NEWS LETTER Upcoming Events Registrations Inside April 30th May 10th June 21st July 19th Mingle Madness - Industry Social Lobby Day Registration Home Builders Oppose HB2838 Bow Tie Economist: Elliot Eisenberg The Green Deal is a Bad Deal INDUSTRY SOCIAL Mingle Madness Metro East Dream Homes Update NAHB: An Eye on Housing Illinois Policy Institute Reports In The News …………… Page 14 www.hbrmea.org

Companies That Attended: Answer Direct AUTCOhome Appliances Authorized Appliance Belleville Supply Company BlueLinx C.A. Jones, Inc. Cardinal Garage Door CMI Construction Collins & Sons Flooring America DRS Construction & Landscaping Fairway Independent Mortgage FCB Banks First Mid Bank & Trust First National Bank of Waterloo Henges Interiors Highlands Residential Mortgage Jacobs Sunrooms, Exteriors & Baths Kerber, Eck & Braeckel Landscapes Unlimited Liese Lumber New American Funding Padgett Building & Remodeling Remington Properties R.P. Lumber SLD Enterprises TheBANK of Edwardsville Vogt Builders, Inc. Wells Fargo Home Mortgage Wilson Lighting Yaekel & Associates Yost Painting It was a “Slam Dunk” of industry professionals for the March, Industry Social. Members of the HB&R from various companies, listed to the left, enjoyed drinks and appetizers provided by Who Dat’s Southern Food in Collinsville, IL. Members took time to unwind, talk shop and reconnect with other professionals throughout the metro east. Be on the look out for the next social! Page 2

Mayoral Luncheon with Waterloo Mayor TOM SMITH PRIVATE LUNCHEON 11:30am - 1:00pm TUESDAY, APRIL 23rd Gallagher’s Restaurant 114 W. Mill St., Waterloo HEAR ALL ABOUT HISTORIC WATERLOO AND THEIR APPEAL FOR NEW HOMES (225+ IN THE LAST 5 YEARS) •GREAT SCHOOLS •DOWNTOWN ATTRACTIONS •BUSINESS COMMUNITY •PARKS & RECREATION •ANNUAL EVENTS •INDUSTRY FRIENDLY No. of Reservations _____________ @ $20 per person ______________________________________________________________________________________________________ Company Name ______________________________________________________________________________________________________ Phone# Email address ______________________________________________________________________________________________________ Names of Attending _____ Amount Enclosed _____ Invoice Company (members only) Exp Date _____ Charge to Visa/Mastercard* *credit card payments include a 4% convenience fee ______________________________________________________________________________________________________ Credit Card# Signature HBR Policy: Registration for the HBR event is considered confirmation of participation and will be invoiced if cancellation is not made withint five (5) days before the event. Page 3 Phone (618) 343-6331 Email: tbutler@hbaswil.org $20 6100 W. Main St., Maryville, IL 62062

Home Builders Oppose HB2838 General Contractors Held Liable for Subcontractor Employee Wages The Home Builders Association of Illinois vehemently opposes the passage of HB2838, a bill holding General Contractors (GCs) liable for the payment of wages to employees of a subcontractor even when the GC has paid the subcontractor in full. HBAI is joined by the following associations in opposing this blow to the construction industry that is still suffering from the Great Recession: Illinois Manufacturers’ Association Ill. Mech. Specialty Contractors Assoc. Illinois Chamber of Commerce National Fed. of Independent Business Illinois Construction Industry Committee Associated Builders & Contractors Ill. Road & Transport. Builders Assoc. Ill. Landscape Contractors Association HB2838 will leave GCs potentially liable to pay every construction worker twice – once thru payment to the subcontractor, then again directly to the employee if the subcontractor fails to pass payment and benefits along to their employees. This legislation applies specifically to private construction projects and is taken from legislation passed last year in California and Maryland. Oregon also has a law, but with one very important difference; it only holds the GCs responsible if the subcontractor has not been paid in full for completed work. This highly controversial measure is certain to increase the cost of construction even if no one ever files a claim: • Insurance - GCs will need liability insurance to protect themselves from wage protection lawsuits for years after every job is complete. • Labor – GCs will need to hire office personnel to protect themselves by reviewing subcontractor payroll records and ensuring compliance. • Bonding – Subcontractors will be required by GCs to obtain bonds to guarantee they can cover wages in order to protect the GC’s interest prior to beginning work. These cost increases will eventually be passed on in the form of higher construction costs to the homeowner, customer, and the taxpayer. With already tight profit margins, GCs and subcontractors in Illinois are looking for ways to control costs wherever possible. California and Maryland are not thriving because of wage protection laws, they are thriving in spite of them. Illinois’ economy, especially its construction sector, is much weaker and cannot take the weight of legislation like HB2838. For these reasons and more, HBAI is asking every member of the Illinois House of Representatives to Vote NO on HB2838 (Gong-Gershowitz). Please go to HBAI.org (VoterVoice link) right now, sign in, and send a letter of opposition to your State Representative. The letter is already written for you to send and its content is approved by the Home Builders Association of Illinois. We need everyone in this association and this industry to take action now! Page 4

The Green New Deal Is A Bad Deal While advocates of the Green New Deal (GND) suggest it will solve a multitude of problems by combating global warming and creating millions of well-paid jobs, the reality is that the GND is a profoundly expensive plan that takes leave of all economic principles. Within only its climate change portion, the GND ignores entirely the fact that CO2 emissions are a global — not local — problem; it fails to reduce carbon emissions most cost effectively; and suggests nonsensical ways of paying for the program. The biggest problem with the GND is that it targets only US emissions, while extreme weather and rising sea levels come from global ones. Today, the US contributes 15% of global carbon-dioxide emissions, China contributes 30%, and India 7%. Under existing policies and goals, in twenty years, the US share will fall to 12%, China’s will drop to 27% and India’s to14%. Thus, even if the GND reduces US emissions to zero, we will benefit little unless other nations do the same. One way around this problem would be to invest in innovations that other nations can easily adopt. For example, pressing to invent low cost solutions that reduce carbon emissions in manufacturing and agriculture and then sharing them globally, as Germany has done with solar panels, would make a huge global dent in CO2 emissions. A second problem is that the GND only focuses on removing certain sources of carbon-dioxide by trying to achieve 100% renewable energy in a decade. The cost to do this would top $4 trillion -- well over a full year of tax revenue. This works out to $110/metric ton of carbon dioxide avoided. The cost of weatherizing every building in the US to “maximum energy efficiency” is projected to cost $400 billion or $285/metric ton. If this sounds expensive, it is! President Obama’s economists put the harm of a ton of CO2 at $50. In New England, you can pay a power producer $6 to reduce CO2 emissions by a ton, $15 in California, and $25 in the European Union, based on emission permit prices in these jurisdictions. What is needed is market mechanisms that incentivize carbon reduction at the lowest possible price regardless of the source. Finally, defenders of the GND propose paying for this ill-advised plan by taxing the rich and having the Federal Reserve finance it. While the Fed could buy GND bonds, it can do so only if it helps it reach its own congressionallymandated goals. While the Fed would return any interest earned on its holdings of GND bonds to the Treasury, it would have to sell an offsetting amount of Treasury bonds in the first place — otherwise it would compromise its control of interest rates. What if the Fed just printed money and used those funds to buy GND bonds, as was the case with Quantitative Easing? If the economy were in a recession, rates would be low, but they would also be low if the bonds were sold to investors, so the savings would be slight. And if the Fed bought the bonds in a healthy economy, when rates are above zero, like they are currently, it would have to pay interest on the reserves it issues to banks, offsetting the income earned on the bonds as it does now. In summary, the GND suffers from several serious flaws. It imposes huge upfront costs on our economy, yet only slightly reduces the negative impacts of domestic carbon-dioxide emissions. In addition, it substantially overpays for the CO2 reductions it accomplishes by needlessly prioritizing certain CO2 emissions over others. Lastly, having the Fed buy GND bonds essentially works only in a recession, otherwise necessary offsetting maneuvers largely, if not completely, negate the interest savings. Page 6

Mar 28 Garrett E. Herschel E. Johnson RE & Dev. Apr 3 Fulford Homes Apr 10 Social Media is loving Dream Homes!! Results from the month of videos People Reached 125,528 Viewers 95% on mobile devices Post Engagements 26,021 Link Clicks 1,602 40% more Men from ages 18-34 Equal Men/Women ages 35-44 45% more Women from ages 45+ CMI Construction Apr 17 McBride Homes Apr 24 RCC May 1 New Tradition Homes May 8 Otten Contracting Page 8

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A Walk-in Pantry is the Most Wanted Kitchen Feature BY CARMEL FORD on MARCH 14, A walk-in pantry is the most wanted kitchen feature, with 83 percent of home buyers reporting it is an essential/must have (32 percent) or desirable item (51 percent). This data comes from NAHB’s recently released report, What Home Buyers Really Want (2019 Edition), which is based on a survey that asks recent and prospective home buyers (people who bought homes in the previous three years or are planning to do so in the next three years) about the features they want in their home and community, including in the kitchen. To ascertain a better understanding of the most sought-after home and community features, NAHB asked home buyers to rate a comprehensive list using a four-tier scale of essential/must have, desirable, indifferent, or do not want. Figure 1 shows the kitchen features with the highest total combination of essential/must have and desirable shares. Coming in a close second, a double sink side-by-side was rated as essential/must have or desirable by 81 percent of home buyers. In fact, 42 percent of home buyers rated it an essential/must have item in the kitchen, more than any other feature on the list. Three other kitchen features are wanted by at least three-fourths of home buyers: a table space for eating (78 percent), a central island (76 percent), and a granite/natural stone countertop (75 percent of home buyers). Along with a walk-in pantry, two other kitchen storage features make the list: pull-out shelves (73 percent) and special use storage (wine rack, etc.) (63 percent). Other items in the top ten include recessed lighting, rated essential/must have or desirable by 69 percent of home buyers, as well as drinking water filtration and customized backsplash, each rated essential/must have or desirable by 68 percent of home buyers. Page 10

For the second year in a row, Illinois’ high property tax burden is second only to New Jersey Illinoisans are still paying the second-highest property taxes in the nation, according to a recent study. In an annual analysis of the property taxes in all 50 states and the District of Columbia, finance website WalletHub placed the Land of Lincoln at 50 out of 51. This is the second year in a row the study ranked Illinois’ property taxes secondhighest in the nation. New Jersey took the top spot both years. The average U.S. household pays $2,279 in property taxes each year on a home valued at $193,500, the nation’s median. But Illinois homeowners pay nearly double that amount, at $4476, for an identically priced home. The median home value in Illinois is $179,700, lower than the nations median. Still, Illinois homeowners average $4,157 in property taxes on that home. The governor declared, “Workers deserve an income tax cut and a property tax break.” only to present a graduated, or “progressive”, income tax structure as the means for achieving those goals. Vincent Caruso Illinois Policy Institute property tax burden that ranks highest in the nation, according to WalletHub study. The cause of Illinois’ daunting property tax bills is not the state’s flat income tax, as Pritzker suggests. Rather, Illinois schools’ and municipalities massive, unfunded pension liabilities have forced local leaders to continuously hike property taxes to cover those costs. In 1996, property taxes in Illinois hovered around the national average. But as pension obligations for government workers have skyrocketed, so too have Illinois taxpayers’ property tax burdens. Pension costs have taken about 50 cents of every property tax dollar raised during the past two decades. Growing pension costs are crowding core services out of local budgets. As a result, Illinoisans are left shouldering sky-high property tax bills. In reality, a progressive tax would do nothing to lower property taxes in Illinois. In fact, all seven states with zero income tax—Texas, Florida, Washington, Alaska, Nevada, Wyoming and South Dakota—each enjoy lower property taxes than Illinois. New Jerseys progressive income tax structure, meanwhile, has failed to rescue residents from a Pritzker should instead encourage state lawmakers to amend the Illinois Constitution to allow local governments to get their pension costs under control. An ideal pension amendment would protect already-earned pension benefits, while allowing for adjustments to the growth of future benefit accruals, such as cost -of-living increases pegged to inflation Without sensible pension reform, Illinoisan will continue straining under heavy property tax bills. Page 12

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NAHB Comments Trump Memorandum on Housing Finance Reform NAHB today commended President Trump for putting housing finance reform at the top of the national agenda and signing a memorandum directing relevant agencies to develop a plan that will help more Americans achieve the dream of homeownership. NAHB has been working diligently on this issue in recent months, and thanks to our efforts both the White House and Congress are making housing finance reform a top policy agenda. “We applaud the president for taking an active leadership role to revamp the nation’s housing finance system,” said NAHB Chairman Greg Ugalde. “NAHB is especially pleased that his memorandum specifically cites the importance of preserving the 30-year, fixedrate mortgage, which has enabled millions of American families to build wealth and financial security through homeownership.” The president’s announcement follows two days of hearings before the Senate Banking Committee earlier this week on Sen. Mike Crapo’s proposal to overhaul the housing finance system. Ugalde testified on this issue yesterday before the panel and these developments should build momentum for the administration and Congress to work together to achieve comprehensive reform that improves the nation’s housing finance system. “The right reforms are critical to maintain a healthy housing market and ensure that single-family and multifamily housing credit for sale and rental properties remains readily available,” said Ugalde. The next step is for Congress to move this process forward to revamp the housing finance system in a way that won’t interrupt the flow of credit. “NAHB looks forward to working with the White House and Democratic and Republican leaders in Congress to pass bipartisan housing finance legislation that provide certainty to the marketplace while maintaining the proper level of government support for housing in all economic and financial market conditions.” Page 14

NAFTA Panel Accepts NAHB Amicus Brief on Softwood Lumber Dispute In a positive development regarding the U.S.-Canada softwood lumber trade dispute, the NAFTA Binational Panel on March 25 granted NAHB’s motion to participate as an amicus (friend) in support of Canada’s challenge of the International Trade Commission’s (ITC) countervailing and anti-dumping duties on Canadian lumber imports into the United States. The combined duties average more than 20%, and increase volatility in the lumber market and harm housing affordability. The ITC and domestic lumber producers had filed objections to NAHB’s motion, but the NAFTA panel accepted NAHB’s memorandum supporting Canada’s challenge. Moreover, with respect to the usefulness of NAHB’s information, the NAFTA panel rejected arguments from the ITC and U.S. lumber firms that counsel to the other parties were perfectly capable of incorporating NAHB’s information and perspective into their own arguments. Specifically, the NAFTA panel stated: “NAHB’s perspective is that of a coalition of purchasers that account for 80% of new home construction in the United States, the primary demand driver in the industry. This perspective is unique from that of the producers with respect to the issue of substitutability, where NAHB focuses its attention, and reflects NAHB’s specialized knowledge of the facts on the record.” In its amicus brief, NAHB stressed that builders have specific preferences for Douglas Fir and Spruce-Pine-Fir (SPF) over Southern Yellow Pine (SYP) in certain instances, and specifically when framing homes. SYP is not nearly as suitable for wall framing because of its tendency to twist and warp, which causes the drywall to buckle. Moreover, there is not much substitution of species because builders use what works best for them based on specific applications. In an official statement, NAHB Chairman Greg Ugalde said: “We welcome the opportunity to provide this unique home building perspective to this issue. It is our hope it will serve as an impetus for the United States and Canada to hammer out a long-term solution to this problem that will satisfy all sides — including domestic industries and consumers — that rely on softwood lumber for their economic well-being.” Page 15

RENEWALS Remodelers Council Roofers Mart Exterior Building Products Professional Women in Building Council Garrett E. & Herschel E. Johnson RE & Dev. Regions Bank (NEW) Wilson Lighting (NEW) NEW MEMBERS Sharon Campbell Answer Direct 15 Canty Lane Fairview Heights, IL 62208 o: (618) 394-4225 c: (618) 719-6878 sharon@answerdirectonline.com www.answerdirectonline.com Zachery Westfall BlueLinx 13860 Corporate Woods Trail Bridgeton, MO 63044 o: (314) 209-0800 c: (618) 975-0365 zachery.westfall@bluelinxco.com www.bluelinxco.com An Langston Highlands Residential Mortgage, LTD 8 Oak Drive Maryville, IL 62062 o: (618) 779-0377 alangston@highlandsmortgage.com www.highlandsmortgage.com Terri Johanning Rehkemper Tile & Floor 18017 St. Rose Road St. Rose, IL 62230 o: (618) 526-3033 c: (618) 772-3513 terri@rehkempertileandfloor.com www.rehkempertileandfloor.com Page 17

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Home Builders & Remodelers Metro East Association 6100 West Main Street Maryville, IL 62062 Phone: 618-343-6331 E-mail: tbutler@hbaswil.org Web: www.hbrmea.org

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