Oc tober 2022 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. The Home Builders and Remodelers Metro East Association and the Home Builders Association of St. Louis came together to provide an amazing Riverboat Cruise down the Mississippi River that connects our two great associations. With the addition of our two amazing speakers from NAHB, Judy Dinelle & Alicia Huey, we were destined to Rock the River. WHATS INSIDE Upcoming Events: NEW 2023 Annual Raffle! Oct. 6 Membership Social Oct. 20 Lunch with Belleville Mayor Gregory Nov. 3 Trivia Night Jan 31-Feb 2, 2023 NAHB IBS 2023 Home Show Information & Floor Plan 2023 RAFFLE WIN $500 WEEKLY Promotions: Remodeling Excellence Awards 2023 Membership Directory Rates 2023 Annual Sponsorship New Home Permit Report MORE INFO ON NEXT PAGE Industry News: Sexual Harassment Prevention Training Illinois Secure Choice Savings Program Act IPI - Amendment 1 works against Union interests NAHB - Addressing Affordability Crisis NAHB - Rising Rates Watch NAHB - Building Code Voting Guide Page 1
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Help Shape Building Codes with NAHB Voting Guide Building officials, inspectors and other governmental members of the International Code Council (ICC) will soon begin voting on proposed changes to the International Residential Code (IRC). Changes to the International Existing Building Code (IEBC), the structural provisions of the International Building Code (IBC), and the administrative provisions of all ICC model codes are also under consideration. NAHB has published a voting guide with home builder positions on the most impactful proposals. The ICC’s Online Governmental Consensus Vote will begin on Oct. 10 and run for two weeks. This voting period will determine what goes into the 2024 IRC, IEBC and IBC. NAHB has developed a voting guide members can provide to local building officials who will be voting via ICC’s cdpACCESS platform. The voting guide lays out home builders’ positions on a wide range of proposals and contains a “High Priority” section highlighting some of the most impactful proposals. High-priority proposals that NAHB opposes include: • Permit Valuations (ADM 43, Parts I and II): This proposal modifies the section on permit valuations. The proposal includes overly subjective language that allows the permit to be denied if, in the opinion of the code official, the valuation is underestimated. • Townhouse Yards (RB53): This proposal sets minimum lengths for townhouse yards or open ways. The language is too restrictive and would prohibit common townhouse designs if approved. The language also does not address attached garages in the perimeter measurements, which will add confusion. • Fire-Retardant Coatings (S205): This proposal prohibits the use of fire-retardant-coated wood, except for factory-laminated products and facings or wood veneers applied on site, even under the alternate methods and materials clause. A related IRC proposal (RB74) would make it difficult for coatings to qualify as equivalent protection for I-joists over a basement, as products would have to comply with a new ASTM standard that includes a stringent durability test and requires special inspection of field-applied coatings. NAHB strongly encourages members to download the voting guide, print a copy or two, and share it with local building officials who are a voting governmental member. Local building officials, especially those in smaller jurisdictions, often agree with home builders and developers in opposing building code proposals that are overly restrictive or unnecessary. NAHB Codes staff can provide lists of validated voters in your state or local jurisdiction. NAHB supports building codes that result in safe, decent and affordable housing, in alignment with our organizational mission “to protect the American Dream of housing opportunities for all.” When evaluating proposed changes to model building codes, NAHB puts homeowners first by assessing the need for the proposals, their effectiveness, and whether homeowners will accept them and the higher price tags they often bring. Visit NAHB’s Code Development page for more information on the current development cycle. Gary Ehrlich gehrlich@nahb.org Page 4
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HBR Leadership was invited to attend the 75th Anniversary Heritage Ball at SAFB and it was quite the event! The hangar was filled with glamour and patriotism of over 1,000 guests to celebrate. There were many photo opportunities and amazing fellowship that included the Band of Mid America providing entertainment . Our support of SAFB is one of the best values our organization continues to share with our membership. Page 6
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2023 Home Show Floor Plan All booths are 10’ x 10’ with exception of booth # 103 and include rear curtain, side rails, table, chairs and 110v electric. . $800 for HBR members $1000 for non-HBR members Event Sponsors •Consumers will not be charged admission to attend the Home Show. Industry Opening Night Sponsor: $1,000 Your company will be credited for the vendor industry night event on Friday, February 25th onsite. Each vendor will be sent an invitation with your logo to enjoy 2 complimentary beverages from 7pm to 9pm and network with other exhibitors at the Home Show. Your company does not have to be an exhibitor to register and will be included in participation. Exhibitor Hospitality Sponsor: $1,000 Your company will be promoted for the complimentary waters and sodas provided in the HBR booth during show hours along with your company logo on a $5.00 voucher given to each booth. HBR Staff will provide 2 coolers wrapped in your company logo, filled with waters and soda for exhibitors to enjoy all weekend. Your company does not have to be an exhibitor to register and will be promoted throughout the Home Show. FREE Admission Sponsor: $1,000 Sponsor promoted as making free admission possible in all press releases and any magazine articles. Logo on all print ads, complimentary 1/2 page ad in Home Show Guide and on-site signage at entry door. Investment $5,000 Increase brand recognition and profitability! In addition to your booth presence, investing in Event Sponsorship allows your business to increase visibility before, during and after the Show. Limited to noncompeting HBR member companies. •Up to Two 10’x10’ booths in a prominent location. •Logo will appear in an extensive marketing campaign including print, online, social media and TV. Campaign valued at more than $30k and seen by over 300,000. •Featured sponsor on event website page and interactive floor plan. •Logo on Event Tote bag, plus option of including a flyer or trinket in Tote Bag. •Full page ad/article in the Home Show Guide through Market Place Magazine. •Banner with your logo hung prominently inside the event facility. •Total value of $30,000+ Page 9
NAHB First Vice Chairman Alicia Huey Tells Lawmakers How to Address Affordability Crisis NAHB First Vice Chairman Alicia Huey today participated in the New Democrat Coalition's Housing Roundtable and outlined headwinds facing the housing industry as well as urging lawmakers to enact specific policy solutions to ease the nation's housing affordability woes. Huey cited a number of factors that have considerably slowed home building since the start of the pandemic: • Building material prices have jumped more than 35% since January 2020, and 80% of that increase has occurred since January 2021. For example, steel mill prices are twice their January 2021 level, gypsum is up 22% and exterior paint is up 50%. • Skilled trade labor shortages are making housing more expensive and increase the time it takes to build a home. • Rents are on the rise due to a lack of housing supply, and higher interest rates have pushed the average mortgage rate to 5.9%, the highest level since 2008. "In fact, housing affordability has fallen to a decade low," Huey told lawmakers. "The July median home sales price is $428,700, an increase of $58,900 from just a year ago. And seven out of 10 households cannot afford a new, median-priced home." To combat the growing housing affordability crisis, Huey urged the New Democrat Coalition to call on the Biden administration to suspend tariffs on Canadian lumber and Alicia Huey with Rep. Norma Torres (D-Calif).) Page 10 immediately enter into negotiations with Canada on a new softwood lumber agreement. Huey also called on Congress to play an important role on the labor supply issue by ensuring that vocational training opportunities stand on the same footing as a four-year college path. NAHB has also been working closely with lawmakers to highlight how building material production bottlenecks and rising lumber prices are harming home builders and home buyers. Huey specifically noted the efforts of Rep. Norma Torres (D-Calif.), who has consistently cited the urgent need to resolve America’s housing affordability challenges. "Rep. Torres, I want to thank you for the many times you have spoken out on lumber costs and their impact on housing affordability, especially the numerous times you have appeared on the House floor to speak on our behalf," said Huey.
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The Illinois Department of Human Rights (IDHR) released its model Sexual Harassment Prevention Training program for Illinois employers to comply with Public Act 101-0221 (commonly referred to as the Workplace Transparency Act). Under this Act, Illinois employers are required to train employees on sexual harassment prevention by December 31, 2022, and on an annual basis thereafter. This requirement applies to all employers with employees working in this State. Employers must either develop their own sexual harassment prevention training program that equals or exceeds the minimum standards for sexual harassment prevention training outlined in Section 2-109(B) of the Illinois Link to Request Access for Model Sexual Harassment Prevention Training Employers Required to Provide Sexual Harassment Prevention Training for All Employees •Every employer in the State of Illinois is required to provide employees with sexual harassment prevention training that complies with section 20198 of the Illinois Human Rights Act. •All employees regardless of their status (i.e. short-term, part-time, or intern) must be trained. •If an employer has an independent contractor working on-site with employer’s staff, the independent contractor should receive sexual harassment prevention training. Record of Compliance Employers should keep an internal record of training compliance to be made available for IDHR inspection upon request. Records that reflect compliance may include but are not limited to, a certificate of participation, a signed employee acknowledgement, or training sign-in worksheets. A record of training should include the names of employees trained, the date of training, the sign-in worksheets, copies of certificates of participation issued, and a copy of all written or recorded materials that comprise the training as well as the name of the training provider, if applicable. Records may be paper based or electronic. Documentation of the training should not be sent to IDHR unless requested but should be kept on the employer's premises. Page 12
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The 2023 NAHB International Builders Show (IBS) is the biggest and best residential construction industry show of the year. Everyone who is anyone will be at the Builders’ Show in Vegas. It’s essential that you’re there to experience it all! Learn the latest industry strategies from industry experts. Discover innovative industry products and trends. Connect with new business partners and suppliers. Page 14
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UNION MEMBER: Amendment 1 works against Union interests Union bosses’ recent campaign ad for what they call the “Workers’ Rights Amendment” features a worker claiming Amendment 1 will “keep jobs in Illinois. It’s good for taxpayers and it’s good for the economy.” Except it won’t keep jobs in Illinois, and it’s not good for taxpayers or the economy, as union member Anthony Travis knows personally. “I’m originally from the West Side of Chicago, and I am pro -union. I come from a union family. My mother, my brother and I were all union stewards. My father was also a union member. I spent 29 years at Comcast, and I was a union steward twice for IBEW Local 21. I was also a unionized worker under SEIU,” Travis said. “I believe workers’ rights need to be protected, but labor policy belongs in the law, not the constitution. And Amendment 1 is not in the best interests of union members or taxpayers.” At the top of the ballot Nov. 8, Illinois voters will be asked about a “Proposed Amendment to the 1970 Illinois Constitution.” That’s Amendment 1. Amendment 1 would insert four clauses into the Illinois Constitution that promise: • guaranteed tax hikes, including at least a $2,149 property tax hike on average per family over four years • prevent voters and lawmakers from reforming bad policy • potentially overturn more than 350 existing Illinois laws • grant government union bosses more power than those in any other state. Illinoisans already pay the second-highest property taxes in the nation. High property taxes are a major reason taxpayers are fleeing to lower-tax states. Amendment 1 promises to increase this burden by expanding the scope of bargaining to virtually any topic. As the list of demands government unions can make grows, Illinois taxpayers would be tasked with footing the bill for the higher costs of both new benefits and longer negotiations. States with more powerful government employee unions have both higher property tax rates and greater debt burdens. “We want taxpayers to understand that if Amendment 1 passes, it gives the union bosses total control to negotiate for anything. Union bosses could ask local municipalities to pay their mortgage, pay their rent. This amendment opens a Pandora’s box of what else union bosses could ask for and have us pay for,” Travis said. “And the bottom line is this: Who’s going to pay for these unencumbered benefits? We can’t give the union bosses a blank check because the taxpayers simply can’t foot the bill. This is not a fiscally responsible piece of legislation.” The costs of longer negotiations as union bosses demand more would add to the already ballooning $313 billion public pension debt, further driving up state and local taxes that are already among the highest in the nation. Spending on vital programs would continue to fall. Amendment 1 only impacts government union members, because federal law covers private-sector unions and states cannot usurp federal authority. But higher property taxes impact all union members as well as every Illinoisan: renters see property taxes passed on to them through higher rents and businesses suffer and create fewer jobs – despite what the commercial says. Some businesses and residents have already voted on our state’s policies by leaving Illinois. “So we’re losing residents because of high property taxes, we’ve got a looming pension crisis, and now we have to put these very important issues on the back burner to deal with Amendment 1, because if it passes, this amendment will impede our ability to reform any of these issues,” Travis said. Illinois has many challenges ahead, including the threat of a recession. Is this really the time to create more trouble through Amendment 1? Page 16 Ann Miller Labor
Reasons for the Rapid Rise in Rates Keeping a Watch on Rising Rates The Outlook Moving Forward The economic drivers of these conditions are a nearly 40-year high for inflation, produced by too much Covid-era stimulus, supply-chain issues and global market disruptions, including the Russian war against Ukraine. While the Federal Reserve is now aggressively tightening monetary policy, via higher shortterm rates and balance sheet reductions of ultimately tens of billions of dollars worth of assets off its massive near-$9 trillion bond portfolio, it waited too long to act. The central bank’s call last year that inflation was “transitory” was a forecasting error. Further exacerbating the situation was a failure at the local, state and national levels to properly and effectively address the supply side of the economy, where inflation can be more efficiently fought. With the Fed falling behind the inflation curve, its leadership has now adopted a stark, hawkish stance to convince markets that it is in the inflation fight to win. As a result of the Fed’s aggressive monetary policy stance, interest rates have increased significantly in 2022 and particularly in recent weeks. Since the start of August, the 10year Treasury rate has increased from 2.6% to approximately 3.7%. And as the bond market decline gathered speed this week (a falling bond market often means rising mortgage rates), the 10-year Treasury rate briefly increased above 4%, the highest rate in 15 years. Rates then fell back on global issues and a focus on macroeconomic weakness at the end of the week. Additionally, mortgage interest rates have moved much higher because the spread between the 10-year Treasury and the 30year fixed rate mortgage has expanded because of market uncertainty, mortgage pre-payment risk, and the Fed’s plan to allow for tens of billions of dollars of mortgage-backed securities each month to roll off its balance sheet. The consequences of this credit market are clear to builders. Buyers are priced out of the market, especially first-time buyers. Profit margins compressed by residential construction market costs are under pressure from the need to adjust pricing and incentives to attract buyers. And a housing market that needs more supply to address a significant, structural housing deficit of about 1 million homes has to put this long-run project on hold as real-time market demand, weakened by declining housing affordability, retreats. Given this macro environment, 2022 will be the first year since 2011 to see a decline for single-family construction starts. The housing market, and other elements of the economy, are clearly slowing. The Fed, which many market observers now believe has adopted a stance that is too hawkish, should focus on the inflation data coming in the end of the year and slow its path of tightening to examine whether its policy is working to bring inflation down. And other regulatory and fiscal policymakers should do what they can to reduce regulatory cost burdens and other ineffective rules that artificially increase the cost of remodeling homes, building apartments and supplying for-rent and for-sale housing to the market. In the meantime, builders should continue to be cautious with respect to operations. The Fed has indicated that it plans to hold interest rates higher for longer. Unless a severe recession takes hold in 2023, interest rates are unlikely to ease until 2024. However, at that time, the housing market will rebound as interest rates fall back and a pool of frustrated, prospective home buyers comes back to the market in greater numbers. This means, unfortunately, the homeownership rate will decline in 2023, which places housing firmly on the political agenda heading into the 2024 elections. Page 18
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OFFICERS P L A T I N U M President, Mike Lippert Liese Lumber 1st Vice President, Mike Needles C.A. Jones, Inc. 2nd Vice President, Steve Macaluso Halloran Construction, Inc. Associate Vice President, Jerry Yaekel Yaekel & Associates Treasurer, Richard Coolbaugh First Mid Bank & Trust Secretary, Jon Edler Henges Interiors DIRECTORS G O L D S I L V E R Allen Roofing & Siding B R O N Z Page 21 Jason Klein - Ameren Illinois Erik Huber - Bank of Springfield Matt Warren - Carrollton Bank Mary Ann Lopez Drake - Drake Construction Coy Mullenix - CMI Construction Michelle Rauk - Eagle Flooring Scott Gruber - First Mid Bank & Trust Mark Fulford - Fulford Construction Robert Dee, Jr. - Homes by Deesign Scott Blumberg - Huntington Chase Steve Dill - SLD Enterprises Josh McDermott - J.T. McDermott Remodeling Contractors Derek Brandmeyer - Light Brite Aaron Klemme - Klemme Construction 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.
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