Historic Change - Home Builders Association of Michigan
Transcription
Historic Change - Home Builders Association of Michigan
Historic Change Sweeps Through the State Capitol From tax relief on your inventory homes to a flexible building code adoption process…how last year’s policy changes will impact you. TABLE CONTENTS Tankless With an AIAified Course. VOLUME 21 • NUMBER 1 • JANUARY/FEBRUARY 2013 DEPARTMENTS OF The U.S. Department of Energy estimates that approximately 20 percent of a home’s energy costs are spent heating hot water. FEATURES What Has HBAM Done for You Lately? 8 2012 accomplishments that will impact your bottom 4President’s Message 15 Member Benefits line going forward. Builder Profile 10 Spotlight on Randy Koetje and Koetje Builders in Jenison, Michigan. Forecast 2013 12 Pent-up housing demand set to break through in the coming months. ergy costs are going? Just turn the ers don’t qualify for the federal Energy Star pane tankless water heaters do. Not only can l, they can also slash a home’s carbon footprint. BUILDER PROFILE • PAGE 10 CEU credits: Take our AIA- and NAHB-certified t buildwithpropane.com/training. PAGE 8 Sen. Arlen Meekhof was a key sponsor of crucial dune legislation passed in 2012. On the Cover: From left to right; Rep. Joe Haveman, Senate Majority Leader Randy Richardville, Rep. Margret O’Brien and Rep. Jon Bumstead. This Issue of Michigan Builder is brought to you by the underwriting support of the Michigan Propane Gas Association (MPGA). The MPGA is a key partner of the HBA of Michigan and its efforts to promote education and professionalism in the building industry. Go to buildwithpropane. com/training to learn more. PRESIDENT’S MESSAGE HBA OF MICHIGAN 6427 Centurion, Suite 150B Lansing, MI 48917 Phone: (517) 322-0224 Fax: (517) 322-0504 www.buildingmichigan.org SENIOR OFFICERS Clyde Alcox – President (517) 321-8200 Rich Kogelschatz, CGB, CAPS – First Vice President (616) 863-9313 Bill Benedetto – Treasurer (517) 784-3654 Chuck Thompson – Secretary (810) 672-8022 Tony Bosco, CAPS, CGP, CGA – Associate Senior Officer (989) 751-0090 Colin Herren – Immediate Past President (989) 772-2202 HBA OF MICHIGAN STAFF Diana Dixon Special Projects Director [email protected] Dawn Crandall Political Affairs Director [email protected] Pam Frankenberger, CMP, CMS, CTA Director Affiliated Enterprises [email protected] Lee Schwartz Executive Vice President for Government Relations [email protected] Greg McClelland HBA of Michigan Legal Counsel [email protected] Robert L. Filka Chief Executive Officer • [email protected] 2012 Will be Difficult Year to Top: HBA Michigan Scores Numerous Policy Victories Dear Readers s the incoming President of the HBA of Michigan, I am humbled and honored to step into a position that so many great leaders in our industry have served over the years. Their leadership has enabled our state association to withstand tremendous financial stress. At the same time, they’ve taken the initiative on state policies that will strengthen our industry for years to come. I can only hope to modestly follow in their footsteps as we look ahead to 2013 for additional ways to strengthen and protect our building community across the state. The prime focus of this issue focuses on the changes in State policy that your association has helped usher in this past year. It was a home run year by any measure. Capped off at year-end with the passage of tax relief on inventory homes and changes to our code development process, more than a dozen efforts ushered through in 2012 will impact each and every member of our association’s bottom line in a positive way. While not directly involved in its passage, your state association was also there on watch as historic Right-to-Work legislation was passed and sent to the Governor. This new law includes exemptions for fire and police employees and almost included and exemption for construction workers as well—but your state association quickly discouraged this effort and it was excluded from the final legislation sent to the Governor. This past year also ushered in the changing of our association name (for the first time in more than 60 years) along with a new logo that the vast majority of local HBAs are quickly adopting so that the HBA brand builds everywhere across our great state. While there is much for HBA Michigan to celebrate about the year past, significant challenges still face us in 2013. The reach of federal regulators is widening and we will have to be on alert as the EPA and other agencies seek to influence the expansion of our building rules. And local HBAs across the state continue to struggle with membership and financial survival, so it’s certainly NOT time to sit back and spend too much time hooting and hollering about the victories we have brought forth. But holler we will in this issue of Michigan Builder. I wish you the best in the New Year that is upon is. If there is ever anything you need help on or believe HBA Michigan should be aware of, pick up the phone and give me or others here at the association a shout. All of our contact information is in the front section of this magazine. Happy New Year! Sincerely, Clyde Alcox, President HBA Michigan l A PRINTCOMM STAFF Publisher — Kevin Naughton Managing Editor — Nancy Davis Graphic Designer — Jason Gabel Advertising Sales Manager — Brenda Poe Advertising Sales (800) 935-1592 ext. 106 Advertising Sales Representative Marsha Suwienski Published by: 2929 Davison Rd., Flint, MI 48506 (810) 239-5763 4 MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 Interested in Advertising in Michigan Builder? Call Marsha Suwienski at 800.935.1592, ext.106. G & K Insulation MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 5 T Propane Retailers Bring Gas Energy to Builders in Rural Michigan he 100 member companies of the Michigan Propane Gas Association (MPGA) are bringing gas energy to residential and commercial builders in every county of Michigan through over 450 retail supply terminals in the State. Just like your building businesses, these propane companies are locally operated by small business owners and managers who are much like you. The propane industry is regulated by a variety of state and federal agencies and all employees in the propane industry are required to receive State approved training and certification in their specific fields of work through the nationally recognized Certified Employee Training Program (CETP). Safely installed propane systems, and safety in the delivery and use of propane, are the top priorities for the propane industry. Propane gas is a domestic energy, with all of the propane consumed in the U.S. coming from sources in North America. In fact, the U.S. is a net exporter of propane because of its abundant supply. Michigan is unique in its capacity to store large supplies of propane underground in salt caverns in several locations in the State. Propane moves from those supply caverns and other sources to propane retailer locations through a network of pipeline, rail, and truck supply routes. Propane is delivered to consumer locations in smaller tank trucks commonly referred to as bobtails because of their stubby appearance. Propane retailers encourage builders to use propane as the primary energy source on their projects when natural gas is not available or the infrastructure cost of extending natural gas pipelines is too high for project budgets. Michigan is the leading State in the nation in the consumption of propane for residential use, and much of that propane comes from gas production right here in Michigan. Over 339,000 Michigan households, about 9% of the total, use propane as the primary energy source in their homes. The operating characteristics of propane gas are very similar to 6 MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 natural gas, so consumers enjoy the efficiency, comfort, and environmental friendliness of gas energy no matter which type of gas they are using. Builders can find extensive information on building with propane by going to www.buildwithpropane.com. One of the more popular parts of the website is the Propane Training Academy where you can find over 20 free online training courses that are NAHB, NARI, USGBC, and AIA certified for continuing education training. The Michigan Propane Gas Association also offers these courses for builders in free face-to-face training classes that can be hosted by your local HBA. Michigan builders can choose from above ground or underground propane tanks in a variety of sizes depending on the size of the project and gas load. All of the propane system installation details are handled by your local propane retailer. Many builders, including those in urban areas, use propane for temporary construction heat even when natural gas may be the primary energy source after construction is completed. Builders like the ability to call and talk to a live person and get responsive propane service that fits their build schedules. Propane is highly portable on the construction site and can be placed exactly when and where you need it. If you are interested in the advantages that propane can offer for your next building project, contact your local propane retailer. If you aren’t familiar with any in your area, go to the MPGA website, www.usemichiganpropane.com and look for the “Find a Retailer” tool to locate a propane retailer near you. Written by Tom Jaenicke, Energy Advisor for the Michigan Propane Gas Association. Tom provides marketing services, technical advice, and continuing education solutions to construction and propane professionals on behalf of the Association. He can be reached at 810 252-7855 or [email protected]. l 616.647.5538 premiergranitetops.com MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 7 The 2012 HBA Accomplishments That Will Impact Your Bottom Line T here’s no getting around the fact that for the eight years from 2003 to 2010 most of what the Home Builders Association of Michigan did for you in the legislative and regulatory areas was to stop bad things from happening. We stopped sales tax on services. We stopped expansion of arc-fault circuit interrupters requirements and requiring sprinklers in all new homes. We stopped a requirement to have porta-potties on all residential construction sites including remodeling no matter how short of a job it was. We stopped … we stopped … we stopped. The political dynamics in Lansing changed at the beginning of 2011 and with that change came the prospect of doing more than just stopping bad things from happening. Your association had the chance to make good things happen and we took full advantage of our opportunities in ways both large and small. Inventory Tax Repeal Reforming the Inventory Tax on new homes has been a goal of your association for over 20 years. We’ve come close on several occasions by passing a bill in one chamber of the Legislature only to see it die in the second. This year House Bill 4134, introduced by State Representative Margaret O’Brien (R-Portage), is now Public Act 494 of 2012. PA 494 removes the 18-mill school tax on new residential construction on development property for three years or until the new construction was no longer located on development property, whichever occurred first. The exemption would apply for taxes levied after November 1, 2012. That’s a property tax reduction of $1,800, or 20 times the $90 annual dues you pay to the state association, for every $100,000 in taxable value of a home you build. Flex Code House Bill 4561, the Flexible Code cycle bill, introduced by State Representative Joe Haveman (R-Holland), is now Public Act 504 of 2012. Commencing with the 2015 national code change cycle the residential code will shift to the flexible code cycle found in the bill. The process of updating the 2009 Residential Code, including the residential energy efficiency requirements found in Chapter 11 of the residential code, by adding, amending or rescinding rules will begin within 90 days of the effective date of the act. This is the same process the state has used in for previous code updates. Updates to the commercial codes began last year. This bill also prevents the adoption of any new or existing code, including the International Green Construction Code, which is not already listed in the law. In order to be promulgated and enforced, the Legislature must first pass a bill and the Governor must sign that bill adding the code to the list found in the Single State Construction Code Act. Critical Dune Act Reform Senate Bill 1130, introduced by State Senator Arlan Meekhof (R-Olive Township) now Public Act 297 of 2012 and House Bill 5647, introduced by State Representative Jon Bumstead, (R-Newago) contained some of the most significant changes in Michigan environmental law in the past 25 years. After seven years of hard work and 8 MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 negotiations by your association the law now balances environmental protection of the dunes with property rights of those owning land in the critical dunes and allows for compatible economic development and multiple human uses of the dune. The law now allows for building on lots lakeward of the crest of the dune provided they were legally in existence on or before July 5, 1989, potentially freeing up millions of dollars in new development in these areas. For the first time ever, regulators will be required to show projects meeting the permitting standards will “significantly and unreasonably” deplete or degrade the diversity, function or quality of all of the critical dunes within the local unit of government in order to deny a permit. The proof needed must be based sufficient data and facts. Those data and facts must be based on reliable scientific principles and methods that have been correctly applied and are found in the permit file. In short your permit to build in a critical dune area can no longer be denied simply because a regulator feels your project is too, big, isn’t needed, should be located elsewhere and isn’t in the public interest. You also have the right to build one driveway to your home or other permanent building. Fall Protection Rules Originally, the new federal fall protection standards were to have gone into effect in Michigan on March 11, 2011. Your association was successful in getting the Michigan Occupational Safety and Health Administration (MIOSHA) to agree to a number of postponements in the enforcement of these rules which are now scheduled to go into effect on March 15, 2013. During the interim, the Home Builders Association of Michigan and the Greater Lansing Home Builders Association worked cooperatively with the department on a “Residential Fall Protection Initiative” to help employers protect their workers and comply with the new requirements for fall protection and to establish alternative means of complying with the federal rules. Thirty individual seminars were held around the state in the spring and summer of 2011. In mid-2012 a “Residential Fall Protection Solutions” forum was held in Lansing to present the practical solutions the members of the initiative had arrived at. Further information on these solutions may be found at www.michigan.gov/MIOSHA. Log Home Energy Code Public Act 264 of 2012, which was sponsored by State Senator Mike Green (R-Mayville), allows for traditional log homes to be built in Michigan and still comply with energy code requirements. Beach Lifts Public Act 40 of 2011 which was sponsored by State Senator John Proos (R-St. Joseph), now allows beach lifts (“incline elevators”) for the intermittent use of members of a homeowners group composed of not more than 20 residential dwellings to be constructed under the same standards that apply to private residential versions, rather than the more rigorous ones for commercial ones. Ergonomics Public Act 10 of 2012 which was sponsored by State Senator Rick Jones (R-Grand Ledge) the Michigan Occupational Safety and Health Administration (MIOSHA) or other state agencies from imposing rules and regulations regarding workplace “ergonomics.” Privatization of Building Departments Public Act 103, sponsored by State Representative Mark Ouimet (R-Scio Township) was supported by your association This law now provides clarity on the functions private organizations can legally perform for building departments and who is legally considered a building official. Governmental subdivisions are authorized to contract with private organizations for specific administrative and enforcement activities, including inspections and plan reviews. The police power remains with the governmental subdivisions and private organizations are not allowed to issue orders, notices, certificates, or permits, but could process and deliver the documents after their approval by the building official. All contracts with private organizations must contain a conflict of interest clause. Stopping For Profit Building Departments On four occasions your association prevented Genoa from breaking away from the Livingston County Building Department to form their own “for profit” building department. State law prohibits permit fees from being higher than needed to run the department. It also prevents those fees for being used for anything other than running the department. The Home Builders Association of Michigan is currently in the Court of Appeals challenging an arrangement that puts 25% of all permit fees into the local unit of government’s general fund. Federal Motor Carrier Standards Public Act 231 of 2012, sponsored by State Representative Greg McMaster (R-Kewadin) ended, with the exception of cellphone regulations, ended the enforcement of the federal motor carrier (truck) safety law that was duplicated in the state motor carrier act. These federal requirements no longer apply to trucks less than 26,001 pounds that are operated entirely within the state. Project Labor Agreements The law now prohibits project labor agreements in state, school and local public construction, road projects, or as a condition of selective tax breaks granted for private projects. . Project labor agreements require non-union contractors bidding on a government project to pay employee union dues and contribute to union pension and health insurance benefit funds, even though their employees are not union members. This is currently being challenged in federal court. Repeal of the Single Business Tax This ended the double taxation of more than 95,000 small businesses. Creation of the Corporate Income Tax This established a 4.35% business tax, paid through the income tax, for companies organized as S-Corps, LLC’s, LLP’s etc., while C Corps pay a straight 6% corporate income tax. Workers Compensation Reform The law revises the formula by which compensation levels are set, requires workers still able to work to make a “good faith effort” to find work, and bases an injured worker’s compensation on “reasonably available” job pay levels. Unemployment Compensation Reform The law now requires a “Special Fraud Control Fund” for the prevention, discovery, and collection of unemployment benefit overpayments; require amounts in the Fund to be used first to acquire software with a proven record of detecting and collecting benefit overpayments, and then for the administrative costs; allows the Unemployment Insurance Agency (UIA) to collect interest on benefit overpayments, and require the interest to be deposited into the Fund; subjects a person to administrative fines, in addition to current penalties, for certain knowing violations related to unemployment benefits; double the amount of damages the UIA may obtain for a person’s second or subsequent knowing violations; requires amounts recovered for knowing violations to be applied to administrative sanctions, damages, and interest and credited to the proposed Fund. It also allows the state to “bond out” the $3.2 billion owed to the federal government for unemployment benefits paid to residents over the past several years (which would have to be paid back by all employers) and authorizes a state unemployment “obligation assessment” imposed on all employers to pay off the bonded debt. This prevented the imposition of further federal penalties and a reduction in FUTA tax credits on Michigan’s employers. Regulatory Rules Reform The law now requires periodic review of all rules to see whether they are still needed; limits the power of a department to delay a required permit by claiming the application is not “administratively complete”; expands the proposed regulations the legislature’s Joint Committee on Administrative Rules (JCAR) can consider to include any that it considers appropriate including existing rules; requires state agencies to consider exempting small businesses from a proposed rule, or find ways to reduce the impact on them; prohibits a state department from enforcing an agency “guideline,” “bulletin,” or “interpretive statement” that was not an officially promulgated document; preventing rules exceeding the authority of a department to write rules from being enforced and giving the “Office of Regulatory Reinvention” the authority to reject any proposed new state agency request for regulatory rule-making; requires a formal “decision record” in requests departments must submit to ORR for rulemaking authority and requires ORR to state when granting permission that there are “appropriate and necessary policy and legal bases for approving the request for rule-making.” Revised Statute of Limitations Law The law now contains a two-year statute of limitations on lawsuits for property damage or personal injury against architects and professional engineers, and a three-year statute of limitations on lawsuits against contractors. Banning Capital Recovery Fees The law now prohibits a residential real estate developer from imposing a “capital recovery fee” on homeowners through contract of covenant, defined as a provision that requires any subsequent seller to pay a fee to the developer. Homestead Exemption Filing Date The law now sets the deadline for applying for a homestead property tax exemption on a new home from May 1 to June 1 for the next summer tax levy, or November 1 for the next winter tax levy (plus all subsequent tax bills). Prior to passage of this bill, if an owner had not filed the principal residence (homestead) property tax exemption by May 1, then the exemption did not apply until the following year. l MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 9 BUILDER PROFILE Koetje Builders Put Integrity First by Nancy Davis oetje Builders Inc. was established in 1965 in the Grand Rapids area, is owned by brother-sister team Randy and Julie Boetsma. The firm’s primarily focus is designing and building custom homes of all price ranges and styles, with expertise in creative layouts for special lot features or constraints. They also provide land developing and multifamily construction and management services. K Top of Form As a second-generation builder, Randy Koetje literally grew up in the business earning his first paycheck at just six years old. I moved boxes of hardware and doorknobs into the basement when my dad moved the business into a new office. I helped with clean up at jobsites and did yard work at rental properties until I was about 15, then I spent summers and days off school helping out on the framing crew. His father, Ivan Koetje, allowed Randy to enter the industry at a young age, but always gave him the option to pursue whatever he wanted in life. His dad taught him how to work hard and think ahead, and not take advantage of his position as the boss’s kid. “He had the same expectations of us as he would for anyone else he hired,” he said. He graduated from Unity Christian High School and benefitted from the school’s strong shop and mechanical drawing departments. He said his best training came on the job, learning from other professionals who were generous enough to share their knowledge. “I learned 10 MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 how to frame houses and was taught how to draw with AutoCAD software without getting any formal training. Having foremen on the job who taught me how to oversee the process and let me learn how to advance my skills was a real bonus,” said Koetje. Along the way, Koetje Builders have always put a priority on taking the best possible care of customers throughout the building process. “Making your mistakes or misunderstandings right is really key. I also think working hard at what you do best and not straying too far from your normal practices is very beneficial. Being conservative with investments and not trying to grow too large too fast also helps,” said Koetje. Overcoming Challenges “Surviving the last five years was a big challenge. Maintaining a positive attitude through the economic downturn was tough. It is so much better to go to work and have a full day’s work ahead of you instead of finding something to keep you busy until it is time to go home,” he said. Ongoing challenges include meeting the expectations of an increasingly savvy and demanding group of potential consumers. “The recession is still affecting the new home market a fair amount and there is still a perceived gap between the value of buying used and building a new house. Also, I think buyer expectation is a big challenge to the industry today. With the media and internet photo sharing sites, a lot of buyers set their expectations higher than their budget. It is hard to incorporate the features of a $500,000 house when you are trying to design and build a $175,000 house,” he said. The cost of construction and all the new requirements for new construction can be a bit concerning as well. Koetje urges local associations to work closely with the municipalities as new requirements come into play to help keep the cost down while making homes safer with less environmental impact. To set themselves apart, Koetje Builders focus on impeccable finishes on all price ranges. “We really try to build high quality custom homes no matter what finishes the project budget allows. I put the same level of design thought into the 1,110 square foot bi-level as what I do the 3,500 square foot 2 story. Granted you do not have room in the smaller home to burn up on all the cool features, but it is the little things that matter,” he said. The company’s long-term relationships with its subcontractors and suppliers, some of them whom have worked with Koetje since 1965, sets them apart as well. “We respect each other and the subcontractors know that as long as they hold prices in line with industry standards and continue to do what they do best they aren’t going to lose the next job to the cheapest person we can find,” said Koetje. Koetje said they also pass on any overages from allowances and selections to customers at the invoiced cost without any mark up. This way, he said, there is no remorse from the customer that they were pushed to spend extra. “When the job is nearing completion and everyone involved is ready to be done and the owner is ready to move in the owner usually ends up feeling a little remorseful about upgrading things during the process and hates to pay that extra bill. If you use an accurate number up front there will be less extras and as a builder there is not a need to try and find other ways to increase your profit. We know what our construction management costs will be well before we give the homeowner a final price and include that right in the bid.” Start to finish, Koetje finds satisfaction in the whole gamut of home building. “I really like the design phase and the construction management. I like turning our customers’ ideas into their dream homes. Having a happy customer on the last day is fun, too,” he said. A recently appointed board member at the Home Building Association of Greater Grand Rapids, Koetje has served as a committee member previously. “The association’s voice in government decisions is huge. It keeps costs down for the end-user and helps builders be able to maintain an efficient process. If you are going to be an association member and receive all the benefits, I feel you need to be willing to serve on a committee or board occasionally as well. Everyone’s viewpoint and thoughts are valuable even if you think serving in these positions is not your strong point,” he said. Koetje gives back to his community by working with the youth at his church overseeing home repair or construction service projects. “It allows the youth to discover the construction trades while helping others and while building relationships with Christian adults. I also have participated in a few multigenerational trips with the church, which are kind of like going back to the days of being a carpenter for a week instead of a manager -- all while helping out someone with a need. He credits his wife Katie with keeping things running on the home front and caring for their son David so that Koetje can focus his time on the family business during the week. l vIsIt Our Marquette LOcatIOn: 908 W. Baraga avenue Marquette, MI 49855 (906) 226-9665 (888) 266-0899 Fax (906) 226-9887 At Norandex Building Materials Distribution we realize that in order to succeed we must be successful in helping our customers grow their business. That’s why our distribution centers are fully stocked with top quality, top-of-the-line building products—siding, windows, roofing, doors and more. Complementing this selection is a sales and customer service staff that’s knowledgeable and truly cares about your business. And, we back you up with programs and warranties that are among the best in the building products industry. Stop by your local Norandex branch and put our strengths to work for you. www.norandex.com MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 11 Home Builders Association of Michigan Forecasts Strong Increase for Home Construction in 2013 T he Home Builders Association of Michigan (HBA Michigan) is forecasting that single-family home construction in 2013 will increase by 39 percent over 2012 levels. HBA Michigan attributes the positive forecast to a stronger Michigan economy and state legislation aimed at stimulating the housing industry. “With record low new home production for the past several years, pent up demand is finally beginning to burst through in the marketplace,” noted Robert Filka, CEO of HBA Michigan. “When combined with positive tax and regulatory changes that will encourage more investment, our outlook is more optimistic than it’s been in nearly a decade.” The number of single-family home permits recorded year-to-date in Michigan was up 36 percent through the end of October 2012. Those are the latest numbers available from the US Census Bureau. Current projections are for some 10,000 single-family home permits to be issued in Michigan for all of 2012. Looking ahead at single-family home permits in 2013 – and assuming a reasonable solution to the looming US “fiscal cliff” negotiations – HBA Michigan forecasts 13,928 permits to be issued in the coming year. In addition to stronger economic factors, Filka said the housing industry will be assisted next year by a new law adopted by the state legislature and soon to be signed by Governor Rick Snyder which reduces the tax on new inventory homes that are constructed by homebuilders. “Reducing this punitive tax on inventory homes will lower risk and encourage homebuilders to construct more homes in the future,” said Filka. “Building inventory homes is a critical marketing tool that has proven successful in generating new home sales. Thanks to the foresight of the legislature and the Governor, homebuilders will now be able to invest more in our communities around the state.” l Residential & Commercial New Construction/Remodeling Service Upgrades Repairs • Generator Installation Hot Tub & Pool Wiring • Storm Damage FREE ESTIMATES 6606 Roger Drive.....................616-669-9718 12 MICHIGAN BUILDER • JANUARY/FEBRUARY 2013 Interested in Advertising in Michigan Builder? 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