MARCH 2021 NEWSLETTER To promote, educate and advocate for the Residential Building & Remodeling Industry; providing resources that benefit industry professionals and consumers in the communities we serve. Gold shovels in hand as our “dig”nitaries perform the ceremonial ground breaking at the Showcase Home site at Windsor Creek in O’Fallon. Over 50 members joined us for the milestone event on the warm sunny day. From left to right: Ryan Butler– HBR President with Remington Properties, Jeff Schmidt- HBR Showcase Home Committee Chair with RLP Development , Mike Needles – HBR Showcase Home General Contractor with C.A. Jones, Inc., Matt Patterson with D&F Home Builders, Herb Roach– Mayor of O’Fallon WHATS INSIDE Students for Hire We’ve heard your work force concerns and have resources to help: Tax Credits Mentoring Grants Interview Opportunity Lumber Cost Evolving Crisis Updates Appraisals Challenges Strategy Upcoming Events March 25 - Anybody’s Game, Networking with a Swing Apr 22 - PWB Power Women Luncheon & Earthworks Facility Tour Showcase Home Bid Updates Workforce: Mentoring program & Students for Hire PWB Scholarship Program Sponsorship Membership Announcements New Home Start Permit Report year end 2020 ILMDA Announces Lumberman of the Year NAHB News: Lumber Prices & Appraisals Independent Contractor Rule Delays NAHB Member Savings Program at a glance Illinois Tax Credit Program for Industry Employers Illinois Criminal Justice System Speaker of the House musical chairs Page 1
Presenting sponsors Ryan Butler, HBR President with Remington Properties, prepares to commence the ceremony. Tracy Butler leads the crowd in the Pledge of Allegiance. Good friends Tricia Buehne with First Mid Bank & Trust and Tom Patton with C.A. Jones, Inc. Jessica and Dean Johnson with D/Knows Exterior Construction Ryan Butler introduces Mayor Roach that shares a heart felt and amazing invocation. The crowd lined up on the street ready for the moment we’ve all been waiting for. That magic moment of the dignitaries break ground! Participants applaud as the ceremony ends and head over to Far Oaks Golf Club for fellowship Page 2
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Dean & Jessica Johnson - D/Knows HBR Members are picking up where they left off and enjoying time together Exterior Construction, Steve Macaluso - Halloran Construction, Sonny Heimer - St. Clair Stair , Mark Halloran - Halloran Construction, Tracy Butler - HBR & Herman Wilson - Ambassador Floor. Mayor of O’Fallon Herb Roach and Tracy Butler, HBR Executive Officer Mike Rathgeb with Spencer Homes, Beth Jacob with Jacob Sunrooms, Exteriors & Baths, Lisa Worman with Blind Quest, Ryan Butler with Remington Properties, and Jeff Schmidt with RLP Development & Jeanine Nadler Mike Needles with C.A. Jones, Inc. and Clark Maurer with ABC Supply checking out the Showcase Home floor plan David Frazier with C.A. Jones, Inc., Herman Wilson with Ambassador Floor Co., Velvet Mitchell with C.A. Jones, Inc., and Aaron Klemme with Klemme Construction Bridgette Connolly with C.A. Jones, Inc., Tricia Buehne with First Mid Bank & Trust, Jennifer Hays with C.A. Jones, Inc., and Stephanie Tesreau with C.A. Jones, Inc. Tracy Butler with HB&R, and Laura Schmidt, Cathy Miller, and Kathy Kuntz with Custom Marble Page 4 HBR President, Ryan Butler with Remington Properties and Jennifer Hays with C.A. Jones / HBR Staff
The HBR received an overwhelming amount of interest in our Showcase Home with numerous bids for the same skillset/materials. The bid review process was done with only seeing the scope of work/materials and pricing to ensure that the provider was not a factor. The committee was diligent to determine the best opportunity for the Showcase Home to be the most cost-efficient, well-built home within budget limitations. The bids received for donations of products and labor has been amazing that will maximize the bottom line for the HBR, giving us the ability to keep providing quality service and exciting events for our members. Appliances: AUTCO Home Appliance Cabinets: Wilke Window & Door / LifeStyle Carpentry: HBR UCC Closet Shelving/Mirrors: Martin Glass Concrete Material: Red-E-Mix Doors: Wilke Window & Door Drywall Material: R.P. Lumber Drywall Labor: E.D.C. Drywall Electrical Fixtures: Light Brite Electrician: CMC Electric Engineering/Survey: Thouvenot, Wade & Moerchen Finish Trim: HBR UCC & Fulford Home Remodeling Fireplace: Light Brite Floor Plan: Spencer Homes Flooring: Ambassador Floor Garage Doors: Cardinal Door General Contractor: C.A. Jones, Inc. Grading: C.A. Jones, Inc. Granite: Granite Heroes Gutter Materials & Labor: Germantown Seamless Guttering Hardware: Wilke Window & Door HERS Rater: Goley Insulation House Wrap: Hallmark Building Supplies Insulation: Goley Insulation Insurance: Yaekel & Associates Interior Design: Glorifying Design & Staging Lender: FCB Banks Lighting: Light Brite Lot: D&D Home Builders Lumber: R.P. Lumber Marble: Superior Home Products Paint: Sherwin Williams Plumbing: A Royal Flush Plumbing Roofing Materials: R.P. Lumber Roofing Labor: D/Knows Exterior Construction Sewer Labor: Halloran Construction Shiplap: Eagle Flooring Siding Material: Arrowhead Building Supply / ProVia Stairs / Railing: St. Clair Stairs Steel Beam: Liese Lumber Stone Materials: Earthworks Title: Illinois Title & Escrow TJI Floor Truss System / Subfloor: Liese Lumber Trusses: R.P. Lumber Waterproofing: Champion Waterproofing Window Treatment: BlindQuest Windows: ABC Supply The HBR is looking for the following supplies/labor bids: Concrete Labor Foundation/Footing Framing Labor HVAC System Landscaping Siding Labor Stone Labor Page 5
Lumber prices have been extremely volatile over the past year. They peaked above $950 per thousand board feet in mid-September, fell to around $550 per thousand board feet in mid-November and have surged since. By mid-February, prices hit an all-time high, surpassing $960 per thousand board feet. When prices began their historic rise last spring, NAHB reached out extensively to the Trump administration, members of Congress and lumber mills calling for prompt action to address shortages in the lumber supply chain and soaring lumber prices that are harming your businesses, the housing sector and the economy. NAHB also urged swift action on the trade front, which ultimately help lead to a more than 50 percent tariff reduction on Canadian lumber coming into the U.S. shortly after the Thanksgiving holiday. With the new Biden administration and Congress in place, we are developing short, mid- and long-term strategies to address lumber price and supply issues. This effort is broad-based: • Our Government Affairs team will engage in Capitol Hill meetings, a grassroots campaign and administration briefings. • Communications will focus on a media campaign, a social media push, member testimonials, open letter ads and a stakeholder event. • Economics will quantify the economic impact of higher prices on the industry and economy and engage in industry surveys. • Legal is looking at antitrust issues, Canadian outreach and exploring whether other foreign nations can send more lumber to the U.S. We have already started to implement parts of this comprehensive plan – including a holiday campaign calling on lumber mills to increase production to meet growing housing demand. Moreover, on January 29 a letter was sent to President Biden urging the administration to play a constructive role in mitigating this growing threat to housing and the economy. NAHB called on the White House to urge domestic lumber producers to ramp up production to ease growing shortages and make it a priority to work with Canada on a new softwood lumber agreement. We also urged the President to ask the Commerce Department to investigate why lumber production remains at such low levels during a period of high demand. NAHB is redoubling its efforts in this new political climate and continues to work on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price. Page 6
What Builders Should Know About Appraisals and Lumber Prices Lumber prices continue to rise, with pricing as of midFebruary reaching new record highs. Other materials, such as gypsum and ready-mix concrete, are also experiencing price volatility. In addition, components such as interior doors, shingles, cabinets and others are experiencing significant delays in delivery that make it more challenging for builders to construct homes efficiently and on time. As builders struggle with these front-end issues, they are also experiencing additional challenges on the backend, as appraisal standards make it difficult to recognize the full impact of sharp increases in the cost of building materials. In addition, appraisers often have limited access to information to accurately assess the value of a home. “The appraisers use market value, so if we sold a house three months ago and just completed a new build with higher material costs, they only give a market value of the house that sold three months ago,” explained James Blyth, an affordable housing spec builder in North Carolina. “In our situation the appraisal came in $10,000 lower than our asking price. Our price increase was to cover cost increases. It forced the buyers to come up with an additional $10,000 out of pocket to cover our cost increases. “We have 10 houses under construction right now that will be ready for early spring and summer occupancy,” he added. “Normally we would start marketing once the foundation is in the ground. I will not quote a price until we have all of our costs in.” Cost-Based Appraisals Better Reflect Rising Material Costs In order to best address these significant increases in the price of materials, it is important to understand that appraisers can incorporate three approaches to determine the value of a property: sales comparison, cost and income methods. Under the cost approach, the appraiser estimates what it would cost to rebuild or construct an equivalent structure. Because this component of property valuation considers the costs of materials used to construct the property, it is often very helpful in analyzing the value of a newly constructed home. It is also important that builders understand that it is acceptable — and extremely important — for a home builder to speak with an appraiser and provide all the information the appraiser needs to perform an accurate assessment of value. One item that has proven effective in assisting appraisers in considering material costs in developing new home valuations is an “appraisal binder.” An appraisal binder — which is given to the appraiser upon his or her arrival to the property — will provide the appraiser with a cost breakdown of all materials used in the construction of the home. This information will assist the appraiser in balancing the market value of the home with what it cost the builder in materials to construct the home. Keep in mind that the cost approach to value is always used in combination with the sales comparison approach — with greater weight or emphasis given to the sales comparison approach, per Fannie Mae and Freddie Mac guidelines. Builders should also incorporate existing home sales as comparables if there is a lack of new construction comps that can be used. One builder in Greenville, S.C., was recently able to utilize this appraisal approach for a spec home he was building. He had been able to successfully sell the same home recently for $711,000, but when he received the invoice for the lumber package on the new spec home, it was $56,000 higher than the home he had just sold. The initial appraisal for the new spec home was $711,000 — the same as the home he had just sold, but that had been built at a lower cost. When the builder revisited the value approach with the appraisal, he was able to secure a construction loan that reflected the increase in prices. In a recent listening session with Federal Housing Finance Agency (FHFA), NAHB suggested that more consideration be given to the cost approach to value new homes, particularly in rural areas where there may be few comps or sales to help produce a fair and accurate assessment of value. Visit nahb.org to learn more about the impact of rising material costs and understanding appraisal approaches. Page 7
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We have some great candidates for you from the Belleville High schools that are involved in trades courses for you to consider! • All students are currently in their Junior year, we have shared information about each students skills and interests below. • Keep in mind that you can talk to these students about full time summer work too! • Want to interview any of them? Let me know the student # listed below and I will share your contact information with their Counselor Student # 12-1E 12-2E 12-3E 12-4E Interest Electrical & Carpentry Electrical, Carpentry & Metal Working Carpentry, Finishing & Drywall Electrical & Foundation 12-5E 12-6E 12-1W 12-3W Blue Prints & Project Management Construction as a whole Construction as a whole Construction as a whole Skills Great GPA, strong math skills, taken intro carpentry, worked at construction company Great GPA, strong math skills, taken intro carpentry & engineering, laborer for landscaping company Good GPA, strong math skills, currently in advanced construction with exposure to carpentry, finishing, flooring and roofing. Works 40 hours weekly at fast food chain while in school. Good GPA, strong math skills, currently in advanced construction with exposure to carpentry, finishing, flooring and roofing. Works 40 hours weekly at fast food chain while in school. Strong GPA, struggled with remote learning. In 2nd construction course with knowledge of finish work, framing, general carpentry. Loves working with insulation and finishes. Lawn care business in the summer. Good GPA, strong math skills, currently in advanced construction with exposure to carpentry, finishing, flooring and roofing. Hard Worker. Great GPA, taken Construction class and Automotive class Great GPA, currently enrolled in Intro to Engineering/Design, currently works at Walmart. BELLEVILLE WEST INTERVIEW NIGHT THURSDAY, March 25 from 5p-7p If you are interested in attending complete this Apprenticeship Survey by Friday, March 12th You will receive event details and visit with students you are interested in that will have an application and prescreening done for you Page 11
Gov. Pritzker signed House Bill 3653, the controversial criminal justice reform bill that was passed in the early hours of the lameduck session, despite being opposed by nearly every law enforcement organization in the state. The new law empowers criminals by making it harder to arrest violent offenders and keep them off the streets. It also increases both costs and requirements on police departments, meaning that many communities would likely see cuts to their local police departments, higher property taxes, or a combination of the two. Many elected officials spoke out against House Bill 3653 prior to the signing. Sen. Plummer hopes that the General Assembly will be able to work in a bipartisan manner to pass some sort of a “trailer bill” or follow-up legislation that would fix many of the controversial issues with the new law. Page 12
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Regulatory Freeze for All Pending Regulations; Independent Contractor Rule Faces Delay The Biden administration has implemented a regulatory freeze for all pending regulations. Of note to the housing community, this action means that the U.S. Department of Labor’s final independent contractor rule that was put forth in the waning days of the Trump administration, and scheduled to go into effect on March 8, will be delayed at least until May 7. The Department of Labor has pushed back the effective implementation date of the independent contractor rule from March 8 to May 7 “to allow the agency “additional opportunity for review and consideration of the new rule.” NAHB believes the final independent contractor rule represents a positive step forward that would provide more clarity for employers to determine whether a worker is an independent contractor or an employee under the Fair Labor Standards Act. The regulatory freeze includes any rules before the Office of Management and Budget and those already ready for publication in the Federal Register. All pending regulations will need to be reviewed and approved by a Biden administration official before they can move forward. Federal agencies and departments are also asked to consider postponing for 60 days the effect dates of any rules that have already been published but have not yet taken effect “for the purpose of reviewing any questions of fact, law, and policy the rules may raise.” NAHB is monitoring the situation closely and will urge the Biden administration to allow the independent contractor rule to go forward as written following agency review of the policy. For more information, contact Alexis Moch or David Jaffe. Page 14
RENEWING MEMBERS A Royal Flush Plumbing - 3 years Arrowhead Building Supply - 14 years Cardinal Door - 3 years First Mid Bank & Trust - 2 years Mid Am Building Supply - 1 year Quality Installation & Home Improvement - 4 years Sherwin Williams - 5 years U.S. Bank Home Mortgage - 3 years Woods Basement Systems - 4 years REMODELERS COUNCIL First Mid Bank & Trust Klemme Construction PROFESSIONAL WOMEN IN BUILDING COUNCIL 1st National Bank of Waterloo Benchmark Title Company Jacob Sunrooms, Exteriors & Baths RP Lumber Shawn Hartmann Hometown Family Properties 2730 N Center Street Maryville, IL 62062 O: (618) 205-8595 hometownfamilyproperties@gmail.com www.renthfp.com Senator Jason Plummer named 2020 Lumberman of the Year by ILMDA The Illinois Lumber & Material Dealers announced Jason Plummer, VP of R.P. Lumber, 54th District State Senator and 2020 VP of ILMDA Board, as the 2020 Lumberman of the Year award at their annual event held virtually this year. The Lumberman of the Year award is the highest individual honor given in the Illinois retail lumber industry. Those who have been honored with receipt of thie award are individuals that have exemplified selfless dedication to the promotion of professionalism within the lumber industry. The Lumberman of the Year award is a peer recognition program and is given each year to a person that lumber dealers across the state are recognizing for years of serving the independent lumber dealers of Illinois. Jason is the second in his family to receive this award, as his father, Bob Plummer received the award in 2013. Page 15 NEW MEMBERS Robb Treat Bank of Hillsboro 2496 Troy Road Edwardsville, IL 62208 O: (618) 656-5804 C: (618) 304.3961 rtreat@bankhillsboro.com www.bankhillsboro.com
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MADIGAN AGAIN PICKS HIS SUCCESSOR AFTER FIRST ONE LASTED 2 DAYS Brad Weisenstein Editor The quick implosion of Mike Madigan’s choice as his replacement to represent the 22nd Illinois House District was quickly followed by a new choice: Angelica Guerrero-Cuellar, who was sworn in Feb. 25. Guerrero-Cuellar said she plans to be a full-time state lawmaker, quitting her job managing outreach work for COVID-19, including contact tracing. She is the daughter of immigrants and her husband is a Chicago police officer. She was one of the 10 candidates from whom Edward Guerra Kodatt was initially selected by Madigan. Madigan refused to discuss the Kodatt debacle after Guerrero-Cuellar’s selection. “She’s been anchored in the community,” Madigan told the Chicago Tribune. “She’s had good experience and understanding of the needs and the desires of the people of the Southwest Side.” Madigan on Feb. 21 first chose Kodatt, a 26-year-old worker from the constituent services office he shares with Chicago Ward 13 Ald. Marty Quinn. Then on Feb. 23 Madigan asked Kodatt to resign after “questionable conduct” allegations. Madigan has refused to detail the allegations, but Kodatt resigned on Feb. 24. Despite serving only two days, Kodatt is entitled to a month’s salary as a lawmaker – $5,789. He has been urged not to seek the money by several politicians and Illinois Comptroller Susana Mendoza used the situation to call attention to her push that lawmaker pay be pro-rated for time actually worked to avoid abuse. That said, three people are now entitled to February pay for the same state representative seat: Madigan, Kodatt and GuerreroCuellar. Mendoza placed that potential cost at $17,366. Madigan quit as representative of the district surrounding Midway Airport Feb. 18, a month after he was ousted as House speaker. He served in the House for 50 years and as speaker for 36. His resignation as chairman of the Democratic Party of Illinois came Feb. 22 – a day after he said he saw no need to resign and nearly four months after he ignored demands by Illinois Gov. J.B. Pritzker and U.S. Sens. Dick Durbin and Tammy Duckworth to quit as party chair. Madigan’s name and corruption were tied to Democratic causes and candidates, causing significant losses on Election Day in 2020. Madigan was implicated in a more than $1.3 million bribery scandal involving Commonwealth Edison, which told federal prosecutors it was buying Madigan’s influence as House speaker. U.S. Attorney John Lausch, who led the ComEd and Madigan probe along with a slew of other public corruption investigations in Illinois, may remain in his spot for some additional time after appeals by Durbin and Duckworth that he not be asked to quit along with all Trump-era appointees. A day after news that Lausch would stay, a longtime political operative, Roberto Caldero, was indicted for bribery involving a massive contract with Chicago Public Schools and a $100,000 bribe to get a street and park renamed for a business owner’s family members. Prosecutors said Caldero was also involved in getting Viagra and massage parlor visits for former Chicago Ald. Danny Solis, who was wearing a wire for the FBI and capturing conversations with fellow politicians. Madigan will begin collecting his $7,100-a-month pension from his House service in March. His monthly pension benefit will then jump to $12,600 a month a little more than a year later, thanks to a pension sweetener Madigan helped pass that is no longer available to lawmakers. The General Assembly Retirement System has only 17% of what it will need to pay Madigan and other lawmakers’ retirement benefits. The system of cronyism and corruption that kept Madigan in power for so long has been costly for Illinoisans. It kills at least $556 million in economic growth every year, which between 2000 and 2018 took $830 in additional income from every Illinoisan. A new report ranking federal corruption convictions per capita named Chicago as the most corrupt city in the nation and Illinois as the No. 2 state, behind Louisiana. The biggest headline-grabbing corruption revelations of 2019 were not even included in the latest federal data, the report released Feb. 22 by the University of Illinois at Chicago stated. Since the federal data was first collected in 1976, Illinois has averaged nearly a conviction a week, and that is just for federal prosecutions. The total is 2,152 individuals convicted of betraying the public trust. Madigan leaves Illinois with a culture of corruption that is the worst of the nation’s 10 largest states and a pension crisis that is the worst in the nation measured by the state’s debt-torevenue ratio. It got that way thanks largely to his system of political cronyism and his alliance with public sector unions, trading generous benefits for campaign support. Madigan’s legacy of pension and corruption problems will continue unless Illinois state leaders champion pension reform, ethics and budgeting reform. Page 17
OFFICERS P L A T I N U M President, Ryan Butler Remington Properties 1st Vice President, Mike Lippert Liese Lumber 2nd Vice President, Mike Needles C.A. Jones, Inc. Associate Vice President, Mindy Shafer Wells Fargo Home Mortgage Treasurer, Scott Gruber First Mid Bank & Trust Secretary, Jerry Yaekel Yaekel & Associates, Inc. Immediate Past President, Aaron Klemme Klemme Construction DIRECTORS G O L D S I L V E R Allen Roofing & Siding B R O N Z Page 19 Jason Klein - Ameren Illinois Barry Buchman - Arrowhead Building Supply Matt Warren - Carrollton Bank Coy Mullenix - CMI Construction Michelle Rauk - Eagle Flooring Mark Fulford - Fulford Construction John Snapat - Fulford Home Remodeling Steve Macaluso - Halloran Construction Jon Elder - Henges Interiors Robert Dee, Jr. - Homes by Deesign, Inc. Scott Blumberg - Huntington Chase Ken Diel - Kerber, Eck & Braeckel Mike Lippert - Liese Lumber Josh McDermott - J.T. McDermott Remodeling Contractors Derek Brandmeyer - Light Brite Jason Huelsmann - New Tradition Homes David Padgett - Padgett Building & Remodeling Ron Padgett - Padgett Building & Remodeling Scot Lehr - Quality Installation & Home Improvement Jeff Schmidt - RLP Development Sue Schultz - Sandberg Phoenix & von Gontard P.C. Mike Rathgeb - Spencer Homes Mark Vogt - Vogt Builders, Inc. Jim Vernier - Village of Shiloh
6100 West Main Street Maryville, IL 62062 Phone: 618-343-6331 E-mail: tbutler@hbrmea.org Web: www.hbrmea.org
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