HOMESHOW North Coast Building Industry Association
& Remodeling
Emerald Events Center 33040 Just Imagine Dr., Avon, OH 44011
SAVE THE DATE saturday, february 17th, 2018 10am-6pm
NCBIA Member Pricing $250 for early birds – Reserved with Deposit by December 15th, 2017 $299 regular booth space – Reserved After December 15th NON-Member Pricing $350 for early birds – Reserved with Deposit by December 15th, 2017 $399 regular booth space – Reserved After December 15th Direct Sales Pricing $99 Per Booth Space with Deposit RESERVE YOUR SPACE TODAY CONTACT THE NORTH COAST BIA www.ncbia.com (440) 934-1090 OR kelli@ncbia.com
BUILDER north coast building industry association
Table of Contents On the Cover
NEWSLETTER
North Coast Building Industry Association (NCBIA) BUILDER newsletter is the official newsletter of the NCBIA and is published monthly by the NCBIA. The NCBIA is an affiliate of the Ohio Home Builders Association (OHBA) & the National Association of Home Builders (NAHB).
NCBIA Office
5201 Waterford Dr., Sheffield Village, OH 44035 Ph: 440.934.1090 Fax: 440.934.1089 info@ncbia.com www.ncbia.com
NCBIA Staff Executive Officer - Judie Docs judie@ncbia.com Promotions, Marketing & Creative Director - Kelli Moss kelli@ncbia.com
2017 NCBIA Officers
President - Chris Majzun Jr., Majzun Construction Co. Vice-President - Jeff Hensley, Lake Star Building & Remodeling Associate VP - Liz Schneider, Dollar Bank Treasurer - Steve Fleming, Shamrock Development Secretary - Jeremy Vorndran, 84 Lumber Company Immed. Past President - Mary H. Felton, Fidelity National Title
2017 NCBIA Board of Directors
Cover Story:
Single Family Starts Post Slight Gain in August
7
North Coast BIA Annual Clambake
Thank You for Renewing
9
NAHB Young Professionals
10
8
Executive Officer’s Report
11
October General Membership Meeting
12
Letter from the President
4
NAHB Update
15
Workers Comp Update
16 19
Welcome New Members
9
Spike Update Save the Date for Girls Night
22
Photo Gallery - Softball Game and Picnic
23
Proclamation from the President
14
Photo Gallery - SMC Networking Night at Pogie’s Clubhouse 24-25
2017 NAHB & OHBA Directors 2017 NAHB Directors Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling
NAHB Alternate Director
Tom Caruso, Caruso’s Cabinets
Sr. NAHB Life Director & Ohio’s State Rep. to NAHB
NCBIA Life Directors
Randy Strauss
Strauss Construction
1975
Dan Strauss
Strauss Construction
1996
OHBA Past Presidents
Tom Caruso, Caruso’s Cabinets Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling Tom Lahetta, Tom Lahetta Builders, Inc. Chris Majzun Sr., Majzun Construction Co. Chris Majzun Jr., Majzun Construction Co. Randy Strauss, Strauss Construction Bob Yost, Dale Yost Construction
Dan Strauss 1975
Randy Strauss 1996
2017 OHBA Trustees Mary H. Felton Liz Schneider Keith Martin
Fidelity National Title Dollar Bank MBD Homes
OHBA Alternate Trustee
Advertising Policy - The North Coast Building Industry Association reserves the right to reject advertising in the Builder newsletter based on content. Acceptance of advertising does not imply endorsement of the product or service advertised.
5
These are our members who represent our local industry in Washington DC and Columbus.
Ashley Caruso-Noe, Caruso’s Cabinets Mark Craig, Mark F. Craig, Esq. Chris Husted, Prete Builders Sara Majzun-Garwood, BCT Alarm Services, Inc. Keith Martin, MBD Homes Timothy McLaughlin, CFP®, Wells Fargo Advisors, LLC Shannon Niebes, Integrated Restoration Michelle Nowlin, First Federal Savings of Lorain Tom Sear, Ryan Homes Tyler Yost, Dale Yost Construction
september 2017
OHBA Executive Update
Tom Ostrander Tom Lahetta
84 Lumber Company Tom Lahetta Builders & Remodelers, Inc.
OHBA Area 2 Vice-President Mark Zolllinger
www.ncbia.com
Zollinger Builders
page 3
A Letter from the President by Chris Majzun, Jr., Majzun Construction Co.
Thank You Associates September is NAHB Associate Member Appreciation Month and I would like to take the time to thank our hard-working associate members who support our association and help the North Coast BIA thrive. Associate members help home builders run successful businesses and make meaningful connections with customer. Most importantly, they help build the homes that improve the lives of families and make a lasting impact in communities we serve.
Hurricanes Add to Housing Market Uncertainties The economic impacts of hurricanes Harvey and Irma are likely to be felt throughout the coming months as repair and restoration activities continue. Florida and Texas constitute 24% of the nation’s total singlefamily building market, and the counties in the disaster-declaration areas make up 14% of national production.
The rebuilding efforts will require tens of thousands of additional construction workers, heightening the existing issues regarding access to labor. Estimates from the Bureau of Labor Statistics reveal the number of open, unfilled construction sector jobs increased to 232,000 in July, Associates make up roughly two-thirds of our membership and represent nearly reaching a post-recession high. a wide range of occupations. They include skilled subcontractors, title and settlement professionals, lawyers, people working in financial Another growing concern is the hurricanes’ impact on the cost of building services and insurance, product suppliers and manufacturers — and materials, many of which had already increased significantly during the many other professions. past 18 months. Since the start of 2016, softwood lumber prices have risen 22% and OSB prices are up 33%. You are professionals that are just as vital to the process of building homes as the folks who use a nail gun on the job site. –NAHB Chief Economist Robert Dietz Associate members are critical to our local, as well as OHBA. They fill leadership positions, serve on committees, and get the job done for our events. Associates are the epoxy that holds the association together: associates are committed to doing business with other members. This strengthens professional bonds within the North Coast BIA and the home-building industry. Our associates are represented by a National Associate Chairman who joins NAHB’s 15 Area Chairmen as part of the NAHB leadership. In addition, the Associate Members Committee represents associates’ interests at the national level. Thank you again for offering your time and expertise, your help is sincerely appreciated.
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page 4
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www.ncbia.com
september 2017
OHBA Update by Vincent J. Squillace, CAE, OHBA Exec. VP
NOT ENOUGH ROOM AT THE TOP That is the message that has gone unread in this pre- primary season. Somewhere between 8 and 10 credible candidates are running for governor. Of course, only one will be elected next November. Nonetheless, the candidates are out there attending fairs, picnics and community events. This requires a lot of work as Ohio is a big state. That, of course, requires staff which requires money. Phone solicitations and mailings are received weekly. To most, a conservative estimate is the need for $5,000,000 to run a meaningful primary campaign. Needless to say, that is a lot of cash. Many ask why spend so much for a job that pays relatively little? The easy answer is power. A governor is a very powerful person who is authorized to make life changing decisions as well as regulatory actions which impact millions. As of today, there are 8 known candidates in the race and perhaps a few more notables will enter as well. No predictions are being offered here. The important thing to keep in mind is the need to be active and on the spot when the ruling bodies of government get around to impacting you. It is important to be plugged in if you need relief. You need some idea of what looms around the corner when you are considering a large investment in the future.
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It’s a crazy world and getting crazier. Nonetheless the need for us all to be in the room is as important as ever.
SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE
SAVE THE DATE - The North Coast BIA will be hosting a 10-Hour OSHA Certification Class on December 13th and 14th.
SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE - SAVE THE DATE
NAHB Member Advantage Discounts
NAHB Member Advantage gives members an easy way to reduce expenses, maximize profits and increase efficiency. Through agreements with leading national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family. In the past year, members have saved over $17M through Member Advantage. For the most up-to-date information about which companies are offering discounts as well as detailed information on how to access the savings, please visit www.nahb.org/ma.
september 2017
www.ncbia.com
page 5
OHBA Fall Board of Trustees Meeting
Reminder, now is the time to sign-up for OHBA’s Fall Board of Trustees Meeting. Do not wait to reserve your room at the Hilton. Call the Hilton today at (800) 445-8667! The Annual Meeting of the Board of Trustees & Election of 2018 Officers November 14, 2017 Hilton Easton – Columbus - 3900 Chagrin Dr., Columbus, OH 43219 (614) 414-5000 Calling all members - this is the meeting no one wants to miss! You will obtain updated information on issues affecting the industry, attend committee meetings and exchange viewpoints. During the Board meeting awards will be given to Build-PAC President’s Club Members OHBA and the Executive Committee Members will be recognized. Our top awards, “Garson McDaniel” and the Executive Committee Member of the Year will be given.
Implications of FOMC Normalization Process for Mortgage Rates In its statement, the Federal Open Markets Committee (FOMC) left its key interest rate unchanged at a range of 1.0 to 1.25 percent. As signaled in its last statement, the FOMC, beginning in October, will initiate the balance sheet normalization program. The contents of this program are described in the June 2017 Addendum to the Committee’s Policy Normalization Principles and Plans.As discussed previously, traditional monetary policy (changes in the federal funds rate) remains the primary tool used by the FOMC in meeting its statutory mandate of maximum employment and price stability. The FOMC decided to keep the federal funds rate unchanged at a range between 1.0 percent and 1.25 percent, which they believe is accommodative, supportive of its dual goals. In its statement, the FOMC noted that “job gains have remained solid and the unemployment rate has stayed low.” However, “on a 12-month basis, overall inflation and the measure excluding food and energy prices have declined this year and are running below 2 percent.”
The Best of Ohio Homes will be announced. The prestigious Best of Ohio Homes Awards is designed to recognize excellence among builders, remodelers, developers, and associates throughout the state of Ohio. These awards are presented to those companies who have made significant contributions to the residential housing market through outstanding craftsmanship, design, and architecture.
In response to the Hurricanes Harvey, Irma, and Maria, the FOMC notes that “Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term.” Similar to NAHB’s findings, the FOMC noted that “higher prices for gasoline and some other items in the aftermath of the hurricanes will likely boost inflation temporarily; apart from that effect, Room cut-off date is October 16th. Contact the Hilton direct to reserve inflation on a 12-month basis is expected to remain somewhat below your room at (800) 445-8667. Request Ohio Home Builders room block. 2 percent in the near term but to stabilize around the Committee’s 2 Room rate is $199 plus tax per night. Contact OHBA with any questions percent objective over the medium term.” at (800) 282-3403 ext. 1.
Support your community. Shop local businesses.
Local business owners have been counting on Town Money Saver to help grow their businesses since 1992. We are proud to be your hometown coupon magazine.
page 6
www.ncbia.com
september 2017
Single-Family Starts Post Slight Gain in August BY ROBERT DIETZ The pace of single-family starts posted a slight gain in August, albeit over downwardly revised estimates of the rate of July construction. Nonetheless, the three-month moving average for single-family starts is at a post-recession high of 849,000 as the gradual recovery in home building continues.
unit production is down 10% on a year-to-date basis. This decline is somewhat larger than forecast. However, multifamily permits jumped in August, resulting in the year-to-date permit total actually being 1% higher than 2016. On the whole, the current data continue to confirm that 2015 was the peak year in this cycle for multifamily construction starts.
Total starts declined almost 1% in August to a 1.180 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. The headline decline was due to multifamily production decreases, although the July multifamily reading was revised upward from a 299,000 pace to 352,000. Single-family starts increased, rising slightly to an 851,000 seasonally adjusted rate in August. However, this gain was recorded over a downwardly revised estimate for July, initially reported as 856,00 and lowered to 838,00. The February annualized rate, 877,000, was the fastest monthly pace since the Great Recession. Single-family starts are up almost 9% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive market conditions. Single-family permits declined slightly in August, falling 1.5%. However, on a year-to-date basis, single-family permits are nearly 11% higher compared to this time in 2016, representing an additional 54,400 permits for a total of 564,000 thus far this year.
With respect to housing’s economic impact, 56% of homes under construction in August were multifamily (610,000). As noted in the graph above, with recent production declines for apartments, the current count of multifamily units is effectively unchanged from a year ago. There were 472,000 single-family units under construction, a gain of 11% from this time in 2016.
These data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence and NAHB’s forecast of modest single-family construction growth in 2017. However, we can expect volatility ahead, as the counties affected by Hurricanes Harvey and Irma represent about 14% of national single-family production. The HMI was down in the most recent reading on overall concerns with respect to hurricane-related delays.
Multifamily starts declined in August from an upwardly revised July estimate, as the market seeks a balance between supply and demand. Multifamily starts were down almost 7% in August and five-plus september 2017
www.ncbia.com
page 7
Welcome New Members
Ben Cislo Howard Hanna Real Estate 440-787-4240 Sponsor: Kathleen Cislo, Howard Hanna Celia Torres Floor Coverings International 440-822-5050 Sponsor: John Toth, Floor Coverings International David Richey Hercules Fire Protection & Plumbing 440-748-3778 Sponsor: Chris Majzun Jr., Majzun Construction
Thank You for Renewing Your Membership Colin Coyne, 84 Lumber Company Doug Leuthold, Advanced Fiber Technology Bob Nicoll, CareWorksComp Rocco DeStefanis, Fifth Third Bank Michelle Williamson, Fidelity National Title John Toth, Floor Coverings International Annette Gilgenbach, Gilgenbach & Sons Excavating LLC Don Foster, Lorain-Medina Rural Electric Cooperative, Inc. Tim Mahoney, Rural Lorain County Water Authority April Tecco, Third Federal Savings
september 2017
www.ncbia.com
page 9
Executive Officer’s Report
by Judie Docs, CSP, MCSP, MIRM, CMP, CGP
In my article last month I mentioned to readers that I would be reporting my take-aways from the NAHB Association Management Conference that I attended in August. This month I would like to share what I learned in the session: Leadership Rising: How to Develop the New Generation of Association Leaders. Millennials are here now and a part of our association in our Young Professionals group. They are energetic, motivated members who are 35 and under, they are our next generation of leaders. They want to network, socialize and expand their professional life. They are movers and shakers, driven to succeed, committed to making a difference, creating events and activities to attract and retain young talent.
As with all other members, they need to keep in mind you will get out what you put into it. This means you want to be an active and productive member who mingles with other members and contributes to the community by creating useful content. When young professionals are empowered, they are deeply responsible for the authority given to them. Because young professionals are socially conscious and responsible, they won’t abuse the power that has been granted upon them. To the contrary, they will pour their strong work-ethic and their loyalty making the organization thrive and grow. Here are our YP’s (if you are 35 and younger and you are not listed, I apologize, please let me know): Sara Majzun-Garwood, BCT Alarm Services, Inc. (Chair)
So, let’s get to know them: Young professionals seek mentorship; they want to get to results as quickly as possible so they appreciate learning short-cuts. They want their baby boomer bosses to share their wisdom in a story, not a lecture or a speech.
Joseph Bott, Bott Law Firm, LTD. Ashley Caruso-Noe, Caruso’s Cabinets Victoria Caruso-Myers, Caruso’s Cabinets David Dragich, Cleveland Magazine
Young professionals are most comfortable when they can relate to strategies, concepts and ideas on their own. Needing time to process and once they are comfortable they focus and are extremely productive. They want to be associated with others that have their back, not those who are always on their back. Communicate with them, welcome questions, make them feel they are equal and valuable. Provide guidance, but do not micro-manage! (Actually no one likes to be micro-managed, especially if they are volunteers.) Play to their strengths, and lead them through observation. They love technology; technology makes their lives easier, both professionally and personally. This is certainly something that I would love to learn from them, as I am sure most of you do as well. Millennials who join a professional organization gain access to educational resources like industry research, newsletters, seminars, courses and events where leading industry thought-leaders share insight into the latest trends, innovations, technology and best practices. Members further their careers by staying ahead of their competitors. Membership in a professional organization brings them a chance to develop their leadership skills speaking at industry events, answering questions on forums or contributing content to the group’s newsletter or website. That is practice for becoming a stronger leader that will help them achieve their professional goals by becoming a trusted and respected addition to the group of industry leaders. Despite their reliance on social media platforms, millennials would prefer to become members of professional organizations that enhance their careers. However, millennials are looking for affordable groups that consist of their peers and utilize technology. september 2017
Tyler Yost, Dale Yost Construction Lindsay Yost-Bott, Dale Yost Construction Sharmaine Dixon, First Federal Savings of Lorain Celia Torres, Floor Coverings International Daniel Ganim, Ganim Construction LLC Crystal Kline, K. Hovnanian Homes Jeff Sherer, K. Hovnanian Homes Ben Cislo, Howard Hanna Jacob Glatz, Howard Hanna Brad Bristow, Jackson Dieken & Associates Jim Dosztal, JD Custom Design Kelsey Manning, L.E. Scott Electrical LLC Sam Page, Leppo Equipment Paul Samek, Luxury Heating Austin Merk, Maloney + Novotny Mike Sumpter, Mike’s Handyman & Landscape Myles Bremke, Northwest Savings Bank Justin Barefield, The Morning Journal Andrew Robins, Third Federal Savings
www.ncbia.com
page 11
Over 60 Percent of Construction Firms Are Profitable Ventures According to recently released data from the Annual Survey of Entrepreneurs (ASE), 61.3 percent of American construction firms are profitable commercial enterprises. The differences between construction and businesses in other industries in this regard are relatively minor. As Exhibit 1 shows, the shares of construction businesses recording positive profits, breaking even, and sustaining losses are all within 1.2 percentage points of the averages across all U.S. industries.
Sources of Home Buyers and New Renters According to NAHB’s latest special study, households who recently changed addresses fall into a natural order: 1) Buyers of Newer Homes, 2) Buyers of Older Homes, 3) Renters of Newer Homes, and 4) Renters of Older Homes. As you move up the scale from 4 to 1, the following interrelated tendencies become evident: The movers have, on average, higher incomes. More of the movers are previous home owners. Fewer are newly formed households (moving out of homes owned or rented by someone else). More are moving up in terms of subjectively measured housing quality. More are also moving up in terms of housing costs. For example, as the chart below shows, the average income of the recent movers declines systematically from $123,000 for group 1 to $49,000 for group 4.
The ASE is one of the newest surveys conducted by the U.S. Census Bureau. The survey began in 2014 and data from that inaugural year was released for public use only recently. Previous blog posts have discussed the ASE data on sources of start-up capital, in terms of both start-up capital for construction businesses and use of home equity as a source of start-up capital by U.S. businesses in general. This post focuses on profitability of construction businesses, including factors that have a negative influence on profits.
NAHB’s new study is based on data from the 2015 American Housing Survey (funded by HUD and conducted by the U.S. Census Bureau), and analyzes the 29.8 million households who moved into their present homes in the two-year period before the 2015 survey was conducted. Newer homes are defined as built in 2010 or later, the most recent cut-off point available in the survey data.
Overall, taxes and unpredictable business conditions are the two most common factors with negative impacts on business profitability, cited by 48.8 and 43.9 percent of U.S. businesses, and by 54.0 and 46.2 percent Home buyers and new tenants in rental housing can come from of construction businesses, respectively (Exhibit 2). households that were previously owners, households that were previously renters, and newly formed households. Former home owners account for a significantly larger share of home buyers than of new tenants in rental housing. In other words, a large share of home buyers consists of repeat buyers. Former renters and new households account for larger shares of the home buying market for older homes, still larger shares of the market for newer rental housing, and shares even larger than that of the market for older rental housing.
In fact, most of the items listed in Exhibit 2 affect construction businesses more often than other industries. The exception is changes in technology, which construction businesses cite as a problem considerably less compared to the average across all U.S. industries. However, the two items that most stand out and distinguish construction from other industries are 1) the challenges of finding quality labor and 2) customer late/nonpayment. Both affect construction industry much more often than other industries. The first of these items is consistent with NAHB builder surveys indicating that obtaining qualified labor is a significant and growing problem for many home builders. september 2017
Despite these differences, the four categories of recent movers are similar in some respects. All are either acquiring better housing without always paying more for it, or (for renters of older homes) achieving lower housing costs without always sacrificing quality. In addition, all four types of movers most often move relatively short distances (from less than 50 miles away) but without staying in the same neighborhood.
www.ncbia.com
page 13
Proclamation WHEREAS, a sense of caring and desire to strengthen the industry have motivated thousands of Associate members to volunteer their time and services to the needs of the North Coast Building Industry Association; and WHEREAS, our Associate members possess many skills and talents which they generously and enthusiastically apply to a variety of association tasks; and WHEREAS, all members of this association and the community benefit from the deeds of these selfless and dedicated individuals; and WHEREAS, the achievements of Associate members have become an essential part of the association’s proud history, tradition, and spirit; NOW, THEREFORE, I wish to honor the Associate members of North Coast Building Industry Association who give so freely of their valuable time, energy, and abilities by proclaiming the month of September 2017 to be officially designated as Associate Member Appreciation Month. I call upon all members to recognize this special period by appreciating and extolling the goodness of the Associate members and by following their shining example.
Chris Majzun, Jr. 2017 President, North Coast BIA
Legislative Review #10
NAHB Update
With Congress expected to take up work on tax reform legislation shortly, your NAHB leadership must prepare to advocate for the right bill based on our members’ priorities on some key elements. The Sept. 18 “Tax Reform and the Housing Industry” interactive webinars kicked us much closer to the goal. Thank you! If you were not able to participate in one of these sessions, it is not too late to get an understanding of the issues at hand. The online webcast session discusses: • The mortgage interest deduction, state and local tax deductions and their effects on single-family sales • The home equity deduction, energy tax incentives and other issues affecting remodelers • Multifamily issues, including the LIHTC, 1031s, and carried interest • General business tax issues, including the tax treatment of debt The webcast includes a member question and answer session and a review of some of the priorities on which NAHB is seeking input. Rest assured, the information garnered from these sessions will be used by the NAHB leadership as we develop our tax reform legislative strategy. In fact, the NAHB Executive Board will take this data into consideration when they meet in early October. It is not too late to weigh into the discussion. Review the webcast recording and provide your thoughts to NAHB at boardtopics@nahb. org. Remember, the webcast recording is a member-only resource, so you must be logged into nahb.org to view it.
TIF LEGISLATION SCHEDULED FOR ALL TESTIMONY TUESDAY HB 69 TIF DISTRICTS (Cupp, B.) To require reimbursement of certain township fire and emergency medical service levy revenue forgone because of the creation of a municipal tax increment financing district. HB 69 amends existing Tax Incremental Financing Law to add township fire, emergency medical and ambulance levies to the list of specialpurpose levies. HB 69 gives townships the choice of collecting the reimbursement, waiving it, or negotiating a partial reimbursement of the money the levy would have raised but for the TIF. The bill only applies prospectively and to TIFs created by municipal corporations where townships provide the fire, emergency, or rescue services. HB 69 has been scheduled for another committee hearing for all testimony on Tuesday. It is likely to continue moving and be voted out of committee in the coming weeks. If you are interested in submitting testimony opposing HB 69, please feel free to contact OHBA ASAP with any insight on the potential impact or concerns with adding fire and emergency services to the list of already required reimbursements. NPDES ENFORCEMENT FEEDBACK OHBA has received questions recently on the OEPA’s strict enforcement of both inspection and stabilization requirements pursuant to the NPDES permit. Although the rules have not changed in several years, OHBA is looking into some concerns raised with unreasonable, costly enforcement in some local jurisdictions. One particular instance relates to final stabilization and strict enforcement of seeding, growing grass in the middle of the summer, which was unsuccessful, but very expensive. If anyone has experienced similar issues or has a more reasonable experience to share, OHBA is currently gathering more information.
WE’RE HERE FOR THE LONG HAUL.
POWELL WILL PAY $1.8 MILLION TO SETTLE DEVELOPERS LAWSUIT A settlement has been reached following a decision by the Southern District of Ohio that a charter amendment put on the ballot and approved is unconstitutional, granting permanent injunctive relief.
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september 2017
OHBA Fall Board of Trustees Meeting is scheduled for Tuesday, November 14th at the Hilton Easton in Columbus. At this meeting you will obtain updated information on issues affecting the industry, election of 2018 officers, top awards will be given and find out who the 2017 The Best of Ohio Homes winners are. Meeting information has been sent out. If you need information, please contact build@ohiohba.com or 614-228-6648.
www.ncbia.com
page 15
Updates from the Bureau of Workers Comp There is so much going on in the world right now that workers’ comp seems like a trivial matter; in light of that, I sincerely hope that this email finds you safe and sound! When there are natural disasters, it reminds us to help each other through these challenges. With that thought in mind, I will take this opportunity to let you know that your team at CareWorksComp is ready and willing to help you with any workers’ comp matters. Here’s hoping for a quiet and uneventful fall. Upcoming deadlines: September 30, 2017 - “snapshot date” that BWC uses to capture costs in claims for the 2018 experience calculation. November 13, 2017 - Group Rating enrollment deadline. Please return your enrollment documents to be filed in the 2018 program. Employers already in group rating that qualify for the 2018 rate year will be automatically renewed into next year’s program. 2018 Group Programs: We have sent our group rating renewals to our current clients, and most of group retro invitations have been sent as well. Your business may be eligible for multiple programs (we refer to this as “dual eligibility”), in which case you have, or will receive, both a group rating invitation and a group retro invitation. We are eager to discuss these options with you, as each year there may be a different mix of cost-saving strategies that work best for your company.
factors to consider beyond fees and group savings. You also want to be absolutely confident that your TPA has a dedicated cost containment team that is focused on minimizing the financial impact of claims to reduce your premium dollars. Here’s how CareWorksComp does it: Continuously reviews and monitors all potential claims for handicap and settlement. Creates an action plan and identifies the best time frame to pursue the cost containment action in an effort to maximize the employer’s return on investment. Communicates with our customer on our pre- and post-cost containment efforts, and the expected savings as a result. Provides the most comprehensive cost containment experience for our customers. We will be sharing more specific information with you about our dynamic cost containment efforts later this fall. We encourage you to contact your CareWorksComp Program Manager, Bob Nicoll, to see how he can help your organization. Bob can be reached at: robert.nicoll@ careworkscomp.com or 800-837-3200 ext.58595
Our Philosophy Regarding Cost Containment Strategies: At this time of year as you are making workers’ comp program decisions, there are
NEW HOME BUYERS LIMITED WARRANTY BOOKS NOW AVAILABLE Warranty book Updated and Available FOR ONLY $20 EACH! In a binder so you can include other walkthrough documents, warranties, etc.
Email your order to kelli@ncbia.com or call the NCBIA Office at (440) 934-1090 page 16
www.ncbia.com
september 2017
Legislative Review #9 TIF LEGISLATION CONTINUES TO MOVE HB 69 TIF DISTRICTS (Cupp, B.) To require reimbursement of certain township fire and emergency medical service levy revenue forgone because of the creation of a municipal tax increment financing district.
both residential and commercial installation and inspection, including a licensing requirement. OHBA has received significant feedback on the potential negative impacts this would have and continues to be in contact with the chairman of the house committee HB 236 has been assigned.
HB 69 amends existing Tax Incremental Financing Law to add township fire, emergency medical and ambulance levies to the list of specialpurpose levies.
HB 339 Residential Contractors (Schaffer, T., Hagan, C.) To license residential only construction contractors and to make changes to the law regulating specialty construction contractors.
HB 69 gives townships the choice of collecting the reimbursement, waiving it, or negotiating a partial reimbursement of the money the levy would have raised but for the TIF. The bill only applies prospectively and to TIFs created by municipal corporations where townships provide the fire, emergency, or rescue services. HB 69 passed out of the House, and was referred to the Senate Ways and Means Committee.
HB 339 was introduced this week to create another specialty contractor (HVAC, plumbing, electrical, etc.) license for residential construction. OHBA has opposed such extension, unless there are changes made to allow for the use of unlicensed subcontractors, which is currently prohibited under the OCILB law.
HB 69 received sponsor testimony and will likely continue to move as the Senate meets in the coming weeks. OHBA has reached out to members around the state and other construction groups, but has yet to hear any specific, substantial concern. Please feel free to contact OHBA ASAP with any insight on the potential impact or concerns with adding fire and emergency services to the list of already required reimbursements. NUMEROUS PIECES OF LICENSING LEGISLATION UNDER DISCUSSION - Ranging from home inspectors to commercial roofing, there are quite a few bills under review dealing with the topic of licensing. OHBA has been closely watching and involved in discussions on each and every one. Below is a brief description of the bills.
SB 115 Roofing Contractors (Bacon, K.) To require the registration of roofing contractors. SB 115 sets forth an extensive registration requirement for residential roofing. This legislation is a national effort being pushed by insurance groups, and it appears there will be time, according to the sponsor, to discuss further. SB 115 has been referred to committee, and received sponsor testimony. If you have any questions, or would like to review language in more detail for any of the above legislation, please contact OHBA.
HB 148 Home Improvement Contractors (Patmon, B) To require statewide registration of home improvement contractors and to create a home improvement board. HB 148 provides exclusive authority to home improvement board to regulate home improvement contractors in Ohio. Prohibits any person from knowingly acting as a home improvement contractor unless the person is registered or the person is licensed under the OCILB and home improvement is covered by the license. Home improvement includes cost to owner exceeding $500 but does not exceed $25,000. HB 164 Commercial Roofing (Patton, T) To require commercial roofing contractors to have a license. This proposes to extend the current OCILB licensing provisions to include commercial roofing under the licensed specialty trades. HB 211 Home Inspectors (Hughes, J.) To require the licensure of home inspectors and to create the Ohio Home Inspector Board to regulate the licensure and performance. A substitute bill is expected next week to include some recommended changes from interested parties, including OHBA. HB 236 Elevator Law (Patton, T., Cupp, R) To enact Model Elevator Law, and make comprehensive changes to the current practice of
september 2017
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Mark These Dates in Your Calendar OCT 04 - Sales & Marketing Committee OCT 04 - Golf Committee Recap Meeting OCT 07 - Clambake - Amherst Eagles OCT 12 - Home Show Committee Meeting OCT 18 - General Membership Meeting Tom’s Country Place
8:30am 10:00am 6:00pm 9:00am 4:00pm
NOV 07 - Economic Forecast with HBA of Greater Cleveland (all day) NOV 08 - Board of Directors Meeting 5:00pm NOV 09 - SMC Girl’s Night Event - Parker’s Grill & Tavern (details to come) NOV 14-15 - OHBA Fall Board Meeting - Columbus, Ohio
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DEC 13 & 14 - OSHA Training - NCBIA Office Check the website at www.ncbia.com for up to date changes, additions and corrections to these events!
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page 18
NATIONAL ASSOCIATION OF HOME BUILDERS members could save even more on car insurance with a special discount from GEICO. Contact us today for your free quote!
geico.com/disc/nahb 1-800-368-2734 Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. GEICO contracts with various membership entities and other organizations, but these entities do not underwrite the offered insurance products. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. GEICO may not be involved in a formal relationship with each organization; however, you still may qualify for a special discount based on your membership, employment or affiliation with those organizations. GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. GEICO Gecko image © 1999-2016. © 2016 GEICO
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september 2017
THANK YOU SPIKES!
STATESMAN SPIKE (500-999 SPIKE CREDITS) Bob Yost.......................Dale Yost Construction............................ 605.25 SUPER SPIKE (250-499 SPIKE CREDITS) Mary H. Felton...........Fidelity National Title............................. 365.50 Terry Bennett...............Bennett Builders....................................... 297.75 ROYAL SPIKE (150-249 SPIKE CREDITS) Jack Kousma...............Kousma Insulation................................... 233.50 Chris Majzun Jr. .........Majzun Construction............................... 228.00 Bill Perritt....................Perritt Building Co................................... 220.50 Bucky Kopf..................Kopf Construction Corp......................... 190.00 Randy K. Strauss........Strauss Construction............................... 175.00 Bill Comerford............Hovey Kaiser Insurance Associates...... 173.50 Jeff Hensley.................Lake Star Building & Remodeling......... 161.75 RED SPIKE (100-149 SPIKE CREDITS) Tom Lahetta................Tom Lahetta Builders.............................. 136.00 Chris Majzun Sr..........Majzun Construction............................... 101.00 GREEN SPIKE (50-99 SPIKE CREDITS) Patrick Shenigo...........ShenCon Construction, LLC.................. 96.00 Thomas Caruso...........Caruso’s Cabinets.................................... 91.75 Tom Sear......................Ryan Homes............................................. 90.75 Mike Lapos..................Lapos Construction................................. 74.00 Chris Mead..................Maloney & Novotny, LLC...................... 64.00
Sara Majzun- Garwood.... BCT Alarm Services...................................... 62.50 Aaron Kalizewski.......Grande Maison Construction................. 57.50 Ray Allen Thom..........Thom Concrete ........................................ 50.50 LIFE SPIKE (25-49 SPIKE CREDITS) Jason Scott...................North Star Builders.................................. 39.00 Steve Schafer...............Schafer Development.............................. 30.50 Jeremy Vorndran........84 Lumber................................................. 30.50 John Daly.....................Old Republic Title.................................... 25.50 BLUE SPIKE (6-24 SPIKE CREDITS) Liz Schneider..............Dollar Bank............................................... 18.50 Ken Cassell..................Cassell Construction................................ 13.50 Jason Higgins..............Sunnyside Chevrolet............................... 14.00 Chris Collins...............Carter Lumber Company....................... 12.50 Michelle Nowlin.........First Federal Savings of Lorain.............. 12.50 Tom Ostrander............84 Lumber Co........................................... 11.50 Tami Lanphere............Town Money Saver.................................. 10.50 Jeff Lugar.....................ABC Supply Co........................................ 10.0 Keith Martin................MBD Homes............................................. 9.00 John Wargo..................Mason Structural Steel............................ 6.50
Our SPIKES are Our FOUNDATION
Codes, Rules and Regulations As NAHB has reported recently, the U.S. Occupational Safety and Health Administration (OSHA) is scheduled to begin enforcement of the silica rule in construction this Saturday, Sept. 23. NAHB’s Silica in Construction Toolkit, found at nahb.org/silica, provides background on crystalline silica as well as resources for helping home builders and remodelers comply with the rule. *OSHA has announced that it will consider good-faith efforts by employers to comply with the new silica rule for the first 30 days following the start of enforcement on Saturday, Sept. 23rd. As noted on NAHB’s priority issues page on this topic, OSHA has determined that a rule is needed to substantially reduce the risk of serious disease from exposure to airborne concentrations of silica dust. Silica is a component of soil, sand and granite, and occurs in many commonly used building products such as mortar, concrete, bricks, blocks, rocks and stones. It can be disturbed by construction activities ranging from cutting concrete and brick to moving soil around the jobsite. The crystalline silica rule issued in March 2016 is the most far-reaching regulatory initiative ever finalized for construction with an industryestimated cost of $5 billion per year — roughly $4 billion per year more than OSHA estimates. NAHB and the Construction Industry Safety september 2017
Coalition have requested that OSHA withdraw the rule and talk frankly with the construction industry about a more feasible and economical approach to dealing with the silica hazards. NAHB’s legal challenge on the silica rule is still pending. The case is scheduled to be argued before the court on Sept. 26. State-run OSHA programs have six months to adopt the federal rule or develop one that is equally effective. To learn more about the rule and its requirements, see NAHB’s silica toolkit. Information is also available on OSHA’s website at www.osha. gov/silica.For additional information, contact Rob Matuga at 800-3685242 x8507.
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How New Home Buyers Financed Their Homes in 2016 NAHB analysis of the 2016 Census Bureau Survey of Construction (SOC) data shows that reliance on non-conventional forms of financing varied across the United States, with its share exceeding 37% in the South Atlantic division but accounting for less than 20% of new singlefamily home starts in the East South Central and East North Central divisions. Nationwide, the share of non-conventional financing declined in 2016 and, for the first time since 2008, it accounted for less than a third of the market, 31.5%.
At the opposite end of the spectrum is the East South-Central division where only 16% of new single-family homes were financed using nonconventional methods. This share is roughly half of the US average, making it the lowest share of non-conventional financing in the nation. In the East North Central division, one out of five new single-family homes was purchased without conventional loans.
Non-conventional forms of financing, as opposed to conventional mortgage loans, include loans insured by the Federal Housing Administration (FHA), VA-backed loans, cash purchases and other types of financing such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgagebacked bonds. Looking at new single-family homes started in 2016, the South Atlantic division was most dependent on non-conventional financing, with its share exceeding 37% of the market. FHA-backed loans accounted for more than half of all non-conventional financing in the division, 19% of the market – the highest FHA-loans share in the country. The West South Central (35%), Mountain (33%) and Pacific (33%) divisions also registered elevated shares of non-conventional forms of financing, exceeding the national average. While home buyers in the South Atlantic and West South-Central division relied more heavily on FHA-insured loans, VA-backed loans dominated non-conventional financing in the Mountain division. Here, the share of VA-backed loans was close to 14%, twice as high as the national average, making the Mountain division the only region in the nation where the share of VAbacked loans exceeded that of cash purchases and other types of financing combined.
Next on the list are the New England and Middle Atlantic divisions where 30% and 26% of new home buyers, respectively, did not make use of conventional loans. FHA and VA-backed loans played a minimal role in these markets, with their shares varying from under 1% to 2%. Both divisions, however, stand out for registering the two highest shares of cash purchases in the nation. In New England, more than a quarter of all homes started in 2016 were purchased with cash. The Middle Atlantic registered the second highest share – 21%. In comparison, the US share of cash purchases was 9%. page 20
Nationwide, FHA-backed loans remained the most prevalent form of non-conventional financing of new home purchases – the status they temporarily lost to cash purchases in 2014 following the implemented decline in the 2014 FHA loan limits. For homes started in 2016, the national share of mortgages insured by the FHA was 13%. The share of VA-backed loans remained relatively stable in 2016, accounting for close to 7% of the market. The share of cash purchases, the second most prevalent form of nonconventional financing, declined slightly from 10% to 9% in 2016. The market share loss was more pronounced in New England, where cash purchases lost 8% of the market and conventional loans picked up the slack with their share expanding by 10%. Nevertheless, as discussed above, New England continues to register the nation’s highest share, with one in three new homes started in 2016 purchased with cash. At the other end of the spectrum is the East South Central division where less than 5% of single-family starts were financed with cash. The high prevalence of cash financing in the New England, East North Central and Middle Atlantic divisions can be partially explained by the popularity of custom homebuilding in these divisions, with all three claiming the top three custom home market shares in 2016. Custom homes are more likely to be financed with cash, especially if built by the owner acting as the general contractor. In 2016, a third of custom homes built by the owner were financed with cash, while only 5 percent of spec homes were purchased with cash. Other types of non-conventional financing methods – such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgage-backed bonds and other – are more common in the West South Central division (6%), exceeding the national average of 3%.
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september 2017
How New Home Buyers Financed Their Homes in 2016 (continued from page 20)
return is partially consistent with the important theoretical work asserted by Robert Lucas, Jr. on the non-neutrality of money, that declines in the money supply should increase productivity, however inflation should fall as well.
Although the FOMC maintained the federal funds rate; beginning in October, it will begin to normalize its balance sheet according to the plans outlined in June. The Fed will begin normalization by decreasing reinvestment of principal payments. This will occur by only making future reinvestments in excess of defined caps. For MBS, this monthly cap will start at $4 billion. The monthly cap will then increase in $4 billion steps in three-month intervals until rising to a $20 billion cap. For U.S. Treasury securities, this monthly cap will start at $6 billion. The monthly cap will then increase in $6 billion steps in three-month intervals until rising to a $30 billion cap. These plans imply that the process will be gradual and predictable, and that balance sheet normalization will shrink the Fed’s balance sheet.
The rate on a 30-Year fixed rate mortgage includes both the rate on the 10-Year Treasury note and the risk premium associated with mortgage lending. The activities of the GSEs ensures that the mortgage risk premium remains low and steady. However, the figure above explains why the FOMC initially began to purchase MBS and the impact of Chairman Bernanke’s comments on mortgage rates.
Between 2007 and November 25, 2008, the date when Federal Reserve announced it would initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises and mortgagebacked securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae, mortgage rates fell somewhat, but the mortgage risk premium rose A key concern of the balance sheet normalization process is that interest dramatically. rates, mortgage rates, could spike dramatically. The figure above shows the historical basis for this concern. In testimony to Congress on May 22, In response to these and additional purchases, the mortgage risk 2013, then FOMC Chairman Ben Bernanke said “If we see continued premium shrank. Second, in response to the taper tantrum the mortgage improvement and we have confidence that that is going to be sustained, risk premium rose somewhat but declined over the following weeks. The then in the next few meetings, we could take a step down in our pace of additional vertical lines on the graph above refer to important monetary purchases.” Chairman Bernanke reiterated this view on June 19, 2013 in policy events in recent years. a press conference. In response, the rate on the 10-year Treasury note rose from 2.03 percent on May 22, 2013 to 2.94 percent on December This event analysis suggests that, all else remaining the same, the 19, 2013, although it had already begun to rise. However, the rate on the balance sheet unwinding could push mortgage rates up, but not 3-month Treasury bill did not show significant increase over the same dramatically. More specifically, both a higher real return and, to a smaller period. degree, a higher mortgage risk premium would be the likely channels pushing up mortgage rates. However, mortgage rates have fallen since the FOMC articulated that normalization was coming “relatively soon”. The overall path of mortgage rates will also depend on inflation expectations. If expectations of inflation decline, as would flow from money’s non-neutrality and as is expected in the near-term following the latest Consumer Price Index release, then any upward pressure could be offset, but, if inflation expectations rise, say in response to a fiscal policy shock when the labor market is tight, then mortgage rates could move up further. Instead, analyzing the economic components of the 10-Year Treasury note rate, as shown in the figure above, provides some explanation of the “taper tantrum”. While financial markets’ expectations of inflation remained about stable in the months following the Chairman’s statements, the real return on the 10-Year Treasury moved from a negative percentage to a positive one. This move in the expected real september 2017
As a result, it is important to note that since an unwinding like this is historic, the outlook for mortgage rate is “uncertain”, as distinct from “risky”. Since the FOMC’s undertaking is unprecedented, it’s difficult to estimate with high confidence all of the potential outcomes and their associated likelihood of materializing.
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NCBIA Photo Gallery : 2017 Softball Family Picnic
september 2017
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NCBIA Photo Gallery: SMC Networking After Hours at Pogie’s Clubhouse on Jefferson - August 21, 2017
Who didn’t know that their photo was being taken while they casually talked to the photographer?
Congratulations to Mary Felton who won our Mystery Raffle Box...Jason Rodriguez shown here checking out all the loot inside.
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september 2017
NCBIA Photo Gallery: SMC Networking After Hours at Pogie’s Clubhouse on Jefferson Cool... Like my Dad!
Special Thanks to Bill & Diane Perritt for Sponsoring this event! Our Newest Young Professional????
Jason Rodriguez from the Carpentry Dept. at the Lorain County Joint Vocational School september 2017
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We’re in the offering NAHB members up to $1,000 business.
2017 Chevrolet Low Cab Forward 3500HD
2017 Chevrolet Silverado 2500HD
2017 GMC Sierra 1500
2017 Chevrolet Express 2500 Cargo Van
NAHB MEMBERS BENEFIT FROM THESE SPECIAL OFFERS. Members of the National Association of Home Builders (NAHB) can now enjoy a private offer1 of up to $1,000 toward the purchase or lease of most new Chevrolet, Buick and GMC vehicles. Choose an eligible vehicle at your local dealer and present your NAHB proof of membership. You can add on incentives from the National Fleet Purchase Program2 and Business Choice3 to get the best value on vehicles that run your business. For private offer details, visit nahb.org/gm.
Example offer for NAHB members who are business owners purchasing a 2017 Chevrolet Express 2500 Cargo Van. Up to
$1,000 Private Offer1
Up to
+
$4,000
National Fleet Purchase Program (FVX)2
Up to
+
$1,200
Eligible Accessory Cash Allowance3,4
Up to
=
$6,200 In Potential Value
1 Private offer amount varies by model. Up to $500 offer for retail deliveries and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2016 and 2017 model year vehicles. Customer must take delivery by 1/2/18. Not compatible with other private offers. Not valid on prior purchases. Compatible with many current incentives. Incentives are subject to change without notice. Offer excludes Chevrolet Bolt, Camaro, Chevy SS, Corvette, Sonic, Spark, Trax, Volt, Buick Cascada, Lacrosse, Regal, Verano and all Cadillac vehicles. Additional GM models may be excluded from time to time at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers. Not compatible with some other offers. Take delivery by 12/31/17. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/non-business-related transportation purposes. Must provide proof of business. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties, and ordering, consult your dealer or visit gmbusinesschoice.com. Take delivery by 1/2/18. 4 Not eligible on associated accessories from third-party independent suppliers. Not available with some other offers. Take delivery by 1/2/18. See dealer for details. ©2017 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates, or licensors.