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Under pressure to be “supportive” rather than “adversarial,” organizations frequently take positions that may not be sound from an ideological or economic perspective, but do little harm otherwise. So, it was no big deal when MAHB agreed to support the recommendations of the Senate’s Agricultural Preservation Task Force to allow farm land to be assessed at current use rather than its “best” use, despite the fact that it was just one more government sponsored benefit for the most subsidized industry in America.
However, due to some recent finagling, the association was forced into opposition of the proposal as a series of changes to the Task Force’s recommendations have “transformed the legislative package into a ‘lock up farmland, stop rural growth, punish evil speculators’ program.”
In the May 15th issue of its Governmental Affairs News Update, the association explains that the Department of Treasury now insists on a “recapture” of the tax benefits given to farmers when the land is no longer used for agricultural production. And, Treasury wants to use the “recaptured” dollars to fund state and local purchase of development rights (PDR) programs.
SB 1246 “currently calls for the person who converts land from agricultural use, to repay 50% of the benefits received by the farmer for a period of up to seven years. Treasury says the payback isn’t high enough to discourage ‘land speculators,’ and proposed that developers of, what was formerly farmland, be forced to pay back 100% of the benefits for up to seven years.” Furthermore, the recaptured dollars, estimated at $7 million annually, would go for PDRs.
MAHB also notes that the Senate Fiscal agency estimates the total tax break from the package would cost $90.4 million the first year, and continue to grow in subsequent years

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Business Briefs: Sugar update; autos roll on ...

In this column (May 2) we wrote about the power of the “Sugar Industry” as their lobbyists brought 11 U.S. Senators into Agriculture Secretary Glickman’s office to pressure the Administration into shoring up the domestic sugar market by spending $100 million to buy sugar and subsequently “boost” its price. Well, the administration partially gave in, as it announced plans to buy 150,000 tons of sugar (lobbyists want 350,000 tons) for $60 million, and is prepared to “purchase more.”
However, a look at the Federal sugar program shows that growers reaped $1.6 billion from artificially inflated prices in 1998 due to Federal expenditures (probably more in ‘99) and will likely gain even more this year.
Question: Where were the subsidies for Home Builders in the early ‘80s?

The factory order report, released early this month, showed that production for new cars and trucks had risen 4.9 percent in March ... coupled with strong April sales reports, it’s obvious that the auto market remains exceptionally strong.
And, on a related note, the auto industry now expects sales for 2000 to approach 17 million, and perhaps even exceed last year’s record.

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Now Rosie’s “My Friend;” Where’s Kathie Lee?

Due to a quarter century of political contributions, I’m on just about every hit list in America. I’ve even been solicited by “Right to Life” and Planned Parenthood in the same week (well, if the U.S. can sell arms to India and Pakistan, why not?).
The only time I get bothered by the seemingly endless begging for funds is when a complete moron, despot or demagogue solicits me on behalf of someone else who’s running for office. The implication, of course, is that the solicitor has some influence with me, and would entice me to support his or her candidate.
I’ve received “Dear Friend” letters from Flat Tax proponents like Steve Forbes and Dick Armey who would abolish the Mortgage Interest deduction, and I’ve gotten them from Al Gore who wants to outlaw the internal combustion engine and stop suburban growth. I even received one from House Majority Whip Tom DeLay, who combines despot, demagogue and moron in one small package. But I never received a “Dear Friend” letter quite as pathetic as the one in Tuesday’s mail. It opened: “As a mother of three small children, I’ve taken on many new and exciting challenges: I’ve played ‘whirr ... open wide for the spinach copter’ 9368 times ... mastered the detection of dirty diapers at distances greater than twenty feet. But nothing is more challenging, and no responsibility greater, than preparing my children for the world that awaits them beyond potty training.”
The letter continues as a solicitation for funds for a “woman (Debbie Stabenow) who shares my commitment to children (and) is running for the U.S. Senate in Michigan,” and attacks her opponent for his ties to “Trent Lott, and worse, Jesse Helms (both who send me equally outrageous fundraising letters),” along with the “NRA and Christian Coalition.”
So, who is my “Dear Friend?” Why none other than afternoon talk show host and headline speaker at last Sunday’s “Million Mom March,” Rosie O’Donnell, who combines all the attributes of Tom DeLay in a slightly larger package.
The truth is, I’ve supported Representative Stabenow in the past, and will probably do so again, despite Rosie’s letter. But there’s another “truth” relating to her race with U.S. Senator Spence Abraham. Rather than the being the extremist the letter suggests by linkage, Abraham’s a conscientious public servant whose only downside is an inability to differentiate between modern GOP dogma and economic reality. Otherwise, he’s a fine Senator.
The problem here is the complete disintegration of reason in American politics. Republicans can’t win without the DeLays, Helms’ and Hestons ... Democrats need the Kennedys, Gores and O’Donnells, and both have to tolerate the most despicable elements. So, it won’t come as a surprise if I get an Abraham solicitation letter signed by Kathie Lee Gifford.

Barry

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It’s still about "Nothing" in particular

It's really about nothing in this issue. Catch you next time........

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Association News and Events Website takes over 600 hits off Parade Ads

Last fall, around Parade time, we put a counter on the association web site, and discovered we received over 200 hits during the event. At the time, we only advertised bamfhome.com in print.
This spring, we put it on TV, showing the address for the final 18 seconds on our thirty second spots ... The ads began running Wednesday, at a time our total count was in the low 1,500s. We checked it prior to the General Membership meeting and it was up to 1,552.
The site took nearly 300 hits by Friday afternoon, was nearing 400 total by Saturday’s opening, and they kept coming well after the kick-off (54 Tuesday night alone).
As the Parade re-opened last night, and advertising returned to a heavy schedule this morning, we expect the hits will pick up again.
No matter what the final numbers show, it’s clear that the public is responding to the web site, which will open up a number of promotional opportunities in the near future .... stay tuned.

The Parade opened with solid traffic on Saturday, then exceptional attendance Sunday, according to participating builders. However, perhaps more important in light of continued forecasts suggesting the slowing of home sales, the public seems to be in a serious mood regarding the purchase of new homes. Obviously, we will know more about this by the event’s end.

The Parade Awards’ judging took place Friday afternoon, and the winning homes were:

Condo Division
Woodside Builders swept all three awards (Home # 36)

Prism (<1,760’)
Johnson Builders, Inc also swept all three (# 18)

Paragon (1,760 to 2,200)
Rajala Homes (# 11) won for Best Interior; and Signet Residential (# 6) took Exterior and Best of Show

Pinnacle ( >2,200 )
Excel Building (# 5) won for Exterior; as Lausman Homes (# 9) won for Interior and Best of Show

Custom Excellence
Pinkelman Custom Homes (# 14) won Best Exterior; Tom Staley Builder (# 12) won for Interior and Best of Show

Awards will be presented by Republic Bank at the June 14 General Membership meeting.

A noteworthy Parade incident: TV 12 news asked a woman at the Parade why she was there? Her response: I can’t imagine a better way to spend Mothers’ Day than by looking at all these beautiful homes.”

Tuesday’s filing deadline for Political Office had a number of surprises. It’s a little early for comment in depth, since there’s likely to be so critical changes in the ballot by the withdrawal deadline, but it’s obvious that residential growth will be a major issue in a number of townships.
However, one person running for office deserves immediate recognition ... BAMF Membership services director and “Webmaster” Tracey Tucker is one of two Flint Township Constable candidates (2 will be elected) on the ballot ... Not only will her election bring law enforcement powers, one must remember that previous holders of the office have reached such heights as Chairman of the County Board of Commissioners and even Drain Commissioner ...

The MAHB Summer convention is set for July 19th through 22nd at the Grand Traverse Resort, and registration for the event is just $99. Highlights for the event include a golf scramble at “Dah Baher” for $140; Entertainment with Kenny Schultz who “can balance anything on his nose;” a B-PAC reverse raffle reception ($100), with a big 20% payoff (MAHB notes: “You must be present at the reception to win. Each ticket you purchase gains your one admittance into the reception. Buy 5 tickets and you and 4 of your friends get to attend the reception.” Can you say ree-SEP-shun?).
You can even send your teen to Pirates Park ($70) ... and there are education programs galore, committee meetings and, of course, the Board of Directors ... check your May and June issues of Michigan Builder for for your registration form, or call the Association office.

Economic Update: So, what alternative did the Fed have?

What a couple of weeks it’s been: Unemployment’s at an historic low; production’s up; inflation took a breather; and growth’s robust ..... So, the Federal Reserve raised rates by the dreaded half a point.
What choice did the Central Bank actually have? Literally none!
Actually, the most critical item related to the economy during the period was the fact that the financial markets had adapted to the half point rise well before the Fed acted. In other words, by the time of Tuesday’s action, the markets had already adjusted. So, if the Fed failed to act, there was reason to believe that the markets would rally in an irrational manor, with the kind of “exuberance” Fed Chairman Greenspan decried two years prior.
So, the markets rose Monday prior to the raise, and Tuesday following it, before settling back on Wednesday. And, by Thursday morning, it was much ado about nothing.

April Employment
The fate of the half point rate increase was set with the release of the Labor Department’s employment data for April which showed that companies raised wages and went on a hiring spree that created 340,000 new jobs during the month. And, perhaps more troubling to the inflation conscious Fed, the hiring brought the the unemployment rate down to 3.9 percent, the lowest since January of 1970 when Dick Nixon and Ben Stein’s father were so concerned about inflation, they place wage and price controls into effect.
The April figures show that the economy likely created 800,000 jobs in the past two months, hardly a sign that the five previous rate increases were having any effect on slowing the economy.
Furthermore, the Department said wages were up at a higher rate than expected, rising 6 cents per hour, or 0.4%, following a similar gain in March. Interestingly enough, the one sector of the economy which experienced a significant decline in employment was construction. The sector’s employment level fell by 55,000 workers, conceivably in line with the drop in building permits.

Inflation Takes a Break
After a rather rough road the past couple of months, oil prices subsided in April and inflation took the month off. First, we found that import prices fell 1.6%, with oil being the major factor. Then, the Labor Department said that prices at the wholesale level fell 0.3% during the month, also due to the effects of the rise in oil production.
The core rate of wholesale inflation, without food and energy, was up a mild 0.1% for the 2nd consecutive month, which may take us to the best news on the inflation front.
Despite the tight labor market and a 12 month wholesale inflation rate of 3.9%, the core rate has remained at just 1.3% since April of ‘99, meaning that, when take the volatility of energy out of the mix, inflation, at least at the wholesale level, continues to remain in check.
At the consumer level, inflation also appeared quite well behaved, as the Consumer Price Index was flat, while the core rate rose 0.2%, following respective rises of 0.7% and 0.4% in March. However, a couple of troubling signs remain. First of all, as anyone who drives can tell, for some unknown reason, gas prices are back up to March levels. Secondly, there remains to be a continual problem with the effect of government policy distorting the CPI.
Three times during the past year, the primary causes of higher than expected inflation reports were related directly to tobacco, prescription drugs or both. And, their impact on the April report was evident, despite its mild nature.
Last month, tobacco prices rose 4.4% (their biggest rise since September), while prescription drugs were up 0.4%. Otherwise, the core rate may have been flat as well.
The problem is that governmental attacks on the tobacco industry have been directly responsible for the price increases in recent years, and the repercussions affect the economy as a whole ... it makes one wonder why hand guns don’t count for inflation data...

Economic Notes:
This past Monday the Federal Reserve said that Industrial Production rose 0.9% in April, its biggest rise since August ‘98, when the Flint strikes ended ... The Labor Department reported Productivity gains slowed in the 1st quarter to an annual rate of 2.4%, well below Q4s

Housing Industry News’ Update

Local residential permit activity slowed in April, on the heels of a surprisingly strong 1st quarter, according to data from Housing Consultants. Permits, up more than 10% across the region during the first three months of the year, were up just 0.7% from January through April, with four counties, including Genesee and Oakland, experiencing declines in comparison with the same period in 1999.
Genesee County authorities issued 552 permits for the four months, down from 588 a year ago. Although it doesn’t appear to be a significant decline (particularly when one builder is 29 units below last year’s pace), it’s still worth keeping an eye on, since Oakland Co. was down by 141 units, and Macomb County’s stats were flat.
Grand Blanc Township continued its lead with 92 permits, while Fenton Twp continued to hold second spot at 66. Davison Township, Burton and Flint Township rounded out the top five. However, as we reported last month, Holly Township, which had just 12 permits the first half of 1999, is now up to 46, primarily due to the extension of the Woodfield Subdivision into Oakland Co. It’s Genesee County water and sewer, and possibly in the Grand Blanc School system ... and those numbers would actually put us ahead for the period.

Single family starts remained unchanged for the 2nd consecutive month in April, as total housing starts were up to a seasonally adjusted rate of 1.66 million units. Multi-family starts, after falling dramatically in March, recovered and were up 14%.
Building permits, however, fell during the month, much in line with what was experienced locally.
The Midwest saw starts gain 12.4%, while the West experienced an 18.2% rise. Starts fell in the Northeast and South.

NAHB’s Housing Market Index, its monthly survey of sentiment of builders across the country, rose in May, however, expectations of sales over the next six months fell as concerns about rising interest rates are hitting home builders confidence.

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