Congressman Jeff Duncan accepts Defender of Housing Award from (from left to right) Rick Quinn, APB, Quinn-Satterfield, and Dave Hagan, APB, and Scott Daniel, APB, of Ryan Homes.

Your HBA leaders and PAC donors met this week with Congressman Jeff Duncan.

During the meeting our members discussed with Duncan the need to resume negotiations with Canada over the lumber tariff, the need for a long-term renewal of the National Flood Insurance Program, the labor shortage and the need to expand the guest-worker program and support training in the building trades, and a long-term solution to the the mortgage-finance system.

During the meeting, HBA of South Carolina President Rick Quinn, APB, presented Congressman Duncan with the NAHB Defender of Housing Award. Thank you Ryan Homes for hosting the meeting.

Your HBA as working for you in Washingting (here is how)

(September 20, 2017) Ever wonder what your Home Builders Association is doing for you in Washington DC and around the country?  Below is a report of the issues on which we are engaged:

1. Canadian Softwood Lumber

• The U.S. Department of Commerce imposed a 20% countervailing duty on Canadian lumber imports in April, and added 7% antidumping duties in June. 
• In late August, Commerce announced a delay in the final duties to Nov. 18. This will allow more time to negotiate a settlement. Collection of countervailing duties is suspended for now, but antidumping duties will continue to be collected. 
• NAHB is meeting with representatives with the Trump Administration and Congress as well as Canadian officials to address home builder concerns regarding price and availability of lumber. 
• These meetings are especially important because U.S. consumers cannot participate in trade disputes, although NAHB provided witness testimony during the International Trade Commission hearing on Sept. 12. 
• Generally, lumber prices have increased, but that may be partly due to wildfires in the Western U.S. and Canada. 
• NAHB is urging U.S. lumber producers to increase production for domestic consumption, and working to identify alternate foreign sources of dimensional lumber. 

2. Disaster Response

• In the aftermath of two devastating hurricanes, NAHB is working closely with state and local home builder associations in those areas to help them meet the needs of members affected by the storms. 
• We sent out an all-member email with information on how to donate to the recovery effort. 
• NAHB issued statements on hurricane-related advocacy. Our leadership conducted media interviews on flood-related topics, including the need for the National Flood Insurance Program (NFIP) reauthorization, building codes, rebuilding efforts and labor shortages. 
• We updated our online Disaster Recovery toolkit with new media talking points and safety information for contractors. 
• We added resources on hiring contractors and places to donate on our consumer Web page. 
• We are creating resources on business continuity; hiring reputable contractors; and best practices for flood damage repair work. 
• We will continue to reach out to the affected communities to see how to help in the rebuilding efforts. 
• With respect to resiliency, our Resiliency Working Group issued its final report and recommendations in July. Many of the recommendations are related to disaster preparedness, resiliency, recovery and communications. 
• The hurricanes have illustrated the importance of disaster response and planning for rebuilding, and the Resiliency Working Group will now help ensure NAHB can be a resource and problem solver after a natural disaster. 

3. Electronic Recordkeeping

• The Occupational Safety and Health Administration’s 2015 electronic reporting rule requires certain employers to electronically submit injury and illness data that they are mandated to keep under existing recordkeeping regulations. 
• The rule also contains anti-discrimination prohibitions to protect workers who notify an employer of a workrelated injury or illness. 
• NAHB has concerns about several elements of the rule, including the requirements for employers to submit records electronically to OSHA that would become publicly available.  In January, NAHB and other stakeholders filed a legal challenge. 
• On May 5, NAHB and other organizations submitted a petition to the Department of Labor (DOL) seeking a stay of implementation and enforcement of the rule, and requested OSHA re-open the rulemaking. 
• In June, OSHA announced it was extending the filing deadline for employers to submit electronic records to December, which would give OSHA more time to review the rule. 

4. Federal Flood Risk Management Standard

• In response to the charge led by NAHB and as part of President Trump’s Executive Order to expedite federal approval for infrastructure projects, the Administration revoked Executive Order 13690 and the Federal Flood Risk Management Standard (FFRMS). 
• Our advocacy efforts included participating in federal listening sessions and meetings; submitting comment letters to federal agencies; and requesting that President Trump revoke it. 
• This standard would have dramatically expanded regulated floodplain areas. 
• However, in response to the hurricanes, the Trump Administration may establish its own flood standard. 
• If the Administration chooses to do so, NAHB will work with the White House to develop an effective standard that does not place undue regulatory burdens on residential construction projects. 

5. Immigration

• The H-2B Temporary Non-Agricultural Worker program allows employers who cannot find local labor for short-term or seasonal jobs to fill those positions with temporary foreign workers. 
• There is an annual cap of 66,000 on H-2B visas issued in a fiscal year, but that cap excluded workers who had participated in the program within three years. 
• That “returning worker exemption” expired in September 2016 and has not been renewed by Congress. 
• In May, Congress approved a spending package for the remainder of FY 2017 that included language allowing the Department of Homeland Security (DHS) to raise the statutory cap for 2017 to allow additional visas. 
• In July, DHS announced it would make 15,000 more visas available, but only to employers who could demonstrate that their business would suffer “irreparable harm” without H-2B workers. 
• The next round of H-2B visas will become available on Oct. 1. NAHB hosted a free webinar to help employers learn if they qualify to apply for H-2B workers and how they can become certified employers under the program. 
• With Congress and the Administration focused on immigration enforcement, the prospect of creating a new guest worker program to benefit builders and specialty trades is highly unlikely. 
• NAHB continues to advocate for restoration of the returning worker exemption while looking for opportunities to expand and reform the H-2B program.

6. Low-Income Housing Tax Credit (LIHTC)

• On Aug. 1, NAHB Chairman Granger MacDonald testified before the Senate Finance Committee on “America’s Affordable Housing Crisis.” The hearing focused on the LIHTC. 
• Chairman MacDonald also discussed how lots and labor shortages, building material price increases and regulations affect housing affordability.

7. National Flood Insurance Program (NFIP)

• The NFIP was extended until Dec. 8 as part of a broader legislative package. 
• During NAHB’s Leg Con in June, builders spoke to their congressional delegations about provisions in the House Financial Services Committee’s flood insurance bill that negatively targeted new construction and grandfathered properties. 
• NAHB was able to convince the committee’s leadership to remove those provisions. 
• After Hurricanes Harvey and Irma, discussions about changing the program were put on hold as policymakers ensured home owners and communities had short-term certainty and financial aid. 
• NAHB will work with Congress on long-term legislation that ensures an affordable, available, predictable and financially stable NFIP.

8. Regulatory Reform

• President Trump has made regulatory reform one of his top priorities, and has asked each agency to evaluate existing regulations and identify ones that should be repealed, replaced or modified. 
• We have submitted recommendations to the Environmental Protection Agency (EPA), Department of Housing and Urban Development (HUD), Federal Emergency Management Agency (FEMA), National Marine Fisheries Service (NMFS), Fish and Wildlife Services (FWS), Department of Justice (DOJ) and Department of Energy (DOE), and will soon submit feedback to the Army Corps of Engineers. 
• NAHB will provide suggestions to DOL, OSHA and others once their notices are published. 
• We will review the 2017 Fall Regulatory Plan and Agenda upon its release and determine if our suggestions were incorporated. 
• The Small Business Administration (SBA) Office of Advocacy is also collecting input on regulatory reform through a series of nationwide Regulatory Roundtables; NAHB has had good representation at all roundtables to date. 
• As part of the Cleveland roundtable, NAHB member George Davis met with SBA officials at one of his construction developments. 
• NAHB will continue its outreach to HBAs and members as additional roundtables are announced. 
• On August 28, NAHB testified before the SBA’s Regulatory Fairness Board about the enforcement activities of federal agencies, particularly EPA and OSHA.

9. Overtime Rule

• Under a new rule that was set to go into effect Dec. 1, 2016, the Obama Administration doubled the annual salary level used to determine whether an employee qualifies for the professional, administrative and executive exemption to overtime eligibility from $23,660 to $47,476. 
• Under the new rule, the salary threshold would also be automatically adjusted every three years. 
• NAHB and many other industry groups challenged the rule in federal court. 
• We contended that DOL went beyond its authority under the Fair Labor Standards Act to allow the salary limit to automatically be re-set every year. The Administrative Procedures Act requires these updates be made through regular notice and comment periods. 
• In a victory for NAHB, a federal judge in Texas issued a preliminary injunction that temporarily barred the implementation of the rule. 
• On Aug. 31, the Texas federal court held the rule was invalid and the three-year automatic increase DOL included was similarly unlawful. 
• DOL’s appeal of the preliminary injunction is now moot and likely to be dismissed.

10. Smart Market Report

• Preliminary findings from them Green Residential Smart Market Report show that green building activity should increase over the next few years. Approximately 60 percent of surveyed builders expect it to be a significant share of their overall activity by 2022. This is nearly double from 2014, when only 32 percent of firms reported that level of green building. 
• Single- and multifamily home builders agree that energy efficiency and healthier indoor environments are key factors in building a green home, and have prioritized these elements in the construction process. 
• The Smart Market report found that ENERGY STAR is more popular in the single-family market while LEED and the National Green Building Standard (NGBS) are more popular with multifamily builders. 
• The Green Residential Smart Market Report is a biannual report released by NAHB and Dodge Data and Analytics (formerly McGraw Hill). The report reviews the history and future of green home construction in the single-family, multifamily and remodeling sectors.

11. Stormwater

• NAHB launched an online toolkit in August to help HBAs advocate for programs that provide a clear path to compliance, reduce redundancy and meet water quality goals. 
• The toolkit provides simple checklists that compare pros and cons of different regulatory approaches based on climate, geography, and local land use patterns. This data will help our members in conversations with state regulators. 
• As part of the toolkit launch, NAHB released A Developer’s Guide to Post-Construction Stormwater Regulation. This report provides a state-by-state breakdown on the top permitting issues affecting builders.

12. Tax Reform

• A team of congressional leaders and Administration officials known as the “Gang of Six” is developing a structure for tax reform, while President Trump is trying to garner nationwide support on the issue. 
• House Speaker Paul Ryan intends to move tax reform this fall. 
• Before Congress can address tax reform, it must pass a budget resolution to set up the procedural process known as reconciliation. This will allow tax reform to pass the Senate with only 50 votes. 
• However, there is growing resistance in the House to passing a budget resolution before members see the Gang of 6’s tax framework. To use the reconciliation process, the House and Senate must pass identical budget resolutions, which will be challenging.

13. Waters of the U.S. (WOTUS)

• On Oct. 11, the U.S. Supreme Court will hear oral arguments on whether the 2015 WOTUS rule should be litigated in federal trial court or the appellate court. 
• NAHB has argued that challenges to the WOTUS rule must be first heard at the trial court. 
• We need this clarity so we do not have to file two lawsuits when we challenge an EPA Clean Water Act regulation. 
• Meanwhile, the EPA plans to use a two-step process to develop a new WOTUS definition. 
• In the first step, the EPA has proposed to withdraw the 2015 WOTUS Rule and revert to the status quo. We expect the agency to finalize the withdrawal by early 2018. 
• The EPA also plans to develop a new WOTUS rule, and will soon take comments on the proposal. 
• NAHB is taking advantage of its unprecedented access to EPA Administrator Scott Pruitt, and is working with the agency on a new rule that is clear and limits jurisdiction of the Clean Water Act consistent with congressional intent. 
• In August, NAHB and the Dallas Builders Association hosted a meeting with Administrator Pruitt in Dallas to voice concerns and offer insight about the new rule. 
• NAHB and the Colorado Association of Home Builders are planning a similar meeting with Administrator Pruitt in Colorado Springs in October. 
• In late October, NAHB will provide recommendations on a revised WOTUS definition at a business-focused in-person listening session at EPA headquarters. 

For more information about these or other Federal government affairs issues, contact Michael Dey (mdey@hbaofgreenville.com).

Congress extends flood insurance program for three months

With a September 30 deadline looming, Congress has approved a broad package that will keep the government funded until December 8, provide roughly $15 billion in disaster relief from Hurricane Harvey, and raise the debt ceiling, which sets a limit on the amount of money the federal government can borrow.

The government funding package also means that the National Flood Insurance Program (NFIP), which was set to expire on September 30, will be extended until December 8.

The National Association of Home Builders continues to work with Congress to achieve a long-term reauthorization of the NFIP that will keep the program fiscally sound and let builders provide safe and affordable housing.

NAHB to hold briefings on Federal tax reform

Dear HBA Member:

The prospect of tax reform is becoming a reality, and I expect legislative action to begin in earnest this fall. Given the importance of tax reform to the NAHB membership, we want to make certain we accurately represent your concerns in this debate.

Please participate in an online discussion with your NAHB Leadership on what tax reform means to our industry. Bring your questions and concerns: We will cover business taxes, including the deduction for business interest, homeownership incentives such as the mortgage interest deduction, multifamily tax issues including the Low Income Housing Tax Credit, and provisions affecting remodelers.

We will hold three "Tax Reform and the Housing Industry" web briefings on Monday, Sept. 18. The three 60-minute briefings each cover the same information, so you only need to attend one session. The briefings will take place at 9:30 a.m., 12:30 p.m. and 3:30 p.m, ET.

You must pre-register for this member-only event. Please make certain you are logged into nahb.org as this is members only content.

If you are unable to participate in the live webcasts, the recordings and staff contacts for more information will be posted to nahb.org after the sessions conclude.

This is an important time for the housing industry. Tax reform will shape the course of our livelihoods for the next several decades. We must get it right. Join me at one of the briefings on Sept. 18.

Granger MacDonald, Chairman, National Association of Home Builders

Federal judge overturns overtime rule

Yesterday a Federal judge in Texas struck down the U.S. Department of Labor's overtime rule that was set to increase the Federal minimum salary to be exempt from overtime from $23,660 to $47,476.

The Obama-era overtime rule, which was set to take effect December1, 2016, was stayed from enforcement by the same judge shortly before it was set to take effect.

The judge, in his ruling yesterday, said that the Department of Labor improperly considered salary in drafting its rule instead of considering job descriptions.  The judge also ruled, "the salary level was set so high that it could sweep in some management workers who are supposed to be exempt from overtime protections."  The National Association of Home Builders estimated that nearly 100,000 construction supervisors were affected by the rule.

Read more about the ruling at Fortune and The Hill.

The Trump Administration recently announced that it has directed the Department of Labor to review the overtime rule and the thresholds for exemption from overtime.

S.C. Attorney General Alan Wilson was one of 21 states Attorneys Generals who challenged the Obama Administration's overtime rule.  The National Association of Home Builders weighed in with briefs making the home building industry's case on the rule.

HBA Hurrican Harvey Relieve Efforts

Texans are fighting floodwaters rising to historic levels as Hurricane Harvey pounds the Lone Star State.

While the reports of damage and devastation in Houston, Victoria, Rockport, and other towns and cities continue to pour in, weather forecasts indicate that the disaster area will likely grow as the storm moves inland and swings toward Louisiana.

The National Association of Home Builders (NAHB) will be working closely with state and local home builder associations in the region to help them meet the needs of members who have been affected by the storm. NAHB also will provide resources to support HBA members as they help families rebuild.

There also are many ways you can help right now.  The Department of Homeland Security encourages donations to be funneled through the National Voluntary Organizations Involved in Disaster.

Donations also are being directed to Hurricane Harvey relief efforts by the Red Cross and Salvation Army via their websites and by texting UWFLOOD to 41444 to donate to the United Way Flood Relief Fund.

These Houston-area food banks are seeking donations to help feed families, while the Texas Diaper Bank is accepting donations to purchase diapers, formula and other needs for children, seniors and the disabled.

Programs such as Star of Hope Mission, Homeless Houston, and Samaritan's Purse are also funneling contributions to disaster relief, while the SPCA and Austin Pets Alive are helping to house evacuated pets.

Other groups targeting the areas impacted by the hurricane include:

• Austin Disaster Relief
• American Red Cross, Corpus Christi
• Catholic Charities of Southeast Texas (Beaumont)

The Texas Association of Builders also has advised its members of the following resources for more information:

• Texas Department of Public Safety: 512-424-2138
• Office of Texas Governor Greg Abbott
• Better Business Bureau
• Federal Emergency Management Agency: 800-621-FEMA

We know HBA members are anxious to help as much as they can. NAHB will be adding information to its Disaster Resources Page from time-to-time. 

Department of Labor considering revising the contested overtime rule

On December 6, 2016, the U.S. Department of Labor issued a new rule changing the salary threshold for exemption from overtime pay from $23,660 to $47,476. The rule was promptly stayed by the courts.  The National Association of Home Builders took a very active role in challenging the rule in court.

President Trump's Secretary of Labor, Alexander Acosta, testified at his Senate confirmation hearing that he would prefer a more modest salary threshold than previously proposed, one that is potentially tied to the rate of inflation.

Last month the Department of Labor issued a request for information on the overtime rule. The National Association of Home Builders will submit comments on the rule, as it did last year when the Obama Administration was considering changing the rule.

NAHB Study shows home buying boosts the economy

A new consumer spending analysis from NAHB highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects — 2.6 times as much as other home owners in a typical year.

NAHB economist Natalia Siniavskaia studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity — and cash — spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.

“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas.

“It’s the architects, the heating technicians, the lumber dealers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said.

During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.

A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall. But the tendency of buyers to outspend non-moving owners on appliances, furnishings and home improvements was similar.

In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.

But new owners’ impact is noticeable — and vital, MacDonald said. “The health of housing — and new home buying — is key to the overall state of our economy.”

Read Siniavskaia’s Eye on Housing blog post on her findings. See the study here.

Do you need new vehicles for your business?

Save more on your next vehicle purchase.  You have earned discounts through your membership from the Member Advantage program.

FCA USA, LLC Chrysler, Dodge, Jeep, Fiat, and RAM
HBA members and their employees can combine this stackable $500 cash allowance with most current retail incentives and choose an On The Job program allowance. Plus, same household family members receive a $500 cash allowance, stackable with most local and national retail incentives, toward the purchase or lease of a vehicle.

General Motors Chevy, Buick, GMC
Members can save up to $250/$500/$1000* on the purchase or lease of most new GM vehicles to association members. Just visit your local Chevrolet, Buick or GMC dealer, choose an eligible vehicle and present your Proof of Membership form.

Kevin Whitaker Chevrolet
Members of the Home Builders Association of Greenville can leverage their membership discount from General Motors through the Member Advantage program at Kevin Whitaker Chevrolet, a members of the Home Builders Association of Greenville. 

Need to rent a vehicle?
Check these discounts at Avis Car Rental, Budget Car Rental, and Hertz Car Rentals.

APP Fuel Card Program
The APP Fuel Card Program is a vast network of fueling locations, industry-best purchasing controls, and online management tools that provide fleet managers the security and operational control required to run a fleet of any size.

Membership has its advantages.

Waters of the US definitions on the way out

The EPA and Army Corps of Engineers last month proposed to replace the 2015 definition of the term “waters of the United States” (WOTUS) with the definition that existed since 1986.

The agencies said the action is the first in a two-step process. In Step 2, the government will propose a new definition for WOTUS.

In the announcement, EPA Administrator Scott Pruitt stated that going back to the well-established 1986 definition allows the agencies to provide continuity and clarity to the regulated community while deliberating on a new definition.

And this time, the agencies said, the path to a new rule will be more public. “As we go through the rule making process, we will continue to make the implementation of the Clean Water Act Section 404 regulatory program as transparent as possible for the regulated public,” said Douglas Lamont, acting Assistant Secretary of the Army for Civil Works.

“NAHB applauds President Trump, the EPA and the Corps for taking the necessary actions to roll back this seriously flawed WOTUS rule that would harm housing affordability by requiring expensive and time-consuming federal permits for countless ditches, isolated ponds and dry channels,” NAHB chairman Granger MacDonald said in a press release.

“Earlier this year, the president honored a campaign promise made to home builders as he signed an executive order directing EPA and the Corps to begin the process of dismantling the controversial WOTUS rule. This is an important step forward to rework the flawed regulation that blatantly usurped state and local authority,” MacDonald said.

“NAHB looks forward to working with the administration, EPA Administrator Scott Pruitt and [Mr.] Lamont to develop a common-sense solution to protecting our nation’s waterways while taking into account the interests of local businesses and communities nationwide,” MacDonald said.

Compliance with regulations account for nearly 25 percent of the cost of a new home

By Bob Barreto, President, Home Builders Association of Greenville

      President, GBS Building Supply

On average, regulations imposed by all levels of government account for 24.3 percent of the sales price of a new single-family home, according to a 2016 study by the National Association of Home Builders (NAHB).

Breaking down the total regulatory costs further, the study revealed that three fifths of compliance costs, or 14.6 percent of the final house price, is due to a higher price for a finished lot resulting from regulations imposed during the lot's development. The other two fifths, or 9.7 percent of the house price, is the result of costs incurred by the builder when building the home after purchasing the finished lot.

In the Greater Greenville area, the study indicates that a new home is $67,424 more expensive as a result of the cost of complying with regulations. 

These regulations come from many sources.  They include new land-use controls that reduce the potential density yield of a parcel of land, which increases the cost of the finished lot.  Other regulations include significant changes to the building code that has added thousands of dollars to the price of a new home.  Labor-law changes also have had an impact.  As well as significant increases in building permit fees, development compliance fees, and new sewer account fees.  But the greatest increase in the cost of compliance has come in the form of new and increased environmental regulations to control erosion and stormwater runoff during development and construction.

When the 2016 study is compared to a previous study prepared in 2011, NAHB found that the cost of compliance with regulations increased by 29.8 percent in the five years between the two studies.  That means the cost of constructing a new home in the Greater Greenville area increased by more than $20,000, in just five years, to comply with new rules imposed by government.  Meanwhile, personal disposable income in the U.S. increased by just 14.4 percent during that same time period, meaning that the average cost of regulation embodied in a new home is rising more than twice as fast as the average American's ability to pay for it.

According to another study by the National Association of Home Builders, 521 families in the Greater Greenville are priced out of Homeownership by a $1,000 increase in the cost of purchasing a new home.  If you do the math, and I have, that means the increase in the last five years in the cost of compliance with regulations has priced out of homeownership more than 10,000 families in our community.

There has been considerable discussion and debate about affordable housing in our community.  Studies by the City of Greenville and Greenville County are providing evidence of the problem.  Many want to blame home builders and land developers for the problem.  But a reading of the studies by the National Association of Home Builders demonstrates that at least part of the problem lies with well-meaning regulations that fail to take into account the impact on a family’s ability to afford a home.

Clearly, a portion of the solution to our community’s housing affordability problem lies in a thorough review of the cost of complying with our own regulations.