RAB Veiw on this Session

Government Affairs Committee

The RAB Government Affairs Committee met last Monday, June 4th, at the Ramada Hotel and Conference Center. City and Assistant City Administrators Steve Kvenvold and Gary Neumann were gracious enough to attend our meeting and discuss our concerns with the City's permitting and development process. Prior to the meeting, I contacted RAB Members for specific issues that they have with the permitting and development process in Rochester. I compiled those responses and put together a list of the most frequently mentioned issues. I sent this memo to Steve Kvenvold and Gary Neumann prior to the meeting. At the meeting, we had an open conversation about the issues that most concern us. We let Steve and Gary know that we realize we are part of the problem as well. We want to work collaboratively with the city to address these issues from both sides and reach an amicable solution for all those involved. It has been decided that the next step in the process will be to form a task force of our membership to work with City Staff on these issues. At the same time, with the city's assistance, we will continue to review different consulting companies that could help us in this process.

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BATC Public Policy Meeting

The BATC Public Policy group met on Thursday, May 31st. A legislative recap was held. Some of the highlights included:

Moratoria

Background - BATC sought a 10-day public notice prior to enacting moratorium & exemption of completed applications from terms and conditions of moratoria.

Status: Introduced in both bodies, pending action in House and Senate. The League of Minnesota Cities, Association of Minnesota Counties and Minnesota Townships Association strongly opposed the measure and were instrumental in blocking its hearing in both the House and Senate. The bill remains in committee until next session.

Park Fees

Background BATC seeks clarification that fair market value shall be established based upon the average fair market value of undeveloped land that is, or under the city's adopted comprehensive plan, may be served by municipal sanitary sewer and water service or community septic and private well as authorized by law.

Status : Passed the legislature and is expected to be signed by the Governor shortly.

Development Contracts

Background BATC seeks notice prior to final action on a PUD & a requirement that the terms of a PUD may not be exceed statutory authority.

Status BATC continues to discuss the issue with potential authors and stakeholders.

Transportation Impact Fee

Background The House Transportation Committee initially included a Transportation Impact Fee in their transportation finance package. The language is similar in concept to the language supported by BATC over the past few years, but misses several safeguards. These include: language to ensure that a fee is fair, reasonable, and proportionate; has a nexus to the need created by the development; is collected and spent within a travel shed; and is limited to improvements to local collector streets.

Status: The bill failed to receive support in both the House and Senate bills and was not passed into law.

Wetlands Conservation Act Changes

Background Throughout 2006 BWSR convened a stakeholder group to discuss changes to the Wetland Conservation Act (WCA). The result in the legislature has been a myriad of concepts contained in several bills in both bodies. Included in the slate of ideas are exemptions from the 60-day rule for wetland delineation, replacement, etc; elimination of wetland credit for stormwater ponds; and a third party cause of action for a citizen to bring in any instance where the citizen alleges a violation of WCA.

Status The WCA changes were rolled into the Omnibus Environment bill, which passed into law in mid-May. The third-party citizen cause of action was removed, while the 60-day rule changes and wetland credit for stormwater pond were amended as part of stakeholder compromises.

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City Computer System Not Yet Ready to Go Live

The new computer software that is to be utilized by the Rochester Building Safety Department, is not yet ready to go live. The program, from the Accela company, still has bugs being worked out. The program had a launch date of 6/4/07 but was pushed back due to continued problems they've had in implementing the software. A new date has been set for July.

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Stormwater Detention Ponds

In 2004, the Rochester City Council established a Policy for the transfer of privately constructed and owned storm water ponds to the city. Public Works is developing the formal guidelines and standards to be utilized for implementing that Policy. The DRAFT is still undergoing internal review and comment.

This will be an item for discussion at the next RAB Public Works Advisory.

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BATC Green Building Program

The program is finalizing the program˙ŭs name, identity and branding collateral. A letter is being drafted to send from BATC to all municipalities highlighting their work on this program. Remodeling standards enter the pilot program in early June, with the single family standards entering third-party technical review and scheduled to enter the pilot phase in mid-August. An event in late June is being planned for potential sponsors to get more information on the program and on levels of sponsorship and involvement.

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Bid to Require Fire Sprinklers Defeated at Code Hearings

From Nation's Building News Online

During final hearings in Rochester, N.Y. last week for proposed changes to the International Residential Code, affordable housing advocates pushed back an effort to include requirements for fire sprinklers.

Proponents of mandating fire sprinklers for one- and two-family homes were unable to muster the two-thirds majority vote they needed. The May 22 vote was 476 to 375.

Contained in the code's appendix, fire sprinkler requirements will remain a local jurisdictional choice, which is exactly as it should be according to representatives from NAHB state and local home builders associations who spoke at the code hearings.

Building officials, nevertheless, are finding the arguments of fire-sprinkler advocates increasingly persuasive, putting the onus on home builders to continue to emphasize the effectiveness of the safety measures being incorporated into today˙ŭs homes and the importance of working smoke alarms and fire safety education to prevent fires.

In California, more than 95% of fire fatalities were in homes built 20 years ago. That's a tragedy, said Bob Raymer, technical director for the California Building Industry Association, before a packed hearing room. But the fact is, the code changes we have made over the past 20 years are working, making homes safer than ever, he said.

The cost of sprinklers is $10,000 to $15,000 in my community, said a representative from Utah. How many of you could afford to buy your house again where you live, and then add on the price of a sprinkler system? We need to have a balance. Lee Schwartz, executive vice president for government relations for the Michigan Association of Home Builders, testified that Habitat for Humanity officials in his state voted unanimously to oppose moving fire sprinkler requirements from the appendix to the main body of the code because of affordability and maintenance issues. Many of our affiliates find they need to conduct several sessions of maintenance classes for some of our home owners to understand even basic home upkeep, such as changing filters on furnaces and cleaning out gutters, to say nothing of the original cost [of fire sprinklers] to the family, Habitat for Humanity of Michigan President and CEO Kenneth W. Bensen said in a letter to code officials. By raising the cost of the home and setting forth another barrier in the way of those in the greatest need to afford a home, this requirement would harm our mission of increasing the capacity to building simple, decent homes in Michigan, Bensen said. Once it was demonstrated that smoke alarm system technology worked reliably, home builder association members in his state threw their support behind measures to require the alarms in all existing homes, Schwartz added. Home builders and code officials opposed to mandating residential fire sprinklers have too many unanswered questions about their reliability, installation requirements, maintenance, inspection procedures and long-term functionality to be able to support them, speakers said at the hearing. Having installed fire sprinklers in a 17-home development, Don Pratt, a Michigan builder and code official, said that fire suppression systems are not ready to be installed in single-family dwellings because of the lack of appropriate technology. I plead with you; we need more time to figure out the best system. Other speakers said that emphasizing safety in existing homes is what˙ŭs needed to combat fire fatalities. Making the house safer for middle- and upper-income people [who can afford new homes] is not going to help low-income people˙ŭ in substandard housing or who don't understand the importance of working smoke alarms, said a Shreveport, La. building official. We need to solve the problem where the fire is. We haven't had a fire death in a year and a half because we have a fire chief who supports public education on fire safety, he said.

NAHB members also emphasized that the association does not oppose fire sprinklers and that it has asked the International Code Council to convene an ad hoc committee to develop lower-cost alternatives to the systems that are currently available. NAHB also supports efforts to increase the effectiveness of smoke alarms. We request that ICC join NAHB in a joint working group to propose solutions that both our organizations could embrace and pursue to end this needless loss of life, perhaps as part of the ICC Foundation efforts to promote building safety, said Eric S. Borsting, NAHB Construction, Codes & Standards Committee chair, in an April 6 letter to ICC President Wally Bailey. Association leaders who worked to get the home builders pro-smoke alarm message heard said they were pleased with the results of the vote.

Reasonable minds have spoken, said Borsting, who attended the hearings in Rochester. When our members talk to their local building officials, it becomes very clear that there are still too many unanswered questions on metering, plumbing, backflow many, many issues. The recurring theme I heard was that building officials want a choice, and keeping residential fire sprinklers optional maintains that choice, Borsting said. The hearing showed that home builders and code officials, working together, are a powerful voice on behalf of new home buyers, who overwhelmingly choose not to install fire sprinklers. We will continue to emphasize our message of safety and affordability and the importance of maintaining that balance."

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Builders Are Pulling Out the Stops

From NAHB's "Eye on the Economy"

In May, NAHB conducted a nationwide survey of single-family builders to track the kinds of incentives being offered to bolster sales and limit cancellations, and we also solicited builders˙ŭ assessments of the degree of success being achieved. On the home price front, we found that 52% of builders had reduced prices during the previous month. For those cutting prices, the average reduction was 7% similar to the magnitudes revealed by a series of surveys conducted by NAHB since mid-2006. Nearly three-fourths of builders said their price cuts were at least somewhat effective in bolstering sales or limiting cancellations. Nearly three-fourths of builders in our May survey were offering nonprice sales incentives of various types, sometimes in combination with price cuts. The most frequently offered incentives were:

Include optional items in homes at no cost.

Pay closing costs for buyers.

Absorb up-front mortgage finance points.

Buy down mortgage interest rates.

Help buyers sell existing homes or offer trade-in programs.

High proportions of builders rated all of these incentives as at least somewhat effective in bolstering sales or limiting cancellations.

A small percentage of builders also said that they had offered to match price reductions on future sales of the same models in the same communities. Despite the logical appeal of this sales incentive, only about half the builders making such an offer said it was an effective measure in dealing with reluctant prospective buyers.

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Builders Are Facing Reluctant Home Buyers

From NAHB's "Eye on the Economy"

The subprime-related tightening of mortgage lending standards certainly has pushed large numbers of prospective home buyers back to the sidelines, and the timing of their return to the market is highly uncertain. There also has been widespread reluctance among consumers who have good access to credit to go ahead with home purchases at a time when affordability remains well below conditions prevailing prior to the 2004 to 2005 housing boom. There are plenty of new and existing homes to pick from and home prices are weakening in many areas.

Consumer perceptions of the direction of home prices are central to the difficult market conditions now encountered by builders. Projections of rising house prices strengthened demand during the 2004 to 2005 boom, even as rising prices were taking a toll on current affordability conditions, and projections of falling house prices now are weakening demand even as falling prices are supporting current affordability conditions. Most builders have never had to deal with such a maddening reality before, and the frustration level definitely is mounting, according to our monthly surveys of single-family builders.

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