2023 May Building Insight

EDITORIAL STAFF COMMUNICATIONS DIRECTOR Janelle Guthrie

FEATURED

CONTENT SPECIALIST Hannah Cassara

10 Winter Board Meeting highlights For the first time since before the pandemic, builder, remodeler and associate members converged on our state Capitol during the 2023 BIAW Winter Board Meeting, March 20-22 in Olympia.

VISUAL DESIGNER Lena Anderson

BIAW MANAGEMENT EXECUTIVE VICE PRESIDENT Greg Lane

18 ROII scores industry-leading refunds

EDUCATION & WORKFORCE DEVELOPMENT DIRECTOR Al Audette

ROII did it again with industry-leading refunds! ROII has the highest 1st adjustment refund in program history for the 2021 plan year.

LEGISLATIVE DIRECTOR Josie Cummings COMMUNICATIONS DIRECTOR Janelle Guthrie MANAGING DIRECTOR OF EXTERNAL AFFAIRS Jan Himebaugh

IN THIS ISSUE

MANAGING DIRECTOR OF OPERATIONS Stephen Hyer

4 President’s message

ROII DIRECTOR Jenn Kavanaugh

6 Executive Vice President’s message

ASSOCIATION SERVICES DIRECTOR Brenda Kwieciak

7 BIAW welcomes new social

20 Local Happenings

8 Q1 economic forecast

22 What employers need to know

GENERAL COUNSEL Jackson Maynard

CONTACT US For editorial inquiries, contact Hannahc@biaw.com Interested in advertising in Building Insight? Contact communications@biaw.com www.BIAW.com Building Insight magazine is published on behalf of the Building Industry Association of Washington by Print Northwest.

16 2023 legislative session wrap-up

media manager

BIAW’s historic legislative session helped directly increase the overall housing supply benefiting builders, remodelers and future homeowners.

about company vehicles

By Noah Blanton of WFG National Title Insurance Company

13 Associate spotlight

ON THE COVER

Joel Tanasse of Fred’s Appliance in Kennewick

During the 2023 Winter Board Meeting, BIAW members took over the state Capitol on March 21 meeting with legislators from both chambers and both parties to discuss the issues facing the homebuilding industry. Read more on page 11.

14 Top 10 changes to the building codes Be aware: Significant changes are coming to the building codes on July 1. Learn how these changes will affect your operations.

WE’D LOVE TO HEAR FROM YOU

@BuildingIndustryAssocWA

As always, we want to hear from you! We invite you to take a quick survey about your thoughts on Building Insight. Happy reading!

@biawofwa

@BIAW2

Building Industry Association of Washington

b u i l d i n g i n s i g ht | may 2 0 2 3

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President’s message Washington’s dark, cold, rainy days are becoming brighter and warmer—and it looks like our economy could be following suit. The National Association of Home Builders (NAHB) says lower mortgage rates and limited inventory of existing homes have been helping drive up new home sales in March.

This, coupled with the fact that material prices are finally starting to drop, ever so slightly, is good news for home builders.

Remodeling sees continued opportunity Gary Wray President

As we enter National Remodeling Month in May, the market for remodelers remains strong with opportunity for growth. Economist Noah Blanton predicts that as interest rates remain higher than in years past, homeowners who’ve locked in lower mortgage rates will opt to remodel rather than move to new homes at least for the near future. That means less competition for people in the market for a new home which can be helpful as well. You can read the rest of his economic forecast on page 8.

Legislature breaks down barriers to new construction Whether you’re a builder or remodeler, BIAW and its members enjoyed one of the best legislative sessions on housing issues in recent history as both the governor and members of the legislature from both parties made housing a priority.

Coming into the session, BIAW worked to educate legislators and the public about the hidden costs of housing through our Cut the Costs campaign, at speaking engagements, in the media and through our new BIAW Housing Research Center. Local associations amplified the effort at housing forums and in meetings with their legislators and local building officials.

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Permit reform With permit delays adding on average $31,000 to the cost of a new home in Washington, we worked hard to pass new legislation to reform how our local jurisdictions approach the permitting process. As a result, the legislature approved a bill that exempts project permits for interior remodels from site plan review in most cases, encourages local jurisdictions to embrace digital permitting and other process improvements and holds them accountable for meeting deadlines.

Increasing access to new homes The legislature also increased middle housing in areas around the state and broke down some of the barriers to accessory dwelling units (ADUs).

It wasn’t all sunshine and roses, however. Your legislative team fought a tough battle to prevent Puget Sound Energy from ending natural gas service to new and, eventually, existing customers. They also prevented unnecessary increases in the real estate excise tax (REET) and property taxes and so much more!

Legislative Director Josie Cummings provides more detail on all our legislative work in her update on page 16.

We couldn’t have done this without you. Thank you to our legislative team, lobbyists and all the members and local government affairs staff who worked together to improve the business climate for builders and remodelers.

Let’s go forth and help Washington’s current and future homeowners enjoy the American dream!

INTRODUCING

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Accessories

Hats, blankets, drinkware, bags and more!

Select from hundreds of different clothing and swag options with printed or embroidered designs.

Scan the code with your smartphone to start shopping!

All proceeds benefit the Washington Home Builders Foundation, which provides funds to workforce development, educational programs and scholarships to students pursuing careers within the home building industry.

The Washington Home Builders Foundation is a 501(c)3 charitable organization as classified by the Internal Revenue Code. A portion of your purchase may be eligible for charitable tax deductions. Check with your tax professional. EIN: 46-0667648

b u i l d i n g i n s i g ht | may 2 0 2 3

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Executive Vice President’s message Spring is here, warmer weather is on the way and so are ROII checks!

BIAW and ROII have been hard at work, and I’m pleased to report on some historic achievements.

ROII does it again!

ROII continues to demonstrate—and leave no doubt—that it’s the best retro program in Washington by once again delivering unmatched returns to its participants.

Greg Lane

Executive Vice President

This year, ROII achieved a historic milestone, earning a 46% refund on the first adjustment for the 2021 plan year—the highest in program history.

This is truly a remarkable achievement, and we’re proud of the exceptional partnership between our outstanding ROII staff and the participants in the program that made this happen.

ROII’s success translates into real benefits for its participants, and we’re excited to announce that ROII will be distributing over $20 million to member companies across the state!

But ROII’s success doesn’t stop with participants—all BIAW members benefit from ROII’s success. This year BIAW will receive $2.5 million from the ROII refunds, and all our 14 local associations will share an additional $2.5 million to continue fighting for the building industry on a state and local level through advocacy, education and programs that directly benefit members.

You can read more about ROII’s record returns on page 18.

Historic housing legislative session BIAW’s External Affairs team led the way to historic results in the 2023 legislative session, advocating for our members through legislation that will help make significant progress toward increasing the overall housing supply in our state.

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Adding accountability to the local permitting process was a key focus, as Washington’s average permit delay adds over $31,000 to the cost of a new home. The 2023 legislature took steps to address those delays, as well as approve other measures to increase overall supply, providing tools for members to build more homes.

Our team also put a stop to some potentially very bad bills, including a natural gas ban, a costly local real estate excise tax, rent control and others. Read more about the legislative session wrapup on page 16.

Berkley, California’s natural gas ban thrown out In addition to these achievements, we’re also pleased to share that a federal appeals court recently overturned Berkley, California’s first-in-the-nation natural gas ban, a significant win for homeowners and housing costs. This ruling is an important development for our industry here in Washington as we continue to advocate for policies that support energy choice and affordable home ownership.

We’re grateful for the opportunity to serve our members and our industry, whether it’s advocating in the Legislature, fighting in the courts or providing programs like ROII. Our success wouldn’t be possible though without the active participation of our members and local associations.

Thank you to everyone who actively participates in the association.

Summer Board Meeting Don’t forget that our Summer Board Meeting is coming up June 26-28 at The Centennial Hotel in Spokane. I look forward to seeing many of you there!

Upcoming classes

> Register at biaw.com/classes

Date

Class

Time

Location

June 6

Fall Protection Awareness/Ladder Safety*

8 am - 12 pm

Online

June 9

Construction Contracts & Lien Law

8 am - 4 pm

BIAW Office, Tumwater

June 12

Significant Changes to the 2021 Building Codes

8 am - 12 pm

HBA of Tri-Cities, Kennewick

June 13

CESCL (Certified Erosion & Sediment Control Lead)

8 am - 5 pm

Online

June 14

Significant Changes to the 2021 Building Codes

8 am - 12 pm

Port of Skagit County, Burlington

June 16

CESCL Recertification

8 am - 5 pm

Online

June 16

CPR, AED, and Basic First Aid Training*

9 am - 1 pm

BIAW Office, Tumwater

June 20

Help Minimize Risk: Condition Your Workforce for Safety*

1 pm - 5 pm

Online

June 21

CAPS 1: Marketing & Communicating with the Aging-In-Place Client

8 am - 5 pm

BIAW Office, Tumwater

June 22

DOSH Inspections: Don’t be caught unprepared*

1 pm - 3 pm

Online

June 22

CAPS 2: Design Concepts for Livable Homes and Aging In Place

8 am - 5 pm

BIAW Office, Tumwater

June 23

CAPS 3: Details & Solutions for Livable Homes and Aging In Place

8 am - 5 pm

BIAW Office, Tumwater

July 13

Help Minimize Risk: Condition Your Workforce for Safety*

1 am - 5 pm

North Peninsula Building Association, Sequim *Free for ROII participants

BIAW welcomes new social media manager BIAW welcomes Sailor Rozema to the BIAW communications team as its new social media manager.

Rozema grew up in the Skagit Valley region and recently graduated from Washington State University (WSU) with a degree in Advertising and a minor in Hospitality Business Management. During her time at WSU, she was the head photographer for the University’s spirit squads, participated in the Student Entertainment Board and was a member of a sorority.

Rozema got her start in social media by building her own presence on the video

platforms, YouTube and TikTok. She has over five years of experience working in social media marketing for small businesses, tech startups and nonprofits.

She has also worked as a portrait photographer and videographer for over seven years and enjoys taking pictures and making videos whenever she can. When she’s not taking pictures or working on social media, she enjoys spending time with her Bernese Mountain Dog Brisket, golfing, sailing and traveling the world with her family and friends.

b u i l d i n g i n s i g ht | may 2 0 2 3

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Recession ahead? Rates falling?

Q1 Economic Forecast

by Noah Blanton President, Oregon Director Operations, WFG National Title Insurance Company

As we come to the end of the first quarter of 2023, a recession is a near certainty, with the yield curve the most inverted since 1980. But this is not all bad news, as it also signals the end of interest rate increases at a time when the job market remains relatively strong.

Welcome to your Q1 economic snapshot.

INFLATION & INTEREST RATES After increasing at the fastest rate on record, interest rates have finally stabilized, and real-world rates (the yield on a 30-year mortgage less inflation) are no longer negative after 19 months of real-world rates below zero percent. (See Figure 1) While inflation rose rapidly in the first half of 2021, the average 30-year mortgage rate took nearly a year to follow, not increasing significantly until inflation topped an annualized rate of 7% in mid-2022.

Inflation peaked in June 2023 and has continued to fall since, finally meeting mortgage rates and bringing real-world rates back to positive territory in December.

This is a welcome development and the basis for expecting rate stabilization.

As a recession comes into view, the silver lining is we can begin to forecast interest rate relief with greater accuracy. However, how deep and long a downturn lasts remains unclear.

SUPPLY-SIDE Looking ahead, we should continue to expect sellers to be reluctant to come to the market, depressing existing housing stock until interest rates fall significantly.

Figure 2

The disincentive for homeowners to voluntarily surrender low, fixed-rate mortgages will have a substantial and lasting impact on the supply of available homes.

Nearly 85% of all homeowners in the U.S. have a mortgage rate below 6%. (See Figure 2) Until rates fall meaningfully, this deterrent will remain an influence in the market, exacerbating a decade of underbuilding already contributing to low supply in the West.

Additionally, the state has never recovered from the Great Recession, under producing the number of singlefamily housing units before 2006 every year since. In 2005, the year before the housing crisis became apparent, 78% of all housing produced in Washington state was single units; in 2022, it was just 41%. Caution on the part of homebuilders and financial institutions, coupled with the increasing pricing challenge, have taken a toll on supply. As a result, the last market cycle is casting its shadow on the present.

Figure 1

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DEMAND-SIDE At the most basic level, demand for housing is a function of population and employment growth. Without an increasing population base and more jobs, the demand for housing decreases.

Of the west coast states, Washington fared the best in population growth throughout the pandemic years. Washington state’s population grew by 1.3%, or just over 97,000 people last year. The entire balance was from inbound net migration (See Figure 4) with no natural growth as the deaths outnumbered births during that period.

Figure 3

The Building Industry Association of Washington has teamed up with WFG National Title Insurance Company’s Noah Blanton to offer quarterly economic forecasts to assist members in making decisions for their businesses. Contact him for more information at (503) 431-8506 or nblanton@wfgtitle.com.

Figure 4

This is a significantly better growth rate than either Oregon or California—a solid basis for continued housing demand.

The employment picture is less clear (See Figure 5). Plan to watch this measure closely as we move towards a recession.

The state has not fully recovered all pre-pandemic jobs, and the labor force participation and employmentpopulation ratio measures remain below prior levels.

Employment performance is inconsistent in different markets throughout the state, so the impact will change with the region.

If you are interested in employment or population information in your particular MSA or county, feel free to contact me directly.

Figure 5 b u i l d i n g i n s i g ht | may 2 0 2 3

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Hill Day, Hammers & Highballs and other Winter Board Meeting highlights

by Janelle Guthrie Communications Director

For the first time since before the pandemic, builder, remodeler and associate members converged on our state Capitol during the 2023 BIAW Winter Board Meeting, March 20-22 in Olympia. The two-and-ahalf-day meeting provided plenty of opportunities for learning, leading and letting off a little steam.

New Director Orientation The Winter Board meeting is the first official board meeting for many state directors. The “New Director Orientation,” held on the first evening of the board meeting, is designed to help new directors feel a little more comfortable in their new roles.

Builder Legislative Action Day On the afternoon of Tuesday, March 21, members of local homebuilding associations statewide boarded chartered buses to the state Capitol.

BIAW Legislative Director Josie Cummings provides a legislative update to the BIAW Remodelers Council and guests on March 21.

members with their businesses and their leadership roles.

The Executive Officers’ Council brought in Layci Nelson of Transcend Leadership Collective to help them with managing change in their organizations, both on the staff side and during leadership transitions.

They spent the afternoon meeting with legislators from both chambers and both parties, armed with a stack of $31,000 in “BIAW bucks” and a pair of safety scissors to help legislators remember: the average permit delay in Washington is 6.5 months, adding $31,000 on average to the cost of a new home. It’s time to cut the costs!

Hammers & Highballs The group reconvened in the main ballroom on the evening of March 21 for the Hammers & Highballs Reception.

BIAW welcomed a record-breaking

The Remodelers council heard speakers from Navigate Financial, who discussed “Getting Your Financial House in Order.”

The 30-minute presentation covered everything from setting a financial foundation to planning for the future and protecting against economic downturns.

Kimberley Martin, MBAKS; Ryan Babbit, Master Builders Pierce; Liz Coker, JCHBA; Darylene Dennon, MBAKS; and BIAW President Gary Wray, SICBA, enjoy the New Directors Orientation Reception on March 20.

Nelson also joined the Local Area Presidents’ Council for a presentation on “Managing Volunteers & Personalities: Including Your Own.”

This year, the orientation was held on the evening of March 20 before most committee work was underway, featuring an overview of BIAW, staff and their roles and all the committee meetings board members can attend.

Many veteran board members and senior officers attended to welcome the new directors and answer questions.

Training and education At the request of board members, this year several of the standing committees offered educational training and professional development to help 10

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MBAKS contract lobbyists Alex Hur (l) and Scott Hazlegrove (2nd from left) and State Government Affairs Manager Dylan Sluder chat with House Majority Leader Joe Fitzgibbon (D-Burien) at the Hammers & Highballs legislative reception on March 21.

CWHBA members meet with their 14th District team, Rep. Gina Mossbrucker (3rd from left), Rep. Chris Corry (center) and Sen. Curtis King (3rd from right). CWHBA members and staff (l-r): Chris Nass, Melissa Brewer, Kelly Sowder, Tim Lovelass, Ryan Moore and Lindsay Brown.

attendance of electeds and 40 legislators from both sides of the aisle, including House Speaker Laurie Jinkins. scan me BIAW’s Housing Spotify playlist played in the background and key housing facts rotated on the big screen highlighting how and why certain policies make homebuilding so expensive.

2023 Associate Advisory Council Star Builder Awards During each Winter Board Meeting, BIAW’s Associate Advisory Council recognizes builder members who give back to our industry at the local, state and national levels with Star Builder Awards.

Winners are also recognized for their community service, political activity and environmental efforts.

Aaron Helmes Generation Homes NW, LCC Building Industry Association of Clark County Associate Advisory Council Star Builder Award winners and representatives pose for a photo at the BIAW board meeting on March 22. (l-r) Jason Wilkinson, HBATC; Aaron Helmes, BIACC; Curtis Banta, SICBA; Bobby Graham, CWHBA; Liz Coker, accepting the award for L.D. Richert, JCHBA; Daimon Doyle, OMB; Miriam Villard, accepting the award for Bob Disney, KBA; and Kent Arola, accepting the award for Kurt Wilson, MBAPC.

Bobby Graham Northwest Roots Construction, LLC

Board meeting features economic forecast and awards

Jefferson County Home Builders Association

Central Washington Home Builders Association

L.D. Richert LD Richert Construction

Wednesday’s official Board of Directors meeting was packed with great information, awards and committee reports.

(l to r) Rep. Eric Robertson (R-Sumner), Rep. Andrew Barkis (R-Olympia) and Rep. Kelly Chambers (R-Puyallup) enjoy meeting with their builder and associate constituents at the Hammers & Highballs reception on March 21.

WFG National Title’s Noah Blanton presented an in-depth look into the current economic situation and provided a 2023 Economic Forecast.

We’ve included highlights from that presentation on page 8 of this issue.

National Association of Home Builders Area 15 National Area Chair Rick Massey was also present to provide an update from our national association. continue reading on page 12

Kurt Wilson SoundBuilt Homes, LLC Master Builders Association of King and Snohomish Counties

Bob Disney Disney and Associations, Inc. Kitsap Builders Association

Daimon Doyle Doyle Construction, LLC Olympia Master Builders

Kent Arola Wind River Homes Master Builders Association of Pierce County

Hugo Prado PNW Construction and Energy Services Skagit/Island Counties Builders Association

Fred Anderson Compass Construction Spokane Home Builders Association

Jason Wilkinson Prodigy Homes Inc. Home Builders Association of Tri-Cities

Charly Myers Myers General Inc. Building Industry Association of Whatcom County

Speaker of the House Laurie Jinkins at the Hammer & Highballs Legislative Reception with (l to r) BIAW President Gary Wray, Executive Vice President Greg Lane and First Vice President/Treasurer Jay Roberts.

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2022 Top Recruiters Spike recruiters are BIAW members enthusiastic and passionate about recruiting and retaining members.

Spikes build our vital membership base, which in turn strengthens our industry’s voice on critical issues at the local, state and national levels. BIAW recognizes its top recruiters’ recruiting efforts and achievements each year during the Winter Board Meeting.

Chuck Neibert Affinity Homes, LLC

Nicole Ahola Ahola Benefit Consultants, LLC

Building Industry Association of Clark County 27 NEW MEMBERS

Central Washington Home Builders Association

Kurt Wilson SoundBuilt Homes, LLC

Bob Disney Disney and Associates, Inc.

Master Builders Association of King and Snohomish Counties

Kitsap Builders Association

22 NEW MEMBERS

19 NEW MEMBERS

17 NEW MEMBERS

2022 Top Spike Nick Gilliland Blasingame Insurance

Scott Walker Rush Residential

Spokane Home Builders Association

Master Builders Association of Pierce County

Aaron Helmes Generation Homes NW, LCC Building Industry Association of Clark County

30 NEW MEMBERS

22 NEW MEMBERS

15 NEW MEMBERS

Dale Cargile North Ridge Contracting, LLC Spokane Home Builders Association 15 NEW MEMBERS

Nichole Banegas Gale-Rew Construction, Inc. Home Builders Association of Tri Cities 12 NEW MEMBERS

Darin Peters Celebration Homes Central Washington Home Builders Association 12 NEW MEMBERS

Corey Condron Condron Homes Spokane Home Builders Association 12 NEW MEMBERS

Sue Elkin Homeownership Center Northwest Master Builders Association of Pierce County 12 NEW MEMBERS Nick Gilliland of Blasingame Insurance with Spokane Home Builders Association recruited 30 new members and is BIAW’s Top Spike for 2022.

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Associate Spotlight

Building community with Joel Tanasse

by Hannah Cassara Content Specialist

A dedicated member of BIAW and the Home Builders Association of TriCities (HBATC), Joel Tanasse of Fred’s Appliance in Kennewick has made significant contributions to the Tri-Cities community for over 25 years.

A graduate of Washington State University, Tanasse grew up in Stevenson, Wash., before moving to the Tri-Cities, where he has resided for the last 34 years. Before starting with Fred’s Appliance 13 years ago, he spent 12 years at Sears Commercial.

“

the Central Washington Home Builders Association (CWHBA).

The following year, Tanasse joined the HBATC board of directors, which he still serves today.

Tanasse’s commitment to serving the community is evident through his many years of service on HBATC’s Community Service Committee. The committee works to share donations to charitable organizations in the Tri-Cities area.

When asked what he has found to

Working in the building industry, being a part of building communities and fighting to keep housing affordable is so rewarding.

25 years of dedication In the fall of 1997, Tanasse joined the HBATC after being introduced to the organization by long-time member Don Cash, who Tanasse replaced upon being hired by Sears. He was already familiar with the association because his father, Cliff Tanasse, was heavily involved with

— Joel Tanasse

Committee and participates in many HBATC events. At BIAW, Tanasse served as Second Vice President in 2010 and 2016. His help recruiting more members has earned him the status of Super Spike, with 401 Spike credits.

Contributions rewarded Tanasse’s dedication and hard work over the years have not gone unnoticed. At the 2022 BIAW Fall Board of Meeting, Tanasse was honored with the Associate Appreciation Award. The HBATC proudly nominated him for the award because of his “significant contributions and continuous dedication to the association.”

His extensive experience and leadership have helped to guide the association’s growth and development, ensuring that it remains a strong and effective advocate for the building industry in Tri-Cities.

be the most valuable part of his membership over the years, he said, “The relationships, both professional and personal (some even both).”

Tanasse embodies Fred’s Appliances’ commitment to quality and service. With over 40 quality brands and over 14,000 items in stock, Fred’s Appliance offers an unparalleled selection of products.

Since joining, Tanasse has served on the Membership Appreciation Committee, which he has chaired for six years. He has also served on the Golf Tournament

“Working in the building industry, being a part of building communities and fighting to keep housing affordable is so rewarding,” Tanasse said.

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TOP 10 CHANGES TO THE BUILDING CODES YOU NEED TO KNOW

by Andrea Smith

Policy and Research Manager

With updates to Washington’s building codes coming into effect on July 1, it is crucial for members to be aware of what significant changes will impact their operations the most. Below is a list of the top 10 significant changes you need to be aware of as July approaches.

1 WUI

The newly enforced Wildland Urban Interface (WUI) code applies a new set of standards to construction statewide to reduce property loss from wildfires. The Department of Natural Resources completed mapping of WUI zones for local jurisdictions to use for enforcement. Interestingly, the map doesn’t provide parcel-level detail and provides the building official sole discretion over determinations of findings of fact. If you’re wondering what WUI covers, it’s everything from roofs, eaves, windows, doors, decking and much, much more.

2 HEAT PUMPS

In one of the most controversial decisions of the code cycle, the State Building Code Council (SBCC) adopted a mandate that all new housing units must be equipped with heat pumps for space and water heating—unless the new construction meets one of eight exceptions—think building sites with no access to electricity. While not a full ban on natural gas, this presents a very restricted opportunity under the code to use natural gas as a primary energy source for a home. You’ll see in the new R406 tables that project owners can still decide to use natural gas furnaces but it comes with a distinct disadvantage of -3.0 credits—forcing owners to gain credits in other (and more expensive) areas of the R406 table, regardless of whether or not they’re even able to connect to electricity.

3 SMALL ADDITIONS

Under the current code, additions less than or equal to 500 square feet had to meet 1.5 energy code credits for compliance with the code.

Unsurprisingly, this created issues for homeowners seeking to add a walk-in closet or similar type of small addition.

Under the newly adopted code, small additions 150 square feet and under will no longer have to adhere to energy code credit requirements.

CODE 4 ENERGY CREDITS

If there’s a silver lining in the heat pump mandate, it’s that it allowed the SBCC to adopt the less burdensome energy credit table. Small, medium and large dwelling units all saw reduction of at least a half credit.

Small (less than 1,500 sq. ft.)

2.5 credits Medium (1,500 sq. ft. to 4,999 sq. ft.)

5 credits Large (5,000+ sq. ft.)

6 credits Additions (150-500 sq. ft.)

2 credits Group R-2 4.5 credits **Small additions (under 150 sq. ft.) are exempt from energy code requirements.

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5 AIR LEAKAGE

In a win for the industry, Daimon Doyle, residential home builder representative on the SBCC, was able to negotiate an air leakage rate of 4 CFM instead of the proposed 3 ACH (the current rate is 5 CFM). During the November 4, 2022, code adoption meeting, Doyle stated, “there are so many factors that go into air sealing… builders need to be educated on how to get to 4 CFM. It’s a real struggle. There is no one-size-fits-all.”

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EV CHARGING

Despite the International Code Council ruling that EV charging falls out of the scope of the International Residential Code, Washington has adopted this requirement in its version of the IRC. That means all new homes with attached private garages or attached private carports will have to pre-wire for EV charging. A minimum of one 40-amp dedicated 208/240volt branch circuit must be installed in new electrical panels. The branch circuit should terminate at a junction box, receptacle outlet or EV charging equipment.

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LOFTS

The code is not silent on lofts anymore, as a code change submitted by the Washington Association of Building Officials has been adopted. Essentially, lofts are now treated as mezzanines in the code, as opposed to a habitable attic.

These changes allow for a lower ceiling height, unrestricted use of space, and more.

8 EXISTING BUILDINGS AND STRUCTURES

Appendix J of the IRC has been moved (and restructured) to Chapter 45. There’s a whole host of changes to the code language that covers repairs, alterations, additions, and relocations that are worth checking out. A huge thank you to the City of Tacoma for submitting the adopted proposal that gives more flexibility for existing construction that should make it less expensive for existing homes to comply with the building codes.

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RADON

If you build in a county that has to follow Appendix F because of high levels of radon, the new testing requirements may be a cause for concern. If your county requires radon reduction systems, you must achieve a test result at or below 4 pCi/L. If not achieved, further mitigation and retesting must occur until 4 pCi/L or below is met. Proper planning for when to test for radon and mitigate is necessary to ensure this new requirement does not hinder closing status of homes in highradon counties.

10 KITCHEN EXHAUST RATES

If you’re familiar with kitchen exhaust rates in the mechanical code, you’re probably aware that the current airflow rate is 100 CFM. With the new suite of code changes, this will change dramatically, depending on the type of range you’re installing in new homes. For example, a hood over electric range will now require at least 160 CFM, whereas a hood over combustion range will require a minimum of 250 CFM.

Enroll in BIAW’s series of codes classes statewide SCAN ME

BIAW has launched a series of codes classes statewide to help educate builders and remodelers on significant changes to the codes going into effect July 1, 2023.

Taught by longtime codes experts, the courses will share the significant changes the State Building Code Council adopted and the new requirements the industry needs to meet to comply.

b u i l d i n g i n s i g ht | may 2 0 2 3

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Historic Legislative Update

by Josie Cummings Legislative Director

housing session benefits builders, remodelers and future homeowners

BIAW had a historic legislative session focused directly on increasing the state’s overall housing supply and removing barriers so members can build homes more families can afford. Earlier this month, the Governor signed the following bills into law.

Expanding ADU construction (EHB 1337)

It will be easier to build and use accessory dwelling units.

Ending arbitrary design review boards (ESHB 1293)

Jurisdictions will now have written and clear design standards for construction.

Expanding residential housing options (SB 5058)

You can now build structures with 12 units or less that are two stories or less under the residential code and not the commercial building code.

Graduation Pathways (HB 1308)

BIAW president Gary Wray testifies in favor of HB 1308 with BIAW Legislative Director Josie Cummings.

Significant permit reform

Upfront SEPA Review

(2SSB 5290)

(2SSB 5412)

You won’t have to do a site plan review for fully interior remodels that don’t add bedrooms. Also, jurisdictions must start tracking permit day and processing permits within specific timelines by adopting the best permit processes. If they miss their timelines, they must refund permit application fees.

Project actions proposing to develop one or more residential housing units within the incorporated areas in an urban growth area are categorically exempt from the State Environmental Policy Act (SEPA). It also exempts middle housing within the unincorporated areas in an urban growth area (UGA) if the proposed projects do not have transportation system safety or operational deficiencies.

Middle housing (E2SHB 1110)

Property owners now have more flexibility regarding what’s allowed on their land. Local governments must recognize zero-lot line subdivision, which ensures many of this middle housing (duplexes, fourplexes, etc.) can and will be ownership units.

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Schools must notify students and partners about the different pathways offered in their district earlier. They must also add a performance-based pathway as an opportunity to partner with the trades in a new way in the K-12 system.

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Right to cure in condo construction (E2SSB 5258)

Due to condo liability reform, builders will now have more opportunities to build condominiums in Washington.

Legislative Director Josie Cummings (2nd from left in front row), MBAKS State Government Affairs Manager Dylan Sluder (behind Cummings) and BIAW President Gary Wary (6th from left) join a large group in Seattle as the governor signs multiple housing bills, including the BIAW’s priority middle housing and permit reform measures.

Legislators also included a budget proviso in the capital budget to study the effects of a three-year code cycle versus a six-year code cycle. The governor vetoed it.

n Rent control (HB 1389) n New notice requirements for rent increases (HB 1124) And, of course, some bad bills passed, too. Unfortunately, legislators voted to add climate change to the Growth Management Act, but we minimized the damage to our state’s housing supply.

There were also a bunch of really terrible labor/business regulation bills. While not specifically targeted at residential construction, several bad bills passed will have negative effects on how we do business:

n Restoring L&I’s ability to pass ergonomics rules (ESSB 5217)

n Expanding qualifications for unemployment when a BIAW’s Senior Legislative Manager Tricia Gullion joins Spokane City Council Member Betsy Wilkerson (r) and Sen. Mike Padden as Gov. Jay Inslee signs Senate Bill 5058 to ease condo regulations and provide new home ownership options in Washington.

So what didn’t happen?

Thankfully enough, legislators rejected:

n A ban on new natural gas hooks-ups in Puget Sound Energy service territory and discontinued service to natural gas customers by 2050 (ESHB 1589)

n New ecological gain standards in GMA and permitting (SHB 1735)

n Property tax increase at the local level (SB 5770)

worker voluntarily quits (ESHB 1106)

n Allowing patients to record independent medical exams for workers’ compensation, which dissuades doctors who might otherwise provide these exams (SHB 1068) Overall, this was a good year for increased housing supply of all types. Permit reform will have a significant impact on the costs as Washington’s average permit delay currently adds over $31,000 to the cost of a new home.

The 2023 legislature took steps to address those delays and increase overall supply in substantial ways and I can’t wait to see how our members utilize these tools to build more homes for our neighbors.

n An increase in high-dollar real estate transactions and a new local REET option (2SHB 1628)

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ROII scores industry-leading refunds

by Leah Jaber ROII Marketing Manager

For the first time in ROII program history, ROII received 46% on the first adjustment for the 2021 plan year.

$20 million to member companies ROII will distribute over $20 million to companies across the state, and have check amounts available to them by mid-May. Keep an eye out for check distribution events at your local home builders associations!

ROII participants are earning some serious cash. Don’t leave money on the table—get rewarded for safety at ROII.com!

Get rewarded with ROII

If you’re currently enrolled in another retro program and are thinking about switching, now is the time to do it.

Reach out to us at enroll@roii.com today!

If you’re not a participant, you can find out how to get rewarded for safety by joining the state’s largest, longestoperating Retro (Retrospective Rating) safety incentive program: ROII. ROII helps eliminate injuries through

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improvements in workplace safety and preventative strategies. If an employee is injured, we’ll help you help them get better quicker with a successful return-to-work experience.

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This is the perfect time to switch to a new retro program!

2023 ROII GROUP REFUND RESULTS Labor & Industries Adjustments Plan Year

1st

2nd

Final

Range of ROII Refund to Positive Companies

2021

46%

Done in 2024

Done in 2025

7.8% at 1st Adjustment

2020

45%

45%

Done in 2024

7.7% at 1st Adjustment

2019

39.5%

42%

39.5%

13% - 36% (Avg. 34%)

ABC Refund Results

AGC Refund Results

Labor & Industries Adjustments

Labor & Industries Adjustments

Plan Year

1st

2nd

Final

Plan Year

1st

2nd

Final

2021

42%

Done in 2024

Done in 2025

2021

41%

Done in 2024

Done in 2025

2020

37%

36%

Done in 2024

2020

44%

45%

Done in 2024

2019

34%

37%

35%

2019

36%

38%

38%

SMART ‘A’ TEAM Refund Results

Competitor Refund Results

Labor & Industries Adjustments

Labor & Industries Adjustments

Plan Year

1st

2nd

Final

Plan Year

1st

2nd

Final

2021

31%

Done in 2024

Done in 2025

2021

38%

Done in 2024

Done in 2025

2020

28%

33%

Done in 2024

2020

28%

32%

Done in 2024

2019

44%

45%

45%

2019

39%

43.5%

39%

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Local Happenings

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4 [1-3] BIAW and ROII joined Olympia Master Builders (OMB) at New Market Skills Center’s annual Construction Career Fair, Try-A-Trade, on May 4 in Tumwater. Open to high school students interested in pursuing a career in the construction industry, the day was filled with handson, blue-collar trades equipment, education and industry information.

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[4-5] Central Washington Home Builders Association (CWHBA) held its annual Dozer Day event on April 15-16 at the Yakima County Fairgrounds. This event offered all the fun of a real construction site with a wide range of heavy equipment for kids to try out including bulldozers, dump trucks, cranes and more. The event offered a fantastic opportunity for families to have fun while learning more about community safety and helping inspire the next generation of industry professionals.

[6] On April 27, OMB held its Professional Women in Building (PWB) “Food for Thought” Breakfast at the River’s Edge in Tumwater. The breakfast offered a financial market update from Financial Advisor Jason Andrew of OFS Financial Services.

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9a

8

9b

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[7-8] The Master Builders Association of King and Snohomish Counties (MBAKS) held its first Topgolf networking event on April 13 with great success. The event was sponsored by Builders FirstSource.

[9] The Skagit/Island Counties Builders Association held its 41st Annual Home and Garden Show March 24-26 at the Skagit County Fairgrounds. Circle A Trailers of Bellingham (a) won Best of Show Outdoor Booth Display, and Sounds Cedar Lumber of Mount Vernon (b) won Best of Show Indoor Display.

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[10-12] The Washington State SkillsUSA competition took place in Tacoma April 13-15 at the Pierce County Skills Center (PCSC). PCSC senior Olivia LeCompte competed and won the carpentry competition. LeCompte said, “I want to thank the Master Builders Association of Pierce County and BIAW for supporting me along my journey in the trades.

It really helped motivate me to do things I never thought I’d be able to”. LeCompte will compete at the National SkillsUSA competition in Atlanta, Georgia, where she will compete against other first-place winners from schools across the country. Good luck, Olivia!

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ROII Safety Services

Company vehicles: What every employer should know

by Bob White ROII Safety Services Director

Many employees who drive company vehicles are also allowed to take those vehicles home, whether as a company perk or just for convenience. However, employers should be aware this practice comes with additional workers’ compensation risks.

The Board of Industrial Insurance Appeals (BIIA), an independent agency that hears appeals on L&I workers’ comp and selfinsured claims, considers workers driving company vehicles to be in the course of employment. That means claims are valid if an injury occurs any time the employee is in the vehicle.

According to the BIIA, the only exceptions are when workers deviate from their route.

For example, an employee drives to a jobsite but takes a different route so they can go to their favorite coffee place on the way.

Another exception is when an employee takes the company vehicle without being directed by the employer, such as taking the company truck to run errands.

n Venho v. Ostrander Railway & Timber Co. The general rule (to which this court adheres) is that a worker injured going to and from the place of work is not “in the course of their employment.” However, there is one exception: When a workman is injured while being transported in a vehicle furnished by his employer as an incident of the employment, he is within “the course of his employment.” Employment begins when the worker enters the vehicle and ends when they leave it.

n Aloha Lumber Corp. v. Dept. of L&I The court held that the employer furnished the truck for its own benefit and the worker was in the course of employment while commuting in the employer-provided truck at the time of the accident.

n Thompson v. Dept. of L&I Workers are not covered while using employer-provided transportation for their own convenience and not at the direction of the employer or furthering the employer’s business.

n Morris v. Dept of L&I Coverage would not exist if a worker deviates from the expected business route in employer-provided transportation until they return to the expected route.

n Gray v. Dept of L&I A worker is not in the course of employment if they significantly deviate from the expected route during an otherwise authorized trip. This case can be distinguished from Morris v. Dept. of L&I 1934, where Morris had returned to the point of deviation at the time of the injury.

Outside of those specific situations, L&I will rule a claim is allowable if an injury occurs while a worker is driving a company vehicle, including driving to and from their home to the jobsite or the business location.

Here are some significant decisions by the BIIA that define when a worker is in the course of employment when using a company vehicle:

Employers should keep in mind the risks and liability if an employee is injured while driving a company vehicle. While offering a company vehicle is practical and necessary in many cases, employers should be aware of the potential hazards and take necessary precautions.

If you’re an ROII participant and would like to receive my regular safety updates, including ideas for safety topics, contact me at (360) 352-7800 ext. 109 or bobw@biaw.com.

Not and ROII member?

Learn more at roii.com.

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Building Industry Association of Washington 300 Deschutes Way SW, Ste. 300 | Tumwater, WA 98501 (360) 352-7800 | BIAW.com |

2023 SUMMER BOARD MEETING

JUNE 26-28 Your favorite events are back!

MONDAY, JUNE 26

BIAW HALL OF FAME

BUILD-PAC Virtual Golf Fundraiser h Off site: Golf District h 2 – 5 pm

EIR Awards Reception, Dessert & Drinks h 7 – 9 pm h Open to all

TUESDAY, JUNE 27

RECOGNIZING LIFETIME ACHIEVEMENT IN SUPPORT OF THE HOME BUILDING INDUSTRY

Nominate your homebuilding hero!

Membership Luncheon

Nominations Due: June 1

h 11:30 am – 1:00 pm h RSVP to your local association

Associate Advisory Council Scavenger Hunt h Off site: Spokane Riverfront Park & The Centennial h 4:00 – 6:45 pm

The BIAW Hall of Fame honors men and women who have made significant and lasting contributions to BIAW.

Spike Party h 7 – 11 pm h By invitation only *Please note: times may be adjusted SCAN ME

The Centennial Hotel 303 W. North River Drive Spokane, WA 99201

Scan the QR code to book a room

.com

Download Nomination Form

Questions? Contact Association Services Director Brenda Kwieciak at brendak@biaw.com or (360) 352-7800, ext. 113.