Weekly Update: December 21, 2017

Iowa Party at IBS

As of 12/20, we have 360 Iowans registered for the International Builders Show in Orlando, up about 40 over last year.  We will once again gather with our sister state HBA’s from Minnesota and North Dakota for a reception on Tuesday, January 9, 2018 from 5:00-7:00 p.m. at the Rosen Centre (9840 International Drive).  We will gather in Salon 9 and 10.  An invitation will be sent out next week, or just email HBAI EO Jay Iverson right now with your reservation(s).

Cool Skilled Trades Efforts at IBS

NAHB and the National Kitchen & Bath Association (NKBA) are ramping up efforts to narrow the skilled labor gap by kicking off the second year of the This Old House Generation Next and the SGC Horizon Skilled Labor campaigns to encourage and empower young people to join the skilled trades.

During Design & Construction Week, the co-location of the NAHB International Builders’ Show and NKBA’s Kitchen & Bath Industry Show (KBIS), the associations will host several events supporting the initiative.

NAHB will co-host a Jan. 9 event with This Old House and SGC Horizon in the Professional Builder Show Village, just outside the Orange County Convention Center.  From 4-5 p.m. Jan. 10, the NKBA and KBIS will co-host a ‘Beers for Trade Careers’ fundraising event with This Old House and its television personalities in The Backyard.

All dollars raised from donors that week will go to the Skilled Labor Fund, an industry-wide effort to raise funds to address the shortage of skilled labor entering the residential construction market.

The This Old House crew will be in attendance during Design & Construction Week to support and raise awareness for the Generation Next campaign.  During the Design & Construction Week opening ceremonies on Jan. 9, This Old House master carpenter Norm Abrams will speak to builders, designers, contractors, architects and manufacturers about why the skilled labor gap is so wide and how to bridge it.

“Raising awareness of the building trades as a rewarding career path and mentoring a new generation of tradespeople has been an extremely gratifying experience this year,” said Abram. “I’m looking forward to continuing our effort to reinvigorate interest in our industry among young people and closing the skilled jobs gap.”

The NKBA is committing $10,000 in scholarship dollars to the effort, while also dedicating communications throughout 2018 through its skilled labor initiative aimed at changing traditional perceptions about vocational careers. NAHB and SGC are each contributing an additional $5,000 to the fund.

“Addressing our industry’s labor shortages is the No. 1 issue for NAHB members,” said NAHB CEO Jerry Howard. “Joining forces with our trade partner organizations on this shared initiative allows us to direct even more focus on reaching all sectors of the industry and work together to build the future workforce of the residential construction industry.”

“Closing the skilled labor gap is critical to the future health of our industry,” said NKBA vice president of industry relations Suzie Williford. “Without an army of skilled tradesmen and women, all construction projects will take much longer and cost much more. Design & Construction Week is the perfect place to bring attention to the career opportunities in a growing industry for well-paying trade professions, and avoiding the burden of college debt.”

A silent auction Jan. 9-10 will feature products and experiences donated by brands supporting the This Old House Generation Next campaign to raise even more funds and reach more industry professionals. Brands looking to donate products can contact Claudia Jepsen. Visitwww.SkilledLaborFund.org to learn more.

Final Tax Reform Bill Did Help Housing, Thus Supported

House and Senate conferees ultimately produced a final conference report on the Tax Cuts and Jobs Act, tax reform legislation that passed this week. After significant improvements made during the legislative process, and due to the robust engagement efforts of NAHB and its membership, NAHB supported this final tax bill. We believe it will help middle-class families, maintain the nation’s commitment to affordable housing and ensure that small businesses are treated fairly relative to large corporations. Lower tax rates and a fair tax code will spur economic growth and increase competitiveness, and that is good for housing.  An overview of the Tax Cuts and Jobs Act, with all changes taking effect for the tax year starting Jan. 1, 2018:

  • Mortgage interest deduction. Retains the mortgage interest deduction and the deduction for second homes, but reduces the mortgage interest cap from $1 million to $750,000.
  • State and local property taxes. Allows taxpayers to deduct up to $10,000 of state and local taxes, including property taxes and the choice of income or sales taxes.
  • Capital gains exclusion. Maintains existing law that allows home owners to exclude up to $250,000 (or $500,000 for married couples) in capital gains on the profit from the sale of a home if they have lived in the house for two of the last five years.
  • HELOC. Eliminates the deduction for interest on home equity loans.
  • Private activity bonds. Retains private activity bonds (PABs), which will enable the Low Income Housing Tax Credit to maintain its effectiveness as the most indispensable tool for the production of affordable housing. Without PABs, we would face the loss of more than 788,000 affordable rental units over the next decade.
  • Alternative Minimum Tax. Eliminates the Alternative Minimum Tax (AMT) for corporations and increases the AMT exemption amounts and phase-out thresholds for individuals.
  • Individual tax brackets. Retains seven tax brackets, with rates ranging from 10 percent to 37 percent. This will provide tax relief for individuals and small businesses and represents a tax cut for most taxpayers.
  • Estate tax. Doubles the estate tax exemption.
  • Carried interest. Retains existing carried interest rules, but assets must be held for three years.
  • Pass-through deduction. Allows most taxpayers with pass-through income to deduct 20 percent of that income based on wages or on wages plus a capital element.
  • Business interest deduction. Provides the taxpayer a choice of making a one-time election for a deduction limited to 30 percent of adjusted gross income; or for real estate, a 100 percent deduction for business interest, but with certain trade-offs.
  • Like-kind exchanges. Preserves the benefit for real estate investors to make tax-free exchanges of property, commonly referred to as “like-kind” exchanges.
  • Multifamily depreciation. Gives the taxpayer the choice of taking 27.5 or 30 year depreciation, depending on how they elect to treat their business interest.
  • Individual tax provision sunsets. Almost all individual tax elements – mortgage interest, state and local property taxes, individual brackets, etc. – expire at the end of 2025. Unless Congress acts, starting in 2026 these modifications will revert back to the tax code as it exists today in 2017.

NAHB was at the forefront of the tax reform debate and we earned clear victories on the real estate exception to the business interest deduction, second homes, private activity bonds, the capital gains exclusion, and many other provisions. It was a key vote and should have no problem getting to President Trump’s desk before Christmas.

Iowa at Top of Single-Family Permit Growth

According to the Census Bureau’s Building Permits Survey (BPS), over the first ten months of 2017 the total number of permits, which included single-family and multi-family, issued nationwide on a not seasonally adjusted basis reached 1,070,750. This is 6.8% ahead of its level over the first ten months of 2016, 1,002,139.

These data are taken from the Builder Permits Survey (BPS) instead of the Survey of Construction (SOC). The SOC is the source of the monthly New Residential Construction release and it shows that total permits over the first ten months of the year totaled 1,067,200, 5.8% ahead of its level the same period in 2016, 1,008,800. The SOC does not provide residential construction information at the state and local level.

Compared to September 2017, all the states and the District of Columbia saw single-family permit growth with Iowa posting the largest increase at 18.4%.

Stay safe out there!  This was in Minnesota, what could go wrong?

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