September 2019 Building Buzz by Bismarck-Mandan Home Builders Association

BISMARCK-MANDAN HOME BUILDERS ASSOCIATION SEPTEMBER 2019 || 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. PRESIDENT Northern Plains Plumbing, Heating & Air 701-222-2155 greg@northernplains.net

Sattler Homes 701-255-7628 jeff@bismarckbuilder.com VICE PRESIDENT

www.twitter.com/bmhba www.houzz.com/pro/bmhba

Choice Bank 701-258-3300 s.franklin@bankwithchoice.com

Verity Homes of Bismarck 701-663-4117 rory@verityhomes.com

K & L Homes 701-258-4584 cmoldenhauer@midconetwork.com

2ND VICE PRESIDENT Aspire Homes 701-426-8583 greg@daretoaspire.com

Townsquare Media 701-250-6602 bill.schmid@townsquaremedia.com

TREASURER

MEMBER-TO-MEMBER RELATIONSHIPS KEY

MANDAN APPROVES PRELIMINARY BUDGET

6 LESSONS LEARNED FROM A REHAB

Boulder Homes 701-400-5554 boulderhomesnd@gmail.com

Stoneshire Builders 701-471-6935 brian@stoneshirebuilders.com

PAST PRESIDENT

FED RATE CUT GOOD FOR HOUSING

Gate City Bank 701-355-7633 lynnklein@gatecity.bank

BNC National Bank 701-250-3050 mmenge@bncbank.com

Triton Homes 701-223-3030 jamie.schmidt@investcore.com

Dot Frank

Simone Marchus

Elysha Head

TRUMP SPOTLIGHTS WORKFORCE DEVELOPMENT

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 September 30th, 2019.

Jamie Sorenson

Kyle Morey

Jerry Eggert

Kassy Landis

Amy Asche

Christine Rivinius

Lee Mitzel

Tammy Fransen

Judy Maslowski

Jason Kerner

Kelly Royball

Mitch Kaelberer

Bob Kupper

Ken Knodel

Ryan Hiatt

Terry Walch

Lindsey Matter

Steve Gerhardt

David Jensen

Jeff Kilber

Jon Rick

Ken Knodel

Chad Schumacher

Mike Bohrer

Sam Foss

Aaron Lunde

Brittany Stuhlmiller

Bob Lussenden

2019 Hello BMHBA Members, September has arrived, schools is back in session and fall is on the way. Our home builder members have been hard at work this summer with custom homes and getting parade homes completed. This year we have 30 homes entered in the Fall Parade of Homes. The Parade of Homes is Thursday through Sunday, Sept. 26-29. Thank you to all of the builder members who have entered a home this year and in the past. Please pay attention to messages from the office and within your Parade of Homes bags. Particularly,

• Thursday and Friday times are an hour early (homes will be open from 5-8 p.m.). • We are testing out e-tickets this year. Check-in on paper tickets is no longer required. • All the tickets will be pink and $1 from each ticket sale will go to Bismarck Cancer Center. Some other changes this year are no price categories or awards and homes will be numbered by location. The Government Affairs Committee and staff have been following along with the city budgeting process, including fee changes and impacts. For the most part department budgets

Regards,

2019 PRESIDENT :: BMHBA

remain flat and fees are increasing slightly. After reviewing the preliminary budgets for Bismarck and Mandan, the association doesn’t plan to request any modifications. The association’s quarterly meeting with the City of Bismarck is Sept. 16. Please reach out to our EO Dot in advance of the meeting with any comments or concerns you want shared. Home Show registration has already started, and spots are starting to fill. Early bookers get the best booths. Promote your company and support the efforts of the association by participating in this anticipated event. New to the 2020 Home Show is the addition of a central park and beer garden. The Bismarck Building Department is hosting a framing inspection meeting on Thursday, Oct. 10. I encourage every contractor and framing subcontractor to attend this meeting so you and your subs can get any questions answered that you may be facing in the field. Everybody should consider a seat on the BMHBA Board or think of somebody to nominate for a board position. If you have any question on running for the board, just contact the office and they can help answer any questions. To nominate someone to serve on our board of directors, visit https:// www.surveymonkey.com/r/2020Board.

MONTH

YEAR

2015 2016 2017 2018 2019 0

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER

2018 2019

2015 2016

2017

2018

2019

2015 2016 2017 2018 2019

132

123

114

116

-5% 17% -53% 16%

-33%

-6%

-4% -6% -37% -36%

-40% -44%

297 286 270 169

108

YTD TOTAL

178

108

Total

2015 2016 2017

TOTAL

YTD Total

2019

169

197

Data not collected for the ETA in 2015 and 2016.

JANUARY

2015 2016 2017 2018

-20% -27% 46% -43%

-58% -20% -25%

-7%

-40% -8%

-7%

-66%

-24% -64%

-14% -41% 33% 18% -4% -36% 20% -23%

MANDAN SINGLE FAMILY DWELLING DIVERSITY HOMES

4201 BAYSHORE BEND S

ALMONT SINGLE FAMILY DWELLING

LINCOLN SINGLE FAMILY DWELLING

VERITY HOMES

3816 24TH ST SE

VERITY HOMES

3515 AMITY CIRCLE

BISMARCK SINGLE FAMILY DWELLING

BURLEIGH CTY SINGLE FAMILY DWELLING

VERITY HOMES

3821 AMITY CIRCLE

VERITY HOMES

4601 CORVETTE ST NW

VERITY HOMES

4603 CORVETTE ST NW

VERITY HOMES

4605 CORVETTE ST NW

VERITY HOMES

4607 CORVETTE ST NW

APEX BUILDERS

1629 PLAINS BEND SE

VERITY HOMES

4705 CORVETTE ST NW

VERITY HOMES

4707 CORVETTE ST NW

PRESTIGE HOMES

2501 34TH AVE SE

D. & B. SCHAUER

3577 25TH AVE

EPIC HOMES

3002 HWY 1806 N

KLUSMANN CONST

5281 CO RD 86

RUSCH HOMES

6912 MAJESTIC PL

SATTLER HOMES

427 LIVE OAK LN

DAN TELEHEY

2803 HOGAN DR

MARK FLECK CONST.

14306 TRAIL BOSS WY

C.G. ENTERPRISES, INC.

KEVIN FISCHER CONST

11443 APPLE VIEW LA

552 NELSON DR

C.G. ENTERPRISES, INC.

512 APPLE RIDGE RD

KEVIN FISCHER CONST

550 NELSON DR

REDFORD SIGNATURE

12119 COUNTRY MEADOWS DR

MILESTONE BUILDERS

306 WATERCRESS AVE

JOE VETTER CONSTRUCTION

7750 STAR LA

KNUTSON HOMES

2404 LANGER WAY

MATTHEW ADAMS

6401 DAKOTA COUNTRY DR

JE PROPERTIES

14897 PARKER RANCH RD

GRENDAHL DESIGN CO

8506 ROLLING HILLS RD.

D. & B. SCHAUER

3577 25TH AVE

EPIC HOMES

3002 HWY 1806 N

KLUSMANN CONST

5281 CO RD 86

BISMARCK ROW HOUSE BRIAN FULLER

219 E D AVE

BRIAN FULLER

217 E D AVE

BRIAN FULLER

215 E D AVE

BRIAN FULLER

221 E D AVE

MORTON COUNTY SINGLE FAMILY DWELLING

PLACE YOUR AD HERE FOR PREMIUM EXPOSURE.

JUST $21 PER ISSUE.

EMAIL INFO@BMHBA.COM.

Mandan is holding its Seventh Annual Business Start-Up 101 Workshop on Tuesday, Sept. 10. The workshop will provide inspiration and information for people thinking about opening a store, hanging out their own shingle, or otherwise owning and operating their own enterprise. The workshop is for anyone exploring the idea of opening a business. The audience will drive the discussion with members of two panels, one consisting of resource partners who help with business planning and financing, and another made up of entrepreneurs experienced in starting and growing various types of businesses in Mandan. Attendees will connect with representatives of the Center for Technology and Business, Small Business Development Center, SCORE, Lewis and Clark Development Group, Dakota Business Lending, and Annie Capital plus others who can assist throughout their planning and financing processes. The discussion with entrepreneurs includes Mandan business owners Melanie Lennie, Beyond the Blooms; Jim Mellon of Midway Lanes; Allan Miller, Any Leaks and Old Ten Bar & Grill; and Josette Severson, Prairie Patriot Firearms Training. The free session runs from 6 to 9 p.m. at Harvest Events and Catering, 308 W Main Street. For program details and to register, visit www.cityofmandan.com/ register or call 667-3478.

For the 15th year in a row, Bismarck Public Schools has seen an increase in student enrollment. The district has 13,312 students in grades K-12 for a gain of 273 students. Last year’s first day enrollment was 13,039 for a gain in 2018-19 of 178 students over the previous year.

through 8th grade students at 1,117. Wachter increased by 139 students because a larger 8th grade class moved on and a larger 6th grade class moved in. Wachter grew by 139 students for a first day total today of 1,081. Simle’s enrollment stands at 1,048.

In grades K-5, enrollment has increased by 40 students across the 16 elementary schools for a total K-5 student population of 6,135. Elementary schools with the highest enrollment are Sunrise and Lincoln (653 each), Liberty (621) and Murphy (593). Those with the lowest enrollments are Roosevelt (121), Prairie Rose (143) and Will -Moore (222). The elementary schools that are over their targeted capacity are Highland Acres, Lincoln, and Sunrise. Others that are near capacity are Centennial, Grimsrud, Liberty, Murphy and Northridge. Each elementary level has more than 1,000 students except 4th grade at 997.

Senior high enrollment is up 72 students for a total of 3,931 over a year ago. Legacy has 1,314 students followed by Century at 1,311 and Bismarck High at 1,194. South Central, the district’s alternative high school, has a current enrollment of 112. Superintendent of Schools Dr. Jason Hornbacher says, “With a secondary school enrollment increase of 233 students this year, it was with good foresight that the previous administration and School Board expanded and remodeled all three middle schools as well as the projects that continue at Bismarck High and Century.”

BPS will have more firm enrollment Middle school enrollment grew the most. numbers when it certifies enrollment to the The three middle schools have 3,246 state, which is 10 days after the start of students for an increase of 161 over last school. year at this time. Horizon has the most 6th

Reprinted from the Chamber EDC Community Partnership Newsletter

The 2019 second quarter Cost of Living Index (COLI) was released in August. The COLI is put together by the Center for Regional Economic Competitiveness and is an analysis of average prices submitted by 270 urban areas across the United States. The COLI compares all 270 submitted urban areas with a score of 100 being average. The information collected is also used to populate the Cost of Living Calculator on the Chamber EDC website – bismarckmandan.com. The calculator determines what salary someone would need to earn in Bismarck-Mandan to compare to what that person is earning in any of the other 269 urban areas.

The City of Bismarck Community Development Department will be preparing a comprehensive update to the City’s off-street parking and loading ordinance over the next several months. The focus of the update will be to modify off-street parking and loading requirements and prepare for differing mobility demands in the future. Parking requirements have direct and indirect influence on development of communities ranging from the provision of affordable housing to reductions in storm water runoff impacts. The first off-street parking and loading requirements for the community appeared in the 1953 Zoning Ordinance for the City of Bismarck. Since that time periodic changes have occurred to keep pace with demand. The 1986 City of Bismarck Zoning Ordinance was the last comprehensive evaluation of parking requirements for the community, however since that time a variety of amendments have been made including most recently in 2015, 2016, and 2017. These modifications reduced parking requirements for certain uses, clarified how parking is calculated, and allowed some flexibility for the Zoning Administrator to determine required parking for certain uses. However, even with these changes staff continues to observe a continued increase of Board of Adjustment requests to vary from off-street parking and loading requirements. City of Bismarck staff will be partnering with elected leaders and industry stakeholders to help craft the zoning text amendment changes. Once a final draft is prepared by staff, it will be presented to the Bismarck Planning and Zoning Commission in a public hearing. If the Planning and Zoning Commission opts to recommend approval, the draft ordinance will be submitted to the Board of City Commission for their final review and potential adoption.

Last fall, nearly 5,500 new members joined NAHB. But retaining those members is just as important as finding additional members. “When you look at our most engaged members, it’s all people who have been asked to step up and who have been involved personally,” NAHB Chairman Greg Ugalde said during a recent Third Tuesday Townhall webinar. “This year, NAHB is focused on growth with an even stronger focus on retention, and that is done by establishing and cultivating the relationships we have.” During the webinar, Membership Committee Chair Helmut Mundt further illustrated how the connection between an established member and a newly minted one is crucial. “When you invest time in someone, especially someone you don’t know well, they are going to take interest in you. It’s about accelerating the engagement of that new member,” Mundt said. There are multiple ways to get engaged with other members in the Bismarck-Mandan Home Builders Association. Make sure to keep an eye on your email for invites to educational lunch events, sign up to participate in our Spring and Fall Membership Mixers, get a booth in the Home Show or serve on a committee.Contact the association office at info@bmhba.com or 222-2400 to more ways to make the most out of your membership.

TedX Bismarck hosted its 5th annual event on Aug. 15 at the North Dakota Heritage Center & State Museum. The all-day event features 9 unique speakers who cover a variety of inspiring and relevant topics. The first speaker was Megan Laudenschlager. Laudenschlager is the founder and executive director of Strengthen ND; a nonprofit that focuses on revitalizing rural areas in North Dakota. Strengthen ND has been successful in their vision. In 2017, the non-profit restored a dilapidated building in Tuttle, and converted it into a community center. Strengthen ND also has a project called Building Resilient Farm Country. The project is devoted to repairing deteriorated farm country, as well as mentoring and teaching aspiring farmers. To learn more about Strengthen ND, visit their website at StrengthenND.com

The Bismarck School Board last month approved a preliminary budget for 2019-20 that includes a smaller than expected mill levy increase. The budget ended better than projected with revenue over expenses of about $400,000. The proposed 3.29 mill increase will cost the owner of a $200,000 home $2.47 per month or $4.94 on a $400,000 home. Business and Operations Manager Darin Scherr says the increase will help fund about 28 positions to reduce class size, an increase in salary and benefits for staff, and two additional bus routes. Superintendent Jason Hornbacher says the Bismarck community has a rich history of supporting BPS and he is thankful for this continued support. He stated that Bismarck Schools will continue to work toward smaller class sizes, improving safety for all, and enhancing building needs. He also noted that the new budget has an 8.1% ending fund balance and he’ll work towards getting to the board policy of 10%. The Board also began discussions about the need for elementary school space, portables, and/or boundary changes in some areas of the city experiencing declining enrollment or increased student populations due to new home construction. Half of the elementary schools are near, at or over capacity, including Grimsrud, Highland Acres, Liberty, Lincoln, Murphy, Pioneer, Solheim and Sunrise. Schools with declining populations are Miller, Myhre, Prairie Rose, Roosevelt and Will-Moore. Part of the district’s Strategic Planning Process this year includes a long-range Facilities Plan.

Beyond Shelter Inc. (BSI) recently marked the completion of their second phase of HomeField Apartments in Fargo. The nonprofit continues to see strong demand for the affordable senior housing it has developed in the community. HomeField 2 is the fifth such project completed over the last six years. “Providing affordable senior housing is about more than a roof overhead,” said Dan Madler, BSI’s CEO. “We are providing a home where our aging community members live safely with opportunities for social interaction and personal care services that keep them healthier.”

expects HomeField 2 to be fully rented by September. North Dakota Housing Finance Agency (NDHFA) allocated $640,984 in federal Low -Income Housing Tax Credits to the project. Through syndication by Wells Fargo Affordable Housing CDC, the credits brought $5.77 million in equity to HomeField 2.

“When you combine affordable housing with supportive services, you allow seniors to comfortably age-inplace,” said NDHFA Housing Development Officer William Hourigan. “We appreciate the good work Beyond Shelter has done, and we are also Tenancy at HomeField 2 is appreciative of our project restricted to income-qualified partners who recognized that households age 55 and older with seniors living independently is a rents ranging from $422 to $760. good investment in their health Of HomeField 2’s 39 apartments, and well-being.” 33 are one-bedroom with most of The City of Fargo committed the apartments occupied by $200,000 in HOME funds to the single individuals. To rent a oneproject, approved a Payment in bedroom for $422, an individual’s Lieu of Taxes valued at $667,928, annual income must be $17,670 and waived the building permit or less per year. fees. The City considers Resident-led activities, affordable senior housing to be a congregate or home-delivered critical need for the community, meals, and supportive services especially housing for extremely including transportation, case low-income seniors. management, homemaker and Support was also provided by personal care are all available to North Dakota Department of the property’s tenants. Commerce Division of MetroPlains Management, Community Services which HomeField’s property manager, committed $453,000 in HOME reports that 21 of the new funding. tenants signed a lease without If funding can be secured, BSI ever entering the building. With hopes to add a third building at the occupancy rate at similar the site within the next two properties that it manages years. currently at 98 percent, many with waiting lists, MetroPlains

The Mandan City Commission preliminarily approved a 2020 budget proposal during its Aug. 6 meeting. The proposed budget would increase the city levy by one mill to 63. The average property valuation increase was nearly 1% for the typical house in Mandan in 2019. This slight increase, coupled with the mill levy bump, equates to $20 for the year. This excludes any special assessments on the property. Mandan residents also will see a $1.75 monthly increase for utility base charges, totaling $21 for the year. A portion of that increase, $1.55 per month, is for the city’s contribution towards a new raw water intake. The intake project will be costshared with the State Water Commission and Marathon Mandan Refinery. The remaining $0.20 is for contractual increases with Armstrong Sanitation and Waste Management for residential garbage and recycling collection services. The City’s budget, as recommended by the budget and finance committee, totals $32.2 million. The contribution from property tax revenue is $4.9 million with

the remainder covered through user fees, sales tax revenue, and funds received from other sources such as federal and state contributions. The draft budget includes a 2% increase to employee salaries. It includes two new hires: a full-time police officer/detective and a full-time mechanic for the street department. Major infrastructure projects in the preliminary budget include:

• Street and underground utility improvements east of Collins Avenue to Fourth Avenue NE from Main Street to Fifth Street NE.

The Morton County treasurer, in accordance with new state law, will mail letters to all property owners by Aug. 31, notifying them of proposed changes in property taxes and public hearing dates for all taxing entities. In the past, the hearing notice was only required for property owners with an increase in value of 10% or $3,000. The letters will notify the owner of their estimated property tax based on the preliminary 2020 budget. It will also include notice of the City Commission’s public hearing on the budget scheduled for Sept. 17 at 6 p.m., prior to final consideration. The hearing will take place at Mandan City Hall, 205 Second Avenue NW.

• A street improvement project north of

City services only a portion of local Old Red Trail including 34th Street property tax bill and account for about 24% NW, 30th Avenue NW, Crimson Street of the total mill levy for Mandan property NW and Lewis Road; owners. The School District, Morton County • Improved drainage at the intersection and Park District services account for the remainder. of Sunset Drive and Boundary Road; and

• Emergency generators at the 40th Avenue SE lift station and Sunset booster station.

For more information about the 2020 city budget, contact the Finance Department, phone 667-3213. The full budget document will be posted at www.cityofmandan.com/finance.

LOWE'S DISCOUNT FOR NAHB MEMBERS Visit www.LowesForPros.com/NAHB and register to save 5% every day when using Lowe's credit, plus for NAHB members, Lowe's Account Receivable (LAR) and Lowe's Business Account (LBA) are both eligible to receive the additional 2% statement discount through 12/31/2019. And NAHB Members receive free delivery on purchases of $500 or more. Go to LoweForPros.com/NAHB or call 877-435-2440 for details. Some restrictions may apply. See store for details.

A map providing property cards showing assessment information for most parcels is now available at www.cityofmandan.com/maps. The property assessment information is as of April 2019. Users can search for property cards by address or parcel number in the search field provided. Currently special assessment balances are not included on these cards. Contact the City Assessor’s office at 667-3232 for questions or more information.

· Time for a little recognition. September is Associate Member Appreciation Month.

put forward by the state office to National Association of Home Builders. These nominations are then added to the pool for the NAHB BOTY, BEAM and Associate of the Year which is then announced at the International Builders Show the following year. This year NDAB will be collecting nominations in September so be sure to put forward those members that go that extra mile.

Finally, volunteering and partnerships. As you As you are wrapping up notice rising stars in our projects this season make Association find the time to sure and thank those pass along your knowledge members that have helped of the State and Local you archive your goals and HBA's and the importance deadlines. There are many of getting involved at a ways to recognize other some level. Many new outstanding members. Builder, Associate and Contact your local Affiliate Members are very association and let them focused on growing their know when a member has business and overlook the gone above and beyond. great opportunities for networking that are Another way is through available through nominations. Every year volunteering on a board, your local HBA’s have the committee or at an event. opportunity to put forward Everyone is busy but if you nominations for the Builder see a new member that is of the Year, Builders really making some huge Engaging Associate gains this is the perfect Members Award and time to get them involved NDAB Associate of the at some level. Taking this Year Award. These time to talk with new or members are then voted on existing members peer to by their peers and the peer is a great way to help winners are announced in your association with November at the North retention and keep your Dakota Association of director and committee Builders Annual Meeting seats full. and Awards Banquet. Not only do they get that Local Until next time, and State recognition but they also get their name Bob Horab

As we say goodbye to summer and hello to fall, it is also time to look forward to 2020 and the various positions · at your local, state and national levels. Because an association can only be as effective as the members who serve, taking an active role, and volunteering on various committees is vitally important to the health and longevity of the association. Often, committee and council members set the stage for the policy agenda and other association objectives established and executed by the Board of Directors. These positions also allow you to become more engaged and active with your association, provides networking opportunities along with personal and professional growth. On the local level, meet with your peers and nominations for the Builder of the Year, Builders Engaging Associate Members Award and NDAB Associate of the Year Award. These members are then voted on by their peers and the winners are announced in November at the North Dakota Association of Builders Annual Meeting and Awards Banquet. Not only do they get that Local and State recognition but they also get their name put forward by the state office to National Association of Home Builders. These nominations are then added to the pool for the NAHB BOTY, BEAM and Associate of the Year which is then announced at the International Builders Show the following year. This year NDAB will be collecting nominations in September so be sure to put forward those Executive Officer to discuss the Board of Directors, PAC, or various committees that might have an opening for a new volunteer. At the state level, we have positions on our Board of Directors where you will represent your

local association along with members from the remaining 5 locals. We have ladder positions if you are interested in stepping into a leadership role, including being State President. NDAB-PAC Trustees play an important role with fundraising for ND candidates that are vital in making rules and laws that impact our industry. Advocacy is one of the main pieces of our mission and being a part of the Government Affairs committee helps to be a voice with elected officials at the local, state and national levels. Education for our members and education to the youth about our industry is a key part of being active with the education committee. Any amount of time you can contribute is valued and appreciated as your voice matters at all levels. We have many members who have been active with the state at various levels for many years. If you have any further questions, please let me know and I can talk it through with you or connect you with a builder or associate member to share their personal experiences. In the upcoming months, both NAHB and NDAB will be hosting meetings and events and we invite you to join us! October 22-24 in New Orleans will be NAHB’s Fall Leadership Meeting. November 21-22 in Grand Forks will be NDAB’s Annual Banquet and Board Meeting. January 2123 is NAHB’s International Builders’ Show. Registration and Hotel information is open for NAHB’s meetings and the room block is now available at the Ramada Inn in Grand Forks along with sponsorship opportunities for NDAB’s banquet where we will be celebrating 2019 and State President Bob Hoard and toasting in a new year and 2020 State President Nate Applegren. Please let us know if you have any further questions about any of the events or how to get more involved at the state or national levels. To all those that serve at the local, state and national levels, please know that all of us at NDAB are very grateful for your continued dedication and support. Take care, Kim Schneider

One-, two- and three-bedroom apartments vary in size from 650 to 2,500 square feet. Rents range from a low of $563 a month for working artist apartments to $3,000 or more for two-level suites at market rates. Photo courtesy of Dominium.

Six Lessons Learned}

from a Historic St. Louis Rehab Project

Complying with the Secretary of the Interior’s standards for historic preservation was essential to earn the historic preservation tax credits and comply with the conditions set forth in LCRA’s sale of the property. Dominium negotiated with the Department of Interior to move some of the historic hallways, as long as the design kept the arcade and restored the key features, such as marble floors, 100-yearold woodwork and plate glass windows, in other historic corridors. This swap worked out well and created square footage for additional leasable space.

The Arcade Apartments development is finished product of a historic rehabilitation of a 500,000-square-foot architectural landmark in downtown St. Louis. The mixed-use, mixed-income property features 202 affordable artist lofts, 80 market-rate apartments, 130 underground parking spaces, and 54,000 square feet of commercial/office space leased to a local university. The landmark is a Gothic Revival style that was originally home to a two-story shopping arcade replicating the style of early Italian gallerias and was the largest concrete structure in the world when it was built in the early 20th century. The property is actually two buildings: the 18-story Wright Building, constructed two years after the St. Louis World’s Fair in 1906, and the Arcade Building, built in 1919 to wrap around the existing building. The Wright-Arcade Building closed in 1978 and remained vacant for nearly 35 years. Despite its designation as a city landmark in 1980, a series of proposals to redevelop the building stalled. In 2009, the city’s Land Clearance for Redevelopment Authority (LCRA) declared the property blighted and authorized a 10-year tax abatement to incentivize the restoration of the building.

Except for the preservation of historical elements, such as this grand staircase, the rest of the construction was a gut rehabilitation. Photo courtesy of Dominium.

Address challenges with creativity. The original roofline has 12 levels, posing additional complications in designing the apartment units. Whenever possible, the roof levels became exterior decks for the apartments overlooking the interior courtyard. This turned out to be a popular and enviable amenity, because downtown urban living does not often provide for much personal outdoor space.

Look for flexibility on parking. Parking can often be an issue in an historic rehabilitation project. The tall, 14-foot basement ceiling allowed for the installation of an extra floor between the Arcade building’s basement and sub-basement, for a total of 129 spaces in three levels of underground parking. Dominium also worked closely with the city and treasurer’s office to lease an additional 225 off-site spaces for residents at a nearby parking garage.

Bring value to the available market. The city of St. Louis is not the strongest market, and it took longer to bounce back from the recession. Dominium found creative ways to pay for the cost of restoring this historic landmark — and raise the bar on quality-of-life amenities — to produce a successful project.

In 2012, Dominium, a Minneapolis-based developer that had successfully completed other adaptive-reuse projects in St. Louis, 6. submitted a proposal for a mixed-use redevelopment. The Dominion project team paid careful attention to detail and restored as many of the existing historic features as possible from the original building, including the brick façade, terra cotta features and a grand stair connecting levels of the old shopping arcade.

Collaboration pays off. The widespread dedication and collaboration from private and public sectors were crucial for the successful redevelopment of the Arcade building. For example, the lower floors’ 54,000 square feet leased by Webster University were renovated to create 12 classrooms, two computer labs, 25 private offices, a 175-seat auditorium, café and an art museum.

The $118 million project involved a mix of federal and state historic tax credits and New Market Tax Credits, loans, mortgages and investment from Webster University. Here are some of the key lessons learned through the design and construction process:

For more housing affordability resources, including the full case study on the Arcade Apartments, visit nahb.org/housingforall and the Land Use 101 toolkit. The toolkit also includes access to the full How Did They Do It? report.

Historic rehabilitation requires a thoughtful design process. Dominium invited various subcontractors, such as HVAC, masonry and electrical professionals, to be part of the design early on. The goal was to identify possible issues in the 500,000-square-foot building and 80-plus residential floor plans.

Negotiate to achieve solutions.

Deborah L. Myerson, AICP — author of the How Did They Do It? report — contributed to the content of this article. Myerson is an urban planner with 20 years of experience in housing, community development, land use and transportation policy, and urban revitalization.

In a policy change widely expected and good for housing and home building, the Federal Reserve reduced its key, short-term federal funds rate by 25 basis points to a top rate of 2.25%. The housing sector continues to face affordability headwinds, and today’s action by the Fed will help by reducing borrowing costs. The evolution of the central bank’s policy over the last three quarters is an important reason why mortgage interest rates have declined from late2018 cycle highs. Given that the housing market faced a 10-year low for housing affordability last fall, the Fed’s approach is a net positive for future housing demand and home construction, while offering an offset (but only a partial one) for rising construction costs. These costs are limiting housing inventory, particularly at the entry-level market. Moreover, higher production costs have caused housing affordability to decline in recent years and are the primary driver for NAHB’s estimate for generally flat conditions for new home sales and starts in 2019. With respect to the overall economy, the Fed characterized the labor market as “strong,” with economic activity rising at a “moderate” rate. This mirrors the home building economic perspective of a slowing overall economy, ongoing labor shortages, and late cycle concerns over housing affordability. The Fed noted that “business fixed investment has been soft,” and the housing market has mirrored that trend in recent quarters.

A new study released by NAHB based on the latest data available (2017) reveals a nearly $11,000 difference in average property tax bills among the most and least expensive congressional districts. The highest average property tax bill was $11,389 in 2017, paid by homeowners residing in New York’s 17th congressional district (Rockland County and portions of Westchester County). By contrast, the lowest average annual real estate tax bill was $425, paid by homeowners in Alabama’s 4th district, which comprises Franklin, Colbert, Marion, Lamar, Fayette, Walker, Winston, Cullman, Lawrence, Marshall, Etowah and DeKalb counties. The congressional districts in which homeowners pay the 20 largest and 20 smallest annual average property tax bills are shown in the tables. NAHB tax economist David Logan provides more analysis in this Eye on Housing blog post available online at https://bit.ly/2OrM9oO.

Inflation was described by the Fed as running below its target rate of 2%, suggesting the central bank has policy room to maneuver to reduce rates if the economy continues to slow. That said, additional rate cuts in the nearterm are not guaranteed. Indeed, NAHB believes some investors are being too aggressive with an expectation of 75 basis points of rate reduction over the next few quarters. The NAHB forecast includes an additional 25 basis point cut in the Fed funds rate late in 2019 given muted inflation and slowing growth. The late cycle housing market soft patch that began during the second half of 2018 provides clear evidence of ongoing macro risks, with residential fixed investment down for the last six quarters. NAHB Chief Economist Robert Dietz provides more details in an Eye on Housing blog post available at https://bit.ly/2OHEAdB.

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Labor and subcontractor shortages remained widespread in July and continue to impact the industry in a number of ways — including putting additional upward pressure on new home prices — according to a recent survey conducted by NAHB. The survey listed 15 specific occupations, and for each one, builders reported widespread shortages of varying degrees, ranging from a low of 47% for building maintenance managers to a high of 83% for framing crews. Labor shortages in 14 occupations were either unchanged or even more widespread than they were at this point last year. The share of builders reporting a shortage of rough carpenters ticked down one percentage point but remains at a whopping 82%. The same survey asked builders about the effects labor shortages may be having on their businesses. At least three out of four respondents reported that a dearth of workers is:

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Causing builders to pay higher wages/ subcontractor bids (87%);

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Making it difficult to complete projects on time (81%);

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Making it harder to find subcontractors with well-trained employees (79%); and

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Forcing builders to raise home prices (75%).

NAHB Senior Economist Paul Emrath provides more analysis in an Eye on Housing blog post at https://bit.ly/2ORDnR6. Readers interested in more details, including a complete history of questions in the labor availability survey, can find them in the full report online at https:// bit.ly/2Kvck9Y.

NAHB Chief Economist Robert Dietz recently provided this housing industry overview in the bi-weekly newsletter Eye on the Economy: Job growth and lower mortgage rates are the positive economic variables that will support near-term growth for singlefamily construction. In June, 224,000 jobs were added to the nation’s workforce, as the unemployment rate held at just 3.7%.

Fargo Housing Market Index has been in the low- to mid-60s for six months. This month’s uptick was matched by a 3.5% gain for single-family starts in June, rising to an annual rate of 847,000. Still, single-family construction in 2019 is down approximately 5% compared to the first half of 2018. Thus far, the South is the only region reporting a net gain in 2019.

However, the low unemployment is further aggravating the scarcity of skilled laborers. In May, there were 369,000 unfilled jobs in the construction sector. Likewise, lower mortgage interest Single-family permitting is lagging as rates — averaging near 3.8% for a 30-year well. However, the number of homes fixed-rate, according to Freddie Mac — are authorized but not yet under construction helping to promote housing demand, has declined to 85,000 after reaching a although on a limited basis. peak of 103,000 in December. For example, pending sales of existing Multifamily construction also declined homes increased 1.1% in May. However, in June by about 10%, following a those sales were still down on a year-overparticularly strong month of May. year basis — the 17th straight month of Multifamily development has been roughly such declines, largely due to ongoing flat thus far in 2019, with 5-plus unit housing affordability constraints. production up just 0.2% for the first half of Nonetheless, builder confidence the year. remains positive, increasing one point in For more, visit EyeOnHousing.com. July to a level of 65. The NAHB/Wells

While The New American Home 2020 is very similar in size to the 2019 edition and is located in the same private Las Vegas hillside community of Ascaya, that’s pretty much where the similarities end. The two homes have very different architectural styles: While the ’19 home had a single-sloped roof line and predominantly square-edged designs, the 2020 home largely consists of radius walls and other rounded design elements. In fact, one of the first things visitors will notice is that the front of the home is built entirely with curved walls. “At Sun West Custom Homes, we’ve always prided ourselves on being on the cutting edge of new designs and innovative products and integrating them in unique ways that haven’t been seen before,” said Dan Coletti, the company’s president. “There’s no doubt that The New American Home 2020 is going to deliver once again on all of those cool concepts.” Putting a typical roof on a home with curved walls would present some unique challenges, as would installing stonework to the exterior walls. But the 2020 show home is far from typical —

Coletti and his team have discovered some creative build techniques and are confident the finished product will be worth the extra effort. “Dan and I have always been very competitive,” said Carl Martinez, Sun West’s president of residential construction. “It’s in our nature to challenge ourselves and those we work with to outdo the home we built last year. We’ve come up with some incredible ideas, especially for the interior design which is really going to push the envelope.” All attendees of the NAHB International Builders’ Show® 2020 are eligible to tour The New American Home — as well as its counterpart, The New American Remodel — Jan. 21-23. Registration the for the show is now open. For more information, visit buildersshow.com.

A recent study by NAHB economists reveals that millennials desire certain bathroom features more than older generations. The report, based on surveys conducted between 2007 and 2018, found that the share of home buyers who want whirlpool tubs declines as older generations age, but stays relatively constant for millennials. For specialty rooms, millennials show a higher preference for exercise rooms, game rooms and media rooms than other generations.

In a victory for NAHB, the Trump administration recently released final rules updating the Endangered Species Act (ESA) Section 7 consultation requirements and revising regulations governing the designation of critical habitat. The new rules will improve the overall efficiency of the ESA's permitting process and make compliance less onerous for home builders and developers.

Registration is open for NAHB's 2019 Fall Leadership Meetings, Oct. 22-24, at the Hyatt Regency Hotel in New Orleans. You can register and access information to help make your travel arrangements and book your hotel at nahb.org/ fallleadership. Committee and council meetings will take place Oct. 22 and 23. The NAHB Leadership Council and the 2019 Transitional Board of Directors will meet Oct. 24.

NAHB Chairman Greg Ugalde and four workers in the construction trades attended today’s White House event commemorating the first anniversary of President Trump’s executive order that established the National Council for the American Worker.

The National Housing Endowment, the philanthropic arm of NAHB, also contributes to this effort by supporting innovative and effective programs, scholarship and grants that further education, training and careers in the residential construction industry.

Attending the event along with Ugalde were Gustavo RamirezRodriguez and Champagne Smith, HBI electrical NAHB is a participant in this worthwhile endeavor and in a students at the statement commending the White House commitment to workforce Potomac Job development, Ugalde said: Corps Center in “NAHB applauds President Trump for his tireless commitment Washington, D.C.; Cullen to expand job-training and apprenticeship opportunities for students and mid-career workers alike so that they will develop the Klebe, a 19-yearold student who skills and tools needed to secure well-paying jobs and succeed in became the American workforce. interested in a “With the housing industry grappling with severe labor trades career shortages, NAHB is pleased to do its part to help in this vital after attending initiative by pledging to train 50,000 new workers over a five-year Iowa’s Build My Future event; and Patrick Pinnone, who is the period for a career in the residential construction trades. Our first marine student to graduate from HBI’s training program at commitment to workforce training starts with the Home Builders the Fort Bragg Career Center. Institute (HBI), a member of the NAHB federation, and a national leader in workforce training for the construction industry.” The president and White House Advisor Ivanka Trump announced that more than 300 companies have pledged to educate and train 12 million new workers over five years.

Recent jolts to the economy stemming in part from an intensified trade war with China have worried markets and resulted in a significant decline in interest rates as investors have shifted from equity to bonds. Lower interest rates present an opportunity for the housing market, which has failed so far to respond energetically to this positive development due to prior housing affordability headwinds. This analysis by NAHB Chief Economist Robert Dietz provides an overview of what is required for a more robust housing response to lower rates, including an increase in single-family permits. The fact that home sales are not rising in response to lower mortgage interest rates is because rates are falling for the wrong reasons. These declines, while a positive for the cost of buying a home, are occurring due to the uncertainty produced by trade and growth concerns. What does this lower interest rate environment mean for housing, and

builders and remodelers? First, now is a good time to buy a home or finance a home improvement project, provided the right home is in inventory or a remodeler is available. Lack of entry-level single-family housing remains a challenging headwind for younger households trying to obtain homeownership, particularly due to lack of construction.

order from the White House on this subject is a good win to build on, particularly to make the argument at the local level of government where NIMBYism forces hurt younger households. Housing affordability needs to be a 2020 election issue.

Finally, current credit market conditions are a reminder of the typical role housing plays in business cycles. Housing Second, while the costs of buying a often feels the pain first, and then leads the home, developing land and building housing economy out of downturns, soft patches and are now lower, caution is required by recessions because low rates stimulate market participants because rates have more housing construction. The Great declined on increased uncertainty. Tariffs Recession was a notable exception to this and trade conflict not only raise the cost of trend. specific goods, but also produce regional Given that low rates have returned to weakness in export-dependent regions, the marketplace, but home construction has which in turn can affect local housing not yet responded in a significant way, demand. This effect has been seen clearly in progress must be made on other many Midwestern markets that, in addition affordability challenges for housing to to a spate of poor weather, have grappled provide a lift to economic growth. In the with a weakening agriculture sector. meantime, solid levels of builder confidence Third, a renewed focus on advocacy for suggest growth for single-family permits improved homeowner and renter housing ahead. affordability is required. The executive

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