“The American trade Association is unique. It welcomes newcomers in business and industry to its ranks. It seeks to improve their skill and knowledge of their trade or profession. In fact, it fosters competition. It combines these desirable goals and standards with a flexibility in structure which had made it adaptable to social, economic, and legal trends in our nation’s development. It creates good will and understanding. It strives for higher standards or service to the people. It provides leadership in the field of human endeavor. It is the accepted seal of quality in every sphere of American business and industry.”
– Waverly Taylor, Chairman, Committee on the History of NAHB Through 1943
Part 1 – The First 20 Years of NAHB
This year the Home Builders Association of Greater Chicago celebrates 75 years as an association. There are a number of rumors regarding how HBAGC started. Some say a group of five Chicago area families joined together to form the challenge to create The History of HBAGC. Throughout the year we will be going through our archives to begin this quest.
We begin with what we know about the formation of the National Association of Home Builders. The following story is courtesy of the NAHB from The History of The National Association of Home Builders written by Waverly Taylor, Chairman, Committee on the History of NAHB 1952.
The National Association of Home Builders, as we know it, began in 1942 while World Warr II was still underway. However, in the late 1800s men engaged in the broad field of real estate made the first efforts to organize land developers and home builders on a national level.
“This Nation was founded by home builders. Deep-rooted in our people is the desire for home ownership. The Building of homes is as fundamental as an American institution as is the freedom and security which those homes typify.”
– Waverly Taylor, Chairman, Committee on the History of NAHB Through 1943
THE DEVELOPMENT OF THE ENTREPRENEUR BUILDER
Homebuilders were instrumental in building our nation. Deep-rooted in the American culture is the desire for home ownership. The Building of homes is as fundamental an American institution as is the freedom and security that those homes typify.
“COOPERATION BECAME A NECESSITY AND BROUGHT ABOUT THE FORMATION OF LOCAL ASSOCIATIONS.”
For several centuries Americans usually built their own homes. Even today in some agricultural areas, houses and barns are constructed with the aid of neighbors and friends. However, with the growth of the country, homebuilding as an industry evolved into a fundamental factor in the national economy.
As crossroads became villages and villages became great metropolitan areas, the carpenter-builder became the general contractor. This development met the inevitable need for a coordinator of the many crafts and sources of supply that mechanization brought to homebuilding.
With the mechanization of industry also came more and more specialization, until building a house became a complex and major undertaking, involving contacts with many different people and a process of self-education in specialized fields that were entirely foreign to the average person.
The first step was the site selection usually accomplished through a real estate man. Then came the preparation of plans and specifications by an architect. Next was the matter of financing, the securing of a mortgage loan through a real estate firm, a bank, a savings and loan institution, or a lawyer. Then the site owner selected a builder, usually through competitive bidding. Next came the selection of finishes – lighting fixtures, hardware, plumbing fixtures, kitchen equipment, inside and outside colors, and a myriad of other fittings – which frequently brought in the professional interior decorator. Last on the scene was the landscape architect or nurseryman to landscape the site.
Urban and suburban living and the building of a home had finally become so complex and involved that it required a single entity responsible for the entire process. Thus, the Entrepreneur Builder evolved.
The Entrepreneur Builder is truly “a man of many parts” – a composite. He must have a good working knowledge – in many areas: housing market analysis; land development; civil, structural and mechanical engineering; architecture; building methods and materials; real estate and commercial law; banking and financing; public relations and advertising; selling; and sound business procedure. His function is to deliver the “complete housing package” in an environment protected by covenants and zoning assuring lasting value.
As the Entrepreneur Builder began to take form and emerge as the dominant factor in the American housing industry, men engaged in this pursuit began to seek counsel with one another, not only for mutual aid and protection, as had primarily motivated such association in the past, but in the enlightened spirit of industry in America, to better their product and offer greater values so that ever-increasing number of Americans might enjoy the benefits of home ownership.
THE EVOLUTION OF TRADE AND PROFESSIONAL ASSOCIATIONS
In cities experiencing rapid commercial and industrial expansion, the ingenuity and capacity of those engaged in housing the people who flocked to them was taxed to the utmost. Cooperation became a necessity and brought about the formation of local associations, commonly called Real Estate Exchanges.
By 1891 builders from across the United States recognized the need for coordination at the national level and laid the groundwork for a meeting in Nashville, Tennessee.
In February 1892, 266 men engaged in the practice of Real Estate in 22 states and one Canadian province met in the Senate chamber at the state capitol in Nashville, Tennessee, and formed the National Real Estate Association. Presidents, secretaries and members of then-existing real estate boards in cities such as Detroit, Milwaukee, Chicago, Buffalo, St. Louis, Nashville, Louisville and Houston, were the backbone of this organization. T.T. Wright of Nashville was recognized by resolution as the originator of the idea of a national association.
The group held subsequent meetings in Chicago, Buffalo and a final meeting in Milwaukee. However, there was a fatal weakness in the group’s structure, the lack of a paid executive to keep the organization going between conventions, so the National Real Estate Association faded away.
Not until 1907 were leaders in the real estate business ready for another try. Internal changes in the business of real estate had further paved the way for an organized national effort. The Real Estate Association of Portland, Maine revived interest in the formation of a national association of real estate exchanges. In May 1908 120 delegates from 19 local real estate boards and the California State Realty Federation met in Chicago and organized the National Association of Real Estate Boards.
These founders did not repeat the mistake made by their predecessors. Their bylaws include this statement: “The Executive Committee or Board of Managers shall employ an executive secretary and pay him a suitable salary”. At the same time, the founders laid a clear foundation for the priceless volunteer services essential to any association if it is to survive and grow, by stating in the by-laws that, “The consideration for services rendered the Association by any and all officers or committeemen thereof shall be the benefit derived from such membership in the Association, and no compensation shall be paid.”
From the solid foundation of this second start, the National Association of Real Estate Boards prospered and grew rapidly. Various committees, where members grouped to exchange ideas and effect betterment in the specialized fields of real estate, accomplished the goals of the association. Among the most active of these committees were the Housing Committee and the Subdivisions Committee.
By 1923 the Association’s membership had grown to 17,504, representing 745 local real estate boards. At that time there was a general demand among the membership for a greater concentration of specialized interests, and a divisional type of organization was indicated.
In January 1923 the Association formed the Brokers Division (now the National Institute of Real Estate Brokers), the Property Management Division (now the Institute of Real Estate Management), the Home Builders and Subdividers Division (progenitor of the National Association of Home Builders), the Mortgage Finance Division (no longer in existence), the Industrial Property Division (now the Society of Industrial Realtors), the Farmlands Division (now the Institute of Farm Brokers) and the Realtor Secretary Division (now the Real Secretary’s Counsel).
The membership of the Home Builders and Subdividers Division grew to 400 within a year and exceeded 1,500 by 1925, the top of the building boom o the 1920s. Membership hit a low of several hundred in the early 1930s and, thereafter, through the division’s various changes of name up through July 1943, seldom exceeded 500.
In June 1933 the Home Builders and Subdividers Division changed its name to the Land Developers and Home Builders Division of National Association of Real Estate Boards. IN January 1941 the name was changed to the Home Builders Institute of America of NAREB. In May 1942 the Director of NAREB placed the Home Builders Institute “on its own”.
On September 21, 1942, the Home Builders Institute changed its name to the National Association of Home Builders of the United States. The certificate of resolution changing the corporate title was filed on October 7, 1942, in the State of Illinois. The first President of the NAHB was George F. Nixon of Chicago.
Stay tuned as we go through the archives and create “the History of HBAGC”.
