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utlook

2012/10

Analysis: Hope in economic recovery helped boost Obama

By Kelley Beaucar Vlahos Published November 07, 2012 FoxNews.com

The economy, according to the Republican playbook, was supposed to make Barack Obama a one-term president. But with Obama winning another four years in last night's election, analysts say he was evidently able to mitigate the fallout of a meager recovery and even use small improvements in recent months to his advantage. "A lot of people thought the economy was the big barrier to Obama's reelection, but they ignored the prospective element of the economy," offered Darrell West of the Brookings Institution. "With the economy getting better, there wasn't the barrier they thought there would be." And the economy was foremost on voters' minds -- according to early exit polling, 61 percent of voters in the battleground of Pennsylvania said it was the most important issue affecting their vote; in New Hampshire it was 59 percent; in hotly contested Ohio, 59 percent. Obama's better-than-expected showing in the battleground states -he won virtually every one of them except for North Carolina, with Florida standing as the only contest yet to be called -- indicated that Americans are willing to give the president another chance to pull the country out of one of the worst recessions in recent history.

Some conservatives warned against broad-brushing the results, saying Tuesday night that Obama's slim margin of victory in the popular vote was "no mandate" going forward. Nevertheless, in an election season that brought the oft-repeated adage "it's the economy, stupid" to new levels, analysts had predicted the national unemployment (just under 8 percent as of Friday) and slow recovery numbers would be Obama's Achilles' heel. Poll after poll had indicated a sour mood in America with majorities believing the country was on the "wrong track." But a combination of silver-lining economic statistics released last Friday (gas below $4 a gallon; 171,000 new jobs), plus positive reporting about the federal government's response to Hurricane Sandy, a lauded "ground game" and an opponent who was unable to capitalize on the uncertain fiscal landscape, combined to give the president the boost he needed in the 11th hour, analysts told FoxNews.com. "First of all, he ran a very good campaign -- and Romney did not run a very good one," said Terry Madonna, who directs the Franklin & Marshall College Poll in Pennsylvania. He said he personally believes Obama should have lost based on economic factors alone, but Romney was unable to use that to the Republicans' advantage. "President Obama was potentially the weakest among working class

voters between Scranton and Des Moines, but Romney did not have the ability to really appeal to them," said Michael Brendan Dougherty, national correspondent for The American Conservative magazine, citing Romney's comments before a private fundraiser about "the 47 percent" and the constant "upper-management caricature that these voters detest" as contributing to his lack of more traction with this demographic. "Romney was defined early as a wealthy 'one percenter' who didn't care about the middle class, who ran a business that put people out of work, shipped jobs overseas, made millions on it and won't tell us what he did with the money," said Madonna. Unfairly or not, it stuck, he added. This gave Obama some space to appeal to workers via the auto industry bailout and to divorce himself from the roots of the crisis, said Dougherty. Exit polls Tuesday night indicated that many Americans are still unwilling to blame Obama for the crisis and are still looking back at the last president in that regard. For example, 51 percent of Ohio voters polled said George W. Bush was responsible, not Obama, for the current economic climate. "I think voters did understand that Obama came in during challenging economic circumstances, and perhaps they don't necessarily see that as an excuse, but Mitt Romney never sold himself as a man who understands or

was in solidarity with the people most hurt from the downturn and economic crisis," Madonna said. Madonna said this was a problem from the start, that Romney was hard to define. "Was he the moderate Mitt or was the Tea Party Mitt? The Obama campaign played early on the flip flops, asking, 'who is he?'" Meanwhile, Obama has been credited with having the better ground operation, put into place during the 2008 election. It's been enhanced and expanded since, concentrating on the states that required it. According to reports last week, Obama had 800 local field offices, compared with 300 for Romney, with the difference in the swing states quite "stark," said writer Molly Ball, pointing out that they were extremely active in registering new voters and taking advantage of elaborate data-based direct marketing. But much of the outcome could have been helped along by recent events over which neither man had control. "I think the hurricane was decisive," West said. "During natural disasters everyone is a liberal, they want assistance and they want help and they look to the federal government. Romney was out of the news for three or four days and he did not have an answer when asked about disaster recovery and the role the federal government should play." After the press accused Romney of "dodging" questions about the Federal Emergency Management Agency (FEMA), he told reporters that he does not plan to abolish FEMA, but wants the states to take the lead role in disaster response. With thousands still without power and displaced on Tuesday, the recovery has been grinding along, and the coming days may bring more tension and fresh complaints over how FEMA is handling the response, but Obama has already benefited from his opportunity to look presidential. Meanwhile, Romney was forced to tone down the campaign during a critical week in which he was actually gaining momentum in the polls, said Madonna. Analysts are also pointing to Obama's much-needed boost from Republican Gov. Chris Christie, whose bear hug to Obama went viral despite Christie later noting he was still strongly in support of Romney. "The point with Republicans ... is that it would have been one thing to say 'thank you, New Jersey is really grateful," said Madonna. "It's another to thing to have that hug, to use all those superlatives, walking arm in arm with (Obama) and having that tape run for a day." In the end there are no silver bullets, but a lot to consider in the upcoming days, about what Obama did right, and where Romney went wrong, he added. "The post-mortem will go on endlessly -- they always do."

Builders Outlook

2012/10

2012/10

Builders Outlook

Presidents Message |
Frank Arroyos
President, El Paso Association of Builders

We are in the last quarter of the year, and the market in El Paso has shown to be remarkably resilient. Markets ahead of us are Houston, Dallas and San Antonio yet we have been in the race. The Lone Star State is certainly flexing its housing muscles. A great new home market is not possible without job growth. Again, Texas is a leader in attracting new business and creating the type of atmosphere for business to grow and thrive. While the national economy is still in recovery mode and we hear rumors of possible QE3, we should give thanks for what we have here. There have been times in the past when the country was doing well and Texas was down in the dumps, especially in the late 80s. We will take this existing market anytime over those days. Remember that membership is everyones responsibility, do your part to help your industry.

ElPasoDisposal

772-7495

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Perspective |

Builders Outlook

2012/10

Ray Adauto, Executive Vice President EPAB

Customer no longer king but faith still persists

prefers to look at you without looking at you, getting stulled if you know what I mean. I had excused him simply because I thought this guy was a buffoon and all buffoons need to be ignored. That is until recently when he made a disparaging remark to one of his wait staff about her going to vote. He proclaimed out loud that he proudly didnt vote and he hadnt voted in years. Really? And hes proud of this? Well I decided this was it. This guy doesnt get my money anymore, and while itll be the wait staff that loses the tips this guy will one day realize that his customers include those of us who vote because of a scared trust. His snubbing his nose at me was one thing, snubbing those who sacrificed for our rights is a whole lot different. Not only am I not going back I wont ever hold a meeting there, recommend the place and will drive right by. I took one other step. I wrote his district manager to let him know. Number two. Working with volunteers has its rewards and it also brings out some secrets. Some people love joining for some reason, and then forget that joining is the easy part. Its the commitment to that volunteerism that is the real proof of commitment within an organization. Anyone who has volunteered to lead an event, put on a show, or promote the organization soon realizes that not everyone keeps their word or commitment. Such is the case when you see hands go up at the announcement of something, the leaders count the hands, and then when its time to put up the hands disappear. For example the group decides to put on an event and they seek commitments of money and time. In the group individuals raise their hand. Oo-oo, Im in they say, and then just a few days from the event neither the money nor their commitment is honored placing undue stress on the entire event and its coordinators. Unfortunately we all have those and you probably know a few yourself. At some point the question is whether or not there really is a commitment, and you know not to count the chicken until the eggs all hatch. Three My third scenario is about faith. For some of us faith is real and a part of our daily lives. For others the search continues. Im not talking about religion necessarily, Im talking about having faith that gets you through the day and welcomes you in the morning. It can be the faith of knowing that tomorrow has promise and despite how we might mess up today the mere fact of having another chance is welcomed. Its the faith of knowing that you have a purpose and meaning. Its faith in knowing that you can overcome obstacles, bad calls, or adverse conditions. Its faith in knowing that family and friends really can be there for you. Its faith to know that there are people that really care without hesitation or payment; without demands or restitution. Faith to know your faith really does exist. I cant tolerate those who have lost all faith because of some incident, accident or failing. Blame has three fingers pointing back for the two pointing outward. Faith is knowing that you can put up with scenario one and two and still come back for more. Keep the faith friends. It really is there for you.

As frustrating as it is to run a business it is equally frustrating when you are on the other side of the counter. Over the years I have become increasingly unwilling to patronize a place that gives bad service, inferior quality, or refuses to acknowledge my patronage. Everyone reading this probably has example after example that they can share but maybe you and I have had the same experience at the same places. Not being totally crazy at this point I wont name names as far as businesses, but some experiences may just remind you of a particular place. Scenario number one. I have been eating at a national chain known for its breakfast offerings, sometimes slamming you with special deals. This particular spot has gotten my business for the better part of two decades at least once every two weeks, sometimes more often. The wait staff knows me well enough to bring coffee and water nearly as fast as I sit down. There is a manager at this restaurant who has seen me frequent his place for years, yet not once has this guy come over and asked how my meal is, or ask how Im doing. No he

2012/10

Builders Outlook

Road to Recovery
Home Price Appreciation Helps Housing Move Forward
Sparked by rising home prices across much of the nation, the housing recovery is now under way, but fiscal uncertainties and other challenges could result in a bumpy ride in the coming months, according to economists participating in yesterdays National Association of Home Builders (NAHB) webinar on the construction and economic outlook. Were seeing a more robust housing sector than many other parts of the economy, said NAHB Chief Economist David Crowe. One of the reasons is we have finally begun to see on a national scale that house prices are picking up again. Crowe cited a number of other factors that are carrying the housing momentum forward. These include: Pent-up household formations Rising consumer confidence Increasing builder confidence in all three legs of the industry: remodeling, multifamily and single-family construction Growing rental demand More than 100 metros currently on the NAHB/First American Improving Markets Index However, Crowe offered several cautionary factors that continue to put a drag on housing activity at this time including builders who are experiencing difficulties in obtaining production credit, qualified buyers who are unable to obtain mortgage loans, inaccurate appraisals, seriously delinquent mortgages that are at least 90 days late or in foreclosure, and a limited inventory of developed lots in certain markets. Other causes contributing to uncertainty in the marketplace include the looming fiscal cliff that will trigger mandatory budget cuts and tax increases at the beginning of next year, pending Dodd-Frank Act regulations that are making financial institutions hesitant to lend since they dont know how the new rules will affect them, tax reform, and the future role of Fannie Mae and Freddie Mac in the nations housing finance system. NAHB is forecasting a 21 percent increase in single-family starts this year to 528,000 units and a further 26 percent climb to 665,000 units in 2013. Multifamily housing starts are expected to rise 26 percent this year to 224,000 units and 6 percent in 2013 to 238,000 units. Optimistic Housing Outlook Expressing a more bullish outlook on housing and economic growth, Mark Zandi, chief economist for Moodys Analytics, forecast that GDP growth will range in the 2 percent range this year and next and double that growth closer to 4 percent in 2014 and 2015. At the same time, he expects job growth to go from two million per year to closer to 3 million in 2014 and 2015. A big part of this optimism is the housing market, said Zandi. I expect 1.1 million total housing starts in 2013, 1.7 million to 1.8 million in 2014 and over 1.8 million in 2015. Zandi noted a range of assumptions behind this rosy forecast, including the expectation that mortgage rates would remain very low, the availability of housing credit will improve as private mortgage lending begins to pick up, and the job market gains traction as policymakers work to resolve fiscal issues, which will ease market uncertainties. Specifically, Zandi cited three critical fiscal policy concerns: The fiscal cliff. If policymakers do nothing, the combination of pending tax increases and spending cuts set to take effect in January could produce a fiscal drag of four percentage points, Zandi said, which would throw the economy back into recession. Hiring will remain weak until this is resolved, he said. Treasury debt ceiling. By late February or early March, the Treasury is expected to hit its debt ceiling. A failure to raise the ceiling would prevent the U.S. government to borrow to meet its existing legal obligations, including the issuance of monthly Social Security checks. Achieve fiscal sustainability. Zandi said that federal government expenditures as a percentage of GDP is 24 percent and revenues is 17 percent. He said this seven-point gap needs to be slashed to closer to two percentage points of GDP. We need spending cuts and tax revenues to narrow future deficits, he said. If we cant do that, bad things will happen. Acknowledging that these challenges wont be easy, Zandi said his forecast is based on the assumption that Democrats and Republicans will eventually strike a deal on these contentious issues because each side has much to lose. Democrats, he said, dont want to see tax cuts for the wealthiest Americans and Republicans dont like the defense cuts mandated by sequestration. If the nation has the political will to address the fiscal issues in a reasonable way, I think we will be off and running, said Zandi. A Gradual Climb to Normal Delving into the state statistics behind the national numbers, Robert Denk, NAHBs assistant vice president for forecasting and analysis, cited a range of differences among the states in the amount of pain suffered during the recession and the progress that is being made in recovering. The hardest hit states -- such as Arizona, Florida, California and Nevada -- bottomed out the furthest during the downturn and still have much ground to make up. Meanwhile, several energy producing states North Dakota, Texas, Oklahoma, Montana and Wyoming will be back to normal levels of housing production by the end of 2014. On a national basis, housing starts are projected to get back to 55 percent of normal production by the end of next year and 70 percent of normal by the end of 2014, Denk said.

Builders Outlook

2012/10

New-Home Sales Rise 5.7 Percent in September

New-home sales this year have consistently and significantly out-paced their year-ago levels as favorable interest rates, rising prices and improving consumer confidence have driven demand higher, noted NAHB Chief Economist David Crowe. Meanwhile, despite a small increase in the inventory of new homes on the market in September, the number of completed new homes for sale is now at an all-time low and the months supply is at its tightest since October 2005. This is an indication that builders continue to have a tough time obtaining construction credit, even as demand for new homes increases. Three out of four regions registered substantial gains in new-home sales this September, including the Northeasts 16.7 percent increase, the Souths 16.8 percent increase and the Wests 3.9 percent increase. The Midwest was the exception to the rule, with a 37.3 percent decline. Meanwhile, the inventory of new homes for sale inched slightly upward to a still-low 145,000 units in September, which is a 4.5-month supply at the current sales pace.

Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 389,000 units in September, according to newly released figures from HUD and the U.S. Census Bureau. This is the fastest sales pace recorded since April of 2010. Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, todays data provides further confirmation that a gradual but steady housing recovery is underway across much of the nation, said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under todays exceedingly stringent guidelines.

2012/10

Builders Outlook

7
(PWC) report estimates the oil and gas industry supports about two million direct and indirect Texas jobs that power 24 percent of the states economy, he said. As a result, Texas residential and commercial real estate markets are largely outperforming those in the rest of the country. Although employment gains reach well beyond the oil patch, some of the biggest effects have been in areas at the heart of drilling activity. Hunts research shows the significant impact oil and gas activity is having on some of the most active counties in the Permian Basin and Eagle Ford and Barnett shale regions, referred to in oilfield jargon as plays. Negative oil and gas job growth in the Eagle Ford before 2008 and strong positive growth since 2010 shows the dramatic difference in oilfield activity before and after shale discoveries, said Hunt. The rate of year-on-year job growth exceeded 90 percent in June 2011. Positive oil and gas employment in the Permian held up much longer than the other two plays and Texas as a whole, said Hunt. The Permian has traditionally been an oil play, and oil prices in excess of $100 per barrel throughout much of 2008 helped extend positive job growth there. The assumption that crude prices will remain relatively high while natural gas prices remain low is driving a number of significant changes that will affect Texas real estate, said Hunt. Hunt noted the large projected increases in a closer and more affordable supply of natural gas liquid is driving companies to expand capacity at their facilities. Other sectors benefitting from low natural gas prices include electrical power generators and manufacturers of paper products, plastic products, cement, fertilizer and fabricated metals. Hunt said manufacturing along the Texas-Mexico border may benefit as well. For example, Brazils Santana Textiles is constructing a $180 million denim plant in Edinburg. Company officials said low natural gas costs played an important role in the decision to locate in Texas rather than Mexico. PWC reports that inexpensive natural gas could help U.S. manufacturing save more than $11 billion per year and create 500,000 new jobs by 2025. The lure of cheap natural gas is raising expectations for a reindustrialization of America, said Hunt. Texas is well positioned to take advantage of low-priced energy. This is good news for the states real estate markets. To read more about Hunts research, including the effect of rig counts on private employment, the outlook for oil and gas prices, and the benefits of low natural gas prices, read Crude Awakening; Oil, Gas Jobs in Play on the Centers website.

Real Estate Wealth Supports Texas Economy

By David S. Jones, Senior Editor, Real Estate Center at Texas A&M University

COLLEGE STATION, Tex. (Real

Estate Center) Texas is wealthy, and real estate is a big reason. Texas 2011 real estate wealth was valued at $1.6 trillion or $65,432 worth of real estate for every Texan, regardless of age. Thats up 86.7 percent from the $35,055 in 1997. Dr. Ali Anari, research economist with the Real Estate Center (REC) at Texas A&M University, monitors the relative importance of the states real estate industry and the resulting wealth it creates. His latest article, Texas Treasure, is in the October issue of Tierra Grande magazine, RECs flagship periodical. Real estate is the states second largest industry. According to Anari, the 2011 Texas real estate industry accounted for 8.4 percent of the states gross domestic product (GDP). Only manufacturing at 14.7 percent of GDP is larger.

Real estate wealth comprises singlefamily residences, multifamily residences, commercial properties, industrial properties, mineral real estate, utility company properties, rural acreage and vacant lots, he said. More than half (56.3 percent) of the states real estate treasure is in singlefamily housing. Texas 2011 single-family residential wealth totaled $945.1 billion. Multifamily residential wealth was $85.1 billion. Total 2011 commercial real estate wealth amounted to almost $279 billion. Also in the 2011 state treasure chest: industrial real estate ($95 billion), mineral real estate ($106 billion), utility company properties ($50 billion), rural acreage ($80.3 billion) and vacant lots ($39.5 billion). Including the self-employed, 521,684 Texans worked in real estate in 2011, some 3.6 percent of total statewide employment. The largest proportion of self-employed Texans are in real estate. In 2010, the four largest Texas metropolitan areas accounted for a majority (81.4 percent) of real estate employment. Anari says that every $1 million of Texas real estate revenue generates: more than $500,000 in revenue elsewhere in the state economy; 5.2 real estate jobs; and five jobs in other industries.

Taxes paid by the real estate industry accounted for 14.8 percent of total Texas business taxes in 2009, said Anari. Texas property tax revenue that year was more than $40 billion or 47.8 percent of state tax revenues; school districts levied $21.7 billion in property taxes, 54.4 percent of the total. By David S. Jones, Senior Editor, Real Estate Center at Texas A&M University

Texas Gushing Over Oilfield Jobs

COLLEGE STATION, Tex. (Real Estate Center) Texas has been a major beneficiary of increased oilfield employment, and that continues to have a positive impact on many of the states real estate markets. Its no secret that the oil and gas sector has been one of the few bright spots in the U.S. economy during the past few years, said Dr. Harold Hunt, research economist with the Real Estate Center at Texas A&M University. A recent PricewaterhouseCoopers

Builders
City of El Paso explain infill program

utlook on the scene |

City of El Paso Development Services brought information on the latest infill proposal to the association members at a meeting October 31. Matthew McElroy led the discussion on the proposal and showed a power point presentation and took questions from members. The association will have additional suggestions in upcoming meetings.

Members complete Certified Handgun License training

The EPAB has been trying to offer a concealed handgun license class for a while now and finally on October 27 the event took place. Five candidates attended the class given by certified instructor Colonel (retired) Benny Steagall. The Colonel has 30 years of serving in the US Army and is a pilot on helos, from the Apache to Chinook, and continues to serve as an Army civilian employee at Biggs Field. Colonel Steagall has taught gun safety and training to a variety of military and civilians including SOCOM and Delta military training and many El Pasoans. His adventure with the group from the EPAB brought all his talents to the challenge. The Course consisted of the required Texas mandated eight hours classroom plus proficiency at the range. The students all qualified the written exam and the shooting proficiency test with flying colors. As one participant said it was a long time coming but this group effort was the way to go. All five candidates must now pass a background check through the Texas DPS. Future classes depend on the requests from members. All in all the time spent learning was quite an experience and something the association has had numerous requests for.

View more photos on our facebook page: elpasobuildersassociation

2012/10

General meeting features UTEPs Floyd

UTEP Mens basketball head coach Tim Floyd told a sold out crowd at the General Meeting that this years team would be challenged and fun to watch. The crowd was amused with those contrasting statements since it sounded familiar, just like what Coach Haskins would have said a dozen years ago. I have to tell you that Coach Floyd reminds me so much of Haskins, down to his quick wit and stories, said Sam Shallenberger, a friend of both. The crowd was very enthusiastic about having Floyd visit and no one more so than Edgar Montiel. Coach and I fished at his Mississippi home just this summer, Montiel told the Outlook. We had a great time and I have to tell you that Coach is genuine, he continued. The meeting was hosted by Windsor Door LLC, Inc..

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List of Improving Housing Markets Expands to 125 in November
The number of U.S. housing markets showing consistent improvement in three key measures of strength expanded by 22 in November to a total of 125, according to the National Association of Home Builders/First American Improving Markets Index (IMI), released today. This marks a third consecutive monthly gain for the index, which now includes representatives from across 38 states as well as the District of Columbia. The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Markets added to the list in November include such geographically diverse locations as San Diego, Calif.; Gainesville, Ga.; Omaha, Neb.; Louisville, Ky.; and Charlotte, N.C. Not only did 22 additional markets qualify for the improving list in November, but the geographic distribution of included metros expanded from 33 states to 38 (plus the District of Columbia), while 97 out of 103 markets retained their spots on the list from the previous month, observed Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. This shows that a housing recovery is firmly taking root and helping generate needed jobs and economic growth across much of the country -- though we know that this expansion could be even stronger were it not for ongoing challenges including overly tight lending conditions and difficult appraisals. The solid increase in the number of improving housing markets this month illustrates the degree to which the housing recovery has gained momentum since we initiated the IMI last year, noted NAHB Chief Economist David Crowe. Compared to the 30 markets that made the list as of November 2011, we now have 125, which is about one-third of all the markets surveyed for this index. This new high point for the Improving Markets Index provides the latest evidence that housing has turned a corner due to rising demand from consumers who are increasingly confident about the direction of local home values, said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six consecutive months following those measures respective troughs before being included on the improving markets list. A complete list of all 125 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in November, is available at www.nahb.org/imi

Builders Outlook

2012/10

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Builders Outlook

11

Guest Column

Protecting Energy Production Innovation, Jobs

you simply couldnt produce energy from previously. One of the most significant innovations in energy production has been hydraulic fracturing, commonly referred to as fracking. Fracking is a process that is used to release oil or natural gas by cracking underground rock formations, and provides access to oil and gas in areas that do not easily produce them or where conventional methods have historically failed. Its been in use since the 1940s, and recent technological advancements in drilling technology have caused it to become one of the primary methods for retrieving natural gas particularly within the Permian Basin and Eagle Ford Shale here in Texas. The result of this technological innovation has been lowered costs for American families, the creation of good-paying American jobs, and progress towards the goal of American energy independence. When it comes to lowering costs for American families, according to a report issued by the Yale Graduates Energy Study Group, increased shale gas production enabled consumers to enjoy over $100 billion in savings on the price of goods and services in 2010 alone. On the job creation front, Moodys Analytics recently estimated that shale gas production has createdone million jobs since 2002. And, furthering the goal of American energy independence, Citigroup economists and analysts issued a report estimating that fracking could cause U.S. oil production to climb by more than a third by 2015. One million jobs, over $100 billion in savings, and oil production increased by a third sounds like results of a successful energy policy to most Americans, but not to the Obama Administration and their environmental extremist allies. Rather than embrace this source of enhanced energy production and job creation here in the United States and Texas, President Obamas environmental extremist allies want a wholesale federal takeover of fracking regulations, replacing the conventional state regulators, and want to shut down fracking in the name of water contamination prevention. However, there is simply not the justification for such a takeover. The current system of letting states regulate fracking is working, despite the rhetoric one might hear. Even President Obamas Environmental Protection Agency Director Lisa Jackson agrees, as she testified in a May 2011 hearingin the United State Senate that she wasnt aware, of any proven case where the fracking process itself affected water. As the representative of Texas 23rd District, I want to see more jobs and more energy production come to the Permian Basin and Eagle Ford Shale. Thats why Ive fought so hard against the Obama Administrations anti-American energy agenda. We need to pursue proven energy policies that allow Texas to continue producing energy and creating jobs, not those that gamble with taxpayer money on investments in companies like Solyndra.

Francisco Canseco
Texas Congressman

For over a century, the energy industry has been a tremendous source of jobs, and a major driver of economic growth in Texas. It has retained its place in the Texas economy because of continued innovation, which has resulted in energy production evolving from simply drilling a hole in the ground and watching the oil gush towards the sky to a very complex operation that utilizes advanced technologies to extract each barrel from the ground. This continued innovation has enabled areas of mature energy production to have a new lease on life and continue producing energy- and preserving jobs that would otherwise not have been produced. It has also enabled production in areas that

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Guest Advice

Builders Outlook

2012/8

HeALTHCARe ReFORM:

Plan will drive up cost of care as early as 2014

Joe Bernal Employee Benefits of El Paso

In the weeks leading up to the national elections, supporters and opponents of the Affordable Care Act (ACA) have contributed new research and analysis to support their respective points of view on health care reform. A Commonwealth Fund study documents a 10-year slide in health coverage provided by small businesses 58 percent of small business workers were afforded access to coverage in 2003 vs. 49 percent in 2010. However, the Commonwealth Fund argues that the ACAs tax credits for small businesses and subsidies for low-income workers will help offset the trend. In contrast, Forbes reviewed available research to show how the ACA will impact consumers in eight key swing states such as Minnesota, Ohio, and Wisconsin. The articles conclude that the ACA will drive up individual health care premiums significantly as of 2014. STATeS CALIFORNIA: The California Health Insurance Exchange received 33 letters of Intent from health insurers who are interested in participating in both the Small Business Health Options Program (SHOP) and individual exchange, including commercial carriers as well as Medicaid managed care plans. Five bidders proposed statewide coverage, and there were no fewer than six bidders for each area of California. Eight carriers bid for the SHOP exchange in the metropolitan areas, with no less than four carriers in the

most rural part of the state. Staff publicly acknowledged that Anthem Blue Cross, Kaiser Foundation Health Plan, Blue Shield of California and Health Net have all submitted nonbinding letters. Other carriers requested that they not be disclosed publicly at this time. CONNECTICUT: The Office of Health Reform and Innovation has proposed rules to implement the state's all-payer claims database (APCD). The rules include reporting requirements, data element standards and timelines for the reporting process. A hearing is scheduled for November 19, and public comments will be accepted until November 29. Regulations will likely be finalized and adopted by the end of February 2013. The state received about $6.6 million in funding for the APCD from Health and Human Services (HHS) as part of the states Level Two exchange grant. The funding will finance the APCD through 2014. The state expects to begin hiring staff, including an executive director, in December and issue an RFP for a data management vendor in early 2013. ILLINOIS: Voters this week are being asked to amend the state constitution by approving a proposed amendment that would require a supermajority 3/5 vote of the General Assembly or local unit of government to authorize pension or retirement benefit increases and a 2/3 vote to override a gubernatorial veto. Under current law, it takes a simple majority vote in the House and Senate to

increase pension and retirement benefits (including medical benefits) for workers and a 3/5 majority to override the governor. This change would impact both state government and local units of government, such as school districts, cities, and counties. MICHIGAN: Two bills that would transform Blue Cross Blue Shield of Michigan (BCBSM) into a nonprofit mutual disability insurance company owned by policyholders and regulated by the same rules that govern other insurers under the ACA are moving quickly. The Senate passed amendments to the original bills on October 17, and hearings will take place in the House November 13-19. The administration wants the House to act before year-end. Proposed by the governor in early September, the bills would end BCBSMs status as the states insurer of last resort and be operated under a separate statute allowing both the attorney general and Insurance Department to oversee their operations. As part of the governors proposal, BCBSM would be required to make a contribution of $1.5 billion over a period of 18 years to the health of Michigans people. The bills are of great concern to consumer groups, the Attorney Generals Office and insurers. With BCBSM maintaining 70 percent market-share, Aetna is working to ensure the final law includes a ban on the use of "most-favored nation" clauses in provider contracts to help make the market more competitive. NEW HAMPSHIRE: The Department of Insurance brought

together health plans last week to discuss issues related to ACA implementation and informed them that the state does not intend to make a declaration to HHS by the November 16 deadline regarding a federal-state exchange partnership. The DOI also reviewed other areas of the law that require state and federal law to be aligned. The Department intends to submit legislation for the 2013 legislative session to implement ACA market reform provisions related to rating changes, open enrollment and conformance with essential health benefits categories of coverage. VERMONT: In a memo issued last week to over 2,100 state employees, Governor Peter Shumlin is encouraging employees to enroll their children in the states CHIP program and to drop them from their state employee health plan coverage. The state has estimated that if half of the eligible employees took this option, the state would save a minimum of $5 million. Vermont is not the only state encouraging state employees to enroll their children in CHIP to garner the higher reimbursement rates. The health insurance exchange model being built will be the only place where individuals and small businesses will be able to acquire health insurance starting in 2014. Resources Health Reform Connection America's Health Insurance Plans Aetna 2011 Annual Report

Storm Sandy to severely affect housing market say experts

The U.S. real estate recovery thats gained strength this year faces a setback from flooding and property damage inflicted by Hurricane Sandy, the biggest tropical gale to hit the Atlantic seaboard. The storm battered homes in Eastern coastal states that account for about one out of every five U.S. real estate sales and threatened inland areas with flooding and blackouts. Lenders put transactions on hold and companies like Coastline Realty in Cape May, New Jersey, pulled in their for-sale signs to prevent the wind from turning them into projectiles. Well definitely see lower numbers in new sales and new applications, said David Stevens, president of the Mortgage Bankers Association. We do expect to see lenders put a freeze on properties across the northeast on the shoreline until they can be inspected and assessed for damages. Sandy, about 1,000 miles wide, prompted warnings of life- threatening storm surges from Virginia to Massachusetts, emptied the streets of the nations largest cities, paralyzed mass- transit systems and lashed the area with gales, rain and even snow. U.S. airlines grounded 9,500 flights, U.S. stock trading is closed through today in the first back-to-back shutdowns for weather since 1888. Losses may total as much as $20 billion, with $5 billion to $10 billion of that insured, according to Eqecat Inc., an Oakland, California-based provider of catastrophic risk models. Property Damage Almost $88 billion of homes in seven states are at risk of damage, according to a report by CoreLogic Inc., a mortgage software and data firm in Irvine, California. New York has $35.1 billion of property in harms way, New Jersey has $22.6 billion, Virginia has $11.3 billion, and Massachusetts has $7.8 billion. Maryland, Delaware and Pennsylvania have a combined $11 billion of property at risk, CoreLogic said. A fire tore through more than 50 homes in a Queens beach community that suffered heavy flooding, the New York Times reported. On 57th Street in Manhattan, a crane on a 90-story residential building under construction partially collapsed and was dangling over the street. The storm has accounted for 16 deaths, according to the Associated Press.

By Kathleen M. Howley, John Gittelsohn, and Heather Perlberg Bloomberg News

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UPCOMING EVENTS |
NOVEMBER 12 IMG CUP Sun Country PGa Golf Tournament Painted Dunes Golf Course NOVEMBER 14 BOaRD MEETING 12 Noon EPaB Office DECEMBER 6 EPaB GaLa INSTaLLaTION aND aWaRDS BaNQUET El Paso Country Club

SODA SPONSOR
Thanks to our OCTOBER SODA SPONSOR: Del Rio Engineering

RENEWALS |
Bella Homes Boise Cascade Carpet Warehouse Cimmaron Mortgage Capital CMf Enterprises Jack White Building Specialties JB Laminates Loretta Blankenship McCoys Building Supplies Mountain Vista Realty Pointe Homes/Lupo Development Corp. Stewart Title Guaranty Sun City Spray foam The Heritage Group Time Warner Cable Tropicana Homes Tropicana Properties Villagi Homes LLC

Association names upcoming Board and Officers for 2013

The El Paso association of Builders announced the slate of directors and officers for 2013. In announcing the nominations President frank arroyos praised the selection and offered encouragement to the members. as my term comes to an end soon as with any outgoing President the responsibility of placing new board members is of paramount concern. The executive nominations committee has taken this task to heart and is recommending an excellent crop of new board members and endorsing those who have another year left on their term, arroyos explained. We are particularly proud that we have not run into the problem that has plagued other local and state groups of having to recycle presidents because no new candidate stepped up, he continued. We are very proud to have Edgar Montiel step up and offer his leadership, frank continued. The nominations committee has proposed Edgar Montiel from Palo Verde Homes as the next member on the executive ladder. Edgar will serve as Secretary Treasurer for the Edmundo Dena administration. frank Torres from GMf Homes will serve as Vice President. Current President frank arroyos announced that his business will take him into South Texas more this coming year and he will not be able to fully serve as immediate Past President. Greg Bowling, currently serving that capacity will continue for one more year. The following is the list of candidates that will be voted on this November and will be installed on December 6 at the El Paso Country Club. Tickets for the installation are on sale now. Proposed 2013 El Paso Association of Builders Board of Directors and Officers are as follows: Executive Board 2013 President: Edmundo Dena, (accent Homes) Vice President: frank Torres (GMf Homes) Immediate Past President: Greg Bowling (Tropicana Homes) associates Chair: Sam Shallenberger (Western Wholesale Supply, Inc.) Sec/Treasurer: Edgar Montiel Executive Officer: Ray adauto Board of Directors Juanita Garcia (Icon Custom Homes) Samira Gonzalez (Edwards Homes) Walter Lujan (Dawco Construction) * Carlos Villalobos (Pointe Homes) * Don Rassette (Rassette Homes) * Beverly Clevenger (automated Division 6) * frank Spencer (aztec Contractors) * Kathy Parry (Hunt Communities) * Sal Masoud (Del Rio) Edgar Garcia (Bella Vista Custom Homes) * Robert L. foster (South West Land)* Leti Navarette (Custom Dream Homes) * Linda Troncoso (TR-Engineering) Lance VanDeman (JDW) * John Chaney (Passage Supply) Joe Bernal (Bernal Insurance) Ken Wade (El Paso Building Materials) Ruben Orquiz (MTI Ready Mix) Kathy Carrillo (Pioneer Bank) * Henry Tinajero (Bank of the West) Paul Zacour (Zacour & assoc.) Chuck Gabriel (Carpets West)* Ted Escobedo (Snappy Publishing)* Womens Council: Lorraine Huit (Cardel Design) Green Council: Javier Ruiz (Senercon) *indicates new 2 year term

11395 James Watt, Suite A-11 79936 915-633-8002

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Associates move forward and support EPAB

One thing about our Associate members that really impresses me is the support they give to the association. Throughout the history of the Association weve had members who really take on the responsibility of helping events, sponsoring or advertising with the association. Such is the case with the Pro Am golf tournament. I want to thank all of you that have given us support this year. It hasnt been easy and sometimes it appears that we are always asking for something. Truth of the matter is that nowhere else can you as a supplier, vendor or builder member do more to ensure that our message gets out. That message is about new home construction and its importance to the local economy. We as a trade group provide jobs, provide a great tax base for government and provide for so many families. We have this association to remind the public and politicians of that. So next time we ask you to participate step up like those fellow members who youll see advertising or playing in our Pro Am. These are folks who take membership to that next level. Thank you all for doing so.

Sam Shallenberger
Western Wholesale Supply

Jaimes
Courier Service,Inc.
915-549-4533 or 915-478-2404
Bonded, insured for your peace of mind.

Showroom: 2131 Missouri

915 533 6045 fax 533 6096

Thomas R. Brown, Owner

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www.elpasobuilders.com www.epbuilders.org
6046 Surety Dr. El Paso, TX 79905 915-778-5387 Fax: 915-772-3038
I execuTive oFFicerS Frank Arroyos - President Cisco Homes edmundo Dena - vice President Accent Homes Frank Torres - Secretary/Treasurer GMF Custom Homes Sam Shallenberger - Associates council Western Wholesale Supply Greg Bowling - immediate Past President Tropicana Homes ray Adauto - executive vice President El Paso Association of Builders I TABSTATe DirecTorS Doug Borrett, Karam Co., Life Director Randy Bowling, Tropicana Homes I NATioNAL DirecTorS Bobby Bowling IV. Demetrio Jimenez

NATioNAL ASSociATioN oF Home BuiLDerS (800) 368-5242 TexAS ASSociATioN oF

I couNciL/commiTTeecHAirS Affordable Builders council Bobby Bowling IV Associates council Sam Shallenberger Build PAc Randy Bowling Desert Green Building council Javier Ruiz industry Promotions Greg Bowling Land use council Vacant Young Designer Award John Chaney remodelers council Rudy Guel membership Drive Mike Santamaria Finance committee Kathy Carrillo education committee Frank Spencer I ADviSorYToTHeBoArD J. Crawford Kerr, Attorney, Firth, Johnston & Martinez I BoArDoFDirecTorS Joe Bernal, Joe Bernal Insurance Doug Borrett, Karam Co. Kathy Carrillo, Pioneer Bank John Chaney, Passage Supply Sergio Cuartas, BIC Homes Ted Escobedo,Snappy Publishing Art Garcia, El Paso Door Juanita Garcia, ICON Custom Home Builders,LLC Samira Gonzalez, Edwards Homes Lorraine Huit, Cardel Design Group Walter Lujan, Dawco Home Builders Sal Masoud, Del Rio Engineering Bruce Meyer, JDW Insurance Edgar Montiel, Palo Verde Homes Kathy Parry, Hunt Communities Javier Ruiz, Senercon & Border Solar Frank Spencer, Aztec Contractors Henry Tinajero, WestStar Bank Linda Troncoso, TRE & Associates Ken Wade, El Paso Building Materials Paul Zacour, Zacour & Associates

BuiLDerS (800)252-3625

2011 Builder member of The Year Greg Bowling Tropicana Homes 20110 Pat cox Award Kathy Parry Hunt Communities 2011 Associate of The Year Sam Shallenberger Western Wholesale Supply John Schatzman Award Bob Bowling III Tropicana Homes ePAB SpecialAward Rudy Guel Guel Construction

Honorary Life members Brad Roe Cliff Anthes Wayne Grinnell Chester Lovelady Don Henderson Anna Gil

Past Presidents committed to Serve Kelly Sorenson Mark Dyer Mike Santamaria John Cullers Randy Bowling Doug Schwartz Robert Baeza Bobby Bowling, IV Rudy Guel Anna Gil Bradley Roe Bob Bowling, III E. H. Baeza Hershel Stringfield

ePAB mission Statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization. 2012 Builders Outlook is published and distributed for the El Paso Association of Builders by Snappy Publishing 240 Thunderbird Suite C El Paso Texas 79912 915-820-2800