HBA Cornerstone Magazine, June 2024

2024 Leadership Board

Dax Campbell President Campbell Construction & Company

Heath Kelly Secretary Heath Kelly Construction

Austin Tenpenny 1st Vice President Adoor Properties

Paul Stanley 2nd Vice President The First Bank

Lindy Hurd Past 2nd Vice President/SMC Chair First International Title

Amir Fooladi Immediate Past President ParsCo

Steve Moorhead Legal Counsel Moorhead Law Group

Jennifer Reese Treasurer Reese Construction Services

Kevin Sluder 3rd Vice President Gene’s Floor Covering

Josh Peden Financial Officer Hudson, Peden & Associates

2024 Home Builders

Association of West Florida Board of Directors

SENIOR OFFICERS

Dax Campbell, Campbell Construction & Company, President

Austin Tenpenny, Adoor Properties, First Vice President

Jennifer Reese, Reese Construction Services, Treasurer

Heath Kelly, Heath Kelly Construction, Secretary

Josh Peden, Hudson, Peden & Associates, Financial Officer

Lindy Hurd, First International Title, Past 2nd VP, Sales Council Chair

Kevin Sluder, Gene’s Floor Covering, 3rd Vice President

Paul Stanley, The First Bank, 2nd Vice President

Amir Fooladi, Encore Homes by ParsCo, Immediate Past-President

Stephen Moorhead, Moorhead Law Group, Legal Counsel

ASSOCIATE MEMBERS

Bill Batting, REW Materials

Jim Bouterie, Pensacola Energy

Rick Byars, Florida Power & Light

Mickey Clinard, Renasant Mortgage

Laura Gilmore, Fairway Ind. Mortgage, Affordable Housing Liaison

Chris Graye, Graye’s Granite

Thomas Hammond, Hammond Engineering, Civil Engineering Liaison

John Hattaway, Hattaway Home Design, Cost and Codes Chair

Shellie Isakson-Smith, SWBC

Mary Jordan, Gulf Coast Insurance, Tradesman/Education Council Chair

Daniel Monie, KJM Land Surveying

Alex Niedermayer, Underwood Anderson & Associates

Zach Noel, Clear Title of NW FL

Suzanne Pollard-Spann, Legacy Insurance Brokers, Ambassadors Chair

Marty Rich, University Lending Group

Wilma Shortall, The First Bank

Pam Smith, Real Estate Counselors, Pensacola Assn. of Realtors Liaison

Chris Thomas, Acentria Insurance

Janson Thomas, Swift Supply

BUILDER/DEVELOPER MEMBERS

Chad Edgar, Joe-Brad Construction

Joseph Everson, D.R. Horton

Fred Gunther, Gunther Properties

Drew Hardgrave, Landshark Homes

Alton Lister, Lister Builders, Governmental Affairs Chair

Kyle McGee, Sunchase Construction

Tomas Ondra, Ondra Home Building

Shon Owens, Owens Custom Homes & Construction

Josh Rayls, Holiday Builders

Douglas Russell, R-Squared Construction

Monte Williams, Signature Homes

Anton Zaynakov, Grand Builders

PAST-PRESIDENT/EX-OFFICIO MEMBERS

Blaine Flynn, Flynn Built

Edwin Henry, Henry Homes

Shelby Johnson, Johnson Construction

Russ Parris, Parris Construction Company

Newman Rodgers, Newman Rodgers Construction

Thomas Westerheim, Westerheim Properties

Doug Whitfield, Doug Whitfield Residential Designer

Curtis Wiggins, Wiggins Plumbing

CORNERSTONE MAGAZINE CONTENTS

JENNIFER MANCINI

Executive Director jennifer@hbawf.com

HBAWF News

Publisher Malcolm Ballinger malcolm@ballingerpublishing.com

Executive Editor Kelly Oden kelly@ballingerpublishing.com

Art Director Ian Lett ian@ballingerpublishing.com

Graphic Designer/Ad Coordinator Ryan Dugger advertise@ballingerpublishing.com

Editor Morgan Cole morgan@ballingerpublishing.com

Assistant Editor Nicole Willis nicole@ballingerpublishing.com

Sales & Marketing

Paula Rode, Account Executive, ext. 28 paula@ballingerpublishing.com

Geneva Strange, Account Executive, ext. 31 geneva@ballingerpublishing.com

Cornerstone, the monthly publication of the Home Builders Associa-tion of West Florida serving Escambia and Santa Rosa Counties, is published monthly, twelve (12x) per year. Send address changes to HBA of West Florida, 4400 Bayou Boulevard, Suite 45, Pensacola, Florida 32503-1910. Cornerstone, is published in the interests of all segments of the home building industry and is distributed to its members and others associated with the HBA of West Florida. HBA of West Florida and Ballinger Publishing does not accept responsi-bility for, or endorse any statement or claims made by advertisers or authors of any articles. Every effort has been made to assure ac-curacy of information, but authenticity cannot be guaranteed. No part of this publication may be reproduced without the written consent of Home Builders Association of West Florida, Copyright ©, 4400 Bayou Boulevard, Suite 45, Pensacola, Florida 32503-1910, 850.476.0318. Advertisers and advertorials in Cornerstone do not constitute an offer for sale in states where prohibited by law.

We are currently taking booth registrations for the Home & Product EXPO in September, I encourage all vendors in the construction industry to grab a spot early for this event. I am sure this will fill up quickly especially being in the month of September. Looking forward to that time when the temps start to subside and we get ready for the fall season!

I would like to remind you all about the candidate forum event with the HBA, ABC, and NAIOP on June 20th. This is a great opportunity to combine these development and construction associations together for a networking event that will surely be beneficial to all that attend. I would also like to congratulate Mr. Paul Stanley of The First Bank on his retirement this month. Paul has been an incredible leader on the HBA senior board and has been an asset to the Association for many years. His recommendation and vision for the above mentioned event is one example of the exemplary service he has given to the HBA. Paul, has become a personal friend of mine and mentor and will be greatly missed. Enjoy your retirement, Paul!

Unanimous U.S. Supreme Court Decision Strikes Impact Fees

by Stephen R. Moorhead

On April 12, 2024, the United States Supreme Court handed down a ruling in Sheetz v. County of El Dorado which will shape impact fee practices across the country.

In the realm of land use law, Sheetz v. County of El Dorado stands as a beacon of property rights advocacy and a catalyst for reforming impact fee practices. This landmark case not only affirmed the rights of property owners but also sparked a crucial dialogue about the fairness and legality of impact fees.

At its core, the case centered on the Sheetz family’s right to develop their land in accordance with local zoning regulations by obtaining a permit for a single-family home. El Dorado County is a fastgrowing community, and its governing body sought to impose hefty impact fees aimed at mitigating the infrastructural impacts as a condition for approval of a permit.

Writing for a unanimous Court, Justice Barret’s opinion relied upon the Takings Clause of the Fifth

“When the government withholds or conditions a building permit for reasons unrelated to its legitimate land-use interests, those actions amount to extortion.”

Amendment and held there can be no taking of property without just compensation. The Court ruled that the conditioning of a permit upon the payment of the impact fee constituted a “taking.” Counties have broad power to regulate land use. But those regulations can go too far, particularly, when conditions are placed on the issuance of a permit. The Court stated, “when the government withholds or conditions a building permit for reasons unrelated to its legitimate land-use interests, those actions amount to extortion. The Court upheld a two-part test. First, the impact fee (the condition) must have an “essential nexus to the government’s land use… not leveraging its permitting monopoly to exact private property without paying for it.” Second, the fee must have “rough proportionality to the development’s impact on the land-use interest.”

Closer to home, impact fees imposed by Santa Rosa County were challenged in 2020 by the Home Builders Association of West Florida and others. There, the Circuit Court, in a decision upheld by the First District Court of Appeal, struck the fees as being an unconstitutional tax. Florida has adopted a test similar to the one the US Supreme Court based its decision upon. Under the Florida Constitution, impact fees must satisfy the “dual rational nexus” test.

The impact fee must offset needs that are attributed to the new development and the fees collected must be earmarked for the “substantial benefit of” the new development’s residents.

Northwest Florida is a paradise, and it is natural for citizens of the community to ask that development pay for itself. However, the new homebuyer is not at fault for the failure of government to provide infrastructure to meet the growing demand with the increase in the tax base that the development creates. In the last 10 years, Santa Rosa County’s receipts from ad valorem taxation have gone from $46 million to $90 million. In the last 5 years, over $40 million has been generated by the half cent sales tax. These taxes are paid by property owners and those making purchases in the County. The impact fee proposed by the County, which will be paid by only those purchasing new homes. By comparison, the current impact fee is projected to generate only $3-4 million. Impact fees are expensive to create, they must be based upon costly studies and are often subject to litigation given the disfavor by the courts. Given the minimal relative revenue and the costs associated with the fee, in our view, the juice isn’t worth the squeeze.

About the Author: Stephen R. Moorhead, a real estate attorney serving the Pensacola community for more than 30 years, is the founding partner of Moorhead Law Group. He is Board Certified in Real Estate Law by the Florida Bar and is rated AVPreeminent by Martindale-Hubbell, Inc. Steve serves as the General Counsel for the Home Builders Association of West Florida and is an active board member of Achieve Escambia, ReadyKids!, and the Greater Pensacola Chamber of Commerce.

How Many People Work in Residential Construction?

According to the latest American Community Survey, 11.2 million people — including self-employed workers — worked in construction in 2022. NAHB estimates that, out of this total, 4.7 million people worked in residential construction, accounting for 2.9% of the U.S. employed civilian labor force.

Not surprisingly, the most populous state — California — also has the most residential construction workers. Over 650,000 California residents worked in home building in 2022, accounting for 3.4% of the state-employed labor force.

In terms of percentages, fast-growing states with a high prevalence of seasonal, vacation homes top the list of states with the highest share of residential construction workers in 2022. Three states in the Mountain Division — Idaho, Utah, and Montana — take the top spots on the list with 5.9%, 5.4% and 4.8%, respectively, of the employed labor force working in home building. Florida — which has registered one of the fastest growing populations since the start of the pandemic — is next on the list with a share of 4.4%, down from its peak in 2006 at 6.5%.

In addition, 10 other states register shares of residential construction workers that approach 4%:

• Maine (3.9%)

• Wyoming (3.8%)

• Vermont (3.8%)

• Washington, Colorado, New Hampshire and Nevada (3.7%)

• Arizona, North Carolina, and Oregon (3.5%)

NAHB’s analysis also identifies congressional districts where home building accounts for particularly high employment levels and share of local jobs. As of 2022, the average congressional district has about 10,800 residents working in residential construction, but that number is often significantly higher. For example, in Idaho’s 1st Congressional District, more than 29,000 residents are in home building, and Idaho’s 2nd Congressional District has close to 25,000 residents working in home building.

Eight other congressional districts have over 20,000 residents working in residential construction:

• Florida’s 26th Congressional District (24,700)

• Utah’s 4th Congressional District (24,500)

• Utah’s 2nd Congressional District (24,300)

• Florida’s 17th Congressional District (21,400)

• Utah’s 1st Congressional District (20,600)

• Florida’s 7th Congressional District (20,500)

• California’s 29th Congressional District (20,400)

• Colorado 8th Congressional District (20,100)

By design, Congressional districts are drawn to represent roughly the same number of people. So generally, large numbers of residential construction workers translate into high shares of residential construction workers in their district employed labor forces.

Source: NAHB

As the construction industry continues to evolve, staying up to date with the latest trends, technologies, and best practices becomes crucial for success. That’s why we’re thrilled to invite you to the Southeast Building Conference (SEBC) 2024!

Save the Date

SEBC 2024 will take place July 24-25 at the Orange County Convention Center, bringing together industry leaders, experts, and professionals like you for two jam-packed days of networking, learning, and innovation.

Why Attend SEBC 2024?

Industry Insights: Gain valuable insights in our continuing education sessions and panel discussions on current and future trends shaping the construction industry.

Networking Opportunities: Connect with fellow contractors, suppliers, and exhibitors to forge new partnerships and collaborations.

Location, Location, Location!

This year, SEBC returns to sunny Orlando, offering you the perfect opportunity to combine business with pleasure. Enjoy the beautiful surroundings, warm weather, and world-class amenities while expanding your professional horizons.

Continuing Education: Participate in your choice of five education tracks, covering a wide range of topics from project management and sustainability to the latest construction technologies. Plus earn all 14 hours needed for your Florida license renewal!

Expo Hall: Explore the latest products, services, and innovations showcased by leading suppliers and manufacturers in the construction industry at the region’s largest expo!

Registration Details

Early bird registration is now open! Take advantage of discounted rates, including a FREE EXPO HALL PASS and secure your spot at SEBC 2024 today. Visit our website www.sebcshow. com to register and learn more about the schedule, speakers, exhibitors, and special events planned for this year.

Be Part of Something Big

SEBC 2024 promises to be an unforgettable experience, filled with opportunities to learn, grow, and connect with industry peers. Don’t miss out on this chance to elevate your career, expand your knowledge, and take your contracting business to new heights.

We look forward to welcoming you to SEBC 2024 and celebrating the spirit of innovation, excellence, and community that defines our industry.

See you in Orlando!

City Launches Strive to Thrive: Pensacola 2035

The City of Pensacola recently launched Strive to Thrive: Pensacola 2035 to develop a vision for the next 10 years. The City is looking for stakeholder support to assist with sharing the strategic plan efforts.

The strategic plan survey is live and can be found here- at pensacola2035.com and will be available for input through July 31. In addition, the City is hosting a public Open House on June 26 from 4-7 pm. The public Open House will include food truck tickets for participants who take the survey, and they will also have raffle prizes including a smart TV, Nintendo Switch, and more.

The strategic planning process includes Vision Group Workshops that are open to the public. The second workshop will be held on Thursday, June 27 in the Hagler-Mason Conference Room on the second floor of City Hall. The all-day workshop will begin at 9 amand will end around 3:30 pm. You are welcome to attend and observe the proceedings.

City of Pensacola appreciate your commitment to the community and appreciate any assistance you can provide to help share the survey and promote their efforts to create a strong vision for the next 10 years.

Housing Construction Cost Growth a Crucial Inflation Hurdle

The Consumer Price Index measure of year-over-year inflation rose by 3.5% and 3.4% in March and April, respectively. However, the shelter index increased by a larger 5.7% and 5.5% during those two months. Shelter costs continue to put upward pressure on overall inflation, accounting for nearly 70% of the total increase in all items, excluding food and energy. This ongoing, elevated and uneven inflation is likely to keep the Federal Reserve on hold until at least December of this year.

This upward pressure on shelter costs is a direct result of higher construction costs and limited housing supply. The April Producer Price Index shows that prices for inputs to residential construction increased 2.77% from a year ago, the largest yearly increase since February of 2023. With respect to particular products, the index for softwood lumber increased 6.2% in April. This was the largest month-overmonth increase since January of 2022, when the

index increased 21.56%. Also of note, copper prices are on the rise. The non-seasonally adjusted special commodity grouping PPI for copper increased 3.46% in April alone. Copper futures pricing is at the highest level since early 2022.

The ongoing inflation challenges and expected delays for the Fed’s eventual easing of monetary policy have taken a toll on builder sentiment. Builder confidence in the market for newly built single-family homes dropped six points in May to a level of 45, according to the NAHB/ Wells Fargo Housing Market Index. The somewhat below-neutral reading is consistent with recent construction data: Single-family starts decreased 0.4% to a 1.03 million seasonally adjusted annual rate in April. However, this pace is 17.7% higher than a year ago and 26% higher on a year-to-date basis.

Meanwhile, construction of multifamily units increased in April to an annualized 329,000 pace. However, this rate is 32% lower than a year ago. Moving forward, multifamily production will see additional declines, while the pace of completions remains elevated. Indeed, April marked the fifth consecutive month for which the seasonally adjusted rate of multifamily completions was above 500,000. Currently, there are 1.8 units being completed for each unit that is starting construction. This is a dramatic reversal from when the ratio was near 1:1 in mid-2020 before falling to 0.6:1 in early 2022, when multifamily construction accelerated. In contrast, townhouse construction continues to be

strong, accounting for almost 18% of single-family housing starts for the first three months of the year. Single-family attached starts totaled 42,000 in the first quarter of 2024, which is 45% higher than the first quarter of 2023.

Nonetheless, higher mortgage rates in April (averaging 6.99% per Freddie Mac) weakened the pace of home sales. Sales of newly built, single-family homes in April fell 4.7% to a 634,000 seasonally adjusted annual rate. Total existing home sales declined 1.9% in April to a seasonally adjusted annual rate of 4.14 million, 1.9% lower than a year ago. At the current sales rate, April’s unsold inventory sits at just a 3.5-month supply.

Limited inventory, higher construction costs, and elevated interest rates continue to frustrate prospective home buyers. The new quarterly NAHB/ Wells Fargo Cost of Housing Index (CHI) highlights the burden that housing costs represent for middle- and low-income families. In its inaugural release for the first quarter of 2024, the CHI revealed that a typical family in the U.S. must spend 38% of its income to cover the mortgage payment on a median-priced new single-family home. Low-income families, defined as those earning only 50% of median income, would have to spend 77% of their earnings to pay for the same new home.

Dr. Robert Dietz NAHB Chief Economist @dietz_econ

Buyers Willing to Give up Land in Exchange for Homeownership

As the National Association of Home Builders (NAHB) celebrates National Homeownership Month in June, high mortgage rates and double-digit growth in home prices since COVID-19 are putting buyers in a position to compromise on lot sizes and shrink their square footage to buy a home they can afford, according to survey results from NAHB’s What Home Buyers Really Want, 2024 Edition.

“Buyers place a high value on homeownership and are prepared to make significant compromises to invest in their future,” said Carl Harris, chairman of NAHB and a custom home builder from Wichita, Kan. “Home builders are willing to meet this demand but are hamstrung by a mix of regulatory burdens. Housing industry leaders are ready and willing to work with policymakers to find concrete solutions to help more families achieve the American Dream.”

Nearly 4 out of 10 buyers would be willing to give up land in exchange for owning a home and more than a third (35%) will accept a smaller house if that’s what it takes to buy it. Yet, ineffective zoning plans make it harder and more expensive for builders to construct smaller homes on smaller plots of land.

NAHB recently released a 10-point housing plan to offer solutions for lawmakers to improve housing

affordability. The plan included a recommendation for local and state governments to reduce minimum lot sizes, allow more accessory dwelling units and promote missing middle housing (e.g., duplexes and townhomes). Missing middle housing can assist in both increasing the number of units built and units available in a wide variety of price points.

The value Americans place on owning their home continues even through challenging times. According to a recent Federal Reserve Bank of New York survey, more than two-thirds (67%) of Americans say that housing is a good investment. Another Federal Reserve survey, which examines household balance sheets, shows that homeownership is key to building household wealth. For families that owned a home, the median net housing value increased from $139,000 in 2019 to $201,000 in 2022, as home prices rose, and home mortgage debt was approximately flat.

To urge lawmakers to take action to improve the attainability of homes, builders from across the country will meet with lawmakers on Capitol Hill in Washington, D.C., on June 12 to discuss solutions.

Source: NAHB

C A N D I D A T E F O R U M

h o s t e d b y

L O C A L C A N D I D A T E F O R U M

& N E T W O R K I N G S O C I A L

A s a r e p r e s e n t a t i v e o f t h e C o n s t r u c t i o n / D e v e l o p m e n t

s e c t o r , w e e x t e n d a w a r m i n v i t a t i o n f o r y o u t o j o i n u s

f o r a P o l i t i c a l C a n d i d a t e F o r u m a n d S o c i a l H o u r . T h i s

e v e n t w i l l p r o v i d e n e t w o r k i n g o p p o r t u n i t i e s a c r o s s o u r

a s s o c i a t i o n s a n d t h e o p p o r t u n i t y t o h e a r f r o m l o c a l

c a n d i d a t e s r u n n i n g f o r l o c a l p o l i t i c a l p o s i t i o n s i n

E s c a m b i a a n d S a n t a R o s a C o u n t i e s .

T h u r s d a y , j u n e 2 o t h 5 : 3 0 - 7 : 3 0 p m c s t

S c e n i c H i l l s C o u n t r y C l u b

8 8 9 1 B u r n i n g T r e e R o a d

P e n s a c o l a F l 3 2 5 1 5

r e g i s t e r b e l o w

h t t p s : / / b i t . l y / c a n d i d a t e f o u r m

SPIKE CLUB

In construction, a spike is a steel object that is essential to making a building strong. As in construction, the HBA of West Florida sees a Spike as someone that works to keep our association strong. Spikes work on the recruitment and retention of members in addition to keeping members active with the association. Anyone is eligible for Spike status. On Spike credit is awarded for each new member recruited and an additional credit is awarded for that new member’s renewal on or before their anniversary date. If you help to retain a member, you are eligible to receive a half point for each member.

Spike Club Levels

Spike Candidate 1-5 credits

Blue Spike 6-24

Life Spike 25-49

Green Spike 50-99

Red Spike 100-149

Royal Spike 150-249

Super Spike 250-499

Statesman Spike 500-999

Grand Spike 1000-1499

All-Time Big Spike 1500+ Spike Club Members and their credits as of 09/30/2023.

Statesman Spike

Harold Logan

Super

Rod Hurston

Royal Spike

Rick Sprague

William “Billy” Moore

Charlie

Kim

Spike Credits

Shelby

WHEN THE POWER’S OFF, WE KEEP ON. BEFORE, DURING AND AFTER THE STORM

Before the Storm: Natural gas lines require you to take no special precautions. There is no need to turn off your gas meter.

During the Storm: Most natural gas cooking and water heating appliances will continue to operate safely without electricity. Some may require that you manually light the pilot, and this should be done according to the appliance manufacturer’s instructions.

Natural Gas Power Generators: In the event of power failure, the generator will return electricity to the structure within 30 seconds and continue providing electricity until the original power source has returned.

We Are Your Energy

Get up to $3,000 in rebates when you convert to natural gas. Get all the details at PensacolaEnergy.com or call 850-436-5050.

After the Storm: When returning from evacuation, check natural gas appliances for possible damage or leaks. If you smell a strong sulfur odor, leave immediately and call Pensacola Energy Emergency Services at 850474-5300.

If no smell is present, operation of natural gas appliances should be safe. If a natural gas generator was in use for several days, the oil should be checked, and, if necessary, changed.

Storm Repair: During clean-up and repair, avoid natural gas interruption and damage to the gas lines by calling 811 or 1-800-432-4770 before digging.