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Why it’s so tough to form a regional HBA

In the Charlotte metro area, there are nine homebuilders associations.

Many of them are suffering from lower membership numbers, a side effect of the housing market’s troubles.

For some HBAs, memberships are down by more than 50 percent, which means less income to operate, which in turn means staffing and hours of operation have been slashed, leaving many HBAs less equipped to, say, keep tabs on what government’s up to.

That has led to some Charlotte-area industry officials tossing around the idea of forming a regional HBA like some other cities, such as Atlanta, have.

Getting such a feat accomplished in the Charlotte region, though, would likely be anything but easy, despite some who point out that the idea makes sense from an efficiency standpoint at a time when HBAs have fewer dollars and staff. The multiple HBAs in the region are also competing with one another to raise funds for their various events, like golf tournaments, not an easy task while the economy remains crippled.

“We’re all one media market. We’re all trying to serve our membership, and the duplication of efforts is enormous,” said Mark Baldwin, executive vice president of the Home Builders Association of Charlotte. Combining the area’s HBAs makes economical sense, he added.

Related story: N.C. HBA mergers aren’t new

“Our board of directors has thought it would be a great idea for 10 years,” he said. “The other HBAs in the region have been approached, and their board of directors evidently doesn’t think it’s a good idea.”

But why?

For one, Lake Norman Home Builders Association President Nicole Goolsby raises concerns about differences in the size of builders. Her HBA’s membership is largely composed of small, custom builders and remodelers, she said, whereas the companies in Charlotte are likely to be larger.

And, she said, each HBA has its own personality.

“There are cultural differences between the HBAs in a specific region,” she said. “We’d want to keep our identity.”

Mike Carpenter, executive vice president and general counsel of the North Carolina Home Builders Association, said regionalization would have some obstacles. Each local association has its own charter but would have to surrender it to become part of a larger group.

Carpenter, who said he’s not aware of any formal proposal to create a regional group for the Charlotte area, said the national HBA has never forced a merger in his 22 years with the NCHBA.

“Ultimately, it makes the most sense to have folks directly involved to make those decisions themselves,” he said.

In Atlanta, nine chapters — essentially county-level groups — fall under the Greater Atlanta Home Builders Association’s charter.

“There’s a uniqueness of each one of those markets, but we’re under one umbrella,” the GAHBA’s executive vice president, David Ellis, said. “Some of those counties are small and don’t really necessitate a full-time staff person. You kind of deploy resources as are needed.”

Ellis said the association still tries to keep a sense of localness among its chapters.

“We don’t want to ever become the big faraway group that isn’t sensitive,” he said. “We have to work hard to make sure the association stays relevant in those markets.”

The GAHBA has one office, which means no individual ones for each chapter.

If a legislative issue that will affect just one county pops up, the GAHBA rallies the builders in that area and devotes staff members to it. Many times, an issue that will affect one county will be proposed months later in another, and the GAHBA can use the experience it gained in dealing with the first issue to deal with subsequent ones, Ellis said.

“There are real efficiencies in having the umbrella group,” he said. “We like our model because it gives us a chance to use a larger set of resources to attack local problems.”

Since the recession, at least one Charlotte-area HBA has been in the dark about major regulation changes taking place in its county. In September, members of the Home Builders Association of York County told The Mecklenburg Times they knew nothing about a proposed unified development ordinance, for which the county has held public meetings starting in 2009.

“I am a little upset that they (county officials) haven’t included us up until this point,” the HBA’s president, Scott Maxwell, told The Meck Times in September.

Krista Long, president of Charlotte’s HBA and vice president of sales and marketing for Ryland Homes, described the homebuilding industry as being in “survivor mode.”

The Charlotte HBA, which at its peak had almost 2,000 members in 2007, now has 900 members. The Lake Norman HBA in Mooresville, which had 632 members in 2007 at its peak, now has just 282.

Long said it would be a great idea for the local HBAs to talk about forming a regional group.

“I think it makes sense anytime you can gain efficiencies,” she said.

Even starting a serious discussion on the issue would be tough. For now, it’s a topic that’s only being talked about informally, and many local HBA representatives don’t want to admit even that much.

Long said there have been “very offline conversations” on the topic. She said she was in a brief discussion more than a year ago about it.

Goolsby, president of Rion Homes, a custom-home builder and remodeling company, said the Lake Norman HBA has not had formal discussions with any other HBAs in the region about forming an umbrella group. Although the topic has been discussed at the Lake Norman HBA’s board of directors meetings — regionalization came up after her HBA watched a webinar from the National Association of Home Builders — she said what was discussed is “not appropriate to be shared.”

“We were talking about what our best ways are to effectively serve our members,” she said. “Our HBA is not looking to take over another HBA.”

And, she said, there are no plans for more formal discussion.

Sandra Wallace, the Lake Norman HBA’s membership services director and the HBA’s only staff member — down from three staff members before the downturn — said there have been informal talks in Lake Norman about creating a regional organization. Having a stronger collective voice would be good for the members of HBAs, she said.

With shrinking rolls, HBAs must look to fundraisers to offset the loss of dues revenue, she said.

“I think it’s a good conversation to have, but I’m not saying it’s a good plan to go ahead with because I don’t have all the information I need to have,” Wallace said.

Ann Crenella, executive officer for the Cabarrus County Building Industry Association, said there have been talks about regionalization but no formal proposal to do so in Cabarrus.

The CCBIA is down to 200 members from a high of 300 members before the downturn and has reduced staff hours and slashed spending.

Membership in the North Carolina HBA has also slumped, from 18,000 members in 2007 to 13,000 today, Carpenter said. Still, North Carolina is leading the nation in HBA memberships, he said, pointing out that no other state HBA has more than 10,000 members.

The national HBA’s membership is also down, from 260,000 members at its prerecession peak to 140,000.

Proponents of a regional HBA for Charlotte point to the fact that most homebuilders don’t build in just one county. They’re travelling the region in a struggle to find jobs. And many builders become members of multiple HBAs, industry officials said.

Carpenter is not surprised that regionalization of HBAs is a discussion topic.

“Given the difficult economic situation that we’re in in our industry, lots of things are being talked about,” he said. “There are good arguments to combine and good arguments to have separate organizations.”

To Baldwin, it makes sense.

“We are a big industry, but we’re fractionalized, splintered,” he said. “We all have a message, but it needs to be the same message to show we are a united strong industry.”

A new regional HBA would not be focused only on the Queen City, he said. Rather, it would have a new name and new board, he said.

“It’s something that, as I move toward retirement, I’d like it to be one of my last projects that I’m involved in,” the 64-year-old said.

Ramsey can be reached at [email protected].

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