builders outlook 2013 issue 4

Builders utlookwww.elpasobuilders.com www.epbuilders.org

2013issue 4

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

STAY SAFE. CALL BEFORE YOU DIG.If you have digging or excavation work to do, remember to call 811 at least 48 hours in advance.

Natural gas and other utility lines may be buried a few feet deep. By calling 811, utility crews can

mark locations of underground lines at no charge. The markings are done in paint and will eventually

wash away. Marking line locations can help prevent you from accidentally damaging a natural gas line.

Always call before you dig. It can help keep you and your construction crew safe, and failing to do so

can result in a $1,000 fine.*

* Texas Utilities Code 251.201 Civil Penalties

Texas Gas Service provides natural gas to more than 600,000 customers in the state of Texas, including customers in Austin, El Paso, the Gulf Coast and the Rio Grande Valley. Texas Gas Service is a division of ONEOK, Inc. (NYSE: OKE), a diversified energy company. ONEOK is the general partner and owns 43.4 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded limited partnerships, which is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and owns one of the nation’s premier natural gas liquids (NGL) systems, connecting much of the NGL supply in the Mid-Continent with key market centers. ONEOK is among the largest natural gas distributors in the United States, serving more than 2 million customers in Oklahoma, Kansas and Texas. Its energy services operation focuses primarily on marketing natural gas and related services throughout the U.S. ONEOK is a Fortune 500 company. For more information, visit www.texasgasservice.com. © 2013

ONEOK, Inc. Oklahoma Natural Gas Kansas Gas Service ONEOK Partners, L.P. ONEOK Energy Services

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


Changes to city landscape made with a bang


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


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

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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.


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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Membership News

Thanks to our

APRIl

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Carefree homes

11395 James Watt, Suite A-11 79936915-633-8002

132013 Issue 3 Builders Outlook

www.elpasobuilders.com www.epbuilders.org

UPCOMING EVENTS |MAY 9

BOARD MEETING

12 NOON

WEsTERN WhOlEsAlE

1345 GERONIMO

JUNE 13

BOARD MEETING

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GENERAl MEETING

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JUNE 21 – JUlY 7

PARADE OF hOMEs

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JUNE 24-25

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For the latest updates &

event information, visit:elpasobuilders.com

RENEWALS |

NEW MEMBERS | SODA SPONSOR

As the old saying goes, time flies

when you are having fun. I must be

having a blast because it seems like

we just got started for the year. Let

me start with the Golf by the Rio,

presented by WestStar Bank. I have

been a member of this great

association since the late 80s I even

had hair it has been so long ago and

this is the first time I can remember

being sold out over a month in

advance. It just goes to show you

what this association is all about and

that is NETWORKING. This Golf

Pachanga is not about the golf, it is

about everyone getting together and

having a good time with friends and

associates. Our Association works

hard to keep our builders building

and our associates supplying the

product through relationships at the

local and state levels.

For all you serious golfers we are

planning a tournament in the fall. I

can’t comment on exactly what and

where it will be but you will need to

bring you’re A game and Sun

Country Handicap Card to enter.

More details coming soon.

The other fun thing we do during

the summer is the Bowling outing.

Once again it is not about the

Bowling it is about NETWORKING

with each other. We will have a

announcement on where and when

next month.

I would like to schedule a

associates meeting early in May if

that fits everyone’s schedule? Come

out and mingle with the other

associate members, make some

contacts, do some business.

A special thanks to all of you who

participated in the Golf by the Rio . It

was windy but we had a great time.

Until next time, have a great month.


Sam ShallenbergerWestern Wholesale Supply

Associates Council

� execuTive oFFicerS

edmundo Dena – President

Accent Homes

Frank Torres – vice President

GMF Custom Homes

edgar montiel – Secretary/Treasurer

Palo Verde Homes

Sam Shallenberger – Associates chair

Western Wholesale

Frank Arroyos- immediate Past President

Cisco Homes

ray Adauto – executive vice President

El Paso Association of Builders

� couNciL/commiTTee cHAirS

Associates council

Sam Shallenberger

Build PAc

Randy Bowling

Desert Green Building council

Javier Ruiz

Land use council

Sal Masoud

Young Designer Award

John Chaney

remodelers council

Rudy Guel

membership retention

Mike Santamaria, Greg Bowling

Finance committee

Edgar Montiel

Women’s council

Lorraine Huit

� ADviSorY To THe BoArD

J. Crawford Kerr, Attorney, Firth, Johnston

& Martinez

� BoArD oF DirecTorS

Juanita Garcia, Icon Custom Builders

Samira Gonzalez, Edwards Homes

Walter Lujan, Dawco Construction

Carlos Villalobos, Pointe Homes

Don Rassette, Rassette Homes

Beverly Clevenger, Automated Division 6 Builders

Frank Spencer, Aztec Contractors

Kathy Parry, Hunt Communities

Sal Masoud, Del Rio Engineering

Robert L. Foster,

Southwest Land Development Services

Leti Navarette, Custom Dream Homes

Linda Troncoso, TR-Engineering

Lance VanDeman, Hub International

John Chaney, Passage Supply

Joe Bernal, El Paso Employee Benefits

Ken Wade, El Paso Building Materials

Ruben Orquiz, MTI Ready Mix

Kathy Carrillo, Pioneer Bank

Henry Tinajero, West Star Bank

Paul Zacour, Zacour & Associates

Chuck Gabriel, Carpets West

Ted Escobedo, Snappy Publishing

Lorraine Huit, Cardel Design

Javier Ruiz, Border Solar & Senercon

2012 Builder member of The Year

Frank Arroyos

Cisco Homes

2012 Pat cox Award

Mike Santamaria

Mountain Vista Homes

2012 Associate of The Year

Sam Shallenberger

Western Wholesale Supply

John Schatzman Award

Hunt Companies

Honorary Life members

Rudy Guel

Brad Roe

Cliff Anthes

Wayne Grinnell

Chester Lovelady

Don Henderson

Anna Gil

Past Presidents

committed to Serve

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.

© 2013 Builder’s Outlook

is published and distributed for the

El Paso Association of Builders

by Snappy Publishing

240 Thunderbird • Suite C

El Paso • Texas • 79912 915-820-2800

6046 Surety Dr. El Paso, TX 79905

915-778-5387 • Fax: 915-772-3038

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

E. H. Baeza

Hershel Stringfield

� TAB STATe DirecTorS

Doug Borrett, Karam Co., Life Director

Randy Bowling, Tropicana Homes

� NATioNAL DirecTorS

Bobby Bowling IV.

Demetrio Jimenez

NATioNAL ASSociATioN oF

Home BuiLDerS

(800) 368-5242

TexAS ASSociATioN oF

BuiLDerS

(800)252-3625

www.elpasobuilders.com www.epbuilders.org

Builders utlook

Hunt is developing family focused neighborhoodsin both east and west El Paso.

Our communities feature amenities such as neighborhood parks, walking trails, bike paths,and landscaped roadways.

Only in a community by Hunt will you find home options for everyone – from the first-time buyerto those searching for their ultimate dream home.

www.huntcompanies.com

DEVELOPING DREAMS.IN EAST AND WESTEL PASO.

EAST Horizon MesaEastlake Boulevard to Horizon Mesa Boulevard

Emerald EstatesEastlake Boulevard to Emerald Park Drive

Emerald PassEastlake Boulevard to Emerald Sands Drive

Mission Ridgewww.liveatmissionridge.comI-10 and Eastlake Boulevard

WEST Cimarronwww.liveatcimarron.comHelen of Troy at Redd Road

builders outlook 2013 issue 4

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