BATC Advocacy Update - Q1 2017

Q1

ADVOCACY UPDATE

Q1

ADVOCACY UPDATE

Dear BATC Members, Our work on behalf of the housing industry has been swift and intense in the first quarter of 2017. As we’ve heard from you and your industry colleagues consistently, the regulatory impacts and workforce challenges are the most pressing issues facing our industry.

We continue to build out and execute our industry and advocacy strategies to address these issues head on. We left 2016 riding a historically successful election for Housing First and our industry. Almost immediately, our efforts pivoted towards elevating the housing industry in a new and powerful way.

It begins with a powerful alliance with the Minnesota REALTORS®. Consistent with our strategic plan to leverage collaboration with like-minded organizations, our partnership with the MN REALTORS has positioned housing as a top-shelf issue. As you’ll see in this update, our Housing Day at the Capitol, legislative and regulatory progress are beginning to reflect this new energy.

Of course none of this happens without you, the foundation of a strong association. BATC leaders on the Board of Directors and in committees have provided the vision and energy to drive our agenda to increase first-time homeownership opportunities and to increase housing affordability for all Minnesotans.

On the ground, BATC’s professional staff and network of consultants are executing our strategic plan and finding success in big and small ways. The BATC team takes great pride in serving this industry. We hope you find this update to be informative, and we look forward to continuing our work elevating the housing industry.

Onward,

David Siegel Executive Director

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James Vagle Director of Advocacy

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LEGISLATIVE ADVOCACY BATC seeks to convey the impact of current and proposed legislation with elected officials at the state and local levels, and to influence the process to ensure that our builders and remodelers operate in a healthy and low-barrier environment.

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LEGISLATIVE ADVOCACY

600

Attendees Registered

Housing Day Shines in Opener Nearly 600 housing industry members attended the first-ever Housing Day at the Capitol on Thursday February 23rd. The monumental event marked the start of an exciting partnership for BATC with the Minnesota REALTORS, and featured the Minnesota Homeownership Initiative.

The Initiative is a package of commonsense legislative proposals that aim to protect the dream of homeownership for all Minnesotans by creating opportunities for first-time homebuyers and addressing the cost-drivers that are negatively impacting housing affordability. During this year’s Housing Day at the Capitol members of the housing industry were able to discuss the importance of the Minnesota Homeownership Initiative with 171 out of 201 legislators.

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The monumental event marked the start of an exciting partnership for BATC with the Minnesota REALTORS®, and featured the Minnesota Homeownership

Initiative.

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BATC and the Minnesota REALTORS® drew an impressive crowd that overtook the State Capitol

85%

of all MN Legislators met with Housing Day attendees

171

Legislator Meetings

took place throughout the afternoon

LEGISLATIVE ADVOCACY

Homeownership Initiative Moving Through Process We’ve officially reached the half-way point of the legislative session. March marks the deadlines in which committees must act favorably on bills.

We’re pleased to report that all pieces of the Minnesota Homeownership Initiative have met the appropriate deadlines. It’s clear BATC’s modern advocacy program is playing a central role in the elevation of housing affordability and homeownership at the Capitol.

31 8

19

Committee Meetings

Initiatives

1

87-44

Bills

Press Conference

Affirmative Floor Vote for Homeownership Initiative Bill

BATC Initiatives First-Time Homebuyer Savings Account SF 888 (Housley, R-St. Mary’s Point) has been heard in multiple committees and is now in the omnibus tax bill.

HF 1234 (Davids, R-Preston) has also been heard in multiple committees and is a part of multiple omnibus bills.

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Rulemaking Review Oversight David Siegel, Executive Director, and Tom Wiener, Builder Vice Presidents, Cardinal Builders, have testified numerous times on behalf of HF 1001 (Vogel, R-Elko New Market) and SF 745 (Kiffmeyer, R-Big Lake), a bill that would require legislative oversight for any proposed rule that would impact a homeowner by $1,000 or more. In the House, the bill has made the appropriate committee stops and has been referred to the House General Register. In addition to the stand-alone bill, it is also a part of the House Jobs and Economic Growth omnibus bill and is in the Senate State Government Finance bill. The companion bill, SF 745, has been heard in multiple Senate committees and awaits further discussion in the Finance Committee.

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Removing Barriers to Condo/Townhome Development SF 1455 (Dziedzic, D-Minneapolis) has been heard in the Senate Judiciary and Public Safety Finance and Policy Committee. With broad support from a variety of groups, SF 1455 advanced to the Senate floor. The companion bill, HF 1538 (Smith, R-Maple Grove), also passed out of committee and has been referred to the House General Register.

LEGISLATIVE ADVOCACY

BATC Initiatives (continued)

Public Notice for Housing Moratorium HF 330 (Nash, R-Waconia) passed through the House of Representatives with bipartisan support, 87-44, on March 2.

It has been introduced to the Senate General Register for discussion by the full body in the coming weeks. Senator Dan Hall (R-Burnsville), is leading the discussion in the Senate. In addition to the stand-alone bill it is also a part of an omnibus bill.

Job Opportunities in Construction The lack of workers trained in the construction trades is one of the biggest obstacles faced by our industry. Two bills, HF 1944 and HF 631 were introduced to address this issue. HF 1944 (Nash, R-Waconia) has been discussed in multiple committees and has most recently been referred to the Committee on Taxes. SF 1790 (Jensen, R-Chaska), the Senate companion, has been referred to the E-12 Policy Committee. In addition, BATC is working on a request for Workforce Development Fund dollars toward Project Build Minnesota, our collaborative effort to make the construction industry a career of choice.

Manufactured Homes Title Transfer HF 347 (Koznick, R-Lakeville) and SF 187 (Rudd, R-Breezy Point), bills that would modify manufactured homes titling process, have both worked through committees and been referred to their respective registers.

BATC v. DLI Townhome Definition Technical Fix

Homes Tax Conformity

For the past four years BATC has been fighting against mandated sprinklers in any single-family or twin home construction. Following our landmark victory in BATC v. DLI where the sprinkler mandate was struck down in one and two-family homes, the industry faced a new challenge- the court decision and code definition aren’t aligned. The 2017 legislature is addressing this technical issue with the House voting unanimously for HF 792 (Theis, R-St. Cloud). HF 792 now moves to the Senate where Senator Rich Draheim (R-Washington) will lead the discussion. In addition to the stand-alone bill, it is also a part of an omnibus bill.

An initiative that would make mortgage debt cancellation tax relief and mortgage insurance premium deductibility permanent features of Minnesota’s tax code. SF 824 (Draheim, R-Washington) and HF 1086 (Anderson, S., R-Plymouth) have both been introduced to their respective Tax Committees.

Additional BATC Supported Initiatives Uniform Standards A bill that would ensure fair and consistent labor standards across the state has passed the House and has been referred to the Senate General Register.

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VISIT

MNHomeownership.com to view the complete Minnesota Homeownership Initiative and watch the BATC Twitter and Blog for updates.

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Pat Hegseth, Chair of BATC’s Education and Workforce Developement Committee (Scherer Bros.), speaks at a press conference March 7 where BATC’s 2016 Legislator of the Year, Representative Jim Nash, introduced a bill that would encourage trades and vocational careers. BATC’s Executive Director David Siegel and BATC Members Tony Wiener, Cardinal Homes; and Missy Redman, T. Scherber Excavating, joined the conference in support.

LEGISLATIVE ADVOCACY

Homeownership Initiative in the Media

Minnesota Lawyer, March 27

Public Policy Committee Roster Bill Burgess (Chair) Lennar

Kent Brander

Civil Methods, Inc.

Bill Gschwind

Minnesota Construction Law Services

Ryan Hatton

Peter Coyle

Halleland Habicht PA

Bob Cumbow

Pulte Homes of Minnesota, LLC

Larkin Hoffman

Country Joe Homes

Robert Engstrom

Robert Engstrom Companies

Tamara Erickson Country Joe Homes

Paul Heuer

Roger Humphrey Stantec

Kendra Lindahl Landform Professional Services

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Andy Michels

Shawn Nelson

Nathan Jones

Greg Olson

Greg Livermont

Alden Pearson

Bob Michels

Ian Peterson

Shamrock Builders, Inc

Frank Kottschade

Matt Plec

Pioneer Engineering

Jason Mccarty

John Rask

Cardinal Homebuilders, Inc.

Michels Construction Tollberg Homes, LLC Andersen Windows

Michels Construction North American Realty, Inc. Westwood Professional Services

New Spaces ProEd

Alden Pearson, P.A.

David Weekly Homes Great Southern Bank M/I Homes

Paul Robinson

The Bancor Group, Inc

Joe Slavec

Minneapolis Garage Builders

Jim Stanton

Jenni Thompson Tom Wiener

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Vote F e b . 1 4 Anne Neu

for State Representative

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ELECTORAL ADVOCACY Electoral Advocacy is critical to the success of our comprehensive advocacy program. It is essential to participate in the electoral process to get individuals who are friendly to our cause elected to public office.

BATC uses its Housing First Fund and Housing First PAC to engage in the electoral process at the state and local government levels.

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ELECTORAL ADVOCACY

Special Election Victory Following a very successful 2016 Election in which all 16 of our endorsees were victorious, the Housing First PAC and Fund also became involved in the February 14th Special Election to fill the Minnesota House District 32B (Chisago County).

The Housing First PAC identified another Housing Champion by endorsing Anne Neu and the Housing First Fund ran independent expenditures in support. Neu won the seat in a close race, earning 53.22% of the vote. Neu now joins the growing caucus of Housing Advocates at the State Capitol.

17/17

Vote F e b . 1 4

Anne Neu

for State Representative

PAID FOR BY THE HOUSING FIRST FUND, NOT COORDINATED WITH ANY CANDIDATE OR CANDIDATE COMMITTEE

Endorsed Housing Advocates Elected 2016/2017 Elections

vot e

Feb. 14

yo ur friends & ne ighbors s upport

Anne Neu

Nue joins a growing caucus of Housing Advocates at the State Capitol

for State Representative

PAID FOR BY THE HOUSING FIRST FUND, NOT COORDINATED WITH ANY CANDIDATE OR CANDIDATE COMMITTEE

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Anne Neu

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Vote F e b . 1 4 PAID FOR BY THE HOUSING FIRST FUND, NOT COORDINATED WITH ANY CANDIDATE OR CANDIDATE COMMITTEE

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LEGAL ADVOCACY

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When an unfavorable or abusive law or rule must be challenged in court via a lawsuit, BATC steps up via its BATC Legal Defense Fund (BLD Fund). Association legal advocacy is the last line of defense for the industry.

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LEGAL ADVOCACY

Minnesota Supreme Court Hears City of Rochester v. Kottschade The Minnesota Supreme Court heard arguments in City of Rochester v. Kottschade on Wednesday, March 1. At issue in this case is whether Rochester can appeal an order for arbitration from a previous case before any arbitration takes place.

In 2010, the City of Rochester and Frank Kottschade, a BATC member and a Rochesterarea builder and developer, were ordered into arbitration by a district court in a separate court case.

Kottschade’s legal battle with Rochester is one of several cases BATC is engaged in that could have significant impact to the industry in Minnesota. A decision is expected in the coming weeks.

David Siegel, executive director, Nick Erickson, regulatory affairs manager, and Mark Foster, political engagement manager, attended the hearing in support of Kottschade.

Kottschade’s legal battle with Rochester is one of several cases BATC is engaged in that could have significant impact to the industry in Minnesota.

(L to R) David Siegel, BATC, Plaintiff Frank Kottschade, and Gary Van Cleve, Larkin Hoffman.

BATC Joins Appellate Court Battle Over Transportation Impact Fee in Harstad v. Woodbury BATC, in partnership with developer member Frank Kottschade and the National Association of Home Builders (NAHB), has joined as an Amici Curiae party (friends of the court) in the Harstad v. Woodbury legal action at the Minnesota Court of Appeals. Amicus briefs are approved by the court and serve the purpose of bringing attention to relevant matter not already brought to the case.

At issue is Woodbury’s appeal of the District Court’s finding that their Major

Roadway Assessment (MRA) fee is unlawful. Our brief argues that the District Court’s decision was the correct one, and that the Court of Appeals must affirm that decision.

tax that mirrors the road unit charge imposed by Eagan and struck down by the Minnesota Supreme Court in the landmark Country Joe, Inc. v. City of Eagan, which was decided 20 years ago.

Our core argument is that Woodbury’s Major Roadway Assessment (MRA) fee is unlawful because there is no statutory authority granted by the Legislature for any city to impose such a fee on development applications. Additionally, we argue the unauthorized impact fee is an unlawful

BATC has been the leader of the arguments against local governments using development agreements to raise general revenues for their respective cities. The Harstad case is extremely important as it affirms that cities possess only the authority granted by the legislature, and that any

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fees required of housing developments must be connected to the underlying development and must be fair, reasonable, and

proportionate. This case will be argued in the spring, with a ruling expected this summer.

Woodbury’s Major Roadway Assessment (MRA) fee is unlawful because there is no statutory authority granted by the Legislature for any city to impose such a fee on development applications.

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REGULATORY ADVOCACY

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BATC strives to illustrate the cumulative effect of multiple regulatory impacts on home building and remodeling. This involves working with government agencies to ensure that regulations applied to our industry are common sense, necessary, and based in sound science.

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REGULATORY ADVOCACY EXAMPLES

BATC Surges Into Regulatory Space BATC’s Advocacy Team has been working hard to share industry comments and concerns with regulatory and rulemaking agencies.

In January, BATC hired Nick Erickson to lead the organization’s regulatory affairs efforts.

Erickson, who has more than 10 years of public affairs experience, serves as BATC’s contact with the Department of Labor & Industry, Metropolitan Council, Department of Health, Minnesota Pollution Control Agency, Board of Soil and Water Resources and the Department of Natural Resources.

BATC has been busy reaching out to the industry’s regulators this quarter. BATC members and staff have met with the Metropolitan Council on land planning and land supply issues, the Minnesota Pollution Control Agency on the 2018 Construction Stormwater Permit, the Department of Health on the Renovation, Repair and Painting

(lead paint) rule and has had several meetings and conversations with the Department of Labor & Industry on a variety of topics. BATC has attended additional meetings with the Department of Labor & Industry’s Construction Codes Advisory Council, Minnesota Pollution Control Agency’s Water Reuse Workgroup and the Board of Soil & Water Resources.

Earlier this month, BATC held the first meeting of its Regulatory Affairs Subcommittee. This meeting was the organization’s first-ever gathering of a formal group of industry regulation experts. The Regulatory Affairs Subcommittee is comprised of BATC members with deep government, legal and housing industry experience. During its quarterly meetings, the subcommittee will examine the effect regulatory rulemaking has on home safety and affordability in Minnesota. Bill Gschwind, an attorney with Minnesota

Construction Law Services, is the Chair of the Regulatory Affairs Subcommittee and Nick Erickson is serving as the BATC staff lead.

Members of the subcommittee experienced in Minnesota’s Construction Stormwater Permit have already begun working with BATC staff on preparing recommended improvements for the MPCA to consider before the agency completes its draft of the 2018 Construction Stormwater Permit. BATC will be submitting these recommended changes in early April.

Subcommittee members familiar with lead paint rules and staff are currently reviewing the Minnesota Department of Health’s draft rule allowing the department to take over local enforcement from the EPA. BATC will continue to engage regulators on both issues as the agencies work through the rulemaking process.

of BATC’s Regulatory Efforts Include:

Working with agency staff to

improve permitting processes

Assessing the

impact of water regulations

Helping to craft

reasonable regulations on water reuse & deep engagement in the state’s

building and energy codes

The Regulatory Affairs Subcommittee will examine regulatory rulemaking and other policy initiatives from regulatory agencies affecting members and the Minnesota industry as a whole.

Regulatory Affairs Committee Roster Bill Gschwind (Chair) Minnesota Construction Law Services

Ross Anderson The Energy Network

Steve Behnke

Brian Cook

Matt Plec

Mike Swanson

Kent Brander

Paul Heuer

Kris Ronning

David Weetman

Bob Cumbow

Andy Michels

Jake Steen

Traditions by Donnay Civil Methods

Country Joe Homes

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DR Horton

Pulte Homes

Michels Homes

Great Southern Bank Lennar

Larkin Hoffman

JMS Custom Homes

Westwood Professional Services

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ISSUE ADVOCACY The advent of social media, technology, and the internet have substantially elevated the opportunities for issue advocacy. Issue advocacy refers to social media, digital and traditional advertising focused on broad political issues. The goal is to engage and persuade the public positively in support of our advocacy agenda. BATC achieves its issue advocacy through its growing Housing First Network (a 501c(4) organization).

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ISSUE ADVOCACY

Spreading the Industry Message Year-round, the Housing First Network is promoting the message of housing affordability, smart regulations and protection of the American Dream of homeownership for all. The network is actively engaging and persuading the public to think positively about our advocacy agenda, including the Minnesota Homeownership Initiative.

The Network has been and will continue to actively engage influencers throughout the state and the public at large via a series of issue ads. Examples of our messaging include: Every new home built adds four new jobs to our local economy; 84% of Twin Cities residents believe that owning a home is central to the American Dream; For every $1,000 increase in the price of a home, 4,000 Minnesota families are priced out of the market.

VISIT

HousingFirstNetwork.com

New homes build strong communities.

Rising regulatory costs in Minnesota make home ownership harder for middle-class families.

New homes build strong communities.

LEARN MORE

PAID FOR BY THE HOUSING FIRST NETWORK

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LEARN MORE PAID FOR BY THE HOUSING FIRST NETWORK

Q2?

WHAT’S NEXT FOR Coming Up Homeownership Initiative

Harstad v. Woodbury

The numerous pieces of the Homeownership Initiative will continue through the legislative process as stand-alone bills or as pieces of multi-prong omnibus bills.

The Harstad v.Woodbury case will be heard at the Minnesota Court of Appeals. A ruling can be expected sometime this summer.

RRP, CSW Public Comment

Elections The 2017 local elections are just months away and the 2018 elections will be here before we know it. Housing First will be evaluating potential involvement in municipal races and will begin discussions with announced 2018 gubernatorial candidates.

Regulatory rulemaking processes are underway.

BATC will be engaged with key agencies, drawing upon industry expertise from the regulatory sub-committee.

We’d like to thank our

2017 Board of Directors Bob Michels

Charlie Bradburn

Tom Wiener

Dennis Galligan

President Michels Homes

Associate Vice President ABC Millwork

Builder Vice President Cardinal Homebuilders, Inc.

John Rask Treasurer M/I Homes

Meg Jaeger

Immediate Past President New Spaces

Secretary In-Focus Systems

Jason McCarty

Past Associate Vice President Westwood Professional Services

Scott Busyn

Tim Fohr

James Julkowski

Gary Aulik

Art Pratt

Bill Burgess

Shawn Nelson

Artisan Home Tour Representative Great Neighborhood Homes, Inc.

Parade of Homes Representative Lennar

James Slaikeu

Past Presidents’ Representative Aulik & Associates, Inc.

Large Volume Representative D.R. Horton, Inc.

Jill Murphy

Membership Representative True North Consulting, LLC

Public Policy Representative Lennar

BATC Remodelers Representative Julkowski, Inc. Small Volume Representative Pratt Homes

At- Large Member New Spaces

Carla Warner

At-Large Member Warners’ Stellian Co., Inc.

BATC Advocacy Team

David Siegel Executive Director

James Vagle Director of Advocacy

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Mark Foster Political Engagement Manager

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Katie Elfstrom

Press Secretary

Nick Erickson

Regulatory Affairs Manager

Mary Schweich

Assistant to Public Policy

Peter Coyle Attorney & Lobbyist Larkin Hoffman