february 2015 building buzz

BBBUILDING BUZZF E B R U A R Y 2 0 1 5

President’s Letter Chili, Oysters and a Call to Action | page 3

City Beat City Hall Improvements, Inspection Scheduling | page 6

BMHBA News February Fun Night, Home Show Approach | page 5

National NewsMortgage Improvements | pages 10-11

NDAB NewsA Cause to Consider | page 14

February 2015BMHBA Building Buzz

Building BuzzPublisher/Editor:

Dot Frank

Layout Editor: Chelsea Gleich

Building Buzz is a publication of the Bismarck-Mandan Home Builders Association

2600 Gateway Ave., Suite 1Bismarck, ND 58503

Phone: 701.222.2400 Fax: 701.250.9730

Like Us! www.facebook.com/bmhbaFollow Us! www.twitter.com/bmhba

Your membership is three-in-one: BMHBA, NDAB and NAHB

Scan to visit www.bmhba.com

Bismarck-Mandan Permit Reports Through December 2014

BISMARCK - monthly/yearly permit reports can be found at www.bismarck.org

Permit Type YTD 2014 YTD 2013New Residential Single Family Detached Single Family Attached Duplex 3 or 4 Unit 5+ UnitResidential GaragesNew Commercial

511/$141.55M314/$57.75M171/$25.82M11/$1.61M1/$1.01M14/$55.61M86/$.75M43/$12.74M

646/$145.26M413/$74.88M204/$30.45M9/$1.71M4/$2.51M16/$35.7192/$.889M64/$19.28M

MANDAN - monthly/yearly permit reports can be found at www.cityofmandan.com

Permit Type YTD 2014 YTD 2013New Residential Single Family Duplex/Condo ApartmentsRemodel and AdditionsNew CommercialAlter Commercial

141/$60.4M128/$27.15M8/$2.23M5/$31.02M138/$2.77M40/$18.17M44/$5.03M

Professionals building our community through promotion of home ownership, education and legislation since 1958.

208/$83.38M156/$44.28M44/$9.66M8/$29.44M136/$2.62M18/$10.3M26/$8.5M

I want to personally thank all of the members who came out for our association’s Annual Banquet last month. Your support through attendance means a lot to our staff, board and me as your 2015 president. I hope that you enjoyed the event, each other’s company and left with one of the many silent auction items. Your generosity continues to amaze me. In addition to helping raise $1800 for our BSC Scholarship Fund, ticket sales and sponsorships generated

non-dues revenue, which the association relies on to keep our doors open, education available and advocacy strong.

I’m looking forward to another excellent year for our industry. As was reported, permit numbers in Bismarck, Mandan and Lincoln were down over year prior, but remain impressive when compared to the past 5+ years. In fact, as you’ll see in the article on page 7, units paint a better picture of our active housing market, and when we expand our observations out to Burleigh and Morton Counties, the numbers gain momentum.

The association will continue to host members at upcoming social events including February Fun Night. That event, which is Thursday, Feb. 12 is a membership favorite as it pits board members against each other in a competition to be crowned chili champ. And of course, our host Jerome Distributing makes sure we get our fill of their beverage samples. Get your tickets today at bmhba.com/events and remember you must be 21 to attend.

I’d like to encourage all of you to attend the NDAB/NDAR Chili & Oyster Feed the following week on Feb. 17. This has become a legendary event that caters to our state legislators and affords members the opportunity to meet our elected officials and bend their ear on issues that impact housing. The event takes place from 5-7 p.m. at the Ramada in Bismarck.

With the legislative session in full swing, I want to remind you all that your membership with the BMHBA also gained you membership with our state association. Executive Officer Kim Schneider has been busy since the start of the session lobbying on your behalf. One of the bigger issues she and the Government Affairs Committee have been following is the sprinkler legislation.

Locally, several members recently met with the Bismarck Building Official to share concerns over a change in inspection scheduling requests. I want to thank everyone who completed the online impact survey. Your results helped us illustrate the need to change the requirements.

If you haven’t been receiving requests to take action or our e-newsletters via email, please contact the office at 222-2400 to ensure they have a correct email address on file. Email is the most effective way to reach you in a short time frame and allows us to communicate in real time.

Finally, I’d like to remind everyone of the limited opportunity to participate in the Home Show. Only a handful of booths remain and may be picked up by calling the office or emailing [email protected]. Your next opportunity to get your products in front of thousands of potential clients is during the Spring Parade of Homes. That reminds me, you better start making plans now to get your home show ready for the April 24 start date!

Drew Knutson2015 Board President

February 2015 BMHBA Building Buzz

A Word from Our President

Drew KnutsonBoard President

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Don’t Miss These Upcoming Events!

Feb. 12: February Fun Night

Feb. 17: Legislators Chili & Oyster FeedFeb. 17: BUILD-PAC Retreat

Feb. 25: Significant Changes to the 2015 International Code

Hot Chili and Cold Beer Aim to Attract Members

The HBA’s annual February Fun Night is scheduled for Thursday, Feb. 12. The laid back social event attracts hundreds of members. Guests will enjoy chili prepared by our Board of Directors and have a chance to choose their favorite. Additionally, our host Jerome Distributing will sample an appealing spread of their malt beverages including classics Coors and Miller Light along with Redd’s Apple Ale and Samuel Adams.

One free admission per membership with additional tickets at $15 each. The event runs from 5-7 p.m. at Jerome Distributing, which is located at 3420 Miriam Ave. in Bismarck. Must be 21 to attend. Register online at bmhba.com/events or call 222-2400.

The 38th Annual Home Show is shaping up to be the biggest in the history of the Bismarck-Mandan Home Builders Association. A total of 391 booth spaces were made available at the start of registration and fewer than 20 remain.

The event, which is at the Bismarck Event Center, runs March 13-15 and is estimated to attract more than 6500 spectators. Booth fees are $450 for members and $675 for non-members and include: a 10’x10’ exhibit space, four exhibitor name badges, one table and two chairs per booth, electrical and water (where available), wireless Internet and a VIP Lounge for exhibitors.

Visit https://www.bmhba.com/home-show.aspx for the Home Show brochure and contract or call 222-2400.

Home Show Booth Space Slipping Away

<20SPACESLEFT!

Regal Home Solutions | Nate Halvorson | Windows, Siding, DoorsRHR Construction, Inc. | Chad DeSmith | General Contractor

Rodgers Hardwood Floors, Inc. | Jerry Rodgers | FlooringRusch Homes | Tim Rusch | Home Builders (Custom)

Schwan Buick GMC Cadillac | Suzy Saunders | Auto Parts/ServiceSculpture by Design, Inc. | Brenda Thibodo | Concrete CountertopsSheet Metal Specialties, Inc. | Dan Johnson | Steel ManufacturingSkinner’s Roll-Off Service, Inc. | Doug Kocourek | Waste Collection

Spas, Etc. | Jerry Caufield | Spas/PoolsSpiffy Biffs | Colln Walth | Portable Restrooms

SSS Construction, Inc. | Kevin Seidel | Home Builders (Custom), RemodelingStarion Financial | Lindsey Matter | Mortgages, Financial Services

Tobias Marman Construction | Tobias Marman | Home Builders (Custom)U.S. Bank | Shanna Johnson | Mortgages, Financial Services

Wagon Wheel Lumber & Hardware, Inc. | Newly Voigt | Building Supplies

February 2015 Anniversaries (Cont.)


Bowling with the Builders is an excellent way to connect with our builder members. The event, which is open to teams and individual bowlers takes place on Tuesday, March 24 at Midway Lanes in Mandan.

Registration is $25 per player and the fee includes two games, shoe rental, a drink ticket and tacos in a bag for the players. Assemble your own team or arrive solo and you'll be placed with peer association members.

If bowling isn't your game, but you'd like to support the event and association just the same consider a Bowling with the Builders sponsorship. Lane sponsorships are available for $100. Sponsors will receive recognition on event materials including, but not limited to, our website, newsletter, emails and faxes.

Strike a Relationship with Builders

City Beat

Mandan Seeks Comments on New City Hall

Community members are invited to review and provide input on location options for a new or renovated Mandan City Hall. JLG Architects, hired to conduct a facility needs study to accommodate growth over the next 20 years, has outlined four options for the future of Mandan’s City Hall:

• renovating the existing Memorial Building, • renovating the former junior high building, • building on the south side of the 200 block of

west Main Street, or • building on a greenfield site north of I-94. A handful of other locations have been considered.

The firm also outlined a “do-nothing” approach. Visit cityofmandan.com for maps and plan details. Information is also available upon request at Mandan City Hall, 205 Second Avenue NW. The comment period extends through Feb. 10. Comments may be e-mailed to [email protected] or mailed to 124 North Third Street, Grand Forks, ND 58203.

Weight Rating Score Rating Score Rating Score Rating Score1. Adequate Parking

4 2 8 4 16 5 20 5 20

2. Civic Identity2 4 8 5 10 3 6 2 4

3. Ease of Transition/ Relocation

1 3 3 3 3 3 3 2 2

5. Highest and Best Use

3 5 15 4 12 3 9 3 9

6. Project Cost3 5 15 2 6 4 12 2 6

7. Proximity to County Facilities

2 5 10 2 4 4 8 1 2

8. Site Size4 3 12 4 16 5 20 5 20

9. Site Availability4 5 20 3 12 2 8 4 16

10. Supports Downtown Development

2 4 8 4 8 3 6 1 2

11. Traffic Access2 3 6 4 8 2 4 3 6

12. Consolidated Civic Functions

3 4 12 4 12 2 6 4 12

Total Score: 117 107 102 99

Each Criteria is weighted (on a scale of 1-4) by its relative importance. Sites are rated (1-5) for how well the site meets the criteria, and a total score is tallied.

Criteria

1. Existing City Hall Building

4. Greenfield Site (new)

2. Main Street Site (new)

3. Former Jr. High Building

© 2015 JLG ARCHITECTS JANUARY 27, 2015

RENOVATED CITY HALL

- RENOVATION OF EXISTING CITY HALL - 26,000 SQ.FT.- NEW MAIN ENTRANCE- NEW CITY/COUNTY PLAZA AND PARKING

PROPOSED SITE PLAN

SITE OPTION 1: EXISTING CITY HALL BUILDINGEXISTING SITE PHOTO

SITE COMPARISON MATRIX

AREA MAP

NEW MAIN ENTRANCE

NEW PUBLIC PLAZA

EXPANDED PARKING

MORTON COUNTY

FACILITIES

Bismarck Inspections Scheduling Requirements Outlined

The BMHBA was recently made aware of a new system requirement in Bismarck that prevents inspections from getting scheduled prior to a permit being issued. To ensure timely scheduling of your inspections, it is recommended that you obtain permits in advance of requesting inspections.

The association also is excited to share that the City of Bismarck is no longer requiring a 24-hour advance notice for scheduling inspections. Inspections called in after 3:30 p.m. will be scheduled for the following day. City staff continue to request advance notice for all inspections.

Data from the cities of Bismarck, Mandan and Lincoln cite fewer permits were pulled for new construction in 2014 than the year prior. Combined housing construction permits for the three municipalities fell 29.6% in 2014 compared to 2013 from 1000 to 704.

“It’s hard to come down from a high, but we’re still at cruising altitude,” says Knutson. “When you see as much as 80% growth from one year to the next it should come as no surprise that we’ve got to straighten our trajectory at some point, and that point appears to be now.”

Despite a slower construction season, home builders and owners continue to add incredible value to the community. Bismarck gained $140 million in residential value in 2014, Mandan $60.3 million and Lincoln $7.2 million.

Additions and remodels gained momentum in 2014. Permits pulled for room additions in all three cities increased 6.3%. Decks also experienced gains growing 47% from year prior.

Many factors point to a healthy construction season for home builders. Interest rates remain attractive to home buyers and access to financing is easing. The return of Fannie and Freddie’s 3% down option and the reduction in mortgage insurance premiums also are predicted to help housing in 2014.

Items that may hinder growth continue to be access to labor, cost of construction materials and access to developable lots.


Permit Slow, But Builder Pace Remains Strong

The North Dakota Housing Finance Agency (NDHFA) is accepting applications for more than $2.6 million in federal tax credits that support the development of multifamily housing for low-income households.

“The Low Income Housing Tax Credit program addresses the housing needs of North Dakota’s lowest income households – individuals and families that work minimum wage jobs and disabled or elderly fixed-income households,” said members of the North Dakota Industrial Commission in a joint statement.

The commission approved the Low Income Housing Tax Credit (LIHTC) program’s qualified allocation plan at its November meeting. Administered by NDHFA, the program offers a reduction in federal income tax liability for up to 10 years to owners of rental housing projects who set aside a minimum portion of the units for households earning 60 percent or less of area median gross income.

The LIHTC program plan and application are available online at www.ndhfa.org or by contacting NDHFA at (800) 292-8621 or [email protected].

Counties Experience Strong Construction Season

Development Support Available

Unlike their city counterparts, both Burleigh and Morton Counties saw permit number rise in 2014.


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Snowflakes, glittered trees and purple and teal accents set the tone for the association’s Annual Banquet. Members made their way to the Ramkota Hotel after work to begin bidding on more than 38 silent auction items, purchase their first drink and enjoy a social hour before dinner began.

The silent auction generated $1800, which will fund our three $1000 BSC Scholarships. The HBA thanks all bidders and members who contributed silent auction items.

In addition to the auction, the event featured comments from Arnold Karsky, the North Dakota Association of Builder’s 1st Vice President

Annual Banquet Sets Stage for Successful 2015


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Annual Banquet Sets Stage for Successful 2015

Legislators Chili & Oyster FeedJoin HBA members from across the state as the North Dakota Association of Builders and North Dakota Board of Realtors host the famous Chili & Oyster Feed on Tuesday, Feb. 17 from 5-7 p.m. at the Ramada. This bi-annual event is a social for our legislators and we invite all members to attend.

along with the induction of three new board members and the swearing in of our 2015 Board President Drew Knutson of Knutson Homes.

Executive Officer Dot Frank shared some of 2014 successes and Knutson talked about several of his goals as president such as increased builder participation, stronger advocacy and membership growth.

A heartfelt thanks to all members who attended and those who sponsored the event, including: Platinum Sponsors: Bismarck Title Co, CornerStone Bank, Ferguson Enterprises and Kirkwood Bank & Trust; Gold Sponsors: Diversity Homes, Haider Glass Specialties, Knutson Homes, Northwest Contracting and Regal Home Solutions; Silver Sponsors: Fireside Custom Homes, Odden Construction, Puklich Chevrolet, Security First Bank, TK Homes and Venture Building Company; and Bronze Sponsors: Armor Interactive, Cullen Insulation, D&M Industries, Edgewood Development Group and Midwest Deck Company.

Find event photos and watch Knutson’s speech online at facebook.com/bmhba.


National News

In a move that will help first-time home buyers, President Obama announced Jan. 8 that the Federal Housing Administration (FHA) will reduce its annual mortgage insurance premiums by 0.5 percentage points from 1.35% to 0.85% during an address in Phoenix.

A fact sheet released by the White House says this reduction in premiums will produce an average savings of $900 annually for all new FHA borrowers and that the lowered premiums will create opportunities for 250,000 new home owners to purchase a home over the next three years.

FHA Mortgage Insurance Premiums Cut Q. I have the mortgage insurance

now….Can I get it lowered due to this change or am I stuck with the current rate?

A. NAHB asked their Housing Finance staff experts, and they say you can refinance and lower your MIP, but you need to take into account your current rate and any costs associated with the refinance before you take the plunge.

By a vote of 252 to 172, the House on Jan. 8 approved H.R. 30, the Save American Workers Act of 2015. The NAHB-supported measure would restore the traditional 40-hour definition of full-time employment in the Affordable Care Act. Currently, the health care law defines 30 hours of service as full-time.

In a letter to lawmakers in support of this measure, NAHB said that restoring the conventional 40-hour definition of full-time employment would “provide greater certainty to small employers, which in turn would provide for greater flexibility for planning and future growth.”

The law’s definition stipulating that 30 hours constitutes a full-time work week does not reflect employers’ workforce needs or employees’ desire for flexible hours, the letter said. “The new definitions could set a dangerous precedent for redefining full-time status in the future,” NAHB told lawmakers.

NAHB also made it clear to members of Congress that the association remains strongly opposed to the employer mandate included in the Affordable Care Act.

Senate Majority Leader Mitch McConnell (R-Ky.) has indicated that the Senate will consider the House bill.

House Approves 40-Hour Workweek for Affordable Care Act


National News

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According to NAHB tabulations of the third quarter Federal Reserve Flow of Funds, the real estate equity position of U.S. households (the difference between assets and liabilities) increased nearly 1.6% for the quarter.

The market value of real estate held by U.S. households increased $180 billion dollars during the quarter, while liabilities (home mortgages) remained virtually unchanged. The value household-owned real estate, including owner-occupied and second homes, totaled $20.4 trillion for the quarter. Total home mortgage debt outstanding stands at $9.4 trillion.

Recent developments in terms of housing values and mortgage debt outstanding have been largely driven by tight lending conditions and steadily increasing home prices. Rising home prices, in particular, have boosted household balance sheets in recent years.

To account for inflation in the quarterly series and measure changes in real values, it is also useful to examine owner’s equity in real estate as a percentage of the value of household real estate. The higher the ratio, the more favorable is the financial position of U.S. households with real estate. The current reading of 53.9% is a slight improvement over the prior quarter. The

ratio has steadily improved from the 36.7% reading in the first quarter of 2009 during the depths of the Great Recession.

This type of improvement in the balance sheet of U.S. households with real estate generally corresponds with the ongoing recovery in housing. It is likely that tight lending conditions have led to pent-up housing demand, which could release with further improvement to the economy.

Home Equity Grows During the Third Quarter

Cash In on SavingsMember rebates add up! In 2014, six members claimed a combined $6,860 in rebates. That averages to $1,143 each! Participation is easy and HBA Member Rebate Program is hosting a 15 minute webinar on how to participate on Feb. 10 at 2:30 p.m. Visit HBARebates.com for additional information.


Webinar WednesdaysThe BMHBA is hosting multiple NAHB webinars at their

office. Please register online if you plan to attend.

Significant Changes to the 2015 International Codes | Wednesday, Feb. 25, 1-2 p.m.

New homes are required by law to comply with state and local building codes and the standards referenced in those codes. Most jurisdictions that enforce a building code have adopted one or more of the family of International Codes (I-Codes) developed by the International Code Council (ICC). This webinar highlights significant changes to the 2015 editions of the I-Codes, particularly the International Residential Code (IRC) and International Building Code (IBC).

Presented by NAHB Construction, Codes and Standards

What's 'Appening: Tech Tips and Tricks for Busy Building Professionals on the Go | Wednesday, March 4, 1-2 p.m.

In today’s world of buzzing, beeping, texting and tweeting, your smartphone or tablet is the ultimate power tool! In this seminar, you will learn how to

leverage your pocket-sized computer to its full potential. Learn how to become more efficient and organized with mundane tasks. Discover how a smartphone or tablet can deliver highly personalized, high-touch, follow-up messages to prospects. Worried you are addicted to your smartphone? Learn how to use it to be more connected and less distracted, resulting in more productive work time and more fulfilling personal time.

Presented by NAHB Professional Women in Building and NAHB Business Management

The Social Society: The Nuts and Bolts of Getting Started in Social Media | Wednesday, March 25, 1-2 p.m.

Social media is everywhere, it's the new Yellow Pages. If you aren't into it, and you want to be, this interactive course will walk you through the basics of setting up a Facebook business page, a Houzz account and a Twitter account. We will also discuss what to post, when to post and other useful tips to navigate the social media world.

Presented by NAHB Building Systems Councils

The North Dakota Association of Builders brought an energy code seminar to our HBA in early January. More than 40 members at-tended the event to learn about the Energy Code, its requirements and impacts on home construction.

Earl Torgerson presented on the topic, which is gaining interest as our community begins to require compliance with the code. Copies of the PowerPoint are available by contacting the BMHBA at 222-2400 or email-ing [email protected].

Energy Code Seminar Attracts Crowd

Did you know? Housing starts (single-family and

multifamily) topped one million units for the first time since 2007! Single-family construction experienced a particularly strong month with an increase of 7.2% over November, to an annual pace of 728,000 units. EyeOnHousing.org provides members with more information on this analysis as well as many other economic and housing-related topics.


The State of North Dakota, through the North Dakota Department of Commerce, is developing a five-year plan to guide policy, actions, and investment for hous-ing, economic development, infrastructure, and com-munity and public facilities over the next several years.

Known as the “Consolidated Plan for Housing and Community Development,” the plan is required by the U.S. Department of Housing and Urban Develop-ment and serves to address unmet needs and deter-mine funding allocations for housing and community development activities in the state. As such, the plan depends, in part, on the experiences and opinions of people who are knowledgeable about housing and

community development as well as those who wish to share their opinions about these needs throughout North Dakota.

Your survey responses will remain anonymous and should take less than 10 minutes to complete. Complete the survey online at www.research.net/s/2014NorthDakotaHCDSurvey.

Housing and Community Development Survey

The pace of sales of newly built, single-family homes increased 11.6% in December to a seasonally adjusted annual rate of 481,000 homes, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest monthly sales rate since June of 2008.

After a slow start to the year, new home sales for 2014 totaled 435,000, a slight increase over 2013.

The inventory of new homes for sale rose to 219,000 in December, a 5.5-months’ supply at the current sales pace.

For December, completed, ready-to-occupy single-family homes for sale came in at 61,000. 118,000 homes in inventory were under construction and 39,000 had not yet begun construction. Inventory has been rising with home builder confidence as production increases to meet

rising demand. NAHB is expecting growth in single-family construction to continue in 2015.

Regionally, new home sales rose 53.6% in the Northeast, 17.7% in the South and 3.1% in the West. Sales dropped 11.5% in the Midwest.

New Home Sales on Highest Pace Since June 2008

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february 2015 building buzz

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