Face-Covering Policy Remains Flexible As Hoar Construction Confronts Two Virus-Troubled Projects

July 13, 2020
Richard Korman - Engineering News-Record

This spring, Hoar Construction has found itself on both sides of the face-covering challenge.
As guidance on virus protections for workers evolved during the spring, contractors in many parts of the U.S. chose or were compelled by state or local rules or unions to go beyond federal guidance and require workers to use a face covering of some kind on the jobsite.

Richard Korman, Engineering News-Record

Mr. Korman may be contacted at kormanr@enr.com

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Will Affordable Housing Ever Come Back to Colorado?

July 6, 2020
David M. McLain – Colorado Construction Litigation

Prior to the Great Recession, condominiums and townhomes accounted for approximately 26%-27% of all permits pulled along the Front Range, and were referred to as “affordable housing,” meaning that you could find homes that were inexpensive or reasonably priced. Now that term has all but disappeared, to be replaced by “attainable housing.” In other words, it is possible to become a homeowner in Colorado, but it is by no means affordable.

To encourage more condominium and townhome construction, then-Gov. John Hickenlooper signed HB 17-1279 into law on May 23, 2017. Thereafter, the market has been waiting to see when affordable housing would make a resurgence. Unfortunately, it does not look like that will be happening any time soon.

Mr. McLain may be contacted at mclain@hhmrlaw.com

U.S. Pending Home Sales Post Record Gain, Exceed All Forecasts

June 29, 2020
Maeve Sheehey – Bloomberg

Contract signings to purchase previously owned U.S. homes surged in May by the most on record as mortgage rates fell and some states began to reopen from coronavirus lockdowns.

The National Association of Realtors’ index of pending home sales increased 44.3% to a three-month high of 99.6, after falling in April to the lowest level in records back to 2001. The median projection in a Bloomberg survey of economists called for a 19.3% gain in May. Even with the outsize advance, the index is below the pre-pandemic high of 111.4, reached in February.

U.S. Homebuilder Optimism Makes Record Gain as Buyers Return

June 22, 2020
John Gittelsohn – Bloomberg

U.S. homebuilders’ outlook improved in June as record-low interest rates and demand for more space spurred buyers to re-emerge after the coronavirus shut down sales and construction.

A gauge of builder sentiment jumped to 58, a 21-point gain from May, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Analysts expected a reading of about 46, the average of 37 estimates compiled by Bloomberg. A rating above 50 is considered positive. June’s increase was the biggest on record for the index and followed a seven-point uptick in May.

Housing Market Has Been Surprisingly Active During Lockdown

June 15, 2020
Prashant Gopal - Bloomberg

Stuck day and night in their homes, a surprising number of Americans are deciding the pandemic is a great time to upgrade.

That's how it looks to Lee Whitaker, vice president of Pacesetter Homes. After the coronavirus shutdown, the small Texas homebuilder braced for the worst. And it came: Business plunged in April. Then in May, something unexpected happened. Sales were 30% above the company's own pre-crisis forecast for the month.

Homebuilder ETF Soars to Pre-Crisis Level on Sales Surprise

June 8, 2020
Claire Ballentine - Bloomberg

The largest homebuilder ETF surged to pre-crisis levels on data showing a surprise increase in sales of new houses last month.

State Street's SPDR S&P Homebuilders exchange-traded fund, ticker XHB, rallied as much as 4.6% to the highest level since March 6. Purchases of single-family houses in the U.S. unexpectedly climbed in April after sales dropped the most since 2013 in March, when much of the U.S. economy shut down to stem the spread of coronavirus.

U.S. Homebuilders Defy Expectations With Gain in New-Home Sales

June 1, 2020
Prashant Gopal, Bloomberg

Last decade, housing crashed the U.S. economy. But in the 2020 pandemic, it could be one of the bright spots.

New home sales unexpectedly climbed 0.6% in April to a 623,000 annualized pace, government data showed Tuesday. That was 30% higher than the median forecast in a Bloomberg Survey of economists of 480,000. The news sent the shares of homebuilders surging, with an index that tracks the industry hitting the highest level since March 9.

U.S. Homebuilder Sentiment Advances After Worst Slump Ever

May 25, 2020
Vince Golle - Bloomberg

U.S. homebuilder sentiment rose in May by more than forecast following a record slump a month earlier as a pickup in sales and demand expectations pointed to stabilization in the real estate market.

The National Association of Home Builders/Wells Fargo Housing Market Index increased by 7 points to 37, according to data Monday. In April, the gauge plummeted 42 points, the most in records to 1985. The median projection in a Bloomberg survey of economists called for 35 in May. Readings above 50 indicate more builders view conditions as good than poor.

Another Reason to be Careful Before Walking

May 18, 2020
Christopher G. Hill - Construction Law Musings

We have discussed issues that may arise in the context of a residential construction project. Because most homeowners are not sophisticated in the ways of construction (and really shouldn’t be) expectations are key and keeping your nose clean as a contractor is key. Courts in some instances will lean toward the party that they deem to be less sophisticated, i. e. the homeowner, so doing anything, such as walking from a job under anything but the worst circumstances, can be very detrimental after the fact.

Recently, the Norfolk, Virginia Circuit Court gave us another reason to stay on the straight and narrow. In Builders By Design v. Wilson the Court looked at a relatively typical scenario in residential construction. The Wilson’s contracted for the construction of an addition and renovation to their home. During the course of construction, changes to the scope and price of work took place with more or less contention. Without any warning and before the construction was complete, the homeowners sent an e-mail to Builders By Design stating that it should cease work and not enter the property without the Wilson’s express written permission.

Mr. Hill may be contacted at chrisghill@constructionlawva.com

Covid-19 May Fuel Migration From High-Cost Cities, Analyst Says

May 11, 2020
Max Reyes - Bloomberg

The Covid-19 pandemic and the resulting remote work boom is accelerating a “Great Migration” from expensive and tax-heavy coastal regions and major cities into more affordable states in the U.S. South and West, according to Susquehanna Financial Group.

The “forced transition” to remote work among white-collar firms will lead employers to reevaluate their approach to real estate and workforce location more broadly, analyst Jack Micenko wrote in a note published Monday.

Covid-19 Update: California Legislators Urge Bay Area Counties To Relax Restrictions On Housing Construction

May 4, 2020
Newmeyer Dillion

On April 16, 2020, sixteen California legislators urged Bay Area counties to relax the restrictions on housing construction under various shelter in place orders. Citing the desperate need to address the growing housing shortfall in California, the legislators recognized the intentions of the orders to limit the spread of COVID-19 and protect workers, but suggested alternative measures to allow both goals to be met.

Newmeyer Dillion continues to follow COVID-19 and its impact on your business and our communities. Feel free to reach out to us at NDcovid19response@ndlf.com or visit us at www.newmeyerdillion.com/covid-19-multidisciplinary-task-force/.

About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's success and bottom line. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.

U.S. Home-Building Permits Rise to Highest Since 2007

April 27, 2020
Reade Pickert - Bloomberg

U.S. new-home construction remained robust in January and applications to build jumped to the highest level since 2007 as low mortgage rates and a solid labor market continued to fuel housing demand.

Residential starts slipped 3.6% to a 1.57 million annualized rate, still the second-fastest pace of the expansion, after an upwardly revised 1.63 million pace in the prior month, according to government figures released Wednesday. January starts exceeded the median estimate in a Bloomberg survey of economists. Permits, a proxy for future construction, advanced 9.2% to a 1.55 million rate, the highest since March 2007.

Are COVID-19 Claims Covered by Builders Risk Insurance Policies?

April 20, 2020
Cheryl L. Kozdrey - Saxe Doernberger & Vita

If you are an attorney, insurance broker, or other professional representing developers and contractors, then your clients have likely reached out with concerns about losses related to COVID-19. One common question is whether there is potential coverage under builders risk insurance policies.

Ms. Kozdrey may be contacted at clk@sdvlaw.com

Governor Gavin Newsom Orders a Limited State-Wide Eviction Freeze for California Residential Tenants

April 13, 2020
J. Kyle Janecek - Newmeyer Dillion

Governor Gavin Newsom just passed an order that effectively creates an eviction freeze for residential tenants in California who are unable to pay rent as a result of changed finances due to the COVID-19 pandemic. This has taken the form of Executive Order N-37-20, which will remain in effect through May 31, 2020.

The Order raises a number of questions however, including when the Order applies, how it affects evictions, and whether it overrides local measures currently in effect.

Mr. Janecek may be contacted at kyle.janecek@ndlf.com

Work Halted at Boston Project Despite Loophole in Shutdown Order

April 6, 2020
Scott Van Voorhis - Engineering News-Record

A major waterfront construction site in Boston that managed to avoid the city’s shutdown on building activity amid the coronavirus is now closing up shop. The apparent shutdown puts an end to what had become a glaring leak in Boston Mayor Marty Walsh’s city-wide quarantine.

ENR may be contacted at ENR.com@bnpmedia.com

Arizona Governor Ducey’s Executive Order on Residential Eviction Actions

March 30, 2020
Bob Henry - Snell & Wilmer Real Estate Litigation Blog

As part of the State of Arizona’s response to the current public health crisis, on March 24, 2020, Arizona Governor Ducey issued Executive Order 2020-14, titled “Postponement of Eviction Actions.” A copy of the Executive Order is linked here: https://azgovernor.gov/executive-orders Residential landlords considering taking any action against tenants, including evictions, should be aware of this Order before proceeding.

In summary, the Order effectively requires all Arizona law enforcement officers who are typically charged with enforcing “eviction action orders” (from Arizona courts) to “temporarily delay enforcement” of such orders in various circumstances, including for tenants who are quarantined, or who are residing with others who are quarantined, because of COVID-19 (including self-quarantines pursuant to orders from licensed medical providers) or for tenants who have a health condition that “makes them more at risk for COVID-19 than the average person.” The Order also requires such actions to be delayed if the tenant has “suffered a substantial loss of income resulting from COVID-19” due to job loss, reduction in compensation, and similar economic problems arising out of the pandemic. Thus, the Order is designed to provide some protection for tenants who have medical or financial problems arising out of and relating to the COVID-19 crisis.

Mr. Henry may be contacted at bhenry@swlaw.com

U.S. Existing-Home Sales Rise to Best Pace Since Early 2018

March 23, 2020
Reade Pickert - Bloomberg

Sales of previously owned U.S. homes jumped in December to the best pace in nearly two years as historically low interest rates continued to lure buyers despite record-low inventory.

Contract closings rose 3.6% from the prior month to a 5.54 million annual rate, according to National Association of Realtors data released Wednesday that exceeded all but one estimate in Bloomberg’s survey. The median sales price climbed 7.8% from a year earlier, the most since January 2016, to $274,500 as inventories declined for a seventh-straight month.

Coronavirus (COVID-19) - Guidance for Contractors

March 16, 2020
Levi W. Barrett, Steven M. Charney, Warren E. Friedman & Christopher B. Kinzel - Peckar & Abramson, P.C.

The Coronavirus has been the subject of an extraordinary amount of media coverage since the start of 2020. As we approach the end of the first quarter of the year, its impact on local and global economies and our way of life cannot be ignored. This Alert will provide the construction industry with guidance and recommendations for navigating commercial risk resulting from the Coronavirus pandemic.

The potential impacts of the Coronavirus to the construction industry are wide reaching. Consequences on a project site can include quarantines or other governmental actions resulting in impacts to the project work force. Offsite impacts can cover a much broader scope of issues including labor shortages at factories of manufacturers or fabrication facilities, resulting in production delays, transportation embargoes causing project supply issues, or governmental actions which inhibit manufacturing and production causing supply chain shortages and inabilities to service existing demands. So, what can contractors facing such impacts do to avoid losses, mitigate the impacts, and prepare for what’s to come?

Reprinted courtesy of Peckar & Abramson, P.C. attorneys Levi W. Barrett, Steven M. Charney, Warren E. Friedman and Christopher B. Kinzel
Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Charney may be contacted at scharney@pecklaw.com
Mr. Warren may be contacted at wfriedman@pecklaw.com
Mr. Christopher may be contacted at ckinzel@pecklaw.com

U.S. Homebuilder Sentiment Posts Best Two Months Since 1999

March 9, 2020
Katia Dmitrieva - Bloomberg

U.S. homebuilder sentiment posted the highest back-to-back readings since 1999, as developers saw a surge in prospective buyers and a bump in the sales outlook.

The National Association of Home Builders/Wells Fargo Housing Market Index for December and January together were the highest levels in two decades, despite weakening one point to 75 this month, according to a report Thursday. The monthly number also slightly exceeded estimates in a Bloomberg survey.

U.S. Housing Starts Surged Last Month to Highest in 13 Years

March 2, 2020
Ana Monteiro - Bloomberg

Groundbreakings on new U.S. homes surged in December to a 13-year high, giving the housing market momentum heading into the new year amid low mortgage rates, solid job growth and optimistic buyers and builders.

Residential starts rose 16.9% to a 1.61 million annualized rate after an upwardly revised 1.375 million pace in the prior month, according to government figures released Friday. The gain was the biggest in three years and well above all estimates in a Bloomberg survey. Permits, a proxy for future construction, fell 3.9% to 1.42 million.

Judge Orders New York City Tower Owner to Remove Up to 20 Floors

February 24, 2020
Mary B. Powers, Eydie Cubarrubia & Debra K. Rubin - Engineering News-Record

A New York state judge has ordered a Manhattan developer to remove floors, possibly as many as 20, on a 668-ft-tall, 52-story high-rise condominium building that he said do not comply with zoning regulations.

ENR may be contacted at ENR.com@bnpmedia.com

Federal Judge Temporarily Enjoins California From Enforcing AB 51

February 18, 2020
Jeffrey K. Brown & Raymond J. Nhan - Payne & Fears

This morning, a federal judge from the Eastern District of California granted a temporary restraining order preventing California from enforcing Assembly Bill (AB) 51.

AB 51-which was set to take effect on January 1, 2020-prohibits employers from requiring, as a condition of employment, employees to waive their right to any forum or procedure to bring claims under the Labor Code or the California Fair Employment and Housing Act. Several industry groups filed a complaint, alleging that AB 51 is preempted by the Federal Arbitration Act and violates the Supremacy Clause of the United States Constitution.

Reprinted courtesy of Jeffrey K. Brown, Payne and Fears and Raymond J. Nhan, Payne and Fears
Mr. Brown may be contacted at jkb@paynefears.com
Mr. Nhan may be contacted at rjn@paynefears.com

Homeowners’ Negligence Claims against Builder Bears Significant Relationship to Construction Contracts and Are Therefore Arbitrable

February 10, 2020
Zachary Landes - Florida Construction Law News

Recently, in Vanacore Construction, Inc. v. Osborn, 2018 Fla. App. LEXIS 18068, 2018 WL 6579205, the 5th District Court of Appeal determined that a homeowners’ claims against a builder for construction defects bore a significant relationship to the parties’ construction contracts. Therefore, the claims were arbitrable pursuant to the broadly worded arbitration provision of the contracts.

Mr. Landes may be contacted at Zachary.Landes@csklegal.com

2019 Affordable Housing Credit Improvement Act Gains Steam with Bipartisan Support

February 3, 2020
Emily K. Bias - Gravel2Gavel Construction & Real Estate Law Blog

As 2019 winds down, the Affordable Housing Credit Improvement Act of 2019 is gaining momentum in Congress. The Act, which is aimed at expanding and strengthening the low-income housing tax credit, was originally introduced in 2016. The Consolidated Appropriations Act of 2018 adopted two key provisions of the original bill—a 12.5% increase to the housing credit ceiling for years 2018-2021 and the “income averaging” minimum set-aside election. The 2019 bill reintroduces many key provisions from the original bill, along with new provisions to further bolster the housing credit. As of the end of October, more than one-third of the House and one-fourth of the Senate have signed on to co-sponsor the bill. In summary, the key proposals in the 2019 legislation would:

  • Establish a minimum 4% credit rate for tax-exempt bond financed transactions;
  • Increase the housing credit volume cap by 50% over five years;
  • Add income averaging as a third minimum set-aside test for 4% bond deals to mirror the modifications to Section 42 of the Internal Revenue Code adopted as part of the 2018 Consolidated Appropriations Act;

Ms. Bias may be contacted at emily.bias@pillsburylaw.com


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