2016 Builder Day at the Capitol Issue Brief

BUILDER

DAY AT THE CAPITOL

BUILDER

DAY AT THE CAPITOL AND LEGISLATIVE RECEPTION

MARCH 15, 2016

OUR TEAM CONNECT WITH THE ADVOCACY TEAM

DAVID SIEGEL

REMI STONE

JAMES VAGLE

BUILDERS ASSOCIATION OF THE TWIN CITIES EXECUTIVE DIRECTOR david@batc.org Twitter: @davidsiegel1

BUILDERS ASSOCIATION OF MINNESOTA EXECUTIVE VICE PRESIDENT remi@bamn.org Twitter: @remistone

BUILDERS ASSOCIATION OF THE TWIN CITIES DIRECTOR OF ADVOCACY james@batc.org Twitter: @jvags

MARK FOSTER

FORREST CYR

BUILDERS ASSOCIATION OF THE TWIN CITIES POLITICAL ENGAGEMENT MANAGER mark@batc.org Twitter: @robmarkfoster

BUILDERS ASSOCIATION OF MINNESOTA DIRECTOR OF GOVERNMENT AFFAIRS AND COMMUNICATIONS forrest@bamn.org Twitter: @ForrestCyr

JANE DEAUSTIN CENTRAL MINNESOTA BUILDERS ASSOCIATION GOVERNMENT AFFAIRS DIRECTOR jane@cmbaonline.org

TAYLOR RIDDERBUSCH ROCHESTER AREA BUILDERS PUBLIC AFFAIRS DIRECTOR TaylorR@rochesterareabuilders.com

PETER COYLE

BRIAN HALLORAN

LARRY REDMOND

ATTORNEY & LOBBYIST, LARKIN HOFFMAN

LOBBYIST, REDMOND & ASSOCIATES

LOBBYIST, REDMOND & ASSOCIATES

Welcome

to Builder Day at the Capitol.

Thank you for joining us at Builder Day at the Capitol!

We have two main goals for today: 1

2

Share with Legislators

Ask for Support

First, we want to share with legislators all of the good work our industry does when building and remodeling homes for Minnesota families.

Second, we want to ask legislators to support some key issues that impact housing affordability.

Goal one is quite simple because our industry generates so many positive impacts!

Goal two is at the heart of all homebuilding associations!

For starters, we generate tremendous state and local economic activity. The homebuilding and remodeling industry creates new income and jobs for residents, and additional revenue for local governments. We employ highly trained and skilled laborers, both union and non-union, with average wages for subcontractors at $28/hour in Greater Minnesota, and $32/hour in the MSP region. And most of all, we build and remodel homes for Minnesota families. Proudly share all the good work being done by our industry!

It asks legislators to think about the role government plays in our collective effort to achieve greater housing affordability and to support ideas that contain costs. Negative impacts on housing affordability are often disguised in bill titles or the sweet sound bites of committee testimony. It’s our job to reveal the very real cost drivers hidden within statutory script.

Thank you for volunteering your day to support the industry that is so important to each of us and each Minnesotan. Enjoy your time today connecting with legislators, key staff, and your colleagues in the homebuilding industry.

#MNBDAC

•

#homeBuildingmatters

Legislative Issues I. HOME OWNERSHIP INITIATIVE – BALANCE RISK, BRING MULTI-FAMILY OWNERSHIP BACK Issue Background— What You Need to Know Owner-occupied multi-family housing is not being built at a rate that keeps up with market demand.

Builders avoid this product type because of problems with the existing warranty law, the lack of use of the Notice and Opportunity to Repair law (NOR), and litigation surrounding common interest communities (CIC) / home owner associations (HOA).

This creates a void in the mix of housing options and, in particular, limits the number of affordable homes in our market.

Not only is this a problem for homeowners and builders, it’s a serious problem for local governments who need a better mix of owner and rental properties at all price-points.

Notice and Opportunity to Repair (NOR) provisions require early communication and inspections of a potential warranty claim—the goal is to identify any problems, fix them quickly at a lower cost, and ensure that all parties commit to discussing and attempting to fix any issues prior to heading to court.

This problem is not unique to Minnesota; several other states have addressed this by passing laws to better resolve construction disputes.

Our Ask of Legislators: Support legislation that better manages construction disputes in condo and townhome projects.

Create a process that ensures the majority of HOA members, not just a few on an HOA Board, are informed and approve of the initiation of formal disputes with project developers and builders.

Require Notice and Opportunity to Repair (NOR) to apply to all claims against a builder or developer, and to have the NOR process be exhausted on all claims (warranty, negligence and breach of contract) before going to Court.

Support legislation which balances homeowner protection goals with reasonable processes to ensure that all claims are addressed in a timely and cost-effective manner.

Legislative Issues II. CODES, COMPLIANCE & LICENSING INITIATIVES Issue Background— What You Need to Know Unlicensed builders hurt consumers and licensed contractors.

Unlicensed activity runs rampant throughout the state. Homeowners who contract with an unlicensed builder don’t have proper inspections and cannot access the recovery fund if something goes wrong. Builders and remodelers experience a competitive disadvantage and suffer from “fly-by-night contractors” who sully the industry’s image. Currently misdemeanors, we are advocating to reclassify these offenses as gross misdemeanors

Our Ask of Legislators: Support legislation that increases code adoption transparency, defeats special interest “regulatory marketing” and increases penalties for unlicensed activities Code Adoption Process Restructuring

Code changes dramatically increase the cost of housing. The industry needs a more transparent code adoption process and greater weight given to the code recommendations made by professionals in the field. In addition, we know the code adoption process is the perfect venue for “regulatory marketing” to occur—where some products gain a foothold simply by “gaming” the current system. While this is a huge and long-range initiative, during the short 2016 session we will be pursing some “low hanging fruit”.

Our Ask of Legislators

Require DLI to track and report on the final disposition of all recommendations made during the rulemaking process.

Require all code adoption activities to be housed in the same state agency.

Require all code changes that increase the cost of housing by $1,000 or more be approved by the state legislature.

Defend against code-related legislation that will favor products or systems.

Insurance Adjusters Code Competency

Currently, insurance adjusters are not required to be competent in Minnesota’s building code. Their lack of knowledge of our construction codes and methods result in inadequate quotes and flawed settlement offers. This makes it difficult for licensed Minnesota businesses to make homeowners whole after a covered loss.

Our Ask of Legislators:

Support SF2304 that requires insurance adjusters to demonstrate competency in the State Building Code.

Our industry knows that the cumulative impacts from government regulations cause a negative impact on housing affordability for all Minnesotans. We understand the policy reasons behind the majority of regulatory requirements imposed on our livelihoods, but we strongly advocate for those requirements to be fair and reasonable. Well-educated legislators are key to keeping home ownership viable in Minnesota.

Legislative Issues III. HOUSING AFFORDABILITY INITIATIVE— FAIRNESS IN LAND USE MORATORIA Issue Background— What You Need to Know: A land-use moratorium is a local government action that suspends a landowner’s right to obtain development approvals while the community considers and potentially adopts changes to its comprehensive plan, zoning, or other land-use regulations.

Several land-use moratoria have been adopted in the metro area over the past 18 months in cities like Minneapolis, Golden Valley, and Lake Elmo.

These moratoria freeze projects and impact the local land and housing market almost immediately.

Our Ask of Legislators: Basic elements of fairness and good government must be part of all major land use decisions.

Require local government to provide a standard public notice 30 days prior to placing a moratorium on housing applications.

Require a super majority (2/3rd) vote to establish a moratorium, just like it is required for other major land use decisions (comprehensive plan amendment, etc.)

Support HF 2585

Local governments currently are not required to notify the public that this action is under consideration and they can impose a moratorium with a simple majority vote.

Priority IV. HELP WANTED – THE HOMEBUILDING INDUSTRY Issue Background— What You Need to Know: Across all segments of the homebuilding industry it is a tremendous challenge to attract and maintain a quality workforce.

This challenge puts upward price pressure on every aspect of building or remodeling a home and impacts bottom-line costs for homeowners.

The workforce challenge is a major headwind facing the housing industry.

Our Message to Legislators: Partner with industry groups to find creative ways to support a quality workforce plan that attracts and maintains healthy workforce levels throughout the homebuilding industry.

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