Second union-financed homebuilding incentive program a success; 168,000 manhours created

The second innovative effort by nine building trades unions who put up $600,000 in incentive money for new

homebuyers purchasing homes in a 30-day period last month was an outstanding success, said John Eilermann Jr., McBride & Son Homes chairman and CEO, the program’s originator. The program – Neighborhoods Built by Your Neighbors –   was designed to create jobs for union construction workers and sell homes for eight homebuilders participating in the program. The numbers tell the story:

• 120 homes sold

• Over $30 million in sales

• More than 168,000 manhours of work created, the equivalent of 84 full-time jobs for a year.

“This innovative program tipped the scales in the minds of potential buyers,” said Jim Brennan, president of McKelvey Homes. “The buyers knew this was not a gimmick, that it was real money in their pockets.” He said as a result of the program, McKelvey had its best 30-day sales period in the last five years. “We could have sold even more homes if there were more dollars.”

FIRST PROGRAM

The success of this effort comes on the heels of the first program last year in which the nine building trades unions involved in homebuilding put up $1 million in incentives with McBride & Son Homes only. In that effort, McBride sold 221 new homes over and above their traditional sales during the program’s 60-day window, creating 330,000 additional manhours of work.

The union’s funds came either from their own treasury, their local or national market recovery programs, or from their industry market recovery programs.

The builders put up $160,000 in marketing costs for the two programs for TV, print, radio and Internet advertising.

Each union contributed into the bonus program an amount equal to the number of hours they have in an average home based on the home’s cost. That ranged from a high of 771 hours for carpenters to a low of 39 hours for an operating engineer, using a typical $250,000 home as a gauge.

The incentives for buyers ranged from $500 to $10,000 to be used at the closing for extras, upgrades or paying down the loan’s interest rate. “Real money” as Brennan put it.

‘WIN, WIN’

“This program provided positive benefits creating a ‘win-win’ for everyone,” said Jeff Aboussie, executive secretary-treasurer of the St. Louis Building & Construction Trades Council:

• “The unions created over a half million manhours of new work for their members;

• “The public was given a unique financial incentive, in addition to historically low interest rates, to buy now, and they did;

• “The unions garnered a massive amount of public good will as the publicity of their program was news on radio and television, in newspapers and on the internet;

• “The builders were able to exceed their new home sales goals even in a down market which has plagued St. Louis as it has other communities throughout the U.S;

• “The local economies of cities throughout the region grew at a critical time when growth was needed as the new payrolls filtered throughout the entire community;

 “It proves that our unions can cooperate, and that says a lot to not only homebuilders, but to construction buyers everywhere. That’s a great message to send to the buyer community,” Aboussie added.

“This program is a testament to the relationship between St. Louis’ leading home builders and our trade union partners,” said Eilermann. “And most importantly, it shows an innovative way to stimulate our local economy and get people working again by working together. It’s something builders across America can duplicate with their local unions.”

Unions participating were: Bricklayers Local 1, Cement Masons Local 527, Electrical Workers Local 1, Laborers, Operating Engineers Local 513, Painters District Council 2, Plumbers & Pipefitters Local 562, Sheet Metal Workers Local 36, and the Carpenters’ District Council.

Builders participating were McBride & Son Homes, Centrex Homes, Pulte Homes, Fischer & Frichtel, Consort Homes, McKelvey Homes, Payne Family Homes, and Bridgewater Communities.