The Helena Building Industry Association recently recognized some of its outstanding members and took a look at the challenges and opportunities facing the industry.
Chuck Casteel, outgoing executive board president, spoke about 2018 and the transition to 2019 before tossing, literally, the gavel over to incoming president Adam Pentecost.
“We have seen a lot of renewed enthusiasm and fresh ideas,” Casteel said.
He pointed out a more inclusive approach to membership — it’s not only construction companies involved in the association — and made note of the success of the 2018 Parade of Homes. Last year was the first year his company, Casteel Custom Homes, had a home included in the event.
Casteel genuinely was taken by surprise when he later was awarded Builder of the Year.
Reasons for his nomination included: “strong supporter” of the association, “innovative leadership and a passion for new things, an all-around really nice guy,” Donna Durckel, HBIA executive officer, read from people’s comments.
Casteel managed to get out a few words before the lump in his throat took over. He said that becoming so involved in the association has allowed him to realize how many good builders there are out there.
“So, this means quite a lot,” he said.
Associate of the Year was awarded to Mike Magee of T&E the Cat Rental Store.
“He is a standout member of the association,” Durckel said. “He is actively involved and always challenging others to do the same.”
New Member of the Year award recipient, Willow & Birch Inc., was one such example of the more inclusive membership.
Durckel explained that even though the company has no direct involvement in construction it jumped right in, giving hours of its time and energy.
“They joined on their own, saw the value in membership and got involved in our community,” Durckel said. “They jumped right into the party planning committee, gave to our charitable auction and put up their fun photo booth at the event.”
Durckel said that such enthusiasm and involvement is rare, especially in a member with no direct involvement in the industry.
Looking forward to the challenges and opportunities of 2019, Bill Pierce of Pierce & Associates and Dustin Lindstrom of Montana City Plumbing & Heating gave their perspectives as builders and associates.
Pierce said the biggest challenge he sees going forward is the affordability of single-family residences.
“The run-up in construction cost is outpacing the income growth in this area,” he said.
Other big issues impacting the industry are the lack of a skilled workforce and the lack of lots in the city.
“Even if we start training (workers) now, we’re five to seven years out until we turn out that new workforce,” Pierce said.
But, the lack of lots will be harder to overcome.
“We’re not looking far enough ahead,” he said. “It’s going to bite into us.”
Finally, there are the legal challenges. Pierce pointed out that in the last five to 10 years there have been more construction defect issues and people are going to attorneys more than ever.
However, “there are great opportunities,” he said. “The American system is designed around entrepreneurs and small businesses. The Last Best Place is a big draw and the population is growing. We have built-in customers.”
He predicts single-family housing won’t be as sought after and there will be more rentals and condos built in Montana.
Lindstrom agreed that the biggest challenges are the labor shortage and lack of future developments. He is struggling with the wage difficulties. He said qualified workers are leaving the area due to Helena’s mid-level wages being the same as other areas' starter-level wages.
He pointed to the lack of industry education opportunities in Helena and the lack of interest in the trade as obstacles for change.
Jon Pallister, chief building official with the city building division, spoke to attendees to let them know that his department wants to assist developers. His goal is to help developers shorten the timeline for their projects and help educate them on new codes that come up.
“Together, we will get you through it,” he said of navigating the processes. “Opportunities are in growth and working together in communication.”
County planning director Peter Italiano has been at his desk for about a year now and still is getting things in order. He discovered many things that hadn’t been addressed, as well as projects more than a decade old waiting to move forward.
“My goal is to make sure that when someone comes into my office, there is no surprise,” he said. "Time is money, and it is government’s responsibility to be a partner with the private sector.”
His concern is that while there may not be many lots available, in the county sector there are lots available that don’t have infrastructure.
“I’m here to tell you the rumors are true,” he said. “Your county commissioners, who I work for, have directed me to bring county-initiated zoning to a corner near you. We’re going to start a real lively dialogue about zoning the Helena Valley. Zoning can stabilize the economy. Zoning can stabilize property value.”
Road access is another challenge, he said. For new developments, it has been hard to identify road ownership and responsibility. Projects are too easily stalled while this is determined.
“I think there are bright stars on the horizon,” he said. “It’s all about partnerships. My goal is to stop lawsuits and start partnerships.”
Sitting on the panel representing the state, Steve Snezek, executive director of the Montana Building Industry Association, echoed the difficulties facing the industry as expressed by Pierce.
“Helena is a microcosm of the state,” Snezek said, “Some of the challenges that are happening here are happening statewide.
Statewide, the BIA is focused on job-site safety and health insurance for members. While he made no promises for insurance availability this year, Snezek said he is looking into what needs to be done to bring options back.
Looking forward, he advised members to get involved and look for opportunities, including running for public and government offices “so you can have a major impact on what’s going on."
Snezek is at the Capitol during the legislative session keeping an eye on bills that will impact building. He is keeping on top of the issues and making available weekly updates with the association. He said it is important for members to know who is in an office and what their position is on building. Even better, he said, get yourself into a position where you can be a part of the decision-making process.
Lake Coulson, vice president of government affairs for the National Association of Home Builders, wrapped up the evening by assuring members that he is representing HBIA in Washington, D.C.
He said it is his association’s goal to focus on providing safe, decent and affordable housing for Americans is a priority.
“Everything we do is about housing affordability," Coulson said. “Many of the issues in Helena are the same issues talked about in D.C. … Lots, lumber, liquidity are all issues we are dealing with in Washington. We want to use lumber produced domestically, but it’s our understanding that not enough is produced. So we have to go elsewhere.”
Tariffs on outsourced lumber increase prices. Regulatory compliance makes up about 25 percent of the cost of a home. Flood insurance is another area of frustration and cost.
“There’s probably nothing more important on a national level,” he said. “That is probably the biggest challenge and is tied to the uncertainty of the political process involved.”
As for future opportunities? Coulson said he hears time and time again that opportunities lie in infrastructure.
“Decaying roads and bridges,” he said. ”We want to use that (repair) process to address some of the permitting and hopefully that can be streamlined.”