Weekly Update: August 31, 2017

We had an excellent meeting with Congressman David Young last Thursday at the HBAI office.  It’s always great to cover a wide range of topics with him and he is highly supportive of our Federation and the industry.  From left to right – Dan Knoup, Rich Fitch, Keith Butz, Don Beal, LaDonna Gratias and Congressman David Young.

Q2’17 Rebate Claim Deadline Ends Tomorrow!

As a member, you can claim your rebates for any completed residential addresses from April 1 – June 30, 2017 that used any of the 50+ Manufacturer brands.  The deadline has been extended to tomorrow – Friday, September 1, 2017.  Check it out by clicking here.  It’s easy money and with no effort covers your Federation annual dues.

Interested in Volunteering?

We are starting to plan for 2018 already and we need you to be a part of our state organization.  If you’re interested in any capacity, please contact HBAI Executive Officer Jay Iverson.  It’s a great group, we have fun and are in the early stages of many awesome changes to our planning and service offerings.

IBS Registration August Discount Ends Today

The 2018 NAHB International Builders’ Show® returns to the Orange County Convention Center in Orlando, Fla., Jan. 9-11. IBS will again co-locate with the National Kitchen & Bath Association’s Kitchen & Bath Industry Show® for the fifth annual Design & Construction Week®. IBS registrants can take advantage of great August-only registration discounts.

Iowa vs. Iowa State BUILD PAC Tailgate

On Saturday, September 9, we will be tailgating at the Iowa vs. Iowa State football game in Ames.  It will be at Jack Trice Stadium in lot D4 from 9-11:00 a.m.  There will be a drawing for two sets of two tickets to sit in the Jack Trice Club for BUILD-PAC members.  For more information, email BUILD-PAC Trustee Rich Fitch or HBAI Executive Officer Jay Iverson.

Iowa Skilled Trades Hotel Block

If you’re planning to attend our Mike Rowe event September 28 and need a hotel room, we have a block at the Des Moines Marriott Downtown for $124 per night.  Here is the reservation link to make online reservations.  You must make your reservation by September 7 before the block is released.

Canadian Softwood Lumber Summit

NAHB CEO Jerry Howard (far right in photo) participated in a forum on Canadian softwood lumber last week at the Canadian embassy in Washington.  It included Canadian Ambassador David MacNaughton and special softwood lumber envoys from the Canadian provinces. Howard said that he can’t overstate the importance of solving the U.S.-Canadian softwood lumber dispute in which the U.S. Commerce Department has imposed duties averaging 26.75% on Canadian lumber shipments into the U.S. The tariffs are harming housing affordability and forcing builders to look overseas to Germany and Russia to meet demand. Howard added that it is important that Canadian provinces are working with NAHB to find an equitable long-term solution in lumber trade that provides a steady supply of lumber at a reasonable price.

Energy Efficiency Planning Meeting Last Week

Lots of people participated in a collaborative meeting last week to provide IPL with feedback. You may click here to find the presentation that was discussed and distributed by paper at the meeting. If you have any additional feedback for IPL, please provide a response by September 15, 2017.  It will continue to be refined and more information will follow in the future.

Almost 80,000 Starts Last Year Were Tear-Downs

NAHB economists estimate that about 10.2% of single-family starts in 2016 – roughly 79,300 homes – were tear-downs. That is significantly higher than the 55,200 tear-downs that NAHB reported in 2015, when they accounted for about 7.7% of single-family production.

DHS to Allow 15,000 Additional H-2B Guest Worker Visas

The Department of Homeland Security announced in July that it will allow an additional 15,000 H-2B temporary worker visas to be issued during this fiscal year, which ends Sept. 30. The H-2B program allows employers to hire temporary foreign workers for seasonal, non-agricultural positions. In past years, roughly half of the visas have gone to landscaping businesses.

New Start Ups Average $5k to Begin

Of 638,839 construction firms surveyed by the U.S. Census Bureau in its Annual Survey of Entrepreneurs (ASE), 20.1% report they raised less than $5,000 dollars to begin commercial activity.  The ASE is a relatively new information source released by the U.S. Census Bureau this year. It collects economic and demographic information on businesses and business ownership in all major industries, including construction. One of its advantages is that it provides statistics on finances and funding, like the start-up capital.

The ASE does not provide detail within the construction industry. Home builders and remodelers are lumped together with firms that build non-residential buildings, highways, and bridges; as well as with specialty trade contractors (roofers, electricians, drywall installers). As a previous study has shown, over two thirds of construction establishments are specialty trade contractors, which may help explain why a substantial percentage of construction firms require relatively little start-up capital.

The median amount of capital construction firms need to start their businesses is $33,529, which is $43,000 less than the median amount used by all industries, $77,227.  Exhibit 1 shows how, as the ranges of start-up capital increase, the percent of construction firms reporting steadily decreases, while the percentages of all industries are more evenly distributed.

Personal and family savings of the owner(s) of a business are by far the most common source of start-up capital for American firms. Exhibit 2 displays how these savings represent nearly two thirds of all start-up capital sources at 63.9%.

The sources of start-up capital for construction businesses are similar to the sources used by businesses in other industries, except for bank loans. The lower share of construction firms that use bank loans to start their businesses represents a possible barrier to entry. However, this discrepancy may be explained by the lower amount of start-up capital needed by many businesses in the construction industry. With a fifth of these firms raising less than $5,000 in start-up capital, bank loans may not be necessary if family and personal savings can cover the initial investment costs.

The contents of this post represent only a fraction of the data available in the 2014 Annual Survey of Entrepreneurs. For more information and statistics about construction businesses from the ASE, please read NAHB’s Special Study on their website HousingEconomics.com.

   Mike Farr (far right) is very generous in donating steak fry’s to auction off for our HBAI Educational Corporation.  Proceeds are used for scholarships to students entering the building trades.  Last Friday we were able to put one together for Hubbell Realty – somehow Mr. Farr managed to get Jeremey Frease (Cascade Manufacturing – orange) and Ben Richter (Beisser Lumber Company – blue) to cook the steaks and add cheese.  Sort of like a Tom Sawyer thing…

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