Builders

Outlook

www.elpasobuilders.com

Markets in 146 of the

approximately 340 metro areas
nationwide returned to or
exceeded their last normal levels
of economic and housing activity
in the second quarter of 2016,
according to the NAHB/First
American Leading Markets Index
(LMI) released today. This
represents a year-over-year net
gain of 66 markets.
The indexs nationwide score
ticked up to .97, meaning that
based on current permit, price and
employment data, the nationwide
average is running at 97% of
normal economic and housing
activity. Meanwhile, 91% of
markets have shown an
improvement year over year.
This gradual uptick is in line
with NAHBs forecast for a slow
but steady recovery of the housing
market, said NAHB Chairman Ed
Brady. With a strengthening
economy, solid job growth and low
mortgage interest rates, the
market should continue on an
upward trajectory throughout the
rest of the year.
Among the LMI components,
house prices are making the most
far-reaching progress, with almost
97% of markets having returned to
or exceeded their last normal
levels. Meanwhile, 78 metros
have reached or exceeded normal
employment activity, said NAHB
Chief Economist Robert Dietz.
Single-family permits have edged
up to 50% of normal activity, but
remain the sluggish element of the
index.
More than 85 percent of all
metros saw their Leading Markets
Index rise over the quarter, a
signal that the overall housing
market continues to move

New Home Sales

Climb to Highest
Level Since
October 2007

National, State & Local Building Industry News

2016: Issue 8

Housing Markets
Continue Gradual Climb

More than 85 percent of all metros saw their Leading

Markets Index rise over the quarter, a signal that the
overall housing market continues to move forward,

forward, said Kurt Pfotenhauer,

vice chairman of First American
Title Insurance Company, which
co-sponsors the LMI report.
Baton Rouge, La., continues to
top the list of major metros on the
LMI, with a score of 1.61 or 61%
better than its last normal market
level. Other major metros leading
the list include Austin, Texas;
Honolulu; and San Jose, Calif.
Rounding out the top 10 are
Houston; Provo, Utah; Spokane,
Wash.; Nashville, Tenn.; Los
Angeles; and Oklahoma City.
Among smaller metros, both
Odessa and Midland, Texas, have

LMI scores of 2.0 or better,

meaning that their markets are
now at double their strength prior
to the recession. Also at the top of
that group are Manhattan,
Kansas; Walla Walla, Wash.; and
Grand Forks, N.D.; respectively.
The LMI examines metro areas
to identify those that are now
approaching and exceeding their
previous normal levels of
economic and housing activity.
Approximately 340 metro areas
are scored by taking their average
permit, price and employment
levels for the past 12 months and
dividing each by their annual

average over the last period of

normal growth. For single-family
permits and home prices, 20002003 is used as the last normal
period, and for employment, 2007
is the base comparison. The three
components are then averaged to
provide an overall score for each
market; a national score is
calculated based on national
measures of the three metrics. An
index value above one indicates
that a market has advanced
beyond its previous normal level
of economic activity.

Sales of newly built, single-family

homes rose 12.4 percent in July from
a downwardly revised June reading to
a seasonally adjusted annual rate of
654,000 units, according to newly
released data by the U.S. Department
of Housing and Urban Development
and the U.S. Census Bureau. This is
the highest reading in almost nine
years.
This rise in new home sales is
consistent with our builders reports
that market conditions have been

improving, said NAHB Chairman Ed

Brady, a home builder and developer
from Bloomington, Ill. As existing
home inventory remains flat, we
should see more consumers turning
to new construction.
Julys positive report shows there
is a need for new single-family
homes, buoyed by increased
household formation, job gains and
attractive mortgage rates, said NAHB
Chief Economist Robert Dietz. This
uptick in demand should translate into

increased housing production

throughout 2016 and into next year.
The inventory of new homes for
sale was 233,000 in July, which is a
4.3-month supply at the current sales
pace. The median sales price of new
houses sold was $294,600.
Regionally, new home sales rose
by 40 percent in the Northeast, 18.1
percent in the South, and 1.2 percent
in the Midwest. Sales remained
unchanged in the West.

Builders Outlook

DESIGN WITH NATURAL GAS IN MIND.

Nothing is more attractive to homebuyers than the right mix of comfort and value. You can
provide both when you build homes that have natural gas.
Natural gas furnaces, water heaters and clothes dryers offer greater efficiency and lower
operating costs than their electric counterparts, and natural gas kitchens sell themselves.
Let us help you plan for natural gas right from the start.
For more information:
ElPasoNewBusiness@TXGas.com
William Nieves: 915-496-6126
Jorge Sejera: 915-680-7216

2016 issue 8

2016 issue 8

Builders Outlook

Presidents
Message
Carlos
Villalobos

President,
El Paso Association
of Builders

Energy Code implementation begins

Big news in the builder world is the
implementation of the 2015 Energy
Code for housing permits submitted
on or after September 1st 2016. We
had been running on 2009 Energy
Code Standards for a while since we
altogether skipped the 2012 Energy
Code Implementation, so now we
need to pole vault our way to the
2015.
There are many ways to achieve
the new required standard, and it
will be up to each of us to come up
with ways to comply. The sky is the
limit as there are so many
combinations of products and
construction methods out there can
be used to improve a homes
performance, the scary thing is,
however, that the time for test runs
is over and a home will not be
eligible for a Certificate of
Occupancy if it does not meet the
new Energy Code Standards.
The fact that our median home
price in El Paso hovers around
$153,900 (according to Zillow)
makes it especially challenging for
us given that most of the required

changes are pretty costly. Builders

that were building their houses at
the 2009 standard might see a price
increase of at least $3,000 per
home, maybe even more. In a 30
year amortization at 4.5%, this
roughly translates to a $15 increase
in the monthly payment of a home.
Fortunately, the energy savings
should more than offset this, the
problem, especially for us in El
Paso, will be getting people to
qualify and appraisers to understand
the new normal. But there is no way
around it, it is real and it is here.
Another challenge that well be
facing is the lack of energy rating
companies, since all houses will
now require duct leakage and
blower door tests, we can only hope
that our current raters will be able to
absorb the workload.
All in all the new code aims at
making houses at least 35% more
energy efficient than the previous
code. So one must look at the bright
side and figure it is good for
consumers, it will reduce energy
consumption (and thus energy

dependence) and it is also great for

the environment, so we might as
well embrace it because we have no
other choice.
Last but not least, one has to
conclude that even though it will
increase new home prices, it will
definitely
make
them
more
competitive against resales, which
quite frankly have been kicking our
butts in the last couple of years,
almost at a 2 to 1 ratio. As we move
into this new era, it will be equally
important to educate our sales
teams as well as our customers
about the energy saving benefits
they will see reflected in their
monthly electricity and gas bills if
they buy new. So it is up to us to
raise awareness in our community
on this very important issue. Lets
keep building El Paso.

Local student wins national

poster contest scholarship
What does home building mean to you? If
you are a kid, NAHB wants to know.
So thats how it started for Cesar A.
Cervantes, the son of El Paso Association
of Builders member Antonio Cervantes of
BIC Homes. Cesar wanted to enter the
contest and thought he could showcase
exactly what it meant to him. The rules
were laid out by the National Association of
Builders (NAHB). The contest was asking
the children and grandchildren of home
builders, remodelers, developers, trade
partners and anyone else involved in this
great industry to design a poster that
shows what Mom or Dads job means to
them. We know youre making an impact in
your communities through the great work
you do in housing, and were sure your
kids know that too. Whether they are part
of our business or just in our hearts, home

building is about family. Lets capture the

great work our craftsmen and innovators
do through the eyes of our children (12 or
younger) to design a poster with the words
We Are NAHB. Welcome Home.
Judges voted on the submissions, and out
of the submissions Cesar won the grand
prize of a $1000 scholarship. In addition
the EPAB was awarded $1000. NAHB will
share this winning poster with other Home
Builders Associations across the country to
use in their recruitment efforts.
In commenting about his sons winning
entry Antonio beamed like the proud father
he is. Im very happy that Cesar won and
so glad to have his poster be used around
the country to help the NAHB and local
associations recruit new members. After
all we are really an important part of the
American Dream, Cervantes said.

Builders Outlook 2016

Executives
Message

Issue 8

Vietnam Vets honored

Ray Adauto,
Executive
Vice President
EPAB
At last, a fitting welcome HOME
I wish this column didnt need to be
written but it does. The pain that has
been felt by my generation has just been
rekindled but with a different flame. Im
talking about the long overdue welcome
home to our Vietnam Vets, a reality check
for the decades of feelings kept inside so
many for way too long. For those of you
too young to remember Vietnam Im here
as a witness of what the USA was going
through and the demands put on the
youth of that time whether you were for
the war or against it.
The politics of the time brought with its
ugliness a war that frankly cost too much,
way too much in suffering and death on
all sides. It made heroes out of the
ordinary men and women, while making
money for the war machine. It caused
mothers to bury their sons and daughters,
and for families to cope with what we now
call PTSD. It caused the premature
death of many especially those who came
in contact with Agent Orange or an
enemy or friendly bullet. It caused death
on Americas campuses, and
imprisonment for dissenters. It gave

power to others and it caused power to

be taken away. It murdered a President
and then his brother, shut down the
mouth of a preacher who more than
anything wanted a peaceful end to the
war and racism. It brought with it a
movement I saw firsthand while visiting
San Francisco during my high school
years. It polarized positions on all sides.
The mighty fell as politician after politician
came tumbling off the highest seats in the
country. It affected music, movies,
television and newsprint. It was the first
war to come directly into the living rooms
of the average Joe. The sights and smells
must have been terrible while there, but
no one knew for sure if they would be
coming home whole, or at all. It also

gave rise to an ugliness against those

who served, leaving scares deep into
their soul and into the soul of the country.
It made heroes out of ordinary men, like
two of them I consider true American
heroes, both of them friends. One hung
out a Huey until it was shot down. It
earned him medals and accolades much
to his surprise. After all how could a kid
from Canutillo be a hero? So too a friend
who because of his small body frame
became a tunnel rat, a soldier who was
told to crawl belly first into holes the
company would find in that dark and
damp jungle underground. He carried his
knife, a .45 and guts. He lives quietly
now right here in El Paso, but I think he
would be the first to say he wasnt a hero,

just did his job. I beg to differ.

And so we tried to say thank you in the
only way we know. We held a parade
and asked the survivors and their families
to march in in, ride in it, or stand on the
sidewalks to wave. Its a long time a
coming, and yet Im glad it did. To our
members and their families who served
either in the war zone or at home during
Viet Nam, God Bless you. Thank you.
From a civilian who feels guilt for not
being allowed to participate the emotions
of that time are also hidden deep inside.
At least now I can have a little less guilt
knowing that you have been officially
welcomed home.
Above Photos by Kelly Sorenson, more
can be found on page 9.

2016 issue 8

Builders Outlook

National
Builder News
Multifamily Uptick
Pushes Overall
Housing Starts Up

n Nationwide housing starts rose 2.1

percent in July to a seasonally
adjusted annual rate of 1.21 million
units, according to newly released data
from the U.S. Department of Housing
and Urban Development and the
Commerce Department. This is the
highest reading since February.
Multifamily housing was up 5 percent
to a seasonally adjusted annual rate of
441,000 units in July while singlefamily production edged up 0.5 percent
to 770,000 units.
New household formations are
upping the demand for rental housing,
which in turn is spurring the growth of
multifamily production, said NAHB
Chairman Ed Brady, a home builder
and developer from Bloomington, Ill.
Meanwhile, single-family housing
continues to hold firm.
Single-family starts, on a year-todate basis, are up 10.6 percent and
builders are cautiously optimistic about
market conditions, said NAHB Chief
Economist Robert Dietz. However, the
permit trends indicate that supply-side

headwinds, such as shortages of lots

and labor, continue to affect the
housing sector.
Regionally in July, combined singleand multifamily starts increased in the
Northeast, Midwest and South, with
respective gains of 15.5 percent, 2.3
percent and 3.5 percent. The West
registered a 5.9 percent loss.
Overall permit issuance inched down
0.1 percent to a seasonally adjusted
annual rate of 1.15 million. Multifamily
permits increased 6.3 percent to a rate
of 441,000, while single-family permits
fell 3.7 percent to 711,000.
Permit issuance increased 10.5
percent in the Midwest and 2.6 percent
in the South. Meanwhile, the West and
Northeast posted respective losses of
8 percent and 10.2 percent.

Results Show 55+

Housing Market
Remains Positive

n Builder confidence in the singlefamily 55+ housing market remains in

positive territory in the second quarter
with a reading of 57, up one point from
the previous quarter, according to the

BUILDING

National Association of Home Builders'

(NAHB) 55+ Housing Market Index
(HMI) released today. This is the ninth
consecutive quarter with a reading
above 50.
Builders and developers for the 55+
housing sector continue to report
steady demand, said Jim Chapman,
chairman of NAHB's 55+ Housing
Industry Council and president of Jim
Chapman Homes LLC in Atlanta.
However, there are many places
around the country facing labor and lot
shortages, which are hindering
production.
There are separate 55+ HMIs for two
segments of the 55+ housing market:
single-family homes and multifamily
condominiums. Each 55+ HMI
measures builder sentiment based on
a survey that asks if current sales,
prospective buyer traffic and
anticipated six-month sales for that
market are good, fair or poor (high,
average or low for traffic). An index
number above 50 indicates that more
builders view conditions as good than
poor.
One of the three index components
of the 55+ single-family HMI posted an
increase from the previous quarter:
traffic of prospective buyers increased

El Pa
aso

four points to 42. Present sales held

steady at 61 while expected sales for
the next six months dropped two
points to 69.
The 55+ multifamily condo HMI
dipped one point to 47. The index
component for expected sales for the
next six months rose three points to
54, while present sales remained even
at 49 and traffic of prospective buyers
fell seven points to 38.
Three of the four indices tracking
production and demand of 55+
multifamily rentals decreased in the
fourth quarter. Present production fell
nine points to 51from a record-high
reading in the previous quarterwhile
current and future demand for existing
units both dipped one point to 68 and
67, respectively, and expected future
production rose three points to 56.
Much like the overall housing
market, this quarters 55+ HMI results
show that this segment continues its
gradual, steady recovery, said NAHB
Chief Economist Robert Dietz. A solid
labor market, combined with
historically low mortgage rates, are
enabling 55+ consumers to be able to
sell their homes at a favorable price
and buy or rent a home in a 55+
community.

SINCE 1950

Builders Outlook

The Future of
Housing
Home Building

BY ROBERT DIETZ

After increasing and leveling off in

recent years, new single-family
home size declined during the
second quarter of 2016. This change
marks a reversal of the trend that
had been in place as builders
focused on the higher end of the
market during the recovery. As the
entry-level market expands,
including growth for townhouses,
typical new home size is expected to
trend lower.
According to second quarter 2016
data from the Census Quarterly
Starts and Completions by Purpose
and Design and NAHB analysis,
median single-family square floor
area declined from 2,465 in the first
quarter to 2,392 square feet for the
second. Average (mean) square
footage for new single-family homes
fell from 2,658 to 2,616 square feet
for the second quarter.
On a less volatile one-year moving
average, the recent trend of declines
in new home size can be see on the
graph above, although current
readings remain elevated. Since
cycle lows (and on a one-year
moving average basis), the average
size of new single-family homes has

2016 Issue 8

New Single-Family Home Size

Declining

increased more than 11% to 2,649

square feet, while the median size
has increased 16% to 2,435 square
feet.
The post-recession increase in
single-family home size is consistent
with the historical pattern coming out
of recessions. Typical new home
size falls prior to and during a
recession as some home buyers
tighten budgets, and then sizes rise
as high-end homebuyers, who face
fewer credit constraints, return to the
housing market in relatively greater
proportions. This pattern was
exacerbated during the current
business cycle due to market
weakness among first-time
homebuyers. But the recent small
declines in size indicate that this part
of the cycle has ended and size
should trend lower as builders add
more entry-level homes into
inventory.
In contrast to single-family
patterns, new multifamily apartment
size is down compared to the prerecession period. This is due to the
weak for-sale multifamily market and
strength for rental demand.

For All Your Electrical Needs

Residential Specialists
Tract Homes Custom Homes
Total Customer
Satisfaction

915-208-9313
602-708-7560

2016 ISSUE 8

Builders Outlook

Bowling named president of Texas Affiliation of Affordable Housing Providers

The Texas
Affiliation of
Affordable
Housing
Providers
(TAAHP) has
elected Bobby
Bowling
president of the
organizations
board of
directors.
Bowling is a third generation
homebuilder in El Paso and one of the
citys top developers of affordable
housing. He has long been an
advocate of ensuring adequate access

to quality affordable housing for

Texans.
TAAHP is a recognized and
respected voice for affordable housing
providers at the state Capitol. The
nonprofit affiliation of developers and
other affordable housing providers
works to increase the supply and
quality of affordable housing for those
with limited income and special needs.
I am honored to be serving as the
president of TAAHP and to help guide
the organizations efforts as we
respond to the challenges of providing
affordable housing opportunities.
Bowling said. It is our goal to educate
state leaders and the public on the

importance of affordable housing to

our communities and our society.
Expanding quality affordable
housing opportunities increases
financial stability and economic
mobility among individuals and
families. It improves childrens school
performance and has been shown to
enhance the health of a population,
added Bowling.
Bowling is president of Tropicana
Building Corporation, one of El Pasos
oldest and largest home builders. The
company also manages about 3,000
affordable housing units and invests in
its communities by providing residents
with free GED and ESL classes.

Bowling graduated from the

University of Texas at Austin in 1992
with a BBA in Real Estate and Urban
Land Development. He is currently
chairman of the El Paso Civil Service
Commission and past president of the
Texas Association of Builders.
TAAHP was founded in 1997 and
represents housing industry
professionals involved in the financing,
design, development and management
of affordable housing communities in
Texas through public/private
partnerships.

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Builders Outlook
Issue 8
On the Scene

Parade
Wrap Up Lunch

An official wrap up meeting for the 2016

Parade of Homes was recently held at
Famous Daves for the builders and partners
of the Parade. The group was told of how
the Parade worked for them and revealed
that the success of the Parade was felt
beyond the site, Enchanted Hills. It seems
that all of us have had customers and
contracts for presales in our other
subdivisions from visitors to the Parade,
said Antonio Cervantes, President of BIC
Homes. As the builders sat down they
recounted tales of the days building the
Parade home, the struggles and some of the
rewards. All in all the Parade was deemed
a financial success for both the builders, the
partners and the association. Plans for the
2017 Parade of Homes are ongoing. We
hope to build on the success of this Parade
and move to a larger one in the coming year,
most probably on the eastside, said Ray
Adauto. Builders interested in the 2017
Parade should contact Ray to be placed on
the list.

August General
meeting

The August general membership meeting

was held at the Marriott Hotel and featured
a presentation by Sam Trimble of Lone Star
Title. His talk wasnt on the virtues of title
insurance or the need for due diligence.
Instead Trimble offered a quick class on how
a business could use video to enhance or
upgrade their messages to clients, or in our
case, to members. Sam started by saying
that he wasnt an expert in video messaging
but as his talk went on this was clearly not
the case. One of the very best ways to get
someone to pay attention to you is to be
different, in a good way, Trimble told the
group. He went on to share ideas with a
variety of applications and programs that
are simple to use and effective. I want
people to try it because youll find out
several things: first that people will actually
open up your emails; secondly that you can
get your message done in a minute, minute
and a half tops; and finally people can be
made to feel special because you can direct
that message directly to them, Trimble told
us. The El Paso Association of Builders has
taken that challenge and sending out video
messages and getting confirmation that
theyre being seen. I want to say thanks on
behalf of the membership and the
association to Sam for his timely and
important message to us, said President
Carlos Villalobos.

Parade

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stence. When she
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10

Lending How Private Mortgage Insurance

Cuts Real Estate Costs

The private mortgage

insurance industry is
doing well these days
and that's good news
for borrowers. The
major private
mortgage insurance
companies all
reported solid
second-quarter
profits and that's a
result borrowers
should celebrate.
By Peter G. Miller

Builders Outlook

ou might be wondering, why should

mortgage borrowers care about insurance
companies? The answer has a lot to do
with your ability to borrow cheaply.
When lenders originate mortgages, they
will readily finance borrowers with 20
percent down. The obvious problem is that
not every borrower has such cash. In June,
for example, the typical existing home sold
for $247,700 while the median price for a
new house was $306,700. Twenty percent
of these prices ranges from $49,540 to
$61,340. And don't forget closing costs
are extra.

If people really had to pay 20 percent up

front with each and every home purchase,
the real estate market would have no hope
of either solid sales or rising prices.
Fortunately, there is a way around the 20
percent barrier, the use of FHA, VA and
private mortgage insurance, what's
commonly called PMI.
By using a second-party insurance
program, lenders have less risk and when
lenders have less risk, financing is available
with less down and at a lower cost. As an
example, following the 2007 financial
meltdown, private mortgage insurance
companies paid out $50 billion to lenders.
PMI companies can do this because they
are regulated at the state level and no state
wants unpaid mortgages, something which
would reduce the availability of real estate
financing. Also, mortgage insurance
companies are "monoline" insurance firms.
That means they are only allowed to sell
one form of coverage; there are no surprise
policies waiting to gobble reserves if they
fail.

Private Mortgage Insurance vs the

FHA
Most borrowers know about the FHA and
VA programs, but PMI is something of a
mystery.
The difference between FHA and PMI
the two most direct competitors generally
breaks down in several ways:
First, the minimum FHA down payment
requirement is 3.5 percent. PMI has
traditionally required 5 percent down, but
financing with 3 percent down a 97percent loan-to-value mortgage is
increasingly available.
Second, FHA financing now requires a
1.75 percent up-front mortgage insurance
premium. This sum is typically added to the
mortgage amount, meaning the borrower
does not have to bring extra cash to
closing. However, a larger loan means a
bigger monthly payment and more to payoff when the house is sold or the loan is
refinanced. Many PMI options do not
require an up-front fee.
Third, depending on your credit score,

2016 issue 8

the monthly insurance fee for PMI can be

lower than with the FHA program.
Fourth, new FHA rules keep monthly
insurance payments in place for the life of
the loan for most borrowers. With private
MI, it's possible to cancel in as little as two
years, and sometimes even less. To cancel
early you need to pay down the loan, an
investment to consider given the minimal
returns available today with CDs and
savings accounts.
Lenders can tell you more about FHA
and alternative programs backed by PMI.
As you consider your options, ask these
questions:
How much will it cost to settle with each
program?
What is the up-front cost of each option?
What is the monthly payment for each
program?
At what point can you can cancel
insurance coverage given your down
payment?

2016 issue 8

Builders Outlook

El Paso Development News

11
Builders Outlook 2016
Issue 8
www.elpasodevnews.com

32-Acre Mixed Use Center Planned for West El Paso

By Armando Landin
A new 32-acre shopping center is
planned for Northwest El Paso and
could be the first along the
Transmountain corridor west of the
Franklin Mountains.
The Legacy at Cimarron is billing
itself as a mixed-use community that
will offer space for retail shops,
restaurants, and office uses. It also
includes two hotels, with a total of 228
rooms.
The center will be located along the
southern side of Loop 375, along
Transmountain Road between Resler
Drive and Northwestern Drive.
In all, the Legacy at Cimarron will
have 380,000 square feet of space for
retail, medical, and office uses.
Restaurant, retail, fitness, and
entertainment space makes up
180,000 square feet, with the
remaining 200,000 square feet
dedicated to medical and "wellness
focused services," according to a
property brochure from RJL Real
Estate Consultants.
The site plan for the property shows
several uses spread throughout, with
the majority of retail and restaurants
concentrated towards the center. This
area will have four restaurants
surrounding a fountain and plaza area,
oriented toward San Felipe Drive, the
street that travels along the southern
boundary of the center.
A market, entertainment space, and

fitness center make up the rest of this

area. The "entertainment" area on the
site plan states it will have 980 seats,
an indicator that it may include a
movie theater.The western end
includes two hotel buildings situated
closer to Transmountain Road, with
two nearby larger restaurant spaces.
A group of medical office buildings
will sit on the other side of the main
retail area. The current site plan shows
two-level structures, with parking
located on the first floor in two of the
buildings.
And the eastern end of the center
includes two restaurants, a small retail
building, and a pharmacy. This section
is located nearest to Resler Drive.
The property brochure for the project
highlights the Legacy at Cimarron's
proximity to Loop 375 and Interstate
10, as well as nearby "large scale"
employers such as ADP, Hewlett
Packard, and Helen of Troy.
Also nearby are multiple burgeoning
residential developments to the north.
These include Enchanted Hills, with a
planned 2,500 to 3,000 single family
and multifamily units, and Desert
Springs with 526 homes and 160
apartment units. The Cimarron master
planned community is also nearby, to
the south, which will have 2,200
homes and 500 apartment units when
built out.
Across Resler Drive from the Legacy
is the new Hospitals of Providence

Downtown Arena Aims for

2020 Opening

By Armando Landin

Transmountain Campus, a 140 bed

teaching hospital that will operate in
conjunction with the Texas Tech
University Health Sciences Center. It is
scheduled to open in early 2017.
Interestingly, a senior living facility
with the same name is under
construction at the corner of Paseo del
Norte and Northern Pass Drive. It's
unclear if these projects are related or
if either will undergo a name change to
avoid confusion.
This is the latest in a string of retail
projects that have come to light that
are planned for the Northwest area of
El Paso. Two major nearby projects
The El Paso City Council is set to
consider approving a "Owners
Representative Services" contract for
the $180 million Downtown Arena that
would essentially assign a
management company to the project.
This contract includes managing the
Arena project through all of its
phases, officially known as the MultiPurpose Cultural and Performing Arts
Center. This includes site selection,
choosing the design team, and
overseeing construction.
International Facilities Group (IFG)
of Chicago submitted the favored bid,
a contract worth $4.76 million. IFG
served in the same role for
development and construction of
Southwest University Park in El Paso,
home of the Triple-A Chihuahuas
baseball team.
ECM, LLC, of El Paso is listed as
subconsultant on the contract.
According to the tentative contract,
the entire project should take 39
months, or just over three years to
complete. This would now put the
opening date in late 2019 or early
2020. This timeline is preliminary and
could be extended due to land
acquisition delays.
Voters approved the Arena project
as part of the Quality of Life election
in 2012, the largest single project on
the ballot.

include the 500,00 square foot West

Towne Marketplace and 92,000 square
foot Canyons at Cimarron.
There is no timeline for construction
of the Legacy at Cimarron mixed-use
center, and, as always, its site plan is
subject to change. ESmith Legacy of
Dallas is listed as the developer on the
site plan with O'Brien Architects in
charge of design.

In January 2015, HKS, Inc. of

Dallas presented its findings regarding
a study commissioned by the City to
determine possible sites for the Arena
and the most feasible size. The firm
did not present specific sites but did
highlight the large amount of surface
parking lots spread throughout
Downtown.
HKS did recommended a seating
capacity of 13,250 for basketball
games and 14,500 for "center-stage"
events for the Arena. In comparison,
the Don Haskins Center at the
University of Texas at El Paso seats
12,000 for basketball games and
12,567 for "center-stage" events.\
Then in September 2015, the City
selected two law firms with expertise
in arena projects to assist in acquiring
land for the Arena project. No possible
sites have been announced by the
City nor a concrete timeline.
"Because of the complexity and
uniqueness of this project, it is
premature to commit to an exact date
for a groundbreaking or ribbon cutting
for the facility," the City's website
states.

12

Builders Outlook

Expert
Advice

Driverless Cars

Elliot Eisenberg
Economic & Policy
Blog

At present there are 240 million cars

and light trucks in the USA, most of
which are parked 23 hours a day or
more. This idleness makes owning
and driving a car expensive. If cars
could just be used more, automobile
transportation costs would fall. That is
the promise of Uber, Lyft and all the
other assorted ride hailing services.
But, what about the next step,
driverless cars? With no driver to pay,

2016 issue 8

travel becomes even cheaper. What

does the promise of cheaper
transportation mean for cities,
commutes, sprawl, and more generally
how we live? I suggest it will
encourage sprawl by increasing the
distance of our commutes. Heres
why:
As goods and services get cheaper
we generally consume more of them.
For example, long distance phone

calls were once prohibitively expensive

and we made them rarely. Today, they
are free and we make lots of them.
Televisions used to be very costly; a
house had just one. Now, every room
has a TV. Several years ago,
gasoline was $4/gallon and owning a
Prius was a status symbol. Now, with
gasoline at $2.25/gallon, we are
buying gas guzzlers by the gross and
driving more too. In short, as
something gets cheaper, we generally
consume more of it.
Returning our attention back to
driverless cars, as new technologies
and roads are built to specifically
accommodate these vehicles, their
transformative potential will become
apparent. They will not only be safer
than existing cars, but will travel faster
and get much better gas mileage.
And, shared self-driving cars are
expected to easily take 50% of existing
cars off the road. Suddenly the cost of
conveying a passenger is likely to be
not much more than double or triple
the cost of public transit. Better yet,
hailing such a vehicle from the
permanent circulating fleet will take
little time and no more than a swipe or
two on your smart phone. As a bonus,
on-street parking and most off-street
parking would completely disappear.
In short, we are on the verge of
faster, safer, and cheaper travel. Add
to this the twin observations that

people generally are willing to

commute about 30 minutes to get to
work, and that (possibly as a result),
urban population densities have
generally been declining by about
1%/year since about 1890, and you
have a strong likelihood that the cost
and time savings these new modes of
travel promise will result in longer
distance commutes, and thus
continued sprawl. In short, the easier
it is to get from Here to There, the
farther away from There people are
apt to live.
Moreover, this outcome is highly
likely no matter how things turn out. If
we enthusiastically embrace ridesharing technology, something
Americans have never done, we will all
be whisked speedily to our now everdistant places of work and sprawl
continues. By contrast, if few of us
ride-share and we instead use our own
self-driving cars, which is probably
more likely, it would mean more cars
on the road and thus slightly slower
speeds than what could be achieved
via mass ride-sharing and thus longer
commutes. But we would all be
watching TV or reading so who cares!\
Elliot Eisenberg, Ph.D. is President of
GraphsandLaughs, LLC and can be reached at
Elliot@graphsandlaughs.net. His daily 70 word
economics and policy blog can be seen at
www.econ70.com.

2016 Issue 8

Association
News & Events

13

Builders Outlook

If you have an event or meeting that you would like to share with
EPAB members, please submit your information to:
margaret1@elpasobuilders.com
Condolences to Scott Norman,
TAB Executive Officer on death of
his father Michael S. Norman

UPCOMING
EVENTS
SEPTEMBER 14
BOARD MEETING
12 NOON
EPAB OFFICE
OCTOBER 7-9
FALL HOME & GARDEN
SHOW
EL PASO CONVENTION
CENTER

SODA SPONSOR

CONGRATS

LONE STAR TITLE

LESLIE D. AND MATTHEW HOARD

ON THE BIRTH OF THEIR SON
JOSEPH ALOYSIUS

Michael S. Norman
1944-2016
Mike, born in Houston on November 18,
1944, passed away August 23, 2016, in
Austin, TX surrounded by his loving family,
after a courageous battle with cancer.
A proud fifth generation Texan whose
ancestors date to the days of the Republic,
Mike was the second child of Mabel
Douglass and Finley Norman after his late
brother Douglass F. Norman. Those that
knew him will undoubtedly remember his
warmth and generous heart.
Mike graduated from St. Thomas High
School in 1962, and attended the
University of Houston. He was proud to
serve his country as a medic in the U.S.
Army Reserves, and thereafter enjoyed a
successful career in industrial chemical
sales.
Mike and the love of his life, Elizabeth
Donoho, recently celebrated their 41st
wedding anniversary. "Pops" is survived by
sons M. Scott Norman, Jr., wife Monique
and their sons Jack and Ben; Shane
Norman, wife Sasha and their son
Sebastian; and Dax Norman, wife Karen,
their daughter Eppe and son Bo.
Services will be held at 2:00 p.m. on
Saturday, September 3, 2016, at Forest
Park Lawndale Cemetery, The Chapel of
Angels in Houston (6900 Lawndale St.).
In lieu of flowers, donations may be
made to The Seton Fund, Hospice Austin
or Texas Builders Foundation.

14

Builders Outlook

Expert Advice

Joe Bernal

Employer Benefits of El Paso

Republican presidential candidate Donald
Trump has vowed to repeal the Affordable Care
Act if elected. Democratic candidate Hillary
Clinton would only make slight changes. As the
presidential elections get closer, how could these
scenarios play out?

What Repeal Would Mean

In January, Congress passed a bill for the first

time that would repeal the Patient Protection and
Affordable Care Act (the ACA or Obamacare)
without a replacement. President Obama vetoed
the bill.
Although the ACA has many faults, repealing it
would have consequences. A new report by the
Washington-based Urban Institute found the
number of uninsured people would rise by 24
million by 2021, an increase of 81 percent.
Overall, 53 million Americans would be
uninsured, compared to 30 million if the law was
left intact.
The Committee for a Responsible Federal
Budget found Trumps plan to repeal Obamacare

Whats New
Demetrio Jimenez
has been named the
President of the El
Apartment
Paso
Association (EPAA).
two-year
The
was
appointment
announced earlier in
is
and
August
through
effective
2018. EPAA is a
trade
regional
organization whose
mission is to promote, employ and maintain
a high standard of integrity in the
performance of all rental obligations and
services in the operation of the area
apartment communities. The Association
represents over 45,000 rental units within El

Associates
Council

John Dorney

Associates Council Chair

I am proud to be an El Pasoan and a

member of the Builder Association. This
past month I participated in an association
sponsored Energy Code training from the
Texas Association of Builders. They covered
paths to the 2015 energy code compliance,
which goes into full enforcement starting 1

2016 issue 8

How Elections Could Affect Employer Health Plans

would cost nearly $550 billion over the next
decade and would nearly double the number of
uninsured, causing nearly 21 million people to
lose health insurance coverage.
The Urban Institute found repeal of the ACA
would reduce federal government spending on
healthcare for the nonelderly by $927 billion
between 2017 and 2026. However, those savings
would come at a steep cost. The authors found
81 percent of those losing coverage would be
working families. About 66 percent would have a
high school education or less and 40 percent
would be young adults.
By 2021, there would be 15 million fewer
people with Medicaid coverage. About 9 million
people who would have received tax credits for
private health coverage would no longer receive
assistance.

What No Repeal Means

Critics of Obamacare say the ACA has caused

health insurance premiums to skyrocket and
resulted in millions of Americans losing their
health plans.
In short, Obamacare is wrecking the private
health insurance market, wrote Jeffrey H.
Anderson, a senior fellow at the Hudson Institute,
in The Weekly Standard. . Obamacares
proponents say the overhaul has greatly
increased the number of people with health
insurance coverage. What they tend to omit is
the fact that most of the newly insuredabout
60 percenthave merely been dumped into
Medicaid. According to the Congressional Budget
Office, Obamacare has added only 8 million
peoplejust 2.5 percent of the U.S. population
to the private insurance rolls.
The U.S. Chamber of Commerce weighed in
last year in an article titled, How Obamacare Will

Deliver Another Blow to Small Businesses in

2016, arguing thousands of small businesses
face higher premiums and fewer choices under
the ACA and will be hit hard unless federal
agencies or Congress step into the ring.

Republicans Alternative

Republicans in the House of Representatives

have formed a task force to do just that. In June,
the House Republican Task Force on Health Care
Reform released a 37-page proposal. This
template for a future law will give consumers
more choices at lower costs, pave the way for
more cutting-edge cures and treatments, and
strengthen Medicare, according to proponents. It
retains some of the most popular features of
Obamacare, but eliminates others:
Same
Allows children to stay on their parents
coverage until age 26.
Prohibits insurers from denying coverage to
people with pre-existing conditions.
Different
Expands consumers ability to contribute to and
use Health Savings Accounts (HSA).
Limits premiums for older individuals to no more
than five times those of a younger person. The
ACA mandates a three-to-one ratio (older adults
charged only three times more than younger
adults). Republicans believe this drives away
younger Americans, since it makes their
premiums proportionately higher as compared
to their claim costs.
Allows consumers to buy health insurance
across state lines.
Allows employers to offer wellness programs
tied to a financial reward or surcharge.
Creates universal access programs funded by

innovation grants to give financial support for

those who cannot afford coverage.
Gives states block grants to run Medicaid
programs.
Gradually increases the Medicare eligibility age
from 65 to 67.
Ensures taxpayer dollars are not used to for
abortion services.
Similar
Establishes a refundable tax credit for people
who lack job-based coverage. Obamacare
provides subsidies for people who do not qualify
for Medicaid to buy insurance.
Eliminates the Cadillac Tax but caps the tax
deductibility of employer-based plans based on
the value of the benefits. The Cadillac Tax is an
excise tax designed to reduce excessive
healthcare spending by discouraging employers
from offering overly rich health plans. Beginning
in 2018, plans that cost more than $10,200 for
an individual or $27,500 for a family plan will be
subject to the tax, which is 40 percent of the
amount that exceeds those thresholds.
Allows states that have already expanded
Medicaid eligibility under the law to maintain the
additional coverage, although it would prevent
other from doing so.
Protects employers rights to self-funding their
health coverage a right they have now,
although there has been some movement by
the administration to impose more federal
regulation.
We will keep you informed of political and legal
developments that affect your employee health
coverage. To discuss your organizations
coverage needs or concerns, please contact us.
Employer Benefits of El Paso
7501 Lockheed Dr., Suite B, El Paso, TX 79925
joe@employerbenefitsep.com
www.joebernalinsurance.com

Jimenez Named President Apartment Association

Paso County and surrounding areas,

including Culberson, Hudspeth, Jeff Davis
and Presidio Counties.
Demetrio Jimenez, a member of the EPAA
Board of Directors since 2006, also served
as Chairman of the EPAA Affordable Housing
Committee. Demetrio was appointed to the
Texas Apartment Associations (TAA) Board
of Directors and has also been named the
TAA Chairman of the Affordable Housing
Committee. I am excited for the opportunity
to serve and represent this outstanding
organization said Demetrio Jimenez of the
appointment, I look forward to work
alongside EPAAs members and partners to
ensure continued growth and awareness of
our association.
Demetrio has a degree in Architecture with
an emphasis on Housing from the University

of Texas at Austin. He has worked for the

Texas Historical Commission as a building
consultant in both the Mainstreet Department
and the Department of Architecture. These
programs focused on the rehabilitation of
historic structures for affordable housing,
multi-family programs, and single family
residences as the new construction affected
a historic neighborhood.
Demetrio also managed the El Paso Office
of Colonia Initiatives with the Texas
Department of Housing and Community
Affairs. He provided technical assistance to
units of local government, and non-profit
organizations in over 30 Texas counties
located within 150 miles of the US-Mexican
border. He designed and built a community
center in Sparks and also designed an
affordable housing model for use in

September this year. The city of El Paso

participated by taking questions and
suggestion to consider improvement to code
enforcement which should benefit the
community as a whole. I want to thank the
Associates who attended and help voice our
concerns to the city. It's only through our
involvement that we can achieve great
things for El Paso.
One thing that struck me is that there are
still significant numbers of builders that
arent in the EPAB, and that is really a
shame for a number of reasons. At the
training Ray Adauto asked for a show of
members, and while there were a number of
them there it was obvious how many didnt
stand up. The reasons we had the training
was because of members and that was
pointed out. Serious issues can arise when
a builder, or for that matter a supplier or
vendor is not aware of code changes or
regulations. For the consumer the danger is
having work done by someone who might

not build their house to code, or worse yet

use old materials that wont pass
inspections. If there was something to be
gained at the TAB sponsored training it was

Invite new members

underdeveloped areas, which is currently

implemented throughout the Texas border.
This unit allows the families of the colonias to
finish out the interior as time and money
permit while providing a safe, sound, and
sanitary housing unit in the meantime.

Currently, Demetrio is a partner at

Tropicana Properties II, LLC along with Bob
Bowling I.V. and Randy Bowling. He also
serves as the managing arm for 28
multifamily developments in and around El
Paso County.
Demetrio and his wife Leticia reside in El
Paso along with their two sons- Isaac,
currently a sophomore at the Air Force
Academy and Joshua, a sophomore at
Coronado High School.

that our mission as members is to invite

others to join to make our work the safest
and best available to the consumer.

El Paso Disposal

772-7495

Builders
Outlook

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Issue 8

Product Portfolio Highlights

6046 Surety Dr. El Paso, TX 79905

915-778-5387 Fax: 915-772-3038

EXECUTIVE OFFICERS

PRESIDENT

Carlos Villalobos

NATIONAL ASSOCIATION OF
HOME BUILDERS
(800) 368-5242

VICE PRESIDENT
Don Rassette

TEXAS ASSOCIATION OF

SECRETARY/TREASURER

BUILDERS

Kathy Parry

(800)252-3625

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www.builderagentnetwork.com

John Dorney

ECECUTIVE VICE PRESIDENT

Ray Adauto

PAST PRESIDENT
Edgar Montiel

Membership Retentiion
Patrick Tuttle

Finance Committee
Kathy Carrillo

Henry Tinajero

ADVISORY TO THE BOARD

Jay Kerr, Firth, Johnston, Bunn & Kerr

James Martinez, Law Office of James Martinez

2015 Builder Member Of The Year

Edgar Montiel

Palo Verde Homes

2015 Associate Of The Year
Interceramic Tile

2015 John Shatzman Award

Bradley Roe

Honorary Life Members

Mark Dyer

Wayne Grinnell

Don Henderson

Chester Lovelady
Cliff C. Anthes

BOARD OF DIRECTORS

Anna Gill

Antonio Cervantes, BIC Homes

Brad Roe

Leti Navarrete, Dream Homes/Bella Homes

Rudy Guel

Robert Najera, Joseph Custom Homes

Walter Lujan, Dawco Home Builders

Leslie Driggers-Hoard, Homes By Design

Edgar Garcia, Bella Vista Cutom Homes
Jason Cullers, Cullers Homes

Samira Gonzalez, ICON Custom Homes

Sal Masoud, DRE Development

Joe Bernal, Employer Benefits Of El Paso

Linda Troncoso, TRE & Associates

Bret Thompson, Foxworth Galbraith Lumber

Ted Escobedo, Snappy Publishing, LLC
Patrick Tuttle, Legacy Real Estate
Sam Trimble, Lone Star Title

Luis Rosas, HUB International

Gilbert Pedregon, GECU

Gregg Davis, First Light FCU

TAB STATE DIRECTORS

Randy Bowling
Greg Bowling

Sam Shallenberger
NATIONAL DIRECTORS

Bobby Bowling IV.

Demetrio Jimenez

Now more than ever,

ElPaso home buyers
are planning for the
future.

E H Baeza

Bud Foster, Southwest Land Development Services

Fernando Torres, CTU Metro Homes

Give your customers

the option of the sun

Past Presidents

Committed to Serve

Greg Bowling

Kelly Sorenson
Mark Dyer

Mike Santamaria

Bobby Bowling, IV
Rudy Guel
Anna Gil

Bradley Roe

John Cullers

Bob Bowling, III

Doug Schwartz

Hershel Stringfield

Randy Bowling
Robert Baeza

Edmundo Dena
Pat Woods

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.
2015 Builders Outlook
is published and distributed for the
El Paso Association of Builders
by Ted Escobedo, Snappy Publishing, LLC
ted@snappypublishing.com
El Paso Texas 915-820-2800

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