Builder Day at the Capitol

BUILDER

DAY AT THE CAPITOL

BUILDER

DAY AT THE CAPITOL AND LEGISLATIVE RECEPTION

Keep in Touch with OUR ADVOCACY TEAM

DAVID SIEGEL

REMI STONE

JAMES VAGLE

BUILDERS ASSOCIATION OF THE TWIN CITIES EXECUTIVE DIRECTOR david@batc.org Twitter: @davidsiegel1

BUILDERS ASSOCIATION OF MINNESOTA EXECUTIVE VICE PRESIDENT remi@bamn.org Twitter: @remistone

BUILDERS ASSOCIATION OF THE TWIN CITIES PUBLIC POLICY DIRECTOR james@batc.org Twitter: @jvags

JANE DEAUSTIN CENTRAL MINNESOTA BUILDERS ASSOCIATION GOVERNMENT AFFAIRS DIRECTOR jane@cmbaonline.org

MATT LIMOGES

PETER COYLE

BRIAN HALLORAN

LARRY REDMOND

ROCHESTER AREA BUILDERS PUBLIC AFFAIRS DIRECTOR

ATTORNEY & LOBBYIST, LARKIN HOFFMAN

LOBBYIST, REDMOND & ASSOCIATES

LOBBYIST, REDMOND & ASSOCIATES

MatthewL@rochesterareabuilders.com

Twitter: @mjlimoges

Homebuilding Matters Homebuilding Industry Member, Welcome to Builder Day at the Capitol 2015! Your work in building and remodeling homes is vitally important to our state’s economy! Our industry activity generates substantial state and local economic activity, including new income and jobs for residents, and additional revenue for local governments. You proudly employ 100,000 highly trained and skilled laborers, both union and non-union, plus thousands of trade partners in housing-related enterprises. The average wage for subcontractors is currently $28/hour in Greater Minnesota, and $32/hour in the MSP region.

As you are well-aware, the homebuilding industry continues down the long road of the housing recovery, building more than 16,000 homes across the state in 2014. While this is an improvement over the last several years, it is still 25% below a healthy annual production level.

You are also likely aware that our industry’s ability to deliver housing affordably has never been under greater regulatory pressure. From building code costs to aggressive land use policies, the regulatory cost drivers make providing housing affordability a major challenge. Minnesota has one of the highest regulatory cost burdens in the country. In fact, Minnesota is the highest housing-regulated state in the midwest. As an industry we must continue to work towards resolving this issue and promoting housing affordability.

Builder Day at the Capitol is an opportunity for you as an industry member to connect with your elected official and to share the industry priorities. Ask your legislators to consider the positive impacts of the homebuilding industry as they review policy proposals that affect Minnesota homeowners, our industry, and your business.

Thank you for joining us today at Builder Day at the Capitol!

#MNBDAC

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#homeBuildingmatters

Legislative Issues I. CODES INITIATIVE – DELAY, FIX, AND RESTRUCTURE Issue Background— What You Need to Know The Building and Energy Code Updates are now in effect; raising housing costs substantially and threatening housing affordability for all. The new energy code will raise the price of new homes by as much $10,000, and the sprinkler mandate will take homes over 4,500 square feet (4 bedrooms, 3 baths and an unfinished basement) and increase those prices as much as $25,000.

BATC filed a petition with the MN Court of Appeals to get the codes delayed and sent back for amendments—the delay was denied, but the main challenge continues.

With the Court denying delay, the legislature must act to bring relief to MN Homeowners looking to build or remodel their dream home.

This year’s building code update is one of the largest deterrents to purchasing new homes in recent Minnesota history.

Our Message to Legislators: Send the Code Back; Let’s Get the Code Right. Support these Bills: Remove the sprinkler mandate (Multiple Bills) Create an Energy Performance Path in the Energy Code which ensures the energy savings goals are met; but allows homeowners and builders multiple pathways to get there.

(Possible Amendment to SF 201/HF 539) Delay the code while these changes are made (SF 201/HF 539)

Going Forward with Building Codes – Support SF 201/HF 539 Update the code no more than every 6 years Build in a 12-month implementation timeframe when a code is updated Provide code books at no cost

THE NEW ENERGY CODE

will raise the price of new homes by as much as

$10,000

THE SPRINKLER MANDATE

will take homes over 4,500 ft2 and increase prices as much as

$25,000

(for a home with 4 bedrooms, 3 baths and an unfinished basement)

Legislative Issues II. HOMEOWNERSHIP INITIATIVE – WARRANTY & LIABILITY Issue Background— What You Need to Know Minnesota homeowners have strong homeowner protections in the Warranty Law and Common Interest Community Ownership Act. Over the years the legislature has made several changes to these laws to create a reasonable balance between homeowner protection and liability exposure to homebuilders and remodelers.

Notice and Opportunity to Repair (NOR) provisions require early communication and inspections of potential warranty claims – the goal is to identify any problems and to fix them quickly and at the lowest possible cost to all parties.

Warranty and NOR provisions are currently out of balance, which is directly affecting the construction of for-sale multi-family projects and is raising warranty service costs when NOR processes are not used to solve construction problems.

Our Message to Legislators: Support Legislation coming this session, which balances homeowner protection goals with reasonable processes to ensure that warranty questions are addressed in a timely and cost-effective manner.

Oppose SF 104/HF160 which would award attorney fees ONLY to homeowners and not contractors, even if they are the prevailing party.

Our Message

BALANCE HOMEOWNER PROTECTION GOALS

with REASONABLE PROCESSES TO ENSURE WARRANTY QUESTIONS ARE ADDRESSED

OPPOSE AWARDING ATTORNEY FEES TO HOMEOWNERS

only & not CONTRACTORS, EVEN IF THEY ARE THE PREVAILING PARTY

For too long the state has prioritized “affordable” housing subsidies to the detriment of housing for Minnesota’s mainstream workforce.

Legislative Issues III. HOUSING AFFORDABILITY INITIATIVE— WORKFORCE HOUSING Issue Background— What You Need to Know: For too long the state has prioritized “affordable” housing subsidies to the detriment of housing for Minnesota’s mainstream workforce.

Our Message to Legislators: Support SF 468/HF 684 which establishes workforce housing grants to award to qualified cities for expenditures related to the construction of or financing for market rate housing.

Policy makers are finally embracing the idea that to keep the economy going and homes affordable across the spectrum of ownership, they need to reduce regulation and encourage meaningful growth mechanisms such as grants, TIF, or tax credits in communities struggling to house workers who have good paying jobs.

ISSUES OF NOTE Met Council Growth Policies The Thrive 2040 regional growth framework has initiated intense discussions about the growth pattern of the Twin Cities metro as well as a deeper discussion about the core mission of the Met Council. BATC is deeply engaged in these discussions which occur with local governments, the Met Council, and now at the legislature with the creation of the House Sub-Committee on Metropolitan Governance.

Street Improvement Districts An annual issue in the transportation funding debate, the authority to create street improvement districts remains a key objective for local government groups. The homebuilding industry has successfully negotiated language which protects developing and newly developed parcels from the reach of the street improvement fees. BATC & BAM will be involved in the transportation debate to ensure that this position is maintained.

Appraisals Appraisals are among the most significant transactional items hindering the housing industry.

This issue is driven at the national level. In fact, the state repealed the department of commerce’s real estate appraiser advisory board.

BAM is working with our state and national real estate peers and the Department of Commerce to bring normalized appraisal criteria back to the state’s marketplace.

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