FEEDBACK: NAHB Responds to GlobeSt.com Article

Contrary to comments reported in GlobeSt.com on April 30, the National Association of Home Builders does not establish profitability standards for homebuilders.

In Naomi Grossman's April 30 story, "Local Zoning Board Caps Developer's Profits," Richard Heaton, the chair of Bolton's zoning board of appeals, is quoted as follows to justify imposing a profit cap on a developer building affordable multifamily housing: "According to Heaton, the 12.4% is a standard developed by the National Association of Home Builders. It is the average profit for the top 25% of all builders in the country, he points out."

Please clarify to your readers that this number is emphatically not a "standard;" it came from a report called the "2001 Cost of Doing Business Survey" that was published in NAHB's book, "The Business of Building." This survey of 400 builders tracked profit trends among NAHB members, most of whom were small-volume, single-family homebuilders with low land costs, and is therefore not applicable to multifamily development. Further, as is stated in the book's introduction, "The results reported here are not 'ideal' numbers. They aren't necessarily appropriate goals for every company."

NAHB recognizes the nation's need for affordable housing. Using NAHB's information in error to support a cap on this developer's profits at a level far below that allowed by the state of Massachusetts might well discourage builders from trying to provide such sorely needed housing. Thank you for allowing us to clarify NAHB's role in giving the nation's home builders the tools they need to provide safe, decent, affordable housing for all Americans.

Sincerely,

Antonio L. Giordano, Sr.
Multifamily Chairman
National Association of Home Builders