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Nation's Home Builders Convene in Dallas

January 25, 1987|DAVID M. KINCHEN | Times Staff Writer

DALLAS — With little economic news to concern most of the nation's builders, the 43rd annual convention of the National Assn. of Home Builders here became a forum for the 1988 presidential race.

Three leading contenders for the Republican nomination, Vice President George Bush, Rep. Jack Kemp (R-N.Y.) and Sen. Robert Dole (R-Kan.), addressed the convention.

Bush spoke at last Sunday's board of directors meeting, while Kemp and Dole addressed the builder group's influential political action committee.

Kemp and Dole differed sharply on the retention of Federal Reserve Chairman Paul Volcker, whose term expires Aug. 6: Kemp wouldn't reappoint him when his term expires, while Dole termed Volcker's performance outstanding.

Kemp said in response to a question at a press conference that he would set a goal of 2.2 million housing starts a year in the nation (there were about 1.8 million last year), and would strive to bring down the Federal Housing Administration and Veterans Administration interest rates to the 6% to 7% range. There is no reason why interest rates should be as high as they are, given the low rate of inflation, Kemp said.

Bush, addressing about 5,000 builders, mentioned housing only in passing as he called for a return to traditional values and ethics in the nation in place of an emphasis on amassing wealth and material goods.

Bush defended President Reagan's handling of the Iran/ contra scandal, saying that Reagan has been forthright in his handling of the situation.

There was unanimity at the convention about the housing outlook for 1987.

Virtually everyone predicted 1.6 million housing starts, interest rates declining in the first half of the year and rising slightly in the second half, an ample supply of mortgage money and a decline in the number of apartment starts.

Opposes 'Privatization'

Housing Secretary Samuel R. Pierce Jr. reiterated his view that the FHA should stay as it is, rather than being "privatized" or sold to the private sector. This stand was strongly supported by the NAHB, which has been at odds with the Reagan Administration over housing priorities since 1981.

Pierce, after being questioned at a press conference by Doris L. Muir, publisher of the Log Home Guide, agreed to have the FHA examine energy standards for log homes. Muir, who first raised the issue two years ago when the association convened in Houston, claims that the FHA discriminates against log home construction in its minimum property standards.

The standards are widely used by lending institutions in determining whether to finance houses.

Now that the so-called tax reform bill is law, builders have turned their attention to formulating a national housing policy in conjunction with other trade associations.

Joint Policy Sought

The new NAHB president, James M. Fischer Jr. of Nashville, Tenn., told a news conference that he will meet with mortgage bankers, realtors, contractors and other groups to arrive at a joint policy statement later this year.

Fischer said he is a friend of Thomas M. French Jr., president of the Mortgage Bankers Assn. of America, a relationship that he hopes will help the builders arrive at a consensus with other housing groups.

French told the builders that the fiscal year 1988 federal budget directed at federal housing credit agencies is a punitive document that seeks to increase public profit by imposing a housing tax on veterans and moderate-income home buyers.

Young Homeowners

He singled out a proposal to bar the financing of closing costs on FHA-insured mortgages. This, he said, would require home buyers using FHA financing to pay an additional $1,400 up front in cash.

French said that proposals like this are contributing to a decline in the nation's home ownership rate, especially among those in the 30 to 34 age group. The percentage of those in this age group owning a home has declined from 62% in 1975 to 53% in 1985, he said.

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