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Pittsburgh, PA

We celebrate 25 years, BAMP celebrates 75 in the home building industry.

BAMP and the history of the home building industryLong time a member of the Builders Association of Metropolitan Pittsburgh, we want to share some highlights of the evolution of the home building industry in Pittsburgh and the nation.  It’s from their “Building The American Dream” booklet we got at their anniversary dinner in May.

Launched in 1938 with a handful of members, today BAMP has grown to more than 1,300 members in Allegheny, Beaver, Butler and Westmoreland Counties.  What follows here is drawn from the research that went into preparation for BAMP’s 75th anniversary celebration.

Lets start with a few remarkable changes in the last 75 years, beginning with the Great Depression.

Back in late 1930s, average annual income was $1,700 and a new house averaged of $3,900.

Compare those numbers to $49,000 and $212,300 in 2011.  Other major changes include Pittsburgh evolving from the Smoky City to “Most Livable U.S. City.”

The 1940s

BAMP launched during The Great Depression and start of The New Deal, which created or enhanced four programs that would be vital to the future of housing in the U.S. for decades to come:  Federal Housing Administration, Federal Deposit Insurance Corporation; Federal Home Loan Bank Board and Fannie May

“These initiatives effectively stopped housing deflation, minimized risks and put home building back on a profitable basis,” according to BAMP.  “The founders had a vision of “establishing a strong, independent home building industry that could place a home within the reach of the general public, something that was unheard of at the time, but is commonplace today.”

In the 1940s housing construction was “driven by two dominant forces:  the need for housing for defense workers in the early part of the decade and the need to accommodate a tremendous post-war demand for soldiers returning home and looking to start a family.

As one builder put it:  ‘In 1938, you couldn’t build a house. In 1948, you couldn’t build one fast enough.’”

The 1950s

This era brought new, more open floor plans, plate glass windows and new technologies.  In the beginning of the decade TVs glowed in only 9% of homes, but lit up 87% by the end of it.  More ease and comfort came with air conditioning, a variety of new appliances, vacuum cleaners and washers and dryers.  This was also beginning of movement to the suburbs made possible with new highway systems and tunnels in the region.  And a standing record 15.1 million homes were started during the 1950s.

The 1960s & 1970s

As growth of the suburbs continued, the size of homes was growing, too, and more conveniences were added. Transportation infrastructure—roads, tunnels, bridges—continued to improve, feeding a ‘60s building boom and more growth in the suburbs.

During the ‘70s, the building industry rode a rollercoaster, with the Vietnam War, OPEC oil embargo, rampant inflation and more undermining the optimism of the 60s.

But in the ‘70s the value of owning a home surpassed stocks, bonds and gold and increased faster than inflation. And the “sunbelt states” saw major migration and building trends.

Many call the 1970s “the environmental decade,” given the creation of new laws and agencies.  The new EPA and Clean Water and Clean Air Acts would change the way business was done for contractors, manufacturing, municipalities and others. For many this was a contentious time, but it laid the groundwork for Pittsburgh becoming what it is today.

The 1980s & 1990s—we launch in 1988

The beginning of the ‘80s saw the collapse of the steel industry; the Pittsburgh region was hit hard.  Unemployment hit 16% here; a population exodus began; housing starts dropped to ¼ of the number in 1972. Surprisingly, downtown commercial development boomed at this time, including the construction of Oxford Center and PPG Place and a 99% office occupancy rate.

Later in the decade, with the migration to the suburbs continuing, Boomers were wanting to “upgrade to an amenities package fit for a king.”

The American Dream of home ownership had become a reality, reaching almost 70% from a low of 37% in the ‘30s.

Read about our history starting in 1988.  At the beginning of the 90s the country suffered a severe credit crunch as a result of the Savings & Loan Crisis.

The 90s brought more innovations, including the introduction of solar and other alternative energy sources, as well as the EPA’s ENERGY STAR program to the home building industry. Also, new legislation encouraged the redevelopment of the brownfields of abandoned industrial sites throughout the region. The mixed-use Washington’s Landing on the Allegheny River was an early project, one of many such projects by the Urban Redevelopment Authority.  Others include Southside Works, The Waterfront, Crawford Square and Summerset at Frick. At the same time there was big push to develop affordable housing for low and middle income families.

The 2000s—our growth & the recession

Master Remodelers experienced growth and technological advancement throughout this period in spite of the major challenges. For example, the decade began with the “dot com” bubble bursting; then came September 11, 2001.  In 2004, new and improved building codes went into effect. Later, the PA Attorney General’s office required all home improvement contractors to register with the state as a result of scams of homeowners.

National Green Building Standards were established through the work of NAHB’s Research Center.

By 2006, contractors were beginning to feel the pinch of the recession. At its peak in 2008 the Federal Housing Finance Agency placed Fannie May and Freddie Mac in conservatorship to protect global financial markets and protect the availability of mortgages.  Tighter mortgage lending and appraisal standards slowed housing’s recovery nationwide.

The 2010s—the home building industry bounces back

According to BAMP, ”By 2011 Pittsburgh began to show signs we’d seen the worst of it… Not having experienced the meteoric rise in construction and inflated home prices…

“Pittsburgh’s recovery from the burst of “the housing bubble” was quicker than other metropolitan areas.”

By 2012 the Pittsburgh area’s new construction had grown by 11%, “however the overall statistic of more than 1.4 million residential construction jobs lost between April and October 2006, tell us we have some work to do.”

After a rough 2009 and 2010, for Master Remodelers, 2011 finally proved to be a very good year for large projects and revenues—and remodeling awards!  (read our blog post about the year).  But, as our president Regis McQuaide says, “this business is not for the faint of heart.”  As you can see from BAMP’s 75 year history of the industry here, it certainly has had its ups and downs, largely determined by the fluctuations of the economy and major events.