Housing Industry News Vol. 3 Issue 2 - June 2019 by Housing First Minnesota

M I N N E S O T A

HOUSING INDUSTRY NEWS VOL. 3 ISSUE 2, JUNE 2019

NEWS AND INFORMATION FOR HOME BUILDERS AND REMODELERS BY HOUSING FIRST MINNESOTA • HOUSINGFIRSTMN.ORG

The Minnesota Senate addressed the state’s growing housing affordability crisis with the creation of a select committee on homeownership affordability and availability

A new day for housing affordability Gov. Walz signs Legislative Commission on Housing Affordability, Senate Establishes Select Committee on Homeownership Affordability and Availability The Minnesota Legislature punctuated the 2019 legislative session by creating two forums focused on housing affordability and homeownership access. Gov. Walz signed the bill creating the Legislative Commission on Housing Affordability, which was joined by the Minnesota Senate’s creation of the Select Committee on Homeownership Affordability and Availability. Both entities will seat their respective members and begin work this summer. The creation of these bodies comes at a time when the region’s housing ecosystem is experiencing a myriad of

structural challenges. The chronic lack of supply of available homes for sale, dearth of affordable options and overall inability for the housing industry to construct affordably priced homes, highlight the many roadblocks impacting the market. “We are at a critical juncture with housing challenges impacting Minnesotans across the state and the Legislature and governor answered the call” said James Vagle, director of advocacy for Housing First Minnesota. For decades, housing policy has been largely created by agencies and local governments based on subject matter and delegation by the legislature. Requirements like the building and energy code are managed and updated by the Minnesota Department of Labor & Industry, while stormwater management is governed by the Minnesota Pollution Control Agency, along with a host of others. Additionally, regional entities like the

Metropolitan Council and the array of watershed districts maintain oversight, permitting and fee authority. Perhaps the largest single institution impacting housing remains local governments; the cities and townships which maintain zoning, permitting and inspection oversight. The sheer number of agencies overseeing housing development has presented a challenge for leaders seeking to achieve greater affordability for homeowners who pay for these regulatory requirements and fees in the final price of their home. This issue has been compounded by severe lack of coordination among the agencies. The result has been a growing — but ultimately disorganized — housing regulatory structure. Proponents of the Commission and Select Committee approach believe that these efforts will substantially increase the awareness and coordination around housing regulations. CONTINUED >> PAGE 6

INSIDE THIS ISSUE

New building codes taking shape Except for the residential energy code, DLI expects to release the proposed building codes in a two-week window. PAGE 4

Legislative wrap-up A full review of this year’s legislation affecting the housing industry. PAGE 11

Women in new construction As the construction industry struggles with an already dire labor shortage, how do we recruit more women to work in new construction? PAGE 17

Answering the call for action As the cost of a new home increases, two cities take proactive approaches

2960 Centre Pointe Drive Roseville, MN 55113 HousingFirstMN.org

HOUSING INDUSTRY NEWS

create jobs and expand the tax base of cities. According to a 2015 study from the National Association of Home Builders, for every 100 new homes built there is a one-year economic CONTINUED >> PAGE 7

M I N N E S O T A

PRSRT STD U.S. POSTAGE PAID PERMIT # 93652 TWIN CITIES, MN

With the cost of housing increasing at a rate much faster than wages, two cities in Minnesota are working to reduce what new-home buyers pay. Why? Growth is good for Minnesota cities. New homes bring new residents which, in turn,

HOUSING INDUSTRY NEWS

| 1

Housing at the Capitol READER’S GUIDE M I N N E S O T A

HousingFirstMN.org

Subscribe Stay up to date on the latest housing news. Subscribe to our blog at HousingFirstMN.org

Advertising For advertising information, rates, editorial calendar and production specifications, contact: Brad Meewes at 651-269-2399 (Brad@BATC.org) or Kori Meewes at 612-801-9874 (Kori@BATC.org)

News Tips Have an idea for a story for our next issue? Contact Editor Katie Elfstrom at Katie@BATC.org or send your story to Info@HousingIndustryNews.com

Be a part of the growing housing movement in Minnesota. Twitter: Follow us @HousingFirstMN Facebook: Facebook.com/HousingFirstMinnesota

HOUSING INDUSTRY NEWS June 2019, Volume 3, Issue 2 PUBLISHER David Siegel David@HousingFirstMN.org EDITOR Katie Elfstrom Katie@HousingFirstMN.org GRAPHIC DESIGN Adora Vang ACCOUNTING Janice Meyer ADVERTISING SALES Brad Meewes Kori Meewes CONTRIBUTING WRITERS Katie Elfstrom Katie@HousingFirstMN.org

Nick Erickson Nick@HousingFirstMN.org

Mark Foster Mark@HousingFirstMN.org

A new era for housing policy As we move through the second quarter of 2019, it’s becoming clear that a new era in housing policy is upon us. Nationally, major institutions like Freddie Mac, HUD and the Brookings Institute are leading a conversation that highlights affordability, restrictive zoning and housing supply as mainstream policy priorities for all levels of government to address. States like California are battling the housing crises with legal actions forcing local governments to adjust their rules. Furthermore, California’s legislature is

John Rask, 2019 president of Housing First Minnesota, vice president of land for M/I Homes

debating a major legislative initiative that would upend elements of local zoning control. Here in Minnesota, the Legislature took a major step forward with the creation of the Legislative Commission on Housing Affordability. Additionally, the Minnesota Senate created the Select Committee on Homeownership Affordability and Availability. This constellation of movements in the housing policy space is more than a consensus that a problem exists; it’s the clearest indication yet that our state is entering a new era in housing policy. This is welcomed news for the housing industry and the homeowners relying on our ability to supply a housing market with an array of choices and price points. Today, homeowners in Minnesota face dueling crises: affordability and availability. These challenges are deeply interconnected and rooted in structural challenges that have accrued over several decades. Fixing this won’t be easy, but it can be done. As Housing First Minnesota readies for this new era, we are guided by the principle goal of creating housing that is safe, durable and affordable for households across Minnesota. That may sound simple, but it really isn’t. Most policies impacting housing lack this essential balance

David Siegel

“If stakeholders and elected leaders can come together around the table to ﬁnd a proper balance, we have a chance to make some real progress.” John Rask, HOUSING FIRST MINNESOTA PRESIDENT

and were developed and debated in a silo. They were disconnected from the dozens of other rules and requirements throughout the housing regulatory landscape. The new era in housing policy gives us a chance to fix this with a new and better way. If stakeholders and elected leaders can come together around the table to find a proper balance, we have a chance to make some real progress. Let’s get to work!

David@HousingFirstMN.org

James Vagle

James@HousingFirstMN.org

ADMINISTRATIVE STAFF Kristen Ober Kristen@HousingFirstMN.org

Housing First Minnesota David Siegel, Executive Director John Rask, President The Housing Industry News is a publication of Housing First Minnesota. Housing Industry News is published and distributed four times per year to housing industry professionals and others associated with the home building industry. Neither the advertisers, nor Housing First Minnesota, will be responsible or liable for misinformation, misprints, typographical errors, etc., herein contained. For address change information, contact Housing First Minnesota. Suggestions, ideas and letters are welcome. HOUSING INDUSTRY NEWS 2960 Centre Pointe Drive Roseville, MN 55113 info@housingfirstmn.org www.HousingFirstMN.org Housing Industry News is published by Housing First Minnesota Entire contents copyright 2019 All rights reserved

Onward,

Housing First Minnesota is the voice for home builders, remodelers and all who are dedicated to building safe, durable homes at a price Minnesotans can aﬀord. Housing First Minnesota was created to advance the interests of the housing industry, engage industry members, and to be the leading resource for housing-related issues in Minnesota.

NEW RESEARCH IS COMING

Housing First Minnesota features a modern, comprehensive advocacy program that is dedicated to helping industry professionals grow their businesses. Housing First Minnesota recognizes its role as the state’s voice for the housing industry and engages industry members in advocacy opportunities related to grassroots advocacy, legislative lobbying, regulatory issues with state agencies, political elections, and events such as Housing Day at the Capitol. Our advocacy work has never been more important. The housing industry remains under intense regulatory and political pressures that impact Minnesota homeowners’ ability to buy, build, and remodel their dream home. Housing First Minnesota supports reasonable regulations and protections, but our call for balance in rules and aﬀordability for families is a voice that must be heard.

HOUSING INDUSTRY NEWS

THE HOUSING BEAT

Across the country, there is much talk about housing HERE ARE SOME OF THE LATEST QUOTES ON THE STATE OF THE INDUSTRY:

“

If the state wants to take on its housing shortage, especially at prices accessible to low- and middle-income households, it needs to rely on the private sector — and therefore must look at how government regulations and requirements contribute to the high cost of building.”

The cost of housing in the seven-county Twin Cities region is higher than cities like Austin, Texas; Nashville, Tennessee; and St. Louis. The region is on a trajectory to becoming as expensive as Denver or Seattle.”

“

Government could do some good by mitigating the higher costs of family life that it has caused — from health care to education to zoning and housing regulation, especially in metropolitan areas...” WALL STREET JOURNAL EDITORIAL BOARD

FAMILY HOUSING FUND REPORT PRESIDENT NEEL KASHKARI, FEDERAL RESERVE BANK OF MINNEAPOLIS

“

One of the biggest factors driving prices up and dragging supply down is the accumulation of burdensome government mandates and fees, zoning and landuse restrictions, environmental regulations, building codes, and permitting requirements…The most burdensome regulations come from local governments. And typically, it is the wealthiest communities that hike up the regulatory costs of homebuilding the highest.” DIRECTOR MARK CALABRIA, FEDERAL HOUSING FINANCE AGENCY

BUILD IN THE VALUE OF NATURAL GAS.

“

Overall, we simply need more housing at all price points and if there’s more housing, that decreases the pressure on the lower end of the housing market and creates more choices for everyone to live in our region.” LIBBY STARLING, MET COUNCIL

Energy-efficient natural gas appliances make your homes even more attractive and offer a greater value for your customers. And the best part is that it’s reliable and available when they need it. We even offer rebates on natural gas appliances, helping your customers save even more. Get more details at xcelenergy.com/NaturalGasBuilders.

HOUSING INDUSTRY NEWS

| 3

Housing at theAFFAIRS Capitol REGULATORY

Minnesota’s proposed building codes are expected to go into effect on March 31, 2020

New building codes taking shape First look at codes expected end of June For the past year, the technical and legal staff at the Minnesota Department of Labor & Industry (DLI) have been working on turning the model code changes reviewed by industry experts in 2018 into Minnesota’s new building codes. By the end of June, the housing industry will get its first look at what the next Minnesota building codes may look like. As of May 30, DLI has drafted the code administration, international building code, residential building code, existing building code, accessibility code, commercial energy code and fire code chapters. The provisions, as well as the statement of reasonableness and need, have been forwarded to Gov. Walz’s office and Minnesota Management and Budget, and will be released following an initial review. Except for the residential energy code, DLI expects to release the proposed building codes in a two-week window this summer. Each code chapter will then have a 30-day public comment period. The state’s Construction Codes Advisory Council (CCAC) will then hold a meeting, likely later this summer, to review the comments and the proposed codes.

Expected Changes While the proposed codes have not yet been published, last year’s review of model code changes provides a preview of what may be contained in the proposed codes. Recommended changes to the residential building code, chapter 1309, include specification on so-called tiny homes, clarification on the use of 5,000 psi concrete and clarification that hard-wired, interconnected smoke alarms be installed in existing home alterations only when interior wall or ceiling finishes are removed. The big question is whether or not Minnesota will have a new residential energy code. Energy Code At the June 2018 CCAC meeting, DLI said a decision on the adoption of a new residential energy code was premature as the United State Department of Energy had not yet released its review of the 2018 International Energy Conversation Code (IECC). CCAC took up the topic again at its May 30 meeting, with DLI staff updating the council on the status of the residential energy code. On May 2, the Department of Energy released its initial review of the 2018 IECC. A month earlier, DLI received an analysis from Pacific Northwest Laboratories looking at the changes specific to Minnesota’s energy code.

An analysis of the proposed changes by DLI shows that over the 30-year life of a mortgage, using standard accounting, the energy code change, on average, cost new-home buyers more over those 30 years than savings provided by increased energy efficiency. The review by the Department of Energy was preliminary, and under federal law Minnesota has two years to act on a new energy code following the Department’s final analysis, DLI will chart its next steps. Once the Department of Energy has released its final analysis, DLI will charts its next steps. According to DLI, an administrative hearing will first be held to recommend whether or not to open the residential energy code for review, with the DLI commissioner making the final determination. If the residential energy code is opened for review, a new residential energy code could be adopted. Next Steps With the exception of the residential energy code, the adoption of which is uncertain, Minnesota’s proposed building codes are expected to go into effect on March 31, 2020. Should the final adoption of the proposed codes be delayed beyond the end of March, the new code chapters would go into effect five days after their individual adoption. Housing Industry News will continue to follow the code process in both its online and print editions.

HousingFirstMinnesota

@HousingFirstMN

The Voice of Minnesota’s Housing Movement CONNECT WITH US ON FACEBOOK AND TWITTER

/HousingFirstMinnesota | @HousingFirstMN

HOUSING INDUSTRY NEWS

Regulatory Affairs Update: Dishwasher air gap may become optional Minnesota’s Board of Plumbing’s Ad Hoc Rulemaking Committee is nearing the end of its work on reviewing proposed changes to Minnesota’s Plumbing Code. Of all the potential changes, the most impactful is the move to make the dishwasher air gap optional. Under recommended language, the air gap on residential dishwashers becomes optional, the alternative option being running the discharge line as high as possible under the cabinet. Multiple requests for the removal of the air gap were submitted, including those from Housing First Minnesota, the Northwest Chapter of Building Officials, Kitchens By Design, and M&D Plumbing and Heating. The new plumbing board will review all recommended changes before deciding on adopting a new plumbing code, which will then go through the formal rulemaking process. The timeline for the adoption of a new plumbing code is not yet known. Lead Paint The Minnesota Department of Health released its first look at Minnesota’s Renovation, Repair and Paint (RRP) Rule on May 20, giving remodelers the first look into the draft Minnesota rule in 18 months. Like the RRP Rule currently administered by the Environmental Protection Agency, this rule, once adopted, will govern the remodeling

of pre-1978 homes and will be administered locally by the Department of Health. Since the last draft was published in December 2017, the EPA and the Department of Health have been working on an updated draft of the state’s rule. The current working draft, according to those close to the rulemaking effort, is expected to be much closer to the current EPA requirements than past versions distributed by the Department of Health. Two years ago, Housing First Minnesota organized a variety of housing groups to raise concerns over the sharp increase in remodeling costs under the initial proposal placed forward by the Department of Health. While many provisions are expected to follow the existing regulation, an on-site hygiene station, requiring a sign-in log for the worksite and renovators training certification length are different in the current draft. The Minnesota Department of Health accepted comments through June 14. The final rule is expected to go into effect by January 2020. Construction Demolition Waste The Minnesota Pollution Control Agency is still working to develop a construction and demolition waste recycling and reuse program. New regulations surrounding construction and demolition landfills could also be on the agency’s agenda. Stakeholder meetings are expected to begin this summer.

Under recommended language, the air gap on residential dishwashers becomes optional

MS4 Permit The Minnesota Pollution Control Agency released the draft Municipal Separate Storm Sewer System (MS4) Permit in May. Just as the Construction Stormwater Permit covers stormwater discharge on construction sites, the MS4 Permit outlines how municipalities can discharge stormwater into public waters. The new draft MS4 Permit has undergone the same rewrite as the 2018 Construction

Stormwater Permit, the MPCA staff is working diligently to reduce the size of the permit and it has been edited for clarity. The formal comment period for the MS4 Permit will occur later this summer. Have a story idea for this publication? Let us know! Send your story to info@housingfirstmn.org

YOUR CHOICE FOR: WALL & FLOOR PANELS

LUMBER FRAMING LABOR

NEW IN 2019!

EWP PACKAGES

ROOF & FLOOR TRUSSES

STRUCTURAL DESIGN CONSULTANTS

INNOVATIVE TURNKEY FRAMING SOLUTIONS JL SCHWIETERS CONST. INC. 13925 FENWAY BLVD N HUGO, MN 55038

SAVING YOU TIME & WASTE ON JOB SITES SINCE 1980.

651-762-1110 WWW. JLSCHWIETERS.COM INFO@JLSCHWIETERS.COM

HOUSING INDUSTRY NEWS

| 5

Housing at theAFFAIRS Capitol REGULATORY CONTINUED FROM PAGE 1

A new day in housing affordability “For too long housing affordability has taken a back seat in housing policy discussions,” said Housing First Minnesota Executive Director David Siegel. “The real winners today are homebuyers in Minnesota who are currently facing too

many roadblocks in our broken housing market.” The road to creating the Commission and Select Committee wound all the way to the final moments of the one-day special session May 24.

The Senate took an early interest in housing affordability, devoting significant committee time to the issue and passing SF 1294 (Draheim, R-Madison Lake) to the Senate ﬂoor and as a part of the State Government Finance bill.

LEGISLATIVE COMMISSION ON HOUSING AFFORDABILITY MAKEUP

Eight legislators: Two appointed from each caucus (Senate GOP; Senate DFL; House DFL; House GOP)

KEY OBJECTIVES

Study issues relating to housing affordability; Review emerging issues impacting housing affordability and homeownership access; Review housing policy innovations and workforce issues; Review of policies to reduce the homeownership equity gap; Define housing affordability.

Make recommendations to legislature on issues relating to housing aﬀordability. The commission model has served other complex policy areas well by providing specific legislation that has broad support from the underlying Commission.

TIMELINE

The first meeting must occur by June 15, 2019; The Commission expires on June 30, 2023.

Research Summary

104 ENTITIES 95 CITIES 8 COUNTIES 1 TOWNSHIP

Language as the State Government Finance working group reconciled the final version of HF 10. The Legislature passed the measure with strong bipartisan support and Gov. Walz signed the bill May 31.

SELECTIVE COMMITTEE ON HOMEOWNERSHIP AFFORDABILITY & AVAILABILITY MAKEUP

Five senators: Three appointed by the majority leader (Senate GOP); Two appointed by the minority leader (Senate DFL)

KEY OBJECTIVES

Review and study of issues relating to homeownership, housing aﬀordability and housing availability.

KEY POLICY ROLE

2015 REPORT YEAR

In the House, the Housing Committee declined to hear HF 1208 (A. Carlson, DFL-Bloomington) and devoted the bulk of the committee work to housing subsidy proposals. In the end, House conferees agreed to accept the Senate

2016 REPORT YEAR 104 ENTITIES 94 CITIES 8 COUNTIES 2 TOWNSHIPS

2017 REPORT YEAR 97 ENTITIES 90 CITIES 6 COUNTIES 1 TOWNSHIP

“The public and policymakers expect greater transparency from all levels of government, including cities.” Nick Erickson, HOUSING FIRST MINNESOTA REGULATORY AFFAIRS MANAGER

TRACK THE CONVERSATION ON TWITTER: @housingﬁrstmn #MNHomeownership

GET HOUSING NEWS AS IT HAPPENS:

Make findings and report recommendations to the Senate regarding issues aﬀecting the availability of aﬀordable owneroccupied housing.

TIMELINE

Appointments must be made by July 1, 2019; The Select Committee dissolves by the constitutional deadline to adjourn the 2020 legislature.

Report: Minnesota cities not compliant with reporting law Few local governments are filing required disclosures of permit and development finances, according to a report from the Housing Affordability Institute. In the follow-up to the organization’s first research effort, Priced Out: The True Cost of Minnesota’s Broken Housing Market, the Housing Affordability Institute studied three years of report data and found that the already low compliance rate is falling further. Under Minnesota law, municipalities collecting more than $5,000 in construction and development fees in a calendar year must file a report with the Minnesota Department of Labor & Industry by June 30 of the following year. Around 100 municipalities filed their annual reports in 2017, 2016 and 2015. The report concludes that a concerted effort to increase compliance is needed, and that modifications to the report format would yield a better look at construction and development finances at the city and county government level. “We’ve asked the Department of Labor and Industry to work at increasing the compliance rate,” said Nick Erickson, author of the report and regulatory affairs manager for Housing First

Minnesota. “The public and policymakers expect greater transparency from all levels of government, including cities.” The Minnesota Department of Labor & Industry has responded to the report, indicating it has developed a communications and outreach plan to encourage greater compliance on behalf of local government entities. In early May, the Department sent a letter reminding staff of the filing requirement to the 539 municipalities that adopted the state building code.

Nick Erickson, regulatory affairs manager, Housing First Minnesota

HOUSING INDUSTRY NEWS

CONTINUED FROM PAGE 1

Answering the call for action impact of $28.7 million in economic activity, $3.6 million in local government revenue and 395 jobs created. In the following years, the sustained effect of these 100 homes is $1 million in added local government revenue, 69 jobs and $4.1 million in added economic activity. North St.Paul is Booming In the Twin Cities suburb of North St. Paul, the city is seeing its first large-scale new home development since the 1950s. Earlier this year, the city and M/I Homes partnered on the Gateway at McKnight, which lies on a former block manufacturing site. This new development will be made of 100 townhomes, priced in the upper $200,000s. As a former industrial site, site cleanup was necessary before redevelopment. As part of its downtown revitalization efforts, the city of North St. Paul established a TIF district to help with cleanup and soil corrections. “Strong leadership on the city council and a cooperative city staff allowed the project to move through the entitlement process in less than three months,” said John Rask, vice president of land for M/I Homes. “We develop in communities all across the Twin Cities and have never seen anything close to the level of cooperation that we received from North St. Paul. Too often cities act only in a regulatory capacity and miss an opportunity to achieve

better results by working in collaboration with builders and the development community.” Fargo-Moorhead Divide According to permit numbers, the Fargo-Moorhead area has been growing at a fast pace the past several years. These same figures show that most development is happening on the North Dakota side of the Red River, with the number of new homes in Moorhead much lower. Data of new home development in the area points to home prices as the reason why. In Fargo, the price per square foot for an entry-level home is between $103 and $114 per square foot. In Moorhead, it’s nearly double, at $198 per square foot. Attracting buyers to the Minnesota side of the river has been an important goal for the city for the past few years. In 2017, the city actively worked to end the twin home sprinkler mandate in Minnesota, which was helping to shirt nearly all twin home development in the area to North Dakota. When the bill was signed into law, then-Mayor Del Rae Williams held a press conference announcing Moorhead was open for development. The city also runs a website called “Make Moorhead Home” to attract new residents to the city. The website features information

Gateway at McKnight development, North St. Paul

about the community and links to information on builders and Realtors. Moorhead is also looking inward to see what incentives the city can offer to lure new residents. To help offset the costs of building a new home, Moorhead offers a two-year tax rebate. New-home buyers receive a rebate of all general taxes paid for the first two tax years after their home is completed and the property is fully valued for tax purposes. In the first five

years of the program, more than 800 residents have taken advantage of this program. “It’s great to see cities begin to take a proactive approach to decrease the cost of new housing,” said David Siegel, executive director of Housing First Minnesota. “Each city has shown in its own way that local governments possess the power to decrease the cost of housing when they chose to.”

Wet spring brings an added emphasis on construction stormwater management

Third wettest spring on record brings added attention to stormwater management

Summer is prime building and development time. It also happens to be the three wettest months in Minnesota. This year already ranks as the third wettest year on record, which brings an added emphasis on construction stormwater management practices. The Minnesota Pollution Control Agency has put together a list of the top five construction stormwater violations. 1. Missing or inadequate soil stabilization. Without proper stabilization, the soil is vulnerable to erosion. 2. Missing perimeter controls. When perimeter controls are missing, stormwater carries sediment off-site and into waters of the state. 3. Missing or inadequate inlet protection. Missing or inadequate inlet protection allows sediment to enter the storm sewers and/or bodies of water.

4. Vehicle tracking. Without a tracking BMP, vehicles track sediment onto paved surfaces. 5. BMPs not contained. Unmaintained BMPs do not function properly and allow sediment to escape and enter waters of the state. Stay Compliant Ensure that you have a Construction Stormwater Permit and Plan if one is needed. Remember to inspect your site within 24 hours of rainfall more than half an inch. Repair, replace, or supplement all nonfunctional BMPs by the end of the next business day after the discovery, or as soon as field conditions allow access unless another time frame is specified by the Minnesota Pollution Control Agency.

TOP 5 CONSTRUCTION STORMWATER VIOLATIONS 1

Missing or inadequate soil stabilization

Missing perimeter controls

Missing or inadequate inlet protection

Vehicle tracking

BMPs not contained

HOUSING INDUSTRY NEWS

| 7

Housing at theAFFAIRS Capitol REGULATORY

Long winter leads to late load limits A late winter meant a late start to the Minnesota Department of Transportation’s Spring Load Restrictions. In the southern portion of the state and in the Twin Cities region, Spring Load Restrictions went into effect on March 15, 10 days later than in 2018. In central and northern Minnesota, the load limits went into effect on March 19, a few days later than in 2018. Seasonal restrictions were lifted in early to mid-May for the entire state: May 5 for

Average Starting Date of Spring Load Restrictions 30-year Average (1971-2000)

the metro area, May 10 for southern Minnesota and May 14 for the rest of the state. Despite the later start and end to seasonal restrictions, builders and developers reported fewer issues than in 2018. The start and end of road restrictions depend on how the weather is affecting road strength. There is an eight-week maximum duration for Spring Load Restrictions, and the Twin Cities area saw restrictions lifted before reaching the maximum.

Seasonal load limits lifted mid-May in 2019

CHART: MNDOT

STILL USING 1980’s VENTILATION? Choose Quarrix for the best style and performance

Before

After

FREE TRAINING

“Ventilation Best-Practices” Best for hail, snow & rain

HOUSING INDUSTRY NEWS

On-roof intake vent

Frost-free & Lead free

Install 60x faster

Rainscreen solutions

Go to Quarrix.com/TrainMe

U of M policy fellows look into skilled labor shortage

Like the construction industry, agriculture, health care, information technology and transportation employers are struggling with a labor shortage. With so many industries affected by the lack of skilled labor, the topic was ripe for study by the University of Minnesota’s Policy

Fellows. A part of the Humphrey School of Public Affairs, this program is one of the country’s most respected programs for public affairs professionals. Since November 2018, this diverse group of policy professionals has worked on finding ways to help address the lack of skilled labor

“One of the biggest takeaways for the construction industry was the importance of forging partnerships with career and technical programs at local high schools.”

Nick Erickson, HOUSING FIRST MINNESOTA REGULATORY AFFAIRS MANAGER

and connect underrepresented populations to technical careers. In early May, the policy fellows hosted a roundtable on the state’s skilled labor shortage at the office of Housing First Minnesota, bringing together trade associations, nonprofits, government, educators and private industry to share best practices and challenges. The attendees also discussed how collaboration and partnerships between different organizations can yield positive results. “It was so great to see the diversity of employers and skilled builders in the room,” said Lucas Sjostrom, policy fellow and president of Minnesota Milk. “These are people that I see

at the Capitol or are making their communities stronger, but having all that brainpower in one room was really rewarding. I look forward to continuing the momentum.” Partnerships between education and industry emerged as a common theme from this session, according to Nick Erickson, policy fellow and staff at Housing First Minnesota. “One of the biggest takeaways for the construction industry was the importance of forging partnerships with career and technical programs at local high schools,” Erickson said. The policy fellows presented their findings at the University of Minnesota’s Policy Fellows final session on June 7.

Minnesota builders take home three awards at RESNET conference Local builders receive more awards than any other state At the 2019 RESNET Annual Conference in March, Minnesota took home three of the top 10 awards in energy efficient new home construction. The most decorated American builder at the conference was Lennar Minnesota, the only American firm to take home multiple awards. Lennar Minnesota’s first award was the American Production Builder with the Lowest HERS rating, with a home rated at 42. Lennar Minnesota also took home the RESNET President’s Award, having achieved a HERS rating

of 52 or lower on 81% of homes built in the state. “Lennar builds an outstanding home, and it is exciting to see the Minnesota team get the recognition it deserves for being a leader in energy efficiency,” said Eric Boyd of DPIS, the energy rater for Lennar Minnesota. The lowest HERS scores from an American custom builder went to the Vetting Wolf home in Rochester, Minn. XRG Concepts, the energy rater for the home, worked with the Vetting Wolf family to design a net-zero home, which was originally rated at a 32. Since the completion of the home, the Vetting Wolf family installed solar panels, dropping the HERS rating to -3, according to XRG Concepts. Lennar home in Inver Grove Heights

HOUSING INDUSTRY NEWS

| 9

Housing theTHE Capitol HOUSINGatON HILL

Rep. Steve Elkins discusses housing development policy elected officials (and their constituents) are focused on ensuring that new development “fits in.” These ways of thinking have led to low-density zoning and requirements for unnecessary amenities, making it impossible for builders to profitably build new homes for less than $350,000 at a time when the hottest part of the market is for $250,000 starter homes. Developers have demonstrated the demand for homes on 1/5 of an acre, or less; however, there is no suburban city in the region where this form of affordable small lot development can be built without going Rep. Steve Elkins through the expensive planned-unit development process. We have to achieve a meeting of the minds between cities and developers over development impact fees. Cities are overloading allowable impact fees like the Park Dedication Fees to make up for the absence of allowable impact fees

Rep. Steve Elkins (DFL) represents Minnesota House District 49B in southern Hennepin County including parts of Bloomington, Edina, Eden Prairie and Minnetonka. Q: What has surprised you about the legislative process in your first year?

A: After two decades in nonpartisan local and regional government, I’ve been disappointed at just how partisan the process really is. Once you get into the session, most votes are either unanimous or straight party line. I’ve identified a few Republican legislators who I know I can work with on specific issues, such as housing policy, and plan to work with them over the summer to bring forth bills that can attract bipartisan support in 2020. Q: Land Use and affordability are growing topics of interest in public discourse and public policy. How does your experience as a former Bloomington City Council member and a member of the Metropolitan Council shape the way that you approach these issues?

A: When it comes to housing, municipal administrators are focused on ensuring that new development pays for itself; while local

for collector street construction and trunk sewer lines. When cities can’t cover the costs of building essential infrastructure required by new development, they resort to the imposition of development moratoria and they refrain from petitioning the Metropolitan Council for extensions to the Metropolitan Urban Services Area (MUSA). These tactics restrict the supply of developable land and drive up the price of land. Q: How do you and your colleagues resolve the competing goals of affordability, local control, and regional coordination?

A: Most of the housing discussion this year has centered on finding ways to subsidize the construction and preservation of affordable housing. My experience tells me that we’re not, yet, paying enough attention to the regulatory barriers that prevent homebuilders from constructing more affordable housing without government subsidies. The Housing First Priced Out study hasn’t received

the attention that it deserves. It really does a good job of framing the necessary discussion that needs to occur among cities, developers and the legislature. Q: As a former member of the Metropolitan Council, do you think that this body is doing everything that it could to advance the discussion?

A: The Metropolitan Council has much less authority over housing policy than most people think, and it can’t direct cities to change the policies that most directly affect the price of housing. It can’t direct cities to expand the MUSA if they don’t want to. It can use the Livable Communities grant program to reward cities which guide land for the production of multifamily housing, but they can’t force them to zone the land in a consistent manner (the subject of my HF2323 bill), and they certainly can’t require them to build it. They can require cities to plan for housing development at an average density of at least three units/acre, but they can’t prevent the same cities from guiding large swaths of land exclusively for McMansions on 1-acre (or larger) lots. If we’re going to solve these problems, we’re going to have to focus on the cities directly.

Housing First Minnesota honors legislators 31 receive Housing Leadership Award

2019

Housing Leadership Award Recipients

Housing First Minnesota, the state’s leading voice for home builders and remodelers, recognized 31 Minnesota legislators as recipients of the 2019 Housing Leadership Awards. The award recognizes legislators for their efforts throughout the 2019 legislative session to promote homeownership at a price that families can afford. Minnesota House of Representatives

Representative Jeff Brand

Representative Andrew Carlson

Representative Kurt Daudt

Representative Steve Elkins

Representative Brian Johnson

Representative Tony Jurgens

Representative Jon Koznick

Representative Shane Mekeland

Representative Jim Nash

Representative Michael Nelson

Representative Anne Neu

Representative Nels Pierson

Representative Kristin Robbins

Representative Tama Theis

Representative Duane Sauke

Representative Bob Vogel

Representative Ryan Winkler

Representative Dan Wolgamott

• • • • • • • • • • • • • • • • • •

Representative Jeff Brand (St. Peter) Representative Andrew Carlson (Bloomington) Representative Kurt Daudt (Crown) Representative Steve Elkins (Bloomington) Representative Brian Johnson (Castle Rock) Representative Tony Jurgens (Cottage Grove) Representative Jon Koznick (Lakeville) Representative Shane Mekeland (Clear Lake) Representative Jim Nash (Waconia) Representative Michael Nelson (Brooklyn Park) Representative Anne Neu (North Branch) Representative Nels Pierson (Stewartville) Representative Kristin Robbins (Maple Grove) Representative Tama Theis (St. Cloud) Representative Duane Sauke (Rochester) Representative Bob Vogel (Elko New Market) Representative Ryan Winkler (Golden Valley) Representative Dan Wolgamott (St. Cloud)

Minnesota Senate

Senator Tom Bakk

Senator Rich Draheim

Senator John Jasinksi

Senator Paul Gazelka

Senator Mary Kiffmeyer

Senator Mark Koran

Senator Dan Hall

Senator Nick Frentz

Senator Jason Rarick

Senator Mike Goggin

Senator Bill Weber

Senator Torrey Westrom

Recipients of the Housing Leadership Award received a certificate and letter of appreciation.

10 |

HOUSING INDUSTRY NEWS

Senator Jeff Howe

• • • • • • • • • • • • •

Senator Tom Bakk (Cook) Senator Rich Draheim (Madison Lake) Senator Paul Gazelka (Nisswa) Senator Dan Hall (Burnsville) Senator Nick Frentz (North Mankato) Senator Mike Goggin (Red Wing) Senator Jeff Howe (Rockville) Senator John Jasinksi (Faribault) Senator Mary Kiffmeyer (Big Lake) Senator Mark Koran (North Branch) Senator Jason Rarick (Brook Park) Senator Bill Weber (Luverne) Senator Torrey Westrom (Elbow Lake)

LEGISLATIVE WRAP-UP: HOUSING INDUSTRY The Legislature oﬃcially adjourned the 2019 special session. Several industry-related issues were signed into law by Gov. Walz. Headlining the session for the housing industry was the creation of two bodies, a commission and select committee to study and make concrete recommendations for policy changes relating to housing aﬀordability and homeowner access. Also gaining traction was a significant budget commitment to housing subsidy programs. Beyond those issues, there were several other measures relating to business operations in housing and construction.

Legislative Commission on Housing Affordability The multiyear commission is charged with analyzing issues relating to housing aﬀordability and will ultimately recommend housing policies that balance safety, durability, local control and aﬀordability. It is comprised of two DFLers from the House, two DFLers from the Senate, two Republicans from the House and two Republicans from the Senate.

Select Committee on Homeownership Affordability and Availability The Select Committee is made up of three senators from the majority party and two from the minority party. It is charged with making findings and recommendations to the Senate on housing-related policy matters relating to aﬀordability and homeownership access.

Housing Subsidy for Affordable Housing Projects

Contractor Recovery Fund; Consumer Awareness Campaign

Though a small portion of the overall housing market, the subsidized housing eﬀorts make critical investments in communities across the state. The Legislature and governor agreed to a $78 million investment for emergency shelter, rental assistance, preservation and production.

Under this provision, the commissioner of labor and industry will conduct a statewide consumer awareness campaign in fiscal years 2020 and 2021 highlighting the importance of hiring licensed contractors as well as the consequences of hiring unlicensed contractors. This will be funded with dollars from the contractor recovery fund, up to $500,000 per year.

•

$60 million in Housing Infrastructure Bonds to build and preserve aﬀordable housing.

•

$5 million increase in onetime funding to the Economic Development & Housing Challenge Program, a key funding source to develop aﬀordable multifamily and singlefamily homes.

•

$10 million/biennium increase in ongoing funding to Minnesota Finance Housing Agency (MHFA)

•

$3.5 million/ biennium Homework Starts With Home

• • • •

Third-Party Consultant Reforms

• •

SF 998 was signed into law by Gov. Walz after broad bi-partisan support. Under the new statute parties seeking “a permit, license, or other approval relating to real estate development or construction” have the authority to request a written, nonbinding estimate of the consulting fees to be charged as part of the permit application.

• • • •

$3.5 million/biennium increase to Family Homeless Prevention and Assistance Program (FHPAP)

$500,000/biennium to Workforce Homeownership Program $500,000/biennium increase to Bridges $3 million one-time funding to Emergency Services Program (Department of Health & Human Services)

Sen. Jeff Hayden (DFL-Minneapolis) and Rep. Jim Davnie (DFL-Minneapolis). “Minnesota’s deep segregation is not by accident. Racial covenants existed to stop African Americans and people of color

New legislation signed into law requires one hour of business management strategies training as a part of 14 credit hours required for Minnesota contractors within their two-year licensing period. This is similar to the currently required energy hour in that it requires specific curriculum, but does not add to the total number of hours required within the two-year licensing period.

$2 million/biennium to Manufactured Home Grants

Bill to remove race restrictions on housing signed into law Gov. Tim Walz signed Chapter 45, a bill allowing homeowners to remove racial covenants on residential housing. The bill passed the Minnesota Senate 63-1 and the House 128-0. The bill’s authors were

Contractor Continuing Education Curriculum Business Management

License Number to be Displayed

Retainage Under the provision signed into law, public and private entities are required to pay out all retainage within 60 days of substantial completion. After substantial completion, the provision allows for withholding of up to 250% of the value for incomplete or defective work.

Simplifying Real Estate Advertising for Licensees A bill to simplify advertising requirements for real estate signees was signed into law. The old standard rule of having the brokerage name more prominently displayed than the licensee is replaced with a requirement that a licensee “clearly and conspicuously display” the brokerage name in any advertising undertaken by the licensee.

Wage Theft Under this provision signed into law, wage theft in excess of $1,000 is a felony crime. It also penalizes retaliation against employees who report wage theft. The Department of Labor and Industry and the attorney general are tasked with enforcement.

Any vehicle used by a plumbing contractor while performing plumbing work shall have the contractor’s name and license number in contrasting color aﬃxed to each side of the vehicle.

from owning property in certain areas, and we see the ramifications of these covenants to this day. This bill will help homeowners reject racial covenants and is one step in working to address disparities in Minnesota,” said Hayden. The Twin Cities is among the leading regions in the country when it comes to racial gaps in homeownership. While the

level of white homeownership is 12 points above the national rate at 76%, homeownership among African Americans is 23% and people of color broadly 40% – both well below the national average. The newly created Legislative Committee on Housing Affordability is charged with studying and reviewing policies to reduce the homeownership equity gap.

Rep. Jim Davnie

Sen. Jeff Hayden

HOUSING INDUSTRY NEWS

| 11

Housing at the Capitol MARKET REPORT

Housing market report Slow spring for single-family housing State of Minnesota

Despite falling mortgage rates and solid wage growth, new home construction had a lackluster spring. Year-to-date through April single-family permits across the state were down 2% compared to 2018. Single-family permits in the Twin Cities were down 8.5% compared to this time last year. Meanwhile, inventory of existing homes for sale continues to fall, driving home prices to new all-time highs. According to the Minneapolis Area REALTORS®, the median sales price in the Twin Cities increased by 5.2% to $281,000 this April. It is clear the demand for new homes in the market is there, but the high cost of housing is keeping many waiting on the sidelines.

Moorhead

SOURCE: CITY OF MOORHEAD

3,314

Duluth

Year-to-Date Mankato Single-Family Construction

SOURCE: US CENSUS

St. Cloud

SOURCE: CENTRAL MINNESOTA BUILDERS ASSOCIATION

Twin Cities

2,387 73

(St. Cloud-Area Data Not Reported to US Census)

Mankato

SOURCE: US CENSUS

Rochester

SOURCE: US CENSUS

SOURCE: US CENSUS. HOUSING FIRST MINNESOTA COLLECTED THE ABOVE PERMIT INFORMATION FROM AVAILABLE PUBLIC RESOURCES.

APR. 2019

$281,000

$251,000

APR. 2018

+5.2%

+4.6%

$267,000

Y-Y Change

APR. 2018

Minnesota Construction Employment Past 5 Months SOURCE: DEED

$240,000

Y-Y Change

2018

$267,000

$240,000

Twin Cities Median Sales Price

Minnesota Median Sales Price

SOURCE: MINNEAPOLIS REALTORS

SOURCE: MINNESOTA REALTORS

Twin Cities Construction Employment Past 5 Months

United States

West - 56

SOURCE: DEED

Midwest - 55

South - 51

Northeast - 55 Construction Continues to Lead in Jobs Added

Regional Remodeling Market Indicies, 2019 Q1 SOURCE: NAHB

The Overall Remodeling Market Index is calculated by averaging the Current Marketing Index and the Future Market Indicators Index. Any number over 50 indicates that more remodelers view remodeling market conditions as higher than the previous quarter. Results are seasonally adjusted.

12 |

HOUSING INDUSTRY NEWS

Minnesota added 3,600 jobs in April. Construction had the largest annual gains with an increase of 11,511 jobs since last April. This rate of growth has only been achieved twice before with the most recent being April 2015. “Many industries in Minnesota have seasonal employment – construction being one of the most prominent,” said DEED commissioner Steve Grove. “Despite our state’s tight labor market, the addition of 3,600 jobs this month is a sign that Minnesota employers are eager to ramp up for a busy spring and summer.”

MARKET REPORT

Median Sales Price (April 2019) +5.2%

$281,000

+3.2%

$251,000

Home prices hit a new record in the Twin Cities The latest numbers from the Minneapolis Association of REALTORS® (MAR) show that the median home sales price rose in the Twin Cities 5.2% to $281,000, a record high for any month. Inventory fell by 1.2% from April 2018 and month’s supply was ﬂat. Changes in sales activity also varied by market segment. Single-family sales declined 7.1%, condo sales increased 9.1% and townhome sales declined 9.1%. According to MAR, well-priced, turnkey

properties continue to be highly sought-after, and the market is tightest at the entry-level prices, where multiple offers and homes selling for over list price are commonplace. The move-up and upper-bracket segments are less competitive and better supplied. According to the Minnesota REALTORS®, the median sales price for the state increased by 4.6% to $251,000 and total inventory declined by 3.2% from April 2018.

Twin Cities

Minnesota

SOURCE: MINNESOTA REALTORS®

7.1%

SINGLE-FAMILY SALES

9.1%

CONDO SALES

9.1%

TOWNHOME SALES

HOUSING INDUSTRY NEWS

| 13

MARKET REPORT

Remodeling activity starts the year at a slower pace Remodeling Market Index (RMI) Overall RMI

SOURCE: NAHB

14 |

HOUSING INDUSTRY NEWS

The low supply of homes for sale has had many homeowners choosing to stay in place and remodel instead of moving. That could be changing. According to the National Association of Homebuilders (NAHB), the Remodeling Market Index (RMI) fell three points to 54 in the first quarter of 2019. Even with the drop the index is still over the break-even score of 50 which means remodelers are still reporting that activity that is above average. NAHB’s RMI has been above 50 since the second quarter of 2013. NAHB is also reporting a decrease in remodeling spending, which fell to a seasonally adjusted annual rate of $173 billion in March, down by 3.1% over February estimate, and was 14.1% lower than a year ago. Minnesota remodelers have seen some of the same trends. Kelly Davert of the Plymouth-based kitchen and bath showroom Mingle reported that while they are seeing an increase in the number of projects, they are also seeing more customers cut down on their spending. “We are busy and we are still seeing whole neighborhoods that are remodeling all at the same time,” said Davert. “People are definitely more concerned about costs and budget than they were just a year ago.” NAHB predicts the remodeling market will continue to grow in 2019, but at a more modest pace than previously. According to the Census Bureau, 30% of remodeling activity was major additions and alterations, 40% minor additions and alterations, and 30% maintenance and repair.

Green Path launches Designated Green Path Builder Program Builders across Minnesota who commit to having at least 75% of their homes tested by third-party RESNET raters and attend a half-day Green Path professional development workshop are now eligible for recognition as Designated Green Path Builders. Under this newly launched program, builders who meet the criteria can market themselves as Designated Green Path Builders, which includes

digital and print badging, recognition on the Minnesota’s Green Path website and recognition in the Parade of Homes should they have a home in the tour. “This is an important step in recognizing builders who commit to energy efficiency and third-party validation,” said Carole Griffith, vice president of sales and marketing at Robert Thomas Homes and Green Path

“This is an important step in recognizing builders who commit to energy efﬁciency and third-party validation.” Carole Griﬃth, ROBERT THOMAS HOMES AND GREEN PATH COMMITTEE CHAIR FOR HOUSING FIRST MINNESOTA

Committee chair for Housing First Minnesota, which presents the Green Path program. “There is strong interest. We launched just last month and already have more than 10 participating builders. We think we’ll reach 50 participating builders as the program gains awareness.” Minnesota’s Green Path has been receiving substantial interest in the past several months. Tom Gavaras, Green Path program manager, presented at the recent RESNET conference along with Ross Anderson of The Energy Network (TEN). The program has now provided Home Performance Reports to more than 18,000 newly built homes in Minnesota and proudly reﬂects an average HERS index of 51.

Wage growth ﬁnally gains some momentum

SOURCE: ADP

The success of the program has been important to the Minnesota Department of Labor and Industry with regard to the energy code.

For more information on Green Path and becoming a Designated Green Path Builder, visit MNGreenPath.org

The lack of wage growth throughout this economic expansion has puzzled many experts. The U.S. economy hit full employment in March 2017 and the economy has seen the longest job growth stretch on record. It turns out it took a year and a half for a shift to happen. Payroll processor ADP reported wage growth hit 3.8% in April after nearly a decade of minimal growth. Individuals that switched jobs saw a 5.6% increase in their wage, an increase 1.5% higher than the last year. “As employment growth slows and wages accelerate for both job holders and job switchers, all signs point to a scarcity of skilled talent in the labor market,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “This trend is further evidenced by the significant wage growth we’ve seen for new entrants in most industries, which is great news for college graduates poised to enter the workforce this spring.” According to Meyers Research, job quits are close to their highest level on record, and 25% of millennials report they voluntarily left their job in the past year. “In the housing industry, stagnant wage growth has been damaging. Nationally, only 48% of households can afford the median-priced new home,” said Ali Wolf, Meyers research director of economic research. “If sustained, the uptick in wage growth should help housing affordability across the country, even if just marginally.” Job holders are experiencing strong gains, up 4.8% in March compared to a year ago. This marks the strongest growth for job holders since September and is driven by firms hoping to retain their workers as it becomes more difficult to find available workers to hire.

HOUSING INDUSTRY NEWS

| 15

MARKET REPORT

Townhomes construction picks up across the country Share of Attached New Home Projects

According to Meyers Research, consumers overwhelmingly prefer single-family detached homes to the attached product or townhome, but buyers are increasingly open to denser communities to help hit a lower price or a certain location. This sentiment could be why attached new home communities increased by 16% on average nationwide from 2016 to 2019. The share of attached new home projects varies drastically by region, with some of the more expensive regions to build in having the largest

share. The Northeast and Southern California have the highest share of attached product while Texas has the lowest share. While the share of attached new homes in the Twin Cities has remained stagnant for the past few years, the demand is high. According to Meyers Research, the Twin Cities is part of a small group of major metros where nearly 50% percent of the best-selling new communities are attached homes. The other metros where this is occurring are Seattle, Miami, Salt Lake City and Washington, DC.

SOURCE: ZONDA BY MEYERS RESEARCH; PUBLIC RECORD DATA

SOURCE: ZONDA BY MEYERS RESEARCH *SHARE AS A PERCENT OF TOTAL ACTIVE NEW HOME PROJECTS FOR THE GIVEN PERIOD

Lyman Companies are Minnesota’s leading resource for your interior and exterior building product needs. We specialize in what we know and love, which means we understand your business inside and out. Whether your project is residential, commercial, multi-family or remodeling, we offer the products and services you need to get the job done right. • Cabinets

• Roofing

• Decking

• Windows

• Stairs

• Trusses

• Countertops

• Siding

• Railing

• Doors

• Moulding & Millwork

• Building Materials

LymanCompanies.com 16 |

HOUSING INDUSTRY NEWS

INDUSTRY IN ACTION

Building up women in new construction value to both the businesses that host and to the women that attend. We can see business relationships and friendships forming at our monthly events.

Women have long been in the minority when it comes to working in construction. According to the National Women’s Law Center, women only make up 2.6% of construction occupations, while they make up 47% of the entire workforce. As the construction industry struggles with an already dire labor shortage, how do we recruit more women to work in new construction? One of the groups hoping to make a difference is Women in New Construction (WINC). WINC’s goal is to support the advancement of women in the construction industry. WINC holds monthly events to encourage strong mutual support networks among members and offer mentoring opportunities for women to share strengths, talents and experience. Masha Romer, one of WINC’s founders, shared more on the growth of the group, how they are building up women in the construction industry and why it’s important that we steer women toward construction careers.

What do you think are some of the misconceptions about women working in the construction industry?

Why is it important women have a support group in new construction?

One of the most beautiful aspects of the construction industry is how tight-knit it is. It is so easy to build friendships within the industry and create a support network for yourself and your business. Having a group exclusive to women allows those friendships to grow even deeper. It is a place where women can feel safe being themselves, sharing personal information, relating to each other, and bonding over common interests, goals and experiences. Building these deeper business relationships that turn into friendships leads to better job satisfaction and career growth. The construction industry thrives on relationship building.

Masha Romer, founder of Women in New Construction, and Janelle Mattson, Coldwell Banker Burnet

How do we steer more women into jobs in new construction?

Young women need to be educated on the vast number of opportunities within the construction industry. There are so many high-paying and incredibly gratifying positions available, and I am seeing more and more women and diversity in the industry in general, which makes it even more inviting. Young women also need to be educated on how incredibly rewarding it is to build and design homes for families. I think a lot of women don’t initially see it this way. But when you are building

something that becomes the center of a family’s life, that holds so many dreams and memories for children, it dawns on you how important this industry is. How has WINC grown over the last few months?

WINC now has over 300 members. Our events max out every month to the point where we need to create waiting lists. Industry businesses are constantly signing up to host and we are so incredibly grateful to them. We feel that we can honestly say we are bringing

Either that women don’t know anything about construction or that they have to know everything about construction. As a former sales rep. for a building product manufacturing company, I definitely did not know, nor did I have to know everything about construction. But I knew everything about my product. There were times I would be working a trade show and someone would come up to me, then turn and speak with my male coworker. That was annoying. There are also so many women that do know all the ins and outs of construction and they own their own building companies. What I’m trying to say is young women shouldn’t be intimidated, you can start from nothing and learn everything you need to know. At the same time, please do not discount our knowledge, experience or professionalism because we are women.

“Young women need to be educated on the vast number of opportunities within the construction industry. There are so many high-paying and incredibly gratifying positions available, and I am seeing more and more women and diversity in the industry in general, which makes it even more inviting. ” Masha Romer, FOUNDER OF WOMEN IN NEW CONSTRUCTION

Women in New Construction (WINC) holds monthly events to encourage strong mutual support networks among members

HOUSING INDUSTRY NEWS

| 17

INDUSTRY IN ACTION

Hearts in Housing Gala breaks records Guests at the 2019 Hearts in Housing Gala, held at the JW Marriott Minneapolis Mall of America on April 27, donned masquerade-inspired style while raising funds to help support the BATC-Housing First Minnesota Foundation. The evening of camaraderie and generosity included a silent auction, live auction and fund-a-need. Over 400 builders, remodelers, trade partners and supporters raised a record-breaking $225,000 to support the nonprofit’s mission of providing safe, durable, affordable housing for Minnesota’s homeless, veterans and others in need. “It was a great night,” said Jim Myers, attendee and owner of Twin Cities Closet Co. “I think it’s good anytime we can help our fellow Minnesotans, especially veterans.” 2018 Award Recipients and Build Partners Honored

Lennar presents a check to the Minnesota Assistance Council for Veterans

Bob Bennett receives a 2018 Hearts in Housing Award

Two Hearts in Housing awards were given to individuals who went above and beyond in their support of the Foundation. This year’s Hearts in Housing award recipients were: • Mac McGaffey of Homes by Tradition, LLC • Bob Bennett Five build partners were recognized for their significant contributions to projects in 2018. These companies stepped forward to serve as the general contractor on building projects: • Crystal Kitchen Center, Inc. • Homes by Tradition, LLC • Lennar • Soderberg Apartment Specialists • The Kingdom Builders

To support the BATC-Housing First Minnesota Foundation or become a build partner, contact Donnie Brown at Donnie@BATC.org. Attendees contribute to the fund-a-need to support the BATC-Housing First Minnesota Foundation’s mission

18 |

HOUSING INDUSTRY NEWS

Builders and remodelers connect with buyers through Spring Parade of Homes Local home tours give builders and remodelers an opportunity to showcase their latest work

Parade Home built by Fitzke Construction, LLC

The Parade of Homes Twin Cities wrapped up its spring event this March with builders and remodelers showcasing 472 new homes and 59 remodeled homes to the public. The majority of participating builders and remodelers reported good or excellent success from the tour, with local homebuilder Robert Thomas Homes, Inc. reporting a record month of sales during the tour. “We achieved 40 noncontingent sales during the month of March, which is an all-time record for Robert Thomas Homes,” said Carole Griffith, vice president of sales and marketing for the builder. “The amount of traffic this event delivers to our communities during these two months

outperforms the traffic we receive during the remaining 10 months of the year!” Research on model homes over the past decade shows an increase in the number of models in the market during the first quarter that likely correlates with the spring Parade of Homes, according to Danielle Leach, Midwest regional director and senior consultant at Metrostudy. “Builders tend to open additional models for the Parade of Homes in order to boost traffic to their product offering,” Leach explained. For local builders, home tours like the Parade of Homes are an opportunity to showcase new homes and neighborhoods available across the region. Homes on the spring tour ranged in style and in price, from the $200,000s to multimillion-dollar residences. “We make every effort to maximize this opportunity to get face-to-face with 1,000s of new home prospects and are very thoughtful in the homes we enter and how they are presented,” added Griffith. The Remodelers Showcase runs the final weekend of the Parade of Homes. This tour gives remodelers a chance to connect with new clients in the metro area and allows families to learn how remodeling can help them remain in their community when their homes no longer fit their needs. Yellow Parade of Homes signs signify the hundreds of homes entered in the tour

Real Estate Law at Every Level Larkin Hoffman has been a go-to real estate law firm for more than five decades. We provide a comprehensive range of services including financing, tax increment financing, acquisitions and dispositions, construction, development, land use, environmental regulation, property conversions and redevelopment, leasing, renewals, eminent domain and inverse condemnation, property tax appeals, and litigation. This full-service approach ensures we can address and manage every element of our clients’ real estate matters.

Peter Coyle pcoyle@larkinhoffman.com 952-896-3214

HOUSING INDUSTRY NEWS

| 19

INDUSTRY IN ACTION

University of St. Thomas research shows keys to attracting youth to construction The key motivators for youth attracted to careers in construction are good pay, diversity of work, availability of work and creating the tangible. These findings come from a newly released University of St. Thomas Applied Business Research report conducted for Housing First Minnesota. “What this research demonstrates clearly is that efforts like Project Build Minnesota are on the right track and must continue,” said Katie Elfstrom, communications manager for Housing First Minnesota and the research supervisor.

95%

OF COUNSELORS ARE UNSURE OF THE EDUCATION REQUIREMENTS FOR CONSTRUCTION CAREERS

One key finding of the report is that school counselors can be strong advocates. They are more open to careers in construction than ever before and they perceive that society is broadly changing in accepting the value of skilled labor. They identify that there is still a strong stigma about not getting a four-year degree, particularly for parents, but that is slowly changing. While Project Build Minnesota has been working to change this stigma and educate counselors by exhibiting at the Minnesota School Counselors Association for several years, counselors still are underinformed about our industry’s career ladder. Survey Findings of High School Counselors 95% of counselors are unsure of the education requirements for a career in construction • 90% are unsure about construction career salaries • 65% of school counselors are unsure of the various job options available • Counselors report that 18% of their students reach out to them about construction, a surprisingly high number The researchers recommend that efforts

providing accurate local information. Project Build Minnesota has developed its own speakers bureau that reaches students in the classroom.

like Project Build Minnesota continue to reach out to counselors and provide them information (salary, jobs, pathways). Project Build Minnesota Executive Director Dennis Medo reports that they have already put together a kit that is being distributed to school counselors. The report also highlighted some unique characteristics of Generation Z, which now makes up one-third of the U.S. population. In particular, this generation seeks to make a difference in the world. They are highly capable of self-direction and non-traditional training. They want their careers to have meaning and to do work that will help make the world a better place, a trait that is valued more than compensation. Given these desires, a residential construction career that builds safe, durable homes for families in communities they love should be a very attractive story.

RESEARCHERS RECOMMEND: Attending career fairs & providing accurate local information In another effort to reach students, Project Build Minnesota and Housing First Minnesota have been working diligently to change Minnesota statutes to allow 16- and 17-year-olds to be on the job site under appropriate supervision. Limited progress was made on the issue this past legislative session and work will continue in subsequent sessions. Department of Labor & Industry Commissioner Nancy Leppink told Housing First Minnesota she would be bringing together a work group to study the opportunity.

However, there are fears young people have about the industry. These include: • • •

help us spread the message

The physicality of the job The external work environment (tough work outside) The coworker environment (tough crowd to work with)

ProjectBuildMN.org Interested in getting involved with Project Build Minnesota? Contact Dennis Medo at Dennis@ProjectBuildMN.org

The research revealed that students are unaware of the opportunity for career advancement and entrepreneurship in the construction industry with 60% of students reporting they are not aware of the potential career paths in construction. To address these concerns, the researchers recommend attending career fairs and

•

“What this research demonstrates clearly is that Project Build Minnesota is on the right track and must continue its efforts.” Katie Elfstrom, HOUSING FIRST MINNESOTA COMMUNICATIONS MANAGER Students perception of career advancement in construction

SOURCE: UNIVERSITY OF ST. THOMAS APPLIED BUSINESS RESEARCH

TOUGHER THAN THE ELEMENTS Stands up to storms and harsh weather Water resistant to protect against swelling, warping and cracking; also resists mold damage ®

James Hardie fiber cement products are Engineered for Climate . For Won’t be eaten by animals or insects ®® uncompromising performance, our HZ5. For siding and trim are specifically James Hardie fiber cement products are Engineered for Climate ® designed to resist shrinking, and cracking even after of wet uncompromising performance, our HZ5 siding and trimswelling are specifically Fire years resistant ® ® James Hardie® fiber cement products are Engineered for Climate®. For or freezing conditions. A James Hardie exterior can help keep your homes designed to resist shrinking, swelling and cracking even after years of wet James Hardie® fiber cement products are® Engineered for Climate®. For uncompromising performance, our HZ5 and trim specifically James Hardie® fiber cement products are®siding Engineered for are Climate . For ® or freezing conditions. A James lookingHardie beautiful longer no matter whathomes nature brings. Helps reduce time and money spent on exterior can– help keep your uncompromising performance, our HZ5 and trim specifically James Hardie fiber cement products are®siding Engineered for are Climate . For designed to resist shrinking, swelling and cracking even after years of wet ® ® uncompromising performance, our HZ5 siding and trim are specifically maintenance ® Engineered for Climate . For looking beautiful longer – no matter what nature brings. James Hardie fiber cement products are designed to resist shrinking, swelling andsiding cracking even afterspecifically years®of wet uncompromising our HZ5 and trim are ® performance, or freezing A James Hardie exterior can even help keep your homes ® cracking designed toconditions. resist shrinking, swelling and after years of wet James Hardie fiber cement products are Engineered for Climate . For uncompromising performance, our HZ5 siding and trim are specifically or freezing conditions. A James Hardie exterior can help keep your homes designed toconditions. resistlonger shrinking, and cracking even after years of wet ® Achieve instant curb appeal and lasting character. looking beautiful no swelling matter nature brings. or freezing A–James Hardie exterior can helptrim keep your ® ®homes Contact a sales representative: uncompromising performance, ourwhat HZ5 siding and areyears specifically designed toconditions. resist shrinking, and cracking even looking beautiful longer –James no swelling matter what nature brings. James Hardie fiber cement products are Engineered forafter Climate .ofForwet or freezing A Hardie exterior can help keep your homes Visit jameshardiepros.com looking beautiful longer no matter what brings. Kevin Morel | (612) 323-6358 Contact ®nature designed to resist shrinking, swelling and cracking even after years of wet a sales representative: or freezing conditions. A– Hardie can help keep your homes uncompromising performance, our what HZ5exterior siding and trim are specifically looking beautiful longer –James no matter nature brings. kevin.morel@jameshardie.com Kevin Morel | (612) 323-6358 or freezing conditions. James Hardie can help keep your homes looking beautiful longer –Ano matter what nature brings. designed resist shrinking, swelling andexterior cracking even after years of wet Contact ato sales representative: kevin.morel@jameshardie.com looking beautiful longer – no matter what nature brings. Contact a conditions. sales representative: or freezing A323-6358 James Hardie exterior can help keep your homes © 2019 James Hardie Building Products Inc. All Rights Reserved. AD1511-MDW-03/19 Kevin Morel | (612) Contact a sales representative: Kevin Morel | (612) Contact a sales representative: lookingMorel beautiful| longer –323-6358 no matter what nature brings. kevin.morel@jameshardie.com © 2019 James Hardie Building Products Inc. All Rights Reserved. AD1511-MDW-03/19 Kevin (612) 323-6358 ®

Contact a sales representative: kevin.morel@jameshardie.com Kevin Morel | (612) 323-6358 kevin.morel@jameshardie.com Contact a sales representative: Kevin Morel | (612) 323-6358 © 2019 James Hardie Building Products Inc. All Rights Reserved. kevin.morel@jameshardie.com © 2019 James Hardie Building Products Inc. All Rights Reserved. Kevin Morel | (612) kevin.morel@jameshardie.com © 2019 James Hardie Building Products323-6358 Inc. All Rights Reserved. a sales representative: 20 | HOUSING INDUSTRY NEWS©Contact 2019 James Hardie Building Products Inc. All Rights Reserved. kevin.morel@jameshardie.com Kevin Morel | (612) 323-6358 © 2019 James Hardie Building Products Inc. All Rights Reserved.

AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19

INDUSTRY GIVES BACK

The first home will be built on a lot in North St. Paul across the street from the North St. Paul Veterans Memorial

SOURCE: CITY OF NORTH ST.PAUL

Two new homes for heroes

Plans by Lennar for the North St. Paul home

“These homes make a major difference for our organization and are truly helping us end veteran homelessness.” Neil Loidholt, MINNESOTA ASSISTANCE COUNCIL FOR VETERANS PRESIDENT North St. Paul lot

Why build one home for homeless veterans when you can build two? The BATC-Housing First Minnesota Foundation is set to build two brand-new homes for homeless veterans this year in partnership with Lennar and the Minnesota Assistance Council for Veterans (MACV). The first home will be built on a lot in North St. Paul across the street from the Veterans Memorial Park. The home in North St. Paul will be 2,700 square feet and will have three bedrooms to house homeless veteran families as they transition to more permanent housing. “We knew after successfully completing one home for heroes each year for the past two years that we wanted to ramp it up in 2019,” said Donnie Brown, BATC-Housing First Minnesota Foundation manager. “We’re excited that we were able to find two lots to make the two homes work this year.”

The second home will be located in Bloomington. It will be a 3,500-square-foot rambler with four bedrooms and will house four male veterans. “If we don’t have a home like this for these veterans they are staying in a shelter or staying with a bad partner,” said Neal Loidolt, president and CEO of MACV. “These homes make a major difference for our organization and are truly helping us in our effort to end veteran homelessness.” Both North St. Paul and Bloomington have worked with the BATC-Housing First Minnesota Foundation to help these projects come together. “We’re excited that by the end of the year there will be an additional seven bedrooms to bring veterans off the street or out of the shelter and into these two new homes,” said Brown. Construction is set to begin on the North St. Paul home this June and on the Bloomington home by the end of July.

Let’s end homelessness in Minnesota. L E A R N H O W Y O U C A N B E C O M E A B U I L D P A R T N E R AT B AT C F O U N D AT I O N . O R G

HOUSING INDUSTRY NEWS

| 21

INDUSTRY GIVES BACK

Scholarship program continues to encourage careers in construction For multiple years BATC-Housing First Minnesota and its Foundation have worked to support future members of the construction workforce through their scholarship program. This year, 12 students were selected for a total of $20,000 in scholarships to pursue a career in new home construction. The scholarships were awarded based on the students’ career path interest, letters of recommendation and personal essay. With a mix of backgrounds and interests in the trades, the dedicated students exemplify how bright and promising the future is for the construction industry. This year’s recipients included more women interested in construction than in the scholarship history. The scholarships will help further their education and career goals within the residential homebuilding industry.

Hudson Neumann

Eva Sharot

Dakota County Technical College, HVAC & Refrigeration Technology

Minnesota State University – Mankato, Construction Management – Residential

Participation in sports, volunteering, and working 15-20 hours a week at multiple jobs, all while maintaining a high level of academic achievements, has provided Hudson with a strong work ethic. “Doing what I enjoy keeps me motivated … I am confident that I will continue this high level of work ethic into my future education and career in Minnesota.”

Eva chose to pursue a career in construction management for one main purpose: as a child, she had the opportunity to join her father at his company’s construction job sites and was increasingly displeased by the lack of females in the field and in the office. “The number of females in the construction business is widely outweighed by males, and I want to change that stigma and put myself out there.”

2019 Scholarship Recipients Luke Rogers

Delanie Lafave Alexandria Technical & Community College, Carpentry

It all started with a coffee table in one of her woodworking classes at her high school. It was then Delanie knew she wanted to build things with her hands. “I absolutely fell in love with building things … and the pure joy of seeing the end results.” Post-graduate plans include finding employment at a great homebuilding company and to one day own a homebuilding/interior design business.

Dunwoody College of Technology, Residential Construction Management

When he’s not working one of his part-time jobs, Luke can be found in his high school’s woodshop either building his own projects or assisting his instructor. He credits his woodshop teacher with introducing him to something he is extremely passionate about. “Construction is something that really interests me and is now a part of who I am.”

Brandon Sloniker University of Minnesota – Twin Cities, Construction Management – Residential

From building houses made of Legos as a child to participating in a high school class that had students stick-frame a single-story home from start to finish, Brandon looks forward to becoming an integral part of making our communities better and building homes for families. “I want to continue building houses for as long as I can, hopefully instilling some of my passion into young men and women that are interested in the industry.”

Allen Walock Derek Lockwood

Dunwoody College of Technology, Construction Management – Electrical Construction & Maintenance

Northwest Technical College, Electrical Construction

As the son of an electrician, Derek aspires to one day be a foreman in the electrical field. His attention to detail and self-discipline have already attributed to his success in the classroom and on the football field. “I am proud to be pursuing a career in the trades and to work hard for a good living.”

Chase Stock Dunwoody College of Technology, Project Management Chase’s love of building comes from working alongside his dad on projects at their home and cabin. He dreams of following in his dad’s footsteps in residential construction. “I may not be a 4.0 student … but I do love to build things and I know that my workmanship on projects comes through.”

Juwle Nagbe North Dakota State College of Science, Building and Construction Technology – Residential Home Construction

22 |

HOUSING INDUSTRY NEWS

After obtaining an associate degree in electrical construction nearly a decade ago and working on projects such as the MetroTransit Light Rail and residential homes, Allen returned to school to reach his next career goal: becoming a project manager in the construction industry. “While it has been difficult being a student again, what I have learned thus far has solidified my belief that going back to school was the best thing I could have done for my career.”

Breanna Nava Minnesota State University – Mankato, Construction Management – Residential

After joining her veteran father on a volunteer project with Habitat for Humanity, Breanna saw “the kind of change [she] could do with more construction experience,” and she was driven to pursue a career in residential construction. She hopes to one day fulfill her goal of reducing homelessness by building tiny home communities for low-income and homeless veterans.

Dallin Swanson Saint Paul College, Electrical Technology

Nathan Litzau

With a mother that is a general contractor and a significant father figure in his life that owns a homebuilding company, Dallin was exposed to the industry at a very young age. His time on worksites nurtured his love for working with his hands and educated him on the variety of work available with the trades. “I grew up in the trades. I enjoy hands-on work … and the variety the trades offer to enrich day-to-day life.”

Ridgewater College, Construction Trades – Residential Electrician

Drawn to the electrician field due to its growing job opportunities and good pay, Nathan aspires to one day own his own electrical company. “My biggest goal is to just do quality work and create a good name for myself and future business.”

IN THE DIRT

A quick recap of housing news and development updates

SOURCE: ZILLOW

SOURCE: CITY OF NEW BRIGHTON

SOURCE: CITY OF DULUTH

SOURCE: CITY OF FRIDLEY

SOURCE: CITY OF ST. PAUL

Zillow Oﬀers enters Twin Cities

Dominium and Pulte make plans in New Brighton

Plan to turn Duluth golf course to development

Lennar plans arena redevelopment

Single-family housing added to Ford site

Pulte Homes and Dominium have moved forward with plans to add 400 new homes to a cityowned redevelopment site in New Brighton. The proposal would include a 204-unit senior apartment building, 154-unit family apartment building and 53 townhome units. Dominium would develop the apartments and Pulte would develop the townhomes. The 13-acre site is just south of I-694 and west of I-35W.

A proposal by city of Duluth administrators calls for the closing of nine of the 27 holes at Lester Park Golf Course in order to sell 50 acres of the course. The sale would help fund more than $3 million in improvements at the more centrally located Enger Park Golf Course. The new development would add up to 400 multifamily housing units, 80 of which must be affordable apartments or townhomes to the site. The proposal needs a city council vote to be put in action.

Lennar has plans to add 76 townhomes next to Fridley city hall. The townhome plans are part of a 33-acre redevelopment of the former Columbia Arena that was torn down. The ﬂoor plans will range in size from 1,640 to 1,769 square feet and will start at $275,000. Lennar plans to build the townhomes along a new street, Locke Parkway. The street will link 71st Avenue East and University Avenue, according to the project description.

The former home of the Ford manufacturing plant in St. Paul is one step closer to becoming a 122-acre river front development. The city council approved changes to the development in April that include adding single-family homes to the plan. The developer Ryan Construction plans to build a mix of 3,800 homes, office and retail space along with green space on the site. Ryan has promised to make 20% of the homes accessible to people of lower incomes. That includes nearly 380 units designated for those who make 30% or less of area median income.

Zillow Offers expanded to the Twin Cities in May. Zillow Offers directly buys a seller’s house, prepares it for showings and then quickly lists it for sale – so they don’t have to. Agents from local brokerages represent Zillow in the transaction. Zillow Offers first launched in Phoenix last year, and is also available for sellers in Las Vegas, Atlanta, Denver, Charlotte and Raleigh. Along with the Twin Cities Zillow Offers also expanded to Miami, Nashville, Orlando and Portland in 2019.

LET'S FIX IT.

# L E TS F I X I T M N L E TS F I X I T M N . O RG

A Pathway to Fix Minnesota’s Housing Market

HOUSING INDUSTRY NEWS

| 23

OUR SERVICE GUARANTEES On-time estimates on the agreed upon date

YOUR SOURCE FOR

Pick up of returns within 24 hours of request

TOP-QUALITY BUILDING MATERIALS & SERVICES

COMMERCIAL SERVICES

CABINETS & COUNTERTOPS

Delivery of your confirmed orders on the same day Warranty claims to vendors initiated within 24 hours of request

WINDOWS & DOORS

PO POST-FRAME B BUILDINGS

CABINET & COUNTERTOP SHOWROOM FEATURING

ABC-CLC.COM BUILDING MATERIALS

24 |

HOUSING INDUSTRY NEWS

DRAFTING SERVICES

CABINET DESIGN

FREE DELIVERY