Adapting to the market
Clark County’s homebuilders group shrinks as the industry it represents struggles in down economy
Sunday, May 22, 2011
The Building Industry Association of Clark County, once one of the community’s premier business groups, is now struggling to overcome challenges that mirror those of the homebuilders it represents.
And like many builders, it could take the BIA a while to shore up its finances and face the future with confidence.
Building Industry Association of Clark County
MEMBERSHIP: 700 members, down 36.4 percent from a peak of more than 1,100 members in 2006.
TOTAL REVENUE: Reported $873,951 to the IRS in 2009, down 41.7 percent from $1.5 million in 2008.
STAFF: Four employees, down 60 percent from 10 employees in 2009.
The Vancouver-based group has had to slash costs and staff in an effort to recover from a 36.4 percent drop in membership, down to 700 companies and individuals from its high of more than 1,100 in 2006. With fewer members to pay annual fees, revenue dropped 41.7 percent to $873,951 in 2009, down from $1.5 million in 2008, according to the BIA’s 2009 federal income tax statement.
Paid staff has dwindled to four employees, down from 10 in 2009.
Clark County’s surplus of foreclosures and sluggish home sales continue to soften demand for new houses, adding pressure on homebuilders, who are already struggling to keep their heads above water, said Tracy Doriot, who sits on the building group’s 25-member board as past president.
“If we continue to have a hard time, essentially, the BIA will continue to shed overhead,” said Doriot, owner of Washougal-based Doriot Construction, a small custom home builder.
Those in other private businesses sectors might say, “Welcome to the club.”
Staff cuts, tough budget decisions and reorganization are all management basics of an economic slump. However, such measures also provide the chance to retool and “think outside the box,” said Avaly Mobbs, the BIA’s executive director since 2009.
Mobbs said hard times make the BIA services more important than ever.
“For instance, we offer a group health insurance program,” a good buy for many of the BIA’s small business members, Mobbs said.
Membership also gives local companies an automatic affiliation with the state and national builders groups.
“They can take part in a national purchasing program through the (National Association of Home Builders),” which gives builders a 2 percent discount on building supplies, Mobbs said.
“It helps, because everyone’s looking at their budgets these days,” she added.
Sagging home sales aren’t the only challenge to the BIA’s membership growth.
As work shifts, some builders are moving to a local trade group that offers a broader base of projects.
In some cases, builders, such as Matt Tapani of Battle Ground-based Inland Co., have quit the BIA and joined a competing organization, the 200-member Southwest Washington General Contractors Association.
“We switched because I was disappointed,” said Tapani, president and owner of the excavation business that prepares sites for commercial and residential projects.
He was frustrated that BIA was providing fewer services at a time when it was cutting staff, he said.
Tapani said he joined the commercial contractors group primarily for the association-operated plan center at 7017 N.E. Highway 99 in Vancouver, which helps members bid on upcoming regional projects by providing development blueprints. Others said they’ve simply switched groups to stay on top of today’s construction trends.
In the first four months of 2011, new housing starts were down 58.4 percent compared with the same period in 2010, as measured by 94 permits issued this year to build single-family homes in unincorporated Clark County. By comparison, permits for commercial projects to build roads, schools, offices, stores and industrial sites held relatively steady, dropping just 5.6 percent in the January to April period, compared to the same four months of 2010, reported the county’s community development department.
The rising commercial market was part of the impetus behind Portland-based Assurety NW Insurance & Bonding’s move to join the contractors association in May.
“The timing seemed right,” said Kevin Nilson, a representative of the company, which sells bond insurance plans to construction businesses.
“We belong to a lot of different associations and chambers,” Nilson said. “It’s the way we grow our business and support the local communities.”
Several of Southwest Washington Contractors Association’s members work in both residential and commercial markets, said Mike Bomar, executive director of the organization.
Bomar said that he expects the commercial industry to experience a shorter recovery period.
“We’re anticipating more jobs coming up,” he said. “We had the stimulus funds directed toward road projects and other things that couldn’t happen on the residential side.”
A state homebuilding leader said the local BIA’s membership losses are no different from chapters throughout Washington.
“What’s happening (to the BIA) in Clark County is similar to what’s being experienced at others throughout Western Washington, although its better on the east side, and the Tri-Cities has been strong,” said Art Castle, interim executive vice president of the state group, the Building Industry Association of Washington.
The housing market in the Tri-Cities is fueled by increasing employment at the nearby Hanford Nuclear Reservation’s cleanup site, Castle said.
By contrast, Clark County’s unemployment rate remains one of the highest in the state, at a lofty 12.9 percent in February. It has kept potential home buyers wary of jumping into the market.
Castle said homebuying is out of reach for many consumers due to high jobless rates.
“If employment comes back again, then they can move out of their parents’ house,” he said, adding that it could take several years before the housing market is healthy again.
In the meantime, Mobbs said her group would continue marketing ideas and newly constructed homes through its signature Parade of Homes event. This year, the event will be July 22 through Aug. 7, with six custom houses in Vancouver’s Felida-area Moongate subdivision.
The project will feature the work of five local homebuilders, showcasing elegant, upscale houses starting at $500,000. So far, two out of six homes have sold, which Mobbs cited as evidence that local homebuilders can be successful even during hard times.
“These are guys that have proven they’re not only surviving, but thriving,” she said.