Weekly Update: December 14, 2017

   At the Corridor Business Journal award ceremony was (left to right) Aaron McGlynn, Karyl Bohnsack, Art Floss, Andy Martin, Steve Clark, Melissa Schooley, Reagan Boeset and Tim Ruth.

Iowa City HBA and Kirkwood Recognized for Workforce Development

Congrats to The Greater Iowa City Home Builders Association, Kirkwood Community College, Mrs. Boeset and Mr. Clark for the #cbjworkforce Publishers Award at the Corridor Business Journal Workforce Awards ceremony. The award was for preparing youth for the workforce through the CCA Middle School STEM Construction camp. CCA MS students together with area professionals and educators spend five days of hands-on instruction of basic construction skills as well as problem-solving activities. The young campers were given opportunity to connect with the community by creating such items as benches for dugouts and game boards for senior centers. “We can’t think of a better way to strengthen the economy than to boost the confidence and skills of the next generation of workers.” John Lohman, CEO Corridor Business Journal.  Mr. Clark is holding the Award from NAHB received at the Association Management Convention in Denver earlier this year.

Final Draft Notice of Intended Action for Carbon Monoxide Rules

We published proposed changes a few weeks ago and there wasn’t a peep out of anyone – here’s your final chance before it is adopted.  Click here for the final draft of the proposed carbon monoxide rules.  There were changes made at the stakeholder meeting last week and this draft incorporates many of the suggestions and comments that were received.

As noted, this is the initial filing of the rule, which is called a “Notice of Intended Action.”   These should be published in the January 3, 2018 Iowa Administrative Bulletin.  There is a public comment hearing scheduled for January 23, 2018 at 10 a.m., in the public conference room in the Oran Pape building.  This will be the opportunity for any member of the public, including stakeholders, to offer comments about the proposed rulemaking.  While there can be changes to the rules as a result of comments received at the January 23 public comment hearing, often, there are no changes that are required.   The rulemaking process will be completed in time for the rules to be effective as of July 1, 2018.

Go Build America Recruitment Campaign

Construction demand is growing, but the size of the skilled workforce is not keeping pace. For the construction industry, how to recruit more workers – especially young talent – is the question of the day, the year, perhaps the decade.

A workforce development initiative called Go Build America has a solution: Counter the industry’s bad rap among high schoolers and other impressionable career seekers, along with their parents and teachers, with strategic, ongoing PR campaigns.

“We have had decades of kids being told that they shouldn’t go into this industry; there’s no money in it, it’s too dangerous, it’s too dirty,” said Ryan Dwyer, executive director of Go Build America. “That’s why piecemeal campaigns or campaigns that are not aggressive or fully comprehensive don’t work. We are in the business of changing hearts and minds; this is a perception problem that has to be overcome.”

Go Build began as a statewide industry initiative called Go Build Alabama and has made some impressive inroads there. Since its launch in 2010, enrollment in Alabama’s construction-related tech classes has increased 24 percent and applications to apprenticeship programs have risen by 73 percent. Surveys have shown that Go Build influenced more than half of the students now pursuing building careers in the state.

The success of Go Build Alabama inspired Tennessee and California to begin similar programs in the last two years.

Go Build works with a variety of construction associations, workforce development organizations and local departments of education in a state to let young people know about training programs and job opportunities. It reaches audiences through websites, videos, advertisements, collateral materials and grassroots efforts.

On December 11, Go Build America will officially launch a new website, gobuildamerica.com, featuring a database of every construction technology program in the United States. Paying partners will have access to all the marketing and education materials that have been developed. To encourage current workers to stay within the industry and build on their skills, Go Build America will allow companies to post job listings on the site at no cost.

Aggressive mass media and social media campaigns are integral to Go Build, according to Dwyer. The group has helped states develop localized messages and images designed to resonate with their target audience.

“The way that young people interact and engage with information today is totally different than it was five or 10 years ago or even a year ago,” said Dwyer. “Go Build has a comprehensive, multi-platform approach.”

2017 Construction Costs & Lot Prices

According to a recent NAHB survey of home builders, construction costs account for 55.6% of the final sales price of the average new home, and 21.5% of the total sales price is attributed to the cost of the lot.

Rising materials prices and limited labor have been primary concerns for builders throughout 2017, and those issues are expected to continue into next year as well.

However, as NAHB Chief Economist Robert Dietz noted recently in Eye on Housing, recent figures for starts and sales are indicating continued growth is ahead.

“Single-family starts (877,000) are at a post-recession high, and sales of new single-family homes sales rose 6% [in October], recording its strongest reading in a decade,” Dietz said. “Moreover, a rising share of new home sales is coming from homes that have not yet begun construction, pointing to additional gains for construction in the near term.”

For more details about the survey and a breakdown of the average sales price, go to housingeconomics.com.

Member Advantage Discounts

Your 3-in-1 membership includes an exclusive program from the National Association of Home Builders (NAHB) called Member Advantage. This offers you ways to reduce expenses, increase efficiency, and maximize profits through discounts on products and services with leading, national companies. To learn more about these discounts and how to access the savings go to NAHB Member Discounts. Click here for an overview of all discounts.

   We had a great time at the Iowa City HBA holiday party last week.  Nearly 160 people were there and most participated in a wine and whiskey fundraiser combined with a silent auction.  Nearly $10k has been raised for a scholarship fund which will be matched by a member family for a total of $20k that will be used for students entering the building trades.

Weekly Update: December 7, 2017

   The executive officers of the state HBA’s across the country gather together during the first week in December each year, outside of the NAHB calendar.  HBAI Executive Officer Jay Iverson is chairman of the EO20 group and we just met this week in Savannah.  It’s an awesome opportunity to come together with a very broad range of topics and that network is critical to our various operations.

Tax Reform Last Minute Changes to Benefit our Industry?

As House and Senate conferees work to produce a final tax overhaul package, NAHB is urging congressional leadership to produce a conference report that provides the best outcome for home owners, renters and the small business community. We hope that you will join the fight.

This report must:
  • Adopt the Senate position on the mortgage interest deduction, which retains the principal cap for deductible interest at $1 million and the deduction for second homes.
  • Continue to allow the deduction for interest on home equity loans for home repairs and improvements but under the $1 million mortgage interest cap. Both the House and Senate bills eliminate this deduction.
  • Retain the deduction on property taxes paid up to $10,000, a provision that is in both the House and Senate bills.
  • Maintain the exemption of capital gains tax from the sale of a primary residence, which requires home owners to live in their home for 2 of 5 years to qualify for the exemption. Both the House and Senate bills extend this time frame to 5 of 8 years. Moreover, the House bill includes an onerous and punitive income phase-out. If lawmakers will not accede to the 2-of-5-year time frame, NAHB will urge them to adopt the Senate version.
  • Retain private activity bonds. While both the House and Senate bills retain the Low Income Housing Tax Credit (LIHTC), the House version eliminates tax-exempt private activity bonds, which would significantly reduce production of affordable rental housing and eliminate the mortgage revenue bond program that promotes homeownership. NAHB calls on lawmakers to adopt the Senate position.
  • Accept the House position eliminating the Alternative Minimum Tax (AMT). The Senate bill maintains the AMT for individuals and corporations, albeit with higher income thresholds.
  • Continue to ensure that pass-through businesses are treated fairly relative to C-Corps.

NAHB is also urging conferees to include an amendment to the conference report offered by Sen. Pat Roberts (R-Kan.) that fosters affordable housing development in rural areas. However, to pay for this, it would reduce from 30% to 25% the basis boost calculation for all LIHTC projects. NAHB is working with lawmakers to find a different method to fund it.

As we work with Congress to address our concerns, we are optimistic that NAHB will be able to support the final conference report on tax reform, and that more importantly, it will provide a net plus for small businesses, job growth, and homeownership and rental housing opportunities.

We need your voice. Please contact your members of Congress and urge them to support affordable housing, strong small businesses and tax reform that recognizes the importance of homeownership.

IBS Room Block Ends Tomorrow

Over 300 fellow Iowan’s are registered for the 2018 NAHB International Builders’ Show® (IBS) in Orlando.  The Iowa room block is at the Marriott Springhill Suites, but it may be sold out. The deadline for the entire IBS room block closes tomorrowFriday, December 8! Make plans to attend and stay nearby, it’s going to be a great show! Register and book now!

Interesting New Legal Victories for our Federation

New York Victory Years in the Making

Seven years after the Environmental Protection Agency launched a federal lawsuit against NAHB andBuffalo Niagara Builders Association member Acquest Development for alleged violations of the Clean Water Act, a federal district court has dismissed the action.

At issue was whether Williamsville, N.Y.-based Acquest discharged stormwater and fill material into “jurisdictional” wetlands without first securing federal permits.

The federal government sought to stop all future discharge activities on the 96-acre parcel, require remediation of the impacted wetlands, and impose tens of thousands of dollars in fines.

Acquest rejected the claim, arguing that the onsite wetlands do not have a “significant nexus” with a traditionally navigable water as detailed in the U.S. Supreme Court Rapanos decision and subsequent guidelines established by the Corps and EPA.

With the Department of Justice’s realization that it would be difficult to prove EPA’s claims, all charges against Acquest were withdrawn and the case was dismissed.

The long and bitter fight, and ultimate win, secured by Acquest was made possible in part through the assistance of the New York State Builders Association, Buffalo Niagara Builders Association and financial support from NAHB’s Legal Action Fund.

Idaho Builders Finally See Relief after Victory

Idaho property owners received a favorable decision in September when the Idaho Supreme Court ruled that a portion of the city of Pocatello’s water and sewer fees were illegally collected from end users and should be refunded.

In 2011, the Building Contractors Association of Southeast Idaho (BCASI) had filed an action challenging this fee as an unlawful charge. BCASI won the case in 2013, and the city agreed to stop assessing the charge on future bills. However, it refused to refund the millions it had already collected. So in 2014, the plaintiffs filed a lawsuit seeking to recover those funds from the city.

Through NAHB’s Legal Action Fund, NAHB submitted an amicus brief to support the interests of Idaho builders. In the September 2017 decision, the Idaho Supreme Court found in favor of property owners, and the case now will move back to the Idaho District Court to determine the final costs to be paid back to customers.

Section 179:  Business Vehicle Depreciation Deductions

Section 179 of the U.S. tax code can present a welcome opportunity for small business owners at tax time.  An economic incentive designed to encourage the purchase of business-related equipment in order to spur growth in the economy, Section 179 lets some taxpayers deduct the full or partial cost of certain types of property from their federal taxes for the year the property was purchased and put into service.

Congress approved a bill in 2015 to permanently raise the Section 179 aggregate deduction limit to $500,000 on qualifying equipment. “Qualifying equipment” in this case is defined by the IRS as machinery, computers, office furniture, software and so on. Visit the IRS website to see the list of purchases that qualify.

While many people can and do apply the Section 179 deduction to vehicles purchased for business reasons, business owners should keep in mind that there may be restrictions in place for this type of purchase.

Under Section 179, vehicles unlikely to be used for personal use qualify for the full deduction (those with a fully enclosed driver’s compartment/cargo area, for example). Passenger vehicles are subject to certain deduction limits, even if they’re used for work more than 50% of the time. Similarly, SUVs, trucks and vans that do not meet specific IRS guidelines are also subject to limitations.

If you purchased or plan to purchase a new work vehicle in 2017, you may benefit from Section 179. Consult a certified tax preparer to see the estimated Section 179 expense allowances for vehicles and use your Federation rebates on GM or Ram.

Remember, if you want to take advantage of Section 179 during the current tax year, vehicles must be purchased and put into service by Dec. 31, 2017.

   The top association professionals in Iowa gathered last Friday to have breakfast with Governor Reynolds at Terrace Hill.  Unfortunately her plans changed at the last moment and she was unable to join us, but it was still a wonderful time.  The governor’s mansion is a lovely place to be this time of the year.