"THE PENDULUM swung from the far liberal left, where they would throw a suitcase of money to anyone, to the other side, where if you didnâ€™t have a perfect credit score they wouldnâ€™t lend," said Robert Baldwin, owner of R.B. Homes and Trinity Excavating of Lincoln.
Robert Baldwin, owner of R.B. Homes and Trinity Excavating of Lincoln, has been an active member of the Rhode Island Builders Association since 1978. In October, he was elected to his second term as president of the association and recently took some time to discuss the organizationâ€™s objectives for the coming year and the state of the industry.
PBN: A year ago most people thought the market for new construction had hit bottom and was starting the long climb up, but 2011 hasnâ€™t been that much better. Are you optimistic there is a recovery on the way eventually?
BALDWIN: Eventually, yes; in the short term, no.
Whatâ€™s transpired this year, with the expiration of the stimulus for housing, banks have stopped lending again.
The pendulum swung from the far liberal left, where they would throw a suitcase of money to anyone, to the other side, where if you didnâ€™t have a perfect credit score they wouldnâ€™t lend.
With the tax credit, banks became more rational with credit scores. That opened up a massive market of buyers. That gave a spurt to the housing industry. Unfortunately this year the banks have restricted their credit scores again. The patient was on deathâ€™s door and then with the stimulus was on life support but now has the potential to go back to deathâ€™s door again.
The issue is the federal government is spending us into oblivion. These guys in Washington just donâ€™t get it.
PBN: The association has promised to be active in advocating on behalf of builders at the Statehouse. What are your top policy priorities for the year ahead?
BALDWIN: On the state level we are looking to work with the Legislature and cities and towns to promote a pro-growth mentality and reduce some of the onerous regulations we are faced with on a statewide basis. The anti-growth crowd has for decades promulgated regulations with timeframes and permitting and planning approvals to the point where it took three to four years to get a project approved. You compound that with restrictive zoning ordinances that are statewide and you have the culmination of these things compounded with the economy. Even if the demand was there the supply would not be. We need to promote commonsense growth.
Hereâ€™s an example: a member of the association wanted to do a project in northern Rhode Island, a mixed use with low-income housing and was using inheritance as seed money. He went before the powers that be in planning and zoning and was told â€˜we will work with you and it could get it done in three years.â€™
PBN: No one in Rhode Island is happy when they get their vehicle excise tax bills. Why is this issue of particular concern to builders?
BALDWIN: Builders and subcontractors have trucks. Some businesses could have a fleet. If you are paying an extra $1,000 to $2,000 in taxes because of the method your vehicle is taxed, you could be looking at a $10,000 to $15,000 bill for your company. This is an extra tax you are paying because you are in Rhode Island. So you could move to a commercial mall in Seekonk or somewhere else just across the border in Massachusetts or Connecticut and save the $10,000 to $15,000. This is just one more example of tax policy that doesnâ€™t help and on a bad day will drive companies over the border.
PBN: The Builders Association joined the push for pension reform this year. Are you satisfied with what lawmakers did this fall?
BALDWIN: They grabbed the bull by the horns. You could argue that they could have done a little bit better on this or that, but the scope of what they were dealing with was so big. Over all we were very pleased. You still have health care and the municipal plans to deal with, but it is a victory for all Rhode Island.
It is a major accomplishment, but it is not done.
PBN: Amid the challenges, are there new opportunities for Rhode Island builders you see helping them get to better days ahead?
BALDWIN: The bright spots are remodeling and green building, where people are investing in energy-saving items or solar and have an immediate payback to help them pay back their mortgage â€“ and also local lending.
The smaller Rhode Island banks, and by smaller I mean just not the huge national banks, are more active in the marketplace and with them we see the credit scores loosen up. That is the bright spot. The local banks that didnâ€™t get up into the toxicity a few years ago are in the marketplace and lending.