Eastern CT September Blueprint

Sept em ber 2023

Low Invent ory, Solid Dem and Boost July New Hom e Sales

Low existing inventory and solid demand more than offset rising mortgage rates and elevated construction costs to boost new home sales in July.

Sales of new ly built , single-fam ily hom es in July increased 4.4%to a 714,000 seasonally adjusted annual rate from a downwardly revised reading in June, according to newly released data by HUD and the U.S. Census Bureau The pace of new home sales in July was up 31.5%from a year ago.

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 714,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in July was 437,000, up 4.8%compared to a year ago This represents a 7.3 months? supply at the current building pace A measure near a 6 months?supply is considered balanced. Of the total home inventory, including both new and resale homes, 31%of homes available for sale are newly built.

The median new home sale price in July was $436,700, down roughly 9%compared to a year ago. Pricing is down both due to builder incentive use and a shift towards building slightly smaller homes.

Regionally, on a year-to-date basis, new home sales are up 5.0%in the Northeast, 1.0%in the Midwest and 3.5%in the South. New home sales are down 8.1%in the affordability-challenged West

Dear HBRA members,

I hope this newsletter finds you well as the dog days of summer come to an end and we embrace Fall in New England. It is my pleasure to introduce myself as the Executive Officer of the Home Builders & Remodelers Association of Eastern CT. I have met many of you over the last six months in my role here, and I'm excited about the innovation and growth ahead for this thriving association.

As we immerse ourselves in the excitement of September, we have some fantastic events and initiatives on the horizon These gatherings are designed to foster collaboration, strengthen our industry network, and drive us toward our organizational goals. We encourage your active participation, as your insights and contributions are vital to our growth:

- Our Annual Lobsterfest will take place on Thursday, September21 at Westbrook Elk's Club A signature event for HBRAECT, this year will feature new additions to the event in the form of live music by the Rubber Band Band and our Inaugural Blue Crab Races! Sponsorships and Tickets are still available Don't miss this lively event overlooking the Long Island Sound and enjoying a true New England seafood feast

- HBRAECTAnnual Awards Gala will take place on Wednesday, December 6 at the enchanting Mystic Aquarium Celebrate with us as we install our incoming Board Members, honor our esteemed award winners, and reflect on the successes of the year. Enjoy live music and hors d'oeuvres while exploring the wonders of the indoor aquarium exhibits, followed by a perfectly prepared three course meal and program. Tickets are now on sale, and sponsorship opportunities are available.

As we embrace this fruitful season in the home building industry, let's take a moment to appreciate the craftsmanship, dedication, and innovation that make our sector truly special. Share your September projects and insights with us on social media using the hashtag #HomeBuildingInSeptember.

Should you have any questions, suggestions, or ideas, please do not hesitate to reach out I am eager to connect with each of you and hear your valuable input as we continue to shape the future of the home building industry.

Thank you for your warm welcome, and I look forward to meeting each of you in the coming weeks

Sincerely,

Stacy Herr Executive Officer

Home Builders & Remodelers Association of Eastern CT

WOTUS Rule a Blow t o Affordabilit y

The EPA and U.S. Army Corps of Engineers in late August issued a revised, final waters of the United States (WOTUS) rule under the federal Clean Water Act in the aftermath of the Supreme Court Sackett ruling. NAHB believes the am ended WOTUS rule represents a blow to housing affordability It assures continued uncertainty regarding federal jurisdiction as established by the Supreme Court?s recent Sackett decision that made clear the federal government only has authority over relatively permanent waterbodies.

NAHB Warns Against Rent Cont rol

NAHB and 17 other associations representing housing providers, lenders and residents sent a letter to the Federal Housing Finance Agency (FHFA) warning that m andat ory rent cont rol and rent stabilization policies will increase rents, reduce the capital needed to boost the supply of housing, and ultimately hurt current and future renters. Research has proven that mandatory rent control is a failed policy that does nothing to alleviate the root causes of housing affordability challenges.

NAHB Pushes for Job Corps Funds

In a move st rongly opposed by NAHB, House Republican appropriators are proposing to eliminate the Department of Labor?s Job Corps program as part of a 30%reduction to the agency?s 2024 budget. The Home Builders Institute (HBI), NAHB?s workforce development arm, has part nered w it h Job Corps for 49 years to provide individuals aged 16-24 years old with career technical education and training

Regist rat ion Now Open For 2024 Builders?Show

The NAHB International Builders? Show® (IBS) returns to Las Vegas on Feb. 27-29, 2024, with exciting new features to enhance your experience, provide more learning opportunities and ensure that industry professionals get the maximum value for their time.

Among the innovations in 2024, the exhibit floor will be segmented into six categories and the Outdoor Exhibits to allow attendees to streamline their visit based on specific interests, product categories and thematic zones

Registration is now open at buildersshow com

DOL Issues Final Rule On Prevailing Wages

The U S Department of Labor (DOL) has published a final rule updating the Davis-Bacon and Related Acts (DBRA) regulations regarding the calculation of prevailing wages in local areas. The new rule goes into effect Oct 23

In the home building industry, the final rule primarily affects multifamily builders who participate in certain HUD and Federal Housing Administration (FHA) Multifamily Mortgage Insurance programs

A Quick Look at NAHB?s Builder Mem bers

NAHB?s annual membership census reveals important characteristics of its membership base, including both Builder and Associate members The latest survey reflects the business activity of members in 2022.

The report on Builder m em bers includes those whose primary business is single-family home building, multifamily building, residential or commercial remodeling, commercial building, land development, or manufacturing of modular/panelized/log homes. Builder members comprise 35%of NAHB?s overall membership base

The median number of employees for Builder member companies was five, which

Mult ifam ily Sent im ent Posit ive

Confidence in the market for new multifamily housing was in positive territory for the second quarter, according to results from the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB) The MMS produces t w o separat e indices. The Multifamily Production Index (MPI) had a reading of 56 for Q2 while the Multifamily Occupancy Index (MOI) reading was 89.

The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The index is scaled so a number above 50 indicates that more respondents report conditions are good than report conditions are poor.

has remained consistent since 2015. Those companies started a median of six housing units in 2022, which remained unchanged from 2021

The median dollar volume of business among Builder members was $3.3 million in 2022, also unchanged from 2021. This is the second consecutive year where the median dollar volume of business is above $3 million.

G7 Includes Language on Housing

Housing ministers and other leaders from the Group of Seven (G7) countries met in Japan in July to discuss a common framework and principles for urban development and rural housing. They concluded the meetings with recom m endat ions regarding housing affordabilit y, which included language to address housing costs using private sector investment aimed at lower- and middle-income households.

NAHB and the International Housing Association (IHA) had worked in advance of the meetings to include principles for housing affordability in the agenda, which focused mainly on community resilience and green building.

What 's New For 2024

#1 NEW Pre-show Learning Opportunities

Get a head start on the show with two new pre-show symposiums Explore critical segments of the housing sector with industry-leading education and content experts, network with and discuss challenges and best practices with your peers during the pre-show symposiums.

These symposiums are in-depth, full-day intensive programs in a small, informal setting, held before the main event kicks off to set the stage for the main event.

#2 New Exhibitors on the Block

Dive into innovation as we welcome a fresh batch of hundreds of new exhibitors to find the hottest industry products, tools and services and discover the innovative products your customers want.

#3 Event Floor Categories

Navigating the event floor just got easier! We?ve segmented the floor into six categories and the Outdoor Exhibits Floor segmentation allows attendees to streamline their visit based on specific interests, product categories and thematic zones. No matter your role or interests in the industry, there?s a dedicated segment waiting for you.

#4 25% More Learning Opportunities

We?re rolling out even more of the most sought-after sessions as encore sessions. These repeat sessions help to ensure that everyone has an additional opportunity to participate in the sessions they want to attend. We?re also increasing the number of rooms for educational sessions. By distributing more sessions across the day, attendees have greater flexibility in arranging their agendas, leading to a more effective learning experience.

With all these new features and more, the 2024 International Builders?Show promises to be more enriching, enlightening and engaging than ever before. Whether you?re a seasoned professional or a newbie in the residential construction industry, there?s something for everyone at IBS 2024. Registration opens Sept 1. We look forward to seeing you at the Builders?Show!

Annual Awards Nomination Form

Calling all nominations for: Builder of the Year, Remodeler of the Year, Associate of the Year

Each year the Home Builders & Remodelers Association of Eastern Connecticut recognizes those members that are doing exceptional work in their business, the community and our Association. With these awards, we honor and recognize the individuals who have consistently dedicated themselves to strengthening the residential construction industry in Eastern Connecticut, improve the quality of life for their clients, and make the dream of home ownership a reality for everyone.

We encourage you to nominate a member that you feel is deserving of this recognition. The HBRA awards have proven to be very helpful in a company?s marketing strategy. Being recognized as an industry leader is a great tool to differentiate your business.

The winners will be notified in November and awards will be presented at the Annual Gala and Awards Ceremony

ELIGIBILITY

Nominations for the HBRA 2023 Annual Awards may be submitted by any member of our Association. Any member in good standing of the HBRA is considered eligible

NOMINATIONSSHOULD INCLUDE

A completed nomination form with as much information on the nominee as possible.

Any information on the nominee?s commitment to product quality, value, improved business practices, customer relations or other program that demonstrates their commitment to promoting the residential construction industry

RETURN COMPLETED FORM NO LATERTHAN NOVEMBER6th.

Email to:office@hbraect com

Mail to: HBRA of Eastern Connecticut, 2189 Silas Deane Hwy, Rocky Hill, CT06067

Legislat ive Updat e

HBRAMA Releases Landm ark St udy on Net Zero Energy Code and Housing Affordabilit y

Massachusetts must take bolder steps to solve the housing affordability crisis while simultaneously counteracting climate change, including new policies to rapidly boost construction of more energyefficient,planet-friendly homes without pricing out the next generation of homebuyers, according to a report released by the Home Builders & Remodelers Association of Massachusetts

During this 18-month study, researchers from the MIT Center for Real Estate and Wentworth Institute of Technology analyzed the confluence of the housing and climate crises on building costs and, consequently, housing affordability, along with the potential effects of the state?s recently passed ?net zero?residential building code They concluded that, withou tadditional incentives or financial supports, the more stringent building requirements will likely push homeownership out of reach for many more families in Massachusetts. The report estimates that the specialized stretch energy code is likely to increase the cost of home construction by roughly 1.8%to 3.8%? adding approximately $10,000 to $23,000 to the median cost of a single-family home and putting homeownership out of reach for between 15,000 and 33,000 households. The median price of a single-family home in Massachusetts soared to $553,500 as of April. The researchers also estimated a 2 4%rise in construction costs for large multifamily buildings

?When it comes to housing policy, we must balance the scales in these two vital areas ?affordability and climate change Our policymakers must avoid tilting too far in one direction to the detriment of the other, ? said Jeffrey Brem, HBRAMA?s president. ?Legislative and regulatory efforts at the state and local levels should be geared toward accelerating the construction of housing that is more energy-efficient but also more equitable, more attainable and more affordable to a larger pool of Massachusetts residents ?

In a survey of Massachusetts homebuilders, the researchers identified multiple obstacles hampering the construction of more affordable, energy-efficient housing, including restrictive land use rules, permitting delays, lack of clarity on financial incentives, a shortage of workers skilled in green home building, continued supply chain issues, and a lack of public awareness of the economic benefits of energy- efficient homes. For example, the Mass Save program provides incentives for certain types of energy- efficient, all-electric homes, but it is unclear how long the incentives will last and whether developers can count on them

The researchers found there is urgency to lower carbon emissions in new residential construction in order to advance the state?s climate goals. At the same time, there is urgency to increase the affordability of housing, particularly for people with low or moderate incomes, in order to maintain economic growth The report notes there are opportunities for advances on both fronts

The research team identified a series of policy tools that could facilitate the production of more energyefficient and affordable housing, including:

·Im plem ent ing land use changes t hat reduce carbon em issions and increase affordabilit y. Ironically, many of the municipalities advocating for the more stringent energy code for homebuilding have extensive large-lot, single-family land use regulations Among other proposals, the Legislature could require that adoption of the specialized stretch energy code be combined with land use allowances such as smaller

minimum lot and unit sizes, smaller setbacks, taller height limits, greater density, and more multifamily zoning

St ream lining perm it t ing and reducing ut ilit y connect ion delays One optionwould be to waive special permit requirements for multifamily projects that meet or exceed the local opt-in specialized stretch code that requires ?net zero?residential building standards

Rest ruct uring financial incent ives and t ax credit s Builders and homeowners alike would benefit from a streamlined application process for climate-related incentives that currently come through multiple agencies and programs

Increasing t echnical assist ance for green building Smaller builders, an important part of the housing construction industry, are limited by a lack of training and technical assistance in meeting new ?net zero? requirements. The state could invest further in workforce training and education focused on energy-efficient building techniques such as ?passive house?construction that dramatically reduces energy use.

·Expanding financing sources. Several states have created ?green banks?that leverage public funding to attract private investment in clean energy projects. Massachusetts could establish its own green bank to support housing developments that are energy-efficient and affordable, while reducing the risk and equity needed for them to get off the ground

Support ing low -incom e rent ers These renters may need additional support from the state?s home energy assistance program as large multifamily buildings shift from centralized fossil-fuel burning furnaces to all-electric heating sources in individual units

Creat ing new t ax classificat ions and exem pt ions.The Massachusetts Department of Revenue could establish a new property tax classification or a new exemption for highly energy-efficient housing. This could create a durable incentive that spurs productiono f more energy-efficient and affordable housing

The study was supported by a diverse array of organizations including the Air Conditioning, Heating and Refrigeration Institute, the Building Industry Association of Washington, Cape Cod Five, Housing Assistance Corporation, Massachusetts Association of Realtors, National Association of Homebuilders, Planning Office for Urban Affairs at the Archdiocese of Boston, Propane Education and Research Council, Pulte Homes, Mitsubishi Electric, Sunpower and Toll Brothers.

A copy of the report, ?Public Policy for Net Zero Homes and Affordability,?can be found here

Prot ect Workers w it h Fall Prevent ion Resources from NAHB

Falls continue to be the leading cause of accidents and injuries in home building and construction at large. OSHA issued more than 5,100 citations to businesses that provided inadequate fall protection systems for workers, resulting in more than $34 million in penalties in 2022 alone

NAHB and its partners have developed m at erials and resources to help businesses comply with federal fall protection regulations and implement safe work practices to prevent fall-related injuries and deaths These resources can be used on the jobsite as quick, easy-to-understand guidance or can give workers an in-depth look at best practices in fall protection

NAHB?s safety sponsor, Builders Mutual Insurance Company, has partnered with

several organizations for its Put Your Guard Up safety initiative. The campaign features training materials to help employers practice guardrail safety on jobsites and includes a training guide, toolbox talk and inspection checklist.

NAHB has also partnered with the Job-Site Safety Institute for its online Fall Prevent ion in Resident ial Const ruct ion t raining course, which covers recognizing common fall hazards, identifying when fall protection is required, understanding the safety requirements for typical jobsite equipment such as ladders and scaffolding, and more.