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Upcoming IBA Legislative Conference-SAVE THE DATE
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The Indiana Builders Association will host its annual Housing and Legislative Conference on February 5, 2018 at the Sheraton Downtown City Centre Hotel. Members will have a legislative briefing in the morning with a lunch at the Indiana Statehouse to follow. For more information on sponsorship opportunities or to RSVP, please contact Reagan Van Cleave at Reagan@buildindiana.org.
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2018 Legislative Session Begins in January
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The 2018 legislative session will commence in early January. The House and Senate will meet on Jan. 3, 2018 at 1:30 p.m. Although official bill lists will not become available until session gets underway, IBA staff will monitor all legislative developments between now and the start of session in order to have a voice in those issues that affect the home building industry. Issues we are already looking at for this session include:
Workforce Development
We support initiatives that will provide students and adults alike with opportunities to learn a construction trade.
Engineered Wood Products
We oppose attempts to require a label/placard be affixed to new homes to identify the use of engineered wood products in floor and roof materials.
Fire Sprinklers
We oppose mandating the installation of fire sprinkler systems in one-and two-family dwellings and townhouses because it is not a cost-effective safety improvement over smoke alarms.
Indiana Residential Code
We support the adoption of the Indiana Residential Code - a statewide building code that regulates the construction of one-and two-family dwellings and townhouses.
Impact Fees
We oppose any change to the state law regarding Impact Fees.
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News Media Fuels the Fire on CO Alarm Mandate
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In May 2017 the Indiana Fire Prevention and Building Safety Commission approved the City of LaPorte's ordinance to require carbon monoxide alarms in all new homes with a fireplace, attached garage, or fossil fuel burning appliance. Since then, the Commission has denied ordinances on this matter from the Town of Chesterton and Michigan City and tabled an ordinance from St. Joseph County.
Approving one ordinance while denying others pertaining to the same subject matter - even though the ordinances do not have the same requirements - has drawn sharp criticism from fire service in northwest Indiana and a spike in media coverage. Michigan City Fire Marshal Kyle Kazmierczak told the Times of Northwest Indiana he was frustrated by the commission's resistance to his city's measure, calling the commission "inept" citing the board's make-up of mostly building and construction industry professionals in this article. HBA of Fort Wayne President Jessica Scheurich defended the composition of the 11-member commission citing the requirement for members to represent various industry sectors in this article. Jamie O'Brien, a St. Joseph County Council member who was 1 of the 2 "no" votes on their ordinance, said in this article that the ordinance was well-intentioned but has too many unanswered questions. Governor Eric Holcomb has weighed in on the recent denials of local ordinances in a news interview with NWI Times. Gov. Holcomb expects the Commission to address the issue in order to avoid different standards in communities throughout the state. "We're trying to get away from this hodge-podge approach and have a more formalized template," Holcomb said.
IBA, along with the trade associations representing apartment builders and architects, continue to fight the widespread adoption of ordinances of this nature as they create a patchwork system of requirements that conflict with maintaining Indiana's statewide building codes intended to establish uniformity and make it easier to do business across town, city, and county lines.
Please keep an eye on your town, city, and county council meeting agendas for ordinances pertaining to fire and building safety rules, and contact IBA for talking points to share with your local elected officials on issues like carbon monoxide alarms, engineered lumber, and others.
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NAHB Supports Passed Tax Bill
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Today, President Donald Trump signed into law the GOP Tax Bill. After significant improvements made during the legislative process, and due to the robust engagement efforts of NAHB and its membership, NAHB supports this final tax bill.
NAHB believes it will help middle-class families, maintain the nation's commitment to affordable housing and ensure that small businesses are treated fairly relative to large corporations. Lower tax rates and a fair tax code will spur economic growth and increase competitiveness, and that is good for housing.
An overview of the Tax Cuts and Jobs Act, with all changes taking effect for the tax year starting Jan. 1, 2018:
- Mortgage interest deduction. Retains the mortgage interest deduction and the deduction for second homes, but reduces the mortgage interest cap from $1 million to $750,000.
- State and local property taxes. Allows taxpayers to deduct up to $10,000 of state and local taxes, including property taxes and the choice of income or sales taxes.
- Capital gains exclusion. Maintains existing law that allows home owners to exclude up to $250,000 (or $500,000 for married couples) in capital gains on the profit from the sale of a home if they have lived in the house for two of the last five years.
- HELOC. Eliminates the deduction for interest on home equity loans.
- Private activity bonds. Retains private activity bonds (PABs), which will enable the Low Income Housing Tax Credit to maintain its effectiveness as the most indispensable tool for the production of affordable housing. Without PABs, we would face the loss of more than 788,000 affordable rental units over the next decade.
- Alternative Minimum Tax. Eliminates the Alternative Minimum Tax (AMT) for corporations and increases the AMT exemption amounts and phase-out thresholds for individuals.
- Individual tax brackets. Retains seven tax brackets, with rates ranging from 10% to 37%. This will provide tax relief for individuals and small businesses and represents a tax cut for most taxpayers.
- Estate tax. Doubles the estate tax exemption.
- Carried interest. Retains existing carried interest rules, but assets must be held for three years.
- Pass-through deduction. Allows most taxpayers with pass-through income to deduct 20% of that income based on wages or on wages plus a capital element.
- Business interest deduction. Provides the taxpayer a choice of making a one-time election for a deduction limited to 30% of adjusted gross income; or for real estate, a 100% deduction for business interest, but with certain tradeoffs.
- Like-kind exchanges. Preserves the benefit for real estate investors to make tax-free exchanges of property, commonly referred to as "like-kind" exchanges.
- Multifamily depreciation. Gives the taxpayer the choice of taking 27.5- or 30-year depreciation, depending on how they elect to treat their business interest.
- Individual tax provision sunsets. Almost all individual tax elements - mortgage interest, state and local property taxes, individual brackets, etc. - expire at the end of 2025. Unless Congress acts, starting in 2026 these modifications will revert back to the tax code as it exists today in 2017.
A statement from NAHB Chairman Granger MacDonald on the tax bill, "NAHB commends President Trump and members of Congress for their hard work and dedication in crafting this once-in-a-generation overhaul of the nation's tax code. Providing tax relief for hard-working families and creating a more favorable tax climate for small business will make the economy more vibrant and competitive. In turn, this will boost the housing sector, which represents roughly one-sixth of the U.S. economy. Housing not only equals jobs, but jobs mean more demand for housing." |
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Land Use: Pushback on Redevelopment of Clarksville Motel
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Clark County Commissioners are pushing back on the redevelopment of the Crest Motel on US Highway 31 after a zoning and planning committee deemed the property "unsafe for human occupancy." Denton Floyd Real Estate Group closed on the property over a month and a half ago and had plans to completely rehabilitate the motel and turn it into 40 one-bedroom and studio apartments for millennials and young professionals called Clarksville Lofts, adding a pool, dog run and clubhouse to the property in the process.
As it stands, there is a rift between the Clarksville Redevelopment Commission and planning and zoning staff as they hope to add an amendment to the redevelopment plan that would add tax increment financing (TIF Dollars) to the plan, but planning and zoning staff just aren't budging. |
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Richardson Retiring to Run for County Office
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 State Representative Kathy Richardson (R-Noblesville) has announced she will not be seeking re-election in 2018 and will instead run for Hamilton County Clerk. Rep. Richardson has notably been involved with tax and economic development issues while under Govs. Daniels, Pence and Holcomb. As a long elected member of the House Republican Leadership, Rep. Richardson is the first woman to serve in an elected Caucus Leadership role in Indiana history.
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IBA Member Elected as La Porte GOP Chair
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IBA member Mitch Feikes was elected chairman of the La Porte County Board of Commissioners with 45 of 62 votes. Pointing to the commissioner seat up for election in 2018 during his acceptance speech, "We need that commissioner's seat again. We need to work hard at it to get it done," said Feikes. Current commissioner, republican Mike Gonder, has announced he is not seeking re-election. |
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Model and Spec Home Deduction Applications Due Dec. 31
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The Model Home Deduction and the Residence in Inventory (Spec. Home) Deduction provide a 50% deduction on the structure (not the land) for up to three models and three residences in inventory, statewide for the initial partial assessment followed by three full assessments. Applications for the Model Home Deduction and the Residence in Inventory (Spec. Home) Deduction for 2017 must be completed and signed no later than Dec. 31 and submitted or postmarked no later than Jan. 5, 2018.
The statute for the Deduction for Model Residence is found here, and the Application for Model Residence Deduction is 53812.
The statute for the Deduction for Residence in Inventory is found here, and the Application for Residence In Inventory Deduction is 54861.
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Outlooks Available for Indiana and Housing
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The Indiana Business Review provides analysis and insight on economic and demographic issues from the Indiana Business Research Center at Indiana University's Kelley School of Business. Going into the New Year, IBR has published an Indiana -specific outlook for 2018, as well as a housing outlook. In the outlooks, IBR projects a small increase in economic development based on several external factors, such as U.S. tax reform, Federal Reserve action, free trade agreements, immigration labor policies, international stability and inflation. For housing, the outlook remains positive, despite supply-side challenges, as more buyers enter the market. You can read both outlooks in detail below.
2018 Indiana Outlook
2018 Housing Outlook |
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Workplace Safety Reminder: Increased Risk of CO Poisoning During Winter Months
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Carbon monoxide (CO) is odorless, tasteless, and invisible and it displaces the oxygen from your blood resulting in sickness or death. CO comes from engine exhaust, portable gas heaters, gas furnaces, LPG-powered vehicles and other fuel-burning appliances. Workplaces with potential CO emissions should use a ventilation system, rotate shifts of employees to minimize exposure and use personal protective equipment (PPE) like a self-contained breathing apparatus. Homes with improperly maintained fuel-fired appliances pose a risk of CO poisoning to occupants.
Builders, now is a good time to remind homeowners to have their heating equipment inspected and serviced on a regular basis. Click here for 'Heat Your Home Safely' - an article that you can share with homeowners. Additional resources to keep homeowners safe this winter are found here.
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