FOUNDATIONS NEWSLTR MARCH

2023 JANUARY MEMBERSHIP REPORT

Membership Total: 404

Retention rate: 94%

STAFF

John Eischen, Executive Director

John@RochesterAreaBuilders.com

Shelly Bahlmann, Shelly@RochesterAreaBuilders.com

Golf Outing, Sporting Clays, Home Show, Directory, Newsletter, RAB Update, Member Plus App & RAB Events App

Rebekah Fierst, Rebekah@RochesterAreaBuilders.com

Ambassadors, Awards, Builders, Bags & Brews, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & Remodelers Tour, 40 Below

Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees and Showcase Committee, Website

GOVERNMENT & PUBLIC AFFAIRS CONSULTANT

Rick Dold, Rick@GodwinDold.com

BOARD OF DIRECTORS

PRESIDENT

J ason Scrimshaw, Kimley-Horn & Associates, Inc.

VICE PRESIDENT

Adam Giannini, Knutson Construction

SECRETARY

Jennifer Mitchenll, Edina Realty

TREASURER

Vanessa Hines, Widseth

PAST PRESIDENT

Becky Holmen, Haley Lighting

MISSION STATEMENT

DIRECTORS

Derrick Chapman, Schmidt Carpentry

Adam Kramer, Kramer Contracting

Jarett Jones, Merchants Bank

Aaron Thompson, The Design Connection

Austin Ryan, Ryan Windows & Siding

Kelsey Vaszily, Kraus-Anderson Construction

Melissa Barbour, TLS Companies, LLC

Joe West, Valor Mechanical

Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI) / SBDC

BUILDERS EXCHANGE COUNCIL CHAIR

Katie Reinhart, Kraus-Anderson Construction

COMMERCIAL BUILDERS COUNCIL CHAIR

Keith Kranz, LVC Companies

DEVELOPMENT COUNCIL CHAIR

TBD

REMODELERS COUNCIL CHAIR

TBD

40 BELOW CHAIR

Adam Giannini, Knutson Construction

NATIONAL LIFE DIRECTORS

Steve Buss, Cornerstone Builders & Real Estate, Inc.

NATIONAL DIRECTORS

Dana Hlebichuk, Widseth

Levi Kaiser, Benike Construction (Rep)

Todd Severson, TLS Companies, LLC

STATE DIRECTORS

Mike Allen, Mike Allen Homes, LLC

Jay Burke, Heartwood Homes

Jean DeWitz, DeWitz Home Builders, Inc.

Kathy Einck, Maplewood Homes, LLC (Rep)

John McGuine, JM Consulting

John Eckerman, RSP Architects

Kenneth Bush, Bush Companies

The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota.

We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.

March 2023

Rochester Area Builders

2023 Calendar of Events

FROM THE PRESIDENT

there, and I’m looking forward to catching up with friends and colleagues, old and new.

The 2023 Spring Showcase of Homes is quickly approaching. The showcase is scheduled for April 15th-16th, and 22nd23rd. Don’t forget, the advertising deadline is March 2nd and the final registration deadline is March 16th!

Studs, Struts and Stilettoes is on the calendar for April 20th, 2023. Studs, Struts and Stilettoes is a community event and fundraiser for Habitat for Humanity, and it’s great event. I’m always excited to see everyone’s ideas and creativity on display. Keep an eye out for more information.

Hello again! As I’m writing this letter, we’re in the middle of a classic Minnesota snowstorm. The kind that drops a foot of snow just as you’re getting your hopes up that spring is right around the corner. While the current weather makes it feel like Spring is far off in the distance, there are several events on the RAB calendar that always signify the end of winter to me.

Before mentioning the upcoming events, it’s worth taking some time to celebrate another successful Home Show in the books. This year’s Home Show was well attended, and I’ve heard from multiple people that Friday night’s Date Night and cooking demonstration was a favorite!

We have a Networking Night scheduled for February 28th from 4 – 6 pm at Modern Design Cabinetry. Thanks in advance to Modern Design Cabinetry for hosting! I’ll be

Lastly, I wanted to remind everyone about RAB’s scholarship program. Multiple $500 and $1,000 scholarships are available for graduating high school seniors for attendance in a post-secondary program in a construction-related field including technical schools, trade schools, or college. Applications for the 2023 scholarships are due May 8th. If you know any high school seniors that are pursuing a career path in the construction industry, make sure they take advantage of this great opportunity!

Jason Scrimshaw, P.E. Kimley-Horn 2023 RAB President

JASON SCRIMSHAW President Rochester Area Builders, Inc

In Memory of Sharill Mueller

It is with a heavy heart that we share the news of Sharill Mueller’s passing. Sharill was with Rochester Area Builders for 11 years (2006-2017) as the Association’s Finance and Special Events Coordinator. She worked closely with the Home Show and Showcase of Homes, where many of you got to know her. Sharill was known for her incredible attention to detail, her strong work ethic and her always honest appraisal of happenings around the office and RAB. She will be greatly missed.

Obituary from Family

Sharill Lee Mueller, 70, died Sunday, February 19, 2023 at Mayo Clinic Hospital – St Marys Campus.

Sharill was born on May 27, 1952 to Herbert and Edna (Buker) Mueller in Owatonna, MN. She attended Owatonna High School and graduated from Waseca Ag School in Business Banking. Sharill spent many years in banking and then later as bookkeeper for Rochester Area Builders. She was a member of Holy Cross Rochester, 125 Live, and Operation Bedroll MN.

Sharill loved crafting, crocheting, reading, gardening, volunteering for Salvation Army and 125 Live, and making sleeping mats for Operation Bedroll MN.

Sharill is survived by her sister, Dorean (Leland) Loppnow of Dodge Center, MN; her nieces and nephews, Monica Loppnow of Rochester, MN; Melissa (Scott) Millner of Hastings, MN; Megan Loppnow (Eric McPhee) of Duluth, MN; Matthew (Melissa) Dohlman of Adel, IA; Wesley (Samantha) Dohlman of Chester, IA; and several great nieces and nephews.

Sharill is preceded in death by her parents, Herbert and Edna Mueller; brother, Allen Mueller; and sister, Marcia (Ron) Dohlman.

Memorials may be given to Salvation Army.

Memories and condolences of Sharill may be shared at rochestercremationservicesmn.com

Please join us at the upcoming RAB Networking Night!

Tuesday, February 28th 4 p.m. to 6 p.m.

Modern Design is a family-owned company who has been building and installing custom cabinets for wonderful clients for over 30 years. We are a one-stop shop providing everything from design to finishing to installation. In order to make the selection process seamless for our clients, our showroom features multiple cabinet displays showcasing a variety of wood types and paint/stain colors. Our color collection, door styles, hardware and countertop displays are also available in our showroom.

If you are unable to attend the event, call (507) 512-1360 to stop by for a cup of coffee and a tour!

WELCOME NEW MEMBERS

Acme Tools

Derek Smith Supplier

612.219.9613

acmetools.com

Jech Custom Homes & Construction

Matthew Jech Custom Home Builder

507.879.2864

jechcustomhomes.com

Sun Control of MN

Karissa Dunham Window Tinting

651.335.0172

suncontrolmn.com

Brevig Homes

Travis Brevig

Residential Builder

507.272.9059

Dave Alan Homes

David Dybsand Design-Build

507.577.1787

davealanhomes.com

COMMITTEES & COUNCILS

With over 20 committees and 5 councils, there is no shortage of opportunities to get involved with the Association. From planning events, to awarding students scholarships, to participating in community projects, there are many options to choose from. As is often said, “You get out what you put into the Association”.

40 BELOW COUNCIL

This is an active, connected and engaged group of young professionals in the building industry. Through community involvement, professional development and networking events, this group is creating a welcoming atmosphere to cultivate long-term connections both

COMMERCIAL BUILDERS COUNCIL

The members of this Council are interested in all aspects of commercial and industrial construction. They support one another and provide information to the community.

REMODELERS COUNCIL

The goals of this Council are to provide education for themselves in various areas of remodeling and to promote their expertise to the consumer.

DEVELOPMENT COUNCIL

The members of this Council are interested in the areas of industrial, commercial and residential development. They support one another and provide information to the community.

BUILDERS EXCHANGE COUNCIL

This Council provides access to commercial projects currently out for bid in our area. Members can view plans

and specs in our office and also online at their office if they subscribe to the Plans Online Service. Members also receive the Weekly Bulletin and access to the website, giving them information on posted projects.

Contact Rebekah if you are interested in joining a council or committee.

OMB PROPOSES STANDARDS ON BUILDING MATERIALS MADE IN AMERICA

BY DAVID LOGAN on FEBRUARY 10, 2023

The Office of Management and Budget (OMB) has proposed new standards to determine if construction materials for federally funded infrastructure projects are made in the USA. The new guidance, required by the Infrastructure Investment and Jobs Act—also known as the Bipartisan Infrastructure Law (BIL)—“sets standards to carry out the statutory requirement that all manufacturing processes for construction material occur in the United States.” Federally funded infrastructure projects include housing development that receives any federal support such as through the CDBG and HOME programs.

Covered Construction Materials and Manufacturing Standards

The Build America, Buy America Act (BABA)—part of the BIL—requires that OMB issue standards that define ‘‘all manufacturing processes’’ in the case of construction materials. Initial guidance (memorandum M–22–11) issued in April 2022 fell short of this and instead provided nonbinding guidance on the definition of construction materials. The latest proposal includes an expanded list of products considered construction materials and proposes standards for ‘‘all manufacturing processes’’ for the manufacture of construction materials.

Among construction materials covered by the guidance are lumber, drywall, glass, and plastics. The guidance includes domestic manufacturing process standards for the following construction materials.

However, OMB then directs agencies to consider certain criteria when determining if a particular project constitutes ‘‘infrastructure.’’ These include whether the project will serve a public function, including whether the project is publicly owned and operated, privately operated on behalf of the public, or is a place of public accommodation, as opposed to a project that is privately owned and not open to the public.

Waivers and Exemptions

A Federal awarding agency may issue a waiver to the application of the Buy America Preference. The agency notes three types of waivers:

• Public Interest Waiver: May be applied if the Buy America Preference would be inconsistent with the public interest.

• Nonavailability Waiver: May be applied if types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality

• Unreasonable Cost Waiver: May be applied if the inclusion of iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent

Before issuing a waiver, the Federal awarding agency must receive a written request from a non-Federal entity to waive the application of the Buy America Preference. The awarding agency must then “prepare a detailed written explanation,” make the waiver and explanation publicly available, allow a minimum 15-day public comment period, and then submit to OMB for final review.

The guidance exempts awards expenditures for financial assistance made in anticipation of or response to an event or events that qualify as an ‘‘emergency’’ or ‘‘major disaster.”

Public Comment Period

Defining Infrastructure

According to OMB, infrastructure includes roads, highways, and bridges; water systems, including drinking water and wastewater systems; electrical transmission facilities and systems; utilities; broadband infrastructure; and buildings and real property.

OMB instructs Federal awarding agencies to interpret the term ‘‘infrastructure’’ broadly and consider the description provided in paragraph (c) of this section as illustrative and not exhaustive.

OMB has provided only 30 days to comment on the new standard. NAHB will submit comments as we believe that, under OMB’s proposal as written, virtually all housing development could be excluded from the standard. We have strongly urged HUD to exempt single-family and multifamily affordable housing projects from BABA mandates.

However, NAHB remains concerned that the “built in America” standards may stall road and utility projects funded by CDBG or HOME that are needed to allow housing development to take place.

R O CH E S TE R A R EA B U I LDE R S

SPRING SHOWCASE OF HOMES

Registration information online HERE

Final Deadline March 16th

Contact Elizabeth with questions

April 15 - 16 & April 22 - 23, 2023

The 2023 Showcase of Homes will once again feature a Spring Showcase of Homes, Fall Showcase of Homes, and Fall Remodeler’s Tour. The shows will feature new homes, townhomes, and subdivisions as well as remodeling projects. All entries will be showcased by local Rochester Area Builders’ members.

4.20.23

Presented By: A Benefit For:

OPPORTUNITY SCHOLARSHIP

GRADUATING HIGH SCHOOL STUDENTS

POST-SECONDARY SCHOLARSHIPS

Go to https://qrco.de/ScholarshipApp for Scholarship application.

CRITERIA:

1. Applicant must be a resident of Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Steele, Wabasha, Winona counties; be recommended by a RAB or BER member; or participated in the RAB Youth Sporting Clay Shoot.

2. Applicant must be accepted by a post-secondary program in a construction related field including technical school, trade school, apprenticeship, or college.

Rochester Area Builders, Inc. is proud to announce their 2023 scholarship program. Either $1000 or $500 non-renewable scholarships are available for graduating high school seniors and college freshmen. Scholarships are made available through the Commercial Builders Council, the Builders Exchange of Rochester, and the Youth Sporting Clay Shoot. Scholarships are for attendance in a post-secondary program in a construction-related field including technical school, trade school, apprenticeship, or college. Scholarship recipients will be announced in June 2023. To be eligible for any scholarships, applications must be postmarked by May 8, 2023.

3. Applicant must have a 2.5 or better G.P.A. – High School Transcript Required

4. Applicant must demonstrate financial need.

5. Scholarship will be paid directly to the school.

Rochester Area Builders

108 Elton Hills LN NW Rochester, MN 55901

507-282-7698

Rab@rochesterareabuilders.com

MATERIALS REMAIN BUILDERS’ TOP CHALLENGE, BUT INFLATION AND INTEREST RATES ARE THREATENING

BY ASHOK CHALUVADI on FEBRUARY 13, 2023

The price and availability of building materials again topped the list of problems builders faced last year, while interest rates (along with general inflation and negative media reports) moved considerably up the list. According to special questions on the January 2023 survey for the NAHB/Wells Fargo Housing Market Index, building material prices were a significant issue for 96% of builders in 2022. The second most widespread problem in 2022 was availability/time it takes to obtain building materials, cited by 86% of builders. These were the same two problems that topped the list in 2021. Cost and availability of labor has also been a relatively widespread problem, reported as a significant by 82% of builders in 2021 and 85% in 2022, a result that is not surprising given the large number of unfilled job openings in the construction industry.

Compared to 2021, some of the problems became significantly more widespread in 2022. High interest rates were a problem for only 2% of builders in 2021, but

more of a problem in 2023. Negative media reports making buyers caution was a significant problem for 55% of builders in 2022, but 79% expect them to be a problem in 2023. Buyers expecting prices or interest rates to decline if they wait was a significant problem for 49% of builders in 2022, compared to 80% who expected it to be an issue in 2023. Concern about employment/economic situation was a problem for only 41% of builders in 2022, but 73% expect it to be a problem in 2023. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 38% of builders in 2022, compared to 54% who expected it to be a problem in 2023. Finally, buyers unable to sell their existing homes was a significant problem for only 13% of builders in 2022, but 52% expect it to be a problem in 2023.

For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full HMI January2023 Special Survey REPORT.

this increased to 66% in 2022. Rising inflation in the US economy was a significant problem for 63% of builders in 2021, compared to 85% in 2022. And 26 percent of builders said negative media reports making buyers cautious was a significant problem in 2021, compared to 55 percent in 2021.

Even more builders—a full 93%—expect high interest rates to be a problem in 2023, up strongly from the 66% who said it was a problem in 2022. Moreover, both the current and expected numbers were much higher in the recent survey than at any time in the 2011-2021 span.

Compared to the supply-side problems of materials and labor, problems attracting buyers have not been as widespread, but builders expect many of them to become

ROCHESTER BUILDING PERMITS

2023

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

PINE ISLAND BUILDING PERMITS

MORTGAGE ACTIVITY INCREASES AFTER DIP IN RATES

BY JESSE WADE on FEBRUARY 8, 2023

Per the Mortgage Bankers Association’s (MBA) survey through the week ending February 3rd, total mortgage activity increased 7.4% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate fell one basis point to 6.18%. The FRM rate has fallen around 100 basis points since October of 2022.

The Market Composite Index, a measure of mortgage loan application volume, rose by 7.4% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity increased 3.1%, while refinancing activity increased 17.7% week-over-week.

Purchasing activity has slightly increased as interest rates have fallen for 5 consecutive weeks, but it remains 32.7% lower than one year ago. Refinancing activity continues to remain at lower levels, the refinancing index is down 74.8% from one year ago.

The refinance share of mortgage activity increased from 31.2% to 33.9% over the week, while the adjustable-rate mortgage (ARM) share of activity decreased to 6.6% from 6.7%. The average loan size for purchases was $428,500 for the first week of February, up from $405,500 over the month of January. The average loan size across all products has increased since December 2022. Many buyers remain priced out by the unaffordability of homes currently available.

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FOUNDATIONS NEWSLETTER ADVERTISING

Rochester Area Builders Newsletter is an unbeatable opportunity to advertise to members and individuals associated with RAB. It is a source of valuable association and industry information, and is published and emailed monthly. Foundations is sent to over 1600 connected industry professionals. Ad sizes are listed under Display Ad Dimensions, and prices are located above. Ads may be changed from month to month.

Our prices are for full color ads. We will gladly work with you to design your ad. Please send digital files for all ad copy, logos, and artwork. We use PC format. We accept Illustrator and Photoshop files. Convert all fonts to outlines. We also accept the following high resolution file types: .tif, .eps and .pdf (with all graphics and fonts embedded). If you have any other formats please contact us.

RETURN TO: ROCHESTER AREA BUILDERS

Shelly Bahlmann

Shelly@RochesterAreaBuilders.com

108 Elton Hills Ln NW

Rochester, MN 55901

507-282-7698

Reach Qualified Customers

Advertise on the RAB Website!

More than 3,000 people visit the RAB website each month, many of them looking for a contractor. Advertise on our site and reach them when they’re primed to buy! Banner ads are available in a variety of locations on the RAB site, from job posts to the contractor directory. Higher tiers come with priority placement in directory search results too. Contact us today to learn how you can start advertising, starting at $299.

Contact Elizabeth Elizabeth@RochesterAreaBuilders.com or 507-282-7698

WEBSITE PROFILE ENHANCEMENTS

Company Name, Address and Phone Number

Links to Website, Address, and Phone

5 Categories

Medium Placement in Search Results

Link to Profile Page

12 Categories

Company Description (200 Characters)

Keywords (240 Characters)

Hours of Operation

Driving Directions

Higher Placement in Search Results

Company Description (1600 Characters)

Keywords (Unlimited Characters)

200 Characters on Search Results

Bulleted List with Hyperlinks

Logo on Profile Page Can Be Added

Search Results Summary (200 Characters)

Profile Page Header Can Be Added

Gold Map Pin

Logo On Search Results Can Be Added

Social Networks Can Be Added

Photo Gallery Can Be Added

YouTube Video Can Be Added

Contact Elizabeth for more information