This Week's Codes And Standards, May 22

Industry groups urge the government to improve labor shortage, buyers are interested in sustainable home features, and the middle class is being priced out of the real estate market

By Peter Fabris, Contributing Editor | May 22, 2017

Amid labor shortage, industry groups urge government action to boost trades

Although the number of construction jobs rose last month to the highest level in the past decade, a shortage of qualified workers likely limited the number of new jobs, according to the Associated General Contractors of America. The AGC and other trade groups urged Congress and the Trump administration to increase funding and provide more flexibility for the Perkins Act, which provides federal funds for career and technical education. They also made a plea for state and local leaders to make it easier for construction firms and local associations to set up regional recruiting and training programs.

Construction labor shortages are worsening in many parts of the country after years of under-investment in career and technical education programs, according to industry groups. Construction employment reached 6,877,000 in April, up 5,000 from March, and up 173,000 or 2.6 percent from a year ago.

The year-over-year growth rate almost doubled the 1.6 percent increase in total nonfarm payroll employment, according to an AGC economist.

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Affordable housing initiative drives surge in residential unit permits in New York City

New York officials credit a first-quarter surge in residential unit permits in the first quarter to a property tax-break program for developers. Along with a strong economy, the Affordable New York initiative helped triple New York City’s residential permits compared with the same period in 2016. The permits account for 6,343 units, which is the largest number since 2007.

The property tax-break was included in April's state budget, but Gov. Andrew Cuomo announced in January that the benefits would be retroactive to the beginning of 2017. The Affordable New York initiative is the successor to the 421-a tax credit program.

The new initiative applies to certain areas of the city, and sets minimum wage levels for qualifying projects. It offers tax breaks to developers who build projects of 300 units or more in certain areas of Manhattan, Brooklyn, and Queens.

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Realtors see growing interest in sustainable home features

Real estate agents are noting an increase by clients in the sustainable features of homes. Some 56% of realtors say that their clients are at least somewhat interested in sustainability practices, and 61% say they are comfortable answering clients’ questions about home performance. Point of sale presents a great opportunity to complete energy upgrades and bring a new level of investment in residential energy efficiency, according to an expert who trains realtors on home sustainability.

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Real estate industry is ignoring the Middle Class

With land values high in many desirable areas, real estate developers are focused on serving the wealthy and are ignoring the needs of the Middle Class, according to an article on the Canadian web site The Tyee. “Housing has become so expensive in cities like Vancouver, San Francisco, and New York that the industry has amended its definition of ‘affordable,’” the article says. When the majority of the market can’t afford your product, this can become a big problem for the industry, it says.

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Homeowners in states with legalized pot should beware of legal risks

Nearly 30 states will soon have laws on the books that allow for the legal use of marijuana—at least for medical purposes. Some also have made pot legal for recreational use. But because the federal government still considers growing your own pot plants illegal, homeowners can face legal risks in real estate transactions. For example, if a buyer adds a clause to a purchase and sale agreement to include an existing hydroponic grow room in the transaction, they could be found in default of the mortgage for conducting an illegal activity in the home. Sellers should shut down marijuana-growing operations when they put their home on the market, experts advise.

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