This Week's Codes and Standards, January 7

Pittsburgh Launches Task Force on Construction Industry Fraud

The Pittsburgh City Council recently voted to establish the Joint Task Force on Construction Industry Fraud amid allegations of widespread fraud in the industry. The board will identify and combat “unfair trade practices, including tax fraud” committed by the city’s construction businesses. The focus will be on wage violations that result in underpayment or nonpayment of taxes, and low, under-the-table pay rates that prevent some workers from being able to support their families.

A carpenters union claims that Pennsylvania has lost hundreds of millions of dollars in unpaid taxes as a result of underpayment of taxes by construction firms. Though some workers who are paid off the books may be undocumented immigrants, the bill makes no mention of monitoring undocumented workers.

The task force will include representatives from the city council, mayor’s office, Pittsburgh Regional Building and Construction Trades Council, Allegheny County District Attorney’s Office, Pennsylvania Department of Labor and Industry, and the Pittsburgh Department of Permits, Licenses and Inspections.

Policymakers Need to Act to Alleviate Affordable Housing Crunch

The rate of vacant housing stock is as low as it has been in more than 30 years—a clear sign of a housing shortage for low- and middle-income households. Moody’s Analytics economist Mark Zandi writes that policymakers must take “forceful action” to alleviate the shortage. Fannie Mae and Freddie Mac could reduce mortgage rates, he writes. “Because of the recent large cut in the corporate tax rate, Fannie and Freddie could charge a lower fee but still get the same return,” he adds.

The two mortgage juggernauts account for about half of all mortgage loans made today, mostly to households with modest means, Zandi points out. “Stiff zoning restrictions, higher permitting costs and other regulations are driving up building costs, particularly in urban areas where the shortage of affordable housing is especially acute,” he writes.

Part of the answer can come from state and local authorities. State housing authorities and Community Development Financial Institutions have the flexibility necessary to supercharge affordable home-building in places encumbered by a variety of complex and costly problems, Zandi writes. “They need lawmakers to empower them.”

Safety of New York City Elevators Found Lacking in Media Investigation

An investigation by The Real Deal found that the safety of elevators in New York City buildings is threatened by lax inspections and regulatory enforcement. The real estate publication says that mechanics often have little training, inspectors regularly fail to identify hazards, and landlords escape penalties. The New York City Department of Buildings said that there were 42 passenger elevator incidents in 2018. Since 2010, at least 22 people have been killed in passenger elevators or shafts in the city.

Dozens of lawsuits are filed each year in New York over elevator-related incidents, the publication reported. Determining who is at fault when an accident occurs is often difficult, but in some cases inspectors falsified inspection reports, The Real Deal reported. In addition, building owners have failed to ensure that elevators are inspected annually, as required by law.

State lawmakers have advocated for a statewide regulation that would require all elevator mechanics to be licensed by an accredited training program, but lobbying by real estate industry groups and opposition from City Hall have stymied these efforts, the publication reported.

Wildfire Risk Making Home Insurance Tougher to Come by

As more destructive wildfires sweep through Western states, it’s becoming harder to get home insurance on properties surrounded by forest, not reachable by main roads, or on slopes where a wildfire is likely to run. Since 2014, more than 15,000 California homes in medium or extreme fire-risk areas have been forced to rely on the state’s lender of last resort, the California Fair Access to Insurance Requirements Plan.

While most homeowners in fire risk zones can get a policy, insurers often make coverage contingent on managing trees and undergrowth. Some homeowners get denied by several insurers before finding one willing to take on the risk.

Homebuyers More Willing to Pay Extra for Healthier Homes

A new KB Homes study found that customers are willing to pay more for wellness in homes than for energy savings or carbon reductions. Some real estate developers have realized impressive returns from focusing on wellness.

Some have found up to a 35% premium for wellness-branded single-family homes, and a 7% to 10% premium for wellness rentals. One key wellness element is to reduce VOCs by carefully choosing products such as OSB, cabinetry, wood floors, foam insulation, and wall-to-wall carpets and pads.

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