The 2017 Iowa Legislative session closed Saturday, April 22 after an all-night marathon. Big issues like water quality, cannabis, and budget issues were still being worked on as they tried to find common ground before calling the session’s end. Early in the session, lawmakers shortened the session by ten days to save some money and the per diem ended April 18.
Everyone had hoped for a smooth and easy session with Republicans controlling the House, Senate, and Governor’s office – such was not the case and much lower than expected revenues further complicated things. Overall it was a monumental undertaking – with issues like abortion, tax relief, mental health and education funding, collective bargaining, medical marijuana, etc.
It was a great session for members of the Home Builders Association of Iowa and other construction association groups, real estate professionals, and workforce development planning coalitions. Iowa’s 15-year Statute of Repose (the longest in the Country) was finally reduced after a seven-year battle. Commercial applications will now have an eight year SoR and residential is now at ten years. This will hopefully open up the insurance marketplace for our members, saving significant premiums with the lower exposure.
The Iowa Association of Realtor’s were victorious in their number one issue that was fought for the past four sessions – a first time homebuyer savings account. Similar to Iowa’s 529 plan for education, it will allow individuals to put away $2,000 and couples $4,000 annually into an interest bearing savings account to be used for a down payment on a single family home.
Another great victory was one of Master Builder’s top priorities – a prohibition on government-mandated Project Labor Agreements. This will be helpful for a number of HBAI members as well.
Water quality funding ended up in a stalemate between the House and Senate, so nothing was done for this session. It will be back next year for sure.
The HBAI Legislative Committee registered in favor of 31 bills (or variations); opposed eight; and marked undecided on 18 others. We successfully fought off a number of harmful bills, which always have the possibility of resurfacing. It was the most successful legislative session in many, many years. There were many pro-business, regulatory relief, and tax victories. We will continue to adding to this list – the environment is ripe for taking this state to the next level with many more economic development incentives. It’s all about the economy – when it’s strong, our members can’t help but be successful.
Fight with Canada a Big Deal – Lumber Increases Average $3,600 More
This issue is not new, quite interesting, and unfortunately a big deal for our industry. It has been going on for over 30 years and the trade agreement that has governed Canadian imports of softwood lumber since 2006 effectively expired at the end of 2016. We’ve talked about it in several newsletter editions and prices are climbing. About 30 percent of the softwood lumber used in residential construction comes from Canada.
We expect to see an increase in the cost of American-produced softwood lumber as well – just part of the market dynamics and it has happened before. Because of the uncertainty surrounding a new trade pact, we’ve already seen a 22% spike in lumber prices since the beginning of the year. These price hikes have negative repercussions for millions of Americans. It takes about 15,000 board feet to build a typical single-family home and the lumber price increase in the first quarter of this year has added almost $3,600 to the price of a new home.
We would urge the U.S. and Canada to work cooperatively to achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber. We also need to increase domestic production by seeking higher targets for timber sales from publicly-owned lands and open up additional federal forest lands for logging in an environmentally sustainable manner.
The U.S. Department of Commerce this week announced countervailing duties of up to 24 percent to be imposed on shipments of softwood lumber from Canada, retroactive to 90 days. This action was taken at the behest of the U.S. Lumber Coalition, an alliance of domestic softwood lumber producers.
NAHB is also exploring the idea of leveraging our members’ buying power in the market. Staff is beginning to examine the feasibility of creating a national buying co-operative that uses our federation structure as the supply chain. State and local HBAs could opt in to such a co-operative.
The March housing data numbers were good. While starts were down 6.8% compared to February’s outstanding weather-induced number, starts were up 9.2% compared to March 2016. Moreover, starts are up 8.1% year-to-date and were up about 8% each month this year compared to last. Single-family starts are up almost 6% YTD; multifamily starts, a surprisingly strong 15% versus a weak 16Q1. Starts should rise 6% this year. Solid. Elliot F. Eisenberg, Ph.D
Member Advantage Discounts
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