VOL. 5 ISSUE 3, JUN. 2021
THE MINNESOTA HOUSING INDUSTRY NEWS SOURCE BY HOUSING FIRST MINNESOTA • HOUSINGINDUSTRYNEWS.ORG
Lumber prices reach new high in May, fall fast in June
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Electrical Code challenge awaits decision PAGE 4
Mid-year economic outlook shows strength PAGE 6
Zillow: Zoning changes the most effective path to boosting housing supply MDH's rule would replace the EPA's rule in Minnesota.
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Department of Health dusts off lead paint proposal after two years Housing groups gain engagement opportunity for industry For remodelers, a sign that the industry impacts of the COVID-19 pandemic are waning emerged when health officials in the state began working on the lead paint rule again. After two years with no update on Minnesota’s move to take local custody of the U.S. Environmental Protection Agency’s (EPA) Lead Renovation, Repair and Painting (RRP) Rule, the Minnesota Department of Health (MDH) issued a new draft in May and seeks to publish the final rule this summer. Under the proposal, MDH’s rule would replace the EPA’s rule in Minnesota, and MDH
would be responsible for enforcement of the rule as well as establishing standards for lead certification in the state. Any remodeler or exterior contractor working on pre-1978 homes would be affected by this rule. Unlike other Minnesota-specific housing regulations, MDH must draft a rule that satisfies the EPA in addition to satisfying the state’s rulemaking process. Industry pushes for engagement Industry leaders are unhappy with the level of public engagement from MDH on the RRP proposal. The last stakeholder
2960 Centre Pointe Drive Roseville, MN 55113 HousingFirstMN.org
What goes up, must come down? At least many hope, as lumber prices reached a record high of $1,711 per thousand board feet in May. According to the National Association of Home Builders, lumber prices have skyrocketed by more than 300% since April 2020, adding nearly $36,000 to the price of a new single-family home. This cost increase is stacked on top of higher labor costs, sky high land prices and the already costly zoning and regulatory environment builders were dealing with before lumber costs piggybacked on the already elevated housing affordability crisis in Minnesota. The sky-high lumber prices are showing signs of coming back down to earth. So far in June prices posted their biggest weekly drop ever and continued to decline falling nearly 41% from the record peak in May. However, lumber prices are still sitting 175% higher than they were this past year. While a sudden skyrocket in demand and a stall in lumber production due to the pandemic is the cause of much of the price increases, the U.S. tariffs on Canadian softwood lumber have exacerbated the problem. Housing First Minnesota and members reached out to Minnesota members of Congress to encourage lawmakers to reduce the current tariffs on lumber back in May. “The homebuilding industry in Minnesota has been a bright spot in Minnesota’s recovering
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meeting on the topic was in August 2017, and since December 2017, updates from MDH have been few and far between. “Before the pandemic, updates generally only came when we asked for them,” said Nick Erickson, director of research and regulatory affairs for Housing First Minnesota. In a letter to MDH sent in May, leadership from Minnesota Realtors®, Housing First Minnesota and the Central Minnesota Builders Association called for MDH to engage with stakeholders on the topic. These organizations asked MDH for a public meeting on the topic to provide a detailed list of differences between the EPA rule and MDH’s proposal, an explanation of why direct adoption of the EPA rule is not possible, an overview of the enforcement plan and a copy of MDH’s cost analysis for the latest draft. In June, MDH said it will hold a stakeholder meeting virtually this summer. Deviations from EPA RRP Rule Housing First Minnesota's preliminary assessment of
the latest version of the rule shows improvements, but there are several key differences between the existing rule and the MDH proposal, according to Erickson. “MDH has shifted from a lead abatement approach to the lead mediation that is closer to the intent of the RRP Rule,” said Erickson. “However, there are still needless deviations from the EPA rule presented by MDH, and none provide any safety improvements.” Under the proposal, lead contractor certification would be valid for two years, not the five years that exists today under the EPA rule. MDH’s proposal also includes several paperwork and record-keeping requirements that are not found in the EPA rule. MDH’s proposal would require the recleaning of an entire project, not just areas or rooms that failed the cleaning verification test. In a letter sent in June, David Siegel, executive director of Housing First Minnesota, reiterated the industry’s request for engagement from MDH and for MDH to address the noted CONTINUED >> PAGE 4
HOUSING INDUSTRY NEWS
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