BUILDING INSIGHTwww.BIAW.com

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// JAN ROHILA

ADMINISTRATIVE SERVICES DIRECTOR

AGING BOOMERS, POPULARITY FUEL FASTEST-GROWING MARKET

UNIVERSAL DESIGNGET INFORMED

Life gets a little more challenging when we age or have a disability. It’s harder to walk up steps to get to the bedroom upstairs, hold bags of groceries while opening the door, and stand for long periods at the counter to make a meal. For many in this situation, their living spaces need a makeover or at least some tweaks so they can stay in their own homes and live life more fully.

As baby boomers approach retirement and the average age of the U.S. population increases these lifestyle changes will become the norm. Many businesses – including builders and remodelers – are designing products that appeal to these customers who are beginning to encounter age-relat-

ed issues. Current estimates are that within three years (by 2019), the 55+ cat-egory will account for nearly half of all U.S. households and more of them will need updated features and products to stay in their current homes. Along with the aging-in-place market, a growing number of households have a member who has either a temporary or permanent disability and can also benefit from improved accessibility updates.

This is a great time to start learning more about universal design and the aging-in-place market.

If you are planning to attend BIAW’s Winter Board meeting from February 22-24, you won’t have to go far to learn about the many design features, ret-rofits, and variety of products and services available. BIAW’s Accessible Hous-ing Council has planned some special events to inform and educate builders, remodelers and associates on new concepts, products and services. All BIAW members are invited.

If you would like to participate in the Accessible Housing Trade Show as an exhibitor or have questions on the event, please contact BIAW Projects and Facility Manager Karen Hall at 360-352-7800, ext. 137 or karenh@biaw.com.

MEETING: Join BIAW’s Accessible Housing Council and discuss issues relevant to the aging-in-place, universal design market segment.

FORUM:n Hear from Accessible Housing, Lifelong Housing and Universal Design specialistsn Learn tips, tricks, hints, and ideas as to what to avoid when building for these marketsn Ask the industry experts with plenty Q&A timen And much, much more

TRADE SHOW: Meet local manufacturers, suppliers and exhibitors for a trade show and one-on-one discussions and demonstrations of products designed to help you prepare to meet the demand for accessible living.

ACCESSIBLE HOUSING COUNCIL SPECIAL EVENTS SCHEDULERED LION HOTEL, OLYMPIA, MONDAY, FEBRUARY 22

Forum Speaker

TIM DICKEY Tim Dickey, CAPS, CGR, CGP, has more than a decade of remodeling experience to make homes more accessible. His background includes: n Remodeling and updating hun-dreds of homes for accessibility n Founding an accessible bathing products showroom, Accessibly Liv-ing Conceptsn Advising clients on the products that work best for them and for their homesn Earning awards for remodeling excellence from the building indus-try profession

Forum Speaker

JIM BREIDENBACHJim Breidenbach, CAPS, CGR, is founder of Craftsmen Construction, Inc. He has provided residential remodeling services for 25 years. His background includes: n Extensive marketing, design and building experience for creating barrier-free living environments n Vast experience remodeling living spaces and homes to create more usable features for maturing adults to “age-in-place” n Deep knowledge working and communicating with this fast-ex-panding market n Recognition for remodeling excellence by peers in the building industry

EVP VIEWPOINTPRESIDENT’S PERSPECTIVE

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//BUILDING INSIGHT WWW.BIAW.COM

SETTING IT STRAIGHTHome builders have led green building trend for twenty years

Who We AreThe Building Industry Association of Washington is the state’s largest trade association and represents nearly 8,000 member companies in the home build- ing industry. Known as the “Champions of Affordable Housing,” BIAW is dedicated to ensuring and enhancing the vitality of the building industry for the benefit of its members and the housing needs of citizens. 2016 SENIOR OFFICERSPresident Dave Main MBA of King & Snohomish Counties First Vice President Ted Clifton, CGB, CGP, MCGP Skagit/Island Counties Builders Association BIA of Whatcom County Second Vice President Myra Williams MBA of King & Snohomish Counties Treasurer Kevin Russell, MCGP North Peninsula Building Association Secretary Ron Pelson Central WA Home Builders Association Immediate Past President Monty Smith, CAPS, CGR BIA of Whatcom County Skagit/Island Counties Builders Association BIAW STAFFExecutive Vice President Art Castle Administrative Services Director Jan Rohila Director of Insurance ProgramsFrank Romero Government Affairs Director Jan Himebaugh Building Insight questions/comments:Communications and Public Relations Director Jennifer Hayes Building Industry Association of WA111 21st Avenue SW | Olympia, WA 98501 360-352-7800 | BIAW.com

// BIAW TO PUSH PRIORITIES 7

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MARKET DATABuilding permits, NWMLS home sales14-15

// HAPPENINGS AROUND THE STATE 5

On the cover: BIAW President Dave Main takes the president’s oath of office delivered by former Master Builders Association of King and Snohomish Counties Executive Officer Sam Anderson.

MAIN MUSINGS 2016: Buildable land supply, labor shortages & regulations

// RESOLVE TO GET EDUCATED 12// SEEKING SUPPORTING EVIDENCE 11

// STATE OF THE INDUSTRY 10

CONTENTS //

// PLAN TO ATTEND HOUSING EVENTS 2

JANUARY ’16VOL. 26, ISSUE 1

// DAVE MAINPRESIDENT

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BUILDING INSIGHTwww.BIAW.com

See MAIN MUSINGS on page 5//

BIAW has, and continues to be, committed to introducing regu-latory reforms and countering harmful small business leg-islation to reduce the overreach of government.

As the expression goes, time flies. It was a few short months ago that I was installed as BIAW president and now I’m beginning my term for 2016.

It seems appropriate for me to start our year together by telling you a little about myself. I am the proud son of a professional soldier who served in three conflicts as well as a first grade school teacher, both of who are retired. I have one brother, also an educator, of whom I am very proud. I have been married to my wife Barb for 40 years. We have two wonderful daughters, and as of seven months ago, we had our very first grandson. I care deeply about the sort of world that we will

leave them and I want there to be room for common sense in the discussion about their future. As for interests and hobbies, I like sports and still participate in a few.

My pathway to BIAW President started in 1978 when I first became an associate member of what was then called The Seattle Master Builders. I was one year out of Washington State University, in my second year of marriage to Barb, and I was ready to take on the world (and it was ready to take on me). Since those early beginnings, I have overcome much to get to where I am, and I’m looking forward to this next chapter. In 2016, we will have much to focus on:

BUILDABLE LAND AND LABOR SHORTAGESMy wife and I paid $46,950 for our first home in Kent in 1979, a four-bedroom ranch.

Fast forward to 2015: My company’s last building permit cost $52,000. The lot, due largely to the severe lack of buildable land, cost $470,000. The cost of construction now runs $70 to $120 per square foot. Workers that can build these homes are too few to go around. We have a lot of hurdles to overcome in our noble endeavor to house people. I promise to expand on these in future columns and discuss what BIAW is doing to address them.

REGULATIONSAs builders, we suffer from too much government. BIAW has, and continues to be, com-

mitted to introducing regulatory reforms and countering harmful small business legislation to reduce the overreach of government. Last year, BIAW challenged counterintuitive agency actions and had many legislative successes on behalf of the building industry. BIAW’s advocacy team and the Legislative Policy Committee have already established priorities for 2016 and you will hear more about them as the Legislature moves forward this year.

In addition, I would be remiss if I did not mention that our members are represent-ed by some of the finest executive officers and government affairs talent around. In my

experience, BIAW has the finest government affairs folks active in this state today. They are astute, aware, insightful and always at the ready to implement and defend our policies against those that seek to harm or hamstring our industry, while educating the uninformed that we are right about some things, and that we are truly a benefit rather than a detriment to the citizens of this great state.

FREE ENTERPRISEI believe that we are all participants in one of the most independent,

entrepreneurial and free-thinking industries on the planet. It is actually something to be proud of when one of our members manages to employ people, sift through reams of regulation, react to and exist in markets that are less than free, and in the end, be profitable. There is no shame in making a profit for the risk that we take on as builders. BIAW will continue to work with members this year to keep our profession financially resilient

Looking Forward2016 Will Focus on Buildable Land Supply, Labor Shortages & Regulations

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JANUARY ’16VOL. 26, ISSUE 1

MAIN MUSINGS from page 4//

in the face of current and emerging barriers.

LAST WORDSFinally, as I travel the state and meet

hundreds of members and participants engaged in the noble endeavor of housing people (despite the over-whelming odds against them), I am proud and humbled that you would bestow upon me the honor of serv-ing you and this great industry. I will always give you no less than my best in 2016.

I will end with a quote from Seattle Seahawks Coach Pete Carroll, which represents the anticipation I have for the start of 2016 (and the successes I expect we will have over the year): “We haven’t done nothing yet, but that nothing is feeling pretty good.”

HAPPENINGS AROUND THE STATE [A] North Peninsula Building Association 2016 state director Andy Hines and 2016 trea-surer Kasi O’Leary get a friendly welcome from NPBA Immediate Past President Kevin Russell. [B] BIAW Immediate Past President Monty Smith is all smiles as he passes the gavel to 2016 BIAW President Dave Main as he signals the end of the Fall Board of Directors meeting. [C] Olympia Master Builders 2016 President Mike Auderer double checks the words as BIAW President Dave Main delivers the oath. [D] MBA of Pierce County Executive Officer Rick Miller (left) looks on as 2001 BIAW President Bob Camp (right) installs Lyle Fox as its 2016 Presi-dent. [E] BIAW President Dave Main installs 2016 Building Industry Associa-tion of Clark County President Tracy Doriot. [F] BIAW Immediate Past President Monty Smith delivers the oath of office to 2016 Building Industry Association of Whatcom County President Mark Schamer.

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BUILDING INSIGHTwww.BIAW.com

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// ART CASTLEEXECUTIVE VICE PRESIDENT

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During a recent meeting of the Association of Washington Business discussing the Governor’s climate change proposals, he claimed that business hasn’t done anything to combat climate change since 2008.

How uninformed he is. While not designed to combat climate change, the home building

industry in Washington has been a leader in market-based environ-mental solutions for nearly two decades. Many of these efforts and programs have significantly changed how new and remodeled homes function, and have the incidental benefit of reducing greenhouse gas emissions while providing home buyers greater value.

Green Building: The first environmentally friendly, market-based green building program was developed 20 years ago by the Home Builders Association of Kitsap County (HBA of Kitsap). Currently, eleven of BIAW’s affiliated local associations have voluntarily established Built Green® programs – with up to 70% of new homes in Washington being built through one of these local programs, as well as many remodeled homes, and subdivisions. The home building industry has been a key leader in environ-mentally friendly construction and development practices, and we have a 20-year history of leadership and action.

These programs, now known as Built Green®, reduce greenhouse gas emissions through such value-added features as: exceeding the strict Washington State Energy Codes as well as meeting and exceeding the Washington State Ventilation & Indoor Air Quali-ty Code and Water Use Efficiency Standards. Additionally, nearly every section in these programs has required or optional actions which combat climate change. Several of these include: replanting removed vegetation; grinding wood cleared from land for reuse; limiting impervious surfaces; setting aside a portion of the undeveloped lot; using permeable pavement and other low impact development tools; building on an infill lot; reducing material use through efficient design; limiting project square footage; reusing and/or recycling building materials; utilizing building materials with recycled content; using sustainable-produced wood; improving energy efficiency of building components and products beyond code; optimizing hot water heating efficiency; installing dimmers and motion detectors for lighting; installing Energy Star heating equipment; using compact fluorescent or LED lighting; installing air-to-air heat exchangers; using less polluting products; using low VOC and low-toxic paints; using low-toxic floor coverings; reusing solvents and recycling used antifreeze and oil; as well as, providing information to homeowners on how to maintain and use their homes in an environmentally friendly

manner.Land Development: There are many actions for land development activi-

ties which enhance the environment and reduce greenhouse gas emissions, such as: a variety of techniques to build and create pedestrian/transit-ori-ented neighborhoods, protect ecosystems, and conserve natural resources.

Low Impact Development (LID): Since 2005, the industry has been a leader in educating and supporting market-based LID as both a means of improving water quality and environmental features. Utilizing permeable pavement, bioretention cells, retaining natural vegetation and replanting with native vegetation have direct effects in reducing greenhouse gases. The HBA of Kitsap’s foundation has led the effort to develop and imple-ment low impact development guidance and even retrofitted their office building as a showcase for how LID features actually work.

I’m sure there are many more examples in Washington where business and business organizations have made substantial efforts to support and protect our state’s environment and combat climate change.

Hopefully, the Governor will discover he was just uninformed.

While not designed to combat climate change, the home building industry in Washington has been a leader in market- based environmental solutions for nearly two decades.

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VOL. 26, ISSUE 1JANUARY ’16

POLICY IMPROVEMENTS, REFORMS FOR HOME BUILDERS REMAINS FOCAL POINTBIAW TO PUSH PRIORITIES

// JAN HIMEBAUGH

SUBSCRIBE TO LAWMAKER REVIEW! Receive a weekly email detailing BIAW’s efforts during the 2016 legislative session. Email me at janh@biaw.com or call 360-352-7800, ext. 135.

REFORMS TO THE BUILDABLE LANDS REPORT (BLR) REQUIRED UNDER THE GROWTH MANAGEMENT ACT

BLRs should be realistic and have a robust land capac-ity analysis. It should not include land in environmentally sensitive areas as buildable; it should not assume all future growth will be only in towering multi-family units; it should not assume all land is available for the market; and it should not use lands constrained by water and sewer. However, it should include the ability to expand in urban growth areas as a reasonable measure to comply.

FIXING THE SEVEN-PART TEST FOR INDEPENDENT CONTRACTORSGeneral contractors should be able to rely on information

provided publicly by the departments of Labor & Industries, Revenue, and Employment Security – if those departments list a contractor as registered and paid up, contractors ought to be able to rely on that information without having to keep on file evidence of their subcontractors tax returns, books of busi-ness, and photographic evidence of their place of business.

CHANGES AT THE STATE BUILDING CODE COUNCIL (SBCC) The code cycle should be at least every six years and not

every three. Changing the code so often does not improve the health and safety of buildings, it merely adds to costs. The SBCC also needs to find an agency home and it should be under the direct supervision of the Department of Enter-prise Services (DES). Currently, DES provides “administrative assistance” only. A real agency supervising the activities and process of the SBCC will provide a world of help for a staff-driven, rogue council. Also, private sector appointees to the SBCC should have the same requirements of the public sector appointees and be required to maintain employment in the private sector.

CONTINUED PUSH FOR ACCESS TO WATERThe state’s Supreme Court has issued a number of doozies

when it comes to water law that impact future municipal water rights and continue to curtail residential construction in more rural areas. The Legislature needs to make the law abundantly clear that access to water for domestic use is a priority in the state.

The 2016 legislative session kicks off January 11. The Legislature faces similar issues as it has in

the past in this short 60-day session. It is under a contempt order from the state’s Supreme Court regarding full funding of K-12 education. The state is also under pressure from the courts (both state and federal) to appropriately address men-tal health issues along with the general needs in a sup-plemental budget year. These demands–along with a narrow

Democrat House Majority, a Senate that is still controlled by the Majority Coalition Caucus, a car-bon-reduction-at-any-cost-focused Governor and an upcoming major statewide 2016 election–suggest a session of restrained accomplishments. Both big tax increases and big policy reforms are unlikely.

Those factors are not deterring BIAW from pushing for policy improvements. Already, the BIAW

advocacy team has been laying the groundwork for several changes that would directly and immediate-ly impact home builders (see sidebar).

Of course, BIAW will also play defense on issues in the coming year that negatively impact the industry such as warranties, fees for demolition to pay for affordable housing, and increased regula-tion that will only serve to further hinder economic growth.

GOVERNMENT AFFAIRS DIRECTOR

Jan Himebaugh Steve Gano Tom Kwieciak Bill Stauffacher

BIAW’S ADVOCACY TEAM //

2016 SESSION

BUILDING INSIGHTwww.BIAW.com

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MEET YOUR 2016

SENIOR OFFICERS FIRST VP

Island Counties Build-ers Association (SICBA) in 2009 and has had extensive involvement in NAHB and the green building sector. Clifton received numerous awards in recognition of his work and community service including BIAW Builder of the year in 2009 and many Net-Zero Energy Awards. He has also served on the State Building Code Council’s Green Building TAG and as a BIAW Education instructor.

SECOND VPDuring that time, she has devoted significant time and energy to serving on numerous committees and councils, either participating as a member or as chair. Known as a tireless re-cruiter of new members, Williams earned BIAW Top Spike recognition in 2010, 2013 and 2014. A BIAW Director since 2009, Williams has also been actively involved in community projects of her local association.

// DAVE MAINCreative Home Partners, LLCMBAKS

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// TED CLIFTON, CGB, CGP, MCGP CVH, Inc., SICBA/BIAWC Ted Clifton has been involved in the resi-dential construction industry for over 50 years. He was elected president of the Skagit/

// MYRA WILLIAMS Baskets by Myra MBAKS Myra Williams has been an active participant in her local association, Master Builders As-sociation of King and Snohomish Counties (MBAKS) since 2004.

PRESIDENT Committee and Membership Council and Retention Committee.

In addition, he has held positions as BIAW and NAHB Director, chair of BIAW’s Legislative Policy Commit-tee and been a member on NAHB’s Housing Finance and Capital Markets Committee, among other leadership roles. He has also been a consummate and energetic recruiter for his local association, earning Statesman Spike level.

Main has also been captain on community projects for his local association including Rampathon and

Incoming 2016 President Dave Main is a long-time dedicated member of his local association, the Master Builders Associ-ation of King and Snohomish Counties (MBAKS), and BIAW.

As owner of Enumclaw–based Creative Home Partners, LLC, Main has been dedi-cated to enhancing the building industry for more than 35 years by contributing his time and expertise as an involved member and leader. He has served in many roles within his local association, including as 2010 MBAKS President, chair of the Affordable Housing Council, South King County Issues Group, Housing Policy

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JANUARY ’16VOL. 26, ISSUE 1

IMM. PAST PRES.

BIAW Senior officers (left to right): Secretary Ron Pelson, First Vice President Ted Clifton, Second Vice President Myra Williams, President Dave Main, Immediate Past President Monty Smith, and Treasurer Kevin Russell.

// MONTY SMITH, CAPS, CGRM.C. Smith Construction BIAWC/SICBA Monty Smith has been a BIAW member for over two decades and has been dedicated to the home building industry at both of his local associations, the Building Industry Association of Whatcom County (BIAWC) and the Skagit/Is-land Counties Builders Association (SICBA), as well as BIAW. He has served in many leadership posi-tions, including BIAWC President in 2006 and 2007, and BIAW President in 2015. For his unwavering com-mitment to the profession, Smith was recognized as BIAW 2015 Builder of the Year and received BI-AW’s Remodeler of the Year award in 2013.

// KEVIN RUSSELL, MCGPKevin Russell Construction North Peninsula Building Association

Kevin Russell, owner of Kevin Rus-sell Construction, has been in the construction business for 11 years and has been extensively involved with committees and projects of the North Peninsula Building Association (NPBA). Russell has participated on many BIAW com-mittees and councils including the Washington Affordable Housing Council, Legislative Policy Commit-tee, and Executive Committee. In addition, he has also been actively involved in a number of community projects in Clallam County. For his outstanding contributions, he was recognized as Builder of the Year twice by his local association.

// RON PELSONTraditional Designs, Inc. Central Washington Home Builders Association Ron Pelson, owner of Traditional Designs, Inc., has been providing design services for residential and commercial buildings for more than two decades. He has been an active member in the Central Washington Home Builders Associ-ation (CWHBA), serving as chair of the Tour of Homes Committee and earning Life Spike status for his recruiting efforts. As a BIAW State Director since 2010, he has been recognized for his dedication to the industry as a CWHBA Associate of the Year in 2011 and BIAW Associ-ate of the Year in 2012.

TREASURER

Pond Lily (an environmental education project donated to the City of Bellevue), volunteered for non-profit projects in his community and has actively represented the building industry as a member on the City of Kent’s Permit Review Task Force, as a state government task force member on home owner security and as a member on U.S. Senator Patty Murray’s Sub-Prime Roundtable.

For his commitment to his community and the industry, he was recognized as MBAKS Builder of the Year in 2006 and 2008.

SECRETARY

BUILDING INSIGHTwww.BIAW.com

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You may have heard: home build-ing is slowly coming back (and will remain busy in 2016). While there’s much discussion on a national scale, what do BIAW members really think about the outlook for 2016?

As a special feature, BIAW spoke with members to get their thoughts on the upcoming year. In Part I of this article, we speak with builders from Western Washington. In our next issue, we’ll talk with builders from Eastern Washington.

Thom Richter Pharaoh’s Construction Co.

For Thom Richter, owner of Pha-raoh’s Construction Co., the outlook in the Skagit area is good for his

business, which focuses on remodeling and additions. Richter, 2015 president of Skagit/Island Counties Build-ers Association, is the busiest he’s been in 12

years. Right now, he says, he’s book-ing out jobs for May and June of 2016 because he can’t work on them until then.

While it’s a good problem to have, it’s a challenge to get the message across to home owners that remodel-ing jobs need to book farther out.

“We almost have to retrain con-sumers to what it was like pre-re-cession. Before, we would book a remodeling job two months out, and

WESTERN WA BUILDERS SEE BRIGHT SPOTS, BUT PLAN TO GROW SLOWLY IN 2016STATE OF THE INDUSTRYCAUTIOUSLY OPTIMISTIC

then during the recession, it was only two weeks. Now, we’re back to pre-re-cession levels and we have to retrain people that they have to be willing to wait longer than they did a few years ago,” Richter says.

What does Richter predict will be the biggest challenges for his business in 2016? Labor shortages will remain an issue and continue to impact future growth. In fact, his resolution for 2016 is to not to take on more than he can deliver.

“As I grow, I want to grow safe-ly. It’s tempting to say ‘Yea, I’ll be there,’ but then you aren’t able to get people hired, and it doesn’t work,” he says. In the end, reputation and follow-through can be as important as getting the work.

David Main Creative Home Partners, LLC

BIAW 2016 President David Main – and member of Master Builders Association of King & Snohomish

Counties – is owner of Enumclaw-based Creative Home Part-ners, LLC. He is “opti-mistic but cautious” about what 2016 holds in the Central Puget Sound Region.

Right now, lot supplies are dwin-dling, which is driving costs up and the public is beginning to get con-cerned about the higher prices, which is creating some nervousness about the market, he says.

While current home inventory is low – and building new homes is not

keeping up with the demand – Main predicts the market will eventually adjust its current pace.

“I believe the market will soften and fee rates will go up,” he notes.

The biggest challenges he sees ahead for 2016 (and beyond) are the high cost of government regulation, longer timelines to get things com-pleted, market resistance and higher costs due to the labor shortage.

His direction for 2016? Main plans to stay on top of demand and focus on what he does well.

Jack Harroun Jack Harroun Construction

Jack Harroun, owner of Vancou-ver-based Jack Harroun Construction, predicts 2016 will be another solid

year, but there is still reason to keep the brakes on when it comes to growth.

“It’s scary because parts of the (market) feel similar to a bubble. People seem to be cautiously opti-mistic – they are making decisions to grow, but they also don’t want to get burned,” says Harroun, 2015 President

Dave Main

Thom Richter

See INDUSTRY on page 11//

There’s a lot of work out there, but with the labor and management shortage, you can only take on so much before it starts to compro-mise other parts of the work.

—Jack Harroun Jack Harroun Construction

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VOL. 26, ISSUE 1JANUARY ’16

BIAW’s R.O.I.I.® Select staff is diligent when it comes to the investigation, litigation and resolution of claims. By putting a focus on results, staff helps to keep claims low for member partici-pants and aid in increasing the group’s overall refunds.

Over the previous month, the R.O.I.I.® Select Claim Litigation and Investigations team have been han-dling 39 docketed appeals in various stages of litigation. Since statistics were last reported, there were four voluntary dismissals and one order that was reversed and remanded back to the Depart-ment of Labor & Industries (L&I) for review. Below, we highlight a recent case in which an investigation by the R.O.I.I.® Select Claim Litigation and Investigations

staff and excellent documentation provided by an employer resulted in a successful outcome and avoided excessive claims costs.

In this case, an individual who was terminated for cause by his employer filed an appeal with the Board of Industrial Insurance Appeals after receiving notice from L&I to repay benefits he received.

The overpayment of benefits was not terribly significant in terms of cost. However, the larger perspective was if it was decided that the former employ-ee had not been let go for cause (due to insubordination), time-loss payments would have been paid to the individual, and would have been excessive for the R.O.I.I.® Select group.

The background for this case started when the employee had an allowable injury and was medically cleared for light duty. It quickly became apparent he was not motivated to show up for work each day, particularly after he was given light duty as part of his Kept on Salary (KOS) status following a minor surgery. Argumentative outbursts in front of fellow employees led to verbal warnings of insubordination. When the behavior continued, he was placed on administrative leave pending a termination review, and was let go shortly afterward.

To find supporting evidence in support of the employer and the L&I decision, BIAW Litigation and Investigation Manager Alan Gruse traveled to four different cities in eastern Washington to interview numerous employees and to collect the company’s documentation about the termination. The focus was to rein-force L&I’s initial decision that the employee was fired for cause and thus was overpaid benefits.

Fortunately, the employer documented every step in the process well, and they not only avoided an initial claim of industrial insurance discrimination, but also gave R.O.I.I.® Select the ammunition to avoid potentially excessive claim costs. Apparently, the former employee’s counsel knew about the evidence and moved to dismiss the appeal the day prior to hearings, resulting in a successful outcome for the R.O.I.I.® Select group.

SEEKING SUPPORTING EVIDENCECLAIM SPOTLIGHT

EMPLOYER AND CO-WORKERS PROVIDE INVALUABLE DOCUMENTATION

of the Building Industry Association of Clark County.

Like most places in the state, lot and labor shortages are still big hurdles.

In the Vancouver-area, $90,000 is the starting point for a lot. Add in impact fees and other costs, and building an affordable home is not feasible. Harroun, a member of Vancouver’s Affordable Housing Task Force, says affordability is a concern in his area. Builders can only charge so much before local governments step in and impose regulations to “control” rising home prices. Inclusionary housing is an example, which requires a portion of new construction to be affordable by people with low to moderate incomes.

The other issue is labor supply. “There’s a lot of work out there, but with the labor and management shortage, you can only take on so much before it starts to compromise other parts of the work,” Harroun notes. If something comes in that doesn’t seem like a good fit for his company, Harroun will refer the work to someone else, so he stays as efficient as possible.

In 2016, Harroun is cautiously optimistic and planning how to strategically manage the company in coming years.

“We are making decisions that are focused on long-term viability versus immediate survival. For too long, we looked at what we could do to survive today. Now, we’re thinking about how best to grow,” he added.

PART IILook for BIAW’s conversation with

Eastern Washington builders in the February issue.

// INDUSTRY from page 10

BUILDING INSIGHTwww.BIAW.com

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BIAW and its award-winning Education Program is proud to offer members another year of top notch

education class-es and continu-ing education opportunities.

In conjunction with BIAW’s 14 local associa-tions, the Edu-cation Program has become a valuable re-source for both members and

the state’s residential home building community.

BIAW offers a diverse collection of courses in several categories, such

as: business management, marketing, building per-formance, code compliance, stormwater

management, aging-in-place, and, an array of legal and business-related matters. Check out the schedule at right and register for a class with BIAW Education Program Director Amanda Fields at 360-352-7800, ext. 114 or amandaf@biaw. com.

Together, let’s make 2016 the year to get you educated.

CONTINUING EDUCATION IMPROVES LIVELIHOOD, BETTERS EMPLOYEES AND INCREASES BOTTOM LINE

RESOLVE TO GET EDUCATED IN ’162016 EDUCATION SCHEDULE RELEASED

JANUARY6 Certified Erosion & Sediment Control Lead (CESCL) ...................................Bellevue8 Certified Erosion & Sediment Control Lead - RECERTIFICATION .............Bellevue12 Certified New Home Sale Professional (CSP) .................. DEVELOPMENT CENTER13 Construction Contracts & Lien Law ...............................................................Bremerton13 EPA Certified Lead Renovator REFRESHER Training ......................................Olympia13 EPA Certified Lead Safety/Renovation/Repair/Paint ......................................Olympia14 OSHA 10 .......................................................................................................................Bellevue26 EPA Certified Lead Renovator REFRESHER Training .....................................Bellevue26 EPA Certified Lead Safety/Renovation/Repair/Paint .....................................Bellevue27 Certified Erosion & Sediment Control Lead (CESCL) ................................Vancouver28 Construction Management ................................................................................ Burlington29 Certified Erosion & Sediment Control Lead - RECERTIFICATION ..........Vancouver29 Customer Service ..................................................................................................Bremerton

FEBRUARY3 Certified Erosion & Sediment Control Lead (CESCL) ............................... Burlington4 Business Management for Building Professionals ....................................Bremerton4 Construction Contracts & Lien Law .......................................................Port Townsend5 Certified Erosion & Sediment Control Lead - RECERTIFICATION ......... Burlington10 EPA Certified Lead Renovator REFRESHER Training .................................Bremerton10 EPA Certified Lead-Safety/Renovation/Repair/Paint ................................Bremerton11 Renovation Requirements for Asbestos, Mold & Silica ........................... Burlington17 L&I Compliance Safety Training ..........................................................................Bellevue19 Construction Contracts & Lien Law .............................................................. Wenatchee

MARCH2 CAPS 1: Marketing & Communication Strategies ..................................... Burlington2 Certified Erosion & Sediment Control Lead (CESCL) ...............................Bremerton3 CAPS 2: Design/Build Solutions for Aging-in-Place ................................. Burlington4 Business Management for Building Professionals .................................... Burlington4 Certified Erosion & Sediment Control Lead - RECERTIFICATION .........Bremerton9 Construction Contracts & Lien Law ...............................................................Ellensburg9 Project Management ................................................................................................Olympia11 Basics of Building .................................................................................................Bremerton16 How to Profit Using the WSU UA Alternate Worksheet ......................... Bellingham16 Certified New Home Sale Professional (CSP) ..................................................Bellevue16 Construction Contracts & Lien Law ................................................................Vancouver22 EPA Certified Lead Renovator REFRESHER Training .....................................Bellevue22 EPA Certified Lead Safety/Renovation/Repair/Paint .....................................Bellevue23 CAPS 1: Marketing & Communication Strategies ......................................Vancouver24 CAPS 2: Design/Build Solutions for Aging-in-Place ..................................Vancouver24 Green Building for Building Professionals ................................................... Burlington25 Business Management for Building Professionals .....................................Vancouver29 Certified Erosion & Sediment Control Lead (CESCL) ...............................Kennewick29 Universal Design/Build ............................................................................................. Tacoma31 Certified Erosion & Sediment Control Lead - RECERTIFICATION .........Kennewick

// AMANDA FIELDS

EDUCATION PROGRAM DIRECTOR

// EDUCATION SCHEDULE* January - March

*Classes are continually added. Visit BIAW.com for the most up-to-date listings.

13

VOL. 26, ISSUE 1JANUARY ’16

L&I RATES TO INCREASE IN 2016FINAL RATES ANNOUNCED

The Department of Labor and Industries (L&I) announced that it has adopted the proposed 2% average workers’ compen-sation rates for 2016. This rate hike comes after three years of increases and puts a burden on employers, especially as they continue to focus on the recovery of their businesses after the Great Recession.

While most employers understand that inflation is a factor that must be considered when looking at workers’ comp insur-ance rates, increases should be a last resort and adjusted only when every bit of waste and inefficiency has been eliminated at L&I. Based upon the testimony at several hearings around the state, employers do not believe L&I has taken such an approach and that there are substantial cost saving measures that should be put in place before asking employers and workers for more

money. This latest increase

continues a seemingly never-ending trend of rising costs from L&I. While many other states have seen rate decreases over the last several years, Washington’s expensive workers’ compensation system has continued to become even more so.

While the average increase for this coming

year will be 2% over 2015 rates, each individual risk classifica-tion will see their rates increase or decrease based on the loss experience of their classification.

Building Construction and Trades as a category will see an av-erage rate increase of 1%. This translates into an additional $5 per year for the workers’ portion of premiums and an additional $65 per year that employers will pay. However, some construc-tion risk classes will see significantly higher rate increases. For example, Risk Class 0510, Wood Frame Building Construction (Framing), will see an increase of 7% or $116 more per year for workers and $510 more per year for employers.

Efforts by BIAW and other business groups to reform Wash-ington’s expensive and inefficient workers’ compensation monopoly have been thwarted over the years and have resulted in Washington state remaining a national outlier in workers’

compensation costs, average time loss days and other measurements of success.

BIAW will continue to push L&I and the Legisla-ture for common sense reforms that put our state in line with other states and will reduce costs for employers and workers alike.

If you have questions about your 2016 L&I rates please contact R.O.I.I.® Select Underwriter Kyle Maxwell at 360-352-7800, ext. 162 or kylem@biaw.com.

BIAW’s retrospective ratings program, Return On Industrial Insurance (R.O.I.I.®) Select, helps em-ployers who are committed to improving workplace safety. By joining R.O.I.I.® Select and continuing this effort, your company can earn a refund, return-ing some of that hard earned money to you. If you have questions or are interested in receiving more information about R.O.I.I.® Select, please contact R.O.I.I.® Select at 360-352-7800 or enroll@biaw.com.

RATE HIKES FOR WORKERS’ COMP CONTINUES AS BURDEN GROWS ON EMPLOYERS TO COVER COSTS

BIAW will continue to push L&I and the Legislature for com-mon sense reforms that put our state in line with other states and will reduce costs for employers and workers alike.

BUILDING PERMITSWA

// U.S. CENSUS BUREAU STATISTICS

BUILDING INSIGHT

14

BUILDING INSIGHTwww.BIAW.com

NAHB SURVEY: SNAPSHOT OF U.S. HOME BUILDERS

See BUSINESSES on page 15//*Only counties reporting are represented in state totals; N/A = data not available; For archived listings, click on Member Resources tab at BIAW.com.

Recently released NAHB data shows the national average for construction costs of a sin-gle-family home with an average finished area size of 2,802 sq. ft. and a price of $468,318.

The breakdown includes: SITE WORK — build-ing permit fees, impact fees, engineering, and other costs; FOUNDATIONS — excavation, foun-dation, concrete, and retaining walls; EXTERIOR FINISHES — roofing, windows and doors; MAJOR SYSTEMS ROUGH-INS — plumbing, electrical and HVAC; INTERIOR FINISHES — insulation, drywall, interior trim, painting; and FINAL STEPS — landscaping, decks, driveways, etc.

CONSTRUCTION COSTS BREAKDOWN

OCTOBER

Based on the recently released 2012 Economic Census data, new NAHB research shows that residential construc-tion remains the industry of independent entrepreneurs with 81 percent of homebuilders and specialty trade contractors being self-employed independent contractors. Two-thirds of small business homebuilders and three out of four specialty trade contractors generate less than $1 million in total business receipts.

Among homebuilders, multifamily general contractors tend to be largest, with more than 55 percent of companies generating over $1 million and close to 23 percent gener-ating more than $10 million in 2012. Less than 8 percent of for-sale builders and under 2 percent of single-family contractors crossed the $10 million mark in 2012.

Under the most recent US Small Business Administration (SBA) size standards, the vast majority of residential con-struction companies qualify as a small business. The most recent small business size limits for all types of builders is $36.5 million, for land subdivision $27.5 million, and $15

Source: National Association of Home Builders Percentages do not equal 100% due to rounding.

EXTERIOR FINISHES $43,447 or 15%

MAJOR SYSTEMS ROUGH-INS

$37,843 OR 13%

INTERIOR FINISHES $85,642 OR 30%

FRAMING $52,027 OR 18%

SITE WORK $16,092 OR 6%

FOUNDATION $33,447 OR 12%

Single Multi- OCT YTD OCT YTD Family Family 2015 2015 2014 2014 BENTON 83 24 107 967 61 633 CHELAN 22 4 26 307 16 181 CLALLAM 16 0 16 136 8 85 CLARK 218 78 296 2,850 217 2,127 COWLITZ 10 0 10 109 9 95 DOUGLAS 5 0 5 186 10 137 FRANKLIN 32 7 39 358 32 331 GRANT 22 0 22 412 N/A N/A GR. HARBOR 12 0 12 147 10 57 ISLAND 19 0 19 234 15 159 JEFFERSON 7 0 7 138 11 67 KING 320 722 1,042 16,364 1,132 12,041 KITSAP 63 4 67 775 33 297 KITTITAS 20 0 20 242 15 176 KLICKITAT 6 0 6 98 N/A N/A LEWIS 17 0 17 100 10 150 LINCOLN 4 0 4 31 N/A N/A MASON 9 0 9 106 10 97 OKANOGAN 11 0 11 113 20 120 PACIFIC 5 0 5 53 385 3,418 PIERCE 196 99 295 2,513 385 3,418 SAN JUAN 8 0 8 91 9 87 SKAGIT 27 0 27 307 20 209 SKAMANIA 1 0 1 40 2 33 SNOHOMISH 238 111 349 2,920 383 2,920 SPOKANE 130 47 177 2,356 141 909 STEVENS 7 0 7 59 0 3 THURSTON 68 0 68 848 42 683 WALLA WALLA 13 0 13 129 5 62 WHATCOM 63 65 128 1,011 98 540 WHITMAN 8 54 62 142 9 187 YAKIMA 32 0 32 277 7 106 WA STATE* 1,698 1,211 2,913 34,462 2,710 25,911

CONSTRUCTION

COSTS

SALES PRICE BREAKDOWN[A] Lot, financing, overhead, mar-keting, commission, profit ................................ $178,903 CONSTRUCTION COSTS BREAKDOWN [B] Site work, foundation, framing, exterior finishes, major systems rough-ins, interior finishes, final steps, other ..................... $289,415TOTAL SALES PRICE[A]+[B] ............................ $468,318

OTHER $2,894 OR 1%FINAL STEPS

$19,567 OR 7%

MAJORITY IN HOME BUILDING INDUSTRY ARE SMALL BUSINESSES

PENDING LISTINGS SALES CLOSED SALES New Active Active % Chg. NOV % Chg. No. Median % Change, Mths. of NOV ’15 NOV ’15 NOV ’14 v. 8/14 2015 v. 10/14 Closed Sale Price Median Price Inventory

CHELAN 51 276 260 6% 51 34% 41 $244,000 11% 6.73CLALLAM 38 251 322 -22% 48 0 50 $240,750 11% 5.02CLARK 23 84 164 -49% 26 -49% 45 $269,000 2% 1.87COWLITZ 88 313 463 -32% 123 13% 100 $173,500 2% 3.13DOUGLAS 30 94 113 -17% 31 63% 21 $242,000 10% 4.48FERRY 5 57 68 -16% 5 150% 2 $140,750 -17% 28.50GRANT 50 388 473 -18% 58 -5% 69 $165,000 2% 5.62GR. HARBOR 95 548 646 -15% 96 12% 67 $139,500 3% 8.18ISLAND 80 410 555 -26% 122 6% 127 $290,000 7% 3.23JEFFERSON 40 255 396 -36% 49 4% 42 $259,750 -2% 6.07KING 1,796 2,917 4,630 -37% 2,748 2% 2,280 $432,000 8% 1.28KITSAP 262 768 1,086 -29% 367 7% 299 $259,000 6% 2.57KITTITAS 46 316 438 -28% 71 73% 54 $222,245 -1% 5.85LEWIS 76 430 611 -30% 113 38% 68 $133,000 -16% 6.32MASON 66 411 517 -21% 67 -11% 68 $183,950 -2% 6.04OKANOGAN 30 362 423 -14% 28 -13% 26 $158,750 -4% 13.92PACIFIC 33 269 348 -23% 43 95% 30 $166,500 28% 8.97PIERCE 979 2,635 3,385 -22% 1,281 11% 963 $245,000 8% 2.74SAN JUAN 21 313 328 -5% 18 -33% 29 $460,000 14% 10.79SKAGIT 109 517 587 -12% 150 -4% 137 $268,000 18% 3.77SNOHOMISH 810 1,735 2,474 -30% 1,307 27% 973 $329,638 5% 1.78THURSTON 296 944 1,143 -17% 381 26% 274 $235,975 1% 3.45WHATCOM 217 857 1,203 -29% 310 16% 214 $280,500 6% 4.00OTHERS 27 177 231 -23% 18 0 20 $166,850 9% 8.85TOTAL 5,268 15,327 20,864 -27% 7,511 10% 5,999 $308,000 7% 2.55

HOME SALESWA

With a Fed rate hike a forgone conclu-sion, the next three issues of concern are: how gradually will the Fed raise rates, when does the Fed stop reinvest-ing interest and principal from their $4 trillion portfolio of Treasuries and agency debt (Fannie and Freddie), and, last but not least, do we return to a zero fed funds rate in a future recession? The answers: very slowly, July and yes!

—Elliott F. Eisenberg, Ph.D. GraphsandLaughs, LLC

www.econ70.com

SINGLE FAMILY AND CONDOS NORTHWEST MULTIPLE LISTING SERVICE

MARKET ACTIVITY SUMMARY - NOVEMBER 2015

15

Source: Northwest Multiple Listing Service

JANUARY ’16VOL. 26, ISSUE 1

BUSINESSES from page 14//

FED FUTURES

million for specialty trade contractors. Based on the standards, almost all remod-elers and at least 96 percent of homebuilders, 94 percent of land developers, and 97 percent of specialty trade contractors qualify as a small business.

In the case of single–fam-ily general contractors and speculative builders, sub-contractors account for more than a third (36 percent) of the total construction reve-nue. Specialty trade contrac-tors subcontract out only 10 percent of the work.

In terms of payroll, sin-gle-family general contrac-tors on average have four employees on their payroll, with only three directly engaged in home building. Non-construction workers in-clude supervisory employees above the working foreman level, in addition to executive, accounting and other profes-sional employees in routine office functions.

Speculative builders’ payrolls average under six workers over the course of a year with close to two-thirds being non-construc-tion workers. Specialty trade contractors maintain large annual payrolls, averaging more than 9 workers over the course of the year. Specialty trade contractors also stand out for reporting the highest share of construction workers, with three out of four payroll workers working in construc-tion. Residential remodelers average less than four work-ers on their payrolls.

Source: NAHB’s Eye on Housing,

December 2015

Building Industry Association of Washington111 21st Avenue SW • Olympia, WA 98501360-352-7800 • Fax: 360-352-7801 800-228-4229 • BIAW.com

NOTICE TO MEMBERS

ACCESSIBLE HOUSING COUNCIL

TRADE SHOW

LEGISLATIVE RECEPTION

Meet local manufacturers, suppliers and service providers

and hear one-on-one discussions and demonstrations

of products.

Tuesday, February 23 11 a.m -2 p.m.

Free to BIAW members and guests.

Join us for the annual BIAW Legislative Reception. Here’s your chance to meet new faces as well as the established leadership in

Olympia. Come meet and greet your lawmakers, converse with them one-on-one and let them know how their votes and policy decisions impact you,

your employees and your business.

Tuesday, Feb. 23, 7 p.m. | Free to BIAW members and guests

A block of rooms are being held until January 22 at the Red Lion Hotel, Olympia. Reserve your room directly with the hotel at 800-RED-LION and mention you’re with BIAW to receive the $113 single/double or $127 triple room rate.

DON’T MISS EVENTS GENERAL MEMBERSHIP LUNCHEONAll BIAW members and guests are invited to attend the

BIAW general membership luncheon. A special guest speaker will address attendees

with time for Q&As. Tuesday, February 23, 11:30 a.m.

$20 per personPlease RSVP to your local association by Feb. 12

NEW FED ID STANDARDS COMING TO WA

SAVE THE DATE!BIAW Winter Board Meeting • Feb. 22-24 • Red Lion Hotel, Olympia

COMMUNICATIONS WORKSHOP Part. 2Adding Videos To Your

WebsiteJoin marketing professional

Michael Hartzell as he shows you in a few quick steps how to turn

ho-hum websites into cool and hip just by adding video and music.

Monday, February 2211 a.m. - 1 p.m.

Free to BIAW members and guests.

BIAW is not a licensed insurance broker or agent. In referring the user to an insurance company or licensed agent, BIAW is not selling insurance or providing coverage advice or counsel relative to coverage.

BIAW does not solicit, take, or process insurance applications, nor does it negotiate or execute insurance contracts. For policy questions, or to obtain insurance, please contact a licensed member agent or broker.

BIAW is paid an advertising fee by the participating insurers.

BIAW’s Building Industry Insurance Program (BiiP) member insurance agents and program representatives can offer BIAW members competitive rates on products designed specifi-cally for the building industry: builder’s risk,

general liability, builders warranty and structural warranty.

See how they can help you at BIAW.com or contact Karen Hall at (360) 352-7800, ext. 137.

BIAW’s Building Industry Insurance Program — another great member benefit.

Are you building the American Dream?

BiiP Management Companies

The Department of Homeland Security (DHS) has announced it may no longer accept standard Washington state driver licenses and ID cards (without a second federally approved ID) for domestic commer-cial flights in 2016. However, at this time, no date has been announced. BIAW wants members to be aware of this expected change. DHS intends to accept the following IDs for travel:

WASHINGTON STATE ENHANCED DRIVER LICENSES and ENHANCED ID CARDS as well as passports and other federally-approved IDs.

For more on this change, access the Washington State Department of Licensing’s website at www.dol.wa.gov.