Builders

Outlook

www.elpasobuilders.com

National, State & Local Building Industry News

2015: Issue 11

New Study
Suggests Strong
Outlook for Green
Homes
New SmartMarket Report reveals that over
half of home builders expect to be doing 60%
or more of their new homes green by 2020

Despite the headwinds created by

growing concerns about the cost of
building green, a high percentage of
home builders and remodelers are
already building green and expect to do
so in the future. While home builders and
remodelers report that consumers of all
ages are interested in green, the study
also finds that consumers age 55 and
older are the most important group driving
the current green market. The findings
also demonstrate that consumers
association of green with healthier homes
leads to even higher potential for growth
in the future, as do increased use of
renewable technologies by 2018.
The 2015 study, which surveyed 232
builders and remodelers from across the
U.S., demonstrates that they recognize
the benefits of green building:
Over half (54%) of home builders are
currently constructing at least 16% of their
new homes green, and 39% of
remodelers report that at least 16% of
their remodeling projects are green.
By 2020, nearly all (81%) home
builders will be constructing that level of
green, with over half (51%) building at
least 60% of their new homes green.

Solar Power CEO Urges

Lawmakers Let Tax
Credit Expire

A tax break thats propping up the

bottom half of the U.S. solar energy is set
to expire in 2016 -- and one of the
markets biggest fish says thats totally
fine. John Berger, the chief executive at
Sunnova, wrote in a letter sent to U.S.
lawmakers that Congress should allow
the federal Investment Tax Credit, also
called the ITC, to expire in 2016 as
planned. The ITC has served its
purpose, Berger wrote.
Currently, the ITC pays 30 percent of
the fees associated with installing a
residential solar power system. It is
scheduled to pay just 10 percent this
coming year before expiring altogether at
the end of 2016. That expiration could
drastically reduce the number of solar
power installations ordered by U.S.
consumers in the coming years.
Max Willens, International Business Times

During the prolonged housing downturn, green homes provided

support to the ailing residential market and now promise to be an
important element of the recovering market as well, according to a new
study conducted by Dodge Data & Analytics, in partnership with the
National Association of Home Builders (NAHB) and with the support of
Ply Gem Industries, (NYSE: PGEM), a leading manufacturer of exterior
building products in North America.

By 2020, remodelers report a similar

level of growth, with nearly three quarters
(74%) making at least 16% of their
projects green, and over one third (36%)
completing over 60% of their projects
green.
These expectations of higher green
involvement emerge despite growing
concerns about the cost of building green.
77% of home builders and remodelers
report that building green has an
incremental cost over traditional
construction of 5% or more, notably
higher than the 60% in 2014 and 58% in
2011 who noted that level of increased
cost. While higher cost is also the top
obstacle to green reported, it does not
appear to have dampened the drive
toward green in the market.
Builders and remodelers have long
recognized that green is the future of
home building, said NAHB Chairman
Tom Woods, a home builder from Blue
Springs, MO. Since we first began
partnering on this study with Dodge Data
& Analytics in 2006, weve seen that
commitment grow. The studys recent
findings reinforce this continued growth,
with new homeowner feedback showing a

desire and expectation that new homes

be high-performing, particularly when it
comes to energy conservation. Most
builders recognize that they need to be at
least conversant in green to stay
competitive.
One key factor driving the growth of
green is the association of green homes
with healthier living. Home builders and
remodelers certainly recognize the
potential: most (83%) believe that
consumers will pay more for homes that
are healthier.
We have seen the commercial sector
of the construction industry focus on the
impact of buildings on the health of their
occupants in the last few years, but these
findings suggest that attention to healthier
homes may offer an even higher gain for
green in the residential market, said
Steve Jones, Senior Director of Industry
Insights at Dodge Data & Analytics,
especially as consumers become better
informed about the features that make
homes more sustainable and healthier,
and begin to demand them.
Another factor leading to growth in the
residential market is the increasing use of
renewable energy. The study

demonstrates that the use of renewable

technologies is expected to grow across
the board, revealing an interest in energy
performance that goes beyond green. By
2018, nearly half of home builders and
remodelers expect to be using solar
photovoltaic (48%) and ground source
heat pump (52%) technologies. Net zero
homes are also emerging as an important
trend, with nearly one quarter (21%) of
home builders having built a net zero
home in the last two years.
One interesting finding of the new study
is that the greatest impetus for green
homes comes, not from millennials as
many people might expect, but from
consumers age 55 and older. Data from
the study suggest that greater familiarity
with home features leads to an emphasis
on home performance. Therefore, as the
environmentally-minded millennials gain
more experience with homeownership, it
is quite possible that there could be even
greater demand for green in the future.
To download the new study, Green and
Healthier Homes: Engaging Consumers
of All Ages in Sustainable Living
SmartMarket Report, visit
http://analyticsstore.construction.com

According to research from Bloomberg

New Energy Finance, the U.S. market for
solar panels installed could drop from
11.3 gigawatts installed in 2016 to just 3.4
gigawatts installed in 2017.
That decline would put a daunting
amount of pressure on Sunnovas smaller
competitors. Can the big guys weather
it? Yes, they probably can, Rhone Resch,
the president of the Solar Energy
Industries Association, told the Financial
Times. Its the small guys who wont
survive.
Money For A Rainy Day
While Sunnova is not the market leader
-- Elon Musks SolarCity dominates, with
a 34 percent market share -- it has plenty
of cash on hand to weather any storm
that might be caused by the ITCs lapse.
In addition to its 30,000 U.S. clients,
Sunnova announced a $250 million
funding round last year, calling it the
largest private funding round ever
secured by a residential solar energy
company. It brought total investments in
the privately held company to $500
million.

"We don't need the 30 percent," Berger

told Green Tech Media last year, when it
announced the funding round. "We struck
a deal -- we should keep the deal."

renewable energy sources like wind and

standbys like coal.
But those gains dont change the fact
that solar, along with all other sources of
renewable energy, remain a rounding
error when viewed alongside the giants of
the U.S. energy market. Coal, for
example, accounted for 1.6 million
gigawatt hours of power in 2013,
according to the U.S. Energy Information
Administration. During that same period,
solar energy accounted for just over
9,000 gigawatt hours.
Silver Lining
But even though it's small, and even
though the ITC's expiration will be a
shock to the system for U.S. solar,
industry analysts appear to share
Berger's conviction that the market may
now be big enough to survive on its own.
If the investment tax credit is not
extended, we see it as a disruption, not a
death for the industry, Maddy Yozwiak,
an analyst at Bloomberg New Energy
Finance, told Utility Dive. It will be a
disruption that will take years to recover
from, but the recovery is there.

Clearing Skies
In recent years, the market for
residential solar power has begun to rise
in a meaningful way, springing from an
estimated $3 billion in 2009 to more than
$13 billion in 2014. That mark also
excludes the energy generated by standalone solar energy power plants.
It has also been carving out larger and
larger shares of the U.S.s new energy
capacity. Research published earlier this
year by the Solar Energy Industries
Association found that solar accounted for
32 percent of the U.S.s new energy
generating capacity, beating out

Builders Outlook

GIVE THANKS FOR

MOMENTS LIKE THESE.
Home is where traditions begin and memories are made, and a
natural gas home is instantly more attractive to potential buyers.
Natural gas kitchens sell themselves, and natural gas furnaces,
water heaters and clothes dryers offer greater efficiency and lower
operating costs than their electric counterparts.
Let us help you plan for natural gas right from the start.
For more information:
ElPasoNewBusiness@TXGas.com
William Nieves: 915-496-6126
Jorge Sejera: 915-680-7216

2015 issue 11

2015 issue 11

Builders Outlook

Presidents
Message
Edgar Montiel

President,
El Paso Association
of Builders

I hope that everyone had an

awesome Thanksgiving Holiday, and
didnt gobble up too much turkey. I
partook in my share of overeating, but
then again anyone that knows me,
knows I love food. It is so hard to
believe that the end of the year is
already here. It seems like just
yesterday that I was working on my first
Presidents Column for the Builders
Outlook.
I would like to start by congratulating
and welcoming our new 2016 Board of
Directors Antonio Cervantes (BIC
Homes), Leti Navarrete (Custom

Stuffed
Dream Homes), Robert Najera
(Joseph Custom Homes), Bud Foster
(Southwest
Land
Development
Services), Walter Lujan (DAWCO
Homes Builders), Fernando Torres
(CTU Metro Homes), Leslie DriggersHoard (Homes by Design), Edgar
Garcia (Bella Vista Homes), Mark
Winton (Mark Winton Homes), Jason
Cullers (Cullers Homes), Sal Masoud
(DRE Development), Samira Gonzalez
(Icon Custom Homes), Joe Bernal
(Employee Benefits of El Paso), Linda
Troncoso (TRE & Associates), Bret
Thompson
(Foxworth
Galbraith
Lumber), Ted Escobedo (Snappy
Publishing), Patrick Tuttle (Legacy
Real Estate), Sam Trimble (Lone Start
Title), Luis Rosas (HUB International),
Gilbert Pedregon (GECU), and Greg
Davis (First Light Federal Credit
Union). Our new board was
unanimously approved by the current

El Paso & So
outhern New Mexico

inspiration ideas resour

e
ces

Su Casa,
bringing
you new
customers

Th
he curreent edition of Su Casa is
avvaailable in
n over 150 locatiions and
online at sucasamagazin
ne.com
CALL TOD
DA
AY FOR ADVERTISING INFO:

915-581-2300
550 South Messa Hills Drive, El Paso, T
Texas
exas 79912

suca
asamagazine.co
om

executive board and board of directors

during our November Board Meeting.
The future looks bright for our
association with our executive board
and board of directors. I am confident
that each board member brings a
unique skillset that will allow our
association to flourish. I invite
everyone to attend our installation
dinner on December 11th to
congratulate our future leaders.
The City of El Paso and El Paso
Builders Association recently hosted a
new building code review for the 2015
IRC that our industry will be adopting in
September 2016. The IRC review was
followed up with the new 2015 Energy
Code review. Both review sessions
were at capacity and very informative.
Keep in mind that we will be
transitioning from the 2009 IRC code to
the 2015 IRC Code, but that means
that we will also be adopting the 2012

IRC that occurred between both. The

new IRC codes seem pretty
reasonable as most of the items are
minor or they have already been
adopted. The energy code changes
are a little more involved, but there
seem to be options available for
compliance. There are many textbooks
that cover the changes on the NAHB
website.
New home closings are up around
twelve percent year to year and
everything that I have heard points to a
small increase next year. For anyone
looking to purchase a new home, the
best time to buy is now as interest
rates will be increasing without a doubt.
With that said, we all have a little less
than a month to sell and close as many
homes so that we can all finish out the
year strong. Happy holidays!

Builders Outlook

2015 issue 11

Executives
Message
Ray Adauto,
Executive
Vice President
EPAB
While many think of November as
a month for Thanksgiving and Black
Friday, for me this is the month that
has more than just a couple of
important things in it. First I have
two siblings and various cousins,
nephews and nieces that have
birthdays in the month. So do I.
This is the month when the Texas
Builders Association meets for the
final time in the month, so a trip to
Austin is involved. But theres also
some very important items going on
for the EPAB as well, such as
electing a new board and planning
the installation awards banquet.
This year we also added the work of
sending out renewals for the coming
year (more on that later in this
column).
Our association has had the great
fortune to have members ready to
serve on the Board and in the
Leadership. This year again theres
no exception. First the search

Bringing it all together for the end of year

committee looked for someone to
take on the four year/ life
commitment of the ladder to the
presidency. Once again we are so
lucky to have a great member step
up, Kathy Parry from HUNT. Kathy
is the second longest tenured
member at the association even
though we think she joined at the
age of 10. Cant verify that part but
she and Mark Dyer are holding the
longevity record. We had asked
Kathy before but work and life just
didnt leave the time needed to
commit to the ladder.
Our board of directors nominees
are pretty new to the leadership
roles yet theres a few seasoned
members as well as chairmen that
will help guide the young Jedis as
they move into the world of
association board membership. (Ok,
some would call it the dark-side, but
its not all bad). The election went
smoothly and now the time is close

for the installation. President elect

Carlos Villalobos will take the reins
from Edgar Montiel and other
changes will be announced as well.
Our event is December 11 at the
Marriott Hotel on Airway at Montana.
Were taking reservations now and
you can visit online at
www.elpasobuilders.com to see who
our partners are. We hope that you
will join us. Well have board
orientation soon, and then get to
work for the year as we have our
first board meeting on January 13.
Please wish all our incoming and
outgoing board and leadership well.
Say a prayer for them and support
them as they give time and treasure
to the association for the benefit of
the membership and the community.
Members be aware that we have
changed our renewal date to once a
year, due January each year. Billing
for 2016 is going out in November
and early December. Please look

for it in your email under

INTUIT/Quick Books, our billing
system service. It wont come from
Ray or Margarets email. All of the
members will now be synced up to a
renewal due in January, allowing you
to plan for it and us to be better
bookkeepers of it. Its going to be as
pain free as we can make it, but we
will need all of you to cooperate to
make it work.
Our TAB meeting went well and
well have some news for you on a
few new programs for you as a
member to take advantage of. Stay
tuned to some news coming in your
email box.
Please make your RSVP for the
installation. Its always a shining
moment as everyone dresses up
and looks super sharp. Dont forget
to bring an unwrapped toy for a
child. See you then, and best
wishes for the holidays.

2015 issue 11

Builders Outlook

National
Builder News
Builder Confidence Drops
Three Points in November

n Builder confidence in the market for

newly constructed single-family homes
slipped three points to 62 in November
from an upwardly revised October reading
on the National Association of Home
Builders/Wells Fargo Housing Market Index
(HMI).
Even with this months drop, builder
confidence has remained in the 60s for six
straight months a sign that the singlefamily housing market is making long-term
headway, said NAHB Chairman Tom
Woods, a home builder from Blue Springs,
Mo. However, our members continue to
voice concerns about the availability of lots
and labor.
The November report is pullback from
an unusually high October, and is more in
line with the consistent, modest growth that
we have seen throughout the year, said
NAHB Chief Economist David Crowe. A
firming economy, continued job creation
and affordable mortgage rates should keep
housing on an upward trajectory as we
approach 2016.
Derived from a monthly survey that
NAHB has been conducting for 30 years,
the NAHB/Wells Fargo Housing Market
Index gauges builder perceptions of current
single-family home sales and sales
expectations for the next six months as
"good," "fair" or "poor." The survey also

asks builders to rate traffic of prospective

buyers as "high to very high," "average" or
"low to very low." Scores for each
component are then used to calculate a
seasonally adjusted index where any
number over 50 indicates that more
builders view conditions as good than poor.
Two of the three HMI components
posted losses in November. The index
measuring sales expectations in the next
six months fell five points to 70, and the
component gauging current sales
conditions decreased three points to 67.
Meanwhile, the index charting buyer traffic
rose one point to 48.
Looking at the three-month moving
averages for regional HMI scores, the West
increased four points to 73 while the
Northeast rose three points to 50.
Meanwhile the Midwest and South held
steady at 60 and 65, respectively.

Multifamily Drop Pushes

Housing Starts Down 11
Percent in October,
Permits Rise

n Led by a steep drop in multifamily

production, nationwide housing starts fell
11 percent to a seasonally adjusted annual
rate of 1.06 million units in October,
according to newly released data from the
U.S. Department of Housing and Urban
Development and the Commerce

BUILDING

Department. Multifamily starts declined

25.1 percent to a seasonally adjusted
annual rate of 338,000 units while singlefamily production edged down 2.4 percent
to 722,000 units. Both sectors posted
permit gains.
The fact that permits are rising is
consistent with our builders continued
optimism in the housing market, said
NAHB Chairman Tom Woods, a home
builder from Blue Springs, Mo. Even
though starts dropped in October, they
have stayed above the one million mark for
seven straight months the longest streak
in almost seven years.
This months decline can be attributable
to the volatile multifamily sector adjusting to
trend after an unusually high September,
as well as the storms and flooding affecting
single-family production in the South, said
NAHB Chief Economist David Crowe.
However, with permits ticking upward, we
expect to see the housing market continue
to grow at a modest pace.
Combined single- and multifamily starts
rose in the Northeast and Midwest, with
respective gains of 10.2 and 15 percent.
Meanwhile the South fell 18.6 percent and
the West dropped 16.2 percent.
Overall permit issuance rose 4.1 percent
to 1.15 million units in October. Multifamily
permits rose 6.8 percent to a rate of
439,000 while single-family permits
increased 2.4 percent to 711,000.
Regionally, the Northeast, Midwest and
South posted respective permit gains of 5.9

El Pa
aso

percent, 2.4 percent and 7.5 percent. The

West fell 2.6 percent.

New Home Sales Rise

10.7 Percent in October

n Sales of newly built, single-family homes

rose 10.7 percent to a seasonally adjusted

annual rate of 495,000 units in October,
according to newly released data from
HUD and the U.S. Census Bureau.
Our builders are reporting continued
optimism in the housing market, and are
adding inventory in anticipation of future
business, said Tom Woods, chairman of
the National Association of Home Builders
(NAHB) and a home builder from Blue
Springs, Mo.
Sales this year are running 15.7 percent
ahead of 2014, said NAHB Chief
Economist David Crowe. With a firming
job market, affordable home prices, and
rising pent-up demand, todays report is
another indicator that the housing market
continues to move on a modest upward
trajectory.
New-home sales were up in three out of
the four regions. Sales rose 135.3 percent
in the Northeast, 5.3 percent in the
Midwest, and 8.9 percent in the South.
Sales fell 0.9 percent in the West.
The inventory of new homes for sale was
226,000 units in October. This is a 5.5month supply at the current sales pace.

SINCE 1950

Builders Outlook

2015 issue 11

Economic
Outlook
Housing Market
Faces Slower Growth
in 2016, Realtors Say

Home sales will continue to grow

next year, but will face headwinds
including a lack of first-time buyers and
rising mortgage rates, Realtors say.
More than 5.4 million existing singlefamily homes will be sold in 2016, up
from an estimated 5.3 million homes
sold in 2015,Lawrence Yun, chief
economist at the National Association
of Realtors, said at the groups
convention Friday in San Diego.
Mr. Yun anticipates thatmedian
home priceswill grow at an annual
rate of 5%, compared with 6% this
year. Still, Mr. Yun said the market
continues to face some steep
headwinds.Pending home salesa
forward-looking measure of the
housing marketare on the decline.
Rising home prices are becoming
an obstacle for first-time buyers, he
said.
Mr. Yun expects the rate for a 30year fixed mortgage to rise to 4.5%
from 3.8% astheFederal
Reservemoves to raise short-term
interest ratesand the economy
strengthens. That would make homes
even less affordable.

Thehomeownership ratewhich
already sits near 50-year lowswill dip
even further, Mr. Yun said. But that is
largely a positive trend, as young
people will start moving out of their
parents basements and become
renters.
Cristian DeRitis, a senior director
atMoodys Analytics, said he also
expects prices and sales to rise. Mr.
DeRitis said he is expecting price
gains of about 3.3%.
Were clearly not going back to the
rate of growth during the boom, he
said. We think its going to be fairly
contained and slow and steady.
Still, he said,rising rentswill start
driving young professionals to stop
delaying buying homes, especially in
more expensive markets, such as
California, Florida and the Northeast.

Housing Affordability
Opens Doors to
Homeownership

As Americas home builders

celebrate National Homeownership
Month in June, lower interest rates and
home prices are boosting housing
affordability across the country.

According to the latest NAHB/Wells

Fargo Housing Opportunity Index,
66.5% of new and existing homes sold
between January and the end of
March were affordable to families
earning the U.S. median income of
$65,800.
Now is a great time for consumers
to buy homes, said NAHB Chairman
Tom Woods, a home builder from Blue
Springs, Mo. Both first-time and
move-up buyers can take advantage of
these favorable market conditions and
start building their American Dream.
The national median home price
declined from $215,000 in the fourth
quarter to $210,000 in the first quarter.
Meanwhile, average mortgage interest
fell from 4.29 percent to 4.03 percent
in the same period.
First-time home buyers also can find
help qualifying for a mortgage with
low-downpayment programs offered by
Fannie Mae and Freddie Mac that are
geared primarily toward the first-time
home buyer market. These lenders
now offer mortgages with 3%

downpayments, allowing more

creditworthy borrowers who lack the
funds for a large downpayment to
obtain a home mortgage.
As housing affordability continues to
improve, more consumers can
discover the benefits of
homeownership, including the fact that
it is a primary source of net worth for
many Americans, and is an important
step in accumulating personal financial
assets over the long term.
The financial benefits of
homeownership begin in the first year
for most home owners, through the
ability to deduct mortgage interest and
property taxes paid off their taxable
income. This can result in savings of
thousands of dollars every year,
especially in the early years of the
mortgage when interest makes up the
largest portion of the monthly payment.
In addition to the financial benefits to
families, homeownership also
strengthens communities. Home
building increases the property tax
base that supports local schools and
communities.
Homeownership builds stronger
communities, provides a solid
foundation for family and personal
achieve ment and improves the quality
of life for millions of people, said
Woods.

Guest
Outlook
Reality Check:
Americans not in the labor force is at most 26 million
Elliot Eisenberg
Economic & Policy
Blog

Labor Force Loss

While the unemployment rate is 5.1%

and has fallen smartly since peaking at
10% in October 2009, a key question
is why? Part of the decline is due to
people finding work who were
previously unemployed, however part
of the decline is from people dropping
out of the labor force. To this end,
there are 92 million Americans who are
currently not part of the labor force.
But that number includes, among
others, retirees, students, and stay-athome parents, groups that by
necessity dont work and are thus not
part of the labor force. That said,
realistically how many Americans are
not in the labor force, and more
importantly, is the problem getting
worse?

First, the population of the US is

roughly 319 million. Of that number,
about 65 million are under 16 and are
excluded from employment data for
obvious reasons. That leaves roughly
255 million Americans who are over
16. However, that number includes 43
million Americans over 66, the age at
which full Social Security benefits are
available. Excluding such persons,
even though some are employed,
leaves 212 million people between 16
and 66.
Of the 21 million between ages 16
and 20, 54% are in school, and onethird are in the labor force, meaning
they are working or actively looking for
work. And of the 23 million persons
between 21 and 25, 73% are in the
labor force and 13% are in school.
Thus, between the ages of 16 and 25,
6 million people neither work nor
attend school. For these ages, this is
the number of persons who are really
not part of the labor force.
Of the 105 million persons between
the ages of 26 and 50, 82% work, 8%
care for a family member, which is not

surprising given the number of schoolage children and aging parents, 2%

attend school, while 6% are either on
disability or would like employment but
are not seeking it out. Of the 62
million persons between 51 and 66,
two-thirds work, 16% are retired and
12% are disabled, with the remaining
6% split between those wanting but
not looking for a job and those caring
for a family member. Thus, between
the ages of 26 and 66, there are 20
million persons not working, not caring
for a family member, not in school, and
not retired, the number effectively not
in the labor force.
So compared to decades ago are
things better or worse? It depends.
Compared to 1999, when labor force
participation rates were at their all-time
high, several things are apparent.
First, back then Baby Boomers were in
their prime working years, today they
are in their 50s and 60s and rapidly
retiring. Second, the percentage of
full-time students has risen for every
age category. Third, the percentage
that are disabled and fourth, the

percentage wanting a job but not

looking for one have both risen across
all age categories. Its these last two
categories that are of concern.
In conclusion, the real number of
Americans not in the labor force is at
most 26 million, not the 92 million
number that is widely cited, because
many of those individuals are in
school, caring for a family member, or
as increasingly is the case, have
retired. That said, the increase in the
percentage of discouraged workers,
those on disability, those in school, and
those that are retired has risen by
about five percentage points since
1999, thereby reducing both the labor
force participation rate and the
unemployment rate.
Elliot Eisenberg, Ph.D. is President of
GraphsandLaughs, LLC and can be
reached at Elliot@graphsandlaughs.net.
His daily 70 word economics and policy
blog can be seen at www.econ70.com.

2015 ISSUE 11

Trends

Technology & Construction

When experts discuss rapidly

evolving industries, construction rarely
makes its way into the conversation. In
some ways, this exclusion is
warranted, as veteran construction
managers and executives have often
been resistant to major advancements
and new methods in their industry.
Kevin Max, managing director of major
projects advisory at KPMGs New York
office, called construction "an industry
that evolves and moves rather slowly"
during an interview with Construction
Dive in May.
Change, however, is becoming a more
welcome concept for builders, as many are
embracing innovations and changing
consumer tastes. At the same time, trends
in the markets have a major impact on
construction professionals, who must
constantly keep up with the strength of the
industry as it struggles to get back on its
feet.
To help busy professionals stay up-todate with the latest trends in the
commercial and residential sectors, weve
compiled a list of 10 major trends driving
construction.
1. The shortage of qualified labor
continues to plague the industry.
Everyone knew this was coming. During
the recession and subsequent years of
struggle for the building industry, qualified
labor across all sectors fled in search of
work elsewhere. Now that the industry is
recovering, those workers just aren't
coming back. The area hit the hardest has
been skilled craft labor. Builders in
residential, commercial and industrial

Builders Outlook

10 trends defining the construction industry

By Emily Peiffer, http://www.constructiondive.com
sectors can't find the qualified workers
they need for new projects. The Bureau of
Labor Statistics recently found that
contractors had 143,000 unfilled jobs on
their books in June.
The Associated General Contractors of
America also reported this month that only
28 states added construction jobs between
June and July. The association blames this
"uneven growth" on tight budgets for
federal and state projects impacted
largely by Congress' inability to pass longterm highway construction funding as
well as the exodus of older workers, the
unreliability of construction jobs in an
uncertain economy, and the lack of trade
schools encouraging new construction
employees to enter the field.
Although the construction industry has
seen a strong rebound this year, its growth
has been crippled by this lack of qualified
labor. Unless more workers start to come
out of the woodwork and enter the field,
the pace of growth will continue to be
disappointing.

2. The use of BIM and technology/apps

on job sites is increasing.
Construction has been somewhat behind
the times when it comes to adopting new
technologies and innovations. In April, we
reported on a Texas A&M study that found
the construction industry lags behind many
others when it comes to using mobile
apps, cloud-based systems and other
technology. However, some contractors
have begun to realize the potential benefits
of new tech options.
Building Information Modeling has
quickly become the most significant and
widely adopted new technology method

employed in the industry. The process of

creating digital models to provide
information for planning construction has
proven beneficial for both safety reasons
as managers can use BIM to help
assess risks on job sites and to plan ways
to do more of the work off-site and for
economic reasons as it can help
contractors save thousands of dollars of
unnecessary spending on scaffolding and
staging.

Apps for phones and tablets have also

emerged as game changers for the job
site. A wide variety of apps are available
that can help contractors view purchase
orders, floor plans and site plans; schedule
appointments; submit change orders; look
up building codes and manufacturers
instructions; track weather; and more.
OSHA even offers a smart phone app that
outdoor workers and supervisors can use
to gauge the heat index of an outdoor work
site and the risk the crews face during
any point of the day.
Construction professionals need to keep
up with the latest technologies available,
as they can save time, money and lives.

3. Homebuilding mergers and

acquisitions will likely be on the rise
after the major Standard Pacific/Ryland
Group deal.
When Standard Pacific and the Ryland
Group first announced their merger in May,
analysts instantly offered predictions of an
impending surge of similar mergers in the
homebuilding industry, which has been in
the midst of what Builder magazine called
"an acquisition wave."
Between 2012 and 2014, more than 20
mergers and acquisitions occurred
between builders in an effort to create
shareholder value, acquire land and
improve operating efficiency. The Standard
Pacific/Ryland merger, however, rocked
the narrative, as the consolidation of the
two publicly traded builders will create the
fourth-largest homebuilder in the U.S.
Earlier this month, the two companies
announced their combined name would be
the CalAtlantic Group.
Standard Pacific Chief Executive Scott
Stowell told The Wall Street Journal he
expected the major merger to lead to
others. "We're out in front of what we think
will be a wave of consolidation in our
industry," he said.
His prediction has so far proven correct,
as Taylor Morrison, the seventh-largest
U.S. homebuilder by volume of sales,
revealed its plans to start building in
Chicago and two North Carolina markets
after acquiring three divisions of 64thranked Orleans Homebuilders.
Which builders will be next to catch the
merger wave? We expect more acquisition
news to pop up throughout the year.

Continues on page 12

Buildeers Outlook
On the Scene

PRO AM Golf Tournament

November 2015

StrucSure Home Warranty partners on EPAB Pro-am; Weather cooperates, course tough
The annual Pro-Am golf outing was
held at Coronado Country Club on
November 9. The event which is
sponsored by StrucSure Home
Warranty consists of club pros from
around west Texas and New Mexico
playing in their final round of point
accumulation for the Sun Country
PGA. Our event was hosted for the
first time at the prestigious Coronado
Country Club on the west side. This
tough course is not friendly for those
who have never played it, and its
tough for those who have. The day
was beautiful so I cant blame the
weather for our play today, said Don
Rassette who was teamed up with
Frank Torres and Scott Whisenant
from StrucSure. I can tell you that

Presented by

this course offers some of the most

challenging golf anywhere in the
state, probably the nation, said Scott.
Tough course, beautiful day. The
country club sits high up on the
Franklin mountain range and gives
the golfer a breathtaking view of the
city and into New Mexico.
This is the first pro-am in nearly 30
years at Coronado and we are so
grateful to the El Paso Association of
Builders for sponsoring us, said Mark
Gonzalez, head pro at the club. All
the pros really appreciate all that the
EPAB does for us in bringing in these
teams, matching us up in a great
event and sponsored by the
Association just makes it extra
special, Mark continued. The event

was moved to Coronado when club

member Bobby Bowling IV, who sits
on the clubs board, asked if we would
consider it. With our hiring of Mark
Gonzalez as the pro the Club really
wanted to showcase our course to the
other pros from around the area, and
we thought we could help the
Association in a partnership this
year, Bobby told the Outlook.
The 19 teams that played all had fun
or had fun at the frustration the layout
gives even the most seasoned golfer.
Im glad we pulled this one off in
such a great day especially when the
weather wasnt so great right before
and right after our tournament, said
Sam Shallenberger, golf chairman for
the EPAB. My thanks goes out to

the players, but my special thanks go

out to the partners and advertisers
who put up the money for us and
allowed us to make a little bank for
the Association, he continued.
Our tournament will continue to
evolve over the next few years and
our Sponsoring Partner StrucSure
Home Warranty has made a long time
commitment to it. We love coming to
El Paso and helping the Association
in a fun way, always good for us, and
a great day for those playing, said
Scott Whisenant of StrucSure.
Thank you for allowing us to be
involved, he continued.

10

The systems, he adds, must be designed

to carefully, using proper channel spacing
and power settings over enterprise-class
equipment. For example, most of the
interference issues exist in the 2.4 GHz
band, so hotels should design systems in
the 5 GHz band range, where there is
more space and less usage, and deploy

advanced techniques such as band

steering. The alternative is a hodgepodge
of conflicting networks, creating such
congestion that nobodys Wi-Fi network
works well including the venues.
What should guests do?
Hotel guests are right to ask if their
personal hotspot is being blocked. Among
hotel and convention center operators, the
idea that you can block a rogue access
point is justified, in sharp contrast to the
FCCs stated position, Collins adds. If you
suspect your hotspot isnt working right
because of interference, you could
contacting the hotels IT department to get
your device whitelisted, which means the
blocking system will see the MAC address
of your device and allow it to pass traffic.
But he admits its a long shot.
And if that doesnt work? Tell the hotel
manager that youll complain to the FCC if
the hotel does not cease blocking your
personal hotspots, says Miller. And then
do it.

Pioneer Bank understands

that time is precious
ous so we
offer products to
o help you
spend less time worrying
about finances a
and more
th
th t matter
tt

An
A
ld
dd friend
ffriend
i d wi
iith new
id
eas since
i e 1901.
1901
An old
old
wiith
new ide
id
deas
since
1901.
Pioneerr Bank has been your
community
nity
it bank since 1901.
When you grow, we grow.
Business
ss or personal, whatever
your financial needs, we provide
solution
ns to help you succeed!
Obtain your mortgage, car loan
and cre
edit card then pay
these and additional bills from
online Bill Pay. Pioneer Bank
understands
tands your needs and
provide
es the latest innovations
in banking!
ing!

FREE Checking
FREE Business Checking
Savings
Personal and
Commercial Loans
Mortgage
g g Loans
Merchant Services
Internet & Mobile
Banking
eStatements
Online Bill Pay
Remote Deposit

THREE CONV
VENIENT L
LO
OC
O
CAT
TIONS
IONS
N. M

esa S

esa S

t.

Trawood
awood Dr.
r.

Gateway

sler D

sler D

r.

t.
East

7015 N. Mesa
El Paso, TX 79912
Phone: (915) 782-2485

Lee Trevino Dr.

N. M

Lee Trevino Dr.

Hilton has become the latest hotel chain

to face government fines for allegedly
blocking their guests personal Wi-Fi
hotspots. It joins a growing list of hotel and
convention centers that have been accused
of falling afoul of federal law, which forbids
such activity.
Theres big money at stake. A facility can
earn hundreds of thousands of dollars from
selling wireless access, and for some
hoteliers, income from Wi-Fi subscriptions
can mean the difference between profit and
loss.
In recent months, though, the FCC has
cracked down on hotels and convention
centers. Among the fines:

In October 2014, Marriott agreed

to pay $600,000 to resolve an FCC
investigation.

In August, trade show and

convention telecom services provider
Smart City Holdings LLC was fined
$750,000 for Wi-Fi blocking at several
sites.

The FCC also is proposing a

$718,000 fine against systems integration
firm M.C. Dean Inc. for alleged Wi-Fi
blocking at the Baltimore Convention
Center.
The Hilton case began a year ago, when
the Federal Communication Commissions
(FCC) Enforcement Bureau received a
complaint that the Hilton Anaheim in
Anaheim, Calif., a convention hotel a mile
away from Disneyland, was blocking
visitors personal Wi-Fi hotspots unless
they paid the hotel a $500 fee for Hiltons
Wi-Fi. The government alleges the hotel
failed to com ply with its inquiry.
The FCC proposed a $25,000 fine
against Hilton, for apparently willfully and
repeatedly violating a commission order by
failing to respond to the bureaus letter of
inquiry and obstructing the Bureaus
investigation into whether Hilton willfully
interferes with consumer Wi-Fi devices in
Hilton-brand hotel and resort properties
across the United States.
We strongly disagree with the decision
by the FCC Enforcement Bureau, says
Aaron Radelet, a Hilton spokesman. Hilton
supports open access to private Wi-Fi
networks for our customers through their
personal devices, while at the same time
protecting their personal information. We
have a policy in place that states our
commitment to secure open access and
prohibits hotels from blocking Wi-Fi, and it
is repeatedly communicated to all
properties.
Radelet insists the company cooperated
with the FCC by providing extensive
background and details in a timely and
efficient manner. He notes Hilton did not
block Wi-Fi to collect a fee and that it
hasnt been notified of any other
complaints.
Why block Wi-Fi?
Sometimes hotels engage in accesspoint blocking in an effort to preserve the
quality of its own guest Wi-Fi, according to
Ben Miller, a Wi-Fi expert who blogs at
Sniffwifi. A fundamental rule in any Wi-Fi
deployment is that performance suffers
when more than one access point operates
on the same channel in the same place,
he says. When guests set up personal
hotspots, that often happens.
Marriott justified blocking Wi-Fi hotspots
last year using those reasons. But the FCC
gave the hotel chain a $600,000

government fine for allegedly interfering

with its guests personal wireless hotspots
at one of its large convention properties.
The hotel chain argued that it is having the
authority to disrupt these connections
would make customers less vulnerable to
hackers and unauthorized network
access.
Interestingly, Marriott petitioned the FCC
to clarify its rules on managing its wireless
networks. At the time, Hilton and the
American Hotel & Lodging Association, a
trade group, also supported its efforts. But
under intense pressure from guests and
consumer advocates, the petition was
quietly withdrawn earlier this year.
Better wireless networks
Although interference with an existing
Wi-Fi network is a legitimate problem, the
solution isnt to block other networks, some
say. Instead, hotels and convention centers
have to construct a better wireless network,
says Casey Collins, CEO of C3-Wireless,
which builds wireless networks for the
travel industry.

S. Re

by Christopher Elliott, Fortune

2015 issue 11

FCC Cracking Down on Hotels' Wi-Fi Blocking

S. Re

Modern World

Builders Outlook

6068 Gateway East

6
E Paso, TX 79905
El
P
Phone:
(915) 782-2400

2290 Trawood
El Paso,
so, TX 79905
Phone: (915) 782-2470

C
re
of $50 to open. Each account
is insured by FDIC up to
$250,000. Servicess vary
depending on account.
unt.
See bank representative
tative
for more details.

www.pi
w
www.
b k .com
bnk.
m
pioneerb

2015 issue 11

11

Builders Outlook

Trends
Culture

Why Millennials Still Live With Their Parents

The entire increase in

young adults living with
their parents over the
past twenty years can be
explained by
demographic shifts. That
means the high share of
millennials living with
parents today might be
the new normal.

Jed Kolko, Professional Builder

More young adults are living with their

parents in 2015 than during the
recession. Despite widespread
expectations (including my own) that
young people would move out as the
job market recovered, they are not.
The share of 18-34 year-olds living
with parents was 31.5% in 2015, up
from 31.4% in 2014. (These Census
data are from March of each year. See
note at end of post on data and
methods.) Using different Census data,
Pew recently reported that in 2014 the
share of young adults living with
parents or relatives was at its highest
level since 1940 for men and even
earlier for women.
After dropping a bit from the late
1990s to the early 2000s, the share of
18-34 year-olds living in their parents
home rose steadily from 2005 to 2012
and has remained near this postrecession high even as the economy
has recovered and unemployment for
young adults has dropped sharply.
Because the share of young adults
living with their parents rose suddenly
after the housing bubble of the mid2000s burst, its natural to explain this
trend in terms of recent housing and
labor market dynamics. After all, young
adults with jobs are much less likely to

live with their parents than young

adults without jobs are. Plus, rising
rents and student debt burdens might
be holding young people back from
moving out of their parents homes.
However, alongside recent swings in
the housing and job markets, there
have been profound long-term
demographic shifts that are related to
young adults living arrangements. For
instance, an unusually high share of
18-34 year-olds are at the young end
of that range, and younger young
adults (18-24) are much more likely to
live with parents than older young
adults (25-34). An especially important
trend is that people are waiting longer
today than in the past to get married
and have kids so the share of 18-34
year-olds who are married with kids
has plummeted from 49% in 1970 to
36% in 1980
How much have these longer-term
demographic shifts contributed to the
increase in young adults living with
their parents? Using regression
analysis, I estimated how much these
demographic shifts contributed to
changes in young adults living with
parents in order to extract the
demographics-adjusted trend. I
included a standard set of
demographic variables: five-year age
subgroup, marital status, presence of
children, sex, race, ethnicity, nativity
(i.e. native- or foreign-born), current

school enrollment, and educational

attainment.
Adjusted for demographic shifts, the
share of young adults living in their
parents home was actually lower in
2015 than in the pre-bubble years of
the late 1990s. In other words, young
people today are less likely to live with
their parents than young people with
the same demographics twenty years
ago were. To be sure, even the
demographics-adjusted share of young

adults living with their parents has

climbed back up since the housing
bubble burst around 2006, but it
remains below pre-bubble levels from
the 1990s.
, 32% in 1990, 27% in 2000, 22% in
2010, and just 20% in 2015.
Unsurprisingly, married young adults
and those with children are far less
likely to live with their parents than
single or childless young adults.

Insurance developed for builders.

Developed for builders with the backing of the strongest insurance
carriers serving the Texas building industry, our insurance program
offers flexible coverage options and rates that are more competitive
than ever. As an authorized member of Builder Agent Network, were
dedicated to providing builders and contractors with the best-in-class
insurance programs, pricing, underwriting, resources and service.
Product Portfolio Highlights
t
A rated carriers, several available
t
(-
PFSJOH
Doverage for property damage that results from faulty, defective,
or poor workmanship in your work.
t
(-
-JNJUT
PG
VQ
UP
...
Bvailable
t
Expanded policy form for commercial projects
t
Builders Risk master policies, monthly reporting, annual and one shots
t Workers Comp - Two highly cost-effective programs
t
ExDFTT
-JBCJMJUZ
GPS
$PNNFrcial (eneral Contractors
t
$PNNFrcial Umbrella
El Paso, Permian Basin and Surrounding Area
HUB International Insurance Services
-VJT
3PTBT
915-206-6047
www.hubinternational.com

www.builderagentnetwork.com

12

Builders Outlook

Trends

Technology & Construction

10 trends defining
the construction
industry
By Emily Peiffer,
http://www.constructiondive.com
Continued from page 7

4. Tight home inventory (especially for

starter homes) and rising home prices
are creating a seller's market and
hindering low-income and first-time
buyers from entering the market.
The housing market is slowly crawling
back from the depths of the recession.
Economists keep a close eye on the
residential industrys stability, as it is a
major indicator of the overall economy.
But housing growth has been unable to
kick into high-gear due to the lingering
problem of a lack of affordable, available
inventory on the market.
Zillow reported fewer homes were
available for sale in June than a year ago.
The inability to find a home in an
affordable price range makes the
homebuying process even more difficult.
And with a smaller supply of entry-level
homes, more low-income buyers will be
forced to remain renters.
At the end of August, Black Knight
Financial Services found that home prices
in 13 of the 40 metros surveyed hit new
peaks.
As a result of this ultra-limited supply of
homes, bidding wars have heated up.
Sellers can price their properties higher
because there aren't enough options for
buyers to choose from.
Although home prices haven't risen as
rapidly as rents, they have still steadily
increased making home purchases
even further out of reach. In August, NAR
chief economist Lawrence Yun said the
rising prices of existing homes are
exacerbating the nation's "inequality
problem."
For the housing market to truly take off,
housing inventory will need to expand
greatly and give potential homebuyers a
reason to make the leap into ownership.

5. Tiny houses are becoming more

than just a fad and have builders taking
notice.
Tiny houses have captured the attention
not just of the building industry, but of the
world. These microhomes have created a
trend of small-living and off-the-grid
lifestyles. The dwellings also are quick to
build and cost an average of $23,000,
according to The Tiny Life.
While some expected tiny homes to be
a passing fad, they have proven
themselves to be a popular alternative to
the rising prices of megahouses. The first
official Tiny House Jamboree in Colorado
Springs, CO, drew 40,000 people, and
Brad Pitt's post-Hurricane Katrina
recovery organization Make It Right
marked the devastating storms 10th
anniversary by constructing a model of a
high-tech, energy-efficient microhouse.
So far, big builders have seemingly
shied away from the growing popularity of
these tiny homes, paving the way for
small, craft builders to capitalize on the
burgeoning market.
6. There has been heightened attention
on job site safety and stricter
punishments for managers and
executives who put workers in danger.
Safety has always been an issue for the
construction industry. According to the
Bureau of Labor Statistics, construction
laborers have the 10th most dangerous
job in America. Recently, there has been

more focus on job site safety and stricter

penalties for those who contribute to an
unsafe work environment.
Just this month, a jury ordered New
York Crane and Equipment Corp. owner
James Lomma and his companies to pay
$47.8 million to the families of two New
York construction workers who died when
a crane collapsed on their job site in 2008;
and Joseph Kehrer and Kehrer Brothers
Construction were slapped with $1.79
million in fines from OSHA for "willfully
exposing" eight workers to asbestos.
Also during August, the owner and the
project manager of a California
construction company were sentenced to
two years in prison for what Cal/OSHA
called the "preventable death" of a day
laborer who was buried alive in 2012. This
case was particularly unusual, as
contractors rarely get jail time for a job
site accident. Dave Cogdill, executive
director of the California Building Industry
Association, said he had never heard of a
jail sentence for a fatal construction
accident in California.
These increasingly stronger
punishments and higher penalties are
meant to send a message to construction
managers and contractors who allegedly
cut corners when it comes to worker
safety .

7. 3-D printing and off-site construction

are emerging as possibly more efficient
ways to build.
Will 3-D printing alter the construction
industry forever? The jury is still out on
that one. If it does have a significant
impact, it will likely occur many years
down the road. For now, however, builders
are experimenting with the new
technology, which can drastically reduce
building time and costs. A technology
startup in Chattanooga, TN, for example,
is reportedly using the world's largest freeform 3-D printer to build walls for new
homes.
Builders are also eyeing 3-D printing
options for in-space construction, as well
as researching how to 3-D print a car and
home which can also share energy
from the same material.
Similarly, many are also improving
efficiency through off-site construction
methods. A Kansas City startup is building
the city's first net-zero home using
alternative construction processes to
reduce costs and build time. To do so, the
company plans to ship construction kits
with pre-cut structural insulated panels,
windows, fixtures and most other building
materials, to the local builder who will
construct the house.
8. The green building market is
growing, and builders are often
encouraged to adopt green practices.
Green building is far from a new
concept, but environmentally friendly
construction has been picking up steam
and likely won't let up anytime soon.
Carnegie Hall, for example, qualified
this month for LEED Silver certification
after a massive renovation to make
165,000 square feet of the concert halls
non-performance space more energyefficient.
President Obama's Clean Power Plan
could also have significant implications for

2015 issue 11

the green building movement in the

commercial and industrial space, as his
proposed standards include tax credits for
electricity generated in 2020 and 2021
from renewable energy plants that begin
construction early. The new standards
could spur a wave of solar and wind farms
across the U.S. Already, Colorado broke
ground this month on the state's largest
solar farm.
However, the green building movement
has come with its fair share of
controversy. The new 2015 International
Energy Conservation Code has sparked
debate among builders and
environmentalists, who are debating which
codes could potentially harm the building
industry, despite possible benefits for the
environment. One of the largest clashes
occurred this month in St. Louis, MO,
where the committee charged with
recommending which new building codes
the county should adopt recommended
the county remove some of the measures
meant to reduce energy usage in new
homes due to higher costs.
The green building trend is here to stay,
but it will likely continue to face opposition
along the way.
9. Regulators and law enforcement
have been cracking down on
corruption in construction.
The construction industry is no stranger
to corruption problems. Recently, there
has been a surge of officials cracking
down on corrupt developers and
construction executives who used their
businesses for their own gain.
August saw a heat wave of corruption
charges. At the start of the month, seven
Florida construction executives were
charged with pocketing $36 million in U.S.
tax credits intended for governmentsubsidized, affordable housing projects in
the Miami area. Later in August, a Las
Vegas construction "kingpin" was ordered
to serve 15.5 years in a federal prison and

pay $13.4 million for his role in an

elaborate scheme to take over the city's
homeowners' associations and divert their
construction contracts to his company.
To combat corruption in the construction
industry, the Manhattan DA launched a
task force earlier this month to identify
and prosecute corruption in New York
City's construction industry. With efforts
like the Manhattan task force, the industry
as a whole could start to see an influx of
corruption charges and punishments
designed to deter similar practices.
10. Builders are hoping millennials will
finally start buying homes instead of
staying renters.
Millennials seem to be all anyone can
talk about when discussing the housing
market. Will they finally leave the renting
lifestyle and make the plunge into
homeownership? Will student debt cause
them to delay ownership even longer?
The residential industry overflows with
constant reports of buying activity for the
coveted 18-34 age segment.
Just this month, reports revealed:
Millennials are more likely to put off
buying their first homes than they are to
postpone marriage or purchase cars; firsttime homebuyers are renting for an
average of six years before they buy,
more than twice as long as in the 1970s;
and sales of existing homes to first-time
buyers fell in July to their lowest share
since January, even as overall sales
increased for the third consecutive month.
These reports paint a bleak picture of
the current millennial-homebuying climate.
To snag the young buyers, builders need
to offer more entry-level home options at
affordable prices.

Give your customers

the option of the sun
Now more than ever,
ElPaso home buyers
are planning for the
future.

Border Solar can help

you oer your
customers solar power
as a sensible
alternative.
Crossing to CleanEnergy

7365 Remcon Circle

El Paso, TX 79912
(915) 6134168

The future starts

today.
follow us on twitter and
facebook:
BorderSolar

2015 Issue 11

Association
News & Events

13

Builders Outlook
Make your travel
arrangements now for
the 2016 International
Builders Show in
Las Vegas.
Jan 19-21

&

innovative design

UPCOMING
EVENTS
DECEMBER 11
INSTALLATION
6PM COCKTAILS
7PM DINNER DINNER &
AWARDS
MARRIOTT HOTEL
JANUARY 6
LUNCH AND LEARN
NOON
EPAB OFFICE

NEW MEMBERS

SODA SPONSOR

desktop publishing
since 1984

EDWARDS HOMES
(WELCOME BACK)
SUPERIOR STORM WATER
SERVICES, LLC
CONTACT: LINETH SANCHEZ
8505 PASEO ALAMEDA NE
ALBUQUERQUE, NM 87113
505-433-3693

Connect to the El Paso

Association of Builders:
www.elpasobuilders.com

ted escobedo

ted@snappypublishingcom
talk & text: 9158202800
Get Creative. Make it Snappy.

BUILDERS:
Are you searching for customers who are searching for a new home?

Search No More. The

Associaion of Builders has a
NEEU Website, strictly for
NEEU Homes!
The finest builders in the
area showcase their
homes at:

brought to you by:

14

Builders Outlook

Associates
Council

Sam Shallenberger
Morrison Supply

Expert
Advice

Joe Bernal

Employer Benefits of El Paso

Voluntary benefits can do two

things for your benefit program: they
can give smaller employers, who
might not be able to afford benefits, a
way to provide a variety of benefits at
no cost. For other employers, it
provides a way to enhance the
employer-provided benefit program.
What are voluntary benefits?
Under a voluntary benefit program,
the employer offers employees a
menu of benefits; employees pay for
the ones they want through payroll
deduction. The employee pays all of
the cost and the benefits provider
handles all administration and
provides all needed education
materials. Voluntary medical plans,
such as cancer insurance, have no
minimum participation requirements,
unlike employer-sponsored medical
coverage.
Voluntary benefits include:
Dental insurance.
Vision insurance.
Long-term care insurance.
Short-term disability insurance.

My deepest thanks go out to our

sponsors for the golf pro am, for
everyone who bought a tee box sign,
advertised with us or sponsored the
food and drink. To my bud Scott
Whisenant from StrucSure, we
couldnt do this without your strong
partnership and support. To Mark
Gonzalez at the Coronado Country
Club thanks for hosting us. To Bobby
Bowling IV thanks for asking if we

could do the golf there. My thanks

also to Margaret in the office and of
course to Ray for his work. This is a
good event for us and Im sorry a lot
of you couldnt play in it this year. Im
stepping down as Associates
Chairman and will concentrate on golf
for the coming year, so my plans are
for three golf outings this year instead
of two. We like to Pechanga, so well
do two of those and the more serious

2015 issue 11

pro-am. Im looking forward to it,

hope you are to. To all my fellow
associates thank you for a good year.
Im hoping to see you at the
installation in December and want to
wish you happy Thanksgiving. Eat a
lot.

Voluntary Benefits Offer Many Advantages,

Some Pitfalls
Long-term disability insurance.
Accidental death and
dismemberment insurance.
Life insurance. Options include
term life insurance, interest-sensitive
whole life (variable life) and
dependent life coverages.
Supplemental health coverages,
including cancer/specified disease
insurance, critical illness insurance
and hospital indemnity plans, which
pay specified flat amounts.
Auto and homeowners insurance.
Nontraditional benefits, such as
prepaid legal services, pet insurance
and more.
Advantages of Voluntary Benefits
Employees like voluntary benefits.
Even when they pay 100 percent of
premiums, they get the benefit of
group discounts. Through group
buying power, voluntary programs can
often offer more generous coverage
terms than programs available in the
individual market. In life and health
insurance underwritten on a group
basis, employees can also obtain
coverage without going through a
medical exam. These guaranteed
issue amounts might be small, but
they can be valuable for people
whose health prevents them from
buying coverage on the individual
market.
Considerations
Although voluntary benefits have
many advantages, be sure to
consider the following before offering
them: Does the voluntary program

Jaimes
Courier
Service,Inc.

provide real value? Employees are

likely to view a voluntary program as
employer-sanctioned. If it provides
little real value, it could create a
negative impression of the rest of
your benefits program. Beware
certain discount programs, such as
dental discount cards, which might
provide only limited discounts.
Does the voluntary program
enhance existing offerings? If you
provide group life to employees that
pays one or two times salary, a
voluntary life insurance plan with a
higher benefit could provide real
value to employees who need more
coverage.
Does ERISA apply to the
program? The Employee Retirement
Income Security Act of 1974 (ERISA),
governs employee benefits. As a
federal law, it applies to most group
life and health programs unless they
meet all four of these conditions:
1 The employer or employee
organization makes no
contributions.
2 Participation is completely
voluntary.
3 The employer or organization
does not endorse the program.
Endorsement has a broad
meaning.
Avoid using company logos on
promotional/informational material,
encouraging employees to sign up, or
even negotiating with the insurer for
better terms for your employees. You
can permit the insurer to publicize the

915-549-4533
or
915-478-2404
Bonded, insured for
your peace of mind.

program to employees or members,

collect premiums through payroll
deductions and remit them to the
insurer. 4 The employer accepts no
payment in connection with the
program, other than reasonable
compensation for administrative
services in connection with payroll
deductions. When ERISA applies to
a benefit program, the sponsor has
additional responsibilities. The
sponsor or its designated
administrator must file an annual
Form 5500, provide participants with
important information about plan
features and funding, act as a
fiduciary in the management and
control of plan assets and establish a
grievance and appeals process for
benefit disputes. ERISA also gives
participants the right to sue for
benefits and breaches of fiduciary
duty. Although the responsibilities
imposed by ERISA are not onerous,
the failure of your insurer or
administrator to do any of the above
for your plan could expose your firm,
as plan sponsor, to fiduciary liability.
Before offering any voluntary
benefits, we recommend talking with
an experienced benefit consultant to
see how they fit into the rest of your
benefit program. For more information
on employee benefitsvoluntary and
otherplease call us.

Builders
Outlook

15

2015

El Paso Disposal

Issue 11

772-7495
6046 Surety Dr. El Paso, TX 79905
915-778-5387 Fax: 915-772-3038

EXECUTIVE OFFICERS
Edgar Montiel, President
Palo Verde Homes

Carlos Villalobos, Vice President

Pointe Homes
Don Rassette, Secretary/Treasurer
Rassette Homes
Sam Shallenberger, Associates Chair
Morrison Supply

NATIONAL DIRECTORS

Bobby Bowling IV.

Demetrio Jimenez
NATIONAL ASSOCIATION OF
HOME BUILDERS
(800) 368-5242

TEXAS ASSOCIATION OF
BUILDERS

(800)252-3625

Frank Torres, Immediate Past President

GMF Homes
Ray Adauto, Executive Vice President
Executive Vice President
Jay Kerr -Attorney of Record
Firth, Johnston, Bunn & Kerr
COUNCIL/COMMITTEE CHAIRS

Associates Council
Sam Shallenberger
Build Pac
Randy Bowling
Land Use Council
Linda Troncoso

Young Designer Award

John Chaney
Remodelers Council
Rudy Guel
Membership Retentiion
Patrick Tuttle
Finance Committee
Kathy Carrillo
Henry Tinajero

ADVISORY TO THE BOARD

Jay Kerr, Firth, Johnston, Bunn & Kerr

James Martinez, Law Office of James Martinez
BOARD OF DIRECTORS

Antonio Cervantes, BIC Homes

Bret Thompson, Foxworth Galbraith Lumber

Bud Foster, Southwest Land Development Servises

Dan Ruth, Millienium Homes

Henry Tinajero, West Star Bank

Joe Bernal, Employer Benefits Of El Paso

John Chaney, Passage Supply
John Dorney, Dorney Security
Kathy Carrillo, Pioneer Bank

Kathy Parry, Hunt Companies

Leti Navarette, Custom Dream Homes

Linda Troncoso, TRE & Associates
Robert Najera, Joseph Homes
Walter Lujan, Dawco Builders

TAB STATE DIRECTORS

Randy Bowling
Greg Bowling

Sam Shallenberger

For All Your Electrical Needs

Residential Specialists
Tract Homes Custom Homes

2014 Builder Member Of The Year

Frank Torres
GMF Homes
2014 Pat Cox Award
Bret Thompson
Foxworth Galbraith Lumber

Total Customer
Satisfaction

2014 Associate Of The Year

Joe Bernal
Employer Benefits Of El Paso
2014 John Shatzman Award
Cindy Bilbe, Stewart Title
Honorary Life Members
Mark Dyer
Wayne Grinnell
Don Henderson
Chester Lovelady
Cliff C. Anthes
Anna Gill
Brad Roe
Rudy Guel
E H Baeza
Past Presidents
Committed to Serve

Greg Bowling
Kelly Sorenson
Mark Dyer
Mike Santamaria
John Cullers
Randy Bowling
Doug Schwartz
Robert Baeza

Bobby Bowling, IV
Rudy Guel
Anna Gil
Bradley Roe
Bob Bowling, III
Edmundo Dena
Hershel Stringfield
Pat Woods

EPAB Mission Statement:

The El Paso Association of Builders is a
federated professional organization representing
the home building industry, committed to
enhancing the quality of life in our community by
providing affordable homes of excellence and
value.
The El Paso Association of Builders is a
501C(6) trade organization.
2015 Builders Outlook
is published and distributed for the
El Paso Association of Builders
by Ted Escobedo, Snappy Publishing
ted@snappypublishing.com
El Paso Texas 915-820-2800

Builders
Outlook

www.elpasobuilders.com

National, State & Local Building Industry News

2015: Issue 10

2016: Housing
Recovery to pick
up steam amid
challenges

teady employment and economic growth, pent-up

demand, affordable home prices and attractive
mortgage rates will keep the housing market on a
gradual upward trend in 2016. However, persistent
headwinds related to shortages and availability of lots
and labor, along with rising materials prices are
impeding a more robust recovery, according
to economists who
participated in a National Association
of Home Builders (NAHB) Fall
Construction ForecastWebinar.
This recovery is all about jobs, said
NAHB Chief Economist David Crowe. If
people can get good jobs that pay decent
incomes, the housing market will continue
to move forward.
The good news, Crowe added, is that
total U.S. employment of 142 million is now
well above the previous peak of 138 million
that occurred in 2008.
The one caveat is that job growth has
been concentrated heavily in the service
sector, which tends to pay lower wages
than goods producing jobs.
Meanwhile, home equity has nearly
doubled since 2011 and now stands at
$12.5 trillion.
The single biggest asset in most
peoples portfolio is the home they own,
said Crowe. Thats important because the
primary purchasers of new homes are the
sellers of existing homes. The more equity

Fall Home and

Garden Show
attracts thousands
The annual Fall Home and Garden show
brought thousands of people into the
Judson Williams Convention Center as the
show kicked off October 9. The throngs of
people were greeted by a very nicely
presented show compliments of the
producer Show Technology out of San
Antonio.
The show featured a spectacular
showcase home by new builder member
Metro Homes. The design of the display
was made to be partially constructed off
site in order to meet the time lines
established for the show. I have to tell you
that even with that additional time we really
hustled to make sure we had a great
product to show, said Fernando Torres of
CTU Metro Homes. Beautiful and elegantly
staged the house became the favorite of
the show winning Best of Show for the
efforts. We are excited to be able to show
off our models to the public and to the real
estate agents because were new to the
market and we think we have a very good
product to offer the consumer, Torres
continued.

they have, the more comfortable they feel

about purchasing a new home.
And while mortgage interest rates are
expected to rise over the near-term,
averaging 4.5 percent in 2016 and 5.5
percent in 2017, Crowe said this is not
expected to have an impact on the housing
recovery. As the economy gets better, job
and wage growth should keep pace. So
even though mortgage rates will rise, they
will still be low by historical standards and
very affordable.

Supply Headwinds
Crowe noted several factors that are
hindering a more robust recovery. Citing an
NAHB survey of its members, 13 percent of
builders reported the cost and availability of
labor was a significant problem in 2011 and
that concern jumped to 61 percent in 2014.
About one-fifth of builders shared the
No doubt that the home brought together
ideas that really made the showcase home
that much more interesting. The process
of actually piecing the walls together,
setting up the floor and the all that goes on
a wall or in the ceiling is not something for
the faint hearted. We were asked by
Habitat for Humanity to donate what we
could from this build, and Im proud that we
could, Torres told the Outlook. The rest of
the showcase was quickly taken to a lot
waiting for some of the frame and other
parts that could be used so to not go to
waste. Overall a very beautiful green
showcase home that will continue to give
for years to come.
The Fall Home and Garden was the only
show of its kind this year since the civic
center was taken over for the Mens
Bowling Championship (ABC). The civic
center turned into a large bowling alley
complete with state of the art lanes. We
run into situations like this when the civic
center or halls we use are the only ones
that can fit our shows, said Tommy Mantini
of Show Technology. We have to be
flexible but then again I know that this year
we would have pent up demand and it
showed during this event.
What impressed many was the carpeted
aisles and the amount of room to
comfortably move around. I thought this
was one of the nicest shows weve had in

915-208-9313
602-708-7560

same concerns regarding lots in 2011 and

that ratio shot up to 58 percent in 2014.
Concerns over building materials stood
at 58 percent among builders in 2014, up
from 33 percent in 2011.

some time, said Associates Chairman

Sam Shallenberger. We had new displays
and exhibitors and that was a nice thing to
have.
The presenting attraction was the Wall
Wizard, Brian Santos who did several
demonstrations during the three day event.
I really love coming to El Paso and seeing
so many folks for the first time, Brian told
the Outlook. The El Paso Association of
Builders has helped me get other gigs with
other associations and Im grateful for the
recommendation, he continued. Santos,
who has authored several how to books
and is an inventor and innovator for several
companies including Home Depot. My
relationship with Rubber Maid and Home
Depot and Lowes is really a great thing to

Single-Family Continues to Post Gains

Turning to the forecast, NAHB is
projecting 719,000 single-family starts in
2015, up 11 percent from the 647,000 units
produced last year. Single-family
production is projected to increase an
additional 27 percent in 2016 to 914,000
units.
On the multifamily side, production ran at
354,000 units last year, slightly above the
331,000 level that is considered a normal
level of production. Multifamily starts are
expected to rise 9 percent to 387,000 units
this year and post a modest 3 percent
decline to 378,000 units in 2016.
Residential remodeling activity is
forecasted to increase 6.8 percent in 2015
over last year and rise an additional 6.1
percent in 2016.
Continued Page 6

Advertise your
business to the
home building
industry

bring to the consumer because I know

whats hot in the world of walls, Santos
said.
Our sincere thanks to CTU Metro Homes
and all the suppliers and the staff of David
Acosta Real Estate. We also owe a debt
of gratitude to the exhibitors who filled the
civic center with good products and lots of
things for the visitor to see. Our Spring
Home and Garden Show is on for March
11-13, 2016. Dont miss this opportunity to
reach potential customers. Visit Show
Technology today at
www.showtechnology.com to get
information on the Spring show.
See More Photos Page 8

The Builders Outlook is the official publication of the El

Paso Association of Builders. Our award winning monthly
newspaper is the only publication to target El Paso home
builders and related businesses.

Widely distributed throughout the city and available to

readers online, the Builders Outlook is an important
advertising medium for any business that want to reach this
valuable market.

Call 778-5387 today for more information