FOUNDATIONS NEWSLTR SEPTEMBER

ROCHESTER AREA BUILDERS, INC.

PLAYGROUND TO PLAYHOUSE RECEIVES

COMMUNITY EDUCATOR OF THE YEAR AWARD

2023 JUNE MEMBERSHIP REPORT

Membership Total: 402 Retention rate: 93.8%

STAFF

Patrick Sexton, Executive Director Pat@RochesterAreaBuilders.com

Shelly Bahlmann, Shelly@RochesterAreaBuilders.com

Builders, Bags & Brews, Golf Outing, Sporting Clays, Home Show, Newsletter, Showcase Magazine, RAB Update, Member Plus App & RAB Events App

Rebekah Fierst, Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & 40 Below

Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees, Showcase, Remodelers Tour and Website

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

Becky Holmen, Haley Lighting

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.

FROM THE PRESIDENT

those who registered! I’m excited to see this year’s entries, showcasing the incredible talent within our organization. Mark your calendars for September 16-17, and 23-24, or download the RAB Event App for an interactive map, photos, and more information on this great event.

The Sporting Clay Shoot sold out again this year and is quickly becoming one of our most popular events. If you missed out on registering for the event but want to be involved, there are still sponsorship opportunities for the member shoot on September 14th, as well as the youth shoot on September 16th. If you have any questions about sponsorship or volunteer opportunities, please contact Shelly

I hope you’re all surviving this latest heatwave and enjoying the remaining days of summer. Summer always has a way of flying by, and this year was no exception – hard to believe Labor Day is right around the corner. Friendly PSA to my fellow lawn enthusiasts out there – Labor Day weekend is a great time to aerate/overseed your lawn so you can impress your neighbors next spring. If anyone ever wants to geek-out on lawn talk, I’m your guy. My lawn is just barely starting to come back to life after the hot/dry stretch we had earlier this summer.

First and foremost, I want to thank all of the sponsors and participants who made our recent Builders Bags & Brews fundraiser such a success. We heard at least 3 dogs were adopted, which is wonderful! Your participation and support not only made it a great event but also contributed to a wonderful cause—raising funds for Paws & Claws.

The end of summer also signals that the Fall Showcase of Homes and the Remodelers Tour is quickly approaching. A big thank you to all

Mark your calendars for our August Networking Night, taking place on August 29th from 4-6 pm at J.F. Ahern’s office. This promises to be an evening filled with opportunities for networking, delicious hors d’oeuvres from Charlie’s Eatery & Pub, refreshments, prizes, and live Burn Trailer demonstrations. It’s a great chance to connect with fellow members and expand your professional network.

As we move forward, I encourage you all to stay engaged and take full advantage of the incredible opportunities within Rochester Area Builders. Together, we can continue to build a stronger, more vibrant community.

Thank you for your dedication and commitment to RAB. I look forward to seeing you at one of our many upcoming events and working together to make a positive impact.

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

JASON SCRIMSHAW President

Rochester Area Builders, Inc

Rochester

September 2023

WELCOME NEW MEMBERS

RENOVATE, REPAIR, AND PAINT RULEMAKING

The Minnesota Department of Health (MDH) intends to propose new rules governing the Renovation, Repair, and Paint (RRP) program in early fall 2023.

Before the rules are proposed in the Minnesota State Register, MDH hosted a meeting via Webex on Tuesday, Aug. 22, 2023.

We discussed the following:

• Rule draft changes.

• Expected publication date in the State Register.

• How to participate in this rulemaking.

The current rule draft and Summary of Changes document are available at Minnesota Lead Renovation, Repair, and Paint (RRP) Rule Revision - MN Dept. of Health (state.mn.us)

How does this rule impact me?

RRP projects in a pre-1978 home or building can create dangerous lead dust. The Environmental Protection Agency (EPA) currently requires RRP projects that disturb lead-based paint in pre-1978 single-family homes, multi-unit residential housing, and certain commercial facilities and congregate care settings — i.e., those that serve children up to age 6 — to be performed by EPA-licensed or EPA-certified contractors.

After these rules are adopted, MDH will oversee compliance with the RRP program in Minnesota and license or certify individuals and entities that perform this type of work.

Lead is toxic. Children are at most risk, there is no safe level of lead, and exposure to lead impacts learning and behavior. For more information on how the RRP program may apply to you or your organization, please visit Lead Renovation, Repair and Painting Program | US EPA.

PLAYGROUND TO PLAYHOUSE RECEIVES AN AWARD

Amy from Rochester Public Schools and Josh from Rochester Community Education presented us with a plaque for “Community Educator of the Year” for our efforts with our Playground to Playhouse project.

Many hands were involved in this project.

VOLUNTEERS

Ryan Jongeling, The Design Connection

James Coyle, City of Rochester

Jerry Norman, City of Rochester

Nick Worden, DeCook Excavating

Nate Liesse, Elias Construction

Wayne Eisen, Advanced Building Center

Alex Loechler, Kruger Electric

Craig Curley, Superior Mechanical

Todd Boyum, Haley Comfort Systems

Brent Back, All Craft Exteriors

Jay Burke, Heartwood Homes of Rochester

Krista Weisz, Design Studio B

Tony Kunz, Hiller’s Flooring America

Bruce Meadows, Meadows Design Service

Troy Eiden, Modern Design Cabinetry

Jody Hocking, Modern Design Cabinetry

Crystal Hughley, ONB Bank

Carissa Frericks, Rochester Title & Escrow Company

John Eischen, Carpet One of Rochester (Formerly RAB)

Rebekah Fierst, Edina Home Services, (Formerly RAB)

PARTNERS

ONB

Home Depot

Heartwood Homes of Rochester

Schwickert’s

Thank you to everyone that came to Pat’s open house! We had more than 70 people stop by for some conversation, networking and great brats. It was an absolutely pictureperfect summer day and fun to see so many members stop by.

Thanks to everyone who helped with the event, from the serving stations to setup and tear down. We appreciate all of you!

RISING MORTGAGE RATES AND HOME PRICES PUT A DAMPER ON HOUSING AFFORDABILITY

BY ROSE QUINT on AUGUST 10, 2023

Rising home prices and interest rates coupled with elevated construction costs, low existing inventory and solid demand resulted in a significant decline in housing affordability during the second quarter of 2023.

According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), 40.5% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $96,300. This is down from 45.6% posted in the first quarter of this year, and the second-lowest reading since NAHB began tracking affordability on a consistent basis in 2012.

The HOI shows that the national median home price increased to $388,000 in the second quarter, up from $365,000 in the previous quarter. Meanwhile, average mortgage rates rose from 6.46% to 6.59% during this period.

The top five most affordable major housing markets in the second quarter of 2023 were:

1. 1. Lansing-East Lansing, Mich.

2. 2. Scranton-Wilkes-Barre, Pa.

3. 3. Harrisburg-Carlisle, Pa.

4. 4. Indianapolis-Carmel-Anderson, Ind.

5. 5. Pittsburgh, Pa.

Top five least affordable major housing markets—all located in California:

1. 1. Los Angeles-Long Beach-Glendale

2. 2. Anaheim-Santa Ana-Irvine

3. 3. San Diego-Chula Vista-Carlsbad

4. 4. Oxnard-Thousand Oaks-Ventura

5. 5. San Francisco-San Mateo-Redwood City

Meanwhile, Cumberland, Md.-W.Va., was rated the nation’s most affordable small market, with 95.5% of homes sold in the second quarter being affordable to families earning the median income of $89,900.

The top five least affordable small housing markets were also in the Golden State. Tied at the very bottom of the affordability chart were Salinas, Calif., and San Luis Obispo-Paso Robles, Calif., where 6.5% of all new and existing homes sold in the second quarter were affordable to families earning the area median income of $100,400 in Salinas and $113,100 in San Luis-Obispo-Paso Robles.

Visit nahb.org/hoi for tables, historic data and details.

Signature Event Sponsor

DBS Group Hires Jake Siem and Josh Mentzel

As DBS Group continues growing, it has hired Jake Siem as a project superintendent and Josh Mentzel as a project engineer. Both Siem and Mentzel joined the team last month.

Siem is a 20-year veteran of the construction industry . He started his career as a carpenter apprentice in the field and then worked his way into a project superintendent position. He has experience in small and large commercial construction projects across the Midwest and within several commercial markets, including healthcare, institutional, multi family, hospitality and retail.

Mentzel began his career as a project manager and has several years of experience running multiple projects from pre - to post-construction. In addition to general commercial and retail construction, Mentzel has extensive experience in senior housing and the multifamily market.

"We're fortunate to have Jake and Josh on our team," said Chris Walters, CEO and president of DBS Group. "Jake's two decades of hands -on construction experience and broad market knowledge will strengthen our onsite operations. And Josh's strong project management background will be invaluable as we steer projects f rom concept to completion. Their collective skills and experiences underscore our ongoing commitment to delivering the highest level of service and quality to our clients."

DBS Group is a design-build construction manager and general contractor based in On alaska, Wisconsin, and Rochester, Minnesota. Experts in design -build project delivery in various commercial construction markets, DBS Group manages building projects from concept to completion. The company's in-house designers, and external design partners, collaborate with DBS Group 's estimating and construction experts to deliver projects that are on time and on budget.

For more information regarding DBS Group, visit DBSG.com or call (608) 881 -6007.

Siem

Mentzel

your support

builds the story of home.

volunteer. donate. shop.

Your donation of reusable household items and building materials keep them out of landfills while helping families in our community build or repair affordable homes.

It's the story of hard work rewarded and dreams within reach. It's the story of a strong foundation supporting plans for the future. It's the story of an affordable home a family will build with help from Two Rivers Habitat for Humanity and you.

Thank You!

Congratulations to this years winners!

1. Denver Baggers - Kenney B & Jeremy R

2. Boldt Baggers - Matt H & Tracy F

TAP TRUCK SPONSOR

Peak Remodel & Design Solutions

FEATURED SPONSORS

Kruse Lumber

Carpet One of Rochester

Warners’ Stellian Appliance Company, Inc.

Goodin Company

ISG

Altra Federal Credit Union

Knutson Construction Services

Home Federal Savings Bank

Townsquare Media Rochester

BLUE RIBBON SPONSORS

ONB Bank

Kimley-Horn & Associates, Inc.

iHeartMedia

RED RIBBON SPONSORS

Oertli & Pleschourt, LLP

Apex Fence LLC

Widseth

XRG Concepts, LLC

Viking Electric

Registration for RAB members opens July 6, 2023. Go to https://www.bexroch.com/events/golf to learn more and register.

3. Steve Team - Steve T & Brady D

WATER SPONSOR

Culligan of Rochester & Kasson

FACILITIES SPONSOR

On Site Companies

Ready to start? Go to https://www.bexroch.com/join to download an application!

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ROCHESTER AREA BUILDERS

REGISTRATION

ROCHESTER BUILDING PERMITS

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

PINE ISLAND BUILDING PERMITS

DRAMATIC APARTMENT CONSTRUCTION TIME LENGTHENING IN 2022

BY NA ZHAO on AUGUST 7, 2023

The average length of time to complete construction of a multifamily building, after obtaining authorization, was 19.8 months, according to the 2022 Survey of Construction (SOC) from the Census Bureau. The permitto-completion time in 2022 was 2.3 months longer than in 2021, as supply-chain issues and the ongoing skilled labor shortage challenged the industry.

The 2022 SOC data also shows a significant regional variation in the average construction duration of multifamily buildings. The Northeast had the longest time from authorization to completion, 23.7 months, followed by the West, 19.5 months, and the South – 18.9 months. The shortest permit-to-completion period happened in the Midwest with 18.4 months.

The average time to build multifamily homes varies with the number of units in the building. The more units, the more time required to build. In 2022, buildings with 20 or more units took the longest time (22.5 months) to build after obtaining authorization. Properties with 10-to-19 unit required 19.5 months, 5-to-9 unit buildings finished in 18.8 months, and lastly, 2-to-4 unit buildings came in at 18.7 months.

Compared to 2021, it took 4.5 months longer to complete multifamily buildings with 2-to4 units, 2.1 months more for 10 to 19 unit buildings, 1.6 months longer for properties with 20 or more units, and 0.9 month longer to finish buildings with 5-to-9 units.

HOUSING COSTS PERSIST AS KEY DRIVER OF INFLATION

BY FAN-YU KUO on AUGUST 10, 2023

Consumer prices showed a slight uptick in July, with core inflation remained sticky, ending a streak of 12 consecutive months of steady declines. Despite a slowdown compared to the previous month, the shelter index (housing inflation) continued to be the largest contributor to both headline and core inflation, accounting for over 90% of the increase in headline inflation.

The Fed’s ability to address rising housing costs is limited as shelter cost increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast expects to see shelter costs decline further later in 2023, supported by real-time data from private data providers that indicate a cooling in rent growth.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.2% in July on a seasonally adjusted basis, the same increase as in June. The price index for a broad set of energy sources rose by 0.1% in July as the increase in gasoline index (+0.2%), natural gas index (+2.0%) and fuel oil index (+3.0%) more than offset the declines in electricity index (-0.7%). Excluding the volatile food and energy components, the “core” CPI rose by 0.2% in July, the same increase as in June. Meanwhile, the food index increased by 0.2% in July with the food at home index rising 0.3%.

In July, the indexes for shelter (+0.4%) and motor vehicle insurance (2.0%) were the largest contributors to the increase in the headline CPI. Meanwhile, the indexes for airline fares (-8.1%), used car and trucks (-1.3%) as well as communication (-0.1%) declined in July.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.4% in July, same increase in June. The indexes for owners’ equivalent rent (OER) increased by 0.5% and rent of primary residence (RPR) increased by 0.4% over the month. Monthly increases in OER have averaged 0.6% over the last seven months. These gains have been the largest contributors to headline inflation in recent months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 3.2% in July, following a 3.0% increase in June. The “core” CPI increased by 4.7% over the past twelve months, following a 4.8% increase in June. This was the slowest annual gain since October 2021. The food index rose by 4.9% while the energy index fell by 12.5% over the past twelve months.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index rose by 0.3% in July.

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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

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

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