BUILDING INSIGHT

2 BUILDING INSIGHT www.biaw.com

//BUILDING INSIGHT WWW.BIAW.COM 3 CONTENTS // // CALL FOR ENTRIES: TRIBUTE! AWARDS 2 // LOCAL HAPPENINGS 7 PRESIDENT S PERSPECTIVE September Snapshot Recruitment drive, IBS sign ups and NAHB happenings 4 // PRIMARY UPDATE, POLICY GOALS 5 // EARN YOUR CSP 12 // LEGAL UPDATE: BREAK PAY CLARIFIED 13 // REASONABLE REBATES 16 EVP VIEWPOINT Regulation Happy Pt. 2 State s housing demands require outside-the-box solutions 6 MARKET DATA Building permits, NWMLS home sales 14-15 On the cover: Comment deadline nears on the draft codes for the International Residential, Washington State Energy and International Fire Codes. Who We Are The Building Industry Association of Washington is the state s largest trade association and represents nearly 8,000 member companies in the home building 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. 2015 Senior Officers President Monty Smith, CAPS, CGR BIA of Whatcom County Skagit/Island Counties Builders Association First Vice President Dave Main MBA of King & Snohomish Counties Skagit/Island Counties Builders Association Second Vice President Patrick Hayes Skagit/Island Counties Builders Association MBA of King & Snohomish Counties Treasurer Ted Clifton, CGB, CGP, MCGP Skagit/Island Counties Builders Association BIA of Whatcom County Secretary Myra Williams MBA of King & Snohomish Counties Immediate Past President Bob Johnson, CAPS, CGP Skagit/Island Counties Builders Association BIAW Staff Executive Vice President Art Castle Administrative Services Director Jan Rohila Director of Insurance Programs Frank Romero Government Affairs Director Jan Himebaugh Building Insight questions/comments: Communications and Public Relations Director Jennifer Hayes Building Industry Association of WA 111 21st Avenue SW Olympia, WA 98501 360-352-7800 360-352-7801 (f) BIAW.com SEPTEMBER 15 VOL. 25, ISSUE 9

4 PRESIDENT S PERSPECTIVE SEPTEMBER SNAPSHOT RECRUITMENT DRIVE, IBS SIGN UPS AND NAHB BOARD HAPPENINGS // MONTY SMITH CAPS, CGR PRESIDENT In our industry lately, there seem to be more detours and potholes between Point A and Point B. With regulatory changes, financing restrictions, land scarcities, and labor shortages, it takes longer to get from one point to the other. In any case, we still push forward. I m proud to be part of this hard-working industry and all of those that contribute to making the road a little easier. Over the year, as BIAW President, I ve attended local association membership events and board meetings across the state and learned about our members struggles and successes. My goal over the year has been to listen to feedback, hear concerns, and recognize local associations and members. I ll continue to make an effort to visit local associations across the state and hear the war stories and the highlights from the year. Upcoming soon is the National Association of Home Builders (NAHB) International Builders Show (IBS) in Las Vegas, taking place in early January. Registration opened September 1, and there s an early bird registration rate for members. I ve attended the IBS three years in a row, and it s an opportunity to learn about recent products, the latest advances and new information to pass along to customers. The conversations with trade show representatives make it relatively straightforward to distinguish which are the best products and services and which ones to avoid. Check out the back page for more details on IBS. Also in September is registration for NAHB s Fall Membership Drive. If local associations sign up by September 30, members can earn double or triple Spike credits if they recruit new members during the drive in October. I strongly believe in the value of membership to help individual home builders and to defend the industry as a whole. Find out more about NAHB s membership drive at www.nahb.org/2015membershipdrive. Finally, there are many advantages to being part of NAHB. Still, at times, there can be disagreements. In late July, BIAW s senior officers learned NAHB was fast-tracking a new affinity health insurance program for an approval vote by NAHB s Executive Board in less than two weeks. Through different circles, details began to trickle out including that the health insurance programs would have high deductibles and low benefits, marketing would likely take place directly to members, and revenues would be marginal for local and state associations and would compete with health insurance programs they may already have or confuse members. BIAW s NAHB State Rep. Patrick McBride, NAHB Membership Vice Chair Sherry Schwab, NAHB Budget and Finance Rep. Bob Camp and I rushed to attend the NAHB I m proud to be part of this hard-working industry and all of those that contribute to making the road a little easier. Executive Board meeting in Washington, D.C. I presented our concerns and ultimately the Executive Board amended to delay a vote until the NAHB Fall Board meeting in Dallas on Sept. 26-29. I highly recommend local associations NAHB Directors attend in order to support this very important issue. While the proposal has moved forward at record speed, what it does show is that it s hard to find good quality, bonafide health insurance programs like BIAW s. The BIAW health insurance program provides high-quality health care choices, making our program one of the best options in the state. I want to give a special thanks to Executive Officers Jeff Losey of HBA of Tri-Cities and Joel White of Spokane HBA. As members of NAHB s Executive Officers Council, they shared information on the affinity health insurance program. Without their quick action, the proposal would have moved forward without further discussion, impacting BIAW members. As the fall season begins, it s the lead up to the end of the year. The 2016 Senior Officers will be installed during the BIAW Fall board meeting in Bellevue on Nov. 4-6. I ll share more information about the upcoming meeting in my October column. BUILDING INSIGHT www.biaw.com

5 NEXT UP: GENERAL ELECTION PRIMARY UPDATE, POLICY GOALS NOVEMBER ELECTION COULD CHANGE MAKEUP OF HOUSE, WORK CONTINUES ON VITAL BUILDER ISSUES // JAN HIMEBAUGH GOVERNMENT AFFAIRS DIRECTOR Statewide, total voter turnout for the August 4 primary election was barely over 24%. Besides various local elections, two legislative House races were up due to a death and resignation. Newcomer, Republican Terri Hickel in the 30th District is beating the appointed Democrat and former state teacher s labor union president, Carol Gregory, with over 51% of the vote. Both local builders associations Master Builders Association of Pierce County and Master Builders Association of King & Snohomish Counties endorsed Republican Hickel. In the Eastern Washington 9th Legislative District, the Washington Affordable Housing Council endorsed and appointed Representative Mary Dye (R-Pomeroy) who came out on top of the three-way primary with over 48% and will face another Republican in November. If Hickel wins in the 30th District, and with Republican Dye sure to hold the 9th District, the political makeup of the House will continue to shift and create broader tension for House Democrats. Tension was already clear in 2015 as House Democrats failed to bring to votes any number of key legislative objectives, including a capital gains income tax or cap & trade. No doubt the 30th District election contest will be very expensive. While elections are going on, BIAW is not sitting idle on policy. Various member workgroups have been, and will continue, working to develop policy goals on a variety of issues to impact home builders (see boxes at right). If you have any interest in any of these topics, or any others, please contact BIAW Government Affairs Director Jan Himebaugh at 360-352-7800, ext 135. BIAW POLICY GOALS IN PROGRESS Solutions to the Growth Management Act (GMA) Examining and looking for solutions for increasing land supply, from urban densities to Urban Growth Area (UGA) adjustments. How do we get to available land in areas within UGAs that do not want development? How do we get jurisdictions to comply with all the goals of GMA? Uniform Common Interest Ownership Act Last legislative session, BIAW opposed a bill that contained language correcting common ownership creation, liability, and various other items. As BIAW has made clear through the Washington State Bar Association, this model act still contains major red flags, including warranties. BIAW has convened a workgroup made up of attorneys, insurance professionals and builders to look at what fixes really need to happen so that we can propose or oppose future legislation that will implement a warranty for home builders. Vesting Rules should not change in the middle of the game, especially in home building a recent court decision calls into question the long standing common law doctrine of vesting. BIAW is looking at ways to clarify the vesting laws members have so long relied upon. Independent Contractor Seven Part Test Washington law has an incredibly onerous standard for who qualifies as a true independent contractor. BIAW generals and subcontractors who are legitimately keeping separate books and operate separate businesses may still not meet the requirements, especially since enforcement can change based on which Department of Labor & Industries employees are auditing the books. It is time to protect legitimate subcontractors and generals and fix the law to clearly identify what qualifies as an independent contractor. SEPTEMBER 15 VOL. 25, ISSUE 9

6 EVP VIEWPOINT REGULATION HAPPY PT. 2 STATE S HOUSING DEMANDS REQUIRE OUTSIDE-OF-THE BOX SOLUTIONS // ART CASTLE EXECUTIVE VICE PRESIDENT Last month in Part 1, I talked about the history of zoning and the beginning of what I call the regulatory expansion era. This month, Part 2 will discuss some simple and not-so-simple solutions that could assist the marketplace where well intentioned regulations have not and cannot. But first, I must mention a couple of other housing regulation ideas, which while popular, are misdirected. Rent control is again a hot topic in Seattle. If the state s Legislature changes the law forbidding it, Seattle will jump at what they believe is a positive opportunity. The rent control experiment in cities across the country has not really solved the problem. While the regulation or law may temporarily limit rent increases it also incentivizes rental units becoming owner-occupied units while the few remaining rental units deteriorate and few new rentals get built. Rent control is a reaction to housing scarcity driven appreciation. If the regulatory environment had not artificially limited supply in the first place, it never would be an issue. In growing communities that have intentionally limited supply of new housing, another issue lobbed about is affordable housing. What they actually mean is subsidized housing. As regulated scarcity drives prices and rents higher, fewer existing residents and the less affluent can afford to live in their communities, thus a shrill demand for affordable/subsidized units is attempted. Another more recent regulatory tool used in the attempt to address the lack of subsidized affordable housing is inclusionary zoning or similar inclusionary schemes. Inclusionary zoning sets aside a given share of new construction so people with low to moderate incomes are able to afford housing. Ironically, it s only communities with exclusionary policies that consider inclusionary schemes. While it is the intentional limiting of supply that causes the problem of a lack of affordability, new housing is blamed as the culprit thus a new way to tax new construction was created. Just require the developer or builder to have some percentage of the units or homes in a project be affordable (subsidized) goes the thinking and limit the rent and/or resale price. Unfortunately for these housing masterminds, economic principles do not change just because they want them to change. While it may artificially create a few units, the economic dislocation more than offsets any benefit. So are there any solutions that could actually work? Making housing more affordable and available? The answer is one word: SUPPLY. All of my suggestions are pretty simple some may be more politically difficult than others. Some are already doable, only limited by regulations, requirements and ideology. What would happen to housing prices and rents if there were twice the number of homes and apartments available than the number of people who wanted housing? How would that affect the cost of a home and rent? Scarcity is the primary cause of runaway housing prices and rent increases. How about allowing, even encouraging, existing homeowners to be able to rent out a room in their home or over their garage the so-called mother-in-law units? It would provide the homeowner an additional source of income to help their retirement or a young couple to help make a mortgage payment. And it would provide substantial new housing opportunities for less rent. Or, how about allowing Accessory Dwelling Units (ADU) a small unit in the backyard, for example? ADUs are another solution that would require both the allowance and reasonable regulations to add more new housing choices to a community. Allowing increased flexibility in density and building scale, lot coverage and height are other options there are a lot of aspects in land use and building codes that restrict these kinds of creative market solutions. Yet, permitting duplexes and even tri-plexes in See REGULATION on page 7// BUILDING INSIGHT www.biaw.com

7 REGULATION from page 6// single-family zoned areas, for instance, can be another simple answer to the scarcity problem. And more density does not always mean building vertical; creative site planning can easily garner 10-12 or more units an acre. Requirements that deal with building scale, lot coverage and building height should be tools to increase housing supply, not to limit them, to protect neighborhoods. An increase of housing of all types, styles and prices should be encouraged so people have choices, and hopefully choices closer to work. Lastly, in Washington s GMA world, the politics make it difficult to expand urban growth areas (UGA) to create new housing stock. Why? Some planned expansion over time would ensure an added supply of land for housing. GMA is not just about protecting the environment and neighborhoods. It is also about providing a wide range of housing options and choices. There are essentially two types of land to develop housing in urban Washington new development and redevelopment. Redevelopment and the future urban centers will be the housing choice for a few, but new single family housing and other less intense development than centers will be the choice of many more. My article highlights a few of the tools available to allow the marketplace to supply adequate and affordable housing to the residents of Washington and in our urban areas. All these tools and more need to be used to encourage supply, and to resist the popular impulse to fix a regulatory-induced problem with another regulation. As history proves, it just doesn t work. A C E LOCAL HAPPENINGS LOCAL ASSOCIATION EVENTS AND GATHERINGS [A] HBA of Kitsap County ladies golf team division winners show off their disco-themed attire during the annual Builders Classic golf tournament. [B] HBA of Kitsap County Remodelers and guests enjoy camaraderie during the Summer Sizzlin social under the big top. [C] MBA of King and Snohomish Counties members watch the horses race during the second annual Spike recognition party at Emerald Downs. [D] Spokane HBA members gather and check out classic cars during the Hot August Nights member mixer. [E] Jefferson County Builders Association member Anna Nasset receives her R.O.I.I. Select refund check from BIAW Director of Insurance Programs Frank Romero (l) and R.O.I.I. Select Field Representative Mark Shaffer during the Bratwurst on the Beach event. [F] BIA of Clark County members listen to local lawmakers as they review the 2015 legislative session during the annual Legislative Review Luncheon. [G] Olympia Master Builders member Stuart Drebick avoids a dunk as John Erwin s throw just misses outside. The dunk tank event raised over $1,900 towards OMB s education scholarship fund. B F D G SEPTEMBER 15 VOL. 25, ISSUE 9

8 BIAW MEMBERS: CALL TO ACTION CODE ADOPTION IN FINAL PHASE LAST CHANCE FOR PUBLIC COMMENTS ON PROPOSED CODE AMENDMENTS As the state enters the final phase of the code adoption process, it s important interested parties (that would be YOU) voice your thoughts, concerns and opinions regarding all the proposed draft codes. You can do this by attending one of the scheduled public hearings, via email, or contacting BIAW Government Affairs and Codes Coordinator Al Audette or BIAW // JAN ROHILA ADMINISTRATIVE SERVICES DIRECTOR // AL AUDETTE GOVERNMENT AFFAIRS AND CODES COORDINATOR Administrative Services Director Jan Rohila. The complete list and contact information can be found at the right. After the public hearings, the State Building Code Council (SBCC) considers all revisions, proposals and comments before approving the draft codes. Each code s final version must be submitted to the Code Reviser by December 31, 2015. The new codes are typically adopted 90 days following the end of the legislative session, which is about July 1 of next year. While the topics can be dry, it s important to review the proposed code changes, their impacts and what comments you may want to contribute. The list of the most significant changes are below: WASHINGTON STATE ENERGY CODE It comes as no surprise to builders that the most costly changes proposed this cycle are to the WA State Energy Code. Where? In the number of pick-list credits required. u Prescriptive Based Compliance The draft code includes an increase to the number of mandatory energy credits needed from the pick list under Chapter R406. However, there are two options presented, and it will depend largely on public comment, which is selected by the SBCC. 1. The Department of Commerce presented the following: 2.5 for a small dwelling unit (under 1,500 sq. ft.) and additions between 500 and 1,500 square feet, up from the current.5 DEADLINE TO PROVIDE PUBLIC COMMENTS: OCTOBER 23, 2015 BIAW members are encouraged to offer public comment to the State Building Code Council (SBCC) by: WRITTEN TESTIMONY Mail comments to: SBCC, P.O. Box 41449, Olympia, WA 98504-1449 EMAIL SBCC@GA.WA.GOV IN PERSON AT SBCC MEETINGS September 11: Spokane Fire Department Training Center October 16: Department of Enterprise Services Building, Olympia VIA BIAW REPRESENTATIVES AT 360-352-7800 Al Audette, ext. 161 or ala@biaw.com Jan Rohila, ext. 101 or janr@biaw.com BIAW will deliver your comments to the SBCC on your behalf. 3.5 for medium dwelling unit, up from the current 1.5 4.5 credits for a large dwelling unit (over 5,000 sq. ft.), up from the current 4.5 0.5 credit for additions less than 500 square feet 2. Alternative presented by BIAW. BIAW proposes a 60% increase in each of the categories. The largest dwelling size would move from 2.5 to 4.0; medium dwelling size would move from 1.5 to 2.5; and the small dwelling size would move from.5 to 1. This distribution would place the cost of the requirements more in line with the construction cost of the dwelling unit and average a 1.0 credit increase for the chapter. What you can do: If you use the prescriptive path for energy code compliance and prefer a 1.0 credit increase over the 2.0 credit increase, you should provide public comment. u Performance-Based Compliance The draft code includes a reduction of the comparison percentages under R405.3 for performance-based compliance: From 97 to 80 percent for less than 1,500 sq. ft. BUILDING INSIGHT www.biaw.com

9 From 89 to 72 percent for 1,500 to 5,000 sq. ft. From 83 to 66 percent over 5,000 sq. ft. What you can do: If you use the performance path for energy code compliance and feel these changes are not reasonable or cost-effective, you should provide public comment. u Installation of Electric Resistance Heating If you install electric resistance heating, a new Section (R403.7.1) will mandate installation of a ductless minisplit heat pump (DHP) in the largest heating zone in all new single family and townhouses, unless the capacity is a 2kW/dwelling unit or less. While remaining in the Chapter 406 pick list, (allowing the builder to still claim the install as an energy credit) this new requirement will add at least $2,800 depending on the location and system size to the cost of construction and does not appear to be a cost-effective proposal. BIAW is not opposed to the use of a DHP but against the mandatory installation as called for in the draft code. The market and builder need to decide when to use this type of equipment and when it is not advantageous. What you can do: If you use this type of heating, you might consider providing public comment on the cost effectiveness of this mandate. 2015 INTERNATIONAL RESIDENTIAL CODE (IRC) There are many changes proposed to the 2015 IRC. Below are highlights of a select few. u Residential Sprinklers There were two residential sprinkler proposals denied at the Technical Advisory Group (TAG) level but brought forward by the chair of the council. Only one made it into the final rulemaking document. This proposal requires all newly constructed townhomes to include an automatic fire sprinkler system, regardless of height or area. What you can do: If you build townhomes that are currently exempt from requiring sprinklers, you may want to consider offering public comment. u New Definitions There are several new definitions, including: Conditioned Space which is an area, room or space that is enclosed within the building thermal envelope and that is directly or indirectly heated or cooled. Spaces are indirectly heated or cooled where they communicate through openings with conditioned spaces, where they are separated from conditioned spaces by uninsulated walls, floors or ceilings, or where they contain uninsulated ducts, piping or other sources of heating or cooling. Salt Water Coastal Area definition will now be determined by local jurisdiction. The original proposal was fought by both the commercial and residential builders because it included areas within 15 miles of the Columbia River and Puget Sound. Depending on the interpretation, the entire Hood Canal could have been impacted as well. What you can do: Review the definitions and consider providing public comment. u Pools, Decks, Etc. Several tables were combined or eliminated. What you can do: The largest revamp is in Deck requirements, which can be reviewed in sections R507.1-R507.8 of the 2015 IRC. If you build pools, there is a new section (51-51-0329) filled with new requirements and guidelines. Sections M2301 through M2302 dealing with photovoltaic panels, heat exchangers and solar thermal systems is almost completely rewritten and should be reviewed if you design or install these types of systems. 2015 INTERNATIONAL FIRE CODE (IFC) The IFC review process was dominated by provisions relating to marijuana extraction facilities. These provisions can be found under WAC 51-54A-0105 section 105.6.4.9. However, there were new requirements and sections added or reorganized: u Fire Code Proposals Many carbon monoxide detection guidelines were moved to a new section. A new section was introduced for emergency preparedness provisions. If you build R2 occupancy dwellings, you should read the new requirements which include fire evacuation plans for assisted living and residential care facilities. A new section was added to cover installation and placement of decorative open flame tables. Significant changes were made to solar photovoltaic systems. If you are involved in this industry, review Chapters 605.11 through 605.12 of the IFC. What you can do: Although most of the fire code revisions pertain to commercial applications, if you are involved in solar installations, build assisted living dwellings (R-2) or install automatic fire sprinkler systems, consider giving public testimony. 2015 INTERNATIONAL MECHANICAL CODE (IMC) Reorganization of Chapter 4 of the 2015 IMC may cause confusion. For example: Washington State residential ventilation provisions were left as Section 403.8, presumably for convenience. See CODE ADOPTION on page 14// SEPTEMBER 15 VOL. 25, ISSUE 9

10 NEWSLETTER R.O.I.I. SELECT MAKE REAL CHANGE R.O.I.I. SELECT STAFF (360) 352-7800 Frank Romero...x134 Director of Insurance Programs Jenn Kavanaugh...x123 Administrative Services Director Kristeen Johnson...x119 Director of Risk Management Jessica Matriotti...x132 Enrollment Coordinator Bob White...x109 Safety Services Director Lara Hastings...x171 Marketing Manager Kyle Maxwell...x162 Underwriter Mark Shaffer...x111 Field Representative Laura Poyer...x164 Field Representative Alan Gruse, JD...x144 Litigation and Investigations Manager CLAIM ASSISTANCE Match the FIRST LETTER of your company with the claim person below: A, J, O, R...Ben Bower... x117 B, D, G... Ryan Legaspi... x121 C, F, L, U, X... Linsey Bailey... x141 E, H, W...Chloe Kaufman... x118 I, K, M, Q, Y, Z, #s...amy Sutton... x127 N, P, T...Dave Ducey... x131 S, V...LJ Jensen... x122 MSC DIRECTORS Audrey Borders; Ted Clifton, Vice Chair; Patrick Hayes; Bob Kagy, Secretary; Dave Main, Treasurer; Kevin Patrick; Dick Rokes, Chair; Monty Smith; and Rob Stewart SPOTLIGHT ON CLAIM INVESTIGATIONS CLOSING CLAIMS QUICKLY AND EFFICIENTLY BY ALTERNATIVE METHODS This month, R.O.I.I. Select is launching a new feature about the behind-thescenes legal responses and investigations that proactively help keep R.O.I.I. Select claim costs low and aid in increasing the groups refunds. Look for new developments each month in this section of Building Insight. REVIEW FINDS SUSPECT CLAIM While there are legitimate claims in industrial insurance, unfortunately there are also cases that come up as suspect. One of those special cases came across the desk of R.O.I.I. Select Litigations and Investigations Manager Alan Gruse after a review by a R.O.I.I. Select claim manager. One particular R.O.I.I. Select member participant had a suspect claim, requiring a private investigator to explore the case in more detail. SURVEILLANCE VIDEO EVIDENCE Surveillance footage of the employee showed he had more mobility than R.O.I.I. SELECT REQUIREMENTS DID YOU KNOW? ALL PARTICIPANTS ARE REQUIRED TO COMPLY WITH: See CLAIM INVESTIGATIONS on page 11// Pay 30 Days of KEPT ON SALARY// All employer participants of R.O.I.I. Select are required to pay up to 30 working days of Kept on Salary (full wages) for any injured employee who has been restricted from all work by their doctor or hasn t returned to work in a light-duty capacity. Offer MODIFIED DUTY// Employer participants are required to offer modified duty to an injured worker if they are unable to return to their normal job. Complete UNDERWRITING SURVEY// If you re not sure if you have completed the survey or would like to get started, contact R.O.I.I. Select Underwriter Kyle Maxwell. Attend ABCs OF CLAIM MANAGEMENT CLASS// To register for a class, please contact R.O.I.I. Select Enrollment Coordinator Jessica Matriotti. ABCs of Management Class Schedule Go to R.O.I.I. Select under the BIAW Programs tab at www.biaw.com to check for upcoming classes. BUILDING INSIGHT www.biaw.com

11 CLAIM INVESTIGATIONS from page 10// R.O.I.I. SELECT TEAM MEMBERS SEASONED VETERANS MEET R.O.I.I. SELECT S NEWEST STAFF MEMBERS he was reporting to his doctor. The attending physician watched the surveillance video, and agreed that her patient was reporting more severe injury problems than what appeared in the video. WORKER BACK ON THE JOB, NO ADDITIONAL PAYMENTS As a result, the doctor stopped time-loss benefits, released the claimant back to his workplace and noted the claim could be closed with no award for permanent injury. REFUND REQUESTED, CLAIM CLOSED Armed with the investigator s evidence, a request was made to the Department of Labor & Industries to issue the appropriate orders, including a refund for an overpayment of benefits. Moving the employee back to work and closing the claim resulted in no additional claim payments. GROUP SAVES $$$, WIN-WIN FOR EVERYONE The further investigation of this suspect case, and other ones like it, will save hundreds of thousands of dollars for R.O.I.I. Select member participants and the group each year. R.O.I.I. Select is focused on reducing the financial burden on employer participants and improving performance by using proven strategies and techniques for claims management and resolution. Get to know the people behind the scenes of R.O.I.I. Select who are focused on building the best retro program in the state. ALAN GRUSE Alan Gruse joined BIAW as R.O.I.I. Select Litigation and Investigations Manager in June. Gruse is responsible for negotiating and settling legal disputes with the Department of Labor and Industries (L&I) and conducting claim investigations. Previously, Gruse worked for L&I more than 13 years, and most recently served as one of only three Fraud Adjudicators in L&I s Investigation Division. In that role, he returned to employer s accounts more than $11 million in wrongfully obtained worker benefits. Gruse also worked for a law firm in Tacoma doing // ALAN GRUSE R.O.I.I. SELECT LITIGATION AND INVESTIGATIONS MANAGER personal injury and criminal defense work and was an investigator for a public defender s office in Colorado. Gruse brings a unique perspective to R.O.I.I. Select. Having worked in L&I s fraud unit for many years, Gruse has first-hand experience investigating claimant fraud and determining what the legal standards are for establishing and successfully prosecuting claimant fraud, said BIAW Director of Insurance Programs Frank Romero. In his spare time, Gruse enjoys competing in BBQ events, building almost anything out of wood and spending time with his wife and two Newfoundland dogs. LAURA POYER Laura Poyer is the newest addition to BIAW s retro insurance program. Poyer was hired as an R.O.I.I. Select Field Representative to help develop and market the program s new On-the-Job Training (OJT) Partnership program. The OJT partnership is designed to help injured workers who are unable to return to their regular job after a workplace injury and need to be retrained for a new career. She has more than 15 years of practical workers compensation, employer education and employer advocacy experience across the construction, manufacturing, agricultural, and staffing industries. Before joining BIAW s R.O.I.I. Select team, Poyer served as the claim lead and trainer for another competing retro // LAURA POYER program. With all that experience, she is the right person to R.O.I.I. SELECT market this new return-to-work option available through FIELD R.O.I.I Select, said BIAW Director of Insurance Programs REPRESENTATIVE Frank Romero. When Poyer is not helping R.O.I.I. Select member participants, she is devoted to raising her two boys. She also loves rugby, football, skiing and walking her dogs. SEPTEMBER 15 VOL. 25, ISSUE 9

12 SET YOURSELF APART EARN YOUR CSP LEARN PROVEN TECHNIQUES FOR NEW HOME SALES The market is heating up and so is the competition! Whether you represent a builder, developer or new home buyer, you need to stay focused and at the top of your game by attending the upcoming Certified New Home Sales Professional (CSP) seminar with the legendary Instructor, Dave Porter, CSP, CAPS, CGP, MIRM. As the National Association of Home Builders 2014 CSP Instructor of the Year, Porter has been teaching in // AMANDA FIELDS EDUCATION PROGRAM DIRECTOR the building industry for over 30 years. As one student said, Dave Porter is engaging, fun and informative from the very start of the class. Whether you are new in the field or a veteran in the trade, Porter can guide you to a refreshed understanding of the home building industry so you can make home sales with confidence and ease. During this three-day seminar, you will visit a new home under construction, talk with the builder and get a better understanding of the environment that homes under construction face. As a student, you will brainstorm with other industry professionals and gain the information needed to succeed in today s market. From land development, framing and financing to the moving in party for clients, you will walk away with a better understanding of the entire new home sales process. Join the ranks of the national elite by obtaining a CSP designation in Washington state. At the end of the class, you will have gained the necessary sales skills for getting home buyers into a home as a New Home Sales Professional. This course is approved for 24 Real Estate clock hours and 18 American Institute of Building Design continuing education hours. To register for a CSP class, go to Course Descriptions on the Education page under the BIAW Programs tab at www.biaw.com. If you would like to book an exclusive offering for your company or have questions regarding any BIAW Education class, contact BIAW Education Program Director Amanda Fields at 360-352-7800, ext. 114. Certified New Home Sales Professional (CSP) Class Dates October 7-8-9, 2015 (Wed. Thur. Fri.); 8 a.m. 5 p.m. Olympia Master Builders office, Olympia BIAW member $395 Non-member $450 September IS ASSOCIATE MEMBER APPRECIATION MONTH The best way to say thank you to our Associate members is to say You Have My Business While September is officially recognized by both BIAW and the National Association of Home Builders as Associate Member Appreciation Month, anytime is a good time to say thank you to Associates! BIAW will honor those Associates selected by their local association for their outstanding contributions during the BIAW Fall Board of Directors meeting on November 6 in Bellevue. Thank you Associates, we couldn t do it without you! TOP TEN REASONS WE APPRECIATE ASSOCIATE MEMBERS #1...Spirit of Volunteerism #2... Membership Recruitment Efforts #3...Sponsorship of Events #4...Time Spent on Association Programs #5...Service to the Community #6...Committee Participation #7... Participation in Shows and Exhibits #8...Financial Support of the Association #9... Enthusiasm and Energy #10...Commitment to Our Industry SUMMER WEATHER TRIGGERS OUTDOOR HEAT EXPOSURE RULE Workers can experience severe illness from doing construction outside in hot weather. Heat-related illnesses (HRI) can result in heat cramps, heat stroke and more severe symptoms and can lead to injuries from falls and other accidents on the job site. Employers are required to provide training to workers under the Outdoor Heat Exposure Rule (WAC 296-62-095), which goes into effect from May 1 to September 30 every year when exposures are above a certain temperature. Employers must have a written HRI policy in place, conduct training and must ensure drinking water is available at the worksite. For more information, visit www.lni.wa.gov/safety/topics/atoz/heatstress. BUILDING INSIGHT www.biaw.com

13 QUESTION COSTS PHARMACY ABCs STAYING INFORMED CAN KEEP COSTS DOWN CHANGE IN WA LAW BREAK PAY CLARIFIED COURT SAYS PIECE RATE BREAK PAY TO BE PAID SEPARATELY As the battle to keep medical costs low continues, the dramatic increase in pharmacy spending and the costs of specialty drugs are catching many employers and employees by surprise. Spending on prescription medicines soared by an extraordinary 13% in 2014 a far cry from the 3.2% increase in 2013. Specialty drugs accounted for one-third of all pharmaceutical spending last year, growing by 26.5% for a total of $124.1 billion. Additionally, pharmacy costs are rising primarily because of price inflation for brand and specialty drugs, a slowdown in blockbuster drugs losing patent protection, generic dispensing rates leveling off, and a robust pipeline of specialty drugs including the new Hepatitis C treatments. Ultimately, this leads to the question of what can be done by you, the individual. The honest answer is not much in regards to controlling the costs, but what you can do is ask very basic questions when getting a prescription from your doctor. Simply asking if there is a generic equivalent available, understanding what other prescriptions may be an option, and doing research on your insurance carrier s website to understand costs are all important. With deductibles and copays increasing and HSA plans becoming increasingly popular, this means employees financial responsibilities are also increasing, so being a well-informed consumer is more important than ever. As the health care market continues to evolve and becomes increasingly complicated, BIAW s Health Insurance program administrators at EPK & Associates and their knowledgeable team of insurance professionals can assist participating member companies with resources and guidance on the challenges you face. If you are not currently participating in BIAW s Health Insurance program, have questions about the program or would like to receive a free, no-obligation quote, call EPK & Associates at 425-641- 8093 or visit them online at www.capitalbenefitservices.com. The Washington Supreme Court ruled in July that employees paid a piece rate must be paid for breaks separately from their piece rate and at the employees regular rate of pay. The case, Demetrio v. Sakuma Bros. Farms, Inc., stems from the claims of agricultural workers paid per pound or per box of berries they picked. Regulations require employees to be paid for one 10-minute break for every four hours worked on the // ADAM FRANK employer s time. STAFF ATTORNEY Under Washington law [WAC 296-131- 020(2)], Sakuma Brother Farms claimed that they rolled the pay for breaks into the piece rate. Rejecting that method, the Court ruled that break pay must be calculated and paid separately from the total piece rate, and must be the minimum wage, or the worker s regular rate of pay, whichever is greater. The Court provided guidance on calculating a worker s regular rate of pay. To calculate the pay rate for break periods, the Court said employers must divide the total amount of piece rate pay earned by the number or hours actually worked in the period, excluding break times. For example, if a worker earns $0.50 per pound of fruit harvested, and harvests 750 pounds in a 40-hour work week, minus 1.67 hours of break time (for a total of 38.33 hours of actual work time) you would multiply 750 by.50, and divide the product by 38.33 to arrive at the hourly rate of $9.78 for breaks. Implicit in this formula is that the rate of break pay can vary from week to week. If you pay employees a piece rate, start using the calculation to determine their break time pay immediately. For more information on the piece rate pay case, contact me at 360-352-7800, ext. 108. SEPTEMBER 15 VOL. 25, ISSUE 9

14 WA BUILDING PERMITS Total YTD Total YTD Single Multi- JUNE TOTALS JUNE TOTAL Family Family 2015 2015 2014 2014 BENTON 97 16 113 565 76 439 CHELAN 37 0 37 191 30 100 CLALLAM 14 0 14 73 10 60 CLARK 210 50 260 1,671 179 1,125 COWLITZ 9 0 9 65 6 45 DOUGLAS 14 0 14 122 22 82 FRANKLIN 35 6 41 212 47 254 GRANT 17 0 17 112 N/A N/A GR. HARBOR 20 0 20 74 11 26 ISLAND 23 0 23 121 13 95 JEFFERSON 15 0 15 89 7 46 KING 346 1,193 1,539 10,319 1,170 6,807 KITSAP 88 77 165 496 39 165 KITTITAS 27 0 27 141 24 83 KLICKITAT 9 0 9 52 N/A N/A LEWIS 15 0 15 50 45 84 LINCOLN 3 0 3 14 N/A N/A MASON 14 0 14 61 22 56 OKANOGAN 12 0 12 66 11 55 PACIFIC 6 0 6 30 N/A N/A PIERCE 264 32 296 1,430 290 1,693 SAN JUAN 10 0 10 48 10 41 SKAGIT 33 0 33 176 22 122 SKAMANIA 8 0 8 24 4 22 SNOHOMISH 178 12 190 1,710 279 1,626 SPOKANE 155 423 578 1,606 96 608 STEVENS 10 0 10 37 0 1 THURSTON 90 4 94 506 57 405 WALLA WALLA 12 2 14 80 10 43 WHATCOM 68 22 90 447 58 245 WHITMAN 4 0 4 25 2 161 YAKIMA 27 0 27 144 23 73 WA STATE* 1,876 1,857 3,713 20,775 2,563 14,563 *Only counties reporting are represented in state totals; Source: U.S. Census Bureau N/A = data not available; For archived listings, click on Member Resources tab at BIAW.com. BRANDED PRODUCTS AT A DISCOUNT BIAW has teamed up with Vernon, a 111-year-old, family-owned company that manufacturers and imports an endless array of custom promotional products to improve your marketing and branding efforts. Now you can shop for all your branded product needs while earning non-dues revenue for your local home builders association. ShopBiaw.com offers BIAW members and local association staff a 10% discount on all products, setup proof, and art charges. CODE ADOPTION from page 9// However, Sections 403.4 through 403.7 have been deleted from the model code and added as Subsections to 403.3.1.1. A new ventilation rate table from ASHRAE 62.1 replaced Table 403.8.1 because the previous table was intended for use in residential applications only. The new table is specific to multifamily dwellings. Section 403.8.6.1 was modified to allow windows and other operable openings to be used for outdoor air in lieu of outdoor air inlets in all building types, not just high rises. Several tables were renumbered or substituted. An amendment to Section 1107.2 which clarifies language prohibiting refrigerant piping in certain locations. What you can do: Most of this code applies to commercial applications, however the guidelines for installing ductless mini splits may become more important to builders if a proposal in the Energy Code is adopted requiring ductless mini split heat pumps in newly constructed homes with electric resistance heating. You may want to consider offering public comment. 2015 UNIFORM PLUMBING CODE (UPC) The 2015 UPC s most significant revisions are below: The UPC no longer has a dedicated Water Conservation section and language from adopted state amendments were moved into the appropriate model code section. Chapter 4 was significantly reorganized. Section 507.2 was amended to clarify required anchoring of water heaters. Previously the code cited seismic zones where strapping was required but Washington falls under all of the seismic zones so the language was deleted. In Section 606.5, the term readily accessible was replaced with accessible as it pertains to the requirement for having shutoff valves for parallel water systems. This item was identified as having a potential for increased cost with little gain, as there would be no hindrance in having the shutoff behind a panel door or similar configuration. Section 609.9 was modified to correlate with See CODE ADOPTION on page 15// BUILDING INSIGHT www.biaw.com

15 CODE ADOPTION from page 14// WA HOME SALES the Department of Health s (DOH) requirement that all testing of potable water systems must be done by an approved lab. Section 611.1 was modified to include an indication that some drinking water treatment systems could be regulated by the DOH as a public water system. A Washington amendment to section 707.4 which deletes a new requirement in the 2015 UPC to require cleanouts on all urinals, regardless of location. The SBCC felt this requirement was costly and unnecessary. What you can do: The DOH was very involved in the plumbing code, setting regulations on gray water capture and use. One of the more contentious issue is DOH prohibited the reclaiming of gray water for use in the flushing of toilets. Residents of the state facing water shortages feel there should be more discussion and study of the benefits and hazards of reclaiming and reusing gray water before this ban is put in place. This issue should be considered for public comment. RESIDENTIAL BUILDING CODES ONLINE AT BIAW.com To find a complete listing of the proposed code changes, click on Residential Building Codes under the Industry Issues tab at www.biaw.com. PENDING LISTINGS SALES CLOSED SALES New Active Active % Chg. JULY % Chg. No. Median Price % Chg. Mths. of JULY 15 JULY 15 JULY 14 v. 7/14 2015 v. 7/14 Closed Sale Price v. 7/14 Inventory Chelan 106 325 360-10% 77 4% 86 $270,000 23% 3.7 Clallam 74 323 440-27% 81 8% 75 $259,000 17% 4.3 Clark 68 111 191-41% 66 18% 51 $265,000 8% 2.1 Cowlitz 162 403 581-31% 179 11% 111 $187,900 18% 3.6 Douglas 54 135 129 5.00% 37 76% 41 $260,000-2% 3.2 Ferry 14 70 83-16% 4 20% 1 $128,000 0 70.0 Grant 95 481 516-7% 109 2% 103 $187,000 16% 4.6 Grays Harbor 165 656 873-25% 154 39% 109 $144,000-1% 6.0 Island 250 622 820-24% 245 27% 196 $275,000 2% 3.1 Jefferson 80 368 448-18% 93 21% 73 $330,000 19% 5.0 King 4,055 4,445 6,082-27% 4,102 10% 3,755 $439,000 3% 1.1 Kitsap 534 1,045 1,506-30% 517 14% 467 $275,500 9% 2.2 Kittitas 130 499 519-4% 123 31% 94 $280,000 35% 5.3 Lewis 133 610 668-9% 153 37% 112 $147,000 5% 5.4 Mason 170 633 775-18% 154 12% 118 $180,000 9% 5.3 Okanogan 88 497 531-6% 52 86% 32 $193,950 30% 15.5 Pacific 79 343 457-25% 66 27% 43 $185,000 70% 7.9 Pierce 1,806 3,277 4,172-21% 1,865 21% 1,476 $245,000 7% 2.2 San Juan 53 402 437-8% 39 20% 27 $420,500 8% 14.8 Skagit 272 656 850-23% 257 14% 193 $270,500 23% 3.4 Snohomish 1,745 2,459 2,996-18% 1,764 21% 1,411 $343,000 7% 1.7 Thurston 534 1,191 1,455-18% 528 19% 448 $254,000 8% 2.6 Whatcom 490 1,289 1,697-24% 504 34% 372 $277,882 5% 3.4 Others 41 229 227 1% 47 10% 30 $155,450 13% 7.6 TOTAL 11,198 21,069 26,813-21% 11,216 17% 9,424 $319,250 6% 2.2 Source: Northwest Multiple Listing Service The US government offers tax credits to promote good behavior such as buying an electric car or weatherizing a home. Regrettably, these plans are regressive. The top 20% of earners receive 90% of electric car credits and 60% of weatherization credits. Alternatively, impose a tax on carbon emissions that costs tax payers as much as the current schemes. For the same cost, more pollution will be eliminated and more equitably. Elliott F. Eisenberg, Ph.D. GraphsandLaughs, LLC www.econ70.com SINGLE FAMILY AND CONDOS NORTHWEST MULTIPLE LISTING SERVICE MARKET ACTIVITY SUMMARY - JULY 2015 ECONOMICAL ENVIRONMENTALISM SEPTEMBER 15 VOL. 25, ISSUE 9

REASONABLE REBATES MEMBER REBATE PLAN Building Industry Association of Washington 111 21st Avenue SW Olympia, WA 98501 360-352-7800 Fax: 360-352-7801 800-228-4229 BIAW.com Presorted Standard U.S. Postage PAID Olympia, WA Permit No. 692 THERE S NOTHING EXTREME ABOUT IT I don t know how it happened, but I ve watched the TV show Extreme Couponing only twice in my life, and both times I couldn t stop watching. Don t get me wrong I admire being frugal and saving a buck. What I couldn t wrap my head around after watching each episode was the time commitment: there s the time to sort and figure out which coupons apply to products, // LARA HASTINGS R.O.I.I. SELECT MARKETING MANAGER the time to study who honors what deals and when, and the time to scan the volumes of discount codes and coupons in the checkout line. Then there s the time to organize and put away all the bargains, the time spent meeting up with people in parking lots to sell the excess quantities of deals, and so on. It seemed, appropriately, EXTREME. Nine times out of 10, I can t remember to redeem the USE NOW coupons that are taped to the front of packages when I m in the checkout line. Clearly, I m not a serious couponer. Luckily for members, the BIAW Member Rebate program doesn t require extreme couponing efforts. It is EXTREMELY easy to use. Just follow these simple steps: 1. Register: Visit www.hbarebates.com to sign up. 2. Participate: Find participating manufacturers products, calendars and deadlines on the website. 3. Claim: After purchasing products, go to the website to complete the Rebate Claim Form each quarter. 4. Receive: Find check processing dates by clicking on Claims Process from the Builders and Remodelers link. So, to review: Buy the products from the list, file for rebates and get money back. No coupon clipping, no hubbub, and certainly no late night trips to your local store s parking lot to sell the 15 extra shower heads you bought so you could get a good deal on the one you wanted. The program is the opposite of extreme. It s reasonable rebating. If you have questions regarding the Member Rebate program, contact me at 360-352-7800, ext. 171 or email at larah@biaw.com. SAVE $$$ IBS REGISTRATION OPEN MEGA-EVENT TO DRAW 125,000+ ATTENDEES The National Association of Home Builders (NAHB) recently announced that once again the International Builders Show (IBS) is co-locating with NKBA s Kitchen & Bath Industry Show (KBIS) to present Design & Construction Week at the Las Vegas Convention Center from January 19-21, 2016. IBS brings together the industry s most important global manufacturers and suppliers and showcases the latest products, materials and technologies involved in all types of buildings including wood, concrete, stone and brick. Visitors can see more than 400,000 net square feet of exhibits and 1,300 manufacturers and suppliers of the latest and most in-demand products and services. JOIN 125,000 OF YOUR CLOSEST FRIENDS The mega-event will bring together more than 125,000 builders, general contractors, remodelers, designers, flooring professionals, as well as product suppliers from around the globe. IBS registration provides entry to four other exhibit floors as well: KBIS, International Window Coverings Expo, Las Vegas Market, and the International Surface Event. In addition to the must-see products and exhibits, IBS will also feature up-to-date and innovative education. A revamped education program features more than 100 sessions with topics ranging from sales and marketing to construction and codes. FULL REGISTRATION PACKAGE INFO - 3 DAYS Sept. 1-30: $275/member (spouse/free) Oct. 1- Nov. 20: $375/member ($25/spouse) Nov. 21 - Jan. 16, 2016: $425/member ($25/spouse) After Jan. 16, 2016: $525/member ($25/spouse) NAHB members attending for the first time qualify for a special offer of $150 for the IBS full registration package. A block of rooms will be held until November 18, 2015 at the Flamingo Hotel at a special rate for BIAW members. The IBS moves to Orlando in 2017 and 2018 and returns to Las Vegas in 2019. To register or for more information, go to www.buildersshow.com.