New high for homebuilding boom

Bricks and drywall to his left, tiles and lime sacks to his right, housing inspector Tom Gage is working two cell phones, a CB radio, and a walkie-talkie.

With a carpet of new development rolling out across this mammoth desert valley - the Las Vegas area has led the United States in growth for 60 years - Mr. Gage is the man who must make sure every dwelling has the right nails, studs, roofing, and floors.

"We've got a problem on Lot 26," he yells into one phone, trying to be heard above the symphony of saws, hammers, and drills. "Tell them they have to come up with some solution that maintains the integrity of the stairway."

Maintaining the integrity of American homebuilding has become the shadow side of a nationwide residential housing boom that will break records this year.

Bolstered by the lowest mortgage rates since the 1960s, big stock market gains, and low unemployment, American homebuilders will put up more square feet of housing this year than at any time in history. While lagging behind the record for the number of units built - 2.4 million in 1972 - this year will break all records for the amount of square feet constructed, partly because homes are becoming people's castles.

"American builders are having trouble keeping up with demand," says Michael Carliner, vice president for economics at the National Association of Home Builders (NAHB) in Washington. "There are questions of labor shortages, material shortages, overworked inspectors, all of which are disrupting the process."

Translation: delays, concern in some quarters about quality, and new challenges for Gage, who heads a group of 55 inspectors who must pass judgment on 5,000 homes a month. With nearly a dozen inspections required per dwelling - from foundations to electrical, framing, insulation, drywall, and plumbing - that means each inspector may look over 35 houses a day - three times the number recommended by national experts.

"It gets a little crazy out here at times," says Gage, driving a white Ford pickup through Summerlin, Nev., the largest planned community in America. "It's great to be busy in some ways, but in others it's also frustrating wondering how you are going to accomplish all you need to in a given day."

Costly delays

For inspectors, whose salary is paid by the city, time is not a problem. But for builders in a hurry to create homes, delays cost money.

"Any time a developer or builder calls for the inspector and he can't make it to the site, it delays construction and that costs more because time is money," says Tom Simplot, deputy director of the Home Builders Association of Central Arizona. "Anyone buying a home today needs a 'buyer beware' warning to expect delay. It's just the way things are right now."

By one estimate, most homes in America, particularly those built in hot spots like Las Vegas, Phoenix, and Atlanta, will take about 50 percent longer to go from architects' drawings to shingles and studs - say, nine months instead of six. And since the industry received a shock in the aftermath of Florida's hurricane Andrew in 1993 - over insurance industry claims that homes were not constructed as well as they should be - moves are afoot to crack down on shoddy construction.

"The quality of workmanship in homebuilding is declining because it is difficult to find trained, committed workers," says Alan Olson, assistant director of the Phoenix Development Services Department. "Secondly, there are too few inspectors to be looking over the activity of homebuilders as closely as they should."

His department has been trying to keep up with a similar number of homes per month as Las Vegas is, about 5,000, but with 25 fewer inspectors.

Quality control

To help solve this problem, the home-insurance industry has created a new group to begin rating local and state inspection agencies. Formed in the aftermath of hurricane Andrew, the body hasn't yet rated all American cities, but its impact is being felt.

"The effect of this body has been to raise awareness as to the need for effective enforcement and help jurisdictions judge how many resources they have devoted to it compared to others," says Olson. "In a matter of years, it will turn this situation around."

In the meantime, the quality of inspection has varied greatly. In Las Vegas, builders must cope with whatever inspector is free to come to a site on any given day.

"Some of the inspectors the city sends out here are men who know their stuff so well you are honored to tour the site with them," says Ken Ketchie, a site superintendent for Christopher Homes. "Other times you get a guy who tries to do things that really aren't that legit."

Problem solving

While many builders give good ratings to the Las Vegas department, Phoenix inspectors have come under more criticism. They received 9,000 complaints last year.

"Part of the problem is that construction has become a field that many people don't respect as a long-term career," says Steve Schmidt, executive director of the National Association of State Contractors Licensing Agencies. "So the training doesn't start at the lower levels."

To help ease this problem, many associations are beefing up training and recruitment, including reaching out to Hispanics. "We are offering a class in Spanish for homebuilders to alleviate part of this problem," says Mr. Simplot.

Whatever the case, industry observers say the demand for housing should slow in 1999 - mercifully, for the shoe leather of inspectors like Gage.

"It's hard to believe we can continue to build this many houses year after year," says NAHB's Mr. Carliner, whose organization is predicting a homebuilding drop-off next year. "Long-term demand is just not going to support continued production at this rate."

Where homes are (and aren't) affordable

Top 10 least affordable housing markets*

1. San Francisco

2. Eugene, Ore.

3. Portland, Ore.

4. San Jose, Calif.

5. Salinas, Calif.

6. Brownsville, Texas

7. Santa Rosa, Calif.

8. McAllen, Texas

9. Santa Barbara, Calif.

10. San Diego

Top 10 most affordable housing markets*

1. Augusta, Ga.

2. Wilmington, Del.

3. Baton Rouge, La.

4. Davenport, Iowa

5. Utica, N.Y.

6. Albany, N.Y.

7. Lakeland, Fla.

8. Rockford, Ill.

9. Daytona Beach, Fla.

10. Des Moines, Iowa

*Includes only metropolitan areas with more than 250,000 people.

Source: National Association of Home Builders