Builder and Developer: Congratulations on being the 2020 chair of NAHB! You are also the first chairman of Hispanic descent. How do you feel your background has uniquely shaped your quali cations and what would you like NAHB members to know about you?
Dean Mon: Coming to the United States from Cuba as a young person, I saw a lot of opportunity, but wasn’t entirely sure what direction to take. I was drafted into the Army in 1968 and spent two years as an artillery sergeant in Vietnam. During that time, I became an American citizen, which unlocked many doors.
After my service ended and learning that I could pay for college with the G.I. Bill, I enrolled at Newark College of Engineering. I started my career as an engineer, and then went to work with my father-in-law, who was a builder. I then went on to start my own business and initially got into remodeling, then moved into single-family building when I realized that’s where my business could grow.
However, it was the relationships I made at the National Association of Home Builders that helped me begin to see the real problem: affordable and desirable housing is out of reach for too many Americans. That’s how, and why, I got into the multifamily business; to help people achieve the dream of owning a home without going into crippling debt.
B&D: In your eyes, what is the greatest challenge that builders are facing, and what is NAHB doing to combat it?
DM: Currently, economists say that buying a home would be a “financial stretch” for typical American families in 71 percent of U.S. counties. Building homes that are affordable to buyers continues to be the greatest challenge; this includes the many factors that drive up the cost of homebuilding.
Key factors contributing to the affordability crisis are a lack of skilled labor and the burdensome cost of regulatory compliance. On the skilled labor front, as the demand for workers goes up, so does the cost of employing those workers, who range from carpenters to electricians to framers. NAHB is working hard to spread the word to high school students, veterans, and other groups about the fulfilling and well-paying careers to be had in residential construction.
As for the cost of regulatory compliance, regulations that impact the building industry are set by elected officials at each level of government. Throughout the 2020 election cycle, NAHB will engage with candidates on the issue, making sure that creating a favorable regulatory environment for homebuilding is a legislative priority.
B&D: Speaking of the 2020 election, do you expect it to have an impact on the homebuilding economy? If so, what kind of impact do you expect to see?
DM: This is an enormously consequential election year, and NAHB will be very active in supporting pro-housing, pro-business candidates for public office. But I think it is unlikely the election process itself will have a significant impact on homebuilding. The economy is in the longest expansion in U.S. history, with unemployment low, incomes rising, interest rates low, and demand solid. Those are good conditions for homebuilding, election year or otherwise.
B&D: What are your overall expectations for the homebuilding market in 2020?
DM: As we look to the 2020 homebuilding market, the NAHB economics team is forecasting slight growth for single-family construction, supported by those ongoing low mortgage rates. Builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index, also remains solid.
Still, many of the same production constraints from 2019—supply-side bottlenecks from the lack of skilled labor, rising material prices, and regulatory burdens—may carry over.
Existing home inventory remains tight, and home prices continue to rise faster than incomes. Solid housing demand exists, but the industry continues to experience a labor shortage it may not turn the corner from quickly, including nearly 340,000 unfilled construction jobs outlined in the latest government data.
B&D: What about trends in the market? Do you have any predictions for trends we may see in green building next year?
DM: Big trends in green building include a broad range of advancements in high- performance homes, and a growing willingness among builders to look more closely at the science behind them. While energy efficiency still tops many lists for popular home features among consumers, indoor air quality and water efficiency are increasingly important for potential buyers. To meet the demands, more builders are designing and building homes as a system rather than keeping individual trades in silos. A carefully designed building envelope can be made airtight by installing insulation properly, using air sealing techniques, and sizing mechanical ventilation to increase energy efficiency and improve air quality.