Article Building Industry HBA Members

Nobody Asked Me But… Housing Regulations Create Market Dysfunction

By Dennis Sweeney, Executive Vice President of HBA of Rockford

The United States boasts of its free market economy which encourages and stimulates innovation, competition and market driven efficiencies were supply meets demand. This market driven economy was very successful in the roaring 80’ and 90’s for housing production. The Rockford, IL housing market was an excellent example of this competition as it was one of the most affordable housing markets in the entire nation while producing 1,000’s of homes each year by 100’s of private contractors for first time new home buyers up to executive new home buyers. There are Parade of Homes plan books to prove it.

The growing costs of government regulations and fees has created a dysfunctional housing policy “ax knot” which is going to be very difficult to untie. Sometimes the only way to undo it is with an ax.

Here is the short list of regulation grievances through the years starting with school impact fees, excessive connection fees, land use and zoning requirements, septic system requirements, and environmentally driven federal building code mandates (mandatory EV charging station wiring), are some of the most costly. All of these, combine to push the cost of new housing higher, dampening demand, and then, the lack of new housing supply, pushes the cost of existing housing higher. Winnebago County property owners received their new property value assessments last week. The cost of housing is going up.

As has been pointed out in previous articles the past few weeks, the United States is 6.5 million housing units behind household formations. This lack of housing supply for the housing demand should be met by the housing industry in the market place because there is money to be made. However, it has become apparent that the housing industry is not confident that it can profitably build those needed housing units where they are needed. Uncertainty has a dampening effect on home building.

Which brings me to the article on page 2 that the FHFA is considering rent regulations and controls to keep rents affordable. Given the history of rent control policies at the national and local levels, it’s difficult to understand how they expect this to be the solution for solving the most pressing housing problem – not enough housing units. The uncertainty in the market and the regulatory costs have led us into this policy “ax knot”. Rent controls are not going to encourage the construction of sorely needed housing units that would be impacted by such a policy.

Article Building Industry HBA Members

Housing starts: Construction Numbers Slip in June After a Bullish May

By: Gabriella Cruz-Martinez

Housing starts, which include new single- and multi-family units, decreased to a seasonally adjusted annual rate of 1.434 million units in June, according to the Census Bureau, down 8% from May’s revised rate of 1.559 million units. That was 8.1% below a year ago and under the 1.480 million units economists had predicted.

New construction was up a whopping 21.7% in May over April.

Permits to build were at an annualized rate of 1.440 million units in June, 3.7% below May’s revised rate of 1.496 million units, with modest increases in applications on the single-family and multi-family sides. The figure came in lower than the expectation of 1.500 million.

The shortage of previously owned homes for sale has given homebuilders an edge in today’s market, as they’ve continued to ramp up construction of new units in recent months. But that may not last.

Rising costs of imported raw materials such as aluminum, softwood lumber, and steel could cause delays in new builds, the National Association of Home Builders (NAHB) found.

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” NAHB chief economist Robert Dietz wrote in his Eye on Housing blog.

Single-family housing starts in June dropped to a rate of 935,000, 7% below May’s revised estimate of 1,005,000. On the multi-family side, starts in June were 482,000, also down from approximately 624,000 from the month prior.

At the same time, building permits for single-family home construction rose to a seasonally adjusted annual rate of 922,000, up 2.2% from May’s revised rate of 902,000.

Building permits for multi-family homes were at a rate of 467,000 in June, down from approximately 542,000 the previous month.

New construction has become a larger part of today’s housing market. More than a 33% of homes on the market this spring were new construction, the NAHB estimated. That share is historically 13%.

HBA Members

Emil Rodakowski Scholarship Award 2022

Andrew Penticoff is the latest recipient of an Emil Rodakowski
Scholarship Fund Award made the HBA of Rockford.

Andrew is a student at Winnebago High School and has worked on construction job sites helping his father who is an electrician. This summer he will have an internship working for a general contractor. He plans to pursue his construction education in the construction management program at Kirkland College in Cedar Rapids, Iowa.

Congratulations to Andrew, and we wish him great success in his future in the construction industry!

If you know a young adult who may be eligible for the next Email Rodakowski scholarship, please contact us at HBAR for application details.

HBA Members

June is National Homeownership Month

Article by Jay Pitney, HBAR President

Homeownership is gaining momentum across the country. According to the latest data from the Census Bureau’s Housing Vacancy Surveythe U.S. homeownership rate is 65%. In the Northern Illinois market area of the HBA of the Greater Rockford Area, homeownership is above 70%. Homeownership endures as the foundation of the American dream, and that’s why the home building industry is celebrating National Homeownership Month in June. 

Homeownership builds stronger communities, provides a solid foundation for families and improves the quality of life for individuals in our community. For many, owning a home is a positive step in creating a source of net worth. Home equity for U.S. home owners continues to rise. Building equity when the value of a home appreciates is one of the significant long-term financial benefits of homeownership. Home owners count on their home equity to fund retirement, their children’s education and other needs.

Homeownership also increases stability for our area. A commitment to a community fosters civic participation. Through volunteering, school and church activities, and property maintenance, homeowners contribute to making strong and healthy neighborhoods and cities.

The Home Builders Association of the Greater Rockford Area is comprised of a network of craftsmen, innovators and problem solvers dedicated to building homes, enriching our community and boosting our local economy. Everyday our members strive to provide safe, energy efficient, affordable housing for families in Northern Illinois. We are proud to contribute to the American Dream of homeownership.

HBA Members

HBA Rockford and Estwing Mfg. Support Student Construction Competition

The Career Education Associates of North Central Illinois (CEANCI) contacted the HBAR for assistance in providing hammers for their construction competition on April 22nd. HBAR Past President Kevin Flosi (Flosi Construction) requested the hammers and Steve Flosi (Vice President of Manufacturing at Estwing Mfg. Co.) generously supplied them for the competition. Thank you for encouraging students to pursue careers in construction!

The HBA of Rockford also participates in the career days hosted by CEANCI for middle school students. Our objective is to encourage students to consider careers in the home building and associated trade industries.

HBA Members

Sponsor the 2022 Home Show

Marketing Sponsorships are available for the 2022 Home Builders Home Show May 14th & 15th at the Boone County Fairgrounds.

Marketing sponsorships cost $1,500 and the sponsor will receive: A
complimentary 8′ x 10′ home show booth, listing and mention in
home show advertising, and a complimentary 1⁄4 page advertisement in the online newsletter for 2022. The sponsorship revenue will be added to the Home Show marketing budget.

Contact Dennis Sweeney to register for sponsorship
(815) 962-1148

Current Sponsors: