February 25, 2017

Just the Tip of the Iceberg

Much of the mass of an iceberg is hidden under the surface of the ocean. You can't see it but trust me, it's there. The National Association of Home Builders (NAHB) is like an iceberg to a vast majority of our members across the country. They see the tip (think logo and the occasional mentions at general membership meetings) but not the mass. What is the mass that I am speaking about? Educational programs, courses and certifications. Knowledgeable staff that can help with codes, land use and planning and navigating the AD&C lending waters, all as examples but very good examples. 

The bulk of the mass, and in my opinion the most important part of the mass, is the working done by engaged NAHB volunteer leaders and our NAHB advocacy team, which includes staff from government affairs, legal affairs, housing finance, regulatory affairs and communications is constantly working on behalf of members on a wide range of issues. These include environmental regulations, the tax code, federal housing programs, building programs, OSHA and housing finance, just to name a few. 

Take a good look at NAHB and, from time to time, look below the surface! You'd be pleasantly surprised and impressed.

Below is an update on several recent critical issues:

Working with the Trump administration and new Congress, along with officials at the state and local level, NAHB will redouble its efforts in 2017 to make policymakers understand that their actions have real consequences and that they must act decisively to reduce burdensome regulations that increase the cost of housing.
In January, the House approved three major regulatory reform bills that NAHB designated as “key votes” due to their importance the housing industry:

  • The REINS Act would require Congress to approve all federal regulations that have an annual impact of $100 million or more.
  • The Regulatory Accountability Act would modernize the rulemaking process under the Administrative Procedures Act and make the regulatory process more transparent, agencies more accountable and regulations more cost-effective.
  • The Midnight Rules Relief Act would allow Congress to examine under the Congressional Review Act multiple regulations pushed through by an outgoing administration.
NAHB will push for their approval in the Senate. However, the association faces an uphill battle given the 60-vote filibuster threshold needed to advance legislation in the upper chamber.
NAHB joined other groups in filing a legal challenge to the Department of Labor's final overtime rule that would have doubled the minimum salary limit from $23,660 to $47,476 as of Dec. 1. A federal judge on Nov. 22 granted a preliminary injunction to delay the rule from taking effect until a final court decision is made. Nearly 100,000 additional construction supervisors would have been eligible for overtime had the rule gone into effect.
NAHB scored a major legal victory when a federal district court on Nov. 16 granted the association and other groups a permanent stay on the Department of Labor's final “persuader” rule. The court’s ruling essentially put an end to union efforts to prevent employers from talking to their lawyers in response to union organizing.

A health care package approved by the 114th Congress on Dec. 7 and signed into law by President Obama on Dec. 13 includes a provision to allow employers to provide Health Reimbursement Arrangements (HRAs) to help their employees pay for health insurance. NAHB has been spearheading efforts to reinstate the use of HRAs since the IRS issued guidance prohibiting their use and instituting onerous financial penalties for those who failed to comply. The bipartisan 21st Century Cures Act is an important step forward to allow small business owners to help their workers with rising health care costs and to ensure more Americans receive affordable health coverage. At the same time, it will protect employers against outrageous fines for providing this cost-sharing option to their workers.

The Environmental Protection Agency (EPA) in January finalized its revised MS4 rules governing stormwater treatment in cities under 100,000 in population. A key issue was what minimum controls cities must place on new development and redevelopment, to meet Clean Water Act targets. EPA faced heavy lobbying by environmental groups that wanted a more restrictive rule.
NAHB worked closely with the EPA to make sure the agency did not use this court-mandated rulemaking as an opportunity to impose more restrictive federal mandates on cities and towns. Instead, NAHB convinced EPA to remove problematic language that would have forced states to adopt blanket numeric limits.
This result is not only a victory for home builders, but a win-win for cash-strapped cities facing multiple federal mandates. NAHB’s efforts will provide flexibility for these communities to choose best-cost clean water solutions that work with development, rather than against it.

Sens. Deb Fischer (R-Neb.) and Joni Ernst (R-Iowa) on Jan. 12 introduced a resolution to withdraw the “waters of the U.S. (WOTUS) rule,” which contains new and expanded definitions that NAHB has long held as the poster child of federal intrusion into states’ rights and an example of federal overreach on land-use decisions.
On the legal front, NAHB helped lead a coalition of industry partners to challenge the rule, and the 6th Circuit Court of Appeals issued a nationwide injunction against the rule in October 2015. On Jan. 13, the Supreme Court agreed to resolve a jurisdictional dispute over whether the case should be challenged in district court or in a court of appeals. NAHB is seeking clear guidance from the Supreme Court so that businesses like NAHB aren’t forced to file two lawsuits to protect our interests.
Meanwhile, the Trump administration has indicated that it would like to reevaluate the rule, so while NAHB is still litigating, we are also working to have the administration reconsider the WOTUS rule.
The resurgence of residential development is prompting local government to seek new exactions and increase existing exactions for new infrastructure. In response, NAHB updated its Impact Fee Handbook for the first time since 2008.
Local government officials are often unaware that there are better alternatives to impact fees for financing infrastructure. Methods like special district financing are more reliable, efficient and equitable than impact fees. To facilitate their use, NAHB has developed extensive resources on alternatives.
The updated Impact Fee Handbook covers common errors in calculations and planning assumptions, as well as overreach in use – such as when communities try to use fees to fix existing infrastructure, which is illegal.
The handbook is available free online at nahb.org/ImpactFeeBook.
Fire sprinkler mandates will stay in the International Residential Code, but builders and developers will see other construction cost savings after more than 162,000 votes were cast for 577 proposals on the ballot for the International Code Council’s 2016 Online Governmental Consensus Vote, which ended Nov. 27.
After weeks of phone calls and personal visits, NAHB members were successful in pushing the results to reflect the point of view of the code official, rather than that of the product manufacturer. The votes affected the International Building Code, the International Residential Code, the International Energy Conservation Code, and the International Fire Code.
While the voting results were generally positive, only a fraction of eligible voters actually cast votes. Going forward, NAHB must continue to refine its process for reaching out to voting members, explaining our positions, and urging them to vote in our factor.
A summary of outcomes of votes on issues of greatest concern to NAHB can be found here.
Effective Jan. 1, 2017, the loan limits for mortgages that can be purchased by Fannie Mae and Freddie Mac, insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, have increased for the first time since 2006.
For loans purchased by Fannie Mae and Freddie Mac, the base loan limit for one-unit properties will rise to $424,100. Loan limits in high-cost areas will increase to a ceiling of $636,150.
Consistent with the increase in the conforming loan limits, FHA loan limits will also increase. The FHA floor will increase to $275,665. The FHA high-coast ceiling will increase to $636,150.
VA’s loan limits are indexed to the Freddie Mac loan limits, so they will also increase in 2017.

submitted by Michael Kurpiel, CGA, CGP

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