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.

Weekly Update: July 27, 2017

Waterloo HBA members in Des Moines

   A dozen members and spouses of the Cedar Valley HBA (Waterloo/Cedar Falls area) hopped on a bus to tour the Des Moines HBA Home Show Expo on July 20.  In the inset bus photo left to right:  Lori Larson, LGC Companies; Lindsay Varney, Surface Solutions; Stephanie Wright, LGC Companies; and Cedar Valley HBA President Adam Hunemuller – faithfully guarding the coolers.  The trip was sponsored by Kyle Knapke, James Hardie Building Products.  A great idea!

Great Article in Des Moines Register about our Mike Rowe Event

Preparations for the Iowa Trades event with Mike Rowe September 28 are going very well.  Without even officially offering it up yet, we’ve sold over 40 tables and have 120 school officials planning to attend.  We also have a number of significant sponsorships in the works.  Mark your calendar and more details will be forthcoming, including possibly holding closed circuit simulcast events in localized areas.  There was a good article in the Des Moines Register that was unsolicited by our group – check it out here.  To find out how you can help, contact Jay Iverson.  Here’s the latest flyer – circulate it as far as you can!

Certified Aging in Place Specialist Course

The Greater Des Moines Area HBA is offering a Certified in Place Specialist course August 17-19 from 8:00 a.m. to 4:00 p.m. at the HBA Office, 6751 Corporate Drive, Johnston.  The cost is $630 for members and $800 for non-members based on a minimum attendance of 10 participants.  For more information on CAPS, click here. Email Jessica Verwers to RSVP for this three-day course.

Webinar – Taking Tile Beyond the Bath

Tile today doesn’t belong just in the bathroom. It can be put to excellent use in living rooms, fireplaces and as decorative accents indoors and out.  The webinar Beyond the Bath, happening Wednesday, Aug. 2, 2-3 p.m. ET, will focus on current bathroom trends and how you can take tile ideas into the rest of the home.

The speaker, Marc Thee of Marc-Michaels Interior Design in Boca Raton, Fla., will also discuss new neutrals, graphic patterns and how the “five elements in nature” inspire him to create designs for every home in his role at a design firm repeatedly named one of the nation’s best by Interior Design magazine.

Space is limited to the first 100 participants. Register before 3 p.m. ET (12 p.m. PT) on Tuesday, August 1.  NAHB Continuing Education: 1.0 hours of continuing education credits for the following 12 designations: CAPS, CGA, CGB, CGP, CGR, CMP, CSP, GMB, GMR, Master CGP, Master CSP, MIRM.

Apply to Serve on 2018 NAHB Committee or Council

The online application for the 2018 NAHB committee and council board of trustees appointments are now being accepted. We strongly encourage all those who may be interested to submit an application. Applications must be submitted before Sept. 22, so don’t delay.

Current committee and council members are reminded that you need to re-submit an application this year if you want to continue serving; there are no automatic multi-year appointments. It is important that you read all of the criteria on the application before submitting your request.  Please direct any questions about the committee appointment process to Cyndi McKinley (800-368-5242 x8346).

   This has been out for a little while, but it’s a super cool 10 hour time lapse in 3 minutes of an Amish barn raising in Ohio.  Amazing coordination and craftsmanship.


2018 Best of 55+ Housing Awards is Open

Builders who sell homes to people 55 and older – and that’s most builders – are eligible to enter this awards competition. The entry process is streamlined and fees are reduced for NAHB and 55+ Housing Industry Council members. The awards close on Aug. 15. Learn more and contact Lynn Basso with questions.

New Home Sales Expand Moderately

Sales of new single-family homes rose 0.8 percent in June 2017 to 610,000 as reported jointly by the Census Bureau and the Department of Housing and Urban Development. The June increase reflected a downward revision to the estimate of new home sales in May. If the May sales number remained at its initially reported level of 610,000, then sales would have been unchanged.

However, additional information suggests that nationwide sales are expanding. Sales are 9.1 percent above their level 12 months ago. At the same time, on a year-to-date basis (Jan-Jun 2017), sales are 10.9 percent above their pace over the first half of 2016.

Regionally, the nationwide gain in sales over the month reflected a 12.5 percent increase in the West, and a 10.0 percent increase in the Midwest. Sales in the Northeast were unchanged while they fell by 6.1 percent in the South. Over the past 12 months sales recorded double-digit growth in the Northeast (41.4 percent) and the West (33.3 percent). Meanwhile sales rose 0.9 percent in the South, but fell 12.0 percent in the Midwest during this time period.

New home inventory has also risen. The inventory of homes rose 1.1 percent to 272,000 over the month of June. This level is also 11.9 percent above the inventory in June 2016. Because the pace of growth in the number of homes for sale exceeded the number that were sold, the months’ supply also rose. Over June, the months’ supply increased by 1.9 percent to 5.4 months, 3.8 percent higher than one year ago. Nevertheless, the months’ supply, which measures the number of months it would take to exhaust the inventory at the current sales pace, remains below the healthy 6.0 benchmark.

The median sales price fell 3.4 percent over the past 12 months on a not seasonally adjusted basis to $310,800. However, because sales have been trending upward, this decline may reflect a compositional shift rather than an erosion in market fundamentals. Over the past 12 months the proportion of new home sales priced below $300,000 rose 3 percent to 47 percent. Conversely, sales at prices $300,000 and above fell 2 percent to 53 percent. The difference in the changes likely reflects rounding.

At the halfway point of 2016 most indicators suggest that sales continue to expand. The year-to-date increase remains consistent with NAHB’s expectations for sales over 2017. At the same time, months’ supply has expanded, due more to an increase in inventory of homes as opposed to a sales decline. Despite the increase, the months’ supply remains low, partly as a result of challenges faced by builders, and could erode some growth in new home sales.

2018 HUD Appropriations

Last Tuesday, the Senate-T-HUD Appropriations Subcommittee approved $40.24 billion in appropriations for HUD for fiscal 2018, which starts Oct. 1. This is an increase of $1.4 billion above the current level.  Of note to the housing community, the bill provides $3 billion for the Community Development Block Grant formula program, which is $100 million above the funding level proposed in the House T-HUD Appropriations legislation.

The Senate spending bill also includes $950 million for the HOME program in fiscal 2018, which is also $100 million above the House counterpart.  Of particular interest to the multifamily developers, the Senate appropriations package provides $21.37 billion for Section 8 Tenant Based Rental Assistance, ($1.07 billion above the fiscal 2017 level of $20.29 billion), and $888 million above the $20.49 billion earmarked in the House bill.

The Senate spending measure allocates $11.5 billion for Section 8 Project-Based Rental Assistance,  an increase from $10.82 billion for the current fiscal year and $42 million above the House proposal of $11.08 billion.