, and so are not ready for full-time occupancy without substantial renovation and repair. 

Click here to read the article that describes NAHB's findings and explains how and why NAHB developed the new definition of inadequate housing. Details of a more technical nature can be found in the Cityscape article.

By the Numbers, NAHB's Priced Out Analysis: 431

Three years ago NAHB released an analysis that helps assess the impact of any action that increases the price of a new home.  This Spring NAHB updated that analysis, call the "Priced Out Effect," including an analysis by metro area.

Nationally, a $1,000 increase in the price of a home prices out 232,447 families from homeownership.  In Greenville, 431 families are priced out of homeownership by that same $1,000 price increase.

What can increase the price of a new home?  Many things including government regulation, increases in prices for materials and labor, and even crime.  One recent example is the efforts by the fire sprinkler industry to mandate automatic fire sprinklers in new homes.  Assuming a $6,000 increase in the price of a typical new home, the fire sprinkler mandate will price out 2,586 families from owning a new home in the greater Greenville area.

You can read the entire report, including an analysis by metro area, at NAHB.org by clicking here.

Greenville News: Poll Finds Homeownership Still the American Dream

A poll by TD Bank found that 56 percent of residents in the South consider Homeownership an essential part of the American Dream.  Sixty three percent said they plan to own a home in the near future.

Read the complete report at the Greenville News by clicking here.

FHFA: Mortgage Interest Rates Rise .03 Percent in April to 3.93 Percent

The Federal Housing Finance Agency (FHFA) today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 3.93 percent based on loans closed in April. Beginning in March, FHFA is calculating interest rates using un-weighted survey data. There was an increase of 0.03 percent from the previous month.


The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less increased 9 basis points to 4.21 in April. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note). These results reflect loans closed during the April 24-30 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-March.


The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.93 percent in April, up 4 basis points from 3.89 percent in March. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.03 percent in April, up 10 basis points from 3.93 percent in March.

This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.90 percent of the loan balance in April, down 3 basis points from March. Twenty-one percent of the purchase-money mortgage loans originated in April were "no-point" mortgages, up one percent from the share in March. The average term was 27.3 years in April, matching the term in March. The average loan-to-price ratio in April was 75.3 percent, up 0.5 percent from 74.8 percent in March. The average loan amount was $256,200 in April, up $9,100 from $247,100 in March.