Did you know: the Affordable Care Act could have been a lot worse for small builders?

Robert Markel, CGR

By Robert Markel, CGR
President, Home Builders Association of Greenville 
President and Owner, Hadrian Construction Company

Now that the U.S. Supreme Court has ruled on the Affordable Care Act (Obamacare), it is worth revisiting the point that this legislation could have been a lot worse for small Home Builders and Remodelers if not for the actions of the National Association of Home Builders.

In the version of the Affordable Care Act that passed the U.S. Senate, the mandate to require employers to offer health insurance to its employees would have been effective for any "construction-related business" with five or more employees, even while other businesses had a threshold of 50 employees.  NAHB aggressively lobbied Congress to remove that requirement that clearly would have harmed construction firms.  NAHB organized its members and together the five-employee mandate was removed before the bill was presented to the President for his signature.

As a member of the Home Builders Association of Greenville, you enjoy a three-in-one membership that includes the National Association of Home Builders and the Home Builders Association of South Carolina.  While locally our mission is broad and includes advocacy, as well as promoting and serving the industry, at the state and national level your Home Builders Association has one central mission: representing Home Builders in the halls of government.

Your membership in your Home Builders Association is a vital part of insuring that all Home Builders and related businesses are properly looked after in Washington DC and Columbia.  Please remember that the next time you receive your membership renewal notice.

HBASC: Legislative Report (and several wins at the wire)

By Julian Barton, Government Affairs Director
Home Builders Association of South Carolina

On Thursday, the General Assembly completed its two week mini-session (Sine Die II). For the second year in a row, the General Assembly has taken an extra month to complete its work, and for a second year in a row the state budget has not been completed until the last week of June. This year the General Assembly did not complete the state budget until June 28, so there was not enough time for Governor Haley to review the budget and issue her vetoes. As a result, the General Assembly will have to come back (Sine Die III) at some point after July 1 to consider the Governor’s vetoes. What has historically been a five-month legislative session is now turning into a six month plus session!

While the state budget (2012-13) of $6.7 billion was late in passing due to a Senate versus House fight over how to structure tax cuts, it did contain some important provisions for the home building industry:

1. Tax Cut for Small Business – Income tax rates for small businesses (LLC, S corporations, & sole proprietorships) would be reduced from 5% to 3% resulting in a $20 million annual savings and $60 million over three years. 
2. Dredge Charleston Harbor - Allocated $300 million to cover federal funds that may not be appropriated by Congress and the state’s funding portion to deepen the Charleston port by 5 feet to accommodate larger ships. This sends a strong signal that South Carolina is serious about expanding it harbor’s capabilities! 
3. Funding for Public Schools – The new budget added $153 million to public school funding, which raised the per-student allocation by $132 to $2,012. Good schools are important to the home building industry. 
4. Economic Development – Add $25 million to the Department of Commerce budget to attract new businesses to South Carolina and in turn grow our economy. A growing economy is good for the home building industry! 

Key Issues for Builders
Unemployment Insurance – Premium Relief Set: In 2010 and 2011 the General Assembly passed legislation to reform the state’s unemployment insurance law. The General Assembly did a number of things, like cutting the weeks on unemployment, to make the fund less expensive moving forward. In addition, the repayment of almost $1 billion in federal loans for the bankrupt Unemployed Insurance Fund began. Late in the session, the General Assembly decided to use state money to ease the sticker shock of higher UI premiums.

This year General Assembly also considered a request for the state to again subsidize the UI Fund with state appropriations. UI premiums will be lower in 2012, but the federal repayment will push them slightly higher. Both the SC House and the SC Senate inserted $77 million in their budgets to again subsidize unemployment insurance premiums.

Update: This week the General Assembly included $77 million for premium relief in the 2012-13 state’s budget. This will help hold unemployment insurance premiums near the level we paid last year.

State Immigration Law – Impacted by US Supreme Court Decision: Last week the U.S Supreme Court handed down its decision on the Arizona state immigration law. Much of the law, but not all, was struck down. Much of the South Carolina immigration law was based on the Arizona law. The South Carolina law is now before the U.S. Circuit Court. Many will remember that LLR last year had to suspend some provisions of the law because South Carolina’s current law (passed in 2009 & updated in 2011) had provisions in it that the U.S. Supreme Court had ruled unconstitutional. We would anticipate more suspensions of the SC law when the U.S. Circuit Court hands down its decision. However, it is best to continue to abide by state law until we get direction from the federal courts.

The state law now requires mandatory e-verify screening of new employees, but an employer who was inspected and didn’t have his employees e-verified would have 72 hours to bring them into compliance. LLR has assisted the employer in the e-verify process. Employers were required to implement the new rules on January 1, 2012. However, the 6 month phase in period ends this month. Going forward LLR will no longer be required by law to help business owners verify their new employees by e-verify. Copper Bill – Governor Signs: Thieves and drug addicts in search of quick cash have been causing millions of dollars worth of damage ripping out copper from plumbing and air-conditioning units at homes and businesses. Last year a bill (H. 3660) was passed to stop the scourge of copper and metal theft in the state. The bill set up a permit system for people who want to sell copper to recyclers. Permits were issued by the local sheriff's office. The good news is that the new law has significantly reduced copper theft, the bad news is that it has caused some implementation issues. Late in the session compromise language was added to the auto recyclers bill (S. 1031).

Update: The copper bill (S. 1031) was signed into law early in June by Governor Haley. The bill cleans up a number of implementation issues. Under the bill passed, the ability to pay cash for aluminum cans was maintained, and the home builder’s new exemption was added to the law.

State Housing Authority - Receives New Member: On the last day of the session to consider appointments, the Governor’s latest appointee to the State Housing Authority Board, Mary Sieck was approved by the SC Senate. Her confirmation was unanimously approved, and she was appointed to a fill an unexpired term. Mary is from Lake Wylie, has a realtor’s license, works with an employee search company, and is married to Curtis Sieck - a builder in York County. She is an excellent addition to the SC State Housing Authority board.

Community Land Trust – Governor Signs Bill: A community land trust (CLT) is a non-profit community housing development organization that acquires and holds land in trust primarily for the use of affordable housing. This is done under long term real estate leases that allow it to ensure that improvements located on the property remain affordable to low income families. CLT’s help develop public– private collaborations to create opportunities for communities with limited resources to develop workforce housing. They support facilities and preserve land while promoting homeownership, historic preservation, local control and neighborhood revitalization.

Update: The bill (H. 3676) that was introduced to create community land trust enabling legislation passed the General Assembly in late May. The bill was signed into law by Governor Haley in early June.

Addison Homes joins national alliance

Addison Homes has joined the Best Practices Research Alliance, a community of Home Builders collaborating with building performance specialists, quality management experts, and industry suppliers.  Alliance members work together to research, demonstrate, and share the best practices that are moving energy-efficient homes into the mainstream.  


Founded by Integrated Building and Construction Solutions, the alliance comprises 40 Home Builders of all sizes throughout the United States.  Research efforts are aligned with the U.S. Department of Energy's Building America program and key areas of focus include zero-energy homes, energy-smart homes, and business quality management.

HBA August 22 General Membership Meeting Will Feature Political Analyst Chip Felkel

Chip Felkel

Your HBA of Greenville General Membership Meeting on August 23, 2012, will feature political analysis and strategist Hollis "Chip" Felkel.

• What: HBA of Greenville General Membership Meeting
• When: Thursday, August 23, 2012, 11:30 a.m.
• Where: TD Convention Center
• Speaker: Chip Felkel, Political Strategist and Analyst
• Sponsor:
• Fee: $14 for members, $21 for nonmembers

Felkel will discuss the current political landscape and offer his analysis of the November General Election.

About Chip Felkel:

Chip Felkel is Founder and CEO of the Felkel Group, a Greenville-based political  public affairs firm that specializes in strategic communications, media relations, and political strategy.  Felkel is a veteran public affairs strategist, media relations expert and advocacy innovator with over two decades of experience in the State and National arenas. He also serves as a political analyst for WYFF (NBC).

Felkel’s extensive political resume includes roles with Campbell for Governor, the South Carolina Republican Party, the Republican National Committee, as well as the 1988 Bush-Quayle Campaign (Executive Director – Georgia), DeMint 2002 Congressional Re-elect (campaign manager) and in strategic and communications roles with Bush-Cheney 2000 and 2004.

Over the last decade, Felkel has served as a trusted advisor, navigator and connector to senior decision-makers at all levels of business and government providing a frank objective perspective on political and policy issues, on communications challenges and business development projects. Those years of experience and his passion for getting people more involved in the public policy process led Felkel, along with FG's COO Brian Aufmuth, to found The RAP Index®, a revolutionary public affairs survey tool that uncovers an organization’s best stakeholder assets.

In the media, Felkel’s willingness to “tell it like it is” has made him a highly valued source for both “on” and “off the record” commentary. Felkel’s viewpoint has been sought by those in both the print and electronic media, and his commentary has appeared on NBC, CBS and Fox affiliates, as well as in The State (Columbia), the Greenville News, the Wall Street Journal, Atlanta Journal Constitution, Charleston Post & Courier, Charlotte Observer and the New York Times. He has also been quoted extensively internationally in the London Daily Telegraph and in O Estatdo de Sao Paulo. Today, along with the rest of his team at FG, he offers insight to a growing number of loyal readers with the Political Entrepreneur blog and is currently developing a book, Political Golf™, a businessman’s guide to effective engagement in the political and policy arena. Felkel’s expertise and insight has also been sought by law firms, associations and corporations as a speaker for staff retreats, training seminars, and annual meetings.

Along with his corporate work, Chip Felkel currently posts a regular blog Front Porch Views which offers social commentary on events of the day. Felkel has served as an instructor for Leadership Greenville and presently serves as a board member for the History Museum of UpCountry South Carolina and on the Partnership Board for the University of South Carolina’s Department of Political Science. Chip lives in Simpsonville, SC, with his wife Shonna and their children, Ethan and Addison.

Education Forum: Targeting zip codes for upcoming Remodeling/Building

You've heard the weather man say, "get alerts for bad weather in your area as accurate as your ZIP CODE!"  On Wednesday, August 8, you can do the same thing.....only with remodeling and builder jobs in a specific ZIP CODE.  


The Greenville News will bring the location of potential future jobs to you!  Whether you are a builder, remodeler, specialty contractor, or one of the many businesses that support those businesses, you can learn exactly where your marketing dollars should be spent and learn the location of the hot spots for remodeling and new construction, right down to the zip code. 


This is really something you do not want to miss out on.  In fact, whether you are a contractor, banker, retailer, or any other business, this information is incredibly valuable, and available to you as a benefit of membership in the Home Builders Association of Greenville.

• When: August 8, 2012, 11 a.m. until 1 p.m.
• Where: Hubbell Lighting Headquarters
• Sponsored by GBS Building Supply and Progress Lighting

To register, click here.

HBA Builder Breakfast set for July 26; program will feature new benefits for Builders

Your HBA of Greenville will host a Builder Breakfast for HBA Builder members Thursday, July 26, 8 a.m., at Tommy's Country Ham House.  Builder members are invited to attend compliments of our sponsor, Great American Insurance Group.

The agenda for the meeting is as follows:

1. Presentation and discussion of new qualifications of membership for HBA Builder Members
2. Presentation of a new benefit of membership: Legal Hotline
3. Presentation by Great American Insurance Group of the HBA of Greenville Builders Risk Program

This event is open to Builder members and invited guests only.

A note to our Associate Members from Michael Dey, Executive Vice President: your HBA of Greenville has not held a Builder-only meeting since 2007.  It is not our plan to make these meetings a regular occurrence.  However, we have several items of business we need to discuss with our Builder members that necessitate this meeting.  I would like to thank Great American Insurance Group for sponsoring the breakfast and offering our Builder members a discount program for their Builders Risk Insurance needs that is exclusive to members of the HBA of Greenville.

Federal court rules against NAHB, others on challenge to Lead Paint Rule

In November NAHB, the National Lumber and Building Material Dealers Association, the Window & Door Manufacturers Association, and the Hearth, Patio & Barbecue Association challenged the Environmental Protection Agency's decision to remove an opt out provision from its controversial Renovation, Repair and Painting Rule.

They argued that EPA violated procedures contained in Federal law governing how it adopts its regulations.  The court found that EPA did not violate the law in adopting the Lead Paint Rule.

However, legislation is now pending in the U.S. Congress to amend the Lead Paint Rule legislatively to, among other things, require an opt out provision.

Builder Ballot: June 26 is Primary Run Off Day, Please Vote

Today is the Runoff for the Primary Election in South Carolina. The top two candidates in races where a candidate did not receive at least 50 percent of the vote in their race are placed on a ballot today for the voters to make their final decision. The winners of all of the primary races will face off in the General Election on November 6.

In Greenville and Pickens counties, two races resulted in runoffs: Senate District 8 and Pickens County Sheriff. In Senate District 8, challengers Ross Turner and Joe Swann face off today to determine the Republican nominee for Senate District 8 currently held by Senator David Thomas. Senator Thomas failed to qualify for the runoff. His term in the Senate will end in December.

In Senate District 8, S.C. Builders PAC supports Ross Turner. Turner is an insurance broker and owner of The Turner Agency in Greenville. The Turner Agency is a member of the Home Builders Association of Greenville.

In Pickens County, incumbent Sheriff D. David Stone will face challenger Rick Clark.

If you live in Pickens County or Senate District 8, please remember to vote in the Primary Runoff today. For information about voting in South Carolina, visit SCVotes.org.

South Carolina Builders Political Action Committee is the method by which members of the Home Builders Association of Greenville work together to elect pro-housing candidates to the various elected offices. HBA members contribute voluntarily to SCBPAC. The Legislative Committee of the HBA of Greenville interviewed various candidates, and the Board of Directors made the final decision on who would receive support.

Huffington Post: Americans Buying Homes at the Fastest Pace in 2 Years

Americans bought new homes in May at the fastest pace in more than two years. The increase suggests a modest recovery in the housing market is continuing, despite weaker job growth.

The Commerce Department said Monday that sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That's the best pace since April 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Even with the gains, the annual sales pace is less than half the 700,000 that economists consider to be healthy.

Read the entire report at Huffington Post by clicking here.

NAHB: Single-Family Housing Starts Rise 3.2 Percent in May

Single-family housing production increased for a third consecutive month and builders pulled more permits for both single- and multifamily construction in May, according to newly released figures from HUD and the U.S. Census Bureau. The data reveals that the seasonally adjusted annual rate of single-family housing starts rose 3.2 percent to 516,000 units – the best pace since December of 2011.

In the Upstate, single-family housing starts continue to outpace the state and the nation:

• Greenville, year-to-date (through April) starts total 700, up 32 percent
• Spartanburg, starts total 200, up 28 percent
• Anderson, starts total 110, up 95 percent

“Today’s report is a good sign that builders are cautiously moving to replenish their depleted inventories of single-family homes in response to increasing buyer demand,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “In certain housing markets across the country, the momentum toward recovery is gradually building, though tough credit conditions and inaccurate appraisal values continue to weigh down that progress.”

“The latest data provides evidence of the kind of slow but steady growth that we expect to see in housing production through the end of the year, and shows that housing continues to regain strength regardless of some weakening in other parts of the economy,” said NAHB Chief Economist David Crowe. “Particularly encouraging are the gains in permit issuance posted in both the single-family and multifamily sectors in May, which are indicative of builders’ intentions to start new projects in the coming months.”

While overall housing starts posted a 4.8 percent decline to a seasonally adjusted annual rate of 708,000 units in May, all of the decrease was on the more volatile multifamily side. Single-family starts rose 3.2 percent to 516,000 units as multifamily starts declined 21.3 percent to 192,000 units.

Regionally, dips on the multifamily side drove down combined housing starts in all but the West, which registered a 14.4 percent gain. The Northeast, Midwest and South posted declines in total housing starts of 20.3 percent, 13.3 percent and 6.1 percent, respectively.

However, strong gains in new permitting activity for both single-family and multifamily homes drove the combined permitting number for May up 7.9 percent to a seasonally adjusted annual rate of 780,000 units – the strongest pace since September of 2008. Single-family permits were up 4.0 percent to 494,000 units (best pace since March of 2010) while multifamily permits gained 15.3 percent to 286,000 units.

Three out of four regions posted gains in combined permit activity in May. The Midwest, South and West posted gains of 6.1 percent, 11.1 percent and 10.5 percent, respectively, while the Northeast registered an 8.0 percent decline.

FHFA: mortgage rates drop .15 percent in May

The Federal Housing Finance Agency (FHFA) today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some adjustable-rate mortgage (ARM) contracts, was 3.78 percent based on loans closed in May. Beginning in March, FHFA is calculating interest rates using unweighted survey data. There was a decrease of 0.15 percent from the previous month.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 17 basis points to 4.04 in May. These rates are calculated from the  FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note).  These results reflect loans closed during the May 25 - 31 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-April.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.78 percent in May, down 15 basis points from 3.93 percent in April. The effective interest rate, which reflects the amortization of initial fees and charges, was 3.91 percent in May, down 12 basis points from 3.91 percent in April.

This report contains no data on adjustable-rate mortgages due to insufficient sample size.  Initial fees and charges were 1.03 percent of the loan balance in May, up 13 basis points from April. Thirteen percent of the purchase-money mortgage loans originated in May were "no-point" mortgages, down eight percent from the share in April. The average term was 27.7 years in May, up 0.4 years from 27.3 years in April. The average loan-to-price ratio in May was 76.4 percent, up 1.1 percent from 75.3 percent in April. The average loan amount was $263,200 in May, up $7,000 from $256,200 in April.

NAHB: Student Loan Debt Crisis Linked to Lower Home Values

New analysis of government data by the National Association of Home Builders (NAHB) reveals a connection between rising student loan debt and the onset of the housing slump, and offers yet another example of how lower home values have hurt millions of middle class households and threatens the fragile economic recovery.

“The rising student loan debt problem is another consequence of the housing downturn,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “As more and more parents face tighter budget restraints as a result of lower home values, this is forcing an increasing number of students to take out loans for tuition, essentially shifting some of the burden of paying for college from parents to students.”

The link between rising student loan debt and the start of the housing crisis comes on the heels of a recent report from the Federal Reserve showing that U.S. household wealth plunged nearly 40 percent from 2007 to 2010 as a result of declining home values.
“Together, these findings should serve as an urgent wake-up call for policymakers to do their part to ensure a full-fledged housing recovery moves forward to restore the balance sheets of tens of millions of home owning families, create jobs and spur economic growth,” said Rutenberg.

To get housing back on track and provide the foundation for a long-lasting economic recovery, Rutenberg called on leaders in Washington to provide access to mortgage credit for qualified borrowers; demonstrate their support for the mortgage interest deduction; support affordable downpayments for home buyers; enact reforms in appraisal practices and oversight to ensure that appraisals accurately reflect true market values; and establish a strong housing finance system that retains a federal backstop to ensure that standard 30-year fixed-rate loans and adjustable rate mortgages remain readily available for working class households.

“Young Americans need to have the ability to pay for college in order to prepare for the jobs of the future,” said Rutenberg. “Homeownership has historically generated a thriving middle class by creating wealth and helping families to cover higher education costs. Hard-working American families and the economy will continue to struggle until we get housing back on track.”

NAHB provides a new member resource: FAQ on Southern Pine Design Values

NAHB's Construction, Codes and Standards experts recently completed a helpful "FAQ" document to address the most often-asked questions they are receiving from our members on recent changes in design values for visually graded Southern Pine lumber. 

This useful resource can be downloaded free of charge by NAHB members who are logged into our website with their username and password, and provides updated, clear information regarding the impetus for the design changes, an explanation of what the changes encompass, an idea of what to expect in the future, and a summation of how the new design values will be incorporated into today's building codes - among other topics. 

We encourage you to check out the FAQ document as well as the other resources that are available to you on Southern Pine Design Values at www.nahb.org/spdv.

NAHB: FHA Rescinds “Credit Disputes” Rule – For Now

In good news for home buyers this week, NAHB and other housing and banking industry groups have helped convince the Federal Housing Administration (FHA) to withdraw a controversial rule slated to go into effect on July 1 that would have prohibited borrowers with any credit disputes of more than $1,000 from obtaining FHA financing. 

Earlier this year, FHA issued a mortgagee letter stating that buyers either had to pay off ongoing credit disputes of more than $1,000 that appeared on their credit reports or show proof that they have entered into a repayment plan with their creditors before they could qualify for an FHA loan. NAHB and others in the housing finance community opposed this action citing concerns that it would further restrain the flow of mortgage credit and prevent creditworthy borrowers from qualifying for an FHA-insured loan. 

Thankfully, on June 15, the FHA issued an updated mortgagee letter formally rescinding its earlier ruling on this matter. However, the agency is expected to issue new guidance on this topic in the near future.

LLR: New License Bond Required Before Renewing Builders License

Residential Builders Commission (LLR) Administrator Janet Baumberger, APM, has announced that a license bond must be in place and on file with LLR for the new license term that begins July 1 before a Home Builder can renew his or her residential builders license effective July 1.  

If your license bond expires on June 30, you must renew it now before you can renew online your license if it expires at the end of this month.  In fact, the bond should be renewed quickly so that your bond is delivered LLR before you attempt to renew your license.

Residential Builders whose license expires on June 30 need to move quickly to obtain a new $15,000 license bond and renew their Residential Builders license.  Click on the links below for the information you need to renew your license.

Click here to renew your license at LLR.state.sc.us.  Don't forget to download the form to submit your new license bond.

Click here for a list of insurance companies issuing license bonds.

Click here for a list of HBA members who can help you purchase a license bond.  Select Insurance in the Business Activity search criteria area.