HBAI Newsletter 5.31.18

    NAHB leaders listen to Vice President Mike Pence in the Indian Treaty Room of the Old Executive Office Building in DC last week.  We did not have any Iowans there, but our counterparts from other parts of the country were impressed with their meetings with the Vice President and with HUD Secretary Ben Carson.  This administration has pledged to work with us on regulatory reform, workforce development and softwood lumber.

Regulatory Relief a Top Priority

On May 23, HUD Secretary Ben Carson spoke to the NAHB Executive Board at the National Housing Center and reaffirmed the administration's support for regulatory reform. Noting that regulations “act as a stealth tax” on all American businesses, Carson said that one of President Trump's first executive orders was the “2-for-1” rule which stipulated that for every new regulation that is created, two must be eliminated.

“The president is very committed to your industry and understands you need and want regulatory relief,” said Carson. “At HUD, we think the time is ripe to conform to the president's agenda on eliminating or streamlining regulations and create a more coordinated regulatory environment.” Addressing other topics, the HUD secretary said: It is his hope that housing finance reform will be back on the congressional agenda for next year.

HUD's disaster response is moving quickly, and all $35 billion in the Community Development Block Grant – Disaster Relief Program has been allocated. The agency is making it a top priority to modernize FHA technology.

“Home building is the bedrock of this country,” Carson said. “It is a major mechanism for families to accumulate wealth. Thank you for your dedication for making the American dream come through for so many people.”

June is National Home Ownership Month

The home building industry celebrates National Homeownership Month in June, which provides us with the perfect opportunity to highlight the benefits of homeownership and encourage recognition of the vital role that homeownership plays in our nation's economy.

Generations of Americans have known that owning your home means owning your future. Buying a residence is the single biggest investment most of us ever make. In fact, 95% of home owners say they are happy with their decision to own a home. Why should that surprise anyone? For more than a century, Americans have counted on their homes to leverage equity and provide for their children's' education, for retirement and innumerable additional benefits. The combined power of millions of Americans living that future-their dream-is a major driver of the U.S. economy.

Generations of enlightened American leaders have made homeownership an explicit national goal, starting in 1913 when the mortgage deduction was enacted as part of U.S. income tax system. The housing industry's value to our economy is greatest when times are toughest: Surging housing starts regularly lead our economy out of recession.

It's time for policymakers to recognize that our economy will not fully recover unless and until the housing industry returns to robust health. Congress and the Administration must refocus reform efforts on fixing what is genuinely broken. They must steer clear of policies that would effectively remove the keystones of homeownership, for doing so would cause housing, the economy, and the American dream to collapse. Congress and the Administration would be wise to take a page from the medical profession: “First, do no harm.”

Remodeling Estimates for 2018

The new estimates are for calendar year 2018 and include the number of owner-occupied homes, the number with improvement spending during the year, the average spending per improved home, total spending on improvements within the zip code, and the drivers of remodeling activity used to generate the spending estimates, in each of over 26,000 5-digit zip code areas across the country.

The new estimates show that, in the average zip code, owners who improve their homes in 2018 will spend $7,893 per home; but, as you would expect in a country as large as the U.S., there is considerable variation.

Improvements to Owner-Occupied Housing 2018 Estimate for Iowa

Owner-Occupied Homes: 900,004

With Improvements in 2018: 269,922

Spending per Improvement: $7,880

Total Spending in State: $2,127 Million

Congressman Blum, King, and Young Join Loebsack in Signing Softwood Lumber Letter

Last week we reported that Iowa Second District Congressman Dave Loebsack was the only Iowa House member that had signed on to our softwood lumber letter directed to Secretary Ross and Ambassador Lighthizer. Since that announcement, Congressmen Blum, King, and Young have signed the letter too. You can still make a difference as well.

Tariffs on imported Canadian softwood lumber are raising production costs and harming home buyers. With prices above $560 per thousand board feet, we need a solution to protect the home building industry and consumers. Please visit  http://www.capitolconnect.com/builderlink/ to ask your member of Congress to sign onto a bipartisan letter urging the Trump administration to reach a lumber trade solution with Canada.

Iowa Metro Building Permits with Valuations Compared

We'll try to provide this list as it becomes available each month – basically the metropolitan statistical areas from the US Census Bureau. The first number is the total housing units year to date each month and the second number is the rounded valuation. It's a nice snapshot comparing it to the prior year.

California Mandates Solar for All New Residential Construction

California has long pushed the envelope on energy and environmental policies. Right now, people are abuzz with the California Energy Commission's proposed requirements for the the state's 2020 energy code, which includes mandates on solar energy generation for all new residential construction beginning in January 2020. The ruling applies to most single-family homes as well as multifamily buildings up to three stories. Options to meet the mandate will include installing solar panels on individual homes or joining a community solar system.

The 2020 code will also require additional insulation and increased window and appliance efficiencies. The California Building Standards Commission typically accepts energy commission recommendations without change.

“It will be some time before we find out whether mandating solar panels for homes in California is a good idea,” said Craig Drumheller, NAHB Assistant Vice President of Construction, Codes and Standards. “The high price for electricity and excellent solar resources throughout most of the state make California one of the better states for this experiment to take place. However, there is a concern that a large percentage of the homes with solar systems will not provide a positive cash flow for the home owner, especially outside of California and in unsubsidized environments.”

However, the new requirements are still likely to increase the price of a new home. And the banking and appraisal industries' limited awareness of the value of green building practices and how they affect the “total cost of ownership” benefits may make it harder for buyers to secure mortgage loans for homes at the higher initial price, even though they will save on monthly utilities.

US House Passes Prison Reform Bill for Vocational Training

This was something that we worked on during the Iowa legislative session – training prisoners in the skilled trades. So the US House, with a 360-59 vote, overwhelmingly approved NAHB-supported legislation that would provide vocational training for prisoners in an effort to reduce recidivism rates.

In a letter of support for the FIRST STEP Act (H.R. 5682) that was sent to the House prior to the vote, NAHB cited the benefits of similar training programs administered through the Home Builders Institute (HBI), the association's educational arm.

For example, in Sheridan, Ill., HBI is training 150 individuals per day at a medium security facility in basic carpentry, masonry, electrical, plumbing, and construction technology skills. Upon completion of the 24-week, rolling admission program, the inmates earn several important certificates to help them find work upon their release.

Other state and local HBAs have similarly pursued their own successful partnerships with area prisons to train incarcerated individuals for a career in construction when they return to their communities. NAHB believes that the FIRST STEP Act will help address construction's labor shortages while providing a second chance for a bright future and a meaningful career.


   HBAI Executive Officer Jay Iverson's son Tanner is in the Des Moines Area Community College Building Trades Program and when they arrived at the job site last Tuesday, they found a cleaned out trailer.  Nearly $30k worth of tools were stolen, setting the program back until replacements can be obtained.  So if you hear of a pile of used pneumatic guns being sold, the serial numbers are all with the police department.  Sad that this happens.