The B&D INTERVIEW – Granger MacDonald

Granger MacDonald, a Kerrville, Texas-based builder and developer with 40 years of experience in the home building industry, is NAHB’s 2017 Chairman of the Board of Directors

Builder & Developer: What were some of your industry highlights with NAHB in 2017?

Granger MacDonald: The biggest highlight of 2017 is that the economy continued to strengthen and new home production continued to increase. Our industry is growing, despite a shortage of experienced trades, despite rising building materials prices, and despite intense competition for lots in high-growth markets. Those are challenges we will continue to face, and NAHB is working to help our industry address them. But the key is that we’re starting to see real signs of growing and sustained demand for new homes.

Obviously, Hurricanes Harvey, Irma, and Maria were a huge concern in 2017. And while natural disasters were not a highlight, it inspires me that builders in the affected areas, and homebuilder associations around the country, responded to the devastation in ways that really made a difference for families and communities.

The Trump Administration’s emphasis on regulatory reform is another important story. From the start, it was clear that the administration was going to re-think the regulatory process and take a second look at a number of regulations that have slowed our industry and the broader economy. NAHB economists did a study that showed that almost 25 percent of the price of a new home comes from regulatory compliance and other government-imposed costs. It is significant to us that this administration is addressing federal regulatory excess.

B&D: Builder confidence reached a 10-month high in November, despite facing natural disasters a few weeks prior. To what do you credit builders’ resiliency? Will this confidence continue?

GM: Yes, we’ve faced some challenges this year, but most builders are confident, resilient, forward-looking people. Builders are can-do types who respond well to challenges. I think some of the confidence comes from the knowledge that the current administration is doing something about the excessive regulations that have burdened our industry for years. Also, much of the confidence comes from an economy that is producing jobs and wages that help more families buy a home. A robust economy is the single most important factor to a strong housing market. Builders have good reason to feel confident about our industry.

B&D: Building codes are changing. For example, by 2020 all homes in California will need to meet zero net energy standards. Where do you think these changes in building codes are taking the industry?

GM: It’s hard to say. Increasingly, government agencies have turned to codes to implement not just health and safety goals but also other policies, such as energy efficiency, resilience, and sustainability. NAHB is committed to ensuring that building codes are cost effective and do not add unnecessarily to the price or operating expenses of a new home. Our policy also calls for codes to be flexible, market-driven, and performance based. For measures intended to improve energy efficiency, our policy calls for a payback period of 10 years or less, which is what consumers demand as well. It’s also important for government at all levels to encourage and incentivize retrofitting and other energy efficiency measures in older homes, which use significantly more energy than new and recently constructed homes. That’s where the biggest savings take place: New homes built to today’s building codes are extremely efficient already.

B&D: Many problems continue to plague the industry, including a shortage of labor. Are we any closer to solving this problem?

GM: NAHB is tackling the labor shortage head-on throughout the federation, but it’s important to remember that this is a complex issue that won’t be solved in a week, a month, or even a year. We have partnered with other stakeholders to launch the Skilled Labor Fund, which will provide scholarships for students to attend construction training programs nationwide. It is part of the National Housing Endowment, the philanthropic arm of NAHB that helps develop more effective approaches to home building and strengthens education and training opportunities in residential construction. Our job training affiliate, HBI, is a national leader for career preparation and job placement in the building industry. HBI has four different training programs focused on 10 residential construction trades, including carpentry, landscaping, and weatherization.

Plus, NAHB has created a Building a Skilled Labor Workforce web page to help educators, policymakers, and industry partners get students thinking about residential construction careers. This page includes employment data, scholarship information, and mentorship opportunities for homebuilders. Additionally, NAHB supports comprehensive immigration reform that will safeguard our borders, establish a fair employment verification system, and create a market-based visa system so workers from other countries can fill some of the open jobs in residential construction.

B&D: What will NAHB be focusing on in 2018?

GM: NAHB will strive to provide the best possible service to our members and ensure that they are operating in an optimal business environment. As we pursue that goal, several issues could be at the top of our priority list. They include the duties imposed on lumber imported from Canada, the impact of tax reform, regulatory issues, and restructuring of the nation’s housing finance system.

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