Amazing as it might seem the State Legislature of Louisiana has seen fit to recreate Yossarian's nightmarish experience in Catch-22 by killing legislation that might have helped house some folks in New Orleans in a more expeditious fashion. You might have read or heard that KB Homes (NYSE: KBH) has been trying to develop various projects in and around New Orleans since soon after Hurricane Katrina departed.
Clearly KB had more than altruistic goals in mind but it was quick to act, seeing the Katrina tragedy as an opportunity to help a community crushed by the lack there of.
KB Homes CEO Jeff Mezger said in a recent article in Fortune Magazine: "It's taking longer for the city to rebound than we expected," he says. One unusual problem: a severe shortage of plumbers. KB learned after it arrived that state law requires plumbers to complete more than four years of training before obtaining a license, and that Louisiana follows different plumbing codes than most other states. That means KB effectively can't bring plumbers from Houston, where it has an extensive contractor network."
If you know anything about Louisiana's political history, it might not surprise you at all to learn that after KB Homes sponsored a bill in the state legislature to loosen these arcane requirements, the state's Plumbing-Heating-Cooling Contractors Association promptly squashed it dead. Never mind that thousands of locals needed housing, and the workers pouring in to help rebuild the city needed housing. Nope. It was business as usual.
If I were President Bush, being hit with so much flack about the government's ineptitude in helping the city get back on its feet, and I heard about this story, I would have been in Louisiana the next day, having a photo opportunity in front of the State Capitol and making a lot of noise about this short-sighted, bureaucratic nonsense.
There is still time to express your outrage if you like. weblegis@legis.state.la.us or webreps@legis.state.la.us and websen@legis.state.la.us. To Contact governor Kathleen Babineaux Blanco: E-mail the Governor + 866-366-1121, or write: Office of the Governor, Attn: Constituent Services, P.O. Box 94004, Baton Rouge, LA 70804-9004
- You can also forward this story to as many people as your time and energy permits.
All the while KB Homes still plugs along although it has withdrawn from many projects. The stock closed yesterday at $30.77 approaching its 52-week low of $28. When your gut is wrenching (to the degree that this story outrages you) from the pain you may want to look at KB as a long stretch value play. It pays a nice dividend yield 3.3%, to tide you over during the "storm" and all of its metrics are in the bargain basement.
Read Chasing Value or Serious Money to find potential opportunities, and to verify my track record, as well.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.
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Reader Comments (Page 1 of 1)
9-05-2007 @ 11:29PM
Sheldon L said...
Jim,
Thanks for your comment. There was no discussion of lowering standards or changing codes. There was discussion about issuing temporary licensing to qualified plumbers from out of state meeting an equally high standard. In addition plumbers from out of State can work with or under the supervision of Lousianna licensed professionals.
Furthermore residential plumbing is not rocket science and it does not take four years to learn. This is a case of restraint of trade.
9-06-2007 @ 2:59PM
Deanna said...
I find this bureaucratic nonsense just crazy not allowing the plumbers to come in from other States to do work. Home owners are in desperate need of Plumbers to get back into their homes..
But , they let anybody play electrician on structures. That is insane ,electrical shortages in a home can not only burn the house down but kill a entire family. Are Burn down a whole city block . Electricians are working with out a Louisiana State license rebuilding here ? They are using other State licensing . Does this make any sense ..Plumbers No ! Electricians Yes !
Please explain this wacky exception . Now you know why nothing gets done here correct , and why companies give up dealing with the political crap.And don't even want to have their business's in Louisiana.
It's crazy .
9-07-2007 @ 3:41AM
Terra Andersen said...
Ouch. That's pretty sad to hear. I agree that this was a great opportunity for Bush to prove himself, and it's sad that it seems he didn't take advantage of it like he could have. Great article!
-Terra Andersen
www.BetterForBusiness.com
9-12-2007 @ 5:19PM
Marjie said...
As editor for HGTVPro.com (which focuses on residential construction and remodeling) and a former resident of New Orleans, I've followed the post-Katrina debacle with frustration, exasperation and just plain disgust. I was impressed to see KB Homes step in so quickly to get to work. Sure, the federal government could have done better right after the flooding. However, this kind of state protectionism is absurd. Until fairly recently, the state required no licenses from contractors unless they were doing $500 jobs. And now to turn around and say that only Louisiana-style plumbing is adequate? Come on!
I have heard of no water-borne epidemics in Houston, Miami, New York, L.A., etc. I bet the plumbers in those cities could figure out how to run safe plumbing even in New Orleans. If a trained, licensed plumber (like my son-in-law) can meet the very strict codes in Chicago, he can do it in New Orleans.
And where was all this concern for citizens' safety when the City Council of New Orleans authorized electricians to inspect their own work? An awful lot of houses in NOLA are time bombs, waiting for damaged wiring that has been "repaired" by someone who gets to sign off on his own work. Heaven help those homeowners!
New Orleans, if you expect to get back to where you were before Katrina -- let alone make any progress -- you'd better start thinking in terms of what it takes to get the job done instead of how you can keep special-interest groups happy. I know that flies in the face of local tradition, but it's how most cities operate. Forget the proposed jazz museum and focus on the infrastructure. And get people back in their homes!!
10-07-2007 @ 8:22AM
jim said...
You can not just relax the plumbing codes for a whole state. When folks start falling over , another outcry will come because the state did not protect its people.