Down the Appraisal Rabbit Hole

Well, it’s been a dry spell since things that make me crazy have shown up. But at IBS, the Exec Committee was given a report, “State Appraisal Regulatory Board Best Practices”, on a GAO publication (Government Accountability Office) entitled ‘Real Estate Appraisals – Appraisal Subcommittee Needs to Improve Monitoring Procedures’.  Huh?

Background: After the messy housing recession, the Dodd-Frank Act required the GAO to report on appraisals.  The purpose was to determine the ability of the Appraisal Subcommittee (ASC) to monitor and enforce state and federal certification requirements and standards, and to determine if the activities of the ‘Appraisal Foundation’ are consistent with statutory mandates.

My first thought was, “What? Who?”

Then NAHB decides to partner with the Association of Appraisal Regulatory Officials (AARO) to survey state appraisal boards to identify best practices in their member jurisdictions.

I was confused so I started some Google research to figure out who the ASC, Appraisal Foundation, and AARO are and how are they interrelated.

So it appears the ASC (Appraisal Subcommittee) provides federal oversight of appraisal programs and is the monitor for the Appraisal Foundation.  The ASC was created by the FFIEC (Federal Financial Institutions Examination Council) – so many acronyms! – which sets uniform principles for examination of federally regulated institutions….ok?  Now the Appraisal Foundation is financed with grants from the ASC to defray costs of creating standards and qualifications.  And then…get this….. the Appraisal Foundation has another 3 boards.

1)     Appraisal Practices Board – provides voluntary guidance on methods and techniques

2)     Appraisal Qualifications Board – develops/amends ‘Standards’ of appraisals

3)     Appraisal Standards Board – establishes education, experience and exam requirements for licensing

Are you still with me?

And the AARO (Association of Appraisal Regulatory Officials) create state licensing agencies to issue licenses to individuals.

Is it any wonder that no one can figure out whom to tackle about the problems with appraisals??? State officials point to national and national points back saying “it’s a state issue”.

So the findings of the NAHB report are nothing short of UTTERLY AMAZING and must have taken sheer genius to figure this out [sarcasm]:

1)     State boards oversee many other professions and therefore do not have enough resources.

2)     State boards lack governance for disciplinary actions

3)     State boards have no standard for oversight

4)     State boards have no clear communication with the Appraisal Qualifications Board.


At the recent BAM board meeting in Saint Paul, the appraisal issue was discussed. To no one’s surprise, concern was expressed from all areas of the state about appraisals being a huge problem. Your voices were heard and the state president, Chad Kompelien and EVP, Remi Stone are putting this on the list of pressing state issues.

NAHB’s Single Family Finance committee is coordinating local HBA’s in evaluating the effectiveness of each state’s appraisal regulator.  If you are interested in helping with this solution, please contact Chad or Remi.

We, alone, cannot fix the appraisal system but we can get a seat at the table so our voices will be heard. Even if we are totally confused as to how the process works!

Kathe Ostrom, your NAHB MN State Rep

BAM Board Meeting + Builder Day at the Capitol


On March 12, over 170 builders association members from across the state converged in Saint Paul to use our collective industry voice at our state’s Capitol. We are stronger together, and it’s one of the reasons the Builders Association of Minnesota exists.

Every local association was represented and together we met with nearly 75% of the Legislature. That is no small feat. It means we broadcast, in person, the message that the home building industry is important to Minnesota’s economy and we will be heard. Our priority issues for the day included:

Statewide building code enforcement – The Legislature must pass legislation to level the playing field for the safety of consumers and the economic health of the residential construction industry.

Subcontractor registration –  The pilot program has created a heavy burden on licensed contractors. Let the pilot project expire June 30, 2014, and do not let it become a permanent mandate.

Builder-pay attorney fees (SF 2146/HF 2612) – The language is one-sided and would award attorneys fees only to the homeowner if they are the prevailing party. It does not provide the same for a builder should they prevail. The Legislature must oppose this bill.

B2B taxes – Repeal regressive, hidden, business-to-business sales and use taxes on services.

Fire sprinkler mandate – With the code process nearing completion, the Legislature must prohibit the home sprinkler mandate.

Thank you to those that were able to attend, and thank you to our event sponsors: Xcel Energy, The Builders Group, Brushmasters, Larkin Hoffman, and the Home Builders Association of Fargo-Moorhead. We will keep you posted on the progress of the 2014 legislative session. Session wraps May 19, which isn’t much time, but things have been moving fast as a result of the time crunch. Look for a call for grassroots efforts.

BAM Board of Directors Meeting

Prior to the big event, the BAM Board of Directors held their first meeting of 2014. President Chad Kompelien reported BAM closed 2013 in the black and led the board in discussion about industry issues. The board talked about appraisals and labor shortage and possible solutions. Each local association reported on what’s happening in their area; cool new things and any challenges for 2014. It was a successful meeting and we look forward to the next meeting August 20th in Saint Cloud.

Check out BAM’s Facebook page and Twitter for photos of the day! #mnbdac

Home Building Industry Day at the Capitol March 12

Each year the builders association hosts a Day at the Capitol, and this year it’s going to be better than ever. All members of the association and the home building industry are invited to join us March 12 to deliver the message to the Legislature that the home building industry matters. The event is free for members and this year it’s more important than ever that we show up in force.

The judge’s ruling on the fire sprinkler mandate was recently published and it upheld the position of the Minnesota Department of Labor and Industry. What that means is we’ve exhausted our regulatory options in our fight against mandatory fire sprinklers, so now, in addition to some serious public relations and fundraising for the 2014 gubernatorial election, we will be hitting the Legislature hard. That’s where you come in.

Be sure to get yourself, your staff, and your home building industry friends signed up for our Day at the Capitol March 12. The event itself is going to be our best yet, but more importantly the message we need to deliver is the most significant yet.


Registration is easy and online at


11:30 AM Check-In
12:00 PM Lunch & Program (Issues overview, talking points and tips for your meetings)
12:30-4:30 PM Meetings with legislators at the Capitol (transportation provided)
4:30-7:00 PM Legislative reception (all 201 legislators are invited)


James J. Hill Reference Library
80 4th Street West, St. Paul, MN 55102

Thank you to our 2014 Sponsors

Brush Masters, Larkin Hoffman, The Builders Group, Xcel Energy, and the Home Builders Association of Fargo-Moorhead.

2013 State Award Winners Announced


Tuesday December 17th, 2013 members from around the state gathered for a day of celebration. The Builders Association of Minnesota (BAM) Annual Meeting and Awards Dinner was held in concert with a BUILDPAC and BAM-PAC fundraiser.

Thank to all who attended, sponsored and made the day a huge success.

A special thank you to our BUILDPAC representatives Joe Weis, Weis Builders and Jeff Schoenwetter, JMS Custom Homes. And thank you again to our event sponsors: The Builders Group, Wells Fargo Home Mortgage, Fredrikson & Byron, Thermo-Tech Windows & Doors, and Xcel Energy.

During the annual meeting the 2014 BAM Board of Directors were installed, we heard from economist Herb Tousley and the 2013 BAM Awards were presented by BAM Executive Vice President Remi Stone.

A big congratulations to the 2013 award winners:

Rising Star Award – Chris Ramsey, K&S Hearing, A/C, Plumbing & Electrical (RAB)

Associate of the Year – Dave Olson, Thermo-Tech Windows & Doors (CMBA)

Remodeler of the Year – Ray Moe, Raymond Moe Construction (ABA)

Builder of the Year – Lowell Pratt, Pratt Homes (BATC)

Check out BAM’s Facebook page for photos of the event.

Following the awards ceremony, the 2014 BAM Executive Committee was sworn in by Representative Tama Theis.

Congratulations, and thank you, to our 2014 leadership team:

Chad Kompelien, Kompelien Custom Homes – President
Mike Paradise, Bigelow Homes – President Elect
KC Chermak, Pillar Homes – Builder Vice President
George Cundy, Cundy, Santine & Associates Architects – Associate Vice President
Kurt Welker, Welker Custom Homes – Secretary
Gerry Traut, Xcel Energy – Treasurer
Keith Kylmala, Kylmala Truss – Past President

The Gifts of Membership


The holidays are a time to count your blessings and give thanks. Membership with the Builders Association of Minnesota is the gift that keeps on giving. Remember to “open” these gifts and take them out for a spin!

Legislative, Regulatory, and Legal Protection

The biggest benefit of membership is representation and protection at the state Capitol, and before regulatory agencies and the courts. Together with your industry peers, your voice is stronger. It’s important to fight for the best building codes and laws possible. Membership means standing shoulder-to-shoulder with your peers to fight for what’s right.

Contract Templates

This is a gift that will keep on giving for years to come. Drafted by attorneys that specialize in residential construction, and updated when the law changes, these six members-only contract templates (and one change order) are available in both word and pdf so you can download and edit them right on your computer. These contracts are worth over $10,000. That is a holiday miracle! Members only section - contracts here.

Code Guides

When the government puts out a new code, the language is provided but not the how. Enter BAM. For members-only we put together detailed code guides – written by experts – so you know exactly how to build to the new code. Members only section – code guides here.


An obvious gift of membership is the discounts on stuff you use. Members have access to discounts on fuel at Holiday, office supplies at Office Depot, and a 22% discount on your Verizon plan to name just a few. We have a rebate program that gives you money back and we haven’t even talked about the perks at your local and national associations. These awesome savings can more than pay for your annual membership. Members only – get these sweet discounts now!

Industry-specific Insurance

The residential construction industry requires special insurance coverage and as a BAM member you have access to high quality, discounted coverage from The Builders Group for workers’ comp, Corporate Four for general liability, and RMC for risk management. Check out our insurance deals here.


BAM membership means information. We make sure you’re in the know and provide details on what’s happening in the industry, the economy, at the Capitol, and right here at BAM. We’re tweeting, blogging, posting on facebook, emailing, writing white papers, and more. Like us on FacebookFollow us on Twitter, sign up to receive our Blog, and as member you get so much more.


Membership means getting influence, leadership training, political education, and networking. As a member you make decisions about real issues that affect your business. In serving on BAM’s committees you step up as a leader and make decisions for 3,000 member companies. At BAM it’s all about politics and by participating you get in on the action. And of course, BAM committee work and events mean networking with your statewide peers and the opportunity to meet, learn, and grow your business.


One of the most important benefits of builders association membership is banding together with your industry peers across the state to create a strong unified front.

BAM was created in 1974 to be the statewide voice of Minnesota’s builders and remodelers. We represent you and your business at the State’s Capitol, regulatory agencies and courts because industry unity and doing business with members is good business. Together we work to protect your business and bottom line – for a better industry, a better economy, and a better state!

We hope you enjoy the gifts of membership now and in the new year! Happy holidays from all of us at BAM!

Visit for more information.

Open Post on the ALJ Sprinkler Hearing

Today BAM’s legal team and expert witnesses present our case to Administrative Law Judge Eric Lipman to keep mandatory sprinkler systems out of the residential building code. We will be live tweeting and live blogging throughout the hearing today. Check back for updates.

8:37AM The troops are assembling. The judge said he he plans to start right at 9:00AM. Several members and association staff have come to support. Rochester, Fargo-Moorhead, Brainerd and the Twin Cities are all here.

9:00AM Judge Lipman has started the hearing stating today is about record building and fact finding. Judge Lipman said the hearing will be focused on three key issues: 1) does the government have legal authority to adopt these rules, 2) whether the department fulfilled all administrative procedures, and 3) the range of choices an agency is authorized to make and whether they were needed and reasonable.

9:25AM Department of Labor and Industry’s general counsel Jeff Lebowski is introducing their case and exhibits A through J.

9:42AM Standing recess called by the Judge.

9:53AM Roger Axel is testifying on behalf of BAM stating he is for public safety as a building official and introduced how fire sprinklers were put in the national code.

9:59AM Steve Orlowski is now testifying discussing discrepancies and what’s been happening in the rest of the United States with regard to the sprinkler issue. Orlowski is wrapping up his testimony and states in all his research he cannot find a reason for the 4,500 square foot threshold the department included in their draft code.

10:25AM Karen Linner is beginning her testimony. She will address how this will affect the state of Minnesota. No deaths in homes built after smoke alarms started being required in 2003 – hardwired, battery backed-up, and interconnected. No fire fighter deaths in residential fires since data has been collected. Gives history of code proposals and proposed trade offs.

Linner covers whether Minnesotans want sprinklers to be required. A U of M survey determined 87% of Minnesotans want sprinklers to remain their choice.

11:22AM Joe Springer testifies on behalf of BAM and asks several questions of the Department about how they determined there was a need and reasonableness for mandatory fire sprinklers in homes 4,500 square feet and larger.

11:40AM State Fire Marshal Dahm testifies fire marshals support the model national code. (Despite the fact that 41 states have rejected the national code, and only one state has accepted it – California.) Marshal Dahm says sprinklers protect people, property, possessions, and pets.

11:50AM Judge Lipman called a recess until 12:20 on the dot.

12:20PM And we’re back. Jeff Hudson of NFPA, a residential fire sprinkler advocate, is testifying now. Admits fire death rate went down once smoke alarms were required in homes.

12:42PM Ronald Farr employee of Underwriters Laboratory now testifying. UL “certifies, validates, tests, inspects, audits, and advises and trains” for their clients. Farr says they’ve been doing research for sprinkler advocates.

1:04PM Clay Dietrich testifying for BAM now. Retired assistant fire chief from Moorhead, MN. Served for 27 years. Also been a builder for 39 years. Discusses border city issues, areas without municipal water supply, and cost. “The real problem is older homes without smoke alarms. That’s where deaths are happening. The problem isn’t with new housing.”

1:40PM The judge called a 15 minute break.

1:55PM And we’re back. Sean Flahrety is testifying on behalf of the national fire sprinkler association.

2:16PM Chris Contreras from Ryland Homes testifies regarding size and percentage of homes affected (30%) as well as increased cost. $10K additional cost may only be $53 extra per month in a mortgage but over the course of the life of that mortgage it ends up being $19K and that can be hard for a homeowner and at times ends up being the tipping point.

2:24PM Mark Brunner from the Manufactured and Modular Homes Association testifies.

2:35PM The fire chiefs are up and say smoke alarms are not enough protection.

2:55PM Buddy Dewar testifying now as head of the National Fire Protection Agency. Claims fire sprinklers should be mandated to put out non-fatal fires and protect property. Also claims the reason 41 states have rejected mandatory residential sprinkler systems is because of the “strength of the building industry.”

3:20PM All scheduled witnesses have been heard. Judge recesses until 3:35PM. Plan is to adjourn for the day by 5:00PM.

3:35PM No further witnesses came forward and judge adjourned the hearing at 3:45PM. Please submit and comments by January 2nd at 4:30PM. The rebuttal period will then last 5 business days and close at 4:30PM on January 9.

Early Registration Discount: Feb. 6 MN Construction Conference

Register early for the first-ever Minnesota Construction Industry Conference

Early-bird registration is now open for the first-ever Minnesota Construction Industry Conference to be held on February 6, 2014, at the Ramada Inn Mall of America, Bloomington.

The State of Minnesota and its construction industry partners will host the one-day conference and provide educational and networking opportunities for highway/heavy, commercial building and residential contractors, plus informative general sessions for the entire construction industry. The event will update construction industry members about current regulations and rules and provide an opportunity for attendees to share ideas with the state officials about how to build a better Minnesota.

Along with the general sessions, each construction-industry sector – highway/heavy, commercial building and residential – will have five workshops. Planned session topics include: business development, building code changes, contracting with the state, licensing and compliance, safety and health compliance and consultation, workforce development, and a panel discussion with state commissioners. Also, state subject matter experts will be available for one-on-one sessions to answer contractor questions.

The construction conference will also feature a trade show of industry-related exhibitors and sponsors. Continuing education units are available for some of the residential construction workshops.

Registration cost for the conference is $79 before Dec. 31, 2013. Starting Jan. 1, 2014, the cost is $99. Registration includes general sessions, workshops, 1-on-1 with the State sessions (optional), all conference materials, continental breakfast and lunch.

View the conference agenda and register online at

Interview with the Expert: Sneak Peek at 2014 Session

Introducing Brian Halloran of Redmond Associates; the lobbying firm that represents BAM at the State Capitol. Redmond Associates are among the best in the business and we’ve asked them to give us a sneak peek of the 2014 session.

Question:  This upcoming Minnesota legislative session is commonly known as a “bonding” session; tell us a little bit about what that entails.

Answer:  Minnesota operates on two-year biennial cycles. The 2013 session was the first year of the biennium, so the principle responsibility of lawmakers was to pass a budget to fund state government for fiscal years 2014-15. With that $38 billion blueprint set, lawmakers will focus primarily on crafting a public works borrowing package or “bonding” bill.

Members of the Capital Investment committees (in the House and Senate) are traveling the state to review projects that enhance and/or build infrastructure like bridges, roads and transit, convention centers, water treatments systems, and education facilities.  There are nearly $3 billion in requests by state agencies and local governments.  I expect the overall bonding package to be in the $850 million range. Last session gave us a glimpse of the contours of what the 2014 session’s bill may look like when an $800 million bill narrowly failed in the House on a mostly partisan vote.

Among the nearly $3 billion in requests is a push to fund the remaining $126 million needed to pay for the $272 effort to restore the capitol building itself. Cass Gilbert’s 108-year-old domed building is now in the early stages of a major renovation, and it’s been exciting to see hard hats and scaffolding surrounding it.

Whatever the ultimate size of the bonding package, it will have to include some bipartisan cooperation.  For most legislation to pass, a simple majority is required meaning 34 votes in the Senate and 68 votes in the House.  Bonding bills, however, have a higher standard for passage set at three-fifths majority. That means 41 votes in the Senate and 81 votes in the House. The current balance of power holds at 39 democrats and 28 republicans in the Senate, and 73 democrats and 61 republicans in the House.  Bonding bills are always complicated jigsaw puzzles to compile so I expect session 2014 to be no different.

Q:  Session is starting unusually late; how might that impact lawmakers’ legislative agendas and pacing?

A:  It is worth mentioning the constitutionally required deadline for when session must end. The Minnesota Constitution says, “the legislature shall not meet in regular session, nor in any adjournment thereof, after the first Monday following the third Saturday in May of any year.” Translated that means lawmakers must complete their work by May 19th, 2014. Legislators set their official start date for February 25th, 2014 leaving less than three months to complete their work.

This will be my 19th session and I don’t remember a start date this late. What this means in a practical sense is that in order for most legislation to be successful, it must be introduced early in session (or even before it starts), vetted quickly, and pass aggressive committee deadlines. While committee deadlines are not yet set, policy deadlines will likely be mid-March.

Given that compressed timeline, we are likely to see legislative hearings in January and February to accelerate the public vetting process. In fact, House leadership has set a “pre-filing” date of January 13, 2014 for bill introductions. That means pre-filed bills will be posted publically and available for interim committee hearings, though no official action may be taken until after session convenes and the bills are given their first reading on Tuesday, February 25. While session’s pace is typically described as moving from a walk to a jog to a sprint, this session will likely start with a sprint.

Q: The term “Unsession” has been used. What is that and what are your thoughts on the impact of the “Unsession” discussions?

A: While legislators will be engaging in the usual plate spinning necessary to move multiple priorities simultaneously, Governor Dayton has added another “plate” in the form of “Unsession” reforms. Earlier this year, he began floating the idea of eliminating outdated statutes and improving government efficiencies. He has since instructed his administration to gather ideas along those lines, and has asked the public and the legislature to do the same. A website has been created to collect suggestions and I’m told around 1,600 ideas have been offered. It is too soon to tell how much traction this reform initiative will get.

Q: Despite pressure on lawmakers to keep the 2014 agenda limited to bonding and “Unsession” work, what other issues are likely to surface?

A: Even with talk of limited time and legislative appetite, expect to see activity on a broad suite of issues such as increasing the minimum wage, changes to MNSure (Minnesota’s healthcare website portal) and tweaking all or some of the controversial business-to-business (B2B) taxes implemented last session. All of these issues will be controversial.

Minimum Wage

The Legislature will try to increase the minimum wage above the current $6.15 per hour. The Senate legislation was at $7.75 per hour and the House was at $9.50 per hour, but both bodies could not come to agreement on a final package before session ended in 2013.


As you know, Minnesota has launched its own version of the Accountable Care Act (federal health care law). Expect adjustments to that rollout to continue, and much debate to follow.

B2B Taxes

The B2B issue will certainly be an issue of discussion. Some legislators have expressed an interest in adjusting or eliminating the new B2B taxes on warehousing, labor, and telecom. The challenge will be to find the money to pay for the adjustment (through more taxes and/or new cuts) since those new dollars were used to craft the FY 2014-2015 budget.

Q: How does the 2014 election factor in to the 2014 session?

A: We can’t talk about this session without anticipating the upcoming 2014 elections in November. Every House seat and all the constitutional offices (Governor, Lieutenant Governor, Attorney General, State Auditor, and Secretary of State) are up for re-election in 2014, and there will be great desire for those up for election to leave the marbled halls of the capitol as soon as possible to get to the doorsteps of their constituents. Senators will not be up for reelection as they will only be halfway through their four-year terms.

Democrats will be fighting to maintain majority control of the House and keep Governor Dayton in office while Republicans will hope to take advantage of a non-presidential election to wrest control of the House and Governor’s residence from the Democrats. Look for both sides to use every opportunity to explain their priorities to the voters.

Session will surely be about the legislative issues before them in 2014, but it will also be about trying to set the table for 2015 and beyond. Elections may be a year away, but for legislators and candidates, they are just around the corner, or at the doorstep, to put it in campaign parlance.

Brian Halloran has been successfully representing clients on behalf of Redmond Associates since 1996. He specializes in lobbying and client strategy development. Mr. Halloran was recognized in MN Law and Politics “Top Lobbyists” story as an “Up and Comer” in the field early in his career. Mr. Halloran was also selected as a Humphrey Policy Fellow and is a regular speaker to groups about lobbying and public affairs.

What Does BAM’s Legal Action Fund Do For Me?

The home building industry’s legal action efforts came to life in 2003 in response to the significant amount of government regulation negatively impacting the residential construction industry. Having developed sophisticated legislative and regulatory programs, the industry found that more and more often the court system was the venue of last resort to stop cost-drivers. Initiative litigation was the next logical step to managing government actions that danced around the intent of state statutes. To that end, the creation of the fund completed the industry’s three-fold approach to government regulation.

Since its inception, the fund has validated its purpose by providing a legal voice for the industry and by taking on cases that have statewide implications in order to strengthen and protect the industry. These cases set legal precedent for important statewide policy issues facing the home building industry and the decisions made can be called upon to help resolve similar problems as they arise for members across Minnesota.

Equally important is making sure members have the business tools to protect their bottom line.  To help in that realm, the fund makes available only to Builders Association of Minnesota (BAM) members six essential contracts templates that help members manage business transactions, reduce liability exposure, and comply with state law. The contracts alone have an estimated value of $10,000.

How Does the Legal Action Fund Work?

Any member of BAM may bring a legal issue forward and request help from the Legal Action Committee by contacting a member of the Legal Action Committee or BAM staff. The Committee reviews the facts of the case and assesses whether it has statewide significance for the housing, residential development, and building industry.

At the direction of the Legal Action Committee, BAM may become directly involved as a party to litigation on behalf of its members, submit an amicus curiae brief arguing the legal and policy impacts of a court decision or engage in actions regarding a pending legal or regulatory matter. Statewide significance means those cases that present an opportunity to establish judicial or administrative precedent and have widespread and meaningful economic impact on the industry.

The legal battles that face the industry are often immense – both in cost and the universal impact on every business working in the industry – and it is important to have a reliable ability to engage in these fights for the industry. The BAM Board of Directors approved this year, by unanimous voice vote, a Legal Action Fund Assessment for 2013 in the amount of $35 per member.

In its ongoing efforts to respect local association budgeting cycles and to provide stability to the fund, BAM’s Board of Directors approved an assessment schedule for the next five years with a transition to having the fund be supported solely by BAM’s operating budget. After 2013, the Legal Action Fund assessment amounts by year are: $35 per member in 2014, $30 in 2015, $25 in 2016, $20 in 2017, and $15 in 2018. After the five-year period the Legal Action Committee will be funded by BAM’s operating budget only.

Fire Sprinkler Fight

This year we’re preparing for a legal fight against the sprinkler mandate currently in the draft Minnesota version of the International Residential Code. We have solid facts and arguments on our side, but this is still a big fight to which the Legal Action fund is supporting. This decision set BAM on a course to force an administrative law judge hearing on the matter. BAM’s Legal Action Fund hired Joe Springer, an attorney from Fredrikson & Byron to represent the industry. BAM has also retained the services of Karen Linner, BAM’s former Director of Codes and Research, and Steve Orlowski, an expert from NAHB.

A Look Back

The BAM Legal Action Fund has a near perfect record. In 2012 the LAF won its case against the City of St. Paul stopping the City from overriding the state building code with its egress window policy. This win upholds the Minnesota Supreme Court ruling on Sax v. City of Morris, and signals to all municipalities in Minnesota the imporance of not exceeding the State Building Code by ordinance, formal enactment, development agreement, or policy. It is a significant, precedent setting win for the industry and can be used in future cases where a municipality is attempting to exceed the State Building Code.

In addition to the City of St. Paul case, the BAM Legal Action Fund has successfully addressed other statewide legal issues including: zoning ordinance, plat approval, takings claims, TID charges and special assessments, 60-day rule, eminent domain, water intrusion, and construction defects.

The value of legal action is a proven member benefit. One of the industry’s first fights was on over-collection of building permit fees. West Central Builders Association has used this ruling numerous times when the city has tried to raise building permit fees. This lawsuit challenged the amount of fees collected by the City of Shakopee. As a result of the litigation, the parties entered into a detailed consent decree that resulted in the City reducing building permit fees for residential properties by between 69 and 91 percent. The consent decree contains requirements for all cities to provide greater transparency when setting fees.

Copies of those cases and other legal resources, such as white papers and form contracts, can be downloaded from the BAM members-only website at

Going Forward

It’s important to have a Legal Action Fund with a viable war chest and in a position to fight for the industry in a timely manner. Because of the importance of a statewide legal fund, the Legal Action Committee has put together a long-term funding plan approved by the Board of Directors. If you have any questions please contact 2013 BAM President Chad Kompelien or BAM Executive Vice President Remi Stone

Success: NAHB 2015 ICC Wins


I saw SNOW! Yep. It mysteriously appeared on the mountain peaks during a rainstorm in Colorado Springs.  This is your NAHB State Rep, Kathe Ostrom, and I recently returned from the Fall Board meeting where the weather was sunny and beautiful AND cold and rainy.  Gee! Did I leave Minnesota?

As your State Rep, I attended a four-hour meeting for State Reps, then a working lunch for the State Reps working group on NAHB’s Mission and Vision statement.  Next I went to another four-hour meeting with Senior Leadership, National Area Chairs, and State Reps to talk about our individual agendas and meeting discussions. And you think I’m having fun. Now you know why I had the fourth meeting holding a glass!

First the success story: we were successful in passing a by-law amendment that makes NAHB recognize an associate as president of a local association as long as there is a majority of builder members on the exec committee and on the board of directors. It was passed unanimously!!!  No dissent was heard. As someone said, we are eating the elephant one bite at a time.

Next big topic was the ICC meetings and vote on the 2015 code. Yes, they are two revisions ahead of Minnesota. Lots of kudos go to NAHB staff and two NAHB members, Don Pratt and Sonny Richardson who sit through 10 days of 12-14 hour meetings to fight for us. Approximately 80-120 voting members were in attendance at these meetings, and we – code officials and builders – were outmanned by the large corporations that are determined to push product before sane building science.  With that said, they tell me we were successful on 85% of the hundreds of proposals the association supported or opposed for the 2015 IRC with the exception of the IEC (International Energy Code). That is where the manufacturers reigned. The code officials voted with us 99% of the time.

Of particular importance to the home building community are five key proposals that NAHB fought against to keep building codes flexible, cost effective, and product-neutral. NAHB’s success on these proposals represents total construction savings of up to $40,000 per house.

1. Additional Requirements for Exterior Foam Plastics

A proposal was voted down that would have required all single-family homes or townhouses with foam plastics in the wall or roof system within 10 feet of the property line to be protected on both the interior and the exterior by a thermal barrier. It also prohibited the use of any siding that includes foam insulation as a backer product.

Had this proposal been approved, it would have required builders to sheath the entire exterior of their homes in a layer of drywall or wood sheathing, or maintain a distance of 10 feet from all property lines. In some cases, this could have resulted in an additional cost of up to $20,000 per home.

2. Additional Stairs and Ramps

A proposal that would have required all single-family homes and townhouses with multiple levels to have a stair or ramp within 50 feet of any habitable portion of the home was not allowed. The 2012 IRC requires a single stairway or ramp to connect all habitable levels. If approved, the proposal could have cost builders anywhere from $10,000 to $15,000 per home.

3. Residential Accessibility

This proposal would have required all one- and two-family homes to be designed so people with disabilities could enter unassisted, have a zero-clearance entrance, an elevator or lift, an accessible bathroom, bedroom and (if on the accessible level) a kitchen with 40 inches of clear floor space at all counters. If approved, the cost of compliance would have been $2,000 to $3,000 per house.

4. Wood Deck General Provisions

Expanded provisions for constructing wood decks were approved in Atlantic City. Among provisions that were considered but ultimately struck down were guard post, stair stringer, and lateral connection requirements that would have added at least $300 in additional hardware costs. Also, provisions that could have led to engineering being required for decks were limited in scope or defeated, saving approximately $1,000 in engineering design costs per home.

5. Foundation Walls in Flood Zones

A proposal that would have required reinforced short stem walls in riverine flood zones (FEMA Zone A) was defeated. Cost savings are in the range of $300 to $1,000 per house, depending on height and total length of walls.

So when someone asks, “What has NAHB done for me lately?” Read it again and check your wallet!

While NAHB posted resounding victories for the 2015 edition of the IRC, only about 60% of the changes proposed in favor of cost-effective, energy-efficient new homes were approved for the 2015 IECC. Key proposals to restore mechanical equipment trade-offs, and to provide trade-offs for building tightness and window area, were soundly defeated despite testimony from dozens of builders, NAHB staff and building officials.

Common-sense proposals to improve the flexibility, cost-effectiveness and product neutrality of the energy codes were too often thwarted by a coalition of energy-efficiency advocates funded by those businesses with the most to gain from more stringent codes. Stay tuned for the electronic voting changes coming on the next Green Building Code! Maybe technology will defeat the big dollars when common sense cannot?