A move to broaden home ownership opportunities for moderate-income families, the declining stock of rental housing, pessimism about home construction in 1979 and a federal warning about shoddy construction were among the concerns of homebuilders meeting here this week.
With two years of high production and strong sales behing them, the 60,000 builders and others attending a convention at this desert resort city were hearing predictions of a slowdown.
Housing and Urban Development Secretary Patricia Roberts Harris told members of the National Association of Home Builders that housing starts may decline to about 1.7 million this year, down from 2 million in 1978. Vondal Gravlee, the NAHB's new president, said he feared starts could decline to 1.5 million.
As an alternative, Gravless said his organization will urge Congress to broaded the Federal Housing Administration's graduated mortgage payment plan to enable 8 million more medium-income households to buy houses. He is calling for a plan that allows lower down payments and lower monthly payments in the first 15 years of a mortgage loan period.
Industry forecasts indicate that only 160,000 privately built apartment units will be begun this year. Investors are reluctant to build rental projects because they feel that, to turn a profit, rents of at least $400 a month are required for a one-bedroom unit, the forecasters said.
Prospects for slight returns on in vestments -- in the face of high borrowing rates and rent control -- are given as reasons for the marked decline in apartment construction in recent years.
In fact, the prospecxts for apartments appear so grim that New York housing consultant Uriel Manheim predicted that by 1999, most of the nation's private rental units will be condominiums leased out by individual owners. The trend to condominium conversion is expected to increase in the nation's cities.
In addition, construction of federally subsidized apartments is being trimmed in the new Carter budget, to a level of 300,000 units. The homebuilders plan to pressure Congress to raise the level to 400,000, for not since 1972 has the number of annual subsidized starts reached 500,000.
While a slowdown in housing construction could dampen some of the cost of materials, builders are also facing new pressures to offer broader protection against defects in the houses they build.
Federal Trade Commissioner Elizabeth Hanford Dole warned that unless more builders offer warranties such as those administered by the NAHB-affiliated Home Owners Warranty (HOW) program, the FTC will institute federal protection for buyers. Buyer complaints about shoddy home construction have been increasing, she said.
NAHB President Gravlee, who builds houses in Alabama, said most builders are against all regullations. While some builders meeting here dismissed Dole's ultimatum as an idle threat, Gravlee said the industry will respond by continuing to broaden HOW coverage.
About a fourth of the houses built this year are expected to have HOW coverage. Dole said surveys show that most buyers of new homes want warranties but only 22 percent of the builders offer them.
The HOW plan is a 10-year warranty against major structural defects. Builders in the program qualify on the basis of technical competence, financial soundness and good records for customer service. HOW tries to keep disputes out of the courts by settling them informally.