Building Business News September 2018

September 2018

Fall Parade Begins Sept. 22 600 E. 103rd Street | Kansas City, MO 64131

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On the Cover: Fall Parade Begins September 22

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Builders will open 330 new homes during this year’s Fall Parade. Koehler Building Co.’s entry at WatersEdge

Features Kansas Area Council Panel Evaluates Local Building Conditions

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The Aug. 22 meeting of the Kansas Area Council provided viewpoints from Patrick Willis, Rosemary Vitale and Dan Whitney.

Prepare Now for the October Membership Drive

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Share the value of HBA membership with your business associates.

Enter the HBA’s Raffle to Win $$

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A chance to win and support the HBA’s charitable activities at the same time.

In Every Issue Calendar 4 New Members

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Anniversaries 18 Residential Permit Statistics

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Industry Professionals Share Their Insights at Kansas Area Council There was a full house for the Kansas Area Council on Aug. 22 at Hallbrook Country Club, sponsored by Kansas Builders Insurance Group (KBIG). Attendees heard from a panel of building industry experts consisting of Patrick Willis of Willis Custom Homes, Inc., Rosemary Vitale of ReeceNichols and Dan Whitney of Landmarketing, Inc. Willis feels “cautiously optimistic” about the future of homebuilding. The increase in lumber costs, about 32 percent, and the current skilled labor shortage were both topics of concern. Willis acknowledged that “labor is a big challenge all across the country.” According to Willis, one of the problems with the labor force is the rising median age of skilled workers and the inability to attract younger people into the trades. Despite this, Willis believes there is a great need for more housing in the Kansas City area and has “seen great traffic in the Parade the last few years” followed by more serious inquiries.

Vitale expects to see more of a “balanced market” moving forward but she noted that right now consumers have sticker shock. “There are 1,573 homes on the market of which 500 are in Johnson County. Of those 500, the average price is currently $500,246 whereas last year it was $470,465,” she said. Vitale noted that the current new home price in Johnson County ranges between $450,000 and $560,000. Homes below this median, houses listed around $350,000, have been selling quicker in recent years.

Whitney believes the home building industry is “cautiously steady.” Overall growth has been slow and steady and he does not believe we are in a “pre-recession” state. In fact, he believes builders have been cautious about not letting product build up and sit on the market. “There were about 5,000 speculative homes on the market in 2007, but today there’s Continued on page 4

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Fall Calendar

Kansas Area Council Continued from page 3 only about 1,100,” Whitney said. He believes speculative activity is growing –­ and will continue to grow – toward Spring Hill and to the west of Kansas City.

Sept 18 Associate Appreciation Lunch

According to Whitney, builders are paying higher premiums to find new lots to build on. Homes can also be slow moving at certain price points, but there is not an oversupply of homes. When it comes to the future, Whitney believes population growth and economic recovery are two of the biggest factors that will shape the housing industry.

Sept 18 Board Meeting Sept 18-19 Parade Material Pickup Sept 22 Fall Parade Begins

After discussing the building side of the industry, the conversation turned to what consumers look for in a new home.

Design trends, whether interior decoration or the layout of the house itself, are always a popular subject and Vitale noted, “people still want open floorplans.” She also commented on the market’s new emphasis on pet-friendly spaces.

As far as functional style goes, people are gravitating toward laundry rooms connected to the master bedroom, quartz countertops and large sliding glass doors. Vitale has seen lighter colors become popular, as well as an emphasis on unique light fixtures. As she puts it, “lighting is the jewelry of the house.”

Sept 25 Missouri North Area Council Sept 26 Fall Parade Awards Celebration Oct 11 Clay Shoot

Willis agreed with Vitale on the popularity of open floorplans, specifically noting many consumers have a desire to have one big dining area versus a closed off formal dining room. Outdoor living spaces continue to be important to homebuyers as well.

WE’VE ALSO BUILT SOMETHING FROM THE GROUND UP. OUR BUSINESS.

Prairie Village Call to Action The City of Prairie Village is in the process of adopting new Neighborhood Design Standards that would affect incoming and current Prairie Village residents. Changes include added requirements for green space, street trees, and the size of buildings and garages.

These standards could cause unintended consequences potentially preventing residents from investing in their own properties. Prairie Village residents and builders are encouraged to contact city council representatives to speak with them about these issues, as well as attend the public hearing on September 11 at 6:30 p.m. at City Hall, 7700 Mission Road, Prairie Village, KS 66208.

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CAPS Classes Are Interactive, Informative The HBA office hosted Certified Aging in Place Specialist (CAPS) classes earlier this month, taught by Shawn McGuire. In the training, attendees learned how to identify opportunities and develop the skills to interact with customers that are 50+ years old in order to grow their businesses. They also discovered the guidelines and requirements of accessibility – while putting themselves in the shoes of their customers. In addition, the group discussed the significance of a good design when making modifications.

Congratulations to all the CAPS students for obtaining this designation!

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WE’RE MORE THAN HOMES. We are family.

We are each other’s business advisors, allies and friends. Visit nahb.org/join to join our network of craftsmen and innovators.

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Members Attend Lunch, Learn & Earn A Lunch, Learn n’ Earn class took place on Aug. 23 at the HBA. Sponsored by Central Energy Audit, attendees enjoyed lunch from Jack Stack Barbeque while earning ICC credits. The lecture was given by Sharla Riead of the EnergySmart Institute. Topics covered residential energy codes and the potential health, safety and building durability issues from non-compliant systems.

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Kansas City, Missouri Launches Compass KC, the online permitting system for Kansas City, Missouri, went live on August 6. Compass KC now automatically verifies contractor licenses/supervisor certificates and/or expired insurance certificates at each inspection request or permit application. If the applicant’s certificate or license is inactive, the system will block the inspection or permit request. Parties can work with KCMO’s Contractor Licensing Branch to update as needed.

‘e-review’ button which is not available until after you click “submit” for your plan application. There are three places with warnings, but city staff are seeing plans in the wrong place – the review process will not begin until the plans are in the correct location.

HBA staff is currently working with city administration to coordinate training sessions in the coming weeks. A notice will be sent out when times and dates are established.

A common issue with this system has been with the e-review button. To solve this issue, do not use the ‘Attachments’ icon for plans submitted for review. Instead, plans are attached under the

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Visit nasb.com/construction to connect with a Loan Officer.

Join the Spike Club

Make Your List of Prospects for October Membership Month Every day, you do business with dozens of building industry professionals who are prospective members of the KCHBA. September is the time to make a list and begin sharing the benefits of membership with your business contacts.

In addition to Spike points, builders who recruit new members during October will be entered in a nationwide contest to win a trip to Napa. As the official NAHB membership sponsor, Signature Kitchen Suite is offering an all-inclusive trip to Napa Valley to each of the top six Builder members who sign up the most new members during the fall membership drive. The competition runs from Sept. 1 to Oct. 31, 2018. Builder members will compete against others from HBAs similar in size. The top two members from each category will be invited to attend and bring a guest.

Then, during October’s membership month, you’ll receive triple Spike points for your recruited new members. What is a Spike point, you ask? Here’s the lowdown …

• The NAHB Spike Club is composed of the individual members and employees of members in local associations who have attained Spike status. It is a vehicle to recognize these members for their outstanding achievements in member recruitment and retention in their local home builders association.

• You receive Spike points for each member recruited and additional points as they renew membership.

• In order to be eligible to attend the annual NAHB Spike Party at the International Builders’ Show, a Spike must have a minimum of six credits and must earn one new member recruitment credit between Nov. 1-Oct. 31.

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Homes by Chris’ entry at Copperleaf

Fall Parade to Welcome Consumers into New Homes For more than 70 years, the Parade of Homes has provided a unique opportunity for people to find a new home. Where else can potential homebuyers explore and compare more than 300 brand new homes at their leisure without appointments?

The Home Builders Association of Greater Kansas City is showcasing 330 residences constructed by 105 of its member builders on the 2018 Fall Parade of Homes, Sept. 22-Oct. 7. The KCHBA is thrilled to have so many beautiful homes on display — and to represent an industry that contributes more than $1.5 billion to the Kansas City economy and that supports more than 20,000 jobs in the Greater Kansas City metropolitan area.

During the Parade, local residents can visit new homes and neighborhoods across a spectrum of price, style and location, including 30 maintenance-provided homes. The houses are located across the Kansas City metropolitan area and range in price from $220,000 to nearly $1.85 million.

Rob Washam Homes’ entry at Stone Bridge Trails

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Learn the Business Side of Building Saul Ellis of Saul Ellis and Company will teach a series of classes specifically for young professionals about the business side of building, with topics ranging from financial planning, acquisition and strategy. Spots are filling up quickly! The course series is $200 for the four classes and includes the cost of course materials. Classes will be held at the HBA on Oct. 1, 8, 15 and 22 from 10 a.m. to 12 p.m. Please contact Erica@ kchba.org if you or a builder you know would benefit from these lessons. Full payment is due by Sept. 14.

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New Members ASP Enterprises Evan Walthall 5301 E 59th St. Kansas City, MO 64130 (816) 554-1191 www.aspent.com Duradek U.S. Inc. Travis Tilley 1722 Iron St. North Kansas City, MO 64116 (816) 421-5830 www.duradek.com

Affiliates ReeceNichols Kathryn Clark 11601 Granada Leawood, KS 66211 (913) 696-9605 www.reecenichols.com

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Anniversaries 2013 Country Hills Custom Home ER Marketing Inspired Homes, LLC 2013 Johnson County Painting, LLC Monticello Homes Inc Shaw Excavating and Grading, LLC 2015 RW Scott Homes, LLC 2016 Cambria Quicksilver Readymix, LLC Simplicity Pro Technologies Westside Holding Co., Inc. 2017 Available Rolloff, LLC Granite Tops, LLC Shepard Homes, LLC

1961 Saul Ellis and Company, Inc. 1966 Kenny’s Tile & Floor Covering 1974 R. M. Standard & Company 1979 David R. Gilsdorf Concrete Finishing Company, Inc. 1985 Ben Cerra Construction, Inc. 1987 Kansas City Millwork Company 1990 J.S. Robinson Fine Homes 1991 Neese Construction Corp Town & Country Guttering, Inc. 1994 Becca Masonry, Inc. 1995 ECS Geothermal Inc. 1999 Ken Praiswater Construction, LLC 2001 James Engle Custom Homes 2004 Mike Bryant Heating & Cooling, LLC Wood Brothers Construction, Inc. 2005 Ernst Brothers Home Construction, Inc. Lancaster Brothers Heating & Cooling Ray Cochran & Co. LLC Concrete Work Reynolds Construction, Inc. 2006 Comerio Corporation New Castle Homes, LLC 2008 Builders Stone & Masonry Hermes Landscaping, Inc. 2009 Precision Woods, Inc 2011 A+ Insulation King Building, Inc. 2012 84 Lumber Select Living Systems, LLC

JOIN US AT THE BUILDING INDUSTRY’S BIGGEST EVENT!

The NAHB International Builders’ Show® (IBS) continues to be the homebuilding professional’s go-to for new product knowledge, cutting-edge technology and powerful connections. IBS puts you in touch with the tools, people and know-how you need to construct a business that is truly built to last.

REGISTER NOW | buildersshow.com/september *IBS full registration rates: $325 NAHB members, $500 non-members AD1219

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HBA Staff Marcia Jurgens Vice President of Administration marcia@kchba.org 816-733-2215 Gina Battle Director of Parade of Homes gina@kchba.org 816-733-2219

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Dawn Allen Director of Member Services & Events dawn@kchba.org 816-733-2241 Kelcee Schlotzhauer Permit and Show Sales Coordinator kelcee@kchba.org 816-733-2246 Michaela Moyer Government Affairs & Workforce Development michaela@kchba.org 816-733-2239 Kari English Communications Director kari@kchba.org 816-733-2213 Courtney Reyes Government Affairs & Workforce Development courtney@kchba.org 816-733-2214

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Legal Morass Muddies the Waters on the WOTUS Rule Which WOTUS Rule Applies?

A recent ruling by the U.S. District Court for South Carolina means that for the foreseeable future, roughly half of U.S. states will be abiding by one set of rules pertaining to waters of the United States while the rest will abide by different rules.

A brief background: Between 1986 and 2015, the Environmental Protection Agency and U.S. Army Corps of Engineers operated under the 1986 definition of the Clean Water Act term “waters of the United States.”

In August 2015, the EPA promulgated a new definition of waters of the United States that was known as the WOTUS rule. Litigation ensued in multiple courts around the country. Soon thereafter, the Court of Appeals for the Sixth Circuit enjoined the WOTUS rule nationwide, which prevented its implementation. Thus, the 1986 definition was still in effect.

The Sixth’s Circuit’s decision was overturned by the Supreme Court in 2018. However, before the Supreme Court’s decision took effect, the EPA finalized a rule that added an “applicability date” to the 2015 WOTUS rule. This rule postponed the applicability of the WOTUS rule until 2020. Therefore, nationwide, the EPA and Corps of Engineers still applied the 1986 definition of waters of the United States.

ruling pending appeal. However, NAHB’s coalition had already asked a court in Texas to enjoin the 2015 WOTUS rule nationwide and recently reiterated that request.

Meanwhile, EPA is trying to finalize another 2017 proposed rulemaking that would finally repeal the 2015 WOTUS rule and temporarily replace it with the original (1986) regulatory definition of WOTUS.

On Aug. 16, 2018, the District Court for South Carolina ruled that the EPA had improperly added the applicability date to the 2015 WOTUS Rule. The judge explained that the EPA had restricted the topics that the public could comment on when it proposed to add the applicability date. According to the court, this restriction denied the public a meaningful opportunity to comment on the applicability date rule. Thus, it nullified the applicability date rule nationwide.

According to EPA’s current regulatory agenda, the rule repealing the 2015 WOTUS rule is expected to be finalized by November of this year. Moreover, the Trump administration’s proposed version of a new regulatory definition of WOTUS consistent with the president’s guidelines contained within his executive order on this issue is expected by October.

Given the legal confusion created by the U.S. District Court for South Carolina ruling coupled with various WOTUS-related rulemakings expected from EPA and the Corps of Engineers over the coming months, NAHB will provide regular updates as the situation develops.

This decision leaves the regulated community in a state of disarray. Other courts have previously enjoined, or prohibited, application of the 2015 WOTUS rule.

So where do things stand now?

For more information, contact Michael Mittelholzer at 800-3685242 x8660.

In 24 states (see map), the 1986 definition of waters of the United States is applicable. In the remaining 26 states, the 2015 WOTUS rule defines the term “waters of the United States.”

NAHBNow, 8/20/18

It is not clear whether the administration plans to appeal the South Carolina court’s ruling, or whether it will seek a stay of the court’s

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KC, MO Tops List of Most Permits Issued in 2018 So Far Permit issuance slowed in July, but with 485 single family units permitted during the month, the year-to-date total of 3,594 is within 2 percent of 2017’s first seven months, according to the Home Builders Association of Greater Kansas City’s (HBA) monthly Residential Building Permit Statistics report. Multi-family units (five or more units per building) has surpassed the same period last year, with 1,305 units permitted in 2018 compared to 1,191 in 2017.

YOU SEE A WARM HOME WE SEE SAVINGS FOR YOUR FUTURE.

Kansas City, Mo., has recorded the highest number of permits so far in 2018, with 526 in its three-county reach. Olathe has the second highest number of permits issued with 342 units. Lee’s Summit (269 permits), Blue Springs (266 permits), and Lenexa (228 permits) round out the top five cities with the most permits issued in the first seven months of 2018.

Homeowners save with natural gas.

Natural gas furnaces heat homes more efficiently than electric heat pumps: the average household can save $400 to $500 a year with a natural gas furnace.

New homes are under construction in several new subdivisions.

The permit increase in Blue Springs (from 106 in 2017 to 266 in 2018) is centered in neighborhoods that feature duplex and four-plex homes: Tequesta Village, Colonial Highlands and Eagle Ridge Villas. North of the river, the Thousand Oaks subdivision in Parkville has increased its number of permits issued by 20 compared to the same period in 2017 and Seven Bridges (Platte county) is also growing. The Meadows, in Spring Hill, and St. John’s Highlands in Gardner are also reporting increased permit activity.

A BETTER TOMORROW STARTS TODAY. www.kansasgasservice.com

Home buyers will be able to visit these subdivisions and many others during the Fall Parade of Homes, September 22 through October 7, which will feature 330 new homes built by 105 of the HBA’s member builders.

The Official Publication of the Home Builders Association of Greater Kansas City September 2018 • Volume 24 • Issue 8 Copyright 2018 Published by the Home Builders Association of Greater Kansas City 600 E 103 Street, Kansas City, MO 64131 • (816) 942-8800 Editor Marcia Jurgens Contributing Writers Kari English, Paige Waltman Graphics Karla Peterie, Creative Services 2018 Executive Committee President Gary Kerns Vice President Shawn Woods Secretary/Treasurer Jerry Braklow Immediate Past President Harold Phelps Associate Representative Rosemary Vitale Past Presidents Representative Bob Frost

To subscribe to Building Business News call (816) 733-2217 To advertise in Building Business News call (816) 733-2215 For change of address requests please fax changes to (816) 942-8367 or call (816) 942-8800 For more information, visit the HBA online at www.kchba.org

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Residential Building Permit Statistics

Residential Building PermitJULY Statistics 2018 CASS COUNTY Archie Belton Cass County Cleveland Garden City Harrisonville Lake Winnebago Lee's Summit Peculiar Pleasant Hill Raymore Village of Loch Lloyd

CLAY COUNTY Clay County Excelsior Springs Gladstone Kansas City Kearney Lawson Liberty North Kansas City Pleasant Valley Smithville JACKSON COUNTY Blue Springs Buckner Grain Valley Grandview Greenwood Independence Jackson County Kansas City Lake Lotawana Lee's Summit Oak Grove Raytown Sugar Creek PLATTE COUNTY Kansas City Parkville Platte City Platte County Riverside Weatherby Lake Weston JOHNSON COUNTY De Soto Edgerton Fairway Gardner Johnson County Leawood Lenexa Merriam Mission Hills Olathe Overland Park Prairie Village Roeland Park Shawnee Spring Hill Westwood

Single MultiS-F M-F Total Family Family Total Units Units Units % Units^ Units Units YTD YTD YTD 0 2 6 0 0 1 1 3 2 1 14 2 32

0 0 0 0 0 0 0 0 0 0 0 0 0

0 2 6 0 0 1 1 3 2 1 14 2 32

0 54 48 0 0 8 3 26 44 14 89 10 296

0 0 0 0 0 0 0 0 0 0 12 0 12

0 54 48 0 0 8 3 26 44 14 101 10 308

4 2 0 39 17 0 2 0 0 5 69

0 0 0 0 0 0 0 0 0 0 0

4 2 0 39 17 0 2 0 0 5 69

21 11 10 340 89 0 26 1 0 79 577

0 0 0 0 0 0 0 0 0 0 0

21 11 10 340 89 0 26 1 0 79 577

9 0 12 0 0 17 8 12 4 33 1 0 0 96

0 0 0 0 0 0 0 196 0 0 0 0 0 196

9 0 12 0 0 17 8 208 4 33 1 0 0 292

266 0 66 12 0 98 49 60 16 243 13 0 0 823

10 0 0 156 0 0 0 770 0 10 0 0 0 946

276 0 66 168 0 98 49 830 16 253 13 0 0 1769

16 10 0 23 3 2 0 54

0 0 0 0 0 0 0 0

16 10 0 23 3 2 0 54

126 62 1 122 22 10 0 343

0 0 0 0 0 0 0 0

126 62 1 122 22 10 0 343

2 0 3 19 6 3 40 1 0 38 33 4 0 17 8 0 174

0 0 0 0 0 0 0 0 0 0 76 0 0 0 0 0 76

2 0 3 19 6 3 40 1 0 38 109 4 0 17 8 0 250

21 0 6 83 27 31 228 1 4 342 227 30 0 84 97 3 1184

0 0 0 0 0 0 0 0 0 22 325 0 0 0 0 0 347

21 0 6 83 27 31 228 1 4 364 552 30 0 84 97 3 1531

July 2018

Single MultiS-F M-F Total Family Family Total Units Units Units % Units^ Units Units YTD YTD YTD LEAVENWORTH COUNTY Basehor 13 0 13 85 0 85 Lansing 0 0 0 1 0 1 Leav. County 9 0 9 51 0 51 Leavenworth 5 0 5 14 0 14 Tonganoxie 4 0 4 22 0 22 31 0 31 173 0 173 WYANDOTTE COUNTY Bonner Springs 0 Edwardsville 0 KCK/Wyandotte Co 21 21 MIAMI COUNTY Louisburg Miami County Osawatomie Paola Spring Hill Totals

0 0 0 0

0 0 21 21

4 1 123 128

0 0 0 0

4 1 123 128

5 2 0 0 1 8

0 0 0 0 0 0

5 2 0 0 1 8

12 37 0 3 18 70

0 0 0 0 0 0

12 37 0 3 18 70

485

272

757

3594

1305

4899

Comparison of Single Family Building Units for Greater Kansas City (Cass, Clay, Jackson, Platte, Johnson, Leavenworth, Miami, Wyandotte Counties) Month/Year January February March April May June July August September October November December

2011 90 121 180 210 230 262 204 205 202 205 185 207

2012 188 182 270 277 294 268 288 260 379 331 283 279

2013 273 224 335 444 337 333 409 354 384 369 340 288

2014 287 216 362 439 385 364 375 352 383 468 312 328

2015 240 260 393 437 395 438 399 425 462 459 360 432

2016 274 408 542 523 503 578 494 536 424 466 417 352

2017 2018 457 425 477 461 571 550 562 502 504 594 567 577 512 485 480 514 583 502 468

Annual Total

2,301

3,299

4,090

4,271

4,700

5,517

6,197

3,594

Comparison of Permits By Units Issued Year to Date

2011 2012 2013 2014 2015 2016 2017 2018

S-F Units 1297 1767 2355 2428 2562 3322 3650 3594

2011 - 2018 M-F Units 223 605 1702 2157 1706 2409 1191 1305

Total Units 1520 2372 4057 4585 4268 5731 4841 4899

^The Single Family number is units and includes both attached and detached units. %Multi-Family units are in buildings with 5 or more units. # Not available at time of report Permit information reflects the most recent data at time of publication. In order to ensure accurate recording of residential building permit statistics, the HBA may revise monthly and year-to-date figures when updated data is made available. Copyright 2018 Home Builders Assoc of Greater Kansas City. All rights reserved.

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