BISMARCK-MANDAN HOME BUILDERS ASSOCIATION APRIL 2020 || WWW.BMHBA.COM
BUILDING Building Buzz is a publication of the Bismarck-Mandan Home Builders Association.
Bismarck-Mandan Home Builders Association 2600 Gateway Ave, Ste 1 Bismarck, ND 58503 Phone: 701.222.2400 Fax: 701.250.9730
www.facebook.com/bmhba PROFESSIONALS BUILDING OUR COMMUNITY THROUGH PROMOTION OF
SINCE 1958.
www.twitter.com/bmhba
PRESIDENT Northern Plains Plumbing, Heating & Air 701-222-2155 greg@northernplains.net
Sattler Homes 701-255-7628 jeff@bismarckbuilder.com VICE PRESIDENT
www.houzz.com/pro/bmhba
Townsquare Media 701-250-6602 bill.schmid@townsquaremedia.com
Aspire Homes 701-426-8583 greg@daretoaspire.com 2ND VICE PRESIDENT Triton Homes 701-223-3030 jamie.schmidt@investcore.com TREASURER
Stoneshire Builders 701-471-6935 brian@stoneshirebuilders.com Hallmark Homes 701-471-8796 hallmarkhomes@outlook.com
PAGE 7
Dakota OutdoorScapes 701-214-1255 mckenzie@ndscapes.com
PAGE 8
Joe Vetter Construction 701-258-9394 joevetterjvc@gmail.com
PAGE 8
Boulder Homes 701-400-5554 boulderhomesnd@gmail.com Great Plains Rehab 701-400-0676 rtank@primecare.org
Apex Builders 701-527-7899 amy@apexbuildersnd.com
PAGE 12
PAGE 14
Simone Marchus Elysha Head
Representing the diversity of the building industry, the BMHBA consists of building specialists from every section of the construction field and associated industries. Your membership strengthens our voice in Bismarck-Mandan construction sector as well as at a state and national level. Please renew your membership by March 31, 2020.
Jeran Thomson
Gene Zimmerman
Brandon Bailey
Wyatt Pollert
Ron Stotz
Vance Vetter
Sara Bender
Austin Roth
Jack Hodorff
Wes Renner
Norm Clark
Monica Kirkeide
Tyler Eiseman
Todd Frietag
Wayne Schumacher Kyle Herman
Chad Wachter
Corey Theis
Dick Townsend
Travis Welle
Jayden Veil
Ryan Luetzen
Tom Kunz
Pat A. Thomas
Earl Torgerson
Heidi Schumacher
Mark Ronigen
Jami Benz
Brad Brendel Randy Selland
2020 Spring is officially here, BMHBA members! I’m looking forward to warmer days, and I imagine you are as well. With a global pandemic at the height of our minds, the BMHBA has been navigating unique situations. This isn’t a familiar situation for anyone. I would like to thank our BMHBA members for cooperating with us and being patient. We’ve recently wrapped up our 43rd Annual Home Show. Despite a bit of a smaller turnout, it was a highly successful show. Exhibitors noted that spectators were very engaged and interested. To each member who joined us, thank you. Putting on the Home Show is a rewarding feat, and year after year our members make it a great experience. I am excited to personally welcome Dawn Watson, our new Executive Officer, to the Bismarck-Mandan Home Builders Association. Dawn joins the association with plenty of applicable experience. Dawn is an energetic, creative leader and I’m looking forward to working with her. I encourage you to visit the BMHBA office and give her a warm welcome.
Regards,
2020 PRESIDENT :: BMHBA
This BMHBA has wrestled with difficult decisions during the past few weeks. Making decisions around a once-in-acentury pathogen isn’t easy for any business to endure. As the president, I would ideally like to see the Parade of Homes through. However, I must think of our community as a whole and the health and safety of everyone. The BMHBA has ultimately decided to postpone the Parade. At this time, the future Parade date is to be determined. We thank all of you for your understanding and cooperation. This was not an easy decision to make. During this unique time, I hope you’re enjoying moments with your family and creating fond memories. If you have any questions or concerns regarding the BMHBA currently, you are welcome to contact myself or Simone. We’re always open to thoughts and opinions and we want to leave the line of communication open—especially during this time. Thank you all.
MONTH
YEAR
JANUARY
MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
‘16 ‘17
‘18
‘19
‘20
0
9
0
10
2
1
3
4
5
2
0
21
22 14
2
9
52
29 40
27
26
31
46 29
16
28
31
43 48
24
18
‘15 ‘16
10
Data not collected for the ETA in 2015 and 2016.
FEBRUARY
‘15
.
‘17
‘18
‘19
‘20
0
0
0
0
0
0
0
2
2
4
1
‘15 ‘16 ‘17
‘18
‘19
‘20
‘15
‘16
‘17
‘18
‘19
‘20
1
2
0
0
0
2
0
0
2
0
0
0
1
2
6
5
0
1
11
6
4
8
3
6
14 12
8
5
6
4
10
2
3
0
0
0
0
3
0
2
0
3
0
0
16
11
18
2
4
26 13 11
15
11
17
2
2
21 20 13
13
4
1
3
2
9
13
6
11
12
6
1
7
17
7
13
20
8
3
10
16 14 26
0
‘15 ‘16
‘17
‘18
‘19 ‘20
0
0
0
2
1 N/ A
0
1
1
0
0
0
0
9
9
4
2
4
0
6
14
5
11
11
14
5
5
0
14 16
7
20
10
6
3
1
1
8
11
4
4
6
0
5
1
5
1
13
9
4
3
11
10
8
2
9
4
5
8
9
6
8
5
11
10
3
3
4
5
2
9
9
9
6
5
40
16 60
22
17
20
48 16
27
19
28
44 26
22
23
54
14 22
15
36
4
7
3
9
29 20
9
9
17
10
7
5
3
4
7
3
7
1
16
11
9
11
14
3
0
1
7
7
7
6
2
2
5
0
0
0
3
4
1
0
2
1
0
0
1
1
0
0
0
0
0
0
0
0
1
0
4
0
0
0
0
2
0
0
45
27
36
132 123 114
116
71
67
40
37
28
20
83
80
51
61
60
45
27
36
132 123 114
116
71
67
40
37
28
20
83
80
51
61
60
TOTAL
297 286 270
169
201
YTD TOTAL
297 286 270
169
201
0
0
YTD Total
-4% -6% -37% 19%
-40% 33%
-7% -7%
2%
-39%
-40% -8% -24% -29%
-4% -36% 20% -2%
Total
-4% -6% -37% 19%
-40% 33%
-7% -7%
2%
-39%
-40% -8% -24% -29%
-4% -36% 20% -2%
BISMARCK SINGLE FAMILY DWELLING J.E. HOMES
3740 STACY DR
J.E. HOMES
3902 LEIGHTON DR
J.E. HOMES
3918 LEIGHTON DR
KNUTSON HOMES
1307 HIGH CREEK RD
J.E. HOMES
3926 LEIGHTON DR
JOE VETTER CONSTRUCTION
4700 GREY HAWK LN
HALLMARK HOMES
3333 GALATIN DR
LEGENDARY HOMES
113 ASPEN LN
J.E. HOMES
3618 MERIDIAN DR
2020 BMHBA HOME SHOW RECAP The Bismarck-Mandan Home Builders Association recently wrapped up the 43rd Annual Home Show at the Bismarck Event Center. The Home Show was made up of 168 exhibitors, including 15 Pride of Dakota vendors! Over the course of two days, exhibitors showcased intricate booths from all aspects of the home building industry. Drinks were enjoyed in the Central Park Beer Garden, and Treat Totes were provided to the first 100 children. Despite challenges, the BMHBA saw the Home Show through and we’re happy we did. The Bismarck-Mandan Home Builders Association is truly grateful for each member who had a booth in the show, and to every person who helped make the show possible. This was a great show, and I know next year will be even better.
DAWN WATSON NAMED CHIEF EXECUTIVE OFFICER FOR THE BISMARCK-MANDAN HOME BUILDERS ASSOCIATION The Bismarck-Mandan Home Builders Association has hired Dawn Watson as the new Chief Executive Officer. Dawn comes to the Bismarck-Mandan Home Builders Association with over 25 years of experience in communications, sales, marketing, advertising, networking, special event planning, membership, advocacy and management. Her previous roles include Communications & Membership Director for the ND Association of REALTORS®, small business owner for (8) years with BalanceDiet and SlimSpa Weight Loss & Wellness, Executive Director for the U.S. Durum Growers Association, Communications Director for the ND Grain Growers Association, Business Development Director for Kat Communications and several Civil Service Marketing Director positions that she held with the Department of Defense while her and her husband, Bill, served in the U.S. Army. Two of Dawn’s favorite positions included her role as a Marketing Director in the Republic of Korea for (42) base camps and her deployment to Bosnia-Herzegovina where she served as the Entertainment & Tours Director for U.S. soldiers all across Bosnia-Herzegovina. She is married to her high school sweetheart Bill Watson, who retired as an Army Aviation Officer in 2017 and currently serves as an Assistant Federal Security Director for TSA. Bill is also a licensed real estate agent for Bianco Realty. They have three children – Ben (13), Samantha (11) Gracie (10). Both are very active in their children’s lives with activities, academics and athletics. Bill and Dawn coach their daughter’s travel basketball team together. The Bismarck Mandan Home Builders Association is very excited to have Dawn join the team. They are excited to have someone of Dawn’s caliber, background and experience take the association to the next level for their membership as well as their association. Bismarck-Mandan Home Builders Association – Proud to promote the growing building industry in Bismarck, Mandan and the surrounding communities. https://www.bmhba.com
BURLEIGH COUNTY REJECTS APPEAL TO REZONE AREA NORTH OF BISMARCK Burleigh County Commissioners unanimously rejected an Some people living near the site of the proposed project appeal from developers seeking to change the zoning in an attended Monday's meeting to voice their opposition to the area between Bismarck and Baldwin. proposal. The roughly 20-person turnout at the meeting was significantly lower than at the Planning and Zoning Bismarck-based real estate company Pioneer Land asked Commission meeting last month, which drew about 70 the County Planning and Zoning Commission on Feb. 12 to people. Seats on Monday were spaced 10 feet apart due to change zoning from agricultural to planned use the coronavirus pandemic. development, a real estate development that includes residential and commercial buildings. "Our outlook has not changed. Bodies aren’t out here tonight. But the communication that you had from all of us The proposal prompted complaints from area residents has not changed," said Linda O'Shea, who had also attended who feared a decrease in property values and congestion the Planning and Zoning Commission meeting. along a road that they use to take U.S. Highway 83 to Bismarck. The Planning and Zoning Commission voted 8-1 The proposal also involved building a wastewater to reject the proposal. treatment facility by 26th Street Northeast and 110th Avenue. At Monday's county commission meeting, Pioneer Landowner Arthur Goldammer said the planning Resident Karl Rakow attended Monday's meeting to commission's criticism was "not appropriate largely due to express his concerns with how the proposed facility would the conformity to the comprehensive plan," referring to a discharge filtered and cleaned wastewater into the Missouri plan the county uses as a guide to developing and River, via Burnt Creek -- which he said runs along the corner implementing zoning ordinances. of his property and where his grandchildren play. He said he is pleased the commissioners rejected the appeal. A letter from Pioneer Land said the Burleigh County Highway Department has reviewed infrastructure at the "On those holding ponds from the two developments, proposed property's site and found it "adequate to handle when that water is released, is like 1.9 million gallons. I additional traffic flows." mean it's huge," Rakow said. "My main concern is the water quality and who's responsible for testing it, and who "I think this has been vetted pretty good," Commissioner maintains, if there are issues, that the pumps or filters or Jim Peluso said. "We have all received probably emails, or whatever is involved in that system is fixed." messages, or letters, and it's pretty hard for us to go against the planning commission."
BUILDING CODE UPDATE The City of Bismarck Building Code was recently updated to the 2018 edition of the International Building Code, International Residential Code, International Mechanical Code, International Fuel Gas Code, International Existing Building Code, and International Energy Conservation Code. An update process occurs every 3 years with initial model codes published by the International Code Council followed by adoption at the state and local jurisdiction levels throughout North Dakota. Within this code update cycle, City of Bismarck staff worked with the Bismarck Mandan Home Builders Association, the City of Mandan and Burleigh and Morton counties to provide a set of building regulations that are
relatively consistent with the state and surrounding jurisdictions with a few exceptions. The updated Title 4 Building Regulations Ordinance; including local amendments, can be viewed online at the City of Bismarck website. The new regulations are effective as of February 11 of this year. If you would like to receive a text message or email regarding future meeting notifications and updates like this from the Community Development Department Building Inspections Division, please visit the City of Bismarck website at https://www.bismarcknd.gov/, click on the “Notify Me” icon located on the home screen, sign in and subscribe to “Notify Me”, Building Inspections Updates category.
MANDAN BUILDING PERMIT VALUES INCREASE IN 2019; FEES COLLECTED FROM PROJECTS DROP The value of building permits issued in Mandan in 2019 increased 18% from the year before, but the fees the city collected from projects dropped 13%. The total value of building permits the city issued last year was $46.5 million, compared to $39.6 million in 2018. Building permit fees collected were $357,617, compared to $411,357 the year before. "Basically the declared value is the value of the building the day the permit is issued, and the permit fees are based on the cost of construction," Mandan Building Official Shawn Ouradnik said. "Some of the permit fees that were collected the year before were just higher," he said. "(Projects) cost more to construct, or more to do what they were doing, than it did the next year." The city issued 73 permits for single-family homes in 2019, compared to 115 in 2018 -- a 37% decrease. A decline in the number of lots available could explain the drop, Ouradnik said. The number of building permits for single-family homes fluctuates year to year, stemming from changes in the housing market and the number of people moving into the Mandan area. Greg Meidinger, Aspire Homes owner and BismarckMandan Home Builders Association board member, said the decrease "shows a little bit of a slowdown that we had in housing the last couple of years." Mandan saw a $12 million jump in multifamily residential projects last year with the construction of two 54-unit apartment buildings, after no multifamily residential projects were built in 2018.
Mandan issued 29 commercial permits in both 2018 and 2019 for remodels and additions. Last year, commercial building projects accounted for 118% more in total value compared to 2018. The total value of commercial building permits in 2019 was $14.7 million, compared to $6.8 million in 2018. Commercial building projects brought in $44,449 in fees last year, compared to $31,854 in 2018 -- about a 40% increase. Ouradnik said there hasn't been "one big project these last couple of years" that has brought in a significant increase in fees. Still, he mentioned how Malloy Electric, a business that services and provides supplies for electric equipment and motors, contributed to the total value of building permits in 2019 when it doubled the size of its building. DaWise-Perry Funeral Services' expansion with the city's first crematorium, which it plans to finish this summer, also factored into 2019 building permit numbers. The decrease in fees Mandan collected from building permits last year compared to 2018 is "not terrible," Ouradnik said. "We don't like to see decreases at any time, but as long as people are still constructing and stuff, we are going to do what we can for them," he said. The cost of building projects doesn't matter as much as the services the finished product provides, Ouradnik said. For example, he said, new construction might have a higher impact than a remodel "just because of the quality of the product they might be bringing in for certain things, or what the building is used for."
HOMES BUILT FROM HEMP A new Bismarck-based business is experimenting with plant-based building materials to construct homes and buildings. Owner of Homeland Hempcrete Matt Marino says hemp might be an option for the future. Mix water, lime from limestone and hempearth, and you have a batch of hempcrete. "The simplicity is what brought us to this product originally. You're taking the biproduct of a crop essentially. A crop that we're already utilizing and we're taking the biproduct and building homes with it," said Marino.
Marino launched Homeland Hempcrete at the start of 2019 as another possible way to build homes. Since then, he's constructed a shed in Mandan out of hempcrete to demonstrate its durability. "Hemp's super light and airy, but it's super strong. So, you could get a house that is super well insulated that can deal with climates like North Dakota," said Marino. Next year, Marino plans to build his first home completely out of hemp. Marino says his long term goal is to build North Dakota homes out of North Dakota hemp.
MANDAN BUILDING PERMIT VALUES INCREASE IN 2019; FEES COLLECTED FROM PROJECTS DROP The value of building permits issued in Mandan in 2019 increased 18% from the year before, but the fees the city collected from projects dropped 13%. The total value of building permits the city issued last year was $46.5 million, compared to $39.6 million in 2018. Building permit fees collected were $357,617, compared to $411,357 the year before.
2019 for remodels and additions. Last year, commercial building projects accounted for 118% more in total value compared to 2018. The total value of commercial building permits in 2019 was $14.7 million, compared to $6.8 million in 2018. Commercial building projects brought in $44,449 in fees last year, compared to $31,854 in 2018 -- about a 40% increase.
Ouradnik said there hasn't been "one big project these "Basically the declared value is the value of the building last couple of years" that has brought in a significant the day the permit is issued, and the permit fees are based increase in fees. on the cost of construction," Mandan Building Official Shawn Ouradnik said. Still, he mentioned how Malloy Electric, a business that services and provides supplies for electric equipment and "Some of the permit fees that were collected the year motors, contributed to the total value of building permits in before were just higher," he said. "(Projects) cost more to 2019 when it doubled the size of its building. DaWise-Perry construct, or more to do what they were doing, than it did Funeral Services' expansion with the city's first crematorium, the next year." which it plans to finish this summer, also factored into 2019 The city issued 73 permits for single-family homes in building permit numbers. 2019, compared to 115 in 2018 -- a 37% decrease. In addition, the former location of United Printing at 1710 A decline in the number of lots available could explain E. Main Ave. was remodeled by Dennis Parr Industrial the drop, Ouradnik said. The number of building permits for Enterprises in 2019. Old 10 Bar & Grill's remodeling last year single-family homes fluctuates year to year, stemming from in downtown Mandan also was a significant local business changes in the housing market and the number of people project, along with Running's move downtown and moving into the Mandan area. renovations totaling $1 million, Van Dyke said. Greg Meidinger, Aspire Homes owner and BismarckIn 2018, Redmann Law moved downtown into an 86-year Mandan Home Builders Association board member, said the -old building, which it restored. The renovations on the decrease "shows a little bit of a slowdown that we had in historic building on First Avenue Northwest "really brought housing the last couple of years." up the aesthetic of that block," Ouradnik said. Guitar Lot also remodeled an existing building when it moved to "This year, things seem to be more busy," he said. Mandan two years ago. "There's more interest coming into spring than we've had in the last three to four years, so I wouldn't be real surprised if The decrease in fees Mandan collected from building those numbers kind of turned around and went the other permits last year compared to 2018 is "not way." terrible," Ouradnik said. Mandan saw a $12 million jump in multifamily residential "We don't like to see decreases at any time, but as long projects last year with the construction of two 54-unit as people are still constructing and stuff, we are going to do apartment buildings, after no multifamily residential what we can for them," he said. projects were built in 2018. The cost of building projects doesn't matter as much as "When you are doing projects like that, they are not going the services the finished product provides, Ouradnik said. to occur every single year," Mandan Principal Planner For example, he said, new construction might have a John Van Dyke said. "If you are going to invest that much higher impact than a remodel "just because of the quality of money at one single point in time, then you are going to the product they might be bringing in for certain things, or have to make sure the market's going to respond well to the what the building is used for." new inventories." Mandan issued 29 commercial permits in both 2018 and
BE PREPARED FOR CHANGES IN THE SUPPLY CHAIN CAUSED BY THE CORONAVIRUS The coronavirus pandemic has caused many disruptions and may well impact residential construction in the coming weeks or months. Last week, California issued a far-reaching “stay-at-home order” for its 40 million residents. This order is required except for those needing to get food, take care of a relative, or go to an essential job in one of 16 sectors specifically identified. Other states and cities are following suit.
ways to address unexpected price increases in building materials may be to use an escalation clause. If you do not already include an escalation in your contracts, consider adding one.
contract adding one, they may have difficulty trying to recover those higher costs. Consider consulting with your attorney for additional guidance and assistance with existing contracts.
Escalation clauses specify that if building materials increase, by a certain percentage for example, the customer would be responsible for paying the higher cost. Including such a clause allows all parties to be on notice that the contract costs could change if materials prices change due to supply constraints outside the builder’s control.
Having an escalation clause should not be limited to contracts with a potential home buyer but should also be used in builders’ contracts with suppliers, subcontractors, or others who may be relying on building materials to complete all or part of a project.
With this most recent development, companies should evaluate their businesses, including their contracts, and be prepared for the possibility that For companies with existing building materials prices may increase contracts, if they do not already have as a result of supply chain disruptions. an escalation clause or similar As part of an overall contract provision in place to address increased assessment, one of the most efficient prices, absent an amendment to the
Finally, think about your business, evaluate your supply chain and identify other options in the event some of your materials are delayed or your costs increase. Have a plan in place to handle potential supply chain disruptions.
HBI LAUNCHES COMPLIMENTARY ONLINE LEARNING ALTERNATIVES The coronavirus pandemic continues to challenge all sectors of our economy and our educational systems. HBI, a national leader for career training in the building industry, announced complimentary access to online learning alternatives for local schools and training programs. This access comes in response to increasing K-12 requests across the nation. The Flexible Instruction Day (FID) material does not require textbooks or workbooks to accommodate self-paced online learning. Students will learn fundamental knowledge and skills, such as safety, communication, social media presence and interviewing techniques. “It’s important to us at HBI that our students, instructors and partners continue to receive quality educational
resources, even during challenging times,” said Ed Brady, HBI President and CEO. “Ultimately, it’s about the collective effort of all of us— educators, industry, parents and even students themselves—knocking down barriers to ensure the student experience results in graduates confidently entering the next stage of their lives and the workforce. We’re fortunate to be part of a community that has come together to achieve that goal—in this case, by extending our support further into the digital landscape.” Access to this material will be available through May 1. NAHB members and local home builder associations are encouraged to share this information with local schools and training programs.
PLACE YOUR AD HERE FOR PREMIUM EXPOSURE. JUST $21 PER ISSUE.
EMAIL INFO@BMHBA.COM.
CORONAVIRUS COULD AFFECT OSHA COMPLIANCE ON HOME BUILDING SITES The effects of the COVID-19 illness associated with a new coronavirus have already proven to be extraordinarily broad, ranging from the obvious strain on countries’ healthcare systems to a global economic slowdown spurred by social distancing and reduced commerce. Those impacts might be felt for months to come. But NAHB has identified at least two areas of concern for home builders in the short term, both related to compliance with OSHA standards: The availability of N95 respirators for those working with respirable silica dust and OSHA reporting standards on injuries and illnesses in the workplace. SHORTAGE OF N95 MASKS N95 filtering facepiece respirators—a staple in construction industry—may be used to protect workers from respiratory hazards such as silica dust from cutting, drilling, or jackhammering concrete, respirable particles when sanding various building materials, fiberglass particles while installing or removing insulation, or lead dust when impacting surfaces coated with lead-based paint. N95 masks are popular with healthcare workers battling on the front lines of the coronavirus pandemic. Vice President Mike Pence asked the construction industry on March 17 to donate N95 masks to healthcare workers, so home builders and contractors should expect shortages of these respirators in the coming weeks or longer. What can construction employers do to limit the need for respirator use? In short, keep the dust down by using engineering and work practice controls, specifically through the use of water delivery and dust collection systems and by limiting exposure time. NIOSH, OSHA and others have guidance that includes vacuum dust collection system, using wet-cutting techniques and minimizing the number of workers exposed
to the hazard. Here are some resources to help construction companies reduce exposure to dust on job sites that reference these techniques for specific tasks: • • • • •
Using handheld saws Drywall sanding Cutting fiber cement siding Using handheld grinders Controlling lead dust exposures
If a respirator is required, employers can also provide workers with a substitute respirator of equal or higher protection, such as N99, N100, or P100 filtering facepieces, reusable elastomeric respirators with appropriate filters or cartridges, or powered air purifying respirators (PAPR). OSHA INJURY AND ILLNESS REPORTING REQUIREMENTS Last year, OSHA issued new rules on reporting injuries and illnesses on the job site. Many are wondering if these new rules apply to coronavirus. In short, coronavirus is explicitly not exempt from reporting the way a common cold and seasonal flus are. An instance of on-the-job coronavirus transmission may be required to be reported on the OSHA 300 log or on Form 301. However, according to attorney Brad Hammock of Littler Mendelson P.C., the specific circumstances spelled out in the rule that require reporting of illness will greatly limit the reporting obligations of home builders. First, it must be shown that the virus was contracted on the job. Also, any hospitalizations that occur 24 or more hours after exposure do not need reporting. In the unfortunate event of a death of a worker less than 30 days after contracting the virus on the job, that event would need to be reported. These narrow requirements will probably result in few cases reported by construction businesses.
HOUSING PERMITS STARTED 2020 STRONG Over the first month of 2020 – and prior to the impact of the coronavirus, the total number of single-family permits issued year-to-date (YTD) nationwide reached 70,386. On a year-over-year (YoY) basis, this is a 21.2% increase over the January 2019 level of 58,086.00. Year-to-date ending in January, single-family and multifamily permits reported growth across the country. Northeast led in both sectors with 23.9% growth in single-family and 42.2% growth in the multifamily permits. Southern region recorded the slowest growth at 20.0% in singlefamily permits while the West recorded the slowest growth in multifamily permits at 5.5%. Between January 2019 YTD and January 2020 YTD, 42 states saw growth in singlefamily permits issued while 7 states and the District of Columbia registered a decline. Vermont remained unchanged. Nevada recorded the highest growth rate during this time at 66.4% from 782 to 1301, while single-family permits in the District of Columbia declined by 68.8%, from 16 in 2019 to 5 in 2020. The 10 states issuing the highest number of single-family permits combined accounted for 64.7% of the total single-family permits issued. Year-to-date, ending in January 2020, the total number of multifamily permits issued nationwide reached 42,463. This is 16.8% ahead over the January 2019 level of 36,353. Between January 2019 YTD and January 2020 YTD, 27 states and the District of Columbia recorded growth while 23 states recorded a decline in multifamily permits. Ohio led the way with a sharp rise (599.1%) in multifamily permits from 223 to 1,559, while North Dakota had the largest decline of 100.0% from 2 to 0. The 10 states issuing the highest number of multifamily permits combined accounted for 68.2% of the multifamily permits issued.
FEDERAL REGULATORS URGE BANKS TO WORK WITH BORROWERS AFFECTED BY COVID-19 Federal regulators urged banks and other institutions today to work with borrowers affected by COVID-19, stating that loan modification programs “are positive actions that can mitigate adverse affects on borrowers due to COVID-19.” Short-term loan adjustments such as payment deferrals and fee waivers will not require banks to increase capital reserves and such loans do not need to be classified as a “troubled debt restructuring,” according to the joint statement from the Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency and Conference of State Bank Supervisors. In the joint statement, the regulators said: “The agencies will not criticize financial institutions that mitigate credit risk through prudent actions consistent with safe and sound practices. The agencies consider such proactive actions to be in the best interest of institutions, their borrowers, and the economy.”
A MESSAGE FROM NAHB CHAIRMAN DEAN MON With the coronavirus hitting all sectors of the economy, NAHB is working diligently to mitigate its effects on the residential construction sector. Congress has passed an emergency response coronavirus bill that includes tax credits to help businesses and self-employed individuals to cover some of the costs of mandatory sick leave included in the legislation. More details on the bill can be found here. Earlier this week, NAHB participated in a conference call with White House officials to discuss strategies to provide needed aid and stimulus to the housing sector in the wake of the coronavirus threat that is wreaking short-term havoc on the national economy. I am pleased to report that less than 48 hours later President Trump put our recommendation to provide mortgage relief to home owners into effect when he announced that HUD is suspending foreclosures and evictions for mortgages insured by the Federal Housing Administration through the end of April. Below is a list of other topics we discussed with the White House to keep the housing sector running with as little disruption as possible during this outbreak: •
Urge Congress to temporarily eliminate the payroll tax to provide additional cash reserves to businesses and individuals.
•
Work with HUD and USDA to ensure that federal rental assistance programs are properly funded.
•
Ensure uninterrupted processing of applications for federal mortgage insurance and loan guarantee programs assistance.
•
Provide emergency rental assistance to help those unable to pay their rent due to lost income from COVID-19.
•
Ensure there are no delays to Low-Income Housing Tax Credit (LIHTC) projects that are in the pipeline.
•
Establish a minimum 4% LIHTC rate for acquisition and bond-financed projects, which would provide more certainty and flexibility in financing these properties.
•
Fix Davis-Bacon split wage determinations for FHA-insured multifamily mortgages to provide certainty to lenders and developers.
•
Provide emergency HOME and CDBG funding to stimulate
housing construction and public works spending on state and local projects.
•
Let Fannie Mae and Freddie Mac purchase AD&C loans from community banks to help maintain the flow of credit for home building.
•
Provide a one-year extension to the GSE Qualified Mortgage patch to prevent undue disruptions to the mortgage industry.
•
Allow investors to use the FHA203(k) program as a source of financing for renovation activities.
•
Restore new construction approvals in the HUD condo rule to boost the supply of affordable housing.
•
Provide relief for federal business license renewals, training and certification classes affected by the outbreak.
•
Ensure the federal government issues permits and other approvals promptly.
•
Ease the SBA Economic Injury Disaster Loan requirements and allow builders to use these loans for construction of spec homes.
•
Ensure any aid to targeted to industries must be equally available to trade associations of any size that have been financially harmed by the coronavirus pandemic.
•
Consider options to keep home construction active amid government guidelines for work activities.
This is not an inclusive list. Our message to the White House is simple, yet urgent: As housing goes, so goes the economy. We are just at the beginning stages of this process. We’ll reevaluate as the situation progresses and will be making more policy asks as warranted. Meanwhile, builders in the near-term should be prepared for approval and other business delays, check on their subs and workforce, and watch their cash reserves. Once mitigation efforts end to check the spread of the coronavirus, housing should be set for a rebound given low mortgage rates. NAHB continues to work tirelessly and do all we can at the local, state and federal levels to assure that the housing sector continues to remain healthy during this difficult time. As always, I will keep you informed of any significant updates as they arise.
EVALUATING YOUR CONTRACTS IN THE WAKE OF THE CORONAVIRUS PANDEMIC Home builders should expect delays caused by supply chain disruption, workforce unavailability, and even permitting due to shelter-in-place recommendations to stem the spread of COVID-19 caused by a novel coronavirus. Companies should carefully review their contracts now for certain provisions that allow for such delays. One of the principal roles of a commercial contract is to allocate risk between the parties. A force majeure provision allocates risk and provides notice to the parties of events that may suspend or excuse performance under the contract if specified events occur that are beyond the party’s control. A force majeure provision allows a contracting party to mitigate its risk of breach due to events or circumstances it did not cause and could not have anticipated. In addition to allowing a builder additional time to complete the project, it might also allow for termination of the contract if performance is prevented beyond a specified period. With the spread of coronavirus, businesses may be unable to fulfill pre-existing contractual obligations due to delays in production, shortages of materials, or lack of employee availability due to quarantine or inability to travel due to travel restrictions. Business restrictions imposed by governments are becoming more commonplace. For example, Boston Mayor Marty Walsh suspended all regular construction activity in the City of Boston starting Tuesday, March 17, 2020, and the San Francisco Mayor issued an Order, which began at 12:01 a.m. Tuesday, requiring all individuals anywhere in San Francisco to shelter in place—that is, stay at home—except for certain essential activities and work to provide essential business and government services. Quarantines are resulting in disruptions in supply chains, delaying imported building materials. And slowdown of permit processing due to government office closure or telecommuting might also further impede a builder’s performance under the contract. Builders should review their contracts with their attorney to determine whether they include a force majeure clause or a similar clause dealing with the concept
of delays and extensions of time for performance. To avail itself of a force majeure provision, the builder may need to comply with other relevant contractual provisions, such as one requiring the giving of notice to the other party. Failure to provide such notice may constitute a breach of the agreement.
Force majeure events and circumstances may be either: • •
Natural occurrences Man-made events or circumstances
What types of events constitute force majeure depend on the specific language included in the clause itself. Common examples of force majeure events include: • • • • • • •
Unavailability of materials Inclement weather Strikes Changes in government regulations Acts of government agencies or their employees Acts of God Any event reasonably beyond the Builder’s control but not caused by the Purchaser
A party seeking to rely on a force majeure clause must first establish that the intervening event falls within the contract’s definition of force majeure. Most force majeure clauses provide a list of triggering events. Where coronavirus, or COVID-19, is not captured by a specific or analogous term, it may nevertheless be covered by broader language in the contract. It remains to be seen how courts, arbitration panels, and other tribunals will resolve the issue of whether COVID-19 and the associated impacts, such as quarantine, constitute a force majeure event. It is critical to understand how your contractual rights can protect your company – now is the time to review key contract and insurance policies, and if you have questions or need advice, contact your local attorney. Additional information for home builders may be found on the Coronavirus Preparedness and Response page on nahb.org.
2600 Gateway Ave, Ste 1 Bismarck, ND 58503
Review us on Google! Write a Google review about the Bismarck-Mandan Home Builders Association and receive a FREE BMHBA HITCH COVER!