You Call This A Home?
The next boom for builders may be complaints from angry homeowners

Residents of a new housing development in South Carolina fear that fumes from contaminated soil have caused dizziness and blackouts. In Colorado, homeowners say they were led to believe they'd enjoy a recreational lake that never materialized, causing property values to slip.

As the housing slump worsens, U.S. homebuilders increasingly find themselves fending off complaints of shoddy construction, unsavory sales tactics, and use of unsafe land.There's no definitive gauge of consumer sentiment toward builders, but several signs point to growing unease. The annual new-home satisfaction surveys done by J.D. Power & Associates, which like BusinessWeek is a unit of The McGraw-Hill Companies (MHP ), showed customer attitudes improving from 2001 to 2004 and then leveling off. But last year's survey, released in September, showed a 7% increase in the number of construction-defect complaints per home.

Criterium Engineers, a Portland (Me.) building-inspection service active in 35 states, found that from 2003 to 2006 the number of new homes with "significant problems" rose more than 13%. A public fund in Nevada created to settle builder complaints paid claims of nearly $1.2 million in 2006, up from $234,000 in 2003.

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