Builders utlook www.elpasobuilders.com www.epbuilders.org 2013 issue 4 NAHB, Washington, DC - To meet the nation’s growing need for affordable rental housing and homeownership opportunities, the National Association of Home Builders (NAHB) today called on Congress to maintain its support for vital housing tax incentives, including the Low Income Housing Tax Credit, the mortgage interest deduction and real estate tax deductions. “Home building is an industry dominated by small businesses, so the idea of simplifying the complicated tax rules related to business has great appeal. At the same time, our industry remembers painful lessons from the 1986 Tax Reform Act, when the commercial and multifamily sectors experienced a downturn due to unintended consequences,” said Robert Dietz, an economist and assistant vice president for NAHB, in testimony during a House Ways and Means Committee hearing on tax reform and residential real estate. Moreover, when housing fares well, it spurs job and economic growth, Dietz added. “For these reasons, we urge Congress to be cautious and thoughtful when it comes to housing and tax reform.” U.S. Census data shows that more than 40 percent of renters are “rent burdened,” or pay more than 30 percent of their household income on rent. The need for affordable rental options remains acute. The Low Income Housing Tax Credit (LIHTC) is the most effective tool for the creation of affordable rental housing. Utilizing a public-private partnership to attract investment, the program has produced and financed more than 2 million affordable rental units since its inception in 1986. “As LIHTC properties must generally remain affordable for 30 years, they provide long-term rent stability for low-income households around the country,” Dietz said. “But the demand for affordable housing far exceeds the availability of financing through the LIHTC program. The solution is not to eliminate the most successful affordable housing program in the country, but to provide it with the resources necessary to address the shortage of affordable housing options in our cities and towns.” When it comes to housing and tax reform, the spotlight typically falls on the mortgage interest deduction, and Dietz set the record straight on a number of false assumptions regarding this important homeownership benefit. “First, we frequently hear that few home owners benefit from the mortgage interest deduction because itemization is required,” he said. “In fact, most home owners will claim it. In 2009, 35 million taxpayers, or 70 percent of home owners with a mortgage, claimed the mortgage deduction in that year. Among all home owners who have ever held a mortgage, the vast majority have claimed the home mortgage deduction for years at a time.” Critics charge that the mortgage interest deduction encourages the purchase of a larger home, but these claims ignore the role of family size. Home owners with larger families need bigger homes and will therefore have a higher mortgage interest deduction. “The need for a larger home created the higher home loan deduction, not the other way around,” said Dietz. He also noted that the cost of housing varies greatly across the nation, so what appears to be a large deduction for a given home in one area may reflect a modest home in a high-cost area. Moreover, the mortgage interest and real estate tax deductions are two of the few elements in the tax code that that account for differences in cost-of-living. “The real estate tax deduction is an important reminder that home owners pay more than $300 billion in property taxes each year. This fact is often ignored in the federal tax debates because these taxes are collected by state and local governments,” said Dietz. There is also a direct correlation between the age of a home owner and their resulting benefit from the mortgage interest deduction. As a share of household income, the largest deductions are for those 35 and younger. The benefit of a deduction that reduces the net cost of monthly house payments is particularly important to these home buyers, who typically have less equity, tighter household budgets, and must meet the needs of a growing family. “Given this demographic connection, NAHB believes that any policy change that makes it harder to buy a home, or forces young families to defer home purchases, will have a significant impact on wealth accumulation and the makeup of the middle class,” said Dietz. Regarding the mortgage interest deduction rule for second homes, Dietz said that many mistakenly think this refers to expensive beach property, when in reality, such homes are often owned free and clear or rented, which excludes the owner from taking the mortgage interest deduction. In practice, the second home deduction is important for many who don’t think of themselves as owning two homes. Repealing the deduction for second homes would penalize millions of home owners who move from an existing home and buy a second home in a given tax year. There would be further negative economic consequences in terms of lost home sales, home construction and local tax revenues. Noting that building 100 single- family homes creates more than 300 full-time jobs and $8.9 million in federal, state and local tax revenues that helps boost local communities and schools, Dietz said that how housing is treated in an future tax reform will shape the economy going forward. “Housing provides the momentum behind an economic recovery because home building and associated businesses employ such a wide range of workers. With the right policies in place, housing can be a key engine of job growth that this country needs.” Housing Tax Incentives Critical to Maintain Thriving Middle Class
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NAHB, Washington, DC - To meet the nation’s growing need
for affordable rental housing andhomeownership opportunities, theNational Association of HomeBuilders (NAHB) today called onCongress to maintain its support forvital housing tax incentives, includingthe Low Income Housing Tax Credit,the mortgage interest deduction andreal estate tax deductions.
“Home building is an industrydominated by small businesses, sothe idea of simplifying the complicatedtax rules related to business hasgreat appeal. At the same time, ourindustry remembers painful lessonsfrom the 1986 Tax Reform Act, whenthe commercial and multifamilysectors experienced a downturn dueto unintended consequences,” saidRobert Dietz, an economist andassistant vice president for NAHB, intestimony during a House Ways andMeans Committee hearing on taxreform and residential real estate.
Moreover, when housing fares well,it spurs job and economic growth,Dietz added. “For these reasons, weurge Congress to be cautious andthoughtful when it comes to housingand tax reform.”
U.S. Census data shows that morethan 40 percent of renters are “rentburdened,” or pay more than 30percent of their household income onrent. The need for affordable rentaloptions remains acute. The LowIncome Housing Tax Credit (LIHTC) isthe most effective tool for the creationof affordable rental housing. Utilizinga public-private partnership to attractinvestment, the program hasproduced and financed more than 2million affordable rental units since itsinception in 1986.
“As LIHTC properties mustgenerally remain affordable for 30years, they provide long-term rentstability for low-income householdsaround the country,” Dietz said. “Butthe demand for affordable housing farexceeds the availability of financingthrough the LIHTC program. Thesolution is not to eliminate the mostsuccessful affordable housingprogram in the country, but to provideit with the resources necessary toaddress the shortage of affordablehousing options in our cities andtowns.”
When it comes to housing and taxreform, the spotlight typically falls on
the mortgage interest deduction, andDietz set the record straight on anumber of false assumptionsregarding this importanthomeownership benefit.
“First, we frequently hear that fewhome owners benefit from themortgage interest deduction becauseitemization is required,” he said. “Infact, most home owners will claim it.In 2009, 35 million taxpayers, or 70percent of home owners with amortgage, claimed the mortgagededuction in that year. Among allhome owners who have ever held amortgage, the vast majority haveclaimed the home mortgagededuction for years at a time.”
Critics charge that the mortgageinterest deduction encourages thepurchase of a larger home, but theseclaims ignore the role of family size.Home owners with larger familiesneed bigger homes and will thereforehave a higher mortgage interestdeduction.
“The need for a larger homecreated the higher home loandeduction, not the other way around,”said Dietz.
He also noted that the cost ofhousing varies greatly across thenation, so what appears to be a largededuction for a given home in onearea may reflect a modest home in ahigh-cost area.
Moreover, the mortgage interest
and real estate tax deductions aretwo of the few elements in the taxcode that that account for differencesin cost-of-living.
“The real estate tax deduction is animportant reminder that home ownerspay more than $300 billion in propertytaxes each year. This fact is oftenignored in the federal tax debatesbecause these taxes are collected bystate and local governments,” saidDietz.
There is also a direct correlationbetween the age of a home ownerand their resulting benefit from themortgage interest deduction. As ashare of household income, thelargest deductions are for those 35and younger. The benefit of adeduction that reduces the net cost ofmonthly house payments isparticularly important to these homebuyers, who typically have less equity,tighter household budgets, and mustmeet the needs of a growing family.
“Given this demographicconnection, NAHB believes that anypolicy change that makes it harder tobuy a home, or forces young familiesto defer home purchases, will have asignificant impact on wealthaccumulation and the makeup of themiddle class,” said Dietz.
Regarding the mortgage interestdeduction rule for second homes,Dietz said that many mistakenly thinkthis refers to expensive beach
property, when in reality, such homesare often owned free and clear orrented, which excludes the ownerfrom taking the mortgage interestdeduction.
In practice, the second homededuction is important for many whodon’t think of themselves as owningtwo homes. Repealing the deductionfor second homes would penalizemillions of home owners who movefrom an existing home and buy asecond home in a given tax year.There would be further negativeeconomic consequences in terms oflost home sales, home constructionand local tax revenues.
Noting that building 100 single-family homes creates more than 300full-time jobs and $8.9 million infederal, state and local tax revenuesthat helps boost local communitiesand schools, Dietz said that howhousing is treated in an future taxreform will shape the economy goingforward.
“Housing provides the momentumbehind an economic recoverybecause home building andassociated businesses employ such awide range of workers. With the rightpolicies in place, housing can be akey engine of job growth that thiscountry needs.”
Housing Tax IncentivesCritical to MaintainThriving Middle Class
2 Builders Outlook 2013 issue 4
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I have to take my cap off to all the golfers who attended the Spring Golf Tournament,
Golf by the Rio presented by my good friends at WestStar Bank. There is no doubt that
truthfully you golfers are nuts, in a good way. I got to be around these golfers in wind
(or should I say dirt) gusts of 40 and higher miles per hour. Bad enough that I know
most of you have a hard time playing on the calmest days, but this was amazing to see.
I remember looking at Ray and Mike the pro give you guys direction, when somebody
yelled out “here it comes”, and everyone took off to tee off. I looked towards downtown
and there it was, big, hazy, rolling dirt coming towards us. I could only think that this
was the end. No one in their right mind would play in that, but once again I just didn’t
understand the thought process for golf. “The worst day on the golf course is better
than sunshine at the office” someone blurted. Right, and so you guys went out into the
haze and played. Sam and I did all we could do to keep drinks in the “tinas” and you
did an excellent job of hanging in there. I’d like to thank Sam Shallenberger and Ray
Adauto for making the event so much fun as promised. It would have been good in
great weather, but it was awesome in the crud you guys played in. My special thanks
to the women’s professional council for helping and to the members who came out and
spotted on different greens. The support of the sponsors and advertisers really make
things like this happen. I’m very grateful to so many but in particular to WestStar Bank,
HUNT, Time Warner, MTI Ready Mix, and Western Wholesale.
As you read this it will be time to vote in the city election. I can tell you that we have
some excellent choices in a lot of races, but we have to vote in order to get the kind of
government we want for our business and industry. One member has tossed his hat in
the ring and I’d like to acknowledge Gus Haddad for doing so. I’ve learned that we can
talk the talk but we need to walk the walk in order to assure the industry has responsible
government. So I’m asking you to go out and vote and get information on the Charter
amendments. I’m nervous that those will pass without a clear understanding by you
about what they are and what they will do if passed. I’ve attended forums to educate
myself about who and what to vote for. I recommend that for you as well. Our
association does not endorse candidates but we evaluate them through the Build PAC.
The Build PAC has donated to two candidates running for City Representative, Carl
Robinson and Emma Acosta. Both have demonstrated an open door policy for issues
relating to new home construction in El Paso and have listened to us on numerous
topics. I urge you to support those who support your industry by voting. We’ll know by
this time next month who’s in and who didn’t make it. To help get your candidate in go
and vote and take your family and friends with you. Until next time, go out and sell
some houses.
President’s Message |
El Paso Disposal
772-7495
32013 issue 4 Builders Outlook
Edmundo
Dena
President,
El Paso Association
of Builders
Showroom: 2131 Missouri
915 • 533 • 6045 fax • 533• 6096
Thomas R. Brown, Owner
I have never been to an implosion of abuilding even though I’ve wanted towitness one. In two days in April all thatchanged as I was witness to an implosionand a demolition. I had mixed emotionsabout watching these two events notbecause I opposed them but because Ialmost didn’t care. Jaded with thearguments for and against dropping cityhall and the Asarco smoke stacks causedme to almost wish that they go ahead andforget the hoopla. I’m glad that I got achance to see both now, and share thatwith my grandchildren. Interesting Ithought, since my grandkids will bepaying for the city hall demolition after I’mlong gone. At least they can say that theirgrandpa was with them when the stacksfell, and we shared the experience of theimplosion downtown. Hearing theirexcitement at the falling was interestingbecause all I could think about was thatthis is permanent and perhaps a once ina lifetime event. At least for me. Therewill never be smokestacks like thoseagain in El Paso. I’m glad in a way as Iremember hacking up when the sulfurwas so thick you could taste it in the airwhen I attended Cathedral. Sometimesyou would taste that stuff while trying toeat at Luby’s downtown, or walkingaround UTEP. I often wondered howironic it was to have people in ProvidenceHospital for respiratory problems, only
coming out and having to breathe that air.Automatic patients for the hospital Iguess, and yet on the other hand Iremembered that one of my aunts and anuncle of Margaret’s made a good livingworking at Asarco. They’re both gone butfor a brief moment as the large stack fellI couldn’t help but think of them and whatthey would have thought. Somehowthese stacks had been connected tomany El Pasoan’s but now they aregone as is the era that created them.
I had a completely different opinion ofcity hall. I never liked the layout andthought it strange that the front entranceactually faced Mexico rather than ElPaso. Was it a beacon like the statue ofLiberty? Perhaps to some. It was anunintended target of the violence whenbullets narrowly missed the guy whowould be in charge of the demolition,Alan Shubert. He was almost killed bythat stray (or was it?) that hit his office,missing him by inches, the slugimbedded in the wall to his left. I hatedthe layout and I hated that there wasnever enough public parking. Of late Idisliked the security done there; thinkingthat all the purse and pocket searchesmeant nothing if someone is determinedto do what was done in Oklahoma City.I hated that the building was renovatedas recently as last year when a reported$800,000 roof job was done. I also heard
that the building still had furniture orfixtures inside when it was blown up,some calculations that over $500,000 ofstuff went down with the building. I getangry that there was so much haste thatthere wasn’t a sale or auction for that.But I guess since the administration wasso intent to bring it down that it reallydidn’t matter. A half million here, million
there and pretty soon it’s real money. Forthat I’m still angry that my tax dollarsweren’t properly cared for in my opinion.I hope we never see another suchexample. The only way we canguarantee that is to vote for change. Ihope that change comes and that I neverhave to see the same again in mylifetime. I pray my grandkids don’t either.
Perspective |
Ray Adauto,
Executive Vice PresidentEPAB
4 Builders Outlook 2013 issue 4
Changes to city landscape made with a bang
52013 issue 4 Builders Outlook
The National Association of Home
Builders (NAHB) commends the
bipartisan Senate sponsors of legislation
to advance comprehensive immigration
reform and called on lawmakers to
improve the guest worker provisions in
the bill to address the significant role that
foreign workers play in the housing
industry and to help alleviate current
labor challenges that are hampering the
housing and economic recovery.
Testifying before the Senate Judiciary
Committee on the Border Security,
Economic Opportunity, and Immigration
Modernization Act (S. 744), NAHB
Chairman Rick Judson, a home builder
and developer from Charlotte, N.C.,
urged Congress to implement a new
market-based visa system that would
allow more immigrants to legally enter
the construction workforce each year.
“Despite our efforts to recruit and train
American workers through the HBI Job
Corps program and other programs, our
industry faces a very real impediment to
full recovery if work is delayed or even
cancelled due to worker shortages,” said
Judson. “A new, workable visa program
would complement our skills training
efforts within the nation’s borders, and fill
the labor gaps needed to meet the
nation’s housing needs.”
In a recent survey of NAHB’s
membership, 46 percent of the builders
surveyed experienced delays in
completing projects on time, 15 percent
had to turn down some projects and 9
percent lost or cancelled sales as a
result of recent labor shortages.
Foreign-born workers have traditionally
played a vibrant and important role in
home building. Today, they account for
22 percent of the construction labor
force, according to the Census Bureau.
Moreover, trades with a high
concentration of immigrant workers also
tend to have more vacancies and labor
shortages. There are currently 116,000
unfilled positions open in the construction
sector – a post-recession high.
While the W Visa program that
addresses a guest worker program for
the low-skill sector within Senate bill S.
744 reflects a good-faith attempt on the
part of lawmakers to address a serious
concern, NAHB believes the program is
unworkable for the residential
construction industry.
“First and foremost, the program
wrongly singles out the construction
industry with a discriminating set of rules,
including an arbitrary and meager cap
that not only ignores but rejects the value
of the housing industry to the nation’s
GDP,” said Judson. “Our industry, which
in normal times accounts for more than
17 percent of the nation’s total economic
output, should be afforded the same
opportunities as any other sector of the
economy. Congress must reassess this
critical flaw in the legislation.”
Judson also outlined othercomponents of the W Visa program asareas of concern:
• The 8.5 percent unemployment
trigger. Putting an unemployment
trigger in the program ignores the
simple fact that immigrant workers
and native-born workers sometimes
perform jobs that are independent.
Moreover, with the current
unemployment rate well below 8
percent, labor shortages in all facets
of the industry – including framers,
carpenters, bricklayers and
weatherization workers – continue to
undermine the housing recovery.
• Prevailing wages. Employers will
already have to pay fees for self-
registration and any positions
needed. Further adding a complex
prevailing wage scale to the program
will deter private small business firms
from taking advantage of it.
Employees should be paid market
rate, or actual wages.
• The inclusion of a commission in the
W Visa program. The marketplace is
best-suited to make wage and worker
shortage determinations, not a new
bureaucratic entity, said Judson. The
most accurate way to measure
whether immigrant workers are
needed is for employers to try, and
either succeed or fail, to hire U.S.
workers.
• Complete portability. Under this
provision, a registered employer
faces the stark reality that a W Visa
holder has the option to quit and
work somewhere else beginning on
the very first day of work. NAHB
believes that it is only fair that
employers have some assurances
that after navigating a confusing and
expensive process, the visa holder
will actually have to show up and
work for the employer who sponsored
the worker. This concern is even
more pronounced for the construction
industry, considering the meager
15,000 visa cap. Employers should
receive a credit for losses incurred.
it’s time to getserious aboutyour retirement.The El Paso Association of Builders is proud to now offer an
individualized retirement plan created for you.
ThE EPAB MEMBEr rETirEMEnT PlAn
As an EPAB member, you have the unique opportunity to take control of
your retirement investing.
We understand the challenges of retirement planning. That’s why we have
partnered with Employee Benefits of El Paso to offer you the opportunity
to create an individualized retirement plan under the umbrella of the El
Paso Association of Builders.
• investments
• irA’s
• 401K
now is the time to start planning for the next phase of your life. let your
membership with EPAB help you get there.
Call (915) 542-0900
for more information today.
Prior to selecting investment options for your plan you should consider the investment objectives, risks, fees and expenses carefully. For this and other important information, you obtain
prospectuses for mutual funds, any applicable annuity contract and the annuity's underlying funds, and/or additional disclosure documents from the appropriate retirement plan representative. Read
them carefully.There is no guarantee that participation in any retirement plan will result in a profit or that your account will outperform a self-managed portfolio. Please consult with your financial
planner, attorney and/or tax adviser as needed.
Builders to Congress: Improve Immigration Bill’s Guest Worker Provisions
6 Builders Outlook 2013 issue 4
The Economy
A Tale of Two HouseholdsDuring the last year and especially the last
five or six months, the economic data have
been of two minds. On one hand, household
net worth is way up, the stock market has
been setting new highs and the number of
millionaires is at 9 million, just below where it
was before the recession.
At the same time, we read
that the amount spent at
restaurants, bars, and
department stores
recently fell as households
compensate for higher
gas prices and payroll tax
increases by reining in
discretionary spending.
Which is it? Is the
economy getting better or
are households hunkering down? Turns out,
it’s both. Behind this seeming paradox is the
growing gulf between America’s wealthier
households and its poorer ones. And the past
recession has put this gap into bold relief.
While suffering during the Great
Recession, wealthier households, because
they are more likely to own equities and a
home, have enjoyed the recent rise in house
prices and the stock market, as well as the
special year-end dividends that were timed to
avoid tax increases that went into effect the
first of this year. In addition, because they
can borrow money at today’s historically low
rates, they are spending more on vacations,
cars and other high-end discretionary
purchases as their financial situation
improves. Moreover, over the last few years
their incomes have been rising, something
the majority of the population has not been
experiencing.
By contrast, households in the bottom half
of the income distribution are having a tough
time of it. The combination of stagnant wages
in the years before the Great Recession,
large job losses during the recession, current
high levels of unemployment, the dramatic
increase in those unemployed 12 months or
more, high gasoline prices and delayed
income-tax refunds are forcing these
households to forgo many purchases. As
such, retailers that cater to lower and middle-
income Americans are feeling the pinch.
Worse, the payroll tax hike will probably take
three or four months before its impact is fully
felt.
Fortunately, those in the top half of the
income distribution are doing well and they
pack a lot of retail punch. The top 20% of
households account for 38% of all spending
while the top 50% of all households account
for 70% of all spending. By contrast, the
bottom quintile is responsible for a tad less
than 9% of all spending. And so far, higher
income households have been carrying the
load, with spending most recently rising at a
month-over-month rate of 0.7%, the best level
since a 0.8% gain in September 2012.
Despite high-income households facing
higher taxes due to the expiration of the Bush
tax cuts and everyone facing the vagaries of
the sequester, the economy is not on the
ropes. A diet of dirt-low interest rates, a
booming energy sector, and solid
improvement in the all-important cyclicals
including autos, big ticket items, business
fixed investment, and most importantly
homebuilding, should translate into increases
in middle- and lower-class employment and
(hopefully) wages, and thus more household
spending among those doing relatively little of
it now.
Elliot Eisenberg, Ph.D. is President ofGraphsandLaughs, LLC and can be reachedat [email protected]. His daily 70word economics and policy blog can be seenat www.econ70.com.
Elliot Eisenberg
is your retirementplan making everydollar count?The El Paso Association of Builders is proud to now offer an
individualized retirement plan created for you.
ThE EPAB MEMBEr rETirEMEnT PlAn
Even if you already have a retirement plan in place, it is well worth your
time to talk to us about the new options designed for members of the El
Paso Association of Builders.
We understand that when it comes to retirement planning, saving every
dollar can add up. That’s why we have partnered with Employee Benefits
of El Paso to offer you the opportunity to create an individualized
retirement plan under the umbrella of the El Paso Association of Builders
that can help reduce set up fees and other associated expenses.
• investments
• irA’s
• 401K
now is the time to start maximizing your plan for the next phase of your
life. let your membership with EPAB help you get there.
Call (915) 542-0900
for more information today.
Prior to selecting investment options for your plan you should consider the investment objectives, risks, fees and expenses carefully. For this and other important information, you obtain
prospectuses for mutual funds, any applicable annuity contract and the annuity's underlying funds, and/or additional disclosure documents from the appropriate retirement plan representative. Read
them carefully.There is no guarantee that participation in any retirement plan will result in a profit or that your account will outperform a self-managed portfolio. Please consult with your financial
planner, attorney and/or tax adviser as needed.
Out with the OldThe city of El Paso had a very
interesting weekend of demolishing
three structures in two days, City Hall
and the Asarco Smokestacks. The
stacks came down after considerable
environmental challenges and a last
minute appeal to keep at least one
standing as a historic monument.
Once considered the tallest
smokestack in the world the larger
stack fell to the ground in about 8
seconds, after the base of the
structure was exploded. The second
smaller stack was dropped first in
what was seen by thousands of
people as an end of an era. That
smaller structure, still over 30 stories
tall, made an impact that was
registered on seismic instruments at
UTEP and a cloud of dust that for the
most part was contained around the
property. Last minute stunts by some
parachutist looked to delay the drops,
but with an all clear the stacks came
down.
City hall was a little different in that
the 10 story building had been
prepped to drop on top of itself, kind
of a folding effect. Surrounding
businesses were shut down and
apartment dwellers next to the site
cautioned to stay away from windows
and the debris. In a matter of
moments the 30 year old building
went down as the way is being
cleared for the new Triple A ball park.
In with the NewThe EPAB General Meeting for April
was held at the El Paso Club with
featured speaker City of El Paso
Chief Engineer Alan Shubert. His
presentation on the construction of
the new Triple A ballpark showed the
members how much work has already
gone into the project and how much is
left to do. Part of the work that was
to be done was the successful
demolition of city hall, the site for the
new ball park. Three days after the
presentation Alan accomplished his
mission as city
hall was
imploded. Work
at the site
continues with
removal of debris.
Our thanks to
Alan for a very
informative
presentation.
72013 ISSUE 4 Builders Outlook
CITY BEAT
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Service,Inc.
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915-549-4533 or
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Builders utlook on the scene |
The 2013 Spring Golf tournament wastitled Golf by the Rio. It could’ve easilybeen Gone in the Wind for what turned outto be the windiest day of the year actuallymade the tournament a challenge and aunique golfing experience. The tournamentwas held at the Ascarate Golf Course, oneof El Paso’s oldest and closest border golfcourses in the country. Twenty six teamsteed off at the one o’clock shotgun start,directly into a cloud of dust kicked up byhigh winds. The teams hung in therethrough the wind and dirt and most com-pleted the round. At the dinner award thetopic was the difficulty of playing in thoseconditions and how everyone compensatedor gave up. “I have never played in theseconditions,” said Rudy Guel. “I know it wasdifficult to play but it was fun in a strangeway,” he continued.
Tournament Chairman SamShallenberger praised the teams for playingand gave kudos to those who actually fin-ished. “I can’t begin to tell you how manytimes Edmundo and I encountered guyslaughing because of the conditions,” hesaid. It was either laugh or cry and becausethere was so much wind the afternoonappeared to be a part of a Martian land-scape instead of something earthly. “When
you hit the ball you really had no way oftelling where it would go,” said tourney play-er Frank Torres. “I know this course so well,but it was a totally different experiencetoday with these winds,” Torres continued.
WestStar Bank was the presenter andparticipant in the tournament. “I have to tellyou that had it been a regular day we wouldhave had a great tournament, but with theweather this tournament will go down asone for the records,” said Henry Tinajero ofWestStar. His comments were echoedover and over as familiar faces were cov-ered in sand. One observer said that therewere some interesting faces at the dinner.“I think that there was more dirt on my facethan in my yard,” said John Reich of TexasGas. “This was a blast if for no other rea-son that now we can take playing in highwinds off my bucket list,” he continued.
The tournament was played on the near-ly 60 year old public course for the first time.It was billed as a “pachanga”, slang forparty and it turned out exactly like that.“One thing that happened was that survivalwas the game, not golf,” saidShallenberger. “There wasn’t any courserecords broken and if there had been I’msure the other players would’ve screamed achallenge,” he continued.
Mike Smith, PGA Pro at the course saidthat the day was one of the worst he’s seenin a long while, but added that he wasamazed at how much fun everyone washaving. “I can tell you that every time wewent out there we didn’t see anyone com-plaining more than usual, as a matter of factthey appeared to just go with it,” Smith said.
The Women’s Professional Council soldmulligans for scholarship and also did someof the “dirty” work of being witnesses out onthe course. “I want to thank the councilmembers for coming out and helpingtoday,” said Lorraine Huit, WPC chair.“Holy smokes, I can’t believe I’m out here,”said Beverly Clevenger. Her reaction wasshared by all the members who withstoodthe wind and sand to bear witness on longdrives, closest to the pin, and other holes.Arturo Guerra with McCoy’s had a ring sideseat to the action as he and his wife spottedon a par three hole. “Man, it got tough outthere, but we had a ball with everyonebeing so fun to be around,” he said as theyenjoyed the inside of the clubhouse.
The dinner sponsored by WesternWholesale Supply was held in the diningroom after the tournament. Awards werepresented for the top three team scores andfor long drive, close to the pin, and in ran-
dom drawings. No one captured the$10,000 cash award for a hole in one onnumber 16. “The wind made it nearlyimpossible for someone to hit, but it was funwatching the ball go everywhere but on thegreen,” said Joe Bernal, Employee Benefitsof El Paso principal and sponsor of the con-test. “It would have been aan absolute mir-acle if someone had hit it, but at least theyhad the chance,” he continued.
Plans are underway for the fall tourna-ment that is designed for better play. “Ournext event will be one for the real seriousgolfers and will be challenging. I just don’tthink we want to invite the wind to that one,”said Shallenberger.
Goodie bags and beverage cart spon-sored by HUNT, Time Warner. Beveragestations provided by Tony Mullen at MTIReady Mix.
Team tournament winners: 1st place:Steve Raney team; 2nd place, TropicanaHomes; 3rd place, Rudy Guel Construction.Long Drive went to Dan Ruth, MilleniumHomes; Piñata hit went to Henry Tinajero,WestStar Bank.
Golf Tournament at Ascarate - Pachanga!
2013 issue 4
With tight mortgage lendingstandards preventing well-qualifiedhome buyers from obtaining homeloans and impeding the housingand economic recovery, theNational Association of HomeBuilders (NAHB) today expressedsupport for congressional efforts toreform the Federal HousingAdministration (FHA) but urgedlawmakers to proceed in a cautiousmanner to avoid any disruptions tothe nation’s housing financesystem.
Testifying before the HouseFinancial Services Subcommitteeon Housing and Insurance, NAHBFirst Vice Chairman Kevin Kelly, abuilder and developer fromWilmington, Del., pointed out thevital role that FHA played to helpthe housing sector emerge from itsworst downturn since the GreatDepression.
“While there is no doubt that thehousing finance system needs tobe reformed, the contributions thatthe FHA made during the economicdownturn underscore the need fora government backstop for both theprimary and secondary mortgagemarkets,” said Kelly. “In times ofcrisis, private sources of mortgagecredit have been unable orunwilling to meet housing capitalneeds.”
Without government support forhome purchasing and refinancing,Kelly warned lawmakers that thenation’s mortgage markets “willgrind to a halt in times of economicstress and uncertainty.”
In 2006 before the housingdownturn hit, FHA’s share of themarket was a meager 3 percent asprivate financial institutionsboasted a healthy presence. Whenthe housing downturn hit, there wasa role reversal, as private playersfled the market and FHA-insuredmortgages became the only creditoption for first-time home buyers,minorities and those with limiteddownpayment capabilities.
“This dramatic shift is evidencethat FHA is performing its missionof providing the federal backstop toensure that every creditworthyAmerican has access to a stablemortgage product,” said Kelly. “Asthe private market assumes agreater role in the mortgagemarketplace, maintaining anappropriate level of governmentsupport is essential to preservefinancial stability, promote investorconfidence and ensure liquidity andstability for homeownership andrental housing.”
Noting that the Federal Reserveand leading economists havewarned that overly restrictiveunderwriting requirements arepreventing creditworthy borrowersfrom accessing mortgage credit,Kelly called on lawmakers to take along-term, holistic approach tohousing finance reform.
“Changes to FHA’s programs
cannot be separated from thelarger discussion of reforming thecomplex housing finance system,including future reforms to FannieMae and Freddie Mac,” he said.“NAHB urges Congress to proceedcautiously and not to significantlyalter the role of FHA programs.”
“Housing has led America out ofevery economic downturn and cando so again if the future policiesregarding housing finance reformsare addressed in a manner thatprovides liquidity for the entirehousing sector,” he added.
10 Builders Outlook 2013 issue 4
FHA Reform Efforts Must Ensure
Borrowers Have Access to
Affordable Home Loans
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Expert Advice
Of the 45 percent of employees whohad access to a dental benefit planthrough their employer, 78 percentparticipated, making dental benefits avery popular offering. Will theAffordable Care Act change all that?
The vast majority of Americans withdental insurance (98 percent) havecoverage through a standalone dentalplan, or a plan sold separately frommedical coverage. Whether written ona group or individual basis, theAffordable Care Act (ACA) does notapply to this type of “excepted healthplan.”
Although the ACA might not apply toyour employee dental plan, it couldaffect dental benefits under your grouphealth plan.
The ACA and Dental BenefitsStarting in 2014, all health plans
offered on the individual and smallgroup markets must offer acomprehensive package of items andservices known as essential healthbenefits (EHB). These EHBs mustinclude pediatric oral care.
This means medical plans for smallgroups and individuals, whether soldon an exchange or not, must include
benefits for oral health riskassessments and screenings andtreatment for dental cavities (caries)with no cost-sharing. Medical plans donot have to cover these services foradults.
In November 2012, the U.S.Department of Health and HumanServices (HHS) provided states withtwo benchmarking options forsupplementing coverage in plans thatdo not include coverage for pediatricdental benefits. The first option is toadd benefits included in the FEDVIP(Federal Employees Dental and VisionInsurance Program) dental plan withthe highest national enrollment. Thesecond option is to supplement withthe benefits available under that state’sCHIP program of health benefits forlow-income children, if applicable.
The problem with this approach isthat these plans provide “richer”benefits than the typical small groupdental plan. The National Associationof Dental Plans (NADP) estimates thecost of covering a child under a smallgroup dental plan at about $21 perchild per month without orthodontiabenefits, and at about $23.80 permonth with orthodontia benefits at 50percent coinsurance (the insured payshalf and the insurer pays half ofcovered charges). This compares to amonthly cost of $27.90 for benefitsunder the FEDVIP plan or $32.05 permonth under the CHIP standard.
Evelyn Ireland, NADP’s executivedirector, told Medscape Medical News(November 29, 2012) that the pricedifference due to benefits required by
the ACA could cause about half of theadults who pay toward dental benefitsthrough small employer plans to droptheir own coverage, since their childrenwill have dental benefits through thegroup medical plan. If yourorganization requires employees toshare premium costs for dentalcoverage ( and the majority ofemployers do, with 54 percentrequiring employees with singlecoverage to share costs, and 67percent requiring employees withfamily coverage to do so), be preparedfor changes in dental plan takeup ratesin plan years 2014 and later.
The Importance of Dental Insurance Lower dental plan participation rates
could cause more health problems inthe long term. More than one-third ofadults surveyed for the SurgeonGeneral’s study on oral health (2000)had not visited a dentist in the past 12months. Fewer adults with dentalbenefits could mean that number willincrease. Laurence R. Weissbrot,FSA, MAAA, director of actuarial andunderwriting at Northeast Delta Dentalin Concord, N.H., says that “75 percentor more of the people who have dentalcoverage see their dentists on aregular basis. Fewer than 50 percentof people without dental coverage doso.”
Unfortunately , oral healthconditions can progress rapidly withouttreatment. Most adults show signs ofperiodontal or gingival (gum) diseases,with about 14 percent of those aged 45to 54 having “severe” periodontaldisease.
The Surgeon General’s reportpoints out that oral health is integral togeneral health. “You cannot behealthy without oral health…. Oraldiseases are progressive andcumulative and become more complexover time. They can affect our abilityto eat, the foods we choose, how welook , and the way we communicate.These diseases can affect economicproductivity and compromise ourability to work at home, at school, oron the job”.
Employees who drop their employerbased coverage will be able to buystand alone dental insurance on anindividual basis. However, Weissbrotpoints out that individual buyingcoverage on insurance exchanges willlack the double tax advantagesemployer-provided benefits enjoy:employers can deduct premiums as abusiness expense, and employees donot have to report their value asincome.
Many employers, even some smalleremployers, self-insure dental benefits.Even when they add the cost of usinga third-party administrator to managetheir plans, some employers may savemoney on dental benefits this way.Although standalone healthreimbursement arrangements (HRAs)will not meet the ACA’s “no annuallimit” requirement, a dental HRA mightfall under the “excepted health plan”exemption from ACA requirements.
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Dental Benefits and the Affordable Care Act
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