NOV 2023
1 | FOUNDATIONS NEWSLTR
ROCHESTER AREA BUILDERS, INC.
2023 Past Presidents Back Row: Jon Cravath(2004), John Eckerman(2015), Gary Zander(2001), Brent Buchan(2008), Ed Lunn(1991) Second Row: Mike Paradise(2007), John McGuine(2006),Rory Lenton(2009,2011), Dewey Day(1976), Jason Scrimshaw(2023), Jerry Jensen(2019), Adam Giannini(2024), Kirk Gill(1983) Front Row: Becky Holmen(2022), Karen Steinlicht(2005), Karen Allen(2017), Darlene Drew(1990), Richard Hanson(1967,1969), Jean DeWitz(2013), Alissa Moe(2020)
2 | NOVEMBER 2023
2023 AUGUST MEMBERSHIP REPORT Membership Total: 405 Retention rate: 92.8%
STAFF
Patrick Sexton, Executive Director Pat@RochesterAreaBuilders.com Shelly Bahlmann, Publications & Special Events Director Shelly@RochesterAreaBuilders.com Builders, Bags & Brews, Golf Outing, Sporting Clays, Home Show, Newsletter, Showcase Magazine, RAB Update, Member Plus App & RAB Events App Rebekah Fierst, Member & Community Engagement Director Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & 40 Below Elizabeth Sullivan-Burton, Planroom & Finance Director Elizabeth@RochesterAreaBuilders.com Builders Exchange Trustees, Showcase, Remodelers Tour and Website
BOARD OF DIRECTORS PRESIDENT
Jason Scrimshaw, Kimley-Horn & Associates, Inc.
VICE PRESIDENT
Adam Giannini, Knutson Construction
SECRETARY
Jennifer Mitchenll, Edina Realty
TREASURER
Vanessa Hines, Widseth
PAST PRESIDENT
Becky Holmen, Haley Lighting
DIRECTORS
Derrick Chapman, Schmidt Carpentry Adam Kramer, Kramer Contracting Jarett Jones, Merchants Bank Aaron Thompson, The Design Connection Austin Ryan, Ryan Windows & Siding Kelsey Vaszily, Kraus-Anderson Construction Melissa Barbour, TLS Companies, LLC Joe West, Valor Mechanical Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI) / SBDC
BUILDERS EXCHANGE COUNCIL CHAIR
Katie Reinhart, Kraus-Anderson Construction
COMMERCIAL BUILDERS COUNCIL CHAIR Keith Kranz, LVC Companies
DEVELOPMENT COUNCIL CHAIR TBD
REMODELERS COUNCIL CHAIR Becky Holmen, Haley Lighting
40 BELOW CHAIR
Adam Giannini, Knutson Construction
NATIONAL LIFE DIRECTORS
Steve Buss, Cornerstone Builders & Real Estate, Inc.
NATIONAL DIRECTORS
Dana Hlebichuk, Widseth Levi Kaiser, Benike Construction (Rep) Todd Severson, TLS Companies, LLC
STATE DIRECTORS
Mike Allen, Mike Allen Homes, LLC Jay Burke, Heartwood Homes Jean DeWitz, DeWitz Home Builders, Inc. Kathy Einck, Maplewood Homes, LLC (Rep) John McGuine, JM Consulting John Eckerman, RSP Architects Kenneth Bush, Bush Companies
MISSION STATEMENT The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota. We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.
3 | FOUNDATIONS NEWSLTR
TABLE OF CONTENTS 02
Staff and Board of Directors
04
RAB Yearly Calendar at a glance
05
RAB November Calendar
06
Welcome New Members
07
Networking Night
08
Proposes Changes to Overtime Pay Rules - Eye on Housing
11
CPI Increase Eye on Housing
13
Characteristics Home Buyers Eye on Housing
14-15 Permits
4 | NOVEMBER 2023
Rochester Area Builders 2023 Calendar of Events
OCTOBER 24
Networking Night @ F&M Bank
NOVEMBER 23-24
Office Closed – Thanksgiving Holiday
DECEMBER 8 25-26
Holiday Party @ The Hilton Office Closed – Christmas Holiday
2024
JANUARY 1 23
Office Closed - Holiday General Membership Meeting @ TBD
FEBRUARY 02-04 TBD 27 27-29
Home Show @ Mayo Civic Center Continuing Educaiton Class Networking Night @ Modern Design Cabinetry International Builders Show @ Las Vegas, NV
MARCH TBD 26
BAM Building Industry Day at the Capitol Networking Night @ The Pinske Edge
APRIL
20-21 Spring Showcase of Homes 27-28 Spring Showcase of Homes 30 Networking Night @ Hamernick’s Flooring Solutions
MAY 27
Office Closed – Memorial Day
5 | FOUNDATIONS NEWSLTR
Sunday
November 2023
Monday
Tuesday
Wednesday 1
6 12:00 PM Government Affairs Committee
12
Friday
Saturday
2
3
4
8
9
10
11
15
16
17
18
22
23
24
25
29
30
7:00 AM CBC Meeting
5
Thursday
11:30 AM Program Committee
7 8:30 AM Remodelers Council Exec. 11:30 AM Exec. Committee
13
14 3:30 PM Board Meeting
11:30 AM Ambassadors/ Membership Committee 4:30 PM 40 Below Exec Committee
19
20
21 3:00 PM Development Services Advisory Committee
26
27 11:30 AM Home Show Committee
28
11:30 AM Community Relations Committee
6 | NOVEMBER 2023
WELCOME NEW MEMBERS SEPTEMBER 2023
Anthony Properties
Justin Todd Developer 214.432.9506 anthonyproperties.com
Emergent Business Technologies
Terrance Vlach Technology Systems 612.423.4792 emergent-tech.net
COMMITTEES & COUNCILS
With over 20 committees and 5 councils, there is no shortage of opportunities to get involved with the Association. From planning events, to awarding students scholarships, to participating in community projects, there are many options to choose from. As is often said, “You get out what you put into the Association”.
40 BELOW COUNCIL
This is an active, connected and engaged group of young professionals in the building industry. Through community involvement, professional development and networking events, this group is creating a welcoming atmosphere to cultivate long-term connections both
COMMERCIAL BUILDERS COUNCIL
The members of this Council are interested in all aspects of commercial and industrial construction. They support one another and provide information to the community.
REMODELERS COUNCIL
The goals of this Council are to provide education for themselves in various areas of remodeling and to promote their expertise to the consumer.
DEVELOPMENT COUNCIL
The members of this Council are interested in the areas of industrial, commercial and residential development. They support one another and provide information to the community.
BUILDERS EXCHANGE COUNCIL
This Council provides access to commercial projects currently out for bid in our area. Members can view plans and specs in our office and also online at their office if they subscribe to the Plans Online Service. Members also receive the Weekly Bulletin and access to the website, giving them information on posted projects. Contact Pat if you are interested in joining a council or committee.
COMMITTEE INVOLVEMENT OPPORTUNITIES • Ambassadors Club • Community Relations • Education • Golf Outing • Government Affairs • Green Building • Home Show • Membership & Retention • Program • Remodelers Tour • Showcase • Sporting Clay Shoot
7 | FOUNDATIONS NEWSLTR
ROCHESTER AREA BUILDERS NETWORKING NIGHT Hosted by : F & M Community Bank 1820 W Frontage Rd Hwy 52 NW Tuesday, October 24th 4:00 - 6:00
Join us for Pizza, Brews & Networking, while checking out our new building!
Parking available in our lot and across the street near Schmitt Music
8 | NOVEMBER 2023
LABOR DEPARTMENT PROPOSES CHANGES TO OVERTIME PAY RULES FOR CERTAIN SALARIED WORKERS BY BRAD MANNION on SEPTEMBER 11, 2023
Late last week, the U.S. Department of Labor (DOL) issued a proposed rulemaking that would extend eligibility for overtime pay to roughly 3.6 million salaried workers. Specifically, the agency’s proposal would increase the current salary level for determining overtime pay requirements for executive, administrative, professional, outside sales, and computer employees from $684 a week ($35,568 annualized) to $1,059 a week ($55,068 annualized) – a nearly 55% increase. The rulemaking also proposes to put in place automatic updates to the salary level every three years to reflect current earnings data and inflation. Under the Fair Labor Standards Act, salaried workers are exempt from overtime pay requirements if a worker earns at or above a defined salary level called the “standard salary.” Under the proposal, salaried workers — which often include construction supervisors — earning less than $55,068 per year will be eligible to receive the standard overtime rate for hours worked over 40 in a workweek. According to a DOL news release, the agency held more than 25 listening sessions, several of which NAHB members participated, to help inform the proposed rule. During these sessions, however, NAHB members questioned the timing of a new salary threshold, as the latest update went into effect less than four years ago. Members also informed the agency that, while the construction industry is experiencing a severe workforce shortage, an adjustment to the salary level would likely result in challenges attracting and retaining these workers. DOL is accepting comments on the proposed rule through Nov. 7. NAHB has submitted a request to the agency for the public comment period to stay open for an additional 60 days. NAHB will submit comments in response to the DOL proposal and continue to provide updates throughout the rulemaking process.
9 | FOUNDATIONS NEWSLTR
BUILD COMPETITION
BLOCK KIDS
SATURDAY, OCT. 28 8:45AM - 11:30AM RCTC’S HEINTZ CENTER Open to 3rd & 4th graders
The Block Kids Building Program is a national building competition for children in K - 5th grades and introduces them to construction careers. Participants are asked to create something construction related without adult help or guidance using approved materials and introduces them to construction careers.
THIS IS A FREE EVENT!! REGISTRATION DEADLINE IS OCTOBER 12.
LEGOS. POSTER BOARD. FOIL. STRING. REGISTRATION NOW OPEN! NAWICSEMN.ORG/BLOCK-KIDS
10 | NOVEMBER 2023
11 | FOUNDATIONS NEWSLTR
SHELTER DRIVES OVER HALF OF HEADLINE CPI INCREASE
BY FAN-YU KUO on OCTOBER 12, 2023
Consumer prices in September remained stable, with housing and gasoline cost continuing to be key drivers. Despite the slight annual slowdown, shelter costs remain elevated, accounting for over 70% of the total increase in all items excluding food and energy. The Fed’s ability to address rising housing costs is limited as shelter cost increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast expects to see shelter costs decline further later in 2023, supported by real-time data from private data providers that indicate a cooling in rent growth. The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.4% in September on a seasonally adjusted basis, following an increase of 0.6% in August. The price index for a broad set of energy sources rose by 1.5% in August as the increase in gasoline index (+2.1%), electricity (+1.3%) and fuel oil index (+8.5%) more than offset the declines in natural gas index (-1.9%). Excluding the volatile food and energy components, the “core” CPI rose by 0.3% in September, as it did in August. Meanwhile, the food index increased by 0.2% in September with the food at home index rising 0.1%. In September, the indexes for shelter (+0.6%) and gasoline (+2.1%) were the largest contributors to the increase in the headline CPI. Meanwhile, the indexes for used car and trucks (-2.5%) and apparel (-0.8%) declined in September. The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6% in September, following an increase of 0.3% in August. The indexes for owners’ equivalent rent (OER) increased by 0.6% and rent of primary residence (RPR) increased by 0.5% over the month. Monthly increases in OER have averaged 0.5% over the last nine months. These gains have been the largest contributors to headline inflation in recent months. During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 3.7% in September, the same increase as in August. The “core” CPI increased by 4.1% over the past twelve months, following a 4.3% increase in August. This was the slowest annual gain since October 2021. The food index rose by 3.7% while the energy index fell by 0.5% over the past twelve months. NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index rose by 0.2% in September.
12 | NOVEMBER 2023
VETERANS DAY
HONORING ALL WHO SERVED
13 | FOUNDATIONS NEWSLTR
CHARACTERISTICS OF RECENT HOME BUYERS BY NA ZHAO on OCTOBER 11, 2023 In a new study, NAHB uses the 2021 American Housing Survey (AHS) to investigate the characteristics of recent home buyers, defined as households who purchased homes in the two years preceding the date the 2021 AHS was conducted. According to this criterion, roughly 10.2 million households recently bought and moved to a new home. The study focuses on two important groups of home buyers: those who bought a brand-new home (new home buyers), and those who purchased a home for the first time (first-time home buyers). One important characteristic of home buyers is their income. In the 2021 AHS, the median household income for all recent home buyers was $97,700. Median household income among all home buyers grew 13% from $60,000 in 2001 to $68,000 in 2007 and then fell 4% to $64,998 in 2011. After the Great Recession, household income accelerated, jumping by around 50% from $64,998 in 2011 to $97,700 in 2021, as shown in Chart 1. Not surprisingly, new home buyers consistently show higher median income than first-time home buyers ($112,100 vs $90,000 in 2021). In addition to characteristics of buyers, the AHS so provides information about the homes they purchased. For example, the median value of the homes purchased was $318,185 overall in the 2021 AHS. The median value of new homes was $429,205, and the median value of homes purchased by a first-time buyer was $271,445. The 2021 AHS also shows how the homes were purchased. More than half of recent buyers put no more than a 20% down payment on the homes they purchased, as shown in Chart 2. Around 18% of all buyers purchased a home without a down payment in 2021, 50% had a down payment of 0 to 20%, and only 16% put more than 20% down. Among all recent home buyers, first-time buyers had relatively smaller down payments. Approximately 82% of first-time home buyers put no more than 20% down, including 18% with zero down payment. In comparison, only 63% of buyers purchased new homes with no more than 20% down. Considerably more detail is available in the complete study. Please visit the special study page to view the full report.
14 | NOVEMBER 2023
ROCHESTER BUILDING PERMITS
SEPTEMBER 2023 NEW RESIDENTIAL
2023
VALUATION
2022
VALUATION
2023 NO.
VALUATION
2022 NO.
VALUATION
BUILDING PERMITS ISSUED TO DATE
1767
420,849,654
1636
461,246,472
0
Single Family Dwelling
155
60,684,944
135
54,315,890
0
0
0
140
17,421,661
Multi-Family Buildings Total Units: 494
5
73,570,000
24
97,921,858
354,820
15
134,911
TRADE PERMITS ISSUED TO DATE
7808
116,526,666
7569
125,878,083
Electrical
3079
50,777,104
2995
56,517,986
Electrical (Temp. Service)
162
51,975
170
115,000
Single Family Dwelling
21
7,061,992
13
5,465,500
Townhome Dwelling
4
1,140,000
1
350,000
Two-Family Houses
0
0
0
Manufactured Home
0
0
Multi-Family Bldgs (Units)
0
23
EXISTING RESIDENTIAL Deck Addition
YEAR TO DATE STATISTICS
Room Addition
2
147,706
2
77,500
Porch Additions
5
134,254
0
0
Other Additions
8
760,463
2
16,400
Mechanical (HVAC)
2041
35,120,973
2057
33,514,490
483
947,620
408
819,530
Basement Finish
14
245,198
7
141,980
Mechanical (Gas Piping)
Alterations
20
565,033
57
1,233,281
Mechanical (Fireplace)
228
916,212
213
1,041,509
Mechanical (Hydronic)
131
9,082,823
168
13,176,906
Plumbing
1684
19,629,959
1558
20,692,662
TOTAL PERMITS YTD
9575
537,376,320
9205
587,124,555
Multi-Family Addition
0
0
1
4,000
Multi-Family Alterations
20
565,033
0
0
NEW COMMERCIAL Assembly (Church)
0
0
0
0
Assembly (General)
1
525,000
0
0
TCPA BUILDING PERMITS
Assembly (Restaurant/Bar)
0
0
0
0
Business
0
0
0
0
Education
0
0
0
0
Factory/Industrial
0
0
0
Institution
0
0
0
JUNE 2023
NUMBER
VALUATION
Cascade Township
8
600,000
Dover Township
2
26,000
Elimira Township
0
0
0
Haverhill Township
5
136,000
0
High Forest Township
Mercantile
0
0
0
0
Kalmar Township
Miscellaneous
0
0
0
0
New Haven Township
Residential (Apartment)
0
0
0
0
Orion Township Pleasant Grove Township
Residential (Care/Assisted Living)
0
0
0
0
Residential (Care/Hotel/Motel)
0
0
0
0
Storage (General)
0
0
0
0
Storage (Parking Garage)
1
4,800,000
0
0
Storage (Warehouse)
0
0
0
0
Utility (General)
1
341,000
1
9,700
Utility (Private Garage)
0
0
0
0
Addition
4
1,936,453
4
1,761,907
Alterations
31
22,863,466
28
14,818,117
Structural Shell
0
0
0
0
“White Box”
0
0
0
0
Interior Demolition Only
3
0
0
0
Other Phased Permits
0
0
0
0
Business Signs
18
174,312
7
106,100
Advertising Signs
0
0
0
0
Footings & Foundations
0
0
8
N/A
Demolition
3
0
6
N/A
EXISTING COMMERCIAL
OTHER CONSTRUCTION
TE9S A PD 4 1
N
OU
4,500 859,000 71,000
1
44,000
1
0
Rochester Township
6
646,000
Rock Dell Township
1
0
Salem Township
8
228,000
Viola Township
1
0
15 | FOUNDATIONS NEWSLTR
OLMSTED COUNTY PERMITS YTD NEW RESIDENTIAL
2023
Single Family-Detached
25
9,665,509
39
16,903,366
Single Family-Attached
2
689,195
7
1,784,377
Garage
17
1,296,983
22
1,829,424
32
199,566
42
262,364
VALUATION
2022
RESIDENTIAL Deck Addition
9
774,051
16
1,413,139
Alterations
310
5,384,088
228
3,988,670
6
533,951
3
164,894
Garage Addition
NEW COMMERCIAL/INDUSTRIAL Recreational
0
0
0
0
Church/Religious
0
0
0
0
Industrial/Warehouse
0
0
4
2,644,959
Service/Repair Station
0
0
2
3,041,530
Store/Restaurant
0
0
1
78,552
Nonresidential Building
2
1,800,890
1
616,530
COMMERCIAL/INDUSTRIAL
2023
VALUATION
2022
VALUATION
Addition
3
12,084,022
0
0
Alterations
18
1,038,821
20
4,535,343
Re-roofing
2
110,000
3
286,563
Pool, Retaining Wall, etc.
21
1,350,903
14
547,250
Manufactured Homes
3
0
12
0
OTHER STRUCTURES
MISCELLANEOUS PERMITS Mechanical
198
1,027,626
167
866,634
Plumbing
59
304,219
71
257,664
710
37,331,845
654
58,225,392
TOTAL PERMITS
CD Report
VALUATION
August 2023
BUILDING DIVISION Commercial building plans submitted
Residential building plans submitted
Commercial inspections completed
30
103
2023: 1,213 *Avg: 931
Residential inspections completed
YTD NEW Housing Units
Residential plan review time
Commercial plan review time
2023: 2,021 *Avg: 1,897
2023: 657 *Avg: 587
3 Weeks
4 Weeks
YTD Residential permits issued
YTD Commercial permits issued
YTD Trade permits issued
2023: 1,109 *Average: 1,038
2023: 286 *Average: 239
2023: 6,882 *Average: 6,748
YTD Residential valuations
YTD Commercial valuations
YTD Alterations valuations
YTD Trade valuations
2023 $134,717,672 *Average $115,844,527
2023 $43,333,200 *Average $93,028,043
2023 $222,210,701 *Average $118,753,049
2023 $100,759,064 *Average $89,238,430
OLMSTED COUNTY PERMITS TOWNSHIPS/CITY
SEPTEMBER 2023
2023
VALUATION
2022
VALUATION
City of Byron
30
995,115
19
118,999
Eyota Township
3
596,119
1
112,095
Marion Township
14
237,955
12
175,653
Oronoco Township
16
1,079,120
12
292,258
City of Stewartville
14
222,545
35
1,380,012
Quincy Township
2
483,446
3
68,400
PINE ISLAND BUILDING PERMITS AUGUST 2023 NEW RESIDENTIAL
NUMBER
VALUATION
Single Family Detached
0
0
Single Family Attached
0
0
Basement Finish
1
48,000
Deck Addition
0
0
Existing Residential
PLANNING DIVISION
YTD Building permit plans reviewed
YTD Zoning Certificates submitted
YTD Type I Applications submitted
2023: 1,295 *Average: 1,276
2023: 74 *Average: 84
2023: 60 *Average: 51
YTD Type II Applications submitted
YTD Type III Applications submitted
2023: 5 *Average: 3
2023: 29 *Average: 47
*Average based on 2020, 2021, 2022 * Due to report timing, the Community Development Report is a month late.
16 | NOVEMBER 2023
17 | FOUNDATIONS NEWSLTR
18 | NOVEMBER 2023
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19 | FOUNDATIONS NEWSLTR
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Contact Elizabeth for more information
20 | NOVEMBER 2023
Reach
Qualified Customers
Advertise on the RAB Website!
More than 3,000 people visit the RAB website each month, many of them looking for a contractor. Advertise on our site and reach them when they’re primed to buy! Banner ads are available in a variety of locations on the RAB site, from job posts to the contractor directory. Higher tiers come with priority placement in directory search results too. Contact us today to learn how you can start advertising, starting at $299.
Contact Rochester Area Builders RAB@RochesterAreaBuilders.com or 507-282-7698
21 | FOUNDATIONS NEWSLTR
FOUNDATIONS NEWSLETTER ADVERTISING Rochester Area Builders Newsletter is an unbeatable opportunity to advertise to members and individuals associated with RAB. It is a source of valuable association and industry information, and is published and emailed monthly. Foundations is sent to over 1600 connected industry professionals. Ad sizes are listed under Display Ad Dimensions, and prices are located above. Ads may be changed from month to month. Our prices are for full color ads. We will gladly work with you to design your ad. Please send digital files for all ad copy, logos, and artwork. We use PC format. We accept Illustrator and Photoshop files. Convert all fonts to outlines. We also accept the following high resolution file types: .tif, .eps and .pdf (with all graphics and fonts embedded). If you have any other formats please contact us.
RETURN TO: ROCHESTER AREA BUILDERS
Shelly Bahlmann Shelly@RochesterAreaBuilders.com 108 Elton Hills Ln NW Rochester, MN 55901 507-282-7698
Newsletter Advertising Rates
Per Issue
12 Issues
New Member 12 Issues
Full color 1/2 Horizontal
c $70.00
c $650.00
c $490.00
Full color Full Page
c $90.00
c $900.00
c $675.00
Full Color Full Page Press Release
c $25.00
Newsletter Display Ad Dimensions 1/2 Horizontal Full
8-1/2 x 5-1/2 8-1/2 x 11
Send artwork to Shelly@RochesterAreaBuilders.com by the 15th of the month to be included in the upcoming Foundation Newsletter.
22 | NOVEMBER 2023
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23 | FOUNDATIONS NEWSLTR
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