Brave Builder

Brave Builder

It takes a brave man to become president of the Florida Home Builders Association this year. There aren't any signs of improvement for 2009, yet Punta Gorda builder Jay Carlson says now's the best opportunity to push for lower taxes and fewer regulations.

HOMEBUILDING by Jean Gruss | Editor/Lee-Collier

It's fair to say Jay Carlson drew the short straw.

Carlson, president of Punta Gorda-based builder Carlson & Soforth, has taken on the unenviable position of leadership of the Florida Home Builders Association in the most trying times the industry has faced in a generation.

But Carlson isn't going to shy away from tackling Florida's anti-growth system of regulations and taxes that have exacerbated the downturn.

Starved of revenues from construction, Carlson says lawmakers at the state and local levels may finally wake up to the fact that complex regulations and taxes on new construction are choking growth. "I think they're looking at things differently now," he says.

Carlson should know. Charlotte County has been one of the hardest hit areas in the downturn but its politicians have been the quickest to recognize the need to give builders a break. They rolled back taxes on new construction (also known as "impact fees"), an accomplishment that got other counties to consider the same thing, albeit with limited success.

But Charlotte's builders are a much more potent force because they haven't been as demonized by politicians as they have in other counties. In Collier County, for example, the tax on a new 2,500-square-foot home is $48,000, the highest in the state.

Charlotte builders rallied support for their cause by enlisting other business organizations and Realtors. They showed that homebuilding's tentacles reached deep into the economic well being of the county and created a potent political force that defeated anti-growth politicians.

Carlson says he hopes to take the lessons from Charlotte's success in beating back taxes to the state level. "I hope they get the message," he says.

Soforth and so on

Carlson trained as a carpenter, sweeping the floors at a lumber company after he graduated from Charlotte High in 1976. In the early 1980s, he joined his father's construction company. Robert Carlson had named his company Carlson & Soforth, injecting humor into the corporate name because he didn't know if his sons would follow in his footsteps.

Carlson's father built landmarks that included Fisherman's Village, a successful waterfront retail complex in Punta Gorda, as well as residential and commercial developments.

In the late 1980s, the company diversified into community association management, a move that has guaranteed its survival to this day. For example, it now manages the day-to-day operations of the Deep Creek community association in Punta Gorda, a 7,500-lot residential development. Carlson & Soforth does everything from mowing the common areas to handling the architectural reviews and enforcing deed restrictions.

The downturn has hit Carlson's homebuilding operation hard. "I'm not building anything right now," he says.

But fortunately, Carlson became director of compliance and warranty standards for Bonded Builders two years ago, a Port Charlotte company that sells home warranties and property insurance to builders and homeowners all over the country. Looking back, Carlson says he didn't anticipate the downturn would be this steep.

"This is the worst I've seen," Carlson says of the current downturn. "This has cut deep."

Although he says the new-home market has probably hit as low as it will get, Carlson is cautious about next year. " '09 is going to be a rough year. We need to be prepared for it," he says. He predicts "a lot more pain in the near term."

"Financing is a major issue," he says. Lending standards have gotten much stricter because bankers are under tougher restrictions from regulators. Credit to builders has dried up as banks pull back.

Meanwhile, Carlson is worried that the problems in homebuilding will spread to commercial properties. "Commercial is holding its own right now, but that's probably going to tail off too." Commercial development usually follows the residential building cycle by a year or two.

But Carlson is hoping buyers' hesitance will be lifted after the presidential elections next month and that stocks will rebound enough to make investors feel confident about their savings.

Fewer members

At the height of the residential boom in 2005, the Florida Home Builders Association had 20,000 members. Today, that number has dwindled to 13,000 as the downturn has taken its toll on builders, subcontractors and others linked to the industry.

The association has cut back on many expenses, but Carlson says lobbying legislators is one of the few things he says is essential for the association's survival and recovery. That's because government is feeling the pain of lower tax revenues from a general decline in business and legislators may be more predisposed to helping builders with tax breaks and less regulation.

The key lesson of Charlotte County's success in rolling back taxes on new construction came down to this: "It's all about education," Carlson says. "You have to give politicians good information they can't argue with." He says the same can and should be done at the state level to reduce burdens on builders.

Carlson says there are more than two dozen legislative initiatives on the association's agenda this year, with growth management at the top of the list. Taxes on new construction and concurrency are two others near the top.

Despite the tough times, Carlson says this is no time to panic. "My mind set is: relax, reorganize, reflect and move on."

Carlson has always been involved in industry associations, often taking leadership roles. "There's an intangible payback," he says. "I don't look at it as taking time away" from the business.

"Occasionally, you feel like you're getting stretched a little bit," Carlson concedes. But, he adds, "I welcome the challenge."

A challenge it will be indeed.

REVIEW SUMMARY

Executive. Jay Carlson

Industry. Home building

Key. Legislators may loosen regulations and lower taxes on builders in the face of an economic downturn.

Green machine

Who cares about "green" when nobody's building?

Don't tell that to Jennifer Languell, who takes over as president of the Florida Green Building Coalition, an organization that sets standards for ecologically friendly home building.

Languell is the owner of Fort Myers-based Trifecta Construction, a consulting firm that helps builders design "green" homes, commercial buildings and developments. While builders may be building fewer homes today, she says they want to be ready with a "green" strategy when the market comes back because consumers are likely to demand it. She says membership in the Florida Green Building Coalition has doubled to more than 1,200 members this year alone.

But what homebuyers say they want and what they actually buy are two different things, many builders say. When given the choice, for example, many homebuyers prefer the granite countertops to better insulation in the attic.

Languell is undeterred. She says it's a question of education and she gives more than 100 speeches to groups around the country each year to promote energy and water conservation in construction. "We never go into a client and say this is going to cost you money," she says. Instead, she shows how things such as energy saving appliances, while more expensive, can ultimately save you money. "We don't approach green: hug a tree, kiss a whale," she says.

Languell bemoans the lack of standards in the green movement, which has led to companies "greenwashing" their products to mislead consumers into believing they're buying environmentally friendly products. For example, there are no trade restrictions on terms such as biodegradable. "You can put that on your car," she jokes.

She concedes that the hype surrounding the "green" movement has been overdone. "I'm tired of reading the same crap," she acknowledges, adding, "but there are plenty of people who haven't read this yet." Languell was recently featured in the Discovery Channel's newest environmental series, Discover Project Earth.

Green building needs a push in the form of government incentives, Languell says. "We need to get behind pushing for more incentives," she says.