Page 8 - GSABA Builder Brief September 2020 Issue

KRISTI SUTTERFIELD Executive Vice President
Homebuilding & Remodeling Starts are on the Rise
We have to work hard to keep it that way!
Texas’ new home construction and remodeling are returning to historic levels despite COVID19, but affordability continues to be an issue. The 30-year fixed-rate mortgage is at an all-time low thanks to aggressive Federal Reserve action, but new home construction and remodeling costs continue to rise.
The cost of lot development, labor, permits, and local fees have been increasing over the past several years. Our members are now reporting building material shortages that are leading to significant delays. The current price of lumber in August was $740 per thousand board feet, up from $627 in July. This increase adds thousands of dollars to the cost of a new home and exacerbates affordability
woes.
While the United States started the year with lower than usual lumber supplies, COVID19 shut down mills and slowed imports. The National Association of Home Builders (NAHB) is working with Congress and the White House to ease the tariffs on Canadian lumber, and your GSABA leadership team will be weighing
in with our Congressional delegation to voice our support of NAHB’s efforts.
While a lot is happening with the upcoming November elections, the 87th Legislative Session will kick off in Austin in January of 2021. Texas is projected to have a 4.5 Billion dollar shortfall. Our elected officials and local municipalities will be looking for new revenue sources to shore up local and state budgets and revenue sources.
One of the key bills passed in 2019 was the Agriculture Roll Back Exemption (HB 1743) that went into effect on September 1, 2019. Land used for agriculture and qualifying wildlife management is valued differently, resulting in a lower property tax bill. When a property no longer qualifies for the agriculture exemption, there are “rollback” taxes due. The taxes owed are calculated by taking the difference between the taxes that would have been owed with the exemptions and what was paid by the landowner with interest. HB 1743 reduced the rollback tax period to three years (versus the previous law that
7 percent to 5 percent.
“Due to Texas'
$4.5 Billion
Shortfall, we
anticipate
Legislators will
once again
look to tax
construction and
labor to shore up
budget deficits. ”
allowed for a five-year rollback tax period) and lowered the interest rate from
There was also a bill filed in the 2019 session that would have taxed construction labor, and we anticipate that a similar bill (or bills) will be filed in the upcoming session due to the state budget shortfall. The Texas Association of Builders’ number one priority will be to fight any new taxes on the residential construction industry. It will take all of us working diligently with our elected officials to make sure our industry is not targeted for new taxes.
Thank you for being a member of GSABA and for your continued support of our government affairs and advocacy efforts. Please call on me or any member of my team if we can help you in any way.
Warm regards,
8 SEPTEMBER 2020 | GREATER SAN ANTONIO BUILDERS ASSOCIATION
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FROM THE EXECUTIVE VICE PRESIDENT