By Helen Chernikoff, Reuters, 1/19/2010
http://www.reuters.com/article/idUSN1114389420100120?type=marketsNews

LAS VEGAS - The homebuilding industry's biggest trade show meets this week, but most of its biggest executives will not be there.

The International Builders' Show, happening this week in Las Vegas, is the marquee event of the homebuilding industry, equivalent to the Consumer Electronic Show for technology or Fashion Week for retailers. It will attract about 55,000 builders, contractors and other industry professionals to a maze of booths and exhibits featuring more than 1,000 companies selling everything from skylights to stoves.

But the star power that lit the scene in the past has dimmed. Leaders of many of the industry's household names, such as Pulte Homes, Toll Brothers and Lennar will skip the show, although some will send lower-ranking executives. Pulte CEO Richard Dugas will not attend. Nor will Lennar CEO Stuart Miller, Toll Brothers CEO Bob Toll or Hovnanian Enterprises CEO Ara Hovnanian.

Such executives were once regular attendees, drawing crowds to panel discussions and generating excitement on the show floor. Their absence arises as the executives make plans instead to meet under the auspices of their own new trade association, the Leading Builders of America, in February, said Executive Director Ken Gear, a former vice president for government relations for Pulte, the biggest U.S. homebuilder.

The big builders decided they wanted a more "direct connection to lawmakers" after their experience lobbying the government for aid to combat the industry's protracted down turn, Gear said.

Business remains tough for builders of all sizes. Even as much of the industry milled about here, inspecting the latest green appliances and networking, the National Association of Home Builders, which runs the show, announced its index of builder sentiment fell one point in January to 15. A reading below 50 means more builders view sales conditions as poor than good.

[HOT: There seems to be a rift growing between the largest builders and smaller ones that must band together to gain political clout. Many smaller builders complain that the large and vertically-integrated builders damaged the industry’s reputation by contributing to the economic collapse. With corporate pressure to sell  homes, their finance subsidiaries (mortgage, title & insurance) helped them sell unqualified buyers homes they couldn’t afford and then put them into risky loans. The risk, however, was entirely on the buyers and taxpayers when builder-owned mortgage companies sold the loans to Wall Street and foreign investors. We explain this in “Texas Homebuilding and the Global Collapse.”

If this rift widens, we expect many builders might come to realize that NAHB serves the interests of big builders more than smaller ones. That’s natural in associations where the biggest members contribute more and expect more in return. HOT would like to work with reputable builders to pass laws that put the home builder and buyer on equal footing. We believe that’s the best way to restore consumer trust and grow the economy of this state, and we offer this Advice to Builders willing to work with us.]

Against this bleak backdrop, the new group's first meeting, tentatively planned to coincide with an investor conference the builders' executives will attend in Scottsdale, Arizona in February, will focus on housekeeping and agenda-setting, said Gear.

Until this year, the International Builders' Show hosted its own forum for the biggest companies at its "High Production Home Builders Council." That council no longer functions, said Paul Lopez, an NAHB spokesman.

The new group grew from big builders' efforts on behalf of the homebuyer tax credit and the extension of a tax provision that lets companies get refunds by using losses to offset prior income.

Conflict arose when the smaller builders, afraid their bad situation could worsen, objected to the tax provision extension. They feared their bigger rivals would exploit it by dumping land on the market. Too much of that could drive land values and home prices down further, jeopardizing the survival of less diversified builders.

The big builders and a broad coalition of other business interests won the tax provision extension in the end, but it is impossible to say which builder camp will prevail in general when their interests clash, said Michael Boland, a longtime Capitol Hill hand whose company, Dome Advisors, does political risk research for institutional investors. Each group has its strengths, said Boland.

"Most of the financial clout will be in the Leading Builders of America. The grassroots power will be in the NAHB," he said.

The Leading Builders of America has no plan to start its own political action committee, Gear said. Such a group would compete with the NAHB's BUILD-PAC. Gear declined to disclose the new group's dues' structure.

The national companies remain NAHB members, but instead are sending other executives, division presidents and purchasing agents to this year's show. Deborah Meyer, Pulte's new chief marketing officer, will be there to get broad exposure to the industry, spokesman Caryn Klebba said. Meritage CEO Steven Hilton will speak on a panel at the show, spokesman Brent Anderson said.

Even big builders still find the show useful, said Toll Brothers President Zvi Barzilay. Barzilay and his colleagues plan each morning how to attack the show and meet each evening to review what they have learned, he said.

"There is a lot to absorb here," he said.

Still, there used to be more. The downturn has shrunk the show. Attendance is a little more than half what it was at its peak in 2007, the NAHB's Lopez said.

"There are a lot of builders here, big and small," Barzilay said. "But a lot less than have been here in the past. It's obviously a reflection of the times." (Reporting by Helen Chernikoff; editing by Robert MacMillan and Andre Grenon)

[HOT UPDATE: The US Supreme Court made a landmark 5-to-4 decision today (9/21/10). It removed limitations on corporate campaign contributions, including those of the biggest home builders, banks, insurance companies, and investment firms. Early radio reports say there will be NO LIMITS on using corporate funds to finance political advertising but existing limits on individual candidates remain. This decision seems to be tied to the 14^th Amendment to the US Constitution and an 1886 decision on corporate personhood. “The Corporation,” an award-winning Canadian documentary, examines the nature, evolution, impacts and future of the modern business corporation and the increasing role it plays in society and our everyday lives. We especially recommend chapters 1, 2, 3 & 6.]

See also: "Big Builders Form New Group," Builder Magazine, 12/15/2009

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