New Home Builders NewsBlog.com

State agency making changes; But consumer groups contend panel protects home builders

Houston, TX. - "Duane Waddill was head of the Texas Residential Construction Commission just four days when he learned the state agency often criticized by consumer groups was about to be audited. But Waddill said he was already implementing changes that addressed some of the state comptroller's questions—changes he believed would quell consumer concerns that the agency doesn't do enough to protect homeowners...But consumer groups remain skeptical, saying the agency was created in 2003 at the behest of builders to reduce litigation by forcing consumers into a state-run dispute resolution process. Ultimately, the commission, which is mainly funded by fees it collects from builders, has created another hurdle for consumers who want their day in court, consumer advocates say...The agency has filed six cases with the State Office of Administrative Hearings against builders, ranging from failing to register with the commission to fraudulently applying for registration, according to the commission...Some 20 more cases could be brought next month, including those to enforce payment of civil judgments homeowners have gotten in court on their own, according to the agency...But consumer groups have criticized the agency's inability to force a company to make the repairs it recommends...The agency has received 1,406 complaints since its inception in the fall of 2003. As of late November, 297 have gone through the agency's dispute resolution process. The agency found construction defects in 195 of those cases, no defect in 16, and continues to work on the remaining cases...Last year, fees for consumers to request the resolution process were also dropped to a flat $250, replacing the previous system that charged the homeowner up to $650. And the builder registration fee was also increased to $500 from $125...Alex Winslow, director of consumer group Texas Watch, said homeowners shouldn't have to pay for the dispute process at all. He's also critical of the agency's governor-appointed board, which has many industry representatives on it — including John Krugh, who works as general counsel for Houston builder Bob Perry's company and helped craft the legislation that created the construction commission. 'I think the makeup of the board speaks for itself,' Winslow said. 'It's dominated by industry insiders, with Bob Perry's lawyer as one of the original appointees. I think that speaks to the agency's leanings.'...Janet Ahmad, president of Homeowners for Better Building, said no matter what changes the commission makes, the dispute resolution process still takes up to 150 days and remains a hurdle for consumers to pass before they can finally go to court. 'The whole premise of this is to wear down the homebuyer,' said Ahmad, who has been pushing for a home lemon law, similar to the one for cars."...
Jan. 8, 2006, 10:41AM

Homeowners anticipate TRCC probe outcome

Dallas,TX. - " The Texas Residential Construction Commission, which was created two years ago by the legislature to help homeowners and homebuilders resolve their differences, has been placed under investigation to the interest of many homeowners... Whether the information will be made public, however, will most likely show just how powerful the homebuilding industry is. Chris Wanken, who faced what he may call a home building nightmare, would be high on the list of those who would like to see the results of the investigation... Wanken took the dispute with their contractor to the Texas Residential Construction Commission (TRCC) months ago and said they are no closer to having things resolved than before. The Wanken's aren't alone in their battle against contractors. More than a year ago, Lisa and Brian Partington asked the TRCC to investigate homebuilder Robert Tidwell. Only five weeks ago did they receive a response from the TRCC who wrote them back and said it couldn't do anything about their case because Tidwell had declared bankruptcy. But despite his checkered record, the TRCC said Tidwell's registration status as a Texas builder has been pending for the last nine months. Representative Todd Smith of Bedford asked the comptroller's office to investigate the TRCC and Carole Keeton Strayhorn is doing that. But now Representative David Swinford of Dumas has asked whether that's any of her business and said he wants a ruling from the Attorney General as to whether the comptroller can do such an investigation... Wanken said fighting for his house has been a full time job. As part of the fight, he said he's discovered that homebuilders had a major role in shaping the TRCC."
11:31 PM CST on Monday, January 9, 2006   

Centex Reports Record Third Quarter Results

New York,NY. - "Centex Corporation today announced record third quarter revenues, operating earnings and diluted earnings per share. Highlights of the quarter ended December 31, 2005 (compared to last year's third quarter): Revenues increased 25% to $3.74 billion, Net earnings grew 30% to $329 million, Home Building operating margin was 16.8%, up 130 basis points, Home Building unit backlog rose 13%, dollar value grew 22%, Home closings increased 18%, new orders rose 4%. 'We achieved strong results in our fiscal third quarter, posting solid revenue and earnings growth with improved operating margins,' said Tim Eller, Chairman and CEO of Centex Corporation. 'We expect to achieve record results in the fourth quarter of fiscal 2006 and in the coming fiscal year."'...
Jan. 24, 2006

Strayhorn criticizes homebuyer agency; Report says builder flaws aren't fixed; director plans new steps

Texas - " The state agency set up to help homebuyers settle disputes with builders does nothing to make sure defective homes are fixed, a report released Monday by Comptroller Carole Keeton Strayhorn found. In response to a survey, 88 of 102 homeowners said their builders did not fix problems after they went through the complaint process required by the Texas Residential Construction Commission.  The report echoed what homebuyers and consumer advocates said in a  Dallas Morning News story one year ago on the fledging agency, under fire in part because its commission members had ties to the homebuilding industry... Commissioners have acknowledged that the Legislature did not give them the power to force builders to make repairs even after inspectors found problems. They've said the commission could help protect homebuyers in other ways, by requiring homebuilder and home registration and creating new building and warranty standards. And owners could use the inspector's finding in future arbitration or court cases...'The bottom line is that the Texas Residential Construction Commission clearly functions as a builder protection agency. I found no evidence that they've had a favorable impact on the homeowner,' said Mrs. Strayhorn, who is running for governor as an independent. 'If it were up to me, personally I would just blast this agency off the bureaucratic books.' The report also questions the commission's fees and rules for making complaints, the salaries of its staff and the composition of the commission members... The Legislature established the commission in 2003 with the support of Republican Gov. Rick Perry, who appoints the nine commission members. One of those, John Krugh, is a senior vice president of Perry Homes in Houston, headed by Bob Perry, a longtime supporter and major GOP financial donor who is not related to the governor. Kathy Walt, a spokeswoman for the governor, said that the report is still under review, 'The TRCC is a relatively new state agency, and the governor is committed to working with the Legislature and working with that agency ... and making it as efficient and as responsive to the people as possible,' she said.'... 'I plan on using it ... to follow up with homeowners to see if we can help them get their homes fixed,' Mr. Waddill said. He also said the agency is considering a $10,000 fine for builders who get their registration fraudulently."
04:40 PM CST on Tuesday, January 24, 2006    

CEOs under more scrutiny as disclosure requirements toughen

Phoneix, AZ. - "Chief executives and other corporate leaders are facing increased compensation disclosure requirements amid continuing concerns about astronomical pay and executive perks...In 1992, U.S. chief executives were paid 82 times the pay of average workers, according to Stanford University. In 2004, CEOs raked in 400 times what rank-and-file workers earned. The top-paid CEOs at Valley-based public companies earned $31 million in salary and bonuses in 2004, according to Business Journal research. That does not include convoluted stock options doled out to top executives. Valley-based public companies contacted for this story -- including Meritage Homes, Rural/Metro Corp., Phelps Dodge and PetSmart -- declined or did not respond to requests for comment. Representatives of Meritage and Rural/Metro said their chief executives were traveling and not available for comment. In 2004, the highest-paid Valley executives, based solely on salary and bonuses, were Meritage Homes co-CEOs Steven Hilton and John Landon. They each took in more than $5.4 million. A full-time worker earning the federal minimum wage makes $10,712 a year."...
From the January 20, 2006 print edition

Need for storm drain could prompt county to condemn property

Menifee, CA. - "Twice a year, the county sends Jeffrey and Angela Knoll a tax bill for their 12 acres fronting Holland and Murrieta roads in Menifee, assessing the land at about $100,000 an acre. So they are incensed that now that the county wants to take some of the land for a flood channel to serve two nearby developments that it has determined a half-acre of that land is worth just under $23,000. And $7,000 of that was for trees, Jeffrey Knoll contends...Under a plan by Forecast Homes, one of two developers planning to build near the Knolls, storm drains from the Forecast development would end at the Knolls' property. The pipes would empty onto rock to slow and spread the water, which would then return naturally to the ground...Last May, Forecast offered the Knolls almost $38,000 for the half-acre. But that offer -- which Jeffrey Knoll said was also unacceptable -- is no longer even on the table, he said. A representative of Forecast Homes declined to comment on this matter...If the Knolls accept the county's price of almost $23,000 -- or if the county condemns the half-acre as part of eminent domain proceedings to seize it -- the Knolls wouldn't be able to use most of the half-acre because there would be a storm drain terminating into it. But because both Forecast and the county only want an 'easement' -- not actual ownership of the land -- the Knolls would continue to hold title to the parcel -- and thus be liable for it...'That's absurd,' said Angela Knoll, 35, who is a substitute teacher at Perris High School. 'The county should be protecting us.' Williams speculated that if the spill was found to have originated from the pipes that the county would be responsible to clean it up. But he said he couldn't guarantee that that would the case...Also according to the proposed contract, the Knolls would be obligated to cover 'all costs of any required or necessitated repair, cleanup, detoxification, or decontamination of the parcel.'...Knoll added: 'It doesn't appear to me that the county has a definitive (drainage) plan for the area. They're working on a plan, but it seems like it's a year away. But they don't want to slow down the developer.'...Jeffrey Knoll said it took six months to find a representative of the county who was even aware of the proposed project. That's a common theme -- lack of communication with the county, he said, noting that he had contacted 3rd District Supervisor Jeff Stone's office last September, but never heard back from Stone or a member of his staff. Stone, whose district includes Menifee, has never heard of the project, said Ron Roberts, a Stone staffer who handles water issues. Roberts said he also is unfamiliar with the case. But county records show that in December, Stone voted to approve moving ahead with condemnation proceedings...The Knolls said they are concerned they will lose the dispute. 'We've lived here years and years and years,' Jeffrey Knoll said. 'We have no voice. They have all the voice. They're not going to live here; they'll sell the land, then get out of here.'"...
Last modified Friday, January 20, 2006 10:51 PM PST

United States: To Pay and Protest or Not to Pay and Protest: California Supreme Court Decision Clarifies Remedies in Mitigation Fee Act Challenges

London,UK. - "The California Supreme Court recently issued an important decision clarifying the rights of developers who file lawsuits under California’s Mitigation Fee Act challenging fees that are imposed on new development projects. The Legislature enacted the Fee Act (Government Code sections 66000-66025) in 1996 in response to concerns that some local agencies were imposing excessive fees on new developments. This new decision, Barratt American, Inc. v. City of Rancho Cucamonga, 37 Cal. 4th 685 (2005), contains a number of rulings, but is important primarily because it clarifies the remedy that is available when a developer challenges building inspection and permit fees, as opposed to impact fees. In Barratt American, the developer challenged building inspection and building permit fees imposed by the City of Rancho Cucamonga, and the developer sought a refund of the excess fees under the 'pay and protest' provisions of the Fee Act. These provisions allow a developer to pay a development fee and proceed with the project, while at the same time preserving the developer’s right to litigate its claim that a fee is excessive by filing a protest. The Court held that these 'pay and protest' rules apply only to 'development fees' as defined in the statute, such as a fee that is imposed on a project to offset the cost of needed facilities. A developer can also challenge an inspection or processing fee as excessive, but the Court held that the remedy in that type of case is a court order requiring the city or county to use the excess amount collected to reduce such fees in the future. The Court also clarified the statute of limitations setting the time within which a fee claim must be filed with the courts...Finally, the Court also rejected several other claims advanced by the developer, including claims that the building permit and inspection fees were illegal 'special taxes' and that the California Constitution required local agencies to conduct annual financial audits of their fees."...
20 January 2006

State sees Sun City traffic snarl; Tehama County planner says Caltrans didn't focus on EIR

Tehama County, CA. - "The commute between Redding and Red Bluff on Interstate 5 would take twice as long as it does now if the proposed 3,700-home Sun City Tehama subdivision is built, a state traffic official said Thursday... 'The bottom line is, Sun City will break the horse's leg. The next big development will kill the horse, and there's only one horse in the stable,' said Huckabay, who spoke at a public hearing on the draft environmental impact report (EIR) for the project. His comments drew a rebuke from Tehama County Planning Director George Robson, who said after the hearing that Huckabay was attacking the project when he should have been addressing the environmental report...'There's never any development anymore that doesn't have mitigations,' Robson said. Saying that the interstate would be the development's only route between Redding and Red Bluff, Huckabay said an extra lane would be needed in each direction between the two cities -- a job that he said would cost about $500 million. If Sun City weren't built, historical growth rates on I-5 might not require an extra lane for up to 20 years, he said. But if it is built in 10 years as planned, the development would put about the same amount of traffic on I-5 by that time as has been added over the past 20 years. Traffic congestion would eventually stretch a 30-minute commute between Red Bluff and Redding to an hour, he said... Outside the hearing, Commissioner Tony Turri said Huckabay's comments caused him concern. 'The potential of having gridlock there, twice a day, for an hour.... That's what needs to be looked into. That's how I feel,' Turri said. Turri said he was also concerned about fears raised by residents who spoke at the hearing -- such as that the development would suck up enough water to draw down wells and that wildlife in 700 acres of Blue Oak woodland habitat would be lost."...
January 20, 2006   

Planning Board OKs tower in Columbia; Proposed height protested; appeal seems likely

Howard County, MD. - "The developer of a proposed 22-story tower in downtown Columbia will begin taking reservations on the luxury units next month, but opponents of the structure are not likely to go away with a whimper. The opponents suffered a resounding defeat Wednesday in their efforts to block the proposed residential and retail structure when the Planning Board voted, 3-1, to approve the 275-foot tower...'I'm happy for Howard County and happy for Columbia,' Anthony F. Albanese, division president of WCI Communities, Inc., the developer, said after the vote. 'I'm happy to see this new town evolve to become a real place.'...The company has proposed constructing the high rise on 1.46 acres on the northwest side of Little Patuxent Parkway and Wincopin Circle, across from The Mall in Columbia. The project would include 160 condominium units, a four-level underground parking garage and 10,697 square feet of retail space at the ground level... Board member H. Gregory Tornatore, the lone dissenter, said that the tower would be so imposing that it will be incompatible with the neighborhood. 'A structure of 275 feet is not in the character of New Town Columbia,' Tornatore said. A more appropriate size, he said, would be a tower of 10 to 15 stories. Opponents had pinned their hopes primarily on two points: The high rise would be the tallest structure in the county and out of character for the neighborhood, and that the project should be delayed until work is completed on the county's master plan for downtown Columbia. That plan is expected to include height limitations...At the heart of the debate, though, was whether the board could reverse a decision by a previous Planning Board that approved the developer's final development plan with no height restrictions... 'I agree,' said board member Linda A. Dombrowski. 'You drew the gate and closed it' when the final development plan was approved. 'The issue of height is not something we can change.' She indicated, though, that she is uncomfortable with the size of the proposed high rise. 'The previous Planning Board blew it,' Dombrowski said, by not imposing height limitations... Lloyd Knowles, a principal voice for the opposition, said after the meeting that the outcome was predictable. 'It was totally expected, except for the decision not to consider the motion of denial,' said Knowles, a former Planning Board member and county councilman. 'This is a legal document, and it should have been considered much differently than just comments ... I thought they would give more weight to that, and I thought they would get their attorney more involved into reviewing exactly what it was we were saying, instead of throwing it out as being inappropriate.'"...
Originally published January 20, 2006   

Housing Project May Be on Ballot

Ventura County, CA. - "Seeking to overturn approval of the largest housing development in Santa Paula history, project opponents have qualified a ballot measure that could put construction of a 2,155-home development in Fagan Canyon to a citywide vote. The Ventura County Elections Division reported this week that a group opposing the development had collected 1,649 signatures on a referendum petition, 1,143 of which were valid. The group, Citizens Advocating Responsible Planning, needed 1,080 valid signatures to qualify the measure for the ballot...'It's great news for the people of Santa Paula because now voters will really have the chance to determine the future of their city,' said John Wisda, a Santa Paula real estate agent who heads the opposition group. He and others have argued that the development is too big and would generate too much traffic and pollution...The land is one of the last large developable areas in the Santa Clara River Valley community, which has a population of about 30,000...In approving the project, Santa Paula leaders said the development would provide a much-needed economic boost to their cash-strapped city, eventually generating about $2 million annually in taxes and other revenue. Rick Bianchi, director of community development for Centex Homes' operations in Los Angeles and Ventura counties, said that if the issue goes to a public vote, it would delay the project, as the developer would have to shift resources to mount an election campaign."...
January 20, 2006