Weekly Update: June 1, 2017

Executive Order Expanding Floodplain Still in Play

Congressmen Blum, King, Loebsack & Young Contacted

In February 2015, President Obama signed an executive order (13690) that would arbitrarily expand the definition of “floodplain” well beyond the long-accepted 100-year floodplain.  As part of the Climate Action Plan, each agency was directed to create their own definition to account for future flood risk, using one of three options: 500-year floodplain, freeboard approach or using climate-informed science (see attached one-pager for more information).

This grossly expands the historical definition of a floodplain that is accepted by the government, industry and communities across the country and is based on risk and scientific assessment. We are concerned about the future of new housing developments, the redevelopment of existing and construction will occur.

One of the big problems with this E.O. is that FEMA periodically maps the entire country based on the 100-year floodplain and these new definitions would not include any new mapping.  It is unclear how builders will know what developments are in or out of these new floodplains.  Even more confusion will arise if each agency creates their own unique, possibly conflicting definitions.

Sen. Cochran and Rep. Abraham have authored a letter to OMB Director Mick Mulvaney and National Economic Council Director Gary Cohn, asking for E.O. 13690 be revoked and all related rulemakings, regulations or guidance be rescinded and are looking for additional signatories.  We strongly encourage our Iowa congressmen to sign on to this letter as well.

This issue can easily be resolved, but we need Congress to weigh in with the Administration to highlight its importance and ensure it is a priority.  Read more about it here.

Who are NAHB Members?

The 2016 annual member census conducted by NAHB reveals that 60% of our builder members are single-family builders, 23% are residential remodelers, 6% are commercial builders, 5% are multifamily builders and 4% are land developers. Commercial remodelers and manufacturers of modular/panelized/log homes each comprise 1% of the builder members.

Overall, 32% of NAHB’s members are builders who are directly involved in home building while the remaining 68% are associate members who work in support industries and professions such as trade contractors, manufacturers, retailers/distributors, designers and architects.

As NAHB economist Carmel Ford explains in a recent Eye on Housing blog post, NAHB conducts the yearly census to better understand the composition and characteristics of the members who belong to our organization.

NAHB’s builder members reported that they had a median of five employees on payroll in 2016. A further breakdown of the number of workers on payroll is as follows:

  • No employees: 3%
  • One employee: 14%
  • Two to four employees: 31%
  • Five to nine employees: 24%
  • 10 to 49 employees: 24%
  • 50 or more employees: 4%

In 2016, builder members started a median of six housing units. In 2008, the first year the member census was conducted, builders reported starting a median of four units. The median then slipped to three units between 2009 and 2011, but gradually increased thereafter. It rose to four units in 2012, and was five units between 2013 and 2015.

The median dollar volume of builder members in 2016 was $2.4 million, barely under the median dollar volume reported in 2015 ($2.5 million) and the second highest median dollar volume since the start of the census in 2008.

The median age of NAHB builder members is 56. More than half (53%) have either a college or an advanced degree.  View the full article that profiles each type of NAHB builder member.

   Thanks to HBAI President Tim Ruth for making three school presentations to our scholarship winners.  It’s great to get our name out in front of the other students, parents, and school officials.  Shown is Caleb Statler.

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.

Don’t Forget About Your Travel Benefits

We just received our first report from Snazzy Traveler on member travel.  There was about $12k in booked hotel rooms so far in 2017.  Interesting that there were no cruises or flights.  As a member of Home Builders Association of Iowa you have the Snazzy Traveler travel benefit program to take advantage of and you can save 10-75% below other travel websites, just by using Snazzy Traveler.

If you have not registered, simply go to, www.snazzytraveler.com/HBAIowa  and use your promo codeHBAIowaTravel2017 to open your free account.  Make sure that you hit the “redeem” icon after you enter the code, or else it will appear that it wants $99 for a membership.  It’s free to you though – and you can also offer this benefit to your friends, family, employees and clients.

Let them open their own accounts today and start saving tonight, by just giving them the promo code.  What better way to show your appreciation to them for making your business a success.  Go on, you deserve to get away and save money at the same time.

$6,148 is the Average Remodel – New Report

Home owners who remodel in 2017 will spend an average of $6,148 on each project, according to NAHB’s recent projections of spending by ZIP code for each of over 26,000 ZIP codes across the United States.

Average spending per improvement will range from under $2,300 to over $22,000.

California, Texas, Florida, New York and Illinois are projected to have the largest total spending by home owners on remodeling projects statewide. Connecticut, Massachusetts, New Jersey, Maryland and the District of Columbia are projected to have the highest spending on remodeling per home.

To determine these by-ZIP code estimates, NAHB looked at the number of homes in the area, the share of those built in the 1960s and 1970s, and owners’ average income and level of education.

You can purchase the datasets on nahb.org to determine how much home owners will spend. For more insights, read the full article in the NAHB Eye on Housing blog from NAHB economist Paul Emrath.

Weekly Update: May 25, 2017

Mike Rowe a Go for September 28!

Watch the video above – good stuff!  Mike Rowe has been secured for our event September 28 at the .  Much more info will be heading your way in the near future.  We’re planning for 1,500 people to attend.  Super exciting!

Mike Farr to Contribute $25k to HBAI Educational Corporation

Legacy giving to our scholarship fund is going to be a push as we try to build enough reserves to provide students entering the building trades with financial support.  Past HBAI President and volunteer extraordinaire Mike Farr (Cascade Manufacturing) has planned to provide $25k out of his estate to the HBAI Educational Corporation.  If you’d like to make arrangements to do the same, please contact HBAI Executive Officer Jay Iverson.

Quarterly Rebate Deadline Extended Until Tomorrow

Can’t get your claims in by May 19th? Not to worry! We have extended the deadline to Friday, May 26th! Claim for any single family home, remodeling project or multi-family units completed from January – March 2017. CLAIM TODAY and be rewarded for your loyalty to our 50+ manufacturer brands!  Clickhere for the claim form.

Want to Judge Iowa City Parade of Homes?

The Iowa City HBA needs a few more judges next Thursday (June1) morning.  It’s a great time, expertly put together and you’re chauffeured around like royalty, have a good breakfast and lunch, and on your way home after lunch.  Plus you get to see some really cool builds.  Email ICHBA Executive Officer Karyl Bohnsack asap.

Governor Kim Reynolds Sworn In Yesterday

It was a big day for the state yesterday as Kim Reynolds was sworn in as Iowa’s governor.  The ceremony at the Capitol was fun to be a part of.  So you’re probably aware of that bit of news by now, but it’s been interesting to see the transition occur:

  • Adam Gregg is the new lieutenant governor,  He’s 34, from Hawarden, IA, and a graduate of Central College.
  • Jake Ketzner is the new chief of staff.  He’s 31, from Clive, and a graduate of the U of Iowa.
  • Tim Alcrecht is the deputy chief of staff and senior advisor.  He’s 39, from Ida Grove, and a UNI grad.
  • Ryan Koopmans is the chief policy advisor and senior legal counsel.  He’s 35, from Ireton, and a graduate of the U of Iowa College of Law and also has an economics degree from UNI.
  • Catherine Huggins is the chief advisor.  She’s 54, lived in Iowa for 30 years, and has degrees from the U of Iowa and Drake.
  • Brenna Smith is the press secretary.  She’s 28, from Eagle Grove, and a degree from Bob Jones University.

  We had a fabulous time at the Ames HBA golf outing last Monday – no rain!  There were 144 golfers and everyone seemed to enjoy themselves very much.  It’s always followed up with a cook-your-own steak fry with all of the trimmings.

Trump Proposes $6.2 Billion Cut to HUD

Earlier this week, President Trump proposed a $4.09 trillion budget request for fiscal 2018, which begins on Oct. 1. The plan would slash HUD funding by $6.2 billion, or 13%, to $40.7 billion, and includes billions of dollars of cuts to other Cabinet agencies to help offset a proposed $54 billion increase in defense spending.

It’s important to note that no White House budget is ever approved “as is” by the Congress. Given the scores of key housing and other domestic programs that Trump proposes to cut or eliminate, the ensuing appropriations process is expected to be drawn out and contentious as lawmakers on both sides of the aisle debate the budget’s merits on an array of fronts – from taxes, to energy policy to social spending.

Final spending allocations approved by Congress later this year are likely to be much different that the White House blueprint. Throughout the process, NAHB will remain engaged and work with lawmakers to fund vital housing programs at the highest possible level.

Of note to the residential construction community, the White House budget would eliminate theHOME Investment Partnership (HOME), Community Development Block Grant (CDBG) and Choice Neighborhood programs. It also discontinued funding for the Housing Trust Fund, an affordable housing production program funded by Fannie Mae and Freddie Mac profits.

HOME received $948 million in funding for 2017. The program is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. Many multifamily builders often use the HOME program to fund developments in conjunction with the Low Income Housing Tax Credit.

The CDBG program, which provides communities with resources to address a wide range of urban renewal projects, received $3.2 billion in funding for 2017.

Moreover, the administration is proposing cuts to the Housing Choice Voucher and Project Based Rental Assistance Renewal accounts, and calling for increased tenant contributions toward their rent.

Stormwater On-Demand Training Programs Available

The first is the Iowa Green Stormwater Infrastructure Certificate, which is a series of eight webinars addressing basic design standards related to seven Infiltration Best Management Practices:  Bioretention Cells, Bioswales, Green Roofs, Native Landscaping / Turf, Permeable Pavement Systems, Rain Gardens, Soil Management and Quality Restoration, plus a short introductory webinar.  In all, there is eleven hours of content, which can be covered at your own pace.  At the end of the series, you’ll receive a Certificate of Attendance as there is no exam associated with this training.  A continuing education component is required every three years as new technologies emerge and current standards and specifications are updated as we learn more about these practices.

The second is the Iowa Certified Municipal Stormwater Professional series of webinars.  The Certification program was developed for those directly responsible for implementing a municipal MS4 permit.  However, all staff could benefit from the information included.  There are nine webinars in this Certification program, spanning close to five hours, which can be covered at your own pace.  For those interested in Certification, there is an exam.  This training is FREE for ISWEP members.

Patent Troll Update

We’ve been involved with the patent troll issue for quite some time and there was a victory this wee – the Supreme Court issued its ruling in TC Heartland that will have a significant impact on the way patent cases are heard and tried in the US. The court ruled unanimously (with Neil Gorsuch recusing himself, as he wasn’t present for the oral arguments) that a domestic corporation only “resides” in its state of incorporation for purposes of the patent venue statute.  This means that a company can only be sued in the state where it is incorporated or where it has an established place of business. Today’s ruling does not address at all what this last phrase means, and some companies who have places of business in the Eastern District of Texas can likely still be sued there. Nonetheless, the ruling is a victory for small businesses and patent reform advocates in the short-term, and will make it far more challenging for patent trolls to bring suit in plaintiff-friendly locales.

That said, there have been rumors that if the court rules as it just did, those on the other side could push for venue legislation to weaken protections for businesses trying not to be dragged to the Eastern District. Looking ahead, UFPR will need to stay on the lookout for any potentially harmful legislation and be ready to push back against it to protect this recent legal victory.

Non-Canadian Softwood Lumber Imports at 10 Year High

In a positive development for home builders, lumber consumers and housing affordability, U.S. softwood lumber imports (excluding shipments from Canada) hit a decade high in the first quarter. European suppliers – including Austria, Germany, Sweden, Finland, the Czech Republic, Russia, Lithuania, Estonia, Latvia and Romania – accounted for nearly all the increase.

This is significant, given the ongoing lumber trade dispute between the U.S. and Canada and the fact that U.S. has recently imposed countervailing duties averaging 20% on Canadian lumber shipments into the U.S.  NAHB is leading the fight against these duties, which will raise the cost of housing for millions of American households.

Last year, 33% of the softwood lumber used in the U.S. was imported, and more than 95% of those imports came from Canada.  Since the U.S. must import lumber to meet the nation’s needs, NAHB is working to boost domestic production by urging policymakers to increase timber sales from publicly owned lands and making more federal forest lands available for logging in an environmentally sustainable way.

We also continue to seek out new suppliers to reduce reliance on Canadian lumber imports and ensure home builders can access a reliable, steady supply at affordable prices.  This increase in non-Canadian lumber imports can help to mitigate the artificial price hikes resulting from tariffs on Canadian lumber.

While lumber prices remain volatile, prices have broadly declined recently, led by a 4% drop in Southern Yellow Pine prices last week. Further, the past three weeks have seen some SPF (spruce, pine and fir) and Southern Yellow Pine products registering price declines of more than 10%.