BISMARCK-MANDAN HOME BUILDERS ASSOCIATION MARCH 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
PRESIDENT Northern Plains Plumbing, Heating & Air 701-222-2155 email@example.com
Sattler Homes 701-255-7628 firstname.lastname@example.org VICE PRESIDENT
Townsquare Media 701-250-6602 email@example.com
Aspire Homes 701-426-8583 firstname.lastname@example.org 2ND VICE PRESIDENT Triton Homes 701-223-3030 email@example.com TREASURER
Stoneshire Builders 701-471-6935 firstname.lastname@example.org Hallmark Homes 701-471-8796 email@example.com
Boulder Homes 701-400-5554 firstname.lastname@example.org
Dakota OutdoorScapes 701-214-1255 email@example.com
Great Plains Rehab 701-400-0676 firstname.lastname@example.org
Joe Vetter Construction 701-258-9394 email@example.com
Apex Builders 701-527-7899 firstname.lastname@example.org
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. Becky Sad Denise Ziegler Kelsey Dahl Jordan Anderson Bruce Aberle Mona Livdahl Greg Burr Marc Menge
Parker Pladson Mark Perry Deb Stoppler Jason Franzen Grant Miller Shelley Werner Greg Sattler Scott Moran Jason Voegele
2020 Hello BMHBA members, March is here and it appears to be bringing warm weather with it. Now let’s hope it doesn’t leave like a lion. Our next big event is the 43rd Annual Home Show. The Home Show is March 13th 3-9 PM and March 14th 9 AM – 5 PM. Limited booth space is available. Please contact the office or visit BisManHomeShow.com to register your booth. The Home Show is a great way to get in front of many potential home buyers and start selling new builds for the spring. As many of you have heard, Dot Frank resigned from her position as the Executive Director for the BMHBA. At this time, we are advertising the position and hope to have it filled shortly. Thank you for the support and encouragement as we work to get the position filled. Save the date for the Spring Parade of Homes April 23rd – 26 . You should be receiving your contacts this month to register homes for the parade. I encourage the builders to get the contracts filled out and sent in. Remember that this event is not only for the builders, but any member can display items in the home or help work the ticket desks. th
Finally, I encourage all our members to recruit other Regards,
2020 PRESIDENT :: BMHBA
people in the industry to join our association. We are only as strong as our members. The larger our association gets the more influence we have on local, state and national issues. BMHBA Upcoming Events: •
Home Show, March 13-14 get you booth by visiting BisManHomeShow.com
Spring Parade of Home, April 23rd – 26th
2020 Spring Mixer & GMM, May 20th
March 1st marks the beginning of the fourth annual National Ladder Safety Month, a month-long campaign to promote ladder safety training. This is a topic of utmost importance to everyone in the home building industry as ladder accidents comprise a huge percentage of jobsite injuries and OSHA citations. The American Ladder Institute (ALI) is the presenting sponsor of Ladder Safety Month, and NAHB is now a supporting sponsor. Every year, more than 300 people die in ladder-related accidents and thousands suffer disabling injuries. Without better training and continuous innovation in safety planning and product design, we will continue to see far too many fatalities. Become a Ladder Safety Ambassador To become a Ladder Safety Ambassador, participants successfully complete ALI’s free online certification program, Ladder Safety Training. The training program is applicable for ladder use at work and at home. It teaches participants how to safely use ladders — stepladders, single and extension ladders, articulated ladders, mobile ladders, etc. — and explains how to properly select and care for a ladder. Training comprises watching four modules that demonstrate safe ladder practices on a variety of ladder types. Participants take a short quiz following each video. Successful completion of all four module exams (scoring 90% or greater) qualifies an individual to earn a ladder safety certificate. Companies, organizations and/or schools can become ALI Ladder Safety Ambassadors when 10 or more exams are successfully completed. Certified organizations receive an exclusive ALI Safety Ambassador logo and access to a robust toolkit to help spread the word about their achievement. Individuals can also proudly announce that they’ve earned the certification with a special “I’m Certified” graphic. Other Ways to Participate in #LadderSafetyMonth In addition to using the free resources and signing up for ALI’s free Ladder Safety Certification program, participants can use the official marketing guide and the tag #LadderSafetyMonth on social media to spread the word. If you are participating in Ladder Safety Month, email ALI at email@example.com to be featured on its Participation Map. Ladder Safety Resources ALI provides a variety of free resources to use at home, in the office or on the jobsite. NAHB also has video and written resources for safe ladder use on the jobsite. For more information on jobsite safety issues, contact Rob Matuga.
As interest rates declined during the second half of 2019, the stock of outstanding residential construction loans declined during the final quarter of 2019. The volume of 1-4 unit residential construction loans made by FDIC-insured institutions declined 0.8%. The volume of loans fell by $615 million during the quarter, placing the total stock of loans at $79.7 billion. n a year-over-year basis, the stock of residential construction loans is up just 1%, the lowest growth rate since the end of 2013. Since the first quarter of 2013, the stock of outstanding home building construction loans has nonetheless grown by 96%, an increase of almost $39 billion. It is worth noting the FDIC data represent only the stock of loans, not changes in the underlying flows, so it is an imperfect data source. Lending remains much reduced from years past. The current amount of existing residential AD&C loans now stands 61% lower than the peak level of residential construction lending of $204 billion reached during the first quarter of 2008. The FDIC data reveal that the total decline from peak lending for home building construction loans continues to exceed that of other AD&C loans (nonresidential, land development, and multifamily). Such forms of AD&C lending are off a smaller 35% from peak lending. For the fourth quarter, these loans expanded by 3.8%. As builder and developer lending has slowed, a gap remains between the current volume of home building demand and available credit. This lending gap is being made up with other sources of capital, including equity, investments from non-FDIC insured institutions and lending from other private sources, which may in some cases offer less favorable terms for home builders than traditional AD&C loans.
One of many green offerings during the recent International Builders’ Show (IBS) was the opportunity to participate in a Green Home Tour, showcasing energy-efficient strategies, high-performance features and green construction practices being used in the desert climate of Las Vegas. “The green home tour was a great opportunity to see green solutions implemented into multiple facets of construction,” shared Dylan Burford, a recipient of the inaugural NAHB Sustainability and Green IBS Scholarship. “We were able to see green solutions for production-built homes, multifamily housing, and a 10,000-square-foot custom home. The similarities, as well as the differences between these, was something everyone should take the time to explore.” Local NAR Green Realtor Annette Bubak, who has promoted green and sustainable building in the Las Vegas area for more than two decades, set the stage for the two single -family sites, which included the following key features: The Cortona neighborhood by Lennar featured lines of homes outfitted with rooftop solar photovoltaic (PV) panels. “These panels are a standard feature, which lower the Home Energy Rating System (HERS) scores from the mid-50s to the mid-30s,” said Dennis Helblig of Sunstreet. “Our system on these homes helps them be about 65% more energy efficient than a standard new home.” Rooftop solar PV panels — as well as whole-house automation, an electric vehicle charging station and an energy storage system — were also strategies incorporated into Growth Luxury Homes’ projects in the Augusta Canyon area of Southern Highlands. “We designed these homes to meet the DOE Zero Energy Ready Program; they were built to be highly energy efficient and able to have all of the homes’ annual energy consumption offset by a renewable energy source, such as rooftop solar,” shared Steve Escalante of Growth Holdings. The tour also featured Green Leaf Lotus, a 295-unit luxury apartment complex built on an underutilized previously developed site. Josh Hanson of US-EcoLogic, Inc., who served as a green building consultant for the project, discussed the unique challenges of green building in the multifamily market and the design planning that went into this project in order to pursue certification. “One of many strategies was the incorporation of hydronic heating as part of the HVAC systems. Circulating the water lines through the HVAC system allows the water heater to provide heating in the colder months, helping make efficient use of technology, and reducing the energy use and utility costs across the apartment community,” Hanson noted. The Green Home Tour for IBS 2021 in Orlando is currently in the planning stages. Sign up when you register for the show so you don’t miss this opportunity — this year’s tour sold out. For more details about NAHB’s sustainable and green building initiatives, contact Sustainability and Green Building Program Manager Michelle Diller. To stay current on high-performance residential building, follow NAHB’s Sustainability and Green Building team on Twitter.
MANDAN PREPARES FOR RENOVATION Mandan is gearing up for a face-lift of its library and Dykshoorn Park. Construction could start as soon as this summer once design plans are finalized in the coming weeks and the city solicits bids on the project, City Administrator Jim Neubauer said. “The whole idea is to give people a reason to come downtown,” he said. The Morton Mandan Public Library is anticipating renovations to its existing building and an addition on its southeast side to add more space for staff, a meeting room, public restrooms and a garage to park the Bookmobile.
ground as part of the landscaping. The park is next to the BNSF rail yard, and the railroad used to own the land. The city rented the space until it reached a settlement with the railroad in 2004 over an underground diesel spill, at which point the city acquired the land to help it clean up the fuel, Neubauer said. He added that the upgrades, hopefully, will encourage people to spend more time at the park yearround. Dykshoorn is known in the winter for its Christmas light displays, and city officials want people to take the time to park and walk around “instead of just doing a drive-by,” Neubauer said.
the renovations, but officials might have to make some temporary changes, such as using an alternate entrance, Hawes said. A $3 million donation from Energy Transfer, the developer of the Dakota Access Pipeline, will fund some of the upgrades. Neubauer said the renovations will be done in three phases as money is available, starting with the library and the west end of the park. The total cost for all phases could be as much as $7 million, which means the city would need to find additional sources of funding.
Neubauer said one option is to use money stored in a trust stemming from the settlement with BNSF. Mandan might also use money managed by its The park also is a site for a number Visitors Committee, and the city could of events hosted by the Mandan launch a fundraising effort that seeks Progress Organization such as Buggies sponsorships for various aspects of the N Blues and the Art in the Park Festival. library and park upgrades, he added. Neubauer said the city has worked with groups that use the park to make sure The park renovations also include the redesign will allow for tents to be updates to the bandshell, including a “We have either improved on or set up and for other festivities to small playground nearby. For the east solved every problem that we have continue. end of the park, officials are eyeing a with this design,” Hawes said. pavilion, artificial turf, a “splash pad” It’s unclear exactly when area with fountains for kids and space A patio will spill out of the east end construction will begin and whether it that functions as an ice rink in winter, of the library into Dykshoorn Park. The will interfere much with this summer’s Neubauer said. The east end, however, park will undergo a number of updates, park events, Neubauer said. The city makes up the last phase of the changes the most obvious of which to visitors will work with the contractor it hires to and might not see a renovation for a will be walkways that meander through do the renovation to schedule around few years when more money is the green space, lit up at night by color- various activities. secured. changing lights attached to pieces of The library will remain open during railroad tracks sticking out of the She added that library staff members are excited about the changes, which involve reconfiguring parts of the existing building to double the size of the children’s area and moving the teen zone into a larger room, to name just a few of the ways the facility will look different after the work finishes.
MANDAN’S 2019 ECONOMIC INDICATORS GENERALLY TRENDING IN POSITIVE DIRECTION
City of Mandan management monitors several local economic indicators. The majority of statistics for the 2019 calendar year are now available.
were up with two apartment buildings permitted for 54 units each, but single family home construction was down at 73 units, compared to 114 the year prior.
Local usage taxes •
1.75% sales tax. Collections are up 6 percent compared to 2018. The City uses revenue from a 1 percent sale tax, amounting to $2.3 million to reduce property tax as well as assist with infrastructure costs, economic development and municipal debt reduction. Revenue from a 0.75 percent tax, generating nearly $1.8 million, is applied to pay off a bond issued for a voter-approved sports complex.
1% restaurant and lodging tax. Collections are up 1 percent at $489,063. Revenue is used for purchasing, equipping, improving, construction, maintenance, repair, and acquisition of buildings or property consistent with visitor attraction and promotion.
2% hotel occupancy tax. Collections are down 8 percent at $48,272. Revenue is used to promote, encourage and attract visitors to the city. The majority is allocated to the Bismarck-Mandan Convention and Visitors Bureau.
Taxable sales and purchases The total through the third quarter was $202 million. That is up 8 percent from same period for 2018. Statistics on the 2019 fourth quarter will not be available from the state tax department until later this spring. Job openings North Dakota Job Service reported 2,536 online job openings in December for Burleigh and Morton counties. That’s 343 more openings than a year prior. For the state, there were 14,899 open positions in December, an increase of 1,526 compared to a year prior. Residential building The City Building Inspection Department issued permits for 195 new residential units, up from 124 the year prior. Multi-family units
Commercial and industrial building The city issued permits for new construction, remodeling and addition projects totaling $18 million, up from 2018’s $15 million. Value of all building activity The value of all projects for which building permits were issued is nearly $47 million, up from $40 million last year. Real estate sales The Bismarck Mandan Board of Realtors reports that the average sale price of residential property in Mandan was $249,052, up from $240,147 in 2018. This is on 297 units sold, compared to 306 the year prior. The average time on the market was 78 days, similar to 75 in 2018. The statistics include single-family home, condo, twin home and duplex sales reported through the multiple listing service. The City of Mandan Assessing Department recorded 727 transactions in total for the year encompassing both commercial and residential properties, 372 of which were normal, arm’s length transactions. This compares to 604 total transactions in 2018, 295 of which were normal, arm’s length transactions. These are sales on the open market between two unrelated parties, each with reasonable knowledge of market conditions and under no undue pressure to buy or sell. Other transactions might be between family members or involving other special circumstances.
Thank you to everyone who took time away from your businesses and families to attend the 2020 International Builders Show in Las Vegas, NV. The commitment it takes form our members and staff to attend these meetings is always appreciated. It is always increasable to see the representation North Dakota has at such a large gathering of our peers. While there we attended the Area 10 Coccus, Committee Meetings and had the opportunity to explore new technology and products from around the world. As always the I'd like to thank the ND Association of Builders Staff Kim and Sara for collaborating with the other Area 10 Staff to organize the Area 10 States Reception. With nearly 400 Members, families and staff in attendance this was our largest turn out yet. It is always great to see familiar faces from around the Midwest come together. I'd like to congratulate our own Kim Schneider the NDAB CEO on being appointed to serve as the NAHB BUILD-PAC liaison. Her continued involvement at the State and National level is very important to our association. If you would like to find a way to get more involved contact your local Association and ask what you can do to be more involved or contact Kim Schneider or Sara Frank with the ND Association of Builders. With several of our committees and board being ran by volunteers there is always something that you can do. Something as small as promoting your local office and recruiting new members to becoming involved with a committee like Government Affairs or even exploring committees at a national level at the next NAHB meeting. Mark your calendars for our next NDAB Meeting March, 18th and the NDAB Summer Meeting and Event June 4th and 5th. Thank you, Nate Applegren
As we return from Las Vegas and look back at our week of warmer weather, great company, lots of steps and new information we are reminded of all the great opportunities to be involved at the national level with National Association of Home Builders (NAHB). North Dakota Association of Builder members from across the state and representing each of the six local associations traveled to Las Vegas to be a part of NAHB Board of Delegates meetings and the International Builders Show. Annually, NAHB hosts the International Builders Show (IBS) and next year will be doing so again in Orlando February 10-13, 2021. While attending NAHB Board of Delegates meeting and the International Builders Show, committees made up of Builders and Associates meet to discuss what is happening in the building industry, discuss membership numbers and how to increase them. We discuss issues across the nation, BUILDPAC fundraising opportunities and fund disbursements to candidates. We have the opportunity to recognize our peers with various National awards for the work they do and most importantly, we have an opportunity to network. You also have an opportunity to walk the miles of show room floors with new products, innovative ideas and popular design showcases. At NAHB meetings, it is always a great opportunity to reconnect with old and new friends, network, and gather new ideas and information. Another fun gathering at IBS is the North Dakota Reception. We are pleased each year to invite North Dakota attendees and our friends to a reception with great food, drinks and of course fun company. We have around 400 people stop by and we recognize the student chapter attendees for their hard work and the competition they participate in. For the past four years, NDAB has teamed up with members from the Area 10 Caucus to co-host a fun evening. This allowed us to host even more guests from our area without competing for time and gave us the opportunity to work closely in planning with our counterparts from Minnesota, Iowa, Wisconsin, and South Dakota. We thank those that stopped by this year making it another fun evening and a special thank you to the event and annual sponsors who generously help in making it a successful event! Take care, Kim Schneider
HOW TO DESIGN HOMES FOR TODAY’S AGING POPULATION At 75 million strong, baby boomers have been a compelling force within the housing market. Given the sheer size of this demographic, as well as their wealth, this generation has the ability to dictate changes in the market — and hopefully will, as they continue to age and desire different features and amenities in their homes, to promote more inclusive design elements. According to the most recent Housing America’s Older Adults report by the Harvard Joint Center for Housing Studies, those 65 and older will jump from 26% of the population to 34% percent in 2038, with the fastest-growing age group among them in the 80+ category. However, the report notes that they’re less likely to move, with only 3.6% of individuals aged 65-79 — compared to 13.6% of those under 50 — relocating in 20172018, more than half of which relocated within the same county. This indicates a desire to age in place within their existing communities. But very few homes incorporate the necessary accessibility features for them to do so; according to the latest data available, just 3.5% of all U.S. homes included features such as grab-bars or handrails in the bathroom, extra-wide hallways and doors, and a bedroom on the entry level.
So what can the home-building industry do to help increase the supply of necessary housing, not only for this demographic but future generations as well? Stephanie Firestone, MUP, with AARP shared insights with housing professionals in the Design, Remodeling and 55+ Housing Centrals at IBS to help improve the availability of accessible homes. Designs today are based on the sensory skills, size and capabilities of an able-bodied 170-pound, 5’9″ male, Firestone shared. “Everyone else has to adapt,” she added. However, by incorporating six basic principles, home builders can create more homes that account for a greater variety of functionality and amenities needed for older adults as well as their families.
•Optimal balance: “Housing and
communities should fit people’s varying functional levels, providing an optimal balance between effort and support,” Firestone noted, to adapt for a range of people. Examples include no-step entries, pocket doors and grab bars.
•Expectations: “People have very few
choices and settle for what’s available,” Firestone observed. In addition to introducing more innovative designs, housing professionals also need to educate — both consumers and themselves — on what options are available to help raise consumer expectations.
•Finance: “New financial models are needed that view lifelong living
environments as an asset,” Firestone said.
•Planning: Municipal planning needs to
take residents’ needs and abilities into account, Firestone shared, including social cohesion to ensure older residents are able to actively participate. Examples include places in which residents can work, live and play — an amenity desired by baby boomers and millennials alike — and ensuring there are medical facilities nearby. Collaboration: “Cross-sector collaboration is critical to integrating the concept of optimal balance across a lifespan,” Firestone noted. It’s also an opportunity to retrofit and see what existing components already exist within a community to help address health and wellness for residents.
•Multigenerational: In addition to social
cohesion in the planning process to ensure multigenerational interaction, there also needs to be a concerted effort to combat ageism, Firestone noted, including “using positive language regarding all ages.” One way in which multigenerational living is already coming into play in tight housing markets is college students renting rooms from older adults, which allows them to spend more time together.
College towns are becoming increasingly attractive destinations for boomer buyers for similar reasons, including conveniences such as shopping, entertainment and education opportunities, and unique amenities such as lectures, concerts and college sporting events. Interested in learning more about building for consumers aged 55 or older? Check out resources from AARP and NAHB’s 55+ Housing Industry Council.
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FINAL NLRB JOINT EMPLOYER RULE IS A WIN FOR SMALL BUSINESSES In an important win for NAHB members and the small business community, the National Labor Relations Board (NLRB) released a final rule that clarifies the standard for determining whether two employers are joint employers of a group of workers under the National Labor Relations Act. This resolves the NLRB’s controversial 2015 decision in the case of Browning-Ferris Industries that radically expanded the traditional test for establishing joint employment. Today’s final rule specifies that an employer may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, which are exclusively defined as wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.
relationship. Such control is not “substantial” if it is only exercised on a sporadic, isolated, or de minimis basis. Indirect influence and contractual reservations of authority are no longer sufficient to establish a joint-employer relationship. NAHB views this NLRB ruling as a positive development because it provides home building firms and small businesses clarity and certainty regarding the joint employer rule by restoring the traditional definition of joint employment in which a company must exercise “direct and immediate control” over a worker in a business-to-business relationship.
In announcing the final rule, NLRB Chairman John Ring said: “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees Importantly, the final rule will have a better understanding of retains the requirement that direct their employment circumstances, and immediate control over and unions will have clarity essential terms and conditions of regarding with whom they have a employment be “substantial” to collective-bargaining relationship.” give rise to joint-employer status. For more information, Control is substantial if it contact David Jaffe at 800-368meaningfully affects matters 5242 x8317. relating to the employment
CORONAVIRUS OUTBREAK: WHAT BUSINESSES NEED TO KNOW NAHB is closely monitoring the spread of COVID-19 (aka Coronavirus Disease 2019) to stay ahead of this rapidly evolving situation and keep members appropriately informed. On Feb. 28, the World Health Organization (WHO) upgraded the global risk from the new coronavirus to “very high.” NAHB will provide additional analysis of how this global health crisis could impact housing as more information becomes available. In the meantime, here is a brief economic analysis as well as resources to help businesses prepare their workplace. NAHB Chief Economist Robert Dietz provides a brief analysis on the economic impact of the virus: “Markets dislike uncertainty, and uncertainty regarding the coronavirus is clearly reflected in recent stock market declines and reduced interest rates. In fact, the 10-year Treasury rate is below 1.2%, effectively at an all-time low. This means low mortgage rates and lower rates for builder and developer borrowing. Moreover, the Federal Reserve will be under pressure to apply some monetary policy stimulus soon. “Taking a step back, financial conditions and underlying economic data remain positive for housing. In fact, home building led with positive news at the start of 2020 in terms of home construction and new home sales. “NAHB will continue to monitor consumer confidence data to accurately gauge the economic impact on housing demand.”
NAHB PODCAST: ENERGY CODE MANDATES BAD FOR BUSINESS In the latest episode of the NAHB podcast Housing Developments, NAHB CEO Jerry Howard and Chief Lobbyist Jim Tobin discuss the implications of a comprehensive energy bill with American Gas Association Vice President, Governmental Affairs & Public Policy, George Lowe. This legislation could include a bill from Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) with energy code provisions that would greatly exacerbate the housing affordability crisis.
TAKE ACTION TO PREVENT THE FEDERAL GOVERNMENT FROM HIJACKING BUILDING CODES Senate Energy and Natural Resources Chairwoman Lisa Murkowski (RAlaska) and Ranking Member Joe Manchin (D-W.Va.) this week introduced a comprehensive energy bill, the American Energy Innovation Act of 2020. However, there are efforts underway to incorporate costly energy building code provisions from S. 2137, The Energy Savings and Industrial Competitiveness Act, as an amendment to this bill. This amendment would expand the role of the Department of Energy in the code development process by requiring it to establish energy-savings targets, which denies the code consensus bodies freedom in decision-making. This represents an unprecedented power grab by the federal government in the building code development arena. These aggressive energy efficiency requirements would also drive up the cost of housing without proportional savings in energy costs. This comes at a time when housing affordability is near a 10-year low and just six in 10 households can afford a median-priced home. Congress must consider the true economic costs of energy-use reductions and establish a practical payback period for these investments. Otherwise, fewer families will achieve the dream of owning a home of their own.
Howard and Tobin also talk about the state of the presidential election and the housing plans put out by the 2020 Democratic candidates. Listen to the episode below, or wherever you find podcasts. A list of the podcast outlets with official Housing Developments feeds can be found at nahb.org/podcast.
Please call or write your U.S. senators and urge them to oppose energy building codes in the comprehensive energy bill. Click on the box below to send a letter to your senators today.
HOUSE PASSES ANTI-BUSINESS LABOR BILL ; MEASURE LIKELY TO DIE IN THE SENATE The House on Thursday passed legislation strongly opposed by NAHB that contains dozens of sweeping labor law revisions that would negatively affect the construction labor market at a time of critical skilled worker shortages. H.R. 2474, the Protecting the Right to Organize (PRO) Act, would expand employers’ liability for the labor practices of subcontractors and third-party vendors and narrow the circumstances under which an individual can work as an independent contractor — effectively gutting the contracting business model that serves as the foundation of the residential construction sector. Prior to the House vote, NAHB sent a letter to the full House designating a vote in opposition to H.R. 2474 as a “key vote” because of its importance to the housing industry. This organized labor “wish list” bill resurrects bad policies that have previously been rejected by Congress and courts alike, including: •
Eliminating right-to-work protections nationwide;
Stripping employer and employee free choice and privacy in union elections; and
Curbing opportunities for independent work and subcontracting.
NAHB’s letter opposing the bill said that the “nation is currently facing a housing affordability crisis, which will only get worse if Congress promulgates misguided policies that force the labor market to contract and inflate the costs of home construction.” The PRO Act was approved on a largely party line vote of 224 to 194, with just five Republicans joining Democrats in support of the measure. The legislation is expected to die in the Republican-controlled Senate as the chamber is unlikely to consider the bill.
LUMBER DUTIES COULD BE CUT BY MORE THAN 50% IN AUGUST With lumber prices rising steadily since June 2019, a preliminary decision by the U.S. Department of Commerce to reduce duties by August on shipments of Canadian lumber into the United States is good news for home builders and home buyers. The decision comes on the heels of the September NAFTA panel decision that found the U.S. International Trade Commission did not meet its obligations under U.S. law when it calculated countervailing and antidumping duties on Canadian softwood lumber. NAHB participated as an amicus in support of Canada’s challenge of the duties. Currently, duties average more than 20% on Canadian lumber shipments into the United States. After conducting an administrative review, the Department of Commerce has issued a proposal in the Federal Register that could lower the countervailing and antidumping duties to just over 8%. A final determination will be made in August. This latest development on the tariff front comes at a particularly opportune time, with the Random Lengths Framing Composite Price hitting $388 per thousand board feet on Jan. 31, the highest level since October 2018 and up more than 20% since last May. Lower tariffs would mitigate uncertainty and associated volatility that has plagued the marketplace, which could help ease upward price pressure on lumber prices. A recovering housing market is helping to fuel the increase in lumber prices. U.S. housing production in December hit 1.6 million units on a seasonally adjusted annual basis, the highest level since December 2006.
LABOR SHORTAGES REMAIN TOP CONCERN FOR BUILDERS The cost and availability of labor continues to stand out Meanwhile, building material prices was reported as a as the most significant challenge that builders will face in significant problem by 33% of builders in 2011. In the 2020, according to a recent survey of members that ran in ensuing years, builder concerns regarding this issue ranged the monthly NAHB/Wells Fargo Housing Market Index (HMI). from 42% in 2015 to a peak of 87% in 2018. More than four out of five builders – 85% – expect to Rounding face serious challenges regarding the cost and availability of out the top labor this year, down slightly from the 87% who rated this five concerns issue as their top concern in 2019. for builders in 2020 are Building material prices and the cost and availability of impact/hooklots were tied as the No. 2 problem expect to face in 2020, up/inspection with these issues cited by 66% of the survey respondents. or other fees All three of these supply-side issues have been a growing (60%) and concern for builders over the past several years. To put it gridlock/ into perspective, in 2011, just 13% of builders cited labor uncertainty in issues as an important concern, with the rate steadily rising Washington over the ensuing years before peaking at 87% last year. making buyers more Likewise, the cost and availability of lots were reported cautious (56%). as a significant problem by 21% of builders in 2011, and the percentage steadily increased over the following years, NAHB economist Ashok Chaluvadi provides more reaching a high of 66% in 2020. analysis on the labor shortages and the rest of the top 10 list in this Eye on Housing blog post.
TRUMP PROPOSES $47.9 BILLION BUDGET FOR HUD IN FISCAL 2021 President Trump announced today that the U.S. Department of Housing and Urban Development (HUD) would receive $47.9 billion in funding for the fiscal 2021 budget, which runs from Oct. 1, 2020 through Sept. 30, 2021. This is a 15.2% decrease, or $8.6 billion cut, from the amount enacted for 2020. It’s important to note that no White House budget is ever approved “as is” by the Congress. The annual appropriations process determines the levels of federal spending for each of the federal departments and agencies, and all programs within their respective jurisdictions. While the president’s budget recommends spending levels for the next fiscal year, it is not legally binding. Congressional appropriators will have the final say in program realignment
and spending levels. Of note to the housing community, the White House budget for fiscal 2021 proposes budget recommendations that would: HUD
• Provide $18.83 billion for Section 8
Tenant Based Rental Assistance, a $5.04 billion drop from the fiscal 2020 appropriations approved by Congress. However, $5.18 billion has been moved to a new Moving to Work demonstration program. The program is for public housing authorities (PHAs) and provides them the opportunity to design and test innovative, locally designed strategies that use federal dollars more efficiently, help residents find employment and become selfsufficient, and increase housing choices for low-income families.
• Increase Project-Based Section 8 to $12.64 billion from $12.57 billion.
• Eliminate the CDBG, HOME and Choice Neighborhoods programs.
Department of Agriculture
• Provide $24 billion for the Section 502
Guaranteed program, the same level as the last fiscal year.
• Propose $250 million for Section 538 Guaranteed Loans for multifamily housing, an increase of $20 million from the fiscal 2020 level.
• Eliminate the Section 502 Single-Family
Housing Direct Loan program, the Section 515 Multifamily Housing Direct Loan program and the Multifamily Housing Preservation and Revitalization program.
• Increase the Section 521 Rental
Assistance program to $1.4 billion from $1.375 billion by also folding in funding from vouchers.
For more information, contact Jessica Hall at 800-368-5242 x8253.
2600 Gateway Ave, Ste 1 Bismarck, ND 58503
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