Newly elected NAHB Chairman Greg Ugalde talks homebuilding

LOS ANGELES (AP) — Rising U.S. home prices and a shortage of properties on the market have made homes less affordable for many would-be buyers, even after the fall in mortgage rates over recent weeks.

The trend is also problematic for homebuilders, because newly built homes tend to be more expensive relative to resale properties.

The National Association of Home Builders’ new chairman, Greg Ugalde, calls home affordability a growing crisis and the most important issue facing the homebuilding industry.

Ugalde, who is also president of Torrington, Connecticut-based homebuilder T&M Building Co., recently spoke to The Associated Press about immigration reform and other proposals aimed at boosting new home construction. The interview has been edited for length and clarity.

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Q: Builders have grappled with a shortage of skilled labor for years. Are efforts to recruit more young people working?

A: It is definitely working and a big part of that is making sure that we put the floodlights on the problem and enlighten not only our industry, but everybody.

When you look at the restaurant industry, for example, and other industries, we’re all wrestling for many of the same bodies, many of the same students and young people that we would like. People of all ages, actually, who would be willing to retrain.

We’re optimistic. Certainly it’s a mountain in front of us to bring the number of workers that we need to our job sites.

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Q: The NAHB favors a guest worker program. How important is immigration reform to tackling the labor shortage?

A: We should have the ability to bring in more qualified workers where they’re needed.

It’s no longer a question of ‘Hey, we’re going to be taking American jobs.’ That’s just not true. We have job openings all over the country that we need to fill, so it’s perfectly reasonable to think that we could benefit from an improved immigration system, like many other industries could as well.

Q: You’re also urging Congress to reform the nation’s housing finance system. What’s the key change you seek?

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A: The ability to introduce the financing products just has not kept up with today’s market place as much as we would like to see.

So we need to revamp the ability to bring more people into the system who really do qualify and can afford a home.

Q: One way you’re proposing to make new homes less expensive is by pushing for less, unnecessary government regulation. Give me an example.

A: Take the fair market price of a home and you can attribute 25 percent of that to costs of regulation of all different sorts. In some areas of the country it’s quite a bit more than that.

Look at the regulatory framework, everything from building permits to the cost of local and state approvals at every step, which involve everything from inspection to added protections.

If you have codes that are written requiring certain equipment of a certain color and size and format, you’re actually making it very expensive if there’s only one or even a couple of companies that can provide those things.

We’ve seen this in so many different ways. You start with good concepts — green building, energy efficiency — but as soon as you overcook anything it starts really adding to the cost.