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CAPITOL OFFENSE The Agency that Bob Perry Built BY DAVE MANN AND LAUREN REINLIE It seemed a boon to homebuyers when the Legislature created a new state agency in 2003 to regulate the home construction industry. For nearly a decade, homebuilders had steadily erod ed consumer rights in Texas: Buyers who moved into brand-new houses and found cracked foundations and leaky roofs had little recourse. Some couldn’t file a lawsuit even if they wanted. They had signed housing contracts that forced them to resolve complaints through binding arbitration hearings notorious for favoring builders. The Texas Residential Construction Commission was supposed to help change all that. Legislators talked up the new agency as a forum to resolve impasses between homeowners and homebuildersa kind of marriage counselor for the housing sector. The agency was supposed to act as a mediator that, when necessary, would require homebuilders to make needed repairs. The commission would keep homeowners out of court and arbitration and save both sides a lot of legal fees. That was the pitch. In practice, however, the Residential Construction Commission has become another Texas state agency captive to the very industry it’s supposed to regulate. Homebuilders are some of the state’s heftiest contributors to political campaigns. Their interests so dominate the TRCC that the new agency is little more than a tool to help the industry win disputes against consumers. The main problem with the TRCC is an almost total lack of power to enforce its own rulings. When the commission does rule in favor of consumers, it can’t force homebuilders to fix the faulty houses. The result is that homeowners complete the lengthy complaint process and end up right back where they startedfacing a court battle or arbitration. Rather than help homeowners, the TRCC makes matters worse. “It places another hurdle that costs the consumer time and money before they go to court,” says Reggie James of Consumers Union. James and other consumer advocates who follow housing issues contend that they had almost no say in the drafting of last session’s little-noticed House Bill 730 that created the TRCC. The final legislationpassed with significant input from the governor’s officewas riddled with industry giveaways that slanted the commission in the homebuilders’ favor. In fact, much of the bill’s language came from John Krugh, general counsel for Houston-based Perry Homes, one of the state’s largest residential construction outfits. \(Krugh didn’t return three messages left at his Houston office seekspirit down [at the Lege] this time,” says Mark McQuality, a Dallas attorney who specializes in representing consumers in housing disputes. McQuality says he was always included in negotiations on housing bills in sessions past, but not in 2003. “They knew they had this one in the bag.” The homebuilding industry’s political power stems partially from its lavish donations to Republican campaigns over the past four years. Since 2001, the industry has donated more than $8.9 million to candidates, parties, and political action committees, according to an analysis by the campaign watchdog group Campaigns for People. That includes $744,562 to Gov. Rick Perry, $294,100 to Lt. Gov. David Dewhurst. and $60,500 to House Speaker Tom of the aforementioned Perry Homes, has been the largest single political donor in the state the past four years. He has given more than $6.9 million in that period, nearly all of it to Republican candidates. Though Perry is the most prolific check-writer, other construction magnates have been generous political contributors as well, including Woody Hunt of Hunt Construction Weekley of Houston-based Weekley So, not surprisingly, when Gov. Perry made appointments to the Residential Construction Commission in September 2003, the homebuilding industry found itself generously represented. HB 730 mandates that the building industry hold four permanent seats on the ninemember commission [“Consumers Get Housed,” TO, September 26, 2003]. Gov. Perry appointed Krugh of Perry Homes to fill one of those four spots. Of the other five so-called neutral appointees to the commission, at least four have direct ties to the homebuilding industry. Commissioner Mickey Redwine, for example, is president of a telecommunications cable company. But he also has managed numerous commercial construction projects in Texas and nationally, according to the TRCC Web site. By contrast, not a single consumer advocate sits on the commission. \(The TRCC has one lone consumer voice: Ware Wendell, policy director for the consumer advocacy group Texas Watch, serves on the Even if they want to, homeowners can’t sidestep the commission. HB 730 amends state law to require aggrieved homeowners to file a complaint with the TRCC and complete the agency’s “dispute resolution process” before they can file a lawsuit or go to arbitration. That forces homeowners into months of waiting for a resolution that never comes. 10 THE TEXAS OBSERVER FEBRUARY 4, 2005