SOUTHWEST WASHINGTON CONTRACTORS ASSOCIATION
As the Southwest Washington Contractors Association (SWCA) heads into a new year, the theme is cautious optimism. Fundraising is up for the non-profit, along with its membership of primarily commercial contractors. But expected changes in erosion control and storm water regulations present challenges to its members, as well as a slower economy. Randy Graves, executive director of SWCA, talks about what’s ahead with Trent Rehfeldt, who is vice president of the SWCA board and CEO of Rehfeldt Construction.
VBJ: Who makes up your membership?
Randy Graves: 99 percent of our members are either general contractors or subcontractors and suppliers.
VBJ: How did 2007 compare to 2006?
Graves: We finished the year very strong in 2007. In 2006 we finished with just under 240 members, and we finished 2007 with 256 members. We are starting to see a handful of residential subcontractors looking at the commercial market more. The housing market has dropped off some as far as new construction and a lot of sub(contractors) are looking at getting into commercial lines.
We put on about six events a year, two of which are fundraising events. Both of them exceeded budget expectations. We generated almost $80,000 between the two, which was double what it was in the past.
VBJ: What issues do you expect to face in your industry in 2008?
Graves: We’re very optimistic. It might start out a little bit slow but we see it picking up in the next few months.
Trent Rehfeldt: We definitely see the opportunity for (cost) increases in materials this year. That’s something the industry’s gotten used to over the last couple years. As products cost more, the projects are going to cost more.
Graves: Right now with the whole economy people are a little bit nervous. We’re cautiously optimistic that we’re going to have a reasonable year. We’re coming off our best year in six years. Financially, we’re as strong as we’ve ever been.
If we averaged the (monthly) amount of jobs we’ve had over the last 12 months it would be 50 to 60. We’ve got about 25 jobs bidding this month, so the job volume is down, but the dollar volume is up. We’ve got just over $67 million just this month.
A year ago we mainly focused on the (Vancouver-Portland Metro) area. We sent out questionnaires and a lot of guys said, “We’re not afraid to travel.” (…) So we started looking outside the area for jobs to expand as far as Pierce County, Klamath Falls, Ore., Salem, Ore., the coast, Yakima and Bend, Ore.
Rehfeldt: (Another issue is) Clark County’s going to be conforming to the state-level regulations. (They will be) a lot more stringent than they were in the past and will definitely affect construction practices. There’s going to be fines associated with neglect, so we’ve been holding seminars to get people ready.
VBJ: Do you expect an upcoming boom in commercial construction?
Rehfeldt: I wouldn’t say (it’ll be a) boom. We definitely see 2008 going strong, specifically public works jobs and education jobs. We expect the school districts to start going again on all of their projects, specifically in higher education – like WSU Vancouver and Clark College. We really do believe that the commercial industry will stay strong at least through the end of ‘08. It takes a while for commercial to slow down after residential slows.
Graves: We’ve budgeted as if it’s going to be a good year and we’re expecting that. We’re going to bring on a third person (at the SWCA office). I’m looking to bring them in probably in March. They’ll be like an administrative assistant. It will let me get out more with the subs and general contractors to give them the opportunity to join. I’m excited. It’s the first time the board has approved something like that. It’ll be a half-time position to start.
VBJ: How are green building practices playing into your organization? Do they seem viable for the long-term?
Rehfeldt: Absolutely, especially in this area. It’s become more cost effective now that it’s more mainstream. We’ve seen an increase in buildings being designed that way, specifically for the lifecycle-costing of a building – energy consumption, the products, the life of the building itself and how long the products will play out.
There have been significant innovations in energy. (People are) working to make building energy more effective – insulation, electrical systems, lighting. … During first discussions (clients) want to know about green building. Bottom line is they want to know how it affects their building during construction and how they’re maintaining it.
BUILDING INDUSTRY ASSOCIATION OF CLARK COUNTY
Whether they’re working to change workers compensation and storm water regulations or coaching local companies through the housing slump, leaders at the Building Industry Association of Clark County don’t see any reason to slow down in 2008. David Roewe, executive director, and Steve Madsen, government affairs director, offer inside perspectives on issues they expect their 1,055 members and the building industry to face in the year ahead.
VBJ: Who makes up your membership?
Steve Madsen: Our membership consists of both commercial and residential builders, contractors and all the related business entities that go along with that. We have members in Skamania, Clark and Cowlitz counties, and some national members from larger organizations.
VBJ: What issues do you expect the building industry to face in 2008?
Madsen: There are some unique issues with us as a border state, like the workers compensation reciprocal agreement. Oregon drywallers can typically bid lower than those in Washington because … premiums in Oregon are cheaper. The reciprocity agreement requires that each state recognize the coverage of the reciprocal state. We’re supporting the elimination of those reciprocity agreements. The alternative is you pay the premium for the state you’re working in.
David Roewe: Deb Wallace is helping move the legislation through.
Madsen: Our primary issues are the county storm water updates and working on representing BIA in the comprehensive plan appeal process. Futurewise and the Clark County Natural Resources Council appealed the plan. … We have some issues with the plan as well but we think those can be resolved with updates down the road.
Revised county storm water regulations are set for adoption in August. It’s a huge priority. The new regulations have the potential to increase the size of storm water detention facilities up to two to six times the existing size. It’s going to absorb a lot more developable land.
VJB: What are your goals for 2008?
Madsen: Our ongoing goals are to keep housing affordable, to keep building fees low, whether it be development fees, building fees, impact fees, the whole package.
Roewe: Another of our goals is to be heavily involved in the political races. There will be two open county commission seats, open legislative seats and the governor’s race.
Madsen: I’m running for Cowlitz County Commission. One of our missions (at the BIA) is to recruit candidates for office that understand the building industry. I’ve been told that a lot of people would hate to see me go, but people understand that I have a skill set that would be useful to a county like Cowlitz.
VBJ: How has your organization been affected by the housing downturn?
Madsen: I’ve got to take more of a direct interest in the health of the businesses, making sure they stay successful. We’re helping with legal support in contractual issues. And we’re continually making sure that our members are protected through being incorporated and having liability protections. I’m also keeping a closer track of what the market’s doing so we can advise our members of their opportunities.
Roewe: On Jan. 15 we started our electronic media campaign at BuyNowClarkCounty.com. The bottom of the market’s here. Prices aren’t going to go down any further. The reason this mortgage crisis happened is because of flippers. This has been going on for several years. (I read that) 97.4 percent of all mortgages are being paid on time. Forty-six percent of those new repossessions were from flippers. It’s a great time to buy a house. You’ll get more house for the money than ever before.
Madsen: What’s really deflating prices now is the inventory out there, and that’s not going to last. Sooner or later that inventory’s going to get absorbed and we’ll get back into a more normal construction cycle. Growth itself is still remaining fairly robust in the area.
Roewe: The cost to build a house has not gone down. The builders have taken the profits out of their houses. Seattle and Salem haven’t had to drop prices. The mortgage crisis is like Y2K, like the sky is falling. Florida, California, Nevada and Arizona are what’s causing this peak. They’re overbuilt. The media has created a lot of this hype.
VBJ: How are green building practices playing into your organization? Do they seem viable for the long-term?
Madsen: Philosophically, it’s great – we need to conserve … and make sure our materials come from sustainable sources. As energy costs increase it will make more economic sense. Current green homes aren’t sold at the $250,000 level. If the home appraisal was higher because of green factors … that would also drive the demand for green building. Philosophically it’s great, but that’s not why people pay the mortgage.
Charity Thompson can be reached at cthompson@vbjusa.com.
