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Report: Green Building Outlook Strong for Both Non-Residential and Residential Sectors Despite Soft Economy

Report: Green Building Outlook Strong for Both Non-Residential and Residential Sectors Despite Soft Economy

The U.S. green building market continues to accelerate, according to McGraw-Hill Construction’s “2013 Dodge Construction Green Outlook” report. The value of green building has seen growth from $10 billion in 2005 to $78 billion in 2011. In 2012, the total market—non-residential and residential—is expected to be worth $85 billion, and by 2013, overall new green building is projected to rise to between $98 billion and $106 billion. By 2016, this number is expected to reach $204 billion to $248 billion.

According to the report, green building remains a bright spot in a still uncertain economy. Green is expected to represent 44 percent of all commercial and institutional construction in 2012, growing up to 55 percent by 2016. Residential green construction is also on the rise. It is expected that by the end of 2012, green homes will comprise 20 percent of the market, and in 2013 a 22 to 25 percent share by value is expected, equating to a $34 billion–$38 billion opportunity. By 2016, this share by value is expected to increase to 29 to 38 percent—an estimated $89 billion–$116 billion—based on the current single-family residential construction forecast.

To break it down further, while education construction is down, green has remained a stronghold at 45 percent, continuing to be the largest opportunity for green building. The office market has the largest share of green with 54 percent in 2012, a bright spot considering the overall expected growth of the sector in the near term.

Other key points found in the study include the following:

• Health-related green building labels are taking force in construction specifications, growing more rapidly than any other aspect of green, according to Dodge SpecShare.

• One third of all home builders in the United States are expect to be fully dedicated to building green by 2016.

• Green construction jobs are following the green building market; 35 percent have green jobs today.

• Eighty-one percent of executive leaders in corporate America believe the public expects them to engage in sustainability—one of the key forces driving corporations to institutionalize some green efforts. Thirty percent of senior executive officers report that they are greening two-thirds of the buildings in their portfolio—with 47 percent expecting to do so by 2015.

In addition to the sizing numbers by sector, the 2013 Dodge Construction Green Outlook also covers the benefits of green building investments, construction industry players and green jobs, key green building trends, green building products, and benefits of green and high performance investments. To order a copy of the report, visit

Dodge Momentum Index Holds Steady in November

The Dodge Momentum Index held steady in November, according to McGraw-Hill Construction a division of The McGraw-Hill Companies. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The Dodge Momentum Index registered a 92.5 (2000=100) in November, a 0.5 percent increase relative to October’s revised 92.0. After reaching a low point in mid-2011, the turnaround in the Momentum Index has been a relatively slow and hesitant one, with monthly upward movement often followed by a decline. A full-fledged recovery in future development plans, particularly for commercial building, has been hampered by the business sector’s anxiety about future economic conditions. Meanwhile, continued tight fiscal conditions at all levels of government have led to an uneven pattern for the institutional side of the index.

The modest gain in the November Index was the result of an increase for institutional building, which grew by 1.7 percent in November. The education component of the Index was a bit stronger in November, though it’s likely to settle back in the coming months as budget constraints linger. The increase in institutional building plans was partially offset by a decline in the commercial component of the index, which in November eased 0.6 percent from October. New development plans for office projects slipped in November, although new plans for store projects rose modestly over the month. The gain in the retail segment of the index was helped by the recent revival of plans for the Shops at Summerlin, a previously stalled project in northwest Las Vegas.

Builder Confidence Rises Five Points in November

Builder confidence in the market for newly built, single-family homes posted a solid, five-point gain to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index for November, released Nov. 19. This marks the seventh consecutive monthly gain in the confidence gauge and brings it to its highest point since May 2006.

“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates.”

“While our confidence gauge has yet to breach the 50 mark—at which point an equal number of builders view sales conditions as good versus poor—we have certainly made substantial progress since this time last year, when the HMI stood at 19,” observed NAHB Chief Economist David Crowe. “At this point, difficult appraisals and tight lending conditions for builders and buyers remain limiting factors for the burgeoning housing recovery, along with shortages of buildable lots that have begun popping up in certain markets.”

Derived from a monthly survey that NAHB has been conducting for the past 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three of the HMI’s component indexes registered gains in November. The component gauging current sales conditions posted the biggest increase, with an eight-point gain to 49—its highest mark in more than six years. Meanwhile, the component measuring sales expectations for the next six months held above 50 for a third consecutive month with a two-point gain to 53, and the component measuring traffic of prospective buyers held unchanged at 35 following a five-point gain in the previous month.

All four regions of the country posted gains in their HMI three-month moving averages as of November. The South posted a four-point gain to 43, while the Midwest and West each posted three-point gains, to 45 and 47, respectively, and the Northeast posted a two-point gain to 31. (Note: the HMI survey was conducted in the two weeks immediately following Hurricane Sandy and therefore does reflect builder sentiment during that period.)

Nationwide Housing Affordability Improves in Third Quarter

Lower interest rates helped make homes more affordable to median-income families even as house prices continued to inch up in metro areas across the country in the third quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, released Nov. 15.

Nationwide, 74.1 percent of all homes sold in this year’s third quarter were affordable to families earning the U.S. median income of $65,000. This was up slightly from the 73.8 percent of homes sold that were affordable to median-income earners in the second quarter.

“The latest housing affordability data is good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows,” noted NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “This is primarily due to the fact that mortgage rates are now lower than we’ve seen them since the HOI was initiated more than a decade ago. That said, given today’s overly tight lending conditions, we know that it remains very difficult for potential buyers to qualify for and obtain those great rates.”

“The median price of all new and existing homes sold in the third quarter was $189,000, which was up from $176,000 in last year’s third quarter and the strongest number we’ve seen since the final three months of 2008,” explained NAHB Chief Economist David Crowe. “But at the same time, mortgage rates were at their lowest levels in decades, which kept homes quite affordable. Clearly, for families who qualify for a mortgage at such favorable terms, the outlook is brightening—but being able to afford a home and getting approved for a mortgage are still two different things in the current marketplace.”

Topping the affordability list for the first time in the HOI’s history, Ogden-Clearfield, Utah, was named the most affordable major housing market in the country in the third quarter. There, 93.2 percent of all new and existing homes sold between July and September of this year were affordable to families earning the area’s median household income of $71,500.

Also ranking among the most affordable major housing markets in respective order were Youngstown-Warren-Boardman, Ohio-Pa; Indianapolis-Carmel, Ind.; Lakeland-Winter Haven, Fla.; and Toledo, Ohio.

Among smaller housing markets, Fairbanks, Alaska, retained its standing at the top of the affordability chart with an incredible 99.4 percent of all homes sold there in the third quarter being affordable to families earning the area’s median income of $92,900. Other smaller housing markets at the top of the index included Mansfield and Lima, Ohio; Wheeling, W.Va.–Ohio; and Kokomo, Ind.

Meanwhile, New York–White Plains–Wayne, N.Y. –N.J. retained the title of the least affordable major housing market in the country for an 18th consecutive quarter, with just 28.5 percent of homes sold there being affordable to families earning the area’s median income of $68,300.

Other major metros at the bottom of the affordability chart included perennial entrants San Francisco–San Mateo–Redwood City, Santa Ana–Anaheim–Irvine and Los Angeles–Long Beach–Glendale, Calif., as well as Bridgeport-Stamford-Norwalk, Conn., in that order.

The least affordable small housing market in the third quarter was Santa Cruz–Watsonville, Calif., with just 44.4 percent of homes sold being within reach of families earning the median income of $87,000. Other small metros at the bottom of the list included Ocean City, N.J.; San Luis Obispo–Paso Robles, Calif.; Laredo, Texas; and Santa Barbara–Santa Maria–Goleta, Calif., respectively.

Visit for tables, historic data and details.
Pace of New-Home Sales Virtually Unchanged in October
Sales of newly built, single-family homes in October held virtually unchanged from a downwardly revised pace in the previous month, at a seasonally adjusted, annual rate of 368,000 units, according to figures released by HUD and the U.S. Census Bureau Nov. 28.

“New-home sales have been occurring at a fairly steady pace since this summer, with October sales running about 17 percent ahead of the pace set at the same time last year,” noted Barry Rutenberg, chairman of the National Association of Home Builders and a home builder from Gainesville, Fla. “While this is encouraging, housing’s recovery is being significantly constrained by overly tight mortgage lending conditions at this time, and policymaker discussions about changes to the mortgage interest deduction could cast a shadow on future housing demand.”

“After steady improvement in home sales through most of this year, the pace of that activity effectively leveled off over the four months from July to October,” added NAHB Chief Economist David Crowe. “The latest numbers are right in line with our forecast, which projects that sales will resume a slow, upward trajectory going forward and will end 2012 about 20 percent ahead of 2011.”

Regionally, new-home sales numbers were mixed in October. The Midwest posted a 62.2 percent gain following a big dip in the previous month, and the West posted a solid 8.8 percent increase. Meanwhile, the South and Northeast posted declines of 11.6 percent and 32.3 percent, respectively—the latter of which was likely impacted by storm preparations at the end of the month.

The inventory of new homes for sale rose marginally to a still-slim 147,000 units in October, which is a 4.8-month supply at the current sales pace.

Housing Starts Up 3.6 Percent in October

Nationwide housing production rose 3.6 percent in October to a seasonally adjusted annual rate of 894,000 units, according to the U.S. Commerce Department. This is the highest pace of new-home construction since July 2008.

“This report is in line with our latest builder surveys, which show improving confidence and optimism in the marketplace as buyers take advantage of low mortgage rates and very attractive prices,” said Barry Rutenberg, chairman of the National Association of Home Builders and a home builder from Gainesville, Fla. “Builders are acting to meet rising demand while continuing to exercise caution by pulling a modest increase in the number of single family permits as the market continues to gradually gain its footing.”

“[This] report bears out similar changes in other economic indicators that housing continues to recover at a slow but steady place, and is right in line with our expectations of modest month-to-month growth,” said NAHB Chief Economist David Crowe. “However, we still have a long way to go to get back to normal production as inaccurate appraisals, tight lending conditions for home buyers and policy uncertainties continue to impede the recovery.”

Single-family housing starts in October were virtually unchanged at 594,000 units while multifamily production posted an 11.9 percent gain to 300,000 units—the best pace since July 2008.

On a regional basis, overall housing starts rose 17.2 percent in the West and 8.9 percent in the Midwest while posting a storm-related decline of 6.5 percent in the Northeast and 2.5 percent in the South.

Permit issuance, which can be a harbinger of future building activity, fell 2.7 percent to a seasonally adjusted annual rate of 866,000 units in October. The drop in permits was focused in the apartment sector as multifamily permits fell 10.6 percent from an unusually high September level to 304,000 units. Meanwhile single-family permits rose 2.2 percent to 562,000 units.

October Construction Starts Fall 14 Percent

The value of new construction starts retreated 14 percent in October to a seasonally adjusted annual rate of $434.9 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies.

Much of the decline was due to a sharp pullback by the electric power and gas plant category after a robust September. If this volatile project type is excluded from the month-to-month comparisons, total construction starts in October would register a 3 percent gain. Greater activity was reported in October for the public works sector, while both nonresidential building and housing settled back. Through the first 10 months of 2012, total construction starts on an unadjusted basis came in at $390.4 billion, a 4 percent gain relative to the same period a year ago.

The October statistics brought the Dodge Index to 92 (2000=100), down from the 107 reported for September. Over the first 10 months of 2012, the Dodge Index has fluctuated within the range of 85 to 116, averaging 97 during this period.

Nonresidential building, at $131.6 billion (annual rate), decreased 4 percent in October. The manufacturing plant category plunged 73 percent, continuing to pull back from the improved activity that was reported earlier in 2012. Warehouse construction also weakened substantially in October, falling 33 percent. Office construction in October slipped 3 percent, although the month did include the start of several noteworthy projects. On the plus side, hotel construction in October grew 7 percent. Store construction also registered a gain in October, rising 3 percent.

On the institutional side, the educational facilities category continued to lose momentum, dropping 3 percent. Even with the decline, several large education projects reached groundbreaking in October. More considerable October declines were registered by amusement-related work, down 22 percent; and transportation terminals, down 50 percent. The public buildings category posted a large October gain, climbing 92 percent. Healthcare facilities also registered a large October gain, advancing 37 percent with the help of five hospital projects valued each in excess of $100 million. Church construction in October edged up 1 percent, although activity continues to be very depressed.

Residential building in October dropped 2 percent to $169.9 billion (annual rate). The downward pull came from multifamily housing, which retreated 7 percent from September. During 2012, multifamily housing has fluctuated around an upward trend, and the pace for multifamily housing in October was still 23 percent above the level reported at the start of the year. Single-family housing in October was unchanged from September, maintaining the enhanced activity that’s been established over the course of 2012. The October single-family amount was up 25 percent from the level reported at the start of the year, and this project type had earlier shown gains in seven out of the nine preceding months.

The 4 percent pickup for total construction on an unadjusted basis during the first 10 months of 2012 was the result of increases for two of the three main construction groups. Residential building advanced 28 percent, with year-to-date gains of 27 percent for single family housing and 30 percent for multifamily housing. Nonresidential building continued to be the one major construction group to register a year-to-date decline, falling 14 percent. The nonresidential building decline was due to this behavior by segment: commercial building, up 2 percent; institutional building, down 15 percent; and manufacturing building, down 47 percent. On a square footage basis, nonresidential building in the first 10 months of 2012 was up 1 percent compared to a year ago.

By geography, total construction starts during the January–October period of 2012 showed a large gain for the South Atlantic, up 24 percent, with much of the upward push coming from the start of two massive nuclear power projects in Georgia and South Carolina. If these two projects are excluded, then total construction starts in the South Atlantic would be up only 1 percent. Year-to-date gains for total construction were also reported for the Midwest, up 6 percent; and the South Central, up 5 percent. Year-to-date declines for total construction were reported for the Northeast, down 6 percent; and the West, down 8 percent.

CertainTeed Ceilings to Form Grid Joint Venture with Canadian Steel Company

CertainTeed, Valley Forge, Pa., announced Dec. 13 its intention to form a joint venture with Bailey Metal Products Limited of Concord, Ont., to manufacture suspended ceiling grid in Canada and the United States. Bailey Metal Products Limited is Canada’s largest lightweight steel framing manufacturer and a leading provider of drywall trims and accessories.

In the short term, grid products in Canada will continue to be sold under both the Bailey and CertainTeed brands with a gradual transition for all grid products to the CertainTeed brand.
Manufacturers Benefit from New ICC-ES Initiatives
Manufacturers have expressed support for newly introduced ICC Evaluation Service initiatives and programs launched as part of a commitment to respond to the ICC-ES’s customers’ needs to swiftly get their products into the marketplace. ICC-ES has improved its processes to expedite the issuance of evaluation reports and has implemented a new customer relations management system to be able to provide more personal and tailored support to customers.

Highlights of the new programs include the following:

• An expedited service to directly meet the growing market entry needs of applicants and clients.

• A “SIPs Lite” evaluation process for structural insulated panels to the requirements of the International Residential Code.

• An expansion of the photovoltaic rack and mount evaluation program.

• A new working partnership with APA—The Engineered Wood Association to offer joint reports for engineered wood products.

Another recent accomplishment includes the city of Los Angeles Department of Building Safety’s acceptance of ICC-ES Evaluation Reports for many product categories without requiring the city’s own Research Reports.

According to Section 1703 of the International Building Code, approved agencies are independent, well equipped and thoroughly staffed. Building officials require that an approved agency employ educated personnel who are experienced in conducting and supervising product evaluations. ICC-ES meets those qualifications and is dedicated to exceeding customers’ expectations.

To find out more about ICC-ES new programs, contact Michael Temesvary at (800) 423.6587 ext. 3877 or

New Standard Contract for Federal Subcontractors Will Make It Easier for Construction Firms to Perform Federal Work

A newly revised standard subcontract for federal work will make it easier for general contractors and subcontractors to perform federal work. The updated ConsensusDocs 752 Federal Subcontract Agreement is designed to address recent changes in federal contracting such as requirements for certifying small business entities and new reporting of executive compensation requirements.

The updated agreement is designed to make it easier for contractors to comply with Federal Acquisition Regulations as well as federal contracting preferences, Kelleher noted. He added that it includes a special exhibit listing all FAR regulations that apply to the contract. In particular, the exhibit specifically addresses regulations by the U.S. Department of Defense, which are called DFARs, and General
Service Administration specific provisions.

One significant new provision now provides for attorneys’ fees if a general contractor withholds payments based on a Miller Act claim that is made in bad faith. Removed from this edition are references to certain federal stimulus funding requirements that do not apply to non-stimulus funded projects. The subcontract continues to address requirements and conform to federal practices in regard to E-Verify and immigration status.

Other federal subcontract flowdown requirements now addressed include notification of employee rights under the NLRA, and contractor’s prohibition on text messaging.

For more information, visit

Philips and Armstrong Ceilings Announce Collaboration of
DC Lighting Solutions and Grid Compatible with On-Site Power Generation

Philips announced Dec. 4 that it is partnering with Armstrong Ceilings to develop lighting solutions that are compatible with Armstrong’s low voltage DC FlexZone ceiling systems, which can help building owners reduce energy usage and implement cost effective site-based power generation and storage strategies.

The new offerings are intended to support recently adopted EMerge Alliance open industry standards that call for the use of DC power.

Super storm Sandy and its devastating effects on the East Coast, including buildings left without power for weeks, have called into question the susceptibility of public utility grids to power outages. This has made site-based power generation, storage and the technologies that can support them more top of mind for building owners and tenants.

By developing DC FlexZone compatible lighting products, the two EMerge partners are looking to accelerate adoption of DC technologies. The Philips lighting systems are engineered to integrate directly with the Armstrong DC powered ceiling system, using plug-and-play connectors that simplify initial installation, as well as future moves and changes.

For more information on the EMerge Alliance and its standards, visit

Sto Corp. Celebrates 25 Years in Canada

Sto Corp, Atlanta, launched Sto Industries Canada in 1987, and is now celebrating 25 years, maintaining a consistent presence across the country. Sto products are distributed in 30 locations in Canada.

Sto has maintained memberships and affiliations with numerous Canadian building envelope organizations and is a licensed manufacturer with the EIFS Quality Assurance Program. In addition, Sto is among the founding members of the EIFS Council Canada, an organization dedicated to establishing industry-wide standards. In 2003, Sto received a CCMC (Canadian Control Material Center) Evaluation for StoGuard Gold Fill as an air barrier material, and Sto is the only EIFS manufacturer to receive an evaluation as an air barrier. Now, in 2012, Sto became the first and only manufacturer to receive a CCMC evaluation report for a liquid-applied, water-resistive barrier as a sheathing membrane behind all claddings. StoGuard performed six times better than the code solution.

Also in 2012, Sto Corp. named John Edgar, a Sto veteran for more than 20 years, as technical director for Canada. Edgar has held positions including past president and current director of the EIFS Council of Canada, former member of the Standing Committee on Environmental Separation (part 5) National Building Code Canada; chairman, ULC Standards S716 Task Group for EIFS, representative for EIFS Council of Canada on ULC S700 Committee, and development partner for EIFS QAP (Quality Assurance Program). He has been nominated to the secretary position of the ISO TC (Technical Committee) 163 SC3 on insulation. Among the many items on the agenda for this committee will be the development of a global EIFS Standard.

People in the News

Bendheim Wall Systems, Inc., New York, N.Y., welcomes Fred D. Fulton and his firm, F1 Glazing Solutions, Inc., as its sales representative for the Ontario and Quebec provinces in Canada.

Fulton brings to Bendheim more than 25 years of industry experience, accompanied by long-standing relationships with many Canadian architects and glaziers. His long history in the glazing industry began as he grew up in the family business, Fulton Windows. Fulton started his sales representative business, F1 Glazing Solutions, Inc., after Fulton Windows was sold to Oldcastle, Inc.

Sto Corp. has appointed Rob Bottema in the newly created role of chief marketing officer for the company. With more than 15 years of experience, Bottema will be responsible for all corporate marketing, product management and sales activities.

Companies in the News

Sto Corp, Atlanta, announces a partnership with Webster & Sons Limited in Montreal, Canada. Webster & Sons is a family owned company that has been supplying exterior cladding to the building trade for 100 years. Webster & Sons will be Sto’s full line distributor, serving the greater Montreal area. The company will carry Sto’s complete product portfolio.

Sto Corp. has also partnered with a new distributor in the Carolinas. Guaranteed Supply Company, led by Pete Lovell, EIFS and stucco product manager, is the new distributor for Sto Corp. Lovell has sold EIFS and stucco products for 30 years with several different companies before joining Sto.

Rhino Linings Corporation, San Diego, a global provider of protective polyurethane, polyurea, polyaspartic and epoxy coatings, announces the acquisition of BioBased Insulation®, a division of BioBased Technologies® LLC. At the same time, BioBased Technologies® LLC, a leader in the sales and marketing of Agrol®, a bio-based family of polyols used in manufacturing, is acquiring the Soyol® polyol and related technology assets from Rhino Linings.

The strategic alliance of both companies will allow BioBased Technologies® LLC to focus on the development and continual improvement of renewable and sustainable solutions for the chemical industry with a large portfolio of bio-based polyols, and Rhino Linings to focus on spray foam systems for residential and commercial insulation. BioBased Insulation® is Rhino Linings’ second acquisition in the soy system business this year. Earlier this year, Rhino Linings acquired Soyol® polyol technology from Urethane Soy Systems Company.

Rhino will relocate BioBased Insulation® operations to the Rhino facilities in Carrollton, Texas. Terms of the acquisition were not released.

Acme Tools plans to build its fifth North Dakota store in Williston, N.D. The new store, scheduled to open in late summer of 2013, will be the 10th Acme Tools retail location in the Upper Midwest.

The new Acme Tools store will feature 20,000 square feet of office, showroom and warehouse space.

The store will initially create 15 new jobs.

Products in the News

Dow Building Solutions, a provider of energy saving solutions to the global commercial and residential construction industry, announced that the DOW™-Knight CI-System has been selected as a winner of the second annual Architectural Products Product Innovation Award.

The Architectural Products PIA recognizes product, material and system innovations that lead commercial and institutional design to new heights. Judging and evaluation of products and systems is conducted by a panel of 50 independent and diverse industry professionals including architects, designers, and veteran industry writers. The PIA program awards manufacturers based on attributes, qualities, functionality and/or performance beyond industry standards.

The Canadian Construction Materials Centre has declared that Superior Walls® Xi™ precast concrete insulated wall panels are now evaluated for use in Canada. The evaluation report was issued Nov. 8, 2012, and opens the door for sales of this foundation system throughout Canada.

New on the ’Net

At its Greenbuild International Conference & Expo, the U.S. Green Building Council announced the launch of the Green Building Information Gateway, Coined GBIG, the Web-based tool will accelerate market transformation by providing greater transparency and understanding of the green dimensions of the built environment.

GBIG provides a transparent view of places, projects, collections and credits, detailing the actions and activities of LEED building owners and project teams over time. The tool provides maps, analytics and insights that reveal trends, patterns and processes in green building practice.

Users can search and explore green building activity around the world, analyze trends and patterns in green building practice and discover connections between projects, people, products and services.

Fypon, a manufacturer of polyurethane and PVC millwork pieces that is based in Maumee, Ohio, has introduced a new YouTube® channel at The online channel features step-by-step product installation videos for contractors and homeowners.

New videos on the channel include the following:

• Installing a Faux Ceiling Beam

• Installing a Door Surround

• Installing a Column Wrap – Parts I and II

• Installing a Soffit Treatment – Parts I and II

• Front Porch Transformation Overview.

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