The Voice of Housing

The HBA helps local, state, and federal officials understand the importance of a strong housing industry to successful economic development. Legislative victories like Missouri’s “Right to Repair” law have helped create a better business environment for HBA members. HBA efforts successfully steer policy decision makers in a more builder-friendly direction.

Sunday, November 29, 2009

2010 Promises To Be A Busy Year for Industry Advocacy

At the HBA's recent Government Affairs meeting, Chair Matt Bailey and President Rusty MacLachlan discussed their recent meeting with the Division of Workers' Compensation and outlined potential next steps including updating additional members of our legislative delegation regarding this issue and possibly planning a follow up meeting with the Division when our group is in Jefferson City for the 2010 Legislative Day.

Legislative Day plans were also discussed by the committee. Builder/Remodeler members will be invited to attend the event at no cost, traveling up to the Capitol by bus and visiting with our area's elected officials about important issues affecting the industry, as well as meeting with key legislative leaders and committee chairs. The date for this event should be announced in the near future and sponsorship opportunities will be available to HBA members.

Some of the issues potentially affecting the industry next year include a push from some groups to pass a statewide energy code for residential building. The Missouri Association of REALTORS® is leading an effort to place a state constitutional amendment on the November 2010 ballot. The amendment would bar imposition of any new tax, including a sales tax, on the sale or transfer of homes or any other real estate. Each year there are always a number of proposals during the legislative session to impose such double taxation on real estate. For more information about this initiative, visit www.YesToSaveHomes.com.


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Sunday, November 22, 2009

City of Springfield Will Also Delay Adoption of 2009 IRC

The HBA's I&E Committee conducted 4th quarter meetings with both Greene County and the City of Springfield building officials to discuss issues affecting our industry.

The City of Springfield announced its intention to stay in sync with the County and other surrounding jurisdictions by delaying adoption of the '09 IRC for the time-being. This consideration helps strengthen the industry locally and ease pressure on future homebuyers at a time when other factors continue to create multiple challenges for residential construction and the housing market at large.

In September the County informed us of its intention to delay adoption of the '09 International Residential Code and the '08 NEC, because of the additional cost involved for both the county and potential homeowners. This was greatly appreciated as the HBA Codes Committee's initial analysis indicated that at least 40+ new provisions in the IRC/NEC could potentially add anywhere from a few hundred dollars to more than $20,000 to the cost of building of new home here, depending upon a number of variables.

Additional news from the County included a report that the Land Use Plan was passed by the planning board and the commission. At the commission meeting, there were some dissenting voices regarding exclusion of the ag reserve zoning but because the prior public involvement/input process had been exhaustive, the commission moved forward to approve. The HBA and the GSBOR were both active participants in that initial input process through a task force facilitate by the Springfield Chamber. County staff reported that in 2-3 years, the informal process of public input and review will begin again as the plan calls for review in 5 year increments. They have asked MU Extension Service to help facilitate that discussion in the future and plan to invite task force members again for input, as well as other group representatives who express an interest.

For Greene County, Single Family permits are at 247 to date – that is not far below the YTD # this time last year which was 271; 2008 total was 291. The county discussed plans to begin permitting decks without a roof which are 30" or higher (which can include handicapped ramps and similar structures which achieve same height.) This is contiguous with the city’s practice to issue permits for this type of deck. The county will charge a flat fee of $25 for these permits. There will probably two inspections required – footings and final. The county also indicated that they are not planning to raise existing fees for next year.

In City news, staff updated the HBA regarding changes to a zoning ordinance, approved by City Council, related to accessory structures such as garages and coach houses. The current zoning ordinance limits the height of accessory structures to 16 feet, unless an exception is made, and this approved amendment loosens some of the criteria for an exception. For example, a lot used to have to be a half-acre for a height exception to be made but now a secondary structure higher than 16 feet can be built on a lot smaller than that as long as its height and style are consistent with the primary building and it fits in with the character of the neighborhood. This should offer some additional flexibility for those seeking to make property improvements by building an accessory structure adjacent to their home.

If you would like a copy of the modified ordinance, email Jennifer by clicking here.
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Friday, November 13, 2009

ANOTHER New Lead Paint Rule Coming from EPA

The EPA’s Lead: Renovation, Repair and Painting rule is six months away from adoption –and the agency is already planning more changes. It is critical that affected HBA members lose no time submitting their comments on the proposal.

EPA has proposed removing the “opt-out” provision from the rule. With very few exceptions, that means that remodelers, HVAC contractors, painters, insulation installers – any company working in homes built before 1978 - must be certified, and the training, cleaning and recordkeeping requirements for certified firms are not trifling, or inexpensive. In other words, this isn’t just a rule for remodelers: This rule applies to anyone doing work in 68 percent of the homes in this country. You can get additional information by reading this week’s NBN article.

NAHB is planning to submit comments about the changes to the rule by the Nov. 27 deadline. However, the more comments the EPA receives, the better. The agency must understand why the proposals won’t make children any safer – and in fact, by encouraging more “DIY jobs” and not hiring a professional contractor, they may be placing more children in danger. For your convenience, NAHB has created a letter template to get you started.

For more information on the lead paint rule, visit www.nahb.org/leadpaint.

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Sunday, November 8, 2009

First-Time Home Buyer Credit Extended, Expanded to Include Most Other Home Buyers For Next Few Months

Months of tireless behind-the-scenes work by the National Association of Home Builders and lobbying by thousands of builders and realtors from across the country paid off last week. Following decisive action by the Senate and the House of Representatives, President Barak Obama signed a bill Friday extending unemployment benefits and the federal tax credit for first-time home buyers. It also creates a new tax credit for repeat buyers who purchase a new primary residence. Following is a summary of the provisions of the home buyer tax credit extension and expansion:

Who is Eligible

  • First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
  • Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
  • All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

  • Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
  • For married couples filing a joint return, the combined income limit is $225,000.
  • Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
  • The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

  • The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify

  • All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable

  • A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
  • For example:
    • A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).
    • A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
  • All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

  • The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Please check the site next week for more detailed information on the new tax credit!



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'Agriculture reserves' nixed in land-use plan

November 8, 2009
by: Wes Johnson

A proposed land-use plan that riled Greene County property owners more than two years ago has now been approved with changes that, as one lawmaker put it, "accepts the fact that agricultural land is going to be gobbled up."

Gone are "agricultural reserve" areas intended to keep fertile farmland from being swallowed up by subdivisions.

Gone are swaths around Springfield designated as "urban reserves" which would deter land from being carved into three- and five-acre housing tracts.

In their place, a "guide" for county planners to use when deciding future zoning changes as the county grows.

"I think it's a good, sound document," said Greene County Commissioner Roseann Bentley. "We sure heard from the people. When you're a public servant, sometimes you have to compromise what you wished to accomplish. I personally wish we could have had more consideration for our agricultural land."

State Rep. Jim Viebrock, who is running for Greene County presiding commissioner in 2010, said county officials should "embrace" development "and get government out of the way."

"As Springfield grows, you have to accept the fact that some of this agricultural land is going to be gobbled up," said Viebrock, R-Republic. "It has to be a foregone conclusion that that is going to happen."

A key part of the plan is a color-coded land-use map that outlines agricultural areas and rural development areas where future housing is likely to follow major road corridors in the county.

Although county officials consider the map only a guideline for future decision-making, many with rural property interests will be watching to see how it will be used.

One of those is Lincoln Hough, who represented the Farm Bureau and Greene County Cattlemen's Association on a land-use task force that studied the plan for some 18 months.

"If that land-use map is used to curb future development in unincorporated areas, we're against it," Hough said. "If not, if it's used just as a guide for planning and zoning to get an idea of what land uses are doing in the area, it's OK."

Case-by-case basis

Greene County commissioners affirmed their support for a retooled land-use plan last week, after numerous public hearings and the lengthy task force review.

The document updates a plan that's 28 years old.

Presiding Commissioner Dave Coonrod said the plan takes into account where residential growth is likely to occur.

Coonrod and Commissioner Harold Bengsch emphasize the plan will be used as a guide that the planning and zoning board and the commissioners will consider when they review requests for zoning changes.

"We do have respect for property owner rights, and the ability of a citizen to use their land to maximum benefit, as long as they minimize the impact on their neighbors," Coonrod said. "We'll look at each zoning request on a case-by-case basis."

When the commissioners first moved to update the land-use plan in 2007, they advocated the concept of somehow protecting and preserving farmland.

Once agricultural land is sold and developed into subdivisions or rural home acreage tracts, they noted it rarely, if ever, returns to farm use.

The commissioners also were concerned that continued growth of three- and five-acre home sites -- with individual wells and septic systems -- could have potentially harmful effects on groundwater.

That kind of widely spaced housing also would make it too costly to install sewer lines that would do away with septic systems.

But the effort to conserve agricultural land backfired.

At several land-use plan public hearings, many rural property owners said they felt the county was trying to tell them what they could or couldn't do with their land.

Many said they were banking on the fact they could sell their farmland to developers to fund their retirements.

"We heard loud and clear from landowners who said, 'you're taking away our 401(k) from us,' " Bengsch said.

How the plan works

With agricultural and urban reserve areas now gone from the plan, just how will it work?

A future zoning-change request will first be reviewed by county staff, who will make a recommendation to the county planning board.

The planning board will hold a public hearing and then make a recommendation to the county commissioners, who have the final say on whether to approve or deny the request.

Tim Smith, Greene County administrator, said zoning decisions will factor in the character of the area, environmental factors such as whether the soil can support septic systems, and how surrounding land is being used.

"The green areas in the map (brown in the News-Leader version), if you want to rezone to three- or five-acre tracts, chances are better that staff will recommend approval of that change," Smith said.

"White areas on the map we'll be more inclined to keep as farmland. In the white areas, staff will likely recommend against it (three- and five-acre tracts) without compelling reasons to do it."

What could constitute a "compelling" reason?

Smith said staff would consider if there already are developed tracts within a half mile of the property.

There are other ways to develop farmland in the white areas of the map, he said.

Property owners already can divide their land into tracts of 10 acres or more without any input from the county.

They also can carve out up to two five-acre tracts "to accommodate land for family members," Smith said.

Farmland also could be developed by rezoning into a "conservation district" where homes are clustered together and surrounded by open space.

Smith said the land-use plan is intended to give planning board members land-use policies "with some teeth" behind them.

"But staff can make a recommendation and they or the commissioners could choose to do something else," he said. "We look at this plan as a fundamental philosophy about how this county will develop."

Reaction is mixed

Rural property owner Earl Slavens raises cattle on 60 acres near the Greene County-Lawrence County line.

He worries the plan does nothing to keep productive Greene County farmland from vanishing. Farmland and open land make up about 49 percent of the unincorporated areas of the county.

"It's an urban sprawl plan," said Slavens. "If you look at the map, they have most of the county designated for residential housing. Their plan basically turns the whole county into residential."

Real estate broker Sara Ray strongly opposed the first iteration of the land-use plan in 2007, saying it would unfairly limit what rural buyers wanted -- country homes on small acreage.

Ray served on the land-use task force and now believes the plan is a reasonable compromise.

"The commissioners didn't even come close to anticipating the negative reaction they'd get when they first proposed agricultural reserves," she said. "The reality of the situation now is that it's a guideline. It's the best we could get at this point."

Ray said she was disappointed the task force wasn't able to take a more in-depth look at how the county will develop.

"Those that spoke with the most conviction were most interested in individual property rights," Ray said.

Republic property owner Jim Arndt said he was "100 percent for" preserving farmland, and said he believed the county should limit rural homes sites to a minimum of 40 acres.

"It's just land wasted with five-acre tracts," he said. "You can't do anything with it. It's not big enough to farm."

Arndt, however, had no qualms selling 55 of his 60 acres to a developer.

The land, formerly his grandfather's farm, now is a Republic subdivision.

"My $50,000 investment in land turned out to be worth $400,000," he said.

Before the commissioners voted on the land-use plan, they heard from Galen Chadwick, a proponent of sustainable land use and a locally-grown food supply.

He believes the land-use plan will lead to "almost uninhibited urban sprawl" in the county.

"The reason this is happening is that the commissioners have no vision of a sustainable future," Chadwick said.

The Springfield League of Women Voters also weighed in on the plan during last week's public hearing.

President Cindy Stephens said the league supported the first version of the plan -- which included agricultural reserve areas.

"We're glad to see landowners and developers found some common ground with this new plan," she said. "We hope the county can continue to brainstorm for ways to assist people to keep good farmland as farmland."

The county commissioners initially planned to review the land-use plan in five years.

But after hearing more concerns about saving farmland, they enlisted the help of Missouri University Extension.

Commissioner Bengsch asked MU Extension to serve as a "facilitator" for groups that want to explore ways to preserve farmland or re-examine the land-use plan.

Tim Siebert, MU Extension urban specialist, said the goal is to "hear from all sides."

No meeting dates have yet been arranged.


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Sunday, November 1, 2009

Rep. Wasson & Rep. Schoeller Facilitate Meeting with Division of Workers' Compensation

In 2009, HBA Government Affairs Chair Matt Bailey and the committee members have been researching and meeting with various elected officials and government agencies (including the state Attorney General's office) in regard to the issue of non-compliance with the workers' comp coverage requirement for companies in construction. The ultimate goal is to improve compliance with state law and prevent unfair competition from those businesses that either (1) knowingly opt not to carry required work comp coverage or (2) genuinely but mistakenly believe they are exempt because they do not understand state law's requirements.

Thanks to the efforts of Rep. Jay Wasson, your HBA had one of its most productive meetings to date on this issue with the Deputy Director of the Missouri Dept. of Labor and Industrial Relations and the Chief of Operations for the Division of Workers' Compensation. Rep. Shane Schoeller also attended the meeting and was very helpful in communicating about this issue, thanks to his past experience as Government Affairs Director for the HBA of Greater Springfield. In addition to HBA staff, HBA President Rusty MacLachlan and President-Elect Matt Bailey also were in attendance.

The HBA focused its comments on administratively changing the Affidavit of Exemption for Workers' Compensation Insurance Pursuant to 287.061 (download form by clicking here.) In any jurisdiction that issues business licenses, if a construction-related company/contractor does not provide proof of insurance, the licensing entity is required to provide the business with this affidavit form, which the business may sign to confirm it is exempt from the state requirement to carry workers compensation insurance. In its current format, this affidavit leads many in the construction industry to falsely and/or mistakenly declare they are exempt from Missouri’s requirement to carry workers' compensation insurance. Affiants check the first box (“sole proprietor with no employees”), believing that they qualify because they are a sole proprietor and they have no direct W-2 employees. What is not clear on the form is that Missouri workers compensation law holds a broader definition of “employee” than is most commonly assumed. Nearly all of these affiants utilize subcontractors, family members, or volunteers – any one of which would, in most cases, meet the definition of “employee” for the purposes of work comp coverage.

Within the scope of Workers’ Compensation law, Missouri recognizes the doctrine of “statutory employment”, i.e., recognizing that the employees of the second company are deemed to be employees of the first company in a subcontracting arrangement. This means that even when a general contractor does not have a traditional W-2 employee, the business may meet the definition of having an "employee," and therefore is required to maintain workers' compensation insurance coverage, as long as all of these requirements are met:
  • work is done under contract (either express or implied, oral or written);
  • work is done by the second company’s employees that the first business has a right to control; and
  • the work is in the operation of the usual business of the first business.

The HBA of Greater Springfield contends that the Affidavit of Exemption should include additional language which more fully defines an “employee” within the scope of workers compensation law. Such language should be plainly stated on the main form as well as on the additional page of definitions. Attorneys for the licensing jurisdictions with whom the HBA has met agree that it would be an extremely rare and unlikely scenario for any construction business to actually meet the state-defined criteria of having “no employees” within the scope of workers’ compensation law and yet many contractors are filling out and turning in this form at the licensing office. Further, employees of the licensing office (city or county staff) have no authority or obligation to explain or clarify the definition of “employee” to those who utilize the form. Consequently, the form is its own only defense, and should therefore be exceedingly clear on this point.

Making these changes to the form would educate those who unknowingly believe they are exempt and ultimately improve overall compliance and consumer protection. Making the signed forms available electronically would allow contractors and homeowners to check on claims of exemption. The officials the HBA met with also suggested calling this toll free number to verify proof of workers' compensation insurance, and to report non-compliance with the state requirement for construction related companies: 1-800-775-2667. The Division is also working on a web-based search mechanism to verify work comp coverage. This would be helpful in those jurisdictions with permitting, but without a licensing process, to check proof of compliance with the work comp law prior to issuing a permit.

If you have questions or comments about this issue, you can email Government Affairs Chairman Matt Bailey by clicking here.

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ADVOCACY: Extension/Expansion of Homebuyer Tax Credit

An Important Advocacy Update from
NAHB Chairman Joe Robson

I am writing to update you on the status of NAHB’s efforts to secure an extension and expansion of the first-time homebuyer tax credit (tax credit) and five-year carryback of Net Operating Losses (NOLs) established under the American Recovery and Reinvestment Act of 2009.

This week the Senate began its consideration of legislation to extend additional unemployment insurance benefits to unemployed Americans. Because of the work of NAHB, members of the Association from around the country and a number of our allies in the Senate, proposals to extend and expand the homebuyer tax credit and expand the NOL carryback are included in that legislation. These proposals are the result of bipartisan efforts of Senate Finance Committee Chairman Max Baucus (D-MT) and Senators Johnny Isakson (R-GA), Chris Dodd (D-CT), Olympia Snowe (R-ME), Lamar Alexander (R-TN) and Joe Lieberman (I-CT), and Senate Leaders Harry Reid (D-NV) and Mitch McConnell (R-KY). Without their support and persistent advocacy in the Senate, we would not have been able to achieve this result.

Also, the Obama Administration, through a joint statement issued by Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan, last week said, "We welcome efforts taken by Congress to extend the First Time Homebuyers Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide.”

Here are the specifics of the proposals as we know them:

Homebuyer Tax Credit
  • Extends the $8,000 tax credit until April 30th for first-time homebuyers;
  • Creates a new $6,500 tax credit for move-up buyers for the same period;
  • Both categories of homebuyers have an additional 60 days (June 30th) to close on the home;
  • Both categories of homebuyers have new, higher income limits of $125,000 for individuals and $225,000 for couples;
  • Move-up buyers must have been residing in their primary residence for 5 consecutive years out of the last 8 in order to qualify for the credit; and
  • Homes over the purchase price of $800,000 do not qualify.
NOL Carryback
  • Five year carryback for NOLs in either 2008 OR 2009, not both;
  • Years 1-4 allow for 100 percent use of NOLs, year 5 is limited to 50 percent of a company’s taxable income in that year;
  • No size limitation or other cap on revenues; and
  • Unused NOLs in year 5 are still eligible for 20 year carry forward.
We anticipate that the Senate will pass this legislation this week with the House to follow shortly after that. We anticipate that the House will accept the bill – and homebuyer credit/NOL proposals – as crafted, although that could change.

I wanted you to have the latest information on the status of our efforts. Hopefully in a matter of days I will be able to report that these critical proposals have passed both Houses of Congress and signed into law by President Obama. As always, please contact me with any questions or comments.

Regards,

Joe Robson
NAHB Chairman

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