LIANE HANSEN, Host:
This is WEEKEND EDITION from NPR News. I'm Liane Hansen.
Yesterday, NPR's Wade Goodwyn broadcast a report about Bob and Jane Cull, a Texas couple who've been fighting for 13 years to get their builder to fix construction defects in their new home. The builder's political connections are extensive - he's the biggest campaign contributor to judges and politicians in Texas.
Wade Goodwyn joins us now to continue the story. Hi, Wade.
WADE GOODWYN: Good morning, Liane.
HANSEN: So, to recap - this couple went up against Houston homebuilder Bob Perry, who not only fought them in court for a decade but then pressured the legislature to change the rules for all new homebuyers in Texas?
GOODWYN: That's right. Perry had his lawyer write a bill creating a brand new state agency that would help end frivolous lawsuits. And theoretically, at least, provide a different process for regulating the homebuilding industry. But the new process created by the builders and their allies in the legislature has created this statewide backlash from new homebuyers.
So, as we speak, the legislature is considering what to do about this homebuyer anger and these people who've gone through a process they say is stacked in the builders' favor.
HANSEN: And one of the options under consideration is to kill this state agency and start over from scratch?
GOODWYN: Yes. I mean, there's so much anger. But the builders are fighting to save the agency. They have deep pockets, and if you like politics, this is fascinating to watch.
(SOUNDBITE OF CROWD)
GOODWYN: It's 10:30 on a sunny Austin morning, and 1,000 homebuilders from all over Texas are rallying on the steps of the state capitol.
(SOUNDBITE OF CHEERING)
SCOTT NORMAN: Houston, Texas. Austin, Texas. Victoria, Texas. Who else?
GOODWYN: Out of 181 legislators, there are only six who don't take money from the Texas Association of Builders. So when the builders come to Austin to lobby, the most powerful politicians in the state pay their respects.
NORMAN: So, anyway, let's give a big Texas Association of Builders round of applause for the 47th governor of the great state of Texas, the honorable Rick Perry.
(SOUNDBITE OF APPLAUSE)
RICK PERRY: Scott Norman, thank you very much. Howdy.
Unidentified People: Howdy.
PERRY: Welcome to Austin, Texas. And a beautiful day here. And, you know, as I look out across that crowd today, I see leaders.
GOODWYN: The homebuilders are rallying to save the state agency, which theoretically regulates them. Now, imagine hundreds of executives from BP, Shell and Exxon Mobil rallying on the capitol steps in Washington to save the Environmental Protection Agency. Hard to picture, huh? Nevertheless, after hearing the governor's welcome, 1,000 homebuilders fan out to offices of every legislator, bearing small gifts and a message: Save the Texas Residential Construction Commission.
Unidentified Man #1: Hey, Luke, how are you doing? Y'all come on in.
(SOUNDBITE OF LAUGHTER)
Man #1: Good to see you.
HANSEN: Well, I have little gifts for you, just...
Man #1: Well, thanks. That's really nice.
Unidentified Man #2: We're proud of the way you represent us.
HANSEN: A level of excellence. Well, that's - well, thanks.
(SOUNDBITE OF LAUGHTER)
GOODWYN: Texas homebuilders are big fans of the job the Texas Residential Construction Commission has done, since its inception five years ago.
RON CONNALLY: We're happy, you bet. Court actions are way, way down because TRCC has taken care of a lot of those problems.
GOODWYN: Ron Connally is a homebuilder and developer out of Amarillo. He's also the president of the Texas Association of Builders. The Texas Residential Construction Commission, known as the TRCC, was written into existence by a lawyer for the most powerful and politically connected homebuilder in Texas, Houston homebuilder Bob Perry.
Perry's lawyer was then named the new housing agency's first commissioner by the Texas governor, who's taken hundreds of thousands of dollars in campaign contributions from the homebuilder. Connally says when the GOP gained control of both houses of the Texas legislature at the beginning of the decade, the homebuilders moved quickly.
CONNALLY: We were proactive. We didn't wait for the legislator to bring some bill that would try to control or regulate the builders - we worked hand in hand with them.
GOODWYN: The Texas Residential Construction Commission was designed to protect new homebuilders from frivolous lawsuits. Its mission is to provide an alternative state administrative process that resolves new homebuyer complaints before they go to arbitration. But two independent state reviews of the TRCC reported the commission routinely fails.
For example, only 12 percent of homebuyer complaints were resolved. And half of the time, homebuyers' grievances were rejected outright by the TRCC's inspectors. The process takes up to 20 months and can cost the homebuyer thousands of dollars.
TOM ARCHER: Two state reports on TRCC have concluded that it is beholden to the building industry.
GOODWYN: Tom Archer is the president of Homeowners of Texas, a nonprofit dedicated to residential construction reform. Archer says that of the nine TRCC commissioners who review homeowner complaints, the homebuilders regularly get seven votes.
ARCHER: In actuality, I think the number most would say would be eight out of nine.
GOODWYN: Archer says an even bigger problem with the TRCC is that the agency has no ability to discipline bad or even criminal builders. In Texas, there is no state licensing of builders. New homebuilders are not required by law to disclose known defects either, unlike sellers of existing homes.
Even if a builder is repeatedly negligent and deceptive, there's little the state can do about it. In five years of existence, the TRCC has revoked just one builder's registration. Archer says when it comes to protecting buyers of new homes, the Lone Star State is not exactly leading the pack.
ARCHER: I would say we're dead last. I don't believe there's any state in the country where the homeowner is up against more obstacles and more impossible tasks in terms of getting relief than they face here in Texas.
GOODWYN: The TRCC process is designed to keep new homebuyers out of court, where a state judge would hear the facts and rule. That's the way it used to be in Texas. But the executive director of the TRCC, Duane Waddill, believes his agency has been a big improvement over unreliable state judges.
DUANE WADDILL: So, it ultimately came down to a judge hearing dueling experts and that judge had to make the decision. So it was very arbitrary and was left in the hands of that adjudicator. And what we provide through our inspection process is a neutral professional...
GOODWYN: Waddill agrees the TRCC needs to tweak how it handles homebuyer complaints. But he says the agency does a good job of serving the interests of both builders and new homebuyers.
WADDILL: We want to do everything we can to make sure that people want to use our process. What we've seen in every review of ours has been that the agency is run well.
GOODWYN: When the TRCC was first proposed in 2003, most Republicans in the legislature supported it in the name of tort reform. But a steady stream of complaints has come out of the growing suburbs of Houston, San Antonio, Austin and Dallas. GOP legislators have been getting an earful from young, conservative, first-time homebuyers. Representative Dan Gattis represents the fastest-growing county in the state, just north of Austin.
DAN GATTIS: I have a builder in my community that currently has 37 felony indictments against him - you know, over basic TRCC- type of issues.
GOODWYN: Gattis says buyers of new homes in Texas, who are often first-time buyers, have to be better protected.
GATTIS: So when you're talking about the number one investment asset vehicle that anybody owns, there ought to be some protections there to make sure that people are not being taken advantage of.
GOODWYN: Dan Gattis is sponsoring a bill that would abolish the TRCC, but the Texas Association of Builders intends on doing everything it can to kill Gattis' bill and save their regulatory agency.
HANSEN: NPR's Wade Goodwyn, and he joins us once again. Wade, we heard from one reformer who said Texas is the worst state in the nation when it comes to protecting buyers of new homes. Are there any other states that have a system similar to the one in Texas?
GOODWYN: Rhode Island does. Delaware requires builders to register, but that's just to create revenue, that's not for regulation. There are 17 states who don't regulate builders at all, including New York, Colorado, Illinois, Pennsylvania, Vermont, Kentucky. But most investigators consider these states better than Texas, because at least they don't give homebuyers the illusion of a regulatory process. The two states that have the best reputation for homebuyer protection: California and Georgia.
HANSEN: NPR's Wade Goodwyn. Wade, thanks a lot.
GOODWYN: It's my pleasure.
HANSEN: You can hear the first part of Wade's series and see a chart showing the political contributions homebuilders have made to Texas politicians on our Web site, NPR.org.