Weekly Update: August 10, 2017

$135,750 in Scholarships Awarded Since 2003

We were putting together some historical data for a few legacy donations recently and the numbers are really interesting.  Founded in 2003, the HBAI Educational Corporation has awarded 140 scholarships amounting to $135,750 to students entering the building trades.  Very impressive!  If you would like any assistance in planning your legacy gifts, please contact Jay Iverson.  The upper left photo was one of our first recipients, Michael Kramer from Earling, IA.

Looking for New Employees?

With our full attention focused on workforce development, we’re oftentimes approached by parents and interested skilled trades workers about where they or their offspring should look for a job.  We immediately say “nearly every one of our member companies are looking for workers” – but let’s qualify that a bit.  If you are truly in the market for employees, please email HBAI Executive Officer Jay Iverson if you would like for your name to be offered to these individuals.  We’re talking higher quality, committed, and potentially great employee material.  It happens several times per month and we’re happy to make the introductions.

Home Equity Used for Business Startup

Equity in a home was used as a source of capital to start 284,618 businesses-7.3% of all businesses in the U.S.-according to a new source of data released recently by the U.S. Census Bureau.

The new data source is the Annual Survey of Entrepreneurs, (ASE), which collects economic and demographic information on businesses and business ownership in all major U.S. industries. The ASE collects data on an annual basis for three years beginning with reference year 2014.

The 2014 ASE shows that the industry average use of home equity as start-up capital lands at 7.3%. Six NAICS industries use home equity at higher rates, notably Accommodation and Food Services, Other Services, Retail Trade, and Manufacturing. These industries similarly experience lower rates of profitability, are often not home-based businesses, and on average assemble $50,000 to $99,999 worth of funding as start-up capital.

In short, equity in homes not only plays a significant role in providing capital to start U.S. businesses in general, it is especially important in helping women and racial minorities in the U.S. start new businesses.  Home equity even plays a slightly above-average role in helping African-American business entrepreneurs, even though (as the Census Bureau’s Housing Vacancy Survey shows) African-Americans continue to have below-average rates of home ownership.

Governor’s STEM Advisory Council announces new co-chair

The Iowa Governor’s STEM (Science, Technology, Engineering and Mathematics) Advisory Council on Friday announced its new co-chair will be Roger Hargens, President and CEO of Accumold in Ankeny. He will serve in the role alongside Gov. Kim Reynolds.  Hargens will succeed Dr. Chris Nelson, President and CEO of Kemin Industries. Dr. Nelson will complete his two-year term as STEM Council co-chair in August.

“The Governor’s STEM Advisory Council exists to increase student interest and achievement in STEM and inspire Iowa’s next generation of innovators,” Gov. Reynolds said. “STEM ensures our students are well-equipped for the incredible careers waiting for them across our state.

“Roger Hargens embodies the council’s mission,” she continued. “He strives to recruit, employ and cultivate well-prepared Iowans, including launching the Accumold Scholars program in partnership with Des Moines Area Community College and the state of Iowa. His global perspective, workforce expertise and leadership experience will help take STEM to new heights in Iowa.”

Hargens took over as President and CEO of Accumold in 2000.  In 1995, Hargens started his own company, Heartland Machinery and Sales, Inc., and worked as President and CEO.  He began a 17-year career at Iowa Machinery and Supply Company in 1978, serving in a variety of positions including director regional sales manager and vice president of marketing.

“It’s an honor to join Governor Reynolds in co-chairing the Governor’s STEM Advisory Council,” Hargens said. “I am eager to build on the foundation laid by the governor, her three previous co-chairs and the other visionary, dynamic STEM Council members.  “Young Iowans want to be challenged,” Hargens added. “If we don’t recognize their skills and challenge them, somebody somewhere else will.”

In addition to serving as co-chair of the Governor’s STEM Advisory Council, Hargens also serves on the Iowa Innovation Council, the Board of Directors for the Iowa Association of Business and Industry (ABI) and the Des Moines Area Community College Foundation Board. He is also a lifetime member of the Society of Manufacturing Engineers.

Students Gain Experience, Business Finds Employees

Here was a great story from last Monday at WHO-TV 13 in Central Iowa – it’s exactly what we’re working towards.  You’ll have to wait a smidgeon for the commercial and the discussion on increasing tuitions – but that’s connected with the college debt crisis and the good stuff begins at minute one. It’s very interesting and well done.  It starts off:  From the White House to the State Capitol, leaders are trying to fill what are known as the middle skill jobs.

“More than 60% of all Iowa jobs require more than  a high school degree, but no more than a one or two year education.  We call them middle skill jobs.  I call them great jobs,” said DMACC President Rob Denson.

This is Systems Building Week

Building Systems Week is officially August 7-11. This week-long event aims to educate our members and consumers on the advantages of systems-built homes over traditional stick building.  Prefabricated in an efficient, controlled setting, systems-built homes, which include modular, panelized, concrete, log and timber-framed homes, provide home owners a building alternative that often saves time and money.

For home builders, adopting building systems can alleviate many of the concerns facing today’s housing industry, most notably the cost and availability of labor. With the majority of construction taking place at the factory, systems-built homes require fewer man hours to build once they arrive on site.

Systems built homes also score high on the green-building scale as material waste is significantly reduced in the factory and jobsite. Assembly in an enclosed environment allows systems-built homes to fulfill key components of green building certifications, including the ICC/ASHRAE 700 National Green Building Standard.

NAHB Member Advantage Discounts

NAHB Member Advantage gives members an easy way to reduce expenses, maximize profits and increase efficiency. Through agreements with leading national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family. In the past year, members have saved over $20M through Member Advantage. For the most up-to-date information about which companies are offering discounts as well as detailed information on how to access the savings, please visit www.nahb.org/ma.

Alliant Energy Stakeholder Group Meeting August 24

Alliant Energy is preparing a new energy efficiency plan to be filed with the Iowa Utilities Board on February 1, 2018. They are in the process of working with stakeholder groups throughout the rest of this year on various elements of our energy efficiency plan.

The first collaborative meeting will review our draft Assessment of Potential results as well as focus on the following customer segments and programs:

  • Residential -prescriptive rebates, audits and new home construction programs
  • Non-Residential and Agriculture – prescriptive rebates, custom rebates,  audits and commercial new construction programs
  • Overarching – low income and financing, behavioral and demand response programs

This collaborative meeting will be held Thursday, August 24, 2017 from 9:00 am to 12:30 pm (with registration starting at 8:30 am) at the Iowa Speedway, 3333 Rusty Wallace Drive, Newton, IA 50208.  Directions, maps, parking and lunch options will be emailed closer to the event.

Weekly Update: August 3, 2017

Another Member Benefit – Discount Hawkeye & Cyclone Tickets

We are able to offer choice Iowa and Iowa State football game tickets at a member discount – another in a long list of benefits.  To order Iowa State University tickets, click here.  To order University of Iowa, click here.

Doug Mayo Golf Event Raises Over $24k!

After all is said and done, the final tally is in and we raised over $24k for the HBAI Educational Corporation.  Proceeds benefit students entering the building trades through school scholarships.  Thanks so much for everyone who participated and gratitude goes to our sponsors:

  • Presented by Wells Fargo Home Mortgage
  • Sponsored by Kitchen & Bath Ideas and Great Caterers of Iowa
  • Prize sponsors were Cascade Manufacturing, Hubbell Homes, Greater Cedar Rapids Housing & Building Association, Prairie Pella, and the HBA of Greater Des Moines.
  • Beverage sponsors were Beisser Lumber, Academy Roofing, Flooring America, Coffin Electric, Gilcrest Jewett, Mattress Firm and Reynolds & Reynolds Insurance.
  • Hole sponsors were Academy Roofing, Ames HBA, Beal Development, Cable Plumbing, Colony Heating & Cooling, Bell Brothers, KCCI, Plumb Supply, GAF, Reynolds & Reynolds Insurance, Cascade Manufacturing, Lumberman’s Supply, Wyckoff Heating & Cooling, Homeowners Financial Group, Rudolf Insurance Consultants, Furman Corporation, and Dewalt.
  • Thanks also to the live auction winners Dennis Westoff, Peter Cochran, Brian Krumm, Chris Coffin, Dan Knoup, Ben Richter, Scott & Beth Bezdicek, Mike Miller, and Joe Tollari.

IBS Orlando Registration Now Open

Registration for the NAHB International Builders’ Show opened last Monday.  The very best deals on registration are this month only, so don’t miss:
  • Free expo pass (for NAHB members only)
  • Steeply discounted full registration (expo pass + education)
  • Free spouse registration

Not sure if you are going to the show this year?  Go ahead and register for a free expo pass now anyway.  Since it’s free, you have nothing to lose, plus you’ll be able to reserve a hotel in our hotel block and you don’t have to pay a hotel deposit until much closer to the show (in December).  The Iowa room block is the Springhill Suites by Marriott.  When you click on “accommodations” that will be your only choice.  We only have a block of 50 rooms, so don’t delay.

In addition to saving yourself some cash, early registration also greatly helps the NAHB Exhibit Sales team – when the exhibitors know we’re ahead on show registration, they are much more likely to want to exhibit.  Register now at buildersshow.com/register.

   Hudson Whitley of Budget Blinds in Iowa City scored a hole in one on July 18 at the Greater Iowa City Area HBA’s Nail Drivers Open at Brown Deer Golf Course in Coralville.  He won this $35k Cat 232D skid loader.  He’s shown with Paul Schneider of Altorfer, who donated the grand prize.  Awesome!

The Inside Scoop – and Your Biggest Member Benefit

We had an awesome Iowa legislative session this year for our industry and we’ve had many conversations with legislators about the upcoming 2018 session – it’s going to be great.  Much of the focus will be on finances, tax reform, spending, and budgets.  We will plan to work together with other like-minded organizations and use our resources to maximize benefits for our members throughout the state.

On the federal level, even though the news is full of inaction and embarrassing power plays, there is a long list of great things happening.  Here’s a little recap of the year to date:

Comprehensive Regulatory Reform

There have been numerous bills introduced in the 115th Congress to reform the regulatory process.  Below is a list of legislation that was key voted.
  • H.R. 21, the Midnight Rules Relief Act of 2017 – Would allow Congress to review under the Congressional Review Act multiple regulations rushed out by an outgoing administration.  Passed the House on 1/4/17
  • H.R. 26, Regulations from the Executive in Need of Scrutiny Act – Would restore strong congressional oversight to the federal rulemaking process, ensure that all federal regulations are carefully designed to achieve their intended benefits.  Passed the House on 1/5/17
  • H.R. 5, the Regulatory Accountability Act of 2017 – Modernizes the 71 year old Administrative Procedure Act and would make the regulatory process more transparent, agencies more accountable and regulations more cost effective.  Passed the House 1/11/27
The Senate has similar legislation aimed at reforming the regulatory process.
  • S. 21, Regulations from the Executive in Need of Scrutiny Act of 2017 – Would restore meaningful congressional oversight to regulatory rulemaking.
  • S. 584, Small Business Regulatory Flexibility Improvements Act – Would ensure rules acknowledge small businesses’ disproportionate compliance burden.
  • S. 951, Regulatory Accountability Act of 2007 – Reforms regulatory rulemaking by improving transparency, accountability and cost-benefit analysis.

Specific Regulatory Reform

WOTUS – On February 28, 2017 President Trump signed an Executive Order directing EPA and U.S. Army Corps of Engineers to begin the process of rescinding or revising WOTUS.  The agencies must now review the flawed rule. What will likely happen next is the EPA and the Corps will issue a proposed rule to rescind/revise WOTUS.  It will appear in the Federal Register and be available for comment.  After taking the comments into account, the agencies will issue their final rule.  If the final rule says WOTUS should be revised, expect a flurry of lawsuits from interest groups afraid any new rule will not adequately protect the nation’s waterways.  After that, the agencies will propose a new rule.  On Thursday, July 27 EPA published it’s rule to repeal the WOTUS rule and is accepting comments on its repeal rule for 30 days.

OSHA’s Volks Recordkeeping Rule – The Occupational Safety and Health (OSH) Act of 1970 established that all employers must keep accurate records of employee injuries and illnesses for five years and OSHA has six months to cite an employer for a violation.  Subsequent court rulings upheld the six-month statute of limitations.  OSHA’s Volks Recordkeeping Rule extended the explicit six-month statute of limitations on recordkeeping violations to five years.

This rulemaking went into effect on January 18, 2017.  NAHB key voted H.J. Res. 83, Disapproving the rule submitted by the Department of Labor relating to “Clarification of Employer’s Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illness which disapproved the Volks Rule.  H.J. Res. 83 passed House – 3/1/17 Senate – 3/22/17

Silica – Originally scheduled to begin June 23, enforcement is now set to begin Sept. 23, 2017 of OSHA’s crystalline silica standard.  OSHA stated in a press release that the delayed implementation is “due to the unique nature of the requirements in the construction standard” and that it would be conducting “additional outreach and provide educational materials and guidance for employers.”  However, the rule will continue to be challenged by NAHB and its fellow members of the Construction Industry Safety Coalition (CISC).

Softwood Lumber – Softwood Lumber is most commonly used for wood-frame residential construction and accounts for $18,000 of the cost of a new home.  America’s residential construction industry needs a stable and affordable supply of lumber, because we consume more lumber than we produce.  In 2016, the United States consumed 47.1 billion board feet of softwood lumber while producing only 32.8 billion board feet – a shortfall of 14.3 billion board feet; production fell 30% short of demand.  Annual domestic production has not met demand even once during the last 50 years.

In order to account for the difference in supply and demand, we import 28% of our lumber from Canada.  Trade between the U.S. and Canada with softwood lumber has been rocky as the Softwood Lumber Agreement between the two nations expired on Oct. 12, 2015.  The lumber supply problem has been exacerbated by the fact that this spring, the U.S. Dept of Commerce made the decision to impose a 19.88% countervailing duty on Canadian softwood lumber exports to the U.S and on June 26, an anti-dumping duty of 6.87% was also imposed.  These two tariffs amount to about a 26.75% total tariff on Canadian lumber imported to the U.S.  American consumers bear the burden of rising lumber prices.  A $1,000 increase in the media new home price will leave 152,903 U.S. households priced out of the market.  A new analysis by NAHB shows that more than 8,000 full time jobs will be lost this year as a result.

NAHB is asking congress to hold hearings on the trade dispute between the U.S. and Canada and consider ways to increase the domestic supply of lumber from public lands.  In a step towards increasing domestic supply, Rep. Bruce Westerman (R-Ark). Introduced The Resilient Federal Forests Act of 2017.  This bill would significantly reduce red tape that prevents the U.S. Forest Service from better managing its timber lands and increase the delivery of domestic timber products into the market.

National Flood Insurance Program (NFIP) – In July NAHB reached an agreement with leaders of the House Financial Services Committee to craft a viable, long-term flood insurance reauthorization bill that will keep the National Flood Insurance Program (NFIP) fiscally sound and enable home builders to provide safe and affordable housing to consumers.

NAHB and the committee leadership have worked together to provide a five-year reauthorization of the NFIP that:
  • Eliminates a provision that would have ended NFIP coverage of new homes constructed in the 100-year floodplain;
  • Ensures that “grandfathering” will remain available for all policyholders if their risk changes, which will enable home owners to have continued access to affordable flood insurance; and
  • Sustains affordability by raising the annual premium floor for rate hikes from its current 5% level to 6.5% instead of the proposed rate of 8%.

Joint Employer – On July 27, 2017 Rep. Bradley Byrne (R-Ala.) introduced the Save Local Business Act, bi-partisan legislation that would clarify under law what constitute a joint employer.  This legislation restores the traditional definition of joint employment and affirms that an employer may be considered a joint employer of a worker only if it “directly, actually and immediately” exercises significant control over the primary elements of employment, such as hiring, firing, determining pay, or supervising employees on a routine basis.  This provides employers with a clear-cut standard for joint employment, and will allow home building firms and other construction businesses to operate with certainty in their labor and employment obligations under the law.

In 2015, the National Labor Relations Board’s (NLRB) controversial decision in the Browning-Ferris case broadened the standard for finding joint employer status.  Under this ruling, a company is a joint employer if it has indirect control or the potential right to control or co-determine the essential terms of an employee’s employment, including hiring and firing, discipline, supervision, scheduling, seniority and overtime and assigning work and determining the means and method of performance.

For the residential construction sector, this means builders, specialty trades and other employers could be held liable for the labor and employment practices of third-party vendors, suppliers and contractors over which they have no direct control.

Overtime – The Department of Labor issued a request for information on the Obama administration’s overtime rule in July.  NAHB will submit comments independently and as part of the Partnership to Protect Workplace Opportunity coalition.

Last year, Obama administration issued a proposed rule that was set to take effect Dec. 1, 2016 that would double the salary threshold to receive overtime pay from $23,660 to $47,476.

Working with Congress and members of our business coalition, NAHB led the effort to mitigate the effects of the rule. Moreover, NAHB joined other business groups in filing a lawsuit to challenge the overtime rule. As a result of these efforts, the rule was never implemented because a judge issued a preliminary injunction against it.

The Trump administration has defended its legal authority to implement a new overtime requirement but has not endorsed the Obama-era rule. Secretary of Labor Alexander Acosta testified at his Senate confirmation hearing that he would prefer a more modest salary threshold than previously proposed, one that is potentially tied to the rate of inflation.

The Department of Labor is providing the public with the opportunity to offer input as the agency mulls its next steps. NAHB will provide detailed comments by the September 2017 deadline.