Decision to Stay Put Fuels Home Makeovers

The remodeling industry in Northern Kentucky shows signs of steady growth with a comeback from the economic downturn well under way.

New home construction may not be as robust, but there are indications it, too, is gearing up for sustained growth.

Those are some of the trends so far this year, according to the Home Builders Association of Northern Kentucky, the eighth largest home builders trade group in the country, with 1,100 members representing some 15,000 workers in 12 counties.

“We are starting to see real glimmers of hope,” says Brian Miller, the HBA executive vice president. “Especially in remodeling. We have seen a trend for the last year that it is coming back.”

Building Permits Up

For example, Miller cites figures from August of this year showing the month had the highest level of building permit applications in 10 years. They totaled 187 permits averaging $17,000 per project over eight counties in Northern Kentucky.

The news for new homes starts in Northern Kentucky is not as vigorous, but Miller thinks the trend has turned upward to stay. He notes there were more residential home building permits in July and August than in the summer of 2010. He says the numbers are especially good for multi-unit and condominium permits.

Miller cites several reasons for what has been a growing remodeling industry in Northern Kentucky. In some ways, remodeling has remained steady because the home building and real estate markets have been flat:

• People are choosing to change the house they are in, rather than moving to another one, because of concerns they can’t sell their current home.

• Lines of credit are becoming more available. “We have again seen lines of credit opening up that are around the $75,000 to $100,000 range,” Miller says.

• Remodeling has been a steady slow burn business because people are phasing in projects. The tentative economy means people aren’t pulling the trigger on massive undertakings. As Miller puts it: “Rather than do a huge addition, people may do a master suite one year, a kitchen the next and a basement the next year. They are saying, ‘If things are OK this year, we’ll do this.’”

• There are indications baby boomers are choosing to stay in their homes in the communities they love.

Builders and contractors who follow long-range trends know that ultimately remodeling follows lifestyles. While the economy can dictate the scale of projects, remodeling is driven by life’s changes. “People have children, they get a job, they lose a job. They retire,” says Miller. “As people’s lives change, their living needs change.”

Registered Remodelers

The Northern Kentucky Home Builders Association has positioned itself over the years to not only look after the needs of its own members, but to be a consumer service as well.

HBA’s Registered Remodeler and Registered Builder programs give customers a reliable list of craftspeople and contractors who have the organization’s stamp of
approval for doing quality work.

“It is one of the best and most revered programs in the country,” Miller says. “This is not something you can just put on your signage by writing a check for membership. Registered Remodelers have to follow a rigorous application process.”

Among the requirements, remodelers must carry a minimum amount of workers compensation and liability insurance, pass credit checks, complete a certain number of hours of continuing education each year and agree to a conciliation process for disputes. In the end, a peer review committee must approve an application.

“Our membership goes out and looks at projects and the level of workmanship. They contact customers directly,” Miller says. “There must be a 100 percent passing grade. In the end, the Registered Remodelers are the cream of the crop in our community.”

Currently 46 companies have earned the Registered Remodeler designation; some 70 have been named Registered Builders.

Miller is also proud of the HBA’s dispute resolution process, which includes peer review when a complaint is filed. Skeptics might wonder why a consumer would seek a remedy from a group that represents the builders. But Miller says the program has worked to the consumer’s advantage, “since builders have a stake in maintaining the integrity of our industry.”

“There has been great acceptance of the program,” he says. “I can think of only one case where a person wasn’t satisfied and went outside. It has been a benefit to consumers and saves them attorney and court costs.”

The HBA also holds monthly meetings to share ideas on new technologies or tools. It is one of the nation’s few home builder associations that runs its own continuing education program for apprentices with courses in carpentry, HVAC, electrical and facilities maintenance.

“Members can send employees here at a discount rate to become licensed apprentices on their way to a journeyman’s certificate,” Miller says.

Miller himself is following in the family business.

A Villa Hills native, Miller’s father was a past president of the state home builders group and his mother was a president of the women’s council of the National Association of Home Builders. Miller has worked home construction as a laborer and was a real estate agent. He worked in Louisville with the HBA before moving back to Northern Kentucky two years ago.

As for the recovery of the home building market, Miller says observers know it’s no secret that there is pent- up demand because of the recession.

The question becomes how quickly will that manifest itself in the housing market.

“We believe there are 3,000-4,000 home starts in Northern Kentucky that never happened given the population growth. When the demand comes back into the market, will it come back slowly or all at once? I don’t think anybody really knows. Most economists say slow, steady growth. I think we will get back to a realistic number in two or three years.”